Konka Group Co., Ltd.
Interim Report 2019
KONKA GROUP CO., LTD.
INTERIM REPORT 2019
2019-76
August 2019
1
Konka Group Co., Ltd.
Interim Report 2019
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of Konka Group Co., Ltd. (hereinafter referred to as the
“Company”) hereby guarantee the factuality, accuracy and completeness of the contents of
this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
Liu Fengxi, the Company’s legal representative, Li Chunlei, the Company’s Chief Financial
Officer (CFO), and Feng Junxiu, head of the Company’s financial department (equivalent to
financial manager) hereby guarantee that the Financial Statements carried in this Report are
factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
Any plans for the future or other forward-looking statements mentioned in this Report and its
summary shall NOT be considered as absolute promises of the Company to investors.
Therefore, investors are reminded to exercise caution when making investment decisions.
The Company has no interim dividend plan, either in the form of cash or stock.
This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese versions
shall prevail.
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Konka Group Co., Ltd.
Interim Report 2019
Table of Contents
Interim Report 2019...........................................................................................................................1
Part I Important Notes, Table of Contents and Definitions........................................................... 2
Part II Corporate Information and Key Financial Information................................................... 8
Part III Business Summary............................................................................................................. 11
Part IV Operating Performance Discussion and Analysis............................................................14
Part V Significant Events.................................................................................................................28
Part VI Share Changes and Shareholder Information................................................................. 47
Part VII Preferred Shares................................................................................................................51
Part VIII Directors, Supervisors and Senior Management..........................................................52
Part IX Corporate Bonds.................................................................................................................53
Part X Financial Statements............................................................................................................58
Part XI Documents Available for Reference................................................................................ 309
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Konka Group Co., Ltd.
Interim Report 2019
Definitions
Term Definition
The “Company”, the “Group”, “Konka Group” or Konka Group Co., Ltd. and its consolidated subsidiaries, except where the
“we” context otherwise requires
Anhui Electrical Appliance Anhui Konka Electrical Appliance Technology Co., Ltd.
Anhui Konka Anhui Konka Electronic Co., Ltd.
Anhui Tongchuang Anhui Konka Tongchuang Electrical Appliances Co., Ltd.
Anhui Zhilian Anhui Konka Zhilian E-Commerce Co., Ltd.
Beijing Konka Electronic Beijing Konka Electronic Co., Ltd.
Boluo Konka Precision Boluo Konka Precision Technology Co., Ltd.
Boluo Konka Boluo Konka PCB Co., Ltd.
Industrial New Town Sichuan Konka Industrial New Town Development Co., Ltd.
Chengdu Anren Chengdu Anren Konka Cultural and Creative Incubator Management Co., Ltd.
Chengdu Konka Incubator Chengdu Konka Incubator Management Co., Ltd.
Chuzhou Kangyong Chuzhou Kangyong Health Industry Development Co., Ltd.
Chuzhou Konka TID Chuzhou Konka Technology & Industry Development Co., Ltd.
Chuanghui Smart Nanjing Chuanghui Smart Technology Co., Ltd.
Electronics Technology Shenzhen Konka Electronics Technology Co., Ltd.
Dongguan Packing Dongguan Konka Packing Materials Co., Ltd.
Dongguan Konka Dongguan Konka Electronic Co., Ltd.
Dongguan Konka Investment Dongguan Konka Investment Co., Ltd.
Hainan Technology Hainan Konka Technology Industry Development Co., Ltd.
Hefei KONSEMI Hefei KONSEMI Storage Technology Co., Ltd.
Jiali International Jiali International (Hong Kong) Limited
Jiaxin Technology Jiaxin Technology Co., Ltd.
Jiangxi Konka Jiangxi Konka New Material Technology Co., Ltd.
Konka Electrical Appliances International Trading Konka Electrical Appliances International Trading Co., Ltd.
Konka Electrical Appliances Investment Konka Electrical Appliances Investment & Development Co., Ltd.
Konka Factoring Konka Factoring (Shenzhen) Co., Ltd.
Konka Material Hainan Konka Material Technology Co., Ltd.
Konka Ventures Konka Ventures Development (Shenzhen) Co., Ltd.
Konka Enterprise Service Guiyang Konka Enterprise Service Co., Ltd.
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Konka Group Co., Ltd.
Interim Report 2019
Konka Electrical Appliances Shenzhen Konka Electrical Appliances Co., Ltd.
Konka Huanjia Konka Huanjia (Dalian) Environmental Technology Co., Ltd.
Konka Huanjia (Henan) Konka Huanjia (Henan) Environmental Technology Co., Ltd.
Konka Unifortune Shenzhen Konka Unifortune Technology Co., Ltd.
Konka Enterprise Management Guizhou Konka Enterprise Management Service Co., Ltd.
Konka Ronghe Konka Ronghe Industrial Technology (Foshan) Co., Ltd.
Konka Eco-Development Shenzhen Konka Eco-Development Investment Co., Ltd.
Konka Suyuan Shenzhen Konka Suyuan Investment Industrial Co., Ltd.
Konka Suiyong Konka Suiyong Investment (Shenzhen) Co., Ltd.
Kangjiatong Sichuan Kangjiatong Technology Co., Ltd.
Konka Investment Shenzhen Konka Investment Holding Co., Ltd.
Konka E-display Shenzhen Konka E-display Co., Ltd.
Konka SmartTech Konka SmartTech Limited
Konka Capital Shenzhen Konka Capital Equity Investment Management Co., Ltd.
Konka Leasing Konka Financial Leasing (Tianjin) Co., Ltd.
Kangjietong Kangjietong (Hong Kong) Limited
Kangqiao Easy Chain Shenzhen Kangqiao Easy Chain Technology Co., Ltd.
Kangquan Enterprise Shenzhen Kangquan Enterprise Management Consulting Co., Ltd.
Kangzhi Trade Anhui Kangzhi Trade Co., Ltd.
Cross-Border Technological Innovation Shenzhen Konka Cross-Border Technological Innovation Service Co., Ltd.
Mudanjiang Appliances Mudanjiang Arctic Ocean Appliances Co., Ltd.
Nano Crystallized Glass Jiangxi Golden Phoenix Nano Crystallized Glass Co., Ltd.
Nanjing Konka Nanjing Konka Smart Technology Co., Ltd.
Konka Europe Konka (Europe) Co., Ltd.
Fittings Technology Shenzhen Konka Electronic Fittings Technology Co., Ltd.
Konka Pengrun Shenzhen Konka Pengrun Technology & Industry Co., Ltd.
Xiamen Dalong Xiamen Dalong Trading Co., Ltd.
Shandong Kangxin Shandong Kangxin Industrial Development Co., Ltd.
Commercial System Technology Shenzhen Konka Commercial System Technology Co., Ltd.
Shanghai Konka Shanghai Konka Industrial Co., Ltd.
Shanghai Xinfeng Shanghai Xinfeng Zhuoqun PCB Co., Ltd.
Shenzhen Huanan Shenzhen Huanan Investment Partnership (Limited Partnership)
Shenzhen KONSEMI Shenzhen KONSEMI Co., Ltd.
Shenzhen Meixin Shenzhen Meixin Semiconductor Technology Co., Ltd.
Shenzhen Nianhua Shenzhen Nianhua Enterprise Management Co., Ltd.
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Konka Group Co., Ltd.
Interim Report 2019
Life Electric Appliance Shenzhen Konka Life Electric Appliance Co., Ltd.
Shengxing Industrial Shenzhen Konka Shengxing Industrial Co., Ltd.
Sichuan Konka Sichuan Konka Smart Terminal Technology Co., Ltd
Suining Electronic Technological Innovation Suining Konka Electronic Technological Innovation Co., Ltd.
Suining Konka Industrial Park Suining Konka Industrial Park Development Co., Ltd.
Telecommunication Technology Shenzhen Konka Telecommunications Technology Co., Ltd.
Wankaida Shenzhen Wankaida Science and Technology Co., Ltd.
Hong Kong Konka Hong Kong Konka Limited
Konka Mobility Konka Mobility Co., Limited
Xiaojia Technology Shenzhen Xiaojia Technology Co., Ltd.
Frestec Electrical Appliances Henan Frestec Electrical Appliances Co., Ltd.
Frestec Household Appliances Henan Frestec Household Appliances Co., Ltd.
Frestec Refrigeration Henan Frestec Refrigeration Appliance Co., Ltd.
Xinfeng Microcrystalline Jiangxi Xinfeng Microcrystalline Jade Co., Ltd.
XingDa HongYe GuangDong XingDa HongYe Electronic Co., Ltd.
Yantai Konka Yantai Konka Healthcare Enterprise Service Co., Ltd.
Yantai Konka Industrial Yantai Konka Industrial Co., Ltd.
Yantai Kangjin Yantai Kangjin Technology Development Co., Ltd.
E-display Service Shenzhen E-display Service Co., Ltd.
Yibin Konka Technology Park Yibin Konka Technology Park Operation Co., Ltd.
Yibin Konka Incubator Yibin Konka Incubator Management Co., Ltd.
Mobile Interconnection Shenzhen Konka Mobile Interconnection Technology Co., Ltd.
Yihe Electronic Hefei Yihe Electronic Co., Ltd.
Yifang Technology Shenzhen Konka Yifang Technology Co., Ltd.
E3info E3info (Hainan) Technology Co., Ltd.
E2info Shenzhen E2info Network Technology Co., Ltd.
Shandong Econ Technology Co., Ltd. (inclusive of its consolidated
Econ Technology
subsidiaries)
Youshi Kangrong Youshi Kangrong Culture Communication Co., Ltd.
Youzhihui Shenzhen Youzhihui Technology Co., Ltd.
Smart Technology Yibin Konka Smart Technology Co., Ltd.
Chain Kingdom Memory Technologies Chain Kingdom Memory Technologies Co., Limited
Chain Kingdom Memory Technologies
Chain Kingdom Memory Technologies (Shenzhen) Co., Ltd.
(Shenzhen)
Chongqing Konka Chongqing Konka Technology Development Co., Ltd.
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Konka Group Co., Ltd.
Interim Report 2019
CSRC The China Securities Regulatory Commission
SZSE The Shenzhen Stock Exchange
CSRC Shenzhen The Shenzhen Bureau of the China Securities Regulatory Commission
Expressed in the Chinese currency of Renminbi, expressed in tens of thousands
RMB, RMB’0,000, RMB’00,000,000
of Renminbi, expressed in hundreds of millions of Renminbi
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Konka Group Co., Ltd.
Interim Report 2019
Part II Corporate Information and Key Financial Information
I Corporate Information
Konka Group-A, Konka
Stock name Stock code 000016, 200016
Group-B
Changed stock name (if any) N/A
Stock exchange for stock listing Shenzhen Stock Exchange
Company name in Chinese 康佳集团股份有限公司
Abbr. (if any) 康佳集团
Company name in English (if
KONKA GROUP CO.,LTD
any)
Abbr. (if any) KONKA GROUP
Legal representative Liu Fengxi
II Contact Information
Board Secretary Securities Representative
Name Wu Yongjun Miao Leiqiang
Board Secretariat, 24/F, Konka R&D Center, 28 Keji Board Secretariat, 24/F, Konka R&D Center, 28 Keji
South Twelfth Road, Science and Technology Park, South Twelfth Road, Science and Technology Park,
Address
Yuehai Street, Nanshan District, Shenzhen, Guangdong Yuehai Street, Nanshan District, Shenzhen, Guangdong
Province, China Province, China
Tel. 0755-26609138 0755-26609138
Fax 0755-26601139 0755-26601139
Email
szkonka@konka.com szkonka@konka.com
address
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and
their zip codes, website address and email address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2018
Annual Report.
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Interim Report 2019
2. Media for Information Disclosure and Place where this Report is Lodged
Indicate by tick mark whether any change occurred to the information disclosure media and the
place for lodging the Company’s periodic reports in the Reporting Period.
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by
the CSRC for disclosing the Company’s periodic reports and the place for lodging such reports did
not change in the Reporting Period. The said information can be found in the 2018 Annual Report.
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
H1 2019 H1 2018 Change (%)
Operating revenue (RMB) 26,036,442,813.84 17,625,414,769.82 47.72%
Net profit attributable to the listed
352,767,020.73 341,793,039.03 3.21%
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before -622,911,633.57 -300,870,612.80 -107.04%
exceptional gains and losses (RMB)
Net cash generated from/used in
-2,042,956,171.77 -1,838,158,705.86 -11.14%
operating activities (RMB)
Basic earnings per share (RMB/share) 0.1465 0.1419 3.24%
Diluted earnings per share (RMB/share) 0.1465 0.1419 3.24%
Weighted average return on equity (%) 4.25% 4.19% 0.06%
30 June 2019 31 December 2018 Change (%)
Total assets (RMB) 37,939,411,460.71 32,985,061,889.03 15.02%
Equity attributable to the listed
8,239,642,204.00 8,104,736,790.53 1.66%
company’s shareholders (RMB)
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises
(CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting
Standards
1. Net Profit and Equity under CAS and IFRS
□ Applicable √ Not applicable
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Konka Group Co., Ltd.
Interim Report 2019
No such differences for the Reporting Period.
2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
XI Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item H1 2019 Note
Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) 570,011,162.17
Government subsidies charged to current profit or loss (exclusive of government subsidies
given in the Company’s ordinary course of business at fixed quotas or amounts as per the 320,821,164.45
government’s uniform standards)
Gain or loss on assets entrusted to other entities for investment or management 110,312,982.21
Gain or loss on fair-value changes in trading and derivative financial assets and liabilities &
income from disposal of trading and derivative financial assets and liabilities and investments
-13,291,264.69
in other debt obligations (exclusive of the effective portion of hedges that arise in the
Company’s ordinary course of business)
Gain or loss on loan entrustments 928,721.16
Non-operating income and expense other than the above 19,460,574.99
Other gains and losses that meet the definition of exceptional gain/loss 136,688,905.38
Less: Income tax effects 82,538,800.98
Non-controlling interests effects (net of tax) 86,714,790.39
Total 975,678,654.30 --
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or
listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
Their Securities to the Public—Exceptional Gain/Loss Items:
√ Applicable □ Not applicable
Item Amount involved (RMB) Reason
Government subsidies given in the Company’s ordinary course of
Tax rebates on software 23,063,806.91 business at fixed quotas or amounts as per government’s uniform
standards
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Konka Group Co., Ltd.
Interim Report 2019
Part III Business Summary
I Principal Activity of the Company in the Reporting Period
Is the Company subject to any industry-specific disclosure requirements?
No.
Currently, the Company consists of three major business divisions, namely, the consumer electronic
division, the supply chain management division and the environmental protection division, which
are detailed as follows:
(I) The Consumer Electronic Division
This division primarily comprises the multimedia sub-division, the white goods sub-division and
the mobile phone sub-division, with details as follows:
1. The Multimedia Sub-Division
The Company provides multimedia products and services, including colour TVs and Internet TV
services, for both domestic and overseas markets.
The domestic sales of the Company’s colour TVs are realized mainly through B2B
(Business-to-Business) and B2C (Business-to-Consumer), with its branch companies, business
departments and after-sales maintenance points operating across the country. And the Company
profits from the margins between the costs and the selling prices of its colour TVs.
As for selling its colour TVs abroad, the Company mainly relies on B2B. Its colour TVs are sold to
Asia Pacific, Middle East, Central & South America, East Europe, etc. And operating profit source
is also the differences between the costs and the selling prices of its colour TVs.
Internet business is based on the intelligent TV terminals sold by our company. It mainly carries out
three aspects of business. Firstly, it works with other Internet companies to provide end users with,
among other content, video, educational, music, medical and game content to generate earnings.
Secondly, it analyses user behaviours and offer certain free, interactive services to increase
attractiveness to users, promote its brand and stimulate desire for its hardware products. Finally, it is
trying to build an Internet TV platform with tens of millions of users, on which it will profit through
commercial and application distribution. This Internet TV business is key to the Company’s
Internet-oriented transformation and upgrade to a development model of “hardware + software” and
“smart TV + end users”.
2. The White Goods Sub-Division
The white goods produced by the Company mainly include refrigerators, washing machines, air
conditioners, freezers, etc., which are sold through B2B and B2C mainly to the domestic market.
And the Company profits from the margins between the costs and the selling prices of its white
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Konka Group Co., Ltd.
Interim Report 2019
goods.
3. The Mobile Phone Sub-Division
The mobile phones of the Company are sold to both the domestic and overseas markets. The
overseas sales mainly rely on B2B and the profit comes from the margins between the costs and the
selling prices of the mobile phones. As for the domestic sales of its mobile phones, the Company
relies on B2B and B2C, and profits mainly from the costs and the selling prices of its products and
slightly from the related value added services.
(II) The Supply Chain Management Division
In this business, relying on the advantages of the raw material procurement channels, distribution
systems and terminal networks of its consumer electronic business, the Company helps upstream
and downstream enterprises of the supply chain solve channel problems caused by asymmetric
information and improve efficiency. At present, this business runs on two models. In the
procurement and distribution supply chain model, the Company benefits from purchasing IC chips,
LCD screens, etc. from upstream suppliers and selling them to downstream customers through the
supply chain of its traditional core business. Supply chain services are another model. Capitalizing
on its years of experience in product quality control, outsourcing partner assessment and
international trade, the Company is able to help improve the client’s supply chain in efficiency and
cost through the provision of services including product quality control, warehousing and logistics,
customs clearance of imports and exports, documentation, tax handling, outsourcing partner
selection, etc. Profit comes from service charges. Additionally, the supply chain management
business can help the Company establish good relationships with its upstream suppliers and
downstream customers, and keep it informed of prices of the materials used in its production for
better cost control over its existing products.
(III) The Environmental Protection Division
Currently, this business focuses on water treatment, recycling of renewable resources and the new
material of glass ceramic. Water engineering PPP (Public-Private Partnership) projects are
undertaken under BOT (Build-Operate-Transfer) or EPC (Energy Performance Contracting) models.
Renewable resources are collected, sorted, processed, distributed and sold. And glass ceramic
products are developed, produced and marketed.
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
Major assets Main reason for significant changes
Equity assets No significant change
Fixed assets No significant change
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Konka Group Co., Ltd.
Interim Report 2019
Intangible assets No significant change
Construction in Construction in progress at the end of the Reporting Period rose 27.52% compared to the beginning
progress amount, primarily driven by new environmental projects during the Reporting Period.
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
Is the Company subject to any industry-specific disclosure requirements?
No.
The Company’s core competitiveness lies in its R&D ability, brand, marketing network and human
resources. It has developed a three-level R&D system of “Konka Research Institute-Multimedia
R&D Centre-specialized design institutes”, with close to 100 core technologies and approximately
2,000 R&D personnel. It also boasts a strong brand presence among consumers, as well as among
banks and other financing channels. Additionally, its domestic marketing and service network,
including more than 60 branch companies, over 200 offices and about 3,300 after-sales service
stations across the country, directly connect to around 3,000 retail terminals, along with a
well-established overseas marketing network. Meanwhile, it has high-level personnel with years of
rich management and industry experience, as well as a high-quality team with strong execution
capabilities.
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Interim Report 2019
Part IV Operating Performance Discussion and Analysis
I Overview
The Company carried on with its long-term development strategy of “Technology + Industry +
Park” during the Reporting Period, made progress in the following aspects:
1. The mixed-ownership reform progressed further, bringing more vitality to the subordinates.
During the Reporting Period, in order to further promote the mixed-ownership reform on the
subordinates and refine the asset allocation of the Company, Shenzhen Konka E-display Co., Ltd.
introduced Shenzhen MACC Investment Holding Co., Ltd., which owns upstream resources, as a
shareholder. In addition, the multimedia business of the Company kept enhancing its
competitiveness by taking reform measures such as promoting the mixed-ownership reform on the
sales subsidiaries and building an independent domestic service system.
2. Efforts were stepped up in technological R&D to enhance independent innovation. During the
Reporting Period, the Company proactively implemented the approach of “independent innovation
+ technology introduction”. R&D investment increased by 14.74% year-on-year in the first half of
this year.and built a three-level lab system (a comprehensive lab at the Headquarters level, key labs
at the level of cooperation between the Headquarters and the business departments, and
improvement labs at the business department level). More than a dozen of high-end personnel from
around the world were introduced to the system, and an intent was reached with research institutes
such as the Shenzhen Institutes of Advanced Technology of the Chinese Academy of Sciences and
the Harbin Institute of Technology, Shenzhen to jointly produce post-doctoral talent. During the
period, a number of programmes featuring independent innovation by the Company received
commendations, including the National Second Prize for Progress in Science and Technology for
the programme of the Digital TV Broadcast System and the Domestication of Core Chips, the Third
Prize for Progress in Science and Technology for the programme of the Research and
Industrialization of Key Quality Management Technologies for Food in Refrigerators by the China
Light Industry Council, as well as the inclusion of the programme of the 8K Equipment End-to-End
Signal Connection Key Technology and R&D of Terminal Display Products in the Key R&D
Programmes of Guangdong Province.
3. The Company continued to revitalize the Konka brand. During the Reporting Period, the
Company took proactive measures to revitalize its brand through the approach of “enhance the top
brand image, increase the brand’s popularity among young people, and upgrade the brand image by
delivering a good brand story”. The brand promotion investment increased by
20.08% year-on-year in the first half of this year.The Company tried to make its brand more
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attractive to young and international consumers by means of deep cooperation with
widely-recognized media and platforms, as well as with Lu Han, a top star.
4. The core businesses saw further improvement. As a result, it recorded operating revenue of
RMB26.036 billion for the period, up 47.72% year-on-year.During the Reporting Period, the
environmental business reported close to RMB4.863 billion in operating revenue with steady
progress made in water treatment, recycling of renewable resources and new materials; the white
goods business posted a 50% year-on-year growth in operating revenue thanks to measures such as
the integration of online and offline marketing and product upgrade in addition to the integration of
the “Konka + Frestec” brand resources; and the multimedia business proactively refined its product
mix, promoted mechanism reform and saw a markedly larger size of both the e-commerce and
overseas operations, where a great deal of effort was put;.
5. Technology park development moved on. According to the strategy of “Technology + Industry +
Park”, the Company kept pace with the government planning for industry structure adjustment and
transformation and upgrade, and proactively promoted its technology park business on the basis of
its unique market, industry and operational resources. Following the implementation of a number of
technology park projects in 2018, the Company moved on to plan for new parks in Haimen, Lankao,
Yantai, Chongqing and other cities in the Reporting Period.
II Analysis of Core Businesses
See “I Overview” above.
Year-on-year changes in key financial data:
Unit: RMB
Main reason for
H1 2019 H1 2018 Change (%)
change
Operating revenue 26,036,442,813.84 17,625,414,769.82 47.72% New inclusion of
environmental revenue
Cost of sales
and year-on-year
24,674,042,371.13 16,442,256,445.26 50.06%
increase in supply
chain trade revenue
Selling expense 1,067,945,914.36 1,103,181,074.51 -3.19%
New subsidiaries in the
Administrative expense 347,924,642.43 227,818,772.57 52.72%
Current Period
Private placements of
RMB3.5 billion
Finance costs 414,260,463.03 36,292,909.41 1041.44%
corporate bonds in the
Current Period
Disposal of assets,
Income tax expense 10,311,393.19 -17,446,049.13 159.10%
equity transfer and
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Interim Report 2019
receipt of government
subsidy by subsidiary
in the Current Period
R&D expense 157,210,338.94 137,008,896.76 14.74%
Net cash generated from/used in
-2,042,956,171.77 -1,838,158,705.86 -11.14%
operating activities
Net cash generated from/used in
-673,736,084.26 -343,094,565.17 -96.37%
investing activities
Net cash generated from/used in
3,992,809,825.25 2,880,630,318.57 38.61%
financing activities
Net increase in cash and cash
1,267,096,052.81 664,088,931.90 90.80%
equivalents
Material changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such changes.
Breakdown of core businesses:
Unit: RMB
YoY change in YoY change in
Gross profit YoY change in
Operating revenue Cost of sales operating revenue gross profit margin
margin cost of sales (%)
(%) (%)
By operating division
Supply chain
14,549,000,969.03 14,359,602,494.69 1.30% 45.36% 44.67% 0.47%
management
Electronics 6,292,729,392.42 5,545,179,041.15 11.88% -6.31% -4.58% -1.60%
Environmental
4,863,145,443.76 4,524,853,380.07 6.96% 6138.69% 8516.26% -25.67%
protection
By product category
Supply chain trade 14,549,000,969.03 14,359,602,494.69 1.30% 45.36% 44.67% 0.47%
Environmental
4,863,145,443.76 4,524,853,380.07 6.96% 6138.69% 8516.26% -25.67%
protection
Colour TVs 3,844,847,424.42 3,596,446,860.11 6.46% -22.53% -17.38% -5.84%
White goods 1,637,709,425.79 1,345,643,531.66 17.83% 51.03% 50.80% 0.12%
Mobile phones 205,434,258.43 201,988,459.74 1.68% 0.82% -1.18% 1.98%
Other 604,738,283.78 401,100,189.64 33.67% 29.93% 10.90% 11.38%
By operating segment
Overseas 16,274,631,867.43 15,833,504,916.19 2.71% 34.15% 32.58% 1.15%
Domestic 9,430,243,937.78 8,596,129,999.73 8.85% 101.84% 123.44% -8.81%
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III Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
Exceptional or
Amount As % of total profit Source/Reason
recurrent
Transfer of some equity interests
in Nanjing K-Star Technology
Park Operation and Management
Return on Co., Ltd., Shenzhen Konka
559,161,027.92 114.34% Exceptional
investment E-display Co., Ltd. and Chuzhou
Konka Technology & Industry
Development Co., Ltd. in the
Current Period
Gain/loss on
changes in fair -3,005,381.67 -0.61% Exceptional
value
Asset impairments -11,717,767.29 -2.40% Exceptional
Non-operating
22,269,442.09 4.55% Exceptional
income
Non-operating
3,469,741.51 0.71% Exceptional
expense
IV Analysis of Assets and Liabilities
1. Material Changes in Asset Composition
Unit: RMB
30 June 2019 30 June 2018
Change in
As % of As % Reason for material
percentage
Amount total Amount of total change
(%)
assets assets
Monetary
5,670,267,120.55 14.95% 3,911,820,154.60 13.90% 1.05%
capital
Accounts
5,468,498,179.21 14.41% 4,428,390,613.21 15.74% -1.33%
receivable
Inventories 5,810,235,773.06 15.31% 4,854,235,062.74 17.25% -1.94%
Investment
208,008,718.57 0.55% 213,639,992.84 0.76% -0.21%
property
Long-term 2,846,608,296.03 7.50% 2,187,539,867.00 7.78% -0.28%
17
Konka Group Co., Ltd.
Interim Report 2019
equity
investments
Fixed assets 2,228,083,633.72 5.87% 1,789,101,811.32 6.36% -0.49%
Construction in
2,776,018,241.52 7.32% 120,644,724.53 0.43% 6.89%
progress
Short-term
13,163,667,813.10 34.70% 10,397,447,703.32 36.96% -2.26%
borrowings
Long-term
1,284,700,000.00 3.39% 501,000,000.00 1.78% 1.61%
borrowings
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Cumulativ
Gain/loss on e Impairment Sold in
Beginning fair-value fair-value allowance for Purchased in the the
Item Ending amount
amount changes in the changes the Reporting Reporting Period Reporting
Reporting Period charged Period Period
to equity
Financial assets
1. Trading financial
assets (exclusive of -5,464,98
66,959,651.89 61,494,666.97
derivative financial 4.92
assets)
2. Derivative financial
assets
3. Investments in other
debt obligations
4. Investments in other
23,940,214.36 4,800,000.00 19,140,214.36
equity instruments
Subtotal of financial -5,464,98
90,899,866.25 4,800,000.00 80,634,881.33
assets 4.92
Investment property
Productive living assets
1,548,364,400.0
Other 548,230,000.00 1,000,134,400.00
0
-5,464,98 1,628,999,281.3
Total of the above 639,129,866.25 4,800,000.00 1,000,134,400.00
4.92 3
Financial liabilities 2,459,603.25 -2,459,60 -
18
Konka Group Co., Ltd.
Interim Report 2019
3.25
Significant changes to the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at the Period-End
Ending
Item carrying value Reason for restriction
（RMB’0,000）
Among them, RMB579,721,300 is all kinds of deposit that cannot be withdrawn at any time;
Monetary RMB315 million is a time deposit; RMB49,081,800 is the funds of the households under the
96,902.16
capital supervision of repayment; RMB19.8 million in deposits pledged as loans; RMB3.22 million is the
lawsuit frozen fund; RMB2.1985 million restricted due to other reasons.
As of 30 June 2019, the Company has pledged the notes receivable with the book value of
Notes
118,688.30 RMB1,186.883 million for issuing bank acceptance bills, letters of credit, letters of guarantee,
receivable
trade financing and other comprehensive financing services.
Fixed assets 36,202.64
For mortgage borrowings. Refer to 25. Short-term Borrowings and 34. Long-term Borrowings in
Intangible Note VI
13,805.57
assets
Long-term
34,941.65 For pledge loans. Refer to 34. Long-term Borrowings in Note VI
receivables
Total 300,540.32
V Investments Made
1. Total Investment Amount
√ Applicable □ Not applicable
Amount of the same period of last year
Amount of Reporting Period (RMB) Change (%)
(RMB)
1,156,259,360.00 198,399,656.00 482.79%
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
√ Applicable □ Not applicable
Unit: RMB
Inve Fixed Industr Input Accumul Capit Estima Accumul
stme assets y amount ative al Progr ted ative reason for Disclosure Disclosur
Item
nt investm involve in the actual resou ess revenu realized not date (if e index (if
meth ent or d Reportin input rces es revenues
19
Konka Group Co., Ltd.
Interim Report 2019
od not g Period amount as of the meeting any) any)
as of the period-en
period-en d the
d
schedule
and
expected
revenues
New plant Electro Self-
in Self- nic owne 11 March
Yes 0 0 0 / N/A
Dongguan build industr d 2017
city y funds
Yibin
Konka Electro Self-
16
Smart Self- nic 18,320,6 37,570,60 owne 10.7
Yes / N/A December
Terminal build industr 03.45 3.45 d 3%
2017
High-Tech y funds
Park
Chengdu
Electro Self-
Belt and
Self- nic owne 27 June
Road Yes 0 0 0 / N/A
build industr d 2018
Headquart
y funds
ers
Suining
Konka http://ww
Electro Self-
Electronic w.cninfo.c
Self- nic 16,578,9 16,578,95 owne 1.01 17 October
technolog Yes / N/A om.cn/ne
build industr 55.00 5.00 d % 2018
y w/index
y funds
Industrial
Park
Konka
(Chuzhou)
Smart
Electro Self-
Appliance 25
Self- nic 10,298,2 87,286,43 owne 7.74
s and Yes / N/A December
build industr 70.02 8.02 d %
Equipmen 2018
y funds
t
Industrial
Park
Haimen
Electro Self-
Headquart
Self- nic owne 30 April
er for Yes 0 0 0 / N/A
build industr d 2019
eastern
y funds
China
20
Konka Group Co., Ltd.
Interim Report 2019
Lankao
Environ
Environm
mental Self-
ental
Self- protecti 10,041,1 10,041,10 owne 3.36 21 May
Protection Yes / N/A
build on 00.00 0.00 d % 2019
Business
industr funds
Industrial
y
Park
Chongqin
g Konka
Semi-cond Electro Self-
uctor Self- nic owne 14 June
Yes 0 0 0 / N/A
Optoelectr build industr d 2019
onics y funds
Industrial
Park
55,238,9 151,477,0
Total -- -- -- -- -- -- -- --
28.47 96.47
Note: (1) Concerning the Dongguan city’s new plant, preparations are underway and the
government has put out the target land for bids.
(2) Yibin with respect to the smart terminal high-tech park, the land for the project has been
obtained and the main body is under construction.
(3) As for the Chengdu Belt and Road Headquarters, preparations are underway and the Company is
waiting for the local government to put out the project target land for bids.
(4) As for Suining Konka Electronic technology Industrial Park, the industrial estate of 156 acres
has been obtained and the Company is preparing necessary documents for construction.
(5) With respect to Konka (Chuzhou) Smart Appliances and Equipment Industrial Park, the land
used for the project has been obtained and the construction of supporting area for living is in
progress.
(6) Chongqing Konka Semi-conductor Optoelectronics Industrial Park, the project company has
been set up and the Company is waiting for the local government to put out the project target land
for bids.
(7) As for Lankao Environmental Protection Industrial Park, the land used for the project has been
obtained and is under the preparation for construction.
(8) As for Haimen Headquarters for Eastern China, preparations are underway and the Company is
waiting for the local government to put out the project target land for bids.
4. Financial Investments
(1) Securities Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
21
Konka Group Co., Ltd.
Interim Report 2019
(2) Investments in Derivative Financial Instruments
√ Applicable □ Not applicable
Funding source for derivative investment U.S. dollar financings
Legal matters involved (if applicable) None
Disclosure date of board announcement
24 May 2014
approving derivative investment (if any)
Disclosure date of shareholders’ meeting
announcement approving derivative investment 10 June 2014
(if any)
We engage in forward forex transactions to reduce the currency risk when
securing foreign-currency financing. This is very needed in our routine
Analysis of risks and control measures operation and is in compliance with the applicable laws and regulations. We
associated with derivative investments held in have formulated the Management Rules of Konka Group Co., Ltd. for
Reporting Period (including but not limited to Investment In Derivative Financial Instruments, making clear the relevant
market risk, liquidity risk, credit risk, consideration and approval procedure, risk control, etc.. We always sign
operational risk, legal risk, etc.) forward forex contracts with large banks such as the Bank of China, which
operate steadily and have good credit standing, which could help prevent loss
on forward forex contracts due to bank failure.
How we usually measure the fair value of derivative financial instruments:
Based on the forward forex sales and purchase contracts that are signed
Changes in market prices or fair value of between the Company and banks and have not expired in a Reporting Period,
derivative investments in Reporting Period we recognize the differences between the quotations for these contracts on the
(fair value analysis should include balance sheet dates provided by the banks and the contractual prices as
measurement method and related assumptions transactional financial assets or liabilities, and the profit/loss on fair value
and parameters) changes is recognized accordingly. Because these contracts have locked in
exchange rates, no changes will occur when comparing the fair value on
signing dates with that on delivery dates.
Material changes in accounting policies and
specific accounting principles adopted for
No material changes
derivative investments in Reporting Period
compared to last reporting period
It is considered necessary for the Company to lock in foreign-currency
financing costs through financial instruments, because it could effectively
Opinion of independent directors on derivative reduce the currency risk when securing foreign-currency financing. The
investments and risk control Company has formulated the internal control mechanism for investment in
derivative financial instruments, and the relevant risk control measures that the
Company has taken are considered effective.
Unit: RMB’0,000
Type of derivative Beginning Ending
Gain/loss in Ending investment amount as a percentage of
financial contractual contractual
Reporting Period the Company’s ending net asset value
instrument amount amount
22
Konka Group Co., Ltd.
Interim Report 2019
Forward forex
61,356.18 0 -1,329.13 0%
contract
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period
2. Sale of Major Equity Interests
√ Applicable □ Not applicable
Amoun
t Amoun
contrib t
uted by contrib
the uted by
equity the sale
Relatio Executed
interest to net
nship as Index
s to net Effect income Owners
Related betwee scheduled to
Selling income of the of the hip
Equity Pricing -party n or not, if Disclo discl
Counte Date of price of the sale on Compa fully
interest principl transact counter not, state sure osed
rparty sale (RMB’ Compa the ny as a transfer
s sold e ion or party reason date infor
0,000) ny Compa percent red or
not and the and matio
from ny age of not
Compa actions n
period- the
ny taken
beginni Compa
ng to ny’s
date of net
sale income
(RMB’ (%)
0,000)
Optimi
zing
15% of the
http:/
Shenzh equity Compa
/http:
en interest ny’s
//ww
MACC s of allocati
12 w.cni
Invest Shenzh 21 June on of Market Not
3,750 80.73 26.06% Not Yes Yes April nfo.c
ment en 2019 assets price related
2019 om.c
Holdin Konka and
n/ne
g Co., E-displ promot
w/ind
Ltd. ay Co., ing
ex
Ltd. assets’
liquidit
y
23
Konka Group Co., Ltd.
Interim Report 2019
51% of
Optimi
equity
zing
interest
the
Shenzh s of
Compa Under
en Chuzho
ny’s the
OCT u Not
allocati control
Capital Konka less 11
21 June 6352.0 on of of the
Invest Techno -124.49 18.26% than Yes Yes Yes June
2019 5 assets same
ment logy & estimat 2019
and actual
Manag Industr e value
promot controll
ement y
ing er
Co., Develo
assets’
Ltd. pment
liquidit
Co.,
y
Ltd.
VII Major Subsidiaries
√ Applicable □ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10%
effect on the Company’s net profit
Unit: RMB
Relationship
Principal
Registered Operating Operating
Name with the Total assets Net assets Net profit
activity
capital revenue profit
Company
Anhui Production and
Konka sale of 1,819,651,517. 4,227,651,025. 270,002,635.9
Subsidiary RMB140,000,000 625,467,790.74 229,344,247.51
Electronic multimedia 22 46 6
Co., Ltd. products
Export &
Hong Kong import of
2,723,237,995. 2,611,943,571.
Konka Co., Subsidiary electromechani HKD500,000 255,615,942.86 38,658,252.16 33,927,798.70
41 45
Ltd. cal and
electronics
Chain
Kingdom Trade, industry
Memory and science 1,807,859,455. 3,092,530,128.
Subsidiary USD1,500,000 96,584,709.27 23,901,186.85 19,958,624.47
Technologie and 83 86
s Co., technology
Limited
Econ Utilities-gas
Subsidiary RMB164,000,000 4,586,863,672. 864,561,098.06 828,589,882.95 79,361,771.06 70,765,359.97
Technology and water
26
24
Konka Group Co., Ltd.
Interim Report 2019
(Consolidat
ed)
Shenzhen
Konka
Electronic 3,315,897,785. 1,075,295,257. 3,643,261,471. 128,309,667.6
Electronics Subsidiary RMB1,000,000,000 129,398,806.11
industry 86 60 53 5
Technology
Co., Ltd.
Internet and
E2info Subsidiary related RMB20,174,070.81 386,593,479.15 164,732,854.78 105,379,023.82 57,022,559.67 48,711,754.74
services
Popularity and
Konka 2,064,552,715. 3,907,011,852. 117,564,885.4
Subsidiary application of RMB180,000,000 320,294,584.58 89,593,343.05
Huanjia 31 57 3
technologies
R&D,
Chongqing
production,
Konka
sales and 120,011,000.0
Technology Subsidiary RMB120,000,000 240,011,000.00 210,008,250.00 - 90,008,250.00
support service 0
Developme
provision of
nt Co., Ltd.
electronics
Suining
Development,
Konka
operation and
Industrial 114,674,655.6
Subsidiary management RMB200,000,000 415,248,735.67 286,005,991.75 - 86,005,991.75
Park 7
of industrial
Developme
park
nt Co., Ltd.
Subsidiaries obtained or disposed in the Reporting Period:
√ Applicable □ Not applicable
How subsidiary was obtained or Effects on overall operations and
Subsidiary
disposed in the Reporting Period operating performance
Shenzhen Konka Shengxing Industrial Set-up No material effects
Co., Ltd.
Shenzhen Youzhihui Technology Co., Set-up No material effects
Ltd.
Suining Konka Electronic Technological Set-up No material effects
Innovation Co., Ltd.
Shenzhen Xiaojia Technology Co., Ltd. Set-up No material effects
Yibin Konka Smart Technology Co., Set-up No material effects
Ltd.
Konka Huanjia (Henan) Environmental Set-up No material effects
Technology Co., Ltd.
25
Konka Group Co., Ltd.
Interim Report 2019
Laizhou Lairun Sewage Treatment Set-up No material effects
Co.,Ltd.
Funan Kangrun Water Co., Ltd. Set-up No material effects
Weifang Sihai Kangrun Investment Set-up No material effects
Operation Co., Ltd.
Hefei Yihe Electronic Co., Ltd. Set-up No material effects
Lushan Kangrun Environment Set-up No material effects
Management Co., Ltd.
Shenzhen Huanan Investment Set-up No material effects
Partnership (Limited Partnership)
Chongqing Konka Technology Set-up No material effects
Development Co., Ltd.
Dongguan Konka Investment Co., Ltd. Set-up No material effects
Rushan Yikang Shell Technology Cancellation
No material effects
Incubator Co., Ltd.
Yantai Huanhai Xinze Enterprise Cancellation
No material effects
Management Co., Ltd.
Transfer of 15% equity interests in The equity interests transfer generated
Shenzhen Konka E-display Co., Ltd.
Shenzhen Konka E-display Co., Ltd. great gains
Transfer of 51% equity interests in
Chuzhou Konka Technology & Industry The equity interests transfer generated
Chuzhou Konka Technology & Industry
Development Co., Ltd. great gains
Development Co., Ltd.
Information about major majority- and minority-owned subsidiaries:
None
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Performance Forecast for January-September 2019
Warning of forecast negative net profit for January-September 2018 or considerable YoY change
therein, as well as the reasons:
□ Applicable √ Not applicable
X Risks Facing the Company and Countermeasures
The Company’s consumer electronics business is seeing a decreased gross profit margin caused by
slow growth in demand and increasingly fierce competition in the color TV, white goods and mobile
phone markets. In response, the Company will adopt measures including adjusting the hardware
product mix, strengthening product competitiveness, enhancing professionalism in user operation,
improving Internet operations, and improving internal management.
As for the environmental protection business, the Company is a new comer in this sector. It still
needs some time for the newly acquired and invested enterprises to integrate with the Company in
operational and management mechanism, resource and corporate culture. And a great number of
26
Konka Group Co., Ltd.
Interim Report 2019
reserve projects in this business are making more requirements for human resources. Therefore, the
Company has started to work on the relevant operational mechanism, improve its monitoring of the
majority-owned subsidiaries’ operations, and bring in various resources so as to strengthen its
operational capabilities in this respect.
27
Konka Group Co., Ltd.
Interim Report 2019
Part V Significant Events
I Annual and Extraordinary General Meetings Convened during Reporting Period
1. General Meetings Convened during Reporting Period
Investor
Date of resolution Index to disclosed
Meeting Type participati Convened date
disclosure resolutions
on ratio
The 1st Extraordinary General http://www.cninfo
Extraordinary 24.31％ 20 February 2019 21 February 2019
Meeting of 2019 .com.cn/new/inde
2018 Annual General Meeting Annual 36.06％ 13 May 2019 14 May 2019 x
2. Extraordinary General Meetings Convened at Request of Preferred Shareholders with
Resumed Voting Rights
□ Applicable √ Not applicable
II Interim Dividend Plan
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
III Commitments of the Company’s Actual Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and Other Entities Fulfilled in Reporting Period or
Ongoing at Period-End
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IV Engagement and Disengagement of Independent Auditor
Are the interim financial statements audited?
□Yes √ No
The interim financial statements are unaudited.
V Explanations Given by Board of Directors and Supervisory Committee Regarding
Independent Auditor's “Modified Opinion” for Reporting Period
□ Applicable √ Not applicable
VI Explanations Given by Board of Directors Regarding Independent Auditor's “Modified
Opinion” for Last Year
□ Applicable √ Not applicable
VII Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
28
Konka Group Co., Ltd.
Interim Report 2019
VIII Legal Matters
Material lawsuits or arbitrations:
√ Applicable □ Not applicable
Involved Index to
General amount Decisions and Execution of Disclosure disclosed
Provision Progress
information (RMB’0,00 effects decisions date informati
0) on
As for the details, please refer to the Notes 2. Description of the Contingencies of the Commitments and the Contingencies of
Chapter XII of the Notes to the Financial Report.
Other legal matters:
□ Applicable √ Not applicable
IX Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X Credit Quality of the Company as well as Its Controlling Shareholder and Actual
Controller
□ Applicable √ Not applicable
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Major Related-Party Transactions
1. Continuing Related-Party Transactions
√ Applicable □ Not applicable
Obtai
nable
As %
Over mark
of total Approv Index
Type Spec the et
Relations Prici Tran Total value ed Meth to
of ific appr price Discl
hip with ng sacti value of all transacti od of disclos
Related party trans trans oved for osure
the princ on (RMB’ same-t on line settle ed
actio actio line same date
Company iple price 0,000) ype (RMB’0 ment inform
n n or -type
transact ,000) ation
not trans
ions
actio
ns
Purc Purc Neg http://w
Under the
Mar 30M
OCT Enterprises Co., hase otiat
same hase ww.cni
of ket 922.56 0.07% 2,000 Not Cash N/A arch
Ltd and its subsidiaries actual of ed nfo.co
com price 2019
controller mate price m.cn/ne
modi
29
Konka Group Co., Ltd.
Interim Report 2019
ties rials w/index
and and
servi servi
ces
ces
Sales
Sales
of
good of Neg
Under the
Mar
OCT Enterprises Co., same s and LCD otiat 1,852.
ket 0.13% 3,000 Not Cash N/A
Ltd and its subsidiaries actual servi and ed 09
price
controller ces servi price
ces
2,774.
Total -- -- 5000 -- -- -- --
65
Large-amount sales return in detail N/A
The Company has published the Forecasting Public Notice on Routine Related-party
Transaction for 2019 on Securities Times, Shanghai Securities News and China Securities
Give the actual situation in the Reporting Period (if
Journal as well as the Internet website designated by CSRC
any) where an estimate had been made for the total
http://http://www.cninfo.com.cn/new/index on 30 March 2019. In the Reporting Period, the
value of continuing related-party transactions by type
basis for pricing, transaction price, transaction amount and settlement methods of raw materials
to occur in the Reporting Period
purchased by the Company were basically in accordance with the forecast. The total amount
was RMB27.7465 million.
Reason for any significant difference between the
transaction price and the market reference price (if N/A
applicable)
2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
3. Related Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Related Parties
√Applicable □ Not applicable
Indicate by tick mark whether there were any credits and liabilities with related parties for
non-operating purposes.
√ Yes □ No
Credits receivable with related parties:
Whether Increased Recovere Interest
Beginning Ending
Related there is in the d in the in the
Related Forming balance Interest balance
relationshi occupatio Reporting Reporting Reportin
party reason (RMB’0,0 rate (RMB’0,
p n on Period Period g Period
00) 000)
non-opera (RMB’0,0 (RMB’0,0 (RMB’0,
30
Konka Group Co., Ltd.
Interim Report 2019
ting 00) 00) 000)
capital or
not
Yibin Subsidiar
OCT y of
Sanjiang controllin Borrowi
Not 10,000 0 0 5.70% 286.58 10,000
Real g ngs
Estate sharehold
Co., Ltd. er
Effects of credits with related parties on the
Company’s operating results and financial None
conditions
Liabilities payable with related parties:
Increased in Repaid in Interest in
Relat
the the the Ending
ed Formin Beginning
Related Reporting Reporting Interest Reporting balance
relati g balance
party Period Period rate Period (RMB’0,
onshi reason (RMB’0,000)
(RMB’0,00 (RMB’0, (RMB’0, 000)
p
0) 000) 000)
10,000.00 5.40% 271.50 10,000.00
2,000.00 5.60% 56.31 2,000.00
140,000.00 6.00% 3,080.00
140,000.00
48,000.00 5.00% 1,448.00 48,000.00
The
Contr 100,000.00 6.00% 3,016.67 100,000.00
OCT Compa
ollin
Enterpr ny 22,192.44 5.00% 295.90 22,192.44
g
ises applies
share
Co., entrust 27,656.00 5.00% 656.83 27,656.00
holde
Ltd. ed loan
r 50,000.00 39,192.44 5.00% 127.82 10,807.56
to it
50,000.00 5.00% 1,256.94 50,000.00
27,807.56 27,807.56 5.00% 520.39
17,000.00 17,000.00 5.00% 63.75
140,000.00 5.00% 941.11 140,000.00
10,000.00 5.40% 271.50 10,000.00
Effects of liabilities with related parties on The Company applies entrusted loan from OCT Enterprises
the Company’s operating results and Co., Ltd. which meets the needs of the Company's existing
financial conditions business development and reduces the financing cost.
5. Other Major Related-Party Transactions
√ Applicable □ Not applicable
31
Konka Group Co., Ltd.
Interim Report 2019
(1) Transfer of equity interests of Chuzhou Konka TID: The 11th Meeting of the 9th Board of
Directors of the Company held on 6 June 2019 approved the Proposal on Transfer of 51% of Equity
Interests of Chuzhou Konka Technology & Industry Development Co., Ltd. by Agreement and the
Company decided to transfer 51% equity interests of Chuzhou Konka Technology & Industry
Development Co., Ltd. to Shenzhen OCT Capital Investment Management Co., Ltd. via agreement
with the price of RMB63.5205 million. At present, the Company has received the share transfer
payment and the registration changing procedures of Chuzhou Konka Technology & Industry
Development Co., Ltd. has been completed.
Index to the public announcements about the said related-party transactions disclosed
Title of public announcement Disclosure date Disclosure website
Announcement on Transfer of 51% of
Equities of Chuzhou Konka Technology &
11 June 2019 http://http://www.cninfo.com.cn/new/index
Industry Development Co., Ltd. and
Related-party Transactions
XIII Occupation of the Company’s Capital by Controlling Shareholder or Its Related Parties
for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIV Major Contracts and Their Execution
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
√ Applicable □ Not applicable
No such cases in the Reporting Period.
During the reporting period, Kangjia R&D Building charged about 37.3187 million yuan in rent.
Projects that bring profits and losses to the company more than 10% of the total profits in the
reporting period
□ Applicable √ Not applicable
During the reporting period, there is no leasing project which brings profits and losses to the
company up to 10% of the total profits of the company during the reporting period.
2. Major guarantees
√ Applicable □ Not applicable
32
Konka Group Co., Ltd.
Interim Report 2019
(1) Guarantees
Unit: RMB'0,000
Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)
Guaran
Havin
Actual Term tee for
Disclosure date of Line of Actual occurrence g
guarante Type of of a
Obligor the guarantee line guarante date (date of expire
e guarantee guara related
announcement e agreement signing) d or
amount ntee party
not
or not
Jiangxi
Xinxin
Jianan 10,000 12 December 2016 10,000 Joint-liability Not Not
Engineerin
g Co., Ltd.
Jiangxi
Zhongyi
Decoration 10,000 12 December 2016 10,000 Joint-liability Not Not
Materials
Co., Ltd.
Jiangxi
Shanshi
Technologi
cal 10,000 12 December 2016 10,000 Joint-liability Not Not
Developm
ent Co.,
Ltd.
Total approved line for such guarantees in the Total actual amount of such guarantees in the
1,281 0
Reporting Period (A1) Reporting Period (A2)
Total approved line for such guarantees at the Total actual balance of such guarantees at the
208,781 30,000
end of the Reporting Period (A3) end of the Reporting Period (A4)
Guarantees provided between the Company and subsidiaries
Guaran
Havin
Actual Term tee for
Disclosure date of Line of Actual occurrence g
guarante Type of of a
Obligor the guarantee line guarante date (date of expire
e guarantee guara related
announcement e agreement signing) d or
amount ntee party
not
or not
Anhui 31 March 2017, 23 One
7 November 2018 5,800 Joint-liability Not Not
Tongchuan May 2018 and 19 90,000 year
g September 2018 9 May 2018 4,500 Joint-liability Not Not
33
Konka Group Co., Ltd.
Interim Report 2019
19 June 2018 3,000 Joint-liability Not Not
One
20 September 2018 5,500 Joint-liability Not Not
year
One
10 January 2019 3,000 Joint-liability Not Not
year
One
11 January 2019 10,000 Joint-liability Not Not
year
One
23 January 2019 5,000 Joint-liability Not Not
year
One
24 June 2019 3,000 Joint-liability Not Not
year
Anhui One
31 March 2017 110,000 6 December 2018 10,000 Joint-liability Not Not
Konka year
Konka One
31 March 2018 300,000 21 September 2018 20,000 Joint-liability Not Not
Factoring year
One
10 October 2018 3,135 Joint-liability Not Not
year
Econ
One
Technolog 19 September 2018 120,000 23 April 2019 2,000 Joint-liability Not Not
year
y
One
13 May 2019 5,000 Joint-liability Not Not
year
One
4 December 2018 10,000 Joint-liability Not Not
year
One
7 December 2018 10,000 Joint-liability Not Not
year
Jiangxi Two
31 October 2018 60,000 18 March 2019 11,961 Joint-liability Not Not
Konka years
One
28 February 2019 10,000 Joint-liability Not Not
year
One
27 June 2019 6,000 Joint-liability Not Not
year
One
21 November 2018 5,800 Joint-liability Not Not
year
XingDa 19 September 2018 One
20,000 19 April 2019 4,000 Joint-liability Not Not
HongYe and 30 March 2019 year
One
20 May 2019 1,000 Joint-liability Not Not
year
Electronics 19 September 2018 350,000 18 April 2019 58,000 Joint-liability One Not Not
34
Konka Group Co., Ltd.
Interim Report 2019
Technolog year
y
One
20 June 2019 5,000 Joint-liability Not Not
year
Anhui
Five
Electrical 19 September 2018 30,000 2 February 2019 13,000 Joint-liability Not Not
years
Appliance
Boluo
Two
Konka 31 March 2018 5,000 20 February 2019 2,500 Joint-liability Not Not
years
Precision
One
Hong 13 March 2019 15,868 Joint-liability Not Not
31 March 2017 and year
Kong 365,258
31 October 2018 One
Konka 7 August 2018 10,349 Joint-liability Not Not
year
Sichuan Three
31 March 2018 55,000 18 March 2019 4,000 Joint-liability Not Not
Konka years
Xinfeng
One
Microcryst 30 March 2019 25,000 19 June 2019 7,200 Joint-liability Not Not
year
alline
Nano
Three
Crystallize 30 March 2019 45,000 26 June 2019 10,000 Joint-liability Not Not
years
d Glass
Konka One
19 September 2018 20,000 24 June 2019 5,000 Joint-liability Not Not
Pengrun year
Total approved line for such guarantees in the Total actual amount of such guarantees in the
140,200 181,529
Reporting Period (B1) Reporting Period (B2)
Total approved line for such guarantees at the end Total actual balance of such guarantees at the
2,043,394 263,813
of the Reporting Period (B3) end of the Reporting Period (B4)
Guarantees provided between subsidiaries
Havin Guarant
Actual Term
Disclosure date of Line of Actual occurrence g ee for a
guarant Type of of
Obligor the guarantee line guarant date (date of expire related
ee guarantee guara
announcement ee agreement signing) d or party or
amount ntee
not not
Sichuan Seven
14,000 28 May 2018 14,000 Joint-liability Not Not
Konka years
Rushan Ten
29,000 29 December 2016 29,000 Joint-liability Not Not
Econ years
XingDa Two
1,000 13 November 2018 1,000 Joint-liability Not Not
HongYe years
35
Konka Group Co., Ltd.
Interim Report 2019
Total approved line for such guarantees in the Total actual amount of such guarantees in the
0 0
Reporting Period (C1) Reporting Period (C2)
Total approved line for such guarantees at the end Total actual balance of such guarantees at the
87,300 44,000
of the Reporting Period (C3) end of the Reporting Period (C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total guarantee line approved in the Reporting Total actual guarantee amount in the
141,481 181,529
Period (A1+B1+C1) Reporting Period (A2+B2+C2)
Total approved guarantee line at the end of the Total actual guarantee balance at the end of
2,339,475 337,813
Reporting Period (A3+B3+C3) the Reporting Period (A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the
41.00%
Company’s net assets
Of which:
Balance of guarantees provided for shareholders, actual controller and their related parties
0
(D)
Balance of debt guarantees provided directly or indirectly for obligors with an over 70%
337,813
debt/asset ratio (E)
Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) 0
Total of the three amounts above (D+E+F) 337,813
Joint responsibilities possibly borne in the Reporting Period for undue guarantees (if any) N/A
Provision of external guarantees in breach of the prescribed procedures (if any) N/A
Compound guarantees:
None
(2) Irregularities in Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Other Major Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XV Corporate Social Responsibility (CSR)
1. Material Environmental Issues
Is the Company or any of its subsidiaries is identified as a major polluter by the environmental
protection authorities?
Yes
Number Excessi
Name of Distribution
Name of Way of of Discharge Discharge standards Total Approved total ve
major of discharge
polluter discharge discharge concentration implemented discharge discharge dischar
pollutants outlets
outlets ge
36
Konka Group Co., Ltd.
Interim Report 2019
Total discharge
448,500
Pollution PH6-9；copper
tons/year;
sources of ≤0.5mg/L；
pollutant COD
waste water: Main COD≤80mg/L； Electroplating water
Discharge of 24.891 tons/year;
PH、copper、 discharge ammonia nitrogen pollutant discharge 44.8milli
stationary ammonia nitroge
COD、 1 outlet of the ≤15mg/L；total standard on None
pollution n 3.982
ammonia nitr waste water nitrogen DB44/1597-2015 tons/year
sources tons/year; total
ogen、total station ≤20mg/L； total Table 1
nitrogen 9.373
nitrogen、tota phosphorus
tons/year; total
l phosphorus ≤1mg/L
phosphorus
0.439 tons/year
waste sulfuric acid Emission Standard
2,986,560,000
gas pollutants fume≤30mg/m3； for Electroplating
standard
: sulfuric acid nitrogen Pollutants
XingDa cube/year (note:
fume, oxide≤200mg/m3； GB21900-2008 Air
HongYe the total
hydrogen hydrogen Emission Limits
discharge is not
chloride, Three on the chloride≤30mg/m3 Table 5, Guangdong
stated in the
formaldehyde roof of one ； Air Pollutant
latest version of
,hydrogen plant , ten TVOC≤90mg/m3； Emission Standard 2,986,56
Discharge of national
cyanide, on the roof benzene≤12mg/m3 DB44/27-2001 the 0,000
stationary discharge permit
nitrogen 14 of two ； Second Level standard None
pollution in 2018; two
oxide, plants and methylbenzen≤40 Standard in the cube/yea
sources exhaust towers
ammonia, be one on the mg/m3； Second Period, r
were added in
nzene, roof of the dimethylbenzene≤ Emission standard
2018; calculated
methylbenzen canteen 70mg/m3；tin and for Odor Pollutants
based on air
e, TVOC, tin its (GB 14554-1993)
volume in
and its compounds≤8.5mg Table 2 Standard,
environmental
compounds, P /m3；PM（dust） Emission standard of
impact
M (dust), oil ≤120mg/m3；oil cooking fume
assessment)
fume fume≤2mg/m3 (GB18483-2001)
(1) The construction of anti-pollution facilities and its operation situation
All production equipment of Guangdong Xingda Hongye Electronics Co., Ltd. has been set up with
supporting environmental protection facilities according to the requirements of environmental
impact assessment. The discharge of wastewater, waste gas and noise as well as the disposal of all
solid wastes in the Company all met the standards during the Reporting Period.
The sewage treatment centre of Guangdong Xingda Hongye Electronics Co., Ltd. with an
investment of about RMB15 million was formally put into production in June 2007, and the
treatment capacity of the sewage treatment facility was 2,566 tons/day. After technical improvement
and expansion, the capacity increased to 2,900 tons/day with the treatment process remaining
unchanged. Currently, the sewage treatment facilities are functioning well and the main pollutant
37
Konka Group Co., Ltd.
Interim Report 2019
discharge meets the discharge standards and environmental assessment standards. The pollutants are
discharged to Fushachong after being treated at the self-built sewage treatment station.
