Konka Group Co., Ltd. Annual Report 2023 KONKA GROUP CO., LTD. ANNUAL REPORT 2023 2024-18 April 2024 1 Konka Group Co., Ltd. Annual Report 2023 Part I Important Notes, Table of Contents and Definitions The Board of Directors (or the “Board” ), the Supervisory Committee as well as the directors, supervisors and senior management of Konka Group Co., Ltd. (hereinafter referred to as the “Company” ) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or material omissions therein. Zhou Bin, the Company’s legal representative, Li Chunlei, the Company’s Chief Financial Officer (CFO), and Ping Heng, the head of the Company’s financial department (equivalent to financial manager) hereby guarantee that the Financial Statements carried in this Report are factual, accurate and complete. All the Company’s directors have attended the Board meeting for the review of this Report and its summary. Any plans for the future or other forward-looking statements mentioned in this Report and its summary shall NOT be considered as absolute promises of the Company to investors. Therefore, investors are reminded to exercise caution when making investment decisions. The Company has no final dividend plan, either in the form of cash or stock. This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail. 2 Konka Group Co., Ltd. Annual Report 2023 Table of Contents Part I Important Notes, Table of Contents and Definitions........................................................... 2 Part II Corporate Information and Key Financial Information................................................... 9 Part III Management Discussion and Analysis..............................................................................14 Part IV Corporate Governance.......................................................................................................38 Part V Environmental and Social Responsibility.......................................................................... 66 Part VI Significant Events............................................................................................................... 79 Part VII Share Changes and Shareholder Information..............................................................108 Part VIII Preferred Shares............................................................................................................ 115 Part IX Corporate Bonds...............................................................................................................116 Part X Financial Statements..........................................................................................................124 3 Konka Group Co., Ltd. Annual Report 2023 Documents Available for Reference 1. The financial statements with the signatures and seals of the Company’s legal representative, Chief Financial Officer and head of the financial department; 2. The original copy of the Independent Auditor’s Report with the seal of the CPA firm and the signatures & seals of the certified public accountants; 3. The originals of all the Company’s documents and announcements disclosed to the public in the Reporting Period; 4. This Report and its summary with the signature of the Company’s legal representative and the seal of the Company; and 5. Other relevant materials. 4 Konka Group Co., Ltd. Annual Report 2023 Definitions Term Definition The “Company”, the “Group”, “Konka Group” or Konka Group Co., Ltd. and its consolidated subsidiaries, except where the “we” context otherwise requires Electronics Technology Shenzhen Konka Electronics Technology Co., Ltd. Anhui Zhilian Anhui Konka Zhilian E-Commerce Co., Ltd. Haimen Konka Nantong Haimen Konka Smart Technology Co., Ltd. Chengdu Konka Smart Chengdu Konka Smart Technology Co., Ltd. Chengdu Konka Electronic Chengdu Konka Electronic Co., Ltd. Nantong Hongdin Nantong Hongdin Smart Technology Co., Ltd. Shenzhen Kangcheng Shenzhen Kangcheng Technology Innovation and Development Co., Ltd. Xiaojia Technology Xiaojia Technology Co., Ltd. Liaoyang Kangshun Smart Liaoyang Kangshun Smart Technology Co., Ltd. Liaoyang Kangshun Renewable Liaoyang Kangshun Renewable Resources Co., Ltd. Nanjing Konka Nanjing Konka Electronics Co., Ltd. Chuzhou Konka Chuzhou Konka Precision Intelligent Manufacturing Technology Co., Ltd. XingDa HongYe GuangDong XingDa HongYe Electronic Co., Ltd. Konka Circuit Shenzhen Konka Circuit Co., Ltd. Konka Flexible Electronic Suining Konka Flexible Electronic Technology Co., Ltd. Konka Hongye Electronics Suining Konka Hongye Electronics Co., Ltd. Boluo Precision Boluo Konka Precision Technology Co., Ltd. Boluo Konka Boluo Konka PCB Co., Ltd. Anhui Tong giường Anhui Konka Tong giường Electrical Appliances Co., Ltd. Jiangsu Konka Smart Jiangsu Konka Smart Electrical Appliances Co., Ltd. Anhui Electrical Appliance Anhui Konka Electrical Appliance Technology Co., Ltd. Frestec Refrigeration Henan Frestec Refrigeration Appliance Co., Ltd. Frestec Electrical Appliances Henan Frestec Electrical Appliances Co., Ltd. Frestec Household Appliances Henan Frestec Household Appliances Co., Ltd. Frestec Smart Home Henan Frestec Smart Home Technology Co., Ltd. Konka Investment Shenzhen Konka Investment Holdings Co., Ltd. Yibin Konka Technology Park Yibin Konka Technology Park Operation Co., Ltd. Konka Capital Shenzhen Konka Capital Equity Investment Management Co., Ltd. Konka Suiyong Konka Suiyong Investment (Shenzhen) Co., Ltd. Sheng xing Industrial Shenzhen Konka Sheng xing Industrial Co., Ltd. Zhitong Technology Shenzhen Konka Zhitong Technology Co., Ltd. Konka Electronic Material Konka Electronic Material Technology (Shenzhen) Co., Ltd. Beijing Konka Electronic Beijing Konka Electronic Co., Ltd. Tianjin Konka Tianjin Konka Technology Co., Ltd. Suining Konka Industrial Park Suining Konka Industrial Park Development Co., Ltd. Suining Electronic Technological Innovation Suining Konka Electronic Technological Innovation Co., Ltd. Shanghai Konka Shanghai Konka Industrial Co., Ltd. Yantai Kangjin Yantai Kangjin Technology Development Co., Ltd. Mobile Interconnection Shenzhen Konka Mobile Interconnection Technology Co., Ltd. Sichuan Konka Sichuan Konka Smart Terminal Technology Co., Ltd 5 Konka Group Co., Ltd. Annual Report 2023 Yibin Smart Yibin Konka Smart Technology Co., Ltd. Shenzhen KONSEMI Shenzhen KONSEMI Co., Ltd. Chongqing Konka Chongqing Konka Technology Development Co., Ltd. Kowin Memory (Shenzhen) Kowin Memory Technology (Shenzhen) Co., Limited Kowin Memory (Hong Kong) Kowin Memory Technology (Hong Kong) Co., Limited Konka Xinyun Semiconductor Konka Xinyun Semiconductor Technology (Yancheng) Co., Ltd. Konka Cross-border (Hebei) Konka Cross-border (Hebei) Technology Development Co., Ltd. Shenzhen Nianhua Shenzhen Nianhua Enterprise Management Co., Ltd. Konka Huazhong Konka Huazhong (Hunan) Technology Co., Ltd. Wankaida Shenzhen Wankaida Science and Technology Co., Ltd. Shenzhen Chuangzhi Electrical Appliances Shenzhen Konka Chuangzhi Electrical Appliances Co., Ltd. Suining Jiarun Property Suining Jiarun Property Co., Ltd. Anhui Konka Anhui Konka Electronic Co., Ltd. Kangzhi Trade Anhui Kangzhi Trade Co., Ltd. Telecommunication Technology Shenzhen Konka Telecommunications Technology Co., Ltd. Konka Mobility Konka Mobility Co., Limited Dongguan Konka Dongguan Konka Electronic Co., Ltd. Suining Konka Smart Suining Konka Smart Technology Co., Ltd. Chongqing Optoelectronic Technology Chongqing Konka Optoelectronic Technology Co., Ltd. Yibin Kangrun Yibin Kangrun Environmental Technology Co., Ltd. Yibin Kangrun Medical Yibin Kangrun Medical Waste Centralized Treatment Co., Ltd. Yibin Kangrun Environmental Protection Yibin Kangrun Environmental Protection Power Generation Co., Ltd. Ningbo Khr Electric Appliance Ningbo Khr Electric Appliance Co., Ltd. Jiangxi Konka Jiangxi Konka New Material Technology Co., Ltd. Jiangxi High Transparent Substrate Jiangxi High Transparent Substrate Material Technology Co., Ltd. Jiangsu Konka Special Material Jiangsu Konka Special Material Technology Co., Ltd. Xinfeng Microcrystalline Jiangxi Xinfeng Microcrystalline Jade Co., Ltd. Konka Huanjia Konka Huanjia Environmental Technology Co., Ltd. Konka Huanjia (Henan) Konka Huanjia (Henan) Environmental Technology Co., Ltd. Shanxi Konka Intelligent Shanxi Konka Intelligent Appliance Co., Ltd. Pengrun Technology Shenzhen Konka Pengrun Technology & Industry Co., Ltd. Jiaxin Technology Jiaxin Technology Co., Ltd. Konka Ronghe Konka Ronghe Industrial Technology (Zhe gian g) Co., Ltd. Chongqing Kang xing rui Chongqing Kang xing rui Environmental Technology Co., Ltd. Konka Unifortune Shenzhen Konka Unifortune Technology Co., Ltd. Jiali International Jiali International (Hong Kong) Limited Kangjiatong Sichuan Kangjiatong Technology Co., Ltd. Kanghong (Yantai) Environmental Kanghong (Yantai) Environmental Technology Co., Ltd. Jiangkang (Shanghai) Technology Jiangkang (Shanghai) Technology Co., Ltd. Konka Intelligent Manufacturing Shenzhen Konka Intelligent Manufacturing Technology Co., Ltd. Hainan Konka Technology Hainan Konka Technology Co., Ltd. Konka Ventures Konka Ventures Development (Shenzhen) Co., Ltd. Yibin Konka Incubator Yibin Konka Incubator Management Co., Ltd. Yantai Konka Yantai Konka Healthcare Enterprise Service Co., Ltd. Chengdu Anren Chengdu Anren Konka Cultural and Creative Incubator Management Co., Ltd. Konka Enterprise Service Guiyang Konka Enterprise Service Co., Ltd. 6 Konka Group Co., Ltd. Annual Report 2023 Konka Eco-Development Shenzhen Konka Eco-Development Investment Co., Ltd. Konka Europe Konka (Europe) Co., Ltd. Hong Kong Konka Hong Kong Konka Limited Hongdin Trading Hongdin International Trading Limited Konka North America Konka North America LLC Kanghao Technology Kanghao Technology Co., Ltd. Hongdin Invest Hongdin Invest Development Limited Chain Kingdom Memory Technologies Chain Kingdom Memory Technologies Co., Limited Chain Kingdom Semiconductor (Shao xing ) Chain Kingdom Semiconductor (Shao xing ) Co., Ltd. Hongjet Hongjet (Hong Kong) Company Limited Chongqing Xinyuan Semiconductor Chongqing Xinyuan Semiconductor Co., Ltd. Anlu Konka Anlu Konka Industry Operation Service Co. Ltd. Kanghong Dongsheng Shenzhen Kanghong Dongsheng Investment Partnership (Limited Partnership) Guizhou Konka New Material Technology Guizhou Konka New Material Technology Co., Ltd. Guizhou Kanggui Energy Guizhou Kanggui Energy Co., Ltd. Guangdong Xinwei Guangdong Xinwei Semiconductor Co., Ltd. Guizhou Kanggui Material Technology Guizhou Kanggui Material Technology Co., Ltd. Nantong Kanghai Nantong Kanghai Technology Industry Development Co., Ltd. Chongqing Kangyiyun Chongqing Kangyiyun Business Operation Management Co., Ltd. Jiangxi Konka High-tech Park Jiangxi Konka High-tech Park Operation and Management Co., Ltd. Shangrao Konka Electronic Technology Shangrao Konka Electronic Technology Innovation Co., Ltd. Innovation Guizhou Konka New Energy Guizhou Konka New Energy Material Technology Co., Ltd. Zhe gian g Konka Electronic Zhe gian g Konka Electronics Co., Ltd. Zhe gian g Konka Technology Industry Zhe gian g Konka Technology Industry Development Co., Ltd. Sichuan Hongxinchen Sichuan Hongxinchen Real Estate Development Co., Ltd. Xi'an Konka Intelligent Xi'an Konka Intelligent Appliance Co., Ltd. Xi'an Konka Network Xi'an Konka Network Technology Co., Ltd. Xi'an Kanghong Technology Industry Xi'an Kanghong Technology Industry Development Co., Ltd. Xi'an Konka Intelligent Technology Xi'an Konka Intelligent Technology Development Co., Ltd. Anhui Konka Low Carbon Anhui Konka Low Carbon Technology Co., Ltd. Kanghong Xintong Shenzhen Kanghong Xintong Investment Partnership (Limited Partnership) Songyang Industry Operation Songyang Konka Smart Industry Operation Management Co., Ltd. Kangyan Technology Shenzhen Kangyan Technology Co., Ltd. Konka Photovoltaic Technology Konka Photovoltaic Technology Co., Ltd. Songyang Konka Intelligent Songyang Konka Intelligent Technology Development Co., Ltd. Konka North China Konka North China (Tianjin) Technology Co., Ltd. Zhongshan Kanghong Zhongshan Kanghong Electronic Technology Co., Ltd. Digital Technology Shenzhen Konka Digital Technology Development Co., Ltd. Chongqing Kang xing rui Automobile Recycling Chongqing Kang xing rui Scraped Automobile Recycling Co., Ltd. Kang xing rui Renewable Resources Chongqing Kang xing rui Renewable Resources Co., Ltd. Chongqing Fangbing Real Estate Chongqing Fangbing Real Estate Co., Ltd. 7 Konka Group Co., Ltd. Annual Report 2023 CSRC The China Securities Regulatory Commission SZSE The Shenzhen Stock Exchange CSRC Shenzhen The Shenzhen Bureau of the China Securities Regulatory Commission Expressed in the Chinese currency of RMB, expressed in tens of thousands of RMB, RMB’0,000, RMB’00,000,000 RMB, expressed in hundreds of millions of RMB 8 Konka Group Co., Ltd. Annual Report 2023 Part II Corporate Information and Key Financial Information I Corporate Information Stock name Konka Group-A, Konka Group-B Stock code 000016, 200016 Previous stock name (if any) N/A Stock exchange for stock listing Shenzhen Stock Exchange Company name in Chinese khang giai tập đoàn cổ phần công ty hữu hạn Abbr. Khang giai tập đoàn Company name in English (if any) KONKA GROUP CO.,LTD Abbr. (if any) KONKA GROUP Legal representative Zhou Bin 15-24/F, Konka R&D Center, 28 Keji South Twelfth Road, Science and Technology Park, Registered address Yuehai Street, Nanshan District, Shenzhen, Guangdong Province, China Zip code 518057 On 1 July 2015, due to the relocation of the Company Headquarters, the registered address has changed from OCT, Nanshan District, Shenzhen, Guangdong Province, China Past changes of registered address to 15-24/F, Konka R&D Center, 28 Keji South Twelfth Road, Science and Technology Park, Yuehai Street, Nanshan District, Shenzhen, Guangdong Province, China. 15-24/F, Konka R&D Center, 28 Keji South Twelfth Road, Science and Technology Park, Office address Yuehai Street, Nanshan District, Shenzhen, Guangdong Province, China Zip code 518057 Company website konka Email address szkonka@konka II Contact Information Board Secretary Securities Representative Name Wu Yongjun Miao Leiqiang Board Secretariat, 24/F, Konka R&D Center, 28 Board Secretariat, 24/F, Konka R&D Center, 28 Keji South Twelfth Road, Science and Technology Keji South Twelfth Road, Science and Technology Address Park, Yuehai Street, Nanshan District, Shenzhen, Park, Yuehai Street, Nanshan District, Shenzhen, Guangdong Province, China Guangdong Province, China Tel. 0755-26609138 0755-26609138 Fax 0755-26601139 0755-26601139 Email address szkonka@konka szkonka@konka III Media for Information Disclosure and Place where this Report Is Lodged Stock exchange website where this Securities Times, etc. Report is disclosed Media and website where this Report is http:// cninfo.cn/new/index disclosed Board Secretariat, 24/F, Konka R&D Center, 28 Keji South Twelfth Road, Science Place where this Report is lodged and Technology Park, Yuehai Street, Nanshan District, Shenzhen, Guangdong Province, China IV Change to Company Registered Information Unified social credit code 914403006188155783 Change to principal activity of the Company No change since going public (if any) Every change of controlling shareholder since No change incorporation (if any) 9 Konka Group Co., Ltd. Annual Report 2023 V Other Information The independent audit firm hired by the Company: Name Shinewing Certified Public Accountants LLP 9/F, Block A, Fuhua Mansion, No.8 Chaoyangmen North Street, Dongcheng District, Office address Beijing, China Accountants writing signatures Tang Qimei and Liu Lihong The independent sponsor hired by the Company to exercise constant supervision over the Company in the Reporting Period: □ Applicable √ Not applicable The independent financial advisor hired by the Company to exercise constant supervision over the Company in the Reporting Period: □ Applicable √ Not applicable VI Key Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. √ Yes □ No Reason for retrospective restatement: Change to accounting policies 2023-over-2022 2022 2021 2023 change (%) Before Restated Restated Before Restated Operating 17,849,331,429 29,607,854,255 29,607,854,2 49,106,513,669 49,106,513,669 -39.71% revenue (RMB).24.27 55.27.58.58 Net profit attributable to - - - the listed 2,163,790,053. 1,471,409,748. 1,470,466,80 -47.15% 905,352,997.68 905,470,314.84 company’s 17 21 6.68 shareholders (RMB) Net profit attributable to the listed company’s - - - - - shareholders 2,914,445,076. 2,665,550,383. 2,664,607,44 -9.38% 3,250,798,107. 3,250,680,790. before 42 07 1.54 49 33 exceptional gains and losses (RMB) Net cash generated - from/used in - 553,101,277.90 528,303,041. 204.69% 808,756,394.11 808,756,394.11 operating 528,303,041.83 83 activities (RMB) Basic earnings per share -0.8986 -0.6111 -0.6107 -47.14% 0.3760 0.3760 (RMB/share) Diluted -0.8986 -0.6111 -0.6107 -47.14% 0.3760 0.3760 earnings per 10 Konka Group Co., Ltd. Annual Report 2023 share (RMB/share) Weighted average return -32.58% -17.58% -17.57% -15.01% 10.33% 10.33% on equity (%) Change of 31 December 2023 over 31 December 31 December 2022 31 December 2021 31 December 2022 2023 (%) Before Restated Restated Before Restated Total assets 35,824,818,212 38,016,368,073 38,023,319,6 39,874,520, 39,882,535,977 -5.78% (RMB).66.05 93.08 771.26.55 Equity attributable to the listed 5,644,401,184. 7,640,399,721. 7,641,459,98 9,095,278,4 9,095,395,753. -26.13% company’s 65 99 0.68 36.41 57 shareholders (RMB) Reason for change to accounting policies and correction of accounting errors: On 30 November 2022, the Ministry of Finance issued Interpretation No. 16 for the Accounting Standards for Business Enterprises, which stipulates the “accounting treatments for deferred income taxes associated with assets and liabilities arising from a single transaction to which the initial recognition exemption does not apply”, effective for the Company as of 1 January 2023. For lease liabilities and right-of-use assets recognised at the beginning of the earliest period of financial statement presentation in which the provision is first implemented that give rise to taxable temporary differences and deductible temporary differences as a result of a single transaction to which the provision applies, the Company has adjusted the cumulative effect to retained earnings at the beginning of the earliest period of financial statement presentation and other relevant financial statement items in accordance with the said provision and Accounting Standard No. 18 for Business Enterprises—Income Tax. Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and losses was negative for the last three accounting years, and the latest independent auditor’s report indicated that there was uncertainty about the Company’s ability to continue as a going concern. □ Yes √ No Indicate by tick mark whether the lower of the net profit attributable to the listed company’s shareholders before and after exceptional gains and losses was negative. √ Yes □ No Item 2023 2022 Note Operating revenue (RMB) 17,849,331,429.24 29,607,854,255.27 11 Konka Group Co., Ltd. Annual Report 2023 Scrap sales revenue, utilities revenue, lease Deductions from operating 712,619,709.55 823,347,409.73 revenue, material sales revenue and other revenue (RMB) revenue irrelevant to the principal operations Operating revenue net of 17,136,711,719.69 28,784,506,845.54 deductions (RMB) VII Accounting Data Differences under China’s Accounting Standards for Business Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting Standards 1. Net Profit and Equity under CAS and IFRS □ Applicable √ Not applicable No difference for the Reporting Period. 2. Net Profit and Equity under CAS and Foreign Accounting Standards □ Applicable √ Not applicable No difference for the Reporting Period. VIII Key Financial Information by Quarter Unit: RMB Q1 Q2 Q3 Q4 Operating revenue 4,600,647,851.61 5,871,413,320.33 4,404,631,998.81 2,972,638,258.49 Net profit attributable to the listed company’s 152,513,923.41 -345,754,155.74 -521,630,694.97 -1,448,919,125.87 shareholders Net profit attributable to the listed company’s shareholders before -521,453,718.40 -370,140,652.01 -486,155,733.41 -1,536,694,972.60 exceptional gains and losses Net cash generated from/used in operating -1,182,725,927.02 981,175,821.78 -120,891,719.52 875,543,102.66 activities Indicate by tick mark whether any of the quarterly financial data in the table above or their summations differs materially from what have been disclosed in the Company’s quarterly or interim reports. □ Yes √ No IX Exceptional Gains and Losses √ Applicable □ Not applicable Unit: RMB Item 2023 2022 2021 Note Gain or loss on disposal of non-current assets (inclusive of impairment allowance write- 198,866,019.16 755,498,679.55 4,047,094,117.70 offs) Government subsidies charged to current 264,798,178.16 916,334,616.72 1,352,377,548.16 12 Konka Group Co., Ltd. Annual Report 2023 profit or loss (exclusive of government subsidies consistently given in the Company’s ordinary course of business at fixed quotas or amounts as per governmental policies or standards) Gain or loss on debt restructuring -5,378,929.04 19,777.25 Gain or loss on fair-value changes in financial assets and liabilities held by a non- financial enterprise, as well as on disposal of -88,236,451.43 -17,595,638.89 67,789,442.65 financial assets and liabilities (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) Reversed portions of impairment allowances for receivables which are tested individually 3,055,800.22 32,624,581.58 for impairment Gain or loss on loan entrustments 118,808,006.95 119,233,091.33 80,625,356.41 Non-operating income and expense other -64,433,346.64 -97,161,898.46 48,615,769.37 than the above Other gains and losses that meet the 571,315,980.43 -1,907,936.23 definition of exceptional gain/loss Less: Income tax effects 239,431,992.39 299,999,504.47 1,190,629,946.56 Non-controlling interests effects (net of 14,087,171.21 209,414,363.46 247,833,023.58 tax) Total 750,655,023.25 1,194,140,634.86 4,156,151,105.17 -- Particulars about other gains and losses that meet the definition of exceptional gain/loss: √ Applicable □ Not applicable Amount involved Item Reason (RMB) As the Company disposed of certain interests in subordinate joint stock company and Chutian ceased to have significant influence on the joint stock company, the measurement of its Dragon 574,780,174.75 investment was adjusted in the current period from a long-term equity investment (under Co., Ltd. the equity method) to a held-for-trading financial asset, which incurred an exceptional gain. Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items: √ Applicable □ Not applicable Amount involved Item Reason (RMB) Tax rebates Government subsidies given in the Company’s ordinary course of business at fixed 5,819,853.78 on software quotas or amounts as per government’s uniform standards 13 Konka Group Co., Ltd. Annual Report 2023 Part III Management Discussion and Analysis I Industry Overview for the Reporting Period Currently, the Company's major businesses include consumer electronics, memory chip trading and semiconductor businesses. The relevant industries are described below: (I) Consumer electronics industry In the color TV industry, recent years have seen China's market enter an era of stock adjustment. According to statistics from All View Cloud (AVC), the retail volume of China's color TV market in 2023 was 31.42 million units, up 13.6% year on year, and the retail value was RMB109.8 billion, down 2.3% year on year. With the continuous development of future display technologies represented by Mini LED and Micro LED, as well as the intelligent upgrade of various electronic products driven by the Internet of Things (IoT), big data, cloud computing, and artificial intelligence, the development of new TV categories accelerated in 2023. The penetration rate of new display technologies, high refresh rates, and large-size mid-to-high-end products has been increasing. Regarding new display technologies, Mini LED technology entered a phase of rapid popularization in 2023. AVC's data show that the retail penetration rate of China's color TV Mini LED market was 9.8% in 2023, up 5.4% from 2022. In terms of high refresh rates, as living standards continue to improve, consumers' pursuit of quality viewing and gaming experiences has become increasingly high. Consequently, TVs with high refresh rates have seen a continuous rise in sales due to their ability to provide superior image quality. AVC's statistics indicate that the retail penetration rate of color TVs with refresh rates above 120Hz in China's market reached 31.9% in 2023, up 16.4% from 2022. Regarding large sizes, against the backdrop of consumer upgrades, the trend of larger screen sizes in China's color TV market continues, with a steady increase in the sales share of products 75 inches and above. AVC's statistics show that the retail penetration rate of 75- inch products in China's color TV market was 19.9% in 2023, up 6.4% from 2022. In terms of the white goods industry, the pace of product upgrades accelerated in 2023, with enhancements in basic features and performance. Simultaneously, their products are more beautiful, healthy and integrated. This structural upgrade in products has driven the growth in sales of high- quality home appliances. Regarding refrigerators, according to AVC's statistics, in 2023, the refrigerator market reported a retail sales value of RMB133.3 billion, up 7.0% year on year, with a retail sales volume of 38.31 million units, up 1.5% year on year. The share of mid- to high-end products continued to rise. For washing machines, AVC's statistics indicate that the retail sales in the domestic market amounted to RMB93.4 billion in 2023, up 5.8% year on year, with a retail volume of 40.05 million units, up 3.4% year on year. Aside from the rise in sales volume, the average selling price of washing machines also saw a steady increase. Regarding air conditioners, 14 Konka Group Co., Ltd. Annual Report 2023 AVC's statistics show that China's domestic air conditioner sales reached 156.946 million units in 2023, up 10.4% year on year. This includes 90.541 million units sold domestically, up 12.9% year on year, and exports totaling 66.405 million units, up 7.3% year on year, indicating an increase in both domestic and export scales. (II) Semiconductor industry The semiconductor industry is a strategic, fundamental and leading industry that supports economic and social development and safeguards national security. Driven by the development of 5G, artificial intelligence, the IoT, and intelligentialization, the semiconductor industry is expected to usher in a new wave of growth cycles. Among them, semiconductor storage is the largest subdivision in the semiconductor industry in recent years. At present, South Korean companies represented by Samsung and Hynix are in the leading position in the field of semiconductor storage. China has also accelerated in boosting the production capacity of semiconductor storage in recent years. It is expected that the self-sufficiency rate will continue to increase. Micro LED is the prevailing trend and development direction of future display technology. The industrial chain is divided into four main links: upstream chip manufacturing and mass transfer, midstream panel manufacturing, and downstream complete machine application. The Micro LED has wide industrial application and a broad market. II Principal Activity of the Company in the Reporting Period (I) The consumer electronics business This division primarily comprises the multimedia sub-division and the white goods sub-division, with details as follows: 1. The multimedia business The Company's multimedia business faces the global market, mainly including domestic color TV business and export color TV business. The domestic sales of the Company’s colour TVs are realized mainly through B2B (Business-to- Business) and B2C (Business-to-Consumer), with its branch companies, business departments and after-sales maintenance points operating across the country. And the Company profits from the margins between the costs and the selling prices of its colour TVs. As for selling its colour TVs abroad, the Company mainly relies on B2B. Its colour TVs are sold to Asia Pacific, Middle East, Central & South America, East Europe, etc. And operating profit source is also the differences between the costs and the selling prices of its colour TVs. 2. The white goods business 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 15 Konka Group Co., Ltd. Annual Report 2023 goods. The Company strengthened the foundation of our white goods brands through the acquisition of the Frestec brand. Meanwhile, the establishment of the Ningbo A/C production base as a joint venture has helped the Company build its own A/C manufacturing capability. The weakness in the front-loading washing machine technology has been overcome by the acquisition of Beko (Front- loading Washing Machine) China Factory. In addition, the Company went on a new path of exploring the dishwasher world by setting up Xi’an Smart Appliances Park. The Company also optimized the internal R&D, production, procurement, sales, and services processes, integrated the external channel resources to enable channel sharing between the upstream procurement processes and downstream sales processes, and improved the product sales structure and competitiveness of the white goods business. (II) The memory chip trading and semiconductor business Currently, the Company is engaged in memory chips, optoelectronics, etc. with respect to the semi- conductor business. In memory chips, the Company primarily engages in packaging and testing of memory chip products. In optoelectronics, the Company primarily develops Micro LED-related products. The Company's memory chip trading business mainly focuses on the memory chips involved in the Company's traditional main business. The operating profit comes from the price difference between upstream procurement and downstream sales. This business is able to facilitate the development of the semiconductor business by helping accumulate customer resources for the semiconductor and chip business, provide sales channels, and achieve accurate matching of market demand, with a shortened product development period and a lower risk of mismatching of R&D and market demand. (III) The environment protection and new materials business In this business, renewable resources are collected, sorted, processed, distributed and sold. III Core Competitiveness Analysis The Company’s core competitiveness lies in its manufacturing ability, R&D ability, brand, marketing network and human resources. In terms of manufacturing ability, the Company has carried out intelligent upgrading of manufacturing bases in Anhui, Dongguan, Suining, Xinxiang, etc., of which the Anhui Konka plant has been awarded the title of "National Intelligent Manufacturing Demonstration Factory", with an advanced intelligent manufacturing level in the industry. It has developed a three-tier R&D system of “Research institute+key labs+product development centers”, established artificial intelligence internet of things comprehensive laboratory and 5G Ultra HD laboratory with major universities or scientific research institutions, established academician workstation, and built a technology research alliance matching the industrial layout, with nearly 100 core technologies and about 1,500 R&D talents. The Company has introduced around 100 experts on the micro LED project. In terms of brand, the Company continues to 16 Konka Group Co., Ltd. Annual Report 2023 promote brand strategy construction, system construction, image construction and cultural construction, focuses on improving the scientific and international image of the enterprise, strengthens the brand status, has a certain brand awareness and reputation in the consumer group, and has good brand credit in banks and other financing channels. In terms of marketing channels, the Company innovates channel reform, cooperates online and offline for win-win results, and strives for development at home and abroad. Regarding offline channels, the Company has 47 branches, more than 100 offices, and more than 3,000 after-sales service shops across China, and the marketing and service network is all over the country; as for online channels, the Company has settled in Tmall, JD, Suning, VIPshop, Pinduoduo and other mainstream e-commerce platforms to innovate and develop live e-commerce business, and seek a new growth pole for business development; overseas channel, the company The Company's business covers Latin America, Europe, Asia Pacific and other countries and regions, with a sound marketing network. In terms of human resources, the Company boasts a leadership team of many years of management and industry experience, as well as a high quality execution team. IV Core Business Analysis 1. Overview In 2023, the Company adopted a new development framework of “One Axis, Two Wheels and Three Growth Drivers”. It fully implemented lean management, and carried out campaigns such as asset revitalisation, cost control and efficiency improvement, legal person reduction and cost reduction and profit increase. Also, the Company has restructured its business layout through organisational restructuring and optimisation of business entities, and optimised its resources to focus on its two main businesses of consumer electronics and semiconductors, laying the foundation for its next step of high-quality development. For 2023, the Company recorded operating revenue of RMB17.849 billion, down 39.71% year on year; a net profit attributable to its shareholders of RMB-2.164 billion, representing a year-on-year drop of 47.15%; and net cash generated from operating activities of RMB553 million, a turnaround from loss to profit. As a result of the following reasons, the Company saw a year-on-year decline in operating revenue and a relatively large loss in 2023. (1) Main causes of operating revenue decline in 2023 In 2023, the Company focused on its core business, and promoted business restructuring by proactively optimizing part of industry trade and environmental protection business segments which failed to empower the main business and had low gross margin. As a result, the Company experienced a certain degree of decline in operating revenue. 17 Konka Group Co., Ltd. Annual Report 2023 (2) Main causes of net loss in 2023 ① In 2023, the Company incurred a certain degree of loss in its colour TV business due to factors such as product strategy adjustments and ongoing supply chain fluctuations. In terms of domestic sales of colour TVs, the Company made systematic adjustments to its product planning and sales strategies during the current period. The mid-to-high-end new products X6/M6/R7 were mainly launched in the second half of 2023. However, the introduction and sales ramp-up cycle of these new TV products lagged behind, failing to fully compensate for the clearance losses resulting from the discontinuation of old models. This, to some extent, affected the sales scale and total profit of the Company's domestic TV business. Regarding TV exports and OEM business, due to the continuous fluctuation in upstream supply chain costs in 2023, the gross margin of orders delivered by the Company's TV exports and OEM business was relatively low. Although strategic adjustments helped to gradually improve the operational quality in the second half of 2023, the gross margin for the full year 2023 was still unable to fully cover rigid expenses. ② In 2023, in accordance with the Company's development strategy and considering the macroeconomic environment, the Company upheld the principle of "industrial park service aligned with core business strategy" and continued to reduce its business in industrial parks. There were virtually no new large-scale industrial park projects in 2023, resulting in a decrease in related income compared to the previous year. ③ In 2023, although the Company's semiconductor business made certain achievements in several key industrial chain technologies, it remained in the early stages of industrialization. R&D investment continued to grow, but scale and efficiency in output were not achieved, affecting the overall operating profit of the Company. ④ In 2023, based on the principle of prudence, the Company made a provision for asset impairment of approximately RMB1,017 million in accordance with accounting policies and estimates, resulting in a decrease in profit. ⑤ In 2023, the Company strategically optimized non-core operations such as industry trade and environmental protection, resulting in a narrowing of profit sources and a decrease in related income. (3) Key tasks for 2023 ① The business structure and organizational system continued to be optimized Under the new development strategy, the Company focused on two core businesses, i.e. consumer electronics and semiconductors, and actively promoted the adjustment of its business structure and the optimization of its organizational system. In terms of business adjustments, the Company optimized non-core businesses by gradually withdrawing from industry trade and environmental protection segments to focus resources on its two core businesses - consumer electronics and semiconductors. 18 Konka Group Co., Ltd. Annual Report 2023 In terms of organizational optimization, the Company continued to refine its organizational structure by further improving the personnel remuneration system, and implementing full-scope control over the total workforce to effectively enhance personnel efficiency. This ensured that the organizational system operated more efficiently. ② Lean management yielded tangible results. In 2023, the Company implemented the lean management concept in various aspects of research, production, supply, sales, and services, as well as the entire chain of investment, financing, management, and withdrawal. With a focus on "people, positions, and tasks", it implemented meticulous management down to the smallest detail, and intensified in-depth efficiency improvement, cost control, and fee reduction efforts, to optimize and enhance operating cash flow. Including: As for cost control and efficiency improvement, the Company adhered to the goal of "maximizing cost efficiency" and continued to strengthen process control around aspects such as "performance drivers, classified guidance, lean management, key improvement areas, and integrated governance". Regarding cost reduction and profit increase, the Company implemented precise cost reduction in procurement. On one hand, it focused on the prices of bulk materials and supply-demand trends, enhancing its ability to analyze and make decisions regarding raw material markets. On the other hand, it strengthened procurement process control to ensure that market fluctuations were aligned with changes in supply and demand structures. ③ Product capabilities were effectively enhanced. In 2023, the Company was guided by market demand, led by technological innovation, and positioned products as the core to coordinate research, production, supply, sales, and services. It maintained the mindset of creating fine products, and adopted a quality-oriented approach to make, refine and optimize products and enhance the ability to generate gross profit from products. Regarding colour TVs, the Company completed the upgrading and iteration of domestically sold products, with all 12 models of the four major new product series entering mass production as planned. Exported products focused on promoting the level of product intelligence, with Google Android system platform certification completed. In 2023, the gross profit of the colour TV business increased by 17.72% YoY. For white goods, the Company launched new products including 500-liter side-by-side refrigerators, the Zhencai series washing machines, and the Zhinyin series air conditioners. The Frestec 509-liter freestanding refrigerators with five-layer sterilization technology entered mass production, while dishwasher production entered the small batch testing phase. In 2023, the gross profit of the white goods business grew by 15.00% YoY. In terms of PCB, the Company successfully achieved significant improvements in the number of layers, inner and outer layer circuitry, and circuit production capabilities. The proportion of high- 19 Konka Group Co., Ltd. Annual Report 2023 end products with multi-layer boards and metal-based boards significantly surged, facilitating the completion of product lines and propelling the brand towards a more upscale positioning. In 2023, the gross profit of the PCB business increased by 54.46% YoY. ④ Manufacturing capabilities significantly strengthened In 2023, the Company adhered to professional and differentiated development, strengthened lean manufacturing, built a solid clientele, and solidified manufacturing capabilities. In terms of colour TVs, the Company completed the construction of a production line for 120-inch ultra-large panels. The production efficiency of the Ankang Green Smart Plant improved significantly year-on-year, and the Company also expanded its customer base to include several strategic clients. Regarding white goods, the Company's per capita efficiency for white goods products continued to improve. It established preliminary manufacturing capabilities for dishwashers and systematically advanced the Frestec refrigerator and freezer new smart plant projects. This initiative enabled the Company to build comprehensive manufacturing capabilities for "refrigerators, washing machines, air conditioners and kitchen appliances" across all product categories, and it successfully onboarded several strategic clients. For PCB, the Company's new smart plant in Suining officially commenced production, diversifying the product lines of multi-layer boards and HDI (high- density interconnect) boards. It also expanded its customer base to include leading clients in new energy, automotive electronics, Mini LED optoelectronic displays, and other fields. The proportion of mid-to-high-end products saw a significant increase. ⑤ International business steadily advanced On one hand, the Company drove scalable development through differentiated strategies. The Company strengthened its differentiated operations in the colour TV business. In the Middle East and Africa markets, it focused on local manufacturing in Egypt. In the European market, it was driven by a combination of "best-selling + high-end" products. In emerging markets, it leveraged smart TV products as a key strategy. In 2023, the Company achieved rapid growth in TV export revenue. In the white goods business, the Company fully utilized the advantages of the China- Europe Railway Express, vigorously expanding into the European market. It focused on core clients and cultivated major clients in regions such as Russia, Germany, and West Africa. Overseas business revenue experienced remarkable year-on-year growth. On the other hand, it constructed its own brand pattern through refined operations. In the colour TV business, by implementing hierarchical customer management and optimizing resource allocation, the Company stabilized its presence in traditional markets such as the Middle East, Latin America, and Europe. Simultaneously, it expanded into eight blank areas including Australia, Algeria, and Kazakhstan. Moreover, it assisted clients in Brazil, Japan, Russia, Gulf countries, and others in exporting customized local marketing solutions. As a result, the export revenue of its proprietary brand business witnessed significant growth in 2023. 20 Konka Group Co., Ltd. Annual Report 2023 ⑥Technological breakthroughs and industrial transformation were rapidly implemented The Company insists on building an original technology innovation hub, focusing on advancing core technological breakthroughs and industrial transformation. In terms of core technological breakthroughs, the Company has achieved certain results in areas such as hybrid mass transfer, mass repair, chip miniaturization, and Mini LED direct view display. Chongqing Konka Optoelectronic Technology Co., Ltd. was included in the list of "Science and Technology Reform Demonstration Enterprises" by the SASAC, and its application to the SASAC for "Sailing Enterprises" has entered the defense stage. In terms of industrial transformation, the Micro LED chip and mass transfer segments have achieved sample delivery and small-scale sales to multiple clients. The Mini LED direct view display segment focused on cost reduction, sales to major clients, and collaboration with engineering clients, and developed more than ten customers in total. 2. Revenue and Cost Analysis (1) Breakdown of Operating Revenue Unit: RMB 2023 2022 As % of total As % of total Change (%) Operating revenue operating revenue Operating revenue operating revenue (%) (%) Total 17,849,331,429.24 100% 29,607,854,255.27 100% -39.71% By operating division Consumer electronics 10,204,905,315.64 57.17% 10,871,843,067.02 36.72% -6.13% Memory chip trading and 3,397,161,542.60 19.03% 10,411,179,055.37 35.16% -67.37% semiconductor Environment protec tion and new 1,145,732,124.31 6.42% 1,548,557,255.52 5.23% -26.01% materials Other 3,101,532,446.69 17.38% 6,776,274,877.36 22.89% -54.23% By product category Color TVs 4,708,450,488.99 26.38% 5,023,097,945.06 16.97% -6.26% White goods 4,257,423,386.71 23.85% 3,929,504,730.97 13.27% 8.35% Memory chip trading and 3,397,161,542.60 19.03% 10,411,179,055.37 35.16% -67.37% semiconductor Environment protec tion and new 1,145,732,124.31 6.42% 1,548,557,255.52 5.23% -26.01% materials PCB 476,456,155.62 2.67% 663,849,487.53 2.24% -28.23% Other 3,864,107,731.01 21.65% 8,031,665,780.82 27.13% -51.89% By operating segment Domestic 10,716,944,822.00 60.04% 14,845,908,414.38 50.14% -27.81% Overseas 7,132,386,607.24 39.96% 14,761,945,840.89 49.86% -51.68% By marketing model Direct sales 5,565,516,534.04 31.18% 5,773,701,603.23 19.50% -3.61% Distribution 12,283,814,895.20 68.82% 23,834,152,652.04 80.50% -48.46% 21 Konka Group Co., Ltd. Annual Report 2023 (2) Operating Division, Product Category, Operating Segment or Marketing Model Contributing over 10% of Operating Revenue or Operating Profit √ Applicable □ Not applicable Unit: RMB YoY change in YoY change in Gross profit YoY change in Operating revenue Cost of sales operating revenue gross profit margin margin cost of sales (%) (%) (%) By operating division Consumer 10,204,905,315 9,670,394,039. 5.24% -6.13% -7.61% 1.51% electronics.64 66 Memory chip 3,397,161,542. 3,433,148,164. trading and -1.06% -67.37% -66.94% -1.31% semiconductor 60 76 By product category 4,708,450,488. 4,756,604,973. Color TVs -1.02% -6.26% -6.40% 0.14% 99 05 4,257,423,386. 3,790,414,584. White goods 10.97% 8.35% 7.58% 0.63% 71 40 Memory chip 3,397,161,542. 3,433,148,164. trading and -1.06% -67.37% -66.94% -1.31% semiconductor 60 76 By operating segment 10,716,944,822 10,283,636,801 Domestic 4.04% -27.81% -27.87% 0.07% .00.86 7,132,386,607. 6,865,399,948. Overseas 3.74% -51.68% -52.76% 2.18% 24 64 By marketing model 5,565,516,534. 5,405,059,203. Direct sales 2.88% -3.61% -2.40% -1.20% 04 62 12,283,814,895 11,743,977,546 Distribution 4.39% -48.46% -49.49% 1.94% .20.88 Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period: □ Applicable √ Not applicable (3) Whether Revenue from Physical Sales Is Higher than Service Revenue √ Yes □ No Operating division Item Unit 2023 2022 Change (%) Unit sales 0,000 units 1,070 1,028 4.09% Consumer electronics Output 0,000 units 1,080 983 9.87% Inventory 0,000 units 81 73 10.96% Any over 30% YoY movements in the data above and why: □ Applicable √ Not applicable (4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting Period □ Applicable √ Not applicable (5) Breakdown of Cost of Sales By product category Unit: RMB 2023 2022 Product category Item Change (%) Cost of sales As % of total cost of Cost of sales As % of total cost 22 Konka Group Co., Ltd. Annual Report 2023 sales (%) of sales (%) 4,756,604,973. Color TVs Color TVs 27.74% 5,081,621,150.13 17.65% -6.40% 05 3,790,414,584. White goods White goods 22.10% 3,523,413,567.24 12.24% 7.58% 40 Memory chip Memory chip trading and 3,433,148,164. trading and 20.02% 10,384,753,139.40 36.07% -66.94% semiconductor semiconducto 76 r Environment Environment prote protection 1,134,022,493. ction and new 6.61% 1,511,874,387.74 5.25% -24.99% materials and new 39 materials 420,480,569.6 PCB PCB 2.45% 627,609,981.96 2.18% -33.00% 0 3,614,365,965. Other Other 21.08% 7,659,366,167.41 26.61% -52.81% 30 Note: Cost of sales changed accordingly with operating revenue. (6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period √ Yes □ No Registered capital The Company’s Date of Name of subsidiary Reason for change (RMB) interest (%) change Anhui Konka Zhilian E-Commerce Co., 5,000 0.00 2023-6-1 Ltd. De-registered Jiangsu Konka Special Material 10,000 0.00 2023-10-8 Technology Co., Ltd. Sichuan Hongxinchen Real Estate 2,500 49.00 2023-2-27 Development Co., Ltd. Yibin Kangrun Environmental 7,600 0.00 2023-11-27 Protection Power Generation Co., Ltd. Chongqing Kang xing rui Environmental 5,000 0.00 2023-12-5 Technology Co., Ltd. Zhongshan Kanghong Electronic 7,000 0.00 2023-12-19 Technology Co., Ltd. Guizhou Kanggui Energy Co., Ltd. 10,000 0.00 2023-12-25 Equity transfer Kanghong (Yantai) Environmental 3,000 0.00 2023-12-28 Technology Co., Ltd. Chongqing Fangbing Real Estate Co., 2,000 49.00 2023-2-27 Ltd. Chongqing Kang xing rui Renewable 6,000 0.00 2023-12-5 Resources Co., Ltd. Chongqing Kang xing rui Scraped 10,000 0.00 2023-12-5 Automobile Recycling Co., Ltd. (7) Major Changes to the Business Scope or Product or Service Range in the Reporting Period □ Applicable √ Not applicable (8) Major Customers and Suppliers Major customers: Total sales to top five customers (RMB) 5,029,937,059.53 Total sales to top five customers as % of total sales of the 28.17% Reporting Period (%) Total sales to related parties among top five customers as % of 0.00% total sales of the Reporting Period (%) 23 Konka Group Co., Ltd. Annual Report 2023 Top five customers: Sales revenue contributed for As % of total sales revenue No. Customer the Reporting Period (RMB) (%) 1 Customer A 1,935,159,220.70 10.84% 2 Customer B 1,217,950,598.75 6.82% 3 Customer C 694,693,692.94 3.89% 4 Customer D 689,729,963.97 3.86% 5 Customer E 492,403,583.17 2.76% Total -- 5,029,937,059.53 28.17% Other information about major customers: √ Applicable □ Not applicable None of the top five customers were related parties of the Company. And none of the Company’s directors, supervisors, executive officers, core technicians, over 5% shareholders, actual controller or any other related parties held equity interests in the major customers, directly or indirectly. Major suppliers: Total purchases from top five suppliers (RMB) 5,074,672,418.49 Total purchases from top five suppliers as % of total purchases 31.96% of the Reporting Period (%) Total purchases from related parties among top five suppliers 0.00% as % of total purchases of the Reporting Period (%) Top five suppliers: Purchase in the Reporting No. Supplier As % of total purchases (%) Period (RMB) 1 Supplier A 1,718,825,666.93 10.82% 2 Supplier B 1,268,987,192.38 7.99% 3 Supplier C 704,760,127.46 4.44% 4 Supplier D 698,255,754.27 4.40% 5 Supplier E 683,843,677.44 4.31% Total -- 5,074,672,418.49 31.96% Other information about major suppliers: √ Applicable □ Not applicable None of the top five customers were related parties of the Company. And none of the Company’s directors, supervisors, executive officers, core technicians, over 5% shareholders, actual controller or any other related parties held equity interests in the major customers, directly or indirectly. 3. Expense Unit: RMB Reason for any 2023 2022 Change (%) significant change Selling expense 1,145,124,848.96 1,240,144,735.77 -7.66% Administrative expense 807,527,910.20 949,647,590.28 -14.97% Finance costs 562,016,110.24 522,423,743.18 7.58% R&D expense 497,993,759.86 543,882,024.89 -8.44% 4. R&D Investments √ Applicable □ Not applicable 24 Konka Group Co., Ltd. Annual Report 2023 Names of Expected impact on the main R&D Project objectives Project progress Objectives to be achieved Company projects To drive the development and To further improve the breakthrough of key hardware facilities for core technologies in mass transfer and repair the Micro LED display To achieve expected The project has passed based on the existing Laser direct industry, along with benchmarks in terms of Micro its mid-term inspection, mass transfer transfer the industrialization LED display mass transfer and wafer testing trials to foundation, enhancing technology and localization of yield, efficiency, the number verify compliance are the Company's development equipment, and to of chips repaired in a single underway. capabilities in the field strengthen the attempt, and yield after repair. of Micro LED laser upstream and mass transfer and repair downstream supply technology. chain of the Micro LED industry. To verify the production process Optical performance stability of red light meets the requirements To meet commercial display Mini chip chips in epitaxy and for commercial displays. The production capacity optical performance performance chip manufacturing, Plans are underway to of the epitaxy and chip requirements and initiate mass improvement and to introduce them start mass production lines is validated. production. into commercial following the completion display production in of the final setup. small batches. To enhance chip Development of green Micro LED To meet performance and To meet the needs of performance to meet and blue light chips has chip yield targets, continuously internal and external the needs of internal been completed, with performance improving the input-output customers and proceed and external ongoing efforts to further enhancement ratio of red light chips. to industrialization. customers. enhancements. To meet the demand for metal substrates in Development new energy and energy Entering the high-end of metal Samples have been storage fields, broaden To start small-scale production product market will press-fit submitted for customer the product line, and in 2024. enhance the Company's hybrid testing. enhance the competitiveness. substrates Company's technological level. Preliminary market To enhance the To independently Development research and material Company's technology develop projects that of 5G metal preparation have been To enter industrialization by reserves, improve R&D meet the requirements substrate completed, and the 2025. capabilities, and for high-tech products project is currently in the maintain a technological enterprise certification. trial production stage. lead. Technology development Research and has been completed, industrializati To achieve precise applied to products, and on of precise To improve the preservation of mass production has fresh-keeping To complete the development Company's refrigerator different food been realized. The and of new technology and realize precise fresh-keeping materials within the technology project won intelligent its application in a series of technology level and refrigerator, enhancing the third prize of Science storage products. enhance product the preservation effect and Technology Progress technology competitiveness. of the refrigerator. Award of China National for household Light Industry Council in refrigerators 2023. To achieve the Development development of high- of high- performance Mini Technology-to-product To enhance the Related products have been performance LED backlight conversion has been competitiveness of the launched in batches. Mini LED technology and commercialized. Company's products. backlight productize the technology. 25 Konka Group Co., Ltd. Annual Report 2023 Details about R&D personnel: 2023 2022 Change (%) Number of R&D personnel 1,479 1,537 -3.77% R&D personnel as % of total 10.48% 10.59% -0.11% employees Educational background of R&D personnel Bachelor’s degree and below 1,349 1,398 -3.51% Master’s degree 124 131 -5.34% Doctoral degree 6 8 -25.00% Age structure of R&D personnel Below 30 695 716 -2.93% 30-40 551 573 -3.84% Over 40 233 248 -6.05% Details about R&D investments: 2023 2022 Change (%) R&D investments (RMB) 497,993,759.86 543,882,024.89 -8.44% R&D investments as % of operating 2.79% 1.84% 0.95% revenue Capitalized R&D investments (RMB) 0.00 0.00 0.00 Capitalized R&D investments as % of 0.00% 0.00% 0.00% total R&D investments Reason for any significant change in R&D personnel composition and the impact: □ Applicable √ Not applicable Reasons for any significant YoY change in the percentage of R&D investments in operating revenue: □ Applicable √ Not applicable Reason for any sharp variation in the percentage of capitalized R&D investments and rationale: □ Applicable √ Not applicable 5. Cash Flows Unit: RMB Item 2023 2022 Change (%) Subtotal of cash generated from 18,703,945,979.20 33,467,042,610.14 -44.11% operating activities Subtotal of cash used in 18,150,844,701.30 33,995,345,651.97 -46.61% operating activities Net cash generated from/used in 553,101,277.90 -528,303,041.83 204.69% operating activities Subtotal of cash generated from 2,481,589,961.16 5,299,153,383.77 -53.17% investing activities Subtotal of cash used in 2,013,333,188.02 4,972,918,573.56 -59.51% investing activities Net cash generated from/used in 468,256,773.14 326,234,810.21 43.53% investing activities Subtotal of cash generated from 11,690,214,069.69 21,373,734,199.02 -45.31% financing activities Subtotal of cash used in 12,521,398,097.40 21,706,022,136.76 -42.31% financing activities Net cash generated from/used in -831,184,027.71 -332,287,937.74 -150.14% financing activities Net increase in cash and cash 212,872,338.65 -506,435,208.13 142.03% equivalents Explanation of why any of the data above varies significantly: √ Applicable □ Not applicable 26 Konka Group Co., Ltd. Annual Report 2023 Net cash generated from/used in operating activities changed primarily because with decreased inventories, cash payments for goods and services as a percentage of cash inflows from sales declined year on year. Net cash generated from/used in investing activities changed primarily because cash payments for construction and acquisition of fixed assets, intangible assets and other long-term assets declined year on year. Net cash generated from/used in financing activities changed primarily because borrowings declined year on year. Reason for any big difference between the net operating cash flow and the net profit for this Reporting Period: □ Applicable √ Not applicable V Analysis of Non-Core Businesses √ Applicable □ Not applicable Unit: RMB Amount As % of total profit Source/Reason Recurrent or not Change to the measurement method Return on investment 675,405,221.53 -24.86% Not of investee company in the current period Change to the Gain/loss on changes measurement method -97,937,910.89 3.60% Not in fair value of investee company in the current period Impairments of Asset impairments -1,017,195,966.23 37.43% receivables and Not inventories Increased gains that were not directly Non-operating income 26,263,072.49 -0.97% related to the Not Company’s routine operations Non-operating expense 156,685,855.03 -5.77% Not VI Analysis of Assets and Liabilities 1. Significant Changes in Asset Composition Unit: RMB 31 December 2023 1 January 2023 Change in Reason for any As % of total As % of total percentage significant Amount Amount (%) change assets assets Monetary 6,506,359,577. 18.16% 5,988,095,490.71 15.75% 2.41% assets 02 Accounts 1,726,545,973. 4.82% 2,036,734,836.22 5.36% -0.54% receivable 08 Contract assets 2,190,385.93 0.01% 0.00% 0.01% 3,249,897,700. Inventories 9.07% 4,409,767,756.22 11.60% -2.53% 98 Investment 1,470,226,723. 4.10% 802,407,844.60 2.11% 1.99% property 87 Long-term 5,566,483,863. equity 15.54% 6,351,232,955.58 16.70% -1.16% 29 investments Fixed assets 5,218,297,745. 14.57% 4,114,029,693.38 10.82% 3.75% 27 Konka Group Co., Ltd. Annual Report 2023 16 Construction in 860,899,498.68 2.40% 1,990,361,377.07 5.23% -2.83% progress Right-of-use 197,054,423.17 0.55% 50,019,838.68 0.13% 0.42% assets Short-term 6,390,592,056. 17.84% 7,579,559,304.97 19.93% -2.09% borrowings 27 Contract 527,975,160.12 1.47% 601,044,358.35 1.58% -0.11% liabilities Long-term 7,779,150,079. 21.71% 8,906,931,402.89 23.42% -1.71% borrowings 88 Lease liabilities 160,218,818.92 0.45% 36,586,639.16 0.10% 0.35% Indicate whether overseas assets account for a larger proportion of the total assets. □ Applicable √ Not applicable 2. Assets and Liabilities at Fair Value √ Applicable □ Not applicable Unit: RMB Gain/loss on Cumulative Impairment fair-value fair-value Purchased in Sold in the Beginning allowance for Other Ending Item changes in changes the Reporting Reporting amount the Reporting changes amount the Reporting charged to Period Period Period Period equity Financial assets 1. Trading financial assets - 974,897,430. 169,648,766. 469,636,700. (derivative 0.00 335,611,963. 42 00 78 financial 64 assets excluded) 2. Derivative financial 0.00 assets 3. Investments in other debt obligations 4. Investments 23,841,337.1 23,841,337.1 in other 6 6 equity instruments 5. Other non- current 2,639,662,27 22,348,324.9 653,534,200. 2,009,676,39 1,200,000.00 financial 3.32 5 27 8.00 assets Subtotal of - 2,663,503,61 22,348,324.9 976,097,430. 823,182,966. 2,503,154,43 financial 335,611,963. 0.00 0.00 0.48 5 42 27 5.94 assets 64 Investment property 0.00 Productive living assets 0.00 237,187,228. 173,396,326. 237,187,228. 173,396,326. Other 0.00 0.00 0.00 0.00 44 14 44 14 - Total of the 2,900,690,83 22,348,324.9 1,149,493,75 1,060,370,19 2,676,550,76 335,611,963. 0.00 0.00 above 8.92 5 6.56 4.71 2.08 64 Financial liabilities 0.00 0.00 Particulars about other changes: Gain/loss on fair- Impairment Purchased in Sold in the Beginning value changes in Cumulative fair-value allowance for Other Item the Reporting Reporting Ending amount amount the Reporting changes charged to equity the Reporting changes Period Period Period Period Receivables 237,187,228.44 173,396,326.14 237,187,228.44 173,396,326.14 28 Konka Group Co., Ltd. Annual Report 2023 financing Significant changes to the measurement attributes of the major assets in the Reporting Period: □ Yes √ No 3. Restricted Asset Rights as at the Period-End Ending carrying value Item Reason for restriction (RMB) Of which, RMB384,011,696.60 is security deposits put in pledge for loans or the Monetary assets 831,575,227.47 issuance of bank acceptance bills; RMB226,611,500.00 is term deposits that cannot be withdrawn in advance; and RMB220,952,030.87 is restricted for other reasons. Accounts 2,474,071.67 In pledge for loan receivable Notes receivable 209,288,446.67 In pledge for the issuance of bank acceptance bill Affected by the small shareholder case of the subsidiary, the book value of the sealed inventory is 49679547.48 yuan, and the company has not waived its claims; Inventories 599,475,045.44 The year-end book value of inventory used for mortgage loans is 549795497.96 yuan. Investment property 585,984,804.04 As collateral for loan Fixed assets 1,689,602,310.18 As collateral for finance lease, loan, and former shareholder guarantee Intangible assets 620,594,057.60 As collateral for finance lease, loan, and former shareholder guarantee Construction in 40,629,663.23 As collateral for loan progress Total 4,579,623,626.30 VII Investments Made 1. Total Investment Amount √ Applicable □ Not applicable Amount of the same period of last year Amount of Reporting Period (RMB) Change (%) (RMB) 1,483,759,951.04 4,490,904,118.80 -66.96% 2. Major Equity Investments Made in the Reporting Period □ Applicable √ Not applicable 3. Major Non-Equity Investments Ongoing in the Reporting Period √ Applicable □ Not applicable Unit: RMB Reason Accumu for not Accumula lative meeting Fixed Input tive actual Estimate realized the Investm assets amount input Pro Disclosu Disclosu Industry Capital d revenue schedule Item ent investm in the amount as gres re date re index involved resources revenue s as of and method ent or Reportin of the s (if any) (if any) s the expecte not g Period period- period- d end end revenue s Donggu an Konka Electron Self- and Self- 52,763,2 597,772,7 2017- Intellige Yes ic bank loan- N/A build 58.07 64.56 03-11 nt industry funded http://w Industri ww.cnin al Park fo.c Suining n/new/in Konka dex Electron Electron ic Self- 77,521,8 560,926,9 Self- 2018- Yes ic N/A Technol build 92.09 43.76 funded 10-17 industry ogy Industri al Park 29 Konka Group Co., Ltd. Annual Report 2023 Chongqi ng Konka Semicon Electron Self- and Self- 68,261,5 659,258,1 2019- ductor Yes ic bank loan- N/A build 42.5 40.16 06-14 Photoele industry funded ctric Industri al Park Frestec Electron Self- and Refriger Self- 211,647, 459,445,5 2020- Yes ic bank loan- N/A ation build 231.52 61.07 07-21 industry funded Park Xi’an Konka Smart Electron Self- and Applian Self- 416,624, 596,286,6 2021- Yes ic bank loan- N/A ces build 730.62 66.50 02-10 industry funded Headqu arters Project 826,818, 2,873,690 Total -- -- -- -- -- -- -- -- 654.80,076.05 Note: Dongguan Konka Intelligent Industrial Park has been completed and accepted. Xi’an Konka Smart Appliances Headquarters Project has been put into use. Suining Konka Electronic Technology Industrial Park and Frestec Refrigeration Park are under construction. Regarding the Semiconductor Photoelectric Research Institute of Chongqing Konka Semiconductor Photoelectric Industrial Park, the infrastructure of the first phase has been completed and accepted, with the remaining infrastructure construction ongoing. 4. Financial Investments (1) Securities Investments √ Applicable □ Not applicable Unit: RMB Acc Accu Sou ount Beg Gain/Loss mulat Co Purch rce Initial ing inni on fair ed fair Sold Gain/l Endin Variet de Name ased of mea ng value value in oss in g y of of of investme in Accoun inve sure carr changes chang Repor Repor carryi securi sec securit nt cost Repor ting title stm men ying in es ting ting ng ty uri y ting ent t valu Reporting charg Period Period value ty Period fund met e Period ed to s hod equity Fair Dome Chutia Self 00 valu - 974,89 169,64 - 469,63 Trading stic/F n 974,897,4 - 30 e 0.00 335,611,963 0.00 7,430.4 8,766.0 46,591, 6,700.7 financia oreign Drago 30.42 fund 40 met.64 2 0 299.41 8 l assets stock n ed hod Other securities investments held at the 0.00 -- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -- -- period-end - 974,89 169,64 - 469,63 974,897,4 Total -- 0.00 335,611,963 0.00 7,430.4 8,766.0 46,591, 6,700.7 -- -- 30.42 .64 2 0 299.41 8 Disclosure date of announcement on board’s 4 April 2023 approving securities investment (if any) Disclosure date of announcement on shareholders’ meeting approving securities N/A investment (if any) (2) Investments in Derivative Financial Instruments □ Applicable √ Not applicable 30 Konka Group Co., Ltd. Annual Report 2023 No such cases in the Reporting Period. 5. Use of Raised Funds □ Applicable √ Not applicable No such cases in the Reporting Period. VIII Sale of Major Assets and Equity Interests 1. Sale of Major Assets □ Applicable √ Not applicable No such cases in the Reporting Period. 2. Sale of Major Equity Interests □ Applicable √ Not applicable IX Major Subsidiaries √ Applicable □ Not applicable Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10% effect on the Company’s net profit Unit: RMB Relatio nship Registered Operating Name with the Principal activity Total assets Net assets Operating profit Net profit capital revenue Compa ny Manufacturing Shenzhen Konka Subsidi RMB1,000,00 and sale of 643,458,460.23 451,677,708.59 76,790,723.30 9,997,602.71 9,795,415.03 Circuit Co., Ltd. ary 0,000 electronics Anhui Konka Manufacturing Tong giường Subsidi RMB800,000, 3,395,712,049.5 and sale of 1,811,403,982.33 823,926,619.91 47,468,328.76 47,607,805.41 Electrical ary 000 8 electronics Appliances Co., Ltd. Hong Kong Konka Subsidi Export & import 2,726,423,284.9 HKD500,000 3,045,265,073.97 431,256,933.56 39,923,157.65 28,484,645.82 Co., Ltd. ary of electronics 0 Subsidiaries obtained or disposed of in the Reporting Period: √ Applicable □ Not applicable How subsidiary was obtained or disposed Effects on overall operations and Subsidiary in the Reporting Period operating performance Anhui Konka Zhilian E-Commerce Co., Ltd. De-registered For better allocation of assets Jiangsu Konka Special Material Technology Co., Ltd. Sichuan Hongxinchen Real Estate Development Co., Ltd. Yibin Kangrun Environmental Protection Power Generation Co., Ltd. Chongqing Kang xing rui Environmental Technology Co., Ltd. Beneficial to the development of the Zhongshan Kanghong Electronic Equity transfer Company’s relevant business and bring Technology Co., Ltd. about a certain amount of gains Guizhou Kanggui Energy Co., Ltd. Kanghong (Yantai) Environmental Technology Co., Ltd. Chongqing Fangbing Real Estate Co., Ltd. Chongqing Kang xing rui Renewable 31 Konka Group Co., Ltd. Annual Report 2023 Resources Co., Ltd. Chongqing Kang xing rui Scraped Automobile Recycling Co., Ltd. Information about principal subsidiaries and joint stock companies: None X Structured Bodies Controlled by the Company □ Applicable √ Not applicable XI Prospect of the Company’s Future Development In 2024, the Company will follow the new development strategy of "One Axis, Two Wheels and Three Growth Drivers," and adhere to long-term value-oriented principles as well as the operational strategy of focusing on the long term, making profit before expansion, and improving specialization before consolidation. It will also deepen professional integration, implement lean management, and promote high-quality development. The Company’s main tasks in 2024 are listed as follows: (I) Adhere to the spirit of reform and comprehensively deepen the new development strategy First, reform and adjust the business structure. The Company will allocate resources to support the development of its core business, focusing on driving the growth and profitability of the white goods and PCB sectors. Lean management will be implemented to enhance value creation and reduce losses in the colour TV business. Innovation efforts will be directed towards capitalization and efficiency output of the semiconductor business, thereby creating a specialized business matrix. Second, reform and adjust the product structure. First, the Company will establish an eco product matrix for consumer electronics to drive systematic and ecological product operations. Second, the Company will focus on optimizing the product mix of its core business, increasing investment in R&D resources, fixed assets, talent pool, and other areas. Last, the Company will strengthen product synergy, and leverage its advantages in optoelectronic semiconductor technology, PCB and semiconductor memory supply chain to promote the high-end and differentiated development of consumer electronics products. Third, reform and adjust the structure of production capacity allocation. The Company will focus its resources on steadily advancing the full operation of the PCB factory in Suining and the successful establishment of washing machine and air conditioner production bases. It will also intensify efforts to expand OEM business, aiming to enhance the operational performance of manufacturing factories through economies of scale. Fourth, reform and adjust the organizational structure of human resources. The Company will strengthen the compatibility between production personnel and product output, control the overall labor force, and increase per capita output. It will also continuously recruit top scientific research personnel and overseas talents, improve incentives for enhancing personnel effectiveness, and boost the initiative and enthusiasm of employees to improve productivity and efficiency. Fifth, reform and adjust the direction of science, technology and innovation. The colour TV 32 Konka Group Co., Ltd. Annual Report 2023 business will integrate traditional technologies such as picture quality and sound quality with cutting-edge technologies including Mini/Micro LED displays, 5G, 8K resolution, artificial intelligence, AI large models, and cloud computing to gain a competitive edge in the differentiated market. The white goods business aims to extensively apply cutting-edge technologies such as the Internet of Things (IoT) and sensors to products, which will meet users' needs for health, comfort, and eco-friendliness. The semiconductor optoelectronics business will strengthen breakthroughs in chip miniaturization and mass transfer technologies to capitalize on the product revolution driven by technological industrialization. The PCB business plans to combine the existing high multilayer through-hole technology with advanced technologies such as HDI, thick copper, and rigid-flex boards, to enter fields such as new energy, automotive electronics, and communication servers, aiming to establish a presence in high-end products. (II) Adhere to the lean concept and fully practice new management strategies First, improve indicators for core capabilities. The Company will focus on core efficiency indicators to drive value creation, and take robust and effective measures to steadily improve operational performance. Second, continue to implement cost-cutting and cost-control measures. In terms of expenses, the Company will strengthen budget control throughout the process, and enhance management for key expense items, while optimizing expense structure and reducing administrative expenses. In terms of cost reduction, the Company will increase the proportion of centralized procurement, and implement comprehensive cost reduction measures such as reducing procurement prices, improving procurement turnover management, and integrating procurement with products to reduce costs. Third, strengthen corporate governance. On the one hand, the Company will reduce the operating risks of legal entities and promote the inflow of funds through measures such as reducing losses, controlling deficits and reducing the number of legal entities. On the other hand, the Company will strengthen the operating responsibility awareness of legal entities, establish a two-pronged control mechanism with equal emphasis on management lines and legal entity lines, and accelerate the improvement of the core business's profitability. (III) Insist on bottom-line thinking and consolidate the ballast against risk in all aspects First, promote assets revitalization. The Company will implement elevated management for key assets revitalization projects in 2024, forming a work pattern where the headquarters oversees the overall revitalization plan, business units implement specific measures, and key projects warrant elevated focus for breakthroughs. Second, optimize interest-bearing liabilities. The Company will actively adjust and optimize the structure of interest-bearing liabilities, seek medium- to long-term financing opportunities, improve the ratio of long-term to short-term debt, and reduce financing costs. (IV) Adhere to the path of specialization and promote high-quality management on all fronts 33 Konka Group Co., Ltd. Annual Report 2023 "The drivers of products, manufacturing, and internationalization" serve as the main engine for the "two-wheel" core business development, constituting the primary driving force for the Company's core business development. The Company will adhere to long-term value-oriented principles, forge a specialized business matrix, enhance the professional capabilities in "products, manufacturing, and internationalization", and propel high-quality development of the principal business. The specific tasks are as follows: 1. Colour TVs In 2024, the key tasks of the colour TV business are to prioritize cash flow and profit, ensuring maximization of total gross profit, operational cash flow, and per capita output efficiency. In terms of domestic sales, first, it is necessary to reshape the capability for value management to improve gross margin. Second, it involves focusing on creating high-quality products. Under the market trends such as high refresh rates (120Hz and above) and Mini LED technology, the strategy is to manufacture large-screen (65 inch and above) panels and create premium products that can rival the best in the industry. Third, sales channels need to be transformed to promote integrated development, while vigorously developing emerging channels such as OTO (Online To Offline) and interest-based e-commerce, and promoting the synergistic integration and resource reuse of white and black goods categories. In terms of export sales, with profitability as the primary objective, the focus is on expanding manufacturing for international markets and promoting brand abroad. Under the premise of maximizing gross profit, efforts are directed towards maximizing scale. Regarding manufacturing, there is a further emphasis on expanding the customer base for strategic business clients and increasing the scale of OEM production. 2. White goods In 2024, the key tasks of the white goods business are as follows: First, the Company will aim for efficiency through scale while seeking gains from product differentiation; second, the Company will increase sales of new dishwasher categories, timely establish new production bases for product lines with insufficient capacity such as air conditioners and washing machines, and realize production with Frestec refrigeration technologies; third, the Company will maintain growth momentum in export and OEM business, focus on advantageous markets, explore opportunities in untapped markets, with a focus on Europe, Asia-Pacific, and Africa; fourth, the Company will effectively coordinate the matrix arrangement of dual brands and sub-brands, promote the high-end upgrade of brands and products, and maximize gross margin output through brand and upscale products. 3. Semiconductor technology In 2024, the key tasks of the semiconductor technology business are twofold: First, the Company will achieve industrial scale expansion, improve production efficiency, and continuously promote BOM (Bill of Materials) optimization, process optimization, and yield improvement; second, the Company will solidly advance cost reduction and expense control, continuously reduce expenses, 34 Konka Group Co., Ltd. Annual Report 2023 strengthen expense budget management, implement comprehensive budgeting, and enforce "centralized management of costs and expenses", strictly control non-strategic expenses. 4. PCB In 2024, the key tasks of the PCB business are threefold: First, the Company will utilize high-end smart plants and capabilities in high-layer technology, HDI technology, and rigid-flex boards, control the pace of product launch, develop strategic customers, and gradually form a scale advantage; second, the Company will adjust the customer structure and continuously promote customer base upgrading; third, the Company will create high-quality products through R&D, improve the R&D system based on new products, new materials, and new technologies, and effectively manage the transformation and utilization of technological achievements to continuously enhance product competitiveness. 5. Mobile Internet In 2024, the key tasks of the mobile internet business are twofold: First, the Company will scientifically plan organizational structure and personnel allocation, enhance organizational efficiency, and optimize cost expenses; second, the Company will improve the gross profit of overseas mobile phone business and OEM business, and focus resources on overseas markets to create core products. 6. Industrial parks In 2024, the key tasks of the industrial park business are to focus on assets revitalization and the operation of existing properties, provide space carriers, cash flow, and profit support for industrial layout and enable the development of the core business; at the same time, to fully revitalize park assets, integrate high-quality operating assets of the industrial park business, and unlock the value of existing park assets. 7. Investment In 2024, the key tasks of industrial investment operations are to strengthen post-investment management, and enhance value preservation and appreciation and orderly withdrawal of invested projects to achieve capital inflow. In 2024, the key tasks of venture capital operations are as follows: On one hand, the Company will continue exploring the operating model of commercial real estate operators, seek additional value for properties, and achieve breakthroughs in operational business; on the other hand, it will continue cost reduction and expense control efforts, optimize staffing, and control expenditure. XII Communications with the Investment Community such as Researches, Inquiries and Interviews √ Applicable □ Not applicable Way Type Index to main Main discussions and of of information Date Place Communication party materials provided com commu communicate by the Company muni nicatio d 35 Konka Group Co., Ltd. Annual Report 2023 catio n party n Conferenc e Room Record Form for of Office Huaxi Securities: Chen Yulu, Li Lin 6 January Instituti Investor Relations Building Other Dacheng Fund: Gao Yi, Hou 2023 on Activities (No.: of Konka Yuelong, Ma Yueyang, and Shu Sijia 2023-01) R&D Building Earni Conferenc ngs Investors participating in the 2022 e Room com Annual Results Presentation of Record Form for of Office muni Individ Konka Group Co., Ltd. via the Investor Relations 11 April 2023 Building catio ual Shenzhen Stock Exchange Activities (No.: of Konka Interaction Easy website n 2023-02) R&D (http://irm.cninfo.cn) confe Building rence Conferenc e Room Huaxi Securities: Chen Yulu, La Record Form for of Office Instituti Ruimeng Investor Relations 14 April 2023 Building Other on China Life Asset Management: Li Activities (No.: of Konka Shanshan 2023-03) R&D Building Conferenc e Room One- China Merchants Securities: Peng Record Form for of Office on- Instituti Zihao Investor Relations 15 May 2023 Building one on Century Securities: Zheng Binbin, Activities (No.: of Konka meeti Luo Peng 2023-04) R&D ng Building Conferenc e Room One- http:// c Record Form for of Office on- ninfo.cn/ 3 November Instituti Industrial Securities: Yan Investor Relations Building one new/index 2023 on Changming Activities (No.: of Konka meeti 2023-05) R&D ng Building Yufu Electronics: Zeng Jie, Zhang Fengwei, Gao Kai China Merchants Capital: Wang Ruifan, Tang Yunsheng Huaxi Securities: Chen Yulu, La Ruimeng Cinda Securities: Luo Anyang, You Chongqin Ziyin g Konka One- Shanghai United Assets and Equity Record Form for Optoelect on- 7 November Instituti Exchange: Guan Yanhong, Wang Investor Relations ronic one 2023 on Xiaoli Activities (No.: Technolo meeti China Equity: Wang Peng 2023-06) gy Co., ng China Merchants Securities: Peng Ltd. Zihao Shenwan Hongyuan: Liu Jialing First Capital: Li Zezi Central China Securities: Ou Yangjun Chuanshi Investment: Ren Zhengbin China Film Investment: Deng 36 Konka Group Co., Ltd. Annual Report 2023 Zhongwen TF Securities: Zong Yan Conferenc e Room One- Record Form for of Office on- 9 November Instituti China Southern Asset Management: Investor Relations Building one 2023 on Jiang Youjie Activities (No.: of Konka meeti 2023-07) R&D ng Building Conferenc e Room Investors participating in theKonka Group Co., Ltd. 2023 Collective Record Form for of Office 15 November Individ Reception Day of Listed Companies Investor Relations Building Other 2023 ual of Shenzhen Districts via the Activities (No.: of Konka Quanjing Roadshow website 2023-08) R&D (http://rs.p5w.net/) Building Conferenc e Room One- Record Form for of Office on- 17 November Instituti Investor Relations Building one Topsperity Securities: Jin Wenxi 2023 on Activities (No.: of Konka meeti 2023-09) R&D ng Building Conferenc e Room One- Record Form for of Office on- 6 December Instituti CITIC Securities: Wang Weida, Investor Relations Building one 2023 on Pang Lili, Tan Libo Activities (No.: of Konka meeti 2023-10) R&D ng Building Conferenc e Room One- Record Form for of Office on- 21 December Instituti Investor Relations Building one Cinda Securities: Luo Angyang 2023 on Activities (No.: of Konka meeti 2023-11) R&D ng Building Conferenc e Room One- HengBang ZhaoFeng Private Record Form for of Office on- 29 December Instituti Securities Fund Management (Shen Investor Relations Building one 2023 on Zhen): Wang Wenbo, Duan Activities (No.: of Konka meeti Yingsheng, Hao Lei, Wang Guanhua 2023-12) R&D ng Building XIII Implementation of the Action Plan for "Double Improvement of Quality and Return" Has the company disclosed an action plan for "dual improvement of quality and return". □ Yes √ No 37 Konka Group Co., Ltd. Annual Report 2023 Part IV Corporate Governance I General Information of Corporate Governance In the Reporting Period, strictly in accordance with the Company Law, Securities Law of the PRC, Code of Corporate Governance for Listed Companies, Share Listing Rules of Shenzhen Stock Exchange and the relevant rules and regulations of the CSRC, the Company timely amended the internal control systems such as the Articles of Association and Administrative Method on Provision of External Financial Aids as well as Management System on Investors Relationship, continuously perfected the corporate governance structure and standardized the Company’s operation. By the end of the Reporting Period, the actual conditions of corporate governance basically met the requirements of the regulatory documents in respect of corporate governance structure of listed companies issued by CSRC. (I) Shareholders and the Shareholders’ General Meeting The Company drew up Articles of Association and Rules for Procedure of Shareholders’ General Meeting, ensured that all shareholders, in particular medium and minor shareholders, enjoy legal rights and equal standard. In the Reporting Period, the Company was able to publish announcement on Shareholders’ General Meetings in advance, convened Shareholders’ General Meeting with strictly accordance to relevant requirements, so as to enable the shareholders have their rights of information to the Company’s material issues and the participation rights. In 2023, the Company convened four Shareholders’ General Meeting in total. The Company seriously did well the registration, arrangement and organization work for the Shareholders’ General Meeting before the circular on convening the Shareholders’ General Meeting being published at the designated media. The Company convened the Shareholders’ General Meeting at the office address of the Company strictly in line with relevant stipulations, which was convenient in traffic, and the shareholders could attend the session in accordance with their actual situation. The Company’s directors, supervisors and senior management staffs made explanations and description for the shareholders’ questions and advices at the session. (II) Controlling shareholder and the Company In the Reporting Period, the controlling shareholders and actual controllers strictly regulated its behavior and complied with laws in exercising their rights and obligations, not bypassed the Shareholders’ General Meeting to intervene in the Company’s decisions and operations directly or indirectly. The Company was separated from the controlling shareholders and actual controllers in aspects of its business, personnel, assets, organ and finance, the Board of Directors, Supervisory Committee and the internal departments of the Company functioned independently. 