KonkaGroupCo.,Ltd.
InterimReport2019
KONKA GROUP CO., LTD.
INTERIM REPORT 2019
2019-76
August 2019
KonkaGroupCo.,Ltd.
InterimReport2019
Part I Important Notes, Table of Contents and Definitions The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior management of Konka Group Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements ormaterial omissions therein.
Liu Fengxi, theCompany’s legal representative, Li Chunlei, theCompany’s Chief Financial Officer (CFO), and Feng Junxiu, head of theCompany’s financial department (equivalent to financial manager) hereby guarantee that the Financial Statements carried in this Report are factual, accurate andcomplete.
All theCompany’s directors have attended the Board meeting for the review of this Report andits summary.
Any plans forthe future or other forward-looking statements mentioned in this Report and its summary shall NOT be considered as absolute promises of the Company to investors. Therefore, investors arereminded to exercisecautionwhen making investmentdecisions. TheCompany hasno interimdividend plan,eitherinthe formofcash orstock.
This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese versions shallprevail.
KonkaGroupCo.,Ltd.
InterimReport2019
Table of Contents
Interim Report 2019...........................................................................................................................1 Part I Important Notes,Table ofContents and Definitions...........................................................2 Part II Corporate Information and Key Financial Information...................................................8 Part III Business Summary.............................................................................................................11 Part IVOperating Performance DiscussionandAnalysis............................................................14 PartVSignificantEvents.................................................................................................................28 PartVI ShareChangesand ShareholderInformation.................................................................47 PartVII Preferred Shares................................................................................................................51 PartVIII Directors, Supervisors andSeniorManagement..........................................................52 Part IXCorporate Bonds.................................................................................................................53 Part XFinancialStatements............................................................................................................58 Part XI DocumentsAvailableforReference................................................................................309
KonkaGroupCo.,Ltd.
InterimReport2019
Definitions
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|Term|Definition|
|The “Company”, the“Group”, “KonkaGroup”or“we”|Konka Group Co., Ltd. and its consolidated subsidiaries, except where thecontextotherwiserequires|
|AnhuiElectricalAppliance|AnhuiKonkaElectricalApplianceTechnologyCo.,Ltd.|
|AnhuiKonka|AnhuiKonkaElectronicCo.,Ltd.|
|AnhuiTongchuang|AnhuiKonkaTongchuangElectricalAppliancesCo.,Ltd.|
|AnhuiZhilian|AnhuiKonkaZhilianE-CommerceCo.,Ltd.|
|BeijingKonkaElectronic|BeijingKonkaElectronicCo.,Ltd.|
|BoluoKonkaPrecision|BoluoKonkaPrecisionTechnologyCo.,Ltd.|
|BoluoKonka|BoluoKonkaPCBCo.,Ltd.|
|IndustrialNewTown|SichuanKonkaIndustrialNewTownDevelopmentCo.,Ltd.|
|ChengduAnren|ChengduAnrenKonkaCulturalandCreativeIncubatorManagementCo.,Ltd.|
|ChengduKonkaIncubator|ChengduKonkaIncubatorManagementCo.,Ltd.|
|ChuzhouKangyong|ChuzhouKangyongHealthIndustryDevelopmentCo.,Ltd.|
|ChuzhouKonkaTID|ChuzhouKonkaTechnology&IndustryDevelopmentCo.,Ltd.|
|ChuanghuiSmart|NanjingChuanghuiSmartTechnologyCo.,Ltd.|
|ElectronicsTechnology|ShenzhenKonkaElectronicsTechnologyCo.,Ltd.|
|DongguanPacking|DongguanKonkaPackingMaterialsCo.,Ltd.|
|DongguanKonka|DongguanKonkaElectronicCo.,Ltd.|
|DongguanKonkaInvestment|DongguanKonkaInvestmentCo.,Ltd.|
|HainanTechnology|HainanKonkaTechnologyIndustryDevelopmentCo.,Ltd.|
|HefeiKONSEMI|HefeiKONSEMIStorageTechnologyCo.,Ltd.|
|JialiInternational|JialiInternational(HongKong)Limited|
|JiaxinTechnology|JiaxinTechnologyCo.,Ltd.|
|JiangxiKonka|JiangxiKonkaNewMaterialTechnologyCo.,Ltd.|
|KonkaElectricalAppliancesInternationalTrading|KonkaElectricalAppliancesInternationalTradingCo.,Ltd.|
|KonkaElectricalAppliancesInvestment|KonkaElectricalAppliancesInvestment&DevelopmentCo.,Ltd.|
|KonkaFactoring|KonkaFactoring(Shenzhen)Co.,Ltd.|
|KonkaMaterial|HainanKonkaMaterialTechnologyCo.,Ltd.|
|KonkaVentures|KonkaVenturesDevelopment(Shenzhen)Co.,Ltd.|
|KonkaEnterpriseService|GuiyangKonkaEnterpriseServiceCo.,Ltd.|

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|KonkaElectricalAppliances|ShenzhenKonkaElectricalAppliancesCo.,Ltd.|
|KonkaHuanjia|KonkaHuanjia(Dalian)EnvironmentalTechnologyCo.,Ltd.|
|KonkaHuanjia(Henan)|KonkaHuanjia(Henan)EnvironmentalTechnologyCo.,Ltd.|
|KonkaUnifortune|ShenzhenKonkaUnifortuneTechnologyCo.,Ltd.|
|KonkaEnterpriseManagement|GuizhouKonkaEnterpriseManagementServiceCo.,Ltd.|
|KonkaRonghe|KonkaRongheIndustrialTechnology(Foshan)Co.,Ltd.|
|KonkaEco-Development|ShenzhenKonkaEco-DevelopmentInvestmentCo.,Ltd.|
|KonkaSuyuan|ShenzhenKonkaSuyuanInvestmentIndustrialCo.,Ltd.|
|KonkaSuiyong|KonkaSuiyongInvestment(Shenzhen)Co.,Ltd.|
|Kangjiatong|SichuanKangjiatongTechnologyCo.,Ltd.|
|KonkaInvestment|ShenzhenKonkaInvestmentHoldingCo.,Ltd.|
|KonkaE-display|ShenzhenKonkaE-displayCo.,Ltd.|
|KonkaSmartTech|KonkaSmartTechLimited|
|KonkaCapital|ShenzhenKonkaCapitalEquityInvestmentManagementCo.,Ltd.|
|KonkaLeasing|KonkaFinancialLeasing(Tianjin)Co.,Ltd.|
|Kangjietong|Kangjietong(HongKong)Limited|
|KangqiaoEasyChain|ShenzhenKangqiaoEasyChainTechnologyCo.,Ltd.|
|KangquanEnterprise|ShenzhenKangquanEnterpriseManagementConsultingCo.,Ltd.|
|KangzhiTrade|AnhuiKangzhiTradeCo.,Ltd.|
|Cross-BorderTechnologicalInnovation|ShenzhenKonkaCross-BorderTechnologicalInnovationServiceCo.,Ltd.|
|MudanjiangAppliances|MudanjiangArcticOceanAppliancesCo.,Ltd.|
|NanoCrystallizedGlass|JiangxiGoldenPhoenixNanoCrystallizedGlassCo.,Ltd.|
|NanjingKonka|NanjingKonkaSmartTechnologyCo.,Ltd.|
|KonkaEurope|Konka(Europe)Co.,Ltd.|
|FittingsTechnology|ShenzhenKonkaElectronicFittingsTechnologyCo.,Ltd.|
|KonkaPengrun|ShenzhenKonkaPengrunTechnology&IndustryCo.,Ltd.|
|XiamenDalong|XiamenDalongTradingCo.,Ltd.|
|ShandongKangxin|ShandongKangxinIndustrialDevelopmentCo.,Ltd.|
|CommercialSystemTechnology|ShenzhenKonkaCommercialSystemTechnologyCo.,Ltd.|
|ShanghaiKonka|ShanghaiKonkaIndustrialCo.,Ltd.|
|ShanghaiXinfeng|ShanghaiXinfengZhuoqunPCBCo.,Ltd.|
|ShenzhenHuanan|ShenzhenHuananInvestmentPartnership(LimitedPartnership)|
|ShenzhenKONSEMI|ShenzhenKONSEMICo.,Ltd.|
|ShenzhenMeixin|ShenzhenMeixinSemiconductorTechnologyCo.,Ltd.|
|ShenzhenNianhua|ShenzhenNianhuaEnterpriseManagementCo.,Ltd.|

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|LifeElectricAppliance|ShenzhenKonkaLifeElectricApplianceCo.,Ltd.|
|ShengxingIndustrial|ShenzhenKonkaShengxingIndustrialCo.,Ltd.|
|SichuanKonka|SichuanKonkaSmartTerminalTechnologyCo.,Ltd|
|SuiningElectronicTechnologicalInnovation|SuiningKonkaElectronicTechnologicalInnovationCo.,Ltd.|
|SuiningKonkaIndustrialPark|SuiningKonkaIndustrialParkDevelopmentCo.,Ltd.|
|TelecommunicationTechnology|ShenzhenKonkaTelecommunicationsTechnologyCo.,Ltd.|
|Wankaida|ShenzhenWankaidaScienceandTechnologyCo.,Ltd.|
|HongKongKonka|HongKongKonkaLimited|
|KonkaMobility|KonkaMobilityCo.,Limited|
|XiaojiaTechnology|ShenzhenXiaojiaTechnologyCo.,Ltd.|
|FrestecElectricalAppliances|HenanFrestecElectricalAppliancesCo.,Ltd.|
|FrestecHouseholdAppliances|HenanFrestecHouseholdAppliancesCo.,Ltd.|
|FrestecRefrigeration|HenanFrestecRefrigerationApplianceCo.,Ltd.|
|XinfengMicrocrystalline|JiangxiXinfengMicrocrystallineJadeCo.,Ltd.|
|XingDaHongYe|GuangDongXingDaHongYeElectronicCo.,Ltd.|
|YantaiKonka|YantaiKonkaHealthcareEnterpriseServiceCo.,Ltd.|
|YantaiKonkaIndustrial|YantaiKonkaIndustrialCo.,Ltd.|
|YantaiKangjin|YantaiKangjinTechnologyDevelopmentCo.,Ltd.|
|E-displayService|ShenzhenE-displayServiceCo.,Ltd.|
|YibinKonkaTechnologyPark|YibinKonkaTechnologyParkOperationCo.,Ltd.|
|YibinKonkaIncubator|YibinKonkaIncubatorManagementCo.,Ltd.|
|MobileInterconnection|ShenzhenKonkaMobileInterconnectionTechnologyCo.,Ltd.|
|YiheElectronic|HefeiYiheElectronicCo.,Ltd.|
|YifangTechnology|ShenzhenKonkaYifangTechnologyCo.,Ltd.|
|E3info|E3info(Hainan)TechnologyCo.,Ltd.|
|E2info|ShenzhenE2infoNetworkTechnologyCo.,Ltd.|
|EconTechnology|ShandongEconTechnologyCo.,Ltd.(inclusiveofitsconsolidatedsubsidiaries)|
|YoushiKangrong|YoushiKangrongCultureCommunicationCo.,Ltd.|
|Youzhihui|ShenzhenYouzhihuiTechnologyCo.,Ltd.|
|SmartTechnology|YibinKonkaSmartTechnologyCo.,Ltd.|
|ChainKingdomMemoryTechnologies|ChainKingdomMemoryTechnologiesCo.,Limited|
|ChainKingdomMemoryTechnologies(Shenzhen)|ChainKingdomMemoryTechnologies(Shenzhen)Co.,Ltd.|
|ChongqingKonka|ChongqingKonkaTechnologyDevelopmentCo.,Ltd.|

KonkaGroupCo.,Ltd.
InterimReport2019
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|CSRC|TheChinaSecuritiesRegulatoryCommission|
|SZSE|TheShenzhenStockExchange|
|CSRCShenzhen|TheShenzhenBureauoftheChinaSecuritiesRegulatoryCommission|
|RMB,RMB’0,000,RMB’00,000,000|ExpressedintheChinesecurrencyofRenminbi,expressedintensofthousandsofRenminbi,expressedinhundredsofmillionsofRenminbi|

KonkaGroupCo.,Ltd.
InterimReport2019
Part II Corporate Information and Key Financial Information I Corporate Information
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|Stockname|Konka Group-A, KonkaGroup-B|Stockcode|000016,200016|
|Changedstockname(ifany)|N/A|||
|Stockexchangeforstocklisting|ShenzhenStockExchange|||
|CompanynameinChinese|康佳集团股份有限公司|||
|Abbr.(ifany)|康佳集团|||
|Company name in English (ifany)|KONKAGROUPCO.,LTD|||
|Abbr.(ifany)|KONKAGROUP|||
|Legalrepresentative|LiuFengxi|||

II Contact Information
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||BoardSecretary|SecuritiesRepresentative|
|Name|WuYongjun|MiaoLeiqiang|
|Address|Board Secretariat, 24/F, Konka R&D Center, 28 KejiSouth Twelfth Road, Science and Technology Park,Yuehai Street, Nanshan District, Shenzhen, GuangdongProvince,China|Board Secretariat, 24/F, Konka R&D Center, 28 KejiSouth Twelfth Road, Science and Technology Park,Yuehai Street, Nanshan District, Shenzhen, GuangdongProvince,China|
|Tel.|0755-26609138|0755-26609138|
|Fax|0755-26601139|0755-26601139|
|Emailaddress|szkonka@konka.com|szkonka@konka.com|

III Other Information
1.Contact Information of theCompany
Indicate by tick mark whether any change occurred to the registered address, office address and theirzipcodes, website address and email address oftheCompany inthe ReportingPeriod.
□Applicable√ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2018
Annual Report.
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2.Media forInformation Disclosure andPlacewhere thisReport is Lodged
Indicate by tick mark whether any change occurred to the information disclosure media and the place for lodgingtheCompany’s periodic reports in theReporting Period.
□Applicable√ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing theCompany’s periodic reports and the place for lodging such reports did not change in theReporting Period.The said information can befound in the2018Annual Report. IVKey Financial Information
Indicate bytick mark whether there isany retrospectively restated datum inthe tablebelow.
□Yes√No
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||H12019|H12018|Change(%)|
|Operatingrevenue(RMB)|26,036,442,813.84|17,625,414,769.82|47.72%|
|Net profit attributable to the listedcompany’sshareholders(RMB)|352,767,020.73|341,793,039.03|3.21%|
|Net profit attributable to the listedcompany’s shareholders beforeexceptionalgainsandlosses(RMB)|-622,911,633.57|-300,870,612.80|-107.04%|
|Net cash generated from/used inoperatingactivities(RMB)|-2,042,956,171.77|-1,838,158,705.86|-11.14%|
|Basicearningspershare(RMB/share)|0.1465|0.1419|3.24%|
|Dilutedearningspershare(RMB/share)|0.1465|0.1419|3.24%|
|Weightedaveragereturnonequity(%)|4.25%|4.19%|0.06%|
||30June2019|31December2018|Change(%)|
|Totalassets(RMB)|37,939,411,460.71|32,985,061,889.03|15.02%|
|Equity attributable to the listedcompany’sshareholders(RMB)|8,239,642,204.00|8,104,736,790.53|1.66%|

V Accounting Data Differences underChina’s Accounting Standards for Business Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting Standards
1.Net ProfitandEquity under CAS andIFRS
□Applicable√ Not applicable
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InterimReport2019
No suchdifferences for theReporting Period.
2.Net ProfitandEquity Differences under CAS andForeign Accounting Standards
□Applicable√ Not applicable
No suchdifferences for theReporting Period.
XI Exceptional Gains andLosses
√Applicable□ Not applicable
Unit:RMB
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|Item|H12019|Note|
|Gainorlossondisposalofnon-currentassets(inclusiveofimpairmentallowancewrite-offs)|570,011,162.17||
|Government subsidies charged to current profit or loss (exclusive of government subsidiesgiven in the Company’s ordinary course of business at fixed quotas or amounts as per thegovernment’suniformstandards)|320,821,164.45||
|Gainorlossonassetsentrustedtootherentitiesforinvestmentormanagement|110,312,982.21||
|Gain or losson fair-value changes in trading and derivative financial assets and liabilities &incomefromdisposaloftradingandderivativefinancialassetsandliabilitiesandinvestmentsin other debt obligations (exclusive of the effective portion of hedges that arise in theCompany’sordinarycourseofbusiness)|-13,291,264.69||
|Gainorlossonloanentrustments|928,721.16||
|Non-operatingincomeandexpenseotherthantheabove|19,460,574.99||
|Othergainsandlossesthatmeetthedefinitionofexceptionalgain/loss|136,688,905.38||
|Less:Incometaxeffects|82,538,800.98||
|Non-controllinginterestseffects(netoftax)|86,714,790.39||
|Total|975,678,654.30|--|

 Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities tothePublic—Exceptional Gain/Loss Items:
√Applicable□ Not applicable
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|Item|Amountinvolved(RMB)|Reason|
|Taxrebatesonsoftware|23,063,806.91|GovernmentsubsidiesgivenintheCompany’sordinarycourseofbusinessatfixedquotasoramountsaspergovernment’suniformstandards|

KonkaGroupCo.,Ltd.
InterimReport2019
Part III Business Summary
I Principal Activity oftheCompany inthe Reporting Period
Is theCompanysubject to any industry-specific disclosurerequirements?
No.
Currently, the Company consists of three major business divisions, namely, the consumer electronic division, the supply chain management division and the environmental protection division, which are detailed as follows:
(I)The ConsumerElectronic Division
This division primarily comprises the multimedia sub-division, the white goods sub-division and the mobilephone sub-division,with details as follows:
1.The MultimediaSub-Division
The Company provides multimedia products and services, including colour TVs and Internet TV services, for both domesticand overseas markets.
The domestic sales of theCompany’s colour TVs are realized mainly through B2B (Business-to-Business) and B2C (Business-to-Consumer), with its branch companies, business departments and after-sales maintenance points operating across the country. And the Company profits from themargins between thecosts and theselling prices of itscolourTVs.
As for selling its colour TVs abroad, the Company mainly relies on B2B. Its colour TVs are sold to Asia Pacific, Middle East, Central& South America, East Europe, etc. And operating profit source is also thedifferences between thecosts and theselling prices ofits colourTVs.
Internet business is based on the intelligent TVterminals sold by our company. It mainly carries out three aspects of business. Firstly, it works with other Internet companies to provide end users with, among other content, video, educational, music, medical and game content to generate earnings. Secondly, it analyses user behaviours and offer certain free, interactive services to increase attractiveness to users, promote its brand and stimulate desire for its hardware products. Finally, it is trying to build an InternetTV platform with tens of millions of users, on which it will profit through commercial and application distribution. This Internet TV business is key to theCompany’s Internet-oriented transformation and upgrade to a development model of “hardware+ software” and“smartTV+ end users”.
2.TheWhiteGoods Sub-Division
The white goods produced by the Company mainly include refrigerators, washing machines, air conditioners, freezers, etc., which are sold through B2B and B2C mainly to the domestic market. And the Company profits from the margins between the costs and the selling prices of its white
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goods.
3.The MobilePhoneSub-Division
The mobile phones of the Company are sold to both the domestic and overseas markets. The overseas sales mainly rely on B2B and the profit comes from the margins between the costs and the selling prices of the mobile phones. As for the domestic sales of its mobile phones, the Company relies on B2B and B2C, and profits mainly from the costs and the selling prices of its products and slightly from therelated valueadded services.
(II) TheSupplyChain Management Division
In this business, relying on the advantages of the raw material procurement channels, distribution systems and terminal networks of its consumer electronic business, the Company helps upstream and downstream enterprises of the supply chain solve channel problems caused by asymmetric information and improve efficiency. At present, this business runs on two models. In the procurement and distribution supply chain model, the Company benefits from purchasing IC chips, LCD screens, etc. from upstream suppliers and selling them to downstream customers through the supply chain of its traditional core business. Supply chain services are another model. Capitalizing on its years of experience in product quality control, outsourcing partner assessment and international trade, the Company is able to help improve theclient’s supply chain in efficiency and cost through the provision of services including product quality control, warehousing and logistics, customs clearance of imports and exports, documentation, tax handling, outsourcing partner selection, etc. Profit comes from service charges. Additionally, the supply chain management business can help the Company establish good relationships with its upstream suppliers and downstream customers, and keep it informed of prices of the materials used in its production for better cost control over itsexisting products.
(III)TheEnvironmental Protection Division
Currently, this business focuses on water treatment, recycling of renewable resources and the new material of glass ceramic. Water engineering PPP (Public-Private Partnership) projects are undertaken under BOT (Build-Operate-Transfer) or EPC (Energy Performance Contracting) models. Renewable resources are collected, sorted, processed, distributed and sold. And glass ceramic products are developed, produced and marketed.
II SignificantChanges inMajor Assets
1.SignificantChanges in Major Assets
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|Majorassets|Mainreasonforsignificantchanges|
|Equityassets|Nosignificantchange|
|Fixedassets|Nosignificantchange|

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|Intangibleassets|Nosignificantchange|
|Constructioninprogress|ConstructioninprogressattheendoftheReportingPeriodrose27.52%comparedtothebeginningamount,primarilydrivenbynewenvironmentalprojectsduringtheReportingPeriod.|

2.Major Assets Overseas
□Applicable√ Not applicable
III Core Competitiveness Analysis
Is theCompanysubject to any industry-specific disclosurerequirements?
No.
TheCompany’s core competitiveness lies in itsR&D ability, brand, marketing network and human resources. It has developed a three-levelR&D system of “Konka Research Institute-MultimediaR&D Centre-specialized design institutes”, with close to 100 core technologies and approximately 2,000R&D personnel. It also boasts a strong brand presence among consumers, as well as among banks and other financing channels. Additionally, its domestic marketing and service network, including more than 60 branch companies, over 200 offices and about 3,300 after-sales service stations across the country, directly connect to around 3,000 retail terminals, along with a well-established overseas marketing network. Meanwhile, it has high-level personnel with years of rich management and industry experience, as well as a high-quality team with strong execution capabilities.
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Part IV Operating Performance Discussion and Analysis
I Overview
The Company carried on with its long-term development strategy of “Technology+ Industry+ Park” during theReporting Period,made progress inthe followingaspects:
1. The mixed-ownership reform progressed further, bringing more vitality to the subordinates. During the Reporting Period, in order to further promote the mixed-ownership reform on the subordinates and refine the asset allocation of the Company, Shenzhen Konka E-display Co., Ltd. introduced Shenzhen MACC Investment Holding Co., Ltd., which owns upstream resources, as a shareholder. In addition, the multimedia business of the Company kept enhancing its competitiveness by taking reform measures such as promoting the mixed-ownership reform on the sales subsidiaries andbuilding an independent domesticservice system.
2. Efforts were stepped up in technologicalR&D to enhance independent innovation. During the Reporting Period, the Company proactively implemented the approach of “independent innovation+ technology introduction”.R&D investment increased by14.74% year-on-year in the first half of this year.and built a three-level lab system (a comprehensive lab at the Headquarters level, key labs at the level of cooperation between the Headquarters and the business departments, and improvement labs at the business department level). More than a dozen of high-end personnel from around the world were introduced to the system, and an intent was reached with research institutes such as the Shenzhen Institutes of Advanced Technology of the Chinese Academy of Sciences and the Harbin Institute of Technology, Shenzhen to jointly produce post-doctoral talent. During the period, a number of programmes featuring independent innovation by the Company received commendations, including the National Second Prize for Progress in Science and Technology for the programme of the Digital TV Broadcast System and the Domestication of Core Chips, the Third Prize for Progress in Science and Technology for the programme of the Research and Industrialization of Key Quality Management Technologies for Food in Refrigerators by the China Light Industry Council, as well as the inclusion of the programme of the 8K Equipment End-to-End Signal Connection Key Technology andR&D of Terminal Display Products in the KeyR&D Programmes ofGuangdong Province.
3. The Company continued to revitalize the Konka brand. During the Reporting Period, the Company took proactive measures to revitalize its brand through the approach of “enhance the top brand image, increase thebrand’s popularity among young people, and upgrade the brand image by delivering a good brand story”. The brand promotion investment increased by20.08% year-on-year in the first half of this year.The Company tried to make its brand more
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attractive to young and international consumers by means of deep cooperation with widely-recognized media and platforms, as well as with Lu Han, a top star.
4. The core businesses saw further improvement. As a result, it recorded operating revenue of RMB26.036 billion for the period, up47.72% year-on-year.During the Reporting Period, the environmental business reported close to RMB4.863 billion in operating revenue with steady progress made in water treatment, recycling of renewable resources and new materials; the white goods business posted a50% year-on-year growth in operating revenue thanks to measures such as the integration of online and offline marketing and product upgrade in addition to the integration of the “Konka+ Frestec” brand resources; and the multimedia business proactively refined its product mix, promoted mechanism reform and saw a markedly larger size of both the e-commerce and overseas operations, where a great deal of effort was put;.
5. Technology park development moved on.According to the strategy of “Technology+ Industry+ Park”, the Company kept pace with the government planning for industry structure adjustment and transformation and upgrade, and proactively promoted its technology park business on the basis of its unique market, industry and operational resources. Following the implementation of a number of technology park projects in2018, the Company moved on to plan for new parks in Haimen, Lankao, Yantai, Chongqing and other cities in theReporting Period.
II Analysisof Core Businesses
See “IOverview”above.
Year-on-year changes inkey financial data:
Unit:RMB
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||H12019|H12018|Change(%)|Mainreasonforchange|
|Operatingrevenue|26,036,442,813.84|17,625,414,769.82|47.72%|Newinclusionofenvironmentalrevenueandyear-on-yearincreaseinsupplychaintraderevenue|
|Costofsales|24,674,042,371.13|16,442,256,445.26|50.06%||
|Sellingexpense|1,067,945,914.36|1,103,181,074.51|-3.19%||
|Administrativeexpense|347,924,642.43|227,818,772.57|52.72%|NewsubsidiariesintheCurrentPeriod|
|Financecosts|414,260,463.03|36,292,909.41|1041.44%|PrivateplacementsofRMB3.5billioncorporatebondsintheCurrentPeriod|
|Incometaxexpense|10,311,393.19|-17,446,049.13|159.10%|Disposalofassets,equitytransferand|

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|-|-|-|-|-|
|||||receiptofgovernmentsubsidybysubsidiaryintheCurrentPeriod|
|R&Dexpense|157,210,338.94|137,008,896.76|14.74%||
|Net cash generated from/used inoperatingactivities|-2,042,956,171.77|-1,838,158,705.86|-11.14%||
|Net cash generated from/used ininvestingactivities|-673,736,084.26|-343,094,565.17|-96.37%||
|Net cash generated from/used infinancingactivities|3,992,809,825.25|2,880,630,318.57|38.61%||
|Net increase in cash and cashequivalents|1,267,096,052.81|664,088,931.90|90.80%||

Material changes to theprofit structure orsources of theCompanyin theReporting Period:
□Applicable√ Not applicable
No suchchanges.
Breakdown of core businesses:
Unit:RMB
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|-|-|-|-|-|-|-|
||Operatingrevenue|Costofsales|Grossprofitmargin|YoYchangeinoperatingrevenue(%)|YoYchangeincostofsales(%)|YoYchangeingrossprofitmargin(%)|
|Byoperatingdivision|||||||
|Supplychainmanagement|14,549,000,969.03|14,359,602,494.69|1.30%|45.36%|44.67%|0.47%|
|Electronics|6,292,729,392.42|5,545,179,041.15|11.88%|-6.31%|-4.58%|-1.60%|
|Environmentalprotection|4,863,145,443.76|4,524,853,380.07|6.96%|6138.69%|8516.26%|-25.67%|
|Byproductcategory|||||||
|Supplychaintrade|14,549,000,969.03|14,359,602,494.69|1.30%|45.36%|44.67%|0.47%|
|Environmentalprotection|4,863,145,443.76|4,524,853,380.07|6.96%|6138.69%|8516.26%|-25.67%|
|ColourTVs|3,844,847,424.42|3,596,446,860.11|6.46%|-22.53%|-17.38%|-5.84%|
|Whitegoods|1,637,709,425.79|1,345,643,531.66|17.83%|51.03%|50.80%|0.12%|
|Mobilephones|205,434,258.43|201,988,459.74|1.68%|0.82%|-1.18%|1.98%|
|Other|604,738,283.78|401,100,189.64|33.67%|29.93%|10.90%|11.38%|
|Byoperatingsegment|||||||
|Overseas|16,274,631,867.43|15,833,504,916.19|2.71%|34.15%|32.58%|1.15%|
|Domestic|9,430,243,937.78|8,596,129,999.73|8.85%|101.84%|123.44%|-8.81%|

KonkaGroupCo.,Ltd.
InterimReport2019
III Analysisof Non-Core Businesses
√Applicable□ Not applicable
Unit:RMB
||||||
|-|-|-|-|-|
||Amount|As%oftotalprofit|Source/Reason|Exceptionalorrecurrent|
|Returnoninvestment|559,161,027.92|114.34%|TransferofsomeequityinterestsinNanjingK-StarTechnologyParkOperationandManagementCo.,Ltd.,ShenzhenKonkaE-displayCo.,Ltd.andChuzhouKonkaTechnology&IndustryDevelopmentCo.,Ltd.intheCurrentPeriod|Exceptional|
|Gain/loss onchanges in fairvalue|-3,005,381.67|-0.61%||Exceptional|
|Assetimpairments|-11,717,767.29|-2.40%||Exceptional|
|Non-operatingincome|22,269,442.09|4.55%||Exceptional|
|Non-operatingexpense|3,469,741.51|0.71%||Exceptional|

IVAnalysis ofAssets andLiabilities
1.Material Changes in AssetComposition
Unit:RMB
||||||||
|-|-|-|-|-|-|-|
||30June2019||30June2018||Changeinpercentage(%)|Reasonformaterialchange|
||Amount|As%oftotalassets|Amount|As%oftotalassets|||
|Monetarycapital|5,670,267,120.55|14.95%|3,911,820,154.60|13.90%|1.05%||
|Accountsreceivable|5,468,498,179.21|14.41%|4,428,390,613.21|15.74%|-1.33%||
|Inventories|5,810,235,773.06|15.31%|4,854,235,062.74|17.25%|-1.94%||
|Investmentproperty|208,008,718.57|0.55%|213,639,992.84|0.76%|-0.21%||
|Long-term|2,846,608,296.03|7.50%|2,187,539,867.00|7.78%|-0.28%||

KonkaGroupCo.,Ltd.
InterimReport2019
|||||||
|-|-|-|-|-|-|
|equityinvestments||||||
|Fixedassets|2,228,083,633.72|5.87%|1,789,101,811.32|6.36%|-0.49%|
|Construction inprogress|2,776,018,241.52|7.32%|120,644,724.53|0.43%|6.89%|
|Short-termborrowings|13,163,667,813.10|34.70%|10,397,447,703.32|36.96%|-2.26%|
|Long-termborrowings|1,284,700,000.00|3.39%|501,000,000.00|1.78%|1.61%|

2.AssetsandLiabilitiesatFairValue
√Applicable□ Not applicable
Unit:RMB
|||||||||
|-|-|-|-|-|-|-|-|
|Item|Beginningamount|Gain/lossonfair-valuechangesintheReportingPeriod|Cumulativefair-valuechangeschargedtoequity|ImpairmentallowancefortheReportingPeriod|PurchasedintheReportingPeriod|SoldintheReportingPeriod|Endingamount|
|Financialassets||||||||
|1. Trading financialassets (exclusive ofderivative financialassets)|66,959,651.89|||||-5,464,984.92|61,494,666.97|
|2.Derivativefinancialassets||||||||
|3.Investmentsinotherdebtobligations||||||||
|4.Investmentsinotherequityinstruments|23,940,214.36|||4,800,000.00|||19,140,214.36|
|Subtotal of financialassets|90,899,866.25|||4,800,000.00||-5,464,984.92|80,634,881.33|
|Investmentproperty||||||||
|Productivelivingassets||||||||
|Other|548,230,000.00||||1,000,134,400.00||1,548,364,400.00|
|Totaloftheabove|639,129,866.25|||4,800,000.00|1,000,134,400.00|-5,464,984.92|1,628,999,281.33|
|Financialliabilities|2,459,603.25|||||-2,459,60|-|

KonkaGroupCo.,Ltd.
InterimReport2019
||
|-|
|3.25|

Significant changes to themeasurement attributes of themajorassets intheReporting Period:□Yes√No
3.Restricted Asset Rights asat thePeriod-End
||||
|-|-|-|
|Item|Endingcarryingvalue（RMB’0,000）|Reasonforrestriction|
|Monetarycapital|96,902.16|Among them, RMB579,721,300 is all kinds of deposit that cannot be withdrawn at any time;RMB315 million is a time deposit; RMB49,081,800 is the funds of the households under thesupervisionofrepayment;RMB19.8millionindepositspledgedasloans;RMB3.22millionisthelawsuitfrozenfund;RMB2.1985millionrestrictedduetootherreasons.|
|Notesreceivable|118,688.30|As of 30 June 2019, the Company has pledged the notes receivable with the book value ofRMB1,186.883 million for issuing bank acceptance bills, letters of credit, letters of guarantee,tradefinancingandothercomprehensivefinancingservices.|
|Fixedassets|36,202.64|For mortgage borrowings. Refer to 25. Short-term Borrowings and 34. Long-term Borrowings inNoteVI|
|Intangibleassets|13,805.57||
|Long-termreceivables|34,941.65|Forpledgeloans.Referto34.Long-termBorrowingsinNoteVI|
|Total|300,540.32||

V Investments Made
1.Total Investment Amount
√Applicable□ Not applicable
||||
|-|-|-|
|AmountofReportingPeriod(RMB)|Amountofthesameperiodoflastyear(RMB)|Change(%)|
|1,156,259,360.00|198,399,656.00|482.79%|

 2.Major Equity Investments Made intheReporting Period
□Applicable√ Not applicable
3.Major Non-Equity Investments Ongoing inthe Reporting Period
√Applicable□ Not applicable
Unit:RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Investmentmeth|Fixedassetsinvestmentor|Industryinvolved|InputamountintheReportin|Accumulativeactualinput|Capitalresources|Progress|Estimatedrevenues|Accumulativerealizedrevenues|reasonfornot|Disclosuredate(if|Disclosureindex(if|

KonkaGroupCo.,Ltd.
InterimReport2019
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||od|not||gPeriod|amountasoftheperiod-end||||asoftheperiod-end|meetingthescheduleandexpectedrevenues|any)|any)|
|NewplantinDongguancity|Self-build|Yes|Electronicindustry|0|0|Self-ownedfunds|0|/||N/A|11March2017|http://www.cninfo.com.cn/new/index|
|YibinKonkaSmartTerminalHigh-TechPark|Self-build|Yes|Electronicindustry|18,320,603.45|37,570,603.45|Self-ownedfunds|10.73%|/||N/A|16December2017||
|ChengduBeltandRoadHeadquarters|Self-build|Yes|Electronicindustry|0|0|Self-ownedfunds|0|/||N/A|27June2018||
|SuiningKonkaElectronictechnologyIndustrialPark|Self-build|Yes|Electronicindustry|16,578,955.00|16,578,955.00|Self-ownedfunds|1.01%|/||N/A|17October2018||
|Konka(Chuzhou)SmartAppliancesandEquipmentIndustrialPark|Self-build|Yes|Electronicindustry|10,298,270.02|87,286,438.02|Self-ownedfunds|7.74%|/||N/A|25December2018||
|HaimenHeadquarterforeasternChina|Self-build|Yes|Electronicindustry|0|0|Self-ownedfunds|0|/||N/A|30April2019||

KonkaGroupCo.,Ltd.
InterimReport2019
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|LankaoEnvironmentalProtectionBusinessIndustrialPark|Self-build|Yes|Environmentalprotectionindustry|10,041,100.00|10,041,100.00|Self-ownedfunds|3.36%|/|N/A|21May2019||
|ChongqingKonkaSemi-conductorOptoelectronicsIndustrialPark|Self-build|Yes|Electronicindustry|0|0|Self-ownedfunds|0|/|N/A|14June2019||
|Total|--|--|--|55,238,928.47|151,477,096.47|--|--||--|--|--|

Note: (1) Concerning the Dongguancity’s new plant, preparations are underway and the government has put out thetarget land forbids.
(2) Yibin with respect to the smart terminal high-tech park, the land for the project has been obtained and themain bodyis underconstruction.
(3)As for the Chengdu Belt and Road Headquarters, preparations are underway and the Company is waiting for thelocal government to put outtheproject target land for bids.
(4) As for Suining Konka Electronic technology Industrial Park, the industrial estate of 156 acres has been obtained andtheCompany is preparing necessary documents forconstruction.
(5) With respect to Konka (Chuzhou) Smart Appliances and Equipment Industrial Park, the land used for the project has been obtained and the construction of supporting area for living is in progress.
(6) Chongqing Konka Semi-conductor Optoelectronics Industrial Park, the project company has been set up and the Company is waiting for the local government to put out the project target land for bids.
(7) As for Lankao Environmental Protection Industrial Park, the land used for the project has been obtained and is underthepreparation for construction.
(8) As for Haimen Headquarters for Eastern China, preparations are underway and the Company is waiting for thelocal government to put outtheproject target land for bids.
4.FinancialInvestments
(1) Securities Investments
□Applicable√ Not applicable
No suchcases in theReporting Period.
KonkaGroupCo.,Ltd.
InterimReport2019
(2) Investments in Derivative FinancialInstruments
√Applicable□ Not applicable
|||
|-|-|
|Fundingsourceforderivativeinvestment|U.S.dollarfinancings|
|Legalmattersinvolved(ifapplicable)|None|
|Disclosure date of board announcementapprovingderivativeinvestment(ifany)|24May2014|
|Disclosure date of shareholders’ meetingannouncementapprovingderivativeinvestment(ifany)|10June2014|
|Analysis of risks and control measuresassociated with derivative investments held inReporting Period (including but not limited tomarket risk, liquidity risk, credit risk,operationalrisk,legalrisk,etc.)|We engage in forward forex transactions to reduce the currency risk whensecuring foreign-currency financing. This is very needed in our routineoperation and is in compliance with the applicable laws and regulations. Wehave formulated the Management Rules of Konka Group Co., Ltd. forInvestment In Derivative Financial Instruments, making clear the relevantconsideration and approval procedure, risk control, etc.. We always signforward forex contracts with large banks such as the Bank of China, whichoperatesteadilyandhavegoodcreditstanding,whichcouldhelppreventlossonforwardforexcontractsduetobankfailure.|
|Changes in market prices or fair value ofderivative investments in Reporting Period(fair value analysis should includemeasurement method and related assumptionsandparameters)|How we usually measure the fair value of derivative financial instruments:Based on the forward forex sales and purchase contracts that are signedbetween theCompanyandbanksandhavenotexpiredinaReportingPeriod,werecognizethedifferencesbetweenthequotationsforthesecontractsonthebalance sheet dates provided by the banks and the contractual prices astransactional financial assets or liabilities, and the profit/loss on fair valuechanges is recognized accordingly. Because these contracts have locked inexchange rates, no changes will occur when comparing the fair value onsigningdateswiththatondeliverydates.|
|Material changes in accounting policies andspecific accounting principles adopted forderivative investments in Reporting Periodcomparedtolastreportingperiod|Nomaterialchanges|
|Opinionofindependentdirectorsonderivativeinvestmentsandriskcontrol|It is considered necessary for the Company to lock in foreign-currencyfinancing costs through financial instruments, because it could effectivelyreduce the currency risk when securing foreign-currency financing. TheCompany has formulated the internal control mechanism for investment inderivativefinancialinstruments,andtherelevantriskcontrolmeasuresthattheCompanyhastakenareconsideredeffective.|

Unit:RMB’0,000
||||||
|-|-|-|-|-|
|Typeofderivativefinancialinstrument|Beginningcontractualamount|Endingcontractualamount|Gain/lossinReportingPeriod|EndinginvestmentamountasapercentageoftheCompany’sendingnetassetvalue|

KonkaGroupCo.,Ltd.
InterimReport2019
||||||
|-|-|-|-|-|
|Forwardforexcontract|61,356.18|0|-1,329.13|0%|

VI Saleof Major Assets and EquityInterests
1.SaleofMajor Assets
□Applicable√ Not applicable
No suchcases in theReporting Period
2.SaleofMajor Equity Interests
√Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Counterparty|Equityinterestssold|Dateofsale|Sellingprice(RMB’0,000)|AmountcontributedbytheequityintereststonetincomeoftheCompanyfromperiod-beginningtodateofsale(RMB’0,000)|EffectofthesaleontheCompany|AmountcontributedbythesaletonetincomeoftheCompanyasapercentageoftheCompany’snetincome(%)|Pricingprinciple|Related-partytransactionornot|RelationshipbetweencounterpartyandtheCompany|Ownershipfullytransferredornot|Executedasscheduledornot,ifnot,statereasonandactionstaken|Disclosuredate|Indextodisclosedinformation|
|ShenzhenMACCInvestmentHoldingCo.,Ltd.|15%ofequityinterestsofShenzhenKonkaE-displayCo.,Ltd.|21June2019|3,750|80.73|OptimizingtheCompany’sallocationofassetsandpromotingassets’liquidity|26.06%|Marketprice|Not|Notrelated|Yes|Yes|12April2019|http://http://www.cninfo.com.cn/new/index|

KonkaGroupCo.,Ltd.
InterimReport2019
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|ShenzhenOCTCapitalInvestmentManagementCo.,Ltd.|51% ofequityinterests ofChuzhouKonkaTechnology &IndustryDevelopmentCo.,Ltd.|21June2019|6352.05|-124.49|OptimizingtheCompany’sallocationofassetsandpromotingassets’liquidity|18.26%|Notlessthanestimatevalue|Yes|Underthecontrolofthesameactualcontroller|Yes|Yes|11June2019|

VII Major Subsidiaries
√Applicable□ Not applicable
Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over10% effectontheCompany’s net profit
Unit:RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Name|RelationshipwiththeCompany|Principalactivity|Registeredcapital|Totalassets|Netassets|Operatingrevenue|Operatingprofit|Netprofit|
|AnhuiKonkaElectronicCo.,Ltd.|Subsidiary|Productionandsaleofmultimediaproducts|RMB140,000,000|1,819,651,517.22|625,467,790.74|4,227,651,025.46|270,002,635.96|229,344,247.51|
|HongKongKonkaCo.,Ltd.|Subsidiary|Export&importofelectromechanicalandelectronics|HKD500,000|2,723,237,995.41|255,615,942.86|2,611,943,571.45|38,658,252.16|33,927,798.70|
|ChainKingdomMemoryTechnologiesCo.,Limited|Subsidiary|Trade,industryandscienceandtechnology|USD1,500,000|1,807,859,455.83|96,584,709.27|3,092,530,128.86|23,901,186.85|19,958,624.47|
|EconTechnology|Subsidiary|Utilities-gasandwater|RMB164,000,000|4,586,863,672.26|864,561,098.06|828,589,882.95|79,361,771.06|70,765,359.97|

KonkaGroupCo.,Ltd.
InterimReport2019
||||||||||
|-|-|-|-|-|-|-|-|-|
|(Consolidated)|||||||||
|ShenzhenKonkaElectronicsTechnologyCo.,Ltd.|Subsidiary|Electronicindustry|RMB1,000,000,000|3,315,897,785.86|1,075,295,257.60|3,643,261,471.53|128,309,667.65|129,398,806.11|
|E2info|Subsidiary|Internetandrelatedservices|RMB20,174,070.81|386,593,479.15|164,732,854.78|105,379,023.82|57,022,559.67|48,711,754.74|
|KonkaHuanjia|Subsidiary|Popularityandapplicationoftechnologies|RMB180,000,000|2,064,552,715.31|320,294,584.58|3,907,011,852.57|117,564,885.43|89,593,343.05|
|ChongqingKonkaTechnologyDevelopmentCo.,Ltd.|Subsidiary|R&D,production,salesandsupportserviceprovisionofelectronics|RMB120,000,000|240,011,000.00|210,008,250.00|-|120,011,000.00|90,008,250.00|
|SuiningKonkaIndustrialParkDevelopmentCo.,Ltd.|Subsidiary|Development,operationandmanagementofindustrialpark|RMB200,000,000|415,248,735.67|286,005,991.75|-|114,674,655.67|86,005,991.75|

Subsidiaries obtained or disposed in theReporting Period:
√Applicable□ Not applicable
||||
|-|-|-|
|Subsidiary|HowsubsidiarywasobtainedordisposedintheReportingPeriod|Effectsonoveralloperationsandoperatingperformance|
|Shenzhen Konka Shengxing IndustrialCo.,Ltd.|Set-up|Nomaterialeffects|
|Shenzhen Youzhihui Technology Co.,Ltd.|Set-up|Nomaterialeffects|
|SuiningKonkaElectronicTechnologicalInnovationCo.,Ltd.|Set-up|Nomaterialeffects|
|ShenzhenXiaojiaTechnologyCo.,Ltd.|Set-up|Nomaterialeffects|
|Yibin Konka Smart Technology Co.,Ltd.|Set-up|Nomaterialeffects|
|Konka Huanjia (Henan) EnvironmentalTechnologyCo.,Ltd.|Set-up|Nomaterialeffects|

KonkaGroupCo.,Ltd.
InterimReport2019
||||
|-|-|-|
|Laizhou Lairun Sewage TreatmentCo.,Ltd.|Set-up|Nomaterialeffects|
|FunanKangrunWaterCo.,Ltd.|Set-up|Nomaterialeffects|
|Weifang Sihai Kangrun InvestmentOperationCo.,Ltd.|Set-up|Nomaterialeffects|
|HefeiYiheElectronicCo.,Ltd.|Set-up|Nomaterialeffects|
|Lushan Kangrun EnvironmentManagementCo.,Ltd.|Set-up|Nomaterialeffects|
|Shenzhen Huanan InvestmentPartnership(LimitedPartnership)|Set-up|Nomaterialeffects|
|Chongqing Konka TechnologyDevelopmentCo.,Ltd.|Set-up|Nomaterialeffects|
|DongguanKonkaInvestmentCo.,Ltd.|Set-up|Nomaterialeffects|
|Rushan Yikang Shell TechnologyIncubatorCo.,Ltd.|Cancellation|Nomaterialeffects|
|Yantai Huanhai Xinze EnterpriseManagementCo.,Ltd.|Cancellation|Nomaterialeffects|
|ShenzhenKonkaE-displayCo.,Ltd.|Transfer of 15% equity interests inShenzhenKonkaE-displayCo.,Ltd.|The equity interests transfer generatedgreatgains|
|Chuzhou Konka Technology & IndustryDevelopmentCo.,Ltd.|Transfer of 51% equity interests inChuzhou Konka Technology & IndustryDevelopmentCo.,Ltd.|The equity interests transfer generatedgreatgains|

Information about majormajority- and minority-owned subsidiaries:
None
VIII Structured BodiesControlled bytheCompany
□Applicable√ Not applicable
IXPerformance Forecast forJanuary-September2019
Warning of forecast negative net profit for January-September 2018 or considerable YoY change therein, as well as thereasons:
□Applicable√ Not applicable
X RisksFacing theCompany andCountermeasures
TheCompany’s consumer electronics business is seeing a decreased gross profit margin caused by slow growth in demand and increasingly fierce competition in the colorTV, white goods and mobile phone markets. In response, the Company will adopt measures including adjusting the hardware product mix, strengthening product competitiveness, enhancing professionalism in user operation, improving Internet operations,and improvinginternal management.
As for the environmental protection business, the Company is a new comer in this sector. It still
needs some time for the newly acquired and invested enterprises to integrate with the Company in
operational and management mechanism, resource and corporate culture. And a great number of
KonkaGroupCo.,Ltd.
InterimReport2019
reserve projects in this business are making more requirements for human resources. Therefore, the Company has started to work on the relevant operational mechanism, improve its monitoring of the majority-ownedsubsidiaries’ operations, and bring in various resources so as to strengthen its operational capabilitiesin this respect.
KonkaGroupCo.,Ltd.
InterimReport2019
Part V Significant Events
I AnnualandExtraordinary General Meetings ConvenedduringReporting Period
1.General MeetingsConvened duringReporting Period
|||||||
|-|-|-|-|-|-|
|Meeting|Type|Investorparticipationratio|Conveneddate|Dateofresolutiondisclosure|Indextodisclosedresolutions|
|The1stExtraordinaryGeneralMeetingof2019|Extraordinary|24.31％|20February2019|21February2019|http://www.cninfo.com.cn/new/index|
|2018AnnualGeneralMeeting|Annual|36.06％|13May2019|14May2019||

2. Extraordinary General Meetings Convened at Request of Preferred Shareholders with Resumed Voting Rights
□Applicable√ Not applicable
II Interim DividendPlan
□Applicable√ Not applicable
The Company has nointerim dividend plan, eitherin theform ofcash orstock.
III Commitments of theCompany’s Actual Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and Other Entities Fulfilled in Reporting Period or Ongoing atPeriod-End
□Applicable√ Not applicable
No suchcases in theReporting Period.
IVEngagement andDisengagement ofIndependentAuditor
Are theinterim financial statements audited?
□Yes√ No
The interim financial statements are unaudited.
V Explanations Given by Board of Directors and Supervisory Committee Regarding IndependentAuditor's “Modified Opinion”forReporting Period
□Applicable√ Not applicable
VI Explanations Given by Board of Directors Regarding Independent Auditor's “Modified Opinion”forLastYear
□Applicable√ Not applicable
VII Insolvency andReorganization
□Applicable√ Not applicable
No suchcases in theReporting Period.
KonkaGroupCo.,Ltd.
InterimReport2019
VIII Legal Matters
Material lawsuits orarbitrations:
√Applicable□ Not applicable
|||||||||
|-|-|-|-|-|-|-|-|
|Generalinformation|Involvedamount(RMB’0,000)|Provision|Progress|Decisionsandeffects|Executionofdecisions|Disclosuredate|Indextodisclosedinformation|
|As for thedetails, please refer to the Notes 2. Description of the Contingencies of the Commitments and the Contingencies ofChapterXIIoftheNotestotheFinancialReport.||||||||

Other legal matters:
□Applicable√ Not applicable
IXPunishments andRectifications
□Applicable√ Not applicable
No suchcases in theReporting Period.
X Credit Quality of the Company as well as Its Controlling Shareholder and Actual Controller
□Applicable√ Not applicable
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for Employees
□Applicable√ Not applicable
No suchcases in theReporting Period.
XII Major Related-Party Transactions
1.Continuing Related-Party Transactions
√Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Relatedparty|RelationshipwiththeCompany|Typeoftransaction|Specifictransaction|Pricingprinciple|Transactionprice|Totalvalue(RMB’0,000)|As%oftotalvalueofallsame-typetransactions|Approvedtransactionline(RMB’0,000)|Overtheapprovedlineornot|Methodofsettlement|Obtainablemarketpriceforsame-typetransactions|Disclosuredate|Indextodisclosedinformation|
|OCTEnterprisesCo.,Ltdanditssubsidiaries|Underthesameactualcontroller|Purchaseofcommodi|Purchaseofmate|Negotiatedprice|Marketprice|922.56|0.07%|2,000|Not|Cash|N/A|30March2019|http://www.cninfo.com.cn/ne|

KonkaGroupCo.,Ltd.
InterimReport2019
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||tiesandservices|rialsandservices||||||||||w/index|
|OCTEnterprisesCo.,Ltdanditssubsidiaries|Underthesameactualcontroller|Salesofgoodsandservices|SalesofLCDandservices|Negotiatedprice|Marketprice|1,852.09|0.13%|3,000|Not|Cash|N/A|||
|Total||||--|--|2,774.65||5000|--|--|--|--||
|Large-amountsalesreturnindetail||||N/A||||||||||
|Give the actual situation in the Reporting Period (ifany) where an estimate had been made for the totalvalue of continuing related-party transactions by typetooccurintheReportingPeriod||||The Company has published the Forecasting Public Notice on Routine Related-partyTransaction for 2019 on Securities Times, Shanghai Securities News and China SecuritiesJournal as well as the Internet website designated by CSRChttp://http://www.cninfo.com.cn/new/index on 30 March 2019. In the Reporting Period, thebasisforpricing,transactionprice,transactionamountandsettlementmethodsofrawmaterialspurchased by the Company were basically inaccordance with the forecast.The total amountwasRMB27.7465million.||||||||||
|Reason for any significant difference between thetransaction price and the market reference price (ifapplicable)||||N/A||||||||||

2.Related-Party TransactionsRegarding Purchase orSales ofAssets orEquity Interests□Applicable√ Not applicable
3.Related TransactionsRegarding JointInvestments inThirdParties
□Applicable√ Not applicable
No suchcases in theReporting Period.
4.Credits andLiabilities with Related Parties
√Applicable□Not applicable
Indicate by tick mark whether there were any credits and liabilities with related parties for non-operating purposes.
√Yes□No
Credits receivable with related parties:
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Relatedparty|Relatedrelationship|Formingreason|Whetherthereisoccupationonnon-opera|Beginningbalance(RMB’0,000)|IncreasedintheReportingPeriod(RMB’0,0|RecoveredintheReportingPeriod(RMB’0,0|Interestrate|InterestintheReportingPeriod(RMB’0,|Endingbalance(RMB’0,000)|

KonkaGroupCo.,Ltd.
InterimReport2019
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||tingcapitalornot||00)|00)||000)||
|YibinOCTSanjiangRealEstateCo.,Ltd.|Subsidiaryofcontrollingshareholder|Borrowings|Not|10,000|0|0|5.70%|286.58|10,000|
|EffectsofcreditswithrelatedpartiesontheCompany’soperatingresultsandfinancialconditions||||None||||||

Liabilities payable with related parties:
||||||||||
|-|-|-|-|-|-|-|-|-|
|Relatedparty|Relatedrelationship|Formingreason|Beginningbalance(RMB’0,000)|IncreasedintheReportingPeriod(RMB’0,000)|RepaidintheReportingPeriod(RMB’0,000)|Interestrate|InterestintheReportingPeriod(RMB’0,000)|Endingbalance(RMB’0,000)|
|OCTEnterprisesCo.,Ltd.|Controllingshareholder|TheCompanyappliesentrustedloantoit|10,000.00|||5.40%|271.50|10,000.00|
||||2,000.00|||5.60%|56.31|2,000.00|
||||140,000.00||140,000.00|6.00%|3,080.00||
||||48,000.00|||5.00%|1,448.00|48,000.00|
||||100,000.00|||6.00%|3,016.67|100,000.00|
|||||22,192.44||5.00%|295.90|22,192.44|
||||27,656.00|||5.00%|656.83|27,656.00|
||||50,000.00||39,192.44|5.00%|127.82|10,807.56|
||||50,000.00|||5.00%|1,256.94|50,000.00|
|||||27,807.56|27,807.56|5.00%|520.39||
|||||17,000.00|17,000.00|5.00%|63.75||
|||||140,000.00||5.00%|941.11|140,000.00|
||||10,000.00|||5.40%|271.50|10,000.00|
|Effects of liabilities with related parties onthe Company’s operating results andfinancialconditions||||The Company applies entrusted loan from OCT EnterprisesCo., Ltd. which meets the needs of the Company's existingbusinessdevelopmentandreducesthefinancingcost.|||||

5.Other Major Related-Party Transactions
√Applicable□ Not applicable
KonkaGroupCo.,Ltd.
InterimReport2019
(1) Transfer of equity interests of Chuzhou Konka TID: The 11th Meeting of the 9th Board of Directors of the Company held on 6 June 2019 approved the Proposal onTransfer of51% of Equity Interests of Chuzhou Konka Technology& Industry Development Co., Ltd. by Agreement and the Company decided to transfer51% equity interests of Chuzhou Konka Technology& Industry Development Co., Ltd. to Shenzhen OCT Capital Investment Management Co., Ltd. via agreement with the price of RMB63.5205 million. At present, the Company has received the share transfer payment and the registration changing procedures of Chuzhou Konka Technology& Industry Development Co.,Ltd. has been completed.
Index tothepublicannouncements about thesaid related-party transactions disclosed
||||
|-|-|-|
|Titleofpublicannouncement|Disclosuredate|Disclosurewebsite|
|Announcement on Transfer of 51% ofEquities of Chuzhou Konka Technology &Industry Development Co., Ltd. andRelated-partyTransactions|11June2019|http://http://www.cninfo.com.cn/new/index|

XIII Occupation of theCompany’s Capital by Controlling Shareholder or Its Related Parties forNon-Operating Purposes
□Applicable√ Not applicable
No suchcases in theReporting Period.
XIV Major Contracts andTheirExecution
1.Entrustment, Contracting and Leases
(1) Entrustment
□Applicable√ Not applicable
No suchcases in theReporting Period.
(2) Contracting
□Applicable√ Not applicable
No suchcases in theReporting Period.
(3) Leases
√Applicable□ Not applicable
No suchcases in theReporting Period.
During the reporting period, KangjiaR&D Building charged about 37.3187 million yuan in rent. Projects that bring profits and losses to the company more than10% of the total profits in the reporting period
□Applicable√ Not applicable
During the reporting period, there is no leasing project which brings profits and losses to the
company upto10%ofthetotal profits ofthe company during the reporting period.
2.Major guarantees
√Applicable□ Not applicable
KonkaGroupCo.,Ltd.
InterimReport2019
(1) Guarantees
Unit:RMB'0,000
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|GuaranteesprovidedbytheCompanyanditssubsidiariesforexternalparties(exclusiveofthoseforsubsidiaries)||||||||||
|Obligor|Disclosuredateoftheguaranteelineannouncement|Lineofguarantee|Actualoccurrencedate(dateofagreementsigning)||Actualguaranteeamount|Typeofguarantee|Termofguarantee|Havingexpiredornot|Guaranteeforarelatedpartyornot|
|JiangxiXinxinJiananEngineeringCo.,Ltd.||10,000|12December2016||10,000|Joint-liability||Not|Not|
|JiangxiZhongyiDecorationMaterialsCo.,Ltd.||10,000|12December2016||10,000|Joint-liability||Not|Not|
|JiangxiShanshiTechnologicalDevelopmentCo.,Ltd.||10,000|12December2016||10,000|Joint-liability||Not|Not|
|TotalapprovedlineforsuchguaranteesintheReportingPeriod(A1)|||1,281|Total actual amount of such guarantees in theReportingPeriod(A2)|||||0|
|TotalapprovedlineforsuchguaranteesattheendoftheReportingPeriod(A3)|||208,781|Total actual balance of such guarantees at theendoftheReportingPeriod(A4)|||||30,000|
|GuaranteesprovidedbetweentheCompanyandsubsidiaries||||||||||
|Obligor|Disclosuredateoftheguaranteelineannouncement|Lineofguarantee|Actualoccurrencedate(dateofagreementsigning)||Actualguaranteeamount|Typeofguarantee|Termofguarantee|Havingexpiredornot|Guaranteeforarelatedpartyornot|
|AnhuiTongchuang|31March2017,23May2018and19September2018|90,000|7November2018||5,800|Joint-liability|Oneyear|Not|Not|
||||9May2018||4,500|Joint-liability||Not|Not|