(2) Environmental impact assessment and other environmental protection administrative licenses of
the construction project
Guangdong Xingda Hongye Electronics Co., Ltd. obtained the approval from Zhongshan
Environmental Protection Bureau (ZHJ [2004] No. 61) for the operations and construction here in
2004. Subsequently, it obtained the documents of ZHJD [2008] No. 06250 and ZHJD [2010] No.
04469 respectively in 2008 and 2010. After the operations of its original project, Guangdong
Xingda Hongye Electronics Co., Ltd. passed the two phases of acceptance assessment, including the
Phase I acceptance assessment in 2008 (HY [2008] No. 02) and the Phase II acceptance assessment
in 2012 (ZHYBG [2012] No. 000092).
In December 2012, Guangdong Xingda Hongye Electronics Co., Ltd. commissioned Zhongshan
Research Institute of Environmental Protection Science to conduct the assessment of environmental
impact for the technical improvement and expansion project of Guangdong Xingda Hongye
Electronics Co., Ltd. On December 31, 2012, it obtained the approval document titled Reply to the
Report on the Environmental Impact of the Technical Improvement and Expansion Project of
Guangdong Xingda Hongye Electronics Co., Ltd. (ZHJS (2012) No. 115) from Zhongshan
Environmental Protection Bureau. The document granted the approval for addition of the
production of six-layer PCB, eight-layer PCB and above and HDI boards and for reduction of the
production of single-sided PCB. After the technical improvement and expansion, the total
production capacity of single-sided PCB would be 200,000 m2/year, of double-sided PCB would be
250,000 m2/year, of four-layer PCB would be 300,000 m2/year, of six-layer PCB would be 200,000
m2/year, of eight-layer PCB and above would be 150,000 m2/year and of HDI boards would be
100,000 m2/year. In the project, while the original plating equipment and processes remained
unchanged, the brown oxide process was added to the original production process; all the increased
plating capacity would be outsourced. The technical improvement and expansion project was
commenced in 2013 and completed in January 2018. The commissioning was carried out from
February 10, 2018 to July 8, 2018. The construction of the project complied with the requirements
for environmental impact assessment and met the criteria for the acceptance of environmental
protection for the completion of construction projects. In 2018, the Company obtained the state
sewage permit, certificate No.: 91442000768405216J001P.
(3) Contingency plan for emergent environmental incident
In strict accordance with requirements of laws, regulations and relevant documents, such as Law of
the People’s Republic of China on Emergency Response and Interim Measures on Environmental
Emergency Response Plan, Guangdong Xingda Hongye Electronics Co., Ltd. has established risk
prevention measures and emergency response plans, kept its emergency equipment in a normal state,
38
Konka Group Co., Ltd.
Interim Report 2019
formulated the Contingency Plan for Emergent Environmental Incident, and put on records at
Zhongshan Environmental Protection Bureau, Guangdong Province, record No.: 4420002017044M.
In addition, the Company conducts a drill of major environmental pollution incident on its factory
to enhance its emergency response capabilities for emergent environmental pollution incidents.
Furthermore, Guangdong Xingda Hongye Electronics Co., Ltd. has built an emergency pool (which
is the comprehensive water tank in the sewage treatment station covering an area of 800m3) and set
up a fire pool (500m3 and located on Floor 1 of Factory Building No. 2), which serve as temporary
storage pools for exterior drainage or fire drainage to eradicate accidental discharge of wastewater
in the case of failed operation of the sewage transmission pipeline or fire accident due to outage or
other special circumstances. The sewage transmission pipeline has been equipped with
anti-corrosion and cathodic protection using anti-corrosion pipes and carbon steel pipes. Pursuant to
the new discharge standards, the related discharge pipeline has been modified and the production
department has been required to discharge strictly in accordance with discharge standards to cut the
costs of wastewater treatment. Different types of wastewater are normally and properly treated
through fine shunting. Personnel have been specially arranged to manage the chemical liquid
warehouse and exert reasonable control and requirements over the liquid discharge by the plant and
timely transportation of the liquid by suppliers; emergency tools such as protective masks, boots
and immiscible pumps have been equipped;
(4) Environmental self-monitoring plan
According to the requirements of the Environmental Protection Administration, Guangdong Xingda
Hongye Electronics Co., Ltd. attaches great importance to environmental monitoring management.
Thus, pursuant to the Measures for Self-Monitoring and Information Disclosure of National Key
Monitored Enterprises, the Report on the Environmental Impact of the Technical Improvement and
Expansion Project of Guangdong Xingda Hongye Electronics Co., Ltd. and the reply opinions for
environmental impact assessment, the Company has formulated the Environmental Self-Monitoring
Plan and reported to the municipal environmental protection bureau for approval and record. It
implements online monitoring for the PH, COD and ammonia nitrogen pollutants discharged in
wastewater through real-time monitoring and an automatic frequency of every two hours, entrusts
the qualified third-party online monitoring equipment operation and maintenance institute to carry
out periodic maintenance on automatic monitoring equipment and monitoring data networking
equipment, and entrusts the qualified third-party monitoring unit to carry out the “three wastes”
project monitoring. All self-monitoring plan results will be reported and disclosed on public
platforms on a periodic basis.
In the case of normal production, the results will be updated on a daily basis, with online
monitoring data disclosed in real time and manual monitoring data disclosed on the next day after
completion. In the case of public holidays, the operation monitoring data for the holiday period will
39
Konka Group Co., Ltd.
Interim Report 2019
be disclosed on the first working day after the holiday. Items monitored on a monthly basis will be
disclosed by the 25th day of the month. Items inspected on a quarterly basis will be disclosed by the
25th day of the last month of the quarter. The annual self-monitoring report for the previous year
will be disclosed at the end of January each year. In the case of shutdown with days off, the number
of days off will be indicated in the information bar and related proofs will be submitted to the
monitoring center of the municipal environmental bureau for record.
The results are disclosed on Guangdong Province Key Pollution Source Regulatory Information
Platform and on National Pollution Source Monitoring Information Management and Sharing
Platform for public monitoring.
(5) Other environmental information that should be disclosed
The environmental protection investment of Guangdong Xingda Hongye Electronics Co., Ltd. for
H1 of 2019 was approximately RMB5.8 million, mainly used as the environmental engineering
investment (approximately RMB0.8 million) and the operation of environmental protection
equipment (approximately RMB5 million).
(6) Other Environmental Information
According to the examination by the Company, the Company and its other holding subsidiaries are
not key pollutant units. All have faithfully implemented the laws and regulations related to
environmental protection, such as Environmental Protection Law of the People's Republic of China,
Water Pollution Prevention and Control Law of the People's Republic of China, Law of the People's
Republic of China on the Prevention and Control of Atmospheric Pollution, Law of the People's
Republic of China on Prevention and Control of Pollution From Environmental Noise, Law of the
People's Republic of China on the Prevention and Control of Environmental Pollution by Solid
Waste in the daily production and operation, without being punished for violations of laws and
regulations during the Reporting Period.
2. Measures Taken for Targeted Poverty Alleviation
(1) Targeted poverty alleviation plans
In accordance with the guiding principles of the state on the development of precision poverty
alleviation, the Company has proactively carried out critical work on poverty alleviation and
engaged in the targeted support in Sansui County and Tianzhu County in Guizhou Province.
(2) Summary of the Related Work Done in the Reporting Period
During the Reporting Period, the Company took active steps to help Sansui County to carry out the
marketing work in respect of Sansui ducks, including product sales and package planning, which
effectively drove the sales of local subsidiary agricultural products. In the H1 of 2019, the Company
has donated office supplies of approximately RMB378,000, including television sets and books to
the two counties.
40
Konka Group Co., Ltd.
Interim Report 2019
(3) Results of Targeted Measures
Measurement
Indicator Quantity/Progress
unit
1. General results —— ——
Including: materials translation Ten thousand 37.8
2. Itemized results —— ——
9 Other items —— ——
9.2 Amount of input Ten thousand 37.8
(4) Subsequent Plans
To fully perform its duties of targeted poverty alleviation, the Company will do a good job for the
work on public brand establishment of no more than RMB1.58 million which will be used for the
package planning and advertisement promotion of Sansui ducks of Sansui County.
XVI. Other Significant Events
√ Applicable □ Not applicable
(1) Private placement of corporate bonds, asset securitization of commercial factoring and asset
securitization of accounts receivable: Currently, the private placement of corporate bonds of RMB5
billion has been issued; the asset securitization of commercial factoring and asset securitization of
accounts receivable are in moving forward.
(2) Nanjing Kangxingyun Headquarters Base Project has completed the transfer of 17% equity of
the project company in March 2019.
(3) The Company’s application for a private A-share placement was accepted for processing by the
CSRC on 20 May 2019, and the Company has disclosed its reply to the CSRC’s questions regarding
the application. Following the receipt of the Notification of the CSRC on the Discontinuation of the
Processing of an Administrative Permit Application on 29 July 2019, the Company has recently
applied to the CSRC for the resumption of the processing. It is uncertain whether both the
processing resumption and the private A-share placement will be approved by the CSRC or not.
(4) Disclosure index of significant information
Link on
Announce http://www
Date Title Page on newspaper
ment No. .cninfo.com
.cn
Announcement on the Progress of
4 January Securities TimesB29, Shanghai Securities
2019-01 Offering Guarantees to the http://http://
2019 News 64 etc.
Majority-owned Subsidiary www.cninfo
Announcement on the Progress of .com.cn/ne
15 January Securities TimesB13, Shanghai Securities w/index
2019-02 Offering Guarantees to the
2019 News 48 etc.
wholly-owned subsidiary
41
Konka Group Co., Ltd.
Interim Report 2019
Announcement on the Result of Private
16 January Securities TimesB32, Shanghai Securities
2019-03 Placement of Corporate Bonds in 2019
2019 News 33 etc.
(Phase I)
Announcement on the Progress of
18 January Securities TimesB36, Shanghai Securities
2019-04 Offering Guarantees to the
2019 News 76 etc.
Majority-owned Subsidiary
Announcement on the Progress of
25 January Securities TimesB29, Shanghai Securities
2019-05 Offering Guarantees to the
2019 News 36 etc.
wholly-owned subsidiary
26 January Announcement on the 2018 Earnings Securities TimesB20, Shanghai Securities
2019-06
2019 Forecasts News 32 etc.
Announcement on the Resolution of the
2 February Securities TimesB36, Shanghai Securities
2019-07 4th Meeting of the 9th Board of
2019 News 33 etc.
Directors
2 February Notice on Convening the 1st Securities TimesB36, Shanghai Securities
2019-08
2019 Extraordinary General Meeting of 2019 News 33 etc.
Announcement on External Financial
2 February Securities TimesB36, Shanghai Securities
2019-09 Aids Generated from Planned Transfer
2019 News 33 etc.
of Partial Equity of Subsidiaries
Announcement on the Progress of
12 February Securities TimesB25, Shanghai Securities
2019-10 Offering Guarantees to the
2019 News 85 etc.
Majority-owned Subsidiary
15 February Announcement on Accumulative New Securities TimesB12, Shanghai Securities
2019-11
2019 Borrowings News 76 etc.
Announcement on the Resolution of the
2 February Securities TimesB42, Shanghai Securities
2019-12 1st Extraordinary General Meeting of
2019 News 40 etc.
2019
Announcement on the Progress of
14 March Securities TimesB28, Shanghai Securities
2019-13 Offering Guarantees to the
2019 News 56 etc.
Majority-owned Subsidiary
Announcement on the Progress of
19 March Securities TimesB92, Shanghai Securities
2019-14 Offering Guarantees to the
2019 News 92 etc.
Majority-owned Subsidiary
Announcement on Volunteer
19 March Securities TimesB92, Shanghai Securities
2019-15 Information Disclosure of Pre-winning
2019 News 92 etc.
the Bid for Project
19 March Announcement on Abnormal Volatility Securities TimesB116, Shanghai Securities
2019-16
2019 of Stock Trading News 40 etc.
42
Konka Group Co., Ltd.
Interim Report 2019
19 March Indicative Announcement on Planning Securities TimesB116, Shanghai Securities
2019-17
2019 of Private Placement of Shares News 40 etc.
Announcement on Offering Overseas
21 March Securities TimesB29, Shanghai Securities
2019-18 Loan under Domestic Guarantee to
2019 News 48 etc.
Foreign Wholly-owned Subsidiary
Announcement on Volunteer
28 March Securities TimesB33, Shanghai Securities
2019-19 Information Disclosure of Pre-winning
2019 News 40 etc.
the Bid for Project
Announcement on Information
29 March Securities TimesB128, Shanghai Securities
2019-20 Disclosure of Voluntariness of
2019 News 428 etc.
Receiving Letter of Acceptance
30 March Announcement on the Abstract of the Securities TimesB41, Shanghai Securities
2019-21
2019 2018 Annual Report News 529 etc.
30 March Announcement on the 2018 Annual
2019-22
2019 Report
Announcement on the Resolution of the
30 March Securities TimesB41, Shanghai Securities
2019-23 7th Meeting of the 9th Board of
2019 News 529 etc.
Directors
Announcement on the Resolution of the
30 March Securities TimesB41, Shanghai Securities
2019-24 8th Meeting of the 9th Supervisory
2019 News 529 etc.
Committee
30 March Securities TimesB42, Shanghai Securities
2019-25 Announcement on External Guarantees
2019 News 529 etc.
30 March Announcement on the Changes of Part Securities TimesB42, Shanghai Securities
2019-26
2019 of Accounting Policies News 530 etc.
30 March Announcement on the Expectation of Securities TimesB43, Shanghai Securities
2019-27
2019 the 2019 Routine Related Transaction News 530 etc.
Announcement on Involving Number
30 March of Subscriptors after Penetration of Securities TimesB42, Shanghai Securities
2019-28
2019 Subscriptors for Private Placement of News 530 etc.
A-shares
Announcement on Risk Warnings of
30 March Dilution of Immediate Returns by Securities TimesB42, Shanghai Securities
2019-29
2019 Private Placement of A-shares and News 530 etc.
Compensation Measures
Announcement on Involving
30 March Securities TimesB42, Shanghai Securities
2019-30 Related-party Transactions for Private
2019 News 530 etc.
Placement of A-shares
43
Konka Group Co., Ltd.
Interim Report 2019
Explanation on No Need to Preparation
30 March Securities TimesB43, Shanghai Securities
2019-31 of Special Report on Use of Previous
2019 News 530 etc.
Raised Funds
Announcement on Conditional Share
30 March Securities TimesB43, Shanghai Securities
2019-32 Subscription Agreement Signed by the
2019 News 530 etc.
Company with the Subscriptor
Announcement on Particulars about
Supervision Measures Taken by and
30 March Securities TimesB43, Shanghai Securities
2019-33 Punishments Made by Securities
2019 News 530 etc.
Supervision Departments for the Five
Years
Announcement on Volunteer
Securities TimesB45, Shanghai Securities
2019-34 8 April 2019 Information Disclosure of Project
News 60 etc.
Pre-concluded
12 April Announcement on the 2019 First Securities TimesB48, Shanghai Securities
2019-35
2019 Quarter Earnings Forecasts News 40 etc.
Announcement on Planned Listing to
12 April Securities TimesB48, Shanghai Securities
2019-36 Transfer Partial Shares of Konka
2019 News 40 etc.
E-display
Announcement on the Resolution of the
20 April Securities TimesB64, Shanghai Securities
2019-36 8th Meeting of the 9th Board of
2019 News 84 etc.
Directors
20 April Notice on Convening the 2018 Annual Securities TimesB64, Shanghai Securities
2019-37
2019 General Meeting News 84 etc.
Announcement on the Progress of
27 April Securities TimesB116, Shanghai Securities
2019-38 Offering Guarantees to the
2019 News 108 etc.
Majority-owned Subsidiary
Announcement on the Progress of
30 April Securities TimesB233, Shanghai Securities
2019-39 Offering Guarantees to the
2019 News 616 etc.
Majority-owned Subsidiary
30 April Securities TimesB233, Shanghai Securities
2019-40 2019 First Quarter Report
2019 News 616 etc.
30 April Securities TimesB233, Shanghai Securities
2019-41 Text of the 2019 First Quarter Report
2019 News 616 etc.
Announcement on the Resolution of the
30 April Securities TimesB233, Shanghai Securities
2019-42 9th Meeting of the 9th Board of
2019 News 616 etc.
Directors
30 April Announcement on Establishment of Securities TimesB233, Shanghai Securities
2019-43
2019 Haimen Headquarters for Eastern News 616 etc.
44
Konka Group Co., Ltd.
Interim Report 2019
China through Investment
Announcement on Information
Securities TimesB60, Shanghai Securities
2019-44 7 May 2019 Disclosure of Voluntariness of
News 60 etc.
Receiving Letter of Acceptance
Announcement on Progress of Planned
Securities TimesB60, Shanghai Securities
2019-45 7 May 2019 Listing to Transfer Shares of Konka
News 60 etc.
E-display
14 May Announcement on the Resolution of the Securities TimesB85, Shanghai Securities
2019-46
2019 2018 Annual General Meeting News 85 etc.
Announcement on the Progress of
17 May Securities TimesB85, Shanghai Securities
2019-47 Offering Guarantees to the
2019 News 85 etc.
Majority-owned Subsidiary
Announcement on the Resolution of the
21 May Securities TimesB64, Shanghai Securities
2019-48 10th Meeting of the 9th Board of
2019 News 60 etc.
Directors
Announcement on Establishment of
21 May Securities TimesB64, Shanghai Securities
2019-49 Environmental Protection Business
2019 News 60 etc.
Industrial Park through Investment
Announcement on CSRC’s Acceptance
23 May Securities TimesB27, Shanghai Securities
2019-50 for Application of Private Placement of
2019 News 44 etc.
Shares
Announcement on Volunteer
28 May Securities TimesB88, Shanghai Securities
2019-51 Information Disclosure of Pre-winning
2019 News 69 etc.
the Bid for Project
Announcement on Information
Securities TimesB71, Shanghai Securities
2019-52 4 June 2019 Disclosure of Voluntariness of
News 48 etc.
Receiving Letter of Acceptance
Announcement on Result of Private
Securities TimesB44, Shanghai Securities
2019-53 5 June 2019 Placement of Corporate Bonds in 2019
News 44 etc.
(Phase II)
Announcement on the Resolution of the
11 June Securities TimesB42, Shanghai Securities
2019-54 11th Meeting of the 9th Board of
2019 News 49 etc.
Directors
Announcement on Transfer of 51%
Equity Interests of Chuzhou Konka
11 June Securities TimesB42, Shanghai Securities
2019-55 Technology & Industry Development
2019 News 49 etc.
Co., Ltd. and Related-party
Transactions
2019-56 11 June Announcement on the Progress of Securities TimesB42, Shanghai Securities
45
Konka Group Co., Ltd.
Interim Report 2019
2019 Offering Guarantees to the Subsidiary News 49 etc.
Announcement on Cooperation
14 June Securities TimesB4, Shanghai Securities News
2019-57 Agreement Signed with Bishan
2019 120 etc.
Government of Chongqing Province
18 June Announcement on Listing to Transfer Securities TimesB61, Shanghai Securities
2019-58
2019 Partial Shares of Konka E-display News 33 etc.
Announcement on the Progress of
25 June Securities TimesB40, Shanghai Securities
2019-59 Offering Guarantees to the
2019 News 52 etc.
Majority-owned Subsidiary
Announcement on Receipt of CSRC’s
25 June Notice on the First Feedback for Securities TimesB40, Shanghai Securities
2019-60
2019 Review of Administrative Permission News 52 etc.
Projects
Announcement on Completion of
25 June Registration Changing Procedures for Securities TimesB43, Shanghai Securities
2019-61
2019 Transfer of Partial Equity of Konka News 52 etc.
E-display
Announcement on Completion of
Registration Changing Procedures for
25 June Securities TimesB43, Shanghai Securities
2019-62 Transfer of 51% Equity Interests of
2019 News 52 etc.
Chuzhou Konka Technology &
Industry Development Co., Ltd.
25 June Announcement on Pending Lawsuits Securities TimesB102, Shanghai Securities
2019-63
2019 and Arbitrations with large amount News 76 etc.
27 June Announcement on the Implementation Securities TimesB91, Shanghai Securities
2019-64
2019 of Dividend Plan of 2018 News 29 etc.
28 June Announcement on the Progress of Securities TimesB128, Shanghai Securities
2019-65
2019 Offering Guarantees to the Subsidiary News 36 etc.
Announcement on Wholly-owned
29 June Securities Times B95, Shanghai Securities
2019-66 Subsidiary’ receiving of the
2019 News 80 etc.
Government Subsidies
XVII. Significant Events of Subsidiaries
□ Applicable √ Not applicable
46
Konka Group Co., Ltd.
Interim Report 2019
Part VI Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares
as Shares as
divide dividend
Percenta New nd converte Percent
Shares Other Subtotal Shares
ge (%) issues conver d from age (%)
ted capital
from reserves
profit
1. Restricted shares 19,500 0.00% 19,500 0.00%
1.3 Shares held by other
19,500 0.00% 19,500 0.00%
domestic investors
Among which: Shares
held by domestic legal
persons
Shares held
by domestic natural 19,500 0.00% 19,500 0.00%
persons
2. Unrestricted shares 2,407,925,908 100% 2,407,925,908 100%
2.1 RMB-denominated 66.31
1,596,574,300 66.31% 1,596,574,300
ordinary shares %
2.2 Domestically listed 33.69
811,351,608 33.69% 811,351,608
foreign shares %
3. Total shares 2,407,945,408 100% 2,407,945,408 100%
Reasons for share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchases:
□ Applicable √ Not applicable
47
Konka Group Co., Ltd.
Interim Report 2019
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to
the Company’s ordinary shareholders and other financial indicators of the prior year and the prior
accounting period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to
be disclosed:
□ Applicable√ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III Shareholders and Their Holdings at Period-End
Unit: share
Number of ordinary Number of preferred shareholders with resumed voting rights (if
92,812 0
shareholders any) (see note 8)
5% or greater ordinary shareholders or top 10 ordinary shareholders
Shares in
Restric pledge or
Shareh Increase/dec
ted Unrestricted frozen
Nature of olding Ordinary rease in
Name of shareholder ordinar ordinary S
shareholder percent shares Reporting
y shares h
age Period Status
shares ar
es
OVERSEAS CHINESE
State-owned
TOWN ENTERPRISES 21.75% 523,746,932 0 0 523,746,932
legal person
CO., LTD
CITIC SECURITIES
Foreign
BROKERAGE (HONG 7.56% 182,100,202 0 0 182,100,202
legal person
KONG) CO., LTD.
HOLY TIME GROUP Foreign
2.33% 56,139,100 0 0 56,139,100
LIMITED legal person
GUOYUAN
Foreign
SECURITIES BROKER 2.25% 54,203,779 0 0 54,203,779
legal person
(HK) CO., LTD.
Foreign
GAOLING FUND,L.P. 2.19% 52,801,250 0 0 52,801,250
legal person
48
Konka Group Co., Ltd.
Interim Report 2019
ZHANG XIAOYU Domestic
natural 1.13% 27,283,178 3,447,900 0 27,283,178
person
HONG KONG
SECURITIES Foreign
1.13% 27,256,732 17,445,071 0 27,256,732
CLEARING COMPANY legal person
LTD.
CHINA MERCHANTS
State-owned
SECURITIES (HK) 0.95% 22,879,324 404,200 0 22,879,324
legal person
LIMITED
NAM NGAI Foreign
natural 0.93% 22,453,440 741,300 0 22,453,440
person
NATIONAL SOCIAL
SECURITY FUND- Other 0.88% 21,099,537 4,000,000 0 21,099,537
PORTFOLIO 118
Strategic investor or general legal person
becoming top-10 ordinary shareholder due to N/A
rights issue (if any) (see note 3)
Jialong Investment Limited, a wholly-funded subsidiary of the Company’s
first majority shareholder Overseas Chinese Town Enterprises Co. (“OCT
Group” for short), holds 180,001,110 and 18,360,000 ordinary shares in the
Related or acting-in-concert parties among Company respectively through CITIC Securities Brokerage (Hong Kong) Co.,
shareholders above Ltd. and China Merchants Securities (HK) Limited. Jialong Investment
Limited and Overseas Chinese Town Enterprises Co. are parties acting in
concert. Other than that, it is unknown whether the other shareholders are
related parties or acting-in-concert parties or not.
Top 10 unrestricted ordinary shareholders
Unrestricted ordinary Type of shares
Name of shareholder
shares Type Shares
RMB-denominate
OVERSEAS CHINESE TOWN ENTERPRISES CO., LTD 523,746,932 523,746,932
d ordinary stock
Domestically
CITIC SECURITIES BROKERAGE (HONG KONG) CO.,
182,100,202 listed foreign 182,100,202
LTD.
stock
Domestically
HOLY TIME GROUP LIMITED 56,139,100 listed foreign 56,139,100
stock
Domestically
GUOYUAN SECURITIES BROKER (HK) CO., LTD. 54,203,779 54,203,779
listed foreign
49
Konka Group Co., Ltd.
Interim Report 2019
stock
Domestically
GAOLING FUND,L.P. 52,801,250 listed foreign 52,801,250
stock
ZHANG XIAOYU RMB-denominate
27,283,178 27,283,178
d ordinary stock
HONG KONG SECURITIES CLEARING COMPANY LTD. RMB-denominate
27,256,732 27,256,732
d ordinary stock
CHINA MERCHANTS SECURITIES (HK) LIMITED Domestically
22,879,324 listed foreign 22,879,324
stock
NAM NGAI Domestically
22,453,440 listed foreign 22,453,440
stock
NATIONAL SOCIAL SECURITY FUND-PORTFOLIO 118 RMB-denominate
21,099,537 21,099,537
d ordinary stock
Jialong Investment Limited, a wholly-funded subsidiary of the Company’s first
majority shareholder Overseas Chinese Town Enterprises Co. (“OCT Group” for
Related or acting-in-concert parties
short), holds 180,001,110 and 18,360,000 common shares in the Company
among top 10 unrestricted ordinary
respectively through CITIC Securities Brokerage (Hong Kong) Co., Ltd. and China
shareholders, as well as between top 10
Merchants Securities (HK) Limited. Jialong Investment Limited and Overseas
unrestricted ordinary shareholders and
Chinese Town Enterprises Co. are parties acting in concert. Other than that, it is
top 10 ordinary shareholders
unknown whether the other shareholders are related parties or acting-in-concert parties
or not.
Top 10 ordinary shareholders
Zhang Xiaoyu holds 27,283,178 A-shares in the Company through her account of
conducting securities margin trading (if
collateral securities for margin trading in Huaxi Securities Co., Ltd.
any) (see note 4)
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted
ordinary shareholders of the Company conducted any promissory repo during the Reporting Period.
□ Yea √ No
No such cases in the Reporting Period.
IV Change of Controlling Shareholder or Actual Controller in Reporting Period
Change of the controlling shareholder in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Change of the actual controller in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
50
Konka Group Co., Ltd.
Interim Report 2019
Part VII Preferred Shares
□ Applicable √ Not applicable
51
Konka Group Co., Ltd.
Interim Report 2019
Part VIII Directors, Supervisors, Senior Management and Staff
I Change in Shareholdings of Directors, Supervisors and Senior Management
□ Applicable √ Not applicable
There was no change in shareholding of Directors, Supervisors, Senior Management Staffs and
Employees, for details, please refer to 2018 Annual Report.
II Change of Directors, Supervisors and Senior Management
□ Applicable √ Not applicable
There was no change in Directors, Supervisors, Senior Management Staffs and Employees, for
details, please refer to 2018 Annual Report.
52
Konka Group Co., Ltd. Interim Report 2019
Part IX Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were
outstanding before the date of this Report’s approval or were due but could not be redeemed in full?
Such information is disclosed as below:
I. Basic Information of Corporate Bonds
Bonds
balance Coupo Way of
Name Abbr. Code Release date Due date
(RMB’0,0 n rate redemption
00)
Interests
shall be paid
Privately placed corporate every year
bonds in 2019 of Konka 19 Konka 14 January 14 January and the
114418 100,000 5.00%
Group Co., Ltd (Tranche I) 01 2019 2022 principals
(Variety I) shall be
repaid when
expired.
Interests
shall be paid
Privately placed corporate every year
bonds in 2019 of Konka 19 Konka 14 January 14 January and the
114423 150,000 5.00%
Group Co., Ltd (Tranche I) 02 2019 2022 principals
(Variety II) shall be
repaid when
expired.
Interests
shall be paid
Privately placed corporate every year
bonds in 2019 of Konka 19 Konka and the
114488 3 June 2019 3 June 2022 50,000 4.50%
Group Co., Ltd (Tranche II) 03 principals
(Variety I) shall be
repaid when
expired.
Interests
Privately placed corporate
shall be paid
bonds in 2019 of Konka 19 Konka
114489 3 June 2019 3 June 2022 50,000 4.70% every year
Group Co., Ltd (Tranche II) 04
and the
(Variety II)
principals
53
Konka Group Co., Ltd. Interim Report 2019
shall be
repaid when
expired.
Interests
shall be paid
Privately placed corporate every year
bonds in 2019 of Konka 19 Konka and the
114523 22 July 2019 22 July 2022 80,000 4.53%
Group Co., Ltd (Tranche 05 principals
III) (Variety I) shall be
repaid when
expired.
Interests
shall be paid
Privately placed corporate every year
bonds in 2019 of Konka 19 Konka and the
114524 22 July 2019 22 July 2022 70,000 4.70%
Group Co., Ltd (Tranche 06 principals
III) (Variety II) shall be
repaid when
expired.
Listed or transferred trading place of the Company
Shenzhen Stock Exchange
bonds
“19 Konka 01”, ” 19 Konka 02”, “19 Konka 03”, “19 Konka 04”, “19
Konka 05” and “19 Konka 06” were placed privately to qualified
Appropriate arrangement of the investors institutional investors (not exceeding 200) meeting the requirements of
Management method for Investors Eligibility in Bonds Market of
Shenzhen Stock Exchange.
During the Reporting Period, “19 Konka 01”, ” 19 Konka 02”, “19
Interest payment during the Reporting Period Konka 03”, “19 Konka 04”, “19 Konka 05” and “19 Konka 06” the first
interest payment date did not arrive.
Execution of the relevant regulations during the
Reporting Period such as the affiliated option clause
1. Option for issuer to adjust coupon rate; 2. Put-backs option for
of the issuers or investors, special clauses such as the
investors; there was no implementation of relevant clauses.
exchangeable regulations of the Company bonds (if
applicable)
II. List of the Bond Trustee and the Rating Organization
Bond trustee:
Room 601,
Industrial No. 35 Pu Hang, and
Office Contact Contact 010-
Name Securities Jinshifang Zhang
address person number 50911203
Co., Ltd Street, Huifang
Xicheng
54
Konka Group Co., Ltd. Interim Report 2019
District,
Beijing
Rating organization executed the tracking rating of the corporate bonds of the Reporting Period:
Office No.2 Jianwai Street, Chaoyang District,
Name United Ratings Co., Ltd.
address Beijing
Alternation reasons, execution process and influences on the investors’ interests etc. if there was alternation
of the bond trustees and the credit rating agencies engaged by the Company during the Reporting Period (if No
applicable)
III. List of the Usage of the Raised Funds of the Corporate Bonds
The Company has used the raised funds and disclosed related information in a
timely, authentic, accurate and complete manner strictly in accordance with the terms
in the prospectus for aforesaid bonds, related provisions and requirements in the
List of the usage of the raised funds and Measures for Issuance and Trading of Corporate Bonds, CSRC Releases No. 2
the execution process of the Company Guideline for the Supervision of Listed Companies-Administration of Funds Raised
bonds by Listed Companies and Applicable Supervision Requirements, the Stock Listing
Rules of the Shenzhen Stock Exchange and the Rules of the Shenzhen Stock
Exchange for Stock Listing on ChiNext. It has not engaged in any violations in
respect of the use and management of the raised funds.
Ending balance (RMB’0,000) 0
Operating situation of the raised funds The operation was in good condition without any violations for relevant regulations
special account or capital supervision agreement
Whether the usage of the raised funds
met with the usage, using plan and other Yes
agreements committed on the prospectus
IV. Rating Situation of the Corporate Bonds Information
In May 2019, United Credit Ratings Co., Ltd. made the tracking rating for the entity and relevant
bonds (including “19 Konka 01” and “19 Konka 02”) of the Company. The entity of the Company
was rated as Grade AA invariably and as “Stable” for its rating prospect; the bonds “19 Konka 01”
and “19 Konka 02” issued by Konka Group Co., Ltd. were rated as Grade AAA invariably for their
credit and as “Stable” for their rating prospect. The related rating report has been published on the
website of Shenzhen Stock Exchange in May 2019.
V. Credit-adding Mechanism, Repayment Plan and Other Repayment Guarantee Measures of
the Corporate Bonds
OCT Group provided the unconditional and irrevocable joint liability guarantee in full amount for
the bonds “19 Konka 01”, ” 19 Konka 02”, “19 Konka 03”, “19 Konka 04”, “19 Konka 05” and “19
Konka 06” in the Reporting Period.
VI. Convene Situation of the Bonds Holders Meeting during the Reporting Period
No such cases in the Reporting Period.
55
Konka Group Co., Ltd. Interim Report 2019
VII. List of the Duty Execution of the Bonds Trustee during the Reporting Period
During the Reporting Period, Industrial Securities Co., Ltd., the Company’s bond trustee manager,
proactively performed its trusteeship, continued to be concerned with the Company’s routine
production and operation and financial conditions, and endeavored to maintain the legitimate rights
and interests of the bond holder strictly in accordance with related laws, regulations, the
Management Measures for the Issue and Trading of Corporate Bonds, the Prospectus and the
Agreement for the Bond Trusteeship Management.
VIII. The Major Accounting Data and the Financial Indicators of the Recent 2 Years of the
Company up the Period-end
Unit: RMB’0,000
Change rate of the same
Item 2019 2018
period
Current ratio 109.37% 96.33% 13.04%
Asset-liability ratio 74.08% 71.35% 2.73%
Quick ratio 83.83% 72.13% 11.70%
Reporting Period Same period of last year YoY Change
Times interest earned of 2.75 2.39 15.06%
EBITDA
Loan repayment rate 100.00% 100.00% 0.00%
Interest coverage 100.00% 100.00% 0.00%
Main reason of the above accounting data and the financial indicators with the YoY change
exceeded 30%
□ Applicable √ Not applicable
Pending
IX. Overdue Liabilities
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X. List of the Interest Payment of Other Bonds and Debt Financing Instruments during the
Reporting Period
No such cases in the Reporting Period.
XI. List of the Acquired Bank Credit Lines, Usage and the Repayment of the Bank Loans
As of the end of the Reporting Period, the Company acquired bank credit lines of
RMB15,906,000,000 and used RMB9,458,000,000. All bank loans can be repaid on schedule
without any overdue situations.
56
Konka Group Co., Ltd. Interim Report 2019
XII. List of the Execution of the Agreements or the Commitments Related to the Company
Bonds Raising Specification during the Reporting Period
During the Reporting Period, the Company strictly observed the agreements and performed the
commitments related to the Company Bonds raising specification.
XIII. Significant Events Occurring during the Reporting Period
During the Reporting Period, the Company has timely disclosed current announcements regarding
significant events occurring the website of Shenzhen Stock Exchange (http://www.szse.cn/) and
cninfo (http://www.cninfo.com.cn/new/index). As of the disclosure date of this Report, related
significant events have no subsequent progress yet.
XIV. Whether there Was Guarantor of the Corporate Bonds
√ Yes □ No
Whether the guarantor of the corporate bonds was legal person or other organizations
57
Konka Group Co., Ltd. Interim Report 2019
Part X Financial Statements
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor?
□Yes √ No
They are unaudited by such an auditor.
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Konka Group Co., Ltd.
30 June 2019
Unit: RMB
Item 30 June 2019 31 December 2018
Current assets:
Monetary capital 5,670,267,120.55 4,348,144,129.53
Settlement reserve
Interbank loans granted
Trading financial assets 61,494,666.97
Financial assets at fair value through profit or loss 5,464,984.92
Derivative financial assets
Notes receivable 2,002,435,052.51 3,329,711,954.15
Accounts receivable 5,468,498,179.21 4,458,053,586.42
Financing backed by accounts receivable 107,299,247.91
Prepayments 2,948,687,941.58 1,036,979,167.56
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract reserve
Other receivables 990,966,330.41 410,804,180.50
Including: Interest receivable 2,754,697.90 4,059,682.40
Dividends receivable 547,848.62 547,848.62
Financial assets purchased under resale agreements
Inventories 5,810,235,773.06 5,487,605,227.05
Contract assets
Assets classified as held for sale
58
Konka Group Co., Ltd. Interim Report 2019
Current portion of non-current assets 53,237,851.30 22,318,208.13
Other current assets 1,766,535,360.02 2,744,216,141.98
Total current assets 24,879,657,523.52 21,843,297,580.24
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Available-for-sale financial assets 633,664,881.33
Investments in other debt obligations
Held-to-maturity investments
Long-term receivables 419,923,711.72 390,793,038.05
Long-term equity investments 2,846,608,296.03 2,637,780,825.53
Investments in other equity instruments 19,140,214.36
Other non-current financial assets 1,548,364,400.00
Investment property 208,008,718.57 210,824,355.72
Fixed assets 2,228,083,633.72 2,410,226,495.81
Construction in progress 2,776,018,241.52 2,176,871,530.80
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 798,320,837.28 737,776,686.34
R&D expense
Goodwill 855,691,423.75 855,691,423.75
Long-term prepaid expense 101,104,614.34 111,223,426.77
Deferred income tax assets 810,334,747.43 639,433,954.30
Other non-current assets 448,155,098.47 337,477,690.39
Total non-current assets 13,059,753,937.19 11,141,764,308.79
Total assets 37,939,411,460.71 32,985,061,889.03
Current liabilities:
Short-term borrowings 13,163,667,813.10 13,884,132,931.63
Borrowings from central bank
Interbank loans obtained
Trading financial liabilities
Financial liabilities at fair value through profit or loss 2,459,603.25
Derivative financial liabilities
Notes payable 1,109,481,840.84 862,330,689.47
Accounts payable 4,701,864,444.09 4,362,723,050.33
59
Konka Group Co., Ltd. Interim Report 2019
Advances from customers 894,789,245.88 723,227,529.20
Financial assets sold under repurchase agreements
Customer deposits and interbank deposits
Payables for acting trading of securities
Payables for underwriting of securities
Payroll payable 218,974,626.78 376,506,567.71
Taxes payable 278,624,661.17 288,004,192.44
Other payables 2,367,030,105.41 2,024,657,277.74
Including: Interest payable 99,998,242.67 27,230,631.41
Dividends payable 240,794,540.80
Handling charges and commissions payable
Reinsurance payables
Contract liabilities
Liabilities directly associated with assets classified as
held for sale
Current portion of non-current liabilities 14,095,773.04 151,792,404.13
Other current liabilities
Total current liabilities 22,748,528,510.31 22,675,834,245.90
Non-current liabilities:
Insurance contract reserve
Long-term borrowings 1,284,700,000.00 445,000,000.00
Bonds payable 3,489,910,901.50
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 223,522,236.53 128,374,597.41
Long-term payroll payable 5,670,450.62 8,792,614.98
Provisions 1,597,591.51 21,772,898.37
Deferred income 207,308,469.89 112,899,128.24
Deferred income tax liabilities 144,462,027.47 141,020,093.34
Other non-current liabilities
Total non-current liabilities 5,357,171,677.52 857,859,332.34
Total liabilities 28,105,700,187.83 23,533,693,578.24
Owners’ equity:
Share capital 2,407,945,408.00 2,407,945,408.00
Other equity instruments
Including: Preferred shares
60
Konka Group Co., Ltd. Interim Report 2019
Perpetual bonds
Capital reserves 237,761,961.98 208,356,624.21
Less: Treasury stock
Other comprehensive income -14,198,105.77 -10,538,219.08
Specific reserve 71,737.08
Surplus reserves 1,227,564,785.19 1,227,564,785.19
General reserve
Retained earnings 4,380,496,417.52 4,271,408,192.21
Total equity attributable to owners of the Company as
8,239,642,204.00 8,104,736,790.53
the parent
Non-controlling interests 1,594,069,068.88 1,346,631,520.26
Total owners’ equity 9,833,711,272.88 9,451,368,310.79
Total liabilities and owners’ equity 37,939,411,460.71 32,985,061,889.03
Legal representative: Liu Fengxi Chief Financial Officer: Li Chunlei Head of financial department: Feng Junxiu
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2019 31 December 2018
Current assets:
Monetary capital 2,867,121,320.63 2,124,335,536.69
Trading financial assets 61,494,666.97
Financial assets at fair value through profit or loss 5,464,984.92
Derivative financial assets
Notes receivable 1,588,216,743.04 2,181,466,683.90
Accounts receivable 8,266,712,064.66 7,427,246,429.42
Financings backed by accounts receivable
Prepayments 1,304,083,759.55 1,019,335,571.49
Other receivables 7,868,891,877.59 6,667,463,126.57
Including: Interest receivable 2,276,507.84 5,769,663.24
Dividends receivable
Inventories 301,955,343.50 254,225,716.41
Contract assets
Assets classified as held for sale
Current portion of non-current assets
Other current assets 117,570,671.40 77,249,216.99
Total current assets 22,376,046,447.34 19,756,787,266.39
Non-current assets:
Investments in debt obligations
61
Konka Group Co., Ltd. Interim Report 2019
Available-for-sale financial assets 326,164,881.33
Investments in other debt obligations
Held-to-maturity investments
Long-term receivables
Long-term equity investments 6,719,375,166.23 6,182,962,034.71
Investments in other equity instruments 14,440,214.36
Other non-current financial assets 250,230,000.00
Investment property 208,008,718.57 210,824,355.72
Fixed assets 451,987,170.56 462,721,018.30
Construction in progress 161,343,003.34 157,356,696.30
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 80,790,288.02 83,593,959.11
R&D expense
Goodwill
Long-term prepaid expense 70,335,791.97 80,388,949.97
Deferred income tax assets 691,575,647.64 516,879,201.66
Other non-current assets 20,000,000.00 20,000,000.00
Total non-current assets 8,668,086,000.69 8,040,891,097.10
Total assets 31,044,132,448.03 27,797,678,363.49
Current liabilities:
Short-term borrowings 8,723,585,987.34 8,179,564,987.70
Trading financial liabilities
Financial liabilities at fair value through profit or loss 2,459,603.25
Derivative financial liabilities
Notes payable 2,067,605,961.65 3,513,157,955.43
Accounts payable 7,459,462,338.28 6,477,055,955.65
Advances from customers 314,025,058.94 306,650,717.69
Contract liabilities
Payroll payable 68,511,959.60 146,199,496.44
Taxes payable 7,095,620.80 10,913,871.30
Other payables 2,476,885,218.67 2,011,494,378.65
Including: Interest payable 97,385,685.87 24,158,666.48
Dividends payable 240,794,540.80
Liabilities directly associated with assets classified as held
for sale
62
Konka Group Co., Ltd. Interim Report 2019
Current portion of non-current liabilities 40,000,000.00
Other current liabilities
Total current liabilities 21,117,172,145.28 20,687,496,966.11
Non-current liabilities:
Long-term borrowings 344,000,000.00 245,000,000.00
Bonds payable 3,489,910,901.50
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Provisions
Deferred income 206,591.51 206,591.51
Deferred income tax liabilities 68,697,991.43 75,705,476.93
Other non-current liabilities 751,345.42
Total non-current liabilities
Total liabilities 3,902,815,484.44 321,663,413.86
Owners’ equity: 25,019,987,629.72 21,009,160,379.97
Share capital
Other equity instruments 2,407,945,408.00 2,407,945,408.00
Including: Preferred shares
Perpetual bonds
Capital reserves
Less: Treasury stock 114,018,066.79 114,018,066.79
Other comprehensive income
Specific reserve -1,182,217.31 -1,182,217.31
Surplus reserves
General reserve 1,227,564,785.19 1,227,564,785.19
Retained earnings 2,275,798,775.64 3,040,171,940.85
Total owners’ equity 6,024,144,818.31 6,788,517,983.52
Total liabilities and owners’ equity 31,044,132,448.03 27,797,678,363.49
3. Consolidated Income Statement
Unit: RMB
Item H1 2019 H1 2018
1. Revenue 26,036,442,813.84 17,625,414,769.82
Including: Operating revenue 26,036,442,813.84 17,625,414,769.82
Interest income
63
Konka Group Co., Ltd. Interim Report 2019
Premium income
Handling charge and commission income
2. Costs and expenses 26,698,772,822.16 17,974,204,673.13
Including: Cost of sales 24,674,042,371.13 16,442,256,445.26
Interest expense
Handling charge and commission expense
Surrenders
Net claims paid
Net amount provided as insurance contract
reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surcharges 37,389,092.27 27,646,574.62
Selling expense 1,067,945,914.36 1,103,181,074.51
Administrative expense 347,924,642.43 227,818,772.57
R&D expense 157,210,338.94 137,008,896.76
Finance costs 414,260,463.03 36,292,909.41
Including: Interest expense 529,683,836.52 138,646,255.45
Interest income 118,673,531.77 49,719,529.94
Add: Other income 343,884,971.36 123,026,283.50
Return on investment (“-” for loss) 559,161,027.92 531,758,571.71
Including: Share of profit or loss of joint ventures and
8,541,274.56 6,075,182.59
associates
Income from the derecognition of financial assets at
amortized cost (“-” for loss)
Foreign exchange gain (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) -3,005,381.67 59,855,412.48
Credit impairment loss (“-” for loss) -49,476,223.76
Asset impairment loss (“-” for loss) -11,717,767.29 -59,552,100.41
Asset disposal income (“-” for loss) 293,705,840.64 63,722,105.38
3. Operating profit (“-” for loss) 470,222,458.88 370,020,369.35
Add: Non-operating income 22,269,442.09 27,217,492.97
Less: Non-operating expense 3,469,741.51 5,951,749.57
4. Profit before tax (“-” for loss) 489,022,159.46 391,286,112.75
Less: Income tax expense 10,311,393.19 -17,446,049.13
5. Net profit (“-” for net loss) 478,710,766.27 408,732,161.88
5.1 By operating continuity
64
Konka Group Co., Ltd. Interim Report 2019
5.1.1 Net profit from continuing operations (“-” for net
loss)
5.1.2 Net profit from discontinued operations (“-” for net
loss)
5.2 By ownership
5.2.1 Net profit attributable to owners of the Company as
352,767,020.73 341,793,039.03
the parent
5.2.1 Net profit attributable to non-controlling interests 125,943,745.54 66,939,122.85
6. Other comprehensive income, net of tax -3,108,112.33 -4,400,958.71
Attributable to owners of the Company as the parent -3,659,886.69 -4,851,840.74
6.1 Items that will not be reclassified to profit or loss -4,800,000.00
6.1.1 Changes caused by remeasurements on defined
benefit pension schemes
6.1.2 Other comprehensive income that will not be
reclassified to profit or loss under the equity method
6.1.3 Changes in the fair value of investments in other
-4,800,000.00
equity instruments
6.1.4 Changes in the fair value of the company’s credit
risks
6.1.5 Other
6.2 Items that will be reclassified to profit or loss 1,140,113.31 -4,851,840.74
6.2.1 Other comprehensive income that will be
reclassified to profit or loss under the equity method
6.2.2 Changes in the fair value of investments in other
debt obligations
6.2.3 Gain/Loss on changes in the fair value of
-31,342.08
available-for-sale financial assets
6.2.4 Other comprehensive income arising from the
reclassification of financial assets
6.2.5 Gain/Loss arising from the reclassification of
held-to-maturity investments to available-for-sale financial
assets
6.2.6 Allowance for credit impairments in investments
in other debt obligations
6.2.7 Reserve for cash flow hedges
6.2.8 Differences arising from the translation of foreign
1,140,113.31 -4,820,498.66
currency-denominated financial statements
6.2.9 Other
Attributable to non-controlling interests 551,774.36 450,882.03
7. Total comprehensive income 475,602,653.94 404,331,203.17
Attributable to owners of the Company as the parent 349,107,134.04 336,941,198.29
Attributable to non-controlling interests 126,495,519.90 67,390,004.88
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Konka Group Co., Ltd. Interim Report 2019
8. Earnings per share
8.1 Basic earnings per share 0.1465 0.1419
8.2 Diluted earnings per share 0.1465 0.1419
Legal representative: Liu Fengxi Chief Financial Officer: Li Chunlei Head of financial department: Feng Junxiu
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2019 H1 2018
1. Operating revenue 5,368,021,710.40 6,556,568,515.30
Less: Cost of sales 5,264,149,493.15 5,958,024,932.71
Taxes and surcharges 3,050,245.87 10,295,805.36
Selling expense 602,937,451.39 796,586,717.96
Administrative expense 116,641,903.32 125,914,620.99
R&D expense 21,884,250.47 101,846,025.64
Finance costs 263,815,281.41 146,845,768.60
Including: Interest expense 484,646,778.75 288,018,824.66
Interest income 225,398,798.03 113,064,005.13
Add: Other income 25,883,962.58 42,392,110.12
Return on investment (“-” for loss) 185,975,738.88 1,159,447,278.28
Including: Share of profit or loss of joint ventures and
3,928,528.71 13,240,183.30
associates
Income from the derecognition of financial assets at
amortized cost (“-” for loss)
Net gain on exposure hedges (“-” for loss)
Gain on changes in fair value (“-” for loss) -3,005,381.67 59,855,412.48
Credit impairment loss (“-” for loss) -6,660,947.01
Asset impairment loss (“-” for loss) -3,172,282.22 -36,873,991.62
Asset disposal income (“-” for loss) 200.00 18,949.32
2. Operating profit (“-” for loss) -705,435,624.65 641,894,402.62
Add: Non-operating income 1,522,859.81 13,874,505.45
Less: Non-operating expense 957,357.54 5,440,364.14
3. Profit before tax (“-” for loss) -704,870,122.38 650,328,543.93
Less: Income tax expense -175,447,791.41 -86,913,171.05
4. Net profit (“-” for net loss) -529,422,330.97 737,241,714.98
4.1 Net profit from continuing operations (“-” for net loss) -529,422,330.97 737,241,714.98
4.2 Net profit from discontinued operations (“-” for net loss)
5. Other comprehensive income, net of tax 324,021.02
5.1 Items that will not be reclassified to profit or loss
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Konka Group Co., Ltd. Interim Report 2019
5.1.1 Changes caused by remeasurements on defined
benefit pension schemes
5.1.2 Other comprehensive income that will not be
reclassified to profit or loss under the equity method
5.1.3 Changes in the fair value of investments in other
equity instruments
5.1.4 Changes in the fair value of the company’s credit
risks
5.1.5 Other
5.2 Items that will be reclassified to profit or loss 324,021.02
5.2.1 Other comprehensive income that will be
reclassified to profit or loss under the equity method
5.2.2 Changes in the fair value of investments in other
debt obligations
5.2.3 Gain/Loss on changes in the fair value of
available-for-sale financial assets
5.2.4 Other comprehensive income arising from the
reclassification of financial assets
5.2.5 Gain/Loss arising from the reclassification of
held-to-maturity investments to available-for-sale financial
assets
5.2.6 Allowance for credit impairments in investments in
other debt obligations
5.2.7 Reserve for cash flow hedges
5.2.8 Differences arising from the translation of foreign
324,021.02
currency-denominated financial statements
5.2.9 Other
6. Total comprehensive income -529,422,330.97 737,565,736.00
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
5. Consolidated Cash Flow Statement
Item H1 2019 H1 2018
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of
25,473,835,784.74 17,548,318,013.29
services
Net increase in customer deposits and interbank
deposits
Net increase in borrowings from central bank
Net increase in loans from other financial institutions
Premiums received on original insurance contracts
67
Konka Group Co., Ltd. Interim Report 2019
Net proceeds from reinsurance
Net increase in deposits and investments of policy
holders
Interest, handling charges and commissions received
Net increase in interbank loans obtained
Net increase in proceeds from repurchase
transactions
Net proceeds for acting trading of securities
Tax rebates 507,670,463.23 234,219,656.63
Cash generated from other operating activities 2,148,795,820.05 1,477,259,476.38
Subtotal of cash generated from operating activities 28,130,302,068.02 19,259,797,146.30
Payments for commodities and services 26,800,524,727.57 16,457,966,672.41
Net increase in loans and advances to customers
Net increase in deposits in central bank and in
interbank loans granted
Payments for claims on original insurance contracts
Net increase in financial assets held for trading
Net increase in interbank loans granted
Interest, handling charges and commissions paid
Policy dividends paid
Cash paid to and for employees 926,887,184.41 830,723,675.14
Taxes paid 453,909,943.55 1,461,811,434.09
Cash used in other operating activities 1,991,936,384.26 2,347,454,070.52
Subtotal of cash used in operating activities 30,173,258,239.79 21,097,955,852.16
Net cash generated from/used in operating activities -2,042,956,171.77 -1,838,158,705.86
2. Cash flows from investing activities:
Proceeds from disinvestment 221,738,210.00 42,903,231.61
Return on investment 73,227,388.55 72,250,837.30
Net proceeds from the disposal of fixed assets,
100,441,951.60 1,682,604.46
intangible assets and other long-lived assets
Net proceeds from the disposal of subsidiaries and
32,675,173.25 42,511,059.22
other business units
Cash generated from other investing activities 1,396,866,878.42 942,900,000.00
Subtotal of cash generated from investing activities 1,824,949,601.82 1,102,247,732.59
Payments for the acquisition of fixed assets,
642,392,906.08 140,086,476.23
intangible assets and other long-lived assets
Payments for investments 1,156,259,360.00 198,399,656.00
Net increase in pledged loans granted
Net payments for the acquisition of subsidiaries and 232,126,165.53
68
Konka Group Co., Ltd. Interim Report 2019
other business units
Cash used in other investing activities 700,033,420.00 874,730,000.00
Subtotal of cash used in investing activities 2,498,685,686.08 1,445,342,297.76
Net cash generated from/used in investing activities -673,736,084.26 -343,094,565.17
3. Cash flows from financing activities:
Capital contributions received 165,523,493.96 115,980,594.60
Including: Capital contributions by non-controlling
165,523,493.96 115,980,594.60
interests to subsidiaries
Borrowings obtained 11,564,151,964.42 6,725,691,416.47
Net proceeds from issuance of bonds 3,487,750,000.00
Cash generated from other financing activities 350,346,627.50 1,023,076.93
Subtotal of cash generated from financing activities 15,567,772,085.88 6,842,695,088.00
Repayments of borrowings 11,054,191,049.91 3,377,017,426.30
Payments for interest and dividends 255,889,282.00 562,435,220.65
Including: Dividends paid by subsidiaries to
non-controlling interests
Cash used in other financing activities 264,881,928.72 22,612,122.48
Subtotal of cash used in financing activities 11,574,962,260.63 3,962,064,769.43
Net cash generated from/used in financing activities 3,992,809,825.25 2,880,630,318.57
4. Effect of foreign exchange rate changes on cash and
-9,021,516.41 -35,288,115.64
cash equivalents
5. Net increase in cash and cash equivalents 1,267,096,052.81 664,088,931.90
Add: Cash and cash equivalents, beginning of the
3,434,149,481.72 3,097,899,703.76
period
6. Cash and cash equivalents, end of the period 4,701,245,534.53 3,761,988,635.66
Unit: RMB
6. Cash Flow Statement of the Company as the Parent
Item H1 2019 H1 2018
1. Cash flows from operating activities:
Proceeds from sale of commodities and rendering of
10,761,635,579.27 8,900,547,132.50
services
Tax rebates 30,608,798.86 80,805,268.47
Cash generated from other operating activities 6,301,905,413.21 1,231,787,065.42
Subtotal of cash generated from operating activities 17,094,149,791.34 10,213,139,466.39
Payments for commodities and services 8,915,821,945.44 6,889,739,101.21
Cash paid to and for employees 376,948,025.22 508,124,450.52
Taxes paid 30,146,084.97 1,139,215,454.64
69
Konka Group Co., Ltd. Interim Report 2019
Cash used in other operating activities 7,232,326,927.95 1,847,843,398.55
Subtotal of cash used in operating activities 16,555,242,983.58 10,384,922,404.92
Net cash generated from/used in operating activities 538,906,807.76 -171,782,938.53
2. Cash flows from investing activities:
Proceeds from disinvestment 105,558,710.00 55,600,000.00
Return on investment 40,874,813.31 77,823,977.16
Net proceeds from the disposal of fixed assets,
198,805.64 28,777.00
intangible assets and other long-lived assets
Net proceeds from the disposal of subsidiaries and
other business units
Cash generated from other investing activities 672,765,551.82 1,115,044,083.79
Subtotal of cash generated from investing activities 819,397,880.77 1,248,496,837.95
Payments for the acquisition of fixed assets,
39,488,957.39 54,103,982.64
intangible assets and other long-lived assets
Payments for investments 551,150,000.00 1,222,391,400.00
Net payments for the acquisition of subsidiaries and
other business units
Cash used in other investing activities 4,224,938,500.00 861,154,315.32
Subtotal of cash used in investing activities 4,815,577,457.39 2,137,649,697.96
Net cash generated from/used in investing activities -3,996,179,576.62 -889,152,860.01
3. Cash flows from financing activities:
Capital contributions received
Borrowings obtained 3,954,465,982.73 3,216,716,364.16
Net proceeds from the issuance of bonds 3,487,750,000.00
Cash generated from other financing activities
Subtotal of cash generated from financing activities 7,442,215,982.73 3,216,716,364.16
Repayments of borrowings 3,053,659,242.73 1,207,765,069.15
Payments for interest and dividends 204,582,931.37 552,129,671.31
Cash used in other financing activities 8,079,215.50 335,984,291.92
Subtotal of cash used in financing activities 3,266,321,389.60 2,095,879,032.38
Net cash generated from/used in financing activities 4,175,894,593.13 1,120,837,331.78
4. Effect of foreign exchange rate changes on cash and
-9,427,666.78 -75,185,223.64
cash equivalents
5. Net increase in cash and cash equivalents 709,194,157.49 -15,283,690.40
Add: Cash and cash equivalents, beginning of the
1,497,794,555.85 1,743,269,944.67
period
6. Cash and cash equivalents, end of the period 2,206,988,713.34 1,727,986,254.27
Unit: RMB
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Konka Group Co., Ltd. Interim Report 2019
7. Consolidated Statements of Changes in Owners’ Equity
H1 2019 Unit: RMB
H1 2019
Equity attributable to owners of the Company as the parent
Other equity Les
instruments s:
Gen
Item Tre Other Non-controlli Total owners’
Specific eral Othe
Pre Per
Share capital O Capital reserves asu comprehensive Surplus reserves Retained earnings Subtotal ng interests equity
ferr pet reserve reser r
ed ual th ry income
ve
sha bo sto
er
res nds
ck
1. Balances as at the end of the
2,407,945,408.00 208,356,624.21 -10,538,219.08 1,227,564,785.19 4,271,408,192.21 8,104,736,790.53 1,346,631,520.26 9,451,368,310.79
prior year
Add: Adjustments for changed
-2,884,254.62 -2,884,254.62 -2,884,254.62
accounting policies
Adjustments for corrections
of previous errors
Adjustments for business
combinations under common
control
Other adjustments
2. Balances as at the beginning
2,407,945,408.00 208,356,624.21 -10,538,219.08 1,227,564,785.19 4,268,523,937.59 8,101,852,535.91 1,346,631,520.26 9,448,484,056.17
of the year
3. Increase/ decrease in the
29,405,337.77 -3,659,886.69 71,737.08 111,972,479.93 137,789,668.09 247,437,548.62 385,227,216.71
period (“-” for decrease)
3.1 Total comprehensive
-3,659,886.69 352,767,020.73 349,107,134.04 126,495,519.90 475,602,653.94
income
3.2 Capital increased and
120,942,028.72 120,942,028.72
reduced by owners
3.2.1 Ordinary shares 118,854,770.64 118,854,770.64
71
Konka Group Co., Ltd. Interim Report 2019
increased by shareholders
3.2.2 Capital increased by
holders of other equity
instruments
3.2.3 Share-based
payments included in owners’
equity
3.2.4 Other 2,087,258.08 2,087,258.08
3.3 Profit distribution -240,794,540.80 -240,794,540.80 -240,794,540.80
3.3.1 Appropriation to
surplus reserves
3.3.2 Appropriation to
general reserve
3.3.3 Appropriation to
-240,794,540.80 -240,794,540.80 -240,794,540.80
owners (or shareholders)
3.3.4 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital
(or share capital) from capital
reserves
3.4.2 Increase in capital
(or share capital) from surplus
reserves
3.4.3 Loss offset by
surplus reserves
3.4.4 Changes in defined
benefit pension schemes
transferred to retained earnings
72
Konka Group Co., Ltd. Interim Report 2019
3.4.5 Other
comprehensive income
transferred to retained earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in the
period
3.5.2 Used in the period
3.6 Other 29,405,337.77 71,737.08 29,477,074.85 29,477,074.85
4. Balances as at the end of the
2,407,945,408.00 237,761,961.98 -14,198,105.77 71,737.08 1,227,564,785.19 4,380,496,417.52 8,239,642,204.00 1,594,069,068.88 9,833,711,272.88
period
H1 2018 Unit: RMB
H1 2018
Equity attributable to owners of the Company as the parent
Other equity Less
instruments : Gener
Item Other Ot Non-controlling Total owners’
Trea Specific al
Pref
Share capital Perp Ot Capital reserves comprehensive Surplus reserves Retained earnings he Subtotal interests equity
erre sury reserve reserv
etual income r
d he
bon stoc e
shar
ds r
es k
1. Balances as at the end of
2,407,945,408.00 104,732,242.30 3,697,458.95 1,217,644,874.79 4,260,125,492.57 7,994,145,476.61 204,044,330.78 8,198,189,807.39
the prior year
Add: Adjustments for
changed accounting policies
Adjustments for
corrections of previous errors
Adjustments for business
combinations under common
73
Konka Group Co., Ltd. Interim Report 2019
control
Other adjustments
2. Balances as at the
2,407,945,408.00 104,732,242.30 3,697,458.95 1,217,644,874.79 4,260,125,492.57 7,994,145,476.61 204,044,330.78 8,198,189,807.39
beginning of the year
3. Increase/ decrease in the
-4,851,840.74 -48,294,095.61 -53,145,936.35 482,418,710.00 429,272,773.65
period (“-” for decrease)
3.1 Total comprehensive
-4,851,840.74 341,793,039.03 336,941,198.29 67,390,004.88 404,331,203.17
income
3.2 Capital increased and
415,028,705.12 415,028,705.12
reduced by owners
3.2.1 Ordinary shares
415,028,705.12 415,028,705.12
increased by shareholders
3.2.2 Capital increased
by holders of other equity
instruments
3.2.3 Share-based
payments included in owners’
equity
3.2.4 Other
3.3 Profit distribution -390,087,134.64 -390,087,134.64 -390,087,134.64
3.3.1 Appropriation to
surplus reserves
3.3.2 Appropriation to
general reserve
3.3.3 Appropriation to
-390,087,134.64 -390,087,134.64 -390,087,134.64
owners (or shareholders)
3.3.4 Other
3.4 Transfers within
owners’ equity
74
Konka Group Co., Ltd. Interim Report 2019
3.4.1 Increase in capital
(or share capital) from capital
reserves
3.4.2 Increase in capital
(or share capital) from
surplus reserves
3.4.3 Loss offset by
surplus reserves
3.4.4 Changes in
defined benefit pension
schemes transferred to
retained earnings
3.4.5 Other
comprehensive income
transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in the
period
3.5.2 Used in the period
3.6 Other
4. Balances as at the end of
2,407,945,408.00 104,732,242.30 -1,154,381.79 1,217,644,874.79 4,211,831,396.96 7,940,999,540.26 686,463,040.78 8,627,462,581.04
the period
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2019 Unit: RMB
75
Konka Group Co., Ltd. Interim Report 2019
H1 2019
Other equity
instruments Less: Specif
Other
Item Capital Treas ic Surplus Retained Total owners’
Prefer
股本 Perpe comprehensi Other
red reserves ury reserv reserves earnings equity
tual Other ve income
share stock e
bonds
s
1. Balances as at the end of the
2,407,945,408.00 114,018,066.79 -1,182,217.31 1,227,564,785.19 3,040,171,940.85 6,788,517,983.52
prior year
Add: Adjustments for changed
-2,127,505.16 -2,127,505.16
accounting policies
Adjustments for corrections of
previous errors
Other adjustments 7,971,211.72 7,971,211.72
2. Balances as at the beginning of
2,407,945,408.00 114,018,066.79 -1,182,217.31 1,227,564,785.19 3,046,015,647.41 6,794,361,690.08
the year
3. Increase/ decrease in the period
-770,216,871.77 -770,216,871.77
(“-” for decrease)
3.1 Total comprehensive income -529,422,330.97 -529,422,330.97
3.2 Capital increased and
reduced by owners
3.2.1 Ordinary shares
increased by shareholders
3.2.2 Capital increased by
holders of other equity instruments
3.2.3 Share-based payments
included in owners’ equity
76
Konka Group Co., Ltd. Interim Report 2019
3.2.4 Other
3.3 Profit distribution -240,794,540.80 -240,794,540.80
3.3.1 Appropriation to surplus
reserves
3.3.2 Appropriation to owners
-240,794,540.80 -240,794,540.80
(or shareholders)
3.3.3 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital reserves
3.4.2 Increase in capital (or
share capital) from surplus reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit pension schemes transferred
to retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in the period
3.5.2 Used in the period
3.6 Other
4. Balances as at the end of the
2,407,945,408.00 114,018,066.79 -1,182,217.31 1,227,564,785.19 2,275,798,775.64 6,024,144,818.31
period
77
Konka Group Co., Ltd. Interim Report 2019
H1 2018 Unit: RMB
H1 2018
Other equity instruments Less: Specif
Other
Item Perpet Capital Treas ic Surplus Retained Total owners’
Share capital Preferre comprehensi Other
ual Other reserves ury reserv reserves earnings equity
d shares ve income
bonds stock e
1. Balances as at the end of the
2,407,945,408.00 111,525,163.22 -1,970,304.62 1,217,644,874.79 3,327,627,676.56 7,062,772,817.95
prior year
Add: Adjustments for changed
accounting policies
Adjustments for corrections of
previous errors
Other adjustments
2. Balances as at the beginning of
2,407,945,408.00 111,525,163.22 -1,970,304.62 1,217,644,874.79 3,327,627,676.56 7,062,772,817.95
the year
3. Increase/ decrease in the period
324,021.02 347,154,580.34 347,478,601.36
(“-” for decrease)
3.1 Total comprehensive income 324,021.02 737,241,714.98 737,565,736.00
3.2 Capital increased and
reduced by owners
3.2.1 Ordinary shares
increased by shareholders
3.2.2 Capital increased by
holders of other equity instruments
3.2.3 Share-based payments
included in owners’ equity
3.2.4 Other
3.3 Profit distribution -390,087,134.64 -390,087,134.64
78
Konka Group Co., Ltd. Interim Report 2019
3.3.1 Appropriation to surplus
reserves
3.3.2 Appropriation to owners
-390,087,134.64 -390,087,134.64
(or shareholders)
3.3.3 Other
3.4 Transfers within owners’
equity
3.4.1 Increase in capital (or
share capital) from capital reserves
3.4.2 Increase in capital (or
share capital) from surplus
reserves
3.4.3 Loss offset by surplus
reserves
3.4.4 Changes in defined
benefit pension schemes
transferred to retained earnings
3.4.5 Other comprehensive
income transferred to retained
earnings
3.4.6 Other
3.5 Specific reserve
3.5.1 Increase in the period
3.5.2 Used in the period
3.6 Other
4. Balances as at the end of the
2,407,945,408.00 111,525,163.22 -1,646,283.60 1,217,644,874.79 3,674,782,256.90 7,410,251,419.31
period
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Konka Group Co., Ltd. Interim Report 2019
Konka Group Co., Ltd.