38 Konka Group Co., Ltd. Annual Report 2023 (III) Directors and the Board of Directors The number and structure of the Board Bureau of the Company were in compliance with laws and regulations. The Company drew up Rules for Procedures of the Board Bureau, so as to ensure a high efficient operation and scientific decision-making of the Board Bureau; the Company has set up Independent Director System and engaged three independent directors. In the Reporting Period, the number of directors and composition of the Board of Directors of the Company as well as the procedure of selection was in accordance with the requirements of the rules and laws as well as Articles of Association. The Company set up four special committees, which were Financial Audit Committee, Nomination Committee, Remuneration & Appraisal Committee, Strategy Committee to provide profession opinion for the decision of the Board of Directors. All the directors carried out their work, fulfilled their duties and scrupulously attended the Board sessions in accordance with Rules of Procedure for the Board of Directors, Rules for Independent Directors, etc. 15 Board sessions were convened by the Company during the Reporting Period, which brought the decision-making mechanism of the Board of Directors into full play. (IV) Supervisors and supervisory committee The Company has established Rules for Procedures of the Supervisory Committee, persons and structure of the Supervisory Committee was in line with relevant laws and statutes, supervisors can earnestly perform their responsibilities, independently and efficiently executed supervision and check responsibilities with a spirit of being responsible to shareholders. In the Reporting Period, the number of supervisors and composition of the Supervisory Committee of the Company as well as their selecting procedure complied with the laws, regulations. In accordance with the requirement of the Rules of Procedure for Supervisory Committee, the supervisors performed their duties in an earnest and responsible manner, and exercised their functions of supervision on the decision-making procedure of the Board of Directors, resolutions and the Company’s operation by law, and took effective supervision over the Company’s significant events, related transactions, financial position, as well as the legality and compliance on duty performance by the directors, president and other senior management members. (V) Performance Appraisal and Incentive & Restrictive Mechanism The senior management staffs of the Company were recruited on an open basis and in compliance with the laws and regulations. The Company has established and gradually improved the performance appraisal standards and incentive & restrictive mechanism for senior management staffs, so as to attract qualified personnel, and ensure the stability of senior management staffs. (VI) Interested parties 39 Konka Group Co., Ltd. Annual Report 2023 During the Reporting Period, the Company fully respected and maintained the legal rights of the interested parties, and realized the balance of interest among the parties such as society, shareholders and employees, etc. Meanwhile, the Company protected the rights of the employees, promoted the environmental protection, and actively joined in the social benefit and charitable cause so as to jointly promote sustainable and healthy development. (VII) Information disclosure and transparency The Company formulated the Management System for Investor Relations and the Management System for Information Disclosure and the Rules on Implementation for Information Disclosure Committee. And the Company designated specially-assigned person to take charge of the information disclosure, and designated specialized department to be responsible for the reception of shareholders and consultation, actively carrying out the work for investor relations management to ensure equal access to information for all shareholders. The Company strictly complied with the requirements of the laws, regulations and the Articles of Association to disclose its information as required by the relevant regulations on an timely, honest, complete and accurate basis, to ensure the accurate and timely information disclosure, while ensure equal access to information for all shareholders. (VIII) Non-standard governance 1. Type of non-standard governance matter existed There was a situation that the Company disclosed undisclosed information. 2. Types and cycle of undisclosed information provided to the principal shareholder The Company provided monthly financial data to the principal shareholder. 3. Reasons for the related non-standard governance existed The Company submitted the undisclosed information such as monthly financial data to the substantial shareholder directly administrated by the State-owned Assets Supervision and Administration Commission of State Council in accordance with the managerial demand of SASAC. 4. Impact on Company independence After the self-inspection, the Company kept strictly to the requirements of “Notice on Strengthening the Supervision of Listed Company’s Provision of Non-public Information to Substantial Shareholders and Actual Controllers”, and “Supplementary Notice Concerning Strengthening the Supervision of the Non-standard Governance Behavior of Listed Company's Provision of Non-public Information to Substantial Shareholders and Actual Controllers”, while 40 Konka Group Co., Ltd. Annual Report 2023 stringently performed the necessary procedures. There existed no circumstances of substantial shareholder’s abuse of control and disclosure of undisclosed information for insider trading, and hence, it has no impact on the independence of the Company. (IX) Development of company’s special governance activity, formulation and implementation of registration and management system for the insider of inside information 1. Establishment and perfection of management system for the insider of inside information To further standardize the company’s inside information management behavior, strengthen the company’s inside information confidential work, and maintain the fair principle of information disclosure, the Company established Inside Information and Insider Management System in Konka Group Co., Ltd. The Company strictly implements the system in the information disclosure work, meanwhile, carefully implements the Company’s inside information and insider registration and management method, registers the insider of inside information, and report to Shenzhen Stock Exchange and Shenzhen Security Regulatory Bureau according to the provision. The Company conducted the special inspection on the inside information management during the occurrence of major event in 2023 and the annual report in 2023. After the inspection, the Company actually realized that the insider of inside information strictly kept the confidential provision, did not disclose, divulge and spread the Company’s inside information to the outside, the insider of inside information did not buy and sell the Company’s share with the inside information before disclosing the major sensitive information influencing the Company’s share price, there was no investigation and rectification from the regulatory department during the editing, review and disclosure of regular report and major event. Management Rules for Inside Information and Insider Management System of Konka Group Co., Ltd. was implemented in place and controlled effectively. 2. Establishment and implementation of external information user’s management system To strengthen the management on the reporting of Company’s inside information, the Company establishes insider information reporting mechanism, and regulates the inside information reporting range, reporting procedure, responsibility division and other matters according to Security Law in People’s Republic of China, Information Disclosure Management Method in Listed Company, Inside Information and Insider Management System in Konka Group Co., Ltd. and other related provisions in the laws, regulations and regulatory documents. The Company conducted the special inspection on the inside information reporting status during the occurrence of major event in 2023 and the annual report in 2023. After the inspection, the Company’s inside information reporting status complies with the requirements in Management Rules for Inside Information and Insider Management System of Konka Group Co., Ltd. Management Rules for Inside Information and Insider Management System of Konka Group Co., Ltd. was implemented in place and controlled effectively. 41 Konka Group Co., Ltd. Annual Report 2023 Indicate by tick market whether there is any material incompliance with laws, regulations and provisions issued by the CSRC governing the governance of listed companies. □ Yes √ No No such cases in the Reporting Period. II The Company’s Independence from Its Controlling Shareholder and Actual Controller in Business, Personnel, Asset, Organization and Financial Affairs During the Reporting Period, the company was fully separated from the controlling shareholders in terms of business, staff, assets, organs, and finance, which owned independent legal representative and main status in market competition and had independent accounting, as well as possessed complete business and the ability of independent operation to face the market. (I) Business: the Company owned complete supply, R&D, production and sales system, possessed ability of independent operation to face the market by independent operation, independent accounting & decision-making, independent bearing responsibility & risks, didn’t subject to the interference and control of the controlling shareholders, actual controller and its controlled enterprises. (II) Staff: the Company was independent of the controlling shareholder with respect to labor, personnel and salaries management. The Company owned independent team of staffs, the senior management staff, financial personnel and business personnel received their remunerations in the Company, and they were full-time staffs of the Company without holding any post, except directors and supervisors, in shareholders’ units or other related enterprises. (III) Assets integrity: the Company had production and operation premises completely separated from the controlling shareholder, and the unaffiliated and integral assets structure, as well as the independent production system, ancillary production system, the ancillary facilities, house property right and other assets, which also possessed independent procurement and sales system. (IV) Organ: the Company had its own functional organs adapting to the needs of self-development and market competitiveness, all the functional organs were separated from each other in aspects of personnel, office premises and management rules, etc., there existed no particulars about any shareholders, other units or individuals interfering the organ setting of the Company. (V) Finance: the Company established an independent finance department with full-time financial personnel and an independent finance and accounting system, and independently carried out the financial work in line with requirements of relevant accounting rules; the Company promulgated sound financial management system to operate independently without sharing common accounts 42 Konka Group Co., Ltd. Annual Report 2023 with the controlling shareholder, related enterprise, other units or individual; the Company independently declared and paid the tax by laws without particulars on paying taxes together with shareholders’ units. III Horizontal Competition □ Applicable √ Not applicable IV Annual and Special General Meetings Convened during the Reporting Period 1. General Meeting Convened during the Reporting Period Investor Date of the Meeting Type participation Disclosure date Meeting resolutions meeting ratio Extraordinar Resolutions of the 1st The 1st Extraordinary y General 24.4741% 13 March 2023 14 March 2023 Extraordinary General General Meeting of 2023 Meeting Meeting of 2023 Annual The 2022 Annual General Resolutions of the 2022 General 24.3675% 19 June 2023 20June 2023 Meeting Annual General Meeting Meeting Extraordinar Resolutions of the 2nd The 2nd Extraordinary y General 24.2222% 28 August 2023 29 August 2023 Extraordinary General General Meeting of 2023 Meeting Meeting of 2023 Extraordinar Resolutions of the 3rd The 3rd Extraordinary 21 December 22 December y General 24.1082% Extraordinary General General Meeting of 2023 2023 2023 Meeting Meeting of 2023 2. Special General Meetings Convened at the Request of Preferred Shareholders with Resumed Voting Rights □ Applicable √ Not applicable V Directors, Supervisors, Senior Management and Staff 1. Basic Information Decrea Other Increas Begin se in incre Incu e in the Ending ning the ase/d Reason Office mbe Start of End of Reporti shareho Name Gender Age shareh Reporti ecrea for title nt/Fo tenure tenure ng lding olding ng se change rmer Period (share) (share) Period (shar (share) (share) e) Directo Incu Liu r, 25 July 25 July Male 53 mbe 0 0 0 0 0 Fengxi Chairm 2022 2025 nt an of 43 Konka Group Co., Ltd. Annual Report 2023 the Board Incu Directo 25 July 25 July Yao Wei Male 49 mbe 0 0 0 0 0 r 2022 2025 nt Incu Zhou Directo 25 July 25 July Male 45 mbe 0 0 0 0 0 Bin r 2022 2025 nt Emplo Incu Ye yee 25 July 25 July Male 54 mbe 0 0 0 0 0 Xingbin directo 2022 2025 nt r Indepe Incu ndent 25 July 25 July Liu Jian Male 58 mbe 0 0 0 0 0 directo 2022 2025 nt r Indepe Wang Incu ndent 25 July 25 July Shuguan Male 53 mbe 0 0 0 0 0 directo 2022 2025 g nt r Indepe Deng Incu ndent 25 July 25 July Chunhu Female 61 mbe 0 0 0 0 0 directo 2022 2025 a nt r Superv isor, chairm an of Incu Cai 25 July 25 July Male 51 the mbe 0 0 0 0 0 Weibin 2022 2025 Superv nt isory Commi ttee Incu Yang Superv 25 July 25 July Male 55 mbe 0 0 0 0 0 Guobin isor 2022 2025 nt Emplo Incu yee 25 July 25 July Li Jun Male 53 mbe 0 0 0 0 0 supervi 2022 2025 nt sor Incu Zhou Preside 18 May 18 May Male 45 mbe 0 0 0 0 0 Bin nt 2023 2026 nt Executi Incu Cao 18 May 18 May Male 46 ve vice mbe 0 0 0 0 0 Shiping 2023 2026 preside nt 44 Konka Group Co., Ltd. Annual Report 2023 nt Vice Incu Li 18 May 18 May Male 56 preside mbe 0 0 0 0 0 Hongtao 2023 2026 nt nt Board Incu Wu 18 May 18 May Male 49 Secreta mbe 0 0 0 0 0 Yongjun 2023 2026 ry nt Incu Li 18 May 18 May Male 51 CFO mbe 0 0 0 0 0 Chunlei 2023 2026 nt Vice Incu 18 May 18 May Yang Bo Male 54 preside mbe 0 0 0 0 0 2023 2026 nt nt Vice Incu Lin 18 May 18 May Male 53 preside mbe 0 0 0 0 0 Hongfan 2023 2026 nt nt Total 0 0 0 0 0 Indicate by tick mark whether any directors or supervisors left or any senior management were disengaged during the Reporting Period □ Yes √ No Change of Directors, Supervisors and Senior Management □ Applicable √ Not applicable 2. Biographical Information 1. Non-independent Director Liu Fengxi, male, ethnic group of Han, born in 1971, was the Chairman of the Board with a master degree. He once worked as the Chief of the Operation Management Center of Konka Group, Assistant to President, Vice President, President & Secretary of the Party Committee, Chairman of the Board & Secretary of the Party Committee of Konka Group, Vice GM and the member of the Standing Committee of OCT Group. And now he is acting as the Deputy Secretary of the Party Committee, Director, GM of OCT Group, Deputy Chairman of the Board and Deputy Secretary of CPC of Shenzhen Overseas Chinese Town Co., Ltd., Vice President of China Tourism Association (concurrently) and the Board Chairman of Konka Group. Yao Wei, Director, male, ethnic group of Han, bachelor degree, was born in 1975. He once served 45 Konka Group Co., Ltd. Annual Report 2023 as Chief Accountant in CGN Wind Power Co., Ltd., Chief Accountant in CGN New Energy Holdings Co., Ltd., Vice GM (in charge) of Financial Department, GM of Financial Department, GM of Finance and Asset Management Department in China General Nuclear Power Corporation. Currently, he acts as the director of China Everbright Bank Co., Ltd., the member of the Standing Committee and Chief Accountant in Overseas Chinese Town Holdings Company and Director of Konka Group. Zhou Bin, male, ethnic group of Han, born in 1979, was the Secretary of the Party Committee, CEO, director and president of the Company with a bachelor degree. He once served as the director assistant, deputy director and director in Operating Management Center in Konka Group, assistant of the president in the Board of Directors & Director in Operating Management Center in Konka Group and President of Konka Group. Now, he acts as the Chairman of Shenzhen Konka Investment Holdings Co., Ltd. and Shenzhen Konka Capital Equity Investment Management Co., Ltd. and Director, Secretary of the Party Committee and President & CEO in Konka Group. Ye Xingbin, male, Han Chinese, born in 1970, was the Employee Director of the Company and holds a bachelor's degree. He previously served as a Special Director at the Overseas Chinese Town Holdings Company (OCT Group), and was a member of the Standing Committee of the Qiandongnan Prefecture of Guizhou Province, the Deputy Governor of the Prefecture Government, the Director of Shenzhen Huakang Chuangzhan Technology Holding Group Co., Ltd., and the Deputy Party Secretary of the Party Committee and Director of Konka Group. He is currently serves as the Vice Chairman of the Federation of Trade Unions Committee of Overseas Chinese Town Holdings Company, Deputy Party Secretary of the Party Committee, Chairman of the Labor Union and Employee Director of Konka Group. 2. Independent Director Mr. Liu Jian, Independent Director, is a Han Chinese man born in 1966 and holds a master's degree. His notable professional experiences include having served as an editor at the Foreign Economic and Trade University Press and the China Business Times, and also as an independent director at Wuhan Tianyuan Environmental Protection Co., Ltd., Hisense Visual Technology Co., Ltd. and Founder Technology Group Corporation. In his current capacity, Mr. Liu Jian holds various positions in different organizations. He serves as the chief editor and president of the Economic Observer Newspaper, presides over the Beijing Jingguan Cultural Media Co., Ltd. as its chairman, and functions as a director and general manager of Shandong Economic Observer Newspaper 46 Konka Group Co., Ltd. Annual Report 2023 Media Co., Ltd. Additionally, he takes on the role of an independent director of Konka Group. Wang Shuguang, Independent Director, male, ethnic group of Han, was born in 1971 with a doctoral degree. He served as Independent Director of Yantai Rural Commercial Bank, Jinan Rural Commercial Bank, Ningbo Yuyao Rural Commercial Bank and SDIC Zhonglu, and External Supervisor and Convener of the Board of Supervisors of Industrial Bank Co., Ltd. Currently, he serves as Professor and Doctoral Supervisor in the School of Economics of Peking University, Executive Deputy Director of the Institute for Cultural Industries, Peking University and Independent Director of Konka Group. Deng Chunhua, Independent Director, female, ethnic group of Han, born in 1963 with a degree of MBA, accounting professor and a Certified Public Accountant in China (non-practicing member). She served as Chief Accountant and Project Manager of WUYIGE Certified Public Accounts LLP. She has been teaching in the School of Accounting of Zhongnan University of Economics and Law as Assistant Lecturer, Lecturer, Associate Professor and Professor. And she onced acted as the Independent Director of Zhe gian g Goldensea Hi Tech Co., Ltd. Currently, she serves as a Professor in the School of Accounting of Zhongnan University of Economics and Law, the Independent Director of Zhe gian g Jinke Tom Culture Industry Co., Ltd., Wolong Electric Group Co., Ltd., Zhe gian g You giường Material Technology Co., Ltd. (non-listed company) and Konka Group. 3. Supervisor Cai Weibin, Chairman of the Supervisory Committee, male, ethnic group of Han, Master’s Degree, was born in 1973. He once served as vice GM, deputy secretary of the Party Committee and Secretary of Committee for Discipline Inspection in Chongqing OCT Industry Development Co., Ltd. Vice Minister of Discipline Inspection and Supervision and Director of the Discipline Inspection Office in Overseas Chinese Town Holdings Company Currently, he acts as GM of Legal Compliance Department in Overseas Chinese Town Holdings Company and Chairman of the Supervisory Committee of Konka Group. Yang Guobin, Supervisor, male, was born in 1969, Bachelor’s Degree, Certified Public Accountant. He served as Deputy Director of the Finance Department of OCT Group, CFO of Konka Group and Deputy Director of the Corporate Management Department of OCT Group. Currently, he serves as 47 Konka Group Co., Ltd. Annual Report 2023 a full-time Director in OCT Group and Supervisor of Konka Group. Li Jun, male, ethnic group of Han, born in 1971, was an employee supervisor of the Company with a bachelor degree. Formerly worked as the Senior Manager of the Financial Department in Shenzhen Telecommunications Technology Co., Ltd., the Senior Manager and assistant to the chief and deputy director of Auditing and Legal Affairs Department in Konka Group, Office Director of discipline inspection commission of Konka Group, and employee supervisor of Konka Group. Presently working as the deputy secretary of discipline inspection commission of Konka Group, General Counsel, Chief of the Supervision, Audit and Legal Affairs Center and Employee Supervisor of Konka Group. 4. Senior Executive Zhou Bin, male, ethnic group of Han, born in 1979, was the Secretary of the Party Committee, CEO, director and president of the Company with a bachelor degree. He once served as the director assistant, deputy director and director in Operating Management Center in Konka Group, assistant of the president in the Board of Directors & Director in Operating Management Center in Konka Group and President of Konka Group. Now, he acts as the Chairman of Shenzhen Konka Investment Holdings Co., Ltd. and Shenzhen Konka Capital Equity Investment Management Co., Ltd. and Director, Secretary of the Party Committee and President & CEO in Konka Group. Cao Shiping, male, Han nationality, born in 1978, was the executive vice president of the Company with a master degree. Once served as the GM in Jinzhou Branch and Tianjin Branch of Konka Group Multi-media, GM in Multi-media Business Division Customer Cooperation Department, vice GM in Multi-media Marketing Business Division, vice GM in Multi-media Business Division and GM in Marketing Center, GM in Multi-media Business Division, GM in Internet Business Division and vice president of Konka Group. Now he acts as the executive vice president in Konka Group. Li Hongtao, male, Han nationality, born in 1968, was the vice president of the Company with a bachelor degree. He successively took the post such as Assistant to GM, GM, Chairman of the Board and GM of Shenzhen Konka Telecommunication Technology Co., Ltd and Assistant to President and vice president of Konka Group etc. He now is acting as Vice President of Konka 48 Konka Group Co., Ltd. Annual Report 2023 Group. Wu Yongjun, male, Han nationality, born in 1975, was the Board Secretary with a master degree. Formerly he worked as the senior manager of Secretariat, assistant to the chief, vice chief, chief, Securities Affairs representative and Board Secretary in Konka Group. Presently he is working as the secretary of the board of directors of Konka Group. Li Chunlei, male, Han nationality, born in 1973, was the CFO of the Company with a master degree. Once served as the director in Real Estate Business Division in Konka Group, vice GM and GM in Kunshan Kangsheng Investment Development Co., Ltd., deputy director (preside the work) and director in Strategic Development Center, GM in Financial Center and GM in Asset Settlement Center and CFO of Konka Group. Now he acts as the CFO in Konka Group. Yang Bo, male, Han nationality, born in 1970, was the vice president of the Company with a master degree. Once served as the director in Shenzhen Cable Television Education Financial Channel, director in the market sales and support region of US Tailiyang Communications Company, GM in Program Operating Department in Shenzhen Topway Video Communication Co., Ltd., director and GM in Shenzhen Tianhua Century Media Co., Ltd., GM in Market Sales Center in Shenzhen Topway Video Communication Co., Ltd. and vice president of Konka Group. Now he acts as the vice president in Konka Group. Lin Hongfan, male, Han nationality, born in 1971, was the vice president of the Company with a MBA degree. Once served as the vice GM in Multi-media Marketing Business Divisionof Konka Group, GM of Color TV Strategy and Supply Chain Management Center, executive vice GM and GM in Multi-media Business Division of Konka Group, vice president and president assistant of Konka Group. Now he acts as the vice president in Konka Group. Offices held concurrently in shareholding entities: √Applicable □Not applicable Office held in the End of Remuneration or Name Shareholding entity Start of tenure allowance from shareholding entity tenure the shareholding 49 Konka Group Co., Ltd. Annual Report 2023 entity Liu Director, Deputy Secretary OCT Group 21 May 2021 Yes Fengxi of CPC, GM Deputy Chairman of the Liu Shenzhen Overseas Chinese Board, Deputy Secretary of 22 June 2021 No Fengxi Town Co., Ltd. CPC Party Committee Standing Yao Wei OCT Group Committee and Chief 1 July 2020 Yes Accountant Cai GM of Legal Compliance OCT Group 1 December 2020 Yes Weibin Department Yang Full-time director in Board OCT Group 7 March 2018 Yes Guobin Office 1. Except the above situation, other directors, supervisors and senior management didn’t hold any position in the shareholders’ units. Notes 2. It is unknown the ending date of the posts of Mr. Liu Fengxi, Mr. Yao Wei, Mr. Cai Weibin and Mr. Yang Guobin held in the shareholders’ units. Offices held concurrently in other entities: √Applicable □Not applicable Remuneration or Office held in End of Name Other entity Start of tenure allowance from the entity tenure the entity Liu Fengxi China Tourism Association Vice president 20 December 2022 Yao Wei China Everbright Bank Co., Ltd. Director 5 February 2021 Chief editor and Liu Jian The Economic Observer 16 April 2001 Yes president Shandong Economic Observer Liu Jian Director, GM 28 September 2022 Media Co., Ltd. Beijing Economic Observer Chairman of the Liu Jian 25 May 2018 Culture Media Co., Ltd. Board Wang School of Economics of Peking Professor Yes Shuguang University Wang Institute for Cultural Industries of Deputy director Shuguang Peking University Zhongnan University of Deng Chunhua Professor Yes Economics and Law 50 Konka Group Co., Ltd. Annual Report 2023 Zhe gian g Jinke Culture Industry Independent Deng Chunhua 8 July 2020 Yes Co., Ltd. director Independent Deng Chunhua Wolong Electric Group Co., Ltd. 7 September 2020 Yes director Zhe gian g You giường Material Independent Deng Chunhua Technology Co.,Ltd. (non-listed 27 October 2020 Yes director company) Notes None Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior management as well as those who left in the Reporting Period: □ Applicable √ Not applicable 3. Remuneration of Directors, Supervisors and Senior Management Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and senior management: The salary of directors and supervisors of the Company should be submitted to the shareholders meeting for review after the approval and consent by the Board of directors. Referred to the salary level of the Directors and Supervisor of the domestic listed companies of same industry, the salary proposal of the Director and Supervisors of the Company which approved and reviewed by the 2nd Extraordinary General Meeting of 2015 were as follows: (1) the basic annual salary standard of the Board Chairman was of RMB1.2 million, the subsidy standard of other Directors (excluding the Directors serving in the Company) was of RMB0.3 million per person per year and the subsidy standard of the Supervisors (excluding the Employee Supervisors) was of RMB0.2 million per person per year; which was executed since June 2015. (2) the above standards were all pre-tax standard with the individual income tax burdened in person as well as the Company withheld and remitted tax. Other treatment for independent directors: travel expense when they went to attend the Board sessions, Supervisory sessions or Shareholders’ General Meetings and the expenses when they were performing their duties as stipulated in the relevant regulations and the Articles of Association and other relevant systems, all these could be reported for deletion. The Board of Directors determined the remuneration of senior management staffs referring to the following factors: a. scope of jobs and responsibility shouldered; b. actual profit of the Company; c. market remuneration level in the same industry and same area. The salary of senior management of the Company should be submitted to the Board of Directors for review after the review by the Remuneration and Appraisal Committee under the Board. 51 Konka Group Co., Ltd. Annual Report 2023 The remuneration for the year 2023 disclosed by directors, supervisors and senior management has been reviewed by the Remuneration and Appraisal Committee under the Board. Remuneration of the directors, supervisors and senior management of the Company during the Reporting Period Unit: RMB'0,000 Total before- Incumb tax Gen Any remuneration from Name Age Office title ent/For remuneration der related party mer from the Company Liu Mal Incumb 53 Director, Chairman of the Board 0 Yes Fengxi e ent Mal Incumb Yao Wei 49 Director 0 Yes e ent Mal Secretary of CPC, CEO, Director, Incumb Zhou Bin 45 102.06 No e President ent Ye Mal Deputy Secretary of CPC, Employee Incumb 54 70.66 No Xingbin e Director ent Mal Incumb Liu Jian 58 Independent director 30 No e ent Wang Mal Incumb 53 Independent director 30 No Shuguang e ent Fe Deng Incumb mal 61 Independent director 30 No Chunhua ent e Cai Mal Chairman of the Supervisory Incumb 51 0 Yes Weibin e Committee ent Yang Mal Incumb 55 Supervisor 0 Yes Guobin e ent Mal Incumb Li Jun 53 Employee Supervisor 115.30 No e ent Cao Mal Incumb 46 Executive vice president 73.76 No Shiping e ent Li Mal Incumb 56 Vice president 70.66 No Hongtao e ent Wu Mal Incumb 49 Board Secretary 70.66 No Yongjun e ent 52 Konka Group Co., Ltd. Annual Report 2023 Mal Incumb Li Chunlei 51 CFO 70.66 No e ent Mal Incumb Yang Bo 54 Vice president 70.66 No e ent Lin Mal Incumb 53 Vice president 70.66 No Hongfan e ent Total -- -- -- -- 805.08 -- Other notes □Applicable Not applicable VI Performance of Duty by Independent Directors in the Reporting Period 1. Board Meeting Convened during the Reporting Period Date of the Meeting Disclosure date Meeting resolutions meeting The 6th Meeting of Resolutions of the 6th Meeting of the 10th Board of the 10th 13 January 2023 17 January 2023 Directors Board of Directors Resolutions of the 7th Meeting of the 10th Board of Directors; Resolutions on Applying for General Credit Limit from Shenzhen Branch, China Guangfa Bank Co., Ltd.; Resolutions on Applying for General Credit Limit from China Construction Bank (CCB); Resolutions on Applying for General Credit Limit from Agricultural Bank of China (ABC); Resolutions on Applying for General Credit Limit from Shanghai Pudong Development Bank (SPD bank); The 7th Meeting of Resolutions on Applying for General Credit Limit from the 10th 24 February 2023 25 February 2023 Bank of Beijing (BOB); Board of Directors Resolutions on Applying for General Credit Limit from Industrial Bank Co., Ltd.; Resolutions on Applying for General Credit Limit from Hengfeng Bank; Resolutions on Applying for General Credit Limit from China Resources Bank of Zhuhai Co., Ltd. (CRBC); Resolutions on Applying for General Credit Limit from China CITIC Bank; Resolutions on Applying for General Credit Limit from Bank of Hangzhou; Resolutions on Applying for General Credit Limit from 53 Konka Group Co., Ltd. Annual Report 2023 Shenzhen Branch, Hua Xia Bank Co., Ltd.; Resolutions on Applying for General Credit Limit from Shenzhen Rural Commercial Bank (SRCB); Resolutions on Applying for General Credit Limit from China Minsheng Bank; Resolutions on Applying for General Credit Limit from China Bohai Bank Co., Ltd. Resolutions of the 8th Meeting of the 10th Board of Directors Resolutions on Business Plan and Financial Budget Plan for 2023; Resolutions on Letter of Commitment on Performance The 8 th for 2023 for the Company’s Management Team; Meeting of Resolutions on 2023 Donation Plan; the 10th 24 March 2023 28 March 2023 Board of Resolutions on A New Fixed Assets Investment Plan for Directors 2023; Resolutions on A New Equity Investment Plan for 2023; Resolutions on Revising the Remuneration Management Measures for Heads of Konka Group Co., Ltd. The 9th Meeting of Resolutions of the 9th Meeting of the 10th Board of the 10th 31 March 2023 4 April 2023 Directors Board of Directors The 10th Meeting of Resolutions of the 10th Meeting of the 10th Board of the 10th 27 April 2023 Directors Board of Directors The 11th Meeting of Resolutions of the 11th Meeting of the 10th Board of the 10th 18 May 2023 19 May 2023 Directors Board of Directors The 12th Meeting of Resolutions of the 12th Meeting of the 10th Board of the 10th 26 May 2023 27 May 2023 Directors Board of Directors The 13th Meeting of Resolutions of the 13th Meeting of the 10th Board of 14 June 2023 the 10th Directors Board of 54 Konka Group Co., Ltd. Annual Report 2023 Directors The 14th Meeting of Resolutions of the 14th Meeting of the 10th Board of the 10th 10 July 2023 11 July 2023 Directors Board of Directors The 15th Meeting of Resolutions of the 15th Meeting of the 10th Board of the 10th 10 August 2023 11 August 2023 Directors Board of Directors Resolutions of the 16th Meeting of the 10th Board of Directors; The 16th Resolutions on Adjusting Remunerations of Senior Meeting of Management; the 10th 25 August 2023 Resolutions on Applying for General Credit Limit from Board of the Hongkong and Shanghai Banking Corporation Directors Limited (HSBC); Resolutions on Applying for General Credit Limit from Shenzhen Rural Commercial Bank (SRCB) The 17th Meeting of 20 September Resolutions of the 17th Meeting of the 10th Board of the 10th 2023 Directors Board of Directors Resolutions of the 18th Meeting of the 10th Board of Directors Resolutions on Revising the Compliance Management Implementation Rules of Konka Group Co., Ltd. (Revised in 2023); Resolution on Applying for General Credit Limit from The 18th Bank of China; Meeting of the 10th 30 October 2023 Resolution on Applying for General Credit Limit from Board of Industrial and Commercial Bank of China (ICBC); Directors Resolution on Applying for General Credit Limit from Bank of Communications; Resolution on Applying for General Credit Limit from Bank of Ningbo; Resolution on Applying for General Credit Limit from China Zheshang Bank Co., Ltd. The 19th Meeting of Resolutions of the 19th Meeting of the 10th Board of the 10th 4 December 2023 6 December 2023 Directors Board of Directors 55 Konka Group Co., Ltd. Annual Report 2023 The 20th Meeting of Resolutions of the 20th Meeting of the 10th Board of the 10th 11 December 2023 Directors Board of Directors 2. Attendance of Directors at Board Meetings and General Meetings Attendance of directors at board meetings and general meetings The director Total number Board Board Board failed to of board Board meetings meetings meetings the attend two General meetings the meetings attended by Director attended director consecutive meetings director was attended on way of through a failed to board attended eligible to site telecommuni proxy attend meetings attend cation (yes/no) Liu Fengxi 15 1 14 0 0 No 0 Yao Wei 15 1 14 0 0 No 0 Zhou Bin 15 1 14 0 0 No 4 Ye Xingbin 15 1 14 0 0 No 4 Liu Jian 15 1 14 0 0 No 0 Wang 15 1 14 0 0 No 0 Shuguang Deng 15 1 14 0 0 No 0 Chunhua Why any director failed to attend two consecutive board meetings: Not applicable 3. Objections Raised by Directors on Matters of the Company Indicate by tick mark whether any directors raised any objections on any matter of the Company. □ Yes √ No No such cases in the Reporting Period. 4. Other Information about the Performance of Duty by Directors Indicate by tick mark whether any suggestions from directors were adopted by the Company. √ Yes □ No 56 Konka Group Co., Ltd. Annual Report 2023 Suggestions from directors adopted or not adopted by the Company: During the reporting period, the directors of the company actively attended the relevant meetings, carefully reviewed the proposals, gave full play to the role of "setting strategy, making decisions, and preventing risks", and had an in-depth understanding of the development of semiconductor and other businesses, as well as the company's operating conditions, internal control construction and the implementation of the resolutions of the Board of Directors meeting. Directors of the Company put forward the constructive advices by use of their own professional knowledge towards the internal management. For example, to actively promote the refinement of the Company’s development strategy plan and implementation thereof, to provide advices on expanding the Company’s business, and to pay attention to risks control of the Company such as the cash flow and accounts receivable management. The Company carefully adopted the advices from the Directors and constantly improved and enhanced the management level of the Company. VII Performance of Duties by Specialized Committees under the Board during this Reporting Period Other Numb informat Details er of ion about Commi Member meeti Conven Important opinions and about issues Content with ttee s ngs ed date suggestions raised the conve perform objections ned ance of (if any) duty 1. The arrangement of the audit work on the 2022 Annual Report of the Company was approved. 2. It was consented that the annual financial statements shall be provided to the CPA for the The 2022 Financial annual audit. statements and the Arrangement of the 2022 3. It is required that ShineWing 6 Annual Audit submitted Certified Public Accountants Deng January by the Company’s (special general partnership) Chunhu 2023 financial center (issued by appointed by the Company Audit a, Yao the Company prior to the should carry out the auditing in Commi Wei, 9 entry of the annual CPA) strict accordance with the ttee Wang requirements of the China Shuguan Practice Standards for Certified g Public Accountants, and should promptly communicate with the Committee if major problems are discovered. 2022 Annual Internal No objections were raised 20 Audit Report of Konka regarding the following Februar Group and Konka documents submitted by the y 2023 Group’s Internal Audit Company: 2022 Annual Internal Quality Self-assessment Audit Report of Konka Group and Report submitted by the Konka Group’s Internal Audit 57 Konka Group Co., Ltd. Annual Report 2023 Company Quality Self-assessment Report. The CPAs for annual audit were engaged for No objection was made to the the discussion and review 2022 annual financial statements 10 of the Company's of the Company preliminarily March financial statements after audited by ShineWing Certified 2023 they have issued Public Accountants (special preliminary audit general partnership). opinions. 1. The 2022 annual audit Communications were performed by ShineWing made with the Internal Certified Public Accountants Audit Department of the (special general partnership) was Company; the 2022 satisfying. 2. No objection was annual audit performed made to the 2022 Audit Report by ShineWing Certified 14 issued by ShineWing Certified Public Accountants March Public Accountants (special (special general 2023 general partnership). 3. It was partnership) was proposed that ShineWing appraised; the 2022 Audit Certified Public Accountants Report reviewed and (special general partnership) be retention of the retained for further service as the accounting firm for 2023 audit institution of the Company's was deliberated. 2023 annual financial statements. 2023 Q1 financial No objection was made to the 27 April statements of the 2023 Q1 financial statements of 2023 Company the Company. 2023 Internal Audit Plan 26 May of Konka Group No objection was made to the 2023 submitted by the 2023 Internal Audit Plan of Company Konka Group submitted by the Company. Rehiring ShineWing Make a proposal to rehire Certified Public ShineWing Certified Public Accountants (special 1 Accountants (special general general partnership) as August partnership) as the audit firm and the audit firm and internal 2023 internal control audit firm for the control audit firm for the company’s 2023 financial company’s 2023 financial statements. statements. 25 2023 interim financial No objection was made to the August statements of the 2023 interim financial statements 2023 Company of the Company. 30 2023 Q3 financial No objection was made to the October statements of the 2023 Q3 financial statements of 2023 Company the Company. Remun Wang 1. Letter of Commitment 1. The Letter of Commitment on eration Shuguan on Performance for 2023 Performance for 2023 for the and g, Yao 14 for the Company’s Company’s Management Team Apprais Wei, Ye 2 March Management Team was approved and was agreed to al Xingbin, 2023 be submitted to the Board for Commi 2. Remunerations of deliberation. Liu Jian, directors, supervisors and ttee Deng senior management as 2. Remunerations of directors, 58 Konka Group Co., Ltd. Annual Report 2023 Chunhu disclosed supervisors and senior a management as disclosed in the 3. Revised Remuneration Company's 2022 Annual Report Management Measures were true. Remunerations of for Heads of Konka directors, supervisors and senior Group Co., Ltd. management as disclosed were consistent with the Company's salary management policy and no violation was found. 3. The revised Remuneration Management Measures for Heads of Konka Group Co., Ltd. was agreed to be submitted to the Board for deliberation. Adjusting Agree to adjust remuneration 15 standard of senior management August remunerations of and submit it to the Board of the 2023 senior management Company for deliberation Approve the reappointment of Mr. Zhou Bin as the President of Liu Jian, the Company, Mr. Cao Shiping Yao as the Executive Vice President Wei, of the Company, Mr. Li Hongtao, Nomin Zhou Yang Bo and Mr. Lin Hongfan as ation Bin, 8 May Change of senior Vice President of the Company, 1 Commi Wang 2023 management Mr. Wu Yongjun as Board ttee Shuguan Secretary of the Company, Mr. Li g, Deng Chunlei as CFO of the Company, Chunhu and endorse the submission of a this proposal to the Company’s Board of Directors for deliberation. VIII Performance of Duty by the Supervisory Committee Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the Reporting Period. □ Yes √ No The Supervisory Committee raised no objections in the Reporting Period. IX Employees 1. Number, Functions and Educational Backgrounds of Employees Number of in-service employees of the Company as the parent 1,621 at the period-end Number of in-service employees of major subsidiaries at the 12,485 period-end Total number of in-service employees at the period-end 14,106 59 Konka Group Co., Ltd. Annual Report 2023 Total number of paid employees in the Reporting Period 14,106 Number of retirees to whom the Company as the parent or its 0 major subsidiaries need to pay retirement pensions Functions Function Employees Production 7,335 Sales 3,405 Technical 1,479 Financial 609 Administrative 1,278 Total 14,106 Educational backgrounds Educational background Employees Master and above 365 Bachelor 3,171 Junior college 3,808 High school and below 6,762 Total 14,106 2. Employee Remuneration Policy The Company promulgated its remuneration system with the operating strategy of serving for the enterprise development and enhancement, and the principle of deciding the remuneration according to the post, business performance and capabilities, as well as the market competitiveness and internal fairness. And it decided the employee’s remuneration level according to its business earnings, the posts and fulfillment of the business performance of the employee. 3. Employee Training Plans The Company adhered to the people-oriented and paid special attention to cultivate the talents. Surrounded by the actual strategic business development, the Company actively organized and 60 Konka Group Co., Ltd. Annual Report 2023 carried out various training activities, and continuously perfected its talents cultivation system, as well as further enhanced the employee’s professional skills and overall quality. In 2023, under the new development strategy of "One Axis, Two Wheels, and Three Growth Drivers," the Company upheld the principle of Party leadership in talent management. With the implementation of lean management as a prerequisite, the Company continued to perform tasks from three aspects: "Driving strategy implementation, supporting business transformation, and coordinating talent development". Focusing on the project operation system of "Three Tiers and Seven Brands", Konka open classes have been organized throughout the year for all employees of the Company; and organized and carried out the new employee’s training projects respectively for the graduates from campus recruiting and personnel from social recruitment. Meanwhile, the Company continued to strengthen its professional development efforts and empower business growth by conducting ongoing professional training for marketing, research and development, manufacturing, and other departments. 4. Labor Outsourcing □ Applicable √ Not applicable X Profit Distributions (in the Form of Cash and/or Stock) How the profit distribution policy, especially the cash dividend policy, was formulated, executed or revised in the Reporting Period: √ Applicable □ Not applicable The cash dividend policy of the Company was clearly stated in its Articles of Association, with specific and clear dividend standards and ratios. The relevant decision-making procedure and mechanism were sound; the independent directors faithfully performed their duties and played their due role; and the non-controlling interests were able to fully express their opinion and desire and their legal rights and interests were fully protected. The Company strictly followed the cash dividend policy in its Articles of Association, and the cash dividend payout of the Company was in line with its Articles of Association and the relevant resolution of the Shareholders’ Meeting. According to the requirements of the Listed Company Supervision Guideline No. 3-Listed Companies’ Cash Dividend issued by the CSRC, the Company has revised the dividend payout policy in its Articles of Association, further clarifying the priority and proportion of cash dividend in dividend payouts. In order to further normalize its shareholder return mechanism, push forward the establishment of a scientific, sustained and stable shareholder return mechanism, enhance the 61 Konka Group Co., Ltd. Annual Report 2023 transparency and operability of decision-making for its dividend payout policy, and effectively protect the legal rights and interests of public investors. Special statement about the cash dividend policy In compliance with the Company’s Articles of Association and resolution of general meeting Yes Specific and clear dividend standard and ratio Yes Complete decision-making procedure and mechanism Yes Independent directors faithfully performed their duties and played their due role Yes Specific reasons and the next steps it intends to take to enhance the investor return level if the N/A Company did not pay cash dividend: Non-controlling interests are able to fully express their opinion and desire and their legal Yes rights and interests are fully protected In case of adjusting or changing the cash dividend policy, the conditions and procedures N/A involved are in compliance with applicable regulations and transparent Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for shareholders despite the facts that the Company has made profits in the Reporting Period and the profits of the Company as the parent distributable to shareholders are positive. □ Applicable √ Not applicable Final Dividend Plan for the Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for Employees □ Applicable √ Not applicable No such cases in the Reporting Period. XII Establishment and Execution of the Internal Control System for the Reporting Period 1. Establishment and Execution of the Internal Control System The Company has established and improved the Company's internal control system in accordance with the regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange, following the basic principles of internal control, and on the basis of the Company's 62 Konka Group Co., Ltd. Annual Report 2023 actual situation. The Company's Financial Audit Committee, and Supervision, Audit and Legal Affairs Center follow the guidance of value management, seek the goal of strengthening risk management and control, continuously enhance audit supervision and internal control evaluation, thereby scrutinizing and evaluating the Company's internal control management. The Company's 2023 Annual Internal Control Self-Assessment Report comprehensively, factually and accurately reflects the actual situation of the Company's internal control. During the Reporting Period, the Company had no major or significant deficiencies in its internal control. 2. Material Internal Control Weaknesses Identified for the Reporting Period □ Yes √ No XIII Management and Control over Subsidiaries by the Company for the Reporting Period Integration Countermeasur Settlement Follow-up Subsidiary Integration plan Problem progress es taken progress settlement plan N/A N/A N/A N/A N/A N/A N/A XIV Internal Control Self-Evaluation Report or Independent Auditor’s Report on Internal Control 1. Internal Control Self-Evaluation Report Disclosure date of the internal control self-evaluation report 2 April 2024 Index to the disclosed internal control self-evaluation report http:// cninfo.cn/new/index Evaluated entities’ combined assets as % of consolidated total assets Over 90.00% Evaluated entities’ combined operating revenue as % of consolidated Over 90.00% operating revenue Identification standards for internal control weaknesses Weaknesses in internal control not related to Type Weaknesses in internal control over financial reporting financial reporting Those with the following characteristics should be recognized The following signs indicated there may exist as great defect: (1) found out there were malpractices of the great defect among the internal control of the Directors, Supervisors and Senior Executives of the Company non-financial report: (1) serious violations of that formed significant influences on the financial report; (2) national laws and regulations in business Nature the Company revised the published financial report and operations; (2) frequent exposure of negative standard revised the great misstatements caused by the malpractices or news in the media, causing significant damage to the mistakes; (3) CPA found out there was great misstatement the company's reputation; (3) departure of the of the current financial report while didn’t found during the core management team in droves or serious operating process of the internal control; (4) the supervision of turnover of personnel in key positions; and (4) the internal control by the Finance Audit Committee and the lack of systematic control of important 63 Konka Group Co., Ltd. Annual Report 2023 internal audit institution of the Company was invalid; (5) not businesses or systematic failure of the system; yet revised the great defect after the reasonable period as and (4) great deficiencies identified in internal which was discovered among the internal control assessment; control evaluations were not rectified in a timely (6) the significant business lacked of systematic control or the manner. systematic control was invalid.. Those with the following characteristics should be recognized as significant defect: (1) The following signs indicated there may exist not yet chosen or applied the accounting polices according to significant defect among the internal control of the generally accepted accounting standards; (2) not yet the non-financial report: (1) negative news constructed the anti-spam process or control measures; (3) as occurred rather frequently which caused rather for the accounts disposal of the unconventional or special big harm to the Company’s reputation; (2) the transactions, there was no corresponding control mechanism outflow of the key position personnel was rather or execution or the existence of the corresponding supplement serious; (3) there was obvious defect among the control; (4) there was one or multiple defects during the control system of the significant business; (4) the control of the compile of the financial report at the period-end significant defect found among the internal and could not reasonable guarantee the statement of the control assessment not yet be revised in time. compiled financial report reach the real and accurate target; Other defects from the internal control hadn’t (5) not yet revised the significant defect after the reasonable reached the recognition standards of the great period as which was discovered among the internal control defect or significant defect should be recognized assessment. as general defect. Other defects from the internal control hadn’t reached the recognition standards of the great defect or significant defect should be recognized as general defect. Great defect: potential misstatement amount≥1% of the gross profit margin of the 2023 consolidated financial report of the Company; significant defect: 0.5% of the gross profit margin of the 2023 consolidated financial report of the Company Implement in accordance with the quantitative Quantitativ ≤potential misstatement amount < 1% of the gross profit criteria of internal control defect evaluation in e standard margin of the 2023 consolidated financial report of the financial statements Company; general defect: potential misstatement amount < 0.5% of the gross profit margin of the 2023 consolidated financial report of the Company. Number of material weaknesses in internal control over financial reporting 0 Number of material weaknesses in internal control not related to financial 0 reporting Number of serious weaknesses in internal control over financial reporting 0 Number of serious weaknesses in internal control not related to financial 0 reporting 2. Independent Auditor’s Report on Internal Control √ Applicable □ Not applicable Opinion paragraph in the independent auditor’s report on internal control We considered that, in all the significant aspects, Konka Group maintained efficient internal control of the financial report according to the C-SOX and the relevant regulations on 31 December 2023. Disclosure of such report Disclosed 64 Konka Group Co., Ltd. Annual Report 2023 Disclosure date 2 April 2024 Index to such report disclosed http:// cninfo.cn/new/index Type of the auditor’s opinion Unmodified unqualified opinion Material weaknesses in internal control not related to financial None reporting Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s report on the Company’s internal control. □ Yes √ No Indicate by tick mark whether the independent auditor’s report on the Company’s internal control is consistent with the internal control self-evaluation report issued by the Company’s Board. √ Yes □ No XV Rectifications of Problems Identified by Self-inspection in the Special Action for Listed Company Governance The Company has completed the self-inspection in accordance with the relevant requirements of the CSRC and rectified the problems identified in the self-inspection. 65 Konka Group Co., Ltd. Annual Report 2023 Part V Environmental and Social Responsibility I Major Environmental Issues Indicate by tick mark whether the Company or any of its subsidiaries is identified as a major polluter by the environmental protection authorities. √ Yes □ No Policies and industry standards pertaining to environmental protection The Company abides by environmental protection laws and regulations, such as the Environmental Protection Law of the People’s Republic of China, Water Pollution Prevention and Control Law of the People’s Republic of China, Air Pollution Prevention and Control Law of the People’s Republic of China, Noise Pollution Prevention and Control Law of the People’s Republic of China, Solid Waste Pollution Prevention and Control Law of the People’s Republic of China, and others. The water pollutant discharge standards include the Emission Standard of Water Pollutants for Electroplating DB44/1597-2015 and the Water Pollutant Discharge Limit Standard of Guangdong Province DB44/26-2001. The air pollutant emission standards include the Emission Standard of Volatile Organic Compounds for Printing Industry DB44/815-2010, Emission Standard of Electroplating Pollutants GB21900-2008, Emission Standard of Odorous Pollutants GB14554-93, and Emission Control Standard of Volatile Organic Compounds for Unorganized Emissions GB37822-2019. Status of Environmental Protection Administrative License 1. XingDa HongYe XingDa HongYe received approval from the Zhongshan Environmental Protection Bureau to establish and construct its facility in 2004 (ZH.H.J. [2004] No. 61), followed by subsequent approvals under ZH.H.J.D. [2008] 06250 and ZH.H.J.D. [2010] 04469 in 2008 and 2010 respectively. After the original project of XingDa HongYe was put into production, it underwent two acceptance stages: the first stage in 2008 (H.Y [2008] 02) and the second stage in 2012 (ZH.H.Y. Report [2012] 000092). Xingda Hongye enlisted the services of the Zhongshan Environmental Protection Science Research Institute in December 2012 to perform an environmental impact evaluation for their proposed technological upgrade and expansion initiative. Following this, on 31 December 2012, the Environmental Protection Bureau of Zhongshan City granted No. ZH.H.J.SH. (2012) 115 Approval on the Environmental Impact Assessment Report for Technological Upgrade and Expansion 66 Konka Group Co., Ltd. Annual Report 2023 Program of GuangDong XingDa HongYe Electronic Co., Ltd. The scheme allowed for an increased production of six-layer circuit boards, eight-layer and above circuit boards, and HDI boards, while reducing the production of single-sided circuit boards. After the completion of the technological upgrade and expansion, the production capacity was expected to reach a total of 200,000 square meters for single-sided circuit boards per year, 250,000 square meters for double-sided circuit boards per year, 300,000 square meters for four-layer circuit boards per year, 200,000 square meters for six-layer circuit boards per year, 150,000 square meters for eight-layer and above circuit boards per year, and 100,000 square meters for HDI boards per year. The technical renovation and expansion project maintained the original plating equipment and process unchanged and added a browning process to the existing production process. The additional plating capacity was all outsourced. The technical renovation and expansion project began construction in 2013, was completed in January 2018, and was commissioned from 10 February to 8 July 2018. The construction of the expansion project met the requirements of the environmental impact report approval and the conditions for environmental protection acceptance of the completed construction project. In 2021, the national pollutant discharge permit of XingDa HongYe was renewed/replaced with certificate number 91442000768405216J001P. In 2022, the national pollutant discharge permit was changed, with certificate number 91442000768405216J001P. In 2023, the national pollutant discharge permit was changed, with certificate number 91442000768405216J001P 2. Boluo Konka and Boluo Konka Precision Boluo Konka Precision Technology Co., Ltd. was approved by the Huizhou Environmental Protection Bureau in 2000 (H.S.H.J. [2000] No.23) and began production the same year. Its pollution discharge permit number is 91441322721121283N001U. Boluo Konka enlisted the services of Huizhou Environmental Science Research Institute in January 2007 to carry out an environmental impact assessment for its expansion project. No. H.SH.H.J. [2007] J32 Approval on Environmental Impact Report for Boluo Konka’s Double-sided and Multilayer Board Project was issued by the Environmental Protection Bureau of Huizhou City on 8 February 2007. The approved expansion project included the installation of electroplating equipment and processes, allowing for an increase in production capacity to 1 million square meters for single-sided circuit boards per year and 650,000 square meters for double-sided and multilayer circuit boards per year. Upon completion, the project underwent an environmental protection acceptance inspection, satisfying the requirements of the environmental impact assessment approval. The company also obtained a pollutant discharge permit in the same year and underwent a name change to Boluo Konka Precision Technology Co., Ltd. In 2020, the company received a national pollutant discharge permit bearing certificate number 91441322799316208F001V. Boluo Konka Precision will produce 1.65 million square meters per year of double-sided and multilayer circuit 67 Konka Group Co., Ltd. Annual Report 2023 boards, upon the Department of Ecology and Environment of Guangdong Province's approval of the Report on the Environmental Impact of the Circuit Boards Expansion Project with an Annual Capacity of 1 million square meters (Y.H.SH. [2023] No. 124) in June 2023. The regulations for industrial emissions and the particular requirements for controlling pollutant emissions those are associated with production and operational activities. T Num Distrib ot Exc ber Name Type of Way ution al essi Name of of Discharge Discharge Approved of major of of di ve major disch concentration/inte standards total pollut polluta disch dischar sc disc pollutants arge nsity implemented discharge er nts arge ge ha harg outle outlets rg e ts e PH, total PH 6-9; total copper, Total copper≤0.3mg/L; COD, discharge COD≤50mg/L; ammonia of major ammonia nitrogen, pollutants: nitrogen≤8mg/L; total COD total nitrogen, Disch 49 19.061250 Main nitrogen≤15mg/L total arge 7, tons/year; Pollutio dischar; total phosphor of GB 21900-2008 83 ammonia ni Xing n ge phosphorus≤0.5m us, total statio Discharge 5 trogen Da sources outlet g/L; total Non cyanide, nary 1 Standard For to 3.0498 Hong of of the cyanide≤0.2mg/L e total pollut Pollutants From ns tons/year; Ye waste waste; total nickel, ion Electroplating /y total water water nickel≤0.1mg/L; total iron, sourc ea nitrogen station total iron≤2mg/L; total es r 32.9792 total aluminum tons/year; aluminum≤2mg/L ,total ; petroleum phosphorus petroleum≤2mg/L ,0.2082 ;suspended suspende tons/year solids≤30mg/L d solids Sulfuric Three sulfuric acid Emission Standard Total 2, acid on the fume≤30mg/m3; for Electroplating discharge: 98 fume, roof of nitrogen Pollutants 2,986,560,0 6, hydrogen Disch plant oxide≤200mg/m3 GB21900-2008 00 standard 56 chloride, arge 1, ten; hydrogen Air Emission cube/year 0, formalde of on the chloride≤30mg/m Limits Table 5, (note: the Xing Waste 00 hyde, statio roof of 3; hydrogen Emission standard total Da gas 0 Non hydrogen nary 14 plant 2 cyanide≤0.5mg/m of Volatile discharge is Hong polluta st e cyanide, pollut and 3; Organic not stated Ye nts an nitrogen ion one on TVOC≤90mg/m3 Compounds for in the latest da oxide, sourc the; Printing Industry version of rd ammonia, es roof of benzene≤1mg/m3 DB44/815-2010; national cu benzene, the; Guangdong Air discharge be toluene+x cantee toluene+xylene≤1 Pollutant Emission permit in /y ylene, n 5mg/m3; tin and Standard 2021; two ea TVOC, its DB44/27-2001 the exhaust 68 Konka Group Co., Ltd. Annual Report 2023 tin and its compounds≤8.5m Second Level r towers compoun g/m3; Standard in the were added ds, PM(dust)≤120mg Second Period, in 2021; PM(dust) /m3 Emission standard calculated for Odor Pollutants based on (GB 14554-1993) air volume Table 2 Standard in environme ntal impact assessment ) 1. Discharge standard of discharge permit: Discharge Standard of Electroplating 31 Water Pollutant for 1. Emission 8, Electroplating standard for 30 DB44/1597-2015 pollution 0 Table 1 Pearl discharge to River Delta certificate: ns Discharge COD is copper≤0.5mg/L; /y Standard; Water 19.2 COD≤80mg/L; ea Pollutant tons/year; ammonia r PH, Discharge Limit ammonia Disch nitrogen≤10mg/L N copper, Main Standard of nitrogen is Boluo arge; total ot Pollutio COD, dischar Guangdong 2.4 Konka of nitrogen≤20mg/L e: n ammonia ge Province tons/year; and statio; total ac sources nitrogen, outlet DB44/26-2001; 2. total Non Boluo nary 1 phosphorus≤0.5m co of total of the Local discharge nitrogen is e Konka pollut g/L; 2. local rd waste nitrogen, waste standard: BFBH 4.8 Precis ion emission in water total water [2019] No. 58 tons/year. ion sourc standard: g phosphor station Document: COD, Note: es copper≤0.5mg /L; to us ammonia nitrogen, according COD≤30mg/L; di total phosphorus to the ammonia sc based on discharge nitrogen≤1.5mg/ ha "Environmental certificate L; total rg Quality Standards nitrogen≤10mg/L e for Surface Water ;total pe GB3838-2002" phosphorus≤0.3m r Category IV water g/L mi standard, the total t nitrogen discharge reaches 50% of discharge limit requirement of the corresponding industry Boluo Sulfuric Disch Six on sulfuric acid Emission Standard The total Konka Waste acid arge the fume≤30mg/m3 for Electroplating discharge is and fume, of roof of; nitrogen Pollutants not stated Non gas poll 20 / Boluo hydrogen statio plant oxide≤200mg/m3 GB21900-2008 in the latest e utants Konka chloride, nary 1,; hydrogen Air Emission version of Precis formalde pollut fourtee chloride≤30mg/m Limits Table 5, national 69 Konka Group Co., Ltd. Annual Report 2023 ion hyde,hydr ion n on 3; TVOCogen Guangdong Air discharge ogen sourc the chl; benzenen Pollutant Emission permit in cyanide, es roof of chlori; Standard 2020 nitrogen plant 2 methylbenzenorid DB44/27-2001 the oxide, and e≤30; Second Level ammonia, one in dimethylbenzene Standard in the benzene, sewag de≤30mg/; tin Second Period, methylbe e and its Emission standard nzene, station compounds≤8.5m for Odor Pollutants TVOC, g/m3; PM (GB 14554-1993) tin and its ( dust ) ≤≤stand Table 2 Standard, compoun i; oil Emission standard ds, PM fume≤2mg/m3 of cooking fume (dust), oil (GB18483-2001) fume Treatment of pollutants 1. XingDa HongYe All production equipment of Guangdong Xingda Hongye Electronics Co., Ltd. has been set up with supporting environmental protection facilities according to the requirements of environmental impact assessment. The discharge of wastewater, waste gas and noise as well as the disposal of all solid wastes in the Company all met the standards during the Reporting Period. The sewage treatment centre of Guangdong Xingda Hongye Electronics Co., Ltd. with an investment of about RMB15 million was formally put into production in June 2007, and the treatment capacity of the sewage treatment facility was 2,566 tons/day. After technical improvement and expansion, the capacity increased to 2,900 tons/day with the treatment process remaining unchanged. In 2022, RMB20 million was invested to increase a set of sewage treatment facility which had been put into operation so as to ensure stable discharge of sewage up to standard. Currently, the sewage treatment facilities are functioning well and the main pollutant discharge meets the discharge standards and environmental assessment standards. The pollutants are discharged to Fushachong after being treated at the self-built sewage treatment station. 2. Boluo Konka and Boluo Konka Precision All production equipment of Boluo Konka and Boluo Konka Precision has been reported for environmental assessment, review and approval. The supporting environmental protection and pollution control facilities have been designed by pollutant type and concentration and effectively operated in a targeted manner. During the Reporting Period, the discharge standards were met in terms of industrial waste water, exhaust and factory noise, and all industrial waste generated was disposed of in compliance with environmental laws and regulations. Boluo Konka was established in 2000. To manufacture single sided PCBs, it invested 70 Konka Group Co., Ltd. Annual Report 2023 approximately RMB 5 million in constructing a sewage treatment station without the biochemical treatment function and featuring a discharge capacity of 300 tons per day. In 2007, Boluo Konka expanded its factory by starting the Phase II project, which was submitted for environmental assessment as Boluo Konka PCB Double Sided and Multi-Layer PCB Project (later the project owner was changed into Boluo Konka Precision). It spent about RMB 10 million on constructing the Phase II sewage treatment station to add the biochemical treatment function with a discharge capacity of 800 tons per day. In 2019, according to the requirements in the documents issued by Boluo County Ecology and Environment Bureau, the two sewage treatment stations of Boluo Konka and Boluo Konka Precision must be upgraded towards higher standards. Through comprehensive assessment of the professional environmental protection company, it was decided that the sewage treatment stations of the said companies be combined to meet the upgrading requirements. Boluo County Ecology and Environment Bureau approved the combination of the discharge outlets of the aforementioned companies, and Boluo Konka would appoint Boluo Konka Precision to treat sewage. After the combination of discharge outlets, the discharge capacity would reach 1,100 tons per day. The aforementioned two companies spent about RMB 20 million between 2019 and 2020 on upgrading the sewage treatment stations towards higher standards, and added industrial advanced processes and treatment systems, such as RO water treatment, Fenton oxidation and MBR films. After the technological improvements and expansion, the sewage treatment reaches 2,200 tons per day (with a discharge capacity of 1,100 tons per day) with a reuse rate of more than 60%. At present, the waste water treatment facilities are operating in good conditions; the discharge of major pollutants meets the discharge standards. After advanced treatment of the water reuse facilities, the water treated by the sewage stations that meets the standards will be reused in the plants, while the remaining water will be discharged to the municipal pipe network to be processed by the urban and rural water treatment factory before being discharged to the Gongzhuang Rive section of Dong gian g River. Environmental self-monitoring plan 1. XingDa HongYe According to the requirements of the Environmental Protection Administration, Xingda Hongye 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 71 Konka Group Co., Ltd. Annual Report 2023 monitoring for the PH, COD and ammonia nitrogen pollutants discharged in wastewater through real-time monitoring and an automatic frequency of every two hours, entrusts the qualified third- party online monitoring equipment operation and maintenance institute to carry out periodic maintenance on automatic monitoring equipment and monitoring data networking equipment, and entrusts the qualified third-party monitoring unit to carry out the “three wastes” project monitoring. All self-monitoring plan results will be reported and disclosed on public platforms on a periodic basis. In the case of normal production, the results will be updated on a daily basis, with online monitoring data are disclosed in real time, or manual monitoring data on a monthly and quarterly basis are disclosed every two hours. 2. Boluo Konka and Boluo Konka Precision In accordance with the requirements of the environmental protection administration, Boluo Konka and Boluo Konka Precision attach great importance to environmental monitoring management. Thus, pursuant to the Measures for Self-Monitoring and Information Disclosure of National Key Monitored Enterprises and requirements of the environmental impact assessment, they have formulated the Environmental Self-Monitoring Plan and reported to the Municipal Environment Protection Bureau for approval and record. Meanwhile, the PH and flow rate of wastewater discharge are automatically monitored in real time, and the pollutants such as COD, ammonia nitrogen and total phosphorus are automatically monitored online every two hours. Furthermore, they entrust 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 and entrust the qualified third-party monitoring unit to carry out the "three wastes" project monitoring, in line with the newly released national pollutant discharge permit and the corporate self-monitoring plans that have been filed. All self-monitoring plan results will be reported and disclosed on public platforms on a periodic basis. In the case of normal production, the results will be updated on a daily basis, with online monitoring data are disclosed in real time, or manual monitoring data on a monthly and quarterly basis are disclosed every two hours. Contingency plan for emergent environmental incident 1. XingDa HongYe In strict accordance with requirements of laws, regulations and relevant documents, such as Law of the People’s Republic of China on Emergency Response and Interim Measures on Environmental Emergency Response Plan, Guangdong Xingda Hongye Electronics Co., Ltd. has established risk prevention measures and emergency response plans, kept its emergency equipment in a normal state, formulated the Contingency Plan for Emergent Environmental Incident, and put on records at 72 Konka Group Co., Ltd. Annual Report 2023 Zhongshan Environmental Protection Bureau, Guangdong Province, record No.: 4420002017044M. In addition, the Company conducts a drill of major environmental pollution incident on its factory to enhance its emergency response capabilities for emergent environmental pollution incidents. Furthermore, Guangdong Xingda Hongye Electronics Co., Ltd. has built an emergency pool (600m3, underground pool of sewage treatment station) and set up a fire pool (500m3 and located on Floor 1 of Factory Building No. 2), which serve as temporary storage pools for exterior drainage or fire drainage to eradicate accidental discharge of wastewater in the case of failed operation of the sewage transmission pipeline or fire accident due to outage or other special circumstances. The sewage transmission pipeline has been equipped with anti-corrosion and cathodic protection using anti-corrosion pipes and carbon steel pipes. Pursuant to the new discharge standards, the related discharge pipeline has been modified and the production department has been required to discharge strictly in accordance with discharge standards to cut the costs of wastewater treatment. Different types of wastewater are normally and properly treated through fine shunting. Personnel have been specially arranged to manage the chemical liquid warehouse and exert reasonable control and requirements over the liquid discharge by the plant and timely transportation of the liquid by suppliers; emergency tools such as protective masks, boots and immiscible pumps have been equipped. 2. Boluo Konka and Boluo Konka Precision Boluo Konka and Boluo Konka Precision strictly abides by Emergency Response Law of the People's Republic of China, Interim Measures for the Management of Emergency Plans for Unexpected Environmental Incidents, other related laws and regulations as well as the requirements of relevant documents. They have established risk prevention measures and emergency plans, such as Emergency Plan for Unexpected Environmental Incidents, and have their emergency equipment run in a normal status. In addition, they have filed with Boluo County Branch of Ecology and Environment Bureau in Huizhou, Guangdong and Huizhou Ecology and Environment Bureau respectively with the file No. 441322-2020-0073-M and 441301-2021-004-M. They organize all staff to conduct drills for major environmental pollution incidents every year to improve their ability for the emergency response to unexpected environmental pollution incidents. Boluo Konka and Boluo Konka Precision are well equipped with all necessary facilities for emergency response to unexpected incidents, including an emergency response pool of industrial waste water (500m3, under the ground of the sewage treatment station) and a firefighting reservoir (300m3, located beside the staff dormitory building). In the event of an unexpected environmental incident, such as leakage or failure of a waste water transporting pipe, the emergency response pool will prevent any accident of industrial waste water; in the event of a fire safety accident, the firefighting reservoir will be put into use. All departments are required to discharge pollutants 73 Konka Group Co., Ltd. Annual Report 2023 strictly in accordance with pollutant discharge standards to reduce the costs of waste water treatment by properly and reasonably dividing solution and waste water discharged from the plants. The chemical warehouses are managed by designated personnel, with standard control and requirements over the loading and unloading of chemical products by suppliers. In terms of emergency response supplies, a full set of emergency rescue tools are prepared, including gas masks, acid and alkaline resistant boots, gloves, goggles, safety ropes, helmets, fire sand and submersible pumps. Input in environmental governance and protection and payment of environmental protection tax In 2023, nearly RMB58 million was input in environmental governance and protection and RMB77,700of environmental protection tax was paid in total. Measures taken to decrease carbon emission in the Reporting Period and corresponding effects □ Applicable √ Not applicable No administrative punishments were received in the Reporting Period due to environmental issues. Reason for Impact of Penalty Rectification Subsidiary punishmen Violations production and results measures t operation Projects Failure to complete the under Jiangxi High environmental impact constructio A fine of The relevant The relevant Transparent assessment approval as n not RMB0.4 production production lines Substrate Material required by the submitted 334 lines have been have been shut Technology Co., environmental impact for million shut down down Ltd. assessment management approval as method. required Other environmental information that should be disclosed 1. XingDa HongYe The environmental protection investment of Guangdong Xingda Hongye Electronics Co., Ltd. for 2023 was approximately RMB18 million, mainly used for the depreciation in Environmental governance equipment and facilities, treatment of sewage, waste gas and solid waste, as well as the maintenance and upgrading of environmental protection equipment. 2. Boluo Konka and Boluo Konka Precision The environmental protection investment of Boluo Konka and Boluo Konka Precision for 2023 was approximately RMB40 million, of which, RMB13 million was used for daily treatment of sewage and waste gas and facility maintenance, RMB25 million was used for extension of sewage 74 Konka Group Co., Ltd. Annual Report 2023 treatment station (of new supporting plant) and RMB2 million was used for constructing the waste gas exhaust tower of the new plant. 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. II Social Responsibility The Company insists the principle of health, stability and sustainable development to benefit shareholders and employees and satisfy customers. In pursuit of economic profits and protection of shareholders’ profits, the Company is active in protecting legal rights of debtors and employees, treating suppliers, customers and consumers in good faith, and participating in environmental protection and community establishment for harmonious development of the Company and society. 1. To protect rights of shareholders and creditors (1) The Company protects rights of shareholders The Company insists protection of rights for all shareholders, especially equal status and legal rights for medium and small shareholders, and make insurance of rights to be informed, participation and vote. The Company would perform all obligations of information disclosure to ensure timely, accurate and complete information and strictly execute confidential system of registrar and insider information to guarantee justice. The Company pays attention to repay to shareholders, and insists mutual development with investors. In the previous three years, the Company shares dividends with all shareholders. The Company strict executes dividend policies regulated in Articles of Association. All cash dividends comply with regulations in Articles of Association and requirements in shareholders’ conference. (2) The Company protects rights of creditors In full consideration of legal rights of creditors, the Company complies with strict business rules of credit cooperation to guarantee legal rights of creditors. No damages upon rights of creditors 75 Konka Group Co., Ltd. Annual Report 2023 happened. 2. The Company performs responsibilities to suppliers and customers (1) It is devoted to improve customer service quality. The Company is insisting philosophy of customer orientation to strengthen customer service management, service consciousness for employees, service levels and to protect rights for customers. Through customer service hot-line, field visit and follow-up service, the Company has set a good corporate image for customers. (2) Be honest to suppliers Following the principle of integrity and mutually beneficial cooperation, the Company keeps good cooperative relations with suppliers at each level. The corporate principle is open, fair and impartial to standardize procurement, protect suppliers’ legal rights and lay solid foundation for further cooperation. 3. Be enthusiastic to social and public welfare undertakings Based on the principle of appreciating and repaying the society, the Company has participated in all kinds of activities for public welfare, cooperated with society, undertaken social responsibilities actively and promoted harmonious development between enterprise and society. 4. Be responsible for employees The Company insists the principle of people orientation to improve working environment, promote occupational skills, provide opportunity and platform for development and growth and encourage self upgradation and realization for employees. Mutual improvement for employees and enterprise could be achieved. (1) Be honest and law-abiding to protect legal rights for employees The Company would strictly comply with laws and regulations in Labor Law and Labor Contract Law to sign labor contract with employees with fair treatment in employment, payment, promotion, training, demission and retirement. Also, the Company would pay all kinds of insurances and housing fund for employees. Regular physical examination would be organized for each year. Any problems found would require re-examination and consultation from a doctor. The Company would improve living quality; enhance cohesive force and sense of belongings through a series of safeguard measures. (2) To protect occupational health for employees 76 Konka Group Co., Ltd. Annual Report 2023 The Company would establish and perfect training, safety assessment by security system to guarantee the safety and occupational health for employees. On the other hand, by promotion of the importance of safety, safety awareness would be rooted in the heart to make all employees abide by safety standards and fully play subjective initiative in protecting self-occupational safety and production safety. (3) To promote occupational skills by diversified professional training The Company has always paid great attention on diversified training for employees. On the one hand, the Company would be meticulous in training of regular business and occupational skills and carry out all requirements positively to improve professional levels by normal training management. On the other hand, the Company would establish methods of self-training platform, training instructor, theme training and lectures to provide colorful training activities. Besides the work, professional and comprehensive quality would be fully promoted. 5. Be responsible for environment The Company concerns about environmental changes and close relationships with environment by creating low carbon economy in technical innovation, from green manufacturing, green products to green industry circular economy. The Company would provide efforts in protecting global ecological environment. In June 2012, subsidized products catalogue had been released jointly by National Development and Reform Commission, Ministry of Industry and Information and Ministry of Finance. Subsequently, the Company would undertake all social responsibilities by improving strategic management, sustainable development and enterprise economic efficiency. It would reattribute all shareholders and would protect legal rights for creditors and employees. To be honest to suppliers and customers, the Company would serve local economic development and participate in social public welfare activities and environment protection. It would undertake all responsibilities in many fields and make attributions to social, economic, and environmental sustainable development for a socialism harmonious society. III Consolidation and Expansion of Poverty Alleviation Outcomes, and Rural Revitalization In 2023, the Company continued to actively purchase the agricultural and sideline products from Tianzhu and Sansui counties in Guizhou Province under the "assistance by consumption" project. The total amount spent on this project in 2023 amounted to RMB67,800. The Company held donation ceremonies for "one-on-one" pairing assistance with students from Chengguan Third Primary School in Sansui County, and for aesthetic education classrooms. A total of 100 Konka "dream partners" donated a sum of RMB328,000. In October 2023, the Company paid visits to the 77 Konka Group Co., Ltd. Annual Report 2023 students receiving assistance. Representatives of the Company's assistance team engaged in "hand- in-hand, face-to-face, and heart-to-heart" conversations with the students, providing them with economic aid and material support to ensure their basic living needs were met. 78 Konka Group Co., Ltd. Annual Report 2023 Part VI Significant Events I Fulfillment of Commitments 1. Commitments of the Company’s De Facto Controller, Shareholders, Related Parties and Acquirers, as well as the Company Itself and Other Entities Fulfilled in the Reporting Period or Ongoing at the Period-End □ Applicable √ Not applicable No such cases in the Reporting Period. 