2013AnnualReportofKonkaGroupCo.,Ltd.
KONKA GROUP CO., LTD.
2013 ANNUAL REPORT
2014-13
April 2014
2013AnnualReportofKonkaGroupCo.,Ltd.
Section I. Important Reminders, Catalogue& Explanation
The Board of Directors, the Supervisory Committee, directors, supervisors and senior management staff of Konka Group Co., Ltd. (hereinafter referred to as “the Company”) warrant that this report is factual, accurate and complete without any false record, misleading statement or material omission. And they shallbe jointlyand severally liablefor that.
All directors attended theboard session for reviewing thisreport.
TheCompany’s profit distribution preplan upon review and approval of this board session: Based on the total shares of the Company as at 31 Dec. 2013, a cash dividend of RMB 0.10 (tax included) will be distributed for every 10 shares held by shareholders. No bonus shares will be granted and no capital reservewill beturned intoshare capital.
WuSiyuan, company principal,Yang Rong, chief of the accounting work, and XuYoushan, chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report enclosed in this report is factual, accurate and complete.
The future plans and some other forward-looking statements involved in this report shall not be considered as virtual promises of the Company to investors. And investors are kindly reminded to pay attention topossiblerisks.
This report is prepared in both Chinese and English. Should there be any understanding discrepancy between thetwo versions, theChineseversion shallprevail.
2013AnnualReportofKonkaGroupCo.,Ltd.
Catalogue
2013Annual Report............................................................................................................................1 Section I. Important Reminders, Catalogue&Explanation..........................................................2 Section II. Company Profile..............................................................................................................7 SectionIII.Accouonting& Business Highlights..............................................................................9 Section IV.Report oftheBoard ofDirectors.................................................................................12 SectionV.SignificantEvents...........................................................................................................42 SectionVI.Changein Shares&Shareholders..............................................................................63 SectionVII. Directors, Supervisors,SeniorManagementStaff& Employees...........................69 SectionVIII.Corporate Governance..............................................................................................79 Section IX. Internal Control............................................................................................................90 Section X. Financial Report.............................................................................................................92 Section XI. DocumentsAvailableforReference..........................................................................262
2013AnnualReportofKonkaGroupCo.,Ltd.
Explanation
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|-|-|-|
|Term|Refersto|Contents|
|TelecommunicationTechnology|Refersto|Shenzhen Konka Telecommunications Technology Co.,Ltd.|
|Video & Communication SystemsEngineering|Refersto|Shenzhen Konka Video & Communication SystemsEngineeringCo.,Ltd.|
|PrecisionMold|Refersto|ShenzhenKonkaPrecisionMoldManufacturingCo.,Ltd.|
|KonkaHouseholdAppliances|Refersto|ShenzhenKonkaHouseholdAppliancesCo.,Ltd.|
|InformationNetwork|Refersto|ShenzhenKonkaInformationNetworkCo.,Ltd.|
|PlasticProducts|Refersto|ShenzhenKonkaPlasticProductsCo.,Ltd.|
|Shushida|Refersto|ShenzhenShushidaElectronicCo.,Ltd.|
|FittingsTechnology|Refersto|ShenzhenKonkaElectronicFittingsTechnologyCo.,Ltd.|
|MudanjiangAppliances|Refersto|MudanjiangArcticOceanAppliancesCo.,Ltd.|
|ShanxiKonka|Refersto|ShanxiKonkaElectronicCo.,Ltd.|
|ChongqingKonka|Refersto|ChongqingKonkaElectronicCo.,Ltd.|
|ChongqingElectronic|Refersto|ChongqingKonkaAutomotiveElectronicCo.,Ltd.|
|ChongqingQingjia|Refersto|ChongqingQingjiaElectronicsCo.,Ltd.|
|AnhuiKonka|Refersto|AnhuiKonkaElectronicCo.,Ltd.|
|AnhuiHouseholdAppliances|Refersto|AnhuiKonkaHouseholdAppliancesCo.,Ltd.|
|ChangshuKonka|Refersto|ChangshuKonkaElectronicCo.,Ltd.|
|KunshanKonka|Refersto|KunshanKonkaElectronicCo.,Ltd.|
|DongguanKonka|Refersto|DongguanKonkaElectronicCo.,Ltd.|
|DongguanPacking|Refersto|DongguanKonkaPackingMaterialsCo.,Ltd.|
|DongguanMouldPlastic|Refersto|DongguanKonkaMouldPlasticCo.,Ltd.|
|BoluoKonka|Refersto|BoluoKonkaPCBCo.,Ltd.|
|BoluoPrecision|Refersto|BoluoKonkaPrecisionTechnologyCo.,Ltd.|
|NanhaiInstitute|Refersto|Konka(Nanhai)DevelopmentCenter|
|HongKongKonka|Refersto|HongKongKonkaCo.,Ltd.|
|Konka Household AppliancesInvestment|Refersto|Konka HouseholdAppliances Investment & DevelopmentCo.,Ltd.|
|Konka Household AppliancesInternationalTrading|Refersto|Konka Household Appliances International Trading Co.,Ltd.|
|KonkaAmerica|Refersto|KonkaAmerica,Inc.|
|KonkaEurope|Refersto|Konka(Europe)Co.,Ltd.|
|KunshanRealEstate|Refersto|Konka(Kunshan)RealEstateInvestmentCo.,Ltd.|
|Xutongda|Refersto|DongguanXutongdaMouldPlasticCo.,Ltd.|
|KonkaOptoelectronic|Refersto|ShenzhenKonkaOptoelectronicTechnologyCo.,Ltd.|
|Wankaida|Refersto|ShenzhenWankaidaScienceandTechnologyCo.,Ltd.|
|KunshanKangsheng|Refersto|KunshanKangshengInvestmentDevelopmentCo.,Ltd.|
|AnhuiTongchuang|Refersto|Anhui Konka Tongchuang Household Appliances Co.,Ltd.|
|IndonesiaKonka|Refersto|IndonesiaKonkaElectronicsCo.,Ltd.|
|ShushidaLogistics|Refersto|ShenzhenShushidaLogisticsServiceCo.,Ltd.|
|BeijingKonkaElectronic|Refersto|BeijingKonkaElectronicCo.,Ltd.|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|KunshanJielunte|Refersto|KunshanJielunteMouldPlasticCo.,Ltd.|
|WuhanJielunte|Refersto|WuhanJielunteMouldPlasticCo.,Ltd.|
|ChuzhouJielunte|Refersto|ChuzhouJielunteMouldPlasticCo.,Ltd.|
|SZSE|Refersto|ShenzhenStockExchange|
|CSRCShenzhenBureau|Refersto|Shenzhen Bureau of China Securities RegulationCommission|
|Yuan, Ten thousand Yuan, OneHundredMillionYuan|Refersto|RMB Yuan, RMB Ten thousand, RMB One HundredMillionYuan|

2013AnnualReportofKonkaGroupCo.,Ltd.
Reminder of Major Risks
I. Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn have been designated by the Company as the media for information disclosure. All information of the Company shall be subject to what is disclosed by the Company on the said media. And Investors are kindly reminded to pay attention to possibleinvestment risks.
II. The Company has described in detail possible risks in this report. Please refer to the possible risks and countermeasures in the discussion and analysis on theCompany’s future development in “Section IV.Report of theBoard of Directors”.
2013AnnualReportofKonkaGroupCo.,Ltd.
Section II. Company Profile
I.Company information
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|-|-|-|-|
|Stockabbreviation|SKJA,SKJB|Stockcode|000016,200016|
|Stock abbreviation afterchange(ifany)|Naught|||
|Stock exchange listedwith|ShenzhenStockExchange|||
|Chinese name of theCompany|康佳集团股份有限公司|||
|Abbr. of the Chinesename of the Company(ifany)|康佳集团|||
|EnglishnameoftheCompany(ifany)|KONKAGROUPCO.,LTD|||
|Abbr.oftheEnglishnameoftheCompany(ifany)|KONKAGROUP|||
|Legal representative oftheCompany|WuSiyuan|||
|Registeredaddress|OverseasChineseTown,NanshanDistrict,Shenzhen,GuangdongProvince,China|||
|Postal code for theregisteredaddress|518053|||
|Officeaddress|OverseasChineseTown,NanshanDistrict,Shenzhen,GuangdongProvince,China|||
|Postal code for theofficeaddress|518053|||
|Internet website of theCompany|www.konka.com|||
|Emailaddress|szkonka@konka.com|||

II. Contact us
||||
|-|-|-|
||CompanySecretary|SecuritiesAffairsRepresentative|
|Name|XiaoQing|WuYongjun|
|Contactaddress|Secretariat to the Board ofDirectors, Konka Group Co., Ltd.,Overseas Chinese Town, NanshanDistrict, Shenzhen, GuangdongProvince,China|Secretariat to the Board ofDirectors, Konka Group Co., Ltd.,Overseas Chinese Town, NanshanDistrict, Shenzhen, GuangdongProvince,China|
|Tel.|0755-26608866|0755-26608866|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Fax|0755-26600082|0755-26600082|
|E-mail|szkonka@konka.com|szkonka@konka.com|

III. Aboutinformation disclosure andwhere thisreport isplaced
|||
|-|-|
|NewspapersdesignatedbytheCompanyforinformationdisclosure|SecuritiesTimes,etc.|
|InternetwebsitedesignatedbyCSRCfordisclosingthisreport|www.cninfo.com.cn|
|Wherethisreportisplaced|SecretariattotheBoardofDirectors,KonkaGroupCo.,Ltd.,OverseasChineseTown,NanshanDistrict,Shenzhen,GuangdongProvince,China|

IV.Changeof theregistered information
|||||||
|-|-|-|-|-|-|
||Registrationdate|Registrationplace|BusinesslicenseNo.|Registrationcodeoftaxation|Organizationalcode|
|Initialregistration|1Oct.1980|Shahe,Shenzhen,GuangdongProvince,China|GSQYS No.190806|440301618815578|-|
|Attheendofthereportingperiod|29Dec.2011|OverseasChinese Town,NanshanDistrict,Shenzhen,GuangdongProvince,China|440301501121863|440301618815578|618815578|
|Changesofthemainbusinesssincelisting(ifany)||Unchanged||||
|Changesofthecontrollingshareholder(ifany)||Unchanged||||

V. Otherinformation
TheCPAsfirmhiredbytheCompany:
|||
|-|-|
|Name|RuihuaCertifiedPublicAccountants|
|Officeaddress|4F,Tower2,No.16XisihuanzhongRoad,HaidianDistrict,Beijing,P.R.C.|
|Signingaccountants|LiuJianhua,TangQimei|

SponsorengagedbytheCompanytoconductsustainedsupervisionduringthereportingperiod
□Applicable√Inapplicable
FinancialconsultantengagedbytheCompanytoconductsustainedsupervisionduringthereportingperiod
□Applicable√Inapplicable
2013AnnualReportofKonkaGroupCo.,Ltd.
Section III. Accounting& Business Highlights
I.Major accounting data andfinancialindicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accountingpolicyorcorrectionofanyaccountingerror?
||||||
|-|-|-|-|-|
||2013|2012|Increaseordecreaseofthisyearoverlastyear(%)|2011|
|Operatingrevenue(RMBYuan)|20,006,736,878.82|18,337,861,657.29|9.10%|16,217,619,883.23|
|Net profit attributable toshareholders of theCompany(RMBYuan)|45,163,004.10|45,829,234.02|-1.45%|24,972,838.12|
|Net profit attributable toshareholders of theCompany afterextraordinary gains andlosses(RMBYuan)|-69,014,834.39|-54,088,758.02|-27.60%|-111,552,447.73|
|Net cash flows fromoperating activities (RMBYuan)|2,283,254,200.89|-359,244,914.58|-1735.57%|,370,486,165.70|
|BasicEPS(RMBYuan/share)|0.0375|0.0381|-1.57%|0.0207|
|DilutedEPS(RMBYuan/share)|0.0375|0.0381|-1.57%|0.0207|
|WeightedaverageROE(%)|1.11%|1.14%|-0.03%|0.62%|
||Asat31Dec.2013|Asat31Dec.2012|Increaseordecreaseofthisyear-endthanlastyear-end(%)|Asat31Dec.2011|
|Totalassets(RMBYuan)|15,743,284,335.49|16,562,917,198.06|-4.95%|16,906,453,313.31|
|Net assets attributable toshareholders of theCompany(RMBYuan)|4,080,458,151.63|4,043,591,538.85|0.91% 4|,009,723,963.82|

□Yes√No
II. Differences between accounting data underdomestic andoverseas accounting standards 1. Differences of net profit and net assets disclosed in financial reports prepared under international and
Chineseaccountingstandards
Unit:RMBYuan
2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
||NetprofitattributabletoshareholdersoftheCompany||NetassetsattributabletoshareholdersoftheCompany||
||2013|2012|Closingamount|Openingamount|
|AccordingtoChineseaccountingstandards|45,163,004.10|45,829,234.02|4,080,458,151.63|4,043,591,538.85|
|Itemsandamountsadjustedaccordingtointernationalaccountingstandards|||||

2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards
Unit:RMBYuan
||||||
|-|-|-|-|-|
||NetprofitattributabletoshareholdersoftheCompany||NetassetsattributabletoshareholdersoftheCompany||
||2013|2012|Closingamount|Openingamount|
|AccordingtoChineseaccountingstandards|45,163,004.10|45,829,234.02|4,080,458,151.63|4,043,591,538.85|
|Itemsandamountsadjustedaccordingtooverseasaccountingstandards|||||

3. Explain reasons for the differences between accounting data under domestic and overseas accounting standards
Nodifference
III.Items andamounts ofextraordinary gainsandlosses
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|2013|2012|2011|Note|
|Gains/losses on the disposal of non-current assets(including the offset part of the asset impairmentprovisions)|61,547,807.91|6,267,350.97 50|,838,279.57||
|Government grants recognized in the current84period, except for those acquired in the ordinarycourse of business or granted at certain quotas oramounts according to the government’s unifiedstandards|,343,548.07 79,|452,692.05 41,72|5,984.17||
|Gain/lossonnon-monetaryassetswap||71,191.44|||
|because of force majeure,such as naturaldisasters,animpairmentprovisionforeachassetready|-1,041,162.02||||
|Expenses on business reorganization, such asexpensesonstaffarrangements,integration,etc.|||-20,163,356.00||
|Gains and losses on change in fair value from|21,115.80|27,226,435.86|42,485,002.97||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||
|-|-|-|-|
|tradable financial assets and tradable financialliabilities, as well as investment income fromdisposal of tradable financial assets and tradablefinancialliabilitiesandfinancialassetsavailableforsales except for effective hedging related withnormalbusinessesoftheCompany||||
|Non-operating income and expense other than theabove|8,508,013.84|4,696,935.93|12,439,462.20|
|Othergainandlossitemsthatmeetthedefinitionofanextraordinarygain/loss|-1,369,748.77||37,723,217.44|
|Less:Incometaxeffects|31,336,650.82|11,106,708.03|25,328,935.86|
|Minorityinterestseffects(aftertax)|6,495,085.52|6,689,906.18|3,194,368.64|
|Total|114,177,838.49|99,917,992.04|136,525,285.85|

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 explanatoryannouncementasarecurrentgain/lossitem
□Applicable√Inapplicable
2013AnnualReportofKonkaGroupCo.,Ltd.
Section IV. Report of the Board of Directors
I.Overview
In 2013, under the continuous hits from the Internet, the color TV industry was in face of extensive competition from other fields, with various events aiming at overturning the industry. Concerning the refrigerator industry, the market capacity was stable, with coexistence and battles of major brands and counterfeits. And the cellphone industry continued to evolve rapidly, with products in a fast update and modes diversifying. Amid such complex competition, we followed the value operation strategy, worked as one man, rose to various challenges and pressures, successfully accomplished theoperating goals set for theyear,and achieved sustained and healthy development. For the year,the Company achieved sales revenues of RMB 20.007 billion ,up9.10%over last year, representing a new high of the sales revenues. And the net profit attributable to owners of the Company recorded RMB45.163million..
In 2013,the Company madethefollowing efforts in its operation and management:
(I)Anew stagefor refined management of businessoperation
In 2013, the Company promoted management and strengthened the following up, monitoring, analysis and improvement of business operation. By the conference mechanism of monthly operation analysis conference and special seminar, it had managed all business operations effectively and guaranteed the business to run smoothly on schedule, in order and with the rhythm by advanced research and preparation. By perfection and optimization of KPI assessment system, great attentions have been paid on business income and profits and amount receivable, inventory turnover, key area improve and other operation efficiency index. KPI index would be executed in the monthly operation to promote the business development in all directions and from multiple aspects. By continuous benchmarking management, the good management mode and performance index have been used as reference to promote the improvement of business unit management quality and performance. The promotion of refined management measures made the business monitoring more specific and practical and controlling mechanism more perfect, which promotes the growth ofall kinds ofbusiness.
(II) New achievements bythe innovativefinancial management
In 2013, the international financial market was not stable and domestic financing was more difficult. However, the Company still insisted the principle of “ensure supply, reduce cost and control risks” to master the financing and foreign exchange trend, expand financing channels, optimize financial regulation, createnew financing tools and reduce theyearly financing costs.
(III) Breakthroughs for theyoung brand communication
In 2013, the Company was devoted to create the rejuvenation of brand image and executed a series of brand marketing events based on new media: in April, the Company participated in sponsoring
2013AnnualReportofKonkaGroupCo.,Ltd.
the 17th Global Chinese SongAward Ceremony to promote the popularity and influence of Konka to young consumers bybrand placement; inAugust and September,the Company promoted the KKTV by large scale to expand the influence of Konka on the Internet; in October, the Company and China Youth Development Foundation started the large-scale public benefit activities with topic of “Journey of Heart- KonkaAccompanies you to go home” and donated 3 million home miles to help thousands of people go home for reunion, which was the longest, most popular and powerful public benefits activity and the most large-scale online activity. Other public benefits activities of caring stay-at-home children conducted by multiple media were very impressive and the Huanggang fellowship activity explored new marketing mode. All activities had improved the brand propagation force and brand image ofKonka.
(IV) Steady businessimprovement promoted bystrategy adjustment
Specific to the competition of mobile phone industry, the Company reviewed the operation mode of mobile phone business. On the basis of deep evaluation, it had changed traditional channel mode of domestic sales, canceled the subsidiaries, regions and commercial departments, changed the business mode from B2C to B2B, integrated organization structure, settled operation procedures, optimized personnel structure, concentrated more resources into export sales and operator businesses, detailed thedirection ofbusiness and coped with thefierce market competition.
Meanwhile, the white good application of the Company had changed the production line massively with the breakthroughs of differentiate product operation. It was to create the healthy brand image of refrigerator, settle with the system management model, improve system organization of business operation, adjust organizational structure and strengthen theguaranteeof product management. (V) Implementation ofhigh-quality information construction
The year of 2013 was the broadest and most important year to promote information construction for the Company.Within the Company, paperless office is promoted and electric approval is inducted to improve efficiency. In the financial system, the Company started the information transformation and foundation improvement of aging analysis of accounts payable, material price control, output optimization of functional center expenses and web ERP platform setup to standardize working procedures and improve efficiency. In the headquarters of multi-media department, the Company implemented budget control, financial platform, channel information management system and manufacture execution system (MES) to improve service efficiency of finance, promote purchasing-sales-stock management and the core competition of manufacturing system. In the subsidiaries, the Company had completed human resources management and shipment costing calculation of subsidiaries. Also, the Company had completed revision of theCompany’s website and standardized the wet site system to integrate the brand image communication and guarantee the reasonable andspecific network resources commitment.
(VI) Innovationin Company cultural development
In 2013, the Company carried on the traditions of Konka corporation culture to encourage innovation and value creation, create the sense of belonging and develop a series of cultural activities for the employee reunion, birthday and sports meeting which won great praise. Facing the new development trend, the Company re-organized and summarized the core values as well as inherited excellent cultures to improve the competitive power and strengthen development stress.
2013AnnualReportofKonkaGroupCo.,Ltd.
Konka had extracted the core philosophy of “honesty, sincerity, action and progress” to regularize the behaviors and concentrate minds.
Besides, in 2013, the Company had deeply developed the operation management, human resources, financial calculation, audit law works, industry research, logistics promotion and call service for continuous improvement ofthe Company.
II. Main business analysis
1.Overview
I. The operating revenues and the net profit attributable to owners of the Company both increased from 2012 dueto thefollowing reasons:
(1) In the color TV business, guided by the operating principle of “building the brand, enlarging the size, adjusting the structure and taping the potential”, we gave play to the synergy of research, production, supply and marketing; became a leader in the intelligent TV sector; and improved the operating results and quality through management reform and marketing innovation.
(II) As for the consumer appliance, export, cellphone, digital network, LED and household appliance business lines, we carried out innovation in marketing channels, products and the incentive mechanism, which resulted in healthy and stablegrowth in these businesslines.
II. Effects ofR&D input, technical innovation and independent innovation on our core competitiveness andpositionin theindustry in thereporting period
In the reporting period, we continued to enhance theR&D input and tried to lay a solid foundation for it to carry out product differentiation through constantly developing new products, studying new techniques, altering the existing equipment and continuously enriching the product varieties and series. Meanwhile, we constantly carried out technical innovation and rational suggestion to increase the production efficiency, improve the core competitiveness and continue to keep a leading position inthe industry.
2.Overview of the reporting period progress of development strategies and business plans disclosed in previous periods:
In 2013, in the fierce market competition, the Company had withstood all pressures to improve all abilities and make achievements. Highlights of main businessare as follows:
(1) Domestic sales of colortelevision
1. Outstanding business performance. Annual sales revenue was RMB 13.1 billion, increased with RMB 1.6billion.The brand image and market position had been improved.
2. Leading in market with excellent products. In 2013, the Company first started to upgrade the inner core, from six-core, eight-core to ten-core, from 2K to 4K and OLED. It insisted pioneering planning and layout to keep the lead of product and technologies. Meanwhile, the application platform had upgraded fromAndroid 4.0, 4.2 to 4.3, which enriched the contents and application of
2013AnnualReportofKonkaGroupCo.,Ltd.
intelligent television. Also, it had cooperated with IQIYI, LeTV and Baidu to maintain the leading position ofsoftware in market.
3. Initiative reversing trans-boundary. At the beginning of September, 2013, the Company first launched the online brand- KKTV, named “new sense revolution” to reversely integrate the trans-boundary competition of Internet. It is the first specialized bran for Internet television. The sales revenue oftwo models had exceeded RMB100million inthree months.
4. Rapid growth of electric business. The B2B and B2C businesses had been greatly improved for growth of sales and publicpraise.
5. Good practice of supply chain. Although there were uncertainties in market, the Company insisted to develop core strategic partners to guarantee supply. The annual turnover had been sped upand turnoverperiod shortened.Thepurchasing costs had been reduced.
6. Various sales promotion. From the beginning and the ending of the year, there was monthly activity with different topics, especially the 33rd anniversary celebration of promotion in May, which achieved the sales avenue of RMB 1 billion in ten days with the subsidy policy of energy conservation. Moreover, great achievements had been made in the project of energy conservation benefiting thepeople, displaying policy advantages and controllingpolicy risks.
(II) Export sales ofcolortelevision
1. Steady growth of business and leading profitability. With the opportunities of China Canton Fair and Brazil World Cup, export sales of color television withstood the appreciation of the RMB and disadvantages of losses caused by exchange rate. The annual sales revenue was stable as well as the profitability. The most important was that the profitability of export sales of color television is leading in theindustry.
2. Obvious improvement of product structure. Export sales of intelligent television had been leading for more than half a year. The television began to sell from October, 2013. In October, the sales revenue of large screen intelligent television had been more than 10,000, making great contributions ofgross profits. It promoted thesteady improvement and development ofexportsales.
3. Persistence in brand localization strategy. The Company would insist the development path of brand localizationand internationalization.
(III)Whitegoods business
In 2013, sales revenue of white goods had made great achievements. Meanwhile, the business structure of white goods had been organized to re-integrate the production line and move it to Chuzhou. The White Goods Research and Development Center had been founded in Chuzhou to integrate resources and improve efficiency.It was expect to change the operation situation and make new achievements in 2014.
(IV) Mobilephonebusiness
In 2013, the Communication Technology Company withstood great pressure and overcome difficulties to complete the transformation of business mode from B2C to B2B, clarifying the development orientation and integrate export sales and operation services. The Company had won the biddings of China Mobile and made the great achievements of sales revenue of 400,000 of intelligent mobilephones in thesinglemonth.
In 2013, the Communication Technology Company released the potential risks of business
2013AnnualReportofKonkaGroupCo.,Ltd.
development and laid foundation for future sustainabledevelopment.
(V) Fenkangmanufacturing business
In 2013, the production efficiency of all Fenkang had been improved.Among IE promotion projects, 42 assessed models completed the target of10% increase, UPPH value of 32-inch model increasedof15.4%, 42-inch increased with28.3%and 55-inch increased with62.8%.
Great achievements had been made for refined manufacture. The construction of five module production lines, two light guide plate production lines and one SMT production line had been completed to perfect theintegrated production layout.
(VI) Real estate business
Shuiyue Zhouzhuang began to sold with good sales prospect. It had been the benchmarking project of local high-end commercial real estate. The research and development building had been put into commercial operation andbrought cash returns forthe Company.
(VII) Emerging businesses
In 2013, emerging businesses made improvements. Overseas sales of digital network company made great breakthroughs with double growth, improvement of internal management and reduced inventory. The video company overfulfilled all tasks with great achievements of domestic and overseas orders as well as the internal management efficiency. The household electric appliance successfully promoted the self-developed KKpad induction cooker and KKcooker rice cooker. Boluo Konka strengthened the internal management and expanded overseas orders to lay the solid foundation and basicmanagement, make profits and change theoperation situation.
StatethereasonswhytheCompany’sactualbusinessperformanceis20%lowerorhigherthantheearningforecastforthereporting periodwhichhasbeenpubliclydisclosedearlier
□Applicable√Inapplicable
3.Revenues
Notes:
Owning to the following reasons, the operation revenues of the Company increased over the 2012 during the reportingperiod.
(I)The color TV business of the Company considered “build the brands, improve the scope, adjust the structure and dig the potency” as the operation policy and exerted the integrated synergistic effect of research, production, supply and sales, which became the leading manufacturer of smart TV, as well as revolted the management, innovated the marketing that realized the comprehensive enhance of the operation performance and the operation quality.
(II) The business of the Company such as the consumer appliances business, external sales business, cell phones business, digital network business, LED large-size screen monitors business and life electric appliances business executed the innovation of the channels, productions, incentive system and realized the healthy as well as steady improvement.
WhetherthephysicalsalesrevenueoftheCompanyislargerthanthatoftheservice
√Yes□No
Reasonsforanydatarepresentingover-30%YoYmovementofthedataabove:
2013AnnualReportofKonkaGroupCo.,Ltd.
□Applicable√Inapplicable
Majorordersonhand:
□Applicable√Inapplicable
SignificantchangeoradjustmentoftheCompany’sproductsorservicesduringthereportingperiod:
□Applicable√Inapplicable
Majorcustomers:
|||
|-|-|
|Totalsalestothetop5customers(RMBYuan)|3,743,686,942.08|
|Ratioofthetotalsalestothetop5customerstotheannualtotalsales(%)|18.71%|

4.Costs
Classifiedbyindustry:
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Industry|Item|2013||2012||YoY+/-(%)|
|||Amount|Proportioninoperatingcosts(%)|Amount|Proportioninoperatingcosts(%)||
|Electronics|Rawmaterials|15,793,215,821.68|94.79%|14,348,909,508.79|95.42%|-0.63%|
|Electronics|Laborcost|605,504,760.44|3.63%|527,599,977.96|3.51%|0.13%|
|Electronics|Depreciation|62,570,334.60|0.38%|55,789,737.38|0.37%|0.01%|

 Classifiedbyproduct:
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Product|Item|2013||2012||YoY+/-(%)|
|||Amount|Proportioninoperatingcosts(%)|Amount|Proportioninoperatingcosts(%)||
|ColorTVs|ColorTVs|13,072,644,058.73|79.41%|11,811,816,367.63|79.10%|0.31%|
|Cellphones|Cellphones|1,418,629,105.82|8.62%|1,217,298,414.04|8.15%|0.47%|
|Consumerappliances|Consumerappliances|1,204,755,092.16|7.32%|1,031,814,437.98|6.91%|0.41%|
|Other|Other|765,262,660.01|4.65%|871,370,004.48|5.84%|-1.19%|

 Notes:
ThecoststructureofthemainproductsoftheCompanywasbasicallyinaccordancewiththatof2012.
SituationofthemainlysupplieroftheCompany
tMajorsupplier
|||
|-|-|
|Totalpurchasetothetop5suppliers(RMBYuan)|7,598,812,054.58|
|Ratioofthetotalpurchasetothetop5supplierstotheannualtotalpurchase(%)|59.92%|

5.Expense
(I) cost of sales for the year 2013 is 2,548,603,146.99 yuan, an increase of10.01% over the previous year, which
2013AnnualReportofKonkaGroupCo.,Ltd.
wasmainlyare:thesalescostsforincomerose,,risingwages.
(II) Financial expenses for the year 2013 is -59,637,103.92 yuan, reducing the number of133.22% over the previous year, mainly due to:① Reduced interest expense due to decrease in long-term loans;② Increase the exchangeratefluctuationsofforeignexchangeearnings.
6.R&Dexpenses
Inthereportingperiod,theCompanycontinuedtoenhancetheR&Dinputandtriedtolayasolidfoundationforit tocarryoutproductdifferentiationthroughconstantlydevelopingnewproducts,studyingnewtechniques,altering the existing equipment and continuously enriching the product varieties and series. Meanwhile, it constantly carried out technical innovation and rational suggestion to increase the production efficiency, improve the core competitivenessandcontinuetokeepaleadingpositionintheindustry.
7.Cashflows
Unit:RMBYuan
|||||
|-|-|-|-|
|Item|2013|2012|YoY+/-(%)|
|Sub-totalofcashinflowsfromoperatingactivities|19,995,164,215.60|18,510,554,120.60|8.02%|
|Sub-totalofcashoutflowsfromoperatingactivities|17,711,910,014.71|18,869,799,035.18|-6.14%|
|Netcashflowfromoperatingactivities|2,283,254,200.89|-359,244,914.58|735.57%|
|Sub-totalofcashinflowsfrominvestingactivities|65,625,565.82|964,620,953.74|-93.20%|
|Sub-totalofcashoutflowsfrominvestingactivities|289,680,969.24|432,563,450.73|-33.03%|
|Netcashflowsfrominvestingactivities|-224,055,403.42|532,057,503.01|-142.11%|
|Sub-totalofcashinflowsfromfinancingactivities|5,819,964,097.43|13,241,294,203.82|-56.05%|
|Sub-totalofcashoutflowsfromfinancingactivities|6,956,511,999.28|13,227,320,418.72|-47.41%|
|Netcashflowfromfinancingactivities|-1,136,547,901.85|13,973,785.10|-8,233.43%|
|Cashandcashequivalents|947,446,251.84|177,592,118.67|433.5%|

Reasonsforanyover-30%YoYmovementofthedataabove:
√Applicable□Inapplicable
(I)Thesaleofgoodsandservicesreceivedincashfortheyear2013thenumberofoccurrence19,149,831,826.42yuan,anincrease of8.19% over the previous year, mainly due to:① 2012sales season in the second half of the 2013 season in the first half, the companysellssettlementmostlybankers'acceptanceswithinsixmonths,socashinflowmainlytothefirsthalfof2013.② current salesrevenueincreaseoverthepreviousperiod.
II)TaxRefundoccur year 2013 thenumber of 445,649,913.63yuan, anincrease of33.50%over thepreviousyear,mainlydue to: increasetheamountofembeddedsoftwareVATrefundreceived.
(III) Cash received from recovery occurred for the year 2013 the number of 13,072,260.00 yuan, an increase of391.93% over the previousyear,mainlydueto:recovertheinvestmentonthepartofassociatesandotherunits.
(IV)thedisposaloffixedassets,intangibleassetsandotherlong-termnetcashassetstorecoverthe2013annualoccurrencenumberof31,815,716.67yuan,anincreaseof86.12%overthepreviousyear,mainlydueto:thecurrentbatchprocessingofintangibleassets nolongerinuse.
Reasonsforabigdifferencebetweentheoperatingcashflowsandthenetprofit:
√Applicable□Inapplicable
2013AnnualReportofKonkaGroupCo.,Ltd.
Formorereasons,pleasenotesix,69cashflowstatement.
III. Breakdown ofmain business
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
||Operatingrevenue|Operatingcost|Grossprofitrate(%)|Increase/decreaseofoperatingrevenueoverlastyear(%)|Increase/decreaseofoperatingcostoverlastyear(%)|Increase/decreaseofgrossprofitrateoverlastyear(%)|
|Classifiedbyindustry:|||||||
|Electronics|19,754,547,950.84|16,461,290,916.72|16.67%|8.6%|10.24%|-1.24%|
|Classifiedbyproduct:|||||||
|ColorTVs|15,904,547,663.26|13,072,644,058.73|17.81%|10.22%|10.67%|-0.34%|
|Cellphones|1,551,294,607.93|1,418,629,105.82|8.55%|11.02%|16.54%|-4.33%|
|Consumerappliances|1,369,927,530.08|1,204,755,092.16|12.06%|6.96%|16.76%|-7.38%|
|Other|928,778,149.57|765,262,660.01|17.61%|-14.16%|-12.18%|-1.86%|
|Classifiedbyregion:|||||||
|China|15,775,639,484.85|12,808,035,030.73|18.81%|9.68%|12.6%|-2.1%|
|Othercountries|3,978,908,465.99|3,653,255,885.99|8.18%|4.52%|2.69%|1.64%|

 Where theCompany’s accounting standard of the main business data above changed during the reporting period, give the main businessdataofthelatestyearadjustedaccordingtotheaccountingstandardattheendofthereportingperiod:
□Applicable√Inapplicable
IV.Asset andliability analysis
1.Majorchangesofassetitems
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
||Asat31Dec.2013||Asat31Dec.2012||Proportionchange(%)|Explainanymajorchange|
||Amount|Proportionintotalassets(%)|Amount|Proportionintotalassets(%)|||
|Monetaryfunds|1,843,743,089.94|11.71%|1,728,946,511.11|10.44%|1.27%||
|Accountsreceivable|2,460,996,984.92|15.63%|1,975,605,771.07|11.93%|3.7%|increasedincomefortheperiodshouldbeincreasedreceivablebalances,HongKongKonkaextendedForeignsalesaccount|
|Inventories|3,582,669,024.26|22.76%|4,059,339,049.25|24.51%|-1.75%||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||
|-|-|-|-|-|-|
|Investingrealestate|237,986,524.12|1.51%|235,680,171.89|1.42%|0.09%|
|Long-termequityinvestment|446,155,499.42|2.83%|472,423,533.19|2.85%|-0.02%|
|Fixedassets|1,908,503,979.80|12.12%|1,887,836,271.02|11.4%|0.72%|
|Constructioninprogress|49,924,027.97|0.32%|50,682,893.85|0.31%|0.01%|

2.Majorchangesofliabilityitems
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
||2013||2012||Proportionchange(%)|Explainanymajorchange|
||Amount|Proportionintotalassets(%)|Amount|Proportionintotalassets(%)|||
|Short-termborrowings|5,239,069,764.48|33.28%|5,456,351,486.48|32.94%|0.34%||
|Long-termborrowings|5,000,000.00|0.03%|400,000,000.00|2.42%|-2.39%|Currentreturnoflong-termborrowings|

3.Assetsandliabilitiesmeasuredatfairvalue
Unit:RMBYuan
|||||||||
|-|-|-|-|-|-|-|-|
|Item|Openingamount|Gain/lossonfairvaluechangeinthereportingperiod|Cumulativefairvaluechangerecordedintoequity|Impairmentprovisionsinthereportingperiod|Amountpurchasedinthereportingperiod|Amountsoldinthereportingperiod|Closingamount|
|Financialassets||||||||
|3.Available-for-salefinancialassets|2,311,748.07|||1,369,748.77|||941,999.30|
|Investingrealestate|0.00||||||0.00|
|Totaloftheabove|2,311,748.07|||1,369,748.77|||941,999.30|
|Financialliabilities|0.00|0.00|0.00|0.00|||0.00|

DidanysignificantchangeoccurtotheattributeoftheCompany’smainassetmeasurementduringthereportingperiod?
□Yes√No
2013AnnualReportofKonkaGroupCo.,Ltd.
V. Corecompetitiveness analysis
TheCompany’s capability inR&D, the marketing network and manufacture constitutes its competitive edges. Through resource integration, the Company will vigorously try to make substantial breakthroughs in intelligent products, cloud computing, application of the internet technology, application software, etc. It will also try to enhancethestrengthandthicknessoftechnicalinnovationstoincreaseitsoverallcompetitiveness.
VI.Investment analysis
1.Investmentsinequitiesofexternalparties
(1)Investmentsinexternalparties
||||
|-|-|-|
|Investmentsinexternalparties|||
|Investmentamountin2013(RMBYuan)|Investmentamountin2012(RMBYuan)|+/-%|
|0|202,800,000.00|-5.56%|
|Particularsaboutinvestee|||
|Nameofinvestee|Mainbusiness|ProportionoftheCompany’sinvestmentintheinvestee’stotalequityinterests(%)|
|ChuzhouJielunte|Mouldandplasticbusiness|46.31%|
|WuhanJielunte|Mouldandplasticbusiness|46.31%|

 (2)Equity-holdingsinfinancialenterprises
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Enterprisename|Enterprisevariety|Initialinvestmentcost(RMBYuan)|Openingequity-holdings(share)|Openingequity-holdingratio(%)|Closingequity-holdings(share)|Closingequity-holdingratio(%)|Closingbookvalue(RMBYuan)|Gain/lossinthereportingperiod(RMBYuan)|Accountingtitle|Equitysource|
|NAUGHT|Other|0.00|0|0%|0|0%|0.00|0.00||NAUGHT|
|Total||0.00|0|--|0|--|0.00|0.00|--|--|

 (3)Securitiesinvestments
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Varietyofsecurities|Codeofsecurities|Nameofsecurities|Initialinvestmentcost(RMBYuan)|Numberofsharesheldatperiod-begin|Shareholdingpercentageatperiod-begin|Numberofsharesheldatperiod-end|Shareholdingpercentageatperiod-end|Closingbookvalue(RMBYuan)|Gain/lossforreportingperiod(RMB|Accountingtitle|Sourceofstock|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Yuan)|||
|Stock|000002|VankeA|2,311,748.07|117,310|0%|117,310|0%|941,999.30|-1,369,748.77|Available-for-salefinancialassets|Subscriptionforadditionallyissuedshares|
|Total|||2,311,748.07|117,310|--|117,310|--|941,999.30|-1,369,748.77|--|--|
|Disclosuredateoftheboard|||Inapplicable|||||||||
|Disclosuredateofthegeneralmeetingannouncementonapprovalofthesecuritiesinvestment(ifany)|||Inapplicable|||||||||

Explainequity-holdingsinotherlistedcompanies:
□Applicable√Inapplicable
2.Wealthmanagemententrustment,derivativeinvestmentsandentrustmentloans
(1)Wealthmanagemententrustment
Unit:RMBTenThousandYuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Nameoftrustee|Relation|Related-partytransactionornot|Productvariety|Amountentrusted|Beginningdate|Endingdate|Paymentdetermination|Principalactuallyrecovered|Impairmentprovision(ifany)|Predictedgain|Actualgain/lossinreportingperiod|
|NAUGHT|NAUGHT|No|NAUGHT|0|||NAUGHT|0|0|0|0|
|Total||||0|--|--|--|0|0|0|0|
|Sourceoftheentrustedfunds||||Inapplicable||||||||
|Cumulativeoverdueprincipalsandgains||||0||||||||
|Situationoflawsuits(ifapplicable)||||Inapplicable||||||||
|Disclosuredateoftheboard||||Inapplicable||||||||
|Disclosuredateofthegeneralmeetingannouncementonapprovalofthewealthmanagementinvestment(ifany)||||Inapplicable||||||||

(2)Derivativeinvestments
Unit:RMBTenThousandYuan
2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Operator|Relation|Related-partytransactionornot|Typeofderivativeinvestment|Initialinvestmentamount|Beginningdate|Endingdate|Openinginvestmentamount|Impairmentprovision(ifany)|Closinginvestmentamount|ProportionoftheclosinginvestmentamountintheCompany’sclosingnetassets(%)|Actualgain/lossinreportingperiod|
|NAUGHT|NAUGHT|No|NAUGHT|0|||0|0|0|0%|0|
|Total||||0|--|--|0|0|0|0%|0|
|Capitalsourceforderivativeinvestment||||Inapplicable||||||||
|Situationoflawsuits(ifapplicable)||||Inapplicable||||||||
|||||Inapplicable||||||||
|Disclosure date of the board||||Inapplicable||||||||
|DisclosuredateofthegeneralmeetingAnalysis on risks and control measuresof derivative products held in thereporting period (including but notlimited to market risk, liquidity risk,creditrisk,operationrisk,lawrisk,etc.)||||Inapplicable||||||||
|Changes of market prices or fair valuesin the reporting period of the investedderivatives.And the analysis on the fairvalue of the derivatives should includethespecificusemethodsandtherelevantassumptionsandparameters.||||Inapplicable||||||||
|Whether significant changes occurred tothe Company’s accounting policy andspecific accounting principles ofderivatives in the reporting periodcompared to the previous reportingperiod||||Inapplicable||||||||
|Specific opinion from independentdirectors on the Company’s derivativesinvestmentandriskcontrol||||Inapplicable||||||||

2013AnnualReportofKonkaGroupCo.,Ltd.
(3)Entrustmentloans
Unit:RMBTenThousandYuan
|||||||
|-|-|-|-|-|-|
|Borrower|Relatedpartyornot|Amountofloan|Interestrate|Guarantororpawn|Usageofloanbyborrower|
|Anhui Konka Tongchuang Household AppliancesCo.,Ltd.|No|40,000|6%|Credit|Capitalturnover|
|Kunshan Kangsheng Investment Development Co.,Ltd.|No|40,000|6%|Credit|Capitalturnover|
|Total|--|80,000|--|--|--|
|Expanded,overduedperiodorlawsuitsevents(ifany)|Inapplicable|||||
|Solutionsofexpanded,overduedperiodorlawsuitsevents(ifany)|Inapplicable|||||
||Inapplicable|||||
|Disclosure date of the board announcementDisclosuredateofthegeneralmeetingannouncementapprovingtheentrustmentloans(ifany)|Inapplicable|||||

3.Useofraisedfunds
(1)Overviewoftheuseofraisedfunds
Unit:RMBTenThousandYuan
|||
|-|-|
|Totalraisedcapital|0|
|Totalraisedcapitalinputinthereportingperiod|0|
|Accumulativeraisedcapitalinput|0|
|Total raised capital of which theuse was changed inthereportingperiod|0|
|Accumulative raised capital of which the use waschanged|0|
|Proportionofaccumulativeraisedcapitalofwhichtheusewaschanged|0%|
|Overviewoftheuseofraisedfunds||
|Inapplicable||

(2)Projectspromisedtobeinvestedwithraisedfunds
Unit:RMBTenThousandYuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Projectsinvestedwithraisedcapitalaspromisedand|Projectchangedornot|Raisedcapitalinput|Investmentafter|Inputinthereporti|Accumulativeinput|Investmentprogres|Datewhenthe|Profitgeneratedin|Reachtheexpecte|Materialchange|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|investmentswithover-raisedcapital|(includingpartiallychanged)|aspromised|adjustment(1)|ngyear|uptotheperiod-end(2)|suptotheperiod-end(%)(3)＝(2)/(1)|projectreachestheexpectedusablecondition|thereportingperiod|dprofitornot|intheprojectfeasibilityornot|
|Projectsinvestedwithraisedcapitalaspromised|||||||||||
|Investmentsofover-raisedcapital|||||||||||
|Subtotalofinvestmentsofover-raisedcapital|--|0|0|0|0|--|--|0|--|--|
|Total|--|0|0|0|0|--|--|0|--|--|
|Reason for failing toreach scheduledprogress or projectedincome (explain oneproject by oneproject)|Inapplicable||||||||||
|Explanation onsignificant changesin feasibility ofprojects|Inapplicable||||||||||
|Amount,usageandusageprogressofover-raisedcapital|Inapplicable||||||||||
|Changeoftheimplementationlocationofanyraisedfundsinvestmentproject|Inapplicable||||||||||
|Adjustmentoftheimplementationmethodofanyraisedfundsinvestmentproject|Inapplicable||||||||||
|Advance input andexchange of anyraised fundsinvestmentproject|Inapplicable||||||||||
|Idleraisedcapitalfortemporarilysupplementing|Inapplicable||||||||||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||
|-|-|
|workingcapitalproject||
|Outstandingraisedfundsinprojectimplementationandreasons|Inapplicable|
|Usageanddispositionoftheraisedfundsfailedtobeused|Inapplicable|
|Existedproblemsorothersituationoftheusageanddisclosureoftheraisedfunds|Inapplicable|

(3)Changeofprojectsinvestedwithraisedfunds
Unit:RMBTenThousandYuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Projectafterchange|Projectbeforechange|Totalraisedfundsplannedtobeinputfortheprojectafterchange(1)|Actualinputforreportingperiod|Actualcumulativeinputbyperiod-end(2)|Investmentprogressuptotheperiod-end(%)(3)＝(2)/(1)|Datewhentheprojectreachestheexpectedusablecondition|Profitgeneratedinthereportingperiod|Reachtheexpectedprofitornot|Materialchangeintheafter-changeprojectfeasibilityornot|
|Naught|Naught|0|0|0|0%||0|||
|Total|--|0|0|0|--|--|0|--|--|
|Reasonsforchange,decision-makingprocedureandrelevantinformationdisclosure(explainoneprojectbyoneproject)|||Inapplicable|||||||
|Reason for failing to reachscheduled progress or projectedincome (explain one project by oneproject)|||Inapplicable|||||||
|Explanation on significant changesinfeasibilityofprojects|||Inapplicable|||||||

2013AnnualReportofKonkaGroupCo.,Ltd.
4.Analysistomainsubsidiariesandstock-participatingcompanies
Particularsaboutmainsubsidiariesandstock-participatingcompanies:
Unit:RMBYuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Companyname|Companyvariety|Industry|Mainproducts/services|Registeredcapital|Totalassets|Netassets|Operatingrevenues|Operatingprofit|Netprofit|
|ShenzhenRefondOptoelectronicsCo.,Ltd.|Jointstockcompany|Manufacture|ProductionandsaleofLED|RMB216,705,093.00|912,772,444.23|604,669,497.22|681,984,216.24|54,992,563.76|56,603,840.62|
|EnRayTekOptoelectronics(Shanghai)Co.,Ltd.|Jointstockcompany|Manufacture|ProductionandsaleofLED|USD50,000,000.00|495,473,608.84|248,336,962.81|90,297,290.72|-87,162,800.78|-56,691,497.61|
|ShenzhenKonkaTelecommunicationsTechnology Co.,Ltd.|Subsidiary|Manufacture|Productionandsaleofmobilecommunicationproducts&saleofmultimediaproducts|RMB120,000,000.00|648,864,491.58|-185,756,850.47|1,583,093,071.46|-95,526,745.98|-158,169,139.13|
|ShenzhenKonkaVideo &CommunicationSystemsEngineering Co.,Ltd.|Subsidiary|Manufacture|ProductionandsaleofLEDdisplayscreensandlightingproducts|RMB15,000,000.00|208,297,396.45|-574,178.35|135,985,015.90|-6,323,824.94|-3,059,872.21|
|ShenzhenKonkaPrecisionMoldManufacturing Co.,Ltd.|Subsidiary|Manufacture|Productionandsaleofplasticproductsandmolds|RMB40,000,000.00|271,143,092.93|79,351,005.40|169,114,864.81|10,159,030.34|8,933,344.48|
|AnhuiKonkaElectronic|Subsidiary|Manufacture|Productionandsaleofmultimedi|RMB140,000,000.00|537,567,033.17|280,040,750.37|3,939,291,643.07|17,496,540.48|38,984,451.16|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Co.,Ltd.|||aproducts|||||||
|KunshanKonkaElectronicCo.,Ltd.|Subsidiary|Manufacture|Productionandsaleofliquidcrystalmodulesandmultimediaproducts|RMB350,000,000.00|537,370,145.74|375,486,966.57|2,170,684,313.27|-21,400,224.54|-10,614,261.06|
|Dongguan KonkaElectronicCo.,Ltd.|Subsidiary|Manufacture|Productionandsaleofmultimediaproducts|RMB266,670,000.00|636,445,342.21|345,735,300.25|345,737,116.23|-19,407,183.40|-16,454,700.51|
|DongguanKonkaMouldPlasticCo.,Ltd.|Subsidiary|Manufacture|Productionandsaleofmouldandplasticproducts|RMB10,000,000.00|392,170,258.51|111,111,342.79|300,604,788.78|18,230,486.74|15,586,160.67|
|HongKongKonkaCo.,Ltd.|Subsidiary|Internationaltrade|Importandexportofelectro-mechanicalandelectronicproducts|HKD500,000.00|1,755,430,184.36|111,655,271.79|2,650,276,237.06|20,385,739.36|18,121,058.99|
|KonkaHouseholdAppliancesInvestment &Development Co.,Ltd.|Subsidiary|Investmentholding|Investment|HKD500,000.00|202,241,553.62|74,626,852.84|0.00|10,972,029.75|9,751,149.75|
|KonkaHouseholdAppliancesInternational|Subsidiary|Internationaltrade|Importandexportofelectronics|HKD500,000.00|4,195,176,697.76|30,980,077.59|5,351,879,357.36|67,866,400.07|67,866,400.07|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|TradingCo.,Ltd.||||||||||
|ShenzhenWankaidaScienceandTechnology Co.,Ltd.|Subsidiary|Softwaredevelopment|Developmentandmaintenanceofsoftwaretechnology|RMB10,000,000.00|199,627,766.71|186,208,142.89|81,606,540.00|47,676,981.16|47,714,730.38|
|KunshanKangshengInvestmentDevelopment Co.,Ltd.|Subsidiary|Realestate|Development,operationandinvestmentofrealestate|RMB350,000,000.00|725,187,797.99|311,565,838.87|0.00|-26,907,383.56|-15,460,762.29|
|AnhuiKonkaTongchuangHouseholdAppliances Co.,Ltd.|Subsidiary|Manufacture|Productionandsaleofrefrigerators,washingmachinesandotherhouseholdappliances|RMB180,000,000.00|932,171,618.70|49,396,856.95|1,215,898,069.11|-115,467,971.96|-98,930,900.84|

Explainparticularsaboutmainsubsidiariesandstock-participatingcompanies:
Subsidiariesacquiredordisposedduringthereportingperiod:
√Applicable□Inapplicable
|||||
|-|-|-|-|
|Nameofsubsidiary|Purposeforacquiringordisposingthesubsidiaryinthereportingperiod|Wayofacquiringordisposingthesubsidiaryinthereportingperiod|Influenceontheoverallproductionandbusinessperformance|
|Chongqing Konka ElectronicCo.,Ltd.|To further clarify thepositioning and businessrelation of the subordinatesubsidiary and increase theoperating efficiency of thecolorTVbusiness|Transferred through listing inanequityexchange|Isbenefitfortheincreasingofthecashflowandtheimprovingofthefinancialconditions|
|MudanjiangArcticOceanAppliancesCo.,Ltd.|Liquidationasthetermexpired|Planedtolistandtransferitsassetsinassetsandequityexchange|TherewassignificantestimatedinfluenceonthedevelopmentofthewholebusinessoftheCompanyowningtothecomparative|

2013AnnualReportofKonkaGroupCo.,Ltd.
||
|-|
|smallbusinessscope.|

Notes:AccordingtotheAnnouncementontheDissolvingandLiquidationoftheControlledSubsidiarieson6Jun. 2013 (Announcement No. 2013-14), the Company planed to set up the liquidation group with Mudanjiang State-owned Assets Investment Holding Co., Ltd, and executed liquidation for Mudanjiang Arctic Ocean Appliances Co., Ltd.After the audit of the MudanjiangAppliances Company and the evaluation of its assets, the Companyentirely packedwhole assets of theArctic OceanAppliances byseeking for the transferee through open listing in the Heilongjiang UnitedAssets and Equity Exchange, and at the same time transacted the write-off and liquidationofthe industryandcommerce andtaxaswellasdistributedtheassets etc.Butuptopresent,theabove assets were failed to be listed in the assets and equity exchange. So far there was no definite transferee and no confirmed counterparty and there was uncertainty of whether and when of the whole assets of Arctic Ocean Appliancescouldcompletethetransfer.
5.Significantprojectsinvestedwithnon-raisedfunds
Unit:RMBTenthousandYuan
|||||||
|-|-|-|-|-|-|
|Projectname|Totalplanedinvestment|Inputforthisperiod|Cumulativeactualinputasattheperiod-end|Projectprogress|Projectearnings|
|KunshanShuiyueZhouzhuangProject|200,000|15,826.02|56,307.09|28.00%|Theprojectwasintheinvestmentperiodandhadnotanyrevenueandprofit|
|Total|200,000|15,826.02|56,307.09|--|--|
|Querydateoftheassignedwebsiteofthedisclosureofthetemporaryannouncement(ifany)||6Jul.2010||||
|Queryindexoftheassignedwebsiteofthedisclosureofthetemporaryannouncement(ifany)||www.cninfo.com.cn||||

VII. Predict the operatingresults ofJan.-Mar. 2014
Warning ofpossiblelossorconsiderableYoYchangeof theaccumulated netprofit madeduringtheperiod-begin totheendof the nextreportingperiodaccordingtoprediction,aswellasexplanationsonthereasons:
□Applicable√Inapplicable
VIII. Entities controlled bytheCompany forspecial purposes
Naught
IX.OutlookoftheCompany’s future development
I.2014Industrytrendanalysis
2013AnnualReportofKonkaGroupCo.,Ltd.
2014Industrytrendanalysis
(I) In 2014, it predicts that sales of color television, refrigerator and mobile phone would decline. Due to the cancellation of subsidiary of color television, the sales trend would decrease first then increase, or increase first then decrease.There would be small growths for refrigerator.Potential market of mobile phone is huge, requiring evolution.MarketofSetTopBoxwouldbeaffectedbyInternettelevisionanditisnotprospective.
(II) Rapid and huge changes of product structure. The 4K, intelligent, large board, curved, and OLED color television would be the established moves. Intelligent, 4K and large board television would grow quickly. The refrigerator wouldbewithlargespace,severaldoors,side-by-sidecombination,noframe andhealthyconcept.4G would be the important influence factor for mobile phone with more new products but different structure. Therefore,thetotalsaleswouldbestablebutwithdifferentcontents.
(III) Fierce trans-boundarycompetitionwithdifferentcompetitors.Internetcompanieswouldstartthe competition of television screen, requiring more resources and competitors. They would possess different commercial logic andcompetitionmode,whichwouldbethreateningfortraditionaltelevisionmanufacturers.
(IV) Inthedownstreamdevelopment,theelectriccommercialenterpriseswouldgrowquicklywith relativelyslow speed but considerable profits. It would affect the traditional retail business from distribution divisions, price transparencyandlargecirculationofgoods.Urbanchannelsareoligarchstill.
(V) In the upstream, the production of panel would be expanded in 2014 to increase supply and bring great uncertaintiesofprice.
(VI) Traditional competitors. Although the Japanese type is not popular, it still has influence in some regions. Korean type could not lead the market, but it sill increases the pressure for Chinese manufacturers in global market.TherearefourmajorcompetitorsforKonkainChina.
II.2014operationplan
(I)Domesticsalesofcolortelevision
1. Under the premise of stable profitability, to maximize the scale, promote brand image, and accelerate the transformationwithInternettechnologiesandeconomy.
2.Toincreasethesenseofpresenceofthebrandandimprovebrandpopularity.
3. Topromote the KKTV and modern brands with creative business mode and incentive mechanism to cope with trans-boundaryimpactofInternetcompanies.
4.ToseekandstrengthenforeigncooperationfortheInternetandapplicationcontents.
(II)Exportsalesofcolortelevision
1.Tomakebreakthroughsforthesizewithleadingpositionofprofitability.
2.To strengthen the product development, keep suppression of competitors and support the improvement of sales structure.
3.Toexploittheadvantagesoffactory,bringoutthestrengthstomakeuptheweaknessandmaximizetheprofits. 4.Tofurther develop the internationalization path of benchmarking enterprises, explore brand internationalization andbrandlocalization.
(III)Whitegoodsbusine
1.Tofocusonprofitandbasicmanagement.
2. To construct the balance of prices, costs and expenses with profits, balance of gross profits and expense ratio andlong-termsustainabledevelopmentofwhitegoods.
3. To strengthen the overall basic management from budget, billing and settlement, asset control, and personnel disciplines without blindness or flaws; to construct the management system with performance assessment, encouragingsystemandpersonnelstructurefromcomprehensiveperspective.
4.Tostrengthenproductmanagementandconstructthefoundationoflong-termcompetitiveness.
2013AnnualReportofKonkaGroupCo.,Ltd.
5.Tostrengthen sales channel, extend coverage, enhancecontrolof allchannels by headquarter andguarantee the executionofallpoliciesandrequirements.
(IV)Mobilephonebusiness
1.Tofocusonprofitsandtransformation.
2.TotransformthebusinessmodefromB2CtoB2Bandconstructcorrespondingorganizationalsystem.
3.Tostrengthen research, development and engineering capabilities for B2B business.Tofollow up the advanced levelinquality,costsandspeed.Todevelopnewandinnovativeproductsinthemarket.
4.Tocultivatecorebusinessinoverseasmarketandpersonnelstructure.
5. To connect bonus with performance by incentive method and calculate personal bonus according to performance.
6.Tocontrolthetotalspendingbyindustrybenchmarkandimproveaverageperformance.
(V)Realestatebusiness
It is to promote all projects with profits at the core.All costs should be controlled to strengthen budget absolute andapprovaltoensureallworkcompletewithplansandcontrol.
(VI)Emergingbusiness
It is to reinforce external advantage resources for strategic cooperation, explore the reform of incentive mechanismandpromotethebreakthroughsofemergingbusiness.
III.Focalpointsin2014
(I)Productcompetitiveness
Konka is a product-based company. Product is the foundation for Konka and product competitiveness is the essencetogetprofitsandachievelong-termdevelopment.Productcompetitivenessisshownas:
1.
Quality engineering. There are two indexes for quality project: high gross profit rate and high profit amount. From the perspective ofmarket, the recognized, best-sold and valuable products would had good prices. Only the quality project would prove the effective Konka system and product-based corporation. Quality engineering requires the traction of quality targets to promote productplanning, development andmarketing with the target of bestsellersandhighvalues.
2. Full life cycle management. From the product planning, marketing, sales, delisting and after-sale services, the fulllifecycleofproductwouldbemanagedwithformalandstandardprocedures.
3. Product planning. It is to improve the systematic management of product planning, clarify boundary of work requirementsandquantizeindicatorsforperformanceappraisal.
4.Packagingdesign.Itistoproposeimprovementplan,beingdetailed,executableandpractical.
(II)Brandconstruction
1. Brand visibility. It is to integrate Internet events into brand promotion, exhibit brand on sales terminals and advertiseonthecountylow-priceplatformwithlargescale.
2. Brand consistency. “Refined product and wonderful life” would be the united promotion banner to implement CI/VI.
3. Social responsibility. By improving the social responsibilities, Konka would participate in public welfare establishmentsforpovertyreliefandenvironmentprotectiontoimprovesocialinfluence.
(III)Processreengineeringandinformationconstruction
1. To optimize procedures and reengineer process. By reorganize the system and highlighting the key points, it is to reorganize the procedure with maximum profits. By optimizing procedures, it would enhance the business operation efficiency; reduce time consumption, personnel, and capital occupation. By transforming procedures, it wouldstandardizeandfixtheengagementamongpeopleandbusinesses.
2. To fix procedures of information tools. It is to fix the information methods into system with fixed procedures.
2013AnnualReportofKonkaGroupCo.,Ltd.
Theinformationsystemwouldmaketheworkingprocedurestransparency,standardandvisible.
(IV)Inventorycontrol
It is to seek the good practice of benchmarking enterprises as well as daily refinement management to summarize current working procedures, seek the best suitable inventory management efficiency, and reduce inventory occupation by planning procedures, inventory settings, inventory accountability, settlement and accountingcalculation.。
(V)Innovationofincentivemechanism
Effective incentive mechanism would be constructed for small and emerging businesses with best efforts to mobilizetheenthusiasmandsubjectiveinitiativeofmanagersandemployees.
(VI)Internetspirit
Konka is not the Internet company, but should be used to the existence of Internet for foundation management. Anyway,theCompanyshouldswiftlyintegrateintotheInternet.
Moreover, Konka had actively promoted the safety management and production, quality system construction and quality control, Party-masses and corporate culture, discipline inspection and supervision, and integrity and honestytoensurethebusinesswoulddevelopsteadily.
All the above are focal work for the business development and operation management in this year. Besides, the Company would fight the way upward and make contributions for the whole strategic targets guided by reform mindsandcreativespirit.
IV.Capital needs, useplansandcapital sources
In order to realize operation targets of 2014, the Company was expected to need RMB 504,391,200 in 2014, mainly for fixed asset investment such as acquiring devices and equipments for production capacity increase, technologicalinnovationandnewproductdevelopment.
Detailsofthefixedassetinvestmentsfor2014areasfollows:
Unit:RMBTenthousandYuan
||||
|-|-|-|
|Businessinvestedwithfixedassets|Investmentamount|Proportion|
|ColorTV|25,946.89|51.44%|
|Consumerappliance|4.489.79|8.90%|
|Cellphone|1,995.58|3.96%|
|Realestate|13,996.93|27.75%|
|Other|4,009.93|7.95%|
|Total|50,439.12|100%|

The company will flexibly make use of all credit loan policies to increase available capitalscale. Meanwhile the company will enhance funds management, adopt active and effective measures to withdraw funds in time, and improvefundsallocationefficiency,soastosatisfythefundsdemandofthecompany.
V. Possible risk factors of adverse influences caused by future development strategies and operational targets
1.2014colorTVmarketwillfacewithrisksofthereducingofthesalesvolume
In 2014, the domestic color TV market will still be restricted by the influences of the overdraft of the market
requirements. Coupled with various uncertain factors such as the slow down of the macro-economic, money
shortage of the bank, depressed stock market, slow down of the increase speed of the real estate and the increase
2013AnnualReportofKonkaGroupCo.,Ltd.
of the inflation estimation, the consuming intention of the customers will reduce, especially the descending of the real estate market will fundamentally restrict the rigid demand of the home appliance consumption. Under the influences of the various negative factors, 2014 color TV market will face with the risks of the slow down of the increase speed.According to the data of the forecast of the Yee, in 2014, the sales volume of the domestic color TV market will reduced of1.9% over 2013 with the retail sales of1.6%. The data of the forecast of AVC also pointed out that, in 2014, the total amount of the domestic retail sales of China color TV market will reduce of4.5%over2013.
2.BusinesstransboundaryoftheInternetwillchangethetraditionalprofitablemodeoftheTVindustry
As the indispensable part of the Four-screen Integration, the smart TV is now becoming the focus chased by the manufacturers of the IT Internet, and also attracting them such as LeTV, QIY, Xiaomi and Lenovo into the color TVindustry.Theconcentrated entranceofthe InternetITenterprisesraised uptheripple of thecolorTVindustry. They not only successively promoted the advanced hardware products of the smart TV, but also frequently adopted the low-price strategy.What’s more, their whole industrial chain business system constructed of“Platform+content+terminatin+application”changed thetraditionalprofitablemodeofTVindustry.As thedeepen development of the Internet, if the color TV industry wanted to stand longer in the color TV market should carry outself-resolutionandexplorethenewprofitablemode.
3.Influencestoprofitabilitycausedbyincreasedcost
Inflation pressure has resulted in increased prices in manpower and raw materials, which would be influential for profitability.
The Company would pay attention to above risks and make adjustments according to different situations to controltherisksatminimumlevel.
X. Explanation by the Board of Directors and the Supervisory Committee about the “non-standard auditreport”issued by theCPAs firmforthereporting period
AnnualfinancialreportoftheCompanyholdscleanopinionontheauditreportreleasedbyCPAform.
XI. Explain change of the accounting policy, accounting estimate and measurement methods as compared with thefinancialreporting oflastyear
Comparedwith financialreportinlast year,accounting policy,estimate alteration andaccounting method haveno changes.
XII. Explain retrospective restatement due to correction of significant accounting errors in thereporting period
Nomajoraccountingmistakesneededretrospectiverestatementappearedforthereportingperiod.
XIII. Explain change of the consolidation scope as compared with the financial reporting of lastyear
(1) On 30 Oct. 2013, the Company disposed its60% equity of Chongqing Konka and completed the business registrationwhichisnotcombinedintotheconsolidatedscopesincethatday.
(2) On 17 Feb. 2013, the wholly-owned subsidiary--Precision Mould invested and set up the wholly-owned
2013AnnualReportofKonkaGroupCo.,Ltd.
subsidiary—ChuzhouJieluntewhichiscombinedintotheconsolidatedscopesincethatday.
(3) On 15 Apr. 2013, the wholly-owned subsidiary--Precision Mould invested and set up the wholly-ownedsubsidiary—WuhanJieluntewhichiscombinedintotheconsolidatedscopesincethatday.
XIV. Profitallocation anddividend distribution
Formulation, execution or adjustment of theCompany’s profit distribution policy, especially the cash dividend policy, during the reportingperiod
√Applicable□Inapplicable
The cash dividend policy of the Company is clearly stated in its Articles of Association, with explicit dividend standards and ratios, as well as sound decision-making procedures and mechanisms. Independent directors have faithfully performed their duties and performed their function well by giving minority shareholders opportunities toexpresstheiropinionanddemandsandeffectivelysafeguardingtheirlawfulinterests.TheCompanyhasstrictly executedthecashdividendpolicyin theArticlesofAssociation,andcashdividenddistribution oftheCompanyisinlinewiththeArticlesofAssociationandrelevantresolutionsoftheShareholders’GeneralMeeting.
According to the spirit of the CSRC Notice on Further Implementing Matters Related to Cash Dividend Distribution of Listed Companies (Zheng-Jian-Fa[2012] No. 37) and the CSRC Shenzhen Bureau Notice on Seriously Implementing the CSRC Notice on Further Implementing Matters Related to Cash Dividend Distribution of Listed Companies (Shen-Zheng-Ju-Gong-Si-Zi[2012] No. 43), taking into account its actual situation, the Company communicated with independentdirectors and some floating share holders on the topic of the planning for returns for shareholders and carried out special discussions in terms of the arrangements for returns for shareholders, profit distribution, especially how to improve the decision-making procedure andmechanismformattersinrelationtocashdividends.Meanwhile,itlistenedtominorityshareholders’opinionsand requirements via hotlines, fax, email, theCompany’s website, etc. so as to decide a proper decision-makingprocedureformattersinrelationtocashdividendsthatwasinlinewiththeCompany’sfuturedevelopment.Anda reasoning report was formed. According to the Reasoning Report on Matters in Relation to Returns for Shareholders,theCompanyreviseditsArticlesofAssociationandformulatedtheReturnforShareholderPlanning for the Coming Three Years (2012-2014) according to the profit distribution plan and its plans for the coming three years. Meanwhile, as required by the said Notice, the Company convened a board session and a general meeting, at which the Reasoning Report on Matters in Relation to Returns for Shareholders, the Return for Shareholder Planning for the Coming Three Years (2012-2014) and the Proposal on Revising the Articles of Association was reviewed and approved. In order to further listen to the opinions of minority shareholders, the voting on the Return for Shareholder Planning for the Coming Three Years (2012-2014) adopted both on-site votingandonlinevotingtoprotectlegalrightsandinterestsofminorityshareholders.
According to the requirements of the Listed Company Supervision Guidelines No. 3--Listed Company Cash Dividends issuedbyCSRC, andthe researchofthe 55thSession ofthe 7thBoardofDirectors heldon2Apr.2014, the Company decided to the revise the profit distribution policy stipulated by the Articles of Association. Thus further explicated the regulations such as the priority as well as the proportion of the cash bonus in the profit distribution, but the proposal still needed to summit to the General Meeting of Shareholders for revision and approval.
|||
|-|-|
|Specialexplanationofthecashdividendpolicy||
|Whether conformed withtheregulationsoftheArticlesof associationortherequirements oftheresolutionsoftheshareholders’meeting:|Yes|
|Whetherthedividendstandardandtheproportionweredefiniteandclear:|Yes|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||
|-|-|
|Whethertherelevantdecision-makingprocessandthesystemwerecomplete:|Yes|
|Whethertheindependentdirectoracteddutifullyandexertedtheproperfunction:|Yes|
|Whetherthemediumandsmallshareholdershadthechancestofullyexpresstheirsuggestionsandappeals,ofwhichtheirlegalinteresthadgainedfullyprotection:|Yes|
|Whethertheconditionsandtheprocessmettheregulationsandwastransparentoftheadjustmentoralteredofthecashdividendpolicy:|Yes|

