Konka Group Co., Ltd. Interim Report 2022 KONKA GROUP CO., LTD. INTERIM REPORT 2022 2022-76 August 2022 1 Konka Group Co., Ltd. Interim Report 2022 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 Guo Zhihua, 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 interim dividend plan, either in the form of cash or stock. This Report and its summary have been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail. 2 Konka Group Co., Ltd. Interim Report 2022 Table of Contents Part I Important Notes, Table of Contents and Definitions........................................................... 2 Part II Corporate Information and Key Financial Information................................................... 8 Part III Management Discussion and Analysis..............................................................................11 Part IV Corporate Governance.......................................................................................................24 Part V Environmental and Social Responsibility.......................................................................... 25 Part VI Significant Events............................................................................................................... 35 Part VII Share Changes and Shareholder Information................................................................48 Part VIII Preferred Shares.............................................................................................................. 51 Part IX Bonds................................................................................................................................... 52 Part X Financial Statements............................................................................................................54 3 Konka Group Co., Ltd. Interim Report 2022 Documents Available for Reference (I) The financial statements with the signatures and seals of the Company’s legal representative, Chief Financial Officer and head of the financial department; (II) The originals of all the Company’s documents and announcements disclosed to the public in the Reporting Period; and (III) The documents above are available at the Secretariat of the Board. 4 Konka Group Co., Ltd. Interim Report 2022 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 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. Youzhihui Shenzhen Youzhihui Technology 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. Xi'an Huasheng Xi'an Huasheng Jiacheng Real Estate Co., Ltd. XingDa HongYe GuangDong XingDa HongYe Electronic Co., Ltd. Shanghai Xinfeng Shanghai Xinfeng Zhuoqun PCB 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 Factoring Konka Factoring (Shenzhen) Co., Ltd. Beijing Konka Electronic Beijing Konka Electronic Co., Ltd. Konka Leasing Konka Financial Leasing (Tianjin) 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. 5 Konka Group Co., Ltd. Interim Report 2022 Mobile Interconnection Shenzhen Konka Mobile Interconnection Technology Co., Ltd. Sichuan Konka Sichuan Konka Smart Terminal Technology Co., Ltd Yibin Smart Yibin Konka Smart Technology Co., Ltd. Shenzhen KONSEMI Shenzhen KONSEMI Co., Ltd. Chongqing Konka Chongqing Konka Technology Development Co., Ltd. Hefei KONSEMI Hefei KONSEMI Storage Technology Co., Ltd. Yihe Electronic Hefei Yihe Electronic 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. Industrial and Trade Technology Konka Industrial and Trade Technology (Shenzhen) 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 Research Chongqing Konka Optoelectronic Technology Research Institute Co., Ltd. Institute 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. Shaanxi Konka Intelligent Shaanxi 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. Chongqing Kang xing rui Automobile Recycling Chongqing Kang xing rui Scraped Automobile Recycling 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. Yantai Laikang Yantai Laikang Industrial Development Co., Ltd. 6 Konka Group Co., Ltd. Interim Report 2022 Konka Material Hainan Konka Material 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. 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 Memory Technologies Chain Kingdom Memory Technologies (Shenzhen) Co., Limited (Shenzhen) Hongjet Hongjet (Hong Kong) Company Limited Xi'an Feihe Xi'an Feihe Real Estate Development Co., Ltd. Chongqing Xinyuan Semiconductor Chongqing Xinyuan Semiconductor Co., Ltd. Jiangxi Konka Industrial Park Jiangxi Konka Industrial Park Development Co. Ltd. Ruichang Kangrui Real Estate Ruichang Kangrui Real Estate Co., Ltd. Industrial development in Wuhan Konka Industrial Development (Wuhan) Co., Ltd. Kangxiaojia Digital Shenzhen Kangxiaojia Digital Information Technology Co., Ltd. Yijiakang Smart Terminal Shenzhen Yijiakang Smart Terminal Technology Co., Ltd. Guizhou Kangkai Material Technology Guizhou Kangkai Material Technology Co., Ltd. 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. Kangxinrun Renewable Resources Chongqing Kang xing rui Renewable Resources Co., Ltd. Guizhou Kanggui Material Technology Guizhou Kanggui Material Technology Co., Ltd. Sichun Chengrui Sichuan Chengrui Real Estate Co., Ltd. Chongqing Jiarun Chongqing Jiarun Real Estate Co., Ltd. Nantong Kanghai Nantong Kanghai Technology Industry Development Co., Ltd. Chongqing Kangyiyun Chongqing Kangyiyun Business Operation Management Co., Ltd. Kanghong Dongsheng Shenzhen Kanghong Dongsheng Investment Partnership (Limited Partnership) 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 Electronic Technology Co., Ltd. Zhe gian g Konka Technology Industry Zhe gian g Konka Technology Industry Development Co., Ltd. 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 7 Konka Group Co., Ltd. Interim Report 2022 Part II Corporate Information and Key Financial Information I Corporate Information Stock name Konka Group-A, Konka Group-B Stock code 000016, 200016 Changed 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. (if any) khang giai tập đoàn Company name in English (if any) KONKA GROUP CO.,LTD Abbr. (if any) KONKA GROUP Legal representative Zhou Bin II Contact Information Board Secretary Securities Representative Name Wu Yongjun Miao Leiqiang Board Secretariat, 24/F, Konka R&D Center, 28 Keji Board Secretariat, 24/F, Konka R&D Center, 28 Keji South Twelfth Road, Science and Technology Park, South Twelfth Road, Science and Technology Park, Address Yuehai Street, Nanshan District, Shenzhen, Guangdong Yuehai Street, Nanshan District, Shenzhen, Guangdong Province, China Province, China Tel. 0755-26609138 0755-26609138 Fax 0755-26601139 0755-26601139 Email szkonka@konka szkonka@konka address III Other Information 1. Contact Information of the Company Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes, website address and email address of the Company in the Reporting Period. □ Applicable √ Not applicable No change occurred to the said information in the Reporting Period, which can be found in the 2021 Annual Report. 2. Media for Information Disclosure and Place where this Report is Lodged Indicate by tick mark whether any change occurred to the information disclosure media and the place for lodging the Company’s periodic reports in the Reporting Period. □ Applicable √ Not applicable The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing the Company’s periodic reports and the place for lodging such reports did not change in the Reporting Period. The said information can be found in the 2021 Annual Report. 8 Konka Group Co., Ltd. Interim Report 2022 3. Other Information Indicate by tick mark whether any change occurred to other information in the Reporting Period. □ Applicable √ Not applicable IV Key Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. □ Yes √ No H1 2022 H1 2021 Change (%) Operating revenue (RMB) 16,895,470,276.81 21,810,161,873.08 -22.53% Net profit attributable to the listed company’s shareholders 172,818,438.83 85,449,919.57 102.25% (RMB) Net profit attributable to the listed company’s shareholders before -742,356,181.71 -710,124,637.85 -4.54% exceptional gains and losses (RMB) Net cash generated from/used in operating activities (RMB) -421,259,506.73 -1,284,761,222.03 67.21% Basic earnings per share (RMB/share) 0.0718 0.0355 102.25% Diluted earnings per share (RMB/share) 0.0718 0.0355 102.25% Weighted average return on equity (%) 1.87% 1.01% 0.86% 30 June 2022 31 December 2021 Change (%) Total assets (RMB) 39,312,730,372.55 39,874,520,771.26 -1.41% Equity attributable to the listed company’s shareholders (RMB) 9,283,431,087.04 9,095,278,436.41 2.07% V Accounting Data Differences under China’s Accounting Standards for Business Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting Standards 1. Net Profit and Equity under CAS and IFRS □ Applicable √ Not applicable No such differences for the Reporting Period. 2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards □ Applicable √ Not applicable No such differences for the Reporting Period. VI Exceptional Gains and Losses √ Applicable □ Not applicable Unit: RMB Item Amount Note Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) 657,751,392.73 Government subsidies through 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 335,987,367.04 policies or standards) Gain or loss on fair-value changes in held-for-trading financial assets and liabilities & income from 32,966,971.77 disposal of held-for-trading financial assets and liabilities and available-for-sale financial assets 9 Konka Group Co., Ltd. Interim Report 2022 (exclusive of the effective portion of hedges that arise in the Company’s ordinary course of business) Gain or loss on loan entrustments 54,416,927.25 Non-operating income and expense other than the above 26,896,814.20 Less: Income tax effects 135,264,660.61 Non-controlling interests effects (net of tax) 57,580,191.84 Total 915,174,620.54 Particulars about other gains and losses that meet the definition of exceptional gain/loss: □ Applicable √ Not applicable No such cases in the Reporting Period. 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 7,949,955.87 on software quotas or amounts as per government’s uniform standards 10 Konka Group Co., Ltd. Interim Report 2022 Part III Management Discussion and Analysis I Principal Activity of the Company in the Reporting Period At present, the core businesses of the Company include consumer electronics, industry trade, semiconductors, environmental protection, etc. Among them, for the industry trade business, the Company carries out the procurement, processing and distribution of related materials around the upstream and downstream of the consumer electronics business, thus it can be categorized to the consumer electronics industry or semiconductor business. Therefore, the industries in which the Company operates during the Reporting Period are consumer electronics industry, semiconductor industry and environmental protection industry. The relevant information is as follows: (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. In the first half of 2022, affected by factors such as increasingly fierce market competition, fluctuating raw material price, and sluggish scale growth under the impact of the COVID-19 pandemic, the gross profit level of the color TV industry continued to be diluted. According to statistics from All View Cloud (AVC for short), the omni-channel retail sales volume in China's color TV market was 16.72 million units in the first half of 2022, declining by 6.2% year-on-year, and the retail sales value was RMB53.1 billion, decreasing by 10.5% year-on-year. With the intelligent upgrade of electronic products and iterative update of display technologies, the color TV industry is expected to enter the stage of upgrade guided by science and technology, and the market scale of the industry is expected to grow. 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. 11 Konka Group Co., Ltd. Interim Report 2022 And the Company profits from the margins between the costs and the selling prices of its white 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. In terms of the air-conditioning industry, statistics from AVC show that the omni-channel retail sales volume of China's air-conditioning market was 21.54 million units in the first half of 2022, decreasing by 20.9% year-on-year, and the retail sales value was RMB72.7 billion, decreasing by 15.3% year-on-year. With the industrial upgrade driven by relevant policies and the recovery of consumer demand for trade-in, the air-conditioning industry is expected to maintain a steady growth trend in the future. In terms of the refrigerator industry, statistics from AVC show that the omni- channel retail sales volume of China's refrigerator market was 15.07 million units in the first half of 2022, decreasing by 5.5% year-on-year, and the retail sales value was RMB45.6 billion, decreasing by 3.4% year-on-year. As people become increasingly concerned about health and food preservation, and the upgrade trend of life quality is continuously advanced, steady development and product upgrade will become the main characteristics of the refrigerator market in the future, and health function, aesthetic appearance and differentiated door body will become the new premium direction of refrigerator products. In terms of the refrigerator industry, statistics from AVC show that the omni-channel retail sales volume of China's refrigerator market was 15,279,000 units in the first half of 2022, decreasing by 9.2% year-on-year, and the retail sales value was RMB30.9 billion, decreasing by 10.1% year-on-year. The downturn in the offline market affected the overall market performance of the washing machine industry. However, with the rise of new media channels and the improvement of enterprise cost pressure, the high-end trend of the washing machine market remained unchanged, and the market is expected to maintain a stable development trend in the future. (II) The industry trade business The Company's industry trade business mainly focuses on the procurement, processing and distribution of IC chip storage, LCD and other materials involved in the company's traditional main business. The operating profit comes from the processing fee and the price difference between upstream procurement and downstream sales. The industry trade business can help the Company 12 Konka Group Co., Ltd. Interim Report 2022 establish good relationships with its upstream suppliers and downstream customers, and keep it informed of prices of the materials used in its production for better cost control over its existing products. Additionally, it 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 semiconductor business Currently, the Company is engaged in storage, optoelectronics, etc. with respect to the semi- conductor business. In storage, the Company primarily engages in packaging and testing of storage products. In optoelectronics, the Company primarily develops Micro LED-related products. 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. (IV) The environmental protection business Currently, this business focuses on recycling of renewable resources. Renewable resources are collected, sorted, processed, distributed and sold. With the introduction of a series of favorable policies to encourage the recycling and utilization of renewable resources and the continuous enhancement of environmental protection supervision, the total amount and the total value of recycled resources in China have shown rapid growth. It is expected that the industry will continue to develop to a good prospect in the future, and the development scale of the renewable resource recycling industry will continue to grow steadily. II Core Competitiveness Analysis The Company’s core competitiveness lies in its R&D ability, brand, marketing network and human resources. It has developed an R&D system of “Konka Research Institute-secondary Group/division research centers-technology application 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 project of micro LED. In terms of brand, the Company continues to 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- 13 Konka Group Co., Ltd. Interim Report 2022 win results, and strives for development at home and abroad. Regarding offline channels, the Company has 14 branches, more than 150 offices, more than 8,000 sales outlets 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 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. III Analysis of Main Businesses (I) Overview In the Reporting Period, the Company adhered to the development strategy of "Technology + Business + Industrial Parks", and focused on the three core businesses of "New Consumer Electronics + Semiconductor + New Energy Technology" and the two supporting businesses of “Industrial Parks + Investment”, so as to promote the concentrated, steady and high-quality development of the Company. In order to continuously strengthen its competitiveness, the Company kept consolidating the three- level R&D system of "research institute - key laboratory - product R&D center", and continuously strengthened R&D investment through independent innovation, external cooperation and technology introduction. In terms of the multimedia business, the Key Technology of Intelligent Terminal Integrating Information Equipment and Synergetic Interconnection of Beacon declared by the Company won the second prize of Guangdong Science and Technology Progress Award; APHAEA A6 Pro, a newly launched intelligent scenario screen, supports free screen splice in multiple proportions, and a variety of control methods, well satisfying the needs of users for cross- ecological scenarios. In terms of the white goods business, the Control Methods for Temperature Rectification of Air-cooled Refrigerator and the A Noise Control Method for Refrigerator Using Frequency Conversion Compressor won the Science and Technology Achievement Award of Henan Province; the newly developed air-cooled -86°C cryorefrigerator for civil use opened up the market space of the Company's ultra-low temperature refrigeration products in such fields as medical treatment, military industry, scientific research and transportation. In terms of the semiconductor business, the Company is actively promoting industrialization. By now, the Company has built a whole-process mass production line for Micro LED and the Micro LED chip has begun to enter the stage of mass production, and Mini LED is ready for mass production. Additionally, Yancheng Semiconductor Assembly & Test Base has achieved batch shipment. In the Reporting Period, the white goods business of the Company achieved countertrend growth in 14 Konka Group Co., Ltd. Interim Report 2022 income scale through "Konka + Frestec" dual-brand operation and "refrigerators + washing machines + air conditioners + freezers + kitchen appliances" full-category layout. Affected by factors such as declining market demand, fluctuating raw material price and fierce market competition, the profitability of the Company's multimedia business decreased. (II) Year-on-year changes in key financial data: Unit: RMB H1 2022 H1 2021 Change (%) Main reason for change Operating revenue 16,895,470,276.81 21,810,161,873.08 -22.53% Cost of sales 16,482,440,621.84 20,817,175,713.78 -20.82% Selling expense 560,225,684.28 667,662,036.47 -16.09% Administrative expense 354,308,684.51 359,053,667.07 -1.32% Finance costs 267,115,327.58 459,415,782.71 -41.86% Increased exchange gains Income tax expense -88,858,864.36 84,263,268.37 -205.45% R&D investments 241,660,483.14 284,663,467.26 -15.11% Econ Technology has been excluded from the Net cash generated from/used in -421,259,506.73 -1,284,761,222.03 67.21% consolidated financial operating activities statements in the current period Net cash generated from/used in Increased cash flows from 114,321,239.48 -1,785,387,038.28 106.40% investing activities disinvestment Issue of RMB1.5 billion of corporate bonds in the same Net cash generated from/used in 212,673,169.75 3,939,565,440.45 -94.60% period of last year, with no financing activities such event in the current period Net increase in cash and cash -64,827,416.56 861,929,112.82 -107.52% equivalents Decreased continuing Other income 343,737,322.91 720,696,356.02 -52.30% government grants that were through profit or loss Increased income from equity Return on investment 737,803,536.05 322,244,312.89 128.96% transfer Material changes to the profit structure or sources of the Company in the Reporting Period: □ Applicable √ Not applicable No such changes. (III) Breakdown of operating revenue: Unit: RMB H1 2022 H1 2021 As % of total As % of total Change (%) Operating revenue Operating revenue operating revenue (%) operating revenue (%) Total 16,895,470,276.81 100% 21,810,161,873.08 100% -22.53% By operating division Consumer electronics 5,246,599,004.00 31.06% 6,262,070,661.11 28.71% -16.22% Industry trade 10,171,407,159.62 60.20% 12,184,495,984.54 55.87% -16.52% Environmental business 774,458,509.72 4.58% 2,724,186,133.96 12.49% -71.57% Semiconductor 50,916,083.90 0.30% 241,973,760.06 1.11% -78.96% Other 652,089,519.57 3.86% 397,435,333.41 1.82% 64.07% By product category Color TVs 2,389,828,778.20 14.15% 3,190,601,881.06 14.63% -25.10% White goods 1,900,207,771.57 11.25% 1,752,194,252.46 8.03% 8.45% Industry trade 10,171,407,159.62 60.20% 12,184,495,984.54 55.87% -16.52% Environmental business 774,458,509.72 4.58% 2,724,186,133.96 12.49% -71.57% Semiconductor 50,916,083.90 0.30% 241,973,760.06 1.11% -78.96% PCB 291,397,810.91 1.72% 365,622,811.21 1.68% -20.30% Other 1,317,254,162.89 7.80% 1,351,087,049.79 6.19% -2.50% By operating segment Overseas 7,238,742,630.40 42.84% 11,317,853,852.95 51.89% -36.04% 15 Konka Group Co., Ltd. Interim Report 2022 Domestic 9,656,727,646.41 57.16% 10,492,308,020.13 48.11% -7.96% Operating division, product category or operating segment contributing over 10% of operating revenue or operating profit: √ Applicable □ Not applicable Unit: RMB Gross YoY change in YoY change in YoY change in Operating revenue Cost of sales profit operating revenue gross profit margin cost of sales (%) margin (%) (%) By operating division Consumer electronics 5,246,599,004.00 5,090,787,997.35 2.97% -16.22% -11.65% -5.01% Industry trade 10,171,407,159.62 10,120,679,704.92 0.50% -16.52% -16.21% -0.37% Environmental 774,458,509.72 749,206,296.93 3.26% -71.57% -69.29% -7.19% business By product category Color TVs 2,389,828,778.20 2,418,706,246.97 -1.21% -25.10% -19.84% -6.64% White goods 1,900,207,771.57 1,711,652,138.98 9.92% 8.45% 6.41% 1.72% Environmental 774,458,509.72 749,206,296.93 3.26% -71.57% -69.29% -7.19% business Industry trade 10,171,407,159.62 10,120,679,704.92 0.50% -16.52% -16.21% -0.37% By operating segment Domestic 9,656,727,646.41 9,310,722,854.10 3.58% -7.96% -3.65% -4.32% Overseas 7,238,742,630.40 7,171,717,767.74 0.93% -36.04% -35.70% -0.53% Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period: □ Applicable √ Not applicable Any over 30% YoY movements in the data above and why: √ Applicable □ Not applicable The change in revenue of the environmental business was primarily driven by adjustments to the structure of the environmental business. The change in revenue of the semi-conductor business was primarily driven by a slowdown in demand for consumer electronics due to the COVID-19 pandemic. The change in overseas revenue was primarily driven by the decreased purchases by overseas customers. IV Analysis of Non-Core Businesses √ Applicable □ Not applicable Unit: RMB Amount As % of total profit Source/Reason Recurrent or not Transfer of equity investments in Return on investment 737,803,536.05 -2,391.15% Not recurrent certain subsidiaries in the period Gain/loss on changes in -638,799.36 2.07% Not recurrent fair value Impairment losses on receivables Asset impairments -91,918,302.31 297.90% Not recurrent and inventories Mainly for the company's daily Non-operating income 30,492,741.65 -98.82% business activities are not directly Not recurrent related to the increase in profits Non-operating expense 3,860,945.80 -12.51% Not recurrent 16 Konka Group Co., Ltd. Interim Report 2022 V Analysis of Assets and Liabilities 1. Material Changes in Asset Composition Unit: RMB 30 June 2022 31 December 2021 Reason Change in for As % of As % of total percentag Amount Amount material total assets assets e (%) change Monetary assets 6,534,638,395.86 16.62% 6,489,553,211.24 16.27% 0.35% Accounts receivable 3,372,628,831.51 8.58% 3,397,729,481.07 8.52% 0.06% Inventories 4,018,041,845.92 10.22% 4,068,537,809.18 10.20% 0.02% Investment property 774,860,887.71 1.97% 776,525,061.54 1.95% 0.02% Long-term equity 6,273,716,368.75 15.96% 5,902,588,939.51 14.80% 1.16% investments Fixed assets 3,960,662,993.10 10.07% 4,010,295,277.14 10.06% 0.01% Construction in 1,781,601,493.64 4.53% 1,490,777,831.39 3.74% 0.79% progress Right-of-use assets 69,287,135.98 0.18% 71,210,415.37 0.18% 0.00% Short-term 10,090,194,886.59 25.67% 9,920,675,121.08 24.88% 0.79% borrowings Contract liabilities 711,366,769.35 1.81% 652,910,408.02 1.64% 0.17% Long-term 8,245,446,057.26 20.97% 3,529,140,539.09 8.85% 12.12% borrowings Lease liabilities 51,616,953.84 0.13% 42,532,869.63 0.11% 0.02% 2. Major Assets Overseas □ Applicable √ Not applicable 3. Assets and Liabilities at Fair Value √ Applicable □ Not applicable Unit: RMB Cumul Impair ative Ot Gain/loss on ment fair- he fair-value allowa Purchased in value Sold in the r Beginning changes in nce the Ending Item change Reporting ch amount the for the Reporting amount s Period an Reporting Repor Period charge ge Period ting d to s Period equity Financial assets 4. Investments in other equity 23,841,337.16 23,841,337.16 instruments Subtotal of 23,841,337.16 23,841,337.16 financial assets - Other 2,364,852,292.22 26,700,574.54 248,874,549.86 117,004,025.26 2,470,022,242.28 Total of the - 2,388,693,629.38 248,874,549.86 117,004,025.26 2,493,863,579.44 above 26,700,574.54 Financial 0 0 liabilities Other changes Unit: RMB Gain/loss on Impairme Oth fair-value Cumulative fair- nt Purchased in Beginning Sold in the er Item changes in value changes allowanc the Reporting Ending amount amount Reporting Period chan the Reporting charged to equity e for the Period ges Period Reporting 17 Konka Group Co., Ltd. Interim Report 2022 Period Other non-current 2,293,361,603.68 -26,700,574.54 238,947,826.06 45,513,336.72 2,460,095,518.48 financial assets Receivables 71,490,688.54 9,926,723.80 71,490,688.54 9,926,723.80 financing Significant changes to the measurement attributes of the major assets in the Reporting Period: □ Yes √ No 4. Restricted Asset Rights as at the Period-End Ending carrying Item Reason for restriction value (RMB) Of which, RMB571,737,827.06 was margin deposit pledged for borrowings or issuing bank acceptance bills; RMB10,764,266.54 was financial supervision account funds; Monetary assets 631,118,593.39 RMB19,800,000.00 was fixed-term deposit that cannot be withdrawn in advance; RMB28,816,499.79 was restricted for other reasons Notes receivable 373,073,971.78 As pledge for notes issuing Investment property 106,335,030.70 As collateral for loan Fixed assets 1,198,081,326.15 As collateral for loan and finance lease Construction in 78,521,756.73 As collateral for finance lease progress Intangible assets 376,579,273.20 As collateral for loan and former shareholder guarantee Total 2,763,709,951.95 VI Investments Made 1. Total Investment Amount √ Applicable □ Not applicable Total investment amount in the Total investment amount in the same Change Reporting Period (RMB) period of last year (RMB) 2,650,070,931.19 2,768,943,435.03 -4.29% 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 Est Input Accumulat Accumulat for not Inves im Fixed Indust amount ive actual Capit Pr ive meeting tmen ate Disclosure Disclosur assets ry in the input al og realized the Item t d date (if e index (if investme involv Reporti amount as resou re revenues schedule meth rev any) any) nt or not ed ng of the rces ss as of the and od en Period period-end period-end expected ues revenues Dongguan Electr Self- Konka Self- onic 2017-03- Yes 95,666, 443,584,8 funde N/A Intelligent build indust 11 523.68 23.68 d Industrial Park ry Suining Konka Electr Self- Electronic Self- onic 2018-10- Yes 93,540, 426,602,8 funde N/A Technology build indust 17 707.10 00.00 d http://ww Industrial Park ry w.cninfo.c Chongqing Electr om.cn/ne Konka Self- Self- onic 112,779 2019-06- w/index Semiconductor Yes 397,728,6 funde N/A build indust,838.51 14 Photoelectric 16.87 d ry Industrial Park Konka Electr Intelligent Self- Self- onic 121,099 2020-06- Terminal Yes 41,044,30 funde N/A build indust.00 06 Manufacturing 6.45 d ry Base for Export 18 Konka Group Co., Ltd. Interim Report 2022 Electr Frestec Self- Self- onic 2020-07- Refrigeration Yes 35,375, 144,547,8 funde N/A build indust 21 Park 318.93 00.00 d ry Xi’an Konka Electr Smart Self- Self- onic 2021-02- Appliances Yes 10,266, 151,782,3 funde N/A build indust 10 Headquarters 565.00 39.75 d ry Project 347,750 1,605,290, Total -- -- -- -- -- -- -- -- ,052.22 686.75 Note: Construction is ongoing for Regarding Dongguan Konka Intelligent Industrial Park, Chongqing Konka Semiconductor Photoelectric Industrial Park, Suining Konka Electronic Technology Industrial Park, Konka Intelligent Terminal Manufacturing Base for Export, Frestec Refrigeration Park, and Xi’an Konka Smart Appliances Headquarters Project. 4. Financial Investments (1) Securities Investments □ Applicable √ Not applicable No such cases in the Reporting Period. (2) Investments in Derivative Financial Instruments □ Applicable √ Not applicable No such cases in the Reporting Period. 5. Use of Raised Funds √ Applicable □ Not applicable (1) General Information about Use of Raised Funds √ Applicable □ Not applicable Unit: RMB’0,000 Cumulat Purpose Re- ive re- Amount Used and Year purposed Cumulat purposed being Total in the Cumula whereab of amount ive re- amount Unused idle for Way of raising amount Curre tively outs of raisin in the purposed as % of amount more raised nt used the g Reportin amount total than two Period unused g Period amount years amount raised Public offering 2022 of corporate 120,000 0 120,000 0 0 0.00% 0 0 bonds Total -- 120,000 0 120,000 0 0 0.00% 0 -- 0 More information The bonds offering was completed on 14 July 2022. As of the date of this Report’s being authorized for issue, the raised funds have been used up. The Company used raised funds in strict compliance with the stated purposes in the prospectus, and the special account for raised funds was running well. (2) Promised Use of Raised Funds □ Applicable √ Not applicable (3) Re-purposed Raised Funds □ Applicable √ Not applicable No such cases in the Reporting Period. 19 Konka Group Co., Ltd. Interim Report 2022 VII Sale of Major Assets and Equity Investments 1. Sale of Major Assets □ Applicable √ Not applicable No such cases in the Reporting Period. 2. Sale of Major Equity Investments √ Applicable □ Not applicable Amoun t Amoun contrib t uted by contrib the uted by Relati equity the sale onshi interest to net p s to net Effect income Owner Executed as Index Relate betwe Selling income of the of the Prici ship scheduled or to Equity d-party en Disclos Counte Date of price of the sale on Compa ng fully not, if not, disclos interest transac count ure rparty sale (RMB’ Compa the ny as a prin transfe state reason ed s sold tion or erpart date 0,000) ny Compa percent ciple rred or and actions inform not y and from ny age of not taken ation the period- the Comp beginni Compa any ng to ny’s date of net sale income (RMB’ (%) 0,000) 100% Optimi owners Xi'an zing hip of the Port Compa http://w Xi'an Industri ny’s ww.cni Huashe allocati al 27 June 2,133.4 59.76% Valu 21 May nfo.co ng 22,000 6 on of No No Yes N/A Invest 2022 ation 2022 m.cn/n assets, Jiachen ment increasi ew/ind g Real ng Co., capital ex Estate Ltd. liquidit Co., y Ltd. VIII Principal Subsidiaries and Joint Stock Companies √ Applicable □ Not applicable Principal subsidiaries and joint stock companies with an over 10% effect on the Company’s net profit: Unit: RMB Relationship Principal Registered Operating Operating Name with the activity Total assets Net assets Net profit capital revenue profit Company Enterprise Konka management Ventures RMB5,000,0 consulting 223,578,126. 120,200,716. 31,161,190.4 62,703,273.4 55,537,960.5 Development Subsidiary and 00 84 08 1 2 6 (Shenzhen) incubation Co., Ltd. services Hong Kong Export & 2,551,862,87 380,991,707. 1,276,616,09 40,502,683.0 33,125,698.9 Konka Co., Subsidiary import of HKD500,000 1.39 39 9.80 2 4 Ltd. electronics Shenzhen Software Wankaida design and RMB10,000, 125,390,065. 124,169,421. 10,142,561.5 Science and Subsidiary 6,079,320.00 9,447,716.69 technology 000 33 47 9 Technology development Co., Ltd. Chain Export & USD4,876,25 1,151,676,28 141,764,411. 3,337,348,01 Subsidiary 1,068,238.30 899,361.51 Kingdom import of 5.39 4.94 64 3.59 20 Konka Group Co., Ltd. Interim Report 2022 Memory electronics Technologies Co., Limited Shenzhen Manufacturin Konka g and RMB1,000,0 6,773,237,54 139,699,961. 1,723,359,91 54,664,140.0 48,210,215.1 Electronics Subsidiary marketing of 00,000 1.98 20 6.71 3 9 Technology electronics Co., Ltd. Shenzhen Konka Manufacturin Telecommuni g and RMB480,000 1,197,850,61 261,018,865. 104,139,361. Subsidiary 7,873,162.26 7,873,162.26 cations marketing of,000 1.34 93 50 Technology electronics Co., Ltd. Subsidiaries obtained or disposed of in the Reporting Period: √ Applicable □ Not applicable How subsidiary was Effects on overall Subsidiary obtained or disposed in the operations and operating Reporting Period performance Guizhou Konka New Energy Material Technology Co., Ltd. Newly incorporated Jiangxi Konka High-tech Park Operation and Management Co., Ltd. Newly incorporated Beneficial to the development of the Shangrao Konka Electronic Technology Innovation Co., Ltd. Newly incorporated Company’s relevant Zhe gian g Konka Electronic Technology Co., Ltd. Newly incorporated business Zhe gian g Konka Technology Industry Development Co., Ltd. Newly incorporated Jiangxi Konka Industrial Park Development Co., Ltd. De-registered For better allocation of Shanghai Xinfeng Zhuoqun PCB Co., Ltd. De-registered assets Ruichang Kangrui Real Estate Co., Ltd. De-registered Sichuan Chengrui Real Estate Co., Ltd. Equity transfer Chongqing Jiarun Real Estate Co., Ltd. Equity transfer Beneficial to the Xi'an Huasheng Jiacheng Real Estate Co., Ltd. Equity transfer development of the Xi'an Feihe Real Estate Development Co., Ltd. Equity transfer Company’s relevant Konka Industrial Development (Wuhan) Co., Ltd. Equity transfer business and bring about Hefei KONSEMI Storage Technology Co., Ltd. Capital increase a certain amount of gains Hefei Yihe Electronic Co., Ltd. Capital increase Information about principal subsidiaries and joint stock companies: None IX Structured Bodies Controlled by the Company □ Applicable √ Not applicable X Risks Facing the Company and Countermeasures In regard to the consumer electronics business, the COVID-19 pandemic led to tight supply of energy and bulk commodities, partially stalled logistics and commodity trading, sluggish consumer demand and increasingly fierce market competition, due to which the Company's operating results in the consumer electronics business fell somewhat. In regard to the color TV business, the Company will promote the upgrade of the color TV business and improve the profitability thereof through the following measures: First, build technical barriers. The Company will make use of the advantages of the Micro LED business to extend to the upstream of the business, so as to form the advantages of advanced manufacturing and precision manufacturing, and drive the upgrade of the color TV business with the improvement of technical efficiency as the core. Second, consolidate high-end manufacturing. The company will give full play to its manufacturing advantages, consolidate high-end manufacturing, and actively integrate into the third-party ecological chain. In 21 Konka Group Co., Ltd. Interim Report 2022 the short run, the Company will focus on key components centering around the advantages of intelligent manufacturing; in the long run, it will build an intelligent manufacturing platform based on scientific and technological R&D, high-end manufacturing and supply chain, so as to incubate diversified intelligent hardware businesses. Third, restructure efficient channels. The Company will shift to efficient channels, arrange "online + offline" high-margin channels, master the trend of consumption classification, strengthen band construction towards young consumers, continue to promote the deep integration of online and offline operation, and improve the efficiency of both operation and channel. Fourth, expand segmented markets. The Company will explore barrier-based segmented markets centering around such technologies as 5G, AI-based IoT and 8K and, in combination with user portrait, expand the application opportunities of multiple scenarios such as HD screen and smart screen, and differentiate the layout of smart terminals such as smart health care, smart medical treatment and smart community. In terms of the white goods business, the Company will take the following measures to accelerate the scale growth of white goods and build a new growth pole for the consumer electronics business: First, promote brand upgrade. The Company is promoting the diversified development of brands through the "Konka + Frestec" dual- brand operation strategy, in an effort to build the first-class brand image of refrigerators, comprehensively improve the brand operation capability of air-conditioners and washing machines and, through the synergetic development of the two brands of Konka and Frestec, expand the Company's industrial scale in the field of white goods. Second, ensure diversified category layout. The company will, with the three core product lines of "washing machine + refrigerator + air- conditioner" as the core, explore the diversified layout of categories, strengthen the exploration of new areas such as household appliances/kitchen appliances and, taking Frestec as a breakthrough point, realize the diversified layout of white goods categories, strengthen the R&D of household appliances categories, and actively explore the new direction for integrated development of household appliances categories. Third, create high-end products. The Company will promote the strategy of high-end products and, centering around the improvement of structure and the enhancement of R&D capability for high-end products, accelerate the construction of medium- and high-end product lines, improve export product lines, and strive to promote the comprehensive upgrade of the quality and high-end orientation of products. Fourth, expand international market. The company will intensify efforts on the layout of international market, adopt targeted layout strategies in combination with the characteristics of overseas market, further improve both domestic and foreign marketing systems, strengthen the layout of domestic blank market and international market, and maximize the efficiency of channels. The semiconductor business is featured by large R&D investment and uncertain R&D results. In view of this, the company will focus on such technologies as Micro LED chip miniaturization and massive transfer, accelerate the industrialization of four optoelectronic technology projects, namely 22 Konka Group Co., Ltd. Interim Report 2022 Mini backlight, Mini direct display, Mini chip and Micro chip, and achieve technological commercialization and output as soon as possible. 23 Konka Group Co., Ltd. Interim Report 2022 Part IV Corporate Governance I Annual and Extraordinary General Meeting Convened during the Reporting Period 1. General Meetings Convened during the Reporting Period Investor Meeting Type participatio Date of the meeting Date of disclosure Resolutions of the meeting n ratio The First Extraordinary Resolutions of the First Extraordinary Extraordinary 24.2123% 22 March 2022 23 March 2022 General Meeting of 2022 General Meeting of 2022 The 2021 Annual General Resolutions of the 2021 Annual Periodic 24.1901% 25 April 2022 26 April 2022 Meeting General Meeting Resolutions of the Second The Second Extraordinary Extraordinary 24.4254% 16 May 2022 17 May 2022 Extraordinary General Meeting of General Meeting of 2022 2022 Resolutions of the Third The Third Extraordinary Extraordinary 24.4426% 27 June 2022 28 June 2022 Extraordinary General Meeting of General Meeting of 2022 2022 2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed Voting Rights □ Applicable √ Not applicable II Change of Directors, Supervisors and Senior Management √ Applicable □ Not applicable Name Office title Type of change Date of change Reason for change Sun Qingyan Vice President Dismissed 28 February 2022 Resigned for change of job Li Zheng Director Retired 28 February 2022 Resigned for job arrangement Ye Xingbin Director Elected 21 March 2022 Elected as director by the general meeting Lin Hongfan Vice President Appointed 1 June 2022 Appointed by the Board of Directors III Interim Dividend Plan □ Applicable √ Not applicable The Company has no interim dividend plan, either in the form of cash or stock. IV Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for Employees □ Applicable √ Not applicable No such cases in the Reporting Period. 24 Konka Group Co., Ltd. Interim Report 2022 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 Num ber Nam Way Distributio Exce of Total e of Name of major of n of Discharge standards Approved total ssive disch Discharge concentration disch pollu pollutants discha discharge implemented discharge disch arge arge ter rge outlets arge outle ts Total Pollution sources PH 6-9; total disch Total discharge of waste water: copper≤0.3mg/L; arge of major PH, total copper, Disch COD≤50mg/L; ammonia of pollutants: COD COD, arge Main nitrogen≤8mg/L; total wast 19.061250 ammonia nitrogen of Xing discharge nitrogen≤15mg/L; total GB 21900-2008 e tons/year; ,total nitrogen, statio Da outlet of phosphorus≤0.5mg/L; Discharge Standard water ammonia nitroge total phosphorus, nary 1 None Hong the waste total cyanide≤0.2mg/L; For Pollutants From: n 3.0498 total cyanide, pollut Ye water total nickel≤0.1mg/L; Electroplating 497,8 tons/year; total total nickel, total ion station total iron≤2mg/L; total 35 nitrogen 32.9792 iron, total sourc aluminum≤2mg/L; thous tons/year; total aluminum, es petroleum≤2mg/L; and phosphorus petroleum, suspended solids≤30mg/L tons/ 0.2082 tons/year suspended solids year Emission Standard for Electroplating Total discharge: Pollutants 2,986,560,000 GB21900-2008 Air standard waste gas sulfuric acid Emission Limits cube/year (note: pollutants: fume≤30mg/m3; nitrogen Table 5, Emission the total sulfuric acid Disch Three on oxide≤200mg/m3; standard of Volatile discharge is not fume, hydrogen arge the roof of hydrogen Organic 2,986 stated in the chloride, of plant 1, chloride≤30mg/m3; Compounds for,560, latest version of Xing formaldehyde, statio ten on the hydrogen Printing Industry 000 national Da hydrogen nary 14 roof of cyanide≤0.5mg/m3; DB44/815-2010; stand discharge permit None Hong cyanide, nitrogen pollut plant 2 and TVOC≤90mg/m3; Guangdong Air ard in 2021; two Ye oxide, ammonia, ion one on the benzene≤1mg/m3; Pollutant Emission cube/ exhaust towers benzene, sourc roof of the toluene+xylene≤15mg/m3 Standard DB44/27- year were added in toluene+xylene, es canteen; tin and its 2001 the Second 2021; calculated TVOC, tin and its compounds≤8.5mg/m3; Level Standard in based on air compounds, PM(dust)≤120mg/m3 the Second Period, volume in PM(dust) Emission standard environmental for Odor Pollutants impact (GB 14554-1993) assessment) Table 2 Standard 1. Discharge standard of discharge permit: Discharge Standard of Electroplating 1. Emission standard for Water Pollutant for Total discharge pollution discharge 318,3 Electroplating amount is Bolu certificate: 00 Disch DB44/1597-2015 318,300 o copper≤0.5mg/L; tons/ Wastewater arge Table 1 Pearl River tons/year; COD Konk Main COD≤80mg/L; ammonia year pollution: PH, of Delta Discharge is 19.2 tons/year; a and discharge nitrogen≤10mg/L; total Note: copper, COD, statio Standard; 2. Local ammonia Bolu outlet of nitrogen≤20mg/L; total accor ammonia nary 1 discharge standard: nitrogen is 2.4 None o the waste phosphorus≤0.5mg/L; 2. ding nitrogen, total pollut BFBH [2019] No. tons/year; total Konk water local emission standard: to nitrogen, total ion 58 Document: nitrogen is 4.8 a station copper≤0.5mg /L; disch phosphorus sourc COD, ammonia tons/year. Note: Preci COD≤30mg/L; ammonia arge es nitrogen, total according to the sion nitrogen≤1.5mg/L; total perm phosphorus based discharge nitrogen≤10mg/L; total it on "Environmental certificate phosphorus≤0.3mg/L Quality Standards for Surface Water GB3838-2002" Category IV water standard, the total 25 Konka Group Co., Ltd. Interim Report 2022 nitrogen discharge reaches 50% of discharge limit requirement of the corresponding industry Emission Standard sulfuric acid for Electroplating fume≤30mg/m3; Pollutants waste nitrogen GB21900-2008 Air gas pollutants: oxide≤200mg/m3; Emission Limits Bolu sulfuric acid Disch Six on the hydrogen Table 5, Guangdong o fume, hydrogen arge roof of chloride≤30mg/m3; Air Pollutant The total Konk chloride, of plant 1, TVOC≤90mg/m3; Emission Standard discharge is not a and formaldehyde,hyd statio fourteen DB44/27-2001 the stated in the Bolu benzene≤12mg/m3; rogen cyanide, nary 20 on the roof Second Level / latest version of None o methylbenzen≤40mg/m3 nitrogen oxide, pollut of plant 2 Standard in the national Konk; ammonia, benzen ion and one in Second Period, discharge permit a dimethylbenzene≤70mg/ e, methylbenzene, sourc sewage Emission standard in 2020 Preci m3; tin and its TVOC, tin and its es station for Odor Pollutants sion compounds≤8.5mg/m3; compounds, PM (GB 14554-1993) (dust), oil fume PM ( dust ) Table 2 Standard, ≤120mg/m3; oil Emission standard fume≤2mg/m3 of cooking fume (GB18483-2001) The construction of anti-pollution facilities and its operation situation 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. 