KonkaGroupCo.,Ltd.
InterimReport2019
||||||||||
|-|-|-|-|-|-|-|-|-|
||||19June2018|3,000|Joint-liability||Not|Not|
||||20September2018|5,500|Joint-liability|Oneyear|Not|Not|
||||10January2019|3,000|Joint-liability|Oneyear|Not|Not|
||||11January2019|10,000|Joint-liability|Oneyear|Not|Not|
||||23January2019|5,000|Joint-liability|Oneyear|Not|Not|
||||24June2019|3,000|Joint-liability|Oneyear|Not|Not|
|AnhuiKonka|31March2017|110,000|6December2018|10,000|Joint-liability|Oneyear|Not|Not|
|KonkaFactoring|31March2018|300,000|21September2018|20,000|Joint-liability|Oneyear|Not|Not|
|EconTechnology|19September2018|120,000|10October2018|3,135|Joint-liability|Oneyear|Not|Not|
||||23April2019|2,000|Joint-liability|Oneyear|Not|Not|
||||13May2019|5,000|Joint-liability|Oneyear|Not|Not|
|JiangxiKonka|31October2018|60,000|4December2018|10,000|Joint-liability|Oneyear|Not|Not|
||||7December2018|10,000|Joint-liability|Oneyear|Not|Not|
||||18March2019|11,961|Joint-liability|Twoyears|Not|Not|
||||28February2019|10,000|Joint-liability|Oneyear|Not|Not|
||||27June2019|6,000|Joint-liability|Oneyear|Not|Not|
|XingDaHongYe|19September2018and30March2019|20,000|21November2018|5,800|Joint-liability|Oneyear|Not|Not|
||||19April2019|4,000|Joint-liability|Oneyear|Not|Not|
||||20May2019|1,000|Joint-liability|Oneyear|Not|Not|
|Electronics|19September2018|350,000|18April2019|58,000|Joint-liability|One|Not|Not|

KonkaGroupCo.,Ltd.
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|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Technology||||||||||||year||||
||||||20June2019||||5,000||Joint-liability|Oneyear|Not||Not|
|AnhuiElectricalAppliance||19September2018|30,000||2February2019||||13,000||Joint-liability|Fiveyears|Not||Not|
|BoluoKonkaPrecision||31March2018|5,000||20February2019||||2,500||Joint-liability|Twoyears|Not||Not|
|HongKongKonka||31March2017and31October2018|365,258||13March2019||||15,868||Joint-liability|Oneyear|Not||Not|
||||||7August2018||||10,349||Joint-liability|Oneyear|Not||Not|
|SichuanKonka||31March2018|55,000||18March2019||||4,000||Joint-liability|Threeyears|Not||Not|
|XinfengMicrocrystalline||30March2019|25,000||19June2019||||7,200||Joint-liability|Oneyear|Not||Not|
|NanoCrystallizedGlass||30March2019|45,000||26June2019||||10,000||Joint-liability|Threeyears|Not||Not|
|KonkaPengrun||19September2018|20,000||24June2019||||5,000||Joint-liability|Oneyear|Not||Not|
|Total approved line for such guarantees in theReportingPeriod(B1)||||||140,200|Total actual amount of such guarantees in theReportingPeriod(B2)|||||||181,529||
|TotalapprovedlineforsuchguaranteesattheendoftheReportingPeriod(B3)||||||2,043,394|Total actual balance of such guarantees at theendoftheReportingPeriod(B4)|||||||263,813||
|Guaranteesprovidedbetweensubsidiaries||||||||||||||||
|Obligor|Disclosuredateoftheguaranteelineannouncement||Lineofguarantee|Actualoccurrencedate(dateofagreementsigning)||||Actualguaranteeamount||Typeofguarantee||Termofguarantee|Havingexpiredornot||Guaranteeforarelatedpartyornot|
|SichuanKonka|||14,000|28May2018||||14,000||Joint-liability||Sevenyears|Not||Not|
|RushanEcon|||29,000|29December2016||||29,000||Joint-liability||Tenyears|Not||Not|
|XingDaHongYe|||1,000|13November2018||||1,000||Joint-liability||Twoyears|Not||Not|

KonkaGroupCo.,Ltd.
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||||||||
|-|-|-|-|-|-|-|
|Total approved line for such guarantees in theReportingPeriod(C1)||0|Total actual amount of such guarantees in theReportingPeriod(C2)|||0|
|Total approved line for such guarantees at the endoftheReportingPeriod(C3)||87,300|Total actual balance of such guarantees at theendoftheReportingPeriod(C4)|||44,000|
|Totalguaranteeamount(totalofthethreekindsofguaranteesabove)|||||||
|Total guarantee line approved in the ReportingPeriod(A1+B1+C1)|141,481||Total actual guarantee amount in theReportingPeriod(A2+B2+C2)||181,529||
|Total approved guarantee line at the end of theReportingPeriod(A3+B3+C3)|2,339,475||Total actual guarantee balance at the end oftheReportingPeriod(A4+B4+C4)||337,813||
|Totalactualguaranteeamount(A4+B4+C4)as%oftheCompany’snetassets|||41.00%||||
|Ofwhich:|||||||
|Balanceofguaranteesprovidedforshareholders,actualcontrollerandtheirrelatedparties(D)||||0|||
|Balanceofdebtguaranteesprovideddirectlyorindirectlyforobligorswithanover70%debt/assetratio(E)||||337,813|||
|Amountbywhichthetotalguaranteeamountexceeds50%oftheCompany’snetassets(F)||||0|||
|Totalofthethreeamountsabove(D+E+F)||||337,813|||
|JointresponsibilitiespossiblyborneintheReportingPeriodforundueguarantees(ifany)||||N/A|||
|Provisionofexternalguaranteesinbreachoftheprescribedprocedures(ifany)||||N/A|||

 Compound guarantees:
None
(2) Irregularities inProvision ofGuarantees
□Applicable√ Not applicable
No suchcases in theReporting Period.
3.Other Major Contracts
□Applicable√ Not applicable
No suchcases in theReporting Period.
XV Corporate Social Responsibility(CSR)
1.Material Environmental Issues
Is the Company or any of its subsidiaries is identified as a major polluter by the environmental protection authorities?
Yes
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Nameofpolluter|Nameofmajorpollutants|Wayofdischarge|Numberofdischargeoutlets|Distributionofdischargeoutlets|Dischargeconcentration|Dischargestandardsimplemented|Totaldischarge|Approvedtotaldischarge|Excessivedischarge|

KonkaGroupCo.,Ltd.
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|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|XingDaHongYe|Pollutionsourcesofwastewater:PH、copper、COD、ammonianitrogen、totalnitrogen、totalphosphorus|Dischargeofstationarypollutionsources|1|Maindischargeoutletofthewastewaterstation|PH6-9；copper≤0.5mg/L；COD≤80mg/L；ammonianitrogen≤15mg/L；totalnitrogen≤20mg/L；totalphosphorus≤1mg/L|ElectroplatingwaterpollutantdischargestandardDB44/1597-2015Table1|44.8milliontons/year|Totaldischarge448,500tons/year;pollutantCOD24.891tons/year;ammonianitrogen3.982tons/year;totalnitrogen9.373tons/year;totalphosphorus0.439tons/year|None|
||wastegaspollutants:sulfuricacidfume,hydrogenchloride,formaldehyde,hydrogencyanide,nitrogenoxide,ammonia, benzene,methylbenzene,TVOC,tinanditscompounds,PM(dust),oilfume|Dischargeofstationarypollutionsources|14|Threeontheroofofoneplant,tenontheroofoftwoplantsandoneontheroofofthecanteen|sulfuricacidfume≤30mg/m3；nitrogenoxide≤200mg/m3；hydrogenchloride≤30mg/m3；TVOC≤90mg/m3；benzene≤12mg/m3；methylbenzen≤40mg/m3；dimethylbenzene≤70mg/m3；tinanditscompounds≤8.5mg/m3；PM（dust）≤120mg/m3；oilfume≤2mg/m3|EmissionStandardforElectroplatingPollutantsGB21900-2008AirEmissionLimitsTable5,GuangdongAirPollutantEmissionStandardDB44/27-2001theSecondLevelStandardintheSecondPeriod,EmissionstandardforOdorPollutants(GB14554-1993)Table2Standard,Emissionstandardofcookingfume(GB18483-2001)|2,986,560,000standardcube/year|2,986,560,000standardcube/year(note:thetotaldischargeisnotstatedinthelatestversionofnationaldischargepermitin2018;twoexhausttowerswereaddedin2018;calculatedbasedonairvolumeinenvironmentalimpactassessment)|None|

(1)Theconstruction ofanti-pollution facilities andits operation situation
All production equipment of Guangdong Xingda Hongye Electronics Co., Ltd. has been set up with supporting environmental protection facilities according to the requirements of environmental impact assessment. The discharge of wastewater, waste gas and noise as well as the disposal of all solid wastes in theCompany all met thestandards during theReporting Period.
The sewage treatment centre of Guangdong Xingda Hongye Electronics Co., Ltd. with an investment of about RMB15 million was formally put into production in June 2007, and the treatment capacity of the sewage treatment facility was 2,566 tons/day.After technical improvement
and expansion, the capacity increased to 2,900 tons/day with the treatment process remaining
unchanged. Currently, the sewage treatment facilities are functioning well and the main pollutant
KonkaGroupCo.,Ltd.
InterimReport2019
discharge meets the discharge standards and environmental assessment standards. The pollutants are discharged toFushachong after being treated at theself-built sewage treatment station.
(2) Environmental impact assessment and other environmental protection administrative licenses of the construction project
Guangdong Xingda Hongye Electronics Co., Ltd. obtained the approval from Zhongshan Environmental Protection Bureau (ZHJ[2004] No. 61) for the operations and construction here in 2004. Subsequently, it obtained the documents of ZHJD[2008] No. 06250 and ZHJD[2010] No. 04469 respectively in 2008 and 2010. After the operations of its original project, Guangdong Xingda Hongye Electronics Co., Ltd. passed the two phases of acceptance assessment, including the Phase I acceptance assessment in 2008 (HY[2008] No. 02) and the Phase II acceptance assessment in 2012(ZHYBG[2012]No. 000092).
In December 2012, Guangdong Xingda Hongye Electronics Co., Ltd. commissioned Zhongshan Research Institute of Environmental Protection Science to conduct the assessment of environmental impact for the technical improvement and expansion project of Guangdong Xingda Hongye Electronics Co., Ltd. On December 31, 2012, it obtained the approval document titled Reply to the Report on the Environmental Impact of the Technical Improvement and Expansion Project of Guangdong Xingda Hongye Electronics Co., Ltd. (ZHJS (2012) No. 115) from Zhongshan Environmental Protection Bureau. The document granted the approval for addition of the production of six-layer PCB, eight-layer PCB and above and HDI boards and for reduction of the production of single-sided PCB. After the technical improvement and expansion, the total production capacity of single-sided PCB would be 200,000 m2/year, of double-sided PCB would be 250,000 m2/year, of four-layer PCB would be 300,000 m2/year, of six-layer PCB would be 200,000 m2/year, of eight-layer PCB and above would be 150,000 m2/year and of HDI boards would be 100,000 m2/year. In the project, while the original plating equipment and processes remained unchanged, the brown oxide process was added to the original production process; all the increased plating capacity would be outsourced. The technical improvement and expansion project was commenced in 2013 and completed in January 2018. The commissioning was carried out from February 10, 2018 to July 8, 2018. The construction of the project complied with the requirements for environmental impact assessment and met the criteria for the acceptance of environmental protection for the completion of construction projects. In 2018, the Company obtained the state sewage permit,certificate No.: 91442000768405216J001P.
(3) Contingency plan for emergent environmental incident
In strict accordance with requirements of laws, regulations and relevant documents, such as Law of thePeople’s Republic of China on Emergency Response and Interim Measures on Environmental Emergency Response Plan, Guangdong Xingda Hongye Electronics Co., Ltd. has established risk prevention measures and emergency response plans, kept its emergency equipment in a normal state,
KonkaGroupCo.,Ltd.
InterimReport2019
formulated the Contingency Plan for Emergent Environmental Incident, and put on records at Zhongshan Environmental Protection Bureau, Guangdong Province, record No.: 4420002017044M. In addition, the Company conducts a drill of major environmental pollution incident on its factory to enhanceits emergency response capabilities for emergent environmental pollution incidents. Furthermore, Guangdong Xingda Hongye Electronics Co., Ltd. has built an emergency pool (which is the comprehensive water tank in the sewage treatment station covering an area of 800m3) and set up a fire pool (500m3and located on Floor 1 of Factory Building No. 2), which serve as temporary storage pools for exterior drainage or fire drainage to eradicate accidental discharge of wastewater in the case of failed operation of the sewage transmission pipeline or fire accident due to outage or other special circumstances. The sewage transmission pipeline has been equipped with anti-corrosion and cathodic protection using anti-corrosion pipes and carbon steel pipes. Pursuant to the new discharge standards, the related discharge pipeline has been modified and the production department has been required to discharge strictly in accordance with discharge standards to cut the costs of wastewater treatment. Different types of wastewater are normally and properly treated through fine shunting. Personnel have been specially arranged to manage the chemical liquid warehouse and exert reasonable control and requirements over the liquid discharge by the plant and timely transportation of the liquid by suppliers; emergency tools such as protective masks, boots and immisciblepumps have been equipped;
(4) Environmental self-monitoring plan
According to the requirements of the Environmental ProtectionAdministration, Guangdong Xingda Hongye Electronics Co., Ltd. attaches great importance to environmental monitoring management. Thus, pursuant to the Measures for Self-Monitoring and Information Disclosure of National Key Monitored Enterprises, the Report on the Environmental Impact of the Technical Improvement and Expansion Project of Guangdong Xingda Hongye Electronics Co., Ltd. and the reply opinions for environmental impact assessment, the Company has formulated the Environmental Self-Monitoring Plan and reported to the municipal environmental protection bureau for approval and record. It implements online monitoring for the PH, COD and ammonia nitrogen pollutants discharged in wastewater through real-time monitoring and an automatic frequency of every two hours, entrusts the qualified third-party online monitoring equipment operation and maintenance institute to carry out periodic maintenance on automatic monitoring equipment and monitoring data networking equipment, and entrusts the qualified third-party monitoring unit to carry out the “three wastes” project monitoring. All self-monitoring plan results will be reported and disclosed on public platforms ona periodicbasis.
In the case of normal production, the results will be updated on a daily basis, with online monitoring data disclosed in real time and manual monitoring data disclosed on the next day after completion. In the case of public holidays, the operation monitoring data for the holiday period will
KonkaGroupCo.,Ltd.
InterimReport2019
be disclosed on the first working day after the holiday. Items monitored on a monthly basis will be disclosed by the 25th day of the month. Items inspected on a quarterly basis will be disclosed by the 25th day of the last month of the quarter. The annual self-monitoring report for the previous year will be disclosed at the end of January each year. In the case of shutdown with days off, the number of days off will be indicated in the information bar and related proofs will be submitted to the monitoring center ofthemunicipal environmental bureau forrecord.
The results are disclosed on Guangdong Province Key Pollution Source Regulatory Information Platform and on National Pollution Source Monitoring Information Management and Sharing Platform for publicmonitoring.
(5) Other environmental information that shouldbedisclosed
The environmental protection investment of Guangdong Xingda Hongye Electronics Co., Ltd. for H1 of 2019 was approximately RMB5.8 million, mainly used as the environmental engineering investment (approximately RMB0.8 million) and the operation of environmental protection equipment (approximatelyRMB5 million).
(6) Other Environmental Information
According to the examination by the Company, the Company and its other holding subsidiaries are not key pollutant units. All have faithfully implemented the laws and regulations related to environmental protection, such as Environmental Protection Law of the People's Republic of China, Water Pollution Prevention and Control Law of the People's Republic of China, Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution, Law of the People's Republic of China on Prevention and Control of Pollution From Environmental Noise, Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste in the daily production and operation, without being punished for violations of laws and regulations during theReporting Period.
2.Measures TakenforTargeted Poverty Alleviation
(1) Targeted poverty alleviation plans
In accordance with the guiding principles of the state on the development of precision poverty alleviation, the Company has proactively carried out critical work on poverty alleviation and engaged inthetargeted support inSansui County andTianzhuCounty in GuizhouProvince.
(2) Summary of theRelated Work Donein theReporting Period
During the Reporting Period, the Company took active steps to help Sansui County to carry out the marketing work in respect of Sansui ducks, including product sales and package planning, which effectively drove the sales of local subsidiary agricultural products. In the H1 of 2019, the Company has donated office supplies of approximately RMB378,000, including television sets and books to the two counties.
KonkaGroupCo.,Ltd.
InterimReport2019
(3) Results ofTargeted Measures
||||
|-|-|-|
|Indicator|Measurementunit|Quantity/Progress|
|1.Generalresults|——|——|
|Including:materialstranslation|Tenthousand|37.8|
|2.Itemizedresults|——|——|
|9Otheritems|——|——|
|9.2Amountofinput|Tenthousand|37.8|

 (4) SubsequentPlans
To fully perform its duties of targeted poverty alleviation, the Company will do a good job for the work on public brand establishment of no more than RMB1.58 million which will be used for the package planning and advertisement promotion ofSansui ducks ofSansui County.
XVI. OtherSignificantEvents
√Applicable□ Not applicable
(1) Private placement of corporate bonds, asset securitization of commercial factoring and asset securitization of accounts receivable: Currently, the private placement of corporate bonds of RMB5 billion has been issued; the asset securitization of commercial factoring and asset securitization of accounts receivable are inmovingforward.
(2) Nanjing Kangxingyun Headquarters Base Project has completed the transfer of17% equity of the project company inMarch 2019.
(3) TheCompany’s application for a private A-share placement was accepted for processing by the CSRC on 20 May 2019, and the Company has disclosed its reply to theCSRC’s questions regarding the application. Following the receipt of the Notification of the CSRC on the Discontinuation of the Processing of an Administrative Permit Application on 29 July 2019, the Company has recently applied to the CSRC for the resumption of the processing. It is uncertain whether both the processing resumption and the privateA-share placement will beapproved bytheCSRCornot. (4) Disclosure index ofsignificant information
||||||
|-|-|-|-|-|
|AnnouncementNo.|Date|Title|Pageonnewspaper|Linkonhttp://www.cninfo.com.cn|
|2019-01|4January2019|AnnouncementontheProgressofOfferingGuaranteestotheMajority-ownedSubsidiary|SecuritiesTimesB29,ShanghaiSecuritiesNews64etc.|http://http://www.cninfo.com.cn/new/index|
|2019-02|15January2019|AnnouncementontheProgressofOfferingGuaranteestothewholly-ownedsubsidiary|SecuritiesTimesB13,ShanghaiSecuritiesNews48etc.||

KonkaGroupCo.,Ltd.
InterimReport2019
|||||
|-|-|-|-|
|2019-03|16January2019|AnnouncementontheResultofPrivatePlacementofCorporateBondsin2019(PhaseI)|SecuritiesTimesB32,ShanghaiSecuritiesNews33etc.|
|2019-04|18January2019|AnnouncementontheProgressofOfferingGuaranteestotheMajority-ownedSubsidiary|SecuritiesTimesB36,ShanghaiSecuritiesNews76etc.|
|2019-05|25January2019|AnnouncementontheProgressofOfferingGuaranteestothewholly-ownedsubsidiary|SecuritiesTimesB29,ShanghaiSecuritiesNews36etc.|
|2019-06|26January2019|Announcementonthe2018EarningsForecasts|SecuritiesTimesB20,ShanghaiSecuritiesNews32etc.|
|2019-07|2February2019|AnnouncementontheResolutionofthe4thMeetingofthe9thBoardofDirectors|SecuritiesTimesB36,ShanghaiSecuritiesNews33etc.|
|2019-08|2February2019|NoticeonConveningthe1stExtraordinaryGeneralMeetingof2019|SecuritiesTimesB36,ShanghaiSecuritiesNews33etc.|
|2019-09|2February2019|AnnouncementonExternalFinancialAidsGeneratedfromPlannedTransferofPartialEquityofSubsidiaries|SecuritiesTimesB36,ShanghaiSecuritiesNews33etc.|
|2019-10|12February2019|AnnouncementontheProgressofOfferingGuaranteestotheMajority-ownedSubsidiary|SecuritiesTimesB25,ShanghaiSecuritiesNews85etc.|
|2019-11|15February2019|AnnouncementonAccumulativeNewBorrowings|SecuritiesTimesB12,ShanghaiSecuritiesNews76etc.|
|2019-12|2February2019|AnnouncementontheResolutionofthe1stExtraordinaryGeneralMeetingof2019|SecuritiesTimesB42,ShanghaiSecuritiesNews40etc.|
|2019-13|14March2019|AnnouncementontheProgressofOfferingGuaranteestotheMajority-ownedSubsidiary|SecuritiesTimesB28,ShanghaiSecuritiesNews56etc.|
|2019-14|19March2019|AnnouncementontheProgressofOfferingGuaranteestotheMajority-ownedSubsidiary|SecuritiesTimesB92,ShanghaiSecuritiesNews92etc.|
|2019-15|19March2019|AnnouncementonVolunteerInformationDisclosureofPre-winningtheBidforProject|SecuritiesTimesB92,ShanghaiSecuritiesNews92etc.|
|2019-16|19March2019|AnnouncementonAbnormalVolatilityofStockTrading|SecuritiesTimesB116,ShanghaiSecuritiesNews40etc.|

KonkaGroupCo.,Ltd.
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|||||
|-|-|-|-|
|2019-17|19March2019|IndicativeAnnouncementonPlanningofPrivatePlacementofShares|SecuritiesTimesB116,ShanghaiSecuritiesNews40etc.|
|2019-18|21March2019|AnnouncementonOfferingOverseasLoanunderDomesticGuaranteetoForeignWholly-ownedSubsidiary|SecuritiesTimesB29,ShanghaiSecuritiesNews48etc.|
|2019-19|28March2019|AnnouncementonVolunteerInformationDisclosureofPre-winningtheBidforProject|SecuritiesTimesB33,ShanghaiSecuritiesNews40etc.|
|2019-20|29March2019|AnnouncementonInformationDisclosureofVoluntarinessofReceivingLetterofAcceptance|SecuritiesTimesB128,ShanghaiSecuritiesNews428etc.|
|2019-21|30March2019|AnnouncementontheAbstractofthe2018AnnualReport|SecuritiesTimesB41,ShanghaiSecuritiesNews529etc.|
|2019-22|30March2019|Announcementonthe2018AnnualReport||
|2019-23|30March2019|AnnouncementontheResolutionofthe7thMeetingofthe9thBoardofDirectors|SecuritiesTimesB41,ShanghaiSecuritiesNews529etc.|
|2019-24|30March2019|AnnouncementontheResolutionofthe8thMeetingofthe9thSupervisoryCommittee|SecuritiesTimesB41,ShanghaiSecuritiesNews529etc.|
|2019-25|30March2019|AnnouncementonExternalGuarantees|SecuritiesTimesB42,ShanghaiSecuritiesNews529etc.|
|2019-26|30March2019|AnnouncementontheChangesofPartofAccountingPolicies|SecuritiesTimesB42,ShanghaiSecuritiesNews530etc.|
|2019-27|30March2019|AnnouncementontheExpectationofthe2019RoutineRelatedTransaction|SecuritiesTimesB43,ShanghaiSecuritiesNews530etc.|
|2019-28|30March2019|AnnouncementonInvolvingNumberofSubscriptorsafterPenetrationofSubscriptorsforPrivatePlacementofA-shares|SecuritiesTimesB42,ShanghaiSecuritiesNews530etc.|
|2019-29|30March2019|AnnouncementonRiskWarningsofDilutionofImmediateReturnsbyPrivatePlacementofA-sharesandCompensationMeasures|SecuritiesTimesB42,ShanghaiSecuritiesNews530etc.|
|2019-30|30March2019|AnnouncementonInvolvingRelated-partyTransactionsforPrivatePlacementofA-shares|SecuritiesTimesB42,ShanghaiSecuritiesNews530etc.|

KonkaGroupCo.,Ltd.
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|||||
|-|-|-|-|
|2019-31|30March2019|ExplanationonNoNeedtoPreparationofSpecialReportonUseofPreviousRaisedFunds|SecuritiesTimesB43,ShanghaiSecuritiesNews530etc.|
|2019-32|30March2019|AnnouncementonConditionalShareSubscriptionAgreementSignedbytheCompanywiththeSubscriptor|SecuritiesTimesB43,ShanghaiSecuritiesNews530etc.|
|2019-33|30March2019|AnnouncementonParticularsaboutSupervisionMeasuresTakenbyandPunishmentsMadebySecuritiesSupervisionDepartmentsfortheFiveYears|SecuritiesTimesB43,ShanghaiSecuritiesNews530etc.|
|2019-34|8April2019|AnnouncementonVolunteerInformationDisclosureofProjectPre-concluded|SecuritiesTimesB45,ShanghaiSecuritiesNews60etc.|
|2019-35|12April2019|Announcementonthe2019FirstQuarter EarningsForecasts|SecuritiesTimesB48,ShanghaiSecuritiesNews40etc.|
|2019-36|12April2019|AnnouncementonPlannedListingtoTransferPartialSharesofKonkaE-display|SecuritiesTimesB48,ShanghaiSecuritiesNews40etc.|
|2019-36|20April2019|AnnouncementontheResolutionofthe8thMeetingofthe9thBoardofDirectors|SecuritiesTimesB64,ShanghaiSecuritiesNews84etc.|
|2019-37|20April2019|NoticeonConveningthe2018AnnualGeneralMeeting|SecuritiesTimesB64,ShanghaiSecuritiesNews84etc.|
|2019-38|27April2019|AnnouncementontheProgressofOfferingGuaranteestotheMajority-ownedSubsidiary|SecuritiesTimesB116,ShanghaiSecuritiesNews108etc.|
|2019-39|30April2019|AnnouncementontheProgressofOfferingGuaranteestotheMajority-ownedSubsidiary|SecuritiesTimesB233,ShanghaiSecuritiesNews616etc.|
|2019-40|30April2019|2019FirstQuarterReport|SecuritiesTimesB233,ShanghaiSecuritiesNews616etc.|
|2019-41|30April2019|Textofthe2019FirstQuarterReport|SecuritiesTimesB233,ShanghaiSecuritiesNews616etc.|
|2019-42|30April2019|AnnouncementontheResolutionofthe9thMeetingofthe9thBoardofDirectors|SecuritiesTimesB233,ShanghaiSecuritiesNews616etc.|
|2019-43|30April2019|AnnouncementonEstablishmentofHaimenHeadquartersforEastern|SecuritiesTimesB233,ShanghaiSecuritiesNews616etc.|

KonkaGroupCo.,Ltd.
InterimReport2019
|||||
|-|-|-|-|
|||ChinathroughInvestment||
|2019-44|7May2019|AnnouncementonInformationDisclosureofVoluntarinessofReceivingLetterofAcceptance|SecuritiesTimesB60,ShanghaiSecuritiesNews60etc.|
|2019-45|7May2019|AnnouncementonProgressofPlannedListingtoTransferSharesofKonkaE-display|SecuritiesTimesB60,ShanghaiSecuritiesNews60etc.|
|2019-46|14May2019|AnnouncementontheResolutionofthe2018AnnualGeneralMeeting|SecuritiesTimesB85,ShanghaiSecuritiesNews85etc.|
|2019-47|17May2019|AnnouncementontheProgressofOfferingGuaranteestotheMajority-ownedSubsidiary|SecuritiesTimesB85,ShanghaiSecuritiesNews85etc.|
|2019-48|21May2019|AnnouncementontheResolutionofthe10thMeetingofthe9thBoardofDirectors|SecuritiesTimesB64,ShanghaiSecuritiesNews60etc.|
|2019-49|21May2019|AnnouncementonEstablishmentofEnvironmentalProtectionBusinessIndustrialParkthroughInvestment|SecuritiesTimesB64,ShanghaiSecuritiesNews60etc.|
|2019-50|23May2019|AnnouncementonCSRC’sAcceptanceforApplicationofPrivatePlacementofShares|SecuritiesTimesB27,ShanghaiSecuritiesNews44etc.|
|2019-51|28May2019|AnnouncementonVolunteerInformationDisclosureofPre-winningtheBidforProject|SecuritiesTimesB88,ShanghaiSecuritiesNews69etc.|
|2019-52|4June2019|AnnouncementonInformationDisclosureofVoluntarinessofReceivingLetterofAcceptance|SecuritiesTimesB71,ShanghaiSecuritiesNews48etc.|
|2019-53|5June2019|AnnouncementonResultofPrivatePlacementofCorporateBondsin2019(PhaseII)|SecuritiesTimesB44,ShanghaiSecuritiesNews44etc.|
|2019-54|11June2019|AnnouncementontheResolutionofthe11thMeetingofthe9thBoardofDirectors|SecuritiesTimesB42,ShanghaiSecuritiesNews49etc.|
|2019-55|11June2019|AnnouncementonTransferof51%EquityInterestsofChuzhouKonkaTechnology&IndustryDevelopmentCo.,Ltd.andRelated-partyTransactions|SecuritiesTimesB42,ShanghaiSecuritiesNews49etc.|
|2019-56|11June|AnnouncementontheProgressof|SecuritiesTimesB42,ShanghaiSecurities|

KonkaGroupCo.,Ltd.
InterimReport2019
|||||
|-|-|-|-|
||2019|OfferingGuaranteestotheSubsidiary|News49etc.|
|2019-57|14June2019|AnnouncementonCooperationAgreementSignedwithBishanGovernmentofChongqingProvince|SecuritiesTimesB4,ShanghaiSecuritiesNews120etc.|
|2019-58|18June2019|AnnouncementonListingtoTransferPartialSharesofKonkaE-display|SecuritiesTimesB61,ShanghaiSecuritiesNews33etc.|
|2019-59|25June2019|AnnouncementontheProgressofOfferingGuaranteestotheMajority-ownedSubsidiary|SecuritiesTimesB40,ShanghaiSecuritiesNews52etc.|
|2019-60|25June2019|AnnouncementonReceiptofCSRC’sNoticeontheFirstFeedbackforReviewofAdministrativePermissionProjects|SecuritiesTimesB40,ShanghaiSecuritiesNews52etc.|
|2019-61|25June2019|AnnouncementonCompletionofRegistrationChangingProceduresforTransferofPartialEquityofKonkaE-display|SecuritiesTimesB43,ShanghaiSecuritiesNews52etc.|
|2019-62|25June2019|AnnouncementonCompletionofRegistrationChangingProceduresforTransferof51%EquityInterestsofChuzhouKonkaTechnology&IndustryDevelopmentCo.,Ltd.|SecuritiesTimesB43,ShanghaiSecuritiesNews52etc.|
|2019-63|25June2019|AnnouncementonPendingLawsuitsandArbitrationswithlargeamount|SecuritiesTimesB102,ShanghaiSecuritiesNews76etc.|
|2019-64|27June2019|AnnouncementontheImplementationofDividendPlanof2018|SecuritiesTimesB91,ShanghaiSecuritiesNews29etc.|
|2019-65|28June2019|AnnouncementontheProgressofOfferingGuaranteestotheSubsidiary|SecuritiesTimesB128,ShanghaiSecuritiesNews36etc.|
|2019-66|29June2019|AnnouncementonWholly-ownedSubsidiary’receivingoftheGovernmentSubsidies|SecuritiesTimesB95,ShanghaiSecuritiesNews80etc.|

XVII. SignificantEvents ofSubsidiaries
□Applicable√ Not applicable
KonkaGroupCo.,Ltd.
InterimReport2019
Part VI Share Changes and Shareholder Information
I. ShareChanges
1.ShareChanges
Unit:share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before||Increase/decreaseintheReportingPeriod(+/-)|||||After||
||Shares|Percentage(%)|Newissues|Sharesasdividendconvertedfromprofit|Sharesasdividendconvertedfromcapitalreserves|Other|Subtotal|Shares|Percentage(%)|
|1.Restrictedshares|19,500|0.00%||||||19,500|0.00%|
|1.3 Shares held by otherdomesticinvestors|19,500|0.00%||||||19,500|0.00%|
|Among which: Sharesheld by domestic legalpersons||||||||||
|Sharesheldby domestic naturalpersons|19,500|0.00%||||||19,500|0.00%|
|2.Unrestrictedshares|2,407,925,908|100%||||||2,407,925,908|100%|
|2.1 RMB-denominatedordinaryshares|1,596,574,300|66.31%||||||1,596,574,300|66.31%|
|2.2 Domestically listedforeignshares|811,351,608|33.69%||||||811,351,608|33.69%|
|3.Totalshares|2,407,945,408|100%||||||2,407,945,408|100%|

 Reasons for share changes:
□Applicable√ Not applicable
Approval ofshare changes:
□Applicable√ Not applicable
Transfer of share ownership:
□Applicable√ Not applicable
Progress onany share repurchases:
□Applicable√ Not applicable
KonkaGroupCo.,Ltd.
InterimReport2019
Progress onreducing therepurchased shares bymeans ofcentralized bidding:
□Applicable√ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to theCompany’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period, respectively:
□Applicable√ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□Applicable√ Not applicable
2.Changes inRestricted Shares
□Applicable√ Not applicable
II. Issuance andListingof Securities
□Applicable√ Not applicable
III Shareholders andTheirHoldingsatPeriod-End
Unit:share
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Number of ordinaryshareholders||92,812||Number of preferred shareholders with resumed voting rights (ifany)(seenote8)||||||0||
|5%orgreaterordinaryshareholdersortop10ordinaryshareholders||||||||||||
|Nameofshareholder|Natureofshareholder||Shareholdingpercentage||Ordinaryshares|Increase/decreaseinReportingPeriod|Restrictedordinaryshares|Unrestrictedordinaryshares|Sharesinpledgeorfrozen|||
||||||||||Status||Shares|
|OVERSEAS CHINESETOWN ENTERPRISESCO.,LTD|State-ownedlegalperson||21.75%||523,746,932|0|0|523,746,932||||
|CITIC SECURITIESBROKERAGE (HONGKONG)CO.,LTD.|Foreignlegalperson||7.56%||182,100,202|0|0|182,100,202||||
|HOLY TIME GROUPLIMITED|Foreignlegalperson||2.33%||56,139,100|0|0|56,139,100||||
|GUOYUANSECURITIES BROKER(HK)CO.,LTD.|Foreignlegalperson||2.25%||54,203,779|0|0|54,203,779||||
|GAOLINGFUND,L.P.|Foreignlegalperson||2.19%||52,801,250|0|0|52,801,250||||

KonkaGroupCo.,Ltd.
InterimReport2019
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|ZHANGXIAOYU|Domesticnaturalperson|1.13%||27,283,178||3,447,900|0||27,283,178||
|HONG KONGSECURITIESCLEARING COMPANYLTD.|Foreignlegalperson|1.13%||27,256,732||17,445,071|0||27,256,732||
|CHINA MERCHANTSSECURITIES (HK)LIMITED|State-ownedlegalperson|0.95%||22,879,324||404,200|0||22,879,324||
|NAMNGAI|Foreignnaturalperson|0.93%||22,453,440||741,300|0||22,453,440||
|NATIONAL SOCIALSECURITY FUND-PORTFOLIO118|Other|0.88%||21,099,537||4,000,000|0||21,099,537||
|Strategic investor or general legal personbecoming top-10 ordinary shareholder due torightsissue(ifany)(seenote3)|||N/A||||||||
|Related or acting-in-concert parties amongshareholdersabove|||Jialong Investment Limited, a wholly-funded subsidiary of the Company’sfirst majority shareholder Overseas Chinese Town Enterprises Co. (“OCTGroup” for short), holds 180,001,110 and 18,360,000 ordinary shares in theCompanyrespectivelythroughCITICSecuritiesBrokerage(HongKong)Co.,Ltd. and China Merchants Securities (HK) Limited. Jialong InvestmentLimited and Overseas Chinese Town Enterprises Co. are parties acting inconcert. Other than that, it is unknown whether the other shareholders arerelatedpartiesoracting-in-concertpartiesornot.||||||||
|Top10unrestrictedordinaryshareholders|||||||||||
|Nameofshareholder|||||Unrestrictedordinaryshares|||Typeofshares|||
|||||||||Type||Shares|
|OVERSEASCHINESETOWNENTERPRISESCO.,LTD|||||523,746,932|||RMB-denominatedordinarystock||523,746,932|
|CITIC SECURITIES BROKERAGE (HONG KONG) CO.,LTD.|||||182,100,202|||Domesticallylisted foreignstock||182,100,202|
|HOLYTIMEGROUPLIMITED|||||56,139,100|||Domesticallylisted foreignstock||56,139,100|
|GUOYUANSECURITIESBROKER(HK)CO.,LTD.|||||54,203,779|||Domesticallylisted foreign||54,203,779|

KonkaGroupCo.,Ltd.
InterimReport2019
||||||
|-|-|-|-|-|
||||stock||
|GAOLINGFUND,L.P.||52,801,250|Domesticallylisted foreignstock|52,801,250|
|ZHANGXIAOYU||27,283,178|RMB-denominatedordinarystock|27,283,178|
|HONGKONGSECURITIESCLEARINGCOMPANYLTD.||27,256,732|RMB-denominatedordinarystock|27,256,732|
|CHINAMERCHANTSSECURITIES(HK)LIMITED||22,879,324|Domesticallylisted foreignstock|22,879,324|
|NAMNGAI||22,453,440|Domesticallylisted foreignstock|22,453,440|
|NATIONALSOCIALSECURITYFUND-PORTFOLIO118||21,099,537|RMB-denominatedordinarystock|21,099,537|
|Related or acting-in-concert partiesamong top 10 unrestricted ordinaryshareholders,aswellasbetweentop10unrestricted ordinary shareholders andtop10ordinaryshareholders|Jialong Investment Limited, a wholly-funded subsidiary of the Company’s firstmajority shareholder Overseas Chinese Town Enterprises Co. (“OCT Group” forshort), holds 180,001,110 and 18,360,000 common shares in the Companyrespectively through CITIC Securities Brokerage (Hong Kong) Co., Ltd. and ChinaMerchants Securities (HK) Limited. Jialong Investment Limited and OverseasChinese Town Enterprises Co. are parties acting in concert. Other than that, it isunknownwhethertheothershareholdersarerelatedpartiesoracting-in-concertpartiesornot.||||
|Top 10 ordinary shareholdersconductingsecuritiesmargintrading(ifany)(seenote4)|Zhang Xiaoyu holds 27,283,178 A-shares in the Company through her account ofcollateralsecuritiesformargintradinginHuaxiSecuritiesCo.,Ltd.||||

Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of theCompany conducted any promissory repo during theReporting Period.□Yea√ No
No suchcases in theReporting Period.
IVChangeof ControllingShareholderorActual Controllerin Reporting Period
Change ofthecontrolling shareholderin theReporting Period:
□Applicable√ Not applicable
No suchcases in theReporting Period.
Change oftheactual controller intheReporting Period:
□Applicable√ Not applicable
No suchcases in theReporting Period.
KonkaGroupCo.,Ltd.
InterimReport2019
Part VII Preferred Shares
□Applicable√ Not applicable
KonkaGroupCo.,Ltd.
InterimReport2019
Part VIII Directors, Supervisors, Senior Management and Staff I ChangeinShareholdings ofDirectors, Supervisors and SeniorManagement
□Applicable√ Not applicable
There was no change in shareholding of Directors, Supervisors, Senior Management Staffs and Employees, fordetails, please refer to2018Annual Report.
II ChangeofDirectors, Supervisors andSeniorManagement
□Applicable√ Not applicable
There was no change in Directors, Supervisors, Senior Management Staffs and Employees, for details, please refer to 2018Annual Report.
KonkaGroupCo.,Ltd. InterimReport2019 Part IX Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the dateofthisReport’s approval orwere due butcould notbe redeemed in full? Such information isdisclosed as below:
I. BasicInformation of Corporate Bonds
|||||||||
|-|-|-|-|-|-|-|-|
|Name|Abbr.|Code|Releasedate|Duedate|Bondsbalance(RMB’0,000)|Couponrate|Wayofredemption|
|Privatelyplacedcorporatebondsin2019ofKonkaGroupCo.,Ltd(TrancheI)(VarietyI)|19Konka01|114418|14January2019|14January2022|100,000|5.00%|Interestsshallbepaideveryyearandtheprincipalsshallberepaidwhenexpired.|
|Privatelyplacedcorporatebondsin2019ofKonkaGroupCo.,Ltd(TrancheI)(VarietyII)|19Konka02|114423|14January2019|14January2022|150,000|5.00%|Interestsshallbepaideveryyearandtheprincipalsshallberepaidwhenexpired.|
|Privatelyplacedcorporatebondsin2019ofKonkaGroupCo.,Ltd(TrancheII)(VarietyI)|19Konka03|114488|3June2019|3June2022|50,000|4.50%|Interestsshallbepaideveryyearandtheprincipalsshallberepaidwhenexpired.|
|Privatelyplacedcorporatebondsin2019ofKonkaGroupCo.,Ltd(TrancheII)(VarietyII)|19Konka04|114489|3June2019|3June2022|50,000|4.70%|Interestsshallbepaideveryyearandtheprincipals|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||||
|-|-|-|-|-|-|-|-|
||||||||shallberepaidwhenexpired.|
|Privatelyplacedcorporatebondsin2019ofKonkaGroupCo.,Ltd(TrancheIII)(VarietyI)|19Konka05|114523|22July2019|22July2022|80,000|4.53%|Interestsshallbepaideveryyearandtheprincipalsshallberepaidwhenexpired.|
|Privatelyplacedcorporatebondsin2019ofKonkaGroupCo.,Ltd(TrancheIII)(VarietyII)|19Konka06|114524|22July2019|22July2022|70,000|4.70%|Interestsshallbepaideveryyearandtheprincipalsshallberepaidwhenexpired.|
|Listed or transferred trading place of the Companybonds|||ShenzhenStockExchange|||||
|Appropriatearrangementoftheinvestors|||“19 Konka 01”, ” 19 Konka 02”, “19 Konka 03”, “19 Konka 04”, “19Konka 05” and “19 Konka 06” were placed privately to qualifiedinstitutional investors (not exceeding 200) meeting the requirements ofManagement method for Investors Eligibility in Bonds Market ofShenzhenStockExchange.|||||
|InterestpaymentduringtheReportingPeriod|||During the Reporting Period, “19 Konka 01”, ” 19 Konka 02”, “19Konka03”,“19Konka04”,“19Konka05”and“19Konka06”thefirstinterestpaymentdatedidnotarrive.|||||
|Execution of the relevant regulations during theReporting Period such as the affiliated option clauseoftheissuersorinvestors,specialclausessuchastheexchangeable regulations of the Company bonds (ifapplicable)|||1. Option for issuer to adjust coupon rate; 2. Put-backs option forinvestors;therewasnoimplementationofrelevantclauses.|||||

II. ListoftheBondTrustee andthe RatingOrganization
|||||||||
|-|-|-|-|-|-|-|-|
|Bondtrustee:||||||||
|Name|IndustrialSecuritiesCo.,Ltd|Officeaddress|Room601,No.35JinshifangStreet,Xicheng|Contactperson|PuHang,andZhangHuifang|Contactnumber|010-50911203|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|||District,Beijing||||
|RatingorganizationexecutedthetrackingratingofthecorporatebondsoftheReportingPeriod:||||||
|Name|UnitedRatingsCo.,Ltd.||Officeaddress|No.2 Jianwai Street, Chaoyang District,Beijing||
|Alternationreasons,executionprocessandinfluencesontheinvestors’interestsetc.iftherewasalternationofthebondtrusteesandthecreditratingagenciesengagedbytheCompanyduringtheReportingPeriod(ifapplicable)|||||No|

III. ListoftheUsage ofthe RaisedFunds ofthe Corporate Bonds
|||
|-|-|
|List oftheusageoftheraised fundsandthe execution process of the Companybonds|The Company has used the raised funds and disclosed related information in atimely,authentic,accurateandcompletemannerstrictlyinaccordancewiththetermsin the prospectus for aforesaid bonds, related provisions and requirements in theMeasures for Issuance and Trading of Corporate Bonds, CSRC Releases No. 2Guidelinefor theSupervision ofListed Companies-AdministrationofFundsRaisedby Listed Companies and Applicable Supervision Requirements, the Stock ListingRules of the Shenzhen Stock Exchange and the Rules of the Shenzhen StockExchange for Stock Listing on ChiNext. It has not engaged in any violations inrespectoftheuseandmanagementoftheraisedfunds.|
|Endingbalance(RMB’0,000)|0|
|Operating situation of the raised fundsspecialaccount|Theoperationwas ingoodconditionwithout anyviolationsfor relevantregulationsorcapitalsupervisionagreement|
|Whether the usage of the raised fundsmetwiththeusage,usingplanandotheragreementscommittedontheprospectus|Yes|

IV.Rating Situationof theCorporate Bonds Information
In May 2019, United Credit Ratings Co., Ltd. made the tracking rating for the entity and relevant bonds (including “19 Konka 01” and “19 Konka 02”) of the Company. The entity of the Company was rated as GradeAA invariably and as “Stable” for its rating prospect; the bonds “19 Konka 01” and “19 Konka 02” issued by Konka Group Co., Ltd. were rated as GradeAAAinvariably for their credit and as “Stable” for their rating prospect. The related rating report has been published on the website ofShenzhen StockExchange in May2019.
V. Credit-adding Mechanism, Repayment Plan and Other Repayment Guarantee Measures of theCorporate Bonds
OCT Group provided the unconditional and irrevocable joint liability guarantee in full amount for the bonds “19 Konka 01”, ” 19 Konka 02”, “19 Konka 03”, “19 Konka 04”, “19Konka 05” and “19
Konka 06”in theReporting Period.
VI.Convene SituationoftheBonds Holders Meeting during theReporting Period
No suchcases in theReporting Period.
KonkaGroupCo.,Ltd. InterimReport2019 VII. Listofthe Duty Execution oftheBonds Trustee during theReporting Period
During the Reporting Period, Industrial Securities Co., Ltd., theCompany’s bond trustee manager, proactively performed its trusteeship, continued to be concerned with theCompany’s routine production and operation and financial conditions, and endeavored to maintain the legitimate rights and interests of the bond holder strictly in accordance with related laws, regulations, the Management Measures for the Issue and Trading of Corporate Bonds, the Prospectus and the Agreement fortheBondTrusteeship Management.
VIII. The Major Accounting Data and the Financial Indicators of the Recent 2 Years of the Company upthe Period-end
Unit:RMB’0,000
|||||
|-|-|-|-|
|Item|2019|2018|Changerateofthesameperiod|
|Currentratio|109.37%|96.33%|13.04%|
|Asset-liabilityratio|74.08%|71.35%|2.73%|
|Quickratio|83.83%|72.13%|11.70%|
||ReportingPeriod|Sameperiodoflastyear|YoYChange|
|Times interest earned ofEBITDA|2.75|2.39|15.06%|
|Loanrepaymentrate|100.00%|100.00%|0.00%|
|Interestcoverage|100.00%|100.00%|0.00%|

 Main reason of the above accounting data and the financial indicators with the YoY change exceeded30%
□Applicable√ Not applicable
Pending
IX.OverdueLiabilities
□Applicable√ Not applicable
No suchcases in theReporting Period.
X. List of the Interest Payment of Other Bonds and Debt Financing Instruments during the Reporting Period
No suchcases in theReporting Period.
XI.Listofthe Acquired Bank CreditLines, Usageandthe Repayment oftheBankLoans As of the end of the Reporting Period, the Company acquired bank credit lines of RMB15,906,000,000 and used RMB9,458,000,000. All bank loans can be repaid on schedule without any overdue situations.
KonkaGroupCo.,Ltd. InterimReport2019 XII. List of the Execution of the Agreements or the Commitments Related to the Company Bonds RaisingSpecification duringthe Reporting Period
During the Reporting Period, the Company strictly observed the agreements and performed the commitments related to theCompanyBonds raising specification.
XIII. SignificantEvents Occurring during theReporting Period
During the Reporting Period, the Company has timely disclosed current announcements regarding significant events occurring the website of Shenzhen Stock Exchange (http://www.szse.cn/) and cninfo (http://www.cninfo.com.cn/new/index). As of the disclosure date of this Report, related significant events have nosubsequent progress yet.
XIV. Whetherthere Was Guarantor of theCorporate Bonds
√Yes□No
Whether theguarantor ofthecorporate bonds was legal person orother organizations
KonkaGroupCo.,Ltd. InterimReport2019 Part X Financial Statements
IIndependentAuditor’s Report
Arethese interim financial statements audited byan independent auditor?
□Yes√No
They are unaudited bysuch an auditor.
IIFinancialStatements
Currency unit for thefinancial statements andthenotes thereto: RMB
1.Consolidated Balance Sheet
Prepared byKonkaGroup Co., Ltd.
30June2019
Unit:RMB
||||
|-|-|-|
|Item|30June2019|31December2018|
|Currentassets:|||
|Monetarycapital|5,670,267,120.55|4,348,144,129.53|
|Settlementreserve|||
|Interbankloansgranted|||
|Tradingfinancialassets|61,494,666.97||
|Financialassetsatfairvaluethroughprofitorloss||5,464,984.92|
|Derivativefinancialassets|||
|Notesreceivable|2,002,435,052.51|3,329,711,954.15|
|Accountsreceivable|5,468,498,179.21|4,458,053,586.42|
|Financingbackedbyaccountsreceivable|107,299,247.91||
|Prepayments|2,948,687,941.58|1,036,979,167.56|
|Premiumsreceivable|||
|Reinsurancereceivables|||
|Receivablereinsurancecontractreserve|||
|Otherreceivables|990,966,330.41|410,804,180.50|
|Including:Interestreceivable|2,754,697.90|4,059,682.40|
|Dividendsreceivable|547,848.62|547,848.62|
|Financialassetspurchasedunderresaleagreements|||
|Inventories|5,810,235,773.06|5,487,605,227.05|
|Contractassets|||
|Assetsclassifiedasheldforsale|||

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|Currentportionofnon-currentassets|53,237,851.30|22,318,208.13|
|Othercurrentassets|1,766,535,360.02|2,744,216,141.98|
|Totalcurrentassets|24,879,657,523.52|21,843,297,580.24|
|Non-currentassets:|||
|Loansandadvancestocustomers|||
|Investmentsindebtobligations|||
|Available-for-salefinancialassets||633,664,881.33|
|Investmentsinotherdebtobligations|||
|Held-to-maturityinvestments|||
|Long-termreceivables|419,923,711.72|390,793,038.05|
|Long-termequityinvestments|2,846,608,296.03|2,637,780,825.53|
|Investmentsinotherequityinstruments|19,140,214.36||
|Othernon-currentfinancialassets|1,548,364,400.00||
|Investmentproperty|208,008,718.57|210,824,355.72|
|Fixedassets|2,228,083,633.72|2,410,226,495.81|
|Constructioninprogress|2,776,018,241.52|2,176,871,530.80|
|Productivelivingassets|||
|Oilandgasassets|||
|Right-of-useassets|||
|Intangibleassets|798,320,837.28|737,776,686.34|
|R&Dexpense|||
|Goodwill|855,691,423.75|855,691,423.75|
|Long-termprepaidexpense|101,104,614.34|111,223,426.77|
|Deferredincometaxassets|810,334,747.43|639,433,954.30|
|Othernon-currentassets|448,155,098.47|337,477,690.39|
|Totalnon-currentassets|13,059,753,937.19|11,141,764,308.79|
|Totalassets|37,939,411,460.71|32,985,061,889.03|
|Currentliabilities:|||
|Short-termborrowings|13,163,667,813.10|13,884,132,931.63|
|Borrowingsfromcentralbank|||
|Interbankloansobtained|||
|Tradingfinancialliabilities|||
|Financialliabilitiesatfairvaluethroughprofitorloss||2,459,603.25|
|Derivativefinancialliabilities|||
|Notespayable|1,109,481,840.84|862,330,689.47|
|Accountspayable|4,701,864,444.09|4,362,723,050.33|

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|Advancesfromcustomers|894,789,245.88|723,227,529.20|
|Financialassetssoldunderrepurchaseagreements|||
|Customerdepositsandinterbankdeposits|||
|Payablesforactingtradingofsecurities|||
|Payablesforunderwritingofsecurities|||
|Payrollpayable|218,974,626.78|376,506,567.71|
|Taxespayable|278,624,661.17|288,004,192.44|
|Otherpayables|2,367,030,105.41|2,024,657,277.74|
|Including:Interestpayable|99,998,242.67|27,230,631.41|
|Dividendspayable|240,794,540.80||
|Handlingchargesandcommissionspayable|||
|Reinsurancepayables|||
|Contractliabilities|||
|Liabilitiesdirectlyassociatedwithassetsclassifiedasheldforsale|||
|Currentportionofnon-currentliabilities|14,095,773.04|151,792,404.13|
|Othercurrentliabilities|||
|Totalcurrentliabilities|22,748,528,510.31|22,675,834,245.90|
|Non-currentliabilities:|||
|Insurancecontractreserve|||
|Long-termborrowings|1,284,700,000.00|445,000,000.00|
|Bondspayable|3,489,910,901.50||
|Including:Preferredshares|||
|Perpetualbonds|||
|Leaseliabilities|||
|Long-termpayables|223,522,236.53|128,374,597.41|
|Long-termpayrollpayable|5,670,450.62|8,792,614.98|
|Provisions|1,597,591.51|21,772,898.37|
|Deferredincome|207,308,469.89|112,899,128.24|
|Deferredincometaxliabilities|144,462,027.47|141,020,093.34|
|Othernon-currentliabilities|||
|Totalnon-currentliabilities|5,357,171,677.52|857,859,332.34|
|Totalliabilities|28,105,700,187.83|23,533,693,578.24|
|Owners’equity:|||
|Sharecapital|2,407,945,408.00|2,407,945,408.00|
|Otherequityinstruments|||
|Including:Preferredshares|||

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|Perpetualbonds|||
|Capitalreserves|237,761,961.98|208,356,624.21|
|Less:Treasurystock|||
|Othercomprehensiveincome|-14,198,105.77|-10,538,219.08|
|Specificreserve|71,737.08||
|Surplusreserves|1,227,564,785.19|1,227,564,785.19|
|Generalreserve|||
|Retainedearnings|4,380,496,417.52|4,271,408,192.21|
|Total equity attributable to owners of the Company astheparent|8,239,642,204.00|8,104,736,790.53|
|Non-controllinginterests|1,594,069,068.88|1,346,631,520.26|
|Totalowners’equity|9,833,711,272.88|9,451,368,310.79|
|Totalliabilitiesandowners’equity|37,939,411,460.71|32,985,061,889.03|

 Legalrepresentative:LiuFengxi ChiefFinancialOfficer:LiChunlei Headoffinancialdepartment:FengJunxiu 2.Balance Sheet ofthe Companyas theParent
Unit:RMB
||||
|-|-|-|
|Item|30June2019|31December2018|
|Currentassets:|||
|Monetarycapital|2,867,121,320.63|2,124,335,536.69|
|Tradingfinancialassets|61,494,666.97||
|Financialassetsatfairvaluethroughprofitorloss||5,464,984.92|
|Derivativefinancialassets|||
|Notesreceivable|1,588,216,743.04|2,181,466,683.90|
|Accountsreceivable|8,266,712,064.66|7,427,246,429.42|
|Financingsbackedbyaccountsreceivable|||
|Prepayments|1,304,083,759.55|1,019,335,571.49|
|Otherreceivables|7,868,891,877.59|6,667,463,126.57|
|Including:Interestreceivable|2,276,507.84|5,769,663.24|
|Dividendsreceivable|||
|Inventories|301,955,343.50|254,225,716.41|
|Contractassets|||
|Assetsclassifiedasheldforsale|||
|Currentportionofnon-currentassets|||
|Othercurrentassets|117,570,671.40|77,249,216.99|
|Totalcurrentassets|22,376,046,447.34|19,756,787,266.39|
|Non-currentassets:|||
|Investmentsindebtobligations|||

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|Available-for-salefinancialassets||326,164,881.33|
|Investmentsinotherdebtobligations|||
|Held-to-maturityinvestments|||
|Long-termreceivables|||
|Long-termequityinvestments|6,719,375,166.23|6,182,962,034.71|
|Investmentsinotherequityinstruments|14,440,214.36||
|Othernon-currentfinancialassets|250,230,000.00||
|Investmentproperty|208,008,718.57|210,824,355.72|
|Fixedassets|451,987,170.56|462,721,018.30|
|Constructioninprogress|161,343,003.34|157,356,696.30|
|Productivelivingassets|||
|Oilandgasassets|||
|Right-of-useassets|||
|Intangibleassets|80,790,288.02|83,593,959.11|
|R&Dexpense|||
|Goodwill|||
|Long-termprepaidexpense|70,335,791.97|80,388,949.97|
|Deferredincometaxassets|691,575,647.64|516,879,201.66|
|Othernon-currentassets|20,000,000.00|20,000,000.00|
|Totalnon-currentassets|8,668,086,000.69|8,040,891,097.10|
|Totalassets|31,044,132,448.03|27,797,678,363.49|
|Currentliabilities:|||
|Short-termborrowings|8,723,585,987.34|8,179,564,987.70|
|Tradingfinancialliabilities|||
|Financialliabilitiesatfairvaluethroughprofitorloss||2,459,603.25|
|Derivativefinancialliabilities|||
|Notespayable|2,067,605,961.65|3,513,157,955.43|
|Accountspayable|7,459,462,338.28|6,477,055,955.65|
|Advancesfromcustomers|314,025,058.94|306,650,717.69|
|Contractliabilities|||
|Payrollpayable|68,511,959.60|146,199,496.44|
|Taxespayable|7,095,620.80|10,913,871.30|
|Otherpayables|2,476,885,218.67|2,011,494,378.65|
|Including:Interestpayable|97,385,685.87|24,158,666.48|
|Dividendspayable|240,794,540.80||
|Liabilities directly associated with assets classified as heldforsale|||

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|Currentportionofnon-currentliabilities||40,000,000.00|
|Othercurrentliabilities|||
|Totalcurrentliabilities|21,117,172,145.28|20,687,496,966.11|
|Non-currentliabilities:|||
|Long-termborrowings|344,000,000.00|245,000,000.00|
|Bondspayable|3,489,910,901.50||
|Including:Preferredshares|||
|Perpetualbonds|||
|Long-termpayables|||
|Long-termpayrollpayable|||
|Provisions|||
|Deferredincome|206,591.51|206,591.51|
|Deferredincometaxliabilities|68,697,991.43|75,705,476.93|
|Othernon-currentliabilities||751,345.42|
|Totalnon-currentliabilities|||
|Totalliabilities|3,902,815,484.44|321,663,413.86|
|Owners’equity:|25,019,987,629.72|21,009,160,379.97|
|Sharecapital|||
|Otherequityinstruments|2,407,945,408.00|2,407,945,408.00|
|Including:Preferredshares|||
|Perpetualbonds|||
|Capitalreserves|||
|Less:Treasurystock|114,018,066.79|114,018,066.79|
|Othercomprehensiveincome|||
|Specificreserve|-1,182,217.31|-1,182,217.31|
|Surplusreserves|||
|Generalreserve|1,227,564,785.19|1,227,564,785.19|
|Retainedearnings|2,275,798,775.64|3,040,171,940.85|
|Totalowners’equity|6,024,144,818.31|6,788,517,983.52|
|Totalliabilitiesandowners’equity|31,044,132,448.03|27,797,678,363.49|

 3.Consolidated Income Statement
Unit:RMB
||||
|-|-|-|
|Item|H12019|H12018|
|1.Revenue|26,036,442,813.84|17,625,414,769.82|
|Including:Operatingrevenue|26,036,442,813.84|17,625,414,769.82|
|Interestincome|||