Pre-planorplanforprofitdistributionandturningcapitalreserveintosharecapitalinrecent3years(includingthereportingperiod) 1. In 2013, the net profit attributable to owners of the Company was RMB 44,599,936.90 as audited and the retained profit was RMB 758,045,913.96. Based on the actual status and the requirement for long-term development of the Company, the Board of Directors proposed the annual profit distribution plan 2013, with detailsasfollows:
Based on theCompany’s total share capital of 1,203,972,704 shares as at the end of 2013, the Company distributedacashdividendofRMB 0.1(taxincluded)toevery 10shares.ThedistributedprofitsaggregatedRMB 12,039,727.04andtheretainedprofitwascarriedforwardintothenextyearfordistribution.
2. In 2012, the net profit attributable to owners of the Company was RMB 45,829,234.02 as audited and the retained profit was RMB 725,485,704.10. Based on the actual status and the requirement for long-term development of the Company and the review as well as the approval of the Board of Directors and the General MeetingofShareholders,theannualprofitdistributionplanin2012oftheCompany,withdetailsasfollows: Based on theCompany’s total share capital of 1,203,972,704 shares as at the end of 2012, the Company distributedacashdividendofRMB 0.1(taxincluded)toevery 10shares.ThedistributedprofitsaggregatedRMB 12,039,727.04andtheretainedprofitwascarriedforwardintothenextyearfordistribution.
3. In 2011, the net profit attributable to owners of the Company was RMB 24,972,838.12 as audited and the retained profit was RMB 709,679,408.84. Based on the actual status and the requirement for long-term development of the Company and the review as well as the approval of the Board of Directors and the General MeetingofShareholders,theannualprofitdistributionplanin2011oftheCompany,withdetailsasfollows: Based on theCompany’s total share capital of 1,203,972,704 shares as at the end of 2011, the Company distributedacashdividendofRMB 0.1(taxincluded)toevery 10shares.ThedistributedprofitsaggregatedRMB 12,039,727.04andtheretainedprofitwascarriedforwardintothenextyearfordistribution.
Cashdividendintherecentthreeyears
Unit:RMBYuan
|||||
|-|-|-|-|
|Dividendyear|Amountofcashdividend(includingtax)|Netprofitbelongingtoshareholdersofthelistedcompanyinconsolidatedstatementofdividendyear|Theratioaccountinginnetprofitwhichbelongstoshareholdersofthelistedcompanyinconsolidatedstatement(%)|
|2013|12,039,727.04|45,163,004.10|26.66%|
|2012|12,039,727.04|45,829,234.02|26.27%|
|2011|12,039,727.04|24,972,838.12|48.21%|

Althoughthecompanyobtainsprofitsandtheparentcompany’sundistributedprofitispositiveduringthereportingperiod,nocash
dividenddistributionpre-planisputforward.
□Applicable√Inapplicable
2013AnnualReportofKonkaGroupCo.,Ltd.
XV. Preplan for profit distribution and turning capital reserve into share capital in the reporting period
|||
|-|-|
|Bonustoevery10shares(shares)|0|
|Dividends to every 10 shares (shares) (taxincluded)|0.10|
|Equity base of the preplan for distribution(shares)|1,203,972,704|
|Totalofcashbonus(RMBYuan)(taxincluded)|12,039,727.04|
|Proportion of cash bonus in the total of profitdistribution(%)|100%|
|Cashdividendpolicy:||
|Other||
|Specificexplanationofpreplanforprofitdistributionorpreplanforturningcapitalreserveintosharecapital||
|Basedonthetotalsharecapitalon31Dec.2013,theCompanydistributedacashdividendofRMB0.10(taxincluded)toevery10sharesandbonusof0shares(taxincluded)andnocapitalizationofcapitalreserveswillbeconducted.||

XVI.Explanationofsocial responsibilities
The Company insists the principle of health, stability and sustainable development to benefit shareholders and employees and satisfy customers. In pursuit of economic profits and protection ofshareholders’ profits, the Company is active in protecting legal rights of debtors and employees, treating suppliers, customers and consumers in good faith, and participating in environmental protection and community establishment for harmoniousdevelopmentoftheCompanyandsociety.
(I)Toprotectrightsofshareholdersandcreditors
1.TheCompanyprotectsrightsofshareholders
(1) The Company insists protection of rights for all shareholders, especially equal status and legal rights for mediumandsmallshareholders,andmakeinsuranceofrightstobeinformed,participationandvote.
(2)TheCompanywouldperformallobligationsofinformationdisclosureto ensuretimely,accurateandcomplete informationandstrictlyexecuteconfidentialsystemofregistrarandinsiderinformationtoguaranteejustice. (3) The Company pays attention to repay to shareholders, and insists mutual development with investors. In the previous three years, the Company shares dividends with all shareholders. The Company strict executes dividend policiesregulated inArticles ofAssociation.Allcashdividendscomply with regulations inArticles ofAssociationandrequirementsinshareholders’conference.
2.TheCompanyprotectsrightsofcreditors
In full consideration of legal rights of creditors, the Company complies with strict business rules of credit
cooperationtoguaranteelegalrightsofcreditors.Nodamagesuponrightsofcreditorshappened.
2013AnnualReportofKonkaGroupCo.,Ltd.
(II)TheCompanyperformsresponsibilitiestosuppliersandcustomers
1.Itisdevotedtoimprovecustomerservicequality.
The Companyis insisting philosophyofcustomer orientationto strengthencustomer servicemanagement, service consciousnessforemployees,servicelevelsandtoprotectrightsforcustomers.Throughcustomerservicehot-line, fieldvisitandfollow-upservice,theCompanyhassetagoodcorporateimageforcustomers.
2.Behonesttosuppliers
Following the principle of integrity and mutually beneficial cooperation, the Company keeps good cooperative relations with suppliers at each level. The corporate principle is open, fair and impartial to standardizeprocurement,protectsuppliers’legalrightsandlaysolidfoundationforfurthercooperation.
(III)Beenthusiastictosocialandpublicwelfareundertakings
Based on the principle of appreciating and repaying the society, the Company has participated in all kinds of activities for public welfare, cooperated with society, undertaken social responsibilities actively and promoted harmoniousdevelopmentbetweenenterpriseandsociety.
(IV)Beresponsibleforemployees
The Company insists the principle of people orientation to improve working environment, promote occupational skills, provide opportunity and platform for development and growth and encourage self upgradation and realizationforemployees.Mutualimprovementforemployeesandenterprisecouldbeachieved.
1.Behonestandlaw-abidingtoprotectlegalrightsforemployees
The Company would strictly comply with laws and regulations in Labor Law and Labor Contract Law to sign labor contract with employees with fair treatment in employment, payment, promotion, training, demission and retirement. Also, the Company would pay all kinds of insurances and housing fund for employees. Regular physical examination would be organized for each year.Any problems found would require re-examination and consultationfromadoctor.
The Company would improve living quality; enhance cohesive force and sense of belongings through a series of safeguardmeasures.
2.Toprotectoccupationalhealthforemployees
The Company would establish and perfect training, safety assessment by security system to guarantee the safety and occupational health for employees. On the other hand, by promotion of the importance of safety, safety awareness would be rooted in the heart to make all employees abide by safety standards and fully play subjective initiativeinprotectingselfoccupationalsafetyandproductionsafety.
3.Topromoteoccupationalskillsbydiversifiedprofessionaltraining
2013AnnualReportofKonkaGroupCo.,Ltd.
The Company has always paid great attention on diversified training for employees. On the one hand, the Company would be meticulous in training of regular business and occupational skills and carry out all requirements positively to improve professional levels by normal training management. On the other hand, the Company would establish methods of self training platform, training instructor, theme training and lectures to provide colorful training activities. Besides the work, professional and comprehensive quality would be fully promoted.
(V)Beresponsibleforenvironment
The Company concerns about environmental changes and close relationships with environment by creating low carbon economy in technical innovation, from green manufacturing, green products to green industry circular economy. The Company would provide efforts in protecting global ecological environment. In June, 2012, subsidized products catalogue had been released jointly by National Development and Reform Commission, MinistryofIndustryandInformationandMinistryofFinance.
In the new year, the Company would undertake all social responsibilities by improving strategic management, sustainable development and enterprise economic efficiency. It would retribute all shareholders and protects legal rights for creditors and employees. To be honest to suppliers and customers, the Company would serve local economic development and participate in social public welfare activities and environment protection. It would undertake all responsibilities in many fields and make attributions to social, economic, and environmental sustainabledevelopmentforasocialismharmonioussociety.
Does the listed company or its subsidiaries belong to the heavily polluting industries stipulated by the environmental protection authoritiesofthecountry?
□Yes√No□Inapplicable
Doesthelistedcompanyoritssubsidiarieshaveanyothersignificantsocialsecurityproblems?
□Yes√No□Inapplicable
Any administrative punishment during the reporting period?
√Yes□No□Inapplicable
XVII.Researches, visits andinterviews received inthe reporting period
|||||||
|-|-|-|-|-|-|
|Timeofreception|Placeofreception|Wayofreception|Visitortype|Visitor|MaindiscussionandmaterialsprovidedbytheCompany|
|29Jan.2013|ConferenceRoom of theCompany|Fieldresearch|Institution|GalaxySecuritiesCo.,Ltd.|The situation of 2013color TV market, saleschannel of color TVbusiness, 2013 pricetrends of panels and theprogress of thetransformation andrenovation of the|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||
|-|-|-|-|-|-|
||||||headquartersfactoryland|
|4Feb.2013|ConferenceRoom of theCompany|Fieldresearch|Institution|ChinaInvestmentSecurities Co.,Ltd., GuangdongFortune OneInvestmentManagementCo.,Ltd.|The situation of 2013color TV market, saleschannel of color TVbusiness, the progress ofthe transformation andrenovation of theheadquarters factory landand the developmenttrendofOLEDpanels|
|26Feb.2013|ConferenceRoom of theCompany|Fieldresearch|Institution|CITIC SecuritiesCo., Ltd.,IndustrialSecurities Co.,Ltd., UBSSecurities Co.,Ltd.|The situation of 2013color TV market, saleschannel of color TVbusiness, 2013 pricetrends of panels, theprogress of thetransformation andrenovation of theheadquarters factory landand the situation of themobilephonebusiness|
|27Feb.2013|ConferenceRoom of theCompany|Fieldresearch|Institution|CCB PrincipalAssetManagementCo.,Ltd.|The situation of 2013color TV market, 2013pricetrendsofpanelsandthe situation of themobilephonebusiness|
|28Feb.2013|ConferenceRoom of theCompany|Fieldresearch|Institution|Yinhua FundManagementCo.,Ltd.,BeijingStarRockInvestmentManagementCo., Ltd., CITICSecurities Co.,Ltd., HaitongSecurities Co.,Ltd.|The situation of 2013color TV market, thesituation of the mobilephone business, saleschannel of color TVbusiness and thedevelopment trend ofOLEDpanels|
|21Mar.2013|ConferenceRoom of theCompany|Fieldresearch|Institution|ChangjiangSecurities Co.,Ltd., ShenzhenHarmony AssetManagementCo.,Ltd.|The progress of thetransformation andrenovation of theheadquarters factoryland, the operationstrategy of 2013 and theplan for solving the B|

2013AnnualReportofKonkaGroupCo.,Ltd.
||
|-|
|shares problems of theCompany|

2013AnnualReportofKonkaGroupCo.,Ltd.
Section V. Significant Events
I.Significantlitigations andarbitrations
□Applicable√Inapplicable
TherewerenosignificantlitigationsorarbitrationsfortheCompanyintheyear
II. Particularsonmedia’s queries
□Applicable√Inapplicable
Therewasnomedia’squeryduringthereportingperiod.
III. Particulars about the non-operating occupation of funds by the controlling shareholder andother related parties of theCompany
Unit: Ten Thousand Yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Nameofshareholderorrelatedparty|Timeofoccupation|Reasonforoccupation|Openingamount)|Newlyoccupiedamountinreportingperiod|Totalrepaidamountinreportingperiod|Closingamount|Expectedwayofrepayment|Expectedrepaidamount|Expectedtimeforrepayment(month)|
|NAUGH|NAUGH|NAUGH|0|0|0|0|Other|0|0|
|Total|||0|0|0|0|--|0|--|
|Proportionofthelatestperiodoftheclosingtotalamountintheauditednetassets(%)|||0%|||||||
|Relevantdecision-makingprocess|||Inapplicable|||||||
|Thenewlyincreasedshareholdersofthe current period and theexplanation of the reason,investigationofthepersoninchargeandtheplanedadoptingmeasuresofthe non-operating funds occupationsituationofitsaffiliatedenterprise|||Inapplicable|||||||
|Theexplanationofthereason,investigationofthepersoninchargeandtheplanedadoptingmeasuresofthenon-operatingfundsoccupationwhichwasunabletosettledasplanned|||Inapplicable|||||||
|Disclosureindexofthespecialaudit|||Inapplicable|||||||

2013AnnualReportofKonkaGroupCo.,Ltd.
||
|-|
|opinionofthefundsoccupationoftheCPA|

IV.Bankruptand reorganization events
TherewerenobankruptorreorganizationeventsfortheCompanyduringthereportingperiod.
V. Assettransactions
1.Acquisitionofassets
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Transactionpartyorultimatecontroller|Assetacquiredorboughtin|Transactionprice(RMBTenthousand)|Progress(Notes2)|InfluenceontheoperationoftheCompany(Notes3)|InfluenceonthegainsandlossesoftheCompany(Notes4)|RatioofthenetprofitcontributedbytheassettotheCompanytothetotalprofit(%)|Related-partytransactionornot|RelationshipbetweenthetransactionpartyandtheCompany(applicableforrelated-partytransactions)|Disclosuredate(Notes5)|Disclosureindex|
|NAUGHT|NAUGHT|0|Inapplicable|0|0|0%|No|Inapplicable||Inapplicable|

 2.Salesofassets
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Transactioncounterparty|Assetsold|Disposaldate|Transactionprice(RMB0’000)|NetprofitcontributedtotheCompanyfromtheperiod-begintothedisposaldate|Gainsandlossesarisingfromthesalesofassets(RMB0’000)|RatioofthenetprofitcontributedbytheassettotheCompanytothetotalprofit(%))|Pricingprinciple|Related-partytransactionornot|RelationshipbetweenthetransactionpartyandtheCompany(applicablefor|Whetherornottheownershipoftheassetinvolvedhasbeenfullytransferred|Whetherornotthecreditor’srightandliabilitiesinvolvedhavebeenfully|Disclosuredate|Disclosureindex|

2013AnnualReportofKonkaGroupCo.,Ltd.
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|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||(RMB0’000)|||||related-partytransactions)||transferred|||
|ChongqingMachinery&ElectronicHolding(Group)Co.,Ltd.|60%equityofChongqingKonkaElectronicCo.,Ltd.andcreditors’rightsorRMB15,593,431,830|20Jun.2013|8,499.15|76.39|ItwasbenefitfortheincreaseofthecashflowandimprovingthefinancialconditionsoftheCompany|34.83%|Publiclistedfortransfer|No|Inapplicable|Yes|Yes|30Aug.2013|http://www.cninfo.com.cn/information/companyinfo.html|
|MudanjiangArcticOceanAppliances|Physicalassetssuchashousesandbuildings,landuseright,equipmentsandinventories.|Unknown|Unknown||Owningtothecomparativelysmalloperationscale,itwasestimatedthatitwouldnothavesignifi|Unknown|Publiclistedfortransfer|No|Inapplicable|No|No|6Jun.2013|http://www.cninfo.com.cn/information/companyinfo.html|

2013AnnualReportofKonkaGroupCo.,Ltd.
||
|-|
|cantinfluenceonthewholebusinessdevelopment|

Notes 1.Announcement on the Progress of the Equity Transfer of the Controlling Subsidiary (No: 2013-22), http://www.cninfo.com.cn;
2.AnnouncementontheDissolvingandLiquidationoftheControllingSubsidiary(No:2013-14),http://www.cninfo.com.cn. Summaryofthesalesofassets
According to the Notice aboutDissolving andLiquidation of Holding Subsidiaries (Notice No: 2013-14) released on 6 June, 2013 by the Company, the Company is planned to set up the liquidation group with Mudanjiang State-Owned Assets Investment Holdings Co., Ltd. Liquidated Mudanjiang Arctic Ocean Electric Appliance Co., Ltd. in accordance with the legal procedures. After the audit and asset assessment of Arctic Ocean Electric ApplianceCo.,Ltd,alltheassets ofArctic OceanElectric ApplianceCo.,Ltdwouldbetreatedwhollybyseeking assignee listed on Heilongjiang United Assets and Equity Exchange and handled the business administration, tax write-off andclean-upanddistributionofproperty.Untilnow,theaboveassetshavenotbeenlistedonAssetsand Equity Exchange. At present, there are no clear assignees and transaction parties could not be determined. There are many uncertainties whether or when all assets of Arctic Ocean Electric Appliance Co., Ltd could be transferred.
3.Businesscombination
TherewasnobusinesscombinationfortheCompanyduringthereportingperiod.
VI.Particulars aboutthe implementation ofequity incentiveofthe Companyand its influence TherewasnoequityincentiveimplementedbytheCompanyuptotheendofthereportingperiod.
VII. Significantrelated-party transactions
1.Related-partytransactionsrelevanttoroutineoperation
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Relatedparty|Relationship|Typeoftherelated-party|Contentoftherelated-party|Pricingprincipleoftherelated-|Transactionprice|Transactionamount(RMB|Proportioninsamekindof|Settlementmethodofthe|SimilarTransactionmarket|Disclosuredate|Disclosureindex|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||transaction|transaction|partytransaction||Tenthousand)|transactions(%)|related-partytransaction|pricereceivable|||
|AnhuiHualiPackingCo.,Ltd.|Subsidiarycontrolled bytheprincipalshareholder|Purchasing rawmaterials fromrelatedparties|Purchasing thepackagingmaterials forcolorTVs|Agreedprice|Marketprice|3,647.3|0.61%|Incash|Inapplicable|27Apr.2013|www.cninfo.com.cn|
|HualiPacking(Huizhou)Co.,Ltd.|Subsidiarycontrolledbytheprincipalshareholder|Purchasing rawmaterials fromrelatedparties|Purchasingwater&electricity|Agreedprice|Marketprice|1,446.39|0.24%|Incash|Inapplicable|27Apr.2013|www.cninfo.com.cn|
|Huizhou HualiPackingCo.,Ltd.|Subsidiarycontrolledbytheprincipalshareholder|Purchasing rawmaterials fromrelatedparties|PurchasingthepackagingmaterialsforcolorTVs|Agreedprice|Marketprice|1.73|0%|Incash|Inapplicable|27Apr.2013|www.cninfo.com.cn|
|ShanghaiHualiPackingCo.,Ltd.|Subsidiarycontrolledbytheprincipalshareholder|Purchasing rawmaterials fromrelatedparties|PurchasingthepackagingmaterialsforcolorTVs|Agreedprice|Marketprice|1,098.73|0.18%|Incash|Inapplicable|27Apr.2013|www.cninfo.com.cn|
|ShanghaiOCTInvestment|Subsidiarycontrolledby|Purchasing rawmaterials from|Purchasingthepackaging|Agreedprice|Marketprice|107.67|0.8%|Incash|Inapplicable|27Apr.2013|www.cninfo.com.cn|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|DevelopmentCo.,Ltd.|theprincipalshareholder|relatedparties|materialsforcolorTVs|||||||||
|ShenzhenSeaviewO.cityHotelCo.,Ltd.|Subsidiarycontrolledbytheprincipalshareholder|Sellingtheproductstorelatedparties|Sellingliquidcrystaldisplay|Agreedprice|Marketprice|210.23|1.56%|Incash|Inapplicable|27Apr.2013|www.cninfo.com.cn|
|ShenzhenTheWindowsoftheWorld(Shenzhen)Co.,Ltd.|Subsidiarycontrolledbytheprincipalshareholder|Sellingtheproductstorelatedparties|Sellingliquidcrystaldisplay|Agreedprice|Marketprice|1,170.51|8.7%|Incash|Inapplicable|27Apr.2013|www.cninfo.com.cn|
|TianjinOCTIndustrialCo.,Ltd.|Subsidiarycontrolledbytheprincipalshareholder|Sellingtheproductstorelatedparties|Sellingliquidcrystaldisplay|Agreedprice|Marketprice|861.54|6.4%|Incash|Inapplicable|27Apr.2013|www.cninfo.com.cn|
|YunnanOCTIndustrialCo.,Ltd.|Subsidiarycontrolledbytheprincipalshareholder|Sellingtheproductstorelatedparties|Sellingliquidcrystaldisplay|Agreedprice|Marketprice|65.81|0.49%|Incash|Inapplicable|27Apr.2013|www.cninfo.com.cn|
|Total||||--|--|8,609.91|--|--|--|--|--|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||
|-|-|
|Detailsoflargeamountofsalesreturns|Inapplicable|
|Necessityandcontinuityofrelated-partytransactionaswellasreasonofchoosingthe related party (but not othertransaction parties) to conduct the saidtransaction|RelatedtransactionsoftheCompanywiththeaboverelatedpartiesoccurredindailyoperationoftheCompany,whichwerenecessary.TheCompanywouldcontinuethecooperation of fairness and mutual benefits with them, given the operation anddevelopment of the Company was stable. The aforesaid related transactions werebeneficial for maintaining the long-term cooperation between the Company andrelatedparties.|
|Impacts of related-party transaction onindependencyoftheCompany|The related-party transactions did not affect the independence of the Company, andmain business of the Company would not rely on the related parties due to therelated-partytransactionsabove.|
|Dependant degree of the Company onrelated party and relevant solutions forthedependence(ifany)|Inapplicable|
|Asforthepredictiononthetotalamountofroutinerelated-partytransactionstobeoccurred in the reporting period byrelevanttypes,theactualperformanceinthereportingperiod(ifany)|Year 2013 is expected to amount to RMB 103 million, 86,099,100 yuan actuallyoccurredduringthereportingperiod.|
|Reason for significant differencebetween the transaction price and themarketprice|The transaction price was fixed by referring to the market price, which hadn’t anysignificantdifferencewiththemarketprice.|

2.Related-partytransactionsregardingpurchaseandsalesofassets
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Relatedparty|Relation|Typeofrelated-partytransaction|Contents|Pricingprinciple|Bookvalueofthetransferredasset(RMBTenThousandYuan)|Evaluatedvalueofthetransferredasset(RMBThousandYuan)|Marketfairvalue(RMBThousandYuan)|Transferprice(RMBThousandYuan)|Settlementmode|Gain(RMBThousandYuan)|Disclosuredate|Disclosureindex|
|NAUGHT|NAUGHT|NAUGHT|NAUGHT|NAUGHT|0|0|0|0|NAUGHT|0|||
|Reasonforgreatdiscrepancybetweentransferpriceandbookvalueorestimatedvalue(ifany)||||Inapplicable|||||||||
|Informationaboutinfluenceoncorporationbusinessperformanceandfinancialsituation||||Inapplicable|||||||||

2013AnnualReportofKonkaGroupCo.,Ltd.
3.Significantrelated-partytransitionswithjointexternalinvestments
||||||||||
|-|-|-|-|-|-|-|-|-|
|Jointinvestor|Relationship|Pricingprinciple|Nameofinvestee|Mainbusinessofinvestee|Registeredcapitalofinvestee|Totalassetsofinvestee(RMBThousandYuan)|Netassetsofinvestee(RMBThousandYuan)|Netprofitofinvestee(RMBThousandYuan)|
|NAUGHT|NAUGHT|NAUGHT|NAUGHT|NAUGHT|0|0|0|0|
|Progressofanysignificantconstructioninprocessoftheinvestee(ifany)||NAUGHT|||||||

4.Significantcreditsandliabilitieswithrelatedparties
Wasthereanynon-operatingcreditorliabilitywithanyrelatedparty?
□Yes√No
|||||||||
|-|-|-|-|-|-|-|-|
|Relatedparty|Relation|Typeofcredit/liability|Reasonforcredit/liability|Non-operatingcapitaloccupation(Yes/No)|Openingbalance(RMBThousandYuan)|Amountduringthereportingperiod(RMBThousandYuan)|Closingbalance(RMBThousandYuan)|

5.Othersignificantrelated-partytransactions
On the 42nd meeting of the 7th Board of Directors on 25 April, 2013 (Thursday), Board of Directors deliberated and approved the Bill aboutApplying Borrowed Funds Limits to Overseas Chinese Town Holdings Company to satisfy the requirements of financing development and reduce cost of capital. The meeting agreed the application of no more than RMB 3,000,000,000for borrowed fundslimits from Overseas ChineseTownHoldings Company in 2013 and no more than RMB 1,500,000,000 at any point in time. Borrowed funds rate should not exceed the loan rate of financial institution of the corresponding period. Interest amount of above borrowed funds limits at thisyearshouldnotexceedRMB90,000,000.
Relevantindexforthewebsitedisclosingtheinterimannouncementonsignificantrelated-partytransactions
||||
|-|-|-|
|Nameoftheinterimannouncement|Disclosuredateoftheinterimannouncement|Nameofthewebsitedisclosingtheinterimannouncement|
|AnnouncementonRelated-partyTransaction|27Apr.2013|http://www.cninfo.com.cn/|

VIII. Significantcontracts andexecution
1.Particularsabouttrusteeship,contractandlease
2013AnnualReportofKonkaGroupCo.,Ltd.
(1)Trusteeship
Particularsabouttrusteeship
Inthereportingperiod,theCompanyhadnosignificanttrusteeshipofassetsofothercompanies,nordidanyothercompanieshave trusteeshipofassetsoftheCompany.
Gain/lossofprojectsthatbroughtover10%ofthetotalprofitsfortheCompanyduringthereportingperiod
□Applicable√Inapplicable
(2)Contract
Particularsaboutcontract
In the reporting period, the Company had no significant contract of assets of other companies, nor did any other companies have contractofassetsoftheCompany.
Gain/lossofprojectsthatbroughtover10%ofthetotalprofitsfortheCompanyduringthereportingperiod
□Applicable√Inapplicable
(3)Lease
Particularsaboutlease
Inthereportingperiod,theCompanyhadnosignificantleaseofassetsofothercompanies,nordidanyothercompanieshaveleaseof assetsoftheCompany.
Gain/lossofprojectsthatbroughtover10%ofthetotalprofitsfortheCompanyduringthereportingperiod
□Applicable√Inapplicable
TheCompany’s Research and Development Building is rent with annual income of RMB 26,497,723.95 in 2013. In the reporting period, the profit and loss accounts of single lease contract were not more than10% of total profits.
2.GuaranteesprovidedbytheCompany
Unit: RMB Ten Thousand Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|GuaranteesprovidedbytheCompanyforexternalparties(excludingthoseforsubsidiaries)|||||||||
|Guaranteedparty|Disclosuredateofrelevantannouncementontheguaranteeamount|Amountforguarantee|Actualoccurrencedate(dateofagreement)|Actualguaranteeamount|Typeofguarantee|Periodofguarantee|Executedornot|Guaranteeforarelatedpartyornot|
|DongguanKonka|27Apr.|4,631|10Oct.2013|2,084.55|Joint liabili|Halfyear|No|No|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|MouldPlasticCo.,Ltd.|2013||||ty guaranty||||
|Anhui Konka Electrical AppliancesCo., Ltd.||2,750|18Sep.2013|2,750|Generalguarantee|3years|No|No|
|KunshanJielunteMouldPlasticCo.,Ltd.||23,155||0|Jointliabilityguaranty|0|No|No|
|ChuzhouJielunteMouldPlasticCo.,Ltd.||||0|Jointliabilityguaranty|0|No|No|
|WuhanJielunteMouldPlasticCo.,Ltd.||||0|Jointliabilityguaranty|0|No|No|
|Totalexternalguaranteelineapprovedduringthereportingperiod(A1)||30,536||Totalactualoccurredamountofexternalguaranteeduringthereportingperiod(A2)||4,834.55|||
|Totalexternalguaranteelinethathasbeenapprovedattheendofthereportingperiod(A3)||30,536||Totalactualexternalguaranteebalanceattheendofthereportingperiod(A4)||4,834.55|||
|GuaranteesprovidedbytheCompanyforitssubsidiaries|||||||||
|Guaranteedparty|Disclosuredateofrelevantannouncementontheguaranteeamount|Amountforguarantee|Actualoccurrencedate(dateofagreement)|Actualguaranteeamount|Typeofguarantee|Periodofguarantee|Executedornot|Guaranteeforarelatedpartyornot|
|ShenzhenKonkaCommunicationtechnologyCo.,Ltd.|13Dec.2011|80,000|1Dec.2013|80,000|Generalguarantee|1year|No|No|
|AnhuiKonkaTongchuangHouseholdAppliancesCo.,Ltd.|2Jun.2012|41,000|29Jun.2013|10,500|Generalguarantee|1year|No|No|
|HongKongKonkaCo.,Ltd.|1Dec.2010|60,969|14Mar.2013|28,655.43|Generalguarantee|2years|No|No|
|HongKongKonkaCo.,Ltd.|1Dec.2010||25Mar.2013|8,596.63|Generalguarantee|2years|No|No|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|HongKongKonkaCo.,Ltd.|1Dec.2010||22May2013|14,069.94|Generalguarantee证|1year|No|No|
|HongKongKonkaCo.,Ltd.|13Dec.2011|121,938|27May2013|11,553.4|Generalguarantee|1year|No|No|
|HongKongKonkaCo.,Ltd.|13Dec.2011||7Jun.2013|5,404.35|Generalguarantee|1year|No|No|
|HongKongKonkaCo.,Ltd.|13Dec.2011||27Jun.2013|12,193.8|Generalguarantee|1year|No|No|
|HongKongKonkaCo.,Ltd.|13Dec.2011||19Jul.2013|5,487.21|Generalguarantee|1year|No|No|
|HongKongKonkaCo.,Ltd.|13Dec.2011||19Jul.2013|5,779.86|Generalguarantee|1year|No|No|
|HongKongKonkaCo.,Ltd.|13Dec.2011||23Jul.2013|6,096.9|Generalguarantee|1year|No|No|
|HongKongKonkaCo.,Ltd.|13Dec.2011||26Aug.2013|12,193.8|Generalguarantee|1year|No|No|
|HongKongKonkaCo.,Ltd.|13Dec.2011||26Sep.2013|29,783.36|Generalguarantee|1year|No|No|
|KonkaHouseholdAppliancesInternationalTradingCo.,Ltd.|13Dec.2011||27Sep.2013|12,132.83|Generalguarantee|Halfyear|No|No|
|KonkaHouseholdAppliancesInternationalTradingCo.,Ltd.|13Dec.2011||21Oct.2013|18,199.25|Generalguarantee|Halfyear|No|No|
|Totalguaranteelineapprovedforthesubsidiariesduringthereportingperiod(B1)||121,938||Totalactualoccurredamountofguaranteeforthesubsidiariesduringthereportingperiod(B2)||260,646.76|||
|Totalguaranteelinethathasbeenapprovedforthesubsidiariesattheendofthereportingperiod(B3)||515,845||Totalactualguaranteebalanceforthesubsidiariesattheendofthereportingperiod(B4)||260,646.76|||
|TotalguaranteeamountprovidedbytheCompany(totaloftheabove-mentionedtwokindsofguarantees)|||||||||
|Totalguaranteelineapprovedduringthereportingperiod(A1+B1)||152,474||Totalactualoccurredamountofguaranteeduringthereportingperiod(A2+B2)||265,481.31|||
|Totalguaranteelinethathasbeenapprovedattheendofthereportingperiod||546,381||Totalactualguaranteebalanceattheendofthereportingperiod(A4+B4)||265,481.31|||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||
|-|-|
|(A3+B3)||
|Proportionoftotalguaranteeamount(A4+B4)tothenetassetsoftheCompany|65.06%|
|Ofwhich:||
|Amountofguaranteeforshareholders,actualcontrollerandrelatedparties(C)|0|
|The amount of debt secured directly orindirectly for the asset-liability ratio ofmore than 70% of the secured object（D）|260,646.76|
|The total amount of guarantees exceeding 50%of net assets（E）|56,652.01|
|Total amount of the above three guarantees（C+D+E）|317,298.77|
|Explanation on the possibility of fulfilling the jointresponsibility of repayment due to immature guarantees (ifany)|Inapplicable|
|Explanationonprovisionofguaranteesforexternalpartiesinviolationoftheprescribedprocedure(ifany)|Inapplicable|

Explanationonparticularsabouttheguaranteesbycomplexways
Naught
(1)Particularsaboutillegalexternalguarantee
Unit: Ten Thousand Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Guaranteedparty|RelationshipwiththeCompany|Illegalguaranteeamount|Proportionintheauditednetassetsofthelatestperiod(%)|Typeofguarantee|Guaranteeperiod|Illegalguaranteeamountuptotheendoftheperiodofannualreport|Proportionintheauditednetassetsofthelatestperiod(%)|Predictedreleasingway|Predictedreleasedamount|Predictedreleasingdate(month)|
|NAUGHT|NAUGHT|0|0%|||0|0%||||
|Total||0|0%|--|--|0|0%|--|--|--|

 3.Othersignificantcontracts
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Nameof|Nameofthe|Bookvalue|Appraisalvalue|Nameof|Basedatefor|Pricingprincipl|Tradingprice|Related-party|Relationship|Execution|Nameof|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|companyenteringintothecontract|countercompanyenteringintothecontract|oftheassetsinvolvedinthecontract(RMBTenThousandYuan)(ifany)|oftheassetsinvolvedinthecontract(RMBTenThousandYuan)(ifany)|appraisalagency(ifany)|appraisal(ifany)|e|(RMBTenThousandYuan)|transactionornot|situationuptotheperiod-end|companyenteringintothecontract|
|NAUGHT|NAUGHT||||||||||

4.Othersignificanttransactions
NAUGHT
IX.Performance ofcommitments
1. Commitments made by the Company or shareholders holding over5% of theCompany’s shares in the reportingperiodorsuchcommitmentscarrieddownintothereportingperiod
|||||||
|-|-|-|-|-|-|
|Commitment|Commitmentmaker|Contents|Timeofmakingcommitment|Periodofcommitment|Fulfillment|
|Commitmentonsharereform|NAUGHT|NAUGHT||||
|Commitment inthe acquisitionreport or|NAUGHT|NAUGHT||||
|Commitments made upon the assets|NAUGHT|NAUGHT||||
|Commitments made upon IPO or|NAUGHT|NAUGHT||||
|Other commitments made to minority|NAUGHT|NAUGHT||||
|Executedtimelyornot?|Yes|||||
|Thespecificreasonoftheunsettlementandthenextplan(ifany)|Inapplicable|||||

2. If theCompany’s assets or projects existing earnings prediction, and the reporting period is among the prediction period, it shall explain on whether the assets or projects reach the original earnings prediction andrelevantreason
|||||||||
|-|-|-|-|-|-|-|-|
|Nameoftheassetorprojectexistingprofitableprediction|Initialtimeoftheprediction|Endingtimeoftheprediction|Currentpredictedbusinessperformance(RMBTenThousand|Currentactualbusinessperformance(RMBTenThousand|Reasonoffailingtoreachtheprediction(ifapplicable)|Disclosuredateoftheoriginalprediction|Disclosureindexoftheoriginalprediction|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||
|-|-|-|-|
||Yuan)|Yuan)||
|NAUGHT|0|0|NAUGHT|

X. Particulars aboutengagementand disengagementofCPAsfirm
CPAsfirmengagedatpresent
|||
|-|-|
|NameofdomesticCPAsfirm|RuihuaCertifiedPublicAccountants|
|RemunerationofdomesticCPAsfirm(RMBTenThousandYuan)|100|
|ConsecutiveyearsoftheauditservicesprovidedbydomesticCPAsfirm|0year|
|NameofthecertifiedpublicaccountantsfromthedomesticCPAsfirm|LiuJianhua,TangQimei|
|NameofoverseasCPAsfirm(ifany)|Inapplicable|
|RemunerationofoverseasCPAsfirm(RMBTenThousandYuan)(ifany)|0|
|ConsecutiveyearsoftheauditservicesprovidedbyoverseasCPAsfirm(ifany)|Inapplicable|
|NameofthecertifiedpublicaccountantsfromtheoverseasCPAsfirm(ifany)|Inapplicable|

ReengagetheCPAsfirmatcurrentperiodornot?
√Yes□No
ReengagetheCPAsfirmintheauditperiodornot?
□Yes√No
ExecutetheapprovalproceduresforchangingtheCPAsfirmornot?
□Yes√No
DetailedexplanationonthereengagementandchangeofCPAsfirm:
RSM China Certified Public Accountants and Crowe Horwath Certified Public Accountants has merged for the newly-built Ruihua Certified Public Accountants. RSM China Certified Public Accountants has been dissolved and without occupational qualifications any more. Considering the continuity of auditing and approved by the 1st Extraordinary General Meeting in 2013, the Company has appointed Ruihua Certified Public Accountants to be theauditingauthorityof2013annualreportfortheCompany.
Particularsonengagingtheauditfirmfortheinternalcontrol,financialadviserorsponsor
√Applicable□Inapplicable
During the reporting period, as approved by theShareholders’ General Meeting, the Company continued to engage Ruihua Certified PublicAccountants as the audit firm on internal control of the Company for 2013, with theauditingfeefortheinternalcontrolin2013asRMB400,000.
XI. Explanation of the Supervisory Committee and Independent Directors (if applicable) onthe“Non-standardAuditor’s Report”issued bytheCPAs firm during thereporting period Inapplicable
2013AnnualReportofKonkaGroupCo.,Ltd.
XII. Punishment andrectification
||||||||
|-|-|-|-|-|-|-|
|Name|Type|Reason|Typeofinvestigationandpunishment|Conclusion(ifany)|Disclosuredate|Disclosureindex|

Explanationonrectification:
Inapplicable
Particulars about the directors, supervisors, senior management staffs and shareholders holding over5% shares of the CompanyinvolvinginillegaltradingtheCompany’sstocksandtheCompanyhasdisclosetorecovertheillegalincome
□Applicable√Inapplicable
XIII. Particulars about trading suspension and termination faced after the disclosure of annual report
TherewerenorisksoftradingsuspensionandterminationfacedbytheCompanyafterthedisclosureofannualreport.
XIV.Explanationon othersignificantevents
I.DevelopmentoftheurbanupdatingprojectsoftheCompanyheadquarterplant
Accordingto the applicationof the Company,the Shenzhen NanshanReconstruction Office ofUrbanVillage (old village) published Notice about Subject of Implementation of Urban Updating Projects of Konka Headquarter Plant in Nanshan, Shenzhen to publicize the subject of implementation of urban updating projects of Konka headquarterplant.
InAugust, 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 of Konka Headquarter Plant”.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 of Implementation of Urban Updating Projects of Konka Headquarter Plant in August, 2013 to stop the formalities of Konka Group headquarter plant and handle it after appropriatediscussionbetweenOverseasChineseTownGroupandtheCompany.
Hereafter, no agreement of Konka Group to be the only subject of implementation of the urban updating projects hasbeenreachedafterseveralnegotiations.
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 on 28, Feb. 2014, 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. The company has submitted arbitration application documentstoShenzhenCourtofInternationalArbitration.
The Company has decided to submit the dispute of the subject of Konka headquarter plant for arbitration. Relevant departments of Shenzhen agreed that the Company would pay the land funds of the urban updating projects of Konka headquarter plant in advance. 2nd SubordinateAdministration of Shenzhen Land Planning and Land Resources Committee re-published the Demand Note of Transfer Income of Shenzhen State-Owned Land RightstoverifytheupgradingpaymentofKonkaheadquarterplantofRMB1,492,931,087.
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
advancebeforethearbitrationresult.
2013AnnualReportofKonkaGroupCo.,Ltd.
If it is arbitrated that Konka Group would be the only subject of the project, Konka Group should continue the project.IfitisarbitratedthatKonkahasnorightstobetheonlysubjectoftheproject,KonkaGroupandOverseas Town should share the land funds according to negotiated cooperation development program and transfer formalitiesandsubmitsupplementarydevelopmentmaterials.
II.DevelopmentofKunshanZhouzhuangProject
After the approval by the 42nd meeting of the 6th Board of Directors, the Company obtained the land use rights of the land in the south of Quanwang Road, Zhouzhuang County, Kunshan.The project covers an area of 366,575.8 m2fortourismfacilitiesandcommercialhousing.
The Company is planned to develop the land by stages and determine the annual development plans according to market condition. From March, 2013, the first-phrase residential project has been started for construction and it would be delivered in 2014. It is planned to achieve sales income and produce profits in 2014. Meanwhile, it is predictedtostartthesecond-phraseresidentialprojectin2014.
III. Index for significant information disclosure
||||||
|-|-|-|-|-|
|No.|Time|Nameofannouncement|Page|Link|
|||||http://www.cninfo.com.cn|
|2013-01|2013-1-26|Announcementon2012AnnualBusinessResultsForecast|SecuritiesTimesB13,TaKungPaoB2|http://www.cninfo.com.cn/finalpage/2013-01-26/62069377.PDF|
|2013-02|2013-4-27|AnnouncementonResolutionsofthe42ndSessionofthe7thBoardofDirectors|SecuritiesTimesB109,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-04-27/62438040.PDF|
|2013-03|2013-4-27|AnnouncementonResolutionsofthe8thSessionofthe7thBoardofSupervisors|SecuritiesTimesB109,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-04-27/62438046.PDF|
|2013-04|2013-4-27|NoticeontheHoldingofthe2012AnnualGeneralMeeting|SecuritiesTimesB109,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-04-27/62438041.PDF|
|2013-05|2013-4-27|AnnouncementonExpectedRoutineOperationRelated-partyTransactionsfor2013|SecuritiesTimesB109,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-04-27/62438025.PDF|
|2013-06|2013-4-27|Abstractofthe2012AnnualReportofKonkaGroupCo.,Ltd.|SecuritiesTimesB109,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-04-27/62438026.PDF|
|2013-07|2013-4-27|TextoftheAnnualReportofthe2012AnnualReportofKonkaGroupCo.,Ltd.|SecuritiesTimesB109,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-04-27/62438049.PDF|
|2013-08|2013-4-27|AnnouncementonRelated-partyTransactions|SecuritiesTimesB109,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-04-27/62438056.PDF|
|2013-09|2013-4-27|AnnouncementonProvisionofGuaranteesbyControlledSubsidiariesforExternalParties|SecuritiesTimesB109,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-04-27/62438058.PDF|
|2013-10|2013-4-27|FirstQuarterReport2012ofKonkaGroupCo.,Ltd.|SecuritiesTimesB109,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-04-27/62438054.PDF|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|2013-11|2013-4-27|TextoftheFirstQuarterReport2013ofKonkaGroupCo.,Ltd.|SecuritiesTimesB109,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-04-27/62438051.PDF|
|2013-12|2013-5-21|AnnouncementoftheResolutionsof2012AnnualGeneralMeeting|SecuritiesTimesB41,TaKungPaoB3|http://www.cninfo.com.cn/finalpage/2013-05-21/62509716.PDF|
|2013-13|2013-6-5|AnnouncementonExecutingthe2012DividendsPayoutPlanofKonkaGroupCo.,Ltd.|SecuritiesTimesB28,TaKungPaoB4|http://www.cninfo.com.cn/finalpage/2013-06-05/62558385.PDF|
|2013-14|2013-6-6|Announcement on the Dissolving and Liquidationof the Controlled Subsidiaries|SecuritiesTimesB17,TaKungPaoB10|http://www.cninfo.com.cn/finalpage/2013-06-06/62562011.PDF|
|2013-15|2013-6-6|AnnouncementonResolutionsofthe43rdSessionofthe7thBoardofDirectors|SecuritiesTimesB17,TaKungPaoB10|http://www.cninfo.com.cn/finalpage/2013-06-06/62562012.PDF|
|2013-16|2013-6-18|AnnouncementontheResignationoftheVicePresidentoftheCompany|SecuritiesTimesB53,TaKungPaoB9|http://www.cninfo.com.cn/finalpage/2013-06-18/62589445.PDF|
|2013-17|2013-6-29|AnnouncementontheProgressoftheDeclarationoftheUrbanRenewalPlanProject|SecuritiesTimesB20,TaKungPaoB3|http://www.cninfo.com.cn/finalpage/2013-06-29/62624607.PDF|
|2013-18|2013-7-2|AnnouncementontheAcquiringoftheLandUseRightoftheCompany|SecuritiesTimesB13,TaKungPaoB18|http://www.cninfo.com.cn/finalpage/2013-07-02/62754724.PDF|
|2013-19|2013-7-13|AnnouncementonEarningsForecastfortheFirstHalfYearof2013|SecuritiesTimesB12,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-07-13/62829646.PDF|
|2013-20|2013-8-6|AnnouncementontheProgressoftheDeclarationoftheUrbanRenewalPlanProject|SecuritiesTimesB32,TaKungPaoB2|http://www.cninfo.com.cn/finalpage/2013-08-06/62909699.PDF|
|2013-21|2013-8-17|AnnouncementonReceivingtheCommentLetteronthe KonkaGroupAstheExecutoroftheRenewaloftheHeadquarterFactoryArea|SecuritiesTimesB24,TaKungPaoB5|http://www.cninfo.com.cn/finalpage/2013-08-17/62952576.PDF|
|2013-22|2013-8-30|AnnouncementontheProgressoftheEquityTransferoftheControlledSubsidiaries|SecuritiesTimesB25,TaKungPaoB9|http://www.cninfo.com.cn/finalpage/2013-08-30/63018399.PDF|
|2013-23|2013-8-31|AbstractoftheSemi-annualReportforY2013|SecuritiesTimesB28,TaKungPaoB6|http://www.cninfo.com.cn/finalpage/2013-08-31/63028846.PDF|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|2013-24|2013-8-31|Semi-annualReportforY2013|SecuritiesTimesB28,TaKungPaoB6|http://www.cninfo.com.cn/finalpage/2013-08-31/63028855.PDF|
|2013-25|2013-9-24|AnnouncementonReceiptofTaxRebates|SecuritiesTimesB32,TaKungPaoB2|http://www.cninfo.com.cn/finalpage/2013-09-24/63103719.PDF|
|2013-26|2013-9-30|AnnouncementonResolutionsofthe47thSessionofthe7thBoardofDirectors|SecuritiesTimesB33,TaKungPaoB2|http://www.cninfo.com.cn/finalpage/2013-09-30/63123960.PDF|
|2013-27|2013-9-30|AnnouncementonProvisionofGuarantees|SecuritiesTimesB33,TaKungPaoB2|http://www.cninfo.com.cn/finalpage/2013-09-30/63123958.PDF|
|2013-28|2013-9-30|NoticeonHoldingthe2013FirstExtraordinaryGeneralMeeting|SecuritiesTimesB33,TaKungPaoB2|http://www.cninfo.com.cn/finalpage/2013-09-30/63123957.PDF|
|2013-29|2013-9-30|AnnouncementontheResignationofPresidentoftheBoardofDirectors|SecuritiesTimesB33,TaKungPaoB2|http://www.cninfo.com.cn/finalpage/2013-09-30/63123956.PDF|
|2013-30|2013-10-15|AnnouncementonEarningsForecastofthePreviousThirdQuartersof2013|SecuritiesTimesB41,TaKungPaoB26|http://www.cninfo.com.cn/finalpage/2013-10-15/63154255.PDF|
|2013-31|2013-10-19|AnnouncementonResolutionsMadeattheFirstExtraordinaryGeneralMeetingfor2013|SecuritiesTimesB24,TaKungPaoB3|http://www.cninfo.com.cn/finalpage/2013-10-19/63168610.PDF|
|2013-32|2013-10-19|AnnouncementonResolutionsofthe48thSessionofthe7thBoardofDirectors|SecuritiesTimesB24,TaKungPaoB3|http://www.cninfo.com.cn/finalpage/2013-10-19/63168613.PDF|
|2013-33|2013-10-30|AnnouncementontheTextoftheThirdQuarterReportforY2013ofKonkaGroupCo.,Ltd.|SecuritiesTimesB73,TaKungPaoA23|http://www.cninfo.com.cn/finalpage/2013-10-30/63212157.PDF|
|2013-34|2013-10-30|AnnouncementontheThirdQuarterReportforY2013ofKonkaGroupCo.,Ltd.|SecuritiesTimesB73,TaKungPaoA23|http://www.cninfo.com.cn/finalpage/2013-10-30/63212160.PDF|
|2013-35|2013-11-30|AnnouncementonReceiptofTaxRebates|SecuritiesTimesB20,TaKungPaoB4|http://www.cninfo.com.cn/finalpage/2013-11-30/63318645.PDF|
|2013-36|2013-12-18|AnnouncementonReceiptofTaxRebates|SecuritiesTimesB20,TaKungPaoB3|http://www.cninfo.com.cn/finalpage/2013-12-18/63386492.PDF|

XV. Significantevents ofthesubsidiaries oftheCompany
||||||
|-|-|-|-|-|
|No.|Time|Nameofannouncement|Page|Link|
|||||http://www.cninfo.com.cn|
|2013-09|2013-4-27|AnnouncementonProvisionofGuaranteesbyControlledSubsidiariesforExternal|SecuritiesTimesB109,TaKungPaoA21|http://www.cninfo.com.cn/finalpage/2013-04-27/62438058.PDF|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|||Parties|||
|2013-14|2013-6-6|Announcement on the Dissolving and Liquidation of theControlled Subsidiaries|SecuritiesTimesB17,TaKungPaoB10|http://www.cninfo.com.cn/finalpage/2013-06-06/62562011.PDF|
|2013-22|2013-8-30|AnnouncementontheProgressoftheEquityTransferoftheControlledSubsidiaries|SecuritiesTimesB25,TaKungPaoB9|http://www.cninfo.com.cn/finalpage/2013-08-30/63018399.PDF|

XVI.Particulars aboutissuingcorporate bonds bythe Company
TheCompanyhadn’tissuedanycorporatebondsuptotheendofthereportingperiod.
2013AnnualReportofKonkaGroupCo.,Ltd.
VI. Change in Share Capital and Particulars about Shareholders I.Particulars aboutthe changesin sharecapital
Unit: Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Beforethechange||Increase/decreaseinthechange(+,-)|||||Afterthechange||
||Number|Proportion|Issuanceofnewshares|Bonusshares|Capitalizationofpublicreservefund|Other|Subtotal|Number|Proportion|
|I. Shares subject totradingtradingmoratorium|198,381,940|16.48%||||||198,381,940|16.48%|
|2.Sharesheldbystate-ownedcorporation|198,381,940|16.48%||||||198,381,940|16.48%|
|II. Shares not subject totradingmoratorium|1,005,590,764|83.52%||||||1,005,590,764|83.52%|
|1.RMBordinaryshares|599,914,960|49.83%||||||599,914,960|49.83%|
|2. Domestically listedforeignshares|405,675,804|33.69%||||||405,675,804|33.69%|
|III.Totalshares|1,203,972,704|100%||||||1,203,972,704|100%|

Reasonforthechangesinsharecapital
Approvalforchangesinsharecapital
□Applicable√Inapplicable
Transferforchangesinsharecapital
Effects of changes in share capital on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the Companyandotherfinancialindexesoverthelastyearandlastperiod
□Applicable√Inapplicable
OthercontentsthattheCompanyconsidersnecessaryorrequiredbythesecuritiesregulatoryauthoritiestodisclose
II. Issuance andlistingofsecurities
1.Issuanceofsecuritiesoverthepastthreeyears
||||||||
|-|-|-|-|-|-|-|
|Nameofsecurityanditsderivative|Issuingdate|Issuingprice(orinterestrate)|Numberofissuance|Listingdate|Numberapprovedforlisting|Endingdateoftrade|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||
|-|-|-|-|
|security||||
|Stock||||
|Notissued|0|0|0|
|Convertiblecompanybonds,bondswithattachedwarrant,companybonds||||
|Notissued|0|0|0|
|Warrant||||
|Notissued|0|0|0|

Explanationonsecuritiesissuanceoverthepastthreeyears
TheCompanyhadnotissuedanystockoverthepastthreeyears.
2. Explanation on changes in share capital& the structure of shareholders, the structure of assets and liabilities
During thereporting period, thereexisted no changes in total shares of theCompany,or changes in structureof shareholders or in asset-liability structure of the Company due to bonus shares, capitalization of shares, allotment of shares, issuance of new shares, private issuance of shares, exercise of warrant, implementation of equity incentive scheme, business combination, change ofconvertiblecorporatebondstoshares,capitaldecrease,listingofemployee’sshares,issuanceofbondsorotherreasons.
3.ExistentsharesheldbyinternalstaffsoftheCompany
||||
|-|-|-|
|Issuingdateofinternalstaffs’shares|Issuingpriceofinternalstaffs’shares(Yuan)|Issuingamountofinternalstaffs’shares(share)|
|Explanationontheexistentinternalstaffs’shares|TheCompanyhasnointernalstaffs’sharesatpresent.||

II. Particulars abouttheshareholders and actual controller
1.Totalnumberofshareholdersandtheirshareholding
Unit:Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Totalnumberofshareholdersatthereportingperiod||91,428||Totalnumberofshareholdersonthefifthtradingdaybeforethedisclosuredateoftheannualreport||||85,634||
|Particularsaboutsharesheldbyshareholderswithashareholdingpercentageover5%ortheTop5ofthem||||||||||
|Nameofshareholder|Natureofshareholder|Shareholdingpercentage(%)|Totalsharesheldattheperiod-end|Increase/decreaseduringthereportingperiod|Numberofnon-tradablesharesheld|Numberoftradablesharesheld|Pledgedorfrozenshares|||
||||||||Statusofshares||Numberofshares|
|OCTENTERPRISE|State-ownedcorporation|19%|228,754,783|0|198,381,940|30,372,843|Pledged||0|
||||||||Frozen||0|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|SCO.|||||||||
|HOLYTIMEGROUPLIMITED|Foreigncorporation|4.89%|58,906,900|76,900|0|58,906,900|Pledged|0|
||||||||Frozen|0|
|GAOLINGFUND,L.P.|Foreigncorporation|2.19%|26,400,625|0|0|26,400,625|Pledged|0|
||||||||Pledged|0|
|SunZhenxiang|Domesticnaturalperson|1.2%|14,456,488|14,456,488|0|14,456,488|Pledged|0|
||||||||Frozen|0|
|NAMNGAI|Foreignnaturalperson|0.98%|11,760,520|0|0|11,760,520|Pledged|0|
||||||||Frozen|0|
|ChenZhongfu|Domesticnaturalperson|0.48%|5,787,502|5,787,502|0|5,787,502|Pledged|0|
||||||||Frozen|0|
|LiYichao|Domesticnaturalperson|0.45%|5,447,381|56,200|0|5,447,381|Pledged|0|
||||||||Frozen|0|
|LiLichun|Domesticnaturalperson|0.42%|5,088,328|5,088,328|0|5,088,328|Pledged|0|
||||||||Frozen|0|
|XiaRui|Domesticnaturalperson|0.42%|5,006,500|0|0|5,006,500|Pledged|0|
||||||||Frozen|0|
|Agricultural Bank of China--Securities Investment Funds ofHuaxiaSteadyGrowthHybrid|Domesticnon-state-ownedcorporation|0.38%|4,600,000|4,600,000|0|4,600,000|Pledged|0|
||||||||Frozen|0|
|Strategic investor or generalcorporation becoming a top tenshareholder dueto placingofnewshares(ifany)||Naught|||||||
|Explanation on associatedrelationship or/and persons actingin concert among theabove-mentionedshareholders:||ThefirstmajorityshareholderOVERSEASCHINESETOWNENTERPRISESCO.hasnorelated-partyrelationshipwithothershareholdersandtheyarenotacting-in-concertparties,either. Except for that, the Company does not know whether the other shareholders arerelatedpartiesandwhethertheyareacting-in-concertparties.|||||||
|Particularsaboutsharesheldbythetoptenshareholdersholdingsharesnotsubjecttotradingmoratorium|||||||||
|Nameofshareholder||Numberoftradablesharesheldattheperiod-end|||||Typeofshares||
||||||||Type|Number|
|HOLYTIMEGROUPLIMITED||58,906,900|||||Domesticallylistedforeignshares|58,906,900|
|OCTENTERPRISESCO.||30,372,843|||||RMBordinaryshare|30,372,843|
|GAOLINGFUND,L.P.||26,400,625|||||Domestically|26,400,625|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||
|-|-|-|-|
|||listedforeignshares||
|SunZhenxiang|14,456,488|RMBordinaryshare|14,456,488|
|NAMNGAI|11,760,520|Domesticallylistedforeignshares|11,760,520|
|ChenZhongfu|5,787,502|RMBordinaryshare|5,787,502|
|LiYichao|5,447,381|RMBordinaryshare|5,447,381|
|LiLichun|5,088,328|RMBordinaryshare|5,088,328|
|XiaRui|5,006,500|RMBordinaryshare|5,006,500|
|Agricultural Bank of China--Securities Investment Funds of|4,600,000|RMBordinaryshare|4,600,000|
|Explanation on associatedrelationship or/and persons actingin concert among the top tentradableshareholdersandbetweenthe top ten tradable shareholdersandthetoptenshareholders|ThefirstmajorityshareholderOVERSEASCHINESETOWNENTERPRISESCO.hasnorelated-partyrelationshipwithothershareholdersandtheyarenotacting-in-concertparties,either. Except for that, the Company does not know whether the other shareholders arerelatedpartiesandwhethertheyareacting-in-concertparties.|||
|Explanation on the Top 10shareholders participating in themargin trading business (ifany)(seenotes4)|Sun Zhenxiang holds 14,456,488 A-shares through a client credit trading guaranteesecuritiesaccountofGFSecuritiesCo.,Ltd.|||

WhethertheshareholdersoftheCompanyinthetradeagreementtobuybackduringthereportingperiod
□Yes√No
2.Particularsaboutthecontrollingshareholder
Corporation
|||||||
|-|-|-|-|-|-|
|Name of controllingshareholder|Legalrepresentative/companyprincipal|Dateofestablishment|Organizationcode|Registeredcapital|Businessscope|
|OCTENTERPRISESCO.|RenKelei|1 Nov.1985|19034617-5|RMB6.3billion|Development andoperation of realestate and hotels;operation of tourismand relevant cultural|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|||industries;manufacture ofelectronics andsupporting packingproducts.|
|Operatingresults,financialsituation, cash flow andfuture developmentstrategy,etc.|Accordingtotheun-auditeddatainJan.-Sep.2013,thetotalcapitalofOCTENTERPRISESCO.wasofRMB103,399billionofJan.-Sep.2013;theowners’equityattributedtotheCompanywasofRMB15.612billion.ThetotalrealizedoperationrevenuewasofRMB31.879billion;thenetprofitsattributedtotheownersoftheCompanywereofRMB1.931billion.ThenetcashflowarisingfromoperatingactivitieswasofRMB10.738billion;andthenetamountofthecashflowwasofRMB4.95billion.Thefuturedevelopmentstrategiesareasfollows:Aimedatcreatingthe“aircraftcarrierforChineseculturaltourismindustry”,anddirectedbythevalueof“QualifiedOverseasChineseTowntoBringHappinesstoThousandsofFamilies”,theCompanywillactivelyadapttothechangeofnationaleconomicdevelopmentway,alwaysseizethethemeofcreativedevelopment,furtherdeepenandenrichtheexistingcommercialway,soastopromotethegreat-leap-forwarddevelopmentforvariousmainbusiness,andfurthersolidifyandstrengthentheleadingadvantageinthegatheringdevelopmentandoperationalareaofmodernserviceindustry.||
|Shares held by thecontrolling shareholder inother listed companies byholding or shareholdingduringthereportingperiod|OCTENTERPRISESCO.held56.89%equityofShenzhenOverseasChineseTownCo.,Ltd.(acompanylistedonthemainboardofShenzhenStockExchange,SZ.000069),meanwhile,ShenzhenOverseasChineseTownCo.,Ltd.indirectlyheld66.93%equityofOCT(Asia)HoldingsLtd.(acompanylistedonthemainboardofHongKongStockExchange).||

Changeofthecontrollingshareholderduringthereportingperiod
□Applicable√Inapplicable
3.Particularsabouttheactualcontroller
Corporation
|||||||
|-|-|-|-|-|-|
|Nameoftheactualcontroller|Legalrepresentative/companyprincipal|Dateofestablishment|Organizationcode|Registeredcapital|Businessscope|
|State-ownedAssetsSupervisionandAdministrationCommissionoftheStateCouncil|ZhangYi|||||
|Operatingresults,financialsituation,cashflowandfuturedevelopmentstrategy,etc.|Inapplicable|||||
|Sharesheldbytheactual|Inapplicable|||||

2013AnnualReportofKonkaGroupCo.,Ltd.
||
|-|
|controllingshareholderinotherlistedcompaniesbyholdingorshareholdingduringthereportingperiod|

Changeoftheactualcontrollerduringthereportingperiod
□Applicable√Inapplicable
TheownershipandcontrollingrelationshipbetweentheactualcontrolleroftheCompanyandtheCompanyisdetailedasfollows: SASACoftheStateCouncil
100%
OCTEnterprisesCo.
19%(Ashares)
KonkaGroupCo.,Ltd.
TheactualcontrollercontrolstheCompanyviatrustorotherwaysofassetmanagement
□Applicable√Inapplicable
4.Particularsaboutothercorporateshareholderswithshareholdingproportionover10%
|||||||
|-|-|-|-|-|-|
|Name of corporateshareholder|Legalrepresentative/companyprincipal|Dateofestablishment|Organizationcode|Registeredcapital|Businessscopeormanagementactivities|

IV. Particulars on shareholding increase scheme during the reporting period proposed or implemented bythe shareholders andact-in-concert persons
||||||||
|-|-|-|-|-|-|-|
|Nameofshareholder/act-in-concertperson|Amountofsharestobeincreasedholding|Sharesproportiontobeincreased(%)|Amountofsharesactuallyheld|Sharesproportionincreasedactually(%)|Initialdisclosuredateoftheshareholdingincreasescheme|Disclosure datefor thecompletion ofimplementingtheshareholdingincreasescheme|
|NAUGHT||0%|0|0%|||

Explanationonothersituations:
NAUGHT
2013AnnualReportofKonkaGroupCo.,Ltd.
Section VII. Directors, Supervisors, Senior Management Staffs and Employees
I.Changes inshareholding ofdirectors, supervisors and seniormanagement staffs
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Name|Officetitle|Tenurestatus|Sex|Age|Startdate|Endingdate|Sharesheldattheyear-begin(share)|Amountofsharesincreasedatthereportingperiod(share)|Amountofsharesdecreasedatthereportingperiod(share)|Amountofsharesheldattheperiod-end(share)|
|WuSiyuan|ChairmanoftheBoard|Current|Male|50|18Oct.2013|17Dec.2013|0|0|0|0|
|SuZheng|Director|Current|Male|57|17Dec.2010|17Dec.2013|0|0|0|0|
|WangXiaowen|Director|Current|Female|44|17Dec.2010|17Dec.2013|0|0|0|0|
|HeHaibin|Director|Current|Male|39|17Dec.2010|17Dec.2013|0|0|0|0|
|FengYutao|IndependentDirector|Current|Male|46|17Dec.2010|17Dec.2013|0|0|0|0|
|YangHaiying|IndependentDirector|Current|Female|46|17Dec.2010|17Dec.2013|0|0|0|0|
|ZhangZhong|IndependentDirector|Current|Male|45|17Dec.2010|17Dec.2013|0|0|0|0|
|DongYaping|ChiefSupervisor|Current|Male|60|17Dec.2010|17Dec.2013|0|0|0|0|
|HaoGang|Supervisors|Current|Male|40|17Dec.2010|17Dec.2013|0|0|0|0|
|LiuYong|Supervisor|Current|Male|42|17Dec.2010|17Dec.2013|0|0|0|0|
|LiuFengxi|President|Current|Male|42|4Apr.2014|4Apr.2016|0|0|0|0|
|ChengDahou|VicePresident|Current|Male|52|25Apr.2012|11Jan.2014|0|0|0|0|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|HuangZhongtian|VicePresident|Current|Male|53|4Apr.2014|4Apr.2016|0|0|0|0|
|HeJianjun|VicePresident|Current|Male|43|4Apr.2014|4Apr.2016|0|0|0|0|
|XiaoQing|Secretary to theBoard|Current|Male|43|4Apr.2014|4Apr.2016|0|0|0|0|
|YangRong|CFO|Current|Female|39|4Apr.2014|4Apr.2016|0|0|0|0|
|LinGaike|VicePresident|Current|Male|42|4Apr.2014|4Apr.2016|0|0|0|0|
|LiHongtao|VicePresident|Current|Male|46|4Apr.2014|4Apr.2016|0|0|0|0|
|HouSongrong|ChairmanoftheBoard|Left|Male|45|17Dec.2010|18Oct.2013|0|0|0|0|
|ChenYuehua|President|Left|Male|50|25Apr.2012|25Apr.2013|0|0|0|0|
|MuGang|VicePresident|Left|Male|44|25Apr.2012|17Jun.2013|0|0|0|0|
|Total|--|--|--|--|--|--|0|0|0|0|