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 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 26 Konka Group Co., Ltd. Interim Report 2022 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, the discharge capacity would reach 1,100 tons per day. The aforementioned 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 Dong gian g River. Environmental impact assessment and other environmental protection administrative licenses of the construction project 1. XingDa HongYe Guangdong Xingda Hongye Electronics Co., Ltd. obtained the approval from Zhongshan Environmental Protection Bureau (ZHJ [2004] No. 61) for the operations and construction here in 2004. Subsequently, it obtained the documents of ZHJD [2008] No. 06250 and ZHJD [2010] No. 04469 respectively in 2008 and 2010. After the operations of its original project, Guangdong Xingda Hongye Electronics Co., Ltd. passed the two phases of acceptance assessment, including the Phase I acceptance assessment in 2008 (HY [2008] No. 02) and the Phase II acceptance assessment in 2012 (ZHYBG [2012] No. 000092). In December 2012, Guangdong Xingda Hongye Electronics Co., Ltd. commissioned Zhongshan Research Institute of Environmental Protection Science to conduct the assessment of environmental impact for the technical improvement and expansion project of Guangdong Xingda Hongye Electronics Co., Ltd. On 31 December 2012, it obtained the approval document titled Reply to the Report on the Environmental Impact of the Technical Improvement and Expansion Project of 27 Konka Group Co., Ltd. Interim Report 2022 Guangdong Xingda Hongye Electronics Co., Ltd. (ZHJS (2012) No. 115) from Zhongshan Environmental Protection Bureau. The document granted the approval for addition of the production of six-layer PCB, eight-layer PCB and above and HDI boards and for reduction of the production of single-sided PCB. After the technical improvement and expansion, the total production capacity of single-sided PCB would be 200,000 m2/year, of double-sided PCB would be 250,000 m2/year, of four-layer PCB would be 300,000 m2/year, of six-layer PCB would be 200,000 m2/year, of eight-layer PCB and above would be 150,000 m2/year and of HDI boards would be 100,000 m2/year. In the project, while the original plating equipment and processes remained unchanged, the brown oxide process was added to the original production process; all the increased plating capacity would be outsourced. The technical improvement and expansion project was commenced in 2013 and completed in January 2018. The commissioning was carried out from 10 February 2018 to 8 July 2018. The construction of the project complied with the requirements for environmental impact assessment and met the criteria for the acceptance of environmental protection for the completion of construction projects. In 2021, the Company renewed/changed the state sewage permit, certificate No.: 91442000768405216J001P. 2. Boluo Konka and Boluo Konka Precision In 2000, Boluo Konka obtained the approval from the Huizhou Municipal Ecology and Environment Bureau (HSHJ [2000] No. 23). The project was completed and put into operation in the same year. The pollutant discharge permit No. is 91441322721121283N001U. In January 2007, Boluo Konka appointed Huizhou Institute of Environmental Sciences to conduct the environmental impact assessment of the Boluo Konka Expansion Project. On February 8, 2007, Boluo Konka received the Document of Approval for the Environmental Impact Report on the Project of Boluo Konka Double Sided and Multi-Layer Boards (HSHJ [2007] No. J32). According to the Document, approval was given to the addition of double sided and multi-layer circuit boards in the project expansion. The production capacity for single sided circuit boards would reach 1 million square meters per year, and double sided and multi-layer circuit boards would reach 650,000 square meters per year after the project expansion. In addition, electroplating equipment and process would be added in the expansion project. The construction of the project met the environmental assessment requirements and satisfied the conditions for the environmental protection in the project inspection and acceptance. The pollutant discharge permit was obtained in the same year. The aforementioned project was later renamed as Boluo Konka Precision. In 2020, Boluo Konka Precision obtained the national pollutant discharge permit with the permit No. 91441322799316208F001V. Contingency plan for emergent environmental incident 1. XingDa HongYe In strict accordance with requirements of laws, regulations and relevant documents, such as Law of 28 Konka Group Co., Ltd. Interim Report 2022 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 Zhongshan Environmental Protection Bureau, Guangdong Province, record No.: 442000-2020- 0348-M. In addition, the Company conducts a drill of major environmental pollution incident on its factory to enhance its emergency response capabilities for emergent environmental pollution incidents. Furthermore, Guangdong Xingda Hongye Electronics Co., Ltd. has built an emergency pool (which is the comprehensive water tank in the sewage treatment station covering an area of 800m3) and set up a fire pool (500m3 and located on Floor 1 of Factory Building No. 2), which serve as temporary storage pools for exterior drainage or fire drainage to eradicate accidental discharge of wastewater in the case of failed operation of the sewage transmission pipeline or fire accident due to outage or other special circumstances. The sewage transmission pipeline has been equipped with anti- corrosion and cathodic protection using anti-corrosion pipes and carbon steel pipes. Pursuant to the new discharge standards, the related discharge pipeline has been modified and the production department has been required to discharge strictly in accordance with discharge standards to cut the costs of wastewater treatment. Different types of wastewater are normally and properly treated through fine shunting. Personnel have been specially arranged to manage the chemical liquid warehouse and exert reasonable control and requirements over the liquid discharge by the plant and timely transportation of the liquid by suppliers; emergency tools such as protective masks, boots and immiscible pumps have been equipped. 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 29 Konka Group Co., Ltd. Interim Report 2022 (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 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. 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 monitoring for the PH, COD and ammonia nitrogen pollutants discharged in wastewater through real-time monitoring and an automatic frequency of every two hours, entrusts the qualified third- party online monitoring equipment operation and maintenance institute to carry out periodic maintenance on automatic monitoring equipment and monitoring data networking equipment, and entrusts the qualified third-party monitoring unit to carry out the “three wastes” project monitoring. All self-monitoring plan results will be reported and disclosed on public platforms on a periodic basis. In the case of normal production, the results will be updated on a daily basis, with online monitoring data disclosed in real time and manual monitoring data disclosed on the Real time publicity or every 2 hours after completion. Items monitored on a monthly basis will be disclosed by the 10th day of the month. In the case of public holidays, the operation monitoring data for the holiday period will be disclosed on the first working day after the holiday. The annual self- monitoring report for the previous year will be disclosed at the end of January each year. In the case of shutdown with days off, the number of days off will be indicated in the information bar and related proofs will be submitted to the monitoring center of the municipal environmental bureau for record. The results are disclosed on Guangdong Province Key Pollution Source Regulatory 30 Konka Group Co., Ltd. Interim Report 2022 Information Platform and on National Pollution Source Monitoring Information Management and Sharing Platform for public monitoring. 2. Boluo Konka and Boluo Konka Precision In line with the requirements of environmental departments, Boluo Konka and Boluo Konka Precision attach great importance to environmental monitoring and management. Based on the Measures for the Self-Monitoring and Information Publicity of Enterprises under National Key Monitoring, Environmental Impact Report and the opinions stated in reply to the environmental assessment, they have established the Environmental Self-Monitoring Plan of Enterprises and filed a record with the municipal ecology and environment bureau. According to the plan, they have installed an online monitoring system to monitor the PH value, total flow, COD, ammonia nitrogen and total phosphorus of the waste water, and networked with the ecology and environment bureau. They appoint a qualified third-party online monitoring equipment operation and maintenance organization to perform regular maintenance of the automatic monitoring equipment and the monitoring data networking equipment, and a qualified third-party monitoring organization to perform the monitoring of the “three wastes”. All self-monitoring results will be reported and published on public platforms and subject to public monitoring. No administrative punishments were received in the Reporting Period due to environmental issues. Other environmental information that should be disclosed 1. XingDa HongYe The environmental protection investment of Guangdong Xingda Hongye Electronics Co., Ltd. for H1 2022 was approximately RMB21 million, mainly used for the investment 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 Boluo Konka and Boluo Konka Precision invested approximately RMB5.65 million on environmental protection in H1 2022 in total, mainly used for the daily operation and management of waste water and gas as well as the maintenance and upgrading of equipment. Measures taken to decrease carbon emission in the Reporting Period and corresponding effects □ Applicable √ Not applicable 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 31 Konka Group Co., Ltd. Interim Report 2022 People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste in the daily production and operation, without being punished for violations of laws and regulations during the Reporting Period. 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 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. 32 Konka Group Co., Ltd. Interim Report 2022 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. In the first half of 2022, the Company made donations to and purchased agricultural products from Tianzhu County and Sansui County in Guizhou Province, with a total of about RMB320 thousand. 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 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 33 Konka Group Co., Ltd. Interim Report 2022 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. 34 Konka Group Co., Ltd. Interim Report 2022 Part VI Significant Events I 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. 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 No such cases in the Reporting Period. IV Engagement and Disengagement of Independent Auditor Are the interim financial statements audited? □ Yes √ No The interim financial statements of the Company have not been audited. V Explanations Given by the Board of Directors and the Supervisory Committee Regarding the Independent Auditor's “Modified Opinion” on the Financial Statements of the Reporting Period □ Applicable √ Not applicable VI Explanations Given by the Board of Directors Regarding the Independent Auditor's “Modified Opinion” on the Financial Statements of Last Year □ Applicable √ Not applicable VII Insolvency and Reorganization □ Applicable √ Not applicable No such cases in the Reporting Period. VIII Legal Matters Significant lawsuits and arbitrations: √ Applicable □ Not applicable Invol ved Index to amou Discl Provisi Execution of disclosed General information nt Progress Decisions and effects osure on decisions informatio (RM date n B’0,0 00) Because of a dispute over a 3,137 The case The case has entered The case is in 19 http://www No purchase and sales contract, the.20 is in the execution phase. execution. Septe.cninfo.co 35 Konka Group Co., Ltd. Interim Report 2022 Company's subsidiary, Konka execution. Based on the principle mber m.cn/new/i Huanjia Environmental of prudence, the 2020 ndex Technology Co., Ltd., sued Dalian Company has accrued Guangxin Environmental corresponding Protection Equipment Technology impairment reserves in Development Co., Ltd., requiring accordance with the latter to return equipment accounting policies. payment already made and pay liquidated damages. As the bills held by the Company The first instance has failed to be paid upon maturity, been concluded. Based the Company filed a lawsuit with on the principle of The first 19 http://www the court, requesting the latter to prudence, the 20,00 instance The case is in Septe.cninfo.co order Wuhan Jialian Agricultural No Company has accrued 0 has been execution. mber m.cn/new/i Technology Development Co., corresponding concluded. 2020 ndex Ltd. to pay the aforesaid bills and impairment reserves in corresponding interest to the accordance with Company. accounting policies. The second instance Because of a dispute over a trial is ongoing. Based purchase and sales contract, The on the principle of Wumart Stores, Inc. sued the http://www second prudence, the 25 Beijing Branch of the Company to 1,783 The case is under.cninfo.co No instance Company has accrued June the People's Court of Shijingshan.07 trial. m.cn/new/i trial is corresponding 2019 District in Beijing, requiring the ndex ongoing. impairment reserves in Beijing Branch to return the accordance with prepayment for goods. accounting policies. The Company has recovered Because of a dispute over loan, the The case has entered execution Company's subsidiary, Anhui the execution payment Konka Electronic Co., Ltd., phase.Based on the of 19 http://www applied for arbitration with principle of prudence, 2,141 USD3,005 The case is in Septe.cninfo.co Chuzhou Arbitration Commission, No the Company has .50,700 and execution. mber m.cn/new/i requiring the respondent, Makena accrued corresponding RMB63,5 2020 ndex Electronic (Shenzhen) Co., Ltd., impairment reserves in 00, with to assume the guarantee accordance with the responsibility. accounting policies. remaining payment still in execution. Because of a dispute over a The case has entered contract, the Company filed a the execution stage. lawsuit with Zhengzou Based on the principle Intermediate People's Court, 19 http://www The case of prudence, the requiring Henan Radio and 3,904 The case has been Septe.cninfo.co No is in Company has accrued Television Network Co., Ltd. to.90 concluded. mber m.cn/new/i execution. corresponding take delivery of goods, make 2020 ndex impairment reserves in payment for goods, and pay accordance with interest and liquidated damages accounting policies. according to the contract. Because of a dispute over a contract, Makena Electronic The (Shenzhen) Co., Ltd. filed a plaintiff 1 http://www lawsuit with the court, requiring The plaintiff has 2,662 has The plaintiff has Dece.cninfo.co the Company and the Company's No withdrawn the .43 withdrawn withdrawn the lawsuit. mber m.cn/new/i subsidiary, Shenzhen Konka lawsuit. the 2021 ndex Electronics Technology Co., Ltd., lawsuit. to make payment for goods and pay interest for overdue payment. 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) 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 36 Konka Group Co., Ltd. Interim Report 2022 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 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 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; 5. 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; 6. 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; 7. 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; 8. 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; 9. Because of dishonor of notes receivable, Konka Factoring filed a lawsuit with the court, requiring Tahoe Group Co., Ltd., Fuzhou Taijia Industrial Co., Ltd. and Xiamen Lian giường Microelectronics Co., Ltd. to make the payment of the note and the corresponding interest to Konka Factoring. 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) 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. Due to the Jiangxi Xinxin Jian’an Engineering Co., Ltd. (hereinafter referred to as the “Jiangxi Xinxin” ), Jiangxi Shanshi Technology Development Co., Ltd. (hereinafter referred to as the “Jiangxi Shanshi” ), Jiangxi Zhongyi Decoration Materials Co., Ltd. (hereinafter referred to as the “Jiangxi Zhongyi” ) failed to repay the loan and its interest of China Great Wall AMC Jiangxi Branch (hereinafter referred to as the “Great Wall Jiangxi Branch” ), the Great Wall Jiangxi Branch sued to the court, and required Jiangxi Xinxin, Jiangxi Shanshi, Jiangxi Zhongyi to repay RMB300 million with RMB108,000 liquidated damages, and RMB13.65 million of interest. Meanwhile, 9 guarantors including Jiangxi Konka, Xinfeng Microcrystalline and Nanocrystal are required to undertake joint liability guaranty. The judgment of first instance required that Jiangxi Xinxin, Jiangxi Zhongyi and Jiangxi Shanshi shall repay the principal, interest and liquidated damages to Great Wall Jiangxi Branch and the guarantors bear the joint liability for satisfaction to the debts. The defendants have appealed against the first instance judgment. Later, the court of second instance ruled that the case should be returned to the court of first instance for retrial. 3. Because of a dispute over a contract, the Company's subsidiary, Shenzhen Konka Unifortune Technology Co., Ltd. sued Shenzhen Yaode Technology Co., Ltd., Dongsheng Xinluo Technology Co., Ltd., Shenzhen Hongyao Dingsheng Investment Management Limited Partnership, Shenzhen Xiangrui Yingtong Investment Management Co., Ltd., Luo Jingxia, Luo Zongwu, Luo Zongyin, Luo Zaotong and Luo Saiyin, requiring them to make the payment of goods and liquidated damages; 4. 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; 5. Because of a dispute over an agency agreement, the Company's subsidiary, Henan Frestec Refrigeration Appliance Co., Ltd. sued Shenzhen Meisenyuan Plastic Electronics Co., Ltd., Shantou Meisen Technology Co., Ltd., Lin Yuanqin, Huang Ruirong, Chuangfu Commercial & 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; 6. Because of a dispute over an Agency Agreement, the Company's subsidiary, Anhui Konka Electronics Technology Co., Ltd. sued Shenzhen Meisenyuan Plastic Electronics Co., Ltd., Shantou Meisen Technology Co., Ltd., Lin Yuanqin, Huang Ruirong, Jiangsu Huadong Hardware Zone Co., Ltd., requesting to terminate the contract and requesting them to return the payment of goods and liquidated damages and priority shall be 37 Konka Group Co., Ltd. Interim Report 2022 given to the payment for the secured assets; 7. Because of a dispute over an Agency Agreement, the Company's subsidiary, Anhui Konka Electronics Technology Co., Ltd. sued Shantou Meisen Technology Co., Ltd., Shenzhen Meisenyuan Plastic Electronics Co., Ltd., Lin Yuanqin, Huang Ruirong, Jiangsu Huadong Hardware Zone 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; 8. Because of a dispute over an Agency Agreement, the Company's subsidiary, Hainan Konka Material Technology Co., Ltd. sued Shantou Meisen Technology Co., Ltd., Shenzhen Meisenyuan Plastic Electronics Co., Ltd., Jiangsu Huadong Hardware Zone 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; 9. Due to the infringement of trademark and unfair competition, the Company sued Fu'an Xinshang Electronics Co., Ltd., Fu gian Zhaoguan Industry and Trade Co., Ltd., Jinhua Kangjia Medical Apparatus Factory, and Wang Jun, requesting an order to cease the infringement and an claim for compensation for losses; 10. Because of a dispute over repurchase, the Company sued Luo Zaotong, Luo Jingxia, Luo Zongyin, Luo Zongwu, Shenzhen Yaode Technology Co., Ltd., requesting the payment of share repurchase and interest; 15. Because of a dispute over a contract, Makena Electronic (Shenzhen) Co., Ltd. filed a lawsuit, requesting the Company and its subsidiary Shenzhen Konka Electronics Technology Co., Ltd. to pay the price of goods and the interest for late payment. 11. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Dalian Jinshunda Material Recycling Co., Ltd., Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 12. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Dalian Xinjie Renewable Resources Co., Ltd, Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 13. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Dalian Tian xing Renewable Resources Co., Ltd, Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 14. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Huanjia Mingtai (Dalian) Renewable Resources Co., Ltd, Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 15. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Lankao Shunjia Renewable Resources Co., Ltd, Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 16. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Henan Shunhenghui Renewable Resources Co., Ltd, Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 17. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Henan Jiaxin Renewable Resources Co., Ltd, Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 18. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Henan Shengxiang Renewable Resources Co., Ltd, Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 19. Because of a dispute over a logistics contract, Hefei Anluda Logistics Co., Ltd. sued the Company's subsidiary, Anhui Konka Tong giường Electrical Appliances Co., Ltd. with the People's Court of Nanqiao District in Chuzhou, requiring the latter to return the performance bond, pay transportation fee and interest already incurred, and bear legal costs. 20. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Zhe gian g Jiade Renewable Resources Co., Ltd, Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 21. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Zhe gian g Zhijie Renewable Resource Recycling Co., Ltd., Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 22. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Zhe gian g Xinkai Renewable Resource Recycling Co., Ltd., Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 23. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Henan Huanjia Chengxin Eco-protection Technology Co., Ltd., Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 24. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Henan Xincheng Renewable 38 Konka Group Co., Ltd. Interim Report 2022 Resource Recycling Co., Ltd., Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 25. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Konka Huanjia Environmental Technology Co., Ltd., sued Henan Guozheng Eco-protection Technology Co., Ltd., Huanjia Group Co., Ltd., Wang Bingde, Zhang Xueyin and Wang Renping, requiring them to return the advance payment and pay liquidated damages. 26. Because of a dispute over a purchase and sales contract, the Company's subsidiary, Dongguan Konka Electronic Co., Ltd., filed a lawsuit with the People's Court of Nanshan District in Shenzhen, requesting Dongguan Gaoneng High Polymer Materials Co., Ltd., Wang Dong, Shenzhen Xinlian Xingyao Trade Co., Ltd., Shenzhen Jinchuan Qianchao Network Technology Co., Ltd., Puning Junlong Trade Co., Ltd. and Huang Zhihao to make the overdue payment for goods and pay corresponding liquidated damages. Other legal matters: □ Applicable √ Not applicable IX Punishments and Rectifications □ Applicable √ Not applicable X Credit Quality of the Company as well as its Controlling Shareholder and De Facto Controller □ Applicable √ Not applicable XI Major Related-Party Transactions 1. Continuing Related-Party Transactions √ Applicable □ Not applicable Obtaina As % ble Index Relati of total Approv Over market to onshi Tran Total value ed Method Type of Pricing the price Disclos discl Related p with Specific sacti value of all transact of transact princip approv for ure osed party the transaction on (RMB’ same- ion line settlem ion le ed line same- date infor Comp price 0,000) type (RMB’ ent or not type matio any transact 0,000) transact n ions ions OCT Under Purchas Enterpr the e of Property ises same commo manageme Negoti Mark 30 Co., 3,771.2 nt, utilities, ated et 0.74% 10,000 Not Cash N/A March Ltd and 0 actual dities office price price 2022 its leases http:/ subsidi contro and /ww aries ller services w.cni Sale of nfo.c TVs, om.c OCT Under Sales of intelligent n/ne Enterpr the goods w/ind terminals, ises ex same and etc. and Negoti Mark 30 Co., 13,351. collection ated et 2.54% 20,000 Not Cash N/A March Ltd and 24 actual services of price price 2022 its installation subsidi contro charges for aries ller smart TV terminals 17,122. Total -- -- -- 30,000 -- -- -- -- -- 44 Large-amount sales return in detail N/A The Company has published the Forecasting Public Notice on Routine Related-party Transaction for Give the actual situation in the Reporting Y2022 on Securities Times, Shanghai Securities News, and China Securities Journal as well as the Internet Period (if any) where an estimate had been website designated by CSRC http://http:// cninfo.cn/new/index on 30 March 2022. In the made for the total value of continuing Reporting Period, the basis for pricing, transaction price, transaction amount and settlement methods of related-party transactions by type to occur in raw materials purchased by the Company were basically in accordance with the forecast. The total amount the Reporting Period incurred was RMB171.2244 million. Reason for any significant difference between the transaction price and the market N/A reference price (if applicable) 39 Konka Group Co., Ltd. Interim Report 2022 2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments □ Applicable √ Not applicable No such cases in the Reporting Period. 3. Related-Party Transactions Regarding Joint Investments in Third Parties □ Applicable √ Not applicable No such cases in the Reporting Period. 4. Credits and Liabilities with Related Parties √ Applicable □ Not applicable Indicate by tick mark whether there were any credits and liabilities with related parties for non- operating purposes. √ Yes □ No Credits receivable with related parties: Whether Increased in Recovered Interest in there is Beginni the in the the Ending occupation ng Related Forming Reporting Reporting Reporting balance Related party on non- balance Interest rate relationship reason Period Period Period (RMB’0,00 operating (RMB’0 (RMB’0,00 (RMB’0,00 (RMB’0,00 0) capital or,000) 0) 0) 0) not Chuzhou Demand Subsidiary Kangjin Health of of 15,773. Industry business Not 0 2,450 7.00% 522.37 13,323.64 controlling 64 Development developm shareholder Co., Ltd. ent Effects of credits with related parties on the No effect to the normal operation of the Company. The Company and other shareholders of Chuzhou Company’s operating results and financial Kangjin Health Industry Development Co., Ltd. offer financial assistance under the same conditions in conditions accordance to their shareholding ratio. Liabilities payable to related parties: Increased in Recovered in Interest in Beginning the the the Ending Related Related Forming balance Reporting Reporting Interest Reporting balance relation party reason (RMB’0,000 Period Period rate Period (RMB’0,000 ship ) (RMB’0,000 (RMB’0,000 (RMB’0,0 ) ) ) 00) 1,091.00 1,091.00 4.04% 22.16 The 100,000.00 48,909.00 4.04% 2,031.22 51,091.00 OCT Control Company Enterprise ling 20,000.00 4.04% 406.24 20,000.00 applies s Co., shareh 150,000.00 4.04% 2,895.33 150,000.00 entrusted Ltd. older 50,000.00 4.04% 241.28 50,000.00 loan to it 70,000.00 4.04% 282.80 70,000.00 100,000.00 100,000.00 4.04% 11.22 Effects of liabilities with related The Company applies entrusted loan from OCT Enterprises Co., Ltd. which meets the parties on the Company’s operating needs of the company's existing business development and reduces the financing cost. results and 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 40 Konka Group Co., Ltd. Interim Report 2022 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 √Applicable □ Not applicable In order to satisfy the capital needs of Chuzhou Kangjin Health Industry Development Co., Ltd. (Chuzhou Kangjin) for daily operations, as of the disclosure date of this periodic report,the Company made a capital increase of RMB157.7359 million to Chuzhou Kangjin (consideration of RMB1 for RMB1 of registered capital) together with Shanghai OCT Co., Ltd. in proportion to their shareholding percentages in Chuzhou Kangjin. Upon the capital increase, the registered capital of Chuzhou Kangjin would increase from RMB30 million to RMB351.91 million. And the Company’s shareholding percentage in Chuzhou Kangjin would remain unchanged. Index to the public announcements about the said related-party transactions disclosed Title of public announcement Disclosure date Disclosure website Announcement on a Capital Increase to Chuzhou Kangjin Health Industry 2 June 2022 Development Co., Ltd. and the Related-party Transaction Announcement on the Provision of Guarantee Line for Joint Stock Company and 28 April 2022 the Related-party Transaction Announcement on the Application to China Everbright Bank for Comprehensive 30 March 2022 Credit Line & the Related-party Transaction http:// cninfo. Announcement on the Provision of Counter-guarantee for the Application to Bank 30 March 2022 com.cn/new/index for Credit Line & the Related-party Transaction Announcement on the Termination of the Asset Acquisition by Share Offering and 7 March 2022 Cash Payment and Raising the Matching Funds & the Related-party Transaction Announcement on the Provision of Counter-guarantee by Shenzhen Konka Telecommunications Technology Co., Ltd. to Shenzhen Overseas Chinese Town 23 February 2022 Co., Ltd. & the Related-party Transaction XII 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 rental revenue of Konka R&D Building was approximately RMB34,263,075.17 in the Reporting Period. The project bringing about gains or losses as over 10% of total profit in the Reporting Period 41 Konka Group Co., Ltd. Interim Report 2022 □ 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) Disclosure date of Actual Actual Type of Collater Counter Term of Having Guarantee Line of Obligor the guarantee line occurrence guarantee guarante al (if guarantee guarant expired for a related guarantee announcement date amount e any) (if any) ee or not party or not Yibin OCT San gian g 2018/09/19 and Joint- Three 40,000 2019/09/29 14,000 No Not Not Yes Properties Co., Ltd. 2020/03/24 liability years 1,749 Joint- One 2022/05/19 No Not Not Not liability year 3,747 Joint- One 2022/05/17 No Not Not Not liability year Econ Technology 2022/04/28 50,000 4,997 Joint- One 2022/05/18 No Not Not Not liability year 250 Joint- One 2022/06/28 No Not Not Not liability year Shenzhen Overseas Joint- One Chinese Town Co., 2022/02/23 16,000 2022/05/31 10,000 No Not Not Not liability year Ltd. Foshan Pearl River Media Creative Park Joint- One 2022/04/28 1,372 2022/05/17 980 No Not Not Not Culture Development liability year Co., Ltd. Jiangxi Xinxin Joint- Jian’an Engineering 10,000 2016/12/12 10,000 No Not Not Not liability Co., Ltd. Jiangxi Zhongyi Joint- Decoration Materials 10,000 2016/12/12 10,000 No Not Not Not liability Co., Ltd. Jiangxi Shanshi Technological Joint- 10,000 2016/12/12 10,000 No Not Not Not Development Co., liability Ltd. Total approved line for such guarantees in the Reporting Total actual amount of such guarantees in the Reporting Period 651,872 21,723 Period (A1) (A2) Total approved line for such guarantees at the end of the Total actual balance of such guarantees at the end of the 785,572 65,723 Reporting Period (A3) Reporting Period (A4) Guarantees provided between the Company and subsidiaries Guarantee Disclosure Line of Actual Collater Counter Having for a date of the Actual occurrence Type of Term of Obligor guarante guarantee al (if guarantee expired or related guarantee line date guarantee guarantee e amount any) (if any) not party or announcement not 2021/07/16 6,000 Joint-liability No Not One year Not Not 2018/05/23 Anhui 2021/10/28 3,000 Joint-liability No Not One year Not Not and 55,000 Tong giường 2022/04/14 5,000 Joint-liability No Not One year Not Not 2018/09/19 2022/06/02 3,000 Joint-liability No Not One year Not Not 2017/03/31, 2021/09/08 11,000 Joint-liability No Not One year Not Not Hong Kong 2018/10/31 90,000 Konka and 2022/02/09 10,000 Joint-liability No Not One year Not Not 2022/04/28 2018/03/31 Boluo Konka Three and 125,000 2020/08/19 2,480 Joint-liability No Not Not Not Precision years 2022/04/28 2021/10/18 7,000 Joint-liability No Not One year Not Not Electronics 2018/9/19 350,000 2021/11/05 50,000 Joint-liability No Not One year Not Not Technology 2022/04/12 1,500 Joint-liability No Not One year Not Not Dongguan 2018/9/19, and 2022/03/18 5,000 Joint-liability No Not One year Not Not 90,000 Konka 2021/3/24 2021/06/23 80,000 Joint-liability No Not Ten years Not Not 2022/2/23 5,800 Joint-liability No Other Two years Not Not shareholder Three 2020/12/25 2,000 Joint-liability No of XingDa Not Not years HongYe provides a counter XingDa 2018/9/19 10,000 guarantee HongYe for the 2021/5/31 750 Joint-liability No Two years Not Not Company for 49% of the guarantee line Other Three Jiangxi 2020/11/06 10,000 Joint-liability No Not Not 2018/10/31 60,000 shareholder years Konka 2022/06/26 6,000 Joint-liability No of Jiangxi One year Not Not 42 Konka Group Co., Ltd. Interim Report 2022 Konka Three 2020/09/29 10,000 Joint-liability No Not Not provides a years counter 2020/12/21 5,000 Joint-liability No guarantee Two years Not Not for the Three 2019/06/26 5,500 Joint-liability No Company years and Not Not for 49% of a half the Three 2019/10/30 6,500 Joint-liability No guarantee Not Not years line 2022/03/10 990 Joint-liability No Two years Not Not Three 2020/12/30 1,000 Joint-liability No Not Not years Other Three 2020/05/19 5,000 Joint-liability No Not Not shareholder years of Xinfeng Two years 2020/05/29 3,479 Joint-liability No Microcrysta Not Not and a half lline Three 2020/12/08 2,100 Joint-liability No provides a Not Not Xinfeng years 2021/12/27 7,200 Joint-liability No counter One year Not Not Microcrystall 2019/3/30 25,000 guarantee ine for the Company 2022/06/29 7,200 Joint-liability No for 49% of One year Not Not the guarantee line Other Three 2019/06/26 10,000 Joint-liability No shareholder years and Not Not of Jiangxi a half High Three 2020/01/08 5,000 Joint-liability No Transparent Not Not years Substrate Three Jiangxi High 2019/12/20 5,000 Joint-liability No provides a Not Not years Transparent 2019/3/30 45,000 2022/03/10 990 Joint-liability No counter Two years Not Not Substrate guarantee Two years 2020/05/29 5,975 Joint-liability No for the Not Not and a half Company for 49% of the Three 2020/07/14 6,000 Joint-liability No Not Not guarantee years line Sichuan 2018/3/31, and 65,000 2022/03/22 4,000 Joint-liability No No One year Not Not Konka 2021/3/24 2020/06/06 Ningbo 2020/10/15 6,000 Joint-liability No No Two years Not Not and 12,000 Kanghanrui 2022/04/28 2021/07/12 6,000 Joint-liability No No One year Not Not Other shareholder of Yibin Kangrun provides a counter Yibin 2020/10/24 10,000 2020/11/13 10,000 Joint-liability No guarantee Four years Not Not Kangrun for the Company for 33% of the guarantee line Telecommun ication 2022/04/28 20,000 2022/05/20 7,500 Joint-liability No No One year Not Not Technology Other One year 2021/03/25 20,000 Joint-liability No Not Not shareholder and a half of Anhui One year 2021/04/02 5,500 Joint-liability No Konka Not Not and a half provides a One year 2017/03/31 2021/04/25 12,000 Joint-liability No counter Not Not and a half Anhui Konka and 110,000 2021/08/10 28,000 Joint-liability No guarantee Ten years Not Not 2022/04/28 for the Company for 22% of 2021/10/29 7,000 Joint-liability No the Five years Not Not guarantee line Three Konka 2021/03/24 50,000 2021/05/24 20,000 Joint-liability No No years and Not Not Circuit a half Mobile 2017/03/31 Interconnecti and 10,000 2021/08/11 5,000 Joint-liability No No One year Not Not on 2022/04/28 2021/03/24 2021/12/23 2,000 Joint-liability No No One year Not Not Liaoyang and 20,000 Kangshun 2022/01/19 5,000 Joint-liability No No One year Not Not 2022/04/28 Konka 2021/07/12 20,000 Joint-liability No No One year Not Not 2021/03/24 30,000 Xinyun 2022/05/26 6,000 Joint-liability No No Two years Not Not Yibin Konka 2021/03/24 10,000 2022/03/31 980 Joint-liability No No One year Not Not Intelligent 43 Konka Group Co., Ltd. Interim Report 2022 Total actual amount of such guarantees in the Total approved line for such guarantees in the Reporting Period (B1) 334,470 68,960 Reporting Period (B2) Total actual balance of such guarantees at the Total approved line for such guarantees at the end of the Reporting Period (B3) 1,605,103 460,444 end of the Reporting Period (B4) Guarantees provided between subsidiaries Guarantee Disclosure Line of Actual Collater Counter Having for a date of the Actual occurrence Type of Term of Obligor guarante guarantee al (if guarantee expired or related guarantee line date guarantee guarantee e amount any) (if any) not party or announcement not Lands, house Anhui Mortgage, propert Three Electrical 13,500 2020/07/03 13,500 No Not Not pledge y, years Appliance equity interests House Boluo Konka 12,449 2021/07/06 12,449 Mortgage propert No Two years Not Not Precision y Total actual amount of such guarantees in the Total approved line for such guarantees in the Reporting Period (C1) 0 0 Reporting Period (C2) Total actual balance of such guarantees at the end of Total approved line for such guarantees at the end of the Reporting Period (C3) 25,949 25,949 the Reporting Period (C4) Total guarantee amount (total of the three kinds of guarantees above) Total actual guarantee amount in the Reporting Total guarantee line approved in the Reporting Period (A1+B1+C1) 986,342 90,683 Period (A2+B2+C2) Total actual guarantee balance at the end of the Total approved guarantee line at the end of the Reporting Period (A3+B3+C3) 2,416,624 552,116 Reporting Period (A4+B4+C4) Total actual guarantee amount (A4+B4+C4) as % of the Company’s 59.47% net assets Of which: Balance of guarantees provided for shareholders, actual controller and their related parties (D) 24,000 Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset ratio (E) 552,116 Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) 87,944 Total of the three amounts above (D+E+F) 552,116 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 □ Applicable √ Not applicable High-risk wealth management transactions with a significant single amount, or with low security, low liquidity or no principal protection: □ Applicable √ Not applicable Situation where the principal is expectedly irrecoverable or an impairment may be incurred: □ Applicable √ Not applicable 4. Other Major Contracts □ Applicable √ Not applicable No such cases in the Reporting Period. XIII Other Significant Events √ Applicable □ Not applicable (I) Initiation and establishment of funds: The total units of the Oriental-Konka Industry M&A Fund worth 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 RMB487,337,300. The fund invested in Jiangxi Yahua Electronic Materials Co., Ltd., Genew Technologies Co., Ltd., etc. The total units of the Kunshan-CITIC-Konka Emerging Industry Development Investment Fund worth RMB1,006,000,000. Shenzhen Konka Investment Holding Co., Ltd. contributed RMB500 million, accounting for 49.7018% of the total units. By the date of this report, Shenzhen Konka Investment 44 Konka Group Co., Ltd. Interim Report 2022 Holding Co., Ltd. has contributed RMB173,939,600. The fund invested in UNIONTECH, Hercules Microsystems (HME), etc. The total units of the Tongxiang Wuzhen Jiayu Digital Economic Industry Fund worth 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., Guangdong Tianyu Venture Capital Partnership (Limited Partnership), etc. The total units of Yibin Kanghui Electronic Information Industry Equity Investment Fund worth 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. and Shenzhen Konka Capital Equity Investment Management Co., Ltd. have contributed RMB104 million. The fund invested in Talkweb Information System Co., Ltd. and Shenzhen E2info Network Technology Co., Ltd. The total units of Yancheng Kangyan Industry Investment Fun worth 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 RMB217,366,600. The fund invested in Anhui Zhongdian Xingfa and Xinlong Co., Ltd., etc. The total units of Chongqing Kangxin Equity Investment Fund worth RMB2 billion. Shenzhen Konka Investment Holding Co., Ltd. and Shenzhen Konka Capital Equity Investment Management Co., Ltd. contributed RMB1 billion, accounting for 50.00% 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 RMB148,250,100. The fund invested in Jiangxi Taide Wisdom Technology Co., Ltd., etc. (II) Disclosure index of significant information Announce Website Date Title Page on newspaper ment No. link Announcement on Progress of Asset Acquisition and Funds Raising by http://ww Securities Daily B76, Shanghai Securities News 2022-01 2022/1/8 Issuance of Shares and Cash Payment and Progress of Related Transaction w.cninfo.c 28, etc. Plan After Disclosure om.cn/ne Announcement on Resolutions of 53th Meeting of the Ninth Board of Securities Daily B22, Shanghai Securities News w/index 2022-02 2022/1/18 Directors 84, etc. Announcement on Proposed introduction of Strategic Investors by Controlling Securities Daily B22, Shanghai Securities News 2022-03 2022/1/18 Company 84, etc. Securities Daily B31, Shanghai Securities News 2022-04 2022/1/25 2021 Result Forecast 29, etc. Securities Daily B31, Shanghai Securities News 2022-05 2022/1/25 Announcement on Progress of Security for Controlling Company 29, etc. Announcement on Progress of Asset Acquisition and Funds Raising by Securities Daily B31, Shanghai Securities News 2022-06 2022/2/9 Issuance of Shares and Cash Payment and Progress of Related Transaction 36, etc. Plan After Disclosure Securities Daily B37, Shanghai Securities News 2022-07 2022/2/17 Announcement on the Change of the Signatory Certified Public Accountant 16, etc. Announcement on Resolutions of 54th Meeting of the Ninth Board of Securities Daily B38, Shanghai Securities News 2022-08 2022/2/23 Directors 33, etc. Announcement on Providing Financial Assistance to Shandong Econ Securities Daily B38, Shanghai Securities News 2022-09 2022/2/23 Technology Co., Ltd. at Shareholding Ratio 33, etc. 45 Konka Group Co., Ltd. Interim Report 2022 Announcement on Providing Counter Guarantee to and Conducting Securities Daily B38, Shanghai Securities News 2022-10 2022/2/23 Connected Transaction with Shenzhen Overseas Chinese Town Co., Ltd. by 33, etc. Shenzhen Konka Telecommunications Technology Co., Ltd. Announcement on Progress of Guarantee Provision for GuangDong XingDa Securities Daily B38, Shanghai Securities News 2022-11 2022/2/23 HongYe Electronic Co., Ltd. 33, etc. Securities Daily B48, Shanghai Securities News 2022-12 2022/3/1 Announcement on Resignation of the Company's Director 60, etc. Securities Daily B48, Shanghai Securities News 2022-13 2022/3/1 Announcement on Resignation of the Company's Vice President 60, etc. Announcement on Resolutions of 55th Meeting of the Ninth Board of Securities Daily B3, Shanghai Securities News 2022-14 2022/3/7 Directors 28, etc. Announcement on Resolutions of 19th Meeting of the Ninth Board of Securities Daily B3, Shanghai Securities News 2022-15 2022/3/7 Directors 28, etc. Announcement on Providing Financial Assistance to Sichuan Chengrui Real Securities Daily B3, Shanghai Securities News 2022-16 2022/3/7 Estate Co., Ltd. at Shareholding Ratio 28, etc. Securities Daily B3, Shanghai Securities News 2022-17 2022/3/7 Notice on Convening 2022 First Extraordinary General Meeting 28, etc. Announcement on the Termination of Asset Acquisition and Funds Raising by Securities Daily B3, Shanghai Securities News 2022-18 2022/3/7 Issuance of Shares or Cash Payment and Related Transaction Matters 28, etc. Securities Daily B54, Shanghai Securities News 2022-19 2022/3/23 Announcement on Resolutions of 2022 First Extraordinary General Meeting 60, etc. Announcement on the Postponement of the Replacement of the Board of Securities Daily B14, Shanghai Securities News 2022-20 2022/3/24 Directors and the Board of Supervisors 16, etc. Announcement on Proposed Introduction of Strategic Investors by Controlling Securities Daily B60, Shanghai Securities News 2022-21 2022/3/25 Company 84, etc. 2022-22 2022/3/30 2021 Annual Report of Mercedes-Benz Group AG Announcement on Resolutions of 56th Meeting of the Ninth Board of Securities Daily B55, Shanghai Securities News 2022-23 2022/3/30 Directors 57, etc. Announcement on Resolutions of 20th Meeting of the Ninth Board of Securities Daily B55, Shanghai Securities News 2022-24 2022/3/30 Directors 57, etc. Securities Daily B56, Shanghai Securities News 2022-25 2022/3/30 Announcement on Expected Routine Connected Transactions in 2022 57, etc. Securities Daily B55, Shanghai Securities News 2022-26 2022/3/30 Announcement on Plan of Profit Distribution for 2022 59, etc. Securities Daily B55, Shanghai Securities News 2022-27 2022/3/30 Notice on Convening 2021 Shareholders' General Meeting 