Notes to Financial Statements for H1 2019
(All amounts are expressed, unless otherwise stated, in Renminbi (RMB).)
I. Company Profile
1. Establishment
Konka Group Co., Ltd. (hereinafter referred to as “Company” or “the Company”), is a
joint-stock limited company reorganized from the former Shenzhen Konka Electronic Co.,
Ltd. in August 1991 upon approval of the People’s Government of Shenzhen Municipality,
and has its ordinary shares (A-share and B-share) listed on Shenzhen Stock Exchange with
prior consent from the People’s Bank of China Shenzhen Special Economic Zone Branch. On
29 August 1995, the Company was renamed to “Konka Group Co., Ltd.” (Credibility code:
914403006188155783) with its main business electronic industry. And now the headquarters
locates in No. 28 of No. 12 of Keji South Rd., Science & Technology Park, Yuehai Street,
Nanshan District, Shenzhen, Guangdong Province.
2. Share Capital Changes upon Establishment
On 27 November 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 8 December 1991—31 December 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 29 January 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 20 December 1991— 31 January 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 Company Co., Ltd. are converted into foreign legal person’s shares, and
10,000,000 B-shares are issued additionally.
On 10 April 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 30 April 1993: distributing
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Konka Group Co., Ltd. Interim Report 2019
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 18 April 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 10 June 1994: distributing
RMB 1.10 in cash plus 5 bonus shares (including 4.4 profit bonus shares and 0.6 bonus share
capitalized from capital public reserve) for every 10 shares to all shareholders. The total
capital stock reached 281,209,724 shares after this distribution and capitalization from capital
public reserve.
On 2 June 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 6 June 1994, with the prior
consent of Shenzhen Securities Regulatory Office and Shenzhen Stock Exchange.
On 8 October 1994, the Proposal on Negotiable Bonus Shares of B-Share Corporate
Shareholders 1992 was adopted at the 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 16,930,305.00 bonus shares for FY 1992 granted to foreign
legal persons were listed and negotiated at B-share market on 26 October 1994.
On 6 February 1996, the Proposal on Share Allotment Modes 1996 was adopted at the
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 re-examination
from the ZJPSZ No. 16 [1996] document and ZJGZ No. 2 [1996] document as issued by
China Securities Regulatory Commission, on 16 July 1996 and 29 October 1996, all
shareholders were respectively allotted three shares for every ten existing shares held at
RMB6.28/A-share and HKD5.85/B-share. Corporate shareholders took their respective
existing shares as bases for full subscription of the allocable shares. The total capital stock
reached 365,572,641.00 shares after this allotment.
On 25 January 1998, the Plan on Share Allotment 1998 was adopted at the 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 15 July 1998, negotiable
A-shares were allotted in proportion of 3:10 at RMB10.50/A-share. For such reasons as
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Konka Group Co., Ltd. Interim Report 2019
continued weakness in B-share secondary market (lower than share allotment price), B-share
negotiation and allotment plan was cancelled, and the corporate shareholders of the Company
waived the preemptive right. The total capital stock reached 389,383,603 shares after this
allotment.
On 30 June 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
20 August 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 467,260,323.00 shares after this capitalization.
On 30 June 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 1 November
1999, 80,000,000.00 A-shares were additionally issued to the public at RMB15.50/share. The
total capital stock reached 547,260,323.00 shares after this additional issue.
On 30 May 2000, the Plan on Profit Distribution and Dividend Payout 1999 was adopted at
the ninth general meeting of shareholders of the Company. On 25 July 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 601,986,352.00
shares after this distribution.
On 26 May 2008, the 2017 general meeting of shareholders s was convened, during which
the following resolutions were discussed and adopted: based on the total capital stock of
601,986,352.00 shares for the year ended 31 December 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. On 16 December 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 10 April 2009. The total
capital stock reached 1,203,972,704.00 shares after change.
According to the regulations of the 2015 1st Extraordinary General Meeting and the revised
articles of the Company, the Company applied to increase the registered capital of
RMB1,203,972,704.00, which totally turned into capital reserve with the altered registered
capital of RMB2,407,945,408.00 and managed the industrial and commercial alternation
registration on 28 January 2016 with the altered share capital of 2,407,945,408.00 shares.
3. Approved business scope: research and development, production and operation of such
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Konka Group Co., Ltd. Interim Report 2019
intelligent household electric appliances as televisions, refrigerators, washing machines, and
personal electronic appliances, and kitchen and bathroom electronic appliances;
manufacturing and application of home AV, IPTV set-top boxes, OTT terminal products,
digital TV receivers (including ground receiving equipment of satellite television
broadcasting), digital products, intelligent wearable products, intelligent health products,
intelligent electric products, intelligent switch plug, power bank, 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; emergency broadcast system
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, international freight forwarding, and
warehousing services; management of supply chain, 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 centre, and data
processing. Import & export business: domestic trade; international trade (excluding
monopoly, exclusive control, and monopolized commodities); selling security products,
intelligent household products, door lock, and hardware; doing various business entrusted by
(Mobile, Unicom, Telecom, and BC&TV); Water pollution control, solid waste pollution
treatment, hazardous waste pollution control, air pollution control, soil pollution control and
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Konka Group Co., Ltd. Interim Report 2019
remediation;production (excluding mining) and sales of non-metallic mineral products and
materials; development, production and sales of specific materials for semiconductor
integrated circuits and component; assembly, production and sales of integrated device
electronics, design, R&D, manufacturing, testing, packaging and sales of semiconductor
integrated circuits, and sales, integrated circuit products and related technical services,
technology development, transfer, import and export in the field of semiconductor integrated
circuit technology.
4. The Company and its subsidiaries are mainly engaged in the production and sales of colour
TVs, white goods, mobile phones, etc.; businesses regarding trade, industry and science and
technology, environmental protection, commercial factoring, and etc.
5. The financial statements contained herein have been approved for issue by the Board of
Directors of the Company on 5 August 2019.
There were 123 subsidiaries included in the consolidation scope of 2019 of the Company,
and please refer to the Notes VIII. “Equities among other entities” for details. There were 15
subsidiaries increased and 6 decreased in the consolidation scope of the Reporting Period
over the last period of the Company, for details, see the Notes VII. “Changes of the
consolidation scope”.
6. A check list of corporate names and their abbreviations mentioned in this Report
Corporate name Abbreviation
Anhui Konka Electrical Appliance Technology Co., Ltd. Anhui Electrical Appliance
Anhui Konka Electronic Co., Ltd. Anhui Konka
Anhui Konka Tongchuang Electrical Appliances Co., Ltd. Anhui Tongchuang
Anhui Konka Zhilian E-Commerce Co., Ltd. Anhui Zhilian
Beijing Konka Electronic Co., Ltd. Beijing Konka Electronic
Boluo Konka Precision Technology Co., Ltd. Boluo Konka Precision
Boluo Konka PCB Co., Ltd. Boluo Konka
Sichuan Konka Industrial New Town Development Co., Ltd. Industrial New Town
Chengdu Anren Konka Cultural and Creative Incubator Management Co., Ltd. Chengdu Anren
Chengdu Konka Incubator Management Co., Ltd. Chengdu Konka Incubator
Chuzhou Kangyong Health Industry Development Co., Ltd. Chuzhou Kangyong
Chuzhou Konka Technology & Industry Development Co., Ltd. Chuzhou Konka TID
Nanjing Chuanghui Smart Technology Co., Ltd. Chuanghui Smart
Shenzhen Konka Electronics Technology Co., Ltd. Electronics Technology
Dongguan Konka Packing Materials Co., Ltd. Dongguan Packing
Dongguan Konka Electronic Co., Ltd. Dongguan Konka
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Konka Group Co., Ltd. Interim Report 2019
Corporate name Abbreviation
Dongguan Konka Investment Co., Ltd. Dongguan Konka Investment
Hainan Konka Technology Industry Development Co., Ltd. Hainan Technology
Hefei KONSEMI Storage Technology Co., Ltd. Hefei KONSEMI
Jiali International (Hong Kong) Limited Jiali International
Jiaxin Technology Co., Ltd. Jiaxin Technology
Jiangxi Konka New Material Technology Co., Ltd. Jiangxi Konka
Konka Electrical Appliances International
Konka Electrical Appliances International Trading Co., Ltd.
Trading
Konka Electrical Appliances Investment & Development Co., Ltd. Konka Electrical Appliances Investment
Konka Factoring (Shenzhen) Co., Ltd. Konka Factoring
Hainan Konka Material Technology Co., Ltd. Konka Material
Konka Ventures Development (Shenzhen) Co., Ltd. Konka Ventures
Guiyang Konka Enterprise Service Co., Ltd. Konka Enterprise Service
Shenzhen Konka Electrical Appliances Co., Ltd. Konka Electrical Appliances
Konka Huanjia (Dalian) Environmental Technology Co., Ltd. Konka Huanjia
Konka Huanjia (Henan) Environmental Technology Co., Ltd. Konka Huanjia (Henan)
Shenzhen Konka Unifortune Technology Co., Ltd. Konka Unifortune
Guizhou Konka Enterprise Management Service Co., Ltd. Konka Enterprise Management
Konka Ronghe Industrial Technology (Foshan) Co., Ltd. Konka Ronghe
Shenzhen Konka Eco-Development Investment Co., Ltd. Konka Eco-Development
Shenzhen Konka Suyuan Investment Industrial Co., Ltd. Konka Suyuan
Konka Suiyong Investment (Shenzhen) Co., Ltd. Konka Suiyong
Sichuan Kangjiatong Technology Co., Ltd. Kangjiatong
Shenzhen Konka Investment Holding Co., Ltd. Konka Investment
Shenzhen Konka E-display Co., Ltd. Konka E-display
Konka SmartTech Limited Konka SmartTech
Shenzhen Konka Capital Equity Investment Management Co., Ltd. Konka Capital
Konka Financial Leasing (Tianjin) Co., Ltd. Konka Leasing
Kangjietong (Hong Kong) Limited Kangjietong
Shenzhen Kangqiao Easy Chain Technology Co., Ltd. Kangqiao Easy Chain
Shenzhen Kangquan Enterprise Management Consulting Co., Ltd. Kangquan Enterprise
Anhui Kangzhi Trade Co., Ltd. Kangzhi Trade
Shenzhen Konka Cross-Border Technological Innovation Service Co., Ltd. Cross-Border Technological Innovation
Mudanjiang Arctic Ocean Appliances Co., Ltd. Mudanjiang Appliances
Jiangxi Golden Phoenix Nano Crystallized Glass Co., Ltd. Nano Crystallized Glass
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Konka Group Co., Ltd. Interim Report 2019
Corporate name Abbreviation
Nanjing Konka Smart Technology Co., Ltd. Nanjing Konka
Konka (Europe) Co., Ltd. Konka Europe
Shenzhen Konka Electronic Fittings Technology Co., Ltd. Fittings Technology
Shenzhen Konka Pengrun Technology & Industry Co., Ltd. Konka Pengrun
Xiamen Dalong Trading Co., Ltd. Xiamen Dalong
Shandong Kangxin Industrial Development Co., Ltd. Shandong Kangxin
Shenzhen Konka Commercial System Technology Co., Ltd. Commercial System Technology
Shanghai Konka Industrial Co., Ltd. Shanghai Konka
Shanghai Xinfeng Zhuoqun PCB Co., Ltd. Shanghai Xinfeng
Shenzhen Huanan Investment Partnership (Limited Partnership) Shenzhen Huanan
Shenzhen KONSEMI Co., Ltd. Shenzhen KONSEMI
Shenzhen Meixin Semiconductor Technology Co., Ltd. Shenzhen Meixin
Shenzhen Nianhua Enterprise Management Co., Ltd. Shenzhen Nianhua
Shenzhen Konka Life Electric Appliance Co., Ltd. Life Electric Appliance
Shenzhen Konka Shengxing Industrial Co., Ltd. Shengxing Industrial
Sichuan Konka Smart Terminal Technology Co., Ltd Sichuan Konka
Suining Electronic Technological
Suining Konka Electronic Technological Innovation Co., Ltd.
Innovation
Suining Konka Industrial Park Development Co., Ltd. Suining Konka Industrial Park
Shenzhen Konka Telecommunications Technology Co., Ltd. Telecommunication Technology
Shenzhen Wankaida Science and Technology Co., Ltd. Wankaida
Hong Kong Konka Limited Hong Kong Konka
Konka Mobility Co., Limited Konka Mobility
Shenzhen Xiaojia Technology Co., Ltd. Xiaojia Technology
Henan Frestec Electrical Appliances Co., Ltd. Frestec Electrical Appliances
Henan Frestec Household Appliances Co., Ltd. Frestec Household Appliances
Henan Frestec Refrigeration Appliance Co., Ltd. Frestec Refrigeration
Jiangxi Xinfeng Microcrystalline Jade Co., Ltd. Xinfeng Microcrystalline
GuangDong XingDa HongYe Electronic Co., Ltd. XingDa HongYe
Yantai Konka Healthcare Enterprise Service Co., Ltd. Yantai Konka
Yantai Konka Industrial Co., Ltd. Yantai Konka Industrial
Yantai Kangjin Technology Development Co., Ltd. Yantai Kangjin
Shenzhen E-display Service Co., Ltd. E-display Service
Yibin Konka Technology Park Operation Co., Ltd. Yibin Konka Technology Park
Yibin Konka Incubator Management Co., Ltd. Yibin Konka Incubator
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Konka Group Co., Ltd. Interim Report 2019
Corporate name Abbreviation
Shenzhen Konka Mobile Interconnection Technology Co., Ltd. Mobile Interconnection
Hefei Yihe Electronic Co., Ltd. Yihe Electronic
Shenzhen Konka Yifang Technology Co., Ltd. Yifang Technology
E3info (Hainan) Technology Co., Ltd. E3info
Shenzhen E2info Network Technology Co., Ltd. E2info
Shandong Econ Technology Co., Ltd. (inclusive of its consolidated
Econ Technology
subsidiaries)
Youshi Kangrong Culture Communication Co., Ltd. Youshi Kangrong
Shenzhen Youzhihui Technology Co., Ltd. Youzhihui
Yibin Konka Smart Technology Co., Ltd. Smart Technology
Chain Kingdom Memory Technologies Co., Limited Chain Kingdom Memory Technologies
Chain Kingdom Memory Technologies
Chain Kingdom Memory Technologies (Shenzhen) Co., Ltd.
(Shenzhen)
Chongqing Konka Technology Development Co., Ltd. Chongqing Konka
II. Basis for the Preparation of Financial Statements
With the going-concern assumption as the basis and based on transactions and other events
that actually occurred, the Company prepared financial statements in accordance with The
Accounting Standards for Business Enterprises—Basic Standard issued by the Ministry of
Finance with Decree No. 33 and revised with Decree No. 76, the 42 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 February 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 Company adopted the accrual basis in accounting. Except for some financial instruments
and investment properties, the financial statements are based on historic costs to measure.
Non-current assets held for sale is priced by the lower amount between the amounts that fair
value minus estimated amount and the original book value that meets the held for sale
requirement. 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
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Konka Group Co., Ltd. Interim Report 2019
The financial statements prepared by the Company 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 June 2019, business results and cash flows
for H1 of 2019, and other relevant information. In addition, the Company’s and the
Company’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 its subsidiaries are mainly engaged in the production and sales of colour
TVs, white goods, mobile phones, etc.; businesses regarding trade, industry and sicience and
technology, environmental protection, commercial factoring, financing lease, etc. The
Company and its subsidiaries 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, the
recognition of completion of construction contract, and research development expenditure.
For the details, please refer to each description of Notes IV. 23 “Revenues”. For the notes of
the significant accounting judgment and estimations made by the management layer, please
refer to Notes IV. 29 “Significant accounting judgment and estimations”.
1. Fiscal Period
The Company’s fiscal periods include fiscal years and fiscal periods shorter than a complete
fiscal year. The Company’s fiscal year starts on January 1 and ends on December 31 of every
year according to the Gregorian calendar.
2. Operating Cycle
A normal operating cycle refers to a period from the Company purchasing assets for
processing to realizing cash or cash equivalents. An operating cycle for the Company 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 Company
and its domestic subsidiaries are involved. Therefore, the Company and its domestic
subsidiaries use Renminbi as their bookkeeping base currency. The overseas subsidiaries of
the Company should confirm the HK Dollar and Euro a as their recording currency according
its major economic environment of their operating address. And the Company adopted
Renminbi as the bookkeeping base currency when preparing the financial statements for the
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Konka Group Co., Ltd. Interim Report 2019
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
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,
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Konka Group Co., Ltd. Interim Report 2019
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 than 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 re-examination, 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 No. 5 Notice about the Treasury Issuing the Accounting
Standards for Enterprises (Finance accounting) [2012] No. 19 and the Article 51 of
Accounting Standards for Enterprises No. 33—Consolidated Financial Statements Criterion
about the “package deal” (see Note IV, 5 (2)), Whether the deals are “package deal” or not,
belong to the “package deal”, see the previous paragraphs described in this section and Note
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Konka Group Co., Ltd. Interim Report 2019
IV, 13 “long term equity investment” and conduct accounting treatment, those not belong to
the “package 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 Company 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 Company 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 Company’s consolidated financial statements, as for the equity interests that the
Company 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 Company 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 Company 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 scope of consolidation includes the Company and its all subsidiaries.
A subsidiary is an enterprise or entity controlled by the Company.
Once any changes in the relevant facts or situations resulted in any changes in the elements
involved in the aforesaid definition of “control”, the Company shall carry out a reassessment.
(2) Methods for preparing the consolidated financial statements
Subsidiaries are fully consolidated from the date on which the Company obtains control on
their net assets and operation decision-making and are de-consolidated from the date when
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Konka Group Co., Ltd. Interim Report 2019
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 and the merged party in a consolidation by merger, 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 Company during the preparation of the consolidated
financial statements, where the accounting policies and the accounting periods are
inconsistent between the Company 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-Company 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 Company 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 Company 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
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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 Company according to the original shareholding
percentage in the subsidiary, is recorded in investment gains for the period when the
Company’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 Note IV. 9 “financial instruments”.
If the company disposals the equity investment in the subsidiary company until the loss of
control through multiple transactions, it is necessary to distinguish whether the transactions
disposing the equity investment in the subsidiary company until the loss of control belong to
package transactions. 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
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
Company losses control on its original subsidiaries due to disposal of some equity
investments or other reasons” (See the front paragraph) relevant transactions of the Company
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
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financial statements, which together transferred into the current profits and losses in the loss
of control , when the Company 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 Company 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 Company enjoys assets and has to bear liabilities related to the
arrangement. A joint venture refers to a joint arrangement where the Company is only
entitled to the net assets of the arrangement.
The Company’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 Company, 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 Company’s stake in the joint operation; recognizes
the income from sale of the Company’s share in the output of the joint operation; recognizes
the income from sale of the joint operation’s outputs according to the Company’s stake in it;
and recognizes the expense solely incurred to the Company and the expense incurred to the
joint operation according to the Company’s stake in it.
When the Company, 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 Company 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 Accounting Standard No. 8 for Business Enterprises—Asset
Impairment, the Company 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 Company’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
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(1) Accounting treatments for translation of foreign currency transactions
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 that day 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 the other
comprehensive income; 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
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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
expense items in the profit statements shall be translated at the spot exchange rate of the
transaction date. The retained earnings at period-end is the retained earnings the period-end
of last year after the translation; retained earnings at period-end shall be listed as various
distribution items after the translation; after the translation, the balance between assets and
the sum of liabilities and shareholders’ 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 shareholders’ 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 current period 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 the same period of last year shall be listed
at the amounts after translation of foreign currency financial statement in the same period of
last year.
Where the control of the Company over an overseas operation ceases due to disposal of all or
some of the Company’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 Company’s equity in an overseas operation decreases due to disposal of some
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equity investment or other reasons but the Company 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
When the Company becomes a party to a financial instrument, it shall recognize a financial
asset or financial liability.
(1) Classification, recognition and measurement of financial assets
The Company classifies the financial assets into financial assets measured at amortized cost,
financial assets measured by the fair value and the changes recorded in other comprehensive
income and financial assets at fair value through profit or loss based on the business model
for financial assets management and characteristics of contractual cash flow of financial
assets
Financial assets initially recognized shall be measured at their fair values. For financial assets
measured at their fair values and of which the variation is recorded into the profit or loss of
the current period, the transaction expenses thereof shall be directly included into the current
profit or loss; for other financial assets, the transaction expenses thereof shall be included
into the initially recognized amount. For accounts receivable and notes receivable generated
from sales of commodities or provision of labor services, excluding or without regard to
major financing, the expected consideration amount the Company has the right to collect will
be taken by the Company as the initially recognized amount.
① Financial assets measured by the amortized cost
The business mode of the Company to manage the financial assets targets at collecting the
contractual cash flow. What's more, the contractual cash flow characteristics of the financial
assets are consistent with the basic lending arrangement, that is, the cash flow generated in
the specific date is the payment of the interest based on the principal and outstanding
principal amount. This kind of financial assets of the Company shall be subsequently
measured based on the amortized cost and effective interest method, and the gains or losses
arising from the amortization, impairment shall be included into current profit and loss.
②Financial assets measured at the fair value with its changes included into other
comprehensive income
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Business mode for managing financial assets of the Company takes contract cash flow
collected as target and selling as target and contract cash flow characteristics of such
financial assets are consistent with basic lending arrangement. The Company calculates such
financial assets as per fair value whose change is included into corresponding comprehensive
income, but impairment loss or gain, exchange gain or loss and interest income calculated as
per actual interest rate method are included into the current profit and loss.
Furthermore, the Company designates partial non-tradable equity vehicle investment as the
financial asset measured with fair value whose change is included into other comprehensive
income. The Company includes the related dividend income of such financial assets into the
current profit and loss with the change in fair value included into other comprehensive
income. At the time of derecognition of such financial assets, accumulated gain or loss
included into other comprehensive income before will be shifted to retained earnings from
other comprehensive incomes but not included into the current profit and loss.
③ Financial assets at fair value through profit or loss
The Company classifies financial assets except for above-mentioned financial assets
measured with amortized cost and financial assets measured with fair value whose change is
included into other comprehensive income into financial assets at fair value through profit or
loss. Furthermore, at the time of the initial recognition, to eliminate or significantly reduce
the accounting mismatch, the Company specifies partial financial assets as the financial
assets at fair value through profit or loss. For such financial assets, the Company adopts the
fair value for the subsequent measurement, and the changes in fair value are included into
current profit and loss.
(2) Classification, recognition and measurement of financial liabilities
The Company’s financial liabilities are, on initial recognition, classified into financial
liabilities at fair value through profit or loss and other financial liabilities. For financial
liabilities at fair value through profit or loss, relevant transaction costs are immediately
recognized in profit or loss for the current period, and transaction costs relating to other
financial liabilities are included in the initial recognition amounts.
① Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include trading financial liabilities
(including the derivative instruments belonging to financial liabilities) and financial
liabilities designated at the initial recognition to be measured by the fair value and their
changes are recorded in the current profit or loss.
Trading financial liabilities (including the derivative instruments belonging to financial
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liabilities) are subsequently measured at fair value, and the changes of fair value except those
related to hedge accounting) shall be recorded in the current profit or loss.
For the financial liabilities at fair value through profit or loss, the change of such liability's
fair value arising from changes in the Company's own credit risk is included into other
comprehensive income. And when the liability is derecognized, the accumulative change
amount of its fair value arising from the change of own credit risk included into other
comprehensive income is transferred to the retained earnings. The changes of the remaining
fair value are included in the current profit or loss. If the treatment of change effects in own
credit risk of such financial liability in the above method may cause or expand the accounting
mismatching in the profit or loss, the Company will include all gains or losses (including the
amount influenced due to the changes in own credit risk of the enterprise) of such financial
liability into the current profit or loss.
② Other financial liabilities
Other financial liabilities except for those formed due to transfer of financial assets failing to
comply with derecognition condition or continuously getting involved in transferred financial
assets and financial guarantee contract are classified into financial liabilities measured with
amortized cost and subject to subsequent measurement based on amortized cost. Gains or
losses generated from derecognition or amortization are included into the current profit or
loss.
(3) Recognition and measurement of financial assets transfer
The Company derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party
under a pass-through arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either (a)
has transferred substantially all the risks and rewards of the asset, or (b) has neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor
control over the asset, the asset is recognized according to the extent it exists as financial
asset, and correspondent liability is recognized. The extent of existence refers the level of
risk by the financial asset changes the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the
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carrying amount of the financial asset transferred; and (b) the sum of the consideration
received from the transfer and any cumulative gain or loss that had been recognized in other
comprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of
the transferred financial asset is allocated between the part that continues to be recognized
and the part that is derecognized, based on the relative fair value of those parts. The
difference between (a) the carrying amount allocated to the part derecognized; and (b) the
sum of the consideration received for the part derecognized and any cumulative gain or loss
allocated to the part derecognized which has been previously recognized in other
comprehensive income, is recognized in profit or loss.
If the Company endorses the financial assets sold by right of recourse and holding financial
assets, it needs to confirm that whether almost all risks and remuneration in the ownership of
financial assets have been transferred or not. Where an enterprise has transferred nearly all of
the risks and rewards related to the ownership of the financial asset to the transferee, it shall
stop recognizing the financial asset； If it retained nearly all of the risks and rewards related
to the ownership of the financial asset, it shall not stop recognizing the financial asset. If the
Company does not transfer or retain nearly all of the risks and rewards related to the
ownership of the financial asset, then it continuously judges that whether the Company retain
the control of the assets, and conducts accounting treatment according to the principles
described in former paragraphs.
(4) Derecognition of financial liabilities
In case of current obligation of financial liabilities (or partial financial liabilities) being
terminated, derecognition of such financial liabilities (or partial financial liabilities) is
conducted by the Company. If the Company (borrower) concludes an agreement with the
lender to replace original financial liabilities with new ones and contact terms of new
financial liabilities are different from those of original financial liabilities, derecognition of
original financial liabilities and recognition of new financial liabilities shall be conducted. In
case of material alteration of contract terms of original financial liabilities (partial financial
liabilities) by the Company, derecognition of original financial liabilities and recognition of
new financial liabilities as per modified terms shall be conducted.
In case of derecognition of financial liabilities (partial financial liabilities), the Company
includes the balance between its carrying value and payment consideration (including
non-cash assets transferred out or borne liabilities) into the current profit or loss.
(5) Offsetting financial assets and financial liabilities
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When the Company 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.
(6) Determination of financial assets and liabilities’ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction. For a financial instrument
which has an active market, the Company uses quoted price in the active market to establish
its fair value. The quoted price in the active market refers to the price that can be regularly
obtained from exchange market, agencies, industry associations, pricing authorities; it
represents the fair market trading price in the actual transaction. For a financial instrument
which does not have an active market, the Company establishes fair value by using a
valuation technique. Valuation techniques include using recent arm’s length market
transactions between knowledgeable, willing parties, reference to the current fair value of
another instrument that is substantially the same, discounted cash flow analysis and option
pricing models. The Company measures initially and subsequently the fair value of an
interest rate swap at the value of a competitor’s interest rate swap quoted by a recognized
financial institution as at the Company’s balance sheet date in accordance with the principle
of consistency. In valuation, the Company adopts applicable valuation techniques supported
by sufficient utilizable data and other information in current circumstances, selects input
values consistent with asset or liability characteristics considered in relevant asset or liability
transactions of market participators and prioritizes the applying relevant observable input
values. Unobservable input values shall not be applied unless relevant observable input
values are not accessible or feasible.
(7) 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 consideration received from issuing equity
instruments, net of transaction costs, are added to shareholders’ equity. All types of
distribution (excluding stock dividends) made by the Company to holders of equity
instruments are deducted from shareholders’ equity. The Company does not recognize any
changes in the fair value of equity instruments.
An equity instrument distributing dividends during the period of continued existence
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(including the “interest” generated from those classified as equity instrument) shall be treated
as profit distribution.
10. Impairment of Financial Assets
The Company needs to confirm that the financial assets subject to the impairment loss are the
financial assets measured based on the amortized cost, the debt instrument investment
measured based on the fair value with its variations included into other comprehensive
incomes and the lease outlay receivable, mainly including notes receivable, account
receivable, other receivables, investment on creditor’s rights, other investments on creditor’s
rights and long-term receivables etc. Besides, in respect of the contract assets and partial
financial guarantee contract, corresponding impairment provisions shall be calculated and
withdrawn and corresponding credit impairment losses recognized according to various
accounting policies mentioned in this part.
(1) Methods for the Recognition of Impairment Provisions
For all mentioned items above, the Company shall calculate and withdraw corresponding
impairment provisions and recognize corresponding credit impairment losses according to
applicable expected credit loss measurement methods (general methods or simplified
methods) with the expected credit loss as the basis.
Credit loss refers to the difference between all receivable contract cash flows and all
expected cash flows that are discounted to the present value based on the original actual
interest rate -- the present value of all cash shortfall. However, for the purchased or original
financial assets subject to the credit impairment, the Company shall realize the discounting
based on the actual interest rate subject to the credit adjustment.
General methods applied to measure the expected credit loss can be described as: the
Company shall evaluate whether the credit risk of the financial assets (including the contract
assets and other applicable items; the same below) increases remarkably after the initial
recognition on the balance sheet day; if the credit risk increases remarkably after the initial
recognition, the Company shall measure the provision for loss based on the specific expected
credit loss amount during the entire period of existence; if not, the Company shall measure
the provision for loss based on the specific expected credit loss amount in the following 12
months. While evaluating the expected credit loss, the Company shall take all reasonable and
well-founded information into consideration, including the forward-looking information.
For the financial instrument of lower credit risk on the balance sheet day, the Company shall
assume that its credit risk does not increase remarkably after the initial recognition, and
corresponding provision for loss shall be measured according to the expected credit loss in
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the following 12 months.
(2) Standards for Judging Whether the Credit Risk Increases Remarkably after the Initial
Recognition
If any financial assets’ probability of default within the expected period of existence
determined on the balance sheet day is obviously higher than that within the expected period
of existence determined during the initial recognition, it shall indicate the remarkable
increase of the financial assets’ credit risk. Unless it is under special circumstances, the
Company shall adopt various variations in the default risk in the following 12 months as the
reasonable basis for estimating corresponding variations in the default risk within the entire
period of existence and determining whether the credit risk increases remarkably after the
initial recognition.
(3) Combined Method for Evaluating the Expected Credit Risk based on Corresponding
Combination
For the financial assets with remarkably different credit risk, the Company shall separately
evaluate its credit risk, including the receivables from related parties, receivables involved in
any dispute with the other party or any lawsuit and arbitration, and receivables with obvious
evidence showing that the debtor cannot fulfill the due payment obligation etc.
Except for the financial assets whose credit risk shall be separately evaluated, the Company
shall divide these financial assets into different combinations based on the specific risk
features, on which basis, corresponding credit risks can be evaluated.
(4) Accounting Treatment Methods Applied to the Impairment of Financial Assets
At the end of the period, the Company shall calculate the expected credit losses of various
financial assets. If the expected credit loss is higher than the carrying amount of its current
impairment provision, the difference shall be recognized as the impairment loss; if lower, the
difference shall be recognized as the gain from the impairment.
(5) Methods for Determining the Credit Loss of Various Financial Assets
① Notes Receivables
For notes receivable, the Company shall measure the provision for loss based on the specific
expected credit loss during the entire period of existence. According to the credit risk
characteristics thereof, except those with separate evaluation of credit risk, notes receivable
can be divided into different combinations:
Item Basis
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The Accepter shall be the bank with smaller
Bank Acceptance
credit risk
Trade Acceptance Classified by credit risk of acceptors
②Account Receivable and Contract Assets
For account receivable and contract assets excluding significant financing composition, the
Company shall measure the provision for loss according to the specific expected credit loss
amount within the entire period of existence.
For account receivable, contract assets and lease payment receivable including significant
financing composition, the Company shall always measure the provision for loss according
to the specific expected credit loss amount within the period of existence.
Except the account receivable and contract assets whose credit risks shall be separately
evaluated, the Company shall divide them into different combinations based on the specific
credit risks:
Item Basis
This combination involves the accounts
receivable whose credit risk shall not be
Aging Combination
separately evaluated by regarding the aging
as credit risk feature.
This portfolio is the project-related
Project Funds Combination receivables.
ompany Combination within the Scope of The accounts receivable within the scope of
Consolidation consolidation
③Other Receivables
By determining whether the credit risk of other receivables increases remarkably after the
initial recognition, the Company shall measure the impairment loss based on the specific
expected credit loss in the following 12 months or during the entire period of existence.
Except other receivables whose credit risks shall be separately evaluated, the Company shall
divide them into different combinations based on the specific credit risk features:
Item Basis
This combination involves other receivables
Aging Combination whose credit risk shall not be separately
evaluated by regarding the aging as credit
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risk feature.
This combination shall regard other
receivables of extremely low risk (including
Low Risk Combination
the revolving fund, the cash deposit and the
guarantee deposit) as the credit risk feature.
Company Combination within the Scope of Other receivables within the scope of
Consolidation consolidation.
④ Long-term Receivables (except the account receivable and the lease payment receivable
including the significant financing composition)
By determining whether the credit risk of long-term account receivables increases
remarkably after the initial recognition, the Company shall measure the impairment loss
based on the specific expected credit loss in the following 12 months or during the entire
period of existence. Except long-term account receivables whose credit risks shall be
separately evaluated, the Company shall divide them into different combinations based on
the specific credit risk features:
Item Basis
Regarding the long-term receivables related to the financing
Financing Lease Combination
lease as the credit risk characteristics
Regarding the long-term receivables related to the PPP
Franchise Combination
Project as the credit risk characteristics
11. Inventory
(1) Classification
The Company’s inventories mainly include raw materials, goods in process; merchandise on
hand, goods delivered, circulating materials, and property inventories (development product,
and development cost), and finished but unsettled assets of construction contract.
① Development product refers to the finished and held-for-sale property.
② Development costs refers to the unfinished property with the development purpose for
sale.
③ The finished but unsettled assets of construction contract refers to the excess amount of
the sum of accumulatively incurred costs and recognized gross margin (loss) of contract in
process over the settled amount.
(2) Pricing method for outgoing inventories
Pricing method of common inventories
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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.
Pricing method of property inventories
The property inventories are initially measured at the costs, and inventories mainly include
materials in stock, development product in process (development costs), finished
development product, and development product intended to sell but rent temporarily, and etc.
The costs of the development product 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. When the inventories are delivered, its actual costs shall be recognized
by weighted average method.
Pricing method of construction contract
The construction contracts shall be measured at actual cost, including all direct and indirect
costs related to the execution of the contract from the time signing the contract to completing
the contract. The expenses such as travel expenses and bidding fees incurred for the purpose
of signing the contract, which can be separately and reliably measured and the contract is
likely to be concluded, are included in the contract cost when the contract is obtained; if the
above conditions are not met, they are included in the current profit and loss.
The accumulated costs incurred in the contract in progress, the accumulated recognized gross
profit (loss) and the settled price are stated in the balance sheet as net offset. The part of the
sum of the accumulated costs incurred in the contract in progress and the accumulated
recognized gross profit (loss) that exceeds the settled price is stated as the inventory; the part
of the settlement costs of the contract in progress that exceeds the sum of the accumulated
costs incurred and the accumulated recognized gross profit (loss) are stated as account
collected in advance.
(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
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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. The
inventories with various numbers and low unit price shall be made provisions for
depreciation reserves of inventories according to the category of inventories. For inventories
that are produced and sold in the same region with same or similar end use or purposes, and
hard to be measured separately from other items, it shall be made merger provisions for
falling price of inventories.
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 amortization when acquiring.
12. Assets Held for Sale and Disposal Group
When a company relies mainly on selling (including the exchanges of non-monetary assets
with commercial substance, similarly hereinafter) instead of continuing to use a non-current
asset or disposal group to recover its carrying value, then the non-current asset or disposal
group is classified as assets held for sale. The specific standards are simultaneously meeting
the following conditions: assets or disposal groups can be sold immediately under current
conditions based on the practice of selling such assets or disposal groups in similar
transactions; the Company has already made a resolution on the sale plan and obtained a
certain purchase commitment, and the sale is expected to be completed within one year. A
disposal group refers to a group of assets that are disposed of together as a whole by sale or
other means in a transaction and the liabilities directly related to these assets transferred in
the transaction. Where the asset group or combination of asset groups to which a disposal
group belongs apportions the goodwill acquired in the business combination in accordance
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with the Accounting Standards for Enterprises No. 8 - Asset Impairment, the disposal group
shall include the goodwill allocated to it.
If there are non-current assets or disposal groups held for sale during initial measurement or
on the balance sheet day based on remeasurement of this Company, if the carrying value is
higher than the net amount by deducting the selling expenses with the fair value, the carrying
value shall be written down and be equal to the net amount by deducting the selling expenses
with the fair value. The write-down amount shall be confirmed as the loss of depreciation of
assets and shall be included into the profits and losses of the current period. At the same time,
prepare to calculate and withdraw the assets purchased and under agreements to resell. For
the disposal group, deduct the carrying value of the goodwill in the disposal group with the
asset depreciation losses confirmed, then deduct the carrying value of each non-current asset
in the disposal group conforming to the measurement regulations of Accounting Standards
for Business Enterprises No. 42-non-current Assets Purchased and under Agreements to
Resell, Disposal Group and Operation Termination (herein after referred to as "the Standard
for Assets Purchased and under Agreements to Resell"). If the net amount by deducting the
selling expenses with the fair value of the disposal group purchased and under agreements to
resell on the subsequent balance sheet date, the previous write-down amount shall be
recovered and shall be reversed within the asset depreciation losses amount of the
non-current confirmed as per regulation of the Standard for Assets Purchased and under
Agreements to Resell after being classified into the category purchased and under agreements
to resell. The reverse amount shall be included into the current profits and losses, and the
carrying value shall be added as per the proportion of the carrying value of each non-current
asset in the disposal group applicable to the Standard for Assets Purchased and under
Agreements to Resell except for the goodwill; The goodwill carrying value deducted and the
asset depreciation losses of the non-current assets applicable to the measurement regulations
of the Standard for Assets Purchased and under Agreements to Resell before its confirmation
of being classified into the category purchased and under agreements to resell shall not be
reversed.
Depreciation or amortization in the non-current assets held for sale or the non-current assets
in the disposal group shall not be calculated or withdrawn. Interests of liabilities and other
expenses in the disposal group purchased and under agreements to resell shall be confirmed
continuously.
When a non-current asset or disposal group fail to meet the classification conditions for the
category of held-for-sale, the Company will no longer classify a non-current asset or disposal
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group as held-for-sale or remove out a non-current asset from the held-for-sale disposal
group, and it will be measured by one of the followings whichever is lower: (1) The carrying
value before being classified as held for sale will be adjusted according to the depreciation,
amortization or impairment that would have been recognized under the assumption that it
was not classified as held for sale; (2) The recoverable amount.
13. Long-term Equity Investments
The long-term equity investments of this part refer to the long-term equity investments that
the Company has control, joint control or significant influence over the investees. The
long-term equity investment that the Company does not have control, joint control or
significant influence over the investees, should be recognized as available-for-sale financial
assets or financial assets at fair value through profit or loss for accounting before 2019 and it
will be measured as financial assets at fair value through profit or loss since January 2019,
among which, for those not for trading, the Company can choose to designate them as
financial assets measured at fair value and changes thereof are recorded into other
comprehensive income at initial recognition for accounting, and for details of the accounting
policies governing, please refer to Notes IV 9 “Financial Instrument”.
Joint control, refers to the control jointly owned according to the relevant agreement on an
arrangement by the Company 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 Company 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 carrying value of the shareholders’ 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 carrying 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 carrying 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. The total face value of the stocks issued shall be regarded as the
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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 carrying 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 carrying value of the
long-term equity investment before the combination and the carrying 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 (financial assets at fair value and changes thereof are
recorded into comprehensive income), should not have any accounting treatment 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
carrying 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. On or before 31 December 2018, 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
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investment is the financial assets available for sale, its difference between the fair value and
the carrying 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 Company, the
fair value of equity securities issued by the Company, the agreed value of the investment
contract or agreement, the fair value or original carrying amount of exchanged assets from
non-monetary assets exchange transaction, the fair value of the long-term equity investments,
etc. The expenses, taxes and other necessary expenditures directly related with gaining the
long-term equity investments shall also be recorded into investment cost. 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.
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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 carrying value of the long-term equity investment; corresponding reduce the
carrying 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 carrying 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 policies adopted by the investees are not accord with that of
the Company, should be adjusted according to the accounting policies of the Company 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 Company 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 Company 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 Company and the
investees which belongs to the impairment losses of the transferred assets, should not be
neutralized. If the assets launched by this Company to the associated enterprise or joint
ventures constitute the business, and the investor obtains the long-term equity investment but
fails to obtain the control right, the fair value of business launched is taken as the initial
investment cost of newly-increased long-term equity investment, and the difference between
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initial investment cost and carrying value of business launched will be included in current
profit and loss. If the assets sold by this Company to the associated enterprises or joint
ventures constitute the business, the difference between consideration and carrying value of
business will be included in current profit and loss. If this Company's assets purchased from
the associated enterprises or joint ventures constitute business, accounting treatment shall be
conducted in accordance with the provisions of the Accounting Standards for Business
Enterprises No. 20 -- Business Combination, fully recognize the gains or losses related to the
transaction.
The Company shall recognize the net losses of the invested enterprise until the carrying value
of the long-term equity investment and other long-term rights and interests which
substantially from the net investment made to the invested entity are reduced to zero.
However, if the Company 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
Company 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 Company before the first execution of the
new accounting criterion 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
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shall treated in accordance with the relevant accounting policies in Note IV. 5 (2) “Method on
preparation of combined financial statements”.
For other ways on disposal of long-term equity investment, the balance between the carrying
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 shareholders’ 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 Company 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 carrying 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
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instrument before the Company 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 Company 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
fair value and carrying 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 Company 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 carrying 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.
14. Investment Property
The term “investment property” refers to the real estate held for generating rent and/or capital
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appreciation. Investment property of the Company 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 property shall be made at its cost. Subsequent
expenditures incurred for an investment property is included in the cost of the investment
property when it is probable that economic benefits associated with the investment property
will flow to the Company 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 Company shall make a follow-up measurement to the investment property by employing
the cost pattern on the date of the balance sheet. An accrual depreciation or amortization shall
be made for the investment property 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 property, please refer to Note IV. 20. “Long-term assets impairment”.
When owner-occupied real estate or inventories are changed into investment property or
investment property 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 property 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 property at the date of such change.
If the fixed asset or intangible asset is changed into investment property 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 property
measured by adopting the fair value pattern, whose fair value on the date of such change
shall be the entry value after the change
An investment property is derecognized on disposal or when the investment property 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
property less its carrying amount and related taxes and expenses is recognized in profit or
loss in the period in which it is incurred.
15. Fixed Assets
(1) Conditions for recognition of fixed assets
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Fixed assets refer to tangible assets held for the production of commodities, the provision of
services, leasing or operation and management, whose service life exceeds one accounting
year. Fixed assets are recognized only when the economic benefits associated with them are
likely to flow into the company and their costs can be reliably measured. Fixed assets are
initially measured at cost, taking into account the impact of expected abandonment costs.
(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 (%)
(%)
Straight-line
Housing and building 20-40 5-10.00 2.25-4.75
depreciation
Straight-line 5-10.00
Machinery equipment 5-10 9.00-19.00
depreciation
Straight-line 5-10.00
Electronic equipment 3-5 18.00-31.67
depreciation
Straight-line 5-10.00
Transportation vehicle 3-5 18.00-31.67
depreciation
Straight-line 5 5-10.00
Other equipment 18.00-19.00
depreciation
The “expected net salvage value” refers to the expected amount that the Company 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. 20 “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 carrying 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
Company sells, transfers or discards any fixed assets, or when any fixed assets of the
Company is damaged or destroyed, the Company shall deduct the carrying 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 Company 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.
16. 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. 20 “Long-term assets
impairment”.
17. Borrowing Costs
The borrowing costs shall include interest on borrowings, amortization of discounts or
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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;
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.
18. Intangible Assets
(1) Intangible assets
The term “intangible asset” refers to the identifiable non-monetary assets possessed or
controlled by enterprises which have no physical shape.
The intangible assets shall be initially measured according to its cost. The costs related with
the intangible assets, if the economic benefits related to intangible assets are likely to flow
into the enterprise and the cost of intangible assets can be measured reliably, shall be
recorded into the costs of intangible assets; otherwise, it shall be recorded into current profits
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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 Company 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 Company 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
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
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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. 20 “Long-term assets impairment”.
19. 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.
20. 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 Company 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 carrying 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
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
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minimum asset combination producing cash flow independently.
In impairment test, carrying 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
carrying value of business reputation of asset group or asset group combination, then deduct
carrying value of all assets according to proportions of other carrying 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.
21. 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, labour 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 Company
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 labour relations before expiration of contract, or layoffs with
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compensations, and the Company cannot terminate the labour relations unilaterally or reduce
the demission welfare, remuneration and liabilities produced from the demission welfare
should be determined and included in current profits and losses when determining the costs
of demission welfare and recombination. However, demission welfare not fully paid within
12 months after annual Reporting 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 Company 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 recognition conditions of estimated liabilities.
The other long-term welfare that the Company 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.
22. Provisions
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 provisions 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 provisions 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
carrying value of the estimated liabilities.
23. 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
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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
or transferring property in goods; for goods exported, the revenue shall be recognized once
the goods are cleared through customs and delivered to the carrier designated by the
purchaser; for goods directly traded in overseas, the revenue shall be recognized when
customers pick up the goods or the goods are delivered to the assigned place by customers.
(2) Providing labour services
If the Company can reliably estimate the outcome of a transaction concerning the labour
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 labour services shall be decided by the
proportion of the labour service already provided to the total labour service to provide.
The outcome of a transaction concerning the providing of labour services can be measured in
a reliable way, means that the following conditions shall be met simultaneously: ① The
amount of revenue can be measured in a reliable way; ② The relevant economic benefits are
likely to flow into the enterprise; ③ The schedule of completion under the transaction can be
confirmed in a reliable way; and ④ The costs incurred or to be incurred in the transaction
can be measured in a reliable way.
If the outcome of a transaction concerning the providing of labour services cannot be
measured in a reliable way, the revenue from the providing of labour services shall be
recognized in accordance with the amount of the cost of labour services incurred and
expected to be compensated, and make the cost of labour services incurred as the current
expenses. If it is predicted that the cost of labour services incurred couldn’t be compensated,
thus no revenue shall be recognized.
Where a contract or agreement signed between Company and other enterprises concerns
selling goods and providing of labour services, if the part of sale of goods and the part of
providing labour services can be distinguished from each other and can be measured
respectively, the part of sale of goods and the part of providing labour services shall be
treated respectively. If the part of selling goods and the part of providing labour services
cannot be distinguished from each other, or if the part of sale of goods and the part of
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providing labour services can be distinguished from each other but cannot be measured
respectively, both parts shall be conducted as selling goods.
(3) Construction contract income
Under circumstance of that the outcome of the construction contract can be reliably estimated,
the contract income and costs are confirmed on the balance sheet date in accordance with the
percentage of completion method. The completion of the contract is determined by the
proportion of the incurred labor costs to the estimated total costs.
That the result of the construction contract can be reliably estimated refers to that: ① the
total income of the contract can be reliably measured; ②the economic benefits related to the
contract are likely to flow into the enterprise;③The actual contract costs can be clearly
differentiated and reliably measured; ④ the completion of the contract and the costs needed
to complete the contract can be reliably determined.
If the result of the construction contract cannot be reliably estimated, but the contract cost
can be recovered, the contract income can be confirmed according to the actual contract cost
that can be recovered, and the contract cost is confirmed as the contract expense in the
current occurring period; for the contract cost that cannot be recovered, it is immediately
confirmed as the contract cost but not the contract income when it occurs. If the uncertainties
that make the results of the construction contract cannot be reliably estimated are no longer
in existence, the income and expenses related to the construction contract are determined
according to the percentage of completion method.
If the estimated total cost of the contract exceeds the total contract income, the estimated loss
is confirmed as the current expense.
The accumulated costs incurred in the contract in progress, the accumulated recognized gross
profit (loss) and the settled price are stated in the balance sheet as net offset. The part of the
sum of the accumulated costs incurred in the contract in progress and the accumulated
recognized gross profit (loss) that exceeds the settled price is stated as the inventory; the part
of the settlement costs of the contract in progress that exceeds the sum of the accumulated
costs incurred and the accumulated recognized gross profit (loss) are stated as account
collected in advance.
(4) Business income of BOT and PPP
The Company participates in the construction of public infrastructure by means of BOT and
PPP. During the construction period, the Company recognizes the relevant revenue and
expenses from providing services in accordance with ASBE No. 15 - Construction Contracts.
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After the completion of infrastructure, the Company recognizes the revenue from related to
follow-up services in accordance with ASBE No. 14 - Revenue.
Revenue from construction contracts is measured at the fair value of collected consideration
or consideration receivable (generally the amount of construction contracts), and financial
assets or intangible assets are recognized, in the recognition of revenue, in the following
circumstances:
① The contract stipulates that within a certain period after the completion of infrastructure,
the company undertaken the project may unconditionally collect money or other financial
assets of a fixed amount from the party awarding the contract; or, where the services fee
charged by the company undertaken the project is lower than a specified amount, and the
party awarding the contract is responsible for compensating the relevant price difference to
the company undertaken the project in accordance with the contract, in the recognition of
revenue, financial assets are recognized and treated in accordance with the provisions of
ASBE No. 22 - Recognition and Measurement of Financial Instruments.
② The contract stipulates that the Company has the right to collect fees from the party
receiving services within a certain period of time after the completion of relevant
infrastructure. However, if the amount of fees is uncertain, this right does not constitute an
unconditional right to collect cash. The Company undertaken the project shall recognize
intangible assets in the recognition of revenue.
In case that interest on borrowing occurs in the construction process, it shall be treated in
accordance with the provisions of ASBE No. 17 - Borrowing Costs.
In case that the project company fails to provide actual construction services and contracts
the infrastructure construction to other parties, there will be no recognition of revenue from
construction services, and the project price paid in the construction process is recognized as
financial assets or intangible assets in accordance with the contract.
(5) Interest revenue
The amount of interest revenue should be measured and confirmed in accordance with the
length of time for which the Company’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. 26.
(7) Factoring business revenue
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Take the paid-in factoring payment as the fair value to carry out initial measurement.
Subsequent measurement shall be carried out as per the effective interest method according
to the amortized cost. Take the balance between the fair value initially confirmed and
transferred amount of accounts receivable or face value of notes receivable as the interest
income by effective interests method and amortized costs during the financing period or the
rest credit period; interest income shall be recognized by straight-line method if it is due
within 1 year. The profits and losses from termination of recognition, impairment, and
amortization shall be included into the current profits and losses.