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|Premiumincome|||
|Handlingchargeandcommissionincome|||
|2.Costsandexpenses|26,698,772,822.16|17,974,204,673.13|
|Including:Costofsales|24,674,042,371.13|16,442,256,445.26|
|Interestexpense|||
|Handlingchargeandcommissionexpense|||
|Surrenders|||
|Netclaimspaid|||
|Net amount provided as insurance contractreserve|||
|Expenditureonpolicydividends|||
|Reinsurancepremiumexpense|||
|Taxesandsurcharges|37,389,092.27|27,646,574.62|
|Sellingexpense|1,067,945,914.36|1,103,181,074.51|
|Administrativeexpense|347,924,642.43|227,818,772.57|
|R&Dexpense|157,210,338.94|137,008,896.76|
|Financecosts|414,260,463.03|36,292,909.41|
|Including:Interestexpense|529,683,836.52|138,646,255.45|
|Interestincome|118,673,531.77|49,719,529.94|
|Add:Otherincome|343,884,971.36|123,026,283.50|
|Returnoninvestment(“-”forloss)|559,161,027.92|531,758,571.71|
|Including:Shareofprofitorlossofjointventuresandassociates|8,541,274.56|6,075,182.59|
|Incomefromthederecognitionoffinancialassetsatamortizedcost(“-”forloss)|||
|Foreignexchangegain(“-”forloss)|||
|Netgainonexposurehedges(“-”forloss)|||
|Gainonchangesinfairvalue(“-”forloss)|-3,005,381.67|59,855,412.48|
|Creditimpairmentloss(“-”forloss)|-49,476,223.76||
|Assetimpairmentloss(“-”forloss)|-11,717,767.29|-59,552,100.41|
|Assetdisposalincome(“-”forloss)|293,705,840.64|63,722,105.38|
|3.Operatingprofit(“-”forloss)|470,222,458.88|370,020,369.35|
|Add:Non-operatingincome|22,269,442.09|27,217,492.97|
|Less:Non-operatingexpense|3,469,741.51|5,951,749.57|
|4.Profitbeforetax(“-”forloss)|489,022,159.46|391,286,112.75|
|Less:Incometaxexpense|10,311,393.19|-17,446,049.13|
|5.Netprofit(“-”fornetloss)|478,710,766.27|408,732,161.88|
|5.1Byoperatingcontinuity|||

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|5.1.1 Net profit from continuing operations (“-” for netloss)|||
|5.1.2 Net profit from discontinued operations (“-” for netloss)|||
|5.2Byownership|||
|5.2.1Net profitattributabletoownersoftheCompanyastheparent|352,767,020.73|341,793,039.03|
|5.2.1Netprofitattributabletonon-controllinginterests|125,943,745.54|66,939,122.85|
|6.Othercomprehensiveincome,netoftax|-3,108,112.33|-4,400,958.71|
|AttributabletoownersoftheCompanyastheparent|-3,659,886.69|-4,851,840.74|
|6.1Itemsthatwillnotbereclassifiedtoprofitorloss|-4,800,000.00||
|6.1.1 Changes caused by remeasurements on definedbenefitpensionschemes|||
|6.1.2 Other comprehensive income that will not bereclassifiedtoprofitorlossundertheequitymethod|||
|6.1.3 Changes in the fair value of investments in otherequityinstruments|-4,800,000.00||
|6.1.4Changesinthefairvalueofthecompany’screditrisks|||
|6.1.5Other|||
|6.2Itemsthatwillbereclassifiedtoprofitorloss|1,140,113.31|-4,851,840.74|
|6.2.1 Other comprehensive income that will bereclassifiedtoprofitorlossundertheequitymethod|||
|6.2.2 Changes in the fair value of investments in otherdebtobligations|||
|6.2.3 Gain/Loss on changes in the fair value ofavailable-for-salefinancialassets||-31,342.08|
|6.2.4 Other comprehensive income arising from thereclassificationoffinancialassets|||
|6.2.5 Gain/Loss arising from the reclassification ofheld-to-maturity investments to available-for-sale financialassets|||
|6.2.6Allowance for credit impairments in investmentsinotherdebtobligations|||
|6.2.7Reserveforcashflowhedges|||
|6.2.8Differencesarisingfromthetranslationofforeigncurrency-denominatedfinancialstatements|1,140,113.31|-4,820,498.66|
|6.2.9Other|||
|Attributabletonon-controllinginterests|551,774.36|450,882.03|
|7.Totalcomprehensiveincome|475,602,653.94|404,331,203.17|
|AttributabletoownersoftheCompanyastheparent|349,107,134.04|336,941,198.29|
|Attributabletonon-controllinginterests|126,495,519.90|67,390,004.88|

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|8.Earningspershare|||
|8.1Basicearningspershare|0.1465|0.1419|
|8.2Dilutedearningspershare|0.1465|0.1419|

 Legalrepresentative:LiuFengxi ChiefFinancialOfficer:LiChunlei Headoffinancialdepartment:FengJunxiu 4.IncomeStatementof theCompany asthe Parent
Unit:RMB
||||
|-|-|-|
|Item|H12019|H12018|
|1.Operatingrevenue|5,368,021,710.40|6,556,568,515.30|
|Less:Costofsales|5,264,149,493.15|5,958,024,932.71|
|Taxesandsurcharges|3,050,245.87|10,295,805.36|
|Sellingexpense|602,937,451.39|796,586,717.96|
|Administrativeexpense|116,641,903.32|125,914,620.99|
|R&Dexpense|21,884,250.47|101,846,025.64|
|Financecosts|263,815,281.41|146,845,768.60|
|Including:Interestexpense|484,646,778.75|288,018,824.66|
|Interestincome|225,398,798.03|113,064,005.13|
|Add:Otherincome|25,883,962.58|42,392,110.12|
|Returnoninvestment(“-”forloss)|185,975,738.88|1,159,447,278.28|
|Including:Shareofprofitorlossofjointventuresandassociates|3,928,528.71|13,240,183.30|
|Incomefromthederecognitionoffinancialassetsatamortizedcost(“-”forloss)|||
|Netgainonexposurehedges(“-”forloss)|||
|Gainonchangesinfairvalue(“-”forloss)|-3,005,381.67|59,855,412.48|
|Creditimpairmentloss(“-”forloss)|-6,660,947.01||
|Assetimpairmentloss(“-”forloss)|-3,172,282.22|-36,873,991.62|
|Assetdisposalincome(“-”forloss)|200.00|18,949.32|
|2.Operatingprofit(“-”forloss)|-705,435,624.65|641,894,402.62|
|Add:Non-operatingincome|1,522,859.81|13,874,505.45|
|Less:Non-operatingexpense|957,357.54|5,440,364.14|
|3.Profitbeforetax(“-”forloss)|-704,870,122.38|650,328,543.93|
|Less:Incometaxexpense|-175,447,791.41|-86,913,171.05|
|4.Netprofit(“-”fornetloss)|-529,422,330.97|737,241,714.98|
|4.1Netprofitfromcontinuingoperations(“-”fornetloss)|-529,422,330.97|737,241,714.98|
|4.2Netprofitfromdiscontinuedoperations(“-”fornetloss)|||
|5.Othercomprehensiveincome,netoftax||324,021.02|
|5.1Itemsthatwillnotbereclassifiedtoprofitorloss|||

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|5.1.1 Changes caused by remeasurements on definedbenefitpensionschemes|||
|5.1.2 Other comprehensive income that will not bereclassifiedtoprofitorlossundertheequitymethod|||
|5.1.3 Changes in the fair value of investments in otherequityinstruments|||
|5.1.4 Changes in the fair value of the company’s creditrisks|||
|5.1.5Other|||
|5.2Itemsthatwillbereclassifiedtoprofitorloss||324,021.02|
|5.2.1 Other comprehensive income that will bereclassifiedtoprofitorlossundertheequitymethod|||
|5.2.2 Changes in the fair value of investments in otherdebtobligations|||
|5.2.3 Gain/Loss on changes in the fair value ofavailable-for-salefinancialassets|||
|5.2.4 Other comprehensive income arising from thereclassificationoffinancialassets|||
|5.2.5 Gain/Loss arising from the reclassification ofheld-to-maturity investments to available-for-sale financialassets|||
|5.2.6Allowance for credit impairments in investments inotherdebtobligations|||
|5.2.7Reserveforcashflowhedges|||
|5.2.8 Differences arising from the translation of foreigncurrency-denominatedfinancialstatements||324,021.02|
|5.2.9Other|||
|6.Totalcomprehensiveincome|-529,422,330.97|737,565,736.00|
|7.Earningspershare|||
|7.1Basicearningspershare|||
|7.2Dilutedearningspershare|||

5.Consolidated Cash Flow Statement
||||
|-|-|-|
|Item|H12019|H12018|
|1.Cashflowsfromoperatingactivities:|||
|Proceedsfrom sale of commodities andrendering ofservices|25,473,835,784.74|17,548,318,013.29|
|Net increase in customer deposits and interbankdeposits|||
|Netincreaseinborrowingsfromcentralbank|||
|Netincreaseinloansfromotherfinancialinstitutions|||
|Premiumsreceivedonoriginalinsurancecontracts|||

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|Netproceedsfromreinsurance|||
|Net increase in deposits and investments of policyholders|||
|Interest,handlingchargesandcommissionsreceived|||
|Netincreaseininterbankloansobtained|||
|Net increase in proceeds from repurchasetransactions|||
|Netproceedsforactingtradingofsecurities|||
|Taxrebates|507,670,463.23|234,219,656.63|
|Cashgeneratedfromotheroperatingactivities|2,148,795,820.05|1,477,259,476.38|
|Subtotalofcashgeneratedfromoperatingactivities|28,130,302,068.02|19,259,797,146.30|
|Paymentsforcommoditiesandservices|26,800,524,727.57|16,457,966,672.41|
|Netincreaseinloansandadvancestocustomers|||
|Net increase in deposits in central bank and ininterbankloansgranted|||
|Paymentsforclaimsonoriginalinsurancecontracts|||
|Netincreaseinfinancialassetsheldfortrading|||
|Netincreaseininterbankloansgranted|||
|Interest,handlingchargesandcommissionspaid|||
|Policydividendspaid|||
|Cashpaidtoandforemployees|926,887,184.41|830,723,675.14|
|Taxespaid|453,909,943.55|1,461,811,434.09|
|Cashusedinotheroperatingactivities|1,991,936,384.26|2,347,454,070.52|
|Subtotalofcashusedinoperatingactivities|30,173,258,239.79|21,097,955,852.16|
|Netcashgeneratedfrom/usedinoperatingactivities|-2,042,956,171.77|-1,838,158,705.86|
|2.Cashflowsfrominvestingactivities:|||
|Proceedsfromdisinvestment|221,738,210.00|42,903,231.61|
|Returnoninvestment|73,227,388.55|72,250,837.30|
|Net proceeds from the disposal of fixed assets,intangibleassetsandotherlong-livedassets|100,441,951.60|1,682,604.46|
|Net proceeds from the disposal of subsidiaries andotherbusinessunits|32,675,173.25|42,511,059.22|
|Cashgeneratedfromotherinvestingactivities|1,396,866,878.42|942,900,000.00|
|Subtotalofcashgeneratedfrominvestingactivities|1,824,949,601.82|1,102,247,732.59|
|Payments for the acquisition of fixed assets,intangibleassetsandotherlong-livedassets|642,392,906.08|140,086,476.23|
|Paymentsforinvestments|1,156,259,360.00|198,399,656.00|
|Netincreaseinpledgedloansgranted|||
|Net payments for the acquisition of subsidiaries and||232,126,165.53|

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|otherbusinessunits|||
|Cashusedinotherinvestingactivities|700,033,420.00|874,730,000.00|
|Subtotalofcashusedininvestingactivities|2,498,685,686.08|1,445,342,297.76|
|Netcashgeneratedfrom/usedininvestingactivities|-673,736,084.26|-343,094,565.17|
|3.Cashflowsfromfinancingactivities:|||
|Capitalcontributionsreceived|165,523,493.96|115,980,594.60|
|Including:Capitalcontributionsbynon-controllingintereststosubsidiaries|165,523,493.96|115,980,594.60|
|Borrowingsobtained|11,564,151,964.42|6,725,691,416.47|
|Netproceedsfromissuanceofbonds|3,487,750,000.00||
|Cashgeneratedfromotherfinancingactivities|350,346,627.50|1,023,076.93|
|Subtotalofcashgeneratedfromfinancingactivities|15,567,772,085.88|6,842,695,088.00|
|Repaymentsofborrowings|11,054,191,049.91|3,377,017,426.30|
|Paymentsforinterestanddividends|255,889,282.00|562,435,220.65|
|Including: Dividends paid by subsidiaries tonon-controllinginterests|||
|Cashusedinotherfinancingactivities|264,881,928.72|22,612,122.48|
|Subtotalofcashusedinfinancingactivities|11,574,962,260.63|3,962,064,769.43|
|Netcashgeneratedfrom/usedinfinancingactivities|3,992,809,825.25|2,880,630,318.57|
|4.Effect of foreign exchange ratechanges oncash andcashequivalents|-9,021,516.41|-35,288,115.64|
|5.Netincreaseincashandcashequivalents|1,267,096,052.81|664,088,931.90|
|Add: Cash and cash equivalents, beginning of theperiod|3,434,149,481.72|3,097,899,703.76|
|6.Cashandcashequivalents,endoftheperiod|4,701,245,534.53|3,761,988,635.66|

 Unit:RMB 6.CashFlowStatement oftheCompany as theParent
||||
|-|-|-|
|Item|H12019|H12018|
|1.Cashflowsfromoperatingactivities:|||
|Proceedsfromsaleof commoditiesandrenderingofservices|10,761,635,579.27|8,900,547,132.50|
|Taxrebates|30,608,798.86|80,805,268.47|
|Cashgeneratedfromotheroperatingactivities|6,301,905,413.21|1,231,787,065.42|
|Subtotalofcashgeneratedfromoperatingactivities|17,094,149,791.34|10,213,139,466.39|
|Paymentsforcommoditiesandservices|8,915,821,945.44|6,889,739,101.21|
|Cashpaidtoandforemployees|376,948,025.22|508,124,450.52|
|Taxespaid|30,146,084.97|1,139,215,454.64|

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|Cashusedinotheroperatingactivities|7,232,326,927.95|1,847,843,398.55|
|Subtotalofcashusedinoperatingactivities|16,555,242,983.58|10,384,922,404.92|
|Netcashgeneratedfrom/usedinoperatingactivities|538,906,807.76|-171,782,938.53|
|2.Cashflowsfrominvestingactivities:|||
|Proceedsfromdisinvestment|105,558,710.00|55,600,000.00|
|Returnoninvestment|40,874,813.31|77,823,977.16|
|Net proceeds from the disposal of fixed assets,intangibleassetsandotherlong-livedassets|198,805.64|28,777.00|
|Net proceeds from the disposal of subsidiaries andotherbusinessunits|||
|Cashgeneratedfromotherinvestingactivities|672,765,551.82|1,115,044,083.79|
|Subtotalofcashgeneratedfrominvestingactivities|819,397,880.77|1,248,496,837.95|
|Payments for the acquisition of fixed assets,intangibleassetsandotherlong-livedassets|39,488,957.39|54,103,982.64|
|Paymentsforinvestments|551,150,000.00|1,222,391,400.00|
|Net payments for the acquisition of subsidiaries andotherbusinessunits|||
|Cashusedinotherinvestingactivities|4,224,938,500.00|861,154,315.32|
|Subtotalofcashusedininvestingactivities|4,815,577,457.39|2,137,649,697.96|
|Netcashgeneratedfrom/usedininvestingactivities|-3,996,179,576.62|-889,152,860.01|
|3.Cashflowsfromfinancingactivities:|||
|Capitalcontributionsreceived|||
|Borrowingsobtained|3,954,465,982.73|3,216,716,364.16|
|Netproceedsfromtheissuanceofbonds|3,487,750,000.00||
|Cashgeneratedfromotherfinancingactivities|||
|Subtotalofcashgeneratedfromfinancingactivities|7,442,215,982.73|3,216,716,364.16|
|Repaymentsofborrowings|3,053,659,242.73|1,207,765,069.15|
|Paymentsforinterestanddividends|204,582,931.37|552,129,671.31|
|Cashusedinotherfinancingactivities|8,079,215.50|335,984,291.92|
|Subtotalofcashusedinfinancingactivities|3,266,321,389.60|2,095,879,032.38|
|Netcashgeneratedfrom/usedinfinancingactivities|4,175,894,593.13|1,120,837,331.78|
|4.Effect offoreignexchangeratechanges oncashandcashequivalents|-9,427,666.78|-75,185,223.64|
|5.Netincreaseincashandcashequivalents|709,194,157.49|-15,283,690.40|
|Add: Cash and cash equivalents, beginning of theperiod|1,497,794,555.85|1,743,269,944.67|
|6.Cashandcashequivalents,endoftheperiod|2,206,988,713.34|1,727,986,254.27|

Unit:RMB
KonkaGroupCo.,Ltd. InterimReport2019
7.Consolidated Statements ofChanges inOwners’Equity
H12019 Unit:RMB
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|H12019|||||||||||||||
||EquityattributabletoownersoftheCompanyastheparent|||||||||||||Non-controllinginterests|Totalowners’equity|
||Sharecapital|Otherequityinstruments|||Capitalreserves|Less:Treasurystock|Othercomprehensiveincome|Specificreserve|Surplusreserves|Generalreserve|Retainedearnings|Other|Subtotal|||
|||Preferredshares|Perpetualbonds|Other||||||||||||
|1.Balancesasattheendoftheprioryear|2,407,945,408.00||||208,356,624.21||-10,538,219.08||1,227,564,785.19||4,271,408,192.21||8,104,736,790.53|1,346,631,520.26|9,451,368,310.79|
|Add: Adjustments for changedaccountingpolicies|||||||||||-2,884,254.62||-2,884,254.62||-2,884,254.62|
|Adjustments for correctionsofpreviouserrors||||||||||||||||
|Adjustments for businesscombinations under commoncontrol||||||||||||||||
|Otheradjustments||||||||||||||||
|2. Balances as at thebeginningoftheyear|2,407,945,408.00||||208,356,624.21||-10,538,219.08||1,227,564,785.19||4,268,523,937.59||8,101,852,535.91|1,346,631,520.26|9,448,484,056.17|
|3. Increase/ decrease in theperiod(“-”fordecrease)|||||29,405,337.77||-3,659,886.69|71,737.08|||111,972,479.93||137,789,668.09|247,437,548.62|385,227,216.71|
|3.1 Total comprehensiveincome|||||||-3,659,886.69||||352,767,020.73||349,107,134.04|126,495,519.90|475,602,653.94|
|3.2 Capital increased andreducedbyowners||||||||||||||120,942,028.72|120,942,028.72|
|3.2.1Ordinaryshares||||||||||||||118,854,770.64|118,854,770.64|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|increasedbyshareholders|||||
|3.2.2Capitalincreasedbyholdersofotherequityinstruments|||||
|3.2.3Share-basedpaymentsincludedinowners’equity|||||
|3.2.4Other|||2,087,258.08|2,087,258.08|
|3.3Profitdistribution|-240,794,540.80|-240,794,540.80||-240,794,540.80|
|3.3.1 Appropriation tosurplusreserves|||||
|3.3.2 Appropriation togeneralreserve|||||
|3.3.3 Appropriation toowners(orshareholders)|-240,794,540.80|-240,794,540.80||-240,794,540.80|
|3.3.4Other|||||
|3.4 Transfers within owners’equity|||||
|3.4.1 Increase in capital(or share capital) from capitalreserves|||||
|3.4.2 Increase in capital(or share capital) from surplusreserves|||||
|3.4.3 Loss offset bysurplusreserves|||||
|3.4.4 Changes in definedbenefit pension schemestransferredtoretainedearnings|||||

KonkaGroupCo.,Ltd. InterimReport2019
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|3.4.5 Othercomprehensive incometransferredtoretainedearnings||||||||||
|3.4.6Other||||||||||
|3.5Specificreserve||||||||||
|3.5.1 Increase in theperiod||||||||||
|3.5.2Usedintheperiod||||||||||
|3.6Other||29,405,337.77||71,737.08|||29,477,074.85||29,477,074.85|
|4.Balancesasattheendoftheperiod|2,407,945,408.00|237,761,961.98|-14,198,105.77|71,737.08|1,227,564,785.19|4,380,496,417.52|8,239,642,204.00|1,594,069,068.88|9,833,711,272.88|

H12018 Unit:RMB
|||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|H12018|||||||||||||||
||EquityattributabletoownersoftheCompanyastheparent|||||||||||||Non-controllinginterests|Totalowners’equity|
||Sharecapital|Otherequityinstruments|||Capitalreserves|Less:Treasurystock|Othercomprehensiveincome|Specificreserve|Surplusreserves|Generalreserve|Retainedearnings|Other|Subtotal|||
|||Preferredshares|Perpetualbonds|Other||||||||||||
|1. Balances as at the end oftheprioryear|2,407,945,408.00||||104,732,242.30||3,697,458.95||1,217,644,874.79||4,260,125,492.57||7,994,145,476.61|204,044,330.78|8,198,189,807.39|
|Add: Adjustments forchangedaccountingpolicies||||||||||||||||
|Adjustments forcorrectionsofpreviouserrors||||||||||||||||
|Adjustments for businesscombinations under common||||||||||||||||

KonkaGroupCo.,Ltd. InterimReport2019
||||||||||
|-|-|-|-|-|-|-|-|-|
|control|||||||||
|Otheradjustments|||||||||
|2. Balances as at thebeginningoftheyear|2,407,945,408.00|104,732,242.30|3,697,458.95|1,217,644,874.79|4,260,125,492.57|7,994,145,476.61|204,044,330.78|8,198,189,807.39|
|3. Increase/ decrease in theperiod(“-”fordecrease)|||-4,851,840.74||-48,294,095.61|-53,145,936.35|482,418,710.00|429,272,773.65|
|3.1 Total comprehensiveincome|||-4,851,840.74||341,793,039.03|336,941,198.29|67,390,004.88|404,331,203.17|
|3.2 Capital increased andreducedbyowners|||||||415,028,705.12|415,028,705.12|
|3.2.1Ordinarysharesincreasedbyshareholders|||||||415,028,705.12|415,028,705.12|
|3.2.2Capitalincreasedbyholdersofotherequityinstruments|||||||||
|3.2.3Share-basedpaymentsincludedinowners’equity|||||||||
|3.2.4Other|||||||||
|3.3Profitdistribution|||||-390,087,134.64|-390,087,134.64||-390,087,134.64|
|3.3.1 Appropriation tosurplusreserves|||||||||
|3.3.2 Appropriation togeneralreserve|||||||||
|3.3.3 Appropriation toowners(orshareholders)|||||-390,087,134.64|-390,087,134.64||-390,087,134.64|
|3.3.4Other|||||||||
|3.4 Transfers withinowners’equity|||||||||

KonkaGroupCo.,Ltd. InterimReport2019
||||||||||
|-|-|-|-|-|-|-|-|-|
|3.4.1 Increase in capital(orsharecapital)fromcapitalreserves|||||||||
|3.4.2 Increase in capital(or share capital) fromsurplusreserves|||||||||
|3.4.3 Loss offset bysurplusreserves|||||||||
|3.4.4 Changes indefined benefit pensionschemes transferred toretainedearnings|||||||||
|3.4.5 Othercomprehensive incometransferred to retainedearnings|||||||||
|3.4.6Other|||||||||
|3.5Specificreserve|||||||||
|3.5.1 Increase in theperiod|||||||||
|3.5.2Usedintheperiod|||||||||
|3.6Other|||||||||
|4. Balances as at the end oftheperiod|2,407,945,408.00|104,732,242.30|-1,154,381.79|1,217,644,874.79|4,211,831,396.96|7,940,999,540.26|686,463,040.78|8,627,462,581.04|

8.Statements ofChangesinOwners’Equity oftheCompany as the Parent
H12019 Unit:RMB
KonkaGroupCo.,Ltd. InterimReport2019
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|H12019||||||||||||
||股本|Otherequityinstruments|||Capitalreserves|Less:Treasurystock|Othercomprehensiveincome|Specificreserve|Surplusreserves|Retainedearnings|Other|Totalowners’equity|
|||Preferredshares|Perpetualbonds|Other|||||||||
|1. Balances as at the end of theprioryear|2,407,945,408.00||||114,018,066.79||-1,182,217.31||1,227,564,785.19|3,040,171,940.85||6,788,517,983.52|
|Add: Adjustments for changedaccountingpolicies||||||||||-2,127,505.16||-2,127,505.16|
|Adjustments for corrections ofpreviouserrors|||||||||||||
|Otheradjustments||||||||||7,971,211.72||7,971,211.72|
|2. Balances as at the beginning oftheyear|2,407,945,408.00||||114,018,066.79||-1,182,217.31||1,227,564,785.19|3,046,015,647.41||6,794,361,690.08|
|3. Increase/ decrease in the period(“-”fordecrease)||||||||||-770,216,871.77||-770,216,871.77|
|3.1Totalcomprehensiveincome||||||||||-529,422,330.97||-529,422,330.97|
|3.2 Capital increased andreducedbyowners|||||||||||||
|3.2.1Ordinarysharesincreasedbyshareholders|||||||||||||
|3.2.2Capitalincreasedbyholdersofotherequityinstruments|||||||||||||
|3.2.3Share-basedpaymentsincludedinowners’equity|||||||||||||

KonkaGroupCo.,Ltd. InterimReport2019
||||||||
|-|-|-|-|-|-|-|
|3.2.4Other|||||||
|3.3Profitdistribution|||||-240,794,540.80|-240,794,540.80|
|3.3.1 Appropriation to surplusreserves|||||||
|3.3.2 Appropriation to owners(orshareholders)|||||-240,794,540.80|-240,794,540.80|
|3.3.3Other|||||||
|3.4 Transfers within owners’equity|||||||
|3.4.1 Increase in capital (orsharecapital)fromcapitalreserves|||||||
|3.4.2 Increase in capital (orsharecapital)fromsurplusreserves|||||||
|3.4.3 Loss offset by surplusreserves|||||||
|3.4.4 Changes in definedbenefitpensionschemestransferredtoretainedearnings|||||||
|3.4.5 Other comprehensiveincome transferred to retainedearnings|||||||
|3.4.6Other|||||||
|3.5Specificreserve|||||||
|3.5.1Increaseintheperiod|||||||
|3.5.2Usedintheperiod|||||||
|3.6Other|||||||
|4. Balances as at the end of theperiod|2,407,945,408.00|114,018,066.79|-1,182,217.31|1,227,564,785.19|2,275,798,775.64|6,024,144,818.31|

KonkaGroupCo.,Ltd. InterimReport2019
H12018 Unit:RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|H12018||||||||||||
||Sharecapital|Otherequityinstruments|||Capitalreserves|Less:Treasurystock|Othercomprehensiveincome|Specificreserve|Surplusreserves|Retainedearnings|Other|Totalowners’equity|
|||Preferredshares|Perpetualbonds|Other|||||||||
|1. Balances as at the end of theprioryear|2,407,945,408.00||||111,525,163.22||-1,970,304.62||1,217,644,874.79|3,327,627,676.56||7,062,772,817.95|
|Add: Adjustments for changedaccountingpolicies|||||||||||||
|Adjustments for corrections ofpreviouserrors|||||||||||||
|Otheradjustments|||||||||||||
|2. Balances as at the beginning oftheyear|2,407,945,408.00||||111,525,163.22||-1,970,304.62||1,217,644,874.79|3,327,627,676.56||7,062,772,817.95|
|3. Increase/ decrease in the period(“-”fordecrease)|||||||324,021.02|||347,154,580.34||347,478,601.36|
|3.1Totalcomprehensiveincome|||||||324,021.02|||737,241,714.98||737,565,736.00|
|3.2 Capital increased andreducedbyowners|||||||||||||
|3.2.1Ordinarysharesincreasedbyshareholders|||||||||||||
|3.2.2Capitalincreasedbyholdersofotherequityinstruments|||||||||||||
|3.2.3Share-basedpaymentsincludedinowners’equity|||||||||||||
|3.2.4Other|||||||||||||
|3.3Profitdistribution||||||||||-390,087,134.64||-390,087,134.64|

KonkaGroupCo.,Ltd. InterimReport2019
||||||||
|-|-|-|-|-|-|-|
|3.3.1Appropriationtosurplusreserves|||||||
|3.3.2Appropriationtoowners(orshareholders)|||||-390,087,134.64|-390,087,134.64|
|3.3.3Other|||||||
|3.4 Transfers within owners’equity|||||||
|3.4.1 Increase in capital (orsharecapital)fromcapitalreserves|||||||
|3.4.2 Increase in capital (orshare capital) from surplusreserves|||||||
|3.4.3 Loss offset by surplusreserves|||||||
|3.4.4 Changes in definedbenefit pension schemestransferredtoretainedearnings|||||||
|3.4.5 Other comprehensiveincome transferred to retainedearnings|||||||
|3.4.6Other|||||||
|3.5Specificreserve|||||||
|3.5.1Increaseintheperiod|||||||
|3.5.2Usedintheperiod|||||||
|3.6Other|||||||
|4. Balances as at the end of theperiod|2,407,945,408.00|111,525,163.22|-1,646,283.60|1,217,644,874.79|3,674,782,256.90|7,410,251,419.31|

KonkaGroupCo.,Ltd. InterimReport2019 Konka Group Co., Ltd.
Notes to Financial Statements for H1 2019
(All amounts areexpressed, unlessotherwisestated, inRenminbi (RMB).)
I. CompanyProfile
1.Establishment
Konka Group Co., Ltd. (hereinafter referred to as “Company” or “the Company”), is a joint-stock limited company reorganized from the former Shenzhen Konka Electronic Co., Ltd. in August 1991 upon approval of 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 of China Shenzhen Special Economic Zone Branch. On 29 August 1995, the Company was renamed to “Konka Group Co., Ltd.” (Credibility code: 914403006188155783) with its main business electronic industry.And now the headquarters locates in No. 28 of No. 12 of Keji South Rd., Science& Technology Park, Yuehai Street, Nanshan District, Shenzhen, Guangdong Province.
2.ShareCapital Changes uponEstablishment
On 27 November 1991, with approval from the SRYFZ No. 102[1991] document as issued by thePeople’s Bank of China Shenzhen Special Economic Zone Branch, Shenzhen Konka Electronic Co., Ltd., during 8 December1991—31 December 1991, has issued 128,869,000 RMB ordinary shares (A-share) at a par value of RMB1.00 per share, of which the original net assets were converted into 98,719,000 state-owned institutional shares, 30,150,000 new shares were issued, including 26,500,000 circulating shares issued to the public and 3,650,000staffshares issued to thestaffoftheCompany.
On 29 January 1992, with approval from the SRYFZ No. 106[1991] document as issued by thePeople’s Bank of China Shenzhen Special Economic Zone Branch, Shenzhen Konka Electronic Co., Ltd., during 20 December1991— 31 January 1992, has issued to investors abroad 58,372,300 RMB special shares (B-share) at a par value of RMB1.00 per share, of which 48,372,300 shares held by the former foreign investor andfounder—Hong Kong Ganghua Electronic Company Co., Ltd. are converted into foreign legalperson’s shares, and 10,000,000B-shares are issued additionally.
On 10 April 1993, the Proposal on Profit Distribution and Dividend Payout 1992 was adopted at the second general meeting of shareholders of the Company. With approval from the SZBF No. 2[1993] document as issued by Shenzhen Securities Regulatory Office, the Company began to perform dividend policy for FY 1992 as of 30 April 1993: distributing
KonkaGroupCo.,Ltd. InterimReport2019 RMB 0.90 in cash plus 3.5 bonus shares for every 10 shares to all shareholders. The total capital stock reached 187,473,150shares after this distribution.
On 18 April 1994, the Proposal on Profit Distribution and Dividend Payout 1993 was adopted at the third general meeting of shareholders of the Company.With approval from the SZBF No. 115[1994] document as issued by Shenzhen Securities Regulatory Office, the Company began to perform dividend policy for FY1993 as of 10 June 1994: distributing RMB 1.10 in cash plus 5 bonus shares (including 4.4 profit bonus shares and 0.6 bonus share capitalized from capital public reserve) for every 10 shares to all shareholders. The total capital stock reached 281,209,724 shares after this distribution and capitalization from capital publicreserve.
On 2 June 1994, in accordance with the provisions that “staff shares could go public and be transferred six months after listing”, as jointly promulgated by the State Commission for Restructuring the Economic System and the StateCouncil’s Securities Commission, the staff shares of the Company was planned to be listed on the flow on 6 June 1994, with the prior consent of Shenzhen Securities Regulatory Officeand Shenzhen StockExchange.
On 8 October 1994, the Proposal on Negotiable Bonus Shares of B-Share Corporate Shareholders 1992 was adopted at the interim general meeting of shareholders of the Company. With approval from the SZBF No. 224[1994] document as issued by Shenzhen Securities Regulatory Office, the 16,930,305.00 bonus shares for FY 1992 granted to foreign legal persons were listed and negotiated at B-sharemarket on26October 1994.
On 6 February 1996, the Proposal on Share Allotment Modes 1996 was adopted at the interim general metering of shareholders of the Company. With approval from the SZBF No. 5[1996] document as issued by Shenzhen Securities Regulatory Office, and re-examination from the ZJPSZ No. 16[1996] document and ZJGZ No. 2[1996] document as issued by China Securities Regulatory Commission, on 16 July 1996 and 29 October 1996, all shareholders were respectively allotted three shares for every ten existing shares held at RMB6.28/A-share and HKD5.85/B-share. Corporate shareholders took their respective existing shares as bases for full subscription of the allocable shares. The total capital stock reached 365,572,641.00shares after thisallotment.
On 25 January 1998, the Plan on Share Allotment 1998 was adopted at the interim general meeting of shareholders of the Company. With approval from the ZZBZ No. 29[1998] document as issued by Shenzhen Securities Regulatory Office, and ZJSZ No.64[1998] document as issued by China Securities Regulatory Commission, on 15 July 1998, negotiable A-shares were allotted in proportion of 3:10 at RMB10.50/A-share. For such reasons as
KonkaGroupCo.,Ltd. InterimReport2019 continued weakness in B-share secondary market (lower than share allotment price), B-share negotiation and allotment plan was cancelled, and the corporate shareholders of the Company waived the preemptive right. The total capital stock reached 389,383,603 shares after this allotment.
On 30 June 1999, the Proposal on Profit Distribution and Capitalization from Capital Public Reserve 1998 was adopted at the eighth general meeting of shareholders of the Company. On 20 August 1999, the profit distribution for FY 1998 was carried out: all shareholders were presented RMB3.00 in cash for every 10 shares, plus 2 shares capitalized from capital public reserve.The total capital stock reached 467,260,323.00shares after this capitalization.
On 30 June 1999, the Plan on A-Share Issue for Capital Increase was adopted at the eighth general meeting of shareholders of the Company. With approval from the ZJFXZ No.140[1999] document as issued by China Securities Regulatory Commission, on 1 November 1999, 80,000,000.00A-shares were additionally issued to the public at RMB15.50/share. The totalcapital stock reached 547,260,323.00 shares after thisadditional issue.
On 30 May 2000, the Plan on Profit Distribution and Dividend Payout 1999 was adopted at the ninth general meeting of shareholders of the Company. On 25 July 2000, the profit distribution for FY 1999 was carried out: all shareholders were distributed RMB4.00 in cash plus 1 bonus shares for every 10 shares. The total capital stock reached 601,986,352.00 shares after thisdistribution.
On 26 May 2008, the 2017 general meeting of shareholders s was convened, during which the following resolutions were discussed and adopted: based on the total capital stock of 601,986,352.00 shares for the year ended 31 December 2007, capitalization from capital public reserve was made to all shareholders at a proportion of 1:1, namely 10 new shares for every 10 existing shares. On 16 December 2008, with approval from the SMGZF No. 2662[2008] document as issued by Shenzhen Bureau of Trade and Industry, the Company was agreed to increase its share capital, and went through the formalities for registration of changes with the administration for industry and commerce on 10 April 2009. The total capital stock reached 1,203,972,704.00shares after change.
According to the regulations of the 2015 1st Extraordinary General Meeting and the revised articles of the Company, the Company applied to increase the registered capital of RMB1,203,972,704.00, which totally turned into capital reserve with the altered registered capital of RMB2,407,945,408.00 and managed the industrial and commercial alternation registration on28January 2016with thealtered share capital of2,407,945,408.00shares. 3. Approved business scope: research and development, production and operation of such
KonkaGroupCo.,Ltd. InterimReport2019 intelligent household electric appliances as televisions, refrigerators, washing machines, and personal electronic appliances, and kitchen and bathroom electronic appliances; manufacturing and application of home AV, IPTV set-top boxes, OTT terminal products, digital TV receivers (including ground receiving equipment of satellite television broadcasting), digital products, intelligent wearable products, intelligent health products, intelligent electric products, intelligent switch plug, power bank, mobile communication equipments and terminal products, daily-use electronic products, automotive electronic products, satellite navigation systems, intelligent transportation systems, fire-fighting and security systems, office equipments, computers, displays, large screen display systems; LED (OLED) back light, illumination, light-emitting devices, and packaging thereof; Touch TV AIO, wireless broadcasting television transiting equipment; emergency broadcast system equipment, electronic parts and components, moulds, plastic and rubber products, and packing materials, design and in-door installation security products, monitoring products, wireless and cable digital television system and system integration, and technical consultancy and after-sale paid services of related products (except mobile phone, the other products in the above business scope are manufactured in other places outside Shenzhen); Wholesale, retail, import& export and relevant support services of the aforesaid products (including spare parts) (Commodities subject to state trading management are not involved. Products involved in quota, license management and other specified management shall be subject to the relevant state provisions.); sale of self-developed technological achievements; provision of maintenance services, technical consultant service for electronic products; ordinary cargo transportation, domestic freight forwarding, international freight forwarding, and warehousing services; management of supply chain, consultancy on enterprise management; and self-owned property leasing and management services, recovery of waste electrical appliances and electronic products (excluding dissembling) (operated by branch offices); and outsourcing services of information technology and business procedures by means of undertaking services in the way of outsourcing, including management and maintenance of system application, management of information technology, bank background service, financial settlement, human resource service, software development, call centre, and data processing. Import& export business: domestic trade; international trade (excluding monopoly, exclusive control, and monopolized commodities); selling security products, intelligent household products, door lock, and hardware; doing various business entrusted by (Mobile, Unicom, Telecom, andBC&TV); Water pollution control, solid waste pollution treatment, hazardous waste pollution control, air pollution control, soil pollution control and
KonkaGroupCo.,Ltd. InterimReport2019 remediation;production (excluding mining) and sales of non-metallic mineral products and materials; development, production and sales of specific materials for semiconductor integrated circuits and component; assembly, production and sales of integrated device electronics, design,R&D, manufacturing, testing, packaging and sales of semiconductor integrated circuits, and sales, integrated circuit products and related technical services, technology development, transfer, import and export in the field of semiconductor integrated circuit technology.
4.The Company and its subsidiaries are mainly engaged in the production and sales of colour TVs, white goods, mobile phones, etc.; businesses regarding trade, industry and science and technology,environmental protection, commercial factoring, and etc.
5. The financial statements contained herein have been approved for issue by the Board of Directors of theCompany on5August 2019.
There were 123 subsidiaries included in the consolidation scope of 2019 of the Company, and please refer to the Notes VIII. “Equities among other entities” for details. There were 15 subsidiaries increased and 6 decreased in the consolidation scope of the Reporting Period over the last period of the Company, for details, see the Notes VII. “Changes of the consolidation scope”.
6.Acheck listofcorporate names and theirabbreviations mentioned in thisReport
Corporatename Abbreviation
AnhuiKonkaElectricalApplianceTechnologyCo.,Ltd. AnhuiElectricalAppliance
AnhuiKonkaElectronicCo.,Ltd. AnhuiKonka
AnhuiKonkaTongchuangElectricalAppliancesCo.,Ltd. AnhuiTongchuang
AnhuiKonkaZhilianE-CommerceCo.,Ltd. AnhuiZhilian
BeijingKonkaElectronicCo.,Ltd. BeijingKonkaElectronic
BoluoKonkaPrecisionTechnologyCo.,Ltd. BoluoKonkaPrecision
BoluoKonkaPCBCo.,Ltd. BoluoKonka
SichuanKonkaIndustrialNewTownDevelopmentCo.,Ltd. IndustrialNewTown
ChengduAnrenKonkaCulturalandCreativeIncubatorManagementCo.,Ltd. ChengduAnren
ChengduKonkaIncubatorManagementCo.,Ltd. ChengduKonkaIncubator
ChuzhouKangyongHealthIndustryDevelopmentCo.,Ltd. ChuzhouKangyong
ChuzhouKonkaTechnology&IndustryDevelopmentCo.,Ltd. ChuzhouKonkaTID
NanjingChuanghuiSmartTechnologyCo.,Ltd. ChuanghuiSmart
ShenzhenKonkaElectronicsTechnologyCo.,Ltd. ElectronicsTechnology
DongguanKonkaPackingMaterialsCo.,Ltd. DongguanPacking
DongguanKonkaElectronicCo.,Ltd. DongguanKonka
KonkaGroupCo.,Ltd. InterimReport2019 Corporatename Abbreviation
DongguanKonkaInvestmentCo.,Ltd. DongguanKonkaInvestment
HainanKonkaTechnologyIndustryDevelopmentCo.,Ltd. HainanTechnology
HefeiKONSEMIStorageTechnologyCo.,Ltd. HefeiKONSEMI
JialiInternational(HongKong)Limited JialiInternational
JiaxinTechnologyCo.,Ltd. JiaxinTechnology
JiangxiKonkaNewMaterialTechnologyCo.,Ltd. JiangxiKonka
KonkaElectricalAppliancesInternational KonkaElectricalAppliancesInternationalTradingCo.,Ltd.
Trading
KonkaElectricalAppliancesInvestment&DevelopmentCo.,Ltd. KonkaElectricalAppliancesInvestment KonkaFactoring(Shenzhen)Co.,Ltd. KonkaFactoring
HainanKonkaMaterialTechnologyCo.,Ltd. KonkaMaterial
KonkaVenturesDevelopment(Shenzhen)Co.,Ltd. KonkaVentures
GuiyangKonkaEnterpriseServiceCo.,Ltd. KonkaEnterpriseService
ShenzhenKonkaElectricalAppliancesCo.,Ltd. KonkaElectricalAppliances
KonkaHuanjia(Dalian)EnvironmentalTechnologyCo.,Ltd. KonkaHuanjia
KonkaHuanjia(Henan)EnvironmentalTechnologyCo.,Ltd. KonkaHuanjia(Henan)
ShenzhenKonkaUnifortuneTechnologyCo.,Ltd. KonkaUnifortune
GuizhouKonkaEnterpriseManagementServiceCo.,Ltd. KonkaEnterpriseManagement
KonkaRongheIndustrialTechnology(Foshan)Co.,Ltd. KonkaRonghe
ShenzhenKonkaEco-DevelopmentInvestmentCo.,Ltd. KonkaEco-Development
ShenzhenKonkaSuyuanInvestmentIndustrialCo.,Ltd. KonkaSuyuan
KonkaSuiyongInvestment(Shenzhen)Co.,Ltd. KonkaSuiyong
SichuanKangjiatongTechnologyCo.,Ltd. Kangjiatong
ShenzhenKonkaInvestmentHoldingCo.,Ltd. KonkaInvestment
ShenzhenKonkaE-displayCo.,Ltd. KonkaE-display
KonkaSmartTechLimited KonkaSmartTech
ShenzhenKonkaCapitalEquityInvestmentManagementCo.,Ltd. KonkaCapital
KonkaFinancialLeasing(Tianjin)Co.,Ltd. KonkaLeasing
Kangjietong(HongKong)Limited Kangjietong
ShenzhenKangqiaoEasyChainTechnologyCo.,Ltd. KangqiaoEasyChain
ShenzhenKangquanEnterpriseManagementConsultingCo.,Ltd. KangquanEnterprise
AnhuiKangzhiTradeCo.,Ltd. KangzhiTrade
ShenzhenKonkaCross-BorderTechnologicalInnovationServiceCo.,Ltd. Cross-BorderTechnologicalInnovation MudanjiangArcticOceanAppliancesCo.,Ltd. MudanjiangAppliances
JiangxiGoldenPhoenixNanoCrystallizedGlassCo.,Ltd. NanoCrystallizedGlass
KonkaGroupCo.,Ltd. InterimReport2019 Corporatename Abbreviation
NanjingKonkaSmartTechnologyCo.,Ltd. NanjingKonka
Konka(Europe)Co.,Ltd. KonkaEurope
ShenzhenKonkaElectronicFittingsTechnologyCo.,Ltd. FittingsTechnology
ShenzhenKonkaPengrunTechnology&IndustryCo.,Ltd. KonkaPengrun
XiamenDalongTradingCo.,Ltd. XiamenDalong
ShandongKangxinIndustrialDevelopmentCo.,Ltd. ShandongKangxin
ShenzhenKonkaCommercialSystemTechnologyCo.,Ltd. CommercialSystemTechnology
ShanghaiKonkaIndustrialCo.,Ltd. ShanghaiKonka
ShanghaiXinfengZhuoqunPCBCo.,Ltd. ShanghaiXinfeng
ShenzhenHuananInvestmentPartnership(LimitedPartnership) ShenzhenHuanan
ShenzhenKONSEMICo.,Ltd. ShenzhenKONSEMI
ShenzhenMeixinSemiconductorTechnologyCo.,Ltd. ShenzhenMeixin
ShenzhenNianhuaEnterpriseManagementCo.,Ltd. ShenzhenNianhua
ShenzhenKonkaLifeElectricApplianceCo.,Ltd. LifeElectricAppliance
ShenzhenKonkaShengxingIndustrialCo.,Ltd. ShengxingIndustrial
SichuanKonkaSmartTerminalTechnologyCo.,Ltd SichuanKonka
SuiningElectronicTechnological
SuiningKonkaElectronicTechnologicalInnovationCo.,Ltd.
Innovation
SuiningKonkaIndustrialParkDevelopmentCo.,Ltd. SuiningKonkaIndustrialPark
ShenzhenKonkaTelecommunicationsTechnologyCo.,Ltd. TelecommunicationTechnology
ShenzhenWankaidaScienceandTechnologyCo.,Ltd. Wankaida
HongKongKonkaLimited HongKongKonka
KonkaMobilityCo.,Limited KonkaMobility
ShenzhenXiaojiaTechnologyCo.,Ltd. XiaojiaTechnology
HenanFrestecElectricalAppliancesCo.,Ltd. FrestecElectricalAppliances
HenanFrestecHouseholdAppliancesCo.,Ltd. FrestecHouseholdAppliances
HenanFrestecRefrigerationApplianceCo.,Ltd. FrestecRefrigeration
JiangxiXinfengMicrocrystallineJadeCo.,Ltd. XinfengMicrocrystalline
GuangDongXingDaHongYeElectronicCo.,Ltd. XingDaHongYe
YantaiKonkaHealthcareEnterpriseServiceCo.,Ltd. YantaiKonka
YantaiKonkaIndustrialCo.,Ltd. YantaiKonkaIndustrial
YantaiKangjinTechnologyDevelopmentCo.,Ltd. YantaiKangjin
ShenzhenE-displayServiceCo.,Ltd. E-displayService
YibinKonkaTechnologyParkOperationCo.,Ltd. YibinKonkaTechnologyPark
YibinKonkaIncubatorManagementCo.,Ltd. YibinKonkaIncubator
KonkaGroupCo.,Ltd. InterimReport2019 Corporatename Abbreviation
ShenzhenKonkaMobileInterconnectionTechnologyCo.,Ltd. MobileInterconnection
HefeiYiheElectronicCo.,Ltd. YiheElectronic
ShenzhenKonkaYifangTechnologyCo.,Ltd. YifangTechnology
E3info(Hainan)TechnologyCo.,Ltd. E3info
ShenzhenE2infoNetworkTechnologyCo.,Ltd. E2info
ShandongEconTechnologyCo.,Ltd.(inclusiveofitsconsolidated
EconTechnology
subsidiaries)
YoushiKangrongCultureCommunicationCo.,Ltd. YoushiKangrong
ShenzhenYouzhihuiTechnologyCo.,Ltd. Youzhihui
YibinKonkaSmartTechnologyCo.,Ltd. SmartTechnology
ChainKingdomMemoryTechnologiesCo.,Limited ChainKingdomMemoryTechnologies ChainKingdomMemoryTechnologies ChainKingdomMemoryTechnologies(Shenzhen)Co.,Ltd.
(Shenzhen)
ChongqingKonkaTechnologyDevelopmentCo.,Ltd. ChongqingKonka
II.Basis forthePreparation ofFinancialStatements
With the going-concern assumption as the basis and based on transactions and other events that actually occurred, the Company prepared financial statements in accordance with The Accounting Standards for BusinessEnterprises—Basic Standard issued by the Ministry of Finance with Decree No. 33 and revised with Decree No. 76, the 42 specific accounting standards, the Application Guidance of Accounting Standards for Business Enterprises, the Interpretation of Accounting Standards for Business Enterprises and other regulations issued and revised from 15 February 2006 onwards (hereinafter jointly referred to as theAccounting Standards for Business Enterprises, China Accounting Standards or “CAS”), as well as the Rules for Preparation Convention of Disclosure of Public Offering Companies No.15– General Regulations for Financial Reporting (revised in 2014) by China Securities Regulatory Commission.
In accordance with relevant provisions of theAccounting Standards for Business Enterprises, the Company adopted the accrual basis in accounting. Except for some financial instruments and investment properties, the financial statements are based on historic costs to measure. Non-current assets held for sale is priced by the lower amount between the amounts that fair value minus estimated amount and the original book value that meets the held for sale requirement. Where impairment occurred on an asset, an impairment reserve was withdrawn accordinglypursuant to relevant requirements.
III.Statementof Compliancewith theAccountingStandards forBusiness Enterprises
KonkaGroupCo.,Ltd. InterimReport2019 The financial statements prepared by the Company are in compliance with in compliance with the Accounting Standards for Business Enterprises, which factually and completely present theCompany’s financial positions as at 30 June 2019, business results and cash flows for H1 of 2019, and other relevant information. In addition, theCompany’s and theCompany’s financial statements meet the requirements of disclosing financial statements and notes thereto stated in the Rules for Preparation Convention of Disclosure of Public Offering Companies No.15– General Regulations for Financial Reporting (revised in 2014) by China Securities Regulatory Commission.
IV.ImportantAccounting Policies andEstimations
The Company and its subsidiaries are mainly engaged in the production and sales of colour TVs, white goods, mobile phones, etc.; businesses regarding trade, industry and sicience and technology, environmental protection, commercial factoring, financing lease, etc. The Company and its subsidiaries formulated certain specific accounting policies and accounting estimates according to the actual production and operation characteristics and the regulations of the relevant ASBE on the transactions and events of the revenues recognition, the recognition of completion of construction contract, and research development expenditure. For the details, please refer to each description of Notes IV. 23 “Revenues”. For the notes of the significant accounting judgment and estimations made by the management layer, please referto Notes IV.29“Significant accounting judgment and estimations”.
1.FiscalPeriod
TheCompany’s fiscal periods include fiscal years and fiscal periods shorter than a complete fiscal year.TheCompany’s fiscal year starts on January 1 and ends on December 31 of every yearaccording to theGregorian calendar.
2.Operating Cycle
A normal operating cycle refers to a period from the Company purchasing assets for processing to realizing cash or cash equivalents. An operating cycle for the Company is 12 months,which isalso the classification criterion forthe liquidityof itsassets and liabilities. 3.RecordingCurrency
Renminbi is the dominant currency used in the economic circumstances where the Company and its domestic subsidiaries are involved. Therefore, the Company and its domestic subsidiaries use Renminbi as their bookkeeping base currency. The overseas subsidiaries of the Company should confirm the HK Dollar and Euro a as their recording currency according its major economic environment of their operating address. And the Company adopted Renminbi as the bookkeeping base currency when preparing the financial statements for the
KonkaGroupCo.,Ltd. InterimReport2019 ReportingYear.
4. Accounting Treatment Methods for Business Combinations under the Same Control ornotundertheSame Control
Business combinations, it is refer to two or more separate enterprises merge to form a reporting entity transactions or events. Business combination is divided into under the same control andthosenonunder thesame control.
(1)Business combinations underthe samecontrol
Abusiness combination under the same control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or the same parties both before and after the business combination and on which the control is not temporary. In a business combination under the same control, the party which obtains control of other combining enterprise(s) on the combining date is the combining party, the other combining enterprise(s) is (are) the combined party. The “combining date” refers to the date on which thecombiningparty actually obtains control onthecombined party.
The assets and liabilities that the combining party obtains in a business combination shall be measured on the basis of their carrying amount in the combined party on the combining date. As for the balance between the carrying amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it (or the total par value of the shares issued), the additional paid-in capital (share premium) shall be adjusted. If the additional paid-in capital (share premium) is not sufficient to be offset, the retained earnings shall beadjusted.
The direct cost for the business combination of the combining party shall be recorded into the profits and losses at thecurrent period.
(2)Business combinations not underthesame control
A business combination not under the same control is a business combination in which the combining enterprises are not ultimately controlled by the same party or the same parties both before and after the business combination. In a business combination not under the same control, the party which obtains the control on other combining enterprise(s) on the purchase dateis theacquirer,and other combiningenterprise(s) is (are)the acquiree.
For a business combination not under the same control, the combination costs shall include the fair values, on the acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the acquirer in exchange for the control on the acquiree, the expenses for audit, legal services and assessment, and other administrative expenses,
KonkaGroupCo.,Ltd. InterimReport2019 which are recorded into the profits and losses in the current period. The trading expenses for the equity securities or debt securities issued by the acquirer as the combination consideration shall be recorded into the amount of initial measurement of the equity securities or debt securities. The involved contingent consideration shall be recorded into the combination costs at its fair value on the acquiring date. Where new or further evidences emerge, within 12 months since the acquiring date, against the existing circumstances on the acquiring date and the contingent consideration thus needs to be adjusted, the combined goodwill shall be adjusted accordingly. The combination costs of the acquirer and the identifiable net assets obtained by it in the combination shall be measured according to their fair values at the acquiring date. The acquirer shall recognize the positive balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree as business reputation. Where the combination costs are less than the fair value of the identifiable net assets it obtains from the acquiree, the acquirer shall re-examine the measurement of the fair values of the identifiable assets, liabilities and contingent liabilities it obtains from the acquiree as well as the combination costs. If, after the re-examination, the combination costs are still less than the fair value of the identifiable net assets it obtains from the acquiree, the acquirer shall record the balance into the profits and losses of the current period.
As for the deductible temporary differences the acquirer obtains from the acquiree which are not recognized into deferred income tax liabilities due to their not meeting the recognition standards, if new or further information shows that the relevant situation has existed on the acquiring date and the economic benefits brought by the deductible temporary differences the acquirer obtains from the acquiree on the acquiring date can be realized, they shall be recognized into deferred income tax assets and the relevant goodwill shall be reduced. Where the goodwill is not sufficient to be offset, the difference shall be recognized into the profits and losses in the current period. In other circumstances than the above, where the deductible temporary differences are recognized into deferred income tax assets on the acquiring date, theyshall berecorded intotheprofits and losses in thecurrent period.
In a business combination not under same control realized by two or more transactions of exchange, according to about the No. 5 Notice about the Treasury Issuing the Accounting Standards for Enterprises (Finance accounting)[2012] No. 19 and the Article 51 of Accounting Standards for Enterprises No.33—Consolidated Financial Statements Criterion about the “package deal” (see Note IV, 5 (2)), Whether the deals are “package deal” or not, belong to the “package deal”, see the previous paragraphs described in this section and Note
KonkaGroupCo.,Ltd. InterimReport2019 IV, 13 “long term equity investment” and conduct accounting treatment, those not belong to the “package deal” distinguish between the individual financial statements and the consolidated financial statements and conduct relevant accounting treatment.
In the individual financial statements, the sum of the book value and new investment cost of the Company holds in the acquiree before the acquiring date shall be considered as initial cost of the investment. Other related comprehensive gains in relation to the equity interests that the Company holds in the acquiree before the acquiring date shall be treated on the same basis as the acquiree directly disposes the related assets or liabilities when disposing the investment (that is, except for the corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity method arising from theacquiree’s re-measurement, theothers shall be transferred into current investment gains).
In theCompany’s consolidated financial statements, as for the equity interests that the Company holds in the acquiree before the acquiring date, they shall be re-measured according to their fair values at the acquiring date; the positive difference between their fair values and carrying amounts shall be recorded into the investment gains for the period including the acquiring date. Other related comprehensive gains in relation to the equity interests that the Company holds in the acquiree before the acquiring date shall be treated on the same basis as the acquiree directly disposes the related assets or liabilities when disposing the investment (that is, except for the corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity method arising from theacquiree’s re-measurement, the others shall be transferred into current investment gains ontheacquiring date).
5.Methods forPreparingConsolidated FinancialStatements
(1)Principlefor determining theconsolidation scope
The consolidation scope for financial statements is determined on the basis of control. The term “control” is the power of the Company upon an investee, with which it can take part in relevant activities of the investee to obtain variable returns and is able to influence the amount of returns. The scope of consolidation includes the Company and its all subsidiaries. Asubsidiary is an enterprise orentity controlled bytheCompany.
Once any changes in the relevant facts or situations resulted in any changes in the elements involvedintheaforesaid definition of“control”,theCompany shall carry out a reassessment. (2)Methods for preparing theconsolidated financial statements
Subsidiaries are fully consolidated from the date on which the Company obtains control on their net assets and operation decision-making and are de-consolidated from the date when
KonkaGroupCo.,Ltd. InterimReport2019 such control ceases. As for a disposed subsidiary, its operating results and cash flows before the disposal date has been appropriately included in the consolidated income statement and cash flow statement; and as for subsidiaries disposed in the current period, the opening items in the consolidated balance sheet are not adjusted. For a subsidiary acquired in a business combination not under the same control, its operating results and cash flows after the acquiring date have been appropriately included in the consolidated income statement and cash flow statement, and the opening items and comparative items in the consolidated financial statements are not adjusted. For a subsidiary acquired in a business combination under the same control and the merged party in a consolidation by merger, its operating results and cash flows from the beginning of the Reporting Period of the combination to the combination date have been appropriately included in the consolidated income statement and cash flow statement, and the comparative items in the consolidated financial statements are adjusted at thesame time.
The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the Company during the preparation of the consolidated financial statements, where the accounting policies and the accounting periods are inconsistent between the Company and subsidiaries. For a subsidiary acquired from a business combination not under the same control, the individual financial statements of the subsidiary are adjusted based on the fair value of the identifiable net assets at the acquisition date.
All significant inter-Company balances, transactions and unrealized profits are offset in the consolidated financial statements.
The portion of asubsidiary’sshareholders’equity and the portion of asubsidiary’s net profits and losses for the period not held by the Company are recognized as minority interests and minority shareholder profits and losses respectively and presented separately undershareholders’equity and net profits in the consolidation financial statements. The portion of asubsidiary’s net profits and losses for the period that belong to minority interests is presented as the item of “minority shareholder profits and losses” under the bigger item of net profits in the consolidated financial statements. Where the loss of a subsidiary shared by minority shareholders exceeds the portion enjoyed by minority shareholders in thesubsidiary’sopeningowners’equity,minorityinterests are offset.
Where the Company losses control on its original subsidiaries due to disposal of some equity investments or other reasons, the residual equity interests are re-measured according to the fair value on the date when such control ceases. The summation of the consideration obtained
KonkaGroupCo.,Ltd. InterimReport2019 from the disposal of equity interests and the fair value of the residual equity interests, minus the portion in the originalsubsidiary’s net assets measured on a continuous basis from the acquisition date that is enjoyable by the Company according to the original shareholding percentage in the subsidiary, is recorded in investment gains for the period when theCompany’s control on the subsidiary ceases. Other comprehensive incomes in relation to the equity investment in the original subsidiary are treated on the same accounting basis as the acquiree directly disposes the relevant assets or liabilities (that is, except for the changes in the net liabilities or assets with a defined benefit plan resulted from re-measurement of the original subsidiary, the rest shall all be transferred into current investment gains) when such control ceases. And subsequent measurement is conducted on the residual equity interests according to the No. 2 Accounting Standard for Business Enterprises—Long-term Equity Investments or the No. 22 Accounting Standard for BusinessEnterprises—Recognition and Measurement of Financial Instruments. For details, see Note IV. 13 “long term equity investment”orNote IV.9“financial instruments”.
If the company disposals the equity investment in the subsidiary company until the loss of control through multiple transactions, it is necessary to distinguish whether the transactions disposing the equity investment in the subsidiary company until the loss of control belong to package transactions. All the transaction terms, conditions and economic impact of the disposal ofsubsidiaries’ equity investment are in accordance with one or more of the following conditions, which usually indicate the multiple transactions, should be considered as a package deal for accounting treatment.① These deals are at the same time or under the condition of considering the influence of each other to concluded;②These transactions only be as a whole can achieve a complete business result;③ The occurrence of a deal depends on at least one othertransactions；④ A deal alone is not economical, it is economical with other trading together. Those not belong to a package deal, each of them a deal depends on circumstances respectively conduct accounting treatment in accordance with the applicable principles of “part disposal of subsidiaries of a long-term equity investment under the condition of not losing control on its subsidiaries” (see Note IV. 13. (2)④) and “Where the Company losses control on its original subsidiaries due to disposal of some equity investments or other reasons” (See the front paragraph) relevant transactions of the Company losses control on its subsidiaries due to disposal of equity investments belonging to a package deal, considered as a transaction and conduct accounting treatment. However, Before losing control, every disposal cost and corresponding net assets balance of subsidiary of disposal investment are confirmed as other comprehensive income in consolidated
KonkaGroupCo.,Ltd. InterimReport2019 financial statements, which together transferred into the current profits and losses in the loss ofcontrol ,when theCompany losingcontrol onits subsidiary.
6.Classificationof JointArrangements andAccountingTreatmentof JointOperations Ajoint arrangement refers to an arrangement jointly controlled by two participants or above. The Company classifies joint arrangements into joint operations and joint ventures according to its rights and duties in the joint arrangements. A joint operation refers to a joint arrangement where the Company enjoys assets and has to bear liabilities related to the arrangement. A joint venture refers to a joint arrangement where the Company is only entitledtothenet assets ofthearrangement.
TheCompany’s investments in joint ventures are measured at the equity method according to the accounting policies mentioned in Note IV. 13 (2)② “Long-term equity investments measured at theequity method”.
For a joint operation, the Company, as a joint operator, recognizes the assets and liabilities that it holds and bears in the joint operation, and recognizes the jointly-held assets and jointly-borne liabilities according to theCompany’s stake in the joint operation; recognizes the income from sale of theCompany’s share in the output of the joint operation; recognizes the income from sale of the jointoperation’s outputs according to theCompany’s stake in it; and recognizes the expense solely incurred to the Company and the expense incurred to the jointoperation according totheCompany’s stake in it.
When the Company, as a joint operator, transfers or sells assets (the assets not constituting business, the same below) to the joint operation, or purchases assets from the joint operation, before the assets are sold to a third party, the Company only recognizes the share of the other joint operators in the gains and losses arising from the sale. Where impairment occurs to the assets as prescribed in The Accounting Standard No. 8 for BusinessEnterprises—Asset Impairment, the Company shall fully recognizes the loss for a transfer or sale of assets to a joint operation; and shall recognize the loss according to its stake in the joint operation for a purchase ofassets from thejointoperation.
7.Recognition Standard forCash andCashEquivalents
In theCompany’s understanding, cash and cash equivalents include cash on hand, any deposit that can be used for cover, and short-term (usually due within 3 months since the day of purchase) and high circulating investments, which are easily convertible into known amountof cash and whose risksinchange of valueare minimal.
8. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
KonkaGroupCo.,Ltd. InterimReport2019 (1)Accounting treatments fortranslation of foreign currency transactions
As for a foreign currency transaction, the Company shall convert the amount in a foreign currency into amount in its bookkeeping base at the spot exchange rate (usually referring to the central parity rate that day announced by thePeople’s Bank of China, the same below) of the transaction date, while as for such transactions as foreign exchange or involving in foreign exchange, the Company shall converted into amount in the bookkeeping base currency at actual exchange rate thetransaction isoccurred.
(2) Accounting treatments for translation of foreign currency monetary items and non-monetary items
On the balance sheet date, the foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The exchange difference arising from the difference between the spot exchange rate on the balance sheet date and the spot exchange rate at the time of initial recognition or prior to the balance sheet date shall be recorded in the profits and losses in the current period, excluding the following situations:① the exchange difference arising from foreign currency loans related to acquisition of fixed assets shall be treated at the principle of capitalization of borrowing costs;② the exchange difference arising from the hedging instruments used for effective hedging of net overseas operation investments shall be recorded into other comprehensive incomes, and shall be recognized into current gains and losses when the net investments are disposed; and③ the exchange difference arising from change in the book balance of foreign currency monetary items available for sale except the amortized costs shall be recorded into other comprehensive gains and losses.
When it involves overseas business in preparing the consolidated financial statement, for the translation difference of foreign currency monetary items of net investment in overseas business arising from the change in exchange rate, it shall be recorded into the other comprehensive income; and be recorded into disposal gains and losses at current period when disposingoverseas business.
Aforeign currency non-monetary item measured at the historical costs shall still be translated at the spot exchange rate on the transaction date. Where the foreign non-monetary items measured at the fair value shall be converted into amount in its bookkeeping base currency at spot exchange rate, the exchange gains and losses arising thereof shall be treated as change in fair value, and recorded into the current period gains and losses or as other comprehensive incomes.
(3)Translation of foreign currency financial statements
KonkaGroupCo.,Ltd. InterimReport2019 When it involves overseas business in preparing the consolidated financial statement, for the translation difference of foreign currency monetary items of net investment in overseas business arising from the change in exchange rate, it shall be recorded into the item of “difference of foreign currency financial statement translation” under theowners’equity; and be recorded into disposal gains and losses at current period when disposing overseas business.
The foreign currency financial statement of overseas business should be translated in to RMB financial statement by the following methods: The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the balance sheet date. Among theowner’s equity items, except for the items as “undistributed profits”, other items shall be translated at the spot exchange rate at the time when they are incurred. The income and expense items in the profit statements shall be translated at the spot exchange rate of the transaction date. The retained earnings at period-end is the retained earnings the period-end of last year after the translation; retained earnings at period-end shall be listed as various distribution items after the translation; after the translation, the balance between assets and the sum of liabilities andshareholders’ equities shall be recorded into other comprehensive gains and losses as difference of foreign currency translation. Where an enterprise disposes of an overseas business without the control right, it shall shift the differences, which is presented under the items of theshareholders’equities in the balance sheet and which arises from the translation of foreign currency financial statements relating to this overseas business, into the disposal profits and losses of the current period by all or proportion of the disposed overseas business.
Foreign cash flow shall be translated at the spot exchange rate of the current period of the date of cash flow incurred. The influence of exchange rate on the cash flow shall be adjustment itemand individually listed inthe cash flowstatement.
And the opening balance and the actual balance of the same period of last year shall be listed at the amounts after translation of foreign currency financial statement in the same period of last year.
Where the control of the Company over an overseas operation ceases due to disposal of all or some of theCompany’sowner’s equity in the overseas operation or other reasons, the foreign-currency statement translation difference belonging to the parentcompany’sowner’s equity in relation to the overseas operation which is stated under theshareholders’equity in thebalance sheet shallbe all restated as gains and lossesof thedisposal period.
Where theCompany’s equity in an overseas operation decreases due to disposal of some
KonkaGroupCo.,Ltd. InterimReport2019 equity investment or other reasons but the Company still has control over the overseas operation, the foreign-currency statement translation difference in relation to the disposed part of the overseas operation shall be recorded into minority interests instead of current gains and losses. Ifwhat’s disposed is some equity in an overseas associated enterprise or joint venture, the foreign-currency statement translation difference related to the overseas operation shall be recorded into the gains and losses of the current period of the disposal according tothe disposalratio.
9.Financial Instruments
When the Company becomes a party to a financial instrument, it shall recognize a financial asset orfinancial liability.
(1)Classification, recognitionand measurement offinancial assets
The Company classifies the financial assets into financial assets measured at amortized cost, financial assets measured by the fair value and the changes recorded in other comprehensive income and financial assets at fair value through profit or loss based on the business model for financial assets management and characteristics of contractual cash flow of financial assets
Financial assets initially recognized shall be measured at their fair values. For financial assets measured at their fair values and of which the variation is recorded into the profit or loss of the current period, the transaction expenses thereof shall be directly included into the current profit or loss; for other financial assets, the transaction expenses thereof shall be included into the initially recognized amount. For accounts receivable and notes receivable generated from sales of commodities or provision of labor services, excluding or without regard to major financing, the expected consideration amount the Company has the right to collect will betaken bytheCompanyas theinitiallyrecognized amount.
①Financial assets measured bytheamortized cost
The business mode of the Company to manage the financial assets targets at collecting the contractual cash flow. What's more, the contractual cash flow characteristics of the financial assets are consistent with the basic lending arrangement, that is, the cash flow generated in the specific date is the payment of the interest based on the principal and outstanding principal amount. This kind of financial assets of the Company shall be subsequently measured based on the amortized cost and effective interest method, and the gains or losses arising from theamortization, impairment shall beincluded into current profit and loss.②Financial assets measured at the fair value with its changes included into other comprehensiveincome
KonkaGroupCo.,Ltd. InterimReport2019 Business mode for managing financial assets of the Company takes contract cash flow collected as target and selling as target and contract cash flow characteristics of such financial assets are consistent with basic lending arrangement. The Company calculates such financial assets as per fair value whose change is included into corresponding comprehensive income, but impairment loss or gain, exchange gain or loss and interest income calculated as peractual interest rate method are included into thecurrent profit and loss.
Furthermore, the Company designates partial non-tradable equity vehicle investment as the financial asset measured with fair value whose change is included into other comprehensive income. The Company includes the related dividend income of such financial assets into the current profit and loss with the change in fair value included into other comprehensive income. At the time of derecognition of such financial assets, accumulated gain or loss included into other comprehensive income before will be shifted to retained earnings from othercomprehensiveincomes butnot included intothecurrent profit and loss.
③Financial assets at fair valuethrough profit orloss
The Company classifies financial assets except for above-mentioned financial assets measured with amortized cost and financial assets measured with fair value whose change is included into other comprehensive income into financial assets at fair value through profit or loss. Furthermore, at the time of the initial recognition, to eliminate or significantly reduce the accounting mismatch, the Company specifies partial financial assets as the financial assets at fair value through profit or loss. For such financial assets, the Company adopts the fair value for the subsequent measurement, and the changes in fair value are included into current profit and loss.
(2)Classification, recognitionand measurement offinancial liabilities
TheCompany’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value through profit or loss and other financial liabilities. For financial liabilities at fair value through profit or loss, relevant transaction costs are immediately recognized in profit or loss for the current period, and transaction costs relating to other financial liabilities are included in theinitial recognitionamounts.
①Financial liabilities at fair valuethrough profit orloss
Financial liabilities at fair value through profit or loss include trading financial liabilities (including the derivative instruments belonging to financial liabilities) and financial liabilities designated at the initial recognition to be measured by the fair value and their changes are recorded inthe current profit orloss.
Trading financial liabilities (including the derivative instruments belonging to financial
KonkaGroupCo.,Ltd. InterimReport2019 liabilities) are subsequently measured at fair value, and the changes of fair value except those related to hedge accounting) shall be recorded in thecurrent profit orloss.
For the financial liabilities at fair value through profit or loss, the change of such liability's fair value arising from changes in the Company's own credit risk is included into other comprehensive income. And when the liability is derecognized, the accumulative change amount of its fair value arising from the change of own credit risk included into other comprehensive income is transferred to the retained earnings. The changes of the remaining fair value are included in the current profit or loss. If the treatment of change effects in own credit risk of such financial liability in the above method may cause or expand the accounting mismatching in the profit or loss, the Company will include all gains or losses (including the amount influenced due to the changes in own credit risk of the enterprise) of such financial liability intothe current profit orloss.
②Otherfinancial liabilities
Other financial liabilities except for those formed due to transfer of financial assets failing to comply with derecognition condition or continuously getting involved in transferred financial assets and financial guarantee contract are classified into financial liabilities measured with amortized cost and subject to subsequent measurement based on amortized cost. Gains or losses generated from derecognition or amortization are included into the current profit or loss.
(3)Recognition and measurement of financial assets transfer
TheCompany derecognizes afinancial asset when oneof thefollowing conditionsis met: 1)therights to receivecash flows from theasset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party underapass-through arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control oftheasset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the asset, the asset is recognized according to the extent it exists as financial asset, and correspondent liability is recognized. The extent of existence refers the level of risk bythefinancial asset changes theenterpriseis facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the
KonkaGroupCo.,Ltd. InterimReport2019 carrying amount of the financial asset transferred; and (b) the sum of the consideration received from the transfer and any cumulative gain or loss that had been recognized in other comprehensiveincome, is recognizedinprofit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset is allocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair value of those parts. The difference between (a) the carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for the part derecognized and any cumulative gain or loss allocated to the part derecognized which has been previously recognized in other comprehensiveincome, is recognizedinprofit or loss.
If the Company endorses the financial assets sold by right of recourse and holding financial assets, it needs to confirm that whether almost all risks and remuneration in the ownership of financial assets have been transferred or not. Where an enterprise has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financialasset； If it retained nearly all of the risks and rewards related to the ownership of the financial asset, it shall not stop recognizing the financial asset. If the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of the financial asset, then it continuously judges that whether the Company retain the control of the assets, and conducts accounting treatment according to the principles described in former paragraphs.
(4)Derecognition offinancial liabilities
In case of current obligation of financial liabilities (or partial financial liabilities) being terminated, derecognition of such financial liabilities (or partial financial liabilities) is conducted by the Company. If the Company (borrower) concludes an agreement with the lender to replace original financial liabilities with new ones and contact terms of new financial liabilities are different from those of original financial liabilities, derecognition of original financial liabilities and recognition of new financial liabilities shall be conducted. In case of material alteration of contract terms of original financial liabilities (partial financial liabilities) by the Company, derecognition of original financial liabilities and recognition of newfinancial liabilities as per modified terms shall be conducted.
In case of derecognition of financial liabilities (partial financial liabilities), the Company includes the balance between its carrying value and payment consideration (including non-cash assets transferred out orborne liabilities)into thecurrent profit or loss.
(5)Offsetting financial assets andfinancial liabilities
KonkaGroupCo.,Ltd. InterimReport2019 When the Company has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presented separately in thebalance sheet and shall not beoffset.
(6)Determination offinancial assets andliabilities’fairvalue
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in anarm’s length transaction. For a financial instrument which has an active market, the Company uses quoted price in the active market to establish its fair value. The quoted price in the active market refers to the price that can be regularly obtained from exchange market, agencies, industry associations, pricing authorities; it represents the fair market trading price in the actual transaction. For a financial instrument which does not have an active market, the Company establishes fair value by using a valuation technique. Valuation techniques include using recentarm’s length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. The Company measures initially and subsequently the fair value of an interest rate swap at the value of acompetitor’s interest rate swap quoted by a recognized financial institution as at theCompany’s balance sheet date in accordance with the principle of consistency. In valuation, the Company adopts applicable valuation techniques supported by sufficient utilizable data and other information in current circumstances, selects input values consistent with asset or liability characteristics considered in relevant asset or liability transactions of market participators and prioritizes the applying relevant observable input values. Unobservable input values shall not be applied unless relevant observable input values are not accessibleor feasible.
(7)Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The consideration received from issuing equity instruments, net of transaction costs, are added toshareholders’ equity. All types of distribution (excluding stock dividends) made by the Company to holders of equity instruments are deducted fromshareholders’ equity. The Company does not recognize any changes in thefair value ofequity instruments.
An equity instrument distributing dividends during the period of continued existence
KonkaGroupCo.,Ltd. InterimReport2019 (including the “interest” generated from those classified as equity instrument) shall be treated as profit distribution.
10.ImpairmentofFinancialAssets
The Company needs to confirm that the financial assets subject to the impairment loss are the financial assets measured based on the amortized cost, the debt instrument investment measured based on the fair value with its variations included into other comprehensive incomes and the lease outlay receivable, mainly including notes receivable, account receivable, other receivables, investment oncreditor’s rights, other investments oncreditor’s rights and long-term receivables etc. Besides, in respect of the contract assets and partial financial guarantee contract, corresponding impairment provisions shall be calculated and withdrawn and corresponding credit impairment losses recognized according to various accounting policies mentioned in this part.
(1)Methods for theRecognition ofImpairment Provisions
For all mentioned items above, the Company shall calculate and withdraw corresponding impairment provisions and recognize corresponding credit impairment losses according to applicable expected credit loss measurement methods (general methods or simplified methods)withthe expected credit lossas thebasis.
Credit loss refers to the difference between all receivable contract cash flows and all expected cash flows that are discounted to the present value based on the original actual interest rate -- the present value of all cash shortfall. However, for the purchased or original financial assets subject to the credit impairment, the Company shall realize the discounting basedontheactual interest rate subject to thecredit adjustment.
General methods applied to measure the expected credit loss can be described as: the Company shall evaluate whether the credit risk of the financial assets (including the contract assets and other applicable items; the same below) increases remarkably after the initial recognition on the balance sheet day; if the credit risk increases remarkably after the initial recognition, the Company shall measure the provision for loss based on the specific expected credit loss amount during the entire period of existence; if not, the Company shall measure the provision for loss based on the specific expected credit loss amount in the following 12 months. While evaluating the expected credit loss, the Company shall take all reasonable and well-founded information into consideration, including theforward-looking information. For the financial instrument of lower credit risk on the balance sheet day, the Company shall assume that its credit risk does not increase remarkably after the initial recognition, and corresponding provision for loss shall be measured according to the expected credit loss in
KonkaGroupCo.,Ltd. InterimReport2019 thefollowing 12months.
(2) Standards for Judging Whether the Credit Risk Increases Remarkably after the Initial Recognition
If any financialassets’ probability of default within the expected period of existence determined on the balance sheet day is obviously higher than that within the expected period of existence determined during the initial recognition, it shall indicate the remarkable increase of the financialassets’ credit risk. Unless it is under special circumstances, the Company shall adopt various variations in the default risk in the following 12 months as the reasonable basis for estimating corresponding variations in the default risk within the entire period of existence and determining whether the credit risk increases remarkably after the initial recognition.
(3) Combined Method for Evaluating the Expected Credit Risk based on Corresponding Combination
For the financial assets with remarkably different credit risk, the Company shall separately evaluate its credit risk, including the receivables from related parties, receivables involved in any dispute with the other party or any lawsuit and arbitration, and receivables with obvious evidence showing that thedebtorcannot fulfill theduepayment obligation etc.
Except for the financial assets whose credit risk shall be separately evaluated, the Company shall divide these financial assets into different combinations based on the specific risk features, onwhich basis, correspondingcredit risks can beevaluated.
(4)AccountingTreatment MethodsApplied totheImpairment ofFinancialAssets
At the end of the period, the Company shall calculate the expected credit losses of various financial assets. If the expected credit loss is higher than the carrying amount of its current impairment provision, the difference shall be recognized as the impairment loss; if lower, the difference shall berecognized as thegain from theimpairment.
(5)Methods for Determining theCredit Loss ofVariousFinancialAssets
①Notes Receivables
For notes receivable, the Company shall measure the provision for loss based on the specific expected credit loss during the entire period of existence. According to the credit risk characteristics thereof, except those with separate evaluation of credit risk, notes receivable can bedivided intodifferent combinations:
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|Item|Basis|