57, etc. Securities Daily B55, Shanghai Securities News 2022-28 2022/3/30 Announcement on Accrual of Asset Impairment Reserves for 2021 57, etc. Announcement on Providing Counter Guarantee and Conducting Connected Securities Daily B55, Shanghai Securities News 2022-29 2022/3/30 Transaction for Applying for Bank Credit Business 59, etc. Announcement on Issuing the Plan for the Company's Private Offering of Securities Daily B56, Shanghai Securities News 2022-30 2022/3/30 Corporate Bonds and Providing Counter Guarantee for OCT Group 59, etc. Announcement on Applying for a Comprehensive Line of Credit to and Securities Daily B56, Shanghai Securities News 2022-31 2022/3/30 Conducting Connected Transactions with China Everbright Bank 57, etc. Securities Daily B55, Shanghai Securities News 2022-32 2022/3/30 Abstract of 2021 Annual Report 57, etc. Announcement on Completion of Industrial and Commercial Registration of Securities Daily B92, Shanghai Securities News 2022-33 2022/4/1 Changes for Capital Increase of Hefei KONSEMI Storage Technology Co., 92, etc. Ltd. Securities Daily B92, Shanghai Securities News 2022-34 2022/4/1 Announcement on Holding 2021 Online Result Release 92, etc. Securities Daily B100, Shanghai Securities 2022-35 2022/4/1 Announcement on Progress of Security for Controlling Company News 92, etc. Securities Daily B219, Shanghai Securities 2022-36 2022/4/26 Announcement on Resolutions of 2021 Shareholders' General Meeting News 236, etc. Securities Daily B181, Shanghai Securities 2022-37 2022/4/28 2022Q1 Report News 193, etc. Securities Daily B183, Shanghai Securities 2022-38 2022/4/28 Notice on Convening 2022 Second Extraordinary General Meeting News 194, etc. Announcement on Resolutions of 57th Meeting of the Ninth Board of Securities Daily B181, Shanghai Securities 2022-39 2022/4/28 Directors News 193, etc. Announcement on Proposed Sale of Some of Equity in Chutian Dragon Co., Securities Daily B183, Shanghai Securities 2022-40 2022/4/28 Ltd. News 194, etc. Announcement on Progress of Guarantee Provision for Wholly-owned Securities Daily B182, Shanghai Securities 2022-41 2022/4/28 Company News 194, etc. Securities Daily B181, Shanghai Securities 2022-42 2022/4/28 Announcement on External Guarantee News 193, etc. Announcement on Providing Security Limit to and Conducting Connected Securities Daily B182, Shanghai Securities 2022-43 2022/4/28 Transaction with Shareholding Company News 194, etc. 46 Konka Group Co., Ltd. Interim Report 2022 Announcement on Resolutions of 2022 Second Extraordinary General Securities Daily B91, Shanghai Securities News 2022-44 2022/5/17 Meeting 76, etc. Announcement on Resolutions of 58th Meeting of the Ninth Board of Securities Daily B16, Shanghai Securities News 2022-45 2022/5/21 Directors 25, etc. Announcement on Transfer of 100% of Equity in Xi'an Huasheng Jiacheng Securities Daily B16, Shanghai Securities News 2022-46 2022/5/21 Real Estate Co., Ltd. 25, etc. Announcement on Resolutions of 59th Meeting of the Ninth Board of Securities Daily B16, Shanghai Securities News 2022-47 2022/6/2 Directors 41, etc. Announcement on Increasing Capital to and Conducting Connected Securities Daily B16, Shanghai Securities News 2022-48 2022/6/2 Transaction with Chuzhou Kangjin Health Industrial Development Co., Ltd. 41, etc. Securities Daily B16, Shanghai Securities News 2022-49 2022/6/2 Announcement on Progress in the Provision of External Guarantee 41, etc. Securities Daily B71, Shanghai Securities News 2022-50 2022/6/2 Announcement on Distribution of 2022 Annual Equity 52, etc. Announcement on Resolutions of 60th Meeting of the Ninth Board of Securities Daily B23, Shanghai Securities News 2022-51 2022/6/11 Directors 41, etc. Securities Daily B23, Shanghai Securities News 2022-52 2022/6/11 Notice on Convening 2022 Third Extraordinary General Meeting 41, etc. Announcement on Revision of the Articles of Association and other systems Securities Daily B22, Shanghai Securities News 2022-53 2022/6/11 of the Company 41, etc. Announcement on Progress of Guarantee Provision for Wholly-owned Securities Daily B22, Shanghai Securities News 2022-54 2022/6/18 Company 20, etc. Announcement on Voluntary Information Disclosure for Signing Cooperation Securities Daily B71, Shanghai Securities News 2022-55 2022/6/25 Framework Agreement with Hangzhou Hemai Power Electronics Co., Ltd. 60, etc. Securities Daily B57, Shanghai Securities News 2022-56 2022/6/28 Announcement on Resolutions of 2022 Third Extraordinary General Meeting 52, etc. Announcement on Progress in Transfer of 100% of Equity in Xi'an Huasheng Securities Daily B57, Shanghai Securities News 2022-57 2022/6/28 Jiacheng Real Estate Co., Ltd. 52, etc. XIV Significant Events of Subsidiaries □ Applicable √ Not applicable 47 Konka Group Co., Ltd. Interim Report 2022 Part VII Share Changes and Shareholder Information I Share Changes 1. Share Changes Unit: share Before Increase/decrease in the Reporting Period (+/-) After Shares Shares as as dividen dividen d Percentag New d convert Percenta Shares Other Subtotal Shares e (%) issues convert ed ge (%) ed from from capital profit reserve s 1. Restricted shares 19,500 0.00% 6,500 6,500 26,000 0.00% 1.3 Shares held by other 19,500 0.00% 6,500 6,500 26,000 0.00% domestic investors Shares held by domestic 19,500 0.00% 6,500 6,500 26,000 0.00% legal person 2. Unrestricted shares 2,407,925,908 100.00% -6,500 -6,500 2,407,919,408 100.00% 2.1 RMB-denominated 1,596,574,300 66.31% -6,500 -6,500 1,596,567,800 66.31% ordinary shares 2.2 Domestically listed 811,351,608 33.69% 811,351,608 33.69% 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 During the Reporting Period, Mr. Sun Qingyan resigned as Vice President for personal reasons, and the 26,000 shares held by him in the Company were locked up within six months upon his resignation according to the applicable laws and regulations. Approval of the share changes: □ Applicable √ Not applicable Transfer of share ownership: □ Applicable √ Not applicable Progress on any share repurchase: □ Applicable √ Not applicable Progress on reducing the repurchased shares by means of centralized bidding: □ 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: □ Applicable √ Not applicable Other information that the Company considers necessary or is required by the securities regulator to be disclosed: 48 Konka Group Co., Ltd. Interim Report 2022 □ Applicable √ Not applicable 2. Changes in Restricted Shares √ Applicable □ Not applicable Unit: share Increase in Unlocked Beginning restricted Ending Name of in the Date of restricted shares in the restricted Reason for restriction shareholder current unlocking shares current shares period period Locked up in full within six 1 September Sun Qingyan 19,500 0 6,500 26,000 months upon his resignation 2022 Total 19,500 0 6,500 26,000 -- -- II Issuance and Listing of Securities □ Applicable √ Not applicable III Shareholders and Their Holdings as at the Period-End Unit: share Number of preferred shareholders with resumed voting rights (if Number of ordinary shareholders 85,899 any) (see note 8) 5% or greater ordinary shareholders or top 10 ordinary shareholders Shares in pledge, Total Increase/de marked or Shareholdi ordinary crease in Restricted Unrestricted Nature of frozen Name of shareholder ng shares held the ordinary ordinary shareholder S percentage at the Reporting shares held shares held h period-end Period Status ar es OVERSEAS CHINESE TOWN State-owned 21.75% 523,746,932 0 0 523,746,932 HOLDINGS COMPANY legal person CITIC SECURITIES Foreign legal BROKERAGE (HONG KONG) 7.48% 180,001,110 0 0 180,001,110 person CO., LTD. Domestic WANG JINGFENG 4.63% 111,411,100 300,000 0 111,411,100 natural person GUOYUAN SECURITIES Foreign legal 2.46% 59,300,325 0 0 59,300,325 BROKER (HK) CO., LTD. person Foreign legal HOLY TIME GROUP LIMITED 2.38% 57,289,100 0 0 57,289,100 person Foreign legal GAOLING FUND,L.P. 2.19% 52,801,250 0 0 52,801,250 person Foreign natural NAM NGAI 0.96% 23,176,840 609,300 0 23,176,840 person CHINA MERCHANTS State-owned 0.81% 19,429,720 115,500 0 19,429,720 SECURITIES (HK) LIMITED legal person BOCOM INTERNATIONAL Foreign legal 0.78% 18,896,037 0 0 18,896,037 SECURITIES LIMITED person HONG KONG SECURITIES Foreign legal CLEARING COMPANY 0.59% 14,142,913 5,431,354 0 14,142,913 person LIMITED Strategic investor or general legal person becoming a top-10 ordinary shareholder due to rights issue (if N/A 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 Related or acting-in-concert parties among the shareholders through CITIC Securities Brokerage (Hong Kong) Co., Ltd. and China Merchants above Securities (HK) 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 with voting rights or waiving voting N/A rights Special account for share repurchases (if any) among the top 10 None shareholders (see note 11) Top 10 unrestricted ordinary shareholders 49 Konka Group Co., Ltd. Interim Report 2022 Unrestricted ordinary shares held at the Shares by type Name of shareholder period-end Type Shares OVERSEAS CHINESE TOWN HOLDINGS 523,746,932 RMB-denominated ordinary stock 523,746,932 COMPANY CITIC SECURITIES BROKERAGE (HONG 180,001,110 Domestically listed foreign stock 180,001,110 KONG) CO., LTD. WANG JINGFENG 111,411,100 RMB-denominated ordinary stock 111,411,100 GUOYUAN SECURITIES BROKER (HK) 59,300,325 Domestically listed foreign stock 59,300,325 CO., LTD. HOLY TIME GROUP LIMITED 57,289,100 Domestically listed foreign stock 57,289,100 GAOLING FUND,L.P. 52,801,250 Domestically listed foreign stock 52,801,250 NAM NGAI 23,176,840 Domestically listed foreign stock 23,176,840 CHINA MERCHANTS SECURITIES (HK) 19,429,720 Domestically listed foreign stock 19,429,720 LIMITED BOCOM INTERNATIONAL SECURITIES 18,896,037 Domestically listed foreign stock 18,896,037 LIMITED HONG KONG SECURITIES CLEARING 14,142,913 RMB-denominated ordinary stock 14,142,913 COMPANY LIMITED Happy Bloom Investment Limited, a wholly-owned subsidiary of the Company’s first majority Related or acting-in-concert parties among top shareholder Overseas Chinese Town Holdings Company (OCT Group), holds 180,001,110 and 10 unrestricted ordinary shareholders, as well 18,360,000 ordinary shares in the Company respectively through CITIC Securities Brokerage (Hong as between top 10 unrestricted ordinary Kong) Co., Ltd. and China Merchants Securities (HK) Limited. Happy Bloom Investment Limited and shareholders and top 10 shareholders 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. Top 10 ordinary shareholders involved in Wang Jingfeng holds 111,411,100 A-shares in the Company through his securities account for customer securities margin trading (if any) (see note 4) credit trading guarantee in Guotai Junan Securities Co., Ltd. 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 No such cases in the Reporting Period. IV Change in Shareholdings of Directors, Supervisors and Senior Management □ Applicable √ Not applicable No changes occurred to the shareholdings of the directors, supervisors and senior management in the Reporting Period. See the 2021 Annual Report for more details. V Change of the Controlling Shareholder or the De Facto Controller Change of the controlling shareholder in the Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. Change of the de facto controller in the Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. 50 Konka Group Co., Ltd. Interim Report 2022 Part VIII Preference Shares □ Applicable √ Not applicable No Preference shares in the Reporting Period. 51 Konka Group Co., Ltd. Interim Report 2022 Part IX 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 Bonds balance Intere Trade Name Abbr. Code Issue date Value date Due date Way of redemption (RMB’0,00 st rate place 0) Privately placed Interests shall be Shenzhe corporate bonds in 21 paid every year and 8 January 8 January 8 January 1,000,000,0 n Stock 2021 of Konka Konka 114894 4.46% the principals shall 2021 2021 2024 00.00 Exchang Group Co., Ltd 01 be repaid when e (Tranche I) expired. Privately placed Interests shall be Shenzhe corporate bonds in 21 paid every year and 21 May 21 May 21 May 500,000,00 n Stock 2021 of Konka Konka 133003 4.00% the principals shall 2021 2021 2024 0.00 Exchang Group Co., Ltd 02 be repaid when e (Tranche II) expired. Privately placed Interests shall be Shenzhe corporate bonds in 21 paid every year and 800,000,00 n Stock 2021 of Konka Konka 133040 9 July 2021 9 July 2021 9 July 2024 3.95% the principals shall 0.00 Exchang Group Co., Ltd 03 be repaid when e (Tranche III) expired. Corporate bonds publicly offered to Interests shall be Shenzhe professional 22 paid every year and 14 July 14 July 14 July 1,200,000,0 n Stock investors in 2022 of Konka 149987 3.23% the principals shall 2022 2022 2025 00.00 Exchang Konka Group Co., 01 be repaid when e Ltd. (Tranche I) expired. (Variety I) “21 Konka 01”, “21 Konka 02”, “21 Konka 03” were placed privately to professional investors meeting the requirements Appropriate arrangement of of management method for investors eligibility of Shenzhen Stock Exchange, which not exceeding 200 persons. “22 the investors (if any) Konka 01” were offered publicly to professional investors meeting the requirements of management method for investors eligibility of Shenzhen Stock Exchange. Applicable trade mechanism Click-and-deal, inquire-and-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. Adjustment of Credit Rating Results during the Reporting Period □ Applicable √ Not applicable 4. 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 52 Konka Group Co., Ltd. Interim Report 2022 III Debt Financing Instruments of Non-financial Enterprises □ Applicable √ Not applicable 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 VI 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 30 June 2022 31 December 2021 Change Current ratio 116.99% 88.92% 31.57% Debt/asset ratio 73.59% 74.42% -0.83% Quick ratio 94.24% 71.36% 32.06% H1 2022 H1 2021 Change Net profit before exceptional gains and losses -74,235.62 -71,012.46 -4.54% EBITDA/debt ratio 2.74% 3.19% -0.45% Interest cover (times) 0.89 1.15 -22.61% Cash-to-interest cover (times) -0.03 -1.50 -98.00% EBITDA-to-interest cover (times) 1.72 1.72 0.00% Debt repayment ratio (%) 100.00% 100.00% 0.00% Interest payment ratio (%) 100.00% 100.00% 0.00% 53 Konka Group Co., Ltd. Interim Report 2022 Part X Financial Statements I Independent Auditor’s Report Are these interim financial statements audited by an independent auditor? □ Yes √ No The interim financial statements of the Company have not been audited by an independent auditor. II Financial Statements Currency unit for the financial statements and the notes thereto: RMB 1. Consolidated Balance Sheet Prepared by Konka Group Co., Ltd. 30 June 2022 Unit: RMB Item 30 June 2022 1 January 2022 Current assets: Monetary assets 6,534,638,395.86 6,489,553,211.24 Settlement reserve Interbank loans granted Held-for-trading financial assets Derivative financial assets Notes receivable 934,842,104.68 1,777,477,481.28 Accounts receivable 3,372,628,831.51 3,397,729,481.07 Accounts receivable financing 9,926,723.80 71,490,688.54 Prepayments 611,349,670.64 631,400,953.86 Premiums receivable Reinsurance receivables Receivable reinsurance contract reserve Other receivables 1,810,261,803.88 1,837,459,705.64 Including: Interest receivable 3,478,418.99 2,573,082.79 Dividends receivable Financial assets purchased under resale agreements Inventories 4,018,041,845.92 4,068,537,809.18 Contract assets Assets held for sale Current portion of non-current assets 28,493,943.14 28,105,523.78 Other current assets 3,342,866,416.60 2,299,963,391.24 Total current assets 20,663,049,736.03 20,601,718,245.83 Non-current assets: Loans and advances to customers Investments in debt obligations Investments in other debt obligations Long-term receivables 10,430,400.00 18,495,499.14 Long-term equity investments 6,273,716,368.75 5,902,588,939.51 Investments in other equity instruments 23,841,337.16 23,841,337.16 Other non-current financial assets 2,460,095,518.48 2,293,361,603.68 Investment property 774,860,887.71 776,525,061.54 Fixed assets 3,960,662,993.10 4,010,295,277.14 Construction in progress 1,781,601,493.64 1,490,777,831.39 Productive living assets 54 Konka Group Co., Ltd. Interim Report 2022 Oil and gas assets Right-of-use assets 69,287,135.98 71,210,415.37 Intangible assets 971,163,382.27 975,295,916.08 Development costs 21,182,267.28 16,870,310.70 Goodwill 22,196,735.11 22,196,735.11 Long-term prepaid expense 319,234,633.70 297,497,383.39 Deferred income tax assets 855,134,135.28 725,315,725.10 Other non-current assets 1,106,273,348.06 2,648,530,490.12 Total non-current assets 18,649,680,636.52 19,272,802,525.43 Total assets 39,312,730,372.55 39,874,520,771.26 Current liabilities: Short-term borrowings 10,090,194,886.59 9,920,675,121.08 Borrowings from the central bank Interbank loans obtained Held-for-trading financial liabilities Derivative financial liabilities Notes payable 1,133,188,165.45 1,116,336,958.91 Accounts payable 2,643,426,810.42 3,784,315,091.41 Advances from customers Contract liabilities 711,366,769.35 652,910,408.02 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 181,829,820.35 410,747,084.80 Taxes payable 275,168,869.12 295,825,170.41 Other payables 1,392,145,413.87 1,788,177,748.59 Including: Interest payable 88,023,792.80 174,383,177.08 Dividends payable Handling charges and commissions payable Reinsurance payables Liabilities directly associated with assets held for sale Current portion of non-current liabilities 1,071,913,219.84 5,089,586,269.32 Other current liabilities 162,378,254.97 109,742,188.24 Total current liabilities 17,661,612,209.96 23,168,316,040.78 Non-current liabilities: Insurance contract reserve Long-term borrowings 8,245,446,057.26 3,529,140,539.09 Bonds payable 2,295,579,140.50 2,293,698,899.30 Including: Preferred shares Perpetual bonds Lease liabilities 51,616,953.84 42,532,869.63 Long-term payables 136,400,514.66 140,687,570.78 Long-term employee benefits payable 5,029,726.81 5,111,296.75 Provisions 106,354,249.82 106,276,535.85 Deferred income 262,481,408.60 206,302,424.92 Deferred income tax liabilities 79,178,233.81 76,894,581.97 Other non-current liabilities 85,210,503.30 104,610,663.76 Total non-current liabilities 11,267,296,788.60 6,505,255,382.05 Total liabilities 28,928,908,998.56 29,673,571,422.83 Owners’ equity: Share capital 2,407,945,408.00 2,407,945,408.00 Other equity instruments Including: Preferred shares Perpetual bonds Capital reserves 366,832,114.89 234,389,963.10 55 Konka Group Co., Ltd. Interim Report 2022 Less: Treasury stock Other comprehensive income -17,046,757.46 -20,336,087.87 Specific reserve Surplus reserves 1,244,180,364.24 1,244,180,364.24 General reserve Retained earnings 5,281,519,957.37 5,229,098,788.94 Total equity attributable to owners of the Company as the parent 9,283,431,087.04 9,095,278,436.41 Non-controlling interests 1,100,390,286.95 1,105,670,912.02 Total owners’ equity 10,383,821,373.99 10,200,949,348.43 Total liabilities and owners’ equity 39,312,730,372.55 39,874,520,771.26 Legal representative: Zhou Bin CFO: Li Chunlei Head of the financial department: Guo Zhihua 2. Balance Sheet of the Company as the Parent Unit: RMB Item 30 June 2022 1 January 2022 Current assets: Monetary assets 4,817,401,116.88 4,809,203,282.52 Held-for-trading financial assets Derivative financial assets Notes receivable 323,066,626.61 912,584,879.70 Accounts receivable 5,580,066,984.48 4,468,684,877.11 Accounts receivable financing 6,250,000.00 Prepayments 1,392,618,920.86 1,617,640,913.05 Other receivables 10,250,972,249.22 10,925,066,231.53 Including: Interest receivable 2,907,863.11 2,002,526.91 Dividends receivable 388,722,154.83 383,943,256.80 Inventories 235,132,046.82 192,035,723.31 Contract assets Assets held for sale Current portion of non-current assets Other current assets 1,722,570,208.46 1,736,172,492.35 Total current assets 24,321,828,153.33 24,667,638,399.57 Non-current assets: Investments in debt obligations Investments in other debt obligations Long-term receivables Long-term equity investments 8,925,016,873.83 8,633,142,223.64 Investments in other equity instruments 17,940,215.36 17,940,215.36 Other non-current financial assets 200,326,093.02 200,326,093.02 Investment property 447,656,127.44 455,475,442.43 Fixed assets 393,714,561.09 398,611,899.13 Construction in progress 335,371,763.94 304,489,347.00 Productive living assets Oil and gas assets Right-of-use assets 2,682,250.80 4,023,376.21 Intangible assets 66,088,328.80 55,814,854.54 Development costs Goodwill Long-term prepaid expense 31,219,743.56 31,718,868.00 Deferred income tax assets 792,018,584.35 711,814,124.48 Other non-current assets Total non-current assets 11,212,034,542.19 10,813,356,443.81 Total assets 35,533,862,695.52 35,480,994,843.38 Current liabilities: 56 Konka Group Co., Ltd. Interim Report 2022 Short-term borrowings 3,838,087,799.15 4,259,749,597.92 Held-for-trading financial liabilities Derivative financial liabilities Notes payable 673,466,004.28 1,126,421,923.99 Accounts payable 8,982,213,162.58 8,297,778,584.91 Advances from customers Contract liabilities 656,157,473.78 740,817,658.30 Employee benefits payable 47,155,667.20 128,148,938.08 Taxes payable 4,356,902.37 8,022,098.02 Other payables 4,011,175,314.75 4,155,006,946.60 Including: Interest payable 87,444,401.92 171,516,416.71 Dividends payable Liabilities directly associated with assets held for sale Current portion of non-current liabilities 863,147,551.20 4,715,415,917.78 Other current liabilities 11,067,091.64 11,124,209.72 Total current liabilities 19,086,826,966.95 23,442,485,875.32 Non-current liabilities: Long-term borrowings 7,748,347,100.29 3,161,298,604.12 Bonds payable 2,295,579,140.50 2,293,698,899.30 Including: Preferred shares Perpetual bonds Lease liabilities 481,296.00 1,664,232.11 Long-term payables Long-term employee benefits payable Provisions 680,462.71 572,097.48 Deferred income 34,128,189.15 36,243,964.61 Deferred income tax liabilities Other non-current liabilities 10,255,577.23 43,677,187.49 Total non-current liabilities 10,089,471,765.88 5,537,154,985.11 Total liabilities 29,176,298,732.83 28,979,640,860.43 Owners’ equity: Share capital 2,407,945,408.00 2,407,945,408.00 Other equity instruments Including: Preferred shares Perpetual bonds Capital reserves 243,139,144.39 110,696,992.60 Less: Treasury stock Other comprehensive income -1,500,000.00 -1,500,000.00 Specific reserve Surplus reserves 1,260,024,039.76 1,260,024,039.76 Retained earnings 2,447,955,370.54 2,724,187,542.59 Total owners’ equity 6,357,563,962.69 6,501,353,982.95 Total liabilities and owners’ equity 35,533,862,695.52 35,480,994,843.38 3. Consolidated Income Statement Unit: RMB Item H1 2022 H1 2021 1. Revenue 16,895,470,276.81 21,810,161,873.08 Including: Operating revenue 16,895,470,276.81 21,810,161,873.08 Interest income Insurance premium income Handling charge and commission income 2. Costs and expenses 17,954,723,815.95 22,632,427,029.23 Including: Cost of sales 16,482,440,621.84 20,817,175,713.78 Interest expense Handling charge and commission expense Surrenders 57 Konka Group Co., Ltd. Interim Report 2022 Net insurance claims paid Net amount provided as insurance contract reserve Expenditure on policy dividends Reinsurance premium expense Taxes and surcharges 53,284,971.18 44,456,361.94 Selling expense 560,225,684.28 667,662,036.47 Administrative expense 354,308,684.51 359,053,667.07 R&D expense 237,348,526.56 284,663,467.26 Finance costs 267,115,327.58 459,415,782.71 Including: Interest expense 465,576,348.06 488,330,464.76 Interest income 109,353,054.39 78,303,181.42 Add: Other income 343,737,322.91 720,696,356.02 Return on investment ( “-” for loss) 737,803,536.05 322,244,312.89 Including: Share of profit or loss of joint ventures and associates 59,402,481.72 19,335,816.88 Income from the derecognition of financial assets at amortized cost ( “-” for loss) Exchange gain ( “-” for loss) Net gain on exposure hedges ( “-” for loss) Gain on changes in fair value ( “-” for loss) -638,799.36 40,362,513.73 Credit impairment loss ( “-” for loss) -78,608,313.56 -71,392,178.06 Asset impairment loss ( “-” for loss) -13,309,988.75 -29,538,732.82 Asset disposal income ( “-” for loss) 12,782,328.52 88,668.35 3. Operating profit ( “-” for loss) -57,487,453.33 160,195,783.96 Add: Non-operating income 30,492,741.65 21,618,277.79 Less: Non-operating expense 3,860,945.80 6,793,873.14 4. Profit before tax ( “-” for loss) -30,855,657.48 175,020,188.61 Less: Income tax expense -88,858,864.36 84,263,268.37 5. Net profit ( “-” for net loss) 58,003,206.88 90,756,920.24 5.1 By operating continuity 5.1.1 Net profit from continuing operations ( “-” for net loss) 58,003,206.88 90,756,920.24 5.1.2 Net profit from discontinued operations ( “-” for net loss) 5.2 By ownership 5.2.1 Net profit attributable to owners of the Company as the 172,818,438.83 85,449,919.57 parent 5.2.1 Net profit attributable to non-controlling interests -114,815,231.95 5,307,000.67 6. Other comprehensive income, net of tax 4,109,281.36 -1,547,270.99 Attributable to owners of the Company as the parent 3,289,330.41 -583,043.66 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 6.2 Items that will be reclassified to profit or loss 3,289,330.41 -583,043.66 6.2.1 Other comprehensive income that will be reclassified to -38,929.34 1,486,086.18 profit or loss under 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- 3,328,259.75 -2,069,129.84 denominated financial statements 6.2.7 Other 58 Konka Group Co., Ltd. Interim Report 2022 Attributable to non-controlling interests 819,950.95 -964,227.33 7. Total comprehensive income 62,112,488.24 89,209,649.25 Attributable to owners of the Company as the parent 176,107,769.24 84,866,875.91 Attributable to non-controlling interests -113,995,281.00 4,342,773.34 8. Earnings per share 8.1 Basic earnings per share 0.0718 0.0355 8.2 Diluted earnings per share 0.0718 0.0355 Legal representative: Zhou Bin CFO: Li Chunlei Head of the financial department: Guo Zhihua 4. Income Statement of the Company as the Parent Unit: RMB Item H1 2022 H1 2021 1. Operating revenue 937,174,806.46 1,201,381,406.70 Less: Cost of sales 955,576,781.51 1,079,261,558.34 Taxes and surcharges 4,788,176.20 2,722,585.37 Selling expense 126,864,858.90 153,803,101.46 Administrative expense 112,153,504.59 129,288,020.36 R&D expense 51,468,275.26 21,919,059.86 Finance costs 162,133,403.85 185,312,072.03 Including: Interest expense 431,671,720.01 395,636,089.83 Interest income 175,006,649.97 249,552,400.35 Add: Other income 16,852,496.81 31,506,992.96 Return on investment ( “-” for loss) 231,113,070.86 196,794,318.43 Including: Share of profit or loss of joint ventures and associates 76,488,083.68 6,396,453.37 Income from the derecognition of financial assets at amortized cost ( “-” for loss) Net gain on exposure hedges ( “-” for loss) Gain on changes in fair value ( “-” for loss) 1,656,645.84 Credit impairment loss ( “-” for loss) -23,046,305.82 -86,149,702.67 Asset impairment loss ( “-” for loss) -4,024,458.06 -2,818,595.77 Asset disposal income ( “-” for loss) 6,069,332.66 2. Operating profit ( “-” for loss) -248,846,057.40 -229,935,331.93 Add: Non-operating income 13,060,831.55 4,699,664.41 Less: Non-operating expense 254,158.77 5,616,310.83 3. Profit before tax ( “-” for loss) -236,039,384.62 -230,851,978.35 Less: Income tax expense -80,204,459.87 -59,671,308.58 4. Net profit ( “-” for net loss) -155,834,924.75 -171,180,669.77 4.1 Net profit from continuing operations ( “-” for net loss) -155,834,924.75 -171,180,669.77 4.2 Net profit from discontinued operations ( “-” for net loss) 5. Other comprehensive income, net of tax 1,182,217.31 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 profit or loss 1,182,217.31 5.2.1 Other comprehensive income that will be reclassified to 1,486,086.18 profit or loss under 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 59 Konka Group Co., Ltd. Interim Report 2022 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- -303,868.87 denominated financial statements 5.2.7 Other 6. Total comprehensive income -155,834,924.75 -169,998,452.46 7. Earnings per share 7.1 Basic earnings per share 7.2 Diluted earnings per share 5. Consolidated Cash Flow Statement Unit: RMB Item H1 2022 H1 2021 1. Cash flows from operating activities: Proceeds from sale of commodities and rendering of services 16,657,583,444.03 20,963,019,142.28 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 280,376,794.53 259,574,846.93 Cash generated from other operating activities 753,959,635.59 984,633,539.35 Subtotal of cash generated from operating activities 17,691,919,874.15 22,207,227,528.56 Payments for commodities and services 15,956,086,181.59 20,801,856,591.59 Net increase in loans and advances to customers Net increase in deposits in the central bank and in interbank loans granted 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 1,001,094,352.68 1,040,180,023.02 Taxes paid 272,856,476.27 571,610,951.43 Cash used in other operating activities 883,142,370.34 1,078,341,184.55 Subtotal of cash used in operating activities 18,113,179,380.88 23,491,988,750.59 Net cash generated from/used in operating activities -421,259,506.73 -1,284,761,222.03 2. Cash flows from investing activities: Proceeds from disinvestment 311,914,738.68 242,490,592.58 Return on investment 66,252,680.29 79,850,437.97 Net proceeds from the disposal of fixed assets, intangible assets 823,875.00 233,374,028.57 and other long-lived assets Net proceeds from the disposal of subsidiaries and other 297,094,350.04 133,143,680.12 business units Cash generated from other investing activities 2,385,626,424.39 726,997,513.51 Subtotal of cash generated from investing activities 3,061,712,068.40 1,415,856,252.75 Payments for the acquisition of fixed assets, intangible assets 2,368,866,405.13 2,434,111,266.54 and other long-lived assets Payments for investments 281,204,526.06 334,832,168.49 Net increase in pledged loans granted Net payments for the acquisition of subsidiaries and other 96,500,000.00 business units Cash used in other investing activities 297,319,897.73 335,799,856.00 Subtotal of cash used in investing activities 2,947,390,828.92 3,201,243,291.03 60 Konka Group Co., Ltd. Interim Report 2022 Net cash generated from/used in investing activities 114,321,239.48 -1,785,387,038.28 3. Cash flows from financing activities: Capital contributions received 73,710,000.00 82,672,396.60 Including: Capital contributions by non-controlling interests to 73,710,000.00 82,672,396.60 subsidiaries Borrowings raised 13,247,484,343.89 11,408,374,380.36 Cash generated from other financing activities 98,773,506.85 595,358,784.49 Subtotal of cash generated from financing activities 13,419,967,850.74 12,086,405,561.45 Repayment of borrowings 12,164,709,671.44 7,054,124,522.30 Interest and dividends paid 629,096,420.22 612,510,498.19 Including: Dividends paid by subsidiaries to non-controlling 7,497,000.00 interests Cash used in other financing activities 413,488,589.33 480,205,100.51 Subtotal of cash used in financing activities 13,207,294,680.99 8,146,840,121.00 Net cash generated from/used in financing activities 212,673,169.75 3,939,565,440.45 4. Effect of foreign exchange rates changes on cash and cash 29,437,680.94 -7,488,067.32 equivalents 5. Net increase in cash and cash equivalents -64,827,416.56 861,929,112.82 Add: Cash and cash equivalents, beginning of the period 5,968,347,219.03 4,298,056,113.24 6. Cash and cash equivalents, end of the period 5,903,519,802.47 5,159,985,226.06 6. Cash Flow Statement of the Company as the Parent Unit: RMB Item H1 2022 H1 2021 1. Cash flows from operating activities: Proceeds from sale of commodities and rendering of services 2,354,844,176.86 1,579,711,912.72 Tax rebates 86,941,251.18 125,466,130.99 Cash generated from other operating activities 97,266,687.71 253,268,585.04 Subtotal of cash generated from operating activities 2,539,052,115.75 1,958,446,628.75 Payments for commodities and services 2,958,268,595.49 2,203,917,150.41 Cash paid to and for employees 177,343,007.79 186,615,478.74 Taxes paid 8,874,050.17 5,362,665.96 Cash used in other operating activities 570,856,154.42 315,831,641.28 Subtotal of cash used in operating activities 3,715,341,807.87 2,711,726,936.39 Net cash generated from/used in operating activities -1,176,289,692.12 -753,280,307.64 2. Cash flows from investing activities: Proceeds from disinvestment 243,681,401.96 336,545,500.00 Return on investment 9,191,193.60 7,738,365.75 Net proceeds from the disposal of fixed assets, intangible assets 2,335.00 208,313.77 and other long-lived assets Net proceeds from the disposal of subsidiaries and other business units Cash generated from other investing activities 4,144,985,356.98 3,061,287,812.44 Subtotal of cash generated from investing activities 4,397,860,287.54 3,405,779,991.96 Payments for the acquisition of fixed assets, intangible assets 113,204,917.61 100,219,361.16 and other long-lived assets Payments for investments 181,192,000.00 416,340,000.00 Net payments for the acquisition of subsidiaries and other business units Cash used in other investing activities 3,667,215,872.05 3,653,620,787.61 Subtotal of cash used in investing activities 3,961,612,789.66 4,170,180,148.77 Net cash generated from/used in investing activities 436,247,497.88 -764,400,156.81 3. Cash flows from financing activities: Capital contributions received Borrowings raised 11,015,317,707.33 7,831,733,994.04 Cash generated from other financing activities 6,900,804,389.29 4,872,687,703.97 Subtotal of cash generated from financing activities 17,916,122,096.62 12,704,421,698.01 Repayment of borrowings 9,787,500,000.00 5,460,556,762.28 Interest and dividends paid 569,130,713.71 555,580,595.63 61 Konka Group Co., Ltd. Interim Report 2022 Cash used in other financing activities 6,871,379,554.34 5,048,804,238.24 Subtotal of cash used in financing activities 17,228,010,268.05 11,064,941,596.15 Net cash generated from/used in financing activities 688,111,828.57 1,639,480,101.86 4. Effect of foreign exchange rates changes on cash and cash 41,903.92 -524,306.83 equivalents 5. Net increase in cash and cash equivalents -51,888,461.75 121,275,330.58 Add: Cash and cash equivalents, beginning of the period 4,682,608,814.76 2,910,762,592.99 6. Cash and cash equivalents, end of the period 4,630,720,353.01 3,032,037,923.57 62 Konka Group Co., Ltd. Interim Report 2022 7. Consolidated Statements of Changes in Owners’ Equity H1 2022 Unit: RMB H1 2022 Equity attributable to owners of the Company as the parent Other equity instruments Less: Spe Gen Item Other Ot Non-controlling Share Prefer Perpet Treas cific eral Total owners’ equity Oth Capital reserves comprehensive Surplus reserves Retained earnings he Subtotal interests capital red ual ury rese reser er income r shares bonds stock rve ve 1. Balance as at the end of the period 2,407,94 234,389,963.10 -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 of prior year 5,408.00 Add: Adjustment for change in accounting policy Adjustment for correction of previous error Adjustment for business combination under common control Other adjustments 2. Balance as at the beginning of the 2,407,94 234,389,963.10 -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 Reporting Period 5,408.00 3. Increase/ decrease in the period ( “-” 132,442,151.79 3,289,330.41 52,421,168.43 188,152,650.63 -5,280,625.07 182,872,025.56 for decrease) 3.1 Total comprehensive income 3,289,330.41 172,818,438.83 176,107,769.24 -113,995,281.00 62,112,488.24 3.2 Capital increased and reduced by 132,442,151.79 132,442,151.79 109,449,655.93 241,891,807.72 owners 3.2.1 Ordinary shares increased by 73,710,000.00 73,710,000.00 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 132,442,151.79 132,442,151.79 35,739,655.93 168,181,807.72 3.3 Profit distribution -120,397,270.40 -120,397,270.40 -735,000.00 -121,132,270.40 3.3.1 Appropriation to surplus reserves 3.3.2 Appropriation to general reserve 3.3.3 Appropriation to owners (or -120,397,270.40 -120,397,270.40 -735,000.00 -121,132,270.40 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 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 2,407,94 366,832,114.89 -17,046,757.46 1,244,180,364.24 5,281,519,957.37 9,283,431,087.04 1,100,390,286.95 10,383,821,373.99 Reporting Period 5,408.00 63 Konka Group Co., Ltd. Interim Report 2022 H1 2021 Unit: RMB H1 2021 Equity attributable to owners of the Company as the parent Other equity instruments Item Less: Other Specifi Non-controlling Share Perpet Capital General Othe Total owners’ equity Preferre Oth Treasur comprehensive c Surplus reserves Retained earnings Subtotal interests capital ual reserves reserve r d shares er y stock income reserve bonds 1. Balance as at the end of the period 2,407,945 230,185,310.0 -16,583,042.42 1,211,721,109.67 4,595,371,391.63 8,428,640,176.97 2,292,254,947.67 10,720,895,124.64 of prior year,408.00 9 Add: Adjustment for change in accounting policy Adjustment for correction of previous error Adjustment for business combination under common control Other adjustments 2. Balance as at the beginning of the 2,407,945 230,185,310.0 -16,583,042.42 1,211,721,109.67 4,595,371,391.63 8,428,640,176.97 2,292,254,947.67 10,720,895,124.64 Reporting Period,408.00 9 3. Increase/ decrease in the period ( “-” 4,030,393.82 -583,043.66 -155,344,621.23 -151,897,271.07 24,865,602.00 -127,031,669.07 for decrease) 3.1 Total comprehensive income -583,043.66 85,449,919.57 84,866,875.91 4,342,773.34 89,209,649.25 3.2 Capital increased and reduced by 4,030,393.82 4,030,393.82 20,522,828.66 24,553,222.48 owners 3.2.1 Ordinary shares increased by 12,701,396.58 12,701,396.58 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 4,030,393.82 4,030,393.82 7,821,432.08 11,851,825.90 3.3 Profit distribution -240,794,540.80 -240,794,540.80 -240,794,540.80 3.3.1 Appropriation to surplus reserves 3.3.2 Appropriation to general reserve 3.3.3 Appropriation to owners (or -240,794,540.80 -240,794,540.80 -240,794,540.80 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 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 2,407,945 234,215,703.9 -17,166,086.08 1,211,721,109.67 4,440,026,770.40 8,276,742,905.90 2,317,120,549.67 10,593,863,455.57 Reporting Period,408.00 1 64 Konka Group Co., Ltd. Interim Report 2022 8. Statements of Changes in Owners’ Equity of the Company as the Parent H1 2022 Unit: RMB H1 2022 Other equity instruments Other Item Less: Treasury Specific Othe Share capital Preferred Perpetua Capital reserves comprehensive Surplus reserves Retained earnings Total owners’ equity Other stock reserve r shares l bonds income 1. Balance as at the end of the period of 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 prior year Add: Adjustment for change in accounting policy Adjustment for correction of previous error Other adjustments 23.10 23.10 2. Balance as at the beginning of the 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 Reporting Period 3. Increase/ decrease in the period ( “-” for 132,442,151.79 -276,232,195.15 -143,790,043.36 decrease) 3.1 Total comprehensive income -155,834,924.75 -155,834,924.75 3.2 Capital increased and reduced by 132,442,151.79 132,442,151.79 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 132,442,151.79 132,442,151.79 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 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 Reporting 2,407,945,408.00 243,139,144.39 -1,500,000.00 - 1,260,024,039.76 2,447,955,370.54 6,357,563,962.69 Period H1 2021 Unit: RMB H1 2021 Item Other equity instruments Less: Other Specific Share capital Capital reserves Surplus reserves Retained earnings Other Total owners’ equity Preferred Perpetual Other Treasury comprehensive reserve 65 Konka Group Co., Ltd. Interim Report 2022 shares bonds stock income 1. Balance as at the end of the period of prior year 2,407,945,408.00 112,570,352.72 -2,682,217.31 1,227,564,785.19 2,352,385,005.09 6,097,783,333.69 Add: Adjustment for change in accounting policy Adjustment for correction of previous error Other adjustments 1,017.42 1,017.42 2. Balance as at the beginning of the Reporting Period 2,407,945,408.00 112,570,352.72 -2,682,217.31 1,227,564,785.19 2,352,386,022.51 6,097,784,351.11 3. Increase/ decrease in the period ( “-” for decrease) -2,671,625.35 1,182,217.31 -411,975,210.57 -413,464,618.61 3.1 Total comprehensive income 1,182,217.31 -171,180,669.77 -169,998,452.46 3.2 Capital increased and reduced by owners -2,671,625.35 -2,671,625.35 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 -2,671,625.35 -2,671,625.35 3.3 Profit distribution -240,794,540.80 -240,794,540.80 3.3.1 Appropriation to surplus reserves 3.3.2 Appropriation to owners (or shareholders) -240,794,540.80 -240,794,540.80 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 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 Reporting Period 2,407,945,408.00 109,898,727.37 -1,500,000.00 1,227,564,785.19 1,940,410,811.94 5,684,319,732.50 66 Konka Group Co., Ltd. Interim Report 2022 I. Company Profile 1. Establishment Konka Group Co., Ltd. (hereinafter referred to as “Company” or “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 30 June 2022, 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 the production and sales of colour TVs, white goods, etc.; as well as the operation of industry trade business, environmental protection, semi-conductor, etc. 4. The financial statements contained herein have been approved for issue by the Board of Directors of the Company on 23 August 2022. II. Consolidation scope The Company has a total of 115 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 increased by 5 households including Jiangxi Konka High-tech Park Operation and Management Co., Ltd., Shangrao Konka Electronic Technology Innovation Co., Ltd. and Guizhou Konka New Energy Material Technology Co., Ltd. and decreased by 10 households including Xi'an Huasheng Jiacheng Real Estate Co., Ltd. and Shanghai Xinfeng Zhuoqun PCB Co., Ltd. due to losing control or cancellation compared to the same period of last year. For details, please refer to Note 7 “Changes in the consolidation scope” and Note 8 "Equity in Other Entities". 