 Notes: The service term of the Senior Executives is about to expire, after the research of the 55th Session of the 7th Board of Directors held on 4Apr. 2014, the Company decided to continue recruiting Mr. Liu Fengxi as the President of the Company, Mr. HuangZhongtian,Mr.HeJianjun,Mr.LinGaike,Mr.LiHongtaoastheVicePresident,Mr.XiaoQingastheSecretarytotheBoard, andMs.YangRongastheCFO.
II. Post-holdingsituation
Mainworkingexperienceofcurrentdirectors,supervisorsandseniormanagementstaffsoverthepastfiveyears: 1.Director
Wu Siyuan, President of Board of Directors. Male, born in 1964, held master degree. Former vice president and general manager of Overseas Chinese Town Development Office, director of human resources of Overseas Chinese Town Group, general manager of Shenzhen Happy Valley; vice president and director of the Company, assistant president of Overseas Chinese Town Group, general manager and president of Chengdu Overseas Chinese Town Group, executive president of Wuhan Overseas Chinese Town Group, vice president of Beijing Overseas Chinese Town Group, executive president of Eastern Overseas Chinese Town. The current member of
Party Committee of Overseas Chinese Town Group, president of Overseas Chinese Town Culture, Tourism and
Technology Company, member of Party Committee and vice president of Shenzhen Overseas Chinese Town Co.,
Ltd, president of Board of Directors of Konka Group. He was concurrent theVice President of ChinaAssociation
2013AnnualReportofKonkaGroupCo.,Ltd.
ofAmusementParksandAttractions,presidentofShenzhenTravelAssociation.
Su Zheng, Director oftheCompany,was bornin1956with theHan nationality; collage degree,asenior engineer. He have served successively as Secretary of the CPC and Vice General Manager in SHENZHEN CASIC GUANGYU LTD., Leader of the Assets Integration Team of Shenzhen Area of China Aerospace Science& Industry Corp., Vice Chairman of the Board and as Secretary to the CPC in Aerospace Science& Industry Shenzhen (Group) Co., Ltd., as Deputy Secretary to the CPC in 999 Group Corporation (Shenzhen Southern Pharmaceutical Factory), as Chief Supervisor in Yunnan OCT Industrial Co., Ltd. Now he occupies the posts of standing committee of Vice Party Committee, Deputy Secretary to the CPC and Vice General Manager, Director of Konka Group, Director of China InternationalTravel Service Co., Ltd.; Supervisor of Overseas Chinese Town Real Estate Co., Ltd., and Chief Supervisor, Deputy Secretary to the CPC and Secretary of Inspecting Discipline CommissioninShenzhenOverseasChineseTownCo.,Ltd.
Wang Xiaowen, Director of the Company, born in 1969, Han nationality, is a holder of university diploma. She successivelytookthepostofCadreofPersonnelDivisionofOverseasChineseAffairsOfficeoftheStateCouncil, Vice General Manager of theAudit Department of Overseas Chinese Town Economic Development Corporation, Chief Financial Officer and Director in Shenzhen Overseas Chinese Town Industry Development Co, Ltd., Vice General Manager, Chief Administrative Officer of President Office, Chief Financial Officer, Supervisor and Assistant to President in Overseas ChineseTown Group Corporation, Director ofShenzhen OCTReal Estate Co., Ltd., Supervisor of Shenzhen Overseas ChineseTownCo., Ltd., Supervisor of Konka Group andChairman of the Board in Shenzhen Overseas Chinese Town Hotel Group Co., Ltd. Now she serves as Standing Committee member of Party Committee in Overseas Chinese Town Group Corporation, Director in Konka Group Co., Ltd., Chairman of the Board in Overseas Chinese Town (Asia) Holdings Limited and Shenzhen OCT Investment Co., Ltd., Director in Union Developing Group of China, Vice Chairman of the Board of Supervisors of China InternationalTravelServiceCo.,Ltd.,ChairmanoftheBoard inOverseas ChineseTownHongKongLimited and Overseas Chinese Town (Asia) Holdings Limited and Shenzhen OCT Investment Co., Ltd., and Vice President, Party Committee of Shenzhen OCT Co., Ltd.He’s also at the same time vice chairman of Central Enterprise YouthFederationandvicechairmanoftheAccountingSocietyofShenzhen.
He Haibin, Director of the Company, born in 1974, Han nationality, holds undergraduate degree, is a senior accountant. He has successively taken the posts as Chief of Audit Department and Financial Department in Overseas ChineseTown Group Corporation, as Principal of Finance in Planning Department ofthe Crowne Plaza Shenzhen,asCFO inShenzhenOCTSeaviewHotelCo.,Ltd.,asCFOinInterContinentalShenzhen,asViceCFO in Overseas Chinese Town Group Corporation and as CFO in Overseas Chinese Town Hong Kong Limited, etc.. Now he is the Chief of Enterprise Management Department in Overseas Chinese Town Group Corporation, as wellasadirectorofKonkaGroup.
2.IndependentDirector
FengYutao,IndependentDirector of theCompany,wasbornin 1967with the Hannationality.Hegraduated from Duke University with doctor of electronics engineering. He ever took senior management staff in C-Cube Microsystems, LSI Logic Inc. and Zoran Corporation. Now he acts as Vice President ofAmbarella Inc., General ManagerofAmbarellaInc.,ChinaandIndependentDirectorofKonkaGroup.
Yang Haiying, Independent Director of the Company, was born in 1967 with the Han nationality, and she graduated from the department of accounting of Shanghai Maritime University, being a senior accountant. She used to work inWaterway Bureau of Guangzhou asAccountant, and in China Shipping Container Lines Co., Ltd. as senior accountant. Now she serves as Senior Accountant in Hamburg Fritz und Mark Certified Public AccountantsandIndependentDirectorofKonkaGroup.
Zhang Zhong, Independent Director of the Company, was born in 1968 with the Han nationality. He gained
2013AnnualReportofKonkaGroupCo.,Ltd.
Master of Law from Renmin University of China, being a lawyer. He ever took the post of lawyer in Beijing ZhengpingdengLawFirm.NowheactsasLawyerandCopartnerofBeijingZhonglunLawFirmandIndependent DirectorofKonkaGroup.
3.Supervisor
DongYaping, Chief Supervisor of the Supervisory Committee, bornin 1953, Han nationality, diploma of college, isaneconomistandSeniorpoliticalofficer.HehassuccessivelyheldthepostsofDivisionChiefofDepartmentof Foreign Affairs Financial Supervision under the Ministry of Supervision, Cadre of Overseas Chinese Affairs Office of the State Council, DeputySecretary of theCPC andSecretary of Inspecting Discipline Commission and Vice President in Overseas Chinese Town Group Corporation, Chief Supervisor of the Supervisory Committee of Shenzhen Overseas Chinese Town Holding Company, Vice Chairman of the Board in Changsha Window of the World Co., Ltd., Director of Chengdu Tianfu Overseas Chinese Town Industrial Development Co., Ltd., Chief Supervisor of the Supervisory Committee in Taizhou OCT Investment Development Co., Ltd., Supervisor in Shenzhen OCTEast Co.,Ltd.,Standing Committee Member of theCPC andViceGM in Overseas ChineseTown Group Corporation and Vice Chairman of the Board in Shenzhen Overseas Chinese Town Co., Ltd.. Now he is Consultant of the OCT Group and Chief Supervisor of the Supervisory Committee in Konka Group Co., Ltd.; He is also at the same time Vice President of Shenzhen Foundation for Justice and Courage, a member of the Advisory Committee of Shenzhen Municipal Government, a member of the Expert Evaluation Committee for Shenzhen Mayor Quality Award and a member of the presidium of Chinese Culture Promotion Society, Vice ChairmanofChinaCulturalIndustryCooperative.
Hao Gang, was born in 1973, Han nationality, bachelor degree. He successively took the post such as Vice Chief oftheInspectionOffice,etc.inOverseasChineseTownGroupCorporation.NowheistheChiefoftheInspection OfficeinOverseasChineseTownGroupCorporationandasupervisorofKonkaGroup.
Liu Yong, Staff Supervisor, Han nationality, born in 1972, bachelor holder of postgraduate, is an assistant to engineer. He successively took posts of Vice Chief ofGM’s Office in Shenzhen Konka Telecommunications Technology Co., Ltd. and Vice Chief of Office of Konka Group. Now he is Office Chief and a supervisor of KonkaGroup.
4.SeniorExecutives
Liu Fengxi, President, Han nationality, born in 1972, postgraduate. He was once marketing GM for the multi-media division of Konka Group,Assistant GM and thenVice GM of Shenzhen KonkaTelecommunications Technology Co., Ltd., Chief of the Operation Management Center of Konka Group, Assistant to President and VicePresidentofKonkaGroup,etc.
Cheng Dahou, Vice President of the Company, was born in 1962 with the Han nationality; he obtained bachelor degree, being senior engineer. He served successfully as Deputy General Manager of Overseas Chinese Town Property Management Limited, Chief of Customer Service Center in Overseas Chinese Town Real Estate Co., Ltd., Chief of HR in Overseas Chinese Town Group Corporation, as well as Chairman of the Board in Overseas ChineseTownXinqiaoIndustrialDevelopmentCo.,Ltd.,etc.
Huang Zhongtian, Vice President. He is male, Han nationality, born in 1961, bachelor degree and Senior Administration Engineer. He successively took the post such as Assistant to President, Vice General Manager, VicePresident,andDeputySecretaryofpartyCommitteeandSecretaryofCommissionetc.ofKonkaGroup. He Jianjun, Vice President of the Company, was born in 1969 with the Han nationality; he obtained bachelor degree; being Economist. He has served successfully as Deputy Chief of Secretariat of the Board, Deputy Chief andChiefofStrategicDevelopmentDept.andSecretarytotheBoardinKonkaGroup,etc.
Xiao Qing: Secretary of the Board; was born in 1969 with the Han nationality; he got bachelor degree, being Economist.HeusedtobeBusinessAssistanttothePresidentandDeputyChiefofStrategicDevelopmentDept.as
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wellasChiefoftheInvestmentDevelopmentCenterinKonkaGroupCo.,Ltd.,etc.
Yang Rong, CFO, Han nationality, born in 1975, postgraduate. She once was Vice GM of the Financial Department of Konka Group,Vice Chief of the Financial Department andVice Chief of theAudit Department of OverseasChineseTownGroupCorporation.
Lin Gaike, Vice President, Han nationality,born in 1972, bachelor, engineer. He once was Chief of the New-type Display Design Institute of theR&D Center of Konka Group, Vice GM of the Digital Flat-panel Division of KonkaGroup,andViceGMoftheColorTVDivisionofKonkaGroup.
Li Hongtao, Vice President. He is male, Han nationality, born in 1968; bachelor degree. He successively took the post such asAssistant to General Manager, General Manager, Director and General Manager of Shenzhen Konka InformationCommunicationTechnologyCo.,LtdandAssistantPresidentofKonkaGroupetc.
Post-holdinginshareholders’units
√Applicable□Inapplicable
|||||||
|-|-|-|-|-|-|
|Nameofthepersonholdinganypostinshareholder’sunit|Nameofshareholder’sunit|Positioninshareholder’sunit|Beginningdateofofficeterm|Endingdateofofficeterm|Receivespaymentfromshareholder’sunit?|
|WuSiyuan|OverseasChineseTownGroupCorporation|StandingcommitteememberofPartyCommittee|1Mar.2008||Yes|
|SuZheng|Overseas Chinese Town GroupCorporation|Standingcommitteemember ofPartyCommittee,DeputySecretaryof PartyCommitteeandSecretaryofInspectingDisciplineCommission|1Mar.2008||Yes|
|WangXiaowen|Overseas Chinese Town GroupCorporation|Standingcommitteemember ofPartyCommittee|1Mar.2008||Yes|
|HouSongrong|Overseas Chinese Town GroupCorporation|ConsultantofOCTENTERPRISESCO|1Mar.2014||Yes|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|HeHaibin|Overseas Chinese Town GroupCorporation|Chief ofEnterpriseManagementDepartment|1Feb.2010|Yes|
|HaoGang|Shenzhen Overseas Chinese Town Co.,Ltd.|Chief ofInspectionOffice|1Mar.2010|Yes|
|Notestopost-holdinginshareholder’sunit|1.Excepttheabovesituation,otherdirectors,supervisorsandseniormanagementdidn’tholdanypositionintheshareholders’units.2. It is unknown the ending date of the posts of Mr. Wu Siyuan, Mr. Suzheng, Ms. Wang Xiaowen, Mr. HeHaibinandMr.HaoGangheldintheshareholders’units.3. Mr. Su Zheng has taken the post of Deputy Secretary of party Committee and Secretary of Commission ofOCTENTERPRISESCO.fromMar.2008tonow,andthepostofViceGeneralManagerfromJul.2013tonow.||||

 Post-holdinginotherunits
√Applicable□Inapplicable
|||||||
|-|-|-|-|-|-|
|Name of thepersonholding anypost in otherunits|Nameofotherunit|Positioninotherunit|Beginningdateofofficeterm|Endingdateofofficeterm|Receivespaymentfromotherunit?|
|WuSiyuan|CAAPA|ViceChairman|||No|
|WuSiyuan|ShenzhenTravelAssociation|Chairman|||No|
|WangXiaowen|CentralEnterpriseYouthFederation|VicePresident|||No|
|WangXiaowen|AccountingSocietyofShenzhen|ViceChairman|||No|
|DongYaping|Shenzhen Foundation for Justice andCourage|ViceChairman|||No|
|DongYaping|Advisory Committee of ShenzhenMunicipalGovernment|VicePresident|||No|
|DongYaping|Expert Evaluation Committee forShenzhenMayorQualityAward|Member|||No|
|DongYaping|ChineseCulturePromotionSociety|Member|||No|
|DongYaping|ChinaCulturalIndustryCooperative|Member ofthepresidium|||No|
|FengYutao|AmbarellaInc.|ViceChairman|||Yes|
|YangHaiying|Hamburg Fritz und Mark CertifiedPublicAccountants|VicePresident,GM ofChinese|||Yes|

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|||||
|-|-|-|-|
|||Area||
|ZhangZhong|BeijingZhonglunLawFirm|SeniorAccountant|Yes|
|Notes topost-holdinginotherunits|Mr.WuSiyuan,Ms.WangXiaowenandMr.DongYapingalltookpart-timejobinotherunits,whileMr.FengYutao,Ms.YangHaiyingandMr.ZhangZhongweretheindependentdirectorsoftheCompany.|||

III. Remuneration fordirectors, supervisors and seniormanagementstaffs
Decision-making procedure, determining basis and actual payment for the remuneration of directors, supervisors and senior managementstaffs
(I) Remuneration of directors and supervisors of the Company was submitted for review and approval of theShareholders’General Meeting after the review and approval of the Board of Directors. In the reporting period, the Company did not pay directors (excluding independent directors) or supervisors any remunerations or subsidies. The total remunerations paid to the top three directors that enjoyed the highest amounts were RMB 285,600 thatwas the total remuneration of three independentdirectors. Subsidies for eachindependentdirector of the Company were RMB 80,000 for every year (tax excluded). Other treatment for independent directors: travel expense when they went to attend the Board sessions orShareholders’General Meetings and the expenses when theywereperformingtheirdutiesasstipulatedintherelevantregulationsandtheArticlesofAssociationandother relevantsystems,allthesecouldbereportedfordeletion.
(II) The Board of Directors determined the remuneration of senior management staffs, and referred to the following factors: a. scope of jobs and responsibility shouldered; b. actual profit of the Company; c. market remunerationlevelinthesameindustryandsamearea.
Remunerationofthedirectors,supervisorsandseniormanagementoftheCompanyduringthereportingperiod
Unit: Ten Thousand Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|Name|Position|Sex|Age|Tenurestatus|TotalremunerationgainedfromtheCompany(RMB0’000)|TotalremunerationgainedfromtheunitsoftheShareholders|Totalactualremunerationgainedfromthereportingperiod|
|WuSiyuan|ChairmanoftheBoard|Male|50|Current|3.75|103.38|107.13|
|SuZheng|Director|Male|57|Current|0|137.45|137.45|
|WangXiaowen|Director|Female|44|Current|0|0|0|
|HeHaibin|Director|Male|39|Current|0|71.25|71.25|
|FengYutao|IndependentDirector|Male|46|Current|9.52||9.52|
|YangHaiying|IndependentDirector|Female|46|Current|9.52||9.52|
|ZhangZhong|IndependentDirector|Male|45|Current|9.52||9.52|

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|||||||||
|-|-|-|-|-|-|-|-|
|DongYaping|ChiefSupervisor|Male|60|Current|0|129.5|129.5|
|HaoGang|Supervisors|Male|40|Current|0|||
|LiuYong|Supervisor|Male|42|Current|63.6||63.6|
|LiuFengxi|President|Male|42|Current|90.5||90.5|
|ChengDahou|VicePresident|Male|52|Current|63.8||63.8|
|HuangZhongtian|VicePresident|Male|53|Current|63.8||63.8|
|HeJianjun|VicePresident|Male|43|Current|63.8||63.8|
|XiaoQing|Secretary totheBoard|Male|43|Current|63.8||63.8|
|YangRong|CFO|Female|39|Current|63.8||63.8|
|LinGaike|VicePresident|Male|42|Current|63.8||63.8|
|LiHongtao|VicePresident|Male|46|Current|44.6||44.6|
|HouSongrong|ChairmanoftheBoard|Male|45|Left|123.19|7.06|130.25|
|ChenYuehua|President|Male|50|Left|75.7||75.7|
|MuGang|VicePresident|Male|44|Left|42.8||42.8|
|Total|--|--|--|--|855.5|448.64|1,304.14|

 Notes: 1. In the reporting period, salaries of the president of Board of Directors, Mr. Wu Siyuan, include RMB 1,033,800 from Shenzhen Overseas Chinese Town subsidiary, Shenzhen Overseas Chinese Town Co., Ltd, from January to December and RMB 37,500fromtheCompany.
2. In the reporting period, salaries of the former president of Board of Directors, Mr. Hou Songrong, include RMB 70,600 from Shenzhen Overseas ChineseTown subsidiary,Shenzhen Overseas ChineseTown Co.,Ltd, from September to December andRMB 1,231,900fromtheCompanyfromJanuarytoAugust.
Particularsabout theequityincentivesawarded for thedirectors,supervisorsand seniormanagement staffs oftheCompany during thereportingperiod
□Applicable√Inapplicable
IV.Particulars aboutchanges ofDirectors, Supervisors and SeniorExecutives
||||||
|-|-|-|-|-|
|Name|Position|Type|Date|Reason|
|WuSiyuan|Director,ChairmanoftheBoard|Elected|18Oct.2013|The2013FirstExtraordinary General Meetingheldon18Oct.2013electedMr.WuSiyuanastheDirectorofthe7thBoardofDirectorsandthe48thSessionofthe7thBoard of Directors held on 18 Oct. 2013 elected Mr.Wu Siyuan as the Chairman of the Board of theCompany|
|HouSongrong|Director,|Left|18Oct.2013|Resignedowningtopersonalreason|

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||||||
|-|-|-|-|-|
||ChairmanoftheBoard||||
|LiuFengxi|President|Engaged|25Apr.2013|EngagedbytheBoard|
|LiHongtao|VicePresident|Engaged|25Apr.2013|EngagedbytheBoard|
|HuangZhongtian|VicePresident|Engaged|31Dec.2013|EngagedbytheBoard|
|ChenYuehua|President|Left|25Apr.2013|Resigned owning to personal reason|
|MuGang|VicePresident|Left|17Jun.2013|Resignedowningtopersonalreason|
|ChengDahou|VicePresident|Left|10Jan.2014|Resignedowningtopersonalreason|

V. Particulars about changes in core technical team or key technicians during the reporting period (notdirectors, supervisors or seniormanagement staffs)
TherewerenochangesincoretechnicalteamorkeytechniciansoftheCompanyduringthereportingperiod.
VI.Aboutemployees
(I)Aboutemployees
As to the end of 2013, there were 20,542 employees of the Company in total. Of which there were 1,334 technicians, accounting for6% of the total employees; 3,570, salesperson, accounting for17% of the total employees; 1,764 administrative staffs, accounting for9% of the total employees; and 13,874 production staffs,accountingfor68%ofthetotalemployees.
||||
|-|-|-|
|Type|Numberofpeople|Proportion|
|Technicians|1334|6%|
|Salesperson|3570|17%|
|Administrativestaffs|1764|9%|
|Productionstaffs|13874|68%|
|Total|20542|100%|

2013AnnualReportofKonkaGroupCo.,Ltd.
Technicians
Salesperson
Administrativestaffs
Productionstaffs
As to theendof2013,educationlevel ofemployees ofthe Companywas asfollows: therewere 178personswith master degree and above, accounting for1% of the total employees; 2,973 persons with bachelor degree, accounting for14% of the total employees; 6,907 persons graduated from junior college or technical secondary school, accounting for34% of the total employees; 10,484 persons of others, accounting for51% of the total employees.
||||
|-|-|-|
|Type|Numberofpeople|Proportion|
|Masterdegree andabove|178|1%|
|Bachelordegree|2973|14%|
|Juniorcollege ortechnicalsecondaryschool|6907|34%|
|Others|10484|51%|
|Total|20542|100%|

(II)Employee’sremunerationpolicy
The Company promulgated its remuneration system with the operating strategy of serving for the enterprise development and enhancement, and the principle of deciding the remuneration according to the post, business performance and capabilities, as well as the market competitiveness and internal fairness. And it decided theemployee’s remuneration level according to its business earnings, the posts and fulfillment of the business performanceoftheemployee.
(III)Employee’strainingplan
The Companyadheredtothe people-oriented andpaidspecialattention tocultivate the talents. Surroundedbythe
2013AnnualReportofKonkaGroupCo.,Ltd.
businessdevelopmentandtheconstructionoftalentteam,theCompanyactivelyorganizedandcarriedoutvarious training activities, and continuously perfected its talents cultivation system, as well as further enhanced theemployee’s professional skills and overall quality, so as to strengthen the construction of management talents, professionaltalentsandtechnicaltalentsteams.
In 2013, guided by closing to the business needs, the Company centralized the superior resources to promote the cultivation of key talents. And it organized and carried out the open class project for all the employees, and organized and carried out the newemployee’s training& cultivation projects respectively for the graduates from campus recruiting and personnel from social recruitment. Meanwhile, it centralized to organize the pointed the training projects of general management skills and post professional knowledge, etc for the personnel from marketing,R&D, manufacturing, financial and human resources systems, so as to better complete its annual trainingplan.
Section VIII. Corporate Governance
I.Basicinformation ofcorporate governance
In the reporting period, strictly in accordance with the Company Law, Securities Law of the PRC, Code of Corporate Governance for Listed Companies, Share Listing Rules of Shenzhen Stock Exchange and the relevant rules andregulations of theCSRC, theCompany timely amendedthe internalcontrolsystems suchas theArticles of Association and Administrative Method on Provision of External Financial Aids as well as Management System onInvestors Relationship, continuously perfectedthe corporate governancestructure andstandardized theCompany’s operation. By the end of the reporting period, the actual conditions of corporate governance basically mettherequirementsoftheregulatorydocumentsinrespectofcorporategovernancestructureoflistedcompanies issuedbyCSRC.
(I)ShareholdersandtheShareholders’GeneralMeeting
The Company drew up Articles of Association and Rules for Procedure ofShareholders’ General Meeting, ensured that all shareholders, in particular medium and minor shareholders, enjoy legal rights and equal standard. In the reporting period, the Company was able to publish announcement onShareholders’General Meetings in advance, convenedShareholders’ General Meeting with strictly accordance to relevant requirements, so as to enable the shareholders have their rights of information to theCompany’s material issues and the participation rights. In 2013, the Company convened twoShareholders’General Meeting in total. The Company seriously did well the registration, arrangement and organization work for theShareholders’ General Meeting before the circular on convening theShareholders’General Meeting being published at the designated media. The Company convened theShareholders’General Meeting at the office address of the Company strictly in line with relevant stipulations, which was convenient in traffic, and the shareholders could attend the session in accordance with their actual situation. TheCompany’s directors, supervisors and senior management staffs made explanations anddescriptionfortheshareholders’questionsandadvicesatthesession.
(II)ControllingshareholderandtheCompany
In the reporting period, the controlling shareholders and actual controllers strictly regulated its behavior and
complied with laws in exercising their rights and obligations, not bypassed theShareholders’General Meeting to
2013AnnualReportofKonkaGroupCo.,Ltd.
intervene in theCompany’s decisions and operations directly or indirectly.The Company was separated from the controlling shareholders and actual controllers in aspects of its business, personnel, assets, organ and finance, the Board of Directors, Supervisory Committee and the internal departments of the Company functioned independently.
(III)DirectorsandtheBoardofDirectors
The number and structure of the Board Bureau of the Company were in compliance with laws and regulations. The Company drew up Rules for Procedures of the Board Bureau, so as to ensure a high efficient operation and scientific decision-making of the Board Bureau; the Company has set up Independent Director System and engaged three independent directors. In the reporting period, the number of directors and composition of the Board ofDirectors ofthe Companyas wellas theprocedure ofselection was in accordancewith the requirements of therules andlaws as wellasArticles ofAssociation.TheCompanysetupfour specialcommittees, whichwere FinancialAudit Committee, Nomination Committee, Remuneration&Appraisal Committee, Strategy Committee to provide profession opinion for the decision of the Board of Directors.All the directors carried out their work, fulfilled their duties and scrupulously attended the Board sessions in accordance with Rules of Procedure for the Board of Directors, Rules for Independent Directors, etc. 19 Board sessions were convened by the Company during the reporting period, which brought the decision-making mechanism of the Board of Directors into full play.
(IV)Supervisorsandsupervisorycommittee
The Company has established Rules for Procedures of the Supervisory Committee, persons and structure of the Supervisory Committee was in line with relevant laws and statutes, supervisors can earnestly perform their responsibilities, independently and efficiently executed supervision and check responsibilities with a spirit of being responsible to shareholders. In the reporting period, t he number of supervisors and composition of the Supervisory Committee of the Company as well as their selecting procedure complied with the laws, regulations. In accordance with the requirement of the Rules of Procedure for Supervisory Committee, the supervisors performed their duties in an earnest and responsible manner, and exercised their functions of supervision on the decision-making procedure of the Board of Directors, resolutions and theCompany’s operation by law, and took effective supervision over theCompany’s significant events, related transactions, financial position, as well as the legalityandcomplianceondutyperformancebythedirectors,presidentandotherseniormanagementmembers.(V)PerformanceAppraisalandIncentive&RestrictiveMechanism
The senior management staffs of the Company were recruited on an open basis and in compliance with the laws and regulations. The Company has established and gradually improved the performance appraisal standards and incentive& restrictive mechanism for senior management staffs, so as to attract qualified personnel, and ensure thestabilityofseniormanagementstaffs.
(VI)Interestedparties
During the reporting period,the Companyfully respectedandmaintained the legal rights of the interested parties, andrealizedthebalanceofinterestamongthepartiessuchassociety,shareholdersandemployees,etc.Meanwhile, theCompanyprotectedtherights oftheemployees,promoted theenvironmentalprotection,andactively joinedin thesocialbenefitandcharitablecausesoastojointlypromotesustainableandhealthydevelopment.
(VII)Informationdisclosureandtransparency
The Company strengthened its investor relations management by formulating the Management Rules for Investor Relations and the Management Rules for Information Disclosure. The Company strictly complied with the requirements ofthe laws, regulations and theArticles ofAssociation to disclose its information as required by the relevant regulations on an timely, honest, complete and accurate basis, to ensure the accurate and timely
2013AnnualReportofKonkaGroupCo.,Ltd.
information disclosure, while ensure equal access to information for all shareholders. Owing to his efforts in promoting the standardized operations of the listed companies, implementing the requirements of regulatory authorities, investor relations management, as well as the information disclosure, Mr. Xiao Qing, the Board Secretary, has won the title “Golden Board Secretary of New Fortune” consecutively in five years from the 4th sessiontothe9thsession,andsuccessivelygainedthetitleofBoardSecretaryinActivelyPromotingtheStandards andSelf-disciplinefortheListedCompaniesin2013byShenzhenSecuritiesRegulatoryBureauaftergainingitin 2009,2010,2011and2012.
(VIII)Non-standardgovernance
1.Typeofnon-standardgovernancematterexisted
TherewasasituationthattheCompanydisclosedundisclosedinformation.
2.Typesandcycleofundisclosedinformationprovidedtotheprincipalshareholder
TheCompanyprovidedmonthlyfinancialdatatotheprincipalshareholder.
3.Reasonsfortherelatednon-standardgovernanceexisted
TheCompanysubmitted theundisclosedinformationsuchas monthlyfinancialdatatothesubstantialshareholder directly administrated by the State-ownedAssets Supervision andAdministration Commission ofState Councilin accordancewiththemanagerialdemandofSASAC.
4.ImpactonCompanyindependence
After the self-inspection, the Company kept strictly to the requirements of “Notice on Strengthening the Supervision of Listed Company's Provision of Non-public Information to Substantial Shareholders and Actual Controllers”, and “Supplementary Notice Concerning Strengthening the Supervision of the Non-standard Governance Behavior of Listed Company's Provision of Non-public Information to Substantial Shareholders and Actual Controllers”, while stringently performed the necessary procedures. There existed no circumstances ofsubstantialshareholder’sabuseofcontrolanddisclosureofundisclosedinformationforinsidertrading,andhence, ithasnoimpactontheindependenceoftheCompany.
WhetheritexistsanydifferencebetweenthecorporategovernanceandtheCompanyLawandrelevantrulesofCSRCornot?□Yes√No
ThereisnodifferencebetweenthecorporategovernanceandtheCompanyLawandrelevantrulesofCSRC.
Progressofcorporategovernanceactivities,promulgationandimplementationofRegistrationSystemforInformationInsiders (I)EstablishmentofrobustManagementSystemforInformationInsiders
To further standardize the enterprise inside information management, strengthen the confidentiality of the enterprise inside information and maintain the fairness principle of information disclosed, the company has established Konka Group Incorporated Company Management System for Inside Information and Its Insiders in light of such regulations related to laws, regulations and standardized Files as Company Acts, Securities Law, Listing Company Information Disclosure Management Methods and Listing Company Rules in Shenzhen Stock Exchange; the company revised Management System for Inside Information and Its Insiders according to Regulations on establishment Registration Management System for Inside Information and Its Insiders by the listed company and made by CSRC and Notifications on requirements for further management of inside information by Shenzhen SRC within reporting period. The company strictly implements the system during information disclosure. Meanwhile, seriously implement the company registration and management methods for inside information, register the information insiders, and file the registration in Shenzhen Securities SZSE and ShenzhenSRCaccordingtotherelevantregulations.
Special examination has been taken regarding the inside information management during the period of major
2013AnnualReportofKonkaGroupCo.,Ltd.
projects undertaken and annual reporting in 2013. It is examined that the information insiders did stick to the confidentiality regulations during the period of periodic report, formulation for major projects, examination and disclosure. No inside informationwas disclosed,revealed or spreadto the public, andthe information insiders did not utilize the inside information to sell the company shares prior to the disclosure of major and sensitive information that influences the company share price, and the monitoring departments were not inspected and reformed. Management System for Inside Information and Its Insiders was implemented and controlled properly andefficiently.
For details aboutthe Management System for Inside Information and Its Insiders, please refer to the public notice disclosedonhttp://www.cninfo.com.cn/information/companyinfo.htmldated28Dec.2011.
(II)Establishmentandimplementofmanagementsystemfortheuserofexternalinformation
In order to strengthen the management of the reporting of company inside information, the company has established inside information reporting management system in light of such relevant regulations regarding laws, regulations and standardized files as Securities law of the People's Republic of China, Management methods of information disclosure for listed company, and Konka Group Incorporated Company Management System for Inside Information and Its Insiders, regulating on the reporting scope, procedure and responsibility division of insideinformation.
Specialexaminationhasbeentakenregardingthereportingsituationofinsideinformationmanagementduringthe periodofthemajorprojectsundertakenandannualreportingin2012.Itisexaminedthattheinsideinformation reportingissubjecttotherequirementsofinsideinformationreportingmanagementsystemwhichisimplemented andcontrolledproperlyandeffectively.
II. Particulars about annualshareholders’ general meeting and specialshareholders’ general meeting held duringthe reportingperiod
1.Particularsaboutannualshareholders’generalmeetingheldduringthereportingperiod
|||||||
|-|-|-|-|-|-|
|Session|Conveningdate|Nameofproposal|Resolution|Disclosuredate|Disclosureindex|
|2012AnnualShareholders’GeneralMeeting|20May2013|1.WorkReportoftheBoardofDirectorsin2012;WorkReportoftheSupervisoryCommitteein2012;2012AnnualReport;Proposalon2012AnnualProfitsDistributionPlan;ProposalonEngagementoftheAuditFirmonFinancialStatementsandInternalControl|Alltheproposalswerereviewedandapprovedatthesession.|21May2013|AnnouncementonResolutionsMadeatthe2012AnnualShareholders’GeneralMeeting(AnnouncementNo:2013-12),http://www.cninfo.com.cn|

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||
|-|
|fortheCompanyin2013;ProposalontheAppliancefortheGeneralCreditLimitofBankofChina;ProposalonApplicationforCreditLinebyKonkaMouldPlasticCo.,Ltd.andProposalonRevisingtheRelevantRegulationsoftheArticlesofAssociation|

2.Particularsaboutspecialshareholders’generalmeetingheldduringthereportingperiod
|||||||
|-|-|-|-|-|-|
|Session|Conveningdate|Nameofproposal|Resolution|Disclosuredate|Disclosureindex|
|TheFirstSpecialShareholders’GeneralMeetingfor2013|18Oct.2013|ProposalontheSupplementofthePartlyDirectorsofthe7thBoardofDirectors,ProposalonChangingtheEngagementofthe2013AnnualAuditFirmonFinancialStatementsandInternalControlandProposalonOfferingtheGuaranteefortheOverseasFinancingoftheSubsidiaries|Alltheproposalswerereviewedandapprovedatthesession.|19Oct.2013|AnnouncementonResolutionsMadeatFirstSpecialShareholders’GeneralMeetingfor2013(AnnouncementNo:2013-31),http://www.cninfo.com.cn|

2013AnnualReportofKonkaGroupCo.,Ltd.
III. Performance ofthe IndependentDirectors during theReporting Period
1. Particulars about the independent directors attending the board sessions and theshareholders’ general meetings
||||||||
|-|-|-|-|-|-|-|
|Particularsabouttheindependentdirectorsattendingtheboardsessions|||||||
|Nameofindependentdirectors|Duepresence(times)|Presenceinperson(times)|Presencebytelecommunication(times)|Entrustedpresence(times)|Absence(times)|Failing topresent inperson for twoconsecutivesessionsornot|
|YangHaiying|15|1|14|0|0|No|
|FengYutao|15|2|13|0|0|No|
|ZhangZhong|15|2|13|0|0|No|
|Presenceofindependentdirectorsinshareholders’generalmeeting(times)||5|||||

Explanationonfailingtopresentinpersonfortwoconsecutivesessions:
During the reporting period, therewas no situation of failing to present in person for two consecutive sessions of the Independent Directors.
2.Particularsaboutindependentdirectorsproposeobjectiononrelevantevents
Whetherindependentdirectorsproposeobjectiononrelevanteventsornot?
□Yes√No
Theindependentdirectorsdidn’tproposeobjectiononrelevanteventsduringthereportingperiod.
3.Otherexplanationonperformanceofindependentdirectors
WhethertheadvicesofindependentdirectorsfortheCompanywereadoptedornot?
√Yes□No
ExplanationontheadvicesofindependentdirectorsfortheCompanybeingadoptedornotadopted
Inthereportingperiod,independentdirectorsoftheCompanyactively participatedin relevantmeetings,earnestly reviewed each proposal, and objectively issued their opinions and attitudes and acknowledged operation of the Company, establishment of internal control, and execution of proposals of the Board Bureau andShareholders’ GeneralMeeting.
Astheexpertsofeachfield,theIndependentDirectorsoftheCompanyactivelyprovidedprofessionalsuggestions on internal management, which including: reinforced management on business procedure, reinforced establishment of internal control, reinforced research on advanced technology of color TV, reinforced management oncash flow and accounts receivable, etc..The Company carefully adoptedopinions of independent directors,continuouslyperfectedandimprovedmanagementleveloftheCompany.
2013AnnualReportofKonkaGroupCo.,Ltd.
IV.Performance oftheSpecial Committees undertheBoard duringthe reporting period (I) Summary report on the performance of the Audit Committee subject to the Board of Directors
1.EstablishmentandperfectionofrelatedworkingsystemofFinancialAuditCommittee
ThecompanyhadconstitutedtheWorkRulesfortheFinancialAuditCommitteeundertheBoardwhichillustrated theexactpersonnel,obligationsandrightsoftheFinancialAuditCommitteeundertheBoard.
The Financial Audit Committee under the Board of the Company was composed of three independent directors, includingtwo independentdirectors andonenon-independentdirector,andthe postofChairman was held byMs. YangHaiying,anindependentdirectorwithspecialtyinaccounting.
The FinancialAudit Committee under the Board of the Company has fulfilled the following duties based on the principle of diligence and responsibility and according to relevant laws and regulations of CSRC and Shenzhen Stock Exchange, as well as relevant provisions inWorkRules for the FinancialAuditCommittee under the Board andSystemofIndependentDirectors:
2.IthasfulfilledthefollowingdutiesduringthepreparationofAnnualReport2013:
(1).Reviewedandapprovedthearrangementfor2013annualauditingoftheCompany;
(2). IssuedAudit Opinion of the FinancialAudit Committee on FinancialAccounting Statements Prepared by theCompanybeforeCPAs’entryofAudit;
(3).CommunicatedandexchangedideaswiththeCPAsresponsibleforannualauditingontheproblemsoccurring duringtheauditing;
(4). IssuedAudit Opinion on FinancialAccounting Statements of the Company after CPAs Issued the Preliminary AuditOpinion;
(5).IssuedSummaryReportonAnnualAuditingbyRuihuaCertifiedPublicAccountants.
(6).SubmittedthedecisionontheresolutionoftheannualfinancialstatementoftheCompanytotheBoard (7).SubmittedthedecisionontheresolutionofengagementoftheCPAsin2014totheBoard
3. In 2013, according to the authorization of the Board of Directors, the FinancialAudit Committee accepted the report on the work of theCompany’s InternalAuditing Department and carried out management over the Internal AuditingDepartmentoftheCompanyanditswork.
4.Reviewed financialstatements ofAnnualReport2012, First Quarterly Report2013,Semi-AnnualReport2013, andtheThirdQuarterlyReport2013,andhadnoobjectiontotheaforesaidfinancialstatements.
5. Proposed to engage Ruihua Certified PublicAccountants as the audit institution for annual financial statement auditing2014oftheCompanyafterinvestigation.
6.DuringthepreparationofAnnualReport2013,theCompanymainlyfulfilledthefollowingduties:
(1) Before the CPAs started the annual auditing, the Financial Audit Committee communicated with the CPAs responsible for the annual auditing face to face, and discussed about the personnel component of the auditing group,theplanofauditingandthefocusoftheannualauditing.
(2) It deliberated the Financial Accounting Statements prepared by the Company before theCPAs’ entry of Auditing, and issued the Audit Opinion of the Financial Audit Committee on Financial Accounting StatementsPreparedbytheCompanybeforeCPAs’entryofAudit,withdetailsasfollows:
A.WeagreedtosubmittheFinancialStatementstotheCPAsforauditing.
B. The intermediary institution for annual auditing engaged by the Company should carry out the audit work stringently according to therequirement of Professional CodeofChina’s CPAin the process of auditing, andduly
2013AnnualReportofKonkaGroupCo.,Ltd.
communicatewiththecommitteeifsignificantproblemswerediscovered.
(3) It reviewed the Arrangement for Annual Auditing 2013 of Konka Group Co., Ltd prepared by the CompanybeforetheCPAs’entryofAuditing,andapprovedthearrangementfortheauditingofannualreport2013.
(4).TheFinancialAuditCommitteecommunicatedwiththeinternalauditingdepartmentontheinternalauditing. (5) During the auditing of the annual financial report, the Committee twice sent letters to urge the CPAs responsibleforannualauditingtocompletetheauditingasscheduled.
(6)ItdeliberatedtheFinancialAccountingStatementsoftheCompanyaftertheCPAsissuedthepreliminaryaudit opinion, andissued theAuditOpinion onFinancialAccountingStatements ofthe Company after CPAsIssued the PreliminaryAuditOpinion,withdetailsasfollows:
The Committee kept in touch with the CPAs when the Financial Statements 2013 of the Company were audited. We inquired the management of the Company about the events concerned by the audit institution and again reviewed the Financial Statements of the Company as soon as the intermediary institution formed the preliminary opinion. The annual audit institution of the Company gave an explanation to us on the problems which were discovered during auditing and the events, which needed adjusting, and the Company conducted corresponding adjustmentbasedontheopinionoftheannualauditinstitution.
Wedidn’t have objection to the FinancialAccounting Statements 2013 of the Company audited preliminarily by RuihuaCertifiedPublicAccountants.
(7). It deliberated the Financial Statements 2013 after the auditing by annual audit institution, and issued the resolutionoftheFinancialAccountingStatements2013oftheCompany,withdetailsasfollows:
After careful checking by members of the Financial Audit Committee, we have no objection to the standardunqualifiedAuditors’Report2013oftheCompanyissuedbyRuihuaCertifiedPublicAccountants.
(8).ItissuedtheSummeryReportontheAnnualAuditing2013byRSMChinaCertifiedPublicAccountants. Accordingtothe requirementofrelevantdocumentslikeWorkRulesfortheFinancialAuditCommitteeunderthe Board,itsummarizestheannualauditing2013oftheCompanybytheCPAsasfollows:
Ruihua Certified Public Accountants (hereafter refers to CPA firm) had audited and evaluated the financial condition of Konka Group in 2013, mainly concerning audit assessment on financial condition, annual operation, andcashflowsattheendof2013,aswellasspecialexplanationonfundoccupationofcontrollingshareholdersof the Company and its related parities. During the annual audit, the Financial Audit Committee followed up and cooperated when necessary. After the annual auditing, the CPA firm issued a standard audit report with clean opiniononpaperastotheannualauditingoftheCompany.
A.Generalinformation
The CPAs communicated with the Board of Directors and the management team of the Company and signed the audit engagement with the Company.After negotiation between the Committee and CPAs firm, the overall time schedule of audit on Annual Financial Report 2013 was determined. During field audit of the audit team, the Committee fully communicated with the CPAs, and urged the CPAs to submit the audit report within the agreed timelimit.
The audit team worked efficiently and conscientiously to accomplish all audit procedures within the time limit according to the schedule of the audit plan, acquired enough and proper audit evidences, and submitted an audit reportwithstandardunqualifiedopinion.
B.ProfessionalethicsofaccountantsintheCPAsexecutingannualaudit
During the audit,exceptfor the payment agreed in theauditcontract,the CPAsfirm didnotobtain anyother cash or economic benefit in any other form from the Company.There’s no direct or indirect mutual investment, or
2013AnnualReportofKonkaGroupCo.,Ltd.
close business relationship between the CPAs and the Company, nor there any relation between members of the audit team and decision-making staffs of the Company. During the audit, the CPAs firm and the audit team maintained independence in form and substance, and obeyed requirements concerning keeping independency in basicprinciplesofobeyingprofessionalethicsfromthebeginningtotheend.
The members of the audit team had professional knowledge and relevant professional certificates that were neededtotake ontheaudit,werecompetentfor theaudit,andwereableto maintaindueconcernandprofessional prudence.
C.Opinionabouttheauditplan
During the auditofY2013, the Committee fully negotiated with the CPAs.On thatbasis, the auditteam complied with the overall audit strategy and specific audit plan, which made full preparation for accomplishment of audit assignmentsandreductionofauditrisks.
D.Appraisalontheexecutionofdetailedauditingprocedures
Based on appraising the completeness of internal control, rationality of design and effectiveness of operation, the CPAsfirmdecidedthecontrollingtestproceduresandsubstantivetestprocedurestobeimplemented,soastogain thenecessaryauditingevidenceforissuingtheauditopinion.
E.Communicationduringtheauditing
During theaudit,themembers of theauditteam andtheCompanykeptsustainableandsufficientcommunication, whichresultedinamorematurejudgmentfortheauditortogiveafairauditconclusion.
F.Replytothesupervisionletterandinquiry
During the auditing, the Committee fully communicated and exchanged opinions with the CPAs on the problems occurring during the auditing, and sent the Supervision Letter of Urging the CPAs toSubmittheAuditor’s Report onTime,tourgetheCPAsresponsibleforannualauditingtospeedupthepaceandimprovetheefficiencysoasto accomplish theauditor’s report as scheduled; The CPAs gave positive response to the supervision letters and the inquiry.
G.AssessmentofauditworkexecutedbytheCPAs
During the period of serving as the audit firm of the Company and providing the audit service, Ruihua Certified Public Accountants adhered to conduct independent audit with objective and fair attitude, and it better executed the responsibilities and duties stipulated in the BusinessAgreement, as well as completed the audit work timely. TheAuditCommitteeexpressedsatisfactiontowardstheauditworkin2013conductedbyRuihuaCertifiedPublic Accountants.
(9)ItissuedtheresolutionofengagementofCPAsin2014,withdetailsasfollows:
Since Ruihua Certified PublicAccountants provided the Company with its professional auditing service based on its approved professional etiquette, rigorous work style and upper occupational level in annual audit of Financial Statements 2013 of the Company, the Committee suggested continuing engaging Ruihua Certified Public AccountantsastheauditinstitutionfortheFinancialStatement2014oftheCompany.
(II). Summary report on the performance of the Remuneration Committee subject to the Board ofDirectors
The Remuneration andAppraisal Committee under the Board of Directors was composed of three Directors, two IndependentDirectorsandoneNon-IndependentDirector.Mr.FengYutao,theIndependentDirector,heldthepost ofChairman.
Within the reporting period, the Remuneration andAppraisalCommittee examined the remuneration of Directors, SupervisorsandSeniorManagementStaff,andexpressedopinionsasfollows:
2013AnnualReportofKonkaGroupCo.,Ltd.
1. The remuneration of Directors, Supervisors and Senior Management Staff of the Company disclosed in the AnnualReport2013wasinlinewiththeactualsituation.
2. The disclosed remuneration of theCompany’s Directors, Supervisors and Senior Management Staff complied with the remuneration management system of the Company, and no breach of the remuneration management systemoccurredintheCompany.
V.Performance oftheSupervisory Committee
Whether the Supervisory Committee finds the Company existing risks or not in the supervisory activities during thereportingperiod?
□Yes√No
TheSupervisoryCommitteehasnoobjectiononthesupervisedeventsduringthereportingperiod
VI. Particulars about theCompany’s “five-separation” from the controlling shareholder in respectof business, personnel,assets, organization andfinancing
Within the reporting period, the Company was highly independent in terms of business, staff, assets, organs and financefromitscontrollingshareholders,whichownedindependentlegalrepresentativeandmainstatusinmarket competition, and had independent accounting, as well as possessed complete business system and the ability of independentoperationtofacethemarket.
(I) Business: the Company owned complete supply,R&D, production and sales system, possessed ability of independent operation to face the market by independent operation, independent accounting& decision-making, independent bearing responsibility& risks,didn’t subject to the interference and control of the controlling shareholders,actualcontrolleranditscontrolledenterprises.
(II) Staff: the Company was independent of the controlling shareholder with respect to labor, personnel and salaries management. The Company owned independent team of staffs, the senior management staffs, financial personnel and business personnel received their remunerations in the Company, they were full-time staffs of the Company without holding any post except directors and supervisors inshareholders’ units or other related enterprises.
(III) Assets integrity: the Company had places of production and operation completely separated from the controlling shareholder, and the unaffiliated and integral assets structure, as well as the independent production system, ancillary production system, the ancillary facilities, house property right and other assets, which also possessedindependentprocurementandsalessystem.
(IV) Organ: the Company had its own functional organs adapting to the needs of self-development and market competitiveness, all the functionalorgans were separated from each other in aspects of personnel, office premises and management rules, etc., there existed no particulars about any shareholders, other units or individuals interferingtheorgansettingoftheCompany.
(V) Finance: the Company established an independent finance department with full-time financial personnel and an independent finance and accounting system, and independently carried out the financial work in line with requirements of relevant accounting rules; the Company promulgated sound financial management system to operate independently without sharing the common account with the controlling shareholder, related enterprise, other units or individual; the Company independently declared and paid the tax by laws without particulars onpayingtaxestogetherwithshareholders’units.
VII. Particulars abouthorizontalcompetitions andrelated-party transactions
There were no horizontal competitions arising from part of system reform, characteristics of industry, statepoliciesoracquisitions&merge.
2013AnnualReportofKonkaGroupCo.,Ltd.
VIII.Appraisalandincentivemechanism forseniormanagement staffs
InordertoenabletheseniormanagementstaffsoftheCompanygivebetterperformanceoftheirduties,and clarifytheirrightsandobligations,theCompanyestablishedandimprovedafair,transparentandefficientPerformanceAppraisalStandardandIncentive&RestraintMechanismfortheseniormanagementstaffs.The Companyassessedthedutyperformanceandcompletionofbusinessofseniormanagementstaffsintermsof professionalskills,managementlevelandjobperformance;tookthesalaryplusbonusasamainincentiveway,to improvetheincentiveofseniormanagement.TheseniormanagementstaffwasappraisedbytheBoardof Directors,whichwassupervisedbytheSupervisoryCommittee.
2013AnnualReportofKonkaGroupCo.,Ltd.
Section IX. Internal Control
I.Construction of internal control ofthe Company
AsoneofthekeycompaniesinimplementingthepilotforinternalcontrolstandardsinShenzhenfor2011,the Companycarefullyunderstoodthebasicstandardsofinternalcontrolandrelevantguidelines,andactively deployedandcarriedoutthework,aswellasimplementeddetailedrequirements.In2013,basedoncontinuously deepeningtheconstructionofinternalcontrolsystemandextendingthescopeofinternalcontrolsystem,the Companyassessedtherisks,speciallycombedthesignificantriskpointsandprocedures.Atcurrent,theCompany hascompletedtheconstructionofinternalcontrolsystemandself-appraisalofinternalcontrol.
In order to increase the quality of the self-appraisal work on internal control, theCompany’s internal control department and internal auditing department appraised the overview of the Company in Oct. 2013 and integrated the construction situation on internal control, the Company drafted the self-appraisal plan on internal control and recognition standards of defects, and promulgated the unified template of the work paper for self-appraisal on internal control to standardize the work. And the self-appraisal team of the internal control appraised relevant units according to the plan and formed the work paper. And theCompany’ s internal auditing department summarizedtheworkpaperofvariousbusiness,andissuedtheSelf-appraisalReportonInternalControlfor2013, whichwassubmittedtotheBoardofDirectorsforreviewandapproval.
RuihuaCertifiedPublicAccountantsauditedtheinternalcontroloftheCompanyin2013,andissuedtheAuditor’s ReportonInternalControlofKonkaGroupCo.,Ltd.
II. Statementof theBoard ofDirectors onits responsibilities towards internalcontrol
According to the regulations of the Internal Control Standard System, it is a responsibility of the Board of Directorstoestablish,toperfectandtocarryoutinternalcontrolandtoevaluateitsvalidityaswellastotruthfully disclose the Internal Control Assessment Report; and the Supervisory Committee to conduct supervision to the establishment and execution of internal control by the Board, a responsibility of the management level to in charge of gathering and leading daily operation of internal control. The Board of Directors, the Board of Supervisors, Directors, Supervisors and the Senior Executives of the Company commits that the report does not contain any false or misleading statements or omit any material facts, and ensures the authenticity, accuracy and completenessofthereport.
The goal of internal control of the Company is reasonably to assure the legality of operation, assets security, truthfulness and completeness of financial report and relevant information, promote efficiency and results of operation, advanced the achievement of development strategy of the Company. In terms of the inborn restriction of internal control, the Company can only provide reasonable guarantee to the above mentioned goals. Moreover, situation changes would result in improper internal control or reducing the execution of controlling policies and procedures. It is risky to predict the effectiveness of future internal control according to evaluation results of internalcontrol.
III. Basison establishingthe internal control forfinancialreport
The Company has established the internal control of financial report according to Basic Standard for Enterprise InternalControlandsupportingstipulationsandotherinternalcontrolsupervisionrequirements.
2013AnnualReportofKonkaGroupCo.,Ltd.
IV.Self-appraisal reporton internal control
|||
|-|-|
|Particularsaboutsignificantdefectsofinternalcontrolfoundduringthereportingperiodintheself-appraisalreportoninternalcontrol||
|According to the affirmation of material weakness in internal control of financial report, on the base date of internal controlevaluation,nomaterialweaknessexistsinfinancialreport.TheBoardofDirectorsconsideredthattheCompanyhasmaintainedeffectiveinternalcontroloffinancialreportaccordingtoenterpriseinternalcontrolnormativesystemandrelevantregulations.Accordingtotheaffirmationofmaterialweaknessininternalcontrolofnon-financialreport,onthebasedateofinternalcontrolevaluation,nomaterialweaknessexistsinnon-financialreport.From the base date of internal control evaluation to the date of issuance of internal control evaluation report, no factors ofevaluationconclusionsexisttoaffecttheeffectivenessofinternalcontrol.||
|Disclosure date of theSelf-appraisal Report on InternalControl|4Apr.2014|
|Disclosure index of theSelf-appraisal Report on InternalControl|http://www.cninfo.com.cn/information/companyinfo.html|

V.Auditor’s report oninternal control
√Applicable□Inapplicable
|||
|-|-|
|AuditopinionparagraphintheAuditor’sReportfortheInternalControl||
|Disclosure date of the Auditor’sReportonInternalControl|4Apr.2014|
|Disclosureindexof theAuditor’sReportonInternalControl|http://www.cninfo.com.cn/information/companyinfo.html|

WhethertheCPAsfirmissuesanAuditor’sReportonInternalControlwithnon-standardopinionornot?
□Yes√No
WhethertheAuditor’sReportonInternalControlfromtheCPAsfirmisinconsistentwiththeSelf-appraisalReportfromtheBoard ornot?
√Yes□No
VI. Establishment and execution of rules of accountability for significant mistakes in annual report information disclosure
In order to improve the enterprise standard operating level and increase the accountability for the responsible persons of annual report information disclosure and improve the quality and increase the transparency of information disclosure, enhance the authenticity, accuracy, completeness and promptness, the Konka Group has determined to formulate Rules of Accountability for Significant Mistakes in Annual Report Information Disclosure of Konka Group Co., Ltd. after examination of the 39thSession of the 6th Board of Directors of Konka GroupCo.,Ltd.
During the reporting period, no major mistakes on information disclosure for the annual report occurred in the company.
Duringthereportingperiod,noamendmentonmajoraccountingmistakesoccurred.
Duringthereportingperiod,noreplenishmentonmajoromittinginformationoccurred.
Duringthereportingperiod,norevisiononperformanceannouncementinadvanceoccurred.
2013AnnualReportofKonkaGroupCo.,Ltd.
Section X. Financial Report
I.Auditor’sReport
|||
|-|-|
|Typeofauditopinion|Standardunqualifiedauditopinion|
|Dateforsigningtheauditor’sreport|3Apr.2014|
|Nameoftheauditor’sinstitution|RuihuaCPAs(LLP)|
|NameoftheCPA|LiuJianhua,TangQimei|

Auditor’sReport
Totheshareholders of Konka GroupCo., Ltd.,
We have audited the accompanying financial statements of Konka Group Co., Ltd. (hereafter referred to as “the Company”) and its subsidiaries{hereafter referred to as “the Group” ingeneral} which comprise the consolidated andcompany’s balance sheets as at 31 Dec. 2013, and the consolidated andcompany’s income statements, the consolidated andcompany’s cash flow statements and the consolidated andcompany’s statements of changes inowners’equity for the year then ended and notes to thesefinancial statements.
I.Management’s ResponsibilityfortheFinancial Statements
The management is responsible for the preparation of these financial statements in accordance with the Accounting Standards for Business Enterprises. This responsibility includes: (1) preparing financial statements according to theAccounting Standards for Business Enterprises and make them a fair presentation; and (2) designing, implementing and maintaining internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
II.Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the China Standards on Auditing. Those standards require that we comply with ethical requirements of China CPAs and plan and perform the audit to obtain reasonable assurancewhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity’s preparation of the financial statements and fair statement in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating theoverall presentation ofthefinancial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for ouraudit opinion.
III.Auditopinion
2013AnnualReportofKonkaGroupCo.,Ltd.
In our opinion, the financial statements have been prepared in accordance with the Accounting Standards for Business Enterprises in all material respects and give a fair view of the Company and itssubsidiaries’ consolidated financial positions as at 31 Dec. 2013 and the consolidated business results and cash flows for the year then ended, as well as theCompany’s financial positions as at 31 Dec. 2013and business resultsand cash flows for theyear then ended.
RuihuaCertified PublicAccountants (LLP) CPA:
China_Beijing
CPA:
2Apr.2014
II. Financialstatements
Currency unit for thestatements in thenotes to thesefinancial statements: RMBYuan
1.Consolidatedbalancesheet
PreparedbyKonkaGroupCo.,Ltd.
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|CurrentAssets:|||
|Monetaryfunds|1,843,743,089.94|1,728,946,511.11|
|Settlementreserves|0.00|0.00|
|Intra-grouplendings|0.00|0.00|
|Transactionalfinancialassets|0.00|0.00|
|Notesreceivable|4,150,779,374.32|5,033,056,004.97|
|Accountsreceivable|2,460,996,984.92|1,975,605,771.07|
|Accountspaidinadvance|164,272,929.59|183,008,022.27|
|Premiumsreceivable|0.00|0.00|
|Reinsurancepremiumsreceivable|0.00|0.00|
|Receivable reinsurance contractreserves|0.00|0.00|
|Interestreceivable|2,898,419.90|7,171,998.73|
|Dividendreceivable|0.00|0.00|
|Otheraccountsreceivable|298,749,414.95|316,590,715.96|
|Financial assets purchased underagreementstoresell|0.00|0.00|
|Inventories|3,582,669,024.26|4,059,339,049.25|
|Non-current assets due within 1|0.00|0.00|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|year|||
|Othercurrentassets|0.00|0.00|
|Totalcurrentassets|12,504,109,237.88|13,303,718,073.36|
|Non-currentassets:|||
|Loans by mandate and advancesgranted|0.00|0.00|
|Available-for-salefinancialassets|941,999.30|1,187,177.20|
|Held-to-maturityinvestments|0.00|0.00|
|Long-termaccountsreceivable|0.00|0.00|
|Long-termequityinvestment|446,155,499.42|472,423,533.19|
|Investingproperty|237,986,524.12|235,680,171.89|
|Fixedassets|1,908,503,979.80|1,887,836,271.02|
|Constructioninprogress|49,924,027.97|50,682,893.85|
|Engineeringmaterials|0.00|0.00|
|Disposaloffixedassets|0.00|0.00|
|Productionbiologicalassets|0.00|0.00|
|Oil-gasassets|0.00|0.00|
|Intangibleassets|359,585,571.12|290,280,443.01|
|R&Dexpense|0.00|0.00|
|Goodwill|3,943,671.53|3,943,671.53|
|Long-termdeferredexpenses|13,405,084.94|6,261,286.45|
|Deferredincometaxassets|218,728,739.41|310,903,676.56|
|Othernon-currentassets|0.00|0.00|
|Totalofnon-currentassets|3,239,175,097.61|3,259,199,124.70|
|Totalassets|15,743,284,335.49|16,562,917,198.06|
|Currentliabilities:|||
|Short-termborrowings|5,239,069,764.48|5,456,351,486.48|
|BorrowingsfromCentralBank|0.00|0.00|
|Customerbankdepositsandduetobanksandotherfinancialinstitutions|0.00|0.00|
|Intra-groupborrowings|0.00|0.00|
|Transactionalfinancialliabilities|0.00|0.00|
|Notespayable|565,137,790.84|846,746,137.62|
|Accountspayable|3,341,804,144.12|2,735,993,787.52|
|Accountsreceivedinadvance|482,716,035.68|441,836,467.09|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Financialassetssoldforrepurchase|0.00|0.00|
|Handlingchargesandcommissionspayable|0.00|0.00|
|Employee’scompensationpayable|332,090,987.76|305,003,416.73|
|Taxpayable|-94,670,496.91|-231,087,836.60|
|Interestpayable|34,945,870.48|27,651,352.67|
|Dividendpayable|0.00|0.00|
|Otheraccountspayable|1,391,396,130.97|1,364,756,260.46|
|Reinsurancepremiumspayable|0.00|0.00|
|Insurancecontractreserves|0.00|0.00|
|Payables for acting trading ofsecurities|0.00|0.00|
|Payablesforactingunderwritingofsecurities|0.00|0.00|
|Non-currentliabilitiesduewithin1year|1,755,444.00|810,000,000.00|
|Othercurrentliabilities|0.00|0.00|
|Totalcurrentliabilities|11,294,245,671.42|11,757,251,071.97|
|Non-currentliabilities:|||
|Long-termborrowings|5,000,000.00|400,000,000.00|
|Bondspayable|0.00|0.00|
|Long-termpayables|31,366,530.13|30,000,000.00|
|Specificpayables|0.00|0.00|
|Projectedliabilities|911,085.41|2,511,814.54|
|Deferredincometaxliabilities|-|563,067.21|
|Othernon-currentliabilities|131,658,369.11|125,743,462.22|
|Totalnon-currentliabilities|168,935,984.65|558,818,343.97|
|Totalliabilities|11,463,181,656.07|12,316,069,415.94|
|Owners’ equity (or shareholders’equity)|||
|Paid-upcapital(orsharecapital)|1,203,972,704.00|1,203,972,704.00|
|Capitalreserves|1,274,405,942.78|1,272,420,328.46|
|Less:Treasurystock|0.00|0.00|
|Specificreserves|0.00|0.00|
|Surplusreserves|847,908,466.28|827,291,207.52|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Provisionsforgeneralrisks|0.00|0.00|
|Retainedprofits|737,991,722.40|725,485,704.10|
|Foreignexchangedifference|16,179,316.17|14,421,594.77|
|Total equity attributable to owners oftheCompany|4,080,458,151.63|4,043,591,538.85|
|Minorityinterests|199,644,527.79|203,256,243.27|
|Total owners’ (or shareholders’)equity|4,280,102,679.42|4,246,847,782.12|
|Total liabilities and owners’ (orshareholders’)equity|15,743,284,335.49|16,562,917,198.06|

Legalrepresentative:WuSiyuan Chiefoftheaccountingwork:YangRong Chiefoftheaccountingorgan:XuYoushan 2.BalancesheetoftheCompany
PreparedbyKonkaGroupCo.,Ltd.
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|CurrentAssets:|||
|Monetaryfunds|1,118,577,010.98|1,232,222,002.19|
|Transactionalfinancialassets|||
|Notesreceivable|3,963,969,934.07|4,745,072,740.14|
|Accountsreceivable|1,543,050,476.67|1,236,932,980.35|
|Accountspaidinadvance|239,011,903.60|194,043,254.39|
|Interestreceivable|12,151,753.22|7,894,632.07|
|Dividendreceivable|||
|Otheraccountsreceivable|668,297,184.77|743,098,527.06|
|Inventories|2,333,107,085.15|2,840,661,422.34|
|Non-current assets due within 1year|||
|Othercurrentassets|||
|Totalcurrentassets|9,878,165,348.46|10,999,925,558.54|
|Non-currentassets:|||
|Available-for-salefinancialassets|941,999.30|1,187,177.20|
|Held-to-maturityinvestments|505,000,000.00|395,000,000.00|
|Long-termaccountsreceivable|||
|Long-termequityinvestment|1,675,299,526.82|1,693,717,169.87|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Investingproperty|237,986,524.12|235,680,171.89|
|Fixedassets|599,950,784.99|555,870,405.39|
|Constructioninprogress|8,713,508.63|5,584,347.15|
|Engineeringmaterials|||
|Disposaloffixedassets|||
|Productionbiologicalassets|||
|Oil-gasassets|||
|Intangibleassets|76,133,522.45|24,518,958.53|
|R&Dexpense|||
|Goodwill|||
|Long-termdeferredexpenses|4,597,304.79|1,811,365.14|
|Deferredincometaxassets|183,062,820.76|223,333,764.57|
|Othernon-currentassets|||
|Totalofnon-currentassets|3,291,685,991.86|3,136,703,359.74|
|Totalassets|13,169,851,340.32|14,136,628,918.28|
|Currentliabilities:|||
|Short-termborrowings|1,023,913,426.22|2,451,684,485.86|
|Transactionalfinancialliabilities|||
|Notespayable|190,949,990.17|597,563,690.81|
|Accountspayable|6,320,384,438.01|3,664,516,644.48|
|Accountsreceivedinadvance|186,326,967.62|1,197,059,751.70|
|Employee’scompensationpayable|187,697,895.87|164,101,581.67|
|Taxpayable|-92,265,968.33|-245,006,993.34|
|Interestpayable|21,189,076.79|19,388,598.90|
|Dividendpayable|||
|Otheraccountspayable|1,243,478,983.84|1,189,885,260.79|
|Non-currentliabilitiesduewithin1year||800,000,000.00|
|Othercurrentliabilities|||
|Totalcurrentliabilities|9,081,674,810.19|9,839,193,020.87|
|Non-currentliabilities:|||
|Long-termborrowings||400,000,000.00|
|Bondspayable|||
|Long-termpayables|||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Specificpayables|||
|Projectedliabilities|||
|Deferredincometaxliabilities|||
|Othernon-currentliabilities|74,192,786.56|78,428,442.55|
|Totalnon-currentliabilities|74,192,786.56|478,428,442.55|
|Totalliabilities|9,155,867,596.75|10,317,621,463.42|
|Owners’ equity (or shareholders’equity)|||
|Paid-upcapital(orsharecapital)|1,203,972,704.00|1,203,972,704.00|
|Capitalreserves|1,250,133,590.04|1,249,290,161.88|
|Less:Treasurystock|||
|Specificreserves|||
|Surplusreserves|847,908,466.28|827,291,207.52|
|Generalriskprovision|||
|Retainedprofits|711,968,983.25|538,453,381.46|
|Foreignexchangedifference|||
|Total owners’ (or shareholders’)equity|4,013,983,743.57|3,819,007,454.86|
|Total liabilities and owners’ (orshareholders’)equity|13,169,851,340.32|14,136,628,918.28|

Legalrepresentative:WuSiyuan Chiefoftheaccountingwork:YangRong Chiefoftheaccountingorgan:XuYoushan 3.Consolidatedincomestatement
PreparedbyKonkaGroupCo.,Ltd.
Unit:RMBYuan
||||
|-|-|-|
|Item|Amountin2013|Amountin2012|
|I.Totaloperatingrevenues|20,006,736,878.82|18,337,861,657.29|
|Including:Salesincome|20,006,736,878.82|18,337,861,657.29|
|Interestincome|||
|Premiumincome|||
|Handling charge andcommissionincome|||
|II.Totaloperatingcost|20,131,217,931.64|18,487,599,770.04|
|Including:Costofsales|16,660,981,623.13|15,038,090,498.84|
|Interestexpenses|||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Handling charge andcommissionexpenses|||
|Surrenders|||
|Netclaimspaid|||
|Netamountwithdrawnfortheinsurancecontractreserve|||
|Expenditure on policydividends|||
|Reinsurancepremium|||
|Taxesandassociatecharges|66,486,229.01|74,295,105.05|
|Selling and distributionexpenses|2,548,603,146.99|2,316,627,717.67|
|Administrativeexpenses|674,386,382.45|655,654,771.02|
|Financialexpenses|-59,637,103.92|179,516,279.32|
|Assetimpairmentloss|240,397,653.98|223,415,398.14|
|Add: Gain/(loss) from change in fairvalue(“-”meansloss)||22,101,173.97|
|Gain/(loss) from investment (“-”meansloss)|54,985,150.49|7,421,147.82|
|Including: share of profits inassociatesandjointventures|-12,083,013.71|2,204,872.01|
|Foreign exchange gains (“-” meansloss)|||
|III.Businessprofit(“-”meansloss)|-69,495,902.33|-120,215,790.96|
|Add:non-operatingincome|274,574,465.25|223,297,060.56|
|Less:non-operatingexpense|23,017,661.08|11,255,184.94|
|Including:lossfromnon-currentassetdisposal|14,360,857.36|5,307,902.07|
|IV.Totalprofit(“-”meansloss)|182,060,901.84|91,826,084.66|
|Less:Incometaxexpense|122,216,964.78|46,387,509.80|
|V.Netprofit(“-”meansloss)|59,843,937.06|45,438,574.86|
|Including: Net profit achievedby combined parties before thecombinations|||
|Attributable to owners of theCompany|45,163,004.10|45,829,234.02|
|Minorityshareholders’income|14,680,932.96|-390,659.16|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|VI.Earningspershare|--|--|
|(I)Basicearningspershare|0.0375|0.0381|
|(II)Dilutedearningspershare|0.0375|0.0381|
|Ⅶ.Othercomprehensiveincomes|3,697,250.17|78,068.05|
|Ⅷ.Totalcomprehensiveincomes|63,541,187.23|45,516,642.91|
|Attributable to owners of theCompany|48,906,339.82|45,907,302.07|
|Attributable to minorityshareholders|14,634,847.41|-390,659.16|

