Konka Group Co. Ltd. Annual Report 2022

KONKAGROUPCO. LTD.ANNUALREPORT 2022

March 2023

1Konka Group Co. Ltd. Annual 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 Ping Heng the head of the Company’s financial department (equivalent to

financial manager) hereby guarantee that the Financial Statements carried in this Report are

factual accurate and complete.All the Company’s directors have attended the Board meeting for the review of this Report

and its summary.Any plans for the future or other forward-looking statements mentioned in this Report and its

summary shall NOT be considered as absolute promises of the Company to investors.Therefore investors are reminded to exercise caution when making investment decisions.The Company has no final dividend plan either in the form of cash or stock.This Report and its summary have been prepared in both Chinese and English. Should there

be any discrepancies or misunderstandings between the two versions the Chinese versions

shall prevail.

2Konka Group Co. Ltd. Annual Report 2022

Table of Contents

Part I Important Notes Table of Contents and Defin... 2

Part II Corporate Information and Key Financial In... 9

Part III Management Discussion and Analysis..........13

Part IV Corporate Governance.........................38

Part V Environmental and Social Responsibility...... 62

Part VI Significant Events.......................... 73

Part VII Share Changes and Shareholder Information...96

Part VIII Preferred Shares..........................102

Part IX Corporate Bonds.............................103

Part X Financial Statements.........................109

3Konka Group Co. Ltd. Annual Report 2022

Documents Available for Reference

1. The financial statements with the signatures and seals of the Company’s legal representative

Chief Financial Officer and head of the financial department;

2. The original copy of the Independent Auditor’s Report with the seal of the CPA firm and the

signatures & seals of the certified public accountants;

3. The originals of all the Company’s documents and announcements disclosed to the public in the

Reporting Period;

4. This Report and its summary with the signature of the Company’s legal representative and the

seal of the Company; and

5. Other relevant materials.

4Konka Group Co. Ltd. Annual 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 Tongchuang Anhui Konka Tongchuang 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.Shengxing Industrial Shenzhen Konka Shengxing 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.

5Konka Group Co. Ltd. Annual 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

Institute Chongqing Konka Optoelectronic Technology Research Institute Co. Ltd.Yibin Kangrun Yibin Kangrun Environmental Technology Co. Ltd.Yibin Kangrun Medical Yibin Kangrun Medical Waste Centralized Treatment Co. Ltd.Yibin Kangrun Environmental Protection Yibin Kangrun Environmental Protection Power Generation Co. Ltd.Ningbo Khr Electric Appliance Ningbo Khr Electric Appliance Co. Ltd.Jiangxi Konka Jiangxi Konka New Material Technology Co. Ltd.Jiangxi High Transparent Substrate Jiangxi High Transparent Substrate Material Technology Co. Ltd.Jiangsu Konka Special Material Jiangsu Konka Special Material Technology Co. Ltd.Xinfeng Microcrystalline Jiangxi Xinfeng Microcrystalline Jade Co. Ltd.Konka Huanjia Konka Huanjia Environmental Technology Co. Ltd.Konka Huanjia (Henan) Konka Huanjia (Henan) Environmental Technology Co. Ltd.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 (Zhejiang) Co. Ltd.Chongqing Kangxingrui Chongqing Kangxingrui Environmental Technology Co. Ltd.Chongqing Kangxingrui Automobile Recycling Chongqing Kangxingrui 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.

6Konka Group Co. Ltd. Annual 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

(Shenzhen) Chain Kingdom Memory Technologies (Shenzhen) Co. Limited

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.Kanghong Dongsheng Shenzhen Kanghong Dongsheng Investment Partnership (Limited Partnership)

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 Kangxingrui 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.Jiangxi Konka High-tech Park Jiangxi Konka High-tech Park Operation and Management Co. Ltd.Shangrao Konka Electronic Technology

Innovation Shangrao Konka Electronic Technology Innovation Co. Ltd.Guizhou Konka New Energy Guizhou Konka New Energy Material Technology Co. Ltd.Zhejiang Konka Electronic Zhejiang Konka Electronic Technology Co. Ltd.Zhejiang Konka Technology Industry Zhejiang Konka Technology Industry Development Co. Ltd.Sichuan Hongxinchen Sichuan Hongxinchen Real Estate Development Co. Ltd.Xi'an Konka Intelligent Xi'an Konka Intelligent Appliance Co. Ltd.Xi'an Konka Network Xi'an Konka Network Technology Co. Ltd.Xi'an Kanghong Technology Industry Xi'an Kanghong Technology Industry Development Co. Ltd.Xi'an Konka Intelligent Technology Xi'an Konka Intelligent Technology Development Co. Ltd.

7Konka Group Co. Ltd. Annual Report 2022

Chongqing Fangbing Real Estate Chongqing Fangbing Real Estate Co. Ltd.Chongqing Konka Low Carbon Chongqing Konka Low Carbon Technology Co. Ltd.Kanghong Xintong Shenzhen Kanghong Xintong Investment Partnership (Limited Partnership)

Songyang Industry Operation Songyang Konka Smart Industry Operation Management Co. Ltd.Kangyan Technology Shenzhen Kangyan Technology Co. Ltd.Konka Photovoltaic Technology Konka Photovoltaic Technology Co. Ltd.Songyang Konka Intelligent Songyang Konka Intelligent Technology Development Co. Ltd.Konka North China Konka North China (Tianjin) Technology Co. Ltd.Zhongshan Kanghong Zhongshan Kanghong Electronic Technology Co. Ltd.Digital Technology Shenzhen Konka Digital Technology Development Co. Ltd.CSRC The China Securities Regulatory Commission

SZSE The Shenzhen Stock Exchange

CSRC Shenzhen The Shenzhen Bureau of the China Securities Regulatory Commission

RMB RMB’0000 RMB’00000000 Expressed in the Chinese currency of RMB expressed in tens of thousands ofRMB expressed in hundreds of millions of RMB

8Konka Group Co. Ltd. Annual 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

Previous stock name (if any) N/A

Stock exchange for stock listing Shenzhen Stock Exchange

Company name in Chinese 康佳集团股份有限公司

Abbr. 康佳集团

Company name in English (if any) KONKAGROUP CO.LTD

Abbr. (if any) KONKAGROUP

Legal representative Zhou Bin

Registered address 15-24/F Konka R&D Center 28 Keji South Twelfth Road Science and Technology ParkYuehai Street Nanshan District Shenzhen Guangdong Province China

Zip code 518057

On 1 July 2015 due to the relocation of the Company Headquarters the registered

Past changes of registered address address has changed from OCT Nanshan District Shenzhen Guangdong Province Chinato 15-24/F Konka R&D Center 28 Keji South Twelfth Road Science and Technology

Park Yuehai Street Nanshan District Shenzhen Guangdong Province China.Office address 15-24/F Konka R&D Center 28 Keji South Twelfth Road Science and Technology ParkYuehai Street Nanshan District Shenzhen Guangdong Province China

Zip code 518057

Company website www.konka.com

Email address szkonka@konka.com

II Contact Information

Board Secretary Securities Representative

Name Wu Yongjun Miao Leiqiang

Board Secretariat 24/F Konka R&D Center 28 Board Secretariat 24/F Konka R&D Center 28

Address Keji South Twelfth Road Science and Technology Keji South Twelfth Road Science and TechnologyPark Yuehai Street Nanshan District Shenzhen Park Yuehai Street Nanshan District Shenzhen

Guangdong Province China Guangdong Province China

Tel. 0755-26609138 0755-26609138

Fax 0755-26601139 0755-26601139

Email address szkonka@konka.com szkonka@konka.com

III Media for Information Disclosure and Place where this Report Is Lodged

Stock exchange website where this

Report is disclosed Securities Times etc.Media and website where this Report is

disclosed http://www.cninfo.com.cn/new/index

Board Secretariat 24/F Konka R&D Center 28 Keji South Twelfth Road Science

Place where this Report is lodged and Technology Park Yuehai Street Nanshan District Shenzhen Guangdong

Province China

IV Change to Company Registered Information

Unified social credit code 914403006188155783

Change to principal activity of the Company

since going public (if any) No change

Every change of controlling shareholder since

incorporation (if any) No change

9Konka Group Co. Ltd. Annual Report 2022

V Other Information

The independent audit firm hired by the Company:

Name Shinewing Certified Public Accountants LLP

Office address 9/F Block A Fuhua Mansion No.8 Chaoyangmen North Street Dongcheng DistrictBeijing China

Accountants writing signatures Tang Qimei and Liu Lihong

The independent sponsor hired by the Company to exercise constant supervision over the

Company in the Reporting Period:

□ Applicable √ Not applicable

The independent financial advisor hired by the Company to exercise constant supervision over the

Company in the Reporting Period:

□ Applicable √ Not applicable

VI Key Financial Information

Indicate by tick mark whether there is any retrospectively restated datum in the table below.□ Yes √ Not applicable

2022-over-

2022 2021 2021 change 2020

(%)

Operating revenue (RMB) 29607854255.27 49106513669.58 -39.71% 50351836554.87

Net profit attributable to the listed

company’s shareholders (RMB) -1471409748.21 905352997.68 -262.52% 477633250.14

Net profit attributable to the listed

company’s shareholders before -2665550383.07 -3250798107.49 18.00% -2367590806.95

exceptional gains and losses (RMB)

Net cash generated from/used in

operating activities (RMB) -528303041.83 808756394.11 -165.32% 178616528.21

Basic earnings per share (RMB/share) -0.6111 0.3760 -262.53% 0.1984

Diluted earnings per share (RMB/share) -0.6111 0.3760 -262.53% 0.1984

Weighted average return on equity (%) -17.58% 10.33% -27.91% 5.79%

Change of

31

December

31 December 2022 31 December 2021 2022 over 31 December 2020

31

December

2021(%)

Total assets (RMB) 38016368073.05 39874520771.26 -4.66% 49876267493.61

Equity attributable to the listed

company’s shareholders (RMB) 7640399721.99 9095278436.41 -16.00% 8428640176.97

Indicate by tick mark whether the lower of the net profit attributable to the listed company’s

shareholders before and after exceptional gains and losses was negative for the last three

accounting years and the latest independent auditor’s report indicated that there was uncertainty

about the Company’s ability to continue as a going concern.□ Yes √ No

10Konka Group Co. Ltd. Annual Report 2022

Indicate by tick mark whether the lower of the net profit attributable to the listed company’s

shareholders before and after exceptional gains and losses was negative.√ Yes □ No

Item 2022 2021 Note

Operating revenue (RMB) 29607854255.27 49106513669.58

Deductions from operating Scrap sales revenue utilities revenue lease

revenue (RMB) 823347409.73 579266272.20 revenue material sales revenue and otherrevenue irrelevant to the principal operations

Operating revenue net of

deductions (RMB) 28784506845.54 48527247397.38

VII Accounting Data Differences under China’s Accounting Standards for Business

Enterprises (CAS) and International Financial Reporting Standards (IFRS) and Foreign

Accounting Standards

1. Net Profit and Equity under CAS and IFRS

□Applicable √ Not applicable

No difference for the Reporting Period.

2. Net Profit and Equity under CAS and Foreign Accounting Standards

□Applicable √ Not applicable

No difference for the Reporting Period.VIII Key Financial Information by Quarter

Unit: RMB

Q1 Q2 Q3 Q4

Operating revenue 8320135785.93 8575334490.88 7700546365.26 5011837613.20

Net profit attributable

to the listed company’s 103900130.02 68918308.81 -37227714.31 -1607000472.73

shareholders

Net profit attributable

to the listed company’s

shareholders before -418548047.01 -323808134.70 -335657322.29 -1587536879.07

exceptional gains and

losses

Net cash generated

from/used in operating -630928798.94 209669292.21 353663155.55 -460706690.65

activities

Indicate by tick mark whether any of the quarterly financial data in the table above or their

summations differs materially from what have been disclosed in the Company’s quarterly or

interim reports.□ Yes √ No

11Konka Group Co. Ltd. Annual Report 2022

IX Exceptional Gains and Losses

√ Applicable □ Not applicable

Unit: RMB

Item 2022 2021 2020 Note

Gain or loss on disposal of non-current assets

(inclusive of impairment allowance write- 755498679.55 4047094117.70 2431648255.26

offs)

Government subsidies charged to current

profit or loss (exclusive of government

subsidies consistently given in the

Company’s ordinary course of business at 916334616.72 1352377548.16 908546202.24

fixed quotas or amounts as per governmental

policies or standards)

Gain or loss on assets entrusted to other

entities for investment or management 18476648.12

Gain or loss on debt restructuring -5378929.04 19777.25 1127066.94

Gain or loss on fair-value changes in held-

for-trading financial assets and liabilities &

income from disposal of held-for-trading

financial assets and liabilities and available- -17595638.89 67789442.65 96316772.78

for-sale financial assets (exclusive of the

effective portion of hedges that arise in the

Company’s ordinary course of business)

Reversed portions of impairment allowances

for receivables which are tested individually 32624581.58

for impairment

Gain or loss on loan entrustments 119233091.33 80625356.41 64616181.90

Non-operating income and expense other

than the above -97161898.46 48615769.37 54271037.60

Other gains and losses that meet the

definition of exceptional gain/loss -1907936.23 1081111.64

Less: Income tax effects 299999504.47 1190629946.56 544211364.67

Non-controlling interests effects (net of tax) 209414363.46 247833023.58 186647854.72

Total 1194140634.86 4156151105.17 2845224057.09 --

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

Item Amount involved(RMB) Reason

Tax rebates

on software 12377884.09

Government subsidies given in the Company’s ordinary course of business at fixed

quotas or amounts as per government’s uniform standards

12Konka Group Co. Ltd. Annual Report 2022

Part III Management Discussion and Analysis

I Industry Overview for 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) Consumer electronics industry

In the color TV industry China’s color TV industry has entered the “stock” market in recent years.Affected by factors such as industry cycles geopolitical conflicts high commodity prices as well as

insufficient consumption demand the sales volume of the color TV industry dropped by 5.6% year-

on-year (YoY) in the world in 2022; meanwhile as the Internet has provided accessible channels of

distribution the Internet brands competed on their low price with other industries. Consequently

the increasingly fierce price competition made their products less profitable. According to statistics

from All View Cloud (AVC for short) the retail sales volume in China’s color TV market in 2022

was 36345000 units down by 5.2% YoY and the retail sales volume was RMB112.3 billion

declining by 12.9% YoY. In the future as display technologies progress and as technologies such as

Internet of Things (IoT) big data cloud computing artificial intelligence etc. promote the upgrade

of the intelligentialization of various electronic products as well as the iterative update of future

display technologies represented by Mini LED Micro LED new categories of TV have developed

rapidly. Moreover the country has also taken active measures to drive forward household appliance

industry. For example in June 2022 National Radio and Television Administration published the

Opinions on Accelerating the Development of High-definition and Ultra-high-definition Televisions

with an aim to promote ultra-high-definition televisions; in December 2022 the Outline of the

Strategic Plan for Expanding Domestic Demand (2022-2035) issued by the CPC Central Committee

and the State Council includes the stated goal of developing digital home by increasing the

spending of home decoration and intelligent household appliances; the 2020 Central Economic

Work Conference put “boosting domestic demand” first and stressed that it is required to take

“recovering and increasing consumption” as a priority and that as an important part of consumption

spending on household appliances holds the key to expand domestic demand. Therefore driven by

policy technology and other factors the scale of the color TV industry is expected to grow. And at

the same time with higher TV parameter configuration and richer intelligent functions more and

13Konka Group Co. Ltd. Annual Report 2022

more segmented scenes will be covered.On the side of white goods industry at present the inventory of white goods in urban households in

China is basically saturated. And affected by the industry cycle changes in supply chains as well as

depressing demand the scale of the white goods industry has decreased in 2022. In the refrigerator

industry the retail sales volume in China’s refrigerator market in 2022 was 30.06 million units

decreasing by 5.7% YoY and the retail sales value was RMB93 billion down by 4.2% YoY. As

people are paying more attention to health food preservation the future refrigerator market will be

mainly characterized by product upgrades. In respect of the washing machine industry statistics

from AVC showed that the retail sales volume in China’s washing machine market in 2022 was

37.71 million units decreasing by 9% YoY and the retail sales value was RMB68.6 billion

decreasing by 10.4% YoY. With a growing demand for the energy conservation environmental

protection intelligence and health security of products the upgrading of product technology will be

the future trend in the washing machine industry. In terms of the air-conditioning industry statistics

from AVC showed that the retail sales volume of China’s air-conditioning market was 57.14 million

units in 2021 decreasing by 3.3% YoY and the retail sales value was RMB 196.9 billion up by

0.4% YoY. As the need for replacement at the consumer side recovers the air-conditioning industry

is expected to maintain a steady growth trend in the future.(II) Semiconductor industry

The semiconductor industry is a strategic fundamental and leading industry that supports economic

and social development and safeguards national security. Driven by the development of 5G

artificial intelligence the IoT and intelligentialization the semiconductor industry is expected to

usher in a new wave of growth cycles. Among them semiconductor storage is the largest

subdivision in the semiconductor industry in recent years. At present South Korean companies

represented by Samsung and Hynix are in the leading position in the field of semiconductor storage.China has also accelerated in boosting the production capacity of semiconductor storage in recent

years. It is expected that the self-sufficiency rate will continue to increase.Micro LED is the prevailing trend and development direction of future display technology. The

industrial chain is divided into four main links: upstream chip manufacturing and mass transfer

midstream panel manufacturing and downstream complete machine application. The Micro LED

has wide industrial application and a broad market.(III) Environmental protection industry

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.

14Konka Group Co. Ltd. Annual Report 2022

II Principal Activity of the Company in the Reporting Period

(I) The consumer electronics business

This division primarily comprises the multimedia sub-division and the white goods sub-division

with details as follows:

1. The multimedia business

The Company's multimedia business faces the global market mainly including domestic color TV

business and export color TV business.The domestic sales of the Company’s colour TVs are realized mainly through B2B (Business-to-

Business) and B2C (Business-to-Consumer) with its branch companies business departments

and after-sales maintenance points operating across the country. And the Company profits from

the margins between the costs and the selling prices of its colour TVs.As for selling its colour TVs abroad the Company mainly relies on B2B. Its colour TVs are sold

to Asia Pacific Middle East Central & South America East Europe etc. And operating profit

source is also the differences between the costs and the selling prices of its colour TVs.

2. The white goods business

The white goods produced by the Company mainly include refrigerators washing machines air

conditioners freezers etc. which are sold through B2B and B2C mainly to the domestic market.And the Company profits from the margins between the costs and the selling prices of its white

goods. The Company strengthened the foundation of our white goods brands through the acquisition

of the Frestec brand. Meanwhile the establishment of the Ningbo A/C production base as a joint

venture has helped the Company build its own A/C manufacturing capability. The weakness in the

front-loading washing machine technology has been overcome by the acquisition of Beko (Front-

loading Washing Machine) China Factory. In addition the Company went on a new path of

exploring the dishwasher world by setting up Xi’an Smart Appliances Park. The Company also

optimized the internal R&D production procurement sales and services processes integrated the

external channel resources to enable channel sharing between the upstream procurement processes

and downstream sales processes and improved the product sales structure and competitiveness of

the white goods business.(II) The 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

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

15Konka Group Co. Ltd. Annual Report 2022

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 environmental protection business

Currently this business focuses on recycling of renewable resources. Renewable resources are

collected sorted processed distributed and sold.(IV) 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.III Core Competitiveness Analysis

The Company’s core competitiveness lies in its R&D ability brand marketing network and humanresources. It has developed a three-tier R&D system of “Research institute+key labs+productdevelopment 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 1500 R&D talents. The Company has introduced

around 100 experts on the micro LED project. 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-win results and

strives for development at home and abroad. Regarding offline channels the Company has 25

branches more than 100 offices and more than 3000 after-sales service shops across China and

the marketing and service network is all over the country; as for online channels the Company has

settled in Tmall JD Suning VIPshop 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.

16Konka Group Co. Ltd. Annual Report 2022

IV Core Business Analysis

1. Overview

In 2022 in the complicated context of the economic downturn decline in consumption supply

chain interruptions as well as the adjustment of macro policy the Company took lean management

as its guiding principle focused on main business development and adhered to the three major

business segments of “Consumer Electronics + Semiconductor + New Energy Technology”. It

further advanced the upgrading of its business structure took effective measures to lower costs and

increase efficiency control and reduce expenditure and strengthened scientific and technological

innovation as well as professional capacity building. But for the following reasons the Company

recorded a year-on-year decline in operating revenue and a significant loss in 2022.

(1) The main causes of a year-on-year decline in operating revenue in 2022

* Among export products in the Company’s main business memory semiconductor products

account for a large share. According to the preliminary statistical results from third-party research

institutions the global sales volume of memory semiconductors decreased by 10.4% YoY or so. In

order to reduce operating risks the Company adjusted and reduced the business scale of this part

resulting in a significant decline in the sales scale of products including memory chips in the

industrial and trading business compared to 2021.* In 2022 the statistics from third-party research institutions revealed that due to the weak demand

and consumption the scale of domestic industries related to the consumer electronics business of

the Company dropped by about 10% YoY. The Company reduced by 21.63% in terms of the scale

of consumer electronics business compared with 2021.* In 2022 the Company focused on its main business remained committed to the tree major

business segments of “Consumer Electronics + Semiconductor + New Energy Technology” and

promoted business restructuring by optimizing part of non-core business which failed to coordinate

with the main business.* The Company removed Shandong Econ Technology Co. Ltd. and Shenzhen E2info Network

Technology Co. Ltd. from the balance sheet through introducing strategic investors at the end of

2021. And it did not consolidate the operating revenue of the above-mentioned two companies in

2022.

2. The main causes of a significant loss in 2022

* In 2022 as the scale of consumer electronics business reduced it suffered a significant decline in

its gross margin and a loss as well due to the volatility of raw material prices fierce competition

among companies low average retail prices of consumer electronics products and rising shipping

cost.* In 2022 the Company continued to invest in the research and development of semiconductor

17Konka Group Co. Ltd. Annual Report 2022

business but as it was still in the stage of small-lot production it failed to achieve corresponding

revenue and profit in 2022 which affected the Company’s performance in its overall earnings.* In 2022 in order to stimulate the assets and further focus on main business the Company

stripped off assets that did not work for the development of main business and the expansion of

supply chains. Under the prudence principle the Company set aside impairment provision of

RMB1.245 billion for certain assets such as accounts receivable and inventory that may be subject

to credit and asset impairment causing a decrease in earnings.* Under the influence of macroeconomic environment the Company reduced the business of

industrial parks and investment which caused a huge decline in relevant revenue. In 2021 the

Company saw RMB4047 million of gains on disposal of non-current assets as it disposed of some

equity of subsidiary enterprises. The gains/losses from the disposal of non-current assets were

RMB755 million in 2022 down by 81.33% YoY.For 2022 the Company recorded operating revenue of RMB29.608 billion down 39.71% year on

year. Net profit attributable to the Shareholders of listed companies at RMB-1.471 billion

representing a year-on-year drop of 262.52%.