2. A check list of corporate names and their abbreviations mentioned in this Report No. Corporate name Abbreviation 1 Shenzhen Konka Electronics Technology Co., Ltd. Electronics Technology 67 Konka Group Co., Ltd. Interim Report 2022 No. Corporate name Abbreviation 2 Anhui Konka Zhilian E-Commerce Co., Ltd. Anhui Zhilian 3 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 7 Shenzhen Youzhihui Technology Co., Ltd. Youzhihui 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 Co., Chuzhou Konka 12 Ltd. 13 Xi'an Huasheng Jiacheng Real Estate Co., Ltd. Xi'an Huasheng 14 GuangDong XingDa HongYe Electronic Co., Ltd. XingDa HongYe 15 Shanghai Xinfeng Zhuoqun PCB Co., Ltd. Shanghai Xinfeng 16 Shenzhen Konka Circuit Co., Ltd. Konka Circuit Suining Konka Flexible Electronic Technology Co., Ltd. Konka Flexible Electronic 17 Suining Konka Hongye Electronics Co., Ltd. Konka Hongye Electronics 18 19 Boluo Konka Precision Technology Co., Ltd. Boluo Precision 20 Boluo Konka PCB Co., Ltd. Boluo Konka 21 Anhui Konka Tong giường Electrical Appliances Co., Ltd. Anhui Tong giường 22 Jiangsu Konka Smart Electrical Appliances Co., Ltd. Jiangsu Konka Smart 23 Anhui Konka Electrical Appliance Technology Co., Ltd. Anhui Electrical Appliance 24 Henan Frestec Refrigeration Appliance Co., Ltd. Frestec Refrigeration 25 Henan Frestec Electrical Appliances Co., Ltd. Frestec Electrical Appliances 26 Henan Frestec Household Appliances Co., Ltd. Frestec Household Appliances 27 Henan Frestec Smart Home Technology Co., Ltd. Frestec Smart Home 28 Shenzhen Konka Investment Holdings Co., Ltd. Konka Investment 68 Konka Group Co., Ltd. Interim Report 2022 No. Corporate name Abbreviation 29 Yibin Konka Technology Park Operation Co., Ltd. Yibin Konka Technology Park 30 Shenzhen Konka Capital Equity Investment Management Co., Ltd. Konka Capital 31 Konka Suiyong Investment (Shenzhen) Co., Ltd. Konka Suiyong 32 Shenzhen Konka Sheng xing Industrial Co., Ltd. Sheng xing Industrial 33 Shenzhen Konka Zhitong Technology Co., Ltd. Zhitong Technology 34 Konka Factoring (Shenzhen) Co., Ltd. Konka Factoring 35 Beijing Konka Electronic Co., Ltd. Beijing Konka Electronic 36 Konka Financial Leasing (Tianjin) Co., Ltd. Konka Leasing 37 Suining Konka Industrial Park Development Co., Ltd. Suining Konka Industrial Park Suining Electronic Technological 38 Suining Konka Electronic Technological Innovation Co., Ltd. Innovation 39 Shanghai Konka Industrial Co., Ltd. Shanghai Konka 40 Yantai Kangjin Technology Development Co., Ltd. Yantai Kangjin 41 Shenzhen Konka Mobile Interconnection Technology Co., Ltd. Mobile Interconnection 42 Sichuan Konka Smart Terminal Technology Co., Ltd Sichuan Konka 43 Yibin Konka Smart Technology Co., Ltd. Yibin Smart 44 Shenzhen KONSEMI Co., Ltd. Shenzhen KONSEMI 45 Chongqing Konka Technology Development Co., Ltd. Chongqing Konka 46 Hefei KONSEMI Storage Technology Co., Ltd. Hefei KONSEMI 47 Hefei Yihe Electronic Co., Ltd. Yihe Electronic 48 Kowin Memory Technology (Shenzhen) Co., Limited Kowin Memory (Shenzhen) 49 Kowin Memory Technology (Hong Kong) Co., Limited Kowin Memory (Hong Kong) 50 Konka Xinyun Semiconductor Technology (Yancheng) Co., Ltd. Konka Xinyun Semiconductor 51 Konka Industrial and Trade Technology (Shenzhen) Co., Ltd. Industrial and Trade Technology 52 Shenzhen Nianhua Enterprise Management Co., Ltd. Shenzhen Nianhua 53 Konka Huazhong (Hunan) Technology Co., Ltd. Konka Huazhong 54 Shenzhen Wankaida Science and Technology Co., Ltd. Wankaida Shenzhen Chuangzhi Electrical 55 Shenzhen Konka Chuangzhi Electrical Appliances Co., Ltd. Appliances 69 Konka Group Co., Ltd. Interim Report 2022 No. Corporate name Abbreviation 56 Suining Jiarun Property Co., Ltd. Suining Jiarun Property 57 Anhui Konka Electronic Co., Ltd. Anhui Konka 58 Anhui Kangzhi Trade Co., Ltd. Kangzhi Trade 59 Shenzhen Konka Telecommunications Technology Co., Ltd. Telecommunication Technology 60 Konka Mobility Co., Limited Konka Mobility 61 Dongguan Konka Electronic Co., Ltd. Dongguan Konka 62 Suining Konka Smart Technology Co., Ltd. Suining Konka Smart Chongqing Konka Optoelectronic Technology Research Institute Co.,Chongqing Optoelectronic 63 Ltd. Technology Research Institute 64 Yibin Kangrun Environmental Technology Co., Ltd. Yibin Kangrun 65 Yibin Kangrun Medical Waste Centralized Treatment Co., Ltd. Yibin Kangrun Medical Yibin Kangrun Environmental Protection Power Generation Co., Ltd. Yibin Kangrun Environmental 66 Protection 67 Ningbo Khr Electric Appliance Co., Ltd. Ningbo Khr Electric Appliance 68 Jiangxi Konka New Material Technology Co., Ltd. Jiangxi Konka 69 Jiangxi High Transparent Substrate Material Technology Co., Ltd. Jiangxi High Transparent Substrate 70 Jiangsu Konka Special Material Technology Co., Ltd. Jiangsu Konka Special Material 71 Jiangxi Xinfeng Microcrystalline Jade Co., Ltd. Xinfeng Microcrystalline 72 Konka Huanjia Environmental Technology Co., Ltd. Konka Huanjia 73 Konka Huanjia (Henan) Environmental Technology Co., Ltd. Konka Huanjia (Henan) 74 Shaanxi Konka Intelligent Appliance Co., Ltd. Shaanxi Konka Intelligent 75 Shenzhen Konka Pengrun Technology & Industry Co., Ltd. Pengrun Technology 76 Jiaxin Technology Co., Ltd. Jiaxin Technology 77 Konka Ronghe Industrial Technology (Zhe gian g) Co., Ltd. Konka Ronghe 78 Chongqing Kang xing rui Environmental Technology Co., Ltd. Chongqing Kang xing rui Chongqing Kang xing rui Scraped Automobile Recycling Co., Ltd. Chongqing Kang xing rui 79 Automobile Recycling 80 Shenzhen Konka Unifortune Technology Co., Ltd. Konka Unifortune 81 Jiali International (Hong Kong) Limited Jiali International 70 Konka Group Co., Ltd. Interim Report 2022 No. Corporate name Abbreviation 82 Sichuan Kangjiatong Technology Co., Ltd. Kangjiatong 83 Kanghong (Yantai) Environmental Technology Co., Ltd. Kanghong (Yantai) Environmental 84 Jiangkang (Shanghai) Technology Co., Ltd. Jiangkang (Shanghai) Technology 85 Shenzhen Konka Intelligent Manufacturing Technology Co., Ltd. Konka Intelligent Manufacturing 86 Yantai Laikang Industrial Development Co., Ltd. Yantai Laikang 87 Hainan Konka Material Technology Co., Ltd. Konka Material 88 Konka Ventures Development (Shenzhen) Co., Ltd. Konka Ventures 89 Yibin Konka Incubator Management Co., Ltd. Yibin Konka Incubator 90 Yantai Konka Healthcare Enterprise Service Co., Ltd. Yantai Konka Chengdu Anren Konka Cultural and Creative Incubator Management 91 Chengdu Anren Co., Ltd. 92 Guiyang Konka Enterprise Service Co., Ltd. Konka Enterprise Service 93 Shenzhen Konka Eco-Development Investment Co., Ltd. Konka Eco-Development 94 Konka (Europe) Co., Ltd. Konka Europe 95 Hong Kong Konka Limited Hong Kong Konka 96 Hongdin International Trading Limited Hongdin Trading 97 Konka North America LLC Konka North America 98 Kanghao Technology Co., Ltd. Kanghao Technology 99 Hongdin Invest Development Limited Hongdin Invest Chain Kingdom Memory Technologies Co., Limited Chain Kingdom Memory 100 Technologies Chain Kingdom Memory Technologies (Shenzhen) Co., Limited Chain Kingdom Memory 101 Technologies (Shenzhen) 102 Hongjet (Hong Kong) Company Limited Hongjet 103 Xi'an Feihe Real Estate Development Co., Ltd. Xi'an Feihe Chongqing Xinyuan Semiconductor Co., Ltd. Chongqing Xinyuan 104 Semiconductor 105 Jiangxi Konka Industrial Park Development Co. Ltd. Jiangxi Konka Industrial Park 106 Ruichang Kangrui Real Estate Co., Ltd. Ruichang Kangrui Real Estate 71 Konka Group Co., Ltd. Interim Report 2022 No. Corporate name Abbreviation 107 Konka Industrial Development (Wuhan) Co., Ltd. Industrial development in Wuhan 108 Shenzhen Kangxiaojia Digital Information Technology Co., Ltd. Kangxiaojia Digital 109 Shenzhen Yijiakang Smart Terminal Technology Co., Ltd. Yijiakang Smart Terminal Guizhou Kangkai Material Technology Co., Ltd. Guizhou Kangkai Material 110 Technology Guizhou Konka New Material Technology Co., Ltd. Guizhou Konka New Material 111 Technology 112 Guizhou Kanggui Energy Co., Ltd. Guizhou Kanggui Energy 113 Guangdong Xinwei Semiconductor Co., Ltd. Guangdong Xinwei 114 Chongqing Kang xing rui Renewable Resources Co., Ltd. Kangxinrun Renewable Resources Guizhou Kanggui Material Technology Co., Ltd. Guizhou Kanggui Material 115 Technology 116 Sichuan Chengrui Real Estate Co., Ltd. Sichun Chengrui 117 Chongqing Jiarun Real Estate Co., Ltd. Chongqing Jiarun 118 Nantong Kanghai Technology Industry Development Co., Ltd. Nantong Kanghai 119 Chongqing Kangyiyun Business Operation Management Co., Ltd. Chongqing Kangyiyun Shenzhen Kanghong Dongsheng Investment Partnership (LimitedKanghong Dongsheng 120 Partnership) 121 Jiangxi Konka High-tech Park Operation and Management Co., Ltd. Jiangxi Konka High-tech Park Shangrao Konka Electronic 122 Shangrao Konka Electronic Technology Innovation Co., Ltd. Technology Innovation 123 Guizhou Konka New Energy Material Technology Co., Ltd. Guizhou Konka New Energy 124 Zhe gian g Konka Electronic Technology Co., Ltd. Zhe gian g Konka Electronic Zhe gian g Konka Technology 125 Zhe gian g Konka Technology Industry Development Co., Ltd. Industry III. Basis for the Preparation of Financial Statements 1. Basic for the preparation With the going-concern assumption as the basis and based on transactions and other events that actually occurred, the Group prepared financial statements in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance and other regulations as well as the accounting policies and estimations stipulated in the Note IV “Significant Accounting Policies and Estimations”. 72 Konka Group Co., Ltd. Interim Report 2022 2. Going-concern The Group has a recent history of profitable operations supported by financial resources and considers it reasonable to prepare the financial statements on a going concern basis. IV. Important Accounting Policies and Estimations 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 and completely present the Group’s financial positions, business results and cash flows, and other relevant information. 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. Accounting Treatment Methods for Business Combinations under the Same Control or not under the Same Control As the combining party, the assets and liabilities obtained by the Group in a business combination 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, the capital reserve shall be adjusted. If the capital reserve is not sufficient to be offset, the retained earnings shall be adjusted. 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 merger cost is the sum of the fair value of cash or non-cash assets, liabilities issued or assumed, equity securities issued, etc. paid by the Group on the purchase date to gain control over the purchased party and all directly related expenses incurred in the business combination (The merge cost of business combination realized step by step through multiple transactions is the sum of every single transaction’s cost). 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 73 Konka Group Co., Ltd. Interim Report 2022 and contingent liabilities acquired in the merger, and non-cash assets of the merger consideration or equity securities issued, etc. 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. 6. Methods for Preparing Consolidated Financial Statements The scope of consolidation includes all controlled subsidiaries and structural entities. 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. All significant internal transactions, current balances and unrealized profits within the scope of consolidation shall be offset when preparing the consolidated statement. 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 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 74 Konka Group Co., Ltd. Interim Report 2022 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 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. 75 Konka Group Co., Ltd. Interim Report 2022 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. 7. Classification of Joint Arrangements and Accounting Treatment of Joint Operations 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. 8. 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. 9. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements (1) Foreign currency transaction As for foreign currency transaction, the Group converted the foreign currency amount into RMB amount at the exchange rate at the beginning of the month of transaction occurrence date (normally referred to as the central parity rate of foreign exchange rate on the same day published by the People’s Bank of China, the same below). 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 76 Konka Group Co., Ltd. Interim Report 2022 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. 10. Financial Assets and Financial Liabilities The Group recognizes a financial asset or liability when it becomes a party of the relevant financial instrument contract. (1) Financial assets 1) Classification, recognition 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: ①The business mode of the Group to manage the financial assets targets at collecting the contractual cash flow. 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 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: ①The 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 77 Konka Group Co., Ltd. Interim Report 2022 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 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. 2) 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 78 Konka Group Co., Ltd. Interim Report 2022 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 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. (2) Financial liabilities 1) 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. ②Financial liabilities arising from the transfer of financial assets not meeting the derecognition conditions or continuous involvement in the transferred financial assets. ③Financial 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. 2) Derecognition of financial liabilities In case of current obligation of financial liabilities (or partial financial liabilities) being 79 Konka Group Co., Ltd. Interim Report 2022 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. (3) Determination of financial assets and liabilities’ fair value The Group measured the fair value of financial assets and financial liabilities according to the price at major market. If major market does not exist, the fair value of financial assets and financial liabilities was measured according to the price at the most advantageous market through applying valuation technique applicable at the time and with sufficient usable data and other information support. The inputs for fair value measurement were classified into three levels. Level 1 is the unadjusted quotation of the same assets or liabilities on active market available on the measurement date. Level 2 is the input of relevant assets or liabilities other than that in level 1 that are observable either directly or indirectly. Level 3 is the unobservable input of relevant assets or liabilities. The Group preferred level 1 input, and applied level 3 input at last. Level 1 input was applicable for listed stock and bond held by the Group, level 2 input for financing of accounts receivable (mainly bank acceptance bill and trade acceptance bill meeting derecognition requirements after transfer), and level 3 input for other non-current financial assets (unlisted equity investment held by the Group) and held-for-trading financial assets (mainly financial products held by the Group). The level attributed to the fair value measurement result was determined according to the lowest level of the input with much significance to fair value measurement in general. The Group measured the investment of equity instruments at fair value. However, under limited situation, if the recent information for determining the fair value was insufficient, or the potential estimated amount of fair value was in wide range, and the cost represented the optimal estimation of fair value in such range, such cost could represent appropriate estimation of fair value in such range. Such equity instrument investments included: Equity investments held by the Group measured at fair value with changes included in the current profits and losses with no control, joint control or significance influence; non-trading equity instrument investments were designated as financial assets measured at fair value through other comprehensive income. (4) 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 80 Konka Group Co., Ltd. Interim Report 2022 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. (5) 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. 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. 11. Impairment of Financial Assets 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 81 Konka Group Co., Ltd. Interim Report 2022 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 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. 82 Konka Group Co., Ltd. Interim Report 2022 (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. 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 The Accepter shall be the bank with high credit level and low Bank Acceptance risks Classified by credit risk of acceptors (the same as accounts Trade Acceptance 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 Aging Combination This portfolio is accounts receivable with aging as the credit risk 83 Konka Group Co., Ltd. Interim Report 2022 Item Basis feature. Related party combination The accounts receivable within the scope of consolidation 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 This portfolio is accounts receivable with aging as the credit risk Aging Combination feature. This combination shall regard other receivables of extremely low Low Risk Combination risk (including the revolving fund, the cash deposit and the guarantee deposit) as the credit risk feature. Related party Other receivables within the scope of consolidation. 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 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 84 Konka Group Co., Ltd. Interim Report 2022 Item Basis Combination credit risk characteristics Franchise Regarding the long-term receivables related to the PPP Project as the Combination credit risk characteristics 17. Inventories The Group's inventories mainly include raw materials, products in process, semi-finished products, 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 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 85 Konka Group Co., Ltd. Interim Report 2022 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 of determining the expected credit loss of contract assets, refer to the description of 11. Financial Asset Impairment, 12. Notes Receivable, 13. Accounts Receivable. 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. 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 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 86 Konka Group Co., Ltd. Interim Report 2022 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, 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 87 Konka Group Co., Ltd. Interim Report 2022 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 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 88 Konka Group Co., Ltd. Interim Report 2022 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 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 89 Konka Group Co., Ltd. Interim Report 2022 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 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 90 Konka Group Co., Ltd. Interim Report 2022 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 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. 91 Konka Group Co., Ltd. Interim Report 2022 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, 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 andStraight-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 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. 24. Borrowing Costs For incurred borrowing costs, which can be directly attributed to 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 92 Konka Group Co., Ltd. Interim Report 2022 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. The to-be-capitalized amount of interests shall be determined in light of the actual interests incurred of the specially borrowed loan at the present period minus the income of interests earned on the unused borrowing loans as a deposit in the bank or as a temporary investment; the enterprise shall calculate and determine the to-be-capitalized amount on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined in light of the weighted average interest rate of the general borrowing. 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. 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 93 Konka Group Co., Ltd. Interim Report 2022 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 the remaining service life of the leased asset. 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. Land use rights are amortized equally over the years from the commencement date of the grant; intangible assets such as software and patents are amortized equally over the shortest of the estimated useful life, the contractual beneficiary life and the effective life prescribed by law. The amortization amount is charged to the cost of the related assets and current profit or loss according to their beneficiaries. The estimated useful life and amortization method of intangible assets with finite useful lives are reviewed at the end of each year. Accounting estimation methods are used when changes are required. The main research and development projects of the Group include the performance improvement project of Mini & Micro LED. (1) Specific criteria for dividing the research phase and development phase “Research” means an original and planned investigation to acquire and understand new scientific or technical knowledge. “Development” means the application of research results or other knowledge to one or more plans or designs to produce new or substantially improved materials, devices, products, or to obtain new processes, etc., prior to commercial production or use. Expenses for the research phase are charged to current profit or loss as incurred. (2) Specific criteria for capitalization of development stage expenditures Expenditures in the development stage are capitalized when the following conditions are met. ① It is feasible technically to finish intangible assets for use or sale; ② It is intended to finish and use or sell the intangible assets; ③ The usefulness of methods for intangible assets to generate economic benefits shall be proved, including being able to prove that there is a potential market for the products manufactured by 94 Konka Group Co., Ltd. Interim Report 2022 applying the intangible assets or there is a potential market for the intangible assets itself or the intangible assets will be used internally; ④ It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of sufficient technologies, financial resources and other resources; ⑤ The development expenditures of the intangible assets can be reliably measured. 27. Impairment of Long-term Assets For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limited service life, investing real estate with cost model, long-term equity investment of subsidiaries, cooperative enterprises and joint ventures, the 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. Other intangible Assets of reputation and uncertain service life and other non- accessible intangible assets should be tested for decrease in value no matter whether it exists. If the recoverable amount is less than carrying value in impairment test results, the provision for impairment of differences should include in impairment loss. Recoverable amounts would be the higher of net value of asset fair value deducting disposal charges or present value of predicted cash flow. Asset fair value should be determined according to negotiated sales price of fair trade. If no sales agreement exists but with asset active market, fair value should be determined according to the Buyer’s price of the asset. If no sales agreement or asset active market exists, asset fair value could be acquired on the basis of best information available. Disposal expenses include legal fees, taxes, cartage or other direct expenses of merchantable Assets related to asset disposal. Present value of predicted asset cash flow should be determined by the proper discount rate according to Assets in service and predicted cash flow of final disposal. Asset depreciation reserves should be calculated on the basis of single Assets. If it is difficult to predict the recoverable amounts for single Assets, recoverable amounts should be determined according to the belonging asset group. Asset group is the minimum asset combination producing cash flow independently. In impairment test, carrying value of the business reputation in financial report should be shared to beneficial asset group and asset group combination in collaboration of business merger. It is shown in the test that if recoverable amounts of shared business reputation asset group or asset group combination are lower than book value, it should determine the impairment loss. Impairment loss amount should firstly be deducted and shared to the carrying value of business reputation of asset group or asset group combination, then deduct carrying value of all assets according to proportions of other carrying value of above assets in asset group or asset group combination except business reputation. After the asset impairment loss is determined, recoverable value amounts would not be returned in future. 95 Konka Group Co., Ltd. Interim Report 2022 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 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 96 Konka Group Co., Ltd. Interim Report 2022 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 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 97 Konka Group Co., Ltd. Interim Report 2022 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 obligation; (3) A reliable estimate can be made of the amount of the obligation. On the balance sheet date, an enterprise shall take into full consideration of the risks, uncertainty, time value of money, and other factors pertinent to the Contingencies to measure the provisions in accordance with the best estimate of the necessary expenses for the performance of the current obligation. When all or some of the expenses necessary for the liquidation of an provisions of an enterprise is expected to be compensated by a third party, the compensation should be separately recognized as an asset only when it is virtually certain that the reimbursement will be obtained. Besides, the amount recognized for the reimbursement should not exceed the carrying value of the estimated liabilities. 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. 98 Konka Group Co., Ltd. Interim Report 2022 (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. ③The 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, 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. ④The 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 99 Konka Group Co., Ltd. Interim Report 2022 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. ②The 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 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. ④For 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 100 Konka Group Co., Ltd. Interim Report 2022 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. ⑦According 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 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: ①If 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 101 Konka Group Co., Ltd. Interim Report 2022 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. 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. 102 Konka Group Co., Ltd. Interim Report 2022 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: (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 103 Konka Group Co., Ltd. Interim Report 2022 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 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 104 Konka Group Co., Ltd. Interim Report 2022 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 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 105 Konka Group Co., Ltd. Interim Report 2022 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 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 106 Konka Group Co., Ltd. Interim Report 2022 (1) Changes of accounting policies No such cases in the Reporting Period. (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%: Dongguan Konka, XingDa HongYe, Xinfeng Microcrystalline, Boluo Konka Precision, Boluo Konka, Ningbo Urban Kanghanrui, Jiangsu Konka Smart, Yibin The circulating tax actually Kangrun, Yibin Kangrun Medical, Yibin maintenance and Kangrun Environmental Protection. Paid at paid construction tax 1%: Jiangxi Konka, Jiangxi High Transparent Substrate, Jiangkang (Shanghai) Technology. 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 Documents for details tax The main taxpayers of different corporate income tax rates are explained as follows: Name of entity Income tax rate Xingda Hongye, Wankaida, Jiangxi Konka, Jiangxi High Transparent Substrate, Chongqing 15% Kang xing rui, Chengdu Konka Hong Kong Konka, Konka Electrical Appliances 16.5% International Trading, Jiali International, 107 Konka Group Co., Ltd. Interim Report 2022 Name of entity Income tax rate Kangjietong, Jiaxin Technology, Jiaxin Technology, Konka Electrical Appliances Investment,, Konka Mobility, Kowin Memory (Hong Kong) Chain Kingdom Memory Technologies 8.25%/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, 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 No. 8 announcement in 2021 and No 13 announcement in 2022 issued by State Taxation Administration: Notice on the implementation of the inclusive tax reduction and exemption policy for small and micro enterprises, the annual taxable income of small and profitable enterprises is not The portion exceeding RMB1 million will be reduced to 12.5% of the taxable income, and the corporate income tax will be paid at the rate of 20%; the portion of the annual taxable income exceeding RMB1 million but not exceeding RMB3 million will be reduced by 25% Include the taxable income and pay corporate income tax at a rate of 20%. (2) On 14 September 2020, Jiangxi Konka, the subsidiary of the Company, obtained a high-tech enterprise certificate jointly issued by Jiangxi Science and Technology Department, Jiangxi Provincial Department of Finance and Jiangxi Provincial Tax Bureau of the State Administration of Taxation. The certificate number is GR202036000802 and is valid for three years. According to relevant tax regulations, Jiangxi Konka shall enjoy relevant preferential tax policies for high-tech enterprises for three consecutive years from 2020 to 2022 and pay the enterprise income tax at a preferential tax rate of 15%. (3) On 14 September 2020, Jiangxi High Transparent Substrate, the subsidiary of the Company, obtained a high-tech enterprise certificate jointly issued by Jiangxi Science and Technology Department, Jiangxi Provincial Department of Finance and Jiangxi Provincial Tax Bureau of the 108 Konka Group Co., Ltd. Interim Report 2022 State Administration of Taxation. The certificate number is GR202036000568 and is valid for three years. According to relevant tax regulations, Jiangxi High Transparent Substrate shall enjoy relevant preferential tax policies for high-tech enterprises for three consecutive years from 2020 to 2022 and pay the enterprise income tax at a preferential tax rate of 15%. (4) On 11 December 2020, Wankaida, the subsidiary of this Company obtained the high-tech enterprise certificate (certificate No.: GR202044201940) jointly issued by Shenzhen Technology Innovation Committee, Finance Committee of Shenzhen Municipality, Shenzhen Taxation Bureau of SAT with a valid period of three years. According to related taxation regulations, Wankaida enjoys related taxation preferential policies as a high-tech enterprise from 2020 to 2022 and pays the enterprise income tax as per the preferential tax rate of 15%. (5) 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%. (6) In accordance with the Notice on Tax Policy Issues Involved in the Further Implementation of the Western Development Strategy (C.S. [2011] No. 58) and the Announcement on Corporate Income Tax Issues Involved in the Further Implementation of the Western Development Strategy (Announcement [2012] No. 12 by the State Taxation Administration), 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 70% of its gross income in the current year, is entitled to a reduced corporate income tax rate of 15%. Chongqing Kang xing rui and Chengdu Konka Electronic, subsidiaries of the Company, are eligible for this preferential tax policy. (7) According to the fiscal and taxation document [2011] No. 100 published by the Ministry of Finance and the State Administration of Taxation, for the VAT general taxpayers who sell their self-developed and produced software products, the VAT shall be levied at the rate of 13%, and then the part that the actual tax burden on their VAT exceeds 3 will be implemented with the policy of immediate withdrawal. The Company’s subsidiaries, Wankaida Technology, Youzhihui, 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, the following annotation project (including the main projects, annotation of the financial statement of the Company), the period-begin refers to 1 January 2022, the period- 109 Konka Group Co., Ltd. Interim Report 2022 end refers to 30 June 2022, this period refers to the period from 1 January 2022 to 30 June 2022 and the last period refers to the period from 1 January 2021 to 30 June 2021. The monetary unit is renminbi. 1. Monetary Assets Item Ending balance Beginning balance Cash on hand 9.41 363.22 Bank deposits 5,934,218,376.34 5,968,346,855.81 Other monetary assets 600,420,010.11 521,205,992.21 Total 6,534,638,395.86 6,489,553,211.24 Of which: total amount 191,805,082.38 167,359,880.91 deposited overseas Note: The ending balance of other currency assets is mainly margin deposits, financial supervision account funds and other deposits subject to usage restrictions. Refer to Note VI-66 Assets with restricted ownership or use right for details. 2. Trading Financial Assets No such cases at the end of the Reporting Period. 3. Notes Receivable (1) Notes Receivable Listed by Category Item Ending balance Opening balance Commercial acceptance bill 223,163,880.43 561,724,266.27 Bank’s acceptance bill 711,678,224.25 1,215,753,215.01 Total 934,842,104.68 1,777,477,481.28 (2) Notes Receivable Pledged by the Company at the Period-end Item Amount Bank’s acceptance bill 368,248,481.12 Commercial acceptance bill 4,825,490.66 Total 373,073,971.78 (3) Notes Receivable which Had Endorsed by the Company or had Discounted and had not Due on the Balance Sheet Date at the Period-end Item Amount of recognition Amount of not terminated termination at the period- recognition at the period-end end 110 Konka Group Co., Ltd. Interim Report 2022 Item Amount of recognition Amount of not terminated termination at the period- recognition at the period-end end Bank’s acceptance bill 1,014,652,928.06 Commercial acceptance bill 151,757,113.09 Total 1,014,652,928.06 151,757,113.09 (4) Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to Execute the Contract or Agreement No such cases in the Reporting Period. (5) Listed by Withdrawal Methods for Bad Debt Provision Ending balance Carrying amount Bad debt provision With draw Category Proport al Carrying value Amount Amount ion (%) prop ortio n (%) Provision for bad debts provided individually Bad debt provision made 939,489,453.78 100.00 4,647,349.10 0.49 934,842,104.68 as per portfolio Of which: Bank 711,678,224.25 75.75 711,678,224.25 acceptance bill Commerci 227,811,229.53 24.25 4,647,349.10 2.04 223,163,880.43 al acceptance bill Total 939,489,453.78 100.00 4,647,349.10 0.49 934,842,104.68 (Continued) Beginning balance Category Carrying amount Bad debt provision Carrying value 111 Konka Group Co., Ltd. Interim Report 2022 With draw Proport al Amount Amount ion (%) prop ortio n (%) Provision for bad debts provided individually Bad debt provision made 1,789,175,291.65 100.00 11,697,810.37 0.65 1,777,477,481.28 as per portfolio Of which: Bank 1,215,753,215.01 67.95 1,215,753,215.01 acceptance bill Commerci 573,422,076.64 32.05 11,697,810.37 2.04 561,724,266.27 al acceptance bill Total 1,789,175,291.65 100.00 11,697,810.37 0.65 1,777,477,481.28 1) In the group, notes receivable, for which the provision for expected credit loss was made according to trade acceptance Ending balance Name Withdrawal Carrying amount Bad debt provision proportion (%) Within 1 year 227,811,229.53 4,647,349.10 2.04 Total 227,811,229.53 4,647,349.10 2.04 (6) Bad debt provision for notes receivable withdrawn, collected or reversed during the Reporting Period Changed amount Beginning With Collected or Ending Category Write-off or balance draw reversed balance verified al Commercial 11,697,810.37 7,050,461.27 4,647,349.10 acceptance bill Bank’s acceptance bill Total 11,697,810.37 7,050,461.27 4,647,349.10 112 Konka Group Co., Ltd. Interim Report 2022 (7) Notes receivable actually written off in the current period There is no notes receivable actually written off in the current period. 4. Accounts Receivable (1) Accounts Receivable Listed by Withdrawal Methods for Bad Debts Ending balance Carrying amount Bad debt provision With draw Category Propor al Carrying value Amount tion Amount prop (%) ortio n (%) Accounts receivable, for which the independent 1,577,591,336.54 33.12 1,040,697,168.86 65.97 536,894,167.68 provision for expected credit losses Accounts receivable, for which the provision for expected credit losses was withdrawn according to groups Of which: 3,186,183,833.65 66.88 350,449,169.82 11.00 2,835,734,663.83 aging group Subtotal of 3,186,183,833.65 66.88 350,449,169.82 11.00 2,835,734,663.83 groups Total 4,763,775,170.19 100.00 1,391,146,338.68 29.20 3,372,628,831.51 (Continued) Beginning balance Category Carrying amount Bad debt provision Carrying value 113 Konka Group Co., Ltd. Interim Report 2022 With draw Propor al Amount tion Amount propo (%) rtion (%) Accounts receivable, for which the independent 1,608,537,820.30 33.82 1,061,967,130.77 66.02 546,570,689.53 provision for expected credit losses Accounts receivable, for which the provision for expected credit losses was withdrawn according to groups Of which: 3,148,039,065.69 66.18 296,880,274.15 9.43 2,851,158,791.54 aging group Subtotal of 3,148,039,065.69 66.18 296,880,274.15 9.43 2,851,158,791.54 groups Total 4,756,576,885.99 100.00 1,358,847,404.92 28.57 3,397,729,481.07 1) Accounts receivable, for which, the independent provision for expected credit loss is made at the period-end Ending balance Withdr Name Bad debt awal Withdrawal Carrying amount provision proport reason ion (%) Shanghai Huaxin 299,136,676.70 270,016,218.90 90.27 Debt default International Group 114 Konka Group Co., Ltd. Interim Report 2022 Ending balance Withdr Name Bad debt awal Withdrawal Carrying amount provision proport reason ion (%) Co., Ltd. Hongtu Sanbao High-tech Agreement 200,000,000.00 80,000,000.00 40.00 Technology Co., reorganization Ltd. Tewoo Group Co., Judicial 200,000,000.00 100,000,000.00 50.00 Ltd. reorganization Shenzhen Yaode It is not expected Technology Co., 137,931,418.85 68,528,250.38 49.68 to recover all of Ltd. them Guangan Ouqishi It is not expected Electronic 113,230,553.53 101,907,498.18 90.00 to recover all of Technology Co., them Ltd. .Zhongfu Tiangong Construction Group Co., Ltd. (formerly It is not expected known as 71,689,096.65 46,662,912.82 65.09 to recover all of “Zhonghegong them Construction Group Co., Ltd.) CCCC First Harbor Expected to be Engineering 65,221,300.00 58,699,170.00 90.00 difficult to Company Ltd. recover in full China Energy Expected to be Electric Fuel Co., 50,000,000.00 42,500,000.00 85.00 difficult to Ltd. recover in full Tahoe Group Co., Debt 50,000,000.00 40,000,000.00 80.00 Ltd. reorganization The counterparty H-BUSTER DO is bankrupt and BRASIL 18,458,464.59 18,458,464.59 100.00 is expected to be INDUSTRIA difficult to 115 Konka Group Co., Ltd. Interim Report 2022 Ending balance Withdr Name Bad debt awal Withdrawal Carrying amount provision proport reason ion (%) recover It is not expected Others 371,923,826.22 213,924,653.99 57.52 to recover all of them Total 1,577,591,336.54 1,040,697,168.86 65.97 2) Accounts receivable, for which the provision for expected credit losses was withdrawn according to groups Ending balance Aging Withdrawal Carrying amount Bad debt provision proportion (%) Within 1 year 2,559,004,569.98 52,203,693.17 2.04 1 to 2 years 207,273,622.32 20,768,816.96 10.02 2-3 years 135,613,018.70 30,770,593.94 22.69 3-4 years 107,023,225.80 69,436,668.90 64.88 Over 4 years 177,269,396.85 177,269,396.85 100.00 Total 3,186,183,833.65 350,449,169.82 11.00 This portfolio is recognized based on the aging characteristics of accounts receivable, and the withdrawal proportion of bad debt provision is recognized based on the historical loss rate and forward-looking factors. (2) Accounts Receivable Listed by Aging Aging Ending balance Within 1 year 2,560,479,907.78 1 to 2 years 298,297,639.07 2 to 3 years 828,608,040.41 3 to 4 years 869,088,911.41 Over 4 years 207,300,671.52 Subtotal 4,763,775,170.19 Less: bad debt provision 1,391,146,338.68 Total 3,372,628,831.51 (3) Bad debt provision for accounts receivable during the Reporting Period 116 Konka Group Co., Ltd. Interim Report 2022 Changed amount Category Beginning balance Collected or Withdrawal reversed Bad debt provision of 1,358,847,404.92 42,299,060.06 accounts receivable Total 1,358,847,404.92 42,299,060.06 (Continued) Changed amount Category Decrease for other Ending balance Write-off or verified reasons Bad debt provision of 15,638,405.09 -5,638,278.79 1,391,146,338.68 accounts receivable Total 15,638,405.09 -5,638,278.79 1,391,146,338.68 Decreases for other reasons were RMB-5,698,717.04 due to exchange rate changes and the decrease by RMB60,438.25 due to the loss of controlling right. (4) Accounts receivable actually verified during the Reporting Period Item Amount verified Actually verified accounts receivable 15,638,405.09 Of which the verification of significant accounts receivable: Whether occurred Verification because of Natur Verification Reason for Name of entity procedures related- e Amount verification performed party transactio ns Approved by Paym Shantan Innovations Expected to be the Board of ent for 2,825,921.20 No Pvt. LTD unrecoverable Directors of goods subsidiary Approved by ASANZO GROUP Paym Expected to be the Board of JOINT STOCK ent for 6,292,153.94 No unrecoverable Directors of COMPANY goods subsidiary ASANZO MEDIA Paym 2,036,473.41 Expected to be Approved by No 117 Konka Group Co., Ltd. Interim Report 2022 Whether occurred Verification because of Natur Verification Reason for Name of entity procedures related- e Amount verification performed party transactio ns AND ent for unrecoverable the Board of ENTERTAINMENT goods Directors of JOIN subsidiary Approved by Paym A SANZO VIET NAM Expected to be the Board of ent for 4,483,856.54 No ELECTRONIC JOINT unrecoverable Directors of goods subsidiary Total 15,638,405.09 (5) Top 5 of the Ending Balance of the Accounts Receivable Collected according to the Arrears Party The total amount of top five of account receivable of ending balance collected by arrears party was RMB 1,734,749,192.99, accounting for 36.42% of total closing balance of account receivable, the relevant ending balance of bad debt provision withdrawn was RMB471,176,245.94. (6) Accounts Receivable Derecognized due to the Transfer of Financial Assets There was no accounts receivable derecognized for transfer of financial assets. (7) Amount of Assets and Liabilities Formed due to the Transfer and the Continued Involvement of Accounts Receivable There is no amount of assets and liabilities formed due to the transfer of accounts receivable and continued involvement in Reporting Period. 5. Accounts Receivable Financing Item Ending balance Beginning balance Notes Receivable 9,926,723.80 71,490,688.54 Total 9,926,723.80 71,490,688.54 6. Prepayments (1) Age of prepayments Item Ending balance Beginning balance 118 Konka Group Co., Ltd. Interim Report 2022 Amount Proportion Amount Proportion (%) (%) Within 1 583,266,427.55 95.41 602,386,221.38 95.41 year 1 to 2 years 13,380,428.37 2.19 20,098,838.22 3.18 2-3 years 10,227,155.90 1.67 8,614,486.12 1.36 Over 3 years 4,475,658.82 0.73 301,408.14 0.05 Total 611,349,670.64 100.00 631,400,953.86 100.00 Note: The amount of prepayments aged over one year at the end of the period is RMB 28,083,243.09, accounting for 4.59% of the total balance of prepayments of the Company, and consists mainly of payments for goods afloat or unsettled payments. (2) Prepayments to Suppliers from Top 5 Prepaid Parties Classified based on the Ending Balance The total amount of prepayments with top 5 ending balance collected by prepaid party was RMB205,452,468.95, accounting for 33.61% of the total ending balance of prepayments. 7. Other Receivables Item Ending balance Opening balance Interests receivable 3,478,418.99 2,573,082.79 Dividends receivable Other Receivables 1,806,783,384.89 1,834,886,622.85 Total 1,810,261,803.88 1,837,459,705.64 7.1 Interests Receivable (1) Category of Interests Receivable Item Ending balance Opening balance Term deposit 2,907,863.11 2,002,526.91 Factoring interest 570,555.88 570,555.88 Total 3,478,418.99 2,573,082.79 (2) Withdrawal of Bad Debt Provision for Interests Receivable The Company did not have impaired interests receivable. 7.2 Dividends Receivable (1) No such cases at the end of the Reporting Period. 7.3 Other Receivables (1) Classified by Account Nature 119 Konka Group Co., Ltd. Interim Report 2022 Nature Ending carrying balance Opening carrying balance Deposit and margin 1,324,584,359.75 1,356,193,440.22 Intercourse funds among minority shareholders in the business 175,020,491.02 173,487,141.27 consolidation not under the same control and related parties Energy-saving subsidies receivable 152,399,342.00 152,399,342.00 Others 1,536,387,839.20 1,489,929,312.88 Total 3,188,392,031.97 3,172,009,236.37 (2) Withdrawal of Bad Debt Provision for Other Receivables Stage 1 Stage 2 Stage 3 Expected loss in Expected credit Bad debt Expected credit the duration losses for the Total provision loss of the next (credit entire duration 12 months impairment not (with credit occurred) impairment) Balance as at 1 17,419,904.57 182,212,040.32 1,137,490,668.63 1,337,122,613.52 January 2022 In the Reporting Period, carrying amount of other -4,196,042.85 4,196,042.85 receivables on 1 January 2022 ——Transferred -4,196,042.85 4,196,042.85 to the Phase II ——Transferred to the Phase III ——Transferred back to the Phase II ——Transferred back to the Phase I Provision made in the current 1,474,096.03 13,879,527.05 28,006,091.69 43,359,714.77 period Amount 120 Konka Group Co., Ltd. Interim Report 2022 Stage 1 Stage 2 Stage 3 Expected loss in Expected credit Bad debt Expected credit the duration losses for the Total provision loss of the next (credit entire duration 12 months impairment not (with credit occurred) impairment) transferred back in the current year Write-off Verification Other changes 1,126,318.79 1,126,318.79 Balance as at 30 15,824,276.54 200,287,610.22 1,165,496,760.32 1,381,608,647.08 June 2022 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 1 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 1 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. (3) Withdrawing bad debt provision for other receivables according to group Ending balance Carrying amount Bad debt provision Withd Category Propo rawal Carrying value Amount rtion Amount propor (%) tion Other receivables with 1,458,878,177.84 45.75 1,165,496,760.32 79.89 293,381,417.52 significant individual 121 Konka Group Co., Ltd. Interim Report 2022 Ending balance Carrying amount Bad debt provision Withd Category Propo rawal Carrying value Amount rtion Amount propor (%) tion amount and make independent provision for expected credit loss Other receivables withdrawn bad debt provision according to credit risks characteristics Aging group 1,469,772,683.19 46.10 200,523,262.91 13.64 1,269,249,420.28 Low-risk 259,741,170.94 8.15 15,588,623.85 6.00 244,152,547.09 group Subtotal of 1,729,513,854.13 54.25 216,111,886.76 12.50 1,513,401,967.37 groups Total 3,188,392,031.97 100.00 1,381,608,647.08 43.33 1,806,783,384.89 (Continued) Beginning balance Carrying amount Bad debt provision Withd Category Propo rawal Carrying value Amount rtion Amount propor (%) tion Other receivables with 1,458,258,132.07 45.97 1,137,490,668.63 78.00 320,767,463.44 significant individual 122 Konka Group Co., Ltd. Interim Report 2022 Beginning balance Carrying amount Bad debt provision Withd Category Propo rawal Carrying value Amount rtion Amount propor (%) tion amount and make independent provision for expected credit loss Other receivables withdrawn bad debt provision according to credit risks characteristics Aging group 1,494,744,336.27 47.13 188,949,294.11 12.64 1,305,795,042.16 Low-risk 219,006,768.03 6.90 10,682,650.78 4.88 208,324,117.25 group Subtotal of 1,713,751,104.30 54.03 199,631,944.89 11.65 1,514,119,159.41 groups Total 3,172,009,236.37 100.00 1,337,122,613.52 42.15 1,834,886,622.85 (4) Listed by aging Aging Ending balance Within 1 year 886,676,703.44 1 to 2 years 681,614,764.99 2-3 years 1,154,159,125.09 3-4 years 233,236,498.87 4-5 years 4,506,854.84 Over 5 years 228,198,084.74 Subtotal 3,188,392,031.97 Less: bad debt provision 1,381,608,647.08 Total 1,806,783,384.89 123 Konka Group Co., Ltd. Interim Report 2022 (5) Bad Debt Provision for Other Receivables The amount of bad debt provision for Reporting Period was RMB43,359,714.77, increasing RMB1,249,137.49 which was mainly due to exchange rate changes, decreasing RMB122,818.70 which was mainly due to loss of control. (6) Other Receivables Actually Written off in the Reporting Period There were no other receivables actually written off in the Reporting Period. (7) Other Receivables with Top 5 Ending Balances Collected by Arrears Party The total amount of other receivables with top 5 ending balance collected by arrears party in the Reporting Period was RMB1,424,096,545.64, accounting for 44.67% of the total ending balance of other receivables. The total ending balance of bad debt provision correspondingly withdrawn was RMB390,808,329.07. (8) Other Receivables Derecognized due to the Transfer of Financial Assets There were no other receivables derecognized due to the transfer of financial assets during the Reporting Period. (9) Amount of Assets and Liabilities Formed due to the Transfer and the Continued Involvement of Other Receivables There were no assets or liabilities formed due to the transfer and the continued involvement of other receivables during the Reporting Period. 