KonkaGroupCo.,Ltd. InterimReport2019
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|BankAcceptance|The Accepter shall be the bank with smallercreditrisk|
|TradeAcceptance|Classifiedbycreditriskofacceptors|

②Account Receivable andContractAssets
For account receivable and contract assets excluding significant financing composition, the Company shall measure the provision for loss according to the specific expected credit loss amountwithin theentire period of existence.
For account receivable, contract assets and lease payment receivable including significant financing composition, the Company shall always measure the provision for loss according tothespecific expected credit lossamount withinthe period of existence.
Except the account receivable and contract assets whose credit risks shall be separately evaluated, the Company shall divide them into different combinations based on the specific credit risks:
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|Item|Basis|
|Aging Combination|Thiscombination involves theaccountsreceivablewhose credit risk shallnot beseparately evaluated byregarding the agingas credit risk feature.|
|Project Funds Combination|Thisportfolio is theproject-relatedreceivables.|
|ompany Combination within the Scope ofConsolidation|Theaccounts receivable within thescopeofconsolidation|

③OtherReceivables
By determining whether the credit risk of other receivables increases remarkably after the initial recognition, the Company shall measure the impairment loss based on the specific expected credit loss in the following 12 months or during the entire period of existence. Except other receivables whose credit risks shall be separately evaluated, the Company shall dividethem into different combinations based onthespecific credit risk features:
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|Item|Basis|
|Aging Combination|This combination involves other receivableswhose credit risk shall not be separatelyevaluated by regarding the aging as credit|

KonkaGroupCo.,Ltd. InterimReport2019
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||risk feature.|
|Low RiskCombination|This combination shall regard otherreceivables of extremely low risk (includingthe revolving fund, the cash deposit and theguaranteedeposit)as thecredit risk feature.|
|Company Combination within the Scope ofConsolidation|Other receivables within the scope ofconsolidation.|

④ Long-term Receivables (except the account receivable and the lease payment receivable includingthesignificant financing composition)
By determining whether the credit risk of long-term account receivables increases remarkably after the initial recognition, the Company shall measure the impairment loss based on the specific expected credit loss in the following 12 months or during the entire period of existence. Except long-term account receivables whose credit risks shall be separately evaluated, the Company shall divide them into different combinations based on thespecific credit risk features:
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|Item|Basis|
|FinancingLeaseCombination|Regardingthelong-termreceivablesrelatedtothefinancingleaseasthecreditriskcharacteristics|
|FranchiseCombination|Regarding the long-term receivables related to the PPPProjectasthecreditriskcharacteristics|

11.Inventory
(1)Classification
TheCompany’s inventories mainly include raw materials, goods in process; merchandise on hand, goods delivered, circulating materials, and property inventories (development product, and development cost), and finished but unsettled assets ofconstruction contract.
①Development product refers to thefinished and held-for-sale property.
② Development costs refers to the unfinished property with the development purpose for sale.
③ The finished but unsettled assets of construction contract refers to the excess amount of the sum of accumulatively incurred costs and recognized gross margin (loss) of contract in process over thesettled amount.
(2)Pricing method foroutgoing inventories
Pricingmethod of commoninventories
KonkaGroupCo.,Ltd. InterimReport2019 The inventories shall be measured in light of their cost when obtained. The cost of inventory consists of purchase costs, processing costs and other costs. Inventory is accounted by weight average method upon receiving and giving. For merchandise on hand shall be accounted by planned cost, if the difference between planned cost of and actual cost of raw materials is accounted through the cost variance item, and the planned cost is adjusted to the actual cost according to the cost difference which the carryover and given-out inventory should shoulder intheperiod.
Pricingmethod of property inventories
The property inventories are initially measured at the costs, and inventories mainly include materials in stock, development product in process (development costs), finished development product, and development product intended to sell but rent temporarily, and etc. The costs of the development product include the land premium, expenditures for supporting infrastructures, expenditures for construction and installation projects, the borrowing costs before the completion of the developed project and other expenses occurred during the development process. When the inventories are delivered, its actual costs shall be recognized byweighted average method.
Pricingmethod of construction contract
The construction contracts shall be measured at actual cost, including all direct and indirect costs related to the execution of the contract from the time signing the contract to completing the contract. The expenses such as travel expenses and bidding fees incurred for the purpose of signing the contract, which can be separately and reliably measured and the contract is likely to be concluded, are included in the contract cost when the contract is obtained; if the above conditionsare not met, theyare included inthe current profit and loss.
The accumulated costs incurred in the contract in progress, the accumulated recognized gross profit (loss) and the settled price are stated in the balance sheet as net offset. The part of the sum of the accumulated costs incurred in the contract in progress and the accumulated recognized gross profit (loss) that exceeds the settled price is stated as the inventory; the part of the settlement costs of the contract in progress that exceeds the sum of the accumulated costs incurred and the accumulated recognized gross profit (loss) are stated as account collected inadvance.
(3) Recognition basis of net realizable value and withdrawal method of depreciation reserves forinventories
The net realizable value refers, in the ordinary course of business, to the account after deducting the estimated cost of completion, estimated sale expense and relevant taxes from
KonkaGroupCo.,Ltd. InterimReport2019 the estimated sale price of inventories. The net realizable value of inventories shall be fixed on the basis of valid evidence as well as under consideration of purpose of inventories and theeffect of events after balance-sheet-date.
On the balance sheet date, the inventories shall be measured according to the cost or the net realizable value, whichever is lower. If the net realizable value is lower than the cost, it shall withdraw the depreciation reserves for inventories, which was withdrawn in accordance with the balance that the cost of individual inventory item exceeding the net realizable value. The inventories with various numbers and low unit price shall be made provisions for depreciation reserves of inventories according to the category of inventories. For inventories that are produced and sold in the same region with same or similar end use or purposes, and hard to be measured separately from other items, it shall be made merger provisions for falling price ofinventories.
After withdrawing the depreciation reserves for inventories, if the factors, which cause any write-down of the inventories, have disappeared, causing the net realizable value of inventories is higher than its carrying amount; the amount of write-down shall be reversed from the original amount of depreciation reserve for inventories. The reversed amount shall beincluded in theprofits and losses ofthecurrent period.
(4)The perpetual inventory system is maintained for stocksystem.
(5)Amortization method ofthelow-value consumption goods and packing articles
The low-value consumption goods should be amortized by one time amortization when acquiring and the packing articles are amortized byonetimeamortization whenacquiring. 12.Assets HeldforSaleandDisposalGroup
When a company relies mainly on selling (including the exchanges of non-monetary assets with commercial substance, similarly hereinafter) instead of continuing to use a non-current asset or disposal group to recover its carrying value, then the non-current asset or disposal group is classified as assets held for sale. The specific standards are simultaneously meeting the following conditions: assets or disposal groups can be sold immediately under current conditions based on the practice of selling such assets or disposal groups in similar transactions; the Company has already made a resolution on the sale plan and obtained a certain purchase commitment, and the sale is expected to be completed within one year. A disposal group refers to a group of assets that are disposed of together as a whole by sale or other means in a transaction and the liabilities directly related to these assets transferred in the transaction. Where the asset group or combination of asset groups to which a disposal group belongs apportions the goodwill acquired in the business combination in accordance
KonkaGroupCo.,Ltd. InterimReport2019 with the Accounting Standards for Enterprises No. 8 - Asset Impairment, the disposal group shall includethegoodwill allocated to it.
If there are non-current assets or disposal groups held for sale during initial measurement or on the balance sheet day based on remeasurement of this Company, if the carrying value is higher than the net amount by deducting the selling expenses with the fair value, the carrying value shall be written down and be equal to the net amount by deducting the selling expenses with the fair value. The write-down amount shall be confirmed as the loss of depreciation of assets and shall be included into the profits and losses of the current period.At the same time, prepare to calculate and withdraw the assets purchased and under agreements to resell. For the disposal group, deduct the carrying value of the goodwill in the disposal group with the asset depreciation losses confirmed, then deduct the carrying value of each non-current asset in the disposal group conforming to the measurement regulations of Accounting Standards for Business Enterprises No. 42-non-current Assets Purchased and under Agreements to Resell, Disposal Group and Operation Termination (herein after referred to as "the Standard for Assets Purchased and under Agreements to Resell"). If the net amount by deducting the selling expenses with the fair value of the disposal group purchased and under agreements to resell on the subsequent balance sheet date, the previous write-down amount shall be recovered and shall be reversed within the asset depreciation losses amount of the non-current confirmed as per regulation of the Standard for Assets Purchased and under Agreements to Resell after being classified into the category purchased and under agreements to resell. The reverse amount shall be included into the current profits and losses, and the carrying value shall be added as per the proportion of the carrying value of each non-current asset in the disposal group applicable to the Standard for Assets Purchased and under Agreements to Resell except for the goodwill; The goodwill carrying value deducted and the asset depreciation losses of the non-current assets applicable to the measurement regulations of the Standard forAssets Purchased and underAgreements to Resell before its confirmation of being classified into the category purchased and under agreements to resell shall not be reversed.
Depreciation or amortization in the non-current assets held for sale or the non-current assets in the disposal group shall not be calculated or withdrawn. Interests of liabilities and other expenses in the disposal group purchased and under agreements to resell shall be confirmed continuously.
When a non-current asset or disposal group fail to meet the classification conditions for the category of held-for-sale, the Company will no longer classify a non-current asset or disposal
KonkaGroupCo.,Ltd. InterimReport2019 group as held-for-sale or remove out a non-current asset from the held-for-sale disposal group, and it will be measured by one of the followings whichever is lower: (1) The carrying value before being classified as held for sale will be adjusted according to the depreciation, amortization or impairment that would have been recognized under the assumption that it was not classified as held for sale; (2)Therecoverableamount.
13.Long-term Equity Investments
The long-term equity investments of this part refer to the long-term equity investments that the Company has control, joint control or significant influence over the investees. The long-term equity investment that the Company does not have control, joint control or significant influence over the investees, should be recognized as available-for-sale financial assets or financial assets at fair value through profit or loss for accounting before 2019 and it will be measured as financial assets at fair value through profit or loss since January 2019, among which, for those not for trading, the Company can choose to designate them as financial assets measured at fair value and changes thereof are recorded into other comprehensive income at initial recognition for accounting, and for details of the accounting policies governing, please refer toNotes IV9“Financial Instrument”.
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the Company and the relevant activities of the arrangement should be decided only after the participants which share the control right make consensus. Significant influence refers to the power of the Company which could anticipate in the finance and the operation polices of the investees, but could not control or jointly control the formulation of thepolicies with theotherparties.
(1)Recognition ofinvestment costs
As for long-term equity investments acquired by enterprise merger, if the merger is under the same control, the share of the carrying value of theshareholders’ equity of the merged enterprise, on the date of merger, is regarded as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash assets transferred as well as the carrying value of the debts borne by the merging party shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger, regard the share of the carrying value of the shareholder's equity of the merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity investment.The total face value of the stocks issued shall be regarded as the
KonkaGroupCo.,Ltd. InterimReport2019 capital stock, while the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equities of the combined party which respectively acquired through multiple transaction under the same control that ultimately form into the combination of the enterprises under the same control, should be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package deal, it shall, on the date of merger, regard the enjoyed share of the carrying value of the shareholder's equity of the merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity investment, and as for the difference between the initial investment cost of the long-term equity investment and sum of the carrying value of the long-term equity investment before the combination and the carrying value of the consideration of the new payment that further required on the combination date, should adjust the capital reserve; if the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity investment held before the combination date which adopted the equity method for accounting, or the other comprehensive income confirmed for the available-for-sale financial assets (financial assets at fair value and changes thereof are recorded into comprehensive income), should not have any accounting treatment for the moment.
For the long-term investment required from the business combination under different control, the initial investment cost regarded as long-term equity investment on the purchasing date according to the combination cost, the combination costs shall be the sum of the fair values of the assets paid, the liabilities incurred or assumed and the equity securities issued by the Company. The equities of the acquirees which respectively acquired through multiple transaction that ultimately form into the combination of the enterprises under the different control, should be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package deal, the sum of the carrying value of the original held equity investment of the acquirees and the newly added investment cost should be regarded as the initial investment cost of the long-term equity investment that changed to be accounted by cost method. On or before 31 December 2018, if the original held equity is calculated by cost method, the other relevant comprehensive income would not have any accounting disposal for the moment. If the original held equity
KonkaGroupCo.,Ltd. InterimReport2019 investment is the financial assets available for sale, its difference between the fair value and the carrying value as well as the accumulative changes of the fair value that include in the othercomprehensiveincome, shouldtransfer intothecurrent gains and losses.
The commission fees for audit, law services, assessment and consultancy services and other relevant expenses occurred in the business combination by the combining party or the purchase party, shall be recorded into current profits and losses upon their occurrence; the transaction expense from the issuance of equity securities or bonds securities which are as consideration for combination by the combining party, should be recorded as the initial amountof equity securities and bonds securities.
Besides the long-term equity investments formed by business combination, the other long-term equity investments shall be initially measured by cost, the cost is fixed in accordance with the ways of gaining, such as actual cash payment paid by the Company, the fair value of equity securities issued by the Company, the agreed value of the investment contract or agreement, the fair value or original carrying amount of exchanged assets from non-monetary assets exchange transaction, the fair value of the long-term equity investments, etc. The expenses, taxes and other necessary expenditures directly related with gaining the long-term equity investments shall also be recorded into investment cost. The long-term equity investment cost for those could execute significant influences on the investees because of appending the investment or could execute joint control but not form as control, should be as the sum of the fair value of the original held equity investment and the newly added investment cost recognized according to the No. 22 of Accounting Standards for BusinessEnterprises—Recognition and Measurement ofFinancial Instrument.
(2)Subsequent measurement and recognition of gains or losses
A long-term equity investment where the investing enterprise has joint control (except for which forms into common operators) or significant influence over the investors should be measured by equity method. Moreover, long-term equity investment adopting the cost methodinthefinancial statements, and which theCompany has control oninvested entity.①Long-term equity investment measured byadopting cost method
The price of a long-term equity investment measured by adopting the cost method shall be included at its initial investment cost and append as well as withdraw the cost of investing and adjusting the long-term equity investment. The return on investment at current period shall be recognized in accordance with the cash dividend or profit announced to distribute by the invested entity, except the announced but not distributed cash dividend or profit included intheactual payment orconsideration upongainingthe investment.
KonkaGroupCo.,Ltd. InterimReport2019②Long-term equity investment measured byadopting equity method
If the initial cost of a long-term equity investment is more than the Company's attributable share of the fair value of the invested entity's identifiable net assets for investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment is less than the Company's attributable share of the fair value of the invested entity's identifiable net assets for investment, the difference shall be included in the current profits and losses and the cost of the long-term equity investment shall be adjusted simultaneously.
When measured by adopting equity method, respectively recognize investment income and other comprehensive income according to the net gains and losses as well as the portion of other comprehensive income which should be enjoyed or be shared, and at the same time adjust the carrying value of the long-term equity investment; corresponding reduce the carrying value of the long-term equity investment according to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and theowners’ equity except for the profits distribution of the investees, should adjust the carrying value of the long-term equity investment as well as include in the capital reserve. The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it adjusts the net profits of the invested entity. If the accounting policies adopted by the investees are not accord with that of the Company, should be adjusted according to the accounting policies of the Company and the financial statement of the investees during the accounting period and according which to recognize the investment income as well as other comprehensive income. For the transaction happened between the Company and associated enterprises as well as joint ventures, if the assets launched or sold not form into business, the portion of the unrealized gains and losses of the internal transaction, which belongs to the Company according to the calculation of the enjoyed proportion, should recognize the investment gains and losses on the basis. But the losses of the unrealized internal transaction happened between the Company and the investees which belongs to the impairment losses of the transferred assets, should not be neutralized. If the assets launched by this Company to the associated enterprise or joint ventures constitute the business, and the investor obtains the long-term equity investment but fails to obtain the control right, the fair value of business launched is taken as the initial investment cost of newly-increased long-term equity investment, and the difference between
KonkaGroupCo.,Ltd. InterimReport2019 initial investment cost and carrying value of business launched will be included in current profit and loss. If the assets sold by this Company to the associated enterprises or joint ventures constitute the business, the difference between consideration and carrying value of business will be included in current profit and loss. If this Company's assets purchased from the associated enterprises or joint ventures constitute business, accounting treatment shall be conducted in accordance with the provisions of the Accounting Standards for Business Enterprises No. 20 -- Business Combination, fully recognize the gains or losses related to the transaction.
The Company shall recognize the net losses of the invested enterprise until the carrying value of the long-term equity investment and other long-term rights and interests which substantially from the net investment made to the invested entity are reduced to zero. However, if the Company has the obligation to undertake extra losses, it shall be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into investment losses at current period. If the invested entity realizes any net profits later, the Company shall, after the amount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resume recognizing its attributable share of profits.
For the long-term equity investment held by the Company before the first execution of the new accounting criterion of the associated enterprises and joint ventures, if there is debit difference of the equity investment related to the investment, should be included in the current gains and losses according to the amount of the straight-line amortization during the original remained period.
③Acquiring shares of minorityinterest
In the preparation for the financial statements, the balance existed between the long-term equity investment increased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated by the increased shares held since the purchase date (or combination date), the capital reserves shall be adjusted, if the capital reserves are not sufficientto offset, theretained profits shall be adjusted.
④Disposal oflong-term equity investment
In the preparation of financial statements, the Company disposed part of the long-term equity investment on subsidiaries without losing its controlling right on them, the balance between the disposed price and attributable net assets of subsidiaries by disposing the long-term equity investment shall be recorded intoowners’ equity; where the Company losses the controlling right by disposing part of long-term equity investment on such subsidiaries, it
KonkaGroupCo.,Ltd. InterimReport2019 shall treated in accordance with the relevant accounting policies inNote IV.5 (2) “Method on preparation ofcombined financial statements”.
For other ways on disposal of long-term equity investment, the balance between the carrying value of the disposed equity and its actual payment gained shall be recorded into current profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained equity after disposal still adopts the equity method for measurement, the other comprehensive income originally recorded intoshareholders’ equity should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees according to the corresponding proportion. Theowners’equity recognized owning to the changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distribution of the investees, should be transferred into thecurrent gains and losses according tothe proportion.
For the long-term equity investment which adopts the cost method of measurement, if the remained equity still adopt the cost method, the other comprehensive income recognized owning to adopting the equity method for measurement or the recognition and measurement standards of financial instrument before acquiring the control of the investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees and should be carried forward into the current gains and losses according to the proportion; the changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distribution among the net assets of the investees which recognized by adopting the equity method for measurement, should be carried forward intothecurrent gainsand losses according totheproportion.
For those the Company lost the control of the investees by disposing part of the equity investment as well as the remained equity after disposal could execute joint control or significant influences on the investees, should change to measure by equity method when compiling the individual financial statement and should adjust the measurement of the remained equity to equity method as adopted since the time acquired; if the remained equity after disposal could not execute joint control or significant influences on the investees, should change the accounting disposal according to the relevant regulations of the recognition and measurement standards of financial instrument, and its difference between the fair value and carrying value on the date lose the control right should be included in the current gains and losses. For the other comprehensive income recognized by adopting equity method for measurement or the recognition and measurement standards of financial
KonkaGroupCo.,Ltd. InterimReport2019 instrument before the Company acquired the control of the investees, should execute the accounting disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose the control of them, while the changes of the otherowners’equity except for the net gains and losses, other comprehensive income and the profits distribution among the net assets of the investees which recognized by adopting the equity method for measurement, should be carried forward into the current gains and losses according to the proportion. Of which, for the disposed remained equity which adopted the equity method for measurement, the other comprehensive income and the otherowners’equity should be carried forward according to the proportion; for the disposed remained equity which changed to execute the accounting disposal according to the recognition and measurement standards of financial instrument, the other comprehensive incomeand theotherowners’equity shouldbe carried forward in fullamount.
For those the Company lost the control of the investees by disposing part of the equity investment, the disposed remained equity should change to calculate according to the recognition and measurement standards of financial instrument, and difference between the fair value and carrying value on the date lose the control right should be included in the current gains and losses. For the other comprehensive income recognized from the original equity investment by adopting the equity method, should execute the accounting disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate the equity method for measurement, while for theowners’equity recognized owning to the changes of the otherowner’s equity except for the net gains and losses, other comprehensive income and the profits distribution of the investees, should be transferred into the current investment income with full amount when terminate adoptingthe equitymethod.
The Company respectively disposes the equity investment of the subsidiaries through multiple transactions until lose the control right, if the above transactions belongs to the package deal, should execute the accounting disposal by regarding each transaction as a deal of disposing the equity investment of the subsidiaries until lose the control right, while the difference between each expenses of the disposal and the carrying value of the long-term equity investment in accord with the disposed equity before losing the control right, should firstly be recognized as other comprehensive income then be transferred into the current gains and losses oflosing thecontrol right along untilthe timewhen loseit.
14.InvestmentProperty
The term “investment property” refers to the real estate held for generating rent and/or capital
KonkaGroupCo.,Ltd. InterimReport2019 appreciation. Investment property of the Company include the right to use any land which has already been rented; the right to use any land which is held and prepared for transfer after appreciation;and theright to useanybuilding which has already been rented.
The initial measurement of the investment property shall be made at its cost. Subsequent expenditures incurred for an investment property is included in the cost of the investment property when it is probable that economic benefits associated with the investment property will flow to the Company and the cost can be reliably measured, otherwise the expenditure is recognized in profit orloss in theperiod in which theyare incurred.
The Company shall make a follow-up measurement to the investment property by employing the cost pattern on the date of the balance sheet.An accrual depreciation or amortization shall be made for the investment property in the light of the accounting policies of the use right of buildings orlands.
For details of impairment test method and withdrawal method of impairment provision of investment property,please refertoNoteIV.20.“Long-term assets impairment”.
When owner-occupied real estate or inventories are changed into investment property or investment property is changed into owner-occupied real estate, of which book value prior to thechange shall betheentry valueafter thechange.
When an investment property is changed to an owner-occupied real estate, it would be transferred to fixed assets or intangible assets at the date of such change. When an owner-occupied real estate is changed to be held to earn rental or for capital appreciation, the fixed asset or intangible asset is transferred to investment property at the date of such change. If the fixed asset or intangible asset is changed into investment property measured by adopting the cost pattern, whose book value prior to the change shall be the entry value after the change; if the fixed asset or intangible asset is changed into investment property measured by adopting the fair value pattern, whose fair value on the date of such change shall betheentry valueafter thechange
An investment property is derecognized on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. The amount of proceeds on sale, transfer, retirement or damage of an investment property less its carrying amount and related taxes and expenses is recognized in profit or lossin theperiod in which it isincurred.
15.FixedAssets
(1)Conditionsfor recognition of fixed assets
KonkaGroupCo.,Ltd. InterimReport2019 Fixed assets refer to tangible assets held for the production of commodities, the provision of services, leasing or operation and management, whose service life exceeds one accounting year. Fixed assets are recognized only when the economic benefits associated with them are likely to flow into the company and their costs can be reliably measured. Fixed assets are initially measured at cost, taking into account theimpact ofexpected abandonment costs. (2)Depreciation methodsof each fixed asset
The fixed assets should be withdrawn and depreciation by straight-line depreciation within the useful life since the next month when the fixed assets reach the estimated available state. The useful life, estimated net salvage and the yearly discounted rate of each fixed asset are as follows:
||||
|-|-|-|
|Method|Usefullife(Year)|Expectednetsalvagevalue(%)|
|Straight-linedepreciation|20-40|5-10.00|
|Straight-linedepreciation|5-10|5-10.00|
|Straight-linedepreciation|3-5|5-10.00|
|Straight-linedepreciation|3-5|5-10.00|
|Straight-linedepreciation|5|5-10.00|

The “expected net salvage value” refers to the expected amount that the Company may obtain from the current disposal of a fixed asset after deducting the expected disposal expenses at theexpirationof itsexpected useful life.
(3) Testing method of impairment and withdrawal method of provision for impairment on fixed assets
For details of the testing method of impairment and withdraw method of impairment
provision for impairment on fixed assets, please refer to Note IV. 20 “Long-term assets
impairment”.
KonkaGroupCo.,Ltd. InterimReport2019 (4)Recognition basis, pricing and depreciation method offixed assets byfinance lease
The “finance lease” shall refer to a lease that has transferred in substance all the risks and rewards related to the ownership of an asset. Its ownership may or may not eventually be transferred. The fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets. If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires, the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee will obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated over theshorter oneof thelease term orits useful life.
(5)Other explanations
The follow-up expenses related to a fixed asset, if the economic benefits pertinent to this fixed asset are likely to flow into the enterprise and its cost can be reliably measured, shall be recorded into cost of fixed assets and ultimately recognized as the carrying value of the replaced part; otherwise, theyshall be included in thecurrent profits and losses.
Terminate to recognize the fixed assets when the fixed assets under the disposing state or be estimated that could not occur any economy benefits through using or disposing. When the Company sells, transfers or discards any fixed assets, or when any fixed assets of the Company is damaged or destroyed, the Company shall deduct the carrying value of the fixed assets as well as the relevant taxes from the disposal income, and include the amount in the current profits and losses.
The Company shall check the useful life, expected net salvage value and depreciation method of the fixed assets at the end of the year at least, if there is any change, it shall be regarded as achange of theaccounting estimates.
16.Construction inProgress
Construction in process is measured at actual cost. Actual cost comprises construction costs, borrowing costs that are eligible for capitalization before the fixed assets being ready for their intended us and other relevant costs. Construction in process is transferred to fixed assets when theassets are ready for theirintended use.
For details of the testing method of impairment and withdraw method of impairment provision on construction in progress, please refer to Note IV. 20 “Long-term assets impairment”.
17.BorrowingCosts
The borrowing costs shall include interest on borrowings, amortization of discounts or
KonkaGroupCo.,Ltd. InterimReport2019 premiums on borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. When the borrowing costs can be directly attributable to the construction or production of assets eligible for capitalization, and the asset disbursements or the borrowing costs have already incurred, and the construction or production activities which are necessary to prepare the asset for its intended use or sale have already started, the capitalization of borrowing costs begins. When the asset eligible for capitalization under acquisition and construction or production is ready for the intended use or sale, the capitalization of the borrowing costs shall be ceased. Other borrowing costs shall be recognized as expenses when incurred.
The to-be-capitalized amount of interests shall be determined in light of the actual interests incurred of the specially borrowed loan at the present period minus the income of interests earned on the unused borrowing loans as a deposit in the bank or as a temporary investment; the enterprise shall calculate and determine the to-be-capitalized amount on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined in light ofthe weighted average interest rate ofthe general borrowing.
During the period of capitalization, the exchange balance on foreign currency special borrowings shall be capitalized; the exchange balance on foreign currency general borrowings shall be recorded into current profits andlosses.
The term “assets eligible for capitalization” refers to the fixed assets, investment real estate, inventories and other assets, of which the acquisition and construction or production may takequitea longtimeto get ready for itsintended useorforsale.
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall besuspended.
18.IntangibleAssets
(1)Intangibleassets
The term “intangible asset” refers to the identifiable non-monetary assets possessed or controlled byenterprises which havenophysical shape.
The intangible assets shall be initially measured according to its cost. The costs related with the intangible assets, if the economic benefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can be measured reliably, shall be recorded into the costs of intangible assets; otherwise, it shall be recorded into current profits
KonkaGroupCo.,Ltd. InterimReport2019 and losses upontheoccurrence.
The use right of land gained is usually measured as intangible assets. For the self-developed and constructed factories and other constructions, the related expenditures on use right of land and construction costs shall be respectively measured as intangible assets and fixed assets. For the purchased houses and buildings, the related payment shall be distributed into the payment for use right of land and the payment for buildings, if it is difficult to be distributed,thewhole payment shall betreated as fixedassets.
For intangible assets with a finite service life, from the time when it is available for use, the cost after deducting the sum of the expected salvage value and the accumulated impairment provision shall be amortized by straight line method during the service life. While the intangibleassets without certain service lifeshall not beamortized.
At the end of period, the Company shall check the service life and amortization method of intangible assets with finite service life, if there is any change, it shall be regarded as a change of the accounting estimates. Besides, the Company shall check the service life of intangible assets without certain service life, if there is any evidence showing that the period of intangible assets to bring the economic benefits to the enterprise can be prospected, it shall be estimated the service life and amortized in accordance with the amortization policies for intangibleassets with finiteservice life.
(2)R& Dexpenses
The expenditures for internal research and development projects of an enterprise shall be classified into research expenditures and development expenditures.
Theresearch expenditures shall berecorded into theprofit orloss forthe current period. The development expenditures shall be confirmed as intangible assets when they satisfy the following conditions simultaneously, and shall be recorded into profit or loss for the current period when theydon’t satisfy thefollowing conditions.
①It isfeasibletechnically to finish intangibleassets foruse orsale;
②It isintended tofinish and use orsell theintangible assets;
③ The usefulness of methods for intangible assets to generate economic benefits shall be proved, including being able to prove that there is a potential market for the products manufactured by applying the intangible assets or there is a potential market for the intangibleassets itselfortheintangible assets will beused internally;
④ It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of sufficient technologies, financial resources and other
KonkaGroupCo.,Ltd. InterimReport2019 resources;
⑤Thedevelopment expenditures oftheintangible assets can be reliably measured.
As for expenses thatcan’t be identified as research expenditures or development expenditures, theoccurred R& Dexpenses shall be all included in current profits and losses. (3) Testing method of impairment and withdraw method of impairment provision of intangibleassets
For details of the testing method of impairment and withdraw method of impairment provisiononintangible assets, seeNotes IV.20“Long-term assets impairment”.
19.Long-term Deferred Expenses
Long-term deferred expenses refer to general expenses with the apportioned period over one year (one year excluded) that have occurred but attributable to the current and future periods. Long-term deferred expenseshall be amortizedaveragely within benefit period.
20.ImpairmentofLong-termAssets
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limited service life, investing real estate with cost model, long-term equity investment of subsidiaries, cooperative enterprises and joint ventures, the Company should judge whether decrease in value exists on the date of balance sheet. Recoverable amounts should be tested for decrease in value if it exists. Other intangible Assets of reputation and uncertain service life and other non-accessible intangible assets should be tested for decrease invalue nomatterwhether it exists.
If the recoverable amount is less than carrying value in impairment test results, the provision for impairment of differences should include in impairment loss. Recoverable amounts would be the higher of net value of asset fair value deducting disposal charges or present value of predicted cash flow.Asset fair value should be determined according to negotiated sales price of fair trade. If no sales agreement exists but with asset active market, fair value should be determined according to 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 merchantable Assets related to asset disposal. Present value of predicted asset cash flow should be determined by the proper discount rate according toAssets in service and predicted cash flow of final disposal. Asset depreciation reserves should be calculated on the basis of single Assets. If it is difficult to predict the recoverable amounts for single Assets, recoverable amounts should be determined according to the belonging asset group. Asset group is the
KonkaGroupCo.,Ltd. InterimReport2019 minimum asset combination producing cash flowindependently.
In impairment test, carrying value of the business reputation in financial report should be shared to beneficial asset group and asset group combination in collaboration of business merger. It is shown in the test that if recoverable amounts of shared business reputation asset group or asset group combination are lower than book value, it should determine the impairment loss. Impairment loss amount should firstly be deducted and shared to the carrying value of business reputation of asset group or asset group combination, then deduct carrying value of all assets according to proportions of other carrying value of above assets in asset groupor asset group combination except business reputation.
After the asset impairment loss is determined, recoverable value amounts would not be returned in future.
21.Employee Compensation
Employee compensation of the Company mainly includes short-term employee compensation, departure benefits, demission benefits and other long-term employee compensation. Of which:
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing fund, labour union expenditure and personnel education fund, non-monetary benefits etc. The short-term compensation actually happened during the accounting period when the active staff offering the service for the Company should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. Of which the non-monetary benefits should be measured according to the fair value.
Welfare after demission mainly includes setting drawing plan. Defined contribution plans include basic endowment insurance, unemployment insurance and annuity. Deposited amounts are charged to relevant asset costs or current profits and losses during the period in which they are incurred. Defined benefit plan of the Company is internal early retirement plan. According to anticipated accumulative welfare unit, the Company makes estimates by unbiased and consistent actuarial assumption for the demographic variables and financial variables, measures the obligations produced in defined benefit plans, and determines the vesting period. On balance sheet date, the Company will list all obligations in defined benefit plans as present value and include current service costs into current profits and losses.
When terminating labour relations before expiration of contract, or layoffs with
KonkaGroupCo.,Ltd. InterimReport2019 compensations, and the Company cannot terminate the labour relations unilaterally or reduce the demission welfare, remuneration and liabilities produced from the demission welfare should be determined and included in current profits and losses when determining the costs of demission welfare and recombination. However, demission welfare not fully paid within 12 months after annual Reporting Period should be handled the same as other long-termemployees’payrolls.
The inside employee retirement plan is treated by adopting the same principle with the above dismiss ion welfare. The Company would recorded the salary and the social security insurance fees paid and so on from theemployee’s service terminative date to normal retirement date into current profits and losses (dismiss ion welfare) under the condition that theymeet therecognition conditionsof estimated liabilities.
The other long-term welfare that the Company offers to the staffs, if met with the setting drawing plan, should be accounting disposed according to the setting drawing plan, while the rest should bedisposed according tothesetting revenueplan.
22.Provisions
TheCompany should recognizetherelated obligation as aprovision for liabilitywhen the obligation meets thefollowingconditions: (1)That obligation is a present obligation ofthe enterprise;(2) It is probable that an outflowofeconomic benefits from theenterprise willbe required to settlethe obligation; (3)Areliable estimatecan be made oftheamount ofthe obligation.
Onthebalance sheet date, an enterprise shall takeinto full consideration oftherisks,
uncertainty,timevalueof money,and otherfactors pertinent tothe Contingencies to measure theprovisions inaccordance with thebest estimateof thenecessary expenses for the
performance ofthecurrent obligation.
When allorsome oftheexpenses necessary fortheliquidation ofan provisionsof an
enterprise is expected to becompensated byathird party,thecompensation shouldbe
separately recognized as an asset only when it isvirtually certain that thereimbursement will beobtained. Besides, theamount recognized for thereimbursement shouldnot exceed the carrying valueof theestimated liabilities.
23.Revenue
(1)Revenue from sellinggoods
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
KonkaGroupCo.,Ltd. InterimReport2019 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 beincurred can bemeasured ina reliableway.
The recognition of revenue from commodities for the home market when shipping the goods or transferring property in goods; for goods exported, the revenue shall be recognized once the goods are cleared through customs and delivered to the carrier designated by the purchaser; for goods directly traded in overseas, the revenue shall be recognized when customers pickupthegoods orthe goods are delivered tothe assigned place bycustomers. (2)Providing labourservices
If the Company can reliably estimate the outcome of a transaction concerning the labour services it provides, it shall recognize the revenue from providing services employing the percentage-of-completion method on the date of the balance sheet. The completed proportion of a transaction concerning the providing of labour services shall be decided by the proportion ofthelabour service already provided to thetotallabour service to provide.
The outcome of a transaction concerning the providing of labour services can be measured in a reliable way, means that the following conditions shall be met simultaneously:① The amount of revenue can be measured in a reliable way;② The relevant economic benefits are likely to flow into the enterprise;③ The schedule of completion under the transaction can be confirmed in a reliable way; and④ The costs incurred or to be incurred in the transaction can bemeasured in areliable way.
If the outcome of a transaction concerning the providing of labour services cannot be measured in a reliable way, the revenue from the providing of labour services shall be recognized in accordance with the amount of the cost of labour services incurred and expected to be compensated, and make the cost of labour services incurred as the current expenses. If it is predicted that the cost of labour services incurredcouldn’t be compensated, thusnorevenue shallbe recognized.
Where a contract or agreement signed between Company and other enterprises concerns selling goods and providing of labour services, if the part of sale of goods and the part of providing labour services can be distinguished from each other and can be measured respectively, the part of sale of goods and the part of providing labour services shall be treated respectively. If the part of selling goods and the part of providing labour services cannot be distinguished from each other, or if the part of sale of goods and the part of
KonkaGroupCo.,Ltd. InterimReport2019 providing labour services can be distinguished from each other but cannot be measured respectively,both parts shallbeconducted as selling goods.
(3)Construction contract income
Under circumstance ofthat the outcome of the construction contract can be reliably estimated, the contract income and costs are confirmed on the balance sheet date in accordance with the percentage of completion method. The completion of the contract is determined by the proportion oftheincurred labor costs to theestimated total costs.
That the result of the construction contract can be reliably estimated refers to that:① the total income of the contract can be reliably measured;②the economic benefits related to the contract are likely to flow into theenterprise;③The actual contract costs can be clearly differentiated and reliably measured;④ the completion of the contract and the costs needed tocomplete thecontract can bereliably determined.
If the result of the construction contract cannot be reliably estimated, but the contract cost can be recovered, the contract income can be confirmed according to the actual contract cost that can be recovered, and the contract cost is confirmed as the contract expense in the current occurring period; for the contract cost that cannot be recovered, it is immediately confirmed as the contract cost but not the contract income when it occurs. If the uncertainties that make the results of the construction contract cannot be reliably estimated are no longer in existence, the income and expenses related to the construction contract are determined according tothe percentage ofcompletion method.
If the estimated total cost of the contract exceeds the total contract income, the estimated loss isconfirmed as thecurrent expense.
The accumulated costs incurred in the contract in progress, the accumulated recognized gross profit (loss) and the settled price are stated in the balance sheet as net offset. The part of the sum of the accumulated costs incurred in the contract in progress and the accumulated recognized gross profit (loss) that exceeds the settled price is stated as the inventory; the part of the settlement costs of the contract in progress that exceeds the sum of the accumulated costs incurred and the accumulated recognized gross profit (loss) are stated as account collected inadvance.
(4)Business incomeofBOT andPPP
The Company participates in the construction of public infrastructure by means of BOT and PPP. During the construction period, the Company recognizes the relevant revenue and expenses from providing services in accordance withASBE No. 15 - Construction Contracts.
KonkaGroupCo.,Ltd. InterimReport2019 After the completion of infrastructure, the Company recognizes the revenue from related to follow-up services in accordance withASBE No. 14-Revenue.
Revenue from construction contracts is measured at the fair value of collected consideration or consideration receivable (generally the amount of construction contracts), and financial assets or intangible assets are recognized, in the recognition of revenue, in the following circumstances:
① The contract stipulates that within a certain period after the completion of infrastructure, the company undertaken the project may unconditionally collect money or other financial assets of a fixed amount from the party awarding the contract; or, where the services fee charged by the company undertaken the project is lower than a specified amount, and the party awarding the contract is responsible for compensating the relevant price difference to the company undertaken the project in accordance with the contract, in the recognition of revenue, financial assets are recognized and treated in accordance with the provisions of ASBE No.22- Recognitionand Measurement ofFinancial Instruments.
② The contract stipulates that the Company has the right to collect fees from the party receiving services within a certain period of time after the completion of relevant infrastructure. However, if the amount of fees is uncertain, this right does not constitute an unconditional right to collect cash. The Company undertaken the project shall recognize intangibleassets in therecognition ofrevenue.
In case that interest on borrowing occurs in the construction process, it shall be treated in accordancewith theprovisions ofASBE No. 17- Borrowing Costs.
In case that the project company fails to provide actual construction services and contracts the infrastructure construction to other parties, there will be no recognition of revenue from construction services, and the project price paid in the construction process is recognized as financial assets orintangible assets inaccordancewith thecontract.
(5)Interest revenue
The amount of interest revenue should be measured and confirmed in accordance with the length of time for which theCompany’s monetary fund is used by others and the agreed interest rate.
(6)Property leasing revenue
For therecognition method oftheproperty leasing revenue, please refer toNotes IV.26. (7)Factoring business revenue
KonkaGroupCo.,Ltd. InterimReport2019 Take the paid-in factoring payment as the fair value to carry out initial measurement. Subsequent measurement shall be carried out as per the effective interest method according to the amortized cost. Take the balance between the fair value initially confirmed and transferred amount of accounts receivable or face value of notes receivable as the interest income by effective interests method and amortized costs during the financing period or the rest credit period; interest income shall be recognized by straight-line method if it is due within 1 year. The profits and losses from termination of recognition, impairment, and amortizationshall beincluded intothecurrent profitsand losses.
(8)Finance lease income
As a financial lessor, the Company recognizes, on the beginning date of the lease term, the sum of the minimum rental receivables on the lease start date and the initial direct costs as the entry value of financial lease receivable, and records the unguaranteed residential value. The difference between the sum of minimum rental receivables plus the unguaranteed residential value andthepresent valueis recognized as unrealizedfinancing revenue.
Unrealized financing revenue is measured using the real interest rate method during the lease term and recognized as current financing lease revenue. Contingent rents are included in current profits and losses when they actually occur.
24.Government Subsidies
A government subsidy means the monetary or non-monetary assets obtained free by the Company from the government, but excluding the capital invested by the government as the investor with correspondingowner’s equity. Government subsidies consist of the government subsidies pertinent to assets and government subsidies pertinent to income. Government subsidy that is obtained by this Company used for purchasing or acquisition and construction, or forming the long-term assets by other ways, which is confirmed the government subsidy related to assets; Other government subsidies shall be defined as the government subsidy that related with interest. If it does not clear the subsidy object in the government document, the grants will be divided based on the following modes into government subsidy related to earnings and government subsidy related to assets: (1) If the particular project of the grants is clear in the government document, make a division according to the relative proportion of expense amount of the formed assets in the budget of the particular project and the expense amount included in the cost, shall review the division ratio required at each balance sheet date and make changes if necessary; (2) Only make general statements for the application in the government document, for not specifying the particular item, as the governmental subsidy related to earnings. If a government subsidy is a monetary asset, it shall be measured
KonkaGroupCo.,Ltd. InterimReport2019 in the light of the received or receivable amount. If a government subsidy is a non-monetary asset, it shall be measured at its fair value. If its fair value cannot be obtained in a reliable way, it shall be measured at its nominal amount. The government subsidies measured at their nominalamounts shall bedirectly included inthecurrent profits and losses.
When this Company actually received the government subsidy, recognize and measure as the actual measured amount.
If the government grants related to assets are recognized as deferred income and are included in the profits and losses by installments in a reasonable and systematic way within the service life of underlying assets. The government grants related to income, using to compensate the relevant expenses or losses in the later period shall be recognized as the deferred income and are included in the current profit or loss in the period of confirming the related expenses or losses; If the government grant is used for compensating the occurred costs or loss, include it inthecurrent profit and loss directly.
At the same time, for the government subsidies related to assets and profits, carry out different accounting processing for different parts; for the governmental subsidy hard to differentiate, the overall governmental subsidies are taken as the governmental subsidy related to revenue.
The government grants related to daily activities of this Company shall be included in other revenues or offset related costs according to the economic business nature; Government subsidiesunrelated to daily activities shall beincluded intothenon-operating profits.
If the governmental subsidies confirmed needs to be returned and there is the deferred earnings balance concerned, the book balance of relevant deferred earnings shall be offset against, but the excessive part shall be included into current profits and losses; Government subsidies belonging to other situations shall be directly included into current losses and profits.
25.DeferredIncomeTaxAssets/DeferredIncomeTax Liabilities
(1)Income tax ofthe current period
On the balance sheet date, for the current income tax liabilities (or assets) of the current period as well as the part formed during the previous period, should be measured by the income tax of the estimated payable (returnable) amount which be calculated according to the regulations of the tax law. The amount of the income tax payable which is based by the calculation of the current income tax expenses, are according to the result measured from the corresponding adjustment of the pre-tax accounting profit of 2014 which in accord to the relevantregulations ofthetax law.
KonkaGroupCo.,Ltd. InterimReport2019 (2)Deferred income tax assets and deferred incometax liabilities
The difference between the carrying value of certain assets and liabilities and their tax assessment basis, as well as the temporary difference occurs from the difference between the carrying value of the items which not be recognized as assets and liabilities but could confirm their tax assessment basis according to the regulations of the tax law, the deferred income tax assets and the deferred income tax liabilities should be recognized by adopting liabilities lawofthebalance sheet.
No deferred tax liability is recognized for a temporary difference arising from the initial recognition of goodwill, the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss). Besides, no deferred tax assets is recognized for the taxable temporary differences related to the investments of subsidiary companies, associated enterprises and joint enterprises, and the investing enterprise can control the time of the reverse of temporary differences as well as the temporary differences are unlikely to be reversed in the excepted future. Otherwise, the Company should recognize the deferred income tax liabilities arising from othertaxabletemporary difference.
No deferred taxable assets should be recognized for the deductible temporary difference of initial recognition of assets and liabilities arising from the transaction which is not business combination, the accounting profits will not be affected, nor will the taxable amount or deductible loss be affected at the time of transaction. Besides, no deferred taxable assets should be recognized for the deductible temporary difference related to the investments of the subsidiary companies, associated enterprises and joint enterprises, which are not likely to be reversed in the expected future or is not likely to acquire any amount of taxable income tax that may be used for making up such deductible temporary differences. Otherwise, the Company shall recognize the deferred income tax assets arising from a deductible temporary difference basing on the extent of the amount of the taxable income that is likely to be acquired tomake upsuch deductible temporary differences
For any deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax asset shall be determined to the extent that the amount of future taxable income to be offset by the deductible loss or tax deduction to be likely obtained.
On the balance sheet date, the deferred income tax assets and the deferred income tax liabilities shall be measured at the tax rate applicable to the period during which the assets areexpected to berecovered orthe liabilities are expected to be settled.
KonkaGroupCo.,Ltd. InterimReport2019 The carrying value of deferred income tax assets shall be reviewed at each balance sheet date. If it is unlikely to obtain sufficient taxable income to offset against the benefit of the deferred income tax asset, the carrying value of the deferred income tax assets shall be written down. Any such write-down should be subsequently reversed where it becomes probable that sufficienttaxableincome willbe available.
(3)Income tax expenses
Incometax expenses includecurrent incometax and deferred income tax.
The rest current income tax and the deferred income tax expenses or revenue should be included into current gains and losses except for the current income tax and the deferred income tax related to the transaction and events that be confirmed as other comprehensive income or be directly included in theshareholders’equity which should be included in other comprehensive income orshareholders’equity as well as the carrying value for adjusting the goodwillof thedeferred incometax occurs from thebusinesscombination.
(4)Offset of incometax
The current income tax assets and liabilities of the Company should be listed by the written-off net amount which intend to executes the net amount settlement as well as the assets acquiring and liabilities liquidation at the same time while owns the legal rights of settlingthenet amount.
The deferred income tax assets and liabilities of the Company should be listed as written-off net amount when having the legal rights of settling the current income tax assets and liabilities by net amount and the deferred income tax and liabilities is relevant to the income tax which be collected from the same taxpaying bodies by the same tax collection and administration department or is relevant to the different taxpaying bodies but during each period which there is significant reverse of the deferred income assets and liabilities in the future and among which the involved taxpaying bodies intend to settle the current income tax and liabilities by net amount or are at the same time acquire the asset as well as liquidate the liabilities.
26.FinancingLeasing
Financing leasing virtually transferred the whole risks and leasing of the compensation related to the assets ownership and their ownership may eventually be transferred or maybe not.Other leasing except for thefinancing leasing is operating leasing.
(1)Business ofoperating leases recorded bythe Companyas thelessee
The rent expenses from operating leases shall be recorded by the lessee in the relevant asset
KonkaGroupCo.,Ltd. InterimReport2019 costs or the profits and losses of the current period by using the straight-line method over each period of the lease term. The initial direct costs shall be recognized as the profits and losses of the current period. The contingent rents shall be recorded into the profits and losses ofthecurrent period inwhich they actually arise.
(2)Business ofoperating leases recorded bythe Companyas thelessor
The rent incomes from operating leases shall be recognized as the profits and losses of the current period by using the straight-line method over each period of the lease term. The initial direct costs of great amount shall be capitalized when incurred, and be recorded into current profits and losses in accordance with the same basis for recognition of rent incomes over the whole lease term. The initial direct costs of small amount shall be recorded into current profits and losses when incurred. The contingent rents shall be recorded into the profits and losses ofthecurrent period in which theyactually arise.
(3)Business offinance leases recorded bytheCompany as thelessee
On the lease beginning date, the Company shall record the lower one of the fair value of the leased asset and the present value of the minimum lease payments on the lease beginning date as the entering value in an account, recognize the amount of the minimum lease payments as the entering value in an account of long-term account payable, and treat the balance between the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges. Besides, the initial direct costs directly attributable to the leased item incurred during the process of lease negotiating and signing the leasing agreement shall be recorded in the asset value of the current period. The balance through deducting unrecognized financing charges from the minimum lease payments shall be respectively stated in long-term liabilities and long-term liabilities due within1year.
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 berecorded intotheprofits and losses ofthecurrent period inwhich they actually arise. (4)Business offinance leases recorded bytheCompany as thelessor
On the beginning date of the lease term, the Company shall recognize the sum of the minimum lease receipts on the lease beginning date and the initial direct costs as the entering value in an account of the financing lease values receivable, and record the unguaranteed residual value at the same time. The balance between the sum of the minimum lease receipts, the initial direct costs and the unguaranteed residual value and the sum of their present values shall be recognized as unrealized financing income. The balance through deducting unrealized financing incomes from the finance lease accounts receivable shall be respectively
KonkaGroupCo.,Ltd. InterimReport2019 stated in long-term claims and long-term claims duewithin 1year.
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 berecorded intotheprofits and losses ofthecurrent period inwhich they actually arise. 27.OtherMainAccountingPolicies and Estimates
(1)Termination ofoperation
Termination of operation refers to a separately identifiable constituent part that satisfies one of the following conditions that has been disposed of by the Company or is classified as held-for-sale:This constituent part represents an independent main business or a separate main business area; This constituent part is part of an associated plan that is intended to be disposed of in an independent main business or a separate major business area; This constituent part is asubsidiary that is specifically acquired forresale.
For accounting method of termination of operation, please refer to relevant description of Notes IV.12“Assets held for saleand disposalgroup”
(2)HedgingAccounting
To avoid certain risks, the Company carries out hedging of some financial instruments as hedging tools. The Company treats hedging that meets specified conditions using hedging accounting method. The Company's hedging is fair -value hedging, and treats the hedging of foreign exchange risk with definite undertaking at fair value. At the beginning of hedging, the Company records the relationship between hedging tools and hedged items, risk management objectives and strategies for different hedging transactions. In addition, at the beginning and after the hedging, the Company conducts continuous evaluation of the effectiveness of hedging to check whether the hedging is highly effective during the accounting period inwhich thehedging relationship is designated.
Fair value hedging is a qualified derivative instrument designated for fair value hedging, and the gains or losses resulting from its changes in fair value are included in the current profits and losses. The gains or losses of the hedged items due to hedged risks are also included in the current profits and losses, and the carrying value of the hedged items is also adjusted. When the Company cancels the designation of hedging relationship, the hedging instrument expires or is sold, the contract is terminated or exercised, or the conditions are no longer satisfied, theuseofhedging accountingis terminated.
28.Changesin MainAccounting Policies andEstimates
(1)Changes ofaccounting policies
KonkaGroupCo.,Ltd. InterimReport2019 The Ministry of Finance issued the Accounting Standards for Business Enterprises No.22-Recognition and Measurement of Financial Instruments (revised in 2017) (CK[2017]No.7), Accounting Standards for Business Enterprises No.23-Transfer of Financial Assets (revised in 2017)(CK[2017]No.8), and Accounting Standards for Business Enterprises No.24-Hedge Accounting (revised in 2017)(CK[2017]No.9) on 31 March 2017, and issued the Accounting Standards for Business Enterprises No.37-Presentation of Financial Instruments (revised in 2017)(CK[2017]No.14) on 2 May 2017(collectively referred to as “New Financial Instruments Standards”). Enterprises domestically listed are required to implementtheNew Financial Instrument Standards since1January 2019.
Approved on the 7th Meeting of the 9th Board of Directors of the Company and the Company starts to implement aforesaid NewFinancial Instrument Standards since1January 2019. All financial assets confirmed pursuant to New Financial Instrument Standards shall be measured as per the amortized cost or fair value subsequently. On the execution date of New Financial Instrument Standards, the business model of financial assets is evaluated and managed on the basis of existing fact and condition of the Company on that day and the contractual cash flow characteristics of the financial assets are evaluated on the basis of the fact and condition upon the initial recognition of financial assets. The financial assets are divided into three categories: The financial assets measured as per the amortized costs, measured as per the fair value with the change included in other comprehensive incomes, measured as per the fair value with the change included in the current profit and loss. Wherein, for the equity instrument investment measured as per the fair value with change included in other comprehensive incomes, when such financial assets carry out the derecognition, the accumulative gains or loss included in other comprehensive incomes previously will be transferred to the retained earnings from other comprehensive incomes and aren't included inthe current profit and loss.
Pursuant to New Financial Instrument Standards, the Company, on the basis of expected credit loss, calculates and withdraws the impairment reserve of the financial assets measured at the amortized cost, the debt instrument investment measured at fair value with change included in other comprehensive incomes, the lease receivables, contract assets and financial guaranteecontract, and confirms thecredit impairment loss.
The Company traces and applies the New Financial Instrument Standards, and may not conduct the restatement to the inconsistence between the previous comparative financial statement data involved in the classification and measurement (including the impairment) and New Financial Instrument Standards. Therefore, for the cumulative impact of the
KonkaGroupCo.,Ltd. InterimReport2019 standard implementation for the first time, the Company adjusts the retained earnings or other comprehensive income at the beginning of 2019 and the amount of other related items inthefinancial statements, and thefinancial statements prioryears were notrestated.
The impacts on the Company due to the implementation of the New Financial Instrument Standards are as follows:
① Comparative Statements of Classification and Measurement of Financial Instruments before and after the First Execution Date
A.InfluenceonConsolidated Financial Statements
31December2018(beforeadjustment) 1January2019(afteradjustment)
||||||
|-|-|-|-|-|
|Measurementcategory|Carryingvalue|Item|Measurementcategory||
|Amortizedcost|4,348,144,129.53|Monetarycapital|Amortizedcost||
|Measuredatfairvalueandchangesthereofrecordedintothecurrentprofitofloss|5,464,984.92|Tradingfinancialassets|Measuredatfairvalueandchangesthereofrecordedintothecurrentprofitofloss||
|Amortizedcost|3,329,711,954.15|Notesreceivable|Amortizedcost||
|||Financingbackedbyaccountsreceivable|Measuredatfairvalueandchangesthereofrecordedintoothercomprehensiveincome|193,661,626.27|
|Amortizedcost|4,458,053,586.42|Accountsreceivable|Amortizedcost||
|||Financingbackedbyaccountsreceivable|Measuredatfairvalueandchangesthereofrecordedintoothercomprehensiveincome||
|Amortizedcost|406,196,649.48 Otherreceivables||Amortizedcost|403,907,076.96|
||||Measuredatfairvalueandchanges|61,494,666.97|

