ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
KONKA GROUP CO., LTD.
Report for the Third Quarter of 2014
2014-47
October 2014
ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
Section I. Important Reminders
The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior management staff of Konka Group Co., Ltd. (hereinafter referred to as “the Company”) warrant that this report is factual, accurate and complete without any false record, misleading statement or material omission. And they shall be jointly and severally liable for that.
Except for the following Directors, the others attended the board session for reviewing this report.
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|Name of Directors notattended the boardsession in person|Position of Directors notattended the boardsession in person|Reason of not attendingthe boars session inperson|Name of mandatory|
|Wang Xiaowen|Director|On a business trip|Wu Siyuan|

Wu Siyuan, company principal, Huang Zhiqiang, chief of the accounting work, and Xu Youshan, chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report enclosed in this report is factual, accurate and complete. This report is prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail.
ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
Section II. Financial Highlights& Change of Shareholders I. Major accounting data and financial indexes
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or correction of any accounting error?√ Yes□ No
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|-|-|-|-|-|
||30 Sept. 2014|31 Dec. 2013||Increase/decrease (%)|
|||before adjustment|after adjustment|afteradjustment|
|Total assets (RMB Yuan)|16,060,816,760.49|15,743,284,335.49|15,743,284,335.49|2.02%|
|Net assets attributable toshareholders of the Company(RMB Yuan)|4,074,965,048.90|4,080,458,151.63|4,080,458,151.63|-0.13%|
||Jul.-Sept. 2014|YoYincrease/decrease(%)|Jan.-Sept. 2014|YoYincrease/decrease (%)|
|Operating revenues (RMBYuan)|5,069,587,917.51|-1.10%|13,467,888,459.14|-7.42%|
|Net profit attributable toshareholders of the Company(RMB Yuan)|2,219,144.43|116.30%|47,579,255.05|14.45%|
|Net profit attributable toshareholders of the Companyafter extraordinary gainsand losses (RMB Yuan)|-109,015,082.18|-780.26%|-280,948,661.71|-18,592.25%|
|Netcashflowsfromoperatingactivities (RMB Yuan)|--|--|954,710,313.21|-47.99%|
|Basic EPS (RMB Yuan/share)|0.0018|100.00%|0.0395|14.49%|
|Diluted EPS (RMB Yuan/share)|0.0018|100.00%|0.0395|14.49%|
|Weighted average ROE (%)|0.05%|0.02%|1.16%|0.14%|

 Items and amounts of extraordinary gains and losses
√Applicable□Inapplicable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount as of Jan.-Sept.2014|Note|
|Gains/losses on the disposal of non-current assets (including theoffset part of asset impairment provisions)|404,647,684.15||
|Government grants recognized in the current period, except forthose acquired in the ordinary course of business or granted at|25,630,924.28||

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
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|-|-|-|
|certain quotas or amounts according to the country’s unifiedstandards|||
|Gains and losses on change in fair value from tradable financialassets and tradable financial liabilities, as well as investmentincome from disposal of tradable financial assets and tradablefinancial liabilities and financial assets available for sales,exceptforeffectivehedgingrelatedwithnormalbusinessesoftheCompany|48,104.52||
|Non-operating incomes and expenses other than the above|2,299,991.71||
|Less: Income tax effects|104,573,675.54||
|Minority interests effects (after tax)|-474,887.64||
|Total|328,527,916.76|--|

 Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable√ Inapplicable
There was no such situation of the Company during the reporting period.
II. Total number of shareholders and shareholdings of the top ten shareholders at the period-end
1. Total number of common shareholders and shareholdings of the top ten common shareholders at the period-end
Unit: share
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|-|-|-|-|-|-|-|-|
|Total number of commonshareholdersattheperiod-end||77,479||||||
|Shareholdings of the top ten common shareholders||||||||
|Name ofshareholder|Nature ofshareholder||Shareholdingpercentage (%)|Number of theshares held|Number ofrestrictedshares held|Pledged or frozen shares||
|||||||Status ofshares|Number ofshares|
|OCT ENTERPRISESCO.|State-ownedcorporation||21.75%|261,873,466|198,381,940|Pledged|0|
|||||||Frozen|0|
|HOLY TIME GROUPLIMITED|Foreigncorporation||3.87%|46,533,615|0|Pledged|0|
|||||||Frozen|0|
|GAOLING FUND,L.P.|Foreigncorporation||2.19%|26,400,625|0|Pledged|0|
|||||||Frozen|0|
|China ResourcesSCP TrustCo.,Ltd.－ExtraordinaryNo. 18 CapitalTrust|Domesticnon-state-ownedcorporation||1.58%|19,060,288|0|Pledged|0|
|||||||Frozen|0|

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
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|-|-|-|-|-|-|-|-|-|-|
|Sun Zhenxiang|Domesticindividual|1.17%||14,093,988|0||Pledged||0|
||||||||Frozen||0|
|Guoyuan SecuritiesBroker (HK) Co.,Ltd.|Foreigncorporation|1.13%||13,650,000|0||Pledged||0|
||||||||Frozen||0|
|Warburg Trust Co.,Ltd.－Shijie HaoyuNo. 11 AssembledFunds Trust|Domesticnon-stateownedcorporation|1.00%||12,097,900|0||Pledged||0|
||||||||Frozen||0|
|NAM NGAI|Foreignindividual|0.97%||11,690,520|0||Pledged||0|
||||||||Frozen||0|
|GUOTAI JUNANSECURITIES(HONGKONG) LIMITED|Foreigncorporation|0.72%||8,695,062|0||Pledged||0|
||||||||Frozen||0|
|Li Yichao|Domesticindividual|0.48%||5,733,081|0||Pledged||5,447,381|
||||||||Frozen||0|
|Shareholdings of the top ten non-restricted common shareholders||||||||||
|Name of shareholder|||Number of non-restrictedcommon shares held at theperiod-end|||Type of shares||||
|||||||Type||Number||
|OCT ENTERPRISES CO.|||63,491,526|||RMB ordinary share||63,491,526||
|HOLY TIME GROUP LIMITED|||46,533,615|||Domestically listedforeign share||46,533,615||
|GAOLING FUND,L.P.|||26,400,625|||Domestically listedforeign share||26,400,625||
|China Resources SCP Trust Co., Ltd.－Extraordinary No.18CapitalTrust|||19,060,288|||RMB ordinary share||19,060,288||
|Sun Zhenxiang|||14,093,988|||RMB ordinary share||14,093,988||
|Guoyuan Securities Broker (HK)Co., Ltd.|||13,650,000|||Domestically listedforeign share||13,650,000||
|Warburg Trust Co., Ltd.－ShijieHaoyu No. 11 Assembled Funds Trust|||12,097,900|||RMB ordinary share||12,097,900||
|NAM NGAI|||11,690,520|||Domestically listedforeign share||11,690,520||
|GUOTAI JUNAN SECURITIES(HONGKONG)LIMITED|||8,695,062|||Domestically listedforeign share||8,695,062||
|Li Yichao|||5,733,081|||RMB ordinary share||5,733,081||
|Explanation on associatedrelationship or/and persons actinginconcert amongthe above-mentionedshareholders:|||The first majority shareholder OVERSEAS CHINESE TOWN ENTERPRISES CO.hasnorelated-partyrelationshipwithother shareholdersand theyarenot acting-in-concert parties, either. Except for that, the Companydoes not know whether the other shareholders are related parties and|||||||