8. Inventories (1) Category of Inventories Ending balance Inventory falling price Item Carrying balance reserves/impairment Carrying value provision of contract performance costs Real estate development projects: Development cost 24,421,591.35 24,421,591.35 Subtotal 24,421,591.35 24,421,591.35 Non-real eatate development projects: Raw materials 1,213,593,412.99 63,109,874.71 1,150,483,538.28 124 Konka Group Co., Ltd. Interim Report 2022 Ending balance Inventory falling price Item Carrying balance reserves/impairment Carrying value provision of contract performance costs Semi-finished products 173,645,401.11 35,883,710.08 137,761,691.03 Products on hand 2,948,423,458.79 243,302,592.86 2,705,120,865.93 Contract performance 254,159.33 254,159.33 costs Subtotal 4,335,916,432.22 342,296,177.65 3,993,620,254.57 Total 4,360,338,023.57 342,296,177.65 4,018,041,845.92 Details of development cost Estimated next Opening Ending Item On-stream time completion balance balance time Konka (Haimen)’s project of intelligent manufacturing base June 2022 June 2024 24,421,591.35 for electronic information industry (Continued) Beginning balance Inventory falling price Item reserves / impairment Carrying amount Carrying value provision of contract performance costs Non-real eatate development projects: Raw materials 1,300,321,549.53 56,921,789.83 1,243,399,759.70 Semi-finished products 188,626,889.60 36,212,915.54 152,413,974.06 Products on hand 2,925,212,679.95 252,742,763.86 2,672,469,916.09 Contract performance 254,159.33 254,159.33 125 Konka Group Co., Ltd. Interim Report 2022 Beginning balance Inventory falling price Item reserves / impairment Carrying amount Carrying value provision of contract performance costs costs Subtotal 4,414,415,278.41 345,877,469.23 4,068,537,809.18 Total 4,414,415,278.41 345,877,469.23 4,068,537,809.18 (2) Inventory falling price reserves and impairment provision of contract performance costs Increased Item Beginning balance Withdrawal Other Raw materials 56,921,789.83 8,438,000.83 Semi-finished product 36,212,915.54 651,553.89 Inventory goods 252,742,763.86 4,220,434.03 Contract performance costs Total 345,877,469.23 13,309,988.75 (Continued) Decreased Item Ending balance Write-off Other Raw materials 2,016,763.74 233,152.21 63,109,874.71 Semi-finished product 980,759.35 35,883,710.08 Inventory goods 12,870,905.06 789,699.97 243,302,592.86 Contract performance costs Total 15,868,428.15 1,022,852.18 342,296,177.65 Specific basis for determining the realizable 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 write-off of Specific basis for withdrawal of Item inventory falling price reserves inventory falling price reserves in the Reporting Period The realizable net value was lower They have been sold or collected Raw materials than the carrying value in the Reporting Period Semi-finished The realizable net value was lower They have been sold or collected 126 Konka Group Co., Ltd. Interim Report 2022 Reasons for write-off of Specific basis for withdrawal of Item inventory falling price reserves inventory falling price reserves in the Reporting Period products than the carrying value in the Reporting Period The realizable net value was lower They have been sold in the Products on hand than the carrying value Reporting Period 9. Contractual assets There were no contractual assets at the end of the Reporting Period. 10. Current Portion of Non-current Assets Item Ending balance Beginning Nature balance Current portion of long-term Finance leasing 28,493,943.14 28,105,523.78 receivable amount Total 28,493,943.14 28,105,523.78 11. Other Current Assets Item Ending balance Beginning balance Principal and interests of entrusted loans to 2,680,326,498.49 1,624,197,904.35 associated enterprises Prepayments and deductible taxes, and 638,536,197.81 649,198,781.95 refund of tax for export receivable Costs receivable for returning goods 19,225,630.83 21,501,882.70 Others 4,778,089.47 5,064,822.24 Total 3,342,866,416.60 2,299,963,391.24 12. Long-term Receivables (1) List of Long-term Receivables Ending balance Item Carrying Bad debt Carrying value amount provision Finance leasing amount 3,283,943.14 3,283,943.14 Of which: unrealized financing income 83,035.07 83,035.07 Cash deposits of long-term receivables 35,640,400.00 35,640,400.00 Less: Current portion of long-term receivable 28,493,943.14 28,493,943.14 See Note VI. 10 for details) Total 10,430,400.00 10,430,400.00 127 Konka Group Co., Ltd. Interim Report 2022 (Continued) Beginning balance Item Carrying Bad debt Carrying value amount provision Finance leasing amount 10,960,622.92 10,960,622.92 Of which: unrealized financing income 390,068.94 390,068.94 Cash deposits of long-term receivables 35,640,400.00 35,640,400.00 Less: Current portion of long-term receivable 28,105,523.78 28,105,523.78 See Note VI. 10 for details) Total 18,495,499.14 18,495,499.14 128 Konka Group Co., Ltd. Interim Report 2022 13. Long-term Equity Investments Increase/decrease Gains and losses Adjustment of Investee Opening balance Additional Investment Cost method to recognized other investment reduced equity method under the equity comprehensive method income Kangkong Ventures Development (Shenzhen) 4,895,096.41 -122,500.00 Co., Ltd. Nanjing Zhihuiguang Information Technology 1,642,793.07 8,927.50 Research Institute Co., Ltd. Feidi Technology (Shenzhen) 10,468,555.83 -171,200.00 Co., Ltd. and its subsidiaries Shenzhen Kangyue 32,504,265.03 -109,725.90 Enterprise Co., Ltd. Foshan Pearl River Media Creative Park Cultural 4,179,700.00 -477,535.95 Development Co., Ltd. Kangkai Technology Service 228,931.64 -93,330.23 (Chengdu) Co., Ltd. Pu giường Jiakang 1,836,583.36 2,037,585.61 129 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Gains and losses Adjustment of Investee Opening balance Additional Investment Cost method to recognized other investment reduced equity method under the equity comprehensive method income Technology Co, Ltd. Chongqing Qingjia 15,034,341.13 606,551.34 Electronics Co., Ltd. Shenzhen Jielunte 94,278,354.91 -342,916.95 Technology Co., Ltd. Panxu Intelligence Co., Ltd. 52,366,635.10 314,310.00 Orient Excellent (Zhuhai) 5,077,777.37 3,388,170.30 Asset Management Co., Ltd. Dongfang Konka No. 1 (Zhuhai) Private Equity 467,638,787.38 5,076,700.00 -1,190,792.65 Investment Fund (LP) Tongxiang Wuzhen Kunyu 3,528,077.43 Equity Investment Co., Ltd. Shenzhen RF-LINK Technology Co., Ltd. Anhui Kaikai Shijie E- 418,721,305.96 commerce Co., Ltd. Kunshan Kangsheng 317,101,869.51 -4,747,257.35 130 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Gains and losses Adjustment of Investee Opening balance Additional Investment Cost method to recognized other investment reduced equity method under the equity comprehensive method income Investment Development Co., Ltd. Chutian Dragon Co., Ltd. 647,490,626.93 85,013,375.26 13,641,260.41 Helong gian g Longkang Zhijia 1,117,531.32 1,157,647.82 40,116.50 Technology Co., Ltd. Shaanxi Silu Yunqi Smart 14,113,227.58 183,461.77 Technology Co., Ltd. Shenzhen Kanghong xing Smart Technology Co., Ltd. Shenzhen Zhongbing Konka Technology Co., Ltd. Shenzhen Bosser New 60,453,041.59 1,324,755.44 Materials Co., Ltd. Shenzhen Yaode Technology Co., Ltd. Wuhan Tianyuan Environmental Protection 325,645,840.91 11,179,621.33 Co., Ltd. 131 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Gains and losses Adjustment of Investee Opening balance Additional Investment Cost method to recognized other investment reduced equity method under the equity comprehensive method income Chuzhou Konka Technology Industry Development Co., 49,658,397.02 -1,305,129.50 Ltd. Chuzhou Kangjin Health Industrial Development Co., 118,122,798.37 24,500,000.00 Ltd. Nantong Kang gian Technology Industrial Park 116,294,808.94 -588,275.99 Operations and Management Co., Ltd. Chuzhou Kangxin Health Industry Development Co., 185,277,588.25 -1,370,767.86 Ltd. Dongguan Guankang 539,103,920.30 -12,145,407.83 Yuhong Investment Co., Ltd. Shenzhen Morsemi Semiconductor Technology 2,395,748.73 -2,395,748.73 Co., Ltd. 132 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Gains and losses Adjustment of Investee Opening balance Additional Investment Cost method to recognized other investment reduced equity method under the equity comprehensive method income Shandong Econ Technology 1,024,944,000.00 59,671,172.50 Co., Ltd. Dongguan Kangjia New Materials Technology Co., 6,920,620.00 -451,280.15 Ltd. Shenzhen E2info Network 1,018,795,584.41 574,782.45 Technology Co., Ltd. Yantai Kangyun Industrial 76,721,264.91 -2,011,566.36 Development Co., Ltd. E3 (Hainan) Technology Co., 58,715,678.97 Ltd. Shenzhen Konka Jiapin Intelligent Electrical 3,921,788.17 725,889.93 Apparatus Co., Ltd. Shenzhen Konda E-display 82,930,520.62 -1,564,990.77 Co., Ltd. Chongqing Yuanlv Benpao 33,459,820.85 -5,544,180.67 Real Estate Co., Ltd. 133 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Gains and losses Adjustment of Investee Opening balance Additional Investment Cost method to recognized other investment reduced equity method under the equity comprehensive method income Shenzhen Kangpeng Digital 5,702,518.20 -1,164,839.41 Technology Co., Ltd. Yantai Kangtang Construction Development 17,740.49 100,947.17 Co., Ltd. Dongguan Kangzhihui 23,528,224.46 -4,227,152.42 Electronics Co., Ltd. Sichuan Huayi Jiakang 339,893.32 -161,494.44 Technology Co., Ltd. Sichuan Aimijiakang 2,000,138.36 -138,036.90 Technology Co., Ltd. Beijing Konka Jingyuan 766,290.97 Technology Co., Ltd. Chongqing Liangshan Enterprise Management Co., 53,673.48 Ltd. Shenzhen Kangene 907,025.65 51,821.26 Technology Innovation 134 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Gains and losses Adjustment of Investee Opening balance Additional Investment Cost method to recognized other investment reduced equity method under the equity comprehensive method income Development Co., Ltd. Shandong Kangfei Intelligent Electrical Appliances Co., 1,478,689.46 -1,113,706.55 Ltd. Henan Kangfei Intelligent Electrical Appliances Co., 1,832,647.54 -163,129.50 Ltd. Runxin Microelectronic 47,509,494.92 47,509,494.92 (Dalian) Co, Ltd. Guangdong Kangyuan 9,214,309.08 6,680,000.00 -726,735.58 Semiconductor Co., Ltd. Chongqing Kangyiqing 795,085.13 -82,240.22 Technology Co., Ltd. Shenzhen Kangying Semiconductor Technology 11,416,062.86 6,000,000.00 -1,080,619.83 -38,929.34 Co., Ltd. KK Smartech Limited 1,441,263.59 Shenzhen Konka Electrical 135 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Gains and losses Adjustment of Investee Opening balance Additional Investment Cost method to recognized other investment reduced equity method under the equity comprehensive method income Appliances Co., Ltd. Heifei KONSEMI Storage 204,000,000.00 -8,004,201.68 Technology Co., Ltd. Sichuan Chengrui Real 43,120,000.00 Estate Co., Ltd. Konka Industrial Development (Wuhan) Co., 45,000,000.00 Ltd. Total 5,902,588,939.51 42,256,700.00 133,680,518.00 292,120,000.00 42,354,610.09 -38,929.34 (Continued) Increase/decrease Cash bonus or Withdrawal Ending balance Investee Other equity profits of Ending balance of impairment Others changes announced to impairment provision issue provision Kangkong Ventures 4,772,596.41 Development (Shenzhen) Co., 136 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Cash bonus or Withdrawal Ending balance Investee Other equity profits of Ending balance of impairment Others changes announced to impairment provision issue provision Ltd. Nanjing Zhihuiguang Information Technology 1,651,720.57 Research Institute Co., Ltd. Feidi Technology (Shenzhen) 10,297,355.83 Co., Ltd. and its subsidiaries Shenzhen Kangyue Enterprise 32,394,539.13 Co., Ltd. Foshan Pearl River Media Creative Park Cultural 3,702,164.05 Development Co., Ltd. Kangkai Technology Service 135,601.41 (Chengdu) Co., Ltd. Pu giường Jiakang Technology 3,874,168.97 Co, Ltd. Chongqing Qingjia Electronics 15,640,892.47 Co., Ltd. Shenzhen Jielunte Technology 93,935,437.96 137 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Cash bonus or Withdrawal Ending balance Investee Other equity profits of Ending balance of impairment Others changes announced to impairment provision issue provision Co., Ltd. Panxu Intelligence Co., Ltd. 52,680,945.10 Orient Excellent (Zhuhai) 8,465,947.67 Asset Management Co., Ltd. Dongfang Konka No. 1 (Zhuhai) Private Equity 471,524,694.73 Investment Fund (LP) Tongxiang Wuzhen Kunyu 3,528,077.43 Equity Investment Co., Ltd. Shenzhen RF-LINK 85,656,027.35 Technology Co., Ltd. Anhui Kaikai Shijie E- 418,721,305.96 commerce Co., Ltd. Kunshan Kangsheng Investment Development Co., 312,354,612.16 Ltd. Chutian Dragon Co., Ltd. 4,410,993.60 571,707,518.48 Helong gian g Longkang Zhijia 138 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Cash bonus or Withdrawal Ending balance Investee Other equity profits of Ending balance of impairment Others changes announced to impairment provision issue provision Technology Co., Ltd. Shaanxi Silu Yunqi Smart 14,296,689.35 Technology Co., Ltd. Shenzhen Kanghong xing Smart 12,660,222.73 Technology Co., Ltd. Shenzhen Zhongbing Konka Technology Co., Ltd. Shenzhen Bosser New 61,777,797.03 18,536,771.07 Materials Co., Ltd. Shenzhen Yaode Technology 214,559,469.35 Co., Ltd. Wuhan Tianyuan Environmental Protection Co., 2,770,200.00 334,055,262.24 Ltd. Chuzhou Konka Technology Industry Development Co., 48,353,267.52 Ltd. Chuzhou Kangjin Health 142,622,798.37 139 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Cash bonus or Withdrawal Ending balance Investee Other equity profits of Ending balance of impairment Others changes announced to impairment provision issue provision Industrial Development Co., Ltd. Nantong Kang gian Technology Industrial Park Operations and 115,706,532.95 Management Co., Ltd. Chuzhou Kangxin Health Industry Development Co., 183,906,820.39 Ltd. Dongguan Guankang Yuhong 526,958,512.47 Investment Co., Ltd. Shenzhen Morsemi Semiconductor Technology Co., Ltd. Shandong Econ Technology 135,296,760.09 1,219,911,932.59 Co., Ltd. Dongguan Kangjia New 6,469,339.85 Materials Technology Co., Ltd. Shenzhen E2info Network 1,019,370,366.86 140 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Cash bonus or Withdrawal Ending balance Investee Other equity profits of Ending balance of impairment Others changes announced to impairment provision issue provision Technology Co., Ltd. Yantai Kangyun Industrial 74,709,698.55 Development Co., Ltd. E3 (Hainan) Technology Co., 58,715,678.97 Ltd. Shenzhen Konka Jiapin Intelligent Electrical Apparatus 4,647,678.10 Co., Ltd. Shenzhen Konda E-display 81,365,529.85 Co., Ltd. Chongqing Yuanlv Benpao 27,915,640.18 Real Estate Co., Ltd. Shenzhen Kangpeng Digital 4,537,678.79 Technology Co., Ltd. Yantai Kangtang Construction 118,687.66 Development Co., Ltd. Dongguan Kangzhihui 19,301,072.04 Electronics Co., Ltd. 141 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Cash bonus or Withdrawal Ending balance Investee Other equity profits of Ending balance of impairment Others changes announced to impairment provision issue provision Sichuan Huayi Jiakang 178,398.88 Technology Co., Ltd. Sichuan Aimijiakang 1,862,101.46 Technology Co., Ltd. Beijing Konka Jingyuan 766,290.97 Technology Co., Ltd. Chongqing Liangshan Enterprise Management Co., 53,673.48 Ltd. Shenzhen Kangene Technology Innovation Development Co., 958,846.91 Ltd. Shandong Kangfei Intelligent 364,982.91 Electrical Appliances Co., Ltd. Henan Kangfei Intelligent 1,669,518.04 Electrical Appliances Co., Ltd. Runxin Microelectronic (Dalian) Co, Ltd. 142 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Cash bonus or Withdrawal Ending balance Investee Other equity profits of Ending balance of impairment Others changes announced to impairment provision issue provision Guangdong Kangyuan 15,167,573.50 Semiconductor Co., Ltd. Chongqing Kangyiqing 712,844.91 Technology Co., Ltd. Shenzhen Kangying Semiconductor Technology 16,296,513.69 Co., Ltd. KK Smartech Limited 1,441,263.59 Shenzhen Konka Electrical 10,732,484.69 Appliances Co., Ltd. Heifei KONSEMI Storage 195,995,798.32 Technology Co., Ltd. Sichuan Chengrui Real Estate 43,120,000.00 Co., Ltd. Konka Industrial Development 45,000,000.00 (Wuhan) Co., Ltd. Total 135,296,760.09 7,181,193.60 6,273,716,368.75 342,144,975.19 143 Konka Group Co., Ltd. Interim Report 2022 14. Investment in Other Equity Instruments (1) Investment in Other Equity Instruments Item Ending balance Opening balance Shenzhen Tianyilian Science & Technology Co., Ltd. Shenzhen Adopt Network Co., Ltd. Beijing Huyu Digital Technology Co., Ltd. 5,901,121.80 5,901,121.80 Feihong Electronics Co., Ltd. ZAEFI Shenzhen Chuangce Investment Development Co., Ltd. Shanlian Information Technology Engineering Center 1,860,809.20 1,860,809.20 Shenzhen CIU Science & Technology Co., Ltd. 953,000.00 953,000.00 Shenzhen Digital TV National Engineering Laboratory Co., Ltd. 7,726,405.16 7,726,405.16 Shanghai National Engineering Research Center of Digital TV Co., Ltd. 2,400,000.00 2,400,000.00 Bohu UHD 5,000,001.00 5,000,001.00 Total 23,841,337.16 23,841,337.16 (2) Investment in Non-trading Equity Instruments in the Reporting Period 144 Konka Group Co., Ltd. Interim Report 2022 Reason for other Amount of other Reason for assigning to Dividend comprehensive comprehensive measure in fair value of income Accumulati Accumulative income Item income which changes included recognized ve gains losses transferred to transferred to other comprehensive this year retained retained earnings income earnings Shenzhen Tianyilian Science & Long-term holding based 4,800,000.00 Technology Co., Ltd. on strategic purpose Long-term holding based Shenzhen Adopt Network Co., Ltd. 5,750,000.00 on strategic purpose Beijing Huyu Digital Technology Long-term holding based 98,878.20 Co., Ltd. on strategic purpose Long-term holding based Feihong Electronics Co., Ltd. 1,300,000.00 on strategic purpose Long-term holding based ZAEFI 100,000.00 on strategic purpose Shenzhen Chuangce Investment Long-term holding based 485,000.00 Development Co., Ltd. on strategic purpose Shanlian Information Technology Long-term holding based 3,139,190.80 Engineering Center on strategic purpose Shenzhen CIU Science & Long-term holding based 200,000.00 Technology Co., Ltd. on strategic purpose Shenzhen Digital TV National 1,273,594.84 Long-term holding based 145 Konka Group Co., Ltd. Interim Report 2022 Reason for other Amount of other Reason for assigning to Dividend comprehensive comprehensive measure in fair value of income Accumulati Accumulative income Item income which changes included recognized ve gains losses transferred to transferred to other comprehensive this year retained retained earnings income earnings Engineering Laboratory Co., Ltd. on strategic purpose Shanghai National Engineering Long-term holding based Research Center of Digital TV Co., on strategic purpose Ltd. Long-term holding based Bohu UHD on strategic purpose Total 17,146,663.84 146 Konka Group Co., Ltd. Interim Report 2022 15. Other Non-current Financial Assets Item Ending balance Opening balance China Asset Management-Jiayi Overseas Designated 200,326,093.02 200,326,093.02 Plan Yibin OCT San gian g Properties Co., Ltd. 200,000,000.00 200,000,000.00 Yili Ecological Restoration Co., Ltd. 90,000,000.00 90,000,000.00 Kunshan Xinjia Emerging Industry Equity Investment 183,220,392.92 88,186,078.16 Fund Partnership (Limited Partnership) Tongxiang Wuzhen Jiayu Digital Economy Industry 198,266,889.53 118,266,889.53 Equity Investment Partnership (Limited Partnership) Yibin Kanghui Electronic Information Industry Equity 104,185,495.56 116,086,430.82 Investment Partnership (Limited Partnership) Chuzhou Jiachen Information Technology Consulting 59,700,130.13 52,200,130.13 Service Partnership (Limited Partnership) Yancheng Kangyan Information Industry Investment 179,245,424.89 225,680,330.93 Partnership (Limited Partnership) Chongqing Kangxin Equity Investment Fund Limited 148,132,905.61 100,882,805.61 Partnership (Limited Partnership) Shenzhen Kanghuijia Technology Co., Ltd. 9,273.31 9,273.31 Subtotal of equity investments 1,363,086,604.97 1,191,638,031.51 Chuzhou Huike Smart Household Appliances Industry 864,706,665.04 890,768,440.22 Investment Partnership (Limited Partnership) Ningbo Yuanqing No. 9 Investment Partnership 148,855,198.11 134,671,492.89 Shenzhen Beihu Technology Partnership (Limited 58,000,000.00 58,000,000.00 Partnership) Xi'an Bihui Enterprise Management Consulting 7,163,411.30 Partnership (Limited Partnership) Henan Chuang xing Enterprise Management Center 18,283,639.06 18,283,639.06 (Limited Partnership) Subtotal of debt investments 1,097,008,913.51 1,101,723,572.17 Total 2,460,095,518.48 2,293,361,603.68 16. Investment Properties (1) Investment Properties Measured at Cost Item Houses, buildings and lands Total I. Original carrying value 1. Beginning balance 871,572,633.64 871,572,633.64 2. Increase in the period 8,531,405.75 8,531,405.75 (1) Outsourcing 8,531,405.75 8,531,405.75 (2) Fixed assets\Construction 147 Konka Group Co., Ltd. Interim Report 2022 Item Houses, buildings and lands Total in progress\Transfer of intangible assets 3. Decrease in the period (1) Disposal (2) Other transfer out 4. Ending balance 880,104,039.39 880,104,039.39 II. The accumulative depreciation and accumulative amortization 1. Beginning balance 95,047,572.10 95,047,572.10 2. Increase in the period 10,195,579.58 10,195,579.58 (1) Provision or amortization 10,195,579.58 10,195,579.58 3. Decrease in the period (1) Disposal (2) Other transfer out 4. Ending balance 105,243,151.68 105,243,151.68 III. Depreciation reserves 1. Beginning balance 2. Increase in the period (1) Withdrawal 3. Decrease in the period (1) Disposal (2) Other transfer out 4. Ending balance IV. Carrying value 1. Ending carrying value 774,860,887.71 774,860,887.71 2. Beginning carrying value 776,525,061.54 776,525,061.54 (2) Investment properties measured at fair value There were no investment properties measured at fair value of the Company. (3) Investment properties in the process of title certificate handling 148 Konka Group Co., Ltd. Interim Report 2022 Item Carrying value Reason Konka Standard Electronic Settlement of the project is Product Plants Project in underway, and the certificate 267,441,842.65 Sunning can be handled only after the settlement Total 267,441,842.65 17. Fixed Assets Item Ending carrying value Opening carrying value Fixed Assets 3,960,662,993.10 4,010,295,277.14 Fixed assets pending for disposal Total 3,960,662,993.10 4,010,295,277.14 149 Konka Group Co., Ltd. Interim Report 2022 17.1 Fixed Assets (1) List of Fixed Assets Houses and Machinery Electronic Transportation Item Other machinery Total buildings equipment equipment equipment I. Original carrying value 1. Opening balance 2,529,405,574.18 2,966,454,406.17 240,354,786.94 59,322,549.91 351,086,303.85 6,146,623,621.05 2. Increased amount of 554,837.61 139,199,350.07 15,476,408.96 940,240.50 7,680,391.78 163,851,228.92 the period (1) Purchase 554,837.61 90,478,956.65 11,492,772.94 940,240.50 6,861,763.42 110,328,571.12 (2) Transfer from 48,715,641.21 3,958,811.75 818,628.36 53,493,081.32 construction in progress (3) Increase through consolidation (4) Other transfer-in 4,752.21 24,824.27 29,576.48 3. Decreased amount of 31,225,252.01 13,536,766.23 1,183,135.47 3,159,092.85 49,104,246.56 the period (1) Disposal or scrap 31,223,452.01 3,070,738.72 826,996.62 1,903,957.35 37,025,144.70 (2) Decrease for loss of 10,466,027.51 356,138.85 10,822,166.36 controlling right (3) Other decreases 1,800.00 1,255,135.50 1,256,935.50 4. Ending balance 2,529,960,411.79 3,074,428,504.23 242,294,429.67 59,079,654.94 355,607,602.78 6,261,370,603.41 150 Konka Group Co., Ltd. Interim Report 2022 Houses and Machinery Electronic Transportation Item Other machinery Total buildings equipment equipment equipment II. Accumulative depreciation 1. Opening balance 593,988,005.87 1,083,045,070.75 157,322,088.50 40,593,276.19 210,886,326.73 2,085,834,768.04 2. Increased amount of 42,245,682.55 128,024,562.48 9,455,863.91 2,677,542.74 17,847,865.27 200,251,516.95 the period (1) Withdrawal 42,245,682.55 128,024,562.48 9,455,863.91 2,677,542.74 17,847,865.27 200,251,516.95 (2) Increase through consolidation (3) Other increase 3. Decreased amount of 26,838,792.02 6,347,929.60 901,301.09 1,455,498.45 35,543,521.16 the period (1) Disposal or scrap 26,838,792.02 2,739,973.81 709,579.66 1,455,498.45 31,743,843.94 (2) Decrease for loss of 3,607,955.79 191,721.43 3,799,677.22 controlling right (3) Other decreases 4. Ending balance 636,233,688.42 1,184,230,841.21 160,430,022.81 42,369,517.84 227,278,693.55 2,250,542,763.83 III. Impairment provision 1. Opening balance 1,247,805.91 42,710,420.48 638,396.94 820,770.14 5,076,182.40 50,493,575.87 2. Increased amount of the period 151 Konka Group Co., Ltd. Interim Report 2022 Houses and Machinery Electronic Transportation Item Other machinery Total buildings equipment equipment equipment (1) Withdrawal 3. Decreased amount of 328,729.39 328,729.39 the period (1) Disposal or scrap 328,729.39 328,729.39 (2) Other decrease 4. Ending balance 1,247,805.91 42,381,691.09 638,396.94 820,770.14 5,076,182.40 50,164,846.48 IV. Carrying value 1. Ending carrying 1,892,478,917.46 1,847,815,971.93 81,226,009.92 15,889,366.96 123,252,726.83 3,960,662,993.10 value 2. Opening carrying 1,934,169,762.40 1,840,698,914.94 82,394,301.50 17,908,503.58 135,123,794.72 4,010,295,277.14 value 152 Konka Group Co., Ltd. Interim Report 2022 (2) List of Temporarily Idle Fixed Assets Original Accumulated Impairment Item Carrying value carrying value depreciation provision Machinery 26,665,441.34 15,169,018.99 1,540,311.51 9,956,110.84 equipment Electronic 5,783,766.22 4,605,666.17 1,704.25 1,176,395.80 equipment Transportation 1,031,130.24 631,767.99 399,362.25 equipment Houses and 449,070.15 218,921.63 230,148.52 buildings Other machinery 937,012.55 796,762.90 26,675.22 113,574.43 Total 34,866,420.50 21,422,137.68 1,568,690.98 11,875,591.84 (3) Fixed Assets Leased out from Operation Lease Item Ending carrying value Electronic equipment 1,015,317.27 Machinery equipment 18,888,747.25 Other machinery 675,076.11 Transportation equipment 120,877.43 Total 20,700,018.06 (4) Details of Fixed Assets Failed to Accomplish Certification of Property Imp airm Original Accumulated Net carrying Item ent Reason carrying value depreciation value prov ision Ankang's Being 601,722,965.12 12,757,162.38 588,965,802.74 plants handled Bokang's phase II plants on the Being second and 33,584,624.73 1,511,308.11 32,073,316.62 handled third floors for printed boards 153 Konka Group Co., Ltd. Interim Report 2022 Imp airm Original Accumulated Net carrying Item ent Reason carrying value depreciation value prov ision Jingyuan Being Building 7,700,000.00 3,984,736.14 3,715,263.86 handled property Yikang Being Building 76,610,752.33 39,490,429.63 37,120,322.70 handled property Total 719,618,342.18 57,743,636.26 661,874,705.92 (5) Fixed Assets with Restricted Ownership or Use Right Item Ending carrying value Reason for restriction Housing and buildings of 147,633,213.09 Mortgaged for billing Anhui Tong giường Machinery equipment of 52,519,955.06 Financing lease mortgage Jiangxi Konka Machinery equipment of 107,428,880.84 Finance lease mortgage Xinfeng Microcrystalline Housing and buildings of 88,015,544.30 Mortgage loan Frestec Refrigeration Buildings of Konka Group 77,229,221.63 Mortgage loan Housing and buildings of 35,852,318.78 Mortgage loan XingDa HongYe Anhui Konka's buildings 620,841,156.45 Mortgage loan Machinery equipment of 18,874,840.71 Finance lease mortgage Xingda Hongye Machinery equipment of 10,232,197.90 Finance lease mortgage Boluo Konka Precision Smart machinery equipment and other equipment of 39,453,997.39 Mortgage loan Jiangsu Konka Total 1,198,081,326.15 18. Construction in progress Item Ending balance Opening balance 154 Konka Group Co., Ltd. Interim Report 2022 Item Ending balance Opening balance Construction in progress 1,781,601,493.64 1,490,777,831.39 Total 1,781,601,493.64 1,490,777,831.39 155 Konka Group Co., Ltd. Interim Report 2022 18.1. Construction in Progress (1) List of Construction in Progress Ending balance Opening balance Item Impairment Impairment Carrying balance Carrying value Carrying balance Carrying value provision provision Infrastructure Project of Chongqing Konka Semiconductor 373,732,053.92 373,732,053.92 319,259,613.46 319,259,613.46 Optoelectronics Research Institute (Part I, Part II and Part III) Guangming Project 317,212,905.91 317,212,905.91 282,501,390.70 282,501,390.70 Jiangxi High-permeability 246,576,748.57 246,576,748.57 246,576,748.57 246,576,748.57 Crystalization Kiln Dongguan Konka New 273,664,531.39 273,664,531.39 163,155,903.72 163,155,903.72 Industrial Park Construction of Suining Electronic Industrial Park 127,628,772.27 127,628,772.27 112,187,404.92 112,187,404.92 Workshops R&D equipment construction 27,876,511.11 27,876,511.11 26,273,554.58 26,273,554.58 project of Chongqing 156 Konka Group Co., Ltd. Interim Report 2022 Ending balance Opening balance Item Impairment Impairment Carrying balance Carrying value Carrying balance Carrying value provision provision Optoelectronic Technology Research Institute Medical engineering project 94,708,620.41 94,708,620.41 26,471,040.49 26,471,040.49 of Yibin Kangrun Other projects 320,528,936.27 327,586.21 320,201,350.06 314,679,761.16 327,586.21 314,352,174.95 Total 1,781,929,079.85 327,586.21 1,781,601,493.64 1,491,105,417.60 327,586.21 1,490,777,831.39 (2) Changes of Significant Construction in Progress this period Decrease in this period Name of item Opening balance Increase in this period Transferred to long- Ending balance Other decrease term assets Infrastructure Project of Chongqing Konka Semiconductor 319,259,613.46 54,472,440.46 373,732,053.92 Optoelectronics Research Institute (Part I, Part II and Part III) Guangming Project 282,501,390.70 34,711,515.21 317,212,905.91 Jiangxi High-permeability 246,576,748.57 246,576,748.57 Crystalization Kiln Dongguan Konka New Industrial Park 163,155,903.72 110,508,627.67 273,664,531.39 157 Konka Group Co., Ltd. Interim Report 2022 Decrease in this period Name of item Opening balance Increase in this period Transferred to long- Ending balance Other decrease term assets Construction of Suining Electronic 112,187,404.92 16,582,875.96 1,141,508.61 127,628,772.27 Industrial Park Workshops R&D equipment construction project of Chongqing Optoelectronic 26,273,554.58 24,028,303.89 22,419,073.78 6,273.58 27,876,511.11 Technology Research Institute Medical engineering project of Yibin 26,471,040.49 68,237,579.92 94,708,620.41 Kangrun Total 1,176,425,656.44 308,541,343.11 22,419,073.78 1,147,782.19 1,461,400,143.58 (Continued) Proportion Of which: the Accumulated Capitalization estimated of the amount of the Estimated number Engineering amount of rate of the Name of item project capitalized Capital resources (RMB100 million) Schedule (%) interest interests of the accumulative interests of the capitalization period (%) input (%) period Infrastructure Project of Chongqing Konka Semiconductor 7.16 52.20 52.20 Self-owned fund Optoelectronics Research Institute (Part 158 Konka Group Co., Ltd. Interim Report 2022 Proportion Of which: the Accumulated Capitalization estimated of the amount of the Estimated number Engineering amount of rate of the Name of item project capitalized Capital resources (RMB100 million) Schedule (%) interest interests of the accumulative interests of the capitalization period (%) input (%) period I, Part II and Part III) Guangming Project Self-owned fund 5.33 59.66 59.66 15,576,085.78 6,292,175.31 7.90 and project loans Jiangxi High- Self-owned fund permeability 3.40 72.52 72.52 32,249,994.16 and bank financing Crystalization Kiln Dongguan Konka New Self-owned fund 3.90 70.17 70.17 9,621,050.14 3,848,525.92 4.80 Industrial Park and bank financing Construction of Suining Electronic 7.04 47.82 47.82 Self-owned fund Industrial Park Workshops R&D equipment construction project of Chongqing 7.08 87.55 87.55 Self-owned fund Optoelectronic Technology Research Institute 159 Konka Group Co., Ltd. Interim Report 2022 Proportion Of which: the Accumulated Capitalization estimated of the amount of the Estimated number Engineering amount of rate of the Name of item project capitalized Capital resources (RMB100 million) Schedule (%) interest interests of the accumulative interests of the capitalization period (%) input (%) period Medical engineering Self-owned fund project of Yibin 2.17 43.64 10.18 3,702.78 3,702.78 4.30 and bank financing Kangrun Total 57,450,832.86 10,144,404.01 160 Konka Group Co., Ltd. Interim Report 2022 19. Right-of-use assets Houses and Electronic Transportatio Item Total buildings equipment n equipment I. Original carrying value 1. Opening balance 114,397,549.47 310,725.66 832,266.36 115,540,541.49 2. Increased 27,756,971.83 27,756,971.83 amount this period (1) Rent 27,756,971.83 27,756,971.83 (2) Others 3. Decreased 2,294,543.18 832,266.36 3,126,809.54 amount this period (1) Decrease for loss of controlling 887,522.59 887,522.59 right (2) Others 1,407,020.59 832,266.36 2,239,286.95 4. Ending balance 139,859,978.12 310,725.66 140,170,703.78 II. Accumulative depreciation 1. Opening balance 43,734,529.28 31,072.56 564,524.28 44,330,126.12 2. Increased 28,358,861.38 31,072.56 267,742.08 28,657,676.02 amount this period (1) Withdrawal 28,358,861.38 31,072.56 267,742.08 28,657,676.02 (2) Others 3. Decreased 1,271,967.98 832,266.36 2,104,234.34 amount this period (1) Decrease for loss of controlling 443,761.31 443,761.31 right (2) Others 828,206.67 832,266.36 1,660,473.03 4. Ending balance 70,821,422.68 62,145.12 70,883,567.80 III. Impairment provision 1. Opening balance 2. Increased amount this period 161 Konka Group Co., Ltd. Interim Report 2022 Houses and Electronic Transportatio Item Total buildings equipment n equipment (1) Withdrawal 3. Decreased amount this period (1) Disposal 4. Ending balance IV. Carrying value 1. Ending carrying 69,038,555.44 248,580.54 69,287,135.98 value 2. Opening 70,663,020.19 279,653.10 267,742.08 71,210,415.37 carrying value 162 Konka Group Co., Ltd. Interim Report 2022 20. Intangible Assets (1) List of intangible assets Intellectual property Right to use Item Land use right Trademark Patent and Franchise Total software and Subtotal right know-how rights others I. Original carrying value 1. Opening 927,878,747.71 75,609,671.41 163,217,317.78 128,853,938.95 367,680,928.14 1,295,559,675.85 balance 2. Increased amount of the 12,171,519.15 8,969,810.89 8,969,810.89 21,141,330.04 period (1) Purchase 12,171,519.15 7,490,782.69 7,490,782.69 19,662,301.84 (2) Transfer from 1,479,028.20 1,479,028.20 1,479,028.20 construction in progress (3) Transfer from R&D (4) Increase 163 Konka Group Co., Ltd. Interim Report 2022 Intellectual property Right to use Item Land use right Trademark Patent and Franchise Total software and Subtotal right know-how rights others through consolidation (5) Other reasons 3. Decreased amount of the 15,000,000.00 309,734.51 15,309,734.51 15,309,734.51 period (1) Disposal (2) Decrease for loss of 15,000,000.00 309,734.51 15,309,734.51 15,309,734.51 controlling right (3) Decrease for other reasons 4. Ending 940,050,266.86 75,609,671.41 148,217,317.78 137,514,015.33 361,341,004.52 1,301,391,271.38 balance II. Accumulated 164 Konka Group Co., Ltd. Interim Report 2022 Intellectual property Right to use Item Land use right Trademark Patent and Franchise Total software and Subtotal right know-how rights others amortization 1. Opening 83,549,162.11 17,998,848.90 108,112,881.20 68,896,878.23 195,008,608.33 278,557,770.44 balance 2. Increased amount of the 10,877,110.38 2,293,522.69 2,672,123.29 7,111,970.33 12,077,616.31 22,954,726.69 period (1) 10,877,110.38 2,293,522.69 2,672,123.29 7,111,970.33 12,077,616.31 22,954,726.69 Withdrawal (2) Other increases 3. Decreased amount of the 12,916,666.68 73,930.67 12,990,597.35 12,990,597.35 period (1) Disposal (2) Decrease for loss of 12,916,666.68 73,930.67 12,990,597.35 12,990,597.35 controlling right (3) Decrease 165 Konka Group Co., Ltd. Interim Report 2022 Intellectual property Right to use Item Land use right Trademark Patent and Franchise Total software and Subtotal right know-how rights others for other reasons 4. Ending 94,426,272.49 20,292,371.59 97,868,337.81 75,934,917.89 194,095,627.29 288,521,899.78 balance III. Impairment provision 1. Opening 41,705,989.33 41,705,989.33 41,705,989.33 balance 2. Increased amount of the period (1) Withdrawal (2) Business Combination Increase 3. Decreased amount of the 166 Konka Group Co., Ltd. Interim Report 2022 Intellectual property Right to use Item Land use right Trademark Patent and Franchise Total software and Subtotal right know-how rights others period (1) Disposal (2) Decrease for loss of controlling right 4. Ending 41,705,989.33 41,705,989.33 41,705,989.33 balance IV. Carrying value 1. Ending carrying 845,623,994.37 55,317,299.82 8,642,990.64 61,579,097.44 125,539,387.90 971,163,382.27 value 2. Opening carrying 844,329,585.60 57,610,822.51 13,398,447.25 59,957,060.72 130,966,330.48 975,295,916.08 value 167 Konka Group Co., Ltd. Interim Report 2022 (2) Land Use Right with Certificate of Title Uncompleted Item Carrying value Reason Land use right of the subsidiary 5,071,349.33 Being handled Nano-Grystallized Glass (3) Significant Intangible Assets Remaining amortization period Item Ending carrying value (year) Land usage right of Fenggang 191,936,448.67 47.17 Konka Intelligent Industrial Park Land of Frestec Smart Home 93,164,251.54 48.25 Industrial Park Land usage right of Frestec 66,764,392.50 34.25 Refrigeration Land use right of Konka Huanjia 63,856,832.12 47.00 Land use right of the semiconductor & optoelectronics 59,884,651.52 47.17 industrial park (4) Intangible Assets with Restricted Ownership or Using Right Item Ending carrying value Reason for restriction Land use right of Dongguan Mortgage loan 191,936,448.67 Konka Land use right of Anhui Konka 55,673,956.00 Mortgage loan Land usage right of Frestec Mortgage loan 66,764,392.50 Refrigeration Land use right of Anhui Mortgaged for billing 18,188,977.93 Tong giường Land use right of Jiangsu Konka 14,453,262.78 Mortgage loan Land usage right of XingDa Mortgage loan 13,815,148.22 HongYe Land usage right of Jiangxi Konka Original shareholder guarantee 10,134,593.27 mortgage Land use right of Konka Mortgage loan 5,612,493.83 Guangming Total 376,579,273.20 168 Konka Group Co., Ltd. Interim Report 2022 21. Development Expenses Ending Increase Decrease balance Tran sferr Recog ed Opening O nized into O Item Internal balance th as the th development er intang curr er costs s ible ent s assets profi t or loss Performance improvement project of 13,635,816.63 693,019.26 14,328,835.89 MINI & MICRO LED Self- development 3,234,494.07 3,618,937.32 6,853,431.39 of chips Total 16,870,310.70 4,311,956.58 21,182,267.28 22. Goodwill (1) Original Carrying Value of Goodwill Increase Decrease Formed Name of Opening due to Ot Ot the Ending balance balance business he Disposal her investees combinati rs s on Jiangxi 340,111,933.01 340,111,933.01 Konka XingDa 44,156,682.25 44,156,682.25 HongYe Total 384,268,615.26 384,268,615.26 (2) Provisions for Goodwill Impairment 169 Konka Group Co., Ltd. Interim Report 2022 Name of Increase Decrease Opening the Other Dispos Oth Ending balance balance Provision investees s al ers Jiangxi 340,111,933.01 340,111,933.01 Konka XingDa 21,959,947.14 21,959,947.14 HongYe Total 362,071,880.15 362,071,880.15 (3) Information on the Assets Groups or Combination of Assets Groups which Goodwill Belongs to The asset group or combination of asset groups in which the goodwill is located is the composition of all main business operating tangible assets and identifiable intangible assets (excluding working capital and non-operating assets) reflected in the balance sheet of the corresponding subsidiary and related to goodwill Asset group. As of 30 June 2022, there were no specific signs of impairment during the reporting period, and no provision for impairment was required. 