3. Key operations during 2022

* Significant improvement of management

First lean management achieved notable achievements: In 2022 the Company worked to promote

lean management and value creation focused on increased quality efficiency and self-promotion

and implemented precise quantification standardization inventory program and digitization. The

Company made impressive gains in improving lean management by reducing costs and controlling

expenditure reclaiming receivables and stripping off subsidiary enterprises that suffered losses and

did not fit in with the company’s development strategies.Second the capacity of digital management notably strengthened: In 2022 the Company carried out

many digital projects including In Cloud and Lake project financial sharing project contract

management project standardized financial accounting project intelligent manufacturing MES of

white goods (digital factory) project supplier management and engineering bidding projects. All of

these improved the Company’s digital management.Third risk management achieved great results: In 2022 the Company established “projectstandardized” risk management systems and achieved lean risk management through three risk

control line of defense three-class management mechanism and three stages of supervision.Meanwhile the Company set up well-established compliance systems through organization

construction system norms list guideline and personnel allocation.* Continuous optimization of industrial structure

First promoting integrated high-quality development. In 2022 the Company stayed committed to

electronics technology as its main business put forward integrated high-quality development and

18Konka Group Co. Ltd. Annual Report 2022made clear three major business segments of “Consumer Electronics + Semiconductor + NewEnergy Technology” and the two supporting businesses of “Industrial Parks + Investment” which

highlighted the core position of main business. Moreover it worked to optimize business structure.Second upgrading consumer electronics business structure. In 2022 the white goods business of

the Company achieved growth in income scale through increasing investment in the white goods

promoting “Konka + Frestec” dual-brand operation and “refrigerators + washing machines +freezers + air conditioners + kitchen appliance” full-category layout. And the Konka Industrial Park

in Shaanxi entered the stage of mass production.* Advancement of expertise

First manufacturing capacity has moved forward in the direction of professionalism. In terms of the

color TV industry in 2022 the Company has worked to improve its intelligent manufacturing

capacity. For instance industrial Internet of Things (IIOT) platform of Ankang Green Smart Plant

passed acceptance inspection and its productivity has met industrial standard. Thus the plant won

the title of “National Green Smart factory”. In white goods industry the company built

“refrigerators + washing machines + freezers + air conditioners + kitchen appliance” full-category

manufacturing capacity. On the side of semiconductors the company launched some industrial

projects such as mass production line of MLED direct display and MLED chip and put into

production Yancheng Memory Semiconductor Assembly & Test Base the yield of which surpassed

99.95%.

Second investment business has been developed in the direction of professionalism. In 2022 the

expertise of full chain of “fundraising investment management and withdrawal” in investment sub-

division of the Company has greatly improved.Third further improved professional capacity of operating industrial parks. In 2022 the Company

has consolidated its capacity of operating the industrial park business and also developed a

“government-commissioned and enterprise-operating” asset-light strategy and other business

models which has pushed for the completion of the projects.* Notable improvement of product capability

First the industrialization of semiconductor technology. On the side of O-E semiconductors

Chongqing Konka Semiconductor Optoelectronic Technology Industrial Park was put into

production. The self-developed 15um*30um Micro LED chip reached 99% of the manufacturing

yield. Besides it launched industrial projects including the mass production line project of MLED

direct display. In terms of PCB sub-division the Company developed Mini LED direct display. The

revenue of thick copper and communication products saw a year-on-year increase. And the product

sales structure has improved.Second consumer electronic quality products played an important role. The overseas color TV

business launched a series of high-margin differentiated quality products to optimize its product mix.

19Konka Group Co. Ltd. Annual Report 2022

In terms of the white goods sub-division the Company further explored product potential through

benchmarking and promoted full-category products. It launched Konka 550 double-door

refrigerator and drum washing machine with H21 color screen and other new products. The

Company is engaged in 5G router and tablet products with respect to the mobile Internet sub-

division and focused on international market which significantly improved overseas business

revenue and gross margin.* Significant improvement of R&D capacity

In 2022 the Company remained committed to independent innovation as its technologicaldevelopment guideline and kept strengthening the three-tier R&D system of “research institute -key laboratory - product R&D center” and increasing investment in areas including semiconductors

big data display technology and healthy fresh cold technology.Among one national award and four provincial awards that the Company received in 2022 the

Parameter Separation Methods Smart TV and Storage Media won Chinese Patent Award of

Excellence the Key Technology of Intelligent Terminal Integrating Information Equipment and

Synergetic Interconnection of Beacon won the second prize of Guangdong Science and Technology

Progress Award and 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. Konka Double 15-day Ecological

Fresh-Keeping Refrigerator won the 2022 Ultra-Long Fresh-Keeping Leading Product Award of

China’s Refrigerator Industry.In terms of core technology R&D the Company made breakthrough in many key technologies in

2022. In the area of semiconductors the Company independently developed Micro LED “hybridmass transfer technology” with a three-color transfer yield reaching 99.999%. In the white goods

industry the Company carried out the basic applied research of the Development of Cryogenic

Refrigerator Based on Reverse Brayton Refrigeration Technology project. After the air-cooled -

86°C cryo-refrigerator for civil use was developed the cooling temperature surpassed -120°C

which 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.Furthermore the 15-day ecological fresh-keeping technology extended the fresh-keeping date of

food in the refrigerator through multi-field coupling technology.

2. Revenue and Cost Analysis

(1) Breakdown of Operating Revenue

Unit: RMB

20222021

Change (%)

Operating revenue As % of totaloperating revenue (%) Operating revenue

As % of total

operating revenue (%)

20Konka Group Co. Ltd. Annual Report 2022

Total 29607854255.27 100% 49106513669.58 100% -39.71%

By operating division

Consumer electronics 10871843067.02 36.72% 13873074181.46 28.25% -21.63%

Industry trade 16052517705.95 54.22% 29682677483.94 60.45% -45.92%

Environmental

business 1548557255.52 5.23% 4354614711.52 8.87% -64.44%

Semiconductor 134579890.70 0.45% 321958525.17 0.66% -58.20%

Other 1000356336.08 3.38% 874188767.49 1.78% 14.43%

By product category

Color TVs 5023097945.06 16.97% 7300340878.11 14.87% -31.19%

White goods 3929504730.97 13.27% 3699285362.91 7.53% 6.22%

PCB 663849487.53 2.24% 913703904.09 1.86% -27.35%

Industry trade 16052517705.95 54.22% 29682677483.94 60.45% -45.92%

Environmental

business 1548557255.52 5.23% 4354614711.52 8.87% -64.44%

Semiconductor 134579890.70 0.45% 321958525.17 0.66% -58.20%

Other 2255747239.54 7.62% 2833932803.84 5.77% -20.40%

By operating segment

Domestic 14845908414.38 50.14% 22033965598.67 44.87% -32.62%

Overseas 14761945840.89 49.86% 27072548070.91 55.13% -45.47%

By marketing model

Direct sales 5773701603.23 19.50% 8947974287.40 18.22% -35.47%

Distribution 23834152652.04 80.50% 40158539382.18 81.78% -40.65%

(2) Operating Division Product Category Operating Segment or Marketing Model

Contributing over 10% of Operating Revenue or Operating Profit

√ Applicable □ Not applicable

Unit: RMB

YoY change in YoY change in

Operating revenue Cost of sales Gross profit YoY change inmargin operating revenue cost of sales (%) gross profit margin(%) (%)

By operating division

Consumer

electronics 10871843067.02 10466658063.15 3.73% -21.63% -18.48% -3.72%

Industry

trade 16052517705.95 15948127861.17 0.65% -45.92% -45.97% 0.08%

By product category

Color TVs 5023097945.06 5081621150.13 -1.17% -31.19% -26.59% -6.34%

White

goods 3929504730.97 3523413567.24 10.33% 6.22% 3.77% 2.11%

Industry

trade 16052517705.95 15948127861.17 0.65% -45.92% -45.97% 0.08%

By operating segment

Domestic 14845908414.38 14256824588.51 3.97% -32.62% -30.94% -2.33%

Overseas 14761945840.89 14531813805.37 1.56% -45.47% -45.69% 0.39%

By marketing model

Direct sales 5773701603.23 5538012338.93 4.08% -35.47% -31.87% -5.08%

Distribution 23834152652.04 23250626054.95 2.45% -40.65% -40.80% 0.25%

Core business data of the prior year restated according to the changed statistical caliber for the

Reporting Period:

□ Applicable √ Not applicable

(3) Whether Revenue from Physical Sales Is Higher than Service Revenue

√ Yes □ No

Operating division Item Unit 2022 2021 Change (%)

21Konka Group Co. Ltd. Annual Report 2022

Unit sales 0000 units 1028 1247 -17.56%

Consume

Electronics Output 0000 units 983 1184 -16.98%

Inventory 0000 units 73 79 -7.59%

Any over 30% YoYmovements in the data above and why:

□ Applicable √ Not applicable

(4) Execution Progress of Major Signed Sales and Purchase Contracts in the Reporting

Period

□Applicable √ Not applicable

(5) Breakdown of Cost of Sales

By product category

Unit: RMB

Product 2022 2021Item Changecategory Cost of sales As % of total cost of Cost of sales As % of total cost of (%)sales (%) sales (%)

Color TVs Color TVs 5081621150.13 17.65% 6922606555.81 14.60% -26.59%

White goods Whitegoods 3523413567.24 12.24% 3395382780.50 7.16% 3.77%

PCB PCB 627609981.96 2.18% 852737298.50 1.80% -26.40%

Industry Industry

trade trade 15948127861.17 55.40% 29514534704.12 62.26% -45.97%

Environment Environmen

al business tal business 1511874387.74 5.25% 4030685013.80 8.50% -62.49%

Semiconduct Semiconduc

or tor 148687958.92 0.52% 306296431.81 0.65% -51.46%

Other Other 1947303486.72 6.76% 2379642196.99 5.02% -18.17%

Note:

Cost of sales changed accordingly with operating revenue.

(6) Changes in the Scope of Consolidated Financial Statements for the Reporting Period

√ Yes □ No

Name of subsidiary Registered capital The Company’s Date of(RMB) interest (%) change Reason for change

Guizhou Konka New Energy Material

1000098.00%2022-5-11

Technology Co. Ltd.Jiangxi Konka High-tech Park Operation and

5000100.00%2022-4-27

Management Co. Ltd.Shangrao Konka Electronic Technology

3000100.00%2022-4-27

Innovation Co. Ltd.Zhejiang Konka Electronic Technology Co.

3000100.00%2022-6-20

Ltd.Zhejiang Konka Technology Industry

3000100.00%2022-6-20

Development Co. Ltd.Xi'an Konka Intelligent Appliance Co. Ltd. 500 51.00% 2022-7-22 Newly incorporated

Xi'an Kanghong Technology Industry

3000100.00%2022-8-1

Development Co. Ltd.Xi'an Konka Network Technology Co. Ltd. 5000 100.00% 2022-8-1

Xi'an Konka Intelligent Technology

5000100.00%2022-8-1

Development Co. Ltd.Chongqing Fangbing Real Estate Co. Ltd. 2000 80.00% 2022-8-19

Konka Photovoltaic Technology Co. Ltd. 15000 60.00% 2022-10-9

Zhongshan Kanghong Electronic Technology

10051.00%2022-10-14

Co. Ltd.

22Konka Group Co. Ltd. Annual Report 2022

Songyang Konka Intelligent Technology

3000100.00%2022-10-26

Development Co. Ltd.Shenzhen Kangyan Technology Co. Ltd. 1000 100.00% 2022-10-28

Songyang Konka Smart Industry Operation

150051.00%2022-10-26

Management Co. Ltd.Konka North China (Tianjin) Technology Co.

3000100.00%2022-10-10

Ltd.Shenzhen Kanghong Xintong Investment

1000095.09%2022-10-21

Partnership (Limited Partnership)

Chongqing Konka Low Carbon Technology

150055.00%2022-9-30

Co. Ltd.Jiangxi Konka Industrial Park Development

1000070.00%2022-5-25

Co. Ltd.Shanghai Xinfeng Zhuoqun PCB Co. Ltd. 1066 100.00% 2022-2-10

Ruichang Kangrui Real Estate Co. Ltd. 1000 70.00% 2022-5-25

Shenzhen Konka Electrical Appliances Co.

830 100.00% 2022-12-1 De-registered

Ltd.Yantai Laikang Industrial Development Co.

100051.00%2022-8-4

Ltd.Shenzhen Yijiakang Smart Terminal

2000100.00%2022-12-9

Technology Co. Ltd.Sichuan Chengrui Real Estate Co. Ltd. 2500 49.00% 2022-4-15

Chongqing Jiarun Real Estate Co. Ltd. 2000 49.00% 2022-4-15

Xi'an Huasheng Jiacheng Real Estate Co. Ltd. 10000 0.00% 2022-6-27 Equity transfer

Xi'an Feihe Real Estate Development Co. Ltd. 100 0.00% 2022-6-26

Konka Industrial Development (Wuhan) Co.

100045.00%2022-2-25

Ltd.Hefei KONSEMI Storage Technology Co.

740034.46%2022-3-30

Ltd. Capital increase

Hefei Yihe Electronic Co. Ltd. 1000 34.46% 2022-3-30

Sichuan Hongxinchen Real Estate

200080.00%2022-7-4

Development Co. Ltd.Acquired

Shenzhen Konka Digital Technology

2010100.00%2022-9-19

Development Co. Ltd.

(7) Major Changes to the Business Scope or Product or Service Range in the Reporting

Period

□Applicable √ Not applicable

(8) Major Customers and Suppliers

Major customers:

Total sales to top five customers (RMB) 10924895999.88

Total sales to top five customers as % of total sales of the

Reporting Period (%) 36.90%

Total sales to related parties among top five customers as % of

total sales of the Reporting Period (%) 0

Top five customers:

No. Customer Sales revenue contributed for As % of total sales revenuethe Reporting Period (RMB) (%)

1 Customer A 5236236676.89 17.69%

2 Customer B 1878790089.83 6.35%

3 Customer C 1600421458.45 5.41%

23Konka Group Co. Ltd. Annual Report 2022

4 Customer D 1336927199.96 4.52%

5 Customer E 872520574.75 2.93%

Total -- 10924895999.88 36.90%

Other information about major customers:

√ Applicable □ Not applicable

None of the top five customers were related parties of the Company. And none of the Company’s

directors supervisors executive officers core technicians over 5% shareholders actual controller

or any other related parties held equity interests in the major customers directly or indirectly.Major suppliers:

Total purchases from top five suppliers (RMB) 11332913608.06

Total purchases from top five suppliers as % of total purchases

of the Reporting Period (%) 39.35%

Total purchases from related parties among top five suppliers

as % of total purchases of the Reporting Period (%) 0

Top five suppliers:

No. Supplier Purchase in the ReportingPeriod (RMB) As % of total purchases (%)

1 Supplier A 5446347101.69 18.91%

2 Supplier B 1843650256.49 6.40%

3 Supplier C 1480847503.61 5.14%

4 Supplier D 1465757179.27 5.09%

5 Supplier E 1096311567.00 3.81%

Total -- 11332913608.06 39.35%

Other information about major suppliers:

√ Applicable □ Not applicable

None of the top five customers were related parties of the Company. And none of the Company’s

directors supervisors executive officers core technicians over 5% shareholders actual controller

or any other related parties held equity interests in the major customers directly or indirectly.

3. Expense

Unit: RMB

2022 2021 Change (%) Reason for anysignificant change

Selling expense 1240144735.77 1428062895.37 -13.16%

Administrative expense 949647590.28 960449117.12 -1.12%

Finance costs 522423743.18 952642273.75 -45.16% Great currency

fluctuations in the year

R&D expense 543882024.89 616335488.01 -11.76%

4. R&D Investments

√ Applicable □ Not applicable

Names of main Objectives to be Expected impact on the

R&D projects Project objectives Project progress achieved Company

New Mini&Micro Through the new structure The target of

LED Structure design the established goal of

The project has Lay a solid foundation

brightness increase

Development photoelectric performance

completed the given for the industrialization

project objectives push-pull effortimprovement and cost of Mini&Micro LEDProject increase and noblereduction can be achieved and is thus closed. chip.metal usage reduction

24Konka Group Co. Ltd. Annual Report 2022

was finished.Mass Transfer Accumulate key

Repair Technology Improve the yield through The project has

Produce the samples

and the yield could achievements of the

Research and mass transfer repair completed the givenproject objectives achieve the goal

mass transfer and make

Development technology. and is thus closed. through using repair

technical reserves for

Project technology. the industrialization ofthis technology.To complete the

accumulation of Realization of the core

differentiated capability of self-

To achieve its multi- technology such as developed multitasking

Multi-window and directional differentiation in This projectdevelopment has self-developed systems andMultitasking terms of the interaction been completed and multitasking systems accumulation ofSystem -ME You multi-task AI ecological Android ecological technical reserves

OS development and put the applied in thecompany’s products. connection self-made allow them to act as aproduct into use. air mouse remote core technology to

control and intelligent widen the gap between

splice screen through competing products.technical cooperation.It is designed to realize the

8K video slicing function by

using self-developed chips.Convert one-channel

HDMI2.1 8K signal into four- These technologies can

channel HDMI2.0 4K signals Breakthrough chip be used in various 8K

in which HDMI2.1 input and The project has been technology including large-screen display

8K 120Hz Video HDMI2.0 output interfaces completed and

HDMI2.1 8K video scenarios including

Processor are realized by self-made gained customer

segmentation and

chips and then apply video orders in the multi-interface“100 cities and 1000screens” and the

splicing technology to video industry. synchronization and Hangzhou Asian

signal segmentation inside the output program Games and other

self-made chips and use externally. important occasions.synchronization mechanism

to ensure that the four-

channel HDMI2.0 outputs are

completely synchronized.Complete the research

and development of

AM Driver (Active To complete AM-driven This project relevant technologies

Matrix Driver) high-zone Mini LED development has including AM driver Enhance the quality

Mini LED backlight TV and launch been completed and and high-zone Mini and competitiveness of

Backlight TV product applied in A6 series LED backlight and the product.of models. improve the display

effect and reduce the

backlight costs.Apply the reverse brayton

refrigeration technology to

Research of the study of -120°C

Cryogenic cryorefrigerator to verify the To develop technical

Refrigerator Based design parameters of key The cryogenic

The cryogenic reserves for the market

on Reverse Brayton components low-temperature temperature has

technology has realized of cryogenic storage

Refrigeration material selection and surpassed -120°C.the temperature of -

structure layout related to this 120°C.products in the field of

Technology biomedicine.technology. The target

temperature in the cryogenic

box is to reach -120℃.

25Konka Group Co. Ltd. Annual Report 2022

Details about R&D personnel:

2022 2021 Change (%)

Number of R&D personnel 1537 1505 2.13%

R&D personnel as % of total

employees 10.59% 9.27% 1.32%

Educational background of R&D personnel

Bachelor’s degree and below 1398 1344 4.02%

Master’s degree 131 151 -13.25%

Doctoral degree 8 10 -20.00%

Age structure of R&D personnel

Below 30 716 649 10.32%

30-40573607-5.60%

Over 40 248 249 -0.40%

Details about R&D investments:

2022 2021 Change (%)

R&D investments (RMB) 543882024.89 633205798.71 -14.11%

R&D investments as % of operating

revenue 1.84% 1.29% 0.55%

Capitalized R&D investments (RMB) 0 16870310.70 -100.00%

Capitalized R&D investments as % of

total R&D investments 0.00% 2.66% -2.66%

Reason for any significant change in R&D personnel composition and the impact:

□ Applicable √ Not applicable

Reasons for any significant YoY change in the percentage of R&D investments in operating revenue:

□ Applicable √ Not applicable

Reason for any sharp variation in the percentage of capitalized R&D investments and rationale:

√ Applicable □ Not applicable

No capitalization of R&D investments in the Reporting Period.

5. Cash Flows

Unit: RMB

Item 2022 2021 Change (%)

Subtotal of cash generated from

operating activities 33467042610.14 51951723686.75 -35.58%

Subtotal of cash used in

operating activities 33995345651.97 51142967292.64 -33.53%

Net cash generated from/used in

operating activities -528303041.83 808756394.11 -165.32%

Subtotal of cash generated from

investing activities 5299153383.77 6003236391.07 -11.73%

Subtotal of cash used in investing

activities 4972918573.56 8688189017.80 -42.76%

Net cash generated from/used in

investing activities 326234810.21 -2684952626.73 112.15%

Subtotal of cash generated from

financing activities 21373734199.02 24829208403.38 -13.92%

Subtotal of cash used in

financing activities 21706022136.76 21264351013.39 2.08%

Net cash generated from/used in

financing activities -332287937.74 3564857389.99 -109.32%

Net increase in cash and cash

equivalents -506435208.13 1670291105.79 -130.32%

Explanation of why any of the data above varies significantly:

26Konka Group Co. Ltd. Annual Report 2022

√ Applicable □ Not applicable

Net cash generated from/used in operating activities changed primarily because with increased

inventories cash payments for goods and services as a percentage of cash inflows from sales rose

year on year.Net cash generated from/used in investing activities changed primarily because cash payments for

construction and acquisition of fixed assets intangible assets and other long-term assets declined

year on year.Net cash generated from/used in financing activities changed primarily because borrowings

declined year on year.Reason for any big difference between the net operating cash flow and the net profit for this

Reporting Period:

□ Applicable √ Not applicable

V Analysis of Non-Core Businesses

√ Applicable □ Not applicable

Unit: RMB

Amount As % of total profit Source/Reason Recurrent or not

Return on investment 936006397.44 -45.27% Income from equitytransfers Not

Gain/loss on changes

in fair value -40731333.54 1.97% Not

Asset impairments -1245280871.86 60.23% Allowances forimpairment losses Not

Non-operating income 125139042.00 -6.05% Not

Non-operating expense 224724245.84 -10.87% Not

VI Analysis of Assets and Liabilities

1. Significant Changes in Asset Composition

Unit: RMB

31 December 2022 1 January 2022 Reason

Change in for any

As % of total As % of total percentage significAmount assets Amount assets (%) ant

change

Monetary

assets 5988095490.71 15.75% 6489553211.24 16.27% -0.52%

Accounts

receivable 2036734836.22 5.36% 3397729481.07 8.52% -3.16%

Contract assets 0.00% 0.00% 0.00%

Inventories 4409767756.22 11.60% 4068537809.18 10.20% 1.40%

Investment

property 802407844.60 2.11% 776525061.54 1.95% 0.16%

Long-term

equity 6351232955.58 16.71% 5902588939.51 14.80% 1.91%

investments

Fixed assets 4114029693.38 10.82% 4010295277.14 10.06% 0.76%

Construction in

progress 1990361377.07 5.24% 1490777831.39 3.74% 1.50%

Right-of-use

assets 50019838.68 0.13% 71210415.37 0.18% -0.05%

Short-term 7579559304.97 19.94% 9920675121.08 24.88% -4.94%

27Konka Group Co. Ltd. Annual Report 2022

borrowings

Contract

liabilities 601044358.35 1.58% 652910408.02 1.64% -0.06%

Long-term

borrowings 8906931402.89 23.43% 3529140539.09 8.85% 14.58%

Lease liabilities 36586639.16 0.10% 42532869.63 0.11% -0.01%

Indicate whether overseas assets account for a larger proportion of the total assets.□ Applicable √ Not applicable

2. Assets and Liabilities at Fair Value

√ Applicable □ Not applicable

Unit: RMB

Gain/loss on Cumulative

Beginning fair-value fair-value

Impairment Purchased in Sold in the

Item amount changes in changes

allowance for the Reporting Reporting Other Ending

the Reporting charged to the ReportingPeriod Period Period

changes amount

Period equity

Financial assets

1. Trading

financial

assets

(derivative

financial

assets

excluded)

2. Derivative

financial

assets

3.