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
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||whether they are acting-in-concert parties.|
|Explanation on the Top 10shareholders participating in themargin trading business (if any)|SunZhenxiangholds14,093,988A-sharesthroughaclientcredittradingguarantee securities account of GF Securities Co., Ltd.|

Did any of the top 10 common shareholders or the top 10 non-restricted common shareholders of the Company carry out any agreed buy-back in the reporting period?□ Yes√ No
No shareholder of the Company carried out any agreed buy-back in the reporting period. 2. Total number of preferred share holders and shareholdings of the top ten preferred share holders at the period-end
□ Applicable√ Inapplicable
ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
Section III. Significant Events
I. Major changes of main accounting statement items and financial indicators in the reporting period, as well as reasons for the changes
√ Applicable□ Inapplicable
(I) In the reporting period, our internet oriented strategy produced initial results, with the product structure improved and the sales proportion of intelligent TVs increased to some extent. However, affected by the drop in the domestic sales volume and amount of color TVs, the domestic sales income of our color TVs registered a certain decrease, leading to a certain decrease in the main business profit. (II) In the reporting period, we focused on enhancing the internet oriented strategy, with details as follows:
1. We unveiled the E-strategy to build an intelligent TV-Internet operation platform. With high responsiveness and being always one among the first to notice the development trends in the industry, we put forward to build the first intelligent TV-Internet operation platform in China. We not only could deepen the intelligent TV division to include content production and distribution platforms, but also were likely to build the largest precision marketing platform of it to achieve maximum value. Under this strategic goal, we put forward the strategic slogan of “E-dominance”andunveiledtheGroup’sE-strategyforthefirsttime.TheE-strategy consistsoftwocores—E-endandE-platform, the“1+1Strategy” forshort. “E-end” refers to the extremely easy-to-use TV intelligent end, the household internet control center. “E-platform” refers to the open and easily enjoyable intelligent TV Internet operation. For Konka, E-end is the technical support and hardware basis for E-platform; and E-platform is E-end in the aggregate, platform and internet forms. E-platform is the future of the Company, and the most important product in the future. Konka E-platform is a fully open platform for content and application suppliers in the vertical direction and for counterparts in the horizontal direction. In the vertical direction, E-platform is a platform of information renewal. Through information exchange among users on E-platform, we can analyze and integrate data and renew information to help explore new production functions, application contents and business modes, which helps form an interest community of the up-and-down-stream industries. In the horizontal direction, E-platform helps us study the big picture of the TV industry and promotes the formulation of exchange standards in the industry. In this way, it will grow into a more convenient, faster and stronger operation platform, as well as the hub with the richest contents and applications and a highland for added value.
In the reporting period, our internet oriented consciousness deepened. We initiated a series of activities and explorations, our products began to show the internet oriented trend and we became more internet oriented in the specific work.
2. The Company proactively searched for opportunities to strengthen foreign corporation such as the Internet and application content.
(1) The Company achieved strategic corporation with Youku Tudou Group and the latter
ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
offered video software services for the Internet TV promoted by the Company and implanted the function and service of Youku TV App into the full line of products of the Company.
(2) Joining hands with Tencent Games, we launched the E-TV Game TV. The Konka E-TV High-end Quality TV will carry selected Tencent games such as Seep Up, GunZ Dash, QQ Fight the Landlord Poker Game and National War Planes.
3. The Company launched the YI-TV best series and the YIUI professional TV control system.
(1) In the reporting period, we launched three best series of YI-TV 9800, YI-TV 6680 and YI-TV 1800, as well as the YIUI professional TV control system. As such, we implemented the“1+1 Strategy” to attract consumer attention with better products and use experience. The YIUI system is a professional TV control system designed for intelligent TVs, making intelligent control easier, more direct and more thorough. (2) In the reporting period, we launched the E-TV Slim LED TV with only 1.28cm in thickness, which represents the newest product of the internet superlative idea. With this crucial new product launched and the whole new strategy, our entertainment oriented transformation will speed up and a new world for intelligent TVs will begin. 4. We have invited international top star Fan Bingbing as our new spokesperson. The re-start of the spokesperson plan is an important step for us to rebuild our brand towards young people and fashion.
5. We also start a strategic cooperation with Sichuan TV (a provincial TV station in China), which is a crucial move for us to transform towards the internet and young people. We will carry out in-dept cooperation with Sichuan TV in terms of resources, contents, marketing channels and consumers to deal with the fundamental reform us, as a household appliance maker, face in business structure, productR&D and marketing mode under the internet impact.
(III) Analysis to the changes of main financial indicators
Unit: RMB Ten Thousand Yuan
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|Item|30Sept.2014/Jan.-Sept.2014|31 Dec. 2013/Jan.-Sept. 2013|Increase/decrease|Increase/decrease (%)|Main reason for the change|
|Prepayments|70,404.84|16,427.29|53,977.54|328.58%|① A prepayment of RMB488,063,979 for land inthe current period; ②Prepayments for materialsincreased.|
|Interestreceivable|798.96|289.84|509.12|175.65%|Term deposits and wealthmanagement productsincreased.|
|Othercurrentassets|38,311.60|0.00|38,311.60|-|New wealth managementproducts, etc.|