(8) Finance lease income
As a financial lessor, the Company recognizes, on the beginning date of the lease term, the
sum of the minimum rental receivables on the lease start date and the initial direct costs as
the entry value of financial lease receivable, and records the unguaranteed residential value.
The difference between the sum of minimum rental receivables plus the unguaranteed
residential value and the present value is recognized as unrealized financing revenue.
Unrealized financing revenue is measured using the real interest rate method during the lease
term and recognized as current financing lease revenue. Contingent rents are included in
current profits and losses when they actually occur.
24. Government Subsidies
A government subsidy means the monetary or non-monetary assets obtained free by the
Company from the government, but excluding the capital invested by the government as the
investor with corresponding owner’s equity. Government subsidies consist of the government
subsidies pertinent to assets and government subsidies pertinent to income. Government
subsidy that is obtained by this Company used for purchasing or acquisition and construction,
or forming the long-term assets by other ways, which is confirmed the government subsidy
related to assets; Other government subsidies shall be defined as the government subsidy that
related with interest. If it does not clear the subsidy object in the government document, the
grants will be divided based on the following modes into government subsidy related to
earnings and government subsidy related to assets: (1) If the particular project of the grants is
clear in the government document, make a division according to the relative proportion of
expense amount of the formed assets in the budget of the particular project and the expense
amount included in the cost, shall review the division ratio required at each balance sheet
date and make changes if necessary; (2) Only make general statements for the application in
the government document, for not specifying the particular item, as the governmental
subsidy related to earnings. If a government subsidy is a monetary asset, it shall be measured
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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.
When this Company actually received the government subsidy, recognize and measure as the
actual measured amount.
If the government grants related to assets are recognized as deferred income and are included
in the profits and losses by installments in a reasonable and systematic way within the service
life of underlying assets. The government grants related to income, using to compensate the
relevant expenses or losses in the later period shall be recognized as the deferred income and
are included in the current profit or loss in the period of confirming the related expenses or
losses; If the government grant is used for compensating the occurred costs or loss, include it
in the current profit and loss directly.
At the same time, for the government subsidies related to assets and profits, carry out
different accounting processing for different parts; for the governmental subsidy hard to
differentiate, the overall governmental subsidies are taken as the governmental subsidy
related to revenue.
The government grants related to daily activities of this Company shall be included in other
revenues or offset related costs according to the economic business nature; Government
subsidies unrelated to daily activities shall be included into the non-operating profits.
If the governmental subsidies confirmed needs to be returned and there is the deferred
earnings balance concerned, the book balance of relevant deferred earnings shall be offset
against, but the excessive part shall be included into current profits and losses; Government
subsidies belonging to other situations shall be directly included into current losses and
profits.
25. 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.
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(2) Deferred income tax assets and deferred income tax liabilities
The difference between the carrying value of certain assets and liabilities and their tax
assessment basis, as well as the temporary difference occurs from the difference between the
carrying 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 Company should recognize the deferred income tax liabilities arising
from 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
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.
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The carrying 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 carrying 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 carrying 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 Company 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 Company 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.
26. Financing 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 Company as the lessee
The rent expenses from operating leases shall be recorded by the lessee in the relevant asset
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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 Company as the lessor
The rent incomes from operating leases shall be recognized as the profits and losses of the
current period by using the straight-line method over each period of the lease term. The
initial direct costs of great amount shall be capitalized when incurred, and be recorded into
current profits and losses in accordance with the same basis for recognition of rent incomes
over the whole lease term. The initial direct costs of small amount shall be recorded into
current profits and losses when incurred. The contingent rents shall be recorded into the
profits and losses of the current period in which they actually arise.
(3) Business of finance leases recorded by the Company as the lessee
On the lease beginning date, the Company 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 Company as the lessor
On the beginning date of the lease term, the Company 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
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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.
27. Other Main Accounting Policies and Estimates
(1)Termination of operation
Termination of operation refers to a separately identifiable constituent part that satisfies one
of the following conditions that has been disposed of by the Company or is classified as
held-for-sale: This constituent part represents an independent main business or a separate
main business area; This constituent part is part of an associated plan that is intended to be
disposed of in an independent main business or a separate major business area; This
constituent part is a subsidiary that is specifically acquired for resale.
For accounting method of termination of operation, please refer to relevant description of
Notes IV. 12 “Assets held for sale and disposal group”
(2) Hedging Accounting
To avoid certain risks, the Company carries out hedging of some financial instruments as
hedging tools. The Company treats hedging that meets specified conditions using hedging
accounting method. The Company's hedging is fair -value hedging, and treats the hedging of
foreign exchange risk with definite undertaking at fair value. At the beginning of hedging,
the Company records the relationship between hedging tools and hedged items, risk
management objectives and strategies for different hedging transactions. In addition, at the
beginning and after the hedging, the Company conducts continuous evaluation of the
effectiveness of hedging to check whether the hedging is highly effective during the
accounting period in which the hedging relationship is designated.
Fair value hedging is a qualified derivative instrument designated for fair value hedging, and
the gains or losses resulting from its changes in fair value are included in the current profits
and losses. The gains or losses of the hedged items due to hedged risks are also included in
the current profits and losses, and the carrying value of the hedged items is also adjusted.
When the Company cancels the designation of hedging relationship, the hedging instrument
expires or is sold, the contract is terminated or exercised, or the conditions are no longer
satisfied, the use of hedging accounting is terminated.
28. Changes in Main Accounting Policies and Estimates
(1) Changes of accounting policies
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The Ministry of Finance issued the Accounting Standards for Business Enterprises
No.22-Recognition and Measurement of Financial Instruments (revised in 2017) (CK
[2017]No.7), Accounting Standards for Business Enterprises No.23-Transfer of Financial
Assets (revised in 2017) (CK[2017]No.8), and Accounting Standards for Business
Enterprises No.24-Hedge Accounting (revised in 2017) (CK[2017]No.9) on 31 March 2017,
and issued the Accounting Standards for Business Enterprises No.37-Presentation of
Financial Instruments (revised in 2017) (CK[2017]No.14) on 2 May 2017(collectively
referred to as “New Financial Instruments Standards”). Enterprises domestically listed are
required to implement the New Financial Instrument Standards since 1 January 2019.
Approved on the 7th Meeting of the 9th Board of Directors of the Company and the Company
starts to implement aforesaid New Financial Instrument Standards since 1 January 2019.
All financial assets confirmed pursuant to New Financial Instrument Standards shall be
measured as per the amortized cost or fair value subsequently. On the execution date of New
Financial Instrument Standards, the business model of financial assets is evaluated and
managed on the basis of existing fact and condition of the Company on that day and the
contractual cash flow characteristics of the financial assets are evaluated on the basis of the
fact and condition upon the initial recognition of financial assets. The financial assets are
divided into three categories: The financial assets measured as per the amortized costs,
measured as per the fair value with the change included in other comprehensive incomes,
measured as per the fair value with the change included in the current profit and loss.
Wherein, for the equity instrument investment measured as per the fair value with change
included in other comprehensive incomes, when such financial assets carry out the
derecognition, the accumulative gains or loss included in other comprehensive incomes
previously will be transferred to the retained earnings from other comprehensive incomes and
aren't included in the current profit and loss.
Pursuant to New Financial Instrument Standards, the Company, on the basis of expected
credit loss, calculates and withdraws the impairment reserve of the financial assets measured
at the amortized cost, the debt instrument investment measured at fair value with change
included in other comprehensive incomes, the lease receivables, contract assets and financial
guarantee contract, and confirms the credit impairment loss.
The Company traces and applies the New Financial Instrument Standards, and may not
conduct the restatement to the inconsistence between the previous comparative financial
statement data involved in the classification and measurement (including the impairment)
and New Financial Instrument Standards. Therefore, for the cumulative impact of the
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standard implementation for the first time, the Company adjusts the retained earnings or
other comprehensive income at the beginning of 2019 and the amount of other related items
in the financial statements, and the financial statements prior years were not restated.
The impacts on the Company due to the implementation of the New Financial Instrument
Standards are as follows:
① Comparative Statements of Classification and Measurement of Financial Instruments
before and after the First Execution Date
A. Influence on Consolidated Financial Statements
31 December 2018 (before adjustment) 1 January 2019 (after adjustment)
Measureme Measurement
Item Carrying value Item Carrying value
nt category category
Monetary Amortized
4,348,144,129.53 Monetary capital Amortized cost 4,348,144,129.53
capital cost
Measured at
fair value
and changes Measured at fair
Financial
thereof value and changes
assets at fair Trading financial
recorded 5,464,984.92 thereof recorded 5,464,984.92
value through assets
into the into the current
profit or loss
current profit of loss
profit of
loss
Notes receivable Amortized cost 3,136,050,327.88
Measured at fair
Notes Amortized value and changes
receivable cost Financing backed
3,329,711,954.15 thereof recorded
by accounts 193,661,626.27
into other
receivable
comprehensive
income
Accounts
Amortized cost 4,457,458,904.32
receivable
Accounts Measured at fair
Amortized value and changes
receivable 4,458,053,586.42 Financing backed
cost thereof recorded
by accounts -
into other
receivable
comprehensive
income
Other Amortized
406,196,649.48 Other receivables Amortized cost 403,907,076.96
receivables cost
Available-for- Amortized Trading financial Measured at fair
633,664,881.33 61,494,666.97
sale financial cost assets value and changes
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Konka Group Co., Ltd. Interim Report 2019
assets thereof recorded
into the current
profit of loss
Measured at fair
value and changes
Other equity
thereof recorded
instruments 23,940,214.36
into other
investment
comprehensive
income
Measured at fair
value and changes
Other non-current
thereof recorded 548,230,000.00
financial assets
into the current
profit of loss
Long-term Amortized Long-term
390,793,038.05 Amortized cost 390,793,038.05
receivables cost receivables
Measured at
fair value
Financial and changes Measured at fair
liabilities at thereof value and changes
Trading financial
fair value recorded 2,459,603.25 thereof recorded 2,459,603.25
liabilities
through profit into the into the current
or loss current profit or loss
profit or
loss
B. Influence on the Company’s Financial Statements
31 December 2018 (before adjustment) 1 January 2019 (after adjustment)
Measurement Measurement
Item Carrying value Item Carrying value
category category
Monetary Amortized
2,124,335,536.69 Monetary capital Amortized cost 2,124,335,536.69
capital cost
Measured at fair
Financial Measured at
value and changes
assets at fair fair value Trading financial
5,464,984.92 thereof recorded 5,464,984.92
value through through profit assets
into the current
profit or loss or loss
profit or loss
Notes Amortized
receivable cost 2,181,466,683.90 Notes receivable Amortized cost 2,181,166,683.90
Financing backed Measured at fair
7,427,246,429.42 300,000.00
by accounts value and changes
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Konka Group Co., Ltd. Interim Report 2019
receivable thereof recorded
into other
comprehensive
income
Accounts
Amortized cost 7,426,742,836.53
receivable
Accounts Measured at fair
Amortized value and changes
receivable 6,661,693,463.33 Financing backed
cost thereof recorded
by accounts -
into other
receivable
comprehensive
income
Other Amortized
326,164,881.33 Other receivables Amortized cost 6,660,069,551.06
receivables cost
Measured at fair
value and changes
Trading financial
thereof recorded 61,494,666.97
assets
into the current
profit of loss
Measured at fair
Available-for- value and changes
Other equity
sale financial Amortized thereof recorded
2,459,603.25 instruments 14,440,214.36
assets cost into other
investment
comprehensive
income
Measured at fair
value and changes
Other non-current
thereof recorded 250,230,000.00
financial assets
into the current
profit of loss
Measured at
Financial fair value and Measured at fair
liabilities at changes value and changes
Trading financial
fair value thereof 2,459,603.25 thereof recorded 2,459,603.25
liabilities
through profit recorded into into the current
or loss the current profit or loss
profit or loss
②Reconciliation Statements on Adjustment of Carrying Value of Original Financial
Instruments to that of New Financial Instruments Classified and Measured in Accordance
with New Financial Instruments Standards on the First Execution Date
A. Influence on Consolidated Financial Statements
Item 31 December 2018 Reclassified Remeasured 1 January 2019
(before adjustment) (after adjustment)
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Konka Group Co., Ltd. Interim Report 2019
Amortized cost:
Notes receivable 3,329,711,954.15
Less: transferred to the 193,661,626.27
item that measured at
fair value and changes
thereof recorded into
other comprehensive
income (financing
backed by accounts
receivable)
Balance presented 3,136,050,327.88
according to new
financial instruments
standards
Accounts receivable 4,458,053,586.42
Remeasurement: 594,682.10
provision for expected
credit losses
Balance presented 4,457,458,904.32
according to new
financial instruments
standards
Other receivables 406,196,649.48
Remeasurement: 2,289,572.52
provision for expected
credit losses
Balance presented 403,907,076.96
according to new
financial instruments
standards
Trading financial assets
Add: transferred from 5,464,984.92
financial assets at fair
value through profit or
loss (classified
according to original
standards)
Balance presented 5,464,984.92
according to new
financial instruments
standards
Available-for-sale 633,664,881.33
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Konka Group Co., Ltd. Interim Report 2019
financial assets
Less: transferred to the 609,724,666.97
item measured at fair
value and changes
thereof recorded into
the current profit or
loss
Less: transferred to the 23,940,214.36
item measured at fair
value and changes
thereof recorded into
other comprehensive
income
Balance presented -
according to new
financial instruments
standards
Measured at fair -
value and changes
thereof recorded into
other comprehensive
income:
Financing backed by ——
accounts receivable
Transferred from 193,661,626.27
notes receivable
Balance presented - 193,661,626.27
according to new
financial instruments
standards
Trading financial -
liabilities
Add: transferred from 2,459,603.25
financial liabilities at
fair value through
profit or loss
(classified according to
original standards)
Balance presented 2,459,603.25
according to new
financial instruments
standards
B. Influence on the Company’s Financial Statements
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Konka Group Co., Ltd. Interim Report 2019
Item 31 December 2018 Reclassified Remeasured 1 January 2019
(before adjustment) (after adjustment)
Amortized cost:
Notes receivable 2,181,466,683.90
Less: transferred to 300,000.00
the item that
measured at fair value
and changes thereof
recorded into other
comprehensive
income (financing
backed by accounts
receivable)
Balance presented 2,181,166,683.90
according to new
financial instruments
standards
Accounts receivable 7,427,246,429.42
Remeasurement: 503,592.89
provision for expected
credit losses
Balance presented 7,426,742,836.53
according to new
financial instruments
standards
Other receivables 6,661,693,463.33
Remeasurement: 1,623,912.27
provision for expected
credit losses
Balance presented 6,660,069,551.06
according to new
financial instruments
standards
Trading financial
assets
Add: transferred from 5,464,984.92
financial assets at fair
value through profit
or loss (classified
according to original
standards)
Balance presented 5,464,984.92
according to new
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Konka Group Co., Ltd. Interim Report 2019
financial instruments
standards
Available-for-sale 326,164,881.33
financial assets
Less: transferred to 311,724,666.97
the item measured at
fair value and changes
thereof recorded into
the current profit or
loss
Less: transferred to 14,440,214.36
the item measured at
fair value and changes
thereof recorded into
other comprehensive
income
Balance presented -
according to new
financial instruments
standards
Measured at fair
value and changes
thereof recorded into
other comprehensive
income:
Financing backed by ——
accounts receivable
Transferred from 300,000.00
notes receivable
Balance presented - 300,000.00
according to new
financial instruments
standards
Trading financial ——
liabilities
Add: transferred from 2,459,603.25
financial liabilities at
fair value through
profit or loss
(classified according
to original standards)
Balance presented 2,459,603.25
according to new
financial instruments
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Konka Group Co., Ltd. Interim Report 2019
standards
③ Reconciliation Statements on Provision for Financial Assets Impairment on the First
Execution Date
A. Influence on Consolidated Financial Statements
Measurement category 31 December 2018 Reclassified Remeasured 1 January 2019
(before adjustment) (after adjustment)
Amortized cost:
Provision for
impairment of notes
receivable
Provision for
impairment of accounts 414,925,927.88 - 594,682.10 415,520,609.98
receivable
Provision for
impairment of other 213,129,067.76 - 2,289,572.52 215,418,640.28
receivables
Provision for
impairment of
10,747,785.64 -10,747,785.64 - -
available-for-sale
financial assets
B. Influence on the Company’s Financial Statements
Measurement 31 December 2018 Reclassified Remeasured 1 January 2019
category (before adjustment) (after adjustment)
Amortized cost:
Provision for
impairment of 246,549,012.31 - 503,592.89 247,052,605.20
accounts receivable
Provision for
impairment of other 187,825,380.06 - 1,623,912.27 189,449,292.33
receivables
Provision for
impairment of
4,997,785.64 -4,997,785.64 - -
available-for-sale
financial assets
(2) Change of accounting estimates
There was no any change of accounting estimate of the Company in the Reporting Period.
29. Critical Accounting Judgments and Estimates
Due to the inside uncertainty of operating activity, the Company needed to make judgments,
estimates and assumption on the carrying 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
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Konka Group Co., Ltd. Interim Report 2019
Company, as well as in consideration of other factors. These judgments, estimates and
assumption would also affect the report amount of income, costs, assets and liabilities, as
well as the disclosure of contingent liabilities on balance sheet date. However, the uncertainty
of these estimates was likely to cause significant adjustment on the carrying value of the
affected assets and liabilities.
The Company 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 Company needed to make judgments, estimates and
assumption on the accounts in the following important items:
(1) Revenue Recognition - Construction Contract
If the construction contract results can be reliably estimated, the Company adopts the method
of completion percentage to confirm the contract income on the balance sheet date. The
percentage of contract completion is confirmed in accordance with the method described in
Note IV, 233, Revenue, and is cumulatively calculated in each fiscal year in which each
construction contract is executed.
Significant judgment is required in determining the percentage of completion, contract costs
incurred, estimated total contract income and total cost, and contract recyclability, and the
project management personnel usually make judgments mainly based on past experience and
work. The estimated total contract income and total cost, as well as estimated changes in
contract execution results, may have an impact on operating income, operating costs, and
profit or loss for the current or subsequent period of the change, and may have a significant
impact.
(2) Categorization of leasing
In accordance with Accounting Standards for Enterprises No. 21 – Leasing, the Company
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
Company had already undertaken all the risk and compensation related with the leased
assets.
(3) Financial assets impairment
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Konka Group Co., Ltd. Interim Report 2019
If the Company adopts the expected credit loss model to evaluate financial instrument
impairment, it's necessary to make significant judgments and estimates on the expected credit
loss model, and all reasonable and well-founded information needs to be taken into account,
including forward-looking information. When such judgments and estimates are made, the
expected changes in the debtor's credit risk are inferred based on historical data in
combination with economic policies, macroeconomic indicators, industry risks, external
market conditions, technological environment, and changes in customer circumstances.
(4) 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
Company 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 carrying value of inventories and the withdrawal and reversal on provision
for bad debts of inventories during the period of estimates being changed.
(5) The fair value of financial instrument
For the financial instruments without active market, the Company recognized the fair value
by various methods. These evaluation methods included discounted cash flow mode analysis,
etc. The Company 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.
For equity instrument investment or contracts with public offers, the cost will not be taken as
the optimal estimation of the fair value by the Company since 1 January 2019.
(6) Provision for impairment of long-term assets
The Company 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 carrying value can’t be recoverable.
When the carrying value of the assets or assets portfolio was more than the recoverable
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Konka Group Co., Ltd. Interim Report 2019
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 Company 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
Company 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 Company 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 Company 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 Company withdrew the
depreciation and amortization by adopting the straight-line method during the service life
after full consideration of the salvage value. The Company 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 Company 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) Deferred income tax assets
Within the limit that it was likely to have sufficient taxable profits to offset the losses, the
Company recognized the deferred income tax assets by all the unused tax losses, which
needed the management level of the Company 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.
(9) Income tax
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Konka Group Co., Ltd. Interim Report 2019
During the routine operating activities, there were some uncertainty in the ultimate tax
treatment and calculation for parts of transactions. Some accounts of such transaction could
be listed as pre-tax expenditures only after the approval of taxation authorities. If there were
any differences between the ultimate result of recognition for these taxation maters and their
initial estimates, the differences would affect the current income tax and deferred income tax
at the period of ultimate recognition.
(10) 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.
(11) Provisions
The Company made the estimation on product quality guarantee, predicted loss of contract
and the fine for delayed delivery etc. and withdrew the relevant provision for provisions 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 Company, the Company measures the provisions
in accordance with the best estimate of the necessary expenses for the performance of the
current duty. The recognition and measurement of provisions were heavily relied on the
judgment of the management team. During the process of making judgment, the Company
needed to appraise the relevant risks, uncertainty and the time value of money and etc.
Of which, the Company 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 Company 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.
(12) Measurement for fair value
Some assets and liabilities of this Company will be measured at fair value in the financial
statements. The board of directors of this Company has established the appraisement
committee (led by the CFO of this Company) to confirm appropriate appraisement
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Konka Group Co., Ltd. Interim Report 2019
technology and input value for measurement of fair value. This Company will apply
available and observable market data during estimating the fair value of some assets and
liabilities. If the input value in Level 1 is not available, this Company will entrust a third
qualified appraiser for the estimation. The appraisement committee will closely cooperate
with the outside appraiser to determine proper estimation technology and input values of the
related models. CFO submits a report to the discoveries of the appraisement committee to the
board of directors of this Company to explain the reasons of fluctuation of fair value of
related assets and liabilities. Related information of the appraisement technology and input
value during the process of confirming the fair value of various assets and liabilities shall be
disclosed in Note X.
V. Taxation
1. Main Taxes and Tax Rate
Category of taxes Specific situation of the taxes rate
VAT
Calculated the output tax at 3%, 5%, 6%, 9%, 10%, 13%, 16% and paid the VAT by the amount
after deducting the deductible withholding VAT at current period, of which the VAT applicable to
easy collection won’t belong to the deductible withholding VAT.
Paid at 7% of the circulating tax actually paid, of which Dongguan Packing, Dongguan Konka,
Boluo Konka, Boluo Konka Precision, Chengdu Anren, XingDa HongYe, Shanghai Xinfeng,
Urban maintenance and Xinfeng Microcrystalline, Binzhou Weiyijie, Beihai Jingmai, Binzhou Econ, Suining Pengxi
construction tax
Kangrun Environment Management Co., Ltd., Dayi Kangrun Water Co., Ltd. of 5%. Subei
Mongol Autonomous County Kangrun Water Co., Ltd. paid by half after paid of 5%, and Jiangxi
Konka and Nano Crystallized Glass of 1%.
For Hong Kong Konka, Konka Household Appliances Investment, Konka Household Appliances
International Trading, Konka Zhisheng, Jiali International, Jiaxin Technology, Kangjietong, Chain
Kingdom Memory Technologies and Konka Mobility whose assessable profit did not exceed
HKD2,000,000.00, they paid at 8.25%, and if their assessable profit exceeded HKD2,000,000.00,
Enterprise income tax
they paid at 16.5%; Telecommunication Technology, Wankaida, Jiangxi Konka, Nano
Crystallized Glass, Dongguan Konka, Econ Technology, E2info and XingDa HongYe of 15%;
and Europe Konka of 31.8% including income tax of 15% and business tax of 16.8%. The
Company as the parent and other subsidiaries paid at 25% of the taxable income.
Education surtax Paid at 3% of the circulating tax actually paid.
Local education surtax Paid at 2% of the circulating tax actually paid. Shanghai Konka paid at 1%.
Note: (1) The original tax rate applied by the Company on VAT taxable sales or imported
goods was 17%/11%. According to the Circular of the Ministry of Finance and the State
Administration of Taxation on the Adjustment of VAT Tax Rate (CS [2018] No. 32), the
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Konka Group Co., Ltd. Interim Report 2019
applicable tax rate is adjusted to 16%/10%, being effective from 1 May 2018.
(2) 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 July 2012.
According to the regulations, the Group’s charging standards were RMB13 per set of TV,
RMB12 per set of refrigerator and RMB7 per set of washing machine.
(3) 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 1
January 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 January 2008 and will
be final settled uniformly by the Company at the year-end.
(4) According to Notice on Implementing the Inclusive Taxation Reducing Policy among the
Small and Micro Businesses issued by the MOF and the State Administration of Taxation
(CS[2019] No.13), from 1 January 2019 to 31 December 2021, for the annual taxable income
not exceeding RMB 1 Million Yuan from the small businesses with little profit, only 25%
shall be included as the taxable income and the corporate income tax shall be paid based on
the 20% tax rate; if the annual taxable income exceeds RMB1 Million but is less than RMB3
Million, only 50% shall be included as the taxable income and the corporate income tax shall
be paid based on the 20% tax rate.
2. Tax Preference and Approved Documents
(1) On 15 August 2017, Shenzhen Konka Telecommunications Technology Co., Ltd., the
subsidiary of this Company obtained the high-tech enterprise certificate (certificate No.:
SZ20170142) jointly issued by Shenzhen Technology Innovation Committee, Finance
Commission of Shenzhen Municipality, Shenzhen Municipal Office, SAT, Shenzhen Local
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Konka Group Co., Ltd. Interim Report 2019
Taxation Bureau, with a valid period of three years. According to related taxation regulations,
Shenzhen Konka Telecommunications Technology Co., Ltd. enjoys related taxation
preferential policies as a high-tech enterprise from 2017 to 2019 and pays the enterprise
income tax as per the preferential tax rate of 15%.
(2) On 31 October 2017, Wankaida, the subsidiary of this Company obtained the High-tech
Enterprise Certificate (certificate No.: GR201744204716) joint issued by Shenzhen
Technology Innovation Committee, Finance Committee of Shenzhen Municipality, Shenzhen
Municipal Office, SAT and Shenzhen Local Taxation Bureau with a valid period of three
years. According to related taxation regulations, Wankaida enjoys related taxation
preferential policies as a high-tech enterprise from 2017 to 2019 and pays the enterprise
income tax as per the referential tax rate of 15%.
(3) On 23 August 2017, Jiangxi Konka New Material Technology Co., Ltd., the subsidiary of
this Company obtained the High-tech Enterprise Certificate (certificate No.:
GR201736000497) jointly issued by Department of Science and Technology of Jiangxi
Province, Department of Finance of Jiangxi Province, Jiangxi Provincial Office, SAT, Jiangxi
Local Taxation Bureau with a valid period of three years. According to related taxation
regulations, the company enjoys related taxation preferential policies as a high-tech
enterprise from 2017 to 2019 and pays the enterprise income tax as per the preferential tax
rate of 15%.
(4) On 23 August 2017, Jiangxi Golden Phoenix Nano Crystallized Glass Co., Ltd., the
subsidiary of Jiangxi Konka obtained the High-tech Enterprise Certificate (certificate No.:
GR201736000110) jointly issued by Department of Science and Technology of Jiangxi
Province, Department of Finance of Jiangxi Province, Jiangxi Provincial Office, SAT, Jiangxi
Local Taxation Bureau with a valid period of three years. According to related taxation
regulations, the company enjoys related taxation preferential policies as a high-tech
enterprise from 2017 to 2019 and pays the enterprise income tax as per the preferential tax
rate of 15%.
(5) On 1 November 2017, Dongguan Konka Electronic Co., Ltd., the subsidiary of this
Company obtained the High-tech Enterprise Certificate (certificate No.: GR201744003812)
jointly issued by Department of Science and Technology of Guangdong Province,
Department of Finance of Guangdong Province, Guangdong Provincial Office, SAT,
Guangdong Local Taxation Bureau with a valid period of three years. According to related
taxation regulations, the company enjoys related taxation preferential policies as a high-tech
enterprise from 2017 to 2019 and pays the enterprise income tax as per the preferential tax
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Konka Group Co., Ltd. Interim Report 2019
rate of 15%.
(6) On 28 December 2017, Econ Technology, a subsidiary of the Company, obtained the
High-tech Enterprise Certificate (certificate No.: GR201737001495) jointly issued by
Department of Science and Technology of Shangdong Province, Department of Finance of
Shangdong Province, Shangdong Provincial Office, SAT, Shangdong Local Taxation Bureau
with a valid period of three years. According to the relevant tax regulations, the company
enjoys related tax incentives for high-tech companies for three consecutive years from 2017
to 2019, and is subject to corporate income tax at a preferential rate of 15%.
(7) On 16 October 2018, Shenzhen E2info Network Technology Co., Ltd., the subsidiary of
this Company obtained the high-tech enterprise certificate (certificate No.: GR201844201969)
jointly issued by Shenzhen Technology Innovation Committee, Finance Committee of
Shenzhen Municipality, Shenzhen Taxation Bureau of SAT with a valid period of three years.
According to related taxation regulations, the company enjoys related taxation preferential
policies as a high-tech enterprise from 2018 to 2020 and pays the enterprise income tax as
per the preferential tax rate of 15%.
(8) On 28 November 2018, the Company’s subsidiary XingDa HongYe received the
High-tech Enterprise Certificate (No.GR201844008446 with the 3-year period of validity)
jointly issued by Department of Science and Technology of Guangdong Province,
Department of Finance of Guangdong Province and State Administration of Taxation
(Guangdong Provincial Tax Service). According to relevant tax regulations, from 2018 to
2020, the enterprise shall be eligible for enjoying relevant preferential tax policies as a new
high-tech enterprise and corresponding corporate income tax shall be paid based on the
preferential tax rate of 15%.
(9) According to the Notice on Promoting the Development of VAT, Business Tax and
Enterprise Income Tax Policy for Energy-Saving Service Industry issued by the Ministry of
Finance and the State Administration of Taxation (Finance and Taxation [2010] No. 110),
Lairun Holdings, Binhai Sewage Treatment and Donggang Kangrun Environment
Management Co., Ltd. enjoys the preferential policy of tax exemptions for three years and
halved in next three years.
(10) According to the fiscal and taxation document [2011] No. 100 published by the Ministry
of Finance and the State Administration of Taxation, for the VAT general taxpayers who sell
their self-developed and produced software products, the VAT shall be levied at the rate of
13%, and then the part that the actual tax burden on their VAT exceeds 3 will be implemented
with the policy of immediate withdrawal. The Company’s subsidiaries, Wankaida
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Konka Group Co., Ltd. Interim Report 2019
Technology and Electronics Technology all enjoy this preferential policy.
(11) According to the regulations of the Special Catalogue of VAT Concessions for Products
and Labors with Comprehensive Utilization of Resources issued by the Ministry of Finance
and the State Administration of Taxation (Finance and Taxation [2015] No. 78), the
wastewater treatment business operated by Lairun Holdings, a subsidiary of Econ
Technology, belongs to the this catalogue. Then after it has been levied the VAT at a rate of
13 %, the actual tax burden on the wastewater treatment income tax will be refunded in
accordance with the 70% of the actual tax burden, and the actual tax burden on the renewable
water income VAT will be refunded immediately at 50%. That Lairun Holdings enjoyed the
tax concession was registered and recorded in 25 August 2017 in Laizhou Taxation Bureau of
Shandong Province.
VI. Notes on Major Items in Consolidated Financial Statements of the Company
Unless otherwise noted, the following annotation item (including the main items，annotation
of the financial statement of the Company), the period-begin refers to 1 January 2019, the
period-end refers to 30 June 2019; the Current Period/Reporting Period refers to H1 of 2019
and the same period of last year refers to H1 of 2018.
1. Monetary Capital
Item Ending balance Beginning balance
Cash on hand 343,490.38 130,105.31
Bank deposits 4,700,902,044.15 3,434,019,376.41
Other monetary capital 969,021,586.02 913,994,647.81
Total 5,670,267,120.55 4,348,144,129.53
Of which: total amount deposited overseas 166,232,584.79 518,005,414.06
Note: ① The ending balance of other monetary capital was fixed time deposit, various cash
deposits which cannot be withdrawn at any time and other deposits with limitation on use.
For details, refer to Note VI. 64. Assets with Restricted Ownership or Right of Use.
② As of 30 June 2019, the monetary capital deposited overseas by the Company was
RMB166,232,584.79 (31 December 2018: RMB518,005,414.06).
2. Trading Financial Assets
Item Ending balance Beginning balance
Financial assets at fair value through profit or loss
150
Konka Group Co., Ltd. Interim Report 2019
61,494,666.97 61,494,666.97
Including: Equity instrument investment
5,464,984.92
Other
61,494,666.97 66,959,651.89
Total
3. Notes Receivable
(1) Notes Receivable Listed by Category
Item Ending balance Beginning balance
Bank acceptance bill 1,681,552,756.81 2,313,409,006.75
Commercial acceptance bill 320,882,295.70 822,641,321.13
Total 2,002,435,052.51 3,136,050,327.88
(2) Notes Receivable Pledged by the Company at the Period-end
Item Amount pledged at the end of the term
Bank acceptance bill 1,186,883,020.53
Total 1,186,883,020.53
(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 not terminated recognition
Item
at the period-end at the period-end
Bank acceptance bill 139,251,145.62 -
Total 139,251,145.62 -
(4) Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to Execute
the Contract or Agreement
Item Amount of the notes transferred to accounts receivable at the period-end
Commercial acceptance bill 864,749,189.84
Total 864,749,189.84
4. Accounts Receivable
(1) Disclosed by Aging
Aging Ending balance
Within 1 year 4,143,821,438.63
1 to 2 years 1,216,489,500.95
2 to 3 years 38,764,411.87
3 to 4 years 9,051,831.92
Over 4 years 515,179,630.58
Subtotal 5,923,306,813.95
151
Konka Group Co., Ltd. Interim Report 2019
Less: bad debt provision 454,808,634.74
Total 5,468,498,179.21
(2) Listed by Withdrawal Methods for Bad Debt Provision
Ending balance
Carrying amount Bad debt provision
Category
Withdrawal
Proportion Carrying value
Amount Amount proportion
(%)
(%)
Accounts
receivable, for
which the
independent 962,812,125.96 16.25 146,605,971.30 15.23 816,206,154.66
provision for
expected credit
losses
Accounts
receivable, for
which the
provision for
expected credit
losses was
withdrawn
according to
groups
Including: aging
4,310,261,291.73 72.77 256,888,183.88 5.96 4,053,373,107.85
group
Project
650,233,396.26 10.98 51,314,479.56 7.89 598,918,916.70
payment group
Total 5,923,306,813.95 100.00 454,808,634.74 7.68 5,468,498,179.21
(Continued)
Beginning balance
Carrying amount Bad debt provision
Category
Withdrawal
Proportio Carrying value
Amount Amount proportion
n (%)
(%)
Accounts
receivable, for
which the
independent 889,455,396.62
1,028,107,560.50 21.10 138,652,163.88 13.49
provision for
expected credit
losses
152
Konka Group Co., Ltd. Interim Report 2019
Accounts
receivable, for
which the
provision for
expected credit
losses was
withdrawn
according to
groups
Including: aging
2,981,086,603.98
group 3,209,444,955.09 65.86 228,358,351.11 7.12
Project
586,916,903.72
payment group 635,426,998.71 13.04 48,510,094.99 7.63
Total 4,872,979,514.30 100.00 415,520,609.98 8.53 4,457,458,904.32
① Accounts receivable, for which, the independent provision for bad debt is made at the
period-end
Ending balance
Withdra
Accounts receivable (by
wal
unit) Carrying amount Bad debt provision Withdrawal reason
percenta
ge (%)
Shanghai Huaxin
International Group Co., 300,027,889.84 30,002,788.98 10.00 Debt default
Ltd
Hongtu Santu High-tech Difficulty in working capital
200,000,000.00 10,000,000.00 5.00
Technology Co., Ltd. turnover and debt default
Elion Resources Group Difficulty in working capital
115,000,000.00 5,750,000.00 5.00
Co., Ltd turnover for the counterpart
China Nuclear
Difficulty in working capital
Engineering Construction 84,500,000.00 4,225,000.00 5.00
turnover for the counterpart
Group Co., Ltd
No.1 Engineering
Company Limited of
Difficulty in working capital
CCCC First Harbor 65,221,300.00 6,522,130.00 10.00
turnover for the counterpart
Engineering Company
Limited
China Energy Electric Difficulty in working capital
50,000,000.00 5,000,000.00 10.00
Fuel Co., Ltd turnover for the counterpart
Difficulty in working capital
Tahoe Group Co. Ltd 50,000,000.00 2,500,000.00 5.00
turnover for the counterpart
DSCHOLDINGSLIMITE Difficult to recover for
24,462,454.04 24,462,454.04 100.00
D bankruptcy
H-BUSTERDOBRASILI Difficult to recover for
18,907,586.44 18,907,586.44 100.00
NDUSTRIA bankruptcy
153
Konka Group Co., Ltd. Interim Report 2019
TreeviewBusinessRegistra
11,262,555.50 1,341,891.83 11.91 Difficult to recover all
tion
HENAN BROADCAST
& TELEVISION 4,580,000.00 1,374,000.00 30.00 Difficult to recover all
NETWORK CO., LTD.
HILEVELCONSUMERI Difficult to recover for
3,548,995.63 3,548,995.63 100.00
TALIAS.P.A bankruptcy
Other 35,301,344.51 32,971,124.38 93.40 ——
Total 962,812,125.96 146,605,971.30 15.23 ——
② In the group, accounts receivable, for which, the provision for bad debt was made
according to aging groups
Ending balance
Item Withdrawal proportion
Carrying amount Bad debt provision
(%)
3,992,095,976.11 81,039,548.32 2.03
Within 1 year
151,935,952.49 11,197,679.70 7.37
1 to 2 years
1,833,787.58 406,183.95 22.15
2 to 3 years
415,093.97 264,290.33 63.67
3 to 4 years
163,980,481.58 163,980,481.58 100.00
Over 4 years
4,310,261,291.73 256,888,183.88 5.96
Total
③ In the group, accounts receivable, for which, the provision for bad debt was made
according to project payment groups
Ending balance
Item Withdrawal proportion
Carrying amount Bad debt provision
(%)
Within 1 year 436,255,337.94 21,812,766.90 5
1 to 2 years 176,431,094.87 17,643,109.49 10
2 to 3 years 34,818,909.77 10,445,672.93 30
3 to 4 years 2,565,042.33 1,282,521.17 50
Over 4 years 163,011.35 130,409.07 80
Total 650,233,396.26 51,314,479.56 7.89
(3) Bad Debt Provision
Category Beginning Increase/decrease Ending balance
154
Konka Group Co., Ltd. Interim Report 2019
balance Recovered or
Withdrawal Other decrease
reversed
Accounts
receivable, for
which the
independent 138,652,163.88 15,972,908.35 7,297,925.88 721,175.05 146,605,971.30
provision for
expected credit
losses
Accounts
receivable, for
which the
provision for
expected credit
losses was
withdrawn
according to
groups
Including:
228,358,351.11 29,952,918.14 1,423,085.37 256,888,183.88
aging group
Project 48,510,094.99 4,498,210.07 1,693,825.50 - 51,314,479.56
payment group
Total 415,520,609.98 50,424,036.56 8,991,751.38 2,144,260.42 454,808,634.74
Of which, bad debt provision recovered or reversed during the Reporting Period with
significant amount
Entity Amount recovered or reversed Recovery method
Jizhong Energy International Logistics
3,000,000.00 Collection
Group Co., Ltd
Total 3,000,000.00 ——
(4) Accounts Receivable without Actual Verification for the Reporting Period
(5) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the
Arrears Party
The total amount of top five of account receivable of ending balance collected by arrears
party was RMB1,682,366,170.42, accounting for 28.40% of total closing balance of account
receivable, the relevant ending balance of bad debt provision withdrawn was
RMB68,289,781.16.
5. Financing Backed by Accounts Receivable
155
Konka Group Co., Ltd. Interim Report 2019
Ending amount
Item Change in fair
Cost Fair value at period-end
value
Notes receivable 107,299,247.91 107,299,247.91
Total 107,299,247.91 107,299,247.91
6. Prepayments
(1) List by Aging Analysis
Ending amount Beginning amount
Carrying amount Carrying amount
Aging Bad debt Bad debt
Proporti Proportion
Amount provision Amount provision
on (%) (%)
Within 1 year 2,939,552,528.44 99.58 240,694.09 1,029,600,745.72 98.97 57,459.57
1 to 2 years 8,528,194.82 0.29 113,522.85 7,171,926.78 0.69 435,914.85
2 to 3 years 829,001.69 0.03 - 543,662.41 0.05 -
Over 3 years 3,011,719.40 0.10 2,879,285.83 3,034,224.15 0.29 2,878,017.08
Total 2,951,921,444.35 100.00 3,233,502.77 1,040,350,559.06 100.00 3,371,391.50
Notes: (1) Significant prepayment with aging more than 1 year was mainly the prepayment
of companies with no cooperation.
(2) The total amount of top five of prepayment of ending balance collected by arrears party
was RMB 818,482,404.96, accounting for 27.73% of total ending balance of prepayment.
(3) The withdrawal amount of bad debt provision this year was of RMB 217,172.46; the
collected or reversed bad debt provision was RMB 357,050.05 for the Reporting Period; and
there was no write-off bad debt provision; the increased amount was of RMB 1,988.86 due to
changes in exchange rate.
7. Interest Receivable
Item Ending balance Beginning balance
Fixed time deposits 2,123,030.91 3,440,237.63
Entrusted loans 61,111.11 48,888.89
Factoring interest 570,555.88 570,555.88
Total 2,754,697.90 4,059,682.40
156
Konka Group Co., Ltd. Interim Report 2019
8. Dividends receivable
Item (or investees) Ending balance Beginning balance
Chongqing Qingjia 547,848.62 547,848.62
Total 547,848.62 547,848.62
9. Other Receivables
① Listed by aging
Aging Ending balance Beginning balance
Within 1 year 866,539,175.80 256,528,018.58
1 to 2 years 119,169,126.08 135,441,669.13
2 to 3 years 13,962,189.10 14,670,505.12
3 to 4 years 85,954,676.09 86,704,294.17
4 to 5 years 20,288,652.89 22,177,189.05
Over 5 years 105,258,349.82 103,804,041.19
Subtotal 1,211,172,169.78 619,325,717.24
Less: bad debt provision 223,508,385.89 215,418,640.28
Total 987,663,783.89 403,907,076.96
② Classified by Account Nature
Nature Ending balance Beginning balance
Energy-saving subsidies 183,063,658.63 165,912,605.30
Intercourse funds 152,402,680.00 152,402,680.00
Borrowings of related-parties 549,297,719.43 130,429,176.41
Buyout financial service income
161,326,980.03 59,252,474.98
receivable
Other external borrowings 73,269,178.08 29,403,385.01
Deposit and margin 18,228,687.41 18,228,687.41
Equity transferred money 3,207,318.07 3,500,807.51
Pretty cash 70,375,948.13 60,195,900.62
Subtotal 1,211,172,169.78 619,325,717.24
Less: bad debt provision 223,508,385.89 215,418,640.28
Total 987,663,783.89 403,907,076.96
157
Konka Group Co., Ltd. Interim Report 2019
③ Withdrawal of Bad Debt Provision
Phase I Phase II Phase III
Expected credit Expected credit
Bad debt Expected credit losses for the losses for the
Total
provision losses over the next entire duration entire duration
12 months (no credit (with credit
impairment) impairment)
Balance on
1 January 41,911,687.09 173,506,953.19 215,418,640.28
2019
In the
Reporting
Period,
Carrying
amount of
other
receivables
on 1
January
2019:
——Transf
erred to the
Phase II
——Transf
erred to the
Phase III
——Transf
erred back
to the Phase
II
——Transf
erred back
to the Phase
I
Withdrawal 8,409,900.19 237,782.80 8,647,682.99
Recovery 463,866.81 463,866.81
Write-off -
Verification -
Other
94,070.57 94,070.57
changes
Balance on
30 June 49,763,649.90 - 173,744,735.99 223,508,385.89
2019
158
Konka Group Co., Ltd. Interim Report 2019
Ending balance
Carrying amount Bad debt provision
Category
Proportion Carrying value
Amount Amount Proportion (%)
(%)
Other receivables,
for which the
independent
184,507,567.33 15.23 173,744,735.99 94.17 10,762,831.34
provision for
expected credit
losses
Other receivables
withdrawn bad
debt provision
according to credit
risks
characteristics:
Group 1: aging
600,472,545.09 49.58 45,501,729.33 7.58 554,970,815.76
group
Group 2: low-risk
426,192,057.36 35.19 4,261,920.57 1.00 421,930,136.79
group
Total 1,211,172,169.78 100 223,508,385.89 18.45 987,663,783.89
Beginning balance
Carrying amount Bad debt provision
Category Propo
Proportion Carrying value
Amount rtion Amount
(%)
(%)
Other receivables, for which the
independent provision for 184,619,007.33 29.80 173,506,953.19 93.98 11,112,054.14
expected credit losses
Other receivables withdrawn bad
debt provision according to
credit risks characteristics:
Group 1: aging group 388,967,784.28 62.81 41,436,970.43 10.65 347,530,813.85
Group 2: low-risk group 45,738,925.63 7.39 474,716.66 1.04 45,264,208.97
Total 619,325,717.24 100 215,418,640.28 34.78 403,907,076.96
④ Bad Debt Provision
Increases/decrease
Category Beginning balance Other Ending balance
Withdrawal Recovered or reversed
decrease
159
Konka Group Co., Ltd. Interim Report 2019
Other receivables, for
which the
independent 173,506,953.19 237,782.80 - - 173,744,735.99
provision for
expected credit losses
Aging group 41,436,970.43 4,622,696.27 463,866.81 94,070.57 45,501,729.33
Low-risk group 474,716.65 3,787,203.92 - 4,261,920.57
Total 215,418,640.28 8,647,682.99 463,866.81 94,070.57 223,508,385.89
⑤ There was no other receivables with actual verification for the Reporting Period.
⑥Top 5 Other Receivables in Ending Balance Collected according to the Arrears Party
Proportion of
ending balance of Ending balance of
Name of units Nature Ending balance Aging
the total other bad debt provision
accounts receivable
Administrative
Committee of
Intercourse funds 297,256,700.00 With 1 year 24.54 2,972,567.00
Chuzhou
Development Zone
National
energy-saving and
4 to 5 years and
benefiting people Subsidies 152,402,680.00 12.58 152,402,680.00
over 5 years
(Energy-saving
subsidies)
Jiangxi Meiji Intercourse funds of
Industry Co., ltd original
1 to 2 years and
shareholders of 99,798,640.31 8.24 2,205,549.95
within 1 year
subsidiaries
acquired
Equity transfer of Share transfer
Dai Rongxing and accounts
other intercourse Intercourse funds of 1 to 2 years and
83,265,018.32 6.87 2,489,085.90
funds original funds of within 1 year
subsidiaries
acquired
Yantai Hengxiang
Robots Technology Cash deposit 48,000,000.00 1 to 2 years 3.96 4,800,000.00
Co., Ltd.
Total 680,723,038.63 56.19 164,869,882.85
⑦ There was no accounts receivable involved in government subsidies for the Reporting
Period
⑧ There was no other receivables derecognized for transfer of financial assets for the
160
Konka Group Co., Ltd. Interim Report 2019
Reporting Period.
⑨ There was no financial assets and liabilities generated from transfer of other receivables
and continuous involvement for the Reporting Period
10. Inventory
(1) Category of Inventory
Ending balance
Of which: the
Item capitalized
Carrying amount Falling price reserves Carrying value
amount of the
borrowings
Development projects of
the property:
Development cost - -
Land intended to develop -
Subtotal - -
Non-development
projects of the
property:
Raw materials 1,608,135,086.58 76,153,832.27 1,531,981,254.31
Semi-finished product 122,456,507.95 9,309,280.42 113,147,227.53
Inventory goods 4,420,172,314.59 299,560,364.57 4,120,611,950.02
Finished but unsettled
assets from construction 44,495,341.20 - 44,495,341.20
contract
Subtotal 6,195,259,250.32 385,023,477.26 5,810,235,773.06
Total 6,195,259,250.32 385,023,477.26 5,810,235,773.06
(Continued)
Beginning balance
Of which: the
Item Falling price
Carrying amount capitalized amount Carrying value
reserves
of the borrowings
Development projects
of the property:
161
Konka Group Co., Ltd. Interim Report 2019
Beginning balance
Of which: the
Item Falling price
Carrying amount capitalized amount Carrying value
reserves
of the borrowings
Development cost 85,167,073.18 2,470,133.87 - 85,167,073.18
Land intended to
develop 70,855,200.00 - - 70,855,200.00
Subtotal 156,022,273.18 2,470,133.87 - 156,022,273.18
Non-development
projects of the
property:
Raw materials 1,122,370,078.37 - 73,754,748.97 1,048,615,329.40
Semi-finished product 89,334,764.13 - 10,260,152.74 79,074,611.39
Inventory goods 4,518,051,460.16 - 330,081,328.25 4,187,970,131.91
Finished but unsettled
15,922,881.17
assets from construction - - 15,922,881.17
contract
Subtotal 5,745,679,183.83 - 414,096,229.96 5,331,582,953.87
Total 5,901,701,457.01 2,470,133.87 414,096,229.96 5,487,605,227.05
(2) List of the Development Cost
Expected completion time of
Name of item Starting time Beginning amount Ending amount
the next batch
Innovation Center April 2018 December 2022 85,167,073.18 -
Total 85,167,073.18 -
(3) Falling Price Reserves of Inventory
Increased amount Decreased amount
Increase
Item Beginning balance Reverse or Decrease of losing Ending balance
Withdrawal of
write-off controlling right
merger
Raw
73,754,748.97 3,721,593.79 801,912.81 76,153,832.27
materials 520,597.68
Goods in 10,260,152.74 663,571.13 861,745.33 752,698.12 9,309,280.42
162
Konka Group Co., Ltd. Interim Report 2019
Increased amount Decreased amount
Increase
Item Beginning balance Reverse or Decrease of losing Ending balance
Withdrawal of
write-off controlling right
merger
process
Inventory
330,081,328.25 8,437,560.87 36,898,999.61 299,560,364.57
goods 2,059,524.94
Total 414,096,229.96 12,822,725.79 - 38,562,657.75 3,332,820.74 385,023,477.26
(4) Withdrawal Provision Basis of the Falling Price of the Inventory and the Reasons of the
Reversed or Write-off
Specific basis of withdrawal of
Item falling price reserves of Reasons for reverse Reasons for write-off
inventory
The realizable net value was Sold or disposed in the current
Raw materials —
lower than the carrying value period
The realizable net value was Sold or disposed in the current
Goods in process —
lower than the carrying value period
The realizable net value was
Inventory goods — Sold in the current period
lower than the carrying value
(5) Ending balance of the inventory which includes capitalized borrowing expenses was
RMB0.
(6) Finished but Unsettled Assets from Construction Contract
Item Amount
Accumulatively incurred costs 714,468,271.18
Accumulatively recognized gross margin 129,583,491.29
Less: estimated loss -
Settled amounts 799,556,421.27
Finished but Unsettled Assets from Construction Contract 44,495,341.20
11. Current Portion of Non-current Assets
Item Ending balance Beginning balance Remark
For details, see
Current portion of long-term receivable 53,237,851.30 22,318,208.13
Note VI. 13
163
Konka Group Co., Ltd. Interim Report 2019
Item Ending balance Beginning balance Remark
Total 53,237,851.30 22,318,208.13
12. Other Current Assets
Item Ending balance Beginning balance
Financial products
Principal and interest of entrusted loans to joint
1,148,697,055.18 1,824,523,111.11
ventures
Entrusted financing - 30,000,000.00
Unreached bank deposits
Prepayments and deductible taxes, and refund of 591,353,068.73
794,991,256.00
tax for report receivable
Prepayment of land purchase - 75,450,000.00
Others 26,485,236.11 19,251,774.87
Total 1,766,535,360.02 2,744,216,141.98
13. Long-term Receivables
(1) List of Long-term Receivables
Ending balance Beginning balance
Interval
Imp Imp
of
airm airm
Item discount
Carrying amount ent Carrying value Carrying amount ent Carrying value
prov prov rate
ision ision
Finance leasing 4.35%-
115,943,583.65 - 115,943,583.65 55,893,266.81 - 55,893,266.81
amount 8.78%
Of which: unrealized 4.35%-
11,363,170.60 - 11,363,170.60 4,975,887.40 - 4,975,887.40
financing income 8.78%
Cash deposits of -
long-term 7,801,495.81 - 7,801,495.81 7,801,495.81 - 7,801,495.81
receivables
Long-term -
receivables of
349,416,483.56 - 349,416,483.56 349,416,483.56 - 349,416,483.56
projects with
franchise tights
Less: Current -
portion of long-term
receivables (for 53,237,851.30 - 53,237,851.30 22,318,208.13 - 22,318,208.13
details, see Note VI.
11)
164
Konka Group Co., Ltd. Interim Report 2019
Ending balance Beginning balance
Interval
Imp Imp
of
airm airm
Item discount
Carrying amount ent Carrying value Carrying amount ent Carrying value
prov prov rate
ision ision
Total
419,923,711.72 - 419,923,711.72 390,793,038.05 - 390,793,038.05 -
(2) List of Projects with Franchise Rights
Operatio
Item Type Project scale Franchise right Date of contract
n
PPP Project of water
Right of charge for
supply and sewage PPP 163,558,100.00 July 2016 Good
sewage disposal
Rushan Silver Beach
165
Konka Group Co., Ltd. Interim Report 2019
(3) Changes in Long-term Receivables of Projects with Franchise Rights
Increase Decrease
Merg
er Newly Of which:
increa increa reclassified into
Initial invested Princi Interes
Item Beginning balance se in sed Other Ending balance current portion of
amount Interest pal t
the invest decrea long-term
income recove recove
Repor ment se receivables
r r
ting amoun
Perio t
d
PPP Project of water supply and
349,416,483.56 349,416,483.56 - - - - - - 349,416,483.56 -
sewage of Rushan Silver Beach
Total 349,416,483.56 349,416,483.56 - - - - - - 349,416,483.56 -
14. Long-term Equity Investment
Increase/decrease in the Reporting Period
Adjustment
Investment profit and loss
Investee Beginning balance of other
Additional Increase for Decreased Other equity
recognized under the equity
investment combinations investment comprehens changes
method
ive income
Konka Ventures Development (Shenzhen)
2,359,048.04 - - - -490,743.29 - -
Co., Ltd.
Nanjing Intelligence Optical Information
1,605,469.87 - - - -144,833.79 - -
Technology Research Institute Co., Ltd
166
Konka Group Co., Ltd. Interim Report 2019
Increase/decrease in the Reporting Period
Adjustment
Investment profit and loss
Investee Beginning balance of other
Additional Increase for Decreased Other equity
recognized under the equity
investment combinations investment comprehens changes
method
ive income
Guoguang Ruilian (Shenzhen) Internet
777,956.58 - - - -514,281.92 - -
Technology Co., Ltd.
Chongqing Qingjia Electronics Co., Ltd. 19,750,739.24 - - - - - -
Shenzhen Jielunte Technology Co., Ltd. 83,329,443.68 - - - -2,592,517.96 - -
Panxu Intelligence Co., Ltd. 49,170,159.29 - - - 902,086.78 - -
Beijing Konka Jingyuan Technology Co.,
759,258.94 - - - - - -
Ltd.
Oriexcellent (Zhuhai) Assets Management
2,757,557.31 - - - -836,000.00 - -
Co., Ltd.
Feidi Technology (Shenzhen) Co., Ltd. 4,868,798.36 12,000,000.00 - - -647,925.56 - -
Nanjing K-Star Technology Industrial
50,929,429.45 - - 17,000,000.00 - - -
Park Operation Management Co., Ltd.
Weihai City Water Environmental
2,440,433.26 - - - - - -
Protection Technology Co., Ltd.
Weihai Yiheng Environment Technology
4,571,472.70 - - - - - -
Co.,Ltd.
Laizhou Lairun Financial Leasing Co.,
- - - - - - -
Ltd.
167
Konka Group Co., Ltd. Interim Report 2019
Increase/decrease in the Reporting Period
Adjustment
Investment profit and loss
Investee Beginning balance of other
Additional Increase for Decreased Other equity
recognized under the equity
investment combinations investment comprehens changes
method
ive income
Binzhou Beihai Weiqiao Solid Waste
59,671,933.63 - - - 9,761,794.24 - -
Disposal Co., Ltd.
Shandong Bishuiyuan Environmental
24,745,069.48 - - - - - -
Protection Technology Co., Ltd.
Shenzhen RF-LINK Technology Co., Ltd. 100,277,552.55 - - - 70,860.88 - --
Shenzhen Konka Information Network
26,656,667.58 - - - -10,458,637.68 - -
Co., Ltd.
Shenzhen Yaode Technology Co., Ltd. 222,210,835.18 - - - 1,615,602.55 - -
Chutian Dragon Co., Ltd. 624,845,604.93 - - - 13,279,493.50 - --
Konka Green, and Konka Technology
78,409,903.14 - - - -180,177.55 - -
(③)
Zhuhai Jinsu Plastic Co., Ltd. 11,040,246.82 - - - 428,175.28 - -
Shenzhen Konka Intelligent Electrical
2,287,478.52 - - - -152,488.28 - -
Appliance Technology Co., Ltd.
Shenzhen Zhongbing Konka technology
10,617,873.79 - - - -2,230,059.14 - -
Co., Ltd.
Guangdong Hotcomm Information
- - - - - - -
Technology Co., Ltd.
Shenzhen OCT Life Network Technology 3,592,514.06 - - 3,592,514.06 - - -
168
Konka Group Co., Ltd. Interim Report 2019
Increase/decrease in the Reporting Period
Adjustment
Investment profit and loss
Investee Beginning balance of other
Additional Increase for Decreased Other equity
recognized under the equity
investment combinations investment comprehens changes
method
ive income
Co., Ltd.
Kunshan Konka Electronics Co., Ltd. 200,694,466.80 - - - -4,811,843.11 - -
Kunshan Kangsheng Investment
269,673,264.00 - - - - - -
Development Co., Ltd.
Anhui Kaikai Shijie E-commerce Co.,
436,685,064.57 - - - - - -
Ltd.
Shenzhen Bosser New Materials Co., Ltd. 79,859,338.44 - - - 1,056,895.31 - -
Heilongjiang Longkang Zhijia
6,400,480.52 - - - -239,050.00 - -
Technology Co., Ltd
Shanxi Silk Road Yunqi Intelligent
4,522,509.33 - - - - - -
Technology Co., Ltd.
Wuhan Tianyuan Environmental
252,270,255.47 - - - 5,620,617.83 - -
Protection Co., Ltd.
Shandong Konka Smart Electrical
- 4,000,000.00 - - -287,791.69 - -
Appliance Co., Ltd.
Beijing Aowei Huyu Technology Co.,
- 6,000,000.00 - - 10,492.58 - -
Ltd.
Yilingfang - - - - -935.98 - -
Huarun Environment Water Co., Ltd. - 15,819,210.00 - - - - -
169
Konka Group Co., Ltd. Interim Report 2019
Increase/decrease in the Reporting Period
Adjustment
Investment profit and loss
Investee Beginning balance of other
Additional Increase for Decreased Other equity
recognized under the equity
investment combinations investment comprehens changes
method
ive income
Henan Konka Smart Electrical Appliance
- 1,600,000.00 - - -617,458.44 - -
Co., Ltd.
Shenzhen E-display Co., Ltd. - - - - - - -
Chuzhou Konka TID - - - - - - -
Huoqiu Kangrun Kaitian Environment
- 10,000,000.00 - - - - -
Water Co., Ltd.
Total 2,637,780,825.53 49,419,210.00 - 20,592,514.06 8,541,274.56 - -
(Continued)
Increase/decrease in the Reporting Period
Declaration of Withdrawn Cost method Ending balance of
Financial assets
Investee Ending balance
cash dividends or impairment converted into converted into Other impairment provision
equity method
profits provision equity method
Konka Ventures Development (Shenzhen)
- - - - - 1,868,304.75 -
Co., Ltd.
