KONKA GROUP CO., LTD.
2015 SEMI-ANNUAL REPORT
2015-56
August 2015
1
2015 Semi-annual Report of Konka Group Co., Ltd.
Section I. Important Reminders, Contents & Definitions
The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior
management staff of Konka Group Co., Ltd. (hereinafter referred to as “the Company”) warrant that
this report is factual, accurate and complete without any false record, misleading statement or
material omission. And they shall be jointly and severally liable for that.
All directors attended the board meeting for reviewing this report.
The Company’s profit distribution preplan upon the review and approval of the Fourth Meeting of
the Eighth Board of Directors: Based on the total 1,203,972,704 shares of the Company as at 30
June 2015, 10 shares will be increased, with the capital reserves, to all shareholders for every 10
shares they hold. No cash dividends or bonus shares will be granted.
Liu Fengxi, company principal, and Xu Youshan, chief of the accounting work and the accounting
organ (chief of accounting), hereby confirm that the Financial Report enclosed in this report is
factual, accurate and complete.
This report is prepared in both Chinese and English. Should there be any discrepancy between the
two versions, the Chinese version shall prevail.
2
2015 Semi-annual Report of Konka Group Co., Ltd.
Contents
2015 Semi-annual Report.................................................................................................................. 1
Section I. Important Reminders, Contents & Definitions.............................................................. 2
Section II. Company Profile.............................................................................................................. 7
Section III. Highlights of Accounting Data & Financial Indicators............................................ 10
Section IV. Report of the Board of Directors................................................................................. 13
Section V. Significant Events........................................................................................................... 23
Section VI. Changes in Shares & Particulars about Shareholders..............................................38
Section VII. Preference Shares........................................................................................................42
Section VIII. Directors, Supervisors & Senior Management Staff..............................................43
Section IX. Financial Report........................................................................................................... 47
Section X. Documents Available for Reference............................................................................206
3
2015 Semi-annual Report of Konka Group Co., Ltd.
Definitions
Refers
Term Definition
to
Refers
Company, the Company, the Group Konka Group Co., Ltd.
to
Refers
Telecommunication Technology Shenzhen Konka Telecommunications Technology Co., Ltd.
to
Refers
Video & Communication Systems Engineering Shenzhen Konka Video & Communication Systems Engineering Co., Ltd.
to
Refers
Precision Mold Shenzhen Konka Precision Mold Manufacturing Co., Ltd.
to
Refers
Konka Household Appliances Shenzhen Konka Household Appliances Co., Ltd.
to
Refers
Information Network Shenzhen Konka Information Network Co., Ltd.
to
Refers
Plastic Products Shenzhen Konka Plastic Products Co., Ltd.
to
Refers
Electrical Appliances Shenzhen Konka Electrical Appliances Co., Ltd.
to
Refers
Fittings Technology Shenzhen Konka Electronic Fittings Technology Co., Ltd.
to
Refers
Mudanjiang Appliances Mudanjiang Arctic Ocean Appliances Co., Ltd.
to
Refers
Shanxi Konka Shanxi Konka Electronic Co., Ltd.
to
Refers
Chongqing Konka Chongqing Konka Electronic Co., Ltd.
to
Refers
Chongqing Electronic Chongqing Konka Automotive Electronic Co., Ltd.
to
Refers
Chongqing Qingjia Chongqing Qingjia Electronics Co., Ltd.
to
Refers
Anhui Konka Anhui Konka Electronic Co., Ltd.
to
Refers
Anhui Household Appliances Anhui Konka Household Appliances Co., Ltd.
to
Refers
Changshu Konka Changshu Konka Electronic Co., Ltd.
to
Refers
Kunshan Konka Kunshan Konka Electronic Co., Ltd.
to
4
2015 Semi-annual Report of Konka Group Co., Ltd.
Refers
Dongguan Konka Dongguan Konka Electronic Co., Ltd.
to
Refers
Dongguan Packing Dongguan Konka Packing Materials Co., Ltd.
to
Refers
Dongguan Mould Plastic Dongguan Konka Mould Plastic Co., Ltd.
to
Refers
Boluo Konka Boluo Konka PCB Co., Ltd.
to
Refers
Boluo Precision Boluo Konka Precision Technology Co., Ltd.
to
Refers
Nanhai Institute Konka (Nanhai) Development Center
to
Refers
Hong Kong Konka Hong Kong Konka Co., Ltd.
to
Refers
Konka Household Appliances Investment Konka Household Appliances Investment & Development Co., Ltd.
to
Konka Household Appliances International Refers
Konka Household Appliances International Trading Co., Ltd.
Trading to
Refers
Konka America Konka America, Inc.
to
Refers
Konka Europe Konka (Europe) Co., Ltd.
to
Refers
Xutongda Dongguan Xutongda Mould Plastic Co., Ltd.
to
Refers
Konka Optoelectronic Shenzhen Konka Optoelectronic Technology Co., Ltd.
to
Refers
Wankaida Shenzhen Wankaida Science and Technology Co., Ltd.
to
Refers
Kunshan Kangsheng Kunshan Kangsheng Investment Development Co., Ltd.
to
Refers
Anhui Tongchuang Anhui Konka Tongchuang Household Appliances Co., Ltd.
to
Refers
Indonesia Konka Indonesia Konka Electronics Co., Ltd.
to
Refers
Shushida Logistics Shenzhen Shushida Logistics Service Co., Ltd.
to
Refers
Beijing Konka Electronic Beijing Konka Electronic Co., Ltd.
to
Refers
Kunshan Jielunte Kunshan Jielunte Mould Plastic Co. , Ltd.
to
Refers
Wuhan Jielunte Wuhan Jielunte Mould Plastic Co. , Ltd.
to
Refers
Chuzhou Jielunte Chuzhou Jielunte Mould Plastic Co. , Ltd.
to
Konka E-display Refers Shenzhen Konka E-display Co., Ltd.
5
2015 Semi-annual Report of Konka Group Co., Ltd.
to
Refers
Xiamen Dalong Xiamen Dalong Trading Co., Ltd.
to
Refers
Youshi Kangrong Youshi Kangrong Culture Communication Co., Ltd.
to
Refers
Anhui Jiasen Anhui Jiasen Precision Technology Co., Ltd.
to
Refers
Kangqiao Jiacheng Shenzhen Kangqiao Jiacheng Property Investment Co., Ltd.
to
Refers
Konka SmartTech Konka SmartTech Limited
to
Refers
Kaikai Shijie Anhui Kaikai Shijie E-commerce Co., Ltd.
to
Refers
E2info Shenzhen E2info Network Technology Co., Ltd.
to
Refers
CSRC China Securities Regulation Commission
to
Refers
SZSE Shenzhen Stock Exchange
to
Refers
CSRC Shenzhen Bureau Shenzhen Bureau of China Securities Regulation Commission
to
Yuan, Ten thousand Yuan, One Hundred Refers
RMB Yuan, RMB Ten thousand, RMB One Hundred Million Yuan
Million Yuan to
6
2015 Semi-annual Report of Konka Group Co., Ltd.
Section II. Company Profile
I. Basic information of the Company
Stock abbreviation SKJA, SKJB Stock code 000016, 200016
Stock abbreviation after
None
change (if any)
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 康佳集团股份有限公司
Abbr. of the Chinese name of
康佳集团
the Company (if any)
English name of the Company
KONKA GROUP CO.,LTD
(if any)
Abbr. of the English name of
KONKA GROUP
the Company (if any)
Legal representative of the
Liu Fengxi
Company
II. Contact information
Company Secretary
Name Wu Yongjun
Board Secretariat, 24/F, Konka R&D Center, 28 Keji South Twelfth Road, Science and
Contact address Technology Park, Yuehai Street, Nanshan District, Shenzhen, Guangdong Province,
China
Tel. 0755-26608866
Fax 0755-26600082
E-mail szkonka@konka.com
III. Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website
address and email address of the Company during the reporting period?
√ Applicable □ Inapplicable
15-24/F, Konka R&D Center, 28 Keji South Twelfth Road, Science and
Registered address of the Company Technology Park, Yuehai Street, Nanshan District, Shenzhen, Guangdong
Province, China
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2015 Semi-annual Report of Konka Group Co., Ltd.
Zip code 518057
15-24/F, Konka R&D Center, 28 Keji South Twelfth Road, Science and
Office address of the Company Technology Park, Yuehai Street, Nanshan District, Shenzhen, Guangdong
Province, China
Zip code 518057
Internet website of the Company www.konka.com
Email address of the Company szkonka@konka.com
Date of the disclosure of the relevant
14 April 2015
announcement on the designated website (if any)
Website link for the relevant announcement
http://www.cninfo.com.cn/finalpage/2015-04-14/1200825769.PDF
disclosed on the designated website (if any)
2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the
reporting period?
√ Applicable □ Inapplicable
Newspapers designated by the Company for
Securities Times, etc.
information disclosure
Internet website designated by CSRC for disclosing
www.cninfo.com.cn
this report
Board Secretariat, 24/F, Konka R&D Center, 28 Keji South Twelfth Road,
Where this report is placed Science and Technology Park, Yuehai Street, Nanshan District, Shenzhen,
Guangdong Province, China
Date of the disclosure of the relevant announcement
14 April 2015
on the designated website (if any)
Website link for the relevant announcement
http://www.cninfo.com.cn/finalpage/2015-04-14/1200825769.PDF
disclosed on the designated website (if any)
3. Changes in the registered information
Did any change occur to the registered information during the reporting period?
√ Applicable □ Inapplicable
Business license Registration code Organizational
Registration date Registration place
No. of taxation code
Overseas Chinese
At the beginning of the Town, Nanshan
1 October 2011 440301501121863 440301618815578 618815578
reporting period District, Shenzhen,
Guangdong
8
2015 Semi-annual Report of Konka Group Co., Ltd.
Province, China
15-24/F, Konka
R&D Center, 28
Keji South Twelfth
Road, Science and
At the end of the reporting Technology Park,
1 July 2015 440301501121863 440301618815578 618815578
period Yuehai Street,
Nanshan District,
Shenzhen,
Guangdong
Province, China
Date of the disclosure of the
relevant announcement on the 14 April 2015
designated website (if any)
Website link for the relevant
announcement disclosed on http://www.cninfo.com.cn/finalpage/2015-04-14/1200825769.PDF
the designated website (if any)
9
2015 Semi-annual Report of Konka Group Co., Ltd.
Section III. Highlights of Accounting Data & Financial Indicators
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change
of any accounting policy or correction of any accounting error?
□ Yes √ No
Reporting period Same period of last year YoY +/- (%)
Operating revenues (RMB Yuan) 8,944,558,920.96 8,390,067,695.48 6.61%
Net profit attributable to shareholders of
-296,953,507.39 44,394,585.84 -768.90%
the Company (RMB Yuan)
Net profit attributable to shareholders of
the Company after extraordinary gains and -333,938,231.98 -172,899,104.31 -93.14%
losses (RMB Yuan)
Net cash flows from operating activities
70,042,909.63 1,207,928,081.12 -94.20%
(RMB Yuan)
Basic EPS (RMB Yuan/share) -0.25 0.04 -725.00%
Diluted EPS (RMB Yuan/share) -0.25 0.04 -725.00%
Weighted average ROE (%) -7.52% 1.11% -8.63%
As at the end of the
As at the end of last year +/- (%)
reporting period
Total assets (RMB Yuan) 16,132,799,097.22 16,779,359,276.65 -3.85%
Net assets attributable to shareholders of
3,797,724,449.84 4,103,478,971.07 -7.45%
the Company (RMB Yuan)
II. Differences between accounting data under domestic and overseas accounting standards
1. Differences of net profit and net assets disclosed in financial reports prepared under
international and Chinese accounting standards
□ Applicable √ Inapplicable
No difference.
2. Differences of net profit and net assets disclosed in financial reports prepared under
overseas and Chinese accounting standards
□ Applicable √ Inapplicable
No difference.
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2015 Semi-annual Report of Konka Group Co., Ltd.
III. Items and amounts of extraordinary gains and losses
√Applicable □ Inapplicable
Unit: RMB Yuan
Item Amount Explanation
Gains/losses on the disposal of non-current assets (including the
-1,192,849.90
offset part of the asset impairment provisions)
Government grants recognized in the current period, except for
those acquired in the ordinary course of business or granted at
27,769,533.09
certain quotas or amounts according to the government’s unified
standards
Gain/loss on entrusting others with investments or asset
3,442,481.04
management
Gains and losses on change in fair value from tradable financial
assets and tradable financial liabilities, as well as investment
income from disposal of tradable financial assets and tradable
2,153,880.21
financial liabilities and financial assets available for sales except
for effective hedging related with normal businesses of the
Company
Gain/loss on entrustment loans 1,669,999.98
Non-operating income and expense other than the above 5,493,353.06
Other gain and loss items that meet the definition of an
4,936,419.75
extraordinary gain/loss
Less: Income tax effects 6,314,708.35
Minority interests effects (after tax) 973,384.29
Total 36,984,724.59 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the
definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies
Offering Their Securities to the Public—Extraordinary Gains and Losses, or classifies any
extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent
gain/loss item
√ Applicable □ Inapplicable
Amount involved (RMB
Item Reason
Yuan)
Government grants closely related to the Company’s normal operation
Tax rebates on software 34,130,823.15 and constantly given at certain quotas or amounts according to the
government’s policies and standards
Total 34,130,823.15
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2015 Semi-annual Report of Konka Group Co., Ltd.
Section IV. Report of the Board of Directors
I. Overview
The Company specializes in production and operation of color TVs, digital mobile phones,
consumer appliances, set-top boxes, LED products as well as the supporting products (such as
molds, injection, packages, etc), and belongs to the industries of electronics manufacture and
telecommunication equipment manufacture.
In the reporting period, we carried on with our Internet strategy and our product mix improved with
a larger proportion of smart TVs in our total sales.
(I) In the reporting period, the proportions of smart TVs and large-screen TVs in our total sales rose
steadily, and the activated smart TV rate also increased considerably.
In the reporting period, we launched a series of smart TVs. Joining hands with Tencent, Youku and
Aliyun.com, we launched three major series—T60 Tencent Super TV, 2600 Youku TV and Aliyun
TV for online sales. In addition, we also introduced to the market quality series including X80U
Moon Goddess 4K Curved-Surface TV and 8900 TV. In the meantime, we started to cooperate with
GITV and Tencent Video, marking the increase of our Internet TV partners to a number of three.
(II) In terms of our consumer appliance business, we adjusted our sales structure by promoting the
sales of three-door, multi-door and side-by-side combination refrigerators and achieved a fast
development with e-commerce channels by making the development of e-commerce a priority. As a
result, both the sales volume and profitability of our consumer appliance business improved.
(III) As for export, we successfully attracted new customers in Latin America, the Asia-Pacific
region, etc., which boosted our overseas sales.
However, due to the fierce price competition of our main products, the profitability in our main
business saw a drop in the reporting period. In addition, our gains and losses on disposal of
non-current assets were RMB 259 million in the first half of 2014, which were mainly the
investment gain on transferring Shenzhen Konka Video & Communication Systems Engineering
Co., Ltd., while the first half of 2015 did not see such large-amount non-recurring gains. All these
caused a large drop in the net profits attributable to the shareholders of the Company for the first
half of 2015.
For the reporting period, the Company achieved operating revenues of RMB 8.945 billion, up
6.61% over the same period of last year; net profits attributable to the shareholders of the Company
of RMB -296.95 million, down 768.90% on the year-on-year basis; and EPS of RMB -0.25/share.
II. Main business analysis
YoY movements in major financial data:
Unit: RMB Yuan
12
2015 Semi-annual Report of Konka Group Co., Ltd.
Main reasons for
Reporting period Same period of last year YoY +/-%
movement
Operating revenues 8,944,558,920.96 8,390,067,695.48 6.61%
Operating costs 7,791,215,800.57 7,003,790,313.05 11.24%
Selling expenses 1,124,688,950.35 1,155,868,360.85 -2.70%
Administrative expenses 292,238,903.71 304,442,442.38 -4.01%
Financial expenses 99,066,911.17 101,860,777.24 -2.74%
Recognized in the period
deferred tax increases res
Income tax expenses -51,101,619.20 35,514,884.35 -243.89%
ult in reducedincome
tax expenses
R&D inputs 104,617,216.07 104,169,480.26 0.43%
Cash paid for purchase of
Net cash flows from
70,042,909.63 1,207,928,081.12 -94.20% goods and services with
operating activities
the growth
The period to recover pa
Net cash flows from
326,173,576.74 -779,118,652.95 141.86% yment of premium of 488
investing activities
million Yuan last year
Borrow the cash received
Net cash flows from
37,779,744.97 -579,139,400.35 106.52% for the current period
financing activities
increased
Net increase in cash and
396,244,280.00 -139,437,747.49 384.17%
cash equivalents
Major changes to the profit structure or sources of the Company during the reporting period:
√ Applicable □ Inapplicable
Due to the fierce price competition of our main products, the profitability in our main business saw
a drop in the reporting period. In addition, our gains and losses on disposal of non-current assets
were RMB 259 million in the first half of 2014, which were mainly the investment gain on
transferring Shenzhen Konka Video & Communication Systems Engineering Co., Ltd., while the
first half of 2015 did not see such large-amount non-recurring gains. All these caused a large drop in
the net profits attributable to the shareholders of the Company for the first half of 2015.
Reporting period progress of the future development planning in the disclosed documents of the
Company such as share-soliciting prospectuses, offering prospectuses, asset reorganization reports,
etc.:
□ Applicable √ Inapplicable
The Company did not mention any future planning for the reporting period in its disclosed
documents such as share-soliciting prospectuses, offering prospectuses, asset reorganization reports,
etc.
Review the progress of any previously disclosed business plan in the reporting period:
13
2015 Semi-annual Report of Konka Group Co., Ltd.
During the reporting period, adhering to our annual operational plan, we overcame difficulties and
steadily pushed forward all our operational and management tasks. In the reporting period, we
carried on with our Internet strategy and our product mix improved with a larger proportion of
smart TVs in our total sales. The sales incomes from our consumer appliance business and overseas
business both increased. However, due to the fierce price competition of our main products, the
sales income from our color TV business saw a drop, which brought down our main business
income and profits in the reporting period. For more details, see the “Overview” section above.
III. Breakdown of main business
Unit: RMB Yuan
Increase/decrease Increase/decrease Increase/decrease
of operating of operating cost of gross profit
Gross profit
Operating revenue Operating cost revenue over the over the same rate over the same
rate (%)
same period of period of last year period of last year
last year (%) (%) (%)
Classified by industry:
Electronic 8,246,299,638.18 7,161,672,404.62 13.15% -0.44% 3.07% -2.96%
Total 8,246,299,638.18 7,161,672,404.62 13.15% -0.44% 3.07% -2.96%
Classified by product:
Color TVs 5,839,273,101.30 4,998,980,729.53 14.39% -5.35% -1.57% -3.29%
Cell phones 405,882,081.01 394,112,904.23 2.90% -47.47% -44.60% -5.02%
Customer
828,393,555.30 650,002,713.45 21.53% 4.76% 2.36% 1.84%
appliances
Other 1,172,750,900.57 1,118,576,057.41 4.62% 113.25% 113.76% -0.23%
Total 8,246,299,638.18 7,161,672,404.62 13.15% -0.44% 3.07% -2.96%
Classified by region:
Domestic 4,807,213,043.19 3,897,064,692.75 18.93% -18.77% -18.29% -0.48%
Overseas 3,439,086,594.99 3,264,607,711.87 5.07% 45.44% 49.84% -2.79%
Total 8,246,299,638.18 7,161,672,404.62 13.15% -0.44% 3.07% -2.96%
IV. Core competitiveness analysis
The Company’s capability in R&D, the marketing network and manufacture constitutes its
competitive edges. Through resource integration, the Company will vigorously try to make
substantial breakthroughs in intelligent products, cloud computing, application of the internet
technology, application software, etc.. It will also try to enhance the strength and thickness of
technical innovations to increase its overall competitiveness.
14
2015 Semi-annual Report of Konka Group Co., Ltd.
V. Investment analysis
1. Investments in equities of external parties
(1) Investments in external parties
√ Applicable □ Inapplicable
Investments in external parties
Investment amount in the reporting period Investment amount in the same period of
+/-%
(RMB Yuan) last year (RMB Yuan)
66,835,410.00 7,723,300.00 765.37%
Particulars about investees
Proportion of the Company’s investment in
Name of investee Main business
the investee’s total equity interests (%)
Hunan Vary Tech Co., Ltd. Solid waste and other waste recycling, etc. 10.40%
Shenzhen Nobel Education Investment and
Education project investment, etc. 14.76%
Development Co., Ltd.
Zhuhai Jinsu Plastic Co., Ltd. Modified plastics, etc. 20.70%
Shenzhen Qianhai Qingsong Venture
Equity investment 6.00%
Capital Fund Co., Ltd.
(2) Equity-holdings in financial enterprises
□ Applicable √ Inapplicable
No such cases in the reporting period.
(3) Securities investments
√ Applicable □ Inapplicable
Gain/lo
Numbe Shareh Numbe Shareh
Initial Closing ss for
Variety Name r of olding r of olding
Code of investm book reportin Accoun Source
of of shares percent shares percent
securiti ent cost value g ting of
securiti securiti held at age at held at age at
es (RMB (RMB period title stock
es es period- period- period- period-
Yuan) Yuan) (RMB
begin begin end end
Yuan)
Availab Applic
le-for-s ation
6,500. 11,325 4,825.
Stock 002772 ZXRY 0 0.00% 500 0.00% ale for the
00 .00 00
financia new
l assets shares
Availab Applic
le-for-s ation
19,230 33,500 14,275
Stock 300485 SSYY 0 0.00% 500 0.00% ale for the
.00 .00 .00
financia new
l assets shares
15
2015 Semi-annual Report of Konka Group Co., Ltd.
Availab Applic
le-for-s ation
4,565. 6,575. 2,010.
Stock 300481 PYHC 0 0.00% 500 0.00% ale for the
00 00 00
financia new
l assets shares
Availab Applic
le-for-s ation
3,425. 4,930. 1,505.
Stock 002770 KDRY 0 0.00% 500 0.00% ale for the
00 00 00
financia new
l assets shares
Availab Applic
le-for-s ation
11,645 20,290 8,645.
Stock 002776 BBL 0 0.00% 500 0.00% ale for the
.00 .00 00
financia new
l assets shares
Availab Applic
le-for-s ation
3,765. 17,005 13,240
Stock 002766 SLGF 0 0.00% 500 0.00% ale for the
00 .00 .00
financia new
l assets shares
Other securities investment
0.00 0 -- 0 -- 0.00 0.00 -- --
held at the period-end
49,130 93,625 44,500
Total 0 -- 3,000 -- -- --
.00 .00 .00
Disclosure date of the board
announcement on approval of Inapplicable
the securities investment
Disclosure date of the general
meeting announcement on
Inapplicable
approval of the securities
investment (if any)
(4) Shareholdings in other listed companies
√ Applicable □ Inapplicable
At the period-end, the Company held the common shares of Vanke A with the initial investment cost
of RMB 2,311,748.07 and the fair value at the period-begin of RMB 1,630,609.00, the fair value at
the period-end should be calculated and recognized of RMB 1,703,341.20.
2. Wealth management entrustment, derivative investments and entrustment loans
(1) Wealth management entrustment
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Related Pay The Provision Amount
Trustee Associate Product Financial Terminati Expected
party Start date determina actual for of
name relations type amount on date benefits
transactio tion principal impairme Profit/los
16
2015 Semi-annual Report of Konka Group Co., Ltd.
ns amount nt amount s of the
(if any) reporting
period
Guarant
eed prin
Bank Short
30,June 25,Augus cipal
Mudanjia No No term finan 100 100 0 0.56 0.56
2015 t 2015 and int
ng branch ce
erest
Total 100 -- -- -- 100 0 0.56 0.56
Financial sources Own funds
Fails to recover the cumulative amount of
0
principal and earnings
Involved (if applicable) Inapplicable
Entrust the approval disclosure date for the
24, May 2014
announcement of the Board (if any)
Entrust approval announcement date of
Inapplicable
disclosure of shareholders (if any)
(2) Derivative investments
□ Applicable √ Inapplicable
No such cases in the reporting period.
(3) Entrustment loans
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Related
Amount Interest Guarantor or Usage of loan
Borrower party or
of loan rate pawn by borrower
not
Chuzhou
Economic Purchase of the
Chuzhou Tongchuang Construction Investment Co.,
No 5,000 Technology construction
Ltd.
Development materials
Corporation
Total -- 5,000 -- -- --
Expanded, overdue period or lawsuits events (if any) Inapplicable
Solutions of expanded, overdue period or lawsuits
Inapplicable
events (if any)
Disclosure date of the board announcement
Inapplicable
approving the entrustment loans (if any)
17
2015 Semi-annual Report of Konka Group Co., Ltd.
Disclosure date of the general meeting
announcement approving the entrustment loans (if Inapplicable
any)
3. Use of raised funds
□ Applicable √ Inapplicable
No such cases in the reporting period.
4. Analysis to main subsidiaries and stock-participating companies
√ Applicable □ Inapplicable
Particulars about main subsidiaries and stock-participating companies:
Unit: RMB Yuan
Main
Company Company Registered Operating Operating
Industry products/ser Total assets Net assets Net profit
name variety capital revenues profit
vices
Developme
Shenzhen
nt and
Wankaida Software
maintenanc 325,286,855.1 322,097,576.7 18,365,880.
Science and Subsidiary developmen RMB10000000 36,178,080.00 21,771,380.93
e of 4 9 14
Technology t
software
Co., Ltd.
technology
Dongguan
Production
City Xu
and sale of
Tongda Manufactur 82,696,941. 29,434,604. 84,103,163. 8,529,549.
Subsidiary mould and RMB5000000 7,240,416.80
Mould e 43 59 49 21
plastic
Plastic Co.,
products
Ltd.
Shenzhen Production
Konka and sale of
Manufactur 147,603,003.2 2,984,000.3
Information Subsidiary digital RMB30000000 652,045.90 99,506,009.01 4,191,814.58
e 2 2
Network network
Co., Ltd. products
Production
Anhui
and sale of
Konka
refrigerator
Tongchuang Manufactur s, washing RMB18000000 1,022,368,569 -12,788,506.3 768,107,346.1 1,793,529.3
Subsidiary 1,513,697.38
Household e machines 0 .91 5 3 7
Appliances and other
household
Co., Ltd.
appliances
Anhui Production
Manufactur and sale of RMB14000000 1,298,815,3 269,668,296 2,428,514,3 -17,702,35 -11,901,124.7
Konka Subsidiary
e multimedia 0 52.05 .82 46.89 9.71 4
Electronic products
18
2015 Semi-annual Report of Konka Group Co., Ltd.
Co., Ltd.
Dongguan Production
Konka and sale of
Manufactur 293,766,111 114,280,816 82,998,859. -9,735,442
Mould Subsidiary mould and RMB10000000 -8,221,585.52
e .61 .46 63 .37
Plastic Co., plastic
Ltd. products
EnRay Tek
Optoelectro Production
Joint stock Manufactur 875,265,958 640,134,316 410,435,854 -52618094.
nics and sale of USD50000000 20,881,774.05
company e .44 .09 .56 68
(Shanghai) LED
Co., Ltd.
Production
and sale of
Shenzhen
mobile
Konka
Telecommu Manufactur communica RMB12000000 317,656,816.3 -204,020,492. 370,547,236.6 -14,379,933
Subsidiary tion -4,771,454.21
nications e 0 5 13 4 .02
products &
Technology
sale of
Co., Ltd.
multimedia
products
Production
Kunshan and sale of
Konka Manufactur TFT-LCM RMB35000000 634,703,195.1 340,956,607.9 789,554,198.2 -22,234,082
Subsidiary -19,145,674.95
Electronic e and 0 2 1 2 .10
Co., Ltd. multimedia
products
Dongguan Production
Konka Manufactur and sale of RMB26667000 834,505,119.3 550,372,816.9 500,896,789.2 -42,825,749
Subsidiary -33,149,905.02
Electronic e multimedia 0 0 1 8 .56
Co., Ltd. products
Export & i
Hong Kong mport of e
Internationa 2,631,427,077 1,700,208,001 -52,621,630
Konka Co., Subsidiary lectromecha HKD500000 61,802,269.30 -53,437,493.49
l trade .20 .07 .87
Ltd. nical and e
lectronics
5. Significant projects invested with non-raised funds
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Cumulative
Total planed Input for this actual input as Project Project Disclosure date Disclosure
Project name
investment period at the progress earnings (if any) index (if any)
period-end
Kunshan 200,000 12,517 90,325 45.2% Phase I Inapplicable Inapplicable
19
2015 Semi-annual Report of Konka Group Co., Ltd.
Shuiyue dwelling
Zhouzhuang houses
Project completed,
Phase II
dwelling
houses under
construction
An income of
RMB 40.5679
million for the
reporting
period,
representing a
deficit of RMB
14.3834
million
Planning and
advisory
agency hired
through
Urban renewal
bidding.
projects of the
Currently in
headquarters 496,000 5,601 5,601 1.1% Inapplicable Inapplicable
coordination to
factory of
dismantle old
Konka Group
plants, etc. The
reporting
period saw no
income.
VI. Predict the operating results of Jan.-Sept. 2015
Warning of possible loss or considerable YoY change of the accumulated net profit made during the
period-begin to the end of the next reporting period according to prediction, as well as explanations
on the reasons:
□ Applicable √ Inapplicable
VII. Explanation by the Board of Directors and the Supervisory Committee about the
“non-standard audit report” issued by the CPAs firm for the reporting period
□ Applicable √ Inapplicable
20
2015 Semi-annual Report of Konka Group Co., Ltd.
VIII. Explanation by the Board of Directors about the “non-standard audit report” for last
year
□ Applicable √ Inapplicable
IX. Implementation of profit allocation during the reporting period
Profit allocation plan implemented during the reporting period, especially execution and adjustment
of the cash dividend plan and the plan for turning capital reserve into share capital:
√ Applicable □ Inapplicable
As reviewed at the 2014 Annual Shareholders’ General Meeting, the profit allocation plan for 2014
was decided as follows:
Dividend distribution plan: Based on the Company’s total share capital of 1,203,972,704 shares as
at the end of 2014, the Company distributed a cash dividend of RMB 0.1 (tax included) to every 10
shares. The distributed profits aggregated RMB 12,039,727.04 and the retained profit was carried
forward into the next year for distribution.
The profit allocation plan has been carried out. For A-shares, the date of record was 17 Jul. 2015
and the ex-dividend date was 20 Jul. 2015; for B-shares, the last trading date was 17 Jul. 2015, the
ex-dividend date was 20 Jul. 2015 and the date of record was 22 Jul. 2015.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and
Yes
the resolution of the general meeting:
Specific and clear dividend standard and ratio: Yes
Complete decision-making procedure and mechanism: Yes
Independent directors fulfilled their responsibilities and played
Yes
their due role:
Minority shareholders have the chance to fully express their
opinion and desire and their legal rights and interests were fully Yes
protected:
In adjustment or alteration of the cash dividend policy, the
conditions and procedure were in compliance with regulations Yes
and transparent:
X. Preplan for profit distribution and turning capital reserve into share capital in the
reporting period
√ Applicable □ Inapplicable
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RMB Yuan) (tax 0.00
21
2015 Semi-annual Report of Konka Group Co., Ltd.
included)
Increased shares for every 10 shares (share) 10
Total shares as the basis for the allocation preplan 1,203,972,704
(share)
Total cash dividends (RMB Yuan) (tax included) 0.00
Distributable profit (RMB Yuan) 0.00
Percentage of the cash dividends in the total 0.00%
distributed profit (%)
Cash dividend policy:
Other
Details about the pre-plan for profit allocation and turning capital reserve into share capital
Trough the review of the 4th Session of the 8th Board of Directors, based on the Company’s total share capital of 1,203,972,704
shares as at 30 Jun. 2015, the Company turned the capital reserve of every 10 shares into share capital for 10 shares to the whole
shareholders, and the preplan was still needed to be submitted to the Annual General Meeting for review. The plan also required the
company to shareholders.
XI. Researches, visits and interviews received in the reporting period
□ Applicable √ Inapplicable
The Company was not involved in any activity of researches, visits and interviews in the reporting
period.
Section V. Significant Events
I. Corporate governance
In the reporting period, in strict compliance with the Company Law, the Securities Law and other
relevant laws, regulations and rules governing corporate governance of listed companies, as well as
the Company’s Articles of Association, the Company kept optimizing its corporate governance
structure, promoted compliance with applicable laws and regulations in its operation, and performed
the information disclosure duty strictly in accordance with the Stock Listing Rules of the Shenzhen
Stock Exchange. All directors, supervisors and senior executives of the Company performed their
duties diligently. The Shareholders’ General Meeting, the Board of Directors and the Supervisory
Committee all operated in compliance with relevant laws and regulations. The Company’s existing
internal control rules played the role of supervision, control and guidance effectively in its
production and operation. Independence and transparency of the Company, together with a
professional board of directors, ensured that every decision of the Company was made in a
scientific procedure. The actual situation of the Company’s governance was in compliance with the
22
2015 Semi-annual Report of Konka Group Co., Ltd.
Company Law and the relevant CSRC requirements.
II. Lawsuits
Significant litigations and arbitrations
□ Applicable √ Inapplicable
There was no any significant litigation and arbitration of the Company in the reporting period.
Other lawsuits
√Applicable □ Inapplicable
Please refer to notes to
Amount
involved in Forming the Trial result and Enforcement on
Basic information Progress of
the lawsuit estimated influence of the the judgment of Disclosure Disclosure
of the lawsuit the lawsuit
(arbitration) liabilities or lawsuit the lawsuit date index
(arbitration) (arbitration)
(RMB Ten not? (arbitration) (arbitration)
thousand)
the financial s
tatements in t
he 12th chapt
er ofcommitm
ents and conti
ngencies 2nd
summary or d
escription of t
he matter.
III. Media’s queries
□Applicable √Inapplicable
There was no media’s common query during the reporting period.
IV. Bankruptcy reorganization
□ Applicable √ Inapplicable
No event involving bankruptcy reorganization occurred to the Company in the reporting period.
V. Asset transactions
1. Purchase of assets
□ Applicable √ Inapplicable
There was no purchase of assets by the Company during the reporting period.
2. Sale of assets
□ Applicable √ Inapplicable
There was no sale of assets by the Company during the reporting period.
23
2015 Semi-annual Report of Konka Group Co., Ltd.
3. Business combination
□ Applicable √ Inapplicable
No business combination occurred to the Company during the reporting period.
VI. Implementation of equity incentive and its influence
□ Applicable √ Inapplicable
The Company did not make or carry out any equity incentive plan during the reporting period.
VII. Significant related-party transactions
1. Related-party transactions concerning routine operation
√ Applicable □ Inapplicable
Proporti Obtaina
Transact on in the ble
ion total market
Type of Content Method
Related Pricing amount amounts price for Related
the s of the Transact of Disclosu Disclosu Relati
transacti Relation principl (RMB of the transacti
transacti transacti ion price settleme re date re index on
on party e Ten transacti transacti on party
on on nt
thousan ons of on of
d Yuan) the same the same
kind (%) kind
http://
www.c
ninfo.c
Anhui Under
Huali Purchas Purchas om.cn/
the same
e of e of Negotiat Market 3 Apr. finalpa
Packing actual 1,368.57 0.21% 4,000 No Cash N/A
commod material ed price price 2015 ge/201
Co., controll
ities s 5-04-0
Ltd. er
3/1200
78252
0.PDF
Shangha Under
Purchas
i Huali the same Purchas Same
e of e of Negotiat Market 3 Apr.
Packing actual 531.37 0.08% 2,000 No Cash N/A as
commod material ed price price 2015
Co., controll above
ities s
Ltd. er
Huali Under Purchas
Packing the same Purchas Same
e of e of Negotiat Market 3 Apr.
(Huizho actual 506.21 0.08% 2,000 No Cash N/A as
commod material ed price price 2015
u) Co., controll above
ities s
Ltd. er
Total -- -- 2,406.15 -- 8,000 -- -- -- -- --
Details of large amount of sales
Inapplicable
returns
24
2015 Semi-annual Report of Konka Group Co., Ltd.
The Company has published the Forecasting Public Notice on Routine Related Transaction
As for the prediction on the total
for Y2015 (public notice No. 2015-03) on Securities Times, Shanghai Securities News,
amount of routine related-party
China Securities Journal and Hong Kong Ta Kung Pao as well as the Internet website
transactions to be occurred in the
designated by CSRC http://www.cninfo.com.cn on 3 Apr. 2015. In the reporting period, the
reporting period by relevant types,
basis for pricing, transaction price, transaction amount and settlement methods of raw
the actual performance in the
materials purchased by the Company were basically in accordance with the forecast. The
reporting period (if any)
total amount was RMB 2,406.14 million.
Reason for significant difference
The transaction price was fixed by referring to the market price, which had not any
between the transaction price and the
significant difference with the market price.
market price
2. Related-party transactions arising from acquisition and sale of assets
□ Applicable √ Inapplicable
There was no any related-party transaction arising from acquisition and sale of assets.
3. Related-party transactions arising from joint investment in external parties
√ Applicable □ Inapplicable
Main Registered Total assets Net assets of Net profit of
Pricing Name of
Joint investor Relationship business of capital of of investee investee investee
principle investee
investee investee (RMB 0’000) (RMB 0’000) (RMB 0’000)
Both
contributed in
cash. The
Company
contributed Investment,
RMB 700 development
Shenzhen
OCT is the million, and operation
OCT Kangqiao
controlling representing of the real
Enterprises Jiacheng Real RMB 1
shareholder a stake of estate 15,986.05 15,945.65 -54.35
Co. and the Estate billion
of the 70%; and projects in
Company Investment
Company. OCT the plant area
Co., Ltd.
contributed of the Konka
RMB 300 Headquarters
million,
representing
a stake of
30%.
According to the Proposal on the Cooperation Development Plan of the Urban Renewal Projects of
the Headquarters Factory of Konka Group which be reviewed and approved by the 2nd Extraordinary
Progress of any significant
General Meeting held on 8 Dec. 2014 by the Company, the Company and the OCT Group set up the
construction in process of
Shenzhen Kangqiao Jiacheng Real Estate Investment Co., Ltd. by joint capital . And recently the
the investee (if any)
urban renewal projects of the original headquarters factory of Konka Group had completed the bid
inviting of the planning consulting unit and is harmoniously promoting the dismantling work of the
25
2015 Semi-annual Report of Konka Group Co., Ltd.
old plant area and so on.
Notes: if had been disclosed on the interim report but there was on any progress or change of the
follow-up execution, the section could select the “inapplicable”, while still needed to be
summarized by disclosing on the other related transactions of notes 5 of the section and should
provide the relevant index of the inquiry on the interim report disclosure website.
4. Credits and liabilities with related parties
□ Applicable √ Inapplicable
There was no any credit and liability with related parties of the Company in the reporting period.
5. Other related-party transactions
√ Applicable □ Inapplicable
Due to production and operation needs, we have planned to sell LCD to and purchase whole TVs
from HuiKe Electronics (Shenzhen) Co., Ltd. (“HKC”). It is expected that during the period from
18 Jun. 2015 to 18 Jun. 2016, we will sell LCD to HKC under the amount of RMB 70 million and
purchase whole TVs from HKC under the amount of RMB 120 million.
The related-party transactions between us and HKC amounted to RMB 0 during the reporting
period.
For details, see the Company’s announcement on expected routine related-party transactions
disclosed on www.cninfo.com.cn dated 29 Jul. 2015.
Announcement title Date of disclosure Website of disclosure
Announcement on Expected Routine
29 Jul. 2015 www.cninfo.com.cn
Related-Party Transactions
.
VIII. Occupation of the Company’s funds for non-operating purposes by the controlling
shareholder and its related parties
□ Applicable √ Inapplicable
The controlling shareholder or its related parties did not occupy the Company’s funds for
non-operating purposes during the reporting period.
IX. Significant contracts and fulfillment thereof
1. Trusteeship, contracting and leasing
(1) Trusteeship
□ Applicable √ Inapplicable
The Company did not make any entrustment in the reporting period.
(2) Contracting
□ Applicable √ Inapplicable
The Company was not involved in any contracting in the reporting period.
26
2015 Semi-annual Report of Konka Group Co., Ltd.
(3) Leasing
√ Applicable □ Inapplicable
Particulars about lease: The Company’s Research and Development Building is rent with annual
income of RMB 3315.35 in the first half of 2015.
Any leasing event incurring gain/loss reaching more than 10% of the total profits of the Company in
the reporting period
□ Applicable √ Inapplicable
No leasing event incurred gain/loss reaching more than 10% of the total profits of the Company in
the reporting period.
2. Guarantees provided by the Company
Unit: RMB Ten Thousand Yuan
Guarantees provided by the company for external parties (excluding those for subsidiaries)
Disclosure
date on Guarante
Actual
relevant Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party announcem guarantee related
guarantee (date of guarantee guarantee or not
ent of amount party or
agreement)
guaranteed not
amount
No No 0 No 0 0 No No
Total external guarantee line Total actual occurred amount
approved during the reporting 0 of external guarantee during 0
period (A1) the reporting period (A2)
Total external guarantee line Total actual external guarantee
that has been approved at the 0 balance at the end of the 0
end of the reporting period (A3) reporting period (A4)
Guarantees provided by the Company for its subsidiaries
Disclosure
date of Guarante
Actual
relevant Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party announcem guarantee related
guarantee (date of guarantee guarantee or not
ent on the amount party or
agreement)
guarantee not
amount
Anhui Konka
21 Nov. General
Electronic Co., 20,000 26 Dec. 2014 7,761.57 1 year No No
2014 guaranty
Ltd.
Anhui Konka
21 Nov. General
Electronic Co., 20,000 12 Mar. 2015 610.79 1 year No No
2014 guaranty
Ltd.
27
2015 Semi-annual Report of Konka Group Co., Ltd.
Anhui Konka
21 Nov. General
Electronic Co., 20,000 10 Apr. 2015 1,997.67 1 year No No
2014 guaranty
Ltd.
Anhui Konka
21 Nov. General
Electronic Co., 20,000 14 May 2015 3,537.20 1 year No No
2014 guaranty
Ltd.
Anhui Konka
21 Nov. General
Electronic Co., 20,000 19 May 2015 4,259.39 1 year No No
2014 guaranty
Ltd.
Anhui Konka
Tongchuang
21 Nov. General
Household 30,000 30 Jan. 2015 8,000 1 year No No
2014 guaranty
Appliances Co.,
Ltd.
Anhui Konka
Tongchuang
21 Nov. General
Household 30,000 18 Nov. 2014 10,500 1 year No No
2014 guaranty
Appliances Co.,
Ltd.
Anhui Konka
Tongchuang
21 Nov. General
Household 30,000 2 Jun. 2015 2,000 1 year No No
2014 guaranty
Appliances Co.,
Ltd.
Kunshan Konka
21 Nov. General
Electronic Co., 30,000 26 Dec. 2014 5,214.15 1 year No No
2014 guaranty
Ltd.
Shenzhen Konka
Communication 21 Nov. General
60,000 22 Apr. 2015 50,000 1 year No No
technology Co., 2014 guaranty
Ltd.
Shenzhen Konka
Communication 21 Nov. General
60,000 28 Jan. 2015 10,000 1 year No No
technology Co., 2014 guaranty
Ltd.
E-display
21 Nov. General
Commercial 4,800 27 Jan. 2015 2,000 1 year No No
2014 guaranty
Display Co., Ltd.
Hong Kong Konka 30 Sep. General
307,500 10 Oct. 2014 6,110 1 year No No
Co., Ltd. 2013 guaranty
Hong Kong Konka 30 Sep. 307,500 12 Nov. 2014 7,800 General 1 year No No
28
2015 Semi-annual Report of Konka Group Co., Ltd.
Co., Ltd. 2013 guaranty
Hong Kong Konka 30 Sep. General
307,500 17 Nov. 2014 18,330 1 year No No
Co., Ltd. 2013 guaranty
Hong Kong Konka 30 Sep. General
307,500 20 Nov. 2014 27,495 1 year No No
Co., Ltd. 2013 guaranty
Hong Kong Konka 30 Sep. General
307,500 15 Jan. 2015 30,550 2 years No No
Co., Ltd. 2013 guaranty
Hong Kong Konka 30 Sep. General
307,500 28 Jul. 2014 42,220 2 years No No
Co., Ltd. 2013 guaranty
Hong Kong Konka 30 Sep. General
307,500 17 Sep. 2014 18,880 2 years No No
Co., Ltd. 2013 guaranty
Hong Kong Konka 30 Sep. General
307,500 23 Mar. 2015 15,092 1 year No No
Co., Ltd. 2013 guaranty
Hong Kong Konka 30 Sep. General
307,500 29 May 2015 15,458 1 year No No
Co., Ltd. 2013 guaranty
Hong Kong Konka 30 Sep. General
307,500 26 Jan 2015 24,440 1 year No No
Co., Ltd. 2013 guaranty
Hong Kong Konka 30 Sep. General
307,500 1 Apr. 2015 14,800 8 months No No
Co., Ltd. 2013 guaranty
Total actual occurred amount
Total guarantee line approved
of guarantee for the
for the subsidiaries during the 0 152,195.05
subsidiaries during the
reporting period (B1)
reporting period (B2)
Total guarantee line that has
Total actual guarantee balance
been approved for the
477,050 for the subsidiaries at the end 327,055.77
subsidiaries at the end of the
of the reporting period (B4)
reporting period (B3)
Guarantees provided by the subsidiaries for the subsidiaries
Disclosure
date of Guarante
Actual
relevant Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party announcem guarantee related
guarantee (date of guarantee guarantee or not
ent on the amount party or
agreement)
guarantee not
amount
Dongguan Konka
27 Apr. Joint liability
Mould Plastic Co., 4,631 6 Feb. 2015 234.79 6 months No No
2013 guaranty
Ltd.
Dongguan Konka 27 Apr. Joint liability
4,631 21 Jan. 2015 136.61 6 months No No
Mould Plastic Co., 2013 guaranty
29
2015 Semi-annual Report of Konka Group Co., Ltd.
Ltd.
Dongguan Konka
27 Apr. Joint liability
Mould Plastic Co., 4,631 10 Feb. 2015 263.97 6 months No No
2013 guaranty
Ltd.