Legalrepresentative:WuSiyuan Chiefoftheaccountingwork:YangRong Chiefoftheaccountingorgan:XuYoushan 4.IncomestatementoftheCompany
PreparedbyKonkaGroupCo.,Ltd.
Unit:RMBYuan
||||
|-|-|-|
|Item|Amountin2013|Amountin2012|
|I.Totalsales|21,088,709,589.78|18,895,064,412.59|
|Less:costofsales|18,567,798,472.02|16,498,564,931.61|
|Businesstaxesandsurcharges|41,392,084.79|51,860,611.21|
|Distributionexpenses|1,966,043,135.65|1,819,421,859.64|
|Administrativeexpenses|391,582,455.69|401,126,236.47|
|Financialcosts|-4,691,473.89|90,641,026.22|
|Impairmentloss|148,223,458.29|121,009,956.25|
|Add: gain/(loss) from change in fairvalue(“-”meansloss)||21,760,628.97|
|Gain/(loss) from investment (“-”meansloss)|101,015,674.49|148,270,013.83|
|Including: income form investmentonassociatesandjointventures|-1,317,643.05||
|II.Businessprofit(“-”meansloss)|79,377,131.72|82,470,433.99|
|Add:non-businessincome|186,103,507.58|130,239,601.26|
|Less:non-businessexpense|11,123,290.82|6,164,013.24|
|Including:lossfromnon-currentassetdisposal|4,610,114.75|2,443,522.31|
|III.Totalprofit (“-”meansloss)|254,357,348.48|206,546,022.01|
|Less:incometaxexpense|48,184,760.89|26,713,904.79|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|IV.Netprofit (“-”meansloss)|206,172,587.59|179,832,117.22|
|V.Earningspershare|--|--|
|(I)Basicearningspershare|||
|(II)Dilutedearningspershare|||
|VI.Othercomprehensiveincome|843,428.16|-3,265,933.76|
|VII.Totalcomprehensiveincome|207,016,015.75|176,566,183.46|

 Legalrepresentative:WuSiyuan Chiefoftheaccountingwork:YangRong Chiefoftheaccountingorgan:XuYoushan 5.Consolidatedcashflowstatement
PreparedbyKonkaGroupCo.,Ltd.
Unit:RMBYuan
||||
|-|-|-|
|Item|Amountin2013|Amountin2012|
|I. Cash flows from operatingactivities:|||
|Cash received from sale ofcommoditiesandrenderingofservice|19,149,831,826.42|17,700,056,550.42|
|Net increase of deposits fromcustomersandduesfrombanks|||
|Net increase of loans from thecentralbank|||
|Net increase of funds borrowedfromotherfinancialinstitutions|||
|Cash received from premium oforiginalinsurancecontracts|||
|Netcashreceivedfromreinsurancebusiness|||
|Net increase of deposits of policyholdersandinvestmentfund|||
|Netincreaseofdisposaloftradablefinancialassets|||
|Cash received from interest,handlingchargesandcommissions|||
|Net increase of intra-groupborrowings|||
|Netincreaseoffundsinrepurchasebusiness|||
|Taxrefundsreceived|445,649,913.63|333,819,164.11|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Other cash received relating tooperatingactivities|401,782,475.55|476,678,406.07|
|Subtotal of cash inflows fromoperatingactivities|19,997,264,215.60|18,510,554,120.60|
|Cashpaidforgoodsandservices|13,716,426,040.28|13,879,627,713.74|
|Net increase of customer lendingsandadvances|||
|Net increase of funds deposited inthecentralbankandamountduefrombanks|||
|Cash for paying claims of theoriginalinsurancecontracts|||
|Cash for paying interest, handlingchargesandcommissions|||
|Cashforpayingpolicydividends|||
|Cashpaidtoandforemployees|1,720,868,462.67|1,494,404,314.87|
|Varioustaxespaid|871,996,380.86|2,327,300,280.10|
|Other cash payment relating tooperatingactivities|1,402,619,130.90|1,168,466,726.47|
|Subtotal of cash outflows fromoperatingactivities|17,711,910,014.71|18,869,799,035.18|
|Net cash flows from operatingactivities|2,285,354,200.89|-359,244,914.58|
|II. Cash flows from investingactivities:|||
|Cash received from withdrawal ofinvestments|13,072,260.00|2,657,324.08|
|Cash received from return oninvestments|3,048,179.22|7,179,366.22|
|Net cash received from disposal offixed assets, intangible assets andotherlong-termassets|31,815,716.67|17,094,279.30|
|Net cash received from disposal ofsubsidiariesorotherbusinessunits|15,589,409.93|0.00|
|Other cash received relating toinvestingactivities|0.00|937,689,984.14|
|Subtotal of cash inflows frominvestingactivities|63,525,565.82|964,620,953.74|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Cash paid to acquire fixed assets,intangible assets and other long-termassets|289,680,969.24|229,763,450.73|
|Cashpaidforinvestment||202,800,000.00|
|Netincreaseofpledgedloans|||
|Net cash paid to acquiresubsidiariesandotherbusinessunits|0.00|0.00|
|Other cash payments relating toinvestingactivities|0.00||
|Subtotal of cash outflows frominvestingactivities|289,680,969.24|432,563,450.73|
|Net cash flows from investingactivities|-226,155,403.42|532,057,503.01|
|III. Cash Flows from FinancingActivities:|||
|Cash received from capitalcontributions|||
|Including: Cash received fromminority shareholder investments bysubsidiaries|||
|Cashreceivedfromborrowings|4,446,790,462.43|7,617,903,693.08|
|Cash received from issuance ofbonds|||
|Other cash received relating tofinancingactivities|1,373,173,635.00|5,623,390,510.74|
|Subtotal of cash inflows fromfinancingactivities|5,819,964,097.43|13,241,294,203.82|
|Repaymentofborrowings|6,328,759,973.89|8,542,487,185.69|
|Cash paid for interest expensesanddistributionofdividendsorprofit|113,539,680.93|159,354,391.33|
|Including: dividends or profitpaid by subsidiaries to minorityshareholders|||
|Other cash payments relating tofinancingactivities|514,212,344.46|4,525,478,841.70|
|Sub-total of cash outflows fromfinancingactivities|6,956,511,999.28|13,227,320,418.72|
|Net cash flows from financing|-1,136,547,901.85|13,973,785.10|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|activities|||
|IV. Effect of foreign exchange ratechangesoncashandcashequivalents|24,795,356.22|-9,194,254.86|
|V. Net increase in cash and cashequivalents|947,446,251.84|177,592,118.67|
|Add: Opening balance of cashandcashequivalents|824,043,169.37|646,451,050.70|
|VI. Closing balance of cash and cashequivalents|1,771,489,421.21|824,043,169.37|

Legalrepresentative:WuSiyuan Chiefoftheaccountingwork:YangRong Chiefoftheaccountingorgan:XuYoushan 6.CashflowstatementoftheCompany
PreparedbyKonkaGroupCo.,Ltd.
Unit:RMBYuan
||||
|-|-|-|
|Item|Amountin2013|Amountin2012|
|I. Cash flows from operatingactivities:|||
|Cash received from sale ofcommoditiesandrenderingofservice|15,536,885,920.45|13,228,739,122.47|
|Taxrefundsreceived|306,475,465.74|191,901,062.62|
|Other cash received relating tooperatingactivities|222,292,296.60|400,212,824.56|
|Subtotal of cash inflows fromoperatingactivities|16,065,653,682.79|13,820,853,009.65|
|Cashpaidforgoodsandservices|10,752,636,021.84|12,255,906,511.94|
|Cashpaidtoandforemployees|899,546,170.04|803,574,319.86|
|Varioustaxespaid|429,678,415.71|1,944,882,993.85|
|Other cash payment relating tooperatingactivities|1,240,775,472.49|1,024,460,122.23|
|Subtotal of cash outflows fromoperatingactivities|13,322,636,080.08|16,028,823,947.88|
|Net cash flows from operatingactivities|2,743,017,602.71|-2,207,970,938.23|
|II. Cash flows from investingactivities:|||
|Cash received from retraction ofinvestments|20,818,708.75|2,657,324.08|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Cash received from return oninvestments|20,775,384.81|29,573,746.23|
|Net cash received from disposal offixed assets, intangible assets andotherlong-termassets|23,612,029.68|16,381,461.44|
|Net cash received from disposal ofsubsidiariesorotherbusinessunits|||
|Other cash received relating toinvestingactivities|395,000,000.00|885,212,861.40|
|Subtotal of cash inflows frominvestingactivities|460,206,123.24|933,825,393.15|
|Cash paid to acquire fixed assets,intangible assets and other long-termassets|127,592,493.28|86,461,316.62|
|Cashpaidforinvestment||202,800,000.00|
|Net cash paid to acquiresubsidiariesandotherbusinessunits|||
|Other cash payments relating toinvestingactivities|505,000,000.00|45,000,000.00|
|Subtotal of cash outflows frominvestingactivities|632,592,493.28|334,261,316.62|
|Net cash flows from investingactivities|-172,386,370.04|599,564,076.53|
|III. Cash Flows from FinancingActivities:|||
|Cash received from capitalcontributions|||
|Cashreceivedfromborrowings|336,991,724.88|3,200,590,880.06|
|Cash received from issuance ofbonds|||
|Other cash received relating tofinancingactivities|1,373,173,635.00|5,560,776,481.96|
|Subtotal of cash inflows fromfinancingactivities|1,710,165,359.88|8,761,367,362.02|
|Repaymentofborrowings|2,958,578,227.90|2,463,849,434.01|
|Cash paid for interest expensesanddistributionofdividendsorprofit|73,643,572.75|96,059,743.60|
|Other cash payments relating to|509,442,099.71|4,494,645,607.28|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|financingactivities|||
|Sub-total of cash outflows fromfinancingactivities|3,541,663,900.36|7,054,554,784.89|
|Net cash flows from financingactivities|-1,831,498,540.48|1,706,812,577.13|
|IV. Effect of foreign exchange ratechangesoncashandcashequivalents|12,665,335.22|-8,406,442.67|
|V. Net increase in cash and cashequivalents|751,798,027.41|89,999,272.76|
|Add: Opening balance of cashandcashequivalents|365,891,615.75|275,892,342.99|
|VI. Closing balance of cash and cashequivalents|1,117,689,643.16|365,891,615.75|

Legalrepresentative:WuSiyuan Chiefoftheaccountingwork:YangRong Chiefoftheaccountingorgan:XuYoushan7.Consolidatedstatementofchangesinowners’equity
PreparedbyKonkaGroupCo.,Ltd.
2013
Unit:RMBYuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Item|Reportingperiod||||||||||
||EquityattributabletoownersoftheCompany||||||||Minorityinterests|Totalowners’equity|
||Paid-upcapital(orsharecapital)|Capitalreserve|Less:treasurystock|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|Others|||
|I. Balance at the end of thepreviousyear|1,203,972,704.00|1,272,420,328.46|||827,291,207.52||725,485,704.10|14,421,594.77|203,256,243.27|4,246,847,782.12|
|Add:changeofaccountingpolicy|||||||||||
|Correction of errors inpreviousperiods|||||||||||
|Other|||||||||||
|II. Balance at the beginningoftheyear|1,203,972,704.0|1,272,420,328.4|||827,291,207.52||725,485,704.10|14,421,594.77|203,256,243.27|4,246,847,782.12|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||0|6||||||
|III. Increase/ decrease ofamount in the year (“-”meansdecrease)||1,985,614.32|20,617,258.76|12,506,018.30|1,757,721.40|-3,611,715.48|33,254,897.30|
|(I)Netprofit||||45,163,004.10||14,680,932.96|59,843,937.06|
|(II) Other comprehensiveincomes||1,985,614.32||0.00|1,757,721.40|-46,085.55|3,697,250.17|
|Subtotalof(I)and(II)||1,985,614.32||45,163,004.10|1,757,721.40|14,634,847.41|63,541,187.23|
|(III) Capital paid in andreducedbyowners||||||-5,833,335.93|-5,833,335.93|
|1. Capital paid in byowners||||||||
|2. Amounts ofshare-based paymentsrecognizedinowners’equity||||||||
|3.Others||||||-5,833,335.93|-5,833,335.93|
|(IV)Profitdistribution|||20,617,258.76|-32,656,985.80||-12,413,226.96|-24,452,954.00|
|1. Appropriations tosurplusreserves|||20,617,258.76|-20,617,258.76||||
|2. Appropriations togeneralriskprovisions||||||||
|3. Appropriations toowners(orshareholders)||||-12,039,727.04||-12,413,226.96|-24,452,954.00|
|4.Other||||||||
|(V) Internal carry-forwardofowners’equity||||||||
|1. New increase ofcapital(orsharecapital)fromcapitalpublicreserves||||||||
|2. New increase of||||||||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|capital(orsharecapital)fromsurplusreserves||||||||
|3. Surplus reserves formakinguplosses||||||||
|4.Other||||||||
|(Ⅵ)Specificreserve||||||||
|1. Withdrawn for theperiod||||||||
|2.Usedintheperiod||||||||
|(Ⅶ)Other||||||||
|IV.Closingbalance|1,203,972,704.00|1,274,405,942.78|847,908,466.28|737,991,722.40|16,179,316.17|199,644,527.79|4,280,102,679.42|

2012
Unit:RMBYuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Item|Lastyear||||||||||
||EquityattributabletoownersoftheCompany||||||||Minorityinterests|Totalowners’equity|
||Paid-upcapital(orsharecapital)|Capitalreserve|Less:treasurystock|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|Others|||
|I. Balance at the end of thepreviousyear|1,203,972,704.00|1,275,686,262.22|||809,307,995.80||709,679,408.84|11,077,592.96|226,903,292.66|4,236,627,256.48|
|Add: retrospectiveadjustments due to businesscombinations under the samecontrol|||||||||||
|Add:changeofaccountingpolicy|||||||||||
|Correction of errors inpreviousperiods|||||||||||
|Other|||||||||||
|II. Balance at the beginningoftheyear|1,203,972,704.0|1,275,686,262.2|||809,307,995.80||709,679,408.84|11,077,592.96|226,903,292.66|4,236,627,256.48|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||0|2||||||
|III. Increase/ decrease ofamount in the year (“-”meansdecrease)||-3,265,933.76|17,983,211.72|15,806,295.26|3,344,001.81|-23,647,049.39|10,220,525.64|
|(I)Netprofit||||45,829,234.02||-390,659.16|45,438,574.86|
|(II) Other comprehensiveincomes||-3,265,933.76|||3,344,001.81|-418,762.62|-340,694.57|
|Subtotalof(I)and(II)||-3,265,933.76||45,829,234.02|3,344,001.81|-809,421.78|45,097,880.29|
|(III) Capital paid in andreducedbyowners||||||||
|1. Capital paid in byowners||||||||
|2. Amounts ofshare-based paymentsrecognizedinowners’equity||||||||
|3.Others||||||||
|(IV)Profitdistribution|||17,983,211.72|-30,022,938.76||-22,837,627.61|-34,877,354.65|
|1. Appropriations tosurplusreserves|||17,983,211.72|-17,983,211.72||||
|2. Appropriations togeneralriskprovisions||||||||
|3. Appropriations toowners(orshareholders)||||-12,039,727.04||-22,837,627.61|-34,877,354.65|
|4.Other||||||||
|(V) Internal carry-forwardofowners’equity||||||||
|1. New increase ofcapital(orsharecapital)fromcapitalpublicreserves||||||||
|2. New increase ofcapital(orsharecapital)fromsurplusreserves||||||||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|3. Surplus reserves formakinguplosses||||||||
|4.Other||||||||
|(Ⅵ)Specificreserve||||||||
|1. Withdrawn for theperiod||||||||
|2.Usedintheperiod||||||||
|(Ⅶ)Other||||||||
|IV.Closingbalance|1,203,972,704.00|1,272,420,328.46|827,291,207.52|725,485,704.10|14,421,594.77|203,256,243.27|4,246,847,782.12|

Legalrepresentative:WuSiyuan Chiefoftheaccountingwork:YangRong Chiefoftheaccountingorgan:XuYoushan8.Statementofchangesinowners’equityoftheCompany
PreparedbyKonkaGroupCo.,Ltd.
2013
Unit:RMBYuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Item|Amountin2013||||||||
||Paid-upcapital(orsharecapital)|Capitalreserve|Less:treasurystock|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|Totalowners’equity|
|I. Balance at the end of thepreviousyear|1,203,972,704.00|1,249,290,161.88|||827,291,207.52||538,453,381.46|3,819,007,454.86|
|Add: change of accountingpolicy|||||||||
|Correction of errors inpreviousperiods|||||||||
|Other|||||||||
|II. Balance at thebeginningoftheyear|1,203,972,704.00|1,249,290,161.88|||827,291,207.52||538,453,381.46|3,819,007,454.86|
|III. Increase/ decrease ofamount in the year (“-” meansdecrease)||843,428.16|||20,617,258.76||173,515,601.79|194,976,288.71|
|(I)Netprofit|||||||206,172,587.59|206,172,587.59|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||
|-|-|-|-|-|-|
|(II) Other comprehensiveincomes||843,428.16|||843,428.16|
|Subtotalof(I)and(II)||843,428.16||206,172,587.59|207,016,015.75|
|(III) Capital paid in andreducedbyowners||||||
|1. Capital paid in byowners||||||
|2. Amounts ofshare-based paymentsrecognizedinowners’equity||||||
|3.Others||||||
|(IV)Profitdistribution|||20,617,258.76|-32,656,985.80|-12,039,727.04|
|1. Appropriations tosurplusreserves|||20,617,258.76|-20,617,258.76||
|2. Appropriations togeneralriskprovisions||||||
|3. Appropriations toowners(orshareholders)||||-12,039,727.04|-12,039,727.04|
|4.Other||||||
|(V) Internal carry-forwardofowners’equity||||||
|1.Newincreaseofcapital(or share capital) from capitalpublicreserves||||||
|2.Newincreaseofcapital(or share capital) from surplusreserves||||||
|3. Surplus reserves formakinguplosses||||||
|4.Other||||||
|(Ⅵ)Specificreserve||||||
|1. Withdrawn for theperiod||||||
|2.Usedintheperiod||||||
|(Ⅶ)Other||||||
|IV.Closingbalance|1,203,972,704.|1,250,133,590.|847,908,466.28|711,968,983.25|4,013,983,743.|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|00|04|57|

 2012
Unit:RMBYuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Item|Lastyear||||||||
||Paid-upcapital(orsharecapital)|Capitalreserve|Less:treasurystock|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|Totalowners’equity|
|I. Balance at the end of thepreviousyear|1,203,972,704.00|1,252,556,095.64|||809,307,995.80||388,644,203.00|3,654,480,998.44|
|Add: change of accountingpolicy|||||||||
|Correction of errors inpreviousperiods|||||||||
|Other|||||||||
|II. Balance at the beginning oftheyear|1,203,972,704.00|1,252,556,095.64|||809,307,995.80||388,644,203.00|3,654,480,998.44|
|III. Increase/ decrease ofamount in the year (“-” meansdecrease)||-3,265,933.76|||17,983,211.72||149,809,178.46|164,526,456.42|
|(I)Netprofit|||||||179,832,117.22|179,832,117.22|
|(II) Other comprehensiveincomes||-3,265,933.76||||||-3,265,933.76|
|Subtotalof(I)and(II)||-3,265,933.76|||||179,832,117.22|176,566,183.46|
|(III) Capital paid in andreducedbyowners|||||||||
|1. Capital paid in byowners|||||||||
|2. Amounts ofshare-based paymentsrecognizedinowners’equity|||||||||
|3.Others|||||||||
|(IV)Profitdistribution|||||17,983,211.72||-30,022,938.76|-12,039,727.04|
|1. Appropriations tosurplusreserves|||||17,983,211.72||-17,983,211.72||
|2. Appropriations to|||||||||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||
|-|-|-|-|-|-|
|generalriskprovisions||||||
|3. Appropriations toowners(orshareholders)||||-12,039,727.04|-12,039,727.04|
|4.Other||||||
|(V)Internalcarry-forwardofowners’equity||||||
|1.Newincrease ofcapital(or share capital) from capitalpublicreserves||||||
|2.Newincrease ofcapital(or share capital) from surplusreserves||||||
|3. Surplus reserves formakinguplosses||||||
|4.Other||||||
|(Ⅵ)Specificreserve||||||
|1. Withdrawn for theperiod||||||
|2.Usedintheperiod||||||
|(Ⅶ)Other||||||
|IV.Closingbalance|1,203,972,704.00|1,249,290,161.88|827,291,207.52|538,453,381.46|3,819,007,454.86|

 Legalrepresentative:WuSiyuan Chiefoftheaccountingwork:YangRong Chiefoftheaccountingorgan:XuYoushan III.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. inAugust 1991upon approval of thePeople’s Government of Shenzhen Municipality, and has its ordinary shares (A-share and B-share) listed on Shenzhen Stock Exchange with prior consent from thePeople’s Bank ofChina Shenzhen Special Economic Zone Branch. On August 29, 1995, the Company, renamed to “Konka Group Co., Ltd.”, obtained corporate business license(registrationNo.:440301501121863)withitsmainbusinessfallingintoelectronicindustry.
2.ShareCapitalChangesuponEstablishment
OnNovember 27,1991,withapprovalfromtheSRYFZNo.102[1991]documentasissuedbythePeople’sBank of China Shenzhen Special Economic Zone Branch, Shenzhen Konka Electronic Co., Ltd., during December
8—December 31, 1991, has issued 128,869,000 RMB ordinary shares (A-share) at a par value of RMB1.00 per
share,ofwhichtheoriginalnetassetswereconvertedinto98,719,000state-ownedinstitutionalshares,30,150,000
2013AnnualReportofKonkaGroupCo.,Ltd.
new shares were issued, including 26,500,000 circulating shares issued to the public and 3,650,000 staff shares issuedtothestaffoftheCompany.
OnJanuary29,1992,withapprovalfromtheSRYFZNo.106[1991]documentasissuedbythePeople’sBankof China Shenzhen Special Economic Zone Branch, Shenzhen Konka Electronic Co., Ltd., during December 20,1991— January 31, 1992, has issued to investors abroad 58,372,300 RMB special shares (B-share) at a par value of RMB1.00 per share,of which48,372,300 shares heldby the former foreign investorandfounder—HongKong GanghuaElectronic GroupCo.,Ltd.are convertedinto foreignlegalperson’s shares,and10,000,000B-shares are issuedadditionally.
On April 10, 1993, the Proposal on Profit Distribution and Dividend Payout 1992 was adopted at the second general meeting of shareholders of the Company.With approval from the SZBF No. 2[1993] documentas issued by Shenzhen Securities Regulatory Office, the Company began to perform dividend policy for FY 1992 as of April 30, 1993: distributing RMB 0.90 in cash plus 3.5 bonus shares for every 10 shares to all shareholders. The totalcapitalstockreached187,473,150sharesafterthisdistribution.
OnApril18,1994,theProposalonProfitDistributionandDividendPayout1993wasadoptedatthethird general meeting of shareholders of the Company. With approval from the SZBF No. 115[1994] document as issued by ShenzhenSecurities RegulatoryOffice,theCompanybegantoperformdividendpolicyforFY1993asofJune10, 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 281,209,724sharesafterthisdistributionandcapitalizationfromcapitalpublicreserve.
On June 2, 1994, in accordance with the provisions that “staff shares could go public and be transferred six monthsafterlisting”,asjointlypromulgatedbytheStateCommissionforRestructuringtheEconomicSystemand the StateCouncil’s Securities Commission, the staff shares of the Company was planned to be listed on the flow onJune6,1994,withthepriorconsentofShenzhenSecuritiesRegulatoryOfficeandShenzhenStockExchange. On October 8, 1994, the Proposal on Negotiable Bonus Shares of B-Share Corporate Shareholders 1992 was adopted at the 1994 interim general meeting of shareholders of the Company. With approval from the SZBF No. 224[1994] document as issued by Shenzhen Securities Regulatory Office, the 16,930,305 bonus shares for FY 1992grantedtoforeignlegalpersonswerelistedandnegotiatedatB-sharemarketonOctober26,1994.
On February 6, 1996, the Proposal on Share Allotment Modes 1996 was adopted at the 1996 interim general metering of shareholders of the Company. With approval from the SZBF No. 5[1996] document as issued by Shenzhen Securities Regulatory Office, and reexamination from the ZJPSZ No. 16[1996] document and ZJGZ No. 2[1996] document as issued by China Securities Regulatory Commission, on July 16, 1996 and October 29, 1996, all shareholders were respectively allotted three shares for every ten existing shares held at RMB 6.28/A-share andHKD 5.85/B-share. Corporate shareholders tooktheir respective existing sharesas basesfor full subscriptionoftheallocableshares.Thetotalcapitalstockreached365,572,641sharesafterthisallotment. On January 25, 1998, the Plan on Share Allotment 1998 was adopted at the 1998 interim general meeting of shareholders of the Company. With approval from the ZZBZ No. 29[1998] document as issued by Shenzhen Securities Regulatory Office, and ZJSZ No.64[1998] document as issued by China Securities Regulatory
2013AnnualReportofKonkaGroupCo.,Ltd.
Commission, on July 15, 1998, negotiable A-shares were allotted in proportion of 3:10 at RMB 10.50/A-share. For such reasons as continued weakness in B-share secondary market (lower than share allotment price), B-share negotiation and allotment plan was canceled, and the corporate shareholders of the Company waived the preemptiveright.Thetotalcapitalstockreached389,383,603sharesafterthisallotment.
On June 30, 1999, the Proposal on Profit Distribution and Capitalization from Capital Public Reserve 1998 was adoptedattheeighth generalmeetingofshareholdersoftheCompany.OnAugust20,1999,theprofitdistribution for FY1998 was carried out: all shareholders were presented RMB3.00 in cash for every 10 shares, plus 2 shares capitalizedfromcapitalpublicreserve.Thetotalcapitalstockreached467,260,323sharesafterthiscapitalization. On June 30, 1999, the Plan on A-Share Issue for Capital Increase was adopted at the eighth general meeting of shareholders of the Company. With approval from the ZJFXZ No.140[1999] document as issued by China Securities Regulatory Commission, on November 1, 1999, 80,000,000 A-shares were additionally issued to the publicatRMB15.50/share.Thetotalcapitalstockreached547,260,323sharesafterthisadditionalissue.
On May 30, 2000, the Plan on Profit Distribution and Dividend Payout 1999 was adopted at the ninth general meetingofshareholdersoftheCompany.OnJuly25,2000,theprofitdistributionforFY1999wascarriedout:all shareholders were distributed RMB4.00 in cash plus 1 bonus shares for every 10 shares. The total capital stock reached601,986,352sharesafterthisdistribution.
On April 3, 2008, the 7th meeting of the sixth Board of Directors was convened, during which the following resolutions were discussed and adopted: based on the total capital stock of 601,986,352 shares for the year ended December 31,2007, capitalizationfrom capitalpublicreserve wasmadeto allshareholdersataproportionof 1:1, namely 10 new shares for every 10 existing shares.And the said resolution was subject to approval by the 2007 annualgeneralmeetingofshareholdersconvenedonMay26,2008.TheCompany,inJune2008,implementedthe capitalization from capital public reserve and went through the formalities for transfer registration with China Securities DepositoryandClearing Corporation Limited.On December 16,2008, with approvalfrom theSMGZF 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 industryandcommerceonApril10,2009.Thetotalcapitalstockreached1,203,972,704sharesafterchange. 3.Approvedbusinessscope:researchanddevelopment,productionandoperationofsuchhouseholdappliancesas televisions, refrigerators, washing machines,and personalelectronic appliances;manufacturing andapplication of home AV, IPTV set-top boxes, digital TV receivers (including ground receiving equipment of satellite television broadcasting), digital products, mobile communication equipments and terminal products, daily-use electronic products, automotive electronic products, satellite navigation systems, intelligent transportation systems, fire-fighting and security systems, office equipments, computers, displays, large screen display systems; LED (OLED) back light, illumination, light-emitting devices, and packaging thereof; Touch TV AIO, wireless broadcasting television transiting equipment; electronic parts and components, moulds, plastic and rubber products, and packing materials, design and in-door installation security products, monitoring products, wireless and cable digital television system and system integration, and technical consultancy and after-sale paid services of related products( except mobile phone, the other products in the above business scope are manufactured in other places outside Shenzhen); Wholesale, retail, import& export and relevant support services of the aforesaid
2013AnnualReportofKonkaGroupCo.,Ltd.
products (including spare parts) (Commodities subject to state trading management are not involved. Products involved in quota, license management and other specified management shall be subject to the relevant state provisions.); sale of self-developed technological achievements; provision of maintenance services, technical consultant service for electronic products; ordinary cargo transportation, domestic freight forwarding, warehousing services; consultancy on enterprise management; and self-owned property leasing and management services, recovery of waste electrical appliances and electronic products (excluding dissembling) (operated by branch offices); and outsourcing services of information technology and business procedures by means of undertaking services in the way of outsourcing, including management and maintenance of system application, management of information technology, bank background service, financial settlement, human resource service, softwaredevelopment,callcenter,anddataprocessing.
4.Theparentcompany,aswellastheactualcontrolleroftheCompanyisOverseasChineseTownGroupCo.,Ltd., and the ultimate controller is the State-owned Assets Supervision and Administration Commission of the State Council.
5. The financial statements of the Company were submitted upon approval of the Board of Directors on 4 Apr. 2014.
6.AchecklistofcorporatenamesandtheirabbreviationsmentionedinthisReport
|||
|-|-|
|Corporatename|Abbreviation|
|ShenzhenKonkaTelecommunicationsTechnologyCo.,Ltd.|TelecommunicationTechnology|
|ShenzhenKonkaVideo&CommunicationSystemsEngineeringCo.,Ltd.|Video&CommunicationSystemsEngineering|
|ShenzhenKonkaPrecisionMoldManufacturingCo.,Ltd.|PrecisionMold|
|ShenzhenKonkaElectronicCo.,Ltd.|KonkaElectronic|
|ShenzhenKonkaInformationNetworkCo.,Ltd.|InformationNetwork|
|ShenzhenKonkaPlasticProductsCo.,Ltd.|PlasticProducts|
|ShenzhenShushidaElectronicCo.,Ltd.|Shushida|
|ShenzhenElectronicFittingsTechnologyCo.,Ltd.|FittingsTechnology|
|MudanjiangArcticOceanAppliancesCo.,Ltd.|MudanjiangAppliances|
|ShaanxiKonkaElectronicCo.,Ltd.|ShaanxiKonka|
|ChongqingKonkaElectronicCo.,Ltd.|ChongqingKonka|
|ChongqingKonkaAutomotiveElectronicCo.,Ltd.|ChongqingElectronic|
|ChongqingQingjiaElectronicsCo.,Ltd.|ChongqingQingjia|
|AnhuiKonkaElectronicCo.,Ltd.|AnhuiKonka|
|AnhuiKonkaHouseholdAppliancesCo.,Ltd.|AnhuiHouseholdAppliances|
|ChangshuKonkaElectronicCo.,Ltd.|ChangshuKonka|
|KunshanKonkaElectronicCo.,Ltd.|KunshanKonka|
|DongguanKonkaElectronicCo.,Ltd.|DongguanKonka|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||
|-|-|
|Corporatename|Abbreviation|
|DongguanKonkaPackingMaterialsCo.,Ltd.|DongguanPacking|
|DongguanKonkaMouldPlasticCo.,Ltd.|DongguanMouldPlastic|
|BoluoKonkaPCBCo.,Ltd.|BoluoKonka|
|BoluoKonkaPrecisionTechnologyCo.,Ltd.|BoluoPrecision|
|Konka(Nanhai)DevelopmentCenter|NanhaiInstitute|
|HongKongKonkaCo.,Ltd.|HongKongKonka|
|KonkaHouseholdAppliancesInvestment&DevelopmentCo.,Ltd.|KonkaHouseholdAppliancesInvestment|
|KonkaHouseholdAppliancesInternationalTradingCo.,Ltd.|KonkaHouseholdAppliancesInternationalTrading|
|KONKAAMERICA,INC.|KONKAAMERICA|
|Konka(Europe)Co.,Ltd.|KonkaEurope|
|Konka(Kunshan)RealEstateInvestmentCo.,Ltd.|KunshanRealEstate|
|DongguanXutongdaMouldPlasticCo.,Ltd.|Xutongda|
|ShenzhenKonkaOptoelectronicTechnologyCo.,Ltd.|KonkaOptoelectronic|
|ShenzhenWankaidaScienceandTechnologyCo.,Ltd.|Wankaida|
|KunshanKangshengInvestmentDevelopmentCo.,Ltd.|KunshanKangsheng|
|AnhuiKonkaTongchuangHouseholdAppliancesCo.,Ltd.|AnhuiTongchuang|
|IndonesiaKonkaElectronicsCo.,Ltd.|IndonesiaKonka|
|ShenzhenShushidaLogisticsServiceCo.,Ltd.|ShushidaLogistics|
|BeijingKonkaElectronicCo.,Ltd.|BeijingKonkaElectronic|
|KunshanJielunteMouldPlasticCo.,Ltd.|KunshanJielunte|
|WuhanJielunteMouldPlasticCo.,Ltd.|WuhanJielunte|
|ChuzhouJielunteMouldPlasticCo.,Ltd.|ChuzhouJielunte|

IV.Main accounting policy,accounting estimate and priorperiod errors
1.Basisforthepreparationoffinancialstatements
With the going-concern assumption as the basis, the Group prepared its financial statements in light of the actual transactions and events, as well as the Basic Standard and 38 specific standards of Accounting Standards for Business Enterprises issued by the Ministry of Finance ofthe PRC on 15 Feb. 2006, theApplication Guidance of Accounting Standards for Business Enterprises, the Interpretation of Accounting Standards for Business Enterprises and other regulations issued thereafter (jointly referred to as “the Accounting Standards for Business Enterprises”), and the Rules for Preparation Convention of Disclosure of Public Offering Companies
No.15—General Regulations for Financial Reporting (revised in 2010) by China Securities Regulatory
Commission(CSRC).
2013AnnualReportofKonkaGroupCo.,Ltd.
In accordance with the Accounting Standards for Business Enterprises, accounting activities of the Group were conducted on the accrual basis. Except for some financial instruments, the financial statements were prepared on the basis of historical costs. Where impairment occurred in an asset, the corresponding impairment provision was withdrawnaccordingtorelevantrules.
2.StatementofCompliancewiththeAccountingStandardsforBusinessEnterprises
The financial statements for Y2013 prepared by the Group are in compliance with the requirements of the Accounting Standards for Business Enterprises, factually and completely presenting theCompany’s and theGroup’s financial positions as at 31 Dec. 2013, and operating results, cash flows and other relevant information for the year then ended. Furthermore, these financial statements, in all material respects, are also in line with relevant disclosure requirements for financial statements and notes thereof stipulated in the Rules for Preparation Convention of Disclosure of Public Offering CompaniesNo.15—General Regulations for Financial Reporting (revisedin2010)byCSRC.
3.Fiscalperiod
TheGroup’saccountingperiodsaredividedintoannualperiods(yearly)andinterimperiods.Theinterimperiodis a reporting period which is shorter than a full fiscal year. Gregorian calendar is adopted for fiscal year of the Company,namelyfrom1Jan.to31Dec.everyyear.
4.Recordingcurrency
Renminbi (RMB) is the prevailing currency used in the main economic circumstances of the Company and its domestic subsidiaries. The Company and its domestic subsidiaries adopt RMB as the recording currency. When preparingthefinancialstatementsforY2012,theGroupadoptedRMBastherecordingcurrency.
5.Accountingmethodsforbusinesscombinationsunderthesamecontrolandnotunderthesamecontrol (1)Businesscombinationsunderthesamecontrol
Abusiness combination under the same control is a business combination in which all the enterprises involved in the combination are ultimately controlled by the same party or 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 enterprise(s) involved in the business combination on the combining date is the combining party,and the other enterprise(s) involved in the business combination is (are) the combined party. The "combining date" refers to the date on which the combining party obtains actual 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 shall be adjusted. If the additionalpaid-incapitalisnotsufficienttobeoffset,theretainedearningsshallbeadjusted.
Thedirectcostforthebusinesscombination ofthecombining partyshallberecordedintotheprofitsandlossesat thecurrentperiod.
2013AnnualReportofKonkaGroupCo.,Ltd.
(2)Businesscombinationsnotunderthesamecontrol
Abusiness combination not under the same control is a business combination in which the combining enterprises arenotultimatelycontrolledbythesame partyorthesamepartiesbothbeforeandafterthebusinesscombination. 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. The "acquisitiondate"referstothedateonwhichtheacquireractuallyobtainsthecontrolontheacquiree.
As for business combinations not under the same control, the combination costs shall be 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, and intermediary agency fees for auditing, legal, consulting services,etc.andotheradministrative expendituresincurredforthebusinesscombination, whichwererecordedin the profits and losses at the current period when incurred. The trading expenditures arising from theacquirer’s issuance of equity or liabilities securities as the consideration for the business combination are recorded in the initial recognition amountfor theequityorliabilities securities.The contingentconsiderationinvolved isrecorded in the combination costsaccordingtoits fair value onthe acquisitiondate.Where newor furtherevidence against theexistingcircumstancesontheacquisitiondateoccurswithin12monthsaftertheacquisitiondate,whichmakes it necessary to adjust the contingent consideration, the combined business reputation is adjusted accordingly.The combination costs of the acquirer andthe identifiable netassets obtained in the combination are both measured at their fair values on the acquisition date.The positive balance between the combination costs and the fair value of theidentifiable netassetstheacquirerobtainsfromthe acquireeisrecognizedasbusinessreputation.Theacquirer shall, pursuant to the following provisions, treat the balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree: a. it shall reexamine 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; b. if, after the reexamination, the combination costs are still less than the fair value of the identifiable net assetsitobtainsfromtheacquiree,itshallrecordthebalanceintotheprofitsandlossesofthecurrentperiod. As forthe unrecognized deductible temporary differencesof theacquireeobtainedby theacquirerduetotheir not satisfying the recognition criteria for deferred income tax assets on the acquisition date, if new or further information within 12 months after the acquisition date shows that the relevant circumstances on the acquisition date has existed and that the economic benefits arising from the deductible temporary differences of the acquiree on the acquisition date are expected to be realized, the corresponding deferred income tax assets are recognized and the business reputation is written down in the mean time. If the business reputation is not sufficient to offset, the difference is recognized in the profits and losses at the current period. Except for the aforesaid circumstance, the recognized deferred income tax assets in relation to the business combination are recorded in the profits and lossesatthecurrentperiod.
6.Detailedaccountingpoliciesofequitydisposalbystagestocontrolloss
(1)Principleofjudgmentof“packagedeal”
The non-controlled enterprise merger of transactions by stages, according to Notice About Ministry of Finance
2013AnnualReportofKonkaGroupCo.,Ltd.
Releasing EnterpriseAccountingStandardsExplanationNo.5(CK[2012]19) forthe criteria judgmentof “package deal”(refertonote4and5)tojudgewhetherseveraltransactionsarepartof“packagedeal”.
(2)Accountingtreatmentmethodsof“packagedeal”
Any transactions of “package deal” should be handled according to former description of this part andNote 4, 13 Long-termEquityInvestment.
(3)Accountingtreatmentmethodsofnon“packagedeal”
Any transactions notbelonging to “package deal”, itshould behandled according toindividualfinancialreportor consolidatedfinancialreport:
In individual financial report, the sum of book value ofBuyer’s equity investment held before purchase date and new investment costs on purchase data should be regarded as the initial investment costs. Stock equity held by acquiree before purchase date involving other comprehensive income should transfer in current investment incometogetherwithothercomprehensiveincomewhendisposingtheinvestment.
In consolidatedfinancialreport, thestock equityhold byacquireebeforepurchasedate should berevalued byfair value on purchase date. Difference of fair value and book value should transfer in current investment income. Stock equity hold by acquiree before purchase date involving other comprehensive income and other comprehensiveincomeshouldtransferincurrentinvestmentincomeofthepurchasedate.
7.Preparationofconsolidatedfinancialstatements
(1)Preparationofconsolidatedfinancialstatements
(1)Ascertainmentoftheconsolidationscope
The scope of consolidated financial statements shall be confirmed based on the control. Control means the Company can decide the financial and manage policy of investee entity and have authority to earn the benefit from the investee entity. The consolidation scope includes the Company and all its subsidiaries. TheCompany’s subsidiariesrefertotheenterprisesorentitiescontrolledbytheCompany.
(2)Preparationmethodsforconsolidatedfinancialstatements
TheGroupconsolidatesasubsidiaryfromthedatewhentheGroupobtainsactualcontroloverthesubsidiary’snet assets and production and operation decision-making and de-consolidates it from the date when such control ceases. As for a disposed subsidiary, its operating results and cash flows before the disposal date are properly included in the consolidated income statement and the consolidated cash flow statement. As for a subsidiary disposed in the current period, the opening accounts in the consolidated balance sheet are not restated. For a subsidiary acquired in a business combination not under the same control, its operating results and cash flows after the acquisition date are properly included in the consolidated income statement and the consolidated cash flow statement, and the opening accounts and comparative accounts in the consolidated financial statements are not restated. For a subsidiary acquired in a business combination under the same control or a merged party under
2013AnnualReportofKonkaGroupCo.,Ltd.
merge and consolidation, its operating results and cash flows for the period from the beginning of the reporting period to the combination date are properly included in the consolidated income statement and the consolidated cash flow statement, and the comparative accounts in the consolidated financial statements are restated in the meantime.
Inthepreparationof theconsolidatedfinancialstatements,whereasubsidiaryadoptsdifferentaccountingpolicies or accounting periods from those of the Company, thesubsidiary’s financial statements are adjusted according totheCompany’saccountingpolicyandaccountingperiods.Forasubsidiaryobtainedinabusinesscombinationnot under the same control, its financial statements are adjusted on the basis of the fair value of its identifiable net assetsontheacquisitiondate.
All significant balances, transactions and unrealized profits within the Group are offset in the preparation of the consolidatedfinancialstatements.
Theportionsinasubsidiary’sshareholders’equityandnetcurrentprofitsandlossesthatarenotattributabletothe Company are separately presented, as minority interests and minority shareholder gains and losses respectively, undertheshareholders’equity item and the netprofititem in theconsolidated financialstatements.The portion in thesubsidiary’s current net gains and losses that belongs to minority interests is presented as “minority shareholder gains and losses” under the net profit item in the consolidated income statement. Where thesubsidiary’s losses attributable to minority shareholders exceed the portion in thesubsidiary’s openingowners’ equityattributabletominorityshareholders,minorityinterestsareoffset.
Where the Company loses control over a former subsidiary due to disposal of some equity investment or other reasons, the residual equity interests are re-measured according to the fair value on the date when such control ceases. The summation of the consideration obtained from the equity disposal and the fair value of the residual equity interests, minus the portion in the formersubsidiary’s net assets measured on a continuous basis from the acquisition date that is attributable to the Company according to its former shareholding ratio in the subsidiary, is recorded in the investment gains for the reporting period when theCompany’s control over the subsidiary ceases. Other comprehensive incomes in relation to the former equity investment in the subsidiary are transferred to the investment gains at the current period when theCompany’s control over the subsidiary ceases. Later on, subsequent measurement is carried out on the residual equity interests in accordance with the “Accounting Standards for Business EnterprisesNo.2—Long-term Equity Investment” or the “Accounting Standards for Business EnterprisesNo.22—Recognition and Measurement of Financial Instruments” and other relevant regulations. For more details, please refer to “13. Long-term Equity Investment” or “10. Financial Instruments” undertheNoteIV.
If the Company disposes the equity investment of subsidiaries by stages until rights of control are lost, it should handle all transactions of equity investment of subsidiaries until control rights lost by distinguishing whether it belongs to package deal. If the terms, conditions or economic impact of transactions of equity investment of subsidiaries comply with one or more conditions, the transactions would be handled as package deal:① transactions are concludedconsidering theinfluences;② transactionsachieve integrated commercial results as a whole;③ occurrence of one transaction depends on other transactions;④ one transaction is not economic independentlybuteconomicwithothertransactions.Nonpackagedealtransactionshouldbehandledaccordingto “PartialDisposalofLong-term EquityRightInvestmentwithoutLosingtheControlling Rights”(NoteIV,13)and “LosingControllingRightsofOriginalSubsidiaries DuetoHandlingPartialEquityInvestmentorotherReasons”. If thetransactionsofhandlingequityinvestmentofsubsidiaries andlosingcontrolling rightsarepackage deal,the
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transactions should behandled with accounts as that of subsidiaries losing controlling rights. However,difference of disposing price payment and shares of net assets of subsidiaries of disposing investment before losing controlling rights, other comprehensive income in consolidated financial report should transfer in current profits andlossesoflosingcontrollingrights.
(2) Ifstock rights of the same subsidiary have been bought and sold in two continuous accounting years, or soldandbought,accountingtreatmentmethodsshouldbepublished.
There was no stock right belonging to the same subsidiary have been bought and sold in two continuous accountingyears,orsoldandbought.
8.Recognitionstandardforcashandcashequivalents
The term “cash” refers to cash on hand and deposits that are available for payment at any time. The term “cash equivalents” refers to short-term ( within 3 months from the purchase date) and highly liquid investments that are readilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangeinvalue. 9.Foreigncurrencybusinessesandtranslationofforeigncurrencyfinancialstatements
(1)Foreigncurrencytransaction
(1)Translationofforeigncurrencytransactions
Atthetimeofinitialrecognitionofaforeigncurrencytransaction,theGroupshallconverttheamountinaforeign currency into amount in its Renminbi at the spot exchange rate (generally refer to the middle price of market exchange rate published by thePeople’s Bank of China, the same below) on the day the transaction is occurred. Of which, as for such transactions as foreign exchange or involving in foreign exchange, the Company shall convertedintoamountintheRenminbiatactualexchangeratethetransactionisoccurred.
(2)Treatmentmethodfortheforeigncurrencymonetaryitemsandforeigncurrencynon-monetaryitems:
Onthebalancesheetdate,theforeigncurrencymonetaryitemsaretranslatedatthespotexchangerateonthedate. Exchange differences are recorded in the profits and losses at the current period except for the following circumstances:① Exchange differences arising from the special foreign currency borrowings for the acquisition and constructionof assets eligible for capitalization are treated in accordancewith the principle ofborrowing cost capitalization;② Exchange differences arising from the net investment hedging instruments in an overseas operation are recorded in other comprehensive incomes and can be recognized in the profits and losses at the current period only when the net investment is disposed (the balance was recorded into other comprehensiveincome,orcurrentprofitsandlossesuntilthenetinvestmentbeingdisposed);and③Exchangedifferencesarising fromchanges inthecarryingbalancesotherthantheamortizedcostsofforeign currencymonetaryitemsavailable forsalearerecordedinothercomprehensiveincomes.
Foreign currency non-monetary items measured at historical costs are translated into RMB at the spot exchange
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rate on the transaction date. The foreign currency non-monetary items measured at the fair value are translated at the spot exchange rate onthe fair value confirming date, from which the exchange difference is treated as change in fair value (including change in exchange rate) and recorded in the profit and loss of the current period, or treatedasothercomprehensiveincomesandrecordedinthecapitalreserves.
(2)Translationofforeigncurrencyfinancialstatements
(3)Translationofforeigncurrencyfinancialstatements
Where the consolidated financial statements involve an overseas operation and foreign currency monetary items form in a substantial basis on the net investment in the overseas operation, exchange differences arising from exchange rate changes are recorded in the “translation difference of foreign currency statements” item under theowners’ equity item; and recorded in the profits and losses at the reporting period of the disposal when the overseasoperationisdisposed.
The foreign currency financial statements of an overseas operation are translated in RMB in accordance with the followingmethods:Theassetandliabilityitemsinthebalancesheetsshallbetranslatedataspotexchangerateon the balance sheet date. Among theowner’s equity items, except the ones as “retained profits”, others shall be translated at the spot exchange rate at the time when they are incurred. The income and expense items in the profits statements shall be translated at the average exchange rate of the current period on transaction date. The opening retained profit is the closing retained profit as of the previous year after translation;The closing retained profit is measured and stated according to profit distribution items after translation; And the difference betweentheassetitemsandthesummationoftheliabilityandshareholders’equityitemsaftertranslation,asthetranslation difference of foreign currency statements, is recognized in other comprehensive incomes and is presented separately under theshareholders’equity item in the balance sheet. Where an overseas operation is disposed and theGroup’s control on the overseas operation ceases, the foreign currency statement translation difference in relation to the overseas operation and presentedunder theshareholders’equity items in the balancesheetis, all or accordingtothedisposalrateoftheoverseasoperation,transferredtotheprofitsandlossesatthereportingperiod comprisingthedisposal.
Foreign currency cash flows and cash flows generated by overseas subsidiaries are translated at the average exchange rate for the current period on the date when the cash flow is generated. The influence on cash due to changeofexchangerateshallbepresentedseparatelyunderthecashflowstatement.
The opening amounts and the actual amounts in the previous year are presented on the basis of the translated financialstatementsforthepreviousyear.
10.Financialinstruments
Categoryoffinancialassets
Financial assets shall be classified when they are initially recognized into the financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period, the investments which will be held to their maturity, loans and the account receivables and financial assets available forsale.
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Categoryoffinancialliabilities
Financial liabilities shall be classified when they are initially recognized into the financial liabilities which are measured at their fair values and of which the variation is included in the current profits and losses and other financialliabilities.
(1)Categoryoffinancialinstruments
(I)Recognitionandmeasurementoffinancialassets
Financial assets bought in and sold out in the conventional way are recognized and de-recognized in accordance with the transaction dates. In the initial recognition, financial assets are divided into financial assets measured at fair values and whose changes are recorded in current profits and losses, held-to-maturity investments, loans and accountsreceivables,andavailable-for-salefinancialassets.Intheinitialrecognition,afinancialassetismeasured at its fair value. For a financial asset measured at fair value and whose changes are recorded in current gains and losses,therelevanttradingexpendituresaredirectlyrecordedinthegainsandlossesatthecurrentperiod.Andthe tradingexpendituresfortheotherfinancialassetsarerecordedintheinitiallyrecognizedamount.
①Financialassetsmeasuredatfairvaluesandwhosechangesarerecordedincurrentprofitsandlosses
Such financial assets include transactional financial assets and financial assets designated to be measured at fair valuesandwhosechangesarerecordedincurrentgainsandlosses.
A transactional financial asset refers to a financial asset meeting any of the following requirements: A. The purposeto acquire thefinancialassetis mainly for selling or repurchaseofit in the nearfuture; B. Forming a part of the identifiable combination of financial instruments which are managed in a centralized way and for which there are objective evidences proving that the Group may manage the combination by way of short-term profit making in the near future; and C. Being a derivative instrument, excluding the designated derivative instruments which are effective hedging instruments, or derivative instruments to financial guarantee contracts, and the derivative instruments which are connected with the equity instrument investments for which there is no quoted price in the active market, whose fair value cannot be reliably measured, and which shall be settled by delivering thesaidequityinstruments.
Financial asset complying with one of following conditions can be measured at fair value when being initially recognized and changes in that financial asset are recorded in gains and losses of the current period: A. The designation can eliminate or greatly reduce situations where related profits or losses were in inconformity due to differentmeasurementbaseofthefinancialasset;B.Theformalwrittendocumentofconcerningriskmanagement orinvestmentstrategyoftheGrouphasstatedthattheGroupshallmanageandassessonfinancialassetgroupand financialassetandfinancialliabilitygrouponthebasisoffairvalue,andreporttokeymanagementstaffs. Atransactional financial asset, which is measured at the fair value and changes thereof are recorded in gains and losses of the current period, is subsequently measured at the fair value. The gains and losses arising from the fair value changes, as well as the dividendand interest incomes from the financialasset, are recorded in the gains and lossesforthecurrentperiod.
②Held-to-maturityinvestments
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A held-to-maturity investment refers to a non-derivative financial asset with a fixed date of maturity, a fixed or determinable amount of repo price and which the Group holds for a definite purpose or the Group is able to hold untilitsmaturity.
Aheld-to-maturity investment is subsequently measured according to the amortized cost using the actual interest rate method. The gains or losses arising from de-recognition, impairment or amortization of the investment are recordedintheprofitsandlossesforthecurrentperiod.
The actualinterestrate methodrefers to themethodbywhichthe post-amortizationcostsandthe interestincomes of different installments or interest expenses are calculated in light of the actual interest rates of the financial assets or financial liabilities (including a set of financial assets or financial liabilities). The actual interest rate refers to the interest rate adopted to cash the future cash flow of a financial asset or financial liability within the predicted term of existence or within a shorter applicable term into the current carrying amount of the financial assetorfinancialliability.
When calculating the actual interest rate, the Group predicts the future cash flow (not taking into account the futurecreditlosses)onthebasisoftakingintoaccountallthecontractualprovisionsconcerningthefinancialasset or financialliability.The various fee charges, trading expenses, reduced values, premiums, etc., which are paid or collected by the parties to a financial asset or financial liability contract and which form a part of the actual interestrate,arealsotakenintoaccountinthedeterminationoftheactualinterestrate.
③Loansandaccountsreceivable
Loansandaccounts receivable referto thenon-derivative financialassetsfor whichthereis noquotedpricein the activemarketandofwhichtherepoamountisfixedordeterminable.ThefinancialassetsdefinedbytheGroupas loans and accounts receivable include notes receivable, accounts receivable, interest receivable, dividend receivable,otherreceivables,etc..
Loansandaccountsreceivablearesubsequentlymeasuredaccordingtotheamortizedcostusingtheactualinterest rate method. The gains or losses arising from de-recognition, impairment or amortization of the loans and accountsreceivablearerecordedintheprofitsandlossesforthecurrentperiod.
④Available-for-salefinancialassets
Available-for-sale financialassets includethe non-derivative financialassets whichare designated as available for sale when they are initially recognized, as well as the financial assets other than the financial assets measured at fair values and whose changes are recorded in current gains and losses, loans and accounts receivable and held-to-maturityinvestments.
Available-for-sale financial assets are subsequently measured at their fair values. Impairment losses and the exchange differences of foreign currency monetary financial assets in relation to the amortized cost are recorded intheprofitsandlossesforthecurrentperiod.Othergainsorlossesarisingfromfairvaluechangesarerecognized as other comprehensive incomes and recorded in the capital reserves, and transferred out and recorded in the profitsandlossesforthecurrentperiodwhenthefinancialassetisde-recognized.
Interest obtainedduringthe periodof holdingan available-for-sale financialassetandthe cashdividendsdeclared anddistributedbyaninvestedpartyarerecordedininvestmentgains.
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(II)Reorganizationandmeasurementoffinancialliabilities
In the initial recognition, financial liabilities are divided into the financial liabilities measured at fair values and whose changes are recorded in current gains and losses and other financial liabilities. Financial liabilities are initially recognized at their fair values.As for a financial liability measured at fair value and whose changes are recorded in current gains and losses, the relevant trading expense is directly recorded in the profits and losses for the current period. As for other financial liabilities, the relevant trading expenses are recorded in the initially recognizedamounts.
①Financialliabilitiesmeasuredatfairvaluesandwhosechangesarerecordedincurrentgainsandlosses Such financial liabilities are divided into transactional financial liabilities and financialliabilities designated to be measuredatfair valuesandwhosechanges arerecordedincurrentgainsandlossesintheinitialrecognitionunder the same conditions where such financial assets are divided into transactional financial assets and financial assets designated to be measured at fair values and whose changes are recorded in current gains and losses in the initial recognition.
Financial liabilities measured at fair values and whose changes are recorded in current gains and losses are subsequently measured at their fair values. Gains or losses arising from the fair value changes, as well as the dividend and interest expenses in relation to the said financial liabilities, are recorded in the profits and losses for thecurrentperiod.
②Otherfinancialliabilities
As for a derivative financial liability connected to an equity instrument for which there is not quoted price in an activemarketandwhosefairvaluecannotbereliablymeasuredandwhichmustbesettledbydeliveringtheequity instrument, itis subsequentlymeasuredonthe basisofcosts. Otherfinancialliabilities aresubsequently measured according to the amortized cost using the actual interest rate method. Gains or losses arising from de-recognition oramortizationofthesaidfinancialliabilitiesisrecordedintheprofitsandlossesforthecurrentperiod.
③Financialguaranteecontract
Forthefinancialguaranteecontractswhicharenotdesignatedasafinancialliabilitymeasuredatitsfair valueand the variation thereof is recorded into the profits and losses of the current period, which shall be initially recognized by fair value, and the subsequent measurement shall be made after they are initially recognized according to the higher one of the following: a. the amount as determined according to theAccounting Standards for Enterprises No. 13– Contingencies; b. the surplus after accumulative amortization as determined according to the principles of the Accounting Standards for Enterprises No. 14 - Revenues is subtracted from the initially recognizedamount.
(III)Derivativeinstrumentandembeddedderivativeinstrument
Derivative instrument shall be initially measured at its fair value on the signing date for relevant contracts, and made the follow-up measurement at fair value. The changes in the fair value of the derivative instrument shall be recordedintogain/lossatcurrentperiod.
Where a mixed instrumentincluding an embedded derivative instrument fails to be designated as a financial asset or financial liability measured at its fair value and of which the variation is included in the current profits and losses, and it can simultaneously meet the two conditions that there is no close relationship between it and the
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principal contract in terms of economic features and risks, as well as there is no close relationship between it and the principal contract in terms of economic features and risks. Then the embedded derivative instrument shall be separated from the mixed instrument and treated as an independent derivative instrument. Where it is impossible to make an independent measurement when it is obtained or subsequently on the balance sheet date, the mixed instrument shall be designated entirely as a financial asset or financial liability measured at its fair value and of whichthevariationisincludedinthecurrentprofitsandlosses.
(IV)Theoffsetoffinancialassetsandfinancialliabilities
When the Group has the legal right to offset the confirmed financial assets and financial liabilities, and can execute this legal right now,meanwhile, theGroup plans to settle them at their netamountor realize the financial assets and pay off the financial liabilities at the same time, the financial assets and financial liabilities should be listed inthebalancesheetbytheamountaftertheir offsetwith eachother.Apartfromthis, thefinancialassetsand financialliabilitiesshouldbelistedinthebalancesheetrespectivelyandshouldnotoffsetwitheachother. (V)Equityinstruments
The "equity instruments" refers to the contracts which can prove that the Group holds the surplus equities of the assets after the deduction of all the debts. For equity instruments, the consideration received in the issuance ofequityinstrumentsafterdeductingthetransactioncostshallberecordedintheowners’equity.
Theowners’equity decreased from theGroup’s various distributions (excluding the dividend distribution) to the ownersofequityinstruments,theGroupshallnotmakeitasthechangeinthefairvalueofequityinstruments. (2)Reorganizationbasisandmeasurementoffinancialinstruments
(3)Recognitionandmeasurementoffinancialassettransfers
Where a financial asset satisfies any of the following requirements, the recognition of it is terminated:① The contractualrightsfor collectingthecashflowofthesaidfinancialassetareterminated;②Thesaidfinancialasset has been transferred and nearly all of the risks and rewards related to the ownership of the financial asset to the transferee; or③ The said financial asset has been transferred. And the Group has ceased its control on the said financialassetthough itneither transfers norretains nearlyallof therisks andrewardsrelated to theownershipof thefinancialasset.
Where the Group neither transfers nor retains nearly all of the risks and rewards related to the ownership of a financialasset,anditdoesnotceaseitscontrolonthesaidfinancialasset,itrecognizestherelevantfinancialasset and liability accordingly according to the extent of its continuous involvement in the transferred financial asset. The term "continuous involvement in the transferred financial asset" refers to the risk level that the enterprise facesresultingfromthechangeofthevalueofthefinancialasset.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between theamountsofthefollowing2itemsisrecordedintheprofitsandlossesofthecurrentperiod:(1)Thebookvalue of the transferred financial asset; and (2) The sum of consideration received from the transfer, and the accumulativeamountofthechangesofthefairvalueoriginallyrecordedinothercomprehensiveincomes. If the transfer of partial financial asset satisfies the conditions to stop the recognition, the book value of the
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transferred financial asset is apportioned between the portion whose recognition has been stopped and the portion whose recognition has not been stopped according to their respective relative fair value, and the difference between the amounts of the following 2 items is included into the profits and losses of the currentperiod:(1)The summation of the considerationreceived from thetransfer andthe portion of the accumulative amountof changes in the fair value originally recorded in other comprehensive incomes which corresponds to the portion whose recognitionhasbeenstopped;and(2)Theamortizedcarryingamountsoftheaforesaidamounts.
(4)De-recognitionoffinancialliabilities
Onlywhentheprevailingobligationsofafinancialliabilityarerelievedinallorinpartmaytherecognitionofthe financialliability beterminated inall orpartly.Where theGroup (debtor)enters into anagreementwith acreditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regardingthenewfinancialliabilityis substantiallydifferentfrom thatregardingtheexistingfinancial liability, it terminates the recognition of the existing financial liability, and at the same time recognizes the new financialliability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall include into the profits and losses of the current period for the gap between the book value which has been terminated fromrecognition andthe considerationsit haspaid(includingthenon-cash assetsithas transferredout andthenewfinancialliabilitiesithasassumed)
(5)Ascertainmentoffairvaluesoffinancialassetsandliabilities
The “fair value” refers to the amount, at which both parties to a transaction who are familiar with the condition exchangeassetsorclearoffdebtsunderfairconditions.Asforthefinancialinstrumentforwhichthereisanactive market, the Group determines its fair value using the quoted price in the active market. The quoted prices in the active market refer to the prices, which are easily available from the stock exchange, brokers, industry associations, pricing service institutions, etc. at a fixed term, and which represent the prices at which actually incurred market transactions are made under fair conditions. Where there is no active market for a financial instrument,theGroupadoptsvalueappraisaltechniquestodetermineitsfairvalue.Thevalueappraisaltechniques mainly include the prices adopted by the parties, who are familiar with the condition, in the latest market transaction upon their own free will, the current fair value obtained by referring to other financial instruments of thesameessentialnature,thecashflowcapitalizationmethodandtheoptionpricingmodel,etc.
(6) Impairment test method and impairment provision method of financial assets (excluding the accounts receivable)
For the financial assets other than the financial assets measured at fair values and whose changes are recorded in current gains and losses, the Group runs a check on their carrying amounts on every balance sheet date. Where there is any objective evidence proving that such a financial asset has been impaired, an impairment provision is made.
The Group carries outa separateimpairment testfor every financialassetwhich is individually significant.As for a financialasset which is individually insignificant, an impairment test is carried out separately or in the financial asset group with similar credit risk. Where the financial asset (individually significant or insignificant) is found
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not impaired after the separate impairment test, it is included in the financial asset group with similar credit risk andtestedagainonthegroupbasis.Wheretheimpairmentlossisrecognizedforanindividualfinancialasset,itis notincludedinthefinancialassetgroupwithsimilarcreditriskforanimpairmenttest.
①Impairmentofheld-to-maturityinvestments,loansandaccountsreceivable
Where a financial asset measured on the basis of costs or amortized costs is impaired, the carrying amount of the said financial asset is written down to the current value of the predicted future cash flow. The amount written down is recognized as the impairment loss of the asset and is recorded in the profits and losses for the current period.Whereafinancialassetisrecognizedashavingsufferedfromanyimpairmentloss,ifthereisanyobjective evidence proving that the value of the said financial asset has been restored, and it is objectively related to the events that occur after such loss is recognized, the impairment losses as originally recognized are reversed. The reversed carrying amount of the said financial asset does not exceed the amortized cost of the said financial asset onthedayofreverseundertheassumptionthatnoprovisionismadefortheimpairment.
②Impairmentofavailable-for-salefinancialassets
Whenitjudged thatthedecreaseoffair value oftheavailable-for-sale equityinstrumentinvestmentis seriousand not temporarily after comprehensive considering relevant factors, it reflected that the available-for-sale equity instrument investment occurred impairment. Of which, the “serious decline” refers to the accumulative decline range of the fair value over20%; while the “non-temporary decline” refers to the consecutive decline time of the fairvalueover12months.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the decrease of the fairvalueofthecapitalreservewhichisdirectlyincludedaretransferredoutandrecordedintheprofitsandlosses for the currentperiod.Theaccumulative lossestransferred outare the balanceobtainedfrom theinitially obtained cost of the said financial asset after deducting the principals as taken back, the amortized amount, the currentfair valueandtheimpairmentlossoriginallyrecordedintheprofitsandlosses.
Where the impairment loss has been recognized for an available-for-sale financial asset, if, within the accounting periods thereafter, there is any objective evidence proving that the value of the said financial asset has been restoredandtherestorationisobjectivelyrelatedtotheeventsthatoccuraftertheimpairmentlosswasrecognized, the originally recognized impairment loss is reversed. The impairment losses on the available-for-sale equity instrument investments are reversed and recognized as other comprehensive incomes, and the impairment losses on the available-for-sale liability instruments are reversed and recorded in the profits and losses for the current period.
The impairment loss incurred to an equity instrument investment for which there is no quoted price in the active market and whose fair value cannot be reliably measured, or incurred to a derivative financial asset which is connected with the said equity instrument investment and which must be settled by delivering the said equity investment,isnotreversed.
Eachreorganizationstandardofeachfinancialimpairmentavailable-for-sale
Whenitjudged thatthedecreaseoffair value oftheavailable-for-sale equityinstrumentinvestmentis seriousand not temporarily after comprehensive considering relevant factors, it reflected that the available-for-sale equity
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instrument investment occurred impairment. Of which, the “serious decline” refers to the accumulative decline range of the fair value over20%; while the “non-temporary decline” refers to the consecutive decline time of the fairvalueover12months.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the decrease of the fairvalueofthecapitalreservewhichisdirectlyincludedaretransferredoutandrecordedintheprofitsandlosses for the currentperiod.Theaccumulative lossestransferred outare the balanceobtainedfrom theinitially obtained cost of the said financial asset after deducting the principals as taken back, the amortized amount, the currentfair valueandtheimpairmentlossoriginallyrecordedintheprofitsandlosses.
Where the impairment loss has been recognized for an available-for-sale financial asset, if, within the accounting periods thereafter, there is any objective evidence proving that the value of the said financial asset has been restoredandtherestorationisobjectivelyrelatedtotheeventsthatoccuraftertheimpairmentlosswasrecognized, the originally recognized impairment loss is reversed. The impairment losses on the available-for-sale equity instrument investments are reversed and recognized as other comprehensive incomes, and the impairment losses on the available-for-sale liability instruments are reversed and recorded in the profits and losses for the current period.
The impairment loss incurred to an equity instrument investment for which there is no quoted price in the active market and whose fair value cannot be reliably measured, or incurred to a derivative financial asset which is connected with the said equity instrument investment and which must be settled by delivering the said equity investment,isnotreversed.
(7) As for event about reclassifying the undue held-to-maturity investment into available-for-sale financial assets,theCompanyshallstatethebasisofchangesinholdingpurposeorability
There was no event about reclassifying the undue held-to-maturity investment into available-for-sale financial assetsoftheCompany.
11.Recognitioncriteriaandwithdrawalmethodsforbaddebtsprovisionofaccountsreceivable
Receivablesincludeaccountreceivablesandotheraccountsreceivables.
(1)Recognitionofprovisionforbaddebts:
The Group shall test the carrying amount of receivables on the balance sheet date. Where there is any objective evidenceprovingthatsuchreceivableshavebeenimpaired,animpairmentprovisionshallbemade.
①debtorhasseriousfinancialdifficult;
②debtorgoesagainstthecontractclause(forinstance,breachoffaithoroverduepayinginterestsorprincipal);③debtorshaveagreatprobabilityofbankruptcyorotherfinancialreorganization;
④otherobjectiveevidenceprovingsuchaccountsreceivablehasbeenimpaired;
(2)Withdrawmethodofprovisionforbaddebts
① The recognition criteria and method of individual provision for bad debts of receivables that are individually significant
TheGrouprecognizedthereceivableswithamountaboveRMB20millionandotherreceivablesabove10million
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asreceivableswithsignificantsingleamountsandwithdrawntheprovisionforbaddebts.
The Group made an independent impairment test on receivables with significant single amounts; the financial assets without impairment by independent impairment test should be included in financial assets portfolio with similar credit risk to take the impairment test. Receivables was recognized with impairment should no longer be includedinreceivablesportfoliowithsimilarcreditrisktotaketheimpairmenttest.
②Therecognitionandmethodofprovisionforbaddebtsofreceivablesbycreditriskportfolio
A.Recognitionofcreditriskgroup
Receivables that not individually significant and individually significant but without impairment by independent impairmenttest,aregroupedonthebasisofsimilarityandrelevanceofcreditrisk.This creditrisk usuallyreflectsthedebtor’sabilitytorepayallthedueaccountsinaccordancewithcontractforsuchassets,whichalsoarerelated withthemeasurementonfuturecashflowoftheexaminedassets.
B.Withdrawalmethodofprovisionforbaddebtsrecognizedbycreditriskgroup
For the impairment test implemented by groups, the amount of provision for bad debts was appraised and recognized in accordance with the structure of accounts receivable group and similar characteristics of credit risk (thedebtor’s ability to pay off the loans in accordance with the provisions of contract), experience of losses, currenteconomicstatusandthepredictedlossesintheaccountsreceivablegroup.
Impairmentofprepayment:Theprepaymentshallbesubjecttotheindividualimpairmenttestonthebalancesheet date. The provision for bad debts should be measured as per the balance between the carrying amount and the presentvalueofthecashflowinfutureifthereisanobjectiveevidencefortheimpairmentoccurrence.
③Receivableswithinsignificantamountbutbeingindividuallywithdrawntheprovisionforbaddebts
The Group made independent impairment test on receivables with insignificant amount but with the following characteristics, if any objective evidence shows that the accounts receivable has been impaired, impairment loss shall be recognized on the basis of the gap between the currentvalues ofthe future cash flow lower than its book valuesoastowithdrawprovisionforbaddebts:
A.Receivableshavedisputewiththeotherpartiesorinvolvinglawsuitandarbitration;
B. Receivables have obvious indication showing that the debtors are likely to fail to perform the duty of repayment,etc.
(3)Reversalofprovisionforbaddebts
If there is any objective evidence proving that the value of the said receivables has been restored, and it is objectively related to the events occurred after such loss is recognized, the impairment-related losses as originally recognized shall be reversed and be recorded into the profits and losses of the current period. However, the reversedcarryingamountshallnotbeanymorethanthepost-amortizationcostsofthesaidaccountsreceivableon thedayofreverseundertheassumptionthatnoprovisionismadefortheimpairment.
(1)Baddebtprovisionforindividuallysignificantaccountsreceivable
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|Judgement basisormonetarystandardsofprovisionfor baddebtsoftheindividuallysignificantaccountsreceivable|AccountsreceivableswithamountaboveRMB20millionandotheraccountsreceivablesabove10million|
|Method of individual provision for bad debts of the individuallysignificantaccountsreceivable|TheCompanymadeanindependentimpairmenttestonreceivableswithsignificantsingleamounts;thefinancial|