KonkaGroupCo.,Ltd. InterimReport2019 assets thereofrecorded
intothecurrent
profitofloss
||||
|-|-|-|
||Measuredatfairvalueandchangesthereofrecordedintoothercomprehensiveincome|23,940,214.36|
||MeasuredatfairvalueandchangesthereofrecordedintothecurrentprofitoflossAmortizedcost|548,230,000.00390,793,038.05|
|Tradingfinancialliabilities|Measuredatfairvalueandchangesthereofrecordedintothecurrentprofitorloss|2,459,603.25|

B. InfluenceontheCompany’sFinancial Statements
31December2018(beforeadjustment) 1January2019(afteradjustment)
|||||
|-|-|-|-|
|Measurementcategory|Carryingvalue|Item|Measurementcategory|
|Amortizedcost|2,124,335,536.69|Monetarycapital|Amortizedcost|
|Measuredatfairvaluethroughprofitorloss|5,464,984.92|Tradingfinancialassets|Measuredatfairvalueandchangesthereofrecordedintothecurrentprofitorloss|
|Amortizedcost|2,181,466,683.90|Notesreceivable|Amortizedcost|
||7,427,246,429.42|Financingbackedbyaccounts|Measuredatfairvalueandchanges|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Amortizedcost|6,661,693,463.33|Accountsreceivable|Amortizedcost||
|||Financingbackedbyaccountsreceivable|Measuredatfairvalueandchangesthereofrecordedintoothercomprehensiveincome||
|Amortizedcost|326,164,881.33|Otherreceivables|Amortizedcost||
|Amortizedcost|TradingfinancialassetsOtherequity2,459,603.25 instrumentsinvestmentOthernon-currentfinancialassets|Tradingfinancialassets|Measuredatfairvalueandchangesthereofrecordedintothecurrentprofitofloss||
||||Measuredatfairvalueandchangesthereofrecordedintoothercomprehensiveincome|14,440,214.36|
||||Measuredatfairvalueandchangesthereofrecordedintothecurrentprofitofloss|250,230,000.00|
|Measuredatfairvalueandchangesthereofrecordedintothecurrentprofitorloss|2,459,603.25|Tradingfinancialliabilities|Measuredatfairvalueandchangesthereofrecordedintothecurrentprofitorloss||

②Reconciliation Statements on Adjustment of Carrying Value of Original Financial Instruments to that of New Financial Instruments Classified and Measured in Accordance withNew Financial Instruments Standards ontheFirst Execution Date
A.InfluenceonConsolidated Financial Statements
||||
|-|-|-|
|31December2018(beforeadjustment)|Reclassified|Remeasured|

KonkaGroupCo.,Ltd. InterimReport2019 Amortizedcost:
||||
|-|-|-|
|3,329,711,954.15|||
||193,661,626.27||
|4,458,053,586.42|||
|||594,682.10|
|406,196,649.48|||
|||2,289,572.52|
||5,464,984.92||
|633,664,881.33|||

KonkaGroupCo.,Ltd. InterimReport2019 financialassets
|||||
|-|-|-|-|
||609,724,666.97|||
||23,940,214.36|||
|-||||
|——||||
||193,661,626.27|||
|||-||
|-||||
||2,459,603.25|||
||||2,459,603.25|

B. InfluenceontheCompany’sFinancial Statements
KonkaGroupCo.,Ltd. InterimReport2019
|||||
|-|-|-|-|
|31December2018(beforeadjustment)|Reclassified|Remeasured||
|2,181,466,683.90||||
||300,000.00|||
||||2,181,166,683.90|
|7,427,246,429.42||||
|||503,592.89||
||||7,426,742,836.53|
|6,661,693,463.33||||
|||1,623,912.27||
||||6,660,069,551.06|
||5,464,984.92|||
||||5,464,984.92|

KonkaGroupCo.,Ltd. InterimReport2019 financial instruments
standards
|||||
|-|-|-|-|
|326,164,881.33||||
||311,724,666.97|||
||14,440,214.36|||
||||-|
|——||||
||300,000.00|||
|||-|300,000.00|
|——||||
||2,459,603.25|||
||||2,459,603.25|

KonkaGroupCo.,Ltd. InterimReport2019 standards
③ Reconciliation Statements on Provision for Financial Assets Impairment on the First Execution Date
A.InfluenceonConsolidated Financial Statements
||||
|-|-|-|
|31December2018(beforeadjustment)|Reclassified|Remeasured|
|414,925,927.88|-|594,682.10|
|213,129,067.76|-|2,289,572.52|
|10,747,785.64|-10,747,785.64|-|

B. InfluenceontheCompany’sFinancial Statements
||||
|-|-|-|
|31December2018(beforeadjustment)|Reclassified|Remeasured|
|246,549,012.31|-|503,592.89|
|187,825,380.06|-|1,623,912.27|
|4,997,785.64|-4,997,785.64|-|

(2)Changeof accounting estimates
There was noany change ofaccounting estimateoftheCompany in theReporting Period. 29.CriticalAccounting Judgments and Estimates
Due to the inside uncertainty of operating activity, the Company needed to make judgments, estimates and assumption on the carrying value of the accounts without accurate
measurement during the employment of accounting policies.And these judgments, estimates
and assumption were made basing on the prior experience of the senior executives of the
KonkaGroupCo.,Ltd. InterimReport2019 Company, as well as in consideration of other factors. These judgments, estimates and assumption would also affect the report amount of income, costs, assets and liabilities, as well as the disclosure of contingent liabilities onbalance sheet date. However, the uncertainty of these estimates was likely to cause significant adjustment on the carrying value of the affected assets andliabilities.
The Company would check periodically the above judgments, estimates and assumption on the basis of continuing operation. For the changes in accounting estimates only affected on the current period, the influence should be recognized at the period of change occurred; for the changes in accounting estimates affected the current period and also the future period, the influenceshould be recognized at theperiod ofchange occurred and future period.
On the balance sheet date, the Company needed to make judgments, estimates and assumptionontheaccounts in thefollowing important items:
(1)Revenue Recognition -Construction Contract
If the construction contract results can be reliably estimated, the Company adopts the method of completion percentage to confirm the contract income on the balance sheet date. The percentage of contract completion is confirmed in accordance with the method described in Note IV, 233, Revenue, and is cumulatively calculated in each fiscal year in which each construction contract is executed.
Significant judgment is required in determining the percentage of completion, contract costs incurred, estimated total contract income and total cost, and contract recyclability, and the project management personnel usually make judgments mainly based on past experience and work. The estimated total contract income and total cost, as well as estimated changes in contract execution results, may have an impact on operating income, operating costs, and profit or loss for the current or subsequent period of the change, and may have a significant impact.
(2)Categorization ofleasing
In accordance with Accounting Standards for Enterprises No. 21– Leasing, the Company categorized the leasing into operating lease and finance lease. During the categorization, the management level needed to make analysis and judgment on whether all the risk and compensation related with the leased assets had been transferred to the leasee, or whether the Company had already undertaken all the risk and compensation related with the leased assets.
(3)Financial assets impairment
KonkaGroupCo.,Ltd. InterimReport2019 If the Company adopts the expected credit loss model to evaluate financial instrument impairment, it's necessary to make significant judgments and estimates on the expected credit loss model, and all reasonable and well-founded information needs to be taken into account, including forward-looking information. When such judgments and estimates are made, the expected changes in the debtor's credit risk are inferred based on historical data in combination with economic policies, macroeconomic indicators, industry risks, external market conditions, technological environment, andchanges incustomer circumstances.
(4)Provision forfalling price ofinventories
In accordance with the accounting policies of inventories, for the inventories that the costs were more than the net realizable value as well as out-of-date and dull-sale inventories, the Company withdrawn the provision for falling price of inventories on the lower one between costs and net realizable value. Evaluating the falling price of inventories needed the management level gain the valid evidence and take full consideration of the purpose of inventories, influence of events after balance sheet date and other factors, and then made relevant judgments and estimates. The actual amount and the difference of previous estimates would affect the carrying value of inventories and the withdrawal and reversal on provision forbad debtsof inventories during the period ofestimates being changed.
(5)The fair valueof financial instrument
For the financial instruments without active market, the Company recognized the fair value by various methods. These evaluation methods included discounted cash flow mode analysis, etc. The Company needed to estimate the future cash flow, credit risk, fluctuation rate of market and relativity and other factors, as well as choose the property discount rate. Due to the uncertainty of relevant assumptions, so their changes would affect the fair value of financial instrument.
For equity instrument investment or contracts with public offers, the cost will not be taken as theoptimalestimation ofthefair value bytheCompany since1January 2019.
(6)Provision forimpairment of long-term assets
The Company made a judgment on the non-current assets other than financial assets whether they had any indication of impairment on the balance sheet date. For the intangible assets without finite service life, other than the annual impairment test, they should be subject to the impairment test when there was any indication of impairment. For other non-current non-financial assets, which should be subjected to impairment test when there was indication ofimpairment indicated that thecarryingvaluecan’t be recoverable.
When the carrying value of the assets or assets portfolio was more than the recoverable
KonkaGroupCo.,Ltd. InterimReport2019 amount, which was the higher one between the net amount of fair value after deducting the disposal expenses and the discounted amount of the estimated future cash flow, it means impairment incurred.
The net amount of fair value after deducting the disposal expenses should be fixed the price in the sale agreement for similar assets in the fair transaction minus the increased costs directly attributableto theassets disposal.
When estimated the discounted value of future cash flow, the Company needed to make important judgment on the output, selling price, relevant costs and the discount rate for calculating the discounted amount, etc. When estimated the recoverable amount, the Company would adopt all the available documents, including the prediction for relevant output, selling price and relevant operating costs arising from reasonable and supportive assumptions.
The Company made the impairment test on goodwill at least one time per year, which required to predict the discounted amount of the future cash flow of the assets or assets portfolio with the distributed good will, for which, the Company needed to predict the future cash flow of the assets or assets portfolio, and adopt the property discounted rate to decide thediscounted amount offuture cash flow.
(7)Depreciation andamortization
For the investment real estate, fixed assets and intangible assets, the Company withdrew the depreciation and amortization by adopting the straight-line method during the service life after full consideration of the salvage value. The Company checked the service life periodically so as to decide the amount of depreciation and amortization at each Reporting Period. The service life was fixed by the Company in accordance with the previous experience of the similar assets and the expected technical update. If there was any significant change on the previous estimates, the depreciation and amortization expenses shouldbe adjusted.
(8)Deferred income tax assets
Within the limit that it was likely to have sufficient taxable profits to offset the losses, the Company recognized the deferred income tax assets by all the unused tax losses, which needed the management level of the Company to estimate time and amount of the future taxable profits incurred with many judgments, as well as integrate strategy of tax payment, to decide theamount ofdeferred income tax assets which should berecognized.
(9)Income tax
KonkaGroupCo.,Ltd. InterimReport2019 During the routine operating activities, there were some uncertainty in the ultimate tax treatment and calculation for parts of transactions. Some accounts of such transaction could be listed as pre-tax expenditures only after the approval of taxation authorities. If there were any differences between the ultimate result of recognition for these taxation maters and their initial estimates, the differences would affect the current income tax and deferred income tax at theperiod of ultimaterecognition.
(10)Internal early retirement welfare andsupplementary retirement welfare
Amounts of expenditures and liabilities of internal early retirement welfare and supplementary retirement welfare should be determined according to assumption terms. Assumption terms include discount rate, average growth rate of medical costs, growth rate of subsidies for early retirement employees and retirees and other factors. The differences of actual results and assumption should be confirmed immediately and included into costs of current year. Although the management have adopted reasonable assumption terms, changes of actual experience value and assumption terms may affect the internal early retirement welfare, supplementary retirement benefits and balance of liabilities.
(11)Provisions
The Company made the estimation on product quality guarantee, predicted loss of contract and the fine for delayed delivery etc. and withdrew the relevant provision for provisions in accordance the provisions of contract, current knowledge and experience. Under the condition that the contingent event has formed a current duty and fulfilling the duty is likely to cause the economical interest outflow the Company, the Company measures the provisions in accordance with the best estimate of the necessary expenses for the performance of the current duty. The recognition and measurement of provisions were heavily relied on the judgment of the management team. During the process of making judgment, the Company needed to appraise therelevant risks, uncertaintyand thetimevalueof money andetc.
Of which, the Company estimated the liabilities basing on the after-sale services commitments to the customers upon the sale, repair and reform of goods. When estimating the liabilities, the Company has fully taken the consideration of the latest repair experience, but which may not reflect the repair situation in the future. Any increase / decrease of the provisionfor estimated liabilities may affect theprofits and losses inthe future periods. (12)Measurement forfair value
Some assets and liabilities of this Company will be measured at fair value in the financial statements. The board of directors of this Company has established the appraisement committee (led by the CFO of this Company) to confirm appropriate appraisement
KonkaGroupCo.,Ltd. InterimReport2019 technology and input value for measurement of fair value. This Company will apply available and observable market data during estimating the fair value of some assets and liabilities. If the input value in Level 1 is not available, this Company will entrust a third qualified appraiser for the estimation. The appraisement committee will closely cooperate with the outside appraiser to determine proper estimation technology and input values of the related models. CFO submits a report to the discoveries of the appraisement committee to the board of directors of this Company to explain the reasons of fluctuation of fair value of related assets and liabilities. Related information of the appraisement technology and input value during the process of confirming the fair value of various assets and liabilities shall be disclosed inNote X.
V.Taxation
1.MainTaxesandTaxRate
Categoryoftaxes Specificsituationofthetaxesrate
VAT
Calculatedtheoutputtaxat3%,5%,6%,9%,10%,13%,16%andpaidtheVATbytheamount afterdeductingthedeductiblewithholdingVATatcurrentperiod,ofwhichtheVATapplicabletoeasycollectionwon’tbelongtothedeductiblewithholdingVAT.
Paid at7% of the circulating tax actually paid, of which Dongguan Packing, Dongguan Konka, Boluo Konka, Boluo Konka Precision, Chengdu Anren, XingDa HongYe, Shanghai Xinfeng, Urbanmaintenanceand
Xinfeng Microcrystalline, Binzhou Weiyijie, Beihai Jingmai, Binzhou Econ, Suining Pengxi constructiontax
Kangrun Environment Management Co., Ltd., Dayi Kangrun Water Co., Ltd. of5%. SubeiMongolAutonomousCountyKangrunWaterCo.,Ltd.paidbyhalfafterpaidof5%,andJiangxiKonkaandNanoCrystallizedGlassof1%.
ForHongKongKonka,KonkaHouseholdAppliancesInvestment,KonkaHouseholdAppliances InternationalTrading,KonkaZhisheng,JialiInternational,JiaxinTechnology,Kangjietong,Chain KingdomMemoryTechnologiesand KonkaMobility whoseassessableprofitdidnotexceedHKD2,000,000.00,theypaidat8.25%,andiftheirassessableprofitexceededHKD2,000,000.00, Enterpriseincometax
they paid at16.5%; Telecommunication Technology, Wankaida, Jiangxi Konka, Nano Crystallized Glass, Dongguan Konka, Econ Technology, E2info and XingDa HongYe of15%; and Europe Konka of31.8% including income tax of15% and business tax of16.8%. TheCompanyastheparentandothersubsidiariespaidat25%ofthetaxableincome.
Educationsurtax Paidat3%ofthecirculatingtaxactuallypaid.
LocaleducationsurtaxPaidat2%ofthecirculatingtaxactuallypaid.ShanghaiKonkapaidat1%.
Note: (1) The original tax rate applied by the Company on VAT taxable sales or imported goods was17%/11%. According to the Circular of the Ministry of Finance and the State Administration of Taxation on the Adjustment of VAT Tax Rate (CS[2018] No. 32), the
KonkaGroupCo.,Ltd. InterimReport2019 applicable tax rateis adjusted to16%/10%, beingeffective from 1May2018.
(2) In accordance with the Notice on Printing the Administration Method on Charging and Use of the Treatment Funds of Discarded Electronic Appliance and Electric Products issued by the Ministry of Finance, Ministry of Environmental Protection, National Development and Reform Commission, Ministry of Industry and Information, General Administration of Customs and National Taxation Bureau (CZ[2012] No. 34), and the Administration Method on Charging and Use of the Treatment Funds of Discarded ElectronicAppliance and Electric Products issued by National Taxation Bureau (GJSWZJGG[2012] No. 41), the domestic manufacturer of the electrical appliances and electronic products of PRC started to pay the treatment funds for discarded electrical appliance and electronic products according the sales volume (trusted processing amount) and relevant charging standards from 1 July 2012. According to the regulations, theGroup’s charging standards were RMB13 per set of TV, RMB12per set ofrefrigeratorand RMB7 per set ofwashing machine.
(3) According to regulations of Temporary Provisions of Income Tax of Trans-boundary Tax Payment Enterprises by State Administration of Taxation, resident enterprises without business establishment or places of legal persons should be tax payment enterprises with the administrative measures of income tax of “unified computing, level-to-level administration, local prepayment, liquidation summary, and finance transfer”. It came into force from 1 January 2008. According to the above methods, theCompany’s sales branch companies in each area will hand in the corporate income taxes in advance from 1 January 2008 and will befinal settled uniformly bytheCompany at the year-end.
(4)According to Notice on Implementing the Inclusive Taxation Reducing Policy among the Small and Micro Businesses issued by the MOF and the State Administration of Taxation(CS[2019] No.13), from 1 January 2019 to 31 December 2021, for the annual taxable income not exceeding RMB 1 Million Yuan from the small businesses with little profit, only25% shall be included as the taxable income and the corporate income tax shall be paid based on the20% tax rate; if the annual taxable income exceeds RMB1 Million but is less than RMB3 Million, only50% shall be included as the taxable income and the corporate income tax shall bepaid basedonthe20%tax rate.
2.TaxPreferenceandApprovedDocuments
(1) On 15 August 2017, Shenzhen Konka Telecommunications Technology Co., Ltd., the subsidiary of this Company obtained the high-tech enterprise certificate (certificate No.: SZ20170142) jointly issued by Shenzhen Technology Innovation Committee, Finance Commission of Shenzhen Municipality, Shenzhen Municipal Office, SAT, Shenzhen Local
KonkaGroupCo.,Ltd. InterimReport2019 Taxation Bureau, with a valid period of three years.According to related taxation regulations, Shenzhen Konka Telecommunications Technology Co., Ltd. enjoys related taxation preferential policies as a high-tech enterprise from 2017 to 2019 and pays the enterprise incometax as per thepreferential taxrateof15%.
(2) On 31 October 2017, Wankaida, the subsidiary of this Company obtained the High-tech Enterprise Certificate (certificate No.: GR201744204716) joint issued by Shenzhen Technology Innovation Committee, Finance Committee of Shenzhen Municipality, Shenzhen Municipal Office, SAT and Shenzhen Local Taxation Bureau with a valid period of three years. According to related taxation regulations, Wankaida enjoys related taxation preferential policies as a high-tech enterprise from 2017 to 2019 and pays the enterprise incometax as per thereferential taxrateof15%.
(3) On 23August 2017, Jiangxi Konka New Material Technology Co., Ltd., the subsidiary of this Company obtained the High-tech Enterprise Certificate (certificate No.: GR201736000497) jointly issued by Department of Science and Technology of Jiangxi Province, Department of Finance of Jiangxi Province, Jiangxi Provincial Office, SAT, Jiangxi Local Taxation Bureau with a valid period of three years. According to related taxation regulations, the company enjoys related taxation preferential policies as a high-tech enterprise from 2017 to 2019 and pays the enterprise income tax as per the preferential tax rateof15%.
(4) On 23 August 2017, Jiangxi Golden Phoenix Nano Crystallized Glass Co., Ltd., the subsidiary of Jiangxi Konka obtained the High-tech Enterprise Certificate (certificate No.: GR201736000110) jointly issued by Department of Science and Technology of Jiangxi Province, Department of Finance of Jiangxi Province, Jiangxi Provincial Office, SAT, Jiangxi Local Taxation Bureau with a valid period of three years. According to related taxation regulations, the company enjoys related taxation preferential policies as a high-tech enterprise from 2017 to 2019 and pays the enterprise income tax as per the preferential tax rateof15%.
(5) On 1 November 2017, Dongguan Konka Electronic Co., Ltd., the subsidiary of this Company obtained the High-tech Enterprise Certificate (certificate No.: GR201744003812) jointly issued by Department of Science and Technology of Guangdong Province, Department of Finance of Guangdong Province, Guangdong Provincial Office, SAT, Guangdong Local Taxation Bureau with a valid period of three years. According to related taxation regulations, the company enjoys related taxation preferential policies as a high-tech enterprise from 2017 to 2019 and pays the enterprise income tax as per the preferential tax
KonkaGroupCo.,Ltd. InterimReport2019 rateof15%.
(6) On 28 December 2017, Econ Technology, a subsidiary of the Company, obtained the High-tech Enterprise Certificate (certificate No.: GR201737001495) jointly issued by Department of Science and Technology of Shangdong Province, Department of Finance of Shangdong Province, Shangdong Provincial Office, SAT, Shangdong Local Taxation Bureau with a valid period of three years. According to the relevant tax regulations, the company enjoys related tax incentives for high-tech companies for three consecutive years from 2017 to2019,and is subject tocorporate incometax at apreferential rateof15%.
(7) On 16 October 2018, Shenzhen E2info Network Technology Co., Ltd., the subsidiary of this Company obtained the high-tech enterprise certificate (certificate No.: GR201844201969) jointly issued by Shenzhen Technology Innovation Committee, Finance Committee of Shenzhen Municipality, Shenzhen Taxation Bureau of SATwith a valid period of three years. According to related taxation regulations, the company enjoys related taxation preferential policies as a high-tech enterprise from 2018 to 2020 and pays the enterprise income tax as perthepreferential taxrate of15%.
(8) On 28 November 2018, theCompany’s subsidiary XingDa HongYe received the High-tech Enterprise Certificate (No.GR201844008446 with the 3-year period of validity) jointly issued by Department of Science and Technology of Guangdong Province, Department of Finance of Guangdong Province and State Administration of Taxation (Guangdong Provincial Tax Service). According to relevant tax regulations, from 2018 to 2020, the enterprise shall be eligible for enjoying relevant preferential tax policies as a new high-tech enterprise and corresponding corporate income tax shall be paid based on the preferential tax rateof15%.
(9) According to the Notice on Promoting the Development of VAT, Business Tax and Enterprise Income Tax Policy for Energy-Saving Service Industry issued by the Ministry of Finance and the State Administration of Taxation (Finance and Taxation[2010] No. 110), Lairun Holdings, Binhai Sewage Treatment and Donggang Kangrun Environment Management Co., Ltd. enjoys the preferential policy of tax exemptions for three years and halved in nextthree years.
(10)According to the fiscal and taxation document[2011] No. 100 published by the Ministry of Finance and the StateAdministration of Taxation, for the VAT general taxpayers who sell their self-developed and produced software products, the VAT shall be levied at the rate of13%, and then the part that the actual tax burden on theirVATexceeds 3 will be implemented with the policy of immediate withdrawal. TheCompany’s subsidiaries, Wankaida
KonkaGroupCo.,Ltd. InterimReport2019 Technology and ElectronicsTechnology all enjoy this preferential policy.
(11) According to the regulations of the Special Catalogue of VAT Concessions for Products and Labors with Comprehensive Utilization of Resources issued by the Ministry of Finance and the State Administration of Taxation (Finance and Taxation[2015] No. 78), the wastewater treatment business operated by Lairun Holdings, a subsidiary of Econ Technology, belongs to the this catalogue. Then after it has been levied the VAT at a rate of 13%, the actual tax burden on the wastewater treatment income tax will be refunded in accordance with the70% of the actual tax burden, and the actual tax burden on the renewable water income VAT will be refunded immediately at50%. That Lairun Holdings enjoyed the tax concession was registered and recorded in 25August 2017 in LaizhouTaxation Bureau of Shandong Province.
VI. Notes on MajorItems in Consolidated FinancialStatements ofthe Company
Unless otherwise noted, the following annotation item (including the mainitems，annotation of the financial statement of the Company), the period-begin refers to 1 January 2019, the period-end refers to 30 June 2019; the Current Period/Reporting Period refers to H1 of 2019 and thesameperiod oflast year refers toH1 of2018.
1.Monetary Capital
||
|-|
|Endingbalance|
|343,490.38|
|4,700,902,044.15|
|969,021,586.02|
|5,670,267,120.55|
|166,232,584.79|

 Note:① The ending balance of other monetary capital was fixed time deposit, various cash deposits which cannot be withdrawn at any time and other deposits with limitation on use. For details,refer to NoteVI. 64.Assets withRestricted Ownership orRight of Use.
② As of 30 June 2019, the monetary capital deposited overseas by the Company was RMB166,232,584.79(31 December 2018: RMB518,005,414.06).
2.Trading FinancialAssets
||
|-|
|Endingbalance|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|61,494,666.97|
|61,494,666.97|

 3.Notes Receivable
(1)Notes Receivable Listed byCategory
||
|-|
|Endingbalance|
|1,681,552,756.81|
|320,882,295.70|
|2,002,435,052.51|

 (2)Notes Receivable Pledged bytheCompany at thePeriod-end
Item Amountpledged at theend oftheterm
Bankacceptancebill 1,186,883,020.53 Total 1,186,883,020.53 (3) Notes Receivable which Had Endorsed by the Company or had Discounted and had not Dueonthe BalanceSheet Dateat thePeriod-end
||
|-|
|Amountofrecognitionterminationattheperiod-end|
|139,251,145.62|
|139,251,145.62|

 (4) Notes Transferred toAccounts Receivable because Drawer of the Notes Failed to Execute theContract orAgreement
Item Amountofthenotestransferredtoaccountsreceivableattheperiod-end Commercialacceptancebill 864,749,189.84 Total 864,749,189.84 4.Accounts Receivable
(1)Disclosed byAging
Aging Endingbalance
Within1year 4,143,821,438.63 1to2years 1,216,489,500.95 2to3years 38,764,411.87
3to4years 9,051,831.92
Over4years 515,179,630.58
Subtotal 5,923,306,813.95
KonkaGroupCo.,Ltd. InterimReport2019 Less:baddebtprovision 454,808,634.74 Total 5,468,498,179.21 (2)Listed byWithdrawal Methods for Bad Debt Provision
Endingbalance
|||||||
|-|-|-|-|-|-|
||Carryingamount||Baddebtprovision|||
||Amount|Proportion(%)|Amount|Withdrawalproportion(%)||
|Accountsreceivable,forwhichtheindependentprovisionforexpectedcreditlosses|962,812,125.96|16.25|146,605,971.30|15.23|816,206,154.66|
|Accountsreceivable,forwhichtheprovisionforexpectedcreditlosseswaswithdrawnaccordingtogroups||||||
|Including:aginggroup|4,310,261,291.73|72.77|256,888,183.88|5.96|4,053,373,107.85|
|Projectpaymentgroup|650,233,396.26|10.98|51,314,479.56|7.89|598,918,916.70|
||5,923,306,813.95|100.00|454,808,634.74|7.68|5,468,498,179.21|

 (Continued)
Beginningbalance
|||||||
|-|-|-|-|-|-|
||Carryingamount||Baddebtprovision|||
||Amount|Proportion(%)|Amount|Withdrawalproportion(%)||
|Accountsreceivable,forwhichtheindependentprovisionforexpectedcreditlosses|1,028,107,560.50|21.10|138,652,163.88|13.49|889,455,396.62|

KonkaGroupCo.,Ltd. InterimReport2019 Accounts
receivable,for
whichthe
provisionfor
expectedcredit
losseswas
withdrawn
accordingto
groups
|||||||
|-|-|-|-|-|-|
|Including:aginggroup|3,209,444,955.09|65.86|228,358,351.11|7.12|2,981,086,603.98|
|Projectpaymentgroup|635,426,998.71|13.04|48,510,094.99|7.63|586,916,903.72|
||4,872,979,514.30|100.00|415,520,609.98|8.53|4,457,458,904.32|

① Accounts receivable, for which, the independent provision for bad debt is made at the period-end
Endingbalance
||||
|-|-|-|
|Carryingamount|Baddebtprovision|Withdrawalpercentage(%)|
|300,027,889.84|30,002,788.98|10.00|
|200,000,000.00|10,000,000.00|5.00|
|115,000,000.00|5,750,000.00|5.00|
|84,500,000.00|4,225,000.00|5.00|
|65,221,300.00|6,522,130.00|10.00|
|50,000,000.00|5,000,000.00|10.00|
|50,000,000.00|2,500,000.00|5.00|
|24,462,454.04|24,462,454.04|100.00|
|18,907,586.44|18,907,586.44|100.00|

KonkaGroupCo.,Ltd. InterimReport2019 TreeviewBusinessRegistra
11,262,555.50 1,341,891.83 11.91 Difficulttorecoverall
tion
||||
|-|-|-|
|4,580,000.00|1,374,000.00|30.00|
|3,548,995.63|3,548,995.63|100.00|
|35,301,344.51|32,971,124.38|93.40|
|962,812,125.96|146,605,971.30|15.23|

② In the group, accounts receivable, for which, the provision for bad debt was made according toaging groups
Endingbalance
||||
|-|-|-|
|Carryingamount|Baddebtprovision||
|3,992,095,976.11|81,039,548.32||
|151,935,952.49|11,197,679.70||
|1,833,787.58|406,183.95||
|415,093.97|264,290.33||
|163,980,481.58|163,980,481.58||
|4,310,261,291.73|256,888,183.88|5.96|

③ In the group, accounts receivable, for which, the provision for bad debt was made according toproject payment groups
Endingbalance
||||
|-|-|-|
|Carryingamount|Baddebtprovision||
|436,255,337.94|21,812,766.90||
|176,431,094.87|17,643,109.49||
|34,818,909.77|10,445,672.93||
|2,565,042.33|1,282,521.17||
|163,011.35|130,409.07||
|650,233,396.26|51,314,479.56|7.89|

(3)BadDebt Provision
|||
|-|-|
|Beginning|Increase/decrease|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|balance|||||
|138,652,163.88|15,972,908.35|7,297,925.88|721,175.05||
|228,358,351.11|29,952,918.14||1,423,085.37||
|48,510,094.99|4,498,210.07|1,693,825.50|-|51,314,479.56|
|415,520,609.98|50,424,036.56|8,991,751.38|2,144,260.42|454,808,634.74|

 Of which, bad debt provision recovered or reversed during the Reporting Period with significant amount
||
|-|
|Amountrecoveredorreversed|
|3,000,000.00|
|3,000,000.00|

(4)Accounts Receivable withoutActualVerification for theReporting Period
(5) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party
The total amount of top five of account receivable of ending balance collected by arrears party was RMB1,682,366,170.42, accounting for28.40% of total closing balance of account receivable, the relevant ending balance of bad debt provision withdrawn was RMB68,289,781.16.
5.FinancingBacked byAccounts Receivable
KonkaGroupCo.,Ltd. InterimReport2019 Endingamount
|||
|-|-|
|Cost|Changeinfairvalue|
|107,299,247.91||
|107,299,247.91||

 6.Prepayments
(1)List byAgingAnalysis
||||||
|-|-|-|-|-|
|Endingamount|||||
|Carryingamount||Baddebtprovision|Carryingamount||
|Amount|Proportion(%)||Amount|Proportion(%)|
|2,939,552,528.44|99.58|240,694.09|1,029,600,745.72|98.97|
|8,528,194.82|0.29|113,522.85|7,171,926.78|0.69|
|829,001.69|0.03|-|543,662.41|0.05|
|3,011,719.40|0.10|2,879,285.83|3,034,224.15|0.29|
|2,951,921,444.35|100.00|3,233,502.77|1,040,350,559.06|100.00|

 Notes: (1) Significant prepayment with aging more than 1 year was mainly the prepayment ofcompanies withnocooperation.
(2) The total amount of top five of prepayment of ending balance collected by arrears party was RMB818,482,404.96,accounting for27.73%oftotal ending balance of prepayment. (3) The withdrawal amount of bad debt provision this year was of RMB 217,172.46; the collected or reversed bad debt provision was RMB 357,050.05 for the Reporting Period; and there was no write-off bad debt provision; the increased amount was of RMB 1,988.86 due to changes in exchange rate.
7.InterestReceivable
||
|-|
|Endingbalance|
|2,123,030.91|
|61,111.11|
|570,555.88|
|2,754,697.90|

KonkaGroupCo.,Ltd. InterimReport2019 8.Dividends receivable
||
|-|
|Endingbalance|
|547,848.62|
|547,848.62|

 9.OtherReceivables
①Listed byaging
Aging Endingbalance Beginningbalance
Within1year 866,539,175.80 256,528,018.58 1to2years 119,169,126.08 135,441,669.13 2to3years 13,962,189.10 14,670,505.12 3to4years 85,954,676.09 86,704,294.17 4to5years 20,288,652.89 22,177,189.05 Over5years 105,258,349.82 103,804,041.19 Subtotal 1,211,172,169.78 619,325,717.24 Less:baddebtprovision 223,508,385.89 215,418,640.28 Total 987,663,783.89 403,907,076.96②ClassifiedbyAccount Nature
Nature Endingbalance Beginningbalance
Energy-savingsubsidies 183,063,658.63 165,912,605.30 Intercoursefunds 152,402,680.00 152,402,680.00 Borrowingsofrelated-parties 549,297,719.43 130,429,176.41 Buyout financial service income
161,326,980.03 59,252,474.98 receivable
Otherexternalborrowings 73,269,178.08 29,403,385.01 Depositandmargin 18,228,687.41 18,228,687.41 Equitytransferredmoney 3,207,318.07 3,500,807.51 Prettycash 70,375,948.13 60,195,900.62 Subtotal 1,211,172,169.78 619,325,717.24 Less:baddebtprovision 223,508,385.89 215,418,640.28
Total 987,663,783.89 403,907,076.96
KonkaGroupCo.,Ltd. InterimReport2019③Withdrawal ofBad Debt Provision
|||||
|-|-|-|-|
|PhaseI|PhaseII|PhaseIII||
|Expectedcreditlossesoverthenext12months|Expectedcreditlossesfortheentireduration(nocreditimpairment)|Expectedcreditlossesfortheentireduration(withcreditimpairment)||
|41,911,687.09||173,506,953.19||
|8,409,900.19||237,782.80||
|463,866.81||||
|94,070.57||||
|49,763,649.90|-|173,744,735.99|223,508,385.89|

KonkaGroupCo.,Ltd. InterimReport2019 Endingbalance
|||||
|-|-|-|-|
|Carryingamount||Baddebtprovision||
|Amount|Proportion(%)|Amount|Proportion(%)|
|184,507,567.33|15.23|173,744,735.99|94.17|
|600,472,545.09|49.58|45,501,729.33|7.58|
|426,192,057.361,211,172,169.78|35.19|4,261,920.57223,508,385.89|1.00|
||100||18.45|

 Beginningbalance
||||||
|-|-|-|-|-|
|Carryingamount||Baddebtprovision|||
|Amount|Proportion(%)|Amount|Proportion(%)||
|184,619,007.33|29.80|173,506,953.19|93.98|11,112,054.14|
|388,967,784.28|62.81|41,436,970.43|10.65|347,530,813.85|
|45,738,925.63|7.39|474,716.66|1.04|45,264,208.97|
|619,325,717.24|100|215,418,640.28|34.78||

④Bad Debt Provision
|||||
|-|-|-|-|
|Beginningbalance|Increases/decrease|||
||Withdrawal|Recoveredorreversed|Otherdecrease|

KonkaGroupCo.,Ltd. InterimReport2019 Otherreceivables,for
whichthe
independent 173,506,953.19 237,782.80 - - 173,744,735.99 provisionfor
expectedcreditlosses
||||||
|-|-|-|-|-|
|41,436,970.43|4,622,696.27|463,866.81|94,070.57||
|474,716.65215,418,640.28|3,787,203.928,647,682.99||-||
|||463,866.81|94,070.57|223,508,385.89|

⑤There was noother receivables with actual verification for theReporting Period.
⑥Top 5OtherReceivablesinEnding Balance Collected according to theArrears Party
|||||
|-|-|-|-|
|Nature|Endingbalance|Aging|Proportionofendingbalanceofthetotalotheraccountsreceivable|
|Intercoursefunds|297,256,700.00|With1year|24.54|
|Subsidies|152,402,680.00|4to5yearsandover5years|12.58|
|Intercoursefundsoforiginalshareholdersofsubsidiariesacquired|99,798,640.31|1to2yearsandwithin1year|8.24|
|SharetransferaccountsIntercoursefundsoforiginalfundsofsubsidiariesacquired|83,265,018.32|1to2yearsandwithin1year|6.87|
|Cashdeposit|48,000,000.00|1to2years|3.96|
||680,723,038.63||56.19|

⑦ There was no accounts receivable involved in government subsidies for the Reporting
Period
⑧ There was no other receivables derecognized for transfer of financial assets for the
KonkaGroupCo.,Ltd. InterimReport2019 ReportingPeriod.
⑨ There was no financial assets and liabilities generated from transfer of other receivables and continuous involvement fortheReporting Period
10.Inventory
(1)Category ofInventory
Endingbalance
||||
|-|-|-|
|Carryingamount|Ofwhich: thecapitalizedamountoftheborrowings|Fallingpricereserves|
|-||-|
|||-|
|-||-|
|1,608,135,086.58||76,153,832.27|
|122,456,507.95||9,309,280.42|
|4,420,172,314.59||299,560,364.57|
|44,495,341.20||-|
|6,195,259,250.32||385,023,477.26|
|6,195,259,250.32||385,023,477.26|

 (Continued)
Beginningbalance
||||
|-|-|-|
|Carryingamount|Ofwhich: thecapitalizedamountoftheborrowings|Fallingpricereserves|

KonkaGroupCo.,Ltd. InterimReport2019 Beginningbalance
||||
|-|-|-|
|Carryingamount|Ofwhich: thecapitalizedamountoftheborrowings|Fallingpricereserves|
|85,167,073.18|2,470,133.87|-|
|70,855,200.00|-|-|
|156,022,273.18|2,470,133.87|-|
|1,122,370,078.37|-|73,754,748.97|
|89,334,764.13|-|10,260,152.74|
|4,518,051,460.16|-|330,081,328.25|
|15,922,881.17|-|-|
|5,745,679,183.83|-|414,096,229.96|
|5,901,701,457.01|2,470,133.87|414,096,229.96|

 (2)List oftheDevelopment Cost
||||
|-|-|-|
|Startingtime|Expectedcompletiontimeofthenextbatch|Beginningamount|
|April2018|December2022|85,167,073.18|
|||85,167,073.18|

 (3)FallingPrice Reserves ofInventory
||||||
|-|-|-|-|-|
|Beginningbalance|Increasedamount||Decreasedamount||
||Withdrawal|Increaseofmerger|Reverseorwrite-off|Decreaseoflosingcontrollingright|
|73,754,748.97|3,721,593.79||801,912.81|520,597.68|
|10,260,152.74|663,571.13||861,745.33|752,698.12|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Beginningbalance|Increasedamount||Decreasedamount||
||Withdrawal|Increaseofmerger|Reverseorwrite-off|Decreaseoflosingcontrollingright|
|330,081,328.25|8,437,560.87||36,898,999.61|2,059,524.94|
|414,096,229.96|12,822,725.79|-|38,562,657.75|3,332,820.74|

 (4) Withdrawal Provision Basis of the Falling Price of the Inventory and the Reasons of the Reversed orWrite-off
|||
|-|-|
|Specificbasisofwithdrawaloffallingpricereservesofinventory|Reasonsforreverse|
|Therealizablenetvaluewaslowerthanthecarryingvalue|—|
|Therealizablenetvaluewaslowerthanthecarryingvalue|—|
|Therealizablenetvaluewaslowerthanthecarryingvalue|—|

(5) Ending balance of the inventory which includes capitalized borrowing expenses was RMB0.
(6)Finished but UnsettledAssets from Construction Contract
Item Amount
Accumulativelyincurredcosts
714,468,271.18 Accumulativelyrecognizedgrossmargin
129,583,491.29 Less:estimatedloss
- Settledamounts
799,556,421.27 FinishedbutUnsettledAssetsfromConstructionContract
44,495,341.20 11.CurrentPortion of Non-currentAssets
|||
|-|-|
|Endingbalance|Beginningbalance|
|53,237,851.30|22,318,208.13|

KonkaGroupCo.,Ltd. InterimReport2019
|||
|-|-|
|Endingbalance|Beginningbalance|
|53,237,851.30|22,318,208.13|

12.OtherCurrentAssets
||
|-|
|Endingbalance|
|1,148,697,055.18|
|-|
|591,353,068.73|
|-|
|26,485,236.11|
|1,766,535,360.02|

 13.Long-term Receivables
(1)ListofLong-term Receivables
|||||||
|-|-|-|-|-|-|
|Endingbalance|||Beginningbalance|||
|Carryingamount|Impairmentprovision|Carryingvalue|Carryingamount|Impairmentprovision|Carryingvalue|
|115,943,583.65|-|115,943,583.65|55,893,266.81|-|55,893,266.81|
|11,363,170.60|-|11,363,170.60|4,975,887.40|-|4,975,887.40|
|7,801,495.81|-|7,801,495.81|7,801,495.81|-|7,801,495.81|
|349,416,483.56|-|349,416,483.56|349,416,483.56|-|349,416,483.56|
|53,237,851.30|-|53,237,851.30|22,318,208.13|-|22,318,208.13|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Endingbalance|||Beginningbalance|||
|Carryingamount|Impairmentprovision|Carryingvalue|Carryingamount|Impairmentprovision|Carryingvalue|
|419,923,711.72|-|419,923,711.72|390,793,038.05|-|390,793,038.05|

 (2)List ofProjects with Franchise Rights
|||||
|-|-|-|-|
|Type|Projectscale|Franchiseright|Dateofcontract|
|PPP|163,558,100.00|Right of charge forsewage disposal|July 2016|

KonkaGroupCo.,Ltd. InterimReport2019
(3)Changes in Long-term Receivables ofProjects withFranchise Rights
||||||||||
|-|-|-|-|-|-|-|-|-|
|Initialinvestedamount|Beginningbalance|Increase|||Decrease|||Endingbalance|
|||MergerincreaseintheReportingPeriod|Newlyincreasedinvestmentamount|Interestincome|Principalrecover|Interestrecover|Otherdecrease||
|349,416,483.56|349,416,483.56|-|-|-|-|-|-|349,416,483.56|
|349,416,483.56|349,416,483.56|-|-|-|-|-|-|349,416,483.56|

 14.Long-term Equity Investment
|||||||
|-|-|-|-|-|-|
|Beginningbalance||||||
||Additionalinvestment|Increaseforcombinations|Decreasedinvestment|Investmentprofitandlossrecognizedundertheequitymethod|Adjustmentofothercomprehensiveincome|
|2,359,048.04|-|-|-|-490,743.29|-|
|1,605,469.87|-|-|-|-144,833.79|-|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance||||||
||Additionalinvestment|Increaseforcombinations|Decreasedinvestment|Investmentprofitandlossrecognizedundertheequitymethod|Adjustmentofothercomprehensiveincome|
|777,956.58|-|-|-|-514,281.92|-|
|19,750,739.24|-|-|-|-|-|
|83,329,443.68|-|-|-|-2,592,517.96|-|
|49,170,159.29|-|-|-|902,086.78|-|
|759,258.94|-|-|-|-|-|
|2,757,557.31|-|-|-|-836,000.00|-|
|4,868,798.36|12,000,000.00|-|-|-647,925.56|-|
|50,929,429.45|-|-|17,000,000.00|-|-|
|2,440,433.26|-|-|-|-|-|
|4,571,472.70|-|-|-|-|-|
|-|-|-|-|-|-|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance||||||
||Additionalinvestment|Increaseforcombinations|Decreasedinvestment|Investmentprofitandlossrecognizedundertheequitymethod|Adjustmentofothercomprehensiveincome|
|59,671,933.63|-|-|-|9,761,794.24|-|
|24,745,069.48|-|-|-|-|-|
|100,277,552.55|-|-|-|70,860.88|-|
|26,656,667.58|-|-|-|-10,458,637.68|-|
|222,210,835.18|-|-|-|1,615,602.55|-|
|624,845,604.93|-|-|-|13,279,493.50|-|
|78,409,903.14|-|-|-|-180,177.55|-|
|11,040,246.82|-|-|-|428,175.28|-|
|2,287,478.52|-|-|-|-152,488.28|-|
|10,617,873.79|-|-|-|-2,230,059.14|-|
|-|-|-|-|-|-|
|3,592,514.06|-|-|3,592,514.06|-|-|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance||||||
||Additionalinvestment|Increaseforcombinations|Decreasedinvestment|Investmentprofitandlossrecognizedundertheequitymethod|Adjustmentofothercomprehensiveincome|
|200,694,466.80|-|-|-|-4,811,843.11|-|
|269,673,264.00|-|-|-|-|-|
|436,685,064.57|-|-|-|-|-|
|79,859,338.44|-|-|-|1,056,895.31|-|
|6,400,480.52|-|-|-|-239,050.00|-|
|4,522,509.33|-|-|-|-|-|
|252,270,255.47|-|-|-|5,620,617.83|-|
|-|4,000,000.00|-|-|-287,791.69|-|
|-|6,000,000.00|-|-|10,492.58|-|
|-|-|-|-|-935.98|-|
|-|15,819,210.00|-|-|-|-|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance||||||
||Additionalinvestment|Increaseforcombinations|Decreasedinvestment|Investmentprofitandlossrecognizedundertheequitymethod|Adjustmentofothercomprehensiveincome|
|-|1,600,000.00|-|-|-617,458.44|-|
|-|-|-|-|-|-|
|-|-|-|-|-|-|
|-|10,000,000.00|-|-|-|-|
|2,637,780,825.53|49,419,210.00|-|20,592,514.06|8,541,274.56|-|