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
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|Available-for-salefinancialassets|3,592.99|94.20|3,498.79|3,714.22%|According to the new<Accounting Standard No.2for Business Enterprises—Long-term EquityInvestment>, otherinvestments where theCompany did not havecontrol, joint controlover or significantinfluence on the investedparties were restated asavailable-for-salefinancial assets.|
|Construction inprogress|12,727.14|4,992.40|7,734.74|154.93%|Plant and infrastructureexpenses increased.|
|Long-termborrowings|93,810.43|500.00|93,310.43|18,662.09%|Subsidiaries secured morelong-term borrowings.|
|Operatingrevenues|1,346,788.85|1,454,728.81|-107,939.97|-7.42%|The color TV business wasof a smaller size.|
|Operatingcosts|1,147,158.39|1,211,548.70|-64,390.30|-5.31%|The relevant costsdecreased as the sales ofcolor TVs decreased.|
|Financialexpenses|12,688.40|-3,074.88|15,763.28|512.65%|The exchange loss causedby exchange ratefluctuations increased.|
|Investmentgains|42,250.88|-1,065.21|43,316.09|4,066.45%|The subsidiarysoldsharesof Refond Optoelectronicsand Konka Video &Communication wastransferred. As a result,investment gainsincreased.|
|Cashreceived asinvestmentgains|14,227.44|304.59|13,922.85|4,571.01%|The subsidiarysoldsharesof RefondOptoelectronics.|
|Cashreceivedrelating tootherinvestingactivities|120,247.20|-|120,247.20|-|Wealth managementproducts came to thesolutionpay upon maturityin the current period.|
|Cash paidrelating tootherinvestingactivities|156,518.35|-|156,518.35|-|Wealth managementproducts were bought.|

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
II. Progress and influence of significant events, as well as the analysis and explanation on solutions
√ Applicable□ Inapplicable
(I) Progress of urban renewal projects of the Company headquarters of Konka 1. According to the application of the Company, The Restructuring Office of Chengzhong Village in Nanshan District of Shenzhen issued the Circular of the Main Implementer of the Renewal Project of the Headquarters of Konka Group in Nanshan District, Shenzhen in Nov. 2012, which publicized Konka Group as the main implementer of the Renewal Project of the Headquarters of Konka Group.
2. In August, 2013, Overseas Chinese Town Group submitted the Comment Letter of Opposing Konka Group to be the Only Subject of: Implementation of the Urban Updating Projects ofKonkaHeadquarterPlant” forapplicationtostopthe formalitiesof Konka Group headquarter plant and handle it after appropriate discussion between Overseas Chinese Town Group and the Company. According to the Comment Letter, the Shenzhen Nanshan Reconstruction Office of Urban Village (old village) released the Comment Letter of Konka Group to be the Subject of Implementation of Urban Updating Projects of Konka Headquarter Plant in August, 2013 to coordinate the rights and interests of all Parties and make suggestions to the Comment Letter.
Since then, although through negotiated by the relevant parties, there had not reached consensus on “whether Konka has the right to be as the sole implementer of plant renewal of the headquarters”.
3. In order to resolve the differences and promote the implementation of urban updating projects of Konka headquarter plant, according to the 53rd meeting of the 7th Board of Directors, the Company decided to submit the dispute of Konka Group to be the only subject of implementation of the urban updating projects to Shenzhen Court of International Arbitration. In order to promote the implementation of urban updating projects of Konka headquarter plant, according to the resolution of 54th meeting of the 7th Board of Directors, Konka Group shall pay the land funds for the projects in advance before the arbitration result. If the arbitral agency identifies the Company as the only development subject, the Company should continue implementing the project. If the arbitral agent asserts that the Company could not be the only development subject, the development plan should be discussed and agreed by the Company and OCT Group to handle the transfer formalities of the land and share the paid prices on land.
4. On 10 Mar., 2014, the Company has applied to Shenzhen Court of International Arbitration for arbitration of the subject of implementation of urban updating project of Konka headquarter plant to regard Overseas Chinese Town Group as the respondent and the Company as the only subject of implementation to develop the urban updating project of Shenzhen Nanshan Konka Group headquarter plant.
During 16 April, 2014 to 17 June, 2014, four court sessions were held by Shenzhen Court of International Arbitration. Overseas Chinese Group and the Company submitted the request for arbitration, evidence materials, written pleas and defending opinions.
ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
On 31 July, 2014, the Company received the consent award from Shenzhen Court of International Arbitration (No. HNGZC[2014] D97) with decisions:
(1) Rejecting the request of Konka Group to be the only subject of implementation of Urban Updating Projects of Shenzhen Nanshan Konka Group Headquarter Plant. (2) Rejecting the request about counsel fees from Konka Group.
(3) Rejecting the counterclaim about counsel fees from Overseas Chinese Town Group. (4) The arbitration fee of this case is 490,926.54 Yuan, totally assuming by Overseas Chinese Town Group. The repaid 29,050 Yuan by Overseas Chinese Town Group could be included in the arbitration fees paid by Overseas Chinese Town Group.
(5) The case with a counterclaim arbitration fee of RMB 29050, shall be borne fully by the OCT Group. OCT Group prepaid RMB 29050 as the arbitration fee that OCT Group shall bear.
5. The Company received the Letter of the Joint Development of the Renewal Project of Headquarter of Konka Group from OCT Group in Sep. 2014, for sooner promote the renewal events of the city land of headquarter of Konka Group and fully maintain the interests of the Konka Group as well as the broad masses of the investors, the cooperative development proposal suggested by the OCT Group Co., Ltd. was as follows: (I) OCT Group Co., Ltd. and Konka Group jointly set up the renewal transformation project of developing headquarter of Konka Group by joint venture company. (II) The equity propotion of the joint venture company was: OCT Group Co., Ltd. of40% while Konka Group of60%.
The Company presented the Proposal on the Renewal Project of the Joint Development of Headquarter of Konka Group with OCT Group to the 63rd Session of the 7th Board of Directors for review. When the Board of Directors were making the decision, affiliated directors such as Mr. Wu Siyuan, Mr. Su Zheng, Mrs. Wang Xiaowen and Mr. He Haibin avoided the voting, while the rest of the 3 Independent Directors voted down the proposal. In view of the divergence of the shareholders of Konka Group was rather big about the corporative development proposal on the renewal project of headquarter of Konka Group, and the OCT Group Co., Ltd. had not made any specified statement on the corporative development proposal put forward by it, the Independent Directors could not judge the fairness as well as the reasonability of the proposal. Thus the 3 Independent Directors of the Company made abstention vote for the proposal which led the proposal deprecated by the Board of Directors of the Company.
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|Overview of the significant event|Date of disclosure|Index to the relevantannouncement disclosed on thewebsite|
|1.AnnouncementonreceivingLetterofJoinedEffortsInDevelopingKonkaGroupHeadquartersFactoryUrbanRenewal Projects from Overseas Chinese Town GroupCo,. Ltd.|30 Sep. 2014|www.cninfo.com.cn|
|2. Resolution Announcement on 63rd Meeting of 7thSession of Board of Directors|30 Sep. 2014|www.cninfo.com.cn|