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|assetswithoutimpairmentbyindependentimpairmenttestshouldbeincludedinfinancialassetsportfoliowithsimilarcreditrisktotaketheimpairmenttest.Receivableswasrecognizedwithimpairmentshouldnolongerbeincludedinreceivablesportfoliowithsimilarcreditrisktotaketheimpairmenttest.|

(2)Accountsreceivableforwhichbaddebtprovisionsaremadeonthegroupbasis
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|Nameofgroup|Withdrawalmethodofbaddebtprovisiononthegroupbasis|Recognitionbasisofgroup|
|Agegroup|Aginganalysis|Ageofaccountsreceivable|
|RelatedpartiesgroupswithintheGroup|Othermethod|Whetherthedebtoristherelatedpartyamongthegroupornot|

Inthegroups,adoptingaginganalysismethodtowithdrawbaddebtprovision:
√Applicable□Inapplicable
||||
|-|-|-|
|Age|Withdrawalproportionforaccountsreceivable(%)|Withdrawalproportionforotheraccountsreceivable(%)|
|Within1year(including1year)|2%|2%|
|1-2years|5%|5%|
|2-3years|20%|20%|
|3-4years|50%|50%|
|4-5years|50%|50%|
|Over5years|100%|100%|

 Inthegroups,adoptingbalancepercentagemethodtowithdrawbaddebtprovision
□Applicable√Inapplicable
Inthegroups,adoptingothermethodstowithdrawbaddebtprovision
√Applicable□Inapplicable
|||
|-|-|
|Nameofgroup|Noteofmethod|
|RelatedpartiesgroupswithintheGroup|Nowithdrawal|

(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made individually
|||
|-|-|
|Reason of individually withdrawing baddebtprovision|A. Receivables have dispute with the other parties or involving lawsuit andarbitration;B.Receivableshave obviousindicationshowingthat thedebtorsarelikely tofailtoperformthedutyofrepayment,etc.|
|Withdrawalmethodforbaddebtprovision|TheCompanymadeindependentimpairmenttestonreceivableswithinsignificantamountbutwiththefollowingcharacteristics,ifanyobjectiveevidenceshowsthattheaccountsreceivablehasbeenimpaired,impairmentlossshallberecognizedon|

2013AnnualReportofKonkaGroupCo.,Ltd.
||
|-|
|thebasisofthegapbetweenthecurrentvaluesofthefuturecashflowlowerthanitsbookvaluesoastowithdrawprovisionforbaddebts|

12.Inventory
(1)Classification
TheGroup’s inventories are classified as non-property inventories and property inventories.And the non-property inventories include raw materials, goods in process, merchandise on hand, goods delivered and circulating materials,etc;whilethepropertyinventoriesincludepropertyinprocessandfinishedproperty,etc.
①Thefinishedpropertyreferstothefinishedandheld-for-saleproperty.
② The property in process (development costs) refers to the unfinished property with the development purpose forsale.
(2)Pricingmethodforoutgoinginventories
Pricingmethod:weightedaveragemethod
The inventories shall be measured in light of their cost when obtained.The costof inventory consists of purchase costs, processing costs and other costs. Inventory is accounted by weight average method upon receiving and giving.Formerchandiseonhandshallbeaccountedbyplannedcost,ifthedifferencebetweenplannedcostofand actual cost of raw materials is accounted through the cost variance item, and the planned cost is adjusted to the actual cost according to the cost difference which the carryover and given-out inventory should shoulder in the period.
The property inventories are initially measured at the costs, and the costs of the developed property include the land premium, expenditures for supporting infrastructures, expenditures for construction and installation projects, the borrowing costs before the completion of the developed project and other expenses occurred during the developmentprocess.
① The public supporting facilities recorded the development costs at the actual costs, the amortization upon completionwastransferredtothecostsofhousesandotheravailable-for-saleproperty,whileasforthesupporting facilities with operating value and beneficiary rights owned by the Group as well as available for individual sale andmeasurement,whichshallberecordedintothe“investmentproperty”
② For the accounting policies on borrowing costs occurred for developing property, please refer to Note IV. 17 Pricingof“BorrowingCosts”
(3)Recognitionbasisofnetrealizablevalueandwithdrawalmethodofdepreciationreservesforinventories Thenetrealizablevaluerefers,intheordinarycourseofbusiness,totheaccountafterdeductingtheestimatedcost of completion, estimated sale expense and relevant taxes from the estimated sale price of inventories. The net realizable value of inventories shall be fixed on the basis of valid evidence as well as under consideration of
purposeofinventoriesandtheeffectofeventsafterbalance-sheet-date.
On the balance sheet date, the inventories shall be measured according to the cost or the net realizable value,
whicheverislower.Ifthenetrealizablevalueislowerthanthecost,itshallwithdrawthedepreciationreservesfor
2013AnnualReportofKonkaGroupCo.,Ltd.
inventories, which was withdrawn in accordance with the balance that the cost of individual inventory item exceedingthenetrealizablevalue.
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 reversedamountshallbeincludedintheprofitsandlossesofthecurrentperiod.
(4)Inventorysystemforinventories
Inventorysystemforinventories:Perpetualinventorysystem
(5)Amortizationmethodofthelow-valueconsumptiongoodsandpackingarticles
Low-valueconsumptiongoods
Amortizationmethod:one-offamortizationmethod
Packingarticles
Amortizationmethod:one-offamortizationmethod
13.Long-termequityinvestment
(1)Recognitionofinvestmentcost
The initial cost of the long-term equity investment formed in business combination shall be ascertained in accordancewiththefollowingprovisions:Forthebusinesscombinationunderthesamecontrol,itshallregardthe share of the carrying amount of the owner's equity ofthe combined party on the date of combination as the initial cost of the long-term equity investment. For the business combination under different control, the combination costs shall be the sum of the fair values of the assets paid, the liabilities incurred or assumed and the equity securities issuedbythe Company; the commissionfeesfor audit,law services,assessment& consultancyservices and other relevant expenses occurred in the business combination by the combining 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 initialamountofequitysecuritiesandbondssecurities.
Besidesthelong-termequityinvestmentsformedbybusinesscombination,theotherlong-termequityinvestments shall be initially measured by cost, the cost is fixed in accordance with the ways of gaining, such as actual cash payment paid by the Group, the fair value of equity securities issued by the Group, the agreed value of the investment contract or 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 andothernecessaryexpendituresdirectlyrelatedwithgainingthelong-termequityinvestmentsshallalsobe recordedintoinvestmentcost.
(2)Follow-upmeasurementoflong-termequityinvestmentandrecognizedmethodofprofitsandlosses The long-term equity investment that the Company does not have joint control or significant influences on the invested entity, and has no offer in the active market and its fair value cannot be reliably measured, it shall be measured by adopting the cost method; a long-term equity investment that the Company has joint control or significant influences over the invested entity shall be measured by employing the equity method; a long-term equity investment that the Company does not have control, joint control or significant influence on the invested
2013AnnualReportofKonkaGroupCo.,Ltd.
entity,aswellasitsfairvaluecanbereliablymeasured,itshallbeaccountedasfinancialassetsavailable-for-sale. Moreover, long-term equity investment adopting the cost method in the financial statements, and which the Companyhascontroloninvestedentity.
①Long-termequityinvestmentmeasuredbyadoptingcostmethod
The price of a long-term equity investment measured by adopting the cost method shall be included at its initial investment cost, 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 dividendorprofitincludedintheactualpaymentorconsiderationupongainingtheinvestment.
②Long-termequityinvestmentmeasuredbyadoptingequitymethod
If the initial cost of a long-term equity investment is more than the Company's attributable share of the fair value oftheinvestedentity's identifiablenetassetsfortheinvestment,theinitialcostofthelong-termequityinvestment 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 the 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, the investment profits or losses at current period shall be the attributable shareofthenetprofits orlossesof theinvested entity.Theinvesting enterpriseshall, onthe groundof thefairvalueofallidentifiableassetsoftheinvestedentitywhenitobtainstheinvestment,andinaccordancewith the accountingpolicies andaccountingperiods,recognize theattributable shareofthenetprofits andlossesofthe invested entity after it adjusts the net profits of the invested entity.For the profits and losses of unrealized insider dealing between the Group and joint-operative enterprise or co-operative enterprise, the investment profits and losses shall be recognized after the part attributable to the Group calculated by proportion of shares held being offset. However, if the losses of unrealized insider dealing between the Group and joint-operative enterprise or co-operative enterprise was attributed to the impairment losses of the transferred assets in accordance with the Accounting Standards for Enterprises No.8— Asset Impairment, which shall not be offset. The other comprehensive profits from invested entity shall be recognized as other comprehensive profits after adjusting the bookvalueoflong-termequityinvestment,andthenrecordedintocapitalreserves
The Group shall recognize the net losses of the invested enterprise until the book value of the long-term equity investment and other long-term rights and interests which substantially form the net investment made to the invested entity are reduced to zero. However,if the Group has the obligation to undertake extra losses, it shall be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into investment losses atcurrentperiod. If the invested entity realizes any netprofits later,the Group shall, after the amount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resume recognizing itsattributableshareofprofits.
For the long-term equity investment on joint-enterprise and co-operative enterprise held by the Group before the initial execution of New Accounting Standards for Enterprise, if there existed the balance of debtor for equity investment related with such long-term equity investment, which shall be recorded into current profits and losses withtheamountbystraight-lineamortizationintheremainedperiod.
2013AnnualReportofKonkaGroupCo.,Ltd.
③Acquiringsharesofminorityinterest
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 thecapitalreservesarenotsufficienttooffset,theretainedprofitsshallbeadjusted.
④Disposaloflong-termequityinvestment
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 intoowners’ equity; where the Company losses the controlling right by disposing part of long-term equity investment on such subsidiaries, it shall treated in accordance with the relevant accounting policies in Note IV. 4 (4)— Method on preparationofcombinedfinancialstatements.
For other ways on disposal of long-term equity investment, the balance between the book value of the disposed equity and its actual payment gained shall be recorded into current profits and losses; for the long-term equity investment measured by adopting equity method, the other comprehensive income originally recorded intoowners’equity shall be transferred into current profits and losses by proportions upon the disposal. The remained equityshallberecognizedaslong-term equityinvestmentorotherrelevantfinancialassetsin accordancewith the book value, and carried out the follow-up measurement in accordance with the above accounting policies for the long-termequityinvestmentorfinancialassets.If themeasurementmethodofremainedequityistransferredfrom costmethodtoequity method,itshallbesubjecttoretrospectiveadjustmentinaccordancewithrelevantrules and stipulations.
(3)Recognitionbasisofjointcontrolandsignificantinfluences
The term "control" refersto the powerto determine thefinancialandoperatingpolices ofan enterpriseandobtain benefits from its operating activities of the enterprise. The term "joint control" refers to the control over an economic activity in accordance with the contracts and agreements, which does not exist unless the investing parties of the economic activity with one an assent on sharing the control power over the relevant important financial and operating decisions. The term "significant influences" refers to the power to participate in making decisions on the financial and operating policies of an enterprise, but not to control or do joint control together with other parties over the formulation of these policies. When ascertaining whether or not it is able to control or have significant influences on an invested entity, an enterprise shall take into consideration the invested enterprises' current convertible corporate bonds and current executable warrants held by the investing enterprise andotherparties,aswellasotherpotentialfactorsconcerningthevotingrights.
(4)Testingmethodofimpairmentandwithdrawalmethodofprovisionforimpairment
The Group shall, on the day of balance sheet, make a judgment on whether there is any sign of possible impairment of the long-term equity investment. Where there is sign of impairment, the Group shall estimate the recoverable amount of the long-term equity investment. Where the recoverable amount of the long-term equity investment is lower than its book value, which balance shall be withdrawn the provision for impairment and recordedintocurrentprofitsandlosses.
Onceanylossofimpairmentofthelong-termequityinvestmentisrecognized,itshallnotbeswitchedbackinthe
2013AnnualReportofKonkaGroupCo.,Ltd.
futureaccountingperiods.
14.Investmentrealestates
The term "investment real estates" refers to the real estates held for generating rent and/or capital appreciation. Investment real estates of the Group include the right to use any land which has already been rented; the right to useanylandwhichisheldandpreparedfortransferafterappreciation;andtherighttouseanybuildingwhichhas already been rented. Besides, as for the vacant buildings held for operating lease, if the Board (or similar institution) made a written resolution, and clearly expressed to hold it as operating lease with no change in the shorttime,whichshallbelistedasinvestmentrealestates.
The initial measurement of the investment real estate shall be made at its cost. Subsequent expenditures incurred for aninvestmentrealestateis includedin thecostofthe investmentrealestatewhenit isprobable thateconomic benefits associated with the investment real estate will flow to the Group and the cost can be reliably measured, otherwisetheexpenditureisrecognizedinprofitorlossintheperiodinwhichtheyareincurred.
The Group shall make a follow-up measurement to the investment real estates by employing the cost pattern on thedateofthebalancesheet.Anaccrualdepreciationoramortizationshallbemadefortheinvestmentrealestates inthelightoftheaccountingpoliciesoftheuserightofbuildingsorlands.
For details of impairment test method and withdrawal method of impairment provision of investment real estates, pleaserefertoNoteIV.17.ImpairmentofNon-currentNon-financialAssets.
Whenowner-occupiedrealestateorinventoriesarechangedintoinvestmentrealestateorinvestmentrealestateis changed into owner-occupied real estate, whose book value prior to the change shall be the entry value after the change.
When an investment real estate is changed to an owner-occupied real estate, it is transferred to fixed assets or intangible assets at the date of such change. When an owner-occupied real estate is changed to be held to earn rental or for capital appreciation, the fixed asset or intangible asset is transferred to investment real estate at the date of such change. If the fixed asset or intangible asset is changed into investment real estate measured by adopting the cost pattern, whose book value prior to the change shall be the entry value after the change; if the fixed asset or intangible asset is changed into investment real estate measured by adopting the fair value pattern, whosefairvalueonthedateofsuchchangeshallbetheentryvalueafterthechange
An investment real estate is derecognized on disposal or when the investment real estate is permanently withdrawn from use and no future economic benefits are expected from its disposal. The amount of proceeds on sale, transfer, retirement or damage of an investment real estate less its carrying amount and related taxes and expensesisrecognizedinprofitorlossintheperiodinwhichitisincurred.
15.Fixedassets
(1)Recognizedstandardoffixedassets
Theterm"fixedassets"referstothetangibleassetsthatsimultaneouslypossessthefeaturesasfollows:theyare heldforthesakeofproducingcommodities,renderinglaborservice,rentingorbusinessmanagement;andtheir usefullifeisinexcessofonefiscalyear.
2013AnnualReportofKonkaGroupCo.,Ltd.
(2)Recognitionbasisandpricingmethodoffixedassetsbyfinancelease
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 shalladoptthesame depreciationpolicyfor self-ownedfixedassets.Ifitis reasonableto becertain thatthelessee 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 leasetermoritsusefullife.
(3)Depreciationmethodsoffixedassets
Theinitialmeasurementofafixedassetshallbemadeatitscostafterconsideringtheeffectofexpecteddiscard expenses.TheGroupshallwithdrawthedepreciationoffixedassetsbyadoptingthestraight-linemethodsincethe secondmonthofitsusefullife.
The"expectednetsalvagevalue"referstotheexpectedamountthattheGroupmayobtainfromthecurrent disposalofafixedassetafterdeductingtheexpecteddisposalexpensesattheexpirationofitsexpectedusefullife.
|||||
|-|-|-|-|
|Categoryoffixedassets|Usefullife(Y)|Expectednetsalvagevalue(%)|Annualdeprecation|
|Housingandbuilding|20-40|10%|2.25-4.50|
|Machineryequipments|10|10%|9.00|
|Electronicequipments|5|10%|18.00|
|Transportationvehicle|5|10%|18.00|
|Otherequipments|5|10%|18.00|

(4)Testingmethodofimpairmentandwithdrawalmethodofprovisionforimpairmentonfixedassets For details of the testing method of impairment and withdraw method of impairmentprovision for impairmentonfixedassets,pleaserefertoNoteIV.35—Impairmentofnon-currentnonfinancialassets.
(5)Otherexplanations
The follow-up expenses related to a fixed asset, if the economic benefits pertinent to this fixed asset are likely to flow into the enterprise and its cost can be reliably measured, shall be recorded into cost of fixed assets and ultimately recognized as the book value of the replaced part; otherwise, they shall be included in the current profitsandlosses.
When the Group sells, transfers ordiscards any fixed assets, or when anyfixed assets ofthe Groupis damaged or destroyed,theGroupshalldeductthebookvalueofthefixedassets aswellastherelevanttaxesfromthedisposal income,andincludetheamountinthecurrentprofitsandlosses.
TheGroupshallchecktheusefullife,expectednetsalvagevalueanddepreciationmethodofthefixedassetsat theendoftheyearatleast,ifthereisanychange,itshallberegardedasachangeoftheaccountingestimates.
16.Constructioninprogress
2013AnnualReportofKonkaGroupCo.,Ltd.
(1)Categoriesofconstructioninprogress
Construction inprogress ismeasuredatactualcost.Actualcostcomprises constructioncosts,borrowingcosts that areeligibleforcapitalizationbeforethefixedassetsbeingreadyfortheirintendedusandotherrelevantcosts. (2)Standardsandtimeoftransferringconstructioninprogressintofixedassets
Constructioninprogressistransferredtofixedassetswhentheassetsarereadyfortheirintendeduse.
(3)Impairmenttestmethodandwithdrawalmethodforimpairmentprovisionofconstructioninprogress For details of the testing method of impairment and withdraw method of impairment provision on construction inprogress,pleaserefertoNoteIV.35—Impairmentofnon-currentnonfinancialassets.
17.Borrowingcosts
(1)Recognitionprinciplesforcapitalizationofborrowingcosts
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. The borrowing costs should be capitalizedwhenpossesthefollowingthreeconditionsatthesametime:
① Thecapitalexpenditureshaveincurred;
② Theborrowingcostshaveincurred;
③ Theacquisitionandconstructionactivitiesthatarenecessarytobringtheassettoitsexpectedusablecondition havecommenced.
(2)Capitalizationperiodofborrowingcosts
Wheretheborrowingcostsincurredtoanenterprisecanbedirectlyattributabletotheacquisitionandconstruction or production ofassets eligible for capitalization,it shallstarttobe capitalizedwhenthe assetdisbursements have already incurred, the borrowing costs has already incurred and the acquisition and construction or production activities which are necessary to prepare the asset for its intended use or sale have already started; When the qualified asset under acquisition and construction or production is ready for the intended use or sale, it shall stop tobecapitalized.Otherborrowingcostsshallberecognizedascostsupontheiroccurrence.
(3)Periodofsuspensionofcapitalizationofborrowingcosts
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption periodlasts for morethan3 months, thecapitalizationofthe borrowingcostsshallbesuspendeduntil theacquisitionandconstructionorproductionofaqualifiedassetresumeagain.
(4)Calculationmethodofcapitalizedamountofborrowingcosts
The to-be-capitalized amount of interests shall be determined in light of the actual interests incurred of the specially borrowedloanatthepresentperiodminus theincome ofinterests earnedonthe unusedborrowingloans as a deposit in the bank or as a temporary investment; the enterprise shall calculate and determine the to-be-capitalized amounton the general borrowingby multiplying the weighted average assetdisbursement of the
partof the accumulative assetdisbursements minus the generalborrowing bythe capitalization rateof thegeneral
2013AnnualReportofKonkaGroupCo.,Ltd.
borrowingused.Thecapitalizationrateshallbecalculatedanddeterminedinlightoftheweightedaverageinterest rateofthegeneralborrowing.
18.Biologicalassets
19.Oil-gasassets
20.Intangibleassets
(1)Pricingmethodofintangibleassets
The term "intangible asset" refers to the identifiable non-monetary assets possessed or controlled by enterprises whichhavenophysicalshape.
Theintangibleassetsshallbeinitiallymeasuredaccordingtoitscost. Thecostsrelatedwiththeintangibleassets, if theeconomic benefits relatedto intangible assets arelikely to flow into the enterprise andthe costof intangible assetscanbemeasuredreliably,shallberecordedintothecostsofintangibleassets;otherwise,itshallberecorded intocurrentprofitsandlossesupontheoccurrence.
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 tobedistributed,thewholepaymentshallbetreatedasfixedassets.
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 linemethodduringtheservicelife.Whiletheintangibleassetswithoutcertainservicelifeshallnotbeamortized. (2)Estimatedusefullifeofintangibleassetswithlimitedusefullife
At the end of period, the Group shall check the service life and amortization method of intangible assets with finite service life, if there is any change, it shallbe regarded as a change of the accountingestimates. Besides, the Groupshallchecktheservicelife ofintangibleassetswithoutcertainservicelife, ifthereisanyevidenceshowing 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 finiteservicelife.
||||
|-|-|-|
|Item|Estimatedusefullife|Basis|
|Trademarkregistrationabroadfees|5years|Termofvalidityoftrademarkregistration|
|Patentsandproprietarytechnology|5-10years|Benefitperiodofpatentsandproprietarytechnology|
|Softwareandother|5-10years|Benefitperiodofassets|
|Landuseright|50years|Availabletermoflanduseright|

(3)Judgmentbasisofintangibleassetswithuncertainusefullife
To judge according to the receivable situation, there was unambiguous evidence indicated that there is intangible
assetscouldn’t be reasonable estimated ofits usefullife, so itwould bethe intangible assets with uncertain useful
life.
2013AnnualReportofKonkaGroupCo.,Ltd.
(4)Withdrawalofimpairmentprovisionofintangibleassets
For details of the testing method of impairment and withdraw method of impairment provision on intangibleassets,pleaserefertoNoteIV.35—Impairmentofnon-currentnonfinancialassets.
(5)CriteriaofseparatingtheresearchphaseanddevelopmentphaseofinternalR&Dproject
Theterm"research"referstothecreativeandplannedinvestigationtoacquireandunderstandnewscientificor technologicalknowledge.Itincludingactivitiesacquiringknowledge;applicationresearch,evaluationandfinal choiceofresearchresultsandotherknowledge;researchofmaterials,equipment,products,process,systemand servicesubstitutes;possibleconfiguration,design,evaluationandfinalchoiceofneworimprovedmaterials, equipment,commodities,process,systemorservicesubstitutes.
The term "development" refers to the application of research achievements and other knowledge to a certain plan or design, prior to the commercial production or use, so as to produce any new material, device or product, or substantiallyimprovedmaterial,deviceandproduct.
(6)CalculationoftheexpendituresofinternalR&Dproject
The expenditures for its internal research and development projects of the Company shall be classified into researchexpendituresanddevelopmentexpenditures.
Expendituresforresearchanddevelopmentshallberecordedintocurrentprofitsandlossesupontheoccurrence. The development expenditures for its internal research and development projects of an enterprise may be confirmed as intangible assets when they satisfy the following conditions simultaneously,otherwise，it shall be recordedintocurrentprofitsandlosses.
①Itisfeasibletechnicallytofinishintangibleassetsforuseorsale;
②Itisintendedtofinishanduseorselltheintangibleassets;
③The usefulnessof methods for intangible assets to generate economic benefits shallbeproved, includingbeing able to prove that there is a potential market for the products manufactured by applying the intangible assets or thereisapotentialmarketfortheintangibleassetsitselfortheintangibleassetswillbeusedinternally;
④Itisabletofinishthedevelopmentoftheintangibleassets,andabletouseorselltheintangibleassets,withthe supportofsufficienttechnologies,financialresourcesandotherresources;and
⑤Thedevelopmentexpendituresoftheintangibleassetscanbereliablymeasured.
Iftheexpendituresforresearchandexpendituresfordevelopmentcannotbedistinguishedfromeachother,allthe expendituresforresearchanddevelopmentshallberecordedintocurrentprofitsandlosses.
21.Amortizationmethodoflong-termdeferredexpenses
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 beamortizedaveragelywithinbenefitperiod.
22.Assetstransferwithrepurchasingconditions
23.Estimatedliabilities
2013AnnualReportofKonkaGroupCo.,Ltd.
(1)Recognitioncriteriaofestimatedliabilities
The company should recognize the related obligation as a provision for liability when the obligation meets the followingconditions:(1)Thatobligationisapresentobligationoftheenterprise;(2)Itisprobablethatanoutflow of economic benefits from the enterprise will be required to settle the obligation; (3) A reliable estimate can be madeoftheamountoftheobligation.
(2)Measurementofestimatedliabilities
On the balance sheet date, an enterprise shall take into full consideration of the risks, uncertainty, time value of money,andother factorspertinenttothe Contingencies to measurethe estimated liabilities inaccordancewith the bestestimateofthenecessaryexpensesfortheperformanceofthecurrentobligation.
Whenallorsomeoftheexpensesnecessaryfortheliquidationofanestimatedliabilitiesofanenterpriseis expectedtobecompensatedbyathirdparty,thecompensationshouldbeseparatelyrecognizedasanassetonly whenitisvirtuallycertainthatthereimbursementwillbeobtained.Besides,theamountrecognizedforthe reimbursementshouldnotexceedthebookvalueoftheestimatedliabilities.
24.Share-basedpaymentandequityinstruments
(1)Categoriesofshare-basedpayment
Share-based payment refers to the transaction in order to require the service offered by the employees and other parties that grants the equity instruments or responsible for the liabilities recognized on the basis of the equity instruments.
(2)Themeasuresfortherecognitionofthefairvalueoftheequityinstrument
(3)Basisfortherecognitionofthebestestimationofthevestedequityinstruments
(4)Relevantaccounting treatment ontheimplementation,revisionandterminationofshare-basedpayment plan
25.RepurchaseofsharesoftheCompany
26.Revenue
(1)Criteriaforrecognitiontimeofrevenuefromsellinggoods
(1)Revenuefromsellinggoods
No revenue from selling goods may be recognized unless the following conditions are met simultaneously: the significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise; the enterprise retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods; the relevant amount of revenue can be measured in a reliable way; the relevant economic benefits may flow into the enterprise; and the relevant costs incurred or to be incurred can be measured in a reliable way.The recognition of revenue from exported goods: For good exported by way of FOB, the revenue shall be recognized once the goods were delivered to the carrier designated by the purchaser; for goodsexportedbywayofCIF,therevenueshallberecognizedoncethegoodsreachtheportofthepurchase.
2013AnnualReportofKonkaGroupCo.,Ltd.
(2)Recognitionmethodofrevenuefromsalesofproperty
It can recognize the realization of revenue of sales after signing the sales contract, the property completed and accepted as qualified, reaching the deliverable conditions agreed on the sales contract and the property payment totallypaidaccordingtothesalescontract.
(2)Recognitionbasisofrevenuefromtransferringuserightofasset
(3) Recognitionbasisofrevenuefromrenderingofservices
If the Company can reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the revenue from providing services employing the percentage-of-completion method on the date ofthebalancesheet.Thecompletedproportionofatransactionconcerningtheprovidingoflaborservicesshallbe decidedbytheproportionofthelaborservicealreadyprovidedtothetotallaborservicetoprovide.
Theoutcome ofatransactionconcerningtheprovidingoflaborservicescanbemeasuredinareliableway,meansthatthefollowingconditionsshallbemetsimultaneously:①Theamountofrevenuecanbemeasuredinareliable 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; and④ The costs incurred or to be incurred in the transactioncanbemeasuredinareliableway.
If the outcome of a transaction concerning the providing of labor services can not be measured in a reliable way, the revenue from the providing of labor services shall be recognized in accordance with the amountof the cost of labor services incurred and expected to be compensated, and make the cost of labor services incurred as the current expenses. If it is predicted that the cost of labor services incurredcouldn’t be compensated, thus no revenueshallberecognized.
Where a contract or agreement signed between Group and other enterprises concerns selling goods and providing of labor services, if the part of sale of goods and the part of providing labor services can be distinguished from each other and can be measured respectively, the part of sale of goods and the part of providing labor services shall be treated respectively. If the part of selling goods and the part of providing labor services can not be distinguished from each other, or if the part of sale of goods and the part of providing labor services can be distinguished from each other but can not be measured respectively, both parts shall be conducted as selling goods.
(4)Recognition basis andmethodforthe schedule ofcontractedprojectwhenrecognizingthe revenue from providinglaborservicesandconstructioncontractbypercentage-of-completionmethod
(1)Royaltyrevenue
Inaccordancewithrelevantcontractoragreement,theamountofroyaltyrevenueshouldberecognizedasrevenue onaccrualbasis.
(2)Interestrevenue
The amount of interest revenue should be measured and confirmed in accordance with the length of time forwhichtheGroup’smonetaryfundisusedbyothersandtheagreedinterestrate;
(3)Propertyrentalrevenue
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Fordetailsabouttherecognitionmethodofpropertyrentalrevenue,pleaserefertoNoteIV.22(2)
27.Governmentsubsidies
(1)Types
A government subsidy means the monetary or non-monetary assets obtained free by the Group from the government, but excluding the capital invested by the government as the owner of the enterprise. Government subsidiesconsistofthegovernmentsubsidiespertinenttoassetsandgovernmentsubsidiespertinenttoincome. (2)Accountingtreatmentmethod
Ifagovernmentsubsidyisamonetaryasset,itshallbemeasuredinthelightofthereceivedorreceivableamount. If a government subsidy is a non-monetary asset, it shall be measured at its fair value. If its fair value cannot be obtainedinareliableway,itshallbemeasuredatitsnominalamount.Thegovernmentsubsidiesmeasuredattheir nominalamountsshallbedirectlyincludedinthecurrentprofitsandlosses.
The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within the useful lives of the relevant assets, and included in the current profits and losses. The government subsidies pertinenttoincomes shallbetreated respectively inaccordancewith the circumstancesasfollows: thosesubsidies used for compensating the related future expenses or losses of the enterprise shall be recognized as deferred income and shall included in the current profits and losses during the period when the relevant expenses are recognized;orthosesubsidiesusedforcompensatingtherelatedexpensesorlossesincurredtotheenterpriseshall bedirectlyincludedinthecurrentprofitsandlosses.
Where it is necessary to refund any government subsidy which has been recognized, it shall be treated respectively in accordance with the circumstances as follows: if there is the deferred income concerned, the book balance of the deferred income shall be offset against, but the excessive part shall be included in the current profits and losses; or if there is no deferred income concerned to the government subsidy, it shall be directly includedinthecurrentprofitsandlosses.
28.Deferredincometaxassetsanddeferredincometaxliabilities
(1)Recognitionbasisofdeferredincometaxassets
Assets of deferred income taxes are produced in deductible temporary differences. Book value of assets and liabilities and the tax basis should deduct temporary differences. If the sufficient taxable income deducts temporary differences in future, it should not exceed the taxable income deducted temporary differences and determinerelatedassetsofdeferredincometaxes.
No deferred taxable assets should be recognized for the deductible temporary difference of initial recognition of assetsandliabilitiesarisingfromthetransactionwhichisnotbusinesscombination,theaccountingprofitswillnot 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 notlikely toacquire anyamount of taxable income tax thatmay beused for making up such
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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 beacquiredtomakeupsuchdeductibletemporarydifferences
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 deductiblelossortaxdeductiontobelikelyobtained.
On the balance sheet date, the deferred income assets shall be measured at the tax rate applicable to the period duringwhichtheassetsareexpectedtoberecoveredortheliabilitiesareexpectedtobesettled.
The book value of deferred income tax assets shall be reviewed at each balance sheet date. If it is unlikely to obtainsufficienttaxableincometooffsetagainstthebenefitofthedeferredincometaxasset,thebookvalueofthe deferred income tax assets shall be written down.Any such write-down should be subsequently reversed where it becomesprobablethatsufficienttaxableincomewillbeavailable.
(2)Recognitionbasisofdeferredincometaxliabilities
Deferredincome taxliabilities existin thetaxable temporarydifferences.Owningto theincreaseoftheamountof the income of taxes payable and the income taxes payable of the enterprises in the reserve period, the economic benefitsoftheenterprisesdischarged.Duringitsoccurrenceperiod,ifitcausedtheenterprisestopayforthetaxes, shouldrecognizedasliabilities.
No deferred tax liability is recognized for a temporary difference arising from the initial recognition of goodwill, the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss). Besides, no deferred tax assets is recognized for the taxable temporary differences related to the investments of subsidiary companies, associated enterprises and joint enterprises, and the investing enterprise can control the time of the reverse of temporary differences as well as the temporary differences are unlikely to be reversed in the excepted future. Otherwise, the Group should recognizethedeferredincometaxliabilitiesarisingformothertaxabletemporarydifference.
On the balance sheet date, the deferred income tax liabilities shall be measured at the tax rate applicable to the periodduringwhichtheassetsareexpectedtoberecoveredortheliabilitiesareexpectedtobesettled.
29.Operatingleaseandfinanciallease
(1)Accountingtreatmentsofoperatinglease
①BusinessofoperatingleasesrecordedbytheGroupasthelessee
The rent expenses from operating leases shall be recorded by the lessee in the relevant asset costs or the profits and losses of the current period by using the straight-line method over each period of the lease term. The initial direct costs shall be recognized as the profits and losses of the current period. The contingent rents shall be recordedintotheprofitsandlossesofthecurrentperiodinwhichtheyactuallyarise.
②BusinessofoperatingleasesrecordedbytheGroupasthelessor
Therentincomes fromoperatingleasesshallberecognizedas theprofits andlossesofthecurrentperiodbyusing 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
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into current profits and losses when incurred. The contingent rents shall be recorded into the profits and losses of thecurrentperiodinwhichtheyactuallyarise.
(2)Accountingtreatmentsoffinanciallease
①BusinessoffinanceleasesrecordedbytheGroupasthelessee
On the lease beginning date, the Group shall record the lower one of the fair value of the leased asset and the present value of the minimum lease payments on the lease beginning date as the entering value in an account, recognize the amount of the minimum lease payments as the entering value in an account of long-term account payable, andtreatthe balancebetweenthe recordedamountof theleased assetandthe long-term accountpayable 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 paymentsshallberespectivelystatedinlong-termliabilitiesandlong-termliabilitiesduewithin1year.
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 lossesofthecurrentperiodinwhichtheyactuallyarise.
②BusinessoffinanceleasesrecordedbytheGroupasthelessor
On the beginning date of the lease term, the Group shall recognize the sum of the minimum lease receipts on the lease beginning date and the initial direct costs as the entering value in an account of the financing lease values receivable, and record the unguaranteed residual value at the same time. The balance between the sum of the minimum lease receipts, the initial direct costs and the unguaranteed residual value and the sum of their present values shall be recognized as unrealized financing income. The balance through deducting unrealized financing incomes from the finance lease accounts receivable shallbe respectively stated in long-term claims andlong-term claimsduewithin1year.
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 lossesofthecurrentperiodinwhichtheyactuallyarise.
(3)Accountingtreatmentforthosesaleandlease-back
30.Assetsheldforsale
(1)Recognitioncriteriaoftheassetsheldforsale
(2)Accountingtreatmentsoftheassetsheldforsale
31.Capitalizationofassets
32.Hedgingaccounting
33.Changesinmainaccountingpoliciesandestimates
Werethemainaccountingpoliciesorestimateschangedduringthereportperiod?
□Yes√No
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Duringthereportingperiod,therewasnochangeinmainaccountingpolicyandestimate.
(1)Changeofaccountingpolicies
Werethemainaccountingpolicieschangedduringthereportperiod?
□Yes√No
(2)Changeofaccountingestimates
Werethemainaccountingestimateschangedduringthereportperiod?
□Yes√No
34.Correctionofpreviousaccountingerrors
Wasanyaccountingerrormadeinpreviousperiodsdiscoveredinthereportperiod?
√Yes□No
Duringthereportingperiod,therewasnopreviousaccountingerror.
(1)Retrospectiverestatementmethod
Wasanypreviousaccountingerroradoptingretrospectiverestatementmethoddiscoveredinthereportperiod?
□Yes√No
(2)Prospectiveapplicationmethod
Wasanypreviousaccountingerroradoptingprospectiveapplicationmethoddiscoveredinthereportperiod?
□Yes√No
35.Othermainaccountingpoliciesandestimatesaswellascompilationmethodoffinancialstatements Employeecompensation
TheGrouprecordedtheemployeecompensationpayablesasliabilitiesduringtheserviceperiodofemployee. The Group joins in the employee social security system established by the government institution in accordance with relevant rules and laws, which include the basic retirement insurance, medical insurance and other social insurances, as well as the housing accumulation fund, and the relevant expenditures, should be recorded into cost ofrelevantassetsorcurrentprofitsandlossesupontheoccurrence.
If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant labor contract or brings forward any compensation proposal for the purpose of encouraging the employee to accept a layoff, and the following conditions are met concurrently, the enterprise shall recognize the expected liabilities incurred due to the compensation for the cancellation of the labor relationship with the employee, and shall simultaneously record them into the profit or loss for the current period: the enterprise has formulated a formal plan on the cancellation of labor relationship or has brought forward a proposal on voluntary layoff and will execute it soon; and the enterprise is unable to unilaterally withdraw the plan on the cancellation of labor relationshiporthelayoffproposal.
The insideemployee retirementplanis treated byadoptingthesame principlewith the abovedismiss ionwelfare. The group would recorded the salary and the social security insurance fees paid and so on from theemployee’s service terminative date to normal retirement date into current profits and losses (dismiss ion welfare) under the conditionthattheymeettherecognitionconditionsofestimatedliabilities.
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Impairmentofnon-currentandnon-financialassets
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.Recoverableamountsshouldbetestedfordecreaseinvalueifitexists.OtherintangibleAssetsofreputation and uncertain service life and other non-accessible intangible assets should be tested for decrease in value no matterwhetheritexists.
If the recoverable amount is less than book value in impairment test results, the provision for impairment of differences shouldinclude in impairmentloss. Recoverable amounts would bethe higher ofnetvalue ofassetfair 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 theBuyer’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 merchantableAssets related to asset disposal. Present value ofpredictedassetcashflow shouldbe determinedbythe properdiscountrate accordingtoAssets 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 accordingto the belonging assetgroup.assetgroup is the minimum assetcombination producingcash flowindependently.
In impairment test, book value of the business reputation in financial report should be shared to beneficial asset group and asset group combination in collaboration of business merger. It is shown in the test that if recoverable amountsofsharedbusinessreputationassetgrouporassetgroupcombinationarelowerthanbookvalue,itshould determinetheimpairmentloss.Impairmentlossamountshouldfirstlybedeductedandsharedtothebookvalueof business reputation of asset group or asset group combination, then deduct book value of all assets according to proportions of other book value of above assets in asset group or asset group combination except business reputation.
Aftertheassetimpairmentlossisdetermined,recoverablevalueamountswouldnotbereturnedinfuture. Criticalaccountingjudgmentsandestimates
Due to the inside uncertainty of operating activity, the Group needed to make judgments, estimates and assumption on the book value of the accounts without accurate measurement during the employment of accounting policies.And these judgments, estimates and assumption were made basing on the prior experience of the senior executives of the Group, as well as in consideration of other factors. These judgments, estimates and assumptionwould alsoaffectthereportamountof income, costs,assets andliabilities, aswellas thedisclosureof contingent liabilities on balance sheet date. However, the uncertainty of these estimates was likely to cause significantadjustmentonthebookvalueoftheaffectedassetsandliabilities.
The Group would check periodically the above judgments, estimates and assumption on the basis of continuing operation. For the changes in accounting estimates only affected on the current period, the influence should be recognized at the period of change occurred; for the changes in accounting estimates affected the current period andalsothefutureperiod,theinfluenceshouldberecognizedattheperiodofchangeoccurredandfutureperiod. On the balance sheetdate, the Group needed to make judgments, estimates andassumption onthe accounts in the followingimportantitems:
(1)Categorizationofleasing
2013AnnualReportofKonkaGroupCo.,Ltd.
InaccordancewithAccountingStandardsforEnterprisesNo.21–Leasing,theGroupcategorized theleasinginto operating lease and finance lease. During the categorization, the management level needed to make analysis and judgmentonwhetheralltheriskandcompensationrelatedwiththeleasedassetshadbeentransferredtotheleasee, orwhethertheGrouphadalreadyundertakenalltheriskandcompensationrelatedwiththeleasedassets.
(2)Provisionforbaddebts
Inaccordancewiththeaccountingpoliciesofaccountsreceivable,theGroupmeasuredthelossesforbaddebtsby adopting allowance method. The impairment of accounts receivable was based on the appraisal of the recoverability of accounts receivable. The impairment of accounts receivable was dependenton the judgment and estimates. The actual amount and the difference of previous estimates would affect the book value of accounts receivable and the withdrawal and reversal on provision for bad debts of accounts receivable during the period of estimatesbeingchanged.
(3)Provisionforfallingpriceofinventories
In accordancewith theaccountingpolicies ofinventories, fortheinventories thatthecosts weremorethanthenet realizablevalueaswellasout-of-dateanddull-saleinventories, theGroupwithdrewtheprovisionforfallingprice of inventories on the lower one between costs and net realizable value. Evaluating the falling price of inventories needed the management level gain the valid evidence and take full consideration of the purpose of inventories, influence of events after balance sheet date and other factors, and then made relevant judgments and estimates. The actual amount and the difference of previous estimates would affect the book value of inventories and the withdrawalandreversalonprovisionforbaddebtsofinventoriesduringtheperiodofestimatesbeingchanged. (4)Thefairvalueoffinancialinstrument
For the financial instruments without active market, the Group recognized the fair value by various methods. These evaluation methods included discounted cash flow mode analysis, etc. The Group needed to estimate the future cash flow, credit risk, fluctuation rate of market and relativity and other factors, as well as choose the propertydiscountrate.Duetotheuncertaintyofrelevantassumptions,sotheirchanges wouldaffectthe fairvalue offinancialinstrument.
(5)Theimpairmentoffinancialassetsavailableforsale
The Group judged whether the financial assets available for sale were impaired relying heavily on the judgment andassumption of themanagementteam, soas todecide whetherrecognized theimpairment losses inthe income statement. During the process of making the judgment and assumption, the Group needed to appraise the balance of the cost of the investment exceeding its fair value and the continuous period, the financial status and business forecast in a short period, including the industrial situation, technical reform, credit level, default rate and risk of counterparty.
(6)Provisionforimpairmentofnon-financialnon-currentassets
The Group made a judgment on the non-currentassets other than financialassets whether they hadany indication of impairment on the balancesheetdate. For the intangible assets withoutfinite 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 subject to impairment test when there was indication ofimpairmentshowingthatthebookvaluecan’tberecoverable.
Whenthebookvalueoftheassetsorassetsportfoliowasmorethantherecoverableamount,whichwasthehigher
2013AnnualReportofKonkaGroupCo.,Ltd.
one between the net amount of fair value after deducting the disposal expenses and the discounted amount of the estimatedfuturecashflow,itmeansimpairmentincurred.
The netamountof fair value after deducting the disposalexpensesshouldbe fixed theprice in the sale agreement forsimilarassetsinthefairtransactionminustheincreasedcostsdirectlyattributabletotheassetsdisposal. When estimated the discounted value of future cash flow, the Group needed to make important judgment on the output, selling price, relevant costs and the discount rate for calculating the discounted amount, etc. When estimatedtherecoverableamount,theGroupwouldadoptalltheavailabledocuments,includingthepredictionfor relevantoutput,sellingpriceandrelevantoperatingcostsarisingfromreasonableandsupportiveassumptions. The Group made the impairment test on goodwill at least one time per year, which required to predict the discountedamountofthefuturecashflowoftheassetsorassetsportfoliowiththedistributedgoodwill,forwhich, the Group needed to predict the future cash flow of the assets or assets portfolio, and adopt the property discountedratetodecidethediscountedamountoffuturecashflow.
(7)Depreciationandamortization
For the investment real estate, fixed assets and intangible assets, the Group withdrew the depreciation and amortization by adopting the straight-line method during the service life after full consideration of the salvage value.TheGroupcheckedtheservicelifeperiodicallysoastodecidetheamountofdepreciationandamortization at each reporting period. The service life was fixed by the Group in accordance with the previous experience of thesimilar assetsandtheexpectedtechnicalupdate.If therewasanysignificantchangeontheprevious estimates, thedepreciationandamortizationexpensesshouldbeadjusted.
(8)Expendituresfordevelopment
When fixing the amount of capitalization, the management level of the Group needed to make assumption on the predictedfuturecashflow,propertydiscountedrateandestimatedbeneficiaryperiodforrelevantassets.
(9)Deferredincometaxassets
Within the limit that it was likely to have sufficient taxable profits to offset the losses, the Group recognized the deferred income tax assets by all the unused tax losses, which needed the management level of the Group to estimate time andamountofthe futuretaxable profits incurredwith many judgments, aswell asintegrate strategy oftaxpayment,todecidetheamountofdeferredincometaxassetswhichshouldberecognized.
(10)Incometax
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 taxationmatersandtheirinitialestimates,thedifferenceswouldaffectthecurrentincometaxanddeferredincome taxattheperiodofultimaterecognition.
(11)Estimatedliabilities
The Group made the estimation on product quality guarantee, predicted loss of contract and the fine for delayed delivery etc.and withdrew the relevantprovisionfor estimated liabilities in accordancethe provisions of contract, current knowledge and experience. Under the condition that the contingent event has formed a current duty and fulfilling the duty is likely to cause the economical interest outflow the Group, the Group measures the estimated liabilities in accordance with the best estimate of the necessary expenses for the performance of the current duty.
2013AnnualReportofKonkaGroupCo.,Ltd.
The recognition and measurement of estimated liabilities were heavily relied on the judgment of the management team.Duringtheprocessofmakingjudgment,theGroupneededtoappraisetherelevantrisks,uncertaintyandthe timevalueofmoneyandetc.
Of which, theGroup estimated theliabilities basingonthe after-sale services commitments to the customers upon thesale,repairandreformofgoods.Whenestimatingtheliabilities,theGrouphasfullytakentheconsiderationof the latest repair experience, butwhich may notreflectthe repair situation in the future.Any increase /decreaseof theprovisionforestimatedliabilitiesmayaffecttheprofitsandlossesinthefutureperiods.
V. Taxation
1.Maintaxesandtaxrate
||||
|-|-|-|
|Categoryoftaxes|Taxbasis|Taxrate|
|VAT|Calculated the output tax at 17% oftaxable income and paid the VAT bythe amount after deducting thedeductiblewithholdingVATat currentperiod.|17%|
|Businesstax|Paid by 5% of taxable businessincome|5%|
|Urbanmaintenanceandconstructiontax|Paid at 7% of the circulating taxactuallypaid|7%|
|Enterpriseincometax|Paidaccordingtotheincomeamountofthetaxespayableandtheapplicableincometaxrate|Paidat25%ofthetaxableincome,HongKongcompanyat16.5%,TelecommunicationTechnology,ChongqingKonka,DongguanMouldandplastic,PrecisionMold,KunshanKonka,AnhuiTongchuangandAnhuiKonkaat15%|
|Educationsurtax|Paid at 3% of the circulating taxactuallypaid|3%|
|Localeducationsurtax|Paid at 2% of the circulating taxactuallypaid|2%|

Theincometaxratesadoptedbyeachsubsidiaryandbranchfactory
As for the transportation revenue of the logistic business of theCompany’s subsidiary Shushida Logistics, in accordancewiththeNoticeonCarryingoutthePilotofChangeonChargingtheBusinessTaxesofTransportation Industry and Partial Modern Service Industry to Value Added Taxes in Eight Provinces and Cities including Beijing issued by the Ministry of Finance and the National Taxation Bureau (CS[2012] No. 71) and other
regulations, it was changed to charge the VAT since 1 Sept. 2012, with the tax rate of3%. From 1 Jun. 2013,
Shushida Logistics received the general taxpayer qualification with the VATrate of the transportation revenue of
2013AnnualReportofKonkaGroupCo.,Ltd.
11%andtheotherserviceof6%.
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,NationalDevelopmentandReformCommission, MinistryofIndustryandInformation, 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 appliancesandelectronicproductsofPRCstartedtopaythetreatmentfundsfordiscardedelectricalapplianceand electronic products according the sales volume (trusted processing amount) and relevant charging standards from 1 Jul. 2012.According to the regulations, theGroup’s charging standards were RMB 13 per set of TV, RMB 12 persetofrefrigeratorandRMB7persetofwashingmachine.
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 fromJanuary1,2008.
According to the above methods, theCompany’s sales branch companies in each area will hand in the corporate incometaxesinadvancefrom1Jan.2008andwillbefinalsettleduniformlybytheCompanyattheyear-end. Except for Telecommunication Technology and Precision Mold set up in Shenzhen were15%, the tax rates of other companies in 2013 were25%, the companies in other cities of25%, Hong Kong companies of16.5%,ChongqingKonka,DongguanMouldandplastic,AnhuiTongchuang,KunshanKonkaandAnhuiKonkaof15%. 2.Taxpreferenceandapproveddocument
(1) On 30 Nov. 2011, the wholly-owned subsidiary of the Company-Shenzhen Konka Telecommunications Technology Co., Ltd. obtained the Certificate of High-Tech Enterprise No. GF201144200088 jointly issued by Shenzhen Bureau of Science Technology& Information, Shenzhen Financial Bureau, Shenzhen Municipal State TaxationBureau,andShenzhenMunicipalLocalTaxationBureau,validforthreeyears.Inlightoftherelevanttax regulations, Shenzhen Konka Telecommunications Technology Co., Ltd. would be entitled to the relevant preferentialpoliciesconcerningthehi-techenterprisefrom2011to2013forconsecutivethreeyears,andbeleviedthebusinessincometaxatthepreferentialtariffof15%.
(2) TheCompany’ssubsidiary—Chongqing Qingjia Electronics Co., Ltd. is levied the business income tax at the preferential tariff of15% from 1 Jan. 2011 to 31 Dec. 2020 in accordance with CS (2011) No. 58 Notice on RelevantTaxPoliciesonDeeplyImplementingthewesterndevelopmentstrategy.
(3) On 12 Sept. 2012, theCompany’ssubsidiary— Dongguan Konka Mould Plastic was filed for the high-tech enterprise certification by Ministry of Science and Technology, and received Certificate of High-Tech Enterprise with No. GF201244000053 was valid for three years. According to relevant taxation regulations, Dongguan Konka Mould Plastic would enjoy relevant preferential policies for high-tech enterprises for successive threeyearssince2012andwasleviedatthepreferentialenterpriseincometaxrateof15%.
(4) On 14 Oct., 2013, the subsidiary of the Company, Anhui Konka, received the certificate of high-technology
2013AnnualReportofKonkaGroupCo.,Ltd.
enterprises (No.: GF2013342000298) awarded byAnhui Science andTechnology Department,Anhui Department of Finance,Anhui State Taxation Bureau andAnhui Local Taxation Bureau. The period of validity is three years. According to taxation rules, Anhui Konka would enjoy the preferential tax privileges of high-technologyenterprisesfrom2013to2015andpaytheenterpriseincometaxatthepreferentialrateof15%.
(5) On 26 Sep. 2010, Dongguan Konka Co., Ltd., theCompany’s subsidiary gained the Certificate of Hi-tech Enterprise jointly issued byDepartment ofScience&Technology,Finance Bureau, NationalTaxation Bureauand Local Taxation Bureau of Guangdong province (No. GR-201044000209) with valid term of three years. In accordance with relevant stipulations of taxation, Dongguan Konka Co., Ltd. will enjoy relevant preferential policiesforhigh-techenterprisesforsuccessivethreeyearssince2010andwasleviedatthepreferentialenterpriseincometaxrateof15%.
(6) On 23 Feb. 2011, theCompany’ssubsidiary—Shenzhen Konka Precision Mold Manufacturing Co., Ltd. gained the Certificate of Hi-tech Enterprise jointly issued by Department of Science& Technology, Finance Bureau, National Taxation Bureau and Local Taxation Bureau of Shenzhen (No. GR201144200236) with valid term of three years. In accordance with relevant stipulations of taxation, Shenzhen Konka Precision Mold Manufacturing Co., Ltd. will enjoy relevant preferential policies for high-tech enterprises for successive threeyearssince2010andwasleviedatthepreferentialenterpriseincometaxrateof15%.
(7) On 8 Nov. 2011, Kunshan Konka Electronic Co., Ltd., theCompany’s subsidiary gained the Certificate of Hi-tech Enterprise jointly issued by Department of Science& Technology, Finance Bureau, National Taxation Bureau and LocalTaxation Bureau of Jiangsu province (No. GR201132000506) with valid term of three years. In accordance with relevant stipulations of taxation, Kunshan Konka Electronic Co., Ltd. will enjoy relevant preferential policies for high-tech enterprises for successive three years since 2011 and was levied at thepreferentialenterpriseincometaxrateof15%.
(8) On 3 Jul. 2012, theCompany’s subsidiary Anhui Tongchuang received the Certificate of Hi-tech Enterprise jointly issued by Department of Science& Technology, Finance Bureau, National Taxation Bureau and Local Taxation Bureau of Anhui Province (No. GR201234000074) with valid term of three years. In accordance with relevant stipulations of taxation, Anhui Tongchuang will enjoy relevant preferential policies for high-tech enterprises for successive three years since 2012 and was levied at the preferential enterprise income tax rate of15%.
(9) The information network obtained High-Technology Enterprise Certificate (No.: GR201344200179) awarded by Shenzhen Commission on Innovation and Technology, Shenzhen Financial Committee, Shenzhen State Taxation Bureau, and Shenzhen Local Taxation Bureau on 22 July, 2013. According to Enterprise Income Tax Law and Implementation Rules of the People's Republic of China, the Company enjoys the referential taxprivilegesofhigh-technologyenterprisesandpaystheenterpriseincometaxatthepreferentialrateof15%. (10)According to the CS No.[2011] 100 Article issued by Ministry of Finance and State Administration of
2013AnnualReportofKonkaGroupCo.,Ltd.
Taxation, if the ordinary VAT payer sells software products developed by itself, the VAT is levied at the rate of17%andafterthat,thepartofactualtaxburdenofVATwhichexceeds3%canenjoythepolicyofrefundingtaxes immediately after levying taxes. Video engineering, information network and Wankaida of the Company and its subsidiariescanenjoysuchfavorablepolicy.
3.Otherexplanations
VI.Business Combination andConsolidated FinancialStatements
1.Subsidiaries
Subsidiariesobtainedthroughestablishmentorinvestment
Unit: RMB Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Subsidiaries|Type|Registeredplace|Businessnature|Registeredcapital|Businessscope|Actualamountofinvestmentsattheperiod-end|Otheressentialinvestment|Theproportionofholdingshares（%）|Theproportionofvotingrights（%）|Includedinconsolidatedstatement|Minorityinterest|Deductibleminorityinterests|Balanceofparentcompany’sequityafterdeductingthedifferencethatlossofminorityinterestsexceedequityobtainedbyminorityshareholders|
|ShenzhenKonk|Wholly-owned|Shenzhen,Guan|Manufacturing|RMB12,000.00|Productionand|12,000.00||100%|100%|Yes||||

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||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|aTelecommunicationsTechnologyCo.,Ltd.|subsidiary|gdong|industry||salesofmobilecommunicationproductsandsalesofmulti-mediaproducts||||||
|ShenzhenKonkaVideo&CommunicationSystemsEngineeringCo.,Ltd.|Holdingsubsidiary|Shenzhen,Guangdong|Manufacturingindustry|RMB1,500.00|ProductionandsalesofLEDdisplayscreensandlighting|900.00|60%|60%|Yes|-22.97|
|ShenzhenKonkaPrecisionMouldManufacturingCo.,Ltd.|Holdingsubsidiary|Shenzhen,Guangdong|Manufacturingindustry|RMB1,596.88|Productionandsalesofplastheticsandmoulds|739.50|46.31%|52.49%|Yes|4,260.43|

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|-|-|-|-|-|-|-|-|-|-|-|
|ShenzhenKonkaElectronicCo.,Ltd.|Holdingsubsidiary|Shenzhen,Guangdong|Salesofelectronicappliance|RMB830.00|Productionandsalesofhouseholdappliance|1,073.25|51%|51%|Yes|-881.94|
|ShenzhenKonkaInformationNetworkCo.,Ltd.|Wholly-ownedsubsidiary|Shenzhen,Guangdong|Manufacturingindustry|RMB3,000.00|Productionandsalesofdigitalnetworkproducts|3,000.00|100%|100%|Yes||
|ShenzhenKonkaPlasticProductsCo.,Ltd.|Wholly-ownedsubsidiary|Shenzhen,Guangdong|Manufacturingindustry|RMB950.00|Productionandsalesofplasthetics|950.00|100%|100%|Yes||
|ShenzhenKonkaLifeElectricalApplianceCo.,Ltd.|Wholly-ownedsubsidiary|Shenzhen,Guangdong|Manufacturingindustry|RMB4,200.00|Research,development,designandsalesofelectricproducts|4,200.00|100%|100%|Yes||
|Shenz|Wholl|Shenz|Invest|RMB|Invest|6,500|100%|100%|Yes||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|henKonkaElectronicFittingsTechnologyCo.,Ltd.|y-ownedsubsidiary|hen,Guangdong|mentholding|6,500.00|ment|.00||||||
|MudanjiangArcticOceanAppliancesCo.,Ltd.|Holdingsubsidiary|Mudanjiang,Heilongjiang|Manufacturingindustry|RMB6,000.00|Productionandsalesofmulti-mediaproducts|3,600.00|60%|60%|Yes|1,179.53||
|ShanxiKonkaElectronicCo.,Ltd.|Holdingsubsidiary(alreadybeentransferredandwhetherwasalsothesubsidiaryoftheCompany)|Xianyang,Shaanxi|Manufacturingindustry|RMB6,950.00|Productionandsalesofmulti-mediaproducts|5,529.48|60%|60%|Yes|2,934.67||
|ChongqingKonkaEurot|Holdingsubsidiary|Chongqing|Manufacturingindustry|RMB3,000.00|Productionandsalesof|1,710.00|57%|57%|Yes|-413.40|385.46|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|omotiveElectronicCo.,Ltd.|||||Eurotomotiveelectronicequipment||||||
|ChongqingQingjiaElectronicCo.,Ltd.|Holdingsubsidiary|Chongqing|Manufacturingindustry|RMB1,500.00|Productionandsalesofelectronicturnersand3Dglasses|600.00|40%|40%|Yes|1,158.81|
|AnhuiKonkaElectronicCo.,Ltd.|Holdingsubsidiary|Chuzhou,Anhui|Manufacturingindustry|RMB14,000.00|Productionandsalesofmulti-mediaproducts|12,278.09|78%|78%|Yes|5,982.80|
|AnhuiKonkaApplianceCo.,Ltd.|Holdingsubsidiary|Chuzhou,Anhui|Manufacturingindustry|RMB7,819.00|Productionandsalesofhouseholdappliancelikerefrigeratorsandwashingmachi|7,848.11|96.46%|97.45%|Yes|261.54|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||ne||||||
|ChangshuKonkaElectronicCo.,Ltd.KonkaElectronicCo.,Ltd.|Holdingsubsidiary|Changshu,Jiangsu|Manufacturingindustry|RMB2,465.00|Productionandsalesofelectronicproductsandelectronictransformer|2,027.89|60%|60%|Yes|799.27|
|KunshanKonkaElectronicCo.,Ltd.|Wholly-ownedsubsidiary|Kunshan,Jiangsu|Manufacturingindustry|RMB35,000.00|Productionandsalesofliquidcrystalmodulesandmulti-mediaproducts|35,000.00|100%|100%|Yes||
|DongguanKonkaElectronicCo.,Ltd.|Wholly-ownedsubsidiary|Dongguan,Guangdong|Manufacturingindustry|RMB26,667.00|Productionandsalesofmulti-mediaproducts|26,667.00|100%|100%|Yes||
|DongguanKonkaPacking|Wholly-ownedsubsidiary|Dongguan,Guangdong|Manufacturingindustry|RMB1,000.00|Productionandsalesofplasti|1,000.00|100%|100%|Yes||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|MaterialsCo.,Ltd.|||||cproductsandplasticpackaging||||||
|DongguanKonkaMouldPlasticCo.,Ltd.|Holdingsubsidiary|Dongguan,Guangdong|Manufacturingindustry|RMB1,000.00|Productionandsalesofmouldsandplasthetics|1,000.00|59.73%|59.73%|Yes|4,071.57|
|BoluoKonkaPCBCo.,Ltd.|Holdingsubsidiary|Boluo，Guangdong|Manufacturingindustry|RMB4,000.00|Productionandsalesofsingle-facedanddouble-facedcircuitboardelectronicproducts|2,428.52|51%|51%|Yes|320.04|
|BoluoKonkaPrecisionTechnologyCo.,Ltd.|Wholly-ownedsubsidiary|Boluo,Guangdong|Manufacturingindustry|RMB1,500.00|Productionandsalesofhigh-densitycircuit|1,125.00|100%|100%|Yes||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||boardelectronicproductions|||||
|Konka(Nanhai)DevelopmentCenter|Wholly-ownedsubsidiary|Foshan,Guangdong|Researchanddevelopment|RMB50.00|R&Dofflatpaneldisplaytechnologiesandproducts|50.00|100%|100%|Yes|
|HongKongKonkaCo.,Ltd.|Wholly-ownedsubsidiary|HongKong，China|Internationaltrade|HKD50.00|Exportingandimportingmachineryandelectronicproducts|54.00|100%|100%|Yes|
|KonkaHouseholdAppliancesInvestment&DevelopmentCo.,Ltd.|Wholly-ownedsubsidiary|HongKong,China|Investmentholding|HKD50.00|Investment|53.06|100%|100%|Yes|
|KonkaHouse|Wholly-owned|HongKong,China|Internationaltrade|HKD50.00|Exportandimpor|53.31|100%|100%|Yes|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|holdAppliancesInternationalTradingCo.,Ltd.|subsidiary||||tofelectronicproducts||||||
|KONKAAMERICA,INC.|Wholly-ownedsubsidiary|TheUSA|Internationaltrade|USD100.00|Salesofelectronicproducts|806.25|100%|100%|Yes||
|Konka(Europe)Co.,Ltd.|Wholly-ownedsubsidiary|Frankfurt,Germany,Europe|Internationaltrade|EUR2.50|Salesofelectronicproducts|26.15|100%|100%|Yes||
|DongguanXutongdaMouldPlasticCo.,Ltd.|Holdingsubsidiary|DongguanGuangdong|Manufacturingindustry|RMB500.00|Productionandsalesofmouldsandplasthetics|231.55|46.31%|52.49%|Yes|375.91|
|ShenzhenKonkaOptoelectronicTechnologyCo.,Ltd.|Wholly-ownedsubsidiary|ShenzhenGuangdong|Researchanddevelopment|RMB1,000.00|Development,salesandmaintenanceoftechnologieslikeliquidcrysta|1,000.00|100%|100%|Yes||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||lmodules||||||
|ShenzhenWankaidaScienceandTechnologyCo.,Ltd.|Wholly-ownedsubsidiary|ShenzhenGuangdong|Softwaredevelopment|RMB1,000.00|Developmentandmaintenanceofsoftwaretechnologies|1,000.00|100%|100%|Yes||
|KunshanKangshengInvestmentDevelopmentCo.,Ltd.|Wholly-ownedsubsidiary|KunshanJiangsu|Propertyindustry|RMB35,000.00|Development,operationandinvestmentofrealestate|35,000.00|100%|100%|Yes||
|AnhuiKonkaTongchuangHouseholdAppliancesCo.,Ltd.|Wholly-ownedsubsidiary|ChuzhouAnhui|Manufacturingindustry|RMB18,000.00|Productionandsalesofhouseholdappliancelikerefrigeratorsandwashingmachine|9,000.00|75%|100%|Yes||
|Indonesia|Holding|Indonesia|Internationa|USD150.00|Salesof|497.17|51%|51%|Yes|3.56|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|KonkaElectronicsCo.,Ltd.|subsidiary||ltrade||electronicproducts||||||
|ShenzhenShushidaLogisticsServiceCo.,Ltd.|Wholly-ownedsubsidiary|ShenzhenGuangdong|Logistics|RMB1,000.00|Ordinaryfreighttransport|1,000.00|100%|100%|Yes||
|BeijingKonkaElectronicCo.,Ltd.|Wholly-ownedsubsidiary|Beijing|Salesofhouseholdappliance|RMB3,000.00|Salesofelectronicproducts|3,000.00|100%|100%|Yes||
|KunshanJielunteMouldPlasticCo. ,Ltd.|Holdingsubsidiary|KunshanJiangsu|Manufacturingindustry|RMB10,000.00|Productionandsalesofmouldsandplasthetics|10,000.00|46.31%|52.49%|Yes|-55.49|
|WuhanJielunteMouldPlasticCo.,Ltd.|Holdingsubsidiary|HubeiWuhan|Manufacturingindustry|RMB3,000.00|Research,development,production,salesofmouldprodu|3,000.00|46.31%|52.49%|Yes|-16.71|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||ctionsandhardwareproducts.||||||
|ChuzhouJielunteMouldPlasticCo.,Ltd.|Holdingsubsidiary|AnhuiChuzhou|Manufacturingindustry|RMB2,000.00|Research,development,production,salesofmouldproductions,plasticproductsandhardwareproducts.|2,000.00|46.31%|52.49%|Yes|6.83|