2. Where there Had Been an Earnings Forecast for an Asset or Project and the Reporting Period Was still within the Forecast Period, Explain why the Forecast Has Been Reached for the Reporting Period. □ Applicable √ Not applicable II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its Related Parties for Non-Operating Purposes □ Applicable √ Not applicable No such cases in the Reporting Period. III Irregularities in the Provision of Guarantees □ Applicable √ Not applicable 79 Konka Group Co., Ltd. Annual Report 2023 No such cases in the Reporting Period. IV Explanations Given by the Board of Directors Regarding the Latest “Modified Opinion” on the Financial Statements □ Applicable √ Not applicable V Explanations Given by the Board of Directors, the Supervisory Board and the Independent Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial Statements of the Reporting Period □ Applicable √ Not applicable VI YoY Changes to Accounting Policies, Estimates or Correction of Material Accounting Errors √ Applicable □ Not applicable On 30 November 2022, the Ministry of Finance issued Interpretation No. 16 for the Accounting Standards for Business Enterprises, which stipulates the “accounting treatments for deferred income taxes associated with assets and liabilities arising from a single transaction to which the initial recognition exemption does not apply”, effective for the Company as of 1 January 2023. For lease liabilities and right-of-use assets recognised at the beginning of the earliest period of financial statement presentation in which the provision is first implemented that give rise to taxable temporary differences and deductible temporary differences as a result of a single transaction to which the provision applies, the Company has adjusted the cumulative effect to retained earnings at the beginning of the earliest period of financial statement presentation and other relevant financial statement items in accordance with the said provision and Accounting Standard No. 18 for Business Enterprises—Income Tax. VII YoY Changes to the Scope of the Consolidated Financial Statements √ Applicable □ Not applicable Please refer to 6. Changes in the Scope of Consolidated Financial Statements for the Reporting Period of 2. Revenue and Costs of IV Core Business Analysis in Part III Operating Performance Discussion and Analysis of this Report for details. VIII Engagement and Disengagement of Independent Auditor Current independent auditor Name of the domestic independent auditor ShineWing Certified Public Accountants LLP The Company’s payment to the domestic independent auditor 220 (RMB’0,000) 80 Konka Group Co., Ltd. Annual Report 2023 How many consecutive years the domestic independent auditor has 5 years provided audit service for the Company Names of the certified public accountants from the domestic Tang Qimei, Liu Lihong independent auditor writing signatures on the auditor’s report How many consecutive years the certified public accountants have 3 years, 2 years provided audit service for the Company Name of the overseas independent auditor (if any) N/A The Company’s payment to the overseas independent auditor 0 (RMB’0,000) (if any) How many consecutive years the overseas independent auditor has N/A provided audit service for the Company (if any) Names of the certified public accountants from the overseas independent auditor writing signatures on the auditor’s report (if N/A any) How many consecutive years the certified public accountants have N/A provided audit service for the Company (if any) Indicate by tick mark whether the independent auditor was changed for the Reporting Period □ Yes √ No Independent auditor, financial advisor or sponsor engaged for the audit of internal controls: √ Applicable □ Not applicable The Company appointed ShineWing Certified Public Accountants LLP as the internal control auditor in 2023 with RMB0.7 million (tax-exclusive) of payment for the internal control audit. IX Possibility of Delisting after Disclosure of this Report □ Applicable √ Not applicable X Insolvency and Reorganization □ Applicable √ Not applicable No such cases in the Reporting Period. XI Major Legal Matters √ Applicable □ Not applicable 81 Konka Group Co., Ltd. Annual Report 2023 Index Involved Executi to Discl amount Provisio Decisions and on of disclos General information Progress osure (RMB’0,000 n effects decision ed date ) s inform ation Since Jiangxi Xinxin Jianan Engineering Co., Ltd. (hereinafter referred to as "Jiangxi Xinxin" ), Jiangxi Shining Stone Technology Development Company Limited (hereinafter referred to as "Jiangxi Shining Stone" ), Jiangxi Zhongyi Decorative Materials Co., Ltd. (hereinafter referred to as "Jiangxi Zhongyi" ) failed to repay the loan http:// and its interest to Jiangxi Branch The case is c of China Great Wall Asset reheard The case is The 25 ninfo.c Management Co., Ltd. (hereinafter 31,375.8 No and in the reheard and in the case is June om.cn/ referred to as “Jiangxi Branch of second second instance. in trial 2019 new/in Great Wall Asset” ) who sued the instance. dex court for a judgment to repay the loan of RMB300 million, default penalty of RMB108,000 and interest of RMB13.65 million, and at the same time, nine guarantors including Jiangxi Kangjia, Xinfeng Microcrystalline and Nano Microcrystalline were requested to undertake joint and several liability guarantee. The case is reheard and in the Because of a dispute over a first instance. purchase and sales contract, the Based on the Company's subsidiary, Konka principle of http:// Huanjia Environmental The case is prudence, the 19 c Technology Co., Ltd., sued Dalian reheard The Company has Septe ninfo.c Jinshunda Materials Recycling 9,383.08 No and in the case is accrued mber om.cn/ Co., Ltd., Huanjia Group, Wang first in trial corresponding 2020 new/in Bingde, Zhang Xueyin and Wang instance. impairment dex Renping, requiring them to return reserves in prepayment and pay liquidated accordance with damages. accounting policies. The case is reheard and in the Because of a dispute over a first instance. purchase and sales contract, the Based on the Company's subsidiary, Konka principle of http:// The case is Huanjia, sued Dalian Xinjie prudence, the 19 c reheard The Renewable Resources Co., Ltd., Company has Septe ninfo.c 9,383.08 No and in the case is Huanjia Group, Wang Bingde, accrued mber om.cn/ first in trial Zhang Xueyin and Wang Renping, corresponding 2020 new/in instance. requiring them to return impairment dex prepayment and pay liquidated reserves in damages. accordance with accounting policies. Because of a dispute over a The case is The case is 19 http:// 2,307.9 No The purchase and sales contract, the reheard reheard and in the Septe c case is Company's subsidiary, Konka and in the first instance. mber ninfo.c 82 Konka Group Co., Ltd. Annual Report 2023 Huanjia, sued Dalian Tian xing first Based on the in trial 2020 om.cn/ Renewable Resources Co., Ltd., instance. principle of new/in Huanjia Group, Wang Bingde, prudence, the dex Zhang Xueyin and Wang Renping, Company has requiring them to return accrued prepayment and pay liquidated corresponding damages. impairment reserves in accordance with accounting policies. The case is Because of a dispute over a reheard and in the purchase and sales contract, the first instance. Company's subsidiary, Konka Based on the Huanjia Environmental principle of http:// The case is Technology Co., Ltd., sued prudence, the 19 c reheard The Huanjia Mingtai (Dalian) Company has Septe ninfo.c 3,302.64 No and in the case is Renewable Resources Co., Ltd., accrued mber om.cn/ first in trial Huanjia Group, Wang Bingde, corresponding 2020 new/in instance. Zhang Xueyin and Wang Renping, impairment dex requiring them to return reserves in prepayment and pay liquidated accordance with damages. accounting policies. The case is Because of a dispute over a reheard and in the purchase and sales contract, the first instance. Company's subsidiary, Konka Based on the Huanjia Environmental principle of http:// The case is Technology Co., Ltd., sued Lankao prudence, the 19 c reheard The Shunjia Renewable Resources Company has Septe ninfo.c 3,358.8 No and in the case is Recycling Co., Ltd., Huanjia accrued mber om.cn/ first in trial Group, Wang Bingde, Zhang corresponding 2020 new/in instance. Xueyin and Wang Renping, impairment dex requiring them to return reserves in prepayment and pay liquidated accordance with damages. accounting policies. The case is Because of a dispute over a reheard and in the purchase and sales contract, the first instance. Company's subsidiary, Konka Based on the Huanjia Environmental principle of http:// The case is Technology Co., Ltd., sued Henan prudence, the 19 c reheard The Shunhenghui Renewable Company has Septe ninfo.c 3,337.29 No and in the case is Resources Recycling Co., Ltd., accrued mber om.cn/ first in trial Huanjia Group, Wang Bingde, corresponding 2020 new/in instance. Zhang Xueyin and Wang Renping, impairment dex requiring them to return reserves in prepayment and pay liquidated accordance with damages. accounting policies. Because of a dispute over a The case is purchase and sales contract, the reheard and in the Company's subsidiary, Konka first instance. http:// The case is Huanjia Environmental Based on the 19 c reheard The Technology Co., Ltd., sued Henan principle of Septe ninfo.c 3,358.08 No and in the case is Jiaxin Renewable Resources prudence, the mber om.cn/ first in trial Recycling Co., Ltd., Huanjia Company has 2020 new/in instance. Group, Wang Bingde, Zhang accrued dex Xueyin and Wang Renping, corresponding requiring them to return impairment 83 Konka Group Co., Ltd. Annual Report 2023 prepayment and pay liquidated reserves in damages. accordance with accounting policies. The case is Because of a dispute over a reheard and in the purchase and sales contract, the first instance. Company's subsidiary, Konka Based on the Huanjia Environmental principle of http:// The case is Technology Co., Ltd., sued Henan prudence, the 19 c reheard The Shengxiang Renewable Resources Company has Septe ninfo.c 2,922 No and in the case is Recycling Co., Ltd., Huanjia accrued mber om.cn/ first in trial Group, Wang Bingde, Zhang corresponding 2020 new/in instance. Xueyin and Wang Renping, impairment dex requiring them to return reserves in prepayment and pay liquidated accordance with damages. accounting policies. The case is retired and is pending. As the bills held by the Company Based on the failed to be paid upon maturity, the principle of http:// Company filed a lawsuit with the prudence, the 19 c court, requesting the latter to order The case is Company has The Septe ninfo.c Wuhan Jialian Agricultural 20,000 No retired and accrued case is mber om.cn/ Technology Development Co., is pending. corresponding in trial 2020 new/in Ltd. to pay the aforesaid bills and impairment dex corresponding interest to the reserves in Company. accordance with accounting policies. Because of a dispute over a purchase and sales contract, the The Company Company's subsidiary, Dongguan won and the case Konka Electronic Co., Ltd. filed a is in execution. lawsuit with Shenzhen Nanshan Based on the District People's Court, requesting principle of http:// The the latter to order Dong Guan Gao prudence, the c The case is case is 1 Neng Polymer Limited Company, Company has ninfo.c 9,010.1 No in in June Wang Dong, Shenzhen Xinlian accrued om.cn/ execution. executio 2021 Xingyao Trading Co., Ltd., corresponding new/in n. Shenzhen Jinchuan Qianchao impairment dex Network Technology Co., Ltd., reserves in Puning Junlong Trading Co., Ltd., accordance with Huang Zhihao to pay the overdue accounting payment and corresponding policies. liquidated damages. The case is Because of a dispute over a reheard and in the purchase and sales contract, the first instance. Company's subsidiary, Konka Based on the Huanjia Environmental principle of http:// The case is Technology Co., Ltd., sued prudence, the c reheard The 1 Zhe gian g Jiade Renewable Company has ninfo.c 3,562.89 No and in the case is June Resources Recycling Co., Ltd., accrued om.cn/ first in trial 2021 Huanjia Group, Wang Bingde, corresponding new/in instance. Zhang Xueyin and Wang Renping, impairment dex requiring them to return reserves in prepayment and pay liquidated accordance with damages. accounting policies. 84 Konka Group Co., Ltd. Annual Report 2023 The case is Because of a dispute over a reheard and in the purchase and sales contract, the first instance. Company's subsidiary, Konka Based on the Huanjia Environmental principle of http:// The case is Technology Co., Ltd., sued prudence, the c reheard The 1 Zhe gian g Zhijie Renewable Company has ninfo.c 3,562.89 No and in the case is June Resources Recycling Co., Ltd., accrued om.cn/ first in trial 2021 Huanjia Group, Wang Bingde, corresponding new/in instance. Zhang Xueyin and Wang Renping, impairment dex requiring them to return reserves in prepayment and pay liquidated accordance with damages. accounting policies. The case is Because of a dispute over a reheard and in the purchase and sales contract, the first instance. Company's subsidiary, Konka Based on the Huanjia Environmental principle of http:// The case is Technology Co., Ltd., sued prudence, the c reheard The 1 Zhe gian g Xinkai Renewable Company has ninfo.c 3,562.89 No and in the case is June Resources Recycling Co., Ltd., accrued om.cn/ first in trial 2021 Huanjia Group, Wang Bingde, corresponding new/in instance. Zhang Xueyin and Wang Renping, impairment dex requiring them to return reserves in prepayment and pay liquidated accordance with damages. accounting policies. The case is Because of a dispute over a reheard and in the purchase and sales contract, the first instance. Company's subsidiary, Konka Based on the Huanjia Environmental principle of http:// The case is Technology Co., Ltd., sued Henan prudence, the c reheard The 1 Huanjia Trust Environmental Company has ninfo.c 3,358.8 No and in the case is June Protection Technology Co., Ltd., accrued om.cn/ first in trial 2021 Huanjia Group, Wang Bingde, corresponding new/in instance. Zhang Xueyin and Wang Renping, impairment dex requiring them to return reserves in prepayment and pay liquidated accordance with damages. accounting policies. The case is Because of a dispute over a reheard and in the purchase and sales contract, the first instance. Company's subsidiary, Konka Based on the Huanjia Environmental principle of http:// The case is Technology Co., Ltd., sued Henan prudence, the c reheard The 1 Xincheng Renewable Resources Company has ninfo.c 3,358.8 No and in the case is June Recycling Co., Ltd., Huanjia accrued om.cn/ first in trial 2021 Group, Wang Bingde, Zhang corresponding new/in instance. Xueyin and Wang Renping, impairment dex requiring them to return reserves in prepayment and pay liquidated accordance with damages. accounting policies. Because of a dispute over a The case is The case is http:// purchase and sales contract, the reheard reheard and in the The 1 c Company's subsidiary, Konka 2,090 No and in the first instance. case is June ninfo.c Huanjia Environmental first Based on the in trial 2021 om.cn/ Technology Co., Ltd., sued Henan instance. principle of new/in Guozheng Environmental prudence, the 85 Konka Group Co., Ltd. Annual Report 2023 Technology Co., Ltd., Huanjia Company has dex Group, Wang Bingde, Zhang accrued Xueyin and Wang Renping, corresponding requiring them to return impairment prepayment and pay liquidated reserves in damages. accordance with accounting policies. Because of a dispute over a trust contract, the Company’s subsidiary, Henan Frestec Refrigeration Appliance Co., Ltd. sued Shenzhen Meisenyuan Plastic Electronics Co., Ltd., Shantou http:// The case The Meisen Technology Co.,Ltd., Lin 1 c has entered The Company case is Yuanqin, Huang Ruirong, Dece ninfo.c 4,211.33 No the won and the case in Chuangfu Commerce&Trade Plaza mber om.cn/ execution is in execution. executio Real Estate 2021 new/in phase. n. Development(Huizhou)Co.,Ltd., dex requiring an order to terminate the contract, and them return the payment for goods, pay liquidated damages and give priority to the mortgaged property. Because of a dispute over a trust contract, the Company’s subsidiary, Hainan Konka Material Technology Co., Ltd. sued http:// Shenzhen Meisenyuan Plastic The case The 1 c Electronics Co., Ltd., Shantou has entered The Company case is Dece ninfo.c Meisen Technology Co.,Ltd., 6,806.6 No the won and the case in mber om.cn/ Jiangsu East China Hardware City execution is in execution. executio 2021 new/in Co., Ltd., requiring an order to phase. n. dex terminate the contract, and them return the payment for goods, pay liquidated damages and give priority to the mortgaged property. Because of a dispute over http:// repurchase, the Company sued Luo The case The 1 c Zaotong, Luo Jingxia, Luo has entered The Company case is Dece ninfo.c Zongyin, Luo Zongwu and 24,875.22 No the won and the case in mber om.cn/ Shenzhen Yaode Technology Co., execution is in execution. executio 2021 new/in Ltd., requiring an order to pay the phase. n. dex share repurchase and interests. Note: Courts or arbitration bodies ruled in favor of the Company in the following cases which are currently under enforcement. Details of these cases can be found in the Company's Announcement on Large Amount Pending Lawsuits and Arbitrations disclosed on 25 June 2019 (Announcement No. 2019-63), the Announcement on Accumulative Lawsuits and Arbitrations disclosed on 19 September 2020 (Announcement No. 2020-97), the Announcement on Accumulative Lawsuits and Arbitrations disclosed on 1 June 2021 (Announcement No. 2021-48), the Announcement on Accumulative Lawsuits and Arbitrations disclosed on 1 December 2021 (Announcement No. 2021-101), the Announcement on Accumulative Lawsuits and Arbitrations disclosed on 24 November 2022 (Announcement No. 2022-89), the Announcement on Accumulative Lawsuits and Arbitrations disclosed on 1 June 2023 (Announcement No. 2023-37), the Announcement on Accumulative Lawsuits and Arbitrations disclosed on 22 June 2023 (Announcement No. 2023-39) and the Company's periodic reports: 1. As matured notes were failed to be accepted, the Company has filed a lawsuit with the court to request China Energy Electric Fuel Co., Ltd., China Energy (Shanghai) Enterprise Co., Ltd.., Shanghai Nengping industrial Co., Ltd., and Shenzhen Qianhai Baoying Factoring Co., Ltd. to pay the bill and the corresponding interest to the Company; 2. As matured notes were failed to be accepted, the Company has filed a lawsuit with the court to request Shanghai Huaxin International Group Co., Ltd. and Tianjin International Trade Petrochemical Co., Ltd. to pay the bill and the corresponding interest to the Company; 3. As matured notes were failed to be 86 Konka Group Co., Ltd. Annual Report 2023 accepted, the Company has filed a lawsuit with the court to request Shanghai Huaxin International Group Co., Ltd. Qingdao Bonded Zhongshe International Trading Co., Ltd. and Shenzhen Qianhai Benniu Agricultural Technology Co., Ltd. to pay the bill and the corresponding interest to the Company; 4. As a consequence of the non-payment of a bill upon its expiry, Kongka Factoring has instituted legal proceedings before the court. The lawsuit seeks an injunctive order mandating Tahe Group Co., Ltd., Fuzhou Taijia Industrial Co., Ltd., and Xiamen Lian giường Microelectronics Co., Ltd. to remit payment for the bill amount, along with the corresponding interest, to Kongka Factoring.; 5. As matured notes were failed to be accepted, the Company has filed a lawsuit with the court to request Hefei Huajun Trading Co., Ltd. and Wuhan Jialian Agricultural Technology Development Co., Ltd. to pay the bill and the corresponding interest to the Company; 6. Due to dispute arisen from a logistics contract, the Company’s subsidiary Anhui Konka filed a lawsuit to request the freight forwarder Shanghai Triangle Link Logistics Co., Ltd. Shenzhen Branch to make compensation; 7. Due to contract dispute, the Company’s subsidiary Shenzhen Nianhua applied for arbitration to request the respondent Fang Xianglong and Jiang Yan to make compensation for corresponding annual profit and fund possession cost; 8. Due to payment dispute, the Company’s subsidiary Hong Kong Konka applied for an arbitration to Shenzhen Court of International Arbitration to request the respondent Makena Electronic (Hong Kong) to pay for goods and liquidated damages; 9. Because of a dispute over capital increase, the Company's subsidiary, Shenzhen Konka Investment Holding Co., Ltd., applied for arbitration with the Shenzhen Court of International Arbitration (SCIA), requesting the respondents, Elion Resources Group and Elion Ecological Co., Ltd., to perform the repurchase obligation; 10. As a result of a dispute stemming from an international sale of goods contract, Anhui Konka Electronic Co., Ltd., a subsidiary of the Company, has initiated legal proceedings against Maoxinyuan Electronics (Hong Kong) Co., Ltd. The lawsuit seeks an injunctive order compelling the respondent to pay the applicant the overdue payment interest losses; 11. As a result of a dispute arising from an international sale of goods contract, Anhui Kangzhi Trade Co., Ltd., a subsidiary of the Company, has initiated legal proceedings against B&L TECHNOLOGY CO., LIMITED. The lawsuit seeks an injunctive order compelling the respondent to pay the purchase price, as well as any penalties for breach of contract. 12. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Dalian Guangxin Environmental Protection Equipment Technology Development Co., Ltd., requiring the latter to return equipment payment already made and pay liquidated damages. 13. Because of a dispute over a contract, the Company filed a lawsuit with Zhengzou Intermediate People's Court, requiring Henan Radio and Television Network Co., Ltd. to take delivery of goods, make payment for goods, and pay interest and liquidated damages according to the contract. 14. As a result of contractual disputes, Shenzhen Konka Unifortune Technology Co., Ltd., a subsidiary of the Company, has initiated legal proceedings against Shenzhen Yaode Technology Co., Ltd., Dongsheng Xinluo Technology (Shenzhen) Co., Ltd., Shenzhen Hongyao Dingsheng Investment Management Limited Partnership, Shenzhen Xiangrui Yingtong Investment Management Limited Partnership, Luo Jingxia, Luo Zongwu, Luo Zongyin, Luo Zaotong, and Luo Saiyin, seeking restitution for goods received and claiming damages for breach of contract. 15. On account of the infringement of the Company’s trademark rights and the practice of unfair competition, a lawsuit has been instituted by the Company against Xinshang Electronics Co., Ltd., located in Fu’an City, as well as Fu gian Zhaoguan Industry and Trade Co., Ltd., Jinhua Kangjia Medical Equipment Factory, and Wang Jun, seeking an injunctive order to halt the infringement, and claiming compensation for any incurred losses. 16. Due to the dispute over the entrustment contract, Anhui Kangjia Electronics Co., Ltd., a subsidiary of the company, sued Shenzhen Meisen Plastic Electronics Co., Ltd., Shantou Meisen Technology Co., Ltd., Lin Yuanqin, Huang Ruirong and Jiangsu Huadong Hardware City Co., Ltd., asking for an order to terminate the contract, return the payment for goods and pay liquidated damages, and give priority to the mortgage property. The case is being executed; 17, Due to the contract dispute, the Company's subsidiary Anhui Kangjia Electronics Co., Ltd. sued Shantou Meisen Technology Co., Ltd., Shenzhen Meisen Source Plastic Electronics Co., Ltd., Lin Yuanqin, Huang Ruirong, Jiangsu Huadong Hardware City Co., Ltd., requiring the order to terminate the contract, the defendant to return the payment and pay liquidated damages, the mortgage property priority compensation, the case is being executed; 18. Due to the dispute over the loan contract, the Company sued Yantai Kangyue Investment Co., Ltd., requiring the defendant to repay the loan and interest, and the case is being executed. 19. Due to the dispute over the guarantee contract, Anhui Konka Electronics Co., Ltd., a subsidiary of the Company, sued Maoxinyuan Electronics (Shenzhen) Co., Ltd., requesting the defendant to assume joint and several guarantee liability for the plaintiff, and the case is being executed; 20. Due to the share buyback dispute, the Company's subsidiary Shenzhen Nianhua Enterprise Management Co., Ltd. sued Fang Xianglong and Jiang Yan to buy back the share and pay the buyback price, and the case is being executed. 21. Due to the dispute over the sales contract, Sichuan Kangjia Intelligent Terminal Technology Co., Ltd., a subsidiary of the Company, sued Shenzhen Jun xing Communication Technology Co., Ltd., Shenzhen Hong xing Fengda Industrial Development Co., Ltd., Shenzhen Jun xing Junye Electronics Co., Ltd., Liuyang Huaichuan Heyuan Villa Co., Ltd., Zeng Jiankai and Zhong Yuhua, demanding payment of goods and liquidated damages. The case is being executed. 22. Due to contract disputes, Hong Kong Konka 87 Konka Group Co., Ltd. Annual Report 2023 Communication Technology Co., Ltd., a subsidiary of the Company, sued Hong Kong Jun xing Electronics International Co., Ltd., Zeng Jiankai and Zhong Yuhua, demanding payment of goods and liquidated damages, and the case is being executed. The following cases have been disclosed in current announcements and periodic reports and are currently in trial. Details of these cases can be found in the Company's Announcement on Large Amount Pending Lawsuits and Arbitrations disclosed on 25 June 2019 (Announcement No. 2020-97) and the Announcement on Accumulated Lawsuits and Arbitrations disclosed on 1 June 2021 (Announcement No. 2021-48) and the Announcement on Accumulative Lawsuits and Arbitrations disclosed on 1 December 2021 (Announcement No. 2021-101), the Announcement on Accumulative Lawsuits and Arbitrations disclosed on 24 November 2022 (Announcement No. 2022-89), the Announcement on Accumulative Lawsuits and Arbitrations disclosed on 1 June 2023 (Announcement No. 2023-37), the Announcement on Accumulative Lawsuits and Arbitrations disclosed on 22 June 2023 (Announcement No. 2023-39) and the Company's periodic reports: 1. The customer of Hong Kong Konka, H-BUSTER SAO PAULO INDUSTRIAE COMERCIO S.A (Brazil) was insolvent, and obtained the approval of the judicial reorganization application of Cotia Third Civil Court of the Court of Sao Paulo, Brazil in May 2013. As the creditor of H-BUSTER, Hong Kong Konka filed the debt declaration documents, and in August 2014, the amount confirmed of debt was USD2.78 million. 2. Because of a dispute over an agency agreement, the Company's subsidiary, Henan Frestec Refrigeration Appliance Co., Ltd., sued Shantou Meisen Technology Co., Ltd., Shenzhen Meisenyuan Plastic Electronics Co., Ltd., Lin Yuanqin, Huang Ruirong, Jiangsu Huadong Hardware Zone Co., Ltd., and Chuangfu Commerce & Trade Plaza Real Estate Development (Huizhou) Co., Ltd., requesting to terminate the contract and requesting them to return the payment of goods and liquidated damages and priority shall be given to the payment for the secured assets, and the case was heard in the second trial; 3. In view of a dispute arising from a commission contract, Shenzhen Konka Pengrun Technology & Industry Co., Ltd., a subsidiary of the Company, has instituted legal proceedings against Guang’an Ou ăn kít Electronic Technology Co., Ltd., Guan Hongshao, Huaying Gaoke De Electronic Technology Co., Ltd., Huaying Gaoke Long Electronic Technology Co., Ltd., Guizhou Jiaguida Technology Co., Ltd., Sichuan Hongrongyuan Property Co., Ltd., Du Xinyu, Lin Bolong, and Wang Shisheng, seeking an order for the defendants to pay the purchase price and claiming damages for breach of contract; 4. Due to a dispute arising from a guarantee contract, Hong Kong Konka Limited, a subsidiary of the Company, has initiated legal proceedings against Xu Xiang, Zheng Baoyao, Ke Hanhua, and Shenzhen Jinzhong Industry Co., Ltd., seeking an order for the defendants to assume guarantee liability, and the case has been closed; 5 As a result of a dispute arising from an international sale of goods contract, Jiaxin Technology Co., Ltd., a subsidiary of the Company, has initiated legal proceedings against Dingxin Electronic Technology (Hong Kong) Co., Ltd., Chen Wenhuan, and Chen Baohong, seeking an order for the defendants to pay for the goods and claiming damages for breach of contract; 6. Due to a dispute arising from an installment purchase contract, Wu Rong has instituted legal proceedings against the Company and its subsidiary, Shenzhen Konka Electronics Technology Co., Ltd., seeking an order for the payment of the purchase price and overdue payment interest to the plaintiff, and the case is being heard in the second instance; 7. As a result of a dispute arising from a contract, Shenzhen Oriental Entrepreneurship Investment Co., Ltd. has initiated legal proceedings against the Company, seeking an order for the payment of the repurchase amount and claiming damages for breach of contract. 8. As a result of a dispute arising from a third-party objection to execution, Konka Huanjia Environmental Technology Co., Ltd., a subsidiary of the Company, has instituted legal proceedings against Fuxin Bank Co., Ltd. and Huanjia Group Co., Ltd., seeking an order from the court to affirm the plaintiff’s ownership of the goods and to exclude the defendant’s execution, and the case is reheard and in the first instance. 9. As a result of a dispute arising from a third-party objection to execution, Konka Huanjia Environmental Technology Co., Ltd., a subsidiary of the Company, has instituted legal proceedings against Fuxin Bank Co., Ltd. and Dalian Jinjia Materials Recycling Co., Ltd., seeking an order from the court to affirm the plaintiff’s ownership of the goods and to exclude the defendant’s execution, and the case is reheard and in the first instance. 10. Due to a dispute arising from a third-party objection to execution, Konka Huanjia Environmental Technology Co., Ltd., a subsidiary of the Company, has instituted legal proceedings against Fuxin Bank Co., Ltd., Dalian Jinkaisxuan Renewable Resource Acquisition Chain Co., Ltd., Dalian Yingtai Paper Co., Ltd., Dalian Zhanhong Renewable Resource Recycling Co., Ltd., and Wang Jinping, seeking an order from the court to affirm the plaintiff’s ownership of the goods and to exclude the defendant’s execution, and the case is reheard and in the first instance. 11. Due to a contractual dispute, Shenzhen Konka Unifortune Technology Co., Ltd., a subsidiary of the Company, filed a lawsuit against Shenzhen Jun xing Communication Technology Co., Ltd., Gumei Electronics (Hongkong) Technology Limited, Shenzhen Hong xing fengda Industrial Development Co., Ltd., Shenzhen Jun xing Junye Electronics Co., Ltd., Zeng Jiankai, Zhang Zhenyu, Herewin Technology Group (HK) Co., Ltd., Zhang Lixia, Anhui Baolin Industrial Co., Ltd., Zeng Qingpeng, and Zhong Yuhua to return the payment for goods and pay the corresponding liquidated damages. 12. Due to a purchase and sales contract, the Company’s subsidiary Konka Huanjia Environmental Technology Co., Ltd. appealed against Xu Jianhua and Guangxi BG New Materials Co., Ltd. to request the court to 88 Konka Group Co., Ltd. Annual Report 2023 refuse Xu Jianhua's all claims and request Guangxi BG New Materials Co., Ltd. to make payment for goods and pay liquidated damages, and the case is reheard and in the first instance. 13. Due to a dispute over an equity transfer agreement, the Company filed a lawsuit against Beijing Langruihaoteng Technology Development Co., Ltd., Beijing Beida Jade Bird Security System Engineering Technical Co., Ltd., and Beijing Jingruihaoteng Technology Development Co., Ltd., seeking the final payment of the equity transfer, and the case was won in first instance, the judgment has entered into force and the application for enforcement is in progress. 14. Due to a dispute over the cancellation of creditor's rights, the Company’s subsidiary Anhui Konka Electronic Co., Ltd. filed a lawsuit against Wu Rong and Makena Electronic (Shenzhen) Co., Ltd., seeking for the cancellation of the Agreement on the Transfer of Creditor's Rights and the relevant supplemental agreement previously signed by the defendants, and the case is being heard in second instance. 15. Due to a purchase and sales contract, Sichuan Shuwu Guangrun Logistics Co., Ltd. filed a lawsuit against the Company’s subsidiary Dongguan Konka Electronic Co., Ltd., requesting the latter to make payment for goods and pay liquidated damages. 16. Due to a dispute over bankruptcy, Xinxiang Jiahui Dakeluo Crafts Products Co., Ltd. filed a lawsuit against the Company’s subsidiary Henan Frestec Refrigeration Appliance Co., Ltd., requesting a confirmation that the period-end excess VAT paid that had been returned by the tax authority to the defendant should have been other properties to be distributed. 17. Due to a purchase and sales contract of international goods, Micro Crystal Transfer Group Ltd. filed a lawsuit against the Company’s subsidiary Chongqing Konka Optoelectronic Technology Research Institute Co., Ltd., requesting the latter to make payment for goods and pay liquidated damages. 18. Due to a contractual dispute, the Company filed a lawsuit against Zhu Xinming, Leng Sumin, Gongqingcheng Jinzhuanrong Investment Management Partnership (Limited Partnership), and Gongqingcheng Xinrui Investment Management Partnership (Limited Partnership), requesting them to pay the performance compensation. XII Punishments and Rectifications √ Applicable □ Not applicable Type of Disclosure Disclosure Name Type Reason punishme Conclusion (if any) date index nt Therefore, the Shenzhen Some purchase and sale Bureau of the China Securities transactions, conducted Regulatory Commission by the Company's (CSRC Shenzhen) decided to relevant subsidiaries take a regulatory measure, from 2020 to 2021, did requesting the Company to not have commercial make a correction, in Konka substance, the Charging accordance with Item 1, 4 January Group Co., Other recognition of income correction Article 52 of the Measures for 2023 Ltd. and costs of which was the Administration of short of evidence. Information Disclosure by Consequently, financial Listed Companies and Article http:// cni data disclosed in the 21 of the Rules for the On-site nfo.cn/new corresponding periodic Inspection of Listed /index report of the Company Companies (ZH.J.H.G.G. were inaccurate. [2022] No. 21). (I) Long-term assets Pursuant to Article 51 and impairment tests were Article 52 of the Measures for not prudent. The Charging the Administration of Konka Company's subsidiary, correction Information Disclosure by 13 July Group Co., Other Jiangxi Konka New and Listed Companies, and Article 2023 Ltd. Material Technology regulatory 21 of the Rules for the On-site Co., Ltd., and its interview Inspection of Listed affiliated enterprises did Companies (Z.J.H.G.G. [2022] not exercise due No. 21), the Shenzhen Bureau 89 Konka Group Co., Ltd. Annual Report 2023 diligence in the long- of the China Securities term assets impairment Regulatory Commission tests for 2021. (II) decided to take regulatory Information disclosure measures, including ordering was not standardized. In the Company to make the Company's 2022 corrections and conducting results forecast, regulatory interviews with information about the relevant personnel of the reasons for the year-on- Company. year decline in revenue from consumer electronics was not completely disclosed. Some inventory of the Company's related subsidiaries was seized in 2019, but such limitation was not disclosed in the financial statements' notes until the 2022 annual report. Information on rectification √ Applicable □ Not applicable As of the end of the Reporting Period, the Company had completed all remediation tasks in line with the relevant regulatory requirements. For details, see the Report on the Remediation Based on the Corrective Measures of the Shenzhen Bureau of the China Securities Regulatory Commission against the Company (Announcement No.: 2023-09) and the Report on the Remediation Based on the Corrective Measures of the Shenzhen Bureau of the China Securities Regulatory Commission against the Company (Announcement No.: 2023-51) disclosed by the Company on http:// cninfo.cn/new/index respectively on 25 February 2023 and 11 August 2023. XIII Credit Quality of the Company as well as its Controlling Shareholder and De Facto Controller □ Applicable √ Not applicable XIV Major Related-Party Transactions 1. Continuing Related-Party Transactions √ Applicable □ Not applicable Rel As % Appro Over Obtai Type Total Index atio Prici of ved the Metho nable Relate of Trans value Disclo to nshi Specific ng total transa appro d of marke d trans action (RMB sure disclo p transaction prin value ction ved settle t price party actio price ’0,000 date sed wit ciple of all line line or ment for n ) infor h same- (RMB not same- matio the type ’0,000 type 90 Konka Group Co., Ltd. Annual Report 2023 Co transa ) transa n mpa ctions ctions ny Und Purc er OCT hase Enter the of Property prises sam com manageme Neg Co., e 28 nt, otiat Marke 11,34 10,00 Ltd modi 1.17% Not Cash N/A March actu utilities, ed t price 3.52 0 and 2023 ties office price its al and leases subsid cont iaries servi roll http:// ces er cninfo . cn/ne Und w/ind er Sales ex OCT of Enter the Sale of prises sam good TVs, Neg Co., e s and intelligent 28 otiat Marke 7,802. 20,00 Ltd servi terminals, 0.76% Not Cash N/A March actu ed t price 34 0 and etc. and 2023 ces price its al relevant subsid services cont iaries roll er 19,14 30,00 Total -- -- -- -- -- -- -- -- 5.86 0 Large-amount sales return in detail N/A The Company has published the Forecasting Public Notice on Routine Related-party Give the actual situation in the Transaction for Y2023 on Securities Times, Shanghai Securities News, and China Reporting Period (if any) where an Securities Journal as well as the Internet website designated by CSRC estimate had been made for the total http://http:// cninfo.cn/new/index on 28 March 2023. In the Reporting Period, value of continuing related-party the basis for pricing, transaction price, transaction amount and settlement methods of raw transactions by type to occur in the materials purchased by the Company were basically in accordance with the forecast. The Reporting Period total amount incurred was RMB191,458,600. Reason for any significant difference between the transaction N/A price and the market reference price (if applicable) 2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests □ Applicable √ Not applicable No such cases in the Reporting Period. 3. Related Transactions Regarding Joint Investments in Third Parties □ Applicable √ Not applicable 91 Konka Group Co., Ltd. Annual Report 2023 No such cases in the Reporting Period. 4. Credits and Liabilities with Related Parties √ Applicable □ Not applicable Indicate by tick mark whether there were any credits and liabilities with related parties for non-operating purposes. √ Yes □ No No credits receivable with related parties Liabilities payable to related parties: Increased Recovered Interest in Beginning in the in the the Ending Related Related Forming balance Reporting Reporting Reporting balance Interest rate party relationship reason (RMB’0,00 Period Period Period (RMB’0,00 0) (RMB’0,00 (RMB’0,00 (RMB’0,00 0) 0) 0) 0) 131,091.00 0.00 50,000.00 3.45% 4,551.91 81,091.00 The OCT Company Controlling Enterprises applies 50,000.00 0.00 0.00 3.45% 1,748.96 50,000.00 shareholder Co., Ltd. entrusted loan to it 70,000.00 0.00 0.00 3.45% 2,448.54 70,000.00 Effects of liabilities with related parties The Company applies entrusted loan from OCT Enterprises Co., Ltd. which meets the on the Company’s operating results and needs of the company's existing business development and reduces the financing cost. financial conditions 5. Transactions with Related Finance Companies □ Applicable √ Not applicable The Company did not make deposits in, receive loans or credit from and was not involved in any other finance business with any related finance company or any other related parties. 6. Transactions with Related Parties by Finance Companies Controlled by the Company □ Applicable √ Not applicable The finance company controlled by the Company did not make deposits, receive loans or credit from and was not involved in any other finance business with any related parties. 7. Other Major Related-Party Transactions (1) Guarantee Limits for Affiliated Companies: The 7th meeting of the 10th Board of Directors on 24 February 2023 and the First Extraordinary General Meeting of Shareholders in 2023 on 13 92 Konka Group Co., Ltd. Annual Report 2023 March 2023, passed the proposal Providing Guarantee Limits for Chuzhou Kangjin Health Industry Development Co., Ltd. The Company provided a credit guarantee limit of RMB259.7 million for Chuzhou Kangjin Health Industry Development Co., Ltd. according to its shareholding proportion, with a guarantee limit valid for fourteen years. This credit guarantee limit was used to apply for loans from banks by Chuzhou Kangjin Health Industry Development Co., Ltd. Other shareholders of Chuzhou Kangjin Health Industry Development Co., Ltd. will provide guarantees for it based on their respective shareholding proportions, together with the Company. (2) Application for Comprehensive Credit Limit from China Everbright Bank Co., Ltd.: The 7th meeting of the 10th Board of Directors on 24 February 2023, approved the proposal Application for Comprehensive Credit Limit from China Everbright Bank Co., Ltd. The Company applied for a comprehensive credit limit not exceeding RMB1.5 billion from China Everbright Bank Co., Ltd. to meet its daily operating capital needs. During the reporting period, the ongoing credit amount of the Company with China Everbright Bank Co., Ltd. was RMB1 billion. (3) Counter-guarantees for Bank Credit Facilities Application: The 7th meeting of the 10th Board of Directors on 24 February 2023 and the First Extraordinary General Meeting of Shareholders in 2023 on 13 March 2023, approved the proposal Providing Counter-guarantees for Bank Credit Facilities Application by the Company. To reduce financing costs, Overseas Chinese Town Holdings Company (OCT Group) provided a guarantee for the Company’s bank credit facilities application, not exceeding RMB1 billion. In turn, the Company offered counter-guarantees to OCT Group of an equal amount and term, with a counter-guarantee amount not exceeding RMB1 billion, and a guarantee limit valid for a maximum of three years. (4) The Company's non-public issuance of corporate bonds and the provision of counter-guarantees to OCT Group: At the 15th meeting of the 10th Board of Directors held on 10 August 2023, and the second extraordinary general meeting of shareholders in 2023 held on 28 August 2023, the proposal on Plan for Non-public Issuance of Corporate Bonds by the Company was deliberated and passed. To reduce financing costs, OCT Group intends to provide a full, unconditional, and irrevocable joint liability guarantee for the Company's non-public issuance of corporate bonds not exceeding RMB2.3 billion. Simultaneously, the Company plans to provide an equivalent and concurrent credit counter-guarantee to OCT Group, with the counter-guarantee amount not exceeding RMB2.3 billion and the guarantee period not exceeding 5 years. Index to the public announcements about the said related-party transactions disclosed Title of public announcement Disclosure date Disclosure website Announcement on the Provision of Guarantee Line for Joint Stock Company http:// cninfo.c 25 February 2023 and the Related-party Transaction n/new/index 93 Konka Group Co., Ltd. Annual Report 2023 Announcement on the Application to China Everbright Bank for 25 February 2023 Comprehensive Credit Line & the Related-party Transaction Announcement on the Provision of Counter-guarantee for the Application to 25 February 2023 Bank for Credit Line & the Related-party Transaction Announcement on Plan for Non-public Issuance of Corporate Bonds by the 11 August 2023 Company and Provision of Counter-Guarantee to OCT Group XV Major Contracts and Execution thereof 1. Entrustment, Contracting and Leases (1) Entrustment □ Applicable √ Not applicable No such cases in the Reporting Period. (2) Contracting □ Applicable √ Not applicable No such cases in the Reporting Period. (3) Leases √ Applicable □ Not applicable Note to leases No significant leases in the Reporting Period. The rent of Konka Development Building has received RMB67,229,722.75 in the Reporting Period. The project bringing about gains or losses as over 10% of total profit in the Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. 2. Major Guarantees √ Applicable □ Not applicable Unit: RMB'0,000 Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries) 94 Konka Group Co., Ltd. Annual Report 2023 Havin Guarant Disclosure Actual Type Collat Counter Term Line of Actual g ee for a date of the guarant of eral guarant of Obligor guarante occurren expire related guarantee line ee guara (if ee (if guara e ce date d or party or announcement amount ntee any) any) ntee not not 30 Joint- Two Septemb 3,747 liabilit No Not Not Not years er 2022 y One 23 Joint- year Novemb 2,748 liabilit No Not Not Not and a er 2022 y half Joint- 22 May One 1,499 liabilit No Not Not Not 2023 year y Joint- 10 May One 3,747 liabilit No Not Not Not 2023 year y Econ Joint- 28 April 2022 50,000 5 July One Technology 4,997 liabilit No Not Not Not 2023 year y Joint- 19 July One 2,498 liabilit No Not Not Not 2023 year y 28 Joint- One August 999 liabilit No Not Not Not year 2023 y 29 Joint- One Decemb 1,374 liabilit No Not Not Not year er 2023 y 28 Joint- One Decemb 2,498 liabilit No Not Not Not year er 2023 y Foshan Pearl River Media Joint- Creative Park 17 May Six 28 April 2022 1,372 980 liabilit No Not Not Not Culture 2022 years y Development Co., Ltd. Jiangxi Xinxin 12 Joint- Jian’an 10,000 Decemb 10,000 liabilit No Not Not Not Engineering er 2016 y Co., Ltd. Jiangxi 12 Joint- Zhongyi 10,000 Decemb 10,000 liabilit No Not Not Not Decoration er 2016 y Materials Co., 95 Konka Group Co., Ltd. Annual Report 2023 Ltd. Jiangxi Shanshi 12 Joint- Technological 10,000 Decemb 10,000 liabilit No Not Not Not Development er 2016 y Co., Ltd. 8 Joint- Three Septemb 60,000 liabilit No Not Not Yes years er 2022 y 18 Joint- Three October 60,000 liabilit No Not Not Yes years 30 March 2022 y OCT Group 2022 and 25 370,000 February 2023 22 Joint- Three Septemb 50,000 liabilit No Not Not Yes years er 2023 y 13 Joint- Three Decemb 30,000 liabilit No Not Not Yes years er 2023 y Total approved line for such Total actual amount of such guarantees in the guarantees in the Reporting Period 361,770 97,612 Reporting Period (A2) (A1) Total approved line for such Total actual balance of such guarantees at the end guarantees at the end of the 1,083,642 255,087 of the Reporting Period (A4) Reporting Period (A3) Guarantees provided between the Company and subsidiaries Disclosure Actua Guaran date of the Line l Colla Counter Term tee for Having guarantee of Actual guara Type of teral guarante of a Obligor expired line guaran occurrence date ntee guarantee (if e (if guarant related or not announce tee amou any) any) ee party or ment nt not Joint- Two 2 June 2022 3,000 No Not Not Not liability years 6 February 10,00 Joint- One No Not Not Not 2023 0 liability year 14 August Joint- One Anhui 25 5,000 No Not Not Not 55,00 2023 liability year Tongchua February 0 ng 2023 19 October 10,00 Joint- One No Not Not Not 2023 0 liability year One 20 November Joint- year 3,000 No Not Not Not 2023 liability and a half 96 Konka Group Co., Ltd. Annual Report 2023 28 April 19 January Joint- One 4,000 No Not Not Not 2022 and 2023 liability year Boluo 125,0 25 Precision 00 February 25 August Joint- Three 2023 4,500 No Not Not Not 2023 liability years One 24 November Joint- year Electroni 8,500 No Not Not Not 25 2022 liability and a cs 100,0 half February Technolo 00 2023 gy 26 September 50,00 Joint- One No Not Not Not 2023 0 liability year 24 March Joint- One 24 March 2023 5,000 No Not Not Not 2021 and liability year Donggua 90,00 25 n Konka 0 February 80,00 Joint- Ten 2023 23 June 2021 No Not Not Not 0 liability years Joint- Other Two 10 March 2022 990 No Not Not liability sharehol years der of Jiangxi Konka provides a 31 Jiangxi counter October 6,990 Konka guarante 2018 15 August Joint- One 6,000 No e for the Not Not 2023 liability Compan year y for 49% of the guarante e line Other sharehol der of Xinfeng Microcr ystalline provides Xinfeng a 30 March 25,00 Joint- One Microcry 30 June 2023 7,200 No counter Not Not 2019 0 liability year stalline guarante e for the Compan y for 49% of the guarante e line Other Jiangxi sharehol High der of 30 March 45,00 Joint- Two Transpare 10 March 2022 990 No Jiangxi Not Not 2019 0 liability years nt High Substrate Transpa rent 97 Konka Group Co., Ltd. Annual Report 2023 Substrat e provides a counter guarante e for the Compan y for 49% of the guarante e line 24 March 2021 and Sichuan 20,00 Joint- Three 25 23 May 2023 4,000 No No Not Not Konka 0 liability years February 2023 Ningbo Joint- One 2 March 2023 6,000 No No Not Not Khr liability year 28 April 12,00 Electric 2022 0 Applianc Joint- One e 13 July 2023 6,000 No No Not Not liability year Other sharehol der of Yibin Kangrun provides a 24 Yibin 10,00 13 November 10,00 Joint- counter Four October No Not Not Kangrun 0 2020 0 liability guarante years 2020 e for the Compan y for 33% of the guarante e line Telecom municatio 28 April 20,00 Joint- One n 23 July 2023 7,500 No No Not Not 2022 0 liability year Technolo gy 10 August 10,21 Joint- Other Ten No Not Not 2021 6 liability sharehol years der of 29 October Joint- Anhui Five 7,000 No Konka Not Not 2021 liability years Anhui 28 April 110,0 provides Konka 2022 00 a 24 October Joint- counter Four 7,000 No Not Not 2022 liability guarante years e for the Compan 19 September Joint- Two 7,000 No y for Not Not 2022 liability years 22% of 98 Konka Group Co., Ltd. Annual Report 2023 the Joint- guarante Five 25 June 2023 5,000 No Not Not liability e line years 31 August Joint- One 5,500 No Not Not 2023 liability year 22 September 18,00 Joint- One No Not Not 2023 0 liability year One 14 September Joint- year 5,000 No Not Not 2022 liability and a half One Konka 24 March 50,00 22 December Joint- year 5,000 No No Not Not Circuit 2021 0 2022 liability and a half Three 10,00 Joint- and a 19 July 2023 No Not Not 0 liability half years 28 April Mobile 2022 and 15,00 10 November Joint- One Interconn 25 7,000 No No Not Not 0 2023 liability year ection February 2023 24 March Liaoyang 2021 and 20,00 Joint- One Kangshu 6 January 2023 5,000 No No Not Not 28 April 0 liability year n 2022 20,00 Joint- Five Konka 12 July 2021 No No Not Not 0 liability years Xinyun 24 March 30,00 Semicond 2021 0 uctor Joint- Two 26 May 2022 6,000 No No Not Not liability years Yibin Konka 24 March 10,00 Joint- One 23 May 2023 980 No No Not Not Intelligen 2021 0 liability year t Chongqin 24 March 55,60 13 December 38,00 Joint- Fifteen No No Not Not g Konka 2021 0 2022 0 liability years Frestec 28 April 12,24 10,20 Joint- Eight Smart 6 July 2022 No No Not Not 2022 0 0 liability years Home Konka Soft 28 April 19,00 19 December Joint- Four 975 No No Not Not Electroni 2022 0 2022 liability years c 99 Konka Group Co., Ltd. Annual Report 2023 Xi'an Kanghon g Technolo 25 30,00 30,00 Joint- Ten gy February 26 May 2023 No No Not Not 0 0 liability years Industry 2023 Develop ment Co., Ltd. Total actual amount of such Total approved line for such guarantees in the Reporting 275,845 guarantees in the Reporting Period 209,680 Period (B1) (B2) Total actual balance of such Total approved line for such guarantees at the end of the 1,076,885 guarantees at the end of the 429,551 Reporting Period (B3) Reporting Period (B4) Guarantees provided between subsidiaries Disclosure Actua Guaran date of the Line l Colla Counter Term tee for Having guarantee of Actual guara Type of teral guarante of a Obligor expired line guaran occurrence date ntee guarantee (if e (if guarant related or not announce tee amou any) any) ee party or ment nt not N/A Total approved line for such guarantees in the Reporting Total actual amount of such guarantees 1,530 0 Period (C1) in the Reporting Period (C2) Total approved line for such guarantees at the end of the Total actual balance of such guarantees 1,530 0 Reporting Period (C3) at the end of the Reporting Period (C4) Total guarantee amount (total of the three kinds of guarantees above) Total guarantee line approved in the Reporting Period Total actual guarantee amount in the 639,145 307,292 (A1+B1+C1) Reporting Period (A2+B2+C2) Total actual guarantee balance at the Total approved guarantee line at the end of the Reporting 2,162,057 end of the Reporting Period 684,638 Period (A3+B3+C3) (A4+B4+C4) Total actual guarantee amount (A4+B4+C4) as % of the 121% Company’s net assets Of which: Balance of guarantees provided for shareholders, actual controller and their related parties (D) 200,000 Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset ratio (E) 684,638 Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) 402,418 Total of the three amounts above (D+E+F) 684,638 100 Konka Group Co., Ltd. Annual Report 2023 Joint responsibilities possibly borne in the Reporting Period for undue guarantees (if any) N/A Provision of external guarantees in breach of the prescribed procedures (if any) N/A Compound guarantees: None 3. Cash Entrusted for Wealth Management (1) Cash Entrusted for Wealth Management √ Applicable □ Not applicable Overview of cash entrusted for wealth management in the Reporting Period Unit: RMB’0,000 Unrecovered Unrecovered overdue amount Type Funding source Amount Undue amount overdue amount with provision for impairment Trust financial Self-owned 10,000.00 10,000.00 0 0 products Total 10,000.00 10,000.00 0 0 High-risk entrusted wealth management with significant single amount or low security and poor liquidity: □ Applicable √ Not applicable Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment for entrusted wealth management □ Applicable √ Not applicable (2) Entrusted Loans □ Applicable √ Not applicable No such cases in the Reporting Period. 4. Other Major Contracts □ Applicable √ Not applicable No such cases in the Reporting Period. XVI Other Significant Events 101 Konka Group Co., Ltd. Annual Report 2023 √ Applicable □ Not applicable (I) Corporate bonds issue: Currently, as for the non-public offering of corporate bonds of RMB2.3 billion, RMB1.5 billion of corporate bonds have been issued on 29 January 2024, and the rest of corporate bonds of RMB0.8 billion have been issed on 18 March 2024. (II) Initiation and establishment of funds: The total scale of the Oriental-Konka Industry M&A Fund was RMB1,001,000,000. Shenzhen Konka Investment Holding Co., Ltd. contributed RMB500 million, accounting for 49.95% of the total units. By the date of this report, Shenzhen Konka Investment Holding Co., Ltd. has contributed RMB487,344,000. The fund invested in Jiangxi Yahua Electronic Materials Co., Ltd., Potron Technology Co., Ltd., etc. The total scale of the Kunshan-CITIC-Konka Emerging Industry Development Investment Fund was RMB1,006,000,000. Shenzhen Konka Investment Holding Co., Ltd. contributed RMB500 million, accounting for 49.70% of the total units. By the date of this report, Shenzhen Konka Investment Holding Co., Ltd. has contributed RMB195.21 million. The fund invested in UNIONTECH, Hercules Microsystems (HME), etc. The total scale of the Tongxiang Wuzhen Jiayu Digital Economic Industry Fund was RMB500 million. Shenzhen Konka Investment Holding Co., Ltd. contributed RMB200 million, accounting for 40% of the total units. By the date of this report, Shenzhen Konka Investment Holding Co., Ltd. has contributed RMB200,000,000. The fund invested in Feidi Technology (Shenzhen) Co., Ltd., Allystar Technology (Shenzhen) Co., Ltd., etc. The total scale of Yancheng Kangyan Industry Investment Fun was RMB3,000 million. Shenzhen Konka Investment Holding Co., Ltd. and Shenzhen Konka Capital Equity Investment Management Co., Ltd. contributed RMB1201,500,000, accounting for 40.05% of the total units. By the date of this report, Shenzhen Konka Investment Holding Co., Ltd. and Shenzhen Konka Capital Equity Investment Management Co., Ltd. have contributed RMB217.36 million. The fund invested in Anhui Zhongdian Xingfa and Xinlong Co., Ltd., Chongqing E2info Technology Co., Ltd., etc. The total scale of Yibin Kanghui Electronic Information Industry Equity Investment Fund was RMB1,002,000,000. Shenzhen Konka Investment Holding Co., Ltd. and Shenzhen Konka Capital Equity Investment Management Co., Ltd. contributed RMB401 million, accounting for 40.02% of the total units. By the issuance date of this report, Shenzhen Konka Investment Holding Co., Ltd. has contributed RMB104 million. The fund invested in Chongqing E2info Technology Co., Ltd., etc. The total scale of Chongqing Kangxin Equity Investment Fund was RMB2 billion. Shenzhen Konka Investment Holding Co., Ltd. and Shenzhen Konka Capital Equity Investment Management Co., Ltd. contributed RMB1 billion, accounting for 50% of the total units. By the date of this report, 102 Konka Group Co., Ltd. Annual Report 2023 Shenzhen Konka Investment Holding Co., Ltd. and Shenzhen Konka Capital Equity Investment Management Co., Ltd. have contributed RMB148,248,300. The fund invested in Shanghai VEIGLO Information System Co., Ltd., Jiangxi Taide Wisdom Technology Co., Ltd., etc. (III) Disclosure index of significant information Announce Website Date Title Page on newspaper ment No. link Announcement on Receiving the Shenzhen Bureau of the China Securities Regulatory Commission's Securities Daily B108, Shanghai Securities 2023-01 4 January 2023 Decision to Take Corrective Measures against News 116, etc. Konka Group Co., Ltd. Announcement on Resolutions of the Sixth Meeting Securities Daily B31, Shanghai Securities 2023-02 17 January 2023 of the Tenth Board of Directors News 17, etc. Announcement on Proposed Sale of Some of Equity Securities Daily B31, Shanghai Securities 2023-03 17 January 2023 in Chutian Dragon Co., Ltd. News 17, etc. Announcement on Proposed Sale of Some of Equity Securities Daily B26, Shanghai Securities 2023-04 17 January 2023 in Wuhan Tianyuan Environmental Protection Co., News 17, etc. Ltd. Announcement on Progress in the Provision of Securities Daily B75, Shanghai Securities 2023-05 18 January 2023 External Guarantee News 81, etc. Securities Daily B143, Shanghai Securities 2023-06 31 January 2023 2022 Result Forecast News 148, etc. http://w ww.cni 25 February Announcement on Resolutions of the Seventh Securities Daily B57, Shanghai Securities 2023-07 nfo 2023 Meeting of the Tenth Board of Directors News 41, etc. .cn/new /index 25 February Announcement on Resolutions of the Fourth Securities Daily B58, Shanghai Securities 2023-08 2023 Meeting of the Tenth Board of Supervisors News 41, etc. Report on the Remediation Based on the Corrective 25 February Measures of the Shenzhen Bureau of the China Securities Daily B58, Shanghai Securities 2023-09 2023 Securities Regulatory Commission against the News 41, etc. Company 25 February Securities Daily B57, Shanghai Securities 2023-10 Announcement on External Guarantee 2023 News 41, etc. Announcement on Providing Security Limit to and 25 February Securities Daily B57, Shanghai Securities 2023-11 Conducting Connected Transaction with 2023 News 41, etc. Shareholding Company 25 February Notice on Convening 2023 First Extraordinary Securities Daily B57, Shanghai Securities 2023-12 2023 General Meeting News 41, etc. 25 February Announcement on Providing Financial Assistance Securities Daily B58, Shanghai Securities 2023-13 2023 to Shandong Econ Technology Co., Ltd. at News 41, etc. 103 Konka Group Co., Ltd. Annual Report 2023 Shareholding Ratio Announcement on Applying for a Comprehensive 25 February Securities Daily B57, Shanghai Securities 2023-14 Line of Credit to and Conducting Connected 2023 News 41, etc. Transactions with China Everbright Bank Announcement on Providing Counter Guarantee 25 February Securities Daily B50, Shanghai Securities 2023-15 and Conducting Connected Transaction for 2023 News 41, etc. Applying for Bank Credit Business 25 February Announcement on Progress of Guarantee Provision Securities Daily B58, Shanghai Securities 2023-16 2023 for Wholly-owned Company News 41, etc. Announcement on Resolutions of 2023 First Securities Daily B49, Shanghai Securities 2023-17 14 March 2023 Extraordinary General Meeting News 41, etc. Securities Daily B178, Shanghai Securities 2023-18 28 March 2023 2022 Annual Report News 177, etc. Securities Daily B178, Shanghai Securities 2023-19 28 March 2023 Abstract of 2022 Annual Report News 177, etc. Announcement on Resolutions of the Eighth Securities Daily B178, Shanghai Securities 2023-20 28 March 2023 Meeting of the Tenth Board of Directors News 177, etc. Announcement on Resolutions of the Fifth Meeting Securities Daily B178, Shanghai Securities 2023-21 28 March 2023 of the Tenth Board of Supervisors News 177, etc. Announcement on Expected Routine Connected Securities Daily B178, Shanghai Securities 2023-22 28 March 2023 Transactions in 2023 News 177, etc. Announcement on Plan of Profit Distribution for Securities Daily B178, Shanghai Securities 2023-23 28 March 2023 2022 News 177, etc. Announcement on Accrual of Asset Impairment Securities Daily B178, Shanghai Securities 2023-24 28 March 2023 Reserves for 2022 News 177, etc. Announcement on Change in Accounting Method of Securities Daily B90, Shanghai Securities 2023-25 4 April 2023 Shareholding Company News 65, etc. Announcement on Proposed Sale of Some of Equity Securities Daily B90, Shanghai Securities 2023-26 4 April 2023 in Chutian Dragon Co., Ltd. News 65, etc. Announcement on Resolutions of the Ninth Meeting Securities Daily B90, Shanghai Securities 2023-27 4 April 2023 of the Tenth Board of Directors News 65, etc. Announcement on Holding 2022 Online Result Securities Daily B90, Shanghai Securities 2023-28 4 April 2023 Release News 65, etc. Securities Daily B1204, Shanghai 2023-29 29 April 2023 2023 Q1 Report Securities News 988, etc. Announcement on Progress of Guarantee Provision Securities Daily B1204, Shanghai 2023-30 29 April 2023 for Wholly-owned Company Securities News 988, etc. 104 Konka Group Co., Ltd. Annual Report 2023 Announcement on Some Accounting Policy Securities Daily B1204, Shanghai 2023-31 29 April 2023 Changes Securities News 988, etc. Announcement on the Postponement of Reply to Securities Daily B128, Shanghai Securities 2023-32 13 May 2023 Inquiry Letter on 2022 Annual Report from News 12, etc. Shenzhen Stock Exchange Announcement on Resolutions of 11th Meeting of Securities Daily B21, Shanghai Securities 2023-33 19 May 2023 the Tenth Board of Directors News 36, etc. Announcement on Reply to Inquiry Letter on 2022 Securities Daily B173-B174, Shanghai 2023-34 20 May 2023 Annual Report from Shenzhen Stock Exchange Securities News 161, etc. Announcement on Resolutions of 12th Meeting of Securities Daily B42, Shanghai Securities 2023-35 27 May 2023 the Tenth Board of Directors News 100, etc. Notice on Convening 2022 Shareholders' General Securities Daily B42, Shanghai Securities 2023-36 27 May 2023 Meeting News 100, etc. Announcement on Accumulative Lawsuits and Securities Daily B32, Shanghai Securities 2023-37 1 June 2023 Arbitrations News 41, etc. Announcement on Resolutions of 2022 Securities Daily B100, Shanghai Securities 2023-38 20 June 2023 Shareholders' General Meeting News 57, etc. Announcement on Accumulative Lawsuits and Securities Daily B93, Shanghai Securities 2023-39 22 June 2023 Arbitrations News 73, etc. Announcement on Progress in the Provision of Securities Daily B93, Shanghai Securities 2023-40 22 June 2023 External Guarantee News 73, etc. Announcement on the Extension of outstanding Securities Daily B39, Shanghai Securities 2023-41 11 July 2023 maturities of Dongfang Jiakang Industry M&A News 11, etc. Fund Announcement on Resolutions of 14th Meeting of Securities Daily B39, Shanghai Securities 2023-42 11 July 2023 the Tenth Board of Directors News 11, etc. Announcement on Receiving the Shenzhen Bureau of the China Securities Regulatory Commission's Securities Daily B82, Shanghai Securities 2023-43 13 July 2023 Decision to Take Administrative Supervision News 12, etc. Measures Securities Daily B4, Shanghai Securities 2023-44 15 July 2023 2023 Interim Results Forecast News 132, etc. Announcement on Providing Financial Assistance Securities Daily B49, Shanghai Securities 2023-45 11 August 2023 to Dongguan Guankang Yuhong Investment News 73, etc. Company Limited According to Shareholding Ratio Announcement on Appointment of Audit Firms for Securities Daily B49, Shanghai Securities 2023-46 11 August 2023 2023 Financial Statements and Internal Control News 73, etc. Audit 105 Konka Group Co., Ltd. Annual Report 2023 Notice on Convening 2023 Second Extraordinary Securities Daily B49, Shanghai Securities 2023-47 11 August 2023 General Meeting News 73, etc. Announcement on Resolutions of 15th Meeting of Securities Daily B50, Shanghai Securities 2023-48 11 August 2023 the Tenth Board of Directors News 73, etc. Announcement on the Resolutions of the 7th Securities Daily B50, Shanghai Securities 2023-49 11 August 2023 Meeting of the 10th Board of Supervisors News 73, etc. Announcement on Issuing the Plan for the Securities Daily B49, Shanghai Securities 2023-50 11 August 2023 Company's Private Offering of Corporate Bonds and News 73, etc. Providing Counter Guarantee for OCT Group Report on the Remediation Based on the Corrective Measures of the Shenzhen Bureau of the China Securities Daily B49, Shanghai Securities 2023-51 11 August 2023 Securities Regulatory Commission against the News 73, etc. Company Announcement on Progress in the Provision of Securities Daily B49, Shanghai Securities 2023-52 11 August 2023 External Guarantee News 73, etc. Securities Daily B66, Shanghai Securities 2023-53 28 August 2023 Summary of 2023 Interim Report News 17, etc. Securities Daily B66, Shanghai Securities 2023-54 28 August 2023 2023 Interim Report News 17, etc. Announcement on Semi-annual Provision for assets Securities Daily B66, Shanghai Securities 2023-55 28 August 2023 impairment for 2023 News 17, etc. Announcement on Resolutions of 2023 Second Securities Daily B71, Shanghai Securities 2023-56 29 August 2023 Extraordinary General Meeting News 345, etc. 15 September Announcement on Progress in the Provision of Securities Daily B56, Shanghai Securities 2023-57 2023 External Guarantee News 57, etc. 23 September Announcement on Progress of Guarantee Provision Securities Daily B11, Shanghai Securities 2023-58 2023 for Wholly-owned Subsidiaries News 12, etc. Securities Daily B749, Shanghai Securities 2023-59 31 October 2023 The Third Quarterly Report of 2023 News 20, etc. Announcement on the Participation in 2023 4 November Securities Daily B38, Shanghai Securities 2023-60 Shenzhen Online Group Reception Day for Listed 2023 News 49, etc. Company Investors 18 November Announcement on Progress of Guarantee Provision Securities Daily B20, Shanghai Securities 2023-61 2023 for Wholly-owned Subsidiaries News 20, etc. Announcement on the Receipt of SZSE No 18 November Securities Daily B20, Shanghai Securities 2023-62 Objection Letter for 2023 Corporate Bond Listing 2023 News 20, etc. Qualification 2023-63 28 November Announcement on Overdue Shareholder Loans to Securities Daily B16, Shanghai Securities 106 Konka Group Co., Ltd. Annual Report 2023 2023 Shareholding Companies News 52, etc. Announcement on Providing Financial Assistance 6 December Securities Daily B22, Shanghai Securities 2023-64 to Chuzhou Kangxin Health Industry Development 2023 News 28, etc. Company Limited According to Shareholding Ratio 6 December Announcement on Resolutions of 19th Meeting of Securities Daily B22, Shanghai Securities 2023-65 2023 the Tenth Board of Directors News 28, etc. 6 December Notice on Convening 2023 Third Extraordinary Securities Daily B22, Shanghai Securities 2023-66 2023 General Meeting News 28, etc. 22 December Announcement on Progress of Guarantee Provision Securities Daily B54, Shanghai Securities 2023-67 2023 for Wholly-owned Subsidiaries News 68, etc. 22 December Announcement on Resolutions of 2023 Third Securities Daily B54, Shanghai Securities 2023-68 2023 Extraordinary General Meeting News 68, etc. 26 December Announcement on Progress of Guarantee Provision Securities Daily B54, Shanghai Securities 2023-69 2023 for Wholly-owned Subsidiaries News 68, etc. XVII Significant Events of Subsidiaries □ Applicable √ Not applicable 107 Konka Group Co., Ltd. Annual Report 2023 Part VII Share Changes and Shareholder Information I Share Changes 1. Share Changes Unit: share Increase/decrease in the Reporting Period Before After (+/-) Share s as Share divide s as nd divide New conve Percent Percenta nd Subtot Shares issue rted Other Shares age ge (%) conve al s from (%) rted capita from l profit reserv es 1. Restricted shares 0 0.00% 0 0.00% 2. Unrestricted shares 2,407,945,408 100.00% 2,407,945,408 100.00% 2.1 RMB- denominated ordinary 1,596,593,800 66.31% 1,596,593,800 66.31% shares 2.2 Domestically 811,351,608 33.69% 811,351,608 33.69% listed foreign shares 3. Total shares 2,407,945,408 100.00% 2,407,945,408 100.00% Reasons for the share changes: □ Applicable √ Not applicable Approval of the share changes: □ Applicable √ Not applicable Transfer of share ownership: □ Applicable √ Not applicable Effects of the share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s ordinary shareholders and other financial indicators of the prior year and the prior accounting period, respectively: 108 Konka Group Co., Ltd. Annual Report 2023 □ Applicable √ Not applicable Other information that the Company considers necessary or is required by the securities regulator to be disclosed: □ Applicable √ Not applicable 2. Changes in Restricted Shares □ Applicable √ Not applicable II Issuance and Listing of Securities 1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period □ Applicable √ Not applicable 2. Changes to Total Shares, Shareholder Structure and Asset and Liability Structures □ Applicable √ Not applicable 3. Existing Staff-Held Shares □ Applicable √ Not applicable III Shareholders and Actual Controller 1. Shareholders and Their Shareholdings at the Period-End Unit: share Number of ordinary Number of preferred Number of preferred Number of shareholders at the shareholders with resumed shareholders with ordinary 84,916 month-end prior to 86,489 0 voting rights at the month-end 0 resumed voting rights (if shareholders the disclosure of this prior to the disclosure of this any) Report Report (if any) 5% or greater shareholders or top 10 shareholders Share Increase/de Shares in pledge, Total Nature of holdi crease in Restricte marked or frozen shares held Unrestricted Name of shareholder sharehold ng the d shares at the shares held er perce Reporting held period-end Status Shares ntage Period State- OVERSEAS CHINESE owned 21.75 TOWN HOLDINGS 523,746,932 0 0 523,746,932 legal % COMPANY person CITIC SECURITIES Foreign BROKERAGE (HONG legal 7.48% 180,001,110 0 0 180,001,110 KONG) CO., LTD. person 109 Konka Group Co., Ltd. Annual Report 2023 Domestic WANG JINGFENG natural 2.91% 70,000,000 -35,000,000 0 70,000,000 person Foreign GUOYUAN SECURITIES legal 2.48% 59,706,843 479,618 0 59,706,843 BROKER (HK) CO., LTD. person Foreign HOLY TIME GROUP legal 2.38% 57,289,100 0 0 57,289,100 LIMITED person Foreign GAOLING FUND,L.P. legal 1.88% 45,366,683 -7,434,567 0 45,366,683 person Foreign NAMNGAI natural 0.96% 23,000,000 -19,800 0 23,000,000 person HONG KONG SECURITIES Foreign CLEARING COMPANY legal 0.93% 22,292,686 7,154,180 0 22,292,686 LTD. person State- CHINA MERCHANTS owned SECURITIES (HK) 0.82% 19,865,520 407,800 0 19,865,520 legal LIMITED person Foreign BOCOM INTERNATIONAL legal 0.78% 18,896,037 0 0 18,896,037 SECURITIES LIMITED person Strategic investor or general legal person becoming a top-10 ordinary shareholder N/A due to rights issue (if any) (see note 3) Happy Bloom Investment Limited, a wholly-owned subsidiary of the Company’s first majority shareholder Overseas Chinese Town Holdings Company (OCT Group), holds 180,001,110 and 18,360,000 ordinary shares in the Company respectively through CITIC Related or acting-in-concert parties among Securities Brokerage (Hong Kong) Co., Ltd. and China Merchants Securities (HK) the shareholders above Limited. Happy Bloom Investment Limited and OCT Group are parties acting in concert. Other than that, it is unknown whether the other shareholders are related parties or acting- in-concert parties or not. Explain if any of the shareholders above was involved in entrusting/being entrusted N/A with voting rights or waiving voting rights Special account for share repurchases (if any) among the top 10 shareholders (see None note 10) Top 10 unrestricted shareholders Name of shareholder Unrestricted shares held at the Shares by type 110 Konka Group Co., Ltd. Annual Report 2023 period-end Type Shares OVERSEAS CHINESE TOWN RMB-denominated ordinary 523,746,932 523,746,932 HOLDINGS COMPANY stock CITIC SECURITIES BROKERAGE Domestically listed foreign 180,001,110 180,001,110 (HONG KONG) CO., LTD. stock RMB-denominated ordinary WANG JINGFENG 70,000,000 70,000,000 stock GUOYUAN SECURITIES BROKER (HK) Domestically listed foreign 59,706,843 59,706,843 CO., LTD. stock Domestically listed foreign HOLY TIME GROUP LIMITED 57,289,100 57,289,100 stock Domestically listed foreign GAOLING FUND,L.P. 45,366,683 45,366,683 stock Domestically listed foreign NAMNGAI 23,000,000 23,000,000 stock HONG KONG SECURITIES CLEARING RMB-denominated ordinary 22,292,686 22,292,686 COMPANY LTD. stock CHINA MERCHANTS SECURITIES Domestically listed foreign 19,865,520 19,865,520 (HK) LIMITED stock BOCOM INTERNATIONAL Domestically listed foreign 18,896,037 18,896,037 SECURITIES LIMITED stock Happy Bloom Investment Limited, a wholly-owned subsidiary of the Company’s first majority shareholder Overseas Chinese Town Holdings Company (OCT Group), holds Related or acting-in-concert parties among 180,001,110 and 18,360,000 ordinary shares in the Company respectively through CITIC top 10 unrestricted public shareholders, as Securities Brokerage (Hong Kong) Co., Ltd. and China Merchants Securities (HK) well as between top 10 unrestricted public Limited. Happy Bloom Investment Limited and OCT Group are parties acting in concert. shareholders and top 10 shareholders Other than that, it is unknown whether the other shareholders are related parties or acting- in-concert parties or not. Top 10 ordinary shareholders involved in Wang Jingfeng holds 70,000,000 A-shares in the Company through his securities account securities margin trading (if any) (see note for customer credit trading guarantee in Guotai Junan Securities Co., Ltd. 4) Top 10 shareholders involved in refinancing shares lending □ Applicable √ Not applicable Changes in top 10 shareholders compared with the prior period □ Applicable √ Not applicable Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Reporting Period. □ Yes √ No 111 Konka Group Co., Ltd. Annual Report 2023 No such cases in the Reporting Period. 2. Controlling Shareholder Nature of the controlling shareholder: Controlled by a central state-owned legal person Type of the controlling shareholder: legal person Unifie Legal Date Name of d representat of actual social Principal activity ive/person establi controller credit in charge shment code Export of textile, light industrial products, etc; import of self-used goods in Shenzhen, mechanical equipment, light industrial products, etc. as approved by the relevant authorities of Shenzhen (under Government Document JMB [92] WJMGTSZZ No. A19024); compensation trade; investment in tourism and Overseas 11 91440 relevant cultural industry (including art performance, entertainment and their Chinese Zhang Nove 30019 services, etc), industry, real estate, commerce & trade, packaging, decoration Town Zhengao mber 03461 and investment in printing industry. The convert of export commodities into Holdings 1985 75T domestic sale and the domestic sales of import commodities. Travelling, rental Company of warehouses, culture and art, bonded warehouse of car donation, convention and exhibition services (the projects involved in license management can be operated after getting the relevant license first ); sales of automobile (sedan car included) As of 31 December 2023, Overseas Chinese Town Holdings Company directly held 47.01% equity of Shenzhen Overseas Chinese Town Co., Ltd. (a company listed in Shenzhen Stock Exchange, SZ. 000069) and indirectly Controlling held 0.96% equity of Shenzhen Overseas Chinese Town Co., Ltd. through OCT Capital Investment Management shareholder Co., Ltd. Meanwhile, Shenzhen Overseas Chinese Town Co., Ltd. indirectly held 70.94% equity of OCT (Asia) ’s holdings Holdings Ltd. (a company listed on the main Board of Hong Kong Stock Exchange, 3366.HK). Overseas Chinese in other Town Holdings Company indirectly held 53.88% equity of Yunnan Tourism Co., Ltd. (a company listed in listed Shenzhen Stock Exchange, SZ.002059).Overseas Chinese Town Holdings Company held 7.11% equity of China companies Everbright Bank Company Limited (a company listed on the main Board of Shanghai Stock Exchange at home or (SH.601818) and the main Board of Hong Kong Stock Exchange (6818.HK). Overseas Chinese Town Holdings abroad in Company indirectly held 2.74% equity of Zhe gian g Century Huatong Group Co., Ltd. (a company listed in the Shenzhen Stock Exchange, SZ.002602) through its subsidiary Shenzhen OCT Capital Investment Management Reporting Co., Ltd. Overseas Chinese Town Holdings Company indirectly held 11.12% of equity of Jiangsu Guoxin Period Corporation Limited (a company listed in Shenzhen Stock Exchange, SZ. 002608) through its subsidiary Shenzhen OCT Capital Investment Management Co., Ltd.. Change of the controlling shareholder in the Reporting Period: □ Applicable √ Not applicable No such cases in the Reporting Period. 3. Actual Controller and Its Acting-in-Concert Parties Nature of the actual controller: Central institution for state-owned assets management Type of the actual controller: legal person Legal representative/person in Date of Unified social Principal Name of actual controller charge establishment credit code activity 112 Konka Group Co., Ltd. Annual Report 2023 State-owned Assets Supervision and Administration Commission of the Zhang Yuzhuo Not applicable Not applicable State Council Actual controller’s holdings in other listed companies at home or abroad in the Reporting Period Not applicable Change of the actual controller during the Reporting Period: □ Applicable √ Not applicable No such cases in the Reporting Period. Ownership and control relations between the actual controller and the Company: Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management. □ Applicable √ Not applicable 4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder or the Largest Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all shares of the Company held by Them □ Applicable √ Not applicable 5. Other 10% or Greater Corporate Shareholders □ Applicable √ Not applicable 6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder, Actual Controller, Reorganizer and Other Commitment Makers 113 Konka Group Co., Ltd. Annual Report 2023 □ Applicable √ Not applicable IV Specific Implementation of Share Repurchases in the Reporting Period Progress on any share repurchases: □ Applicable √ Not applicable Progress on reducing the repurchased shares by means of centralized bidding: □ Applicable √ Not applicable 114 Konka Group Co., Ltd. Annual Report 2023 Part VIII Preference Shares □ Applicable √ Not applicable No Preference shares in the Reporting Period. 115 Konka Group Co., Ltd. Annual Report 2023 Part IX Corporate Bonds √ Applicable □ Not applicable I Enterprise Bonds □ Applicable √ Not applicable No enterprise bonds in the Reporting Period. II Corporate Bonds √ Applicable □ Not applicable 1. Basic Information of the Corporate Bonds Unit: RMB’0,000 Bonds Way of Value balance Interest Trade Name Abbr. Code Issue date Due date redemptio date (RMB’0, rate place n 000) Interests shall be paid Privately placed every corporate bonds 21 8 January 8 January 8 January year and Shenzhen in 2021 of 100,000. Konk 114894 4.46% the Stock Konka Group 2021 2021 2024 00 a 01 principals Exchange Co., Ltd shall be (Tranche I) repaid when expired. Interests shall be paid Privately placed every corporate bonds 21 year and Shenzhen in 2021 of 21 May 21 May 21 May Konk 133003 50,000.00 4.00% the Stock Konka Group 2021 2021 2024 a 02 principals Exchange Co., Ltd shall be (Tranche II) repaid when expired. Interests shall be Privately placed paid corporate bonds every 21 Shenzhen in 2021 of 9 July 9 July 9 July year and Konk 133040 80,000.00 3.95% Stock Konka Group 2021 2021 2024 the a 03 Exchange Co., Ltd principals (Tranche III) shall be repaid when 116 Konka Group Co., Ltd. Annual Report 2023 expired. Interests shall be Corporate bonds paid publicly offered every to professional 22 year and Shenzhen investors in 14 July 14 July 14 July 120,000.0 Konk 149987 3.23% the Stock 2022 of Konka 2022 2022 2025 0 a 01 principals Exchange Group Co., Ltd. shall be (Tranche I) repaid (Variety I) when expired. Interests shall be Privately placed paid corporate bonds every to professional 22 8 8 8 year and Shenzhen investors in Konk 133306 Septembe Septembe Septembe 60,000.00 3.30% the Stock 2022 of Konka a 03 r 2022 r 2022 r 2025 principals Exchange Group Co., Ltd shall be (Tranche I) repaid (Variety I) when expired. Interests shall be Privately placed paid corporate bonds every to professional 22 18 18 18 year and Shenzhen investors in Konk 133333 October October October 60,000.00 3.50% the Stock 2022 of Konka a 05 2022 2022 2025 principals Exchange Group Co., Ltd shall be (Tranche II) repaid when expired. Interests shall be Privately placed paid corporate bonds every to professional 24 29 29 29 year and Shenzhen investors in Konk 133759 January January January 150,000 4.00% the Stock 2024 of Konka a 01 2024 2024 2027 principals Exchange Group Co., Ltd shall be repaid (Tranche I) when expired. Interests Privately placed shall be corporate bonds paid to professional every 24 year and Shenzhen investors in 18 March 18 March 18 March Konk 133782 40,000 4.00% the Stock 2024 of Konka 2024 2024 2027 a 02 principals Exchange Group Co., Ltd shall be (Tranche II) repaid (Variety I) when expired. 117 Konka Group Co., Ltd. Annual Report 2023 Interests Privately placed shall be corporate bonds paid to professional every 24 year and Shenzhen investors in 18 March 18 March 18 March Konk 133783 40,000 4.03% the Stock 2024 of Konka 2024 2024 2027 a 03 principals Exchange Group Co., Ltd shall be (Tranche II) repaid (Variety II) when expired. “21 Konka 01”, “21 Konka 02”, “21 Konka 03”, “22 Konka 03”, “22 Konka 05”, “24 Konka 01”, “24 Konka 02” and “24 Konka 03” were placed privately to professional investors meeting the requirements of management method for investors eligibility of Appropriate arrangement of the Shenzhen Stock Exchange, which not exceeding 200 persons. “22 Konka 01” was offered investors (if any) publicly to professional institutional investors meeting the requirements of Measures for the Administration of Issuing and Trading Corporate Bonds and opening a qualified A- share securities account in Shenzhen Branch of China Securities Depository and Clearing Corporation Limited. Comprehensive protocol trading platform: Match-and-deal, click-and-deal, inquire-and- Applicable trade mechanism deal, bid-and-deal, and negotiate-and-deal Risk of delisting (if any) and No countermeasures Overdue bonds □ Applicable √ Not applicable 2. The Trigger and Execution of the Option Clause of the Issuers or Investors and the Investor Protection Clause □ Applicable √ Not applicable 3. Intermediary Signature Contact person of Bond Intermediary Office address Contact number accountant intermediary Industrial 32/F, SK Building, No. 6, Zhang Huifang, Securities Co., Jianguomen Waidajie, / 010-50911203 Zhang Ning Ltd Chaoyang District, Beijing Centralized Business, Finance and Business 21 Konka 01 District, Zone B, Zhongtian 21 Konka 02 ZTF Securities Exhibition City, North / Qian Xi, Cai Dan 0755-28777990 21 Konka 03 Co., Ltd. Changling Road, Guanshanhu District, Guiyang, Guizhou (North) United Ratings No.2 Jianwai Street, / Liu Qi 010-85679696 Co., Ltd. Chaoyang District, Beijing 118 Konka Group Co., Ltd. Annual Report 2023 19-25/F, Building 2, CP Beijing Center, Yard 20, Jinhe East Zhang Jin xing, Yingke Law / 0755-36866600 Road, Chaoyang District, Han Jian Firm Beijing Shinewing Certified 8/F, Block A, Fu Hua Public Mansion, No. 8, Liu Jianhua, Tang Liu Jianhua, Tang Accountants 028-62922886 Chaoyangmen Beidajie, Qimei Qimei (Special Dongcheng District, Beijing General Partnership) Industrial 32/F, SK Building, No. 6, Zhang Huifang, Securities Co., Jianguomen Waidajie, / 010-50911203 Zhang Ning Ltd Chaoyang District, Beijing Centralized Business, Finance and Business District, Zone B, Zhongtian ZTF Securities Exhibition City, North / Qian Xi, Cai Dan 0755-28777990 Co., Ltd. Changling Road, Guanshanhu District, Guiyang, Guizhou (North) United Ratings No.2 Jianwai Street, / Liu Qi 010-85679696 22 Konka 01 Co., Ltd. Chaoyang District, Beijing 19-25/F, Building 2, CP Beijing Center, Yard 20, Jinhe East Zhang Jin xing, Yingke Law / 0755-36866600 Road, Chaoyang District, Han Jian Firm Beijing Shinewing Certified Guo Dongchao, 8/F, Block A, Fu Hua Public Liu Lihong, Zhan Mansion, No. 8, Liu Jianhua, Tang Accountants Miaoling, Liu 028-62922886 Chaoyangmen Beidajie, Qimei (Special Jianhua, Tang Dongcheng District, Beijing General Qimei Partnership) Industrial 32/F, SK Building, No. 6, Zhang Huifang, Securities Co., Jianguomen Waidajie, / 010-50911203 Zhang Ning Ltd Chaoyang District, Beijing Centralized Business, Finance and Business District, Zone B, Zhongtian ZTF Securities Exhibition City, North / Qian Xi 0755-28777990 Co., Ltd. Changling Road, Guanshanhu 22 Konka 03 District, Guiyang, Guizhou 22 Konka 05 (North) 19-25/F, Building 2, CP Beijing Center, Yard 20, Jinhe East Zhang Jin xing, Yingke Law / 0755-36866600 Road, Chaoyang District, Han Jian Firm Beijing Shinewing 8/F, Block A, Fu Hua Guo Dongchao, Liu Jianhua, Tang 020-28309500 Certified Mansion, No. 8, Liu Lihong, Zhan Qimei 119 Konka Group Co., Ltd. Annual Report 2023 Public Chaoyangmen Beidajie, Miaoling, Liu Accountants Dongcheng District, Beijing Jianhua, Tang (Special Qimei General Partnership) Industrial 32/F, SK Building, No. 6, Zhang Huifang, Securities Co., Jianguomen Waidajie, / 010-50911203 Zhang Ning Ltd Chaoyang District, Beijing China No. 111, Fuhua 1st Road, Merchants Chen Cheng, Feng Futian Street, Futian District, / 0755-82943666 Securities Co. Shu Shenzhen, Guangdong Ltd. 23/F, Zizhu International Sinolink Yao Heng, Qing Building, No. 1088 Fangdian Securities Co., / Chunlin, Zhu Jing, 021-68826021 Road, Pudong New Area, Ltd. Zhu Caiyu Shanghai 24 Konka 01 16/F, Building C, Huahai 24 Konka 02 Century Financial Innovation Center, Li Jiaqing, Yang Securities Co., / 0755-83199417 No. 5073, Menghai Avenue, Qi 24 Konka 03 Ltd. Nanshan District, Shenzhen 19-25/F, Building 2, CP Beijing Center, Yard 20, Jinhe East Zhang Jin xing, Yingke Law / 0755-36866600 Road, Chaoyang District, Han Jian Firm Beijing Shinewing Certified 8/F, Block A, Fu Hua Public Mansion, No. 8, Tang Qimei, Liu Tang Qimei, Liu Accountants 020-28309500 Chaoyangmen Beidajie, Lihong Lihong (Special Dongcheng District, Beijing General Partnership) Did the intermediary change during the Reporting Period? □ Yes √ No 4. List of the Usage of the Raised Funds Unit: RMB Whether is consistent with Rectification of Operation of the usage, using raised funds for Unused special account plan and other Bonds Total amount Amount spent violation amount for raised funds agreements operation (if (if any) stipulated in the any) raising specification 21 Konka It has been 100,000.00 100,000.00 0 01 operating well Yes 120 Konka Group Co., Ltd. Annual Report 2023 and there has 21 Konka been no 50,000.00 50,000.00 0 02 violation of relevant 21 Konka regulations and 80,000.00 80,000.00 0 03 fund supervision 22 Konka agreements. 120,000.00 120,000.00 0 01 22 Konka 60,000.00 60,000.00 0 03 22 Konka 60,000.00 60,000.00 0 05 24 Konka 50,000. 150,000.00 100,000.00 01 00 24 Konka 40,000. 40,000.00 0 02 00 24 Konka 40,000. 