Nanjing Intelligence Optical Information
- - - - - 1,460,636.08 -
Technology Research Institute Co., Ltd
Guoguang Ruilian (Shenzhen) Internet - - - - - 263,674.66 -
170
Konka Group Co., Ltd. Interim Report 2019
Increase/decrease in the Reporting Period
Declaration of Withdrawn Cost method Ending balance of
Financial assets
Investee Ending balance
cash dividends or impairment converted into converted into Other impairment provision
equity method
profits provision equity method
Technology Co., Ltd.
Chongqing Qingjia Electronics Co., Ltd.
- - - - - 19,750,739.24 -
(①)
Shenzhen Jielunte Technology Co., Ltd. - - - - - 80,736,925.72 -
Panxu Intelligence Co., Ltd. - - - - - 50,072,246.07 -
Beijing Konka Jingyuan Technology Co.,
- - - - - 759,258.94 -
Ltd.
Oriexcellent (Zhuhai) Assets Management
- - - - - 1,921,557.31 -
Co., Ltd.
Feidi Technology (Shenzhen) Co., Ltd. - - - - - 16,220,872.80 -
Nanjing K-Star Technology Industrial
- - - - - 33,929,429.45 -
Park Operation Management Co., Ltd.
Weihai City Water Environmental
- - - - - 2,440,433.26 -
Protection Technology Co., Ltd. (②)
Weihai Yiheng Environment Technology
- - - - - 4,571,472.70 -
Co.,Ltd. (②)
Laizhou Lairun Financial Leasing Co.,
- - - - - - -
Ltd. (②)
Binzhou Beihai Weiqiao Solid Waste
- - - - - 69,433,727.87 -
Disposal Co., Ltd. (②)
171
Konka Group Co., Ltd. Interim Report 2019
Increase/decrease in the Reporting Period
Declaration of Withdrawn Cost method Ending balance of
Financial assets
Investee Ending balance
cash dividends or impairment converted into converted into Other impairment provision
equity method
profits provision equity method
Shandong Bishuiyuan Environmental
- - - - - 24,745,069.48 -
Protection Technology Co., Ltd. (②)
Shenzhen RF-LINK Technology Co., Ltd. - - - - - 100,348,413.43 -
Shenzhen Konka Information Network 16,198,029.90
- - - - - -
Co., Ltd.
Shenzhen Yaode Technology Co., Ltd. - - - - - 223,826,437.73 -
Chutian Dragon Co., Ltd - - - - - 638,125,098.43 -
Konka Green, and Konka Technology (③) - - - - - 78,229,725.59 -
Zhuhai Jinsu Plastic Co., Ltd. 2,070,000.00 - - - - 9,398,422.10 -
Shenzhen Konka Intelligent Electrical
- - - - - 2,134,990.24 -
Appliance Technology Co., Ltd
Shenzhen Zhongbing Konka technology
- - - - - 8,387,814.65 -
Co., Ltd.
Guangdong Hotcomm Information
- - - - - - -
Technology Co., Ltd.
Shenzhen OCT Life Network Technology
- - - - - - -
Co., Ltd.
Kunshan Konka Electronics Co., Ltd. - - - - - 195,882,623.69 -
Kunshan Kangsheng Investment
- - - - - 269,673,264.00 -
Development Co., Ltd.
172
Konka Group Co., Ltd. Interim Report 2019
Increase/decrease in the Reporting Period
Declaration of Withdrawn Cost method Ending balance of
Financial assets
Investee Ending balance
cash dividends or impairment converted into converted into Other impairment provision
equity method
profits provision equity method
Anhui Kaikai Shijie E-commerce Co., Ltd. - - - - - 436,685,064.57 -
Shenzhen Bosser New Materials Co., Ltd. - - - - - 80,916,233.75 -
Heilongjiang Longkang Zhijia Technology
- - - - - 6,161,430.52 -
Co., Ltd.
Shanxi Silk Road Yunqi Intelligent
- - - - - 4,522,509.33 -
Technology Co., Ltd.
Wuhan Tianyuan Environmental
- - - - - 257,890,873.30 -
Protection Co., Ltd.
Shandong Konka Smart Electrical
- - - - - 3,712,208.31 -
Appliance Co., Ltd.
Beijing Aowei Huyu Technology Co., Ltd. - - - - - 6,010,492.58 -
Yilingfang - - - - - -935.98 -
Huarun Environment Water Co., Ltd. - - - - - 15,819,210.00 -
Henan Konka Smart Electrical Appliance
- - - - - 982,541.56 -
Co., Ltd.
Shenzhen E-display Co., Ltd. - - 112,500,000.00 - - 112,500,000.00 -
Chuzhou Konka TID - - 61,029,500.00 - - 61,029,500.00 -
Huoqiu Kangrun Kaitian Environment
- - - - - 10,000,000.00 -
Water Co., Ltd.
173
Konka Group Co., Ltd. Interim Report 2019
Increase/decrease in the Reporting Period
Declaration of Withdrawn Cost method Ending balance of
Financial assets
Investee Ending balance
cash dividends or impairment converted into converted into Other impairment provision
equity method
profits provision equity method
Total 2,070,000.00 - 173,529,500.00 - - 2,846,608,296.03 -
174
Konka Group Co., Ltd. Interim Report 2019
15. Other Equity Instrument Investment
(1) Other Equity Instrument Investment
Item Ending balance Beginning balance
Shenzhen Tianyilian Science & Technology Co., Ltd. - 4,800,000.00
Feihong Electronics Co., Ltd. - -
ZAEFI - -
Shenzhen Chuangce Investment Development Co., Ltd. - -
Shanlian Information Technology Engineering Center 3,360,809.20 3,360,809.20
Shenzhen CIU Science & Technology Co., Ltd. 953,000.00 953,000.00
Shenzhen Digital TV National Engineering Laboratory
Co., Ltd. 7,726,405.16 7,726,405.16
Shanghai National Engineering Research Center of
Digital TV Co., Ltd. 2,400,000.00 2,400,000.00
Beijing Konka Technology Co., Ltd. 4,700,000.00 4,700,000.00
Total 19,140,214.36 23,940,214.36
(2) Non-transactional Equity Instrument Investment
Reason for
Amount of
Reason for retained
Dividend retained
measure at fair earnings
income earnings
Accumulativ value of which transferred
Item recognized in Accumulative loss transferred
e gain recorded in other from other
the current from other
comprehensive comprehen
period comprehensiv
income sive
e income
income
Shenzhen
Tianyilian Long-term
Science & - - 4,800,000.00 - holding based on
Technology strategic purpose
Co., Ltd.
Feihong Long-term
Electronics - - 1,300,000.00 - holding based on
strategic purpose
Co., Ltd.
Long-term
ZAEFI
- - 100,000.00 - holding based on
strategic purpose
Shenzhen Long-term
- - 485,000.00 -
Chuangce holding based on
175
Konka Group Co., Ltd. Interim Report 2019
Investment strategic purpose
Development
Co., Ltd.
Shanlian
Information Long-term
Technology - - 1,639,190.80 - holding based on
Engineering strategic purpose
Center
Shenzhen
Long-term
CIU Science
- - 200,000.00 - holding based on
& Technology
strategic purpose
Co., Ltd.
Shenzhen
Digital TV
Long-term
National
- - 1,273,594.84 - holding based on
Engineering
strategic purpose
Laboratory
Co., Ltd.
Shanghai
National
Engineering Long-term
Research - - - - holding based on
Center of strategic purpose
Digital TV
Co., Ltd.
Beijing
Long-term
Konka
- - - - holding based on
Technology strategic purpose
Co., Ltd.
Total 9,797,785.64 -
- - -
16. Other Non-current Financial Assets
Item Ending balance Beginning balance
Classified as financial assets at fair value through profit or
1,548,364,400.00 548,230,000.00
loss
Including: debt instrument investment - -
Equity instrument investment 1,548,364,400.00 548,230,000.00
Derivative financial assets - -
Hybrid instrument investment - -
Other - -
designated as financial assets at fair value through profit or
- -
loss
Including: debt instrument investment - -
176
Konka Group Co., Ltd. Interim Report 2019
Hybrid instrument investment - -
Other - -
Total 1,548,364,400.00 548,230,000.00
17. Investment Property
Item Houses and buildings
I. Original carrying value
1. Beginning balance 249,923,047.75
2. Increased amount of the period -
3. Decreased amount of the period -
4. Ending balance 249,923,047.75
II. The accumulative depreciation and accumulative amortization
1. Beginning balance 39,098,692.03
2. Increased amount of the period 2,815,637.15
3. Decreased amount of the period -
4. Ending balance 41,914,329.18
III. Impairment provision
1. Beginning balance -
2. Increased amount of the period -
3. Decreased amount of the period -
4. Ending balance -
IV. Carrying value
1. Ending carrying value 208,008,718.57
2. Beginning carrying value 210,824,355.72
177
Konka Group Co., Ltd. Interim Report 2019
18. Fixed Assets
Item Ending balance Beginning balance
Fixed assets 2,228,083,633.72 2,410,226,495.81
Disposal of fixed assets - -
Total 2,228,083,633.72 2,410,226,495.81
(1) List of Fixed Assets
Transportation
Item Houses and buildings Machinery equipment Electronic equipment Other equipment Total
equipment
I. Original carrying value
1. Beginning balance 2,160,081,403.23 1,847,565,534.04 172,793,417.25 58,660,252.15 198,441,334.30 4,437,541,940.97
2. Increased amount of the
5,643,529.56 115,070,706.88 4,688,868.33 2,958,435.02 23,965,789.47 152,327,329.26
period
(1) Purchase 4,784,564.00 61,595,856.44 4,688,868.33 2,778,482.63 22,761,636.88 96,609,408.28
(2) Transfer of construction
858,965.56 53,474,850.44 - 179,952.39 1,204,152.59 55,717,920.98
in progress
(3) increase of business
- - - - - -
combination
3. Decreased amount of the
188,396,950.55 135,617,037.24 3,337,442.38 2,715,136.85 9,755,719.38 339,822,286.40
period
178
Konka Group Co., Ltd. Interim Report 2019
Transportation
Item Houses and buildings Machinery equipment Electronic equipment Other equipment Total
equipment
(1) Disposal or Scrap 188,396,950.55 130,413,329.34 3,218,185.73 2,715,136.85 8,201,461.59 332,945,064.06
(2) decrease of loss of
- 5,203,707.90 119,256.65 - 1,554,257.79 6,877,222.34
controlling right
4. Ending balance 1,977,327,982.24 1,827,019,203.68 174,144,843.20 58,903,550.32 212,651,404.39 4,250,046,983.83
II. Accumulative
depreciation
1. Beginning balance 634,795,930.27 1,001,329,043.28 135,908,033.93 40,186,544.94 141,731,721.09 1,953,951,273.51
2. Increased amount of the
34,444,579.79 124,022,789.19 5,605,567.26 2,577,771.53 7,517,236.49 174,167,944.26
period
(1) Withdrawal 34,444,579.79 124,022,789.19 5,605,567.26 2,577,771.53 7,517,236.49 174,167,944.26
(2) Increase of business
- - - - - -
merger
3. Decreased amount of the
68,377,572.01 93,346,740.86 2,921,077.76 2,282,488.32 8,165,511.68 175,093,390.63
period
(1) Disposal or Scrap 68,377,572.01 91,138,587.26 2,840,604.68 2,282,488.32 7,104,537.04 171,743,789.31
(2) decrease of loss of
- 2,208,153.60 80,473.08 - 1,060,974.64 3,349,601.32
controlling right
4. Ending balance 600,862,938.05 1,032,005,091.61 138,592,523.43 40,481,828.15 141,083,445.90 1,953,025,827.14
179
Konka Group Co., Ltd. Interim Report 2019
Transportation
Item Houses and buildings Machinery equipment Electronic equipment Other equipment Total
equipment
III. Depreciation reserves
1. Beginning balance 1,247,805.91 68,610,152.04 1,215,451.65 820,215.24 1,470,546.81 73,364,171.65
2. Increased amount of the
- - - - - -
period
(1) Withdrawal - - - - - -
(2) Increase of business
- - - - - -
merger
3. Decreased amount of the
- 4,318,285.23 4,350.83 - 104,012.62 4,426,648.68
period
(1) Disposal or Scrap - 4,318,285.23 4,350.83 - 104,012.62 4,426,648.68
(2) decrease of loss of
- - - - - -
controlling right
4. Ending balance 1,247,805.91 64,291,866.81 1,211,100.82 820,215.24 1,366,534.19 68,937,522.97
IV. Carrying value
1. Ending carrying value 1,375,217,238.28 730,722,245.26 34,341,218.95 17,601,506.93 70,201,424.30 2,228,083,633.72
2. Beginning carrying
1,524,037,667.05 777,626,338.72 35,669,931.67 17,653,491.97 55,239,066.40 2,410,226,495.81
value
180
Konka Group Co., Ltd. Interim Report 2019
(2) List of Temporarily Idle Fixed Assets
Original Accumulative
Item Impairment provision Carrying value
carrying value depreciation
16,406,610.84 6,178,421.06 7,349,335.30 2,878,854.48
Mechanical equipment
1,942,358.43 1,433,032.24 - 509,326.19
Electronic equipment
125,981.91 113,383.72 - 12,598.19
Transportation equipment
547,252.26 456,847.47 43,847.23 46,557.56
Other equipment
19,022,203.44 8,181,684.49 7,393,182.53 3,447,336.42
Total
(3) Fixed Assets Leased in from Financing Lease
Original carrying Accumulative Impairment
Item Carrying value
value depreciation provision
Mechanical
77,615,759.89 15,019,413.62 - 62,596,346.27
equipment
Electronic equipment 205,128.20 177,777.77 - 27,350.43
Total 77,820,888.09 15,197,191.39 - 62,623,696.70
(4) Fixed Assets Leased out from Operation Lease
Item Ending carrying value
Houses and buildings 59,181,043.13
Mechanical equipment 10,345,367.42
Total 69,526,410.55
(5) Details of Fixed Assets Failed to Accomplish Certification of Property
Impair
Original carrying Accumulative ment
Item Net carrying value Reason
value depreciation provis
ion
Huaguoyuan Project in -
Under
Huaguoyuan Road, 3,628,629.00 251,736.18 3,376,892.82
processing
Guiyang
26-1 Longzhimeng, -
The problems
Pangjiang Street Property 10,189,892.23 1,204,561.09 8,985,331.14
of developers
in Dadong District,
181
Konka Group Co., Ltd. Interim Report 2019
Shenyang
- Historical
Jingyuan Building property 20,018,497.00 8,869,726.65 11,148,770.35
reasons
- Historical
Yikang Building property 76,610,752.33 34,319,203.86 42,291,548.47
reasons
-
Frestec Electrical Under
31,336,020.00 352,530.26
Appliances property 30,983,489.74
processing
-
Workshops and buildings Under
112,397,538.12 32,923,207.13
of Jiangxi konka 79,474,330.99
processing
Purification tank for liquid - Under
2,653,000.00 1,303,286.25
waste of XingDa HongYe 1,349,713.75 processing
182
Konka Group Co., Ltd. Interim Report 2019
19. Construction in Progress
Item Ending balance Beginning balance
Construction in Progress 2,776,018,241.52 2,176,871,530.80
Engineering material - -
Total 2,776,018,241.52 2,176,871,530.80
(1) List of Construction in Progress
Ending balance Beginning balance
Impairme Impairme
Item
Carrying amount nt Carrying value Carrying amount nt Carrying value
provision provision
Comprehensive improvement engineering project of drainage basins
in the city of Donggang 570,766,842.65 - 570,766,842.65 451,789,427.70 - 451,789,427.70
Water supply engineering project in Mazongshan Town, Subei
Mongol Autonomous County, Gansu Province 552,623,974.82 - 552,623,974.82 552,055,516.50 - 552,055,516.50
Central City Comprehensive accelerated programs in Economic and
Technological Development Zone of Binhai, Weifang 261,680,935.60 - 261,680,935.60 261,826,586.30 - 261,826,586.30
The second line of Xinfeng Microcrystalline Jade 371,215,114.23 - 371,215,114.23 365,069,872.84 - 365,069,872.84
The second line of Jiangxi Nano Crystallized Glass 304,826,822.19 - 304,826,822.19 303,533,244.21 - 303,533,244.21
Phase I of Guangming Project 156,084,314.80 - 156,084,314.80 153,577,240.57 - 153,577,240.57
PPP Project of water treatment in Hunan County 414,945,586.48 - 414,945,586.48 - - -
Other small projects 143,874,650.75 143,874,650.75 89,019,642.68 89,019,642.68
183
Konka Group Co., Ltd. Interim Report 2019
Ending balance Beginning balance
Impairme Impairme
Item
Carrying amount nt Carrying value Carrying amount nt Carrying value
provision provision
Total
(2) Changes of Significant Construction in Progress
Amount that
Other decreased
Estimated Increase Merger increase transferred to
Name o f item Beginning balance amount of the Ending balance
number Amount amount long-term fixed
period
assets of the period
Comprehensive improvement engineering project of RMB1299
drainage basins in the city of Donggang million 451,789,427.70 118,977,414.95 - - - 570,766,842.65
Water supply engineering project in Mazongshan
RMB970 m
Town, Subei Mongol Autonomous County, Gansu 552,055,516.50 568,458.32 - - - 552,623,974.82
illion
Province
Central City Comprehensive accelerated programs
RMB2,850
in Economic and Technological Development 261,826,586.30 - - - 145,650.70 261,680,935.60
million
Zone of Binhai, Weifang
RMB381 m
The second line of Xinfeng Microcrystalline Jade 365,069,872.84 10,666,706.57 - 4,521,465.18 - 371,215,114.23
illion
RMB434 m
The second line of Jiangxi Nano Crystallized Glass 303,533,244.21 6,075,209.13 - 4,781,631.15 - 304,826,822.19
illion
RMB241 m
Phase I of Guangming Project 153,577,240.57 2,507,074.23 - - - 156,084,314.80
illion
RMB972 m
PPP Project of water treatment in Hunan County illion - 414,949,989.00 4,402.52 - 414,945,586.48
184
Konka Group Co., Ltd. Interim Report 2019
Amount that
Other decreased
Estimated Increase Merger increase transferred to
Name o f item Beginning balance amount of the Ending balance
number Amount amount long-term fixed
period
assets of the period
Other small projects 89,019,642.68 102,960,858.62 47,569,820.30 536,030.25 143,874,650.75
Total 2,176,871,530.80 656,705,710.82 - 56,877,319.15 681,680.95 2,776,018,241.52
（Continued）
Of which: the
Proportion estimated
amount of the Capitalization rate
of the project Project Accumulative amount
Project name capitalized of the interests of Capital resources
accumulative input of capitalized interests
progress interests of the the period (%)
(%)
period
Comprehensive improvement engineering project of drainage Self-owned fund and bank
43.95 43.95 4,414,083.33 4,414,083.33 2.71
basins in the city of Donggang financing
Water supply engineering project in Mazongshan Town, Subei Self-owned fund and bank
56.97 56.97 - - -
Mongol Autonomous County, Gansu Province financing
Central City Comprehensive accelerated programs in
Self-owned fund and bank
Economic and Technological Development Zone of Binhai, 9.18 9.18 - - -
financing
Weifang
Self-owned fund and finance
The second line of Xinfeng Microcrystalline Jade 98.56 98.56 26,987,072.16 4,218,634.18 7.00
leasing
Self-owned fund and finance
The second line of Jiangxi Nano Crystallized Glass 71.40 71.40 31,299,947.21 4,453,246.18 7.00
leasing
Phase I of Guangming Project 64.76 64.76 - - - Self-owned fund
PPP Project of water treatment in Hunan County 42.68 42.68 - - - Self-owned fund and bank
185
Konka Group Co., Ltd. Interim Report 2019
Of which: the
Proportion estimated
amount of the Capitalization rate
of the project Project Accumulative amount
Project name capitalized of the interests of Capital resources
accumulative input of capitalized interests
progress interests of the the period (%)
(%)
period
financing
Other small projects - - - - - -
Total - - 62,701,102.70 13,085,963.69 - -
20. Intangible Assets
(1) List of intangible assets
Intellectual property
Item Land use right Right to use Total
Trademark right Patent and know-how Franchise rights Subtotal
software and others
I. Original carrying value
1. Beginning balance 440,540,757.52 47,490,161.70 195,491,851.74 111,050,625.01 80,373,189.03 434,405,827.48 874,946,585.00
2. Increased amount of the
78,468,000.00 - - - 3,328,272.05 3,328,272.05 81,796,272.05
period
(1) Purchase 78,468,000.00 - - - 1,647,939.92 1,647,939.92 80,115,939.92
(2) Transfer of
- - - - 1,680,332.12 1,680,332.12 1,680,332.12
construction in progress
(3) increase of business - - - - - - -
186
Konka Group Co., Ltd. Interim Report 2019
Intellectual property
Item Land use right Right to use Total
Trademark right Patent and know-how Franchise rights Subtotal
software and others
combination
3. Decreased amount of
7,289,880.61 - - - 4,487,025.17 4,487,025.17 11,776,905.78
the period
(1) Disposal 7,147,153.06 - - - - - 7,147,153.06
(2) decrease of losing
142,727.55 - - - 4,487,025.17 4,487,025.17 4,629,752.72
controlling right
4. Ending balance 511,718,876.91 47,490,161.70 195,491,851.74 111,050,625.01 79,214,435.90 433,247,074.35 944,965,951.26
II. Accumulated
amortization
1. Beginning balance 40,662,235.55 5,364,671.49 46,294,309.44 6,663,037.50 35,284,562.07 93,606,580.50 134,268,816.05
2. Increased amount of the
6,285,855.53 - 260,325.44 2,221,012.50 3,751,363.02 6,232,700.96 12,518,556.49
period
(1) Withdrawal 6,285,855.53 - 260,325.44 2,221,012.50 3,751,363.02 6,232,700.96 12,518,556.49
(2) increase of business
- - - - - - -
combination
3. Decreased amount of
3,035,596.91 - - - 7,744.26 7,744.26 3,043,341.17
the period
187
Konka Group Co., Ltd. Interim Report 2019
Intellectual property
Item Land use right Right to use Total
Trademark right Patent and know-how Franchise rights Subtotal
software and others
(1) Disposal 3,035,596.91 - - - - - 3,035,596.91
(2) decrease of losing
- - - - 7744.26 7,744.26 7,744.26
controlling right
4. Ending balance 43,912,494.17 5,364,671.49 46,554,634.88 8,884,050.00 39,028,180.83 99,831,537.20 143,744,031.37
III. Depreciation reserves
1. Beginning balance - - 2,901,082.61 - - 2,901,082.61 2,901,082.61
2. Increased amount of the
- - - - - - -
period
(1) Withdrawal - - - - - - -
(2) increase of business
- - - - - - -
combination
3. Decreased amount of
- - - - - - -
the period
(1) Disposal - - - - - - -
(2) decrease of losing
- - - - - - -
controlling right
188
Konka Group Co., Ltd. Interim Report 2019
Intellectual property
Item Land use right Right to use Total
Trademark right Patent and know-how Franchise rights Subtotal
software and others
4. Ending balance - - 2,901,082.61 - - 2,901,082.61 2,901,082.61
IV. Carrying value
1. Ending carrying value 467,806,382.74 42,125,490.21 146,036,134.25 102,166,575.01 40,186,255.07 330,514,454.54 798,320,837.28
2. Beginning carrying
399,878,521.97 42,125,490.21 146,296,459.69 104,387,587.51 45,088,626.96 337,898,164.37 737,776,686.34
value
189
Konka Group Co., Ltd. Interim Report 2019
(2) Land Use Right with Certificate of Title Uncompleted
Item Carrying value Reason
Land usage right of the subsidiary Nanocrystalline 5,401,491.41 Under processing
(3) Significant Intangible Assets
Item Ending carrying value Remaining amortization period
Franchise rights of sewage treatment in Laizhou 102,166,575.01 23.00
Various patent right of Jiangxi Konka 92,117,647.06 5.17
Land usage right of XGY (2006) No. 04049 72,612,368.45 37.25
Land usage right of Guangming land parcel No.
38,694,416.25 24.83
A518-0103
Right to use the trademark of Frestec 37,786,666.67 9.08
(4) Intangible Assets with restricted ownership or using right
Item Ending carrying value Reasons
Land usage right of XingDa HongYe 37,464,602.72 Mortgage loan of land
Land usage right of Jiangxi Konka 2,285,918.26 Mortgage loan of land
Land usage right of Yinbin Konka 13,959,352.66 Land mortgage guarantee
Land usage right of Konka Guangming Technology
38,694,416.25 Mortgage loan of land
Center
Land usage right of Frestec 45,651,427.59 Mortgage loan of land
21. Goodwill
(1) Original Carrying Value of Goodwill
Increased Decreased
Name of the investees
Formed from the
or the events formed Beginning balance Ending balance
business Other Dispose Other
goodwill
combination
Anhui Konka 3,597,657.15 - - - - 3,597,657.15
Econ Technology 467,825,151.34 - - - - 467,825,151.34
Jiangxi konka 340,111,933.01 - - - - 340,111,933.01
XingDa HongYe 44,156,682.25 - - - - 44,156,682.25
Total 855,691,423.75 - - - - 855,691,423.75
(2) Provisions for Goodwill Impairment
190
Konka Group Co., Ltd. Interim Report 2019
Name of the investees or Increased Decreased
Beginning Ending
the events formed
balance Withdrawal Other Dispose Other balance
goodwill
Anhui Konka - - - - - -
Econ Technology - - - - - -
Jiangxi konka - - - - - -
XingDa HongYe - - - - - -
Total - - - - - -
22. Long-term Deferred Expenses
Amortization Decrease due to lose of
Item Beginning balance Increased amount Ending amount
amount control power
Renovation
34,904,540.12 4,129,481.90 5,558,634.30 - 33,475,387.72
costs
Shoppe expe
61,368,072.24 19,824,349.40 27,227,161.65 - 53,965,259.99
nse
Other 14,950,814.41 9,230,556.30 10,517,404.08 - 13,663,966.63
Total 111,223,426.77 33,184,387.60 43,303,200.03 - 101,104,614.34
23. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets without Offset
Ending balance Beginning balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Deductible losses 2,014,479,689.25 510,499,204.16 1,358,336,470.51 336,401,597.67
Assets impairment
931,622,631.11 224,775,481.79 936,009,764.81 226,316,093.63
provision
Deferred income 68,481,479.04 18,565,204.82 85,456,786.55 20,389,065.68
Accrued expenses 53,582,508.96 18,823,248.72 72,865,789.50 17,320,299.04
Unrealized internal
71,832,827.52 8,979,103.44 35,916,413.76 8,979,103.44
sales profits
others 111,345,976.27 28,692,504.50 123,082,867.34 30,027,794.84
Total 3,251,345,112.17 810,334,747.43 2,611,668,092.47 639,433,954.30
(2) Lists of Deferred Income Tax Liabilities without Offset
Item Ending balance Beginning balance
191
Konka Group Co., Ltd. Interim Report 2019
Taxable temporary Deferred income tax Taxable temporary Deferred income
difference liabilities difference tax liabilities
Estimated added value not under the same
594,933,512.81 118,871,107.71 597,961,840.34 119,325,356.84
control
Prepaid interest 90,371,653.88 22,592,913.47 71,719,199.88 17,929,799.97
Accelerated depreciation of fixed assets 5,826,060.67 873,909.10 5,929,959.47 889,493.92
Change in fair value of trading financial
- - 3,005,381.67 751,345.42
assets
Other 8,496,388.76 2,124,097.19 8,496,388.76 2,124,097.19
Total 699,627,616.12 144,462,027.47 687,112,770.12 141,020,093.34
(3) List of Unrecognized Deferred Income Tax Assets
Item Ending balance Beginning balance
2,652,826,212.81 2,688,310,555.91
Deductible losses
568,390,308.42 294,734,548.10
Deductible temporary difference
3,221,216,521.23 2,983,045,104.01
Total
24. Other Non-current Assets
Item Ending balance Beginning balance
Orient Konka no.1 (zhuhai) private equity investment fund (limited
partnership) 265,516,500.31 158,810,750.31
Entrusted loans 120,000,000.00 120,000,000.00
Construction of government projects 37,975,365.16 41,410,334.97
Prepayment for house-purchase 24,003,225.05 10,099,279.84
Prepayment for equipment - 6,497,317.32
Yantai Econ Business Management Center (LLP) 647,814.39 647,814.39
Other 12,193.56 12,193.56
Total 448,155,098.47 337,477,690.39
25. Short-term Borrowings
Item Ending balance Beginning balance
Credit loan 12,251,505,460.85 12,471,968,199.93
Guaranteed loan 12,251,505,460.85 12,471,968,199.93
Mortgage loan (note ① and ②) 699,162,352.25 1,113,964,731.70
192
Konka Group Co., Ltd. Interim Report 2019
Item Ending balance Beginning balance
Pledged loan 93,000,000.00 30,000,000.00
A loan secured, pledged, or pledged（note
③）
Total 120,000,000.00 268,200,000.00
Note: ① With the carrying value of RMB82,959,836.52 as the collateral of the second phase
plant, Dongguan Konka obtained the loan of RMB70,000,000.00 from the Dongguan Branch
of Industrial Bank Co., Ltd.
② With the carrying value of RMB77,406,897.99 for plant and equipment, the land use right
of RMB2,285,918.26, Jiangxi Konka obtained the loan of RMB23,000,000.00 from the sales
department of Jiangxi Yongxiu Rural Commercial Bank Co., Ltd.
③ With carrying value of RMB56,193,626.65 for plant and buildings, land use right of
RMB37,464,602.72, and RMB19,800,000.00 unit certificates of deposit as collateral, and
Shanghai Xinfeng Zhuoqun PCB Co., Ltd. Hu Zehong and Konka Group provide maximum
amount guarantee, Xingda Hongye obtained mortgage loan RMB120,000,000.00
respectively from the Husha Branch of the agricultural bank of Zhongshan and Zhongshan
Branch of Industrial Bank Co., Ltd.
26. Financial Liabilities at Fair Value through Profit or Loss
Item Ending balance Beginning balance
Loss of forward exchange contract - 2,459,603.25
Total - 2,459,603.25
27. Notes Payable
Category Ending balance Beginning balance
Trade acceptance 1,007,887,109.01 131,907,909.16
Bank’s acceptance bill 101,594,731.83 730,422,780.31
Total 1,109,481,840.84 862,330,689.47
28. Accounts Payable
Item Ending balance Beginning balance
Within 1 year 4,272,706,388.36 4,041,645,573.26
1 to 2 years 385,880,356.75 262,217,987.99
2 to 3 years 12,703,076.60 12,677,653.94
193
Konka Group Co., Ltd. Interim Report 2019
Item Ending balance Beginning balance
Over 3 years 30,574,622.38 46,181,835.14
Total 4,701,864,444.09 4,362,723,050.33
(1)Significant Accounts Payable Aging over One Year
Item Ending balance Unpaid/ Un-carry-over reason
Estimated project funds 193,700,604.12 Settlement conditions not met
Total 193,700,604.12
29. Advances from Customers
(1) List of Advances from Customers
Item Ending balance Beginning balance
Within 1 year 806,357,448.30 654,982,234.51
1 to 2 years 38,492,927.46 32,910,085.56
2 to 3 years 23,174,286.19 13,172,633.37
Over 3 years 26,764,583.93 22,162,575.76
Total 894,789,245.88 723,227,529.20
(2) Significant Advances from Customers Aging over One Year
Item Ending balance Unpaid/ Un-carry-over reason
Dongguan Konka Mould Plastic Co., Ltd. 24,974,635.75 Settlement conditions not met
Shenzhen Konka Video & Communication 15,357,854.41
Settlement conditions not met
Systems Engineering Co., Ltd.
Total 40,332,490.16 ——
194
Konka Group Co., Ltd. Interim Report 2019
30. Payroll Payable
(1) List of Payroll Payable
Increase by merger Decrease Decrease by losing
Item Beginning balance Increase Ending balance
controlling right
I. Short-term salary 375,284,193.12 609,982,040.88 - 772,315,202.61 212,951,031.39
-
II. Post-employment benefit-defined
1,222,374.59 58,521,529.93 - 53,960,054.44 - 5,783,850.08
contribution plans
III. Termination benefits - 6,739,415.57 - 6,499,670.26 - 239,745.31
IV. Current portion of other benefits - - - - - -
Total 376,506,567.71 675,242,986.38 - 832,774,927.31 - 218,974,626.78
(2) List of Short-term Salary
Increase by merger Decrease Decrease by losing
Item Beginning balance Increase Ending balance
controlling right
1.Salary, bonus, allowance,
359,657,745.92 524,509,522.16 - 695,110,153.57 - 189,057,114.51
subsidy
2. Employee welfare 5,620,738.67 31,239,364.35 - 26,554,552.11 - 10,305,550.91
3. Social insurance 3,138,171.50 26,874,149.31 - 25,012,490.96 - 4,999,829.85
Of which: Medical insurance
768,410.84 22,423,240.02 - 21,306,477.10 - 1,885,173.76
premiums
195
Konka Group Co., Ltd. Interim Report 2019
Increase by merger Decrease Decrease by losing
Item Beginning balance Increase Ending balance
controlling right
Work-related injury
160,343.82 2,321,254.48 - 1,955,714.10 - 525,884.20
insurance
Maternity insurance 2,209,416.84 2,129,654.81 - 1,750,299.76 - 2,588,771.89
4. Housing fund 545,498.50 13,372,934.62 12,709,474.05 - 1,208,959.07
5.Labor union budget and
5,581,101.82 6,014,093.75 - 5,180,035.61 - 6,415,159.96
employee education budget
6.Short-term absence with
- - - - - -
payment
7. Short-term profit sharing plan - - - - - -
8. Other 740,936.71 7,971,976.69 - 7,748,496.31 - 964,417.09
Total 375,284,193.12 609,982,040.88 - 772,315,202.61 - 212,951,031.39
(3) List of Defined Contribution Plan
Increase by Decrease Decrease by
merger losing
Item Beginning balance Increase Ending balance
controlling
right
1. Basic pension
1,147,799.70 56,897,467.97 - 52,418,177.12 - 5,627,090.55
benefits
196
Konka Group Co., Ltd. Interim Report 2019
Increase by Decrease Decrease by
merger losing
Item Beginning balance Increase Ending balance
controlling
right
2.Unemployment
74,574.89 1,624,061.96 - 1,541,877.32 - 156,759.53
insurance
3. Annuity - - - - - -
Total 1,222,374.59 58,521,529.93 - 53,960,054.44 - 5,783,850.08
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.
197
Konka Group Co., Ltd. Interim Report 2019
31. Taxes Payable
Item Ending balance Beginning balance
VAT 77,338,847.17 127,267,736.84
Corporate income tax 166,768,782.17 111,659,382.84
Urban maintenance and construction tax 2,495,329.00 9,508,557.03
Education fees and local education Surcharge 1,889,136.85 6,842,959.97
Land use tax 3,551,531.59 3,390,503.70
Stamp duty 1,729,951.92 3,162,037.00
Tariff 2,773,064.22 2,867,887.18
Real estate tax 4,055,897.45 2,444,284.96
Personal income tax 4,206,104.39 1,757,048.49
Fund for disposing abandoned appliances and
12,507,440.50 16,496,706.00
electronic products
Flood control fund, fund for embankment, fund for
water conservancy and fund for river management 534,177.01 1,057,937.59
Business tax 401,823.10 401,823.10
Other 372,575.80 1,147,327.74
Total 278,624,661.17 288,004,192.44
32. Other Payables
Item Ending balance Beginning balance
Interest payable 99,998,242.67 27,230,631.41
Dividend payable 240,794,540.80 -
Other payables 2,026,237,321.94 1,997,426,646.33
Total 2,367,030,105.41 2,024,657,277.74
(1) Interest Payable
Item Ending balance Beginning balance
Interest on borrowings 99,998,242.67 27,230,631.41
Total 99,998,242.67 27,230,631.41
(2) Dividend payable
198
Konka Group Co., Ltd. Interim Report 2019
Item Ending balance Beginning balance
Common stock dividends 240,794,540.80 -
Total 240,794,540.80 —
(3) Other Payables
Listed by Nature of Account
Item Ending balance Beginning balance
Expenses payable 977,559,070.21 971,679,417.48
Come-and-go money 316,444,017.28 280,592,078.50
Equity transfer payment 380,180,000.00 380,180,000.00
deposit 225,052,021.81 196,746,104.46
Related party borrowing 78,849,048.66 108,233,202.82
Generation of advances 34,596,993.19 49,796,310.13
Other 13,556,170.79 10,199,532.94
Total 2,026,237,321.94 1,997,426,646.33
② Other Significant Payables Aging over One Year
Item Ending balance Unpaid/Un-carry-over reason
National energy-saving and benefiting people 89,960,000.00 Not paid
Total 89,960,000.00 —
33. Current Portion of Non-current Liabilities
Item Ending balance Beginning balance
Current portion of long-term borrowings (Note VI-34) - 40,000,000.00
Current portion of long-term payables (Note VI-36) 14,095,773.04 111,792,404.13
Total 14,095,773.04 151,792,404.13
34. Long-term Borrowings
Item Ending balance Beginning balance
Credit loan 457,300,000.00 285,000,000.00
Pledge loan 400,000,000.00
Mortgage guarantee loan (Note ①,③) 150,000,000.00 50,000,000.00
Pledge guarantee loan (Note ②) 147,400,000.00 150,000,000.00
Grarantee moergage pledge loan (Note ④) 130,000,000.00
Less: Current portion (Note VI-33) - 40,000,000.00
199
Konka Group Co., Ltd. Interim Report 2019
Item Ending balance Beginning balance
Total 1,284,700,000.00 445,000,000.00
Note:①Sichuan Konka took the land use right with carrying value of RMB13,959,352.66 as
the mortgage, and Communication Technology provided joint and several liability guarantee
for the loan, and obtained the entrusted loan of RMB50 million from Sichuan Gangrong
Investment and Development Group Co., Ltd.
② The Subsidiary of Econ Technology, Rushan Yike Environmental Management Co., Ltd.
obtained the borrowing of RMB290 million from Yantai Economic Development Zone
Sub-branch of China Everbright Bank with the length of maturity from 29 December 2016 to
28 December 2026. The accounts receivable of government procurement of Rushan Finance
Bureau was taken as the pledge during the 29 December 2016 to 28 December 2026. Econ
Technology provided the joint liability guaranty at the same time. As of June 30, 2019, the
actual borrowings was RMB14,740.00.
③ Konka Group took the land use right of Guangming Science and Technology Center with
the carrying value of RMB38,694,416.25 as the pledge, and obtained the long-term
borrowing of RMB10 million form Shenzhen Branch of Guangdong Huaxing Bank Co., Ltd.
④ Anhui Konka took the plants with carrying value of RMB145,466,005.9 and land use right
with carrying value of RMB45,651,427.59 as mortgage, and Konka Group provided the joint
liability guaranty，and obtained the borrowing of RMB13 million from Ma’anshan Branch of
China Minsheng Bank Co., Ltd.
35.Bonds Payable
(1) List of Bonds Payable
Item Ending balance Same period of last year
Non-public offering corporate bonds 3,489,910,901.50 -
Total 3,489,910,901.50 -
(2) Increase/Decrease of Bonds Payable (Excluding Other Financial Instrument
Classified as Financial Liabilities such as Preferred Shares and Perpetual Bonds)
Beginning
Bonds name Par value Issuing date Duration Issuing amount
balance
19Konka01 1,000,000,000.00 14 January 2019 2+1 years 996,500,000.00 -
19Konka02 1,500,000,000.00 14 January 2019 3 years 1,494,750,000.00 -
19Konka03 500,000,000.00 3 June 2019 2+1 years 498,250,000.00 -
19Konka04 500,000,000.00 3 June 2019 3 years 498,250,000.00 -
200
Konka Group Co., Ltd. Interim Report 2019
Total 3,500,000,000.00 —— —— 3,487,750,000.00 -
(Continued)
Repaymen
Amortization of
Withdrawal of t in the
Bonds name The current issue premium and Ending balance
interest by par value Reporting
depreciation
Period
19Konka01 996,500,000.00 23,194,444.46 748,427.69 - 997,248,427.69
19Konka02 1,494,750,000.00 34,791,666.66 1,122,641.53 - 1,495,872,641.53
19Konka03 498,250,000.00 1,750,000.00 144,916.14 - 498,394,916.14
19Konka04 498,250,000.00 1,827,777.78 144,916.14 - 498,394,916.14
Total 3,487,750,000.00 61,563,888.90 2,160,901.50 - 3,489,910,901.50
36. Long-term Payables
Item Ending balance Beginning balance
Accrued financing lease outlay 237,618,009.57 240,167,001.54
Less: Current portion (Note VI-33) 14,095,773.04 111,792,404.13
Total 223,522,236.53 128,374,597.41
37. Long-term Payroll Payable
(1) List of Long-term Payroll Payable
Item Ending balance Beginning balance
I. Termination benefits-net liabilities of defined contribution
5,670,450.62 8,792,614.98
plans
II. Termination benefits - -
III. Other long-term welfare - -
Total 5,670,450.62 8,792,614.98
(2) Changes in Defined Benefit Plans
①Obligation present value of defined benefit plans:
Item Reporting period Same period of last year
I. Beginning balance 8,792,614.98 13,361,821.86
II. Defined benefit cost recorded into current profits and
- -
losses
1. Current service cost - -
201
Konka Group Co., Ltd. Interim Report 2019
Item Reporting period Same period of last year
2. Previous service cost - -
3. Settlement gains (“－” for loss) - -
4. Net interest - -
III. The cost of defined benefit recorded into other
- -
comprehensive income
1. Actuarial gains (“－” for loss) - -
IV. Other changes 3,122,164.36 1,921,578.32
1. Consideration paid when settled - -
2.Welfare paid 3,122,164.36 1,921,578.32
V. Ending balance 5,670,450.62 11,440,243.54
② Notes to the influence of the content and related risk of defined benefit pension schemes
to the future cash flows, time and uncertainty of the Company:
Due to upgrading and reconstruction of current work sites of the subsidiary,
Telecommunication Technology, it is to adjust the labor relations according to
Implementation Measures for Accompanying Employees in manufacturing system of
Shenzhen Konka Telecommunication Technology Co., Ltd. On the premise to balance the
Company’ and employees’ benefits and voluntary selection, Telecommunication Technology
provides early retirement plans for senior employees (employed before 31 December 1990
and signed non-fixed term labor contract with the Company or Communication Technology).
The accumulative compensation paid to the internal early retirement pensions in future year
is RMB34,931,714.55, 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.
③ Notes to Actuarial Assumptions and Sensibility Analysis Result of Defined Benefit
Pension Schemes
Significant assumptions estimated Period-end of Reporting Period Period-end of last year
Discount rate Treasury bond rate in Same period —
Death rate 0% —
202
Konka Group Co., Ltd. Interim Report 2019
Expected average life expectancy Over legal emeritus age —
Expected compensation growth rate 0% —
38. Provisions
Item Beginning balance Ending balance Reason for formation
Pending litigations 21,566,306.86 - Litigation (Note)
Other 206,591.51 1,597,591.51 Contract consideration
Total 21,772,898.37 1,597,591.51 ——
203
Konka Group Co., Ltd. Interim Report 2019
39. Deferred Income
Decrease by losing Reason for
Item Beginning balance Increase Decrease Ending balance
controlling right formation
Related to
Government
112,899,128.24 111,514,600.00 16,980,258.41 124,999.94 207,308,469.89 assets/related to
subsidies income
Total 112,899,128.24 111,514,600.00 16,980,258.41 124,999.94 207,308,469.89 —
Of which, items related to government subsidies:
Amount
Amount recorded
recorded into Decrease by Related to
Amount of newly into other income
Item Beginning balance non-operating losing Ending balance assets/related
subsidy in the Reporting
income in the income
Period controlling right
Reporting Period
Special fund of Finance Bureau for digital 399,999.84 - - 100,000.02 - 299,999.82 Related to
television production line upgrading assets
Special fund for development of equipment 320,940.00 - - 80,235.00 - 240,705.00 Related to
manufacturing industry assets
Special fund for strategic emerging industry of 1,800,000.00 - - 300,000.00 - 1,500,000.00 Related to
Finance Bureau of Dongguan assets
A special subsidy granted by the Dongguan 23,220.00 - - 5,805.00 - 17,415.00
Related to
government for the transformation and upgrading
assets
of 16 groups of enterprises of processing trade
999,999.84 - - 100,000.02 - 899,999.82 Related to
Special fund for industrial structural adjustment
assets
204
Konka Group Co., Ltd. Interim Report 2019
Amount
Amount recorded
recorded into Decrease by Related to
Amount of newly into other income
Item Beginning balance non-operating losing Ending balance assets/related
subsidy in the Reporting
income in the income
Period controlling right
Reporting Period
1,260,000.00 - - 210,000.00 - 1,050,000.00 Related to
Special fund of 2010-2012 industrial technology
assets
Special fund of transformation of information and 4,797,149.98 - - 479,715.00 - 4,317,434.98
Related to
automation for traditional television production
assets
line
Subsidy for R&D instrument of Chuzhou 149,316.57 - - 28,900.02 - 120,416.55 Related to
Economic Development Zone assets
1,575,000.00 - - 150,000.00 - 1,425,000.00 Related to
Whole machine integration of module
assets
Enterprise development project of provincial 676,666.56 - - 145,000.02 - 531,666.54 Related to
Economy and Information Technology Committee assets
Provincial subsidy for R&D instrument from 139,683.23 - - 28,900.02 - 110,783.21 Related to
Department of Science and Technology assets
1,880,000.00 - - 240,000.00 - 1,640,000.00 Related to
Provincial major special projects in 2017
assets
Color smart TV manufacturing demonstration of 166,666.80 - - 49,999.98 - 116,666.82 Related to
digital workshop assets
R & D and industrialization of LED energy-saving 492,638.20 - - 123,159.48 - 369,478.72 Related to
IPTV assets
Subsidy for R&D instrument of Chuzhou Finance 208,083.17 - - 113,500.02 - 94,583.15 Related to
and Technology Bureau assets
205
Konka Group Co., Ltd. Interim Report 2019
Amount
Amount recorded
recorded into Decrease by Related to
Amount of newly into other income
Item Beginning balance non-operating losing Ending balance assets/related
subsidy in the Reporting
income in the income
Period controlling right
Reporting Period
Subsidy for R&D instrument of Anhui Provincial 177,650.00 - - 96,900.00 - 80,750.00 Related to
Department of Finance assets
Subsidy for R&D instrument of Chuzhou 435,083.21 - - 113,500.02 - 321,583.19 Related to
Economic-Technological Development Area assets
R & D and industrialization of LCD modules 149,999.80 - - 25,000.02 - 124,999.78 Related to
(NDRC) assets
R & D and industrialization of LCD modules 300,000.20 - - 49,999.98 - 250,000.22 Related to
(Technology Bureau) assets
Project of display terminal smart plant with new 3,003,000.00 - - 409,500.00 - 2,593,500.00 Related to
pattern based on NB-IOT assets
304,930.89 - - 79,547.22 - 225,383.67 Related to
Cluster development zone of intelligent appliances
assets
Subsidy for R&D instrument of Department of 221,250.00 - - 22,500.00 - 198,750.00 Related to
Science and Technologyof Anhui assets
Subsidy for R&D instrument of Department of 47,200.00 - - 4,800.00 - 42,400.00 Related to
Science and Technologyof Anhui (2018) assets
Subsidy for transformation of environmental 59,000.00 - - 6,000.00 - 53,000.00 Related to
protection project assets
- 900,000.00 - 30,000.00 - 870,000.00 Related to
Provincial special fund for robot project
assets
New application service system of mobile smart 2,013,583.52 - - 373,899.96 - 1,639,683.56 Related to
terminal assets
206
Konka Group Co., Ltd. Interim Report 2019
Amount
Amount recorded
recorded into Decrease by Related to
Amount of newly into other income
Item Beginning balance non-operating losing Ending balance assets/related
subsidy in the Reporting
income in the income
Period controlling right
Reporting Period
R & D of key technologies of information safety 1,315,187.04 - - 240,000.00 - 1,075,187.04 Related to
system for mobile smart terminal assets
Industrialization of mobile internet and 4th 2,219,077.41 - - 267,895.02 - 1,951,182.39 Related to
generation mobile communication industry assets
Deferred income—Mirror complex aluminum 26,959.57 - - 4,000.08 - 22,959.49 Related to
with high power and high heat-dissipation LED assets
Deferred income—Processing technology of 53,249.88 4,500.00 48,749.88 Related to
thermal conductive mental plate assets
Deferred income—Mirror complex aluminum ith 59,133.78 - - 2,119.98 - 57,013.80 Related to
high power and high heat-dissipation COB-LED assets
Deferred income—PCB printing ink and 150,000.00 - - - - 150,000.00 Related to
anti-overflow knife coater assets
168,981.80 200,000.00 - 14,080.46 - 354,901.34 Related to
Deferred income—Innovation of technology
assets
Deferred income—Technology upgrade of - 394,700.00 - 47,196.08 - 347,503.92 Related to
high heat-dissipation and high accuracy PCB assets
R&D for DID LCD video wall applicable for 149,999.96 - - 25,000.02 124,999.94 - Related to
strange weather like rain, snow and haze, etc. assets
8,500,000.06 - - 999,999.96 - 7,500,000.10 Related to
Subsidy of China Merchants of Zhifu
assets
Subsidy for Phase II of Konka Zhifu Life Science - 10,000,000.00 - 4,999,999.99 - 5,000,000.01 Related to
Innovation Center assets
207
Konka Group Co., Ltd. Interim Report 2019
Amount
Amount recorded
recorded into Decrease by Related to
Amount of newly into other income
Item Beginning balance non-operating losing Ending balance assets/related
subsidy in the Reporting
income in the income
Period controlling right
Reporting Period
Award of cars (Kaiyi) for Sichuan Konka as - 79,900.00 - 1,119.54 - 78,780.46
Related to
excellent enterprise--Harbor
assets
Administration Commission of Yibin
Audit adjustment--Special fund accounting for 1,000,000.00 - - - - 1,000,000.00 Related to
Rushan Yike assets
1,750,000.00 - - - - 1,750,000.00 Related to
Special fund of R&D center
income
Yuecaijiao (2018) No.47 notice of special fund for 200,000.00 -60,000.00 - - - 140,000.00
Related to
strengthening intellectual property protection
assets
/70% of Patent award (30% attributable to Huajin)
Research, development and industrialization of 2,600,000.00 - - - - 2,600,000.00 Related to
digital products of synergetic interconnection assets
320,000.00 - - - - 320,000.00 Related to
EFI system of automobile engine
assets
R & D and industrialization of Information 1,400,000.00 - - - - 1,400,000.00 Related to
Terminal based on the IGRS income
Research, development and industrialization of 750,000.17 - - 499,999.98 - 250,000.19 Related to
Major technology of LED backlight FPTV assets
Provincial project of innovation platform in 448,000.00 96,000.00 352,000.00
Related to
science and technology in Cooperation of
assets
Production,Teaching and Research
208
Konka Group Co., Ltd. Interim Report 2019
Amount
Amount recorded
recorded into Decrease by Related to
Amount of newly into other income
Item Beginning balance non-operating losing Ending balance assets/related
subsidy in the Reporting
income in the income
Period controlling right
Reporting Period
Digital smart TV with independent audio-visual 16,666.47 16,666.47 - Related to
standard of three networks combination assets
Multi-screen terminal products of three networks 560,000.09 139,999.98 420,000.11 Related to
combination assets
2,435,333.22 645,333.57 1,789,999.65 Related to
AVS/DRA terminal and matched core chip R & D
assets
Research, development and industrialization of 1,577,067.83 525,689.34 1,051,378.49 Related to
new smart TV of man-machine interaction assets
1,300,000.00 1,300,000.00 Related to
R & D and engineering of 3D TV Terminal
assets
User-centered videos with three networks 80,000.00 80,000.00 Related to
combination assets
Embedded OS development and terminal system 1,492,270.06 229,579.98 1,262,690.08 Related to
development for TV application assets
Smart TV and system supporting platform of three 666,666.80 199,999.98 466,666.82 Related to
networks combination assets
Research, production and industrialization smart 5,780,097.10 990,873.78 4,789,223.32 Related to
terminal system of next-generation internet assets
Satellite Receiving Facility based on safe and 1,000,000.00 1,000,000.00 Related to
reliable chips assets
Smart TV industrial chain of Konka Group Co., 15,354,500.00 2,247,000.00 13,107,500.00 Related to
Ltd. assets
209
Konka Group Co., Ltd. Interim Report 2019
Amount
Amount recorded
recorded into Decrease by Related to
Amount of newly into other income
Item Beginning balance non-operating losing Ending balance assets/related
subsidy in the Reporting
income in the income
Period controlling right
Reporting Period
Glasses-free 3D Smart LCD TV with Multi-view 1,500,000.00 1,500,000.00 Related to
and High Definition assets
Research, development and industrialization 1,184,166.75 202,999.98 981,166.77 Related to
project of new two-channel 3D smart TV assets
Laboratory project of next-generation Konka 3,500,000.06 499,999.98 3,000,000.08 Related to
multimedia terminal technology assets
Project of circular economy and energy 390,000.00 156,000.00 234,000.00
Related to
conservation and emission reduction for Konka
assets
R&D Building Intelligent Engineering
Comprehensive integration and innovation project 2,100,000.00 2,100,000.00 Related to
of lean manufacturing implementation system assets
Real-time Synthesis of True 3D Video with 1,420,000.00 1,420,000.00 Related to
Continuous Viewpoint assets
1,375,000.00 150,000.00 1,225,000.00 Related to
R & D of UST Laser Projection Smart TV
assets
Funds of Shenzhen Industrial Design Center from 3,000,000.00 3,000,000.00
Related to
Shenzhen Economic, Trade and Information in
assets
2015
Konka Smart Home Project of Constructing Cloud 3,620,000.00 361,999.98 3,258,000.02 Related to
Smart Control Platform assets
Investment items located in the weak sector of 4,500,000.00 4,500,000.00 Related to
Shenzhen industrial link in 2017 assets
210
Konka Group Co., Ltd. Interim Report 2019
Amount
Amount recorded
recorded into Decrease by Related to
Amount of newly into other income
Item Beginning balance non-operating losing Ending balance assets/related
subsidy in the Reporting
income in the income
Period controlling right
Reporting Period
Design and achievement transformation of surface 100,000,000.00 100,000,000.00 Related to
OLED V9X series TV assets
Subsidy for renewal of old elevators in Nanshan 1,960,000.00 1,960,000.00 Related to
District assets
R & D of double HDR OLED smart television and 755,708.38 45,342.48 710,365.90 Related to
industrialization assets
R & D and industrialization of operation system 13,300,000.00 13,300,000.00 Related to
for exploiting users based on big data assets
Total 1,320,000.00 1,320,000.00
112,899,128.24 111,514,600.00 - 16,980,258.41 124,999.94 207,308,469.89
40. Share Capital
Increase/decrease (+/-)
Item Beginning balance New shares Bonus Bonus issue from Ending balance
Other Subtotal
issued shares profit
The sum of shares 2,407,945,408.00 - - - - - 2,407,945,408.00
41. Capital Reserves
Item Beginning balance Increase Decrease Ending balance
Capital premium 7,393,378.55 - - 7,393,378.55
Other capital reserves 200,963,245.66 29,405,337.77 - 230,368,583.43
211
Konka Group Co., Ltd. Interim Report 2019
Item Beginning balance Increase Decrease Ending balance
Total 208,356,624.21 29,405,337.77 - 237,761,961.98
Note: Other capital recerves increase in the Reporting Period was mainly caused by the increase of RMB29,405,337.77 of non-controlling
interests.
42. Other Comprehensive Income
Reporting Period
Less: Recorded in
other
comprehensive
Income before Attributable to owners Attributable to
Item Beginning balance income in prior Less: Income Ending balance
taxation in the of the Company as the non-controlling
period and tax expense
Current Period parent after tax interests after tax
transferred in
profit or loss in the
Current Period
I. Items that will not be
-4,800,000.00 - -4,800,000.00
reclassified to profit or loss
Of which: Changes caused by
remeasurements on defined -
benefit pension schemes
Other comprehensive income
that will not be reclassified to
-
profit or loss under the euity
method
Changes in fair value of other
-4,800,000.00 -4,800,000.00
equity instrument investment
212
Konka Group Co., Ltd. Interim Report 2019
Reporting Period
Less: Recorded in
other
comprehensive
Income before Attributable to owners Attributable to
Item Beginning balance income in prior Less: Income Ending balance
taxation in the of the Company as the non-controlling
period and tax expense
Current Period parent after tax interests after tax
transferred in
profit or loss in the
Current Period
Changes in fair value of
-
enterprise credit risk
II. Items that will be
-10,538,219.08 1,691,887.67 1,140,113.31 551,774.36 -9,398,105.77
reclassified to profit or loss
Of which: Other
comprehensive income that
-2,397,350.96 -2,397,350.96
will be reclassified to profit or
loss under the euity method
Changes in fair value of other
equity instrument investment
Amount of financial assets
reclassified to other
comprehensive income
Impairment provision of other
equity investment credit
Reserve for cash flow
hedges
213
Konka Group Co., Ltd. Interim Report 2019
Reporting Period
Less: Recorded in
other
comprehensive
Income before Attributable to owners Attributable to
Item Beginning balance income in prior Less: Income Ending balance
taxation in the of the Company as the non-controlling
period and tax expense
Current Period parent after tax interests after tax
transferred in
profit or loss in the
Current Period
Defferences arising
from the translation of foreign
-8,140,868.12 1,691,887.67 1,140,113.31 551,774.36 -7,000,754.81
currency denominated financial
statements
Total -10,538,219.08 1,691,887.67 - - -3,659,886.69 551,774.36 -14,198,105.77
43.Special reserve
Item Beginning balance Increase Decrease Ending balance
Safety production costs - 97,613.57 25,876.49 71,737.08
Total - 97,613.57 25,876.49 71,737.08
44. Surplus Reserves
Item Beginning balance Increase Decrease Ending balance
Statutory surplus reserves 973,502,519.62 973,502,519.62
Discretional surplus reserves 254,062,265.57 254,062,265.57
Total 1,227,564,785.19 1,227,564,785.19
Note: Based on the regulations of the Corporation Law and Constitution, the Company should withdraw 10% of the statutory surplus reserves
214
Konka Group Co., Ltd. Interim Report 2019
according to 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 can withdraw the discretional surplus reserves after withdrawing the statutory surplus reserves. The
discretional surplus reserves can be used to make up for the previous losses or to increase share capital once approved.