Othernotestosubsidiariesobtainedbyestablishmentandinvestment:
Notes:① The Company holds46.31% of shares of Shenzhen Konka Precision Mold Manufacturing Co., Ltd., Konka Household Appliances Investment& Development Co., Ltd, a subsidiary company of the Company, are entrusted to manage6.18% shares held by Shenzhen Dingshengxin Mould Technology Consultation Co., Ltd. After the entrustment, the percentage of voting rights of the Company increases to52.49%. Therefore, the financial statements of Shenzhen Konka Precision Mold Manufacturing Co., Ltd. are combined into the consolidatedfinancialstatements.XutongdaisawhollyfundedsubsidiaryofDongguanKonkaMouldPlasticCo., Ltdandisalsocombinedintotheconsolidatedfinancialstatements.
② The Company holds40.00% shares of Chongqing Qingjia Electronic Co., Ltd that all senior managers of ChongqingQingjiaElectronicCo.,LtdareappointedanddismissedbytheCompany.Amongthedirectors,halfof them or over half are dispatcheddirectly orindirectly bythe Company.Moreover,in Chongqing Qingjia, 70% to80%of itsproducts aresoldtothe CompanyandthustheCompanyhasabsoluteinfluenceandcontrolover the production and operation of Chongqing Qingjia Electronic Co., Ltd., which is combined into the consolidated
financialstatement.
③ Shenzhen Konka Precision Mold Manufacturing Co., Ltd. held100% equity of Dongguan Xutongda Mould
Plastic Co.,Ltd.,andtheCompanyistheactualcontrollerof DongguanXutongdaMouldPlasticCo.,Ltd.,forthe
2013AnnualReportofKonkaGroupCo.,Ltd.
Companyindirectlyheld46.31%sharesand52.49% votingright ofDongguan Xutongda Mould Plastic Co.,Ltd., whichiscombinedintotheconsolidatedfinancialstatement.
④ Precision Mould held100% equity of Kunshan Jielunte, Wuhan Jielunte and Chuzhou Jielunte and was actually controlled by the Company.The Company indirectly held46.31% equity of Jielunte and the52.49% voting right ofit,，whichiscombinedintotheconsolidatedfinancialstatement.
⑤ Anhui Tongchuang is a limited company jointly invested and established by the Company and Chuzhou Tongchuang Construction Investment Co., Ltd. (hereinafter refer to as “Tongchuang Construction”) with registrationcapitalofRMB180million,ofwhicheachpartyinvestedinRMB90millionrespectivelyoncontract. As to 31 Dec. 2010,AnhuiTongchuang with a paid-up capital of RMB 120 million (including paid-up capital of RMB 90 million of the Company,75.00% of total paid-up capital; and paid-up capital of RMB 30 million of Tongchuang Construction,25.00% of total paid-up capital ). According to contract sign by two parties, Tongchuang Construction has the rights of transferring stock ownership three years after the establishment of Anhui Tongchuang Company. Meanwhile, the Company can repurchase the said stock ownership and contracted with Tongchuang Investment Company that the Company shall receive fixed investment gains at2% of actual capital invested by the Group annually. So the Company can conduct actual control to Anhui Tongchuang Company,andcombinesitintotheconsolidatedfinancialstatement.
(2)Subsidiariesobtainedbybusinesscombinationunderthesamecontrol
Unit:RMBYuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Subsidiaries|Type|Registeredplace|Businessnature|Registeredcapital|Businessscope|Actualamountofinvestmentsattheperiod-end|Otheressentialinvestment|Theproportionofholdingshares（%）|Theproportionofvotingrights（%）|Includedinconsolidatedstatement|Minorityinterest|Deductibleminorityinterests|Balanceofparentcompany’sequityafterdeductingthedifferencethatlossofminorityinterestsexceed|

2013AnnualReportofKonkaGroupCo.,Ltd.
||
|-|
|equityobtainedbyminorityshareholders|

 Otherexplanationonsubsidiariesobtainedbybusinesscombinationundersamecontrol
(3)Subsidiariesobtainedbybusinesscombinationnotunderthesamecontrol
Unit:RMBYuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Subsidiaries|Type|Registeredplace|Businessnature|Registeredcapital|Businessscope|Actualamountofinvestmentsattheperiod-end|Otheressentialinvestment|Theproportionofholdingshares（%）|Theproportionofvotingrights（%）|Includedinconsolidatedstatement|Minorityinterest|Deductibleminorityinterests|Balanceofparentcompany’sequityafterdeductingthedifferencethatlossofminorityinterestsexceedequityobtainedbyminorityshareholders|

Otherexplanationonsubsidiariesobtainedbybusinesscombinationnotundersamecontrol
2013AnnualReportofKonkaGroupCo.,Ltd.
2.Specialpurposeentitiesoroperatingentitieswithcontrolrightformedbyentrustedoperationorlease Unit:RMBYuan
||||
|-|-|-|
|Name|MainbusinesswiththeCompany|Closingbalanceoftherecognizedmainassetsandliabilitiesintheconsolidatefinancialstatement|

Otherexplanationonspecialpurposeentitiesoroperatingentitieswithcontrolrightformedbyentrustedoperationorlease
3.Explanationsonchangesofconsolidationscope
Explanationsonchangesofconsolidationscope
√Applicable□Inapplicable
Thisyear(period)newlyincreased2combinedunitsoverthelastyearandthereasonsas:
(1) On 17 Feb. 2013, the wholly-owned subsidiary--Precision Mould invested and set up the wholly-ownedsubsidiaries—ChuzhouJieluntewhichiscombinedintotheconsolidatedfinancialstatementsincethatday. (2) On 15 Apr. 2013, the wholly-owned subsidiary--Precision Mould invested and set up the wholly-ownedsubsidiaries—WuhanJieluntewhichiscombinedintotheconsolidatedfinancialstatementsincethatday.
Thisyear(period)decreased1combinedunitoverthelastyearandthereasonas:
|||||||||
|-|-|-|-|-|-|-|-|
|O|n|30|Oct.|2013,|the|Company|disposed|

 whichisnotcombinedintotheconsolidatedfinancialstatementsincethatday.
4. Main entities which are newly included into or are not included into consolidation scope during the reportingperiod
Subsidiaries, special purpose entities and operation entities which formed their control rights through method such as entrusted managementoracceptingleasesthatnewlyincludedintoconsolidationscopeduringthereportingperiod.
Unit:RMBYuan
||||
|-|-|-|
|Name|Closingnetassets|Netprofitsofthereportingperiod|
|WuhanJielunte|29,688,751.08|-311,248.92|
|ChuzhouJielunte|20,127,293.38|127,293.38|

 Subsidiaries, special purpose entities and operation entities which formed their control rights through method such as entrusted managementoracceptingleaseswhichnotnewlyincludedintoconsolidationscopeduringthereportingperiod.
Unit:RMBYuan
||||
|-|-|-|
|Name|Netassetsonthedisposaldate|Netprofitsfromtheyear-begintothedisposaldate|
|ChongqingKonkaElectronicCo.,Ltd.|14,582,794.00|763,873.87|

 Otherexplanationoftheentitiesnewlyincludedintoconsolidationscopeandtheentitiesnotincludedinto.
5.Businesscombinationunderthesamecontrolduringthereportingperiod
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Combinedparty|Judgmentdataattributedtothebusiness|Actualcontrolpersonunderthesamecontrol|Revenuefromtheperiod-begintothecombination|Netprofitsfromthereportingperiodtothe|Cashflowoftheoperationactivitiesfromthe|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||
|-|-|-|-|
|combinationunderthesamecontrol|dateofthecombination|combinationdateofthecombination|reportingperiodtothecombinationdateofthecombination|

 Otherexplanationofthebusinesscombinationunderthesamecontrol
6.Businesscombinationnotundersamecontrolduringthereportingperiod
Unit:RMBYuan
||||
|-|-|-|
|Combinedparty|Amountofthegoodwill|Calculationmethodofthegoodwill|

 Otherexplanationofthebusinesscombinationnotunderthesamecontrol
Whethertherewasanysituationofmultipletransactionswhichrealizedtheenterprisemergerstepbystepandgainedthecontrol rightduringthereportingperiod?
□Applicable√Inapplicable
7.Subsidiariesreducedbysellingequitieswithoutcontrolrightduringthereportingperiod
||||
|-|-|-|
|Nameofthesubsidiary|Salesdate|Reorganizationmethodofgainsandlosses|
|ChongqingKonkaElectronicsCo.,Ltd.|30Oct.2013|ConfirmedthatitwilldisposeofthedateofdisposalofthenetassetsofthesubsidiaryenjoysbeingonthedisposalofequitypriceminusthecorrespondingdifferenceinthevalueoftheCompany'sconsolidatedstatementsofprofitandlosslevelsfordisposal.|

 Other notes to sell stake in loss of control of a subsidiary of reduced
On October 30, 2013 , a60% stake in Chongqing Konka the Company will own all transferred to Chongqing Machinery& Electronics Holding ( Group ) Company . The actual date of disposal of the loss of control of the company in Chongqing Konka net assets and financial, operational decision date.①disposal price and cash flow as follows: Unit:RMBYuan Item Amount
Disposal price 69,398,100.00 Cash and cash equivalents received 20,818,708.75 Less:Chongqing Konka held cash and cash equivalents 5,229,298.82 Net cash received from disposal 15,589,409.93②Chongqing Konka disposal of net assets as follows
Unit:RMBYuan Item Net asset disposal date last year-end net assets Current assets 5,282,383.04 3,672,862.19 Non-current assets 28,013,030.72 28,740,748.56 Current liabilities 18,712,619.76 18,594,690.62 Non-current liabilities — —
Total net assets 14,582,794.00 13,818,920.13
③loss on disposal is calculated as follows:
Unit:RMBYuan
2013AnnualReportofKonkaGroupCo.,Ltd.
Item Amount
Disposal price 69,398,100.00 Chongqing Konka net assets at the disposal date 14,582,794.00 The proportion of the Company 60% Less: net assets of the Company as at the date of disposal enjoyed 8,749,676.40 Plus: Chongqing Konka and other comprehensive income related to the amount
transferred to profit or loss on disposal
Disposal of investment income generated 60,648,423.60④Chongqing Konka beginning of the year to dispose of income from the date of disposal,asthecostandprofit：
Unit:RMB Yuan
Item Amount
Income 4,623,733.75 Less: costs and expenses 3,859,859.88 Total profit 763,873.87 Less: Income tax expense — Net profit 763,873.87 .
Whethertherewassituationofmultipletransactionswhichdisposedtheinvestmentofthesubsidiariesstepbysteptilllostthe controlrightduringthereportingperiod?
□Applicable√Inapplicable
8.Thecounterpurchasesinthereportingperiod
|||||
|-|-|-|-|
|Counterpurchasedparty|Basisofjudgingthecounterpurchases|Determinationmethodofthecombinationcost|Calculationmethodoftherecognizedgoodwillorthegainsandlossesaccruedintothereportingperiodofthecombination|

Otherexplanationofthecounterpurchases
9.Mergersinthereportingperiod
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Typeofthemergers|Mainassetsmergered||Mainliabilitiesmergered||
|Mergersunderthesamecontrol|Item|Amount|Item|Amount|
|Mergersnotunderthesamecontrol|Item|Amount|Item|Amount|

 Otherexplanationofthemergers
2013AnnualReportofKonkaGroupCo.,Ltd.
10.Exchangeratesofmajoritemsinfinancialstatementsforforeignentities
Itemofassetsandliabilities
Item
||
|-|
|31Dec.2013|
|USD1=RMB6.0969|
|HKD1=RMB0.78623|
|IDR100=RMB0.06480|
|EUR1=RMB8.4189|

Itemofincome,expenseandcashflow
Item
||
|-|
|2013|
|USD1=RMB6.1928|
|HKD1=RMB0.7984|
|IDR100=RMB0.05948|
|EUR1=RMB8.2211|

VII. Notes on major items in consolidated financial statements ofthe Company
1.Monetaryfunds
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Item|Closingbalance|||Openingbalance|||
||Amountinforeigncurrency|Exchangerate|AmountinRMB|Amountinforeigncurrency|Exchangerate|AmountinRMB|
|Cash:|--|--|18,884.53|--|--|1,861,577.93|
|RMB|--|--|15,434.03|--|--|1,858,311.95|
|HKD|282.31|0.7862|221.95|585.97|0.8109|475.16|
|USD|79.73|6.0969|486.10|444.01|6.2855|2,790.82|
|EUR|5,509,145.45|0.0004978|2,742.45||—||
|Bankdeposit:|--|--|1,771,470,536.68|--|--|822,181,591.44|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||
|-|-|-|-|-|-|-|
|RMB|--|--|1,459,709,622.32|--|--|610,781,217.62|
|HKD|14,308,150.69|0.7862|11,249,068.07|14,931,890.12|0.8109|12,108,269.70|
|USD|48,845,385.96|6.0969|297,805,433.63|31,371,330.00|6.2855|197,184,494.72|
|EUR|230,458.44|8.4189|1,940,206.56|206,307.43|8.3176|1,715,982.68|
|GBP|1.32|10.0556|13.27|1.32|10.1611|13.41|
|IDR|1,539,041,198.51|0.0004978|766,134.71|604,341,524.59|0.0006480|391,613.31|
|Other|10.15|5.7259|58.12|—|—|—|
|Othermonetaryfunds:|--|--|72,253,668.73|--|--|904,903,341.74|
|RMB|--|--|66,730,960.14|--|--|904,336,296.87|
|USD|905,822.40|6.0969|5,522,708.59|90,214.76|6.2855|567,044.87|
|Total|--|--|1,843,743,089.94|--|--|1,728,946,511.11|

 Iftherewasanyaccountlimitedbybeingmortgaged,pledgedorfrozen,depositedoverseasorwithpotentialcollectingrisksofthe Companyduringthereportingperiodshouldexplainindividually
The balanceof othermonetary fundsattheendof theperiodincludesmarginaldeposits thatcannotbewithdrawn freely, of which RMB 651,903.82 is used as fixed time deposit, RMB 48,724,103.45 is used as the bank acceptance deposit, RMB 3,753,514.04 is used as engineering margin, RMB 235,464.00 is used as the deposit pledged ofloan notes, RMB 5,562,708.59 is usedas the L/C deposit, RMB 4,800,000.00is used as the depositof the advance payment guarantee, RMB 1,600,000.00 is used as the deposit of the performance guarantee, RMB 5,565,000.00isusedaslitigationpreservationdepositandRMB1,360,974.83isusedasmortgagedeposit. 2.Tradingfinancialassets
(1)Tradingfinancialassets
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingfairvalue|Openingfairvalue|
|Tradingdebtsecurities|0.00|0.00|
|Tradingequityinvestments|0.00|0.00|
|DesignatedasatfairvaluethroughprofitorlossFinancialassets|0.00|0.00|
|Derivativefinancialassets|0.00|0.00|
|Hedginginstruments|0.00|0.00|
|Other|0.00|0.00|
|Total|0.00|0.00|

(2)Tradingfinancialassetswithrealizablelimit
Unit:RMBYuan
2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Item|Othersignificantrestrictionoftherestrictedconditionsortherealization|Closingamount|
|NAUGHT||0|

(3)Hedginginstrumentsandnotestorelevanthedgingtransaction
3.Notesreceivable
(1)Categoryofnotesreceivable
Unit:RMBYuan
||||
|-|-|-|
|Category|Closingamount|Openingamount|
|Banker'sacceptancebill|4,130,849,959.64|5,032,534,742.17|
|Commercialacceptancebill|19,929,414.68|521,262.80|
|Total|4,150,779,374.32|5,033,056,004.97|

 (2)Notesreceivablepledgedatperiod-end
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Issuingentity|Issuingdate|Maturitydate|Amount|Remark|
|BeijingJingdongCenturyInformationTechnologyCo.,Ltd.|16Oct.2013|16Jan.2014|12,577,143.43||
|ShanghaiYiXunElectronicCommerceDevelopmentCo.,Ltd.|18Oct.2013|18Jan.2014|12,303,878.65||
|BeijingJingdongCenturyInformationTechnologyCo.,Ltd.|28Oct.2013|24Jan.2014|12,245,927.94||
|BeijingJingdongCenturyInformationTechnologyCo.,Ltd.|12Dec.2013|12Mar.2014|11,043,409.00||
|BeijingJingdongCenturyInformationTechnologyCo.,Ltd.|16Oct.2013|16Jan.2014|10,200,000.00||
|Total|--|--|58,370,359.02|--|

(3)Notestransferredtoaccountsreceivablebecausedrawerofthenotesfailstoexecutethecontractor agreement,andunduenotesendorsedtootherpartiesattheendoftheperiod
Notestransferredtoaccountsreceivablebecausedrawerofthenotesfailstoexecutedthecontractoragreement
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Issuingentity|Issuingdate|Maturitydate|Amount|Remark|
|NAUGHT|||0.00||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|Total|--|--|0.00|--|

Notes:
Therewasnoparticularsoccurredastheissuingentityfailedtoaccomplishcommitmentsocovertsnotesreceivableintoaccounts receivable.
NotesthatareendorsedbutnotdueofCompany
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Issuingentity|Issuingdate|Maturitydate|Amount|Remark|
|SuningProcurementCentreofSuNingyunCommercialGroupCo.,Ltd.|16Aug.2013|16Feb.2014|9,180,269.11||
|SuNingyunCommercialTradingCo.,Ltd.|31Oct.2013|30Apr.2014|5,968,018.00||
|SuningProcurementCentreofSuNingyunCommercialGroupCo.,Ltd.|25Sep.2013|25Mar.2014|4,081,241.00||
|NanchangSipingTradingCo.,Ltd.|5Dec.2013|5Jun.2014|2,300,000.00||
|ChangdeChengnanLihongElectricalApplianceCo.,Ltd.|23Sep.2013|23Mar.2014|2,000,000.00||
|Total|--|--|23,529,528.11|--|

Notes:
Explanationofthediscountedorpledgedtradeacceptance
4.Dividendsreceivable
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Item|Openingamount|Increase|Decrease|Closingamount|Reasonofunreturned|Whethertherewasimpairmentoftherelevantaccounts|
|Dividendsreceivableagedwithinoneyear:|0|0|0|0|||
|Ofwhich|--|--|--|--|--|--|
|ividendsreceivableagedoveroneyear|0|0|0|0|--|--|
|Ofwhich:|--|--|--|--|--|--|
|Total|0|0|0|0|||

2013AnnualReportofKonkaGroupCo.,Ltd.
Notes
5.Interestreceivable
(1)Interestreceivable
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Openingamount|Increase|Decrease|Closingamount|
|Income of interest offixedtimedeposit|7,171,998.73|12,842,941.44|17,116,520.22|2,898,419.90|
|Total|7,171,998.73|12,842,941.44|17,116,520.22|2,898,419.90|

 (2)Overdueinterest
Unit：RMBYuan
||||
|-|-|-|
|Theloanequity|Overduetime(days)|Amountofoverdueinterest|
|NAUGHT||0|
|Total|--|0|

(3)Interestreceivable
6.Accountsreceivable
(1)Accounts receivablearelisted according to category
Unit：RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Category|Closingamount||||Openingamount||||
||Bookbalance||Baddebtprovision||Bookbalance||Baddebtprovision||
||Amount|Proportion(%)|Amount|Proportion(%)|Amount|Proportion(%)|Amount|Proportion(%)|
|Accounts receivablewithsignificantindividualamountandmakeindependentprovisionforbaddebt|103,357,300.00|3.76%|5,167,865.00|5%|103,357,300.00|4.61%|5,167,865.00|5%|
|Accounts receivablethatmakeindependentprovisionforbaddebtbyagecombination|||||||||
|Agegroup|2,616,862,124.57|95.25%|256,068,763.63|9.79%|2,118,724,691.83|94.53%|243,194,004.11|11.48%|
|Subtotalofcombination|2,616,862,124.57|95.25%|256,068,763.63|9.79%|2,118,724,691.83|94.53%|243,194,004.11|11.48%|
|Accounts receivablenotwithsignificant|27,085,525.42|0.99%|25,071,336.44|92.56%|19,269,259.0|0.86%|17,383,610.68|90.21%|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|individualamountbutmakeindependentprovisionforbaddebt|||||3||||
|Total|2,747,304,949.99|--|286,307,965.07|--|2,241,351,250.86|--|265,745,479.79|--|

Note:
Thereisnoparticularaboutclosingbalanceofaccountreceivableofshareholderentityofholdingover5%sharesoftheCompanyin thereportingperiod.
Accountsreceivablewithsignificantindividualamountandmakeindependentprovisionforbaddebtatclosingperiod
√Applicable□Inapplicable
Unit：RMB Yuan
||||||
|-|-|-|-|-|
|Content|Bookbalance|Baddebtprovision|Withdrawalratio(%)|Withdrawalreason|
|BeijingPangushiInvestmentCo.,Ltd.|103,357,300.00|5,167,865.00|5%|Involvedinlitigation,refertonoteIX,1|
|Total|103,357,300.00|5,167,865.00|--|--|

Accountsreceivablearelistedaccordingtoaccountage
√Applicable□Inapplicable
Unit：RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|Item|Closingamount|||Openingamount|||
||Bookbalance||Baddebtprovision|Bookbalance||Baddebtprovision|
||Amount|Proportion(%)||Amount|Proportion(%)||
|Withinoneyear|||||||
|Ofwhich：|--|--|--|--|--|--|
|Withinoneyear|2,273,369,466.84|86.87%|45,467,389.34|1,823,695,794.46|86.08%|36,476,541.94|
|SubtotalofWithinoneyear|2,273,369,466.84|86.87%|45,467,389.34|1,823,695,794.46|86.08%|36,476,541.94|
|Onetotwoyears|114,861,556.63|4.39%|5,743,077.83|69,265,131.92|3.27%|3,463,256.60|
|Twotothreeyears|19,911,559.50|0.76%|3,982,311.90|21,634,147.72|1.02%|4,326,829.54|
|Threetofouryears|6,653,659.08|0.25%|3,326,829.54|9,653,455.00|0.46%|4,826,727.50|
|Fourtofiveyears|9,033,455.00|0.35%|4,516,727.50|751,028.40|0.03%|375,514.20|
|Overfiveyears|193,032,427.52|7.38%|193,032,427.52|193,725,134.33|9.14%|193,725,134.33|
|Total|2,616,862,124.5|--|256,068,763.63|2,118,724,691|--|243,194,004.1|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|7|.83|1|

 Inthegroups,accountsreceivableadoptingbalancepercentagemethodtowithdrawbaddebtprovision:
□Applicable√Inapplicable
Inthegroups,accountsreceivableadoptingothermethodstowithdrawbaddebtprovision:
□Applicable√Inapplicable
Accountsreceivablenotwithsignificantindividualamountbutmakeindependentprovisionforbaddebt
√Applicable□Inapplicable
Unit：RMB Yuan
||||||
|-|-|-|-|-|
|Content|Bookbalance|Baddebtprovision|Withdrawalratio(%)|Reason|
|Client 1|6,708,399.69|4,695,879.78|70%|Litigation|
|Client 2|1,223,622.25|1,223,622.25|100%|Litigation|
|Client 3|1,469,500.12|1,469,500.12|100%|Enterpriseoperatingproblems,itmaybeunabletofulfilltherepaymentobligations|
|Client 4|16,767,326.99|16,767,326.99|100%|Enterpriseoperatingproblems,itmaybeunabletofulfilltherepaymentobligations|
|Client 5|916,676.37|915,007.30|99.82%|Enterpriseoperatingproblems,itmaybeunabletofulfilltherepaymentobligations|
|Total|27,085,525.42|25,071,336.44|--|--|

(2)Accountsreceivablereversedorrecoveredinthereportingperiod
Unit：RMB Yuan
||||||
|-|-|-|-|-|
|Contentofaccountsreceivable|Reversedorrecoveredreason|Recognitionbasisoforiginalbaddebtprovision|Reversedorrecoveredamountoftheaccruedbaddebtprovision|Reversedorrecoveredamount|

Thewithdrawalofbaddebtprovisionofaccountsreceivablewithsignificantsingleamountorinsignificantsingleamountbut individuallymadeimpairmenttestattheendofreportingperiod:
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Content|Bookbalance|Baddebtprovision|Withdrawalratio(%)|Reason|

 Notestoaccountsreceivablewithinsignificantsingleamountbutlargerisksofgroupsaftergroupingbycreditriskscharacteristics (3)Thewrite-offaccountsreceivable
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Nameofentity|Natureofaccountsreceivable|Write-offtime|Write-offamount|Write-offreason|Whetherarisingfromrelatedpartytransactionornot?|

Notestowriteoffofaccountsreceivable:
(4) Shareholders with more than5% (including5%) of the voting shares of the Company in accounts
2013AnnualReportofKonkaGroupCo.,Ltd.
receivableinreportingperiod
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Nameofentity|Closingamount||Openingamount||
||Bookbalance|Amountwithdrawingbed-debtprovision|Bookbalance|Amountwithdrawingbed-debtprovision|
|NAUGHT|0|0|0|0|
|Total|0|0|0|0|

(5)Informationoftopfiveaccountsreceivable:
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Nameofentity|TherelationshipwiththeCompany|Amount|Aging|Proportion|
|Client 1|Client|323,882,716.80|Withinoneyear|11.79%|
|Client 2|Client|308,905,615.31|Withinoneyear|11.25%|
|Client 3|Client|242,937,142.62|Withinoneyear|8.84%|
|Client 4|Client|103,357,300.00|Withinfiveyears|3.76%|
|Client 5|Client|63,410,166.79|Withinoneyear|2.31%|
|Total|--|1,042,492,941.52|--|37.95%|

 (6)Theamountsduefromrelatedparties
Unit:RMBYuan
|||||
|-|-|-|-|
|Nameofentity|TherelationshipwiththeCompany|Amount|Proportion|
|Shanghai Konka Green LightingTechnology Co., Ltd.|The Company's shares ofthe company|5,537,935.26|0.20%|
|Seaview O City Hotel Co.,|a subsidiary of theultimate controllingparty|2,000.00|0.00%|
|Yunnan OCT Industries Limited|a subsidiary of theultimate controllingparty|38,500.00|0.00%|
|Shanghai Tianxiang OCTInvestment Co.|a subsidiary of theultimate controllingparty|585,136.00|0.02%|
|Shanghai OCT Investment andDevelopment Co., Ltd.|a subsidiary of theultimate controllingparty|743,700.00|0.03%|
|Shenzhen Window of the World,Ltd.|a subsidiary of theultimate controllingparty|2,821,500.00|0.10%|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|Tianjin OCT Industries Limited|a subsidiary of theultimate controllingparty|3,024,000.00|0.11%||
|Chengdu Tianfu OCT IndustryDevelopment Co., Ltd.|a subsidiary of theultimate controllingparty|512.40|0.00%||
|OCT Hotel Shenzhen Co., Ltd.|a subsidiary of theultimate controllingparty|69,500.00|0.00%||
|Shenzhen Splendid ChinaDevelopment Co., Ltd.|a subsidiary of theultimate controllingparty|76,500.00|0.00%||
|Eastern Interlaken OCT HotelShenzhen|a subsidiary of theultimate controllingparty|83,000.00|0.00%||
|OCT East Shenzhen Co., Ltd.|a subsidiary of theultimate controllingparty|385,260.00|0.01%||
|Taizhou OCT Ltd.|a subsidiary of theultimate controllingparty||0.00%||
|Shenzhen OCT UrbanEntertainment InvestmentCompany|a subsidiary of theultimate controllingparty||0.00%||
|Wuhan OCT Industry DevelopmentCo., Ltd.|a subsidiary of theultimate controllingparty||0.00%||
|Total|--|13,367,543.66||0.47%|

 (7)Accountsreceivablederecognized
Unit:RMBYuan
||||
|-|-|-|
|Item|Amount|Profitorlossesrelatedtoderecognization|

 (8) Amount of assets and liabilities formed by using accounts receivable as a target for securitization, listedandcontinuousinvolvement
Unit:RMBYuan
|||
|-|-|
|Item|Closingbalance|
|Assets：||
|Liabilities：||

2013AnnualReportofKonkaGroupCo.,Ltd.
（9）Foreigncurrencyreceivablesandamountsinoriginalcurrencyexchangeratesarepresented
Unit:RMBYuan Item Closing Beginning
The amount of foreign Exchange The amount of Exchange
currency rate RMB foreign currency rate RMB USD 104,924,102.20 6.0969 639,711,758.70 58,119,818.37 6.2855 365,312,118.37 HK 2,170,681.57 0.7862 1,706,589.85 912,792.71 0.81085 740,137.97 EUR 391,085.69 8.4189 3,292,511.32 342,998.04 8.3176 2,852,920.50 VND 14,444,305,477.66 0.0004978 7,190,375.27 11,776,465,774.85 0.000648 7,631,149.82 AUD 49,764.00 5.4301 270,223.50 — — — 7.Otheraccountsreceivable
(1)OtheraccountsreceivabledisclosedbyCategory
Unit:RMBYuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Category|Closingbalance||||Openingbalance||||
||Bookbalance||Provisionforbaddebts||Bookbalance||Provisionforbaddebts||
||Amount|Proportion(%)|Amount|Proportion(%)|Amount|Proportion(%)|Amount|Proportion(%)|
|Otheraccountsreceivablethatisindividuallysignificantandprovisionsforbaddebtsindividually|0.00|0%|0.00|0%|||||
|Otheraccountsreceivablethatprovisionsforbaddebtsbygroup|||||||||
|Aginggroup|321,659,003.24|100%|22,909,588.29|7.12%|342,551,165.93|100%|25,960,449.97|7.58%|
|Subtotalofgroup|321,659,003.24|100%|22,909,588.29|7.12%|342,551,165.93|100%|25,960,449.97|7.58%|
|Total|321,659,003.24|--|22,909,588.29|--|342,551,165.93|--|25,960,449.97|--|

Notestocategoryofotheraccountsreceivable:
Otheraccountsreceivablewithsignificantsingleamountandindividuallywithdrawnbaddebtprovision
√Applicable□Inapplicable
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Contentofotheraccountreceivable|Bookbalance|Baddebtprovision|Withdrawalratio(%)|Reason|
|Total|0|0|--|--|

Inthegroups,otheraccountsreceivableadoptingaginganalysismethodtowithdrawbaddebtprovision:
√Applicable□Inapplicable
Unit:RMBYuan
2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||
|-|-|-|-|-|-|-|
|Item|Closingamount|||Openingamount|||
||Bookbalance||Baddebtprovision|Bookbalance||Baddebtprovision|
||Amount|Proportion(%)||Amount|Proportion(%)||
|Withinoneyear|||||||
|Ofwhich：|||||||
|Withinoneyear|257,598,340.37|80.08%|5,151,966.80|295,547,016.92|86.28%|6,959,834.96|
|SubtotalofWithinoneyear|257,598,340.37|80.08%|5,151,966.80|295,547,016.92|86.28%|6,959,834.96|
|Onetotwoyears|37,263,771.00|11.59%|1,863,188.55|16,893,232.69|4.93%|844,661.63|
|Twotothreeyears|11,910,476.35|3.7%|2,382,095.27|12,488,300.00|3.64%|2,497,660.00|
|Threetofouryears|1,711,938.72|0.53%|855,969.36|1,084,020.35|0.32%|542,010.18|
|Fourtofiveyears|1,036,216.98|0.32%|518,108.49|2,844,625.54|0.83%|1,422,312.77|
|Overfiveyears|12,138,259.82|3.78%|12,138,259.82|13,693,970.43|4%|13,693,970.43|
|Total|321,659,003.24|--|22,909,588.29|342,551,165.93|--|25,960,449.97|

Inthegroups,otheraccountsreceivableadoptingbalancepercentagemethodtowithdrawbaddebtprovision
□Applicable√Inapplicable
Inthegroups,otheraccountsreceivableadoptingothermethodstowithdrawbaddebtprovision
□Applicable√Inapplicable
Otheraccountsreceivablenotwithsignificantindividualamountbutmakeindependentprovisionforbaddebt
□Applicable√Inapplicable
(2)Informationofotheraccountsreceivablereversedorrecoveredinthereportingperiod
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Contentofotheraccountsreceivable|Reasonforreversedorrecovered|Basisfordeterminationofbaddebtsprovision|Accruedamountbeforereversalorrecovery|Amountofreversedorrecovered|
|Total|--|--|0|--|

Withdrawalofclosingindividuallysignificantorinsignificantbutprovisionsforbaddebtsindividuallyaccounts receivable:
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Content|Bookbalance|Amountofbaddebts|Withdrawalpercentage|Reason|
|NAUGHT|0|0|0%||
|Total|0|0|--|--|

2013AnnualReportofKonkaGroupCo.,Ltd.
Notesofindividuallyinsignificantbutwasofbigriskaftergroupedbycreditriskotheraccountsreceivable:
(3)Thewrite-offotheraccountsreceivable
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Nameofentity|Natureofotheraccountsreceivable|Write-offtime|Write-offamount|Write-offreason|Whetherarisingfromrelatedpartytransactionornot?|

 Notestowriteoffofaccountsreceivable:
(4) Shareholders with more than5% (including5%) of the voting shares of the Company in other accountsreceivableinreportingperiod
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Nameofentity|Closingamount||Openingamount||
||Bookbalance|Amountwithdrawingbed-debtprovision|Bookbalance|Amountwithdrawingbed-debtprovision|
|NAUGHT|0|0|0|0|
|Total|0|0|0|0|

(5)Natureordetailsofothersignificantaccountsreceivable
Unit:RMBYuan
|||||
|-|-|-|-|
|Nameofentity|Amount|Natureordetailsoftheamount|Proportionofthetotal(%)|

Note
(6)Informationoftopfiveotheraccountsreceivable
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Nameofentity|RelationshipwiththeCompany|Amount|Aging|Proportionofthetotal(%)|
|Client 1|Non-relatedparties|151,532,390.00|Withinoneyear|47.1%|
|Client 2|SubsidiaryoftheCompany'sshareholders|59,494,031.83|Withinoneyear|18.5%|
|Client 3|Non-relatedparties|5,460,390.00|Withinoneyear|1.7%|
|Client 4|Non-relatedparties|2,480,401.90|Withinfiveyears|0.77%|
|Client 5|Non-relatedparties|2,429,934.00|2-3years|0.76%|
|Total|--|221,397,147.73|--|68.83%|

 (7)Informationoftheamountsduefromrelatedparties
Unit:RMBYuan
|||||
|-|-|-|-|
|Nameofentity|RelationshipwiththeCompany|Amount|Proportionofthetotal(%)|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||
|-|-|-|-|
|ShenzhenOCTstationsLtd.|Subsidiaryofultimatecontrollingparty|80,000.00|0.02%|
|ShenzhenOverseasChineseTownRealEstateCo.,Ltd.|Subsidiaryofultimatecontrollingparty|1,209,064.86|0.38%|
|ShenzhenOCTPropertyManagementLtd.|Subsidiaryofultimatecontrollingparty|77,402.65|0.02%|
|HydropowerCo.,Ltd.ofShenzhenOverseasChineseTown|Subsidiaryofultimatecontrollingparty|1,069,029.14|0.33%|
|Total|Subsidiaryofultimatecontrollingparty|2,435,496.65|0.75%|

(8)Otheraccountsreceivablederecognized
Unit:RMBYuan
||||
|-|-|-|
|Item|Amount|Profitorlossesrelatedtoderecognization|

 (9)Amountofassetsandliabilitiesformedbyusingotheraccountsreceivableasatargetforsecuritization, listedandcontinuousinvolvement
Unit:RMBYuan
|||
|-|-|
|Item|Closingbalance|
|Assets：||
|Liabilities：||

(10)Governmentalsubsidyderecognizedbyaccountreceivableintheendofreportingperiod
Unit:RMBYuan
|||||||||
|-|-|-|-|-|-|-|-|
|Nameofentity|Nameoftheproject|Closingbalance|Closingaging|Estimatedreceivingtime|Estimatedreceivingamount|Judgment|Reasonoffailingtoreceivetheestimatedamountatestimatedtime(ifany)|

（11）ForeignCurrencyamountsofotherreceivablesandoriginalcurrencyexchangeratesarepresented Unit:RMBYuan Item Closing Beginning
The amount of foreign Exchange The amount of Exchange
currency rate RMB foreign currency rate RMB USD 258,590.65 6.0969 1,576,601.33 451,223.81 6.2855 2,836,167.26
HK 75,680.14 0.7862 59,499.73 69,341.10 0.8108 56,225.23
EUR 3,749.97 8.4189 31,570.62 583.42 8.3176 4,852.65
2013AnnualReportofKonkaGroupCo.,Ltd.
Item Closing Beginning
The amount of foreign Exchange The amount of Exchange
currency rate RMB foreign currency rate RMB VND 423,230,364.50 0.0004978 210,684.08 — — — 8.Prepayment
(1)Listbyaginganalysis
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Aging|Closingbalance||Openingbalance||
||Amount|Proportion(%)|Amount|Proportion(%)|
|Within1year|162,235,497.39|98.76%|177,723,515.26|97.11%|
|1yearto2years|1,559,201.36|0.95%|4,266,804.57|2.33%|
|2yearsto3years|478,230.84|0.29%|1,017,702.44|0.56%|
|Over3years|0.00|0%|0.00|0%|
|Total|164,272,929.59|--|183,008,022.27|--|

 Notesofagingofprepayment
(2)Informationofthetopfiveprepaymentequities
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Nameofentity|RelationshipwiththeCompany|Amount|Aging|Reasonforunsettled|
|Supplier1|Non-relatedparties|4,108,257.19|2010|Earlymaterialshallnotcontinuetocooperate|
|Supplier2|Non-relatedparties|1,943,229.80|Dec.2013|Advancestosuppliers|
|Supplier3|Non-relatedparties|2,499,999.75|Dec.2013|Advancestosuppliers|
|Supplier4|Non-relatedparties|2,284,381.19|Dec.2013|Advancestosuppliers|
|Supplier5|Non-relatedparties|9,793,265.00|Dec.2013|Prepaidpayingbacktheprincipal,notsubmitted|
|Total|--|20,629,132.93|--|--|

Notesofimportantcompaniesofprepayment:
(3) Shareholders with more than5% (including5%) of the voting shares of the Company in prepaymentinreportingperiod
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Nameofentity|Closingamount||Openingamount||
||Bookbalance|Amountwithdrawing|Bookbalance|Amountwithdrawing|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|||bed-debtprovision||bed-debtprovision|
|Naught|0.00|0.00|0.00|0.00|
|Total|0.00|0.00|0.00|0.00|

 (4)Notetoprepayment
(1)ThetotalamountofthetopfiveprepaymentequitieswasRMB26,752,988.30,15.59%ofprepayment. (2) There is no Shareholder with more than5% (including5%) of the voting shares of the Company in prepaymentinreportingperiod.
9.Inventory
(1)Category
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Item|Closingbalance|||Openingbalance|||
||Bookbalance|Impairmentofinventories|Bookvalue|Bookbalance|Impairmentofinventories|Bookvalue|
|Rawmaterials|1,122,928,416.97|337,943,507.99|784,984,908.98|1,511,033,412.83|354,267,390.10|1,156,766,022.73|
|Constructioncontractassets|346,780,797.38|180,414,495.68|166,366,301.70|396,059,068.96|144,510,959.16|251,548,109.80|
|Inventorygoods|2,327,973,299.87|258,385,468.08|2,069,587,831.79|2,499,040,813.22|262,423,287.29|2,236,617,525.93|
|Turnovermaterial|5,144,913.85|1,041,221.03|4,103,692.82|11,195,627.07|1,136,395.24|10,059,231.83|
|Goodsintransit||||448,318.12||448,318.12|
|Developmentcost|557,626,288.97||557,626,288.97|403,899,840.84||403,899,840.84|
|Total|4,360,453,717.04|777,784,692.78|3,582,669,024.26|4,821,677,081.04|762,338,031.79|4,059,339,049.25|

 (2)Impairmentofinventories
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Category|Openingbookbalance|Increase|Decrease||Closingbookbalance|
||||Reversal|Writtenoff||
|Rawmaterials|354,267,390.10|87,519,737.74||103,843,619.85|337,943,507.99|
|Constructioncontractassets|144,510,959.16|35,903,536.52|||180,414,495.68|
|Inventorygoods|262,423,287.29|95,147,763.38||99,185,582.59|258,385,468.08|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|Turnovermaterial|1,136,395.24||95,174.21|1,041,221.03|
|Total|762,338,031.79|218,571,037.64|203,124,376.65|777,784,692.78|

(3)Detailsofprovisionforfallingpriceofinventories
|||||
|-|-|-|-|
|Item|Basisonprovisionforfallingpriceofinventories|Reasonsforreversal|Proportionofreversalofprovisionforimpairmentofinventoriestoclosingbalance|
|Rawmaterials|Realizablenetvaluefortheproductsislowerthanthecost|||
|Inventorygoods|Realizablenetvaluefortheproductsislowerthanthecost|||
|Constructioncontractassets|Realizablenetvaluefortheproductsislowerthanthecost|||
|Turnovermaterial|Realizablenetvaluefortheproductsislowerthanthecost|||

Note
10.Othercurrentassets
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Naught|0.00|0.00|
|Total|0.00|0.00|

 Notesofothercurrentassets:
11.Available-for-salefinancialassets
(1)Informationofavailable-for-salefinancialassets
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingfairvalue|Openingfairvalue|
|Available-for-saleequityinstruments|941,999.30|1,187,177.20|
|Total|941,999.30|1,187,177.20|

 Inthereportingperiod,theCompanyreclassifiedtheheld-to-maturityinvestmentintoavailable-for-salefinancialassets,atotalofRMB0.00wasreclassified,whichtakes0%oftotalmaturedinvestmentbeforereclassification.
Notesofavailable-for-salefinancialassets:
Available-for-salefinancialassetsweretheordinarysharesofChinaVankeCo.,Ltd.heldbytheCompany.
2013AnnualReportofKonkaGroupCo.,Ltd.
(2)Long-termdebtinvestmentinavailable-for-salefinancialassets
Unit:RMBYuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Item|Type|Facevalue|Initialinvestmentcost|Maturitydate|Openingbalance|Currentinterest|Accumulativeinterestreceivableorinterestreceived|Closingbalance|

Notetolong-termdebtinvestmentinavailable-for-salefinancialassets
(3)Impairmentavailable-for-salefinancialassets
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Classification|Available-for-saleequityinstruments|Available-for-saleliabilityinstruments|Other|Total|
|Costofequityinstrument/amortizedcostofliabilityinstrument|2,311,748.07|||2,311,748.07|
|Closingfairvalue|941,999.30|||941,999.30|
|Amountofimpairmentprovision|1,369,748.77|||1,369,748.77|

 (4)Particularsaboutchangeinimpairmentavailable-for-salefinancialassets
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Classification|Available-for-saleequityinstruments|Available-for-saleliabilityinstruments|Other|Total|
|Provisioninthisyear|1,369,748.77|||1,369,748.77|
|Ofwhich：transferredfromtheothercomprehensiveincome|1,369,748.77|||1,369,748.77|
|Closingamountofimpairmentprovision|1,369,748.77|||1,369,748.77|

(5) Particulars about the closing fair value of available-for-sale equity instruments falling sharply or continuously
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Available-for-saleequityinstruments(subentry)|Cost|fairvalue|Thefallingofcostrelativetofairvalue(%)|continuouslyfallingtime|amountofimpairmentprovision|Reasonofimpairmentprovisionnotaccordingtothedifferencebetweenthecostandclosingfairvalue|

2013AnnualReportofKonkaGroupCo.,Ltd.
12.Held-to-maturityinvestment
(1)Information
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbookbalance|Openingbookbalance|
|Naught|0.00|0.00|
|Total|0.00|0.00|

 Note:
(2)Particularaboutsaleinthereportingperiodbutnotheld-to-maturityinvestment
Unit:RMBYuan
||||
|-|-|-|
|Item|Amount|Theproportionoftheinvestmentbeforesale(%)|
|Naught|0.00|0%|
|Total|0.00|--|

Note:
13.Long-termaccountsreceivable
Unit:RMBYuan
||||
|-|-|-|
|Category|Closingbalance|Openingbalance|
|Financelease|0.00|0.00|
|Installmentsalesofgoods|0.00|0.00|
|Installmentprovidingservices|0.00|0.00|
|Other|0.00|0.00|
|Total|0.00|0.00|

 14.Investmenttojointventuresandassociatedenterprises
Unit:RMBYuan
|||||||||
|-|-|-|-|-|-|-|-|
|Nameofinvestee|PercentageofholdingsharesoftheCompany|VotingpercentageoftheCompanyininvestee|Totalclosingassets|Totalclosingliabilities|Netclosingassets|Totaloperationrevenueofthereportingperiod|Netprofitofthereportingperiod|
|I.Jointventures||||||||
|II.Associatedenterprises||||||||
|ShenzhenRefondOptoelectronicsCo.,Ltd|18.9%|18.9%|912,772,444.23|308,102,947.01|604,669,497.22|681,984,216.24|56,603,840.62|
|EnrayTek|36%|36%|495,473,60|247,136,64|248,336,96|90,297,290|-56,691,49|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|OptoelectronicCo.,Ltd|||8.84|6.03|2.81|.72|7.61|
|ShenzhenKonkaEnergyTechnologyCo.,Ltd|30%|30%|13,767,056.15|1,643,585.59|12,123,470.56||-4,138.78|
|ShenzhenKangElectronicsCo.,Ltd.||||||||
|ShanghaiKonkaGreenScienceandTechnologyCo.,Ltd.|39%|39%|649,882,970.34|114,592,059.87|535,290,910.47|36,214,426.74|-3,378,571.93|

Notesifsignificantdifferencesexistbetweentheimportantaccountingpoliciesandaccountingestimationsofjointventures, associatedenterprisesandtheCompany:
15.Long-termequityinvestment
(1)Classificationoflong-termequityinvestment
Unit:RMBYuan Item Opening balance Increase Decrease Closing balance Investment in joint ventures
— — — — Investment in associates
454,333,108.36 11,620,506.37 37,888,540.14 428,065,074.59 Other equity investments
19,975,424.83 — — 19,975,424.83 Less: Provision for
impairment of long-term
1,885,000.00 — — 1,885,000.00 equity investments
Total
472,423,533.19 11,620,506.37 37,888,540.14 446,155,499.42 (2)Listoflong-termequityinvestment
Unit:RMBYuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Investee|Accountingmethod|Initialinvestmentcost|Openingbalance|Increase/decrease|Closingbalance|Shareholdingpercentagein|Votingpercentageininveste|Explanationforindiffer|Impairmentprovision|Withdrawnimpairment|Cashbonusinthereportin|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||investee|e|encesbetweentheshareholdingpercentageandvotingpercentageininvestee|provisioninthereportingperiod|gperiod|
|ChongqingJingkangPlasticProductsCo.,Ltd|Equitymethod|3,750,000.00|688,167.99|-688,167.99||31.25%|31.25%|—|||
|ShenzhenRefondOptoelectronicsCo.,Ltd|Equitymethod|26,983,691.79|102,678,758.93|11,620,506.41|114,299,265.34|18.9%|18.9%|—||2,027,105.30|
|EnrayTekOptoelectronicCo.,Ltd|Equitymethod|148,036,152.86|129,042,663.36|-20,408,939.14|108,633,724.22|36%|36%|—|||
|ShenzhenKonkaEnergyTechnologyCo.,Ltd|Costmethod|5,983,965.19|3,649,728.08||3,649,728.08|30%|30%|—|||
|Shenzhen|Costmethod|3,000,000.00|7,137,424.83||7,137,424.83|30%|30%|—|||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|KangElectronicsCo.,Ltd.|||||||||
|FehongElectronicsCo.,Ltd.|Costmethod|1,300,000.00|1,300,000.00|1,300,000.00|8.33%|8.33%|—|1,300,000.00|
|ShenzhenAssociation ofEnterpriseswithForeignInvestment|Costmethod|100,000.00|100,000.00|100,000.00|||—|100,000.00|
|ShenzhenMake-planInvestmentDevelopmentCo.,Ltd.|Costmethod|485,000.00|485,000.00|485,000.00|1%|1%|—|485,000.00|
|IGRSInformationTechnologyEngineeringCenterCo.,Ltd.|Costmethod|5,000,000.00|5,000,000.00|5,000,000.00|9.62%|9.62%|—||
|ShenzhenLottery|Costmethod|1,153,000.00|1,153,000.00|1,153,000.00|11.5%|11.5%|—||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|AllianceTechnologiesCo.,Ltd.|||||||||
|ShenzhenDigitalTVNationalEngineeringLabCo.,Ltd.|Costmethod|2,400,000.00|2,400,000.00||2,400,000.00|6%|6%|—|
|ShanghaiDigitalTVNationalEngineeringR&DCenterCo.,Ltd.|Costmethod|2,400,000.00|2,400,000.00||2,400,000.00|4.26%|4.26%|—|
|KONRAYINTERNATIONALDEVELOPMENTLIMITID|Costmethod|15,473,790.00|15,473,790.00|-15,473,790.00||38%|38%|—|
|ShanghaiKonkaGreenScienceand|Equitymethod|202,800,000.00|202,800,000.00|-1,317,643.05|201,482,356.95|39%|39%|—|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|TechnologyCo.,Ltd.|||||||||||
|Total|--|418,865,599.84|474,308,533.19|-26,268,033.77|448,040,499.42|--|--|--|1,885,000.00|2,027,105.30|

(2)Limitationoftheabilitytotransferfundstoinvestmententerprises
Unit:RMBYuan
||||
|-|-|-|
|Item|Reason|Thecumulativeinvestmentlossesamountunrecognizedincurrentperiod|

 Descriptionof long-term equityinvestments:
Note:①Thetransferofthecompany'scurrent60%stakeheldbyasubsidiaryofChongqingKonka,KonkamakesomeheldinChongqing,ChongqingJingKangPlasticProductsCo.,Ltd.31.25%stakeinconjunctionwith thetransfer..
② DueShenzhenRefond ElectronicsInc.SharesoftheCompany'ssubsidiaryinvestmentsperformedtwice equityincentiveperiod,leadingsubsidiaryof theCompanyheldbythebeginningoftheequitydeclinedfrom19.34%to18.90%.
③ 5Apr.2013,forty-seventhmeetingoftheBoardofDirectorsdecidedto38%of theequityKONRAY INTERNATIONALDEVELOPMENTLIMITIDKonkaGroup,awhollyownedsubsidiaryofHongKongKonka KonkaholdingstransferredtoShanghaiGreenTechCo.,Ltd.inHongKongawhollyownedsubsidiary,the transferpriceestablishedinHongShuiInternationalDevelopmentLimitednetassetsafterassessmentbasis.Asof theendoftheperiod,equitytransferprocedureshavebeencompleted.
（3）Long-termequityinvestmentimpairmentBreakdown
Unit: RMB Yuan Item Opening balance Increase Decrease Closing balance ShenzhenMake-planInvestment
-- --
DevelopmentCo.,Ltd. 485,000.00 485,000.00 FehongElectronicsCo.,Ltd. 1,300,000.00 -- -- 1,300,000.00 ShenzhenAssociationofEnterprises
-- --
withForeignInvestment 100,000.00 100,000.00 Toal 1,885,000.00 -- -- 1,885,000.00
2013AnnualReportofKonkaGroupCo.,Ltd.
16.Investmentproperty
(1)Detailsoftheinvestmentproperty
Unit:RMBYuan Item Opening balance Increase Decrease Closing balance Using the cost model for
subsequent measurement of
235,680,171.89 2,306,352.23 — 237,986,524.12 investment property
Less: Provision for impairment
— — — — of investment property
Toal 235,680,171.89 2,306,352.23 — 237,986,524.12 (2)Investmentpropertycalculatedbycost
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Openingbookbalance|Increase|Decrease|Closingbookbalance|
|I.Totalcost|241,105,035.18|7,776,962.36||248,881,997.54|
|1.Propertyandbuildings|241,105,035.18|7,776,962.36||248,881,997.54|
|IIAccumulateddepreciationandamortization|5,424,863.29|5,470,610.13||10,895,473.42|
|1.Propertyandbuildings|5,424,863.29|5,470,610.13||10,895,473.42|
|V.Totalbookvalueofinvestmentrealestate|235,680,171.89|2,306,352.23|0.00|237,986,524.12|
|1.Propertyandbuildings|235,680,171.89|2,306,352.23|0.00|237,986,524.12|

Unit:RMBYuan
|||
|-|-|
||Thereportingperiod|
|Amountofamortizationanddepreciationinthereportingperiod|5,470,610.13|
|Current real estate investment impairment provision amount|0.00|

 (3)Investmentpropertycalculatedbyfairvalue
Unit:RMBYuan
|||||||||
|-|-|-|-|-|-|-|-|
|Item|Openingfairvalue|Increase|||Decrease||Closingfairvalue|
|||Purchase|Self-usepropertyor|Changesinfairvalue|Disposal|Transferintoself-use||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||||transferredbyinventory|recognizedinprofitsorloss||property||
|1．Totalcost|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|(1)Propertyandbuildings|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|(2)Landuseright|0.00|||||||
|2．Totalchangeoffairvalue|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|3．Totalbookvalueofinvestingproperty|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|(3)others|0.00|0.00|0.00|0.00|0.00|0.00|0.00|

 Noteofchangemeasurementmodeloftheinvestmentrealestateandtheinvestmentrealestatehadnotcompletedthepropertyright certificate,explainthereasonandtheestimatedcompletingtime.
①This year depreciation and amortization is RMB 5,470,610.13.
② The year ended December 31, 2013, above investmentrealestatewere not completed property warrants.
17.Fixedassets
(1)Fixedassetsdetails
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Item|Openingbookbalance|Increaseinthereportingperiod||Decreaseinthereportingperiod|Closingbookbalance|
|I.Totaloriginalbookvalue|3,303,329,675.74|223,441,346.42||230,674,257.02|3,296,096,765.14|
|Including: Property andbuilding|1,650,180,180.52|102,533,835.92||55,349,143.66|1,697,364,872.78|
|Machineries|1,092,685,079.51|83,999,115.32||99,588,360.08|1,077,095,834.75|
|Vehicles|80,292,410.89|6,477,495.84||12,729,725.79|74,040,180.94|
|Electronicequipment|278,352,008.65|11,187,102.53||37,456,621.81|252,082,489.37|
|Otherequipment|201,819,996.17|19,243,796.81||25,550,405.68|195,513,387.30|
|--|Openingbookbalance|Increaseinthereportingperiod|Withdrawing inthereportingperiod|Decreaseinthereportingperiod|Closingbookbalance|
|II.Totalaccumulateddepreciation：|1,391,644,362.10|134,839,879.72||152,601,244.06|1,373,882,997.76|
|Including: Property andbuilding|349,507,955.55|40,221,893.83||10,896,486.62|378,833,362.76|
|Machineries|632,748,212.94|60,570,934.59||87,016,824.80|606,302,322.73|
|Vehicles|53,097,988.44|7,195,759.88||6,447,444.34|53,846,303.98|
|Electronicequipment|222,809,444.9|9,300,366.99||25,262,399.55|206,847,412.3|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
||4|||8|
|Otherequipment|133,480,760.23|17,550,924.43|22,978,088.75|128,053,595.91|
|--|Openingbookbalance|--||Closingbookbalance|
|III.Totalnetbookvalue|1,911,685,313.64|--||1,922,213,767.38|
|Including: Property andbuilding|1,300,672,224.97|--||1,318,531,510.00|
|Machineries|459,936,866.57|--||470,793,512.02|
|Vehicles|27,194,422.45|--||20,193,876.96|
|Electronicequipment|55,542,563.71|--||45,235,076.99|
|Otherequipment|68,339,235.94|--||67,459,791.39|
|IV.Totalprovisionsfordepreciation|23,849,042.62|--||13,709,787.58|
|Including: Property andbuilding|1,412,531.97|--||2,451,004.74|
|Machineries|17,367,644.79|--||6,876,144.66|
|Vehicles|988,860.93|--||847,673.85|
|Electronicequipment|2,380,461.92|--||1,945,464.65|
|Otherequipment|1,699,543.01|--||1,589,499.68|
|V.Totalbookvalue|1,887,836,271.02|--||1,908,503,979.80|
|Including: Property andbuilding|1,299,259,693.00|--||1,316,080,505.28|
|Machineries|442,569,221.78|--||463,917,367.36|
|Vehicles|26,205,561.52|--||19,346,203.11|
|Electronicequipment|53,162,101.79|--||43,289,612.34|
|Otherequipment|66,639,692.93|--||65,870,291.71|

 Note: Depreciationamount in2013wasRMB 134,839,879.70.Original valueof fixedassets transferred from project inprocess in 2013wasRMB49,434,319.83.
(2)Temporaryidlefixedassets
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Item|Bookoriginalvalue|Accumulateddepreciation|Provisionforimpairment|Bookvalue|Remark|
|House andbuildings|4,284,173.90|2,458,069.58|0.00|1,826,104.32||
|Mechanicalequipments|21,727,081.05|17,812,836.52|2,347,498.32|1,566,746.21||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|Vehicles|21,503,310.41|19,421,930.90|1,506,258.96|575,120.55|
|Electronicalequipments|3,308,878.80|2,953,133.22|35,702.87|320,042.71|
|Otherequipments|6,123,181.92|5,322,082.84|249,331.80|551,767.28|

(3)Fixedassetsleasedinfromfinancinglease
Unit:RMBYuan
|||||
|-|-|-|-|
|Item|Bookvalue|Accumulateddepreciation|Netbookvalue|
|Machinery and equipment|5,321,552.85|215,863.53|5,105,689.32|

 (4)Fixedassetsrentoutbyoperationallease
Unit:RMBYuan
|||
|-|-|
|Categoryofassetsrentoutbyoperationallease|Closingbookvalue|
|Housingandbuildings|76,236,181.64|

 (5)Particularsaboutavailableforsalefixedassetsatclosingperiod
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Bookvalue|Fairvalue|Estimateddisposalexpense|Estimateddisposaltime|

(6)Particularsaboutfixedassetswhosecertificatesoftitlearenotprepared
||||
|-|-|-|
|Item|Reason|Estimatedcompletingtime|
|YikangbuildingofGroupheadquarter|Hasnotobtainedthestate-ownedlandusescard,cannottodealwithhousepropertycard|Cannotpredictestimate|
|R&Dmansion|Underprocessing|Yearof2014|
|Jingyuanofficebuilding|Legaldisputes,haswonthecase,certificateisunderprocessing|Yearof2014|
|ConghuaSpringvilla|OthermanufacturerspropertymortgagedtotheKonkaGroup|Cannotpredictestimate|
|TongchuangBaidianIndustrialPark|Underprocessing|Yearof2014|
|WorkshopsanddormitorybuildingofKunshanKonka|Underprocessing|Yearof2014|
|OfficebuildingofChangshuKonkaColorTVetc.|Hasnotobtainedthestate-ownedlandusescard,cannottodealwithhousepropertycard|Cannotpredictestimate|
|Mudangjiangelectricappliancesetc.|Hasnotobtainedthestate-ownedlandusescard,cannottodealwithhousepropertycard|Cannotpredictestimate|

Description of fixed assets
Restricted ownership of fixed assets
Houses and buildings pledged as of December 31, 2013, the carrying value of the Company of RMB 44,697,492.06
(the original value of RMB 51,696,497.26) made​​short-term loans of RMB 55 million (see Note VII, 27), the
2013AnnualReportofKonkaGroupCo.,Ltd.
carrying value of RMB 37,918,858.57 (secured loans cost 60,463,724.16 yuan) of houses and buildings made​​have been returned, but not yet released collateral.
18Constructioninprogress
(1)Informationaboutconstructioninprogress
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Item|Closingamount|||Openingamount|||
||Bookbalance|Impairmentprovision|Bookvalue|Bookbalance|Impairmentprovision|Bookvalue|
|Officebuildingproject||||16,813,365.00||16,813,365.00|
|Hotelproject|18,495,377.38||18,495,377.38|7,745,435.95||7,745,435.95|
|Galleryproject|1,643,881.07||1,643,881.07|1,643,881.07||1,643,881.07|
|Projecttobeinstalled|1,001,759.03||1,001,759.03|7,052,589.78||7,052,589.78|
|Othersmallprojects|28,783,010.49||28,783,010.49|17,427,622.05||17,427,622.05|
|Total|49,924,027.97|0.00|49,924,027.97|50,682,893.85|0.00|50,682,893.85|

 (2)Significantchangesinconstructioninprogress
Unit:RMBYuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Nameofproject|Budget|Openingbalance|Increase|Transferredtofixedassets|Otherdecrease|Projectinputpercentageofbudget|Projectprocess|Capitalizationofinterest|Including:capitalizationofinterestthisperiod|Capitalizationofinterestrate(%)|Sourceoffunding|Closingbalance|
|Officebuildingproject|24,780,000.00|16,813,365.00|2,568,146.00|19,381,511.00|||||||||
|Hotelproject|441,600,000.00|7,745,435.95|11,222,373.30|||||||||18,495,377.38|
|Galleryproject|26,320,000.00|1,643,881.07||||||||||1,643,881.07|
|Project|7,500|7,052|126,4|6,177||||||||1,001|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|tobeinstalled|,000.00|,589.78|17.14|,247.89|||||,759.03|
|Othersmallprojects||17,427,622.05|34,492,314.60|24,114,484.60|||||27,805,452.05|
|Total|500,200,000.00|50,682,893.85|48,409,251.04|49,673,243.49|--|--|--|--|48,946,469.53|

 Note:
(3)Impairmentprovisionofconstructioninprogress
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Item|Openingamount|Increaseinthereportingperiod|Decreaseinthereportingperiod|Closingbalance|Reasonforwithdrawal|
|Total|0.00|||0.00|--|

(4)Particularsabouttheprogressofsignificantconstructioninprocess
||||
|-|-|-|
|Item|Progress|Remark|
|Officebuildingproject|100.00%||
|Hotelproject|4.00%||
|Galleryproject|6.00%||
|Projecttobeinstalled|52.00%||
|Othersmallprojects|||

(5)Noteofconstruction inprocess
19.Projectmaterial
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Openingamount|Increaseinthereportingperiod|Decreaseinthereportingperiod|Closingbalance|
|Naught|0.00|0.00|0.00|0.00|
|Total|0.00|0.00|0.00|0.00|

Note:
20.Disposaloffixedassets
Unit:RMBYuan
|||||
|-|-|-|-|
|Item|Openingbookvalue|Closingbookvalue|Reasontransferintodisposal|
|Naught|0.00|0.00|0.00|
|Total|0.00|0.00|--|

Noteoftheprogressoffixassetstransferintodisposaloveroneyear
2013AnnualReportofKonkaGroupCo.,Ltd.
21.Productivebiologicalasset
(1)Calculatedbycost
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Item||Openingbookbalance|Increaseinthereportingperiod|Decreaseinthereportingperiod|Closingbookbalance|
|I.Plantingindustry||||||
|II.Livestock||||||
|II.Forestry||||||
|IV.Fishingindustry||||||
|Total 0.00 0.00 0.00 0.00|Total|0.00|0.00|0.00|0.00|

 (2)Calculatedbyfairvalue
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Item||Openingbookbalance||Increaseinthereportingperiod|Decreaseinthereportingperiod|Closingbookbalance|
|I.Plantingindustry|||||||
|II.Livestock|||||||
|II.Forestry|||||||
|IV.Fishingindustry|||||||
|Total 0.00 0.00 0.00 0.00|Total||0.00|0.00|0.00|0.00|

Note：
22．Oilandgasassets
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Openingbookbalance|Increaseinthereportingperiod|Decreaseinthereportingperiod|Closingbookbalance|
|Total original bookvalue|0.00|0.00|0.00|0.00|
|the cumulative totaldepletion|0.00|0.00|0.00|0.00|
|the impairment ofassets accumulatedtotal amount of oiland gas|0.00|0.00|0.00|0.00|
|the aggregate bookvalue of oil and gasassets|0.00|0.00|0.00|0.00|

Note:
2013AnnualReportofKonkaGroupCo.,Ltd.
23.Intangibleassets
(1)Information
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Openingbookbalance|Increaseinthereportingperiod|Decreaseinthereportingperiod|Closingbookbalance|
|I.Totaloriginalbookvalue|368,444,870.84|89,939,626.47|15,944,990.06|442,439,507.25|
|Landuseright|303,488,845.78|80,288,605.47|9,105,890.06|374,671,561.19|
|Trademark registrationcostsinforeigncountries|3,007,341.61|511,818.00||3,519,159.61|
|Patents and proprietarytechnologies|42,075,173.87|3,432,682.64|6,839,100.00|38,668,756.51|
|Others|19,873,509.58|5,706,520.36||25,580,029.94|
|II. Total accumulateddamage|75,263,345.22|10,403,679.19|5,714,170.89|79,952,853.52|
|Landuseright|30,942,368.10|7,487,007.69|4,061,388.39|34,367,987.40|
|Trademark registrationcostsinforeigncountries|3,007,341.61|311,774.86||3,319,116.47|
|Patents and proprietarytechnologies|31,770,877.61|817,386.40|1,652,782.50|30,935,481.51|
|Others|9,542,757.90|1,787,510.24||11,330,268.14|
|IIITotalbookvalue|293,181,525.62|79,535,947.28|10,230,819.17|362,486,653.73|
|Landuseright|272,546,477.68|72,801,597.78|5,044,501.67|340,303,573.79|
|Trademark registrationcostsinforeigncountries|0.00|200,043.14|0.00|200,043.14|
|Patents and proprietarytechnologies|10,304,296.26|2,615,296.24|5,186,317.50|7,733,275.00|
|Others|10,330,751.68|3,919,010.12|0.00|14,249,761.80|
|IVTotal provision forimpairment|2,901,082.61|||2,901,082.61|
|Landuseright|||||
|Trademark registrationcostsinforeigncountries|||||
|Patents and proprietarytechnologies|2,901,082.61|||2,901,082.61|
|Others|||||
|Totalbookvalueof|290,280,443.01|79,535,947.28|10,230,819.17|359,585,571.12|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|intangibleassets|||||
|Landuseright|272,546,477.68|72,801,597.78|5,044,501.67|340,303,573.79|
|Trademark registrationcostsinforeigncountries|0.00|200,043.14|0.00|200,043.14|
|Patents and proprietarytechnologies|7,403,213.65|2,615,296.24|5,186,317.50|4,832,192.39|
|Others|10,330,751.68|3,919,010.12|0.00|14,249,761.80|