 (Continued)
|||||||
|-|-|-|-|-|-|
|Increase/decreaseintheReportingPeriod|||||Endingbalance|
|Declarationofcashdividendsorprofits|Withdrawnimpairmentprovision|Costmethodconvertedintoequitymethod|Financialassetsconvertedintoequitymethod|Other||
|-|-|-|-|-|1,868,304.75|
|-|-|-|-|-|1,460,636.08|
|-|-|-|-|-|263,674.66|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Increase/decreaseintheReportingPeriod|||||Endingbalance|
|Declarationofcashdividendsorprofits|Withdrawnimpairmentprovision|Costmethodconvertedintoequitymethod|Financialassetsconvertedintoequitymethod|Other||
|-|-|-|-|-|19,750,739.24|
|-|-|-|-|-|80,736,925.72|
|-|-|-|-|-|50,072,246.07|
|-|-|-|-|-|759,258.94|
|-|-|-|-|-|1,921,557.31|
|-|-|-|-|-|16,220,872.80|
|-|-|-|-|-|33,929,429.45|
|-|-|-|-|-|2,440,433.26|
|-|-|-|-|-|4,571,472.70|
|-|-|-|-|-|-|
|-|-|-|-|-|69,433,727.87|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Increase/decreaseintheReportingPeriod|||||Endingbalance|
|Declarationofcashdividendsorprofits|Withdrawnimpairmentprovision|Costmethodconvertedintoequitymethod|Financialassetsconvertedintoequitymethod|Other||
|-|-|-|-|-|24,745,069.48|
|-|-|-|-|-|100,348,413.43|
|-|-|-|-|-|16,198,029.90|
|-|-|-|-|-|223,826,437.73|
|-|-|-|-|-|638,125,098.43|
|-|-|-|-|-|78,229,725.59|
|2,070,000.00|-|-|-|-|9,398,422.10|
|-|-|-|-|-|2,134,990.24|
|-|-|-|-|-|8,387,814.65|
|-|-|-|-|-|-|
|-|-|-|-|-|-|
|-|-|-|-|-|195,882,623.69|
|-|-|-|-|-|269,673,264.00|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Increase/decreaseintheReportingPeriod|||||Endingbalance|
|Declarationofcashdividendsorprofits|Withdrawnimpairmentprovision|Costmethodconvertedintoequitymethod|Financialassetsconvertedintoequitymethod|Other||
|-|-|-|-|-|436,685,064.57|
|-|-|-|-|-|80,916,233.75|
|-|-|-|-|-|6,161,430.52|
|-|-|-|-|-|4,522,509.33|
|-|-|-|-|-|257,890,873.30|
|-|-|-|-|-|3,712,208.31|
|-|-|-|-|-|6,010,492.58|
|-|-|-|-|-|-935.98|
|-|-|-|-|-|15,819,210.00|
|-|-|-|-|-|982,541.56|
|-|-|112,500,000.00|-|-|112,500,000.00|
|-|-|61,029,500.00|-|-|61,029,500.00|
|-|-|-|-|-|10,000,000.00|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Increase/decreaseintheReportingPeriod|||||Endingbalance|
|Declarationofcashdividendsorprofits|Withdrawnimpairmentprovision|Costmethodconvertedintoequitymethod|Financialassetsconvertedintoequitymethod|Other||
|2,070,000.00|-|173,529,500.00|-|-|2,846,608,296.03|

KonkaGroupCo.,Ltd. InterimReport2019 15.OtherEquity Instrument Investment
(1)OtherEquity InstrumentInvestment
||
|-|
|Endingbalance|
|-|
|-|
|-|
|-|
|3,360,809.20|
|953,000.00|
|7,726,405.16|
|2,400,000.00|
|4,700,000.00|
|19,140,214.36|

 (2)Non-transactional EquityInstrument Investment
|||||||
|-|-|-|-|-|-|
|Dividendincomerecognizedinthecurrentperiod|Accumulativegain|Accumulativeloss|Amountofretainedearningstransferredfromothercomprehensiveincome|Reasonformeasureatfairvalueofwhichrecordedinothercomprehensiveincome|Reasonforretainedearningstransferredfromothercomprehensiveincome|
|-|-|4,800,000.00|-|Long-termholding based onstrategicpurpose||
|-|-|1,300,000.00|-|Long-termholding based onstrategicpurpose||
|-|-|100,000.00|-|Long-termholding based onstrategicpurpose||
|-|-|485,000.00|-|Long-termholding based on||

KonkaGroupCo.,Ltd. InterimReport2019 Investment strategicpurpose
Development
Co.,Ltd.
||||||
|-|-|-|-|-|
|-|-|1,639,190.80|-|Long-termholding based onstrategicpurpose|
|-|-|200,000.00|-|Long-termholding based onstrategicpurpose|
|-|-|1,273,594.84|-|Long-termholding based onstrategicpurpose|
|-|-|-|-|Long-termholding based onstrategicpurpose|
|-|-|-|-|Long-termholding based onstrategicpurpose|
|-|-|9,797,785.64|-|-|

16.OtherNon-currentFinancialAssets
|||
|-|-|
|Endingbalance|Beginningbalance|
|1,548,364,400.00|548,230,000.00|
|-|-|
|1,548,364,400.00|548,230,000.00|
|-|-|
|-|-|
|-|-|
|-|-|
|-|-|

KonkaGroupCo.,Ltd. InterimReport2019 Hybridinstrumentinvestment - -
|||
|-|-|
|-|-|
|1,548,364,400.00||

 17.InvestmentProperty
Item Housesandbuildings
I.Originalcarryingvalue
1.Beginningbalance 249,923,047.75 2.Increasedamountoftheperiod - 3.Decreasedamountoftheperiod - 4.Endingbalance
249,923,047.75 II.Theaccumulativedepreciationandaccumulativeamortization
1.Beginningbalance 39,098,692.03 2.Increasedamountoftheperiod 2,815,637.15 3.Decreasedamountoftheperiod - 4.Endingbalance
41,914,329.18 III.Impairmentprovision
1.Beginningbalance - 2.Increasedamountoftheperiod - 3.Decreasedamountoftheperiod - 4.Endingbalance
- IV.Carryingvalue
1.Endingcarryingvalue 208,008,718.57 2.Beginningcarryingvalue 210,824,355.72
KonkaGroupCo.,Ltd. InterimReport2019
18.FixedAssets
||
|-|
|Endingbalance|
|2,228,083,633.72|
|-|
|2,228,083,633.72|

 (1)List ofFixedAssets
||||||
|-|-|-|-|-|
|Housesandbuildings|Machineryequipment|Electronicequipment|Transportationequipment|Otherequipment|
|2,160,081,403.23|1,847,565,534.04|172,793,417.25|58,660,252.15|198,441,334.30|
|5,643,529.56|115,070,706.88|4,688,868.33|2,958,435.02|23,965,789.47|
|4,784,564.00|61,595,856.44|4,688,868.33|2,778,482.63|22,761,636.88|
|858,965.56|53,474,850.44|-|179,952.39|1,204,152.59|
|-|-|-|-|-|
|188,396,950.55|135,617,037.24|3,337,442.38|2,715,136.85|9,755,719.38|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Housesandbuildings|Machineryequipment|Electronicequipment|Transportationequipment|Otherequipment|
|188,396,950.55|130,413,329.34|3,218,185.73|2,715,136.85|8,201,461.59|
|-|5,203,707.90|119,256.65|-|1,554,257.79|
|1,977,327,982.24|1,827,019,203.68|174,144,843.20|58,903,550.32|212,651,404.39|
|634,795,930.27|1,001,329,043.28|135,908,033.93|40,186,544.94|141,731,721.09|
|34,444,579.79|124,022,789.19|5,605,567.26|2,577,771.53|7,517,236.49|
|34,444,579.79|124,022,789.19|5,605,567.26|2,577,771.53|7,517,236.49|
|-|-|-|-|-|
|68,377,572.01|93,346,740.86|2,921,077.76|2,282,488.32|8,165,511.68|
|68,377,572.01|91,138,587.26|2,840,604.68|2,282,488.32|7,104,537.04|
|-|2,208,153.60|80,473.08|-|1,060,974.64|
|600,862,938.05|1,032,005,091.61|138,592,523.43|40,481,828.15|141,083,445.90|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Housesandbuildings|Machineryequipment|Electronicequipment|Transportationequipment|Otherequipment|
|1,247,805.91|68,610,152.04|1,215,451.65|820,215.24|1,470,546.81|
|-|-|-|-|-|
|-|-|-|-|-|
|-|-|-|-|-|
|-|4,318,285.23|4,350.83|-|104,012.62|
|-|4,318,285.23|4,350.83|-|104,012.62|
|-|-|-|-|-|
|1,247,805.91|64,291,866.81|1,211,100.82|820,215.24|1,366,534.19|
|1,375,217,238.28|730,722,245.26|34,341,218.95|17,601,506.93|70,201,424.30|
|1,524,037,667.05|777,626,338.72|35,669,931.67|17,653,491.97|55,239,066.40|

KonkaGroupCo.,Ltd. InterimReport2019 (2)List ofTemporarily Idle FixedAssets
||||
|-|-|-|
|Originalcarryingvalue|Accumulativedepreciation|Impairmentprovision|
|16,406,610.84|6,178,421.06|7,349,335.30|
|1,942,358.43|1,433,032.24|-|
|125,981.91|113,383.72|-|
|547,252.26|456,847.47|43,847.23|
|19,022,203.44|8,181,684.49|7,393,182.53|

(3)FixedAssets Leased in from Financing Lease
||||
|-|-|-|
|Originalcarryingvalue|Accumulativedepreciation|Impairmentprovision|
|77,615,759.89|15,019,413.62|-|
|205,128.20|177,777.77|-|
|77,820,888.09|15,197,191.39|-|

 (4)FixedAssets Leased out from Operation Lease
Item Endingcarryingvalue
Housesandbuildings 59,181,043.13 Mechanicalequipment 10,345,367.42 Total 69,526,410.55 (5)Details ofFixedAssetsFailed toAccomplish Certification of Property
|||||
|-|-|-|-|
|Originalcarryingvalue|Accumulativedepreciation|Impairmentprovision|Netcarryingvalue|
|3,628,629.00|251,736.18|-|3,376,892.82|
|10,189,892.23|1,204,561.09|-|8,985,331.14|

KonkaGroupCo.,Ltd. InterimReport2019 Shenyang
|||||
|-|-|-|-|
|20,018,497.00|8,869,726.65|-|11,148,770.35|
|76,610,752.33|34,319,203.86|-|42,291,548.47|
|31,336,020.00|352,530.26|-|30,983,489.74|
|112,397,538.12|32,923,207.13|-|79,474,330.99|
|2,653,000.00|1,303,286.25|-|1,349,713.75|

KonkaGroupCo.,Ltd. InterimReport2019
19.Construction inProgress
||
|-|
|Endingbalance|
|2,776,018,241.52|
|-|
|2,776,018,241.52|

 (1)List ofConstruction in Progress
||||||
|-|-|-|-|-|
|Endingbalance|||||
|Carryingamount|Impairmentprovision|Carryingvalue|Carryingamount|Impairmentprovision|
|570,766,842.65|-|570,766,842.65|451,789,427.70|-|
|552,623,974.82|-|552,623,974.82|552,055,516.50|-|
|261,680,935.60|-|261,680,935.60|261,826,586.30|-|
|371,215,114.23|-|371,215,114.23|365,069,872.84|-|
|304,826,822.19|-|304,826,822.19|303,533,244.21|-|
|156,084,314.80|-|156,084,314.80|153,577,240.57|-|
|414,945,586.48|-|414,945,586.48|-|-|
|143,874,650.75||143,874,650.75|89,019,642.68||

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Endingbalance|||||
|Carryingamount|Impairmentprovision|Carryingvalue|Carryingamount|Impairmentprovision|

(2)Changes ofSignificant Construction inProgress
|||||||
|-|-|-|-|-|-|
|Estimatednumber|Beginningbalance|IncreaseAmount|Mergerincreaseamount|Amountthattransferredtolong-termfixedassetsoftheperiod|Otherdecreasedamountoftheperiod|
|RMB1299million|451,789,427.70|118,977,414.95|-|-|-|
|RMB970 million|552,055,516.50|568,458.32|-|-|-|
|RMB2,850million|261,826,586.30|-|-|-|145,650.70|
|RMB381 million|365,069,872.84|10,666,706.57|-|4,521,465.18|-|
|RMB434 million|303,533,244.21|6,075,209.13|-|4,781,631.15|-|
|RMB241 million|153,577,240.57|2,507,074.23|-|-|-|
|RMB972 million|-|414,949,989.00||4,402.52|-|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Estimatednumber|Beginningbalance|IncreaseAmount|Mergerincreaseamount|Amountthattransferredtolong-termfixedassetsoftheperiod|Otherdecreasedamountoftheperiod|
||89,019,642.68|102,960,858.62||47,569,820.30|536,030.25|
||2,176,871,530.80|656,705,710.82|-|56,877,319.15|681,680.95|

（Continued）
||||||
|-|-|-|-|-|
|Proportionestimatedoftheprojectaccumulativeinput(%)|Projectprogress|Accumulativeamountofcapitalizedinterests|Ofwhich:theamountofthecapitalizedinterestsoftheperiod|Capitalizationrateoftheinterestsoftheperiod(%)|
|43.95|43.95|4,414,083.33|4,414,083.33|2.71|
|56.97|56.97|-|-|-|
|9.18|9.18|-|-|-|
|98.56|98.56|26,987,072.16|4,218,634.18|7.00|
|71.40|71.40|31,299,947.21|4,453,246.18|7.00|
|64.76|64.76|-|-|-|
|42.68|42.68|-|-|-|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Proportionestimatedoftheprojectaccumulativeinput(%)|Projectprogress|Accumulativeamountofcapitalizedinterests|Ofwhich:theamountofthecapitalizedinterestsoftheperiod|Capitalizationrateoftheinterestsoftheperiod(%)|
|-|-|-|-|-|
|-|-|62,701,102.70|13,085,963.69|-|

 20.IntangibleAssets
(1)List ofintangible assets
|||||||
|-|-|-|-|-|-|
|Landuseright|Intellectualproperty|||||
||Trademarkright|Patentandknow-how|Franchiserights|Righttousesoftwareandothers|Subtotal|
|440,540,757.52|47,490,161.70|195,491,851.74|111,050,625.01|80,373,189.03|434,405,827.48|
|78,468,000.00|-|-|-|3,328,272.05|3,328,272.05|
|78,468,000.00|-|-|-|1,647,939.92|1,647,939.92|
|-|-|-|-|1,680,332.12|1,680,332.12|
|-|-|-|-|-|-|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Landuseright|Intellectualproperty|||||
||Trademarkright|Patentandknow-how|Franchiserights|Righttousesoftwareandothers|Subtotal|
|7,289,880.61|-|-|-|4,487,025.17|4,487,025.17|
|7,147,153.06|-|-|-|-|-|
|142,727.55|-|-|-|4,487,025.17|4,487,025.17|
|511,718,876.91|47,490,161.70|195,491,851.74|111,050,625.01|79,214,435.90|433,247,074.35|
|40,662,235.55|5,364,671.49|46,294,309.44|6,663,037.50|35,284,562.07|93,606,580.50|
|6,285,855.53|-|260,325.44|2,221,012.50|3,751,363.02|6,232,700.96|
|6,285,855.53|-|260,325.44|2,221,012.50|3,751,363.02|6,232,700.96|
|-|-|-|-|-|-|
|3,035,596.91|-|-|-|7,744.26|7,744.26|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Landuseright|Intellectualproperty|||||
||Trademarkright|Patentandknow-how|Franchiserights|Righttousesoftwareandothers|Subtotal|
|3,035,596.91|-|-|-|-|-|
|-|-|-|-|7744.26|7,744.26|
|43,912,494.17|5,364,671.49|46,554,634.88|8,884,050.00|39,028,180.83|99,831,537.20|
|-|-|2,901,082.61|-|-|2,901,082.61|
|-|-|-|-|-|-|
|-|-|-|-|-|-|
|-|-|-|-|-|-|
|-|-|-|-|-|-|
|-|-|-|-|-|-|
|-|-|-|-|-|-|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Landuseright|Intellectualproperty|||||
||Trademarkright|Patentandknow-how|Franchiserights|Righttousesoftwareandothers|Subtotal|
|-|-|2,901,082.61|-|-|2,901,082.61|
|467,806,382.74|42,125,490.21|146,036,134.25|102,166,575.01|40,186,255.07|330,514,454.54|
|399,878,521.97|42,125,490.21|146,296,459.69|104,387,587.51|45,088,626.96|337,898,164.37|

KonkaGroupCo.,Ltd. InterimReport2019 (2)LandUse Right with Certificate ofTitleUncompleted
||
|-|
|Carryingvalue|
|5,401,491.41|

 (3)Significant IntangibleAssets
||
|-|
|Endingcarryingvalue|
|102,166,575.01|
|92,117,647.06|
|72,612,368.45|
|38,694,416.25|
|37,786,666.67|

 (4)IntangibleAssets with restricted ownership orusing right
||
|-|
|Endingcarryingvalue|
|37,464,602.72|
|2,285,918.26|
|13,959,352.66|
|38,694,416.25|
|45,651,427.59|

 21.Goodwill
(1)Original CarryingValueofGoodwill
||||||
|-|-|-|-|-|
|Beginningbalance|Increased||Decreased||
||Formedfromthebusinesscombination|Other|Dispose|Other|
|3,597,657.15|-|-|-|-|
|467,825,151.34|-|-|-|-|
|340,111,933.01|-|-|-|-|
|44,156,682.25|-|-|-|-|
|855,691,423.75|-|-|-|-|

(2)Provisions forGoodwill Impairment
KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Beginningbalance|Increased||Decreased||
||Withdrawal|Other|Dispose|Other|
|-|-|-|-|-|
|-|-|-|-|-|
|-|-|-|-|-|
|-|-|-|-|-|
|-|-|-|-|-|

 22.Long-term Deferred Expenses
|||||
|-|-|-|-|
|Beginningbalance|Increasedamount|Amortizationamount|Decreaseduetoloseofcontrolpower|
|34,904,540.12|4,129,481.90|5,558,634.30|-|
|61,368,072.24|19,824,349.40|27,227,161.65|-|
|14,950,814.41|9,230,556.30|10,517,404.08|-|
|111,223,426.77|33,184,387.60|43,303,200.03|-|

 23.DeferredIncomeTaxAssets/DeferredIncomeTax Liabilities
(1)Deferred IncomeTaxAssets withoutOffset
||||
|-|-|-|
|Endingbalance|||
|Deductibletemporarydifference|Deferredincometaxassets|Deductibletemporarydifference|
|2,014,479,689.25|510,499,204.16|1,358,336,470.51|
|931,622,631.11|224,775,481.79|936,009,764.81|
|68,481,479.04|18,565,204.82|85,456,786.55|
|53,582,508.96|18,823,248.72|72,865,789.50|
|71,832,827.52|8,979,103.44|35,916,413.76|
|111,345,976.27|28,692,504.50|123,082,867.34|
|3,251,345,112.17|810,334,747.43|2,611,668,092.47|

(2)Lists ofDeferred IncomeTax Liabilities without Offset
Item
Endingbalance Beginningbalance
KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|Taxabletemporarydifference|Deferredincometaxliabilities|Taxabletemporarydifference|
|594,933,512.81|118,871,107.71|597,961,840.34|
|90,371,653.88|22,592,913.47|71,719,199.88|
|5,826,060.67|873,909.10|5,929,959.47|
|-|-|3,005,381.67|
|8,496,388.76|2,124,097.19|8,496,388.76|
|699,627,616.12|144,462,027.47|687,112,770.12|

 (3)List ofUnrecognized Deferred IncomeTaxAssets
||
|-|
|Endingbalance|
|2,652,826,212.81|
|568,390,308.42|
|3,221,216,521.23|

 24.OtherNon-currentAssets
||
|-|
|Endingbalance|
|265,516,500.31|
|120,000,000.00|
|37,975,365.16|
|24,003,225.05|
|-|
|647,814.39|
|12,193.56|
|448,155,098.47|

 25.Short-termBorrowings
||
|-|
|Endingbalance|
|12,251,505,460.85|
|12,251,505,460.85|
|699,162,352.25|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|Endingbalance|
|93,000,000.00|
|120,000,000.00|

 Note:① With the carrying value of RMB82,959,836.52 as the collateral of the second phase plant, Dongguan Konka obtained the loan of RMB70,000,000.00 from the Dongguan Branch ofIndustrial BankCo., Ltd.
② With the carrying value of RMB77,406,897.99 for plant and equipment, the land use right of RMB2,285,918.26, Jiangxi Konka obtained the loan of RMB23,000,000.00 from the sales department of JiangxiYongxiu Rural Commercial Bank Co.,Ltd.
③ With carrying value of RMB56,193,626.65 for plant and buildings, land use right of RMB37,464,602.72, and RMB19,800,000.00 unit certificates of deposit as collateral, and Shanghai Xinfeng Zhuoqun PCB Co., Ltd. Hu Zehong and Konka Group provide maximum amount guarantee, Xingda Hongye obtained mortgage loan RMB120,000,000.00 respectively from the Husha Branch of the agricultural bank of Zhongshan and Zhongshan Branch ofIndustrial Bank Co., Ltd.
26.Financial Liabilitiesat FairValuethroughProfitorLoss
||
|-|
|Endingbalance|
|-|
|-|

 27.Notes Payable
||
|-|
|Endingbalance|
|1,007,887,109.01|
|101,594,731.83|
|1,109,481,840.84|

 28.Accounts Payable
||
|-|
|Endingbalance|
|4,272,706,388.36|
|385,880,356.75|
|12,703,076.60|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|Endingbalance|
|30,574,622.38|
|4,701,864,444.09|

 (1)SignificantAccounts PayableAgingoverOneYear
||
|-|
|Endingbalance|
|193,700,604.12|
|193,700,604.12|

29.Advances fromCustomers
(1)List ofAdvances from Customers
||
|-|
|Endingbalance|
|806,357,448.30|
|38,492,927.46|
|23,174,286.19|
|26,764,583.93|
|894,789,245.88|

 (2)SignificantAdvances from CustomersAging overOneYear
||
|-|
|Endingbalance|
|24,974,635.75|
|15,357,854.41|
|40,332,490.16|

KonkaGroupCo.,Ltd. InterimReport2019
30.PayrollPayable
(1)List ofPayroll Payable
||||||
|-|-|-|-|-|
|Beginningbalance|Increase|Increasebymerger|Decrease|Decreasebylosingcontrollingright|
|375,284,193.12|609,982,040.88|-|772,315,202.61|-|
|1,222,374.59|58,521,529.93|-|53,960,054.44|-|
|-|6,739,415.57|-|6,499,670.26|-|
|-|-|-|-|-|
|376,506,567.71|675,242,986.38|-|832,774,927.31|-|

 (2)List ofShort-term Salary
||||||
|-|-|-|-|-|
|Beginningbalance|Increase|Increasebymerger|Decrease|Decreasebylosingcontrollingright|
|359,657,745.92|524,509,522.16|-|695,110,153.57|-|
|5,620,738.67|31,239,364.35|-|26,554,552.11|-|
|3,138,171.50|26,874,149.31|-|25,012,490.96|-|
|768,410.84|22,423,240.02|-|21,306,477.10|-|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Beginningbalance|Increase|Increasebymerger|Decrease|Decreasebylosingcontrollingright|
|160,343.82|2,321,254.48|-|1,955,714.10|-|
|2,209,416.84|2,129,654.81|-|1,750,299.76|-|
|545,498.50|13,372,934.62||12,709,474.05|-|
|5,581,101.82|6,014,093.75|-|5,180,035.61|-|
|-|-|-|-|-|
|-|-|-|-|-|
|740,936.71|7,971,976.69|-|7,748,496.31|-|
|375,284,193.12|609,982,040.88|-|772,315,202.61|-|

 (3)List ofDefined ContributionPlan
||||||
|-|-|-|-|-|
|Beginningbalance|Increase|Increasebymerger|Decrease|Decreasebylosingcontrollingright|
|1,147,799.70|56,897,467.97|-|52,418,177.12|-|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Beginningbalance|Increase|Increasebymerger|Decrease|Decreasebylosingcontrollingright|
|74,574.89|1,624,061.96|-|1,541,877.32|-|
|-|-|-|-|-|
|1,222,374.59|58,521,529.93|-|53,960,054.44|-|

 The Company, in line with the requirement, participate the endowment insurance, unemployment insurance scheme and so on, according to the scheme, the Company monthly pay to the scheme in line with requirements of local government, except the monthly payment, the Company no longershoulder thefurther payment obligation, therelevant expenseoccurred was recorded intocurrent profits and losses orrelated assets costs.
KonkaGroupCo.,Ltd. InterimReport2019 31.Taxes Payable
||
|-|
|Endingbalance|
|77,338,847.17|
|166,768,782.17|
|2,495,329.00|
|1,889,136.85|
|3,551,531.59|
|1,729,951.92|
|2,773,064.22|
|4,055,897.45|
|4,206,104.39|
|12,507,440.50|
|534,177.01|
|401,823.10|
|372,575.80|
|278,624,661.17|

 32.OtherPayables
||
|-|
|Endingbalance|
|99,998,242.67|
|240,794,540.80|
|2,026,237,321.94|
|2,367,030,105.41|

 (1)Interest Payable
||
|-|
|Endingbalance|
|99,998,242.67|
|99,998,242.67|

(2) Dividendpayable
KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|Endingbalance|
|240,794,540.80|
|240,794,540.80|

 (3)OtherPayables
Listed byNature ofAccount
||
|-|
|Endingbalance|
|977,559,070.21|
|316,444,017.28|
|380,180,000.00|
|225,052,021.81|
|78,849,048.66|
|34,596,993.19|
|13,556,170.79|
|2,026,237,321.94|

②OtherSignificant PayablesAging over OneYear
||
|-|
|Endingbalance|
|89,960,000.00|
|89,960,000.00|

 33.CurrentPortion ofNon-currentLiabilities
||
|-|
|Endingbalance|
|-|
|14,095,773.04|
|14,095,773.04|

 34.Long-term Borrowings
||
|-|
|Endingbalance|
|457,300,000.00|
|400,000,000.00|
|150,000,000.00|
|147,400,000.00|
|130,000,000.00|
|-|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|Endingbalance|
|1,284,700,000.00|

Note:①Sichuan Konka took the land use right with carrying value of RMB13,959,352.66 as the mortgage, and Communication Technology provided joint and several liability guarantee for the loan, and obtained the entrusted loan of RMB50 million from Sichuan Gangrong Investment and Development Group Co.,Ltd.
② The Subsidiary of Econ Technology, Rushan Yike Environmental Management Co., Ltd. obtained the borrowing of RMB290 million from Yantai Economic Development Zone Sub-branch of China Everbright Bank with the length of maturity from 29 December 2016 to 28 December 2026. The accounts receivable of government procurement of Rushan Finance Bureau was taken as the pledge during the 29 December 2016 to 28 December 2026. Econ Technology provided the joint liability guaranty at the same time. As of June 30, 2019, the actual borrowings was RMB14,740.00.
③ Konka Group took the land use right of Guangming Science and Technology Center with the carrying value of RMB38,694,416.25 as the pledge, and obtained the long-term borrowing ofRMB10 million form Shenzhen Branch ofGuangdong HuaxingBank Co., Ltd.④Anhui Konka took the plants with carrying value of RMB145,466,005.9 and land use right with carrying value of RMB45,651,427.59 as mortgage, and Konka Group provided the jointliabilityguaranty，and obtained the borrowing of RMB13 million fromMa’anshan Branch of ChinaMinsheng Bank Co., Ltd.
35.BondsPayable
(1)ListofBonds Payable
||
|-|
|Endingbalance|
|3,489,910,901.50|
|3,489,910,901.50|

 (2) Increase/Decrease of Bonds Payable (Excluding Other Financial Instrument Classifiedas FinancialLiabilities such asPreferred Sharesand Perpetual Bonds)
|||||
|-|-|-|-|
|Parvalue|Issuingdate|Duration|Issuingamount|
|1,000,000,000.00|14January2019|2+1years|996,500,000.00|
|1,500,000,000.00|14January2019|3years|1,494,750,000.00|
|500,000,000.00|3June2019|2+1years|498,250,000.00|
|500,000,000.00|3June2019|3years|498,250,000.00|

KonkaGroupCo.,Ltd. InterimReport2019 Total 3,500,000,000.00 —— —— 3,487,750,000.00 - (Continued)
||||||
|-|-|-|-|-|
|Thecurrentissue|Withdrawalofinterestbyparvalue|Amortizationofpremiumanddepreciation|RepaymentintheReportingPeriod||
|996,500,000.00|23,194,444.46|748,427.69|-||
|1,494,750,000.00|34,791,666.66|1,122,641.53|-||
|498,250,000.00|1,750,000.00|144,916.14|-||
|498,250,000.00|1,827,777.78|144,916.14|-||
|3,487,750,000.00|61,563,888.90|2,160,901.50|-|3,489,910,901.50|

 36.Long-term Payables
||
|-|
|Endingbalance|
|237,618,009.57|
|14,095,773.04|
|223,522,236.53|

 37.Long-term PayrollPayable
(1)List ofLong-term PayrollPayable
||
|-|
|Endingbalance|
|5,670,450.62|
|-|
|-|
|5,670,450.62|

 (2)Changes in Defined Benefit Plans
①
Obligationpresentvalueofdefinedbenefitplans:
||
|-|
|Reportingperiod|
|8,792,614.98|
|-|
|-|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|Reportingperiod|
|-|
|-|
|-|
|-|
|-|
|3,122,164.36|
|-|
|3,122,164.36|
|5,670,450.62|

② Notes to the influence of the content and related risk of defined benefit pension schemes tothefuture cash flows, timeand uncertainty of theCompany:
Due to upgrading and reconstruction of current work sites of the subsidiary, Telecommunication Technology, it is to adjust the labor relations according to Implementation Measures for Accompanying Employees in manufacturing system of Shenzhen Konka Telecommunication Technology Co., Ltd. On the premise to balance theCompany’andemployees’ benefits and voluntary selection, Telecommunication Technology provides early retirement plans for senior employees (employed before 31 December 1990 and signed non-fixed term labor contract with theCompany orCommunicationTechnology). The accumulative compensation paid to the internal early retirement pensions in future year is RMB34,931,714.55, the Company in line with Agreement of Internal Early Retirement Pension, in line with the standard of salary remaining the same, turnover rate of 0, the mortality rate of, fix standard of social security base payment remaining the same to test the present worth of defined benefit plans. The actual payment for the employee is influence by theactual turnoverrate, death rate and thechanges ofminimumcardinality ofsocial security.③ Notes to Actuarial Assumptions and Sensibility Analysis Result of Defined Benefit Pension Schemes
||
|-|
|Period-endofReportingPeriod|
|TreasurybondrateinSameperiod|
|0%|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|Overlegalemeritusage|
|0%|

38.Provisions
|||
|-|-|
|Beginningbalance|Endingbalance|
|21,566,306.86|-|
|206,591.51|1,597,591.51|
|21,772,898.37|1,597,591.51|

KonkaGroupCo.,Ltd. InterimReport2019
39.DeferredIncome
||||||
|-|-|-|-|-|
|Beginningbalance|Increase|Decrease|Decreasebylosingcontrollingright|Endingbalance|
|112,899,128.24|111,514,600.00|16,980,258.41|124,999.94|207,308,469.89|
|112,899,128.24|111,514,600.00|16,980,258.41|124,999.94|207,308,469.89|

 Ofwhich, itemsrelated to government subsidies:
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Amountofnewlysubsidy|Amountrecordedintonon-operatingincomeintheReportingPeriod|AmountrecordedintootherincomeintheReportingPeriod|Decreasebylosingcontrollingright|Endingbalance|
|399,999.84|-|-|100,000.02|-|299,999.82|
|320,940.00|-|-|80,235.00|-|240,705.00|
|1,800,000.00|-|-|300,000.00|-|1,500,000.00|
|23,220.00|-|-|5,805.00|-|17,415.00|
|999,999.84|-|-|100,000.02|-|899,999.82|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Amountofnewlysubsidy|Amountrecordedintonon-operatingincomeintheReportingPeriod|AmountrecordedintootherincomeintheReportingPeriod|Decreasebylosingcontrollingright|Endingbalance|
|1,260,000.00|-|-|210,000.00|-|1,050,000.00|
|4,797,149.98|-|-|479,715.00|-|4,317,434.98|
|149,316.57|-|-|28,900.02|-|120,416.55|
|1,575,000.00|-|-|150,000.00|-|1,425,000.00|
|676,666.56|-|-|145,000.02|-|531,666.54|
|139,683.23|-|-|28,900.02|-|110,783.21|
|1,880,000.00|-|-|240,000.00|-|1,640,000.00|
|166,666.80|-|-|49,999.98|-|116,666.82|
|492,638.20|-|-|123,159.48|-|369,478.72|
|208,083.17|-|-|113,500.02|-|94,583.15|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Amountofnewlysubsidy|Amountrecordedintonon-operatingincomeintheReportingPeriod|AmountrecordedintootherincomeintheReportingPeriod|Decreasebylosingcontrollingright|Endingbalance|
|177,650.00|-|-|96,900.00|-|80,750.00|
|435,083.21|-|-|113,500.02|-|321,583.19|
|149,999.80|-|-|25,000.02|-|124,999.78|
|300,000.20|-|-|49,999.98|-|250,000.22|
|3,003,000.00|-|-|409,500.00|-|2,593,500.00|
|304,930.89|-|-|79,547.22|-|225,383.67|
|221,250.00|-|-|22,500.00|-|198,750.00|
|47,200.00|-|-|4,800.00|-|42,400.00|
|59,000.00|-|-|6,000.00|-|53,000.00|
|-|900,000.00|-|30,000.00|-|870,000.00|
|2,013,583.52|-|-|373,899.96|-|1,639,683.56|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Amountofnewlysubsidy|Amountrecordedintonon-operatingincomeintheReportingPeriod|AmountrecordedintootherincomeintheReportingPeriod|Decreasebylosingcontrollingright|Endingbalance|
|1,315,187.04|-|-|240,000.00|-|1,075,187.04|
|2,219,077.41|-|-|267,895.02|-|1,951,182.39|
|26,959.57|-|-|4,000.08|-|22,959.49|
|53,249.88|||4,500.00||48,749.88|
|59,133.78|-|-|2,119.98|-|57,013.80|
|150,000.00|-|-|-|-|150,000.00|
|168,981.80|200,000.00|-|14,080.46|-|354,901.34|
|-|394,700.00|-|47,196.08|-|347,503.92|
|149,999.96|-|-|25,000.02|124,999.94|-|
|8,500,000.06|-|-|999,999.96|-|7,500,000.10|
|-|10,000,000.00|-|4,999,999.99|-|5,000,000.01|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Amountofnewlysubsidy|Amountrecordedintonon-operatingincomeintheReportingPeriod|AmountrecordedintootherincomeintheReportingPeriod|Decreasebylosingcontrollingright|Endingbalance|
|-|79,900.00|-|1,119.54|-|78,780.46|
|1,000,000.00|-|-|-|-|1,000,000.00|
|1,750,000.00|-|-|-|-|1,750,000.00|
|200,000.00|-60,000.00|-|-|-|140,000.00|
|2,600,000.00|-|-|-|-|2,600,000.00|
|320,000.00|-|-|-|-|320,000.00|
|1,400,000.00|-|-|-|-|1,400,000.00|
|750,000.17|-|-|499,999.98|-|250,000.19|
|448,000.00|||96,000.00||352,000.00|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Amountofnewlysubsidy|Amountrecordedintonon-operatingincomeintheReportingPeriod|AmountrecordedintootherincomeintheReportingPeriod|Decreasebylosingcontrollingright|Endingbalance|
|16,666.47|||16,666.47||-|
|560,000.09|||139,999.98||420,000.11|
|2,435,333.22|||645,333.57||1,789,999.65|
|1,577,067.83|||525,689.34||1,051,378.49|
|1,300,000.00|||||1,300,000.00|
|80,000.00|||||80,000.00|
|1,492,270.06|||229,579.98||1,262,690.08|
|666,666.80|||199,999.98||466,666.82|
|5,780,097.10|||990,873.78||4,789,223.32|
|1,000,000.00|||||1,000,000.00|
|15,354,500.00|||2,247,000.00||13,107,500.00|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Amountofnewlysubsidy|Amountrecordedintonon-operatingincomeintheReportingPeriod|AmountrecordedintootherincomeintheReportingPeriod|Decreasebylosingcontrollingright|Endingbalance|
|1,500,000.00|||||1,500,000.00|
|1,184,166.75|||202,999.98||981,166.77|
|3,500,000.06|||499,999.98||3,000,000.08|
|390,000.00|||156,000.00||234,000.00|
|2,100,000.00|||||2,100,000.00|
|1,420,000.00|||||1,420,000.00|
|1,375,000.00|||150,000.00||1,225,000.00|
|3,000,000.00|||||3,000,000.00|
|3,620,000.00|||361,999.98||3,258,000.02|
|4,500,000.00|||||4,500,000.00|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Amountofnewlysubsidy|Amountrecordedintonon-operatingincomeintheReportingPeriod|AmountrecordedintootherincomeintheReportingPeriod|Decreasebylosingcontrollingright|Endingbalance|
||100,000,000.00||||100,000,000.00|
|1,960,000.00|||||1,960,000.00|
|755,708.38|||45,342.48||710,365.90|
|13,300,000.00|||||13,300,000.00|
|1,320,000.00|||||1,320,000.00|
|112,899,128.24|111,514,600.00|-|16,980,258.41|124,999.94|207,308,469.89|

 40.ShareCapital
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Increase/decrease(+/-)|||||
||Newsharesissued|Bonusshares|Bonusissuefromprofit|Other|Subtotal|
|2,407,945,408.00|-|-|-|-|-|

 41.Capital Reserves
||||
|-|-|-|
|Beginningbalance|Increase|Decrease|
|7,393,378.55|-|-|
|200,963,245.66|29,405,337.77|-|

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|Beginningbalance|Increase|Decrease|
|208,356,624.21|29,405,337.77|-|

 Note: Other capital recerves increase in the Reporting Period was mainly caused by the increase of RMB29,405,337.77 of non-controlling interests.
42.OtherComprehensiveIncome
|||||||
|-|-|-|-|-|-|
|Beginningbalance|ReportingPeriod|||||
||IncomebeforetaxationintheCurrentPeriod|Less:RecordedinothercomprehensiveincomeinpriorperiodandtransferredinprofitorlossintheCurrent Period|Less:Incometaxexpense|AttributabletoownersoftheCompanyastheparentaftertax|Attributabletonon-controllinginterestsaftertax|
|||||-4,800,000.00|-|
|||||-4,800,000.00||

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance|ReportingPeriod|||||
||IncomebeforetaxationintheCurrentPeriod|Less:RecordedinothercomprehensiveincomeinpriorperiodandtransferredinprofitorlossintheCurrent Period|Less:Incometaxexpense|AttributabletoownersoftheCompanyastheparentaftertax|Attributabletonon-controllinginterestsaftertax|
|-10,538,219.08|1,691,887.67|||1,140,113.31|551,774.36|
|-2,397,350.96||||||

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance|ReportingPeriod|||||
||IncomebeforetaxationintheCurrentPeriod|Less:RecordedinothercomprehensiveincomeinpriorperiodandtransferredinprofitorlossintheCurrent Period|Less:Incometaxexpense|AttributabletoownersoftheCompanyastheparentaftertax|Attributabletonon-controllinginterestsaftertax|
|-8,140,868.12|1,691,887.67|||1,140,113.31|551,774.36|
|-10,538,219.08|1,691,887.67|-|-|-3,659,886.69|551,774.36|

 43.Specialreserve
||||
|-|-|-|
|Beginningbalance|Increase|Decrease|
|-|97,613.57|25,876.49|
|-|97,613.57|25,876.49|

 44.SurplusReserves
||||
|-|-|-|
|Beginningbalance|Increase|Decrease|
|973,502,519.62|||
|254,062,265.57|||
|1,227,564,785.19|||

 Note: Based on the regulations of the Corporation Law and Constitution, the Company should withdraw10% of the statutory surplus reserves
KonkaGroupCo.,Ltd. InterimReport2019
according to the net profits. If the accumulated amount of the statutory surplus reserves exceeded the50% of the registered capital, the Company could no more withdraw. The Company can withdraw the discretional surplus reserves after withdrawing the statutory surplus reserves. The discretional surplus reserves can beused to make upfortheprevious losses orto increase share capital onceapproved.
KonkaGroupCo.,Ltd. InterimReport2019 45.Retained Earnings
||
|-|
|ReportingPeriod|
|4,271,408,192.21|
|-2,884,254.62|
|4,268,523,937.59|
|352,767,020.73|
|-|
|-|
|240,794,540.80|
|4,380,496,417.52|

 46.Operating RevenueandCost ofSales
(1)Operating Revenue and Cost ofSales
||||
|-|-|-|
|ReportingPeriod|||
|Operatingrevenue|Costofsales|Operatingrevenue|
|25,704,875,805.21|24,429,634,915.92|16,803,504,680.73|
|331,567,008.63|244,407,455.21|821,910,089.09|
|26,036,442,813.84|24,674,042,371.13|17,625,414,769.82|

 (2)Main Operations (Classified byproduct)
||||
|-|-|-|
|ReportingPeriod|||
|Operatingrevenue|Costofsales|Operatingrevenue|
|3,844,847,424.42|3,596,446,860.11|4,963,088,596.70|
|205,434,258.43|201,988,459.74|203,769,975.49|

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|ReportingPeriod|||
|Operatingrevenue|Costofsales|Operatingrevenue|
|1,637,709,425.79|1,345,643,531.66|1,084,381,984.51|
|4,863,145,443.76|4,524,853,380.07|77,951,411.92|
|14,549,000,969.03|14,359,602,494.69|10,008,880,630.62|
|604,738,283.78|401,100,189.64|465,432,081.49|
|25,704,875,805.21|24,429,634,915.92|16,803,504,680.73|

 (3)Main Operations (Classified byarea)
||||
|-|-|-|
|ReportingPeriod|||
|Operatingrevenue|Costofsales|Operatingrevenue|
|9,430,243,937.78|8,596,129,999.73|4,672,082,285.24|
|16,274,631,867.43|15,833,504,916.19|12,131,422,395.49|
|25,704,875,805.21|24,429,634,915.92|16,803,504,680.73|

 (4)Other Operations (Classified byproduct)
||||
|-|-|-|
|ReportingPeriod|||
|Operatingrevenue|Costofsales|Operatingrevenue|
|155,282,907.18|160,515,894.69|461,460,767.54|
|12,533,794.41|8,001,769.58|23,647,020.02|
|7,864,837.52|1,201,540.79|5,528,818.17|
|50,641,453.21|3,277,652.49|55,541,441.82|
|105,244,016.31|71,410,597.66|275,732,041.54|

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|ReportingPeriod|||
|Operatingrevenue|Costofsales|Operatingrevenue|
|331,567,008.63|244,407,455.21|821,910,089.09|

 (5)Operating Revenue fromTop 5Customers
||
|-|
|Totaloperatingrevenuefromtop5customers|
|8,057,091,490.94|
|6,013,731,094.97|

47.Taxes andSurtaxes
||
|-|
|ReportingPeriod|
|7,641,459.23|
|7,399,945.90|
|4,863,382.63|
|9,986,924.23|
|3,628,856.00|
|2,800,185.32|
|105,188.20|
|19,798.20|
|943,352.56|
|37,389,092.27|

 Note: Refer to Note VTaxation for details of the measurement standards of various taxes and surtaxes.
48.Selling Expense
||
|-|
|ReportingPeriod|
|153,382,205.33|
|193,996,682.54|
|276,681,334.75|
|179,648,240.35|
|122,339,314.15|
|333.90|
|18,079,398.08|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|ReportingPeriod|
|13,239,462.76|
|15,818,675.70|
|8,951,109.32|
|85,809,157.48|
|1,067,945,914.36|

49.Administrative Expense
||
|-|
|ReportingPeriod|
|162,542,644.17|
|43,538,977.71|
|24,651,061.96|
|10,417,451.26|
|15,993,217.00|
|6,025,162.39|
|9,030,690.19|
|6,809,831.29|
|68,915,606.46|
|347,924,642.43|

50.R&DExpense
||
|-|
|ReportingPeriod|
|78,671,163.98|
|22,136,520.66|
|29,590,093.60|
|5,405,384.18|
|2,119,728.64|
|5,176,565.13|
|2,117,684.38|
|1,015,830.83|
|10,977,367.54|
|157,210,338.94|

51.Finance Costs
KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|ReportingPeriod|
|529,683,836.52|
|118,673,531.77|
|-26,237,313.27|
|29,487,471.55|
|414,260,463.03|

 52.CreditImpairmentLoss
||
|-|
|ReportingPeriod|
|-41,432,285.18|
|-8,183,816.17|
|139,877.59-49,476,223.76|

53.Asset Impairment Loss
||
|-|
|ReportingPeriod|
|——|
|-11,717,767.29|
|-11,717,767.29|

 54.OtherIncome
|||
|-|-|
|ReportingPeriod|Sameperiodoflastyear|
|53,667,833.01|18,563,333.33|
|23,063,806.91|34,848,961.96|
|16,980,258.41|12,105,088.11|
|246,506,970.00|48,012,477.79|
|66,369.00|132,738.00|
|3,186,200.00|-|
|326,832.56|3,229,884.31|
|86,701.47|6,133,800.00|
|343,884,971.36|123,026,283.50|

55.InvestmentIncome
KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|ReportingPeriod|
|8,541,274.56|
|274,322,718.19|
|——|
|——|
|——|
|140,558,288.28|
|-10,285,883.02|
|34,766,808.03|
|111,257,821.88|
|559,161,027.92|

56.Gain onChanges inFairValue
||
|-|
|ReportingPeriod|
|——|
|——|
|-3,005,381.67|
|-3,005,381.67|

 57.AssetDisposal Income
|||
|-|-|
|ReportingPeriod|Sameperiodoflastyear|
|199,561,596.99|89,814.27|
|94,144,243.65|63,632,291.11|

KonkaGroupCo.,Ltd. InterimReport2019
|||
|-|-|
|ReportingPeriod|Sameperiodoflastyear|
|293,705,840.64|63,722,105.38|

 58.Non-operating Income
|||
|-|-|
|ReportingPeriod|Sameperiodoflastyear|
|193,548.46|94,061.30|
|-|11,461,703.35|
|10,431,951.61|870,715.65|
|11,643,942.02|14,791,012.67|
|22,269,442.09|27,217,492.97|

 Government Subsidies Recorded intoCurrent Profit orLoss:
|||||||
|-|-|-|-|-|-|
|ReportingPeriod|||Sameperiodoflastyear|||
|Recordedintonon-operatingincome|Recordedintootherincome|Offsetcosts|Recordedintonon-operatingincome|Recordedintootherincome|Offsetcosts|
|-|-|-|10,185,622.66|-|-|
|-|-|-|1,276,080.69|-|-|
|-|-|-|11,461,703.35|-|-|

59.Non-operating Expense
|||
|-|-|
|ReportingPeriod|Sameperiodoflastyear|
|660,874.41|1,671,547.63|
|4,603.40|3,500.00|
|675,833.69|20,000.00|
|2,128,430.01|4,256,701.94|

KonkaGroupCo.,Ltd. InterimReport2019
|||
|-|-|
|ReportingPeriod|Sameperiodoflastyear|
|3,469,741.51|5,951,749.57|

 60.IncomeTaxExpense
(1)Lists ofIncomeTax Expense
||
|-|
|ReportingPeriod|
|216,231,934.45|
|-173,118,956.35|
|43,112,978.10|

 (2)AdjustmentProcess ofAccounting Profit and IncomeTax Expense
Item ReportingPeriod
Profitbeforetaxation 489,022,159.46 Currentincometaxexpenseaccountedatstatutory/applicabletaxrate 122,255,539.87 Influenceofapplyingdifferenttaxratesbysubsidiaries -51,887,118.22 Influenceofincometaxbeforeadjustment -3,847,489.30 Influenceofnon-taxableincome 9,582,807.30 Influenceofnotdeductablecosts,expensesandlosses 7,747,424.23 Influenceofdeductablelossofunrecognizeddeferredincometaxassetsinpriorperiod -17,256,404.67 Influenceofdeductabletemporarydifferenceordeductablelossesofunrecognized 8,385,318.90 deferredincometaxintheReportingPeriod
—— Changesinthebalanceofdeferredincometaxassets/liabilitiesinpreviousperioddue
toadjustmentoftaxrate
-64,668,684.92 Other
Incometaxexpense 10,311,393.19 61.OtherComprehensiveIncome
Referto NoteVI-42fordetails.
62.CashFlowStatement
(1)Cash Generated from Other OperatingActivities
||
|-|
|ReportingPeriod|
|663,814,079.96|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|ReportingPeriod|
|47,127,011.48|
|411,764,189.92|
|240,170,401.69|
|11,849,162.63|
|7,604,938.22|
|6,769,448.83|
|13,655,189.62|
|-|
|2,010,832.06|
|744,030,565.64|
|2,148,795,820.05|

 (2)Cash Used inOther OperatingActivities
||
|-|
|ReportingPeriod|
|380,423,237.70|
|731,676,310.00|
|8,037,121.64|
|283,418,660.42|
|15,670,997.69|
|16,648,496.25|
|558,404.69|
|41,154.49|
|555,462,001.38|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|ReportingPeriod|
|1,991,936,384.26|

 (3)Cash Generated from Other InvestingActivities
||
|-|
|ReportingPeriod|
|653,954,166.67|
|742,912,711.75|
|1,396,866,878.42|

 (4)Cash Used inOther InvestingActivities
||
|-|
|ReportingPeriod|
|700,000,000.00|
|33,420.00|
|700,033,420.00|

 (5)Cash Generated from Other FinancingActivities
||
|-|
|ReportingPeriod|
|200,000,000.00|
|150,346,627.50|
|350,346,627.50|

 (6)Cash Used inOther FinancingActivities
||
|-|
|ReportingPeriod|
|67,293,304.13|
|167,576,689.17|
|30,011,935.42|
|264,881,928.72|

 63.Supplemental Information forCash FlowStatement
(1)Supplemental Information forCash Flow Statement
||
|-|
|ReportingPeriod|
|478,710,766.27|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|ReportingPeriod|
|61,193,991.05|
|174,167,944.26|
|12,518,556.49|
|43,303,200.03|
|-293,705,840.64|
|467,325.95|
|3,005,381.67|
|442,704,098.64|
|-559,161,027.92|
|-176,759,673.67|
|3,492,398.43|
|-525,393,810.42|
|-2,059,798,271.86|
|369,279,048.36|
|-16,980,258.41|
|-2,042,956,171.77|
|4,701,245,534.53|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|ReportingPeriod|
|3,434,149,481.72|
|1,267,096,052.81|

 (2)Net Cash Receive from Disposal ofSubsidiaries
Item Amount
CashorcashequivalentsreceivedintheReportingPeriodfromdisposalofsubsidiariesinthe 101,020,500.00 CurrentPeriod
Ofwhich:ChuzhouKonkaTID 63,520,500.00 KonkaE-display 37,500,000.00 Less:cashandcashequivalentsheldbysubsidiariesonthedateoflosingcontrolpower 68,345,326.75 Ofwhich:ChuzhouKonkaTID 35,782,809.20 KonkaE-display 32,562,517.55 Netcashreceivedfromdisposalofsubsidiaries 32,675,173.25 (3)Cash and Cash Equivalents
||
|-|
|Endingbalance|
|4,701,245,534.53|
|343,490.38|
|4,700,902,044.15|
|4,701,245,534.53|

 64.Assets with Restricted OwnershiporRightto Use
||
|-|
|Endingcarryingvalue(RMB’0,000)|
|96,902.16|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|Endingcarryingvalue(RMB’0,000)|
|118,688.30|
|36,202.64|
|13,805.57|
|34,941.65|
|300,540.32|

65.ForeignCurrency Monetary Items
(1)Foreign Currency Monetary Items
|||
|-|-|
|Endingforeigncurrencybalance|Exchangerate|
|78,554,119.28|6.87470|
|99,161.51|7.81700|
|12,165,085.98|0.87966|
|184,788,743.39|6.87470|
|3,082,190.84|0.87966|
|49,764.00|4.81560|
|26,115,881.89|6.87470|
|7,487,218.79|0.87966|

KonkaGroupCo.,Ltd. InterimReport2019
|||
|-|-|
|Endingforeigncurrencybalance|Exchangerate|
|118,160,661.74|6.87470|
|1,531,358.04|0.87966|
|30,933,727.30|0.87966|
|139,691,704.64|6.87470|
|803,078.36|6.87470|

 (2)Notes toOverseas Entities
The significant overseas entities include Hong Kong Konka, Konka Electrical Appliances International Trading, Chain Kingdom Memory Technologies Co., Ltd., Kangjietong and Jiali International. The main overseas operating place is Hong Kong. TheCompany’s recording currency is HKD sincethe main currency in circulation inHong Kong isHKD. 66.Arbitrage
Refer to relevant contents in items notes of in 2. FinancialAssets at Fair Value through Profit orLoss in NoteVI.
67.Government Subsidy
(1)Basic Information onGovernment Subsidy
|||
|-|-|
|Amount|Listeditems|
|10,000,000.00|Deferredincome/Otherincome|
|53,667,833.01|Otherincome|
|23,063,806.91|Otherincome|
|66,369.00|Otherincome|
|326,832.56|Otherincome|
|3,186,200.00|Otherincome|
|86,701.47|Otherincome|

KonkaGroupCo.,Ltd. InterimReport2019
|||
|-|-|
|Amount|Listeditems|
|346,506,970.00|Otherincome|
|900,000.00|Deferredincome|
|200,000.00|Deferredincome/Otherincome|
|394,700.00|Deferredincome/Otherincome|
|79,900.00|Deferredincome/Otherincome|
|438,479,312.95||

 (2)Return ofGovernment Subsidy
Nosuch cases in theReporting Period.
VII. Changesof ConsolidationScope
1.Disposalofsubsidiary
SingleDisposal of Investment to Subsidiary thatLosing ControlPower
||||||
|-|-|-|-|-|
|Theequitydisposalprice(RMB’0,000)|Equitydisposalproportion(%)|Methodofequitydisposal|Timeoflosingcontrol|Recognitionbasisforthetimeoflosingcontrolpower|
|3,750.00|15|Transfer|2019-6-21|Transferofequity,operationandfinancialcontrollingpower|
|6,352.05|51|Transfer|2019-6-28|Transferofequity,operationandfinancialcontrollingpower|

(Continued)
KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Residualequityproportiononthedateoflosingcontrolpower(%)|Carryingvalueofresidualequityonthedateoflosingcontrolpower(RMB’0,000)|Fairvalueofresidualequityonthedateoflosingcontrolpower(RMB’0,000)|Gainsorlossesfromre-measurementofresidualequityatfairvalue(RMB’0,000)|Recognitionmethodandmainassumption offairvalueofresidualequityonthedateoflosingcontrolpower|
|45.00|1,692.67|11,250.00|9,557.33|Markettradingprice|
|49.00|1,727.04|6,102.95|4,375.91|Markettradingprice|

2.Changesin CombinationScopeforOtherReasons
Newly-established Subsidiaries oftheCompany from Jan.-June2019
||||
|-|-|-|
|Capitalofregistration|Holdingpercentage(%)|Timeandplaceofgainingcontrolpower|
|10,000,000.00|51.00|2019-1-3|
|10,000,000.00|100.00|2019-1-24|
|200,000,000.00|100.00|2019-2-22|
|10,000,000.00|100.00|2019-3-5|
|20,000,000.00|51.00|2019-3-12|
|50,000,000.00|51.00|2019-4-1|
|56,361,600.00|24.14|2019-4-11|
|122,500,000.00|40.55|2019-5-10|
|150,000,000.00|32.97|2019-5-10|
||51.00|2019-5-14|

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|Capitalofregistration|Holdingpercentage(%)|Timeandplaceofgainingcontrolpower|
|10,000,000.00|||
|100,000,000.00|45.44|2019-6-3|
|90,000,000.00|80.00|2019-6-4|
|120,000,000.00|100.00|2019-6-6|
|100,000,000.00|100.00|2019-6-28|