Investments

in other debt

obligations

4.

Investments

in other 23841337.1 23841337.1

equity 6 6

instruments

Subtotal of

financial 23841337.1 23841337.1

assets 6 6

Investment

property

Productive

living assets

Other 236485229 -7108260.65 986428145. 467322675. 2876849502.22 86 67 1.76

Total of the

above 238869362

-

7108260.65986428145.467322675.2900690839.3886678.92

Financial

liabilities 0.00 0.00 0.00

Particulars about other changes:

Beginning Gain/loss on fair- Cumulative fair-

Impairment

Item value changes in the value changes allowance for Purchased in the

Sold in the

amount Reporting

Other Ending amount

Reporting Period charged to equity the Reporting Reporting Period changesPeriod Period

Other non-current

financial assets 2293361603.68 -7108260.65 749240917.42

395831987.1

32639662273.32

Receivables financing 71490688.54 237187228.44 71490688.54 237187228.44

Significant changes to the measurement attributes of the major assets in the Reporting Period:

□ Yes √ No

28Konka Group Co. Ltd. Annual Report 2022

3. Restricted Asset Rights as at the Period-End

Item Ending carrying value(RMB) Reason for restriction

Of which RMB435167024.52 is security deposits put in pledge for loans or the

Monetary assets 526183479.81issuance of bank acceptance bills; RMB305405.41 is in the fiscal custody account;RMB69800000.00 is term deposits that cannot be withdrawn in advance; and

RMB20911049.88 is restricted for other reasons.Notes receivable 504958051.41In pledge for the issuance of bank acceptance bill

Stock 49679547.48The rectification measures were affected by the minority shareholder case of thesubsidiary the inventory was sealed up and the company did not waive its claims.Investment property 104066818.20As collateral for loan

Fixed assets 1437778232.95As collateral for the issuance of bank acceptance bill finance lease loan or formershareholder guarantee

Intangible assets 512162337.46Mortgage loan financial lease mortgage original shareholder guarantee mortgage

Construction in

progress 229757971.08As collateral for finance lease

Total 3364586438.39

VII Investments Made

1. Total Investment Amount

√ Applicable □ Not applicable

Amount of Reporting Period (RMB) Amount of the same period of last year(RMB) Change (%)

4490904118.807481330886.46-39.97%

2. Major Equity Investments Made in the Reporting Period

□Applicable √ Not applicable

3. Major Non-Equity Investments Ongoing in the Reporting Period

√ Applicable □ Not applicable

Unit: RMB

Reason

Accumu Accumu for not

Fixed Input lative lative meeting

Investm assets amount actual Capital Estimate realized the

Item ent investm Industry in the input resource Progress d revenue schedule

Disclosu Disclosu

method ent or involved Reportin amount s revenue s as of and

re date re index

(if any) (if any)

not g Period as of the s the expecteperiod- period- d

end end revenue

s

Donggu

an Self-

Konka Self- ElectronIntellige Yes ic 189688 544486

and

bank N/A 2017-

nt build industry 317.71 076.49 loan- 03-11

Industri funded

al Park

Suining

Konka

Electron

ic Self- Electron http://w

Technol build Yes ic 149933 483395

Self- N/A 2018- ww.cnin

ogy industry 938.79 087.58

funded 10-17 fo.com.c

Industri n/new/in

al Park dex

Chongqi

ng

Konka Self-

Semicon Electron and

ductor Self- Yes ic 219883 505627 2019-

Photoele build industry 550.18 350.19

bank N/A

loan- 06-14

ctric funded

Industri

al Park

29Konka Group Co. Ltd. Annual Report 2022

Konka

Intellige

nt

Termina

l Self-

Electron

Yes ic 128163 538606 Self- 2020-

Manufa build industry 16.48 22.93 funded

N/A 06-06

cturing

Base for

Export

Frestec Self-

Refriger Self- ElectronYes ic 138495 247798

and 2020-

ation build industry 606.91 329.55

bank N/A

Park loan-

funded

Xi’an

Konka

Smart

Applian Self- ElectronYes ic 381461 179661 Self- N/A 2021-ces build industry 61.13 935.88 funded 02-10Headqu

arters

Project

Total -- -- -- 748963 201482891.20 9402.62 -- -- -- -- --

Note: Konka Chuzhou Smart Appliances and Equipment Industrial Park has been completed and

accepted. Xi’an Konka Smart Appliances Headquarters Project has been put into use. Dongguan

Konka Intelligent Industrial Park Suining Konka Electronic Technology Industrial Park and Frestec

Refrigeration Park are under construction. Regarding the Semiconductor Photoelectric Research

Institute of Chongqing Konka Semiconductor Photoelectric Industrial Park the infrastructure of the

first phase has been completed and accepted with the remaining infrastructure and decoration

ongoing.

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’0000

Cumulat

Re- ive re- Purpose

Used in purpose Cumulat purpose and

Amount

being

Year of Way of Total the Cumulat d ive re- d whereab

raising raising amount Current ively amount purpose amount

Unused outs of idle for

raised amount morePeriod used in the d as % of theReportin amount total unused than two

g Period amount amount years

raised

2022 Publicoffering 120000 120000 120000 0 0 0.00% 0 0 0

30Konka Group Co. Ltd. Annual Report 2022

of

corporat

e bonds

Private

placeme

2022 nt of 120000 120000 120000 0 0 0.00% 0 0 0

corporat

e bonds

Total -- 240000 240000 240000 0 0 0.00% 0 -- 0

More information

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.VIII Sale of Major Assets and Equity Interests

1. Sale of Major Assets

□Applicable √ Not applicable

No such cases in the Reporting Period.

2. Sale of Major Equity Interests

√ Applicable □ Not applicable

Amoun

t Amoun

contrib t

uted by contrib

the uted by

equity the sale Relati

interest to net onship Executed

Sellin s to net Effect income Relat betwe Owne as

g income of the of the Prici ed- en rship scheduled Discl

Counte Equityinterests Date price of the sale on Compa ng party counte fully

or not if osur Index to

rparty of sale (RM Compa the ny as a princi transa rparty transf not state e disclosedsold B’00 ny Compa percent ple ction and erred reasonand date

information

00) from ny age of or not the or not

period- the Comp actions

beginni Compa any taken

ng to ny’s

date of net

sale income

(RMB’ (%)

0000)

Optimi

Xi'an 100% zing

the

Port ownership Compa

Industri of Xi'an ny’s

27 21 http://www.c

al Huasheng 2200 2133.4 allocati 7.02%

on of ValuJune 6 ation No No Yes N/A May ninfo.com.cn/Invest Jiacheng 0

2022 assets

ment Real increasi

2022 new/index

ng

Co. Estate capital

Ltd. Co. Ltd. liquidit

y

IX Major Subsidiaries

√ Applicable □ Not applicable

Major fully/majority-owned subsidiaries and those minority-owned subsidiaries with an over 10%

31Konka Group Co. Ltd. Annual Report 2022

effect on the Company’s net profit

Unit: RMB

Relationship

Name with the Principal Registered Operating

Company activity capital

Total assets Net assets revenue Operating profit Net profit

Konka Ventures Enterprise

Development management

(Shenzhen) Co. Subsidiary consulting and RMB5000000 167078254.09 55084448.84 64761298.17 60109090.28 48421693.32

Ltd. incubationservices

Hong Kong Export &

Konka Co. Ltd. Subsidiary import of HKD500000

3189156989.2

8 397775661.07 2667415017.4 52240252.69 34803560.21electronics 0

Chain Kingdom

Memory Export &

Technologies Subsidiary import of

USD4876255. 1217208991.4

391157310605.808493960721.24129016.074124270.93

Co. Limited electronics 0

Subsidiaries obtained or disposed of in the Reporting Period:

√ Applicable □ Not applicable

Subsidiary How subsidiary was obtained or Effects on overall operations anddisposed in the Reporting Period operating performance

Guizhou Konka New Energy Material Newly incorporated

Technology Co. Ltd.Jiangxi Konka High-tech Park Operation and Newly incorporated

Management Co. Ltd.Shangrao Konka Electronic Technology Newly incorporated

Innovation Co. Ltd.Zhejiang Konka Electronic Technology Co. Newly incorporated

Ltd.Zhejiang Konka Technology Industry Newly incorporated

Development Co. Ltd.Xi'an Konka Intelligent Appliance Co. Ltd. Newly incorporated

Xi'an Kanghong Technology Industry Newly incorporated

Development Co. Ltd.Xi'an Konka Network Technology Co. Ltd. Newly incorporated

Xi'an Konka Intelligent Technology Newly incorporated

Development Co. Ltd.Chongqing Fangbing Real Estate Co. Ltd. Newly incorporated

Zhongshan Kanghong Electronic Technology Beneficial to the development of theNewly incorporated Company’s relevant business

Co. Ltd.Songyang Konka Intelligent Technology Newly incorporated

Development Co. Ltd.Shenzhen Kangyan Technology Co. Ltd. Newly incorporated

Songyang Konka Smart Industry Operation Newly incorporated

Management Co. Ltd.Konka North China (Tianjin) Technology Co. Newly incorporated

Ltd.Shenzhen Kanghong Xintong Investment Newly incorporated

Partnership (Limited Partnership)

Konka Photovoltaic Technology Co. Ltd. Newly incorporated

Chongqing Konka Low Carbon Technology Newly incorporated

Co. Ltd.Sichuan Hongxinchen Real Estate

Acquired

Development Co. Ltd.Shenzhen Konka Digital Technology

Acquired

Development Co. Ltd.Jiangxi Konka Industrial Park Development De-registered

Co. Ltd. For better allocation of assets

Shanghai Xinfeng Zhuoqun PCB Co. Ltd. De-registered

Ruichang Kangrui Real Estate Co. Ltd. De-registered

32Konka Group Co. Ltd. Annual Report 2022

Shenzhen Konka Electrical Appliances Co. De-registered

Ltd.Yantai Laikang Industrial Development Co. De-registered

Ltd.Shenzhen Yijiakang Smart Terminal De-registered

Technology Co. Ltd.Sichuan Chengrui Real Estate Co. Ltd. Equity transfer

Chongqing Jiarun Real Estate Co. Ltd. Equity transfer

Xi'an Huasheng Jiacheng Real Estate Co. Ltd. Equity transfer

Xi'an Feihe Real Estate Development Co. Ltd. Equity transfer Beneficial to the development of the

Konka Industrial Development (Wuhan) Co. Company’s relevant business and bringEquity transfer

Ltd. about a certain amount of gains

Hefei KONSEMI Storage Technology Co. Capital increase

Ltd.Hefei Yihe Electronic Co. Ltd. Capital increase

Information about principal subsidiaries and joint stock companies:

None

X Structured Bodies Controlled by the Company

□Applicable √ Not applicable

XI Prospect of the Company’s Future Development

In 2023 based on the main business the Company will stick to specialized platform operation

implement lean management support long-term value and work to increase its economic benefits.In addition it will also see high-quality development as its guideline adhere to the general principle

of development and focus on its main business aiming to achieve high-quality development. The

Company’s main tasks in 2023 are listed as follows:

(I) Adhere to the general principle of development

In 2023 the Company will stick to the general principle of development focus on three dominant

industries “Consumer Electronics + Semiconductor + New Energy Technology” and adopt a

strategy of lengthening and broadening. It will create its technological barriers and industrial bases

expand and strengthen real industry thus achieving steady and high-quality development.(II) Adhere to a long-term value orientation

In 2023 based on the established strategies the company will take action while taking long-term

goals into consideration return to the nature of operation and build a business baserealize a steady

and high-quality growth.(III) Stick to develop the operation of platform specialization

In 2023 the Company will remain committed to specialized development by creating its own

technology barriers management barriers product barriers and supply chain barriers and

developing sub-divisions with the strength of profession thus enhancing its core competitive edge.(IV) Stick to the product-oriented operation

In 2023 the Company will strengthen product thinking and product capability in a systematic

manner. For example based on products the Company will make plan for investment and build

and reshape organizational systems and take cost reduction and efficiency increase and gross

33Konka Group Co. Ltd. Annual Report 2022

margin of the products as the approach of assessing products.Specifically in terms of product capability in consumer electronics business the Company will first

center on product innovation focus on user experience innovation products and the development of

functions that meet high-frequent consumer demand and also focus on the extended functions that

provide commercial value for the Company’s operation; second it will focus on product operations

implement a big product manager system significantly increase the sales of star products and

rebuild the full life cycle of product management; finally it will focus on product efficiency and

improve the economics of scale as well as enhance cost competitiveness. On the side of

semiconductor and new energy business the Company will work to be a leading player in R&D of

product and achieve industrialization. With regard to the high-tech park business the Company will

try to develop benchmark samples for the operation of the high-tech parks and form the product

brand.(V) Stick to lean management

In 2023 the Company will take a strategic view in strengthening whole-stuff whole-process and

all-round lean management and enable this concept to run through the whole process and the whole

element of daily work so as to release management effectiveness. First the Company will establishan all-round lean budget management system. Guided by the principle of “efficiency accuracy andimplementability” it will achieve the annual business objectives driven by the budget; second itwill promote cost reduction and efficiency. With “supply chain reshaping and rebuildingprocurement management improvement digital supply chain construction and enhancement” as the

core it aims to realize the transformation of all-round quality and efficiency of supply chain

management. Third the Company will improve the lean quality of cost management. Specifically it

will work to make fine cost budget analyze cost management detail energy saving and

consumption reduction and promote cost control and efficiency increase for all. Therefore it can

pour resources into the main business to maximize cost effectiveness. Fourth the Company will

revitalize existing assets that are idle and inefficient and innovate methods for asset revitalization.(VI) Business operations

1. Consumer Electronics

In 2023 the key tasks of the color TV business are as follows: First in terms of the domestic color

TV business the Company will be oriented to maximize gross margin. To this end it will reform

the organizational systems improve the channel structure strengthen budget management increase

efficiency and accelerate turnover; second with respect to the overseas sub-division the Company

will adhere to the strategy of developing large scale business and make efforts to make

breakthrough in independent brands and overseas OEM business; third regarding the

manufacturing business the Company will actively develop strategic customers. Meanwhile it will

34Konka Group Co. Ltd. Annual Report 2022

build the market-oriented competition mechanism of its own product OEM business benchmark

itself against leading enterprises promote cost reduction and focus on capacity enhancement. In

this way the manufacturing business will play a critical role in the Company.In 2023 the key tasks of the white goods sub-division are as follows: First the Company will drive

forward sound development of the white goods business and continue to expand this business;

second the Company will work to increase the OEM and overseas channels; third it will adopt

product-oriented operation strategy while enhancing the capability of creating high-end and high-

margin products.In 2023 the key tasks of mobile internet sub-division are as follows: First the Company will focus

on international market and take strong measures to expand this market; second it will expand

product line by leveraging its overseas advantage and realize channel reuse of multiple product

lines.

2. Semiconductor Technology

In 2023 the key tasks of the semiconductor sub-division are as follows: First the Company will

steer the management orientation organizational structure and assessment system of Micro LED

business from research and development-oriented toward market-oriented mode and make efforts

to follow market rules develop large-scale business to gain profit on the basis of industrialization

In 2023 the key tasks of the PCB sub-division are as follows: First the Company will realize high-

end products by putting new plants into production; second the Company will achieve high-end

production technique through capability improvement; third the Company will take active

measures to explore customers that play a decisive role in its long-term development and support

stable operation.In 2023 the key tasks of the industrial and trade technology business are as follows: First the

Company will take action to reduce inventory and receivable; second it will make clear the

industrial and trade technology business mode and its partners and also reshape its business process

to increase gross margin.

3. Environmental Protection and New Energy

In 2023 the key tasks of the environmental protection and new energy business are as follows: First

the Company will expand new energy business through capital; second based on sustainable

development the Company will promote the transformation of existing environmental protection

business model.

4. Technology Park

In 2023 the key tasks of the technology park sub-division are as follows: First the Company will

explore new projects to lay a foundation for sustainable development of the technology park sub-

division; second the Company will further reduce the stock projects; third on the basis of

headquarters economy and asset-light strategy the Company will also promote the innovation of the

35Konka Group Co. Ltd. Annual Report 2022

profit model of the parks. In this way it can achieve diversified expansion models and profit models

of the parks.

5. Investment Sub-Division

In 2023 the key tasks of industrial investment sub-division are as follows: First the Company will

enhance the expansion and reserves of new projects; second the Company will fasten the

implementation of the decrease and withdrawal of invested projects and fund and promote the

withdrawal of cash flow.In 2023 the key tasks of venture capital sub-division are as follows: First the Company will work

to obtain the qualification of state-level incubators and build platform for tech innovation; second

the Company will accelerate the transition to a commercial real estate operator mode.XII Communications with the Investment Community such as Researches Inquiries and

Interviews

√ Applicable □ Not applicable

Way of Type

comm of

Main discussions Index to main

Date Place unicati commu Communication party

and materials information

on nicatio

provided by the communicate

n party Company d

Earnin Investors participating in the

Conference gs 2021 Annual Results Record Form for

Room of Office comm Individ Presentation of Konka Group

Investor

15 April 2022 Building of unicati Co. Ltd. via the Shenzhen Stock Relations

Konka R&D ualon Exchange Interaction Easy Activities (No.:

Building confer website 2022-01)

ence (http://irm.cninfo.com.cn)

Conference Record Form for

Room of Office One-on-one Institut Lv Meng Zhang Shaopeng

Investor

18 May 2022 Building of meetin ion (Shenzhen Runfan Investment RelationsKonka R&D g Co. Ltd.) Activities (No.:Building 2022-02)

Conference Record Form for

Room of Office Investor

23 May 2022 Building of Other Institut Han Ting (Invesco Great Wall

Konka R&D ion Fund Management)

Relations

Activities (No.:

Building 2022-03)

Conference Record Form for

Room of Office Investor http://www.c

24 May 2022 Building of Other Institution Li Peiyao (Xingrui Asset) Relations

ninfo.com.cn/

Konka R&D Activities (No.: new/index

Building 2022-04)

Conference Record Form for

Room of Office Investor

30 May 2022 Building of Other Institut Zhang Ruxiang (Guanglong Relations

Konka R&D ion Investment) Activities (No.:

Building 2022-05)

Conference Record Form for

Room of Office Investor

31 May 2022 Building of Other Institution Lin Zunying (Haitang Capital) RelationsKonka R&D Activities (No.:

Building 2022-06)

36Konka Group Co. Ltd. Annual Report 2022

Conference Record Form for

Room of Office Investor

13 June 2022 Building of Other Institut Liu Xiaoyu (First Capital Relations

Konka R&D ion Securities) Activities (No.:

Building 2022-07)

Conference Record Form for

Room of Office One- Investor

28 June 2022 Building of on-one Institut Liao Zelue (Shenzhen Elitimesmeetin ion Capital Management Co. Ltd.) RelationsKonka R&D g Activities (No.:Building 2022-08)

Conference Record Form for

Room of Office Investor

4 July 2022 Building of Other Institut

Konka R&D ion

Sun Lei (Nuosheng Qianhai) Relations

Activities (No.:

Building 2022-09)

Conference Tangzhou Yingzi (China Record Form for

Room of Office One- International Capital Investor

25 August 2022 Building of on-one Institutmeetin ion Corporation Limited) He Jialin RelationsKonka R&D g (KaiFeng Investment) Ma Activities (No.:Building Qiwen (First State Cinda Fund) 2022-10)

Conference Record Form forOne- Investor

19 September Room of Office on-one Institut Chen Weiqi Zou Huiyang

2022 Building ofKonka R&D meetin ion (Guosen Securities)

Relations

Activities (No.:

Building g 2022-11)

Investors participating in

Conference theKonka Group Co. Ltd. 2022 Record Form for

Investor

9 November Room of Office Individ Collective Reception Day of

2022 Building of Other Listed Companies of Shenzhen RelationsKonka R&D ual Districts via the Quanjing Activities (No.:

Building Roadshow website 2022-12)

(http://rs.p5w.net/)

Li Junhui (Shenwan Hongyuan

Securities) Liang Xing

(Xiaozhong Capital) Yang Hui

Conference Institut (Saishuo Fund) Chen Xue

Record Form for

Room of Office (Yuhong Asset Management) Investor6 December

2022 Building of

Roads ion and

individ Zhou Chengdong (Zhuocheng RelationsKonka R&D how ual Investment) Tan Shuai Activities (No.:Building (Guochuang United Bank) 2022-13)

Zhang Bengeng (Zhongguang

Shengtong) Zhao Yueyang

(individual investor)

Conference Record Form for

13 December Room of Office

Investor

Building of Other Institut2022 Ma Wangjie (China Securities) RelationsKonka R&D ion Activities (No.:

Building 2022-14)

37Konka Group Co. Ltd. Annual Report 2022

Part IV Corporate Governance

I General Information of Corporate Governance

In the Reporting Period strictly in accordance with the Company Law Securities Law of the PRC

Code of Corporate Governance for Listed Companies Share Listing Rules of Shenzhen Stock

Exchange and the relevant rules and regulations of the CSRC the Company timely amended the

internal control systems such as the Articles of Association and Administrative Method on

Provision of External Financial Aids as well as Management System on Investors Relationship

continuously perfected the corporate governance structure and standardized the Company’s

operation. By the end of the Reporting Period the actual conditions of corporate governance

basically met the requirements of the regulatory documents in respect of corporate governance

structure of listed companies issued by CSRC.(I) Shareholders and the Shareholders’ General Meeting

The Company drew up Articles of Association and Rules for Procedure of Shareholders’ General

Meeting ensured that all shareholders in particular medium and minor shareholders enjoy legal

rights and equal standard. In the Reporting Period the Company was able to publish

announcement on Shareholders’ General Meetings in advance convened Shareholders’ General

Meeting with strictly accordance to relevant requirements so as to enable the shareholders have

their rights of information to the Company’s material issues and the participation rights. In 2022

the Company convened seven Shareholders’ General Meeting in total. The Company seriously did

well the registration arrangement and organization work for the Shareholders’ General Meeting

before the circular on convening the Shareholders’ General Meeting being published at the

designated media. The Company convened the Shareholders’ General Meeting at the office

address of the Company strictly in line with relevant stipulations which was convenient in traffic

and the shareholders could attend the session in accordance with their actual situation. The

Company’s directors supervisors and senior management staffs made explanations and

description for the shareholders’ questions and advices at the session.(II) Controlling shareholder and the Company

In the Reporting Period the controlling shareholders and actual controllers strictly regulated its

behavior and complied with laws in exercising their rights and obligations not bypassed the

Shareholders’ General Meeting to intervene in the Company’s decisions and operations directly or

indirectly. The Company was separated from the controlling shareholders and actual controllers in

aspects of its business personnel assets organ and finance the Board of Directors Supervisory

Committee and the internal departments of the Company functioned independently.