23. Long-term Deferred Expenses Other Beginning Amortization Item Increased decreased Ending balance balance amount amount Renov ation 236,571,769.59 30,482,087.54 18,423,669.96 799,399.90 247,830,787.27 costs Shopp e 20,710,094.41 9,309,544.49 10,669,985.12 151,251.17 19,198,402.61 expens e Others 40,215,519.39 26,899,124.53 11,795,484.67 3,113,715.43 52,205,443.82 Total 297,497,383.39 66,690,756.56 40,889,139.75 4,064,366.50 319,234,633.70 24. Deferred Income Tax Assets/Deferred Income Tax Liabilities (1) Deferred Income Tax Assets without Offset Item Ending balance Beginning balance 170 Konka Group Co., Ltd. Interim Report 2022 Deferred Deductible Deductible Deferred income income tax temporary temporary tax liabilities liabilities difference difference assets assets Deductible 2,135,882,022.03 414,952,230.90 1,662,487,029.88 294,364,103.95 losses Assets impairment 1,533,384,176.11 348,864,883.98 1,495,008,640.79 341,517,549.45 provision Deferred 51,456,483.86 12,807,870.97 54,518,127.50 13,573,281.87 Income Accrued 181,382,754.97 36,460,801.61 211,674,351.84 47,600,301.64 expenses Unrealized internal sales 74,633,538.20 17,110,776.24 34,369,797.29 8,592,449.32 profits Others 102,367,469.24 24,937,571.58 95,608,084.94 19,668,038.87 Total 4,079,106,444.41 855,134,135.28 3,553,666,032.24 725,315,725.10 (2) Lists of Deferred Income Tax Liabilities without Offset Ending balance Beginning balance Deferred Deferred Taxable Taxable Item income tax income tax temporary temporary liabilities liabilities difference difference Liability Liability Estimated added value of assets not 206,301,023.34 43,885,643.01 225,287,542.61 46,262,753.72 under the same control Prepaid interest 68,993,424.86 17,248,356.21 51,003,370.16 12,750,842.54 Accelerated depreciation of 3,664,731.64 765,257.91 6,990,324.63 1,596,656.16 fixed assets Others 71,047,225.75 17,278,976.68 65,137,318.19 16,284,329.55 Total 350,006,405.59 79,178,233.81 348,418,555.59 76,894,581.97 (3) List of Unrecognized Deferred Income Tax Assets Item Ending balance Beginning balance Deductible losses 2,645,130,439.00 2,210,991,564.05 171 Konka Group Co., Ltd. Interim Report 2022 Deductible temporary 2,020,657,733.61 2,024,354,413.51 difference Total 4,665,788,172.61 4,235,345,977.56 (4) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years Year Ending amount Remarks 2022 337,945,143.94 2023 145,560,403.37 2024 154,406,161.97 2025 589,213,126.47 2026 416,983,845.18 2027 and following years 1,001,021,758.07 Total 2,645,130,439.00 25. Other Non-current Assets Ending balance Item Impairment Carrying balance Carrying value provision Prepayment for 1,029,317,896.04 1,029,317,896.04 land-purchase Prepayment for construction, 76,955,452.02 76,955,452.02 equipment and other long-term assets Entrusted loans Construction of government projects Total 1,106,273,348.06 1,106,273,348.06 (Continued) Opening balance Item Impairment Carrying balance Carrying value provision Prepayment for 2,584,957,360.50 2,584,957,360.50 land-purchase Prepayment for 63,573,129.62 63,573,129.62 construction, 172 Konka Group Co., Ltd. Interim Report 2022 Opening balance Item Impairment Carrying balance Carrying value provision equipment and other long-term assets Entrusted loans Construction of government projects Total 2,648,530,490.12 2,648,530,490.12 26. Short-term Borrowings (1) Category of Short-term Borrowings Item Ending balance Opening balance Note Credit loan 8,024,477,565.64 7,178,420,980.60 Guarantee loan 1,633,418,300.71 2,382,534,766.48 a)b)c)d)e)f)g) Mortgage loan 432,299,020.24 359,719,374.00 h)i)j)k)l) Total 10,090,194,886.59 9,920,675,121.08 a) The Company provides joint and several liability guarantee for the short-term borrowings totaling RMB839,402,882.13 to its subsidiaries Anhui Konka, Sichuan Konka, Anhui Tong giường, Electronics Technology, Jiangxi Konka, Jiangxi High-permeability Substrate, Xinfeng Microcrystalline, Liaoyang Kangshun, Yibin Smart and Kowin Memory (Shenzhen). b) The Company has obtained short-term borrowings amounting to RMB373,333.33 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. c) The Company's subsidiary Konka Ventures has obtained short-term borrowings amounting to RMB600,000.00 from Shenzhen Technology Sub-branch of Bank of Hangzhou Co., Ltd., for which Shenzhen High-tech Investment and Financing Guarantee Co., Ltd. provides guarantee. d) The Company's subsidiary Konka Ventures has obtained short-term borrowings amounting to RMB8,700,000.00 from Shenzhen Futian Sub-branch of Bank of China Co., Ltd., for which Shenzhen SME Financing Guarantee Co., Ltd. provides guarantee. e) The Company's subsidiary Ningbo Khr Electric Appliance Co., Ltd. has obtained short- term borrowings amounting to RMB50,000,000.00 from Cixi Branch of Bank of China Limited, 173 Konka Group Co., Ltd. Interim Report 2022 for which the Company and Korea Electric Group Co., Ltd. provide joint and several liability guarantee at the proportion of 60% and 40% respectively. f) The Company's subsidiary Ningbo Khr Electric Appliance Co., Ltd. has obtained short- term borrowings amounting to RMB30,000,000.00 from Cixi Central District Sub-branch of Bank of Ningbo Co., Ltd., for which the Company and Korea Electric Group Co., Ltd. provide joint and several liability guarantee at a ratio of 3:2. g) The Company's subsidiary Hong Kong Konka has obtained short-term borrowings amounting to USD30,000,000.00 (equivalent to RMB201,342,085.25) from Shenzhen Branch of China Zheshang Bank Co., Ltd., for which the Company provides joint and several liability guarantee. h) The Company's subsidiary XingDa HongYe has obtained short-term borrowings amounting to RMB95,000,000.00 from Zhongshan Fusha Sub-branch of Zhongshan Rural Commercial Bank, for which it provides land use rights of a carrying value of RMB13,815,148.22 and buildings of a carrying value of RMB35,852,318.78 as mortgage and certificates of time deposit of RMB19,800,000.00 as pledge and Hu Zehong provides joint and several liability guarantee. i) The Company's subsidiary Anhui Konka has obtained short-term borrowings amounting to RMB222,194,538.70 from Chuzhou Branch of Bank of China Limited, for which it provides land use rights of a carrying value of RMB37,064,265.33 and fixed assets of a carrying value of RMB428,376,877.37 as mortgage. j) The Company's subsidiary Anhui Konka has obtained short-term borrowings amounting to USD5,595,708.36 (equivalent to RMB37,555,037.09) from Chuzhou Branch of Bank of China Limited, for which it provides land use rights of a carrying value of RMB37,064,265.33 and fixed assets of RMB428,376,877.37 as mortgage. k) The Company's subsidiary Anhui Electrical Appliance has obtained short-term borrowings amounting to RMB37,500,000.00 from Hefei Branch of China ZheShang Bank, for which it provides buildings of a carrying value of RMB88,015,544.30 and land use rights of a carrying value of RMB66,764,392.50 of the Company's subsidiary Henan Frestec Refrigeration Appliance Co., Ltd. as mortgage and the 210 million equities in Henan Frestec Household Appliances Co., Ltd., 123,051,096 equities in Henan Frestec Refrigeration Appliance Co., Ltd. and 668,637,700 equities in Henan Frestec Electrical Appliances Co., Ltd. it holds as pledge. l) The Company's subsidiary Jiangsu Konka Smart has obtained short-term borrowings amounting to RMB40,049,444.45 from Changzhou Branch of China ZheShang Bank Co., Ltd., 174 Konka Group Co., Ltd. Interim Report 2022 for which it provides buildings of a carrying value of RMB39,453,997.39 and land use rights of RMB14,453,262.78 as mortgage. (2) Outstanding Short-term Borrowings Overdue There were no outstanding short-term borrowings overdue at the period-end. 27. Notes Payable Category Ending balance Opening balance Bank’s acceptance bill 918,451,201.16 729,653,866.95 Commercial acceptance bill 214,736,964.29 386,683,091.96 Total 1,133,188,165.45 1,116,336,958.91 28. Accounts Payable (1) List of Accounts Payable Item Ending balance Opening balance Within 1 year 2,192,583,979.74 3,479,614,154.99 1 to 2 years 263,468,989.22 187,662,627.95 2 to 3 years 149,737,886.44 85,964,325.66 Over 3 years 37,635,955.02 31,073,982.81 Total 2,643,426,810.42 3,784,315,091.41 29. Contract Liabilities Item Ending balance Opening balance Sales advances received 711,366,769.35 652,910,408.02 Total 711,366,769.35 652,910,408.02 30. Payroll Payable (1) List of Payroll Payable Beginning Item Increased Decreased Ending balance balance List of Short-term 409,391,936.17 680,192,334.37 908,460,659.21 181,123,611.33 Salary Post- employment benefit- 1,203,348.63 56,054,347.94 56,740,989.17 516,707.40 defined contribution 175 Konka Group Co., Ltd. Interim Report 2022 Beginning Item Increased Decreased Ending balance balance plans Termination 151,800.00 14,577,347.98 14,539,646.36 189,501.62 benefits Current portion of other benefits Total 410,747,084.80 750,824,030.29 979,741,294.74 181,829,820.35 (2) List of Short-term Salary Beginning Item Increased Decreased Ending balance balance Salary, bonus, allowance, 399,855,780.86 589,744,896.85 817,340,366.01 172,260,311.70 subsidy Welfare for 952,201.64 26,765,768.27 22,971,977.88 4,745,992.03 employees Social security 1,256,304.20 26,571,970.63 27,378,449.93 449,824.90 expense Of which: Medical 955,995.78 23,681,976.44 24,466,926.93 171,045.29 insurance premiums Work- related injury 68,005.10 1,791,107.08 1,715,951.17 143,161.01 insurance Maternity 232,303.32 1,098,887.11 1,195,571.83 135,618.60 insurance Housing fund 137,726.03 25,340,998.61 25,432,171.73 46,552.91 Labor union budget and employee 6,703,757.33 5,968,203.83 9,554,898.63 3,117,062.53 education budget Short-term absence with 176 Konka Group Co., Ltd. Interim Report 2022 Beginning Item Increased Decreased Ending balance balance payment Short-term profit sharing plan Others 486,166.11 5,800,496.18 5,782,795.03 503,867.26 Total 409,391,936.17 680,192,334.37 908,460,659.21 181,123,611.33 (3) List of Defined Contribution Plan Beginning Item Increased Decreased Ending balance balance Basic pension 1,109,814.46 54,774,941.89 55,373,982.51 510,773.84 benefits Unemployment 93,534.17 1,279,406.05 1,367,006.66 5,933.56 insurance Annuity Total 1,203,348.63 56,054,347.94 56,740,989.17 516,707.40 31. Taxes Payable Item Ending balance Beginning balance Corporate income tax 152,350,658.23 168,026,929.08 VAT 72,068,785.98 59,692,464.80 Fund for disposing abandoned 22,165,538.00 30,077,111.00 appliances and electronic products Urban maintenance and construction 3,838,220.12 3,696,423.98 tax Education fees and local education 2,855,755.44 2,840,889.56 Surcharge Stamp duty 2,850,389.19 6,255,372.18 Land use tax 9,882,447.76 8,812,080.36 Individual income tax 2,445,096.29 9,602,569.88 Property tax 4,397,205.10 4,287,226.80 Tariff 1,827,436.25 1,962,596.87 Others 487,336.76 571,505.90 Total 275,168,869.12 295,825,170.41 32. Other payables 177 Konka Group Co., Ltd. Interim Report 2022 Item Ending balance Beginning balance Interest payable 88,023,792.80 174,383,177.08 Other Payables 1,304,121,621.07 1,613,794,571.51 Total 1,392,145,413.87 1,788,177,748.59 32.1. Interests payable Item Ending balance Beginning balance Interest on corporate bonds 85,585,555.62 171,218,888.92 Interest on long-term borrowings with interest paid by installment and 340,309.14 principal paid at maturity Interest payable on short-term 2,097,928.04 3,164,288.16 borrowings Total 88,023,792.80 174,383,177.08 32.2 Other payables (1) Listed by Nature of Account Item Ending balance Beginning balance Expenses payable 549,614,012.77 755,393,561.40 Related party borrowing 165,071,148.34 313,104,212.26 Cash deposit and front 249,776,731.65 240,638,514.04 Come-and-go money 162,997,650.90 177,524,073.79 Equity transfer payment 67,482,796.96 67,482,796.96 Advance payment 7,711,699.62 8,282,111.32 Others 101,467,580.83 51,369,301.74 Total 1,304,121,621.07 1,613,794,571.51 (2) Other Significant Payables Aging over One Year Item Unpaid/Un-carry-over Ending balance reason Equity transfer money of Jiangxi Not meet the settlement Konka 61,180,000.00 conditions Total 61,180,000.00 33. Current Portion of Non-current Liabilities Item Ending balance Beginning balance Current portion of long-term 197,476,406.03 2,087,374,444.43 borrowings 178 Konka Group Co., Ltd. Interim Report 2022 Item Ending balance Beginning balance Current portion of long-term payables 155,856,358.05 270,119,697.71 Current portion of bonds payables 700,000,000.00 2,700,000,000.00 Current portion of lease liabilities 18,580,455.76 32,092,127.18 Total 1,071,913,219.84 5,089,586,269.32 34. Other current liabilities Item Ending balance Beginning balance Accounts payable with trade 120,059,255.05 63,854,223.36 acceptance notes Refunds payable 24,448,137.69 30,629,396.14 Tax to be charged off 17,870,862.23 15,258,568.74 Total 162,378,254.97 109,742,188.24 35. Long-term Borrowings (1) Category of Long-term Borrowings Item Ending balance Opening balance Note Guarantee loan 2,721,257,336.32 3,185,072,777.76 a)b)c)d)e)f) Mortgage loan 527,933,682.55 638,086,279.01 g)h)i) Entrusted borrowings 3,469,478,777.76 1,322,271,760.09 j) Credit loan 1,693,252,666.66 471,084,166.66 Pledge loan 31,000,000.00 k)l) Less: Current portion 197,476,406.03 2,087,374,444.43 Total 8,245,446,057.26 3,529,140,539.09 a) The Company has obtained long-term borrowings amounting to RMB1,000,875,000.00 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. b) The Company has obtained long-term borrowings amounting to RMB1,496,661,111.10 from Shenzhen Branch of China Guangfa Bank Co., Ltd., the term of which is from 24 June 2021 to 23 June 2024, and for which the Company's parent company OCT Group provides joint and several liability guarantee at the maximum amount. c) The Company's subsidiary XingDa HongYe has obtained long-term borrowings amounting to RMB52,884,400.00 from Zhuhai Branch of Xiamen International Bank Co., Ltd., 179 Konka Group Co., Ltd. Interim Report 2022 the term of which is from 25 February 2022 to 23 February 2024, and for which the Company provides joint and several liability guarantee at the maximum amount. d) The Company's subsidiary Anhui Konka Electronic Co., Ltd. has obtained long-term borrowings amounting to RMB70,060,245.22 from Chuzhou Plaza Sub-branch of China Construction Bank Co., Ltd., the term of which is from 29 October 2021 to 26 October 2026, and for which the Company provides joint and several liability guarantee. e) The Company's subsidiary Konka Xinyun Semiconductor Technology (Yancheng) Co., Ltd. has obtained long-term borrowings amounting to RMB82,776,580.00 from Yancheng Branch of HuaXia Bank Co., Ltd., the term of which is from 15 September 2021 to 21 August 2026, and for which the Company and its subsidiary Kowin Memory Technology (Shenzhen) Co., Limited provide joint and several liability guarantee at the maximum amount. f) The Company's subsidiary Ningbo Khr has obtained long-term borrowings amounting to RMB18,000,000.00 from Cixi Central District Sub-branch of Bank of Ningbo, the term of which is from 12 August 2021 to 9 September 2022, and for which the Company and Korea Electric Group Co., Ltd. provide joint and several liability guarantee at a ratio of 3:2. g) The Company has obtained long-term borrowings amounting to RMB248,571,405.88 from Guanlan Sub-branch of Shenzhen Rural Commercial Bank Co., Ltd., the term of which is from 22 January 2021 to 22 January 2026, and for which it provides land use rights of a carrying value of RMB5,612,493.83 and investment properties of a carrying value of RMB106,335,030.70 and housing buildings of a carrying value of RMB77,229,221.63 as mortgage. h) The Company's subsidiary Dongguan Konka has obtained long-term borrowings amounting to RMB201,679,803.72 from Dongguan Fenggang Sub-branch of Agricultural Bank of China Co., Ltd., the term of which is from 22 June 2021 to 21 October 2030, and for which it provides land use rights of a carrying value of RMB191,936,448.67 as mortgage and the Company provides joint and several liability guarantee. i) The Company's subsidiary Anhui Konka has obtained long-term borrowings amounting to RMB77,682,472.95 from Chuzhou Branch of Industrial Bank Co., Ltd., of which the term is from 16 July 2021 to 15 July 2031, and for which it provides land use rights of a carrying value of RMB18,609,690.67 and fixed assets of a carrying value of RMB192,464,279.08 as mortgage and the Company provides joint and several liability guarantee. j) The Company's parent company OCT Group has extended entrusted loans amounting to RMB3,469,478,777.76 to the Company through China Merchants Bank Co., Ltd., the term of which is from 9 October 2021 to 25 February 2024. 180 Konka Group Co., Ltd. Interim Report 2022 k) Yibin Kangrun Medical (a subsidiary of the Company) has obtained long-term borrowings amounting to RMB15,500,000.00 from Yibin Sub-Branch of Postal Savings Bank of China Co., Ltd. with the accounts receivable arising from the prospective earnings (RMB595,900,000.00) from a concession contract of medical waste treatment project in Gaoxian County, Yibin City as pledge, and the term thereof is from 30 June 2022 to 15 April 2024. l) Yibin Kangrun Medical (a subsidiary of the Company) has obtained long-term borrowings amounting to RMB15,500,000.00 from Yibin Sub-Branch of Industrial and Commercial Bank of China Co., Ltd. with the accounts receivable arising from the prospective earnings (RMB595,900,000.00) from a concession contract of medical waste treatment project in Gaoxian County, Yibin City as pledge, and the term thereof is from 30 June 2022 to 15 April 2024. 36. Bonds Payable (1) List of Bonds Payable Item Ending balance Beginning balance Non-public offering corporate 2,995,579,140.50 4,993,698,899.30 bonds Less: Bonds payable due 700,000,000.00 2,700,000,000.00 within 1 year Total 2,295,579,140.50 2,293,698,899.30 (2) Changes of Bonds Payable (Excluding Other Financial Instruments Divided as Financial Liabilities such as Preferred Shares and Perpetual Bonds) Bonds Issuing Total par value Duration Issuing amount Beginning balance name date 19Konka0 1,500,000,000.00 2019/1/14 3 years 1,494,750,000.00 1,500,000,000.00 2 (note ①) 19Konka0 500,000,000.00 2019/6/3 3 years 498,250,000.00 499,770,702.34 4 (note ②) 19Konka0 700,000,000.00 2019/7/22 3 years 697,550,000.00 699,614,779.74 6 (note ③) 21Konka0 1,000,000,000.00 2021/1/8 3 years 996,500,000.00 997,798,742.17 1 (note ④) 21Konka0 500,000,000.00 2021/5/21 3 years 498,250,000.00 498,715,932.92 2 (note ⑤) 21Konka0 800,000,000.00 2021/7/9 3 years 797,200,000.00 797,798,742.13 3 (note ⑥) Total 5,000,000,000.00 4,982,500,000.00 4,993,698,899.30 181 Konka Group Co., Ltd. Interim Report 2022 (Continued) Amortization of Issued during the Withdraw interest at Bonds name premium and Reporting Period face value discount 19Konka02 (note ①) 3,125,000.00 19Konka04 (note ②) 9,791,666.69 229,297.66 19Konka06 (note ③) 16,450,000.02 385,220.26 21Konka01 (note ④) 22,300,000.02 550,314.48 21Konka02 (note ⑤) 10,000,000.02 275,157.24 21Konka03 (note ⑥) 15,799,999.98 440,251.56 Total 77,466,666.73 1,880,241.20 (Continued) Repay during the Reporting Bonds name Ending balance Period 19Konka02 (note ①) 1,500,000,000.00 19Konka04 (note ②) 500,000,000.00 19Konka06 (note ③) 700,000,000.00 21Konka01 (note ④) 998,349,056.65 21Konka02 (note ⑤) 498,991,090.16 21Konka03 (note ⑥) 798,238,993.69 Total 2,000,000,000.00 2,995,579,140.50 Note 1: ① On 14 January 2019, the Company issued RMB1.5 billion of private placement corporate bonds with the duration of 3 years, the annual interest rate of 5.00% and the due date of 14 January 2022." 19 Konka 02 "has been fully paid and delisted from the exchange on 14 January 2022. ② On 3 June 2019, the Company issued RMB500 million of private placement corporate bonds with the duration of 3 years, the annual interest rate of 4.70% and the due date of 3 June 2022. "19 Konka 04 "has been fully paid and delisted from the exchange on 3 June 2022. ③ On 22 July 2019, the Company issued RMB700 million of private placement corporate bonds with the duration of 3 years, the annual interest rate of 4.70% and the due date of 22 July 2022. ④ On 8 January 2021, the Company issued RMB1 billion of private placement corporate bonds with the duration of 3 years, the annual interest rate of 4.46% and the due date of 8 January 2024. ⑤ On 21 May 2021, the Company issued RMB500 million of private placement corporate bonds 182 Konka Group Co., Ltd. Interim Report 2022 with the duration of 3 years, the annual interest rate of 4.00% and the due date of 21 May 2024. ⑥ On 9 July 2021, the Company issued RMB800 million of private placement corporate bonds with the duration of 3 years, the annual interest rate of 3.95% and the due date of 9 July 2024. Note 2: OCT Group provided full-amount, unconditional and irrevocable joint and several liability guarantee for the due payment of the private offering of corporate bonds. 37. Lease Liabilities Item Ending balance Beginning balance Lease liabilities 70,197,409.60 74,624,996.81 Less: Lease liabilities due 18,580,455.76 32,092,127.18 within 1 year (see Note VI-33) Total 51,616,953.84 42,532,869.63 38. Long-term Payables Nature Ending balance Opening balance Accrued financing lease outlay 304,774,617.06 434,481,614.08 Less: Unrecognized financing 12,517,744.35 23,674,345.59 expenses Less: Current portion (see Note 155,856,358.05 270,119,697.71 VI-33) Total 136,400,514.66 140,687,570.78 39. Long-term Payroll Payable (1) Classification Item Ending balance Beginning balance Termination benefits-net liabilities of 5,029,726.81 5,111,296.75 defined contribution plans Total 5,029,726.81 5,111,296.75 40. Provisions Item Ending balance Beginning balance Reason for formation Product quality After-sales of 106,147,658.31 106,069,944.34 assurance household appliances Pending litigation 206,591.51 206,591.51 Total 106,354,249.82 106,276,535.85 183 Konka Group Co., Ltd. Interim Report 2022 41. Deferred Income Item Beginning balance Increased Decreased Ending balance Reason for formation Government grants 206,302,424.92 78,247,601.42 22,068,617.74 262,481,408.60 Related to assets/income Total 206,302,424.92 78,247,601.42 22,068,617.74 262,481,408.60 (1) Category of Deferred Income Amount Amount included in Related to included in other List of Government Subsidy Opening balance Increase non-operating Other changes Ending balance assets/ income this income this income period period Plant construction subsidy for Related to Yibin Konka Industrial Park 71,448,167.88 36,489,600.00 913,032.95 107,024,734.93 income Special subsidy for Yibin Project Related to 4,583,311.51 21,088,001.42 25,671,312.93 assets Subsidy for industrial R&D Related to 20,000,000.00 20,000,000.00 assets Returned payments for land by Related to Chongqing Konka 18,720,000.03 196,363.62 18,523,636.41 income Plant decoration subsidy for Yibin Related to Konka Industrial Park 12,952,939.23 719,607.72 12,233,331.51 assets 184 Konka Group Co., Ltd. Interim Report 2022 Amount Amount included in Related to included in other List of Government Subsidy Opening balance Increase non-operating Other changes Ending balance assets/ income this income this income period period Subsidy for high-tech innovation Related to 11,373,198.33 327,491.68 11,045,706.65 and operation in Yancheng assets Related to Other government grants 67,224,807.94 20,670,000.00 11,382,121.77 8,530,000.00 67,982,686.17 assets/ income Total 206,302,424.92 78,247,601.42 13,538,617.74 8,530,000.00 262,481,408.60 185 Konka Group Co., Ltd. Interim Report 2022 42. Other non-current liabilities Item Ending balance Beginning balance Contract liabilities over one 104,610,663.76 85,210,503.30 year Total 85,210,503.30 104,610,663.76 43. Share capital Increase/decrease (+/-) B o Bonus New n Sub Item Beginning balance issue Oth Ending balance shares us tota from ers issued sh l profit ar es Total 2,407,945,408.00 2,407,945,408.00 shares 44. Capital Reserves Item Beginning balance Increased Decreased Ending balance Other capital 234,389,963.10 135,296,760.09 2,854,608.30 366,832,114.89 reserves Total 234,389,963.10 135,296,760.09 2,854,608.30 366,832,114.89 Note: Capital reserves for the current period - other capital reserves increase and decrease due to the main reasons: ② Other capital reserves increased by RMB135,296,760.09 due to the increase in capital and shares by the associated enterprise Econ Technology. ② Other capital reserves decreased by RMB2,854,608.30 due to the disposal of the associated enterprise Guangdong Chutian Dragon Smart Card Co., Ltd. 186 Konka Group Co., Ltd. Interim Report 2022 45. Other Comprehensive Income Reporting Period Less: Less: Recorded in Recorded in other other comprehensi comprehens Less: Attributable to ve income in ive income Inco Attributable to Beginning Income before owners of the Item prior period in prior me non-controlling Ending balance balance taxation in the Company as and period and tax interests after Current Period the parent transferred transferred expe tax after tax in profit or in retained nse loss in the earnings in Current the Current Period Period I. Items that will not be reclassified to profit -6,398,878.20 -6,398,878.20 or loss Changes in fair value of other equity -6,398,878.20 -6,398,878.20 instrument investment Others II. Items that will be -13,937,209.67 4,109,281.36 3,289,330.41 819,950.95 -10,647,879.26 reclassified to profit or 187 Konka Group Co., Ltd. Interim Report 2022 Reporting Period Less: Less: Recorded in Recorded in other other comprehensi comprehens Less: Attributable to ve income in ive income Inco Attributable to Beginning Income before owners of the Item prior period in prior me non-controlling Ending balance balance taxation in the Company as and period and tax interests after Current Period the parent transferred transferred expe tax after tax in profit or in retained nse loss in the earnings in Current the Current Period Period loss Of which: Other comprehensive income that will be -1,215,133.65 -38,929.34 -38,929.34 -1,254,062.99 reclassified to profit or loss under the equity method Differences arising from the translation of -12,722,076.02 4,148,210.70 3,328,259.75 819,950.95 -9,393,816.27 foreign currency 188 Konka Group Co., Ltd. Interim Report 2022 Reporting Period Less: Less: Recorded in Recorded in other other comprehensi comprehens Less: Attributable to ve income in ive income Inco Attributable to Beginning Income before owners of the Item prior period in prior me non-controlling Ending balance balance taxation in the Company as and period and tax interests after Current Period the parent transferred transferred expe tax after tax in profit or in retained nse loss in the earnings in Current the Current Period Period denominated financial statements Total Other Comprehensive -20,336,087.87 4,109,281.36 3,289,330.41 819,950.95 -17,046,757.46 Income 189 Konka Group Co., Ltd. Interim Report 2022 46. Surplus Reserves Item Beginning balance Increased Decreased Ending balance Statutory surplus 1,005,961,774.19 1,005,961,774.19 reserves Discretional surplus 238,218,590.05 238,218,590.05 reserves Total 1,244,180,364.24 1,244,180,364.24 47. Retained Earnings Item Reporting Period Same period of last year Ending balance of last period 5,229,098,788.94 4,595,371,391.63 Add: Total beginning balance of retained earnings before adjustments Of which: change of accounting policy Other adjustment factors Beginning balance of the Reporting 5,229,098,788.94 4,595,371,391.63 Period Add: Net profit attributable to owners of 172,818,438.83 905,352,997.68 the Company as the parent Retained incomes carried forward 1,628,195.00 from other comprehensive income Less: Withdrawal of statutory surplus 32,459,254.57 reserves Withdrawal of discretional surplus reserves Dividend of ordinary shares payable 120,397,270.40 240,794,540.80 Ending balance of this period 5,281,519,957.37 5,229,098,788.94 48. Operating Revenue and Cost of Sales (1) Operating Revenue and Cost of Sales Reporting Period Same period of last year Item Operating revenue Cost of sales Operating revenue Cost of sales Main operation 16,243,380,757.24 16,013,632,913.79 21,412,726,539.67 20,510,002,960.62 s 190 Konka Group Co., Ltd. Interim Report 2022 Item Reporting Period Same period of last year Other operation 652,089,519.57 468,807,708.05 397,435,333.41 307,172,753.16 s Total 16,895,470,276.81 16,482,440,621.84 21,810,161,873.08 20,817,175,713.78 (2) Main Operations (Classified by product) Reporting Period Same period of last year Item Operating revenue Cost of sales Operating revenue Cost of sales Supply chain 10,171,407,159.62 10,120,679,704.92 12,184,495,984.54 12,079,110,369.50 trading business Color TV 2,389,828,778.20 2,418,706,246.97 3,190,601,881.06 3,017,183,364.20 business Environ mental protecti 774,458,509.72 749,206,296.93 2,724,186,133.96 2,439,448,446.23 on business Consum er applianc 1,900,207,771.57 1,711,652,138.98 1,752,194,252.46 1,608,490,566.46 es business PCB 291,397,810.91 280,056,849.29 365,622,811.21 337,306,983.48 business Semi- conduct 50,916,083.90 52,958,914.59 241,973,760.06 229,060,263.71 or business Others 665,164,643.32 680,372,762.11 953,651,716.38 799,402,967.04 Total 16,243,380,757.24 16,013,632,913.79 21,412,726,539.67 20,510,002,960.62 49. Taxes and Surtaxes Item Reporting Period Same period of last year 191 Konka Group Co., Ltd. Interim Report 2022 Item Reporting Period Same period of last year Stamp duty 15,956,693.35 17,210,974.34 Land use tax 13,241,507.04 12,591,947.22 Urban maintenance and 8,149,278.82 5,272,168.22 construction tax Property tax 9,150,456.54 4,521,990.47 Education surcharge 3,669,080.87 2,252,651.83 Local education surcharge 2,445,857.60 1,295,806.68 Water resources fund 228,825.54 98,737.91 Others 443,271.42 1,212,085.27 Total 53,284,971.18 44,456,361.94 50. Selling Expense Item Reporting Period Same period of last year Payroll 159,102,544.06 179,194,691.52 Advertising expense 141,115,130.40 143,443,247.26 Promotional activities 72,748,154.60 93,916,189.20 Warranty fee 79,063,725.82 95,238,254.77 Logistic Fee 30,314,056.31 57,131,056.01 Taxes and fund 26,642,413.92 26,084,857.60 Rental charges 12,385,615.94 13,812,228.32 Business travel charges 7,448,071.22 9,695,834.71 Business entertainment expenses 5,435,508.51 6,473,826.73 Exhibition expenses 1,713,164.44 2,675,578.55 Others 24,257,299.06 39,996,271.80 Total 560,225,684.28 667,662,036.47 51. Administrative Expense Item Reporting Period Same period of last year Payroll 213,795,836.28 172,124,998.88 Depreciation charge 71,715,060.26 55,861,222.66 Intermediary fees 17,693,182.52 24,599,241.61 Business travel charges 3,765,905.28 8,275,347.12 192 Konka Group Co., Ltd. Interim Report 2022 Item Reporting Period Same period of last year Water & electricity fees 5,296,977.22 5,392,545.21 Loss on scraping of inventories 2,086,492.21 2,246,719.29 Others 39,955,230.74 90,553,592.30 Total 354,308,684.51 359,053,667.07 52. R&D Expense Item Reporting Period Same period of last year Salary 119,288,045.71 141,474,094.27 Others 118,060,480.85 143,189,372.99 Total 237,348,526.56 284,663,467.26 53. Finance Costs Item Reporting Period Same period of last year Interest expense 465,576,348.06 488,330,464.76 Less: Interest income 109,353,054.39 78,303,181.42 Add: Exchange loss -114,830,078.08 28,226,971.34 Other 25,722,111.99 21,161,528.03 Total 267,115,327.58 459,415,782.71 54. Other Income Resources Reporting Period Same period of last year Support fund 227,351,711.98 342,585,919.00 Rewards and subsidies 90,960,177.86 116,820,277.53 Transfer of deferred income 13,538,617.74 247,958,151.57 Software tax rebates 7,949,955.87 6,085,265.89 Post subsidies 2,253,703.66 2,426,398.00 Land tax rebates 1,433,605.93 4,728,544.03 L/C export subsidy 249,549.87 91,800.00 Total 343,737,322.91 720,696,356.02 55. Investment Income Item Reporting Period Same period of last year Long-term equity investment income measured by equity 59,402,481.72 19,335,816.88 method 193 Konka Group Co., Ltd. Interim Report 2022 Item Reporting Period Same period of last year Investment income from disposal of long-term equity 406,299,201.96 177,579,605.00 investment Income from remeasurement of residual stock rights at fair 239,092,140.86 68,185,019.88 value after losing control power Interest income from holding of 32,966,971.77 34,566,759.25 debt investments Investment income from disposal of financial assets at 42,739.74 22,577,111.88 fair value through current profit or loss Total 737,803,536.05 322,244,312.89 56. Gain on Changes in Fair Value Sources Reporting Period Same period of last year Financial assets at fair value -638,799.36 40,362,513.73 through profit or loss Total -638,799.36 40,362,513.73 57. Credit Impairment Loss Item Reporting Period Same period of last year Loss on bad debts of notes 7,050,461.27 19,146,640.03 receivable Bad debt losses of accounts -42,299,060.06 -64,007,725.46 receivable Bad debt losses of other -43,359,714.77 -26,531,092.63 receivables Total -78,608,313.56 -71,392,178.06 58. Asset Impairment Loss Item Reporting Period Same period of last year Inventory depreciation loss and contract performance cost -13,309,988.75 -10,573,236.91 impairment loss 194 Konka Group Co., Ltd. Interim Report 2022 Item Reporting Period Same period of last year Contractual asset impairment loss -18,965,495.91 Total -13,309,988.75 -29,538,732.82 59. Asset Disposal Income ( “-” for loss) Amount recorded in the Reporting Same period of Item current non- Period last year recurring profit or loss Incomes from disposal of non-current 12,782,328.52 88,668.35 12,782,328.52 assets Including: incomes from disposal of non-current assets not classified as the 12,782,328.52 88,668.35 12,782,328.52 held-for-sale assets Of which: Fixed assets disposal -75,972.28 88,668.35 -75,972.28 income Right-of-use assets 14,904.57 14,904.57 disposal income Intangible assets disposal 12,843,396.23 12,843,396.23 income Total 12,782,328.52 88,668.35 12,782,328.52 60. Non-operating Income (1) List of Non-operating Income Amount recorded Same Period of in the current Item Reporting Period last year non-recurring profit or loss Insurance indemnity 12,736,400.00 Compensation and penalty income 14,518,135.77 1,884,536.59 14,518,135.77 Government subsidies unrelated to the 200,900.00 200,900.00 normal operation of the Company Non-current assets damage and 364,917.85 237,884.42 364,917.85 retirement gains Gains on debt restructuring 33,184.00 544,827.07 33,184.00 Other 15,375,604.03 6,214,629.71 15,375,604.03 195 Konka Group Co., Ltd. Interim Report 2022 Amount recorded Same Period of in the current Item Reporting Period last year non-recurring profit or loss Total 30,492,741.65 21,618,277.79 30,492,741.65 61. Non-operating Expense Amount recorded into Same Period of the current non- Item Reporting Period last year recurring profit or loss Losses on damage and 829,936.20 437,270.73 829,936.20 scraping of non-current assets Compensation expense 955,320.82 161,680.10 955,320.82 Others 2,075,688.78 6,194,922.31 2,075,688.78 Total 3,860,945.80 6,793,873.14 3,860,945.80 62. Income Tax Expense (1) Lists of Income Tax Expense Item Reporting Period Same period of last year Current income tax expense 38,695,464.05 192,219,793.73 Deferred income tax expense -127,554,328.41 -107,956,525.36 Total -88,858,864.36 84,263,268.37 (2) Adjustment Process of Accounting Profit and Income Tax Expense Item Reporting Period Profit before taxation -30,855,657.48 Current income tax expense accounted at statutory/applicable tax rate -7,713,914.37 Influence of applying different tax rates by subsidiaries -2,192,800.02 Influence of income tax before adjustment -749,229.21 Influence of non-taxable income -103,780,531.28 Influence of not deductable costs, expenses and losses 518,868.07 Influence of deductable loss of unrecognized deferred income tax assets in -22,338,796.65 prior period Influence of deductable temporary difference or deductable losses of 55,552,820.20 196 Konka Group Co., Ltd. Interim Report 2022 Item Reporting Period unrecognized deferred income tax in the Reporting Period Changes in the balance of deferred income tax assets/ liabilities in previous period due to adjustment of tax rate Additional deduction of R&D costs -8,155,281.10 Income tax expense -88,858,864.36 63. Other Comprehensive Income Refer to “Note VI-45. Other Comprehensive Income” for details. 64. Cash Flow Statement (1) Cash Generated from/Used in Other Operating/Investing/Financing Activities 1) Cash Generated from Other Operating Activities Item Reporting Period Same Period of last year Income from government 398,867,359.07 448,099,427.58 subsidy Front money and guarantee 194,816,415.68 279,858,364.93 deposit Intercourse funds 71,915,009.80 164,755,704.28 Interest income from bank 38,460,424.38 37,983,778.15 deposits Others 49,900,426.66 53,936,264.41 Total 753,959,635.59 984,633,539.35 2) Cash payments related to other operating activities Item Reporting Period Same Period of last year Expense for cash payment 608,403,775.17 563,280,960.36 Payment for guarantee deposit, 141,618,948.53 93,768,423.51 cash deposit Payment made on behalf 9,670,660.47 11,499,654.13 Expense for bank handling 2,878,961.21 5,216,732.77 charges Others 120,570,024.96 404,575,413.78 Total 883,142,370.34 1,078,341,184.55 3) Other cash received from investment activities Item Reporting Period Same Period of last year 197 Konka Group Co., Ltd. Interim Report 2022 Item Reporting Period Same Period of last year Recovery of loan at call 2,345,834,176.94 466,367,371.66 Others 39,792,247.45 260,630,141.85 Total 2,385,626,424.39 726,997,513.51 4) Other cash paid for investment activities Item Reporting Period Same Period of last year Payment of loan at call 271,583,749.03 174,930,000.00 Others 25,736,148.70 160,869,856.00 Total 297,319,897.73 335,799,856.00 5) Other cash received from funding activities Item Reporting Period Same Period of last year Receiving loan at call 29,957,440.00 361,338,700.00 Recovery of margin deposit pledged 68,792,633.93 197,949,393.49 Lease-related accounts 34,000,000.00 Others 23,432.92 2,070,691.00 Total 98,773,506.85 595,358,784.49 6) Cash Used in Other Financing Activities Item Reporting Period Same Period of last year Payment of lease-related accounts 155,109,520.16 236,173,947.51 Deposit as margin for pledge 117,654,180.32 161,578,386.94 Returing loan at call 117,768,871.27 29,400,000.00 Financing cost 21,190,465.55 18,501,066.06 Others 1,765,552.03 34,551,700.00 Total 413,488,589.33 480,205,100.51 (2) Supplemental Information for Consolidated Cash Flow Statement Item Reporting Period Same Period of last year 1. Reconciliation of net profit to net cash flows generated from operating activities Net profit 58,003,206.88 90,756,920.24 Add: Provision for impairment of assets 13,309,988.75 29,538,732.82 Credit impairment loss 78,608,313.56 71,392,178.06 198 Konka Group Co., Ltd. Interim Report 2022 Item Reporting Period Same Period of last year Depreciation of fixed assets, oil-gas 210,447,096.53 182,931,196.29 assets, and productive biological assets Depreciation of right-of-use assets 28,657,676.02 22,397,201.61 Amortization of intangible assets 22,954,726.69 38,706,987.41 Amortization of long-term prepaid 40,889,139.75 43,983,314.75 expenses Losses on disposal of fixed assets, intangible assets and other long- -12,782,328.52 -88,668.35 lived assets (gains: negative) Losses on scrap of fixed assets (gains: 465,018.35 199,386.31 negative) Losses on changes in fair value (gains: 638,799.36 -40,362,513.73 negative) Finance costs (gains: negative) 439,621,848.38 449,599,765.91 Investment loss (gains: negative) -737,803,536.05 -322,244,312.89 Decrease in deferred income tax assets -129,818,410.18 -102,340,668.15 (gains: negative) Increase in deferred income tax 2,283,651.84 -5,615,859.48 liabilities ( “-” means decrease) Decrease in inventories (gains: 25,150,562.26 -648,533,766.41 negative) Decrease in accounts receivable generated from operating activities 803,133,784.03 -266,870,721.39 (gains: negative) Increase in accounts payable used in -1,251,480,426.64 -580,252,243.46 operating activities (decrease: negative) Others -13,538,617.74 -247,958,151.57 Net cash flow from operating activities -421,259,506.73 -1,284,761,222.03 2. Significant investing and financing activities without involvement of cash receipts and payments Conversion of debt to capital Convertible corporate bonds matured within 1 Year Fixed asset under finance lease 199 Konka Group Co., Ltd. Interim Report 2022 Item Reporting Period Same Period of last year 3. Net increase/decrease of cash and cash equivalent: Ending balance of cash 5,903,519,802.47 5,159,985,226.06 Less: Opening balance of cash 5,968,347,219.03 4,298,056,113.24 Plus: Ending balance of cash equivalents Less: Opening balance of cash equivalents Net increase in cash and cash equivalents -64,827,416.56 861,929,112.82 (3) Net Cash Paid for Acquisition of Subsidiaries No such cases in the Reporting Period. (4) Net Cash Receive from Disposal of the Subsidiaries Item Amount Cash or cash equivalents received in the Reporting Period from 302,280,000.00 disposal of subsidiaries in the Current Period Of which: Sichuan Chengrui 27,280,000.00 Xi'an Huasheng 220,000,000.00 Wuhan Industrial Development 55,000,000.00 Less: cash and cash equivalents held by subsidiaries on the date of 5,185,649.96 losing control power Of which: Sichuan Chengrui 1,845,348.16 Xi'an Huasheng 8,334.26 Wuhan Industrial Development 3,331,967.54 Add: Cash or cash equivalents received in the Reporting Period from disposal of subsidiaries in the prior period Net cash received from disposal of subsidiaries 297,094,350.04 (5) Cash and Cash Equivalents Item Ending balance Beginning balance Cash 5,903,519,802.47 5,968,347,219.03 Including: Cash on hand 9.41 363.22 Bank deposit on demand 5,903,519,793.06 5,968,346,855.81 Ending balance of cash and cash 5,903,519,802.47 5,968,347,219.03 equivalents 200 Konka Group Co., Ltd. Interim Report 2022 65. Items in the Statement of Changes in Shareholders' Equity There is no “other” amount to adjust the amount at the end of the previous year in this period. 66. Assets with Restricted Ownership or Right to Use Item Ending carrying value Reason for restriction Among them, RMB571,737,827.06 is margin deposit, pledge is used for borrowing or issuing bank acceptance bill, RMB10,764,266.54 is Monetary assets 631,118,593.39 financial supervision account fund; RMB19,800,000.00 is fixed deposit that can not be withdrawn in advance; RMB28,816,499.79 is restricted due to other reasons. Notes receivable 373,073,971.78 The pledge of make out an invoice Investment property 106,335,030.70 Mortgage loan Fixed assets 1,198,081,326.15 Mortgage loan, finance lease mortgage Mortgage loan, mortgage guaranteed by the Intangible assets 376,579,273.20 original shareholder Construction in progress 78,521,756.73 Finance lease mortgage Total 2,763,709,951.95 67. Foreign Currency Monetary Items (1) Foreign Currency Monetary Items Ending foreign Ending balance Item Exchange rate currency balance converted to RMB Monetary assets Of which: USD 77,214,921.83 6.7114 518,220,226.37 EUR 2,730,603.30 7.0084 19,137,160.17 EGP 10,099,414.27 0.3570 3,605,383.45 GBP 1.32 8.1365 10.74 HKD 12,160,142.39 0.8552 10,399,232.17 CAD 6.96 5.2058 36.23 PLN 991,889.37 1.5016 1,489,390.47 Accounts receivable Of which: USD 99,275,413.45 6.7114 666,277,009.83 EUR 23,449.32 7.0084 164,342.21 201 Konka Group Co., Ltd. Interim Report 2022 Ending foreign Ending balance Item Exchange rate currency balance converted to RMB EGP 4,228,915.83 0.3570 1,509,677.96 HKD 34,899,944.11 0.8552 29,846,083.20 AUD 49,764.00 4.6145 229,635.98 Other receivables Of which: USD 114,917,428.94 6.7114 771,256,832.59 EGP 8,000.00 0.3570 2,855.91 HKD 892,319.00 0.8552 763,102.29 YEN 21,400,000.00 0.0491 1,051,510.40 Short-term borrowings Of which: USD 51,764,004.17 6.7114 347,408,937.59 Accounts payable Of which: USD 26,802,690.35 6.7114 179,883,576.01 GBP 4,419.42 8.1365 35,958.61 HKD 4,987,580.96 0.8552 4,265,329.36 Other payables Of which: USD 532,849.98 6.7114 3,576,169.36 EUR 2,751,663.76 7.0084 19,284,760.30 EGP 60,729.10 0.3570 21,679.64 HKD 17,985,625.82 0.8552 15,381,127.35 Interest payable Of which: USD 28,048.58 6.7114 188,245.24 (2) Notes to Overseas Entities The significant overseas entities include Hongdin Trading, Hong Kong Konka, Chain Kingdom Memory Technologies, Kangjietong, Jiali International, Kowin Memory (Hong Kong) and Konka Mobility. 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. 68. Government Subsidy (1) Basic Information on Government Subsidy Amount recorded in Category Amount Listed items the current profit or loss 202 Konka Group Co., Ltd. Interim Report 2022 Amount recorded in Category Amount Listed items the current profit or loss Deferred Industry support funds 263,841,311.98 227,351,711.98 revenue/Other income Deferred Rewards and subsidies 137,702,485.28 90,960,177.86 revenue/Other income Tax rebates on software 7,949,955.87 Other income 7,949,955.87 Land tax rebates 1,434,080.24 Other income 1,433,605.93 Post subsidies 2,417,628.09 Other income 2,253,703.66 Subsidies for L/C exports 249,549.87 Other income 249,549.87 Total 413,595,011.33 330,198,705.17 (2) Return of Government Subsidy No such cases in the Reporting Period. 203 Konka Group Co., Ltd. Interim Report 2022 VII. Changes of Consolidation Scope 1. Disposal of subsidiary The differences of enjoyed net assets share of the Equity subsidiary in Method of Name of the The equity disposal Time of losing Recognition basis for the time of corresponding equity subsidiary disposal price proportio control losing control power consolidated disposal n (%) statements of the disposal price and the disposal investment (RMB’0,000) The rights and obligations related Xi'an 22,000.00 100.00 Transfer 2022-6-27 to the underlying equity have been 12,128.87 Huasheng transferred Wuhan The rights and obligations related Industrial 5,500.00 55.00 Transfer 2022-6-27 to the underlying equity have been 4,865.34 Development transferred The rights and obligations related Sichuan 2,728.00 31.00 Transfer 2022-4-15 to the underlying equity have been 2,123.96 Chengrui transferred (Continued) 204 Konka Group Co., Ltd. Interim Report 2022 Residual Amount of other Carrying value Recognition method equity Fair value of comprehensive of residual Gains or losses from and main assumption proportion residual equity on income related to Name of the equity on the re-measurement of of fair value of on the date the date of losing former subsidiaries subsidiary date of losing residual equity at fair residual equity on the of losing control power transferred into control power value (RMB’0,000) date of losing control control (RMB’0,000) investment profit or (RMB’0,000) power power (%) loss (RMB’0,000) Xi'an Huasheng Wuhan Industrial 45.00 519.27 4,500.00 3,980.73 Evaluated price Development Sichuan 49.00 954.77 4,312.00 3,357.23 Evaluated price Chengrui 205 Konka Group Co., Ltd. Interim Report 2022 2. Changes in Combination Scope for Other Reasons (1) Subsidiaries Established by the Company in H1 2022 Time and Shareholding place of Method of Name Registered capital percentage obtaining obtaining (%) control power Jiangxi Konka High- Newly tech Park 50,000,000.00 100.00 2022-4-27 established Guizhou Konka New Newly Energy 100,000,000.00 98.00 2022-2-11 established Shangrao Konka Newly Electronic Technology established Innovation 30,000,000.00 100.00 2022-4-27 Zhe gian g Konka Newly Electronic 30,000,000.00 100.00 2022-6-20 established Zhe gian g Konka Newly Technology Industry 30,000,000.00 100.00 2022-6-20 established (2) The Company’s Subsidiaries Cancelled and with Distribution of Remaining Assets in H1 2022 Shareholding Liquidation Name Registered capital percentage (%) completion time Shanghai Xinfeng 10,664,000.00 51.00 2022-2-10 Jiangxi Konka 100,000,000.00 70.00 2022-5-25 Industrial Park Ruichang Kangrui 10,000,000.00 70.00 2022-5-25 Real Estate (3) Others ① The Company’s subsidiary Hefei KONSEMI introduced strategic investors, which caused the decrease of the Company’s shareholding proportion to 34.46% and transfer of control power. And it will no longer be included into the consolidation scope. 