Dongguan Konka
27 Apr. Joint liability
Mould Plastic Co., 4,631 16 Mar. 2015 200.99 6 months No No
2013 guaranty
Ltd.
Dongguan Konka
27 Apr. Joint liability
Mould Plastic Co., 4,631 1 Apr. 2015 84.28 6 months No No
2013 guaranty
Ltd.
Dongguan Konka
27 Apr. Joint liability
Mould Plastic Co., 4,631 21 Apr. 2015 137.08 6 months No No
2013 guaranty
Ltd.
Dongguan Konka
27 Apr. Joint liability
Mould Plastic Co., 4,631 18 Jan. 2015 132.91 6 months No No
2013 guaranty
Ltd.
Dongguan Konka
27 Apr. Joint liability
Mould Plastic Co., 4,631 16 Jan. 2015 163.94 6 months No No
2013 guaranty
Ltd.
Kunshan Geraint
29 Sep. Joint liability
Mould Plastic Co., 23,155 21 Jan. 2014 361.22 2year No No
2013 guaranty
Ltd.
Kunshan Geraint
29 Sep. Joint liability
Mould Plastic Co., 23,155 28 Nov. 2014 78.73 1 year No No
2013 guaranty
Ltd.
Kunshan Geraint
29 Sep. Joint liability
Mould Plastic Co., 23,155 8 Dec. 2014 60.20 1 year No No
2013 guaranty
Ltd.
Kunshan Geraint
29 Sep. Joint liability
Mould Plastic Co., 23,155 3 Dec. 2014 213.03 1 year No No
2013 guaranty
Ltd.
Kunshan Geraint
29 Sep. Joint liability
Mould Plastic Co., 23,155 12Feb. 2015 32.42 1 year No No
2013 guaranty
Ltd.
Kunshan Geraint
29 Sep. Joint liability
Mould Plastic Co., 23,155 5 Feb. 2015 245.44 1 year No No
2013 guaranty
Ltd.
Total guarantee line approved Total actual occurred amount
for the subsidiaries during the 0 of guarantee for the 1,632.43
reporting period (C1) subsidiaries during the
30
2015 Semi-annual Report of Konka Group Co., Ltd.
reporting period (C2)
Total guarantee line that has
Total actual guarantee balance
been approved for the
27,786 for the subsidiaries at the end 2,345.61
subsidiaries at the end of the
of the reporting period (C4)
reporting period (C3)
Total guarantee amount provided by the Company (total of the above-mentioned three kinds of guarantees)
Total guarantee line approved Total actual occurred amount
during the reporting period 0 of guarantee during the 153,827.48
(A1+B1+C1) reporting period (A2+B2+C2)
Total guarantee line that has
Total actual guarantee balance
been approved at the end of the
504,836 at the end of the reporting 329,401.38
reporting period
period (A4+B4+C4)
(A3+B3+C3)
Proportion of total guarantee amount (A4+B4+C4) to the net
86.74%
assets of the Company
Of which:
Amount of guarantee for shareholders, actual controller and
0
related parties (D)
Amount of debt guarantee provided for the guaranteed party
whose asset-liability ratio is not less than 70% directly or 329,401.38
indirectly (E)
Part of the amount of the total guarantee over 50% of net
139,515.16
assets (F)
Total amount of the above three guarantees (D+E+F) 468,916.53
Explanation on possible bearing joint responsibility of
Inapplicable
liquidation due to immature guarantee (if any)
Explanation on provision of guarantees for external parties in
Inapplicable
violation of the prescribed procedure (if any)
Explanation on guarantee that adopts complex method
There was no any guarantee that adopted complex method of the Company during the reporting
period.
(1) Illegal provision of guarantees for external parties
□ Applicable √ Inapplicable
The Company did not illegally provide any guarantee for any external party in the reporting period.
3. Other significant contracts
□ Applicable √ Inapplicable
There was no other significant contract of the Company in the reporting period.
4. Other significant transactions
31
2015 Semi-annual Report of Konka Group Co., Ltd.
□ Applicable √ Inapplicable
The Company was not involved in any other significant transaction in the reporting period.
X. Commitments made by the Company or any shareholder holding over 5% of the
Company’s shares in the reporting period or such commitments carried down into the
reporting period
□ Applicable √ Inapplicable
No such commitments in the reporting period.
XI. Engagement and disengagement of the CPAs firm
Has the semi-annual financial report been audited?
√ Yes □ No
Name of domestic CPAs firm of auditing the semi-annual financial
Ruihua Certified Public Accountants (LLP)
report
Remuneration of domestic CPAs firm of auditing the semi-annual
90
financial report (RMB Ten Thousand Yuan)
Change the CPAs firm of the audit of the audit of the semi-annual financial report compared to the
2014 annual report or not?
□ Yes √ No
XII. Punishment and rectification
□ Applicable √ Inapplicable
No such cases in the reporting period.
XIII. Delisting risk due to violation of laws or regulations
□ Applicable √ Inapplicable
No such risk in the reporting period.
XIV. Other significant events
√ Applicable □ Inapplicable
Link
No. Time Name of announcement Page
www.cninfo.com.cn
First half year of 2015
Announcement on Securities Times B60, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-01 2015-3-28
Receipt of Tax Rebates Kung Pao B2 03-28/1200753459.PDF
Announcement on the
Resolution of the 15th Securities Times B73, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-02 2015-4-3
th
Session of the 7 Board Kung Pao B16-B18 04-03/1200782527.PDF
of Supervisors
Forecasting Public Notice
Securities Times B73, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-03 2015-4-3 on Routine Related
Kung Pao B16-B18 04-03/1200782520.PDF
Transaction for Y2015
Notice of Holding the Securities Times B73, B74, http://www.cninfo.com.cn/finalpage/2015-
2015-04 2015-4-3
Y2014 Annual General Ta Kung Pao B16-B18 04-03/1200782525.PDF
32
2015 Semi-annual Report of Konka Group Co., Ltd.
Meeting
Announcement on the
Securities Times B73, B74, http://www.cninfo.com.cn/finalpage/2015-
2015-05 2015-4-3 Changes of Part of the
Ta Kung Pao B16-B18 04-03/1200782538.PDF
Accounting Policies
Abstract of the Y2014
Securities Times B73, B74, http://www.cninfo.com.cn/finalpage/2015-
2015-06 2015-4-3 Annual Report of the
Ta Kung Pao B16-B18 04-03/1200782521.PDF
Konka Group Co., Ltd.
Securities Times B73, B74, http://www.cninfo.com.cn/finalpage/2015-
2015-07 2015-4-3 Y2014 Annual Report
Ta Kung Pao B16-B18 04-03/1200782530.PDF
Announcement on the
Resolution of the 71st Securities Times B73, B74, http://www.cninfo.com.cn/finalpage/2015-
2015-08 2015-4-3
th
Session of the 7 Board Ta Kung Pao B16-B18 04-03/1200782524.PDF
of Directors
Declaration of the
Nominators of the
Securities Times B73, B74, http://www.cninfo.com.cn/finalpage/2015-
2015-09 2015-4-3 Independent Directors of
Ta Kung Pao B16-B18 04-03/1200782537.PDF
the Listed Companies (Di
Xiaofeng)
Declaration of the
Nominators of the
Securities Times B73, B74, http://www.cninfo.com.cn/finalpage/2015-
2015-10 2015-4-3 Independent Directors of
Ta Kung Pao B16-B18 04-03/1200782536.PDF
the Listed Companies (Li
Luoli)
Declaration of the
Nominators of the
Securities Times B73, B74, http://www.cninfo.com.cn/finalpage/2015-
2015-11 2015-4-3 Independent Directors of
Ta Kung Pao B16-B18 04-03/1200782535.PDF
the Listed Companies
(Zhang Shuhua)
Declaration of the
Candidates of the
Securities Times B73, B74, http://www.cninfo.com.cn/finalpage/2015-
2015-12 2015-4-3 Independent Directors of
Ta Kung Pao B16-B18 04-03/1200782534.PDF
the Listed Companies (Di
Xiaofeng)
Declaration of the
Candidates of the
Securities Times B73, B74, http://www.cninfo.com.cn/finalpage/2015-
2015-13 2015-4-3 Independent Directors of
Ta Kung Pao B16-B18 04-03/1200782533.PDF
the Listed Companies (Li
Luoli)
Declaration of the
Candidates of the
Securities Times B73, B74, http://www.cninfo.com.cn/finalpage/2015-
2015-14 2015-4-3 Independent Directors of
Ta Kung Pao B16-B18 04-03/1200782532.PDF
the Listed Companies
(Zhang Shuhua)
33
2015 Semi-annual Report of Konka Group Co., Ltd.
Announcement on the
Securities Times B40, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-15 2015-4-14 Changes of the Office
Kung Pao B7 04-14/1200825769.PDF
Location of the Company
Announcement on the
Securities Times B80, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-16 2015-4-16 Stock Trading Abnormal
Kung Pao B2 04-16/1200839341.PDF
Fluctuations
Test of the Y2015 First Securities Times B76, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-17 2015-4-29
Quarter Report (Chinese) Kung Pao A20 04-29/1200930942.PDF
Full Test of the Y2015
Securities Times B76, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-18 2015-4-29 First Quarter Report
Kung Pao A20 04-29/1200930945.PDF
(Chinese)
Announcement on the
Securities Times B80, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-19 2015-5-8 Stock Trading Abnormal
Kung Pao B1 05-08/1200979093.PDF
Fluctuations
Announcement on the
Securities Times B68, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-20 2015-5-13 Stock Trading Abnormal
Kung Pao B3 05-13/1201006433.PDF
Fluctuations
Announcement on the
Shareholders Increasing
Securities Times B85, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-21 2015-5-15 the Candidates of the
Kung Pao B8 05-15/1201015562.PDF
Nominated Directors and
Supervisors
Notice of Holding the
Securities Times B85, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-22 2015-5-15 Y2014 Annual General
Kung Pao B8 05-15/1201015561.PDF
Meeting (renewed)
Declaration of the
Securities Times B85, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-23 2015-5-15 Candidates of the
Kung Pao B8 05-15/1201015563.PDF
Independent Directors
Declaration of the
Securities Times B85, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-24 2015-5-15 Nominators of the
Kung Pao B8 05-15/1201015564.PDF
Independent Directors
Announcement on the
Shareholders Increasing
Securities Times B37, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-25 2015-5-16 the Candidates of the
Kung Pao B11 05-16/1201020163.PDF
Nominated Directors and
Supervisors
Notice of Holding the
Y2014 Annual General Securities Times B37, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-26 2015-5-16
Meeting (after the second Kung Pao B11 05-16/1201020162.PDF
renewal)
Declaration of the
Nominators of the Securities Times B37, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-27 2015-5-16
Independent Directors Kung Pao B11 05-16/1201020165.PDF
(Xiao Zuhe)
34
2015 Semi-annual Report of Konka Group Co., Ltd.
Declaration of the
Candidatures of the Securities Times B37, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-28 2015-5-16
Independent Directors Kung Pao B11 05-16/1201020164.PDF
(Xiao Zuhe)
Indicative Announcement
on the Controlling
Shareholders of Securities Times B49, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-29 2015-5-19
Increasing the Kung Pao 11 05-19/1201031184.PDF
Shareholding of the
Shares of the Company
Detailed Report of the Securities Times B49, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-5-19
Changes of the Equities Kung Pao 11 05-19/1201031185.PDF
Announcement on the
Resolution of the 73rd Securities Times B37, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-30 2015-5-20
Session of the 7th Board Kung Pao B2 05-20/1201035530.PDF
of Directors
Indicative Announcement
Securities Times B53, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-31 2015-5-23 on Holding the Y2014
Kung Pao A23 05-23/1201049180.PDF
Annual General Meeting
Announcement on the
Securities Times B45, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-32 2015-5-27 General Election of the
Kung Pao B19 05-27/1201065868.PDF
Employee Supervisors
Announcement on the
Securities Times B4, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-33 2015-5-29 Resolution of the Y2014
Kung Pao B2 05-29/1201078987.PDF
Annual General Meeting
Announcement on the
Securities Times B60, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-34 2015-5-30 Listing Suspension of the
Kung Pao B2 05-30/1201082236.PDF
Significant Events
Announcement on the
Securities Times B60, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-35 2015-6-5 Trading Resumption of
Kung Pao B3 06-05/1201106173.PDF
the Significant Events
Announcement on the
Resolution of the 1st Securities Times B60, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-36 2015-6-5
th
Session of the 8 Board Kung Pao B3 06-05/1201106172.PDF
of Directors
Announcement on the
Resolution of the 1st Securities Times B60, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-37 2015-6-5
th
Session of the 8 Board Kung Pao B3 06-05/1201106171.PDF
of Supervisors
Announcement on the
Securities Times B36, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-38 2015-6-12 Listing Suspension of the
Kung Pao B2 06-12/1201139697.PDF
Significant Events
Announcement on the Securities Times B36, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-39 2015-6-12
Stock Trading Abnormal Kung Pao B2 06-12/1201139696.PDF
35
2015 Semi-annual Report of Konka Group Co., Ltd.
Fluctuations
Announcement on the
Resolution of the 2nd Securities Times B60, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-40 2015-6-19
th
Session of the 8 Board Kung Pao B2 06-19/1201168695.PDF
of Directors
Announcement on the
Securities Times B60, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-41 2015-6-19 Progress of the
Kung Pao B2 06-19/1201168694.PDF
Significant Events
Announcement on the
Securities Times B37, Ta http://www.cninfo.com.cn/finalpage/2015-
2015-42 2015-6-27 Progress of the
Kung Pao B9 06-27/1201200899.PDF
Significant Events
36
2015 Semi-annual Report of Konka Group Co., Ltd.
Section VI. Changes in Shares & Particulars about Shareholders
I. Change in shares
Unit: Share
Before the change Increase/decrease in the change (+,-) After the change
Capitalizat
Issuance ion of
Bonus Proportio
Number Proportion of new public Other Subtotal Number
shares n
shares reserve
fund
I. Shares subject to trading 198,381,94 198,445,3
16.48% 63,405 63,405 16.49%
moratorium 0 45
2. Shares held by 198,381,94 198,381,9
16.48% 16.48%
state-owned corporation 0 40
3, other domestic
63,405 63,405 63,405 0.01%
holdings
Shares held by the
63,405 63,405 63,405 0.01%
domestic individuals
II. Shares not subject to 1,005,590, 1,005,527
83.52% -63,405 -63,405 83.51%
trading moratorium 764 ,359
599,914,96 599,914,9
1. RMB ordinary shares 49.83% 49.83%
0 60
2. Domestically listed 405,675,80 405,612,3
33.69% -63,405 -63,405 33.68%
foreign shares 4 99
1,203,972, 1,203,972
III. Total shares 100.00% 0 0 100.00%
704 ,704
Notes: on 28 May 2015 of the Y2014 Annual General Meeting, Mr. Zhang Guanghui be
selected as the Supervisor of the Company, who held 84,540 shares of the shares of the
Company and according to the stipulations of the relevant laws and regulations, 63,405 shares
of which were the shares subjecting to trading moratorium.
Reasons for changes in shares
□ Applicable √ Inapplicable
Approval of share changes
□ Applicable √ Inapplicable
Transfer of share ownership
□ Applicable √ Inapplicable
Effects of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to
37
2015 Semi-annual Report of Konka Group Co., Ltd.
common shareholders of the Company and other financial indexes over the last year and the last
reporting period
□ Applicable √ Inapplicable
Other contents that the Company considers necessary or is required by the securities regulatory
authorities to disclose
□ Applicable √ Inapplicable
Change of the total shares, shareholder structure, asset structure and liability structure
□ Applicable √ Inapplicable
II. Total number of shareholders and their shareholdings
Unit: Share
Total number of preferred share
Total number of common holders who had resumed their
shareholders at the end of the 51,744 voting right at the end of the 0
reporting period reporting period (if any) (see
note 8)
Shareholdings of common shareholders holding more than 5% shares or top 10 shareholders
Number Increase/de Pledged or frozen shares
Number
Shareholdin of shares crease of Number of
of
Name of Nature of g held at the shares non-restrict
restricted Status of
shareholder shareholder percentage end of the during the ed shares Number of shares
shares shares
(%) reporting reporting held
held
period period
OCT State-owned 261,873,4 198,381,9 Pledged 0
21.75% 0 63,491,526
Enterprises Co. corporation 66 40 Frozen 0
CITIC Pledged 0
Securities
Foreign 90,000,55
Brokerage 7.48% 90,000,555 0 90,000,555
corporation 5 Frozen 0
(Hong Kong)
Co., Ltd.
Guoyuan Pledged 0
Securities Foreign 33,860,30
2.81% 19,815,409 0 33,860,309
Broker (HK) corporation 9 Frozen 0
Co., Ltd.
China Pledged 0
Resources SCP
Domestic
Trust Co., Ltd. 29,878,72
non-state-owned 2.48% 6,762,855 0 29,878,723
－Extraordinary 3 Frozen 0
corporation
No. 18 Capital
Trust
Gaoling Foreign 2.19% 26,400,62 0 0 26,400,625 Pledged 0
38
2015 Semi-annual Report of Konka Group Co., Ltd.
Fund,L.P. corporation 5 Frozen 0
Holy Time Foreign 26,290,17 Pledged 0
2.18% -20,243,438 0 26,290,177
Group Limited corporation 7 Frozen 0
China Pledged 0
Resources SCP
Domestic
Trust Co., Ltd. 24,083,85
non-state-owned 2.00% 7,661,215 0 24,083,850
－Extraordinary 0 Frozen 0
corporation
No. 17 Capital
Trust
Domestic 16,878,11 Pledged 0
Sun Zhenxiang 1.40% 2,784,128 0 16,878,116
individual 6 Frozen 0
National Social Pledged 0
13,702,68
Security Fund Others 1.14% 13,702,689 0 13,702,689
9 Frozen 0
118 Group
11,690,52 Pledged 0
Nam Ngai Foreign individual 0.97% 0 0 11,690,520
0 Frozen 0
Strategic investor or general
corporation becoming a top ten
N/A
shareholder due to placing of new
shares (if any)
Jialong Investment Limited, a wholly-funded subsidiary of the Company’s first majority
Explanation on associated
shareholder OCT Enterprises Co., holds 90,000,555 common shares in the Company through
relationship or/and persons acting in
CITIC Securities Brokerage (Hong Kong) Co., Ltd. Therefore, Jialong Investment Limited
concert among the above-mentioned
and OCT Enterprises Co. are parties acting in concert. The Company does not know whether
shareholders:
the other shareholders are related parties and whether they are acting-in-concert parties.
Particulars about shares held by the top ten common shareholders holding shares not subject to trading moratorium
Type of shares
Name of shareholder Number of tradable shares held at the period-end
Type Number
Domestically
CITIC Securities Brokerage (Hong
90,000,555 listed foreign 90,000,555
Kong) Co., Ltd.
shares
RMB ordinary
OCT Enterprises Co. 63,491,526 63,491,526
share
Domestically
Guoyuan Securities Broker (HK)
33,860,309 listed foreign 333,860,309
Co., Ltd.
shares
China Resources SCP Trust Co.,
RMB ordinary
Ltd.－Extraordinary No. 18 Capital 29,878,723 29,878,723
share
Trust
39
2015 Semi-annual Report of Konka Group Co., Ltd.
Domestically
Gaoling Fund,L.P. 26,400,625 listed foreign 26,400,625
shares
Domestically
Holy Time Group Limited 26,290,177 listed foreign 26,290,177
shares
China Resources SCP Trust Co.,
RMB ordinary
Ltd.－Extraordinary No. 17 Capital 24,083,850 24,083,850
share
Trust
RMB ordinary
Sun Zhenxiang 16,878,116 16,878,116
share
National Social Security Fund 118 RMB ordinary
13,702,689 13,702,689
Group share
Domestically
Nam Ngai 11,690,520 listed foreign 11,690,520
shares
Explanation on associated
Jialong Investment Limited, a wholly-funded subsidiary of the Company’s first majority
relationship or/and persons acting in
shareholder OCT Enterprises Co., holds 90,000,555 common shares in the Company through
concert among the top ten tradable
CITIC Securities Brokerage (Hong Kong) Co., Ltd. Therefore, Jialong Investment Limited
shareholders and between the top
and OCT Enterprises Co. are parties acting in concert. The Company does not know whether
ten tradable shareholders and the
the other shareholders are related parties and whether they are acting-in-concert parties.
top ten shareholders
Explanation on the Top 10
shareholders participating in the Sun Zhenxiang holds 11,386,300 A-shares through a client credit trading guarantee securities
margin trading business (if any) (see account of GF Securities Co., Ltd.
notes 4)
Did any of the Company’s top 10 common shareholders or top 10 non-restricted common
shareholders conduct any agreed buy-back in the reporting period?
□ Yes √ No
No such cases in the reporting period.
III. Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the reporting period
□ Applicable √ Inapplicable
The controlling shareholder of the Company did not change in the reporting period.
Change of the actual controller in the reporting period
□ Applicable √ Inapplicable
The actual controller of the Company did not change in the reporting period.
IV. Any shareholding increase plan proposed or implemented by any shareholder or its
act-in-concert party during the reporting period
□ Applicable √ Inapplicable
40
2015 Semi-annual Report of Konka Group Co., Ltd.
To the best knowledge of the Company, no shareholder or its act-in-concert party proposed or
implemented any shareholding increase plan during the reporting period.
41
2015 Semi-annual Report of Konka Group Co., Ltd.
Section VII. Preference Shares
□ Applicable √ Inapplicable
There was no any preference share of the Company in the reporting period.
42
2015 Semi-annual Report of Konka Group Co., Ltd.
Section VIII. Directors, Supervisors & Senior Management Staff
I. Change of shareholdings of directors, supervisors and senior management staff
√ Applicable □ Inapplicable
Number of Number of
Number of Number of
Number of shares shares Number of Number of
granted restricted
shares held increased decreased shares held granted restricted
Incumbent restricted shares
Name Office title at the at at at the shares at the
/former shares at the granted in
period-beg reporting reporting period-end period-end
period-begin reporting
in (share) period period (share) (share)
(share) period (share)
(share) (share)
Chairman
Liu Fengxi of the Current 0 0 0 0 0 0 0
Board
Jin
Director Current 0 0 0 0 0 0 0
Qingjun
Chen
Director Current 0 0 0 0 0 0 0
Yuehua
Director,
Song
Vice Current 0 0 0 0 0 0 0
Zhenhua
President
Independe
Zhang Min Current 0 0 0 0 0 0 0
nt Director
Independe
Xiao Zuhe Current 0 0 0 0 0 0 0
nt Director
Zhang Independe
Current 0 0 0 0 0 0 0
Shuhua nt Director
Supervisor
Hao Gang Current 0 0 0 0 0 0 0
y
Zhang
Supervisor Current 0 84,540 0 84,540 0 0 0
Guanghui
Employee
Li Jun Supervisor Current 0 0 0 0 0 0 0
s
Liu Dan President Current 0 0 0 0 0 0 0
Executive
Xiao Qing Vice Current 0 0 0 0 0 0 0
President
43
2015 Semi-annual Report of Konka Group Co., Ltd.
Huang Vice
Current 0 0 0 0 0 0 0
Zhongtian President
Vice
He Jianjun Current 0 0 0 0 0 0 0
President
Vice
Lin Gaike Current 0 0 0 0 0 0 0
President
Vice
Wan Libo Current 0 0 0 0 0 0 0
President
Li Vice
Current 0 0 0 0 0 0 0
Hongtao President
Lin Vice
Current 0 0 0 0 0 0 0
Hongfan President
Wu Board
Current 0 0 0 0 0 0 0
Yongjun Secretary
Chen Board
Left 0 0 0 0 0 0 0
Yuehua Chairman
Su Zheng Director Left 0 0 0 0 0 0 0
Wang
Director Left 0 0 0 0 0 0 0
Xiaowen
He Haibin Director Left 0 0 0 0 0 0 0
Feng Independe
Left 0 0 0 0 0 0 0
Yutao nt Director
Yang Independe
Left 0 0 0 0 0 0 0
Haiying nt Director
Zhang Independe
Left 0 0 0 0 0 0 0
Zhong nt Director
Dong Supervisor
Left 0 0 0 0 0 0 0
Yaping y
Employee
Liu Yong Left 0 0 0 0 0 0 0
Supervisor
Liu Fengxi President Left 0 0 0 0 0 0 0
Board
Xiao Qing Left 0 0 0 0 0 0 0
Secretary
Huang
CFO Left 0 0 0 0 0 0 0
Zhiqiang
Total -- -- 0 84,540 0 84,540 0 0 0
Notes: on 27 Aug. 2015, the resolution of the 4th Session of the 8th Board of Directors decided
to engage Mr. Xiao Qing as the Executive Vice President and Mr. Wu Yongjun as the Board
44
2015 Semi-annual Report of Konka Group Co., Ltd.
Secretary of the Company.
II. Change of directors, supervisors and senior management staff
√ Applicable □ Inapplicable
Name Position Type Date Reason
Appointment Be elected as the Director through the Annual General
Liu Fengxi Director 28 May 2015
and dismission Meeting
Be elected as the Board Chairman through the Board
Liu Fengxi Board Chairman Elected 18 Jun. 2015
Meeting
Be elected as the Director through the Annual General
Jin Qingjun Director Elected 28 May 2015
Meeting
Appointment Be elected as the Director through the Annual General
Chen Yuehua Director 28 May 2015
and dismission Meeting
Be elected as the Director through the Annual General
Song Zhenhua Director Elected 28 May 2015
Meeting
Independent Be elected as the Director through the Annual General
Zhang Min Elected 28 May 2015
Director Meeting
Independent Be elected as the Independent Director through the
Xiao Zuhe Elected 28 May 2015
Director Annual General Meeting
Independent Be elected as the Independent Director through the
Zhang Shuhua Elected 28 May 2015
Director Annual General Meeting
Be elected as the Supervisor through the Annual
Hao Gang Supervisory Elected 28 May 2015 General Meeting and be selected as the Supervisory
through the Board of Supervisors
Be elected as the Supervisor through the Board of
Zhang Guanghui Supervisor Elected 28 May 2015
Supervisors
Employee Be elected as the Employee Supervisors through the
Li Jun Elected 28 May 2015
Supervisor Employees' Assembly
Liu Dan President Engaged 18 Jun. 2015 Be engaged by the decision from the Board of Directors
Song Zhenhua Vice President Engaged 18 Jun. 2015 Be engaged by the decision from the Board of Directors
Executive Vice
Xiao Qing Engaged 27 Aug. 2015 Be engaged by the decision from the Board of Directors
President
Wan Libo Vice President Engaged 19 May 2015 Be engaged by the decision from the Board of Directors
Lin Hongfan Vice President Engaged 18 Jun. 2015 Be engaged by the decision from the Board of Directors
Wu Yongjun Board Secretary Engaged 27 Aug. 2015 Be engaged by the decision from the Board of Directors
Left as term
Su Zheng Director 28 May 2015 Term expired of the Board of Directors
expired
Left as term
Wang Xiaowen Director 28 May 2015 Term expired of the Board of Directors
expired
45
2015 Semi-annual Report of Konka Group Co., Ltd.
Left as term
He Haibin Director 28 May 2015 Term expired of the Board of Directors
expired
Independent Left as term
Feng Yutao 28 May 2015 Term expired of the Board of Directors
Director expired
Independent Left as term
Yang Haiying 28 May 2015 Term expired of the Board of Directors
Director expired
Independent Left as term
Zhang Zhong 28 May 2015 Term expired of the Board of Directors
Director expired
Left as term
Dong Yaping Supervisory 28 May 2015 Term expired of the Board of Supervisors
expired
Employee Left as term
Liu Yong 28 May 2015 Term expired of the Board of Supervisors
Supervisor expired
Huang Zhiqiang CFO Left 18 Jun. 2015 Resigned owing to personal reasons
46
2015 Semi-annual Report of Konka Group Co., Ltd.
Section IX. Financial Report
I. Auditreport
II. Audited financial statement
1. Consolidatedbalancesheet
2. Consolidatedstatementofincome
3. Consolidatedstatementofcashflow
4. Consolidatedstatementofchangesinshareholders’equities
5. Balancesheet
6. Incomestatement
7. Cashflowstatement
8. Statementofchangesinstockholders'equityaccounts
9. Annexedtableof financialstatement
10. Supplementaryinformationofthenotesofthefinancialstatement
47
2015 Semi-annual Report of Konka Group Co., Ltd.
I. Audit report
Has this semi-annual report been audited?
√ Yes □ No
Type of audit opinion Standard unqualified audit opinion
Date for signing the auditor’s report 27 Aug. 2015
Name of the audit firm Ruihua CPAs (LLP)
Document Number of the auditor’s report R-H-S-Z [2015] No. 44040034
Name of the CPA Liu Jianhua, Shang Qimei
Whether the semi-annuial audit report was the non-standard audit report
□ Yes√ No
Auditor’s Report
R-H-S-Z [2015] No. 44040034
To the shareholders of Konka Group Co., Ltd.,
We have audited the accompanying financial statements of Konka Group Co., Ltd. (hereafter
referred to as “the Company”) and its subsidiaries (hereafter referred to as “the Group” in
general) which comprise the consolidated and company’s balance sheets as at 30 Jun. 2015,
and the consolidated and company’s income statements, the consolidated and company’s
cash flow statements and the consolidated and company’s statements of changes in owners’
equity for the Jan-Jun .2015 and notes to these financial statements.
I. Management’s Responsibility for the Financial Statements
The management is responsible for the preparation of these financial statements in
accordance with the Accounting Standards for Business Enterprises. This responsibility
includes: (1) preparing financial statements according to the Accounting Standards for
Business Enterprises and make them a fair presentation; and (2) designing, implementing and
maintaining internal control relevant to the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
II. Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the China Standards on Auditing. Those
standards require that we comply with ethical requirements of China CPAs and plan and
perform the audit to obtain reasonable assurance whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation of the financial statements and
fair statement in order to design audit procedures that are appropriate in the circumstances.
48
2015 Semi-annual Report of Konka Group Co., Ltd.
An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
III. Audit opinion
In our opinion, the financial statements have been prepared in accordance with the
Accounting Standards for Business Enterprises in all material respects and give a fair view of
the Company and its subsidiaries’ consolidated financial positions as at the first half year of
2015 and the consolidated business results and cash flows for the year then ended, as well as
the Company’s financial positions as at the Jan-Jun of .2015 and business results and cash
flows for the year then ended.
CPA: Ruihua Certified Public Accountants (LLP)
CPA: ChinaBeijing
27 Aug. 2015
II. Financial statements
Currency unit for the statements in the notes to these financial statements: RMB Yuan
1. Consolidated balance sheet
Prepared by Konka Group Co., Ltd.
30 Jun. 2015
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 2,265,265,648.68 1,703,135,732.18
Settlement reserves
Intra-group lendings
Financial assets measured at fair
value of which changes are recorded in
current profits and losses
Derivative financial assets
Notes receivable 3,234,108,057.77 3,819,417,076.37
Accounts receivable 2,205,869,401.51 2,259,293,207.16
Accounts paid in advance 473,849,216.13 315,150,044.57
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
49
2015 Semi-annual Report of Konka Group Co., Ltd.
reserves
Interest receivable 2,911,894.95 1,885,727.36
Dividend receivable
Other accounts receivable 299,254,830.25 298,975,391.68
Financial assets purchased under
agreements to resell
Inventories 3,745,804,720.74 3,904,436,250.33
Assets held for sale
Non-current assets due within 1 year
Other current assets 319,508,306.22 568,020,200.48
Total current assets 12,546,572,076.25 12,870,313,630.13
Non-current assets:
Loans by mandate and advances
granted
Available-for-sale financial assets 305,809,971.20 245,033,609.00
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 364,805,011.18 362,765,183.66
Investing real estate 230,533,815.65 233,349,452.80
Fixed assets 1,759,970,665.94 1,783,695,548.92
Construction in progress 195,928,495.84 159,604,884.09
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 354,648,538.76 347,626,130.58
R&D expense
Goodwill 3,597,657.15 3,597,657.15
Long-term deferred expenses 50,637,205.71 25,792,805.06
Deferred income tax assets 320,295,659.54 259,516,396.26
Other non-current assets - 488,063,979.00
Total of non-current assets 3,586,227,020.97 3,909,045,646.52
Total assets 16,132,799,097.22 16,779,359,276.65
Current liabilities:
Short-term borrowings 5,539,496,207.68 5,145,712,436.91
Borrowings from Central Bank
Customer bank deposits and due to
50
2015 Semi-annual Report of Konka Group Co., Ltd.
banks and other financial institutions
Intra-group borrowings
Financial liabilities measured at fair
value of which changes are recorded in
current profits and losses
Derivative financial liabilities
Notes payable 1,069,722,035.13 911,355,028.47
Accounts payable 2,582,840,877.06 3,144,408,433.93
Accounts received in advance 402,867,136.96 302,904,453.86
Financial assets sold for repurchase
Handling charges and commissions
payable
Payroll payable 215,006,492.49 299,272,715.05
Tax payable 72,049,299.90 112,557,005.85
Interest payable 32,580,621.62 22,872,418.43
Dividend payable 12,039,727.04 -
Other accounts payable 1,261,835,707.99 1,376,803,381.03
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting underwriting of
securities
Liabilities held for sale
Non-current liabilities due within 1
796,757.13 1,525,465.53
year
Other current liabilities
Total current liabilities 11,189,234,863.00 11,317,411,339.06
Non-current liabilities:
Long-term borrowings 678,111,262.86 957,541,210.52
Bonds payable
Of which: preferred shares
Perpetual bonds
Long-term payables 30,133,928.20 30,029,990.10
Long-term payroll payables 26,256,521.15 28,554,734.16
Specific payables
Estimated liabilities
Deferred income 147,931,651.71 147,315,999.02
51
2015 Semi-annual Report of Konka Group Co., Ltd.
Deferred income tax liabilities 7,391,081.84 1,049,498.77
Other non-current liabilities
Total non-current liabilities 889,824,445.76 1,164,491,432.57
Total liabilities 12,079,059,308.76 12,481,902,771.63
Owners’ equity:
Share capital 1,203,972,704.00 1,203,972,704.00
Other equity instruments
Of which: preferred shares
Perpetual bonds
Capital reserves 1,291,877,244.65 1,289,403,563.99
Less: Treasury stock
Other comprehensive income 16,936,510.45 16,171,477.91
Specific reserves
Surplus reserves 847,908,466.28 847,908,466.28
Provisions for general risks
Retained profits 437,029,524.46 746,022,758.89
Total equity attributable to owners of
3,797,724,449.84 4,103,478,971.07
the Company
Minority interests 256,015,338.62 193,977,533.95
Total owners’ equity 4,053,739,788.46 4,297,456,505.02
Total liabilities and owners’ equity 16,132,799,097.22 16,779,359,276.65
Legal representative: Liu Fengxi Chief of the accounting work: Xu Youshan
Chief of the accounting organ: Xu Youshan
2. Balance sheet of the Company
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 1,049,662,097.01 993,131,773.08
Financial assets measured at fair
value of which changes are recorded in
current profits and losses
Derivative financial assets
Notes receivable 3,023,526,485.21 3,664,117,423.56
Accounts receivable 1,690,010,252.92 1,539,295,976.29
Accounts paid in advance 325,383,806.52 349,343,179.42
Interest receivable 22,236,655.07 14,450,153.53
52
2015 Semi-annual Report of Konka Group Co., Ltd.
Dividend receivable
Other accounts receivable 860,013,572.76 988,199,630.05
Inventories 2,099,963,455.30 2,500,537,916.63
Assets held for sale
Non-current assets due within 1 year
Other current assets 186,428,205.55 201,280,204.53
Total current assets 9,257,224,530.34 10,250,356,257.09
Non-current assets:
Available-for-sale financial assets 273,703,636.20 218,983,609.00
Held-to-maturity investments 572,000,000.00 600,000,000.00
Long-term accounts receivable
Long-term equity investment 1,740,702,147.33 1,608,674,456.09
Investing real estate 230,533,815.65 233,349,452.80
Fixed assets 530,154,238.89 534,363,754.80
Construction in progress 27,317,551.97 37,567,861.10
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 86,672,972.60 76,397,532.51
R&D expense
Goodwill
Long-term deferred expenses 37,834,404.29 14,567,206.83
Deferred income tax assets 296,951,410.01 244,080,035.45
Other non-current assets
Total of non-current assets 3,795,870,176.94 3,567,983,908.58
Total assets 13,053,094,707.28 13,818,340,165.67
Current liabilities:
Short-term borrowings 709,307,085.80 244,808,594.52
Financial liabilities measured at fair
value of which changes are recorded in
current profits and losses
Derivative financial liabilities
Notes payable 416,904,914.18 367,803,372.65
Accounts payable 6,371,133,333.34 7,871,208,959.66
Accounts received in advance 320,440,041.22 190,627,895.21
Payroll payable 103,808,582.75 146,758,331.08
53
2015 Semi-annual Report of Konka Group Co., Ltd.
Tax payable 22,331,966.66 5,081,943.95
Interest payable 5,624,327.52 5,406,211.20
Dividend payable 12,039,727.04 -
Other accounts payable 1,345,069,025.79 1,103,672,772.19
Liabilities held for sale
Non-current liabilities due within 1
year
Other current liabilities
Total current liabilities 9,306,659,004.30 9,935,368,080.46
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 82,472,428.88 80,679,738.96
Deferred income tax liabilities 5,960,028.72 -
Other non-current liabilities
Total non-current liabilities 88,432,457.60 80,679,738.96
Total liabilities 9,395,091,461.90 10,016,047,819.42
Owners’ equity:
Share capital 1,203,972,704.00 1,203,972,704.00
Other equity instruments
Of which: preferred shares
Perpetual bonds
Capital reserves 1,250,283,488.79 1,250,283,488.79
Less: Treasury stock
Other comprehensive income 542,790.41 471,827.51
Specific reserves - -
Surplus reserves 847,908,466.28 847,908,466.28
Retained profits 355,295,795.90 499,655,859.67
Total owners’ equity 3,658,003,245.38 3,802,292,346.25
Total liabilities and owners’ equity 13,053,094,707.28 13,818,340,165.67
54
2015 Semi-annual Report of Konka Group Co., Ltd.
Legal representative: Liu Fengxi Chief of the accounting work: Xu Youshan
Chief of the accounting organ: Xu Youshan
3. Consolidated income statement
Unit: RMB Yuan
Item Reporting period Same period of last year
I. Total operating revenues 8,944,558,920.96 8,390,067,695.48
Including: Sales income 8,944,558,920.96 8,390,067,695.48
Interest income
Premium income
Handling charge and commission
income
II. Total operating costs 9,373,665,025.38 8,628,811,627.79
Including: Cost of sales 7,791,215,800.57 7,003,790,313.05
Interest expenses
Handling charge and commission
expenses
Surrenders
Net claims paid
Net amount withdrawn for the
insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and associate charges 28,710,006.67 27,245,781.49
Selling and distribution expenses 1,124,688,950.35 1,155,868,360.85
Administrative expenses 292,238,903.71 304,442,442.38
Financial expenses 99,066,911.17 101,860,777.24
Asset impairment loss 37,744,452.91 35,603,952.78
Add: Gain/(loss) from change in fair
value (“-” means loss)
Gain/(loss) from investment (“-”
7,185,454.13 266,440,118.63
means loss)
Including: share of profits in
-5,017,326.86 1,720,001.40
associates and joint ventures
Foreign exchange gains (“-” means
loss)
III. Business profit (“-” means loss) -421,920,650.29 27,696,186.32
55
2015 Semi-annual Report of Konka Group Co., Ltd.
Add: non-operating income 69,423,163.55 58,215,468.02
Including: Gains on disposal of
140,774.90 160,385.54
non-current assets
Less: non-operating expense 3,222,304.15 4,035,941.02
Including: Losses on disposal of
1,333,624.80 3,468,914.31
non-current assets
IV. Total profit (“-” means loss) -355,719,790.89 81,875,713.32
Less: Income tax expense -51,101,619.20 35,514,884.35
V. Net profit (“-” means loss) -304,618,171.69 46,360,828.97
Net profit attributable to owners of
-296,953,507.39 44,394,585.84
the Company
Minority shareholders’ income -7,664,664.30 1,966,243.13
VI. After-tax net amount of other
1,132,503.31 2,175,683.27
comprehensive incomes
After-tax net amount of other
comprehensive incomes attributable to 765,032.54 2,114,026.98
owners of the Company
(I) Other comprehensive incomes
that will not be reclassified into gains and
losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees that
cannot be reclassified into gains and
losses under the equity method
(II) Other comprehensive incomes
that will be reclassified into gains and 765,032.54 2,114,026.98
losses
1. Enjoyable shares in other
comprehensive incomes in investees that
will be reclassified into gains and losses
under the equity method
2. Gains and losses on fair
value changes of available-for-sale 90,185.65 21,115.80
financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains and
56
2015 Semi-annual Report of Konka Group Co., Ltd.
losses on cash flows
5. Foreign-currency financial
674,846.89 2,092,911.18
statement translation difference
6. Other
After-tax net amount of other
comprehensive incomes attributable to 367,470.77 61,656.29
minority shareholders
VII. Total comprehensive incomes -303,485,668.38 48,536,512.24
Attributable to owners of the
-296,188,474.85 46,508,612.82
Company
Attributable to minority
-7,297,193.53 2,027,899.42
shareholders
VIII. Earnings per share
(I) Basic earnings per share -0.25 0.04
(II) Diluted earnings per share -0.25 0.04
Legal representative: Liu Fengxi Chief of the accounting work: Xu Youshan
Chief of the accounting organ: Xu Youshan
4. Income statement of the Company
Unit: RMB Yuan
Item Reporting period Same period of last year
I. Total sales 7,789,566,135.08 8,472,805,986.02
Less: cost of sales 7,039,398,999.32 7,511,551,731.49
Business taxes and surcharges 14,474,426.92 16,794,110.13
Distribution expenses 809,860,840.08 922,354,852.66
Administrative expenses 153,399,610.11 196,095,536.45
Financial costs 11,216,562.70 44,234,839.30
Impairment loss 18,082,479.13 27,776,711.70
Add: gain/(loss) from change in fair
- -
value (“-” means loss)
Gain/(loss) from investment (“-”
39,372,796.93 271,435,144.18
means loss)
Including: income form investment
-1,682,308.76 -2,175,501.89
on associates and joint ventures
II. Business profit (“-” means loss) -217,493,986.25 25,433,348.47
Add: non-operating income 39,750,811.83 33,360,363.48
Including: Gains on disposal of
78,912.49 -
non-current assets
57
2015 Semi-annual Report of Konka Group Co., Ltd.
Less: non-operating expense 1,526,230.88 1,608,736.38
Including: Losses on disposal of
903,506.68 1,514,063.10
non-current assets
III. Total profit (“-” means loss) -179,269,405.30 57,184,975.57
Less: Income tax expense -46,949,068.57 14,932,546.51
IV. Net profit (“-” means loss) -132,320,336.73 42,252,429.06
V. After-tax net amount of other
70,962.90 21,115.80
comprehensive incomes
(I) Other comprehensive incomes that
will not be reclassified into gains and
losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees
that cannot be reclassified into gains
and losses under the equity method
(II) Other comprehensive incomes
that will be reclassified into gains and 70,962.90 21,115.80
losses
1. Enjoyable shares in other
comprehensive incomes in investees
that will be reclassified into gains and
losses under the equity method
2. Gains and losses on fair value
changes of available-for-sale financial 70,962.90 21,115.80
assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains and
losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
VI. Total comprehensive incomes -132,249,373.83 42,273,544.86
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
58
2015 Semi-annual Report of Konka Group Co., Ltd.
Legal representative: Liu Fengxi Chief of the accounting work: Xu Youshan
Chief of the accounting organ: Xu Youshan
5. Consolidated cash flow statement
Unit: RMB Yuan
Item Reporting period Same period of last year
I. Cash flows from operating activities:
Cash received from sale of
9,091,215,409.73 8,265,282,430.24
commodities and rendering of service
Net increase of deposits from
customers and dues from banks
Net increase of loans from the central
bank
Net increase of funds borrowed from
other financial institutions
Cash received from premium of
original insurance contracts
Net cash received from reinsurance
business
Net increase of deposits of policy
holders and investment fund
Net increase of disposal of financial
assets measured at fair value of which
changes are recorded into current gains
and losses
Cash received from interest, handling
charges and commissions
Net increase of intra-group
borrowings
Net increase of funds in repurchase
business
Tax refunds received 179,813,857.62 196,033,233.62
Other cash received relating to
186,582,496.97 173,270,417.80
operating activities
Subtotal of cash inflows from operating
9,457,611,764.32 8,634,586,081.66
activities
Cash paid for goods and services 7,641,403,251.15 5,557,372,388.56
Net increase of customer lendings
and advances
59
2015 Semi-annual Report of Konka Group Co., Ltd.
Net increase of funds deposited in the
central bank and amount due from
banks
Cash for paying claims of the original
insurance contracts
Cash for paying interest, handling
charges and commissions
Cash for paying policy dividends
Cash paid to and for employees 914,786,833.95 881,787,596.74
Various taxes paid 290,017,993.03 414,347,427.94
Other cash payment relating to
582,490,169.47 573,150,587.30
operating activities
Subtotal of cash outflows from
9,428,698,247.60 7,426,658,000.54
operating activities
Net cash flows from operating activities 28,913,516.72 1,207,928,081.12
II. Cash flows from investing activities:
Cash received from withdrawal of
20,170,536.85 13,879,620.00
investments
Cash received from return on
13,104,708.65 157,693.56
investments
Net cash received from disposal of
fixed assets, intangible assets and other 244,057.50 7,917,613.23
long-term assets
Net cash received from disposal of
233,782,351.98
subsidiaries or other business units
Other cash received relating to
1,788,563,979.00 200,000,000.00
investing activities
Subtotal of cash inflows from investing
1,822,083,282.00 455,737,278.77
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 122,139,343.19 626,949,134.37
assets
Cash paid for investment 70,266,706.00 7,723,300.00
Net increase of pledged loans
Net cash paid to acquire subsidiaries
and other business units
Other cash payments relating to
1,306,934,952.07 600,183,497.35
investing activities
Subtotal of cash outflows from
1,499,341,001.26 1,234,855,931.72
investing activities
60
2015 Semi-annual Report of Konka Group Co., Ltd.
Net cash flows from investing activities 322,742,280.74 -779,118,652.95
III. Cash Flows from Financing
Activities:
Cash received from capital
70,677,725.44
contributions
Including: Cash received from
minority shareholder investments by
subsidiaries
Cash received from borrowings 2,233,051,652.35 1,671,417,041.46
Cash received from issuance of
bonds
Other cash received relating to
118,095,176.56 236,460.60
financing activities
Subtotal of cash inflows from financing
2,421,824,554.35 1,671,653,502.06
activities
Repayment of borrowings 2,137,458,379.74 2,027,899,932.25
Cash paid for interest expenses and
68,163,779.14 44,821,809.15
distribution of dividends or profit
Including: dividends or profit paid
by subsidiaries to minority shareholders
Other cash payments relating to
133,861,961.59 178,071,161.01
financing activities
Sub-total of cash outflows from
2,339,484,120.47 2,250,792,902.41
financing activities
Net cash flows from financing activities 82,340,433.88 -579,139,400.35
IV. Effect of foreign exchange rate
-37,751,951.34 10,892,224.69
changes on cash and cash equivalents
V. Net increase in cash and cash
396,244,280.00 -139,437,747.49
equivalents
Add: Opening balance of cash and
1,640,236,837.08 1,771,489,421.21
cash equivalents
VI. Closing balance of cash and cash
2,036,481,117.08 1,632,051,673.72
equivalents
Legal representative: Liu Fengxi Chief of the accounting work: Xu Youshan
Chief of the accounting organ: Xu Youshan
6. Cash flow statement of the Company
Unit: RMB Yuan
Item Reporting period Same period of last year
61
2015 Semi-annual Report of Konka Group Co., Ltd.
I. Cash flows from operating activities:
Cash received from sale of
6,629,377,417.70 6,366,712,860.82
commodities and rendering of service
Tax refunds received 64,799,118.52 74,807,745.10
Other cash received relating to
1,377,079,891.69 161,045,296.10
operating activities
Subtotal of cash inflows from operating
8,071,256,427.91 7,090,629,881.02
activities
Cash paid for goods and services 6,545,865,079.11 4,475,725,045.81
Cash paid to and for employees 476,270,145.75 485,469,053.36
Various taxes paid 107,694,528.48 191,472,856.18
Other cash payment relating to
1,141,233,856.69 616,128,790.00
operating activities
Subtotal of cash outflows from
8,271,063,610.03 5,768,795,745.35
operating activities
Net cash flows from operating activities -199,807,182.12 1,321,834,135.67
II. Cash flows from investing activities:
Cash received from retraction of
5,278,509.85 261,567,420.00
investments
Cash received from return on
23,022,273.10 8,624,360.22
investments
Net cash received from disposal of
fixed assets, intangible assets and other 55,338,137.50 7,556,113.23
long-term assets
Net cash received from disposal of
8,889.24 -
subsidiaries or other business units
Other cash received relating to
1,400,000,000.00 200,000,000.00
investing activities
Subtotal of cash inflows from investing
1,483,647,809.69 477,747,893.45
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 25,438,491.22 540,291,381.68
assets
Cash paid for investment 188,835,410.00 1,723,300.00
Net cash paid to acquire subsidiaries
and other business units
Other cash payments relating to
1,374,884,590.00 640,000,000.00
investing activities
Subtotal of cash outflows from
1,589,158,491.22 693,950,702.68
investing activities
62
2015 Semi-annual Report of Konka Group Co., Ltd.
Net cash flows from investing activities -105,510,681.53 -216,202,809.23
III. Cash Flows from Financing
- -
Activities:
Cash received from capital
-
contributions
Cash received from borrowings 61,422,000.00 -
Cash received from issuance of
- -
bonds
Other cash received relating to
434,734,396.24 235,988.85
financing activities
Subtotal of cash inflows from financing
496,156,396.24 235,988.85
activities
Repayment of borrowings - -
Cash paid for interest expenses and
- 11,854,357.13
distribution of dividends or profit
Other cash payments relating to
133,921,663.91 176,578,387.43
financing activities
Sub-total of cash outflows from
133,921,663.91 188,432,744.56
financing activities
Net cash flows from financing activities 362,234,732.33 -188,196,755.71
IV. Effect of foreign exchange rate
-3,281,640.26 -530,199.59
changes on cash and cash equivalents
V. Net increase in cash and cash
53,635,228.42 916,904,371.14
equivalents
Add: Opening balance of cash and
991,459,790.62 1,117,689,643.16
cash equivalents
VI. Closing balance of cash and cash
1,045,095,019.04 2,034,594,014.30
equivalents
Legal representative: Liu Fengxi Chief of the accounting work: Xu Youshan
Chief of the accounting organ: Xu Youshan
7. Consolidated statement of changes in owners’ equity
Jan. – Jun. 2015
Unit: RMB Yuan
Reporting period
Equity attributable to owners of the Company Minori
Total
Item Other equity Less: Other Specifi Gener ty
Share Capital Surplus Retained owners’
instruments treasury compreh c al risk interes
capital reserve reserve profit equity
stock ensive reserv reserv ts
Pref Perp Ot
63
2015 Semi-annual Report of Konka Group Co., Ltd.
erred etual he incomes e e
shar bond r
es s
I. Balance at
the end of 1,203,972, 1,289,403,56 847,908,466. 193,977
16,171,477 746,022,75 4,297,456,
the previous 704.00 3.99 28 ,533.95
.91 8.89 505.02
year
Add:
change of
- - - - - - -
accounting
policy
Correction
of errors in - - - - - - -
previous
periods
Business
mergers - - - - - - -
under the
same control
Other - - - - - - -
II. Balance
at the 1,203,972, 1,289,403,56 847,908,466.