40,000.00 0 03 00 The raised funds were used for project construction □ Applicable √ Not applicable The Company changed the usage of above funds raised from bonds during the Reporting Period. □ Applicable √ Not applicable 5. Adjustment of Credit Rating Results during the Reporting Period □ Applicable √ Not applicable 6. Execution and Changes of Guarantee, Repayment Plan and Other Repayment Guarantee Measures as well as Influence on Equity of Bond Investors during the Reporting Period √ Applicable □ Not applicable OCT Group provides full, unconditional and irrevocable joint liability guarantee for “21 Konka 01”, “21 Konka 02”, “21 Konka 03”, “22 Konka 01”, “22 Konka 03”, “22 Konka 05”, “24 Konka 01”, “24 Konka 02” and “24 Konka 03”. The Credit Enhancement Mechanisms, Redemption Plans and Other Redemption Security Measures during the Reporting Period are executed according to agreement. No change occurred. III Debt Financing Instruments of Non-financial Enterprises □ Applicable √ Not applicable 121 Konka Group Co., Ltd. Annual Report 2023 No such cases in the Reporting Period. IV Convertible Corporate Bonds □ Applicable √ Not applicable No such cases in the Reporting Period. V Losses of Scope of Consolidated Financial Statements during the Reporting Period Exceeding 10% of Net Assets up the Period-end of Last Year √ Applicable □ Not applicable Impact on the company's Item Details of loss Reason for loss production, operation and solvency 1. In 2023, the Company incurred a certain degree of loss in its colour TV business due to factors such as product strategy adjustments and ongoing supply chain fluctuations. In terms The Company will follow the of domestic sales of colour TVs, the Company made new development strategy of systematic adjustments to its product planning and sales "One Axis, Two Wheels and strategies during the current period. The mid-to-high-end Three Growth Drivers," and new products X6/M6/R7 were mainly launched in the second adhere to long-term value- half of 2023. However, the introduction and sales ramp-up oriented principles and the cycle of these new TV products lagged behind, failing to operational strategy of focusing fully compensate for the clearance losses resulting from the on the long term, making profit discontinuation of old models. This, to some extent, affected before expansion, and the sales scale and total profit of the Company's domestic TV improving specialization before During the business. Regarding TV exports and OEM business, due to consolidation. It will also Reporting the continuous fluctuation in upstream supply chain costs in deepen professional integration, Period, the 2023, the gross margin of orders delivered by the Company's implement lean management, Company's net TV exports and OEM business was relatively low. Although and promote high-quality Net profit profit loss strategic adjustments helped to gradually improve the development. The Company attributabl attributable to operational quality in the second half of 2023, the gross will allocate resources to e to shareholders of margin for the full year 2023 was still unable to fully cover support the development of its sharehold listed rigid expenses. core business, focusing on ers of companies was driving the growth and listed RMB2,164 2. In 2023, in accordance with the Company's development profitability of the white goods companies million, strategy and considering the macroeconomic environment, and PCB sectors. Lean accounting for the Company upheld the principle of "industrial park service management will be 38.34% of the aligned with core business strategy" and continued to reduce implemented to enhance value net assets. its business in industrial parks. There were virtually no new creation and reduce losses in the large-scale industrial park projects in 2023, resulting in a colour TV business. Innovation decrease in related income compared to the previous year. efforts will be directed towards capitalization and efficiency 3. In 2023, although the Company's semiconductor business output of the semiconductor made certain achievements in several key industrial chain business, thereby creating a technologies, it remained in the early stages of specialized business matrix. The industrialization. R&D investment continued to grow, but loss for the reporting period will scale and efficiency in output were not achieved, affecting not affect the normal production the overall operating profit of the Company. and operation of the Company 4. In 2023, based on the principle of prudence, the Company and the repayment of debts due. made a provision for asset impairment of approximately RMB1,017million in accordance with accounting policies 122 Konka Group Co., Ltd. Annual Report 2023 and estimates, resulting in a decrease in profit. 5. In 2023, the Company strategically optimized non-core operations such as industry trade and environmental protection, resulting in a narrowing of profit sources and a decrease in related income. VI Matured Interest-bearing Debt excluding Bonds up the Period-end □ Applicable √ Not applicable VII Whether there was any Violation of Rules and Regulations during the Reporting Period □ Yes √ No VIII The Major Accounting Data and the Financial Indicators of the Recent 2 Years of the Company up the Period-end Unit: RMB’0,000 Item 31 December 2023 31 December 2022 Increase/decrease Current ratio 87.69% 118.17% -25.79% Debt/asset ratio 83.51% 77.74% 5.77% Quick ratio 70.07% 88.59% -20.91% 2023 2022 Increase/decrease Net profit after deducting -291,444.51 -266,555.04 -9.34% non-recurring profit or loss EBITDA/debt ratio -6.33% -3.45% -2.88% Times interest earned -3.50 -1.99 -75.88% Times interest earned of cash 2.17 0.42 416.67% Times interest earned of -2.39 -1.12 -113.39% EBITDA Loan repayment rate 100.00% 100.00% 0.00% Interest coverage 100.00% 100.00% 0.00% 123 Konka Group Co., Ltd. Annual Report 2023 Part X Financial Statements I Independent Auditor’s Report Type of the independent auditor’s opinion Unmodified unqualified opinion Date of signing this report 29 March 2024 ShineWing Certified Public Accountants (Special General Name of the independent auditor Partnership) Reference number of audit report XYZH/2024SZAA8B0233 Name of the certified public accountants Tang Qimei, Liu Lihong Independent Auditor’s Report XYZH/2024SZAA8B0233 Konka Group Co., Ltd. All shareholders of Konka Group Co., Ltd.: I. Opinion We have audited the accompanying financial statements of Konka Group Co., Ltd. (the “Konka Group” ), which comprise the Company’s and consolidated balance sheets of the parent company as at 31 December 2023, the Company’s and consolidated income statements of the parent company, the Company’s and consolidated cash flow statements of the parent company, the Company’s and consolidated statements of changes in shareholders’ equity of the parent company for the year then ended, as well as the notes to the financial statements. In our opinion, the financial statements attached were prepared in line with the regulations of Accounting Standards for Business Enterprises in all significant aspects which gave a true and fair view of the consolidated and parent financial position of the Company as at 31 December 2023 and the consolidated and parent business performance and cash flow of the Company for 2023. II. Basis for Opinion We conducted our audit in accordance with Standards on Auditing for Certified Public Accountants. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. In accordance with professional ethics for certified public accountants, we are independent with Foshan Huaxin Packing Co., Ltd. and we have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained 124 Konka Group Co., Ltd. Annual Report 2023 is sufficient and appropriate to provide a basis for our opinion. III. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the Current Period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 1. Recognition of operating revenues Key audit matters Countermeasures of audit Please refer to the notes to the financial statements "six, (1) Evaluate and test income to confirm the notes to the consolidated financial statements" 50. In 2023, effectiveness of key internal control design and Konka Group's consolidated financial statements operation; confirmed operating income of RMB17,849,331,400, the (2) Obtain signed sales contracts, analyze relevant mainly revenue comes from the Color TV, white goods, provisions, and evaluate whether the revenue optoelectronic display, storage and printed circuit boards, recognition of Konka Group is in compliance with the etc. Due to the importance of revenue to the financial Accounting Standards for Business Enterprises; statements as a whole, and the inherent misstatement risk of management's manipulation of revenue recognition in (3) Obtain the sales list of Konka Group products, order to achieve specific goals or expectations, we make examine the customers’ information registered with the revenue recognition a key audit matter. industrial and commercial administration, inquire the relevant personnel of Konka Group, and identify whether any of the customers is a related party to Konka Group; (4) Perform analytical procedures on revenue and costs, evaluate the rationality of sales revenue and gross profit margin changes; (5) Examine materials such as important sales contracts, orders, invoices, goods ownership transfer certificates, bank receipts, invoices; select important customers, verify the transaction amounts and balances in writing to verify the truthfulness, completeness and accuracy of revenue; (6) Conduct a cut-off test on sales revenue. 125 Konka Group Co., Ltd. Annual Report 2023 2. Recognition of investment income Key audit matters Countermeasures of audit Please refer to the notes to the financial statements "six, (1) Evaluate and test income to confirm the notes to the consolidated financial statements" 57. In 2023, effectiveness of key internal control design and Konka Group's consolidated financial statements operation; confirmed investment income of RMB675,405,200, the (2) Obtaining relevant decision-making documents for mainly revenue comes from the investment income from the disposal of the target company's equity, as well as the transfer of long-term equity investments held by Konka equity transfer agreements and transaction documents, Group to financial assets held for trading as a result of the conducting interviews with the Konka Group company's reduction of its holdings in the secondary market during management and selected equity transferees to the year, as well as investment income arising from the understand the commercial background and rationality disposal of long-term equity investments in certain of the equity transfer, in order to determine the subsidiaries. Since the amount of investment income is authenticity of the equity transfer; significant, we confirm the recognition of investment income as a key audit matter. (3) Obtaining bank receipt certificates for the transfer of equity and inquiring about industrial and commercial changes in the company that is the subject of the transfer of equity so as to determine whether the formalities related to the transfer of shares have been completed; (4) Review the fairness of the consideration for the equity transaction and check whether the measurement of investment income from the disposal of equity interests is in accordance with the provisions of enterprise accounting standards; (5) The procedures implemented in response to the change of the accounting method for the Konka Group Company's equity investment are as follows: ① Obtain decision-making documents related to the change of accounting methods, interview the management and invested company controlling shareholders of the Konka Group Company, and obtain relevant information; ② Based on the information obtained and the 126 Konka Group Co., Ltd. Annual Report 2023 interviews, evaluate whether the Konka Group Company's equity interest in the investee company has significant influence on the investee company, and analyze whether the Konka Group Company's accounting for the matter of identifying the equity investment as an investment in an equity instrument for trading and designating it as a financial asset at fair value through profit or loss is consistent with the provisions of the Accounting Standards for Business Enterprises. (6) Review the calculation process of Konka Group's equity transfer and accounting method change to confirm investment income, and check whether the calculation of investment income is accurate. IV. Other Information The management of the Company is responsible for the other information. The other information comprises all of the information included in the annual report for 2023 other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. V. Responsibility of Management and Those Charged with Governance for the Financial Statements The management of the Company is responsible for the preparation and fair presentation of these financial statements in accordance with Accounting Standards for Business Enterprises to make them a fair presentation and designing, implementing and maintaining internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 127 Konka Group Co., Ltd. Annual Report 2023 In preparing the financial statements, the management of the Company is responsible for assessing the Company’s ability to continue as a going concern, disclosing, if applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. VI. CPA’s Responsibility for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. We report our opinion solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: (1) Identify and assess the risks of major misstatement of financial statements due to fraud or errors, design and implement audit procedures to deal with these risks, and obtain sufficient and appropriate audit evidence as the basis for issuing audit opinions. Since fraud may involve collusion, forgery, intentional omissions, misrepresentation, or overriding internal control, the risk of failing to detect a major misstatement due to fraud is higher than the risk of failing to detect a major misstatement due to error. (2) Understand the internal control related to auditing in order to design appropriate auditing procedures. (3) Evaluate the appropriateness of management's selection of accounting policies and the rationality of accounting estimates and related disclosures. (4) To draw conclusions on the appropriateness of the management's use of continuous operation assumptions. At the same time, based on the audit evidence obtained, a conclusion can be drawn on whether there is a material uncertainty that may cause significant doubts about Konka Group's ability to continue operations. If we conclude that there are significant uncertainties, the auditing standards require us to draw the attention of the users of the statements to the relevant disclosures in 128 Konka Group Co., Ltd. Annual Report 2023 the financial statements in the audit report; if the disclosures are insufficient, we should issue a non- reserved opinion. Our conclusion is based on the information available as of the date of the audit report. However, future events or circumstances may prevent Konka Group from continuing its operations. (5) Evaluate the overall presentation, structure, and content of the financial statements, and evaluate whether the financial statements fairly reflect related transactions and events. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and related safeguards (if applicable). From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the Current Period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. ShineWing Certified Public Accountants CPA: (Engagement Partner) (Special General Partnership) CPA: BeijingChina 29 March 2024 129 Konka Group Co., Ltd. Annual Report 2023 II Financial Statements Currency unit for the financial statements and the notes thereto: RMB 1. Consolidated Balance Sheet Prepared by Konka Group Co., Ltd. 31 December 2023 Unit: RMB Item 31 December 2023 1 January 2023 Current assets: Monetary assets 6,506,359,577.02 5,988,095,490.71 Settlement reserve Interbank loans granted Held-for-trading financial assets 469,636,700.78 Derivative financial assets Notes receivable 533,171,949.15 1,059,737,243.54 Accounts receivable 1,726,545,973.08 2,036,734,836.22 Accounts receivable financing 173,396,326.14 237,187,228.44 Prepayments 165,454,311.51 389,947,652.39 Premiums receivable Reinsurance receivables Receivable reinsurance contract reserve Other receivables 989,121,067.51 1,442,124,845.58 Including: Interest receivable 6,681,258.01 3,878,580.64 Dividends receivable 941,482.38 272,999.43 Financial assets purchased under resale agreements Inventories 3,249,897,700.98 4,409,767,756.22 130 Konka Group Co., Ltd. Annual Report 2023 Contract assets 2,190,385.93 Assets held for sale Current portion of non-current assets 14,630,000.00 Other current assets 2,359,159,468.75 2,038,841,225.83 Total current assets 16,174,933,460.85 17,617,066,278.93 Non-current assets: Loans and advances to customers Investments in debt obligations Investments in other debt obligations Long-term receivables 800,400.00 Long-term equity investments 5,566,483,863.29 6,351,232,955.58 Investments in other equity 23,841,337.16 23,841,337.16 instruments Other non-current financial assets 2,009,676,398.00 2,639,662,273.32 Investment property 1,470,226,723.87 802,407,844.60 Fixed assets 5,218,297,745.16 4,114,029,693.38 Construction in progress 860,899,498.68 1,990,361,377.07 Productive living assets Oil and gas assets Right-of-use assets 197,054,423.17 50,019,838.68 Intangible assets 1,087,386,015.34 1,116,739,707.27 Development costs Goodwill 22,196,735.11 22,196,735.11 Long-term prepaid expense 518,919,223.71 387,309,503.07 Deferred income tax assets 1,426,573,982.16 1,197,406,370.65 Other non-current assets 1,248,328,806.16 1,710,245,378.26 Total non-current assets 19,649,884,751.81 20,406,253,414.15 131 Konka Group Co., Ltd. Annual Report 2023 Total assets 35,824,818,212.66 38,023,319,693.08 Current liabilities: Short-term borrowings 6,390,592,056.27 7,579,559,304.97 Borrowings from the central bank Interbank loans obtained Held-for-trading financial liabilities Derivative financial liabilities Notes payable 990,482,927.20 1,054,573,822.04 Accounts payable 2,726,831,675.97 2,659,946,562.93 Advances from customers 825.69 Contract liabilities 527,975,160.12 601,044,358.35 Financial assets sold under repurchase agreements Customer deposits and interbank deposits Payables for acting trading of securities Payables for underwriting of securities Employee benefits payable 304,733,103.63 348,608,204.05 Taxes payable 214,417,135.87 291,102,679.36 Other payables 1,922,791,905.14 1,895,711,373.34 Including: Interest payable 29,590,464.00 Dividends payable Handling charges and commissions payable Reinsurance payables Liabilities directly associated with assets held for sale Current portion of non-current 5,314,147,396.36 409,220,030.69 liabilities 132 Konka Group Co., Ltd. Annual Report 2023 Other current liabilities 54,330,715.75 68,449,783.71 Total current liabilities 18,446,302,076.31 14,908,216,945.13 Non-current liabilities: Insurance contract reserve Long-term borrowings 7,779,150,079.88 8,906,931,402.89 Bonds payable 2,426,992,578.67 4,792,392,044.13 Including: Preferred shares Perpetual bonds Lease liabilities 160,218,818.92 36,586,639.16 Long-term payables 6,135,734.07 7,964,127.18 Long-term employee benefits payable 4,718,466.37 4,894,209.73 Provisions 304,519,839.80 159,395,579.55 Deferred income 425,135,237.90 334,844,966.31 Deferred income tax liabilities 185,026,165.27 95,427,298.31 Other non-current liabilities 179,996,351.33 314,233,260.08 Total non-current liabilities 11,471,893,272.21 14,652,669,527.34 Total liabilities 29,918,195,348.52 29,560,886,472.47 Owners’ equity: Share capital 2,407,945,408.00 2,407,945,408.00 Other equity instruments Including: Preferred shares Perpetual bonds Capital reserves 526,499,506.76 365,247,361.05 Less: Treasury stock Other comprehensive income -13,443,558.44 -14,265,181.63 Specific reserve 4,657,488.24 133 Konka Group Co., Ltd. Annual Report 2023 Surplus reserves 1,244,180,364.24 1,244,180,364.24 General reserve Retained earnings 1,474,561,975.85 3,638,352,029.02 Total equity attributable to owners of the 5,644,401,184.65 7,641,459,980.68 Company as the parent Non-controlling interests 262,221,679.49 820,973,239.93 Total owners’ equity 5,906,622,864.14 8,462,433,220.61 Total liabilities and owners’ equity 35,824,818,212.66 38,023,319,693.08 Legal representative: Zhou Bin CFO: Li Chunlei Head of the financial department: Ping Heng 2. Balance Sheet of the Company as the Parent Unit: RMB Item 31 December 2023 1 January 2023 Current assets: Monetary assets 4,739,026,071.80 3,987,295,740.42 Held-for-trading financial assets 469,636,700.78 Derivative financial assets Notes receivable 212,545,745.69 353,764,106.66 Accounts receivable 2,907,508,425.51 4,473,878,994.50 Accounts receivable financing Prepayments 3,050,914,644.86 2,105,477,988.44 Other receivables 7,962,523,971.43 10,342,326,355.05 Including: Interest receivable 6,325,400.49 3,878,580.64 Dividends receivable 395,209,709.13 393,563,347.61 Inventories 74,359,735.29 173,658,748.80 Contract assets Assets held for sale Current portion of non-current assets 134 Konka Group Co., Ltd. Annual Report 2023 Other current assets 1,776,247,847.16 1,581,440,821.79 Total current assets 21,192,763,142.52 23,017,842,755.66 Non-current assets: Investments in debt obligations Investments in other debt obligations Long-term receivables Long-term equity investments 8,353,187,518.14 9,100,689,137.42 Investments in other equity 17,940,215.36 17,940,215.36 instruments Other non-current financial assets 396,353,137.96 396,353,137.96 Investment property 896,398,058.58 439,835,051.61 Fixed assets 408,039,474.28 418,021,638.28 Construction in progress 10,456,702.05 481,659,536.66 Productive living assets Oil and gas assets Right-of-use assets 1,341,125.40 Intangible assets 44,546,041.59 65,620,126.31 Development costs Goodwill Long-term prepaid expense 43,352,655.77 36,665,581.09 Deferred income tax assets 1,186,943,851.11 1,127,531,647.49 Other non-current assets 42,958,066.97 458,931.60 Total non-current assets 11,400,175,721.81 12,086,116,129.18 Total assets 32,592,938,864.33 35,103,958,884.84 Current liabilities: Short-term borrowings 2,344,154,349.99 2,217,049,472.22 Held-for-trading financial liabilities 135 Konka Group Co., Ltd. Annual Report 2023 Derivative financial liabilities Notes payable 83,813,428.75 890,526,510.04 Accounts payable 6,459,535,317.41 6,918,579,963.57 Advances from customers Contract liabilities 943,718,573.19 2,445,363,632.98 Employee benefits payable 65,273,780.70 90,137,022.47 Taxes payable 9,069,845.15 4,095,684.11 Other payables 3,471,748,973.76 3,941,891,644.62 Including: Interest payable 29,271,307.22 Dividends payable Liabilities directly associated with assets held for sale Current portion of non-current 5,206,842,165.89 151,933,839.55 liabilities Other current liabilities 9,728,362.56 7,129,729.38 Total current liabilities 18,593,884,797.40 16,666,707,498.94 Non-current liabilities: Long-term borrowings 6,655,411,621.10 8,261,287,052.44 Bonds payable 2,426,992,578.67 4,792,392,044.13 Including: Preferred shares Perpetual bonds Lease liabilities Long-term payables Long-term employee benefits payable Provisions 201,607,949.06 83,666,032.25 Deferred income 40,966,821.50 43,377,324.62 Deferred income tax liabilities 69,803,544.47 136 Konka Group Co., Ltd. Annual Report 2023 Other non-current liabilities 45,682,878.82 42,948,698.55 Total non-current liabilities 9,440,465,393.62 13,223,671,151.99 Total liabilities 28,034,350,191.02 29,890,378,650.93 Owners’ equity: Share capital 2,407,945,408.00 2,407,945,408.00 Other equity instruments Including: Preferred shares Perpetual bonds Capital reserves 341,229,750.75 241,044,390.55 Less: Treasury stock Other comprehensive income -1,399,371.64 -1,500,000.00 Specific reserve Surplus reserves 1,260,024,039.76 1,260,024,039.76 Retained earnings 550,788,846.44 1,306,066,395.60 Total owners’ equity 4,558,588,673.31 5,213,580,233.91 Total liabilities and owners’ equity 32,592,938,864.33 35,103,958,884.84 3. Consolidated Income Statement Unit: RMB Item 2023 2022 1. Revenue 17,849,331,429.24 29,607,854,255.27 Including: Operating revenue 17,849,331,429.24 29,607,854,255.27 Interest revenue Insurance premium income Handling charge and commission income 2. Costs and expenses 20,267,187,420.23 32,164,076,308.01 Including: Cost of sales 17,149,036,750.50 28,788,638,393.88 137 Konka Group Co., Ltd. Annual Report 2023 Interest costs Handling charge and commission expense Surrenders Net insurance claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and surcharges 105,488,040.47 119,339,820.01 Selling expense 1,145,124,848.96 1,240,144,735.77 Administrative expense 807,527,910.20 949,647,590.28 R&D expense 497,993,759.86 543,882,024.89 Finance costs 562,016,110.24 522,423,743.18 Including: Interest expense 884,535,066.01 913,721,408.10 Interest income 286,969,209.86 237,115,652.09 Add: Other income 270,618,031.94 928,712,500.81 Return on investment ( “-” for loss) 675,405,221.53 936,006,397.44 Including: Share of profit or loss of joint -170,413,352.22 123,392,731.97 ventures and associates Income from the derecognition of financial assets at amortized cost ( “-” for -4,507,260.06 loss) Exchange gain ( “-” for loss) Net gain on exposure hedges ( “-” for loss) Gain on changes in fair value ( “-” for -97,937,910.89 -40,731,333.54 loss) Credit impairment loss ( “-” for loss) -456,603,000.84 -949,885,019.53 Asset impairment loss ( “-” for loss) -560,592,965.39 -295,395,852.33 138 Konka Group Co., Ltd. Annual Report 2023 Asset disposal income ( “-” for loss) 54,321.20 9,580,708.29 3. Operating profit ( “-” for loss) -2,586,912,293.44 -1,967,934,651.60 Add: Non-operating income 26,263,072.49 125,139,042.00 Less: Non-operating expense 156,685,855.03 224,724,245.84 4. Profit before tax ( “-” for loss) -2,717,335,075.98 -2,067,519,855.44 Less: Income tax expense -81,448,414.64 -298,299,507.08 5. Net profit ( “-” for net loss) -2,635,886,661.34 -1,769,220,348.36 5.1 By operating continuity 5.1.1 Net profit from continuing -2,635,886,661.34 -1,769,220,348.36 operations ( “-” for net loss) 5.1.2 Net profit from discontinued operations ( “-” for net loss) 5.2 By ownership 5.2.1 Net profit attributable to shareholders of the Company as the -2,163,790,053.17 -1,470,466,806.68 parent 5.2.1 Net profit attributable to non- -472,096,608.17 -298,753,541.68 controlling interests 6. Other comprehensive income, net of -84,979.37 7,669,161.80 tax Attributable to owners of the Company 821,623.19 6,070,906.24 as the parent 6.1 Items that will not be reclassified to profit or loss 6.1.1 Changes caused by remeasurements on defined benefit schemes 6.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 6.1.3 Changes in the fair value of investments in other equity instruments 6.1.4 Changes in the fair value arising from changes in own credit risk 6.1.5 Other 139 Konka Group Co., Ltd. Annual Report 2023 6.2 Items that will be reclassified to 821,623.19 6,070,906.24 profit or loss 6.2.1 Other comprehensive income that will be reclassified to profit or loss under -86,041.63 -2,814,803.62 the equity method 6.2.2 Changes in the fair value of investments in other debt obligations 6.2.3 Other comprehensive income arising from the reclassification of financial assets 6.2.4 Credit impairment allowance for investments in other debt obligations 6.2.5 Reserve for cash flow hedges 6.2.6 Differences arising from the translation of foreign currency- 907,664.82 8,885,709.86 denominated financial statements 6.2.7 Other Attributable to non-controlling interests -906,602.56 1,598,255.56 7. Total comprehensive income -2,635,971,640.71 -1,761,551,186.56 Attributable to owners of the Company -2,162,968,429.98 -1,464,395,900.44 as the parent Attributable to non-controlling interests -473,003,210.73 -297,155,286.12 8. Earnings per share 8.1 Basic earnings per share -0.8986 -0.6107 8.2 Diluted earnings per share -0.8986 -0.6107 Legal representative: Zhou Bin CFO: Li Chunlei Head of the financial department: Ping Heng 4. Income Statement of the Company as the Parent Unit: RMB Item 2023 2022 1. Operating revenue 1,847,995,092.79 1,811,783,519.02 Less: Cost of sales 1,881,115,675.91 1,962,490,364.97 Taxes and surcharges 13,005,236.44 15,338,452.88 140 Konka Group Co., Ltd. Annual Report 2023 Selling expense 246,898,982.08 366,876,186.97 Administrative expense 294,635,923.59 336,016,963.92 R&D expense 33,956,995.43 72,787,542.14 Finance costs 417,683,630.95 285,666,822.84 Including: Interest costs 790,542,260.97 819,229,878.82 Interest revenue 357,509,620.15 353,261,761.47 Add: Other income 51,184,013.42 54,121,427.81 Return on investment ( “-” for loss) 644,677,669.41 538,946,392.20 Including: Share of profit or loss of joint -34,502,328.35 138,908,805.41 ventures and associates Income from the derecognition of financial assets at amortized cost ( “-” for loss) Net gain on exposure hedges ( “-” for loss) Gain on changes in fair value ( “-” for -133,358,646.82 -44,886,112.74 loss) Credit impairment loss ( “-” for loss) -86,470,747.72 -711,816,020.43 Asset impairment loss ( “-” for loss) -90,170,750.24 -355,291,000.36 Asset disposal income ( “-” for loss) -17,987.13 6,034,182.85 2. Operating profit ( “-” for loss) -653,457,800.69 -1,740,283,945.37 Add: Non-operating income 2,160,817.77 91,504,267.54 Less: Non-operating expense 87,467,742.44 64,661,744.87 3. Profit before tax ( “-” for loss) -738,764,725.36 -1,713,441,422.70 Less: Income tax expense 10,424,753.35 -415,717,523.01 4. Net profit ( “-” for net loss) -749,189,478.71 -1,297,723,899.69 4.1 Net profit from continuing -749,189,478.71 -1,297,723,899.69 operations ( “-” for net loss) 4.2 Net profit from discontinued operations ( “-” for net loss) 5. Other comprehensive income, net of 100,628.36 141 Konka Group Co., Ltd. Annual Report 2023 tax 5.1 Items that will not be reclassified to profit or loss 5.1.1 Changes caused by remeasurements on defined benefit schemes 5.1.2 Other comprehensive income that will not be reclassified to profit or loss under the equity method 5.1.3 Changes in the fair value of investments in other equity instruments 5.1.4 Changes in the fair value arising from changes in own credit risk 5.1.5 Other 5.2 Items that will be reclassified to 100,628.36 profit or loss 5.2.1 Other comprehensive income that will be reclassified to profit or loss under 100,628.36 the equity method 5.2.2 Changes in the fair value of investments in other debt obligations 5.2.3 Other comprehensive income arising from the reclassification of financial assets 5.2.4 Credit impairment allowance for investments in other debt obligations 5.2.5 Reserve for cash flow hedges 5.2.6 Differences arising from the translation of foreign currency- denominated financial statements 5.2.7 Other 6. Total comprehensive income -749,088,850.35 -1,297,723,899.69 7. Earnings per share 7.1 Basic earnings per share -0.31 -0.54 7.2 Diluted earnings per share -0.31 -0.54 142 Konka Group Co., Ltd. Annual Report 2023 5. Consolidated Cash Flow Statement Unit: RMB Item 2023 2022 1. Cash flows from operating activities: Proceeds from sale of commodities and 17,378,235,561.44 31,247,109,491.35 rendering of services Net increase in customer deposits and interbank deposits Net increase in borrowings from the central bank Net increase in loans from other financial institutions Premiums received on original insurance contracts Net proceeds from reinsurance Net increase in deposits and investments of policy holders Interest, handling charges and commissions received Net increase in interbank loans obtained Net increase in proceeds from repurchase transactions Net proceeds from acting trading of securities Tax rebates 233,820,738.77 622,846,091.66 Cash generated from other operating 1,091,889,678.99 1,597,087,027.13 activities Subtotal of cash generated from 18,703,945,979.20 33,467,042,610.14 operating activities Payments for commodities and services 14,643,693,951.06 29,639,887,809.19 Net increase in loans and advances to customers Net increase in deposits in the central bank and in interbank loans granted 143 Konka Group Co., Ltd. Annual Report 2023 Payments for claims on original insurance contracts Net increase in interbank loans granted Interest, handling charges and commissions paid Policy dividends paid Cash paid to and for employees 1,734,831,096.85 1,800,638,478.78 Taxes paid 466,335,778.71 585,416,375.42 Cash used in other operating activities 1,305,983,874.68 1,969,402,988.58 Subtotal of cash used in operating 18,150,844,701.30 33,995,345,651.97 activities Net cash generated from/used in 553,101,277.90 -528,303,041.83 operating activities 2. Cash flows from investing activities: Proceeds from disinvestment 1,463,288,277.00 875,506,214.56 Return on investment 140,970,812.05 128,778,266.85 Net proceeds from the disposal of fixed assets, intangible assets and other long- 27,438,051.10 9,239,243.90 lived assets Net proceeds from the disposal of 165,963,074.98 297,094,350.04 subsidiaries and other business units Cash generated from other investing 683,929,746.03 3,988,535,308.42 activities Subtotal of cash generated from 2,481,589,961.16 5,299,153,383.77 investing activities Payments for the acquisition of fixed assets, intangible assets and other long- 1,476,559,951.04 3,613,087,559.62 lived assets Payments for investments 7,200,000.00 877,816,559.18 Net increase in pledged loans granted Net payments for the acquisition of subsidiaries and other business units Cash used in other investing activities 529,573,236.98 482,014,454.76 Subtotal of cash used in investing 2,013,333,188.02 4,972,918,573.56 144 Konka Group Co., Ltd. Annual Report 2023 activities Net cash generated from/used in 468,256,773.14 326,234,810.21 investing activities 3. Cash flows from financing activities: Capital contributions received 1,978,378.97 87,895,628.12 Including: Capital contributions by non- 1,978,378.97 87,895,628.12 controlling interests to subsidiaries Borrowings raised 10,950,030,506.74 20,760,552,594.08 Cash generated from other financing 738,205,183.98 525,285,976.82 activities Subtotal of cash generated from 11,690,214,069.69 21,373,734,199.02 financing activities Repayment of borrowings 10,672,675,811.70 19,821,101,947.09 Interest and dividends paid 812,403,661.30 1,025,755,719.07 Including: Dividends paid by 735,000.00 110,680,000.00 subsidiaries to non-controlling interests Cash used in other financing activities 1,036,318,624.40 859,164,470.60 Subtotal of cash used in financing 12,521,398,097.40 21,706,022,136.76 activities Net cash generated from/used in -831,184,027.71 -332,287,937.74 financing activities 4. Effect of foreign exchange rates 22,698,315.32 27,920,961.23 changes on cash and cash equivalents 5. Net increase in cash and cash 212,872,338.65 -506,435,208.13 equivalents Add: Cash and cash equivalents, 5,461,912,010.90 5,968,347,219.03 beginning of the period 6. Cash and cash equivalents, end of the 5,674,784,349.55 5,461,912,010.90 period 6. Cash Flow Statement of the Company as the Parent Unit: RMB Item 2023 2022 1. Cash flows from operating activities: 145 Konka Group Co., Ltd. Annual Report 2023 Proceeds from sale of commodities and 5,703,782,163.83 7,297,996,873.73 rendering of services Tax rebates 70,166,100.06 230,063,490.93 Cash generated from other operating 208,374,488.43 372,486,582.46 activities Subtotal of cash generated from 5,982,322,752.32 7,900,546,947.12 operating activities Payments for commodities and services 6,122,040,543.84 7,900,208,310.15 Cash paid to and for employees 250,167,106.81 312,957,158.05 Taxes paid 21,411,524.06 44,490,340.42 Cash used in other operating activities 382,250,859.55 927,360,896.15 Subtotal of cash used in operating 6,775,870,034.26 9,185,016,704.77 activities Net cash generated from/used in -793,547,281.94 -1,284,469,757.65 operating activities 2. Cash flows from investing activities: Proceeds from disinvestment 962,711,727.95 572,941,738.40 Return on investment 73,394,567.02 70,285,307.27 Net proceeds from the disposal of fixed assets, intangible assets and other long- 493,918.22 66,770.14 lived assets Net proceeds from the disposal of subsidiaries and other business units Cash generated from other investing 4,984,828,057.53 6,707,788,692.79 activities Subtotal of cash generated from 6,021,428,270.72 7,351,082,508.60 investing activities Payments for the acquisition of fixed assets, intangible assets and other long- 126,046,197.64 219,097,737.67 lived assets Payments for investments 139,400,000.00 896,121,280.49 Net payments for the acquisition of subsidiaries and other business units Cash used in other investing activities 3,091,985,302.32 6,311,902,161.21 146 Konka Group Co., Ltd. Annual Report 2023 Subtotal of cash used in investing 3,357,431,499.96 7,427,121,179.37 activities Net cash generated from/used in 2,663,996,770.76 -76,038,670.77 investing activities 3. Cash flows from financing activities: Capital contributions received Borrowings raised 8,177,775,555.56 17,271,455,216.03 Cash generated from other financing 9,919,391,242.45 15,043,752,843.76 activities Subtotal of cash generated from 18,097,166,798.01 32,315,208,059.79 financing activities Repayment of borrowings 7,748,613,878.32 15,948,765,699.19 Interest and dividends paid 816,702,948.88 814,951,365.94 Cash used in other financing activities 10,977,125,705.33 15,040,575,205.97 Subtotal of cash used in financing 19,542,442,532.53 31,804,292,271.10 activities Net cash generated from/used in -1,445,275,734.52 510,915,788.69 financing activities 4. Effect of foreign exchange rates 4,531,990.24 597,369.19 changes on cash and cash equivalents 5. Net increase in cash and cash 429,705,744.54 -848,995,270.54 equivalents Add: Cash and cash equivalents, 3,833,613,544.22 4,682,608,814.76 beginning of the period 6. Cash and cash equivalents, end of the 4,263,319,288.76 3,833,613,544.22 period 147 Konka Group Co., Ltd. Annual Report 2023 7. Consolidated Statements of Changes in Owners’ Equity 2023 Unit: RMB 2023 Equity attributable to owners of the Company as the parent Other equity G Item instruments en O Less: Spec er t Non-controlling Total owners’ Other interests equity Capital Trea ific al h Share capital O comprehensive Surplus reserves Retained earnings Subtotal Prefe reserves sury reser re e Perpet t income rred stock ve se r ual h share rv bonds e s e r 1. Balance as at the end of the 2,407,945,408.00 365,247,361.05 -14,265,181.63 1,244,180,364.24 3,637,291,770.33 7,640,399,721.99 820,973,239.93 8,461,372,961.92 prior year Add: Adjustment for change in 1,060,258.69 1,060,258.69 1,060,258.69 accounting policy Adjustment for correction of previous error Other adjustments 2. Balance as at the beginning 2,407,945,408.00 365,247,361.05 -14,265,181.63 1,244,180,364.24 3,638,352,029.02 7,641,459,980.68 820,973,239.93 8,462,433,220.61 of the year 4,657 3. Increase/ decrease in the 161,252,145.71 821,623.19,488. -2,163,790,053.17 -1,997,058,796.03 -558,751,560.44 -2,555,810,356.47 period ( “-” for decrease) 24 3.1 Total comprehensive 821,623.19 -2,163,790,053.17 -2,162,968,429.98 -473,003,210.73 -2,635,971,640.71 income 148 Konka Group Co., Ltd. Annual Report 2023 3.2 Capital increased and 161,252,145.71 161,252,145.71 -86,392,628.48 74,859,517.23 reduced by owners 3.2.1 Ordinary shares increased -16,021,621.03 -16,021,621.03 by owners 3.2.2 Capital increased by holders of other equity instruments 3.2.3 Share-based payments included in owners’ equity 3.2.4 Other 161,252,145.71 161,252,145.71 -70,371,007.45 90,881,138.26 3.3 Profit distribution -735,000.00 -735,000.00 3.3.1 Appropriation to surplus reserves 3.3.2 Appropriation to general reserve 3.3.3 Appropriation to -735,000.00 -735,000.00 owners (or shareholders) 3.3.4 Other 3.4 Transfers within owners’ equity 3.4.1 Increase in capital (or share capital) from capital reserves 3.4.2 Increase in capital (or share capital) from surplus reserves 149 Konka Group Co., Ltd. Annual Report 2023 3.4.3 Loss offset by surplus reserves 3.4.4 Changes in defined benefit schemes transferred to retained earnings 3.4.5 Other comprehensive income transferred to retained earnings 3.4.6 Other 4,657 3.5 Specific reserve,488. 4,657,488.24 669,962.82 5,327,451.06 24 5,509 3.5.1 Increase in the period,215. 5,509,215.43 933,563.87 6,442,779.30 43 851,7 3.5.2 Used in the period 27.19 851,727.19 263,601.05 1,115,328.24 3.6 Other 709,315.95 709,315.95 4,657 4. Balance as at the end of the 2,407,945,408.00 526,499,506.76 -13,443,558.44,488. 1,244,180,364.24 1,474,561,975.85 5,644,401,184.65 262,221,679.49 5,906,622,864.14 period 24 2022 Unit: RMB 2022 Equity attributable to owners of the Company as the parent Item Non-controlling Total owners’ Other equity Retained interests equity Share capital Capital reserves Less: Other Spe Surplus reserves Gen O Subtotal instruments earnings Treas comprehensive cific eral t 150 Konka Group Co., Ltd. Annual Report 2023 ury income rese reser h Per stock rve ve e Prefe petu O r rred al th share bon er s ds 1. Balance as at the end of the 2,407,945,408.00 234,389,963.10 -20,336,087.87 1,244,180,364.24 5,229,098,788.94 9,095,278,436.41 1,105,670,912.02 10,200,949,348.43 prior year Add: Adjustment for change 117,317.16 117,317.16 117,317.16 in accounting policy Adjustment for correction of previous error Other adjustments 2. Balance as at the beginning 2,407,945,408.00 234,389,963.10 -20,336,087.87 1,244,180,364.24 5,229,216,106.10 9,095,395,753.57 1,105,670,912.02 10,201,066,665.59 of the year 3. Increase/ decrease in the 130,857,397.95 6,070,906.24 -1,590,864,077.08 -1,453,935,772.89 -284,697,672.09 -1,738,633,444.98 period ( “-” for decrease) 3.1 Total comprehensive 6,070,906.24 -1,470,466,806.68 -1,464,395,900.44 -297,155,286.12 -1,761,551,186.56 income 3.2 Capital increased and 130,857,397.95 130,857,397.95 123,636,214.83 254,493,612.78 reduced by owners 3.2.1 Ordinary shares 87,895,628.12 87,895,628.12 increased by owners 3.2.2 Capital increased by holders of other equity instruments 3.2.3 Share-based payments included in owners’ equity 3.2.4 Other 130,857,397.95 130,857,397.95 35,740,586.71 166,597,984.66 151 Konka Group Co., Ltd. Annual Report 2023 3.3 Profit distribution -120,397,270.40 -120,397,270.40 -110,680,000.00 -231,077,270.40 3.3.1 Appropriation to surplus reserves 3.3.2 Appropriation to general reserve 3.3.3 Appropriation to -120,397,270.40 -120,397,270.40 -110,680,000.00 -231,077,270.40 owners (or shareholders) 3.3.4 Other 3.4 Transfers within owners’ equity 3.4.1 Increase in capital (or share capital) from capital reserves 3.4.2 Increase in capital (or share capital) from surplus reserves 3.4.3 Loss offset by surplus reserves 3.4.4 Changes in defined benefit schemes transferred to retained earnings 3.4.5 Other comprehensive income transferred to retained earnings 3.4.6 Other 3.5 Specific reserve 152 Konka Group Co., Ltd. Annual Report 2023 3.5.1 Increase in the period 3.5.2 Used in the period 3.6 Other -498,600.80 -498,600.80 4. Balance as at the end of the 2,407,945,408.00 365,247,361.05 -14,265,181.63 1,244,180,364.24 3,638,352,029.02 7,641,459,980.68 820,973,239.93 8,462,433,220.61 period 8. Statements of Changes in Owners’ Equity of the Company as the Parent 2023 Unit: RMB 2023 Other equity instruments O Item t Less: Other Specific h Share capital Capital reserves Treasury comprehensive Surplus reserves Retained earnings Total owners’ equity Preferr Perpetu reserve e ed al Other stock income r shares bonds 1. Balance as at the end of the prior year 2,407,945,408.00 241,044,390.55 -1,500,000.00 1,260,024,039.76 1,306,066,395.60 5,213,580,233.91 Add: Adjustment for change in accounting policy Adjustment for correction of previous error Other adjustments -6,088,070.45 -6,088,070.45 2. Balance as at the beginning of the year 2,407,945,408.00 241,044,390.55 -1,500,000.00 1,260,024,039.76 1,299,978,325.15 5,207,492,163.46 100,185,360.20 100,628.36 -749,189,478.71 -648,903,490.15 3. Increase/ decrease in the period ( “-” for 153 Konka Group Co., Ltd. Annual Report 2023 decrease) 3.1 Total comprehensive income 100,628.36 -749,189,478.71 -749,088,850.35 3.2 Capital increased and reduced by 100,185,360.20 100,185,360.20 owners 3.2.1 Ordinary shares increased by owners 3.2.2 Capital increased by holders of other equity instruments 3.2.3 Share-based payments included in owners’ equity 3.2.4 Other 100,185,360.20 100,185,360.20 3.3 Profit distribution 3.3.1 Appropriation to surplus reserves 3.3.2 Appropriation to owners (or shareholders) 3.3.3 Other 3.4 Transfers within owners’ equity 3.4.1 Increase in capital (or share capital) from capital reserves 3.4.2 Increase in capital (or share capital) from surplus reserves 3.4.3 Loss offset by surplus reserves 3.4.4 Changes in defined benefit schemes transferred to retained earnings 154 Konka Group Co., Ltd. Annual Report 2023 3.4.5 Other comprehensive income transferred to retained earnings 3.4.6 Other 3.5 Specific reserve 3.5.1 Increase in the period 3.5.2 Used in the period 3.6 Other 4. Balance as at the end of the period 2,407,945,408.00 341,229,750.75 -1,399,371.64 1,260,024,039.76 550,788,846.44 4,558,588,673.31 2022 Unit: RMB 2022 Other equity instruments O Item t Less: Other Specific h Share capital Perpetu Capital reserves Treasury comprehensive Surplus reserves Retained earnings Total owners’ equity Preferre reserve e al Other stock income d shares r bonds 1. Balance as at the end of the prior year 2,407,945,408.00 110,696,992.60 -1,500,000.00 1,260,024,039.76 2,724,187,542.59 6,501,353,982.95 Add: Adjustment for change in accounting policy Adjustment for correction of previous error Other adjustments 23.10 23.10 155 Konka Group Co., Ltd. Annual Report 2023 2. Balance as at the beginning of the year 2,407,945,408.00 110,696,992.60 -1,500,000.00 1,260,024,039.76 2,724,187,565.69 6,501,354,006.05 3. Increase/ decrease in the period ( “-” 130,347,397.95 -1,418,121,170.09 -1,287,773,772.14 for decrease) 3.1 Total comprehensive income -1,297,723,899.69 -1,297,723,899.69 3.2 Capital increased and reduced by 130,347,397.95 130,347,397.95 owners 3.2.1 Ordinary shares increased by owners 3.2.2 Capital increased by holders of other equity instruments 3.2.3 Share-based payments included in owners’ equity 3.2.4 Other 130,347,397.95 130,347,397.95 3.3 Profit distribution -120,397,270.40 -120,397,270.40 3.3.1 Appropriation to surplus reserves 3.3.2 Appropriation to owners (or -120,397,270.40 -120,397,270.40 shareholders) 3.3.3 Other 3.4 Transfers within owners’ equity 3.4.1 Increase in capital (or share capital) from capital reserves 3.4.2 Increase in capital (or share capital) from surplus reserves 156 Konka Group Co., Ltd. Annual Report 2023 3.4.3 Loss offset by surplus reserves 3.4.4 Changes in defined benefit schemes transferred to retained earnings 3.4.5 Other comprehensive income transferred to retained earnings 3.4.6 Other 3.5 Specific reserve 3.5.1 Increase in the period 3.5.2 Used in the period 3.6 Other 4. Balance as at the end of the period 2,407,945,408.00 241,044,390.55 -1,500,000.00 1,260,024,039.76 1,306,066,395.60 5,213,580,233.91 157 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) I. Company Profile 1. Establishment Konka Group Co., Ltd. (hereinafter referred to as “the Company” and the “Group” when including subsidiaries), is a joint-stock limited company reorganized from the former Shenzhen Konka Electronic Co., Ltd. in August 1991 upon approval of the People’s Government of Shenzhen Municipality, and has its ordinary shares (A-share and B-share) listed on Shenzhen Stock Exchange with prior consent from the People’s Bank of China Shenzhen Special Economic Zone Branch. On 29 August 1995, the Company was renamed to “Konka Group Co., Ltd.” (Credibility code: 914403006188155783) with its main business electronic industry. And now the headquarters locates in No. 28 of No. 12 of Keji South Rd., Science & Technology Park, Yuehai Street, Nanshan District, Shenzhen, Guangdong Province. 2. Share capital After the distribution of bonus shares, allotments, increased share capital and new shares issued over the years, as of 31 December 2023, the Company has issued a total of 2,407,945,408.00 shares (denomination of RMB1 per share) with a registered capital of RMB2,407,945,408.00. 3. The nature of the company's business and main operating activities The Group was mainly engaged in consumer electronics and semiconductor businesses, conducting the production and sales of colour TVs, white goods, optoelectronic display, storage and printed circuit Boards, etc. 4. The financial statements contained herein have been approved for issue by the Board of Directors of the Company on 29 March 2024. II. Consolidation scope The Company has a total of 116 subsidiaries included in the consolidation scope including Shenzhen Konka Electronics Technology Co., Ltd., Anhui Konka Electronic Co., Ltd. and Dongguan Konka Electronic Co., Ltd. The consolidation scope of the Company for the Reporting Period decreased by 11 households including Sichuan Hongxinchen Real Estate Development Co., Ltd., Chongqing Kang xing rui Environmental Technology Co., Ltd., etc. due to losing control or cancellation compared to the same period of last year. For details, please refer to Note 8 “Changes in the consolidation scope” and Note 9 "Equity in Other Entities". A check list of corporate names and their abbreviations mentioned in this Report 158 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) No. Corporate name Abbreviation 1 Shenzhen Konka Electronics Technology Co., Ltd. Electronics Technology 2 Anhui Konka Zhilian E-Commerce Co., Ltd. Anhui Zhilian 3 Nantong Haimen Konka Smart Technology Co., Ltd. Haimen Konka 4 Chengdu Konka Smart Technology Co., Ltd. Chengdu Konka Smart 5 Chengdu Konka Electronic Co., Ltd. Chengdu Konka Electronic 6 Nantong Hongdin Smart Technology Co., Ltd. Nantong Hongdin Shenzhen Kangcheng Technology Innovation and Development 7 Shenzhen Kangcheng Co., Ltd. 8 Xiaojia Technology Co., Ltd. Xiaojia Technology 9 Liaoyang Kangshun Smart Technology Co., Ltd. Liaoyang Kangshun Smart 10 Liaoyang Kangshun Renewable Resources Co., Ltd. Liaoyang Kangshun Renewable 11 Nanjing Konka Electronics Co., Ltd. Nanjing Konka Chuzhou Konka Precision Intelligent Manufacturing Technology 12 Chuzhou Konka Co., Ltd. 13 GuangDong XingDa HongYe Electronic Co., Ltd. XingDa HongYe 14 Shenzhen Konka Circuit Co., Ltd. Konka Circuit 15 Suining Konka Flexible Electronic Technology Co., Ltd. Konka Flexible Electronic 16 Suining Konka Hongye Electronics Co., Ltd. Konka Hongye Electronics 17 Boluo Konka Precision Technology Co., Ltd. Boluo Precision 18 Boluo Konka PCB Co., Ltd. Boluo Konka 19 Anhui Konka Tong giường Electrical Appliances Co., Ltd. Anhui Tong giường 20 Jiangsu Konka Smart Electrical Appliances Co., Ltd. Jiangsu Konka Smart 21 Anhui Konka Electrical Appliance Technology Co., Ltd. Anhui Electrical Appliance 22 Henan Frestec Refrigeration Appliance Co., Ltd. Frestec Refrigeration 23 Henan Frestec Electrical Appliances Co., Ltd. Frestec Electrical Appliances 24 Henan Frestec Household Appliances Co., Ltd. Frestec Household Appliances 159 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) No. Corporate name Abbreviation 25 Henan Frestec Smart Home Technology Co., Ltd. Frestec Smart Home 26 Shenzhen Konka Investment Holdings Co., Ltd. Konka Investment 27 Yibin Konka Technology Park Operation Co., Ltd. Yibin Konka Technology Park 28 Shenzhen Konka Capital Equity Investment Management Co., Ltd. Konka Capital 29 Konka Suiyong Investment (Shenzhen) Co., Ltd. Konka Suiyong 30 Shenzhen Konka Sheng xing Industrial Co., Ltd. Sheng xing Industrial 31 Shenzhen Konka Zhitong Technology Co., Ltd. Zhitong Technology 32 Konka Electronic Material Technology (Shenzhen) Co., Ltd. Konka Electronic Material 33 Beijing Konka Electronic Co., Ltd. Beijing Konka Electronic 34 Tianjin Konka Technology Co., Ltd. Tianjin Konka 35 Suining Konka Industrial Park Development Co., Ltd. Suining Konka Industrial Park Suining Electronic Technological 36 Suining Konka Electronic Technological Innovation Co., Ltd. Innovation 37 Shanghai Konka Industrial Co., Ltd. Shanghai Konka 38 Yantai Kangjin Technology Development Co., Ltd. Yantai Kangjin 39 Shenzhen Konka Mobile Interconnection Technology Co., Ltd. Mobile Interconnection 40 Sichuan Konka Smart Terminal Technology Co., Ltd Sichuan Konka 41 Yibin Konka Smart Technology Co., Ltd. Yibin Smart 42 Shenzhen KONSEMI Co., Ltd. Shenzhen KONSEMI 43 Chongqing Konka Technology Development Co., Ltd. Chongqing Konka 44 Kowin Memory Technology (Shenzhen) Co., Limited Kowin Memory (Shenzhen) 45 Kowin Memory Technology (Hong Kong) Co., Limited Kowin Memory (Hong Kong) 46 Konka Xinyun Semiconductor Technology (Yancheng) Co., Ltd. Konka Xinyun Semiconductor 47 Konka Cross-border (Hebei) Technology Development Co., Ltd. Konka Cross-border (Hebei) 48 Shenzhen Nianhua Enterprise Management Co., Ltd. Shenzhen Nianhua 160 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) No. Corporate name Abbreviation 49 Konka Huazhong (Hunan) Technology Co., Ltd. Konka Huazhong 50 Shenzhen Wankaida Science and Technology Co., Ltd. Wankaida Shenzhen Chuangzhi Electrical 51 Shenzhen Konka Chuangzhi Electrical Appliances Co., Ltd. Appliances 52 Suining Jiarun Property Co., Ltd. Suining Jiarun Property 53 Anhui Konka Electronic Co., Ltd. Anhui Konka 54 Anhui Kangzhi Trade Co., Ltd. Kangzhi Trade 55 Shenzhen Konka Telecommunications Technology Co., Ltd. Telecommunication Technology 56 Konka Mobility Co., Limited Konka Mobility 57 Dongguan Konka Electronic Co., Ltd. Dongguan Konka 58 Suining Konka Smart Technology Co., Ltd. Suining Konka Smart Chongqing Optoelectronic 59 Chongqing Konka Optoelectronic Technology Co., Ltd. Technology 60 Yibin Kangrun Environmental Technology Co., Ltd. Yibin Kangrun 61 Yibin Kangrun Medical Waste Centralized Treatment Co., Ltd. Yibin Kangrun Medical Yibin Kangrun Environmental Protection Power Generation Co., Yibin Kangrun Environmental 62 Ltd. Protection 63 Ningbo Khr Electric Appliance Co., Ltd. Ningbo Khr Electric Appliance 64 Jiangxi Konka New Material Technology Co., Ltd. Jiangxi Konka Jiangxi High Transparent 65 Jiangxi High Transparent Substrate Material Technology Co., Ltd. Substrate 66 Jiangsu Konka Special Material Technology Co., Ltd. Jiangsu Konka Special Material 67 Jiangxi Xinfeng Microcrystalline Jade Co., Ltd. Xinfeng Microcrystalline 68 Konka Huanjia Environmental Technology Co., Ltd. Konka Huanjia 69 Konka Huanjia (Henan) Environmental Technology Co., Ltd. Konka Huanjia (Henan) 70 Shanxi Konka Intelligent Appliance Co., Ltd. Shanxi Konka Intelligent 71 Shenzhen Konka Pengrun Technology & Industry Co., Ltd. Pengrun Technology 161 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) No. Corporate name Abbreviation 72 Jiaxin Technology Co., Ltd. Jiaxin Technology 73 Konka Ronghe Industrial Technology (Zhe gian g) Co., Ltd. Konka Ronghe 74 Chongqing Kang xing rui Environmental Technology Co., Ltd. Chongqing Kang xing rui 75 Shenzhen Konka Unifortune Technology Co., Ltd. Konka Unifortune 76 Jiali International (Hong Kong) Limited Jiali International 77 Sichuan Kangjiatong Technology Co., Ltd. Kangjiatong Kanghong (Yantai) 78 Kanghong (Yantai) Environmental Technology Co., Ltd. Environmental Jiangkang (Shanghai) 79 Jiangkang (Shanghai) Technology Co., Ltd. Technology 80 Shenzhen Konka Intelligent Manufacturing Technology Co., Ltd. Konka Intelligent Manufacturing 81 Hainan Konka Technology Co., Ltd. Hainan Konka Technology 82 Konka Ventures Development (Shenzhen) Co., Ltd. Konka Ventures 83 Yibin Konka Incubator Management Co., Ltd. Yibin Konka Incubator 84 Yantai Konka Healthcare Enterprise Service Co., Ltd. Yantai Konka Chengdu Anren Konka Cultural and Creative Incubator 85 Chengdu Anren Management Co., Ltd. 86 Guiyang Konka Enterprise Service Co., Ltd. Konka Enterprise Service 87 Shenzhen Konka Eco-Development Investment Co., Ltd. Konka Eco-Development 88 Konka (Europe) Co., Ltd. Konka Europe 89 Hong Kong Konka Limited Hong Kong Konka 90 Hongdin International Trading Limited Hongdin Trading 91 Konka North America LLC Konka North America 92 Kanghao Technology Co., Ltd. Kanghao Technology 93 Hongdin Invest Development Limited Hongdin Invest Chain Kingdom Memory 94 Chain Kingdom Memory Technologies Co., Limited Technologies 162 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) No. Corporate name Abbreviation Chain Kingdom Semiconductor 95 Chain Kingdom Semiconductor (Shao xing ) Co., Ltd. (Shao xing ) 96 Hongjet (Hong Kong) Company Limited Hongjet Chongqing Xinyuan 97 Chongqing Xinyuan Semiconductor Co., Ltd. Semiconductor 98 Anlu Konka Industry Operation Service Co. Ltd. Anlu Konka Shenzhen Kanghong Dongsheng Investment Partnership (Limited 99 Kanghong Dongsheng Partnership) Guizhou Konka New Material 100 Guizhou Konka New Material Technology Co., Ltd. Technology 101 Guizhou Kanggui Energy Co., Ltd. Guizhou Kanggui Energy 102 Guangdong Xinwei Semiconductor Co., Ltd. Guangdong Xinwei Guizhou Kanggui Material 103 Guizhou Kanggui Material Technology Co., Ltd. Technology 104 Nantong Kanghai Technology Industry Development Co., Ltd. Nantong Kanghai 105 Chongqing Kangyiyun Business Operation Management Co., Ltd. Chongqing Kangyiyun Jiangxi Konka High-tech Park Operation and Management Co., 106 Jiangxi Konka High-tech Park Ltd. Shangrao Konka Electronic 107 Shangrao Konka Electronic Technology Innovation Co., Ltd. Technology Innovation 108 Guizhou Konka New Energy Material Technology Co., Ltd. Guizhou Konka New Energy 109 Zhe gian g Konka Electronics Co., Ltd. Zhe gian g Konka Electronic Zhe gian g Konka Technology 110 Zhe gian g Konka Technology Industry Development Co., Ltd. Industry 111 Sichuan Hongxinchen Real Estate Development Co., Ltd. Sichuan Hongxinchen 112 Xi'an Konka Intelligent Appliance Co., Ltd. Xi'an Konka Intelligent 113 Xi'an Konka Network Technology Co., Ltd. Xi'an Konka Network Xi'an Kanghong Technology 114 Xi'an Kanghong Technology Industry Development Co., Ltd. Industry Xi'an Konka Intelligent 115 Xi'an Konka Intelligent Technology Development Co., Ltd. Technology 163 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) No. Corporate name Abbreviation 116 Anhui Konka Low Carbon Technology Co., Ltd. Anhui Konka Low Carbon Shenzhen Kanghong Xintong Investment Partnership (Limited 117 Kanghong Xintong Partnership) 118 Songyang Konka Smart Industry Operation Management Co., Ltd. Songyang Industry Operation 119 Shenzhen Kangyan Technology Co., Ltd. Kangyan Technology 120 Konka Photovoltaic Technology Co., Ltd. Konka Photovoltaic Technology 121 Songyang Konka Intelligent Technology Development Co., Ltd. Songyang Konka Intelligent 122 Konka North China (Tianjin) Technology Co., Ltd. Konka North China 123 Zhongshan Kanghong Electronic Technology Co., Ltd. Zhongshan Kanghong 124 Shenzhen Konka Digital Technology Development Co., Ltd. Digital Technology Chongqing Kang xing rui 125 Chongqing Kang xing rui Scraped Automobile Recycling Co., Ltd. Automobile Recycling Kang xing rui Renewable 126 Chongqing Kang xing rui Renewable Resources Co., Ltd. Resources 127 Chongqing Fangbing Real Estate Co., Ltd. Chongqing Fangbing Real Estate III. Basis for the Preparation of Financial Statements 1. Basic for the preparation The Group's financial statements were prepared in accordance with the Accounting Standards for Business Enterprises promulgated by the Ministry of Finance as well as guidelines on accounting standards for business enterprises, announcements on interpreting the accounting standards for business enterprises and other related regulations (hereinafter collectively referred to as the "Accounting Standards for Business Enterprises" ), as well as the disclosure regulations of the General Provisions on Financial Reporting No. 15 for Companies Publicly Issuing Securities (revised in 2023) by the China Securities Regulatory Commission (hereinafter referred to as the "CSRC" ). 2. Going-concern The Group has evaluated its ability to continue as a going concern for 12 months since the end of the Reporting Period, and has not found any matters or situations that raise significant doubts about its ability to continue as a going concern. Therefore, the financial statements are presented on a going concern basis. 164 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) IV. Important Accounting Policies and Estimations Specific accounting policies and accounting estimates: The specific accounting policies and accounting estimates formulated by the Group according to the actual production and operation characteristics include provisions for bad debts of accounts receivable, provisions for inventory depreciation, depreciation of fixed assets, revenue recognition and measurement, etc. 1. Statement of Compliance with the Accounting Standards for Business Enterprises The financial statements prepared by the Group are in compliance with in compliance with the Accounting Standards for Business Enterprises, which factually, accurately and completely present the Group’s financial positions on 31 December 2023, business results and cash flows, and other relevant information for 2023. 2. Fiscal Period The Group’s fiscal year starts on January 1 and ends on December 31 of every year according to the Gregorian calendar. 3. Operating Cycle The normal operating cycle refers to the period from the purchase of assets for processing to the realization of cash or cash equivalents by the Group. An operating cycle for the Group is 12 months, which is also the classification criterion for the liquidity of its assets and liabilities. 4. Recording Currency The Group adopted RMB as the bookkeeping base currency. 5. Methodology for Determining Materiality Criteria and Basis for Selection The Group prepares and discloses financial statements adhering to the principle of materiality. The disclosures in the notes to the financial statements cover matters involving judgments about materiality criteria, the methods for determining materiality thresholds, and the bases for selecting these criteria: Location of Disclosures involving disclosure of this Methodology for determining materiality criteria materiality standard matter in the notes to and basis for selection judgments the present financial statements Significant individually bad Note VI-4. Accounts Individual amount exceeding RMB50,000,000 165 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Location of Disclosures involving disclosure of this Methodology for determining materiality criteria materiality standard matter in the notes to and basis for selection judgments the present financial statements debt provisioned receivables receivable (2) Receivables with significant amount of bad debt provision Note VI-4. Accounts Individual amount exceeding RMB10 million recovered or reversed during receivable (3) the period Significant write-offs of Note VI-4. Accounts receivables during the period Individual amount exceeding RMB10 million receivable (4) Write-offs Significant accounts payable Note VI-28. Accounts Individual amount exceeding RMB10 million aged over 1 year payable Significant receipts in advance Note VI-29; and contractual Note VI-30; liabilities/projected Individual amount exceeding RMB10 million Note VI-33; liabilities/other payables aged Note VI-41 over 1 year Note VI-18. Significant construction in Increase or decrease in a single asset during the year Construction in progress project or a balance exceeding RMB0.1 billion progress (2) 6. Accounting Treatment Methods for Business Combinations under the Same Control or not under the Same Control (1) Business Combinations under the Same Control A business combination involving entities under common control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. As the combining party, the assets and liabilities obtained by the Group in a business combination 166 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) under the same control shall be measured on the basis of their carrying value in the final controlling party on the combining date. As for the balance between the carrying value of the net assets obtained and the carrying value of the consideration paid by it (or aggregate nominal amount of shares issued), the capital reserve shall be adjusted. If the capital reserve is not sufficient to be offset, the retained earnings shall be adjusted. (2) Business Combinations not under the Same Control A business combination involving entities not under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the combination. As purchaser, the identifiable assets, liabilities and contingent liabilities of the acquiree acquired in the business combination under different control shall be measured at fair value on the acquisition date. The balance that the combined cost greater than the fair value share of the identifiable net assets of the purchased party obtained in the combination shall be recognized as goodwill; When the merger cost is less than the fair value share of the identifiable net assets of the acquiree acquired in the merger, the fair value of all identifiable assets, liabilities and contingent liabilities acquired in the merger, and merger costs shall be reviewed first. After review, if the merger cost is still less than the fair value share of the identifiable net assets of the acquiree acquired in the merger, the difference shall be included in the non-operating income of the merger period. 7. Criteria for Judging Control and Methods for Preparing Consolidated Financial Statements The scope of consolidation for the consolidated financial statements of the Group is based on control, including the Company and all its subsidiaries (including enterprises, divisible parts of investees, and structured entities controlled by the Company). The Group assesses control based on whether it has power over the investee, has exposure or rights to variable returns from its involvement with the investee, and has the ability to use its power over the investee to affect the amount of the investor's returns. The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the Group during the preparation of the consolidated financial statements, where the accounting policies and the accounting periods are inconsistent between the Group and subsidiaries. The impact of internal transactions between the Company and its subsidiaries, as well as between subsidiaries and each other, was offset in consolidation. The shares of the subsidiary's owner's equity that do not belong to the parent Group and the shares of minority shareholders' equity in 167 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) current net profit and loss, other comprehensive income and total comprehensive income shall be respectively listed in the consolidated financial statement "Minority shareholders' equity, minority shareholders' profit and loss, other comprehensive income that belongs to minority shareholders and total comprehensive income that belongs to minority shareholders". For subsidiaries acquired through merger of enterprises under the same control, their operating results and cash flows are included in the consolidated financial statements from the beginning of the current merger period. When preparing the comparative consolidated financial statements, the relevant items in the financial statements of the previous year shall be adjusted as if the consolidated reporting entity had existed since the final controlling party began to control it. The treatment method of supplementary disclosure in consolidated financial statement for the Reporting Period when the controlling right is acquired, if the equity of the invested organization under the same control is successively obtained through several transactions and eventually the enterprise merger is conducted. For example: At the occasion of the equity of the investee under the same control is acquired step by step through multiple transactions, and finally form the business combination, when preparing the consolidated statement, it shall be deemed as the adjustment is made in the current state when the final controlling party starts to control. And when compiling the comparative report, the assets and liabilities of the merged party shall be merged into the comparative statement of the consolidated financial statements of the consolidated Group without any earlier than the time when the Group and the merged party are under the control of the ultimate controlling party, and the combined net increased assets shall be adjusted to the relevant items under owners' equity in the comparative statements. In order to avoid the re-calculation of the net assets value of the merged party, the long-term equity investment held by the Group before the merger, the confirmed relevant profit and loss on the same party with the Group and the merged party on the date of acquisition of the original equity from the final control date to the merger date, and changes of other comprehensive income and other net assets shall offset the beginning retained earnings and current profits and losses of the comparative statement period respectively. For subsidiaries acquired through business combination under the different control, the operating results and cash flow shall be included in the consolidated financial statements from the date when the Group obtains the control right. When preparing the consolidated financial statements, the financial statements of the subsidiaries shall be adjusted on the basis of the fair value of the identifiable assets, liabilities and contingent liabilities determined on the acquisition date. The treatment method of supplementary disclosure in consolidated financial statement for the Reporting Period when the controlling right is acquired, if the equity of the invested organization not under the same control is successively obtained through several transactions and eventually the 168 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) enterprise merger is conducted. For example: At the occasion of the equity of the investee under different control is acquired step by step through multiple transactions and eventually form the business combination, when preparing the consolidated statement, the equity of the investee held before the purchase date is re-measured according to the fair value of the equity on the purchase date, and the difference between the fair value and its book value is included in the current investment income. The equity of the acquiree held before the relevant purchase date involves other comprehensive income under the equity method and other changes in owner's equity other than net profit and loss, other comprehensive income and profit distribution, which are converted into investment profit and loss in the current period of the purchase date, except for other comprehensive income arising from the remeasurement of defined benefit plans's net liabilities or changes in net assets by the investee. The Group partially disposes of long-term equity investments in subsidiaries without losing control, when preparing the consolidated financial statements, the difference between the disposal price and the share of net assets that the subsidiaries have continuously calculated since the date of purchase or the date of consolidation is corresponding to the disposal of long-term equity investments. The capital premium or equity premium is adjusted. If the capital reserve is insufficient to offset, the retained earnings are adjusted. If the Group loses control over the investee due to the disposal of some equity investments and other reasons, the remaining equity shall be re-measured at its fair value on the date of loss of control when preparing the consolidated financial statements. The difference between the sum of the consideration obtained from the disposal of equity and the fair value of the remaining equity, minus the share of the net assets of the original subsidiary calculated on the basis of the original shareholding ratio and continuously calculated from the date of purchase or merger, is included in the investment profit and loss of the current period when the control right is lost, and goodwill is offset. Other comprehensive income related to the original subsidiary's equity investment, etc., will be transferred to the current investment profit and loss when the control right is lost. If the Group disposes of the equity investment in a subsidiary Group step by step through multiple transactions until the loss of control right, if the transactions of the disposal of the equity investment in a subsidiary Group until the loss of control right belong to a package transaction, the transactions shall be treated as transactions of the disposal of the subsidiary Group and the loss of control right for accounting. However, the difference between the disposal price and the share of the subsidiary's net assets corresponding to the disposal investment before the loss of control right is recognized as other comprehensive income in the consolidated financial statements, and is transferred to the investment profit and loss of the current period when the control right is lost. 8. Classification of Joint arrangements and Accounting Treatment of Joint Operations 169 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) The Group classifies joint arrangements into joint operations and joint ventures. For a joint operation, the Group, as a joint operator, recognizes the assets and liabilities that it holds and bears in the joint operation, and recognizes the jointly-held assets and jointly-borne liabilities according to the Group’s stake in the joint operation; recognizes relevant income and expense according to the Group’s stake in the joint operation. When the Group purchases or sells the assets not constituting business with the joint operation, the Group only recognized the share of the other joint operators in the gains and losses arising from the transaction. 9. Cash and Cash Equivalents In the Group’s understanding, the cash in the cash flow statement includes cash on hand and deposits that can be used for cover, the cash equivalents in the cash flow statement include high circulating investments held within three months which are easily convertible into known amount of cash and whose risks in change of value are minimal. 10. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements (1) Foreign currency transaction Foreign currency transactions of the Group are initially recognized at the exchange rate at the beginning of the month of the transaction date (usually referring to the middle rate of the foreign exchange rate announced by the People's Bank of China on the day, the same below), converting the foreign currency amount into the functional currency amount. On the balance sheet date, the monetary items in foreign currency were converted into RMB at the spot exchange rate on balance sheet date. Except the exchange difference arising from special foreign-currency borrowing for the purpose of construction or production of assets meeting capitalization conditions treated in the principle of capitalization, the conversion difference was directly included in the current profits and losses. (2) Translation of foreign currency financial statement The asset and liability items in foreign currency balance sheet were converted at the spot exchange rate on balance sheet date; except for “undistributed profit”, owner’s equity items were converted at the sport exchange rate at the time of business occurrence; income and expenditure items in income statement were converted at the average exchange rate for the period (monthly average exchange rate) of the transaction occurrence date. The conversion difference of foreign currency statements arising from the aforementioned conversion was presented in other comprehensive income item. The foreign currency cash flow was converted at the average exchange rate for the period (monthly average exchange rate) of the cash flow occurrence date. The amount of exchange rate change influence on cash was independently presented in cash flow statement. 170 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 11. Financial Instruments (1) Recognition and derecognition of financial instruments The Group recognizes a financial asset or liability when it becomes a party of the relevant financial instrument contract. The Company's financial assets (or a portion of a financial asset, or a part of a group of similar financial assets) shall be derecognized when meeting any of the following conditions, meaning they are removed from the accounts and the balance sheet:1) The right to receive cash flows from the financial asset expires; 2) The financial asset is transferred, and the Group has transferred substantially all risks and rewards of ownership of the financial asset; 3) The financial asset is transferred, and the Group has neither transferred nor retained substantially all risks and rewards of ownership, and has not retained control over the financial asset. 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 Group. If the Group (borrower) concludes an agreement with the lender to replace existing financial liabilities with new ones and contact terms of new financial liabilities are different from those of existing financial liabilities, derecognition of existing financial liabilities and recognition of new financial liabilities shall be conducted. In case of material alteration of contract terms of existing financial liabilities (partial financial liabilities) by the Group, derecognition of existing financial liabilities and recognition of new financial liabilities as per modified terms shall be conducted. In case of derecognition of financial liabilities (partial financial liabilities), the Group includes the balance between its carrying value and payment consideration into the current profit or loss. All regular acquisitions or sales of financial assets are recognized and derecognized on a transaction date basis. (2) Classification and measurement of financial assets The Group 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. The Group classified the financial assets meeting the following conditions at the same time as financial assets at amortized cost: ① The business mode of the Group to manage the financial assets targets at collecting the contractual cash flow. ② The contract of the financial assets stipulates that the cash flow generated in the specific date is the payment of the interest based on the principal and outstanding principal amount. These financial assets initially measured at fair 171 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) value and relevant transaction cost shall be included into the initial recognized amount and subsequently measured at amortized cost. Except for those designated to be hedge items, the difference between the initial recognized amount and the amount due shall be amortized at actual interest rate and their amortization, impairment and exchange gain and loss as well as gains or losses arising from derecognition shall be recorded into the current profit or loss. The Group classified the financial assets meeting the following conditions at the same time as financial assets at fair value through other comprehensive income: ① The Business mode for managing financial assets of the Group takes contract cash flow collected as target and selling as target. ②The contract of the financial assets stipulates that the cash flow generated in the specific date is the payment of the interest based on the principal and outstanding principal amount. These financial assets initially measured at fair value and relevant transaction cost shall be included into the initial recognized amount. Except for those designated as hedged items, as for these financial assets, except for gains or losses on credit impairment, exchange gain and loss and interest of financial assets measured at actual interest rate, other gains or losses generated shall be recorded into other comprehensive income. When derecognized, the accumulated gains and losses originally recorded into other comprehensive income shall be transferred out into the current profit or loss. The Group recognizes interest income according to the effective interest rate method. Interest income is calculated and determined according to the book balance of the financial asset multiplied by the actual interest rate, except for the following circumstances: ① For the financial asset with credit impairment that has been purchased or originated, from the initial recognition, the interest income is calculated and determined according to the amortized cost of the financial asset and the actual interest rate adjusted by credit. ② For financial assets purchased or originated that have not suffered credit impairment but have suffered credit impairment in subsequent periods, the interest income shall be calculated and determined according to the amortized cost and actual interest rate of the financial assets in subsequent periods. The Group designates non-transactional investment in equity instruments as financial assets at fair value through other comprehensive income. Those designated non-transactional investment in equity instruments by the Group is initially measured at fair value and relevant transaction cost shall be recorded into the initial recognized amount. Except for dividends (excluding those belonging to recovery of investment cost) which shall be recorded into the current profit or loss, other relevant gains and losses (including exchange gains and losses) shall be recorded into other comprehensive income and cannot be transferred into the current profit or loss subsequently. When derecognized, the accumulated gains or losses originally recorded into other comprehensive income shall be transferred out into retained earnings. Equity instrument investments measured at 172 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) fair value through other comprehensive income included: Equity investments to be held in the long term as planned by the Group for strategic purpose, with no control, joint control or significance influence, and with no active market quotation. The Group classifies financial assets not belonging to above two as financial assets at fair value through profit or loss which shall be initially measured at fair value and relevant transaction cost shall be directly recorded into the current profit or loss. Gains or losses arising from these financial assets shall be recorded into the current profit or loss. The contingent consideration recognized by the Group in the business combination not under the same control which constitutes a financial asset shall be classified as the financial asset at fair value through profit or loss. (3) Classification, recognition and measurement of financial liabilities The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value through profit or loss and other financial liabilities. Financial liabilities at fair value through profit or loss include held-for-trading financial liabilities and financial liabilities designated at the initial recognition to be measured by the fair value and their changes are recorded in the current profit or loss. The subsequent measurement shall be at fair value and gains or losses arising from changes in fair value and the dividends and interest expense related to the financial liability shall be the current profit or loss. Other financial liabilities shall be subsequently measured at amortized cost with actual interest rate. The Group classifies financial liabilities except for the following items as financial liabilities at amortized cost: ①Financial liabilities at fair value through profit or loss including held-for-trading financial liabilities (including the derivative instruments belonging to financial liabilities) and designated financial liabilities at fair value through profit or loss. ② Financial liabilities arising from the transfer of financial assets not meeting the derecognition conditions or continuous involvement in the transferred financial assets. ③ Financial guarantee contract not belonging to cases of above ① or ② and loan commitments at interest rate lower than the market rate not belonging to the case in ①. The Group treats the financial liability arising from contingent consideration recognized as the purchase party in the business combination not under the same control at fair value and changes thereof shall be recorded into the current profit or loss. (4) Impairment of Financial Instrument The Group 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 173 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) based on the fair value with its variations included into other comprehensive incomes and the lease outlay receivable, mainly including notes receivable, account receivable, other receivables, investment on creditor’s rights, other investments on creditor’s rights and long-term receivables etc. Besides, in respect of the contract assets and partial financial guarantee contract, corresponding impairment provisions shall be calculated and withdrawn and corresponding credit impairment losses recognized according to various accounting policies mentioned in this part. 1) Methods for the Recognition of Impairment Provisions For all mentioned items above, the Group shall calculate and withdraw corresponding impairment provisions and recognize corresponding credit impairment losses according to applicable expected credit loss measurement methods (general methods or simplified methods) with the expected credit loss as the basis. Credit loss refers to the difference between all receivable contract cash flows and all expected cash flows that are discounted to the present value based on the original actual interest rate -- the present value of all cash shortfall. However, for the purchased or original financial assets subject to the credit impairment, the Group shall realize the discounting based on the actual interest rate subject to the credit adjustment. General methods applied to measure the expected credit loss can be described as: the Group 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 Group shall measure the provision for loss based on the specific expected credit loss amount during the entire period of existence; if not, the Group 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 Group shall take all reasonable and well-founded information into consideration, including the forward-looking information. For the financial instrument of lower credit risk on the balance sheet day, the Group 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 the following 12 months. 2) Standards for Judging Whether the Credit Risk Increases Remarkably after the Initial Recognition If any financial assets’ probability of default within the expected period of existence determined on the balance sheet day is obviously higher than that within the expected period of existence determined during the initial recognition, it shall indicate the remarkable increase of the financial 174 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) assets’ credit risk. Unless it is under special circumstances, the Group 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 Group shall separately evaluate its credit risk, including the receivables from related parties, receivables involved in any dispute with the other party or any lawsuit and arbitration, and receivables with obvious evidence showing that the debtor cannot fulfill the due payment obligation etc. Except for the financial assets whose credit risk shall be separately evaluated, the Group shall divide these financial assets into different combinations based on the specific risk features, on which basis, corresponding credit risks can be evaluated. 