38Konka Group Co. Ltd. Annual Report 2022

(III) Directors and the Board of Directors

The number and structure of the Board Bureau of the Company were in compliance with laws and

regulations. The Company drew up Rules for Procedures of the Board Bureau so as to ensure a

high efficient operation and scientific decision-making of the Board Bureau; the Company has set

up Independent Director System and engaged three independent directors. In the Reporting Period

the number of directors and composition of the Board of Directors of the Company as well as the

procedure of selection was in accordance with the requirements of the rules and laws as well as

Articles of Association. The Company set up four special committees which were Financial Audit

Committee Nomination Committee Remuneration & Appraisal Committee Strategy Committee

to provide profession opinion for the decision of the Board of Directors. All the directors carried

out their work fulfilled their duties and scrupulously attended the Board sessions in accordance

with Rules of Procedure for the Board of Directors Rules for Independent Directors etc. 14

Board sessions were convened by the Company during the Reporting Period which brought the

decision-making mechanism of the Board of Directors into full play.(IV) Supervisors and supervisory committee

The Company has established Rules for Procedures of the Supervisory Committee persons and

structure of the Supervisory Committee was in line with relevant laws and statutes supervisors

can earnestly perform their responsibilities independently and efficiently executed supervision

and check responsibilities with a spirit of being responsible to shareholders. In the Reporting

Period the number of supervisors and composition of the Supervisory Committee of the

Company as well as their selecting procedure complied with the laws regulations. In accordance

with the requirement of the Rules of Procedure for Supervisory Committee the supervisors

performed their duties in an earnest and responsible manner and exercised their functions of

supervision on the decision-making procedure of the Board of Directors resolutions and the

Company’s operation by law and took effective supervision over the Company’s significant

events related transactions financial position as well as the legality and compliance on duty

performance by the directors president and other senior management members.(V) Performance Appraisal and Incentive & Restrictive Mechanism

The senior management staffs of the Company were recruited on an open basis and in compliance

with the laws and regulations. The Company has established and gradually improved the

performance appraisal standards and incentive & restrictive mechanism for senior management

staffs so as to attract qualified personnel and ensure the stability of senior management staffs.(VI) Interested parties

During the Reporting Period the Company fully respected and maintained the legal rights of the

interested parties and realized the balance of interest among the parties such as society

shareholders and employees etc. Meanwhile the Company protected the rights of the employees

39Konka Group Co. Ltd. Annual Report 2022

promoted the environmental protection and actively joined in the social benefit and charitable

cause so as to jointly promote sustainable and healthy development.(VII) Information disclosure and transparency

The Company formulated the Management System for Investor Relations and the Management

System for Information Disclosure and the Rules on Implementation for Information Disclosure

Committee. And the Company designated specially-assigned person to take charge of the

information disclosure and designated specialized department to be responsible for the reception

of shareholders and consultation actively carrying out the work for investor relations

management to ensure equal access to information for all shareholders. The Company strictly

complied with the requirements of the laws regulations and the Articles of Association to disclose

its information as required by the relevant regulations on an timely honest complete and accurate

basis to ensure the accurate and timely information disclosure while ensure equal access to

information for all shareholders.(VIII) Non-standard governance

1. Type of non-standard governance matter existed

There was a situation that the Company disclosed undisclosed information.

2. Types and cycle of undisclosed information provided to the principal shareholder

The Company provided monthly financial data to the principal shareholder.

3. Reasons for the related non-standard governance existed

The Company submitted the undisclosed information such as monthly financial data to the

substantial shareholder directly administrated by the State-owned Assets Supervision and

Administration Commission of State Council in accordance with the managerial demand of

SASAC.

4. Impact on Company independenceAfter the self-inspection the Company kept strictly to the requirements of “Notice onStrengthening the Supervision of Listed Company’s Provision of Non-public Information toSubstantial Shareholders and Actual Controllers” and “Supplementary Notice ConcerningStrengthening the Supervision of the Non-standard Governance Behavior of Listed Company'sProvision of Non-public Information to Substantial Shareholders and Actual Controllers” while

stringently performed the necessary procedures. There existed no circumstances of substantial

shareholder’s abuse of control and disclosure of undisclosed information for insider trading and

hence it has no impact on the independence of the Company.(IX) Development of company’s special governance activity formulation and

implementation of registration and management system for the insider of inside information

1. Establishment and perfection of management system for the insider of inside information

To further standardize the company’s inside information management behavior strengthen the

40Konka Group Co. Ltd. Annual Report 2022

company’s inside information confidential work and maintain the fair principle of information

disclosure the Company established Inside Information and Insider Management System in

Konka Group Co. Ltd. The Company strictly implements the system in the information

disclosure work meanwhile carefully implements the Company’s inside information and insider

registration and management method registers the insider of inside information and report to

Shenzhen Stock Exchange and Shenzhen Security Regulatory Bureau according to the provision.The Company conducted the special inspection on the inside information management during the

occurrence of major event in 2022 and the annual report in 2022. After the inspection the Company

actually realized that the insider of inside information strictly kept the confidential provision did

not disclose divulge and spread the Company’s inside information to the outside the insider of

inside information did not buy and sell the Company’s share with the inside information before

disclosing the major sensitive information influencing the Company’s share price there was no

investigation and rectification from the regulatory department during the editing review and

disclosure of regular report and major event. Management Rules for Inside Information and Insider

Management System of Konka Group Co. Ltd. was implemented in place and controlled effectively.

2. Establishment and implementation of external information user’s management system

To strengthen the management on the reporting of Company’s inside information the Company

establishes Inside Information Reporting Management System and prescribes the inside

information reporting range reporting procedure responsibility division and other matters

according to Security Law in People’s Republic of China Information Disclosure Management

Method in Listed Company Inside Information and Insider Management System in Konka Group

Co. Ltd. and other related provisions in the laws regulations and regulatory documents.The Company conducted the special inspection on the inside information reporting status during

the occurrence of major event in 2022 and the annual report in 2022. After the inspection the

Company’s inside information reporting status complies with the requirements in Inside

Information Reporting Management System. Inside Information Reporting Management System

was implemented in place and controlled effectively.Indicate by tick market whether there is any material incompliance with laws regulations and

provisions issued by the CSRC governing the governance of listed companies.□ Yes √ No

No such cases in the Reporting Period.II The Company’s Independence from Its Controlling Shareholder and Actual Controller in

Business Personnel Asset Organization and Financial Affairs

During the Reporting Period the company was fully separated from the controlling shareholders in

terms of business staff assets organs and finance which owned independent legal representative

and main status in market competition and had independent accounting as well as possessed

41Konka Group Co. Ltd. Annual Report 2022

complete business and the ability of independent operation to face the market.(I) Business: the Company owned complete supply R&D production and sales system possessed

ability of independent operation to face the market by independent operation independent

accounting & decision-making independent bearing responsibility & risks didn’t subject to the

interference and control of the controlling shareholders actual controller and its controlled

enterprises.(II) Staff: the Company was independent of the controlling shareholder with respect to labor

personnel and salaries management. The Company owned independent team of staffs the senior

management staff financial personnel and business personnel received their remunerations in the

Company and they were full-time staffs of the Company without holding any post except directors

and supervisors in shareholders’ units or other related enterprises.(III) Assets integrity: the Company had production and operation premises completely separated

from the controlling shareholder and the unaffiliated and integral assets structure as well as the

independent production system ancillary production system the ancillary facilities house property

right and other assets which also possessed independent procurement and sales system.(IV) Organ: the Company had its own functional organs adapting to the needs of self-development

and market competitiveness all the functional organs were separated from each other in aspects of

personnel office premises and management rules etc. there existed no particulars about any

shareholders other units or individuals interfering the organ setting of the Company.(V) Finance: the Company established an independent finance department with full-time financial

personnel and an independent finance and accounting system and independently carried out the

financial work in line with requirements of relevant accounting rules; the Company promulgated

sound financial management system to operate independently without sharing common accounts

with the controlling shareholder related enterprise other units or individual; the Company

independently declared and paid the tax by laws without particulars on paying taxes together with

shareholders’ units.III Horizontal Competition

□ Applicable √ Not applicable

IVAnnual and Special General Meetings Convened during the Reporting Period

1. General Meeting Convened during the Reporting Period

Investor

Meeting Type participat Date of the

ion ratio meeting

Disclosure date Meeting resolutions

st

The 1st Extraordinary Extraordinar Resolutions of the 1

General Meeting of 2022 y General

24.2123 22 March 2022 23 March 2022 Extraordinary General

Meeting ％ Meeting of 2022

The 2021 Annual General Annual

Meeting General

24.1901 25 April 2022 26 April 2022 Resolutions of the 2021

Meeting ％ Annual General Meeting

nd

The 2nd Extraordinary Extraordinar Resolutions of the 2

General Meeting of 2022 y General

24.4254 16 May 2022 17 May 2022 Extraordinary General

Meeting ％ Meeting of 2022

42Konka Group Co. Ltd. Annual Report 2022

rd

The 3rd Extraordinary Extraordinary General 24.4426

Resolutions of the 3

General Meeting of 2022 27 June 2022 28 June 2022 Extraordinary GeneralMeeting ％ Meeting of 2022

The 4th Extraordinary Extraordinar 24.5327 Resolutions of the 4

th

General Meeting of 2022 y General 25 July 2022 26 July 2022 Extraordinary GeneralMeeting ％ Meeting of 2022

th

The 5th Extraordinary Extraordinary General 24.5474 14 November 15 November

Resolutions of the 5

General Meeting of 2022 Extraordinary GeneralMeeting ％ 2022 2022 Meeting of 2022

th

The 6th Extraordinary Extraordinar Resolutions of the 6

General Meeting of 2022 y General

24.5216 23 December 24 December

2022 2022 Extraordinary GeneralMeeting ％ Meeting of 2022

2. Special General Meetings Convened at the Request of Preferred Shareholders with

Resumed Voting Rights

□ Applicable √ Not applicable

V Directors Supervisors Senior Management and Staff

1. Basic Information

Increas Decrea Other

Incu G Begin e in the se in incre Ending

Name Office mbe en A Start of End of

ning the ase/d

shareh Reporti Reporti ecrea shareho

Reason

title nt/Fo de ge tenure tenure for

rmer r olding

ng

Period ng se

lding change

(share) Period (shar (share)(share) (share) e)

Directo

r

Incu M

Liu Chairm 25 July 25 July

mbe al 52 0 0 0 0 0

Fengxi an of 2022 2025

nt e

the

Board

Incu M

Directo 25 July 25 July

Yao Wei mbe al 48 0 0 0 0 0

r 2022 2025

nt e

Incu M

Zhou Directo 25 July 25 July

mbe al 44 0 0 0 0 0

Bin r 2022 2025

nt e

Emplo

Incu M

Ye yee 25 July 25 July

mbe al 53 0 0 0 0 0

Xingbin directo 2022 2025

nt e

r

Indepe

Incu M

ndent 25 July 25 July

Liu Jian mbe al 57 0 0 0 0 0

directo 2022 2025

nt e

r

Indepe

Wang Incu M

ndent 25 July 25 July

Shuguan mbe al 52 0 0 0 0 0

directo 2022 2025

g nt e

r

Indepe Fe

Deng Incu

ndent m 25 July 25 July

Chunhu mbe 60 0 0 0 0 0

directo al 2022 2025

a nt

r e

Superv Incu M

Cai 25 July 25 July

isor mbe al 50 0 0 0 0 0

Weibin 2022 2025

chairm nt e

43Konka Group Co. Ltd. Annual Report 2022

an of

the

Superv

isory

Commi

ttee

Incu M

Yang Superv 25 July 25 July

mbe al 54 0 0 0 0 0

Guobin isor 2022 2025

nt e

Emplo

Incu M

yee 25 July 25 July

Li Jun mbe al 52 0 0 0 0 0

supervi 2022 2025

nt e

sor

Incu M

Zhou Preside 27 March 27 March

mbe al 44 0 0 0 0 0

Bin nt 2020 2023

nt e

Executi

Incu M 23

Cao ve vice 27 March

mbe al 45 August 0 0 0 0 0

Shiping preside 2023

nt e 2022

nt

Vice Incu M

Li 27 March 27 March

preside mbe al 55 0 0 0 0 0

Hongtao 2020 2023

nt nt e

Board Incu M

Wu 27 March 27 March

Secreta mbe al 48 0 0 0 0 0

Yongjun 2020 2023

ry nt e

Incu M

Li 27 March 27 March

CFO mbe al 50 0 0 0 0 0

Chunlei 2020 2023

nt e

Vice Incu M

27 March 27 March

Yang Bo preside mbe al 53 0 0 0 0 0

20202023

nt nt e

Vice Incu M

Lin 1 June 27 March

preside mbe al 52 0 0 0 0 0

Hongfan 2022 2023

nt nt e

M 1 28

Li Directo For

al 45 Novembe February 0 0 0 0 0

Zheng r mer

e r 2021 2022

Reduct

ion

Vice M 28 throug

Sun For 27 March

preside al 51 February 26000 0 6500 0 19500 h

Qingyan mer 2020

nt e 2022 centrali

zed

bidding

Indepe

Sun M 3

ndent For 25 July

Shengdi al 68 Decembe 0 0 0 0 0

directo mer 2022

an e r 2018

r

Total 26000 0 6500 0 19500

Indicate by tick mark whether any directors or supervisors left or any senior management were

disengaged during the Reporting Period

√ Yes □ No

During the Reporting Period the former director of the Company Mr. Li Zheng resigned the post of

44Konka Group Co. Ltd. Annual Report 2022

director for job arrangement and the former vice president of the Company Mr. Sun Qingyan

resigned the post of vice president for job changes.Change of Directors Supervisors and Senior Management

√Applicable □ Not applicable

Type of

Name Office title Date of change Reason for change

change

Elected as Director by the shareholders’

Liu Fengxi Director Appointed 25 July 2022

meeting

Chairman of Elected as Chairman of the Board by the

Liu Fengxi Appointed 25 July 2022

the Board Board

Elected as Director by the shareholders’

Yao Wei Director Appointed 25 July 2022

meeting

Elected as Director by the shareholders’

Zhou Bin Director Appointed 25 July 2022

meeting

Elected as Director by the shareholders’

Ye Xingbin Director Appointed 21 March 2022

meeting

Employee Elected as Employee Director by the

Ye Xingbin Appointed 25 July 2022

director congress of workers and staff

Independent Elected as Independent Director by the

Liu Jian Appointed 25 July 2022

director shareholders’ meeting

Wang Independent Elected as Independent Director by the

Appointed 25 July 2022

Shuguang director shareholders’ meeting

Independent Elected as Independent Director by the

Deng Chunhua Appointed 25 July 2022

director shareholders’ meeting

Elected as Supervisor by the shareholders’

Cai Weibin Supervisor Appointed 25 July 2022

meeting

Chairman of

the Elected as Chairman of the Supervisory

Cai Weibin Appointed 25 July 2022

Supervisory Committee by the Supervisory Committee

Committee

Elected as Supervisor by the shareholders’

Yang Guobin Supervisor Appointed 25 July 2022

meeting

Employee Elected as Employee Supervisor by the

Li Jun Appointed 25 July 2022

supervisor congress of workers and staff

Executive vice

Cao Shiping Appointed 24 August 2022 Appointed by the Board

president

Lin Hongfan Vice president Appointed 1 June 2022 Appointed by the Board

Li Zheng Director Left 28 February 2022 Resigned for job arrangement

Sun Qingyan Vice president Left 28 February 2022 Resigned for job changes

Left for

Independent expiration of

Sun Shengdian 25 July 2022 Expiration of the term of office for the Board

director the term of

office

2. Biographical Information

Professional backgrounds major work experience and current duties in the Company of the

incumbent directors supervisors and senior management:

1. Director

Liu Fengxi male ethnic group of Han born in 1971 was the Chairman of the Board with a master

degree. He once worked as the marketing GM for the multi-media division of Konka Group

Assistant GM and then Vice GM of Shenzhen Konka Telecommunications Technology Co. Ltd.

45Konka Group Co. Ltd. Annual Report 2022

Chief of the Operation Management Center of Konka Group Assistant to President Vice President

President Secretary of the Party Committee CEO and Chairman of the Board of Konka Group

Vice GM and the member of the Standing Committee of OCT Group GM Secretary of the Party

Committee and Chairman of the Board of Shenzhen Huakang Chuangzhan Technology Holding

Group Co. Ltd. Executive Director and Chairman of the Board of OCT North Investment Co. Ltd.etc. And now he is acting as the Deputy Secretary of the Party Committee Director GM of OCT

Group Deputy Chairman of the Board and Deputy Secretary of CPC of Shenzhen Overseas

Chinese Town Co. Ltd. and the Board Chairman of Konka Group.Yao Wei Director male ethnic group of Han bachelor degree was born in 1975. He once served

as Chief Accountant in CGN Wind Power Co. Ltd. Chief Accountant in CGN New Energy

Holdings Co. Ltd. Vice GM (in charge) of Financial Department GM of Financial Department

GM of Finance and Asset Management Department in China General Nuclear Power Corporation.Currently he acts as the director of China Everbright Bank Co. Ltd. the member of the Standing

Committee and Chief Accountant in Overseas Chinese Town Holdings Company and Director of

Konka Group.Zhou Bin male ethnic group of Han born in 1979 was the CEO director and president of the

Company with a bachelor degree. He once served as the director assistant deputy director and

director in Operating Management Center in Konka Group assistant of the president in the Board

of Directors & Director in Operating Management Center in Konka Group and President of Konka

Group. Now he acts as the Chairman of Shenzhen Konka Investment Holdings Co. Ltd. and

Shenzhen Konka Capital Equity Investment Management Co. Ltd. and Director

Secretary of the Party Committee and President & CEO in Konka Group.Ye Xingbin male Han Chinese born in 1970 was the Employee Director of the Company and

holds a bachelor's degree. He previously served as a Special Director at the Overseas Chinese Town

Holdings Company (OCT Group) and was a member of the Standing Committee of the

Qiandongnan Prefecture of Guizhou Province the Deputy Governor of the Prefecture Government

the Director of Shenzhen Huakang Chuangzhan Technology Holding Group Co. Ltd. and the

Deputy Party Secretary of the Party Committee and Director of Konka Group. He is currently

serves as the Vice Chairman of the Federation of Trade Unions Committee of Overseas Chinese

Town Holdings Company Deputy Party Secretary of the Party Committee Chairman of the Labor

Union and Employee Director of Konka Group.

2. Independent Director

46Konka Group Co. Ltd. Annual Report 2022

Mr. Liu Jian Independent Director is a Han Chinese man born in 1966 and holds a master's degree.His notable professional experiences include having served as an editor at the Foreign Economic

and Trade University Press and the China Business Times and also as an independent director at

Wuhan Tianyuan Environmental Protection Co. Ltd. and Hisense Visual Technology Co. Ltd. In

his current capacity Mr. Liu Jian holds various positions in different organizations. He serves as the

chief editor and president of the Economic Observer Newspaper presides over the Beijing Jingguan

Cultural Media Co. Ltd. as its chairman and functions as a director and general manager of

Shandong Economic Observer Newspaper Media Co. Ltd. Additionally he takes on the role of an

executive director at Beijing Jingguan Advertising Management Co. Ltd. and operates as an

independent director of both the Founder Technology Group Corporation and Konka Group.Wang Shuguang Independent Director male ethnic group of Han was born in 1971 with a

doctoral degree. He served as Independent Director of Yantai Rural Commercial Bank Jinan Rural

Commercial Bank Ningbo Yuyao Rural Commercial Bank and SDIC Zhonglu and External

Supervisor and Convener of the Board of Supervisors of Industrial Bank Co. Ltd. Currently he

serves as Professor and Doctoral Supervisor in the School of Economics of Peking University

Executive Deputy Director of the Institute for Cultural Industries Peking University and

Independent Director of Konka Group.Deng Chunhua Independent Director female ethnic group of Han born in 1963 with a master

degree of management accounting professor and a Certified Public Accountant in China (non-

practicing member). She served as Chief Accountant and Project Manager of WUYIGE Certified

Public Accounts LLP. She has been teaching in the School of Accounting of Zhongnan University

of Economics and Law as Assistant Lecturer Lecturer Associate Professor and Professor. Currently

she serves as a Master Tutor and Professor in the School of Accounting of Zhongnan University of

Economics and Law the Independent Director of Zhejiang Goldensea Hi Tech Co. Ltd Zhejiang

Jinke Tom Culture Industry Co. Ltd. Wolong Electric Group Co. Ltd. Zhejiang Youchuang

Material Technology Co. Ltd. and Konka Group.

3. Supervisor

Cai Weibin Chairman of the Supervisory Committee male ethnic group of Han Master’s Degree

was born in 1973. He once served as vice GM deputy secretary of the Party Committee and

Secretary of Committee for Discipline Inspection in Chongqing OCT Industry Development Co.Ltd. Vice Minister of Discipline Inspection and Supervision and Director of the Discipline

Inspection Office in Overseas Chinese Town Holdings Company Currently he acts as GM of Legal

Compliance Department in Overseas Chinese Town Holdings Company and Chairman of the

47Konka Group Co. Ltd. Annual Report 2022

Supervisory Committee of Konka Group.Yang Guobin Supervisor male was born in 1969 Bachelor’s Degree Certified Public Accountant.He served as Deputy Director of the Finance Department of OCT Group CFO of Konka Group and

Deputy Director of the Corporate Management Department of OCT Group. Currently he serves as

a full-time Director in OCT Group and Supervisor of Konka Group.Li Jun male ethnic group of Han born in 1971 was an employee supervisor of the Company with

a bachelor degree. Formerly worked as the Senior Manager of the Financial Department in

Shenzhen Telecommunications Technology Co. Ltd. the Senior Manager and assistant to the chief

and deputy director of Auditing and Legal Affairs Department in Konka Group Office Director of

discipline inspection commission of Konka Group and employee supervisor of Konka Group.Presently working as the deputy secretary of discipline inspection commission of Konka Group

General Counsel Chief of the Auditing and Legal Affairs Department and Employee Supervisor of

Konka Group.