- - - - 16,171,477 - - 746,022,75 193,977 4,297,456,
beginning of 704.00 3.99 28
.91 8.89 ,533.95 505.02
the year
III. Increase/
decrease in
the period - - - - - - - - -308,993,2 62,037, -243,716,7
2,473,680.66 765,032.54
(“-” means 34.43 804.67 16.56
decrease)
(I) Total
comprehensi - - - -296,953,5 -7,297, -303,485,6
765,032.54
ve incomes 07.39 193.53 68.38
(II)
Capital
increased - - - - - - - - - - - 70,678, 70,678,264
and reduced 264.16 .16
by owners
1.
Common
shares - - - - - 70,678, 70,678,264
increased by 264.16 .16
shareholders
64
2015 Semi-annual Report of Konka Group Co., Ltd.
2.
Capital
increased by
- - - - - - -
holders of
other equity
instruments
3.
Amounts of
share-based
payments - - - - - - -
recognized
in owners’
equity
4.
- - - - - - -
Other
(III) Profit
- - - - - - - - - - -12,039,72 -1,343, -13,382,99
distribution
7.04 265.96 3.00
1.
Appropriatio
- - - - - - -
ns to surplus
reserves
2.
Appropriatio
ns to general - - - - - - -
risk
provisions
3.
Appropriatio
ns to owners
- - - - -12,039,72 -1,343, -13,382,99
(or
7.04 265.96 3.00
shareholders
)
4.
- - - - - - -
Other
(IV)
Internal
carry-forwar - - - - - - - - - - - - -
d of owners’
equity
1. New
increase of
capital (or - - - - - - -
share
capital) from
65
2015 Semi-annual Report of Konka Group Co., Ltd.
capital
public
reserves
2. New
increase of
capital (or
share - - - - - - -
capital) from
surplus
reserves
3.
Surplus
reserves for - - - - - - -
making up
losses
4.
- - - - - - -
Other
(V) Specific
- - - - - - - - - - - - -
reserve
1.
Withdrawn
- - - - - - -
for the
period
2. Used
- - - - - - -
in the period
(VI) Other - - - - - 2,473,680.
2,473,680.66
66
IV. Closing 1,203,972, 1,291,877,24 847,908,466.
- - - - 16,936,510 - - 437,029,52 256,015 4,053,739,
balance 704.00 4.65 28
.45 4.46 ,338.62 788.46
Legal representative: Liu Fengxi Chief of the accounting work: Xu Youshan
Chief of the accounting organ: Xu Youshan
Jan.-Jun. 2014
Unit: RMB Yuan
Last year
Equity attributable to owners of the Company
Other equity Minorit
Other Total
Item instruments Less: General y
Share Capital compre Specific Surplus Retaine owners’
treasury risk interest
Prefer Perpet equity
capital reserve hensive reserve reserve d profit
stock reserve s
red ual Other
incomes
shares bonds
66
2015 Semi-annual Report of Konka Group Co., Ltd.
I. Balance at the
1,203,9 1,314,409
end of the 16,179,31 847,908,4 705,438,9 193,008,5 4,280,917
72,704. ,687.82
previous year 6.17 66.28 58.07 19.16 ,651.50
00
Add: change of
- - - - - - -
accounting policy
Correction of
errors in previous - - - - - - -
periods
Business
mergers under the - - - - - - -
same control
Other - - - - - - -
II. Balance at the
1,203,9 1,314,409
beginning of the - - - - 16,179,31 847,908,4 - 705,438,9 193,008,5 4,280,917
72,704. ,687.82
year 6.17 66.28 58.07 19.16 ,651.50
00
III. Increase/
decrease in the
- - - - -25,006,1 - - - 40,583,80 969,014.7 16,538,85
period (“-” means -7,838.26
23.83 0.82 9 3.52
decrease)
(I) Total
comprehensive - - - 52,623,52 7,965,513 60,581,20
-7,838.26
incomes 7.86 .47 3.07
(II) Capital
increased and - - - - - - - - - - -6,996,49 -6,996,49
reduced by owners 8.68 8.68
1. Common
shares increased - - - - - - -
by shareholders
2. Capital
increased by
- - - - - - -
holders of other
equity instruments
3. Amounts
of share-based
payments - - - - - - -
recognized in
owners’ equity
4. Other - - - - - - -
(III) Profit
- - - - - - - - - -12,039,7 - -12,039,7
distribution
27.04 27.04
67
2015 Semi-annual Report of Konka Group Co., Ltd.
1.
Appropriations to - - - - - - -
surplus reserves
2.
Appropriations to
- - - - - - -
general risk
provisions
3.
Appropriations to
- - - - -12,039,7 - -12,039,7
owners (or
27.04 27.04
shareholders)
4. Other - - - - - - -
(IV) Internal
carry-forward of - - - - - - - - - - - -
owners’ equity
1. New
increase of capital
(or share capital) - - - - - - -
from capital public
reserves
2. New
increase of capital
(or share capital) - - - - - - -
from surplus
reserves
3. Surplus
reserves for - - - - - - -
making up losses
4. Other - - - - - - -
(V) Specific
- - - - - - - - - - - -
reserve
1. Withdrawn
- - - - - - -
for the period
2. Used in the
- - - - - - -
period
(VI) Other - -25,006,1 - - - - -25,006,1
23.83 23.83
IV. Closing 1,203,9 1,289,403
- - - - 16,171,47 847,908,4 - 746,022,7 193,977,5 4,297,456
balance 72,704. ,563.99
7.91 66.28 58.89 33.95 ,505.02
00
Legal representative: Liu Fengxi Chief of the accounting work: Xu Youshan
68
2015 Semi-annual Report of Konka Group Co., Ltd.
Chief of the accounting organ: Xu Youshan
8. Statement of changes in owners’ equity of the Company
Jan. – Jun. 2015
Unit: RMB Yuan
Reporting period
Other equity instruments Other
Less: Total
Item Share Capital comprehe Specific Surplus Retaine
Preferre Perpetu treasury owners’
capital Other reserve nsive reserve reserve d profit
d shares al bonds stock equity
incomes
I. Balance at the
end of the previous 1,203,972 - - - 1,250,283,4 - 471,827.51 - 847,908,466 499,655,8 3,802,292,3
year ,704.00 88.79 .28 59.67 46.25
Add: change of
- - - - - - - - - - -
accounting policy
Correction of
errors in previous - - - - - - - - - - -
periods
Other - - - - - - - - - - -
II. Balance at the
beginning of the 1,203,972 - - - 1,250,283,4 - 471,827.51 - 847,908,466 499,655,8 3,802,292,3
year ,704.00 88.79 .28 59.67 46.25
III. Increase/
decrease in the
- - - - - - 70,962.90 - - -144,360, -144,289,10
period (“-” means
063.77 0.87
decrease)
(I) Total
comprehensive - - - - - - 70,962.90 - - -132,320, -132,249,37
incomes 336.73 3.83
(II) Capital
increased and - - - - - - - - - - -
reduced by owners
1. Common
shares increased - - - - - - - - - - -
by shareholders
2. Capital
increased by
- - - - - - - - - - -
holders of other
equity instruments
3. Amounts
of share-based - - - - - - - - - - -
payments
69
2015 Semi-annual Report of Konka Group Co., Ltd.
recognized in
owners’ equity
4. Other - - - - - - - - - - -
(III) Profit
- - - - - - - - - -12,039,7 -12,039,727
distribution
27.04 .04
1.
Appropriations to - - - - - - - - - - -
surplus reserves
2.
Appropriations to
- - - - - - - - - -12,039,7 -12,039,727
owners (or
27.04 .04
shareholders)
3. Other - - - - - - - - - - -
(IV) Internal
carry-forward of - - - - - - - - - - -
owners’ equity
1. New
increase of capital
(or share capital) - - - - - - - - - - -
from capital public
reserves
2. New
increase of capital
(or share capital) - - - - - - - - - - -
from surplus
reserves
3. Surplus
reserves for - - - - - - - - - - -
making up losses
4. Other - - - - - - - - - - -
(V) Specific
- - - - - - - - - - -
reserve
1. Withdrawn
- - - - - - - - - - -
for the period
2. Used in the
- - - - - - - - - - -
period
(VI) Other - - - - - - - - - - -
IV. Closing
1,203,972 - - - 1,250,283,4 - 542,790.41 - 847,908,466 355,295,7 3,658,003,2
balance
,704.00 88.79 .28 95.90 45.38
Legal representative: Liu Fengxi Chief of the accounting work: Xu Youshan
70
2015 Semi-annual Report of Konka Group Co., Ltd.
Chief of the accounting organ: Xu Youshan
Jan.-Jun. 2014
Unit: RMB Yuan
Same period of last year
Other equity instruments Other
Less: Total
Item Share Capital comprehe Specific Surplus Retaine
Preferre Perpetu treasury owners’
capital Other reserve nsive reserve reserve d profit
d shares al bonds stock equity
incomes
I. Balance at the
end of the previous 1,203,972 - - - 1,250,133,5 - - - 847,908,466 711,968,9 4,013,983,7
year ,704.00 90.04 .28 83.25 43.57
Add: change of
- - - - - - - - - - -
accounting policy
Correction of
errors in previous - - - - - - - - - - -
periods
Other - - - - - - - - - - -
II. Balance at the
beginning of the 1,203,972 - - - 1,250,133,5 - - - 847,908,466 711,968,9 4,013,983,7
year ,704.00 90.04 .28 83.25 43.57
III. Increase/
decrease in the
- - - 149,898.75 - 471,827.51 - - -212,313, -211,691,39
period (“-” means
123.58 7.32
decrease)
(I) Total
comprehensive - - - - - 471,827.51 - - -200,273, -199,801,56
incomes 396.54 9.03
(II) Capital
increased and - - - - - - - - - - -
reduced by owners
1. Common
shares increased - - - - - - - - - - -
by shareholders
2. Capital
increased by
- - - - - - - - - - -
holders of other
equity instruments
3. Amounts
of share-based
payments - - - - - - - - - - -
recognized in
owners’ equity
4. Other - - - - - - - - - - -
71
2015 Semi-annual Report of Konka Group Co., Ltd.
(III) Profit
- - - - - - - - - -12,039,7 -12,039,727
distribution
27.04 .04
1.
Appropriations to - - - - - - - - - - -
surplus reserves
2.
Appropriations to
- - - - - - - - - -12,039,7 -12,039,727
owners (or
27.04 .04
shareholders)
3. Other - - - - - - - - - - -
(IV) Internal
carry-forward of - - - - - - - - - - -
owners’ equity
1. New
increase of capital
(or share capital) - - - - - - - - - - -
from capital public
reserves
2. New
increase of capital
(or share capital) - - - - - - - - - - -
from surplus
reserves
3. Surplus
reserves for - - - - - - - - - - -
making up losses
4. Other - - - - - - - - - - -
(V) Specific
- - - - - - - - - - -
reserve
1. Withdrawn
- - - - - - - - - - -
for the period
2. Used in the
- - - - - - - - - - -
period
(VI) Other - - - - 149,898.75 - - - - - 149,898.75
IV. Closing
1,203,972 - - - 1,250,283,4 - 471,827.51 - 847,908,466 499,655,8 3,802,292,3
balance
,704.00 88.79 .28 59.67 46.25
Legal representative: Liu Fengxi Chief of the accounting work: Xu Youshan
Chief of the accounting organ: Xu Youshan
III. Company Profile
72
2015 Semi-annual Report of Konka Group Co., Ltd.
Konka group company limited
2015 1 June notes to the financial statements
(Unless otherwise indicated, amounts to RMB
I The basic situation of the company
1. Establishment
Konka Group Co., Ltd. (hereinafter referred to as “Company” or “the Company”), is a
joint-stock limited company reorganized from the former Shenzhen Konka Electronic Co.,
Ltd. in August 1991 upon approval of the People’s Government of Shenzhen Municipality,
and has its ordinary shares (A-share and B-share) listed on Shenzhen Stock Exchange with
prior consent from the People’s Bank of China Shenzhen Special Economic Zone Branch. On
August 29, 1995, the Company, renamed to “Konka Group Co., Ltd.”, obtained corporate
business license (registration No.: 440301501121863) with its main business falling into
electronic industry.
2. Share Capital Changes upon Establishment
On November 27, 1991, with approval from the SRYFZ No. 102 [1991] document as issued
by the People’s Bank of China Shenzhen Special Economic Zone Branch, Shenzhen Konka
Electronic Co., Ltd., during December 8—December 31, 1991, has issued 128,869,000 RMB
ordinary shares (A-share) at a par value of RMB1.00 per share, of which the original net
assets were converted into 98,719,000 state-owned institutional shares, 30,150,000 new
shares were issued, including 26,500,000 circulating shares issued to the public and
3,650,000 staff shares issued to the staff of the Company.
On January 29, 1992, with approval from the SRYFZ No. 106 [1991] document as issued by
the People’s Bank of China Shenzhen Special Economic Zone Branch, Shenzhen Konka
Electronic Co., Ltd., during December 20, 1991— January 31, 1992, has issued to investors
abroad 58,372,300 RMB special shares (B-share) at a par value of RMB1.00 per share, of
which 48,372,300 shares held by the former foreign investor and founder—Hong Kong
Ganghua Electronic Group Co., Ltd. are converted into foreign legal person’s shares, and
10,000,000 B-shares are issued additionally.
On April 10, 1993, the Proposal on Profit Distribution and Dividend Payout 1992 was
adopted at the second general meeting of shareholders of the Company. With approval from
the SZBF No. 2 [1993] document as issued by Shenzhen Securities Regulatory Office, the
Company began to perform dividend policy for FY 1992 as of April 30, 1993: distributing
RMB 0.90 in cash plus 3.5 bonus shares for every 10 shares to all shareholders. The total
capital stock reached 187,473,150 shares after this distribution.
On April 18, 1994, the Proposal on Profit Distribution and Dividend Payout 1993 was
adopted at the third general meeting of shareholders of the Company. With approval from the
SZBF No. 115 [1994] document as issued by Shenzhen Securities Regulatory Office, the
Company began to perform dividend policy for FY1993 as of June 10, 1994: distributing
RMB 1.10 in cash plus 5 bonus shares (including 4.4 profit bonus shares and 0.6 bonus share
capitalized from capital public reserve) for every 10 shares to all shareholders. The total
73
2015 Semi-annual Report of Konka Group Co., Ltd.
capital stock reached 281,209,724 shares after this distribution and capitalization from capital
public reserve.
On June 2, 1994, in accordance with the provisions that “staff shares could go public and be
transferred six months after listing”, as jointly promulgated by the State Commission for
Restructuring the Economic System and the State Council’s Securities Commission, the staff
shares of the Company was planned to be listed on the flow on June 6, 1994, with the prior
consent of Shenzhen Securities Regulatory Office and Shenzhen Stock Exchange.
On October 8, 1994, the Proposal on Negotiable Bonus Shares of B-Share Corporate
Shareholders 1992 was adopted at the 1994 interim general meeting of shareholders of the
Company. With approval from the SZBF No. 224 [1994] document as issued by Shenzhen
Securities Regulatory Office, the 16,930,305 bonus shares for FY 1992 granted to foreign
legal persons were listed and negotiated at B-share market on October 26, 1994.
On February 6, 1996, the Proposal on Share Allotment Modes 1996 was adopted at the 1996
interim general metering of shareholders of the Company. With approval from the SZBF No.
5 [1996] document as issued by Shenzhen Securities Regulatory Office, and reexamination
from the ZJPSZ No. 16 [1996] document and ZJGZ No. 2 [1996] document as issued by
China Securities Regulatory Commission, on July 16, 1996 and October 29, 1996, all
shareholders were respectively allotted three shares for every ten existing shares held at
RMB 6.28/A-share and HKD 5.85/B-share. Corporate shareholders took their respective
existing shares as bases for full subscription of the allocable shares. The total capital stock
reached 365,572,641 shares after this allotment.
On January 25, 1998, the Plan on Share Allotment 1998 was adopted at the 1998 interim
general meeting of shareholders of the Company. With approval from the ZZBZ No. 29
[1998] document as issued by Shenzhen Securities Regulatory Office, and ZJSZ No.64 [1998]
document as issued by China Securities Regulatory Commission, on July 15, 1998,
negotiable A-shares were allotted in proportion of 3:10 at RMB 10.50/A-share. For such
reasons as continued weakness in B-share secondary market (lower than share allotment
price), B-share negotiation and allotment plan was canceled, and the corporate shareholders
of the Company waived the preemptive right. The total capital stock reached 389,383,603
shares after this allotment.
On June 30, 1999, the Proposal on Profit Distribution and Capitalization from Capital Public
Reserve 1998 was adopted at the eighth general meeting of shareholders of the Company. On
August 20, 1999, the profit distribution for FY 1998 was carried out: all shareholders were
presented RMB3.00 in cash for every 10 shares, plus 2 shares capitalized from capital public
reserve. The total capital stock reached 467,260,323 shares after this capitalization.
On June 30, 1999, the Plan on A-Share Issue for Capital Increase was adopted at the eighth
general meeting of shareholders of the Company. With approval from the ZJFXZ No.140
[1999] document as issued by China Securities Regulatory Commission, on November 1,
1999, 80,000,000 A-shares were additionally issued to the public at RMB15.50/share. The
total capital stock reached 547,260,323 shares after this additional issue.
On May 30, 2000, the Plan on Profit Distribution and Dividend Payout 1999 was adopted at
the ninth general meeting of shareholders of the Company. On July 25, 2000, the profit
distribution for FY 1999 was carried out: all shareholders were distributed RMB4.00 in cash
plus 1 bonus shares for every 10 shares. The total capital stock reached 601,986,352 shares
after this distribution.
On April 3, 2008, the 7th meeting of the sixth Board of Directors was convened, during
which the following resolutions were discussed and adopted: based on the total capital stock
74
2015 Semi-annual Report of Konka Group Co., Ltd.
of 601,986,352 shares for the year ended December 31, 2007, capitalization from capital
public reserve was made to all shareholders at a proportion of 1:1, namely 10 new shares for
every 10 existing shares. And the said resolution was subject to approval by the 2007 annual
general meeting of shareholders convened on May 26, 2008. The Company, in June 2008,
implemented the capitalization from capital public reserve and went through the formalities
for transfer registration with China Securities Depository and Clearing Corporation Limited.
On December 16, 2008, with approval from the SMGZF No. 2662 [2008] document as
issued by Shenzhen Bureau of Trade and Industry, the Company was agreed to increase its
share capital, and went through the formalities for registration of changes with the
administration for industry and commerce on April 10, 2009. The total capital stock reached
1,203,972,704 shares after change.
3. Approved business scope: research and development, production and operation of such
household appliances as televisions, refrigerators, washing machines, and personal electronic
appliances; manufacturing and application of home AV, IPTV set-top boxes, digital TV
receivers (including ground receiving equipment of satellite television broadcasting), digital
products, mobile communication equipments and terminal products, daily-use electronic
products, automotive electronic products, satellite navigation systems, intelligent
transportation systems, fire-fighting and security systems, office equipments, computers,
displays, large screen display systems; LED (OLED) back light, illumination, light-emitting
devices, and packaging thereof; Touch TV AIO, wireless broadcasting television transiting
equipment; electronic parts and components, moulds, plastic and rubber products, and
packing materials, design and in-door installation security products, monitoring products,
wireless and cable digital television system and system integration, and technical consultancy
and after-sale paid services of related products (except mobile phone, the other products in
the above business scope are manufactured in other places outside Shenzhen); Wholesale,
retail, import & export and relevant support services of the aforesaid products (including
spare parts) (Commodities subject to state trading management are not involved. Products
involved in quota, license management and other specified management shall be subject to
the relevant state provisions.); sale of self-developed technological achievements; provision
of maintenance services, technical consultant service for electronic products; ordinary cargo
transportation, domestic freight forwarding, warehousing services; consultancy on enterprise
management; and self-owned property leasing and management services, recovery of waste
electrical appliances and electronic products (excluding dissembling) (operated by branch
offices); and outsourcing services of information technology and business procedures by
means of undertaking services in the way of outsourcing, including management and
maintenance of system application, management of information technology, bank
background service, financial settlement, human resource service, software development, call
center, and data processing.
4. The financial statements of the Company were submitted upon approval of the Board of
Directors on 27 Aug. 2015.
5. There were 45 subsidiaries included in the consolidation scope of 2015 of the Company,
and please refer to the Notes VIII. “Equities among other entities” for details. There were 6
subsidiaries increased and 1 decreased in the consolidation scope of 2015 over the last year
of the Company, and the gains and losses as well as the cash flows of the subsidiary which be
decreased before the date losing the control right should be recorded in the consolidation of
the reporting period and please refer to the Notes VII. “Changes of the consolidation scope”
for details.
75
2015 Semi-annual Report of Konka Group Co., Ltd.
6. A check list of corporate names and their abbreviations mentioned in this Report
Corporate name Abbreviation
Shenzhen Konka Telecommunications Technology Co., Ltd. Telecommunication Technology
Shenzhen Konka Precision Mold Manufacturing Co., Ltd. Precision Mold
Shenzhen Konka Electronic Co., Ltd. Konka Electronic
Shenzhen Konka Information Network Co., Ltd. Information Network
Shenzhen Konka Plastic Products Co., Ltd. Plastic Products
Shenzhen Konka Housing Appliances Co., Ltd. Housing Appliances
Shenzhen Electronic Fittings Technology Co., Ltd. Fittings Technology
Mudanjiang Arctic Ocean Appliances Co., Ltd. Mudanjiang Appliances
Chongqing Konka Automotive Electronic Co., Ltd. Chongqing Electronic
Chongqing Qingjia Electronics Co., Ltd. Chongqing Qingjia
Anhui Konka Electronic Co., Ltd. Anhui Konka
Anhui Konka Household Appliances Co., Ltd. Anhui Household Appliances
Changshu Konka Electronic Co., Ltd. Changshu Konka
Kunshan Konka Electronic Co., Ltd. Kunshan Konka
Dongguan Konka Electronic Co., Ltd. Dongguan Konka
Dongguan Konka Packing Materials Co., Ltd. Dongguan Packing
Dongguan Konka Mould Plastic Co., Ltd. Dongguan Mould Plastic
Boluo Konka PCB Co., Ltd. Boluo Konka
Boluo Konka Precision Technology Co., Ltd. Boluo Precision
Konka (Nanhai) Development Center Nanhai Institute
Hong Kong Konka Co., Ltd. Hong Kong Konka
Konka Household Appliances Investment & Development Co., Ltd. Konka Household Appliances Investment
Konka Household Appliances
Konka Household Appliances International Trading Co., Ltd.
International Trading
KONKA AMERICA,INC. KONKA AMERICA
Konka (Europe) Co., Ltd. Konka Europe
Dongguan Xutongda Mould Plastic Co., Ltd. Xutongda
Shenzhen Konka Optoelectronic Technology Co., Ltd. Konka Optoelectronic
Shenzhen Wankaida Science and Technology Co., Ltd. Wankaida
Kunshan Kangsheng Investment Development Co., Ltd. Kunshan Kangsheng
Anhui Konka Tongchuang Household Appliances Co., Ltd. Anhui Tongchuang
Indonesia Konka Electronics Co., Ltd. Indonesia Konka
76
2015 Semi-annual Report of Konka Group Co., Ltd.
Corporate name Abbreviation
Shenzhen Shushida Logistics Service Co., Ltd. Shushida Logistics
Beijing Konka Electronic Co., Ltd. Beijing Konka Electronic
Kunshan Jielunte Mould Plastic Co. , Ltd. Kunshan Jielunte
Wuhan Jielunte Mould Plastic Co. , Ltd. Wuhan Jielunte
Chuzhou Jielunte Mould Plastic Co. , Ltd. Chuzhou Jielunte
Shenzhen Konka Yishijie Commercial Display Co., Ltd. Konka Yishijie
Shenzhen Yishijie Commercial Display Service Co., Ltd. Yishijie Commercia
Xiamen Dalong Trading Co., Ltd. Xiamen Dalong
Tianjin Usee Kangrong Culture Communication Co., Ltd. Tianjin Kangrong
Anhui Jiasen Precision Science and Technology Co., Ltd. Anhui Jiasen
Shenzhen Kangqiao Jiacheng Real Estate Investment Co., Ltd. Kangqiao Jiacheng
Konka Zhisheng Co., Ltd. Konka Zhisheng
Anhui Kaikai Shijie E-commerce Co., Ltd. Kaikai Shijie
Shenzhen E2info Internet Science and Technology Co., Ltd. E2info
II. Basis for the preparation of financial statements
1. Preparation basic
With the going-concern assumption as the basis and based on transactions and other events
that actually occurred, the Group prepared financial statements in accordance with issued by the Ministry of
Finance with Decree No. 33 and revised with Decree No. 76, the 41 specific accounting
standards, the Application Guidance of Accounting Standards for Business Enterprises, the
Interpretation of Accounting Standards for Business Enterprises and other regulations issued
and revised from 15 Feb. 2006 onwards (hereinafter jointly referred to as “the Accounting
Standards for Business Enterprises”, “China Accounting Standards” or “CAS”), as well as
the Rules for Preparation Convention of Disclosure of Public Offering Companies No.15 –
General Regulations for Financial Reporting (revised in 2014) by China Securities
Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises,
the Group adopted the accrual basis in accounting. Except for some financial instruments,
where impairment occurred on an asset, an impairment reserve was withdrawn accordingly
pursuant to relevant requirements.
III. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Group are in compliance with in compliance with
the Accounting Standards for Business Enterprises, which factually and completely present
the Company’s financial positions as at 30 Jun. 2015, business results and cash flows of
77
2015 Semi-annual Report of Konka Group Co., Ltd.
Jan.–Jun. of 2015, and other relevant information. In addition, the Company’s and the
Group’s financial statements meet the requirements of disclosing financial statements and
notes thereto stated in the Rules for Preparation Convention of Disclosure of Public Offering
Companies No.15 – General Regulations for Financial Reporting (revised in 2014) by China
Securities Regulatory Commission.
IV. Important accounting policies and estimations
The Company and each subsidiary formulated certain specific accounting policies and
accounting estimates according to the actual production and operation characteristics and the
regulations of the relevant ASBE on the transactions and events of the revenues recognition.
For the details, please refer to each description of Notes IV. 22 “Revenues”. For the notes of
the significant accounting judgment and estimations made by the management layer, please
refer to Notes IV. 27 “Significant accounting judgment and estimations”.
1. Fiscal period
The Group’s fiscal periods include fiscal years and fiscal periods shorter than a complete
fiscal year. The Group’s fiscal year starts on 1 Jan. and ends on 31 Dec. of every year
according to the Gregorian calendar.
2. Operating cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing
to realizing cash or cash equivalents. An operating cycle for the Group is 12 months, which is
also the classification criterion for the liquidity of its assets and liabilities.
3. Recording currency
Renminbi is the dominant currency used in the economic circumstances where the Group and
its domestic subsidiaries are involved. Therefore, the Group and its domestic subsidiaries use
Renminbi as their bookkeeping base currency. And the Group adopted Renminbi as the
bookkeeping base currency when preparing the financial statements for the reporting year.
4. Accounting treatment methods for business combinations under the same control or not
under the same control
Business combinations, it is refer to two or more separate enterprises merge to form a
reporting entity transactions or events. Business combination is divided into under the same
control and those non under the same control.
(1) Business combinations under the same control
A business combination under the same control is a business combination in which all of the
combining enterprises are ultimately controlled by the same party or the same parties both
before and after the business combination and on which the control is not temporary. In a
business combination under the same control, the party which obtains control of other
combining enterprise(s) on the combining date is the combining party, the other combining
enterprise(s) is (are) the combined party. The “combining date” refers to the date on which
the combining party actually obtains control on the combined party.
The assets and liabilities that the combining party obtains in a business combination shall be
measured on the basis of their carrying amount in the combined party on the combining date.
As for the balance between the carrying amount of the net assets obtained by the combining
party and the carrying amount of the consideration paid by it (or the total par value of the
shares issued), the additional paid-in capital (share premium) shall be adjusted. If the
additional paid-in capital (share premium) is not sufficient to be offset, the retained earnings
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shall be adjusted.
The direct cost for the business combination of the combining party shall be recorded into the
profits and losses at the current period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the
combining enterprises are not ultimately controlled by the same party or the same parties
both before and after the business combination. In a business combination not under the same
control, the party which obtains the control on other combining enterprise(s) on the purchase
date is the acquirer, and other combining enterprise(s) is (are) the acquiree.
For a business combination not under the same control, the combination costs shall include
the fair values, on the acquisition date, of the assets paid, the liabilities incurred or assumed
and the equity securities issued by the acquirer in exchange for the control on the acquiree,
the expenses for audit, legal services and assessment, and other administrative expenses,
which are recorded into the profits and losses in the current period. The trading expenses for
the equity securities or debt securities issued by the acquirer as the combination
consideration shall be recorded into the amount of initial measurement of the equity
securities or debt securities. The involved contingent consideration shall be recorded into the
combination costs at its fair value on the acquiring date. Where new or further evidences
emerge, within 12 months since the acquiring date, against the existing circumstances on the
acquiring date and the contingent consideration thus needs to be adjusted, the combined
goodwill shall be adjusted accordingly. The combination costs of the acquirer and the
identifiable net assets obtained by it in the combination shall be measured according to their
fair values at the acquiring date. The acquirer shall recognize the positive balance between
the combination costs and the fair value of the identifiable net assets it obtains from the
acquiree as business reputation. Where the combination costs are less then the fair value of
the identifiable net assets it obtains from the acquiree, the acquirer shall re-examine the
measurement of the fair values of the identifiable assets, liabilities and contingent liabilities it
obtains from the acquiree as well as the combination costs. If, after the reexamination, the
combination costs are still less than the fair value of the identifiable net assets it obtains from
the acquiree, the acquirer shall record the balance into the profits and losses of the current
period.
As for the deductible temporary differences the acquirer obtains from the acquiree which are
not recognized into deferred income tax liabilities due to their not meeting the recognition
standards, if new or further information shows that the relevant situation has existed on the
acquiring date and the economic benefits brought by the deductible temporary differences the
acquirer obtains from the acquiree on the acquiring date can be realized, they shall be
recognized into deferred income tax assets and the relevant goodwill shall be reduced. Where
the goodwill is not sufficient to be offset, the difference shall be recognized into the profits
and losses in the current period. In other circumstances than the above, where the deductible
temporary differences are recognized into deferred income tax assets on the acquiring date,
they shall be recorded into the profits and losses in the current period.
In a business combination not under same control realized by two or more transactions of
exchange, according to about the 5th Notice about the Treasury Issuing the Accounting
Standards for Enterprises (Finance accounting) [2012] No. 19 Criterion about the “package
deal” (see note 4, 4 (2)), Whether the deals are “package deal” or not, belong to the “package
deal”, see the previous paragraphs described in this section and note 4, 10 “long term equity
investment transaction” and conduct accounting treatment, those not belong to the “package
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deal” distinguish between the individual financial statements and the consolidated financial
statements and conduct relevant accounting treatment.
In the individual financial statements, the sum of the book value and new investment cost of
the Group holds in the acquiree before the acquiring date shall be considered as initial cost of
the investment. Other related comprehensive gains in relation to the equity interests that the
Group holds in the acquiree before the acquiring date shall be treated on the same basis as the
acquiree directly disposes the related assets or liabilities when disposing the investment (that
is, except for the corresponding share in the changes in the net liabilities or assets with a
defined benefit plan measured at the equity method arising from the acquiree’s
re-measurement, the others shall be transferred into current investment gains).
In the Group’s consolidated financial statements, as for the equity interests that the Group
holds in the acquiree before the acquiring date, they shall be re-measured according to their
fair values at the acquiring date; the positive difference between their fair values and carrying
amounts shall be recorded into the investment gains for the period including the acquiring
date. Other related comprehensive gains in relation to the equity interests that the Group
holds in the acquiree before the acquiring date shall be treated on the same basis as the
acquiree directly disposes the related assets or liabilities when disposing the investment (that
is, except for the corresponding share in the changes in the net liabilities or assets with a
defined benefit plan measured at the equity method arising from the acquiree’s
re-measurement, the others shall be transferred into current investment gains on the acquiring
date).
5. Methods for preparing consolidated financial statements
(1) Principle for determining the consolidation scope
The consolidation scope for financial statements is determined on the basis of control. The
term “control” is the power of the Group upon an investee, with which it can take part in
relevant activities of the investee to obtain variable returns and is able to influence the
amount of returns. The consolidated financial statements comprise the financial statements of
the Group and its subsidiaries. A subsidiary is an enterprise or entity controlled by the Group.
(2) Methods for preparing the consolidated financial statements
Subsidiaries are fully consolidated from the date on which the Group obtains control on their
net assets and operation decision-making and are de-consolidated from the date when such
control ceases. As for a disposed subsidiary, its operating results and cash flows before the
disposal date has been appropriately included in the consolidated income statement and cash
flow statement; and as for subsidiaries disposed in the current period, the opening items in
the consolidated balance sheet are not adjusted. For a subsidiary acquired in a business
combination not under the same control, its operating results and cash flows after the
acquiring date have been appropriately included in the consolidated income statement and
cash flow statement, and the opening items and comparative items in the consolidated
financial statements are not adjusted. For a subsidiary acquired in a business combination
under the same control or a combined party obtained in a takeover, its operating results and
cash flows from the beginning of the reporting period of the combination to the combination
date have been appropriately included in the consolidated income statement and cash flow
statement, and the comparative items in the consolidated financial statements are adjusted at
the same time.
The financial statements of subsidiaries are adjusted in accordance with the accounting
policies and accounting period of the Group during the preparation of the consolidated
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financial statements, where the accounting policies and the accounting periods are
inconsistent between the Group and subsidiaries. For a subsidiary acquired from a business
combination not under the same control, the individual financial statements of the subsidiary
are adjusted based on the fair value of the identifiable net assets at the acquisition date.
All significant inter-group balances, transactions and unrealized profits are offset in the
consolidated financial statements.
The portion of a subsidiary’s shareholders’ equity and the portion of a subsidiary’s net profits
and losses for the period not held by the Group are recognized as minority interests and
minority shareholder profits and losses respectively and presented separately under
shareholders’ equity and net profits in the consolidation financial statements. The portion of a
subsidiary’s net profits and losses for the period that belong to minority interests is presented
as the item of “minority shareholder profits and losses” under the bigger item of net profits in
the consolidated financial statements. Where the loss of a subsidiary shared by minority
shareholders exceeds the portion enjoyed by minority shareholders in the subsidiary’s
opening owners’ equity, minority interests are offset.
Where the Group losses control on its original subsidiaries due to disposal of some equity
investments or other reasons, the residual equity interests are re-measured according to the
fair value on the date when such control ceases. The summation of the consideration obtained
from the disposal of equity interests and the fair value of the residual equity interests, minus
the portion in the original subsidiary’s net assets measured on a continuous basis from the
acquisition date that is enjoyable by the Group according to the original shareholding
percentage in the subsidiary, is recorded in investment gains for the period when the Group’s
control on the subsidiary ceases. Other comprehensive incomes in relation to the equity
investment in the original subsidiary are treated on the same accounting basis as the acquiree
directly disposes the relevant assets or liabilities (that is, except for the changes in the net
liabilities or assets with a defined benefit plan resulted from re-measurement of the original
subsidiary, the rest shall all be transferred into current investment gains) when such control
ceases. And subsequent measurement is conducted on the residual equity interests according
to the No. 2 Accounting Standard for Business Enterprises —Long-term Equity Investments
or the No. 22 Accounting Standard for Business Enterprises—Recognition and Measurement
of Financial Instruments. For details, see note IV, 13 “long term equity investment” or 9
“financial instruments”.
Where the Group losses control on its original subsidiaries due to step by step disposal of
equity investments through multiple transactions, it need to distinguish the Group losses
control on its subsidiaries due to disposal of equity investments whether belongs to a package
deal. All the transaction terms, conditions and economic impact of the disposal of
subsidiaries’ equity investment are in accordance with one or more of the following
conditions, which usually indicate the multiple transactions, should be considered as a
package deal for accounting treatment. ① These deals are at the same time or under the
condition of considering the influence of each other to concluded; ② These transactions only
be as a whole can achieve a complete business result; ③ The occurrence of a deal depends
on at least one other transactions；④ A deal alone is not economical, it is economical with
other trading together. Those not belong to a package deal, each of them a deal depends on
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circumstances respectively conduct accounting treatment in accordance with the applicable
principles of “part disposal of subsidiaries of a long-term equity investment under the
condition of not losing control on its subsidiaries” (see note IV 13, (2) ④) and “Where the
Group losses control on its original subsidiaries due to disposal of some equity investments
or other reasons” (See the front paragraph) relevant transactions of the Group losses control
on its subsidiaries due to disposal of equity investments belonging to a package deal,
considered as a transaction and conduct accounting treatment. However, Before losing
control, every disposal cost and corresponding net assets balance of subsidiary of disposal
investment are confirmed as other comprehensive income in consolidated financial
statements, which together transferred into the current profits and losses in the lose of
control , when the Group losing control on its subsidiary.
6. Classification of joint arrangements and accounting treatment of joint operations
A joint arrangement refers to an arrangement jointly controlled by two participants or above.
The Group classifies joint arrangements into joint operations and joint ventures according to
its rights and duties in the joint arrangements. A joint operation refers to a joint arrangement
where the Group enjoys assets and has to bear liabilities related to the arrangement. A joint
venture refers to a joint arrangement where the Group is only entitled to the net assets of the
arrangement.
The Group’s investments in joint ventures are measured at the equity method according to
the accounting policies mentioned in Note IV. 13 (2) ② “Long-term equity investments
measured at the equity method”.
For a joint operation, the Group, as a joint operator, recognizes the assets and liabilities that it
holds and bears in the joint operation, and recognizes the jointly-held assets and jointly-borne
liabilities according to the Group’s stake in the joint operation; recognizes the income from
sale of the Group’s share in the output of the joint operation; recognizes the income from sale
of the joint operation’s outputs according to the Group’s stake in it; and recognizes the
expense solely incurred to the Group and the expense incurred to the joint operation
according to the Group’s stake in it.
When the Group, as a joint operator, transfers or sells assets (the assets not constituting
business, the same below) to the joint operation, or purchases assets from the joint operation,
before the assets are sold to a third party, the Group only recognizes the share of the other
joint operators in the gains and losses arising from the sale. Where impairment occurs to the
assets as prescribed in , the Group shall fully recognizes the loss for a transfer or sale of assets to a
joint operation; and shall recognize the loss according to its stake in the joint operation for a
purchase of assets from the joint operation.
7. Recognition standard for cash and cash equivalents
In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit
that can be used for cover, and short-term (usually due within 3 months since the day of
purchase) and high circulating investments, which are easily convertible into known amount
of cash and whose risks in change of value are minimal.
8. Foreign currency businesses and translation of foreign currency financial statements
(1) Accounting treatments for translation of foreign currency transactions
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As for a foreign currency transaction, the Company shall convert the amount in a foreign
currency into amount in its bookkeeping base at the spot exchange rate (usually referring to
the central parity rate announced by the People’s Bank of China, the same below) of the
transaction date, while as for such transactions as foreign exchange or involving in foreign
exchange, the Company shall converted into amount in the bookkeeping base currency at
actual exchange rate the transaction is occurred.
(2) Accounting treatments for translation of foreign currency monetary items and
non-monetary items
On the balance sheet date, the foreign currency monetary items shall be translated at the spot
exchange rate on the balance sheet date. The exchange difference arising from the difference
between the spot exchange rate on the balance sheet date and the spot exchange rate at the
time of initial recognition or prior to the balance sheet date shall be recorded in the profits
and losses in the current period, excluding the following situations: ① the exchange
difference arising from foreign currency loans related to acquisition of fixed assets shall be
treated at the principle of capitalization of borrowing costs; ② the exchange difference
arising from the hedging instruments used for effective hedging of net overseas operation
investments shall be recorded into other comprehensive incomes, and shall be recognized
into current gains and losses when the net investments are disposed; and ③ the exchange
difference arising from change in the book balance of foreign currency monetary items
available for sale except the amortized costs shall be recorded into other comprehensive
gains and losses.
When it involves overseas business in preparing the consolidated financial statement, for the
translation difference of foreign currency monetary items of net investment in overseas
business arising from the change in exchange rate, it shall be recorded into other
comprehensive incomes; and be recorded into disposal gains and losses at current period
when disposing overseas business.
A foreign currency non-monetary item measured at the historical costs shall still be translated
at the spot exchange rate on the transaction date. Where the foreign non-monetary items
measured at the fair value shall be converted into amount in its bookkeeping base currency at
spot exchange rate, the exchange gains and losses arising thereof shall be treated as change in
fair value, and recorded into the current period gains and losses or as other comprehensive
incomes.
(3) Translation of foreign currency financial statements
When it involves overseas business in preparing the consolidated financial statement, for the
translation difference of foreign currency monetary items of net investment in overseas
business arising from the change in exchange rate, it shall be recorded into the item of
“difference of foreign currency financial statement translation” under the owners’ equity; and
be recorded into disposal gains and losses at current period when disposing overseas
business.