4) Accounting Treatment Methods Applied to the Impairment of Financial Assets At the end of the period, the Group shall calculate the expected credit losses of various financial assets. If the expected credit loss is higher than the carrying amount of its current impairment provision, the difference shall be recognized as the impairment loss; if lower, the difference shall be recognized as the gain from the impairment. (5) Recognition and measurement of financial assets transfer The Group derecognizes a financial asset when one of the following conditions is met: ① the rights to receive cash flows from the asset have expired; ② the enterprise has transferred its rights to receive cash flows from the asset to a third party under a pass-through arrangement; or ③ the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. If the overall transfer of financial assets fulfills the requirements for derecognition, the difference between the book value of the transferred financial assets and the sum of the consideration received due to the transfer and the corresponding derecognition part of the accumulated amount of fair value changes originally directly included in other comprehensive income (the contract terms involving the transferred financial assets stipulate that the cash flow generated on a specific date is only the payment of the principal and interest based on the unpaid principal amount) shall be included in the current profits and losses. If the partial transfer of financial assets satisfies the conditions for termination confirmation, the 175 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) entire book value of the transferred financial assets will be apportioned between the termination confirmation portion and the non-termination confirmation portion according to their relative fair values, and the consideration received for the transfer And the amount corresponding to the termination of the recognition of the cumulative amount of changes in fair value originally included in other comprehensive income that should be apportioned to the derecognition part And the payment of interest based on the outstanding principal amount), and the difference between the total book value of the aforesaid financial assets allocated is included in the current profit and loss. (6) The distinction between financial liabilities and equity instruments and related treatment methods The Group distinguishes the financial liabilities and equity instruments according to the following principles: (1) If the Group cannot unconditionally avoid performing a contractual obligation by delivering cash or other financial assets, the contractual obligation meets the definition of financial liabilities. Although some financial instruments do not explicitly include the terms and conditions of the obligation to deliver cash or other financial assets, they may indirectly form contractual obligations through other terms and conditions. (2) If a financial instrument must be settled with or can be settled with the Group's own equity instrument, it is necessary to consider whether the Group's own equity instrument used to settle the instrument is used as a substitute for cash or other financial assets, or to enable the holder of the instrument to enjoy the residual equity in the assets of the issuer after deducting all liabilities. If it belongs to the former condition, the instrument is the financial liability of the issuer; if it belongs to the latter condition, the instrument is the equity instrument of the issuer. In some cases, a financial instrument contract requires the Group to use or use its own equity instrument to settle the financial instrument, in which the amount of contractual rights or contractual obligations is equal to the number of its own equity instruments available or to be delivered multiplied by its fair value at the time of settlement, regardless of whether the amount of contractual rights or obligations is fixed, whether it is entirely or partially based on changes in variables other than the market price of the Group's own equity instruments, the contract shall be classified as a financial liability. In classifying financial instruments (or their components) in the consolidated statement, the Group has taken into account all terms and conditions reached between the Group members and the holders of financial instruments. If the Group as a whole undertakes the obligation to deliver cash, other financial assets or settle accounts in other ways that cause the instrument to become a financial liability due to the instrument, the instrument shall be classified as a financial liability. If financial instruments or their components are financial liabilities, the Group will include interest, dividends (or dividends), gains or losses, and gains or losses arising from redemption or refinancing, etc. in the current profits and losses. 176 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) If financial instruments or their components are equity instruments, when they are issued (including refinancing), repurchased, sold or cancelled, the Group will treat them as changes in equity and will not recognize changes in the fair value of equity instruments. (7) Offsetting financial assets and financial liabilities The Group’s financial assets and liabilities shall be separately presented in the balance sheet and not set off each other. But when meeting the following conditions at the same time, the net amount after offset shall be presented in the balance sheet: (1) The Group has the statutory right to set off recognized amount which is currently executable; (2) The Group plans to settle with the net amount or realize the financial asset and pay off the financial liability simultaneously. 12. Notes Receivable For notes receivable, the Group shall measure the provision for loss based on the specific expected credit loss during the entire period of existence. According to the credit risk characteristics thereof, except those with separate evaluation of credit risk, notes receivable can be divided into different combinations: Item Basis Bank Acceptance The Accepter shall be the bank with high credit level and low risks Trade Acceptance Classified by credit risk of acceptors (the same as accounts receivable) 13. Accounts Receivable For account receivable and contract assets excluding significant financing composition, the Group shall measure the provision for loss according to the specific expected credit loss amount within the entire period of existence. For account receivable, contract assets and lease payment receivable including significant financing composition, the Group shall always measure the provision for loss according to the specific expected credit loss amount within the period of existence. Except the account receivable and contract assets whose credit risks shall be separately evaluated, the Group shall divide them into different combinations based on the specific credit risks: Item Basis This portfolio is accounts receivable with aging as the credit risk Aging Combination feature. 177 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Basis Related party The accounts receivable from the other entities within the consolidation combination scope 14. Accounts Receivable Financing The Group’s accounts receivable financing is based on expected credit losses, and provision is made for depreciation reserves in accordance with the expected credit loss measurement method for notes receivable. 15. Other Receivables The Group measures the loss reserves on other receivables in accordance with the following circumstances: a) For financial assets whose credit risk has not significantly increased since the initial recognition, the Group measures the loss reserves at the amount of expected credit losses for the next 12 months; b) For financial assets whose credit risk has increased significantly since the initial recognition, the Group measures the loss reserves at an amount equal to the expected credit losses for the entire period of the financial instrument; c) For financial assets purchased or originated from credit impairment, the Group measures the loss reserves at an amount equal to the expected credit losses over the entire period of the financial instrument. Except other receivables whose credit risks shall be separately evaluated, the Group shall divide them into different combinations based on the specific credit risk features: Item Basis Aging This portfolio is other receivables with aging as the credit risk feature. Combination This combination shall regard other receivables of extremely low risk (including Low Risk the revolving fund, the cash deposit and the guarantee deposit) as the credit risk Combination feature. Related party Other receivables from the other entities within the consolidation scope combination 16. Long-term Receivables By determining whether the credit risk of long-term account receivables increases remarkably after the initial recognition, the Group shall measure the impairment loss based on the specific 178 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 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 Group shall divide them into different combinations based on the specific credit risk features: Item Basis Financing Lease Regarding the long-term receivables related to the financing lease as the Combination credit risk characteristics 17. Inventories The Group's inventories mainly include raw materials, products in process, semi-finished products, Products on hand,and entrusted processing materials. The perpetual inventory method is used for inventories. Inventories are priced at the actual cost at the time of acquisition; the actual cost of inventories is determined by the weighted average method when inventories are claimed or issued. Low-value consumables and packaging are amortized through the one-off charge-off method. The net realizable value of inventories of goods that are used directly for sale, such as inventory goods, products in process, and materials for sale, is determined by the estimated selling price of the inventory minus estimated sale expenses, and related taxes; the net realizable value of inventories of materials held for production is determined by the estimated selling price of the finished goods produced minus the estimated costs of completion, estimated sale expenses, and related taxes.The inventories with various numbers and low unit price shall be made provisions for depreciation reserves of inventories according to the category of inventories. For inventories that are produced and sold in the same region with same or similar end use or purposes, and hard to be measured separately from other items, it shall be made merger provisions for falling price of inventories. The net realizable value refers, in the ordinary course of business, to the account after deducting the estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of inventories. The net realizable value of inventories shall be fixed on the basis of valid evidence as well as under consideration of purpose of inventories and the effect of events after balance-sheet-date. After withdrawing the depreciation reserves for inventories, if the factors, which cause any write- down of the inventories, have disappeared, causing the net realizable value of inventories is higher than its carrying amount; the amount of write-down shall be reversed from the original amount of depreciation reserve for inventories. The reversed amount shall be included in the profits and 179 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) losses of the current period. 18. Contract Assets (1) Confirmation methods and standards of contract assets Contract assets refer to the right of the Group to receive consideration after transferring goods to customers, and this right depends on factors other than the passage of time. If the Group sells two clearly distinguishable products to customers, it has the right to receive payment because one of the products has been delivered, but the payment is also dependent on the delivery of the other product, the Group has the right to receive payment as a contract assets. (2) Determination method and accounting treatment method of expected credit loss of contract assets The method for determining the expected credit losses of contract assets involves measuring the impairment losses of contract assets by referencing the method used for the impairment loss measurement of receivables as previously described. The Group calculates the expected credit loss of contract assets on the balance sheet date. If the expected credit loss is greater than the book value of the current contract asset impairment provision, the Group will recognize the difference as an impairment loss and debit the "asset impairment loss". Credited "Contract asset impairment provision". On the contrary, the Group recognizes the difference as an impairment gain and keeps the opposite accounting records. If the Group actually incurs credit losses and determines that the relevant contract assets cannot be recovered, and the written-off is approved, the "contract asset impairment reserve" is debited and the "contracted asset" is credited based on the approved write-off amount. If the written-off amount is greater than the provision for loss that has been withdrawn, the "asset impairment loss" is debited based on the difference. 19. Assets Relating to Contract Costs (1) The method of determining the amount of assets related to contract costs The Group’s assets related to contract costs include contract performance costs and contract acquisition costs. The contract performance cost, that is, the cost incurred by the Group for the performance of the contract, does not fall within the scope of other accounting standards and meets the following conditions at the same time, as the contract performance cost is recognized as an asset: the cost and a current or expected contract Directly related, including direct labor, direct materials, manufacturing expenses, clearly the cost borne by the customer, and other costs incurred only due 180 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) to the contract; this cost increases the Group's future resources for fulfilling its performance obligations; This cost is expected to be recovered. The contract acquisition cost, that is, the incremental cost incurred by the Group to obtain the contract is expected to be recovered, and is recognized as an asset as the contract acquisition cost; if the asset amortization period does not exceed one year, it is included in the current profit and loss when it occurs. Incremental cost refers to the cost (such as sales commission, etc.) that the Group will not incur without obtaining the contract. The Group's expenses incurred in obtaining the contract, other than the expected incremental cost that can be recovered (such as travel expenses incurred regardless of whether the contract is obtained, etc.), are included in the current profit and loss when they are incurred, but it is clearly borne by the customer except. (2) Amortization of assets related to contract costs The Group’s assets related to contract costs are amortized on the same basis as the commodity revenue recognition related to the asset and included in the current profit and loss. (3) Impairment of assets related to contract costs When the Group determines the impairment loss of assets related to contract costs, it first determines the impairment loss of other assets related to the contract that are confirmed in accordance with other relevant business accounting standards; then, based on their book value higher than the Group’s transfer and If the difference between the remaining consideration that the asset-related commodity is expected to obtain and the estimated cost incurred for the transfer of the relevant commodity, the excess shall be provided for impairment and recognized as an asset impairment loss. If the depreciation factors of the previous period have changed, and the aforementioned difference is higher than the book value of the asset, the original provision for asset impairment shall be reversed and included in the current profit and loss, but the book value of the asset after the reversal shall not exceed Assuming no provision for impairment is made, the book value of the asset on the date of reversal. 20. Long-term Equity Investments The Group's long-term equity investments mainly consist of investments in subsidiaries, associated enterprises, and joint ventures. The Group’s judgment on joint control is based on the fact that all participants or a combination of participants collectively control the arrangement and that the policies of the activities related to the arrangement shall be unanimously agreed by those participants who. The Group is generally considered to have a significant influence on the investee when it owns, 181 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) directly or indirectly through a subsidiary, above 20% but below 50% of the voting rights of the investee. If the Group holds less than 20% of the voting rights of the investee, it also needs to judge whether the Group has a significant influence on the investee by taking into account the facts and circumstances such as having representatives on the board of directors or similar authority of the investee, or participating in the process of formulating financial and operating policies of the investee, or having major transactions with the investee, or sending management personnel to the investee, or providing key technical information to the investee. If control over the investee is formed, it is a subsidiary of the Group. For long-term equity investment acquired through business combination under the same control, the initial investment cost of the long-term equity investments is recorded at the merger date based on the acquisition of the merged party's share of the book value of the net assets of the ultimate controller in the consolidated financial statement. If the book value of the net assets of the merged party on the merger date is negative, the cost of long-term equity investments is determined as zero. If the equity of the investee under the same control is acquired in stages through multiple transactions to eventually result in a business combination, additional disclosures of the treatment of long-term equity investments in the parent Group's financial statements shall be made in the Reporting Period in which control is obtained. For example, if the business combination that is ultimately formed through multiple transactions to acquire the equity of the investee under the same control belongs to a package deal, the Group shall conduct accounting treatment to treat each transaction as a single transaction to acquire control. If the transaction is not a package deal, the initial investment cost of the long-term equity investment is based on the share of the book value of the net assets of the merged party in the consolidated financial statements of the ultimate controller at the merger date. The difference between the initial investment cost and the sum of the book value of the long-term equity investment before the merger plus the book value of the new consideration paid for further acquisition of shares at the merger date shall offset against capital reserve; and where capital reserve is insufficient to be offset, the retained earnings shall be adjusted. For long-term equity investment acquired through business combination not under the same control, the initial investment cost shall be the consolidation cost. If the equity of the investee not under the same control is acquired in stages through multiple transactions to eventually result in a business combination, additional disclosures of the cost treatment of long-term equity investments in the parent Group's financial statements shall be made in the Reporting Period in which control is obtained. For example, if the business combination that is ultimately formed through multiple transactions to acquire the equity of the investee not under the same control belongs to a package deal, the Group shall conduct accounting treatment to treat 182 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) each transaction as a single transaction to acquire control. If the transaction is not a package deal, the sum of the book value of the equity investment originally held plus the cost of the new investment shall be the initial investment cost calculated in accordance with the cost method. If the equity held prior to the purchase date is accounted by the equity method, the relevant other comprehensive income accounted by the original equity method shall not be adjusted. The same basis of accounting as that used for the direct disposal of the related assets or liabilities by the investee is used for the disposal of the investment. If the equity held prior to the purchase date is a financial asset designated to be measured at fair value with fluctuations included in other comprehensive income, the cumulative profit or loss on the equity previously recognized in other comprehensive income shall be transferred from other comprehensive income to the retained earnings; if the equity is a financial asset measured at fair value and the changes of which are included in profits and losses of the current period, the equity previously recognized as profits and losses from the changes in fair value shall not be transferred to investment income. If the equity held prior to the purchase date is an investment for other equity instruments, the changes in fair value of the equity investment accumulated in other comprehensive income before the purchase date shall be transferred to the retained earnings. Except for the long-term equity investments acquired through business combination hereinabove, long-term equity investments acquired by paying cash are recorded as investment cost based on the actual purchase price paid; long-term equity investments acquired by issuing equity securities are recorded as investment cost based on the fair value of the equity securities issued; long-term equity investments invested by investors are recorded as investment cost based on the value agreed in the investment contract or agreement. The Group calculates its investments in subsidiaries through the cost method and its investments in joint ventures and associate enterprises through the equity method. For long-term equity investments calculated by the cost method for subsequent measurement, the book value of the cost of long-term equity investments shall be increased by the fair value of the cost amount paid for the additional investment and relevant transaction costs incurred when the additional investment is made. Cash dividends or profits declared by the investee are recognized as investment income for the current period in accordance with the due amount. In addition to the above-mentioned long-term equity investment obtained through business combination, the long-term equity investment obtained by paying cash shall be regarded as the investment cost according to the purchase price actually paid; the long-term equity investment obtained by issuing equity securities shall be regarded as the investment cost according to the fair value of issuing equity securities; the long-term equity investment invested by investors shall be regarded as the investment cost according to the investment contract or agreement The value of 183 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) the Group is regarded as the cost of investment. The Group adopts the cost method for investment in subsidiaries and the equity method for investment in joint ventures and associated enterprises. For the long-term equity investment whose subsequent measurement adopts the cost method, when the additional investment is made, the book value of the long-term equity investment cost is increased according to the fair value of the cost amount paid by the additional investment and the relevant transaction expenses. The cash dividends or profits declared to be distributed by the investee shall be recognized as the current investment income according to the amount that should be enjoyed. For the long-term equity investment with equity method for subsequent measurement, the book value of the long-term equity investment will increase or decrease with the change of the owner's equity of the invested entity. When confirming the share of the net profit and loss of the investee, the net profit and loss of the investee shall be calculated based on the fair value of the identifiable assets of the investee at the time of obtaining the investment, in accordance with the accounting policies and accounting period of the Group, and offset the internal transaction profit and loss between the joint venture and the joint venture according to the shareholding ratio Profit is recognized after adjustment. For disposal of long-term equity investment, the difference between the book value and the actual price shall be included in the current investment income. For long-term equity investment accounted by equity method, other comprehensive income accounted by the original equity method shall be accounted on the same basis as the investee's direct disposal of relevant assets or liabilities when the equity method is terminated, and the owner's equity shall be recognized due to other changes in owner's equity of the investee except net profit and loss, other comprehensive income and profit distribution When the equity method is terminated, all of them shall be transferred into the current investment income. In case of loss of joint control or significant influence on the investee due to the disposal of part of equity investment, the remaining equity after disposal shall be accounted according to the relevant provisions of the recognition and measurement standards of financial instruments, and the difference between the fair value and the book value of the remaining equity on the date of loss of joint control or significant influence shall be included in the current profits and losses. When the equity method is terminated, the other comprehensive income of the original equity investment recognized as a result of its accounting with the equity method shall be handled on the same basis as the investee's direct disposal of the relevant assets or liabilities and carried forward in proportion. The owner's equity recognized as a result of the changes in the owner's equity of the 184 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) investee other than net profit and loss, other comprehensive income and profit distribution shall be carried forward in proportion Transfer to current investment income. If the control over the investee is lost due to the disposal of part of the long-term equity investment, and the residual equity after disposal can jointly control or exert significant influence on the investee, it shall be accounted according to the equity method, and the difference between the book value of the disposal equity and the disposal consideration shall be included in the investment income, and the residual equity shall be regarded as adjusted by the equity method when it is obtained If the residual equity cannot exercise joint control or exert significant influence on the investee, the accounting treatment shall be carried out according to the relevant provisions of the recognition and measurement standards of financial instruments. The difference between the book value of the disposal equity and the disposal consideration shall be included in the investment income, and the difference between the fair value and the book value of the residual equity on the day of losing control shall be included in the current profits and losses. If the transaction from step-by-step disposal of equity to loss of control right does not belong to package transaction, accounting treatment shall be carried out for each transaction separately. If it is a "package deal", each transaction will be treated as a transaction of disposal of subsidiaries and loss of control. However, before the loss of control, the difference between the disposal price of each transaction and the book value of the long-term equity investment corresponding to the disposed equity will be recognized as other comprehensive income, and when the control is lost, it will be transferred to the current account of loss of control Period profit and loss. 21. Investment Property The term “investment property” refers to the real estate held for generating rent and/or capital appreciation. Investment property of the Group include the right to use any land which has already been rented; the right to use any land which is held and prepared for transfer after appreciation; and the right to use any building which has already been rented. In addition, if the board of directors (or similar organizations) makes a written resolution to use the vacant buildings held by the Group for operating lease and the holding intention will not change in a short time, they will also be listed as investment real estate. 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 Group and the cost can be reliably measured, otherwise the expenditure is recognized in profit or loss in the period in which they are incurred. The Group shall make a follow-up measurement to the investment property by employing the cost 185 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) pattern on the date of the balance sheet. An accrual depreciation or amortization shall be made for the investment property in the light of the accounting policies of the use right of buildings or lands. For details of impairment test method and withdrawal method of impairment provision of investment property, please refer to Note IV. 27. “Long-term assets impairment”. The Group's investment real estate adopts the average life method for depreciation or amortization. The expected service life, net residual value rate and annual depreciation (amortization) rate of all kinds of investment real estate shall refer to the depreciation policy of buildings in fixed assets and the amortization policy of land use right in intangible assets. When owner-occupied real estate or inventories are changed into investment property or investment property is changed into owner-occupied real estate, of which book value prior to the change shall be the entry value after the change. When an investment property is changed to an owner-occupied real estate, it would be transferred to fixed assets or intangible assets at the date of such change. When an owner-occupied real estate is changed to be held to earn rental or for capital appreciation, the fixed asset or intangible asset is transferred to investment property at the date of such change. If the fixed asset or intangible asset is changed into investment property measured by adopting the cost pattern, whose book value prior to the change shall be the entry value after the change; if the fixed asset or intangible asset is changed into investment property measured by adopting the fair value pattern, whose fair value on the date of such change shall be the entry value after the change. An investment property is derecognized on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. The amount of proceeds on sale, transfer, retirement or damage of an investment property less its carrying amount and related taxes and expenses is recognized in profit or loss in the period in which it is incurred. 22. Fixed Assets The Group’s fixed assets are tangible assets held for the production of goods, provision of services, rental or operation management and have a useful life of more than one year. Fixed assets should be recognized when it is probable that the economic benefits associated with them will be incorporated into the Group and their cost can be measured reliably. The Group’s fixed assets include buildings and constructions, machinery and equipment, electronic equipment, transportation equipment, and other equipment. The Group depreciates all fixed assets by straight-line method, except for fully depreciated fixed assets that continue to be used and land that is separately valued. The categorized depreciable lives, 186 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) estimated net salvage rates and depreciation rates of the Group’s fixed assets are as follows: Annual Depreciation Expected net No. Category Method deprecation period (year) salvage value (%) (%) Housing and Straight-line 20-40 5-10.00 2.25-4.75 1 building depreciation Machinery Straight-line 5-10 5-10.00 9.00-19.00 2 equipment depreciation Electronic Straight-line 3-5 5-10.00 18.00-31.67 3 equipment depreciation Transportation Straight-line 3-5 5-10.00 18.00-31.67 4 vehicle depreciation Straight-line Other equipment 5 5-10.00 18.00-19.00 5 depreciation The estimated useful life, estimated net salvage value and depreciation method of fixed assets are reviewed at the end of each year. Accounting estimation methods are used when changes are required. 23. Construction in Progress The cost of construction in progress is determined based on actual project expenditures, including all necessary project expenditures incurred during construction, borrowing costs to be capitalized before the project reaches its predetermined usable state, and other related expenses, etc. On the date when the construction in progress reaches its intended useable state, fixed assets are carried forward at the estimated value based on the project budget, cost or actual cost of the project, etc. Depreciation starts from the following month, and the difference in the original value of fixed assets is adjusted after the completion of the final accounting procedures. Construction in progress is transferred to fixed assets upon reaching the predetermined usable state, with the criteria as follows: Item Criteria for carrying forward fixed assets 187 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Criteria for carrying forward fixed assets The main construction project and ancillary projects are substantially completed, meeting the predetermined design requirements. Upon joint acceptance by the Company’s Engineering Department and units responsible for surveying, design, construction, supervision, Houses and buildings etc., and government departments such as the Fire Services Department and the Housing Authority, and reaching the predetermined usable state following process approval, it is transferred to fixed assets. The equipment management department and the equipment manufacturer are jointly responsible for the installation and commissioning of the equipment, including hardware debugging, machinery and equipment process conditions debugging, etc. Upon completion of debugging and reaching the predetermined usable state following process approval, it is transferred to fixed assets. 24. Borrowing Costs The Group capitalizes borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets as part of the cost of those assets. Other borrowing costs are recognized as expenses in the current period. The assets determined by the Group that meet the conditions for capitalization include: fixed assets, investment real estate and inventory that need more than one year of purchasing, construction or production activities to reach the preset usable or sellable status, shall be capitalized when the asset expenditure has occurred, the borrowing costs have occurred, and the purchasing, construction or production activities necessary for the asset to reach the preset usable or sellable status have begun; When the acquisition, construction or production of assets that meet the capitalization conditions reach the intended usable or sellable status, capitalization is stopped, and the borrowing costs incurred thereafter are included in the profits and losses of the current period. If there is an abnormal interruption in the acquisition, construction or production of assets that meet the capitalization conditions and the interruption lasts for more than 3 consecutive months, the capitalization of borrowing costs will be suspended until the acquisition, construction or production of assets starts again. During the capitalization period, the Group recognizes the amount of borrowing costs capitalized in each accounting period using the following method: In the case of borrowing special-purpose borrowings, the amount of interest expense actually incurred in the current period, less interest 188 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) income earned on the unused borrowed funds deposited in the bank or investment income earned on temporary investments, shall be capitalized; in the case of occupying general borrowings, the amount shall be determined on the basis of the weighted average number of asset expenditures for the portion of accumulated asset expenditures in excess of the special-purpose borrowings multiplied by the capitalization rate of the general borrowings occupied, where the capitalization rate is calculated and determined on the basis of the weighted average interest rate of the general The capitalization rate is based on the weighted average interest rate of general borrowings. 25. Right-of-Use Assets The right-of-use assets refer to the right of the Group as the lessee to use the leased assets during the lease term. (1) Initial measurement After the commencement date of the lease term, the Group uses the cost for initial measurement of right-of-use assets. The cost includes the following four items: a) The initial measurement amount of lease liabilities; b) If there is a lease incentive for the lease payment paid on or before the commencement date of the lease term, the relevant amount of the lease incentive already enjoyed shall be deducted; c) The initial direct expenses incurred are the incremental costs incurred in reaching the lease; d) The costs expected to be incurred for dismantling and removing the leased assets, restoring the site where the leased assets are located or restoring the leased assets to the state agreed in the lease terms, except those incurred for the production of inventories. (2) Follow-up measurement After the commencement date of the lease term, the Group adopts the cost model to carry out follow-up measurement of the right-of-use assets, that is, the right-of-use assets are measured at cost less accumulated depreciation and accumulated impairment losses. If the Group re-measures the lease liabilities according to the relevant provisions of the lease standards, the book value of the right-of-use assets shall be adjusted accordingly. (3)Depreciation of right-of-use assets From the commencement date of the lease term, the Group has accrued depreciation on the right- of-use assets. Right-of-use assets are usually depreciated from the month when the lease term begins. The accrued depreciation amount is included in the cost of related assets or current profits and losses according to the use of the right-of-use assets. When determining the depreciation method of the right-of-use assets, the Group makes a decision based on the expected consumption mode of the economic benefits related to the right-of-use assets, and accrues depreciation for the right-of-use assets on the straight-line method. When determining the depreciation period of the right-of-use assets, the Group follows the following principles: If the ownership of the leased assets can be reasonably determined when the lease term expires, depreciation shall be accrued within the remaining service life of the leased assets; if it cannot be reasonably determined that the ownership of the leased asset can be obtained when the lease term expires, depreciation shall be accrued within the shorter of the lease term and 189 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) the remaining service life of the leased asset. (4)Impairment of right-of-use assets If the right-of-use assets are impaired, the Group carries out subsequent depreciation according to the book value of the right-of-use assets after deducting the impairment loss. 26. Intangible Assets The Group’s intangible assets include land use rights, patented technology and non-proprietary technology, which are measured at actual cost at the time of acquisition. Acquired intangible assets are stated at actual cost based on the actual price paid and related other expenses. The actual cost of intangible assets invested by investors is determined at the value agreed in the investment contract or agreement, but if the agreed value in the contract or agreement is not fair, the actual cost is determined at fair value. Intangible assets, such as patents, acquired in a merger not under common control but owned by the acquiree but not recognized in its financial statements, are recognized as intangible assets at fair value at the time of initial recognition of the acquiree’s assets. (1) Useful life and its determination basis, estimation, amortization method, or review procedure The Group's intangible assets include land use rights, patented technology, non-patented technology, etc., measured at the actual cost at the time of acquisition. For purchased intangible assets, the actual cost is determined by the actual payment made and related expenditures. For intangible assets contributed by investors, the actual cost is determined based on the value agreed upon in the investment contract or agreement; however, if the contractually agreed value is not fair, the fair value is used to determine the actual cost. Intangible assets such as patents, which are acquired in a business combination under common control but not recognized in the financial statements of the acquiree, are recognized as intangible assets at their fair value upon initial recognition of the assets of the acquiree. (2) Scope of R&D expenditures and related accounting treatment The scope of the Group's R&D expenditures includes salaries of R&D personnel, direct input costs, depreciation and amortization, design fees, equipment testing fees, fees for R&D outsourced to external parties, and other expenses. The Group classifies its internal research and development project expenditures into expenditure on the research phase and expenditure on the development phase, based on the nature of the expenditures and the degree of uncertainty in whether the R&D activities will result in an intangible asset. Expenditure on the research phase are recognized in profit or loss when incurred. Expenditure on the development phase are capitalized when all of the following conditions are met: a) The Group has assessed the technical feasibility of completing the intangible asset so that it will be available for use or sale. b) The Group intends to complete the intangible asset and use or sell it. c) It is probable that the intangible asset will generate future economic benefits. 190 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) d) The Group has the adequate technical, financial, and other resources to complete the development and to use or sell the intangible asset. e) The expenditure attributable to the development phase of the intangible asset can be measured reliably. Development phase expenditures not meeting these capitalization criteria are recognized in profit or loss for the current period when incurred. 27. Impairment of Long-term Assets For non-current non-financial Assets of fixed assets, projects under construction, intangible assets with limited service life, investing real estate with cost model, long-term equity investment of subsidiaries, cooperative enterprises and joint ventures, the Group should judge whether decrease in value exists on the date of balance sheet. Recoverable amounts should be tested for decrease in value if it exists. Goodwill, intangible assets with uncertain service life and other non-accessible intangible assets should be tested for impairment at the end of each year, regardless of whether there is any indication of impairment. (1) Impairment of non-current assets other than financial assets (except goodwill) If the recoverable amount is less than carrying value in impairment test results, the provision for impairment of differences should include in impairment loss. Recoverable amounts would be the higher of net value of asset fair value deducting disposal charges or present value of predicted cash flow. Asset fair value should be determined according to negotiated sales price of fair trade. If no sales agreement exists but with asset active market, fair value should be determined according to the Buyer’s price of the asset. If no sales agreement or asset active market exists, asset fair value could be acquired on the basis of best information available. Disposal expenses include legal fees, taxes, cartage or other direct expenses of merchantable Assets related to asset disposal. Present value of predicted asset cash flow should be determined by the proper discount rate according to Assets in service and predicted cash flow of final disposal. Asset depreciation reserves should be calculated on the basis of single Assets. If it is difficult to predict the recoverable amounts for single Assets, recoverable amounts should be determined according to the belonging asset group. Asset group is the minimum asset combination producing cash flow independently. (2) Impairment of goodwill 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 191 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) reputation of asset group or asset group combination, then deduct carrying value of all assets according to proportions of other carrying value of above assets in asset group or asset group combination except business reputation. The methodology, parameters and assumptions for the goodwill impairment test are described in Note VI-21. After the asset impairment loss is determined, recoverable value amounts would not be returned in future. 28. Long-term Deferred Expenses The Long-term deferred expenses of the Group including renovation cost, mold cost and so on shall be amortized evenly during the benefit period. If these long-term deferred expenses cannot benefit the future accounting period, the amortized value of this item that has not been amortized shall be transferred to the current profit and loss. 29. Contract Liabilities Liabilities of contracts refer to the Group's obligation to transfer goods to customers due to the consideration received or receivable from customers. Before the transfers, if the customer has paid the consideration or if the Group has obtained the right to unconditionally collect the contract consideration, the liabilities of contracts shall be recognized based on the amount received or receivable at the earlier point between the actual payment by the customer and the payment due. 30. Employee Compensation Salaries of staff of the Group include short-term salary, post-employment benefits, termination compensation, and other long-term benefits. Short-term salary mainly includes wages, bonuses, allowances and subsidies, as well as employee benefits, medical insurance, maternity insurance, employment injury insurance, housing provident fund, labor union expenses, and staff education expenses, and non-monetary benefits. During the accounting period when the employees provide services, the actual short-term compensation is recognised as a liability that shall be included in the current profit and loss or the cost of related assets according to the beneficiary. The post-employment benefits mainly include the basic endowment insurance, etc. They are divided into defined contribution plans and defined benefit plans in accordance with the risks and obligations undertaken by the Group. According to the defined contribution plan, the deposit paid to a separate entity in exchange for the services provided by the employees during the accounting period on the balance sheet date is recognized as liabilities, and shall be included in the current 192 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) profit and loss or the cost of related assets according to the beneficiary. If the Group has a defined benefit plan, the specific accounting method should be explained. When terminating labour relations before expiration of contract, or layoffs with compensations, and the Group cannot terminate the labour relations unilaterally or reduce the demission welfare, remuneration and liabilities produced from the demission welfare should be determined and included in current profits and losses when determining the costs of demission welfare and recombination. However, demission welfare not fully paid within 12 months after annual Reporting Period should be handled the same as other long-term employees’ payrolls. The inside employee retirement plan is treated by adopting the same principle with the above dismiss ion welfare. The Group would recorded the salary and the social security insurance fees paid and so on from the employee’s service termination date to normal retirement date into current profits and losses (dismission welfare) under the condition that they meet the recognition conditions of estimated liabilities. The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan, should be accounting disposed according to the setting drawing plan, while the rest should be disposed according to the setting revenue plan. 31. Lease Liabilities (1) Initial measurement The Group initially measures the lease obligation at the present value of the lease payments outstanding at the commencement date of the lease term. 1) Lease payments Lease payments refer to the amount paid by the Group to the lessor related to the right to use the leased assets during the lease term, including: a) Fixed payment amount and substantial fixed payment amount. If there is lease incentive, deduct the amount related to lease incentive; b) The variable lease payment amount depending on the index or ratio, which is determined according to the index or ratio on the commencement date of the lease term at the initial measurement; c) When the Group reasonably determines the exercise price of the purchase option when it will exercise it; d) The lease term reflects the amount to be paid to exercise the termination option when the Group will exercise the termination option; e) The amount expected to be paid based on the residual value of the guarantee provided by the Group. 2) Rate of discount When calculating the present value of the lease payments, the Group uses the interest rate implicit in lease as the rate of discount, which is the interest rate at which the sum of the present value of the lessor's lease receipts and the present value of the unsecured residual value equals the sum of the fair value of the leased asset and the lessor's initial direct expenses. If the Group fails to determine the interest rate implicit in lease, the incremental interest rate on borrowing will be used 193 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) as the rate of discount. The incremental interest rate on borrowing shall mean the interest rate payable by the Group to borrow funds under similar mortgage conditions during similar periods to acquire assets close to the value of the right-of-use assets under similar economic circumstances. The interest rate is related to the following matters: a) The Group's own situation, that is, the Company's solvency and credit status; b) The term of "loan", that is, the lease term; c) The amount of "borrowed" funds, that is, the amount of lease liabilities; d) "Mortgage conditions", that is, the nature and quality of the underlying assets; e) Economic environment, including the jurisdiction where the lessee is located, the valuation currency, the time when the contract is signed, etc. The incremental borrowing rate is based on the Group's latest asset-based lending interest rate for similar assets and adjusted to take into account the above factors. (2) Follow-up measurement After the commencement date of the lease term, the Group carries out follow-up measurement of lease liabilities according to the following principles: a) When recognizing the interest of lease liabilities, the Group will increase the carrying amount of lease liabilities; b) When paying the lease payments, the Group will reduce the book amount of the lease liability; c) When the lease payments changes due to revaluation or lease change, the Group will remeasure the book value of lease liability. The Group calculates the interest expenses of the lease obligations during each period of the lease term at a fixed periodic interest rate, and includes them (except those that shall be capitalized) in profit or loss for the current period. Periodic rate refers to the rate of discount adopted by the Group when initially measuring lease liabilities, or the revised rate of discount adopted by the Group when lease liabilities need to be remeasured according to the revised rate of discount due to changes in lease payments or lease changes. (3) Re-measurement After the commencement date of the lease term, the Group re-measures the lease liability based on the present value of the changed lease payment and adjusts the book value of the right-of-use assets accordingly when the following circumstances occur. If the carrying value of the right-of- use assets has been reduced to zero, but the lease obligations still need to be further reduced, the Group will include the remaining amount in profit or loss for the current period. a) The actual fixed payment amount changes (in this case, the original rate of discount is used for discount); b) The estimated amount payable of the residual value changes (in this case, the original rate of discount is used for discount); c) The index or ratio used to determine the lease payment changes (in this case, the revised rate of discount is used for discount); d) The evaluation result of the purchase option changes (in this case, the revised rate of discount is adopted for discount); e) The evaluation result or actual exercise of the lease renewal option or the lease termination option changes (in this case, the revised rate of discount is adopted for discount). 32. Provisions The Group should recognize the related obligation as a provision for liability when the obligation meets the following conditions: (1) That obligation is a present obligation of the enterprise; (2) It is probable that an outflow of economic benefits from the enterprise will be required to settle the 194 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) obligation; (3) A reliable estimate can be made of the amount of the obligation. The projected liabilities are initially measured in accordance with the optimal estimate of the necessary expenses for the fulfillment of the current obligation, with the risks related to contingent matters, uncertainty, the time value of money, and other factors taken into consideration. The Group reviews the current best estimate of the provisions for contingent liabilities at the balance sheet date and adjusts the carrying amount of the provision as necessary. When all or some of the expenses necessary for the liquidation of an provisions of an enterprise is expected to be compensated by a third party, the compensation should be separately recognized as an asset only when it is virtually certain that the reimbursement will be obtained. Besides, the amount recognized for the reimbursement should not exceed the carrying value of the estimated liabilities. 33. Principles of Revenue Recognition and Measurement Method The revenue of the Group mainly consists of the income from main business and the income from other businesses. (1)Revenue recognition principle The Group has fulfilled the performance obligations in the contract, that is, when the customer obtains control of the relevant goods or services, revenue is recognized. Obtaining control over related goods or services means being able to lead the use of the goods or the provision of such services and obtain almost all of the economic benefits from it. On the starting date of the contract, the Group evaluates the contract, identifies each individual performance obligation contained in the contract, and determines whether each individual performance obligation is performed within a certain period of time or at a certain point in time. When one of the following conditions is met, it is a performance obligation within a certain period of time, otherwise, it is a performance obligation at a certain point in time: ①The customer obtains and consumes the economic benefits brought by the Group's performance at the same time the Group performs the contract. ②The customer can control the products under construction during the performance of the Group. ③ The goods produced during the performance of the Group have irreplaceable uses, and the Group has the right to collect payments for the cumulative performance of the contract during the entire contract period. For performance obligations performed within a certain period of time, the Group recognizes revenue according to the performance progress during that period. When the performance progress cannot be reasonably determined, if the cost incurred by the Group is expected to be compensated, 195 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) the revenue shall be recognized according to the amount of the cost incurred until the performance progress can be reasonably determined. For performance obligations performed at a certain point in time, the Group recognizes revenue at the point when the customer obtains control of the relevant goods or services. When judging whether a customer has obtained control of goods or services, the Group considers the following signs: ①The Group enjoys the current right to receive payment for the goods or services. ②The Group has transferred the legal ownership of the product to the customer. ③The Group has transferred the goods in kind to the customer. ④ The Group has transferred the main risks and rewards of the ownership of the product to the customer. ⑤The customer has accepted the goods or services. The Group has transferred goods or services to customers and the right to receive consideration is listed as contract assets, and contract assets are devalued on the basis of expected credit losses. The Group's unconditional right to collect consideration from customers is listed as receivables. The Group’s obligation to transfer goods or services to customers due to the consideration received from customers is listed as contract liabilities. (2) Principles of income measurement ① If the contract contains two or more performance obligations, at the beginning of the contract, the Group will allocate the transaction price to each individual performance obligation based on the relative proportion of the stand-alone selling price of the goods or services promised by each individual performance obligation. Revenue is measured at the transaction price of each individual performance obligation. ② The transaction price is the amount of consideration that the Group expects to be entitled to receive due to the transfer of goods or services to customers, excluding payments collected on behalf of third parties and payments expected to be returned to customers. The transaction price confirmed by the Group does not exceed the amount at which the accumulated confirmed income will most likely not undergo a significant reversal when the relevant uncertainty is eliminated. It is expected that the money returned to the customer will not be included in the transaction price as a liability. ③If there is variable consideration in the contract, such as cash discounts and price guarantees in part of the contract between the Group and its customers, the Group determines the best estimate 196 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) of the variable consideration according to the expected value or the most likely amount, but includes the variable The transaction price of the consideration shall not exceed the amount at which the accumulated confirmed income is unlikely to be reversed significantly when the relevant uncertainty is eliminated. ④ For the consideration payable to customers, the Group offsets the transaction price from the consideration payable to customers, and offsets the current income at the time when the relevant income is recognized and the payment (or promised to pay) the customer consideration is later, unless the consideration payable is for Obtain other clearly distinguishable products from customers. ⑤For sales with a sales return clause, when the customer obtains control of the relevant product, the Group recognizes revenue based on the amount of consideration expected to be received due to the transfer of the product to the customer, and the expected return due to the sales return is recognized as an estimated liability; At the same time, according to the expected book value of the returned goods at the time of transfer, the balance after deducting the estimated cost of recovering the goods (including the value impairment of the returned goods) is recognized as an asset, that is, the return cost receivable, according to the transferred goods The book value at the time of the transfer, deducting the net carry-over cost of the aforementioned asset cost. On each balance sheet date, the Group re-estimates the future sales returns and re-measures the aforementioned assets and liabilities. ⑥ If there is a significant financing component in the contract, the Group shall determine the transaction price based on the amount payable in cash when the customer assumes control of the goods or services. Using the discount rate that discounts the nominal amount of the contract consideration into the current commodity price, the difference between the determined transaction price and the amount of the consideration promised in the contract is amortized by the actual interest method during the contract period. On the starting date of the contract, the Group expects that the time between the customer's acquisition of control of the goods or services and the customer's payment of the price will not exceed one year, regardless of the significant financing components in the contract. ⑦ According to contractual agreements, legal provisions, etc., the Group provides quality assurance for the products sold and the assets built. For guarantee-type quality assurance to assure customers that the goods sold meet the established standards, the Group conducts accounting treatment in accordance with "contingent events-estimated liabilities". For the service quality assurance that provides a separate service in order to assure customers that the goods sold meet the established standards, the Group regards it as a single performance obligation, based on the stand- alone selling price of the quality assurance of goods and services. In a relative proportion, part of 197 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) the transaction price is allocated to service quality assurance, and revenue is recognized when the customer obtains control of the service. When assessing whether the quality assurance provides a separate service in addition to ensuring that the products sold meet the established standards, the Group considers whether the quality assurance is a legal requirement, the quality assurance period, and the nature of the Group's commitment to perform the tasks. ⑧ When the construction contract between the Group and the customer is changed: ① If the contract change adds clearly distinguishable construction services and contract prices, and the new contract price reflects the stand-alone selling price of the new construction services, the Group will The contract change shall be treated as a separate contract for accounting treatment; ②If the contract change does not fall into the above-mentioned circumstance ①, and there is a clear distinction between the construction services that have been transferred and the construction services that have not been transferred on the date of the contract change, the Group Treat it as the termination of the original contract, and at the same time, merge the unfulfilled part of the original contract and the changed part of the contract into a new contract for accounting treatment; ③If the contract change does not fall into the above situation ①, and the construction service has been transferred on the date of contract change There is no clear distinction between the construction service and the untransferred construction service. The Group accounts for the changed part of the contract as a component of the original contract. The resulting impact on the recognized revenue will be adjusted on the date of contract change. (3) Specific methods of revenue recognition ① Revenue recognized on time The Group's sales of household appliances, electronic components, etc., belong to the performance obligation performed at a certain point in time. Recognition conditions for income from domestic sales of goods and overseas direct sales of goods: The Group has delivered the product to the customer in accordance with the contract and the customer has received the product, the payment has been recovered or the receipt of payment has been obtained, and the relevant economic benefits are likely to flow in. The main risks and rewards have been transferred, and the legal ownership of the goods has been transferred. Conditions for confirming the income of exported goods: The Group has declared the products for export according to the contract, obtained the bill of lading, and delivered the goods to the carrier entrusted by the purchaser. The payment has been recovered or the receipt of payment has been obtained and relevant economic benefits are likely to flow in. The main risks and rewards of commodity ownership have been transferred, and the legal ownership of commodities has been transferred. 198 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) ②Income confirmed according to the performance progress The Group's business contracts with customers for project construction, online advertising, operating leases, etc. are performance obligations performed within a certain period of time, and revenue is recognized according to the progress of the performance. 34. Government Grants The government grants of the Group are divided into asset-based grants related to and income- based grants. Asset-based grants refer to the government grants for long-term assets obtained by the purchase, construction, and other ways. Income-based grants refer to other grants. If the beneficiaries are not specified in government documents, the Group will make the distinction according to the aforesaid principle. Beneficiaries which are difficult to categorize shall be classified as an income-based government grant as a whole. Current elements of government grants shall be measured based on the amount actually received. Those shall be measured according to the amount receivable are grants paid according to a fixed quota standard, or funds that meet the relevant conditions stipulated by the financial support policy with conclusive evidence at the end of the year and which are expected as the financial support. Non-monetary elements of the government grants shall be measured at fair value. Those whose fair value cannot be obtained reliably shall be measured at its nominal amount (RMB1). Asset-based grants shall be used to offset the carrying value of related assets or presented as deferred income, and shall, over the life of the related asset, be included in the current profits and losses by the equal amortization method. If the related asset is sold, transferred, scrapped, or damaged before the end of its useful life, its deferred income that has not been distributed shall be transferred to the current profit and loss of asset disposal. Income-based grants that are used to compensate related costs or losses in subsequent periods shall be deemed as deferred income and shall be included in the current profits and losses during the period when the related costs or losses are recognized. Government grants related to routine activities shall be included in other income in accordance with the nature of the transaction. Government grants not related to routine activities shall be included in non-operating income and expenditure. The Group obtains interest grants on policy-related concessional loans in two different ways: the interest subsidy funds are allocated by the government either to the lending bank or directly to the Group. The respective accounting treatment is carried out as follows: 199 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) (1) Where the government allocates the funds to the lending bank, and the bank provides a loan to the Group at a policy-related preferential interest rate, the actual amount of the loan received is taken as the entry value, and the borrowing costs are calculated based on the loan principal and the policy-related preferential interest rate. (2) Where the government allocates the funds directly to the Group, the grants are offset against borrowing costs. Where the government grants that the Group has recognized in accounting need to be returned, the accounting treatment in the current period is carried out as follows: 1) If the book value of an asset is offset on initial recognition, the book value will be adjusted; 2) If there is deferred income, the book balance of the deferred income will be offset, and the excess will be included in profit or loss in the current period; 3) Under any other circumstances, the grants will be included in profit or loss in the current period. 35. Deferred Income Tax Assets/Deferred Income Tax Liabilities The Group's deferred tax assets and deferred tax liabilities are calculated and recognized based on the difference (temporary difference) between the tax base and book value of the assets and liabilities. In the case of deductible losses that can be deducted from taxable income in subsequent years in accordance with the provisions of the tax laws, the corresponding deferred income tax assets are recognized. In the case of temporary differences arising from the initial recognition of goodwill, the corresponding deferred income tax liabilities are not recognized. With respect to temporary differences arising from the initial recognition of an asset or liability in a transaction which isn’t a business combination and which affects neither accounting profit nor taxable income (or deductible losses), the corresponding deferred income tax assets and deferred income tax liabilities are not recognized. On the balance sheet date, the deferred income tax assets and deferred income tax liabilities are measured at the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled. The Group recognizes deferred income tax assets to the extent of the taxable income which it is most likely to obtain and which can be deducted from deductible temporary differences, deductible losses and tax credits. 36. Leasing (1) Identification of leases The term "lease" refers to a contract whereby the lessor transfers the right of use regarding the leased asset(s) to the lessee within a specified time in exchange for consideration. On the commencement date of the contract, the Group assesses whether the contract is a lease or contains 200 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) a lease. If a party to the contract transfers the right allowing the control over the use of one or more assets that have been identified within a certain period, in exchange for a consideration, such contract is a lease or includes a lease. In order to determine whether a party to the contract transfers the right allowing the control over the use of the identified assets for a certain period of time, the Group assesses whether the customers in the contract are entitled to obtain almost all the economic benefits arising from the use of the identified assets during the use period, and have the right to dominate the use of the identified assets during the use period. If a contract contains multiple single leases at the same time, the Group will split the contract, and conduct accounting treatment of each single lease respectively. If a contract contains both lease and non-lease parts at the same time, the Group will split the lease and non-lease parts for accounting treatment. (2) The Group as lessee 1) Lease recognition On the commencement date of the lease term, the Group recognizes the right-of-use assets and lease obligations in respect of the lease. For the recognition and measurement of right-of-use assets and lease liabilities, please refer to Note IV "25. Right-of-use assets" and "31. Lease liabilities". 2) Lease change A lease change refers to a change in the scope, consideration, and term of lease outside the original contract clauses, including the addition or termination of the one or several rights to use lease assets, and the extension or reduction of the lease term specified in the contract. The effective date of lease change refers to the date when both parties reach an agreement on lease change. If the lease changes and the following conditions are met at the same time, the Group will account for the lease change as a separate lease: a) The lease change expands the lease scope or extends the lease term by increasing the right to use one or more leased assets; b) The increased consideration is equivalent to the separate price of the expanded lease scope or the extended lease term adjusted according to the contract conditions. If the lease change is not accounted for as a separate lease, on the effective date of the lease change, the Group will allocate the consideration of the changed contract in accordance with the relevant provisions of the lease standards and re-determine the changed lease term. The revised rate of discount is used to discount the changed lease payments to remeasure the lease liability. When calculating the present value of the changed lease payments, the Group uses the interest rate implicit in lease as the rate of discount. If the interest rate implicit in lease cannot be determined, the Group adopts the incremental borrowing rate of the lessee on the effective date of the lease change as the rate of discount. With regard to the impact of the above-mentioned lease liability adjustment, the Group conducts accounting treatment according to the following situations: a) The lessee will correspondingly reduce the book value of the right-of-use assets and include the profit or loss of the lease terminated in part or whole in the current profit or loss, if the lease change narrows the scope of lease or shortens the lease term. b) The lessee will correspondingly adjust the 201 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) book value of the right-of-use assets, if other lease changes result in the re-measurement of the lease obligation. 3) Short-term and low-value asset leases For short-term leases with a lease term not exceeding 12 months and low-value asset leases with lower value when single leased assets are brand new assets, the Group chooses not to recognize right-of-use assets and lease liabilities. The Group includes the payments of short-term and low- value asset leases incurred during each period of the lease term in the profit or loss for the current period or the cost of relevant assets by the straight-line method. (3) The Group as lessor On the basis that (1) the contract assessed is a lease or includes a lease, the Group, as the lessor, classifies leases into finance leases and operating leases on the lease commencement date. If a lease substantially transfers virtually all risks and rewards associated with ownership of the leased asset, the lessor classifies the lease as a finance lease and leases other than finance leases as operating leases. The Group usually classifies a lease that falls under any one or more of the following circumstances as a finance lease: a) When the lease term expires, the ownership of the leased asset is transferred to the lessee; b) The lessee has the option to purchase the leased asset(s). As the agreed purchase price is low enough compared with the fair value of the leased asset(s) at the time the option is expected to be exercised, it can be reasonably determined at the inception of the lease that the lessee will exercise the option; c) Although the ownership of the assets is not transferred, the lease term accounts for most of the service life of the leased assets; d) On the lease commencement date, the present value of lease receipts is almost equivalent to the fair value of leased assets; e) The leased assets are special in nature, and only the lessee can use them without major renovation. The Group may also classify a lease that falls under any one or more of the following circumstances as a finance lease: a) If the lessee cancels the lease, losses to the lessor caused by the cancellation will be borne by the lessee; b) The gains or losses arising from the fluctuation of the fair value of the residual value of assets belong to the lessee; c) The lessee has the ability to continue leasing until the next term at a rent far below the market level. 1) Accounting treatment of finance leases Initial measurement On the commencement date of the lease term, the Group recognizes the finance lease receivables for the finance lease and derecognizes the leased asset of the finance lease. It recognizes the net investment in the lease as the entry value of the finance lease, when initially measuring the finance lease receivable. The net investment in the lease is the sum of the net value of the unguaranteed residual value and the lease receivable not received on the commencement date of the lease term at the interest rate implicit in lease. Lease collection amount refers to the amount that the lessor should collect from the lessee for transferring the right to use the leased assets during the lease term, including: a) Fixed payment amount and substantial fixed payment amount that the lessee needs to pay. If there 202 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) is lease incentive, deduct the amount related to lease incentive; b) The variable lease payment depending on the index or ratio, which is determined according to the index or ratio on the commencement date of the lease term at the initial measurement; c) The exercise price of the purchase option, provided that it is reasonably determined that the lessee will exercise the option; d) The amount to be paid by the lessee to exercise the option to terminate the lease, provided that the lease term reflects that the lessee will exercise the option to terminate the lease; e) The residual value of guarantee provided to the lessor by the lessee, the party related to the lessee and an independent third party that has the financial ability to fulfill the guarantee obligation. Follow-up measurement The Group calculates and confirms the interest income at a fixed periodic rate in each period in the lease term. Periodic rate refers to the rate of discount implicit in lease adopted to determine the net investment in the lease (in the case of sublease, if the interest rate implicit in lease of sublease cannot be determined, the rate of discount implicit in original lease is adopted (adjusted according to the initial direct expenses related to sublease)), or the revised rate of discount determined in accordance with the relevant provisions where the change of the finance lease is not accounted for as a separate lease and meets the condition that the lease will be classified as a finance lease if the change became effective on the lease commencement date. Accounting treatment of lease change If the lease changes and the following conditions are met at the same time, the Group will account for the lease change as a separate lease: a) The lease change expands the lease scope by increasing the right to use one or more leased assets; b) The increased consideration is equivalent to the separate price of the expanded lease scope adjusted according to the contract conditions. If the change of finance lease is not accounted for as a separate lease, and the condition that the lease will be classified as an operating lease if the change takes effect on the lease commencement date is met, the Group will account for it as a new lease from the effective date of the lease change, and take the net lease investment before the effective date of the lease change as the book value of the leased asset. 2) Accounting treatment of operating leases Treatment of rent The Group recognizes lease receipts from operating leases as rental income on a straight-line basis during each period of the lease term. Incentives provided If the Group provides a rent-free period, it allocates the total rentals over the entire lease term without deducting the rent-free period by the straight-line method, and also recognizes rental income during the rent-free period. If certain expenses of the lessee are borne, the Group allocates the balance of rental income over the lease term after such expenses are deducted from the gross rental income. Initial direct cost 203 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Initial direct expenses incurred by the Group in connection with operating leases shall be capitalized to the cost of the leased underlying asset and recorded in the profits and losses of the current period in stages over the lease term on the same basis of recognition as rental income. Depreciation For the fixed assets in the assets under operating lease, the Group adopts the depreciation policy of similar assets to calculate and distill depreciation. For other assets under operating lease, the Group amortizes them in a systematic and reasonable manner. Variable lease payments Variable lease payments made by the Group in relation to operating leases that are not included in the lease receivable are included in the current profit or loss when they are actually incurred. Change of operating leases If an operating lease changes, the Group will regard it as a new lease for accounting treatment from the effective date of the change. The advance receipt or the lease receivable related to the lease prior to the change is recognized as the payment receivable of the new lease. 37. Changes in Main Accounting Policies and Estimates (1) Changes of accounting policies The Ministry of Finance issued the Accounting Standards for Business Enterprises Interpretation No. 16 (C.K. [2022] No. 31) (hereinafter referred to as "Interpretation No. 16" ) on November 30, 2022, interpretation No. 16 that "accounting treatment that the exemption of initial recognition shall not apply to the deferred income tax relating to assets and liabilities arising from a single transaction", which has taken effect on 1 January 2023, with early adoption permitted for companies from the year of release. The Company has applied this interpretation starting from 1 January 2023. For taxable temporary differences and deductible temporary differences arising from the lease liabilities and right-of-use assets recognised based on single transactions that comply with the above provision, at the period-begin of the earliest period presented in the financial statement that followed such provision for the first time, the Company will adjust retained income brought forward in the earliest period presented in the financial statement and other relevant items of the financial statement based on the figures cumulatively affected in accordance with such provision and the Accounting Standards for Business Enterprises No. 18 Income Taxes. In accordance with the relevant provisions of Interpretation No. 16, the names and amounts of the significantly affected statement items are set forth below: Item affected 1 January 2023 204 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Before Adjustment After adjustment adjustment amount Total assets Of which: deferred income tax 1,190,454,750.62 6,951,620.03 1,197,406,370.65 assets Total liabilities Of which: deferred income tax 89,535,936.97 5,891,361.34 95,427,298.31 liabilities Total shareholders Of which: retained earnings 3,637,291,770.33 1,060,258.69 3,638,352,029.02 (2) Changes in Accounting Estimates No such cases in the Reporting Period. V. Taxation 1. Main Taxes and Tax Rate Category of taxes Basis Specific situation of the taxes rate Calculated the output tax at the tax rate and paid the VAT by the amount after deducting the deductible withholding VAT VAT at current period, of 1%, 3%, 5%, 6%, 9%, 13% which the VAT applicable to easy collection won’t belong to the deductible withholding VAT. Paid at 5% by subsidiaries including: Dongguan Konka, XingDa HongYe, Xinfeng Microcrystalline, Boluo Konka Precision, Boluo Konka, Ningbo Kanghanrui, Jiangsu Konka Smart, Yibin Kangrun, Yibin Kangrun Medical, Konka Urban Huanjia (Henan), Konka Ronghe, Chengdu The circulating tax actually maintenance and Anren, Chain Kingdom Semiconductor paid construction tax (Shao xing ), Guizhou Kanggui Materials, Zhe gian g Konka Electronic, Zhe gian g Konka Technology Industry, Songyang Konka Intelligent Paid reduced by half at 7% by subsidiaries including: Liaoyang Kangshun Renewable, Zhitong Technology, Yibin Smart, 205 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Category of taxes Basis Specific situation of the taxes rate Shenzhen Nianhua, Anhui Konka Low Carbon, Kanghong Xintong Paid reduced by half at 5% by subsidiaries including: Jiangkang (Shanghai) Technology, Guizhou Konka New Material, Guizhou Konka New Energy Paid at 1%: Jiangxi Konka, Jiangxi High Transparent Substrate Paid at 7%: other subsidiaries. The circulating tax actually Education surtax 3% paid Local education The circulating tax actually 2% surtax paid Enterprise income 25%/ See 2.Tax Preference and Approved Taxable income tax Documents for details The main taxpayers of different corporate income tax rates are explained as follows: Name of entity Income tax rate Electronics Technology, Anhui Konka, Anhui Tong giường, Shanxi Konka, Jiangsu Konka, XingDa HongYe, Xinfeng Microcrystalline, Boluo 15% Precision, Kowin Memory (Shenzhen), Xiaojia Technology Hong Kong Konka, Hongdin Trading, Jiali International, Hongjet, Jiaxin Technology, Hongdin 16.5% Invest, Konka Mobility, Kowin Memory (Hong Kong) Chain Kingdom Memory Technologies 16.5% Konka Europe 15% Kanghao Technology 22.5% Konka North America 21% The Company as the Parent and other subsidiaries 25% Note: 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, 206 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) liquidation summary, and finance transfer”. It came into force from 1 January 2008. According to the above methods, the Company’s sales branch companies in each area will hand in the corporate income taxes in advance from 1 January 2008 and will be final settled uniformly by the Company at the year-end. 2. Tax Preference and Approved Documents (1) According to the announcement of the State Administration of Taxation No. 12 of 2023: Small enterprises with small profits shall reduce the taxable income amount by 25% and pay the corporate income tax at the tax rate of 20%, which shall be continued until 31 December 2027. (2) On 18 October 2022, Anhui Konka, a subsidiary of the Company, obtained the Certificate of High-Tech Enterprise jointly issued by the Department of Science and Technology of Anhui Province, the Department of Finance of Anhui Province and the Taxation Bureau of Anhui Province of the State Administration of Taxation, with the certificate number GR202234002272, which is valid for three years. In accordance with the relevant tax regulations, Anhui Konka is entitled to the relevant tax incentives for three consecutive years from 2022 to 2024 to enjoy the relevant tax preferential policies on high-tech enterprises and pay enterprise income tax at a preferential tax rate of 15%. (3) On 4 November 2022, Xinfeng Microcrystalline, a subsidiary of the Company, obtained the Certificate of High-Tech Enterprise jointly issued by the Department of Science and Technology of Jiangxi Province, the Department of Finance of Jiangxi Province and the Taxation Bureau of Jiangxi Province of the State Administration of Taxation, with the certificate number GR202236000999, which is valid for three years. According to the relevant tax regulations, Xinfeng Microcrystalline is entitled to the relevant tax incentives for three consecutive years from 2022 to 2024 to enjoy the relevant tax preferential policies on high-tech enterprises and pay enterprise income tax at a preferential tax rate of 15%. (4) On 18 October 2022, Anhui Tong giường, a subsidiary of the Company, obtained the Certificate of High-Tech Enterprise jointly issued by the Department of Science and Technology of Anhui Province, the Department of Finance of Anhui Province and the Taxation Bureau of Anhui Province of the State Administration of Taxation, with the certificate number GR202234000798, which is valid for three years. In accordance with the relevant tax regulations, Anhui Tong giường is entitled to the relevant tax incentives for three consecutive years from 2022 to 2024 to enjoy the relevant tax preferential policies on high-tech enterprises and pay enterprise income tax at a preferential tax rate of 15%. (5) On 22 December 2022, Boluo Precision, a subsidiary of the Company, obtained the "High-tech Enterprise Certificate" jointly issued by Department of Science and Technology of Guangdong Province, Department of Finance of Guangdong Province and Guangdong Provincial Tax Service of State Taxation Administration (No. GR202244017658), which will be valid for three years. According to relevant tax regulations, Boluo Precision enjoys relevant preferential tax policies for high-tech enterprises for three consecutive years from 2022 to 2024, and pays enterprise income tax at a reduced rate of 15%. 