4. Senior Executive

Zhou Bin male ethnic group of Han born in 1979 was the director and president of the Company

with a bachelor degree. He once served as the director assistant deputy director and director in

Operating Management Center in Konka Group assistant of the president in the Board of Directors

& Director in Operating Management Center in Konka Group and President of Konka Group. Now

he acts as the Chairman of Shenzhen Konka Investment Holdings Co. Ltd. and Shenzhen Konka

Capital Equity Investment Management Co. Ltd. and Director Secretary of the Party Committee

and President & CEO in Konka Group.Cao Shiping male Han nationality born in 1978 was the executive vice president of the Company

with a master degree. Once served as the GM in Jinzhou Branch and Tianjin Branch of Konka

Group Multi-media GM in Multi-media Business Division Customer Cooperation Department

vice GM in Multi-media Marketing Business Division vice GM in Multi-media Business Division

and GM in Marketing Center GM in Multi-media Business Division GM in Internet Business

Division and vice president of Konka Group. Now he acts as the executive vice president in Konka

Group.Li Hongtao male Han nationality born in 1968 was the vice president of the Company with a

bachelor degree. He successively took the post such as Assistant to GM GM Chairman of the

Board and GM of Shenzhen Konka Telecommunication Technology Co. Ltd and Assistant to

48Konka Group Co. Ltd. Annual Report 2022

President and vice president of Konka Group etc. He now is acting as Vice President of Konka

Group.Wu Yongjun male Han nationality born in 1975 was the Board Secretary with a master degree.Formerly he worked as the senior manager of Secretariat assistant to the chief vice chief chief

Securities Affairs representative and Board Secretary in Konka Group. Presently he is working as

the secretary of the board of directors of Konka Group.Li Chunlei male Han nationality born in 1973 was the CFO of the Company with a master degree.Once served as the director in Real Estate Business Division in Konka Group vice GM and GM in

Kunshan Kangsheng Investment Development Co. Ltd. deputy director (preside the work) and

director in Strategic Development Center GM in Financial Center and GM in Asset Settlement

Center and CFO of Konka Group. Now he acts as the CFO in Konka Group.Yang Bo male Han nationality born in 1970 was the vice president of the Company with a master

degree. Once served as the director in Shenzhen Cable Television Education Financial Channel

director in the market sales and support region of US Tailiyang Communications Company GM in

Program Operating Department in Shenzhen Topway Video Communication Co. Ltd. director and

GM in Shenzhen Tianhua Century Media Co. Ltd. GM in Market Sales Center in Shenzhen

Topway Video Communication Co. Ltd. and vice president of Konka Group. Now he acts as the

vice president in Konka Group.Lin Hongfan male Han nationality born in 1971 was the vice president of the Company with a

MBA degree. Once served as the vice GM in Multi-media Marketing Business Divisionof Konka

Group GM of Color TV Strategy and Supply Chain Management Center executive vice GM and

GM in Multi-media Business Division of Konka Group vice president and president assistant of

Konka Group. Now he acts as the vice president in Konka Group.Offices held concurrently in shareholding entities:

√Applicable □Not applicable

Remuneration or

Office held in the End of

Name Shareholding entity Start of tenure allowance from the

shareholding entity tenure

shareholding entity

Liu OCT Group Director Deputy SecretaryFengxi of CPC GM 21 May 2021 Yes

Liu Shenzhen Overseas Deputy Chairman of the

Fengxi Chinese Town Co. Ltd. Board Deputy Secretary 22 June 2021of CPC

Party Committee Standing

Yao Wei OCT Group Committee and Chief 1 July 2020 Yes

Accountant

49Konka Group Co. Ltd. Annual Report 2022

Cai OCT Group GM of Legal ComplianceWeibin Department 1 December 2020 Yes

Yang

Guobin OCT Group

Full-time director in Board

Office 7 March 2018 Yes

1. Except the above situation other directors supervisors and senior management didn’t hold any position in the

shareholders’ units.Notes 2. It is unknown the ending date of the posts of Mr. Liu Fengxi Mr. Yao Wei Mr. Cai Weibin and Mr. Yang

Guobin held in the shareholders’ units.Offices held concurrently in other entities:

√Applicable □Not applicable

Remuneration or

Office held in End of

Name Other entity Start of tenure allowance from

the entity tenure

the entity

Yao Wei China Everbright Bank Co. Ltd. Director 5 February 2021

Liu Jian The Economic Observer Chief editor andpresident 16 April 2001 Yes

Liu Jian Beijing Economic Observer Chairman of theCulture Media Co. Ltd. Board 25 May 2018

Liu Jian Shandong Economic ObserverMedia Co. Ltd. Director GM 28 September 2022

Beijing Economic Observer

Liu Jian Baoguang Consulting Management Executivedirector 14 September 2020Co. Ltd.Liu Jian Founder Technology Group Co. IndependentLtd. director 15 November 2018 Yes

Wang School of Economics of Peking

Shuguang University Professor Yes

Wang Institute for Cultural Industries of

Shuguang Peking University Deputy director

Deng Chunhua Zhongnan University ofEconomics and Law Professor Yes

Deng Chunhua Zhejiang Goldensea Hi Tech IndependentCo.Ltd director 15 May 2019 Yes

Deng Chunhua Zhejiang Jinke Culture Industry IndependentCo. Ltd. director 8 July 2020 Yes

Deng Chunhua Wolong Electric Group Co. Ltd. Independentdirector 7 September 2020 Yes

Deng Chunhua Zhejiang Youchuang Material IndependentTechnology Co.Ltd. director 27 October 2020 Yes

Notes None

Punishments imposed in the recent three years by the securities regulator on the incumbent

directors supervisors and senior management as well as those who left in the Reporting Period:

□ Applicable √ Not applicable

3. Remuneration of Directors Supervisors and Senior Management

Decision-making procedure determination basis and actual payments of remuneration for directors

supervisors and senior management:

The salary of directors and supervisors of the Company should be submitted to the shareholders

meeting for review after the approval and consent by the Board of directors. Referred to the salary

level of the Directors and Supervisor of the domestic listed companies of same industry the salary

proposal of the Director and Supervisors of the Company which approved and reviewed by the 2nd

Extraordinary General Meeting of 2015 were as follows: (1) the basic annual salary standard of the

Board Chairman was of RMB1.2 million the subsidy standard of other Directors (excluding the

Directors serving in the Company) was of RMB0.3 million per person per year and the subsidy

50Konka Group Co. Ltd. Annual Report 2022

standard of the Supervisors (excluding the Employee Supervisors) was of RMB0.2 million per

person per year; which was executed since June 2015. (2) the above standards were all pre-tax

standard with the individual income tax burdened in person as well as the Company withheld and

remitted tax.Other treatment for independent directors: travel expense when they went to attend the Board

sessions Supervisory sessions or Shareholders’ General Meetings and the expenses when they were

performing their duties as stipulated in the relevant regulations and the Articles of Association and

other relevant systems all these could be reported for deletion.The Board of Directors determined the remuneration of senior management staffs referring to the

following factors: a. scope of jobs and responsibility shouldered; b. actual profit of the Company; c.market remuneration level in the same industry and same area.Remuneration of the directors supervisors and senior management of the Company during the

Reporting Period

Unit: RMB'0000

Total before-

Any

tax

Incumbent/For remuneration

Name Office title Gender Age remuneration

mer from related

from the

party

Company

Liu Fengxi Chairman of the Board Male 52 Incumbent Yes

Yao Wei Director Male 48 Incumbent Yes

Secretary of CPC CEO

Zhou Bin Male 44 Incumbent 400.19 No

Director President

Employee Director

Ye Xingbin Male 53 Incumbent 202.02 No

Deputy Secretary of CPC

Liu Jian Independent director Male 57 Incumbent 12.5 No

Wang Shuguang Independent director Male 52 Incumbent 30 No

Deng Chunhua Independent director Female 60 Incumbent 30 No

Chairman of the

Cai Weibin Male 50 Incumbent Yes

Supervisory Committee

Yang Guobin Supervisor Male 54 Incumbent Yes

Li Jun Employee Supervisor Male 52 Incumbent 145.80 No

Cao Shiping Executive vice president Male 45 Incumbent 210.18 No

Li Hongtao Vice president Male 55 Incumbent 199.04 No

Wu Yongjun Board Secretary Male 48 Incumbent 195.73 No

Li Chunlei CFO Male 50 Incumbent 210.93 No

Yang Bo Vice president Male 53 Incumbent 198.33 No

Lin Hongfan Vice president Male 52 Incumbent 214.77 No

Sun Shengdian Independent director Male 68 Former 17.5 No

Li Zheng Director Male 45 Former Yes

Sun Qingyan Vice president Male 51 Former 139.86 No

Total -- -- -- -- 2206.85 --

VI Performance of Duty by Independent Directors in the Reporting Period

1. Board Meeting Convened during the Reporting Period

Meeting Date of the meeting Disclosure date Meeting resolutions

The 53rd rd th

Meeting of the 17 January 2022

Resolutions of the 53 Meeting of the 9 Board of

18 January 2022 Directors

51Konka Group Co. Ltd. Annual Report 2022

9th Board of

Directors

The 54th Resolutions on Adjusting Remunerations of Senior

Meeting of the 21 February 2022 23 February 2022 Management; Resolutions on 2022 Donation Plan;9th Board of Resolutions of the 54th Meeting of the 9th Board of

Directors Directors

The 55th

Meeting of the th th

9th Board of 4 March 2022 7 March 2022

Resolutions of the 55 Meeting of the 9 Board of

Directors

Directors

Resolutions of the 56th Meeting of the 9th Board of

Directors; Resolutions on Applying for General Credit

Limit from Industrial Bank Co. Ltd.; Resolutions on

Applying for General Credit Limit from Shenzhen

Branch China Guangfa Bank Co. Ltd.; Resolutions on

Applying for General Credit Limit from China

Construction Bank (CCB); Resolutions on Applying

for General Credit Limit from Shanghai Pudong

Development Bank (SPD bank); Resolutions on

Applying for General Credit Limit from Agricultural

The 56th Bank of China (ABC); Resolutions on Applying for

Meeting of the 28 March 2022 30 March 2022 General Credit Limit from China Resources Bank of

9th Board of Zhuhai Co. Ltd. (CRBC); Resolutions on Applying for

Directors General Credit Limit from Export-Import Bank ofChina (EIBC); Resolutions on Applying for General

Credit Limit from China Bohai Bank Co. Ltd.;

Resolutions on Applying for General Credit Limit from

Bank of Hangzhou; Resolutions on Applying for

General Credit Limit from Shenzhen Branch Hua Xia

Bank Co. Ltd.; Resolutions on Applying for General

Credit Limit from Shenzhen Rural Commercial Bank

(SRCB); Resolutions on Business Plan and Financial

Budget Plan for 2022; Resolutions on Formulating

Documents related to Management Authorized by the

Board of Directors

The 57th The 57th meeting of the 9th Board of Directors resulted

Meeting of the 27 April 2022 28 April 2022 in two resolutions: one concerning a new equity9th Board of investment plan for 2022 and the other regarding a

Directors new fixed assets investment plan for 2022.The 58th The 58th meeting of the 9th Board of Directors passed

Meeting of the a resolution regarding the investment and construction

9th Board of 20 May 2022 21 May 2022 of the Konka (Haimen) Science and Technology

Directors Innovation Park in the Nantong Haimen Economic andTechnological Development Zone.The 59th

Meeting of the The 59th meeting of the 9th Board of Directors resulted

9th Board of 1 June 2022 2 June 2022 in a resolution to purchase the office building of

Directors "Science and Technology Innovation Cloud Valley".The 60th The 60th meeting of the 9th Board of Directors

Meeting of the 10 June 2022 11 June 2022 included a resolution on the land collection and storage9th Board of in the east plant area of Henan Frestec Household

Directors Appliances Co. Ltd.The 61st

Meeting of the st th

9th Board of 8 July 2022 9 July 2022

Resolutions of the 61 Meeting of the 9 Board of

Directors

Directors

The 1st Meeting

of the 10th 25 July 2022 26 July 2022 Resolutions of the 1

st Meeting of the 10th Board of

Board of Directors

Directors

52Konka Group Co. Ltd. Annual Report 2022

nd

The 2nd Meeting Resolutions of the 2 Meeting of the 10

th Board of

of the 10th Directors; Resolution on the Listing Transfer of 49%

Board of 23 August 2022 25 August 2022 Equity in Dongguan Guankang Yuhong Investment

Directors Co. Ltd.; Resolution on Applying for General CreditLimit from HSBC

Resolutions regarding the management team's business

The 3rd Meeting performance assessment outcomes. Resolutions

of the 10th concerning the company's 2021 bonus plan for the

Board of 8 October 2022 management team. Resolutions pertaining to the

Directors payroll liquidation plan for 2021 and the payroll budgetplan for 2022. Resolution to request a comprehensive

credit line from China Development Bank.The fourth meeting of the 10th Board of Directors has

The 4th Meeting passed two resolutions. The first resolution is about

of the 10th revising the Measures for the Assessment of Business

Board of 27 October 2022 28 October 2022 Performance of Enterprise Heads of Konka Group Co.Directors Ltd. The second resolution is about applying for acomprehensive credit line from Xiamen International

Bank.Resolutions of the 5th Meeting of the 10th Board of

Directors; Resolutions on Letter of Commitment on

Performance for 2022 for the Company’s Management

Team; Resolution on Applying for General Credit

The 5th Meeting Limit from Bank of China; Resolution on Applying for

of the 10th General Credit Limit from Industrial and Commercial

Board of 6 December 2022 7 December 2022 Bank of China (ICBC); Resolution on Applying for

Directors General Credit Limit from Bank of Communications;Resolution on Applying for General Credit Limit from

Bank of Ningbo; Resolution on Applying for General

Credit Limit from China Zheshang Bank Co. Ltd.;

Resolution on Applying for General Credit Limit from

Guangdong Huaxing Bank

2. Attendance of Directors at Board Meetings and General Meetings

Attendance of directors at board meetings and general meetings

The director

Total number Board

Board Board failed to attend

of board Board meetings

meetings meetings the two General

meetings the meetings attended by

Director attended director consecutive meetings

director was attended on way of

through a failed to board attended

eligible to site telecommuni

proxy attend meetings

attend cation

(yes/no)

Liu Fengxi 14 1 13 0 0 No 0

Yao Wei 14 1 13 0 0 No 0

Li Zheng 2 0 2 0 0 No 0

Zhou Bin 14 1 13 0 0 No 7

Ye Xingbin 11 1 10 0 0 No 4

Sun

Shengdian 9 0 9 0 0 No 2

Liu Jian 5 0 5 0 0 No 0

Wang

Shuguang 14 0 14 0 0 No 0

Deng

Chunhua 14 0 14 0 0 No 0

Why any director failed to attend two consecutive board meetings:

Not applicable

3. Objections Raised by Directors on Matters of the Company

53Konka Group Co. Ltd. Annual Report 2022

Indicate by tick mark whether any directors raised any objections on any matter of the Company.□ Yes √ No

No such cases in the Reporting Period.

4. Other Information about the Performance of Duty by Directors

Indicate by tick mark whether any suggestions from directors were adopted by the Company.√ Yes □ No

Suggestions from directors adopted or not adopted by the Company:

During the Reporting Period the Directors of the Company vigorously attended the relevant

meetings carefully reviewed each proposal fully played the role of "making strategies making

decisions and preventing risks gained insight into the present situation of new businesses such as

semi-conductor and new energy the R&D and brand building progress the operating situation and

the execution situation of the internal control construction and the resolutions of the meetings of the

Board of Directors as well as the Annual General Meeting.Directors of the Company put forward the constructive advices by use of their own professional

knowledge towards the internal management. For example to actively promote the refinement of

the Company’s development strategy plan and implementation thereof to provide advices on

expanding the Company’s business and to pay attention to risks control of the Company such as the

cash flow and accounts receivable management. The Company carefully adopted the advices from

the Directors and constantly improved and enhanced the management level of the Company.VII Performance of Duties by Specialized Committees under the Board during this

Reporting Period

Other

Numb informat Details

er of ion about

Commi Member meeti Conven Content Important opinions and about issuesttee s ngs ed date suggestions raised the with

conve perform objections

ned ance of (if any)

duty

1. The arrangement of the audit

work on the 2021 Annual Report

of the Company was approved.

2. It was consented that the

annual financial statements shall

The 2021 Financial be provided to the CPA for the

Deng statements and the annual audit. 3. It is required that

Chunhu 7 Arrangement of the 2021 ShineWing Certified Public

Audit a Yao January Annual Audit submitted Accountants (special general

Commi Wei 8 2022 by the Company’s partnership) appointed by the

ttee Wang financial center (issued by Company should carry out the

Shuguan the Company prior to the auditing in strict accordance with

g entry of the annual CPA) the requirements of the ChinaPractice Standards for Certified

Public Accountants and should

promptly communicate with the

Committee if major problems are

discovered.

4 March Conduct a review of the No objections were raised

2022 following documents: regarding the following

54Konka Group Co. Ltd. Annual Report 2022

2021 Annual Internal documents submitted by the

Audit Report of Konka company: 2021 Annual Internal

Group submitted by the Audit Report of Konka Group

auditing company Konka Konka Group’s Internal Audit

Group’s Internal Audit Quality Self-assessment Report

Quality Self-assessment and Konka Group’s 2022 AuditRepor” and Konka and Project Post-evaluation

Group’s 2022 Audit and Work Plan.Project Post-evaluation

Work Plan.The CPAs for annual

audit were engaged for No objection was made to the

15 the discussion and review 2021 annual financial statements

March of the Company's of the Company preliminarily

2022 financial statements after audited by ShineWing Certifiedthey have issued Public Accountants (special

preliminary audit common partnership).opinions.Communications were 1. The 2021 annual audit

made with the Internal performed by ShineWing

Audit Department of the Certified Public Accountants

Company; the 2021 (special common partnership)

annual audit performed was satisfying. 2. No objection

by ShineWing Certified was made to the 2021 Audit

18 Public Accountants Report issued by ShineWing

March (special common Certified Public Accountants

2022 partnership) was (special common partnership). 3.

appraised; the 2021 It was proposed that ShineWing

annual financial Certified Public Accountants

statements were reviewed (special common partnership) be

and retention of the retained for further service as the

accounting firm was audit institution of the Company's

deliberated. 2022 annual financial statements.

27 April 2022Q1 financial No objection was made to the

2022 statements of the 2022Q1 financial statements ofCompany the Company.

23 2022 interim financial No objection was made to the

August statements of the 2022 interim financial statements

2022 Company of the Company.

Make a proposal to retain RSM

China Certified Public

17 Issues related to the Accountants (Special General

October selection of accounting Partnership) as the audit firm and

2022 firms for the year 2022 internal control audit firm for the

company’s 2022 financial

statements.

27 2021Q3 financial No objection was made to the

October statements of the 2021Q3 financial statements of

2022 Company the Company.

Sun

Shengdi

an Liu Approve the adjustment of

Fengxi Conduct a review and compensation standards for

Li 11 potential adjustment of senior management personnel of

Remun Zheng Februar the compensation of Konka Group and endorse the

eration Wang y 2022 senior management submission of the proposal for

and Shuguan personnel. review to the Company’s board

Apprais g Deng 5 meeting.al Chunhu

Commi a

ttee Sun

Shengdi Remunerations of

Remunerations of directors

28 directors supervisors and supervisors and senioran Liu March senior management as management as disclosed in theFengxi 2022 disclosed were audited. Company's 2021 Annual ReportYe were true. Remunerations of

Xingbin directors supervisors and senior

55Konka Group Co. Ltd. Annual Report 2022

Wang management as disclosed were

Shuguan consistent with the Company's

g Deng salary management policy and no

Chunhu violation was found.a

1. Conduct a review of

the performance The results of the performance

evaluation results of the evaluation of the Company’s

company’s management management team the 2021

team. bonus plan for the Company’s

19 2. Review the 2021 bonus management team and the plan

Septem plan for the company’s for the settlement of the

ber management team. company’s total wage bill in

Wang 2022 2021 and budget for the

Shuguan 3. Review the payroll Company’s total wage bill in

g Yao settlement plan for the 2022 were agreed to be submitted

Wei Ye company’s 2021 total to the board meeting for

Xingbin wage bill and the budget discussion.Liu Jian plan for the company’s

Deng 2022 total wage bill.Chunhu Conduct a review of thea proposal to amend the Approve the submission of the17 Enterprise Leader revised “Enterprise LeaderOctober

2022 Performance Evaluation

Performance Evaluation MethodMethod for Konka Group for Konka Group Co. Ltd.” to

Co. Ltd. of the company. the board meeting for discussion.Conduct a review of the Approve the submission of the

25 “2022 Performance 2022 Performance ResponsibilityNovemb Responsibility Agreement Agreement for the Management

er 2022 for the Management Team of the Company to the

Team of the Company. board meeting for discussion.It was agreed that Mr. Ye

Xingbin was nominated as a

22 Selection of new directors candidate for non-independent

Februar for the ninth Board of director of the Company's ninth

y 2022 Directors. Board of Directors and theproposal would be submitted to

Sun the board meeting of the

Shengdi Company for deliberation.an Liu Approve the appointment of Mr.Fengxi Lin Hongfan as the Vice

Zhou 23 May Appointment for the President of Konka Group and

Bin 2022 position of Vice President endorse the submission of this

Wang proposal for discussion to the

Shuguan company’s Board of Directors.g Deng Approve the nomination of Mr.Nomin Chunhu Liu Fengxi Mr. Yao Wei Mr.ation a 4 Zhou Bin Mr. Liu Jian Mr.Commi Conduct a review of the Wang Shuguang and Ms. Deng

ttee 28 June candidates for the Chunhua as candidates for the

2022 upcoming election of the 10th Board of Directors of the

Board of Directors. company and endorse the

submission of this proposal for

review to the company’s Board

of Directors.Liu Jian

Yao

Wei Approve the appointment of Mr.Zhou Cao Shiping as the Executive

Bin 12 Appointment for the

Wang August position of Executive

Vice President of Konka Group

Shuguan 2022 Vice President.and endorse the submission of

this proposal for discussion to the

g Deng Company’s Board of Directors.Chunhu

a

56Konka Group Co. Ltd. Annual Report 2022

VIII Performance of Duty by the Supervisory Committee

Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its

supervision in the Reporting Period.□ Yes √ No

The Supervisory Committee raised no objections in the Reporting Period.IX Employees

1. Number Functions and Educational Backgrounds of Employees

Number of in-service employees of the Company as the parent

1755

at the period-end

Number of in-service employees of major subsidiaries at the

12758

period-end

Total number of in-service employees at the period-end 14513

Total number of paid employees in the Reporting Period 14513

Number of retirees to whom the Company as the parent or its

0

major subsidiaries need to pay retirement pensions

Functions

Function Employees

Production 7629

Sales 3287

Technical 1537

Financial 672

Administrative 1388

Total 14513

Educational backgrounds

Educational background Employees

Master and above 395

Bachelor 3365

Junior college 3903

High school and below 6850

Total 14513

2. Employee Remuneration Policy

The Company promulgated its remuneration system with the operating strategy of serving for the

enterprise development and enhancement and the principle of deciding the remuneration according

to the post business performance and capabilities as well as the market competitiveness and

internal fairness. And it decided the employee’s remuneration level according to its business

earnings the posts and fulfillment of the business performance of the employee.