The foreign currency financial statement of overseas business should be translated in to RMB
financial statement by the following methods: The asset and liability items in the balance
sheets shall be translated at a spot exchange rate on the balance sheet date. Among the
owner’s equity items, except for the items as “undistributed profits”, other items shall be
translated at the spot exchange rate at the time when they are incurred. The income and
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expense items in the profit statements shall be translated at the spot exchange rate of the
transaction date. The undistributed profits at year-begin is the undistributed profits at the end
of last year after the translation; undistributed profits at year-end shall be listed as various
distribution items after the translation; after the translation, the balance between assets and
the sum of liabilities and owners’ equities shall be recorded into other comprehensive gains
and losses as difference of foreign currency translation. Where an enterprise disposes of an
overseas business without the control right, it shall shift the differences, which is presented
under the items of the owner’s equities in the balance sheet and which arises from the
translation of foreign currency financial statements relating to this overseas business, into the
disposal profits and losses of the current period by all or proportion of the disposed overseas
business.
Foreign cash flow shall be translated at the spot exchange rate of the date of cash flow
incurred. The influence of exchange rate on the cash flow shall be adjustment item and
individually listed in the cash flow statement.
And the opening balance and the actual balance of last year shall be listed at the amounts
after translation of foreign currency financial statement in last year.
Where the control of the Group over an overseas operation ceases due to disposal of all or
some of the Group’s owner’s equity in the overseas operation or other reasons, the
foreign-currency statement translation difference belonging to the parent company’s owner’s
equity in relation to the overseas operation which is stated under the shareholders’ equity in
the balance sheet shall be all restated as gains and losses of the disposal period.
Where the Group’s equity in an overseas operation decreases due to disposal of some equity
investment or other reasons but the Group still has control over the overseas operation, the
foreign-currency statement translation difference in relation to the disposed part of the
overseas operation shall be recorded into minority interests instead of current gains and
losses. If what’s disposed is some equity in an overseas associated enterprise or joint venture,
the foreign-currency statement translation difference related to the overseas operation shall
be recorded into the gains and losses of the current period of the disposal according to the
disposal ratio.
9. Financial instruments
The Group recognizes a financial asset or liability when it becomes a party of the relevant
financial instrument contract. Financial assets and liabilities are measured at fair value in
initial recognition. As for the financial assets and liabilities measured at fair value of which
changes are recorded into current gains and losses, the relevant dealing expenses are directly
recorded into gains and losses; and the dealing expenses on other kinds of financial assets
and liabilities are included in the amounts initially recognized.
(1) Determination of the fair value of main financial assets and financial liabilities
Fair value refers to the price that a market participant shall receive for selling an asset or
shall pay for transferring a liability in an orderly transaction on the measurement date. As for
the financial assets or financial liabilities for which there is an active market, the quoted
prices in the active market shall be used to determine the fair values thereof. The quoted
prices in the active market refers to the prices available from stock exchange, broker’s
agencies, guilds, pricing organization and etc., which represent the actual trading price under
equal transaction. Where there is no active market for a financial instrument, the enterprise
concerned shall adopt value appraisal techniques, including the prices adopted by the parties,
who are familiar with the condition, in the latest market transaction upon their own free will,
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the current fair value obtained by referring to other financial instruments of the same
essential nature, the cash flow capitalization method and the option pricing model, etc., to
determine its fair value.
(2) Classification, recognition and measurement of financial assets
The purchase and sale of financial assets under the normal ways shall be recognized and
stopped to be recognized respectively at the price of transaction date. Financial assets shall
be classified into the following four categories when they are initially recognized: (a) the
financial assets which are measured at their fair values and the variation of which is recorded
into the profits and losses of the current period, (b) the investments which will be held to
their maturity; (c) loans and the account receivables; and (d) financial assets available for
sale.
① The financial assets which are measured at their fair values and the variation of which is
recorded into the profits and losses of the current period
Including transactional financial assets and the financial assets which are designated to be
measured at their fair value when they are initially recognized and of which the variation is
recorded into the profits and losses of the current period;
The financial assets meeting any of the following requirements shall be classified as
transactional financial assets：A. The purpose to acquire the said financial assets is mainly for
selling them in the near future; B. Forming a part of the identifiable combination of financial
instruments which are managed in a centralized way and for which there are objective
evidences proving that the enterprise may manage the combination by way of short-term
profit making in the near future; C. Being a derivative instrument, excluding the designated
derivative instruments which are effective hedging instruments, or derivative instruments to
financial guarantee contracts, and the derivative instruments which are connected with the
equity instrument investments for which there is no quoted price in the active market, whose
fair value cannot be reliably measured, and which shall be settled by delivering the said
equity instruments.
The financial assets meeting any of the following requirements shall be designated as
financial assets which are measured at their fair values and the variation of which is recorded
into the profits and losses of the current period for initial recognition: A. the designation can
eliminate or significantly reduce the difference of relevant gains and losses between
recognition and measurement causing from different bases for measurement of financial
assets; B. The official written documents for risk management and investment strategies of
the enterprise have clearly stated that it shall ,manage, evaluate and report to important
management personnel based on the fair value, about the financial assets group or the group
of financial assets & liabilities which the financial assets are belong to.
For the financial assets which are measured at their fair values and the variation of which is
recorded into the profits and losses of the current period shall continue to be measured by fair
value, gains and losses of change in fair value, dividends and interest related with these
financial assets should be recorded into gains and losses of current period.
① The financial assets which are measured at their fair values and the variation of which is
recorded into the profits and losses of the current period
Including transactional financial assets and the financial assets which are designated to be
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measured at their fair value when they are initially recognized and of which the variation is
recorded into the profits and losses of the current period;
The financial assets meeting any of the following requirements shall be classified as
transactional financial assets：A. The purpose to acquire the said financial assets is mainly for
selling them in the near future; B. Forming a part of the identifiable combination of financial
instruments which are managed in a centralized way and for which there are objective
evidences proving that the enterprise may manage the combination by way of short-term
profit making in the near future; C. Being a derivative instrument, excluding the designated
derivative instruments which are effective hedging instruments, or derivative instruments to
financial guarantee contracts, and the derivative instruments which are connected with the
equity instrument investments for which there is no quoted price in the active market, whose
fair value cannot be reliably measured, and which shall be settled by delivering the said
equity instruments.
The follow-up measurement of the tradable financial assets is by fair value, and the profits or
losses formed from the changes of the fair value and the relevant dividend and interests of the
financial assets should be recorded in the current gains and losses.
② Held-to-maturity investment
The term “held-to-maturity investment” refers to a non-derivative financial asset with a fixed
date of maturity, a fixed or determinable amount of repo price and which the enterprise holds
for a definite purpose or the enterprise is able to hold until its maturity.
For the held-to-maturity investment adopting actual interest rate method, which is measured
at the post-amortization costs, the profits and losses that arise when such financial assets or
financial liabilities are terminated from recognition, or are impaired or amortized, shall be
recorded into the profits and losses of the current period.
The actual interest rate method refers to the method by which the post-amortization costs and
the interest incomes of different installments or interest expenses are calculated in light of the
actual interest rates of the financial assets or financial liabilities (including a set of financial
assets or financial liabilities). The actual interest rate refers to the interest rate adopted to
cash the future cash flow of a financial asset or financial liability within the predicted term of
existence or within a shorter applicable term into the current carrying amount of the financial
asset or financial liability.
When the actual interest rate is determined, the future cash flow shall be predicted on the
basis of taking into account all the contractual provisions concerning the financial asset or
financial liability (the future credit losses shall not be taken into account).and also the various
fee charges, trading expenses, premiums or reduced values, etc., which are paid or collected
by the parties to a financial asset or financial liability contract and which form a part of the
actual interest rate.
③ Loans and the accounts receivables
Loans and the accounts receivables refer to non-derivative financial assets, which there is no
quotation in the active market, with fixed recovery cost or recognizable.
Financial assets that are defined as loans and the accounts receivables by the Group including
notes receivables, accounts receivables, interest receivable, dividends receivable and other
receivables etc..
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Loans and the accounts receivables are made follow-up measurement on the basis of
post-amortization costs employing the effective interest method. Gains or loss arising from
the termination recognition, impairment occurs or amortization shall be recorded into the
profits and losses of the current period.
④ Assets available for sales
Assets available for sales including non-derivative financial asset that has been assigned as
assets available for sales on the initial recognition and financial assets excluded those
measured at fair value and of which the variation into profits and losses of the current period,
they are some financial assets, loans and accounts receivables, held-to-maturity investment.
The cost at the period-end of the available-for-sale liabilities instruments should be
confirmed according to its amortized cost method, that is the initially recognized amount
which deduct the principal that had been repaid, to plus or minus the accumulative
amortization amount formed by the amortization between the difference of the initially
recognized amount and the amount on the due date that adopted the actual interest rate
method, and at the same time deduct the amount after the impairment loss happened. The
cost at the period-end of the available-for-sale liabilities instruments is its initial cost.
Financial assets available-for-trade are subsequently measured at fair value, and gains or
losses arising from changes in the fair value are recognized as other comprehensive income，
and be carried forward when the said financial assets stopped recognition, then it shall be
recorded into the profits and losses of the current period. But, the equity instrument
investment which neither have quotation in the active market nor its fair value could not be
reliable measured, as well as the derivative financial assets that concern with the equity
instruments and should be settled through handing over to its equity instruments, should take
the follow-up measurement according to the cost.
Interest receive during the holding of assets available for sales and cash dividends with
distribution announcement by invested companies, it shall be recorded into the profits and
losses of the current period.
(3) Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset
except for the financial assets that measured by the fair value. If there is objective evidence
indicating a financial asset may be impaired, a provision is provided for the impairment.
The Group carries out a separate impairment test for every financial asset which is
individually significant. As for a financial asset which is individually insignificant, an
impairment test is carried out separately or in the financial asset group with similar credit risk.
Where the financial asset (individually significant or insignificant) is found not impaired
after the separate impairment test, it is included in the financial asset group with similar
credit risk and tested again on the group basis. Where the impairment loss is recognized for
an individual financial asset, it is not included in the financial asset group with similar credit
risk for an impairment test.
① Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by
the estimated present value of future cash flow. The difference is recorded as impairment loss.
If there is objective evidence to indicate the recovery of value of financial assets after
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impairment, and it is related with subsequent event after recognition of loss, the impairment
loss recorded originally can be reversed. The carrying value of financial assets after
impairment loss reversed shall not exceed the amortized cost of the financial assets without
provisions of impairment loss on the reserving date.
② Impairment of available-for-sale financial assets
When it judged that the decrease of fair value of the available-for-sale equity instrument
investment is serious and not temporarily after comprehensive considering relevant factors, it
reflected that the available-for-sale equity instrument investment occurred impairment. Of
which, the “serious decline” refers to the accumulative decline range of the fair value over
20%; while the “non-temporary decline” refers to the consecutive decline time of the fair
value over 12 months.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from
the decrease of the fair value of the capital reserve which is directly included are transferred
out and recorded in the profits and losses for the current period. The accumulative losses
transferred out are the balance obtained from the initially obtained cost of the said financial
asset after deducting the principals as taken back, the amortized amount, the current fair
value and the impairment loss originally recorded in the profits and losses.
Where the impairment loss has been recognized for an available-for-sale financial asset, if,
within the accounting periods thereafter, there is any objective evidence proving that the
value of the said financial asset has been restored and the restoration is objectively related to
the events that occur after the impairment loss was recognized, the originally recognized
impairment loss is reversed. The impairment losses on the available-for-sale equity
instrument investments are reversed and recognized as other comprehensive incomes, and the
impairment losses on the available-for-sale liability instruments are reversed and recorded in
the profits and losses for the current period.
The impairment loss incurred to an equity instrument investment for which there is no quoted
price in the active market and whose fair value cannot be reliably measured, or incurred to a
derivative financial asset which is connected with the said equity instrument investment and
which must be settled by delivering the said equity investment, is not reversed.
(4) Recognition and measurement of financial asset transfers
Where a financial asset satisfies any of the following requirements, the recognition of it is
terminated: ① The contractual rights for collecting the cash flow of the said financial asset
are terminated; ② The said financial asset has been transferred and nearly all of the risks and
rewards related to the ownership of the financial asset to the transferee; or ③ The said
financial asset has been transferred. And the Group has ceased its control on the said
financial asset though it neither transfers nor retains nearly all of the risks and rewards
related to the ownership of the financial asset.
Where the Group neither transfers nor retains nearly all of the risks and rewards related to the
ownership of a financial asset, and it does not cease its control on the said financial asset, it
recognizes the relevant financial asset and liability accordingly according to the extent of its
continuous involvement in the transferred financial asset. The term "continuous involvement
in the transferred financial asset" refers to the risk level that the enterprise faces resulting
from the change of the value of the financial asset.
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If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the
difference between the amounts of the following 2 items is recorded in the profits and losses
of the current period: (1) The book value of the transferred financial asset; and (2) The sum
of consideration received from the transfer, and the accumulative amount of the changes of
the fair value originally recorded in other comprehensive incomes.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the
book value of the transferred financial asset is apportioned between the portion whose
recognition has been stopped and the portion whose recognition has not been stopped
according to their respective relative fair value, and the difference between the amounts of
the following 2 items is included into the profits and losses of the current period: (1) The
summation of the consideration received from the transfer and the portion of the
accumulative amount of changes in the fair value originally recorded in other comprehensive
incomes which corresponds to the portion whose recognition has been stopped; and (2) The
amortized carrying amounts of the aforesaid amounts.
In respect of the assets using recourse to sell or using endorsement to transfer, the Group
needs to determine whether almost all of the risks and rewards of the financial asset
ownership are transferred. If almost all of the risks and rewards of the financial asset
ownership had been transferred to the transferee, derecognize the financial assets. For almost
all of the risks and rewards of the financial asset ownership retained, do not end to recognize
the financial assets. For which neither transfer or retain almost all of the risks and rewards of
the financial asset ownership, continuously judge whether the Company retain the control of
the assets, and conduct accounting treatment according to the principle of mentioned in the
previous paragraphs.
(5) Classification and measurement of financial liabilities
In the initial recognition, financial liabilities are divided into the financial liabilities measured
at fair values and whose changes are recorded in current gains and losses and other financial
liabilities. Financial liabilities are initially recognized at their fair values. As for a financial
liability measured at fair value and whose changes are recorded in current gains and losses,
the relevant trading expense is directly recorded in the profits and losses for the current
period. As for other financial liabilities, the relevant trading expenses are recorded in the
initially recognized amounts.
① Financial liabilities measured at fair values and whose changes are recorded in current
gains and losses
Such financial liabilities are divided into transactional financial liabilities and financial
liabilities designated to be measured at fair values and whose changes are recorded in current
gains and losses in the initial recognition under the same conditions where such financial
assets are divided into transactional financial assets and financial assets designated to be
measured at fair values and whose changes are recorded in current gains and losses in the
initial recognition.
Financial liabilities measured at fair values and whose changes are recorded in current gains
and losses are subsequently measured at their fair values. Gains or losses arising from the fair
value changes, as well as the dividend and interest expenses in relation to the said financial
liabilities, are recorded in the profits and losses for the current period.
② Other financial liabilities
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As for a derivative financial liability connected to an equity instrument for which there is not
quoted price in an active market and whose fair value cannot be reliably measured and which
must be settled by delivering the equity instrument, it is subsequently measured on the basis
of costs. Other financial liabilities are subsequently measured according to the amortized cost
using the actual interest rate method. Gains or losses arising from de-recognition or
amortization of the said financial liabilities is recorded in the profits and losses for the
current period.
③ Financial guarantee contract and loan commitment
For the financial guarantee contracts which are not designated as a financial liability
measured at its fair value and the variation thereof is recorded into the profits and losses of
the current period, or the loan commitment which is not designated as a financial liability
measured at its fair value and the variation thereof is recorded into the gains and losses that
will be loaned lower than the market interest rate, which shall be initially recognized by fair
value, and the subsequent measurement shall be made after they are initially recognized
according to the higher one of the following: a. the amount as determined according to the
Accounting Standards for Enterprises No. 13 – Contingencies; b. the surplus after
accumulative amortization as determined according to the principles of the Accounting
Standards for Enterprises No. 14 - Revenues is subtracted from the initially recognized
amount.
(6) De-recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may
the recognition of the financial liability be terminated in all or partly. Where the Group
(debtor) enters into an agreement with a creditor so as to substitute the existing financial
liabilities by way of any new financial liability, and if the contractual stipulations regarding
the new financial liability is substantially different from that regarding the existing financial
liability, it terminates the recognition of the existing financial liability, and at the same time
recognizes the new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise
concerned shall include into the profits and losses of the current period for the gap between
the book value which has been terminated from recognition and the considerations it has paid
(including the non-cash assets it has transferred out and the new financial liabilities it has
assumed)
(7) Derivatives and embedded derivatives
Derivative financial instruments include derivatives are initially measured at fair value at the
date when the derivative contracts are entered into and are substantially re-measured at fair
value. The resulting gain and loss is recognized in profit or loss.
An embedded derivative is separated from the hybrid instrument, where the hybrid
instrument is not designated as a financial asset or financial liability at fair value though
profit or loss, and the treated as a standalone derivative if (a) the economic characteristics
and risks of the embedded derivative are not closely related to the economic characteristics
and risks of the host contract; and (b) a separate instrument with the same terms as the
embedded derivative would meet the definition of a derivative. If the Company is unable to
measure the embedded derivative separately either at acquisition or at a subsequent balance
sheet date, it designates the entire hybrid instrument as a financial asset or financial liability
at fair value through profit or loss.
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(8) Offsetting financial assets and financial liabilities
When the Group has a legal right that is currently enforceable to set off the recognized
financial assets and financial liabilities, and intends either to settle on a net basis, or to realize
the financial asset and settle the financial liability simultaneously, a financial asset and a
financial liability shall be offset and the net amount is presented in the balance sheet. Except
for the above circumstances, financial assets and financial liabilities shall be presented
separately in the balance sheet and shall not be offset.
(9) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the
Company after deducting all of its liabilities. The Group issues (including refinancing),
re-purchases, sells or written-offs the equity instrument as the disposing of the changes of the
equity. The Group not recognized the changes of the fair value of the equity instrument. The
transaction expenses related to the equity transaction would be deducted from the equity.
All types of distribution (excluding stock dividends) made by the Group to holders of equity
instruments are deducted from shareholders’ equity. The Group does not recognize any
changes in the fair value of equity instruments.
10. Receivables
Receivables include account receivables and other accounts receivables.
(1) Recognition of provision for bad debts:
The Group shall test the carrying amount of receivables on the balance sheet date. Where
there is any objective evidence proving that such receivables have been impaired, an
impairment provision shall be made.
① Debtor has serious financial difficult;
② Debtor goes against the contract clause (for instance, breach of faith or overdue paying
interests or principal);
③ Debtors have a great probability of bankruptcy or other financial reorganization;
④ Other objective evidence proving such accounts receivable has been impaired;
(2) Withdraw method of provision for bad debts
① The recognition criteria and method of individual provision for bad debts of receivables
that are individually significant
The Group recognized the receivables with amount above RMB 20 million and other
receivables above 10 million as receivables with significant single amounts and withdrawn
the provision for bad debts.
The Group made an independent impairment test on receivables with significant single
amounts; the financial assets without impairment by independent impairment test should be
included in financial assets portfolio with similar credit risk to take the impairment test.
Receivables was recognized with impairment should no longer be included in receivables
portfolio with similar credit risk to take the impairment test.
② The recognition and method of provision for bad debts of receivables by credit risk
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portfolio
A. Recognition of credit risk group
Receivables that not individually significant and individually significant but without
impairment by independent impairment test, are grouped on the basis of similarity and
relevance of credit risk. This credit risk usually reflects the debtor’s ability to repay all the
due accounts in accordance with contract for such assets, which also are related with the
measurement on future cash flow of the examined assets.
Recognition basic of different groups:
Item Basic
Portfolio 1:Aging group Divide the groups according to the credit risks characteristics of the accounts
receivable
Portfolio 2:Internal related party Divide the groups according to the credit risks characteristics of whether the creditor
groups of the Company is the internal related party of the Company
B. Withdrawal method of provision for bad debts recognized by credit risk group
For the impairment test implemented by groups, the amount of provision for bad debts was
appraised and recognized in accordance with the structure of accounts receivable group and
similar characteristics of credit risk (the debtor’s ability to pay off the loans in accordance
with the provisions of contract), experience of losses, current economic status and the
predicted losses in the accounts receivable group.
Withdrawal method of the bad debts provision of the different groups:
Item Withdrawal method
Portfolio 1:Aging group Aging analysis method
Portfolio 2Internal related party groups Executes the impairment test individually and if there is no impairment, should
of the Company not withdraw the bad debt provision
In the groups, adopting aging analysis method to withdraw bad debt provision:
Withdrawal proportion for accounts Withdrawal proportion for other
Age
receivable (%) accounts receivable (%)
Within 1 year (including 1 year, similarly
hereinafter) 2 2
1-2 years 5 5
2-3 years 20 20
3-4 years 50 50
4-5 years 50 50
Over 5 years 100 100
③ Receivables with insignificant amount but being individually withdrawn the provision for
bad debts
The Group made independent impairment test on receivables with insignificant amount but
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with the following characteristics, if any objective evidence shows that the accounts
receivable has been impaired, impairment loss shall be recognized on the basis of the gap
between the current values of the future cash flow lower than its book value so as to
withdraw provision for bad debts:
A. Receivables have dispute with the other parties or involving lawsuit and arbitration;
B. Receivables have obvious indication showing that the debtors are likely to fail to perform
the duty of repayment, etc.
(3) Reversal of provision for bad debts
If there is any objective evidence proving that the value of the said receivables has been
restored, and it is objectively related to the events occurred after such loss is recognized, the
impairment-related losses as originally recognized shall be reversed and be recorded into the
profits and losses of the current period. However, the reversed carrying amount shall not be
any more than the post-amortization costs of the said accounts receivable on the day of
reverse under the assumption that no provision is made for the impairment.
11. Inventory
(1) Classification
The Group’s inventories are classified as non-property inventories and property inventories.
And the non-property inventories include raw materials, goods in process; merchandise on
hand, goods delivered and circulating materials, etc; while the property inventories include
property in process and finished property, etc.
① The finished property refers to the finished and held-for-sale property.
② The property in process (development costs) refers to the unfinished property with the
development purpose for sale.
(2) Pricing method for outgoing inventories
Pricing method: weighted average method
The inventories shall be measured in light of their cost when obtained. The cost of inventory
consists of purchase costs, processing costs and other costs. Inventory is accounted by weight
average method upon receiving and giving. For merchandise on hand shall be accounted by
planned cost, if the difference between planned cost of and actual cost of raw materials is
accounted through the cost variance item, and the planned cost is adjusted to the actual cost
according to the cost difference which the carryover and given-out inventory should shoulder
in the period.
The property inventories are initially measured at the costs, and the costs of the developed
property include the land premium, expenditures for supporting infrastructures, expenditures
for construction and installation projects, the borrowing costs before the completion of the
developed project and other expenses occurred during the development process.
① The public supporting facilities recorded the development costs at the actual costs, the
amortization upon completion was transferred to the costs of houses and other
available-for-sale property, while as for the supporting facilities with operating value and
beneficiary rights owned by the Group as well as available for individual sale and
measurement, which shall be recorded into the “investment property”
② For the accounting policies on borrowing costs occurred for developing property, please
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refer to Note IV. 17 Pricing of “Borrowing Costs”.
(3) Recognition basis of net realizable value and withdrawal method of depreciation reserves
for inventories
The net realizable value refers, in the ordinary course of business, to the account after
deducting the estimated cost of completion, estimated sale expense and relevant taxes from
the estimated sale price of inventories. The net realizable value of inventories shall be fixed
on the basis of valid evidence as well as under consideration of purpose of inventories and
the effect of events after balance-sheet-date.
On the balance sheet date, the inventories shall be measured according to the cost or the net
realizable value, whichever is lower. If the net realizable value is lower than the cost, it shall
withdraw the depreciation reserves for inventories, which was withdrawn in accordance with
the balance that the cost of individual inventory item exceeding the net realizable value.
After withdrawing the depreciation reserves for inventories, if the factors, which cause any
write-down of the inventories, have disappeared, causing the net realizable value of
inventories is higher than its carrying amount; the amount of write-down shall be reversed
from the original amount of depreciation reserve for inventories. The reversed amount shall
be included in the profits and losses of the current period.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method of the low-value consumption goods and packing articles
The low-value consumption goods should be amortized by one time amortization when
acquiring and the packing articles are amortized by one time/gradation amortization when
acquiring.
12. Long-term equity investments
The long-term equity investments of this part refer to the long-term equity investments that
the Group has control, joint control or significant influence over the investees. The long-term
equity investment that the Group does not have control, joint control or significant influence
over the investees, should be recognized as available-for-sale financial assets or be measured
by fair value with the changes should be included in the financial assets accounting of the
current gains and losses, and please refer the details of the accounting policies to Notes IV 9
“financial instrument”.
Joint control, refers to the control jointly owned according to the relevant agreement on an
arrangement by the Group and the relevant activities of the arrangement should be decided
only after the participants which share the control right make consensus. Significant
influence refers to the power of the Group which could anticipate in the finance and the
operation polices of the investees, but could not control or jointly control the formulation of
the policies with the other parties.
(1) Recognition of investment costs
As for long-term equity investments acquired by enterprise merger, if the merger is under the
same control, the share of the book value of the owner’s equity of the merged enterprise, on
the date of merger, is regarded as the initial cost of the long-term equity investment. The
difference between the initial cost of the long-term equity investment and the payment in
cash, non-cash assets transferred as well as the book value of the debts borne by the merging
party shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the
retained earnings shall be adjusted. If the consideration of the merging enterprise is that it
issues equity securities, it shall, on the date of merger, regard the share of the book value of
the shareholder's equity of the merged enterprise on the consolidated financial statement of
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the ultimate control party as the initial cost of the long-term equity investment. The total face
value of the stocks issued shall be regarded as the capital stock, while the difference between
the initial cost of the long-term equity investment and total face value of the shares issued
shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the
retained earnings shall be adjusted. The equities of the combined party which respectively
acquired through multiple transaction under the same control that ultimately form into the
combination of the enterprises under the same control, should be disposed according whether
belongs to package deal; if belongs to package deal, each transaction would be executed
accounting treatment by the Company as a transaction of acquiring the control right. If not
belongs to package deal, it shall, on the date of merger, regard the enjoyed share of the book
value of the shareholder's equity of the merged enterprise on the consolidated financial
statement of the ultimate control party as the initial cost of the long-term equity investment,
and as for the difference between the initial investment cost of the long-term equity
investment and sum of the book value of the long-term equity investment before the
combination and the book value of the consideration of the new payment that further
required on the combination date, should adjust the capital reserve; if the capital reserve is
insufficient to dilute, the retained earnings shall be adjusted. The equity investment held
before the combination date which adopted the equity method for accounting, or the other
comprehensive income confirmed for the available-for-sale financial assets, should not have
any accounting disposal for the moment.
For the long-term investment required from the business combination under different control,
the initial investment cost regarded as long-term equity investment on the purchasing date
according to the combination cost, the combination costs shall be the sum of the fair values
of the assets paid, the liabilities incurred or assumed and the equity securities issued by the
Company. The equities of the acquirees which respectively acquired through multiple
transaction that ultimately form into the combination of the enterprises under the different
control, should be disposed according whether belongs to package deal; if belongs to
package deal, each transaction would be executed accounting treatment by the Company as a
transaction of acquiring the control right. If not belongs to package deal, the sum of the book
value of the original held equity investment of the acquirees and the newly added investment
cost should be regarded as the initial investment cost of the long-term equity investment that
changed to be accounted by cost method. If the original held equity is calculated by cost
method, the other relevant comprehensive income would not have any accounting disposal
for the moment. If the original held equity investment is the financial assets available for sale,
its difference between the fair value and the book value as well as the accumulative changes
of the fair value that include in the other comprehensive income, should transfer into the
current gains and losses.
The commission fees for audit, law services, assessment and consultancy services and other
relevant expenses occurred in the business combination by the combining party or the
purchase party, shall be recorded into current profits and losses upon their occurrence; the
transaction expense from the issuance of equity securities or bonds securities which are as
consideration for combination by the combining party, should be recorded as the initial
amount of equity securities and bonds securities.
Besides the long-term equity investments formed by business combination, the other
long-term equity investments shall be initially measured by cost, the cost is fixed in
accordance with the ways of gaining, such as actual cash payment paid by the Group, the fair
value of equity securities issued by the Group, the agreed value of the investment contract or
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agreement, the fair value or original carrying amount of exchanged assets from non-monetary
assets exchange transaction, the fair value of the long-term equity investments, etc. The
expenses, taxes and other necessary expenditures directly related with gaining the long-term
equity investments shall also be recorded into investment cost. The long-term equity
investment cost for those could execute significant influences on the investees because of
appending the investment or could execute joint control but not form as control, should be as
the sum of the fair value of the original held equity investment and the newly added
investment cost recognized according to the No.22 of Accounting Standards for Business
Enterprises—Recognition and Measurement of Financial Instrument.
(2) Subsequent measurement and recognition of gains or losses
A long-term equity investment where the investing enterprise has joint control (except for
which forms into common operators) or significant influence over the investors should be
measured by equity method. Moreover, long-term equity investment adopting the cost
method in the financial statements, and which the Company has control on invested entity.
① Long-term equity investment measured by adopting cost method
The price of a long-term equity investment measured by adopting the cost method shall be
included at its initial investment cost and append as well as withdraw the cost of investing
and adjusting the long-term equity investment. The return on investment at current period
shall be recognized in accordance with the cash dividend or profit announced to distribute by
the invested entity, except the announced but not distributed cash dividend or profit included
in the actual payment or consideration upon gaining the investment.
② Long-term equity investment measured by adopting equity method
If the initial cost of a long-term equity investment is more than the Company's attributable
share of the fair value of the invested entity's identifiable net assets for investment, the initial
cost of the long-term equity investment may not be adjusted. If the initial cost of a long-term
equity investment is less than the Company's attributable share of the fair value of the
invested entity's identifiable net assets for investment, the difference shall be included in the
current profits and losses and the cost of the long-term equity investment shall be adjusted
simultaneously.
When measured by adopting equity method, respectively recognize investment income and
other comprehensive income according to the net gains and losses as well as the portion of
other comprehensive income which should be enjoyed or be shared, and at the same time
adjust the book value of the long-term equity investment; corresponding reduce the book
value of the long-term equity investment according to profits which be declared to distribute
by the investees or the portion of the calculation of cash dividends which should be enjoyed;
for the other changes except for the net gains and losses, other comprehensive income and
the owners’ equity except for the profits distribution of the investees, should adjust the book
value of the long-term equity investment as well as include in the capital reserve. The
investing enterprise shall, on the ground of the fair value of all identifiable assets of the
invested entity when it obtains the investment, recognize the attributable share of the net
profits and losses of the invested entity after it adjusts the net profits of the invested entity. If
the accounting polices adopted by the investees is not accord with that of the Group, should
be adjusted according to the accounting policies of the Group and the financial statement of
the investees during the accounting period and according which to recognize the investment
income as well as other comprehensive income. For the transaction happened between the
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Group and associated enterprises as well as joint ventures, if the assets launched or sold not
form into business, the portion of the unrealized gains and losses of the internal transaction,
which belongs to the Group according to the calculation of the enjoyed proportion, should
recognize the investment gains and losses on the basis. But the losses of the unrealized
internal transaction happened between the Group and the investees which belongs to the
impairment losses of the transferred assets, should not be neutralized. The assets launched by
the Group to the associated enterprises or the joint ventures if could form into business, the
long-term equity investment without control right which acquired by the investors, should
regard the fair value of the launched business as the initial investment cost the newly added
long-term equity investment, and for the difference between the initial investment cost and
the book value of the launched business, should be included into the current gains and losses
with full amount. The assets sold by the Group to the associated enterprises or the joint
ventures if could form into business, the difference between the acquired consideration and
the book value of the business should be included in the current gains and losses with full
amount. The assets purchased by the Group to the associated enterprises or the joint ventures
if could form into business, should be accounting disposed according to the regulations of No.
20 of ASBE—Business Combination, and should be recognized gains or losses related to the
transaction with full amount.
The Group shall recognize the net losses of the invested enterprise until the book value of the
long-term equity investment and other long-term rights and interests which substantially
form the net investment made to the invested entity are reduced to zero. However, if the
Group has the obligation to undertake extra losses, it shall be recognized as the estimated
liabilities in accordance with the estimated duties and then recorded into investment losses at
current period. If the invested entity realizes any net profits later, the Group shall, after the
amount of its attributable share of profits offsets against its attributable share of the
un-recognized losses, resume recognizing its attributable share of profits.
For the long-term equity investment held by the Group before the first execution of the new
accounting criterion on 1 Jan. 2008 of the associated enterprises and joint ventures, if there is
debit difference of the equity investment related to the investment, should be included in the
current gains and losses according to the amount of the straight-line amortization during the
original remained period.
③ Acquiring shares of minority interest
In the preparation for the financial statements, the balance existed between the long-term
equity investment increased by acquiring shares of minority interest and the attributable net
assets on the subsidiary calculated by the increased shares held since the purchase date (or
combination date), the capital reserves shall be adjusted, if the capital reserves are not
sufficient to offset, the retained profits shall be adjusted.
④ Disposal of long-term equity investment
In the preparation of financial statements, the Company disposed part of the long-term equity
investment on subsidiaries without losing its controlling right on them, the balance between
the disposed price and attributable net assets of subsidiaries by disposing the long-term
equity investment shall be recorded into owners’ equity; where the Company losses the
controlling right by disposing part of long-term equity investment on such subsidiaries, it
shall treated in accordance with the relevant accounting policies in Note IV. 5 (2) — Method
on preparation of combined financial statements.
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For other ways on disposal of long-term equity investment, the balance between the book
value of the disposed equity and its actual payment gained shall be recorded into current
profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained
equity after disposal still adopts the equity method for measurement, the other
comprehensive income originally recorded into owners’ equity should adopt the same basis
of the accounting disposal of the relevant assets or liabilities directly disposed by the
investees according to the corresponding proportion. The owners’ equity recognized owning
to the changes of the other owners’ equity except for the net gains and losses, other
comprehensive income and the profits distribution of the investees, should be transferred into
the current gains and losses according to the proportion.
For the long-term equity investment which adopts the cost method of measurement, if the
remained equity still adopt the cost method, the other comprehensive income recognized
owning to adopting the equity method for measurement or the recognition and measurement
standards of financial instrument before acquiring the control of the investees, should adopt
the same basis of the accounting disposal of the relevant assets or liabilities directly disposed
by the investees and should be carried forward into the current gains and losses according to
the proportion; the changes of the other owners’ equity except for the net gains and losses,
other comprehensive income and the profits distribution among the net assets of the investees
which recognized by adopting the equity method for measurement, should be carried forward
into the current gains and losses according to the proportion.
For those the Group lost the control of the investees by disposing part of the equity
investment as well as the remained equity after disposal could execute joint control or
significant influences on the investees, should change to measure by equity method when
compiling the individual financial statement and should adjust the measurement of the
remained equity to equity method as adopted since the time acquired; if the remained equity
after disposal could not execute joint control or significant influences on the investees,
should change the accounting disposal according to the relevant regulations of the
recognition and measurement standards of financial instrument, and its difference between
the fair value and book value on the date lose the control right should be included in the
current gains and losses. For the other comprehensive income recognized by adopting equity
method for measurement or the recognition and measurement standards of financial
instrument before the Group acquired the control of the investees, should execute the
accounting disposal by adopting the same basis of the accounting disposal of the relevant
assets or liabilities directly disposed by the investees when lose the control of them, while the
changes of the other owners’ equity except for the net gains and losses, other comprehensive
income and the profits distribution among the net assets of the investees which recognized by
adopting the equity method for measurement, should be carried forward into the current
gains and losses according to the proportion. Of which, for the disposed remained equity
which adopted the equity method for measurement, the other comprehensive income and the
other owners’ equity should be carried forward according to the proportion; for the disposed
remained equity which changed to execute the accounting disposal according to the
recognition and measurement standards of financial instrument, the other comprehensive
income and the other owners’ equity should be carried forward in full amount.
For those the Group lost the control of the investees by disposing part of the equity
investment, the disposed remained equity should change to calculate according to the
recognition and measurement standards of financial instrument, and difference between the
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fair value and book value on the date lose the control right should be included in the current
gains and losses. For the other comprehensive income recognized from the original equity
investment by adopting the equity method, should execute the accounting disposal by
adopting the same basis of the accounting disposal of the relevant assets or liabilities directly
disposed by the investees when terminate the equity method for measurement, while for the
owners’ equity recognized owning to the changes of the other owner’s equity except for the
net gains and losses, other comprehensive income and the profits distribution of the investees,
should be transferred into the current investment income with full amount when terminate
adopting the equity method.
The Group respectively disposes the equity investment of the subsidiaries through multiple
transactions until lose the control right, if the above transactions belongs to the package deal,
should execute the accounting disposal by regarding each transaction as a deal of disposing
the equity investment of the subsidiaries until lose the control right, while the difference
between each expenses of the disposal and the book value of the long-term equity investment
in accord with the disposed equity before losing the control right, should firstly be
recognized as other comprehensive income then be transferred into the current gains and
losses of losing the control right along until the time when lose it.
13. Investment real estates
The term “investment real estates” refers to the real estate held for generating rent and/or
capital appreciation. Investment real estates of the Group include the right to use any land
which has already been rented; the right to use any land which is held and prepared for
transfer after appreciation; and the right to use any building which has already been rented.
The initial measurement of the investment real estate shall be made at its cost. Subsequent
expenditures incurred for an investment real estate is included in the cost of the investment
real estate when it is probable that economic benefits associated with the investment real
estate will flow to the Group and the cost can be reliably measured, otherwise the
expenditure is recognized in profit or loss in the period in which they are incurred.
The Group shall make a follow-up measurement to the investment real estates by employing
the cost pattern on the date of the balance sheet. An accrual depreciation or amortization shall
be made for the investment real estates in the light of the accounting policies of the use right
of buildings or lands.
For details of impairment test method and withdrawal method of impairment provision of
investment real estates, please refer to Note IV. 16. Impairment of Non-current Non-financial
Assets.
When owner-occupied real estate or inventories are changed into investment real estate or
investment real estate is changed into owner-occupied real estate, of which book value prior
to the change shall be the entry value after the change.
When an investment real estate is changed to an owner-occupied real estate, it would be
transferred to fixed assets or intangible assets at the date of such change. When an
owner-occupied real estate is changed to be held to earn rental or for capital appreciation, the
fixed asset or intangible asset is transferred to investment real estate at the date of such
change. If the fixed asset or intangible asset is changed into investment real estate measured
by adopting the cost pattern, whose book value prior to the change shall be the entry value
after the change; if the fixed asset or intangible asset is changed into investment real estate
measured by adopting the fair value pattern, whose fair value on the date of such change
shall be the entry value after the change
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An investment real estate is derecognized on disposal or when the investment real estate is
permanently withdrawn from use and no future economic benefits are expected from its
disposal. The amount of proceeds on sale, transfer, retirement or damage of an investment
real estate less its carrying amount and related taxes and expenses is recognized in profit or
loss in the period in which it is incurred.
14. Fixed assets
(1) Conditions for recognition of fixed assets
The term "fixed assets" refers to the tangible assets that simultaneously possess the features
as follows: (a) they are held for the sake of producing commodities, rendering labor service,
renting or business management; and (b) their useful life is in excess of one fiscal year. The
fixed assets are only recognized when the relevant economic benefits probably flow in the
Group and its cost could be reliable measured. The fixed assets should take the initial
measurement according to the cost and at the same time consider the influences of the factors
of the estimated discard expenses.
(2) Depreciation methods of each fixed asset
The fixed assets should be withdrawn and depreciation by straight-line depreciation within
the useful life since the next month when the fixed assets reach the estimated available state.
The useful life, estimated net salvage and the yearly discounted rate of each fixed asset are as
follows:
Expected net
Annual
Category of fixed assets Method Useful life (Year) salvage value
deprecation (%)
(%)
Housing and building
Straight-line
20-40 10.00 2.25-4.50
depreciation
Machinery equipment
Straight-line 10.00
10 9.00
depreciation
Electronic equipment
Straight-line 10.00
5 18.00
depreciation
Transportation vehicle
Straight-line 10.00
5 18.00
depreciation
Other equipment
Straight-line 5 10.00
18.00
depreciation
The “expected net salvage value” refers to the expected amount that the Group may obtain
from the current disposal of a fixed asset after deducting the expected disposal expenses at
the expiration of its expected useful life.
(3) Testing method of impairment and withdrawal method of provision for impairment on
fixed assets
For details of the testing method of impairment and withdraw method of impairment
provision for impairment on fixed assets, please refer to Note IV. 19 “Long-term assets
impairment”.
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(4) Recognition basis, pricing and depreciation method of fixed assets by finance lease
The “finance lease” shall refer to a lease that has transferred in substance all the risks and
rewards related to the ownership of an asset. Its ownership may or may not eventually be
transferred. The fixed assets by finance lease shall adopt the same depreciation policy for
self-owned fixed assets. If it is reasonable to be certain that the lessee will obtain the
ownership of the leased asset when the lease term expires, the leased asset shall be fully
depreciated over its useful life. If it is not reasonable to be certain that the lessee will obtain
the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully
depreciated over the shorter one of the lease term or its useful life.
(5) Other explanations
The follow-up expenses related to a fixed asset, if the economic benefits pertinent to this
fixed asset are likely to flow into the enterprise and its cost can be reliably measured, shall be
recorded into cost of fixed assets and ultimately recognized as the book value of the replaced
part; otherwise, they shall be included in the current profits and losses.
Terminate to recognize the fixed assets when the fixed assets under the disposing state or be
estimated that could not occur any economy benefits through using or disposing. When the
Group sells, transfers or discards any fixed assets, or when any fixed assets of the Group is
damaged or destroyed, the Group shall deduct the book value of the fixed assets as well as
the relevant taxes from the disposal income, and include the amount in the current profits and
losses.
The Group shall check the useful life, expected net salvage value and depreciation method of
the fixed assets at the end of the year at least, if there is any change, it shall be regarded as a
change of the accounting estimates.
15. Construction in progress
Construction in process is measured at actual cost. Actual cost comprises construction costs,
borrowing costs that are eligible for capitalization before the fixed assets being ready for
their intended us and other relevant costs. Construction in process is transferred to fixed
assets when the assets are ready for their intended use.
For details of the testing method of impairment and withdraw method of impairment
provision on construction in progress, please refer to Note IV. 19 “Long-term assets
impairment”.
16. Borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or
premiums on borrowings, ancillary expenses, and exchange balance on foreign currency
borrowings. When the borrowing costs can be directly attributable to the construction or
production of assets eligible for capitalization, and the asset disbursements or the borrowing
costs have already incurred, and the construction or production activities which are necessary
to prepare the asset for its intended use or sale have already started, the capitalization of
borrowing costs begins. When the asset eligible for capitalization under acquisition and
construction or production is ready for the intended use or sale, the capitalization of the
borrowing costs shall be ceased. Other borrowing costs shall be recognized as expenses when
incurred.
The to-be-capitalized amount of interests shall be determined in light of the actual interests
incurred of the specially borrowed loan at the present period minus the income of interests
earned on the unused borrowing loans as a deposit in the bank or as a temporary investment;
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the enterprise shall calculate and determine the to-be-capitalized amount on the general
borrowing by multiplying the weighted average asset disbursement of the part of the
accumulative asset disbursements minus the general borrowing by the capitalization rate of
the general borrowing used. The capitalization rate shall be calculated and determined in
light of the weighted average interest rate of the general borrowing.
During the period of capitalization, the exchange balance on foreign currency special
borrowings shall be capitalized; the exchange balance on foreign currency general
borrowings shall be recorded into current profits and losses.
The term “assets eligible for capitalization” refers to the fixed assets, investment real estate,
inventories and other assets, of which the acquisition and construction or production may
take quite a long time to get ready for its intended use or for sale.
Where the acquisition and construction or production of a qualified asset is interrupted
abnormally and the interruption period lasts for more than 3 months, the capitalization of the
borrowing costs shall be suspended.
17. Intangible assets
(1) Pricing method, useful life and impairment test
The term “intangible asset” refers to the identifiable non-monetary assets possessed or
controlled by enterprises which have no physical shape.
The intangible assets shall be initially measured according to its cost. The costs related with
the intangible assets, if the economic benefits related to intangible assets are likely to flow
into the enterprise and the cost of intangible assets can be measured reliably, shall be
recorded into the costs of intangible assets; otherwise, it shall be recorded into current profits
and losses upon the occurrence.
The use right of land gained is usually measured as intangible assets. For the self-developed
and constructed factories and other constructions, the related expenditures on use right of
land and construction costs shall be respectively measured as intangible assets and fixed
assets. For the purchased houses and buildings, the related payment shall be distributed into
the payment for use right of land and the payment for buildings, if it is difficult to be
distributed, the whole payment shall be treated as fixed assets.
For intangible assets with a finite service life, from the time when it is available for use, the
cost after deducting the sum of the expected salvage value and the accumulated impairment
provision shall be amortized by straight line method during the service life. While the
intangible assets without certain service life shall not be amortized.
At the end of period, the Group shall check the service life and amortization method of
intangible assets with finite service life, if there is any change, it shall be regarded as a
change of the accounting estimates. Besides, the Group shall check the service life of
intangible assets without certain service life, if there is any evidence showing that the period
of intangible assets to bring the economic benefits to the enterprise can be prospected, it shall
be estimated the service life and amortized in accordance with the amortization policies for
intangible assets with finite service life.
(2) R & D expenses
The expenditures for internal research and development projects of an enterprise shall be
classified into research expenditures and development expenditures.
The research expenditures shall be recorded into the profit or loss for the current period.
The development expenditures shall be confirmed as intangible assets when they satisfy the
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following conditions simultaneously, and shall be recorded into profit or loss for the current
period when they don’t satisfy the following conditions.