207 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) (6) On 19 December 2022, Electronic Technology, a subsidiary of the Company, received the Certificate of High-Tech Enterprise jointly issued by Shenzhen Science and Technology Innovation Committee, Shenzhen Finance Bureau and Shenzhen Taxation Bureau of the State Administration of Taxation, with the certificate number GR202244205867, which is valid for three years. In accordance with the relevant tax regulations, Electronic Technology is entitled to the relevant tax incentives for three consecutive years from 2022 to 2024 to enjoy the relevant tax preferential policies on high-tech enterprises and pay enterprise income tax at a preferential tax rate of 15%. (7) On 20 December 2021, XingDa HongYe, a subsidiary of the Company, obtained the "High- tech Enterprise Certificate" jointly issued by Department of Science and Technology of Guangdong Province, Department of Finance of Guangdong Province and Guangdong Provincial Tax Service of State Taxation Administration (No. GR202144002737), which will be valid for three years. According to relevant tax regulations, XingDa HongYe enjoys relevant preferential tax policies for high-tech enterprises for three consecutive years from 2021 to 2023, and pays enterprise income tax at a reduced rate of 15%. (8) On 23 December 2021, Kowin Memory (Shenzhen), a subsidiary of the Company, received the Certificate of High-Tech Enterprise jointly issued by Shenzhen Science and Technology Innovation Committee, Shenzhen Finance Bureau and Shenzhen Taxation Bureau of the State Administration of Taxation, with the certificate number GR202144206630, which is valid for three years. In accordance with the relevant tax regulations, Kowin Memory (Shenzhen) is entitled to the relevant tax incentives for three consecutive years from 2021 to 2023 to enjoy the relevant tax preferential policies on high-tech enterprises and pay enterprise income tax at a preferential tax rate of 15%. (9) On 19 December 2022, Xiaojia Technology, a subsidiary of the Company, received the Certificate of High-Tech Enterprise jointly issued by Shenzhen Science and Technology Innovation Committee, Shenzhen Finance Bureau and Shenzhen Taxation Bureau of the State Administration of Taxation, with the certificate number GR202244203274, which is valid for three years. In accordance with the relevant tax regulations, Xiaojia Technology is entitled to the relevant tax incentives for three consecutive years from 2022 to 2024 to enjoy the relevant tax preferential policies on high-tech enterprises and pay enterprise income tax at a preferential tax rate of 15%. (10) On 29 November 2023, Shanxi Konka, a subsidiary of the Company, obtained the "High-tech Enterprise Certificate" jointly issued by Department of Science and Technology of Shanxi Province, Department of Finance of Shanxi Province and Shanxi Provincial Tax Service of State Taxation Administration (No. GR202361002167), which will be valid for three years. According to relevant tax regulations, Shanxi Konka enjoys relevant preferential tax policies for high-tech enterprises for three consecutive years from 2023 to 2025, and pays enterprise income tax at a reduced rate of 15%. (11) On 6 November 2023, Jiangsu Konka, a subsidiary of the Company, obtained the "High-tech Enterprise Certificate" jointly issued by Department of Science and Technology of Jiangsu Province, Department of Finance of Jiangsu Province and Jiangsu Provincial Tax Service of State 208 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Taxation Administration (No. GR202332008044), which will be valid for three years. According to relevant tax regulations, Shanxi Konka enjoys relevant preferential tax policies for high-tech enterprises for three consecutive years from 2023 to 2025, and pays enterprise income tax at a reduced rate of 15%. (12) In accordance with the Announcement on the Renewal of the Enterprise Income Tax Policy for Western Development Enterprises (Ministry of Finance, General Administration of Taxation, National Development and Reform Commission Announcement No. 23 of 2020), an enterprise established in the western region who is mainly engaged in an industry specified in the Catalogue of Encouraged Industries in the Western Region and whose main business income accounts for over 60% of its gross income in the current year, is entitled to a reduced corporate income tax rate of 15%. Chengdu Konka Electronic, a subsidiary of the Company, is eligible for this preferential tax policy. (13) According to the fiscal and taxation document [2011] No. 100 published by the Ministry of Finance and the State Administration of Taxation, for the VAT general taxpayers who sell their self-developed and produced software products, the VAT shall be levied at the rate of 13%, and then the part that the actual tax burden on their VAT exceeds 3 will be implemented with the policy of immediate withdrawal. The Company’s subsidiaries, Electronics Technology and Anhui Tong giường all enjoy this preferential policy. VI. Notes to Major Items in the Consolidated Financial Statements of the Company Unless otherwise noted, for the financial statement data disclosed below, "beginning of the year" refers to 1 January 2023, "end of the year" refers to 31 December 2023, "the current year" refers to the period from 1 January 2023 to 31 December 2023 and "last year" refers to the period from 1 January 2022 to 31 December 2022. The monetary unit is renminbi. 1. Monetary assets Item Closing balance Opening balance Cash on hand 469.28 14.78 Bank deposits 5,892,986,243.07 5,473,400,175.52 Other monetary assets 613,372,864.67 514,695,300.41 Total 6,506,359,577.02 5,988,095,490.71 Of which: Total amount deposited overseas 55,324,772.13 137,008,617.40 Note: The closing balance of other monetary funds is mainly the balance of time deposits, margin deposits and account balance on WeChat, Alipay and other platforms. For details of restricted funds, please refer to Note VI-25 Assets with restricted ownership or use right. 2. Held-for-trading financial assets Item Closing balance Opening balance Financial assets at fair value through profit or loss 469,636,700.78 209 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Including: Investment in equity instruments 469,636,700.78 Total 469,636,700.78 3. Notes receivable ( 1 ) Classified presentation of notes receivable Item Closing balance Opening balance Banker's acceptance 517,759,367.29 709,558,838.75 Commercial acceptance draft 15,412,581.86 350,178,404.79 Total 533,171,949.15 1,059,737,243.54 ( 2 ) Listed by withdrawal methods for provision for bad debts Closing balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) Provision set aside for bad debts by the single item Provision set aside for 533,492,913.47 100.00 320,964.32 0.06 533,171,949.15 bad debts by portfolio Of which: Banker's 517,759,367.29 97.05 517,759,367.29 acceptance Commercial acceptance 15,733,546.18 2.95 320,964.32 2.04 15,412,581.86 draft Total 533,492,913.47 100.00 320,964.32 0.06 533,171,949.15 (Continued) Opening balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) Provision set aside for bad debts by the single item Provision set aside for 1,067,029,648.07 100.00 7,292,404.53 0.68 1,059,737,243.54 bad debts by portfolio Of which: Banker's 709,558,838.75 66.50 709,558,838.75 acceptance 210 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Commercial acceptance 357,470,809.32 33.50 7,292,404.53 2.04 350,178,404.79 draft Total 1,067,029,648.07 100.00 7,292,404.53 0.68 1,059,737,243.54 Provision for expected credit losses on commercial acceptance draft based on aging in the portfolio Closing balance Name Provision Book balance Provision for bad debts percentage (%) Within one year 15,733,546.18 320,964.32 2.04 Total 15,733,546.18 320,964.32 2.04 ( 3 ) Provision for bad debts of notes receivable set aside, recovered or reclassified in the current year Change in the current year Opening Closing Category balance Recovery or Charge-off balance Provision Others reclassification or write-off Commercial 7,292,404.53 357,873.71 7,329,313.92 320,964.32 acceptance draft Banker's acceptance Total 7,292,404.53 357,873.71 7,329,313.92 320,964.32 ( 4 ) Notes receivable pledged at the end of the year Item Amount pledged at the end of the year Banker's acceptance 209,288,446.67 Commercial acceptance draft Total 209,288,446.67 ( 5 ) Notes receivable endorsed or discounted but had not yet matured on the balance sheet date at the end of the year Amount derecognised at the end Amount not derecognised at the Item of the year end of the year Banker's acceptance 1,076,672,657.07 Commercial acceptance draft 11,524,075.93 Total 1,076,672,657.07 11,524,075.93 211 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) ( 6 ) Notes receivable actually written off in the current year There were no significant write-offs of notes receivable in the current year. 4.Accounts receivable ( 1 ) Accounts receivable listed by aging portfolio Book balance at the beginning of Aging Book balance at the end of the year the year Within one year (inclusive) 1,489,573,102.24 1,708,338,208.62 One to two years 152,217,296.67 163,165,760.88 Two to three years 131,889,796.60 267,210,849.90 Three to four years 265,897,663.73 671,539,902.08 Four to five years 674,517,508.86 692,197,002.61 Over five years 894,028,569.23 206,463,164.65 Total 3,608,123,937.33 3,708,914,888.74 ( 2 ) Accounts receivable listed by withdrawal methods for bad debts Closing balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) Provision set aside for bad 1,601,967,285.04 44.40 1,524,090,371.01 95.14 77,876,914.03 debts by the single item Provision set aside for bad debts by portfolio Of which: Aging 2,006,156,652.29 55.60 357,487,593.24 17.82 1,648,669,059.05 portfolio Subtotal of 2,006,156,652.29 55.60 357,487,593.24 17.82 1,648,669,059.05 portfolio Total 3,608,123,937.33 100.00 1,881,577,964.25 52.15 1,726,545,973.08 (Continued) Opening balance Category Book balance Provision for bad debts Carrying value 212 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Provision Proportion Amount Amount percentage (%) (%) Provision set aside for bad 1,487,466,561.80 40.11 1,350,460,284.27 90.79 137,006,277.53 debts by the single item Provision set aside for bad debts by portfolio Of which: 2,221,448,326.94 59.89 321,719,768.25 14.48 1,899,728,558.69 Aging portfolio Subtotal of 2,221,448,326.94 59.89 321,719,768.25 14.48 1,899,728,558.69 portfolio Total 3,708,914,888.74 100.00 1,672,180,052.52 45.09 2,036,734,836.22 1 ) Provision set aside for bad debts of accounts receivable by single item Opening balance Closing balance Name Provision Reasons Provision for bad Provision for bad Book balance Book balance percentage for the debts debts (%) provision Shanghai Huaxin Expected to International 299,136,676.70 293,153,943.17 299,136,676.70 293,153,943.17 98.00 be difficult Group Co., to recover Ltd. Hongtu Sanbao High- Expected to tech 200,000,000.00 160,000,000.00 200,000,000.00 180,000,000.00 90.00 be difficult Technology to recover Co., Ltd. Shenzhen Not Yaode expected to 143,135,135.62 121,664,865.28 145,562,210.29 145,562,210.29 100.00 Technology be Co., Ltd. recoverable Guangan Ouqishi Expected to Electronic 113,230,553.53 110,965,942.46 113,140,553.53 110,965,942.46 98.08 be difficult Technology to recover Co., Ltd. Guangxi BG Expected to New 83,396,556.37 81,728,625.24 83,396,556.37 81,728,625.24 98.00 be difficult Materials Co., to recover Ltd. Zhongfu Expected to Tiangong 71,589,096.65 53,691,822.49 71,389,096.65 53,541,822.49 75.00 be difficult Construction to recover Group Co., 213 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Opening balance Closing balance Name Provision Reasons Provision for bad Provision for bad Book balance Book balance percentage for the debts debts (%) provision Ltd. Gome Customization Not (Tianjin) expected to 59,569,295.02 35,741,577.01 59,569,295.02 59,569,295.02 100.00 Home be Appliances recoverable Co., Ltd. CCCC First Not Harbor expected to 65,221,300.00 65,221,300.00 55,438,105.00 55,438,105.00 100.00 Engineering be Company Ltd. recoverable Not Xingda expected to Hongye (Hk) 51,902,301.95 51,902,301.95 51,902,301.95 51,902,301.95 100.00 be Limited recoverable Not China Energy expected to Electric Fuel 50,000,000.00 50,000,000.00 50,000,000.00 50,000,000.00 100.00 be Co., Ltd. recoverable Expected to Others 350,285,645.96 326,389,906.67 472,432,489.53 442,228,125.39 93.61 be difficult to recover Total 1,487,466,561.80 1,350,460,284.27 1,601,967,285.04 1,524,090,371.01 2 ) Provision set aside for bad debts of accounts receivable by portfolio Closing balance Aging Provision for bad Provision percentage Book balance debts (%) Within one year 1,454,252,297.12 29,667,135.82 2.04 One to two years 91,446,278.07 9,162,526.34 10.02 Two to three years 107,199,985.50 24,323,676.70 22.69 Three to four years 167,778,579.76 108,854,742.54 64.88 Four to five years 34,866,178.32 34,866,178.32 100.00 Over five years 150,613,333.52 150,613,333.52 100.00 Total 2,006,156,652.29 357,487,593.24 17.82 ( 3 ) Provision for bad debts of accounts receivable set aside, recovered or reclassified in the current year 214 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Change in the current year Category Opening balance Recovery or Provision reclassification Provision for bad debts 1,672,180,052.52 231,993,028.00 22,759,281.37 of accounts receivable Total 1,672,180,052.52 231,993,028.00 22,759,281.37 (Continued) Change in the current year Category Closing balance Decrease for other Charge-off or write-off reasons Provision for bad debts 1,527,689.87 -1,691,854.97 1,881,577,964.25 of accounts receivable Total 1,527,689.87 -1,691,854.97 1,881,577,964.25 Note: Decreases for other reasons were RMB-2,671,676.56 due to exchange rate changes in the current year and the decrease by RMB979,821.59 due to the loss of controlling right. ( 4 ) Accounts receivable actually written off in the current year Item Amount written off Accounts receivable written off 1,527,689.87 ( 5 ) Top five accounts receivable and contract assets in the closing balance categorised by debtors The total amount of accounts receivable with top five closing balance categorised by debtors in the current year was RMB1,270,247,243.45, accounting for 35.21% of the total closing balance of accounts receivable. The total closing balance of provision for bad debts correspondingly set aside was RMB645,731,486.43. 5.Contract assets ( 1 ) Contract assets Closing balance Opening balance Item Provision Provision Book Carrying Book balance for bad Carrying value for bad balance value debts debts Warranty 2,236,000.34 45,614.41 2,190,385.93 Total 2,236,000.34 45,614.41 2,190,385.93 ( 2 ) Classified presentation of contract assets by provisioning methods of bad debts Category Closing balance 215 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Book balance Provision for bad debts Carrying Proportion Provision value Amount Amount (%) percentage (%) Provision set aside for bad debts by the single item Provision set aside for bad debts by portfolio Of which: Aging 2,236,000.34 100.00 45,614.41 2.04 2,190,385.93 portfolio Subtotal of portfolio 2,236,000.34 100.00 45,614.41 2.04 2,190,385.93 Total 2,236,000.34 100.00 45,614.41 2.04 2,190,385.93 ( 3 ) Provision set aside for bad debts of contract assets by portfolio Closing balance Aging Provision Book balance Provision for bad debts percentage (%) Within one year 2,236,000.34 45,614.41 2.04 Total 2,236,000.34 45,614.41 ( 4 ) Provision for bad debts of contract assets set aside, recovered or reclassified in the current year Recovery or Provision in the Charge-off/Write-off Item reclassification in the Reasons current year in the current year current year Warranty 54,626.97 9,012.56 Normal provision Total 54,626.97 9,012.56 ( 5 ) Contract assets actually written off in the current year There were no contract assets actually written off in the current year. 6.Accounts receivable financing Item Closing balance Opening balance Notes receivable 173,396,326.14 237,187,228.44 Total 173,396,326.14 237,187,228.44 7.Other accounts receivable Item Closing balance Opening balance Interest receivable 6,681,258.01 3,878,580.64 216 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Closing balance Opening balance Dividends receivable 941,482.38 272,999.43 Other accounts receivable 981,498,327.12 1,437,973,265.51 Total 989,121,067.51 1,442,124,845.58 7.1 Interest receivable Item Closing balance Opening balance Interest on term deposits 6,681,258.01 3,878,580.64 Total 6,681,258.01 3,878,580.64 7.2 Dividends receivable ( 1 ) Category of dividends receivable Item (or investee) Closing balance Opening balance Chongqing Qingjia Electronics Co., 272,999.43 Ltd. Shenzhen Jielunte Technology Co., 941,482.38 Ltd. Total 941,482.38 272,999.43 7.3 Other receivables ( 1 ) Classified by account nature Book balance at the end of the Book balance at the beginning Nature of fund year of the year Deposit and margin 1,234,840,210.69 1,411,807,968.60 Intercourse funds among minority shareholders in the business consolidation 179,663,586.05 176,571,471.89 not under the same control and related parties Energy-saving subsidies receivable 152,399,342.00 152,399,342.00 Others 1,496,129,924.02 1,523,970,760.63 Total 3,063,033,062.76 3,264,749,543.12 ( 2 ) Other receivables listed by aging Book balance at the end of the Book balance at the beginning of Aging year the year Within one year 253,550,068.51 531,774,524.39 217 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) One to two years 77,519,916.42 551,601,162.73 Two to three years 551,521,166.18 688,602,155.02 Three to four years 690,507,047.29 1,096,771,140.67 Four to five years 1,092,957,617.71 201,058,646.10 Over five years 396,977,246.65 194,941,914.21 Total 3,063,033,062.76 3,264,749,543.12 ( 3 ) Classified presentation of other receivables by provisioning methods of bad debts Closing balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) Other receivables of expected credit 1,960,682,465.29 64.01 1,644,122,039.53 83.85 316,560,425.76 losses set aside by single item Other receivables of provision for bad debts set aside by credit risk characteristic portfolio: Of which: Aging 975,322,848.99 31.84 413,933,906.39 42.44 561,388,942.60 portfolio Low-risk portfolio 127,027,748.48 4.15 23,478,789.72 18.48 103,548,958.76 Subtotal of portfolio 1,102,350,597.47 35.99 437,412,696.11 39.68 664,937,901.36 Total 3,063,033,062.76 100.00 2,081,534,735.64 67.96 981,498,327.12 (Continued) Opening balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) Other receivables of expected credit 1,461,191,467.51 44.76 1,437,476,408.89 98.38 23,715,058.62 losses set aside by single item Other receivables of provision for bad debts set aside by credit risk characteristic 218 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Opening balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) portfolio: Of which: Aging 1,342,397,234.31 41.12 372,315,645.78 27.74 970,081,588.53 portfolio Low-risk portfolio 461,160,841.30 14.12 16,984,222.94 3.68 444,176,618.36 Subtotal of 1,803,558,075.61 55.24 389,299,868.72 21.59 1,414,258,206.89 portfolio Total 3,264,749,543.12 100.00 1,826,776,277.61 55.95 1,437,973,265.51 1 ) Provision set aside for bad debts of other receivables by portfolio Closing balance Aging Provision for bad Provision percentage Book balance debts (%) Within one year 79,420,865.29 1,443,228.60 1.82 One to two years 73,767,052.51 2,611,493.16 3.54 Two to three years 532,898,477.68 120,262,928.40 22.57 Three to four years 255,310,443.57 163,102,411.35 63.88 Four to five years 43,789,758.21 32,828,634.39 74.97 Over five years 117,164,000.21 117,164,000.21 100.00 Total 1,102,350,597.47 437,412,696.11 39.68 2 ) Provision set aside for bad debts of other receivables by the general expected credit loss model Phase I Phase II Phase III Expected credit Provision for bad Expected credit loss loss during the Total debts Expected credit during the whole whole outstanding loss for the outstanding maturity (with next 12 months maturity (without credit credit impairment) impairment) Balance as of 1 January 6,475,374.50 382,824,494.22 1,437,476,408.89 1,826,776,277.61 2023 Balance as of 1 January -796,704.84 -43,713,266.78 44,509,971.62 219 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Phase I Phase II Phase III Expected credit Provision for bad Expected credit loss loss during the Total debts Expected credit during the whole whole outstanding loss for the outstanding maturity (with next 12 months maturity (without credit credit impairment) impairment) 2023 in the current year -- Transferred to Phase II -796,704.84 796,704.84 -- Transferred to Phase III -44,509,971.62 44,509,971.62 -- Reclassified under Phase II -- Reclassified under Phase I Provision in the current 1,443,552.70 121,048,531.32 161,917,015.87 284,409,099.89 year Recovery in the current 5,678,993.76 24,071,209.19 318,202.52 30,068,405.47 year Charge-off in the current year Write-off in the current 68,817.68 68,817.68 year Other changes -50,264.38 536,845.67 486,581.29 Balance as at 31 1,443,228.60 435,969,467.51 1,644,122,039.53 2,081,534,735.64 December 2023 Note: The first stage is that credit risk has not increased significantly since initial recognition. For other receivables with an aging portfolio and a low-risk portfolio within one year, the loss provision is measured according to the expected credit losses in the next 12 months. The second stage is that credit risk has increased significantly since initial recognition but credit impairment has not yet occurred. For other receivables with an aging portfolio and a low-risk portfolio that exceed one year, the loss provision is measured based on the expected credit losses for the entire duration. The third stage is the credit impairment after initial confirmation. For other receivables of credit impairment that have occurred, the loss provision is measured according to the credit losses that have occurred throughout the duration. Provision for bad debts of other receivables set aside, recovered or reclassified in the current year Opening Category Change in the current year Closing balance balance 220 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Charge-off Recovery or Provision or write- Others reclassification off Provision for bad debts of 1,826,776,277.61 284,409,099.89 30,068,405.47 68,817.68 -486,581.29 2,081,534,735.64 other receivables Total 1,826,776,277.61 284,409,099.89 30,068,405.47 68,817.68 -486,581.29 2,081,534,735.64 Note: Decreases for other reasons were RMB-490,091.29 due to exchange rate changes and the decrease by RMB3,510 due to the loss of controlling right. ( 5 ) Other receivables actually written off in the current year Item Amount written off Other accounts receivable written off 68,817.68 ( 6 ) Other receivables with top five year-end balances categorised by debtors The total amount of other receivables with top five closing balance categorised by debtors in the current year was RMB1,370,349,125.97, accounting for 44.74% of the total closing balance of other receivables. The total closing balance of provision for bad debts correspondingly set aside was RMB746,602,773.17. 8.Prepayments ( 1 ) Age of prepayments Closing balance Opening balance Item Amount Proportion (%) Amount Proportion (%) Within one year 114,332,392.60 69.10 332,218,631.50 85.20 One to two years 827,985.04 0.50 52,945,431.22 13.58 Two to three years 46,545,996.66 28.13 4,191,405.92 1.07 Over three years 3,747,937.21 2.27 592,183.75 0.15 Total 165,454,311.51 100.00 389,947,652.39 100.00 Note: The amount of advanced payments aged over one year at the end of the period is RMB51,121,918.91, accounting for 30.90% of the total balance of advanced payments of the Company, and consists mainly of unsettled payments. ( 2 ) Top five prepayments in the closing balance categorised by payees The total amount of prepayments with top five closing balance categorised by payees was RMB100,270,755.74, accounting for 60.60% of the total closing balance of prepayments. 221 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 9.Inventory ( 1 ) Inventory classification Closing balance Provision for Item inventory Book balance impairment/for Carrying value contract fulfilment cost impairment Raw materials 593,131,602.70 86,829,664.81 506,301,937.89 Semi-finished products 96,408,258.96 41,741,196.19 54,667,062.77 Commodities in stock 2,636,678,840.40 490,032,803.73 2,146,646,036.67 Commissioned products 1,934,264.95 211,225.91 1,723,039.04 Contract fulfilment costs Development costs 540,559,624.61 540,559,624.61 Total 3,868,712,591.62 618,814,890.64 3,249,897,700.98 (Continued) Opening balance Provision for Item inventory Book balance impairment/for Carrying value contract fulfilment cost impairment Raw materials 1,168,223,234.28 64,695,751.94 1,103,527,482.34 Semi-finished products 145,186,803.18 37,339,815.90 107,846,987.28 Commodities in stock 3,316,097,782.82 270,664,206.34 3,045,433,576.48 Commissioned products 2,862,799.75 2,862,799.75 Contract fulfilment costs 254,159.33 254,159.33 Development costs 149,842,751.04 149,842,751.04 Total 4,782,467,530.40 372,699,774.18 4,409,767,756.22 ( 2 ) Inventory falling price reserves and impairment provision of contract performance costs Increase in the current year Item Opening balance Withdrawal Others 222 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Increase in the current year Item Opening balance Withdrawal Others Raw materials 64,695,751.94 34,137,020.94 Semi-finished products 37,339,815.90 7,240,010.26 Commodities in stock 270,664,206.34 330,144,533.95 Commissioned products 212,034.71 Total 372,699,774.18 371,733,599.86 (Continued) Decrease in the current year Item Closing balance Write-off Others Raw materials 12,546,636.83 -543,528.76 86,829,664.82 Semi-finished products 2,838,629.97 41,741,204.42 Commodities in stock 110,287,169.31 488,767.25 490,032,795.49 Commissioned products 808.80 211,225.91 Total 125,672,436.11 -53,952.71 618,814,890.64 Specific basis for determining the realisable net value and reasons for inventory falling price reserves and impairment provision for contract performance costs transferred back or written off during the Reporting Period: Reasons for charge-off of provision Specific basis for withdrawal of Item for inventories impairment in the inventory falling price reserves current year The realisable net value was lower than They have been sold or used in the Raw materials the carrying value current year The realisable net value was lower than They have been sold or used in the Semi-finished products the carrying value current year The realisable net value was lower than They have been sold in the current Commodities in stock the carrying value year 10.Current portion of non-current assets Item Closing balance Opening balance Nature Long-term receivables due 14,630,000.00 Finance lease payment within one year Total 14,630,000.00 223 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 11.Other current assets Item Closing balance Opening balance Principal and interests of entrusted loans to associated 1,744,123,316.97 1,544,592,633.44 enterprises Prepayments and deductible taxes, and refund of tax for 569,875,346.61 457,991,464.58 export receivable Deferred expenses 28,112,001.12 17,278,894.58 Costs receivable for returning 15,925,346.67 14,214,651.96 goods Others 1,123,457.38 4,763,581.27 Total 2,359,159,468.75 2,038,841,225.83 12.Long-term receivables Closing balance Item Provision Book balance for bad Carrying value debts Finance lease payment Including: Unrealised financing income Cash deposits of long-term receivables Long-term receivables from franchise items Less: Long-term receivables due within one year (See Note Vi-10 for details) Total (Continued) Opening balance Item Provision Book balance for bad Carrying value debts Finance lease payment Including: Unrealised financing income Cash deposits of long-term receivables 15,430,400.00 15,430,400.00 Long-term receivables from franchise items Less: Long-term receivables due within one year 14,630,000.00 14,630,000.00 (See Note Vi-10 for details) 224 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Opening balance Item Provision Book balance for bad Carrying value debts Total 800,400.00 800,400.00 225 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 13.Long-term equity investment Changes in the current year Investee Opening balance Profit or loss of Changes in other Increase in the Decrease in the Cost method to equity investment recognised comprehensive investment investment method by the equity method income Konka Ventures Development (Shenzhen) Co., Ltd. (formerly known as "Konka 4,963,158.89 41,420.73 Ventures Development (Shenzhen) Co., Ltd." ) Nanjing Zhihuiguang Information 1,686,591.04 332,696.32 Technology Research Institute Co., Ltd. Feidi Technology (Shenzhen) Co., Ltd. 10,591,603.87 115,303.85 Shenzhen Kangyue Enterprise Co., Ltd. 32,232,415.88 -7,255,087.00 Foshan Zhu gian g Media Creative Park 2,834,367.04 -2,834,367.04 Cultural Development Co., Ltd. Kangkai Technology Service (Chengdu) 209,048.32 -94,854.53 Co., Ltd. Pu giường Jiakang Technology Co, Ltd. 3,658,484.71 57,790.00 Chongqing Qingjia Electronics Co., Ltd. 5,831,185.33 5,831,185.33 Shenzhen Jielunte Technology Co., Ltd. 99,748,594.97 -3,889,533.49 Panxu Intelligence Co., Ltd. 51,392,171.46 -2,410,150.21 -295,544.14 Orient Excellent (Zhuhai) Asset 7,482,864.06 1,115,710.93 226 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Investee Opening balance Profit or loss of Changes in other Increase in the Decrease in the Cost method to equity investment recognised comprehensive investment investment method by the equity method income Management Co., Ltd. Dongfang Jiakang No.1 (Zhuhai) Private Equity Investment Fund (LP) (formerly: 483,905,786.35 161,022,858.56 15,206,372.63 Dongfang Konka No. 1 (Zhuhai) Private Equity Investment Fund (LP)) Tongxiang Wuzhen Kunyu Venture Capital Investment Co., Ltd. (formerly: Tongxiang 3,527,761.64 -3,724.56 Wuzhen Kunyu Equity Investment Co., Ltd.) Shenzhen RF-Llink Technology Co., Ltd. Anhui Kaikai Shijie E-commerce Co., Ltd. 418,721,305.96 93,109.02 Kunshan Kangsheng Investment 313,484,693.57 -52,251,209.71 Development Co., Ltd. Chutian Dragon Co., Ltd. 523,726,463.18 109,831,325.31 Shanxi Silk Road Cloud Intelligent Tech 13,333,698.78 -8,144,973.65 -1,136.65 Co., Ltd. Shenzhen Kanghong xing Intelligent Technology Co., Ltd. Shenzhen Zhongkang Beidou Technology Co., Ltd. (formerly named: Shenzhen 227 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Investee Opening balance Profit or loss of Changes in other Increase in the Decrease in the Cost method to equity investment recognised comprehensive investment investment method by the equity method income Zhongbing Konka Technology Co., Ltd.) Shenzhen Yaode Technology Co., Ltd. Wuhan Tianyuan Environmental Protection 352,295,640.91 35,840,487.27 Co., Ltd. Chuzhou Konka Technology Industry 49,658,397.02 -10,322,848.45 Development Co., Ltd. Chuzhou Kangjin Health Industrial 275,858,698.37 -36,821,079.39 Development Co., Ltd. Nantong Kang gian Technology Industrial 107,310,029.86 Park Operations and Management Co., Ltd. Chuzhou Kangxin Health Industry 183,310,823.25 -2,558,013.46 Development Co., Ltd. Dongguan Guankang Yuhong Investment 521,341,722.37 -19,932,783.45 Co., Ltd. Shenzhen Morsemi Semiconductor Technology Co., Ltd. Shandong Econ Technology Co., Ltd. 1,246,099,855.22 -29,643,085.83 Dongguan Kangjia New Materials 6,951,651.72 -93,956.95 Technology Co., Ltd.. 228 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Investee Opening balance Profit or loss of Changes in other Increase in the Decrease in the Cost method to equity investment recognised comprehensive investment investment method by the equity method income Chongqing E2info Technology Co., Ltd. 1,023,251,062.59 31,709,517.46 Yantai Kangyun Industrial Development 72,320,476.84 -6,436,090.68 Co., Ltd. E3info (Hainan) Technology Co., Ltd. 30,708,255.04 7,423.93 Shenzhen Kangjia Jiapin Intelligent 5,371,364.87 1,719,225.60 Electrical Apparatus Technology Co., Ltd. Shenzhen KONKA E-display Co., Ltd. 82,221,081.72 2,827,700.92 8,655.99 Chongqing Yuanlv Benpao Real Estate 33,721,573.96 -5,631,658.14 Co., Ltd. Shenzhen Kangpeng Digital Technology 3,411,153.10 -1,641,132.09 Co., Ltd. Yantai Kangtang Construction 232,597.64 629,796.43 Development Co., Ltd. Dongguan Konka Smart Electronic 23,998,624.46 125,519.24 Technology Co., Ltd. Guangdong Fanzhou Information Technology Co., Ltd. (formerly: Sichuan 121,403.90 121,403.90 Huayi Jiakang Technology Co., Ltd.) Shenzhen Aimijiakang Technology Co., 1,585,761.09 -411,890.52 229 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Investee Opening balance Profit or loss of Changes in other Increase in the Decrease in the Cost method to equity investment recognised comprehensive investment investment method by the equity method income Ltd. (formerly: Sichuan Aimijiakang Technology Co., Ltd.) Beijing Konka Jingyuan Technology Co., 733,832.84 -30,129.42 Ltd. Chongqing Liangshan Enterprise 121,802.33 56,566.20 Management Co., Ltd. Shenzhen Kangxi Technology Innovation 967,323.92 58,982.15 Development Co., Ltd. Shandong Kangfei Intelligent Electrical 1,373,981.26 -1,128,069.63 Appliances Co., Ltd. Henan Kangfei Intelligent Electric 1,182,963.46 756,730.88 Appliance Co., Ltd. Guangdong Kangyuan Semiconductor Co., 12,777,082.28 -2,941,875.24 Ltd. Chongqing Kangyiqing Technology Co., 1,010,683.91 -376,964.82 Ltd. Shenzhen Kangying Semiconductor 13,254,520.44 -10,884,240.61 116,614.86 Technology Co., Ltd. KK Smartech Limited 1,641,595.45 -29,444.89 Chongqing Kang gian Photoelectric 11,493,032.21 -3,163,900.43 230 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Investee Opening balance Profit or loss of Changes in other Increase in the Decrease in the Cost method to equity investment recognised comprehensive investment investment method by the equity method income Technology Co., Ltd. Anhui Kangta Supply Chain 18,060,000.00 -803,400.15 Management Co., Ltd. Wuhan Kangtang Information Technology 26,654,950.30 -897,727.70 Co., Ltd. Sichuan Chengrui Real Estate Co., Ltd. 41,423,514.93 -9,714,522.86 Konka Industrial Development (Wuhan) 43,290,693.00 -1,156,461.11 Co., Ltd. Hefei KONSEMI Storage Technology Co., 180,146,610.27 -35,576,608.88 -7,740.71 Ltd. Xi'an Kang'an Intelligent Storage 6,000,000.00 Technology Co., Ltd. Sichuan Hongxinchen Real Estate 54,880,000.00 -945,404.40 Development Co., Ltd. Total 6,351,232,955.58 6,000,000.00 276,806,773.10 54,880,000.00 -167,423,944.75 -86,041.63 (Continued) Investee Changes in the current year Closing balance Closing balance of the provision for 231 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Cash dividends or Changes in other Provision set aside profits declared to Others equities for impairment be distributed Konka Ventures Development (Shenzhen) Co., Ltd. (formerly known as 5,004,579.62 "Konka Ventures Development (Shenzhen) Co., Ltd." ) Nanjing Zhihuiguang Information 2,019,287.36 Technology Research Institute Co., Ltd. Feidi Technology (Shenzhen) Co., Ltd. 10,706,907.72 Shenzhen Kangyue Enterprise Co., Ltd. 24,977,328.88 24,977,328.88 Foshan Zhu gian g Media Creative Park Cultural Development Co., Ltd. Kangkai Technology Service (Chengdu) 114,193.79 Co., Ltd. Pu giường Jiakang Technology Co, Ltd. 1,000,000.00 2,716,274.71 Chongqing Qingjia Electronics Co., Ltd. Shenzhen Jielunte Technology Co., Ltd. 941,486.48 94,917,575.00 Panxu Intelligence Co., Ltd. 48,686,477.11 Orient Excellent (Zhuhai) Asset 400,000.00 8,198,574.99 Management Co., Ltd. 232 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Closing balance of Investee Cash dividends or Closing balance the provision for Changes in other Provision set aside profits declared to Others impairment equities for impairment be distributed Dongfang Jiakang No.1 (Zhuhai) Private Equity Investment Fund (LP) (formerly: 338,089,300.42 Dongfang Konka No. 1 (Zhuhai) Private Equity Investment Fund (LP)) Tongxiang Wuzhen Kunyu Venture Capital Investment Co., Ltd. (formerly: 3,524,037.08 Tongxiang Wuzhen Kunyu Equity Investment Co., Ltd.) Shenzhen RF-Llink Technology Co., Ltd. 85,656,027.35 Anhui Kaikai Shijie E-commerce Co., 418,814,414.98 Ltd. Kunshan Kangsheng Investment 53,900,000.00 207,333,483.86 Development Co., Ltd. Chutian Dragon Co., Ltd. -413,895,137.87 Shanxi Silk Road Cloud Intelligent Tech 5,187,588.48 Co., Ltd. Shenzhen Kanghong xing Intelligent 12,660,222.73 Technology Co., Ltd. Shenzhen Zhongkang Beidou Technology Co., Ltd. (formerly named: Shenzhen Zhongbing Konka Technology 233 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Closing balance of Investee Cash dividends or Closing balance the provision for Changes in other Provision set aside profits declared to Others impairment equities for impairment be distributed Co., Ltd.) Shenzhen Yaode Technology Co., Ltd. 214,559,469.35 Wuhan Tianyuan Environmental 127,671,222.93 3,078,000.00 512,729,351.11 Protection Co., Ltd. Chuzhou Konka Technology Industry 39,335,548.57 Development Co., Ltd. Chuzhou Kangjin Health Industrial 239,037,618.98 Development Co., Ltd. Nantong Kang gian Technology Industrial Park Operations and Management Co., 107,310,029.86 Ltd. Chuzhou Kangxin Health Industry 180,752,809.79 Development Co., Ltd. Dongguan Guankang Yuhong Investment 501,408,938.92 Co., Ltd. Shenzhen Morsemi Semiconductor Technology Co., Ltd. Shandong Econ Technology Co., Ltd. -4,074,486.01 81,806,510.02 1,130,575,773.36 81,806,510.02 234 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Closing balance of Investee Cash dividends or Closing balance the provision for Changes in other Provision set aside profits declared to Others impairment equities for impairment be distributed Dongguan Kangjia New Materials 6,857,694.77 Technology Co., Ltd.. Chongqing E2info Technology Co., Ltd. -5,977,391.99 1,048,983,188.06 Yantai Kangyun Industrial Development 65,884,386.16 Co., Ltd. E3info (Hainan) Technology Co., Ltd. 30,715,678.97 Shenzhen Kangjia Jiapin Intelligent Electrical Apparatus Technology Co., 7,090,590.47 Ltd. Shenzhen KONKA E-display Co., Ltd. 85,057,438.63 Chongqing Yuanlv Benpao Real Estate 28,089,915.82 Co., Ltd. Shenzhen Kangpeng Digital Technology 1,770,021.01 Co., Ltd. Yantai Kangtang Construction 862,394.07 Development Co., Ltd. Dongguan Konka Smart Electronic 24,124,143.70 Technology Co., Ltd. 235 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Closing balance of Investee Cash dividends or Closing balance the provision for Changes in other Provision set aside profits declared to Others impairment equities for impairment be distributed Guangdong Fanzhou Information Technology Co., Ltd. (formerly: Sichuan Huayi Jiakang Technology Co., Ltd.) Shenzhen Aimijiakang Technology Co., Ltd. (formerly: Sichuan Aimijiakang 1,173,870.57 Technology Co., Ltd.) Beijing Konka Jingyuan Technology Co., 703,703.42 Ltd. Chongqing Liangshan Enterprise 178,368.53 Management Co., Ltd. Shenzhen Kangxi Technology Innovation 1,026,306.07 Development Co., Ltd. Shandong Kangfei Intelligent Electrical 245,911.63 Appliances Co., Ltd. Henan Kangfei Intelligent Electric 1,939,694.34 Appliance Co., Ltd. Guangdong Kangyuan Semiconductor 122,000.00 9,957,207.04 Co., Ltd. Chongqing Kangyiqing Technology Co., 633,719.09 Ltd. 236 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Closing balance of Investee Cash dividends or Closing balance the provision for Changes in other Provision set aside profits declared to Others impairment equities for impairment be distributed Shenzhen Kangying Semiconductor 16,852,760.53 19,339,655.22 Technology Co., Ltd. KK Smartech Limited 1,612,150.56 Chongqing Kang gian Photoelectric 8,329,131.78 Technology Co., Ltd. Anhui Kangta Supply Chain 17,256,599.85 Management Co., Ltd. Wuhan Kangtang Information 25,757,222.60 Technology Co., Ltd. Sichuan Chengrui Real Estate Co., Ltd. 31,708,992.07 Konka Industrial Development (Wuhan) 42,134,231.89 Co., Ltd. Hefei KONSEMI Storage Technology 44,092,024.98 188,654,285.66 Co., Ltd. Xi'an Kang'an Intelligent Storage 6,000,000.00 Technology Co., Ltd. Sichuan Hongxinchen Real Estate 53,934,595.60 Development Co., Ltd. 237 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Closing balance of Investee Cash dividends or Closing balance the provision for Changes in other Provision set aside profits declared to Others impairment equities for impairment be distributed Total 178,686,130.44 59,319,486.48 106,783,838.90 -413,895,137.87 5,566,483,863.29 419,659,558.33 Note 1: The above investees are all associates. Note 2: "Other" represents the conversion of long-term equity investments accounted for under the equity method to financial assets. 238 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 14. Other equity instrument investments 14.1 Other equity instrument investments Item Closing balance Opening balance Shenzhen Tianyilian Science & Technology Co., Ltd. Shenzhen Adopt Network Co., Ltd. Beijing Huyu Digital Technology Co., Ltd. (formerly: Beijing Aowei Mutual Entertainment 5,901,121.80 5,901,121.80 Technology Co., Ltd.) Feihong Electronics Co., Ltd. ZAEFI Shenzhen Chuangce Investment Development Co., Ltd. Shanlian Information Technology Engineering 1,860,809.20 1,860,809.20 Centre Shenzhen CIU Science & Technology Co., Ltd. 953,000.00 953,000.00 Shenzhen Digital TV National Engineering 7,726,405.16 7,726,405.16 Laboratory Co., Ltd. Shanghai National Engineering Research Centre 2,400,000.00 2,400,000.00 of Digital TV Co., Ltd. BOHUA UHD 5,000,001.00 5,000,001.00 Total 23,841,337.16 23,841,337.16 239 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 14.2 Investments in non-trading equity instruments in the current year Dividend Amount of other Reason for assigning to Reason for other income Accumulative Accumulative comprehensive measure in fair value of comprehensive Item recognised in gains losses income transferred to which changes included income transferred the current retained earnings other comprehensive income to retained earnings year Shenzhen Tianyilian Science & Technology Co., Long-term holding based on 4,800,000.00 Ltd. strategic purpose Long-term holding based on Shenzhen Adopt Network Co., Ltd. strategic purpose Beijing Huyu Digital Technology Co., Ltd. Long-term holding based on (formerly: Beijing Aowei Mutual Entertainment 98,878.20 strategic purpose Technology Co., Ltd.) Long-term holding based on Feihong Electronics Co., Ltd. 1,300,000.00 strategic purpose Long-term holding based on ZAEFI 100,000.00 strategic purpose Shenzhen Chuangce Investment Development Co., Long-term holding based on 485,000.00 Ltd. strategic purpose Shanlian Information Technology Engineering Long-term holding based on 3,139,190.80 Centre strategic purpose Long-term holding based on Shenzhen CIU Science & Technology Co., Ltd. 200,000.00 strategic purpose Shenzhen Digital TV National Engineering Long-term holding based on 1,273,594.84 Laboratory Co., Ltd. strategic purpose 240 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Dividend Amount of other Reason for assigning to Reason for other income Accumulative Accumulative comprehensive measure in fair value of comprehensive Item recognised in gains losses income transferred to which changes included income transferred the current retained earnings other comprehensive income to retained earnings year Shanghai National Engineering Research Centre of Long-term holding based on Digital TV Co., Ltd. strategic purpose Long-term holding based on BOHUA UHD strategic purpose Total 11,396,663.84 241 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 15. Other non-current financial assets Item Closing balance Opening balance China Asset Management-Jiayi Overseas Designated Plan 200,732,067.00 200,732,067.00 Tianjin Huacheng Property Development Co., Ltd. 1,000,000.00 1,000,000.00 Tianjin Property No. 8 Enterprise Management Partnership 28,540,777.26 28,540,777.26 (Limited Partnership) CCB Trust-Cai Die No. 6 Property Rights Trust Scheme 66,080,293.70 66,080,293.70 Daye Trust Co., Ltd. 100,000,000.00 100,000,000.00 Yibin OCT San gian g Properties Co., Ltd. 199,774,696.09 171,141,605.35 Yili Ecological Restoration Co., Ltd. 41,812,139.03 Kunshan Xinjia Emerging Industry Equity Investment Fund 231,190,200.00 233,834,173.06 Partnership (Limited Partnership) Tongxiang Wuzhen Jiayu Digital Economy Industry Equity 201,451,000.00 195,312,419.69 Investment Partnership (Limited Partnership) Yibin Kanghui Electronic Information Industry Equity Investment 60,292,000.00 67,706,235.45 Partnership (Limited Partnership) Chuzhou Jiachen Information Technology Consulting Service 59,700,013.59 59,700,013.59 Partnership (Limited Partnership) Yancheng Kangyan Information Industry Investment Partnership 162,937,428.56 167,230,693.52 (Limited Partnership) Chongqing Kangxin Equity Investment Fund Limited Partnership 155,691,200.00 146,160,043.51 (Limited Partnership) Shenzhen Kanghuijia Technology Co., Ltd. 7,684.53 10,137.30 Subtotal of equity investments 1,467,397,360.73 1,479,260,598.46 Chuzhou Huike Smart Household Appliances Industry Investment 626,244,139.25 Partnership (Limited Partnership) Ningbo Yuanqing No. 9 Investment Partnership 148,855,198.11 148,855,198.11 Shenzhen Beihu Technology Partnership (Limited Partnership) 59,735,232.88 58,000,000.00 Shanxi Kangmengrong Enterprise Management Consulting 9,163,411.30 9,163,411.30 Partnership (Limited Partnership) Nanjing Kangfeng Dejia Asset Management Partnership (Limited 100,000,000.00 100,000,000.00 Partnership) Shenzhen Gaohong Enterprise Consulting Management Partnership 109,739,999.99 100,000,000.00 (Limited Partnership) 242 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Closing balance Opening balance Shenzhen Zitang No.1 Enterprise Consulting Management 99,000,000.00 100,386,000.00 Partnership (Limited Partnership) Xi'an Bihuijia Enterprise Management Consulting Partnership 15,785,194.99 17,752,926.20 (Limited Partnership) Subtotal of debt investments 542,279,037.27 1,160,401,674.86 Total 2,009,676,398.00 2,639,662,273.32 16. Investment property (1) Investment properties measured at cost Item Land use right Properties and buildings Total I. Original carrying value 1. Opening balance 46,121,506.92 873,265,339.70 919,386,846.62 2. Increase in the current year 45,716,182.38 694,497,260.36 740,213,442.74 (1) External purchase (2) Fixed assets\construction in progress\transfer of 45,716,182.38 694,497,260.36 740,213,442.74 intangible assets 3. Decrease in the current year 9,651,872.39 9,651,872.39 (1) Disposal 9,651,872.39 9,651,872.39 (2) Other transfer out 4. Closing balance 91,837,689.30 1,558,110,727.67 1,649,948,416.97 II. The accumulative depreciation and accumulative amortisation 1. Opening balance 8,602,890.38 108,376,111.64 116,979,002.02 2. Increase in the current year 12,938,742.42 51,685,511.31 64,624,253.73 (1) Provision or amortisation 12,938,742.42 51,685,511.31 64,624,253.73 3. Decrease in the current year 1,881,562.65 1,881,562.65 (1) Disposal 1,881,562.65 1,881,562.65 (2) Other transfer out 243 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Land use right Properties and buildings Total 4. Closing balance 21,541,632.80 158,180,060.30 179,721,693.10 III. Provision for impairment 1. Opening balance 2. Increase in the current year (1) Provision 3. Decrease in the current year (1) Disposal (2) Other transfer out 4. Closing balance IV. Carrying value 1. Closing carrying value 70,296,056.50 1,399,930,667.37 1,470,226,723.87 2. Opening carrying value 37,518,616.54 764,889,228.06 802,407,844.60 (2) Impairment test of investment properties measured at cost No provision for impairment of investment properties was made during the Reporting Period. (3) Investment properties measured at fair value There were no investment properties measured at fair value of the Group. (4) Investment properties in the process of title certificate handling Reason that the certificate of Item Carrying value title was not completed In the process of project closure, Konka Standard Electronic Product project closure will not be 379,447,349.50 Plants Project in Sunning processed until the project is completed. Total 379,447,349.50 (5) Investment properties with restricted ownership or use rights Item Closing carrying value Reasons for the restriction Konka Guangming Technology Centre 585,984,804.04 Mortgage loan Total 585,984,804.04 244 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 17. Fixed assets Item Closing carrying value Opening carrying value Fixed assets 5,218,297,745.16 4,114,029,693.38 Liquidation of fixed assets Total 5,218,297,745.16 4,114,029,693.38 245 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 17.1 Fixed Assets ( 1 ) Fixed assets Properties and Machinery and Transport Item Electronic equipment Other equipment Total buildings equipment equipment I. Original carrying value 1. Opening balance 2,860,293,710.15 3,103,345,131.12 302,309,738.49 59,879,173.09 186,025,451.11 6,511,853,203.96 2. Increased amount of the 1,299,077,259.43 279,351,764.21 30,227,593.48 1,761,050.75 8,352,110.55 1,618,769,778.42 period (1) Purchase 325,596,840.93 139,864,293.96 20,346,382.12 1,760,819.64 7,190,109.12 494,758,445.77 (2) Transfer-in of 967,772,669.04 139,487,470.25 9,816,998.15 944,067.26 1,118,021,204.70 construction in progress (3) Increase through consolidation (4) Other transfer-in 5,707,749.46 64,213.21 231.11 217,934.17 5,990,127.95 3. Decreased amount of the 95,152,152.59 61,816,110.53 30,348,819.09 5,704,442.53 5,133,921.78 198,155,446.52 period (1) Disposal or write-off 19,526,320.70 60,265,701.84 30,004,311.36 5,704,442.53 5,062,497.96 120,563,274.39 (2) Decrease for loss of 246,216.18 28,066.87 274,283.05 controlling right (3) Other decreases 75,625,831.89 1,550,408.69 98,291.55 43,356.95 77,317,889.08 4. Ending balance 4,064,218,816.99 3,320,880,784.80 302,188,512.88 55,935,781.31 189,243,639.88 7,932,467,535.86 246 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Properties and Machinery and Transport Item Electronic equipment Other equipment Total buildings equipment equipment II. Accumulated depreciation 1. Opening balance 673,384,702.71 1,258,513,887.86 201,688,344.85 42,829,692.30 114,585,141.99 2,291,001,769.71 2. Increased amount of the 88,238,734.15 253,047,208.96 25,797,795.95 4,288,186.59 14,983,833.20 386,355,758.85 period (1) Provision 88,140,964.08 253,047,208.96 25,774,051.55 4,286,640.96 14,975,209.95 386,224,075.50 (2) Increase through consolidation (3) Other increase 97,770.07 23,744.40 1,545.63 8,623.25 131,683.35 3. Decreased amount of the 20,779,007.06 45,806,853.16 27,335,857.31 5,023,692.07 4,435,014.79 103,380,424.39 period (1) Disposal or write-off 8,277,772.35 44,360,911.18 27,123,276.68 5,023,692.07 4,421,359.72 89,207,012.00 (2) Decrease for loss of 142,275.35 10,096.45 152,371.80 controlling right (3) Other decreases 12,501,234.71 1,445,941.98 70,305.28 3,558.62 14,021,040.59 4. Ending balance 740,844,429.80 1,465,754,243.66 200,150,283.49 42,094,186.82 125,133,960.40 2,573,977,104.17 III. Provision for impairment 1. Opening balance 23,987,527.51 75,533,448.92 1,351,990.45 827,482.72 5,121,291.27 106,821,740.87 2. Increased amount of the 38,394,135.80 1,953,399.08 20,675.15 239,490.37 40,607,700.40 247 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Properties and Machinery and Transport Item Electronic equipment Other equipment Total buildings equipment equipment period (1) Provision 38,394,135.80 1,953,399.08 20,675.15 239,490.37 40,607,700.40 3. Decreased amount of the 6,667,685.91 515,589.11 6,712.58 46,767.14 7,236,754.74 period (1) Disposal or write-off 6,667,685.91 515,589.11 6,712.58 46,767.14 7,236,754.74 (2) Other decrease 4. Ending balance 23,987,527.51 107,259,898.81 2,789,800.42 841,445.29 5,314,014.50 140,192,686.53 IV. Carrying value 1. Ending carrying value 3,299,386,859.68 1,747,866,642.33 99,248,428.97 13,000,149.20 58,795,664.98 5,218,297,745.16 2. Opening carrying value 2,162,921,479.93 1,769,297,794.34 99,269,403.19 16,221,998.07 66,319,017.85 4,114,029,693.38 248 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) (2) List of temporarily idle fixed assets Original carrying Accumulated Provision for Item Carrying value value depreciation impairment Machinery and 817,733,189.57 405,918,829.25 87,442,687.20 324,371,673.12 equipment Electronic 8,275,226.50 6,047,459.25 111,084.51 2,116,682.74 equipment Transport 3,887,229.49 3,603,831.64 20,675.15 262,722.70 equipment Properties and 264,495,526.66 140,592,457.98 7,899,900.07 116,003,168.61 buildings Other equipment 1,530,288.55 860,946.31 286,304.40 383,037.84 Total 1,095,921,460.77 557,023,524.43 95,760,651.33 443,137,285.01 (3) Fixed assets leased out through operating leases Item Closing carrying value Electronic equipment 260,911.84 Machinery and equipment 23,973,121.72 Other equipment 384,458.99 Transport equipment 13,785.92 Total 24,632,278.47 (4) Details of fixed assets failed to accomplish certification of property Reason that the Provision Original carrying Accumulated certificate Item for Net book value value depreciation of title was impairment not completed Being Ankang's plants 603,604,487.36 33,087,555.67 570,516,931.69 handled Housing and buildings Being 453,857,134.27 9,842,056.02 444,015,078.25 of Chongqing Konka handled Fenggang Konka Intelligent Colour TV Being 425,011,644.82 3,984,484.17 421,027,160.65 Project (Part I) handled property Frestec Smart Home Being 404,782,206.92 867,390.46 403,914,816.46 properties and handled 249 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Reason that the Provision Original carrying Accumulated certificate Item for Net book value value depreciation of title was impairment not completed buildings Yikang Building Being 76,610,752.33 42,076,014.80 34,534,737.53 property handled Boluo Printing Plate Being 51,746,373.49 831,638.15 50,914,735.34 Phase III Plant handled Jingyuan Building Being 7,700,000.00 4,244,612.05 3,455,387.95 property handled Standard electronic Being product plants in 1,544,085.19 72,504.88 1,471,580.31 handled Sunning Total 2,024,856,684.38 95,006,256.20 1,929,850,428.18 250 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) (5) Impairment test of fixed assets During the Reporting Period, the Company conducted impairment tests on the fixed assets of Anhui Konka Electronic Co., Ltd., Suining Konka Smart Technology Co., Ltd., GuangDong XingDa HongYe Electronic Co., Ltd., Henan Frestec Refrigeration Appliance Co., Ltd. and Jiangxi Konka New Material Technology Co., Ltd., determined their recoverable amounts based on the net fair value less disposal costs, and recognised an impairment loss on assets of RMB40,607,700.4. Recoverable Impairment Determination of fair value Key Item Carrying value Basis for determining key parameters amount amount and disposal costs parameters 1. Instruments and machinery 1. The recovery unit price is determined by equipment: fair value = recovery Recovery unit the net price of disposal of waste materials unit price × equipment weight; price, (dismantling and transportation costs are all Disposal costs = brokerage equipment borne by the recovery unit); 2. The Anhui Konka electronic services weight, 1,952,063.48 53,097.35 1,898,966.13 equipment weight is weighed on-site; 3. The equipment quantity of 2. Electronic equipment: fair quantity of the equipment is determined by an equipment, value = recovery unit price × on-site inventory; 4. Intermediary service brokerage quantity of equipment; Disposal fees mainly include appraisal fees and services costs = brokerage services intermediary fees for trading platforms. 1. The recovery unit price is determined by the net price of disposal of waste materials Fair value = recovery unit price Recovery unit (dismantling and transportation costs are all Automatic production × quantity of equipment; price, quantity born by the recovery unit); 2. The quantity of line of Suining Konka 9,851,152.18 6,896,106.95 2,955,045.23 of equipment, Disposal costs = intermediary the equipment is determined by an on-site Smart intermediary service fees inventory; 3. Intermediary service fees service fees include mainly appraisal fees and intermediary fees for trading platforms. 1. The recovery unit price is determined by the net price of disposal of waste materials Recovery unit Fair value = recovery unit price (dismantling and transportation costs are all price, quantity Machinery equipment of × quantity of equipment; born by the recovery unit); 2. The quantity of 1,973,454.42 392,931.04 1,580,523.38 of equipment, XingDa HongYe Disposal costs = brokerage the equipment is determined by an on-site brokerage services inventory; 3. Intermediary service fees services include mainly appraisal fees and intermediary fees for trading platforms. 251 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Recoverable Impairment Determination of fair value Key Item Carrying value Basis for determining key parameters amount amount and disposal costs parameters 1. Replacement costs: The costs are determined mainly by directly requesting quotations from dealers or manufacturers, or by referring to price lists on website Replacement platforms; 2. Comprehensive newness rate: It costs, take into account various factors such as the comprehensive current technical status of the equipment, newness rate, tangible and intangible losses; 3. Economic Fair value = replacement costs x Economic depreciation rate = (1 - (equipment is comprehensive newness rate x (1 depreciation expected to be utilized production capacity / - Economic depreciation rate); rate, equipment original design production Machinery equipment of 7,949,779.02 2,857,105.30 5,092,673.72 Disposal costs = dismantling dismantling capacity) ^ economies of scale index) × Frestec Refrigeration fees and transportation and fees, 100%. Economy of scale index that is miscellaneous fees + transportation empirical data, take the value of the intermediary service fees and processing industry is generally 0.7; 4. miscellaneous Dismantling fees and transportation and fees, miscellaneous fees: They are determined by intermediary referring to the Handbook of Commonly service fees Used Methods and Parameters for Asset Appraisal and empirical data; 5. Intermediary service fees: The fees mainly comprises appraisal fees, and the intermediary fees for trading platforms. Replacement 1. Replacement costs: The costs are costs, determined mainly by directly requesting Fair value = replacement costs x comprehensive quotations from dealers or manufacturers, or comprehensive newness rate x (1 newness rate, by referring to price lists on website - Economic depreciation rate); Production line of Economic platforms; 2. Comprehensive newness rate: It 449,815,738.10 420,735,246.16 29,080,491.94 Disposal costs = dismantling depreciation take into account various factors such as the Jiangxi Konka fees and transportation and rate, current technical status of the equipment, miscellaneous fees + dismantling tangible and intangible losses; 3. Economic intermediary service fees fees, depreciation rate = (1 - (equipment is transportation expected to be utilized production capacity / and equipment original design production 252 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Recoverable Impairment Determination of fair value Key Item Carrying value Basis for determining key parameters amount amount and disposal costs parameters miscellaneous capacity) ^ economies of scale index) × fees, 100%. Economy of scale index that is intermediary empirical data, take the value of the service fees processing industry is generally 0.7; 4. Dismantling fees and transportation and miscellaneous fees: They are determined by referring to the Handbook of Commonly Used Methods and Parameters for Asset Appraisal and empirical data; 5. Intermediary service fees: The fees mainly comprises appraisal fees, and the intermediary fees for trading platforms. Total 471,542,187.20 430,934,486.80 40,607,700.40 - - - 253 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) (6) Fixed Assets with Restricted Ownership or Use Right Item Closing carrying value Reasons for the restriction Anhui Konka's buildings 601,293,059.60 Mortgage loan Housing and buildings of Chongqing 337,145,406.93 Mortgage loan Konka Properties and buildings of Shanxi 321,704,287.16 Mortgage loan Konka Intelligent Housing and buildings of Anhui 140,196,525.72 Mortgage loan Tong giường Housing and buildings of Frestec 81,616,033.52 As collateral for finance lease Refrigeration Machinery equipment of XingDa 67,632,465.17 As collateral for finance lease HongYe Buildings of Konka Group 63,063,516.77 Mortgage loan Housing and buildings of Jiangsu 35,470,487.60 Mortgage loan Konka Intelligent Housing and buildings of XingDa 30,836,709.44 Mortgage loan HongYe Machinery equipment of Xinfeng 8,137,181.77 As collateral for finance lease Microcrystalline Housing and buildings of Jiangxi Original shareholder guarantee 2,506,636.50 Konka mortgage Total 1,689,602,310.18 254 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 18. Construction in progress (1) Construction in progress Closing balance Opening balance Item Provision for Provision for Book balance Carrying value Book balance Carrying value impairment impairment Chongqing Konka Semiconductor 349,269.02 349,269.02 197,885,487.81 197,885,487.81 Optoelectronics Park Project Guangming Project 466,051,847.89 466,051,847.89 Jiangxi High-permeability Crystalisation 246,576,748.57 46,755,148.57 199,821,600.00 246,576,748.57 20,068,730.37 226,508,018.20 Kiln Dongguan Konka New Industrial Park 398,018,288.30 398,018,288.30 Construction of Suining Electronic 177,516,258.23 177,516,258.23 221,981,375.38 221,981,375.38 Industrial Park Workshops Frestec Smart Home Appliances Park 994,166.33 994,166.33 113,146,458.03 113,146,458.03 Suining Konka Hongye Plant Decoration 76,141,438.86 76,141,438.86 1,955,898.52 1,955,898.52 Project Dishwasher Project of Jiangxi Konka 55,685,802.09 55,685,802.09 1,166,575.23 1,166,575.23 Production Line Renovation Project of 85,861,185.36 12,518,073.84 73,343,111.52 84,917,611.92 647,975.66 84,269,636.26 Jiangxi Konka Other projects 319,798,751.76 42,750,899.13 277,047,852.63 322,694,187.33 43,316,395.88 279,377,791.45 255 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Closing balance Opening balance Item Provision for Provision for Book balance Carrying value Book balance Carrying value impairment impairment Total 962,923,620.22 102,024,121.54 860,899,498.68 2,054,394,478.98 64,033,101.91 1,990,361,377.07 (2) Changes in major projects under construction in the current year Decrease in the current year Name of item Opening balance Increase in the current year Closing balance Transferred to long-term Other decreases assets Chongqing Konka Semiconductor 197,885,487.81 1,518,206.33 198,416,543.64 637,881.48 349,269.02 Optoelectronics Park Project Guangming Project 466,051,847.89 6,504,273.24 472,556,121.13 Jiangxi High-permeability Crystalisation 246,576,748.57 246,576,748.57 Kiln Dongguan Konka New Industrial Park 398,018,288.30 30,083,029.02 428,101,317.32 Construction of Suining Electronic Industrial 221,981,375.38 75,225,831.87 119,690,949.02 177,516,258.23 Park Workshops Frestec Smart Home Appliances Park 113,146,458.03 285,925,118.68 398,077,410.38 994,166.33 Total 1,643,660,205.98 399,256,459.14 1,616,842,341.49 637,881.48 425,436,442.15 256 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) (Continued) Proportion Estimated Of which: the Capitalisation estimated of Engineering Accumulated amount number amount of the rate of the Name of item the project Schedule of interest Source of fund (RMB100 capitalised interests interests in the accumulative (%) capitalisation million) in the current year current year (%) input (%) Chongqing Konka Semiconductor 7.57 95.00 95.00 32,272.52 32,272.52 Self-owned fund and bank loans Optoelectronics Park Project Guangming Project 5.20 100.00 100.00 24,439,935.22 2,111,837.71 1.43 Self-owned fund and project loans Jiangxi High-permeability Crystalisation 3.40 72.52 72.52 32,249,994.16 Bank loans Kiln Dongguan Konka New Industrial Park 5.97 71.69 71.69 23,936,481.59 8,669,809.56 4.59 Bank loans Construction of Suining Electronic Industrial 7.34 95.00 95.00 Self-owned fund Park Workshops Self-owned funds, internal entrusted Frestec Smart Home Appliances Park 4.88 100.00 100.00 14,134,622.62 7,347,326.08 3.73 loans, bank loans Total 94,793,306.11 18,161,245.87 (3) Provision set aside for impairment of construction in progress in the current year Decrease in the current Category Opening balance Increase in the current year Closing balance Reason for withdrawal year Jiangxi High-permeability Failure to achieve 20,068,730.37 26,686,418.20 46,755,148.57 Crystalisation Kiln serviceable conditions 257 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Decrease in the current Category Opening balance Increase in the current year Closing balance Reason for withdrawal year Jiangxi High Transparent Failure to achieve 36,181,822.63 36,181,822.63 Nano Line 1 Project serviceable conditions Henan Civil Construction Failure to achieve 3,703,547.42 3,703,547.42 Project serviceable conditions Construction in progress Konka Huanjia is equipment not environmental equipment 3,103,138.94 3,103,138.94 included in fixed assets, which has been sold. Failure to achieve Other projects 975,862.55 14,735,793.62 328,053.25 15,383,602.92 serviceable conditions Total 64,033,101.91 41,422,211.82 3,431,192.19 102,024,121.54 - (4) Impairment test of construction in progress During the Reporting Period, the Company conducted an impairment test on the construction in progress of Jiangxi Konka New Material Technology Co., Ltd., determined its recoverable amounts based on the present value of the net fair value less disposal costs, and recognised an impairment loss on assets of RMB40,655,031.97. Determination of fair Item Carrying value Recoverable amount Impairment amount value and disposal Key parameters Basis for determining key parameters costs Economic depreciation rate = (1 - (capacity of Production Recoverable amount = equipment expected to be utilized / original Line replacement costs x (1 - Economic design capacity of equipment) ^ economy of Renovation 85,213,453.73 73,343,355.55 11,870,098.18 economic depreciation depreciation rate scale index) x 100%. Economy of scale index, Project of rate) - disposal costs i.e., empirical data, takes the value of 0.7 for Jiangxi Konka the processing industry in general. 258 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Determination of fair Item Carrying value Recoverable amount Impairment amount value and disposal Key parameters Basis for determining key parameters costs Economic depreciation rate = (1 - (capacity of Jiangxi High- Recoverable amount = equipment expected to be utilized / original permeability replacement costs x (1 - Economic design capacity of equipment) ^ economy of 226,508,018.20 199,821,600.00 26,686,418.20 Crystalisation economic depreciation depreciation rate scale index) x 100%. Economy of scale index, Kiln rate) - disposal costs i.e., empirical data, takes the value of 0.7 for the processing industry in general. Economic depreciation rate = (1 - (capacity of Other projects Recoverable amount = equipment expected to be utilized / original of Xinfeng and replacement costs x (1 - Economic design capacity of equipment) ^ economy of 39,785,413.78 37,686,898.19 2,098,515.59 Jiangxi High- economic depreciation depreciation rate scale index) x 100%. Economy of scale index, permeability rate) - disposal costs i.e., empirical data, takes the value of 0.7 for the processing industry in general. 1. The market quotation is determined by the net price of disposal of waste materials Fair value = market (dismantling and transportation costs are all Market quotation, quotation x quantity of borne by the recovery unit); 2. The quantity of Others 944,171.00 176,991.15 767,179.85 quantity of equipment - disposal the equipment is determined by an on-site equipment costs inventory; 3. Intermediary service fees include mainly appraisal fees and intermediary fees for trading platforms. Total 352,451,056.71 311,028,844.89 41,422,211.82 - - - 259 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 19. Right-of-use assets (1) Right-of-use assets Electronic Transport Item Properties and buildings Total equipment equipment I. Original carrying value 1. Opening balance 105,879,545.84 243,493.34 106,123,039.18 2. Increase in the 200,687,422.05 35,857.18 200,723,279.23 current year (1) Rent 200,618,894.31 35,857.18 200,654,751.49 (2) Others 68,527.74 68,527.74 3. Decrease in the 28,467,652.05 28,467,652.05 current year (1) Decrease for loss of controlling right (2) Others 28,467,652.05 28,467,652.05 4. Closing balance 278,099,315.84 279,350.52 278,378,666.36 II. Accumulated depreciation 1. Opening balance 56,047,009.73 56,190.77 56,103,200.50 2. Increase in the 42,829,336.65 58,663.68 42,888,000.33 current year (1) Provision 42,810,227.72 58,663.68 42,868,891.40 (2) Others 19,108.93 19,108.93 3. Decrease in the 17,666,957.64 17,666,957.64 current year (1) Decrease for loss of controlling right (2) Others 17,666,957.64 17,666,957.64 4. Closing balance 81,209,388.74 114,854.45 81,324,243.19 III. Provision for impairment 1. Opening balance 260 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Electronic Transport Item Properties and buildings Total equipment equipment 2. Increase in the current year (1) Provision 3. Decrease in the current year (1) Disposal 4. Closing balance IV. Carrying value 1. Closing carrying 196,889,927.10 164,496.07 197,054,423.17 value 2. Opening 49,832,536.11 187,302.57 50,019,838.68 carrying value Note: Other decreases in original value and accumulated depreciation are mainly due to lease expiration. 261 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 20. Intangible assets (1) List of intangible assets Intellectual property Item Land use right Right to use Total Patent and know- Trademark right Franchise rights software and Subtotal how others I. Original carrying value 1. Opening balance 920,331,792.11 72,197,456.33 116,715,865.54 168,553,796.14 166,134,944.42 523,602,062.43 1,443,933,854.54 2. Increased amount 122,691,321.95 18,779,386.33 13,146,791.68 31,926,178.01 154,617,499.96 of the period (1) Purchase 122,503,853.21 7,057,234.54 7,057,234.54 129,561,087.75 (2) Transfer-in of construction in 8,245.09 18,779,386.33 6,089,557.14 24,868,943.47 24,877,188.56 progress (3) Other reasons 179,223.65 179,223.65 3. Decreased amount 156,667,052.15 18,240.10 1,633,088.47 1,651,328.57 158,318,380.72 of the period (1) Disposal 25,524,869.53 18,240.10 1,501,672.54 1,519,912.64 27,044,782.17 262 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) (2) Decrease for loss 17,493,200.24 17,493,200.24 of controlling right (3) Decrease for other 113,648,982.38 131,415.93 131,415.93 113,780,398.31 reasons 4. Ending balance 886,356,061.91 72,197,456.33 116,697,625.44 187,333,182.47 177,648,647.63 553,876,911.87 1,440,232,973.78 II. Accumulated amortisation 1. Opening balance 99,146,643.20 19,252,110.49 71,318,420.60 1,560,683.29 90,172,768.07 182,303,982.45 281,450,625.65 2. Increased amount 18,108,965.88 4,163,515.95 399,471.81 10,160,632.33 14,842,731.26 29,566,351.35 47,675,317.23 of the period (1) Provision 18,108,965.88 4,163,515.95 399,471.81 10,160,632.33 14,842,731.26 29,566,351.35 47,675,317.23 (2) Other increases 3. Decreased amount 20,531,435.34 18,240.10 1,472,830.62 1,491,070.72 22,022,506.06 of the period (1) Disposal 4,582,759.52 1,441,881.38 1,441,881.38 6,024,640.90 (2) Decrease for loss 553,951.33 553,951.33 of controlling right (3) Decrease for other 15,394,724.49 18,240.10 30,949.24 49,189.34 15,443,913.83 reasons 263 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 4. Ending balance 96,724,173.74 23,415,626.44 71,699,652.31 11,721,315.62 103,542,668.71 210,379,263.08 307,103,436.82 III. Provision for impairment 1. Opening balance 564,705.88 44,943,521.62 235,294.12 45,743,521.62 45,743,521.62 2. Increased amount of the period (1) Provision (2) Increase in business combinations 3. Decreased amount of the period (1) Disposal (2) Decrease for loss of controlling right 4. Ending balance 564,705.88 44,943,521.62 235,294.12 45,743,521.62 45,743,521.62 IV. Carrying value 1. Ending carrying 789,631,888.17 48,217,124.01 54,451.51 175,611,866.85 73,870,684.80 297,754,127.17 1,087,386,015.34 value 264 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 2. Opening carrying 821,185,148.91 52,380,639.96 453,923.32 166,993,112.85 75,726,882.23 295,554,558.36 1,116,739,707.27 value Note: There was no impairment of the Group's intangible assets during the Reporting Period. 265 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) (2) Land use right with certificate of title uncompleted The Group did not have land use rights for which no title deeds had been issued. (3) Significant intangible assets Remaining amortisation period Item Closing carrying value (year) Land use right of Dongguan Konka 185,832,462.67 45.67 Concessions of Yibin Konka 175,611,866.85 16.83 Land use right of Frestec Smart Home 90,267,954.17 46.75 Technology Land usage right of Frestec Refrigeration 63,840,404.52 32.75 Total 515,552,688.21 (4) Intangible assets with restricted ownership or using right Item Closing carrying value Reasons for the restriction Land use right of Dongguan Konka 185,832,462.67 Mortgage loan Land use right of Shanxi Konka Intelligent 121,439,312.85 Mortgage loan Land use right of Frestec Smart Home 90,267,954.17 Mortgage loan Technology Land usage right of Frestec Refrigeration 63,840,404.52 As collateral for finance lease Land use right of Anhui Konka 53,873,716.00 Mortgage loan Land use right of Chongqing Konka 44,585,522.54 Mortgage loan Land use right of Anhui Tong giường 17,455,478.16 Mortgage loan Land use right of Jiangsu Konka 13,746,913.56 Mortgage loan Land use right of XingDa HongYe 13,112,683.07 Mortgage loan Original shareholder guarantee Land use right of Jiangxi Konka 12,096,157.01 mortgage Land use right of Konka Guangming 4,343,453.05 Mortgage loan Total 620,594,057.60 266 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 21. Goodwill (1) Original carrying value of goodwill Increase in the current Decrease in the year current year Opening Investee Closing balance balance Formed through business Others Disposal Others combinations Jiangxi Konka 340,111,933.01 340,111,933.01 XingDa 44,156,682.25 44,156,682.25 HongYe Total 384,268,615.26 384,268,615.26 (2) Provision for goodwill impairment Increase in the current Decrease in the year current year Investee Opening balance Closing balance Provision Others Disposal Others Jiangxi Konka 340,111,933.01 340,111,933.01 XingDa 21,959,947.14 21,959,947.14 HongYe Total 362,071,880.15 362,071,880.15 (3) Information on the asset group or the combination of asset groups of the goodwill Composition and basis of the Whether it is consistent with the Name asset group or combination of previous year asset groups It is a group of assets related to goodwill consisting of all operating tangible assets and recognizable intangible assets of the corresponding subsidiary's main business as reflected in its balance Asset group of XingDa HongYe sheet (excluding working capital Yes and non-operating assets), based on whether or not the major cash inflows generated by the asset group are independent of those generated by other assets or the asset group. (4) Specific determination method for recoverable amount The Company's management performed an impairment test of goodwill at the end of the year, and recognised XingDa HongYe as a whole as a single asset group, which is consistent with prior years. The Company uses the present value of estimated future cash flows to calculate the recoverable 267 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) amount of an asset group. Future cash flows are determined based on the financial budgets approved by management for the years 2024 through 2029 and using a discount rate of 12.88%. The cash flows of XingDa HongYe for more than six years are calculated on the basis of a growth rate of 0%. The Company engaged an appraisal institution, Shenzhen Pengxin Asset Appraisal Land and Real Estate Appraisal Co., Ltd., to conduct an appraisal of the asset group containing goodwill of XingDa HongYe by adopting the income approach, using the present value of the estimated future cash flows of the assets of the asset group as its recoverable amount. The appraisal institution issued on 26 February 2024 the P.X.Z.P.B.Z. [2024] No. S033 Asset Appraisal Report on the Recoverable Amount of the Asset Group Containing Goodwill Formed by the Merger and Acquisition of GuangDong XingDa HongYe Electronic Co., Ltd. in Relation to the Goodwill Impairment Test to be Conducted by Konka Group Co., Ltd., which takes 31 December 2023 as the appraisal base date. The present value of the asset group of XingDa HongYe as at the appraisal date amounted to RMB257,920,000, and the book value of the asset group adjusted to its fair value (including the goodwill as a whole) was RMB255,359,800,000, of which the carrying value of goodwill (inclusive of minority shareholders) amounted to RMB43,523,000. Therefore, XingDa HongYe had been tested for impairment of goodwill and no impairment of goodwill existed in the current year. As of the Reporting Date, XingDa HongYe had accumulated goodwill impairment of approximately RMB21,959,900,000. 22.Long-term deferred expenses Other Increase in the Amortisation in decreases in Item Opening balance Closing balance current year the current year the current year Decoration 263,367,218.24 176,711,718.86 68,569,296.13 1,120,704.09 370,388,936.88 expenses Shoppe 18,787,080.49 20,632,263.63 13,765,981.11 678,887.63 24,974,475.38 expense Others 105,155,204.34 63,771,326.63 45,041,486.17 329,233.35 123,555,811.45 Total 387,309,503.07 261,115,309.12 127,376,763.41 2,128,825.07 518,919,223.71 23.Deferred Income Tax Assets/Deferred Income Tax Liabilities ( 1 ) Deferred tax assets that have not been offset Closing balance Opening balance Item Deductible Deferred tax Deductible Deferred tax temporary temporary differences Assets differences Assets Deductible 3,747,584,829.70 794,363,411.92 3,446,211,696.71 710,037,893.08 losses Provision for asset 1,879,389,407.11 407,751,765.55 1,665,450,141.63 364,146,193.07 impairment Deferred 167,691,056.33 36,766,230.50 90,355,036.00 22,296,259.01 revenue 268 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Closing balance Opening balance Item Deductible Deferred tax Deductible Deferred tax temporary temporary differences Assets differences Assets Accrued 262,522,401.07 58,732,850.29 208,346,464.01 49,058,992.22 expenses Unrealised internal sales 55,653,196.64 13,913,299.16 62,006,060.41 15,501,515.10 profits Lease liabilities 207,847,769.62 50,208,319.90 37,349,686.00 6,951,620.03 Others 279,982,155.72 64,838,104.84 134,840,920.33 29,413,898.14 Total 6,600,670,816.19 1,426,573,982.16 5,644,560,005.09 1,197,406,370.65 ( 2 ) Deferred tax liabilities that have not been offset Closing balance Opening balance Item Deferred tax Deferred tax Taxable temporary Taxable temporary differences liabilities differences liabilities Estimated added value of 154,693,540.82 37,285,533.12 193,084,308.55 41,509,033.61 assets not under the same control Prepaid interest 37,541,390.08 9,385,347.52 46,965,768.40 11,741,442.10 Accelerated depreciation of 3,005,493.04 608,518.82 4,406,228.55 1,376,446.54 fixed assets Financial assets at fair value 327,802,549.12 81,950,637.29 98,900,582.49 24,725,145.63 through profit or loss Right-of-use 195,220,008.99 48,074,535.52 30,800,411.02 5,891,361.34 assets Others 47,153,970.40 7,721,593.00 42,438,733.89 10,183,869.09 Total 765,416,952.45 185,026,165.27 416,596,032.90 95,427,298.31 ( 3 ) Breakdown of unrecognised deferred tax assets Item Closing balance Opening balance Deductible losses 3,693,212,186.74 2,114,844,242.75 269 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Closing balance Opening balance Deductible temporary differences 4,173,904,666.60 2,967,427,358.07 Total 7,867,116,853.34 5,082,271,600.82 ( 4 ) Deductible losses of unrecognised deferred tax assets matured/will mature in the following year Year Closing balance Opening balance Notes 2023 134,203,193.22 2024 175,414,641.28 92,292,924.99 2025 464,500,932.68 136,655,028.18 2026 224,104,387.87 263,654,830.43 2027 110,289,035.04 1,488,038,265.93 2028 and following years 2,718,903,189.87 Total 3,693,212,186.74 2,114,844,242.75 - 24. Other non-current assets Closing balance Item Provision for Book balance Carrying value impairment Prepayment for land-purchase 1,029,317,896.04 1,029,317,896.04 Prepayment for construction, equipment 219,010,910.12 219,010,910.12 and other long-term assets Total 1,248,328,806.16 1,248,328,806.16 (Continued) Opening balance Item Provision for Book balance Carrying value impairment Prepayment for land-purchase 1,459,111,732.63 1,459,111,732.63 Prepayment for construction, equipment 251,133,645.63 251,133,645.63 and other long-term assets Total 1,710,245,378.26 1,710,245,378.26 25. Assets with restricted ownership or use rights Item End of the year 270 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Type of Book balance Carrying value Restriction details restriction Among them, RMB384,011,696.60 is margin deposit, pledge is used for borrowing or issuing bank Margins, Monetary acceptance, 831,575,227.47 831,575,227.47 pledges, time assets RMB226,611,500.00 is time deposits deposit that cannot be withdrawn in advance; RMB220,952,030.87 is restricted due to other reasons. Accounts 2,527,314.22 2,474,071.67 Pledge Pledge loan receivable Notes They are pledged for the 209,288,446.67 209,288,446.67 Pledge receivable issuance of bank acceptance Carrying value of inventories seized as a result of the minority shareholder case of a subsidiary was Seizure, Inventory 601,395,411.05 599,475,045.44 RMB49,679,547.48, and the mortgage Company did not waive claims; year-end book value of inventory used for mortgage loans was RMB549,795,497.96. Investment 634,578,011.63 585,984,804.04 Mortgage Mortgage loan property Mortgage for finance lease, mortgage loan, mortgage Fixed assets 2,003,558,346.93 1,689,602,310.18 Mortgage guaranteed by the original shareholder Mortgage for finance lease, Intangible mortgage loan, mortgage 687,667,571.97 620,594,057.60 Mortgage assets guaranteed by the original shareholder Construction 40,629,663.23 40,629,663.23 Mortgage Mortgage loan in progress Total 5,011,219,993.17 4,579,623,626.30 - - (Continued) Beginning of the year Item Type of Book balance Carrying value Restriction details restriction Margins, Among them, Monetary RMB435,167,024.52 is margin 526,183,479.81 526,183,479.81 pledges, time assets deposit, pledge is used for deposits borrowing or issuing bank 271 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Beginning of the year Item Type of Book balance Carrying value Restriction details restriction acceptance, RMB305,405.41 is financial supervision account fund; RMB69,800,000.00 is time deposit that cannot be withdrawn in advance; RMB20,911,049.88 is restricted due to other reasons. Notes Pledge for making out an 504,958,051.41 504,958,051.41 Pledge receivable invoice Affected by the case of the minority shareholder of the subsidiary, the inventory was Inventory 201,747,758.47 49,679,547.48 Seizure wrongly seized, and the company did not give up the claim. Investment 104,066,818.20 104,066,818.20 Mortgage Mortgage loan property Mortgage for billing, mortgage for finance lease, mortgage Fixed assets 1,899,311,066.39 1,437,778,232.95 Mortgage loan, mortgage guaranteed by the original shareholder Mortgage loan, mortgage for Intangible finance lease, mortgage 557,863,536.11 512,162,337.46 Mortgage assets guaranteed by the original shareholder Construction 268,783,371.35 229,757,971.08 Mortgage As collateral for finance lease in progress Total 4,062,914,081.74 3,364,586,438.39 - - 26. Short-term loans ( 1 ) Classification of short-term loans Type of borrowings Closing balance Opening balance Notes Unsecured loan 4,741,431,032.21 5,252,631,775.26 Guaranteed loan 1,374,378,896.71 1,953,423,601.39 ①②③④ Mortgage loan 274,782,127.35 373,503,928.32 ⑤⑥⑦⑧ Total 6,390,592,056.27 7,579,559,304.97 ① The Company provides joint and several liability guarantee at the maximum amount for the short-term borrowings totaling RMB909,577,438.35 to its subsidiaries Yibin Smart, Anhui Konka, Dongguan Konka, Jiangxi Konka, Jiangxi High-permeability Substrate, Xinfeng Microcrystalline, 272 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Anhui Tong giường, Boluo Precision, Konka Xinyun, Electronic Technology. ② The Company has obtained short-term borrowings amounting to RMB410,486,597.23 from Shenzhen Chegongmiao Sub-branch of China Everbright Bank Co., Ltd., for which the Company's subsidiary Electronics Technology provides joint and several liability guarantee at the maximum amount. ③ The Company's subsidiary Ningbo Khr Electric Appliance Co., Ltd. has obtained short-term borrowings amounting to RMB50,364,861.13 from Cixi Branch of Bank of China Limited, for which the Company and Korea Electric Group Co., Ltd. provide joint and several liability guarantee at the proportion of 3:2, respectively. ④ The Company's subsidiary Konka Ventures has obtained short-term borrowings amounting to RMB3,950,000 from Shenzhen Branch of Bank of Hangzhou Co., Ltd., for which Shenzhen Qianhai Datang Technology Co., Ltd. provides general guarantee. ⑤ The Company's subsidiary Anhui Konka has obtained short-term borrowings amounting to RMB120,736,113.45 from Chuzhou Branch of Bank of China Limited, for which it provides fixed assets of a carrying value of RMB414,886,007.46 and land use rights of a carrying value of RMB35,866,497.33 as mortgage. ⑥ The Company's subsidiary XingDa HongYe has obtained short-term borrowings amounting to RMB94,095,305.57 from Fusha Sub-branch of Zhongshan Rural Commercial Bank, for which it provides properties and buildings of a carrying value of RMB30,836,709.44 and land use rights of a carrying value of RMB13,112,683.07 as mortgage and certificates of time deposit with a carrying value of RMB19,800,000.00 as pledge, and Hu Zehong provides joint and several liability guarantee. ⑦The Company's subsidiary Jiangsu Konka Smart has obtained short-term borrowings amounting to RMB30,040,791.66 from Changzhou Branch of Zheshang Bank Co., Ltd., for which it provides properties and buildings of a carrying value of RMB35,470,487.60 and land use rights of a carrying value of RMB13,746,913.56 as mortgage. ⑧The Company's subsidiary Anhui Tong giường has obtained short-term borrowings amounting to RMB29,909,916.67 from Hefei Branch of Zheshang Bank Co., Ltd., for which it provides properties and buildings of a carrying value of RMB140,196,525.72 and land use rights of a carrying value of RMB17,455,478.16 as mortgage. (2) Outstanding Short-term borrowings overdue There were no outstanding short-term borrowings overdue at the end of the current year. 27. Notes payable Type of note Closing balance Opening balance Banker's acceptance 786,833,882.36 881,426,104.13 Commercial acceptance draft 203,649,044.84 173,147,717.91 Total 990,482,927.20 1,054,573,822.04 28. Accounts payable Item Closing balance Opening balance Within one year 2,002,263,324.19 2,330,698,958.02 273 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Closing balance Opening balance One to two years 448,060,250.16 155,636,729.60 Two to three years 107,371,417.74 89,142,446.14 Over three years 169,136,683.88 84,468,429.17 Total 2,726,831,675.97 2,659,946,562.93 29. Accounts received in advance Type of note Closing balance Opening balance Rents 825.69 Total 825.69 30. Contract liabilities ( 1 ) Contract liabilities Item Closing balance Opening balance Sales advances received 527,975,160.12 601,044,358.35 Total 527,975,160.12 601,044,358.35 Note: Contractual liabilities over one year are detailed in "VI.43. Other non-current liabilities" in this note. ( 2 ) Significant contract liabilities with an age of more than one year There were no significant contract liabilities with an age of more than one year in the Reporting Period. ( 3 ) Significant changes in carrying value in the current year There were no significant changes in carrying value in the current year. 31. Payroll payable ( 1 ) List of payrolls payable Increase in the Decrease in the Item Opening balance Closing balance current year current year Short-term 343,646,678.61 1,546,370,655.06 1,587,111,050.24 302,906,283.43 remuneration Post-employment benefits-defined 4,600,603.98 119,716,518.08 123,332,621.86 984,500.20 contribution plans Dismissal benefits 360,921.46 18,945,372.20 18,463,973.66 842,320.00 Other benefits due within one year 274 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Increase in the Decrease in the Item Opening balance Closing balance current year current year Total 348,608,204.05 1,685,032,545.34 1,728,907,645.76 304,733,103.63 ( 2 ) Short-term remuneration Increase in the Decrease in the Item Opening balance Closing balance current year current year Salaries, bonuses, allowances and 334,684,052.90 1,356,418,260.49 1,398,283,059.07 292,819,254.32 subsidies Employee benefits 3,936,505.74 61,452,893.58 60,035,067.05 5,354,332.27 Social insurance 1,058,903.83 55,338,539.08 55,832,481.16 564,961.75 premiums Including: Medical 542,052.97 49,767,939.00 49,913,269.76 396,722.21 insurance premiums Work injury 258,547.07 3,459,232.15 3,640,666.28 77,112.94 insurance premiums Maternity 258,303.79 2,111,367.93 2,278,545.12 91,126.60 insurance premiums Housing fund 302,288.94 60,035,362.19 59,851,639.16 486,011.97 Labour union funds 2,815,551.22 13,052,979.72 12,186,807.82 3,681,723.12 and education funds Short-term absence with payment Short-term profit sharing plan Others 849,375.98 72,620.00 921,995.98 Total 343,646,678.61 1,546,370,655.06 1,587,111,050.24 302,906,283.43 ( 3 ) Defined contribution plans Increase in the Decrease in the Item Opening balance Closing balance current year current year Basic endowment management 4,410,027.51 116,179,833.58 119,754,395.92 835,465.17 insurance Unemployment 190,576.47 3,536,684.50 3,578,225.94 149,035.03 insurance premiums Annuity contribution 275 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Increase in the Decrease in the Item Opening balance Closing balance current year current year Total 4,600,603.98 119,716,518.08 123,332,621.86 984,500.20 32. Taxes payable Item Closing balance Opening balance Corporate income tax 91,733,192.66 178,994,811.66 Value-added tax 66,607,505.30 60,178,835.36 Fund for disposing abandoned appliances 21,210,465.50 14,716,729.00 and electronic products Land use tax 11,704,493.10 11,028,106.31 Stamp duty 6,782,263.86 9,955,063.53 Property tax 5,219,025.56 4,511,721.21 City construction and maintenance tax 3,479,642.26 3,710,919.05 Education fees and local education 2,525,463.27 2,735,721.75 Surcharge Personal income tax 2,285,063.65 2,477,590.24 Tariff 1,513,377.11 1,624,434.41 Others 1,356,643.60 1,168,746.84 Total 214,417,135.87 291,102,679.36 33. Other payables Item Closing balance Opening balance Interest payable 29,590,464.00 Other payables 1,922,791,905.14 1,866,120,909.34 Total 1,922,791,905.14 1,895,711,373.34 33.1 Interests payable Item Closing balance Opening balance Interest on corporate bonds Interest on long-term borrowings with interest paid by instalment and principal 29,271,307.22 paid at maturity 276 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Closing balance Opening balance Interest payable on short-term borrowings 319,156.78 Total 29,590,464.00 33.2 Other Payables ( 1 ) Other accounts payable presented based on the fund nature Nature of fund Closing balance Opening balance Trading funds 798,553,216.65 677,014,483.12 Expenses payable 521,810,773.58 538,693,780.45 Related party borrowing 236,064,633.74 286,552,967.74 Cash deposit and front 282,035,338.52 286,952,679.25 Advance payment 5,480,880.33 5,482,995.92 Equity payable 24,302,796.96 6,302,796.96 Others 54,544,265.36 65,121,205.90 Total 1,922,791,905.14 1,866,120,909.34 ( 2 ) Significant other accounts payable with an age of more than one year or overdue Reason for non-repayment or Unit Closing balance carry-over The Third Construction Engineering It was not yet due for payment as Company Ltd. of China Construction 21,677,760.25 per the contract Second Engineering Bureau Total 21,677,760.25 34. Non-current liabilities due within one year Item Closing balance Opening balance Long-term borrowings due within one 2,891,407,222.55 249,391,640.39 year Long-term payables due within one year 141,650.44 139,213,550.70 Bonds payable due within one year 2,370,572,421.45 Lease liabilities due within one year 52,026,101.92 20,614,839.60 Total 5,314,147,396.36 409,220,030.69 35. Other current liabilities 277 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Closing balance Opening balance Accounts payable paid by endorsement of outstanding notes at the end of the 11,524,075.93 26,744,560.49 Reporting Period Tax to be charged off 23,890,662.41 21,806,789.93 Refunds payable 18,915,977.41 19,898,433.29 Total 54,330,715.75 68,449,783.71 36. Long-term loans Type of borrowings Closing balance Opening balance Notes Guaranteed loan 4,047,706,381.39 3,116,984,312.66 ①②③④⑤⑥⑦⑧ Mortgage loan 1,207,161,686.81 849,816,227.52 ⑨⑩ Entrusted borrowings 2,054,850,296.35 2,595,372,200.43 Unsecured loan 3,276,240,462.52 2,536,925,213.87 Pledge loan 84,598,475.36 57,225,088.80 Less: Portion due within one 2,891,407,222.55 249,391,640.39 year Total 7,779,150,079.88 8,906,931,402.89 ① The Company has obtained long-term borrowings amounting to RMB1,484,131,000.00 from Shenzhen Branch of China Guangfa Bank Co., Ltd., the term of which is from 24 June 2021 to 20 December 2026, and for which the Company's parent company OCT Group provides joint and several liability guarantee at the maximum amount. ② The Company has obtained long-term borrowings amounting to RMB1,441,235,638.84 from Shenzhen Branch of China Development Bank Co., Ltd., the term of which is from 22 December 2022 to 22 September 2026, and for which the Company's parent company OCT Group provides joint and several liability guarantee at the maximum amount. ③ The Company has obtained long-term borrowings amounting to RMB900,902,777.77 from the Export-Import Bank of China, the term of which is from 22 June 2022 to 21 June 2024, and for which the Company's parent company OCT Group provides joint and several liability guarantee at the maximum amount. ④ The Company's subsidiary Anhui Konka has obtained long-term borrowings amounting to RMB100,114,583.34 from Chuzhou Plaza Sub-branch of China Construction Bank Co., Ltd., the term of which is from 24 October 2022 to 26 October 2026, and for which the Company provides joint and several liability guarantee. ⑤The Company's subsidiary Anhui Konka has obtained long-term borrowings amounting to RMB9,857,131.44 from Chuzhou Branch of Agricultural Bank of China Co., Ltd., the term of which is from 29 June 2023 to 28 June 2028, and for which the Company provides joint and several liability guarantee. 