3. Employee Training Plans

The Company adhered to the people-oriented and paid special attention to cultivate the talents.Surrounded by the business development and the construction of talent team the Company actively

organized and carried out various training activities and continuously perfected its talents

cultivation system as well as further enhanced the employee’s professional skills and overall quality

57Konka Group Co. Ltd. Annual Report 2022

so as to strengthen the construction of management talents professional talents and technical talents

teams.In 2022 the Company was driven to boost strategy and support businesses and centered its superior

resources on the cultivation of crucial core talents. Focusing on the personnel training system of

"Three Tiers and Seven Brands" Konka open classes have been organized throughout the year for

all employees of the Company; and organized and carried out the new employee’s training &

cultivation projects respectively for the graduates from campus recruiting and personnel from social

recruitment. Meanwhile it centralized to organize the pointed the training projects of general

management skills and post professional knowledge etc for the personnel from marketing R&D

manufacturing financial and human resources systems.

4. Labor Outsourcing

□Applicable √ Not applicable

X Profit Distributions (in the Form of Cash and/or Stock)

How the profit distribution policy especially the cash dividend policy was formulated executed or

revised in the Reporting Period:

√ Applicable □ Not applicable

The cash dividend policy of the Company was clearly stated in its Articles of Association with

specific and clear dividend standards and ratios. The relevant decision-making procedure and

mechanism were sound; the independent directors faithfully performed their duties and played their

due role; and the non-controlling interests were able to fully express their opinion and desire and

their legal rights and interests were fully protected. The Company strictly followed the cash

dividend policy in its Articles of Association and the cash dividend payout of the Company was in

line with its Articles of Association and the relevant resolution of the Shareholders’Meeting.According to the requirements of the Listed Company Supervision Guideline No. 3-Listed

Companies’ Cash Dividend issued by the CSRC the Company has revised the dividend payout

policy in its Articles of Association further clarifying the priority and proportion of cash dividend

in dividend payouts. In order to further normalize its shareholder return mechanism push forward

the establishment of a scientific sustained and stable shareholder return mechanism enhance the

transparency and operability of decision-making for its dividend payout policy and effectively

protect the legal rights and interests of public investors.Special statement about the cash dividend policy

In compliance with the Company’s Articles of Association and resolution of general meeting Yes

Specific and clear dividend standard and ratio Yes

Complete decision-making procedure and mechanism Yes

Independent directors faithfully performed their duties and played their due role Yes

Non-controlling interests are able to fully express their opinion and desire and their legal

Yes

rights and interests are fully protected

In case of adjusting or changing the cash dividend policy the conditions and procedures Yes

58Konka Group Co. Ltd. Annual Report 2022

involved are in compliance with applicable regulations and transparent

Indicate by tick mark whether the Company fails to put forward a cash dividend proposal for

shareholders despite the facts that the Company has made profits in the Reporting Period and the

profits of the Company as the parent distributable to shareholders are positive.□ Applicable √ Not applicable

Final Dividend Plan for the Reporting Period

□ Applicable √ Not applicable

No such cases in the Reporting Period.XI Equity Incentive Plans Employee Stock Ownership Plans or Other Incentive Measures for

Employees

□Applicable √ Not applicable

No such cases in the Reporting Period.XII Establishment and Execution of the Internal Control System for the Reporting Period

1. Establishment and Execution of the Internal Control System

The Company has established and improved the Company's internal control system in accordance

with the regulations of the China Securities Regulatory Commission and the Shenzhen Stock

Exchange following the basic principles of internal control and on the basis of the Company's

actual situation. The Company's Financial Audit Committee and Audit and Legal Affairs Center

follow the guidance of value management seek the goal of strengthening risk management and

control continuously enhance audit supervision and internal control evaluation thereby scrutinizing

and evaluating the Company's internal control management. The Company's 2022 Annual Internal

Control Self-Assessment Report comprehensively factually and accurately reflects the actual

situation of the Company's internal control. During the Reporting Period the Company had no

major or significant deficiencies in its internal control.

2. Material Internal Control Weaknesses Identified for the Reporting Period

□ Yes √ No

XIII Management and Control over Subsidiaries by the Company for the Reporting Period

Integration Countermeasur Settlement Follow-up

Subsidiary Integration plan Problem

progress es taken progress settlement plan

N/A N/A N/A N/A N/A N/A N/A

XIV Internal Control Self-Evaluation Report or Independent Auditor’s Report on Internal

Control

1. Internal Control Self-Evaluation Report

Disclosure date of the internal control self-evaluation report 28 March 2023

Index to the disclosed internal control self-evaluation report http://www.cninfo.com.cn/new/index

Evaluated entities’ combined assets as % of consolidated total assets 90.00%

Evaluated entities’ combined operating revenue as % of consolidated

90.00%

operating revenue

Identification standards for internal control weaknesses

59Konka Group Co. Ltd. Annual Report 2022

Weaknesses in internal control not related to financial

Type Weaknesses in internal control over financial reporting

reporting

Those with the following characteristics should be

recognized as great defect: (1) found out there were

malpractices of the Directors Supervisors and Senior

Executives of the Company that formed significant

influences on the financial report; (2) the Company

revised the published financial report and revised the

great misstatements caused by the malpractices or the

mistakes; (3) CPA found out there was great

misstatement of the current financial report while

didn’t found during the operating process of the The following signs indicated there may exist great

internal control; (4) the supervision of the internal defect among the internal control of the non-financial

control by the Finance Audit Committee and the report; (1) Negative media news appeared more

internal audit institution of the Company was invalid; frequently causing greater damage to the Company's

(5) not yet revised the great defect after the reasonable reputation; (2) turnover of personnel in key positions

period as which was discovered among the internal was relatively serious; (3) there were obvious

control assessment; (6) the significant business lacked deficiencies in important business control systems; and

of systematic control or the systematic control was (4) important deficiencies identified in internal control

invalid.. Those with the following characteristics evaluations were not rectified in a timely manner.Nature

should be recognized as significant defect: (1) not yet The following signs indicated there may exist

standard

chosen or applied the accounting polices according to significant defect among the internal control of the non-

the generally accepted accounting standards; (2) not financial report: (1) negative news occurred rather

yet constructed the anti-spam process or control frequently which caused rather big harm to the

measures; (3) as for the accounts disposal of the Company’s reputation; (2) the outflow of the key

unconventional or special transactions there was no position personnel was rather serious; (3) there was

corresponding control mechanism or execution or the obvious defect among the control system of the

existence of the corresponding supplement control; (4) significant business; (4) the significant defect found

there was one or multiple defects during the control of among the internal control assessment not yet be revised

the compile of the financial report at the period-end in time.and could not reasonable guarantee the statement of

the compiled financial report reach the real and

accurate target; (5) not yet revised the significant

defect after the reasonable period as which was

discovered among the internal control assessment. 3.Other defects from the internal control hadn’t reached

the recognition standards of the great defect or

significant defect should be recognized as general

defect.Great defect: potential misstatement amount≥1% of the

gross profit margin of the 2022 consolidated financial

report of the Company; significant defect: 0.5% of the

gross profit margin of the 2022 consolidated financial

Quantitativ report of the Company ≤potential misstatement amount Implement in accordance with the quantitative criteria of

e standard ＜ 1% of the gross profit margin of the 2022 internal control defect evaluation in financial statements

consolidated financial report of the Company; general

defect: potential misstatement amount＜ 0.5% of the

gross profit margin of the 2022 consolidated financial

report of the Company.Number of material weaknesses in

0

internal control over financial reporting

Number of material weaknesses in

internal control not related to financial 0

reporting

Number of serious weaknesses in

0

internal control over financial reporting

60Konka Group Co. Ltd. Annual Report 2022

Number of serious weaknesses in

internal control not related to financial 0

reporting

2. Independent Auditor’s Report on Internal Control

√ Applicable □ Not applicable

Opinion paragraph in the independent auditor’s report on internal control

We considered that in all the significant aspects Konka Group maintained efficient internal control of the financial report

according to the C-SOX and the relevant regulations on 31 December 2022.Disclosure of such report Disclosed

Disclosure date 28 March 2023

Index to such report disclosed http://www.cninfo.com.cn/new/index

Type of the auditor’s opinion Unmodified unqualified opinion

Material weaknesses in internal control not related to financial

None

reporting

Indicate by tick mark whether any modified opinion is expressed in the independent auditor’s

report on the Company’s internal control.□ Yes √ No

Indicate by tick mark whether the independent auditor’s report on the Company’s internal control

is consistent with the internal control self-evaluation report issued by the Company’s Board.√ Yes □ No

XV Rectifications of Problems Identified by Self-inspection in the Special Action for Listed

Company Governance

The Company has completed the self-inspection in accordance with the relevant requirements of the

CSRC and rectified the problems identified in the self-inspection.

61Konka Group Co. Ltd. Annual 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

Policies and industry standards pertaining to environmental protection

The Company abides by environmental protection laws and regulations such as the Environmental

Protection Law of the People’s Republic of China Water Pollution Prevention and Control Law of

the People’s Republic of China Air Pollution Prevention and Control Law of the People’s Republic

of China Noise Pollution Prevention and Control Law of the People’s Republic of China Solid

Waste Pollution Prevention and Control Law of the People’s Republic of China and others. The

water pollutant discharge standards include the Emission Standard of Water Pollutants for

Electroplating DB44/1597-2015 and the Water Pollutant Discharge Limit Standard of Guangdong

Province DB44/26-2001. The air pollutant emission standards include the Emission Standard of

Volatile Organic Compounds for Printing Industry DB44/27-2001 Emission Standard of

Electroplating Pollutants GB21900-2008 Emission Standard of Odorous Pollutants GB14554-93

and Emission Control Standard of Volatile Organic Compounds for Unorganized Emissions

GB37822-2019.Status of Environmental Protection Administrative License

1. XingDa HongYe

XingDa HongYe received approval from the Zhongshan Environmental Protection Bureau to

establish and construct its facility in 2004 (ZH.H.J. [2004] No. 61) followed by subsequent

approvals under ZH.H.J.D. [2008] 06250 and ZH.H.J.D. [2010] 04469 in 2008 and 2010

respectively. After the original project of XingDa HongYe was put into production it underwent

two acceptance stages: the first stage in 2008 (H.Y [2008] 02) and the second stage in 2012

(ZH.H.Y. Report [2012] 000092).Xingda Hongye enlisted the services of the Zhongshan Environmental Protection Science Research

Institute in December 2012 to perform an environmental impact evaluation for their proposed

technological upgrade and expansion initiative. Following this on 31 December 2012 the

Environmental Protection Bureau of Zhongshan City granted No. ZH.H.J.SH. (2012) 115 Approval

on the Environmental Impact Assessment Report for Technological Upgrade and Expansion

Program of GuangDong XingDa HongYe Electronic Co. Ltd. The scheme allowed for an increased

production of six-layer circuit boards eight-layer and above circuit boards and HDI boards while

reducing the production of single-sided circuit boards. After the completion of the technological

upgrade and expansion the production capacity was expected to reach a total of 200000 square

meters for single-sided circuit boards per year 250000 square meters for double-sided circuit

62Konka Group Co. Ltd. Annual Report 2022

boards per year 300000 square meters for four-layer circuit boards per year 200000 square meters

for six-layer circuit boards per year 150000 square meters for eight-layer and above circuit boards

per year and 100000 square meters for HDI boards per year. The technical renovation and

expansion project maintained the original plating equipment and process unchanged and added a

browning process to the existing production process. The additional plating capacity was all

outsourced. The technical renovation and expansion project began construction in 2013 was

completed in January 2018 and was commissioned from 10 February to 8 July 2018. The

construction of the expansion project met the requirements of the environmental impact report

approval and the conditions for environmental protection acceptance of the completed construction

project. In 2021 the national pollutant discharge permit of XingDa HongYe was renewed/replaced

with certificate number 91442000768405216J001P. In 2022 the national pollutant discharge permit

was changed with certificate number 91442000768405216J001P.

2. Boluo Konka and Boluo Konka Precision

Boluo Konka Precision Technology Co. Ltd. was approved by the Huizhou Environmental

Protection Bureau in 2000 (H.S.H.J. [2000] No.23) and began production the same year. Its

pollution discharge permit number is 91441322721121283N001U.Boluo Konka enlisted the services of Huizhou Environmental Science Research Institute in January

2007 to carry out an environmental impact assessment for its expansion project. No. H.SH.H.J.

[2007] J32 Approval on Environmental Impact Report for Boluo Konka’s Double-sided and

Multilayer Board Project was issued by the Environmental Protection Bureau of Huizhou City on 8

February 2007. The approved expansion project included the installation of electroplating

equipment and processes allowing for an increase in production capacity to 1 million square meters

for single-sided circuit boards per year and 650000 square meters for double-sided and multilayer

circuit boards per year. Upon completion the project underwent an environmental protection

acceptance inspection satisfying the requirements of the environmental impact assessment approval.The company also obtained a pollutant discharge permit in the same year and underwent a name

change to Boluo Konka Precision Technology Co. Ltd.. In 2020 the company received a national

pollutant discharge permit bearing certificate number 91441322799316208F001V.The regulations for industrial emissions and the particular requirements for controlling pollutant

emissions those are associated with production and operational activities.Num

Distrib Exc

ber

Name Type of Way ution essi

Name of of Discharge Discharge Total Approved

of major of of ve

major disch concentration/inte standards disch total

pollut polluta disch dischar disc

pollutants arge nsity implemented arge discharge

er nts arge ge harg

outle

outlets e

ts

Xing Pollutio PH total Disch Main PH 6-9; total GB 21900- 0.448 Total

Non

Da n copper arge 1 dischar copper≤0.3mg/L; 2008 Discharge 5 discharge

e

Hong sources COD of ge COD≤50mg/L; Standard For millio 448500

63Konka Group Co. Ltd. Annual Report 2022

Ye of ammonia statio outlet ammonia Pollutants n tons/year;

waste nitrogen nary of the nitrogen≤8mg/L; From tons/y pollutant

water total pollut waste total Electroplating ear COD

nitrogen ion water nitrogen≤15mg/L 19.061250

total sourc station ; total tons/year;

phosphor es phosphorus≤0.5m ammonia ni

us total g/L; total trogen

cyanide cyanide≤0.2mg/L 3.0498

total ; total tons/year;

nickel nickel≤0.1mg/L; total

total iron total iron≤2mg/L; nitrogen

total total 32.9792

aluminum aluminum≤2mg/L tons/year;

; total

petroleum petroleum≤2mg/L phosphorus

; suspended 0.2082

suspende solids≤30mg/L tons/year

d solids

Emission

Standard for

Electroplating Total

Pollutants discharge:

GB21900-2008 29865600

Air Emission 00 standard

Sulfuric sulfuric acid

Limits Table 5 cube/year

acid fume≤30mg/m3;

Emission (note: the

fume nitrogen

Three standard of total

hydrogen oxide≤200mg/m3

on the Volatile discharge is

chloride ; hydrogen

roof of Organic not stated

formalde chloride≤30mg/m

Disch plant Compounds for in the latest

hyde 3; hydrogen

arge 1 ten Printing 2986 version of

hydrogen cyanide≤0.5mg/m

of on the Industry 5600 national

Xing Waste cyanide 3;

statio roof of DB44/815- 00 discharge

Da gas nitrogen TVOC≤90mg/m3 Non

nary 14 plant 2 2010; stand permit in

Hong polluta oxide ; e

pollut and Guangdong Air ard 2021; two

Ye nts ammonia benzene≤1mg/m3

ion one on Pollutant cube/ exhaust

benzene ;

sourc the Emission year towers

toluene+x toluene+xylene≤1

es roof of Standard were added

ylene 5mg/m3; tin and

the DB44/27-2001 in 2021;

TVOC its

cantee the Second calculated

tin and its compounds≤8.5m

n Level Standard based on

compoun g/m3;

in the Second air volume

ds PM(dust)≤120mg

Period in

PM(dust) /m3

Emission environme

standard for ntal impact

Odor Pollutants assessment

(GB 14554- )

1993) Table 2

Standard

PH Disch 1. Emission 1. Discharge 3183 Total

Main

Boluo copper arge standard for standard of 00 discharge

Pollutio dischar

Konka COD of pollution discharge tons/y amount is

n ge

and ammonia statio discharge permit: ear 318300

sources outlet Non

Boluo nitrogen nary 1 certificate: Discharge Note: tons/year;

of of the e

Konka total pollut copper≤0.5mg/L; Standard of accor COD is

waste waste

Precis nitrogen ion COD≤80mg/L; Electroplating ding 25.464

water water

ion total sourc ammonia Water Pollutant to tons/year;

station

phosphor es nitrogen≤10mg/L for disch ammonia

64Konka Group Co. Ltd. Annual Report 2022

us ; total Electroplating arge nitrogen is

nitrogen≤20mg/L DB44/1597- permi 4.775

; total 2015 Table 1 t tons/year;

phosphorus≤0.5m Pearl River total

g/L; 2. local Delta nitrogen is

emission Discharge 4.8

standard: Standard; tons/year.copper≤0.5mg /L; Water Pollutant Note:

COD≤30mg/L; Discharge according

ammonia Limit Standard to the

nitrogen≤1.5mg/ of Guangdong discharge

L; total Province certificate

nitrogen≤10mg/L DB44/26-2001;

; total 2. Local

phosphorus≤0.3m discharge

g/L standard:

BFBH [2019]

No. 58

Document:

COD ammonia

nitrogen total

phosphorus

based on

"Environmenta

l Quality

Standards for

Surface Water

GB3838-2002

" Category IV

water standard

the total

nitrogen

discharge

reaches 50% of

discharge limit

requirement of

the

corresponding

industry

Sulfuric sulfuric acid Emission

acid fume≤30mg/m3 Standard for

fume Six on ；nitrogen Electroplating

hydrogen the oxide≤200mg/m3 Pollutants

chloride roof of ；hydrogen GB21900-2008

formalde Disch plant chloride≤30mg/m Air Emission The total

Boluo hydehydr arge 1 3；TVOCogen Limits Table 5 discharge is

Konka ogen of fourtee chl；benzenen Guangdong Air not stated

and Waste cyanide statio n on chlori； Pollutant in the latest

Non

Boluo gas poll nitrogen nary 20 the methylbenzenorid Emission / version of

e

Konka utants oxide pollut roof of e≤30； Standard national

Precis ammonia ion plant 2 dimethylbenzene DB44/27-2001 discharge

ion benzene sourc and de≤30mg/；tin the Second permit in

methylbe es one in and its Level Standard 2020

nzene sewag compounds≤8.5m in the Second

TVOC e g/m3；PM Period

tin and its station （dust）≤≤stand Emission

compoun i；oil standard for

ds PM fume≤2mg/m3 Odor Pollutants

65Konka Group Co. Ltd. Annual Report 2022

(dust) oil (GB 14554-

fume 1993) Table 2

Standard

Emission

standard of

cooking fume

(GB18483-

2001)

Treatment of pollutants

1. XingDa HongYe

All production equipment of Guangdong Xingda Hongye Electronics Co. Ltd. has been set up with

supporting environmental protection facilities according to the requirements of environmental

impact assessment. The discharge of wastewater waste gas and noise as well as the disposal of all

solid wastes in the Company all met the standards during the Reporting Period.The sewage treatment centre of Guangdong Xingda Hongye Electronics Co. Ltd. with an

investment of about RMB15 million was formally put into production in June 2007 and the

treatment capacity of the sewage treatment facility was 2566 tons/day. After technical

improvement and expansion the capacity increased to 2900 tons/day with the treatment process

remaining unchanged. In 2022 RMB20 million was invested to increase a set of sewage treatment

facility which had been put into operation so as to ensure stable discharge of sewage up to standard.Currently the sewage treatment facilities are functioning well and the main pollutant discharge

meets the discharge standards and environmental assessment standards. The pollutants are

discharged to Fushachong after being treated at the self-built sewage treatment station.