① It is feasible technically to finish intangible assets for use or sale;
② It is intended to finish and use or sell the intangible assets;
③ The usefulness of methods for intangible assets to generate economic benefits shall be
proved, including being able to prove that there is a potential market for the products
manufactured by applying the intangible assets or there is a potential market for the
intangible assets itself or the intangible assets will be used internally;
④ It is able to finish the development of the intangible assets, and able to use or sell the
intangible assets, with the support of sufficient technologies, financial resources and other
resources;
⑤ The development expenditures of the intangible assets can be reliably measured.
As for expenses that can’t be identified as research expenditures or development
expenditures, the occurred R & D expenses shall be all included in current profits and losses.
(3) Testing method of impairment and withdraw method of impairment provision of
intangible assets
For details of the testing method of impairment and withdraw method of impairment
provision on intangible assets, see Notes IV. 19 “Long-term assets impairment”.
18. Amortization method of long-term deferred expenses
Long-term deferred expenses refer to general expenses with the apportioned period over one
year (one year excluded) that have occurred but attributable to the current and future periods.
Long-term deferred expense shall be amortized averagely within benefit period.
19. Impairment of long-term assets
For non-current financial Assets of fixed Assets, projects under construction, intangible
Assets with limited service life, investing real estate with cost model, long-term equity
investment of subsidiaries, cooperative enterprises and joint ventures, the Group should
judge whether decrease in value exists on the date of balance sheet. Recoverable amounts
should be tested for decrease in value if it exists. Other intangible Assets of reputation and
uncertain service life and other non-accessible intangible assets should be tested for decrease
in value no matter whether it exists.
If the recoverable amount is less than book value in impairment test results, the provision for
impairment of differences should include in impairment loss. Recoverable amounts would be
the higher of net value of asset fair value deducting disposal charges or present value of
predicted cash flow. Asset fair value should be determined according to negotiated sales price
of fair trade. If no sales agreement exists but with asset active market, fair value should be
determined according to the Buyer’s price of the asset. If no sales agreement or asset active
market exists, asset fair value could be acquired on the basis of best information available.
Disposal expenses include legal fees, taxes, cartage or other direct expenses of merchantable
Assets related to asset disposal. Present value of predicted asset cash flow should be
determined by the proper discount rate according to Assets in service and predicted cash flow
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of final disposal. Asset depreciation reserves should be calculated on the basis of single
Assets. If it is difficult to predict the recoverable amounts for single Assets, recoverable
amounts should be determined according to the belonging asset group. Asset group is the
minimum asset combination producing cash flow independently.
In impairment test, book value of the business reputation in financial report should be shared
to beneficial asset group and asset group combination in collaboration of business merger. It
is shown in the test that if recoverable amounts of shared business reputation asset group or
asset group combination are lower than book value, it should determine the impairment loss.
Impairment loss amount should firstly be deducted and shared to the book value of business
reputation of asset group or asset group combination, then deduct book value of all assets
according to proportions of other book value of above assets in asset group or asset group
combination except business reputation.
After the asset impairment loss is determined, recoverable value amounts would not be
returned in future.
20. Employee compensation
Employee compensation of the Company mainly includes short-term employee
compensation, departure benefits, demission benefits and other long-term employee
compensation. Of which:
Short-term compensation mainly including salary, bonus, allowances and subsidies,
employee services and benefits, medical insurance premiums, birth insurance premium,
industrial injury insurance premium, housing fund, labor union expenditure and personnel
education fund, non-monetary benefits etc. The short-term compensation actually happened
during the accounting period when the active staff offering the service for the Group should
be recognized as liabilities and is included in the current gains and losses or relevant assets
cost. Of which the non-monetary benefits should be measured according to the fair value.
Welfare after demission mainly includes setting drawing plan. Defined contribution plans
include basic endowment insurance, unemployment insurance and annuity. Deposited
amounts are charged to relevant asset costs or current profits and losses during the
period in which they are incurred. Defined benefit plan of the Company is internal early
retirement plan. According to anticipated accumulative welfare unit, the Company makes
estimates by unbiased and consistent actuarial assumption for the demographic variables and
financial variables, measures the obligations produced in defined benefit plans, and
determines the vesting period. On balance sheet date, the Company will list all obligations in
defined benefit plans as present value and include current service costs into current profits
and losses.
When terminating labor relations before expiration of contract, or layoffs with compensations,
and the Company can not terminate the labor relations unilaterally or reduce the dimission
welfare, remuneration and liabilities produced from the dimission welfare should be
determined and included in current profits and losses when determining the costs of
dismission welfare and recombination. However, dimission welfare not fully paid within 12
months after annual report period should be handled the same as other long-term employees’
payrolls.
The inside employee retirement plan is treated by adopting the same principle with the above
dismiss ion welfare. The group would recorded the salary and the social security insurance
fees paid and so on from the employee’s service terminative date to normal retirement date
into current profits and losses (dismiss ion welfare) under the condition that they meet the
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recognition conditions of estimated liabilities.
The other long-term welfare that the Group offers to the staffs, if met with the setting
drawing plan, should be accounting disposed according to the setting drawing plan, while the
rest should be disposed according to the setting revenue plan.
21. Estimated liabilities
The company should recognize the related obligation as a provision for liability when the
obligation meets the following conditions: (1) That obligation is a present obligation of the
enterprise; (2) It is probable that an outflow of economic benefits from the enterprise will be
required to settle the obligation; (3) A reliable estimate can be made of the amount of the
obligation.
On the balance sheet date, an enterprise shall take into full consideration of the risks,
uncertainty, time value of money, and other factors pertinent to the Contingencies to measure
the estimated liabilities in accordance with the best estimate of the necessary expenses for the
performance of the current obligation.
When all or some of the expenses necessary for the liquidation of an estimated liabilities of
an enterprise is expected to be compensated by a third party, the compensation should be
separately recognized as an asset only when it is virtually certain that the reimbursement will
be obtained. Besides, the amount recognized for the reimbursement should not exceed the
book value of the estimated liabilities.
22. Revenue
(1) Revenue from selling goods
No revenue from selling goods may be recognized unless the following conditions are met
simultaneously: the significant risks and rewards of ownership of the goods have been
transferred to the buyer by the enterprise; the enterprise retains neither continuous
management right that usually keeps relation with the ownership nor effective control over
the sold goods; the relevant amount of revenue can be measured in a reliable way; the
relevant economic benefits may flow into the enterprise; and the relevant costs incurred or to
be incurred can be measured in a reliable way.
The recognition of revenue from commodities for the home market when shipping the goods:
for good exported by way of FOB, the revenue shall be recognized once the goods were
delivered to the carrier designated by the purchaser; for goods exported by way of CIF, the
revenue shall be recognized once the goods reach the port of the purchase.
(2) Providing labor services
If the Group can reliably estimate the outcome of a transaction concerning the labor services
it provides, it shall recognize the revenue from providing services employing the
percentage-of-completion method on the date of the balance sheet. The completed proportion
of a transaction concerning the providing of labor services shall be decided by the proportion
of the labor service already provided to the total labor service to provide.
The outcome of a transaction concerning the providing of labor services can be measured in a
reliable way, means that the following conditions shall be met simultaneously: ① The
amount of revenue can be measured in a reliable way; ② The relevant economic benefits are
likely to flow into the enterprise; ③ The schedule of completion under the transaction can be
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confirmed in a reliable way; and ④ The costs incurred or to be incurred in the transaction
can be measured in a reliable way.
If the outcome of a transaction concerning the providing of labor services cannot be
measured in a reliable way, the revenue from the providing of labor services shall be
recognized in accordance with the amount of the cost of labor services incurred and expected
to be compensated, and make the cost of labor services incurred as the current expenses. If it
is predicted that the cost of labor services incurred couldn’t be compensated, thus no revenue
shall be recognized.
Where a contract or agreement signed between Group and other enterprises concerns selling
goods and providing of labor services, if the part of sale of goods and the part of providing
labor services can be distinguished from each other and can be measured respectively, the
part of sale of goods and the part of providing labor services shall be treated respectively. If
the part of selling goods and the part of providing labor services can not be distinguished
from each other, or if the part of sale of goods and the part of providing labor services can be
distinguished from each other but can not be measured respectively, both parts shall be
conducted as selling goods.
(3) Recognition method of the sales revenues of real estate
The Group had signed the sales contract with the real estate had completed and be examined
qualified, and reached the referable using conditions agreed by the sales contract as well as at
the same time the housing accounts had been recognized the realize of the sales revenues
when received with full amount according to the sales contract.
(4) Royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue should be
recognized as revenue on accrual basis.
(5) Interest revenue
The amount of interest revenue should be measured and confirmed in accordance with the
length of time for which the Group’s monetary fund is used by others and the agreed interest
rate.
(6)Property leasing revenue
For the recognition method of the property leasing revenue, please refer to Notes IV. 25.
23. Government subsidies
A government subsidy means the monetary or non-monetary assets obtained free by the
Group from the government, but excluding the capital invested by the government as the
owner of the enterprise. Government subsidies consist of the government subsidies pertinent
to assets and government subsidies pertinent to income.
If a government subsidy is a monetary asset, it shall be measured in the light of the received
or receivable amount. If a government subsidy is a non-monetary asset, it shall be measured
at its fair value. If its fair value cannot be obtained in a reliable way, it shall be measured at
its nominal amount. The government subsidies measured at their nominal amounts shall be
directly included in the current profits and losses.
The government subsidies pertinent to assets shall be recognized as deferred income, equally
distributed within the useful lives of the relevant assets, and included in the current profits
and losses. The government subsidies pertinent to incomes shall be treated respectively in
accordance with the circumstances as follows: those subsidies used for compensating the
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related future expenses or losses of the enterprise shall be recognized as deferred income and
shall included in the current profits and losses during the period when the relevant expenses
are recognized; or those subsidies used for compensating the related expenses or losses
incurred to the enterprise shall be directly included in the current profits and losses.
Where it is necessary to refund any government subsidy which has been recognized, it shall
be treated respectively in accordance with the circumstances as follows: if there is the
deferred income concerned, the book balance of the deferred income shall be offset against,
but the excessive part shall be included in the current profits and losses; or if there is no
deferred income concerned to the government subsidy, it shall be directly included in the
current profits and losses.
24. Deferred income tax assets/deferred income tax liabilities
(1) Income tax of the current period
On the balance sheet date, for the current income tax liabilities (or assets) of the current
period as well as the part formed during the previous period, should be measured by the
income tax of the estimated payable (returnable) amount which be calculated according to
the regulations of the tax law. The amount of the income tax payable which is based by the
calculation of the current income tax expenses, are according to the result measured from the
corresponding adjustment of the pre-tax accounting profit of 2014 which in accord to the
relevant regulations of the tax law.
(2) Deferred income tax assets and deferred income tax liabilities
The difference between the book value of certain assets and liabilities and their tax
assessment basis, as well as the temporary difference occurs from the difference between the
book value of the items which not be recognized as assets and liabilities but could confirm
their tax assessment basis according to the regulations of the tax law, the deferred income tax
assets and the deferred income tax liabilities should be recognized by adopting liabilities law
of the balance sheet.
No deferred tax liability is recognized for a temporary difference arising from the initial
recognition of goodwill, the initial recognition of assets or liabilities due to a transaction
other than a business combination, which affects neither accounting profit nor taxable profit
(or deductible loss). Besides, no deferred tax assets is recognized for the taxable temporary
differences related to the investments of subsidiary companies, associated enterprises and
joint enterprises, and the investing enterprise can control the time of the reverse of temporary
differences as well as the temporary differences are unlikely to be reversed in the excepted
future. Otherwise, the Group should recognize the deferred income tax liabilities arising form
other taxable temporary difference.
No deferred taxable assets should be recognized for the deductible temporary difference of
initial recognition of assets and liabilities arising from the transaction which is not business
combination, the accounting profits will not be affected, nor will the taxable amount or
deductible loss be affected at the time of transaction. Besides, no deferred taxable assets
should be recognized for the deductible temporary difference related to the investments of
the subsidiary companies, associated enterprises and joint enterprises, which are not likely to
be reversed in the expected future or is not likely to acquire any amount of taxable income
tax that may be used for making up such deductible temporary differences. Otherwise, the
Company shall recognize the deferred income tax assets arising from a deductible temporary
difference basing on the extent of the amount of the taxable income that is likely to be
acquired to make up such deductible temporary differences
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For any deductible loss or tax deduction that can be carried forward to the next year, the
corresponding deferred income tax asset shall be determined to the extent that the amount of
future taxable income to be offset by the deductible loss or tax deduction to be likely
obtained.
On the balance sheet date, the deferred income tax assets and the deferred income tax
liabilities shall be measured at the tax rate applicable to the period during which the assets
are expected to be recovered or the liabilities are expected to be settled.
The book value of deferred income tax assets shall be reviewed at each balance sheet date. If
it is unlikely to obtain sufficient taxable income to offset against the benefit of the deferred
income tax asset, the book value of the deferred income tax assets shall be written down. Any
such write-down should be subsequently reversed where it becomes probable that sufficient
taxable income will be available.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.
The rest current income tax and the deferred income tax expenses or revenue should be
included into current gains and losses except for the current income tax and the deferred
income tax related to the transaction and events that be confirmed as other comprehensive
income or be directly included in the shareholders’ equity which should be included in other
comprehensive income or shareholders’ equity as well as the book value for adjusting the
goodwill of the deferred income tax occurs from the business combination.
(4) Offset of income tax
The current income tax assets and liabilities of the Group should be listed by the written-off
net amount which intend to executes the net amount settlement as well as the assets acquiring
and liabilities liquidation at the same time while owns the legal rights of settling the net
amount.
The deferred income tax assets and liabilities of the Group should be listed as written-off net
amount when having the legal rights of settling the current income tax assets and liabilities
by net amount and the deferred income tax and liabilities is relevant to the income tax which
be collected from the same taxpaying bodies by the same tax collection and administration
department or is relevant to the different taxpaying bodies but during each period which there
is significant reverse of the deferred income assets and liabilities in the future and among
which the involved taxpaying bodies intend to settle the current income tax and liabilities by
net amount or are at the same time acquire the asset as well as liquidate the liabilities.
25. Leasing
Financing leasing virtually transferred the whole risks and leasing of the compensation
related to the assets ownership and their ownership may eventually be transferred or maybe
not. Other leasing except for the financing leasing is operating leasing.
(1) Business of operating leases recorded by the Group as the lessee
The rent expenses from operating leases shall be recorded by the lessee in the relevant asset
costs or the profits and losses of the current period by using the straight-line method over
each period of the lease term. The initial direct costs shall be recognized as the profits and
losses of the current period. The contingent rents shall be recorded into the profits and losses
of the current period in which they actually arise.
(2) Business of operating leases recorded by the Group as the lessor
The rent incomes from operating leases shall be recognized as the profits and losses of the
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current period by using the straight-line method over each period of the lease term. The
initial direct costs of great amount shall be capitalized when incurred, and be recorded into
current profits and losses in accordance with the same basis for recognition of rent incomes
over the whole lease term. The initial direct costs of small amount shall be recorded into
current profits and losses when incurred. The contingent rents shall be recorded into the
profits and losses of the current period in which they actually arise.
(3) Business of finance leases recorded by the Group as the lessee
On the lease beginning date, the Group shall record the lower one of the fair value of the
leased asset and the present value of the minimum lease payments on the lease beginning
date as the entering value in an account, recognize the amount of the minimum lease
payments as the entering value in an account of long-term account payable, and treat the
balance between the recorded amount of the leased asset and the long-term account payable
as unrecognized financing charges. Besides, the initial direct costs directly attributable to the
leased item incurred during the process of lease negotiating and signing the leasing
agreement shall be recorded in the asset value of the current period. The balance through
deducting unrecognized financing charges from the minimum lease payments shall be
respectively stated in long-term liabilities and long-term liabilities due within 1 year.
Unrecognized financing charges shall be adopted by the effective interest rate method in the
lease term, so as to calculate and recognize current financing charges. The contingent rents
shall be recorded into the profits and losses of the current period in which they actually arise.
(4) Business of finance leases recorded by the Group as the lessor
On the beginning date of the lease term, the Group shall recognize the sum of the minimum
lease receipts on the lease beginning date and the initial direct costs as the entering value in
an account of the financing lease values receivable, and record the unguaranteed residual
value at the same time. The balance between the sum of the minimum lease receipts, the
initial direct costs and the unguaranteed residual value and the sum of their present values
shall be recognized as unrealized financing income. The balance through deducting
unrealized financing incomes from the finance lease accounts receivable shall be respectively
stated in long-term claims and long-term claims due within 1 year.
Unrecognized financing incomes shall be adopted by the effective interest rate method in the
lease term, so as to calculate and recognize current financing revenues. The contingent rents
shall be recorded into the profits and losses of the current period in which they actually arise.
26. Changes in main accounting policies and estimates
(1) Change of accounting policies
There was no any change of accounting policies of the Company in the reporting period.
(2) Change of accounting estimates
There was no any change of accounting estimate of the Company in the reporting period.
27. Critical accounting judgments and estimates
Due to the inside uncertainty of operating activity, the Group needed to make judgments,
estimates and assumption on the book value of the accounts without accurate measurement
during the employment of accounting policies. And these judgments, estimates and
assumption were made basing on the prior experience of the senior executives of the Group,
as well as in consideration of other factors. These judgments, estimates and assumption
would also affect the report amount of income, costs, assets and liabilities, as well as the
disclosure of contingent liabilities on balance sheet date. However, the uncertainty of these
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estimates was likely to cause significant adjustment on the book value of the affected assets
and liabilities.
The Group would check periodically the above judgments, estimates and assumption on the
basis of continuing operation. For the changes in accounting estimates only affected on the
current period, the influence should be recognized at the period of change occurred; for the
changes in accounting estimates affected the current period and also the future period, the
influence should be recognized at the period of change occurred and future period.
On the balance sheet date, the Group needed to make judgments, estimates and assumption
on the accounts in the following important items:
(1) Categorization of leasing
In accordance with Accounting Standards for Enterprises No. 21 – Leasing, the Group
categorized the leasing into operating lease and finance lease. During the categorization, the
management level needed to make analysis and judgment on whether all the risk and
compensation related with the leased assets had been transferred to the leasee, or whether the
Group had already undertaken all the risk and compensation related with the leased assets.
(2) Provision for bad debts
In accordance with the accounting policies of accounts receivable, the Group measured the
losses for bad debts by adopting allowance method. The impairment of accounts receivable
was based on the appraisal of the recoverability of accounts receivable. The impairment of
accounts receivable was dependent on the judgment and estimates. The actual amount and
the difference of previous estimates would affect the book value of accounts receivable and
the withdrawal and reversal on provision for bad debts of accounts receivable during the
period of estimates being changed.
(3) Provision for falling price of inventories
In accordance with the accounting policies of inventories, for the inventories that the costs
were more than the net realizable value as well as out-of-date and dull-sale inventories, the
Group withdrawn the provision for falling price of inventories on the lower one between
costs and net realizable value. Evaluating the falling price of inventories needed the
management level gain the valid evidence and take full consideration of the purpose of
inventories, influence of events after balance sheet date and other factors, and then made
relevant judgments and estimates. The actual amount and the difference of previous estimates
would affect the book value of inventories and the withdrawal and reversal on provision for
bad debts of inventories during the period of estimates being changed.
(4) The fair value of financial instrument
For the financial instruments without active market, the Group recognized the fair value by
various methods. These evaluation methods included discounted cash flow mode analysis,
etc. The Group needed to estimate the future cash flow, credit risk, fluctuation rate of market
and relativity and other factors, as well as choose the property discount rate. Due to the
uncertainty of relevant assumptions, so their changes would affect the fair value of financial
instrument.
(5) The impairment of financial assets available for sale
The Group judged whether the financial assets available for sale were impaired relying
heavily on the judgment and assumption of the management team, so as to decide whether
recognized the impairment losses in the income statement. During the process of making the
judgment and assumption, the Group needed to appraise the balance of the cost of the
investment exceeding its fair value and the continuous period, the financial status and
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business forecast in a short period, including the industrial situation, technical reform, credit
level, default rate and risk of counterparty.
(6) Provision for impairment of non-financial non-current assets
The Group made a judgment on the non-current assets other than financial assets whether
they had any indication of impairment on the balance sheet date. For the intangible assets
without finite service life, other than the annual impairment test, they should be subject to the
impairment test when there was any indication of impairment. For other non-current
non-financial assets, which should be subjected to impairment test when there was indication
of impairment indicated that the book value can’t be recoverable.
When the book value of the assets or assets portfolio was more than the recoverable amount,
which was the higher one between the net amount of fair value after deducting the disposal
expenses and the discounted amount of the estimated future cash flow, it means impairment
incurred.
The net amount of fair value after deducting the disposal expenses should be fixed the price
in the sale agreement for similar assets in the fair transaction minus the increased costs
directly attributable to the assets disposal.
When estimated the discounted value of future cash flow, the Group needed to make
important judgment on the output, selling price, relevant costs and the discount rate for
calculating the discounted amount, etc. When estimated the recoverable amount, the Group
would adopt all the available documents, including the prediction for relevant output, selling
price and relevant operating costs arising from reasonable and supportive assumptions.
The Group made the impairment test on goodwill at least one time per year, which required
to predict the discounted amount of the future cash flow of the assets or assets portfolio with
the distributed good will, for which, the Group needed to predict the future cash flow of the
assets or assets portfolio, and adopt the property discounted rate to decide the discounted
amount of future cash flow.
(7) Depreciation and amortization
For the investment real estate, fixed assets and intangible assets, the Group withdrew the
depreciation and amortization by adopting the straight-line method during the service life
after full consideration of the salvage value. The Group checked the service life periodically
so as to decide the amount of depreciation and amortization at each reporting period. The
service life was fixed by the Group in accordance with the previous experience of the similar
assets and the expected technical update. If there was any significant change on the previous
estimates, the depreciation and amortization expenses should be adjusted.
(8) Expenditures for development
When fixing the amount of capitalization, the management level of the Group needed to
make assumption on the predicted future cash flow, property discounted rate and estimated
beneficiary period for relevant assets.
(9) Deferred income tax assets
Within the limit that it was likely to have sufficient taxable profits to offset the losses, the
Group recognized the deferred income tax assets by all the unused tax losses, which needed
the management level of the Group to estimate time and amount of the future taxable profits
incurred with many judgments, as well as integrate strategy of tax payment, to decide the
amount of deferred income tax assets which should be recognized.
(10) Income tax
During the routine operating activities, there were some uncertainty in the ultimate tax
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treatment and calculation for parts of transactions. Some accounts of such transaction could
be listed as pre-tax expenditures only after the approval of taxation authorities. If there were
any differences between the ultimate result of recognition for these taxation maters and their
initial estimates, the differences would affect the current income tax and deferred income tax
at the period of ultimate recognition.
(11) Internal early retirement welfare and supplementary retirement welfare
Amounts of expenditures and liabilities of internal early retirement welfare and
supplementary retirement welfare should be determined according to assumption terms.
Assumption terms include discount rate, average growth rate of medical costs, growth rate of
subsidies for early retirement employees and retirees and other factors. The differences of
actual results and assumption should be confirmed immediately and included into costs of
current year. Although the management have adopted reasonable assumption terms, changes
of actual experience value and assumption terms may affect the internal early retirement
welfare, supplementary retirement benefits and balance of liabilities.
(12) Estimated liabilities
The Group made the estimation on product quality guarantee, predicted loss of contract and
the fine for delayed delivery etc. and withdrew the relevant provision for estimated liabilities
in accordance the provisions of contract, current knowledge and experience. Under the
condition that the contingent event has formed a current duty and fulfilling the duty is likely
to cause the economical interest outflow the Group, the Group measures the estimated
liabilities in accordance with the best estimate of the necessary expenses for the performance
of the current duty. The recognition and measurement of estimated liabilities were heavily
relied on the judgment of the management team. During the process of making judgment, the
Group needed to appraise the relevant risks, uncertainty and the time value of money and etc.
Of which, the Group estimated the liabilities basing on the after-sale services commitments
to the customers upon the sale, repair and reform of goods. When estimating the liabilities,
the Group has fully taken the consideration of the latest repair experience, but which may not
reflect the repair situation in the future. Any increase / decrease of the provision for estimated
liabilities may affect the profits and losses in the future periods.
V. Taxation
1. Main taxes and tax rate
Category of taxes Specific situation of the taxes rate
Calculated the output tax at 17% of taxable income and paid the VAT by the
amount after deducting the deductible withholding VAT at current period, of
VAT which the subsidiary Europe Konka of 21%, Telecommunication Technology of
17%, 6%, which see details to (3); Shushida Logistics of 11%, 6% which see
details to (4)
Business tax Paid by 5% of taxable business income.
Paid at 7% of the circulating tax actually paid, of which Dongguan Packing,
Urban maintenance and construction
Dongguan Konka, Dongguan Mould, Boluo Konka, Boluo Konka Precision,
tax
Xutongda and Kunshan Kangsheng of 5%.
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Category of taxes Specific situation of the taxes rate
Paid at 25% of the taxable income, of which Hong Kong Konka, Konka
Household Appliances Investment, Konka Household Appliances International
Trading of 16.5%, Wankaida, Telecommunication Technology, Precision Mould,
Enterprise income tax
Information Network, Chongqing Qingjia, Anhui Konka, Kunshan Konka,
Dongguan Konka, Dongguan Mould and Xutongda of 15%, USA Konka of 28%
and Europe Konka of 31%.
Education surtax Paid at 3% of the circulating tax actually paid.
Local education surtax Paid at 2% of the circulating tax actually paid.
(1) In accordance with the Notice on Printing the Administration Method on Charging and
Use of the Treatment Funds of Discarded Electronic Appliance and Electric Products issued
by the Ministry of Finance, Ministry of Environmental Protection, National Development
and Reform Commission, Ministry of Industry and Information, General Administration of
Customs and National Taxation Bureau (CZ [2012] No. 34), and the Administration Method
on Charging and Use of the Treatment Funds of Discarded Electronic Appliance and Electric
Products issued by National Taxation Bureau (GJSWZJGG [2012] No. 41), the domestic
manufacturer of the electrical appliances and electronic products of PRC started to pay the
treatment funds for discarded electrical appliance and electronic products according the sales
volume (trusted processing amount) and relevant charging standards from 1 Jul. 2012.
According to the regulations, the Group’s charging standards were RMB 13 per set of TV,
RMB 12 per set of refrigerator and RMB 7 per set of washing machine.
(2) According to regulations of Temporary Provisions of Income Tax of Trans-boundary Tax
Payment Enterprises by State Administration of Taxation, resident enterprises without
business establishment or places of legal persons should be tax payment enterprises with the
administrative measures of income tax of “unified computing, level-to-level administration,
local prepayment, liquidation summary, and finance transfer”. It came into force from
January 1, 2008. According to the above methods, the Company’s sales branch companies in
each area will hand in the corporate income taxes in advance from 1 Jan. 2008 and will be
final settled uniformly by the Company at the year-end.
(3) The Company’s subsidiary, Shenzhen Konka Communication Technology Co., Ltd, is
engaged in value-added services of brand costs. According to Notice of the Ministry of
Finance and the State Administration of Taxation on the Pilot Work of Levying Value-Added
Tax in Lieu of Business Tax in the Transportation Industry and Some Modern Service
Industries in Beijing and Other Seven Provinces and Cities (CS[2012] No.71), added-value
tax is levied from 1 Nov. 2012, with tax rate of 6%.
(4) As for the transportation revenue of the logistic business of the Company’s subsidiary
Shushida Logistics, in accordance with the Notice on Carrying out the Pilot of Change on
Charging the Business Taxes of Transportation Industry and Partial Modern Service Industry
to Value Added Taxes in Eight Provinces and Cities including Beijing issued by the Ministry
of Finance and the National Taxation Bureau (CS [2012] No. 71) and other regulations, it
was changed to charge the VAT since 1 Sept. 2012, with the tax rate of 3%. From 1 Jun. 2013,
Shushida Logistics received the general taxpayer qualification with the VAT rate of the
transportation revenue of 11% and the other service of 6%.
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2. Tax preference and approved document
(1) On 30 Sep. 2014, the subsidiary of the Company Shenzhen Konka Telecommunication
Technology Co., Ltd. acquired the certificate of high-technology enterprises jointly issued by
Shenzhen Science and technology Innovation Committee, Shenzhen Finance Committee,
Shenzhen Provincial Office, SAT, and Shenzhen Local Taxation Bureau, with the
certification number of GR201444201101 and the validity of three years. According to the
relevant taxation regulations, the Telecommunication Technology could enjoy the relevant
preferential tax policy on the high-tech enterprise for continuous 3 years from 2014 to 2016,
and pay for the corporate income tax according to 15% of the preferential tax rate.
(2) On 30 Sep. 2014, the subsidiary of the Company Konka Precision Mould Manufacture
Co., Ltd. acquired the certificate of high-technology enterprises jointly issued by Shenzhen
Science and technology Innovation Committee, Shenzhen Finance Committee, Shenzhen
Provincial Office, SAT, and Shenzhen Local Taxation Bureau, with the certification number
of GR201444201781 and the validity of three years. According to the relevant taxation
regulations, the Precision Mould could enjoy the relevant preferential tax policy on the
high-tech enterprise for continuous 3 years from 2014 to 2016, and pay for the corporate
income tax according to 15% of the preferential tax rate.
(3) On 22 Jul. 2013, the subsidiary of the Company Shenzhen Konka Information Network
Co., Ltd. acquired the certificate of high-technology enterprises jointly issued by Shenzhen
Science and technology Innovation Committee, Shenzhen Finance Committee, Shenzhen
Provincial Office, SAT, and Shenzhen Local Taxation Bureau, with the certification number
of GR201344200179 and the validity of three years. According to the relevant taxation
regulations, the Information Network could enjoy the relevant preferential tax policy on the
high-tech enterprise for continuous 3 years from 2013 to 2015, and pay for the corporate
income tax according to 15% of the preferential tax rate.
(4) The Company’s subsidiary—Chongqing Qingjia Electronics Co., Ltd. is levied the
business income tax at the preferential tariff of 15% from 1 Jan. 2011 to 31 Dec. 2020 in
accordance with CS (2011) No. 58 Notice on Relevant Tax Policies on Deeply Implementing
the western development strategy.
(5) On 14 Oct., 2013, the subsidiary of the Company, Anhui Konka, received the certificate
of high-technology enterprises (No.: GF2013342000298) awarded by Anhui Science and
Technology Department, Anhui Department of Finance, Anhui State Taxation Bureau and
Anhui Local Taxation Bureau. The period of validity is three years. According to taxation
rules, Anhui Konka would enjoy the preferential tax privileges of high-technology
enterprises from 2013 to 2015 and pay the enterprise income tax at the preferential rate of
15%.
(6) On 5 Aug. 2014, the subsidiary of the Company, Kunshan Konka Electronics Co., Ltd.
acquired the certificate of high-technology enterprises joint issued by Jiangsu Province
Science and Technology Department, Department of Finance of Jiangsu Province, Jiangsu
Province Municipal Office, SAT, and Jiangsu Local Taxation Bureau with the certification
number of GF201432000413 and the validity of three years. According to the relevant
taxation regulations, the Kunshan Konka could enjoy the relevant preferential tax policy on
the high-tech enterprise for continuous 3 years from 2014 to 2016, and pay for the corporate
income tax according to 15% of the preferential tax rate.
(7) On 10 Oct. 2014, the subsidiary of the Company, Dongguan Konka acquired the
certificate of high-technology enterprises joint issued by Guangdong Province Science and
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2015 Semi-annual Report of Konka Group Co., Ltd.
Technology Department, Department of Finance of Guangdong Province, Guangdong
Province Municipal Office, SAT, and Guangdong Local Taxation Bureau with the
certification number of GF201444001341 and the validity of three years. According to the
relevant taxation regulations, the Dongguan Konka could enjoy the relevant preferential tax
policy on the high-tech enterprise for continuous 3 years since 2014, and pay for the
corporate income tax according to 15% of the preferential tax rate.
(8) On 12 Sept. 2012, the Company’s subsidiary, Dongguan Konka Mould Plastic acquired
the certificate of high-technology enterprises joint issued by Guangdong Province Science
and Technology Department, Department of Finance of Guangdong Province, Guangdong
Province Municipal Office, SAT, and Guangdong Local Taxation Bureau with the
certification number of GF201244000053 and the validity of three years. According to the
relevant taxation regulations, the Kunshan Konka could enjoy the relevant preferential tax
policy on the high-tech enterprise for continuous 3 years from 2012 to 2014, and pay for the
corporate income tax according to 15% of the preferential tax rate. Dongguan Mould Plastic
had put forward the re-examination application within 3 months before the expiration of the
qualification period and according to the Taxation Bureau, the corporate income tax should
be repaid by 15% of the tax rate temporarily of the same year.
(9) On 26 Nov. 2012, the Company’s subsidiary, Xutongda acquired the certificate of
high-technology enterprises joint issued by Guangdong Province Science and Technology
Department, Department of Finance of Guangdong Province, Guangdong Province
Municipal Office, SAT, and Guangdong Local Taxation Bureau with the certification number
of GR201244000555 and the validity of three years. According to the relevant taxation
regulations, the Kunshan Konka could enjoy the relevant preferential tax policy on the
high-tech enterprise for continuous 3 years from 2012 to 2014, and pay for the corporate
income tax according to 15% of the preferential tax rate. Xutongda had put forward the
re-examination application within 3 months before the expiration of the qualification period
and according to the Taxation Bureau, the corporate income tax should be repaid by 15% of
the tax rate temporarily of the same year.
(10) On 30 Sep. 2014, the Company’s subsidiary, Shenzhen Wankaida Science and
Technology Co., Ltd. acquired the certificate of high-technology enterprises joint issued by
Shenzhen Science and technology Innovation Committee, Shenzhen Finance Committee,
Shenzhen Provincial Office, SAT, and Shenzhen Local Taxation Bureau with the certification
number of GR201444201523 and the validity of three years. According to the relevant
taxation regulations, the Anhui Tongchuang could enjoy the relevant preferential tax policy
on the high-tech enterprise for continuous 3 years from 2012 to 2014, and pay for the
corporate income tax according to 15% of the preferential tax rate.
(11) According to the CS No. [2011] 100 Article issued by Ministry of Finance and State
Administration of Taxation, if the ordinary VAT payer sells software products developed by
itself, the VAT is levied at the rate of 17% and after that, the part of actual tax burden of VAT
which exceeds 3% can enjoy the policy of refunding taxes immediately after levying taxes.
The subsidiaries of the Company, Shenzhen Konka Telecommunication Technology Co., Ltd.,
Shenzhen Konka Information Network Co., Ltd., Shenzhen Wankaida Science and
Technology Co., Ltd. and Shenzhen Konka Yishijie Commercial Display Co., Ltd. enjoy
such favorable policy.
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VIII. Notes on major items in consolidated financial statements of the Company
Unless otherwise noted, the following annotation project (including the main projects
annotation of the financial statement of the Company), the period-begin refers to 1 Jan. 2015,
the period-end refers to 30 Jun. 2015 and this period refers to Jan. – Jun. 2015 with the last
period of Jan. – Jun. 2014.
1. Monetary funds
Item Closing balance Opening balance
Cash on hand 193,395.85 5,118.98
Bank deposits 2,036,287,721.23 1,640,231,718.10
Other monetary funds 228,784,531.60 62,898,895.10
Total 2,265,265,648.68 1,703,135,732.18
of which: total amount deposited in overseas 329,171,417.16 149,716,988.11
Notes: The closing balance of other monetary funds was the deposits of each margin deposit
not withdrawn at any time.
2. Notes receivable
(1) Category of notes receivable
Item Closing balance Opening balance
Banker’s acceptance bill 3,230,958,057.77 3,785,443,076.37
Commercial acceptance bill 3,150,000.00 33,974,000.00
Total 3,234,108,057.77 3,819,417,076.37
(2) Notes receivable pledged by the Company at the period-end
Item Amount
Banker’s acceptance bill 1,561,200,609.03
Total 1,561,200,609.03
(3) Notes receivable which had endorsed by the Company or had discounted and had not due
on the balance sheet date at the period-end
Amount of recognition termination Amount of not terminated
Item
at the period-end recognition at the period-end
Banker’s acceptance bill 2,082,112,157.01 —
Total 2,082,112,157.01 —
Notes: Up to 30 Jun. 2015, the Company pledged the banker’s acceptance bill of the book
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2015 Semi-annual Report of Konka Group Co., Ltd.
value of RMB 1,561,200,609.03 for the comprehensive financing business such as handling
the billing, letter of credit and the trading financing.
3. Accounts receivable
(1) Accounts receivable disclosed by category
Closing balance
Book balance Bad debt provision
Category Withdrawal
Proportion Book value
Amount Amount proportion
(%)
(%)
Accounts receivable with significant
individual amount and make 96,468,109.12 3.86 10,760,574.72 11.15 85,707,534.40
independent provision for bad debt
Accounts receivable withdrawn bad debt
provision according to credit risks
characteristics
Group 1: aging group 2,374,449,981.91 95.08 256,056,289.52 10.78 2,118,393,692.39
Subtotal of groups 2,374,449,981.91 95.08 256,056,289.52 10.78 2,118,393,692.39
Accounts receivable with insignificant
single amount for which bad debt 26,327,312.83 1.06 24,559,138.11 93.28 1,768,174.72
provision separately accrued
Total 2,497,245,403.86 100.00 291,376,002.35 11.67 2,205,869,401.51
(Continued)
Opening balance
Book balance Bad debt provision
Category Withdrawal
Proportion Book value
Amount Amount proportion
(%)
(%)
Accounts receivable with significant
individual amount and make — — — — —
independent provision for bad debt
Accounts receivable withdrawn bad debt
provision according to credit risks
characteristics
Group 1: aging group 2,516,702,016.18 98.95 259,303,584.71 10.30 2,257,398,431.47
Subtotal of groups 2,516,702,016.18 98.95 259,303,584.71 10.30 2,257,398,431.47
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2015 Semi-annual Report of Konka Group Co., Ltd.
Opening balance
Book balance Bad debt provision
Category Withdrawal
Proportion Book value
Amount Amount proportion
(%)
(%)
Accounts receivable with insignificant
single amount for which bad debt 26,756,380.18 1.05 24,861,604.49 92.92 1,894,775.69
provision separately accrued
Total 2,543,458,396.36 100.00 284,165,189.20 11.17 2,259,293,207.16
① In the groups, accounts receivable adopting aging analysis method to accrue bad debt
provision at the year-end
Closing balance
Aging
Accounts receivable Bad debt provision Withdrawal proportion (%)
Within 1 year 2,052,444,568.33 41,285,518.71 2.01%
1 to 2 years 53,625,982.60 2,681,299.13 5.00%
2 to 3 years 64,156,647.90 12,831,329.58 20.00%
3 to 4 years 6,588,843.13 3,294,421.57 50.00%
4 to 5 years 3,340,438.84 1,670,219.42 50.00%
Over 5 years 194,293,501.11 194,293,501.11 100.00%
Total 2,374,449,981.91 256,056,289.52
② Accounts receivable with significant single amount for which bad debt provision
Accounts receivable (classified by units) Year end balance
Accounts receivable Bad debt provision Withdraw Withdraw reason
proportion
Had difficulty in
22,031,757.12 3,056,853.89 13.87%
Customer 1 operation
Involved with lawsuit
74,436,352.00 7,703,720.83 10.35%
Customer 2 dispute
Total 96,468,109.12 10,760,574.72 — —
③ Accounts receivable with insignificant single amount for which bad debt provision
Accounts receivable (classified by units) Year end balance
Accounts receivable Bad debt provision Withdraw Withdraw reason
proportion
Had difficulty in
16,818,083.44 16,818,083.44 100.00%
Customer 1 operation
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Involved with lawsuit
5,893,915.73 4,125,741.01 70.00%
Customer 2 dispute
Had difficulty in
1,223,622.25 1,223,622.25 100.00%
Customer 3 operation
Involved with lawsuit
1,473,948.45 1,473,948.45 100.00%
Customer 4 dispute
Had difficulty in
917,742.96 917,742.96 100.00%
Customer 5 operation
Total 26,327,312.83 24,559,138.11 — —
(2) Accounts receivable withdraw, reversed or collected of 2015
The withdrawn bad debt provision of 2015 was of RMB 15,436,953.24, the amount of the
bad debt provision reversed of 2015 was of RMB 8,163,567.96 and the amount of the
other decreased bad debt provision was of RMB 62,572.13
(3) Top 5 of the closing balance of the accounts receivable colleted according to the arrears
party at the year-end
The total amount of the Top 5 of the closing balance of the accounts receivable colleted
according to the arrears party at the year-end was of RMB 741,253,745.35 that covered the
proportion of 29.68% in the total amount of the accounts receivable at the year-end, and the
total amount of the corresponding withdrew bad debt provision was of RMB 14,825,074.91.
4. Prepayment
(1) List by aging analysis:
Closing balance Opening balance
Aging Book value Book value
Bad debt Bad debt
Proportion Proportio
Amount provision Amount provision
(%) n (%)
Within 1 year 468,164,771.78 96.82 984,768.80 312,558,414.85 96.34 863,929.20
1 to 2 years 5,678,078.22 1.17 372,286.54 5,069,017.23 1.56 1,952,958.31
2 to 3 years 3,087,903.41 0.64 2,086,581.91 735,503.34 0.23 396,003.34
Over 3 years 6,616,503.97 1.37 6,254,404.00 6,086,092.93 1.87 6,086,092.93
Total 483,547,257.38 100.00 9,698,041.25 324,449,028.35 100.00 9,298,983.78
Notes: prepayments of significant amount and aged more than 1 year were mainly the
prepayments of the purchase of the materials of RMB 4,632,126.10. Of which the amount of
RMB 4,154,625.44 was the relevant materials which had quality problems and had not
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2015 Semi-annual Report of Konka Group Co., Ltd.
handle the accounts settlement as well as the material warehousing formalities, and the
materials purchase account prepaid should be presented as the prepayments.
(2) Top 5 of the closing balance of the prepayment colleted according to the prepayment
target
The total amount of the Top 5 of the closing balance of the prepayment colleted according to
the prepayment target was of RMB 55,008,725.80, which was of 11.38% of the total amount
of the year-end balance of the prepayments.
5. Interest receivable
Item Closing balance Opening balance
Fixed term deposit interest 2,841,117.19 1,885,727.36
Entrusted loan interest 70,777.76 —
Total 2,911,894.95 1,885,727.36
6. Other accounts receivable
(1) Other accounts receivable disclosed by category
Closing balance
Book balance Bad debt provision
Category
Proportion Withdrawal Book value
Amount Amount
(%) proportion (%)
Other accounts receivable
with significant individual
amount and make 96,468,109.12 3.86 10,760,574.72 11.15 85,707,534.40
independent provision for bad
debt
Other accounts receivable
withdrawn bad debt provision
according to credit risks
characteristics
Group 1: aging group 2,374,449,981.91 95.08 256,056,289.52 10.78 2,118,393,692.39
Subtotal of groups 2,374,449,981.91 95.08 256,056,289.52 10.78 2,118,393,692.39
Other accounts receivable with
insignificant single amount for
which bad debt provision 26,327,312.83 1.06 24,559,138.11 93.28 1,768,174.72
separately accrued
Total 2,497,245,403.86 100.00 291,376,002.35 11.67 2,205,869,401.51
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2015 Semi-annual Report of Konka Group Co., Ltd.
(Continued)
Opening balance
Book balance Bad debt provision
Category
Proportion Withdrawal Book value
Amount Amount
(%) proportion (%)
Other accounts receivable with
significant individual amount and
— — — — —
make independent provision for
bad debt
Other accounts receivable
withdrawn bad debt provision
according to credit risks
characteristics
2,516,702,016.18 98.95 259,303,584.71 10.30 2,257,398,431.47
2,516,702,016.18 98.95 259,303,584.71 10.30 2,257,398,431.47
Other accounts receivable with
insignificant single amount for
which bad debt provision 26,756,380.18 1.05 24,861,604.49 92.92 1,894,775.69
separately accrued
Total 2,543,458,396.36 100.00 284,165,189.20 11.17 2,259,293,207.16
① In the groups, other accounts receivable adopting aging analysis method to accrue bad
debt provision at the period-end
Other accounts receivable (classified by Period end balance
units)
Other accounts Bad debt provision Withdraw Withdraw reason
receivable proportion
Assessment
Shenzhen Konka Video & Communication 18,115,952.51 5,058,104.93 27.92%
Systems Engineering Co., Ltd. impairment
Total 18,115,952.51 5,058,104.93 27.92%
②Other accounts receivable with insignificant single amount for which bad debt provision
Closing balance
Aging
Other accounts receivable Bad debt provision Withdraw proportion
Within 1 year 124,591,891.34 2,075,918.70 1.67%
1 to 2 years 83,319,699.60 4,165,984.98 5.00%
2 to 3 years 103,068,262.95 20,613,652.59 20.00%
3 to 4 years 2,983,005.90 1,491,502.95 50.00%
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2015 Semi-annual Report of Konka Group Co., Ltd.
Closing balance
Aging
Other accounts receivable Bad debt provision Withdraw proportion
4 to 5 years 1,162,364.20 581,182.10 50.00%
Over 5 years 14,240,518.66 14,240,518.66 100.00%
Total 329,365,742.65 43,168,759.98
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision of 2015 was of RMB 14,808,717.31, the
amountof the reversed bad debt provision was of RMB 181,960.43 and the amount of the
other decreased bad debt provision was of RMB 15.69.
(3) Top 5 of the closing balance of the other accounts receivable colleted according to the
arrears party
Proportion of the total Closing balance of
Name of units Nature Closing balance Aging period end balance of the bad debt provision
accounts receivable (%)
Subsidy Within 1 year, 1 to
payments of 152,402,680.00 2 years, 2 to 3 43.86 20,408,347.11
Customer 1 energy saving years
Customer 2 Export rebates 45,985,602.92 Within 1 year 13.23 —
Customer 3 Export rebates 3,293,340.36 Within 1 year 0.95 —
Customer 4 Margin 2,675,693.48 1 to 2 years 0.77 53,513.87
Customer 5 Margin 2,480,401.90 1 to 2 years 0.71 124,020.10
Total — 206,837,718.66 — 59.52 20,585,881.08
7. Inventory
(1) Category
Closing balance
Item Of which: the
Impairment of
Book balance capitalized amount of Book value
inventories
the borrowings
Development projects of
the property:
Development cost 460,209,261.87 708,392.08 — 460,209,261.87
Development products 152,322,883.37 2,209,218.60 — 152,322,883.37
Subtotal 612,532,145.24 2,917,610.68 — 612,532,145.24
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2015 Semi-annual Report of Konka Group Co., Ltd.