278 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) ⑥ The Company's subsidiary Anhui Tong giường has obtained long-term borrowings amounting to RMB30,018,000.00 from Chuzhou Branch of China Everbright Bank Co., Ltd., the term of which is from 26 December 2023 to 25 June 2025, and for which the Company provides joint and several liability guarantee at the maximum amount. ⑦ The Company's subsidiary Konka Xinyun Semiconductor has obtained long-term borrowings amounting to RMB51,375,000.00 from Yancheng Branch of Huaxia Bank Co., Ltd., the term of which is from 10 September 2021 to 21 August 2026, and for which the Company provides joint and several liability guarantee. ⑧ The Company's subsidiary Sichuan Konka has obtained long-term borrowings amounting to RMB30,072,250.00 from Yibin Rural Commercial Bank Co. Ltd., the term of which is from 23 May 2023 to 26 April 2026, and for which the Company provides joint and several liability guarantee. ⑨ The Company has obtained long-term borrowings amounting to RMB334,321,190.06 from Guanlan Sub-branch of Shenzhen Rural Commercial Bank Co., Ltd., the term of which is from 21 January 2021 to 22 January 2026, and for which it provides land use rights of a carrying value of RMB4,343,453.05 and investment properties of a carrying value of RMB585,984,804.04 and properties and buildings of a carrying value of RMB63,063,516.77 as mortgage. ⑩ The Company's subsidiary Anhui Konka has obtained long-term borrowings amounting to RMB86.027,129.81 from Chuzhou Branch of Industrial Bank Co., Ltd., the term of which is from 16 July 2021 to 15 July 2031, and for which it provides fixed assets of a carrying value of RMB186,407,052.14 and land use rights of a carrying value of RMB18,007,218.67 as mortgage, The Company's subsidiary Dongguan Konka has obtained long-term borrowings amounting to and for which the Company provides joint and several liability guarantee. RMB332,193,383.84 from Dongguan Fenggang Sub-branch of Agricultural Bank of China Co., Ltd., the term of which is from 23 June 2021 to 21 October 2030, and for which it provides land use rights as intangible assets of a carrying value of RMB185,832,462.67 as mortgage and the The Company's subsidiary Frestec Smart Home has obtained long-term borrowings Company provides joint and several liability guarantee. amounting to RMB10,012,222.22 from Xinxiang Jiankang Road Sub-branch of China CITIC Bank Corporation Limited, the term of which is from 27 October 2022 to 4 May 2030, and for which it provides land use rights of a carrying value of RMB90,267,954.17 as mortgage and the Company as well as Meng Honggang, the legal person of Chuzhou Hanshang Electric Appliance Co., Ltd., provide joint and several liability guarantee at the maximum amount at 51% and 49%, The Company's subsidiary Nantong Kanghai has obtained long-term borrowings amounting to respectively. RMB22,973,942.90 from Haimen Sub-branch of Bank of Suzhou Co., Ltd., the term of which from 24 April 2023 to 25 July 2025, and for which it provides land use rights and construction in The Company's subsidiary Shanxi Konka Intelligent has obtained long-term borrowings progress of a carrying value of RMB243,293,655.61 as mortgage. amounting to RMB250,275,000.00 from Shanxi Free Trade Zone Xi'an International Port Area Sub-branch of Industrial and Commercial Bank of China Co., Ltd., the term of which is from 28 September 2023 to 3 November 2033, and for which it provides properties and buildings of a carrying value of RMB321,704,287.16 and land use rights of a carrying value of The Company's subsidiary Xi'an Kanghong Technology Industry has obtained long-term RMB121,439,312.85 as mortgage. borrowings amounting to RMB66,594,605.06 from the Business Department of Shanxi Branch of Bank of Communications Co., Ltd., the term of which is from 15 June 2023 to 31 December 2032, and for which it provides properties and buildings and land use rights of a carrying value of 279 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) RMB306,501,842.35 as mortgage and the Company provides joint and several liability guarantee The Company's subsidiary Yantai Kangjin has obtained long-term borrowings amounting to at the maximum amount. RMB11,867,561.07 from Yantai Rural Commercial Bank Co. Ltd., the term of which is from 16 January 2023 to 12 February 2026, and for which it provides construction in progress of a carrying The Company's subsidiary Chongqing Konka has obtained long-term borrowings amounting value of RMB40,629,663.23 as mortgage. to RMB92,896,651.85 from Chongqing Liang gian g Branch of Industrial and Commercial Bank of China Co., Ltd., the term of which is from 30 December 2022 to 29 December 2037, and for which it provides properties and buildings of a carrying value of RMB337,145,406.93 and land use rights of a carrying value of RMB44,585,522.54 as mortgage and the Company provides joint The Company's parent company OCT Group has extended entrusted loans amounting to and several liability guarantee at the maximum amount. RMB2,054,850,296.35 to the Company through China Merchants Bank Co., Ltd., the term of The Company's subsidiary Yibin Kangrun Medical has obtained long-term borrowings which is from 10 January 2022 to 25 May 2025. amounting to RMB49,506,950.32 from Yibin Branch of Industrial and Commercial Bank of China Co., Ltd. with the accounts receivable arising from the prospective earnings from a franchise agreement with an appraisal value of RMB595,900,000 as pledge, and the term thereof is from 30 The Company's subsidiary Yibin Kangrun Medical has obtained long-term borrowings June 2022 to 15 April 2040. amounting to RMB35,091,525.04 from Yibin Branch of Postal Savings Bank of China Co., Ltd. with the accounts receivable arising from the prospective earnings from a franchise agreement with an appraisal value of RMB595,900,000 as pledge, and the term thereof is from 30 June 2022 to 15 April 2040. 37. Bonds payable (1) List of Bonds Payable Item Closing balance Opening balance Corporate bonds 4,797,565,000.12 4,792,392,044.13 Less: Bonds payable due within one year 2,370,572,421.45 Total 2,426,992,578.67 4,792,392,044.13 (2) Changes in bonds payable Bond Bond name Total par value Issue date Issue amount Opening balance maturity 21Konka01 8 January Three 1,000,000,000.00 996,500,000.00 1,042,632,148.95 (note a)) 2021 years 21Konka02 Three 500,000,000.00 21 May 2021 498,250,000.00 511,544,025.20 (note b)) years 21Konka03 Three 800,000,000.00 9 July 2021 797,200,000.00 813,864,800.79 (note c)) years 22Konka01 Three 1,200,000,000.00 14 July 2022 1,195,800,000.00 1,216,078,113.18 (note d)) years 280 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Bond Bond name Total par value Issue date Issue amount Opening balance maturity 22Konka03 8 September Three 600,000,000.00 597,900,000.00 604,838,993.73 (note e)) 2022 years 22Konka05 18 October Three 600,000,000.00 597,900,000.00 603,433,962.28 (note f)) 2022 years Total 4,700,000,000.00 4,683,550,000.00 4,792,392,044.13 (Continued) Issuance in the current Accrue interest by Amortisation of Bond name year par value premium/discount 21Konka01 (note a)) 44,600,000.00 1,100,628.93 21Konka02 (note b)) 20,000,000.00 550,314.47 21Konka03 (note c)) 31,600,000.00 880,503.14 22Konka01 (note d)) 38,760,000.00 1,320,754.73 22Konka03 (note e)) 19,800,000.00 660,377.36 22Konka05 (note f)) 21,000,000.00 660,377.36 Total 175,760,000.00 5,172,955.99 (Continued) Bond name Prepayment in the current year Closing balance 21Konka01 (note a)) 44,600,000.00 1,043,732,777.88 21Konka02 (note b)) 20,000,000.00 512,094,339.67 21Konka03 (note c)) 31,600,000.00 814,745,303.93 22Konka01 (note d)) 38,760,000.00 1,217,398,867.91 22Konka03 (note e)) 19,800,000.00 605,499,371.09 22Konka05 (note f)) 21,000,000.00 604,094,339.64 Total 175,760,000.00 4,797,565,000.12 Note a: On 8 January 2021, the Company issued RMB1 billion of private placement corporate bonds with the duration of three years, the annual interest rate of 4.46% and the due date of 8 January 2024. Note b: On 21 May 2021, the Company issued RMB500 million of private placement corporate bonds with the duration of three years, the annual interest rate of 4.00% and the due date of 21 May 2024. Note c: On 9 July 2021, the Company issued RMB800 million of private placement corporate bonds with the duration of three years, the annual interest rate of 3.95% and the due date of 9 July 2024. Note d: On 14 July 2022, the Company issued RMB1.2 billion of public placement corporate 281 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) bonds with the duration of three years, the annual interest rate of 3.23% and the due date of 14 July 2025. Note e: On 8 September 2022, the Company issued RMB600 million of private placement corporate bonds with the duration of three years, the annual interest rate of 3.30% and the due date of 8 September 2025. Note f: On 18 October 2022, the Company issued RMB600 million of private placement corporate bonds with the duration of three years, the annual interest rate of 3.50% and the due date of 18 October 2025. Note 2: OCT Group provided full-amount, unconditional and irrevocable joint and several liabilities guarantee for the due payment of the public and private offering of corporate bonds. 38. Lease liabilities Item Closing balance Opening balance Lease liabilities 212,244,920.84 57,201,478.76 Less: Lease liabilities due within one year (see 52,026,101.92 20,614,839.60 Note VI-34) Total 160,218,818.92 36,586,639.16 39. Long-term payables Item Closing balance Opening balance Accrued financing lease outlay 6,823,209.13 152,547,691.61 Less: Unrecognised financing expenses 545,824.62 5,370,013.73 Less: Amount due within one year (see Note VI- 141,650.44 139,213,550.70 34) Total 6,135,734.07 7,964,127.18 40. Long-term payroll payables Item Closing balance Opening balance Termination benefits-net liabilities of defined 4,718,466.37 4,894,209.73 contribution plans Total 4,718,466.37 4,894,209.73 41. Estimated liabilities Item Closing balance Opening balance Cause(s) Pending litigation 206,591.51 206,591.51 Discard expenses 1,644,068.13 1,875,064.89 After-sales of household Product quality assurance 101,726,574.07 74,590,486.63 appliances 282 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Closing balance Opening balance Cause(s) Performance compensation 200,942,606.09 82,723,436.52 Total 304,519,839.80 159,395,579.55 283 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 42. Deferred revenue ( 1 ) Category of deferred income Increase in the current Decrease in the current Item Opening balance Closing balance Cause(s) year year Government grants 334,844,966.31 142,412,107.74 52,121,836.15 425,135,237.90 Related to assets/income Total 334,844,966.31 142,412,107.74 52,121,836.15 425,135,237.90 ( 2 ) Government subsidy items Amount Amount Subsidies recognised as recognised as Related to Government subsidy items Opening balance increased in the non-operating Other changes Closing balance other income in assets/income current year income in the the current year current year Headquarters 8K device-side 23,800,000.00 1,375,077.60 22,424,922.40 Related to assets R&D project of Konka Group Subsidy for electronic relocation 13,085,700.00 10,000,000.00 3,085,700.00 Related to assets of Anhui Konka Plant construction subsidy for 105,864,968.77 2,319,532.32 103,545,436.45 Related to assets Yibin Konka Industrial Park Plant decoration subsidy for 11,513,723.80 1,439,215.44 10,074,508.36 Related to assets Yibin Konka Industrial Park Equipment subsidy for Konka Related to Xinyun Semiconductor 10,596,031.61 899,350.08 9,696,681.53 income (Yancheng) 284 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount Amount Subsidies recognised as recognised as Related to Government subsidy items Opening balance increased in the non-operating Other changes Closing balance other income in assets/income current year income in the the current year current year Returned payments for land by 18,327,272.79 392,727.24 17,934,545.55 Related to assets Chongqing Konka Medical waste centralised treatment project in Gaoxian 28,405,837.81 2,500,000.00 1,754,887.71 29,150,950.10 Related to assets County, Yibin City Other government subsidies Related to 123,251,431.53 139,912,107.74 30,855,345.76 232,308,193.51 related to assets/income assets/income Total 334,844,966.31 142,412,107.74 49,036,136.15 -3,085,700.00 425,135,237.90 285 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 43. Other non-current liabilities Item Closing balance Opening balance Contract liabilities over one year 179,996,351.33 314,233,260.08 Total 179,996,351.33 314,233,260.08 44.Share capital Increase/decrease (+/-) in the current year Item Opening balance Bonus Closing balance New Bonus issue shares Others Subtotal issue from issued profit Total shares 2,407,945,408.00 2,407,945,408.00 45.Capital reserves Item Opening Increase in the Decrease in the Closing balance balance current year current year Other capital surplus 365,247,361.05 188,738,008.44 27,485,862.73 526,499,506.76 Total 365,247,361.05 188,738,008.44 27,485,862.73 526,499,506.76 Note: Capital surplus for the Reporting Period--other capital surplus increase and decrease due to the main reasons: a) The associated enterprise Wuhan Tianyuan Environmental Protection Co., Ltd. issued new shares and convertible bonds, resulting in an increase in other capital surplus of RMB127,671,222.93. b) The financing and equity incentives of the associated enterprise Hefei KONSEMI Storage Technology Co., Ltd. resulted in an increase in other capital surplus of RMB44,092,024.98. c)The associated enterprise Shenzhen Kangying Semiconductor Technology Co., Ltd. increased capital and shares, resulting in an increase in other capital surplus of RMB16,852,760.53. d) The associated enterprise Guangdong Kangyuan Semiconductor Co., Ltd. increased capital and shares, resulting in an increase in other capital surplus of RMB122,000.00. e) Other capital surplus decreased by RMB17,433,984.73 as a result of the disposal of an associate, Guangdong Chutian Dragon Smart Card Co., Ltd., and the change in its accounting method. Among them, other capital surplus recognized under the former equity method of accounting was transferred out when the equity interest held by Guangdong Chutian Dragon Smart Card Co., Ltd. was changed from equity method of accounting to financial asset accounting, resulting in a decrease of other capital surplus by RMB13,777,882.20; and a decrease of other capital surplus by RMB3,656,102.53 due to the disposal of equity interest in Guangdong Chutian Dragon Smart Card Co., Ltd.. f) Repurchase of equity interests for equity incentive by the associated enterprise Chongqing E2info Technology Co., Ltd. resulted in a decrease in other capital surplus of RMB 5,977,391.99. g) The decrease in capital surplus and special reserve of the associated enterprise Shandong Econ Technology Co., Ltd. resulted in a decrease in other capital surplus of RMB4,074,486.01. 286 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 46.Other comprehensive income Beginning of the year Amount incurred in the current year End of the year Less: Amount recognised Less: Amount recognised Item as other comprehensive as other comprehensive Attributable to Attributable to Amount incurred Less: income in the previous income in the previous the parent minority Balance before income tax Income tax Balance period and transferred to period and transferred to company after shareholders in the current year expense profit or loss in the retained earnings in the tax after tax Reporting Period Reporting Period I. Other comprehensive income that cannot be -6,398,878.20 -6,398,878.20 reclassified as profits or losses Changes in the fair value of other equity instrument -6,398,878.20 -6,398,878.20 investments Others II. Other comprehensive income reclassified as -7,866,303.43 -84,979.37 821,623.19 -906,602.56 -7,044,680.24 profits and losses Including: Other comprehensive income that can be transferred to profits -4,029,937.27 -86,041.63 -86,041.63 -4,115,978.90 or losses under the equity method Exchange difference on translating foreign -3,836,366.16 1,062.26 907,664.82 -906,602.56 -2,928,701.34 operations Total of other -14,265,181.63 -84,979.37 821,623.19 -906,602.56 -13,443,558.44 comprehensive income 287 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 47.Special reserve Increase in the Decrease in the Item Opening balance Closing balance current year current year Safety production fund 5,509,215.43 851,727.19 4,657,488.24 Total 5,509,215.43 851,727.19 4,657,488.24 48.Surplus reserves Increase in the Decrease in the Item Opening balance Closing balance current year current year Statutory surplus 1,005,961,774.19 1,005,961,774.19 reserves Discretionary 238,218,590.05 238,218,590.05 surplus reserves Total 1,244,180,364.24 1,244,180,364.24 49.Unappropriated profit Item The current year Last year Balance as at the end of last year 3,637,291,770.33 5,229,098,788.94 Add: Total beginning balance of retained earnings before 1,060,258.69 adjustments Including: Changes in accounting policies 1,060,258.69 Opening balance of current year 3,638,352,029.02 5,229,098,788.94 Add: Net profit attributable to owners of the parent -2,163,790,053.17 -1,471,409,748.21 company in the current year Less: Appropriation of statutory surplus reserves Ordinary share dividends payable 120,397,270.40 Closing balance of the current year 1,474,561,975.85 3,637,291,770.33 50.Operating revenue and cost of sales ( 1 ) Operating income and operating costs Amount incurred in the current year Amount incurred last year Item Income Cost Income Cost Principal 16,951,243,781.74 16,397,488,134.14 28,607,497,919.19 28,075,348,270.98 business Other 898,087,647.50 751,548,616.36 1,000,356,336.08 713,290,122.90 288 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Amount incurred in the current year Amount incurred last year business Total 17,849,331,429.24 17,149,036,750.50 29,607,854,255.27 28,788,638,393.88 ( 2 ) Information on the breakdown of operating revenue and cost of sales Category of contracts Operating income Operating expenses Business type Of which: Colour TV business 4,708,450,488.99 4,756,604,973.05 Consumer appliances business 4,257,423,386.71 3,790,414,584.40 Memory chip trading and 3,397,161,542.60 3,433,148,164.76 semiconductor business Environmental protection and new 1,145,732,124.31 1,134,022,493.39 materials business PCB business 476,456,155.62 420,480,569.60 Other business 3,864,107,731.01 3,614,365,965.30 Total 17,849,331,429.24 17,149,036,750.50 Classified by operating region Of which: Domestic 10,716,944,822.00 10,283,636,801.86 Overseas 7,132,386,607.24 6,865,399,948.64 Total 17,849,331,429.24 17,149,036,750.50 Note: According to the adjustment and optimization of our group's business layout, the storage chip processing trade in the industrial and trade business will be adjusted to the storage chip trade and semiconductor business, and the other parts will be merged into others. ( 3 ) Information in relation to the trade price apportioned to the residual contract performance obligation The amount of revenue corresponding to performance obligations that have been contracted but have not yet been fulfilled or completed at the end of the year is RMB737,878,491.32, of which RMB666,987,130.93 is expected to be recognised as revenue in 2024, and the remaining RMB70,891,360.39 is expected to be recognised as revenue in 2025 and following years. 51.Taxes and surcharges Amount incurred in the Item Amount incurred last year current year Stamp duty 34,773,519.65 39,436,591.84 Land use tax 20,537,445.82 27,096,008.05 289 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount incurred in the Item Amount incurred last year current year Property tax 31,766,475.03 25,401,754.51 City maintenance & construction tax 9,421,882.52 14,998,902.21 Educational surcharge 4,271,078.25 6,410,329.82 Local educational surcharge 2,847,868.04 4,993,164.43 Water resources fund 935,650.62 590,860.27 Others 934,120.54 412,208.88 Total 105,488,040.47 119,339,820.01 52.Selling expenses Amount incurred in the Item Amount incurred last year current year Employee benefits 374,259,567.43 349,085,455.73 Advertising expense 233,506,458.32 362,795,424.61 Warranty fee 167,413,447.59 162,483,458.52 Promotional activities 144,332,006.20 132,984,672.13 Logistic Fee 78,886,050.69 76,005,945.85 Travel expenses 21,297,750.22 16,412,701.43 Lease expense 12,330,023.91 20,000,782.87 Entertainment fees 12,054,482.82 12,319,781.49 Exhibition expenses 18,344,007.57 3,049,900.87 Taxes and fund 634,083.90 43,602,463.99 Others 82,066,970.31 61,404,148.28 Total 1,145,124,848.96 1,240,144,735.77 53.Administration expenses Amount incurred in the Item Amount incurred last year current year Employee benefits 442,241,850.70 536,410,042.48 Depreciation charges 221,920,806.29 181,356,034.20 290 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount incurred in the Item Amount incurred last year current year Intermediary fees 27,526,556.25 70,364,121.16 Travel expenses 11,896,505.16 11,799,889.35 Water and electricity expenses 9,399,817.49 15,251,139.78 Loss on scraping of inventories 2,768,674.29 5,066,889.35 Patent fee 273,797.86 369,573.26 Others 91,499,902.16 129,029,900.70 Total 807,527,910.20 949,647,590.28 54.R&D expense Amount incurred in the Item Amount incurred last year current year Salary 271,425,739.22 291,536,802.63 Depreciation and amortisation charge 109,324,146.88 76,242,059.21 New product trial production expense 37,107,469.57 53,488,226.67 Material expense 29,602,114.38 38,872,892.09 Commission service fee 4,452,755.80 13,376,731.07 Testing expense 5,899,826.42 4,302,928.77 Information use fee 313,299.20 918,800.49 Others 39,868,408.39 65,143,583.96 Total 497,993,759.86 543,882,024.89 55.Finance costs Amount incurred in the Item Amount incurred last year current year Interest expense 884,535,066.01 913,721,408.10 Less: Interest income 286,969,209.86 237,115,652.09 Add: Exchange loss -72,904,637.81 -198,292,207.05 Other expenses 37,354,891.90 44,110,194.22 Total 562,016,110.24 522,423,743.18 56.Other income 291 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount incurred in the Resources Amount incurred last year current year Support funds 147,251,929.00 695,511,711.98 Rewards and subsidies 62,683,717.05 138,985,910.13 Transfer of deferred income 49,036,136.15 29,108,950.31 Software tax refund 5,819,853.78 12,377,884.09 Post subsidies 3,523,345.06 5,205,565.67 Subsidies for L/C exports 2,231,210.76 348,111.95 Tax rebates and refunds 71,840.14 47,174,366.68 Total 270,618,031.94 928,712,500.81 57.Investment income Amount incurred in the Item Amount incurred last year current year Returns on long-term equity investments -170,413,352.22 123,392,731.97 calculated by the equity method Return on investment arising from the 195,999,095.98 509,249,136.96 disposal of long-term equity investments Conversion of long-term equity investments accounted for by the equity method to 574,780,174.75 financial assets Investment income arising from the disposal 560,005.44 of other equity instruments investments Income from remeasurement of residual stock 51,474,909.15 239,092,139.68 rights at fair value after losing control power Interest income from debt investments during 56,292,758.87 69,651,317.87 the holding period Return on investment in the financial assets 9,383,976.00 held for trading during the holding period Income from the derecognition of financial -3,132,035.83 assets at amortized cost Investment income from disposal of financial -38,708,152.12 -5,378,929.04 assets at fair value through profit or loss Others -832,158.49 Total 675,405,221.53 936,006,397.44 58.Income from changes in the fair value 292 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Sources of income from changes in the fair Amount incurred in the Amount incurred last year value current year Financial assets at fair value through profit or -16,629,916.60 4,560,753.18 loss Estimated performance compensation -81,307,994.29 -45,292,086.72 Total -97,937,910.89 -40,731,333.54 59.Credit impairment loss Amount incurred in the Item Amount incurred last year current year Bad debt loss of notes receivable 6,971,440.21 4,405,405.84 Bad debt loss of accounts receivable -209,233,746.63 -437,154,564.05 Bad debt loss of other accounts receivable -254,340,694.42 -517,135,861.32 Total -456,603,000.84 -949,885,019.53 60.Impairment losses on assets Amount incurred in the Item Amount incurred last year current year Inventory depreciation loss and contract -371,733,599.86 -156,563,428.63 performance cost impairment loss Impairment loss of long-term equity -106,783,838.90 investments Impairment loss of construction in progress -41,422,211.82 -63,705,515.70 Impairment loss on fixed assets -40,607,700.40 -71,089,375.71 Contractual asset impairment loss -45,614.41 Impairment loss of intangible assets -4,037,532.29 Total -560,592,965.39 -295,395,852.33 61.Impairment losses on assets ( "-" indicates loss) Amount recorded Amount incurred in Amount incurred into the non- Item the current year last year recurring profit or loss of current year Incomes from disposal of held-for- sale assets Incomes from disposal of non-current 54,321.20 9,580,708.29 54,321.20 assets 293 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount recorded Amount incurred in Amount incurred into the non- Item the current year last year recurring profit or loss of current year Including: incomes from disposal of non-current assets not classified as 54,321.20 9,580,708.29 held-for-sale assets Including: Fixed assets disposal -8,803,043.13 -2,675,226.73 -8,803,043.13 income Intangible assets disposal income 8,559,461.64 12,241,030.45 8,559,461.64 Income from disposal of -321,592.91 -321,592.91 construction in progress Right-of-use assets disposal 619,495.60 14,904.57 619,495.60 income Income from non-monetary assets exchange Income from disposal of non-current assets in debt restructuring Total 54,321.20 9,580,708.29 54,321.20 62.Non-operating income ( 1 ) List of Non-operating Income Amount recorded Amount incurred in Amount incurred into the non- Item the current year last year recurring profit or loss of current year Write-off of current accounts 12,652,519.62 25,490,345.11 12,652,519.62 Compensation and penalty income 6,981,587.26 21,714,054.35 6,981,587.26 Non-current assets damage and 15,390.13 917,512.09 15,390.13 retirement gains Income from performance 72,653,782.00 compensation Others 6,613,575.48 4,363,348.45 6,613,575.48 Total 26,263,072.49 125,139,042.00 26,263,072.49 ( 2 ) Government subsidies recorded in profit or loss of the current year The Company had no government subsidies recorded in profit or loss in the current year 63. Non-operating expenses 294 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount recorded Amount of current Amount of last into the non- Item year year recurring profit or loss of current year Performance compensation 74,344,977.85 37,431,349.80 74,344,977.85 Losses on damage and scraping of 4,072,756.52 3,340,817.47 4,072,756.52 non-current assets Compensation expense 3,945,526.50 3,369,768.80 3,945,526.50 Unusual loss on inventory 148,669,068.79 Others 74,322,594.16 31,913,240.98 74,322,594.16 Total 156,685,855.03 224,724,245.84 156,685,855.03 64.Income tax expense ( 1 ) Income tax expense Amount incurred in the current Item Amount incurred last year year Income tax expense in the current 58,328,317.21 155,149,364.07 year Deferred income tax expense -139,776,731.85 -453,448,871.15 Total -81,448,414.64 -298,299,507.08 ( 2 ) Adjustment process of accounting profits and income tax expenses Item Amount incurred in the current year Total consolidated profit in the current year -2,717,335,075.98 Income tax expense calculated at legal/applicable tax rate -679,333,769.00 Impact of different tax rates applied by subsidiaries 106,438,303.57 Impact of income tax in the periods before adjustment -879,334.46 Impact of non-taxable income 27,215,138.64 Impacts of non-deductible costs, expenses, and losses 8,887,343.81 Impact of using deductible losses on the deferred tax assets not 126,332,523.09 recognised previously Impact of deductible temporary differences or deductible 377,683,927.23 losses of deferred tax assets not recognised in the current year Changes in the balance of deferred income tax assets/ -73,940.46 liabilities in previous period due to adjustment of tax rate 295 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Amount incurred in the current year Others -47,718,607.06 Income tax expense -81,448,414.64 65.Other comprehensive income For details, please refer to "Note VI-46 Other comprehensive income". 66.Items in the cash flow statement ( 1 ) Cash related to operating activities 1 ) Other cash received related to operating activities Amount incurred in the Item Amount incurred last year current year Income from government subsidies 362,725,223.50 1,022,967,081.76 Front money and guarantee deposit 392,830,280.36 259,156,351.64 Trading funds 159,741,742.98 38,841,937.19 Interest income from bank deposits 116,327,870.24 81,268,409.97 Compensation and penalty income 20,504,317.63 13,515,680.81 Others 39,760,244.28 181,337,565.76 Total 1,091,889,678.99 1,597,087,027.13 2 ) Other cash paid related to operating activities Amount incurred in the Item Amount incurred last year current year Cash payment fee 898,328,046.30 1,284,221,978.23 Deposit and margin 230,032,945.74 428,549,076.52 Payment made on behalf 6,916,151.52 26,621,620.91 Expense for bank handling charges 4,874,263.89 4,742,304.06 Others 165,832,467.23 225,268,008.86 Total 1,305,983,874.68 1,969,402,988.58 ( 2 ) Cash related to investment activities 1 ) Significant cash received related to investment activities Amount incurred in the Item Amount incurred last year current year 296 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount incurred in the Item Amount incurred last year current year Recovery of loan at call 473,934,626.67 3,860,647,680.07 Total 473,934,626.67 3,860,647,680.07 2 ) Significant cash paid related to investment activities Item Amount incurred in the Amount incurred last year current year Payment of loan at call 310,116,949.03 479,034,898.06 Total 310,116,949.03 479,034,898.06 3 ) Other cash received related to investment activities Item Amount incurred in the Amount incurred last year current year Recovery of loan at call 473,934,626.67 3,860,647,680.07 Cash received from acquisition of 2,000.00 subsidiaries Others 209,995,119.36 127,885,628.35 Total 683,929,746.03 3,988,535,308.42 4 ) Other cash paid related to investment activities Item Amount incurred in the Amount incurred last year current year Payment of loan at call 310,116,949.03 479,034,898.06 Cash paid for disposal of subsidiaries 840,192.20 Others 218,616,095.75 2,979,556.70 Total 529,573,236.98 482,014,454.76 ( 3 ) Cash related to financing activities 1 ) Other proceeds received related to financing activities Item Amount incurred in the Amount incurred last year current year Recovery of margin deposit pledged 570,834,983.98 363,847,783.60 Receiving loan at call 167,370,200.00 161,410,093.19 Others 28,100.03 297 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Amount incurred in the Amount incurred last year current year Total 738,205,183.98 525,285,976.82 2 ) Other cash paid related to financing activities Item Amount incurred in the Amount incurred last year current year Deposit as margin for pledge 773,184,328.31 378,218,165.91 Cash paid for leases 145,535,542.98 299,950,091.11 Retuning loan at call 79,183,194.53 142,068,831.60 Financing cost 32,222,659.12 37,111,326.66 Others 6,192,899.46 1,816,055.32 Total 1,036,318,624.40 859,164,470.60 298 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 3 ) Changes in liabilities arising from financing activities Increase in the current year Decrease in the current year Item Opening balance Closing balance Cash changes Non-cash changes Cash changes Non-cash changes Non-current liabilities due 409,220,030.69 5,312,118,620.81 384,295,482.65 22,895,772.49 5,314,147,396.36 within one year Short-term loans 7,579,559,304.97 7,068,722,590.74 246,534,117.28 8,490,272,406.79 13,951,549.93 6,390,592,056.27 Long-term loans 8,906,931,402.89 3,881,307,916.00 421,767,241.00 2,539,449,257.46 2,891,407,222.55 7,779,150,079.88 Bonds payable 4,792,392,044.13 180,932,955.99 175,760,000.00 2,370,572,421.45 2,426,992,578.67 Lease liabilities 36,586,639.16 206,391,170.31 7,495,510.95 75,263,479.60 160,218,818.92 Long-term payables 7,964,127.18 377,045.54 1,326,996.00 878,442.65 6,135,734.07 Total 21,732,653,549.02 10,950,030,506.74 6,368,121,150.93 11,598,599,653.85 5,374,968,888.67 22,077,236,664.17 299 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) ( 4 ) Notes to the presentation of cash flows on a net basis No cash flows were presented on a net basis in the current year. ( 5 ) Significant activities and financial effects that do not involve current cash receipts and payments but affect the financial position of the enterprise or may affect the enterprise's cash flows in the future Item Amount incurred in the current year Payment for materials made by endorsement of notes 1,823,500,934.62 receivable Acquisition of long-term assets by endorsement of notes 95,233,307.89 receivable Other payments made by endorsement of notes receivable 158,839,883.66 67.Supplementary data on the statements of cash flows ( 1 ) Supplementary data on the statements of cash flows Amount of current Item Amount of last year year 1. Reconciliation of net profit to cash flows from — - operating activities: Net profit -2,635,886,661.34 -1,769,220,348.36 Add: Provision for asset impairment 560,592,965.39 295,395,852.33 Credit impairment loss 456,603,000.84 949,885,019.53 Depreciation of fixed assets, depletion of oil and gas 450,848,329.23 396,581,885.62 assets, and depreciation of productive biological assets Depreciation of right-of-use assets 42,868,891.40 46,766,548.09 Amortisation of intangible assets 47,675,317.23 49,235,482.54 Amortisation of long-term prepaid expense 127,376,763.41 113,357,073.06 Losses on disposal of fixed assets, intangible assets -54,321.20 -9,580,708.29 and other long-lived assets ( "" indicates income) Losses on scrap of fixed assets ( "" indicates income) 65,989,435.90 2,423,305.38 Losses on changes in fair value ( "" indicates income) 97,937,910.89 40,731,333.54 Finance costs ( "" indicates income) 723,081,917.40 796,256,399.85 Investment loss ( "" indicates income) -675,405,221.53 -936,006,397.44 Decrease in deferred income tax assets ( "" indicates -229,384,248.41 -464,095,009.37 increase) 300 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount of current Item Amount of last year year Increase in deferred income tax liabilities ( "" indicates 89,598,866.96 10,634,827.21 decrease) Decrease in inventories ( "" indicates increase) 772,941,542.37 -509,708,316.12 Decrease in accounts receivable generated from 879,334,900.88 1,536,953,154.05 operating activities ( "" indicates increase) Increase in accounts payable used in operating activities -171,981,975.37 -1,048,804,193.14 ( "" indicates decrease) Others -49,036,136.15 -29,108,950.31 Net cash flows from operating activities 553,101,277.90 -528,303,041.83 2. Significant investment and financing activities not involving cash Conversion of liabilities into capital Convertible corporate bonds due within one year Fixed assets acquired under finance leases 3. Net changes in cash and cash equivalents: Balance of cash at the end of the year 5,674,784,349.55 5,461,912,010.90 Less: Opening balance of cash 5,461,912,010.90 5,968,347,219.03 Add: Closing balance of cash equivalents Less: Opening balance of cash equivalents Net increase in cash and cash equivalents 212,872,338.65 -506,435,208.13 ( 2 ) Net cash paid for the acquisition of subsidiaries in the current year Net cash was paid for the acquisition of subsidiaries in the current year. ( 3 ) Net cash received for the disposal of subsidiaries in the current year Item Amount Cash or cash equivalents received in the current year from the disposal 196,815,840.00 of subsidiaries in the current year Including: Guizhou Kanggui Energy Co., Ltd. 9,500,000.00 Kanghong (Yantai) Environmental Protection Technology Co., Ltd. 1,091,900.00 Chongqing Kang xing rui Environmental Protection Technology Co., 40,308,400.00 Ltd. 301 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Amount Sichuan Hongxinchen Real Estate Development Co., Ltd. 20,855,540.00 Yibin Kangrun Environmental Protection Power Generation Co., 52,460,000.00 Ltd. Zhongshan Kanghong Electronic Technology Co., Ltd. 72,600,000.00 Less: Cash and cash equivalents held by subsidiaries on the day when 31,692,957.22 control is lost Including: Guizhou Kanggui Energy Co., Ltd. Kanghong (Yantai) Environmental Protection Technology Co., Ltd. 1,932,092.20 Chongqing Kang xing rui Environmental Protection Technology Co., 26,937,835.64 Ltd. Sichuan Hongxinchen Real Estate Development Co., Ltd. 2,036,650.33 Yibin Kangrun Environmental Protection Power Generation Co., 786,379.05 Ltd. Zhongshan Kanghong Electronic Technology Co., Ltd. Add: Cash or cash equivalents received in the current year from the disposal of subsidiaries in previous periods Including: Net cash received from the disposal of subsidiaries 165,122,882.78 ( 4 ) Composition of cash and cash equivalents Item Closing balance Opening balance Cash 5,674,784,349.55 5,461,912,010.90 Including: Cash on hand 469.28 14.78 Bank deposits available for payment at any time 5,672,034,875.67 5,459,401,175.52 Other monetary funds available for payment at any 2,749,004.60 2,510,820.60 time Balance of cash and cash equivalents at the end of the 5,674,784,349.55 5,461,912,010.90 year ( 5 ) Presentation of cash and cash equivalents with restricted use Amount of Amount of last Reasons for classifying the funds as cash Item current year year and cash equivalents 302 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount of Amount of last Reasons for classifying the funds as cash Item current year year and cash equivalents The proceeds can be used at any time to Project loan proceeds 2,554,356.19 make payments, and such payments can only be made for projects The proceeds can be used at any time to Project pre-sale funds 40,951,191.37 make payments, and such payments can only be made for projects Total 43,505,547.56 - ( 6 ) Monetary funds not classified as cash and cash equivalents Reasons for not Amount of current classifying the funds as Item Amount of last year year cash and cash equivalents It is pledged for borrowing or deposit for Cash deposit 384,011,696.60 435,167,024.52 issuance of banker acceptance The management Time deposits 226,611,500.00 69,800,000.00 intends to hold the deposits to maturity Not readily available for Frozen funds 220,952,030.87 21,216,455.29 payment Total 831,575,227.47 526,183,479.81 - 68.Items in the Statement of Changes in Shareholders' Equity No "other" amount in the closing amount of last year was adjusted in the current year. 69.Foreign currency monetary items ( 1 ) Foreign currency monetary items Year-end foreign currency Year-end balance Item Exchange rate balance denominated in RMB Monetary assets Including: USD 91,184,116.43 7.08270 645,829,741.44 EUR 354,034.80 7.85920 2,782,430.30 EGP 60,588,354.86 0.22903 13,876,550.91 GBP 1.32 9.04110 11.93 HKD 9,020,139.65 0.90622 8,174,230.95 CAD 6.96 5.36730 37.36 303 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Year-end foreign currency Year-end balance Item Exchange rate balance denominated in RMB PLN 6,235,024.89 1.81068 11,289,634.87 Accounts receivable Including: USD 85,032,871.75 7.08270 602,262,320.74 EUR 92,742.00 7.85920 728,877.93 EGP 64,711.11 0.22903 14,820.79 HKD 54,244,812.62 0.90622 49,157,734.09 AUD 49,764.00 4.84840 241,275.78 Other accounts receivable Including: USD 110,836,591.33 7.08270 785,022,325.41 EGP 108,000.00 0.22903 24,735.24 HKD 814,032.70 0.90622 737,692.71 JPY 21,400,000.00 0.05021 1,074,558.20 Accounts payable Including: USD 4,828,295.25 7.08270 34,197,366.77 EUR 12,698.28 7.85920 99,798.32 EGP 44,517,982.34 0.22903 10,195,953.50 HKD 68,208,818.14 0.90622 61,812,195.17 Other payables Including: USD 3,453,133.32 7.08270 24,457,507.37 EUR 150,799.56 7.85920 1,185,163.90 EGP 911,520.00 0.22903 208,765.43 HKD 5,056,341.30 0.90622 4,582,157.61 ( 2 ) Overseas entities The significant overseas entities include Hongdin Trading, Hong Kong Konka, Chain Kingdom Memory Technologies, Kangjietong, Jiali International, and Kowin Memory (Hong Kong). The main overseas operating place is Hong Kong. The Company's recording currency is HKD since the main currency in circulation in Hong Kong is HKD. 304 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) VII. R&D expenditures Amount incurred in the current Item Amount incurred last year year Salary 271,425,739.22 291,536,802.63 Depreciation and amortisation 109,324,146.88 76,242,059.21 charge New product trial production 37,107,469.57 53,488,226.67 expense Material expense 29,602,114.38 38,872,892.09 Commission service fee 4,452,755.80 13,376,731.07 Testing expense 5,899,826.42 4,302,928.77 Information use fee 313,299.20 918,800.49 Others 39,868,408.39 65,143,583.96 Total 497,993,759.86 543,882,024.89 Including: Expensed R&D 497,993,759.86 543,882,024.89 expenditure Capitalised R&D expenditure VIII. Changes in the Scope of Consolidation 1. Combinations of businesses not under common control The Company had no combinations of businesses not under common control in the Reporting Period. 2. Combinations of businesses under common control The Company had no combinations of businesses under common control in the Reporting Period. 305 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 3. Disposal of subsidiaries Unit: RMB10,000 Difference Recognition between the method and disposal price Carrying Fair value major Amount of and the value of of assumptions other attributable Remaining remaining remaining of fair value comprehensive Gains or Proportion Disposal share of net equity equity at the equity at the of income related Basis for losses from Disposal price of disposals method at Control assets of the percentage level of the level of the remaining to the equity determining re- at control at control control right subsidiary at on the day consolidated consolidated equity at the investments of Subsidiary control measurement right losing right losing right losing time the level of when the financial financial level of the former right losing of remaining time point time point losing time point consolidated control statements statements consolidated subsidiaries time point equity at fair (%) point financial right is on the day on the day financial transferred value statements lost (%) when the when the statements into corresponding control control on the day investment to the right is lost right is lost when the profit or loss investment control disposal right is lost The rights and obligations 19 related to Evaluated Zhongshan Kanghong 7,260.00 100.00 Transfer December the 4.80 price 2023 underlying equity have been transferred The rights and obligations 25 related to Guizhou Kanggui Evaluated 950.00 100.00 Transfer December the 97.49 Energy price 2023 underlying equity have been transferred 306 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Difference Recognition between the method and disposal price Carrying Fair value major Amount of and the value of of assumptions other attributable Remaining remaining remaining of fair value comprehensive Gains or Proportion Disposal share of net equity equity at the equity at the of income related Basis for losses from Disposal price of disposals method at Control assets of the percentage level of the level of the remaining to the equity determining re- at control at control control right subsidiary at on the day consolidated consolidated equity at the investments of Subsidiary control measurement right losing right losing right losing time the level of when the financial financial level of the former right losing of remaining time point time point losing time point consolidated control statements statements consolidated subsidiaries time point equity at fair (%) point financial right is on the day on the day financial transferred value statements lost (%) when the when the statements into corresponding control control on the day investment to the right is lost right is lost when the profit or loss investment control disposal right is lost The rights and obligations Kanghong (Yantai) 28 related to Evaluated Environmental 109.19 51.00 Transfer December the 6.50 price Protection 2023 underlying equity have been transferred The rights and obligations 5 related to Chongqing Evaluated 4,030.84 51.00 Transfer December the 38.84 Kang xing rui price 2023 underlying equity have been transferred 307 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Difference Recognition between the method and disposal price Carrying Fair value major Amount of and the value of of assumptions other attributable Remaining remaining remaining of fair value comprehensive Gains or Proportion Disposal share of net equity equity at the equity at the of income related Basis for losses from Disposal price of disposals method at Control assets of the percentage level of the level of the remaining to the equity determining re- at control at control control right subsidiary at on the day consolidated consolidated equity at the investments of Subsidiary control measurement right losing right losing right losing time the level of when the financial financial level of the former right losing of remaining time point time point losing time point consolidated control statements statements consolidated subsidiaries time point equity at fair (%) point financial right is on the day on the day financial transferred value statements lost (%) when the when the statements into corresponding control control on the day investment to the right is lost right is lost when the profit or loss investment control disposal right is lost The rights and obligations Yibin Kangrun 27 related to Evaluated Environmental 5,246.00 40.87 Transfer November the 610.00 price Protection 2023 underlying equity have been transferred The rights and obligations Sichuan Hongxinchen 27 related to Evaluated Real Estate 3,472.00 31.00 Transfer February the 3,256.58 49.00 340.51 5,488.00 5,147.49 price Development Co., Ltd. 2023 underlying equity have been transferred 308 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 4. Changes in the scope of consolidation due to other reasons (1) Subsidiaries established in the current year No subsidiaries were established in the current year. (2) Subsidiaries cancelled in the current year Registered capital Shareholding Liquidation completion Subsidiary (RMB'0,000) percentage (%) time Anhui Zhilian 5,000.00 100.00 1 June 2023 Jiangsu Konka Special 10,000.00 51.00 8 October 2023 Material 309 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) IX. Interests in other entities 1. Interests in subsidiaries ( 1 ) Composition of the business group Shareholding percentage Main place of (%) Acquisition No. Subsidiary Place of registration Business nature business method Direct Indirect Guangdong, Guangdong, Enterprise management consulting, incubation Establishment 1 Konka Ventures 51 Shenzhen Shenzhen management, housing leasing, etc. or investment Other professional consultation and Establishment 2 Yantai Konka Shandong, Yantai Shandong, Yantai 51 investigation or investment Establishment 3 Chengdu, Anren Sichuan, Chengdu Sichuan, Chengdu Enterprise incubation management 51 or investment Establishment 4 Konka Enterprise Service Guizhou, Guiyang Guizhou, Guiyang Enterprise management consulting 51 or investment Establishment 5 Yibin Konka Incubator Sichuan, Yibin Sichuan, Yibin Commercial services 51 or investment Establishment 6 Anhui Konka Anhui, Chuzhou Anhui, Chuzhou Manufacturing 78 or investment Establishment 7 Kangzhi Trade Anhui, Chuzhou Anhui, Chuzhou Wholesale 78 or investment Guangdong, Guangdong, Other science and technology promotion Establishment 8 Konka Electronic Materials 100 Shenzhen Shenzhen services or investment Guangdong, Guangdong, Establishment 9 Konka Unifortune Trade and services 51 Shenzhen Shenzhen or investment Establishment 10 Jiali International China, Hong Kong China, Hong Kong Trade and services 51 or investment Guangdong, Guangdong, Establishment 11 Wankaida Software development 100 Shenzhen Shenzhen or investment 310 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Shareholding percentage Main place of (%) Acquisition No. Subsidiary Place of registration Business nature business method Direct Indirect Guangdong, Guangdong, Establishment 12 Dongguan Konka Manufacturing 75 25 Dongguan Dongguan or investment Establishment 13 Suining Konka Smart Sichuan, Suining Sichuan, Suining Wholesale 100 or investment Establishment 14 Konka Europe Germany, Frankfurt Germany, Frankfurt International trade 100 or investment Telecommunication Guangdong, Guangdong, Establishment 15 Manufacturing 75 25 Technology Shenzhen Shenzhen or investment Establishment 16 Konka Mobility China, Hong Kong China, Hong Kong Commerce 100 or investment Guangdong, Guangdong, Establishment 17 Mobile Interconnection Commerce 100 Shenzhen Shenzhen or investment Establishment 18 Sichuan Konka Sichuan, Yibin Sichuan, Yibin Manufacturing 100 or investment Establishment 19 Yibin Smart Sichuan, Yibin Sichuan, Yibin Manufacturing 100 or investment Establishment 20 Anhui Tong giường Anhui, Chuzhou Anhui, Chuzhou Manufacturing 100 or investment Establishment 21 Anhui Electrical Appliance Anhui, Chuzhou Anhui, Chuzhou Manufacturing 51 or investment Establishment 22 Frestec Refrigeration Henan, Xinxiang Henan, Xinxiang Manufacturing 51 or investment Establishment 23 Frestec Smart Home Henan, Xinxiang Henan, Xinxiang Manufacturing 51 or investment Establishment 24 Frestec Electrical Appliances Henan, Xinxiang Henan, Xinxiang Manufacturing 51 or investment 311 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Shareholding percentage Main place of (%) Acquisition No. Subsidiary Place of registration Business nature business method Direct Indirect Establishment 25 Frestec Household Appliances Henan, Xinxiang Henan, Xinxiang Manufacturing 51 or investment Establishment 26 Jiangsu Konka Smart Jiangsu, Changzhou Jiangsu, Changzhou Manufacturing 51 or investment Establishment 27 Kangjiatong Sichuan, Yibin Sichuan, Yibin Trade and services 100 or investment Guangdong, Guangdong, Establishment 28 Pengrun Technology Trade and services 51 Shenzhen Shenzhen or investment Establishment 29 Jiaxin Technology China, Hong Kong China, Hong Kong Trade and services 51 or investment Establishment 30 Beijing Konka Electronic Beijing Beijing Sale of home appliance 100 or investment Tianjin Pilot Free Tianjin Pilot Free Establishment 31 Tianjin Konka Service Industry 100 Trade Zone Trade Zone or investment Guangdong, Guangdong, Establishment 32 Konka Circuit Manufacturing 100 Shenzhen Shenzhen or investment Establishment 33 Boluo Precision Guangdong, Boluo Guangdong, Boluo Manufacturing 100 or investment Establishment 34 Boluo Konka Guangdong, Boluo Guangdong, Boluo Manufacturing 100 or investment Establishment 35 Hong Kong Konka China, Hong Kong China, Hong Kong International trade 100 or investment Establishment 36 Hongdin Invest China, Hong Kong China, Hong Kong Investment holding 100 or investment Chain Kingdom Memory Establishment 37 China, Hong Kong China, Hong Kong International trade 51 Technologies or investment 312 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Shareholding percentage Main place of (%) Acquisition No. Subsidiary Place of registration Business nature business method Direct Indirect Zhongkang Semiconductor Establishment 38 Zhe gian g, Shao xing Zhe gian g, Shao xing Trade and services 51 (Shao xing ) or investment Establishment 39 Hongjet China, Hong Kong China, Hong Kong Trade and services 51 or investment Establishment 40 Hongdin Trading China, Hong Kong China, Hong Kong International trade 100 or investment Establishment 41 Kanghao Technology Egypt, Cairo Egypt, Cairo International trade 67 or investment Establishment 42 Konka North America America, California America, California International trade 100 or investment Guangdong, Guangdong, Establishment 43 Konka Investment Capital market services 100 Shenzhen Shenzhen or investment Industrial park development and operation Establishment 44 Yibin Konka Technology Park Sichuan, Yibin Sichuan, Yibin 100 management or investment Guangdong, Guangdong, Establishment 45 Konka Capital Capital market services 100 Shenzhen Shenzhen or investment Guangdong, Guangdong, Establishment 46 Konka Suiyong Commercial services 51 Shenzhen Shenzhen or investment Guangdong, Guangdong, Establishment 47 Sheng xing Industrial Commercial services 51 Shenzhen Shenzhen or investment Guangdong, Guangdong, Establishment 48 Zhitong Technology Software and information technology services 51 Shenzhen Shenzhen or investment Guangdong, Guangdong, Establishment 49 Electronics Technology Manufacturing 100 Shenzhen Shenzhen or investment Guangdong, Guangdong, Establishment 50 Shenzhen Kangcheng Software and information technology services 100 Shenzhen Shenzhen or investment 313 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Shareholding percentage Main place of (%) Acquisition No. Subsidiary Place of registration Business nature business method Direct Indirect Guangdong, Guangdong, Establishment 51 Xiaojia Technology Retail trade 100 Shenzhen Shenzhen or investment Establishment 52 Haimen Konka Jiangsu, Nantong Jiangsu, Nantong Trade and services 100 or investment Establishment 53 Chengdu Konka Smart Sichuan, Chengdu Sichuan, Chengdu Trade and services 100 or investment Establishment 54 Chengdu Konka Electronic Sichuan, Chengdu Sichuan, Chengdu Manufacturing 100 or investment Guangdong, Guangdong, Establishment 55 XingDa HongYe Manufacturing 51 Zhongshan Zhongshan or investment Establishment 56 Liaoyang Kangshun Smart Liaoning, Liaoyang Liaoning, Liaoyang Wholesale 100 or investment Liaoyang Kangshun Comprehensive utilisation of renewable Establishment 57 Liaoning, Liaoyang Liaoning, Liaoyang 100 Renewable resources or investment Establishment 58 Nanjing Konka Jiangsu, Nanjing Jiangsu, Nanjing Wholesale 100 or investment Establishment 59 Konka Huanjia Liaoning, Dalian Liaoning, Dalian Renewable resources processing trade 51 or investment Establishment 60 Konka Huanjia (Henan) Henan, Lankao Henan, Lankao Renewable resources processing trade 51 or investment Establishment 61 Shanghai Konka Shanghai Shanghai Real estate 100 or investment Establishment 62 Yantai Kangjin Shandong, Yantai Shandong, Yantai Real estate 62.8 or investment Establishment 63 Jiangxi Konka Jiangxi, Jiu gian g Jiangxi, Jiu gian g Manufacturing and processing 51 or investment 314 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Shareholding percentage Main place of (%) Acquisition No. Subsidiary Place of registration Business nature business method Direct Indirect Establishment 64 Xinfeng Microcrystalline Jiangxi, Nanchang Jiangxi, Nanchang Manufacturing and processing 51 or investment Guangdong, Guangdong, Establishment 65 Shenzhen Nianhua Commercial services 100 Shenzhen Shenzhen or investment Guangdong, Guangdong, Establishment 66 Shenzhen KONSEMI Semiconductors 100 Shenzhen Shenzhen or investment Establishment 67 Chongqing Konka Chongqing Chongqing Software and information technology services 100 or investment Guangdong, Guangdong, Establishment 68 Konka Eco-Development Commercial services 51 Shenzhen Shenzhen or investment Industrial park development and operation Establishment 69 Suining Konka Industrial Park Sichuan, Suining Sichuan, Suining 100 management or investment Establishment 70 Konka Ronghe Zhe gian g, Jia xing Zhe gian g, Jia xing Wholesale and retail trade 51 or investment Suining Electronic Establishment 71 Sichuan, Suining Sichuan, Suining Commercial services 100 Technological Innovation or investment Shenzhen Chuangzhi Guangdong, Guangdong, Establishment 72 Wholesale 100 Electrical Appliances Shenzhen Shenzhen or investment Chongqing Konka Establishment 73 Chongqing Chongqing Research & experiment development 70 5 Optoelectronic Technology or investment Guangdong, Guangdong, Computer, telecommunications and other Establishment 74 Kowin Memory (Shenzhen) 100 Shenzhen Shenzhen electronic equipment manufacturing or investment Computer, telecommunications and other Establishment 75 Konka Xinyun Semiconductor Jiangsu, Yancheng Jiangsu, Yancheng 100 electronic equipment manufacturing or investment Jiangkang (Shanghai) Establishment 76 Shanghai Shanghai Research & experiment development 51 Technology or investment 315 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Shareholding percentage Main place of (%) Acquisition No. Subsidiary Place of registration Business nature business method Direct Indirect Ningbo Kanghr Electrical Electrical machinery and equipment Establishment 77 Zhe gian g, Ningbo Zhe gian g, Ningbo 60 Appliance manufacturing or investment Konka Intelligent Guangdong, Guangdong, Establishment 78 Research & experiment development 51 Manufacturing Shenzhen Shenzhen or investment Establishment 79 Suining Jiarun Property Sichuan, Suining Sichuan, Suining Real estate 100 or investment Ecological protection and environmental Establishment 80 Yibin Kangrun Sichuan, Yibin Sichuan, Yibin 67 governance services or investment Hainan Konka Material Establishment 81 Hainan, Haikou Hainan, Haikou Commercial services 100 Technology or investment Jiangxi High Transparent Establishment 82 Jiangxi, Jiu gian g Jiangxi, Jiu gian g Manufacturing and processing 51 Substrate or investment Computer, telecommunications and other Establishment 83 Nantong Hongdin Jiangsu, Nantong Jiangsu, Nantong 100 electronic equipment manufacturing or investment Establishment 84 Chuzhou Konka Anhui, Chuzhou Anhui, Chuzhou Manufacturing 94.9 or investment Establishment 85 Konka Soft Electronic Sichuan, Suining Sichuan, Suining Manufacturing 97.5 or investment Establishment 86 Konka Hongye Electronics Sichuan, Suining Sichuan, Suining Manufacturing 95.05 or investment Wholesale of computers, software and auxiliary Establishment 87 Kowin Memory (Hong Kong) China, Hong Kong China, Hong Kong 100 equipment or investment Establishment 88 Konka Cross-border (Hebei) Hebei, Handan Hebei, Handan Wholesale 100 or investment Establishment 89 Konka Huazhong Hunan, Changsha Hunan, Changsha Commercial services 100 or investment 316 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Shareholding percentage Main place of (%) Acquisition No. Subsidiary Place of registration Business nature business method Direct Indirect Ecological protection and environmental Establishment 90 Yibin Kangrun Medical Sichuan, Yibin Sichuan, Yibin 63.65 governance services or investment Manufacture of household cleaning and sanitary Establishment 91 Shanxi Konka Intelligent Shanxi, Xi'an Shanxi, Xi'an 51 electrical appliances or investment Chongqing Xinyuan Science and technology promotion and Establishment 92 Chongqing Chongqing 75 Semiconductor application services or investment Establishment 93 Anlu Konka Hubei, Anlu Hubei, Anlu Software and information technology services 100 or investment Guangdong, Guangdong, Establishment 94 Kanghong Dongsheng Commercial services 95.09 Shenzhen Shenzhen or investment Guizhou, Qiannan Guizhou, Qiannan Guizhou Konka New Material Buyi and Miao Buyi and Miao Establishment 95 Manufacturing and processing 51 Technology Autonomous Autonomous or investment Prefecture Prefecture Establishment 96 Guangdong Xinwei Guangdong, Lvfeng Guangdong, Lvfeng Semiconductors 100 or investment Guizhou, Qiannan Guizhou, Qiannan Guizhou Kanggui Material Buyi and Miao Buyi and Miao Establishment 97 Manufacturing and processing 70 Technology Autonomous Autonomous or investment Prefecture Prefecture Establishment 98 Nantong Kanghai Jiangsu, Nantong Jiangsu, Nantong Real estate 51 or investment Establishment 99 Chongqing Kangyiyun Chongqing Chongqing Real estate 80 or investment Establishment 100 Jiangxi Konka High-tech Park Jiangxi, Shangrao Jiangxi, Shangrao Commercial services 100 or investment Shangrao Konka Electronic Establishment 101 Jiangxi, Shangrao Jiangxi, Shangrao Research & experiment development 100 Technology Innovation or investment 317 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Shareholding percentage Main place of (%) Acquisition No. Subsidiary Place of registration Business nature business method Direct Indirect Establishment 102 Guizhou Konka New Energy Guizhou, Kaili Guizhou, Kaili Manufacture of non-metallic mineral products 98 or investment Establishment 103 Zhe gian g Konka Electronic Zhe gian g, Shao xing Zhe gian g, Shao xing Research & experiment development 100 or investment Zhe gian g Konka Technology Establishment 104 Zhe gian g, Shao xing Zhe gian g, Shao xing Commercial services 51 49 Industry or investment Establishment 105 Xi'an Konka Intelligent Shanxi, Xi'an Shanxi, Xi'an Wholesale 51 or investment Computer, telecommunications and other Establishment 106 Xi'an Konka Network Shanxi, Xi'an Shanxi, Xi'an 100 electronic equipment manufacturing or investment Xi'an Kanghong Technology Establishment 107 Shanxi, Xi'an Shanxi, Xi'an Commercial services 40 60 Industry or investment Xi'an Konka Intelligent Establishment 108 Shanxi, Xi'an Shanxi, Xi'an Retail trade 100 Technology or investment Establishment 109 Anhui Konka Low Carbon Anhui, Ma'anshan Anhui, Ma'anshan Wholesale 55 or investment Guangdong, Guangdong, Establishment 110 Kanghong Xintong Commercial services 95.09049 Shenzhen Shenzhen or investment Establishment 111 Songyang Industry Operation Zhe gian g, Lishui Zhe gian g, Lishui Software and information technology services 51 or investment Guangdong, Guangdong, Computer, telecommunications and other Establishment 112 Kangyan Technology 100 Shenzhen Shenzhen electronic equipment manufacturing or investment Konka Photovoltaic Science and technology promotion and Establishment 113 Zhe gian g, Hangzhou Zhe gian g, Hangzhou 60 Technology application services or investment Establishment 114 Songyang Konka Intelligent Zhe gian g, Lishui Zhe gian g, Lishui Wholesale 100 or investment 318 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Shareholding percentage Main place of (%) Acquisition No. Subsidiary Place of registration Business nature business method Direct Indirect Electrical machinery and equipment Establishment 115 Konka North China Tianjin Tianjin 100 manufacturing or investment Guangdong, Guangdong, Establishment 116 Digital Technology Software and information technology services 100 Shenzhen Shenzhen or investment ( 2 ) Major non-wholly-owned subsidiaries Dividends declared to be Profit or loss attributable Shareholding of minority distributed to minority Closing balance of minority Subsidiary to minority shareholders shareholders shareholders in the current shareholders' equities in the current year year Shanxi Konka Intelligent Appliance Co., Ltd. 49.00% -3,799,466.73 193,980,534.42 ( 3 ) Key financial data on major non-wholly-owned subsidiaries Closing balance Subsidiary Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Shanxi Konka Intelligent 523,223,416.76 566,375,884.26 1,089,599,301.02 398,648,732.52 295,071,926.82 693,720,659.34 Appliance Co., Ltd. 319 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) (Continued) Opening balance Subsidiary Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Shanxi Konka Intelligent 744,667,031.91 89,068,283.25 833,735,315.16 419,779,159.30 10,323,500.45 430,102,659.75 Appliance Co., Ltd. (Continued) Amount incurred in the current year Subsidiary Cash flows from operating Operating income Net profit Total comprehensive income activities Shanxi Konka Intelligent Appliance Co., Ltd. 243,470,872.39 -7,754,013.73 -7,754,013.73 138,204,929.56 (Continued) Amount incurred last year Subsidiary Cash flows from operating Operating income Net profit Total comprehensive income activities Shanxi Konka Intelligent Appliance Co., Ltd. 146,157,865.44 190,320,327.09 190,320,327.09 12,271,653.60 320 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 2. Interests in joint ventures or associated enterprises ( 1 ) Major joint ventures or associated enterprises Shareholding Accounting Name of the joint Main percentage (%) processing method Place of Business venture or associated place of for investment in registration nature enterprise business joint ventures or Direct Indirect associated enterprises Dongfang Jiakang No.1 (Zhuhai) Private Equity Investment Fund (LP) (formerly: Investment Zhuhai Zhuhai 49.95 Equity method Dongfang Konka No. management 1 (Zhuhai) Private Equity Investment Fund (LP)) Professional Shenzhen Jielunte Shenzhen Shenzhen machinery 42.79 Equity method Technology Co., Ltd. manufacturing ( 2 ) Key financial data on significant associated enterprises Amount incurred at the end of the year/in the current year Dongfang Jiakang No.1 (Zhuhai) Private Equity Item Investment Fund (LP) Shenzhen Jielunte (formerly: Dongfang Konka Technology Co., Ltd. No. 1 (Zhuhai) Private Equity Investment Fund (LP)) Current assets 686,882,241.74 274,817,240.18 Non-current assets 338,361,205.79 Total assets 686,882,241.74 613,178,445.97 Current liabilities 10,026,785.45 261,433,145.90 Non-current liabilities 133,388,974.62 Total liabilities 10,026,785.45 394,822,120.52 Equities of minority shareholders 9,322,847.51 Equities attributable to shareholders of the 676,855,456.29 209,033,477.94 parent company Share of net assets calculated based on the 338,089,300.42 94,917,575.00 shareholding Adjustments 321 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount incurred at the end of the year/in the current year Dongfang Jiakang No.1 (Zhuhai) Private Equity Item Investment Fund (LP) Shenzhen Jielunte (formerly: Dongfang Konka Technology Co., Ltd. No. 1 (Zhuhai) Private Equity Investment Fund (LP)) - Goodwill - Internal unrealised profit - Others Carrying value of equity investments in 338,089,300.42 94,917,575.00 associated enterprises Fair values of equity investments of joint ventures with quoted prices Operating income 410,594,556.87 Finance costs -558,256.35 4,030,883.95 Income tax expense 1,864,514.10 Net profit 32,981,401.16 -12,883,145.89 Net profit from discontinued operations Other comprehensive income Total comprehensive income 32,981,401.16 -12,883,145.89 Dividends received from associated enterprises in the current year (Continued) Amount incurred at the beginning of the year/in last year Dongfang Jiakang No.1 (Zhuhai) Private Equity Item Investment Fund (LP) Shenzhen Jielunte (formerly: Dongfang Konka Technology Co., Ltd. No. 1 (Zhuhai) Private Equity Investment Fund (LP)) Current assets 971,913,521.98 253,227,910.38 Non-current assets 288,320,463.89 Total assets 971,913,521.98 541,548,374.27 322 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount incurred at the beginning of the year/in last year Dongfang Jiakang No.1 (Zhuhai) Private Equity Item Investment Fund (LP) Shenzhen Jielunte (formerly: Dongfang Konka Technology Co., Ltd. No. 1 (Zhuhai) Private Equity Investment Fund (LP)) Current liabilities 3,340.00 233,990,644.75 Non-current liabilities 74,263,430.52 Total liabilities 3,340.00 308,254,075.27 Equities of minority shareholders 12,856,913.14 Equities attributable to shareholders of the 971,910,181.98 220,437,385.86 parent company Share of net assets calculated based on the 483,905,786.35 99,748,594.97 shareholding Adjustments - Goodwill - Internal unrealised profit - Others Carrying value of equity investments in 483,905,786.35 99,748,594.97 associated enterprises Fair values of equity investments of joint ventures with quoted prices Operating income 514,976,783.54 Finance costs -461,885.81 -430,655.59 Income tax expense Net profit 16,036,036.59 7,917,120.47 Net profit from discontinued operations Other comprehensive income Total comprehensive income 16,036,036.59 7,917,120.47 Dividends received from associated enterprises in the current year (3) Combined financial data on insignificant joint ventures and associated enterprises 323 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount incurred at the Amount incurred at the end of Item beginning of the year/in last the year/in the current year year Associated enterprise Total carrying value of investment 5,133,476,987.87 5,767,578,574.26 The total of following items according to the shareholding proportions Net profit -182,806,294.40 93,186,179.48 Other comprehensive income -86,041.63 -2,814,803.62 Total comprehensive income -182,892,336.03 90,371,375.86 X. Government grants 1. Liability items involving government subsidies Amount recognised Amount Subsidies as non- transferred Other Related Account Opening increased in operating to other changes in Closing to assets/ title balance the current income in incomes in the current balance income year the the current year current year year Related to Deferred 334,844,966.31 142,412,107.74 49,036,136.15 -3,085,700.00 425,135,237.90 assets/ revenue income 2. Government subsidies recognised as profit and loss of the Reporting Period Amount incurred in the current Account title Amount incurred last year year Other income 270,618,031.94 928,712,500.81 XI. Risks Related to Financial Instruments The Group's main financial instruments include borrowings, accounts receivable, accounts payable, trading financial assets and liabilities, etc. Please refer to Note VI for detailed descriptions of various financial instruments. The risks related to these financial instruments and the risk management policies adopted by the Group to mitigate these risks are described below. The management of the Group manages and monitors these risk exposures to ensure that these risks are controlled within a limited scope. 1. Management objectives and policies for various risks The Group's objective in engaging in the risk management is to achieve the proper balance between the risks and benefits, minimise the negative impact of these risks on the Company's operating results, and maximise the profits of shareholders and other equity investors. Based on the risk management goal, the basic strategy of the Company's risk management is determining and analysing the various risks faced by the Company, setting up the bottom line of risk and conducting appropriate risk management, and timely supervising various risks in a reliable way 324 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) and controlling the risk within the range of limit. ( 1 ) Market risk 1 ) Exchange rate 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 Group is related to USD. Except the procurement and sales in USD of the Company's subsidiaries Hong Kong Konka, Hongdin Trading, Chain Kingdom Memory Technologies, Hongjet and Jiali, the Group's other primary business activities are settled in RMB. The currency risk arising from the assets and liabilities of such balance in USD may affect the Group's operating results. As of 31 December 2023, the Group's assets and liabilities were mainly the balance in RMB except for the assets or liabilities of a balance in USD as listed below. Item Closing balance Opening balance Monetary assets 91,184,116.43 106,315,046.38 Accounts receivable 85,032,871.75 86,909,542.13 Other accounts receivable 110,836,591.33 111,545,094.65 Other payables 3,453,133.32 205,546.18 Short-term loans 15,090,462.34 Accounts payable 4,828,295.25 24,084,328.20 Interest payable 10,875.01 The Group pays close attention to the impact of exchange rate changes on the Group's foreign exchange risk, and requires major companies in the Group that purchase and sell in foreign currency to pay attention to the changes in foreign currency assets and liabilities, manage the Group's foreign currency net asset exposure in a unified way, implement single currency settlement, and reduce the scale of foreign currency assets and liabilities, so as to reduce foreign exchange risk exposure. 2 ) Interest rate risk The Group bears interest rate risk due to interest rate changes of interest-bearing financial assets and liabilities. The Group's interest bearing financial assets are mainly bank deposits, of which the majority of the variable interest rates are short-term in nature, while the interest bearing financial liabilities are mainly bank borrowings and corporate bonds. The Group's long-term bank borrowings and corporate bonds are at fixed interest rates. The risk of cash flow changes of financial instruments caused by interest rate changes is mainly related to short-term bank borrowings with floating interest rates. The Group's policy is to maintain the floating interest rates of such borrowings to eliminate the fair value risk of interest rate changes. As of 31 December 2023, the balance of such short-term borrowings was RMB6,390,592,056.27. ( 2 ) Credit risk As of 31 December 2023, the maximum credit risk exposure that may cause financial losses to the Group mainly came from losses generated from the Group's financial assets due to failure of the other party to a contract to perform its obligations and the financial guarantee undertaken by the Group, including: The carrying amount of financial assets recognised in the consolidated balance sheet; for financial 325 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) instruments measured at fair value, the book value reflects their risk exposure, but not the maximum risk exposure, and the maximum risk exposure will change with the change of future fair value. In order to reduce credit risk, the Group has set up a group to determine the credit limit, conduct credit approval, and implement other monitoring procedures to ensure that necessary measures are taken to recover overdue claims. In addition, the Group reviews the recovery of each single receivable on each balance sheet date to ensure that sufficient provision for bad debts is made for the unrecoverable amount. Therefore, the Group's management believes that the Group's credit risk has been greatly reduced. The Group's working capital is deposited in banks with a high credit rating, so the credit risk of working capital is low. The Group has adopted necessary policies to ensure that all customers have good credit records. Except for the top five customers in terms of the amount of accounts receivable, the Group has no other major credit concentration risks. For the financial assets of the Group that have been individually impaired, please refer to 4. Accounts receivable and 7. Other receivables in Note VI. ( 3 ) Liquidity risk Liquidity risk refers to the risk that the Group is unable to fulfil its financial obligations on the due date. The Group manages liquidity risk in the method of ensuring that there is sufficient liquidity to fulfil debt obligations without causing unacceptable loss or damage to the Group's reputation. In order to mitigate the liquidity risk, the Group's management has carried out a detailed inspection on the liquidity of the Group, including the maturity of accounts payable and other payables, bank credit line and bond financing. The conclusion is that the Group has sufficient funds to meet the needs of the Group's short-term debts and capital expenditure. The analysis of the financial assets and financial liabilities held by the Group based on the maturity period of the undiscounted remaining contractual obligations is as follows: 326 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount as of 31 December 2023: Item Within one year One to two years Two to five years Over five years Total Financial assets Monetary assets 6,506,359,577.02 6,506,359,577.02 Held-for-trading financial assets 469,636,700.78 469,636,700.78 Notes receivable 533,171,949.15 533,171,949.15 Accounts receivable 1,450,456,203.34 82,283,751.73 149,915,722.31 43,890,295.70 1,726,545,973.08 Other accounts receivable 233,851,669.95 73,168,059.30 682,046,038.26 55,300.00 989,121,067.51 Long-term receivables Other current assets 2,359,159,468.75 2,359,159,468.75 Financial liabilities Short-term loans 6,390,592,056.27 6,390,592,056.27 Notes payable 990,482,927.20 990,482,927.20 Accounts payable 2,002,263,324.19 448,060,250.16 267,430,053.63 9,078,047.99 2,726,831,675.97 Other payables 1,122,286,310.07 436,261,216.60 300,909,046.88 63,335,331.59 1,922,791,905.14 Payroll payable 304,733,103.63 304,733,103.63 Non-current liabilities due within 5,314,147,396.36 5,314,147,396.36 one year 327 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Long-term loans 4,391,903,101.00 2,477,828,034.07 909,418,944.81 7,779,150,079.88 Bonds payable 2,426,992,578.67 2,426,992,578.67 Long-term payables 6,135,734.07 6,135,734.07 328 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 2. Sensitivity analysis The Group adopts sensitivity analysis technology to analyse the possible impact of reasonable and possible changes of risk variables on current profits/losses or shareholders' equity. As any risk variable rarely changes in isolation, and the correlation between variables will have a significant effect on the final impact amount of the change of a risk variable, the following content is based on the assumption that the change of each variable is independent. ( 1 ) Sensitivity analysis of foreign exchange risk Assumption for the sensitivity of foreign exchange risk: All net investment hedging and cash flow hedging of overseas operations are highly effective. On the basis of the above assumption, under the condition that other variables remain unchanged, the impact of reasonable changes in the exchange rate on current profits/losses and equity after tax is as follows: 2023 2022 Exchange Item rate Impact on Impact on fluctuations Impact on net Impact on net shareholders' shareholders' profit profit equity equity Appreciation of 1% USD 16,574,067.76 12,261,381.38 15,551,310.88 11,270,323.99 against RMB Depreciation of 1% USD -16,574,067.76 -12,261,381.38 -15,551,310.88 -11,270,323.99 against RMB ( 2 ) Sensitivity analysis of interest rate risk Sensitivity analysis of interest rate risk is based on the following assumptions: Changes in market interest rates affect the interest income or expense of financial instruments with variable interest rates; For financial instruments with fixed interest rates measured at fair value, market interest rate changes affect only their interest income or expense; Changes in the fair values of derivative financial instruments and other financial assets and liabilities are calculated at the market interest rate on the balance sheet date by discounted cash flow. On the basis of the above assumptions and under the condition that other variables remain unchanged, the impact of reasonable changes in the interest rate on current profits/losses and equity after tax is as follows: 2023 2022 Interest rate Item Impact on fluctuations Impact on net Impact on Impact on net shareholders' profit shareholders' equity profit equity Borrowings at Up 0.5% -24,196,276.74 -23,679,719.04 -28,813,464.20 -28,058,882.34 floating interest rates Borrowings at Down 0.5% 24,196,276.74 23,679,719.04 28,813,464.20 28,058,882.34 329 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 2023 2022 Interest rate Item Impact on fluctuations Impact on net Impact on Impact on net shareholders' profit shareholders' equity profit equity floating interest rates 330 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) XII. Disclosure of Fair Value 1. Closing fair value of assets and liabilities measured at fair value Cl o s i n g fa i r va l u e Item Level-1 fair value Level-2 fair value Level-3 fair value Total measurement measurement measurement I. Continuous fair value measurement (I) Held-for-trading financial assets 469,636,700.78 469,636,700.78 1. Financial assets measured at fair value through profit and loss for 469,636,700.78 469,636,700.78 the Reporting Period (II) Accounts receivable financing 173,396,326.14 173,396,326.14 ii. Other debt investments iii. Other equity instruments investments 23,841,337.16 23,841,337.16 iv. Investment properties (V) Other non-current financial assets 2,009,676,398.00 2,009,676,398.00 Total assets continuously measured at fair value 173,396,326.14 2,503,154,435.94 2,676,550,762.08 Total liabilities continuously measured at fair value II. Non-continuous fair value measurement Total assets not continuously measured at fair value Total liabilities not continuously measured at fair value 331 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 2. Basis for determining the market price of continuous and non-continuous level-1 fair value measurement projects The first level of the input is an unadjusted quoted price in an active market for the same assets and liabilities available on the measurement date. 3. Qualitative and quantitative data on valuation techniques and important parameters adopted for continuous and non-continuous level-2 fair value measurement projects The Level 2 fair value measurement of input value at Level 2 is the input value observable directly or indirectly of relevant assets or liabilities exclusive of input value at Level 1. 