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
II. Other significant event: about the relevant events of the sale of inventory fractional share
The Company due to the implementation of the equity distribution business which came into being 29,978 fractional shares of A share and 234 B of share. In order to solve the fractional share problems left over by history, the Company, in Jul. 2014 signed Sale of Fractional Share Agreement of China Clearing Co., Ltd. Shenzhen Branch Entrusted by Listed Company with registered company and entrusted China Clearing Co., Ltd. Shenzhen Branch with dealing with the sale of fractional share. In Aug. 2014 the actual income of the sale of the A share (Including interest) was RMB 149,328.22 and the B shareHK$ 716.92 which had been classified into the bank account of the Company and was included in capital reserve subject in accordance with the stipulations.
III. Commitments made by the Company or shareholders holding over5% of theCompany’ s shares in the reporting period or such commitments carried down into the reporting period
□ Applicable√ Inapplicable
No such commitments in the reporting period.
IV. Predict the 2014 annual operating results
Warnings of possible loss or large-margin change of the accumulated net profit made during the period from the beginning of the year to the end of the next reporting period compared with the same period of the last year according to prediction, as well as explanations on the reasons
□Applicable√Inapplicable
V. Securities investment
√ Applicable□ Inapplicable
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|Variety ofsecurities|Codeofsecurities|Name ofsecurities|Initialinvestmentcost(RMBYuan)|Numberofsharesheldatperiod-beginning|Shareholdingpercentageatperiod-beginning|Numberofsharesheldatperiod-end|Shareholdingpercentageatperiod-end|Closing bookvalue(RMBYuan)|Gain/loss inreportingperiod(RMBYuan)|Accountingtitle|Sourceofstock|
|Stock|000002|Vanke A|2,311,748.07|117,310|0.00%|117,310|0.00%|1,076,905.80|0.00|Available-for-salefinancial assets|Subscriptionof additional issue|
|Other securitiesinvestments held atperiod-end|||0.00|0|--|0|--|0.00|0.00|--|--|
|Total|||2,311,748.07|117,310|--|117,310|--|1,076,905.80|0.00|--|--|
|Disclosure date of theboard announcement on|||Inapplicable|||||||||

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
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|-|-|
|approval of thesecurities investment||
|Disclosure date of thegeneral meetingannouncement on approvalof the securitiesinvestment (if any)|Inapplicable|

Shareholdings in other listed companies
□Applicable√Inapplicable
The Company did not have any shareholding in any other listed company in the reporting period.
VI. Investments in derivatives
□Applicable√Inapplicable
The Company did not invest in any derivative in the reporting period.
VII. Researches, visits and interviews received in the reporting period
□Applicable√Inapplicable
The Company did not receive any research, visit and interview in the reporting period. VIII.the Newly Promulgated or Amended Accounting Standards
According to the<Notice of Shenzhen Stock Exchange on Making Arrangements for Financial Information Disclosure Concerning the Newly Promulgated or Amended AccountingStandards>,we analyzed the influence of the accounting policy changes on our financial position and operating results, as well as the influence of important standard changes on our consolidated financial statements. Our consolidated financial statements were mainly affected by the change of the long-term equity investment-related standard, with details as follows:
Unit: RMB Yuan
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|-|-|-|-|-|-|
|Investee|Basictransactioninformation[Note 1]|1 Jan. 2013||31 Dec. 2013||
|||Capitalreserve(+/-)|Retainedearnings(+/-)|Capital reserve(+/-)|Retainedearnings(+/-)|
|ShenzhenRefondOptoelectronics Co., Ltd.||39,188,772.96|-39,188,772.96|39,188,772.96|-39,188,772.96|
|Total||39,188,772.96|-39,188,772.96|39,188,772.96|-39,188,772.96|

Note：
[1] According to the new<Accounting Standard No. 2 for BusinessEnterprises— Long-term EquityInvestment>, concerning long-term equity investments measured at the equity method, in regard to changes of other comprehensive incomes and other
changes ofowners’ equity of an investee other than net gains and losses and profit
allocation, the investing party shall measure its share of profit according to its
shareholding percentage in the investee, which shall be debited to other
ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
comprehensive incomes and other equity changes and credited to “other comprehensive incomes” and “capitalreserve—other capital reserve”. As such, the changes of other comprehensive incomes and other changes ofowners’ equity of Shenzhen Refond Optoelectronics Co., Ltd. other than net gains and losses and profit allocation as a result of investment increase, etc. that had been recorded into gains and losses in previous periods were retrospectively adjusted according to the new accounting standards, adding them to “capitalreserve—other capital reserve” and reducing them from “opening retained profits”.
[2] A positive number means increase and a negative number means decrease. According to the rules for balance sheet preparation in the new<Acco unting Standard No. 30 for BusinessEnterprises—
Financial StatementPreparation>, where an enterprise is involved in bu siness in relation to “other comprehensive incomes”, it shall have the “other comprehensive incomes” item in accounting treatment. When the enterprise carries out accounting treatment on other comprehensive incom es, it shall treat them under the “other comprehensive incomes” item and separate them from the “capital reserve” item. We restated the ca pital reserve on available-for-sale financial assets as other comprehens ive incomes and included the foreign-currency statement translation diff erence in the “other comprehensive incomes” item.
ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
Section IV. Financial Statements
I. Financial statements
1. Consolidated balance sheet
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
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|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|2,319,723,495.89|1,843,743,089.94|
|Settlement reserves|||
|Intra-group lendings|||
|Financial assets measured atfair value and of which changesare recorded into current gainsand losses|||
|Notes receivable|3,104,168,556.70|4,150,779,374.32|
|Accounts receivable|2,494,794,615.74|2,460,996,984.92|
|Accounts paid in advance|704,048,371.54|164,272,929.59|
|Premiums receivable|||
|Reinsurance premiumsreceivable|||
|Receivable reinsurancecontract reserves|||
|Interest receivable|7,989,609.01|2,898,419.90|
|Dividend receivable|||
|Other accounts receivable|239,714,052.22|298,749,414.95|
|Financial assets purchasedunder agreements to resell|||
|Inventories|3,563,217,183.36|3,582,669,024.26|
|Assets held for sale|||
|Non-current assets due within1 year|||
|Other current assets|383,115,952.51||
|Total current assets|12,816,771,836.97|12,504,109,237.88|
|Non-current assets:|||
|Loans by mandate and advancesgranted|||
|Available-for-sale financialassets|35,929,905.80|941,999.30|
|Held-to-maturity investments|||
|Long-term accounts receivable|||