Closing balance
Item Of which: the
Impairment of
Book balance capitalized amount of Book value
inventories
the borrowings
Non-development
projects of the property:
Raw materials 1,337,323,305.38 — 328,538,622.63 1,008,784,682.75
Semi-finished product 295,369,075.62 — 167,124,682.21 128,244,393.41
Inventory goods 2,246,678,711.92 — 251,721,490.43 1,994,957,221.49
Turnover material 1,286,277.85 — — 1,286,277.85
Subtotal 3,880,657,370.77 — 747,384,795.27 3,133,272,575.50
Total 4,493,189,516.01 2,917,610.68 747,384,795.27 3,745,804,720.74
(Continued)
Opening balance
Of which: the
Item Impairment of
Book balance capitalized amount of Book value
inventories
the borrowings
Development projects of
the property:
Development cost 433,431,258.26 708,392.08 — 433,431,258.26
Development products 184,288,149.21 4,786,589.71 — 184,288,149.21
Subtotal 617,719,407.47 5,494,981.79 — 617,719,407.47
Non-development
projects of the property:
Raw materials 1,299,997,072.71 — 331,916,902.96 968,080,169.75
Semi-finished product 384,479,782.98 — 174,801,078.20 209,678,704.78
Inventory goods 2,347,967,769.03 — 239,864,738.09 2,108,103,030.94
Turnover material 854,937.39 — — 854,937.39
Subtotal 4,033,299,562.11 — 746,582,719.25 3,286,716,842.86
Total 4,651,018,969.58 5,494,981.79 746,582,719.25 3,904,436,250.33
(2) List of the development cost
123
2015 Semi-annual Report of Konka Group Co., Ltd.
Expected completion time
Name of the projects Starting time Opening balance Closing balance
of the next batch
Shuiyue Zhouzhuang Project Y2011 Completion by stages 433,431,258.26 459,374,652.87
Kangqiao Jiacheng Undetermined Undetermined — 834,609.00
Total 433,431,258.26 460,209,261.87
(3) List of the developed products
Completion
Name of the projects Opening balance Increased Decreased Closing balance
time
Shuiyue Zhouzhuang (Phase
I Residence) Y2014 184,288,149.21 — 31,965,265.84 152,322,883.37
Total 184,288,149.21 — 31,965,265.84 152,322,883.37
(4) Impairment of inventories
Increased amount Decreased amount
Item Opening balance Closing balance
Withdrawal Other Reverse Write-off
Raw
331,916,902.96 9,235,365.55 — 9,856,169.31 2,757,476.57 328,538,622.63
materials
Semi-finishe
174,801,078.20 839,307.46 — 3,829,830.40 4,685,873.05 167,124,682.21
d product
Inventory
239,864,738.09 23,700,492.32 — 7,271,104.77 4,572,635.21 251,721,490.43
goods
Total 746,582,719.25 33,775,165.33 — 20,957,104.48 12,015,984.83 747,384,795.27
(5) Withdrawal provision basis of the falling price of the inventory and the reasons of the
reserve or write-off
Reasons of writing off the
Specific basis of the withdrawal of the falling price
Item falling price provision of the
provision of inventory
inventory
The realizable net value was lower than the inventory Disposed in the current
Raw materials
cost period
The realizable net value was lower than the inventory Disposed in the current
Semi-finished product
cost period
Inventory goods The realizable net value was lower than the inventory Disposed in the current
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2015 Semi-annual Report of Konka Group Co., Ltd.
Reasons of writing off the
Specific basis of the withdrawal of the falling price
Item falling price provision of the
provision of inventory
inventory
cost period
The realizable net value was lower than the inventory Disposed in the current
Turnover materials
cost period
8. Other current assets
Item Closing balance Opening balance
Prepayments and deductible taxes 268,508,306.22 311,200,708.77
Entrust loans 50,000,000.00 50,000,000.00
Financial products 1,000,000.00 500,000.00
Unreached bank deposits — 206,319,491.71
Total 319,508,306.22 568,020,200.48
9. Available-for-sale financial assets
(1) Information of available-for-sale financial assets
Closing balance Opening balance
Item Depreciation Depreciation
Book balance Book value Book balance Book value
reserves reserves
Available-for-sale equity
308,503,378.07 2,693,406.87 305,809,971.20 247,799,748.07 2,766,139.07 245,033,609.00
instruments
Of which: measured by fair
2,405,378.07 608,406.87 1,796,971.20 2,311,748.07 681,139.07 1,630,609.00
value
Measured by cost 306,098,000.00 2,085,000.00 304,013,000.00 245,488,000.00 2,085,000.00 243,403,000.00
Total 308,503,378.07 2,693,406.87 305,809,971.20 247,799,748.07 2,766,139.07 245,033,609.00
(2) Available-for-sale financial assets measured by fair value at the period-end
Available-for-sale equity
Category of available-for-sale financial assets
instruments
Cost of the equity instruments 2,405,378.07
Fair value 1,796,971.20
Change amount of the fair value accumulatively included in the other
805,841.90
comprehensive income
Withdrawn impairment amount 608,406.87
(3) Available-for-sale financial assets measured by cost at the period-end
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2015 Semi-annual Report of Konka Group Co., Ltd.
Book balance
Investee Decre
Period -begin Increase Period -end
ase
Shenzhen Qianhai Qingsong Venture
Capital Fund Enterprise 6,000,000.00 6,000,000.00 — 12,000,000.00
Shenzhen Tianyilian Science &
Technology Co., Ltd. 4,800,000.00 — — 4,800,000.00
Shenzhen Yifan Interactive Science &
Technology Co., Ltd. 9,500,000.00 — — 9,500,000.00
Shenzhen A Dot TV Co., Ltd. 5,750,000.00 — — 5,750,000.00
Feihong Electronics Co., Ltd. 1,300,000.00 — — 1,300,000.00
ZAEFI 100,000.00 — — 100,000.00
Shenzhen Chuangce Investment
Development Co., Ltd. 485,000.00 — — 485,000.00
Shanlian Information Technology
Engineering Center 5,000,000.00 — — 5,000,000.00
Shenzhen CIU Science & Technology Co.,
Ltd. 1,153,000.00 — — 1,153,000.00
Shenzhen Digital TV National Engineering
Laboratory Co., Ltd. 6,000,000.00 — — 6,000,000.00
Shanghai National Engineering Research
Center of Digital TV Co., Ltd. 2,400,000.00 — — 2,400,000.00
ChinaAMC - Jiayi Overseas Orientation
Programs 203,000,000.00 — — 203,000,000.00
Hunan Vary Science & Technology Co.,
— 47,230,000.00 — 47,230,000.00
Ltd.
Nobel Education Investment Development
— 7,380,000.00 — 7,380,000.00
Co., Ltd.
Total 245,488,000.00 60,610,000.00 — 306,098,000.00
(Continued)
Book balance Shareholding
Cash bonus of
proportion
Investees Increa Decre the reporting
Period -begin Period -end among the
se ase period
investees (%)
Shenzhen Qianhai
Qingsong Venture — — — — 6.00 —
Capital Fund Enterprise
126
2015 Semi-annual Report of Konka Group Co., Ltd.
Shenzhen Tianyilian
Science & Technology — — — — 7.68 —
Co., Ltd.
Shenzhen Yifan
Interactive Science & — — — — 19.33 —
Technology Co., Ltd.
Shenzhen A Dot TV
Co., Ltd. — — — — 9.58 —
Feihong Electronics
Co., Ltd. 1,300,000.00 — — 1,300,000.00 8.33 —
ZAEFI 100,000.00 — — 100,000.00 — —
Shenzhen Chuangce
Investment 485,000.00 — — 485,000.00 1.00 —
Development Co., Ltd.
Shanlian Information
Technology — — — — 9.62 —
Engineering Center
Shenzhen CIU Science
& Technology Co., Ltd. 200,000.00 — — 200,000.00 11.50 —
Shenzhen Digital TV
National Engineering — — — — 6.00 —
Laboratory Co., Ltd.
Shanghai National
Engineering Research
Center of Digital TV — — — — 4.26 —
Co., Ltd.
ChinaAMC - Jiayi
Overseas Orientation — — — — — 2,153,880.21
Programs
Hunan Vary Science &
— — — — 10.04 —
Technology Co., Ltd.
Nobel Education
Investment — — — — 14.76 —
Development Co., Ltd.
Total 2,085,000.00 — — 2,085,000.00 — 2,153,880.21
(4) Changes of the impairment of the available-for-sale financial assets of the reporting
period
Available-for-sale equity
Category of available-for-sale financial assets
instruments
127
2015 Semi-annual Report of Konka Group Co., Ltd.
Withdrawn impairment balance at the period-begin 2,766,139.07
Withdrawal of the reporting period —
Of which: transferred from other comprehensive income —
Decrease of the reporting period 72,732.20
Of which: recovered or reversed from the fair value after the period 72,732.20
Withdrawn impairment balance at the period-end 2,693,406.87
10. Long-term equity investment
Increase/decrease
Reduc Adjustment of
Gains and losses
Investees Opening balance Additional ed other Changes of
recognized under
investment invest comprehensiv other equity
the equity method
ment e income
I. Associated
enterprises:
Shenzhen Refund
Optoelectronics Co., 43,425,481.67 — — 1,564,853.96 — —
Ltd.
Enraytek
2,473,680.
Optoelectronics Co., 110,793,944.21 — — -5,038,950.02 —
66
Ltd.
Shenzhen Konka Energy
3,649,728.08 — — — — —
Technology Co., Ltd.
Shanghai Konka Green
Science & Technology 197,758,604.87 — — -1,798,656.54 — —
Co., Ltd.
Shenzhen Dekang
7,137,424.83 — — — —
Electronics Co., Ltd.
Zhuhai Jinsu Plastic
— 6,210,000.00 — 116,347.78 — —
Co., Ltd.
2,473,680.
Total 362,765,183.66 6,210,000.00 — -5,156,404.82 —
66
(Continued)
Increase/ decrease Closing balance of
Investee entity Declaration of cash Withdraw bad debt Closing balance impairment
Other
dividend or profits provision provision
128
2015 Semi-annual Report of Konka Group Co., Ltd.
Associated enterprises:
Shenzhen Refund
Optoelectronics Co., 1,487,448.32 — — 43,502,887.31 —
Ltd.
Enraytek
Optoelectronics Co., — — — 108,228,674.85 —
Ltd.
Shenzhen Konka Energy
Technology Co., Ltd. — — — 3,649,728.08 —
Shanghai Konka Green
Science & Technology — — — 195,959,948.33 —
Co., Ltd.
Shenzhen Dekang
Electronics Co., Ltd. — — — 7,137,424.83 —
Zhuhai Jinsu Plastic
— — — 6,326,347.78 —
Co., Ltd.
Total 1,487,448.32 — — 364,805,011.18 —
11. Investment property
(1) Investment property calculated by cost
Houses and construction in
Item Land use right Total
buildings progress
I. Original book value
1. Opening balance 249,923,047.75 — — 249,923,047.75
2. Increased amount of the period — — — —
3. Decreased amount of the period — — — —
4. Closing balance 249,923,047.75 — — 249,923,047.75
II. The accumulative depreciation and
accumulative amortization
1. Opening balance 16,573,594.95 — — 16,573,594.95
2. Increased amount of the period 2,815,637.15 — — 2,815,637.15
(1) withdraw or amortization 2,815,637.15 — — 2,815,637.15
3. Decreased amount of the period — — — —
4. Closing balance 19,389,232.10 — — 19,389,232.10
III. Impairment provision
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2015 Semi-annual Report of Konka Group Co., Ltd.
Houses and construction in
Item Land use right Total
buildings progress
1. Opening balance — — — —
2. Increased amount of the period — — — —
3. Decreased amount of the period — — — —
4. Closing balance — — — —
IV. book value
1. Closing book value 230,533,815.65 — — 230,533,815.65
2. Opening book value 233,349,452.80 — — 233,349,452.80
(2) Amount and reason of the investment property failed to accomplish certification of
property
Item Book value Reason
R&D mansion 230,533,815.65 Under processing
12. Fixed assets
(1) List of fixed assets
Machinery Electronic Transportation
Item Houses and buildings Other Total
equipment equipment equipment
I. Original book value
1. Opening balance 1,666,832,339.28 1,025,362,549.65 252,641,100.35 74,244,036.50 214,920,840.16 3,234,000,865.94
2. Increased amount of the
10,842,538.20 19,773,855.93 9,251,172.29 2,367,502.55 7,818,858.18 50,053,927.15
period
(1) Purchase 3,437,909.80 16,899,072.96 9,251,172.29 2,367,502.55 6,985,653.01 38,941,310.61
(2) Transfer of project
7,404,628.40 2,874,782.97 — — 833,205.17 11,112,616.54
under construction
3. Decreased amount of
406,000.00 2,785,524.10 4,018,081.84 4,170,226.32 4,737,776.34 16,117,608.60
the period
(1) Disposal or Scrap 406,000.00 2,785,524.10 4,018,081.84 4,170,226.32 4,737,776.34 16,117,608.60
4. Closing balance 1,677,268,877.48 1,042,350,881.48 257,874,190.80 72,441,312.73 218,001,922.00 3,267,937,184.49
II. Accumulated
depreciation
1. Opening balance 401,426,983.75 590,925,364.93 201,361,698.85 52,503,060.71 140,779,033.03 1,386,996,141.27
2. Increased amount of the
18,867,945.47 29,064,593.42 7,730,493.37 3,506,444.41 10,052,034.41 69,221,511.08
period
130
2015 Semi-annual Report of Konka Group Co., Ltd.
Machinery Electronic Transportation
Item Houses and buildings Other Total
equipment equipment equipment
(1) Withdrawal 18,867,945.47 29,064,593.42 7,730,493.37 3,506,444.41 10,052,034.41 69,221,511.08
3. Decreased amount of
362,355.00 2,308,061.19 3,592,287.90 3,559,382.97 4,365,248.67 14,187,335.73
the end of period
(1) Disposal or Scrap 362,355.00 2,308,061.19 3,592,287.90 3,559,382.97 4,365,248.67 14,187,335.73
4. Closing balance 419,932,574.22 617,681,897.16 205,499,904.32 52,450,122.15 146,465,818.77 1,442,030,316.62
III. Impairment provision
1. Opening balance 53,124,316.45 6,198,654.13 1,628,053.45 899,230.59 1,458,921.13 63,309,175.75
2. Increased amount of the
— 1,686,990.03 883,949.90 9,190.00 46,896.25 2,627,026.18
period
(1) Withdrawal — 1,686,990.03 883,949.90 9,190.00 46,896.25 2,627,026.18
3. Decreased amount of
— — — — — —
the period
4. Closing balance 53,124,316.45 7,885,644.16 2,512,003.35 908,420.59 1,505,817.38 65,936,201.93
IV. book value -
1. Closing book value 1,204,211,986.81 416,783,340.16 49,862,283.13 19,082,769.99 70,030,285.85 1,759,970,665.94
2. Opening book value 1,212,281,039.08 428,238,530.59 49,651,348.05 20,841,745.20 72,682,886.00 1,783,695,548.92
Notes: As of 30 Jun. 2015, there was no fixed asset with restricted ownership in the
Company。
(2) List of temporarily idle fixed assets
Accumulative Impairment
Item Original book value Book value Notes
depreciation provision
Houses and
4,284,173.90 2,458,069.58 — 1,826,104.32
buildings
Mechanical
484,642.84 211,620.12 — 273,022.72
equipments
Vehicles — — — 0.00
Electronic
17,666,176.14 15,899,558.53 882,441.82 884,175.79
equipments
Other equipments 418,337.25 376,503.53 20,916.86 20,916.86
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2015 Semi-annual Report of Konka Group Co., Ltd.
Total 22,853,330.13 18,945,751.76 903,358.68 3,004,219.69
(3) Fixed assets leased in from financing lease
Accumulative
Item Original book value Impairment provision Book value
depreciation
Mechanical equipments 5,526,681.05 989,119.92 — 4,537,561.13
(4) Fixed assets leased out from operation lease
Item Closing book value
Houses and buildings 34,649,674.28
Total 34,649,674.28
(5) Details of fixed assets failed to accomplish certification of property
Item Book value Reason
R&D mansion 264,692,309.43 Under processing
Yikang building of Group Has not obtained the state-owned land uses card, can not
49,186,516.19
headquarter to deal with house property card
Kangsheng Aquatic Club 21,760,035.74 Under processing
Jingyuan office building 12,950,435.07 Certificate is under processing
Mudangjiang electric appliances Has not obtained the state-owned land uses card, can not
12,187,010.26
etc. to deal with house property card
Office building of Pang river street,
9,542,222.22 Under processing
Big East District, Shenyang
Chancheng District of Foshan 4,897,335.26 Under processing
Office building of Linxiu New
3,911,275.16 Under processing
Town, Urumchi
Office building of Changshu Konka Has not obtained the state-owned land uses card, can not
1,826,104.32
Color TV etc. to deal with house property card
13. Construction in progress
(1) List of construction in progress
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Kunshan hotel 64,365,430.88 — 64,365,430.88 55,896,269.73 — 55,896,269.73
Kunshan gallery 1,643,881.07 — 1,643,881.07 1,643,881.07 — 1,643,881.07
Kunshan Jielunte new
36,511,599.51 — 36,511,599.51 29,459,670.93 — 29,459,670.93
factory
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2015 Semi-annual Report of Konka Group Co., Ltd.
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Wuhan Jielunte factory
28,333,853.73 — 28,333,853.73 18,304,006.73 — 18,304,006.73
construction
Canteen project of the
Tongchuang Industrial 3,206,801.60 — 3,206,801.60 — — —
Park
Project to be installed 169,559.78 — 169,559.78 873,065.82 — 873,065.82
Other small projects 61,697,369.27 — 61,697,369.27 53,427,989.81 — 53,427,989.81
Total 195,928,495.84 — 195,928,495.84 159,604,884.09 — 159,604,884.09
(2) Changes of significant construction in progress
Amount that Other
Increased
transferred to decreased
Name o f item Estimated number Opening balance amount of the Closing balance
fixed assets of amount of
period
the period the period
Kunshan hotel 441,600,000.00 55,896,269.73 8,469,161.15 — — 64,365,430.88
Kunshan gallery 26,320,000.00 1,643,881.07 — — — 1,643,881.07
Kunshan Jielunte new
36,550,000.00 29,459,670.93 7,051,928.58 — — 36,511,599.51
factory
Wuhan Jielunte factory
40,000,000.00 18,304,006.73 10,029,847.00 — — 28,333,853.73
construction
Canteen project of the
Tongchuang Industrial 4,186,655.78 — 3,206,801.60 — — 3,206,801.60
Park
Project to be installed 3,075,000.00 873,065.82 358,974.36 1,062,480.40 — 169,559.78
6,709,905.
Other small projects — 53,427,989.81 25,029,421.29 10,050,136.14 61,697,369.27
69
6,709,905. 195,928,495.8
Total 551,731,655.78 159,604,884.09 54,146,133.98 11,112,616.54
69 4
(Continued)
Proportion of Accumulative Of which: amount
Rate of interest
Accumulative Progress of amount of of interest
Name o f item capitalization Capital resource
investment in works interest capitalization in
(%)
budget (%) capitalization reporting period
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2015 Semi-annual Report of Konka Group Co., Ltd.
Proportion of Accumulative Of which: amount
Rate of interest
Accumulative Progress of amount of of interest
Name o f item capitalization Capital resource
investment in works interest capitalization in
(%)
budget (%) capitalization reporting period
Financial
Kunshan hotel
institutions loans
14.58 34.00 810,165.16 — —
and self own
funds
Kunshan gallery 6.25 — — — — Self own funds
Financial
Kunshan Jielunte new
institutions loans
factory 98.00 98.00 1,181,842.26 579,583.49 6.72
and self own
funds
Wuhan Jielunte factory
70.83 70.83 — — — Self own funds
construction
Canteen project of the
Tongchuang Industrial 76.60 76.60 — — — Self own funds
Park
Project to be installed 11.67 11.67 — — — Self own funds
Notes: the other decrease of the construction in progress was the intangible assets transferred
from the software development of the Group.
14. Intangible assets
(1) Information
Trademark
Item Land use right Patent registration Other Total
expense
I. Original book value
1. Opening balance 366,197,934.11 40,139,739.88 3,519,159.61 30,062,433.23 439,919,266.83
2. Increased amount of
— 25,709.40 — 13,110,758.31 13,136,467.71
the period
(1) Purchase — 25,709.40 — 13,110,758.31 13,136,467.71
3 .Decrease in reporting
— — — — —
period
(1) Disposal — — — — —
(2) Other — — — — —
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2015 Semi-annual Report of Konka Group Co., Ltd.
Trademark
Item Land use right Patent registration Other Total
expense
4. Closing balance 366,197,934.11 40,165,449.28 3,519,159.61 43,173,191.54 453,055,734.54
II. Accumulated
amortization
1. Opening balance 40,380,243.37 32,123,987.40 3,364,176.89 13,523,645.98 89,392,053.64
2. Increased amount of
4,046,082.72 422,180.61 21,213.73 1,624,582.47 6,114,059.53
the period
(1) Withdrawal 4,046,082.72 422,180.61 21,213.73 1,624,582.47 6,114,059.53
3 .Decrease in reporting
— — — — —
period
(1) Disposal — — — — —
(2) Other — — — — —
4. Closing balance 44,426,326.09 32,546,168.01 3,385,390.62 15,148,228.45 95,506,113.17
III. impairment
provision
1. Opening balance — 2,901,082.61 — — 2,901,082.61
2. Increased amount of
— — — — —
the period
(1) Withdrawal — — — — —
3 .Decrease in reporting
— — — — —
period
(1) Disposal — — — — —
4. Closing balance — 2,901,082.61 — — 2,901,082.61
IV. Book value
1. Closing book value 321,771,608.02 4,718,198.66 133,768.99 28,024,963.09 354,648,538.76
2. Opening book value 325,817,690.74 5,114,669.87 154,982.72 16,538,787.25 347,626,130.58
(2) Details of fixed assets failed to accomplish certification of land use right
Item Book value Reason
Mudangjiang electric appliances 3,153,608.13 Left over by history
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2015 Semi-annual Report of Konka Group Co., Ltd.
Item Book value Reason
etc.
(3) Other notes:
The land use right of book value of intangible assets of the Company’s subsidiary Kunshan
Konka Electronic Co., Ltd. was RMB 79,197,475.64 which was pledged for long term loan
of RMB 63,876,957.13.
15. Goodwill
(1) Original book value of goodwill
Increase Decrease
Name of the investees or the Formed from
Opening balance Closing balance
events formed goodwill the business Other Dispose Other
combination
Anhui Konka 3,597,657.15 — — — — 3,597,657.15
Total 3,597,657.15 — — — — 3,597,657.15
(2) The method of impairment test and impairment provision, see note 19, IV.
(3) As of 30 Jun. 2015, there was no book value of goodwill higher than recoverable amount.
16. Long-term unamortized expenses
Amortization
Item Opening balance Increase Other decrease Closing balance
amount
Renovation costs 9,557,434.43 3,465,448.27 1,793,422.53 — 11,229,460.17
Advertising
10,280,675.07 24,240,688.71 6,596,617.24 261,027.80 27,663,718.74
expense
Other 5,954,695.56 8,017,880.51 2,223,032.87 5,516.40 11,744,026.80
Total 25,792,805.06 35,724,017.49 10,613,072.64 266,544.20 50,637,205.71
17. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income
difference assets difference tax assets
Assets impairment
705,989,350.84 174,445,450.49 680,584,889.73 168,852,965.21
provision
Unrealized profits 32,736,868.12 8,184,217.03 45,585,627.57 11,396,406.89
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2015 Semi-annual Report of Konka Group Co., Ltd.
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income
difference assets difference tax assets
internal transaction
Accrued expenses 80,640,095.89 20,068,125.82 92,847,148.47 23,119,888.96
Deferred income 92,848,868.87 22,174,573.22 91,852,218.96 21,845,806.74
Deductible losses 405,772,588.06 95,432,156.48 137,205,313.83 34,301,328.46
Total -44,500.00 -8,863.50 — —
(2) Deferred income tax liabilities had not been off-set
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
Accelerated
depreciation of 9,540,354.13 1,431,053.12 6,996,658.49 1,049,498.77
fixed assets
Payroll payable 23,840,114.88 5,960,028.72 — —
Total 33,380,469.01 7,391,081.84 6,996,658.49 1,049,498.77
(3) Deferred income tax assets or liabilities listed by net amount after off-set
Item Closing balance Opening balance
Deductible temporary difference 497,009,282.95 416,383,521.99
Deductible losses 567,662,571.04 525,234,499.08
Total 1,064,671,853.99 941,618,021.07
18. Other non-current assets
Item Closing balance Opening balance
Prepaid land funds — 488,063,979.00
Total — 488,063,979.00
19. List of the assets impairment provision
Decrease
Item Opening balance Withdrawal Closing balance
Reverse Write-off
I. Bad debt provision 327,064,296.70 30,679,723.63 8,380,357.75 62,754.07 349,300,908.51
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Item Opening balance Withdrawal Decrease Closing balance
II. Falling price
provision of the 746,582,719.25 33,775,165.33 20,957,104.48 12,015,984.83 747,384,795.27
inventory
II. Impairment
provision of the
available-for-sale 2,766,139.07 — 72,732.20 — 2,693,406.87
financial assets
IV. Impairment
provision of the fixed 63,309,175.75 2,627,026.18 — — 65,936,201.93
assets
V. Impairment
provision of the 2,901,082.61 — — — 2,901,082.61
intangible assets
Total 1,142,623,413.38 67,081,915.14 29,410,194.43 12,078,738.90 1,168,216,395.19
20. Short term loan
Item Closing balance Opening balance
Pledge loan 66,206,000.00 10,000,000.00
Mortgage
— —
Guaranteed loan
1,588,476,154.34 1,563,972,365.24
Credit loan 3,884,814,053.34 3,571,740,071.67
Total 5,539,496,207.68 5,145,712,436.91
Notes: The account receivable of book balance of Dongguan Mould Plastic of RMB
6,343,657.52 was pledged for a loan of RMB 5.07 million in 2015.
The company's order book balance is RMB 10,338,200.40 accounts
receivable as collateral obtained loans RMB 10,000,000.00 .
21. Notes payable
Category Closing balance Opening balance
Trade acceptance — 6,855,587.12
Bank acceptance bill 1,069,722,035.13 904,499,441.35
Total 1,069,722,035.13 911,355,028.47
Notes: RMB 1,069,722,035.13 will be due in next fiscal period.
22. Accounts payable
(1) List of accounts payable
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Item Closing balance Opening balance
Purchase amount 2,508,417,420.54 3,112,052,230.19
Of which: purchase of goods 1,488,331,968.56 1,960,053,333.31
Purchase of the fixed assets 591,376,251.32 447,212,376.57
Manufacturing consignment 404,241,071.48 660,894,770.74
Auxiliary material amount of the raw
23,086,896.54 42,213,874.59
materials
Project funds 1,381,232.64 1,677,874.98
Freight 197,581.40 169,230.00
Other 74,225,875.12 32,186,973.74
Total 2,582,840,877.06 3,144,408,433.93
(2) Notes of the accounts payable aging over one year
Name of creditor Amount Unpaid/carry-over reason
Interior decoration 15,911,043.38 Unsettled
Exterior components 5,038,769.40 Unsettled
Building projects 2,902,005.96 Unsettled
Installation project 1,499,564.98 Unsettled
Three major equipments 801,445.61 Unsettled
Exterior wall project 559,067.17 Unsettled
Survey and design expense 339,041.60 Unsettled
Total 27,050,938.10
23. Advance from customers
(1) List of advance from customers
Item Closing balance Opening balance
Within 1 year 379,157,521.64 275,288,665.86
1 to 2 years 9,269,842.38 11,520,332.44
2 to 3 years 5,506,594.29 1,574,348.73
Over 3 years 8,933,178.65 14,521,106.83
Total 402,867,136.96 302,904,453.86
(2) Significant advance from customers aging over one year was sale expense unsettled
24. Payroll payable
(1) List of Payroll payable
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Item Opening balance Increase Decrease Closing balance
I. Short-term salary 296,701,946.79 758,267,558.67 843,112,693.92 211,856,811.54
II. Post-employment
benefit-defined 2,562,794.26 69,434,462.31 68,880,549.62 3,116,706.95
contribution plans
III. Termination
7,974.00 2,920,473.92 2,895,473.92 32,974.00
benefits
IV. Other benefits due
— — — —
within one year
Total 299,272,715.05 830,622,494.90 914,888,717.46 215,006,492.49
(2) List of Short-term salary
Item Opening balance Increase Decrease Closing balance
1. Salary, bonus, allowance,
subsidy 288,171,641.38 669,740,080.46 764,174,297.24 193,737,424.60
2. Employee welfare 1,111,472.13 35,511,277.79 29,068,920.35 7,553,829.57
3. Social insurance 1,526,026.37 28,263,624.00 27,859,969.16 1,929,681.21
Including: Medical insurance
premiums 1,285,679.34 23,568,682.49 23,347,527.18 1,506,834.65
Work-related injury insurance 91,233.21 2,620,220.21 2,575,245.32 136,208.10
Maternity insurance 149,113.82 2,074,721.30 1,937,196.66 286,638.46
4. Housing fund 1,504,548.35 15,523,470.12 15,005,953.17 2,022,065.30
5. Labor union budget and
employee education budget 4,388,258.56 9,229,106.30 7,003,554.00 6,613,810.86
6.Short-term absence with payment — — — —
7. Short-term profit sharing plan — — — —
8. Other — — — —
Total 296,701,946.79 758,267,558.67 843,112,693.92 211,856,811.54
(3) List of defined contribution plans
Item Opening balance Increase Decrease Closing balance
1. Basic endowment
insurance 2,437,546.24 65,492,118.67 65,173,675.36 2,755,989.55
2. Unemployment insurance 125,248.02 3,940,807.59 3,705,338.21 360,717.40
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Item Opening balance Increase Decrease Closing balance
3.Enterprise annuity payment — 1,536.05 1,536.05 -
Total 2,562,794.26 69,434,462.31 68,880,549.62 3,116,706.95
The Company, in line with the requirement, participate the endowment insurance,
unemployment insurance scheme and so on, according to the scheme, the Company monthly
pay to the scheme in line with requirements of local government, except the monthly
payment, the Company no longer shoulder the further payment obligation, the relevant
expense occurred was recorded into current profits and losses or related assets costs.
25. Taxes payable
Item Closing balance Opening balance
VAT 21,490,744.58 24,559,393.58
Corporate income tax 2,230,849.62 42,937,116.01
Business tax 1,865,941.85 1,680,131.18
Urban maintenance and construction tax 1,316,749.19 801,349.04
Personal income tax 3,803,864.36 4,086,658.32
Education surtax 829,317.16 548,155.02
Flood control fund, fund for embankment, fund for
2,220,266.89
water conservancy and fund for river management 2,957,434.46
Fund for disposing abandoned appliances and
21,403,104.00
electronic products 17,251,061.00
Land value increment tax 20,303,337.68 14,320,831.81
Other 72,049,299.90 112,557,005.85
Total 21,490,744.58 24,559,393.58
26. Interest payable
Item Closing balance Opening balance
Loan interests 32,580,621.62 22,872,418.43
Total 32,580,621.62 22,872,418.43
27. Dividend payable
Item Closing balance Opening balance
Dividend of common shares 12,039,727.04 —
Total 12,039,727.04 —
28. Other accounts payable
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2015 Semi-annual Report of Konka Group Co., Ltd.
(1) Other accounts payable listed by nature of the account
Item Closing balance Opening balance
Accrued expenses 752,403,594.47 862,532,739.03
Guarantee 214,784,521.82 253,375,271.47
Turnover amount 130,157,295.95 100,800,186.16
Payment made on behalf 30,784,395.76 50,527,321.48
Other 133,705,899.99 109,567,862.89
Total 1,261,835,707.99 1,376,803,381.03
(2) Other significant accounts payable with aging over 1 year
Item Closing balance Unpaid/ Un-carry-over reason
Shanghai Shensy Logistics Co., Ltd. 3,800,000.00 Guarantee money
Shanghai Yongxin Color CRT Ltd. Co., Ltd. 2,075,485.15 Guarantee money
Ningbo Huacai Electric Appliance Co., Ltd. 3,591,041.94 Guarantee money of operation
Zhenhua Group (Kunshan) Construction
10,350,000.00 Guarantee money of project
Engineering Co., Ltd.
Nantong Xinhua Construction Group Co., Ltd. 5,000,000.00 Guarantee money of project
Total 24,816,527.09
29. Non-current liabilities due within 1 year
Item Closing balance Opening balance
Long-term payable due within 1 year (Notes 31, VI) 796,757.13 1,525,465.53
Total 796,757.13 1,525,465.53
30. Long-term loan
Item Closing balance Opening balance
Mortgage loan 63,876,957.13 51,976,957.13
Credit loan 614,234,305.73 905,564,253.39
Less: Long-term loan due within 1 year (Notes 29, VI) 678,111,262.86 957,541,210.52
Notes: the mortgage asset category and amount of mortgage loan see Notes 51.
31. Long-term payables
Item Closing balance Opening balance
Chuzhou Tongchuang Jianshe Investment Co., Ltd. 30,000,000.00 30,000,000.00
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Item Closing balance Opening balance
Accrued financial lease outlay 930,685.33 1,555,455.63
Less: due within 1 year (Notes 29, VI) 796,757.13 1,525,465.53
Total 30,133,928.20 30,029,990.10
32. Long term payroll payable
(1) List of long term payroll payable
Item Closing balance Opening balance
I. Termination benefits-net liabilities of defined
26,256,521.15 28,554,734.16
contribution plans
II. Dismission welfare — —
III. Other long term welfare — —
Total 26,256,521.15 28,554,734.16
(2) Changes of defined benefit plans
① Present worth of defined benefit plans obligation:
Item Reporting period Last period
I. Opening balance 28,554,734.16 —
II. Defined benefit cost recorded into current profits
— 28,554,734.16
and losses
1. Current service cost — 5,140,521.34
2. Previous service cost — 23,200,807.83
3. Settlement gains (loss “－”) — —
4. Net interest — 213,404.99
III． Other changes
1. Consideration of settlement of payment — —
2、Welfare had paid 2,298,213.01 —
III． Closing balance 26,256,521.15 28,554,734.16
② Explanations of contents and related risks of defined benefit plans, and influences to
future cash flow, time and uncertainties
Due to upgrading and reconstruction of current work sites of the subsidiary, communication
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2015 Semi-annual Report of Konka Group Co., Ltd.
technology, it is to adjust the labor relations according to Implementation Measures for
Accompanying Employees in manufacturing system of Shenzhen Konka Communication
Technology Co., Ltd on the premise to balance the Company’s and employees’ benefits and
voluntary selection, Communication Technology provides early retirement plans for senior
employees (employed before December 31, 1990 and signed non-fixed term labor contract
with the Company or Communication Technology). Content of the plans includes:
1. Until March 31, 2014, the internal retire employee in line with the time length to
mandatory age for retirement, which are classified as three classes, conducted relevant
standard of retirement pensions
2. Internal early retirement pensions include social insurance and housing provident funds
borne by individuals. The age is subject to that recorded in personnel archives.
3. Seniority subsidies for internal early retirement are classified as four classes in line with
the time length of working age, of which, working age is calculated on an annualized basis.
4. Voluntary early retirement should be applied by individuals and approved by the leaders of
Communication Technology and the Group. During the period of early retirement,
management of the employees is responsible by the Company.
The accumulative compensation paid to the internal early retirement pensions in future year
is RMB 34,931,714.55, the Company in line with Agreement of Internal Early Retirement
Pension, in line with the standard of salary remaining the same, turnover rate of 0, the
mortality rate of, fix standard of social security base payment remaining the same to test the
present worth of defined benefit plans. The actual payment for the employee is influence by
the actual turnover rate, death rate and the changes of minimum cardinality of social security.
③Notes to analysis results of major actuarial assumptions and sensibility of defined benefit
plans
Major assumptions estimated Closing period Closing period of last period
Discount rate Treasury bond rate in same period —
Death rate 0% —
Expected life expectancy Over legal emeritus age —
Expected compensation growth rate 0% —
33. Deferred income
Item Opening balance Increase Decrease Closing balance Formation reasons
Public subsidy 147,315,999.02 13,560,000.00 12,944,347.31 147,931,651.71 Amortization
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Total 147,315,999.02 13,560,000.00 12,944,347.31 147,931,651.71
Items involved in government subsidies:
Amount accrued
Amount of newly Related to the
Item Opening balance in non-business Other changes Closing balance
subsidy assets/ income
income
Industrialization project of
Related to the
large size liquid crystal 4,400,000.00 — 1,200,000.00 — 3,200,000.00
display module (LCM) assets
R&D and industrialization
Related to the
of integrated module of flat 1,725,000.00 — 450,000.00 — 1,275,000.00
TV set assets
R&D and industrialization
Related to the
of integrated DTMB 2,869,999.89 — 820,000.02 — 2,049,999.87
assets
Fund for flat panel display Related to the
6,499,999.94 — 1,000,000.02 — 5,499,999.92
industry in year 2008
assets
Key technology and
Related to the
industrialization of LED 4,750,000.01 — 499,999.98 — 4,250,000.03
Backlight of flat TV set assets
R&D of mating core chip
Related to the
based on the terminal of 5,620,000.00 — — — 5,620,000.00
AVS/DRA assets
R&D and industrialization
of new-type smart television
5,256,893.21 — — — 5,256,893.21 Related to the
with man-machine
interaction assets
R&D and industrialization
of new-type terminal
2,050,000.00 — 300,000.00 — 1,750,000.00 Related to the
application service system
of internet assets
Subsidies for supporting
Related to the
equipment of liquid crystal 17,550,000.00 — 1,755,000.00 — 15,795,000.00
module project assets
Funds for scientific and
technological innovation
3,000,000.00 — 260,869.56 — 2,739,130.44 Related to the
and special guidance of
achievements transfer assets
Special Fund of Strategic
Emerging Industry
Development of Dongguan 4,200,000.00 — 300,000.00 — 3,900,000.00
Related to the
Financial Bureau (High-End
New Electronic assets
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2015 Semi-annual Report of Konka Group Co., Ltd.
Information)
R&D and industrialization
Related to the
of large size liquid crystal 3,600,000.00 — 1,200,000.00 — 2,400,000.00
display module assets
Related to the
Infrastructure subsidy 11,550,000.00 — — — 11,550,000.00
assets
TV application oriented and
Related to the
embedded operating 2,470,000.00 — — — 2,470,000.00
system development assets
Supporting triple play smart
Related to the
TV and system support 2,000,000.00 — — — 2,000,000.00
platform assets
Supporting the next
generation Internet
8,508,737.85 — — 600,000.00 7,908,737.85 Related to the
intelligent terminal system
research projects assets
Smart TV industry chain of Related to the
12,800,000.00 — — — 12,800,000.00
Konka Group Co., Ltd.
assets
Research and development
Related to the
and industrialization of Dual 2,030,000.00 — — — 2,030,000.00
channel new 3 D smart TV assets
Digital home intelligent
Related to the
system with multiple screen 2,800,000.00 — — — 2,800,000.00
fusion assets
Industrialization
technological
transformation of large
2,259,541.37 — — — 2,259,541.37
precise multi-color injection
Related to the
mold based on green
Manufacturing assets
2010-2012 provincial
finance’s supporting
2,940,000.00 — 100,000.02 — 2,839,999.98 Related to the
matching fund for industrial
technology progress project assets
Machine module integration Related to the
2,775,000.00 — 150,000.00 — 2,625,000.00
subsidy
assets
Research instruments Related to the
2,068,933.33 — 210,400.02 — 1,858,533.31
subsidies
assets
Supporting the research and Related to the
2,600,000.00 — — — 2,600,000.00
development and
assets
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2015 Semi-annual Report of Konka Group Co., Ltd.
industrialization of synergy
internet-connected digital
products
Satellite receiving facilities
Related to the
of the chip based on the safe — 1,000,000.00 — — 1,000,000.00
and reliable ground assets
Konka next generation
multimedia terminal
— 5,000,000.00 — — 5,000,000.00 Related to the
technology engineering
laboratory project assets
Konka R&D building
Circular economy and
— 1,560,000.00 78,000.00 — 1,482,000.00 Related to the
energy-saving emission
reduction projects assets
Lean manufacturing
execution system
— 2,000,000.00 — — 2,000,000.00 Related to the
comprehensive integrated
innovation projects assets
Mobile intelligent terminal
Related to the
new application service — 4,000,000.00 — — 4,000,000.00
system assets
Related to the
Other 19,421,588.06 — 2,015,350.08 — 17,406,237.98
assets
Subtotal 135,745,693.66 13,560,000.00 10,339,619.70 600,000.00 138,366,073.96
Related to the
11,570,305.36 — 2,004,535.37 192.24 9,565,577.75
Other income
Subtotal 11,570,305.36 — 2,004,535.37 192.24 9,565,577.75
Total 147,315,999.02 13,560,000.00 12,344,155.07 600,192.24 147,931,651.71
34. Share capital
Increase/decrease (+/-)
Capitalization
Item Opening balance Issuing Bonus Closing balance
of public Other Subtotal
new shares shares
reserves
Total shares 1,203,972,704.00 — — — — — 1,203,972,704.00
35. Capital reserves
Item Opening balance Increase Decrease Closing balance
Capital premium (share capital
premium) — — 1,211,366,082.55
1,211,366,082.55
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2015 Semi-annual Report of Konka Group Co., Ltd.
Other capital reserves 78,037,481.44 2,473,680.66 — 80,511,162.10
Total 1,289,403,563.99 2,473,680.66 — 1,291,877,244.65
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36. Other comprehensive income
Reporting period
Less: Amount
transferred into
profit and loss in the
Item Opening balance current period that Closing balance
Amount incurred Less: income tax After-tax attribute to the After-tax attribute to
recognized into
before income tax expense parent company minority shareholder
other
comprehensive
income in prior
period
I. Other comprehensive
income can note be
— — — — — — —
reclassified into profits
and losses in future
II. Other comprehensive
income reclassify into — — — — — — —
profits and losses
Of which: other
comprehensive income as
per equity method — — — — — — —
recognized into profit and
loss in future
Profits or losses in fair
value of available for 516,457.28 117,232.20 — 27,046.55 90,185.65 — 606,642.93
sale assets
Converted amount of 15,655,020.63 1,042,317.66 — — 674,846.89 367,470.77 16,329,867.52
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2015 Semi-annual Report of Konka Group Co., Ltd.
Reporting period
Less: Amount
transferred into
profit and loss in the
Item Opening balance current period that Closing balance
Amount incurred Less: income tax After-tax attribute to the After-tax attribute to
recognized into
before income tax expense parent company minority shareholder
other
comprehensive
income in prior
period
foreign currency financial
statements
Total other
16,171,477.91 1,159,549.86 — 27,046.55 765,032.54 367,470.77 16,936,510.45
comprehensive income
Notes: Corresponding other comprehensive of opening balance, closing balance in relevant balance sheet. Closing balance + comprehensive
income AT attributable to the parent company = closing balance. Amount in reporting period and corresponding other comprehensive in income
statement, Amount before tax in reporting period-recorded into other comprehensive income in previous period transferred into current profits or
losses - income tax expense = other comprehensive income AT attributable to the parent company + other comprehensive income AT attributable
to minority shareholder.
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2015 Semi-annual Report of Konka Group Co., Ltd.
37. Surplus reserves
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserves 593,846,200.71 — — 593,846,200.71
Discretional surplus reserves 254,062,265.57 — — 254,062,265.57
Total 847,908,466.28 — — 847,908,466.28
Notes: Based on the regulations of the Corporation Law and Constitution, the Company
should withdraw 10% of the statutory surplus reserves according tot the net profits. If the
accumulated amount of the statutory surplus reserves exceeded the 50% of the registered
capital, the Company could no more withdraw.
The Company, after withdraw statutory surplus reserves, can withdraw discretional surplus
reserves, in line with the approval, the discretional surplus reserves can be used for making
up losses in previous year or increase share capital
38. Retained profits
Item 2015 2014
Opening balance of retained profits before adjustments 746,022,758.89 737,991,722.40
Total opening balance of retained profits before adjustments
— -32,552,764.33
(increase+, decrease -)
Opening balance of retained profits after adjustments 746,022,758.89 705,438,958.07
Add: Net profit attributable to owners of the Company -296,953,507.39 52,623,527.86
Less: Withdrawal of statutory surplus
— —
reserves
Withdrawal of discretional surplus reserves — —
Dividend of common stock payable 12,039,727.04 12,039,727.04
Dividend of common stock transfer into share capital — —
Closing retained profits 437,029,524.46 746,022,758.89
Notes: The company was held on May 28, 2015 2014 annual consideration by the General
Assembly, Scenarios are as follows:Based on the Company’s total share capital of
1,203,972,704 shares as at the end of 2014, the Company distributed a cash dividend of RMB
0.1 (tax included) to every 10 shares. The distributed profits aggregated RMB 12,039,727.04
and the retained profit was carried forward into the next year for distribution.
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2015 Semi-annual Report of Konka Group Co., Ltd.
39. Revenue and Cost of Sales
(1) Revenue, Cost of Sales
Reporting period Same period of last year
Item
Revenue Cost Revenue Cost
Main operation 8,246,299,638.18 7,161,672,404.62 8,282,878,605.00 6,948,228,513.04
Other operation 698,259,282.78 629,543,395.95 107,189,090.48 55,561,800.01
Total 8,944,558,920.96 7,791,215,800.57 8,390,067,695.48 7,003,790,313.05
(2) Main business (Classified by industry)
Reporting period Same period of last year
Industry
Revenue of sales Costs of sales Revenue of sales Costs of sales
Electronic industry 8,246,299,638.18 7,161,672,404.62 8,282,878,605.00 6,948,228,513.04
Total 8,246,299,638.18 7,161,672,404.62 8,282,878,605.00 6,948,228,513.04
(3) Main business (Classified by product)
Reporting period Same period of last year
Product
Revenue of sales Costs of sales Revenue of sales Costs of sales
Color TV business 5,839,273,101.30 4,998,980,729.53 6,169,494,584.43 5,078,493,060.56
Mobile phone
405,882,081.01 394,112,904.23 772,672,737.46 711,453,764.98
business
Consumer appliances
828,393,555.30 650,002,713.45 790,777,396.77 635,004,533.66
business
Other 1,172,750,900.57 1,118,576,057.41 549,933,886.34 523,277,153.84
Total 8,246,299,638.18 7,161,672,404.62 8,282,878,605.00 6,948,228,513.04
(4) Main business (Classified by area)
Reporting period Same period of last year
Area
Revenue of sales Costs of sales Revenue of sales Costs of sales
Domestic sales 4,807,213,043.19 3,897,064,692.75 5,918,248,976.50 4,769,500,437.16
Overseas sales 3,439,086,594.99 3,264,607,711.87 2,364,629,628.50 2,178,728,075.88
Total 8,246,299,638.18 7,161,672,404.62 8,282,878,605.00 6,948,228,513.04
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2015 Semi-annual Report of Konka Group Co., Ltd.