 VIII. Equity inOtherEntities
1.Equity inSubsidiary
(1)Subsidiaries
||||||
|-|-|-|-|-|
|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||
||||Directly|Indirectly|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Other organizationand managementservice|51.00|-|
|Yantai,Shandong|Yantai,Shandong|Other professionalconsultancy andinvestigation|-|51.00|
|Chengdu,Sichuan|Chengdu,Sichuan|Commercialservice|-|51.00|
|Chengdu,Sichuan|Chengdu,Sichuan|Commercialservice|-|51.00|
|Guiyang,Guizhou|Guiyang,Guizhou|Headquartersmanagement|-|51.00|
|Nanjing,Jiangsu|Nanjing,Jiangsu|Entrepreneurial spaceservice|-|40.80|
|Guiyang,Guizhou|Guiyang,Guizhou|Other Commercialservice not listedclearly|-|51.00|
|Yibin,Sichuan|Yibin,Sichuan|Commercialservice|-|51.00|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||
||||Directly|Indirectly|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Other IT serviceindustry not listedclearly|-|26.01|
|Chuzhou,Anhui|Chuzhou,Anhui|Manufacturingindustry|78.00|-|
|Chuzhou,Anhui|Chuzhou,Anhui|Wholesaleindustry|-|78.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Insurance agents(non-bankfinance)|100.00|-|
|Tianjin|Tianjin|Advertisement|-|70.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Retailindustry|51.00|-|
|Hong Kong,China|HongKong,China|Retailindustry|-|51.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Softwaredevelopment|100.00|-|
|Dongguan,Guangdong|Dongguan,Guangdong|Manufacturingindustry|75.00|25.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Manufacturingindustry|75.00|25.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Manufacturingindustry|75.00|25.00|
|Mudanjiang,Heilongjiang|Mudanjiang,Heilongjiang|Manufacturingindustry|60.00|-|
|Frankfurt,Germany|Frankfurt,Germany|InternationalTrading|100.00|-|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Commerce|81.00|-|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Manufacturingindustry,commerce|100.00|-|
|Haikou,Hainan|Haikou,Hainan|Commercialservice|-|51.00|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||
||||Directly|Indirectly|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Commerce|51.00|-|
|Yibin,Sichuan|Yibin,Sichuan|Manufacturingindustry|-|51.00|
|Chuzhou,Anhui|Chuzhou,Anhui|Manufacturingindustry|100.00|-|
|Chuzhou,Anhui|Chuzhou,Anhui|Manufacturingindustry|-|51.00|
|Xinxiang,Henan|Xinxiang,Henan|Manufacturingindustry|-|51.00|
|Xinxiang,Henan|Xinxiang,Henan|Manufacturingindustry|-|51.00|
|Xinxiang,Henan|Xinxiang,Henan|Manufacturingindustry|-|51.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Retailindustry|51.00|-|
|Hong Kong,China|HongKong,China|Retailindustry|-|51.00|
|Haikou,Hainan|Haikou,Hainan|Network platformdevelopment|60.00|-|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Network platformdevelopment|-|60.00|
|Dongguan,Guangdong|Dongguan,Guangdong|Manufacturingindustry|75.00|25.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Information service|95.78|-|
|Beijing|Beijing|Sale of homeappliance|100.00|-|
|Tianjin PilotFree TradeZone|TianjinPilot FreeTradeZone|Leasingindustry|-|100.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Investmentholding|75.00|25.00|
|Boluo,Guangdong|Boluo,Guangdong|Manufacturingindustry|-|100.00|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||
||||Directly|Indirectly|
|Xiamen,Fujian|Xiamen,Fujian|Commerce|-|69.23|
|Boluo,Guangdong|Boluo,Guangdong|Manufacturingindustry|-|100.00|
|Hong Kong,China|HongKong,China|InternationalTrading|100.00|-|
|Hong Kong,China|HongKong,China|Investmentholding|-|100.00|
|Hong Kong,China|HongKong,China|InternationalTrading|-|51.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Wholesaleindustry|-|51.00|
|Hong Kong,China|HongKong,China|InternationalTrading|-|61.00|
|Hong Kong,China|HongKong,China|Serviceindustry|-|51.00|
|Hong Kong,China|HongKong,China|InternationalTrading|-|100.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Capital marketsservice|100.00|-|
|Yibin,Sichuan|Yibin,Sichuan|Development andmanagement ofindustrialpark|-|100.00|
|Chengdu,Sichuan|Chengdu,Sichuan|Realestateindustry|-|51.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Capital marketsservice|-|100.00|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||
||||Directly|Indirectly|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Investment inindustry, commercialinformationconsultancy andinvestmentadvisor|-|51.00|
|Haikou,Hainan|Haikou,Hainan|Municipal road,engineering andbuildings|-|51.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Commercialservice|-|51.00|
|Yibin,Sichuan|Yibin,Sichuan|Serviceindustry|51.00|-|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Manufacturingindustry|100.00|-|
|Zhongshan,Guangdong|Zhongshan,Guangdong|Manufacturingindustry|-|51.00|
|Shanghai|Shanghai|Commerce|-|51.00|
|Nanjing,Jiangsu|Nanjing,Jiangsu|Wholesaleindustry|-|100.00|
|Chuzhou,Anhui|Chuzhou,Anhui|e-commerce|-|100.00|
|Yantai,Shandong|Yantai,Shandong|Environmentaltechnology serviceindustry|51.00|-|
|Beijing|Beijing|Environmentaltechnology serviceindustry|-|51.00|
|Shanghai|Shanghai|Environmentaltechnology serviceindustry|-|51.00|
|Binzhou,Shandong|Binzhou,Shandong|Environmentaltechnology serviceindustry|-|51.00|
|Yantai,Shandong|Yantai,Shandong|Environmentaltechnology serviceindustry|-|30.60|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||
||||Directly|Indirectly|
|Yantai,Shandong|Yantai,Shandong|Environmentaltechnology serviceindustry|-|27.54|
|Yantai,Shandong|Yantai,Shandong|Environmentaltechnology serviceindustry|-|30.60|
|Yantai,Shandong|Yantai,Shandong|Environmentaltechnology serviceindustry|-|30.60|
|Yantai,Shandong|Yantai,Shandong|Environmentaltechnology serviceindustry|-|30.60|
|Chengdu,Sichuan|Chengdu,Sichuan|Environmentaltechnology serviceindustry|-|51.00|
|Qingdao,Shandong|Qingdao,Shandong|Environmentaltechnology serviceindustry|-|51.00|
|Yantai,Shandong|Yantai,Shandong|Environmentaltechnology serviceindustry|-|51.00|
|Weihai,Shandong|Weihai,Shandong|Environmentaltechnology serviceindustry|-|44.37|
|Binzhou,Shandong|Binzhou,Shandong|Environmentaltechnology serviceindustry|-|35.70|
|Binzhou,Shandong|Binzhou,Shandong|Environmentaltechnology serviceindustry|-|24.99|
|Yantai,Shandong|Yantai,Shandong|Environmentaltechnology serviceindustry|-|35.70|
|Yantai,Shandong|Yantai,Shandong|Environmentaltechnology serviceindustry|-|26.01|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||
||||Directly|Indirectly|
|Dandong,Liaoning|Dandong,Liaoning|Environmentaltechnology serviceindustry|-|50.63|
|Chengdu,Sichuan|Chengdu,Sichuan|Environmentaltechnology serviceindustry|-|51.00|
|Jiuquan,Gansu|Jiuquan,Gansu|Environmentaltechnology serviceindustry|-|39.78|
|Suining,Sichuan|Suining,Sichuan|Environmentaltechnology serviceindustry|-|40.75|
|Weifang,Shandong|Weifang,Shandong|Environmentaltechnology serviceindustry|-|27.96|
|Dalian,Liaoning|Dalian,Liaoning|Processing ofrenewableresources|51.00|-|
|Shanghai|Shanghai|Realestateindustry|100.00|-|
|Chuzhou,Anhui|Chuzhou,Anhui|Realestateindustry|-|100.00|
|Yantai,Shandong|Yantai,Shandong|Realestateindustry|-|89.71|
|Yantai,Shandong|Yantai,Shandong|Realestateindustry|-|62.80|
|Yantai,Shandong|Yantai,Shandong|Realestateindustry|-|51.00|
|Jiujiang,Jiangxi|Jiujiang,Jiangxi|Production,manufacturing andprocessing|51.00|-|
|Nanchang,Jiangxi|Nanchang,Jiangxi|Production,manufacturing andprocessing|-|51.00|
|Jiujiang,Jiangxi|Jiujiang,Jiangxi|Production,manufacturing andprocessing|-|51.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Semi-conductor|100.00|-|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||
||||Directly|Indirectly|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Commerce|-|51.00|
|Hefei,Anhui|Hefei,Anhui|Design of integratedcircuit|-|51.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Commercialservice|100.00|-|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Commercialservice|51.00|-|
|Foshan,Guangdong|Foshan,Guangdong|Wholesale and retailindustry|51.00|-|
|Suining,Sichuan|Suining,Sichuan|Development andmanagement ofindustrialpark|100.00|-|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Commercialservice|-|51.00|
|Hefei,Anhui|Hefei,Anhui|Wholesale and retailindustry|-|51.00|
|Lankao,Henan|Lankao,Henan|Technologypromotion andapplicationservice|-|51.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Wholesale and retailindustry|-|100.00|
|Suining,Sichuan|Suining,Sichuan|Commercialservice|100.00|-|
|Chongqing|Chongqing|Software andinformation serviceindustry|-|100.00|
|Yibin,Sichuan|Yibin,Sichuan|Software andinformation serviceindustry|-|51.00|
|Yantai,Shandong|Yantai,Shandong|Environmentalprotection andenvironmentmanagement|-|24.14|
|Fuyang,Anhui|Fuyang,Anhui|Environmentaltechnology serviceindustry|-|40.55|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||
||||Directly|Indirectly|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Commercialservice|-|51.00|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Capital marketservice|-|80.00|
|Weifang,Shandong|Weifang,Shandong|Commercialservice|-|32.98|
|Pingdingshan,Henan|Pingdingshan,Henan|Environmentalprotection andenvironmentmanagement|-|45.44|
|Shenzhen,Guangdong|Shenzhen,Guangdong|Software andinformation serviceindustry|-|100.00|
|Dongguan,Guangdong|Dongguan,Guangdong|Commercialservice|100.00|-|
|Hong Kong,China|HongKong,China|Manufacturingindustry|-|100.00|

(2)Significant Non-wholly-owned Subsidiary
||||
|-|-|-|
|Shareholdingproportionofnon-controllinginterests(%)|Theprofitorlossattributabletothenon-controllinginterests|Declaringdividendsdistributedtonon-controllinginterests|
|49.00|43,900,738.09|-|
|49.00|7,349,838.13|-|

 (3)The Main Financial Information ofSignificant NotWholly-owned Subsidiary
Endingbalance
||||||
|-|-|-|-|-|
|Currentassets|Non-currentassets|Totalassets|Currentliabilities|Non-currentliability|
|2,052,738,106.37|11,814,608.94|2,064,552,715.31|1,744,258,130.73|-|
|666,718,434.81|144,458.44|666,862,893.25|649,820,094.38|-|

(Continued)
Name Beginningbalance
KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Currentassets|Non-currentassets|Totalassets|Currentliabilities|Non-currentliability|
|787,177,009.78|7,754,884.48|794,931,894.26|564,230,652.73|-|
|552,691,289.36|190,605.71|552,881,895.07|551,093,788.93|-|

||||
|-|-|-|
|ReportingPeriod|||
|Operatingrevenue|Netprofit|Totalcomprehensiveincome|
|3,907,011,852.57|89,593,343.05|89,593,343.05|
|4,295,624,063.46|14,999,669.64|15,282,794.68|

 (Continued)
||||
|-|-|-|
|Sameperiodoflastyear|||
|Operatingrevenue|Netprofit|Totalcomprehensiveincome|
|-|-85,624.00|-85,624.00|
|-|-208,307.50|-184,703.75|

 2. The Transaction of the Company with ItsOwner’s Equity Share Changed but Still Controllingthe Subsidiary
(1)Note totheOwner’s Equity ShareChanged in Subsidiary
On 10 April 2019, E2info non-controlling interests increased the the investment to E2info and other shareholders renounced pre-emption rights of corresponding newly-increased registered capital. After completing the above increase, theCompany’s shareholding ratio of E2info is95.7766%, and it still be controlled by the Company and is still included in the scopeof consolidation.
(2) TheTransaction’s Influence on the Equity of Non-controlling Interests and the Owner's EquityAttributabletotheCompany as theParent
Item E2info
Disposalconsideration
-—cash
31,666,666.66—fairvalueofnon-cashassets
-
Totaldisposalconsideration
31,666,666.66
Less:Shareofnetassetsaccountedbypercentageofstockrightsdisposed
2,261,328.89
KonkaGroupCo.,Ltd. InterimReport2019 Item E2info
Difference
29,405,337.77 Ofwhich:Adjustmentofcapitalreserves
29,405,337.77 Adjustmentofsurplusreserve
- Adjustmentofretainedearnings
- 3.Equity inAssociated Enterprises
(1)SignificantAssociated Enterprises
||||||
|-|-|-|-|-|
|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||
||||Directly|Indirectly|
|Dongguan|Dongguan|Manufacturing industry incomputer,communicationandotherelectronicequipment|21.95|-|
|Wuhan|Wuhan|Environmental protection andenvironmentmanagement|20.02|-|
|Shenzhen|Shenzhen|Manufacturing industry incomputer,communicationandotherelectronicequipment|20.00|-|
|Kunshan|Kunshan|Manufacturing industry incomputer,communicationandotherelectronicequipment|49.00|-|

(2)Main Financial Information ofSignificantAssociated Enterprise
Endingbalance/ReportingPeriod
||||
|-|-|-|
|ChutianDragonCo.,Ltd.|WuhanTianyuanEnvironmentalProtectionCo.,Ltd.|ShenzhenYaodeTechnologyCo.,Ltd.|
|1,207,329,193.60|277,952,551.38|722,353,178.12|
|254,585,080.00|480,549,307.71|59,389,129.52|
|1,461,914,273.60|758,501,859.09|781,742,307.64|
|474,053,819.02|175,746,683.09|245,842,169.76|
|13,397,492.07|99,714,468.48|-|

KonkaGroupCo.,Ltd. InterimReport2019 Totalliabilities
487,451,311.09 275,461,151.57 245,842,169.76 308,776,925.28
||||
|-|-|-|
|1,294,915.48|1,575,172.15|-|
|973,168,047.03|481,465,535.37|535,900,137.88|
|224,663,128.08|97,328,729.51|114,256,368.01|
|413,461,970.35|160,562,143.79|109,570,069.72|
||-|-|
|638,125,098.43|257,890,873.30|223,826,437.73|
|-|-|-|
|510,594,502.58|114,986,207.34|420,482,080.93|
|-868,947.60|2,633,870.27|11,059,244.18|
|7,946,521.81|4,799,304.12|2,465,250.56|
|56,746,353.10|28,075,014.13|8,078,012.77|
|-|-|-|
|-|-|-|

KonkaGroupCo.,Ltd. InterimReport2019 income
||||
|-|-|-|
|56,746,353.10|28,075,014.13|8,078,012.77|
|-|-|-|

(Continued)
Beginningbalance/Thesameperiodoflastyear
||||
|-|-|-|
|ChutianDragonCo.,Ltd.|WuhanTianyuanEnvironmentalProtectionCo.,Ltd.|ShenzhenYaodeTechnologyCo.,Ltd.|
|1,222,095,636.91|230,469,218.29|698,493,882.82|
|278,261,091.56|365,139,896.53|95,652,906.71|
|1,500,356,728.47|595,609,114.82|794,146,789.53|
|515,045,146.59|83,949,518.05|229,286,124.16|
|16,794,877.63|52,271,637.67|1,656,838.09|
|531,840,024.22|136,221,155.72|230,942,962.25|
|5,361,673.58|1,300,578.22|-|
|963,155,030.67|458,087,380.88|563,203,827.28|
|211,383,634.58|91,708,111.68|112,640,765.46|

KonkaGroupCo.,Ltd. InterimReport2019 Adjustedevents
||||
|-|-|-|
|413,461,970.35|160,562,143.79|109,570,069.72|
|-|-|-|
|-|-|-|
|624,845,604.93|252,270,255.47|222,210,835.18|
|-|-|-|
|486,019,598.26|95,131,035.31|319,742,579.72|
|-3,172,333.74|164,372.53|7,373,783.33|
|13,415,113.49|4,000,799.52|2,534,205.92|
|64,781,109.89|26,066,324.30|18,526,218.16|
|—|—|—|
|—|—|—|
|64,781,109.89|26,066,324.30|18,526,218.16|
|—|—|—|

IX.TheRiskRelated to FinancialInstruments
TheCompany’s main financial instruments include equity investment, credit investment,
borrowings, accounts receivable, accounts payable, etc. Details of the various financial
instruments are shown in the relevant notes toAnnotation VI. Risks related to these financial
KonkaGroupCo.,Ltd. InterimReport2019 instruments, and risk management policies the Company has adopted to reduce these risks are described as follows. The Company management manages and monitors the risk exposurein ordertoensure theabove risks to becontrolled in alimited scope.
The Company use sensitivity analysis technology to analyze the reasonable of risk variables, influence of probable changes to the current profit or loss andStockholders’equity. Because rarely any risk variables change in isolation, and the correlation between variables for the eventual impact of the change of a risk variables will have a significant effect, thus, the aforesaid content was processing under the assumption of the change of each variable was conducted independently.
(I)Risk Management Objectives andPolicies
The goals of Company engaged in the risk management is to achieve the proper balance between the risks and benefits, reduced the negative impact to the Company operating performance risk to a minimum, maximized the profits of shareholders and other equity investors. Based on the risk management goal, the basic strategy of the Company's risk management is determine and analyze the various risks faced by the Company, set up the bottom line of risk and conducted appropriate risk management, and timely supervised various risks in areliable way and controlled the risk withintherange oflimit.
1.MarketRisk
(1)Foreign Exchange Risk
Foreign exchange risk refers to the risks that may lead to losses due to fluctuation in exchange rate. The foreign exchange risk borne by the Company is related to USD. Except the procurement and sales by US dollars for several subsidiaries of the Company, such as Konka Hong Kong, Konka Electrical Appliances International Trading, Chain Kingdom Memory Technologies, Kangjietong and Jiali, etc., the other main businesses of the Company were settled by RMB.As of 30 June 2019, except for the assets or liabilities mentioned in the table below, the assets and liabilities of the Company are mainly the balance of RMB. The foreign exchange risks produced by the assets and liabilities balance may affect the business performance oftheCompany.
||
|-|
|Period-end|
|78,554,119.28|
|184,788,743.39|
|26,115,881.89|
|-|
|118,160,661.74|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|Period-end|
|139,691,704.64|
|803,078.36|

 The Company timely paid attention to the influence of change of the exchange rate to theCompany’s foreign exchange risk, which required the Group and others which conducted purchase and sale with settlement by foreign currency to purchase foreign currency long-term forward contract to lock the cost of purchase on forward date to reduce the risk exposure of foreign exchange.
The foreign exchange risk sensitivity analysis assumes that all overseas business net investment hedging and cash flow hedging are highly effective. On the basis of the above assumptions, the pre-tax effects of reasonable changes in exchange rates on current profits and lossesandshareholders’equity are as follows, withother variables unchanged:
||
|-|
|Changeininterestrate|
|Up1.00%toRMB|
|Down1.00%toRMB|

(2)Interest RateRisk-Cash FlowChange Risk
Cash flow change risk caused by financial instruments due to interest rate change is related to bank loans. By establishing good relations with banks and reasonable planning of credit line, credit varieties and credit period, it is to guarantee sufficient band line of credit and satisfy all financial demands. Moreover, it is to reduce risks of interest rate uncertainty by shortening single loan term and establishing repayment terms.
The risk of change in cash flow of financial instruments due to the change of interest rate of the Company is mainly related to the borrowing of banks.As of 30 June 2019, the long-term and short-term borrowings had atotal balance ofRMB14,448,367,813.
Interest rate risk sensitivity analysis:
TheSensitivity analysis to interest rate risk was based onthefollow assumption:
• Market interest rates change may affect the interest income or expense of variable rate financial instruments;
• For fixed-rate financial instruments measured at fair value, changes in market interest rates
onlyaffect theirinterest incomeorexpenses;
KonkaGroupCo.,Ltd. InterimReport2019• For derivative financial instruments designated as hedging instruments, changes in market interest rates affect their fair value, and all interest rate hedges are expected to be highly effective;
• Calculate the fair value changes of derivative financial instruments and other financial assets and liabilities using the discounted cash flow method at the market interest rate on the balance sheet date.
On the basis of the above assumptions, the pre-tax effects of reasonable changes in interest rates on current profits and losses andshareholders’ equity are as follows, with other variables unchanged:
|||||
|-|-|-|-|
|Changeininterestrate|ReportingPeriod||Sameperiodoflastyear|
||Influenceonprofits|Influenceonshareholders’equity|Influenceonprofits|
|Up1%|-144,483,678.13|-108,362,758.60|-108,984,477.03|
|Down1%|144,483,678.13|108,362,758.60|108,984,477.03|

2.CreditRisk
On 30 June 2019, the biggest credit risk exposure may lead to the financial assets losses of the Company was mainly from the one party fail to perform its obligation, which included: carrying amount recognized in consolidated balance sheet. For financial instruments measured at fair value, the carrying value reflect its risk exposure, but not the biggest one, and thebiggest risk exposurewillchange alongwith thechange offuture fair value.
In order the reduce the credit risk, the Company establish a group response for recognizing line of credit, conducting credit approval and other monitor procedures to ensure that the necessary measures were used to recycle expired claims. In addition, the Company at each balance sheet date, review every single receivables recycling situation, to ensure that the money unable to recycle withdrawn provision for bad debt fully. Thus, the Company management believed that have assume the credit risk the Company shouldered had been
greatly reduced.
TheCompany’s working capital was in bank with higher credit rating, so credit risk of
KonkaGroupCo.,Ltd. InterimReport2019 working capital was low.
An analysis of a financial asset that has suffered a single impairment, including factors that determinetheimpairment ofthefinancial asset.
The Company has adopted the necessary policies to ensure that all sales customers have a good credit history. Except for the items listed in the table below, the company has no other majorcredit concentration risks.
||
|-|
|Endingbalancee|
|300,027,889.84|
|200,000,000.00|
|115,000,000.00|
|0.00|
|84,500,000.00|
|65,221,300.00|
|50,000,000.00|
|50,000,000.00|
|24,462,454.04|
|152,402,680.00|
|18,115,952.51|
|13,396,856.82|

 3.Liquidity Risk
When managing liquidity risk, the Company maintained themanagement’s believe that
supervising the sufficient cash and cash equivalents to meet the operating demand of the
Company and reduce the influence of the fluctuation of cash flow. The management of the
KonkaGroupCo.,Ltd. InterimReport2019 Company monitored the use ofbank’s loans and guaranteed the observance of the borrowing agreements.
The Company took thebank’s loans as the main financing channel. The retained amount of loans oftheCompany bytheend of 30June2019was RMB6447.995million.
(II)Offsetbetween FinancialAssets andFinancialLiabilities
At the end of the period, the status of confirmed financial assets under an enforceable total offset agreement orsimilaragreement is as follows:
Period-end
|||
|-|-|
|Totalconfirmedfinancialassets|Amountoffsetofconfirmedfinancialliabilities|
|4,574,341,332.80|4,634,560,510.88|

Note: The Company signed the general offset agreements with the bank of finance products, timedeposit, import andexport invoicefinancing, L/C andbank’s acceptance bills.
X．TheDisclosureof
FairValue
1.EndingFairValueofAssets andLiabilities atFairValue
Endingfairvalue
||||
|-|-|-|
|Fairvaluemeasurementitemsatlevel1|Fairvaluemeasurementitemsatlevel2|Fairvaluemeasurementitemsatlevel3|
|-|-|61,494,666.97|
|-|-|61,494,666.97|
|-|-|-|
|-|-|61,494,666.97|
|-|-|-|
|-|-|-|
|-|-|19,140,214.36|
|-|-|1,548,364,400.00|
|-|-|1,628,999,281.33|
|-|-|-|

KonkaGroupCo.,Ltd. InterimReport2019 Endingfairvalue
||||
|-|-|-|
|Fairvaluemeasurementitemsatlevel1|Fairvaluemeasurementitemsatlevel2|Fairvaluemeasurementitemsatlevel3|
|-|-|-|

2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value MeasurementItems at Level 3
Consistent and inconsistent fair value measurement items at level 3 adopting the value appraisal techniques and the qualitative and quantitative information of important parametric in non-listed equity instrument investment, the Company concerned shall adopt investment cost method, market multiplier method, and net assets method to estimate the fair value. The Company believes that the fair value and changes estimated by using value appraisal techniques is reasonable, and willbe themostappropriate valueonthebalance sheet date. XI. Related Partyand Related-partyTransactions
1.Information Related to theCompany as theParentofthe Company
|||||
|-|-|-|-|
|Registrationplace|Natureofbusiness|Registeredcapital|ProportionofshareheldbytheCompanyastheparentagainsttheCompany(%)|
|Shenzhen|Tourism,realestate,electronicsindustry|RMB12billion|29.999997|

Note: The final controller of the Company is State-owned Assets Supervision and AdministrationCommission
2.Subsidiaries ofthe Company
Referto NoteVIII-1. Equity inSubsidiaries
3.Information ontheAssociated Enterprises of theCompany
Refer to Note VIII-3. Equity in Associated Enterprises for details of significant associated enterprises of the Company. Information on other joint ventures or associated enterprises occurring connected transactions with the Company in Reporting Period, or forming balance duetoconnected transactions madein previous period:
Name RelationshipwiththeCompany
ShenzhenKonkaInformationNetworkCo.,Ltd. Associatedenterprise
KonkaGroupCo.,Ltd. InterimReport2019 Name RelationshipwiththeCompany
AnhuiKaikaiShijieE-commerceCo.,Ltd. Associatedenterprise
BeijingKonkaTechnologyCo.,Ltd. Associatedenterprise
BinzhouBeihaiWeiqiaoSolidWasteDisposalCo.,Ltd. Associatedenterprise
OrientalHuijia(Zhuhai)AssetManagementCo.,Ltd. Associatedenterprise
FeidiTechnology(Shenzhen)Co.,Ltd. Associatedenterprise
GuangdongHotcommInformationTechnologyCo.,Ltd. Associatedenterprise
HelongjiangLongkangZhijiaTechnologyCo.,Ltd. Associatedenterprise
KonkaVentures Associatedenterprise
KunshanKonkaElectronicCo.,Ltd. Associatedenterprise
ShenzhenJielunteTechnologyCo.,Ltd. Associatedenterprise
ShenzhenKonkaIntelligentElectricalApparatusCo.,Ltd. Associatedenterprise
ShenzhenRF-LINKTechnologyCo.,Ltd. Associatedenterprise
ShenzhenYaodeTechnologyCo.,Ltd. Associatedenterprise
ShenzhenZhongbingKonkaTechnologyCo.,Ltd. Associatedenterprise
Weihai Water Environmental protection Technology
Associatedenterprise
Co.,Ltd.
ChongqingQingjia Associatedenterprise
ZhuhaiJinsuPlasticCo.,Ltd. Associatedenterprise
GuoguangRuilian(Shenzhen)InternetTechnologyCo.,
Associatedenterprise
Ltd.
Chuzhou Konka Technology& Industry Development
Associatedenterprise
Co.,Ltd.
HenanKonkaSmartElectricalApplianceCo.,Ltd. Associatedenterprise
ShandongKonkaSmartElectricalApplianceCo.,Ltd. Associatedenterprise
ShenzhenE-displayCo.,Ltd. Associatedenterprise
HorgosYilingfangInformationTechnologyCo.,Ltd. Associatedenterprise
4.Information onOtherRelated Parties
Name RelationshipwiththeCompany
GuoguangEasternNetwork(Beijing)Co.,Ltd. Shareholderoftheassociatedenterprise
AnhuiKonkaGreenLightingTechnologyCo.,Ltd. Subsidiaryofassociatedenterprise
NanjingSmartLightInformationTechnologyResearch
Minorityshareholderofsubsidiary
InstituteCo.,Ltd.
ChengduOneBeltCommunicationEquipmentCo.,Ltd. Minorityshareholderofsubsidiary
ShenzhenKonkaUnifortuneTechnologyCo.,Ltd. Minorityshareholderofsubsidiary
AUJETINDUSTRYLIMITED Minorityshareholderofsubsidiary
ChuzhouHanshangElectricApplianceCo.,Ltd. Minorityshareholderofsubsidiary
KonkaGroupCo.,Ltd. InterimReport2019 ShenzhenHenglongtongTechnologyCo.,Ltd. Minorityshareholderofsubsidiary
ShenzhenTradeLinkSupplyChainManagementCo.,
Minorityshareholderofsubsidiary
Ltd.
RushanWaterGroupCo.,Ltd. Minorityshareholderofsubsidiary
HuarunEnvironmentWaterCo.,Ltd. Minorityshareholderofsubsidiary
WeihaiWaterGroupSewerageCo.,Ltd. Minorityshareholderofsubsidiary
LaizhouJinzhouInvestmentCo.,Ltd. Minorityshareholderofsubsidiary
DaosuiGroupEngineeringCo.,Ltd. Minorityshareholderofsubsidiary
WeihaiWaterGroupCo.,Ltd. Minorityshareholderofsubsidiary
ChinaTiesijuCivilEngineeringGroupCo.Ltd Minorityshareholderofsubsidiary
HuanjiaGroupCo.,Ltd. Minorityshareholderofsubsidiary
LaizhouUrbanInvestmentDevelopmentCo.,Ltd. Minorityshareholderofsubsidiary
Subei Mongol Autonomous County Urban Construction
Minorityshareholderofsubsidiary
InvestmentCo.,Ltd.
UNIFORTUNE（HK） COMPANYLIMITED Majority-ownedcompanycontrolledbyminorityshareholder GuanganOuqishiElectronicTechnologyCo.,Ltd. Majority-ownedcompanycontrolledbyminorityshareholder GuizhouJiaguidaTechnologyCo.,Ltd. Majority-ownedcompanycontrolledbyminorityshareholder ZhongliadaCo.,Ltd. Majority-ownedcompanycontrolledbyminorityshareholder HuJiawen Closefamilymembersofthenon-controllinginterest DaiRongxing Closefamilymembersofthenon-controllinginterest ChangrongMediaCo.,Ltd. Thefinalcontrollerofthenon-controllinginterestofthe subsidiary
Controlledbythefinalcontrollerofthenon-controllinginterest JiangxiMeijiIndustryCo.,Ltd.
ofthesubsidiary
Shenzhen Zhonglian Datong Supply Chain Management Controlledbythefinalcontrollerofthenon-controllinginterest andConsultingCo.,Ltd. ofthesubsidiary
5.Listof Related-partyTransactions
(1)Information onAcquisition ofGoods and Reception ofLabor Service
①Information onacquisition ofgoods and reception oflabor service
|||
|-|-|
|Content|ReportingPeriod|
|Supply chaincommoditypurchase|253,830,553.49|
|Purchase ofmaterials andcommodity|274,774,273.58|
|Purchase of mobilephones|86,082,016.27|

KonkaGroupCo.,Ltd. InterimReport2019
|||
|-|-|
|Content|ReportingPeriod|
|Commoditypurchase|15,852,710.51|
|Purchase ofmaterials|90,792,814.55|
|Supply chaincommoditypurchase|73,460,368.85|
|Commoditypurchase|272,127,488.75|
|Purchase ofmaterials andservice|9,225,567.47|
|Commoditypurchase|3,139,931.77|
|Purchase ofmaterials|6,015,944.41|
|Advertisingagency|896,226.41|
|Commoditypurchase|2,468,262.65|
|Commoditypurchase|-|
|Purchase ofmaterials|7,129,499.00|
|Consultancy|-|
|Purchase ofmaterials|114,631.57|
|Commoditypurchase|-|
|Commoditypurchase|413,499,020.39|
|Purchaseservice|-|

②Information of sales ofgoods and provision of laborservice
|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
|AUJETINDUSTRYLIMITED|Supplychaincommoditysales|116,061,505.67|-|
|KunshanKonkaElectronicCo.,Ltd.|Salesofmaterials|241,955,310.50|422,921,017.22|
|AnhuiKaikaiShijieE-commerceCo.,Ltd.|Commoditysales|352,930,313.69|-|

KonkaGroupCo.,Ltd. InterimReport2019
|||||
|-|-|-|-|
|Guangan Ouqishi Electronic Technology Co.,Ltd.|Supplychaincommoditysales|228,125,999.21|-|
|Shenzhen Konka Information Network Co.,Ltd.|Salesofmaterials,provideservice|2,174,394.52|102,627,704.48|
|ShenzhenYaodeTechnologyCo.,Ltd.|Salesofmaterials|224,738,792.69|-|
|OCTGroupanditssubsidiaries|Salesofcommodityandprovidingservices|18,520,935.33|18,646,368.89|
|ShenzhenJielunteTechnologyCo.,Ltd.anditssubsidiaries|Providinglaborservice|42,653,586.74|14,485,742.69|
|HelongjiangLongkangZhijiaTechnologyCo.,Ltd.|Salesofcommodity|11,863,615.67|-|
|ZhongliandaCo.,Ltd.|Salesofmaterials|6,785,233.07|-|
|ShenzhenTradeLinkSupplyChainManagementCo.,Ltd.|Salesofmaterials|3,900,956.90|-|
|Guoguang Ruilian (Shenzhen) InternetTechnologyCo.,Ltd.|Advertisingservice|294,667.21|-|
|Guoguang Eastern Network (Beijing) Co.,Ltd.|Advertisingservice|9,838.02|1,385,765.21|
|FeidiTechnology(Shenzhen)Co.,Ltd.anditssubsidiaries|Rentalservice|2,000,434.75|-|
|ShenzhenRF-LINKTechnologyCo.,Ltd.|Rentalservice|291,552.02|-|
|Oriental Huijia (Zhuhai) Asset ManagementCo.,Ltd.|Rentalservice|197,959.99|-|
|BeijngKonkaTchnologyCo.,Ltd.|Rentalservice|325,631.95|7,901,215.40|
|Shenzhen Konka Intelligent ElectricalApparatusCo.,Ltd.|Salesofcommodity|-|3,235.90|
|Binzhou Beihhai Weiqiao Solid and WasteTreatmentCo.,Ltd.|Engineeringexpense|2,294,871.78|-|
|Chuzhou Hanshang Electric ApplianceCo.,Ltd.|Salesofmaterials|12,761,245.95|-|
|Chuzhou Konka Technology & IndustryDevelopmentCo.,Ltd.|Providinglaborservice|1,415,094.30|-|
|GuizhouJiaguidaTechnologyCo.,Ltd.|Salesofcommodity|256,149.18|-|
|HenanKonkaSmartElectricalApplianceCo.,Ltd.|Salesofcommodity|3,412,835.40|-|

KonkaGroupCo.,Ltd. InterimReport2019
|||||
|-|-|-|-|
|Shandong Konka Smart Electrical ApplianceCo.,Ltd.|Salesofcommodity|35,713,503.46|-|

(2)Information onRelated-party Lease
|||
|-|-|
|Categoryofleasedassets|TheleasefeeconfirmedintheReportingPeriod|
|Commercialresidentialbuildingandofficebuilding|711,709.06|

(3)Information onRelated-party Guarantee
①TheCompany was guarantor
|||||
|-|-|-|-|
|Guaranteeamount(RMB’0,000)|Currency|Startdate|Enddate|
|1,398.00|CNY|2018-11-7|2019-11-7|
|500.00|CNY|2018-9-20|2019-8-14|
|1,057.50|CNY|2019-1-10|2019-11-14|
|3,901.00|CNY|2019-1-11|2020-1-11|
|2,018.50|CNY|2019-1-23|2020-1-23|
|3,573.53|CNY|2018-5-9|-|
|2,869.00|CNY|2018-6-19|-|
|2,300.00|USD|2019-3-13|2020-3-13|
|1,500.00|USD|2018-8-7|2019-8-6|
|10,000.00|CNY|2018-12-6|2019-12-6|
|5,000.00|CNY|2018-5-28|2025-5-24|
|4,000.00|CNY|2019-3-18|2022-3-17|
|5,800.00|CNY|2018-11-21|2020-11-21|
|950.00|CNY|2018-11-13|2020-11-13|
|3,897.52|CNY|2019-4-19|2020-4-18|
|1,000.00|CNY|2019-5-20|2020-5-19|
|3,135.00|CNY|2018-10-10|2019-10-10|
|703.00|CNY|2019-4-23|2020-4-22|

KonkaGroupCo.,Ltd. InterimReport2019
|||||
|-|-|-|-|
|Guaranteeamount(RMB’0,000)|Currency|Startdate|Enddate|
|5,000.00|CNY|2019-5-13|2020-5-12|
|10,000.00|CNY|2018-12-4|2019-12-31|
|10,000.00|CNY|2018-12-7|2019-12-6|
|10,900.00|CNY|2019-3-18|2021-9-18|
|10,000.00|CNY|2019-2-28|2020-2-28|
|2,500.00|CNY|2019-6-27|2020-6-26|
|3,550.00|CNY|2019-6-19|2020-6-18|
|13,000.00|CNY|2019-2-2|2024-2-2|
|1,779.11|CNY|2019-2-20|2021-2-20|
|3,934.74|CNY|2019-4-18|2020-4-18|
|316.39|CNY|2019-6-20|2020-5-17|
|14,740.00|CNY|2016-12-29|2026-12-28|
|10,000.00|CNY|2016-12-19|-|
|10,000.00|CNY|2016-12-19|-|
|10,000.00|CNY|2016-12-19|-|

Refer to Note XII-2.-(2) Contingent Liabilities Generated from Providing Debt Guarantees for Other Entities and Financial Influence thereof for details of external guarantees of the Company.
②TheCompany was secured party
|||||
|-|-|-|-|
|Guaranteeamount(RMB’0,000)|Currency|Startdate|Enddate|
|2,200.00|CNY|2018-12-6|2019-12-6|
|2,450.00|CNY|2018-5-28|2025-5-24|
|1,960.00|CNY|2019-3-18|2022-3-17|

KonkaGroupCo.,Ltd. InterimReport2019
|||||
|-|-|-|-|
|Guaranteeamount(RMB’0,000)|Currency|Startdate|Enddate|
|816.35|CNY|2018-10-10|2019-10-10|
|363.03|CNY|2018-10-10|2019-10-10|
|333.56|CNY|2018-10-10|2019-10-10|
|23.20|CNY|2018-10-10|2019-10-10|
|4,900.00|CNY|2018-12-4|2019-12-31|
|4,900.00|CNY|2018-12-7|2019-12-6|
|2,000.00|CNY|2017-4-5|-|
|24,500.00|CNY|2018-8-7|2023-8-6|
|21,165.00|CNY|2018-10-15|2020-10-14|
|2,585.25|CNY|2018-8-28|2020-8-27|
|1,056.34|CNY|2018-8-28|2020-8-27|
|1,149.66|CNY|2018-8-28|2020-8-27|
|73.47|CNY|2018-8-28|2020-8-27|
|5,774.37|CNY|2018-12-20|2020-12-19|
|2,567.87|CNY|2018-12-20|2020-12-19|
|2,359.42|CNY|2018-12-20|2020-12-19|
|164.10|CNY|2018-12-20|2020-12-19|
|49,000.00|CNY|2019-1-18|2021-1-17|
|7,350.00|CNY|2019-1-29|2020-1-28|
|6,370.00|CNY|2019-2-2|2024-2-2|
|1,739.50|CNY|2019-6-19|2020-6-18|

KonkaGroupCo.,Ltd. InterimReport2019
|||||
|-|-|-|-|
|Guaranteeamount(RMB’0,000)|Currency|Startdate|Enddate|
|1,225.00|CNY|2019-6-27|2020-6-26|
|5,341.00|CNY|2019-3-18|2021-9-18|
|4,900.00|CNY|2019-4-23|2020-4-23|
|14,700.00|CNY|2019-3-19|2020-3-18|
|74.80|CNY|2019-4-23|2022-4-23|
|5.20|CNY|2019-4-23|2022-4-23|
|183.06|CNY|2019-4-23|2022-4-23|
|81.41|CNY|2019-4-23|2022-4-23|
|532.00|CNY|2019-5-13|2022-5-12|
|37.00|CNY|2019-5-13|2022-5-12|
|1,302.00|CNY|2019-5-13|2022-5-12|
|579.00|CNY|2019-5-13|2022-5-12|
|26,764.00|CNY|2018-1-1|2022-4-20|
|26,764.00|CNY|2018-01-01|2022-4-20|
|9,325.78|CNY|2018-7-1|2021-6-30|
|4,168.70|CNY|2018-7-1|2021-6-30|
|127.44|CNY|2018-7-1|2021-6-30|
|127.44|CNY|2018-7-1|2021-6-30|
|127.44|CNY|2018-7-1|2021-6-30|
|245.00|USD|2018-5-18|2019-5-17|
|73.50|USD|2018-8-6|2019-8-5|
|98.00|USD|2018-8-14|2019-8-13|
|147.00|USD|2018-8-17|2019-8-16|

KonkaGroupCo.,Ltd. InterimReport2019
|||||
|-|-|-|-|
|Guaranteeamount(RMB’0,000)|Currency|Startdate|Enddate|
|147.00|USD|2018-8-27|2019-8-26|
|98.00|USD|2018-9-14|2019-9-13|
|245.00|USD|2018-9-26|2019-9-25|
|98.00|USD|2018-9-28|2019-9-27|
|245.00|USD|2018-10-9|2019-10-8|
|686.00|USD|2018-10-11|2019-10-10|
|392.00|USD|2018-10-16|2019-10-15|
|245.00|USD|2018-10-23|2019-10-22|
|49.00|USD|2018-10-26|2019-10-25|
|171.50|USD|2018-11-1|2019-10-31|
|34.30|USD|2018-12-28|2019-12-27|
|117.60|USD|2019-1-23|2020-1-22|
|245.00|USD|2019-3-12|2020-3-11|
|73.50|USD|2019-5-30|2019-7-13|
|88.20|USD|2019-6-28|2020-6-27|
|181.30|USD|2018-5-18|2021-12-30|
|73.50|USD|2018-7-26|2021-12-30|
|147.00|USD|2018-7-31|2021-12-30|
|98.00|USD|2018-8-17|2021-12-30|
|98.00|USD|2018-9-27|2021-12-30|
|196.00|USD|2018-10-25|2021-12-30|
|84.33|USD|2019-5-23|2022-4-19|
|24.50|USD|2019-5-30|2021-7-12|
|44.45|USD|2019-6-20|2022-4-19|
|1,470.00|USD|2018-9-26|2021-10-29|
|2,940.00|USD|2018-5-28|2021-11-1|

KonkaGroupCo.,Ltd. InterimReport2019
|||||
|-|-|-|-|
|Guaranteeamount(RMB’0,000)|Currency|Startdate|Enddate|
|3,500.00|USD|2018-10-18|2019-10-17|
|1,000.00|USD|2019-1-1|2019-12-31|
|1,000.00|USD|2019-1-1|2019-12-31|
|1,000.00|USD|2019-1-1|2019-12-31|
|2,000.00|USD|2018-9-6|2019-9-5|
|2,000.00|USD|2019-4-22|2019-12-31|
|1,500.00|USD|2019-6-5|2019-12-31|
|150.00|USD|2019-6-21|2019-12-31|
|500.00|USD|2018-8-10|2019-8-9|
|300.00|USD|2018-9-10|2019-9-9|
|300.00|USD|2018-9-14|2019-9-13|
|500.00|USD|2018-10-17|2019-10-16|
|300.00|USD|2018-10-19|2019-10-18|
|300.00|USD|2018-11-12|2019-11-11|
|2,000.00|USD|2019-1-1|2019-12-31|
|1,000.00|USD|2018-7-10|2019-7-9|

 Note: The Company was provided with counter guarantee regarding entrusted loans from the Company to majority-owned subsidiaries by minority shareholders of aforesaid majority-owned subsidiaries.
(4)Information onInter-bank Lending of Capital ofRelated Parties
|||||
|-|-|-|-|
|Amount|Startdate|Enddate|Duration|
|10,000.00|25 June 2018|12 April 2023|14June2018to6June2021|
|2,000.00|25June2018|12April2023|19July2018to14June2021|

KonkaGroupCo.,Ltd. InterimReport2019
|||||
|-|-|-|-|
|Amount|Startdate|Enddate|Duration|
|140,000.00|25June2018|12April2023|14May2018to13May2019|
|48,000.00|25June2018|12April2023|14May2018to9May2019|
|100,000.00|25June2018|12April2023|19July2018to19July2019|
|10,807.56|25June2018|12April2023|14May2019to9May2020|
|22,192.44|22April2019|21 August 2019|22April2018to21August2019|
|27,656.00|16April2019|15 April 2020|16April2019to15April2020|
|50,000.00|26April2018|31August2019|26April2018to31August2019|
|3,000.00|17 December 2018|12 December 2019|17December2018to12December2019|
|4,025.00|20 February 2019|19 February 2020|20February2019to19February2020|
||17 October 2018|16 October 2019|17Octorber2018to16Octorber2019|
|41,600.00||||
|46,700.00|22 October 2018|21April2019|22October2018to21April2019|

KonkaGroupCo.,Ltd. InterimReport2019
|||||
|-|-|-|-|
|Amount|Startdate|Enddate|Duration|
|20,500.00|22October2018|21April2020|22October2018to21April2020|
|4,000.00|21December2018|20December2019|21December2018to20December2019|
|6,000.00|25October2018|24October2021|25October2018to24October2021|
|2,000.00|25October2018|24April2020|25October2018to24April2020|
|890.00|16March2017|15March2019|16March2017to15March2019|
|10,000.00|12April2018|12April2020|12April2018to12April2020|

Note: The interest expenses of inter-bank borrowing of capital from above related parties are as follows: RMB117,352,255.65 of OCT Group and RMB2,713,345.84 of Chuzhou Hanshang Electric Appliance Co.,Ltd. The interest income or investment income of inter-bank lending of capital from above related parties are as follows: RMB82,611,530.36 of Nanjing Kangxing Technology Industry Park, RMB928,721.17 of Yibin OCT Sanjiang Property Co., Ltd., RMB928,721.17 of Hunan Vary Tech Packing Co., Ltd. and RMB337,714.88ofChongqing Qingjia Electronic Co.,Ltd.
(5)Transfer of Equity
On 21 June 2019, the Company sold51% stake in Chuzhou Konka Technology& Industry Development Co., Ltd. at RMB63.5205 million to Shenzhen Overseas Chinese Town Capital Investment Management Co., Ltd.
(5)Information onRemuneration for Key Management Personnel
||
|-|
|Reportingperiod(RMB’0,000)|
|1,075.01|

KonkaGroupCo.,Ltd. InterimReport2019 6.Accounts Receivableand Payableof Related Party
(1)Accounts Receivable
||||
|-|-|-|
|30June2019|||
|Carryingamount|Baddebtprovision|Carryingamount|
|289,666,975.63|5,880,239.61|144,976,103.92|
|111,095,609.10|2,255,240.86|77,403,347.03|
|102,603,146.10|2,082,843.87|38,691,654.09|
|34,944,423.79|4,607,146.63|35,556,676.56|
|-|-|34,560,012.48|
|28,249,771.68|2,080,883.27|25,051,883.94|
|50,644,597.44|1,574,179.83|13,445,059.89|
|2,314,301.24|46,980.32|13,413,924.15|
|6,096,891.16|609,689.12|6,096,891.16|
|2,916,126.00|59,197.36|3,696,532.00|
|1,500,000.00|30,450.00|1,500,000.00|
|178,459.16|3,622.72|822,825.15|
|-|-|430,948.43|
|20,000.00|406.00|-|
|1,147,072.34|23,285.57|-|
|3,603,594.81|73,152.97|-|
|60,223,239.55|1,222,531.76|-|
|626,632.22|12,720.63|-|

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|30June2019|||
|Carryingamount|Baddebtprovision|Carryingamount|
|7,380,291.65|149,819.92|-|
|703,211,131.87|20,712,390.44|395,645,858.80|
|180,000,000.00|-|240,100,000.00|
|10,264,507.35|||
|190,264,507.35|-|240,100,000.00|
|83,265,018.32|2,489,085.90|81,450,139.05|
|99,798,640.31|2,205,549.95|74,788,640.31|
|20,911,273.00|9,459,496.11|21,310,694.38|
|9,780,111.09|465,340.46|9,433,133.32|
|246,113.98|12,330.31|240,692.62|
|20,831.83|4,810.08|4,448.00|
|200,000.00|4,420.00|-|
|20,500.00|453.05|-|
|3,440,000.00|76,024.00|-|
|30,000.00|663.00|-|
|217,712,488.53|14,718,172.86|187,227,747.68|
|12,585,374.02|-|14,086,876.64|
|65,829,221.40|-|43,476,841.21|
|78,414,595.42|-|57,563,717.85|
||-||
|29,980,819.37|-|29,647,649.73|

KonkaGroupCo.,Ltd. InterimReport2019
||||
|-|-|-|
|30June2019|||
|Carryingamount|Baddebtprovision|Carryingamount|
|28,623,157.08|-|28,623,157.08|
|18,495,853.23|-|24,076,497.42|
|38,034,057.55|-|4,341,793.16|
|-|-|800,000.00|
|32,273,300.87|-|640,726.28|
|552,793.14|-|499,972.16|
|158,900.00|-|-|
|14,231,785.93|-|-|
|106,400,000.00|-|-|
|31,521,705.00|-|-|
|300,272,372.17|-|88,629,795.83|

 (2)Accounts Payable
||
|-|
|30June2019|
|39,335,098.55|
|2,178,980.37|
|-|
|19,118,416.81|
|58,658,005.05|
|9,543,100.00|
|497,131.87|
|11.00|
|-|
|444,367.00|
|-|
|-|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|30June2019|
|107,763.39|
|1,316,660.54|
|-|
|-|
|13,735,733.69|
|23,022,332.04|
|24,930,259.15|
|192,887,859.46|
|2,663,931.56|
|-|
|480,971.78|
|140,000,000.00|
|17,062,537.45|
|1,932,419.86|
|162,139,860.65|
|28,256,294.05|
|16,357,854.41|
|-|
|-|
|542,490.38|
|-|
|15,740,618.95|
|856,854.36|
|1,749,509.47|
|150,000.00|
|6,681,828.06|
|53,775.28|
|70,389,224.96|
|78,849,048.66|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|30June2019|
|9,609,969.79|
|6,215,250.00|
|-|
|-|
|-|
|-|
|-|
|900,000.00|
|-|
|100,000.00|
|111,875.00|
|-|
|-|
|-|
|9,183.55|
|95,795,327.00|
|8,163,418.38|
|8,163,418.38|

 XII. Commitments andContingency
1.SignificantCommitments
(1)Capital Commitment
||
|-|
|Endingbalance|
|-|
|1,669,759,371.47|

KonkaGroupCo.,Ltd. InterimReport2019
||
|-|
|-|
|1,669,759,371.47|

 (2)OperatingLeaseCommitments
Asofthebalancesheetdate,theirrevocableoperatingleasecommitmentsthattheCompanysigned wereasfollowed:
||
|-|
|Endingbalance|
|18,148,924.52|
|5,432,265.52|
|2,683,505.44|
|2,077,921.20|
|28,342,616.68|