2. Boluo Konka and Boluo Konka Precision

All production equipment of Boluo Konka and Boluo Konka Precision has been reported for

environmental assessment review and approval. The supporting environmental protection and

pollution control facilities have been designed by pollutant type and concentration and effectively

operated in a targeted manner. During the Reporting Period the discharge standards were met in

terms of industrial waste water exhaust and factory noise and all industrial waste generated was

disposed of in compliance with environmental laws and regulations.Boluo Konka was established in 2000. To manufacture single sided PCBs it invested

approximately RMB 5 million in constructing a sewage treatment station without the biochemical

treatment function and featuring a discharge capacity of 300 tons per day. In 2007 Boluo Konka

expanded its factory by starting the Phase II project which was submitted for environmental

assessment as Boluo Konka PCB Double Sided and Multi-Layer PCB Project (later the project

owner was changed into Boluo Konka Precision). It spent about RMB 10 million on constructing

the Phase II sewage treatment station to add the biochemical treatment function with a discharge

capacity of 800 tons per day.In 2019 according to the requirements in the documents issued by Boluo County Ecology and

66Konka Group Co. Ltd. Annual Report 2022

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 1100 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 2200 tons per day (with a discharge

capacity of 1100 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 Dongjiang River.Environmental self-monitoring plan

1. XingDa HongYe

According to the requirements of the Environmental Protection Administration Xingda Hongye

attaches great importance to environmental monitoring management. Thus pursuant to the

Measures for Self-Monitoring and Information Disclosure of National Key Monitored Enterprises

the Report on the Environmental Impact of the Technical Improvement and Expansion Project of

Guangdong Xingda Hongye Electronics Co. Ltd. and the reply opinions for environmental impact

assessment the Company has formulated the Environmental Self-Monitoring Plan and reported to

the municipal environmental protection bureau for approval and record. It implements online

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

67Konka Group Co. Ltd. Annual Report 2022

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

Information Platform and on National Pollution Source Monitoring Information Management and

Sharing Platform for public monitoring.Contingency plan for emergent environmental incident

1. XingDa HongYe

In strict accordance with requirements of laws regulations and relevant documents such as Law of

the People’s Republic of China on Emergency Response and Interim Measures on Environmental

Emergency Response Plan Guangdong Xingda Hongye Electronics Co. Ltd. has established risk

prevention measures and emergency response plans kept its emergency equipment in a normal state

formulated the Contingency Plan for Emergent Environmental Incident and put on records at

Zhongshan Environmental Protection Bureau Guangdong Province record No.: 4420002017044M.In addition the Company conducts a drill of major environmental pollution incident on its factory

to enhance its emergency response capabilities for emergent environmental pollution incidents.Furthermore Guangdong Xingda Hongye Electronics Co. Ltd. has built an emergency pool (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

68Konka Group Co. Ltd. Annual Report 2022

of relevant documents. They have established risk prevention measures and emergency plans such

as Emergency Plan for Unexpected Environmental Incidents and have their emergency equipment

run in a normal status. In addition they have filed with Boluo County Branch of Ecology and

Environment Bureau in Huizhou Guangdong and Huizhou Ecology and Environment Bureau

respectively with the file No. 441322-2020-0073-M and 441301-2021-004-M. They organize all

staff to conduct drills for major environmental pollution incidents every year to improve their

ability for the emergency response to unexpected environmental pollution incidents.Boluo Konka and Boluo Konka Precision are well equipped with all necessary facilities for

emergency response to unexpected incidents including an emergency response pool of industrial

waste water (500m3 under the ground of the sewage treatment station) and a firefighting reservoir

(300m3 located beside the staff dormitory building). In the event of an unexpected environmental

incident such as leakage or failure of a waste water transporting pipe the emergency response pool

will prevent any accident of industrial waste water; in the event of a fire safety accident the

firefighting reservoir will be put into use. All departments are required to discharge pollutants

strictly in accordance with pollutant discharge standards to reduce the costs of waste water

treatment by properly and reasonably dividing solution and waste water discharged from the plants.The chemical warehouses are managed by designated personnel with standard control and

requirements over the loading and unloading of chemical products by suppliers. In terms of

emergency response supplies a full set of emergency rescue tools are prepared including gas masks

acid and alkaline resistant boots gloves goggles safety ropes helmets fire sand and submersible

pumps.Input in environmental governance and protection and payment of environmental protection tax

Nearly RMB37 million was input in environmental governance and protection and RMB32700 of

environmental protection tax was paid in 2022 in total.Measures taken to decrease carbon emission in the Reporting Period and corresponding effects

□ Applicable √ Not applicable

No administrative punishments were received in the Reporting Period due to environmental issues.Impact of production Rectification

Subsidiary Reason for punishment Violations Penalty results

and operation measures

N/A N/A N/A N/A N/A N/A

Other environmental information that should be disclosed

1. XingDa HongYe

The environmental protection investment of Guangdong Xingda Hongye Electronics Co. Ltd. for

2022 was approximately RMB22 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

69Konka Group Co. Ltd. Annual Report 2022

Boluo Konka and Boluo Konka Precision invested approximately RMB15 million on environmental

protection in 2022 in total mainly used for the upgrading and transformation of the sewage

treatment system investments in reclaimed water reuse system update and daily operation &

management of waste gas treatment system and maintenance and renewal of equipment.Other Environmental Information.According to the examination by the Company the Company and its other holding subsidiaries are

not key pollutant units. All have faithfully implemented the laws and regulations related to

environmental protection such as Environmental Protection Law of the People's Republic of China

Water Pollution Prevention and Control Law of the People's Republic of China Law of the People's

Republic of China on the Prevention and Control of Atmospheric Pollution Law of the People's

Republic of China on Prevention and Control of Pollution From Environmental Noise Law of the

People's Republic of China on the Prevention and Control of Environmental Pollution by Solid

Waste in the daily production and operation without being punished for violations of laws and

regulations during 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.

70Konka Group Co. Ltd. Annual Report 2022

2. The Company performs responsibilities to suppliers and customers

(1) It is devoted to improve customer service quality.

The Company is insisting philosophy of customer orientation to strengthen customer service

management service consciousness for employees service levels and to protect rights for

customers. Through customer service hot-line field visit and follow-up service the Company has

set a good corporate image for customers.

(2) Be honest to suppliers

Following the principle of integrity and mutually beneficial cooperation the Company keeps good

cooperative relations with suppliers at each level. The corporate principle is open fair and impartial

to standardize procurement protect suppliers’ legal rights and lay solid foundation for further

cooperation.

3. Be enthusiastic to social and public welfare undertakings

Based on the principle of appreciating and repaying the society the Company has participated in all

kinds of activities for public welfare cooperated with society undertaken social responsibilities

actively and promoted harmonious development between enterprise and society.

4. Be responsible for employees

The Company insists the principle of people orientation to improve working environment promote

occupational skills provide opportunity and platform for development and growth and encourage

self upgradation and realization for employees. Mutual improvement for employees and enterprise

could be achieved.

(1) Be honest and law-abiding to protect legal rights for employees

The Company would strictly comply with laws and regulations in Labor Law and Labor Contract

Law to sign labor contract with employees with fair treatment in employment payment promotion

training demission and retirement. Also the Company would pay all kinds of insurances and

housing fund for employees. Regular physical examination would be organized for each year. Any

problems found would require re-examination and consultation from a doctor.The Company would improve living quality; enhance cohesive force and sense of belongings

through a series of safeguard measures.

(2) To protect occupational health for employees

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

71Konka Group Co. Ltd. Annual Report 2022

hand the Company would be meticulous in training of regular business and occupational skills and

carry out all requirements positively to improve professional levels by normal training management.On the other hand the Company would establish methods of self-training platform training

instructor theme training and lectures to provide colorful training activities. Besides the work

professional and comprehensive quality would be fully promoted.

5. Be responsible for environment

The Company concerns about environmental changes and close relationships with environment by

creating low carbon economy in technical innovation from green manufacturing green products to

green industry circular economy. The Company would provide efforts in protecting global

ecological environment. In June 2012 subsidized products catalogue had been released jointly by

National Development and Reform Commission Ministry of Industry and Information and Ministry

of Finance.Subsequently the Company would undertake all social responsibilities by improving strategic

management sustainable development and enterprise economic efficiency. It would reattribute all

shareholders and would protect legal rights for creditors and employees. To be honest to suppliers

and customers the Company would serve local economic development and participate in social

public welfare activities and environment protection. It would undertake all responsibilities in many

fields and make attributions to social economic and environmental sustainable development for a

socialism harmonious society.III Consolidation and Expansion of Poverty Alleviation Outcomes and Rural Revitalization

In 2022 the Company continued to actively purchase the agricultural and side-line products from

Tianzhu and Sansui counties in Guizhou Province under the "assistance by consumption" project

and cumulatively purchased local agricultural products worth RMB0.25 million this year. In the

early days of 2022 Konka Group made a valiant decision to choose 100 “dream partners” from

within to provide personalized educational aid to impoverished pupils in the counties of Tianzhu

and Sansui in Guizhou. In an effort to fully embrace the national policy of targeted education

assistance the organization diligently executed precise measures and initiatives. A comprehensive

policy and support system geared towards the eradication of educational poverty were established

encompassing all students with economic disadvantages from those enrolled in compulsory

education to those attending vocational schools and higher education institutions. Remarkably the

company’s rate of assistance to pupils registered under the national poverty alleviation program

reached an astounding 100%.

72Konka Group Co. Ltd. Annual Report 2022

Part VI Significant Events

I Fulfillment of Commitments

1. Commitments of the Company’s De Facto Controller Shareholders Related Parties and

Acquirers as well as the Company Itself and Other Entities Fulfilled in the Reporting

Period or Ongoing at the Period-End

□Applicable √ Not applicable

No such cases in the Reporting Period.

2. Where there Had Been an Earnings Forecast for an Asset or Project and the Reporting

Period Was still within the Forecast Period Explain why the Forecast Has Been Reached

for the Reporting Period.□Applicable √ Not applicable

II Occupation of the Company’s Capital by the Controlling Shareholder or any of Its

Related Parties for Non-Operating Purposes

□Applicable √ Not applicable

No such cases in the Reporting Period.III Irregularities in the Provision of Guarantees

□Applicable √ Not applicable

No such cases in the Reporting Period.IV Explanations Given by the Board of Directors Regarding the Latest “Modified Opinion”

on the Financial Statements

□Applicable √ Not applicable

V Explanations Given by the Board of Directors the Supervisory Board and the Independent

Directors (if any) Regarding the Independent Auditor's “Modified Opinion” on the Financial

Statements of the Reporting Period

□Applicable √ Not applicable

VI YoY Changes to Accounting Policies Estimates or Correction of Material Accounting

Errors

□Applicable √ Not applicable

VII YoY Changes to the Scope of the Consolidated Financial Statements

√ Applicable □ Not applicable

Please refer to 6. Changes in the Scope of Consolidated Financial Statements for the Reporting

Period of 2. Revenue and Costs of IV Core Business Analysis in Part III Operating Performance

Discussion and Analysis of this Report for details.

73Konka Group Co. Ltd. Annual Report 2022

VIII Engagement and Disengagement of Independent Auditor

Current independent auditor

Name of the domestic independent auditor ShineWing Certified Public Accountants LLP

The Company’s payment to the domestic independent auditor

220

(RMB’0000)

How many consecutive years the domestic independent auditor

4 years

has provided audit service for the Company

Names of the certified public accountants from the domestic

Tang Qimei Liu Lihong

independent auditor writing signatures on the auditor’s report

How many consecutive years the certified public accountants

2 years 1years

have provided audit service for the Company

Name of the overseas independent auditor (if any) N/A

The Company’s payment to the overseas independent auditor

0

(RMB’0000) (if any)

How many consecutive years the overseas independent auditor

N/A

has provided audit service for the Company (if any)

Names of the certified public accountants from the overseas

independent auditor writing signatures on the auditor’s report N/A

(if any)

How many consecutive years the certified public accountants

N/A

have provided audit service for the Company (if any)

Indicate by tick mark whether the independent auditor was changed for the Reporting

Period

□ Yes √ No

Independent auditor financial advisor or sponsor engaged for the audit of internal controls:

√ Applicable □ Not applicable

The Company appointed ShineWing Certified Public Accountants LLP as the internal control

auditor in 2022 with RMB0.7 million of payment for the internal control audit.IX Possibility of Delisting after Disclosure of this Report

□ Applicable √ Not applicable

X Insolvency and Reorganization

□ Applicable √ Not applicable

No such cases in the Reporting Period.XI Major Legal Matters

Invol

ved

amo Discl Index to

General information unt Provision Progress

Decisions and Execution of

effects decisions osure

disclosed

(RM date informati

B’0 on

000)

Because of a dispute over a The case The case has

purchase and sales contract has entered the 19 http://ww

the Company's subsidiary 313 No entered execution phase. The case is in Septe w.cninfo.Konka Huanjia Environmental 7.20 the Based on the execution. mber com.cn/n

Technology Co. Ltd. sued executio principle of 2020 ew/index

Dalian Guangxin n phase. prudence the

74Konka Group Co. Ltd. Annual Report 2022

Environmental Protection Company has

Equipment Technology accrued

Development Co. Ltd. corresponding

requiring the latter to return impairment reserves

equipment payment already in accordance with

made and pay liquidated accounting policies.damages.As the bills held by the The Company won

Company failed to be paid and the case is in

upon maturity the Company The case execution. Based on

filed a lawsuit with the court has the principle of 19 http://ww

requesting the latter to order 200 entered prudence the The case is in Septe w.cninfo.Wuhan Jialian Agricultural 00 No the Company has

Technology Development Co. executio accrued

execution. mber com.cn/n

2020 ew/index

Ltd. to pay the aforesaid bills n phase. corresponding

and corresponding interest to impairment reserves

the Company. in accordance withaccounting policies.The second instance

Because of a dispute over a has been concluded.purchase and sales contract The Based on theWumart Stores Inc. sued the

Beijing Branch of the second

principle of

prudence the http://ww

Company to the People's 178 No instance Company has The judgment has

25

June w.cninfo.Court of Shijingshan District 3.07 has been accrued been fulfilled. 2019 com.cn/n

in Beijing requiring the concluded. corresponding

ew/index

Beijing Branch to return the impairment reserves

prepayment for goods. in accordance with

accounting policies.Because of a dispute over The judgment has

loan the Company's been fulfilled.subsidiary Anhui Konka Based on the

Electronic Co. Ltd. applied The principle of 19 http://ww

for arbitration with Chuzhou 214 judgment prudence theNo Company has The judgment has Septe w.cninfo.Arbitration Commission 1.50 has been been fulfilled. mber com.cn/n

requiring the respondent fulfilled. accrued

Makena Electronic (Shenzhen) corresponding

2020 ew/index

Co. Ltd. to assume the impairment reserves

guarantee responsibility. in accordance withaccounting policies.Because of a dispute over a The case has

contract the Company filed a entered the

lawsuit with Zhengzou execution phase.Intermediate People's Court The case Based on the

requiring Henan Radio and has principle of 19 http://ww

Television Network Co. Ltd. 390 No entered prudence the The case is in Septe w.cninfo.to take delivery of goods 4.90 the Company has execution. mber com.cn/n

make payment for goods and executio accrued 2020 ew/index

pay interest and liquidated n phase. corresponding

damages according to the impairment reserves

contract. in accordance withaccounting policies.Because of a dispute over a

logistics contract Hefei

Anluda Logistics Co. Ltd.sued the Company's

subsidiary Anhui Konka

Tongchuang Electrical The 19 http://ww

Appliances Co. Ltd. with the 128 No retrial The retrial has been The judgment has Septe w.cninfo.people's court of Nanqiao 2.8 has been decided. been fulfilled. mber com.cn/n

District Huzhou requiring it decided. 2020 ew/index

to return the performance

bond pay the transportation

fee that's already incurred and

interest as well as undertake

the legal cost.As a result of contractual 154 No The case The Company won The case is in 30 http://ww

75Konka Group Co. Ltd. Annual Report 2022

disputes Shenzhen Konka 53.4 has and the case is in execution. Nove w.cninfo.Unifortune Technology Co. 4 entered execution. Based on mber com.cn/n

Ltd. a subsidiary of the the the principle of 2021 ew/index

Company has initiated legal executio prudence the

proceedings against Shenzhen n phase. Company has

Yaode Technology Co. Ltd. accrued

Dongsheng Xinluo corresponding

Technology (Shenzhen) Co. impairment reserves

Ltd. Shenzhen Hongyao in accordance with

Dingsheng Investment accounting policies.Management Limited

Partnership Shenzhen

Xiangrui Yingtong Investment

Management Limited

Partnership Luo Jingxia Luo

Zongwu Luo Zongyin Luo

Zaotong and Luo Saiyin

seeking restitution for goods

received and claiming

damages for breach of

contract.On account of the

infringement of the

Company’s trademark rights

and the practice of unfair

competition a lawsuit has

been instituted by the

Company against Xinshang The case

Electronics Co. Ltd. located has The Company won 30 http://ww

in Fu’an City as well as 300 No entered and the case is in The case is in Nove w.cninfo.Fujian Zhaoguan Industry and 0 the execution. execution. mber com.cn/n

Trade Co. Ltd. Jinhua executio 2021 ew/index

Kangjia Medical Equipment n phase.Factory and Wang Jun

seeking an injunctive order to

halt the infringement and

claiming compensation for any

incurred losses.As a result of a dispute arising

from a share buyback the

Company has initiated legal

proceedings against Luo The

Zaotong Luo Jingxia Luo Compan An application has 30 http://ww

Zongyin Luo Zongwu and 248 y won75.2 No and the The Company won. been made to the Nove w.cninfo.Shenzhen Yaode Technology 2 judgment court for mber com.cn/nCo. Ltd. The lawsuit seeks an has taken enforcement. 2021 ew/indexinjunctive order to compel the

defendants to pay the share effect.buyback amount as well as

any applicable interest.Because of a dispute over a

contract Makena Electronic

(Shenzhen) Co. Ltd. filed a The

lawsuit with the court plaintiff 1 http://ww

requiring the Company and 266 No has

The plaintiff has The plaintiff has

the Company's subsidiary 2.43 withdraw withdrawn the withdrawn the

Dece w.cninfo.mber com.cn/n

Shenzhen Konka Electronics n the lawsuit. lawsuit. 2021 ew/index

Technology Co. Ltd. to make lawsuit.payment for goods and pay

interest for overdue payment.As a result of a dispute arising

from a third-party objection to The case

execution Konka Huanjia 112 is being The case is being 24 http://ww

Environmental Technology 92.7 No heard in heard in the second The case is in trial. Nove w.cninfo.Co. Ltd. a subsidiary of the 3 the trial mber com.cn/n

Company has instituted legal second 2022 ew/index

proceedings against Fuxin trial

76Konka Group Co. Ltd. Annual Report 2022

Bank Co. Ltd. and Huanjia

Group Co. Ltd. seeking an

order from the court to affirm

the plaintiff’s ownership of the

goods and to exclude the

defendant’s execution

As a result of a dispute arising

from a third-party objection to

execution Konka Huanjia

Environmental Technology

Co. Ltd. a subsidiary of the The case

Company has instituted legal is being

proceedings against Fuxin 924 heard in The case is being

24 http://ww

No heard in the second The case is in trial. Nove w.cninfo.Bank Co. Ltd. and Dalian 3.37 the mber com.cn/n

Jinjia Materials Recycling Co. second trial 2022 ew/index

Ltd. seeking an order from the trial

court to affirm the plaintiff’s

ownership of the goods and to

exclude the defendant’s

execution

Due to a dispute arising from a

third-party objection to

execution Konka Huanjia

Environmental Technology

Co. Ltd. a subsidiary of the

Company has instituted legal

proceedings against Fuxin

Bank Co. Ltd. Dalian The case

Jinkaisxuan Renewable is being 24 http://ww

Resource Acquisition Chain 357 No heard in

The case is being

3.17 the heard in the second The case is in trial.

Nove w.cninfo.Co. Ltd. Dalian Yingtai Paper trial mber com.cn/n

Co. Ltd. Dalian Zhanhong second 2022 ew/index

Renewable Resource trial

Recycling Co. Ltd. and Wang

Jinping seeking an order from

the court to affirm the

plaintiff’s ownership of the

goods and to exclude the

defendant’s execution

Note: Courts or arbitration bodies ruled in favor of the Company in the following cases which are currently under enforcement. Details of these cases

can be found in the Company's Announcement on Large Amount Pending Lawsuits and Arbitrations disclosed on 25 June 2019 (Announcement No.

2019-63) the Announcement on Accumulative Lawsuits and Arbitrations disclosed on 19 September 2020 (Announcement No. 2020-97) the

Announcement on Accumulative Lawsuits and Arbitrations disclosed on 1 June 2021 (Announcement No. 2021-48) the Announcement on

Accumulative Lawsuits and Arbitrations disclosed on 1 December 2021 (Announcement No. 2021-101) the Announcement on Accumulative

Lawsuits and Arbitrations disclosed on 24 November 2022 (Announcement No. 2022-89) and the Company's periodic reports: 1. As matured notes

were failed to be accepted the Company has filed a lawsuit with the court to request China Energy Electric Fuel Co. Ltd. China Energy (Shanghai)

Enterprise Co. Ltd.. Shanghai Nengping industrial Co. Ltd. and Shenzhen Qianhai Baoying Factoring Co. Ltd. to pay the bill and the

corresponding interest to the Company; 2. As matured notes were failed to be accepted the Company has filed a lawsuit with the court to request

Shanghai Huaxin International Group Co. Ltd. and Tianjin International Trade Petrochemical Co. Ltd. to pay the bill and the corresponding interest

to the Company; 3. As matured notes were failed to be accepted the Company has filed a lawsuit with the court to request Shanghai Huaxin

International Group Co. Ltd. Qingdao Bonded Zhongshe International Trading Co. Ltd. and Shenzhen Qianhai Benniu Agricultural Technology Co.Ltd. to pay the bill and the corresponding interest to the Company; 4. As a consequence of the non-payment of a bill upon its expiry Kongka

Factoring has instituted legal proceedings before the court. The lawsuit seeks an injunctive order mandating Tahe Group Co. Ltd. Fuzhou Taijia

Industrial Co. Ltd. and Xiamen Lianchuang Microelectronics Co. Ltd. to remit payment for the bill amount along with the corresponding interest

to Kongka Factoring.; 5. As matured notes were failed to be accepted the Company has filed a lawsuit with the court to request Hefei Huajun Trading

Co. Ltd. and Wuhan Jialian Agricultural Technology Development Co. Ltd. to pay the bill and the corresponding interest to the Company; 6. Due to

dispute arisen from a logistics contract the Company’s subsidiary Anhui Konka filed a lawsuit to request the freight forwarder Shanghai Triangle

77Konka Group Co. Ltd. Annual Report 2022

Link Logistics Co. Ltd. Shenzhen Branch to make compensation; 7. Due to contract dispute the Company’s subsidiary Shenzhen Nianhua applied

for arbitration to request the respondent Fang Xianglong and Jiang Yan to make compensation for corresponding annual profit and fund possession

cost; 8. Due to payment dispute the Company’s subsidiary Hong Kong Konka applied for an arbitration to Shenzhen Court of International

Arbitration to request the respondent Makena Electronic (Hong Kong) to pay for goods and liquidated damages; 9. Because of a dispute over capital

increase the Company's subsidiary Shenzhen Konka Investment Holding Co. Ltd. applied for arbitration with the Shenzhen Court of International

Arbitration (SCIA) requesting the respondents Elion Resources Group and Elion Ecological Co. Ltd. to perform the repurchase obligation; 10. As a

result of a dispute stemming from an international sale of goods contract Anhui Konka Electronic Co. Ltd. a subsidiary of the Company has

initiated legal proceedings against Maoxinyuan Electronics (Hong Kong) Co. Ltd. The lawsuit seeks an injunctive order compelling the respondent to

pay the applicant the overdue payment interest losses; 11. As a result of a dispute arising from an international sale of goods contract Anhui Kangzhi

Trade Co. Ltd. a subsidiary of the Company has initiated legal proceedings against B&L TECHNOLOGY CO. LIMITED. The lawsuit seeks an

injunctive order compelling the respondent to pay the purchase price as well as any penalties for breach of contract. 12. Because of a dispute over 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 Shopping Centre 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.The following cases have been disclosed in current announcements and periodic reports and are currently in trial. Details of these cases can be

found in the Company's Announcement on Large Amount Pending Lawsuits and Arbitrations disclosed on 25 June 2019 (Announcement No.