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
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|Long-term equity investment|383,840,853.78|446,155,499.42|
|Investing property|233,780,636.14|237,986,524.12|
|Fixed assets|1,867,232,799.50|1,908,503,979.80|
|Construction in progress|127,271,430.84|49,924,027.97|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|352,681,475.25|359,585,571.12|
|R&D expense|||
|Goodwill|3,914,638.11|3,943,671.53|
|Long-term deferred expenses|25,824,096.64|13,405,084.94|
|Deferred income tax assets|213,569,087.46|218,728,739.41|
|Other non-current assets|||
|Total of non-current assets|3,244,044,923.52|3,239,175,097.61|
|Total assets|16,060,816,760.49|15,743,284,335.49|
|Current liabilities:|||
|Short-term borrowings|4,892,499,557.55|5,239,069,764.48|
|Borrowings from Central Bank|||
|Customerbankdepositsanddueto banks and other financialinstitutions|||
|Intra-group borrowings|||
|Financial liabilitiesmeasured at fair value and ofwhich changes are recorded intocurrent gains and losses|||
|Notes payable|678,781,200.04|565,137,790.84|
|Accounts payable|3,028,010,614.23|3,341,804,144.12|
|Accounts received in advance|423,952,034.02|482,716,035.68|
|Financial assets sold forrepurchase|||
|Handling charges andcommissions payable|||
|Employee ’ s compensationpayable|275,019,168.12|332,090,987.76|
|Tax payable|-62,223,550.11|-94,670,496.91|
|Interest payable|27,697,187.96|34,945,870.48|
|Dividend payable|0.00||

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Other accounts payable|1,403,468,592.04|1,391,396,130.97|
|Reinsurance premiums payable|||
|Insurance contract reserves|||
|Payablesforactingtradingofsecurities|||
|Payables for actingunderwriting of securities|||
|Liabilities held for sale|||
|Non-current liabilities duewithin 1 year|1,755,444.00|1,755,444.00|
|Other current liabilities|||
|Total current liabilities|10,668,960,247.85|11,294,245,671.42|
|Non-current liabilities:|||
|Long-term borrowings|938,104,312.91|5,000,000.00|
|Bonds payable|||
|Long-term payables|30,195,300.25|31,366,530.13|
|Specific payables|||
|Estimated liabilities|911,085.41|911,085.41|
|Deferred income taxliabilities|||
|Other non-current liabilities|136,811,615.70|131,658,369.11|
|Total non-current liabilities|1,106,022,314.27|168,935,984.65|
|Total liabilities|11,774,982,562.12|11,463,181,656.07|
|Owners ’ equity (orshareholders’ equity)|||
|Paid-up capital (or sharecapital)|1,203,972,704.00|1,203,972,704.00|
|Capital reserves|1,270,100,956.66|1,313,594,715.74|
|Less: Treasury stock|||
|Specific reserves|||
|Other comprehensive incomes|18,640,444.51|16,179,316.17|
|Provisions for general risks|847,908,466.28|847,908,466.28|
|Retained profits|734,342,477.45|698,802,949.44|
|Foreign exchange difference|||
|Minority interests|4,074,965,048.90|4,080,458,151.63|
|Total owners ’ (orshareholders’) equity|210,869,149.47|199,644,527.79|
|Total liabilities and owners’(or shareholders’) equity|4,285,834,198.37|4,280,102,679.42|
|Current Assets:|16,060,816,760.49|15,743,284,335.49|

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
Legal representative: Wu Siyuan Person-in-charge of the accounting work: Huang Zhiqiang Chief of the accounting division: Xu Youshan
2. Balance sheet of the Company
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|1,522,391,082.42|1,118,577,010.98|
|Financial assets measured at fair value and ofwhich changes are recorded into current gains andlosses|||
|Notes receivable|2,991,528,723.74|3,963,969,934.07|
|Accounts receivable|1,746,011,407.34|1,543,050,476.67|
|Accounts paid in advance|796,777,222.68|239,011,903.60|
|Interest receivable|31,935,760.50|12,151,753.22|
|Dividend receivable|||
|Other accounts receivable|377,421,582.25|668,297,184.77|
|Inventories|2,210,069,583.82|2,333,107,085.15|
|Assets held for sale|||
|Non-current assets due within 1 year|||
|Other current assets|369,115,952.51||
|Total current assets|10,045,251,315.26|9,878,165,348.46|
|Non-current assets:|||
|Available-for-sale financial assets|15,629,905.80|941,999.30|
|Held-to-maturity investments|600,000,000.00|505,000,000.00|
|Long-term accounts receivable|||
|Long-term equity investment|1,660,371,025.93|1,675,299,526.82|
|Investing property|233,780,636.14|237,986,524.12|
|Fixed assets|593,113,062.93|599,950,784.99|
|Construction in progress|40,259,292.56|8,713,508.63|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|73,523,256.75|76,133,522.45|
|R&D expense|||
|Goodwill|||

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Long-term deferred expenses|13,358,857.30|4,597,304.79|
|Deferred income tax assets|188,378,978.51|183,062,820.76|
|Other non-current assets|||
|Total of non-current assets|3,418,415,015.92|3,291,685,991.86|
|Total assets|13,463,666,331.18|13,169,851,340.32|
|Current liabilities:|||
|Short-term borrowings|575,796,101.90|1,023,913,426.22|
|Financial liabilities measured at fair value andofwhichchangesarerecordedintocurrentgainsandlosses|||
|Notes payable|232,179,734.78|190,949,990.17|
|Accounts payable|7,275,412,904.65|6,320,384,438.01|
|Accounts received in advance|134,988,561.38|186,326,967.62|
|Employee’s compensation payable|136,204,213.46|187,697,895.87|
|Tax payable|-117,197,697.85|-92,265,968.33|
|Interest payable|7,058,903.09|21,189,076.79|
|Dividend payable|||
|Other accounts payable|1,175,805,947.11|1,243,478,983.84|
|Liabilities held for sale|||
|Non-current liabilities due within 1 year|||
|Other current liabilities|||
|Total current liabilities|9,420,248,668.52|9,081,674,810.19|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Long-term payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income tax liabilities|||
|Other non-current liabilities|77,823,660.73|74,192,786.56|
|Total non-current liabilities|77,823,660.73|74,192,786.56|
|Total liabilities|9,498,072,329.25|9,155,867,596.75|
|Owners’ equity (or shareholders’ equity)|||
|Paid-up capital (or share capital)|1,203,972,704.00|1,203,972,704.00|
|Capital reserves|1,250,283,488.79|1,250,133,590.04|