 (3)Other Commitments
As of 30 June 2019, there were no other significant commitments for the Company to disclose.
2.Contingency
(1) Contingent Liabilities Generated from Pending Action and Arbitration and Financial Influencethereof
① Due to the problems of quality and construction delay in the settlement of intelligent engineering project between the Company and Shenzhen GNG Co., Ltd., theydidn’t agree on the related deductions. On September 28, 2017, Shenzhen GNG Co., Ltd. filed a lawsuit toPeople’s Court of Nanshan District, Shenzhen for the payment in project arrears in the Construction Contract of KonkaR&D Building Intelligent Engineering, which required the Company to pay RMB2,770,487.13 for the project arrears and RMB340,761.69 for the interests of the project arrears. On July 23, 2018, the Company filed the counterclaim to Shenzhen GNG Co., Ltd. for the payment in project arrears with RMB927,807.10, and the payment for that the construction was in discrepancy with the contract with RMB927,807.10. According to the paper of civil judgment (2017) Yue 0305 Minchu No. 18838 ofPeople’s Court of Nanshan District on April 27, 2019, the Company should pay Shenzhen GNG Co.,
Ltd. for engineering expense with RMB2,691,298.87, and Shenzhen GNG Co., Ltd. was
required to pay the Company for the penalty with RMB649,464.97. The two companies
KonkaGroupCo.,Ltd. InterimReport2019 refused to accept the above judgment and filed an appeal to the Shenzhen IntermediatePeople’s Court. As of the issuance date of this Report, the case has not been held a court hearing.
②Due to the dispute in rent lease contract among theCompany’s subsidiary-Mudanjiang Appliances, Heilongjiang Jinri Optoelectronics Technology Co., Ltd. and Jinyue Group Co., Ltd., thePeople’s Court of Aimin District, Mudanjiang City, Helongjiang Province made the main civil judgment (2016) Hei 1004 Minchu No. 604 on August 25, 2017. The judgment was as follows: The defendants Heilongjiang Jinri Optoelectronics Technology Co., Ltd. and Jinyue Group Co., Ltd. should jointly pay the plaintiff-Mudanjiang Appliances a total of RMB3,656,910.82 in occupancy fees, rent, and interest. On Novenber 30, 2018, Mudanjiang Appliances has transferred the credit assignment to the Company, which was executed by the Company.As of the issuance date of thisReport, it has not yet been implemented completely.
③According to the civil judgment (2018) GMC No.110 made by the HigherPeople’s Court of Jiangxi Province on September 27, 2018 on the disputes arisen from a loan contract between the minority shareholders of Jiangxi Konka, a subsidiary of the Company, and China Great Wall AMC Jiangxi Branch, the100% equity of Nanocrystalline, the100% equity of Xinfeng Microcrystaline held by Jiangxi Konka and deposit and the collateral under the nameofother relevant guarantees;
On September 30, 2018, Jiangxi Konka filed an application for reconsideration, and on October 11, 2018, Jiangxi Konka filed an application for supplementary reconsideration. According to one of the civil judgments (2018) GMC No.110 made by the HigherPeople’s Court of Jiangxi Province on November 16, 2018, the frozen account of Jiangxi Konka will bereleased.
On July 19, 2019, Jiangxi Konka applied to the HigherPeople’s Court of Jiangxi Province for adding AVIC TRUST CO., LTD. and Nanchang Rural Commercial Bank as the third party to participate in the litigation. As of the issuance date of this Report, the courthasn’t made thejudgement offirst trial.
④The Company held the trade acceptance of Shanghai Huaxin International Group Co., Ltd., and the accepter failed to accept the matured notes. In January 2019, the Company, as the prosecutor, launched a lawsuit to Shenzhen IntermediatePeople’s Court in respect of the matured notes of RMB50,000,000.00, claiming that the accepter Shanghai Huaxin and the remote holder (Tianjin International Trade Petrochemical Co., Ltd., Konka Commercial Factoring (Shenzhen) Co., Ltd.) should burden the joint liability for settlement of the notes
KonkaGroupCo.,Ltd. InterimReport2019 and corresponding penal interests. And now the case has been officially accepted and registered, in which the court is executing the property preservation. As of the issuance date of this Report, the case has not been held a court hearing, and the aforesaid trade acceptance has not been honored.
The Company held the trade acceptance of Shanghai Huaxin International Group Co., Ltd., and the accepter failed to accept the matured notes. In February 2019, the Company, as the prosecutor, launched a lawsuit to Shenzhen IntermediatePeople’s Court in respect of the matured notes of RMB150,000,000.00, claiming that the accepter Shanghai Huaxin and the remote holder (Qingdao Baoshui Zhongshe International Trade Co., Ltd., Dafenqi Commercial Factoring (Shenzhen) Co., Ltd.) should burden the joint liability for settlement of the notes and corresponding penal interests.And now the case has been officially accepted and registered, in which the court is executing the property preservation. As of the issuance date of this Report, the case has not been held a court hearing, and the aforesaid trade acceptance has not been honored.
The Company held the trade acceptance of Shanghai Huaxin International Group Co., Ltd., and the accepter failed to accept the matured notes. In July 2019, the Company, as the prosecutor, launched a lawsuit to Shenzhen IntermediatePeople’s Court in respect of the matured notes of RMB100,027,889.84, claiming that the accepter Shanghai Huaxin and the remote holder (Yellow River International Trade (Zhengzhou) Co., Ltd., Dafenqi Commercial Factoring (Shenzhen) Co., Ltd.) should burden the joint liability for settlement of the notes and corresponding penal interests.And now the case has been officially accepted and registered, in which the court is executing the property preservation. As of the issuance date of this Report, the case has not been held a court hearing, and the aforesaid trade acceptance has not been honored.
⑤The Company held the trade acceptance of China Energy Power Fuel Co., Ltd., and the accepter failed to accept the matured notes. The Company, as the prosecutor, launched a lawsuit to Shenzhen IntermediatePeople’s Court in respect of the matured notes of RMB50,000,000.00, claiming that the accepter and the remote holder should burden the joint liability for settlement of the notes and corresponding penal interests.According to No. (2018) Y03MC3354 Civil Verdict issued by Shenzhen IntermediatePeople’s Court on November 1, 2018, relevant properties under the name of China Energy (Shanghai) Enterprise Co., Ltd., China Energy Power Fuel Co., Ltd., Shanghai Nengping Enterprise Co., Ltd., and Shenzhen Qianhai Baoying Commercial Factoring Co., Ltd. would be sealed up, detained and frozen (RMB50,000,000.00 at most). On July 9, 2019, the Company received the judgement of No.
KonkaGroupCo.,Ltd. InterimReport2019 (2018)Y03MC3354 Civil Verdict issued by Shenzhen IntermediatePeople’s Court, in which the defendant should pay the Company the notes of RMB50,000,000.00 and corresponding interest. As of the issuance date of this Report, the service by publication is undergoing and theaforesaid trade acceptancehas not been honored.
⑥TheCompany’s subsidiary Konka Factoring held the trade acceptance of Tahoe Group Co., Ltd., and the accepter failed to accept the matured notes. In January 2019, Konka Factoring, as the prosecutor, launched a lawsuit to Shenzhen IntermediatePeople’s Court in respect of the matured notes of RMB50,000,000.00, claiming that the accepter and the remote holder (Fuzhou Taijia Enterprise Co., Ltd., Xiamen Linktron Microelectronics Co., Ltd.) should burden the joint liability for settlement of the notes and corresponding penal interest. And now the case has been officially accepted and registered, in which the court is executing the property preservation. As of the issuance date of this Report, the case has not been held acourt hearing, and theaforesaid trade acceptancehas not been honored.
⑦TheCompany’s subsidiary XingDa Hongye had a dispute over the commission contract with Kunshan Mingyu Electronics Co., Ltd. During the lawsuit, Kunshan Mingyu Electronics Co., Ltd. applied for the property preservation, and RMB2,320,000.00 was frozen from the bank account of XingDa HongYe.According to No. (2018) S0583MC14368 Civil Verdict issued by KunshanPeople’s Court on January 21, 2019 after the first instance, the respondent XingDa HongYe should pay the commission RMB1,459,941.32 and corresponding overdue interest within 10 days after the verdict came into effect, but XingDa HongYe also instituted an appeal to the court in February 2019. As of the issuance date of thisReport, the court has not issued theverdict forthe trialof second instance.
⑧TheCompany’s subsidiary, Konka Commercial Factoring(Shenzhen) Co., Ltd. held the trade acceptance of Zhongjiao No.1Aviation Bureau No.1 Engineering Company, and the accepter failed to accept the matured notes. In May 2019, Konka Commercial Factoring(Shenzhen) Co., Ltd., as the prosecutor, launched a lawsuit toPeople’s Court of Nanshan District, Shenzhen,, claiming that the accepter Zhongjiao No.1 Aviation Bureau No.1 Engineering Company should pay the notes of RMB36.2 million and corresponding interest, and the remote holder (Tianjin Xingxi Commercial Trade Co., Ltd., Shenzhen Gujinhong Trade Co., Ltd., Shanghai Tianwei International Trade Co., Ltd. and Shanghai Runlin International Trade Co., Ltd.) should burden the joint liability for the debts of Zhongjiao No.1Aviation Bureau No.1 Engineering Company.And now the case is under the first trial, in which has applied for executing the property preservation, and is still awaiting trial.
KonkaGroupCo.,Ltd. InterimReport2019⑨TheCompany’s subsidiary, Konka Commercial Factoring(Shenzhen) Co., Ltd. held the trade acceptance of Zhongjiao No.1Aviation Bureau No.1 Engineering Company, and the accepter failed to accept the matured notes. In June 2019, Konka Commercial Factoring(Shenzhen) Co., Ltd., as the prosecutor, launched a lawsuit to the FirstPeople’s Court of Dongguan,, claiming that the accepter Zhongjiao No.1 Aviation Bureau No.1 Engineering Company should pay the notes of RMB10 million and corresponding interest, and the remote holder (Tianjin Xingxi Commercial Trade Co., Ltd., Shenzhen Gujinhong Trade Co., Ltd., Shanghai Tianwei International Trade Co., Ltd. and Shanghai Runlin International Trade Co., Ltd.) should burden the joint liability for the debts of Zhongjiao No.1 Aviation Bureau No.1 Engineering Company. And now the case is under the first trial, inwhich has applied for executing theproperty preservation, and is stillawaiting trial.
⑩The Company held the trade acceptance of China Nuclear Engineering Construction Group Co., Ltd., and the accepter failed to accept the matured notes. In March 2019, the Company, as the prosecutor, launched a lawsuit to Shenzhen IntermediatePeople’s Court in respect of the matured notes of RMB80,000,000.00,, claiming that the remote holder Hefei Huajun Commercial Trade Co., Ltd., Wuhan Jialian Agricultural Technology Development Co., Ltd. should pay the notes of RMB80,000,000.00 and corresponding interest. And now the case has been officially accepted and registered, in which the court is executing the property preservation, andis awaiting trial.
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H-BUSTER SAO PAULO INDUSTRIAE COMERCIO S.A (hereinafter referred to as “H-BUSTER”) (Brazil), a customer of theCompany’s subsidiary Hong Kong Konka Limited, became insolvent and obtained in May 2013 the approval from the Third Civil Court of Cotia City of the Court of the State of Sao Paulo, Brazil for its judicial reorganization application. As a creditor of H-BUSTER, Hong Kong Konka submitted itscreditor’s rights declaration paper, and the amount owed by H-BUSTER to Hong Kong Konka was recognized in August 2014 at approximatelyUS$2.78 million. However, the aforesaid reorganization plan of H-BUSTER was vetoed at acreditors’ meeting. Currently, thebankruptcy and reorganization case ofH-BUSTER is stillpending.
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In October 2015, Via Licensing Corporation and theCompany’s subsidiary Hong Kong Konka Limited (hereinafter referred to as “Hong Kong Konka Limited”) entered into the Advanced Audio Coding (AAC) Patent Licensing Agreement, in which Via Licensing Corporation allows Hong Kong Konka and its related enterprises to use the patented AAC technology in the production and sale of their products and the licensing fee shall be based on the sales volumes of the products using the patented technology. In April 2018, Via
KonkaGroupCo.,Ltd. InterimReport2019 Licensing Corporation initiated an arbitration at the Hong Kong International Arbitration Centre against Hong Kong Konka and the Company for not paying the licensing fee in full, claiming that Hong Kong Konka and the Company shall pay a licensing fee of approximatelyUS$18.69 million. Later, Via Licensing Corporation applied to increase the amount toUS$40.3875million. Up tothe issuedateof thisReport, thiscase is stillawaiting trial.
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In March 2018, Wumart Stores, Inc. filed a lawsuit to the Court of Shijingshan District, Beijing against the Beijing branch of the Company over a purchase and sales contract, asking for the return of a prepayment of RMB10.7367 million. Currently, this case isin thefirst trial withnodecision reached yet.
⑭The Company held the trade acceptance of HISAP High-technology Co. Ltd. and the accepter failed to accept the matured notes. In July 2019, the Company, as the prosecutor, launched a lawsuit to Shenzhen IntermediatePeople’s Court in respect of the matured notes of RMB200,000,000.00,, claiming that the remote holder Nanjing Jiongjiong Electronic Technology Co., Ltd., Shenzhen Qianhai Benniu Agricultural Technology Co., Ltd. should pay the notes of RMB200,000,000.00 and corresponding interest. And now the case is under thefirst instance and isawaiting trial.
(2) Contingent Liabilities Generated from Providing Debt Guarantees for Other Entitiesand Financial Influence thereof
The Company signed the maximum amount guarantee contract (No. 18czA0012-a-XCYZGBZD2018) with Chuzhou Branch of China Citic Bank on November 7, 2018, in which the Company provided the maximum credit guarantee of RMB58 million to Anhui KonkaTongchuang International Trade Co., Ltd. within three years from the day when the obligation fulfillment period stipulated in the specific business contract expired, and the guarantee mode was the joint liability guaranty. The credit line is mainly used to open and accept the letter of credit of Anhui Tongchuang International Trade Co., Ltd. and obtain the financing credit and other daily businesses from the bank. The guarantee amount has been used RMB13,980,000.00by30June 2019.
The Company signed the guarantee contract of maximum amount (No. CZZHZGBZ 2018 No.0103) with Chengzhong Branch of Chuzhou Eastern Anhui Rural Commercial Bank on May 9, 2018, in which the Company provided credit guarantee of RMB45,000,000.00 to Anhui Tongchuan. The guarantee period is two years from the expiration of the debt performance period agreed in the relevant credit line agreements, and the guarantee mode was the joint liability guaranty. The credit line is mainly used to open and accept the letter of credit ofAnhui Tongchuang International Trade Co., Ltd. and obtain the financing credit and
KonkaGroupCo.,Ltd. InterimReport2019 other daily businesses from the bank. The guarantee amount has been used RMB35,735,300.00byJune30,2019.
The Company signed the maximum amount guarantee contract (No. CZGSBOZGBT20180011) with Chuzhou Branch of China Everbright Bank on June 19, 2018, in which the Company provided the maximum credit guarantee of RMB30 million to Anhui Konka Tongchuang International Trade Co., Ltd. The guarantee period is two years from the expiration of the debt performance period agreed in the relevant credit line agreements, and the guarantee mode was the joint liability guaranty. The credit line is mainly used to open and accept the letter of credit ofAnhuiTongchuang InternationalTrade Co., Ltd. and obtain the financing credit and other daily businesses from the bank. The guarantee amounthas been used RMB28,690,000.00byJune 30,2019.
The Company signed the maximum amount guarantee contract (No. 00035 ZSYGBZD2018) (361006) with Hefei Branch of China Zheshang Bank on September 20, 2018, in which the Company provided the maximum credit guarantee of RMB55 million to Anhui Konka Tongchuang International Trade Co., Ltd. within two years from the day when thedebtor’s obligation fulfillment period stipulated in the debt contract signed between Anhui Tongchuang and Hefei Branch of China Zheshang Bank expired, and the guarantee mode was the joint liability guaranty. The credit line is mainly used to open and accept the letter of credit ofAnhui Tongchuang International Trade Co., Ltd. and obtain the financing credit and other daily businesses from the bank. The guarantee amount has been used RMB50,000,000.00byJune30,2019.
The Company signed the guarantee contract of maximum amount (No. Jingtian18006) with Shenzhen Branch of China Minsheng Bank Co., Ltd. on January 10, 2019, in which the Company provided the maximum credit guarantee of RMB30 million to Anhui Konka Tongchuang International Trade Co., Ltd. within two years from the day when thedebtor’s obligation fulfillment period stipulated in the debt contract signed between Anhui Tongchuang and Shenzhen Branch of China Minsheng Bank expired, and the guarantee mode was the joint liability guaranty. The credit line is mainly used to open and accept the letter of credit of Anhui Tongchuang International Trade Co., Ltd. and obtain the financing credit and other daily businesses from the bank. The guarantee amount has been used RMB10,575,000.00byJune30,2019.
The Company signed the maximum amount guarantee contract (No. 180302) (240A1) with Chuzhou Branch of Industrial Bank on January 11, 2019,in which the Company provided the maximum credit guarantee of RMB100 million to Anhui Konka Tongchuang International
KonkaGroupCo.,Ltd. InterimReport2019 Trade Co., Ltd. within two years from the day when thedebtor’s obligation fulfillment period stipulated in the debt contract signed between Anhui Tongchuang and Chuzhou Branch of Industrial Bank expired, and the guarantee mode was the joint liability guaranty. The credit line is mainly used to open and accept the letter of credit ofAnhui Tongchuang International Trade Co., Ltd. and obtain the financing credit and other daily businesses from the bank. The guaranteeamount has been used RMB39,010,000.00 byJune30,2019.
The Company signed the guarantee contract of maximum amount (No. 340101001120190300005) with Huangshan Road Branch of Hefei Science& Technology Rural Commercial Bank on January 23, 2019, in which the Company provided the maximum credit guarantee of RMB50,000,000.00 toAnhui Konka Tongchuang International Trade Co., Ltd. within two years from the day when thedebtor’s obligation fulfillment period stipulated in the debt contract signed betweenAnhuiTongchuang and Huangshan Road Branch of Hefei Science& Technology Rural Commercial Bank expired, and the guarantee mode was the joint liability guaranty.The credit line is mainly used to open and accept the letter of credit of Anhui Tongchuang International Trade Co., Ltd. and obtain the financing credit and other daily businesses from the bank. The guarantee amount has been used RMB20,185,000.00 by June30,2019.
The Company signed the guarantee contract of maximum amount (No. LPLZHGBZ 2019 No. 24105029) with Chuzhou Longpanlu Branch of Huishang Bank Co., Ltd. on24 June 2019, in which the Company provided credit guarantee of RMB30,000,000.00 to Anhui Tongchuang. The guarantee period is two years from the expiration of the debt performance period agreed in the relevant credit line agreements, and the guarantee mode was the joint liability guaranty. Theguarantee amount has been used RMB0byJune 30,2019.
The Company signed Comprehensive Credit Line Contract (No. HXSFZLZZD20180921001) and applied to Shenzhen Branch of Guangdong Huaxing Bank for comprehensive credit line of RMB1,000,000,000.00. The guarantee period is from September 29, 2018 to August 29, 2019. The Company has sub-licensed the comprehensive credit line RMB200,000,000.00 the subsidiary Konka Factoring (Shenzhen), and will assume the joint liability for guarantee. As ofJune30,2019,Konka Factoring used RMB0.
On March 13, 2019, the Company applied to Shenzhen Branch of China Minsheng Bank Co., Ltd. for a letter of guarantee of USD23,000,000.00, helping the subsidiary Hong Kong Konka Co., Ltd. to obtain the financing loan from the bank. The guarantee period is from March 13, 2019 to March 13, 2020.As of June 30, 2019, Hong Kong Konka obtained a loan ofUSD23,000,000 from Bank ofChina(Hong Kong)Co., Ltd.
KonkaGroupCo.,Ltd. InterimReport2019 OnJuly 11,2018, the Company applied toShenzhen Branch of HSBC Bank (China) Co., Ltd. for a letter of guarantee of USD15,000,000.00, helping the subsidiary Hong Kong Konka Co., Ltd. to obtain the financing loan from the bank. The guarantee period is fromAugust 7, 2018 to August 6, 2019. As of December 31, 2018, Hong Kong Konka obtained a loan of USD 15,000,000from HSBC Limited.
The Company signed the maximum amount guarantee contract (No. GGBZDDB1800000101834) withMa’anshan Branch of China Minsheng Bank, providing the joint and several liability guarantee for the debts under the comprehensive credit line agreement signed by Anhui Konka andMa’anshan Branch of China Minsheng Bank. The guarantee amount is RMB100,000,000.00, and the guarantee period is two years from the expiration of the debt settlement period under the main contract. As of June 30, 2019, the balance of the guarantee amount provided by the Company to Anhui Konka is RMB100,000,000.00. AnhuiKonka’ another shareholder, Chuzhou State-owned Assets Operation Co., Ltd. provided the counter-guarantee to the Company for22% of the guarantee amount.
On May 28, 2018, theCompany’s subsidiary Telecommunication Technology signed the guarantee contract (No.(23301)YSHBZ(180525)00001) with Lingang Branch of Yibin Commercial Bank, providing the joint and several liability guarantee for the debts under the entrusted loan contract jointly signed by its subsidiary Konka Intelligent Terminal, Gloport Group and Lingang Branch of Yibin Commercial Bank. The guarantee amount is RMB140,000,000.00, and the guarantee period is from May 28, 2018 to May 24, 2025. The guaranteed credit line is mainly used for obtaining the loan from the bank for the production and operation of Konka Intelligent Terminal. As of June 30, 2019, the guarantee amount RMB50,000,000.00 was used. Konka IntelligentTerminal’ another shareholder, Shenzhen Kangwei Investment Partnership (Limited Partnership) provided the counter-guarantee to TelecommunicationTechnology for49%oftheguarantee amount.
The Company signed the guarantee contract of maximum amount (No. YBXGZGB 2019 No.002) with Yibin Rural Commercial Bank Co., Ltd. on 18 March 2019, in which the Company provided credit guarantee of RMB40,000,000.00 to Sichuan Konka. The guarantee period is two years from the expiration of the debt settlement period under the Liquidity Revolving Loan Contract, and the guarantee mode was the joint liability guaranty.As of June 30, 2019, the guarantee amount RMB40,000,000.00 was used. SichuanKonka’ another shareholder, Shenzhen Kangwei Investment Partnership (Limited Partnership) provided the counter-guaranteetoTelecommunicationTechnology for49%oftheguarantee amount.
KonkaGroupCo.,Ltd. InterimReport2019 On November 21, 2018, the Company signed the guarantee contract (No.1510201811120052BZ-1) with Zhuhai Branch of Xiamen International Bank, providing the joint and several liability guarantee for the debts under the comprehensive credit line contract signed by the subsidiary Xingye Hongda and Zhuhai Branch of Xiamen International Bank. The guarantee amount is RMB58,000,000.00, and the guarantee period is two years from the expiration of the debt settlement period stipulated in the contract. As of June 30, 2019, Xingye Hongda used the guarantee amount RMB58,000,000.00. XingyeHongda’another shareholder, Hu Zehong provided the counter-guarantee to the Company for49%ofthe guarantee amount.
On October 16, 2018, theCompany’s subsidiary Electronics Technology signed the guarantee contract (No.IFELC18D29PS7Y-U-03) with Far Eastern Leasing, providing the guarantee for the fulfillment of rent payment and other obligations under the after-sales lease back contract signed by the subsidiary Xingye Hongda and Far Eastern Leasing. The guarantee amount is RMB10,000,000.00, and the guarantee period is from November 13, 2018 to November 13, 2020. As of June 30, 2019, the guarantee amount RMB9,500,000.00 was used. XingyeHongda’another shareholder, Hu Zehong provided the counter-guarantee to the Company for49%ofthe guarantee amount.
The Company signed the guarantee contract of maximum amount (No.BZFEB[2019] 010-002) with China Bohai Bank Co., Ltd. on April 19, 2019, in which the Company provided the maximum credit guarantee of RMB38,975,202.80 to XingDa HongYe within two years from the day when thedebtor’s obligation fulfillment period stipulated in the debt contract, and the guarantee mode was the joint liability guaranty. The credit line is mainly used to support the production and operation circulation. As of June 30, 2019, XingDa HongYe used the guarantee amount RMB38,975,202.8. XingDaHongYe’ another shareholder, Hu Zehong provided the counter-guarantee to the Company for49% of the guaranteeamount.
The Company signed the guarantee contract of maximum amount (No. XYYSBZ[Zhongshan]201905158001) with Zhongshan Branch of Industrial Bank Co., Ltd. on May 20, 2019, in which the Company provided the maximum credit guarantee of RMB10,000,000.00 to XingDa HongYe within two years from the day when thedebtor’s obligation fulfillment period stipulated in the Comprehensive Credit Line Agreement, and the guarantee mode was the joint liability guaranty.As of June 30, 2019, XingDa HongYe used the guarantee amount RMB10,000,000.00. XingDaHongYe’ another shareholder, Hu Zehong provided the counter-guaranteetotheCompany for49%ofthe guarantee amount.
KonkaGroupCo.,Ltd. InterimReport2019 OnAugust 29, 2018, the Company signed Issuing Guarantee/SLCAgreement with Shenzhen Branch of Bank of China for issuing the letter of guarantee to CTCE Group and providing the pledge guarantee for the capital contribution obligation of Econ Technology in the central urban upgrading project of Weifang Binhai Economic and Technological Development Zone. The guarantee amount is RMB31,350,000.00. Other shareholders of Econ Technology including Yantai Baijiangyuan Enterprise Management Center (Limited Partnership), Yantai Fengqingtai Investment Center (Limited Partnership), Yantai Qingrunyuan Enterprise Management Center (Limited Partnership) and Yantai Qingjiangchuan Enterprise Management Center (Limited Partnership) respectively provided the counter-guarantee to the Companyfor26.04%,11.58%,10.64%and0.74%ofthemaximum debt amount.
On April 23, 2019, The Company signed the guarantee contract of maximum amount (No. YKB 2019-032) with Yantai Branch of China Everbright Bank, in which the Company provided the maximum credit guarantee of RMB20,000,000.00 to Econ Technology within two years from the day when thedebtor’s obligation fulfillment period stipulated in the Comprehensive Credit Line Agreement, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, Econ Technology used the guarantee amount RMB10,000,000.00. Other shareholders of Econ Technology including Yantai Baijiangyuan Enterprise Management Center (Limited Partnership), Yantai Fengqingtai Investment Center (Limited Partnership), Yantai Qingrunyuan Enterprise Management Center (Limited Partnership) andYantai Qingjiangchuan Enterprise Management Center (Limited Partnership) respectively provided the counter-guarantee to the Company for26.04%,11.58%,10.64% and0.74%of themaximumdebt amount.
On May 13, 2019, the Company signed the maximum amount guarantee contract (No. 2019 220011FSZGBZ 2005) with Yantai Branch of Qilu Bank, in which the Company provided the maximum credit guarantee of RMB50,000,000.00 to Econ Technology within two years from the day when thedebtor’s obligation fulfillment period stipulated in the QiluBank’s Comprehensive Credit Line Contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019,Econ Technology used the guarantee amount RMB50,000,000.00. Other shareholders of Econ Technology including Yantai Baijiangyuan Enterprise Management Center (Limited Partnership), Yantai Fengqingtai Investment Center (Limited Partnership), Yantai Qingrunyuan Enterprise Management Center (Limited Partnership) and Yantai Qingjiangchuan Enterprise Management Center (Limited Partnership) respectively provided the counter-guarantee to the Company for26.04%,11.58%,10.64% and0.74% of the maximumdebt amount.
KonkaGroupCo.,Ltd. InterimReport2019 On December 4, 2018, the Company signed the maximum amount guarantee contract (No. XYGXGBZ 20180208) with Nanchang Branch of Industrial Bank, in which the Company provided the maximum credit guarantee of RMB100,000,000.00 to Jiangxi Konka within two years from the day when thedebtor’s obligation fulfillment period stipulated in the main credit line contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, Jiangxi Konka used the guarantee amount RMB100,000,000.00. JiangxiKonka’ another shareholder, Zhu Xinming provided the counter-guarantee to the Company for49% oftheguarantee amount.
On January 17, 2019, the Company signed the maximum amount guarantee contract (No.0516204_001) with Nanchang Honggutan District Branch of Bank of Beijing, in which the Company provided the maximum credit guarantee of RMB100,000,000.00 to Jiangxi Konka within two years from the day when thedebtor’s obligation fulfillment period stipulated in the main credit line contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, Jiangxi Konka used the guarantee amount RMB100,000,000.00. JiangxiKonka’ another shareholder, Zhu Xinming provided the counter-guarantee to the Companyfor49%of theguarantee amount.
On March 13, 2019, the Company signed the guarantee contract (No. GCL19C0057) with Haitong UniTrust International Leasing Co., Ltd., in which the Company provided the joint liability guarantee for the debts under the Financing Leasing-back Contract and all related attachments signed between Haitong UniTrust and theCompany’s subsidiary Jiangxi Konka, and the guaranteed amount was RMB119,605,820.00 within two years from the day when thedebtor’s obligation fulfillment period stipulated in the main credit line contract. As of June 30, 2019, the guarantee amount RMB109,000,000.00 was used. JiangxiKonka’ another shareholder, Zhu Xinming provided the counter-guarantee to the Company for49% of the guaranteeamount.
On February 28, 2019, the Company signed the maximum amount guarantee contract (No. (2019)XHYZBZ 010013) with Nanchang Branch of China CITIC Bank, in which the Company provided the maximum credit guarantee of RMB100,000,000.00 to the subsidiary Jiangxi Konka New Material Technology Co., Ltd. within three years from the day when thedebtor’s obligation fulfillment period stipulated in the main credit line contract, and the guarantee mode was the joint liability guaranty.As of June 30, 2019, Jiangxi Konka used the guarantee amount RMB100,000,000.00. JiangxiKonka’ another shareholder, Zhu Xinming provided thecounter-guarantee to theCompanyfor49% oftheguarantee amount.
On June 27, 2019, the Company signed the maximum amount guarantee contract (No.
KonkaGroupCo.,Ltd. InterimReport2019 36100520190009207) with Yongxiu County Branch ofAgricultural Bank of China, in which the Company provided the maximum credit guarantee of RMB60,000,000.00 to the subsidiary Jiangxi Konka New Material Technology Co., Ltd. within two years from the day when thedebtor’s obligation fulfillment period stipulated in the main credit line contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, the guarantee amount RMB25,000,000.00 was used. JiangxiKonka’ another shareholder, Zhu Xinming provided thecounter-guarantee to theCompanyfor49% oftheguarantee amount.
On June 19, 2019, the Company signed the maximum amount guarantee contract (No. 36100520190008787) withAnyi County Branch ofAgricultural Bank of China, in which the Company provided the maximum credit guarantee of RMB72,000,000.00 to the subsidiary JiangxiKonka’s subsidiary Xinfeng Microcrystalline within two years from the day when thedebtor’s obligation fulfillment period stipulated in the XinfengMicrocrystalline’s credit line contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, the guarantee amount RMB35,500,000.00 was used. JiangxiKonka’ another shareholder, Zhu Xinmingprovided thecounter-guarantee tothe Companyfor49%of theguaranteeamount. On June 26, 2019, the Company signed the maximum amount guarantee contract (No. GZ2019 BZ 025/031) with Guangxi Finance Lease Co., Ltd., in which the Company provided the joint liability guarantee for paying rents and other payments under the Finance Lease Contract signed between JiangxiKonka’s subsidiary Nano Crystallized Glass and Guangxi Finance Lease Co., Ltd., and the guaranteed amount was RMB100,000,000.00 (from June 26, 2019 to June 25, 2022) within two years from the day when the last rent payment obligation was fulfilled as stipulated in the main credit line contract.As of June 30, 2019, the guarantee amount RMB0.00 was used. JiangxiKonka’ another shareholder, Zhu Xinmingprovided thecounter-guarantee tothe Companyfor49%of theguaranteeamount. On February 2, 2019, the Company signed the guarantee contract (No. GDBZ KJ005) withMa’anshan Branch of China Minsheng Bank, in which the Company provided the joint liability guarantee for the debts under theM&A Loan Contract signed between theCompany’s subsidiary Electrical Appliance Technology andMa’anshan Branch of China Minsheng Bank, and the guaranteed amount was RMB130,000,000.00 within two years from the day when thedebtor’s obligation fulfillment period stipulated in theM&ALoan Contract, and the fulfillment period of the debt under the main contract was 5 years. As of June 30, 2019, the guarantee amount RMB130,000,000.00 was used. Electrical ApplianceTechnology’another shareholder, Chuzhou Hanshang ElectricalAppliance Co., Ltd. provided thecounter-guaranteeto theCompany for49%of theguarantee amount.
KonkaGroupCo.,Ltd. InterimReport2019 On February 20, 2019, the Company signed the maximum amount guarantee contract (No. GYHBZ[2019]0001) with Huizhou Branch of Bank of Guangzhou, in which the Company provided the maximum credit guarantee of RMB40,000,000.00 to the subsidiary Boluo Konka Precision from February 20, 2019 to February 20, 2021, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, the guarantee amount RMB17,791,100.00 was used.
The Company signed the credit line agreement (No. 2019ZZYFEXZ 1000056) with Shenzhen Futian Branch of Bank of China to apply the comprehensive credit line of RMB4,000,000,000.00 from April 18, 2019 to April 18, 2020. The Company transferred the credit line of RMB580,000,000.00 to its subsidiary Electronics Technology and would burden the joint liability for such transferred credit line. As of June 30, 2019, Electronics Technology used thecredit lineofRMB 39,347,378.19.
The Company signed the maximum amount guarantee contract (No. 5970120190527732001-01) with Guangdong Pilot Free Trade Zone Nansha Branch of Bank of Jiujiang, in which the Company provided the maximum credit guarantee of RMB50,000,000.00 to theCompany’s subsidiary KonkaPengrun within two years from the day when thedebtor’s obligation fulfillment period stipulated in the comprehensive credit line contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, the guarantee amount RMB0.00 was used. KonkaPengrun’ another shareholder, Guizhou Huajinrun Technology Group provided the counter-guarantee to the Company for49% of the guaranteeamount.
On December 27, 2016, theCompany’s subsidiary Econ Technology signed the guarantee contract (No. YKB 2016-167) with Yantai Branch of China Everbright Bank, in which the Company provided the guarantee for RushanYike, and the guaranteed amount was RMB 290 million from December 29, 2016 to December 28, 2026.As of June 30, 2019, the credit line RMB147,400,000.00was used.
On June 20, 2019, the Company signed the maximum amount guarantee contract (No. 2019 SYQHZBZ 0005) with Shenzhen Branch of China CITIC Bank, in which the Company provided the maximum credit guarantee of RMB50,000,000.00 to the subsidiary Electronics Technology within three years from the day when thedebtor’s obligation fulfillment period stipulated in the Financing Contract, and the guarantee mode was the joint liability guaranty. As ofJune30,2019,theguarantee amount RMB3,163,912.76 was used.
On December 19, 2016, theCompany’s subsidiary Jiangxi Konka signed the entrusted loan guarantee contract (No.NNYWBZDB10611201612190004 2016) with the Sales Department
KonkaGroupCo.,Ltd. InterimReport2019 of Nanchang Rural Commercial Bank to provide the guarantee for the debt of guarantee contract (No.NNYWBZDB106112016121920020004 2016) signed by Jiangxi XinxinJian’an Engineering Co., Ltd. and the Sales Department of Nanchang Rural Commercial Bank. The amount of the Financing Contract is RMB100,000,000.00. The guarantee period is two years from the expiration of the debt settlement period stipulated in the Financing Contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, the guaranteeamount was usedRMB100,000,000.00.
On December 19, 2016, theCompany’s subsidiary Jiangxi Konka signed the entrusted loan guarantee contract (No.NNYWBZDB106112016121900033 2016) with the Sales Department of Nanchang Rural Commercial Bank to provide the guarantee for the debt of guarantee contract (No.NNYWBZDB106112016121620020002 2016) signed by Jiangxi Zhongyi Decorative Material Co., Ltd. and the Sales Department of Nanchang Rural Commercial Bank. The amount of the Financing Contract is RMB100,000,000.00. The guarantee period is two years from the expiration of the debt settlement period stipulated in the Financing Contract, and the guarantee mode was the joint liability guaranty. As of June 30,2019,theguaranteeamount was used RMB100,000,000.00.
On December 16, 2016, theCompany’s subsidiary Jiangxi Konka signed the entrusted loan guarantee contract (No.NNYWBZDB10611201612160002 2016) with the Sales Department of Nanchang Rural Commercial Bank to provide the guarantee for the debt of guarantee contract (No.NNYWBZDB106112016121920020003 2016) signed by Jiangxi Shanshi Science and Technology Co., Ltd. and the Sales Department of Nanchang Rural Commercial Bank. The amount of the Financing Contract is RMB100,000,000.00. The guarantee period is two years from the expiration of the debt settlement period stipulated in the Financing Contract, and the guarantee mode was the joint liability guaranty. As of June 30, 2019, the guaranteeamount was usedRMB100,000,000.00.
XIII. EventsafterBalanceSheetDate
1.SignificantNon-adjusted Events
|||
|-|-|
|Content|Influencenumbertothefinancialpositionandoperatingresults|

KonkaGroupCo.,Ltd. InterimReport2019
|||
|-|-|
|CompletetheprivateplacementofcorporatebondsofRMB1.5billionon23July2019|IncreaseinbondspayableofRMB1.5billion|

XVI. OtherSignificant Events
1.The Company signed Guarantee Contract with Chuzhou Branch of Bank of China Co., Ltd. According to the contract, the Company provides the joint liability guarantee for thecreditor’s rights arising under the credit contract signed by Chuzhou Branch of Bank of China Co., Ltd. and and theCompany’s holding subsidiary Anhui Konka. The guarantee amount is RMB268 million, and the guarantee period is two years from the expiration of the debt performance period agreed inthemain contract.
2. On July 18, 2019, the Company signed Issuing Guarantee Agreement with Ningbo Bank Co., Ltd. to provide the guarantee for Hong Kong Konka to apply for the financing loan from Ping An Bank Co., Ltd. by overseas loan under domestic guarantee, providing the joint liability guaranty, and the amount guaranteed is USD13.5 million with one-year guarantee period.
3. On July 5, 2019, the Company submitted the Irrevocable Documentary CreditApplication for Issuance/Amendation/Cancellation to Shenzhen Branch of HSBC Bank (China) Co., Ltd., and applied to postpone the letter of guarantee of USD15,000,000.00 on July 11, 2018 for one year, namely the Company continued to provide the guarantee for applying for the financing loan of Hong Kong Konka to HSBC Bank (China) Co., Ltd. by overseas loan underdomesticguarantee.The guarantee amount is USD15,000,000.00.
4.TheCompany and the Chengzhong sub-branch ofChuzhouWandong Rural Commercial Bank Co.,Ltd. entered intoa GuaranteeContract.According to thecontract, theCompany would providejoint-liability guarantee for loans grantedtotheCompany’smajority-owned subsidiaryAnhui KonkaTongchuang ElectricalAppliances Co., Ltd. under the
comprehensivecredit linecontract entered intobetween the subsidiary andthefinancial institution.Theguaranteeamount would be RMB45 million with aterm ofthreeyears
startingfrom theexpiryof theloan repayment period as stated in thecomprehensive credit linecontract.
5.Loanbymandate:
(1) The Company, together with Shenzhen Overseas Chinese Town Co., Ltd. and China
CITIC Bank Co., Ltd. Shenzhen Branch, has concluded the Sub-agreement for Electronic
KonkaGroupCo.,Ltd. InterimReport2019 Loan by Mandate on Cash Management by CITIC Bank, numbered 811038022341. The amount of loan by mandate under theAgreement is RMB2,000,000,000.00, with a term from the date of entry into force of theAgreement toApril 12, 2023.The annual interest rate of the loan is4% to10%, subject to the confirmation of the borrower and the principal in the electronic loan by mandate on cash management. Subsequently, the three parties signed a Supplementary Agreement to the Sub-agreement for Electronic Loan by Mandate on Cash Management by CITIC Bank, numbered 811038022341-1, in which the amount of loan by mandate was changed to RMB3,000,000,000.00. As of June 30, 2019, Shenzhen Overseas Chinese Town Co., Ltd. actually provided the Company with a loan balance by mandate of RMB3,000,000,000.00through Shenzhen Branch ofChinaCITIC Bank.
(2) On September 14, 2017, the Company and OCT Group Co., Ltd. and Shenzhen OCT Branch of China Construction Bank jointly signed Entrusted Loan Contract (No. JSWD 2017141). The total entrusted loan amount is RMB5,000,000,000.00, and the loan term is from September 14, 2017 to December 31, 2018. The three parties signed the entrusted loan extension contract on December 14, 2018 and December 19, 2018, and the total amount subject to such extension is RMB1,276,560,000.00. Later the three parties signed the entrusted loan extension contract on April 18, 2019, and the total amount subject to such extension is RMB278,075,600.00. As of June 30, 2019, the balance of the entrusted loan provided by OCT Group Co., Ltd. to the Company via OCT Branch of China Construction Bank was RMB884,635,570.00.
(3) The OCT Group Co., Ltd. issued the entrusted loan to the Company with the amount of RMB221,924,430.00,and the loan term is fromApril 16,2019toApril 15,2020.
6.CreditGranting:
(1) The Company, Shenzhen Futian Branch of Bank of China and Shenzhen Konka Electronics Technology Co., Ltd. jointly signed the credit line agreement (No. ZZYFEXZD1000056 2019), applying for a credit line of RMB4,000,000,000.00 for issuing the acceptance bills, the non-financing guarantee and the trade financing. The Company provided RMB 1 billion bank acceptance bills for pledge, and agreed to provide the amount of RMB580,000,000.00 in the comprehensive credit line to the subsidiary Electronics Technology for use. The Company would be jointly and severally liable for the comprehensive credit. The credit line shall be valid from the date of the above credit line agreement toApril 18, 2020.As of June 30, 2019, a total of RMB1,777,958,859.04 was used from theabove credit line,and theremaining credit lineis RMB2,222,041,140.96.
(2) The Company signed the credit line extension contract with Shenzhen OCT Branch of
KonkaGroupCo.,Ltd. InterimReport2019 Industrial and Commercial Bank of China to apply for the maximum credit line of RMB1.9 billion and extend the credit line period to September 30, 2019. As of June 30, 2019, a total of RMB1692.3334 million was used from the above credit line, and the remaining credit line isRMB207.6666 million.
(3) The comprehensive credit line contract (No. PYSZZZDA596201711270001) signed on January 2, 2018 with Shenzhen Branch of PingAn Bank was expired on January 1, 2019.As of June 30, 2019, the Company has not extended the contract with Shenzhen Branch of Ping AnBank.
(4) The Company and Shenzhen Branch of China Minsheng Bank signed the comprehensive credit line contract (No. GSXZDJT18006), applying for the maximum credit line of RMB500,000,000.00 for the loan business based on RMB, bill of exchange acceptance, bill of exchange discount, guarantee; foreign currency loans, guarantees, letters of credit, financing guarantees, and buyer factoring guarantees in relation to the trade financing business. Konka Group Co., Ltd. agreed that its subsidiary, Anhui Konka Tongchuang could use the credit line under the comprehensive credit contract and provided the maximum guarantee for the amount used.It’s also agreed that the Company could use RMB350,000,000.00 from the above-mentioned credit line, of which, the financing guarantee was limited to USD50 million, and the guaranteed Hong Kong Konka Co., Ltd. for overseas procurement of raw materials;Anhui Konka Tongchuang could use the above credit line RMB30 million, and the Company provided the joint liability guarantee. The types of credit line are limited to the draft acceptance, the discount of bill, the redemption limit of commercial bills and the replacement of bills. Anhui Konka Electronic Co., Ltd. could use the above credit line RMB100 million.As of June 30, 2019, a total of RMB 425.3328 million was used from theabove credit line, and theremaining credit lineis RMB74.6672million. (5) The Company signed the comprehensive credit line contract with Shenzhen Branch of Bank of Communications, applying for the credit line of RMB500,000,000.00 for the RMB working fund loan, the opening of domestic letters of credit, the letter of guarantee, business limit of derivative products, the opening of the import letters of credit, and the import documentary bills, the financing of import outward remittance. The credit line is valid from June 14, 2019 to Jubne 12, 2019. As of June 30, 2019, a total of RMB250,000,000.00 was used from theabove credit line, and theremaining credit lineis RMB250,000,000.00.
(6) The Company signed the comprehensive credit line contract (No.SYQHZZD0006 2018) with Shenzhen Branch of China Citic Bank, applying for the comprehensive credit line of RMB400,000,000.00.The credit line period is from October 12, 2018 to July 27, 2019.As of
KonkaGroupCo.,Ltd. InterimReport2019 June30,2019, atotal ofRMB400,000,000.00 was used from theabove credit line.
(7) On November 15, 2018, the Company signed the comprehensive credit line contract (No.ZSYZSZD00009 (584600) 2018) with Shenzhen Branch of China Zheshang Bank, applying for the maximum credit line of RMB1,000,000,000.00. The credit line period is from November 15, 2018 to August 14, 2019. As of June 30, 2019, a total of RMB300,000,000.00 was used from the above credit line, and the remaining credit line is RMB700,000,000.00.
(8) The Company signed the Comprehensive Credit Line Contract (No. HXSFZLZZD20180921001) and applied to Shenzhen Branch of Guangdong Huaxing Bank for the comprehensive credit line of RMB1,000,000,000.00. The guarantee period is from September 21, 2018 to August 29, 2019. The Company has sub-licensed the comprehensive credit line RMB200,000,000.00 the subsidiary Konka Factoring (Shenzhen). As of June 30, 2019, a total of RMB798.4 million was used from the above credit line, and the remaining credit lineis RMB201.6 million.
(9) On May 10, 2018, the Company signed the comprehensive credit line contract (No.BSFZ(2018)9) and the supplementary agreement with Shenzhen Branch of China Bohai Bank, applying for the total credit line of RMB500,000,000.00. The credit line term is one year, and the credit line is used for the working capital loan, the trade bill acceptance, the opening of the import LC, the export LC documentary bills, the import documentary bills and the opening of domestic LC. As of June 30, 2019, a total of RMB366,660,000.00 was used from theabove credit line, and theremaining credit lineis RMB133,340,000.00.
(10) On November 26, 2018, the Company signed the credit line agreement (No.BY(2018)ZFJGBSXZD1126001) with Shenzhen Nanshan Baosheng Village Bank, applying for the credit line of RMB20,000,000.00, and the credit line period is from November 26, 2018 to November 26, 2019. The credit line is used for the opening of bank acceptance bills, the working capital loans and the discounting of commercial acceptance bills, etc. As of June 30, 2019, a total of RMB20,000,000.00 was used from the above credit line.
(11) On November 28, 2018, the Company signed the credit line contract (No. XYSHSXZ(2018)D0152) with Shenzhen Branch of China Industrial Bank, applying for the maximum credit line of RMB2,000,000,000.00, and the credit line could be used to (but not limited to) the working capital loan, the bank acceptance, the non-financing guarantee, and the letters of credit, etc. The credit line period is valid from November 28, 2018 to November 28, 2019. As of June 30, 2019, a total of RMB479.922 million was used from the above
KonkaGroupCo.,Ltd. InterimReport2019 credit line, and the remaining credit lineis RMB1520.078 million.
(12) The Company applied the credit line of RMB1,200,000,000.00 via Shenzhen OCT Branch ofAgricultural Bank of China which could be used for the loans, the bill acceptance, the notes discounted, the opening of L/C, the packing loan, the import bill advance, the export bill purchase and the opening of letters of guarantee. The credit line shall be valid from February 28, 2018 to February 28, 2019. As of June 30, 2019, a total of RMB1,060,000,000.00 was used from the above credit line, and the remaining credit line is RMB140,000,000.00.
(13) The Company applied the credit line no more than RMB480,000,000.00 via Shenzhen Branch of Ningbo Bank which could be used for the loans, the bill acceptance, the notes discounted, the opening of LC, the packing loan, the import bill advance, the export bill purchase and the opening of letters of guarantee. The credit line shall be valid from November 29, 2018 to November 29, 2019. As of June 30, 2019, a total of RMB 180,000,000.00was used from theabove credit line.
(14) The Company applied the credit line no more than RMB500,000,000.00 via Shenzhen Branch of Shanghai Pudong Development Bank which could be used for theshort-term loans, bank acceptance bill, the notes discounted, the opening of domestic L/C, and the import letter of credit. The expirtion of single deal is within one year.As of June 30, 2019, a total of RMB 497,800,000.00 was used from the above credit line, and the remaining credit line is RMB2,200,000.00.
(15) The Company applied the credit line no more than RMB110,000,000.00 via Shenzhen Nantou Branch of Hua Xia Bank which could be used for the loans, the bill acceptance, the notes discounted, and the opening of L/C, etc. As of June 30, 2019, a total of RMB100,000,000.00 was used from the above credit line, and the remaining credit line is RMB0.
(16)The Company applied the non-commitment combined revolving credit line no more than USD30,000,000.00 via Shenzhen Nantou Branch of HSBC which could be used for the financial standby guarantee, commercial financing, short-term loan business. As of June 30, 2019,atotal ofUSD29,509,786.85was used from the abovecredit line.
(17) The Company applied for the credit line of RMB2,200,000,000.00 via Shenzhen OCT Branch of China Construction Bank, of which, RMB940,000,000.00 was used as the comprehensive credit line, RMB200,000,000.00 the financing credit line, RMB500,000,000.00 the bonds, RMB40,000,000.00 the working capital loan, RMB20,000,000.00 the capital transaction credit line and RMB500,000,000.00 other
KonkaGroupCo.,Ltd. InterimReport2019 businesses. As of June 30, 2019, a total of RMB1056.89 million was used from the above credit line, and the remaining credit lineis RMB1143.11million.
7.Accounts receivable inGuangdong HuaxingBank:
The Company entered into the Domestic Factoring Business Contract with Guangdong Huaxing Bank Shenzhen Branch (Contract No. HXSZF20181130001). According to the Contact, Shenzhen Branch of Guangdong Huaxing Bank provides the Company with a factoring quota not exceeding RMB500 million, with a validity from November 30, 2018 to November 29, 2019. As of June 30, 2019, the factoring of accounts receivable of the Company inthe bank amounted to RMB486,000,000.00.
XV.Notes ofMain Items intheFinancialStatements oftheCompany
1.Notes Receivable
(1)Notes Receivable Listed byCategory
||
|-|
|Endingbalance|
|1,588,216,743.04|
|-|
|1,588,216,743.04|

 (2)Notes ReceivablePledged bytheCompany at thePeriod-end
Item Amount
Bankacceptancebill 1,162,583,020.53 Total 1,162,583,020.53 (3) Notes Receivable Endorsed by the Company or Discounted and not due on the Balance Sheet Date at thePeriod-end
||
|-|
|DerecognizedAmountattheperiod-end|
|30,000.00|
|30,000.00|

 (4)Notes Transferred toAccounts Receivable because Drawer of the Notes Failed to Execute theContract orAgreement at thePeriod-end
Item Amountofthenotestransferredtoaccountsreceivableattheperiod-end
Tradeacceptance 634,527,889.84
Total 634,527,889.84
KonkaGroupCo.,Ltd. InterimReport2019 2.Accounts Receivable
(1)Accounts Receivable Classified byAging
Aging Endingbalance
7,570,772,386.95 Within1year
1to2years
773,828,913.36 2to3years
2,153,499.92 3to4years 5,665,927.72 Over4years 167,507,512.11 Subtotal 8,519,928,240.06 Less:Baddebtprovision 253,216,175.40 Total 8,266,712,064.66 (2)Accounts Receivable Classified byBad DebtWithdrawal Method
Endingbalance
|||||
|-|-|-|-|
|Carryingamount||Baddebtprovision||
|Amount|Proportion(%）|Amount|Withdrawalproportion(%）|
|661,786,861.45|7.77|67,967,189.08|10.27|
|1,092,201,413.66|12.82|185,248,986.32|16.96|
|-|-|-|-|
|6,765,939,964.95|79.41|-|-|
|8,519,928,240.06|100.00|253,216,175.40|2.97|

(Continued)
Beginningbalance
Category
Carryingamount Baddebtprovision Carryingvalue
KonkaGroupCo.,Ltd. InterimReport2019 Baddebt Baddebt
Carryingamount Carryingamount
provision provision
|||||
|-|-|-|-|
|767,486,677.87|10.00|69,790,565.32|9.09|
|-|-|-|-|
|1,029,783,688.54|13.42|177,262,039.88|17.21|
|-|-|-|-|
|5,876,525,075.32|76.58|-|-|

Total 7,673,795,441.73 100.00 247,052,605.20 3.22 7,426,742,836.53 1 Accounts receivable with significant single amount for which bad debt provision separately accrued at theperiod-end
Endingbalance
Accountsreceivable(by
||||
|-|-|-|
|Carryingamount|Baddebtprovision|Withdrawalproportion(%)|
|300,027,889.84|30,002,788.98|10.00|
|200,000,000.00|10,000,000.00|5.00|
|84,500,000.00|4,225,000.00|5.00|
|50,000,000.00|5,000,000.00|10.00|
|4,580,000.00|1,374,000.00|30.00|
|1,656,628.91|1,656,628.91|100.00|
|1,430,290.00|430,290.00|30.08|
|19,592,052.70|15,278,481.19|77.98|
|661,786,861.45|67,967,189.08|10.27|

KonkaGroupCo.,Ltd. InterimReport2019② Among these groups, accounts receivable adopting aging method to withdraw bad debt provision
Endingbalance
Item
|||
|-|-|
|Accountsreceivable|Baddebtprovision|
|804,316,677.28|16,331,149.74|
|127,366,110.66|9,386,882.36|
|1,146,640.85|253,980.95|
|261,523.81|166,512.21|
|159,110,461.06|159,110,461.06|
|1,092,201,413.66|185,248,986.32|

③ Among these groups, accounts receivable adopting other method to withdraw bad debt provision
Endingbalance
Item
||||
|-|-|-|
|Carryingamount|Baddebtprovision||
|6,765,939,964.95|-||
|6,765,939,964.95|-|-|

(3)Particulars ofBad Debt Provision
|||||
|-|-|-|-|
|Beginningbalance|ChangesintheReportingPeriod|||
||Withdrawal|Reversalorrecovery|Write-off/otherdecrease|
|69,790,565.32|2,756,064.82 4,579,441.06|||
|-||||
|177,262,039.88|7,986,946.44|||
|-||||

KonkaGroupCo.,Ltd. InterimReport2019 Relatedparty
groupinthe
Company’s - -
combination
scope
||||||
|-|-|-|-|-|
|247,052,605.20|10,743,011.26|4,579,441.06|-|253,216,175.40|

 Of which, the significant recovered or reversed amount of bad debt provision in the current period.
||
|-|
|Reversalorrecovery|
|3,000,000.00|
|3,000,000.00|

(4)There isnoAccounts ReceivableActuallyVerified inthe Current Period
(5) Top 5Accounts receivable with insignificant single amount for which bad debt provision separately accrued
Total amount of Top 5 of ending balance of the accounts receivable collected according to arrears party was RMB8,386,297,751.93 accounting for98.43% of total ending balance of accounts receivable. Total ending balance of bad debt provision withdrawn was RMB30,002,788.98.
3.OtherReceivables
||
|-|
|Endingbalance|
|2,276,507.84|
|-|
|7,866,615,369.75|
|7,868,891,877.59|

(1)Interest Receivable
||
|-|
|Endingbalance|
|2,117,568.41|
|153,476.93|
|5,462.50|
|2,276,507.84|

(2)OtherReceivables
①OtherReceivables Disclosed byAging
KonkaGroupCo.,Ltd. InterimReport2019 Aging Endingbalance
6,932,521,149.32 Within1year
1to2years 513,921,855.55 2to3years 179,004,289.93 3to4years 85,105,749.00 4to5years 32,342,344.33 Over5years 313,666,650.76 Subtotal 8,056,562,038.89 Less:Baddebtprovision 189,946,669.14 Total 7,866,615,369.75②Particulars ofWithdrawal ofBad Debt Provision
|||||
|-|-|-|-|
|Firststage|Secondstage|Thirdstage||
|Expectedcreditlossofthenext12months|Expectedlossintheduration(creditimpairmentnotoccurred)|Expectedlossintheduration(creditimpairmentoccurred)||
|26,795,869.14||162,653,423.19||
|662,414.01||||
|||165,037.20||
|27,458,283.15|-|162,488,385.99|189,946,669.14|

 Endingbalance
|||||
|-|-|-|-|
|Carryingamount||Baddebtprovision||
|Amount|Proportion|Amount|Withdrawalproportion|

KonkaGroupCo.,Ltd. InterimReport2019(%) (%)
|||||
|-|-|-|-|
|173,251,217.33|2.15|162,488,385.99|93.79|
|168,118,322.40|2.09|26,711,552.07|15.89|
|74,673,108.117,640,519,391.058,056,562,038.89|0.93|746,731.08-189,946,669.14|1|
||94.83||2.36|
||100|||

 Beginningbalance
||||||
|-|-|-|-|-|
|Carryingamount||Baddebtprovision|||
|Amount|Proportion(%)|Amount|Withdrawalproportion(%)||
|173,765,477.33|2.54|162,653,423.19|93.61|11,112,054.14|
|||||-|
|123,303,853.71|1.8|26,478,680.53|21.47|96,825,173.17|
|29,986,121.11|0.44|317,188.61|1.06|29,668,932.50|
|6,522,463,391.246,849,518,843.39|95.22|-|-|6,522,463,391.24|
||100|189,449,292.33|2.77||

③Particulars of Bad Debt Provision
|||||
|-|-|-|-|
|Beginningbalance|ChangesintheReportingPeriod|||
||Withdrawal|Reversalorrecovery|Withdrawal|
|162,653,423.19|-|165,037.20|-|

KonkaGroupCo.,Ltd. InterimReport2019 esfor
which
expected
credit
loss
separatel
yaccrued
||||||
|-|-|-|-|-|
|26,478,680.53|232,871.54||-||
|317,188.61189,449,292.33|429,542.47||-||
||662,414.01|165,037.20|-|189,946,669.14|

④There isnoAccounts ReceivableActuallyVerified in theCurrent Period
⑤Top 5 Accounts receivable with insignificant single amount for which bad debt provisionseparately accrued
|||||
|-|-|-|-|
|Nature|Endingbalance|Aging|Proportiontoendingbalanceoftotalotherreceivables%|
|Related-partyborrowings|1,500,000,000.00|Within1year|18.62|
|Related-partyborrowings|1,135,134,400.00|Within1year|14.09|
|Related-partyborrowings|1,019,000,000.00|Within1year|12.65|
|Related-partyborrowings|580,000,000.00|Within1year,1to2years|7.20|
|Related-partyborrowings|471,614,259.00|Within1year|5.85|
|—|4,705,748,659.00|—|58.41|

⑥There
is no Other Receivables which Terminate the Recognition owning to the Transferofthe FinancialAssets.
⑦There
is no Amount of the Assets and Liabilities Formed by the Transfer and the Continues InvolvementofAccounts Receivable.
KonkaGroupCo.,Ltd. InterimReport2019
4.Long-term Equity Investment
(1)Category ofLong-term EquityInvestment
||||||
|-|-|-|-|-|
|Endingbalance|||||
|Carryingamount|Depreciationreserve|Carryingvalue|Carryingamount|Depreciationreserve|
|5,066,125,372.51|46,732,484.69|5,019,392,887.82|4,562,175,372.51|46,732,484.69|
|1,705,141,187.47|5,158,909.06|1,699,982,278.41|1,672,678,055.95|5,158,909.06|
|6,771,266,559.98|51,891,393.75|6,719,375,166.23|6,234,853,428.46|51,891,393.75|

 (2)Investment toSubsidiaries
||||||
|-|-|-|-|-|
|Beginningbalance|Increase|Decrease|Endingbalance|Depreciationreservewithdrawn|
|36,000,000.00|-|-|36,000,000.00|-|
|122,780,937.98|-|-|122,780,937.98|-|
|274,783,988.91|-|-|274,783,988.91|-|
|781,828.61|-|-|781,828.61|-|
|3,637,470.00|-|-|3,637,470.00|-|
|10,732,485.69|-|-|10,732,485.69|-|
|300,000,000.00|60,000,000.00|-|360,000,000.00|-|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Beginningbalance|Increase|Decrease|Endingbalance|Depreciationreservewithdrawn|
|31,500,000.00|-|-|31,500,000.00|-|
|48,750,000.00|-|-|48,750,000.00|-|
|300,000,000.00|-|-|300,000,000.00|-|
|10,000,000.00|-|-|10,000,000.00|-|
|481,702,612.22|-|-|481,702,612.22|-|
|200,000,000.00|-|-|200,000,000.00|-|
|7,200,000.00|-|7,200,000.00|-|-|
|5,832,000.00|-|-|5,832,000.00|-|
|10,200,000.00|-|-|10,200,000.00|-|
|19,322,040.00|-|-|19,322,040.00|-|
|12,000,000.00|-|-|12,000,000.00|-|
|8,602,009.10|-|-|8,602,009.10|-|
|40,000,000.00|-|40,000,000.00|-|-|
|2,550,000.00|-|-|2,550,000.00|-|
|25,500,000.00|-|-|25,500,000.00|-|
|15,300,000.00|-|-|15,300,000.00|-|
|40,000,000.00|-|-|40,000,000.00|-|
|689,680,000.00|-|-|689,680,000.00|-|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Beginningbalance|Increase|Decrease|Endingbalance|Depreciationreservewithdrawn|
|1,000,000,000.00|-|-|1,000,000,000.00|-|
|1,020,000.00|14,280,000.00|-|15,300,000.00|-|
|688,500,000.00|-|-|688,500,000.00|-|
|91,800,000.00|-|-|91,800,000.00|-|
|30,000,000.00|-|-|30,000,000.00|-|
|40,000,000.00|-|-|40,000,000.00|-|
|14,000,000.00|71,720,000.00|-|85,720,000.00|-|
|-|5,100,000.00|-|5,100,000.00|-|
|-|200,000,000.00|-|200,000,000.00|-|
|-|50,000.00|-|50,000.00|-|
|-|200,000,000.00|-|200,000,000.00|-|

KonkaGroupCo.,Ltd. InterimReport2019
||||||
|-|-|-|-|-|
|Beginningbalance|Increase|Decrease|Endingbalance|Depreciationreservewithdrawn|
|4,562,175,372.51|551,150,000.00|47,200,000.00|5,066,125,372.51|-|

 (3)Investment toJointVentures andAssociated Enterprises
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Beginningbalanceofdepreciationonreserve|||||
|||Additionalinvestment|Reducedinvestment|Gainsandlossesrecognizedundertheequitymethod|Adjustmentofothercomprehensiveincome|
|19,155,353.91|5,158,909.06|-|-|-10,458,637.68|-|
|222,210,835.18|-|-|-|1,615,602.55|-|
|624,845,604.93|-|-|-|13,279,493.50|-|
|78,409,903.14|-|-|-|-180,177.55|-|
|11,040,246.82|-|-|-|428,175.28|-|
|2,287,478.52|-|-|-|-152,488.28|-|
|10,617,873.79|-|-|-|-2,230,059.14|-|
|-|-|-|-|-|-|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Beginningbalanceofdepreciationonreserve|||||
|||Additionalinvestment|Reducedinvestment|Gainsandlossesrecognizedundertheequitymethod|Adjustmentofothercomprehensiveincome|
|-|-|-|-|-|-|
|3,592,514.06|-|-|3,592,514.06|-|-|
|146,846,610.14|-|-|-|-4,811,843.11|-|
|175,254,554.65|-|-|-|-|-|
|35,364,497.05|-|-|-|-|-|
|79,859,338.44|-|-|-|1,056,895.31|-|
|6,400,480.52|-|-|-|-239,050.00|-|
|4,522,509.33|-|-|-|-|-|
|252,270,255.47|-|-|-|5,620,617.83|-|
|-|-|-|-|-|-|
|-|-|-|-|-|-|

KonkaGroupCo.,Ltd. InterimReport2019
|||||||
|-|-|-|-|-|-|
|Beginningbalance|Beginningbalanceofdepreciationonreserve|||||
|||Additionalinvestment|Reducedinvestment|Gainsandlossesrecognizedundertheequitymethod|Adjustmentofothercomprehensiveincome|
|1,672,678,055.95|5,158,909.06|-|3,592,514.06|3,928,528.71|-|

 (Continued)
|||||
|-|-|-|-|
|Increase/decrease|||Endingbalance|
|Cashbonusorprofitsannouncedtoissue|Withdrawalofimpairmentprovision|Other||
|-|-|-|8,696,716.23|
|-|-|-|223,826,437.73|
|-|-|-|638,125,098.43|
|-|-|-|78,229,725.59|
|2,070,000.00|-|-|9,398,422.10|
|-|-|-|2,134,990.24|
|-|-|-|8,387,814.65|
|-|-|-|-|
|-|-|-|-|
|-|-|-|-|
|-|-|-|142,034,767.03|

KonkaGroupCo.,Ltd. InterimReport2019
|||||
|-|-|-|-|
|Increase/decrease|||Endingbalance|
|Cashbonusorprofitsannouncedtoissue|Withdrawalofimpairmentprovision|Other||
|-|-|-|175,254,554.65|
|-|-|-|35,364,497.05|
|-|-|-|80,916,233.75|
|-|-|-|6,161,430.52|
|-|-|-|4,522,509.33|
|-|-|-|257,890,873.30|
|-|-|16,926,689.50|16,926,689.50|
|||17,270,427.37|17,270,427.37|
|2,070,000.00|-|34,197,116.87|1,705,141,187.47|

KonkaGroupCo.,Ltd.
InterimReport2019
5.OperatingRevenue andCostof Sales
(1) Operating Revenue andCostof Sales
||||
|-|-|-|
|ReportingPeriod|||
|Operatingrevenue|Costofsales|Operatingrevenue|
|3,321,449,906.68|3,349,145,473.78|4,519,683,896.29|
|2,046,571,803.72|1,915,004,019.37|2,036,884,619.01|
|5,368,021,710.40|5,264,149,493.15|6,556,568,515.30|

 (2) Main Operations (Classified byIndustry)
||||
|-|-|-|
|ReportingPeriod|||
|Operatingrevenue|Costofsales|Operatingrevenue|
|3,321,449,906.68|3,349,145,473.78|4,519,683,896.29|
|3,321,449,906.68|3,349,145,473.78|4,519,683,896.29|

 (3) Main Operations (Classified byProduct)
||||
|-|-|-|
|ReportingPeriod|||
|Operatingrevenue|Costofsales|Operatingrevenue|
|3,090,957,961.84|3,121,985,874.83|4,224,714,468.42|
|42,860,456.45|37,086,020.47|100,943,929.96|
|187,631,488.39|190,073,578.48|194,025,497.91|
|3,321,449,906.68|3,349,145,473.78|4,519,683,896.29|

 (4) Main Operations (Classified byArea)
||||
|-|-|-|
|ReportingPeriod|||
|Operatingrevenue|Costofsales|Operatingrevenue|
|2,567,643,989.49|2,621,004,287.15|3,600,826,510.58|
|753,805,917.19|728,141,186.63|918,857,385.71|
|3,321,449,906.68|3,349,145,473.78|4,519,683,896.29|

KonkaGroupCo.,Ltd.
InterimReport2019
(5) Operating Revenue from theTop5Customers
||
|-|
|Totaloperatingrevenuefromthetop5customers|
|948,596,365.49|
|1,421,092,900.82|

 6.Investment Income
||
|-|
|ReportingPeriod|
|-|
|3,928,528.71|
|79,766,195.94|
|-10,285,883.02|
|-|
|-|
|-|
|-|
|-|
|1,225,905.15|
|111,340,992.10|
|-|
|185,975,738.88|

 XVI. Supplementary Materials
1.Items andAmounts ofNon-recurring ProfitorLoss
||
|-|
|Amount|
|570,011,162.17|

KonkaGroupCo.,Ltd.
InterimReport2019
||
|-|
|Amount|
|320,821,164.45|
|110,312,982.21|
|-13,291,264.69|
|928,721.16|

KonkaGroupCo.,Ltd.
InterimReport2019
||
|-|
|Amount|
|19,460,574.99|
|136,688,905.38|
|1,144,932,245.67|
|82,538,800.98|
|86,714,790.39|
|975,678,654.30|

Note: thenumber“+”amongthenon-recurringprofit orlossitemsrefers torevenueandincome, while“-”referredto lossesor expense.
The recognition of the non-recurring profit or loss items was executed according to the regulations of No.1 of the Information Disclosure Explanatory Notice of the Companies Public Offering Securities-Non- recurring Profit orLoss(ZJHAnnouncement[2008]No. 43).
Amount involved in the item that the Company classifies as an non-recurring gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Non-recurring Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item (including government subsidies recorded in the current profit or loss) is as follows:
||
|-|
|Amount|
|23,063,806.91|

2.Return onEquity and EarningsPerShare
ProfitasofReportingPeriod WeightedaverageROE EPS(Yuan/share)
(%)
KonkaGroupCo.,Ltd.
InterimReport2019
|||
|-|-|
||EPS-basic|
|4.25|0.1465|
|-7.51|-0.2587|

KonkaGroupCo.,Ltd.
InterimReport2019
Part XI Documents Available for Reference
I. The financial statements with the signatures and seals of theCompany’s legal representative, Chief Financial Officerand head ofthefinancial department;
II. The originals of all theCompany’s documents and announcements disclosed to the public via newspapers designated bythe CSRCin theReporting Period; and
III.Other relevant materials.
TheBoard of Directors Konka Group Co., Ltd. 6August 2019