Note:① yearamortizationamountedto10,403,679.19yuan.
② AsofDecember31,2013,thecarryingvalueof5,483,687.96yuan(originalcostofRMB6,353,848.80)oflanduserights forcollateraltoobtainshort-termloansofRMB55million(seeNoteVII,18).Thecarryingvalueof82,505,026.82yuan(costRMB 88,201,364.97million)securedbylanduserightsfortherenminbiRMB5,00.00millionlong-termloan.Mortgageloanbookvalue ofRMB4,645,554.03(costofRMB8,511,860.76)toobtainlanduserightshavebeenreturned,butnotyetreleasedcollateral. (2)Companydevelopmentexpense
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease||Closingbalance|
||||Recognizedintocurrentgains/losses|Recognizedasintangibleassets||
|Naught|0.00|0.00|0.00|0.00|0.00|
|Total|0.00|0.00|0.00|0.00|0.00|

Thepercentageofdevelopmentexpenseaccountedfor0%ofthetotalexpenditureofR&Dprojectsinthereportingperiod.ThepercentageofthevalueofintangibleassetsformedfromtheinternalR&DoftheCompanyaccountedfor0%oftheclosingbook valueofintangibleassets.
NotesofthedevelopedprojectsoftheCompany,includingtheprojectswithindividualvaluemorethanRMB1millionandrecorded withtheassessedvalue,relevantassessmentagencyandmethodshallbedisclosed:
24.Goodwill
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Name of investee or event thatgeneratedgoodwill|Openingbalance|Increaseinthereportingperiod|Decreaseinthereportingperiod|Closingbalance|Impairmentprovisionatperiod-end|
|Shaanxi Konka|316,980.96|||316,980.96||
|Video Project|29,033.42|||29,033.42||
|Anhui Konka|3,597,657.15|||3,597,657.15||
|Total|3,943,671.53|||3,943,671.53||

Notesoftestmethodofgoodwillimpairmentandimpairmentwithdrawalmethod:
Fordetailsaboutmethodtotestgoodwillimpairmentandprovisionforimpairment,pleaserefertoNo.35inNoteIV.
2013AnnualReportofKonkaGroupCo.,Ltd.
The year ended December 31, 2013, the carrying value of goodwill exceeds its recoverable amount no case 25.Long-termamortizationexpense
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Item|Openingbalance|Increase|Amortizationbalance|Otherdecrease|Closingbalance|Reasonforotherdecrease|
|Decorationexpenses|2,547,457.90|6,165,460.71|1,698,716.53||7,014,202.08||
|Other|3,713,828.55|4,291,003.66|1,588,649.35|25,300.00|6,390,882.86||
|Total|6,261,286.45|10,456,464.37|3,287,365.88|25,300.00|13,405,084.94|--|

Note:
26.Deferredtaxassetsandliabilities
(1)Deferredtaxassetsandliabilitiesarenotlistedasthenetvalueafteroffset
Deferredtaxassetsandliabilitiesthatalreadyrecognized
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Deferredincometaxassets:|||
|Provisionforimpairmentofassets|151,863,198.25|205,571,058.00|
|Deductiblelosses|15,581,935.44|52,426,863.46|
|Changeofthefairvalueofthefinancialassetsthatarerecordedintothecapitalreservesandavailableforsale||281,142.72|
|Compensatedforunrealizedinternalprofit|12,279,905.48|11,190,679.88|
|Warrantyexpenses|14,978,181.10|15,908,757.86|
|Othernon-currentliabilities-deferredincome|24,025,519.14|25,525,174.64|
|Subtotal|218,728,739.41|310,903,676.56|
|Deferredincometaxliabilities:|||
|AssessedvalueaddofFixAssets|0|563,067.21|
|Subtotal|0|563,067.21|

 Listofunrecognizeddeferredincometaxassets
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Deductibletemporarydifference|467,226,060.72|29,015,090.67|
|Deductiblelosses|229,913,859.17|63,665,559.14|
|Total|697,139,919.89|92,680,649.81|

Deductiblelossesofunrecognizeddeferredincometaxassetswilldueinthefollowingyears
Unit:RMBYuan
|||||
|-|-|-|-|
|Year|Closingbalance|Openingbalance|Remark|

2013AnnualReportofKonkaGroupCo.,Ltd.
Listoftaxabledifferencesanddeductibledifferencesitems
Unit:RMBYuan
||||
|-|-|-|
|Item|Temporarydifferencesamount||
||Closingbalance|Openingbalance|
|Taxabledifferencesitems|||
|Deductibledifferencesitem|||

(2)Deferredtaxassetsandliabilitiesarelistedasthenetvalueafteroffset
Underlyingexposuresofdeferredtaxassetsandliabilitiesafteroffset
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Deferredtaxassetsorliabilitiesafteroffsetatclosingperiod|Temporarydifferencesofdeferredtaxassetsorliabilitiesafteroffsetatclosingperiod|Deferredtaxassetsorliabilitiesafteroffsetatopeningperiod|Temporarydifferencesofdeferredtaxassetsorliabilitiesafteroffsetatopeningperiod|
|Deferredtaxassets|218,728,739.41||310,903,676.56||
|Deferredtaxliabilities|563,067.21||563,067.21||

Particularsofdeferredtaxassetsandliabilitiesafteroffset
Unit:RMBYuan
|||
|-|-|
|Item|Amountofoffset|

Note:
27.Listofprovisionforassetsimpairment
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Item|Openingbookbalance|Increase|Decrease||Closingbookbalance|
||||Reversal|Writtenoff||
|I.Provisionforbaddebt|298,228,748.37|18,520,110.11||149,916.19|316,598,942.29|
|II.Provisionforinventoryfallingprice|762,338,031.79|218,571,037.64||203,124,376.65|777,784,692.78|
|III.Impairmentprovisionofavailable-for-salefinancialassets||1,369,748.77|||1,369,748.77|
|IV.Impairmentprovisionoflong-termequityinvestment|1,885,000.00||||1,885,000.00|
|V.Impairmentprovisionoffixedassets|23,849,042.62|1,936,757.46||12,076,012.50|13,709,787.58|
|VIbuiltinimpairmentofconstruction|0.00||||0.00|
|VIIimpairmentofoilandgasproperties|0.00|0.00|||0.00|
|VIIIimpairmentof|2,901,082.61||||2,901,082.61|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|intangibleassets|||||
|Total|1,089,201,905.39|240,397,653.98|215,350,305.34|1,114,249,254.03|

 Notesofthelistofassetsimpairment:
Description Details of the impairment of assets
Ownership or the right to use restricted assets
Unit:RMBYuan Item Closing Restricted Cause
Assets used as collateral 132,686,206.84
Subtotal:
Fixed assets 44,697,492.06 Note 7, 29
87,988,714.78
Intangible assets Note 7, 29, note 7 (40)
Other causes of ownership or
1,563,606,559.7
right to use restricted
8
assets Subtotal:
drawn all types of margin deposits at any Other non-monetary capital 72,253,668.73
time
Notes receivable 1,448,788,478.4 for comprehensive credit application 5
repaid loans, but not lifted mortgage, Note Fixed assets 37,918,858.57
7, 17
repaid loans, but has not yet released Intangible assets 4,645,554.03
collateral, see Note 7 (23)
Total 1,696,292,766.6
2
28.Othernon-currentassets
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Naught|0.00|0.00|
|Total|0.00|0.00|

Notesofothernon-currentassets:
29.Short-termloan
(1)Category
Unit:RMBYuan
2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Pledgeloan||2,641,579,639.42|
|Mortgageloan|55,000,000.00|55,000,000.00|
|Guaranteeloan|303,321,906.56||
|Creditloan|4,880,747,857.92|2,659,771,847.06|
|Entrustedloan||100,000,000.00|
|Total|5,239,069,764.48|5,456,351,486.48|

 Notesofcategoryofshort-termloan:
No.2011Chu-ZhongYDZ003CeilingValueMortgageContractwasresignedwithBankofChinaCo.,LtdChuzhouBranchon13 Jan.,2011.Thecontracttermwasfrom10Jan.,2011to10Jan.,2014.Ceilingprincipalbalanceofthecontractedsecureclaimswas RMB 55,000,000 and the mortgage was CGY(2007) No. 00464 land use right, CGY(2008) No. 09579, CFQZ 2008 No. 00886 Building,FDQZCZNo.20100006538Building,FDQZCZNo.20100006539,andCFQZ2008No.009579Building.Until31Dec., 2013, the book value of above mortgaged land use rights was RMB 5,610,764.96 (original value was RMB 6,353,848.80); book valueofmortgagedhousesandbuildingswasRMB46,523,455.32(originalvaluewasRMB51,470,607.30).On13Jan.,2011,the Company signed[2011CZYDZ No.003] Loan Contract with Bank of China Co., Ltd Chuzhou Branch for the amount of RMB 55,000,000undertheCeilingValueMortgageContract.
(2)Non-existentdueoutstandingshort-termloansattheendofterm
(2)Particularsofmaturityunpaidshort-termloan
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Theloanentity|Amount|Ratio|Theloanunit|Reasonoffailingtopay|Estimatedrepaymentperiod|
|Naught|0.00|0%||||
|Total|0.00|--|--|--|--|

TherepaymentamountRMB0afterbalancesheetdate.
Notetoshort-temloan,includingextensionofmaturityshort-termloan,explaintheextensingconditionsandnewmaturitydate 30.Transactionfinancialliabilities
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingfairvalue|Openingfairvalue|
|Trading of bonds issued|0.00|0.00|
|Financial liabilities designated atfair value through profit or loss|0.00|0.00|
|Derivative financial liabilities|0.00|0.00|
|Other financial liabilities|0.00|0.00|
|Total|0.00|0.00|

Note:
31.Notespayable
Unit:RMBYuan
||||
|-|-|-|
|Category|Closingbalance|Openingbalance|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Commercialacceptancebill|515,034,730.20|846,746,137.62|
|Bankacceptancebill|50,103,060.64||
|Total|565,137,790.84|846,746,137.62|

 RMB565,137,790.84willbedueinnextfiscalperiod.
Notesofnotespayable:
32.Accountspayable
(1)
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Withinoneyear|3,261,181,383.46|2,686,331,707.29|
|Onetotwoyears|55,110,361.00|7,156,630.71|
|Twotothreeyears|5,156,630.71|14,513,984.42|
|Threeyearsorlonger|20,355,768.95|27,991,465.10|
|Total|3,341,804,144.12|2,735,993,787.52|

 (2)Particularsabout accountspayableduetoshareholdersholding5%(including5%)votingrightsofthe Company
Unit:RMBYuan
||||
|-|-|-|
|Nameofentity|Closingamount|Openingamount|
|No|0.00|0.00|
|Total|0.00|0.00|

 (3)Particularaboutsignificantaccountspayablewithagingover1year
Reasonoffailing Repayornotafter Nameofcreditors Amount
repayment balancesheetdate Installationproject 24,329,558.73
Unsettled No
Outerwallsproject 2,698,200.11
Unsettled No
Surveyanddesignexpense
2,314,760.00
Unsettled No
Exteriorcomponents
1,825,829.85
Unsettled No
Supervision and management expenses of
1,790,000.00
Unsettled No
projects
Total 32,958,348.69
33 Advancefromcustomers
(1)Advancefromcustomers
2013AnnualReportofKonkaGroupCo.,Ltd.
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Withinoneyear|458,960,747.24|418,357,441.25|
|Onetotwoyears|4,306,679.21|11,504,576.23|
|Twotothreeyears|8,319,702.44|2,647,309.25|
|Overthreeyears|11,128,906.79|9,327,140.36|
|Total|482,716,035.68|441,836,467.09|

 (2) Particulars about advance from customers due to shareholders holding5% (including5%) voting rightsoftheCompany
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingamount|Openingamount|
|No|0.00|0.00|
|Total|0.00|0.00|

 (3)Particularaboutsignificantadvancefromcustomerswithagingover1year
Particulars about advance from customers due to shareholders holding5% (including5%) voting rights of theCompany
A.There is no advance from customers due to shareholders holding5% (including5%) voting rights of the Company.
B.The significantadvancefromcustomers withaging over1year is thesale amount unsettled.
C.
Advances from foreign currency balances include the following:
Unit:RMBYuan Closing Beginning
Item
The amount of Exchange The amount of Exchange
foreign currency rate RMB foreign currency rate RMB
USD
20,546,883.68 6.0969 125,272,295.11 17,073,688.94 6.2855 107,316,671.83 HK
1,074,618.93 0.7862 844,865.40 408,434.56 0.8109 331,179.16 EUR
— — — 17,678.62 8.3176 147,043.69 34.Payrollpayable
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Openingbookbalance|Increase|Decrease|Closingbookbalance|
|I.Salary,bonus,|286,063,426.11|1,399,886,349.96|1,370,703,947.95|315,245,828.12|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|allowance,subsidy|||||
|II.Employeewelfare|2,095,684.52|76,854,230.35|77,562,351.84|1,387,563.03|
|III.Socialinsurance|5,493,167.06|198,542,791.94|199,515,110.79|4,520,848.21|
|1.Medicalinsurancepremiums|1,446,451.87|43,703,085.73|43,888,328.56|1,261,209.04|
|2.Basicendowmentinsurance|3,532,013.23|134,284,241.12|135,005,536.09|2,810,718.26|
|3.Pensionexpense||139,633.30|139,633.30||
|4.Unemploymentinsurance|225,334.89|7,456,814.86|7,485,566.33|196,583.42|
|5.Maternityinsurance|124,075.12|7,702,426.04|7,709,049.91|117,451.25|
|6.Insuranceagainstinjuriesatwork|165,291.95|5,256,590.89|5,286,996.60|134,886.24|
|IV.Publicreserveforhousingconstruction|1,472,945.22|31,686,996.96|31,568,791.25|1,591,150.93|
|V.Welfarefordismissing|163,910.53|8,870,499.50|8,187,501.03|846,909.00|
|VI.other|9,714,283.29|41,010,030.72|42,225,625.53|8,498,688.48|
|Total|305,003,416.73|1,756,850,899.43|1,729,763,328.39|332,090,987.77|

 RMB0.00istheamountsinarrearsinthepayrollpayable.
ThelaborunionbudgetandemployeeeducationbudgetisRMB6,346,674.68,andthenon-monetarybenefitsareRMB0.00,aswell asthecompensationforterminatingthelabourcontractisRMB0.00.
Theestimateddistributiondateandamountaswellasotherarrangementsforpayrollpayable:
Employeeremunerationpayablenoarrearsaccruedwages.
35.Taxespayable
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|VAT|-142,717,407.04|-274,015,057.88|
|Businesstax|-2,190,048.93|1,151,251.13|
|Corporateincometax|6,244,782.78|-6,187,617.27|
|Urbanmaintenanceandconstructiontax|2,768,939.98|2,876,020.13|
|EducationalSurtax|3,557,044.66|4,239,904.85|
|Flood control fund, fund for embankment, fund for|2,160,526.97|2,365,376.38|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|waterconservancyandfundforrivermanagement|||
|Fund for disposing abandoned appliances andelectronicproducts|2,353,064.80|2,481,551.51|
|Others|24,839,026.00|30,671,882.00|
|Total|-2,052,242.92|0.00|

 Note: Income tax belongs to subordinated subsidies of the Company was taxed by locating area, and the Company made finalaccountsandclearanceattheendoftheyear.FordetailspleaserefertoNo.1ofNote.Ⅴ.
36.Interestpayable
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Interest of long-term borrowing with installmentinterestsandprincipalpaidatmaturity|—|1,764,888.89|
|Interestpayableofshort-termborrowings|34,945,870.48|25,886,463.78|
|Total|34,945,870.48|27,651,352.67|

 Notes:
37.Dividendspayable
Unit:RMBYuan
|||||
|-|-|-|-|
|Nameofcompany|Closingbalance|Openingbalance|Reasonforunsettlementover1year|
|Total|0.00||--|

Notes:
38.Otheraccountspayable
(1)
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Within1year|1,025,034,236.75|1,181,207,444.47|
|1-2years|184,992,447.00|120,523,681.87|
|2-3years|118,564,660.08|29,156,204.12|
|Over3years|62,804,787.14|33,868,930.00|
|Total|1,391,396,130.97|1,364,756,260.46|

 (2) Particulars about other accounts payable due toshareholders holding5%(including5%)voting rights
oftheCompany
Unit:RMBYuan
2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Nameoftheentity|Closingamount|Openingamount|
|No|0.00|0.00|
|Total|0.00|0.00|

 (3)The significantotheraccountspayable with agingover 1year
Unit:RMBYuan Whetherreturningafter Nameofcreditor Amount Reasonforunsettlement
thereportingdateornot ZhenhuaGroup(Kunshan)Construction
5,400,000.00 Guaranteemoney No
EngineeringCo.,Ltd
AnhuiSijianHoldingGroupCo.,Ltd.
3,045,000.00 Guaranteemoney No
ShanghaiYongxinColorCRTLtd.Co.,Ltd.
2,075,485.15 Guaranteemoney No
ChuzhouGoldenmatteroftruckingcompany
2,000,000.00 Guaranteemoney No
ShanghaiShenSiLogisticsCo.,Ltd.
2,600,000.00 Guaranteemoney No
XianyangAlbertLogisticsLtd.
2,000,000.00 Guaranteemoney No
ShanghaiInternationalLogisticsLimitedYude
2,500,000.00 Guaranteemoney No
19,620,485.15
Total
(4)Explanationaboutotheraccountspayablewithlargeamount
Unit:RMBYuan Nameofcreditor Closingamount Natureorcontent ZhenhuaGroup(Kunshan)Construction
5,400,000.00 Guaranteemoney EngineeringCo.,Ltd.
CCFEDtheThirdConstruction&Engineering
3,841,010.48 Guaranteemoney Co.,Ltd.
AnhuiSijianHoldingGroupCo.,Ltd.
3,045,000.00 Guaranteemoney ShanghaiShenSiLogisticsCo.,Ltd.
2,600,000.00 Guaranteemoney ChuzhouGoldenmatteroftruckingcompany
2,200,000.00 Guaranteemoney 3,045,000.00
Total
39.Estimatedliabilities
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
|Welfarefordismissing|2,511,814.54||1,600,729.13|911,085.41|
|Total|2,511,814.54||1,600,729.13|911,085.41|

2013AnnualReportofKonkaGroupCo.,Ltd.
Notes: due to market reason and Konka strategic adjustment, Shaanxi Konka Electronics Co., Ltd. entered the stage of long-term shutdown,paidRMB911,085.41EmployeecompensationofShaanxiKonkaElectronicsCo.,Ltd.
40.Non-currentliabilitiesduewithin1year
(1)Non-currentliabilitiesduewithinoneyear
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingamount|Openingamount|
|Long-termloanduewithin1year|0.00|810,000,000.00|
|Long-termpayablesduewithin1year|1,755,444.00||
|Total|1,755,444.00|810,000,000.00|

 (2)Long-termloanduewithin1year
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingamount|Openingamount|
|Creditloan||10,000,000.00|
|Entrustedloan||800,000,000.00|
|Total|0.00|810,000,000.00|

 RMB0.00oflong-termloanduewithin1yearwasofmatureloanwithextendedterm.
Topfivelong-termloansduewithin1year
Unit:RMBYuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Creditor|Startingdate|Endingdate|Currency|Rate(%)|Closingbalance||Openingbalance||
||||||Foreigncurrencybalance|RMBbalance|Foreigncurrencybalance|RMBbalance|
|OCTBranch ofCCB|16Sep.2010|1Aug.2013|RMB|3.7%||||100,000,000.00|
|OCTBranch ofCCB|15Apr.2010|31Jul.2013|RMB|5.42%||||100,000,000.00|
|OCTBranch ofCCB|31Dec.2010|31Jul.2013|RMB|3.92%||||300,000,000.00|
|JiangsuInternational TrustcorporationLtd.|10Dec.2010|10Dec.2013|RMB|0.3%||||10,000,000.00|
|ShenzhenCivicCenter|12Jul.2012|31Jul.2013|RMB|4.96%||||300,000,000.00|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|Branch ofChinaCITICBank||||||||
|Total|--|--|--|--|--|--|810,000,000.00|

 Matureloanoflong-termloanduewithin1year
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Theloanentity|Amount|Maturetime|Theannualinterestrate(%)|Usesofloanamount|Reasonoffailingrepay|Estimatedrepaymentperiod|
|No|0.00||||||
|Total|0.00|--|--|--|--|--|

 RMB000waspaidbackafterBalanceSheetDate:
Notesoflong-termborrowingsduewithin1year:
(3)Bondspayableduewithin1year
Unit:RMBYuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Nameofthebonds|Facevalue|Issuingdate|Bondperiod|Issuingamount|Openinginterestpayable|Interestaccruedinthereportingperiod|Interestpaidinthereportingperiod|Closinginterestpayable|Closingbalance|

Note
(4)Long-termpayablesduewithinoneyear
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Theloanentity|Timelimit|Initialamount|Interestrate(%)|Accruedinterest|Closingbalance|Conditionsofaloan|

 Note:
41.Othercurrentliabilities
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbookbalance|Openingbookbalance|
|No|0.00|0.00|
|Total|0.00|0.00|

 Note:
42.Long-termborrowings
(1)Categoriesoflong-termborrowings
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingamount|Openingamount|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Pledgeloan|5,000,000.00||
|Debtofhonour||10,000,000.00|
|Entrustloans||1,200,000,000.00|
|Less: long-term borrowing due within oneyear(NoteVII.39)||810,000,000.00|
|Total|5,000,000.00|400,000,000.00|

 Notes:
Asof31Dec.2013,theabovebookvalueRMB82,505,026.82(originalvalueRMB88,201,364.97)mortgagedforthelanduseright KGY(2012)No.1201211700wasconsideredaslongtermborrowingofRMB5,000,000.00.
(2)Thetopfivelong-termloans
Unit:RMBYuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Creditor|Startingdate|Endingdate|Currency|Rate(%)|Closingbalance||Openingbalance||
||||||Foreigncurrencyamount|RMBamount|Foreigncurrencyamount|RMBamount|
|ShenzhenCivicCenterBranch ofChinaCITICBank|9Jan.2012|1Jun.2015|RMB|5.51%||||200,000,000.00|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|OCTBranch ofCCB|17Mar.2011|4Mar.2016|RMB|5.67%||||100,000,000.00|
|OCTBranch ofCCB|9Jan.2012|12Dec.2016|RMB|5.28%||||100,000,000.00|
|kunshanBranchofCCB|14Aug.2013|13Aug.2016|RMB|6.46%||5,000,000.00|||
|Total|--|--|--|--|--|5,000,000.00|--|400,000,000.00|

 Notes of long-term loan: for the long-term loans arising from mature loans with extended term, the Company shall explain the conditionsofextension,principal,interest,expectedrepaymentarrangement:
43．Bondspayable
Unit:RMBYuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Nameofthebonds|Facevalue|Issuingdate|Bondperiod|Issuingamount|Openinginterestpayable|Interestaccruedinthereportingperiod|Interestpaidinthereportingperiod|Closinginterestpayable|Closingbalance|
|No|0.00||0|0.00|0.00|0.00|0.00|0.00|0.00|

 Notetobondspayableincludingconvertiblebondsconvertibleconditionsandtime.
44.Long-termaccountspayable
(1)Particularsaboutthetopfivelong-termaccountspayable
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Entity|Timelimit|Theinitialamount|Ratio%|Accruedinterest|Closingbalance|Conditionsofaloan|
|ChuzhouTongchuang||30,000,000.00|2%|300,000.00|30,000,000.00||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|ConstructionInvestmentCo.,Ltd.|||
|Obligationsunderfinanceleases|3,121,974.13|0.00|
|Less:currentportion(note7,40)|1,755,444.00||

(2)Particularsaboutaccruedfinancialleaseinlong-termaccountpayable
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Entity|Closingamount||Openingamount||
||Foreigncurrencyamount|RMBamount|Foreigncurrencyamount|RMBamount|
|InternationalFarEasternLeasingCo.,Ltd.||1,755,444.00|||
|Total||1,755,444.00|||

Guaranteeamountprovidedbyanindependentthirdpartyfinancinglease
Notetolong-termaccountspayable
45.Specialaccountspayable
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Item|Openingamount|Increaseinthereportingperiod|Decreaseinthereportingperiod|Closingamount|Remark|
|No|0.00|0.00|0.00|0.00|0|
|Total|0.00|0.00|0.00|0.00|---|

Note
46.Othernon-currentliabilities
Unit:RMBYuan
||||
|-|-|-|
|Item|Closingbookbalance|Openingbookbalance|
|Deferredincome|131,658,369.11|125,743,462.22|
|Total|131,658,369.11|125,743,462.22|

 Notetoothernon-currentliabilities
Particularsaboutdeferredincome：
Amountofnewly Amountof Othe Related
Item Opening balance Closing amount
increasesubsidy non-operating r to
2013AnnualReportofKonkaGroupCo.,Ltd.
thisyear incomerecorded chan assets/ thisyear ges related to
income Industrializationprojectof
Related largesizeliquidcrystal 9,200,000.00 6,800,000.00
toassets displaymodule(LCM)
R&Dandindustrialization
Related ofintegratedmoduleofflat 3,525,000.00 2,625,000.00
toassets TVset
R&Dandindustrialization Related 6,149,999.96 4,509,999.93
ofintegratedDTMB toassets Fundforflatpaneldisplay Related 10,000,000.00 8,499,999.98
industryinyear2008 toassets Keytechnologyand
Related industrializationofLED 5,000,000.00 5,000,000.00
toassets BacklightofflatTVset
R&Dofmatingcorechip
Related basedontheterminalof 3,750,000.00 3,750,000.00
toassets AVS/DRA
R&Dandindustrialization
ofnew-typesmart Related 3,750,000.00 3,750,000.00
televisionwith toassets man-machineinteraction
R&Dandindustrialization
ofnew-typeterminal Related 3,000,000.00 2,650,000.00
applicationservicesystem toassets ofinternet
Subsidiesforsupporting
Related equipmentofliquidcrystal 24,570,000.00 21,060,000.00
toassets moduleproject
Fundsforscientificand
technologicalinnovation Related 3,000,000.00 3,000,000.00
andspecialguidanceof toassets achievementstransfer
SpecialFundofStrategic
EmergingIndustry
DevelopmentofDongguan Related 5,400,000.00 4,800,000.00
FinancialBureau toassets (High-EndNewElectronic
Information)
2013AnnualReportofKonkaGroupCo.,Ltd.
Related Infrastructuresubsidy 8,400,000.00 6,000,000.00
toassets Related Other 11,550,000.00
toassets Related Other 30,854,910.27 35,687,160.40 to
income 9,143,551.99 11,976,208.80
Total
47.Sharecapital
Unit:RMBYuan
|||||||||
|-|-|-|-|-|-|-|-|
||Openingbalance|Increase/Decrease(+/-)|||||Openingbalance|
|||Issuingnewshares|Bonusshares|Capitalizationofpublicreserves|Other|Subtotal||
|Totalshares|1,203,972,704.00||||||1,203,972,704.00|

 Notes of changes in share capital, for those action of increasing capital or decreasing capital in thereporting period, theCompany shall disclose the name of the accounting firm executing the capital verification and document number of the capital verification report; for joint-stock companies running for less than three years, only the net assets shall be specified for particulars before establishment;whileforcaseoftotallychangingthelimitedliabilitycompaniesintojoint-stockcompanies,capitalverificationonthe establishmentshallbespecified:
48.Treasurystock
Note
49.Specialreserves
Note
50.Capitalreserves
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
|Capital premium (sharecapitalpremium)|1,211,366,082.55|||1,211,366,082.55|
|Othercapitalreserves|61,054,245.91|1,985,614.32||63,039,860.23|
|Total|1,211,366,082.55|||1,211,366,082.5|

2013AnnualReportofKonkaGroupCo.,Ltd.
||
|-|
|5|

 NoteCurrentlong-termequityinvestmentcapitalsurplusincreasedbytheequitymethodofaccounting-Refond ElectricownerchangesinequityinothercapitalreservesoftheCompanyentitledshareofRMB1,142,186.16, theamountoftheCompany'ssaleofassetsresultedinanimpairmentrecognizedinpriorperiodsthecapital surplustransferred-843,428.16yuan,anincreaseofcapitalsurplusofRMB843,428.16.
51.Surplusreserves
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Openingbalance|Increase|Decrease|Closingbalance|
|Statutorysurplusreserves|573,228,941.95|20,617,258.76||593,846,200.71|
|Discretionalsurplusreserves|254,062,265.57|||254,062,265.57|
|Total|827,291,207.52|20,617,258.76||847,908,466.28|

 Notesofsurplusreserves:forsurplusreservestransferredtosharecapital,compensatinglossesanddistributedasdividends,relevant resolutionsshallbeexplained:
TheCompanyaccordingto10%ofnetprofitwithdrawssurplusreservesinlinewithCompanylaw,theprovisions of the Articles of Association, the accumulative amount of legal surplus reserves over50% of the Company registered capital can stop been withdrawn. The Company can withdraw discretional surplus reserves after withdrawing legal surplus reserves. Been approved, discretional surplus reserves can be used for making up previousannuallossandincreasingsharecapital.
52.Provisionforgeneralrisk
Notesofprovisionforgeneralrisk:
53.Retainedprofits
Unit:RMBYuan
||||
|-|-|-|
|Item|Amount|Extractingorallocationproportion|
|Openingbalanceofretainedprofitsbeforeadjustments|725,485,704.10|--|
|Openingbalanceofretainedprofitsafteradjustments|725,485,704.10|--|
|Add:NetprofitattributabletoownersoftheCompany|45,163,004.10|--|
|Less：Withdrawaloflegalsurplusreserves|20,617,258.76|10%|
|Dividendofcommonstockpayable|12,039,727.04||
|Closingretainedprofits|737,991,722.40|--|

Adjustmentofundistributedprofitdetailsatthebeginningoftheyear:
1) AffectedundistributedprofitatthebeginningoftheyearwasRMB0.00duetoretroactiveadjustmentof
AccountingStandardsforBusinessEnterpriseandrelevantregulations.
2013AnnualReportofKonkaGroupCo.,Ltd.
2) AffectedundistributedprofitatthebeginningoftheyearwasRMB0.00duetochangesofaccountingpolicies. 3) AffectedundistributedprofitatthebeginningoftheyearwasRMB0.00duetomajoraccountingerror correction.
4) AffectedundistributedprofitatthebeginningoftheyearwasRMB0.00duetochangesofmergerangeythe samecontrol.
5) AffectedundistributedprofitatthebeginningoftheyearwasRMB0.00ofotheradjustments.
Undistributedprofits:forthefirstIPOcompanies,iftheaccumulatedprofitsbeforeIPOweresharedbytheold andnewshareholdersdecidedbytheBoardofDirectors,itshouldbespecified.Iftheaccumulatedprofitsbefore IPOwereallocatedandsharedbyoldshareholdersdecidedbytheBoardofDirectors,theCompanyshould specifytheauditedprofitvaluesheldbyoldshareholdersindividendspayable.
54.RevenueandCostofSales
(1)Revenue,CostofSales
Unit:RMBYuan
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|Salesofmainbusiness|19,754,547,950.84|18,189,759,356.68|
|Otheroperatingincome|252,188,927.98|148,102,300.61|
|Costofsales|16,660,981,623.13|15,038,090,498.84|

 (2)Mainbusiness(Classifiedbyindustry)
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Industry|Reportingperiod|||Sameperiodoflastyear||
||Revenueofsales||Costsofsales|Revenueofsales|Costsofsales|
|Electronicindustry|19,754,547,950.84|16,461,290,916.72||18,189,759,356.68|14,932,299,224.13|
|Total|19,754,547,950.84|16,461,290,916.72||18,189,759,356.68|14,932,299,224.13|

 (3)Mainbusiness(Classifiedbyproduct)
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Product|Reportingperiod||Sameperiodoflastyear||
||Revenueofsales|Costsofsales|Revenueofsales|Costsofsales|
|ColorTVbusiness|15,904,547,663.26|13,072,644,058.73|14,429,624,144.21|11,811,816,367.63|
|Mobilephonebusiness|1,551,294,607.93|1,418,629,105.82|1,397,315,544.60|1,217,298,414.04|
|Consumerappliancesbusiness|1,369,927,530.08|1,204,755,092.16|1,280,831,893.05|1,031,814,437.98|
|Others|928,778,149.57|765,262,660.01|1,081,987,774.82|871,370,004.48|
|Subtotal|19,754,547,950.84|16,461,290,916.72|18,189,759,356.68|14,932,299,224.13|

2013AnnualReportofKonkaGroupCo.,Ltd.
(4)Mainbusiness(Classifiedbyarea)
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Area|Reportingperiod||Sameperiodoflastyear||
||Revenueofsales|Costsofsales|Revenueofsales|Costsofsales|
|Domesticsales|15,775,639,484.85|12,808,035,030.73|14,383,077,390.26|11,374,679,033.33|
|Overseassales|3,978,908,465.99|3,653,255,885.99|3,806,681,966.42|3,557,620,190.80|
|Total|19,754,547,950.84|16,461,290,916.72|18,189,759,356.68|14,932,299,224.13|

 (5)Therevenueofsalesfromthetopfivecustomers
Unit:RMBYuan
||||
|-|-|-|
|Customer|Mainbusinessrevenue|Proportionoftotalbusinessrevenue(%)|
|2013|3,743,686,942.08|18.71%|
|Total|3,743,686,942.08|18.71%|

Note:
55.Therevenueofcontractproject
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Fixedpricecontract|Contractitem|Amount|Thecumulativecostoccurred|Thecumulativegrossmarginrecognized(losswith“-”)|Settlementamount|
|Costpluscontract|Contractitem|Amount|Thecumulativecostoccurred|Thecumulativegrossmarginrecognized(losswith“-”)|Settlementamount|

Note:
56.Businesstaxandsurcharges
Unit:RMBYuan
|||||
|-|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|Calculationandpaymentstandard|
|Businesstax|4,884,929.13|3,455,784.48|For calculation and paymentstandard of business tax andsurcharges please refer to note V,tax.|
|Urbanmaintenanceand|35,148,685.30|40,853,435.46|For calculation and payment|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||
|-|-|-|-|
|constructiontax|||standard of business tax andsurcharges please refer to note V,tax.|
|Educationsurtax|16,545,296.63|19,395,734.66|For calculation andpaymentstandardofbusinesstaxandsurcharges please refer to note V,tax.|
|Resourcestax|9,463,642.84|10,108,029.00|For calculation andpaymentstandardofbusinesstaxandsurcharges please refer to note V,tax.|
|Total|443,675.11|482,121.45|--|

Notes:
ForcalculationandpaymentstandardofbusinesstaxandsurchargespleaserefertonoteV,tax.
57.Sellingexpenses
Unit:RMBYuan
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|Wages|652,393,373.57|499,652,744.18|
|Expensesforpromotionactivities|526,344,019.70|536,444,029.81|
|Expensesforlogistics|332,082,150.18|329,532,873.01|
|Advertisingexpense|323,246,861.57|313,141,868.69|
|Maintenancecharges|297,598,040.60|273,479,422.55|
|Travelcharge|50,870,292.54|47,664,202.76|
|Socialsecuritycharges|71,142,006.09|67,952,126.77|
|Rentalcharges|42,526,493.22|40,070,983.50|
|Entertainmentexpense|41,719,391.52|36,539,526.96|
|Employeeswelfarecost|23,280,324.64|20,657,570.36|
|Taxesfeesandfund|72,897,750.18|62,487,663.13|
|Other|114,502,443.18|89,004,705.95|
|Total|2,548,603,146.99|2,316,627,717.67|

 58.Administrationexpense
Unit:RMBYuan
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|R&Dexpenses|229,737,325.10|207,195,763.12|
|Payroll|164,526,928.99|150,374,596.34|
|Depreciationexpense|32,805,608.71|33,653,438.77|
|Taxesandfund|28,679,224.85|26,171,783.57|
|Entertainmentexpense|22,692,569.96|24,038,898.53|
|Consultingfees|10,646,297.33|21,963,034.13|
|Travelcharge|15,536,071.86|18,703,798.34|
|Socialsecuritycharges|20,103,176.16|19,392,800.92|
|Laborunionexpenditure|7,040,856.43|9,840,936.45|
|Waterandelectricitycharges|9,145,780.28|9,086,755.51|
|Patentfee|19,883,658.12|3,827,390.45|
|Employeeswelfarecost|12,664,113.23|10,328,618.91|
|Other|100,924,771.43|121,076,955.98|
|Total|674,386,382.45|655,654,771.02|

 59.Financialexpenses
Unit:RMBYuan
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|Interestexpense|162,348,900.55|276,506,507.21|
|Less:Interestincome|-33,847,716.12|-117,959,725.31|
|Less:Capitalizationofinterestamount|-5,340,995.96|-3,784,432.03|
|Gainsorlossesonexchange|-182,710,157.33|15,837,639.05|
|Less:Capitalizationofgainsorlossesoninterestamount|-87,135.06|8,916,290.40|
|Other|-59,637,103.92|179,516,279.32|

 60.Incomefromchangeoffairvalue
Unit:RMBYuan
||||
|-|-|-|
|Sourceofincomefromchangeoffairvalue|Reportingperiod|Sameperiodoflastyear|
|Transactionalfinancialassets|0.00|22,101,173.97|
|Ofwhich：incomefromchangeoffairvaluefromDerivativefinancialinstruments||22,101,173.97|
|Total||22,101,173.97|

 Note:
2013AnnualReportofKonkaGroupCo.,Ltd.
61.Incomefrominvestment
(1)Particularsaboutincomefrominvestment
Unit:RMBYuan
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|Long-term equity investment income accountedbyequitymethod|-12,083,013.71|2,204,872.01|
|Investment income arising from disposal oflong-termequityinvestments|63,417,684.96|91,013.92|
|Investmentincomereceivedfromholdingofheld-to-maturityinvestments|21,115.80|15,250.30|
|Investmentincomereceivedfromavailable-for-salefinancialassets||5,110,011.59|
|Other|3,629,363.44||
|Total|54,985,150.49|7,421,147.82|

 (2)Long-termequityinvestmentincomeaccountedbyequitymethod
Unit:RMBYuan
|||||
|-|-|-|-|
|Nameofinvestee|Reportingperiod|Sameperiodoflastyear|Reasonforincrease/decrease|

(3)Long-termequityinvestmentincomeaccountedbyequitymethod
Unit:RMBYuan
|||||
|-|-|-|-|
|Nameofinvestee|Reportingperiod|Sameperiodoflastyear|Reasonforincrease/decrease|
|ChongqingJingkangPlasticProductsCo.,Ltd.||-135,227.45||
|ShenzhenRefondOptoelectronicsCo.,Ltd.|9,643,568.48|10,947,152.73||
|EnrayTekOptoelectronic(Shanghai)Co.,Ltd.|-20,408,939.14|-8,607,053.27||
|ShanghaiKonkaGreenScienceandTechnologyCo.,Ltd.|-1,317,643.05|||
|Total|-12,083,013.71|2,204,872.01|--|

Notesofinvestmentincome:makenotesifthereissignificantlimitationforrecoveryofinvestmentincome.Ifthereisn’tthesaid limitation,notestoo:
62.Impairmentlosses
Unit:RMBYuan
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|I.Baddebtslosses|18,520,110.11|32,750,173.32|
|II.Inventoryfallingpricelosses|218,571,037.64|190,665,224.82|
|III. Impairment losses of available-for-sale financialassets|1,369,748.77||
|VII.Impairmentlossesoffixedassets|1,936,757.46||
|Total|240,397,653.98|223,415,398.14|

 63.Non-operatingincome
(1)Non-operatingincome
Unit:RMBYuan
|||||
|-|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|Theamountincludedinthecurrentnon-recurringgainsandlosses|
|Totalgainsfromdisposalofnon-currentassets|12,490,980.31|11,471,684.42|12,490,980.31|
|Including：Gainsfromdisposaloffixedassets|12,443,064.40|11,471,684.42|12,443,064.40|
|Gainsfromdisposalofintangibleassets|47,915.91||47,915.91|
|Governmentgrants|244,918,667.38|201,097,411.20|84,343,548.07|
|Incomefromcompensation|2,306,193.90|119,434.94|2,306,193.90|
|Incomefrompenalty|3,963,659.46|5,161,133.91|3,963,659.46|
|Total|10,894,964.20|5,447,396.09|10,894,964.20|

 Note:
(2)Governmentgrantsrecordedintonon-recurringgainsandlosses
||||||
|-|-|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|Relatedtoassets/relatedtoincome|Theamountbelongtothenon-recurringgainsandlossesornot|

R&Dsubsidy 18,068,190.84 6,740,000.04 relatedtoincome YES Specialfundsfortransformationand relatedtoincome YES 500,000.00
upgradeofprovincialindustryin2010
Equipmentengineering,technology relatedtoincome YES 5,900.00 3,510,000.00
grants
Transformationofspecialfunds 1,093,318.99 relatedtoincome YES Establishadigitaltelevisionreceiver relatedtoincome YES
1,466,666.63
DevelopmentCenter
Large-sizeLCDmodule(LCM) 2,400,000.00 2,400,000.00 relatedtoincome YES
2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|Relatedtoassets/relatedtoincome|Theamountbelongtothenon-recurringgainsandlossesornot|

 industrializationprojects
LCDmoduleequipmentmatchinggrants 3,510,000.00 relatedtoincome YES Socialsecuritysubsidies 444,000.00 3,323,700.00 relatedtoincome YES EmbeddedSoftwarerebates 160,575,119.31 121,644,719.15 relatedtoincome YES SMEdevelopmentfunds 5,061,200.00 relatedtoincome YES Financialdiscount 16,509,000.00 relatedtoincome YES Supportfunds 33,106,397.22 21,700,000.00 relatedtoincome YES Mechanicalandelectricalproductsand relatedtoincome YES 105,000.00 3,164,017.00
high-techaward
Exportcreditsubsidies 2,677,169.09 relatedtoincome YES Other 863,371.93 37,148,308.38 relatedtoincome YES Total 244,918,667.38 201,097,411.20
64.Non-operatingexpenses
Unit:RMBYuan
|||||
|-|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|Theamountrecordedinthecurrentnon-recurringgainsandlosses|
|Totallossesfromdisposalofnon-currentassets|14,360,857.36|5,295,347.37|14,360,857.36|
|Including：lossesfromdisposaloffixedassets|9,801,457.36|5,295,347.37|9,801,457.36|
|lossesfromdisposalofintangibleassets|4,559,400.00||4,559,400.00|
|Externaldonationexpenses|2,151,893.23|679,915.00|2,151,893.23|
|Penaltyexpenses|4,200,000.00||4,200,000.00|
|compensationexpenses|950,173.46|2,661,624.64|950,173.46|
|Other|1,354,737.03|2,618,297.93|1,354,737.03|
|Total|23,017,661.08|11,255,184.94|23,017,661.08|

 Note
65Incometaxexpense
Unit:RMBYuan
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|Incometaxofthecurrentyearcalculatedaccordingtothetaxlawandrelevantregulations|30,886,237.55|29,712,443.44|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|Adjustmentofdeferredincometax|91,330,727.23|16,675,066.36|
|Total|122,216,964.78|46,387,509.80|

 66.Basicearningspershareanddilutedearningspershare
For the Company, the basic earnings per share shall be calculated by dividing the current net profits belonging to the shareholders of ordinary shares by the weighted average number of ordinary shares issued to the public. In accordance with the specific terms and clauses of the issuance contract, the number of newly issued ordinary shares shallbe calculated and decided as of the date of receivable consideration (generally the date ofissuance of stocks).
BasedonnetprofitattributabletoordinaryshareholdersoftheCompanyofthecurrentyear,numeratorsofdiluted earnings per share shall be determined after adjusting the following factors: (1) Interests of diluted potential ordinary shares recognized as expenses at the current year; (2) Incomes or expenses arising from the transfer of dilutedpotentialordinaryshares;and(3)Incometaxinfluencerelatedtotheaforesaidadjustment.
Denominators ofdilutedearningspershareequaltothesumofthefollowingtwoitems:(1)Theweightedaverage number ofordinarysharesissuedbytheparentcompanyinbasic earningpershare;and(2)The weighted average number of ordinary shares which are newly added due to the transfer of the assumed diluted potential ordinary sharestoordinaryshares.
When calculating the weighted average number of increased ordinary shares resulted from that the diluted potential ordinary shares convert into ordinary shares already issued, the diluted potential ordinary shares issued in prior periods shall be supposed to be converted at the beginning of the current year. The diluted potential ordinarysharesissuedinthecurrentyearshallbesupposedtobeconvertedonthedateofissuance.
(1)Basicearningspershareanddilutedearningspershareofeachperiod
Reportingperiod Sameperiodoflastyear
Profitsofthereportingperiod
Basicearningper Dilutedearningsper Basicearningper
Dilutedearningspershare share share share
Netprofitattributableto
shareholderofordinary 0.0375 0.0375
0.0381 0.0381 sharesoftheCompany
Netprofitattributableto
shareholdersofordinary
sharesoftheCompanyafter -0.0573 -0.0573
-0.0449 -0.0449 deductingnon-recurring
gainsandlosses
(2)Processofcalculatingbasicearningspershareanddilutedearningspershare
In the reporting period, the Company did not hold diluted potential common shares, so diluted earnings per share equaledtobasicearningspershare.
①When basic earnings per share are being calculated, the net profits attributable to shareholders of ordinary sharesare:
Item Reportingperiod Sameperiodoflastyear
Netprofitsattributabletoshareholdersofordinarysharesof 45,163,004.10 45,829,234.02
2013AnnualReportofKonkaGroupCo.,Ltd.
Item Reportingperiod Sameperiodoflastyear thecurrentyear
Ofwhich:netprofitsattributabletosustainableoperation
45,163,004.10 45,829,234.02 Netprofitsattributabletoterminatedoperation
— — Netprofitsattributabletoshareholdersofordinarysharesof
theCompanyafterdeductingnon-recurringprofitsand
-69,014,834.39 -54,088,758.02 losses
Of which:netprofitsattributabletosustainableoperation
-69,014,834.39 -54,088,758.02 Netprofitsattributabletoterminatedoperation
— —③While basic earnings per share are being calculated, the denominator is the average weighted number of ordinarysharesissuedpublicly,andthecalculationisasthefollowing:
Item Reportingperiod Sameperiodoflastyear Ordinarysharespubliclyissuedatthebeginningof2013 1,203,972,704.00 1,203,972,704.00 Add: Weighted average number of ordinary shares issued in
— — 2013
Less: Weighted average number of ordinary share
— — repurchasedin2013
Weightedaveragenumberpubliclyissuedattheendof2013 1,203,972,704.00 1,203,972,704.00 67.Othercomprehensiveincome
Unit:RMBYuan
||||
|-|-|-|
|Item|Reportingperiod|Lastperiod|
|1.Profits/(losses)fromavailable-for-salefinancialassets|||
|Less: Effects on income tax generating fromavailable-for-salefinancialassets||77,717.88|
|Net amount transferred into profit and loss in the currentperiod that recognized into other comprehensive income inpriorperiod|843,428.16|310,871.50|
|Subtotal|843,428.16|-3,265,933.76|
|2. Interests in the investee entities’ other comprehensiveincomeasperequitymethod|1,142,186.16||
|Less: Effects on income tax generating from the interests inthe investee entities’ other comprehensive income as perequitymethod|1,142,186.16||
|Subtotal|1,711,635.85|2,925,239.19|
|4.Convertedamountofforeigncurrencyfinancialstatements|1,711,635.85|2,925,239.19|
|Subtotal|3,743,335.72|78,068.05|

2013AnnualReportofKonkaGroupCo.,Ltd.
Note:
68.NotesofCashFlowStatement
(1)Othercashreceivedrelevanttooperatingactivities
Unit:RMBYuan
|||
|-|-|
|Item|Amount|
|Incomefromgovernmentsubsidy|123,978,350.84|
|Currentaccounts|123,319,886.72|
|Bargainmoneyanddeposit|90,132,939.19|
|Interestincomefrombankdeposits|23,478,910.77|
|Incomefromwaste|6,461,866.93|
|Repaymentofindividualborrowing|20,520,135.64|
|Insuranceclaims|2,781,896.40|
|Temporaryreceivedrepairfund|1,037,073.05|
|Incomefromfineandpenalty|3,767,689.25|
|Other|6,303,726.76|

 Notes:
(2)Othercashpaidrelevanttooperatingactivities
Unit:RMBYuan
|||
|-|-|
|Item|Amount|
|Expenseforcashpayment|1,190,291,408.87|
|Paymentforpledges,guaranteeandrepair|101,147,705.36|
|Employeereservefund|20,726,535.43|
|Advancedpayment|29,766,245.65|
|Expenseforbankhandlingcharges|6,282,484.01|
|Donationexpense|2,104,543.76|
|Otherexpense|48,100,207.82|
|Compensationexpense|4,200,000.00|

 Note:
(3)Othercashreceivedrelevanttoinvestmentactivities
Unit:RMBYuan
|||
|-|-|
|Item|Amount|
|No|0.00|
|Total|0.00|

2013AnnualReportofKonkaGroupCo.,Ltd.
Note:
(4)Othercashpaidrelevanttoinvestmentactivities
Unit:RMBYuan
|||
|-|-|
|Item|Amount|
|No|0.00|
|Total|0.00|

Note:
(5)Othercashreceivedrelevanttofinancingactivities
Unit:RMBYuan
|||
|-|-|
|Item|Amount|
|ReceiptandreturnofpledgedRMBfixeddepositsuponmaturity|1,373,173,635.00|
|Total|1,373,173,635.00|

 Note:
(6)Othercashpaidrelevanttofinancingactivities
Unit:RMBYuan
|||
|-|-|
|Item|Amount|
|Depositofguaranteemoneyusedforpledge|513,255,989.02|
|Financeleasecharges|956,440.00|
|Total|514,212,344.46|

 Note:
69.SupplementalinformationforCashFlowStatement
(1)SupplementalinformationforCashFlowStatement
Unit:RMBYuan
||||
|-|-|-|
|Supplementalinformation|Reportingperiod|Lastperiod|
|1. Reconciliation of net profit to net cash flowsgeneratedfromoperations：|--|--|
|Netprofit|59,843,937.06|45,438,574.86|
|Add:Provisionforassetsimpairments|240,397,653.98|223,415,398.14|
|Depreciation of fixed assets, oil-gas assets andproductivebiologicalassets|140,310,489.85|141,070,764.07|
|Amortizationofintangibleassets|10,403,679.19|12,063,397.87|
|Amortizationoflong-termdeferredexpense|3,287,365.88|6,969,830.50|
|Losses/gainsondisposalofproperty,intangibleassetandotherlong-termassets(gains:negative)|1,869,877.05|-6,176,337.05|
|Losses/gains from variation of fair value (gains:|—|-22,101,173.97|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|negative)|||
|Financialcost(income:negative)|-35,590,849.10|90,694,675.34|
|Investmentloss(gains:negative)|-54,985,150.49|-7,421,147.82|
|Decreaseindeferredtaxassets(increase:negative)|92,174,937.15|16,393,923.66|
|Increaseindeferredtaxliabilities(decrease:negative)|-563,067.21|-807,501.87|
|Decreaseininventory(increase:negative)|476,670,024.99|-1,283,775,465.99|
|Decrease in accounts receivable from operatingactivities(increase:negative)|520,585,139.55|-25,594,622.96|
|Increase in accounts payable from operating activities(decrease:negative)|830,950,162.99|440,661,511.41|
|Others|—|9,923,259.23|
|Netcashflowfromoperatingactivities|2,285,354,200.89|-359,244,914.58|
|2.Significantinvestingandfinancingactivitieswithoutinvolvementofcashreceiptsandpayments|||
|3.Changeofcashandcashequivalent:|3,441,392.00|—|
|ClosingbalanceofCash|||
|Less:openingbalanceofcash|1,771,489,421.21|824,043,169.37|
|Cashandcashequivalents|824,043,169.37|646,451,050.70|

 (2) Relevant information of acquisition or disposal of subsidiaries and other operation entities in the reportingperiod
Unit:RMBYuan
||||
|-|-|-|
|Supplementalinformation|Reportingperiod|Sameperiodoflastyear|
|I.Relevantinformationonacquisitionofsubsidiariesandotheroperationentities:|--|--|
|II.Relevantinformationondisposalofsubsidiariesandotheroperationentities|--|--|
|1. Price of disposal of subsidiaries and other operationentities|69,398,100.00||
|2. Cash and cash equivalents received for disposal ofsubsidiariesandotheroperationentities|20,818,708.75||
|Less: cashandcashequivalentsofsubsidiariesandotherbusinessunitsheld|5,229,298.82||
|3. Net cash received from disposal of subsidiaries andotherbusinessunits|16,548,986.26|0.00|
|4.Disposalofthenetassetsofsubsidiaries|14,582,794.00||
|Currentassets|5,282,383.04||
|Non-currentassets|28,013,030.72||
|Currentliabilities|18,712,619.76||

(3)Constitutionofcashandcashequivalents
Unit:RMBYuan
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||
|-|-|-|
|I.Cash|1,771,489,421.21|824,043,169.37|
|Including:Cashonhand|18,884.53|1,861,577.93|
|Bankdepositondemand|1,771,470,536.68|822,181,591.44|
|Othermonetaryfundsondemand|1,771,489,421.21|824,043,169.37|

 Note:
70.Notestostatementofchangesinowners’equity
Notes on the items under “Other” for adjusting the opening balance and the relevant adjusted amounts as well as retrospectiveadjustmentarisingfrombusinesscombinationunderthesamecontrol,etc.:
VIII. Accounting treatmentofassets securitization
1.Maintradearrangements,accountingtreatmentandbankruptcyisolationtermsofassetssecuritization 2.Particulars ofmain partwithspecial purpose ofthe Company has no actualcontrolright but actualtake therisk
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Name|Closingtotalassets|Closingtotalliabilities|Closingnetassets|Operatingrevenueinthereportingperiod|Net profit inthe reportingperiod|Remark|

IX.Related Parties andRelated-party Transactions
1.InformationoftheparentcompanyoftheCompany
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Parentcompany|Relationship|BusinessType|Registeredplace|LegalRepresentative|Businessnature|RegisteredCapital|Theparentcompany'sshareholding(%)|Theparentcompany'svotingright(%)|TheultimatecontrollingpartyoftheCompany|OrganizationCode|
|OCTEnterprisesCo.|ParentcompanyoftheCompany|State-ownedholdings|Shenzhen||Tourism,realestateandelectronicindustry|6.3billion|19%|19%|SASAC|19034617-5|

Note:
2013AnnualReportofKonkaGroupCo.,Ltd.
2.InformationofsubsidiariesoftheCompany
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Fullname|Type|Businesstype|Registeredplace|Legalrepresentative|Businessnature|Registeredcapital|PercentageofShareholding(%)|Percentageofvotingright(%)|Organizationcode|
|ShenzhenKonkaTelecommunicationsTechnologyCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Shenzhen,Guangdong|LIHONGTAO|Manufacturingindustry|RMB12,000.00|100%|100%|70848057-2|
|ShenzhenKonkaVideo&CommunicationSystemsEngineeringCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Shenzhen,Guangdong|HEJIANJUN|Manufacturingindustry|RMB1,500.00|60%|60%|72858645-4|
|ShenzhenKonkaPrecisionMouldManufacturingCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Shenzhen,Guangdong|LOUYILIANG|Manufacturingindustry|RMB1,596.88|46.31%|52.49%|61881661-8|
|ShenzhenKonkaElectronicCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Shenzhen,Guangdong|HUANGZHONGTIAN|Salesofelectronicappliance|RMB830.00|51%|51%|61881678-1|
|ShenzhenKonkaInformationNetworkCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Shenzhen,Guangdong|NIUWEIDONG|Manufacturingindustry|RMB3,000.00|100%|100%|73416472-5|
|ShenzhenKonkaPlastic|Controllingsubsidiary|Limitedcompany|Shenzhen,Guangdo|SUNWENBO|Manufacturingindustry|RMB950.00|100%|100%|61881662-6|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|ProductsCo.,Ltd.|||ng|||||||
|ShenzhenKonkaLifeElectronicCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Shenzhen,Guangdong|HUANGZHONGTIAN|Manufacturingindustry|RMB4,200.00|100%|100%|70841244-9|
|ShenzhenKonkaElectronicFittingsTechnologyCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Shenzhen,Guangdong|NIUWEIDONG|Investmentholding|RMB6,500.00|100%|100%|793892132|
|MudanjiangArcticOceanAppliancesCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Mudanjiang,Huilongjiang|CHUAIRONGWEI|Manufacturingindustry|RMB6,000.00|60%|60%|606102861|
|ShanxiKonkaElectronicCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Xianyang,Shaanxi|SUZENGMENG|Manufacturingindustry|RMB6,950.00|60%|60%|623102302|
|Chongqing KonkaElectronicCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Chongqing|ZHANGXIAN|Manufacturingindustry|RMB4,500.00|60%|60%|621920985|
|ChongqingKonkaEurotomotiveElectronicCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Chongqing|ZENGHUI|Manufacturingindustry|RMB3,000.00|57%|57%|781559252|
|ChongqingQingjiaElectronicCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Chongqing|WANGXIAOYONG|Manufacturingindustry|RMB1,500.00|40%|40%|621921873|
|AnhuiKonkaElectronicCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Chuzhou,Anhui|GONGZHIPING|Manufacturingindustry|RMB14,000.00|78%|78%|61056872-8|
|AnhuiKonka|Controlling|Limitedcompany|Chuzhou,Anhui|WANGYOULAI|Manufacturingindustry|RMB7,8|96.46%|97.45%|748906347|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|ApplianceCo.,Ltd.|subsidiary|||||19.00||||
|ChangshuKonkaElectronicCo.,Ltd.KonkaElectronicCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Changshu,Jiangsu|WANGYOULAI|Manufacturingindustry|RMB2,465.00|60%|60%|62822347X|
|KunshanKonkaElectronicCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Kunshan,Jiangsu|HUANGZHONGTIAN|Manufacturingindustry|RMB35,000.00|100%|100%|68053275-5|
|DongguanKonkaElectronicCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Dongguan,Guangdong|HUANGZHONGTIAN|Manufacturingindustry|RMB26,667.00|100%|100%|61811698-8|
|DongguanKonkaPackingMaterialsCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Dongguan,Guangdong|LIYUNFEI|Manufacturingindustry|RMB1,000.00|100%|100%|72245604-2|
|DongguanKonkaMouldPlasticCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Dongguan,Guangdong|LOUYILIANG|Manufacturingindustry|RMB1,000.00|59.73%|59.73%|75109846-7|
|BoluoKonkaPCBCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Boluo，Guangdong|LINGAIKE|Manufacturingindustry|RMB4,000.00|51%|51%|72112128-3|
|BoluoKonkaPrecisionTechnologyCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Boluo,Guangdong|LINGAIKE|Manufacturingindustry|RMB1,500.00|100%|100%|79931620-8|
|Konka(Nanhai)DevelopmentCenter|Controllingsubsidiary|Privatenon-enterpriseunits|Foshan,Guangdong|LINGAIKE|Researchanddevelopment|RMB50.00|100%|100%|682430058|
|HongKong|Controlling|Limitedcompany|HongKong，|HUANGZHONG|Internationaltrade|HKD50.|100%|100%|—|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|KonkaCo.,Ltd.|subsidiary||China|TIAN||00||||
|KonkaHouseholdAppliancesInvestment&DevelopmentCo.,Ltd.|Controllingsubsidiary|Limitedcompany|HongKong,China|NIUWEIDONG|Investmentholding|HKD50.00|100%|100%|—|
|KonkaHouseholdAppliancesInternationalTradingCo.,Ltd.|Controllingsubsidiary|Limitedcompany|HongKong,China|NIUWEIDONG|Internationaltrade|HKD50.00|100%|100%|—|
|KONKAAMERICA,INC.|Controllingsubsidiary|Limitedcompany|TheUSA|CHANGDONG|Internationaltrade|USD100.00|100%|100%|—|
|Konka(Europe)Co.,Ltd.|Controllingsubsidiary|Limitedcompany|Frankfurt,Germany,Europe|CHANGDONG|Internationaltrade|EUR2.50|100%|100%|—|
|DongguanXutongdaMouldPlasticCo.,Ltd.|Controllingsubsidiary|Limitedcompany|DongguanGuangdong|XIANGTIANSHUN|Manufacturingindustry|RMB500.00|46.31%|52.49%|69649113-4|
|ShenzhenKonkaOptoelectronicTechnologyCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Shenzhenguangdong|LIGAIKE|Reserachanddevelopment|RMB1,000.00|100%|100%|557193938|
|ShenzhenWankaidaScienceand|Controllingsubsidiary|Limitedcompany|ShenzhenGuangdong|LIGAIKE|Softwaredevelopment|RMB1,000.00|100%|100%|557185057|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|TechnologyCo.,Ltd.||||||||||
|KunshanKangshengInvestmentDevelopmentCo.,Ltd.|Controllingsubsidiary|Limitedcompany|KunshanJiangsu|SUNWENBO|Propertyindustry|RMB35,000.00|100%|100%|55806907-4|
|AnhuiKonkaTongchuangHouseholdAppliancesCo.,Ltd.|Controllingsubsidiary|Limitedcompany|ChuzhouAnhui|XIAGUANGBEI|Manufacturingindustry|RMB18,000.00|100%|100%|559228110|
|IndonesiaKonkaElectronicsCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Indonesia|CHANGDONG|Internationaltrade|USD150.00|51%|51%|—|
|ShenzhenShushidaLogisticsServiceCo.,Ltd.|Controllingsubsidiary|Limitedcompany|ShenzhenGuangdong|NIUWEIDONG|Logistics|RMB1,000.00|100%|100%|587910870|
|BeijingKonkaElectronicCo.,Ltd.|Controllingsubsidiary|Limitedcompany|Beijing|CHENYUEHUA|Salesofhouseholdappliance|RMB3,000.00|100%|100%|590678654|
|KunshanJielunteMouldPlasticCo.,Ltd.|Controllingsubsidiary|Limitedcompany|KunshanJiangsu|LOUYILIANG|Manufacturingindustry|RMB10,000.00|46.31%|52.49%|576729443|
|WuhanJielunteMouldPlasticCo.,Ltd.|Controllingsubsidiary|Limitedcompany|WuhanHubei|LOUYILIANG|Manufacturingindustry|RMB3,000.00|46.31%|52.49%|06680713-0|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|ChuzhouJielunteMouldPlasticCo.,Ltd.|Controllingsubsidiary|Limitedcompany|ChuzhouAnhui|LOUYILIANG|Manufacturingindustry|RMB2,000.00|46.31%|52.49%|06247828-8|

3.Informationofjointventuresandassociatedenterprise
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Nameofinvestee|Businesstype|Registeredaddress|Legalrepresentative|Businessnature|Registeredcapital|Percentageofshareholding(%)|Percentageofvotingrights(%)|Relationship|Organizationcode|
|I.Jointventure||||||||||
|II.Associatedenterprise||||||||||
|ShenzhenRefondOptoelectronicsCo.,Ltd.|Limitedcompany|Shenzhen|GongWeibin|Manufacturing andsellingLEDs|RMB216,705,093.00|18.9%|18.9%|Jointventure|715266603|
|EnrayTekOptoelectronic(Shanghai) Co.,Ltd.|Limitedcompany|Shanghai|ZhangRujing|Manufacturing andsellingLEDs|USD50,000,000.00|36%|36%|Jointventure|560133557|
|ShenzhenKonkaEnergyTechnology Co.,Ltd.|Limitedcompany|Shenzhen|DongYaping|Newenergyproductsformobileequipment|RMB20,000,000.00|30%|30%|Undersamecontroller|715204357|
|ShenzhenKangElectronics Co.,Ltd.|Limitedcompany|||||||||
|ShanghaiKonkaGreenScienceandTechnolo|Limitedcompany|Shanghai|JiangXiaoyi|Manufacturing andsellingLEDs|RMB520,000,000.00|39%|39%|Jointventure|05933302-9|

2013AnnualReportofKonkaGroupCo.,Ltd.
||
|-|
|gy Co.,Ltd.|

4.InformationofotherrelatedpartiesoftheCompany
||||
|-|-|-|
|Nameofotherrelatedparty|RelationshipwiththeCompany|Organizationcode|
|ShenzhenOCTEastCo.,Ltd.|Underthesameactualcontroller|75252879-9|
|Shanghai OCTInvestment DevelopmentCo.,Ltd.|Underthesameactualcontroller|78589775-0|
|Chengdu Tianfu OCT IndustrialDevelopmentCo.,Ltd.|Underthesameactualcontroller|78012858-1|
|Beijing Century OCT Industrial Co.,Ltd.|Underthesameactualcontroller|74005033-7|
|TaizhouOCTCo.,Ltd.|Underthesameactualcontroller|79457788-X|
|Shanghai Tianxiang OCT InvestmentCo.,Ltd.|Underthesameactualcontroller|74805502-8|
|AnhuiHualiPackagingCo.,Ltd.|Underthesameactualcontroller|76276957X|
|Chongqing Machinery & ElectronicsHolding(Group)Co.,Ltd|Shareholderofsubsidiary|45041726-8|
|Shenzhen OCT Water and Power Co.,Ltd|Underthesameactualcontroller|19217869-7|
|ShanghaiHualiPackagingCo.,Ltd|Underthesameactualcontroller|60737971-5|
|ShenzhenHuayouPackagingCo.,Ltd|Underthesameactualcontroller|76198355-8|
|Shenzhen Huali Packing&TradingCo.,Ltd|Underthesameactualcontroller|61881654-6|
|HualiPackaging(Huizhou)Co.,Ltd.|Underthesameactualcontroller|68061271-2|
|HuizhouHualiPackagingCo.,Ltd.|Underthesameactualcontroller|79932011-9|
|Shenzhen Overseas Chinese Town GasStationCo.,Ltd.|Underthesameactualcontroller|70849783-3|
|DongyangyiIndustryCo.,Ltd|Shareholderofsubsidiary|—|
|Wuhan OCTIndustryDevelopment Co.,Ltd.|Underthesameactualcontroller|69531802-2|

Note：
5.Related-partytransactions
(1)Purchaseofgoodsandacceptanceofservice
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Related|Transactioncontent|Transaction|Reportingperiod|Sameperiodoflastyear|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||
|-|-|-|-|-|-|-|
|party||pricingprincipleanddecisionprocedure|Amount|Proportion(%)|Amount|Proportion(%)|
|ShenzhenRefondOptoelectronicsCo.,Ltd.|Purchasematerials|Negotiatedprice|130,709,658.36|2.18%|119,489,895.97|3.75%|
|AnhuiHualiPackagingCo.,Ltd.|Purchasematerials|Negotiatedprice|36,473,004.54|0.61%|31,538,527.60|0.99%|
|ShenzhenOCTWaterandPowerCo.,Ltd|Purchasematerials|Negotiatedprice|8,291,754.21|0.26%|9,920,708.72|0.31%|
|HualiPackaging(Huizhou)Co.,Ltd.|Purchasematerials|Negotiatedprice|14,463,872.70|0.24%|6,812,722.32|0.21%|
|HuizhouHualiPackagingCo.,Ltd.|Purchasematerials|Negotiatedprice|17,289.35|0%|6,663,933.09|0.21%|
|ShanghaiHuaLipackingCo.,Ltd.|Purchasematerials|Negotiatedprice|10,987,311.75|0.18%|13,234,080.07|0.41%|