206 Konka Group Co., Ltd. Interim Report 2022 VIII. Equity in Other Entities 1. Equity in Subsidiary (1) Subsidiaries Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Establishme 1 Guangdong, Guangdong, 100 nt or Electronics Technology Manufacturing industry Shenzhen Shenzhen investment Establishme 2 Anhui Zhilian Anhui, Chuzhou Anhui, Chuzhou e-Commerce 100 nt or investment Establishme 3 Haimen Konka Jiangsu, Nantong Jiangsu, Nantong Trade and services 100 nt or investment Establishme 4 Sichuan, Sichuan, 100 nt or Chengdu Konka Smart Trade and services Chengdu Chengdu investment Establishme 5 Chengdu Konka Sichuan, Sichuan, 100 nt or Manufacturing industry Electronic Chengdu Chengdu investment Establishme 6 Computer, telecommunications and other 100 nt or Nantong Hongdin Jiangsu, Nantong Jiangsu, Nantong electronic equipment manufacturing investment 207 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Establishme 7 Guangdong, Guangdong, Software and information technology 100 nt or Youzhihui Shenzhen Shenzhen services investment Establishme 8 Guangdong, Guangdong, 100 nt or Xiaojia Technology Retail trade Shenzhen Shenzhen investment Establishme 9 Liaoyang Kangshun Liaoyang, Liaoyang, 100 nt or Wholesale Smart Liaoning Liaoning investment Establishme 10 Liaoyang Kangshun Liaoyang, Liaoyang, Comprehensive utilization of renewable 100 nt or Renewable Liaoning Liaoning resources investment Establishme 11 Nanjing Konka Jiangsu, Nanjing Jiangsu, Nanjing Wholesale 100 nt or investment Establishme 12 Chuzhou Konka Anhui, Chuzhou Anhui, Chuzhou Manufacturing industry 94.9 nt or investment Establishme 13 Guangdong, Guangdong, 51 nt or XingDa HongYe Manufacturing industry Zhongshan Zhongshan investment Establishme 14 Konka Circuit Guangdong, Guangdong, Manufacturing industry 100 nt or 208 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Shenzhen Shenzhen investment Establishme 15 Konka Soft Electronic Sichuan, Suining Sichuan, Suining Manufacturing industry 95 nt or investment Establishme 16 Konka Hongye 90.1 nt or Sichuan, Suining Sichuan, Suining Manufacturing industry Electronics investment Establishme 17 Guangdong, Guangdong, 100 nt or Boluo Precision Manufacturing industry Boluo Boluo investment Establishme 18 Guangdong, Guangdong, 100 nt or Boluo Konka Manufacturing industry Boluo Boluo investment Establishme 19 Anhui Tong giường Anhui, Chuzhou Anhui, Chuzhou Manufacturing industry 100 nt or investment Establishme 20 Jiangsu, Jiangsu, 51 nt or Jiangsu Konka Smart Manufacturing industry Changzhou Changzhou investment Establishme 21 Anhui Electrical 51 nt or Anhui, Chuzhou Anhui, Chuzhou Manufacturing industry Appliance investment 209 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Establishme 22 Frestec Refrigeration Henan, Xinxiang Henan, Xinxiang Manufacturing industry 51 nt or investment Establishme 23 Frestec Electrical 51 nt or Henan, Xinxiang Henan, Xinxiang Manufacturing industry Appliances investment Establishme 24 Frestec Household 51 nt or Henan, Xinxiang Henan, Xinxiang Manufacturing industry Appliances investment Establishme 25 Frestec Smart Home Henan, Xinxiang Henan, Xinxiang Manufacturing industry 51 nt or investment Establishme 26 Guangdong, Guangdong, 100 nt or Konka Investment Capital market services Shenzhen Shenzhen investment Establishme 27 Yibin Konka Industrial park development and operation 100 nt or Sichuan, Yibin Sichuan, Yibin Technology Park management investment Establishme 28 Guangdong, Guangdong, 100 nt or Konka Capital Capital market services Shenzhen Shenzhen investment Establishme 29 Konka Suiyong Guangdong, Guangdong, Commercial services 51 nt or 210 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Shenzhen Shenzhen investment Establishme 30 Guangdong, Guangdong, 51 nt or Sheng xing Industrial Commercial services Shenzhen Shenzhen investment Establishme 31 Guangdong, Guangdong, Software and information technology 51 nt or Zhitong Technology Shenzhen Shenzhen services investment Establishme 32 Guangdong, Guangdong, 100 nt or Konka Factoring Insurance agents (non-bank finance) Shenzhen Shenzhen investment Establishme 33 Beijing Konka 100 nt or Beijing Beijing Sale of home appliance Electronic investment Establishme 34 Tianjin Pilot Free Tianjin Pilot Free 100 nt or Konka Leasing Service Industry Trade Zone Trade Zone investment Establishme 35 Suining Konka Industrial Industrial park development and operation 100 nt or Sichuan, Suining Sichuan, Suining Park management investment Suining Electronic Establishme 36 Technological Sichuan, Suining Sichuan, Suining Commercial services 100 nt or investment Innovation 211 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Establishme 37 Shanghai Konka Shanghai Shanghai Real estate 100 nt or investment Establishme 38 Shandong, Shandong, 62.8 nt or Yantai Kangjin Real estate Yantai Yantai investment Establishme 39 Guangdong, Guangdong, 100 nt or Mobile Interconnection Commercial Shenzhen Shenzhen investment Establishme 40 Sichuan Konka Sichuan, Yibin Sichuan, Yibin Manufacturing industry 100 nt or investment Establishme 41 Yibin Smart Sichuan, Yibin Sichuan, Yibin Manufacturing industry 100 nt or investment Establishme 42 Guangdong, Guangdong, 100 nt or Shenzhen KONSEMI Semiconductors Shenzhen Shenzhen investment Establishme 43 Software and information technology 100 nt or Chongqing Konka Chongqing Chongqing services investment Establishme 44 Kowin Memory Guangdong, Guangdong, Computer, telecommunications and other 100 nt or 212 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly (Shenzhen) Shenzhen Shenzhen electronic equipment manufacturing investment Establishme 45 Kowin Memory (Hong China, Hong China, Hong Wholesale of computers, software and 100 nt or Kong) Kong Kong auxiliary equipment investment Establishme 46 Konka Xinyun Yancheng, Yancheng, Computer, telecommunications and other 100 nt or Semiconductor Jiangsu Jiangsu electronic equipment manufacturing investment Establishme 47 Industrial and Trade Guangdong, Guangdong, 100 nt or Wholesale Technology Shenzhen Shenzhen investment Establishme 48 Guangdong, Guangdong, 100 nt or Shenzhen Nianhua Commercial services Shenzhen Shenzhen investment Establishme 49 Hunan, Hunan, 100 nt or Konka Huazhong Commercial services Changsha Changsha investment Establishme 50 Guangdong, Guangdong, 100 nt or Wankaida Software development Shenzhen Shenzhen investment Establishme 51 Shenzhen Chuangzhi Guangdong, Guangdong, 100 nt or Wholesale Electrical Appliances Shenzhen Shenzhen investment 213 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Establishme 52 Suining Jiarun Property Sichuan, Suining Sichuan, Suining Real estate 100 nt or investment Establishme 53 Anhui Konka Anhui, Chuzhou Anhui, Chuzhou Manufacturing industry 78 nt or investment Establishme 54 Kangzhi Trade Anhui, Chuzhou Anhui, Chuzhou Wholesale 78 nt or investment Establishme 55 Telecommunication Guangdong, Guangdong, 75 25 nt or Manufacturing industry Technology Shenzhen Shenzhen investment Establishme 56 China, Hong China, Hong 100 nt or Konka Mobility Commercial Kong Kong investment Establishme 57 Guangdong, Guangdong, 75 25 nt or Dongguan Konka Manufacturing industry Dongguan Dongguan investment Establishme 58 Suining Konka Smart Sichuan, Suining Sichuan, Suining Wholesale 100 nt or investment Establishme 59 Chongqing Chongqing Chongqing Research & experiment development 75 nt or 214 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Optoelectronic investment Technology Research Institute Establishme 60 Ecological protection and environmental 67 nt or Yibin Kangrun Sichuan, Yibin Sichuan, Yibin governance services investment Establishme 61 Ecological protection and environmental 63.65 nt or Yibin Kangrun Medical Sichuan, Yibin Sichuan, Yibin governance services investment Yibin Kangrun Establishme 62 Ecological protection and environmental 40.87 nt or Environmental Sichuan, Yibin Sichuan, Yibin governance services investment Protection Establishme 63 Ningbo Kanghr Electrical machinery and equipment 60 nt or Zhe gian g, Ningbo Zhe gian g, Ningbo Electrical Appliance manufacturing investment Establishme 64 Jiangxi Konka Jiangxi, Jiu gian g Jiangxi, Jiu gian g Manufacturing and processing 51 nt or investment Establishme 65 Jiangxi High 51 nt or Jiangxi, Jiu gian g Jiangxi, Jiu gian g Manufacturing and processing Transparent Substrate investment 66 Jiangsu Konka Special Yancheng, Yancheng, Wholesale 51 Establishme 215 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Material Jiangsu Jiangsu nt or investment Establishme 67 Xinfeng Jiangxi, Jiangxi, 51 nt or Manufacturing and processing Microcrystalline Nanchang Nanchang investment Establishme 68 Konka Huanjia Dalian, Liaoning Dalian, Liaoning Renewable resources processing trade 51 nt or investment Establishme 69 Konka Huanjia (Henan) Henan, Lankao Henan, Lankao Renewable resources processing trade 51 nt or investment Establishme 70 Shaanxi Konka Manufacture of household cleaning and 51 nt or Shaanxi, Xi’an Shaanxi, Xi’an Intelligent sanitary electrical appliances investment Establishme 71 Guangdong, Guangdong, 51 nt or Pengrun Technology Trade and services Shenzhen Shenzhen investment Establishme 72 China, Hong China, Hong 51 nt or Jiaxin Technology Trade and services Kong Kong investment Establishme 73 Konka Ronghe Zhe gian g, Jia xing Zhe gian g, Jia xing Wholesale and retail trade 51 nt or investment 216 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Establishme 74 Recycling, processing and sales of 51 nt or Chongqing Kang xing rui Chongqing Chongqing renewable resources investment Establishme 75 Chongqing Kang xing rui Recycling, processing and sales of waste 51 nt or Chongqing Chongqing Automobile Recycling resources investment Establishme 76 Guangdong, Guangdong, 51 nt or Konka Unifortune Trade and services Shenzhen Shenzhen investment Establishme 77 China, Hong China, Hong 51 nt or Jiali International Trade and services Kong Kong investment Establishme 78 Kangjiatong Sichuan, Yibin Sichuan, Yibin Trade and services 100 nt or investment Kanghong (Yantai) Establishme 79 Shandong, Shandong, Comprehensive utilization of abandoned 51 nt or Environmental Yantai Yantai resources investment Protection Establishme 80 Jiangkang (Shanghai) 51 nt or Shanghai Shanghai Research & experiment development Technology investment 81 Konka Intelligent Guangdong, Guangdong, Research & experiment development 51 Establishme 217 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Manufacturing Shenzhen Shenzhen nt or investment Establishme 82 Shandong, Shandong, 51 nt or Yantai Laikang Commercial services Yantai Yantai investment Establishme 83 Konka Material Hainan, Haikou Hainan, Haikou Commercial services 100 nt or investment Enterprise management consulting, Establishme 84 Guangdong, Guangdong, 51 nt or Konka Ventures incubation management, housing leasing, Shenzhen Shenzhen investment etc. Establishme 85 Yibin Konka Incubator Sichuan, Yibin Sichuan, Yibin Commercial services 51 nt or investment Establishme 86 Shandong, Shandong, Other professional consultation and 51 nt or Yantai Konka Yantai Yantai investigation investment Establishme 87 Sichuan, Sichuan, 51 nt or Chengdu Anren Enterprise incubation management Chengdu Chengdu investment Konka Enterprise Guizhou, Guizhou, Establishme 88 Enterprise management consulting 51 Service Guiyang Guiyang nt or 218 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly investment Establishme 89 Konka Eco- Guangdong, Guangdong, 51 nt or Commercial services Development Shenzhen Shenzhen investment Establishme 90 Germany, Germany, 100 nt or Konka Europe International trade Frankfurt Frankfurt investment Establishme 91 China, Hong China, Hong 100 nt or Hong Kong Konka International trade Kong Kong investment Establishme 92 China, Hong China, Hong 100 nt or Hongdin Trading International trade Kong Kong investment Establishme 93 America, America, 100 nt or Konka North America International trade California California investment Establishme 94 Kanghao Technology Egypt, Cairo Egypt, Cairo International trade 67 nt or investment Establishme 95 China, Hong China, Hong 100 nt or Hongdin Invest Investment holding Kong Kong investment 219 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Establishme 96 Chain Kingdom Memory China, Hong China, Hong 51 nt or International trade Technologies Kong Kong investment Chain Kingdom Memory Establishme 97 Guangdong, Guangdong, 51 nt or Technologies Trade and services Shenzhen Shenzhen investment (Shenzhen) Establishme 98 China, Hong China, Hong 51 nt or Hongjet Trade and services Kong Kong investment Establishme 99 Chongqing Xinyuan Science and technology promotion and 75 nt or Chongqing Chongqing Semiconductor application services investment Establishme 100 Guangdong, Guangdong, Software and information technology 100 nt or Kangxiaojia Technology Shenzhen Shenzhen services investment Establishme 101 Yijiakang Smart Guangdong, Guangdong, Software and information technology 100 nt or Terminal Shenzhen Shenzhen services investment Guizhou, Guizhou, Establishme 102 Guizhou Kangkai Qiandongnan Qiandongnan 51 nt or Manufacturing and processing Material Technology Miao and Dong Miao and Dong investment Autonomous Autonomous 220 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Prefecture Prefecture Guizhou, Guizhou, Qiannan Buyi Qiannan Buyi Establishme 103 Guizhou Konka New 51 nt or and Miao and Miao Manufacturing and processing Material Technology investment Autonomous Autonomous Prefecture Prefecture Guizhou, Guizhou, Qiannan Buyi Qiannan Buyi Establishme 104 Guizhou Kanggui 100 nt or and Miao and Miao Wholesale and retail trade Energy investment Autonomous Autonomous Prefecture Prefecture Establishme 105 Lvfeng, Lvfeng, 100 nt or Guangdong Xinwei Semiconductors Guangdong Guangdong investment Establishme 106 Kangxinrun Renewable Recycling, processing and sales of 51 nt or Chongqing Chongqing Resources renewable resources investment Guizhou, Guizhou, Establishme 107 Guizhou Kanggui Qiannan Buyi Qiannan Buyi 70 nt or Manufacturing and processing Material Technology and Miao and Miao investment Autonomous Autonomous 221 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Prefecture Prefecture Establishme 108 Nantong Kanghai Jiangsu, Nantong Jiangsu, Nantong Real estate 51 nt or investment Establishme 109 Chongqing Kangyiyun Chongqing Chongqing Real estate 80 nt or investment Establishme 110 Guangdong, Guangdong, 95.09 nt or Kanghong Dongsheng Commercial services Shenzhen Shenzhen investment Establishme 111 Jiangxi Konka Jiangxi, Jiangxi, 100 nt or Commercial services Technology Park Shangrao Shangrao investment Shangrao Konka Establishme 112 Jiangxi, Jiangxi, 100 nt or Electronic Technological Research & experiment development Shangrao Shangrao investment Innovation Guizhou, Guizhou, Qiannan Buyi Qiannan Buyi Establishme 113 Guizhou Konka New Manufacture of non-metallic mineral 98 nt or and Miao and Miao Energy products investment Autonomous Autonomous Prefecture Prefecture 222 Konka Group Co., Ltd. Interim Report 2022 Holding Main operating Registration percentage (%) Way of No. Name Nature of business place place Direc Indire gaining tly ctly Establishme 114 Zhe gian g Konka Zhe gian g, Zhe gian g, 100 nt or Research & experiment development Electronic Shao xing Shao xing investment Establishme 115 Zhe gian g Konka Zhe gian g, Zhe gian g, 51 49 nt or Commercial services Technology Industry Shao xing Shao xing investment (2) Significant Non-wholly-owned Subsidiary Shareholding The profit or loss Declaring dividends Balance of non- proportion of non- attributable to the Name distributed to non- controlling interests at controlling interests non-controlling controlling interests the period-end (%) interests Chain Kingdom Memory Technologies 49.00% 3,451,062.32 70,642,626.66 (3) The Main Financial Information of Significant Not Wholly-owned Subsidiary Ending balance Name Non-current Non-current Current assets Total assets Current liabilities Total liabilities assets liability Chain Kingdom Memory 1,148,408,463.11 3,267,821.83 1,151,676,284.94 1,006,710,417.32 3,201,455.98 1,009,911,873.30 Technologies 223 Konka Group Co., Ltd. Interim Report 2022 (Continued) Beginning balance Name Non-current Non-current Current assets Total assets Current liabilities Total liabilities assets liability Chain Kingdom Memory 1,118,655,030.15 679,128.95 1,119,334,159.10 984,612,731.74 984,612,731.74 Technologies (Continued) Reporting Period Name Total comprehensive Cash flows from Operating revenue Net profit income operating activities Chain Kingdom Memory Technologies 3,337,348,013.59 899,361.51 7,042,984.33 -30,984,221.98 (Continued) Same period of last year Name Total comprehensive Cash flows from Operating revenue Net profit income operating activities Chain Kingdom Memory Technologies 3,756,519,723.85 13,367,681.89 11,903,453.19 80,536,781.65 224 Konka Group Co., Ltd. Interim Report 2022 3. Equity in Joint Ventures or Associated Enterprises (1) Significant Joint Ventures or Associated Enterprises Holding Accounting Regi Main percentage (%) treatment of the strat operati Nature of investment to Name ion ng business Direc joint venture or plac Indirectly place tly associated e enterprise Dongfang Konka No.1 (Zhuhai) Private Zhu Investment Zhuhai 49.95 Equity method Equity hai management Investment Fund (LP) Shenzhen Professional Jielunte Shenzh Shen machinery 42.79 Equity method Technology Co., en zhen manufacturing Ltd. (2) Main Financial Information of Significant Associated Enterprise Ending balance/Reporting Period Dongfang Konka No.1 Item Shenzhen Jielunte (Zhuhai) Private Equity Technology Co., Ltd. Investment Fund (LP) Current assets 953,194,365.22 272,906,569.19 Non-current assets 222,366,556.96 Total assets 953,194,365.22 495,273,126.15 Current liabilities 880.00 258,726,574.40 Non-current liabilities 19,881,055.90 Total liabilities 880.00 278,607,630.30 Equity of non-controlling interests 8,308,540.00 Equity attributable to shareholders of 953,193,485.22 208,356,955.85 the Company as the parent Net assets shares calculated at the 476,120,145.87 89,155,941.41 shareholding proportion Adjusted items - Goodwill 225 Konka Group Co., Ltd. Interim Report 2022 Ending balance/Reporting Period Dongfang Konka No.1 Item Shenzhen Jielunte (Zhuhai) Private Equity Technology Co., Ltd. Investment Fund (LP) - Internal unrealized profit - Others Carrying value of investment to 471,524,694.73 93,935,437.96 associated enterprises Fair values of equity investments of joint ventures with quoted prices Revenue 182,061,953.26 Financial expenses -229,796.85 -1,371,564.48 Income tax expenses -1,984,423.47 Net profit -2,383,969.26 248,699.00 Net profit from discontinued operations Other comprehensive income Total comprehensive income -2,383,969.26 248,699.00 Dividends received from the joint venture in the current period (Continued) Opening balance/The same period of last year Dongfang Konka No.1 Item Shenzhen Jielunte (Zhuhai) Private Equity Technology Co., Ltd. Investment Fund (LP) Current assets 945,498,650.28 273,102,104.88 Non-current assets 220,186,531.13 Total assets 945,498,650.28 493,288,636.01 Current liabilities 730.00 258,379,870.36 Non-current liabilities 18,381,235.37 Total liabilities 730.00 276,761,105.73 Equity of non-controlling interests 9,047,500.16 Equity attributable to shareholders of the Company as the parent 945,497,920.28 207,480,030.12 Net assets shares calculated at the 467,638,787.38 94,278,354.91 226 Konka Group Co., Ltd. Interim Report 2022 shareholding proportion Adjusted items - Goodwill - Internal unrealized profit - Others Carrying value of investment to associated enterprises 467,638,787.38 94,278,354.91 Fair values of equity investments of joint ventures with quoted prices Revenue 227,686,845.28 Financial expenses -281,006.45 2,748,106.23 Income tax expenses -1,440,602.70 Net profit -28,114,379.69 3,684,846.93 Net profit from discontinued operations Other comprehensive income Total comprehensive income -28,114,379.69 3,684,846.93 Dividends received from the joint venture in the current period (3) Summary Financial Information of Insignificant Joint Ventures or Associated Enterprises Ending Beginning balance/The Item balance/Reporting Same period of last year Period Associated enterprise: Total carrying value of investment 5,708,256,236.06 5,340,671,797.22 The total of following items according to the shareholding proportions --Net profit 60,936,191.32 27,682,427.99 --Other comprehensive income -38,929.34 --Total comprehensive income 60,897,261.98 27,682,427.99 IX. The Risk Related to Financial Instruments The Company’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. Risks related to these financial instruments, and risk management policies the Company has adopted to reduce these risks are described as follows. 227 Konka Group Co., Ltd. Interim Report 2022 The Company management manages and monitors the risk exposure in order to ensure the above risks to be controlled in a limited scope. 1. Various Risk Management Objectives and Policies The goals of the Company engaged in the risk management is to achieve the proper balance between the risks and benefits, reduced the negative impact to the Company operating performance risk to a minimum, maximized the profits of shareholders and other equity investors. Based on the risk management goal, the basic strategy of the Company's risk management is determine and analyze the various risks faced by the Company, set up the bottom line of risk and conducted appropriate risk management, and timely supervised various risks in a reliable way and controlled the risk within the range of limit. (1) Market Risk 1) Foreign Exchange Risk Foreign exchange risk refers to the risks that may lead to losses due to fluctuation in exchange rate. The foreign exchange risk borne by the Company is related to USD. Except the procurement and sales in USD of the Company's subsidiaries Hong Kong Konka, Hongdin Trading, Chain Kingdom Memory Technologies, Hongjet and Jiali, the Company'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 at 30 June 2022, the Company'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 Ending balance Opening balance Monetary Assets 77,214,921.83 104,127,945.47 Accounts Receivable 99,275,413.45 150,964,132.67 Other Receivables 114,917,428.94 97,035,927.80 Short-term borrowings 51,764,004.17 89,678,741.45 Accounts payable 26,802,690.35 35,718,564.93 Other payables 532,849.98 Interest payable 28,048.58 106,816.56 The Company pays close attention to the impact of exchange rate changes on the Company'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. 228 Konka Group Co., Ltd. Interim Report 2022 2) Interest Rate Risk The Company bears interest rate risk due to interest rate changes of interest-bearing financial assets and liabilities. The Company's interest bearing financial assets are mainly bank deposits, of which the variable interest rate is mostly short-term, while the interest bearing financial liabilities are mainly bank loans and corporate bonds. The Company's long-term borrowings from banks and corporation 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 borrowings from banks with floating interest rates. The Company's policy is to maintain the floating interest rates of such borrowings to eliminate the fair value risk of interest rate changes. As at 30 June 2022, the balance of such short-term borrowings was RMB339,068,997.54. (2) Credit Risk As at 30 June 2022, the maximum credit risk exposure that may cause financial losses to the Company mainly came from losses generated from the Company's financial assets due to failure of the other party in a contract to perform its obligations and the financial guarantee undertaken by the Company, including: The carrying amount of financial assets recognized in the consolidated balance sheet; for financial 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 Company 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 Company reviews the recovery of each single receivable on each balance sheet date to ensure that sufficient bad debt provision is made for the unrecoverable amount. Therefore, the Company's management believes that the Company's credit risk has been greatly reduced. The Company's working capital is deposited in banks with high credit rating, so the credit risk of working capital is low. The Company 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 Company has no other major credit concentration risk. For the financial assets of the Company 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 Company is unable to fulfill its financial obligations on the due date. The Company manages liquidity risk in the method of ensuring that there is 229 Konka Group Co., Ltd. Interim Report 2022 sufficient liquidity to fulfill debt obligations without causing unacceptable loss or damage to the Company’s reputation. In order to mitigate the liquidity risk, the Management of the Company has carried out a detailed inspection on the liquidity of the company, including the maturity of accounts payable and other payables, bank credit line and bond financing. The conclusion is that the Company 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 Company based on the maturity period of the undiscounted remaining contractual obligations is as follows: 230 Konka Group Co., Ltd. Interim Report 2022 Amount as at 30 June 2022: Item Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total Financial assets Monetary Assets 6,534,638,395.86 6,534,638,395.86 Trading Financial Assets Notes Receivable 934,842,104.68 934,842,104.68 Accounts Receivable 2,506,800,876.82 201,993,590.82 663,374,977.67 459,386.20 3,372,628,831.51 Other Receivables 866,491,967.46 469,612,386.01 469,773,586.67 4,383,863.74 1,810,261,803.88 Long-term Receivables 10,430,400.00 10,430,400.00 Other Current Assets 3,342,866,416.60 3,342,866,416.60 Financial liabilities Short-term borrowings 10,090,194,886.59 10,090,194,886.59 Notes payable 1,133,188,165.45 1,133,188,165.45 Accounts payable 2,192,583,979.74 263,468,989.22 184,516,934.58 2,856,906.88 2,643,426,810.42 Other payables 964,345,498.07 94,909,009.20 285,321,124.01 47,569,782.59 1,392,145,413.87 Payroll payable 181,829,820.35 181,829,820.35 Non-current liabilities due 1,071,913,219.84 1,071,913,219.84 within one year Long-term borrowings 7,283,243,427.74 691,764,652.55 270,437,976.97 8,245,446,057.26 Bonds Payable 1,497,340,146.81 798,238,993.69 2,295,579,140.50 Long-term payables 126,886,493.60 9,514,021.06 136,400,514.66 231 Konka Group Co., Ltd. Interim Report 2022 2. Sensitivity analysis The Company adopts sensitivity analysis technology to analyze 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: 30 June 2022 Exchange rate Item Impact on shareholders' fluctuations Impact on net profit equity Appreciation of 1% USD 13,340,578.96 8,723,696.39 against RMB Depreciation of 1% USD -13,340,578.96 -8,723,696.39 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: 30 June 2022 Interest rate Item Impact on shareholders' fluctuations Impact on net profit equity 232 Konka Group Co., Ltd. Interim Report 2022 Borrowings at floating interest Up 0.5% -1,311,538.20 -1,220,696.86 rates Borrowings at floating interest Down 0.5% 1,311,538.20 1,220,696.86 rates 233 Konka Group Co., Ltd. Interim Report 2022 X. The Disclosure of Fair Value 1. Ending Fair Value of Assets and Liabilities at Fair Value Ending fair value Fair value Fair value Fair value Item measurement items at measurement items measurement items at Total level 1 at level 2 level 3 I. Consistent fair value measurement i. Trading Financial Assets 1. Financial assets measured at fair value through profit and loss for the current period (II) Accounts receivable financing 9,926,723.80 9,926,723.80 (II) Other equity investments (III) Other equity instrument investment 23,841,337.16 23,841,337.16 (IV) Investment properties (V) Biological assets (V) Other non-current financial assets 2,460,095,518.48 2,460,095,518.48 The total amount of assets consistently measured at 9,926,723.80 2,483,936,855.64 2,493,863,579.44 fair value Total amount of liabilities at fair value II. Inconsistent fair value measurement Total assets of inconsistent fair value measurement Total liabilities of inconsistent fair value 234 Konka Group Co., Ltd. Interim Report 2022 Ending fair value Fair value Fair value Fair value Item measurement items at measurement items measurement items at Total level 1 at level 2 level 3 measurement 235 Konka Group Co., Ltd. Interim Report 2022 2. Basis for Determining the Market Prices of Consistent and Inconsistent Fair Value Measurement Items at Level 1 Input value at Level 1 is the unadjusted quotation in the active market of the same assets or liabilities that can be obtained on the measurement date. 3. Valuation Technique Adopted and Qualitative and Quantitative Information of Important Parameters for Consistent and Inconsistent Fair Value Measurement Items at Level 2 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. Valuation Technique Adopted and Qualitative and Quantitative Information of Important Parameters for Consistent and Inconsistent Fair Value Measurement Items at Level 3 Input value at Level 3 is the input value unobservable of relevant assets or liabilities. XI. Related Party and Related-party Transaction (I) Relationship of Related Party 1. Controlling Shareholder and the Ultimate Controller (1) Controlling Shareholder and the Ultimate Controller Sharehold Voting Registr ing ratio right ratio Registere Name ation Nature of business to the to the d capital place Company Company (%) (%) OCT Group Shenzh Tourism, real estate, RMB12 29.999997 29.999997 Co. Ltd. en electronics industry billion Note: The ultimate controller of the Company is State-owned Assets Supervisor Commission of the State Council. (2) The Registered Capital of the Controlling Shareholder and its Changes Controlling Opening balance Increase Decrease Ending balance shareholders OCT Group Co. Ltd. 12,000,000,000.00 12,000,000,000.00 (3) Controlling Shareholders’ Shares or Equity and their Changes Controlling Shareholding percentage Shareholding amount shareholders (%) 236 Konka Group Co., Ltd. Interim Report 2022 Ending Opening Ending balance Opening balance percentage percentage OCT Group Co. Ltd. 722,383,542.00 722,383,542.00 29.999997 29.999997 2. Subsidiary Refer to note VIII-1. (1) Subsidiaries for the information of subsidiaries. 3. Associated Enterprises and Joint Ventures Refer to Note VIII-2. (1) Significant Associated Enterprises for details of significant associated enterprises of the Company. Information on other joint ventures or associated enterprises occurring connected transactions with the Company in Reporting Period, or forming balance due to connected transactions made in previous period: Name Relationship with the Company Shenzhen Yaode Technology Co., Ltd. Associated enterprise Anhui Kaikai Shijie E-commerce Co., Ltd. Associated enterprise Shenzhen Kanghong xing Smart Technology Associated enterprise Co., Ltd. Shenzhen Konda E-display Co., Ltd. Associated enterprise Shenzhen Jielunte Technology Co., Ltd. Associated enterprise Shenzhen Kaiyuan Shengshi Technology Co., Associated enterprise Ltd. Pu giường Jiakang Technology Co, Ltd. Associated enterprise Shenzhen Kangying Semiconductor Associated enterprise Technology Co., Ltd. Wiselite International (HK) Limited Associated enterprise Feidi Technology (Shenzhen) Co., Ltd. Associated enterprise Chuzhou Kangxin Health Industry Associated enterprise Development Co., Ltd. Dongguan Guankang Hongyu Investment Co., Associated enterprise Ltd. Yantai Kangyun Industrial Development Co., Associated enterprise Ltd. Shandong Econ Technology Co., Ltd. Associated enterprise Sichuan Chengrui Real Estate Co., Ltd. Associated enterprise Dongguan Kangjia New Materials Technology Associated enterprise Co., Ltd. Dongguan Kangzhihui Electronics Co., Ltd. Associated enterprise Shenzhen Jielunte Technology Co., Ltd. Associated enterprise 237 Konka Group Co., Ltd. Interim Report 2022 Name Relationship with the Company Panxu Intelligence Co., Ltd. Associated enterprise Sichuan Aimijiakang Technology Co., Ltd. Associated enterprise Konka Industrial Development (Wuhan) Co., Associated enterprise Ltd. Feidi Technology (Shenzhen) Co., Ltd. and its Associated enterprise subsidiaries E3info (Hainan) Technology Co., Ltd. Associated enterprise Hefei KONSEMI Storage Technology Co., Associated enterprise Ltd. Shandong Kangfei Intelligent Electrical Associated enterprise Appliances Co., Ltd. Nantong Kang gian Technology Industrial Park Associated enterprise Operations and Management Co., Ltd. Henan Kangfei Intelligent Electrical Associated enterprise Appliances Co., Ltd. Shenzhen Kangying Semiconductor Associated enterprise Technology Co., Ltd. 4. Information on Other Related Parties Name Relationship with the Company Chongqing Lanlv Moma Real Estate Subsidiary of associated enterprise Development Co., Ltd. Yantai Kangyue Investment Co., Ltd. Subsidiary of associated enterprise HOHOELECTRICAL&FURNITURECO.,LIM Minority shareholder of subsidiary ITED Chuzhou Hanshang Electric Appliance Co., Minority shareholder of subsidiary Ltd. Korea Electric Group Co., Ltd. Minority shareholder of subsidiary Chongqing Liangshan Industrial Investment Minority shareholder of subsidiary Co., Ltd. Huanjia Group Co., Ltd. Minority shareholder of subsidiary Hu Zehong Minority shareholder of subsidiary Dai Rong xing Close family members of minority shareholders The company controlled by the ultimate Jiangxi Meiji Enterprise Co., Ltd. controller of the minority shareholders of the 238 Konka Group Co., Ltd. Interim Report 2022 Name Relationship with the Company subsidiary Chongqing Ruiyin Renewable Resources Co., The ultimate controller of the minority Ltd. shareholders of the subsidiary (II) Related-party Transactions 1. Related-party transactions of purchase and sale of goods, provision and acceptance of services (1) Purchasing goods/receiving services Same period of Related party Content Reporting Period last year Purchase of Chongqing Ruiyin Renewable goods and 541,543,811.51 1,503,638,982.86 Resources Co., Ltd. and its subsidiaries services Chuzhou Hanshang Electric Appliance Purchase of 181,578,952.60 207,875,193.30 Co., Ltd. goods Purchase of Pu giường Jiakang Technology Co, Ltd. goods 150,151,893.73 163,541,409.57 Purchase of OCT Group Co., Ltd. and its goods and 25,346,178.36 23,801,411.18 subsidiaries and associates services Purchase of Korea Electric Group Co., Ltd. and its goods and 18,805,740.79 39,114,787.43 subsidiaries services Shenzhen Jielunte Technology Co., Purchase of Ltd. and its subsidiaries as well as its goods 13,992,143.62 22,652,611.58 associated enterprises Dongguan Kangzhihui Electronics Co., Purchase of 13,821,902.86 15,400,576.70 Ltd. goods HOHO ELECTRICAL & Purchase of 9,072,974.63 13,904,763.96 FURNITURE CO., LIMITED goods Purchase of Shenzhen Konda E-display Co., Ltd. goods and 8,959,207.84 26,475,410.20 services Purchase of Shenzhen Kangying Semiconductor goods and 8,145,702.87 Technology Co., Ltd. services 239 Konka Group Co., Ltd. Interim Report 2022 Same period of Related party Content Reporting Period last year Purchase of Dongguan Kangjia New Materials goods and 6,976,616.01 Technology Co., Ltd. services Anhui Kaikai Shijie E-commerce Co., Purchase of 21,234.50 7,817,518.74 Ltd. and its subsidiaries goods Purchase of Subtotal of other related parties goods and 2,468,604.98 738,830.75 services (2) Information of sales of goods and provision of labor service Same Period of Related party Content Reporting Period last year Sales of OCT Group Co., Ltd. and its subsidiaries goods and 133,512,390.92 78,699,287.26 and associates render labor service Sales of Korea Electric Group Co., Ltd. and its goods and 117,013,253.39 181,904,680.78 subsidiaries render labor service Sales of Anhui Kaikai Shijie E-commerce Co., Ltd. goods and 86,686,831.47 86,107,536.96 and its subsidiaries render labor service Hefei KONSEMI Storage Technology Co., Sales of 42,085,293.63 Ltd. goods Sales of Chuzhou Hanshang Electric Appliance Co., goods and 35,546,108.63 30,402,393.78 Ltd. render labor service Sales of goods and Sichuan Aimijiakang Technology Co., Ltd. 25,833,743.92 render labor service Sales of Shandong Kangfei Intelligent Electrical goods and 21,685,823.71 33,094,053.38 Appliances Co., Ltd. render labor service 240 Konka Group Co., Ltd. Interim Report 2022 Same Period of Related party Content Reporting Period last year HOHO ELECTRICAL & FURNITURE Sales of 15,922,314.20 35,832,964.53 CO., LIMITED goods Sales of goods and Shenzhen Konda E-display Co., Ltd. 14,036,782.18 23,556,672.37 render labor service Nantong Kang gian Technology Industrial Render labor 14,150,943.39 Park Operations and Management Co., Ltd. service Shenzhen Jielunte Technology Co., Ltd. Sales of goods and and its subsidiaries as well as its associated render labor 13,440,177.22 23,197,082.93 enterprises service Henan Kangfei Intelligent Electrical Sales of 12,773,438.03 18,874,703.89 Appliances Co., Ltd. goods Sales of Dongguan Kangzhihui Electronics Co., goods and 12,592,625.44 11,344,197.37 Ltd. render labor service Sales of Shenzhen Kangying Semiconductor goods and 8,803,735.07 Technology Co., Ltd. and its subsidiaries render labor service Sales of E3info (Hainan) Technology Co., Ltd. and goods and 563,757.57 5,124,776.56 its subsidiaries render labor service Subtotal of other related parties 6,726,787.89 6,321,489.21 2. Information on Related-party Lease (1) Lease situation The lease fee The lease fee confirmed in the Leasee Lessee's name Category confirmed in the same period of last Reporting Period year OCT Group Co. Commercial Konka Group Co., Ltd. And its residences 755,425.60 683,385.60 Ltd. subsidiaries and office 241 Konka Group Co., Ltd. Interim Report 2022 The lease fee The lease fee confirmed in the Leasee Lessee's name Category confirmed in the same period of last Reporting Period year buildings Konka Ventures Commercial OCT Group Co. Development residences Ltd. And its 11,610,366.36 10,456,131.42 (Shenzhen) Co., and office subsidiaries Ltd. buildings 3. Information on Related-party Guarantee (1) The Company was guarantor Contracte Actual d guarantee Cu Execution guarantee Secured party amount rre Start date End date accomplish amount (RMB10,0 ncy ed or not (RMB10,0 00) 00) Anhui CN 6,000.00 5,000.00 2021-7-16 2022-7-16 Not Tong giường Y Anhui CN 3,000.00 3,000.00 2021-10-28 2022-10-27 Not Tong giường Y Anhui CN 5,000.00 2022-4-14 2023-4-14 Not Tong giường Y Anhui CN 3,000.00 3,000.00 2022-6-2 2023-6-1 Not Tong giường Y Electronics CN 7,000.00 7,729.95 2021-10-18 2022-11-14 Not Technology Y Electronics CN 1,500.00 2022-4-12 2022-11-14 Not Technology Y Electronics CN 50,000.00 50,000.00 2021-11-5 2022-7-16 Not Technology Y CN Sichuan Konka 4,000.00 4,000.00 2022-3-22 2023-3-21 Not Y CN Boluo Precision 2,480.11 958.33 2020-8-19 2023-8-19 Not Y CN Boluo Precision 12,449.00 2,221.00 2021-7-6 2023-7-5 Not Y 242 Konka Group Co., Ltd. Interim Report 2022 Contracte Actual d guarantee Cu Execution guarantee Secured party amount rre Start date End date accomplish amount (RMB10,0 ncy ed or not (RMB10,0 00) 00) CN Hong Kong Konka 11,000.00 10,402.67 2021-9-8 2021-11-6 Not Y CN Hong Kong Konka 10,000.00 9,731.53 2022-2-9 2022-9-5 Not Y CN Dongguan Konka 5,000.00 5,000.00 2022-3-18 2023-3-17 Not Y CN Dongguan Konka 80,000.00 20,167.98 2021-6-23 2031-5-7 Not Y Telecommunicatio CN 7,500.00 2,610.57 2022-5-20 2023-5-20 Not n Technology Y CN Konka Circuit 20,000.00 5,426.60 2021-5-24 2024-11-30 Not Y Mobile CN 5,000.00 4,582.81 2021-8-11 2022-8-11 Not Interconnection Y Konka Xinyun CN 6,000.00 1,000.00 2022-5-26 2024-5-25 Not Semiconductor Y Konka Xinyun CN 20,000.00 8,277.66 2021-7-12 2022-7-11 Not Semiconductor Y Liaoyang CN 2,000.00 2,000.00 2021-12-23 2022-12-22 Not Kangshun Smart Y Liaoyang CN 5,000.00 3,000.00 2022-1-19 2023-1-18 Not Kangshun Smart Y CN Yibin Smart 980.00 980.00 2022-3-31 2023-3-30 Not Y CN XingDa HongYe 5,800.00 5,288.44 2022-2-23 2024-2-23 Not Y CN XingDa HongYe 2,000.00 1,081.17 2020-12-25 2023-12-25 Not Y CN XingDa HongYe 750.00 443.24 2021-5-31 2023-8-31 Not Y CN Jiangxi Konka 10,000.00 3,000.00 2020-11-6 2023-12-1 Not Y 243 Konka Group Co., Ltd. Interim Report 2022 Contracte Actual d guarantee Cu Execution guarantee Secured party amount rre Start date End date accomplish amount (RMB10,0 ncy ed or not (RMB10,0 00) 00) CN Jiangxi Konka 6,000.00 2,500.00 2022-6-26 2023-6-25 Not Y CN Jiangxi Konka 5,500.00 456.80 2019-6-26 2022-6-25 Not Y CN Jiangxi Konka 6,500.00 1,077.81 2019-10-30 2022-10-30 Not Y CN Jiangxi Konka 990.00 990.00 2022-3-10 2024-3-9 Not Y CN Jiangxi Konka 10,000.00 5,089.18 2020-9-29 2023-9-29 Not Y CN Jiangxi Konka 5,000.00 4,600.00 2020-12-21 2022-12-31 Not Y CN Jiangxi Konka 1,000.00 504.99 2020-12-30 2023-12-30 Not Y Xinfeng CN 5,000.00 1,742.17 2020-5-19 2023-5-19 Not Microcrystalline Y Xinfeng CN 3,478.85 662.37 2020-5-29 2022-11-29 Not Microcrystalline Y Xinfeng CN 2,100.00 1,068.57 2020-12-8 2023-12-8 Not Microcrystalline Y Xinfeng CN 7,200.00 6,000.00 2021-12-27 2022-12-26 Not Microcrystalline Y Xinfeng CN 7,200.00 6,000.00 2022-6-29 2023-6-28 Not Microcrystalline Y Jiangxi High CN Transparent 10,000.00 830.39 2019-6-26 2022-6-26 Not Y Substrate Jiangxi High CN Transparent 5,000.00 1,320.79 2020-1-8 2023-1-8 Not Y Substrate Jiangxi High CN 5,000.00 889.08 2019-12-20 2022-12-20 Not Transparent Y 244 Konka Group Co., Ltd. Interim Report 2022 Contracte Actual d guarantee Cu Execution guarantee Secured party amount rre Start date End date accomplish amount (RMB10,0 ncy ed or not (RMB10,0 00) 00) Substrate Jiangxi High CN Transparent 990.00 990.00 2022-3-10 2024-3-9 Not Y Substrate Jiangxi High CN Transparent 5,975.00 1,054.60 2020-5-29 2022-11-29 Not Y Substrate Jiangxi High CN Transparent 6,000.00 2,450.09 2020-7-14 2023-7-14 Not Y Substrate Ningbo Kanghr CN Electrical 6,000.00 2,880.00 2020-10-15 2022-7-26 Not Y Appliance Ningbo Kanghr CN Electrical 6,000.00 3,000.00 2021-7-12 2022-7-11 Not Y Appliance CN Yibin Kangrun 10,000.00 10,000.00 2020-11-13 2024-12-31 Not Y CN Anhui Konka 20,000.00 3,000.00 2021-3-25 2022-3-25 Not Y CN Anhui Konka 5,500.00 366.45 2021-4-2 2022-4-2 Not Y CN Anhui Konka 12,000.00 5,000.00 2021-4-25 2022-4-25 Not Y CN Anhui Konka 28,000.00 7,760.95 2021-8-10 2031-7-15 Not Y CN Anhui Konka 7,000.00 7,000.00 2021-10-29 2026-10-26 Not Y Yibin OCT San gian g CN 14,000.00 7,658.00 2019-9-29 2022-9-28 Not Properties Co., Y Ltd. 245 Konka Group Co., Ltd. Interim Report 2022 Contracte Actual d guarantee Cu Execution guarantee Secured party amount rre Start date End date accomplish amount (RMB10,0 ncy ed or not (RMB10,0 00) 00) CN Econ Technology 1,748.80 1,748.80 2022-5-19 2023-5-18 Not Y CN Econ Technology 3,747.44 3,747.44 2022-5-17 2023-5-16 Not Y CN Econ Technology 4,996.58 4,996.58 2022-5-18 2023-5-17 Not Y CN Econ Technology 249.83 249.83 2022-6-28 2023-6-27 Not Y Anhui Electrical CN 13,500.00 12,500.00 2020-7-3 2023-7-1 Not Appliance Y Shenzhen CN Overseas Chinese 10,000.00 580.00 2022-5-31 2023-5-30 Not Y Town Co., Ltd. Foshan Zhu gian g Media Creative CN Park Culture 980.00 300.47 2022-5-17 2023-3-21 Not Y Development Co., Ltd. (2) The Company was secured party Guarantee Cur Execution Guarantor: amount renc Start date End date accomplishe (RMB’0,000) y d or not CN Electronics Technology 50,000.00 2021-8-17 2022-8-16 Not Y CN OCT Group Co. Ltd. 70,000.00 2019-7-22 2022-7-22 Not Y CN OCT Group Co. Ltd. 100,000.00 2021-1-8 2024-1-8 Not Y CN OCT Group Co. Ltd. 50,000.00 2021-5-21 2024-5-21 Not Y OCT Group Co. Ltd. 80,000.00 CN 2021-7-9 2024-7-9 Not 246 Konka Group Co., Ltd. Interim Report 2022 Guarantee Cur Execution Guarantor: amount renc Start date End date accomplishe (RMB’0,000) y d or not Y CN OCT Group Co. Ltd. 100,000.00 2022-6-22 2024-6-21 Not Y CN OCT Group Co. Ltd. 149,500.00 2021-6-24 2024-6-23 Not Y Hu Zehong, Liang Ruiling, CN 2,591.34 2022-2-23 2024-2-23 Not Dai Yaojin Y Hu Zehong, Liang Ruiling, CN 529.77 2020-12-25 2023-12-25 Not Dai Yaojin Y Hu Zehong, Liang Ruiling, CN 217.19 2021-5-31 2023-8-31 Not Dai Yaojin Y CN Zhu Xinming 1,470.00 2020-11-6 2023-12-1 Not Y Jiangxi Xinzixin Real CN 1,225.00 2022-6-29 2023-6-28 Not Estate Co., Ltd. Y Jiangxi Xinzixin Real CN 223.83 2019-6-26 2022-6-25 Not Estate Co., Ltd. Y Jiangxi Xinzixin Real CN 528.12 2019-10-30 2022-10-30 Not Estate Co., Ltd. Y Jiangxi Xinzixin Real CN 485.10 2022-3-10 2024-3-9 Not Estate Co., Ltd. Y Jiangxi Xinzixin Real CN 2,493.70 2020-9-29 2023-9-29 Not Estate Co., Ltd. Y Jiangxi Xinzixin Real CN 2,254.00 2020-12-21 2022-12-31 Not Estate Co., Ltd. Y CN Zhu Xinming 247.44 2020-12-30 2023-12-30 Not Y Jiangxi Xinzixin Real CN 853.66 2020-5-19 2023-5-19 Not Estate Co., Ltd. Y Jiangxi Xinzixin Real CN 324.56 2020-5-29 2022-11-29 Not Estate Co., Ltd. Y CN Zhu Xinming 523.60 2020-12-8 2023-12-8 Not Y CN Zhu Xinming 2,940.00 2021-12-27 2022-12-26 Not Y 247 Konka Group Co., Ltd. Interim Report 2022 Guarantee Cur Execution Guarantor: amount renc Start date End date accomplishe (RMB’0,000) y d or not Jiangxi Xinzixin Real CN 2,940.00 2022-6-29 2023-6-28 Not Estate Co., Ltd. Y Jiangxi Xinzixin Real CN 406.89 2019-6-26 2022-6-26 Not Estate Co., Ltd. Y CN Zhu Xinming 647.19 2020-1-8 2023-1-8 Not Y CN Zhu Xinming 435.65 2019-12-20 2022-12-20 Not Y Jiangxi Xinzixin Real CN 485.10 2022-3-10 2024-3-9 Not Estate Co., Ltd. Y Jiangxi Xinzixin Real CN 516.75 2020-5-29 2022-11-29 Not Estate Co., Ltd. Y CN Zhu Xinming 1,200.54 2020-7-14 2023-7-14 Not Y CN Econ Technology 3,300.00 2020-11-13 2024-12-31 Not Y Chuzhou State-owned CN Assets Management Co., 660.00 2021-3-25 2022-3-25 Not Y Ltd. Chuzhou State-owned CN Assets Management Co., 80.62 2021-4-2 2022-4-2 Not Y Ltd. Chuzhou State-owned CN Assets Management Co., 1,100.00 2021-4-25 2022-4-25 Not Y Ltd. Chuzhou State-owned CN Assets Management Co., 1,707.41 2021-8-10 2031-7-15 Not Y Ltd. Chuzhou State-owned CN Assets Management Co., 1,540.00 2021-10-29 2026-10-26 Not Y Ltd. Hu Zehong, Liang Ruiling, CN 2,450.00 2018-7-1 2025-12-31 Not Dai Yaojin Y Hu Zehong, Liang Ruiling, CN 4,899.02 2018-7-1 2025-12-31 Not Dai Yaojin Y 248 Konka Group Co., Ltd. Interim Report 2022 Guarantee Cur Execution Guarantor: amount renc Start date End date accomplishe (RMB’0,000) y d or not Suiyong Rongxin Asset CN 2,450.00 2018-1-1 2022-12-31 Not Management Co., Ltd. Y Suiyong Rongxin Asset CN 980.00 2018-1-1 2022-12-31 Not Management Co., Ltd. Y Suiyong Rongxin Asset CN 1,862.00 2018-1-1 2022-12-31 Not Management Co., Ltd. Y CN Zhu Xinming 6,223.00 2021-10-15 2022-10-14 Not Y CN Zhu Xinming 4,900.00 2021-10-15 2022-10-14 Not Y CN Zhu Xinming 1,323.00 2021-10-15 2022-10-14 Not Y CN Zhu Xinming 443.45 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 283.32 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 235.95 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 13,249.19 2022-2-19 2023-2-18 Not Y CN Zhu Xinming 6,860.00 2022-3-1 2023-2-28 Not Y CN Zhu Xinming 2,330.54 2022-3-9 2023-3-8 Not Y CN Zhu Xinming 44.05 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 443.45 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 278.55 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 231.91 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 1,225.00 2022-6-1 2022-8-31 Not Y Zhu Xinming 44.05 CN 2022-1-5 2022-12-31 Not 249 Konka Group Co., Ltd. Interim Report 2022 Guarantee Cur Execution Guarantor: amount renc Start date End date accomplishe (RMB’0,000) y d or not Y CN Zhu Xinming 224.27 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 214.50 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 262.79 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 649.29 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 298.90 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 490.00 2022-1-5 2023-2-27 Not Y CN Zhu Xinming 224.27 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 210.90 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 224.27 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 260.25 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 210.90 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 298.90 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 224.27 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 4.58 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 223.85 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 171.33 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 93.12 2022-1-5 2022-12-31 Not Y 250 Konka Group Co., Ltd. Interim Report 2022 Guarantee Cur Execution Guarantor: amount renc Start date End date accomplishe (RMB’0,000) y d or not CN Zhu Xinming 223.85 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 171.33 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 93.12 2022-1-5 2022-12-31 Not Y CN Zhu Xinming 1,470.00 2022-6-1 2022-8-31 Not Y Chuzhou Hanshang Electric CN 2,450.00 2022-5-19 2023-5-19 Not Appliance Co., Ltd. Y Chuzhou Hanshang Electric CN 2,083.96 2022-5-19 2023-5-19 Not Appliance Co., Ltd. Y Yuan Shengxiang, Yudong CN Environmental Protection 6,370.00 2020-8-19 2025-10-31 Not Y Technology Co., Ltd. Shenzhen Henglongtong Technology Co., Ltd., Guizhou Huajinrun Technology Co. Ltd., CN Huaying Gaokede 488.37 2018-1-1 2021-12-31 Not Y Electronics Technology Co., Ltd., Huaying Gaokelong Electronics Technology Co., Ltd. Shenzhen Henglongtong Technology Co., Ltd., Guizhou Huajinrun Technology Co. Ltd., CN Huaying Gaokede 552.72 2018-1-1 2021-12-31 Not Y Electronics Technology Co., Ltd., Huaying Gaokelong Electronics Technology Co., Ltd. Shenzhen Henglongtong CN 735.00 2018-1-1 2021-12-31 Not Technology Co., Ltd., Y 251 Konka Group Co., Ltd. Interim Report 2022 Guarantee Cur Execution Guarantor: amount renc Start date End date accomplishe (RMB’0,000) y d or not Guizhou Huajinrun Technology Co. Ltd., Huaying Gaokede Electronics Technology Co., Ltd., Huaying Gaokelong Electronics Technology Co., Ltd., Shenzhen Baili Yong xing Technology Co., Ltd. Konka Ventures CN Development (Shenzhen) 1,322.54 2021-12-16 2022-12-15 Not Y Co., Ltd. AUJET INDUSTRY US 3,316.81 2021-5-1 2023-12-31 Not LIMITED D AUJET INDUSTRY US 1,029.00 2020-9-1 2023-12-31 Not LIMITED D Guizhou Huajinrun Technology Co. Ltd., Guizhou Jiaguida US Technology Co., Ltd., 879.80 2018-1-1 2021-12-31 Not D Guangan Ouqishi Electronic Technology Co., Ltd. Shenzhen Unifortune US Supply Chain Management 1,869.84 2021-6-21 2022-12-31 Not D Co., Ltd. Shenzhen Unifortune US Supply Chain Management 1,112.30 2021-6-22 2022-12-31 Not D Co., Ltd. Wu Guoren and Xiao US 6,933.50 2019-12-31 2024-12-31 Not Yongsong D 4. Borrowings of Funds 252 Konka Group Co., Ltd. Interim Report 2022 Cur Maturity Name of related parties Amount ren Start date date cy Borrowing: CN OCT Group Co. Ltd. 510,910,000.00 2021-10-9 2024-2-25 Y CN OCT Group Co. Ltd. 200,000,000.00 2021-11-16 2024-2-25 Y CN OCT Group Co. Ltd. 1,500,000,000.00 2022-1-10 2024-2-25 Y CN OCT Group Co. Ltd. 500,000,000.00 2022-5-19 2024-2-25 Y CN OCT Group Co. Ltd. 700,000,000.00 2022-5-26 2024-2-25 Y Chuzhou Hanshang Electric CN 105,350,000.00 2022-2-1 2023-1-31 Appliance Co., Ltd. Y Chuzhou Hanshang Electric CN 4,900,000.00 2022-5-30 2023-5-29 Appliance Co., Ltd. Y Konka Industrial Development CN 4,500,000.00 2022-5-25 2023-5-24 (Wuhan) Co., Ltd. Y Total 3,525,660,000.00 Lending: Chongqing Lanlv Moma Real Estate CN 188,430,000.00 2020-11-25 2021-11-24 Development Co., Ltd. Y Yantai Kangyue Investment Co., CN 128,527,000.00 2021-12-16 2022-12-15 Ltd. Y Chuzhou Kangxin Health Industry CN 152,880,000.00 2021-12-18 2022-12-17 Development Co., Ltd. Y Chuzhou Kangxin Health Industry CN 7,350,000.00 2022-1-6 2023-1-4 Development Co., Ltd. Y Chuzhou Kangxin Health Industry CN 167,580,000.00 2022-3-26 2023-3-24 Development Co., Ltd. Y Chuzhou Kangxin Health Industry CN 13,592,600.00 2022-3-22 2023-3-20 Development Co., Ltd. Y Chuzhou Kangjin Health Industrial CN 58,800,000.00 2021-9-16 2022-9-15 Development Co., Ltd. Y Chuzhou Kangjin Health Industrial CN 74,436,380.39 2022-2-26 2022-8-31 Development Co., Ltd. Y 253 Konka Group Co., Ltd. Interim Report 2022 Cur Maturity Name of related parties Amount ren Start date date cy Yantai Kangyun Industrial CN 100,200,000.00 2021-11-23 2022-11-22 Development Co., Ltd. Y Yantai Kangyun Industrial CN 9,490,000.00 2021-11-22 2022-8-24 Development Co., Ltd. Y Yantai Kangyun Industrial CN 13,940,000.00 2021-12-8 2022-8-24 Development Co., Ltd. Y Yantai Kangyun Industrial CN 3,230,000.00 2021-12-29 2022-8-24 Development Co., Ltd. Y Yantai Kangyun Industrial CN 5,640,000.00 2022-1-12 2022-8-24 Development Co., Ltd. Y Yantai Kangyun Industrial CN 10,200,000.00 2022-3-17 2023-1-19 Development Co., Ltd. Y Yantai Kangyun Industrial CN 34,000,000.00 2022-5-23 2022-12-30 Development Co., Ltd. Y Yantai Kangyun Industrial CN 25,000,000.00 2022-6-1 2022-12-30 Development Co., Ltd. Y Dongguan Guankang Hongyu Investment Co., Ltd.