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Less: Treasury stock|||
|Specific reserves|||
|Other comprehensive incomes|101,179.87|0|
|Provisions for general risks|847,908,466.28|847,908,466.28|
|Provisions for general risks|||
|Retained profits|663,328,162.99|711,968,983.25|
|Total liabilities and owners’ (or shareholders’)equity|3,965,594,001.93|4,013,983,743.57|
|Current Assets:|13,463,666,331.18|13,169,851,340.32|

 Legal representative: Wu Siyuan Person-in-charge of the accounting work: Huang Zhiqiang Chief of the accounting division: Xu Youshan
3. Consolidated income statement for the reporting period
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jul.-Sept. 2014|Jul.-Sept. 2013|
|I. Total operating revenues|5,069,587,917.51|5,125,888,856.21|
|Including: Sales income|5,069,587,917.51|5,125,888,856.21|
|Interest income|||
|Premium income|||
|Handling charge and commission income|||
|II. Total operating cost|5,286,732,376.10|5,155,561,503.95|
|Including: Cost of sales|4,461,016,065.72|4,279,709,450.47|
|Interest expenses|||
|Handling charge and commission expenses|||
|Surrenders|||
|Net claims paid|||
|Net amount withdrawn for the insurancecontract reserve|||
|Expenditure on policy dividends|||
|Reinsurance premium|||
|Taxes and associate charges|19,684,285.29|15,552,238.27|
|Selling and distribution expenses|603,920,274.15|672,680,950.49|
|Administrative expenses|161,335,348.26|167,099,846.16|
|Financial expenses|25,023,270.63|-9,041,427.05|
|Asset impairment loss|15,753,132.05|29,560,445.61|
|Add:Gain/(loss)fromchangeinfairvalue(“-”means loss)|||
|Gain/(loss) from investment (“-” meansloss)|156,068,719.20|-2,475,483.67|
|Including: share of profits in associatesand joint ventures|150,388,087.59|-2,475,483.67|
|Foreign exchange gains (“-” means loss)|||
|III. Business profit (“-” means loss)|-61,075,739.39|-32,148,131.41|
|Add: non-operating income|87,715,844.22|130,589,476.80|
|Less: non-operating expense|7,305,180.46|5,735,856.70|
|Including: loss from non-current assetdisposal|2,646,864.87|3,011,920.69|

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|IV. Total profit (“-” means loss)|19,334,924.37|92,705,488.69|
|Less: Income tax expense|16,856,829.43|89,039,674.82|
|V. Net profit (“-” means loss)|2,478,094.94|3,665,813.87|
|Including: Net profit achieved by combinedparties before the combinations|||
|Attributable to owners of the Company|2,219,144.43|1,025,980.12|
|Minority shareholders’ income|258,950.51|2,639,833.75|
|VI. Earnings per share|--|--|
|(I) Basic earnings per share|0.0018|0.0009|
|(II) Diluted earnings per share|0.0018|0.0009|
|VII. Other comprehensive incomes|309,882.96|-749,852.99|
|Including:Othercomprehensiveincomesitemsthatcannot be reclassified as gains and losses in thesubsequent accounting periods|229,818.89|-686,505.59|
|Other comprehensive incomes items that will bereclassifiedasgainsandlossesinthesubsequentaccounting periods as relevant requirements aremet|80,064.07|-63,347.40|
|VIII. Total comprehensive incomes|2,787,977.90|2,915,960.88|
|Attributable to owners of the Company|2,483,473.70|276,127.13|
|Attributable to minority shareholders|304,504.20|2,639,833.75|

Legal representative: Wu Siyuan Person-in-charge of the accounting work: Huang Zhiqiang Chief of the accounting division: Xu Youshan
4. Income statement of the Company for the reporting period
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jul.-Sept. 2014|Jul.-Sept. 2013|
|I. Total sales|4,927,749,644.75|5,400,743,339.80|
|Less: cost of sales|4,507,114,899.36|4,784,525,416.90|
|Business taxes and surcharges|6,621,386.11|8,959,658.28|
|Distribution expenses|475,996,986.70|513,502,645.20|
|Administrative expenses|113,759,087.34|103,247,670.81|
|Financial costs|2,457,573.62|6,252,701.05|
|Impairment loss|7,528,125.66|30,219,405.32|
|Add: gain/(loss) from change in fair value (“-”means loss)|||
|Gain/(loss) frominvestment(“-” meansloss)|5,680,116.54||
|Including:incomeforminvestmentonassociatesand joint ventures|||
|II. Business profit (“-” means loss)|-180,048,297.50|-45,964,157.76|
|Add: non-business income|79,279,469.92|118,023,308.68|
|Less: non-business expense|5,627,863.53|4,579,720.14|
|Including:lossfromnon-currentassetdisposal|1,173,968.94|2,409,461.96|
|III. Total profit (“-” means loss)|-106,396,691.11|67,479,430.78|
|Less: income tax expense|-26,577,644.05|18,220,744.94|
|IV. Net profit (“-” means loss)|-79,819,047.06|49,258,685.84|
|V. Earnings per share|--|--|
|(I) Basic earnings per share|-0.0660|0.0409|

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|(II) Diluted earnings per share|-0.0660|0.0409|
|VI. Other comprehensive income|80,064.07|-63,347.40|
|Including: Other comprehensive incomes items thatcannot be reclassified as gains and losses in thesubsequent accounting periods|-|0.00|
|Other comprehensive incomes items that will bereclassified as gains and losses in the subsequentaccountingperiodsasrelevantrequirementsaremet|80,064.07|-63,347.40|
|VII. Total comprehensive income|-79,738,982.99|49,195,338.44|