Transactionsofsellingcommoditiesandprovidinglaborservices
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Relatedparty|Transactioncontent|Transactionpricingprincipleanddecisionprocedure|Reportingperiod||Sameperiodoflastyear||
||||Amount|Proportion(%)|Amount|Proportion(%)|
|ShanghaiOCTInvestmentDevelopmentCo.,Ltd.|SellingLCDs|Pricingthroughnegotiation|1,076,666.66|0.8%|||
|ShanghaiTianxiangOCTInvestmentCo.,Ltd.|SellingLCDs|Pricingthroughnegotiation|2,102,307.68|1.56|||
|ShenzhentheWindowsoftheworldCo.,Ltd.|SellingLCDs|Pricingthroughnegotiation|11,705,128.21|8.7%|||
|TianjinOCTIndustryCo.,Ltd.|SellingLCDs|Pricingthroughnegotiation|8,615,384.62|6.4%|||
|YunnanOCTIndustryCo.,Ltd.|SellingLCDs|Pricingthroughnegotiation|658,119.66|0.49%|||
|ShanghaiKonkaGreenLightingTechnologyCo.,Ltd.|SellingLCDsMaintenance|Pricingthroughnegotiation|9,789,844.96|6.16%|||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||
|-|-|-|-|-|-|-|
|Chengdu TianfuOCT IndustrialDevelopment Co.,Ltd.|SellingLCDs|Pricingthroughnegotiation|||324,786.32|0.34%|
|Taizhou OCT Co.,Ltd.|SellingLCDs|Pricingthroughnegotiation|||12,393.16|0.01%|
|OCT UrbanEntertainmentInvestmentCompany ofShenzhen|SellingLCDs|Pricingthroughnegotiation|||2,051,282.05|2.17%|
|Wuhan OCTIndustryDevelopment Co.,Ltd.|SellingLCDs|Pricingthroughnegotiation|||6,926,377.78|7.32%|
|Shenzhen OCTHotelCo.,Ltd.|SellingLCDs|Pricingthroughnegotiation|||1,188,034.19|1.25%|
|Shenzhen OCTMiddleSchool|SellingLCDs|Pricingthroughnegotiation|||982,905.98|1.04%|
|Shenzhen VeniceHotel|SellingLCDs|Pricingthroughnegotiation|||76,068.37|0.08%|
|Shenzhen OCTReal Estate Co.,Ltd.|SellingLCDs|Pricingthroughnegotiation|||48,717.95|0.05%|
|ShenzhenRefondOptoelectronicsCo.,Ltd.|SellingLCDs|Salesofmaterials|15,199,158.31|0.12%|2,563,222.23|2.71%|

(2)Relatedtrusteeship/contract
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Nameoftheentruster/contractee|Nameoftheentrustee/contractor|Type|Initialdate|Duedate|Pricing basis|Incomerecognizedinthereportingperiod|

 Particularsaboutentrust/contractee
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Nameoftheentruster/contractee|Nameoftheentrustee/contractor|Type|Initialdate|Duedate|Pricing basis|Chargerecognizedinthereportingperiod|

Note
2013AnnualReportofKonkaGroupCo.,Ltd.
(3)Informationofrelated-partylease
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Nameoflessor|Nameoflessee|Categoryoftheleasedassets|RentalsituationoftheCompanyInitialdate|Endingdate|Pricingbasisfortherentalincome|Rentalincomerecognizedinthereportingperiod|

 Informationofrelated-partyLessee
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Nameoflessor|Nameoflessee|Categoryoftheleasedassets|RentalsituationoftheCompanyInitialdate|Endingdate|Pricingbasisfortherentalincome|Rentalchargerecognizedinthereportingperiod|

 Note
(4)Informationofrelated-partyguarantee
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Guarantor|Securedparty|Guaranteeamount|Initialdate|Duedate|Whethertheguaranteewasaccomplishedornot|
|ShenzhenPrecision|Dongguanmoldplastic|4,631.00|October10,2013|April9,2014|No|
|AnhuiTongchuang|AnhuiElectric|2,750.00|September18,2013|September18,2016|No|
|KonkaGroupCo.,Ltd.|Communicationtechnology|80,000|December1,2013|December1,2014|No|
|KonkaGroupCo.,Ltd.|AnhuiTongchuang|41,000|June29,2013|June28,2014|No|
|KonkaGroupCo.,Ltd.|HongKongKonka|60,969|March14,2013|March13,2015|No|
|KonkaGroupCo.,Ltd.|HongKongKonka||March25,2013|March24,2015|No|
|KonkaGroupCo.,Ltd.|HongKongKonka||May22,2013|May21,2014|No|
|KonkaGroupCo.,Ltd.|HongKongKonka|121,938|May27,2013|May26,2014|No|
|KonkaGroupCo.,Ltd.|HongKongKonka||June7,2013|June8,2014|No|
|KonkaGroupCo.,Ltd.|HongKongKonka.||June27,2013|June26,2014|No|
|KonkaGroupCo.,Ltd.|HongKongKonka||July19,2013|July18,2014|No|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|KonkaGroupCo.,Ltd.|HongKongKonka|July19,2013|July18,2014|No|
|KonkaGroupCo.,Ltd.|HongKongKonka|July23,2013|July22,2014|No|
|KonkaGroupCo.,Ltd.|HongKongKonka|August26,2013|August25,2014|No|
|KonkaGroupCo.,Ltd.|HongKongKonka|September26,2013|September25,2014|No|
|KonkaGroupCo.,Ltd.|KonkaHouseholdAppliancesInternationalTrading|September27,2013|March26,2014|No|
|KonkaGroupCo.,Ltd.|KonkaHouseholdAppliancesInternationalTrading|October21,2013|April20,2014|No|

Note
(5)Inter-banklendingofcapitalofrelatedparties：
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Relatedparty|Amountborrowedandloaned|Initialdate|Duedate|Explanation|
|Borrowed|||||
|loaned|||||

(6)Relatedpartyassettransferanddebtrestructuring
Unit:RMBYuan
|||||||||
|-|-|-|-|-|-|-|-|
|Relatedparty|Type|Content|pricingprinciple|Reportingperiod||Sameperiodoflastyear||
|||||Amount|Proportion(%)|Amount|Proportion(%)|

 (7)Otherrelated-partytransactions
6.Receivablesandpayablesofrelatedparties
ReceivablesandpayablesofrelatedpartiesoflistedCompany
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Item|Relatedparty|Closingperiod||Openingperiod||
|||Bookbalance|Baddebtprovision|Bookbalance|Baddebtprovision|
|Accountreceivable|ShanghaiKonka|5,537,935.26|110,758.71|||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||
|-|-|-|-|-|-|
||GreenLightingTechnologyCo.,Ltd.|||||
|Accountreceivable|YunnanOctIndustrialCo.,Ltd|38,500.00|770.00|||
|Accountreceivable|ShanghaiTianxiangOCTInvestmentCo.,Ltd.|585,136.00|11,702.72|||
|Accountreceivable|ShanghaiOCTInvestmentDevelopmentCo.,Ltd.|743,700.00|14,874.00|||
|Accountreceivable|ShenzhentheWindowsoftheworldCo.,Ltd|2,821,500.00|56,430.00|||
|Accountreceivable|TianjinOCTIndustryCo.,Ltd.|3,024,000.00|60,480.00|||
|Accountreceivable|ChengduTianfuOCTIndustrialDevelopmentCo.,Ltd.|512.40|256.20|512.40|256.20|
|Accountreceivable|ShenzhenOCTHotelCo.,Ltd.|69,500.00|3,475.00|69,500.00|1,390.00|
|Accountreceivable|ShenzhenSplendidChinaDevelopmentCo.,Ltd|76,500.00|76,500.00|76,500.00|72,675.00|
|Accountreceivable|ShenzhenOCTEastInterlakenHotel|83,000.00|16,600.00|83,000.00|4,150.00|
|Accountreceivable|ShenzhenOCTEastCo.,Ltd|385,260.00|192,630.00|697,815.00|139,563.00|
|Accountreceivable|TaizhouOCTCo.,Ltd|||61,600.00|3,080.00|
|Accountreceivable|OCT UrbanEntertainmentInvestmentCompany ofShenzhen|||2,033,400.00|86,568.00|
|Accountreceivable|Wuhan OCTIndustryDevelopment Co.,Ltd.|||1,243,374.00|24,867.48|
|Notesreceivable|Shenzhen OCTEastCo.,Ltd|||115,200.00||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||
|-|-|-|-|-|-|
|||80,000.00|80,000.00|80,000.00|40,000.00|
|Otheraccountreceivable|ShenzhenOctGasStationCo.,Ltd.|1,209,064.86|1,128,337.25|1,209,064.86|1,066,916.68|
|Otheraccountreceivable|ShenzhenOCTRealEstateCo.,Ltd.|77,402.65|77,402.65|77,402.65|72,554.48|
|Otheraccountreceivable|ShenzhenOCTWaterandPowerCo.,Ltd.|1,069,029.14|213.81|348,938.41|6,978.77|

AccountpayableoflistedCompany
Unit:RMBYuan
|||||
|-|-|-|-|
|Item|Relatedparty|Closingamount|Openingamount|
|Accountspayable|AnhuiHualiPackagingCo.,Ltd.|7,040,802.15|4,344,588.65|
|Accountspayable|HualiPackaging(Huizhou)Co.,Ltd.|1,491,833.53|305,679.11|
|Accountspayable|ShenzhenRefondOptoelectronicsCo.,Ltd.|84,065.78|25,904,591.39|
|Accountspayable|ShanghaiHualiPackingCo.,Ltd.|1,623,863.52|3,237,533.41|
|Accountspayable|ShenzhenHualiPackingandTradingCo.,Ltd.|13,957.02|13,957.02|
|Accountspayable|ShenzhenDekonElectronicsCo.,Ltd.|356,545.32|356,545.32|
|Accountspayable|ChongqingJingkangplasticproductsLtd||202,407.08|
|Notespayable|AnhuiHualiPackaging(Huizhou)Co.,Ltd.|2,200,000.00|4,006,453.07|
|Notespayable|ShanghaiHualiPackingCo.,Ltd.||787,910.72|
|Notespayable|ShenzhenRefondOptoelectronicsCo.,Ltd.||20,446,665.90|
|Otheraccountspayable|ShanghaiHualiPackingCo.,Ltd.|130,000.00|480,000.00|

7.Thekeymanagementpersonnelcompensation
Annual remuneration range Current year Last year
Total 8,555,000 yuan 6,405,900 yuan Where: (all amounts range number)
Over 1 million yuan one —
0.5 to 1 million yuan 9 9
2013AnnualReportofKonkaGroupCo.,Ltd.
0.1 to 0.5 million yuan 2 1
Less than 0.1 million yuan 9 —
X. Stockpayment
1.TheStockpaymentoverallsituation
Unit:RMBYuan Note
2.TheStockpaymentsettledbyequity
Unit:RMBYuan Note
3.TheStockpaymentsettledbycash
Unit:RMBYuan Note
4.TheStockpaymentservice
Unit:RMBYuan 5.Modificationandterminationofthestockpayment
IX.Contingency
1.Contingentliabilitiesanditsfinancialeffectarisingfromunsettledlitigationorarbitration
1.Contingentliabilitiesandfinancialeffectscausedbypendinglitigationorarbitration
As of 19 Dec. 2007, the Design, Manufacture and Erection Contract for the Beijing Pangu Large-scale Outdoors Full-Color LED Display Screen (Turn-key Project) (hereinafter referred to as the “Contract Agreement”) was made by and between the subsidiary of Company-Shenzhen Konka Video& Communication Systems Engineering Co., Ltd., (hereinafter referred to as Shenzhen Konka Video& Communication) and Beijing Pangu Investment Co., Ltd. (hereinafter referred to as the “Pangu Company”), stipulating that the total project period shall be 120 days, the contracted budget price of total engineering payment shall be RMB 103,357,500. With six apartments, hotels and commercial houses of 3,707.70㎡ at a total price of RMB 103,357,500 located at Beisihuan M. Road, Chaoyang District, Beijing in pledge, Pangu Company and Konka Video& Communication entered into the Advance Sale for Beijing Commercial Building (hereinafter referred to as the “Advance Sale Contract”) numbered[Y581455],[Y581458],[Y581459],[Y581460],[Y581461] and[Y581462]. Meanwhile, both parties have entered into the SupplementaryAgreement with provisions as follows:① Beijing Pangu, prior to 30Mar.2009,shallpaythe totalconstructioncostamounting to RMB 103,357,500in a lump sum to Shenzhen
2013AnnualReportofKonkaGroupCo.,Ltd.
Konka Video& Communication.② If the conditions of terminating contract can not be met, Shenzhen Konka Video& Communicationhas the right to terminate orkeep fulfilling theAdvance Contract.③Termination of the AdvanceAgreement:Theagreementterminates automaticallywhere Beijing Pangu deposits the paymentof RMB 103,357,500 tothe accountof Shenzhen KonkaVideo& Communicationprior to 30 Mar.2009. Shenzhen Konka Video& Communication returns pledged apartments and receipts to Beijing Pangu and assists Beijing Pangu in canceling the AdvanceAgreement. The responsibilities and obligations of both parties arising from the Advance Agreementareterminated.
After the completion of the project, Shenzhen KonkaVideo&Communication delivered LED displays to Beijing Pangu in Jul. 2008 prior to the start of Beijing Olympic Games. In Mar. 2009, the project was accepted after the joint acceptance inspection by the involved engineering supervision entity, design entity, Beijing Pangu and Shenzhen Konka Video& Communication and Shenzhen Konka Video& Communication delivered all engineering documents to Beijing Pangu. Shenzhen Konka Video& Communication performed all its responsibilities under the agreement; however Beijing Pangu failed to perform its responsibilities. As of the date when the financial report was approved to issue, Shenzhen Konka Video& Communication did not receive the account receivable from Beijing Pangu amounting to RMB 103,357,500 and the Advance Agreement is not terminated.
Shenzhen Konka Video& Communication raised a civil litigation to Beijing HigherPeople’s Court on 13 Jul. 2009 and submitted an application for attachment at the same day to seal upApartment 1001, 1101, 1201, 1501, 1601and1701in Unit5andApartment1001,1101and901inUnit6in BeijingMogan7 Star PlazaatBeisihuan M. Road, Chaoyang District, Beijing or freeze properties or assets of the respondent, amounting to RMB 150,609,219.00.
On17Aug.2009,BeijingHigherPeople’sCourtissuedGMCZ(2009)No.4237CivilRulingPaperandsealedup thepropertyamountingtoRMB150,609,219ownedbyBeijingPangu.
After hearing, Beijing Higher People's Court consigned Beijing Price Certification Center to conduct the price identification for involved project. The certification center provided price certification conclusion paper on January 17, 2011, identifying objectcost of RMB 100,837,125.00Yuan.After the court opening for evidence, the certification center provided identified conclusion after adjustment on March 21. The conclusion is identifying that the object cost is RMB 99,396,113.73 Yuan according to the amount on volume method; the object cost is identified with RMB 103,274,987.25 Yuan according to the calculation of actual cost. OnApril 2, 2011, Beijing HigherPeople'sCourtheldacourtagainforcross-examinationwithadjustedidentificationconclusion.
BeijingHigherPeople’sCourtissuedon15May2012thefirstinstanceverdictasfollows:A.BeijingPanguInves tmentCo.,Ltd. shall,within 10daysafterthis verdicttakes effect,handoverthesixrealestateunitsoftheSeven StarMorganSquareApartmentslocatedontheNorth4thRingMiddleRoad,ChaoyangDistrict,Beijingunderthe CommercialHousePre-sale ContractofBeijing toShenzhen KonkaVideo& Communication Systems Engineeri ngCo.,Ltd..AndBeijingPanguInvestmentCo.,Ltd.shallhandletherealestate transferformalitiesforShenzhenKonkaVideo&CommunicationSystemsEngineeringCo.,Ltd.,with BeijingPanguInvestmentCo.,Ltd.bearing allthe expensesandtaxes arising from theseformalities. B. Otherclaims ofShenzhen KonkaVideo& Communi cationSystems Engineering Co.,Ltd. areoverruled. C.Other claims ofBeijingPangu Investment Co.,Ltd. areov erruled.
The two parties refused to accept the judgment and ruling of the first instance and appealed to the supremepeople’scourt.The supremepeople’s courtorganizedcollegialpanelandacceptedthecaseonNovember6,2012. (2012) MYZZ No. 85 paper of civil judgment was made on December 15, 2012 with the decision: rejecting the appealandaffirmingtheoriginaljudgment.
Pangu Company was dissatisfied with the decision and appealed it to the Supreme Court, but refused in January, 2013. In February, 2013, the Video Company applied for compulsory execution to the Court. Until the disclosure date of this report, the Company has received the property ownership certificates of above 6 buildings.According
2013AnnualReportofKonkaGroupCo.,Ltd.
totherecordofpropertyownershipcertificate,thetotalgrossfloorareasare4,029.30m2.AccordingtoProvisional Regulations of Land Value Increment Tax of thePeople’s Republic of China and Provisional Regulations of Business Tax of thePeople’s Republic of China, Video Company should pay the land value increment taxes, businesstaxesandothertaxesanddues.
(2)UrbanupdatingprojectsofKonkaheadquarterplant
According to the application proposed by the Company, Shenzhen Nanshan Reconstruction Office of Urban Village (old village) published Notice about the Subject of Implementation of Urban Updating Projects of Shenzhen Nanshan Konka Group Headquarter Plant in November, 2012 for the publicity of the subject of implementationofurbanupdatingprojectsofKonkaGroupheadquarterplant.
InAugust, 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 of Konka Headquarter Plant”.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 of Implementation of Urban Updating Projects of Konka Headquarter Plant in August, 2013 to stop the formalities of Konka Group headquarter plant and handle it after appropriate discussion between Overseas Chinese Town Group and the Company. After receiving the Comment Letter from Shenzhen Nanshan Reconstruction Office of Urban Village (old village), all urban updating formalitiesofKonkaheadquarterplanshavebeensuspendeduntilnow.
Hereafter,noagreementofKonkaGrouptobetheonlysubjectofimplementationoftheurbanupdatingprojects hasbeenreachedafterseveralnegotiations.
In order to resolve the differences and promote the implementation of urban updating projects of Konka headquarter plant, accordingto the 53rdmeeting of the7thBoard of Directors, theCompanydecidedto submit the dispute of Konka Group to be the only subject of implementation of the urban updating projects to Shenzhen CourtofInternationalArbitration.
On 10 Mar., 2014, the Company has applied to Shenzhen Court of InternationalArbitration for arbitration of the subjectofimplementationofurbanupdatingprojectofKonkaheadquarterplanttoregardOverseasChineseTown Group as the respondent and the Company as the only subject of implementation to develop the urban updating projectofShenzhenNanshanKonkaGroupheadquarterplant.
Untilthereleasedateofthisfinancialreport,ShenzhenCourtofInternationalArbitrationhasnotgivenaruling. The Company has decided to submit the dispute of the subject of Konka headquarter plant for arbitration. Relevant departments of Shenzhen agreed that the Company would pay the land funds of the urban updating projectsofKonkaheadquarterplantinadvance.
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 it is arbitrated that Konka Group would be the only subjectof the project, Konka Group should continue the project. If it is arbitrated that Konka has no rights to be the only subject of the project, Konka Group and Overseas Town should share the land funds according to negotiated cooperation developmentprogramandtransferformalitiesandsubmitsupplementarydevelopmentmaterials.
(3)TheCompany’s subsidiary,Shenzhen Konka Information Network Co., Ltd (hereinafter referred to as “Konka Company”)andShenzhenChampionMaxiumicGroupCo.,Ltd(hereinafterreferredtoas“ChampionCompany”) signed Memorandum of Understanding of Two-Way Set-Top-Box and supplementary agreements, Purchase Contractof RemoteControlandProcurementFramework ContractofSet-Top-Boxon5April,2012,1June,2012 and 3 July, 2012 respectively. It is contracted that Konka Company would purchase the set-top-box and remote control from Champion Company with load of RMB 5,822,250.00, including RMB 5,565,000.00 for set-top-box andRMB257,250.00forremotecontrol.
2013AnnualReportofKonkaGroupCo.,Ltd.
After several ineffective requirements for payment, Konka Group brought the lawsuit in Shenzhen NanshanPeople’s Court in November, 2013. It is to request Champion Company to pay the loan of RMB 5,565,000.00, interests of RMB 336,186.99 and to undertake the liabilities for breachof the contract. Konka could notbring the lawsuit ofProcurementContract of Remote Control becausethese disputes have been arbitrated.At the same day, itsubmittedtheapplicationforpropertypreservationtoseizetheaccountsofChampionCompany.
On 11 Mar., 2014, Shenzhen NanshanPeople’s Court opened the session to for conciliation between Konka Company and Champion Company. The conciliation statement issued by the Court regulated that Champion Company should pay the load of RMB 5,822,250.00 for the set-top box and remote control to Konka Company; thereinto10% should be paid to Konka before 31 Mar., 2014 and the rest and liquidated damages of RMB 6,020,025.00shouldbepaidbefore31May,2014.Atpresent,theconciliationstatementhascomeintoeffect. 2.Contingentliabilitiesanditsfinancialeffectarisingfromloanguaranteeofferedtoothercompanies Othercontingentliabilitiesandtheeffectsonfinancialaffairs
2.TheusageoftheL/C
ThetotalamountoftheCompanyopeningtheL/C wasequivalenttoRMB 2.599billionin2013,theamountpaid was RMB 2.047 billion, of which amount paid of L/C in 2012 was RMB 1.859 billion, the L/C opened in 2013 was 188 million, pending payment was equivalent to RMB 2.410 billion, of which including pending payment of RMB 2.410 billion to Konka Household Appliances International Trading. The pending payment excluded paymentthatwasduebutnon-requiredbythecounterpartyorcancelledones.
3.Othercontingentliabilitiesandtheeffectsonfinancialaffairs
Asof31Dec.2013,theGrouphadnoothersignificantcontingenteventsthatneedtobedisclosed.
XII. Commitments
1.Significantcommitments
(1)Commitmentsoncapital
Unit:RMBYuan Item Closingamount Openingamount
Largecontractawardingcontract 99,377,084.00 92,727,629.28 Total 99,377,084.00 92,727,629.28 (2)Commitmentsonoperationlease
Up to the date of Balance Sheet, details about irrevocable contract of operation lease that the Group signed with foreigncompaniesareasfollows:
Unit:RMBYuan Item Closingamount Openingamount
Thelowestpaymentofirrecoverableoperationlease:
Thefirstyearafterthebalancesheetdate
14,847,302.73 13,306,102.37 Thesecondyearafterthebalancesheetdate
10,295,864.04 6,966,504.38 Thethirdyearafterthebalancesheetdate
9,344,862.38 3,899,233.83
2013AnnualReportofKonkaGroupCo.,Ltd.
Thefollowingyears
8,757,379.65 3,079,767.80 Total
43,245,408.80 27,251,608.38 (3)Othercommitmentevents
Upto31Dec.2012,theCompanydidn’thaveothercommitmentsthatneedtobedisclosed.
2.Fulfillmentofpreviouscommitments
XIII. Events afterbalance sheetdate
1.Othersignificanteventsafterbalancesheetdate
Unit:RMBYuan
|||||
|-|-|-|-|
|Item|Content|Influenceonthefinancialpositionandoperatingresults|Inestimableinfluencereasons|

2.Profitdistributionafterbalancesheetdate
Unit:RMBYuan
|||
|-|-|
|Planningallocationofprofitsordividends|12,039,727.04|
|Profitsordividendsapproved,reviewedandissuebythedeclaration|12,039,727.04|

3. Notesofothersignificantevents
XIV. Othersignificantevents
1.Exchangeofnon-monetaryassets
2.Debtrestructuring
3.Businesscombination
Business combination in the reporting period, please referred to Note VI, Business combination and consolidated financialstatement
2013AnnualReportofKonkaGroupCo.,Ltd.
4.Lease
Lease
(1)Theclosing originalprice,accumulateddepreciationandaccumulatedimpairmentprovisionofallkinds ofthe rentedfixedassets.
Particularsofthefinancingleaseoftherentedfixedassets,pleaserefertonoteVII,17
(2)Minimumleasepaymentwillbepaidinfuture
Theremainingleaseterm Theminimumleasepayment
Within1year(including1year) 1,755,444.00
Within1yearand2years(including2years) 1,685,948.00
Total 1,755,444.00
(3) The balance of unrecognized financing charges, and the method used to allocate the unrecognized financing charges.
As of the balance sheet date, the balance of unrecognized financing charges was RMB319.417.87; amortization methodistheactualinterestratemethod.
Categoryoffixedassetsleasedbyoperatinglease,pleaserefertonoteVII,35
5.Financialinstrumentsissuedoutstandingandcanbeconvertedintoshares
6.Assetsandliabilitiesmeasuredbyfairvalue
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Item|Openingamount|Changesofgainsandlossesoffairvalueinthereportingperiod|Accumulativechangesoffairvalueincludedinequity|Withdrawnimpairmentinreportingperiod|Closingamount|
|Financialassets||||||
|3.Available-for-salefinancialassets|2,311,748.07|||1,369,748.77|941,999.30|
|Investmentproperty|0.00||||0.00|
|Biologicalassets|0.00||||0.00|
|Total|2,311,748.07|||1,369,748.77|941,999.30|
|Financialliabilities|0.00|0.00|0.00|0.00|0.00|

 7.Foreignfinancialassetsandfinancialliability
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Item|Openingamount|Changesofgains|Accumulative|Withdrawn|Closingamount|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||
|-|-|-|-|-|-|
|||andlossesoffairvalueinthereportingperiod|changesoffairvalueincludedinequity|impairmentinreportingperiod||
|Financialassets||||||
|Currencyfunds|211,970,684.67|—|—|—|317,287,073.45|
|Loansandreceivables|376,536,326.66|—|—|5,454,759.04|652,171,458.64|
|Prepayments|21,316,271.99|—|—|—|19,924,039.20|
|Subtotaloffinancialassets|609,823,283.32|—|—|—|989,382,571.29|
|Financialliabilities||||||
|Accountspayable|1,005,327,932.43|—|—|—|1,101,287,748.87|
|Subtotaloffinancialliabilities|1,005,327,932.43|—|—|—|1,101,287,748.87|

 8.Maincontentandmajorchangesofpensionplan
9.Other
Methodsofdeterminingbalanceofunconfirmedfinancialchargesandsharingunconfirmedfinancialcharges. Untilthedateofbalancesheet,balanceofunconfirmedfinancialchargeswasRMB319.417.87.Themethodof amortizationiscalculatedwitheffectiveinterestrate.
RefertoNote7,35forlendingfixedassets.
5.Inthecurrentperiod,MudanjiangKonka(formerArcticOceanElectricApplianceCo.,Ltd)hasbeenliquidated and not completed yet. The scale of operation of subsidiary was small and stagnated since 2011. The term of operation appointed in articles of association was expired on 8 Dec., 2012. Konka Group Co., Ltd is planned to inject new business to extend the term, but Mudanjiang State-Owned Assets Investment Holdings Co., Ltd disagreed with the term extension. Therefore, the Company set up the liquidation group for legal liquidation. all the assets of Arctic Ocean Electric Appliance Co., Ltd would be treated wholly by seeking assignee listed on HeilongjiangUnitedAssetsandEquityExchange.Theassettreatmenthaslessimpactforconsolidatedstatements. 6. On 5 April, 2013, the 40th meeting of the 7th Board of Directors decided to transfer38% equities of Kangrui International Development Co., Ltd held by the wholly-owned Hong Kong Konka of Konka Group to the wholly-owned subsidiary in Hong Kong established by Shanghai Konka Green Technology Game Co., Ltd. The transferpricewassubjecttoevaluatednetassetofKangruiInternationalDevelopmentCo.,Ltd.
7. On 31 Dec.,2013, the 51st meeting of the 7thBoard of Directors decided to assign the equities of Konka Group partially-ownedsubsidiaryheldbyShenzhenShangyongtongInvestmentDevelopmentCo.,Ltd. Itwasto transfer the49% equities of Buolo Konka Printed Board Co., Ltd held by Shangyongtong, transfer the40% equities of ShenzhenKonkaVideo& CommunicationSystems EngineeringCo.,Ltd heldbyShangyongtongandtransferthe49%equitiesofShenzhenKonkaElectricApplianceCo.,LtdheldbyShangyongtong.
2013AnnualReportofKonkaGroupCo.,Ltd.
XV.Notes of mainitems in thefinancialstatements oftheCompany
1.Accountsreceivable
(1)Accountsreceivable
Unit:RMBYuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Category|Closingbalance||||Openingbalance||||
||Bookbalance||Provisionforbaddebts||Balance||Provisionforbaddebts||
||Amount|Proportion(%)|Amount|Proportion(%)|Amount|Proportion(%)|Amount|Proportion(%)|
|Accountsreceivableforwhichbaddebtprovisionsaremadeonthegroupbasis|||||||||
|Aginggroup|1,726,375,307.32|98.28%|213,570,680.61|12.37%|1,439,080,437.54|99.77%|205,470,879.79|14.28%|
|Thecompanyrelatedpartygroup|30,245,849.96|1.72%|||3,323,422.60|0.23%|||
|Subtotalofthegroup|1,756,621,157.28|100%|213,570,680.61|12.16%|1,442,403,860.14|100%|205,470,879.79|14.25%|
|Total|1,756,621,157.28|--|213,570,680.61|--|1,442,403,860.14|--|205,470,879.79|--|

Notestocategoryofaccountsreceivable:
Naught
Accountsreceivablewithsignificantsingleamountandindividuallywithdrawnbaddebtprovisionatperiod-end□Applicable√Inapplicable
Inthegroups,accountsreceivableadoptingaginganalysismethodtowithdrawbaddebtprovision:
√Applicable□Inapplicable
Unit:RMBYuan
|||||||||
|-|-|-|-|-|-|-|-|
|Aging|Closingbalance||||Openingbalance|||
||Bookbalance||Baddebtprovision||Bookbalance||Baddebtprovision|
||Amount|Proportion(%)|||Amount|Proportion(%)||
|Within1year||||||||
|Ofwhich：|--|--||--|--|--|--|
|Within1year|1,503,542,564.48|87.09%||30,070,851.29|1,237,536,421.26|86%|25,296,267.23|
|Subtotalofwithin1year|1,503,542,564.48|87.09%||30,070,851.29|1,237,536,421.26|86%|25,296,267.23|
|1-2years|29,928,642.40|1.73%||1,496,432.12|17,433,776.51|1.21%|871,688.83|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||
|-|-|-|-|-|-|-|
|2-3years|11,179,817.35|0.65%|2,235,963.47|4,743,247.12|0.33%|948,649.42|
|3-4years|2,357,290.44|0.14%|1,178,645.22|1,556,408.29|0.11%|778,204.15|
|4-5years|1,556,408.29|0.09%|778,204.15|469,028.40|0.03%|234,514.20|
|Over 5years|177,810,584.36|10.3%|177,810,584.36|177,341,555.96|12.32%|177,341,555.96|
|Total|1,726,375,307.32|--|213,570,680.61|1,439,080,437.54|--|205,470,879.79|

Inthegroups,accountsreceivableadoptingbalancepercentagemethodtowithdrawbaddebtprovision:
□Applicable√Inapplicable
Inthegroups,accountsreceivableadoptingothermethodstowithdrawbaddebtprovision:
√Applicable□Inapplicable
Accountsreceivablewithsignificantsingleamountandindividuallywithdrawnbaddebtprovisionatperiod-end
□Applicable√Inapplicable
(2)Informationofaccountsreceivablereversedorrecoveredinthereportperiod
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Contentofaccountsreceivable|Reasonforreversalorrecovery|Basisonrecognitionofprovisionforbaddebts|Withdrawalamountofbaddebtprovisionbeforethereversalorrecovery|Reversedorrecoveredamount|

The withdrawal of bad debt provision of accounts receivable with significant single amount or insignificant single amount but individuallymadeimpairmenttestattheendofreportperiod:
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Contentofaccountsreceivable|Bookbalance|Amountofbaddebts|Withdrawalproportion(%)|Reason|
|Naught|0.00|0.00|0%||
|Total|0.00|0.00|--|--|

Notestoaccountsreceivablewithinsignificantsingleamountbutlargerisksofgroupsaftergroupingbycreditriskscharacteristics: There is no accounts receivable with insignificant single amount but large risks of groups after grouping by credit risks characteristicsattheendofyear.
(3)Particularsoftheactualverificationofaccountsreceivableduringthereportingperiod
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Nameoftheentity|Nature|Time|Amount|Reason|Whetheroccurredbecauseofrelatedpartytransactions|

Note：
(4) Particulars of accounts receivable due from the shareholders of the Company who held over5%
(including5%)shareswithvotingrightsduringthereportingperiod
2013AnnualReportofKonkaGroupCo.,Ltd.
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Nameofentity|Closingamount||Openingamount||
||Bookbalance|Amountofbaddebtprovision|Bookbalance|Amountofbaddebtprovision|
|Naught|0.00|0.00|0.00|0.00|
|Total|0.00|0.00|0.00|0.00|

 (5)Natureorcontentoflargeamountsofotherreceivables
(6)Topfiveaccountsreceivable
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Nameoftheentity|RelationshipwiththeCompany|Amount|Term|Proportion(%)|
|Client 1|Client|323,882,716.80|Withinoneyear|18.44%|
|Client 2|Client|242,937,142.62|Withinoneyear|13.83%|
|Client 3|Client|63,410,166.79|Withinoneyear|3.61%|
|Client 4|Client|36,030,106.50|Withinfiveyears|2.05%|
|Client 5|Client|29,726,517.02|Withinoneyear|1.69%|
|Total|--|695,986,649.73|--|39.62%|

 (7)Accountsreceivableduefromrelatedparties
Unit:RMBYuan
|||||
|-|-|-|-|
|Nameoftheentity|RelationshipwiththeCompany|Amount|Proportion(%)|
|HongKongkonkaCo.,Ltd.|TheCompany’s subsidiary|30,245,849.96|1.72%|
|ShanghaiKonkaGreenTechnologyCo.,Ltd|TheCompany’s subsidiary|137,398.57|0.01%|
|Total|--|30,383,248.53|1.73%|

 (8)
TransferamountofaccountreceivablenotconfirmtorecognitionwasRMB0.00
(9)Theassetsecuritizationuseaccountsreceivableasstandardshallbrieflyexplainrelatedarrangements（10）Foreigncurrencyreceivablesandamountsinoriginalcurrencyexchangeratesarepresented Unit:RMBYuan Item Closing Beginning
The amount of foreign Exchange The amount of Exchange
currency rate RMB foreign currency rate RMB
USD 13,872,319.74 6.0969 84,578,146.22 4,864,856.87 6.2855 30,578,057.86
2013AnnualReportofKonkaGroupCo.,Ltd.
Item Closing Beginning
The amount of foreign Exchange The amount of Exchange
currency rate RMB foreign currency rate RMB HK 914,592.71 0.78623 719,052.79 912,792.71 0.81085 740,137.97 AUD 49,764.00 5.4301 270,223.50 — — — 2.Otheraccountsreceivable
(1)Otheraccountsreceivable
Unit:RMBYuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Category|Closingbalance||||Openingbalance||||
||Bookbalance||Provisionforbaddebts||Bookbalance||Provisionforbaddebts||
||Amount|Proportion(%)|Amount|Proportion(%)|Amount|Proportion(%)|Amount|Proportion(%)|
|Otheraccountsreceivablewithsignificantsingleamountandindividuallywithdrawnbaddebtprovision|13,363,045.11|1.91%|13,363,045.11|100%|||||
|Otheraccountsreceivableforwhichbaddebtprovisionsaremadeonthegroupbasis|||||||||
|Aginggroup|174,127,894.50|24.88%|18,303,959.09|10.51%|317,395,991.27|39.9%|23,489,590.39|7.4%|
|Thecompanyrelatedpartygroup|512,473,249.36|73.21%|||449,192,126.18|56.47%|||
|Subtotalofthegroup|686,601,143.86|98.09%|18,303,959.09|2.67%|766,588,117.45|96.37%|23,489,590.39|6.83%|
|Otheraccountsreceivablewithinsignificantsingleamountbutindividuallywithdrawnbaddebtprovision|||||28,861,543.77|3.63%|28,861,543.77|100%|
|Total|699,964,188.97|--|31,667,004.20|--|795,449,661.22|--|52,351,134.16|--|

 Notes:
Naught
Otheraccountsreceivablewithsignificantsingleamountandindividuallywithdrawnbaddebtprovisionatperiod-end:
√Applicable□Inapplicable
Unit:RMBYuan
2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|Content|Bookbalance|Withdrawalproportion(%)|Baddebtprovision|Reasonforwithdrawal|
|ChongqingElectronic|13,363,045.11|13,363,045.11|100%|Stoppingproductionandunderdeficit|
|Total|13,363,045.11|13,363,045.11|--|--|

Inthegroups,otheraccountsreceivableadoptingaginganalysismethodtowithdrawbaddebtprovision:
√Applicable□Inapplicable
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Aging|Closingbalance|||Openingbalance|||
||Bookbalance||Provisionforbaddebts|Bookbalance||Provisionforbaddebts|
||Amount|Proportion(%)||Amount|Proportion(%)||
|Within1year|||||||
|Ofwhich：|--|--|--|--|--|--|
|Within1year|113,714,606.77|65.31%|2,274,292.14|272,689,657.12|85.91%|6,232,680.11|
|Subtotalofwithin1year|113,714,606.77|65.31%|2,274,292.14|272,689,657.12|85.91%|6,232,680.11|
|1-2years|42,699,523.20|24.52%|2,134,976.16|24,551,980.71|7.75%|1,227,599.04|
|2-3years|3,146,162.80|1.81%|629,232.56|2,169,712.26|0.68%|433,942.45|
|3-4years|1,466,512.94|0.84%|733,256.47|2,520,388.89|0.79%|1,260,194.45|
|4-5years|1,137,774.05|0.65%|568,887.03|2,258,155.90|0.71%|1,129,077.95|
|Over5years|11,963,314.74|6.87%|11,963,314.74|13,206,096.39|4.16%|13,206,096.39|
|Total|174,127,894.50|--|18,303,959.09|317,395,991.27|--|23,489,590.39|

 Inthegroups,otheraccountsreceivableadoptingbalancepercentagemethodtowithdrawbaddebtprovision:
□Applicable√Inapplicable
Inthegroups,otheraccountsreceivableadoptingothermethodstowithdrawbaddebtprovision:
√Applicable□Inapplicable
Otheraccountsreceivablewithsignificantsingleamountandindividuallywithdrawnbaddebtprovisionatperiod-end:
□Applicable√Inapplicable
(2)Informationofaccountsreceivablereversedorrecoveredinthereportperiod
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Contentofaccountsreceivable|Reasonforreversalorrecovery|Basisonrecognitionofprovisionforbaddebts|Withdrawalamountofbaddebtprovisionbeforethereversalor|Reversedorrecoveredamount|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
||||recovery||
|Chongqingkonka|EquityTransfer|significantsingleamountandindividuallywithdrawnbaddebtprovision|15,681,199.94|15,681,199.94|
|Total|--|--|15,681,199.94|--|

The withdrawal of bad debt provision of accounts receivable with significant single amount or insignificant single amount but individuallymadeimpairmenttestattheendofreportperiod:
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Contentofaccountsreceivable|Bookbalance|Amountofbaddebts|Withdrawalproportion(%)|Reason|

Notes to other accounts receivable with insignificant single amount but large risks of groups after grouping by credit risks characteristics:
(3)Particularsoftheactualverificationofotheraccountsreceivableduringthereportingperiod
Unit:RMBYuan
|||||||
|-|-|-|-|-|-|
|Nameoftheentity|Nature|Time|Amount|Reason|Whetheroccurredbecauseofrelatedpartytransactions|

 Note:
(4) Particulars of other accounts receivable due from the shareholders of the Company who held over5%(including5%)shareswithvotingrightsduringthereportingperiod
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Nameofentity|Closingamount||Openingamount||
||Bookbalance|Amountofbaddebtprovision|Bookbalance|Amountofbaddebtprovision|
|Naught|0.00|0.00|0.00|0.00|
|Total|0.00|0.00|0.00|0.00|

 (5)Natureorcontentoflargeamountsofotheraccountreceivables
(1) No other accounts receivable were due from the shareholders of the Company who held over5% (including5%)shareswithvotingrightsduringthereportingperiod.
(2) The total amount of top five other accounts receivable was RMB506, 726,014.03, occupying73.80% in other accountsreceivable.
(6)Topfiveotheraccountsreceivable
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Nameoftheentity|RelationshipwiththeCompany|Amount|Term|Proportion(%)|
|DongguanKonka|asubsidiaryofthe|138,091,465.63|Within1year|19.73%|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|ElectronicCo.,Ltd.|Company||||
|ShenzhenKonkaVideoSystemEngineeringCo.,|asubsidiaryoftheCompany|127,188,898.79|Within4year|18.17%|
|ShenzhenKonkaInformationNetworkCo.,Ltd.|asubsidiaryoftheCompany|103,737,084.04|Within1year|14.82%|
|BoroKonkaPrecisionTechnologyCo.,|asubsidiaryoftheCompany|78,214,533.74|Within5year|11.17%|
|OtherCompany|Non-relatedparties|62,894,650.00|Within1year|8.99%|
|Total|--|510,126,632.20|--|72.88%|

 (7)Otheraccountsreceivablefromrelatedparties
Unit:RMBYuan
|||||
|-|-|-|-|
|Nameofentity|RelationshipwiththeCompany|Amount|Percentageintotalotheraccountreceivables(%)|
|DongguanKonka|SubsidiaryoftheCompany|138,091,465.63|19.73%|
|Video&CommunicationSystemsEngineering|SubsidiaryoftheCompany|127,188,898.79|18.17%|
|InformationNetwork|SubsidiaryoftheCompany|103,737,084.04|14.82%|
|BoluoPrecision|SubsidiaryoftheCompany|78,214,533.74|11.18%|
|BoluoKonka|SubsidiaryoftheCompany|22,047,530.15|3.15%|
|DongguanMouldPlastic|SubsidiaryoftheCompany|13,858,261.27|1.98%|
|ChongqingElectronic|SubsidiaryoftheCompany|13,363,045.11|1.91%|
|KonkaElectronic|SubsidiaryoftheCompany|10,105,607.33|1.45%|
|MudanjiangKonka|SubsidiaryoftheCompany|4,054,879.17|0.58%|
|BeijingKonkaElectronics|SubsidiaryoftheCompany|15,600.00|0|
|ShenzhenOCTRealEstateCo.,Ltd.|Thesameactualcontrollers|1,209,064.86|0.17%|
|Shushida|SubsidiaryoftheCompany|1,148,314.79|0.16%|
|ShenzhenOctWaterAndPowerCo.,Ltd|Thesameactualcontrollers|1,069,029.14|0.15%|
|TheSouthChinaSeaInstitute|SubsidiaryoftheCompany|648,029.34|0.09%|
|ShenzhenOCTGasStationCo.,Ltd.|Thesameactualcontrollers|80,000.00|0.01%|
|ShenzhenOCTPropertyServiceCo.,Ltd.|Thesameactualcontrollers|77,402.65|0.01%|
|Total|--|514,908,746.01|73.56%|

(8)
TransferamountofotheraccountreceivablenotconfirmtorecognitionwasRMB0.00
2013AnnualReportofKonkaGroupCo.,Ltd.
(9) The asset securitization use other accounts receivable as standard shall briefly explain related arrangements
3.Long-termequityinvestments
(1)Classificationoflong-termequityinvestment
Unit:RMBYuan Item Opening balance Increase Decrease Closing balance Investments in subsidiaries
1,584,259,154.56 — 27,000,000.00 1,557,259,154.56 Investment in joint ventures
— — — - Investment in associates
202,800,000.00 — 1,317,643.05 201,482,356.95 Other equity investments
12,838,000.00 — — 12,838,000.00 Less: Provision for
impairment of long-term
106,179,984.69 17,100,000.00 27,000,000.00 96,279,984.69 equity investments
Total
1,693,717,169.87 — — 1,675,299,526.82 (2)Detailsoflong-termequityinvestments
Unit:RMBYuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Theinvestee|Accountingmethod|Initialinvestmentcost|Openingbalance|Increase/decrease|Closingbalance|ShareholdingProportion|VotingrightProportion|Explanationsondifferencesbetweenshareholdingproportionandvotingrightproportion|Provisionforimpairmentloss|Withdrawalamountofimpairmentprovisioninthereportingperiod|Cashbonusinthereportingperiod|
|MudanjiangKonka|Costmethod|36,000,000.00|36,000,000.00||36,000,000.00|60%|60%|—|36,000,000.00|||

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|ShaanxiKonka|Costmethod|44,869,809.80|44,869,809.80||44,869,809.80|60%|60%|—||
|AnhuiKonka|Costmethod|122,780,937.98|122,780,937.98||122,780,937.98|78%|78%|—||
|DongguanKonka|Costmethod|274,783,988.91|274,783,988.91||274,783,988.91|100%|100%|—||
|HongKongKonka|Costmethod|781,828.61|781,828.61||781,828.61|100%|100%|—||
|ChongqingKonka|Costmethod|27,000,000.00|27,000,000.00|-27,000,000.00|0.00|60%|60%|—||
|AnhuiHouseholdAppliances|Costmethod|5,278,509.85|5,278,509.85||5,278,509.85|6.55%|97.45%|见注①||
|KonkaEurope|Costmethod|261,482.50|261,482.50||261,482.50|100%|100%|—||
|NanhaiKonka|Costmethod|500,000.00|500,000.00||500,000.00|100%|100%|—||
|KunshanKonka|Costmethod|350,000,000.00|350,000,000.00||350,000,000.00|100%|100%|—||
|PlasticProducts|Costmethod|4,655,000.00|4,655,000.00||4,655,000.00|100%|100%|—||
|KonkaHouseholdAppliances|Costmethod|10,732,484.69|10,732,484.69||10,732,484.69|51%|51%|—|10,732,484.69|
|TelecommunicationTechnology|Costmethod|90,000,000.00|90,000,000.00||90,000,000.00|75%|100%|见注②||
|Konka|Cost|8,062,|8,062,||8,062,|100%|100%|—|8,062,|

2013AnnualReportofKonkaGroupCo.,Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|America|method|500.00|500.00|500.00||||500.00||
|InformationNetwork|Costmethod|22,500,000.00|22,500,000.00|22,500,000.00|100%|100%|—|22,500,000.00||
|Shushida|Costmethod|31,500,000.00|31,500,000.00|31,500,000.00|100%|100%|—|||
|Video&CommunicationSystemsEngineering|Costmethod|9,000,000.00|9,000,000.00|9,000,000.00|60%|60%|—|||
|ChongqingElectronic|Costmethod|17,100,000.00|17,100,000.00|17,100,000.00|57%|57%|—|17,100,000.00|17,100,000.00|
|FittingsTechnology|Costmethod|48,750,000.00|48,750,000.00|48,750,000.00|100%|100%|—|||
|KunshanKangsheng|Costmethod|350,000,000.00|350,000,000.00|350,000,000.00|100%|100%|—|||
|AnhuiTongchuang|Costmethod|69,702,612.22|69,702,612.22|69,702,612.22|100%|100%|见注③|||
|KonkaOptoelectronic|Costmethod|10,000,000.00|10,000,000.00|10,000,000.00|100%|100%|—|||
|Wankaida|Costmethod|10,000,000.00|10,000,000.00|10,000,000.00|100%|100%|—|||
|FeihongElectronics|Costmethod|1,300,000.00|1,300,000.00|1,300,000.00|8.33%|8.33%|—|1,300,000.00||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|Co.,Ltd.|||||||||
|ShenzhenAssociation ofEnterpriseswithForeignInvestment|Costmethod|100,000.00|100,000.00|100,000.00|8.33%|8.33%|—|100,000.00|
|ShenzhenMake-planInvestmentDevelopmentCo.,Ltd.|Costmethod|485,000.00|485,000.00|485,000.00|1%|1%|—|485,000.00|
|IGRSInformationTechnologyEngineeringCenterCo.,Ltd.|Costmethod|5,000,000.00|5,000,000.00|5,000,000.00|9.62%|9.62%|—||
|ShenzhenCTUHi-techLtd.|Costmethod|1,153,000.00|1,153,000.00|1,153,000.00|11.5%|11.5%|—||
|ShenzhenDigitalTVNationalEngineering|Costmethod|2,400,000.00|2,400,000.00|2,400,000.00|6%|6%|—||

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|LabCo.,Ltd.|||||||||||
|ShanghaiDigitalTVNationalEngineeringR&DCenterCo.,Ltd.|Costmethod|2,400,000.00|2,400,000.00||2,400,000.00|4.26%|4.26%|—|||
|BeijingKonkaElectronic|Costmethod|30,000,000.00|30,000,000.00||30,000,000.00|100%|100%|—|||
|ShenzhenShushidaLogisticsServiceCo.,Ltd.|Costmethod|10,000,000.00|10,000,000.00||10,000,000.00|100%|100%|—|||
|ShanghaiKonkaGreenScienceandTechnologyCo.,Ltd.|Equitymethod|202,800,000.00|202,800,000.00|-1,317,643.05|201,482,356.95|39%|39%|—|||
|Total||1,799,897,154.56|1,799,897,154.56|-28,317,643.05|1,771,579,511.51|--|--|--|96,279,984.69|17,100,000.00|

Notes:① stakeinconsistentreasonsdetailedinnote6.
②TheCompanyholdsCommunicationTechnologyfor75%equity,theCompanyindirectlyheldbyKangCommunication
2013AnnualReportofKonkaGroupCo.,Ltd.
Technology25%stakeinsubsidiarypowerinvestment.
③ stakeinconsistentreasonsdetailedinnote6.
（3）Long-termequityinvestmentimpairmentBreakdown
Unit: RMB Yuan Item Opening balance Increase Decrease Closing balance .Investmentsinsubsidiaries
MudanjiangArcticElectricCo.,Ltd 36,000,000.00
— — 36,000,000.00 ShenzhenKonka ApplianceCo.,
10,732,484.69
Ltd. — — 10,732,484.69 KONKAAMERICA,INC. 8,062,500.00
— — 8,062,500.00 ShenzhenKonkaInformation
22,500,000.00
NetworkCo.,Ltd. — — 22,500,000.00 ChongqingKonkaElectronicsCo.,
27,000,000.00 - Ltd. — 27,000,000.00
ChongqingKonkaAutomotive
ElectronicsCo.,Ltd., — 17,100,000.00 — 17,100,000.00 Otherlong-termequityinvestments
FeihongElectronicsCo.,Ltd. 1,300,000.00
— — 1,300,000.00 ShenzhenAssociationofEnterprises
withForeignInvestment 100,000.00 — — 100,000.00 ShenzhenMake-planInvestment
DevelopmentCo.,Ltd. 485,000.00 — — 485,000.00 Total 106,179,984.69
17,100,000.00 27,000,000.00 96,279,984.69 Note:① Chongqing Konka Automotive Electronics Co., Ltd. is currently basically stopped production and management , insolvency, there are significant uncertainties in the future operations at December 31, 2013 , the Company's long-term equity investments held by the Company in Chongqing Konka count automotive electronics provision for impairment of RMB17,100,000.00.
② in October 2013 , the Company transferred the holdings of Chongqing Konka Electronics Co., Ltd.60% stake , turn out the corresponding long-term equity investment cost of RMB 27,000,000.00 , corresponding write-off of long-term equity investment impairment ofRMB 27,000,000.00.August 14,2013,theCompanyand ChongqingMachineryandElectronicHolding( Group)
Company ( hereinafter referred to as " Chongqing Machinery " ) entered into a " state-owned Chongqing Konka Electronics Co.
2013AnnualReportofKonkaGroupCo.,Ltd.
equitytransfercontract",theCompanywillhold60%stakeinChongqingKonka(hereinafterreferredtoas"theunderlyingequity ")and1,559.343183tenthousandyuandebttransferredtoChongqingMachinery.Underlyingequitypriceof69.3981millionyuan,thetotaltransferpriceisRMB,499.343183million.ChongqingMachinery30%ofthetransferpricehasbeenpaidtothecompany,20%ofthetransferpriceatthedateofthecontractispaidwithinsixmonths,theremaining50%atthedateofsigningthecontractbe paidwithinoneyear .Transferpricetopayfor theprotection,electromechanical itsunderlyingequitytransfer priceofChongqing transferee deferred payment for providing collateral security and the underlying equity transfer 10 working days to complete the registrationofthepledge.Asoftheapprovaldateofthefinancialstatements,thepledgehasnotbeenreleased.
4.Revenuesandoperatingcosts
(1)Revenuesandoperatingcosts
Unit:RMBYuan
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|Revenuesfrommainoperations|15,819,472,336.00|14,871,176,606.68|
|Revenuesfromotheroperations|5,269,237,253.78|4,023,887,805.91|
|Totalrevenues|21,088,709,589.78|18,895,064,412.59|
|Operatingcosts|18,567,798,472.02|16,498,564,931.61|

 (2)Mainoperations(byindustries)
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Industry|Reportingperiod||Sameperiodoflastyear||
||Revenues|Operatingcosts|Revenues|Operatingcosts|
|Electronicindustry|15,819,472,336.00|13,338,793,198.72|14,871,176,606.68|12,500,370,919.06|
|Total|15,819,472,336.00|13,338,793,198.72|14,871,176,606.68|12,500,370,919.06|

 (3)Mainoperations(byproducts)
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Industry|Reportingperiod||Sameperiodoflastyear||
||Revenues|Operatingcosts|Revenues|Operatingcosts|
|ColorTVbusiness|15,073,485,116.68|12,640,961,692.41|13,875,900,266.20|11,576,603,266.66|
|Consumerappliancesbusiness|515,704,902.62|470,243,720.69|712,234,677.57|645,759,172.19|
|Others|230,282,316.70|227,587,785.62|283,041,662.91|278,008,480.21|
|Subtotal|15,819,472,336.00|13,338,793,198.72|14,871,176,606.68|12,500,370,919.06|

 (4)Mainoperations(byregions)
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Region|Reportingperiod||Sameperiodoflastyear||
||Revenues|Operatingcosts|Revenues|Operatingcosts|
|Domesticsales|13,869,592,951.66|11,431,518,777.48|12,703,553,913.40|10,352,348,667.45|

2013AnnualReportofKonkaGroupCo.,Ltd.
||||||
|-|-|-|-|-|
|Overseassales|1,949,879,384.34|1,907,274,421.24|2,167,622,693.28|2,148,022,251.61|
|Subtotal|15,819,472,336.00|13,338,793,198.72|14,871,176,606.68|12,500,370,919.06|

 (5)Revenuesfromthetopfivecustomers
Unit:RMBYuan Total operating income of the top Same period the proportion of total Period
five customers revenue(%)
2013 3,020,221,085.16 14.32 2012 3,165,357,399.54 16.75 Note:
5.Investmentincome
(1)Listofinvestmentincome
Unit:RMBYuan
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|Long-term equity investment income accounted by costmethod||118,578,038.03|
|Long-term equity investment income accounted by equitymethod|-1,317,643.05||
|Investment income arising from disposal of long-termequityinvestments|69,398,100.00|91,013.92|
|Investmentincomereceivedfromholdingofheld-to-maturityinvestments||24,475,699.99|
|Investmentincomereceivedfromholdingofavailable-for-salefinancialassets|21,115.80|15,250.30|
|Investmentincomearisingfromdisposaloflong-termequityinvestments||5,110,011.59|
|Other|32,914,101.74||
|Total|101,015,674.49|148,270,013.83|

 (2)Long-termequityinvestmentincomeaccountedbycostmethod
Unit:RMBYuan
|||||
|-|-|-|-|
|Nameofinvestee|Reportingperiod|Sameperiodoflastyear|Reasonforincrease/decrease|
|Anhuikonka|0.00|118,578,038.03||
|Total|0.00|118,578,038.03|--|

2013AnnualReportofKonkaGroupCo.,Ltd.
(3)Long-termequityinvestmentincomeaccountedbyequitymethod
Unit:RMBYuan
|||||
|-|-|-|-|
|Nameofinvestee|Reportingperiod|Sameperiodoflastyear|Reasonforincrease/decrease|
|ShanghaiKonkaGreenTechnologyCo.,Ltd.|-1,317,643.05||-|
|Total|-1,317,643.05||--|

Note:
6.SupplementalinformationforCashFlowStatement
Unit:RMBYuan
||||
|-|-|-|
|Supplementalinformation|Reportingperiod|Sameperiodoflastyear|
|1. Reconciliation of net profit to net cash flows generated fromoperations：|--|--|
|Netprofit|206,172,587.59|179,832,117.22|
|Add:Provisionforassetsimpairments|148,223,458.29|121,009,956.25|
|Depreciation of fixed assets, oil-gas assets and productivebiologicalassets|34,858,418.28|38,014,032.20|
|Amortizationofintangibleassets|3,121,324.44|3,070,981.48|
|Amortizationoflong-termdeferredexpense|1,100,461.47|2,030,310.49|
|Losses/gainsondisposalofproperty,intangibleassetandotherlong-termassets(gains:negative)|-6,152,380.03|-6,385,300.67|
|Losses/gainsfromvariationoffairvalue(gains:negative)||-21,760,628.97|
|Financialcost(income:negative)|-24,168,683.27|65,916,491.95|
|Investmentloss(gains:negative)|-101,015,674.49|-148,270,013.83|
|Decreaseindeferredtaxassets(increase:negative)|40,270,943.81|26,422,790.05|
|Increaseindeferredtaxliabilities(decrease:negative)||-807,501.87|
|Decreaseininventory(increase:negative)|507,554,337.19|-746,579,065.28|
|Decrease in accounts receivable from operating activities(increase:negative)|469,885,904.50|-232,226,027.97|
|Increase in accountspayable from operating activities (decrease:negative)|1,463,166,904.93|-1,492,489,888.57|
|Others||4,250,809.29|
|Netcashflowfromoperatingactivities|2,743,017,602.71|-2,207,970,938.23|
|2.Significantinvestingandfinancingactivitieswithoutinvolvementofcashreceiptsandpayments|--|--|
|3.Changeofcashandcashequivalent:|--|--|
|ClosingbalanceofCash|1,117,689,643.16|365,891,615.75|
|Less:openingbalanceofcash|365,891,615.75|275,892,342.99|
|Cashandcashequivalents|751,798,027.41|89,999,272.76|

2013AnnualReportofKonkaGroupCo.,Ltd.
7.Assetsandliabilitiesrecordedbyassessedvalueundercounterpurchase
Assetsandliabilitiesrecordedbyfairvalueundercounterpurchase
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|Fairvalue|Determinemethod|Computationalprocess|Originalbookvalue|

 Long-termequityinvestmentformedbycounterpurchase
Unit:RMBYuan
||||
|-|-|-|
|Item|Amount|Computationalprocess|

XVI. Supplemental information
1.Itemsandamountsofextraordinarygainsandlosses
Unit:RMBYuan
||||
|-|-|-|
|Item|Amount|Note|
|Gains/losses on the disposal of non-current assets (includingtheoffsetpartofassetimpairmentprovisions)|61,547,807.91||
|Tax rebates, reductions or exemptions due to approval beyondauthorityorthelackofofficialapprovaldocuments|84,343,548.07||
|Gain/lossonnon-monetaryassetswap|-1,041,162.02||
|Gainsandlossesonchangeinfairvaluefromtradablefinancialassetsandtradablefinancialliabilities,aswellasinvestmentincomefromdisposaloftradablefinancialassetsandtradablefinancialliabilitiesandfinancialassetsavailableforsalesexceptforeffectivehedgingrelatedwithnormalbusinessesoftheCompany|21,115.80||
|Othernon-operatingincomeandexpensesotherthantheabove|8,508,013.84||
|Less:Incometaxeffects|-1,369,748.77||
|Minorityinterestseffects(aftertax)|31,336,650.82||
|Total|6,495,085.52||

Thegovernmentsubsidyrecordedintocurrentprofitsorlosseswascurrentprofitsorlosses,shallbedisclosedtherecognitionreason onebyone.
√Applicable□Inapplicable
||||
|-|-|-|
|Item|Involvedamount(RMB)|Reason|
|EmbeddedsoftwarethatisoutofVAT|160,575,119.31|GovernmentsubsidiescloselyrelatedwiththeCompany'snormalbusinessoperations,isinlinewithnationalpolicy,accordingtocertainstandardquotaorquantitativecontinuestoenjoy.|

2013AnnualReportofKonkaGroupCo.,Ltd.
2.Differencesbetweenaccountingdataunderdomesticandoverseasaccountingstandards
(1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chineseaccountingstandards
Unit:RMBYuan
||||||
|-|-|-|-|-|
||NetprofitattributabletoshareholdersoftheCompany||NetassetsattributabletoshareholdersoftheCompany||
||2013|2012|Closingamount|Openingamount|
|AccordingtoChineseaccountingstandards|45,163,004.10|45,829,234.02|4,080,458,151.63|4,043,591,538.85|
|Itemsandamountsadjustedaccordingtointernationalaccountingstandards|||||

(2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chineseaccountingstandards
Unit:RMBYuan
||||||
|-|-|-|-|-|
||NetprofitattributabletoshareholdersoftheCompany||NetassetsattributabletoshareholdersoftheCompany||
||2013|2012|Closingamount|Openingamount|
|AccordingtoChineseaccountingstandards|45,163,004.10|45,829,234.02|4,080,458,151.63|4,043,591,538.85|
|Itemsandamountsadjustedaccordingtointernationalaccountingstandards|||||

(3) Explain reasons for the differences between accounting data under domestic and overseas accounting standards
Nodifferencefor2013
3.Returnonequityandearningspershare
Unit:RMBYuan
|||||
|-|-|-|-|
|Profitinthereportingperiod|TheweightedaverageROE(%)|EPS||
|||BasicEPS|DilutedEPS|
|NetprofitattributabletotheCompany'scommonstockshareholders|1.11%|0.0375|0.0375|
|Afterdeductingnon-recurringgainsandlossesattributabletoordinaryshareholdersofthecompany'snetprofit|-1.70%|-0.0573|-0.0573|

4. Particulars on the abnormal conditions of main items in the financial statements of the Company and
relevantreasons
1.Itemsofbalancesheet:
2013AnnualReportofKonkaGroupCo.,Ltd.
(1) Year-end balance of account receivable on 31 Dec., 2013 was RMB 2,511,800,652.45, reduced by27.14% compared with opening amountof theyear.The primary reasonwas theincrease ofbalanceof accountreceivable resultedbyincreaseofcurrentincome.
(2) Year-end balance of account receivable on 31 Dec., 2013 was RMB 2,898,419.90, reduced by59.59% comparedwithopeningamountoftheyear.Theprimaryreasonwasthereductionofcurrentpledgeddeposits. (3) Year-end balance of financial assets available-for-sale on 31 Dec., 2013 was RMB 941,999.30, reduced by20.65% compared with opening amount of the year. The primary reason was the impairment of current financial assetsavailable-for-sale.
(4) Year-end balance of intangible assets on 31 Dec., 2013 was RMB 359,585,571.12, increased by23.88% comparedwithopeningamountoftheyear.TheprimaryreasonwastoobtaintheGuangminglanduseright. (5) Year-end balance of long-term unamortized expenses on 31 Dec., 2013 was RMB 13,405,084.94,increased114.09% compared with opening amount of the year. The primary reason was the current increase of renovationcostsoftheResearchandDevelopmentBuilding.
(6) Year-end balance of deferred income tax assets on 31 Dec., 2013 was RMB 218,728,739.41, reduced by29.65% compared with opening amount of the year. The primary reason was the releasing of previous annual deferredincometaxassetsbycommunicationtechnologies.
(7)Year-end balance of notes payable on31 Dec., 2013was RMB 565,137,790.84, reducedby33.26% compared with opening amount of the year. The primary reason was the reduction of billing amount for payment by endorsement.
(8) Year-end balance of accounts payable on 31 Dec., 2013 was RMB 3,392,607,811.65, increased by24.00% comparedwithopeningamountoftheyear.Theprimaryreasonwastheincreaseofcurrentamountpurchased. (9)Year-endbalanceof taxes payable on31 Dec.,2013wasRMB -94,670,496.91,reducedby-59.03%compared withopeningamountoftheyear.Theprimaryreasonwasthereductionofinputtaxretained.
(10) Year-end balance of accrued interest payable on 31 Dec., 2013 was RMB 34,945,870.48, increased by26.38% compared with opening amount of the year. The primary reason was the rise of current rate of bill of exchangeandshort-termborrowingofKangdian.
(11) Year-end balance of non-current liability within one year on 31 Dec., 2013 was RMB 0, reduced by100% comparedwithopeningamountoftheyear.Theprimaryreasonwasthecurrentlong-termborrowingreturnwithin oneyear.
(12)Year-end balance of the long-term borrowing on 31 Dec., 2013 was RMB 5,000,000.00, reduced by98.75% comparedwithopeningamountoftheyear.Theprimaryreasonwasthecurrentlong-termborrowingreturn. 2.Itemsofprofitstatementandcashflowstatement
(1) The annual amount of 2013 gross revenue was RMB 20,006,736,879.00, increased by9.10% compared with last year.The primary reasons were sales increase of LED intelligent television, high-definition television and 3D television driven by energy conservation subsidiaries of the first half year and business increase of video LE displayscreen,set-top-boxandsmallhouseholdappliances.
(2)Theannualamountof2013operatingcostswasRMB16,660,981,623.00,increasedby10.79%comparedwith lastyear.Theprimaryreasonsweretheexpansionofsalessize,incomeincreaseandcosts.
(3)Theannualamountof2013sellingexpenseswasRMB2,548,603,146.99,increasedby10.01%comparedwith last year.The primary reasons were the increases of income and selling expenses, labor costs and salaries of sales personnel.
(4)Theannualamountof2013financialcostswasRMB-59,637,103.92,reducedby133.22%comparedwith last year. The primary reasons were the reduction of current long-term borrowing, reduction of interest exchange, foreignexchangefluctuationandincreaseofexchangegains.
2013AnnualReportofKonkaGroupCo.,Ltd.
(5)Theannualamountof2013variableincomeoffairvaluewasRMB0,reducedby100.00%comparedwithlast year.TheprimaryreasonwasthefailureofdevelopingNDFbusiness.
(6) The annual amount of 2013 investment income was RMB 54,679,600.94, increased by636.81% compared withlastyear.TheprimaryreasonwasthetransferincomeofwithdrawingequitiesofChongqingKonka.
(7) The annual amount of 2013 nonbusiness income was RMB 274,574,465.25, reduced by22.96% compared withlastyear.Theprimaryreasonwastheincreaseoftaxrefundincomeofcurrentsoftware.
(8) The annual amount of 2013 nonbusiness expenditure was RMB 23,017,661.08, increased by104.51% comparedwithlastyear.Theprimaryreasonwasthetreatmentofpartoffixedassets.
2013AnnualReportofKonkaGroupCo.,Ltd.
Section XI. Documents Available for Reference
I. Financial statements with the signatures and seals of the company principal, the principal of accounting work andtheprincipaloftheaccountingorgan(financialmanager);
II. OriginalsofAuditors’Report with the seals of the CPAs firm and the signatures& seals of the certified public accountants;
III. Texts of all theCompany’s documents ever publicly disclosed in newspapers designated by CSRC in the reportingperiod,andtheoriginalsofthepublicnotices.
IV.Otherrelevantmaterials.
The Board of Directors
Konka Group Co., Ltd.
4 April 2014