4. Qualitative and quantitative data on valuation techniques and important parameters adopted for continuous and non-continuous level-3 fair value measurement projects The third level of the input is the unobservable input of related assets and liabilities. XIII. Related Party and Related Party Transactions Related party relationship ( 1 ) Parent company of the Company Shareholding Voting right percentage of percentage of Name of the parent Place of Registered the parent the parent Business nature company registration capital company in company in the Company the Company (%) (%) Tourism, real RMB12 OCT Group Shenzhen estate, electronics 29.999997 29.999997 billion industry The ultimate controller of the Company is State-owned Assets Supervisor Commission of the State Council. ( 2 ) Subsidiaries of the Company Please refer to note IX-1. (1) Subsidiaries for the information of subsidiaries. ( 3 ) Joint ventures and associated enterprises of the Company Please refer to Note IX-2. (1) Significant joint ventures and associated enterprises for details of significant joint ventures or associated enterprises of the Company. Information on other joint ventures or associated enterprises having connected transactions with the Company in the current year, or forming balance due to connected transactions made in previous period: Name Relationship with the Company Anhui Kaikai Shijie E-commerce Co., Ltd. Associated enterprise Anhui Kangfu New Energy Co., Ltd. Associated enterprise Anhui Kangta Supply Chain Management Co., Ltd. Associated enterprise Chuzhou Kangxin Health Industry Development Co., Ltd. Associated enterprise Chutian Dragon Co., Ltd. Associated enterprise 332 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Name Relationship with the Company Orient Excellent (Zhuhai) Asset Management Co., Ltd. Associated enterprise Dongguan Kangjia New Materials Technology Co., Ltd. Associated enterprise Dongguan Konka Smart Electronic Technology Co., Ltd. Associated enterprise Dongguan Guankang Yuhong Investment Co., Ltd. Associated enterprise Feidi Technology (Shenzhen) Co., Ltd. Associated enterprise Guangdong Kangyuan Semiconductor Co., Ltd. Associated enterprise Hefei KONSEMI Storage Technology Co., Ltd. Associated enterprise Henan Kangfei Intelligent Electric Appliance Co., Ltd. Associated enterprise Kangkong Venture Capital (Shenzhen) Co., Ltd. Associated enterprise Nantong Kang gian Technology Industrial Park Operations and Associated enterprise Management Co., Ltd. Pu giường Jiakang Technology Co, Ltd. Associated enterprise Shandong Kangfei Intelligent Electrical Appliances Co., Ltd. Associated enterprise Shenzhen Aimijiakang Technology Co., Ltd. Associated enterprise Shenzhen Kanghong xing Intelligent Technology Co., Ltd. Associated enterprise Shenzhen Kangpeng Digital Technology Co., Ltd. Associated enterprise Shenzhen KONKA E-display Co., Ltd. Associated enterprise Shenzhen Kangying Semiconductor Technology Co., Ltd. Associated enterprise Shenzhen Morsemi Semiconductor Technology Co., Ltd. Associated enterprise Shenzhen Kangjia Jiapin Intelligent Electrical Apparatus Associated enterprise Technology Co., Ltd. Shenzhen Kangxi Technology Innovation Development Co., Associated enterprise Ltd. Shenzhen RF-Llink Technology Co., Ltd. Associated enterprise Shenzhen Yaode Technology Co., Ltd. Associated enterprise Shenzhen Zhongkang Beidou Technology Co., Ltd. (formerly Associated enterprise named: Shenzhen Zhongbing Konka Technology Co., Ltd.) Sichuan Chengrui Real Estate Co., Ltd. Associated enterprise Guangdong Adreamer Information Technology Co., Ltd. Associated enterprise (formerly known as Sichuan Huayi Jiakang Technology Co., 333 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Name Relationship with the Company Ltd.) KK Smartech Limited Associated enterprise Yantai Kangyun Industrial Development Co., Ltd. Associated enterprise Yancheng Kangyan Information Industry Investment Associated enterprise Partnership (Limited Partnership) Yibin Kanghui Electronic Information Industry Equity Associated enterprise Investment Partnership (Limited Partnership) E3info (Hainan) Technology Co., Ltd. Associated enterprise Shandong Econ Technology Co., Ltd. Associated enterprise Chongqing Kang gian Photoelectric Technology Co., Ltd. Associated enterprise Chongqing Kangxin Equity Investment Fund Limited Associated enterprise Partnership (Limited Partnership) Chongqing Kangyiqing Technology Co., Ltd. Associated enterprise Chongqing Qingjia Electronics Co., Ltd. Associated enterprise Sichuan Hongxinchen Real Estate Development Co., Ltd. Associated enterprise Wuhan Kangtang Information Technology Co., Ltd. Associated enterprise Foshan Zhu gian g Media Creative Park Cultural Development Associated enterprise Co., Ltd. Panxu Intelligence Co., Ltd. Associated enterprise ( 4 ) Other related parties Names of other related parties Relationship with the Company HOHOELECTRICAL&FURNITURECO.,LIMITED Minority shareholder of subsidiary Beijing Xuri Sheng xing Technology Co., Ltd. Minority shareholder of subsidiary Chuzhou Hanshang Electric Appliance Co., Ltd. Minority shareholder of subsidiary Korea Electric Group Co., Ltd. Minority shareholder of subsidiary Hu Zehong Minority shareholder of subsidiary Huanjia Group Co., Ltd. Minority shareholder of subsidiary Shenzhen New Journey Energy Conservation and Minority shareholder of subsidiary Environmental Protection Service Co., Ltd. Central Enterprises Poverty Alleviation (Jiangxi) Industrial Minority shareholder of subsidiary 334 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Names of other related parties Relationship with the Company Fund Partnership (L.P.) Chongqing Liangshan Industrial Investment Co., Ltd. Minority shareholder of subsidiary Zhu Xinming Minority shareholder of subsidiary AUJET INDUSTRY LIMITED Minority shareholder of subsidiary Chuzhou State-owned Assets Management Co., Ltd. Minority shareholder of subsidiary Shenzhen Unifortune Supply Chain Management Co., Ltd. Minority shareholder of subsidiary Guizhou Huajinrun Technology Co. Ltd. Minority shareholder of subsidiary Shenzhen Henglongtong Technology Co., Ltd. Minority shareholder of subsidiary Suiyong Rongxin Asset Management Co., Ltd. Minority shareholder of subsidiary Shenzhen Qianhai Datang Technology Co., Ltd. Minority shareholder of subsidiary Wu Guoren Minority shareholder of subsidiary Xiao Yongsong Minority shareholder of subsidiary Hu Zehong Minority shareholder of subsidiary Jiangsu Korea Electric Group Co., Ltd. Minority shareholder of subsidiary The company controlled by the minority Jiangxi Meiji Enterprise Co., Ltd. shareholders of the subsidiary The company controlled by the minority Jiangxi Xinzixin Real Estate Co., Ltd. shareholders of the subsidiary Close family members of minority Dai Rong xing shareholders of the subsidiary Zhe gian g Donghong Asset Management Co., Ltd. Subsidiary of associated enterprise AMobile Intelligent Corp. Ltd. Subsidiary of associated enterprise Yantai Kangyue Investment Co., Ltd. Subsidiary of associated enterprise Chongqing Lanlv Moma Real Estate Development Co., Ltd. Subsidiary of associated enterprise Anhui Jiasen Precision Technology Co., Ltd. Subsidiary of associated enterprise Chuzhou Jielunte Mould Plastic Co., Ltd. Subsidiary of associated enterprise Guangdong Jielunte Technology Co., Ltd. Subsidiary of associated enterprise Kunshan Jielunte Mould Plastic Co., Ltd. Subsidiary of associated enterprise Dongguan Kangjie Plastic Mould Co., Ltd. Subsidiary of associated enterprise 335 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Names of other related parties Relationship with the Company Dongguan Jielunte Plastic Mould Technology Co., Ltd. Subsidiary of associated enterprise Dongguan Xutongda Mould Plastic Co., Ltd. Subsidiary of associated enterprise Shenzhen Kangying Storage Technology Co., Ltd. Subsidiary of associated enterprise Shenzhen E-Display Commercial Display Service Co., Ltd. Subsidiary of associated enterprise Konka E-Display (Hong Kong) Co., Ltd. Subsidiary of associated enterprise Guangdong KONKA E-display Co., Ltd. Subsidiary of associated enterprise Shanghai Jiyi Environmental Technology Co., Ltd. Subsidiary of associated enterprise 2. Related-party transactions ( 1 ) Related party transactions involving the purchase and sale of goods and the supply and acceptance of services 1 ) Purchasing goods/receiving services Amount incurred Related party Amount incurred Related party in the current transaction last year year Chuzhou Hanshang Electric Appliance Co., Ltd. Purchase of goods 331,347,005.28 361,343,092.66 Pu giường Jiakang Technology Co, Ltd. Purchase of goods 170,595,512.46 346,728,064.51 OCT Group Co., Ltd. and its subsidiaries and Purchase of goods 83,132,471.79 44,307,009.34 associates and services Dongguan Guankang Yuhong Investment Co., Ltd. Purchase service 44,767,575.56 2,539,413.51 Shenzhen Jielunte Technology Co., Ltd. and its Purchase of goods 41,713,723.62 30,219,079.03 subsidiaries Anhui Kaikai Shijie E-commerce Co., Ltd. and its Purchase of goods 23,456,578.00 10,162,140.56 subsidiaries Korea Electric Group Co., Ltd. and its subsidiaries Purchase of goods 18,096,478.28 35,518,472.38 Shenzhen KONKA E-display Co., Ltd. and its Purchase of goods 15,984,953.15 28,026,932.54 subsidiaries Dongguan Konka Smart Electronic Technology Co., Purchase of goods 12,468,662.09 22,735,162.01 Ltd. and services Dongguan Kangjia New Materials Technology Co., Purchase of goods 10,995,157.55 12,289,697.95 Ltd.. KK Smartech Limited Purchase of goods 10,415,968.34 45,029,492.58 AMobile Intelligent Corp. Ltd. Purchase of goods 7,383,664.55 727,144.88 336 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount incurred Related party Amount incurred Related party in the current transaction last year year Shenzhen Kangjia Jiapin Intelligent Electrical Purchase of goods 6,126,037.72 426,363.95 Apparatus Technology Co., Ltd. Shenzhen Kangying Semiconductor Technology Co., Purchase of goods 6,102,501.84 41,158,319.46 Ltd. and its subsidiaries HOHOELECTRICAL&FURNITURECO.,LIMITED Purchase of goods 5,864,370.25 19,585,193.41 Shenzhen Kanghong xing Intelligent Technology Co., Purchase of goods 8,531,405.75 Ltd. Purchase of goods Subtotal of other related parties 1,978,824.14 4,279,220.85 and services ( 2 ) Information of sales of goods and provision of labour service Related party Amount incurred Amount incurred Related party transaction in the current last year year Chuzhou Hanshang Electric Appliance Co., Ltd. Sales of goods 222,670,602.32 107,734,901.38 Sales of goods and Korea Electric Group Co., Ltd. and its subsidiaries provision of labour 79,556,345.56 161,244,155.22 service Sales of goods and OCT Group Co., Ltd. and its subsidiaries and provision of labour 78,023,377.38 178,677,010.72 associates service Sales of goods and Shenzhen KONKA E-display Co., Ltd. and its provision of labour 44,349,541.96 39,405,582.28 subsidiaries service Sales of goods and Shenzhen Jielunte Technology Co., Ltd. and its provision of labour 43,851,112.38 157,730,471.80 subsidiaries service Shandong Kangfei Intelligent Electrical Appliances Sales of goods 21,015,219.00 52,139,839.35 Co., Ltd. Sales of goods and E3info (Hainan) Technology Co., Ltd. and its provision of labour 12,779,347.18 7,676,760.48 subsidiaries service Dongguan Konka Smart Electronic Technology Co., Sales of goods 9,556,588.12 18,795,403.33 Ltd. Sales of goods and Hefei KONSEMI Storage Technology Co., Ltd. provision of labour 7,988,071.97 45,466,225.40 service 337 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Related party Amount incurred Amount incurred Related party transaction in the current last year year Sales of goods and Shenzhen Kangying Semiconductor Technology Co., provision of labour 7,902,974.42 9,193,457.83 Ltd. and its subsidiaries service Shenzhen Kangjia Jiapin Intelligent Electrical Provision of labour 4,770,320.84 Apparatus Technology Co., Ltd. service Nantong Kang gian Technology Industrial Park Provision of labour 4,716,981.13 14,150,943.39 Operations and Management Co., Ltd. service Yancheng Kangyan Information Industry Investment Provision of labour 3,282,937.63 3,539,336.04 Partnership (Limited Partnership) service Dongguan Kangjia New Materials Technology Co., Sales of goods 3,406,469.40 Ltd. Chongqing Kangxin Equity Investment Fund Provision of labour 2,462,263.85 Limited Partnership (Limited Partnership) service Shenzhen Aimijiakang Technology Co., Ltd. Sales of goods 1,455,404.13 42,265,781.54 Sales of goods and Anhui Kaikai Shijie E-commerce Co., Ltd. and its provision of labour 1,413,824.79 189,148,548.38 subsidiaries service Yibin Kanghui Electronic Information Industry Sales of goods 1,361,406.01 Equity Investment Partnership (Limited Partnership) Sales of goods and Sichuan Huayi Jiakang Technology Co., Ltd. provision of labour 83,636.22 1,095,847.95 service HOHOELECTRICAL&FURNITURECO.,LIMITED Sales of goods 21,684,854.42 Sales of goods and Subtotal of other related parties provision of labour 5,778,315.56 39,382,783.10 service ( 3 ) Related party leases Lease situation Type of leased Lease fee recognised Lease fee recognised Lessor Lessee assets in the current year last year Konka Ventures Commercial OCT Group Co. Ltd. and Development (Shenzhen) residences and 30,302,719.98 25,078,697.16 its subsidiaries Co., Ltd. office buildings Commercial OCT Group Co. Ltd. and Konka Group Co., Ltd. residences and 1,819,825.44 its subsidiaries office buildings ( 4 ) Related party guarantees 338 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 1 ) The Company was guarantor Whether Contracted Actual the guarantee guarantee Start date of Expiry date Secured party Currency guarantee amount amount guarantee of guarantee is (RMB'0,000) (RMB'0,000) completed 19 January 18 January Boluo Precision 4,000.00 1,800.00 CNY No 2023 2024 25 August 25 August Boluo Precision 4,500.00 4,103.40 CNY No 2023 2026 31 January Konka Circuit 10,000.00 4,307.67 CNY 19 July 2023 No 2027 14 September 13 September Konka Circuit 5,000.00 1,085.27 CNY No 2022 2023 22 December 21 December Konka Circuit 5,000.00 3,212.27 CNY No 2022 2023 Anhui Tong giường 3,000.00 3,000.00 CNY 2 June 2022 1 June 2023 No 19 October 31 December Anhui Tong giường 10,000.00 6,440.00 CNY No 2023 2024 6 February 5 February Anhui Tong giường 10,000.00 8,000.00 CNY No 2023 2024 14 August Anhui Tong giường 5,000.00 3,600.00 CNY 9 April 2024 No 2023 20 November Anhui Tong giường 3,000.00 3,000.00 CNY 19 May 2025 No 2023 6 January 5 January Liaoyang Kangshun Smart 5,000.00 CNY No 2023 2024 Konka Xinyun 6,000.00 1,550.00 CNY 26 May 2022 25 May 2024 No Semiconductor Konka Xinyun 20,000.00 5,137.50 CNY 12 July 2021 11 July 2022 No Semiconductor 24 November 10 January Electronics Technology 8,500.00 6,064.29 CNY No 2022 2024 26 September 11 August Electronics Technology 50,000.00 50,000.00 CNY No 2023 2024 24 March 23 March Dongguan Konka 5,000.00 5,000.00 CNY No 2023 2024 Dongguan Konka 80,000.00 33,174.19 CNY 23 June 2021 7 May 2031 No Telecommunication 7,500.00 5,000.00 CNY 23 July 2023 23 July 2024 No Technology Sichuan Konka 4,000.00 3,000.00 CNY 23 May 2023 26 April 2026 No 339 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Whether Contracted Actual the guarantee guarantee Start date of Expiry date Secured party Currency guarantee amount amount guarantee of guarantee is (RMB'0,000) (RMB'0,000) completed 10 November 10 November Mobile Interconnection 7,000.00 1,870.12 CNY No 2023 2024 Yibin Smart 980.00 980.00 CNY 23 May 2023 26 April 2024 No 13 December 13 December Chongqing Konka 38,000.00 9,280.05 CNY No 2022 2037 Xi'an Kanghong 31 December 30,000.00 6,651.43 CNY 26 May 2023 No Technology Industry 2032 19 December 19 December Konka Soft Electronic 975.00 41.46 CNY No 2022 2023 Ningbo Kanghr Electrical 6,000.00 CNY 2 March 2023 27 July 2024 No Appliance Ningbo Kanghr Electrical 6,000.00 3,000.00 CNY 13 July 2023 12 July 2024 No Appliance Frestec Smart Home 10,200.00 510.00 CNY 6 July 2022 4 May 2030 No 15 August 14 August Jiangxi Konka 6,000.00 2,369.00 CNY No 2023 2024 10 March Jiangxi Konka 990.00 990.00 CNY 9 March 2024 No 2022 Xinfeng Microcrystalline 7,200.00 6,000.00 CNY 30 June 2023 29 June 2024 No Jiangxi High Transparent 10 March 990.00 990.00 CNY 9 March 2024 No Substrate 2022 13 November 31 December Yibin Kangrun 10,000.00 10,000.00 CNY No 2020 2024 31 August 31 August Anhui Konka 5,500.00 667.02 CNY No 2023 2024 22 September 21 September Anhui Konka 18,000.00 11,397.31 CNY No 2023 2024 10 August Anhui Konka 10,215.95 8,591.07 CNY 15 July 2031 No 2021 29 October 26 October Anhui Konka 7,000.00 5,000.00 CNY No 2021 2026 24 October 26 October Anhui Konka 7,000.00 5,000.00 CNY No 2022 2026 19 September 18 September Anhui Konka 7,000.00 7,000.00 CNY No 2022 2023 Anhui Konka 5,000.00 984.60 CNY 25 June 2023 24 June 2028 No 340 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Whether Contracted Actual the guarantee guarantee Start date of Expiry date Secured party Currency guarantee amount amount guarantee of guarantee is (RMB'0,000) (RMB'0,000) completed Shandong Econ Technology 30 September 29 September 3,747.44 3,040.56 CNY No Co., Ltd. 2022 2024 Shandong Econ Technology 23 November 2,748.12 2,748.10 CNY 23 May 2024 No Co., Ltd. 2022 Shandong Econ Technology 1,498.97 1,498.97 CNY 22 May 2023 21 May 2024 No Co., Ltd. Shandong Econ Technology 11 August 3,747.44 3,327.88 CNY 10 May 2023 No Co., Ltd. 2023 Shandong Econ Technology Co., Ltd. 4,996.58 1,747.03 CNY 5 July 2023 21 May 2024 No Shandong Econ Technology 2,498.29 2,435.11 CNY 19 July 2023 18 July 2024 No Co., Ltd. Shandong Econ Technology 28 August 999.32 736.00 CNY 11 June 2024 No Co., Ltd. 2023 Shandong Econ Technology 29 December 28 December 1,374.06 1,374.06 CNY No Co., Ltd. 2023 2024 Shandong Econ Technology 28 December 27 December 2,498.29 CNY No Co., Ltd. 2023 2024 Foshan Zhu gian g Media 21 March Creative Park Cultural 980.00 941.66 CNY 17 May 2022 No 2023 Development Co., Ltd. 8 September 8 September OCT Group 60,000.00 60,000.00 CNY No 2022 2025 18 October 18 October OCT Group 60,000.00 60,000.00 CNY No 2022 2025 22 September 22 September OCT Group 50,000.00 50,000.00 CNY No 2023 2026 13 December 13 December OCT Group 30,000.00 30,000.00 CNY No 2023 2026 2 ) As the secured party Guarantee Whether the Start date of Expiry date of Guarantor amount Currency guarantee is guarantee guarantee (RMB'0,000) completed 15 September 14 September Electronics Technology 41,000.00 CNY No 2022 2023 OCT Group 100,000.00 CNY 8 January 2021 8 January 2024 No OCT Group 50,000.00 CNY 21 May 2021 21 May 2024 No OCT Group 80,000.00 CNY 9 July 2021 9 July 2024 No 341 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Guarantee Whether the Start date of Expiry date of Guarantor amount Currency guarantee is guarantee guarantee (RMB'0,000) completed 8 September 8 September OCT Group 60,000.00 CNY No 2022 2025 18 October 18 October OCT Group 60,000.00 CNY No 2022 2025 OCT Group 120,000.00 CNY 14 July 2022 14 July 2025 No OCT Group 90,000.00 CNY 22 June 2022 21 June 2024 No OCT Group 68,750.00 CNY 24 June 2021 23 June 2024 No 22 August OCT Group 49,500.00 CNY 23 August 2022 No 2025 22 December 22 December OCT Group 24,000.00 CNY No 2022 2025 18 January 18 January OCT Group 70,000.00 CNY No 2023 2026 22 September 22 September OCT Group 50,000.00 CNY No 2023 2026 13 December 20 December OCT Group 30,000.00 CNY No 2023 2026 14 August Jiangxi Xinzixin Real Estate Co., Ltd. 1,160.81 CNY 15 August 2023 No 2024 Jiangxi Xinzixin Real Estate Co., Ltd. 485.10 CNY 10 March 2022 9 March 2024 No Jiangxi Xinzixin Real Estate Co., Ltd. 2,940.00 CNY 30 June 2023 29 June 2024 No Jiangxi Xinzixin Real Estate Co., Ltd. 485.10 CNY 10 March 2022 9 March 2024 No 13 November 31 December Shandong Econ Technology Co., Ltd. 3,300.00 CNY No 2020 2024 Chuzhou State-owned Assets 31 August 146.74 CNY 31 August 2023 No Management Co., Ltd. 2024 Chuzhou State-owned Assets 22 September 21 September 2,507.41 CNY No Management Co., Ltd. 2023 2024 Chuzhou State-owned Assets 1,890.03 CNY 10 August 2021 15 July 2031 No Management Co., Ltd. Chuzhou State-owned Assets 29 October 26 October 1,100.00 CNY No Management Co., Ltd. 2021 2026 Chuzhou State-owned Assets 24 October 26 October 1,100.00 CNY No Management Co., Ltd. 2022 2026 Chuzhou State-owned Assets 19 September 18 September 1,540.00 CNY No Management Co., Ltd. 2022 2023 Chuzhou State-owned Assets 216.61 CNY 25 June 2023 24 June 2028 No 342 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Guarantee Whether the Start date of Expiry date of Guarantor amount Currency guarantee is guarantee guarantee (RMB'0,000) completed Management Co., Ltd. 31 December 31 December Wu Guoren 875.00 USD No 2019 2024 31 December 31 December Wu Guoren 2,425.00 USD No 2019 2024 31 December 31 December Xiao Yongsong 840.00 USD No 2019 2024 31 December 31 December Xiao Yongsong 2,328.00 USD No 2019 2024 Shenzhen Unifortune Supply Chain 31 December 1,403.85 USD 21 June 2021 No Management Co., Ltd. 2022 Shenzhen Unifortune Supply Chain 31 December 867.30 USD 21 June 2021 No Management Co., Ltd. 2022 Guizhou Huajinrun Technology Co. 31 December 381.15 USD 1 January 2022 No Ltd. 2025 Guizhou Huajinrun Technology Co. 31 December 157.50 USD 1 January 2022 No Ltd. 2025 Shenzhen Henglongtong Technology 31 December 241.40 USD 1 January 2022 No Co., Ltd. 2025 Shenzhen Henglongtong Technology 31 December 99.75 USD 1 January 2022 No Co., Ltd. 2025 10 November 31 December AUJET INDUSTRY LIMITED 3,227.63 USD No 2021 2023 10 November 31 December AUJET INDUSTRY LIMITED 89.18 USD No 2021 2023 31 December AUJET INDUSTRY LIMITED 1,029.00 USD 20 July 2020 No 2023 15 October 14 October Zhu Xinming 12,446.00 CNY No 2022 2023 31 December Zhu Xinming 3,399.49 CNY 1 January 2023 No 2023 19 February 18 February Zhu Xinming 13,249.19 CNY No 2023 2024 28 February Zhu Xinming 6,860.00 CNY 1 March 2023 No 2024 Zhu Xinming 2,330.54 CNY 9 March 2023 8 March 2024 No 30 September Zhu Xinming 2,156.00 CNY 1 April 2023 No 2023 343 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Guarantee Whether the Start date of Expiry date of Guarantor amount Currency guarantee is guarantee guarantee (RMB'0,000) completed 13 January 31 December Zhu Xinming 443.45 CNY No 2023 2023 31 December Zhu Xinming 44.05 CNY 30 March 2023 No 2023 31 December Zhu Xinming 443.45 CNY 14 April 2023 No 2023 31 December Zhu Xinming 44.05 CNY 30 June 2023 No 2023 31 December Zhu Xinming 443.45 CNY 14 July 2023 No 2023 11 October 31 December Zhu Xinming 44.05 CNY No 2023 2023 13 October 31 December Zhu Xinming 149.45 CNY No 2023 2023 29 December 31 December Zhu Xinming 44.05 CNY No 2023 2023 28 February 27 February Zhu Xinming 490.00 CNY No 2023 2024 31 December Zhu Xinming 5,109.05 CNY 1 January 2023 No 2023 13 January 31 December Zhu Xinming 252.63 CNY No 2023 2023 13 January 31 December Zhu Xinming 101.77 CNY No 2023 2023 31 December Zhu Xinming 203.63 CNY 14 April 2023 No 2023 31 December Zhu Xinming 1,862.90 CNY 1 January 2023 No 2023 17 February 31 December Zhu Xinming 223.85 CNY No 2023 2023 31 December Zhu Xinming 93.12 CNY 8 March 2023 No 2023 31 December Zhu Xinming 101.35 CNY 19 May 2023 No 2023 31 December Zhu Xinming 93.12 CNY 8 June 2023 No 2023 8 September 31 December Zhu Xinming 93.12 CNY No 2023 2023 Zhu Xinming 62.25 CNY 7 December 31 December No 344 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Guarantee Whether the Start date of Expiry date of Guarantor amount Currency guarantee is guarantee guarantee (RMB'0,000) completed 2023 2023 31 December Hu Zehong, Liang Ruiling, Dai Yaojin 2,205.00 CNY 1 July 2018 No 2025 31 December Hu Zehong, Liang Ruiling, Dai Yaojin 4,899.02 CNY 1 July 2018 No 2025 Suiyong Rongxin Asset Management 2,450.00 CNY 1 January 2018 30 June 2024 No Co., Ltd. Suiyong Rongxin Asset Management 31 December 2,842.00 CNY 1 January 2018 No Co., Ltd. 2023 Shenzhen Henglongtong Technology Co., Ltd., Guizhou Huajinrun Technology Co. Ltd., Huaying 31 December Gaokede Electronics Technology Co., 735.00 CNY 1 January 2022 No 2025 Ltd., Huaying Gaokelong Electronics Technology Co., Ltd., Shenzhen Baili Yong xing Technology Co., Ltd. Shenzhen Henglongtong Technology Co., Ltd., Guizhou Huajinrun Technology Co. Ltd., Huaying 31 December Gaokede Electronics Technology Co., 488.37 CNY 1 January 2022 No 2025 Ltd., Huaying Gaokelong Electronics Technology Co., Ltd., Shenzhen Baili Yong xing Technology Co., Ltd. Shenzhen Henglongtong Technology Co., Ltd., Guizhou Huajinrun Technology Co. Ltd., Huaying 31 December Gaokede Electronics Technology Co., 552.72 CNY 1 January 2022 No 2025 Ltd., Huaying Gaokelong Electronics Technology Co., Ltd., Shenzhen Baili Yong xing Technology Co., Ltd. Chuzhou Hanshang Electric Appliance 4,533.96 CNY 20 May 2021 19 May 2024 No Co., Ltd. Shenzhen Qianhai Datang Technology 17 November 16 November 441.00 CNY No Co., Ltd. 2023 2026 15 December 5 November Konka Ventures 1,322.54 CNY No 2021 2022 ( 5 ) Loans from/to related parties Amount Related party Currency Start date Maturity (RMB'0,000) Borrowing: OCT Group 81,091.00 CNY 10 January 2022 19 January 2025 OCT Group 50,000.00 CNY 19 May 2022 18 May 2025 OCT Group 70,000.00 CNY 26 May 2022 25 May 2025 345 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount Related party Currency Start date Maturity (RMB'0,000) Chuzhou Hanshang Electric 10,535.00 CNY 1 February 2022 31 December 2023 Appliance Co., Ltd. Chuzhou Hanshang Electric 490.00 CNY 30 May 2023 31 December 2023 Appliance Co., Ltd. Chuzhou Hanshang Electric 1,837.50 CNY 10 November 2022 31 December 2023 Appliance Co., Ltd. Chuzhou Hanshang Electric 2,450.00 CNY 2 August 2023 2 August 2024 Appliance Co., Ltd. Chuzhou Hanshang Electric 980.00 CNY 14 February 2023 13 February 2024 Appliance Co., Ltd. Shandong Econ Technology Co., Ltd. 33.00 CNY 31 March 2022 19 March 2024 Shandong Econ Technology Co., Ltd. 31.35 CNY 2 June 2021 19 March 2024 Shandong Econ Technology Co., Ltd. 20.13 CNY 4 June 2021 19 March 2024 Shandong Econ Technology Co., Ltd. 1,536.15 CNY 13 August 2021 19 March 2024 Shandong Econ Technology Co., Ltd. 285.85 CNY 13 October 2021 19 March 2024 Shandong Econ Technology Co., Ltd. 40.26 CNY 17 December 2021 19 March 2024 Shandong Econ Technology Co., Ltd. 99.26 CNY 16 February 2022 19 March 2024 Shandong Econ Technology Co., Ltd. 95.96 CNY 15 May 2022 28 February 2024 Shandong Econ Technology Co., Ltd. 39.60 CNY 16 June 2022 28 February 2024 Shandong Econ Technology Co., Ltd. 1,070.92 CNY 23 June 2022 28 February 2024 Shandong Econ Technology Co., Ltd. 49.50 CNY 19 September 2022 28 February 2024 Shandong Econ Technology Co., Ltd. 33.00 CNY 19 December 2022 28 February 2024 Shandong Econ Technology Co., Ltd. 97.02 CNY 24 February 2023 28 February 2024 Kangkong Venture Capital 245.00 CNY 21 July 2022 18 July 2024 (Shenzhen) Co., Ltd. Beijing Xuri Sheng xing Technology 228.67 CNY 5 December 2022 30 November 2024 Co., Ltd. Total 221,289.17 Lending: Dongguan Guankang Yuhong 2,223.19 CNY 6 August 2022 25 September 2024 Investment Co., Ltd. 346 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount Related party Currency Start date Maturity (RMB'0,000) Dongguan Guankang Yuhong 17,376.81 CNY 6 August 2022 25 September 2024 Investment Co., Ltd. Chuzhou Kangxin Health Industry 13,288.00 CNY 18 December 2022 21 December 2024 Development Co., Ltd. Chuzhou Kangxin Health Industry 2,000.00 CNY 18 December 2022 21 December 2024 Development Co., Ltd. Chuzhou Kangxin Health Industry 735.00 CNY 5 January 2023 21 December 2024 Development Co., Ltd. Chuzhou Kangxin Health Industry 59.45 CNY 5 January 2023 21 December 2024 Development Co., Ltd. Chuzhou Kangxin Health Industry 1,240.03 CNY 18 December 2022 21 December 2024 Development Co., Ltd. Chuzhou Kangxin Health Industry 16,758.00 CNY 22 March 2023 21 December 2024 Development Co., Ltd. Chuzhou Kangxin Health Industry 1,359.26 CNY 21 March 2023 21 December 2024 Development Co., Ltd. Chuzhou Kangxin Health Industry 109.95 CNY 21 March 2023 21 December 2024 Development Co., Ltd. Chuzhou Kangxin Health Industry 1,344.36 CNY 22 March 2023 21 December 2024 Development Co., Ltd. Chuzhou Kangxin Health Industry 2,080.72 CNY 18 October 2023 21 December 2024 Development Co., Ltd. Chuzhou Kangxin Health Industry 562.97 CNY 22 December 2023 21 December 2024 Development Co., Ltd. Sichuan Chengrui Real Estate Co., 14,724.50 CNY 21 January 2022 15 April 2025 Ltd. Yantai Kangyue Investment Co., Ltd. 12,852.70 CNY 16 December 2020 5 November 2022 Yantai Kangyun Industrial 10,020.00 CNY 23 November 2021 31 March 2024 Development Co., Ltd. Yantai Kangyun Industrial 949.00 CNY 25 August 2022 31 March 2024 Development Co., Ltd. Yantai Kangyun Industrial 1,394.00 CNY 25 August 2022 31 March 2024 Development Co., Ltd. Yantai Kangyun Industrial 323.00 CNY 25 August 2022 31 March 2024 Development Co., Ltd. Yantai Kangyun Industrial 564.00 CNY 25 August 2022 31 March 2024 Development Co., Ltd. 347 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Amount Related party Currency Start date Maturity (RMB'0,000) Yantai Kangyun Industrial 1,020.00 CNY 17 March 2022 31 March 2024 Development Co., Ltd. Yantai Kangyun Industrial 3,400.00 CNY 23 May 2022 31 March 2024 Development Co., Ltd. Yantai Kangyun Industrial 2,500.00 CNY 1 June 2022 31 March 2024 Development Co., Ltd. Yantai Kangyun Industrial 2,430.00 CNY 15 November 2022 31 March 2024 Development Co., Ltd. Chongqing Lanlv Moma Real Estate 18,843.00 CNY 25 November 2020 24 November 2023 Development Co., Ltd. Sichuan Hongxinchen Real Estate 19,879.55 CNY 15 September 2022 27 February 2024 Development Co., Ltd. Shandong Econ Technology Co., Ltd. 18,315.11 CNY 20 December 2023 31 December 2023 Shandong Econ Technology Co., Ltd. 4,996.58 CNY 21 December 2023 20 December 2024 Total 171,349.18 ( 6 ) Asset transfer and debt restructuring of related parties Related party Amount incurred in Amount incurred last Related party transaction the current year year Transfer of patents, OCT Group Co., Ltd. and its software copyrights and 12,843,396.23 subsidiaries and associates trademarks Total 12,843,396.23 ( 7 ) Remuneration for key management personnel The current year Project Last year (RMB'0,000) (RMB'0,000) Total remuneration 805.08 2,206.85 3. Balance of amount receivable and payable by related parties ( 1 ) Receivables Closing balance Opening balance Related party Provision for bad Provision for bad Book balance Book balance debts debts Accounts receivable: 348 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Closing balance Opening balance Related party Provision for bad Provision for bad Book balance Book balance debts debts OCT Group Co., Ltd. and its subsidiaries and 100,590,722.52 15,162,359.88 156,687,630.71 8,433,199.71 associates Shenzhen Yaode Technology Co., Ltd. 145,562,210.29 145,562,210.29 143,135,135.62 121,664,865.28 and its subsidiaries HOHOELECTRICAL &FURNITURECO.,LI 124,378,346.69 51,863,807.49 123,273,472.66 18,429,711.73 MITED Anhui Kaikai Shijie E- commerce Co., Ltd. 60,994,542.80 1,879,460.35 39,215,316.77 32,913,147.45 and its subsidiaries Shenzhen Kanghong xing 39,226,376.64 39,214,097.96 52,156,655.05 1,063,995.77 Intelligent Technology Co., Ltd. Chuzhou Hanshang Electric Appliance Co., 38,536,165.52 786,137.78 47,638,172.10 2,368,282.48 Ltd. Shenzhen Jielunte Technology Co., Ltd. 8,538,236.25 173,326.20 13,523,856.80 410,843.28 and its subsidiaries and associates Shenzhen Konda E- display Co., Ltd. and its 2,038,868.80 130,671.94 10,824,609.83 220,822.05 subsidiaries Subtotal of other 36,068,461.04 4,978,006.25 22,671,223.40 675,458.06 related parties Total 555,933,930.56 259,750,078.15 609,126,072.94 186,180,325.81 Financing accounts receivable/Notes receivable: Korea Electric Group Co., Ltd. and its 10,000,000.00 103,340,000.00 subsidiaries Chuzhou Hanshang Electric Appliance Co., 10,000,000.00 5,028,746.39 Ltd. Anhui Kaikai Shijie E- commerce Co., Ltd. 63,064.76 and its subsidiaries 349 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Closing balance Opening balance Related party Provision for bad Provision for bad Book balance Book balance debts debts Total 20,000,000.00 108,431,811.15 Dividends receivable Chongqing Qingjia 272,999.43 Electronics Co., Ltd. Shenzhen Jielunte 941,482.38 Technology Co., Ltd. Total 941,482.38 272,999.43 Other receivables: Jiangxi Meiji 93,512,640.31 93,512,640.31 93,512,640.31 86,901,651.51 Enterprise Co., Ltd. Dai Rong xing 86,150,945.74 86,150,945.74 83,058,831.58 83,058,831.58 Shenzhen Kanghong xing 39,888,921.64 39,888,921.64 39,888,921.64 36,024,193.48 Intelligent Technology Co., Ltd. OCT Group Co., Ltd. and its subsidiaries and 31,185,288.31 20,608,710.48 35,760,987.33 20,304,912.84 associates Huanjia Group Co., 25,083,675.53 24,582,002.02 25,083,675.53 24,582,002.02 Ltd. Dongguan Guankang Yuhong Investment 22,000,000.00 660,000.00 22,000,000.00 220,000.00 Co., Ltd. HOHOELECTRICAL &FURNITURECO.,LI 2,485,213.19 1,612,406.32 2,443,773.67 554,492.25 MITED Hu Zehong 1,395,042.29 135,057.89 2,058,174.06 41,986.75 Chongqing Liangshan Industrial Investment 75,330,416.70 1,536,740.51 Co., Ltd. Subtotal of other 145,049.83 2,993.94 159,634.37 3,230.02 related parties Total 301,846,776.84 267,153,678.34 379,297,055.19 253,228,040.96 Prepayments: 350 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Closing balance Opening balance Related party Provision for bad Provision for bad Book balance Book balance debts debts OCT Group Co., Ltd. and its subsidiaries and 238,185.12 1,094,665.28 associates Shenzhen Jielunte Technology Co., Ltd. 7,764.63 and its subsidiaries Shenzhen Kangying Semiconductor 5,720,375.37 Technology Co., Ltd. and its subsidiaries Pu giường Jiakang 3,176,682.44 Technology Co, Ltd. Subtotal of other 1,184,075.41 related parties Total 245,949.75 11,175,798.50 Other current assets: Chuzhou Kangxin Health Industry 396,256,021.05 366,191,797.92 Development Co., Ltd. Yantai Kangyun Industrial Development 256,452,466.70 238,121,355.60 Co., Ltd. Chongqing Lanlv Moma Real Estate 235,830,613.25 220,546,846.61 Development Co., Ltd. Shandong Econ Technology Co., Ltd. 233,116,949.03 217,760,251.21 and its subsidiaries Dongguan Guankang Yuhong Investment 224,838,028.99 183,151,149.03 Co., Ltd. Yantai Kangyue 170,712,417.56 18,682,100.00 160,287,449.78 Investment Co., Ltd. Sichuan Chengrui Real 168,476,988.84 158,533,783.32 Estate Co., Ltd. Sichuan Hongxinchen Real Estate 228,799,064.74 Development Co., Ltd. Total 1,914,482,550.16 18,682,100.00 1,544,592,633.47 351 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) ( 2 ) Payables Book balance at the Book balance at the Related party end of the year beginning of the year Accounts payable: HOHOELECTRICAL&FURNITURECO.,LIMITED 10,195,877.56 6,083,652.55 Chuzhou Hanshang Electric Appliance Co., Ltd. 43,592,692.34 22,429,429.76 Shenzhen Jielunte Technology Co., Ltd. and its subsidiaries 33,987,442.17 13,942,717.31 and associates OCT Group Co., Ltd. and its subsidiaries and associates 28,693,864.79 13,114,183.37 Shenzhen Konda E-display Co., Ltd. and its subsidiaries 10,343,033.76 12,879,895.22 Anhui Kaikai Shijie E-commerce Co., Ltd. and its 4,614,860.81 4,615,128.91 subsidiaries Korea Electric Group Co., Ltd. and its subsidiaries 4,374,416.65 2,609,330.74 Panxu Intelligence Co., Ltd. and its subsidiaries 3,558,734.12 5,894,192.83 Dongguan Konka Smart Electronic Technology Co., Ltd. 288,114.11 1,730,506.79 Subtotal of other related parties 62,595,100.98 6,167,532.67 Total 202,244,137.29 89,466,570.15 Notes payable: Korea Electric Group Co., Ltd. and its subsidiaries 4,709,353.26 9,889,686.67 Dongguan Kangjia New Materials Technology Co., Ltd. 4,352,821.66 5,664,319.21 Panxu Intelligence Co., Ltd. and its subsidiaries 1,962,738.39 4,425,575.22 Shenzhen Jielunte Technology Co., Ltd. and its subsidiaries 916,829.48 4,868,677.92 Chuzhou Hanshang Electric Appliance Co., Ltd. 13,000,000.00 Total 11,941,742.79 37,848,259.02 Contractual liabilities/other current liabilities: OCT Group Co., Ltd. and its subsidiaries and associates 43,675,417.58 42,395,460.49 Shenzhen Konda E-display Co., Ltd. and its subsidiaries 28,903,907.67 2,873,318.85 Shenzhen Aimijiakang Technology Co., Ltd. (formerly 1,030,654.81 2,541,156.83 known as Sichuan Aimijiakang Technology Co., Ltd.) Shandong Kangfei Intelligent Electrical Appliances Co., 246,708.55 1,328,665.36 Ltd. 352 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Book balance at the Book balance at the Related party end of the year beginning of the year Subtotal of other related parties 1,412,447.04 1,625,651.76 Total 75,269,135.65 50,764,253.29 Other payables: Chuzhou Hanshang Electric Appliance Co., Ltd. 195,705,860.89 185,043,644.73 Shandong Econ Technology Co., Ltd. and its subsidiaries 42,146,282.34 42,331,626.74 OCT Group Co., Ltd. and its subsidiaries and associates 23,291,255.06 5,897,248.07 Central Enterprises in poverty-stricken areas (Jiangxi) 9,600,000.00 2,400,000.00 Industrial Investment Funds Partnership (L.P.) Beijing Xuri Sheng xing Technology Co., Ltd. 2,536,047.85 2,396,943.13 Konka Ventures Development (Shenzhen) Co., Ltd. (formerly known as "Konka Ventures Development 2,523,500.05 2,483,024.67 (Shenzhen) Co., Ltd." ) Dongguan Kangjia New Materials Technology Co., Ltd. 410,526.24 209,400.00 E3info (Hainan) Technology Co., Ltd. and its subsidiaries 63,099.88 163,730.25 and associated enterprises Guangdong Wanrundaoheng Culture Tourism Development 83,480,206.21 Co., Ltd. Chongqing Kang gian Optoelectronics Technology Co., Ltd. 8,029,369.86 Subtotal of other related parties 11,052,687.80 10,210,205.65 Total 287,329,260.11 342,645,399.31 4. Related party commitments The Group did not have any related party commitments. 5. Others The Group did not have any related party matters. XIV. Commitments and Contingencies 1. Significant commitments (1) Capital commitments Item Closing balance Opening balance Contract signed but hasn't been recognised in financial statements Commitment on construction and purchase of long-lived assets 353 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Large amount contract 295,615,545.67 523,553,381.89 Foreign investment commitments Total 295,615,545.67 523,553,381.89 (2) Other commitments As of 31 December 2023, there were no other significant commitments for the Company to disclose. 2. Contingencies The Group's material contingencies requiring disclosure are set out below: (1) Before the Company acquired Jiangxi Konka, Jiangxi Konka and its subsidiaries Xinfeng Microcrystalline and Jiangxi High Transparent Substrate (formerly known as Nano-Crystallised Glass) provided joint and several liability guarantee for the loans from Nanchang Rural Commercial Bank Co., Ltd. to Jiangxi Xinxin Jian'an Engineering, Jiangxi Zhongyi Decorative Material and Jiangxi Shanshi Science and Technology, related parties of former controlling shareholders of Jiangxi Konka, and Nanchang Rural Commercial Bank Co., Ltd. then transferred the claims to China Great Wall AMC Jiangxi Branch. For the failure of Jiangxi Xinxin Jian'an Engineering, Jiangxi Zhongyi Decorative Material and Jiangxi Shanshi Science and Technology to repay the borrowings on time, China Great Wall AMC Jiangxi Branch filed a lawsuit requesting Jiangxi Xinxin Jian'an Engineering, Jiangxi Zhongyi Decorative Material and Jiangxi Shanshi Science and Technology to repay the loan principal amounting to RMB300 million and the liquidated damage and interest arising from it and guarantors Jiangxi Konka, Jiangxi High Transparent Substrate and Xinfeng Microcrystalline to bear joint and several liability for such debts. On 31 October 2019, the Higher People's Court of Jiangxi Province ruled in the first instance that Jiangxi Xinxin Jian'an Engineering, Jiangxi Zhongyi Decorative Material, Jiangxi Shanshi Technology should repay to China Great Wall AMC Jiangxi Branch the loan principal of RMB300 million and the interest and liquidated damage arising from it within 10 days from the effective date of the judgment, and Jiangxi Konka New Material, Zhu Xinming, Leng Sumin, Nano-Crystallised Glass, Xinfeng Microcrystalline should bear joint and several liability for all debts recognised in this judgment. The defendants appealed against the verdict of the first instance and the Supreme People's Court accepted the appeal. On 24 March 2021, the Supreme People's Court made the following ruling: I. Civil Judgment (2018) G.M.CH. No. 110 made by the Higher People's Court of Jiangxi Province is abrogated; II. This case is remanded to the Higher People's Court of Jiangxi Province for retrial. As of the date of issuance of this report, the first instance of the retrial was decided, an appeal had been filed, and the second instance of the retrial is in progress. The actual controller of Jiangxi Konka New Materials, Zhu Xinming, and his spouse, Leng Sumin, Jiangxi Xinzixin Real Estate Co., Ltd., Zhu Zilong, Zhu Qingming and Zeng Xiaohong, as guarantors, provided a total of approximately RMB143 million of real estate mortgage guarantee to Great Wall AMC for the above loans. Zhu Xinming and Leng Sumin also provided joint liability guarantees. In order to avoid the adverse impact of this case on the Company, the Company has agreed in the acquisition agreement of Jiangxi Konka, Xinfeng Microcrystalline and nanometre microcrystalline that all contingent debts incurred by Jiangxi Konka by the original shareholders of Konka new material in the form of joint and several liability. Jiangxi Xinzixin Real Estate Co., Ltd. has held a total of approximately RMB243 million of real estate assets as the case of the anti-guarantee mortgage to Konka group and went through the mortgage registration procedures. As of the date of this report, the case is still on trial and the above commercial acceptance bill has not been honoured. (2) As for the dispute of the Company with Luo Zaotong, Luo Jingxia, Luo Zongyin, Luo Zongwu 354 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) and Shenzhen Yaode Technology Co., Ltd. on share repurchase, since the other party did not actively perform the repurchase obligation, the Company filed a lawsuit with the People's Court of Nanshan District, Shenzhen. The amount of the subject matter involved in the lawsuit is RMB249 million. On 22 November 2021, the Company applied to the People's Court of Nanshan District, Shenzhen, for property preservation. On 11 January 2023, the People's Court of Nanshan District, Shenzhen, rendered a verdict of the first instance, ruling that Luo Zaotong, Luo Jingxia, Luo Zongyin and Luo Zongwu pay the repurchase amount of RMB172 million plus the sum of interest calculated at 12% per annum from 6 April 2017 to the date of payment of the equity repurchase by the defendant Luo Zaotong, Luo Jingxia, Luo Zongyin and Luo Zongwu. As of the date of issuance of this report, the case was executed in progress. (3) As the acceptor failed to pay the commercial acceptance bills held by the Company upon maturity, the Company, as the plaintiff, requested debtors Hongtu Sanpower Technology Co., Ltd., Jiangsu Hongtu High Technology Co., Ltd., Sanpower Group Co., Ltd., Nanjing Jiongjiong Electronic Technology Co., Ltd. and Shenzhen Qianhai Benniu Agricultural Technology Co., Ltd. to RMB200 million bear joint and several liability for the bills and the overdue interest. In July 2019, the company filed a lawsuit with the court, and the court has preserved the defendant's corresponding property. As of the date of issuance of this report, the case was under trial. (4) The amount of the subject matter involved in the dispute between the Company and Wuhan Jialian Agricultural Technology Development Co., Ltd., Peng Chaojun, He Jiaguo, He Jiayi, Liang Xiangzhou, Xu Yizheng, He Fan, Pang Huasheng, Song Liangming, and Liang Xiangmei over the right of recourse for bills is RMB200 million and the corresponding interest. In September 2020, the Company filed a lawsuit with the Wuhan Intermediate People's Court, and the court ordered the defendant to pay Konka Group the principal amount of the note of RMB200 million and relevant overdue interest. An amount of RMB38,200,000 was recovered through the execution of the case. The defendant applied for retrial during the execution of the case. As of the date of issuance of this report, the case was in retrial. (5) The amount of the subject matter involved in the dispute between the Company's subsidiary Konka Unifortune and Shenzhen Yaode Technology Co., Ltd., Dongsheng Xinluo Technology (Shenzhen) Co., Ltd., Shenzhen Hongyao Dingsheng Investment Management Co., Ltd., Shenzhen Xiangrui Yingtong Investment Management Co., Ltd., Luo Jingxia, Luo Zongwu, Luo Zongyin, Luo Zaotong and Luo Saiyin over contracts is RMB155 million. On 8 September 2022, the court issued a judgment in favour of the Company's subsidiary. As of the date of issuance of this report, the case was executed in progress. (6) As the acceptor failed to pay the commercial bills held by the Company upon maturity, the Company, as the plaintiff, filed a lawsuit with the court on the matured bills amounting to RMB300 million, requesting the bill acceptor Shanghai Huaxin and prior parties involved to bear joint and several liability for the bills and liquidated damage and interest. As of the date of issuance of this report, the case involving RMB150 million is in compulsory execution and shareholders have been added as persons to be executed in this case. For the remaining RMB150 million, the defendants have been ordered to pay the Company the bills and interest, which is now in compulsory execution. As of the date of issuance of this report, an amount of RMB1,115,000 had been recovered through the execution of the case, and the case was executed in progress. (7) The amount of the subject matter involved in the dispute between the Company's subsidiaries Frestec Refrigeration, Anhui Konka, Konka Material and Anhui Tong giường (plaintiff) and Shantou Meisen Technology Co., Ltd., Shenzhen Meisenyuan Plastic Electronics Co., Ltd., Lin Yuanqin, Huang Ruirong, Jiangsu Huadong Hardware Zone Co., Ltd., Chuangfu Commerce & Trade Plaza Real Estate Development (Huizhou) Co., Ltd. and Puning Junlong Trade Co., Ltd. (defendants) over contracts is RMB380 million. As of the date of issuance of this report, the portion of the case, related to Xinfei and Meisen, was in trial, while the rest case was executed in progress. 355 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) (8) A case has been filed on the dispute over the sales and purchase contracts between the Company's subsidiary Konka Huanjia (plaintiff) and 38 companies (defendant) including Huanjia Group Co., Ltd. and Dalian Jinshunda Material Recycling Co., Ltd., etc. The amount of the subject matter involved in it is RMB890 million. Konka Huanjia has applied for the court to seal up and freeze the defendant's corresponding property. In the case involving RMB322 million of litigation, the court delivered a ruling of the first instance to Kangjia in March 2023, rejecting the suit of Kangjia Huanjia. The remaining cases, involving RMB568 million, were decided by the court for the first instance in December 2022, and Kangjia Huanjiadun has appealed to the Liaoning Provincial High People's Court. As of the date of issuance of this report, the case involving RMB322 million of litigation was closed, while the cases, involving RMB568 million, were remanded for retrial. It is currently in the first instance of the retrial. (9) The amount of the subject matter involved in the dispute between the Company's subsidiary Dongguan Konka (plaintiff) and Dongguan Gaoneng Polymer Materials Co., Ltd., Wang Dong, Shenzhen Xinlian Xingyao Trading Co., Ltd., Shenzhen Jinchuan Qianchao Network Technology Co., Ltd., Puning Junlong Trading Co., Ltd. and Huang Zhihao (defendants) over sales and purchase contracts is RMB90 million. In December 2020 the Company filed a lawsuit with the court and obtained a judgment in its favour in June 2023. As of the date of issuance of this report, the case was executed in progress. (10) As the acceptor failed to pay the commercial bills held by the Company upon maturity, the Company, as the plaintiff, filed a lawsuit with the court on the matured bills amounting to RMB78 million, requesting the court to order Hefei Huajun Trading Co., Ltd. and Wuhan Jialian Agricultural Technology Development Co., Ltd. to pay the Company the bills and the interest for default, and applied for property preservation. The case executed a return of RMB2 million, and the Company is applying with the court for adding shareholders as persons to be executed. As of the date of issuance of this report, an amount of RMB1,643,500 had been recovered through the execution of the case, and the case was executed in progress. (11) The amount of the subject matter involved in the dispute between the Company's subsidiary Konka Electronic Materials (formerly known as Konka Factoring) (the plaintiff) and Tahoe Group Co., Ltd., Fuzhou Taijia Enterprise Co., Ltd. and Xiamen Lian giường Micro-electronics Co., Ltd. (the defendants) over the right of recourse for bills is RMB50 million and the corresponding interest. On 1 September 1 2021, the Intermediate People's Court of Xiamen Municipality, Fu gian Province, ordered the defendants to pay the plaintiff e-commercial acceptance bills of RMB50 million and the corresponding interest. On 4 January 2022, the compulsory enforcement was filed. The case executed a return of RMB43 million. As of the date of issuance of this report, the case was executed in progress. (12) The amount of the subject matter involved in the dispute between the Company (plaintiff) and China Energy Electric Fuel Co., Ltd., China Energy (Shanghai) Enterprise Co., Ltd., Shanghai Nengping Enterprise Co., Ltd. and Shenzhen Qianhai Baoying Commercial Factoring Co., Ltd. (defendants) over the right of recourse for bills is RMB50 million and the corresponding interest. In September 2018, the company filed a lawsuit with the Shenzhen Intermediate People's Court, and the court has preserved the defendant's corresponding property. The judgment of this case has come into effect. The court ordered China Energy Electric Fuel Co., Ltd. and other defendants to pay the Company the bills of RMB50 million and the interest. As of the date of issuance of this report, an amount of RMB60,400 had been recovered through the execution of the case, the case was executed in progress, and the Company applied with the court for adding shareholders as persons to be executed. (13) The amount of the subject matter involved in the dispute between the Company's subsidiary Anhui Konka (plaintiff) and Makena Electronic (Hong Kong) (defendant) over the sales and purchase contract is RMB5,440,200. On 7 December 2021, Anhui Konka filed arbitration with the Shenzhen Court of International Arbitration. On 14 October 2022, the compulsory enforcement was filed. As of the date of issuance of this report, the case was executed in progress. 356 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) (14) The amount of the subject matter involved in the dispute between the Company's subsidiary Anhui Konka (plaintiff) and Shanghai Likai Logistics Co., Ltd. Shenzhen Branch and Shanghai Likai Logistics Co., Ltd. (defendants) over freight forwarding contracts in maritime and open sea waters is RMB38 million. On 26 April 2021, Konka applied to Shanghai Maritime Court for compulsory execution. On 7 June 2021, the court accepted the case. As of the date of issuance of this report, the case was executed in progress. (15) The amount of the subject matter involved in the dispute between the Company's subsidiary Pengrun Technology (plaintiff) and Guangan Ou Qi Shi Electronic Technology Co., Ltd., Guan Hongshao, Huaying Gaokede Electronic Technology Co., Ltd., Huaying Gaokelong Electronic Technology Co., Ltd., Guizhou Jiaguida Technology Co., Ltd., Sichuan Hongrongyuan Real Estate Co., Ltd., Du Xinyu, Linbolong and Wang Shisheng (defendants) over trust contract is RMB167 million. The case has been applied for property preservation measures. As of the date of issuance of this report, the case was under trial. (16) The amount of the subject matter involved in the dispute between the Company (plaintiff) and Yantai Kangyue Investment Co., Ltd. (defendant) over borrowing contract is RMB160 million. The Company has applied to the Shenzhen Intermediate People's Court for property preservation. As of the date of issuance of this report, the case was executed in progress. (17) The amount of the subject matter involved in the dispute between the Company's subsidiary Konka Huanjia (plaintiff) and Bank of Fuxin Co., Ltd., Huanjia Group, Dalian Jinjia Materials Recycling Co., Ltd., Dalian Jin Kaixuan Renewable Resources Acquisition Chain Co., Ltd., Dalian Yingtai Paper Co., Ltd., Dalian Zhanhong Renewable Resources Recycling Co., Ltd. and Wang Jinping (defendants) over the execution objection by an outsider is RMB240 million. As of the date of issuance of this report, the case was under trial. (18) The amount of the subject matter involved in the dispute between the Company's subsidiary Jiaxin Technology Co., Limited (plaintiff) and Tripod Electronics Technology (HongKong) Limited, Chen Wenhuan and Chen Baohong (defendants) over a sales and purchase contract of international goods is RMB51 million. As of the date of issuance of this report, the case was under trial. (19) In the case of contract dispute between the Company (plaintiff), Zhu Xinming, Leng Sumin, Gongqingcheng BRIC Investment Management Partnership (limited partnership) and Gongqingcheng Xinrui Investment Management Partnership (Limited partnership) (defendant), due to the failure of the other party to pay performance compensation as agreed, the Company filed an arbitration with the Shenzhen International Arbitration Court in June 2023. The amount of the subject matter involved in the lawsuit is RMB939,044,100. As of the date of issuance of this report, the case was under trial. (20) In the case of contract dispute between the Company's subsidiaries, Konka Lifeng (Plaintiff) and Shenzhen Jun xing Communication Technology Co., Ltd., Gu Mei Electronics (Hong Kong) Technology Co., Ltd., Shenzhen Hong xing Fengda Industrial Development Co., Ltd., Shenzhen Jun xing Junye Electronics Co., Ltd., Zeng Jiankai, Zhang Zhenyu, Haiying Technology Group (Hong Kong) Co., Ltd., Zhang Lixia, Anhui Baolin Industry Co., Ltd., Zeng Qingpeng, Zhong Yuhua (Defendant), the subject matter of the lawsuit is RMB262,711,100. As of the date of issue of this report, the case was under trial. (21) Shenzhen Nianhua (plaintiff), a subsidiary of the Company, filed an arbitration with the Shenzhen International Arbitration Court in March 2023 in a share repurchase dispute with Fang Xianglong and Jiang Yan (defendant), due to the other party's failure to repurchase the share and pay the repurchase price as agreed. The subject matter of the lawsuit is RMB151,605,500. As of the date of issue of this report, the case was under implementation. (22) The amount of the subject matter involved in the dispute between the Company's subsidiary Konka Huanjia (plaintiff) and Xu Jianhua, Guangxi Beigang New Materials Co., Ltd. (defendant) 357 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) over a sales and purchase contract is RMB110,995,700. As of the date of issuance of this report, the case was in progress. (23) The amount of the subject matter involved in the dispute between the Company's subsidiary Sichuan Konka (plaintiff) and Shenzhen Jun xing Communication Technology Co., Ltd., Shenzhen Hong xing Fengda Industrial Development Co., Ltd., Shenzhen Jun xing Junye Electronics Co., Ltd., Liuyang Huichuan Heyuan Villa Co., Ltd., Zeng Jiankai, Zhong Yuhua (defendant) over a sales and purchase contract is RMB51.72 million. As of the date of issuance of this report, the case was under implementation. (24) The Company (plaintiff) filed a lawsuit with the Nanshan District People's Court of Shenzhen in May 2023 concerning the equity transfer contract dispute with Longrui Haoteng Technology Development Co., Ltd., Beijing Beida Blue Bird Security System Engineering Technology Co., Ltd., and Beijing Jingrui Haoteng Technology Development Co., Ltd. (Defendant) due to the failure of the other party to pay the balance of the equity transfer as agreed. The subject matter involved amounted to RMB45.4076 million. As of the date of issue of this report, the case has been won and the application for enforcement is in progress. (25) The amount of the subject matter involved in the dispute between Shenzhen Oriental Venture Capital Investment Co., Ltd. (plaintiff) and the Company (defendant) over a contract is RMB750 million. As of the date of issuance of this report, the case was under trial. (26) The amount of the subject matter involved in the dispute between Sichuan Shuwu Guangrun logistics Co., Ltd. (plaintiff) and the Company's subsidiary Dongguan Konka (defendants) over a sales and purchase contract is RMB122,834,600. As of the date of issuance of this report, the case was under trial. X V. Subsequent Events after the Balance Sheet Date 1. Important non-adjusting matters As Konka Huanjia, a subsidiary of the Company, was unable to repay its debts as they matured and its assets were insufficient to repay all of its debts, the Company filed an application with the People's Court of Ganjizi District, Dalian City, Liaoning Province (the "Dalian Ganjingzi District Court" ) for the bankruptcy and liquidation of Konka Huanjia on 28 February 2024. On 29 February 2024, the Dalian Ganjingzi District Court decided in accordance with the law to accept the Company's application. On 14 March 2024, the Dalian Ganjingzi District Court appointed Shanghai SGLA (Dalian) Law Firm to act as the administrator (hereinafter referred to as the "Administrator" ) of the bankruptcy and liquidation case of Kangjia Huanjia. On 15 March 2024, the Administrator took over the relevant information and physical objects of Konka Huanjia. The Company no longer exercises control over Konka Huanjia since 15 March 2024. Except for the above matter, the Group had no significant non-adjusting matters to disclose as of the date of this financial report. 2. Sales return As of the date of this financial report, the Group had no material sales returns. 3. Notes to other subsequent events after the balance sheet date Except for the above disclosure of matters after the balance sheet date, the Group did not have any other significant events after the balance sheet date. XVI. Other Key Matters Due to the Company's continuous reduction plan resulting in the Company's loss of significant influence on Chutian Dragon, on 31 March 2023, at the Ninth Meeting of the Tenth Session of the Board of Directors of the Company, the Company considered and approved the Proposal on Changing the Accounting Method for Chutian Dragon. Thus, on 31 March 2023, the Company 358 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) designated the remaining shares held in Chutian Dragon as financial assets at fair value through profit or loss for the current period, and therefore converted them from long-term equity investments accounted for under the equity method to held-for-trading financial assets. The investment income resulting from the change in fair value at the date of conversion amounted to RMB574 million. The cumulative gain or loss from fair value changes during the holding period from the date of conversion to 31 December 2023 was RMB-52.05 million. As of 31 December 2023, the remaining number of shares held by the Company in Chutian Dragon was 27,897,662 shares, with a shareholding ratio of 6.055%. On the date of this report, the closing price of the financial asset was RMB13.15per share. Apart from the above matters, the Group had no other significant transactions and events that had an impact on investors' decision-making that needed to be disclosed. XVII. Notes to the Main Items of the Financial Statements of the Parent Company 1. Accounts receivable ( 1 ) Accounts receivable listed by aging portfolio Book balance at the beginning of the Aging Book balance at the end of the year year Within one year (inclusive) 1,206,382,965.89 4,177,587,681.73 One to two years 1,471,518,725.52 125,417,030.16 Two to three years 116,480,162.93 75,011,848.13 Three to four years 58,805,217.49 130,238,580.35 Four to five years 122,821,401.69 637,992,232.94 Over five years 806,589,292.93 173,615,565.37 Total 3,782,597,766.45 5,319,862,938.68 ( 2 ) Accounts receivable listed by withdrawal methods for bad debts Closing balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) Accounts receivable of expected credit 752,763,517.97 19.90 708,873,222.27 94.17 43,890,295.70 losses withdrawn individually Accounts receivable of expected credit losses withdrawn by portfolio Of which: Aging 355,972,586.88 9.41 166,216,118.67 46.69 189,756,468.21 portfolio 359 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Closing balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) Grouping of related 2,673,861,661.60 70.69 2,673,861,661.60 parties Subtotal of portfolio 3,029,834,248.48 80.10 166,216,118.67 5.49 2,863,618,129.81 Total 3,782,597,766.45 100.00 875,089,340.94 23.13 2,907,508,425.51 (Continued) Opening balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) Accounts receivable of expected credit 723,559,609.63 13.60 652,094,110.07 90.12 71,465,499.56 losses withdrawn individually Accounts receivable of expected credit losses withdrawn by portfolio Of which: Aging 410,174,776.68 7.71 193,889,834.11 47.27 216,284,942.57 portfolio Grouping of related 4,186,128,552.37 78.69 4,186,128,552.37 parties Subtotal of portfolio 4,596,303,329.05 86.40 193,889,834.11 4.22 4,402,413,494.94 Total 5,319,862,938.68 100.00 845,983,944.18 15.90 4,473,878,994.50 1 ) Provision set aside for bad debts of accounts receivable by single item Closing balance Name Provision Provision for bad Reasons for the Book balance percentage debts provision (%) Expected to be Shanghai Huaxin International 299,136,676.70 293,153,943.17 98.00 difficult to Group Co., Ltd. recover Expected to be Hongtu Sanbao High-tech 200,000,000.00 180,000,000.00 90.00 difficult to Technology Co., Ltd. recover 360 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Closing balance Name Provision Provision for bad Reasons for the Book balance percentage debts provision (%) Expected to be Zhongfu Tiangong Construction 71,389,096.65 53,541,822.49 75.00 difficult to Group Co., Ltd. recover CCCC First Harbor Engineering Not expected to 55,438,105.00 55,438,105.00 100.00 Company Ltd. be recoverable China Energy Power Fuel Co., Not expected to 50,000,000.00 50,000,000.00 100.00 Ltd. be recoverable Shenzhen Kanghong xing Not expected to 36,900,685.94 36,900,685.94 100.00 Intelligent Technology Co., Ltd. be recoverable Expected to be Others 39,898,953.68 39,838,665.67 99.85 difficult to recover Total 752,763,517.97 708,873,222.27 94.17 2 ) Provision for bad debts for accounts receivable made as per portfolio ① In the portfolio, accounts receivable of provision for expected credit loss made by aging Closing balance Aging Provision for bad Provision Book balance debts percentage (%) Within one year 143,499,372.75 2,927,387.22 2.04 One to two years 10,150,867.80 1,017,116.96 10.02 Two to three years 51,446,340.40 11,673,174.64 22.69 Three to four years 790,336.20 512,770.12 64.88 Four to five years 884,722.73 884,722.73 100.00 Over five years 149,200,947.00 149,200,947.00 100.00 Total 355,972,586.88 166,216,118.67 46.69 ② In the portfolio, accounts receivable of provision for expected credit loss made by other methods Closing balance Aging Provision for Provision Book balance bad debts percentage (%) 361 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Closing balance Aging Provision for Provision Book balance bad debts percentage (%) Grouping of related parties 2,673,861,661.60 Total 2,673,861,661.60 ( 3 ) Provision for bad debts of accounts receivable set aside, recovered or reclassified in the current year Change in the current year Category Opening balance Recovery or Provision reclassification Provision for bad debts of 845,983,944.18 32,999,328.16 3,893,931.40 accounts receivable Total 845,983,944.18 32,999,328.16 3,893,931.40 (Continued) Change in the current year Category Closing balance Charge-off or write- Others off Provision for bad debts of 875,089,340.94 accounts receivable Total 875,089,340.94 There were no provisions for bad debts with significant amounts to be recovered or classified in the Reporting Period. ( 4 ) Accounts receivable actually written off in the current year There were no accounts receivable actually written off in the current year. ( 5 ) Top five accounts receivable and contract assets in the closing balance categorised by debtors The total amount of accounts receivable with top five closing balance categorised by debtors in the current year was RMB3,025,342,043.16, accounting for 79.98% of the total closing balance of accounts receivable. The total closing balance of provision for bad debts correspondingly set aside was RMB473,153,943.17. 2. Other accounts receivable Item Closing balance Opening balance Interest receivable 6,325,400.49 3,878,580.64 Dividends receivable 395,209,709.13 393,563,347.61 Other receivables 7,560,988,861.81 9,944,884,426.80 362 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Item Closing balance Opening balance Total 7,962,523,971.43 10,342,326,355.05 2.1 Interest receivable Item Closing balance Opening balance Interest on term deposits 6,325,400.49 3,878,580.64 Total 6,325,400.49 3,878,580.64 2.2 Dividends receivable Item Closing balance Opening balance Hong Kong Konka 115,209,709.13 113,563,347.61 Suining Konka Industrial Park 280,000,000.00 280,000,000.00 Total 395,209,709.13 393,563,347.61 2.3 Other receivables ( 1 ) Classified by account nature Book balance at the end of the Book balance at the beginning Nature of fund year of the year Intercourse funds among subsidiaries 9,069,786,800.21 11,299,542,985.57 Energy-saving subsidies receivable 141,549,150.00 141,549,150.00 Intercourse funds with other related 235,267,733.09 50,667,315.53 parties Deposit, security deposit, deposit 12,721,943.88 17,354,107.03 Others 99,060,310.98 375,797,998.76 Total 9,558,385,938.16 11,884,911,556.89 ( 2 ) Other receivables listed by aging Book balance at the end of the Book balance at the beginning Aging year of the year Within one year (inclusive) 5,210,348,063.16 8,060,254,524.30 One to two years 2,145,922,239.93 1,782,503,511.04 Two to three years 198,105,811.44 470,794,157.38 Three to four years 439,082,181.54 1,006,460,259.82 363 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Book balance at the end of the Book balance at the beginning Aging year of the year Four to five years 1,004,762,554.22 389,224,526.20 Over five years 560,165,087.87 175,674,578.15 Total 9,558,385,938.16 11,884,911,556.89 ( 3 ) Classified presentation of other receivables by provisioning methods of bad debts Closing balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) Other receivables of expected credit 2,110,298,248.95 22.08 1,958,251,651.39 92.80 152,046,597.56 losses set aside by single item Other receivables of provision for bad debts set aside by credit risk characteristic portfolio: Aging portfolio 84,338,231.39 0.88 32,163,233.75 38.14 52,174,997.64 Low-risk 16,543,239.09 0.17 6,982,191.21 42.21 9,561,047.88 portfolio Grouping of 7,347,206,218.73 76.87 7,347,206,218.73 related parties Subtotal of 7,448,087,689.21 77.92 39,145,424.96 0.53 7,408,942,264.25 portfolio Total 9,558,385,938.16 100.00 1,997,397,076.35 20.90 7,560,988,861.81 (Continued) Opening balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) Other 1,901,377,741.07 16.00 1,882,393,905.79 99.00 18,983,835.28 receivables of 364 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Opening balance Book balance Provision for bad debts Category Provision Carrying value Proportion Amount Amount percentage (%) (%) expected credit losses set aside by single item Other receivables of provision for bad debts set aside by credit risk characteristic portfolio: Aging portfolio 94,419,620.35 0.79 54,385,072.09 57.60 40,034,548.26 Low-risk 16,755,275.76 0.14 3,248,152.21 19.39 13,507,123.55 portfolio Grouping of 9,872,358,919.71 83.07 9,872,358,919.71 related parties Subtotal of 9,983,533,815.82 84.00 57,633,224.30 0.58 9,925,900,591.52 portfolio Total 11,884,911,556.89 100.00 1,940,027,130.09 16.32 9,944,884,426.80 1 ) Provision set aside for bad debts of other receivables by the general expected credit loss model Phase I Phase II Phase III Expected credit loss during the Expected credit Provision for bad debts Expected Total whole loss during the credit loss for outstanding whole outstanding the next 12 maturity (without maturity (with months credit credit impairment) impairment) Balance as of 1 January 357,726.75 57,275,497.55 1,882,393,905.79 1,940,027,130.09 2023 Balance as of 1 January -73,128.86 73,128.86 2023 in the current year -- Transferred to Phase II -73,128.86 73,128.86 -- Transferred to Phase III -- Reclassified under Phase II 365 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) -- Reclassified under Phase I Provision in the current 557,099.12 75,857,745.60 76,414,844.72 year Recovery in the current 19,044,898.46 19,044,898.46 year Charge-off in the current year Write-off in the current year Other changes Balance as at 31 December 841,697.01 38,303,727.95 1,958,251,651.39 1,997,397,076.35 2023 Note: The first stage is that credit risk has not increased significantly since initial recognition. For other receivables with an aging portfolio and a low-risk portfolio within one year, the loss provision is measured according to the expected credit losses in the next 12 months. The second stage is that credit risk has increased significantly since initial recognition but credit impairment has not yet occurred. For other receivables with an aging portfolio and a low-risk portfolio that exceed one year, the loss provision is measured based on the expected credit losses for the entire duration. The third stage is the credit impairment after initial confirmation. For other receivables of credit impairment that have occurred, the loss provision is measured according to the credit losses that have occurred throughout the duration. ( 4 ) Provision for bad debts of other receivables set aside, recovered or reclassified in the current year The amount of provision for bad debts in the current year was RMB57,369,946.26, and other receivables actually written off were RMB0.00. ( 5 ) Other receivables actually written off in the current year There were no other receivables actually written off in the current year. ( 6 ) Other receivables with top five year-end balances categorised by debtors The total amount of other receivables with top five closing balance categorised by debtors in the current year was RMB6,550,250,572.65, accounting for 68.53% of the total closing balance of other receivables. The total closing balance of provision for bad debts correspondingly set aside was RMB1,744,736,434.49. 366 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) 3. Long-term equity investment Closing balance Opening balance Item Book balance Provision for Carrying value Book balance Provision for Carrying value impairment impairment Investment in 7,156,825,933.98 781,480,000.00 6,375,345,933.98 7,277,554,047.75 781,480,000.00 6,496,074,047.75 subsidiaries Investment in associated enterprises and joint 2,279,596,484.20 301,754,900.04 1,977,841,584.16 2,824,333,468.08 219,718,378.41 2,604,615,089.67 ventures Total 9,436,422,418.18 1,083,234,900.04 8,353,187,518.14 10,101,887,515.83 1,001,198,378.41 9,100,689,137.42 ( 1 ) Investment in subsidiaries Impairment provision Closing balance of the Increase in the Decrease in the current Investee Opening balance Closing balance set aside in the current provision for current year year year impairment Konka Ventures 2,550,000.00 2,550,000.00 Anhui Konka 122,780,937.98 122,780,937.98 Konka Electronic 300,000,000.00 300,000,000.00 Materials Konka Unifortune 15,300,000.00 15,300,000.00 Wankaida 10,000,000.00 10,000,000.00 Dongguan Konka 274,783,988.91 274,783,988.91 367 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Impairment provision Closing balance of the Increase in the Decrease in the current Investee Opening balance Closing balance set aside in the current provision for current year year year impairment Konka Europe 3,637,470.00 3,637,470.00 Telecommunication 360,000,000.00 360,000,000.00 Technology Mobile Interconnection 100,000,000.00 100,000,000.00 Anhui Tong giường 779,702,612.22 779,702,612.22 Kangjiatong 30,749,800.00 30,749,800.00 Pengrun Technology 25,500,000.00 25,500,000.00 Beijing Konka Electronic 200,000,000.00 200,000,000.00 Konka Circuit 297,650,000.00 139,400,000.00 437,050,000.00 Hong Kong Konka 781,828.61 781,828.61 Konka Investment 500,000,000.00 500,000,000.00 Electronics Technology 1,000,000,000.00 1,000,000,000.00 Konka Huanjia 91,800,000.00 Shanghai Konka 40,000,000.00 40,000,000.00 Jiangxi Konka 689,680,000.00 Shenzhen Nianhua 30,000,000.00 30,000,000.00 368 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Impairment provision Closing balance of the Increase in the Decrease in the current Investee Opening balance Closing balance set aside in the current provision for current year year year impairment Shenzhen KONSEMI 100,000,000.00 100,000,000.00 Konka Eco-Development 50,000.00 50,000.00 Suining Konka Industrial 200,000,000.00 200,000,000.00 Park Konka Ronghe 5,100,000.00 5,100,000.00 Suining Electronic 200,000,000.00 200,000,000.00 Technological Innovation Shenzhen Chuangzhi 10,000,000.00 10,000,000.00 Electrical Appliances Kanghong (Yantai) 1,025,100.00 1,025,100.00 Environmental Protection Chongqing Kang xing rui 25,500,000.00 25,500,000.00 Chongqing Konka Optoelectronic 933,333,333.33 933,333,333.33 Technology Kowin Memory 192,520,000.00 192,520,000.00 (Shenzhen) Ningbo Kanghr Electrical 90,000,000.00 90,000,000.00 Appliance 369 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Impairment provision Closing balance of the Increase in the Decrease in the current Investee Opening balance Closing balance set aside in the current provision for current year year year impairment Konka Intelligent 510.00 510.00 Manufacturing Suining Jiarun Property 10,000,000.00 10,000,000.00 Yibin Kangrun 67,000,000.00 67,000,000.00 Hainan Konka Material 9,205,452.93 9,205,452.93 Technology Konka Cross-border 50,000,000.00 50,000,000.00 (Hebei) Konka Huazhong 30,000,000.00 30,000,000.00 Guizhou Kanggui 70,000,000.00 42,000,000.00 28,000,000.00 Material Technology Nantong Kanghai 15,300,000.00 15,300,000.00 Jiangxi Konka High-tech 50,000,000.00 50,000,000.00 Park Shangrao Konka Electronic Technology 30,000,000.00 30,000,000.00 Innovation Sichuan Hongxinchen 20,000,000.00 20,000,000.00 Xi'an Kanghong 12,000,000.00 12,000,000.00 370 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Impairment provision Closing balance of the Increase in the Decrease in the current Investee Opening balance Closing balance set aside in the current provision for current year year year impairment Technology Industry Xi'an Konka Intelligent 50,000,000.00 50,000,000.00 Technology Tianjin Konka 171,603,013.77 171,603,013.77 Songyang Konka 30,000,000.00 30,000,000.00 Intelligent Konka North China 30,000,000.00 30,000,000.00 Total 6,496,074,047.75 139,400,000.00 260,128,113.77 6,375,345,933.98 781,480,000.00 ( 2 ) Investment in associated enterprises and joint ventures Changes in the current year Balance as at the end of Investee last year Increase in the Decrease in the Profit or loss of investment Changes in other investment investment recognised by the equity method comprehensive income Anhui Kaikai Shijie E-commerce Co., Ltd. 17,400,738.44 93,109.02 Kunshan Kangsheng Investment Development Co., 219,065,984.22 -52,251,209.71 Ltd. Chutian Dragon Co., Ltd. 523,726,463.18 109,831,325.31 Shanxi Silk Road Cloud Intelligent Tech Co., Ltd. 13,333,698.78 -8,144,973.65 -1,136.65 371 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Balance as at the end of Investee last year Increase in the Decrease in the Profit or loss of investment Changes in other investment investment recognised by the equity method comprehensive income Shenzhen Kanghong xing Intelligent Technology Co., Ltd. Shenzhen Zhongkang Beidou Technology Co., Ltd. (formerly named: Shenzhen Zhongbing Konka Technology Co., Ltd.) Shenzhen Kangjia Jiapin Intelligent Electrical 5,371,364.87 1,719,225.60 Apparatus Technology Co., Ltd. Shenzhen Yaode Technology Co., Ltd. Wuhan Tianyuan Environmental Protection Co., Ltd. 352,295,640.91 35,840,487.27 Shenzhen KONKA E-display Co., Ltd. 12,567,702.52 2,778,976.23 8,655.99 Chuzhou Konka Technology Industry Development 5,899,324.39 -5,899,324.39 Co., Ltd. Chuzhou Kangjin Health Industrial Development 172,987,384.01 -36,821,079.39 Co., Ltd. Nantong Kang gian Technology Industrial Park 5,625,680.96 Operations and Management Co., Ltd. Shenzhen Kangyue Enterprise Co., Ltd. 2,999,091.61 -2,769,080.00 Dongguan Guankang Yuhong Investment Co., Ltd. 372 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Balance as at the end of Investee last year Increase in the Decrease in the Profit or loss of investment Changes in other investment investment recognised by the equity method comprehensive income Chongqing Yuanlv Benpao Real Estate Co., Ltd. Chuzhou Kangxin Health Industry Development 10,835,065.75 -2,558,013.46 Co., Ltd. E3info (Hainan) Technology Co., Ltd. 8,574,609.73 Shenzhen Kangpeng Digital Technology Co., Ltd. 3,411,153.10 -1,641,132.09 Yantai Kangyun Industrial Development Co., Ltd. 4,135,456.96 -4,135,456.96 Shandong Econ Technology Co., Ltd. 1,044,184,489.99 -29,643,085.83 Dongguan Kangjia New Materials Technology Co., 3,950,928.27 -93,956.95 Ltd. Chongqing E2info Technology Co., Ltd. 163,744,169.42 28,155,362.85 Sichuan Chengrui Real Estate Co., Ltd. 7,851,192.26 -7,851,192.26 Wuhan Kangtang Information Technology Co., Ltd. 26,654,950.30 -897,727.70 Sichuan Hongxinchen Real Estate Development Co., 6,161,929.55 -3,702,243.10 Ltd. Total 2,604,615,089.67 6,161,929.55 109,831,325.31 -87,914,423.54 100,628.36 (Continued) 373 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Closing balance Ending balance of Investee Cash dividends or Provision set Changes in other depreciation reserve profits declared to aside for Others (Carrying value) equities be distributed impairment Anhui Kaikai Shijie E-commerce Co., Ltd. 17,493,847.46 Kunshan Kangsheng Investment Development Co., 53,900,000.00 112,914,774.51 Ltd. Chutian Dragon Co., Ltd. -413,895,137.87 Shanxi Silk Road Cloud Intelligent Tech Co., Ltd. 5,187,588.48 Shenzhen Kanghong xing Intelligent Technology Co., 5,158,909.06 Ltd. Shenzhen Zhongkang Beidou Technology Co., Ltd. (formerly named: Shenzhen Zhongbing Konka Technology Co., Ltd.) Shenzhen Kangjia Jiapin Intelligent Electrical 7,090,590.47 Apparatus Technology Co., Ltd. Shenzhen Yaode Technology Co., Ltd. 214,559,469.35 Wuhan Tianyuan Environmental Protection Co., Ltd. 127,671,222.93 3,078,000.00 512,729,351.11 Shenzhen KONKA E-display Co., Ltd. 15,355,334.74 Chuzhou Konka Technology Industry Development Co., Ltd. 374 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Closing balance Ending balance of Investee Cash dividends or Provision set Changes in other depreciation reserve profits declared to aside for Others (Carrying value) equities be distributed impairment Chuzhou Kangjin Health Industrial Development Co., 136,166,304.62 Ltd. Nantong Kang gian Technology Industrial Park 5,625,680.96 Operations and Management Co., Ltd. Shenzhen Kangyue Enterprise Co., Ltd. 230,011.61 230,011.61 Dongguan Guankang Yuhong Investment Co., Ltd. Chongqing Yuanlv Benpao Real Estate Co., Ltd. Chuzhou Kangxin Health Industry Development Co., 8,277,052.29 Ltd. E3info (Hainan) Technology Co., Ltd. 8,574,609.73 Shenzhen Kangpeng Digital Technology Co., Ltd. 1,770,021.01 Yantai Kangyun Industrial Development Co., Ltd. Shandong Econ Technology Co., Ltd. -4,074,486.01 81,806,510.02 928,660,408.13 81,806,510.02 Dongguan Kangjia New Materials Technology Co., 3,856,971.32 Ltd.. Chongqing E2info Technology Co., Ltd. -5,977,391.99 185,922,140.28 375 Notes to financial statements of Konka Group Co., Ltd. 1 January 2023-31 December 2023 (Unless otherwise specified, the notes to the financial statements are presented in renminbi) Changes in the current year Closing balance Ending balance of Investee Cash dividends or Provision set Changes in other depreciation reserve profits declared to aside for Others (Carrying value) equities be distributed impairment Sichuan Chengrui Real Estate Co., Ltd. Wuhan Kangtang Information Technology Co., Ltd. 25,757,222.60 Sichuan Hongxinchen Real Estate Development Co., 2,459,686.45 Ltd. Total 117,619,344.93 56,978,000.00 82,036,521.63 -413,895,137.87 1,977,841,584.16 301,754,900.04 Note 1: The above investees are all associated enterprises. Note 2: "Other" represents the conversion of long-term equity investments accounted for under the equity method to financial assets. 376 Konka Group Co., Ltd. Annual Report 2023 4. Operating revenue and cost of sales ( 1 ) Operating income and operating costs Amount incurred in the current year Amount incurred last year Item Income Cost Income Cost Principal 1,677,401,625.28 1,809,632,592.29 1,624,421,165.68 1,872,104,013.01 business Other business 170,593,467.51 71,483,083.62 187,362,353.34 90,386,351.96 Total 1,847,995,092.79 1,881,115,675.91 1,811,783,519.02 1,962,490,364.97 ( 2 ) Information in relation to the trade price apportioned to the residual contract performance obligation The amount of revenue corresponding to performance obligations that have been contracted but have not yet been fulfilled or completed at the end of the year is RMB15,506,737.84, of which RMB15,506,737.84 is expected to be recognised as revenue in 2024. 5. Investment income Amount incurred in the Item Amount incurred last year current year Long-term equity investment income calculated by the cost method 125,381,404.76 Returns on long-term equity investments calculated by the equity -87,914,423.54 138,908,805.41 method Return on investment arising from the disposal of long-term equity 197,370,626.59 275,394,866.81 investments Conversion of long-term equity investments accounted for by the 574,780,174.75 equity method to financial assets Investment income from disposal of financial assets at fair value -55,975,275.41 through profit or loss Interest income from debt investments during the holding period 6,532,591.02 4,640,244.26 Return on investment in the financial assets held for trading during 9,383,976.00 the holding period Others 500,000.00 -5,378,929.04 Total 644,677,669.41 538,946,392.20 XVIII. Supplementary Materials to the Financial Statements 377 Konka Group Co., Ltd. Annual Report 2023 1. Items and amounts of non-recurring profit or loss in the current year Item Amount of current year Notes Profit or losses on disposal of non-current assets (including the portion offset for provisions 198,866,019.16 for asset impairment) Government subsidies included in profit and loss of the current period (except for government subsidies that are closely related to the Company's normal business operation, 264,798,178.16 comply with national policies and are enjoyed in accordance with defined criteria, and have a continuing impact on the Company's profit or loss) Profit or losses from changes in fair value of financial assets and liabilities held by non- financial corporations and profit or losses from the disposal of financial assets and -88,236,451.43 liabilities, except for effective hedging operations related to the Company's normal business operations Dispossession surcharge to non-financial institutions included in the current profit and loss Gain/Loss on entrusting others with investments or asset management Gain/loss on entrustment loans 118,808,006.95 Losses on assets resulted from force majeure factors such as natural disasters Reclassification of impairment loss allowances of receivables separately tested for 3,055,800.22 impairment Profits arising from business combination when the combined cost is less than the recognised fair value of net assets of the merged company Current net profit or loss of subsidiaries acquired in business combination under the same control from period-beginning to combination date Profit/Loss on non-monetary asset swap Profit/Loss on debt restructuring One-time costs incurred by an enterprise as a result of the discontinuation of a related operating activity, such as expenses for relocating employees One-time impact on profit or loss for the current period due to adjustments in tax, accounting and other laws and regulations One-time recognition of share-based payment expense due to cancellation and modification of equity incentive plans Cash-settled share-based payments, profit or losses arising from changes in the fair value of employee compensation payable after the date of exercisability Gain/loss on change in fair value of investment property of which the follow-up measurement is carried out adopting fair value method Income from transactions at significantly unfair prices Profit and losses arising from contingencies unrelated to the normal operation of the Company's business 378 Konka Group Co., Ltd. Annual Report 2023 Item Amount of current year Notes Custodian fees earned from entrusted operation Non-operating income and expenses other than those listed above -64,433,346.64 Other profit and loss items in line with the definition of non-recurring gains and losses 571,315,980.43 Subtotal 1,004,174,186.85 Less: Income tax effect 239,431,992.39 Effect of minority shareholders' equities (after tax) 14,087,171.21 Total 750,655,023.25 - (1)Specific information on other profit and loss items that meet the definition of non recurring gains and losses: Item Amount Reasons The main reason is that the company disposed of a portion of its equity in a subsidiary holding company, which no longer has a significant impact, resulting in a change in the Chutian Dragon Co., Ltd. 574,780,174.75 accounting method for this reporting period, from long-term equity investments (equity method) to trading financial assets, resulting in non recurring gains and losses. (2) The Company recognises items that are not listed in the Explanatory Announcement No. 1 on Information Disclosure by Companies Offering Securities to the Public--Non-recurring Profit or Loss (Revised in 2023) as non-recurring profit or loss items, and the those involving significant mounts as well as the non-recurring profit or loss items listed as recurring profit or loss items Item Amount Reasons Government subsidies which are closely related to the normal business of the company and which are in Software tax refund 5,819,853.78 accordance with national policies and certain standard quota or quantitative amount 2. Return on net assets and earnings per share EPS (RMB/share) Weighted average Profit for the Reporting Period Weighted average return on net Basic earnings per Diluted earnings assets (%) share per share Net profit attributable to ordinary shareholders of the Company as the -32.58 -0.8986 -0.8986 Parent Net profit attributable to ordinary -43.89 -1.2103 -1.2103 shareholders of the Company as the 379 Konka Group Co., Ltd. Annual Report 2023 Parent before exceptional gains and losses The Board of Directors Konka Group Co., Ltd. 1 April 2024 380