(5) The revenue of sales from the top five customers
Main business revenue Proportion of total business revenue
Period (%)
1,682,516,602.23 18.81
Jan-Jun. 2015
1,798,840,882.33 21.44
Jan-Jun. 2014
40. Business tax and surcharges
Item Reporting period Same period of last year
Business tax 5,496,133.92 4,042,401.68
Urban maintenance and construction tax 12,849,394.39 13,301,151.47
Education surtax 6,391,442.89 5,999,432.21
Local education surtax 3,641,622.06 3,710,591.73
Other 331,413.41 192,204.40
Total 28,710,006.67 27,245,781.49
Notes: the measurement standards of business tax and surcharges see Notes V. Tax
41. Sales expenses
Item Reporting period Same period of last year
Promotional activities 332,857,088.15 359,141,687.30
Warranty fee 174,049,619.44 142,074,650.38
Logistic Fee 168,134,586.26 141,945,921.72
Remuneration 155,114,369.05 151,749,324.64
Advertising 119,606,305.71 171,880,170.75
Social security charges 20,877,888.67 20,712,564.48
Business travel charges 18,327,672.91 23,423,793.92
Rental fees 14,363,429.92 22,047,847.15
Business entertainment expense 13,263,180.79 17,250,259.42
Exhibition fee 11,618,648.04 6,003,547.40
Other 96,476,161.41 99,638,593.69
Total 1,124,688,950.35 1,155,868,360.85
42．Administration expense
Item Reporting period Same period of last year
R & D expenses 104,617,216.07 104,169,480.26
Payroll 67,908,610.15 72,840,329.19
153
2015 Semi-annual Report of Konka Group Co., Ltd.
Item Reporting period Same period of last year
Depreciation expense 18,202,729.34 19,008,083.68
Taxes and fund 17,552,634.06 12,860,882.54
Social security charges 10,056,569.85 11,040,465.30
Business entertainment expense 8,726,615.59 10,104,937.16
Employees welfare cost 8,059,767.37 7,614,581.68
Consulting fees 5,633,366.65 3,781,502.23
Business travel charges 5,429,742.03 6,680,915.98
Labor union expenditure 4,966,713.86 5,643,131.66
Other 41,084,938.74 50,698,132.70
Total 292,238,903.71 304,442,442.38
43. Financial expenses
Item Reporting period Same period of last year
Interest expense 82,012,379.10 70,399,881.34
Less: Interest income 25,280,539.71 29,053,882.16
Gains or losses on exchange 39,133,044.16 58,538,407.94
Other 3,202,027.62 1,976,370.12
Total 99,066,911.17 101,860,777.24
44. Asset impairment loss
Item Reporting period Same period of last year
Bad debt loss 22,299,365.88 -2,061,447.86
Inventory falling price loss 12,818,060.85 37,500,606.06
Fixed assets impairment losses 2,627,026.18 164,794.58
Total 37,744,452.91 35,603,952.78
45. Investment income
Item Reporting period Same period of last year
Long-term equity investment measured by equity method -5,017,326.85 1,720,001.40
Investment income from the disposal of long-term equity investment — 262,454,090.34
Investment income from available for sale financial assets in holding
2,153,880.21 48,104.52
period
154
2015 Semi-annual Report of Konka Group Co., Ltd.
Item Reporting period Same period of last year
Income from trust management 10,048,900.77 2,217,922.37
Total 7,185,454.13 266,440,118.63
46. Non-operating gains
Recorded in the
amount of the
Item 2015 2014
non-recurring gains
and losses
Total gains from disposal of non-current assets 140,774.90 160,385.54 140,774.90
Including：Gains from disposal of fixed assets 140,774.90 160,385.54 140,774.90
Gains from disposal of intangible assets — — —
Government grants ( Details, see the statement below, lists
61,900,356.24 51,628,675.32 27,769,533.09
of government subsidies )
Income from compensation 3,598,283.81 — 3,598,283.81
Income from penalty 2,879,986.02 2,620,502.92 2,879,986.02
Other 903,762.58 3,805,904.24 903,762.58
Total 69,423,163.55 58,215,468.02 35,292,340.40
Government subsidies recorded into current profits and losses
Related to the
Item 2015 2014
assets/ income
Related to the
R&D subsidies 34,130,823.15 33,065,348.65
income
Enterprise financial incentives for The steady growth of Related to the
7,000,000.00 —
income
foreign trade of 2014
Related to the
R&D subsidy 1,983,350.08 3,692,856.61
assets
Related to the
Deferred income -other 1,824,475.37 864,748.02
income
Subsidies for supporting equipment of liquid crystal Related to the
1,755,000.00 1,755,000.00
assets
module project
Industrialization project of large size liquid crystal Related to the
1,200,000.00 1,200,000.00
assets
display module (LCM)
R&D and industrialization of large size liquid crystal Related to the
1,200,000.00 1,200,000.00
assets
display module
Fund for flat panel display industry in year 2008 1,000,000.02 1,000,000.02 Related to the
155
2015 Semi-annual Report of Konka Group Co., Ltd.
Related to the
Item 2015 2014
assets/ income
assets
Related to the
Special funds for Shenzhen brand cultivating 1,000,000.00 1,000,000.00
income
R&D and industrialization of integrated DTMB Related to the
820,000.02 820,000.02
assets
Key technology and industrialization of LED Backlight Related to the
499,999.98 —
assets
of flat TV set
R&D and industrialization of integrated module of flat Related to the
450,000.00 450,000.00
assets
TV set
R&D and industrialization of new-type terminal Related to the
300,000.00 300,000.00
assets
application service system of internet
Special Fund of Strategic Emerging Industry
Related to the
Development of Dongguan Financial Bureau (High-End 300,000.00 300,000.00
assets
New Electronic Information)
Funds for scientific and technological innovation and Related to the
260,869.56 —
special guidance of achievements transfer assets
Related to the
The L/C export subsidies 234,961.00 820,722.00
income
Related to the
Research instruments subsidies 210,400.02 —
assets
2010-2012 provincial finance’s supporting matching Related to the
210,000.00 210,000.00
fund for industrial technology progress project assets
New generation of intelligent multimedia mobile phone Related to the
180,060.00 1,800,000.00
income
industrialization
Related to the
Machine module integration subsidy 150,000.00 75,000.00
assets
Special funds for transformation and upgrade of Related to the
— 1,320,000.00
assets
provincial industry in 2010
Related to the
Other 7,190,417.04 1,755,000.00
income
Total 61,900,356.24 51,628,675.32
47. Non-operating expenses
156
2015 Semi-annual Report of Konka Group Co., Ltd.
The amount included in
Item Reporting period Same period of last year the current non-recurring
gains and losses
Total losses from disposal of non-current
assets 1,333,624.80 3,468,914.31 1,333,624.80
Including ： losses from disposal of fixed
assets 1,333,624.80 3,468,914.31 1,333,624.80
Losses from disposal of intangible
— — —
assets
Compensation expenses — — —
Penalty expenses 517,570.40 68,973.65 517,570.40
External donation expenses 36,000.00 118,001.24 36,000.00
Other 1,335,108.95 380,051.82 1,335,108.95
Total 3,222,304.15 4,035,941.02 3,222,304.15
48. Income tax expense
(1) Lists of income tax expense
Item Reporting period Same period of last year
Current income tax expense 3,363,107.56 36,939,098.76
Deferred income tax expense -54,464,726.76 -1,424,214.41
Total -51,101,619.20 35,514,884.35
(2) Adjustment process of accounting profit and income tax expense
Item Reporting period
Total profits -355,719,790.89
Current income tax expense accounted by tax and relevant regulations -88,929,947.72
Influence of different tax rate suitable to subsidiary 15,150,525.69
Influence of income tax before adjustment 1,224,003.30
Influence of non taxable income -503,724.74
Influence of non- deductable costs, expenses and losses -1,563,504.99
Influence of deductable losses of deferred income tax assets derecognized used —
157
2015 Semi-annual Report of Konka Group Co., Ltd.
in previous period
Influence of deductible temporary difference or deductible losses of deferred
27,516,303.23
income tax assets derecognized in reporting period.
Changes of the balance of deferred income tax assets/ liabilities in previous
—
period due to adjustment of tax rate
Other -3,995,273.97
Deferred income tax -51,101,619.20
49. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities
Item Reporting period Same period of last year
Current accounts and other 63,116,201.19 31,908,463.07
Interest income from bank deposits 50,806,977.96 69,459,760.96
Income from government subsidy 25,280,539.71 25,630,430.39
Indemnity income 17,710,940.97 27,554,760.14
Bargain money and deposit 7,399,974.01 8,071,360.46
Income from waste 4,012,389.68 5,802,642.86
Repayment of individual borrowing 3,677,654.89 —
Income from fine and penalty 2,879,986.02 509,158.87
Temporary received repair fund 585,764.95 4,333,841.05
Total 175,470,429.38 173,270,417.80
(2) Other cash paid relevant to operating activities
Item Reporting period Same period of last year
Expense for cash payment 460,136,035.36 464,713,053.27
Payment for pledges, guarantee and repair 54,634,052.75 17,680,792.70
Expense for bank handling charges 3,202,027.62 1,976,370.12
Employee reserve fund 15,101,732.17 17,293,013.87
Payment made on behalf 7,520,596.52 4,023,198.50
Donation expense 36,000.00 118,001.24
Other expense 41,859,725.05 67,346,157.60
158
2015 Semi-annual Report of Konka Group Co., Ltd.
Item Reporting period Same period of last year
Total 582,490,169.47 573,150,587.30
(3) Other cash received relevant to investment activities
Item Reporting period Same period of last year
Received financial product 1,300,500,000.00 200,000,000.00
Interest of land fund 488,063,979.00 —
Total 1,788,563,979.00 200,000,000.00
(4) Other cash paid relevant to investment activity
Item Reporting period Same period of last year
Purchase of financial product 1,301,000,000.00 600,000,000.00
Purchase of new share 5,784,590.00 —
Other 150,362.07 183,497.35
Total 1,306,934,952.07 600,183,497.35
(5) Other cash received relevant to financing activities
Item Reporting period Same period of last year
Note financing margin 118,095,176.56 —
Receipt and return of pledged RMB fixed deposits
— 236,460.60
upon maturity
Total 118,095,176.56 236,460.60
(6) Other cash paid relevant to financing activities
Item Reporting period Same period of last year
Financing margin deposit 132,986,357.83 176,578,387.43
Financing lease 875,603.76 877,722.00
Other — 615,051.58
Total 133,861,961.59 178,071,161.01
159
2015 Semi-annual Report of Konka Group Co., Ltd.
50. Supplemental information for Cash Flow Statement
(1) Supplemental information for Cash Flow Statement
Supplemental information Reporting period Same period of last year
1. Reconciliation of net profit to net cash flows generated
from operations：
Net profit -304,618,171.69 46,360,828.97
Add: Provision for assets impairments 37,744,452.91 35,603,952.78
Depreciation of fixed assets, oil-gas assets and productive
72,037,148.23 68,425,826.82
biological assets
Amortization of intangible assets 6,114,059.53 6,033,144.06
Amortization of long-term deferred expense 10,613,072.64 1,927,894.23
Losses/gains on disposal of property, intangible asset and
1,192,849.90 583,210.94
other long-term assets (gains: negative)
Loss on retirement of fixed assets (gains: negative) — 2,725,317.83
Losses/gains from variation of fair value (gains: negative) — —
Financial cost (income: negative) 99,380,910.41 101,976,435.69
Investment loss (gains: negative) 7,185,454.13 -266,440,118.63
Decrease in deferred tax assets (increase: negative) -60,779,263.28 -1,417,175.81
Increase in deferred tax liabilities (decrease: negative) 6,341,583.07 —
Decrease in inventory (increase: negative) 155,252,082.46 288,261,452.08
Decrease in accounts receivable from operating activities
706,029,496.58 1,234,076,728.44
(increase: negative)
Increase in accounts payable from operating activities
-666,450,765.26 -310,189,416.28
(decrease: negative)
Others — —
Net cash flows generated from operating activities 70,042,909.63 1,207,928,081.12
2. Investing and financing activities that do not involving
cash receipts and payment:
Liabilities transfer into capital — —
Company bonus convertible due within one year — —
Fix assets under financing lease — —
3. Net increase in cash and cash equivalents
Closing balance of cash 2,036,481,117.08 1,632,051,673.72
160
2015 Semi-annual Report of Konka Group Co., Ltd.
Supplemental information Reporting period Same period of last year
Less: Opening balance of cash 1,640,236,837.08 1,771,489,421.21
Add: Closing balance of cash equivalents — —
Less: Opening balance of cash equivalents — —
Net increase in cash and cash equivalents 396,244,280.00 -139,437,747.49
(2) Cash and cash equivalents
Item Reporting period Same period of last year
I. Cash 2,036,481,117.08 1,771,489,421.21
Of which: Cash on hand 193,395.85 18,884.53
Bank deposit on demand 2,036,287,721.23 1,771,470,536.68
II. Cash equivalents — —
Of which: Bond investment due within three months — —
III. Closing balance of cash and cash equivalents 2,036,481,117.08 1,771,489,421.21
51. The assets with the ownership or use right restricted
Item Closing book value Restricted reason
Subtotal of assets for guarantee 79,197,475.64
On 12 Aug. 2013 the Company’s subsidiary Kunshan
Kangsheng Investment Development Co., Ltd. signed Fixed
Assets Loan Contract with CCB, Kunshan Branch, which
agreed that the maximum loan of secure claims of the
Intangible assets 79,197,475.64 contract was RMB 150 million, mortgaged the land used right
of CKGY(2013 No. 1201211700. As of 30 Jun. 2015, the
aforesaid book value of land use right of RMB79, 197,475.64
(original book value RMB 88,201,364.97) was pledged for
obtaining long term loan of RMB 63,876,957.13.
Subtotal of assets with the ownership or
use right restricted form by other 1,859,532,420.12
reason:
Each margin deposit for security can not be withdrawn at any
Other monetary funds 228,784,531.60
time
As of 30 Jun. 2015, the Company pledged bank acceptance 本
of RMB 1,561,200,609.03 to handle comprehensive financing
Note payable 1,561,200,609.03
business such as bank acceptance, letter of credit, letter of
guarantee and trade financing, etc.
Account receivable 69,547,279.49 The Company’s controlling subsidiary Dongguan Konka
161
2015 Semi-annual Report of Konka Group Co., Ltd.
Item Closing book value Restricted reason
Mould Plastic Co., Ltd., on 19 Aug. 2014, signed Domestic
Factoring Contract (Contract No. (2014) 8800-103-036)
with recourse rights with CCB, Dongguan Branch, the book
value of account receivable of RMB 6,343,657.52 was
considered as repayment, obtained short term loan of RMB
5,070,000.00.
Total 1,938,729,895.76
52. Foreign currency monetary items
Closing foreign currency
Item Exchange rate Closing convert to RMB balance
balance
Monetary capital 373,705,956.89
Including: USD 59,503,307.86 6.11360 363,779,422.93
EUR 18,074.99 6.86990 124,173.37
HKD 10,177,076.92 0.78861 8,025,744.63
Canadian Dollar 6.96 4.92320 34.27
GBP 1.32 9.64220 12.73
IDR 3,862,106,443.89 0.00046 1,776,568.96
Account receivable 669,331,992.99
Including: USD 108,214,434.99 6.11360 661,579,769.75
HKD 4,397,500.18 0.78861 3,467,912.62
IDR 8,805,336,193.38 0.00046 4,050,454.65
AUD 49,764.00 4.69930 233,855.97
Other account
3,490,291.85
receivable
Including: USD 490,921.91 6.11360 3,001,300.19
EUR 38,083.40 6.86990 261,629.15
HKD 93,071.11 0.78861 73,396.81
IDR 334,708,034.00 0.00046 153,965.70
Account payable 308,703,148.22
Including: USD 41,632,641.35 6.11360 254,525,316.16
162
2015 Semi-annual Report of Konka Group Co., Ltd.
Closing foreign currency
Item Exchange rate Closing convert to RMB balance
balance
HKD 28,062,677.73 0.78861 22,130,508.28
IDR 53,547,264,737.98 0.00046 24,631,741.78
EUR 1,079,430.85 6.86990 7,415,582.00
Short term loan 4,013,765,474.89
Including: USD 596,961,903.61 6.11360 3,649,586,293.91
EUR 53,010,841.64 6.8699 364,179,180.98
Long term loan 592,835,792.00
Including: USD 96,970,000.00 6.11360 592,835,792.00
IX. Changes of merge scope
1. Business merger not under same control
Single disposal of investment to subsidiary that losing control
The differences enjoyed
of net assets share of the
Equity subsidiary in
The equity Method of Time of Recognition basis of
disposal corresponding
Name of subsidiary disposal equity losing the time of losing
proportion consolidated statements
price disposal control control
(%) between the disposal of
price and the disposal of
investment
Cancellation
Konka (Nanhai)
— 100.00 Cancel 2015-2-9 procedure was -491,110.76
Development Center
completed
(Continued)
Amount related to
Residual Book value Fair value of Profits or
Recognition method other comprehensive
equity of residual residual losses of
and main assumption income transfer into
proportion equity on equity on residual equity
Name of subsidiary of fair value of investment profits
on the date the date of the date of recalculated
residual equity on the or loss of original
of losing losing losing in line with
date of losing control subsidiary equity
control (%) control control fair value
investment
Konka (Nanhai)
— — — — — —
Development Center
163
2015 Semi-annual Report of Konka Group Co., Ltd.
2. Change of merger scope due to other reasons
(1) Shenzhen Konka Precision Mold Manufacturing Co., Ltd and Mansfield Technology
(Taiwan) Co., Ltd, our subsidiaries contributed capital jointly and founded Anhui Jiasen
Precision Technology Co., Ltd on December 22, 2014. Its registered capital was RMB 20
million, and it was paid in full amount by all the stockholders by September 30, 2015. In it,
Shenzhen Konka Precision Mold Manufacturing Co., Ltd subscribed to RMB1.02 million,
which occupied 51% of the registered capital by means of contribution in currency,
Mansfield Technology (Taiwan) Co., Ltd subscribed to RMB9.80 million, which occupied
49% of the registered capital by means of contribution in RMB. By the date of the balance
sheet, Shenzhen Konka Precision Mold Manufacturing Co., Ltd contributed RMB7.65
million, which occupied 38.25% of the registered capital, and Mansfield Technology (Taiwan)
Co., Ltd contributed RMB4.8998million, which occupied 24.50% of the registered capital.
The Company has right of control over it, and included it into its merger scope from January
1, 2015.
(2)The Company contributed capital with Shenzhen Kaikai Shijie Investment Partnership
Enterprise (limited partnership) jointly and founded Anhui Kakai Shijie E-Commerce Co.,
Ltd on December 29, 2014, with a registered capital of RMB20 million. In it, the Company
contributed RMB16 million, which occupied 80% of the registered capital. Shenzhen Kaikai
Shijie Investment Partnership Enterprise (limited partnership) contributed RMB 4.0 million,
which occupied 20% of the registered capital. The Company has right of control over it, and
included it into its merger scope from January 1, 2015.
(3) The Company contributed capital with Shenzhen Yizhonghui Technology Co., Ltd and
Shenzhen Yizhonghe Technology Co., Ltd jointly and founded Shenzhen Yipingfang
Network Technology Co., Ltd, with a registered capital of RMB20 million on January 9,
2015. In it, the Company contributed RMB19.20million, which occupied 96% of the
registered capital, the other stockholders contributed RMB800, 000, which occupied 4% of
the registered capital, but the capital had not been contributed by the date of the balance sheet.
The Company has right of control over it, and included it into its merger scope from January
9, 2015.
(4) The Company contributed capital with OCT Group jointly and founded Shenzhen
Kangqiaojiacheng Property Investment Co., Ltd, with a registered capital of RMB10 billion
on January 9, 2015, which will be paid in full amount by all the stockholders by December
31, 2019. In it, the Company subscribed to RMB700 million by means of contribution in
RMB, which occupied 70% of the registered capital, OCT Group contributed to RMB300
164
2015 Semi-annual Report of Konka Group Co., Ltd.
million by means of contribution in RMB, which occupied 30% of the registered capital. By
the date of the balance sheet, the Company contributed RMB112 million, which occupied
11.20% of the registered capital; OCT Group contributed RMB48 million, which occupied
4.8% of the registered capital. The Company has right of control over it, and included it into
its merger scope from January 19, 2015.
(5) Kangdian Investment Development Co., Ltd, a subsidiary of the Company, contributed
capital jointly with KK Orient Limited and founded Konka Smarttech Limited on January 21,
2015, with a registered capital of HK$10million. In it, Kangdian Investment Development
Co., Ltd contributed HK$6.10 million, which occupied 61% of the registered capital and
Konka Smarttech Limited contributed HK$3.90 million, which occupied 39% of the
registered capital. The Company has right of control over it, and included it into its merger
scope from January 21, 2015.
(6) Shenzhen Konka Yishijie Commercial Display Co., Ltd, a subsidiary of the Company
contributed capital and founded Shenzhen Konka Yishijie Commercial Display Service Co.,
Ltd, a wholly-funded subsidiary under it on May 7, 2015, with a registered capital of
RMB2.00 million. The Company has right of control over it, and included it into its merger
scope from May 7, 2015.
165
2015 Semi-annual Report of Konka Group Co., Ltd.
X. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
Proportion of shareholding
Name of the subsidiary Main operating place Registration place Nature of business Way of gaining
Directly Indirectly
Shenzhen Konka Telecommunications Technology Shenzhen,
Shenzhen, Guangdong Manufacture 75.00 25.00
Co., Ltd. Guangdong Set up or investment
Shenzhen Konka Precision Mould Manufacturing Shenzhen,
Shenzhen, Guangdong Manufacture — 46.31
Co., Ltd.① Guangdong Set up or investment
Shenzhen, Electrical
Shenzhen Konka Electronic Co., Ltd. Shenzhen, Guangdong 100.00 —
Guangdong Appliances Retail Set up or investment
Shenzhen,
Shenzhen Konka Information Network Co., Ltd. Shenzhen, Guangdong Manufacture 75.00 25.00
Guangdong Set up or investment
Shenzhen,
Shenzhen Konka Plastic Products Co., Ltd. Shenzhen, Guangdong Manufacture 49.00 51.00
Guangdong Set up or investment
Shenzhen,
Shenzhen Konka Life Electronic Co., Ltd. Shenzhen, Guangdong Manufacture 75.00 25.00
Guangdong Set up or investment
Shenzhen Konka Electronic Fittings Technology
Shenzhen, Guangdong Shenzhen, Investment holding 75.00 25.00
Co., Ltd. Set up or investment
166
2015 Semi-annual Report of Konka Group Co., Ltd.
Proportion of shareholding
Name of the subsidiary Main operating place Registration place Nature of business Way of gaining
Directly Indirectly
Guangdong
Mudanjiang,
Mudanjiang Arctic Ocean Appliances Co., Ltd. Mudanjiang, Heilongjiang Manufacture 60.00 —
Heilongjiang Set up or investment
Chongqing Konka Eurotomotive Electronic Co.,
Chongqing Chongqing Manufacture 57.00 —
Ltd. Set up or investment
Chongqing Konka Electronic Co., Ltd.② Chongqing Chongqing Manufacture — 40.00 Set up or investment
Anhui Konka Electronic Co., Ltd. Chuzhou, Anhui Chuzhou, Anhui Manufacture 78.00 — Set up or investment
Anhui Konka Appliance Co., Ltd. Chuzhou, Anhui Chuzhou, Anhui Manufacture — 100.00 Set up or investment
Changshu Konka Electronic Co., Ltd.
Changshu, Jiangsu Changshu, Jiangsu Manufacture — 60.00
Konka Electronic Co., Ltd. Set up or investment
Kunshan Konka Electronic Co., Ltd. Kunshan, Jiangsu Kunshan, Jiangsu Manufacture 100.00 — Set up or investment
Dongguan,
Dongguan Konka Electronic Co., Ltd. Dongguan, Guangdong Manufacture 75.00 25.00
Guangdong Set up or investment
Dongguan,
Dongguan Konka Packing Materials Co., Ltd. Dongguan, Guangdong Manufacture — 100.00
Guangdong Set up or investment
Dongguan,
Dongguan Konka Mould Plastic Co., Ltd. Dongguan, Guangdong Manufacture — 59.73
Guangdong Set up or investment
Boluo Konka PCB Co., Ltd. Boluo， Guangdong Boluo， Guangdong Manufacture — 51.00 Set up or investment
Boluo Konka Precision Technology Co., Ltd. Boluo, Guangdong Boluo, Guangdong Manufacture — 100.00 Set up or investment
Hong Kong Konka Co., Ltd. Hong Kong, China Hong Kong, China Hong Kong Konka 100.00 — Set up or investment
167
2015 Semi-annual Report of Konka Group Co., Ltd.
Proportion of shareholding
Name of the subsidiary Main operating place Registration place Nature of business Way of gaining
Directly Indirectly
Co., Ltd.
Konka Household
Appliances
Konka Household Appliances Investment &
Hong Kong, China Hong Kong, China Investment & — 100.00
Development Co., Ltd.
Development Co.,
Ltd. Set up or investment
Konka Household
Konka Household Appliances International Trading Appliances
Hong Kong, China Hong Kong, China — 100.00
Co., Ltd. International
Trading Co., Ltd. Set up or investment
KONKA AMERICA,INC. The USA The USA International trade 100.00 — Set up or investment
Frankfurt, Germany, Frankfurt, Germany,
Konka (Europe) Co., Ltd. International trade 100.00 —
Europe Europe Set up or investment
Dongguan
Dongguan Xutongda Mould Plastic Co., Ltd.③ Dongguan Guangdong Manufacture — 46.31
Guangdong Set up or investment
Shenzhen Konka Optoelectronic Technology Co., Guangdong Software
Guangdong Shenzhen 100.00 —
Ltd. Shenzhen development Set up or investment
Shenzhen Wankaida Science and Technology Co., Guangdong Software
Guangdong Shenzhen 100.00 —
Ltd.
Shenzhen development Set up or investment
Kunshan Kangsheng Investment Development Co.,
Kunshan Jiangsu Kunshan Jiangsu Real estate 100.00 —
Ltd. Set up or investment
Anhui Konka Tongchuang Household Appliances Chuzhou Anhui Chuzhou Anhui Manufacture 100.00 — Set up or investment
168
2015 Semi-annual Report of Konka Group Co., Ltd.
Proportion of shareholding
Name of the subsidiary Main operating place Registration place Nature of business Way of gaining
Directly Indirectly
Co., Ltd.④
Indonesia Konka Electronics Co., Ltd. Indonesia Indonesia International trade — 51.00 Set up or investment
Guangdong
Shenzhen Shushida Logistics Service Co., Ltd. Guangdong Shenzhen Logistics 100.00 —
Shenzhen Set up or investment
Sale of home
Beijing Konka Electronic Co., Ltd. Beijing Beijing 100.00 —
appliance Set up or investment
Kunshan Jielunte Mould Plastic Co., Ltd.⑤ Kunshan Jiangsu Kunshan Jiangsu Manufacture — 46.31 Set up or investment
Wuhan Jielunte Mould Plastic Co., Ltd.⑤ WuhanHubei WuhanHubei Manufacture — 46.31 Set up or investment
Chuzhou Jielunte Mould Plastic Co., Ltd.⑤ Chuzhou Anhui Chuzhou Anhui Manufacture — 46.31 Set up or investment
Guangdong
Shenzhen Konka E-display Co., Ltd. Guangdong Shenzhen Manufacture 60.00 —
Shenzhen Set up or investment
Guangdong
Shenzhen E-display Service Co., Ltd. Guangdong Shenzhen Manufacture 60.00
Shenzhen Set up or investment
Xiamen Dalong Trade Co., Ltd. Fujian Xiamen Fujian Xiamen Commerce — 69.23 Set up or investment
Tianjin Youshi Kangrong Cultural Communication
Tianjin Tianjin Other — 70.00
Co., Ltd. Set up or investment
Anhui Jiasen Precision Technology Co., Ltd Anhui Anhui Manufacture — 23.62 Set up or investment
169
2015 Semi-annual Report of Konka Group Co., Ltd.
Proportion of shareholding
Name of the subsidiary Main operating place Registration place Nature of business Way of gaining
Directly Indirectly
Shenzhen Kangqiaojiacheng Property Investment Guangdong
Guangdong Shenzhen Rea l estate 70.00 —
Co., Ltd Shenzhen Set up or investment
Konka Smarttech Limited Hong Kong, China Hong Kong, China Other — 61.00 Set up or investment
Anhui Kakai Shijie E-Commerce Co., Ltd Anhui Anhui E-commerce 80.00 — Set up or investment
Guangdong Information
Shenzhen Yipingfang Network Technology Co., Ltd Guangdong Shenzhen 96.00 —
Shenzhen service Set up or investment
170
2015 Semi-annual Report of Konka Group Co., Ltd.
Notes: ① The Company holds 46.31% of shares of Shenzhen Konka Precision Mold
Manufacturing Co., Ltd., Konka Household Appliances Investment & Development Co.,
Ltd, a subsidiary company of the Company, is entrusted to manage 6.18% shares held by
Shenzhen Dingshengxin Mould Technology Consultation Co., Ltd. After the entrustment,
the percentage of voting rights of the Company increases to 52.49%. Therefore, the
financial statements of Shenzhen Konka Precision Mold Manufacturing Co., Ltd. are
combined into the consolidated financial statements. Xutongda is a wholly funded
subsidiary of Dongguan Konka Mould Plastic Co., Ltd and is also combined into the
consolidated financial statements.
② The Company holds 40.00% shares of Chongqing Qingjia Electronic Co., Ltd. that all
senior managers of Chongqing Qingjia Electronic Co., Ltd. are appointed and dismissed by
the Company. Among the directors, half of them or over half are dispatched directly or
indirectly by the Company. Moreover, in Chongqing Qingjia, 70% to 80% of its
products are sold to the Company and thus the Company has absolute influence and control
over the production and operation of Chongqing Qingjia Electronic Co., Ltd., which is
combined into the consolidated financial statement.
③ Shenzhen Konka Precision Mold Manufacturing Co., Ltd. held 100% equity of
Dongguan Xutongda Mould Plastic Co., Ltd., and the Company is the actual controller of
Dongguan Xutongda Mould Plastic Co., Ltd., for the Company indirectly held 46.31%
shares and 52.49% voting right of Dongguan Xutongda Mould Plastic Co., Ltd., which is
combined into the consolidated financial statement.
④ Anhui Tongchuang is a limited company jointly invested and established by the
Company and Chuzhou Tongchuang Construction Investment Co., Ltd. (hereinafter refer to
as “Tongchuang Construction”) with registration capital of RMB 180 million, of which
each party invested in RMB 90 million respectively on contract. As to 31 Dec. 2010, Anhui
Tongchuang with a paid-up capital of RMB 120 million (including paid-up capital of RMB
90 million of the Company, 75.00% of total paid-up capital; and paid-up capital of RMB 30
million of Tongchuang Construction, 25.00% of total paid-up capital ). According to
contract sign by two parties, Tongchuang Construction has the rights of transferring stock
ownership three years after the establishment of Anhui Tongchuang Company. Meanwhile,
the Company can repurchase the said stock ownership and contracted with Tongchuang
Investment Company that the Company shall receive fixed investment gains at 2% of
actual capital invested by the Group annually. So the Company can conduct actual control
to Anhui Tongchuang Company, and combines it into the consolidated financial statement.
⑤ Precision Mould held 100% equity of Kunshan Jielunte, Wuhan Jielunte and Chuzhou
Jielunte and was actually controlled by the Company. The Company indirectly held 46.31%
equity of Jielunte and the 52.49% voting right of it, which is combined into the
consolidated financial statement.
171
2015 Semi-annual Report of Konka Group Co., Ltd.
(2) Significant not wholly owned subsidiary
Shareholding The profits and Declaring dividends
Balance of minority
proportion of losses arbitrate to distribute to
Name shareholder at
minority the minority minority
closing period
shareholder shareholders shareholder
Precision Mould 53.69 541,887.63 — 41,141,052.66
Anhui Konka 22.00 -3,554,554.48 — 54,916,044.48
Dongguan Konka Mould Plastic Co.,
Ltd. 40.27 -3,358,327.79 — 40,852,907.67
Dongguan Xutongda Mould Plastic Co.,
Ltd. 53.69 3,869,565.90 — 13,116,808.79
(3) The main financial information of significant not wholly owned subsidiary
Closing balance
Name Non-current
Current assets Non-current assets Total assets Current liabilities Total liability
liability
Shenzhen
Konka Precision
Mould —
63,252,508.15 177,844,217.80 241,096,725.95 161,239,670.19 161,239,670.19
Manufacturing
Co., Ltd.
Anhui Konka
1,056,404,598.05 242,410,754.00 1,298,815,352.05 1,022,333,767.36 6,813,287.87 1,029,147,055.23
Dongguan
Konka Mould
236,376,313.43 57,389,798.18 293,766,111.61 176,320,890.63 3,164,404.52 179,485,295.15
Plastic Co., Ltd.
Dongguan
Xutongda
Mould Plastic 74,140,483.20 8,556,458.23 82,696,941.43 52,999,867.82 262,469.02 53,262,336.84
Co., Ltd.
(Continued)
Opening balance
Name Non-current
Current assets Non-current assets Total assets Current liabilities Total liability
liability
Shenzhen
Konka
73,933,646.66 170,997,722.16 244,931,368.82 163,885,285.19 — 163,885,285.19
Precision
Mould
172
2015 Semi-annual Report of Konka Group Co., Ltd.
Name Opening balance
Manufacturing
Co., Ltd.
Anhui Konka 530,345,042.25 228,358,246.18 758,703,288.43 469,762,019.50 7,371,847.37 477,133,866.87
Dongguan
Konka Mould 246,221,614.74 55,571,226.68 301,792,841.42 176,470,898.07 2,819,541.37 179,290,439.44
Plastic Co., Ltd.
Dongguan
Xutongda
82,414,688.51 10,115,814.00 92,530,502.51 70,336,314.72 — 70,336,314.72
Mould Plastic
Co., Ltd.
Reporting period
Name Total comprehensive Cash flow of operating
Operating revenue Net profits
income activities
Shenzhen
Konka
Precision
56,309,090.66 -1,189,027.87 -1,189,027.87 7,603,783.89
Mould
Manufacturing
Co., Ltd.
Anhui Konka 2,428,514,346.89 -11,901,124.74 -11,901,124.74 58,973,435.78
Dongguan
Konka Mould
82,998,859.63 -8,221,585.52 -8,221,585.52 -10,955,909.12
Plastic Co.,
Ltd.
Dongguan
Xutongda
84,103,163.49 7,240,416.80 7,240,416.80 -9,999,721.53
Mould Plastic
Co., Ltd.
Same period of last year
Name Total comprehensive Cash flow of operating
Operating revenue Net profits
income activities
Shenzhen
Konka
Precision
Mould
Manufacturing 57,300,778.12 -1,260,788.91 -1,260,788.91 12,724,706.63
173
2015 Semi-annual Report of Konka Group Co., Ltd.
Name Same period of last year
Co., Ltd.
Anhui Konka 1,950,159,308.59 -10,849,659.81 -10,849,659.81 42,865,882.02
Dongguan
Konka Mould
Plastic Co.,
Ltd. 145,203,294.42 4,508,902.22 4,508,902.22 23,150,645.56
Dongguan
Xutongda
Mould Plastic
Co., Ltd. 80,172,167.88 5,374,021.36 5,374,021.36 -1,227,873.88
2. Equity in joint venture
(1) Significant joint venture
Proportion (%) Accounting
Main treatment of the
Registration
Name operating Business nature investment of joint
place
place Directly Indirectly
venture or
associated enterprise
Shenzhen Refond Manufacturing and
Shenzhen Shenzhen — 6.79 Equity method
Optoelectronics Co., Ltd. selling LEDs
Enray Tek Optoelectronic Manufacturing and
Shanghai Shanghai — 26.45 Equity method
(Shanghai) Co., Ltd. selling LEDs
Shanghai Konka Green
Manufacturing and
Science and Technology Shanghai Shanghai 39.00 — Equity method
selling LEDs
Co., Ltd.
174
2015 Semi-annual Report of Konka Group Co., Ltd.
(2) Main financial information of significant joint venture
Enray Tek Shanghai Konka Green
Item Enray Tek Optoelectronic Shanghai Konka Green Science
Optoelectronic Science and Technology
(Shanghai) Co., Ltd. and Technology Co., Ltd.
(Shanghai) Co., Ltd. Co., Ltd.
Current assets 341,730,366.36 475,063,721.57 268,409,318.7 476,703,490.64
Non-current assets 639,724,830.29 232,632,671.64 606,856,639.67 228,455,686.18
Total assets 981,455,196.65 707,696,393.21 875,265,958.44 705,159,176.82
Current liabilities 439,424,290.39 102,711,613.48 355,102,547.52 66,932,415.14
Non-current liabilities 247,268,850.06 95,504,437.10 232,930,605.06 119,562,409.62
Total liabilities 686,693,140.45 198,216,050.58 588,033,152.58 186,494,824.76
Minority interests 622.12 7,018,936.66 68.50 11,591,006.22
Equity attributable to
294,761,434.08 502,461,405.97 287,232,737.36 507,073,345.84
owners of the Company
Net assets proportion
77,971,539.01 195,959,948.33 80,536,808.37 197,758,604.87
calculated by
175
2015 Semi-annual Report of Konka Group Co., Ltd.
Enray Tek Shanghai Konka Green
Item Enray Tek Optoelectronic Shanghai Konka Green Science
Optoelectronic Science and Technology
(Shanghai) Co., Ltd. and Technology Co., Ltd.
(Shanghai) Co., Ltd. Co., Ltd.
shareholding ratio
Adjusting events
-Goodwill 30,257,135.84 — 30,257,135.84 —
-Retained profits of
— — — —
internal transaction
-Other — — — —
Book value of
investment to associated 108,228,674.85 195,959,948.33 110,793,944.21 197,758,604.87
enterprise
Fair value of equity
investment of associate
— — — —
enterprises with public
offer
Operating income 78,019,124.12 71,478,992.66 49,861,829.96 77,088,855.89
176
2015 Semi-annual Report of Konka Group Co., Ltd.
Enray Tek Shanghai Konka Green
Item Enray Tek Optoelectronic Shanghai Konka Green Science
Optoelectronic Science and Technology
(Shanghai) Co., Ltd. and Technology Co., Ltd.
(Shanghai) Co., Ltd. Co., Ltd.
Net profits -17,970,749.66 -7,998,708.70 -3,204,359.66 -7,819,659.41
Net profits of
— — — —
termination operation
Other comprehensive
— — — —
income
Total comprehensive
-17,970,749.66 -7,998,708.70 -3,204,359.66 -7,819,659.41
income
Equity received from
associated enterprises in — — — —
reporting period
177
2015 Semi-annual Report of Konka Group Co., Ltd.
XI. Risks related to financial instruments
Main financial instruments include monetary capital, accounts receivable and accounts
payable. Refer to Note XI for the details of all financial instruments. Risks related to
financial instruments and risk management policies to reduce risks are as follows. The
management should control and monitor the risk exposure to ensure all risks within defined
scope.
The Company uses sensitive analysis to analyze rationality of risk variables and possible
influences to current profits and losses or equity interests. Because risk variables are not
happened independently, correlation of variables to certain risk variable may affect the final
amount. Therefore, the following items are conducted under assumptions of each variable
changing independently.
(1) Risk management objectives and policies
Risk management objective of the Company is to balance the risks and profits, minimize the
negative effects to business performance and maximize the profits for stockholders and other
equity investors. On the basis of risk management objectives, basic strategies of risk
management are to determine and analyze all possible risks, establish appropriate risk
baseline, control and manage risks and monitor all risks timely and reliably within defined
scope.
1. Market risk
(1) Foreign exchange risk
Foreign exchange risk refers to the risks that may lead to losses due to fluctuation in
exchange rate. The foreign exchange risk borne by the Company is related to US dollars,
except the procurement and sales by US dollars for several subsidiaries. Until December 31,
2015 (refer to Note VI 51, foreign monetary items), foreign exchange risks may affect the
business performance produced by the assets and liabilities of the balance.
(2) Interest rate risk- cash flow change risk
Cash flow change risk caused by financial instruments due to interest rate change is related to
floating interest rate of bank loan. By establishing good relations with banks and reasonable
planning of credit line, credit varieties and credit period, it is to guarantee sufficient band line
of credit and satisfy all financial demands. Moreover, it is to reduce risks of interest rate
uncertainty by shortening single loan term and establishing repayment terms.
(3) Other price risks
178
2015 Semi-annual Report of Konka Group Co., Ltd.
For the equity investment of other listed companies holding by the Company, the
management considers that the market price risks are acceptable. Refer to Note VI, 9
Available-for-sale financial assets for equity investment of other listed companies holding by
the Company.
2. Credit risk
On 30 Jun. 2015, the biggest credit risk exposure may lead to the financial assets losses of
the Company was mainly from the one party fail to perform its obligation, which included:
book amount recognized in consolidated balance sheet: for financial instruments measured at
fair value, the book value reflect its risk exposure, but not the biggest one, the biggest risk
exposure will change along with the change of future fair value.
In order the reduce the credit risk, the Company establish a group response for recognizing
line of credit, conducting credit approval and other monitor procedures to ensure that the
necessary measures were used to recycle expired claims. In addition, the Company, on each
balance sheet date, reviews every single receivable recycling situation, to ensure that the
money unable to recycle withdraw fully provision for bad debt. Thus, the management of the
Company believed that the Company had greatly reduced the credit risk.
The Company’s working capital was deposit in bank with better risk management, thus the
risk of working capital was low.
3. Liquidity risk
When managing liquidity risk, the Company maintained the management’s believe that
supervising the sufficient cash and cash equivalents to meet the operating demand of the
Company and reduce the influence of the fluctuation of cash flow. The management of the
Company supervised the usage of bank loan and ensured complying with borrowing
agreement.
XII. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Closing fair value
Fair value Fair value
Fair value
Item measurement measurement
measurement Total
items at level items at level
items at level 1
2 3
I. Consistent fair value measurement
179
2015 Semi-annual Report of Konka Group Co., Ltd.
Closing fair value
Fair value Fair value
Fair value
Item measurement measurement
measurement Total
items at level items at level
items at level 1
2 3
(II) Available for sale financial assets
1. Debt instruments investment — — — —
2. Equity instrument investment 1,796,971.20 — — 1,796,971.20
3. Other — — — —
Total assets continue to calculated by fair value 1,796,971.20 — — 1,796,971.20
Total assets inconsistently calculated by fair
value — — — —
2. The basis for determining market price of continual and non-continual level-1 fair
value measurement items
By the end of the year, the Company held 117,310.00 shares of stock A of Vanke, and their
fair value at the end of the year was determined to be RMB1, 703, 341.20 according to
closing price of RMB14.52 for each share on June 30, 2015. It held 500 shares of stock of
Bobaolon, and their fair value at the end of the year was determined to be RMB20, 290.00
according to closing price of RMB40.58 for each share on June 30, 2015. It held 500 shares
of stock of Soling, and their fair value at the end of the year was determined to be RMB17,
005.00 according to closing price of RMB34.01 for each share on June 30, 2015. It held 500
shares of stock of Science Sun, and their fair value at the end of the year was determined to
be RMB33, 500.00 according to closing price of RMB67.01 for each share on June 30, 2015.
It held 500 shares of stock of Junesun Fungi, and their fair value at the end of the year was
determined to be RMB11, 325.00 according to closing price of RMB22.65 for each share on
June 30, 2015. It held 500 shares of stock of Puyang Huicheng, and their fair value at the end
of the year was determined to be RMB6, 575.00 according to closing price of RMB13.15 for
each share on June 30, 2015. It held 500 shares of stock of Kedi Dairy, and their fair value at
the end of the year was determined to be RMB4, 930.00 according to closing price of
RMB9.86 for each share on June 30, 2015.
XIII. Related party and related Transaction
1. Information of subsidiary of the Company
Details of information of subsidiary of the Company see note 1. Equity in subsidiary VIII
180
2015 Semi-annual Report of Konka Group Co., Ltd.
2. Information on the joint ventures of the Company
The details of significant joint venture of the Company see note 10. Long term equity
investment VI
3. Information on other related parties of the Company
Name Relationship
Shenzhen OCT East Co., Ltd. Under the same actual controller
Shanghai OCT Investment Development Co., Ltd. Under the same actual controller
Chengdu Tianfu OCT Industrial Development Co.,
Under the same actual controller
Ltd.
Shanghai Tianxiang OCT Investment Co., Ltd. Under the same actual controller
Anhui Huali Packaging Co., Ltd. Under the same actual controller
Shenzhen OCT Water and Power Co., Ltd Under the same actual controller
Shanghai OCT Investment Development Co., Ltd. Under the same actual controller
Shanghai Huali Packaging Co., Ltd Under the same actual controller
Shenzhen Huayou Packaging Co., Ltd Under the same actual controller
Shenzhen Huali Packing & Trading Co., Ltd Under the same actual controller
Huali Packaging (Huizhou)Co.,Ltd. Under the same actual controller
Huizhou Huali Packaging Co., Ltd. Under the same actual controller
Shenzhen Overseas Chinese Town Gas Station Co.,
Under the same actual controller
Ltd.
Shenzhen Konka Video & Communication Systems
Under the same actual controller
Engineering Co., Ltd.