215
Konka Group Co., Ltd. Interim Report 2019
45. Retained Earnings
Item Reporting Period Same period of last year
Beginning balance of retained earnings
4,271,408,192.21 4,260,125,492.57
before adjustments
Total beginning balance of retained
earnings before adjustments (increase+, -2,884,254.62 -
decrease -)
Beginning balance of retained earnings
4,268,523,937.59 4,260,125,492.57
after adjustments
Add: Net profit attributable to owners of
352,767,020.73 411,289,744.68
the Company as the parent
Less: Withdrawal of statutory surplus
- 9,919,910.40
reserves
Withdrawal of discretional surplus
- -
reserves
Dividend of ordinary shares payable 240,794,540.80 390,087,134.64
Ending retained earnings 4,380,496,417.52 4,271,408,192.21
46. Operating Revenue and Cost of Sales
(1) Operating Revenue and Cost of Sales
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main
25,704,875,805.21 24,429,634,915.92 16,803,504,680.73 15,789,523,498.53
operations
Other
331,567,008.63 244,407,455.21 821,910,089.09 652,732,946.73
operations
Total 26,036,442,813.84 24,674,042,371.13 17,625,414,769.82 16,442,256,445.26
(2) Main Operations (Classified by product)
Reporting Period Same period of last year
Product name
Operating revenue Cost of sales Operating revenue Cost of sales
Color TV 4,963,088,596.70 4,352,820,070.48
3,844,847,424.42 3,596,446,860.11
business
Mobile phone 205,434,258.43 201,988,459.74 203,769,975.49 204,395,134.71
216
Konka Group Co., Ltd. Interim Report 2019
Reporting Period Same period of last year
Product name
Operating revenue Cost of sales Operating revenue Cost of sales
business
Consumer 1,084,381,984.51 892,338,557.03
appliances 1,637,709,425.79 1,345,643,531.66
business
Environmental 77,951,411.92 52,515,288.25
protection 4,863,145,443.76 4,524,853,380.07
business
Industry, trade 10,008,880,630.62 9,925,786,697.58
and technology 14,549,000,969.03 14,359,602,494.69
business
Other 604,738,283.78 401,100,189.64 465,432,081.49 361,667,750.48
Total 25,704,875,805.21 24,429,634,915.92 16,803,504,680.73 15,789,523,498.53
(3) Main Operations (Classified by area)
Reporting Period Same period of last year
Area
Operating revenue Cost of sales Operating revenue Cost of sales
Domestic
9,430,243,937.78 8,596,129,999.73 4,672,082,285.24 3,847,140,507.59
sales
Overseas
16,274,631,867.43 15,833,504,916.19 12,131,422,395.49 11,942,382,990.94
sales
Total 25,704,875,805.21 24,429,634,915.92 16,803,504,680.73 15,789,523,498.53
(4) Other Operations (Classified by product)
Product Reporting Period Same period of last year
name Operating revenue Cost of sales Operating revenue Cost of sales
Sale of
155,282,907.18 160,515,894.69 461,460,767.54 463,125,455.40
materials
Maintenan
12,533,794.41 8,001,769.58 23,647,020.02 12,451,873.87
ce cost
Sale of
7,864,837.52 1,201,540.79 5,528,818.17 885,134.95
waste
Housing
50,641,453.21 3,277,652.49 55,541,441.82 7,877,581.44
lease
Other 105,244,016.31 71,410,597.66 275,732,041.54 168,392,901.07
217
Konka Group Co., Ltd. Interim Report 2019
Product Reporting Period Same period of last year
name Operating revenue Cost of sales Operating revenue Cost of sales
Total 331,567,008.63 244,407,455.21 821,910,089.09 652,732,946.73
(5) Operating Revenue from Top 5 Customers
Total operating revenue from top 5 Proportion to operating revenue of
Period
customers Reporting Period (%)
8,057,091,490.94 30.95
Jan.-June of 2019
6,013,731,094.97 35.79
Jan.-June of 2018
47. Taxes and Surtaxes
Item Reporting Period Same period of last year
7,641,459.23 7,615,970.19
Urban maintenance and construction tax
7,399,945.90 5,471,304.55
Stamp duty
4,863,382.63 2,268,252.08
Property tax
9,986,924.23 4,628,137.36
Land use tax
3,628,856.00 3,403,425.83
Education surcharge
2,800,185.32 2,284,037.36
Local education surcharge
105,188.20 162,579.33
Water resources fund
19,798.20 3,180.00
Vehicle and vessels usage tax
Others 943,352.56 1,809,687.92
Total 37,389,092.27 27,646,574.62
Note: Refer to Note V Taxation for details of the measurement standards of various taxes and
surtaxes.
48. Selling Expense
Item Reporting Period Same period of last year
Salary 153,382,205.33 175,774,224.21
Advertising expense 193,996,682.54 161,559,044.17
Promotional activities 276,681,334.75 339,904,932.61
Logistic Fee 179,648,240.35 163,966,076.58
Warranty fee 122,339,314.15 121,621,614.96
Taxes and fund 333.90 179,335.16
Business travel charges 18,079,398.08 16,371,700.85
218
Konka Group Co., Ltd. Interim Report 2019
Item Reporting Period Same period of last year
Exhibition expenses 13,239,462.76 11,801,713.36
Rental charges 15,818,675.70 15,783,834.11
Business entertainment expenses 8,951,109.32 16,785,389.71
Other 85,809,157.48 79,433,208.79
1,067,945,914.36 1,103,181,074.51
Total
49. Administrative Expense
Item Reporting Period Same period of last year
Salary 162,542,644.17 102,238,841.81
Depreciation charge 43,538,977.71 30,392,140.28
Consulting fees 24,651,061.96 17,149,760.33
Business entertainment expense 10,417,451.26 9,155,485.63
Patent fee 15,993,217.00 883,906.94
Business travel charges 6,025,162.39 7,528,524.84
Loss on scraping of inventories 9,030,690.19 6,262.35
Water & electricity fees 6,809,831.29 4,538,405.21
Other 68,915,606.46 55,925,445.18
Total 347,924,642.43 227,818,772.57
50. R&D Expense
Item Reporting Period Same period of last year
Salary 78,671,163.98 77,769,494.02
Expenses on trial production of new 22,136,520.66
20,620,497.46
products
Material drawing out 29,590,093.60 12,709,189.86
Depreciation and amortization 5,405,384.18 4,370,473.11
Testing fees 2,119,728.64 4,849,393.59
Information charges 5,176,565.13 4,553,785.16
Water & electricity fees 2,117,684.38 2,907,580.11
Business travel charges 1,015,830.83 1,325,330.17
10,977,367.54 7,903,153.28
Other
Total 157,210,338.94 137,008,896.76
51. Finance Costs
219
Konka Group Co., Ltd. Interim Report 2019
Item Reporting Period Same period of last year
Interest expense 529,683,836.52 138,646,255.45
Less: Interest income 118,673,531.77 49,719,529.94
Foreign exchange profit or loss -26,237,313.27 -72,148,811.10
Other 29,487,471.55 19,514,995.00
Total 414,260,463.03 36,292,909.41
52. Credit Impairment Loss
Item Reporting Period Same period of last year
-41,432,285.18
Bad debt loss on accounts receivable ——
-8,183,816.17
Bad debt loss on other receivables ——
Bad debt loss on prepayments 139,877.59 ——
Total -49,476,223.76
53. Asset Impairment Loss
Item Reporting Period Same period of last year
Bad debt loss —— -13,395,642.00
Inventory falling price loss -11,717,767.29 -46,156,458.41
Total -11,717,767.29 -59,552,100.41
54. Other Income
Amount recorded into the current
Item Reporting Period Same period of last year
non-recurring profit or loss
Rewards and
53,667,833.01 18,563,333.33 53,667,833.01
subsidies
Software tax rebates 23,063,806.91 34,848,961.96 -
Transfer of deferred
16,980,258.41 12,105,088.11 16,980,258.41
income
Support fund 246,506,970.00 48,012,477.79 246,506,970.00
L/C export subsidy 66,369.00 132,738.00 66,369.00
Land tax rebates 3,186,200.00 - 3,186,200.00
Post subsidies 326,832.56 3,229,884.31 326,832.56
Other 86,701.47 6,133,800.00 86,701.47
Rewards and
343,884,971.36 123,026,283.50 320,821,164.45
subsidies
55. Investment Income
220
Konka Group Co., Ltd. Interim Report 2019
Item Reporting Period Same period of last year
8,541,274.56 6,075,182.59
Long-term equity investment income measured by equity method
274,322,718.19 47,126,189.12
Investment income from disposal of long-term equity investment
—— -82,412,478.05
Investment income from holding of financial assets at fair value
through profit or loss
—— 13,740,000.00
Investment income from disposal of financial assets at fair value
through profit or loss
—— 17,360,398.59
Investment income from holding of available-for-sale financial
assets
140,558,288.28 445,568,627.45
Investment income from disposal of available-for-sale financial
assets
-10,285,883.02 ——
Income from remeasurement of residual stock rights at fair value
after losing control power
34,766,808.03 ——
Income from purchase of financial products and entrust loans
111,257,821.88 84,300,652.01
Transfer of equity investment by equity method into financial
assets
559,161,027.92 531,758,571.71
Total
56. Gain on Changes in Fair Value
Sources Reporting Period Same period of last year
Financial assets at fair value through profit or loss —— 59,855,412.48
Of which: Gain on changes in fair value of derivative financial
—— 59,855,412.48
instruments
Trading financial assets -3,005,381.67 ——
Total -3,005,381.67 59,855,412.48
57. Asset Disposal Income
Amount recorded in the
Same period of last
Item Reporting Period current non-recurring
year
profit or loss
199,561,596.99 89,814.27 199,561,596.99
Fixed assets disposal income
94,144,243.65 63,632,291.11 94,144,243.65
Intangible assets disposal income
221
Konka Group Co., Ltd. Interim Report 2019
Amount recorded in the
Same period of last
Item Reporting Period current non-recurring
year
profit or loss
Total 293,705,840.64 63,722,105.38 293,705,840.64
58. Non-operating Income
Amount recorded in the
Same period of last
Item Reporting Period current non-recurring
year
profit or loss
Gains on the damage and scrapping of
193,548.46 94,061.30 193,548.46
non-current assets
Government subsidies unrelated to the normal
- 11,461,703.35 -
operation of the Company
Compensation and penalty income 10,431,951.61 870,715.65 10,431,951.61
Other 11,643,942.02 14,791,012.67 11,643,942.02
Total 22,269,442.09 27,217,492.97 22,269,442.09
Government Subsidies Recorded into Current Profit or Loss:
Reporting Period Same period of last year
Recorde Related to the
Recorded into Recorded Recorded into
Item d into Offset assets/related
non-operating into other Offset costs non-operating to income
other costs
income income income
income
Rewards and subsidies - - - 10,185,622.66 - - 与收益相关
- - - 1,276,080.69 - - 与收益相关
Other
Total - - - 11,461,703.35 - -
59. Non-operating Expense
Amount recorded into the
Item Reporting Period Same period of last year current non-recurring
profit or loss
660,874.41 1,671,547.63
Losses on damage and scraping of
660,874.41
non-current assets
4,603.40 3,500.00 4,603.40
Compensation expense
675,833.69 20,000.00 675,833.69
Donations
2,128,430.01 4,256,701.94 2,128,430.01
Other
222
Konka Group Co., Ltd. Interim Report 2019
Amount recorded into the
Item Reporting Period Same period of last year current non-recurring
profit or loss
Total 3,469,741.51 5,951,749.57 3,469,741.51
60. Income Tax Expense
(1) Lists of Income Tax Expense
Item Reporting Period Same period of last year
Current income tax expense 216,231,934.45 59,240,226.94
Deferred income tax expense -173,118,956.35 -76,686,276.07
Total 43,112,978.10 -17,446,049.13
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Item Reporting Period
Profit before taxation 489,022,159.46
Current income tax expense accounted at statutory/applicable tax rate 122,255,539.87
Influence of applying different tax rates by subsidiaries -51,887,118.22
Influence of income tax before adjustment -3,847,489.30
Influence of non-taxable income 9,582,807.30
Influence of not deductable costs, expenses and losses 7,747,424.23
Influence of deductable loss of unrecognized deferred income tax assets in prior period -17,256,404.67
Influence of deductable temporary difference or deductable losses of unrecognized 8,385,318.90
deferred income tax in the Reporting Period
——
Changes in the balance of deferred income tax assets/ liabilities in previous period due
to adjustment of tax rate
-64,668,684.92
Other
Income tax expense 10,311,393.19
61. Other Comprehensive Income
Refer to Note VI-42 for details.
62. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Item Reporting Period Same period of last year
Commercial factoring accounts 663,814,079.96 1,177,791,975.34
received
223
Konka Group Co., Ltd. Interim Report 2019
Item Reporting Period Same period of last year
Intercourse funds 47,127,011.48 87,455,725.93
Income from government 411,764,189.92 97,520,522.22
subsidy
Front money and guarantee 240,170,401.69 19,955,669.93
deposit
Interest income from bank 11,849,162.63 6,703,808.76
deposits
Income from waste 7,604,938.22 3,377,283.28
Repayment of individual 6,769,448.83 2,206,730.89
borrowings
Compensation from suppliers 13,655,189.62 30,537,543.95
Temporary received repair fund - 17,717.50
Income from penalty and 2,010,832.06 245,081.28
default money
Other income 744,030,565.64 51,447,417.30
Total 2,148,795,820.05 1,477,259,476.38
(2) Cash Used in Other Operating Activities
Item Reporting Period Same period of last year
The commercial factoring payment 380,423,237.70 1,607,828,551.79
Expense for cash payment 731,676,310.00 643,840,207.45
Payment made on behalf 8,037,121.64 18,580,685.28
Payment for guarantee deposit, cash 283,418,660.42 24,577,163.43
deposit and repair
Pretty cash for employees 15,670,997.69 8,894,518.49
Expense for bank handling charges 16,648,496.25 19,513,440.38
Donation expense 558,404.69 10,000.00
Default money 41,154.49 29,600.00
Other expense 555,462,001.38 24,179,903.70
224
Konka Group Co., Ltd. Interim Report 2019
Item Reporting Period Same period of last year
Total 1,991,936,384.26 2,347,454,070.52
(3) Cash Generated from Other Investing Activities
Item Reporting Period Same period of last year
Recovery of financial products 653,954,166.67 942,900,000.00
The principal and interest of the 742,912,711.75 -
entrusted loan were received.
Total 1,396,866,878.42 942,900,000.00
(4) Cash Used in Other Investing Activities
Item Reporting Period Same period of last year
Purchase of financial products 700,000,000.00 774,730,000.00
Other 33,420.00 100,000,000.00
Total 700,033,420.00 874,730,000.00
(5) Cash Generated from Other Financing Activities
Item Reporting Period Same period of last year
Receiving entrused loans 200,000,000.00 -
Other 150,346,627.50 1,023,076.93
Total 350,346,627.50 1,023,076.93
(6) Cash Used in Other Financing Activities
Item Reporting Period Same period of last year
Repayment of entrusted loans 67,293,304.13
Finance lease 167,576,689.17
Financing expense 30,011,935.42 22,612,122.48
Total 264,881,928.72 22,612,122.48
63. 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 operating activities:
Net profit 478,710,766.27 408,732,161.88
225
Konka Group Co., Ltd. Interim Report 2019
Supplemental information Reporting Period Same period of last year
Add: Provision for impairment of assets 61,193,991.05 59,552,100.41
Depreciation of fixed assets, oil-gas assets, and
174,167,944.26 99,977,217.61
productive living assets
Amortization of intangible assets 12,518,556.49 6,800,013.68
Amortization of long-term prepaid expenses 43,303,200.03 39,491,886.63
Losses on disposal of fixed assets, intangible assets -293,705,840.64 -63,722,105.38
and other long-lived assets (gains: negative)
Losses on scrap of fixed assets (gains: negative) 467,325.95 1,577,486.33
Losses on changes in fair value (gains: negative) 3,005,381.67 -59,855,412.48
Finance costs (gains: negative) 442,704,098.64 138,646,255.45
Investment loss (gains: negative) -559,161,027.92 -531,929,987.83
Decrease in deferred income tax assets (gains:
-176,759,673.67 -139,323,718.64
negative)
Increase in deferred income tax liabilities
3,492,398.43 51,576,456.37
(“-” means decrease)
Decrease in inventories (gains: negative) -525,393,810.42 -200,692,963.10
Decrease in accounts receivable generated from
-2,059,798,271.86 -1,290,880,669.75
operating activities (gains: negative)
Increase in accounts payable used in operating
369,279,048.36 -358,107,427.04
activities (decrease: negative)
Other -16,980,258.41 -
Net cash generated from/used in operating -2,042,956,171.77 -1,838,158,705.86
activities
2. Significant investing and financing activities
without involvement of cash receipts and
payments:
Transfer of debt to capital -
Current portion of convertible corporate bonds -
Fixed assets leased in by financing -
3. Net increase/decrease of cash and cash
equivalent:
Ending balance of cash 4,701,245,534.53 3,761,988,635.66
226
Konka Group Co., Ltd. Interim Report 2019
Supplemental information Reporting Period Same period of last year
Less: Beginning balance of cash 3,434,149,481.72 3,097,899,703.76
Add: Ending balance of cash equivalents -
Less: Beginning balance of cash equivalents -
Net increase in cash and cash equivalents 1,267,096,052.81 664,088,931.90
(2) Net Cash Receive from Disposal of Subsidiaries
Item Amount
Cash or cash equivalents received in the Reporting Period from disposal of subsidiaries in the 101,020,500.00
Current Period
Of which: Chuzhou Konka TID 63,520,500.00
Konka E-display 37,500,000.00
Less: cash and cash equivalents held by subsidiaries on the date of losing control power 68,345,326.75
Of which: Chuzhou Konka TID 35,782,809.20
Konka E-display 32,562,517.55
Net cash received from disposal of subsidiaries 32,675,173.25
(3) Cash and Cash Equivalents
Item Ending balance Beginning balance
I. Cash 4,701,245,534.53 3,761,988,635.66
Including: Cash on hand 343,490.38 122,746.45
Bank deposit on demand 4,700,902,044.15 3,761,865,889.21
II. Ending balance of cash and cash equivalents 4,701,245,534.53 3,761,988,635.66
64.Assets with Restricted Ownership or Right to Use
Ending carrying value
Item Reason for restriction
(RMB’0,000)
Of which RMB579.7213 million is various non-callable margin deposit;
RMB315 million is time deposit; RMB49.0818 million is the fund of
Monetary capital 96,902.16 supervisor repaid; RMB19.8 million is the deposit pledged for loans;
RMB3.22 million is blocked funds for litigation; RMB2.1985 million is
restricted for other reasons.
227
Konka Group Co., Ltd. Interim Report 2019
Ending carrying value
Item Reason for restriction
(RMB’0,000)
As of 30 June 2019, the Company pledged notes receivable with carrying
value of RMB1186.883 million for conducting comprehensive financing
Notes receivable 118,688.30
businesses such as opening of banker’ s acceptance bill, L/C, L/G and trade
financing.
For mortgage borrowings. Refer to 25. Short-term Borrowings in Note VI
Fixed assets 36,202.64
For mortgage borrowings. Refer to 34. Short-term Borrowings in Note VI
For mortgage borrowings. Refer to 25. Short-term Borrowings in Note VI
Intangible assets 13,805.57
For mortgage borrowings. Refer to 34 Short-term Borrowings in Note VI
Long-term
34,941.65 For pledge borrowings. Refer to 34 Short-term Borrowings in Note VI
receivables
Total 300,540.32
65. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Item Ending foreign currency balance Exchange rate Ending balance converted to RMB
Monetary capital
Of which: USD 78,554,119.28 6.87470 540,036,003.81
EUR 99,161.51 7.81700 775,145.52
HKD 12,165,085.98 0.87966 10,701,139.53
Accounts receivable
Of which: USD 184,788,743.39 6.87470 1,270,367,174.18
HKD 3,082,190.84 0.87966 2,711,279.99
AUD 49,764.00 4.81560 239,643.52
Other receivables
Of which: USD 26,115,881.89 6.87470 179,538,853.23
Of which: USD 7,487,218.79 0.87966 6,586,206.88
Accounts payable
228
Konka Group Co., Ltd. Interim Report 2019
Item Ending foreign currency balance Exchange rate Ending balance converted to RMB
Of which: USD 118,160,661.74 6.87470 812,319,101.26
HKD 1,531,358.04 0.87966 1,347,074.41
Other payables
Of which: HKD 30,933,727.30 0.87966 27,211,162.56
Short-term borrowings
Of which: USD 139,691,704.64 6.87470 960,338,561.89
Interest payable
Of which: USD 803,078.36 6.87470 5,520,922.80
(2) Notes to Overseas Entities
The significant overseas entities include Hong Kong Konka, Konka Electrical Appliances
International Trading, Chain Kingdom Memory Technologies Co., Ltd., Kangjietong and
Jiali International. The main overseas operating place is Hong Kong. The Company’s
recording currency is HKD since the main currency in circulation in Hong Kong is HKD.
66. Arbitrage
Refer to relevant contents in items notes of in 2. Financial Assets at Fair Value through Profit
or Loss in Note VI.
67. Government Subsidy
(1) Basic Information on Government Subsidy
Amount recorded in the
Category Amount Listed items
current profit or loss
10,000,000.00 Deferred 4,999,999.99
Subsidy for Konka Zhifu Life Science
income/Other
Innovation Center Phase II
income
Rewards and subsidies 53,667,833.01 Other income 53,667,833.01
Tax rebates of software 23,063,806.91 Other income 23,063,806.91
Support fund 66,369.00 Other income 66,369.00
Subsidy for L/C export 326,832.56 Other income 326,832.56
Land tax rebates 3,186,200.00 Other income 3,186,200.00
Post subsidies 86,701.47 Other income 86,701.47
229
Konka Group Co., Ltd. Interim Report 2019
Amount recorded in the
Category Amount Listed items
current profit or loss
Other 346,506,970.00 Other income 246,506,970.00
Provincial special fund for robot project 900,000.00 Deferred income 30,000.00
200,000.00 Deferred 14,080.46
Subsidy for innovation in science and technology income/Other
income
394,700.00 Deferred 47196.08
Technology upgrade of high heat-dissipation and
income/Other
high accuracy PCB
income
Award of cars (Kaiyi) for Sichuan Konka as 79,900.00 Deferred 1,119.54
excellent enterprise –Harbor income/Other
Administration Commission of Yibin income
Total 438,479,312.95 331,997,109.02
(2) Return of Government Subsidy
No such cases in the Reporting Period.
VII. Changes of Consolidation Scope
1. Disposal of subsidiary
Single Disposal of Investment to Subsidiary that Losing Control Power
The differences of
enjoyed net assets share
Equity Recognition basis of the subsidiary in
Method of
Name of the The equity disposal disposal Time of losing for the time of corresponding
equity
price (RMB’0,000) proportion control losing control consolidated statements
subsidiary disposal
(%) power of the disposal price and
the disposal investment
(RMB’0,000)
Transfer of equity,
Konka operation and
3,750.00 15 Transfer 2019-6-21 3,185.78
E-display financial
controlling power
Chuzhou Transfer of equity,
Technological operation and
6,352.05 51 Transfer 2019-6-28 4,554.52
Innovation financial
Centre controlling power
(Continued)
230
Konka Group Co., Ltd. Interim Report 2019
Recognition Amount of other
Residual Carrying value Fair value of Gains or losses
method and main comprehensive
equity of residual residual equity from
assumption of income related to
Name of the proportion on equity on the on the date of re-measurement of
fair value of former subsidiaries
the date of date of losing losing control residual equity at
subsidiary residual equity on transferred into
losing control control power power fair value
the date of losing investment profit or
power (%) (RMB’0,000) (RMB’0,000) (RMB’0,000)
control power loss
Market trading —
Konka
45.00 1,692.67 11,250.00 9,557.33 price
E-display
Market trading —
Chuzhou
price
Technological
49.00 1,727.04 6,102.95 4,375.91
Innovation
Centre
2. Changes in Combination Scope for Other Reasons
Newly-established Subsidiaries of the Company from Jan.-June 2019
Name of the Holding percentage Time and place of gaining Way of
Capital of registration
subsidiary (%) control power gaining
Newly
Shengxing Enterprise 51.00 2019-1-3
10,000,000.00 established
Newly
Youzhihui 100.00 2019-1-24
10,000,000.00 established
Suining Electronic
Newly
Technological 100.00 2019-2-22
200,000,000.00 established
Innovation
Newly
Xiaojia Technology 100.00 2019-3-5
10,000,000.00 established
Newly
Smart Technology 51.00 2019-3-12
20,000,000.00 established
Konka Huanjia Newly
51.00 2019-4-1
(Henan) 50,000,000.00 established
Laizhou Lairun
Newly
Sewage Treatment 24.14 2019-4-11
56,361,600.00 established
Co., Ltd.
Funan Kangrun Watre Newly
40.55 2019-5-10
Co., Ltd. 122,500,000.00 established
Weifang Sikang
Newly
Investment Operation 32.97 2019-5-10
150,000,000.00 established
Co., Ltd.
Yihe Electronic 51.00 2019-5-14 Newly
231
Konka Group Co., Ltd. Interim Report 2019
Name of the Holding percentage Time and place of gaining Way of
Capital of registration
subsidiary (%) control power gaining
10,000,000.00 established
Lushan Kangrun
Newly
Water Treatment Co., 45.44 2019-6-3
100,000,000.00 established
Ltd.
Newly
Shenzhen Huanan 80.00 2019-6-4
90,000,000.00 established
Newly
Chongqing Konka 100.00 2019-6-6
120,000,000.00 established
Dongguan Konka Newly
100.00 2019-6-28
Investment 100,000,000.00 established
VIII. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Holding percentage
Main
Registration (%) Way of
Name operating Nature of business
place Indirect gaining
place Directly
ly
Other organization
Shenzhen, Shenzhen, Establishment
Konka Ventures and management -
Guangdong Guangdong 51.00 or investment
service
Other professional
Yantai, Yantai, Establishment
Yantai Konka consultancy and -
Shandong Shandong 51.00 or investment
investigation
Chengdu, Chengdu, Establishment
Chengdu Konka Commercial service -
Sichuan Sichuan 51.00 or investment
Chengdu, Chengdu, Establishment
Chengdu Anren Commercial service -
Sichuan Sichuan 51.00 or investment
Guiyang, Guiyang, Headquarters Establishment
Konka Enterprise Service -
Guizhou Guizhou management 51.00 or investment
Nanjing, Nanjing, Entrepreneurial space Establishment
Chuanghui Intelligent -
Jiangsu Jiangsu service 40.80 or investment
Other Commercial
Konka Enterprise Guiyang, Guiyang, Establishment
service not listed -
management Guizhou Guizhou 51.00 or investment
clearly
Yibin, Yibin, Establishment
Yibin Konka Incubator Commercial service -
Sichuan Sichuan 51.00 or investment
232
Konka Group Co., Ltd. Interim Report 2019
Holding percentage
Main
Registration (%) Way of
Name operating Nature of business
place Indirect gaining
place Directly
ly
Other IT service
Shenzhen, Shenzhen, Establishment
Cross-Border Kechuang industry not listed -
Guangdong Guangdong 26.01 or investment
clearly
Chuzhou, Chuzhou, Manufacturing Establishment
Anhui Konka -
Anhui Anhui industry 78.00 or investment
Chuzhou, Chuzhou, Establishment
Kangzhi Trade Wholesale industry -
Anhui Anhui 78.00 or investment
Shenzhen, Shenzhen, Insurance agents Establishment
Konka Factoring -
Guangdong Guangdong (non-bank finance) 100.00 or investment
Establishment
Youshi Kangrong Tianjin Tianjin Advertisement -
70.00 or investment
Shenzhen, Shenzhen, Establishment
Konka Unifortune Retail industry -
Guangdong Guangdong 51.00 or investment
Hong
Hong Kong, Establishment
Jiali International Kong, Retail industry -
China 51.00 or investment
China
Shenzhen, Shenzhen, Software Establishment
Wankaida -
Guangdong Guangdong development 100.00 or investment
Dongguan, Dongguan, Manufacturing Establishment
Dongguan Konka
Guangdong Guangdong industry 75.00 25.00 or investment
Telecommunication Shenzhen, Shenzhen, Manufacturing Establishment
Technology Guangdong Guangdong industry 75.00 25.00 or investment
Shenzhen, Shenzhen, Manufacturing Establishment
Electrical Appliances
Guangdong Guangdong industry 75.00 25.00 or investment
Mudanjiang
Mudanjiang, , Manufacturing Establishment
Mudanjiang Appliances -
Heilongjiang Heilongjian industry 60.00 or investment
g
Frankfurt, Frankfurt, Establishment
Konka Europe International Trading -
Germany Germany 100.00 or investment
Commercial System Shenzhen,Shenzhen, Establishment
Commerce -
Technology Guangdong Guangdong 81.00 or investment
Konka Electrical Shenzhen, Shenzhen, Manufacturing Establishment
-
Appliances Guangdong Guangdong industry, commerce 100.00 or investment
Haikou, Haikou, Establishment
Konka Materials Commercial service -
Hainan Hainan 51.00 or investment
233
Konka Group Co., Ltd. Interim Report 2019
Holding percentage
Main
Registration (%) Way of
Name operating Nature of business
place Indirect gaining
place Directly
ly
Shenzhen, Shenzhen, Establishment
Mobile Interconnection Commerce -
Guangdong Guangdong 51.00 or investment
Yibin, Yibin, Manufacturing Establishment
Sichuan Konka -
Sichuan Sichuan industry 51.00 or investment
Chuzhou, Chuzhou, Manufacturing Establishment
Anhui Tongchuang -
Anhui Anhui industry 100.00 or investment
Electrical Appliance Chuzhou, Chuzhou, Manufacturing Establishment
-
Technology Anhui Anhui industry 51.00 or investment
Xinxiang, Xinxiang, Manufacturing Establishment
Frestec Refrigeration -
Henan Henan industry 51.00 or investment
Frestec Electrical Xinxiang, Xinxiang, Manufacturing Establishment
-
Appliances Henan Henan industry 51.00 or investment
Frestec Household Xinxiang, Xinxiang, Manufacturing Establishment
-
Appliances Henan Henan industry 51.00 or investment
Shenzhen, Shenzhen, Establishment
Pengrun Technology Retail industry -
Guangdong Guangdong 51.00 or investment
Hong
Hong Kong, Establishment
Jiaxin Technology Kong, Retail industry -
China 51.00 or investment
China
Haikou, Haikou, Network platform Establishment
E3info -
Hainan Hainan development 60.00 or investment
Shenzhen, Shenzhen, Network platform Establishment
Yifang Technology -
Guangdong Guangdong development 60.00 or investment
Dongguan, Dongguan, Manufacturing Establishment
Dongguan Packing
Guangdong Guangdong industry 75.00 25.00 or investment
Shenzhen, Shenzhen, Establishment
E2info Information service -
Guangdong Guangdong 95.78 or investment
Sale of home Establishment
Beijing Konka Electronic Beijing Beijing -
appliance 100.00 or investment
Tianjin Pilot Tianjin
Establishment
Konka Leasing Free Trade Pilot Free Leasing industry -
100.00 or investment
Zone Trade Zone
Shenzhen, Shenzhen, Establishment
Fittings Technology Investment holding
Guangdong Guangdong 75.00 25.00 or investment
Boluo, Boluo, Manufacturing Establishment
Boluo Konka Precision -
Guangdong Guangdong industry 100.00 or investment
234
Konka Group Co., Ltd. Interim Report 2019
Holding percentage
Main
Registration (%) Way of
Name operating Nature of business
place Indirect gaining
place Directly
ly
Xiamen, Xiamen, Establishment
Xiamen Dalong Commerce -
Fujian Fujian 69.23 or investment
Boluo, Boluo, Manufacturing Establishment
Boluo Konka -
Guangdong Guangdong industry 100.00 or investment
Hong
Hong Kong, Establishment
Hong Kong Konka Kong, International Trading -
China 100.00 or investment
China
Konka Household Hong Kong, Hong Establishment
Kong, Investment holding -
Appliances Investment China 100.00 or investment
China
Hong
Chain Kingdom Memory Hong Kong, Establishment
Kong, International Trading -
Technologies China 51.00 or investment
China
Chain Kingdom Memory Shenzhen, Shenzhen, Establishment
Wholesale industry -
Technologies (Shenzhen) Guangdong Guangdong 51.00 or investment
Hong
Hong Kong, Establishment
Konka SmartTech Kong, International Trading -
China 61.00 or investment
China
Hong
Hong Kong, Establishment
Kangjietong Kong, Service industry -
China 51.00 or investment
China
Konka Household
Hong
Hong Kong, Establishment
Appliances International Kong, International Trading -
China 100.00 or investment
China
Trading
Shenzhen, Shenzhen, Capital markets Establishment
Konka Investment -
Guangdong Guangdong service 100.00 or investment
Development and
Yibin, Yibin, Establishment
Yibin Konka management of -
Sichuan Sichuan 100.00 or investment
industrial park
Chengdu, Chengdu, Establishment
Industry New Town Real estate industry -
Sichuan Sichuan 51.00 or investment
Shenzhen, Shenzhen, Capital markets Establishment
Konka Capital -
Guangdong Guangdong service 100.00 or investment
235
Konka Group Co., Ltd. Interim Report 2019
Holding percentage
Main
Registration (%) Way of
Name operating Nature of business
place Indirect gaining
place Directly
ly
Investment in
industry, commercial
Shenzhen, Shenzhen, Establishment
Konka Suiyong information -
Guangdong Guangdong 51.00 or investment
consultancy and
investment advisor
Municipal road,
Haikou, Haikou, Establishment
Hainan Technology engineering and -
Hainan Hainan 51.00 or investment
buildings
Shenzhen, Shenzhen, Establishment
Kangquan Enterprise Commercial service -
Guangdong Guangdong 51.00 or investment
Yibin, Yibin, Establishment
Sichuan Kangjiatong Service industry -
Sichuan Sichuan 51.00 or investment
Shenzhen, Shenzhen, Manufacturing Establishment
Electronics Technology -
Guangdong Guangdong industry 100.00 or investment
Zhongshan, Zhongshan, Manufacturing Establishment
XingDa HongYe -
Guangdong Guangdong industry 51.00 or investment
Establishment
Shanghai Xinfeng Shanghai Shanghai Commerce -
51.00 or investment
Nanjing, Nanjing, Establishment
Nanjing Konka Wholesale industry -
Jiangsu Jiangsu 100.00 or investment
Chuzhou, Chuzhou, Establishment
Anhui Zhilian e-commerce -
Anhui Anhui 100.00 or investment
Environmental
Yantai, Yantai, Establishment
Econ Technology technology service -
Shandong Shandong 51.00 or investment
industry
Environmental
Establishment
Beijing Econ Beijing Beijing technology service -
51.00 or investment
industry
Environmental
Establishment
Shanghai Jiyi Shanghai Shanghai technology service -
51.00 or investment
industry
Environmental
Binzhou, Binzhou, Establishment
Binzhou Econ technology service -
Shandong Shandong 51.00 or investment
industry
Environmental
Yantai, Yantai, Establishment
Lairun Holdings technology service -
Shandong Shandong 30.60 or investment
industry
236
Konka Group Co., Ltd. Interim Report 2019
Holding percentage
Main
Registration (%) Way of
Name operating Nature of business
place Indirect gaining
place Directly
ly
Environmental
Laizhou Lairun Yantai, Yantai, Establishment
technology service -
Environmental Protection Shandong Shandong 27.54 or investment
industry
Environmental
Yantai, Yantai, Establishment
Binhai Sewage Treatment technology service -
Shandong Shandong 30.60 or investment
industry
Environmental
Yantai, Yantai, Establishment
Lairun Heating technology service -
Shandong Shandong 30.60 or investment
industry
Environmental
Yantai, Yantai, Establishment
Lairun Green Energy technology service -
Shandong Shandong 30.60 or investment
industry
Environmental
Econ Environmental Chengdu, Chengdu, Establishment
technology service -
Engineering Sichuan Sichuan 51.00 or investment
industry
Qingdao Kangrun
Environmental
Honghui Photovoltaic Qingdao, Qingdao, Establishment
technology service -
Power Generation Co., Shandong Shandong 51.00 or investment
industry
Ltd.
Yantai Kangrun Honghui Environmental
Yantai, Yantai, Establishment
Photovoltaic Power technology service -
Shandong Shandong 51.00 or investment
Generation Co., Ltd. industry
Environmental
Weihai, Weihai, Establishment
Rushan Yike technology service -
Shandong Shandong 44.37 or investment
industry
Environmental
Binzhou, Binzhou, Establishment
Binzhou Weiyijie technology service -
Shandong Shandong 35.70 or investment
industry
Environmental
Binzhou, Binzhou, Establishment
Beihai Jingmai technology service -
Shandong Shandong 24.99 or investment
industry
Environmental
Yantai, Yantai, Establishment
Yantai Chunzhiran technology service -
Shandong Shandong 35.70 or investment
industry
Environmental
Yantai, Yantai, Establishment
Lairun Huayang technology service -
Shandong Shandong 26.01 or investment
industry
237
Konka Group Co., Ltd. Interim Report 2019
Holding percentage
Main
Registration (%) Way of
Name operating Nature of business
place Indirect gaining
place Directly
ly
Donggang Kangrun Environmental
Dandong, Dandong, Establishment
Environment technology service -
Liaoning Liaoning 50.63 or investment
Management Co., Ltd. industry
Environmental
Dayi Kangrun Water Co., Chengdu, Chengdu, Establishment
technology service -
Ltd. Sichuan Sichuan 51.00 or investment
industry
Subei Mongol Environmental
Jiuquan, Jiuquan, Establishment
Autonomous County technology service -
Gansu Gansu 39.78 or investment
Kangrun Water Co., Ltd. industry
Suining Pengxi Kangrun Environmental
Suining, Suining, Establishment
Environment technology service -
Sichuan Sichuan 40.75 or investment
Management Co., Ltd. industry
Weifang Sihai Kangrun Environmental
Weifang, Weifang, Establishment
Investment Operation technology service -
Shandong Shandong 27.96 or investment
Co., Ltd. industry
Dalian, Dalian, Processing of Establishment
Konka Huanjia -
Liaoning Liaoning renewable resources 51.00 or investment
Establishment
Shanghai Konka Shanghai Shanghai Real estate industry -
100.00 or investment
Chuzhou, Chuzhou, Establishment
Chuzhou Kangyong Real estate industry -
Anhui Anhui 100.00 or investment
Yantai, Yantai, Establishment
Yantai Konka Real estate industry -
Shandong Shandong 89.71 or investment
Yantai, Yantai, Establishment
Yantai Kangjin Real estate industry -
Shandong Shandong 62.80 or investment
Yantai, Yantai, Establishment
Shangdong Kangxin Real estate industry -
Shandong Shandong 51.00 or investment
Production,
Jiujiang, Jiujiang, Establishment
Jiangxi Konka manufacturing and -
Jiangxi Jiangxi 51.00 or investment
processing
Production,
Nanchang, Nanchang, Establishment
Xinfeng Microcrystalline manufacturing and -
Jiangxi Jiangxi 51.00 or investment
processing
Production,
Jiujiang, Jiujiang, Establishment
Nanocrystalline manufacturing and -
Jiangxi Jiangxi 51.00 or investment
processing
Shenzhen, Shenzhen, Establishment
Shenzhen KONSEMI Semi-conductor -
Guangdong Guangdong 100.00 or investment
238
Konka Group Co., Ltd. Interim Report 2019
Holding percentage
Main
Registration (%) Way of
Name operating Nature of business
place Indirect gaining
place Directly
ly
Shenzhen, Shenzhen, Establishment
Shenzhen Meixin Commerce -
Guangdong Guangdong 51.00 or investment
Hefei, Design of integrated Establishment
Hefei KONSEMI Hefei, Anhui -
Anhui circuit 51.00 or investment
Shenzhen, Shenzhen, Establishment
Shenzhen Nianhua Commercial service -
Guangdong Guangdong 100.00 or investment
Shenzhen, Shenzhen, Establishment
Konka Eco-development Commercial service -
Guangdong Guangdong 51.00 or investment
Foshan, Foshan, Wholesale and retail Establishment
Konka Ronghe -
Guangdong Guangdong industry 51.00 or investment
Development and
Suining Konka Industry Suining, Suining, Establishment
management of -
Park Sichuan Sichuan 100.00 or investment
industrial park
Shenzhen, Shenzhen, Establishment
Konka Suyuan Commercial service -
Guangdong Guangdong 51.00 or investment
Hefei, Wholesale and retail Establishment
Yihe Electronic Hefei, Anhui
Anhui industry - 51.00 or investment
Technology
Lankao, Lankao, Establishment
Konka Huanjia(Henan) promotion and
Henan Henan - 51.00 or investment
application service
Shenzhen, Shenzhen, Wholesale and retail Establishment
Xiaojia Technology
Guangdong Guangdong industry - 100.00 or investment
Suining Electronic Suining, Suining, Establishment
Commercial service
Technological Innovation Sichuan Sichuan 100.00 - or investment
Software and
Establishment
Chongqing Konka Chongqing Chongqing information service
- 100.00 or investment
industry
Software and
Yibin, Yibin, Establishment
Smart Technology information service
Sichuan Sichuan - 51.00 or investment
industry
Environmental
Laizhou Lairun Sewage Yantai, Yantai, protection and Establishment
Treatment Co., Ltd. Shandong Shandong environment - 24.14 or investment
management
Environmental
Funan Kangrun Watre Fuyang, Fuyang, Establishment
technology service
Co., Ltd. Anhui Anhui - 40.55 or investment
industry
239
Konka Group Co., Ltd. Interim Report 2019
Holding percentage
Main
Registration (%) Way of
Name operating Nature of business
place Indirect gaining
place Directly
ly
Shenzhen, Shenzhen, Establishment
Shengxing Enterprise Commercial service
Guangdong Guangdong - 51.00 or investment
Shenzhen, Shenzhen, Capital market Establishment
Shenzhen Huanan
Guangdong Guangdong service - 80.00 or investment
Weifeng Sikang
Weifang, Weifang, Establishment
Investment and Operation Commercial service
Shandong Shandong - 32.98 or investment
Co.,Ltd.
Environmental
Lushan Kangrun
Pingdingsha Pingdingsh protection and Establishment
Environment Treatment
n, Henan an, Henan environment - 45.44 or investment
Co., Ltd.
management
Software and
Shenzhen, Shenzhen, Establishment
Youzhihui information service
Guangdong Guangdong - 100.00 or investment
industry
Dongguan Konka Dongguan, Dongguan, Establishment
Commercial service
Investment Guangdong Guangdong 100.00 - or investment
Hong
Xiangkang Hong Kong, Manufacturing Establishment
Kong,
Telecommunication China industry - 100.00 or investment
China
(2) Significant Non-wholly-owned Subsidiary
Shareholding The profit or loss Declaring dividends Balance of
proportion of attributable to the distributed to non-controlling
Name
non-controlling non-controlling non-controlling interests at the
interests (%) interests interests period-end
Konka Huanjia 49.00 43,900,738.09 - 156,944,346.44
Kangjietong 49.00 7,349,838.13 - 8,350,971.45
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Ending balance
Name Non-current
Current assets Non-current assets Total assets Current liabilities Total liabilities
liability
2,064,552,715.3
Konka Huanjia 2,052,738,106.37 11,814,608.94 1,744,258,130.73 - 1,744,258,130.73
1
Kangjietong 666,718,434.81 144,458.44 666,862,893.25 649,820,094.38 - 649,820,094.38
(Continued)
Name Beginning balance
240
Konka Group Co., Ltd. Interim Report 2019
Non-cur
Non-current
Current assets Total assets Current liabilities rent Total liabilities
assets
liability
Konka Huanjia 787,177,009.78 7,754,884.48 794,931,894.26 564,230,652.73 - 564,230,652.73
Kangjietong 552,691,289.36 190,605.71 552,881,895.07 551,093,788.93 - 551,093,788.93
Reporting Period
Name Total comprehensive Cash flows from operating
Operating revenue Net profit
income activities
Konka Huanjia 3,907,011,852.57 89,593,343.05 89,593,343.05 205,598,381.24
Kangjietong 4,295,624,063.46 14,999,669.64 15,282,794.68 -77,887,373.05
(Continued)
Same period of last year
Name Total comprehensive Cash flows from operating
Operating revenue Net profit
income activities
Konka Huanjia - -85,624.00 -85,624.00 -23,524.00
Kangjietong - -208,307.50 -184,703.75 10,969,529.71
2. The Transaction of the Company with Its Owner’s Equity Share Changed but Still
Controlling the Subsidiary
(1) Note to the Owner’s Equity Share Changed in Subsidiary
On 10 April 2019, E2info non-controlling interests increased the the investment to E2info
and other shareholders renounced pre-emption rights of corresponding newly-increased
registered capital. After completing the above increase, the Company’s shareholding ratio of
E2info is 95.7766%, and it still be controlled by the Company and is still included in the
scope of consolidation.
(2) The Transaction’s Influence on the Equity of Non-controlling Interests and the Owner's
Equity Attributable to the Company as the Parent
Item E2info
Disposal consideration -
—cash 31,666,666.66
—fair value of non-cash assets -
Total disposal consideration 31,666,666.66
Less: Share of net assets accounted by percentage of stock rights disposed 2,261,328.89
241
Konka Group Co., Ltd. Interim Report 2019
Item E2info
Difference 29,405,337.77
Of which: Adjustment of capital reserves 29,405,337.77
Adjustment of surplus reserve -
Adjustment of retained earnings -
3. Equity in Associated Enterprises
(1) Significant Associated Enterprises
Holding Accounting
Main Registrat
percentage (%) treatment of the
Name operating ion Nature of business
Indirectl investment to
place place Directly
y associated enterprise
Manufacturing industry in
Donggu
Chutian Dragon Co., Ltd. Dongguan computer, communication and other - Equity method
an 21.95
electronic equipment
Wuhan Tianyuan
Environmental protection and
Environmental Protection Wuhan Wuhan - Equity method
environment management 20.02
Co., Ltd.
Manufacturing industry in
Shenzhen Yaode Shenzhe
Shenzhen computer, communication and other - Equity method
Technology Co., Ltd. n 20.00
electronic equipment
Kunshan Konka Manufacturing industry in
Electronics Technology Kunshan Kunshan computer, communication and other - Equity method
49.00
Co., Ltd. electronic equipment
(2) Main Financial Information of Significant Associated Enterprise
Ending balance/Reporting Period
Wuhan Tianyuan Kunshan Konka
Item Chutian Dragon Co., Shenzhen Yaode
Environmental Electronics
Ltd. Technology Co., Ltd.
Protection Co., Ltd. Technology Co., Ltd.
Current assets 1,207,329,193.60 277,952,551.38 722,353,178.12 377,689,521.02
Non-current assets 254,585,080.00 480,549,307.71 59,389,129.52 234,144,645.82
Total assets 1,461,914,273.60 758,501,859.09 781,742,307.64 611,834,166.84
Current liabilities 474,053,819.02 175,746,683.09 245,842,169.76 304,276,068.37
Non-current liability 13,397,492.07 99,714,468.48 - 4,500,856.91
242
Konka Group Co., Ltd. Interim Report 2019
Total liabilities 487,451,311.09 275,461,151.57 245,842,169.76 308,776,925.28
Equity of
1,294,915.48 1,575,172.15 - -
non-controlling interests
Equity attributable to
shareholders of the 973,168,047.03 481,465,535.37 535,900,137.88 303,057,241.56
Company as the parent
Share of net assets
accounted by 224,663,128.08 97,328,729.51 114,256,368.01 187,448,765.87
shareholding percentage
Adjusted events
-Goodwill 413,461,970.35 160,562,143.79 109,570,069.72 -
-Unrealized internal
- - -
sales gain and loss
-Other 8,433,857.82
Carrying value of equity
investment to associated 638,125,098.43 257,890,873.30 223,826,437.73 195,882,623.69
enterprises
Fair value of equity
investment to joint
- - - -
ventures with public
offer
Operating revenue 510,594,502.58 114,986,207.34 420,482,080.93 283,867,107.18
Finance costs -868,947.60 2,633,870.27 11,059,244.18 498,876.04
Income tax expense 7,946,521.81 4,799,304.12 2,465,250.56 -
Net profit 56,746,353.10 28,075,014.13 8,078,012.77 -9,820,087.97
Net profit from
- - - -
discontinued operations
Other comprehensive - - - -
243
Konka Group Co., Ltd. Interim Report 2019
income
Total comprehensive
56,746,353.10 28,075,014.13 8,078,012.77 -9,820,087.97
income
Dividends received from
joint venture in the - - - -
Reporting Period
(Continued)
Beginning balance/The same period of last year
Item Wuhan Tianyuan Shenzhen Yaode Kunshan Konka
Chutian Dragon Co.,
Environmental Technology Co., Electronics
Ltd.
Protection Co., Ltd. Ltd. Technology Co., Ltd.
Current assets 230,469,218.29
1,222,095,636.91 698,493,882.82 132,379,197.79
Non-current assets 365,139,896.53
278,261,091.56 95,652,906.71 322,419,882.21
Total assets 595,609,114.82
1,500,356,728.47 794,146,789.53 454,799,080.00
Current liabilities 83,949,518.05
515,045,146.59 229,286,124.16 55,865,275.98
Non-current liability 52,271,637.67
16,794,877.63 1,656,838.09 6,565,214.27
Total liabilities 136,221,155.72
531,840,024.22 230,942,962.25 62,430,490.25
Equity of non-controlling
1,300,578.22 - -
5,361,673.58
interests
Equity attributable to
shareholders of the 458,087,380.88
963,155,030.67 563,203,827.28 392,368,589.75
Company as the parent
Share of net assets
accounted by shareholding 91,708,111.68
211,383,634.58 112,640,765.46 192,260,608.98
percentage
244
Konka Group Co., Ltd. Interim Report 2019
Adjusted events
-Goodwill 160,562,143.79 -
413,461,970.35 109,570,069.72
-Unrealized internal sales
- - - -
gain and loss
-Other - - - 8,433,857.82
Carrying value of equity
investment to associated 252,270,255.47
624,845,604.93 222,210,835.18 200,694,466.80
enterprises
Fair value of equity
investment to joint ventures - - - -
with public offer
Operating revenue 486,019,598.26 95,131,035.31 319,742,579.72 649,068,015.15
Finance costs -3,172,333.74 164,372.53 7,373,783.33 -3,467,057.33
Income tax expense 13,415,113.49 4,000,799.52 2,534,205.92 0
Net profit 64,781,109.89 26,066,324.30 18,526,218.16 7,321,158.81
— — — —
Net profit from discontinued
operations
— — — —
Other comprehensive
income
Total comprehensive
64,781,109.89 26,066,324.30 18,526,218.16 7,321,158.81
income
Dividends received from
joint venture in the — — — —
Reporting Period
IX. The Risk Related to Financial Instruments
The Company’s main financial instruments include equity investment, credit investment,
borrowings, accounts receivable, accounts payable, etc. Details of the various financial
instruments are shown in the relevant notes to Annotation VI. Risks related to these financial
245
Konka Group Co., Ltd. Interim Report 2019
instruments, and risk management policies the Company has adopted to reduce these risks
are described as follows. The Company management manages and monitors the risk
exposure in order to ensure the above risks to be controlled in a limited scope.
The Company use sensitivity analysis technology to analyze the reasonable of risk variables,
influence of probable changes to the current profit or loss and Stockholders’ equity. Because
rarely any risk variables change in isolation, and the correlation between variables for the
eventual impact of the change of a risk variables will have a significant effect, thus, the
aforesaid content was processing under the assumption of the change of each variable was
conducted independently.
(I) Risk Management Objectives and Policies
The goals of Company engaged in the risk management is to achieve the proper balance
between the risks and benefits, reduced the negative impact to the Company operating
performance risk to a minimum, maximized the profits of shareholders and other equity
investors. Based on the risk management goal, the basic strategy of the Company's risk
management is determine and analyze the various risks faced by the Company, set up the
bottom line of risk and conducted appropriate risk management, and timely supervised
various risks in a reliable way and controlled the risk within the range of limit.
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 USD. Except
the procurement and sales by US dollars for several subsidiaries of the Company, such as
Konka Hong Kong, Konka Electrical Appliances International Trading, Chain Kingdom
Memory Technologies, Kangjietong and Jiali, etc., the other main businesses of the Company
were settled by RMB. As of 30 June 2019, except for the assets or liabilities mentioned in the
table below, the assets and liabilities of the Company are mainly the balance of RMB. The
foreign exchange risks produced by the assets and liabilities balance may affect the business
performance of the Company.
Item Period-end Period-begin
Cash and cash equivalents 78,554,119.28 135,723,407.43
Accounts receivable 184,788,743.39 130,507,627.96
Other receivables 26,115,881.89 13,848,369.43
Interest receivable - 54,781.10
Accounts payable 118,160,661.74 21,644,634.75
246
Konka Group Co., Ltd. Interim Report 2019
Item Period-end Period-begin
Short-term borrowings 139,691,704.64 208,330,389.67
Interest payable 803,078.36 1,302,303.49
The Company timely paid attention to the influence of change of the exchange rate to the
Company’s foreign exchange risk, which required the Group and others which conducted
purchase and sale with settlement by foreign currency to purchase foreign currency long-term
forward contract to lock the cost of purchase on forward date to reduce the risk exposure of
foreign exchange.
The foreign exchange risk sensitivity analysis assumes that all overseas business net
investment hedging and cash flow hedging are highly effective. On the basis of the above
assumptions, the pre-tax effects of reasonable changes in exchange rates on current profits
and losses and shareholders’ equity are as follows, with other variables unchanged:
Item Change in interest rate Influence on shareholders’ equity
Net assets in
Up 1.00% to RMB 1,588,225.84
USD
Net assets in
Down 1.00% to RMB -1,588,225.84
USD
(2) Interest Rate Risk- Cash Flow Change Risk
Cash flow change risk caused by financial instruments due to interest rate change is related to
bank loans. 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.
The risk of change in cash flow of financial instruments due to the change of interest rate of
the Company is mainly related to the borrowing of banks. As of 30 June 2019, the long-term
and short-term borrowings had a total balance of RMB14,448,367,813.
Interest rate risk sensitivity analysis:
The Sensitivity analysis to interest rate risk was based on the follow assumption:
Market interest rates change may affect the interest income or expense of variable rate
financial instruments;
For fixed-rate financial instruments measured at fair value, changes in market interest rates
only affect their interest income or expenses;
247
Konka Group Co., Ltd. Interim Report 2019
For derivative financial instruments designated as hedging instruments, changes in market
interest rates affect their fair value, and all interest rate hedges are expected to be highly
effective;
Calculate the fair value changes of derivative financial instruments and other financial
assets and liabilities using the discounted cash flow method at the market interest rate on the
balance sheet date.
On the basis of the above assumptions, the pre-tax effects of reasonable changes in interest
rates on current profits and losses and shareholders’ equity are as follows, with other
variables unchanged:
Chang Reporting Period Same period of last year
e in Influence on
Item Influence on
interes Influence on profits Influence on profits shareholders’
shareholders’ equity
t rate equity
Interest of
short-term and Up
-144,483,678.13 -108,362,758.60 -108,984,477.03 -81,738,357.77
long-term 1%
borrowings
Interest of
short-term and Down
144,483,678.13 108,362,758.60 108,984,477.03 81,738,357.77
long-term 1%
borrowings
2. Credit Risk
On 30 June 2019, 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:
carrying amount recognized in consolidated balance sheet. For financial instruments
measured at fair value, the carrying value reflect its risk exposure, but not the biggest one,
and 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 at each
balance sheet date, review every single receivables recycling situation, to ensure that the
money unable to recycle withdrawn provision for bad debt fully. Thus, the Company
management believed that have assume the credit risk the Company shouldered had been
greatly reduced.
The Company’s working capital was in bank with higher credit rating, so credit risk of
248
Konka Group Co., Ltd. Interim Report 2019
working capital was low.
An analysis of a financial asset that has suffered a single impairment, including factors that
determine the impairment of the financial asset.
The Company has adopted the necessary policies to ensure that all sales customers have a
good credit history. Except for the items listed in the table below, the company has no other
major credit concentration risks.
Item Ending balance e Beginning balance
Accounts receivable
CEFC(Shanghai) Group Co.,Ltd. 300,027,889.84 300,027,889.84
Jiangsu Hongtu Sanbao High-Tech
200,000,000.00 200,000,000.00
Technology Co.,Ltd.
Elion Resources Group Limited. 115,000,000.00 120,000,000.00
Jizhong Energy International Logistics Group
0.00 130,000,000.00
Co., Ltd.
China Nuclear Engineering Construction
84,500,000.00 90,000,000.00
Group Co., Ltd.
CCCC First Harbor Engineering Co., Ltd. 65,221,300.00 0.00
Tahoe Group Co, Ltd. 50,000,000.00 50,000,000.00
China Energy Power Fuel Co., Ltd. 50,000,000.00 50,000,000.00
DSC HOLDINGS LIMITED 24,462,454.04 24,421,550.36
Other receivables
National energy-saving and benefiting people
152,402,680.00 152,402,680.00
(Energy-saving subsidies)
Shenzhen Konka Video & Communication
18,115,952.51 18,115,952.51
Systems Engineering Co., Ltd.
Chongqing Konka Auto Electronic Company 13,396,856.82 13,396,856.82
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
249
Konka Group Co., Ltd. Interim Report 2019
Company monitored the use of bank’s loans and guaranteed the observance of the borrowing
agreements.
The Company took the bank’s loans as the main financing channel. The retained amount of
loans of the Company by the end of 30 June 2019 was RMB6447.995 million.
(II) Offset between Financial Assets and Financial Liabilities
At the end of the period, the status of confirmed financial assets under an enforceable total
offset agreement or similar agreement is as follows:
Period-end
Item Total confirmed Amount offset of confirmed Net financial assets listed in the balance
financial assets financial liabilities sheet
Other
4,574,341,332.80 4,634,560,510.88 60,219,178.08
receivables
Note: The Company signed the general offset agreements with the bank of finance products,
time deposit, import and export invoice financing, L/C and bank’s acceptance bills.
X．The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Ending fair value
Item Fair value Fair value Fair value
measurement measurement measurement Total
items at level 1 items at level 2 items at level 3
I. Consistent fair value measurement
(I) Trading financial assets - - 61,494,666.97 61,494,666.97
- - 61,494,666.97 61,494,666.97
1. Financial assets at fair value through
profit or loss
(1) Debt instrument investment - - - -
- - 61,494,666.97 61,494,666.97
(2) Equity instrument investment
- - - -
(3) Derivative financial assets
(II) Other equity investment - - - -
(III) Other equity instrument investment - - 19,140,214.36 19,140,214.36
(IV) Other non-current financial assets - - 1,548,364,400.00 1,548,364,400.00
Total assets of consistent fair value - - 1,628,999,281.33 1,628,999,281.33
measurement
(V) Trading financial liabilities - - - -
Total liabilities of consistent fair
250
Konka Group Co., Ltd. Interim Report 2019
Ending fair value
Item Fair value Fair value Fair value
measurement measurement measurement Total
items at level 1 items at level 2 items at level 3
value measurement
Total assets of inconsistent fair
value measurement
Total liabilities of inconsistent fair
- - - -
value measurement
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value
Measurement Items at Level 3
Consistent and inconsistent fair value measurement items at level 3 adopting the value
appraisal techniques and the qualitative and quantitative information of important parametric
in non-listed equity instrument investment, the Company concerned shall adopt investment
cost method, market multiplier method, and net assets method to estimate the fair value. The
Company believes that the fair value and changes estimated by using value appraisal
techniques is reasonable, and will be the most appropriate value on the balance sheet date.