 Legal representative: Wu Siyuan Person-in-charge of the accounting work: Huang Zhiqiang Chief of the accounting division: Xu Youshan
5. Consolidated income statement for Jan.-Sept. 2014
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Sept. 2014|Jan.-Sept. 2013|
|I. Total operating revenues|13,467,888,459.14|14,547,288,137.21|
|Including: Sales income|13,467,888,459.14|14,547,288,137.21|
|Interest income|||
|Premium income|||
|Handling charge and commission income|||
|II. Total operating cost|13,922,489,483.67|14,549,916,838.04|
|Including: Cost of sales|11,471,583,908.48|12,115,486,956.16|
|Interest expenses|||
|Handling charge and commission expenses|||
|Surrenders|||
|Net claims paid|||
|Net amount withdrawn for the insurance contractreserve|||
|Expenditure on policy dividends|||
|Reinsurance premium|||
|Taxes and associate charges|47,098,016.85|48,586,402.77|
|Selling and distribution expenses|1,759,788,635.00|1,884,084,040.29|
|Administrative expenses|465,777,790.64|480,035,954.68|
|Financial expenses|126,884,047.87|-30,748,765.34|
|Asset impairment loss|51,357,084.83|52,472,249.48|
|Add:Gain/(loss)fromchangeinfairvalue(“-” meansloss)|||
|Gain/(loss) from investment (“-” means loss)|422,508,837.83|-10,652,063.79|
|Including: share of profits in associates and joint|152,108,088.99|-10,673,179.59|

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|ventures|||
|Foreign exchange gains (“-” means loss)|||
|III. Business profit (“-” means loss)|-32,092,186.70|-13,280,764.62|
|Add: non-operating income|145,931,312.24|176,544,290.82|
|Less: non-operating expense|11,341,121.48|10,861,709.33|
|Including: loss from non-current asset disposal|6,115,779.18|6,880,721.42|
|IV. Total profit (“-” means loss)|102,498,004.06|152,401,816.87|
|Less: Income tax expense|52,693,555.37|112,087,597.00|
|V. Net profit (“-” means loss)|49,804,448.69|40,314,219.87|
|Including: Net profit achieved by combined partiesbefore the combinations|||
|Attributable to owners of the Company|47,579,255.05|41,573,653.74|
|Minority shareholders’ income|2,225,193.64|-1,259,433.87|
|VI. Earnings per share|--|--|
|(I) Basic earnings per share|0.0395|0.0345|
|(II) Diluted earnings per share|0.0395|0.0345|
|VII. Other comprehensive incomes|2,568,338.32|2,130,236.42|
|Including:Othercomprehensiveincomesitemsthatcannotbe reclassified as gains and losses in the subsequentaccounting periods|2,467,158.45|2,217,339.09|
|Other comprehensive incomes items that will bereclassified as gains and losses in the subsequentaccounting periods as relevant requirements are met|101,179.87|-87,102.67|
|VIII. Total comprehensive incomes|52,372,787.01|42,444,456.29|
|Attributable to owners of the Company|50,040,383.39|43,703,890.16|
|Attributable to minority shareholders|2,332,403.62|-1,259,433.87|

 Legal representative: Wu Siyuan Person-in-charge of the accounting work: Huang Zhiqiang Chief of the accounting division: Xu Youshan
6. Income statement of the Company for Jan.-Sept. 2014
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Sept. 2014|Jan.-Sept. 2013|
|I. Total sales|13,383,758,078.78|15,102,962,063.94|
|Less: cost of sales|12,000,413,762.42|13,284,240,803.60|
|Business taxes and surcharges|23,583,446.31|30,441,922.24|
|Distribution expenses|1,398,351,839.36|1,457,237,045.98|
|Administrative expenses|309,854,623.79|242,813,780.89|
|Financial costs|30,428,246.25|-173,124.91|
|Impairment loss|35,304,837.36|45,315,916.92|

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Add: gain/(loss) from change in fair value (“-”means loss)|||
|Gain/(loss) from investment (“-” means loss)|260,851,094.05|21,115.80|
|Including:incomeforminvestmentonassociatesand joint ventures|-2,175,501.89||
|II. Business profit (“-” means loss)|-153,327,582.66|43,106,835.02|
|Add: non-business income|112,639,833.40|146,897,833.75|
|Less: non-business expense|7,236,599.91|5,947,066.99|
|Including:lossfromnon-currentassetdisposal|2,688,032.04|3,118,103.04|
|III. Total profit (“-” means loss)|-47,924,349.17|184,057,601.78|
|Less: income tax expense|-11,323,255.95|45,716,422.13|
|IV. Net profit (“-” means loss)|-36,601,093.22|138,341,179.65|
|V. Earnings per share|--|--|
|(I) Basic earnings per share|-0.0300|0.1150|
|(II) Diluted earnings per share|-0.0300|0.1150|
|VI. Other comprehensive income|101,179.87|-87,102.67|
|Including: Other comprehensive incomes items thatcannot be reclassified as gains and losses in thesubsequent accounting periods|0.00|0.00|
|Other comprehensive incomes items that will bereclassified as gains and losses in the subsequentaccountingperiods asrelevantrequirementsare met|101,179.87|-87,102.67|
|VII. Total comprehensive income|-36,499,913.35|138,254,076.98|

 Legal representative: Wu Siyuan Person-in-charge of the accounting work: Huang Zhiqiang Chief of the accounting division: Xu Youshan
7. Consolidated cash flow statement for Jan.-Sept. 2014
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Sept. 2014|Jan.-Sept. 2013|
|I. Cash flows from operating activities:|||
|Cash received from sale of commodities andrendering of service|12,555,098,512.73|13,942,683,102.29|
|Net increase of deposits from customers and duesfrom banks|||
|Net increase of loans from the central bank|||
|Net increase of funds borrowed from otherfinancial institutions|||
|Cash received from premium of original insurancecontracts|||
|Net cash received from reinsurance business|||
|Net increase of deposits of policy holders andinvestment fund|||
|Net increase of disposal of tradable financialassets|||