Taizhou OCT Co., Ltd Under the same actual controller
Shenzhen OCT Real Estate Co., Ltd. Under the same actual controller
Shenzhen the Windows of the world Co., Ltd. Associated enterprise of the Company
Tianjin OCT Industry Co., Ltd. Under the same actual controller
Yunnan OCT Industry Co., Ltd. Under the same actual controller
Shenzhen OCT Hotel Co., Ltd. Under the same actual controller
Shenzhen Splendid China Development Co., Ltd Associated enterprise of the Company
181
2015 Semi-annual Report of Konka Group Co., Ltd.
Shenzhen OCT East Interlaken Hotel Under the same actual controller
Shenzhen OCT Property Management Co., Ltd. Under the same actual controller
4. List of related-party transactions
(1) Information on acquisition of goods and reception of labor service
Related-party Content 2015 2014
Shenzhen Refond Optoelectronics Co., Ltd. Purchase materials 47,882,999.94 51,323,181.02
Anhui Huali Packaging (Huizhou) Co., Ltd. Purchase materials 13,685,714.34 15,262,384.20
OCT Water & Electricity Company Water & Electricity 2,982,321.50 3,321,585.10
Huali Packaging (Huizhou)Co.,Ltd. Purchase materials 5,062,131.26 7,173,404.45
Shanghai Huali Packaging Co., Ltd Purchase materials 5,313,689.89 5,822,678.56
Zhuhai JinSu Plastic Co., Ltd. Purchase materials 456,923.11 —
OCT Hotel Group Purchase materials 155,425.55 164,714.48
Transactions of selling commodities and providing labor services
Related-party Content 2015 2014
Shanghai Konka Green Science and Selling LCDs, maintenance
— 11,087,208.54
Technology Co., Ltd. cost
Masahide Media Ltd Advertising 18,868,462.33 —
Shenzhen Refond Optoelectronics Co., Ltd Selling materials 10,381,121.06 7,538,825.26
Shenzhen OCT East Co., Ltd Repair processing fee income — 371,794.87
Shanghai Tianxiang OCT investment Co.,
Selling LCDs — 10,683.76
Ltd.
Yunnan OCT Co., Ltd Selling LCDs — 12,820.51
Shanghai Konka Green Science and Selling LCDs, maintenance
374,606.74 —
Technology Co., Ltd. cost
(2) Related trusteeship/contract
Guarantee
Actual using Execution
curren amount (Ten curren
Secured party amount (Ten Start date End date accomplished or
cy Thousand
cy not
Yuan) Thousand Yuan)
RMB 4,950.00 2015-1-30 2016-1-29 No
Anhui Konka
Tongchuang Household RMB 30,000.00 RMB 2,000.00 2015-6-2 2016-6-1 No
Appliances Co., Ltd.
RMB — 2014-11-18 2015-11-17 No
182
2015 Semi-annual Report of Konka Group Co., Ltd.
Kunshan Konka RMB
RMB 30,000.00 5,214.15 2014-12-26 2015-12-26 No
Electronic Co., Ltd.
RMB 7,761.57 2014-12-26 2015-12-26 No
RMB 610.79 2015-3-12 2016-3-12 No
Anhui Konka Electronic
RMB RMB 1,997.67 2015-4-10 2016-4-10
Co., Ltd. 20,000.00 No
RMB 3,537.20 2015-5-14 2016-5-14 No
RMB 4,259.39 2015-5-19 2016-5-19 No
Shenzhen Konka
No
Yishijie Commercial RMB 4,800.00 RMB 298.91 2015-1-27 2016-1-27
Display Co., Ltd.
Shenzhen Konka
No
Telecommunications RMB 50,000.00 RMB 8,351.29 2015-4-22 2016-4-21
Technology Co., Ltd.
Shenzhen Konka
No
Telecommunications RMB 10,000.00 RMB — 2015-1-28 2016-1-28
Technology Co., Ltd.
Hong Kong Konka Co.,
RMB 14,800.00 RMB 14,800.00 2015-4-1 2015-12-15 No
Ltd.
Hong Kong Konka Co.,
USD 4,000.00 USD 4,000.00 2015-6-26 2016-6-26 No
Ltd.
Hong Kong Konka Co.,
USD 2,470.00 USD 2,470.00 2015-3-23 2016-3-23 No
Ltd.
Hong Kong Konka Co.,
USD 2,530.00 USD 2,530.00 2015-5-29 2016-5-29 No
Ltd.
Hong Kong Konka Co.,
USD 1,000.00 USD 1,000.00 2014-10-10 2015-10-9 No
Ltd.
Hong Kong Konka Co.,
RMB 7,800.00 USD 1,215.00 2014-11-12 2015-11-10 No
Ltd.
Hong Kong Konka Co.,
USD 3,000.00 USD 3,000.00 2014-11-17 2015-12-17 No
Ltd.
Hong Kong Konka Co.,
USD 4,500.00 USD 4,500.00 2014-11-20 2015-12-18 No
Ltd.
Hong Kong Konka Co.,
USD 5,000.00 USD 4,850.00 2014-1-15 2016-2-14 No
Ltd.
Hong Kong Konka Co.,
USD 6,910.00 USD 6,700.00 2014-7-28 2016-8-27 No
Ltd.
Dongguan Konka Mould
RMB 3,000.00 RMB 2,140.00 2013-9-29 2016-9-29 No
Plastic Co., Ltd.
Kunshan Geraint Mould RMB 10,000.00 RMB 2,925.65 2015-1-21 2015-12-18 No
183
2015 Semi-annual Report of Konka Group Co., Ltd.
Plastic Co., Ltd.
Note: Anhui construction of chuzhou city, Co., Ltd. a minority shareholder of Anhui Konka
Tongchuang Household Appliances Co., Ltd. for the amount of guarantees provided 50%
counter-guarantee.
②, minority shareholders of Anhui Konka Electronic Co., Ltd. provide guarantees of the
company's line of 22% the counter guarantee.
③ subsidiary Shenzhen subsidiary Kunshan jielunte precision provided amount to RMB 30
million Yuan fixed assets loan guarantee.
④ subsidiary Shenzhen precision to provide subsidiary Dongguan mold amount security of
RMB 100 million for issuing notes, loan.
(3) Rewards for the key management personnel
Item 2015 2014
Rewards for the key management personnel 5.1135 million 8.0290 million
5. Receivables and payables of related parties
(1) Receivables
Closing balance Opening balance
Item Bad debt Bad debt
Book balance Book balance
provision provision
Account receivable:
Shanghai Konka Green Lighting
11,037,967.18 278,103.84 10,963,653.88 219,273.08
Technology Co.,Ltd.
Shanghai Konka Green Lighting
131,099.44 2,621.99 — —
Technology Co.,Ltd.
Shenzhen Refond Optoelectronics Co., Ltd 8,775,156.27 175,503.13 7,478,269.37 149,565.39
Shenzhen Konka Video & Communication
— — 1,260,956.45 25,219.13
Systems Engineering Co., Ltd.
Total 19,944,222.89 456,228.96 19,702,879.70 394,057.60
Other account receivable:
Shenzhen Konka Video & Communication
18,115,952.51 5,058,104.93 18,115,952.51 5,405,926.42
Systems Engineering Co., Ltd.
Shenzhen Overseas Chinese Town Gas
80,000.00 80,000.00 80,000.00 80,000.00
Station Co., Ltd.
184
2015 Semi-annual Report of Konka Group Co., Ltd.
Closing balance Opening balance
Item Bad debt Bad debt
Book balance Book balance
provision provision
Shenzhen OCT Real Estate Co., Ltd. 1,209,064.86 1,209,064.86 1,209,064.86 1,209,064.86
Shenzhen OCT Property Management Co.,
77,402.65 77,402.65 77,402.65 77,402.65
Ltd.
Shenzhen OCT Water and Power Co., Ltd. 763,410.76 15,268.22 776,572.25 15,531.45
Total 20,245,830.78 6,439,840.66 20,258,992.27 6,787,925.38
(2) Account payables
Item Closing balance Opening balance
Account payable
Shenzhen Refond Optoelectronics Co., Ltd 750,302.22 17,648,415.04
Anhui Huali Packaging Co., Ltd. 4,205,725.70 9,801,227.07
Shenzhen Huali Packing and Trading Co., Ltd. 1,078,005.09 1,078,005.09
Shanghai Huali Packing Co., Ltd. 1,402,269.39 1,782,812.82
Shenzhen Dekon Electronics Co.,Ltd. 358,929.03 358,929.03
Huali Packaging (Huizhou) Co., Ltd. 1,141,905.38 1,050,557.07
Shenzhen Konka Video & Communication Systems
1,525,624.20 —
Engineering Co., Ltd.
Total 10,462,761.01 31,719,946.12
Note payable：
Anhui Huali Packaging Co., Ltd. 3,028,381.67 1,605,902.13
Huali Packaging (Huizhou) Co., Ltd. 1,334,828.63 5,143,401.86
Shenzhen Refond Optoelectronics Co., Ltd 2,221,119.77 12,339,062.14
Zhuhai JinSu Plastic Co., Ltd. 1,169,600.00 —
Total 7,753,930.07 19,088,366.13
Receivable in advance
Masahide Media Ltd 32,637,408.00 —
Shenzhen the Windows of the world Co., Ltd — 81,000.00
Total 32,637,408.00 81,000.00
Other account payable:
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2015 Semi-annual Report of Konka Group Co., Ltd.
Item Closing balance Opening balance
Huali Packaging (Huizhou) Co., Ltd. 1,130,000.00 1,130,000.00
Shanghai Huali Packing Co., Ltd. 1,530,000.00 1,530,000.00
Huali Packaging (Huizhou) Co., Ltd. 428,000.00 428,000.00
Shenzhen Refond Optoelectronics Co., Ltd 51,135.00 51,135.00
Total 3,139,135.00 3,139,135.00
XIV. Commitments
1. Significant commitments
(1) Capital commitment
Item Closing balance Opening balance
Commitments signed but has not been recognized in
financial statements
- Purchase of long term capital commitment — —
- Contract with large amount 93,536,361.57 150,424,982.66
- Foreign investment commitments — —
Total 93,536,361.57 150,424,982.66
(2) Operating lease commitments
As of the end of balance sheet date, the irrevocable operating lease commitments that the
Company signed were as followed:
Item Closing balance Opening balance
Minimum lease payments of irrevocable operating lease
1 year after balance date 22,008,951.96 23,767,119.89
2 year after balance date 13,369,023.53 11,062,103.32
3 year after balance date 12,024,300.37 8,442,535.17
Future years 3,874,680.65 6,735,380.75
Total 51,276,956.51 50,007,139.13
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2015 Semi-annual Report of Konka Group Co., Ltd.
2. Contingency
1. Contingent liabilities and its financial effect arising from unsettled litigation or
arbitration
1. Contingent liabilities and financial effects caused by pending litigation or arbitration
On 4 Feb. 2013, the Company’s subsidiary Kunshan Konka signed Purchase Order
(Hereinafter referred to as "PO") with Italy customer MOTOM ELECTRONICS GROUP
SPA (Hereinafter referred to as the "MEG"). The PO payment was 90 days L/C, L/C amount
was $1.29744 million. MEG opened L/C which Kunshan Konka was beneficiary on 26 Feb,
due to the problems of delivery time and related items, after the agreement of both parties,
MEG respectively opened two revisions of L/C on 11 Mar. and 13 May. Then the Kunshan
Konka entrusted Ningbo United International Freight Forwarding Co., Ltd. (Hereinafter
referred to as the “Ningbo United”) to book space, and Ningbo United signed and issued the
carrier's bill of lading of Econolines Ltd. (Hereinafter referred to as the “Econolines” (No.
NGB1305005\GNB1305016\NGB1305034) The whole case handover with Container
delivery conditions of CY TO CY) on 5, 14 and 19 May 2013. According to the verification,
after the goods arrived to the port of destination in Italy, the empty cargo container had
returned to the shipping company, but the full set of original bill of lading was still in
Kunshan Konka; Ningbo United and Econolines’s behaviors of delivery of goods without
original bill of lading had violated the "maritime law" and other relevant laws and regulations,
Kunshan Konka had right to require Econolines return the goods. The total amount of the
goods was $ 1,214,780.04, equivalents RMB 7,507,340.65, MEG received the goods but not
pay the full amount of the goods to Kunshan Konka, the amount in arrear reached
$1,100,000.00.
Which caused large loss to Kunshan Konka, the payment in arrears of MEG to Kunshan
Konka was USD 1,099,423.52
Kunshan Konka entrusted Shanghai Jiajia Law firm to file a suit from Shanghai Maritime
Court, requested Ningbo United and Econolines compensate for the loss of payment for
goods USD 1,099,423.52 and its interest; meanwhile bear the fees for acceptance and
property preservation application fee
On 26 May 2014, Shanghai Maritime Court made the first-instance judgment, which ordered
Ningbo United and Econolines compensate for the loss of payment for goods USD
1,099,423.52 and its interest, and bear the fees for acceptance and property preservation
application fee
In Jun. 2014 Ningbo United appealed to the Shanghai Higher People's Court against its
sentence. Now the case waits for a second trial. On 24 Nov. 2014, the Second-instance trial,
pending at present
(2) Possible liabilities formed for providing debt guarantee for other institutions and their
financial impacts
The Company applied to China Construction Bank, Hong Kong Branch for a credit line of
USD 50 million (about RMB305.68 million) on January 15, 2014 and provided a loan of
USD48.50 million on January 15, 2014, and this credit line had been used up by June 30,
2015.
The Company applied to China Construction Bank, Shenzhen Branch for a credit line by
letter of guarantee of USD69.10 million (about RMB422.8229 million) on July 23, 2014, and
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2015 Semi-annual Report of Konka Group Co., Ltd.
provided a credit guarantee with a line of RMB409.973 million for Hong Kong Konka Co.,
Ltd on July 28, 2014, and its guarantee term was from July 28, 2014 to July 28, 2016. The
line is mainly used by Hong Kong Konka Co., Ltd for the purposes of daily operating
businesses such as opening and acceptance of letters of credit and acquiring financial loans
from banks. By June 30, 2015, this line had been used up.
The Company applied to HSBC Bank for a credit line by letter of guarantee of USD10
million (about RMB61.190 million) on October 10, 2014, and provided a credit guarantee
with a line of RMB61.190 million for Hong Kong Konka Co., Ltd, and its guarantee term
was from October 10, 2014 to October 10, 2015. The line is mainly used by Hong Kong
Konka Co., Ltd for the purposes of daily operating businesses such as opening and
acceptance of letters of credit and acquiring financial loans from banks. By June 30, 2015,
this line had been used up.
The Company applied to Industrial and Commercial Bank of China, Xinian Sub-branch for a
credit line by letter of guarantee of RMB78 million on November 8, 2014, and provided a
credit guarantee with a line of RMB74.3459 million for Hong Kong Konka Co., Ltd, and its
guarantee term was from November 12, 2014 to October 27, 2015. The line is mainly used
by Hong Kong Konka Co., Ltd for the purposes of daily operating businesses such as
opening and acceptance of letters of credit and acquiring financial loans from banks. By June
30, 2015, this line had been used up.
The Company applied to Agricultural Bank of China, Shenzhen OCT Sub-branch for a credit
line by letter of guarantee of USD30 million (about RMB183.570 million) on November 17,
2014, and provided a credit guarantee with a line of RMB183.570 million for Hong Kong
Konka Co., Ltd, and its guarantee term was from November 17, 2014 to November 18, 2015.
The line is mainly used by Hong Kong Konka Co., Ltd for the purposes of daily operating
businesses such as opening and acceptance of letters of credit and acquiring financial loans
from banks. By June 30, 2015, this line had been used up.
The Company applied to Agricultural Bank of China, Shenzhen OCT Sub-branch for a
credit line by letter of guarantee of USD45 million (about RMB275.355 million) on
November 20, 2014, and provided a credit guarantee with a line of RMB275.355 million for
Hong Kong Konka Co., Ltd, and its guarantee term was from November 20, 2014 to
November 20, 2015. The line is mainly used by Hong Kong Konka Co., Ltd for the purposes
of daily operating businesses such as opening and acceptance of letters of credit and
acquiring financial loans from banks. By June 30, 2015, this line had been used up.
The Company signed a Credit Line Contract with the serial number of BJ2014Z241JTBB-1
with China Construction Bank, Shenzhen Branch on December 8, 2014, and provided a
credit guarantee with a line of RMB200million for Anhui Konka Electronics Co., Ltd, and its
guarantee term was from December 8, 2014 to December 7, 2017. The line is mainly used by
Anhui Konka Electronics Co., Ltd for the purposes of daily operating businesses such as
opening and acceptance of letters of credit and acquiring financial loans from banks. By June
30, 2015, RMB 181,666,248.33 had been used in this line. Chuzhou State-owned Assets
Operation Co., Ltd, a minority stockholder of Anhui Konka provided 22% of counter
guarantee of the line guaranteed by the Company.
The Company provided a credit guarantee with a line of RMB300million for Anhui Konka
Tongchuang Household Appliances Co., Ltd., and its guarantee term was from December 8,
2014 to December 7, 2017. The line is mainly used by Anhui Konka Tongchuang Household
Appliances Co., Ltd. for the purposes of daily operating businesses such as opening and
acceptance of letters of credit and acquiring financial loans from banks. By June 30, 2015,
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2015 Semi-annual Report of Konka Group Co., Ltd.
RMB 69,500,000.00 had been used in this line. Chuzhou Tongchuang Investment and
Construction Co., Ltd., a minority stockholder of Toptry Electric Appliance Co., Ltd
provided 50% of counter guarantee of the line guaranteed by the Company.
The Company signed a Credit Line Contract with the serial number of BJ2014Z241JTBB-2
with China Construction Bank, Shenzhen Branch on December 8, 2014, and provided a
credit guarantee with a line of RMB300million for Kunshan Konka Electronic Co., Ltd., and
its guarantee term was from December 8, 2014 to December 7, 2017. The line is mainly used
by Kunshan Konka Electronic Co., Ltd. for the purposes of daily operating businesses such
as opening and acceptance of letters of credit and acquiring financial loans from banks. By
June 30, 2015, RMB 52,141,467.59 in this line had been used.
The Company applied to Ping An Bank for a credit line by letter of guarantee of RMB148
million on March 27, 2015, and provided a credit guarantee with a line of RMB148 million
for Hong Kong Konka Co., Ltd, and its guarantee term was from April 1, 2015 to December
15, 2015. By June 30, 2015, this line had been used up.
The Company applied to Bank of China, Shenzhen Branch for a comprehensive credit line of
RMB5.3 billion on April 21, 2015, and provided a credit guarantee of RMB500 million for
Shenzhen Konka Telecommunications Technology Co., Ltd. with its comprehensive credit
line of RMB500 million on April 22, 2015, and its guarantee term was from April 22, 2015 to
April 21, 2016. The credit line is mainly used for the purposes of daily operating businesses
such as opening and acceptance of letters of credit and acquiring financial loans from banks.
By June 30, 2015, RMB83, 512, 861.55 in this line had been used. The Company provided a
credit guarantee of RMB60 million for Shenzhen Konka Electric Appliance Co., Ltd on
December 8, 2014, and its guarantee term was from December 8, 2015 to December 7, 2017.
The credit line is mainly used for the purposes of daily operating businesses such as opening
and acceptance of letters of credit and acquiring financial loans from banks. By June 30,
2015, RMB0 in this line had been used.
The Company opened a letter of guarantee agreement for tendering purpose with China
Construction Bank, Nanshan Sub-branch (Contract No: 0701-154150150055) due to
tendering need of ground digital television and broadcasting transmitting system of wireless
digital coverage project for central broadcasting and television programs. Its beneficiary is
China International Tendering Company, the amount covered by the letter of guarantee is
RMB6.584 million and the term of letter of guarantee is from May 5, 2015 to September 2,
2015.
The Company applied to China Development Bank, Shenzhen Branch for a credit line by
letter of guarantee of USD24.70 million on March 20, 2015, and provided a credit guarantee
for Hong Kong Konka Co., Ltd on March 23, 2015, and its guarantee term was from March
23, 2015 to March 23, 2016. By June 30, 2015, this line had been used up.
The Company applied to China Development Bank, Shenzhen Branch for a credit line by
letter of guarantee of USD25.30 million on May 29, 2015, and provided a credit guarantee
for Hong Kong Konka Co., Ltd on May 29, 2015, and its guarantee term was from May 29,
2015 to May 29, 2016. By June 30, 2015, this line had been used up.
The Company applied to China Minsheng Banking Corp., Ltd, Shenzhen Branch for a credit
line by letter of guarantee of USD40 million on June 19, 2015, and provided a credit
guarantee of a line of RMB148 million for Hong Kong Konka Co., Ltd on June 26, 2015, and
its guarantee term was from June 26, 2015 to June 26, 2016. By June 30, 2015, this line had
been used up.
By June 30, 2015, the Company opened commercial acceptance bills with a total amount of
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2015 Semi-annual Report of Konka Group Co., Ltd.
RMB41, 227, 166.17 for Konka Electric Appliance Co., Ltd, which was used as pledge to
open bank acceptance bills. In accordance with the Agreement on Opening Bank Acceptance
Bills (SN: CD79172015880178) signed by Konka Electric Appliance Co., Ltd and Shanghai
Pudong Development Bank, Shenzhen Branch, a bank acceptance bill with an amount of
RMB4,076,491.13 was opened, and its contractual term was from February 3, 2015 to July
28, 2015. In accordance with the Agreement on Opening Bank Acceptance Bills (2015
SJTZCS No. 068)signed by Konka Electric Appliance Co., Ltd and China Minsheng Banking
Corp., Ltd, Shenzhen Branch, a bank acceptance bill with an amount of RMB3,443,578.26
was opened, and its contractual term was from May 27, 2015 to November 27, 2015.
XV. Events after balance sheet date
1. On 27 Aug. 2015, the Company held the 4th Meeting of the 8th Session of Board of
Directors, the meeting reviewed and approved the 2015 profits distribution preplan, which
was: in order to reward the shareholders and share the operation result with the shareholder
and increase the liquidity of the Company’s share, under the premise of ensuring the
Company's normal operation and long-term development, the Company decided that: on the
base of total equity of 1,203,972,704 shares, conducting capital reserve transfer into share
capital, every 10 shares transfer 10 shares, after the transfer, the total share capital of the
Company will increase by 2,407,945,408 shares.
XVI. Other significant events
1. Lease
(1) The closing original price accumulated depreciation and accumulated impairment
provision of all kinds of the rented fixed assets.
Particulars of the financing lease of the rented fixed assets, please refer to note VI, 12, (3)
(2) Minimum lease payment will be paid in future
The remaining lease term The minimum lease payment
Within 1 year (including 1 year) 796,757.13
Within 1 year and 2 years (including 2 years) 276,328.20
Total 1,073,085.33
(3) The balance of unrecognized financing charges, and the method used to allocate the
unrecognized financing charges.
As of the balance sheet date, the balance of unrecognized financing charges was RMB71,
200.00; amortization method is the actual interest rate method.
(4) Category of fixed assets leased by operating lease, please refer to note VI, 12 (4)
2. On 22 Apr. 2014, the Company signed Comprehensive Credit Contract No.
CN11002022648-140416 with HSBC Bank (China) Co., Ltd. Shenzhen Sub-branch and
gained loan of no more than $ 20 million, the period was 2 years after the withdrawal date.
As of 30 Jun. 2015, the Credit Limit had used $10, 000,000.00，unused $ 10,000,000.00.
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2015 Semi-annual Report of Konka Group Co., Ltd.
3. On 11 Jun. 2014, the Company signed Credit Contract No. J2014Z241JTB with CCB
Shenzhen Sub-branch and gained general credit limit no more than RMB 5,000,000,000.
Period of credit: 10 Jun. 2014 to 2016. 10 Jun. As of 30 Jun. 2015, the Credit Limit had used
RMB 1,474,695,219.75，unused RMB 3,525,304,780.25.
4. On January 13, 2015, the Company signed a Comprehensive Credit Line Contract with the
serial number of 0251378 with Bank of Beijing, Shenzhen Branch, according to which, max
credit line was RMB500.00 million, and its term was from January 13, 2015 to January 13,
2016. Specific credit awarding businesses include loan in foreign currencies, acceptance of
bills and opening of import letters of credit and letters of guarantee. By June 30, 2015, the
used line of this credit line was 427,765,138.15 and unused credit line was 72,234,861.85.
5. On January 27, 2015, the Company signed a Comprehensive Credit Line Contract with the
serial number of 2015 SJTZEZ No 002 with China Minsheng Banking Corp., Ltd, according
to which, max credit line was RMB500.00 million. Specific credit awarding businesses
include import and export deposit exchange, payment for import on behalf, delivery-taking
guarantee and packing credit, as well as discounting(pledging) of bill of exchange that Party
A conducts with Party B as a creditor and holder of bills. The validity term of the contract
was from January 27, 2015 to January 27, 2016.
6. On March 31, 2015, the Company contracted with Agricultural Bank of China, Shenzhen
OCT Sub-branch that max credit line to be applied was RMB2 billion. By June 30, 2015, the
unused credit line was RMB1, 532, 264, 132.85 and used credit line was RMB467, 735,
867.15.
7. On April 23, 2015, the Company extended the term of the Credit Line Agreement with the
serial number of 2013 ZZYEXZ No. 0001005 signed with Bank of China, Shenzhen Branch,
according to which the Company and Konka Telecommunications provided a collateral
guarantee against a bank acceptance bill no less than RMB1.3 billion for acquiring a
comprehensive credit line of no more than RMB5.3 billion. The Company was the credited
person and Konka Telecommunications was the entitled drawer, and expiration date after
extension was April 21, 2016. By June 30, 2015, the used line of this credit line was RMB3,
928, 819,716.69, and unused line was RMB1, 371, 180, 283. 31.
8. On May 28, 2015, the Company signed a Comprehensive Credit Line Contract with the
serial number of 2015 SYQHZZ No.0005 with CITIC Bank, Shenzhen Civic Center
Sub-branch, with a credit awarding line of RMB400 million. The specific credit awarding
businesses included loan, undertaking and discounting of notes, opening of letter of credit,
packing loan, import and export deposit exchange and opening of letter of guarantee. The
credit awarding term of the contract was from May 28, 2015 to April 15, 2017. By June 30,
2015, this comprehensive credit line had not been used temporarily.
9. On May 13, 2015, the Company contracted with Bank of Ningbo, Shenzhen Branch that
max credit line to be applied was RMB500 million. By June 30, 2015, unused line was
RMB300 million and used line was RMB200 million.
10. By June 30, 2015, the total amount for the letters of guarantee in RMB opened by the
Company was RMB452, 634,000.00, the total amount for the letters of guarantee in USD
was USD325, 000,000.00, and that for the letters of guarantee in EUR was EUR 25,000.00.
of them, the amount for the letters of guarantee in RMB that the Company opened to Hong
Kong Konka, its subsidiary, through its credit awarding bank was USD 325,200,000.00 and
that for letters of guarantee the Company opened to Hong Kong Konka in USD was
226,000,000.00.
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2015 Semi-annual Report of Konka Group Co., Ltd.
11. By June 30, 2015, the amount for the letters of credit that the Company opened for Konka
Electronics, its subsidiary, was RMB3, 186,710,335.31; of which the amount used by the
subsidiary was RMB3, 081,643,066.53, and unused amount was 105, 067, 268. 78. The total
amount for the letters of credit that it opened for Hong Kong Konka, its subsidiary, was RMB
13, 619, 382.48; of which, the amount used by the subsidiary was RMB13, 619, 382.48, and
unused amount was 0.
12. The dividend distribution program passed the review at the stockholder meeting of 2014
held on May 28, 2015, and its specific contents were as follows: Based on the total stock
shares of 1,203,972,704 in the year of 2014, a dividend of RMB0.1 (tax included) will be
distributed per 10 shares to all the stockholders, and total amount of dividend to be
distributed will be RMB 12, 039,727.04, and remaining undistributed profit will be carried
forward to later years for distribution.
13. The Company is planning equity incentive matter currently. By the date of approval of
this report, the Company and related parties are preparing materials actively and doing their
best to push forward various jobs.
XV Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable
Closing balance
Book balance Provision for bad debts
Category
Proportion Proportion Book balance
Amount Amount
(%) (%)
Accounts receivable with
significant single amount and
— — — — —
individually withdrawn bad
debt provision
Accounts receivable
withdrawal of bad debt
provision of by credit risks
characteristics:
Group 1: aging group 1,080,511,048.34 56.89 209,330,818.38 19.37 871,180,229.96
Group 2: Related party group 818,830,022.96 43.11 — — 818,830,022.96
Subtotal of groups 1,899,341,071.30 100.00 209,330,818.38 11.02 1,690,010,252.92
Accounts receivable with
— — — — —
insignificant single amount
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2015 Semi-annual Report of Konka Group Co., Ltd.
and individually withdrawn
bad debt provision
Total 1,899,341,071.3 100.00 209,330,818.38 100.00 1,690,010,252.92
(Continued)
Opening balance
Book balance Provision for bad debts
Category
Proportion Proportion Book balance
Amount Amount
(%) (%)
Accounts receivable with
significant single amount and
— — — — —
individually withdrawn bad
debt provision
Accounts receivable
withdrawal of bad debt
provision of by credit risks
characteristics:
Group 1: aging group 1,436,462,593.91 81.90 214,731,732.08 14.95 1,221,730,861.83
Group 2: Related party group 317,565,114.46 18.10 — — 317,565,114.46
Subtotal of groups 1,754,027,708.37 100.00 214,731,732.08 12.24 1,539,295,976.29
Accounts receivable with
insignificant single amount
— — — — —
and individually withdrawn
bad debt provision
Total 1,754,027,708.37 100.00 214,731,732.08 12.24 1,539,295,976.29
① In the groups, other accounts receivable adopting aging analysis method to withdraw bad
debt provision:
Closing balance
Aging
Account receivable Provision for bad debts Proportion (%)
1 Within 1 year 844,192,506.30 16,884,260.69 2.00
1-2 years 24,347,792.28 1,217,389.61 5.00
2-3 years 21,519,804.47 4,303,960.89 20.00
3-4 years 4,064,337.37 2,032,168.69 50.00
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2015 Semi-annual Report of Konka Group Co., Ltd.
Closing balance
Aging
Account receivable Provision for bad debts Proportion (%)
4-5 years 2,987,138.84 1,493,569.42 50.00
Over 5 years 183,399,469.08 183,399,469.08 100.00
Total 1,080,511,048.34 209,330,818.38
② In the groups, accounts receivable adopting other methods to withdraw bad debt
provision:
Closing balance
Name of the group
Account receivable Provision for bad debts Proportion (%)
Related party group 818,830,022.96 — —
Total 818,830,022.96 — —
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The amount of bad debt provision was RMB -5,400,913.70 the amount of reversed or
recovered bad debt provision in the report period RMB Yuan
(3)The top five other account receivable classified by debtor at period end
The total amount of the top five account receivable classified by debtor at period end was
RMB 334,682,253.94, 17.62% of the balance of closing account receivable, the relevant
balance of bad debt provision was RMB 9,542,592.79.
2. Other account receivable
(1) Other account receivable classified by category
Closing balance
Book balance Provision for bad debts
Category
Proportion Proportion Book value
Amount Amount
(%) (%)
Other accounts receivable with
significant single amount and
31,507,986.04 3.47 18,450,138.46 58.56 13,057,847.58
individually withdrawn bad debt
provision
Other accounts receivable
withdrawal of bad debt provision of
by credit risks characteristics:
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2015 Semi-annual Report of Konka Group Co., Ltd.
Group 1: aging group 138,637,718.41 15.24 31,050,122.36 22.40 107,587,596.05
Group 2: Related party group 739,368,129.13 81.29 — — 739,368,129.13
Subtotal of groups 878,005,847.54 96.53 31,050,122.36 3.54 846,955,725.18
Other accounts receivable with
insignificant single amount and
— — — — —
individually withdrawn bad debt
provision
Total 909,513,833.58 100.00 49,500,260.82 5.44 860,013,572.76
(Continued)
Opening balance
Book balance Provision for bad debts
Category
Proportion Proportion Book value
Amount Amount
(%) (%)
Other accounts receivable
with significant single
amount and individually
withdrawn bad debt provision 31,507,969.28 3.07 18,797,943.19 59.66 12,710,026.09
Other accounts receivable
withdrawal of bad debt
provision of by credit risks
characteristics:
Group 1: aging group 629,814,580.00 61.30 20,473,350.81 3.25 609,341,229.19
Group 2: Related party group 366,148,374.77 35.63 — — 366,148,374.77
Subtotal of groups 995,962,954.77 96.93 20,473,350.81 2.06 975,489,603.96
Other accounts receivable
with insignificant single
— — — — —
amount and individually
withdrawn bad debt provision
Total 1,027,470,924.05 100.00 39,271,294.00 3.82 988,199,630.05
① Other accounts receivable with significant single amount and individually withdrawn bad
debt provision at period-end
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2015 Semi-annual Report of Konka Group Co., Ltd.
Closing balance
Other accounts receivable( entity) Other accounts Provision for bad Withdrawal
debts Reason
receivable proportion (%)
Chongqng Konka Auto Electronic Suspended production,
13,392,033.53 13,392,033.53 100.00
plan to sell
Company
Shenzhen Konka Video &
Assessment of
Communication Systems Engineering 18,115,952.51 5,058,104.93 27.92
impairment
Co., Ltd.
Total 31,507,986.04 18,450,138.46 —
② In the groups, other accounts receivable adopting aging analysis method to withdraw bad
debt provision:
Closing balance
Aging
Other account receivable Provision for bad debts Proportion (%)
Within 1 year 41,384,557.87 583,617.27 1.14
1-2 years 4,595,916.83 229,795.84 5.00
2-3 years 76,341,291.96 15,268,258.39 20.00
3-4 years 2,478,778.88 1,239,389.44 50.00
4-5 years 216,222.90 108,111.45 50.00
Over 5 years 13,620,949.97 13,620,949.97 100.00
Total 138,637,718.41 31,050,122.36
③ In the groups, other accounts receivable adopting other methods to withdraw bad debt
provision:
Closing balance
Name of the group
Other account receivable Provision for bad debts Proportion (%)
Related party group 739,368,129.13 — —
(2) Bad debt provision withdrawal, reversed or recovered in the report period
The amount of bad debt provision was RMB 10,228,966.82 the amount of reversed or
recovered bad debt provision in the report period RMB Yuan
(3) The top 5 other account receivable classified by debtor at period end
Closing balance
Entity Nature Closing balance Aging Proportion% of bad debt
provision
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2015 Semi-annual Report of Konka Group Co., Ltd.
Closing balance
Entity Nature Closing balance Aging Proportion% of bad debt
provision
Current
Client 1 112,829,249.88 Within 1 year 12.41 —
amount
Current Within
Client 2 106,095,989.02 11.67 —
2-3years
amount
Current Within
Client 3 100,000,000.00 10.99 —
1-2years
amount
Within
Client 4 Subsidy 75,655,587.77 8.32 —
2-3years
Client 5 Loan 62,894,650.00 Within 1 year 6.92 12,578,930.00
Total 457,475,476.67 50.31 12,578,930.00
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2015 Semi-annual Report of Konka Group Co., Ltd.
3. Long term equity investment
(1) Category of equity investment
Closing balance Opening balance
Item
Book balance Bad debt provision Book value Book balance Bad debt provision Book value
Investment to subsidiary 1,632,810,835.91 94,394,984.69 1,538,415,851.22 1,505,310,835.91 94,394,984.69 1,410,915,851.22
Investment to joint venture
202,286,296.11 — 202,286,296.11 197,758,604.87 — 197,758,604.87
and associate enterprises
Total 1,835,097,132.02 94,394,984.69 1,740,702,147.33 1,703,069,440.78 94,394,984.69 1,608,674,456.09
(2) Investment to subsidiaries of the Company
Withdrawn impairment
Closing balance of
Entity Opening balance Increase Decrease Closing balance provision in the
impairment provision
reporting period
Mudanjiang Konka 36,000,000.00 — — 36,000,000.00 — 36,000,000.00
Anhui Konka 122,780,937.98 — — 122,780,937.98 — —
Dongguan Konka 274,783,988.91 — — 274,783,988.91 — —
Hong Kong Konka 781,828.61 — — 781,828.61 — —
Konka Europe 261,482.50 — — 261,482.50 — —
Nanhai Konka 500,000.00 — 500,000.00 — — —
Kunshan Konka 350,000,000.00 — — 350,000,000.00 — —
Plastic Products 4,655,000.00 — — 4,655,000.00 — —
Konka Household 10,732,485.69 — — 10,732,485.69 — 10,732,484.69
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2015 Semi-annual Report of Konka Group Co., Ltd.
Withdrawn impairment
Closing balance of
Entity Opening balance Increase Decrease Closing balance provision in the
impairment provision
reporting period
Appliances
Telecommunication
90,000,000.00 — — 90,000,000.00 — —
Technology
Konka America 8,062,500.00 — — 8,062,500.00 — 8,062,500.00
Information Network 22,500,000.00 — — 22,500,000.00 — 22,500,000.00
Shushida 31,500,000.00 — — 31,500,000.00 — —
Chongqing Electronic 17,100,000.00 — — 17,100,000.00 — 17,100,000.00
Fittings Technology 48,750,000.00 — — 48,750,000.00 — —
Kunshan Kangsheng 350,000,000.00 — — 350,000,000.00 — —
Anhui Tongchuang 69,702,612.22 — — 69,702,612.22 — —
Konka
10,000,000.00 — — 10,000,000.00 — —
Optoelectronic
Wankaida 10,000,000.00 — — 10,000,000.00 — —
Beijing Konka 30,000,000.00 — — 30,000,000.00 — —
Shushida Logistics 10,000,000.00 — — 10,000,000.00 — —
Konka E-display 7,200,000.00 — — 7,200,000.00 — —
Kaikai Shijie — 16,000,000.00 — 16,000,000.00 — —
Konka Jiacheng — 112,000,000.00 — 112,000,000.00 — —
Total 1,505,310,835.91 128,000,000.00 500,000.00 1,632,810,835.91 — 94,394,984.69
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2015 Semi-annual Report of Konka Group Co., Ltd.
(3) Investment to joint venture and associated enterprise
Increase/ decrease
Entity Opening balance Additional negative Profits or losses recognized under Adjustment of other
Other equity changes
investment investment equity method. comprehensive income
I. Joint venture — — — — — —
Subtotal — — — — — —
II. Associated enterprise
Shanghai Konka Green
Science and Technology 197,758,604.87 — — -1,798,656.54 — —
Co., Ltd.
Zhuhai JinSu Plastic Co.,
— 6,210,000.00 — 116,347.78 — —
Ltd.
Subtotal 197,758,604.87 6,210,000.00 — -1,682,308.76 — —
Total 197,758,604.87 6,210,000.00 — -1,682,308.76 — —
(Continued)
Increase/ decrease
Entity Closing balance Closing balance of bad debt provision
Equities or profits declare to issue Bad debt provision Other
I. Joint venture — — — — —
Subtotal — — — — —
II. Associated enterprise
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2015 Semi-annual Report of Konka Group Co., Ltd.
Increase/ decrease
Entity Closing balance Closing balance of bad debt provision
Equities or profits declare to issue Bad debt provision Other
Shanghai Konka Green
Science and Technology — — — 195,959,948.33 —
Co., Ltd.
Zhuhai JinSu Plastic
— — — 6,326,347.78 —
Co., Ltd.
Subtotal — — — 202,286,296.11 —
Total — — — 202,286,296.11 —
201
2015 Semi-annual Report of Konka Group Co., Ltd.
4. Revenue and Cost of Sales
(1) Revenue, Cost of Sales
Reporting period Same period of last year
Item
Revenues Operating costs Revenues Operating costs
Main operations 5,206,152,132.20 4,497,471,865.49 6,099,604,673.55 5,167,064,503.47
Other operations 2,583,414,002.88 2,541,927,133.83 2,373,201,312.47 2,344,487,228.02
Total 7,789,566,135.08 7,039,398,999.32 8,472,805,986.02 7,511,551,731.49
(2) Main business (Classified by industry)
Reporting period Same period of last year
Industry
Revenue of sales Costs of sales Revenue of sales Costs of sales
Electronic industry 5,206,152,132.20 4,497,471,865.49 6,099,604,673.55 5,167,064,503.47
Total 5,206,152,132.20 4,497,471,865.49 6,099,604,673.55 5,167,064,503.47
(3) Main business (Classified by product)
Reporting period Same period of last year
Product
Revenue of sales Costs of sales Revenue of sales Costs of sales
Color TV business 4,941,412,033.28 4,263,991,650.08 5,750,914,101.07 4,846,133,418.18
Consumer appliances
257,995,693.55 226,820,496.00 308,491,356.79 280,926,543.15
business
Others 6,744,405.37 6,659,719.41 40,199,215.69 40,004,542.14
Total 5,206,152,132.20 4,497,471,865.49 6,099,604,673.55 5,167,064,503.47
(4) Main business (Classified by area)
Reporting period Same period of last year
Area
Revenue of sales Costs of sales Revenue of sales Costs of sales
Domestic sales 4,482,238,335.25 3,820,646,881.53 5,136,480,346.53 4,230,458,436.94
Overseas sales 723,913,796.95 676,824,983.96 963,124,327.02 936,606,066.53
Total 5,206,152,132.20 4,497,471,865.49 6,099,604,673.55 5,167,064,503.47
(5) The revenue of sales from the top five customers
Period Total amount of Top 5 customers Proportion of the same period of the
operating revenue operating revenue (%)
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2015 Semi-annual Report of Konka Group Co., Ltd.
1,076,825,404.57 13.82
Jan.-Jun. 2015
1,609,340,421.61 18.99
Jan.-Jun. 2014
5. Investment income
Item 2015 2014
Long-equity investment income measured by cost method 2,014,898.95 —
Long-equity investment income measured by equity method -1,682,308.76 -2,175,501.89
Investment income occurred from disposing the long-term equity
-491,110.76 255,080,452.51
investment
Investment income of the available-for-sale financial assets during
2,153,880.21 48,104.52
the holding period
Income occurred from the entrust management and entrust loans 37,377,437.29 18,482,089.04
Total 39,372,796.93 271,435,144.18
203
2015 Semi-annual Report of Konka Group Co., Ltd.
XVIII. Supplementary information
1. List of non-current gains and losses of 2015
Item Amount
Gain/loss on the disposal of non-current assets (including the offset part of the asset impairment provisions) -1,192,849.90
Tax rebates, reductions or exemptions due to approval beyond authority or the lack of official approval
—
documents
Government grants recognized in the current period, except for those acquired in the ordinary course of
27,769,533.09
business or granted at certain quotas or amounts according to the government’s unified standards
Capital occupation charges on non-financial enterprises that are recorded into current gains and losses —
Gains due to that the investment costs for the Company to obtain subsidiaries, associates and joint ventures
are lower than the enjoyable fair value of the identifiable net assets of the investees when making the —
investments
Gain/loss on non-monetary asset swap —
Gain/loss on entrusting others with investments or asset management 3,442,481.04
Asset impairment provisions due to acts of God such as natural disasters —
Gain/loss on debt restructuring —
Expenses on business reorganization, such as expenses on staff arrangements, integration, etc. —
Gain/loss on the part over the fair value due to transactions with distinctly unfair prices —
Current net gains and losses of subsidiaries acquired in business combination under the same control from
—
period-begin to combination date
Gain/loss on contingent events irrelevant to the Company’s normal business —
Gains and losses on change in fair value from tradable financial assets and tradable financial liabilities, as well
as investment income from disposal of tradable financial assets and tradable financial liabilities and financial 2,153,880.21
assets available for sales except for effective hedging related with normal businesses of the Company
Impairment provision reversal of accounts receivable on which the impairment test is carried out separately —
Gain/loss on entrustment loans 1,669,999.98
Gain/loss on change of the fair value of investing real estate of which the subsequent measurement is carried
—
out adopting the fair value method
Effect on current gains/losses when a one-off adjustment is made to current gains/losses according to
—
requirements of taxation, accounting and other relevant laws and regulations
Custody fee income when entrusted with operation —
Non-operating income and expense other than the above 5,493,353.06
Other gain and loss items that meet the definition of an extraordinary gain/loss 4,936,419.75
Subtotal 44,272,817.23
Less: Income tax effects 6,314,708.35
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2015 Semi-annual Report of Konka Group Co., Ltd.
Item Amount
Minority interests effects (after tax) 973,384.29
Total 36,984,724.59
Notes: the number “+” among the non-current gains and losses items refers to profits and revenues,
while “-”referred to losses or expenditure.
The recognition of the non-current gains and losses items was executed according to the regulations
of No.1 of the Information Disclosure Explanatory Notice of the Companies Public Offering
Securities-Non-current Gains and losses (Z-J-H-Announcement [2008] No. 43) .
Item Involved amount Reason
Closely related to the normal operating business of the Company which
met with the regulations of the state policies as well as constantly
34,130,823.15
enjoyed the governmental subsidies according to certain standard quotas
Software drawback or quantities
Total 34,130,823.15
2. Net assets yield and earnings per share
EPS
Profits of the period ROEWA (%)
Basic EPS Diluted EPS
Net profits attributed to the
common shareholders of the -7.52 -0.2466 -0.2466
Company
Net profits attributed to the
common shareholders after
-8.46 -0.2774 -0.2774
deducting the non-current gains
and losses
Notes: (1) The corresponding ROEWA of the net profits attributed the common shareholders of the
Company =-317,914,497.85/(4,103,478,971.07-317,914,497.85/2-12,039,727.04*1/6+90,185.65
*6/6- 674,846.91 *6/6)
The corresponding ROEWA of the net profits attributed the common shareholders after deducting
the non-current gains and losses =
(-317,914,497.85-36,716,371.02)/(4,103,478,971.07-317,914,497.85/2-12,039,727.04*1/6+90,185.
65 *6/6- 674,846.91 *6/6)
205
2015 Semi-annual Report of Konka Group Co., Ltd.
Section X. Documents Available for Reference
I. Financial statements with the signatures and seals of the company principal, the principal of
accounting work and the principal of the accounting organ (financial manager);
II. Originals of Auditors’ Report with the seals of the CPAs firm and the signatures & seals of the
certified public accountants;
III. Texts of all the Company’s documents ever publicly disclosed in newspapers designated by
CSRC in the reporting period, and the originals of the public notices.
IV. Other relevant materials.
The Board of Directors
Konka Group Co., Ltd.
28 Aug. 2015
206