XI. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
Proportion of Proportion of
share held by voting rights
Registrat
Registered the Company as owned by the
Name ion Nature of business
capital the parent Company as the
place
against the parent against the
Company (%) Company (%)
Overseas Chinese Town Shenzhe Tourism, real estate, electronics
RMB12 billion 29.999997 29.999997
Enterprises Co. n industry
Note: The final controller of the Company is State-owned Assets Supervision and
Administration Commission
2. Subsidiaries of the Company
Refer to Note VIII-1. Equity in Subsidiaries
3. Information on the Associated Enterprises of the Company
Refer to Note VIII-3. Equity in Associated Enterprises for details of significant associated
enterprises of the Company. Information on other joint ventures or associated enterprises
occurring connected transactions with the Company in Reporting Period, or forming balance
due to connected transactions made in previous period:
Name Relationship with the Company
Shenzhen Konka Information Network Co., Ltd. Associated enterprise
251
Konka Group Co., Ltd. Interim Report 2019
Name Relationship with the Company
Anhui Kaikai Shijie E-commerce Co., Ltd. Associated enterprise
Beijing Konka Technology Co., Ltd. Associated enterprise
Binzhou Beihai Weiqiao Solid Waste Disposal Co., Ltd. Associated enterprise
Oriental Huijia (Zhuhai) Asset Management Co., Ltd. Associated enterprise
Feidi Technology (Shenzhen) Co., Ltd. Associated enterprise
Guangdong Hotcomm Information Technology Co., Ltd. Associated enterprise
Helongjiang Longkang Zhijia Technology Co., Ltd. Associated enterprise
Konka Ventures Associated enterprise
Kunshan Konka Electronic Co., Ltd. Associated enterprise
Shenzhen Jielunte Technology Co., Ltd. Associated enterprise
Shenzhen Konka Intelligent Electrical Apparatus Co., Ltd. Associated enterprise
Shenzhen RF-LINK Technology Co., Ltd. Associated enterprise
Shenzhen Yaode Technology Co., Ltd. Associated enterprise
Shenzhen Zhongbing Konka Technology Co., Ltd. Associated enterprise
Weihai Water Environmental protection Technology
Associated enterprise
Co.,Ltd.
Chongqing Qingjia Associated enterprise
Zhuhai Jinsu Plastic Co., Ltd. Associated enterprise
Guoguang Ruilian (Shenzhen) Internet Technology Co.,
Associated enterprise
Ltd.
Chuzhou Konka Technology & Industry Development
Associated enterprise
Co., Ltd.
Henan Konka Smart Electrical Appliance Co., Ltd. Associated enterprise
Shandong Konka Smart Electrical Appliance Co., Ltd. Associated enterprise
Shenzhen E-display Co., Ltd. Associated enterprise
HorgosYilingfang Information Technology Co., Ltd. Associated enterprise
4. Information on Other Related Parties
Name Relationship with the Company
Guoguang Eastern Network (Beijing) Co., Ltd. Shareholder of the associated enterprise
Anhui Konka Green Lighting Technology Co., Ltd. Subsidiary of associated enterprise
Nanjing Smart Light Information Technology Research
Minority shareholder of subsidiary
Institute Co., Ltd.
Chengdu One Belt Communication Equipment Co., Ltd. Minority shareholder of subsidiary
Shenzhen Konka Unifortune Technology Co., Ltd. Minority shareholder of subsidiary
AUJET INDUSTRY LIMITED Minority shareholder of subsidiary
Chuzhou Hanshang Electric Appliance Co.,Ltd. Minority shareholder of subsidiary
252
Konka Group Co., Ltd. Interim Report 2019
Shenzhen Henglongtong Technology Co., Ltd. Minority shareholder of subsidiary
Shenzhen Trade Link Supply Chain Management Co.,
Minority shareholder of subsidiary
Ltd.
Rushan Water Group Co., Ltd. Minority shareholder of subsidiary
Huarun Environment Water Co., Ltd. Minority shareholder of subsidiary
Weihai Water Group Sewerage Co., Ltd. Minority shareholder of subsidiary
Laizhou Jinzhou Investment Co., Ltd. Minority shareholder of subsidiary
DaosuiGroup Engineering Co.,Ltd. Minority shareholder of subsidiary
Weihai WaterGroup Co., Ltd. Minority shareholder of subsidiary
China Tiesiju Civil Engineering Group Co.Ltd Minority shareholder of subsidiary
Huanjia Group Co.,Ltd. Minority shareholder of subsidiary
Laizhou Urban Investment Development Co., Ltd. Minority shareholder of subsidiary
Subei Mongol Autonomous County Urban Construction
Minority shareholder of subsidiary
Investment Co., Ltd.
UNIFORTUNE （HK） COMPANY LIMITED Majority-owned company controlled by minority shareholder
Guangan Ouqishi Electronic Technology Co., Ltd. Majority-owned company controlled by minority shareholder
Guizhou Jiaguida Technology Co., Ltd. Majority-owned company controlled by minority shareholder
Zhongliada Co.,Ltd. Majority-owned company controlled by minority shareholder
Hu Jiawen Close family members of the non-controlling interest
Dai Rongxing Close family members of the non-controlling interest
Changrong Media Co., Ltd. The final controller of the non-controlling interest of the
subsidiary
Controlled by the final controller of the non-controlling interest
Jiangxi Meiji Industry Co., Ltd.
of the subsidiary
Shenzhen Zhonglian Datong Supply Chain Management Controlled by the final controller of the non-controlling interest
and Consulting Co., Ltd. of the subsidiary
5. List of Related-party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service
① Information on acquisition of goods and reception of labor service
Related party Content Reporting Period Same period of last year
Supply chain
Guangan Ouqishi Electronic Technology Co., Ltd. commodity 253,830,553.49 -
purchase
Purchase of
Kunshan Konka Electronic Co., Ltd. materials and 274,774,273.58 576,672,801.38
commodity
Purchase of mobile
Guizhou Jiaguida Technology Co., Ltd. 86,082,016.27 -
phones
253
Konka Group Co., Ltd. Interim Report 2019
Related party Content Reporting Period Same period of last year
Commodity
Shenzhen Konka Information Network Co., Ltd. 15,852,710.51 219,735,005.00
purchase
Shenzhen Jielunte Technology Co., Ltd. and its Purchase of
90,792,814.55 165,222,526.85
subsidiaries materials
Supply chain
Shenzhen Trade Link Supply Chain Management Co.,
commodity 73,460,368.85 -
Ltd.
purchase
Commodity
Chuzhou Hanshang Electric Appliance Co.,Ltd. 272,127,488.75 -
purchase
Purchase of
OCT Group and its subsidiaries materials and 9,225,567.47 13,494,613.22
service
Commodity
Anhui Kaikai Shijie E-commerce Co., Ltd. 3,139,931.77 -
purchase
Purchase of
Zhuhai Jinsu Plastic Co., Ltd. 6,015,944.41 4,146,000.00
materials
Changrong Media Co., Ltd. Advertising agency 896,226.41 1,660,000.00
Shenzhen Konka Intelligent Electrical Apparatus Co., Commodity
2,468,262.65 289,054.46
Ltd. purchase
Commodity
Beijing Konka Technology Co., Ltd. - 1,393,783.09
purchase
Purchase of
Shenzhen RF-LINK Technology Co., Ltd. 7,129,499.00 -
materials
Shenzhen Zhonglian Datong Supply Chain
Consultancy - 1,160,469.47
Management and Consulting Co., Ltd
Purchase of
Shenzhen Yaode Technology Co., Ltd. 114,631.57 -
materials
Guoguang Ruilian (Shenzhen) Internet Technology Commodity
- 351,361.55
Co., Ltd. purchase
Commodity
Huanjia Group Co., Ltd. 413,499,020.39 -
purchase
Binzhou Beihai Weiqiao Solid Waste Disposal Co.,
Purchase service - 7,391,146.29
Ltd.
② Information of sales of goods and provision of labor service
Related party Content Reporting Period Same period of last year
Supply chain
AUJET INDUSTRY LIMITED 116,061,505.67 -
commodity sales
Kunshan Konka Electronic Co., Ltd. Sales of materials 241,955,310.50 422,921,017.22
Anhui Kaikai Shijie E-commerce Co., Ltd. Commodity sales 352,930,313.69 -
254
Konka Group Co., Ltd. Interim Report 2019
Guangan Ouqishi Electronic Technology Co., Supply chain
228,125,999.21 -
Ltd.
commodity sales
Shenzhen Konka Information Network Co., Sales of materials,
2,174,394.52 102,627,704.48
Ltd.
provide service
Shenzhen Yaode Technology Co., Ltd. Sales of materials 224,738,792.69 -
Sales of commodity
OCT Group and its subsidiaries and providing 18,520,935.33 18,646,368.89
services
Shenzhen Jielunte Technology Co., Ltd. and Providing labor
42,653,586.74 14,485,742.69
its subsidiaries service
Helongjiang Longkang Zhijia Technology
Sales of commodity 11,863,615.67 -
Co., Ltd.
Zhonglianda Co., Ltd. Sales of materials 6,785,233.07 -
Shenzhen Trade Link Supply Chain
Sales of materials 3,900,956.90 -
Management Co., Ltd.
Guoguang Ruilian (Shenzhen) Internet
Advertising service 294,667.21 -
Technology Co., Ltd.
Guoguang Eastern Network (Beijing) Co.,
Advertising service 9,838.02 1,385,765.21
Ltd.
Feidi Technology (Shenzhen) Co., Ltd. and its
Rental service 2,000,434.75 -
subsidiaries
Shenzhen RF-LINK Technology Co., Ltd. Rental service 291,552.02 -
Oriental Huijia (Zhuhai) Asset Management
Rental service 197,959.99 -
Co., Ltd.
Beijng Konka Tchnology Co., Ltd. Rental service 325,631.95 7,901,215.40
Shenzhen Konka Intelligent Electrical
Sales of commodity - 3,235.90
Apparatus Co., Ltd.
Binzhou Beihhai Weiqiao Solid and Waste
Engineering expense 2,294,871.78 -
Treatment Co., Ltd.
Chuzhou Hanshang Electric Appliance
Sales of materials 12,761,245.95 -
Co.,Ltd.
Chuzhou Konka Technology & Industry Providing labor
1,415,094.30 -
Development Co., Ltd. service
Guizhou Jiaguida Technology Co., Ltd. Sales of commodity 256,149.18 -
Henan Konka Smart Electrical Appliance Co.,
Sales of commodity 3,412,835.40 -
Ltd.
255
Konka Group Co., Ltd. Interim Report 2019
Shandong Konka Smart Electrical Appliance
Sales of commodity 35,713,503.46 -
Co., Ltd.
(2) Information on Related-party Lease
Category of The lease fee confirmed in The lease fee confirmed in the
Name of lessor
leased assets the Reporting Period same period of last year
Commercial
residential
OCT Group and its subsidiaries 711,709.06 -
building and
office building
(3) Information on Related-party Guarantee
① The Company was guarantor
Guarantee Execution
Secured party amount Currency Start date End date accomplish
(RMB’0,000) ed or not
Anhui Tongchuang 1,398.00 CNY 2018-11-7 2019-11-7 Not
Anhui Tongchuang 500.00 CNY 2018-9-20 2019-8-14 Not
Anhui Tongchuang 1,057.50 CNY 2019-1-10 2019-11-14 Not
Anhui Tongchuang 3,901.00 CNY 2019-1-11 2020-1-11 Not
Anhui Tongchuang 2,018.50 CNY 2019-1-23 2020-1-23 Not
Anhui Tongchuang 3,573.53 CNY 2018-5-9 - Not
Anhui Tongchuang 2,869.00 CNY 2018-6-19 - Not
Hong Kong Konka 2,300.00 USD 2019-3-13 2020-3-13 Not
Hong Kong Konka 1,500.00 USD 2018-8-7 2019-8-6 Not
Anhui Konka 10,000.00 CNY 2018-12-6 2019-12-6 Not
Sichuan Konka 5,000.00 CNY 2018-5-28 2025-5-24 Not
Sichuan Konka 4,000.00 CNY 2019-3-18 2022-3-17 Not
XingDa HongYe 5,800.00 CNY 2018-11-21 2020-11-21 Not
XingDa HongYe 950.00 CNY 2018-11-13 2020-11-13 Not
XingDa HongYe 3,897.52 CNY 2019-4-19 2020-4-18 Not
XingDa HongYe 1,000.00 CNY 2019-5-20 2020-5-19 Not
Econ Technology 3,135.00 CNY 2018-10-10 2019-10-10 Not
Econ Technology 703.00 CNY 2019-4-23 2020-4-22 Not
256
Konka Group Co., Ltd. Interim Report 2019
Guarantee Execution
Secured party amount Currency Start date End date accomplish
(RMB’0,000) ed or not
Econ Technology 5,000.00 CNY 2019-5-13 2020-5-12 Not
Jiangxi Konka 10,000.00 CNY 2018-12-4 2019-12-31 Not
Jiangxi Konka 10,000.00 CNY 2018-12-7 2019-12-6 Not
Jiangxi Konka 10,900.00 CNY 2019-3-18 2021-9-18 Not
Jiangxi Konka 10,000.00 CNY 2019-2-28 2020-2-28 Not
Jiangxi Konka 2,500.00 CNY 2019-6-27 2020-6-26 Not
Xinfeng Microcrystalline 3,550.00 CNY 2019-6-19 2020-6-18 Not
Anhui Electrical 13,000.00 CNY 2019-2-2 2024-2-2 Not
Bokang Precise 1,779.11 CNY 2019-2-20 2021-2-20 Not
Electronics Technology 3,934.74 CNY 2019-4-18 2020-4-18 Not
Electronics Technology 316.39 CNY 2019-6-20 2020-5-17 Not
Rushan Yike Water Treatment Co.,
14,740.00 CNY 2016-12-29 2026-12-28 Not
Ltd.
Jiangxi Xinxin Jian’an Engineering
10,000.00 CNY 2016-12-19 - Not
Co., Ltd.
Jiangxi Zhongyi Decoration Material
10,000.00 CNY 2016-12-19 - Not
Co., Ltd.
Jiangxi Shanshi Technology
10,000.00 CNY 2016-12-19 - Not
Development Co., Ltd.
Refer to Note XII-2.-(2) Contingent Liabilities Generated from Providing Debt Guarantees
for Other Entities and Financial Influence thereof for details of external guarantees of the
Company.
② The Company was secured party
Guarantee
Execution
amount
Guarantor: Currency Start date End date accomplis
(RMB’0,000
hed or not
)
Chuzhou State-owned Assets Management
2,200.00 CNY 2018-12-6 2019-12-6 Not
Co., Ltd.
Shenzhen Kangwei Investment Partnership
2,450.00 CNY 2018-5-28 2025-5-24 Not
(Limited Partnership)
Shenzhen Kangwei Investment Partnership
1,960.00 CNY 2019-3-18 2022-3-17 Not
(Limited Partnership)
257
Konka Group Co., Ltd. Interim Report 2019
Guarantee
Execution
amount
Guarantor: Currency Start date End date accomplis
(RMB’0,000
hed or not
)
Yantai Baijiangyuan Business Management
816.35 CNY 2018-10-10 2019-10-10 Not
Center (Limited Partnership)
Yantai Fengqingtai Investment Center
363.03 CNY 2018-10-10 2019-10-10 Not
(Limited Partnership)
Yantai Qingrunyuan Business Management
333.56 CNY 2018-10-10 2019-10-10 Not
Center (Limited Partnership)
Yantai Qingjiangchuan Business
23.20 CNY 2018-10-10 2019-10-10 Not
Management Center (Limited Partnership)
Zhu Xinming 4,900.00 CNY 2018-12-4 2019-12-31 Not
Zhu Xinming 4,900.00 CNY 2018-12-7 2019-12-6 Not
Hunan Vary Tech Packing Co., Ltd. 2,000.00 CNY 2017-4-5 - Not
Huanjia Group Co., Ltd. 24,500.00 CNY 2018-8-7 2023-8-6 Not
Zhu Xinming and Leng Sumin 21,165.00 CNY 2018-10-15 2020-10-14 Not
Wulianfeng Huichuan Network Technology
2,585.25 CNY 2018-8-28 2020-8-27 Not
Partnership (Limited Partnership)
Wulianfeng Huichuan Network Technology
1,056.34 CNY 2018-8-28 2020-8-27 Not
Partnership (Limited Partnership)
Yantai Fengqingtai Investment Center
1,149.66 CNY 2018-8-28 2020-8-27 Not
(Limited Partnership)
Wulianfeng Huichuan Network Technology
73.47 CNY 2018-8-28 2020-8-27 Not
Partnership (Limited Partnership)
Yantai Baijiangyuan Business Management
5,774.37 CNY 2018-12-20 2020-12-19 Not
Center (Limited Partnership)
Yantai Fengqingtai Investment Center
2,567.87 CNY 2018-12-20 2020-12-19 Not
(Limited Partnership)
Yantai Qingrunyuan Business Management
2,359.42 CNY 2018-12-20 2020-12-19 Not
Center (Limited Partnership)
Yantai Qingjiangchuan Business
164.10 CNY 2018-12-20 2020-12-19 Not
Management Center (Limited Partnership)
Huanjia Group Co., Ltd. 49,000.00 CNY 2019-1-18 2021-1-17 Not
Shenzhen MeixinqiTechnology Partnership
7,350.00 CNY 2019-1-29 2020-1-28 Not
(Limited Partnership)
Chuzhou Hanshang Electric Appliance
6,370.00 CNY 2019-2-2 2024-2-2 Not
Co.,Ltd.
Jiangxi Xinzixin Real Estate Co., Ltd. 1,739.50 CNY 2019-6-19 2020-6-18 Not
258
Konka Group Co., Ltd. Interim Report 2019
Guarantee
Execution
amount
Guarantor: Currency Start date End date accomplis
(RMB’0,000
hed or not
)
Jiangxi Xinzixin Real Estate Co., Ltd. 1,225.00 CNY 2019-6-27 2020-6-26 Not
Jiangxi Xinzixin Real Estate Co., Ltd. 5,341.00 CNY 2019-3-18 2021-9-18 Not
Jiangxi Xinzixin Real Estate Co., Ltd. 4,900.00 CNY 2019-4-23 2020-4-23 Not
Shenzhen Musen Enterprise Co., Ltd. 14,700.00 CNY 2019-3-19 2020-3-18 Not
Yantai Qingrunyuan Business Management
74.80 CNY 2019-4-23 2022-4-23 Not
Center (Limited Partnership)
Yantai Qingjiangchuan Business
5.20 CNY 2019-4-23 2022-4-23 Not
Management Center (Limited Partnership)
Yantai Baijiangyuan Business Management
183.06 CNY 2019-4-23 2022-4-23 Not
Center (Limited Partnership)
Yantai Fengqingtai Investment Center
81.41 CNY 2019-4-23 2022-4-23 Not
(Limited Partnership)
Yantai Qingrunyuan Business Management
532.00 CNY 2019-5-13 2022-5-12 Not
Center (Limited Partnership)
Yantai Qingjiangchuan Business
37.00 CNY 2019-5-13 2022-5-12 Not
Management Center (Limited Partnership)
Yantai Baijiangyuan Business Management
1,302.00 CNY 2019-5-13 2022-5-12 Not
Center (Limited Partnership)
Yantai Fengqingtai Investment Center
579.00 CNY 2019-5-13 2022-5-12 Not
(Limited Partnership)
Guizhou Huajinrun Technology Co., Ltd. 26,764.00 CNY 2018-1-1 2022-4-20 Not
Shenzhen Henglongtong Technology Co.,
26,764.00 CNY 2018-01-01 2022-4-20 Not
Ltd.
Hu Zehong 9,325.78 CNY 2018-7-1 2021-6-30 Not
Hu Zehong 4,168.70 CNY 2018-7-1 2021-6-30 Not
Li Chunsheng 127.44 CNY 2018-7-1 2021-6-30 Not
Dai Yaojin 127.44 CNY 2018-7-1 2021-6-30 Not
Liang Ruiling 127.44 CNY 2018-7-1 2021-6-30 Not
AUJET INDUSTRY LIMITED 245.00 USD 2018-5-18 2019-5-17 Not
AUJET INDUSTRY LIMITED 73.50 USD 2018-8-6 2019-8-5 Not
AUJET INDUSTRY LIMITED 98.00 USD 2018-8-14 2019-8-13 Not
AUJET INDUSTRY LIMITED 147.00 USD 2018-8-17 2019-8-16 Not
259
Konka Group Co., Ltd. Interim Report 2019
Guarantee
Execution
amount
Guarantor: Currency Start date End date accomplis
(RMB’0,000
hed or not
)
AUJET INDUSTRY LIMITED 147.00 USD 2018-8-27 2019-8-26 Not
AUJET INDUSTRY LIMITED 98.00 USD 2018-9-14 2019-9-13 Not
AUJET INDUSTRY LIMITED 245.00 USD 2018-9-26 2019-9-25 Not
AUJET INDUSTRY LIMITED 98.00 USD 2018-9-28 2019-9-27 Not
AUJET INDUSTRY LIMITED 245.00 USD 2018-10-9 2019-10-8 Not
AUJET INDUSTRY LIMITED 686.00 USD 2018-10-11 2019-10-10 Not
AUJET INDUSTRY LIMITED 392.00 USD 2018-10-16 2019-10-15 Not
AUJET INDUSTRY LIMITED 245.00 USD 2018-10-23 2019-10-22 Not
AUJET INDUSTRY LIMITED 49.00 USD 2018-10-26 2019-10-25 Not
AUJET INDUSTRY LIMITED 171.50 USD 2018-11-1 2019-10-31 Not
AUJET INDUSTRY LIMITED 34.30 USD 2018-12-28 2019-12-27 Not
AUJET INDUSTRY LIMITED 117.60 USD 2019-1-23 2020-1-22 Not
AUJET INDUSTRY LIMITED 245.00 USD 2019-3-12 2020-3-11 Not
AUJET INDUSTRY LIMITED 73.50 USD 2019-5-30 2019-7-13 Not
AUJET INDUSTRY LIMITED 88.20 USD 2019-6-28 2020-6-27 Not
Guizhou Huajinrun Technology Co., Ltd. 181.30 USD 2018-5-18 2021-12-30 Not
Guizhou Huajinrun Technology Co., Ltd. 73.50 USD 2018-7-26 2021-12-30 Not
Guizhou Huajinrun Technology Co., Ltd. 147.00 USD 2018-7-31 2021-12-30 Not
Guizhou Huajinrun Technology Co., Ltd. 98.00 USD 2018-8-17 2021-12-30 Not
Guizhou Huajinrun Technology Co., Ltd. 98.00 USD 2018-9-27 2021-12-30 Not
Guizhou Huajinrun Technology Co., Ltd. 196.00 USD 2018-10-25 2021-12-30 Not
Guizhou Huajinrun Technology Co., Ltd. 84.33 USD 2019-5-23 2022-4-19 Not
Guizhou Huajinrun Technology Co., Ltd. 24.50 USD 2019-5-30 2021-7-12 Not
Guizhou Huajinrun Technology Co., Ltd. 44.45 USD 2019-6-20 2022-4-19 Not
Shenzhen Konka Unifortune Technology
1,470.00 USD 2018-9-26 2021-10-29 Not
Co., Ltd.
Shenzhen Konka Unifortune Technology
2,940.00 USD 2018-5-28 2021-11-1 Not
Co., Ltd.
260
Konka Group Co., Ltd. Interim Report 2019
Guarantee
Execution
amount
Guarantor: Currency Start date End date accomplis
(RMB’0,000
hed or not
)
Wu Guoren and Xiao Yongsong 3,500.00 USD 2018-10-18 2019-10-17 Not
Wu Guoren and Xiao Yongsong 1,000.00 USD 2019-1-1 2019-12-31 Not
Wu Guoren and Xiao Yongsong 1,000.00 USD 2019-1-1 2019-12-31 Not
Wu Guoren and Xiao Yongsong 1,000.00 USD 2019-1-1 2019-12-31 Not
Wu Guoren and Xiao Yongsong 2,000.00 USD 2018-9-6 2019-9-5 Not
Wu Guoren and Xiao Yongsong 2,000.00 USD 2019-4-22 2019-12-31 Not
Wu Guoren and Xiao Yongsong 1,500.00 USD 2019-6-5 2019-12-31 Not
Wu Guoren and Xiao Yongsong 150.00 USD 2019-6-21 2019-12-31 Not
Wu Guoren and Xiao Yongsong 500.00 USD 2018-8-10 2019-8-9 Not
Wu Guoren and Xiao Yongsong 300.00 USD 2018-9-10 2019-9-9 Not
Wu Guoren and Xiao Yongsong 300.00 USD 2018-9-14 2019-9-13 Not
Wu Guoren and Xiao Yongsong 500.00 USD 2018-10-17 2019-10-16 Not
Wu Guoren and Xiao Yongsong 300.00 USD 2018-10-19 2019-10-18 Not
Wu Guoren and Xiao Yongsong 300.00 USD 2018-11-12 2019-11-11 Not
Wu Guoren and Xiao Yongsong 2,000.00 USD 2019-1-1 2019-12-31 Not
Wu Guoren and Xiao Yongsong 1,000.00 USD 2018-7-10 2019-7-9 Not
Note: The Company was provided with counter guarantee regarding entrusted loans from the
Company to majority-owned subsidiaries by minority shareholders of aforesaid
majority-owned subsidiaries.
(4) Information on Inter-bank Lending of Capital of Related Parties
Related party Amount Start date End date Duration Interest rate
Borrowing:
14 June 2018 to 6
OCT Group 10,000.00 25 June 2018 12 April 2023 5.40%
June 2021
19 July 2018 to 14
OCT Group 2,000.00 25 June 2018 12 April 2023 5.60%
June 2021
261
Konka Group Co., Ltd. Interim Report 2019
Related party Amount Start date End date Duration
Interest rate
14 May 2018 to 13
OCT Group 140,000.00 25 June 2018 12 April 2023 5.00%
May 2019
14 May 2018 to 9
OCT Group 48,000.00 25 June 2018 12 April 2023 6.00%
May 2019
19 July 2018 to 19
OCT Group 100,000.00 25 June 2018 12 April 2023 6.00%
July 2019
14 May 2019 to 9
OCT Group 10,807.56 25 June 2018 12 April 2023 5.00%
May 2020
22 April 2018 to 21
OCT Group 22,192.44 22 April 2019 21 August 2019 5.00%
August 2019
16 April 2019 to 15
OCT Group 27,656.00 16 April 2019 15 April 2020 5.00%
April 2020
26 April 2018 to 31
OCT Group 50,000.00 26 April 2018 31 August 2019 5.00%
August 2019
17 December 2018
17 December 20 12 December 2
OCT Group 3,000.00 to 12 December 7.00%
18 019
2019
Chuzhou Hanshang 20 February 2019
20 February 201 19 February 20
Electric Appliance 4,025.00 to 19 February 7.00%
Co.,Ltd. 9 20
2020
Chuzhou Hanshang 17 Octorber 2018
16 October 201
Electric Appliance 17 October 2018 to 16 Octorber
Co.,Ltd. 9
2019
Lending: 41,600.00 8.00%
Nanjing Kangxing
Technology Industrial 22 October 2018 to
46,700.00 22 October 2018 21 April 2019 8.00%
Park Operation and 21 April 2019
Management Co., Ltd.
262
Konka Group Co., Ltd. Interim Report 2019
Related party Amount Start date End date Duration
Interest rate
Nanjing Kangxing
Technology Industrial 22 October 2018 to
20,500.00 22 October 2018 21 April 2020 8.00%
Park Operation and 21 April 2020
Management Co., Ltd.
Nanjing Kangxing
21 December 2018
Technology Industrial 21 December 20 December
4,000.00 to 20 December 5.70%
Park Operation and 2018 2019
2019
Management Co., Ltd.
Yibin OCT Sanjiang Real 25 October 2018 to
6,000.00 25 October 2018 24 October 2021 5.70%
Estate Co., Ltd. 24 October 2021
Yibin OCT Sanjiang Real 25 October 2018 to
2,000.00 25 October 2018 24 April 2020 11.00%
Estate Co., Ltd. 24 April 2020
Hunan Vary Tech Packing 16 March 2017 to
890.00 16 March 2017 15 March 2019 8.00%
Co., Ltd. 15 March 2019
Chongqing Qingjia 12 April 2018 to 12
10,000.00 12 April 2018 12 April 2020 5.40%
Electronic Co., Ltd. April 2020
Note: The interest expenses of inter-bank borrowing of capital from above related parties are
as follows: RMB117,352,255.65 of OCT Group and RMB2,713,345.84 of Chuzhou
Hanshang Electric Appliance Co.,Ltd. The interest income or investment income of
inter-bank lending of capital from above related parties are as follows: RMB82,611,530.36 of
Nanjing Kangxing Technology Industry Park, RMB928,721.17 of Yibin OCT Sanjiang
Property Co., Ltd., RMB928,721.17 of Hunan Vary Tech Packing Co., Ltd. and
RMB337,714.88 of Chongqing Qingjia Electronic Co., Ltd.
(5) Transfer of Equity
On 21 June 2019, the Company sold 51% stake in Chuzhou Konka Technology & Industry
Development Co., Ltd. at RMB63.5205 million to Shenzhen Overseas Chinese Town Capital
Investment Management Co., Ltd.
(5) Information on Remuneration for Key Management Personnel
Reporting period Same period of last year
Item
(RMB’0,000) (RMB’0,000)
Remuneration for key management personnel 1,075.01 762.33
263
Konka Group Co., Ltd. Interim Report 2019
6. Accounts Receivable and Payable of Related Party
(1) Accounts Receivable
30 June 2019 31 December 2018
Item Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Accounts receivable:
Anhui Kaikai Shijie E-commerce Co.,
289,666,975.63 5,880,239.61 144,976,103.92 2,943,014.91
Ltd.
Guangan Ouqishi Electronic
111,095,609.10 2,255,240.86 77,403,347.03 1,571,287.94
Technology Co., Ltd.
Shenzhen Yaode Technology Co., Ltd. 102,603,146.10 2,082,843.87 38,691,654.09 785,440.58
Shenzhen Konka Information
34,944,423.79 4,607,146.63 35,556,676.56 721,800.53
Network Co., Ltd.
Guizhou Jiaguida Technology Co.,
- - 34,560,012.48 701,568.25
Ltd.
Kunshan Konka Electronic Co., Ltd. 28,249,771.68 2,080,883.27 25,051,883.94 508,553.24
Shenzhen Jielunte Technology Co.,
50,644,597.44 1,574,179.83 13,445,059.89 272,934.72
Ltd. and its subsidiaries
OCT Group and its subsidiaries 2,314,301.24 46,980.32 13,413,924.15 675,135.87
Binzhou Beihai Weiqiao Solid Waste
6,096,891.16 609,689.12 6,096,891.16 304,844.56
Disposal Co., Ltd.
Guoguang Ruilian (Shenzhen) Internet
2,916,126.00 59,197.36 3,696,532.00 75,039.60
Technology Co., Ltd.
Nanjing Smart Light Information
Technology Research Institute Co., 1,500,000.00 30,450.00 1,500,000.00 30,450.00
Ltd.
Helongjiang Longkang Zhijia
178,459.16 3,622.72 822,825.15 16,703.35
Technology Co., Ltd.
Guoguang Eastern Network (Beijing)
- - 430,948.43 8,748.25
Co., Ltd.
Chuzhou Konka Technology &
20,000.00 406.00 - -
Industry Development Co., Ltd.
Henan Konka Smart Electrical
1,147,072.34 23,285.57 - -
Appliance Co., Ltd.
Shandong Konka Smart Electrical
3,603,594.81 73,152.97 - -
Appliance Co., Ltd.
Shenzhen E-display Co., Ltd. and its
60,223,239.55 1,222,531.76 - -
subsidiaries
Shenzhen Trade Link Supply Chain 626,632.22 12,720.63 - -
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30 June 2019 31 December 2018
Item Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Management Co., Ltd.
Chuzhou Hanshang Electric Appliance
7,380,291.65 149,819.92 - -
Co.,Ltd.
Total 703,211,131.87 20,712,390.44 395,645,858.80 8,615,521.80
Notes receivable:
Anhui Kaikai Shijie E-commerce Co.,
180,000,000.00 - 240,100,000.00 -
Ltd.
Heilongjiang Longkang Zhijia
10,264,507.35
Technology Co., Ltd
Total 190,264,507.35 - 240,100,000.00 -
Other receivables:
Stake transfer of Dairongxingand
83,265,018.32 2,489,085.90 81,450,139.05 2,434,977.07
other come-and-go money
Jiangxi Meiji Industry Co., Ltd. 99,798,640.31 2,205,549.95 74,788,640.31 1,652,828.95
OCT Group and its subsidiaries 20,911,273.00 9,459,496.11 21,310,694.38 8,720,919.01
Chongqing Qingjia Electronic Co.,
9,780,111.09 465,340.46 9,433,133.32 210,429.15
Ltd.
Hu Jiawen 246,113.98 12,330.31 240,692.62 5,319.31
Shenzhen Jielunte Technology Co.,
20,831.83 4,810.08 4,448.00 4,448.00
Ltd. and its subsidiaries
Anhui Kaikai Shijie E-commerce Co.,
200,000.00 4,420.00 - -
Ltd.
Chuzhou Konka Technology &
20,500.00 453.05 - -
Industry Development Co., Ltd.
Guangan Ouqishi Electronic
3,440,000.00 76,024.00 - -
Technology Co., Ltd.
Huanjia Group Co., Ltd. 30,000.00 663.00 - -
Total 217,712,488.53 14,718,172.86 187,227,747.68 13,028,921.49
Other receivables:
Shenzhen RF-LINK Technology Co.,
12,585,374.02 - 14,086,876.64 -
Ltd.
Feidi Technology (Shenzhen) Co.,
65,829,221.40 - 43,476,841.21 -
Ltd. and its subsidiaries
Total 78,414,595.42 - 57,563,717.85 -
Prepayments: - -
Shenzhen Jielunte Technology Co., 29,980,819.37 - 29,647,649.73 -
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30 June 2019 31 December 2018
Item Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Ltd. and its subsidiaries
Shenzhen Konka Unifortune
28,623,157.08 - 28,623,157.08 -
Technology Co., Ltd.
Chuzhou Hanshang Electric Appliance
18,495,853.23 - 24,076,497.42 -
Co.,Ltd.
Shenzhen Konka Information
38,034,057.55 - 4,341,793.16 -
Network Co., Ltd.
Changrong Media Co., Ltd. - - 800,000.00 -
Shenzhen Trade Link Supply Chain
32,273,300.87 - 640,726.28 -
Management Co., Ltd.
Chongqing Qingjia Electronic Co.,
552,793.14 - 499,972.16 -
Ltd.
Beijing Konka Technology Co., Ltd. 158,900.00 - - -
Guangan Ouqishi Electronic
14,231,785.93 - - -
Technology Co., Ltd.
Huanjia Group Co., Ltd. 106,400,000.00 - - -
Shenzhen E-display Co., Ltd. and its
31,521,705.00 - - -
subsidiaries
Total 300,272,372.17 - 88,629,795.83 -
(2) Accounts Payable
Item 30 June 2019 31 December 2018
Accounts payable:
Anhui Kaikai Shijie E-commerce Co., Ltd. 39,335,098.55 134,389,975.21
Guizhou Jiaguida Technology Co., Ltd. 2,178,980.37 64,466,384.38
Guangan Ouqishi Electronic Technology Co., Ltd. - 60,730,932.43
Shenzhen Jielunte Technology Co., Ltd. and its subsidiaries 19,118,416.81 40,696,402.04
Kunshan Konka Electronic Co., Ltd. 58,658,005.05 19,799,046.85
Shenzhen Shangyongtong Investment Development Co., Ltd. 9,543,100.00 9,543,100.00
Shenzhen RF-LINK Technology Co., Ltd. 497,131.87 1,447,949.90
OCT Group and its subsidiaries, associated enterprises 11.00 1,289,224.82
Shenzhen Konka Information Network Co., Ltd. - 1,177,928.64
Shenzhen Konka Intelligent Electrical Apparatus Co., Ltd. 444,367.00 501,669.59
Beijing Konka Technology Co., Ltd. - 259,020.69
Shenzhen Henglongtong Technology Co., Ltd. - 122,247.47
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Item 30 June 2019 31 December 2018
Shenzhen Yaode Technology Co., Ltd. 107,763.39 77,602.03
Zhuhai Jinsu Plastic Co., Ltd. 1,316,660.54 55,912.37
Shenzhen Trade Link Supply Chain Management Co., Ltd. - 38,426.68
Guoguang Ruilian (Shenzhen) Internet Technology Co., Ltd. - 9,209.28
Huanjia Group Co., Ltd. 13,735,733.69 -
Shenzhen E-display Co., Ltd. and its subsidiaries 23,022,332.04 -
China Railway No.4 Endineering Group Co., Ltd. 24,930,259.15 -
Total 192,887,859.46 334,605,032.38
Notes payable:
Shenzhen Jielunte Technology Co., Ltd. and its subsidiaries 2,663,931.56 4,290,778.05
Shenzhen Henglongtong Technology Co., Ltd. - 224,422.12
Kunshan Konka Electronic Co., Ltd. 480,971.78 -
Anhui Kaikai Shijie E-commerce Co., Ltd. 140,000,000.00
Huanjia Group Co., Ltd. 17,062,537.45
Shenzhen RF-LINK Technology Co., Ltd. 1,932,419.86
Total 162,139,860.65 4,515,200.17
Advances from customers:
UNIFORTUNE （HK） COMPANY LIMITED 28,256,294.05 -
OCT Group and its subsidiaries 16,357,854.41 18,691,187.73
Chuzhou Hanshang Electric Appliance Co.,Ltd. - 9,053,304.04
Shenzhen Trade Link Supply Chain Management Co., Ltd. - 1,693,620.91
Guoguang Ruilian (Shenzhen) Internet Technology Co., Ltd. 542,490.38 543,231.68
Beijing Konka Technology Co., Ltd. - 87,748.48
Shenzhen E-display Co., Ltd. and its subsidiaries 15,740,618.95 -
Shenzhen Trade Link Supply Chain Management Co., Ltd. 856,854.36 -
Zhonglianda Co., Ltd. 1,749,509.47 -
Nanjing Smart Light Information Technology Research Institute Co., Ltd. 150,000.00 -
AUJET INDUSTRY LIMITED 6,681,828.06 -
Shenzhen Jielunte Technology Co., Ltd. and its subsidiaries 53,775.28 -
Total 70,389,224.96 30,069,092.84
Other payables:
Chuzhou Hanshang Electric Appliance Co.,Ltd. 78,849,048.66 108,380,202.82
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Item 30 June 2019 31 December 2018
Feidi Technology (Shenzhen) Co., Ltd. and its subsidiaries 9,609,969.79 5,638,548.27
Shenzhen RF-LINK Technology Co., Ltd. 6,215,250.00 5,250,000.00
Nanjing Smart Light Information Technology Research Institute Co., Ltd. - 3,004,339.72
Konka Venture Capital Investment (Shenzhen) Co., Ltd. - 2,503,616.44
Shenzhen Konka Information Network Co., Ltd. - 2,474,483.60
Anhui Kaikai Shijie E-commerce Co., Ltd. - 2,135,675.57
Chongqing Qingjia Electronic Co., Ltd. - 1,070,875.91
Shenzhen Jielunte Technology Co., Ltd. and its subsidiaries 900,000.00 400,000.00
OCT Group and its subsidiaries - 272,218.08
Guoguang Ruilian (Shenzhen) Internet Technology Co., Ltd. 100,000.00 100,000.00
Shenzhen Konka Intelligent Electrical Apparatus Co., Ltd. 111,875.00 35,755.00
Kunshan Konka Electronic Co., Ltd. - 10,000.00
Shenzhen Qiaochenghui Network Technology Co., Ltd. - 8,000.00
Changrong Media Co., Ltd. - 7,000.00
Anhui Konka Green Lighting Technology Co., Ltd. 9,183.55 -
Total 95,795,327.00 131,290,715.41
Interest payable:
OCT Group and its subsidiaries, associated enterprises 8,163,418.38 7,429,522.22
Total 8,163,418.38 7,429,522.22
XII. Commitments and Contingency
1. Significant Commitments
(1) Capital Commitment
Item Ending balance Beginning balance
Commitments signed but hasn’t been recognized in
financial statements
—Commitment on construction and purchase of
- -
long-lived assets
- Contract with large amount 1,669,759,371.47 1,127,089,984.26
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- Foreign investment commitments - -
Total 1,669,759,371.47 1,127,089,984.26
(2) Operating Lease Commitments
As of the balance sheet date, the irrevocable operating lease commitments that the Company signed
were as followed:
Item Ending balance Beginning balance
Minimum lease payments of irrevocable operating lease
1 year after balance date 18,148,924.52 21,432,789.82
2 year after balance date 5,432,265.52 10,038,667.42
3 year after balance date 2,683,505.44 3,662,167.92
Following years 2,077,921.20 3,938,998.40
Total 28,342,616.68 39,072,623.56
(3) Other Commitments
As of 30 June 2019, there were no other significant commitments for the Company to
disclose.
2. Contingency
(1) Contingent Liabilities Generated from Pending Action and Arbitration and
Financial Influence thereof
① Due to the problems of quality and construction delay in the settlement of intelligent
engineering project between the Company and Shenzhen GNG Co., Ltd., they didn’t agree
on the related deductions. On September 28, 2017, Shenzhen GNG Co., Ltd. filed a lawsuit
to People’s Court of Nanshan District, Shenzhen for the payment in project arrears in the
Construction Contract of Konka R&D Building Intelligent Engineering, which required the
Company to pay RMB2,770,487.13 for the project arrears and RMB340,761.69 for the
interests of the project arrears. On July 23, 2018, the Company filed the counterclaim to
Shenzhen GNG Co., Ltd. for the payment in project arrears with RMB927,807.10, and the
payment for that the construction was in discrepancy with the contract with RMB927,807.10.
According to the paper of civil judgment (2017) Yue 0305 Minchu No. 18838 of People’s
Court of Nanshan District on April 27, 2019, the Company should pay Shenzhen GNG Co.,
Ltd. for engineering expense with RMB2,691,298.87, and Shenzhen GNG Co., Ltd. was
required to pay the Company for the penalty with RMB649,464.97. The two companies
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refused to accept the above judgment and filed an appeal to the Shenzhen Intermediate
People’s Court. As of the issuance date of this Report, the case has not been held a court
hearing.
②Due to the dispute in rent lease contract among the Company’s
subsidiary-Mudanjiang Appliances, Heilongjiang Jinri Optoelectronics Technology Co., Ltd.
and Jinyue Group Co., Ltd., the People’s Court of Aimin District, Mudanjiang City,
Helongjiang Province made the main civil judgment (2016) Hei 1004 Minchu No. 604 on
August 25, 2017. The judgment was as follows: The defendants Heilongjiang Jinri
Optoelectronics Technology Co., Ltd. and Jinyue Group Co., Ltd. should jointly pay the
plaintiff-Mudanjiang Appliances a total of RMB3,656,910.82 in occupancy fees, rent, and
interest. On Novenber 30, 2018, Mudanjiang Appliances has transferred the credit
assignment to the Company, which was executed by the Company. As of the issuance date of
this Report, it has not yet been implemented completely.
③According to the civil judgment (2018) GMC No.110 made by the Higher People’s
Court of Jiangxi Province on September 27, 2018 on the disputes arisen from a loan contract
between the minority shareholders of Jiangxi Konka, a subsidiary of the Company, and China
Great Wall AMC Jiangxi Branch, the 100% equity of Nanocrystalline, the 100% equity of
Xinfeng Microcrystaline held by Jiangxi Konka and deposit and the collateral under the
name of other relevant guarantees;
On September 30, 2018, Jiangxi Konka filed an application for reconsideration, and on
October 11, 2018, Jiangxi Konka filed an application for supplementary reconsideration.
According to one of the civil judgments (2018) GMC No.110 made by the Higher People’s
Court of Jiangxi Province on November 16, 2018, the frozen account of Jiangxi Konka will
be released.
On July 19, 2019, Jiangxi Konka applied to the Higher People’s Court of Jiangxi
Province for adding AVIC TRUST CO., LTD. and Nanchang Rural Commercial Bank as the
third party to participate in the litigation. As of the issuance date of this Report, the court
hasn’t made the judgement of first trial.
④ The Company held the trade acceptance of Shanghai Huaxin International Group Co.,
Ltd., and the accepter failed to accept the matured notes. In January 2019, the Company, as
the prosecutor, launched a lawsuit to Shenzhen Intermediate People’s Court in respect of the
matured notes of RMB50,000,000.00, claiming that the accepter Shanghai Huaxin and the
remote holder (Tianjin International Trade Petrochemical Co., Ltd., Konka Commercial
Factoring (Shenzhen) Co., Ltd.) should burden the joint liability for settlement of the notes
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and corresponding penal interests. And now the case has been officially accepted and
registered, in which the court is executing the property preservation. As of the issuance date
of this Report, the case has not been held a court hearing, and the aforesaid trade acceptance
has not been honored.
The Company held the trade acceptance of Shanghai Huaxin International Group Co.,
Ltd., and the accepter failed to accept the matured notes. In February 2019, the Company, as
the prosecutor, launched a lawsuit to Shenzhen Intermediate People’s Court in respect of the
matured notes of RMB150,000,000.00, claiming that the accepter Shanghai Huaxin and the
remote holder (Qingdao Baoshui Zhongshe International Trade Co., Ltd., Dafenqi
Commercial Factoring (Shenzhen) Co., Ltd.) should burden the joint liability for settlement
of the notes and corresponding penal interests. And now the case has been officially accepted
and registered, in which the court is executing the property preservation. As of the issuance
date of this Report, the case has not been held a court hearing, and the aforesaid trade
acceptance has not been honored.
The Company held the trade acceptance of Shanghai Huaxin International Group Co.,
Ltd., and the accepter failed to accept the matured notes. In July 2019, the Company, as the
prosecutor, launched a lawsuit to Shenzhen Intermediate People’s Court in respect of the
matured notes of RMB100,027,889.84, claiming that the accepter Shanghai Huaxin and the
remote holder (Yellow River International Trade (Zhengzhou) Co., Ltd., Dafenqi
Commercial Factoring (Shenzhen) Co., Ltd.) should burden the joint liability for settlement
of the notes and corresponding penal interests. And now the case has been officially accepted
and registered, in which the court is executing the property preservation. As of the issuance
date of this Report, the case has not been held a court hearing, and the aforesaid trade
acceptance has not been honored.
⑤The Company held the trade acceptance of China Energy Power Fuel Co., Ltd., and
the accepter failed to accept the matured notes. The Company, as the prosecutor, launched a
lawsuit to Shenzhen Intermediate People’s Court in respect of the matured notes of
RMB50,000,000.00, claiming that the accepter and the remote holder should burden the joint
liability for settlement of the notes and corresponding penal interests. According to No. (2018)
Y03MC3354 Civil Verdict issued by Shenzhen Intermediate People’s Court on November 1,
2018, relevant properties under the name of China Energy (Shanghai) Enterprise Co., Ltd.,
China Energy Power Fuel Co., Ltd., Shanghai Nengping Enterprise Co., Ltd., and Shenzhen
Qianhai Baoying Commercial Factoring Co., Ltd. would be sealed up, detained and frozen
(RMB50,000,000.00 at most). On July 9, 2019, the Company received the judgement of No.
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Konka Group Co., Ltd. Interim Report 2019
(2018)Y03MC3354 Civil Verdict issued by Shenzhen Intermediate People’s Court, in which
the defendant should pay the Company the notes of RMB50,000,000.00 and corresponding
interest. As of the issuance date of this Report, the service by publication is undergoing and
the aforesaid trade acceptance has not been honored.
⑥The Company’s subsidiary Konka Factoring held the trade acceptance of Tahoe
Group Co., Ltd., and the accepter failed to accept the matured notes. In January 2019, Konka
Factoring, as the prosecutor, launched a lawsuit to Shenzhen Intermediate People’s Court in
respect of the matured notes of RMB50,000,000.00, claiming that the accepter and the
remote holder (Fuzhou Taijia Enterprise Co., Ltd., Xiamen Linktron Microelectronics Co.,
Ltd.) should burden the joint liability for settlement of the notes and corresponding penal
interest. And now the case has been officially accepted and registered, in which the court is
executing the property preservation. As of the issuance date of this Report, the case has not
been held a court hearing, and the aforesaid trade acceptance has not been honored.
⑦The Company’s subsidiary XingDa Hongye had a dispute over the commission
contract with Kunshan Mingyu Electronics Co., Ltd. During the lawsuit, Kunshan Mingyu
Electronics Co., Ltd. applied for the property preservation, and RMB2,320,000.00 was
frozen from the bank account of XingDa HongYe. According to No. (2018) S0583MC14368
Civil Verdict issued by Kunshan People’s Court on January 21, 2019 after the first instance,
the respondent XingDa HongYe should pay the commission RMB1,459,941.32 and
corresponding overdue interest within 10 days after the verdict came into effect, but XingDa
HongYe also instituted an appeal to the court in February 2019. As of the issuance date of
this Report, the court has not issued the verdict for the trial of second instance.
⑧The Company’s subsidiary, Konka Commercial Factoring(Shenzhen) Co., Ltd. held
the trade acceptance of Zhongjiao No.1 Aviation Bureau No.1 Engineering Company, and the
accepter failed to accept the matured notes. In May 2019, Konka Commercial
Factoring(Shenzhen) Co., Ltd., as the prosecutor, launched a lawsuit to People’s Court of
Nanshan District, Shenzhen,, claiming that the accepter Zhongjiao No.1 Aviation Bureau
No.1 Engineering Company should pay the notes of RMB36.2 million and corresponding
interest, and the remote holder (Tianjin Xingxi Commercial Trade Co., Ltd., Shenzhen
Gujinhong Trade Co., Ltd., Shanghai Tianwei International Trade Co., Ltd. and Shanghai
Runlin International Trade Co., Ltd.) should burden the joint liability for the debts of
Zhongjiao No.1 Aviation Bureau No.1 Engineering Company. And now the case is under the
first trial, in which has applied for executing the property preservation, and is still awaiting
trial.
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Konka Group Co., Ltd. Interim Report 2019
⑨The Company’s subsidiary, Konka Commercial Factoring(Shenzhen) Co., Ltd. held
the trade acceptance of Zhongjiao No.1 Aviation Bureau No.1 Engineering Company, and the
accepter failed to accept the matured notes. In June 2019, Konka Commercial
Factoring(Shenzhen) Co., Ltd., as the prosecutor, launched a lawsuit to the First People’s
Court of Dongguan,, claiming that the accepter Zhongjiao No.1 Aviation Bureau No.1
Engineering Company should pay the notes of RMB10 million and corresponding interest,
and the remote holder (Tianjin Xingxi Commercial Trade Co., Ltd., Shenzhen Gujinhong
Trade Co., Ltd., Shanghai Tianwei International Trade Co., Ltd. and Shanghai Runlin
International Trade Co., Ltd.) should burden the joint liability for the debts of Zhongjiao
No.1 Aviation Bureau No.1 Engineering Company. And now the case is under the first trial,
in which has applied for executing the property preservation, and is still awaiting trial.
⑩The Company held the trade acceptance of China Nuclear Engineering Construction
Group Co., Ltd., and the accepter failed to accept the matured notes. In March 2019, the
Company, as the prosecutor, launched a lawsuit to Shenzhen Intermediate People’s Court in
respect of the matured notes of RMB80,000,000.00,, claiming that the remote holder Hefei
Huajun Commercial Trade Co., Ltd., Wuhan Jialian Agricultural Technology Development
Co., Ltd. should pay the notes of RMB80,000,000.00 and corresponding interest. And now
the case has been officially accepted and registered, in which the court is executing the
property preservation, and is awaiting trial.
H-BUSTER SAO PAULO INDUSTRIAE COMERCIO S.A (hereinafter referred to
as “H-BUSTER”) (Brazil), a customer of the Company’s subsidiary Hong Kong Konka
Limited, became insolvent and obtained in May 2013 the approval from the Third Civil
Court of Cotia City of the Court of the State of Sao Paulo, Brazil for its judicial
reorganization application. As a creditor of H-BUSTER, Hong Kong Konka submitted its
creditor’s rights declaration paper, and the amount owed by H-BUSTER to Hong Kong
Konka was recognized in August 2014 at approximately US$2.78 million. However, the
aforesaid reorganization plan of H-BUSTER was vetoed at a creditors’ meeting. Currently,
the bankruptcy and reorganization case of H-BUSTER is still pending.
In October 2015, Via Licensing Corporation and the Company’s subsidiary Hong
Kong Konka Limited (hereinafter referred to as “Hong Kong Konka Limited”) entered into
the Advanced Audio Coding (AAC) Patent Licensing Agreement, in which Via Licensing
Corporation allows Hong Kong Konka and its related enterprises to use the patented AAC
technology in the production and sale of their products and the licensing fee shall be based
on the sales volumes of the products using the patented technology. In April 2018, Via
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Konka Group Co., Ltd. Interim Report 2019
Licensing Corporation initiated an arbitration at the Hong Kong International Arbitration
Centre against Hong Kong Konka and the Company for not paying the licensing fee in full,
claiming that Hong Kong Konka and the Company shall pay a licensing fee of approximately
US$18.69 million. Later, Via Licensing Corporation applied to increase the amount to
US$40.3875 million. Up to the issue date of this Report, this case is still awaiting trial.
In March 2018, Wumart Stores, Inc. filed a lawsuit to the Court of Shijingshan
District, Beijing against the Beijing branch of the Company over a purchase and sales
contract, asking for the return of a prepayment of RMB10.7367 million. Currently, this case
is in the first trial with no decision reached yet.
The Company held the trade acceptance of HISAP High-technology Co. Ltd. and the
accepter failed to accept the matured notes. In July 2019, the Company, as the prosecutor,
launched a lawsuit to Shenzhen Intermediate People’s Court in respect of the matured notes
of RMB200,000,000.00,, claiming that the remote holder Nanjing Jiongjiong Electronic
Technology Co., Ltd., Shenzhen Qianhai Benniu Agricultural Technology Co., Ltd. should
pay the notes of RMB200,000,000.00 and corresponding interest. And now the case is under
the first instance and is awaiting trial.
(2) Contingent Liabilities Generated from Providing Debt Guarantees for Other
Entities and Financial Influence thereof
The Company signed the maximum amount guarantee contract (No.
18czA0012-a-XCYZGBZD2018) with Chuzhou Branch of China Citic Bank on November 7,
2018, in which the Company provided the maximum credit guarantee of RMB58 million to
Anhui Konka Tongchuang International Trade Co., Ltd. within three years from the day when
the obligation fulfillment period stipulated in the specific business contract expired, and the
guarantee mode was the joint liability guaranty. The credit line is mainly used to open and
accept the letter of credit of Anhui Tongchuang International Trade Co., Ltd. and obtain the
financing credit and other daily businesses from the bank. The guarantee amount has been
used RMB 13,980,000.00 by 30 June 2019.
The Company signed the guarantee contract of maximum amount (No. CZZHZGBZ 2018
No.0103) with Chengzhong Branch of Chuzhou Eastern Anhui Rural Commercial Bank on
May 9, 2018, in which the Company provided credit guarantee of RMB45,000,000.00 to
Anhui Tongchuan. The guarantee period is two years from the expiration of the debt
performance period agreed in the relevant credit line agreements, and the guarantee mode
was the joint liability guaranty. The credit line is mainly used to open and accept the letter of
credit of Anhui Tongchuang International Trade Co., Ltd. and obtain the financing credit and
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Konka Group Co., Ltd. Interim Report 2019
other daily businesses from the bank. The guarantee amount has been used
RMB35,735,300.00 by June 30, 2019.
The Company signed the maximum amount guarantee contract (No.
CZGSBOZGBT20180011) with Chuzhou Branch of China Everbright Bank on June 19,
2018, in which the Company provided the maximum credit guarantee of RMB30 million to
Anhui Konka Tongchuang International Trade Co., Ltd. The guarantee period is two years
from the expiration of the debt performance period agreed in the relevant credit line
agreements, and the guarantee mode was the joint liability guaranty. The credit line is mainly
used to open and accept the letter of credit of Anhui Tongchuang International Trade Co., Ltd.
and obtain the financing credit and other daily businesses from the bank. The guarantee
amount has been used RMB28,690,000.00 by June 30, 2019.
The Company signed the maximum amount guarantee contract (No. 00035 ZSYGBZD2018)
(361006) with Hefei Branch of China Zheshang Bank on September 20, 2018, in which the
Company provided the maximum credit guarantee of RMB55 million to Anhui Konka
Tongchuang International Trade Co., Ltd. within two years from the day when the debtor’s
obligation fulfillment period stipulated in the debt contract signed between Anhui
Tongchuang and Hefei Branch of China Zheshang Bank expired, and the guarantee mode
was the joint liability guaranty. The credit line is mainly used to open and accept the letter of
credit of Anhui Tongchuang International Trade Co., Ltd. and obtain the financing credit and
other daily businesses from the bank. The guarantee amount has been used
RMB50,000,000.00 by June 30, 2019.
The Company signed the guarantee contract of maximum amount (No. Jingtian18006) with
Shenzhen Branch of China Minsheng Bank Co., Ltd. on January 10, 2019, in which the
Company provided the maximum credit guarantee of RMB30 million to Anhui Konka
Tongchuang International Trade Co., Ltd. within two years from the day when the debtor’s
obligation fulfillment period stipulated in the debt contract signed between Anhui
Tongchuang and Shenzhen Branch of China Minsheng Bank expired, and the guarantee
mode was the joint liability guaranty. The credit line is mainly used to open and accept the
letter of credit of Anhui Tongchuang International Trade Co., Ltd. and obtain the financing
credit and other daily businesses from the bank. The guarantee amount has been used
RMB10,575,000.00 by June 30, 2019.
The Company signed the maximum amount guarantee contract (No. 180302) (240A1) with
Chuzhou Branch of Industrial Bank on January 11, 2019, in which the Company provided the
maximum credit guarantee of RMB100 million to Anhui Konka Tongchuang International
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Konka Group Co., Ltd. Interim Report 2019
Trade Co., Ltd. within two years from the day when the debtor’s obligation fulfillment period
stipulated in the debt contract signed between Anhui Tongchuang and Chuzhou Branch of
Industrial Bank expired, and the guarantee mode was the joint liability guaranty. The credit
line is mainly used to open and accept the letter of credit of Anhui Tongchuang International
Trade Co., Ltd. and obtain the financing credit and other daily businesses from the bank. The
guarantee amount has been used RMB39,010,000.00 by June 30, 2019.
The Company signed the guarantee contract of maximum amount (No.
340101001120190300005) with Huangshan Road Branch of Hefei Science & Technology
Rural Commercial Bank on January 23, 2019, in which the Company provided the maximum
credit guarantee of RMB50,000,000.00 to Anhui Konka Tongchuang International Trade Co.,
Ltd. within two years from the day when the debtor’s obligation fulfillment period stipulated
in the debt contract signed between Anhui Tongchuang and Huangshan Road Branch of Hefei
Science & Technology Rural Commercial Bank expired, and the guarantee mode was the
joint liability guaranty. The credit line is mainly used to open and accept the letter of credit of
Anhui Tongchuang International Trade Co., Ltd. and obtain the financing credit and other
daily businesses from the bank. The guarantee amount has been used RMB20,185,000.00 by
June 30, 2019.
The Company signed the guarantee contract of maximum amount (No. LPLZHGBZ 2019 No.
24105029) with Chuzhou Longpanlu Branch of Huishang Bank Co., Ltd. on 24 June 2019, in
which the Company provided credit guarantee of RMB30,000,000.00 to Anhui Tongchuang.
The guarantee period is two years from the expiration of the debt performance period agreed
in the relevant credit line agreements, and the guarantee mode was the joint liability guaranty.