(Original CN 196,000,000.00 2021-8-6 2022-8-5 name: Dongguan Konka Investment Y Co., Ltd.) Sichuan Chengrui Real Estate Co., CN 147,245,000.00 2022-1-21 2022-12-7 Ltd. Y Chongqing Liangshan Industrial CN 100,000,000.00 2021-12-2 2022-11-28 Investment Co., Ltd. Y Chongqing Liangshan Industrial CN 75,247,953.20 2021-12-24 2022-12-23 Investment Co., Ltd. Y Xi'an Huasheng Jiacheng Real Estate CN 2022-9-30 20,272,400.00 2022-1-5 Co., Ltd. Y Xi'an Huasheng Jiacheng Real Estate CN 2022-9-30 200,000.00 2022-1-18 Co., Ltd. Y Xi'an Huasheng Jiacheng Real Estate CN 2022-9-30 1,640,000.00 2022-4-18 Co., Ltd. Y Xi'an Huasheng Jiacheng Real Estate CN 2022-9-30 1,051,700,000.00 2022-5-17 Co., Ltd. Y Shandong Econ Technology Co., 50,000,000.00 CN 2022-3-22 2022-12-31 254 Konka Group Co., Ltd. Interim Report 2022 Cur Maturity Name of related parties Amount ren Start date date cy Ltd. Y Shandong Econ Technology Co., CN 83,191,149.03 2022-3-28 2022-12-31 Ltd. Y Shandong Econ Technology Co., CN 49,960,000.00 2022-3-30 2022-12-31 Ltd. Y Total 2,768,752,482.62 5. Information on Assets Transfer and Debt Restructuring by Related Party Same period of Name Content Reporting Period last year Transfer of patents, OCT Group and its software copyrights 12,843,396.23 subsidiaries and associates and trademarks Total 12,843,396.23 5. Information on Remuneration for Key Management Personnel Reporting Period Same period of last year Item (RMB’0,000) (RMB’0,000) Total remuneration 737.41 1,000.44 (III) Balances with Related Party 1. Accounts Receivable Ending balance Opening balance Related party Carrying Bad debt Bad debt Carrying balance balance provision provision Accounts receivable: OCT Group Co., Ltd. and 236,582,796.81 5,082,435.61 112,295,325.56 2,448,228.43 its subsidiaries and associates Shenzhen Yaode 137,931,418.85 68,528,250.38 131,032,162.46 65,516,081.23 Technology Co., Ltd. 255 Konka Group Co., Ltd. Interim Report 2022 Ending balance Opening balance Related party Carrying Bad debt Bad debt Carrying balance balance provision provision HOHO ELECTRICA L & 118,073,849.53 9,374,854.36 113,606,433.75 7,481,903.77 FURNITURE CO., LIMITED Anhui Kaikai Shijie E- commerce Co., 95,060,834.88 5,641,125.48 148,730,451.88 8,135,088.28 Ltd. and its subsidiaries Shenzhen Kanghong xing Smart 39,956,322.21 14,883,305.61 39,940,213.90 6,151,331.52 Technology Co., Ltd. Chuzhou Hanshang Electric 20,187,948.19 411,834.14 45,393,066.82 926,018.56 Appliance Co., Ltd. Shenzhen Konda E- 11,165,355.20 227,773.25 12,099,780.90 247,013.76 display Co., Ltd. Korea Electric Group Co., 11,324,072.76 231,011.08 7,104,826.83 144,938.56 Ltd. and its subsidiaries Shenzhen Jielunte Technology Co., Ltd. and 9,497,073.90 193,740.31 22,468,132.66 458,349.90 its subsidiaries as well as its associated enterprises Subtotal of other related 21,772,079.57 480,578.77 20,262,488.58 438,909.17 parties Total 701,551,751.90 105,054,908.99 652,932,883.34 91,947,863.18 Financing accounts receivable/not es receivable: Korea Electric Group Co., 51,300,000.00 15,000,000.00 Ltd. and its subsidiaries 256 Konka Group Co., Ltd. Interim Report 2022 Ending balance Opening balance Related party Carrying Bad debt Bad debt Carrying balance balance provision provision Chuzhou Hanshang Electric 2,000,000.00 14,000,000.00 Appliance Co., Ltd. Shenzhen Kaiyuan Shengshi 5,676,044.81 Technology Co., Ltd. Anhui Kaikai Shijie E- commerce Co., 92,560.46 1,815,713.26 Ltd. and its subsidiaries Total 59,068,605.27 30,815,713.26 Other receivables: Chongqing Liangshan Industrial 179,857,668.24 3,669,096.43 223,196,349.34 4,553,205.53 Investment Co., Ltd. Jiangxi Meiji Enterprise Co., 93,512,640.31 52,729,155.43 93,512,640.31 52,729,155.43 Ltd. Dai Rong xing 81,507,850.71 81,507,850.71 79,974,500.96 52,816,781.04 Shenzhen Kanghong xing Smart 36,522,782.39 22,998,096.70 36,670,149.78 23,809,925.53 Technology Co., Ltd. OCT Group Co., Ltd. and 35,009,433.26 20,189,768.54 30,429,787.06 19,968,912.07 its subsidiaries and associates Huanjia Group 25,083,675.53 17,507,082.35 25,083,675.53 17,302,185.43 Co., Ltd. HOHO ELECTRICA L & 2,354,929.59 235,963.94 2,237,153.78 224,162.83 FURNITURE CO., LIMITED Hu Zehong 2,314,963.85 47,225.26 Subtotal of other related 625,877.36 11,890.29 117,002.15 46,468.84 parties 257 Konka Group Co., Ltd. Interim Report 2022 Ending balance Opening balance Related party Carrying Bad debt Bad debt Carrying balance balance provision provision Total 456,789,821.24 198,896,129.65 491,221,258.91 171,450,796.70 Prepayments: OCT Group Co., Ltd. and 17,939,748.00 its subsidiaries and associates Pu giường Jiakang 12,349,525.00 Technology Co, Ltd. Shenzhen Kanghong xing Smart 4,298,225.15 4,298,225.15 Technology Co., Ltd. HOHO ELECTRICA L & 2,968,378.45 FURNITURE CO., LIMITED Shenzhen Kangying Semiconductor 2,637,436.84 Technology Co., Ltd. Wiselite International 1,534,918.13 (HK) Limited Subtotal of other related 616,553.49 961,888.99 parties Total 40,809,866.93 6,795,032.27 Current portion of non-current assets: Feidi Technology (Shenzhen) 3,283,943.14 10,395,523.78 Co., Ltd. and its subsidiaries Total 3,283,943.14 10,395,523.78 Other current assets: 258 Konka Group Co., Ltd. Interim Report 2022 Ending balance Opening balance Related party Carrying Bad debt Bad debt Carrying balance balance provision provision Xi'an Huasheng Jiacheng Real 1,073,812,400.00 Estate Co., Ltd. Chuzhou Kangxin Health 352,232,224.99 339,338,066.67 Industry Development Co., Ltd. Chongqing Lanlv Moma Real Estate 212,842,153.29 205,263,079.97 Development Co., Ltd. Dongguan Guankang Hongyu Investment Co., Ltd. (formerly 209,746,028.99 211,662,473.43 known as Dongguan Konka Investment Co., Ltd.) Yantai Kangyun Industrial 205,395,866.69 127,164,360.00 Development Co., Ltd. and its subsidiaries Shandong Econ Technology 183,456,400.95 427,620,131.62 Co., Ltd. and its subsidiaries Yantai Kangyue 155,032,123.56 149,862,482.00 Investment Co., Ltd. Sichuan Chengrui Real 152,513,098.89 Estate Co., Ltd. OCT Group Co., Ltd. and 135,296,201.13 163,287,310.66 its subsidiaries and associates 259 Konka Group Co., Ltd. Interim Report 2022 Ending balance Opening balance Related party Carrying Bad debt Bad debt Carrying balance balance provision provision Total 2,680,326,498.49 1,624,197,904.35 Long-term receivables: Feidi Technology (Shenzhen) 565,099.14 Co., Ltd. and its subsidiaries Total 565,099.14 2. Accounts Payable Ending carrying Opening carrying Related party balance balance Accounts payable: Chuzhou Hanshang Electric Appliance Co., Ltd. 33,265,817.40 46,950,863.88 OCT Group Co., Ltd. and its subsidiaries and 16,728,947.13 9,087,624.55 associates Shenzhen Jielunte Technology Co., Ltd. and its 15,933,984.76 30,500,867.67 subsidiaries as well as its associated enterprises Korea Electric Group Co., Ltd. and its subsidiaries 10,557,590.91 9,047,641.17 Shenzhen Konda E-display Co., Ltd. 7,125,686.93 15,522,755.99 Dongguan Kangjia New Materials Technology Co., 5,387,512.62 2,133,853.64 Ltd. Anhui Kaikai Shijie E-commerce Co., Ltd. and its 4,368,888.21 4,370,387.10 subsidiaries Chongqing Ruiyin Renewable Resources Co., Ltd. 4,143,953.82 10,737,902.34 and its subsidiaries Dongguan Kangzhihui Electronics Co., Ltd. 3,186,815.31 6,435,302.72 Subtotal of other related parties 9,665,201.04 9,864,760.22 Total 110,364,398.13 144,651,959.28 Notes payable: Pu giường Jiakang Technology Co, Ltd. 12,690,179.40 22,412,418.23 Shenzhen Jielunte Technology Co., Ltd. and its 11,803,197.61 8,933,479.14 subsidiaries Korea Electric Group Co., Ltd. and its subsidiaries 9,642,827.80 15,984,491.27 Panxu Intelligence Co., Ltd. and its subsidiaries 9,436,111.19 4,782,566.22 Dongguan Kangjia New Materials Technology Co., 6,251,201.46 6,265,841.17 Ltd. 260 Konka Group Co., Ltd. Interim Report 2022 Ending carrying Opening carrying Related party balance balance Chuzhou Hanshang Electric Appliance Co., Ltd. 5,000,000.00 Total 54,823,517.46 58,378,796.03 Contractual liabilities/other current liabilities: OCT Group Co., Ltd. and its subsidiaries and 43,369,937.39 46,611,404.78 associates Sichuan Aimijiakang Technology Co., Ltd. 6,668,541.05 6,360,494.53 Shenzhen Konda E-display Co., Ltd. 4,165,137.82 Subtotal of other related parties 1,754,465.28 1,175,786.84 Total 55,958,081.54 54,147,686.15 Other payables: Chuzhou Hanshang Electric Appliance Co., Ltd. 138,144,081.59 130,054,989.90 Shandong Econ Technology Co., Ltd. and its 33,477,708.16 20,241,596.71 subsidiaries Korea Electric Group Co., Ltd. and its subsidiaries 7,563,796.72 2,340,545.36 OCT Group Co., Ltd. and its subsidiaries and 5,637,591.13 4,008,920.58 associates Shenzhen Kanghong xing Smart Technology Co., 5,348,030.00 1,354,030.00 Ltd. Konka Industrial Development (Wuhan) Co., Ltd. 4,520,876.71 Feidi Technology (Shenzhen) Co., Ltd. and its 2,137,895.10 6,503,608.50 subsidiaries Dongguan Kangjia New Materials Technology Co., 209,400.00 4,923,662.92 Ltd. E3info (Hainan) Technology Co., Ltd. and its 150,383.08 50,166,438.36 subsidiaries Guangdong Wanrun Tongheng Cultural & Tourism 120,212,000.00 Development Co., Ltd. Subtotal of other related parties 11,178,550.28 8,616,834.78 Total 208,368,312.77 348,422,627.11 XII. Contingency (1) Before the Company acquired Jiangxi Konka New Material, Jiangxi Konka New Material and its subsidiaries Xinfeng Microcrystalline and Jiangxi High Transparent Substrate (formerly known as Nano-Grystallized 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 New Material, 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 261 Konka Group Co., Ltd. Interim Report 2022 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 New Material, Xinfeng Microcrystalline and Jiangxi High Transparent Substrate to bear joint and several liability for such debts. On October 31, 2019, Jiangxi Provincial Superior People’s Court 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-Grystallized Glass, Xinfeng Microcrystalline should bear joint and several liability for all debts recognized in this judgment. The defendants appealed against the first-instance judgment and the Supreme People's Court accepted the appeal. On March 24, 2021, the Supreme People's Court of the People's Republic of China made the following ruling: I. Civil Judgment (2018) G.M.CH. No. 110 made by Jiangxi Provincial Superior People's Court is abrogated; II. This case is remanded to Jiangxi Provincial Superior People's Court for retrial. As of the date of issuance of this report, the case is still being tried in the first instance. The actual controller of Jiangxi Konka New Materials, Zhu Xinming, and his spouse, Leng Sumin, as guarantors, provided a total of about RMB 143 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 nanometer 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 about RMB 243 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 honored. (2) As for the dispute of the Company with Luo Zaotong, Luo Jingxia, Luo Zongyin, Luo Zongwu 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 November 22, 2021, the Company applied to Shenzhen Nanshan District People's Court for property preservation. As at the date of issuance of this report, no valid judgment has been made for this case. (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., 262 Konka Group Co., Ltd. Interim Report 2022 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 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 at the date of issuance of this report, property execution is ongoing. (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 Wuhan Intermediate People's Court, and the Court order the defendant to pay Konka Group the bills and interest. As of the date of this report, the case is closed. (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 January 24, 2022, the Intermediate People's Court of Shenzhen Municipality, Guangdong, a public announcement on serving Civil Ruling (2021) Y. 03 M.CH. No. 5253 and the notice on sealing, distraining and freezing of properties to the other party because some principals of the other party were missing. The Court ruled to seal, distrain and freeze the properties of RMB155 million held by the respondents 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. As of the date of issuance of this report, the case is still under trial. (6) As the acceptor failed to pay the commercial bills held by the Company upon maturity, the Company, as the plaintiff, filed a lawsuit to 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 at the date of issuance of this report, the case is on the stage of execution. (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. (defendant) over contracts is RMB380 million. As at the date of issuance of this report, no valid judgment has been made for this case. 263 Konka Group Co., Ltd. Interim Report 2022 (8) The amount of the subject matter involved in the dispute between the Company's subsidiary Konka Investment (plaintiff) and Elion Resources Group Co., Ltd. and Elion Ecological Co., Ltd. (defendant) over capital increase is RMB98 million. The court of arbitration issued an award on 27 January 2022. On 16 February 2022, the enforcement has been filed. On 20 July 2022, the recoveries of RMB15 million were received. And at the date of issuance of this report, this case is in still in progress. (9) 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. As of the date of issuance of this report, no effective judgment has been issued for this case. (10) 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 (defendant) over sales and purchase contracts is RMB90 million. In December 2020, the Company filed a lawsuit to the court. As of the date of issuance of this report, no effective judgment has been issued for this case. (11) As the acceptor failed to pay the commercial bills held by the Company upon maturity, the Company, as the plaintiff, filed a lawsuit to 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. As at the date of issuance of this report, the Court has ordered the defendant to pay Konka Group the bills and corresponding interest, and the case is in execution. (12) The amount of the subject matter involved in the dispute between the Company's subsidiary 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 September 1, 2021, the Intermediate People's Court of Xiamen Municipality, Fu gian, ordered the defendants to pay the plaintiff e-commercial acceptance bills of RMB50 million and the corresponding interest. As of the date of issuance of this report, the case is in the execution stage. (13) 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. (defendant) over the right of recourse for bills is RMB50 million and the corresponding interest. In September 2018, the Company filed a lawsuit with Shenzhen Intermediate People’s 264 Konka Group Co., Ltd. Interim Report 2022 Court, which 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 at the date of issuance of this report, the case is in execution, and the Company has applied to the court for adding shareholders of the person subject to enforcement as co-person subject to enforcement. (14) 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 December 7, 2021, Anhui Konka filed an arbitration with the Shenzhen Court of International Arbitration. As at the date of issuance of this report, no valid judgment has been made for this case. (15) 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. (defendant) over freight forwarding contracts in maritime and open sea waters is RMB38 million. On April 26, 2021, Anhui Konka applied to Shanghai Maritime Court for compulsory execution. On June 7, 2021, the Court accepted the case and numbered it {2021) H. 72 ZH. No. 205. On 14 October 2021, Shanghai Maritime Court issued an executive order and ended this execution. As at the date of issuance of this report, the case is in the final stage of execution. XIII. Commitment 1. Capital Commitments Item Ending balance Beginning balance Contract signed but hasn’t been recognized in financial statements -Commitment on construction and purchase of long-lived assets -Large amount contract 1,477,088,701.23 954,751,938.62 -Foreign investment commitments Total 1,477,088,701.23 954,751,938.62 2. Other Commitments As of 30 June 2022, there were no other significant commitments for the Company to disclose. XIV. Events after Balance Sheet Date 1. No significant non-adjusted events 2. Sales returns 265 Konka Group Co., Ltd. Interim Report 2022 No such cases in the Reporting Period. 3. There were no other significant events after balance sheet date for the Company. XV. Other Significant Events The Company has no other significant events. XVI. Notes of Main Items in the Financial Statements of the Company as the Parent 1. Accounts Receivable (1) Accounts Receivable Listed by Withdrawal Methods for Bad Debts Ending balance Carrying balance Bad debt provision With draw Category Proport al Carrying value Amount Amount ion (%) propo rtion (%) Accounts receivable of expected credit 961,378,586.17 14.96 659,442,459.30 68.59 301,936,126.87 losses withdrawn individuall y Accounts receivable of expected credit losses withdrawn by portfolio Of which: Aging 520,881,762.23 8.10 188,182,787.20 36.13 332,698,975.03 portfolio 266 Konka Group Co., Ltd. Interim Report 2022 Ending balance Carrying balance Bad debt provision With draw Category Proport al Carrying value Amount Amount ion (%) propo rtion (%) Rel ated party 4,945,431,882.58 76.94 4,945,431,882.58 group Subtotal of 5,466,313,644.81 85.04 188,182,787.20 3.44 5,278,130,857.61 portfolios Total 6,427,692,230.98 100.00 847,625,246.50 13.19 5,580,066,984.48 (Continued) Opening balance Carrying balance Bad debt provision Withd Category Propor rawal Carrying value Amount tion Amount propo (%) rtion (%) Accounts receivable of expected credit 963,517,996.45 18.14 660,600,525.26 68.56 302,917,471.19 losses withdrawn individuall y Accounts receivable of expected credit 267 Konka Group Co., Ltd. Interim Report 2022 Opening balance Carrying balance Bad debt provision Withd Category Propor rawal Carrying value Amount tion Amount propo (%) rtion (%) losses withdrawn by portfolio Of which: Aging 666,828,622.16 12.56 181,017,964.57 27.15 485,810,657.59 portfolio Rel ated party 3,679,956,748.33 69.30 3,679,956,748.33 group Subtotal of 4,346,785,370.49 81.86 181,017,964.57 4.16 4,165,767,405.92 portfolios Total 5,310,303,366.94 100.00 841,618,489.83 15.85 4,468,684,877.11 (2) Provision for bad debts of accounts receivable provided individually Ending balance Withdra Name Bad debt wal Withdrawal Carrying balance provision proporti reason on (%) Shanghai Huaxin International 299,136,676.70 270,016,218.90 90.27 Debt default Group Co., Ltd. Hongtu Sanbao High-tech Agreement 200,000,000.00 80,000,000.00 40.00 Technology Co., reorganization Ltd. Tewoo Group Co., Judicial 200,000,000.00 100,000,000.00 50.00 Ltd. reorganization Zhongfu Tiangong Expected to be 71,689,096.65 46,662,912.82 65.09 Construction difficult to recover 268 Konka Group Co., Ltd. Interim Report 2022 Ending balance Withdra Name Bad debt wal Withdrawal Carrying balance provision proporti reason on (%) Group Co., Ltd. in full CCCC First Expected to be Harbor 55,438,105.00 48,915,975.00 88.24 difficult to recover Engineering in full Company Ltd. China Energy Expected to be Electric Fuel Co., 50,000,000.00 42,500,000.00 85.00 difficult to recover Ltd. in full Expected to be Others 85,114,707.82 71,347,352.58 83.82 difficult to recover in full Total 961,378,586.17 659,442,459.30 68.59 1) Bad debt provision for accounts receivable made as per portfolio 1 Among Groups, Withdrawal of Expected Credit Loss by Aging Ending balance Aging Bad debt Withdrawal Carrying balance provision proportion (%) Within 1 year 312,348,662.67 6,371,912.64 2.04 1 to 2 years 19,685,880.67 1,972,525.26 10.02 2 to 3 years 1,835,208.46 416,408.80 22.69 3 to 4 years 21,611,816.47 14,021,746.54 64.88 Over 4 years 165,400,193.96 165,400,193.96 100.00 Total 520,881,762.23 188,182,787.20 36.13 2 Among Groups, Withdrawal of Expected Credit Loss by Adopting Other Method Ending balance Aging Bad debt Withdrawal Carrying balance provision proportion (%) Related party group 4,945,431,882.58 Total 4,945,431,882.58 (3) Accounts Receivable Listed by Aging Portfolio 269 Konka Group Co., Ltd. Interim Report 2022 Aging Ending balance Within 1 year 4,331,772,218.44 1 to 2 years 792,569,876.16 2 to 3 years 381,345,049.07 3 to 4 years 747,219,290.52 Over 4 years 174,785,796.79 Subtotal 6,427,692,230.98 Less: bad debt provision 847,625,246.50 Total 5,580,066,984.48 (4) Information of Bad Debt Provision in the Reporting Period Changed amount Category Beginning balance Collected or Withdrawn reversed Bad debt provision of 841,618,489.83 6,006,756.67 accounts receivable Total 841,618,489.83 6,006,756.67 (Continued) Changed amount Category Ending balance Write-off or verified Other Bad debt provision of accounts 847,625,246.50 receivable Total 847,625,246.50 (5) No actual verified accounts receivable in the Reporting Period. (6) Receivables with Top 5 Ending Balance Collected by Arrears Party The total amount of receivables with top 5 ending balance collected by arrears party for the Reporting Period was RMB4,947,822,271.69, accounting for 76.98% of the total ending balance of accounts receivable. The total ending balance of bad debt provision correspondingly withdrawn was RMB270,016,218.91. (7) There Was No Account Receivable Terminated the Recognition owning to the Transfer of the Financial Assets. (8) There Was No Asset and Liability Formed due to the Transfer of Accounts Receivable and Continued Involvement in the Reporting Period. 2. Other Receivables 270 Konka Group Co., Ltd. Interim Report 2022 Item Ending balance Beginning balance Interest receivable 2,907,863.11 2,002,526.91 Dividends receivable 388,722,154.83 383,943,256.80 Other receivables 9,859,342,231.28 10,539,120,447.82 Total 10,250,972,249.22 10,925,066,231.53 2.1 Interest Receivable (1) Category of Interests Receivable Item Ending balance Beginning balance Term deposits 2,907,863.11 2,002,526.91 Total 2,907,863.11 2,002,526.91 2.2 Dividends Receivable (1) Category of Dividends Receivable Investee Ending balance Opening balance Hong Kong Konka Limited 108,722,154.83 103,943,256.80 Suining Konka Industrial Park 280,000,000.00 280,000,000.00 Development Co., Ltd. Total 388,722,154.83 383,943,256.80 2.3 Other Receivables (1) Classified by Account Nature Nature Ending carrying balance Opening carrying balance Intercourse funds among 10,906,646,965.40 11,464,671,000.88 subsidiaries Energy-saving subsidies receivable 141,549,150.00 141,549,150.00 Intercourse funds with other related 54,312,816.73 50,667,315.53 parties Deposit and margin 11,983,388.91 10,533,532.11 Others 143,193,401.14 253,002,153.59 Total 11,257,685,722.18 11,920,423,152.11 (2) Withdrawal of Bad Debt Provision for Other Receivables Bad debt Stage 1 Stage 2 Stage 3 Total provision 271 Konka Group Co., Ltd. Interim Report 2022 Expected loss Expected Expected credit in the duration credit loss of losses for the entire (credit the next 12 duration (with impairment not months credit impairment) occurred) Balance as at 1 January 2,036,471.61 54,584,345.62 1,324,681,887.06 1,381,302,704.29 2022 In the Reporting Period, Carrying amount of -37,962.09 37,962.09 other receivables on 1 January 2022 - Transferred to the Phase -37,962.09 37,962.09 II - Transferred to the Phase III - Transferred back to the Phase II - Transferred back to the Phase I Withdrawal -904,284.12 964,524.72 16,980,546.01 17,040,786.61 Recovery Write-off Verification Other changes Balance on 30 June 1,094,225.40 55,586,832.43 1,341,662,433.07 1,398,343,490.90 2022 272 Konka Group Co., Ltd. Interim Report 2022 (3) Withdrawing bad debt provision for other receivables according to group Ending balance Carrying amount Bad debt provision With Categor draw Propo y al Carrying value Amount rtion Amount prop (%) ortio n (%) Other receivab les of expected credit 1,928,623,498.02 17.13 1,341,662,433.07 69.57 586,961,064.95 losses withdra wn individu ally Other receivab les of bad debt provisio n withdra wn by credit risk characte ristic portfolio : Aging 139,585,436.26 1.24 51,785,550.23 37.10 87,799,886.03 portfolio Low- risk 18,460,535.94 0.16 4,895,507.60 26.52 13,565,028.34 portfolio 273 Konka Group Co., Ltd. Interim Report 2022 Ending balance Carrying amount Bad debt provision With Categor draw Propo y al Carrying value Amount rtion Amount prop (%) ortio n (%) Related party 9,171,016,251.96 81.46 9,171,016,251.96 group Subtotal of 9,329,062,224.16 82.87 56,681,057.83 0.61 9,272,381,166.33 portfolio s Total 11,257,685,722.18 100.00 1,398,343,490.90 12.42 9,859,342,231.28 (Continued) Beginning balance Carrying balance Bad debt provision Withd Catego Propo rawal ry Carrying value Amount rtion Amount propo (%) rtion (%) Other receiva bles of expecte d credit 1,917,144,244.04 16.08 1,324,681,887.06 69.10 592,462,356.98 losses withdra wn individu ally Other receiva bles of 274 Konka Group Co., Ltd. Interim Report 2022 Beginning balance Carrying balance Bad debt provision Withd Catego Propo rawal ry Carrying value Amount rtion Amount propo (%) rtion (%) bad debt provisio n withdra wn by credit risk characte ristic portfoli o: Agin g 188,615,848.46 1.58 52,782,559.62 27.98 135,833,288.84 portfoli o Low- risk 17,318,036.76 0.15 3,838,257.61 22.16 13,479,779.15 portfoli o Relat ed party 9,797,345,022.85 82.19 9,797,345,022.85 group Subtotal of 10,003,278,908.07 83.92 56,620,817.23 0.57 9,946,658,090.84 portfoli os Total 11,920,423,152.11 100.00 1,381,302,704.29 11.59 10,539,120,447.82 (4) Other Receivables Listed by Aging Aging Ending balance 275 Konka Group Co., Ltd. Interim Report 2022 Aging Ending balance Within 1 year 5,107,628,848.08 1 to 2 years 4,077,800,371.98 2 to 3 years 325,840,422.22 3 to 4 years 1,387,777,872.27 4 to 5 years 68,404,107.69 Over 5 years 290,234,099.94 Subtotal 11,257,685,722.18 Less: bad debt provision 1,398,343,490.90 Total 9,859,342,231.28 (5) Bad Debt Provision for Other Receivables The amount of bad debt provision for the Reporting Period was RMB17,040,786.61, and other receivables actually written off in this period were RMB0.00. (6) Other Receivables Actually Written off for the Reporting Period There were no other receivables actually written off for the Reporting Period. (7) Other Receivables with Top 5 Ending Balances Collected by Arrears Party The total amount of other receivables with top 5 ending balance collected by arrears party this year was RMB7,721,891,966.19, accounting for 68.59% of the total ending balance of other receivables. The total ending balance of bad debt provision correspondingly withdrawn was RMB1,154,255,128.49. (8) There were no other receivables derecognized due to the transfer of financial assets for the Reporting Period. (9) There were no assets or liabilities formed due to the transfer and the continued involvement of other receivables for the Reporting Period. 276 Konka Group Co., Ltd. Interim Report 2022 3. Long-term Equity Investment (1) Category of Long-term Equity Investment Ending balance Beginning balance Item Depreciation Depreciation Carrying amount Carrying value Carrying amount Carrying value reserve reserve Investment to 6,823,951,033.98 431,911,933.01 6,392,039,100.97 6,697,991,519.67 442,644,418.70 6,255,347,100.97 subsidiaries Investment to associates 2,771,232,922.34 238,255,149.48 2,532,977,772.86 2,618,520,670.18 240,725,547.51 2,377,795,122.67 and joint ventures Total 9,595,183,956.32 670,167,082.49 8,925,016,873.83 9,316,512,189.85 683,369,966.21 8,633,142,223.64 (2) Investment to Subsidiaries Provision for Ending balance Investee Beginning balance Increase Decrease Ending balance impairment this of depreciation period reserve Konka Ventures 2,550,000.00 2,550,000.00 Anhui Konka 122,780,937.98 122,780,937.98 Konka Factoring 300,000,000.00 300,000,000.00 Konka Unifortune 15,300,000.00 15,300,000.00 Wankaida 10,000,000.00 10,000,000.00 277 Konka Group Co., Ltd. Interim Report 2022 Provision for Ending balance Investee Beginning balance Increase Decrease Ending balance impairment this of depreciation period reserve Dongguan Konka 274,783,988.91 274,783,988.91 Konka Europe 3,637,470.00 3,637,470.00 Telecommunication 360,000,000.00 360,000,000.00 Technology Mobile 100,000,000.00 100,000,000.00 Interconnection Anhui Tong giường 779,702,612.22 779,702,612.22 Kangjiatong 29,349,800.00 1,400,000.00 30,749,800.00 Pengrun 25,500,000.00 25,500,000.00 Technology Beijing Konka 200,000,000.00 200,000,000.00 Electronic Konka Circuit 287,650,000.00 287,650,000.00 Hong Kong Konka 781,828.61 781,828.61 Konka Investment 500,000,000.00 500,000,000.00 Electronics 1,000,000,000.00 1,000,000,000.00 Technology Konka Huanjia 91,800,000.00 Shanghai Konka 40,000,000.00 40,000,000.00 Jiangxi Konka 349,568,066.99 349,568,066.99 340,111,933.01 278 Konka Group Co., Ltd. Interim Report 2022 Provision for Ending balance Investee Beginning balance Increase Decrease Ending balance impairment this of depreciation period reserve Shenzhen Nianhua 30,000,000.00 30,000,000.00 Shenzhen 100,000,000.00 100,000,000.00 KONSEMI Konka Eco- 50,000.00 50,000.00 Development Suining Konka 200,000,000.00 200,000,000.00 Industrial Park Konka Ronghe 5,100,000.00 5,100,000.00 Suining Electronic Technological 200,000,000.00 200,000,000.00 Innovation Shenzhen Chuangzhi 10,000,000.00 10,000,000.00 Electrical Appliances Kanghong (Yantai) Environmental 1,025,100.00 1,025,100.00 Protection Chongqing 25,500,000.00 25,500,000.00 Kang xing rui 279 Konka Group Co., Ltd. Interim Report 2022 Provision for Ending balance Investee Beginning balance Increase Decrease Ending balance impairment this of depreciation period reserve Chongqing Optoelectronic 933,333,333.33 933,333,333.33 Technology Research Institute Kowin Memory 92,520,000.00 92,520,000.00 (Shenzhen) Jiangkang (Shanghai) 90,000,000.00 90,000,000.00 Technology Ningbo Kanghr 510.00 510.00 Electrical Appliance Konka Intelligent 10,000,000.00 10,000,000.00 Manufacturing Yibin Kangrun 67,000,000.00 67,000,000.00 Konka Material 9,205,452.93 9,205,452.93 Industrial and Trade 50,000,000.00 50,000,000.00 Technology Konka Huazhong 30,000,000.00 30,000,000.00 Sichuan Chengrui 8,000.00 19,992,000.00 20,000,000.00 Guizhou Kanggui 70,000,000.00 70,000,000.00 280 Konka Group Co., Ltd. Interim Report 2022 Provision for Ending balance Investee Beginning balance Increase Decrease Ending balance impairment this of depreciation period reserve Material Technology Nantong Kanghai 15,300,000.00 15,300,000.00 Jiangxi Konka 50,000,000.00 50,000,000.00 High-tech Park Shangrao Konka Electronic Technology Innovation Zhe gian g Konka Electronic Zhe gian g Konka Technology Industry Total 6,255,347,100.97 156,692,000.00 20,000,000.00 6,392,039,100.97 431,911,933.01 (3) Investment to Joint Ventures and Associated Enterprises Investee Closing Balance of Increase/decrease Last Period 281 Konka Group Co., Ltd. Interim Report 2022 Adjustment of Gains and losses Additional Investment other recognized under the investment reduced comprehensive equity method income Anhui Kaikai Shijie E-commerce Co., Ltd. 17,400,738.44 Kunshan Kangsheng Investment 222,683,160.16 -4,747,257.35 Development Co., Ltd. Chutian Dragon Co., Ltd. 647,490,626.94 82,158,766.96 13,641,260.41 Helong gian g Longkang Zhijia Technology 1,157,647.82 1,157,647.82 Co., Ltd. Shaanxi Silk Road Cloud Intelligent Tech 14,113,227.58 183,461.77 Co., Ltd. Shenzhen Kanghong xing Intelligent Technology Co., Ltd. Shenzhen Zhongbin Konka Technology Co., Ltd. Shenzhen Kangjia Jiapin Intelligent 3,921,788.17 725,889.93 Electrical Apparatus Technology Co., Ltd. Shenzhen Bosser New Materials Co., Ltd. 60,453,041.58 1,324,755.44 Shenzhen Yaode Technology Co., Ltd. Wuhan Tianyuan Environmental 325,645,840.91 11,179,621.33 Protection Co., Ltd. Shenzhen KONKA E-display Co., Ltd. 13,097,210.11 -1,564,990.77 282 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Adjustment of Closing Balance of Gains and losses Investee Last Period Additional Investment other recognized under the investment reduced comprehensive equity method income Chuzhou Konka Technology Industry 5,899,324.39 -1,305,129.50 Development Co., Ltd. Chuzhou Kangjin Health Industrial 15,251,484.01 24,500,000.00 Development Co., Ltd. Nantong Kang gian Technology Industrial Park Operations and Management Co., 14,610,460.04 -588,275.99 Ltd. Shenzhen Kangyue Enterprise Co., Ltd. 3,102,893.60 -70,623.90 Dongguan Guankang Yuhong Investment 17,762,197.93 -12,145,407.83 Co., Ltd. Chongqing Yuanlv Benpao Real Estate -261,753.11 261,753.11 Co., Ltd. Chuzhou Kangxin Health Industry 12,801,830.75 -1,370,767.86 Development Co., Ltd. E3info (Hainan) Technology Co., Ltd. 36,574,609.73 Shenzhen Kangpeng Digital Technology 5,702,518.20 -1,164,839.41 Co., Ltd. Yantai Kangyun Industrial Development 8,536,245.03 -2,011,566.36 283 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Adjustment of Closing Balance of Gains and losses Investee Last Period Additional Investment other recognized under the investment reduced comprehensive equity method income Co., Ltd. Shandong Econ Technology Co., Ltd. 823,028,634.77 59,671,172.50 Dongguan Kangjia New Materials 3,919,896.55 -451,280.15 Technology Co., Ltd. Shenzhen E2info Network Technology 124,903,499.07 17,622,654.08 Co., Ltd. Sichuan Chengrui Real Estate Co., Ltd. 12,250,023.10 -2,702,345.77 Total 2,377,795,122.67 36,750,023.10 83,316,414.78 76,488,083.68 (Continued) Increase/decrease Ending balance Cash bonus or Withdrawal of Ending balance of Investee Other equity profits impairment Others (Carrying value) depreciation reserve changes announced to provision issue Anhui Kaikai Shijie E-commerce Co., Ltd. 17,400,738.44 Kunshan Kangsheng Investment 217,935,902.81 Development Co., Ltd. Chutian Dragon Co., Ltd. -2,854,608.30 4,410,993.60 571,707,518.49 284 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Ending balance Cash bonus or Withdrawal of Ending balance of Investee Other equity profits impairment Others (Carrying value) depreciation reserve changes announced to provision issue Helong gian g Longkang Zhijia Technology Co., Ltd. Shaanxi Silk Road Cloud Intelligent Tech 14,296,689.35 Co., Ltd. Shenzhen Kanghong xing Intelligent 5,158,909.06 Technology Co., Ltd. Shenzhen Zhongbin Konka Technology Co., Ltd. Shenzhen Kangjia Jiapin Intelligent 4,647,678.10 Electrical Apparatus Technology Co., Ltd. Shenzhen Bosser New Materials Co., Ltd. 61,777,797.02 18,536,771.07 Shenzhen Yaode Technology Co., Ltd. 214,559,469.35 Wuhan Tianyuan Environmental Protection 2,770,200.00 334,055,262.24 Co., Ltd. Shenzhen KONKA E-display Co., Ltd. 11,532,219.34 Chuzhou Konka Technology Industry 4,594,194.89 Development Co., Ltd. Chuzhou Kangjin Health Industrial 39,751,484.01 285 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Ending balance Cash bonus or Withdrawal of Ending balance of Investee Other equity profits impairment Others (Carrying value) depreciation reserve changes announced to provision issue Development Co., Ltd. Nantong Kang gian Technology Industrial 14,022,184.05 Park Operations and Management Co., Ltd. Shenzhen Kangyue Enterprise Co., Ltd. 3,032,269.70 Dongguan Guankang Yuhong Investment 5,616,790.10 Co., Ltd. Chongqing Yuanlv Benpao Real Estate Co., Ltd. Chuzhou Kangxin Health Industry 11,431,062.89 Development Co., Ltd. E3info (Hainan) Technology Co., Ltd. 36,574,609.73 Shenzhen Kangpeng Digital Technology 4,537,678.79 Co., Ltd. Yantai Kangyun Industrial Development 6,524,678.67 Co., Ltd. Shandong Econ Technology Co., Ltd. 135,296,760.09 1,017,996,567.36 Dongguan Kangjia New Materials 3,468,616.40 Technology Co., Ltd.. 286 Konka Group Co., Ltd. Interim Report 2022 Increase/decrease Ending balance Cash bonus or Withdrawal of Ending balance of Investee Other equity profits impairment Others (Carrying value) depreciation reserve changes announced to provision issue Shenzhen E2info Network Technology Co., 142,526,153.15 Ltd. Sichuan Chengrui Real Estate Co., Ltd. 9,547,677.33 Total 132,442,151.79 7,181,193.60 2,532,977,772.86 238,255,149.48 287 Konka Group Co., Ltd. Interim Report 2022 4. Operating Revenue and Cost of Sales (1) Operating Revenue and Cost of Sales Reporting Period Same Period of last year Item Revenue Cost Revenue Cost Main operati 795,988,114.95 904,792,276.47 1,049,267,610.79 1,005,212,983.03 ons Other operati 141,186,691.51 50,784,505.04 152,113,795.91 74,048,575.31 ons Total 937,174,806.46 955,576,781.51 1,201,381,406.70 1,079,261,558.34 5. Investment Income Same Period of Item Reporting Period last year Long-term equity investment income 76,488,083.68 6,396,453.37 accounted by equity method Investment income from disposal of long-term 152,614,987.18 167,692,365.06 equity investment Investment income from disposal of financial 21,845,500.00 assets at fair value through profit or loss Interest income from holding of debt obligation 2,010,000.00 860,000.00 investments Total 231,113,070.86 196,794,318.43 XVII. Approval of Financial Statements The financial statement was approved on 23 August 2022 by the Board of Directors. 288 Konka Group Co., Ltd. Interim Report 2022 XVIII. Supplementary Materials 1. Items and Amounts of Non-recurring Profit or Loss Item Amount Note Gains/losses from the disposal of non-current assets 657,751,392.73 Tax rebates, reductions or exemptions due to approval beyond authority or the lack of official approval documents Government grants recognized in the current period, except for those acquired in the ordinary course of 335,987,367.04 business or granted at certain quotas or amounts according to the government’s unified standards Dispossession surcharge to non-financial institutions included in the current profit and loss Profits arising from business combination when the combined cost is less than the recognized fair value of net assets of the mergered company Gain/Loss on non-monetary asset swap Gain/Loss on entrusting others with investments or asset management Asset impairment provisions due to acts of God such as natural disasters Gain/Loss from debt restructuring Expenses on business reorganization, such as expenses on staff arrangements, integration, etc. Gain/Loss on the part over the fair value due to transactions with distinctly unfair prices Current net profit or loss of subsidiaries acquired in business combination under the same control from period-beginning to combination date Gains and losses arising from contingencies unrelated to the normal operation of the company's business Gain/loss from change of fair value of trading financial assets and liabilities, and derivative financial assets and liabilities, and investment gains from disposal of trading financial assets and liabilities, and derivative 32,966,971.77 financial assets and liabilities, and investment in other obligatory rights, other than valid hedging related to the Company’s common businesses Reversal of provision for impairment test of receivables and contract assets impairment Gain/loss on entrustment loans 54,416,927.25 289 Konka Group Co., Ltd. Interim Report 2022 Item Amount Note Gain/loss on change in fair value of investment property of which the follow-up measurement is carried out adopting fair value method Effect on current profit or loss when a one-off adjustment is made to current profit or loss according to requirements of taxation, accounting and other relevant laws and regulations Custodian fees earned from entrusted operation Other non-operating income and expense other than the 26,896,814.20 above Other profit and loss items in line with the definition of non-recurring gains and losses Subtotal 1,108,019,472.99 Less: Income tax effects 135,264,660.61 Minority shareholders' equity impact (after tax) 57,580,191.84 Total 915,174,620.54 (1) The explanation of the Company to “Project confirmed with the definition of non-recurring gains and losses” and define non-recurring gains and losses as recurring gains and losses according to the nature and features of normal business operations of it. Item Amount Reason Government subsidies which are closely related to the Software tax normal business of the company and which are in 7,949,955.87 refund accordance with national policies and certain standard quota or quantitative amount Total 7,949,955.87 2. Return on Equity and Earnings Per Share Weighted average EPS (Yuan/share) Profit in Reporting Period ROE (%) EPS-basic EPS-diluted Net profit attributable to ordinary shareholders of the Company as the 1.87% 0.0718 0.0718 Parent Net profit attributable to ordinary shareholders of the Company as the -8.03% -0.3083 -0.3083 Parent before exceptional gains and 290 Konka Group Co., Ltd. Interim Report 2022 Weighted average EPS (Yuan/share) Profit in Reporting Period ROE (%) EPS-basic EPS-diluted losses 3. 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 ( 2 ) Net Profit and Equity Differences under CAS and Foreign Accounting Standards □ Applicable √ Not applicable The Board of Directors Konka Group Co., Ltd. 24 August 2022 291