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Cashreceivedfrom interest,handlingcharges andcommissions|||
|Net increase of intra-group borrowings|||
|Net increase of funds in repurchase business|||
|Tax refunds received|358,329,202.50|330,667,945.66|
|Other cash received relating to operatingactivities|235,861,761.39|271,528,552.11|
|Subtotal of cash inflows from operating activities|13,149,289,476.62|14,544,879,600.06|
|Cash paid for goods and services|9,380,348,724.96|8,819,908,840.86|
|Net increase of customer lendings and advances|||
|Net increase of funds deposited in the centralbank and amount due from banks|||
|Cash for paying claims of the original insurancecontracts|||
|Cash for paying interest, handling charges andcommissions|||
|Cash for paying policy dividends|||
|Cash paid to and for employees|1,323,467,590.83|1,255,507,234.76|
|Various taxes paid|563,998,566.46|1,514,126,665.13|
|Other cash payment relating to operatingactivities|926,764,281.16|1,119,807,687.01|
|Subtotalofcashoutflowsfromoperatingactivities|12,194,579,163.41|12,709,350,427.76|
|Net cash flows from operating activities|954,710,313.21|1,835,529,172.30|
|II. Cash flows from investing activities:|||
|Cash received from withdrawal of investments|80,177,238.14|15,137,680.00|
|Cash received from return on investments|142,274,404.64|3,045,900.17|
|Net cash received from disposal of fixed assets,intangible assets and other long-term assets|8,486,488.23|29,604,684.18|
|Net cash received from disposal of subsidiariesor other business units|238,782,351.98|20,818,708.75|
|Other cash received relating to investingactivities|1,202,472,043.31||
|Subtotal of cash inflows from investing activities|1,672,192,526.30|68,606,973.10|
|Cash paid to acquire fixed assets, intangibleassets and other long-term assets|698,773,238.21|221,418,555.64|
|Cash paid for investment|25,623,300.00||
|Net increase of pledged loans|||
|Net cash paid to acquire subsidiaries and otherbusiness units|||
|Other cash payments relating to investingactivities|1,565,183,497.35||
|Subtotalofcashoutflowsfrominvestingactivities|2,289,580,035.56|221,418,555.64|
|Net cash flows from investing activities|-617,387,509.26|-152,811,582.54|
|III. Cash Flows from Financing Activities:|||
|Cash received from capital contributions|2,800,000.00||
|Including: Cash received from minorityshareholder investments by subsidiaries|2,800,000.00||
|Cash received from borrowings|2,981,063,581.11|3,748,968,680.44|
|Cash received from issuance of bonds|||
|Other cash received relating to financingactivities|29,200,869.52|1,137,986,353.39|
|Subtotal of cash inflows from financing activities|3,013,064,450.63|4,886,955,033.83|

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Repayment of borrowings|2,741,806,676.36|5,127,267,806.62|
|Cashpaidfor interestexpensesand distributionof dividends or profit|84,152,056.20|100,322,810.55|
|Including: dividends or profit paid bysubsidiaries to minority shareholders|||
|Other cash payments relating to financingactivities|598,450,810.48|511,026,566.30|
|Sub-total of cash outflows from financingactivities|3,424,409,543.04|5,738,617,183.47|
|Net cash flows from financing activities|-411,345,092.41|-851,662,149.64|
|IV. Effect of foreign exchange rate changes on cashand cash equivalents|9,106,902.07|18,504,467.98|
|V. Net increase in cash and cash equivalents|-64,915,386.39|849,559,908.10|
|Add: Opening balance of cash and cashequivalents|1,771,489,421.21|824,043,169.37|
|VI. Closing balance of cash and cash equivalents|1,706,574,034.82|1,673,603,077.47|

 Legal representative: Wu Siyuan Person-in-charge of the accounting work: Huang Zhiqiang Chief of the accounting division: Xu Youshan
8. Cash flow statement of the Company for Jan.-Sept. 2014
Prepared by Konka Group Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Sept. 2014|Jan.-Sept. 2013|
|I. Cash flows from operating activities:|||
|Cash received from sale of commodities andrendering of service|9,534,307,204.66|10,873,897,439.73|
|Tax refunds received|172,815,986.06|247,594,244.97|
|Other cash received relating to operatingactivities|357,621,689.04|189,761,400.68|
|Subtotal of cash inflows from operating activities|10,064,744,879.76|11,311,253,085.38|
|Cash paid for goods and services|7,404,978,331.51|5,996,294,072.12|
|Cash paid to and for employees|729,796,739.00|698,252,961.51|
|Various taxes paid|236,222,067.20|1,171,595,372.06|
|Other cash payment relating to operatingactivities|893,363,473.32|959,520,488.69|
|Subtotalofcashoutflowsfromoperatingactivities|9,264,360,611.03|8,825,662,894.38|
|Net cash flows from operating activities|800,384,268.73|2,485,590,191.00|
|II. Cash flows from investing activities:|||
|Cash received from retraction of investments|301,267,191.25|20,818,708.75|
|Cash received from return on investments|13,460,524.61|13,570,488.72|
|Net cash received from disposal of fixed assets,intangible assets and other long-term assets|7,557,428.23|22,527,686.18|
|Net cash received from disposal of subsidiariesor other business units|||
|Other cash received relating to investingactivities|1,202,472,043.31|30,000,000.00|
|Subtotal of cash inflows from investing activities|1,524,757,187.40|86,916,883.65|
|Cash paid to acquire fixed assets, intangibleassets and other long-term assets|568,075,101.35|111,745,964.46|
|Cash paid for investment|12,523,300.00||
|Net cash paid to acquire subsidiaries and otherbusiness units|||

ReportfortheThirdQuarterof2014ofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Other cash payments relating to investingactivities|1,646,000,000.00|140,000,000.00|
|Subtotalofcashoutflowsfrominvestingactivities|2,226,598,401.35|251,745,964.46|
|Net cash flows from investing activities|-701,841,213.95|-164,829,080.81|
|III. Cash Flows from Financing Activities:|||
|Cash received from capital contributions|||
|Cash received from borrowings||142,130,800.00|
|Cash received from issuance of bonds|||
|Other cash received relating to financingactivities|353,481,347.13|1,137,986,353.39|
|Subtotal of cash inflows from financing activities|353,481,347.13|1,280,117,153.39|
|Repayment of borrowings||2,610,797,519.55|
|Cashpaidforinterestexpensesanddistributionof dividends or profit|11,854,357.13|70,127,386.19|
|Other cash payments relating to financingactivities|595,599,703.87|509,344,082.83|
|Sub-total of cash outflows from financingactivities|607,454,061.00|3,190,268,988.57|
|Net cash flows from financing activities|-253,972,713.87|-1,910,151,835.18|
|IV. Effect of foreign exchange rate changes on cashand cash equivalents|-2,603,210.17|5,922,919.95|
|V. Net increase in cash and cash equivalents|-158,032,869.26|416,532,194.96|
|Add: Opening balance of cash and cashequivalents|1,117,689,643.16|365,891,615.75|
|VI. Closing balance of cash and cash equivalents|959,656,773.90|782,423,810.71|

 Legal representative: Wu Siyuan Person-in-charge of the accounting work: Huang Zhiqiang Chief of the accounting division: Xu Youshan
II. Audit report
Is this report audited?
□ Yes√ No
This report is not audited.
Chief of the Board of Directors: Wu Siyuan Konka Group Co., Ltd.
Board of Directors
28 Oct. 2014