The guarantee amount has been used RMB 0 by June 30, 2019.
The Company signed Comprehensive Credit Line Contract (No. HXSFZLZZD20180921001)
and applied to Shenzhen Branch of Guangdong Huaxing Bank for comprehensive credit line
of RMB1,000,000,000.00. The guarantee period is from September 29, 2018 to August 29,
2019. The Company has sub-licensed the comprehensive credit line RMB200,000,000.00 the
subsidiary Konka Factoring (Shenzhen), and will assume the joint liability for guarantee. As
of June 30, 2019, Konka Factoring used RMB 0.
On March 13, 2019, the Company applied to Shenzhen Branch of China Minsheng Bank Co.,
Ltd. for a letter of guarantee of USD23,000,000.00, helping the subsidiary Hong Kong
Konka Co., Ltd. to obtain the financing loan from the bank. The guarantee period is from
March 13, 2019 to March 13, 2020. As of June 30, 2019, Hong Kong Konka obtained a loan
of USD23,000,000 from Bank of China (Hong Kong) Co., Ltd.
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Konka Group Co., Ltd. Interim Report 2019
On July 11, 2018, the Company applied to Shenzhen Branch of HSBC Bank (China) Co., Ltd.
for a letter of guarantee of USD15,000,000.00, helping the subsidiary Hong Kong Konka Co.,
Ltd. to obtain the financing loan from the bank. The guarantee period is from August 7, 2018
to August 6, 2019. As of December 31, 2018, Hong Kong Konka obtained a loan of USD
15,000,000 from HSBC Limited.
The Company signed the maximum amount guarantee contract (No.
GGBZDDB1800000101834) with Ma’anshan Branch of China Minsheng Bank, providing
the joint and several liability guarantee for the debts under the comprehensive credit line
agreement signed by Anhui Konka and Ma’anshan Branch of China Minsheng Bank. The
guarantee amount is RMB100,000,000.00, and the guarantee period is two years from the
expiration of the debt settlement period under the main contract. As of June 30, 2019, the
balance of the guarantee amount provided by the Company to Anhui Konka is
RMB100,000,000.00. Anhui Konka’ another shareholder, Chuzhou State-owned Assets
Operation Co., Ltd. provided the counter-guarantee to the Company for 22% of the guarantee
amount.
On May 28, 2018, the Company’s subsidiary Telecommunication Technology signed the
guarantee contract (No.(23301)YSHBZ(180525)00001) with Lingang Branch of Yibin
Commercial Bank, providing the joint and several liability guarantee for the debts under the
entrusted loan contract jointly signed by its subsidiary Konka Intelligent Terminal, Gloport
Group and Lingang Branch of Yibin Commercial Bank. The guarantee amount is
RMB140,000,000.00, and the guarantee period is from May 28, 2018 to May 24, 2025. The
guaranteed credit line is mainly used for obtaining the loan from the bank for the production
and operation of Konka Intelligent Terminal. As of June 30, 2019, the guarantee amount
RMB50,000,000.00 was used. Konka Intelligent Terminal’ another shareholder, Shenzhen
Kangwei Investment Partnership (Limited Partnership) provided the counter-guarantee to
Telecommunication Technology for 49% of the guarantee amount.
The Company signed the guarantee contract of maximum amount (No. YBXGZGB 2019
No.002) with Yibin Rural Commercial Bank Co., Ltd. on 18 March 2019, in which the
Company provided credit guarantee of RMB40,000,000.00 to Sichuan Konka. The guarantee
period is two years from the expiration of the debt settlement period under the Liquidity
Revolving Loan Contract, and the guarantee mode was the joint liability guaranty. As of June
30, 2019, the guarantee amount RMB40,000,000.00 was used. Sichuan Konka’ another
shareholder, Shenzhen Kangwei Investment Partnership (Limited Partnership) provided the
counter-guarantee to Telecommunication Technology for 49% of the guarantee amount.
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Konka Group Co., Ltd. Interim Report 2019
On November 21, 2018, the Company signed the guarantee contract
(No.1510201811120052BZ-1) with Zhuhai Branch of Xiamen International Bank, providing
the joint and several liability guarantee for the debts under the comprehensive credit line
contract signed by the subsidiary Xingye Hongda and Zhuhai Branch of Xiamen
International Bank. The guarantee amount is RMB58,000,000.00, and the guarantee period is
two years from the expiration of the debt settlement period stipulated in the contract. As of
June 30, 2019, Xingye Hongda used the guarantee amount RMB58,000,000.00. Xingye
Hongda’ another shareholder, Hu Zehong provided the counter-guarantee to the Company for
49% of the guarantee amount.
On October 16, 2018, the Company’s subsidiary Electronics Technology signed the guarantee
contract (No.IFELC18D29PS7Y-U-03) with Far Eastern Leasing, providing the guarantee for
the fulfillment of rent payment and other obligations under the after-sales lease back contract
signed by the subsidiary Xingye Hongda and Far Eastern Leasing. The guarantee amount is
RMB10,000,000.00, and the guarantee period is from November 13, 2018 to November 13,
2020. As of June 30, 2019, the guarantee amount RMB9,500,000.00 was used. Xingye
Hongda’ another shareholder, Hu Zehong provided the counter-guarantee to the Company for
49% of the guarantee amount.
The Company signed the guarantee contract of maximum amount (No. BZFEB[2019]
010-002) with China Bohai Bank Co., Ltd. on April 19, 2019, in which the Company
provided the maximum credit guarantee of RMB38,975,202.80 to XingDa HongYe within
two years from the day when the debtor’s obligation fulfillment period stipulated in the debt
contract, and the guarantee mode was the joint liability guaranty. The credit line is mainly
used to support the production and operation circulation. As of June 30, 2019, XingDa
HongYe used the guarantee amount RMB38,975,202.8. XingDa HongYe’ another
shareholder, Hu Zehong provided the counter-guarantee to the Company for 49% of the
guarantee amount.
The Company signed the guarantee contract of maximum amount (No. XYYSBZ
[Zhongshan]201905158001) with Zhongshan Branch of Industrial Bank Co., Ltd. on May 20,
2019, in which the Company provided the maximum credit guarantee of RMB10,000,000.00
to XingDa HongYe within two years from the day when the debtor’s obligation fulfillment
period stipulated in the Comprehensive Credit Line Agreement, and the guarantee mode was
the joint liability guaranty. As of June 30, 2019, XingDa HongYe used the guarantee amount
RMB10,000,000.00. XingDa HongYe’ another shareholder, Hu Zehong provided the
counter-guarantee to the Company for 49% of the guarantee amount.
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Konka Group Co., Ltd. Interim Report 2019
On August 29, 2018, the Company signed Issuing Guarantee/SLC Agreement with Shenzhen
Branch of Bank of China for issuing the letter of guarantee to CTCE Group and providing
the pledge guarantee for the capital contribution obligation of Econ Technology in the central
urban upgrading project of Weifang Binhai Economic and Technological Development Zone.
The guarantee amount is RMB31,350,000.00. Other shareholders of Econ Technology
including Yantai Baijiangyuan Enterprise Management Center (Limited Partnership), Yantai
Fengqingtai Investment Center (Limited Partnership), Yantai Qingrunyuan Enterprise
Management Center (Limited Partnership) and Yantai Qingjiangchuan Enterprise
Management Center (Limited Partnership) respectively provided the counter-guarantee to the
Company for 26.04%, 11.58%, 10.64% and 0.74% of the maximum debt amount.
On April 23, 2019, The Company signed the guarantee contract of maximum amount (No.
YKB 2019-032) with Yantai Branch of China Everbright Bank, in which the Company
provided the maximum credit guarantee of RMB20,000,000.00 to Econ Technology within
two years from the day when the debtor’s obligation fulfillment period stipulated in the
Comprehensive Credit Line Agreement, and the guarantee mode was the joint liability
guaranty. As of June 30, 2019, Econ Technology used the guarantee amount
RMB10,000,000.00. Other shareholders of Econ Technology including Yantai Baijiangyuan
Enterprise Management Center (Limited Partnership), Yantai Fengqingtai Investment Center
(Limited Partnership), Yantai Qingrunyuan Enterprise Management Center (Limited
Partnership) and Yantai Qingjiangchuan Enterprise Management Center (Limited Partnership)
respectively provided the counter-guarantee to the Company for 26.04%, 11.58%, 10.64%
and 0.74% of the maximum debt amount.
On May 13, 2019, the Company signed the maximum amount guarantee contract (No. 2019
220011FSZGBZ 2005) with Yantai Branch of Qilu Bank, in which the Company provided
the maximum credit guarantee of RMB50,000,000.00 to Econ Technology within two years
from the day when the debtor’s obligation fulfillment period stipulated in the Qilu Bank’s
Comprehensive Credit Line Contract, and the guarantee mode was the joint liability guaranty.
As of June 30, 2019, Econ Technology used the guarantee amount RMB50,000,000.00. Other
shareholders of Econ Technology including Yantai Baijiangyuan Enterprise Management
Center (Limited Partnership), Yantai Fengqingtai Investment Center (Limited Partnership),
Yantai Qingrunyuan Enterprise Management Center (Limited Partnership) and Yantai
Qingjiangchuan Enterprise Management Center (Limited Partnership) respectively provided
the counter-guarantee to the Company for 26.04%, 11.58%, 10.64% and 0.74% of the
maximum debt amount.
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Konka Group Co., Ltd. Interim Report 2019
On December 4, 2018, the Company signed the maximum amount guarantee contract (No.
XYGXGBZ 20180208) with Nanchang Branch of Industrial Bank, in which the Company
provided the maximum credit guarantee of RMB100,000,000.00 to Jiangxi Konka within two
years from the day when the debtor’s obligation fulfillment period stipulated in the main
credit line contract, and the guarantee mode was the joint liability guaranty. As of June 30,
2019, Jiangxi Konka used the guarantee amount RMB100,000,000.00. Jiangxi Konka’
another shareholder, Zhu Xinming provided the counter-guarantee to the Company for 49%
of the guarantee amount.
On January 17, 2019, the Company signed the maximum amount guarantee contract (No.
0516204_001) with Nanchang Honggutan District Branch of Bank of Beijing, in which the
Company provided the maximum credit guarantee of RMB100,000,000.00 to Jiangxi Konka
within two years from the day when the debtor’s obligation fulfillment period stipulated in
the main credit line contract, and the guarantee mode was the joint liability guaranty. As of
June 30, 2019, Jiangxi Konka used the guarantee amount RMB100,000,000.00. Jiangxi
Konka’ another shareholder, Zhu Xinming provided the counter-guarantee to the Company
for 49% of the guarantee amount.
On March 13, 2019, the Company signed the guarantee contract (No. GCL19C0057) with
Haitong UniTrust International Leasing Co., Ltd., in which the Company provided the joint
liability guarantee for the debts under the Financing Leasing-back Contract and all related
attachments signed between Haitong UniTrust and the Company’s subsidiary Jiangxi Konka,
and the guaranteed amount was RMB119,605,820.00 within two years from the day when the
debtor’s obligation fulfillment period stipulated in the main credit line contract. As of June
30, 2019, the guarantee amount RMB109,000,000.00 was used. Jiangxi Konka’ another
shareholder, Zhu Xinming provided the counter-guarantee to the Company for 49% of the
guarantee amount.
On February 28, 2019, the Company signed the maximum amount guarantee contract (No.
(2019)XHYZBZ 010013) with Nanchang Branch of China CITIC Bank, in which the
Company provided the maximum credit guarantee of RMB100,000,000.00 to the subsidiary
Jiangxi Konka New Material Technology Co., Ltd. within three years from the day when the
debtor’s obligation fulfillment period stipulated in the main credit line contract, and the
guarantee mode was the joint liability guaranty. As of June 30, 2019, Jiangxi Konka used the
guarantee amount RMB100,000,000.00. Jiangxi Konka’ another shareholder, Zhu Xinming
provided the counter-guarantee to the Company for 49% of the guarantee amount.
On June 27, 2019, the Company signed the maximum amount guarantee contract (No.
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Konka Group Co., Ltd. Interim Report 2019
36100520190009207) with Yongxiu County Branch of Agricultural Bank of China, in which
the Company provided the maximum credit guarantee of RMB60,000,000.00 to the
subsidiary Jiangxi Konka New Material Technology Co., Ltd. within two years from the day
when the debtor’s obligation fulfillment period stipulated in the main credit line contract, and
the guarantee mode was the joint liability guaranty. As of June 30, 2019, the guarantee
amount RMB25,000,000.00 was used. Jiangxi Konka’ another shareholder, Zhu Xinming
provided the counter-guarantee to the Company for 49% of the guarantee amount.
On June 19, 2019, the Company signed the maximum amount guarantee contract (No.
36100520190008787) with Anyi County Branch of Agricultural Bank of China, in which the
Company provided the maximum credit guarantee of RMB72,000,000.00 to the subsidiary
Jiangxi Konka’s subsidiary Xinfeng Microcrystalline within two years from the day when the
debtor’s obligation fulfillment period stipulated in the Xinfeng Microcrystalline’s credit line
contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, the
guarantee amount RMB35,500,000.00 was used. Jiangxi Konka’ another shareholder, Zhu
Xinming provided the counter-guarantee to the Company for 49% of the guarantee amount.
On June 26, 2019, the Company signed the maximum amount guarantee contract (No.
GZ2019 BZ 025/031) with Guangxi Finance Lease Co., Ltd., in which the Company
provided the joint liability guarantee for paying rents and other payments under the Finance
Lease Contract signed between Jiangxi Konka’s subsidiary Nano Crystallized Glass and
Guangxi Finance Lease Co., Ltd., and the guaranteed amount was RMB100,000,000.00
(from June 26, 2019 to June 25, 2022) within two years from the day when the last rent
payment obligation was fulfilled as stipulated in the main credit line contract. As of June 30,
2019, the guarantee amount RMB0.00 was used. Jiangxi Konka’ another shareholder, Zhu
Xinming provided the counter-guarantee to the Company for 49% of the guarantee amount.
On February 2, 2019, the Company signed the guarantee contract (No. GDBZ KJ005) with
Ma’anshan Branch of China Minsheng Bank, in which the Company provided the joint
liability guarantee for the debts under the M&A Loan Contract signed between the
Company’s subsidiary Electrical Appliance Technology and Ma’anshan Branch of China
Minsheng Bank, and the guaranteed amount was RMB130,000,000.00 within two years from
the day when the debtor’s obligation fulfillment period stipulated in the M&A Loan Contract,
and the fulfillment period of the debt under the main contract was 5 years. As of June 30,
2019, the guarantee amount RMB130,000,000.00 was used. Electrical Appliance
Technology’ another shareholder, Chuzhou Hanshang Electrical Appliance Co., Ltd. provided
the counter-guarantee to the Company for 49% of the guarantee amount.
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Konka Group Co., Ltd. Interim Report 2019
On February 20, 2019, the Company signed the maximum amount guarantee contract (No.
GYHBZ [2019]0001) with Huizhou Branch of Bank of Guangzhou, in which the Company
provided the maximum credit guarantee of RMB40,000,000.00 to the subsidiary Boluo
Konka Precision from February 20, 2019 to February 20, 2021, and the guarantee mode was
the joint liability guaranty. As of June 30, 2019, the guarantee amount RMB17,791,100.00
was used.
The Company signed the credit line agreement (No. 2019ZZYFEXZ 1000056) with
Shenzhen Futian Branch of Bank of China to apply the comprehensive credit line of
RMB4,000,000,000.00 from April 18, 2019 to April 18, 2020. The Company transferred the
credit line of RMB580,000,000.00 to its subsidiary Electronics Technology and would
burden the joint liability for such transferred credit line. As of June 30, 2019, Electronics
Technology used the credit line of RMB 39,347,378.19.
The Company signed the maximum amount guarantee contract (No.
5970120190527732001-01) with Guangdong Pilot Free Trade Zone Nansha Branch of Bank
of Jiujiang, in which the Company provided the maximum credit guarantee of
RMB50,000,000.00 to the Company’s subsidiary KonkaPengrun within two years from the
day when the debtor’s obligation fulfillment period stipulated in the comprehensive credit
line contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019,
the guarantee amount RMB0.00 was used. Konka Pengrun’ another shareholder, Guizhou
Huajinrun Technology Group provided the counter-guarantee to the Company for 49% of the
guarantee amount.
On December 27, 2016, the Company’s subsidiary Econ Technology signed the guarantee
contract (No. YKB 2016-167) with Yantai Branch of China Everbright Bank, in which the
Company provided the guarantee for Rushan Yike, and the guaranteed amount was RMB 290
million from December 29, 2016 to December 28, 2026. As of June 30, 2019, the credit line
RMB147,400,000.00 was used.
On June 20, 2019, the Company signed the maximum amount guarantee contract (No. 2019
SYQHZBZ 0005) with Shenzhen Branch of China CITIC Bank, in which the Company
provided the maximum credit guarantee of RMB50,000,000.00 to the subsidiary Electronics
Technology within three years from the day when the debtor’s obligation fulfillment period
stipulated in the Financing Contract, and the guarantee mode was the joint liability guaranty.
As of June 30, 2019, the guarantee amount RMB3,163,912.76 was used.
On December 19, 2016, the Company’s subsidiary Jiangxi Konka signed the entrusted loan
guarantee contract (No.NNYWBZDB10611201612190004 2016) with the Sales Department
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Konka Group Co., Ltd. Interim Report 2019
of Nanchang Rural Commercial Bank to provide the guarantee for the debt of guarantee
contract (No.NNYWBZDB106112016121920020004 2016) signed by Jiangxi Xinxin
Jian’an Engineering Co., Ltd. and the Sales Department of Nanchang Rural Commercial
Bank. The amount of the Financing Contract is RMB100,000,000.00. The guarantee period is
two years from the expiration of the debt settlement period stipulated in the Financing
Contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, the
guarantee amount was used RMB100,000,000.00.
On December 19, 2016, the Company’s subsidiary Jiangxi Konka signed the entrusted loan
guarantee contract (No.NNYWBZDB106112016121900033 2016) with the Sales
Department of Nanchang Rural Commercial Bank to provide the guarantee for the debt of
guarantee contract (No.NNYWBZDB106112016121620020002 2016) signed by Jiangxi
Zhongyi Decorative Material Co., Ltd. and the Sales Department of Nanchang Rural
Commercial Bank. The amount of the Financing Contract is RMB100,000,000.00. The
guarantee period is two years from the expiration of the debt settlement period stipulated in
the Financing Contract, and the guarantee mode was the joint liability guaranty. As of June
30, 2019, the guarantee amount was used RMB100,000,000.00.
On December 16, 2016, the Company’s subsidiary Jiangxi Konka signed the entrusted loan
guarantee contract (No.NNYWBZDB10611201612160002 2016) with the Sales Department
of Nanchang Rural Commercial Bank to provide the guarantee for the debt of guarantee
contract (No.NNYWBZDB106112016121920020003 2016) signed by Jiangxi Shanshi
Science and Technology Co., Ltd. and the Sales Department of Nanchang Rural Commercial
Bank. The amount of the Financing Contract is RMB100,000,000.00. The guarantee period is
two years from the expiration of the debt settlement period stipulated in the Financing
Contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, the
guarantee amount was used RMB100,000,000.00.
XIII. Events after Balance Sheet Date
1. Significant Non-adjusted Events
Influence number to the
Reason of inability to
Item Content financial position and
estimate influence number
operating results
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Konka Group Co., Ltd. Interim Report 2019
Complete the private placement of
Issuance of stocks and corporate bonds of RMB1.5 billion on 23 Increase in bonds payable of
N/A
bonds July 2019 RMB1.5 billion
XVI. Other Significant Events
1. The Company signed Guarantee Contract with Chuzhou Branch of Bank of China Co., Ltd.
According to the contract, the Company provides the joint liability guarantee for the
creditor’s rights arising under the credit contract signed by Chuzhou Branch of Bank of
China Co., Ltd. and and the Company’s holding subsidiary Anhui Konka. The guarantee
amount is RMB268 million, and the guarantee period is two years from the expiration of the
debt performance period agreed in the main contract.
2. On July 18, 2019, the Company signed Issuing Guarantee Agreement with Ningbo Bank
Co., Ltd. to provide the guarantee for Hong Kong Konka to apply for the financing loan from
Ping An Bank Co., Ltd. by overseas loan under domestic guarantee, providing the joint
liability guaranty, and the amount guaranteed is USD13.5 million with one-year guarantee
period.
3. On July 5, 2019, the Company submitted the Irrevocable Documentary Credit Application
for Issuance/ Amendation/Cancellation to Shenzhen Branch of HSBC Bank (China) Co., Ltd.,
and applied to postpone the letter of guarantee of USD15,000,000.00 on July 11, 2018 for
one year, namely the Company continued to provide the guarantee for applying for the
financing loan of Hong Kong Konka to HSBC Bank (China) Co., Ltd. by overseas loan
under domestic guarantee. The guarantee amount is USD15,000,000.00.
4. The Company and the Chengzhong sub-branch of Chuzhou Wandong Rural Commercial
Bank Co., Ltd. entered into a Guarantee Contract. According to the contract, the Company
would provide joint-liability guarantee for loans granted to the Company’s majority-owned
subsidiary Anhui Konka Tongchuang Electrical Appliances Co., Ltd. under the
comprehensive credit line contract entered into between the subsidiary and the financial
institution. The guarantee amount would be RMB45 million with a term of three years
starting from the expiry of the loan repayment period as stated in the comprehensive credit
line contract.
5. Loan by mandate:
(1) The Company, together with Shenzhen Overseas Chinese Town Co., Ltd. and China
CITIC Bank Co., Ltd. Shenzhen Branch, has concluded the Sub-agreement for Electronic
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Konka Group Co., Ltd. Interim Report 2019
Loan by Mandate on Cash Management by CITIC Bank, numbered 811038022341. The
amount of loan by mandate under the Agreement is RMB2,000,000,000.00, with a term from
the date of entry into force of the Agreement to April 12, 2023. The annual interest rate of the
loan is 4% to 10%, subject to the confirmation of the borrower and the principal in the
electronic loan by mandate on cash management. Subsequently, the three parties signed a
Supplementary Agreement to the Sub-agreement for Electronic Loan by Mandate on Cash
Management by CITIC Bank, numbered 811038022341-1, in which the amount of loan by
mandate was changed to RMB3,000,000,000.00. As of June 30, 2019, Shenzhen Overseas
Chinese Town Co., Ltd. actually provided the Company with a loan balance by mandate of
RMB3,000,000,000.00 through Shenzhen Branch of China CITIC Bank.
(2) On September 14, 2017, the Company and OCT Group Co., Ltd. and Shenzhen OCT
Branch of China Construction Bank jointly signed Entrusted Loan Contract (No. JSWD
2017141). The total entrusted loan amount is RMB5,000,000,000.00, and the loan term is
from September 14, 2017 to December 31, 2018. The three parties signed the entrusted loan
extension contract on December 14, 2018 and December 19, 2018, and the total amount
subject to such extension is RMB1,276,560,000.00. Later the three parties signed the
entrusted loan extension contract on April 18, 2019, and the total amount subject to such
extension is RMB278,075,600.00. As of June 30, 2019, the balance of the entrusted loan
provided by OCT Group Co., Ltd. to the Company via OCT Branch of China Construction
Bank was RMB884,635,570.00.
(3) The OCT Group Co., Ltd. issued the entrusted loan to the Company with the amount of
RMB221,924,430.00, and the loan term is from April 16, 2019 to April 15, 2020.
6. Credit Granting:
(1) The Company, Shenzhen Futian Branch of Bank of China and Shenzhen Konka
Electronics Technology Co., Ltd. jointly signed the credit line agreement (No.
ZZYFEXZD1000056 2019), applying for a credit line of RMB4,000,000,000.00 for issuing
the acceptance bills, the non-financing guarantee and the trade financing. The Company
provided RMB 1 billion bank acceptance bills for pledge, and agreed to provide the amount
of RMB580,000,000.00 in the comprehensive credit line to the subsidiary Electronics
Technology for use. The Company would be jointly and severally liable for the
comprehensive credit. The credit line shall be valid from the date of the above credit line
agreement to April 18, 2020. As of June 30, 2019, a total of RMB1,777,958,859.04 was used
from the above credit line, and the remaining credit line is RMB2,222,041,140.96.
(2) The Company signed the credit line extension contract with Shenzhen OCT Branch of
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Konka Group Co., Ltd. Interim Report 2019
Industrial and Commercial Bank of China to apply for the maximum credit line of RMB1.9
billion and extend the credit line period to September 30, 2019. As of June 30, 2019, a total
of RMB1692.3334 million was used from the above credit line, and the remaining credit line
is RMB207.6666 million.
(3) The comprehensive credit line contract (No. PYSZZZDA596201711270001) signed on
January 2, 2018 with Shenzhen Branch of Ping An Bank was expired on January 1, 2019. As
of June 30, 2019, the Company has not extended the contract with Shenzhen Branch of Ping
An Bank.
(4) The Company and Shenzhen Branch of China Minsheng Bank signed the comprehensive
credit line contract (No. GSXZDJT18006), applying for the maximum credit line of
RMB500,000,000.00 for the loan business based on RMB, bill of exchange acceptance, bill
of exchange discount, guarantee; foreign currency loans, guarantees, letters of credit,
financing guarantees, and buyer factoring guarantees in relation to the trade financing
business. Konka Group Co., Ltd. agreed that its subsidiary, Anhui Konka Tongchuang could
use the credit line under the comprehensive credit contract and provided the maximum
guarantee for the amount used. It’s also agreed that the Company could use
RMB350,000,000.00 from the above-mentioned credit line, of which, the financing
guarantee was limited to USD50 million, and the guaranteed Hong Kong Konka Co., Ltd. for
overseas procurement of raw materials; Anhui Konka Tongchuang could use the above credit
line RMB30 million, and the Company provided the joint liability guarantee. The types of
credit line are limited to the draft acceptance, the discount of bill, the redemption limit of
commercial bills and the replacement of bills. Anhui Konka Electronic Co., Ltd. could use
the above credit line RMB100 million. As of June 30, 2019, a total of RMB 425.3328 million
was used from the above credit line, and the remaining credit line is RMB 74.6672 million.
(5) The Company signed the comprehensive credit line contract with Shenzhen Branch of
Bank of Communications, applying for the credit line of RMB500,000,000.00 for the RMB
working fund loan, the opening of domestic letters of credit, the letter of guarantee, business
limit of derivative products, the opening of the import letters of credit, and the import
documentary bills, the financing of import outward remittance. The credit line is valid from
June 14, 2019 to Jubne 12, 2019. As of June 30, 2019, a total of RMB250,000,000.00 was
used from the above credit line, and the remaining credit line is RMB250,000,000.00.
(6) The Company signed the comprehensive credit line contract (No.SYQHZZD0006 2018)
with Shenzhen Branch of China Citic Bank, applying for the comprehensive credit line of
RMB400,000,000.00. The credit line period is from October 12, 2018 to July 27, 2019. As of
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Konka Group Co., Ltd. Interim Report 2019
June 30, 2019, a total of RMB400,000,000.00 was used from the above credit line.
(7) On November 15, 2018, the Company signed the comprehensive credit line contract
(No.ZSYZSZD00009 (584600) 2018) with Shenzhen Branch of China Zheshang Bank,
applying for the maximum credit line of RMB1,000,000,000.00. The credit line period is
from November 15, 2018 to August 14, 2019. As of June 30, 2019, a total of
RMB300,000,000.00 was used from the above credit line, and the remaining credit line is
RMB 700,000,000.00.
(8) The Company signed the Comprehensive Credit Line Contract (No.
HXSFZLZZD20180921001) and applied to Shenzhen Branch of Guangdong Huaxing Bank
for the comprehensive credit line of RMB1,000,000,000.00. The guarantee period is from
September 21, 2018 to August 29, 2019. The Company has sub-licensed the comprehensive
credit line RMB200,000,000.00 the subsidiary Konka Factoring (Shenzhen). As of June 30,
2019, a total of RMB798.4 million was used from the above credit line, and the remaining
credit line is RMB201.6 million.
(9) On May 10, 2018, the Company signed the comprehensive credit line contract
(No.BSFZ(2018)9) and the supplementary agreement with Shenzhen Branch of China Bohai
Bank, applying for the total credit line of RMB500,000,000.00. The credit line term is one
year, and the credit line is used for the working capital loan, the trade bill acceptance, the
opening of the import LC, the export LC documentary bills, the import documentary bills
and the opening of domestic LC. As of June 30, 2019, a total of RMB366,660,000.00 was
used from the above credit line, and the remaining credit line is RMB133,340,000.00.
(10) On November 26, 2018, the Company signed the credit line agreement
(No.BY(2018)ZFJGBSXZD1126001) with Shenzhen Nanshan Baosheng Village Bank,
applying for the credit line of RMB20,000,000.00, and the credit line period is from
November 26, 2018 to November 26, 2019. The credit line is used for the opening of bank
acceptance bills, the working capital loans and the discounting of commercial acceptance
bills, etc. As of June 30, 2019, a total of RMB20,000,000.00 was used from the above credit
line.
(11) On November 28, 2018, the Company signed the credit line contract (No.
XYSHSXZ(2018)D0152) with Shenzhen Branch of China Industrial Bank, applying for the
maximum credit line of RMB2,000,000,000.00, and the credit line could be used to (but not
limited to) the working capital loan, the bank acceptance, the non-financing guarantee, and
the letters of credit, etc. The credit line period is valid from November 28, 2018 to November
28, 2019. As of June 30, 2019, a total of RMB479.922 million was used from the above
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Konka Group Co., Ltd. Interim Report 2019
credit line, and the remaining credit line is RMB1520.078 million.
(12) The Company applied the credit line of RMB1,200,000,000.00 via Shenzhen OCT
Branch of Agricultural Bank of China which could be used for the loans, the bill acceptance,
the notes discounted, the opening of L/C, the packing loan, the import bill advance, the
export bill purchase and the opening of letters of guarantee. The credit line shall be valid
from February 28, 2018 to February 28, 2019. As of June 30, 2019, a total of
RMB1,060,000,000.00 was used from the above credit line, and the remaining credit line is
RMB140,000,000.00.
(13) The Company applied the credit line no more than RMB480,000,000.00 via Shenzhen
Branch of Ningbo Bank which could be used for the loans, the bill acceptance, the notes
discounted, the opening of LC, the packing loan, the import bill advance, the export bill
purchase and the opening of letters of guarantee. The credit line shall be valid from
November 29, 2018 to November 29, 2019. As of June 30, 2019, a total of RMB
180,000,000.00 was used from the above credit line.
(14) The Company applied the credit line no more than RMB500,000,000.00 via Shenzhen
Branch of Shanghai Pudong Development Bank which could be used for the short-term loans,
bank acceptance bill, the notes discounted, the opening of domestic L/C, and the import letter
of credit. The expirtion of single deal is within one year. As of June 30, 2019, a total of RMB
497,800,000.00 was used from the above credit line, and the remaining credit line is
RMB2,200,000.00.
(15) The Company applied the credit line no more than RMB110,000,000.00 via Shenzhen
Nantou Branch of Hua Xia Bank which could be used for the loans, the bill acceptance, the
notes discounted, and the opening of L/C, etc. As of June 30, 2019, a total of
RMB100,000,000.00 was used from the above credit line, and the remaining credit line is
RMB0.
(16) The Company applied the non-commitment combined revolving credit line no more than
USD30,000,000.00 via Shenzhen Nantou Branch of HSBC which could be used for the
financial standby guarantee, commercial financing, short-term loan business. As of June 30,
2019, a total of USD29,509,786.85 was used from the above credit line.
(17) The Company applied for the credit line of RMB2,200,000,000.00 via Shenzhen OCT
Branch of China Construction Bank, of which, RMB940,000,000.00 was used as the
comprehensive credit line, RMB200,000,000.00 the financing credit line,
RMB500,000,000.00 the bonds, RMB40,000,000.00 the working capital loan,
RMB20,000,000.00 the capital transaction credit line and RMB500,000,000.00 other
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Konka Group Co., Ltd. Interim Report 2019
businesses. As of June 30, 2019, a total of RMB1056.89 million was used from the above
credit line, and the remaining credit line is RMB1143.11 million.
7. Accounts receivable in Guangdong Huaxing Bank:
The Company entered into the Domestic Factoring Business Contract with Guangdong
Huaxing Bank Shenzhen Branch (Contract No. HXSZF20181130001). According to the
Contact, Shenzhen Branch of Guangdong Huaxing Bank provides the Company with a
factoring quota not exceeding RMB500 million, with a validity from November 30, 2018 to
November 29, 2019. As of June 30, 2019, the factoring of accounts receivable of the
Company in the bank amounted to RMB486,000,000.00.
XV. Notes of Main Items in the Financial Statements of the Company
1. Notes Receivable
(1) Notes Receivable Listed by Category
Item Ending balance Beginning balance
Bank acceptance bill 1,588,216,743.04 2,176,411,080.13
Trade acceptance - 4,755,603.77
Total 1,588,216,743.04 2,181,166,683.90
(2) Notes Receivable Pledged by the Company at the Period-end
Item Amount
Bank acceptance bill 1,162,583,020.53
Total 1,162,583,020.53
(3) Notes Receivable Endorsed by the Company or Discounted and not due on the Balance
Sheet Date at the Period-end
Derecognized Amount at the Non-derecognized amount at the
Item
period-end period-end
Bank acceptance bill 30,000.00 -
Total 30,000.00 -
(4) Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to Execute
the Contract or Agreement at the Period-end
Item Amount of the notes transferred to accounts receivable at the period-end
Trade acceptance 634,527,889.84
Total 634,527,889.84
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Konka Group Co., Ltd. Interim Report 2019
2. Accounts Receivable
(1) Accounts Receivable Classified by Aging
Aging Ending balance
7,570,772,386.95
Within 1 year
1 to 2 years 773,828,913.36
2 to 3 years 2,153,499.92
3 to 4 years 5,665,927.72
Over 4 years 167,507,512.11
Subtotal 8,519,928,240.06
Less: Bad debt provision 253,216,175.40
Total 8,266,712,064.66
(2) Accounts Receivable Classified by Bad Debt Withdrawal Method
Ending balance
Carrying amount Bad debt provision
Category Withdrawal
Proportion Carrying value
Amount Amount proportion
(%）
(%）
Accounts
receivable for
which expected
661,786,861.45 7.77 67,967,189.08 10.27 593,819,672.37
credit loss
separately
accrued
Accounts
receivable for
which expected
credit loss
separately
accrued by
groups
Of which:
1,092,201,413.66 12.82 185,248,986.32 16.96 906,952,427.34
Aging group
Engineering
- - - - -
expense group
Related party
group in the
Company’s 6,765,939,964.95 79.41 - - 6,765,939,964.95
combination
scope
Total 8,519,928,240.06 100.00 253,216,175.40 2.97 8,266,712,064.66
(Continued)
Beginning balance
Category
Carrying amount Bad debt provision Carrying value
290
Konka Group Co., Ltd. Interim Report 2019
Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Accounts receivable
for which expected
767,486,677.87 10.00 69,790,565.32 9.09 697,696,112.55
credit loss separately
accrued
Accounts receivable
for which expected
- - - - -
credit loss separately
accrued by groups
Of which: Aging
1,029,783,688.54 13.42 177,262,039.88 17.21 852,521,648.66
group
Engineering
- - - - -
expense group
Related party group
in the Company’s 5,876,525,075.32 76.58 - - 5,876,525,075.32
combination scope
Total 7,673,795,441.73 100.00 247,052,605.20 3.22 7,426,742,836.53
1 Accounts receivable with significant single amount for which bad debt provision
separately accrued at the period-end
Ending balance
Accounts receivable (by
Bad debt Withdrawal
unit) Carrying amount Withdrawal reason
provision proportion (%)
CEFC(Shanghai) Group Debt default on
300,027,889.84 30,002,788.98 10.00
Co.,Ltd. nfoormation disclosure
Debt default on
Hongtu Sanbao
nfoormation
High-Tech Technology 200,000,000.00 10,000,000.00 5.00
disclosure,difficult in
Co.,Ltd.
working capital
China Nuclear
Difficult in working
Engineering Construction 84,500,000.00 4,225,000.00 5.00
capital
Group Co., Ltd.
China Energy Power Fuel Difficult in working
50,000,000.00 5,000,000.00 10.00
Co., Ltd. capital
Henan Radio and
Expected to be difficult
Television Network Co., 4,580,000.00 1,374,000.00 30.00
to recover in full
Ltd.
Expected to be difficult
Beijing CP Lotus Store 1,656,628.91 1,656,628.91 100.00
to recover in full
Qinhuangdao Baihai
Expected to be difficult
Electrical Appliance Co., 1,430,290.00 430,290.00 30.08
to recover in full
Ltd.
Other 19,592,052.70 15,278,481.19 77.98 ——
Total 661,786,861.45 67,967,189.08 10.27 ——
291
Konka Group Co., Ltd. Interim Report 2019
② Among these groups, accounts receivable adopting aging method to withdraw bad debt
provision
Ending balance
Item
Accounts receivable Bad debt provision Withdrawal proportion (%)
Within 1 year 804,316,677.28 16,331,149.74 2.03
1 to 2 years 127,366,110.66 9,386,882.36 7.37
2 to 3 years 1,146,640.85 253,980.95 22.15
3 to 4 years 261,523.81 166,512.21 63.67
Over 4 years 159,110,461.06 159,110,461.06 100.00
Total 1,092,201,413.66 185,248,986.32 16.96
③ Among these groups, accounts receivable adopting other method to withdraw bad debt
provision
Ending balance
Item
Carrying amount Bad debt provision Withdrawal proportion (%)
Related party
group in the
Company’s 6,765,939,964.95 - -
combination
scope
Total 6,765,939,964.95 - -
(3) Particulars of Bad Debt Provision
Changes in the Reporting Period
Write-off
Item Beginning balance Reversal or Ending balance
Withdrawal /other
recovery
decrease
Accounts
receivable for
which expected
69,790,565.32 2,756,064.82 4,579,441.06 67,967,189.08
credit loss
separately
accrued
Accounts
receivable for
which expected
credit loss -
separately
accrued by
groups
Of which:
177,262,039.88 7,986,946.44 185,248,986.32
Aging group
Engineering
- -
expense group
292
Konka Group Co., Ltd. Interim Report 2019
Related party
group in the
Company’s - -
combination
scope
Total 247,052,605.20 10,743,011.26 4,579,441.06 - 253,216,175.40
Of which, the significant recovered or reversed amount of bad debt provision in the current
period.
Name Reversal or recovery The way of Reversal or recovery
Jizhong Energy International
3,000,000.00 Recovered
Logistics Group Co., Ltd.
Total 3,000,000.00 ——
(4) There is no Accounts Receivable Actually Verified in the Current Period
(5) Top 5 Accounts receivable with insignificant single amount for which bad debt provision
separately accrued
Total amount of Top 5 of ending balance of the accounts receivable collected according to
arrears party was RMB8,386,297,751.93 accounting for 98.43% of total ending balance of
accounts receivable. Total ending balance of bad debt provision withdrawn was
RMB30,002,788.98.
3. Other Receivables
Item Ending balance Beginning balance
2,276,507.84 5,769,663.24
Interest receivable
- -
Dividends receivable
7,866,615,369.75 6,660,069,551.06
Other receivables
7,868,891,877.59 6,665,839,214.30
Total
(1) Interest Receivable
Item Ending balance Beginning balance
Fix time deposit 2,117,568.41 3,435,261.69
Entrusted loans 153,476.93 2,328,939.05
Wealth management income 5,462.50 5,462.50
Total 2,276,507.84 5,769,663.24
(2) Other Receivables
① Other Receivables Disclosed by Aging
293
Konka Group Co., Ltd. Interim Report 2019
Aging Ending balance
Within 1 year 6,932,521,149.32
1 to 2 years 513,921,855.55
2 to 3 years 179,004,289.93
3 to 4 years 85,105,749.00
4 to 5 years 32,342,344.33
Over 5 years 313,666,650.76
Subtotal 8,056,562,038.89
Less: Bad debt provision 189,946,669.14
Total 7,866,615,369.75
② Particulars of Withdrawal of Bad Debt Provision
First stage Second stage Third stage
Expected loss in
Expected loss in the
Bad debt provision Expected credit loss the duration Total
duration (credit
of the next 12 (credit
impairment
months impairment not
occurred)
occurred)
Balance of 1 January 2019 26,795,869.14 162,653,423.19
189,449,292.33
Balance of other receivable on 1 -
January 2019 in the current period:
--Transfer to Second stage -
-- Transfer to Third stage -
-- Reverse to Second stage -
-- Reverse to Third stage -
Withdrawal of the current period 662,414.01 662,414.01
Reversal of the current period 165,037.20 165,037.20
Write-offs of the current period -
Verification of the current period -
Other changes -
Balance of 30 June 2019 27,458,283.15 - 162,488,385.99
189,946,669.14
Ending balance
Carrying amount Bad debt provision
Category
Propor Withdrawal Carrying value
Amount Amount
tion proportion
294
Konka Group Co., Ltd. Interim Report 2019
(%) (%)
Other receivables for which
expected credit loss separately 173,251,217.33 2.15 162,488,385.99 93.79 10,762,831.34
accrued
Other receivables withdrawn bad
debt provision according to credit
risks characteristics:
Group 1: Aging group 168,118,322.40 2.09 26,711,552.07 15.89 141,406,770.33
Group 2: Low-risk group 74,673,108.11 0.93 746,731.08 1 73,926,377.03
Group 3: Related party group in
7,640,519,391.05 94.83 -
the Company’s combination scope
Total 8,056,562,038.89 100 189,946,669.14 2.36 7,866,615,369.75
Beginning balance
Carrying amount Bad debt provision
Category Withdra
Propor Carrying value
wal
Amount tion Amount
proportio
(%)
n (%)
Other receivables
for which expected
173,765,477.33 2.54 162,653,423.19 93.61 11,112,054.14
credit loss
separately accrued
Other receivables
withdrawn bad debt
provision according -
to credit risks
characteristics:
Group 1: Aging
123,303,853.71 1.8 26,478,680.53 21.47 96,825,173.17
group
Group 2: Low-risk
29,986,121.11 0.44 317,188.61 1.06 29,668,932.50
group
Group 3: Related
party group in the
6,522,463,391.24 95.22 - - 6,522,463,391.24
Company’s
combination scope
Total 6,849,518,843.39 100 189,449,292.33 2.77 6,660,069,551.06
③Particulars of Bad Debt Provision
Changes in the Reporting Period
Category Beginning balance Reversal or Ending balance
Withdrawal Withdrawal
recovery
Other
162,653,423.19 - 165,037.20 - 162,488,385.99
receivabl
295
Konka Group Co., Ltd. Interim Report 2019
es for
which
expected
credit
loss
separatel
y accrued
Aging
26,478,680.53 232,871.54 - 26,711,552.07
Group
Low-risk
317,188.61 429,542.47 - 746,731.08
Group
Total 189,449,292.33 662,414.01 165,037.20 - 189,946,669.14
④There is no Accounts Receivable Actually Verified in the Current Period
⑤Top 5 Accounts receivable with insignificant single amount for which bad debt
provision separately accrued
Ending
Proportion to ending
balance of
Name of the entity Nature Ending balance Aging balance of total
bad debt
other receivables%
provision
Konka Huanjia Related-party 18.62
1,500,000,000.00 Within 1 year -
borrowings
Telecommunication Related-party 14.09
1,135,134,400.00 Within 1 year -
Technology borrowings
Konka Investment Related-party 12.65
1,019,000,000.00 Within 1 year -
borrowings
Anhui Tongchuang Related-party Within 1 year, 1 to 7.20
580,000,000.00 -
borrowings 2 years
Econ Technology Related-party 5.85
471,614,259.00 Within 1 year -
borrowings
4,705,748,659.00 58.41 -
Total — —
⑥There is no Other Receivables which Terminate the Recognition owning to the
Transfer of the Financial Assets.
⑦There is no Amount of the Assets and Liabilities Formed by the Transfer and the
Continues Involvement of Accounts Receivable.
296
Konka Group Co., Ltd. Interim Report 2019
4. Long-term Equity Investment
(1) Category of Long-term Equity Investment
Ending balance Beginning balance
Item
Carrying amount Depreciation reserve Carrying value Carrying amount Depreciation reserve Carrying value
Investment to
5,066,125,372.51 46,732,484.69 5,019,392,887.82 4,562,175,372.51 46,732,484.69 4,515,442,887.82
subsidiaries
Investment to
1,705,141,187.47 5,158,909.06 1,699,982,278.41 1,672,678,055.95 5,158,909.06 1,667,519,146.89
associated enterprises
Total 6,771,266,559.98 51,891,393.75 6,719,375,166.23 6,234,853,428.46 51,891,393.75 6,182,962,034.71
(2) Investment to Subsidiaries
Depreciation reserve Ending balance of
Investee Beginning balance Increase Decrease Ending balance
withdrawn
depreciation reserve
Mudangjiang Electric
36,000,000.00 - - 36,000,000.00 - 36,000,000.00
Appliances
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 3,637,470.00 - - 3,637,470.00 - -
Konka Household
10,732,485.69 - - 10,732,485.69 - 10,732,484.69
Appliances
Telecommunication
300,000,000.00 60,000,000.00 - 360,000,000.00 - -
Technology
297
Konka Group Co., Ltd. Interim Report 2019
Depreciation reserve Ending balance of
Investee Beginning balance Increase Decrease Ending balance
withdrawn
depreciation reserve
Domestic appliance 31,500,000.00 - - 31,500,000.00 - -
Fittings Technology 48,750,000.00 - - 48,750,000.00 - -
Konka Factoring 300,000,000.00 - - 300,000,000.00 - -
Wankaida 10,000,000.00 - - 10,000,000.00 - -
Anhui Tongchuang 481,702,612.22 - - 481,702,612.22 - -
Beijing Konka 200,000,000.00 - - 200,000,000.00 - -
Konka E-display 7,200,000.00 - 7,200,000.00 - - -
Commercial Technology 5,832,000.00 - - 5,832,000.00 - -
Mobile Internet 10,200,000.00 - - 10,200,000.00 - -
E2info 19,322,040.00 - - 19,322,040.00 - -
E3info 12,000,000.00 - - 12,000,000.00 - -
Dongguan Packing 8,602,009.10 - - 8,602,009.10 - -
Chuzhou Konka TID 40,000,000.00 - 40,000,000.00 - - -
Konka Ventures 2,550,000.00 - - 2,550,000.00 - -
Konka Pengrun 25,500,000.00 - - 25,500,000.00 - -
Konka Unifortune 15,300,000.00 - - 15,300,000.00 - -
Konka Investment 40,000,000.00 - - 40,000,000.00 - -
Jiangxi Konka 689,680,000.00 - - 689,680,000.00 - -
298
Konka Group Co., Ltd. Interim Report 2019
Depreciation reserve Ending balance of
Investee Beginning balance Increase Decrease Ending balance
withdrawn
depreciation reserve
Electronics Technology 1,000,000,000.00 - - 1,000,000,000.00 - -
Sichuan Kangjiatong 1,020,000.00 14,280,000.00 - 15,300,000.00 - -
Econ Technology 688,500,000.00 - - 688,500,000.00 - -
Konka Huanjia 91,800,000.00 - - 91,800,000.00 - -
Shenzhen Nianhua 30,000,000.00 - - 30,000,000.00 - -
Shanghai Konka 40,000,000.00 - - 40,000,000.00 - -
Shenzhen KONSEMI 14,000,000.00 71,720,000.00 - 85,720,000.00 - -
Konka Ronghe
Industrial Technology - 5,100,000.00 - 5,100,000.00 - -
(Foshan) Co., Ltd.
Suining Electronic
Technological - 200,000,000.00 - 200,000,000.00 - -
Innovation
Shenzhen Konka
Eco-Development - 50,000.00 - 50,000.00 - -
Investment Co., Ltd.
Suining Konka - 200,000,000.00 - 200,000,000.00 - -
299
Konka Group Co., Ltd. Interim Report 2019
Depreciation reserve Ending balance of
Investee Beginning balance Increase Decrease Ending balance
withdrawn
depreciation reserve
Total 4,562,175,372.51 551,150,000.00 47,200,000.00 5,066,125,372.51 - 46,732,484.69
(3) Investment to Joint Ventures and Associated Enterprises
Beginning balance Increase/decrease
Investee Beginning balance Gains and losses Adjustment of other
of depreciation on Additional Reduced Changes of other
recognized under comprehensive
reserve investment investment equity
the equity method income
Shenzhen Konka Information Network Co.,
19,155,353.91 5,158,909.06 - - -10,458,637.68 - -
Ltd.
Shenzhen Yaode Technology Co., Ltd. 222,210,835.18 - - - 1,615,602.55 - -
Chutian Dragon Co., Ltd. 624,845,604.93 - - - 13,279,493.50 - -
Konka Green, Konka Technology 78,409,903.14 - - - -180,177.55 - -
Zhuhai Jinsu Plastic Co., Ltd. 11,040,246.82 - - - 428,175.28 - -
Shenzhen Konka Intelligent Electrical
2,287,478.52 - - - -152,488.28 - -
Apparatus Co., Ltd.
Shenzhen Zhongbing Konka Technology Co.,
10,617,873.79 - - - -2,230,059.14 - -
Ltd.
Guangdong Hotcomm Information
- - - - - - -
Technology Co., Ltd.
300
Konka Group Co., Ltd. Interim Report 2019
Beginning balance Increase/decrease
Investee Beginning balance Gains and losses Adjustment of other
of depreciation on Additional Reduced Changes of other
recognized under comprehensive
reserve investment investment equity
the equity method income
Zhonggao Konka Intelligent Technology
- - - - - - -
(Beijing) Co., Ltd.
Shenzhen OCT LIFE Network Technology
3,592,514.06 - - 3,592,514.06 - - -
Co., Ltd.
Kunshan Konka 146,846,610.14 - - - -4,811,843.11 - -
Kunshan Kangsheng 175,254,554.65 - - - - - -
Kaikai Shijie 35,364,497.05 - - - - - -
Shenzhen Bosser New Materials Co., Ltd. 79,859,338.44 - - - 1,056,895.31 - -
Helongjiang Longkang Zhijia Technology Co.,
6,400,480.52 - - - -239,050.00 - -
Ltd.
Shaanxi Silk Road Cloud Smart Tech Co.,
4,522,509.33 - - - - - -
Ltd.
Wuhan Tianyuan Environmental Protection
252,270,255.47 - - - 5,620,617.83 - -
Co., Ltd.
Shenzhen E-display Co., Ltd. - - - - - - -
Chuzhou Konka TID - - - - - - -
301
Konka Group Co., Ltd. Interim Report 2019
Beginning balance Increase/decrease
Investee Beginning balance Gains and losses Adjustment of other
of depreciation on Additional Reduced Changes of other
recognized under comprehensive
reserve investment investment equity
the equity method income
Total 1,672,678,055.95 5,158,909.06 - 3,592,514.06 3,928,528.71 - -
(Continued)
Increase/decrease
Ending balance of
Investee Cash bonus or profits Withdrawal of Ending balance
Other depreciation reserve
announced to issue impairment provision
Shenzhen Konka Information Network Co., Ltd. - - - 8,696,716.23 5,158,909.06
Shenzhen Yaode Technology Co., Ltd. - - - 223,826,437.73 -
Chutian Dragon Co., Ltd. - - - 638,125,098.43 -
Konka Green, Konka Technology - - - 78,229,725.59 -
Zhuhai Jinsu Plastic Co., Ltd. 2,070,000.00 - - 9,398,422.10 -
Shenzhen Konka Intelligent Electrical Apparatus Co., Ltd. - - - 2,134,990.24 -
Shenzhen Zhongbing Konka Technology Co., Ltd. - - - 8,387,814.65 -
Guangdong Hotcomm Information Technology Co., Ltd. - - - - -
Zhonggao Konka Intelligent Technology (Beijing) Co., Ltd. - - - - -
Shenzhen OCT LIFE Network Technology Co., Ltd. - - - - -
Kunshan Konka - - - 142,034,767.03 -
302
Konka Group Co., Ltd. Interim Report 2019
Increase/decrease
Ending balance of
Investee Cash bonus or profits Withdrawal of Ending balance
Other depreciation reserve
announced to issue impairment provision
Kunshan Kangsheng - - - 175,254,554.65 -
Kaikai Shijie - - - 35,364,497.05 -
Shenzhen Bosser New Materials Co., Ltd. - - - 80,916,233.75 -
Helongjiang Longkang Zhijia Technology Co., Ltd. - - - 6,161,430.52 -
Shaanxi Silk Road Cloud Smart Tech Co., Ltd. - - - 4,522,509.33 -
Wuhan Tianyuan Environmental Protection Co., Ltd. - - - 257,890,873.30 -
Shenzhen E-display Co., Ltd. - - 16,926,689.50 16,926,689.50 -
Chuzhou Konka TID 17,270,427.37 17,270,427.37 -
Total 2,070,000.00 - 34,197,116.87 1,705,141,187.47 5,158,909.06
303
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Interim Report 2019
5. Operating Revenue and Cost of Sales
(1) Operating Revenue and Cost of Sales
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main
3,321,449,906.68 3,349,145,473.78 4,519,683,896.29 4,013,358,791.77
operations
Other
2,046,571,803.72 1,915,004,019.37 2,036,884,619.01 1,944,666,140.94
operations
Total 5,368,021,710.40 5,264,149,493.15 6,556,568,515.30 5,958,024,932.71
(2) Main Operations (Classified by Industry)
Reporting Period Same period of last year
Industry
Operating revenue Cost of sales Operating revenue Cost of sales
Electronic
3,321,449,906.68 3,349,145,473.78 4,519,683,896.29 4,013,358,791.77
industry
Total 3,321,449,906.68 3,349,145,473.78 4,519,683,896.29 4,013,358,791.77
(3) Main Operations (Classified by Product)
Reporting Period Same period of last year
Product
Operating revenue Cost of sales Operating revenue Cost of sales
Color TV
3,090,957,961.84 3,121,985,874.83 4,224,714,468.42 3,730,979,831.79
business
Consumer
appliances 42,860,456.45 37,086,020.47 100,943,929.96 89,279,454.11
business
Other 187,631,488.39 190,073,578.48 194,025,497.91 193,099,505.86
Total 3,321,449,906.68 3,349,145,473.78 4,519,683,896.29 4,013,358,791.77
(4) Main Operations (Classified by Area)
Reporting Period Same period of last year
Area
Operating revenue Cost of sales Operating revenue Cost of sales
Domestic sales 2,567,643,989.49 2,621,004,287.15 3,600,826,510.58 3,175,143,251.38
Overseas sales 753,805,917.19 728,141,186.63 918,857,385.71 838,215,540.39
Total 3,321,449,906.68 3,349,145,473.78 4,519,683,896.29 4,013,358,791.77
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Interim Report 2019
(5) Operating Revenue from the Top 5 Customers
Proportion to the operating revenue of the
Period Total operating revenue from the top 5 customers
Reporting Period
Jan.-Jun.2019 948,596,365.49 17.67
Jan.-Jun.2018 1,421,092,900.82 11.74
6. Investment Income
Same period of last
Item Reporting Period
year
Long-term equity investment income accounted by cost method - 634,394,080.11
Long-term equity investment income accounted by equity method 3,928,528.71 13,240,183.30
Investment income from disposal of long-term equity investment 79,766,195.94 48,431,372.55
Investment income from holding of financial assets at fair value through
-10,285,883.02 -
profit or loss
Investment income from disposal of financial assets at fair value through
- -82,412,478.05
profit or loss
Investment income from holding of held-to-maturity investments - -
Investment income from disposal of held-to-maturity investments - -
Investment income from holding of available-for-sale financial assets - 13,740,000.00
Investment income from disposal of available-for-sale financial assets - -
Gains from re-measurement of residual equity at fair value after losing
1,225,905.15 445,568,627.45
control power
Income from entrust financial products and entrust loans 111,340,992.10 86,485,492.92
Financial assets transferred from equity investments accounted by equity
- -
method
Total 185,975,738.88 1,159,447,278.28
XVI. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
Item Amount Note
Gain/Loss arising from disposal of non-current assets
570,011,162.17
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Konka Group Co., Ltd.
Interim Report 2019
Item Amount Note
Tax rebates, reductions or exemptions due to approval beyond authority or the lack of
official approval documents
Government subsidies recognized in the current period, except for those acquired in the
ordinary course of business or granted at certain quotas or amounts according to the
320,821,164.45
government’s unified standards
Capital occupation charges on non-financial enterprises that are recorded into current
profit or loss
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
110,312,982.21
Asset impairment provisions due to acts of God such as natural disasters
Gain/Loss from 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 profit or loss of subsidiaries acquired in business combination under the same
control from period-beginning to combination date
Gain/Loss incurred from contingency unrelated to the Company’s normal operating
businesses.
Gain/Loss on changes in fair value arising from holding of trading financial assets and
liabilities and investment income from disposal of trading financial assets, financial
liabilities and available-for-sale financial assets other than effective hedge business -13,291,264.69
related to the Company’s normal operating businesses
Reverse of bad debt provision of accounts receivable individually conducting
impairment test
Gain/loss on entrustment loans
928,721.16
Gain/loss on change in fair value of investment property of which the subsequent
306
Konka Group Co., Ltd.
Interim Report 2019
Item Amount Note
measurement is carried out adopting fair value method
Effect on current profit or loss when a one-off adjustment is made to current profit or
loss according to requirements of taxation, accounting and other relevant laws and
regulations
Custody fee income when entrusted with operation
Other non-operating income and expense other than the above
19,460,574.99
Project confirmed with the definition of non-recurring gains and losses and losses 136,688,905.38
Subtotal 1,144,932,245.67
Income tax effects 82,538,800.98
Non-controlling interests effects (after tax) 86,714,790.39
Total 975,678,654.30
Note: the number “+” among the non-recurring profit or loss items refers to revenue and income, while “-”referred to losses or
expense.
The recognition of the non-recurring profit or loss items was executed according to the
regulations of No.1 of the Information Disclosure Explanatory Notice of the Companies Public
Offering Securities-Non- recurring Profit or Loss (ZJH Announcement [2008] No. 43) .
Amount involved in the item that the Company classifies as an non-recurring gain/loss according
to the definition in the Explanatory Announcement No. 1 on Information Disclosure for
Companies Offering Their Securities to the Public—Non-recurring Gains and Losses, or
classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a
recurrent gain/loss item (including government subsidies recorded in the current profit or loss) is
as follows:
Item Amount Reason
Government grants recognized in the current period, and
acquired in the ordinary course of business or granted at certain
Software tax rebates 23,063,806.91
quotas or amounts according to the government’s unified
standards
2. Return on Equity and Earnings Per Share
Profit as of Reporting Period Weighted average ROE EPS (Yuan/share)
(%)
307
Konka Group Co., Ltd.
Interim Report 2019
EPS-basic EPS-diluted
Net profit attributable to ordinary shareholders of the
4.25 0.1465 0.1465
Company
Net profit attributable to ordinary shareholders of the
-7.51 -0.2587 -0.2587
Company after deduction of non-recurring profit or loss
308
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Interim Report 2019
Part XI Documents Available for Reference
I. The financial statements with the signatures and seals of the Company’s legal representative,
Chief Financial Officer and head of the financial department;
II. The originals of all the Company’s documents and announcements disclosed to the public via
newspapers designated by the CSRC in the Reporting Period; and
III. Other relevant materials.
The Board of Directors
Konka Group Co., Ltd.
6 August 2019
309