2020-97) and the Announcement on Accumulated Lawsuits and Arbitrations disclosed on 1 June 2021 (Announcement No. 2021-48) and the

Announcement on Accumulative Lawsuits and Arbitrations disclosed on 1 December 2021 (Announcement No. 2021-101) the Announcement on

Accumulative Lawsuits and Arbitrations disclosed on 24 November 2022 (Announcement No. 2022-89) 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 WallJiangxi Branch”) the Great Wall Jiangxi Branch sued to the court and required Jiangxi Xinxin Jiangxi Shanshi Jiangxi Zhongyi to repay

RMB300 million with RMB108000 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 an agency agreement the

Company's subsidiary Henan Frestec Refrigeration Appliance Co. Ltd. sued Shantou Meisen Technology Co. Ltd. Shenzhen Meisenyuan

Plastic Electronics Co. Ltd. Lin Yuanqin Huang Ruirong Jiangsu Huadong Hardware Zone Co. Ltd. and Chuangfu Commerce & Trade Plaza

Real Estate Development (Huizhou) Co. Ltd. requesting to terminate the contract and requesting them to return the payment of goods and

liquidated damages and priority shall be given to the payment for the secured assets and the case was heard in the second trial; 4. 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 given to the payment for

the secured assets and the case was heard in the second trial; 5. 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; 6. 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

78Konka Group Co. Ltd. Annual Report 2022

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; 7. 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 and the case was heard in the second trial. 8. 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 and the case was

heard in the second trial. 9. Because of a dispute over a purchase and sales contract the Company's subsidiary Konka Huanjia Environmental

Technology Co. Ltd. sued Dalian Tianxing 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 and the case was heard in the second trial. 10. 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 and the case was heard in the second trial. 11. 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 and the case was heard in the second trial. 12. 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 and the case was heard in the second

trial. 13. 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 and the case was heard in the second trial. 14. 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 and the case was heard in the second trial. 15. Because of a dispute over a purchase and sales contract the Company's subsidiary Konka

Huanjia Environmental Technology Co. Ltd. sued Zhejiang 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 and the case was heard in the second trial.

16. Because of a dispute over a purchase and sales contract the Company's subsidiary Konka Huanjia Environmental Technology Co. Ltd. sued

Zhejiang 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 and the case was heard in the second trial. 17. Because of a dispute over a

purchase and sales contract the Company's subsidiary Konka Huanjia Environmental Technology Co. Ltd. sued Zhejiang 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 and the case was heard in the second trial. 18. 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 and the case was heard in the second trial. 19. Because of a dispute over a purchase and sales contract the Company's subsidiary Konka

Huanjia Environmental Technology Co. Ltd. sued Henan Xincheng 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 and the case was heard in

the second trial. 20. 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 and the case was heard in the second trial. 21. 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 and the case was heard in the second trial; 22. In view of a dispute arising from a commission

79Konka Group Co. Ltd. Annual Report 2022

contract Shenzhen Konka Pengrun Technology & Industry Co. Ltd. a subsidiary of the Company has instituted legal proceedings against

Guang’an Ouchishi Electronic Technology Co. Ltd. Guan Hongshao Huaying Gaoke De Electronic Technology Co. Ltd. Huaying Gaoke Long

Electronic Technology Co. Ltd. Guizhou Jiaguida Technology Co. Ltd. Sichuan Hongrongyuan Property Co. Ltd. Du Xinyu Lin Bolong and

Wang Shisheng seeking an order for the defendants to pay the purchase price and claiming damages for breach of contract; 23. In view of a

dispute arising from a loan contract the Company has initiated legal proceedings against Yantai Kangyue Investment Co. Ltd. seeking an order

for the defendant to repay the loan and interest; 24. Due to a dispute arising from a guarantee contract Hong Kong Konka Limited a subsidiary of

the Company has initiated legal proceedings against Xu Xiang Zheng Baoyao Ke Hanhua and Shenzhen Jinzhong Industry Co. Ltd. seeking an

order for the defendants to assume guarantee liability; 25 As a result of a dispute arising from an international sale of goods contract Jiaxin

Technology Co. Ltd. a subsidiary of the Company has initiated legal proceedings against Dingxin Electronic Technology (Hong Kong) Co. Ltd.Chen Wenhuan and Chen Baohong seeking an order for the defendants to pay for the goods and claiming damages for breach of contract; 26. As a

result of a dispute arising from a guarantee contract Anhui Konka Electronic Co. Ltd. a subsidiary of the Company has initiated legal

proceedings against Maoxinyuan Electronics (Shenzhen) Co. Ltd. seeking an order for the defendant to assume joint guarantee liability to the

plaintiff and the case was heard in the second trial; 27. Due to a dispute arising from an installment purchase contract Wu Rong has instituted

legal proceedings against the Company and its subsidiary Shenzhen Konka Electronics Technology Co. Ltd. seeking an order for the payment of

the purchase price and overdue payment interest to the plaintiff; 28. As a result of a dispute arising from a contract Shenzhen Oriental

Entrepreneurship Investment Co. Ltd. has initiated legal proceedings against the Company seeking an order for the payment of the repurchase

amount and claiming damages for breach of contract.XII Punishments and Rectifications

□Applicable √ Not applicable

No such cases in the Reporting Period.XIII Credit Quality of the Company as well as its Controlling Shareholder and De Facto

Controller

□Applicable √ Not applicable

XIV Major Related-Party Transactions

1. Continuing Related-Party Transactions

√ Applicable □ Not applicable

As % Appro Obtai

Relati of ved Over nable Index

Relate onshi Type Specif Pricin

Total total transa the Metho marke to

d p with of ic g

Trans value value t price Disclo disclo

the transa transa princi action (RMB of all

ction appro d of

party price ’0000 same- line ved settle

for sure sed

Comp ction ction ple (RMB line or ment same- date infor

any ) type type matiotransa ’0000 not transa n

ctions ) ctions

OCT Prope

Enter Purch rty

prises Under ase of mana

Co. the

Ltd same

comm geme Negot 30

actual oditie nt iated

Marke 7120. 1000

t price 55 0.72% 0 Not Cash N/A March http://and s and utilitie price 2022 www.its contro

subsid ller

servic s cninfo

es office .com.iaries leases cn/ne

OCT Under w/ind

Enter the Sales

Sales

of ex

same of Negotprises TVs iated Marke 1786 2000

30

actual 1.75% Not Cash N/A MarchCo. goods intelli t price 7.70 0

Ltd contro

price 2022

and ller and

gent

termin

80Konka Group Co. Ltd. Annual Report 2022

its servic als

subsid etc.iaries es and

chargi

ng

install

ation

fees

of

smart

TV

termin

als

and

other

fees.Total -- -- 2498 -- 30008.25 0 -- -- -- -- --

Large-amount sales return in detail N/A

Give the actual situation in the The Company has published the Forecasting Public Notice on Routine Related-party

Reporting Period (if any) where an Transaction for Y2022 on Securities Times Shanghai Securities News and China Securities

estimate had been made for the Journal as well as the Internet website designated by CSRC

total value of continuing related- http://http://www.cninfo.com.cn/new/index on 30 March 2022. In the Reporting Period the

party transactions by type to occur basis for pricing transaction price transaction amount and settlement methods of raw

in the Reporting Period materials purchased by the Company were basically in accordance with the forecast. Thetotal amount was RMB249882500.Reason for any significant

difference between the transaction

price and the market reference N/A

price (if applicable)

2. Related-Party Transactions Regarding Purchase or Sales of Assets or Equity Interests

□Applicable √ Not applicable

No such cases in the Reporting Period.

3. Related Transactions Regarding Joint Investments in Third Parties

√ Applicable □ Not applicable

Refer to 7. Other Major Related-Party Transactions of this section for details.

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 Recovere Interest in

there is

Beginnin in the d in the the Ending

Related occupatio

Related Forming g balance Reporting Reporting Interest Reporting balance

relationsh n on non-

party reason (RMB’00 Period Period rate Period (RMB’00

ip operating

00) (RMB’00 (RMB’00 (RMB’00 00)

capital or

00)00)00)

not

Chuzhou Subsidiar Demand

Kangjin y of of

Not 15773.64 0 15773.64 7.00% 695.90 0

Health controllin business

Industry g developm

81Konka Group Co. Ltd. Annual Report 2022

Develop sharehold ent

ment Co. er

Ltd.Effects of credits with

related parties on the No effect to the normal operation of the Company. Other shareholders of the Company and Chuzhou

Company’s operating Kangjin Health Industry Development Co. Ltd. offer financial assistance under the same conditions in

results and financial accordance to their shareholding ratio.conditions

Liabilities payable with related parties:

Increased Recovered Interest in

Beginning in the in the the Ending

Related Related Forming balance Reporting Reporting Reporting balance

Interest rate

party relationship reason (RMB’000 Period Period Period (RMB’000

0) (RMB’000 (RMB’000 (RMB’000 0)

0)0)0)

1091.0001091.003.85%21.020

The 100000.00 0 100000.00 3.85% 2297.25 0

OCT Company 20000.00 0 20000.00 3.85% 598.54 0

Controlling

Enterprises applies 0 150000.00 18909.00 3.85% 5585.46 131091.00

shareholder

Co. Ltd. entrusted 0 50000.00 0 3.85% 1213.82 50000.00

loan to it 0 70000.00 0 3.85% 1646.94 70000.00

0100000.00100000.003.85%10.690

Effects of liabilities with related parties

The Company applies entrusted loan from OCT Enterprises Co. Ltd. which meets the

on the Company’s operating results and

needs of the company's existing business development and reduces the financing cost.financial conditions

5. Transactions with Related Finance Companies

□Applicable √ Not applicable

The Company did not make deposits in receive loans or credit from and was not involved in any

other finance business with any related finance company or any other related parties.

6. Transactions with Related Parties by Finance Companies Controlled by the Company

□ Applicable √ Not applicable

The finance company controlled by the Company did not make deposits receive loans or credit

from and was not involved in any other finance business with any related parties.

7. Other Major Related-Party Transactions

√Applicable □ Not applicable

(1) The Company’s Counter-Guarantees to Affiliated Companies: On 21 February 2022 the 54th

meeting of the 9th Board of Directors and the first extraordinary general meeting of shareholders in

2022 held on 22 March 2022 approved the proposal Shenzhen Konka Telecommunications

Technology Co. Ltd. Providing Counter-Guarantees to Shenzhen Overseas Chinese Town Co. Ltd.Due to the need for business development Shenzhen Overseas Chinese Town Co. Ltd. provided a

full joint and several liability guarantee for the 800 million yuan financing of Yibin Overseas

Chinese Town Sanjiang Real Estate Co. Ltd. a joint venture of Shenzhen Konka Communication

Technology Co. Ltd. Therefore Shenzhen Konka Communication Technology Co. Ltd. provides a

counter guarantee of no more than 160 million yuan to Shenzhen Overseas Chinese Town Co. Ltd.

82Konka Group Co. Ltd. Annual Report 2022

based on its shareholding ratio in Yibin Overseas Chinese Town Sanjiang Real Estate Co. Ltd. The

counter guarantee method is joint liability guarantee and the validity period of the guarantee

amount is three years. During the reporting period Shenzhen Konka Communication Technology

Co. Ltd. provided a counter guarantee of 100 million yuan to Shenzhen Overseas Chinese Town

Co. Ltd. based on its shareholding ratio.

(2) Application for Comprehensive Credit Limit from China Everbright Bank Co. Ltd.: The 56th

meeting of the 9th Board of Directors on 28 March 2022approved the proposal Application for

Comprehensive Credit Limit from China Everbright Bank Co. Ltd. The Company applied for a

comprehensive credit limit not exceeding RMB1.5 billion from China Everbright Bank Co. Ltd. to

meet its daily operating capital needs. During the reporting period the Company signed a credit

agreement with China Everbright Bank Co. Ltd. for a credit amount of RMB1 billion.

(3) Counter-guarantees for Bank Credit Facilities Application: The 56th meeting of the 9th Board of

Directors on 28 March 2022 and the 2021 Annual General Meeting of Shareholders on 25 April

2022 approved the proposal Providing Counter-guarantees for Bank Credit Facilities Applicationby the Company. To reduce financing costs Overseas Chinese Town Holdings Company (“OCTGroup” for short) provided a full unconditional and irrevocable joint and several liability

guarantee (the “Guarantee”) for the Company’s bank credit facilities application not exceeding

RMB2.5 billion. In turn the Company plans to offer counter-guarantees to Overseas Chinese Town

Group of an equal amount and term with an anticipated counter-guarantee amount not exceeding

RMB2.5 billion and a guarantee limit valid for a maximum of three years.

(4) Guarantee Limits for Affiliated Companies: The 57th meeting of the 9th Board of Directors on

27 April 2022 and the second extraordinary general meeting of shareholders in 2022 on 16 May

2022 passed the proposals Providing Guarantee Limits for Kunshan Kangsheng Investment

Development Co. Ltd. and Providing Guarantee Limits for Chuzhou Konka Technology Industry

Development Co. Ltd. According to its shareholding proportion the Company intends to increasethe credit guarantee limit for Kunshan Kangsheng Investment Development Co. Ltd. (“KunshanKangsheng Company”) by RMB49 million with a guarantee limit valid for three years. Other

shareholders of Kunshan Kangsheng Company will provide guarantees for Kunshan Kangsheng

Company based on their respective shareholding proportions together with the Company. As a

result the total guarantee limit provided by the Company for Kunshan Kangsheng Company will

increase to RMB294 million. The Company also plans to provide a credit guarantee limit ofRMB98 million for Chuzhou Konka Technology Industry Development Co. Ltd. (“ChuzhouKonka Company”) according to its shareholding proportion with a guarantee limit valid for three

years. Other shareholders of Chuzhou Konka Company will provide guarantees for Chuzhou Konka

Company based on their respective shareholding proportions together with the Company.

(5) Capital increase in related joint stock company: At the 59th meeting of the 9th Board of

83Konka Group Co. Ltd. Annual Report 2022

Directors held on June 1 2022 the Company reviewed and approved the Proposal on Increasing the

Capital of Chuzhou Kangjin Health Industry Development Co. Ltd. In order to satisfy the capital

needs of Chuzhou Kangjin Health Industry Development Co. Ltd. (Chuzhou Kangjin) 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. During the Reporting

Period the Company has completed the capital increase in Chuzhou Kangjin Health Industry

Development Co. Ltd.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

28 April 2022

and the Related-party Transaction

Announcement on the Application to China Everbright Bank for

30 March 2022

Comprehensive Credit Line & the Related-party Transaction

Announcement on the Provision of Counter-guarantee for the Application to http://www.cninfo.com.c

30 March 2022

Bank for Credit Line & the Related-party Transaction n/new/index

Announcement on the Termination of the Asset Acquisition by Share

Offering and Cash Payment and Raising the Matching Funds & the Related- 7 March 2022

party Transaction

Announcement on the Provision of Counter-guarantee by Shenzhen Konka

Telecommunications Technology Co. Ltd. to Shenzhen Overseas Chinese 23 February 2022

Town Co. Ltd. & the Related-party Transaction

XV Major Contracts and Execution thereof

1. Entrustment Contracting and Leases

(1) Entrustment

□ Applicable √ Not applicable

No such cases in the Reporting Period.

(2) Contracting

□ Applicable √ Not applicable

No such cases in the Reporting Period.

84Konka Group Co. Ltd. Annual Report 2022

(3) Leases

√ Applicable □ Not applicable

Note to leases

No significant leases in the Reporting Period.The rent of Konka Development Building has received RMB69716914.02 in the Reporting

Period.The project bringing about gains or losses as over 10% of total profit in the Reporting Period

□ Applicable √ Not applicable

No such cases in the Reporting Period.

2. Major Guarantees

√ Applicable □ Not applicable

Unit: RMB'0000

Guarantees provided by the Company and its subsidiaries for external parties (exclusive of those for subsidiaries)

Havin Guarant

Disclosure Actual Type Collat Counter Term

Line of Actual g ee for a

Obligor date of the guarant of eral guarant ofguarante occurren expire related

guarantee line ee guara (if ee (if guara

e ce date d or party or

announcement amount ntee any) any) ntee

not not

19 May Joint-

2022 1749 liabilit No Not

One

year Not Noty

17 May Joint-

2022 3747 liabilit No Not

One

y year

Not Not

18 May Joint-

2022 4997 liabilit No Not

One

y year

Not Not

28 June Joint-

2022 250 liabilit No Not

One

year Not Noty

8 July Joint-2498 liabilit No Not One Not Not

Shandong Econ 2022 y year

Technology 28 April 2022 50000

Co. Ltd. 27 July

Joint-

749 liabilit No Not One2022 year Not Noty

16 Joint-

August 25 liabilit No Not One

2022 y year

Not Not

6 Joint-

Septemb 200 liabilit No Not Oneyear Not Noter 2022 y

30 Joint-

Septemb 3747 liabilit No Not Two Not Not

er 2022 y years

23 Joint- One

Novemb 2748 liabilit No Not yearand a Not Noter 2022 y half

Shenzhen

Overseas 23 February 31 May Joint-

Chinese Town 2022 16000 2022 10000 liabilit No Not

One

y year

Not Yes

Co. Ltd.Foshan

Zhujiang 28 April 2022 1372

17 May 980 Joint-2022 liabilit No Not

Six

years Not Not

85Konka Group Co. Ltd. Annual Report 2022

Media Creative y

Park Cultural

Development

Co. Ltd.Jiangxi Xinxin

Jian’an 12 Joint-

Engineering 10000 Decemb 10000 liabilit No Not Not Not

Co. Ltd. er 2016 y

Jiangxi

Zhongyi 12 Joint-

Decoration 10000 Decemb 10000 liabilit No Not Not Not

Materials Co. er 2016 y

Ltd.Jiangxi Shanshi

Technological 12 Joint-

Development 10000 Decemb 10000 liabilit No Not Not Not

Co. Ltd. er 2016 y

8 Joint-

Overseas Septemb 60000 liabilit No Not Threeyears Not YesChinese Town 30 March 270000 er 2022 yHoldings 2022 18 Joint-

Company October 60000 liabilit No Not Threeyears Not Yes2022 y

Total approved line for such

guarantees in the Reporting 651872 Total actual amount of such guarantees in the

Period (A1) Reporting Period (A2)

151690

Total approved line for such

guarantees at the end of the 785572 Total actual balance of such guarantees at the end

Reporting Period (A3) of the Reporting Period (A4)

181690

Guarantees provided between the Company and subsidiaries

Disclosure Actua Guaran

date of the Line l Colla Counter Term tee for

Obligor guarantee of Actual guara Type of teral guarante of

Having a

line guaran occurrence date ntee guarantee (if e (if guarant expired

announce tee amou any) any) ee or not

related

party or

ment nt not

One

28 October Joint- year

2021 3000 liability No Not and a Not Not

half

23 May

Anhui 2018 and 5500 14 April 2022 5000

Joint- No Not One

Tongchua 19 liability year

Not Not

ng September 0 2 June 2022 3000 Joint- One

2018 liability

No Not year Not Not

5 July 2022 5000 Joint-liability No Not

One

year Not Not

19 October 1000 Joint- One

2022 0 liability No Not year Not Not

31

Hong October

Kong 2018 and 9000 9 February 1000 Joint-0 2022 0 liability No Not

One

Konka 28 April year

Not Not

2022

31 March 19 August

Boluo 2018 and 1250 2020 2480

Joint- Three

liability No Not years Not Not

Precision 28 April 00 25 August

202220223000

Joint-

liability No Not

One

year Not Not

Electroni

cs 19

24 November Joint- One

September 3500 2022

8500 liability No Not year Not Not

Technolo 2018 00 10 October 5000 Joint- Onegy 2022 0 liability No Not year Not Not

19 Joint- One

Donggua September

18 March 2022 5000 liability No Not year Not Not

n Konka 2018 and

9000

24 March 0 23 June 2021 8000 Joint- Ten0 liability No Not years Not Not2021

86Konka Group Co. Ltd. Annual Report 2022

23 February 5800 Joint- Other Two2022 liability No sharehol years Not Not

25 December 2000 Joint- No der of Three2020 liability XingDa years Not Not

HongYe

provides

19 aXingDa September 1000 counterHongYe 2018 0 guarante

31 May 2021 750 Joint- e for the Twoliability No Compan years Not Not

y for

49% of

the

guarante

e line

6 November 1000 Joint- Other Three

2020 0 liability No sharehol years Not Not

26 June 2022 6000 Joint- No der of Oneliability Jiangxi year Not Not

29 September 1000 Joint- KonkaNo Three2020 0 liability provides years Not Not

a Two

Jiangxi 31October 6000 21 December Joint- counter yearsKonka 5000 No Not Not2018 0 2020 liability guarante and ae for the half

10 March 2022 990 Joint-

Compan

No Twoliability y for years Not Not

49% of

30 December Joint- the Three

2020 1000 liability No guarante years Not Not

e line

19 May 2020 5000 Joint- Other Threeliability No sharehol years Not Not

8 December 2100 Joint- No der of Three2020 liability Xinfeng years Not Not

29 December Joint- Microcr One

2022 7200 liability No ystalline year Not Not

provides

Xinfeng

Microcry 30 March 2500

a

counter

stalline 2019 0 guarante

e for the

29 June 2022 7200 Joint- Oneliability No Compan year Not Noty for

49% of

the

guarante

e line

8 January 2020 5000 Joint- No Other Threeliability sharehol years Not Not

10 March 2022 990 Joint- No der of Twoliability Jiangxi years Not Not

High

Transpa

Jiangxi rent

High Substrat

Transpare 30 March 4500 e

nt 2019 0 provides

Substrate 14 July 2020 6000 Joint- No a Threeliability counter years Not Not

guarante

e for the

Compan

y for

49% of

the

87Konka Group Co. Ltd. Annual Report 2022

guarante

e line

31 March

Sichuan 2018 and 6500

Konka 24 March 0 22 March 2022 4000

Joint- No No Oneliability year Not Not

2021

Ningbo 12 August

20216000

Joint-

liability No No

Two

Khr years

Not Not

Electric 28 April 1200

Applianc 2022 0 12 July 2022 6000 Joint- No No Oneliability year Not Note

Other

sharehol

der of

Yibin

Kangrun

provides

a

Yibin 24October 1000 13 November 1000 Joint-Kangrun No

counter Four

2020 0 2020 0 liability guarante years

Not Not

e for the

Compan

y for

33% of

the

guarante

e line

Telecom

municatio

n 28 April 2000 20 May 2022 7500 Joint- No No One2022 0 liability year Not NotTechnolo

gy

10 August 2800 Joint- Other Ten

2021 0 liability No sharehol years Not Not

29 October 7000 Joint- No der of Five2021 liability Anhui years Not Not

13 September 1000 Joint- Konka One

2022 0 liability No provides year Not Not

18 August Joint- a One

Anhui 28 April 1100 2022 5500 liability No counter year Not Not

Konka 2022 00 22 August 1800 Joint- guarante One

2022 0 liability No e for the year Not Not

24 October Compan

20227000

Joint- Four

liability No y for years Not Not

22% of

19 September the

20227000

Joint- One

liability No guarante year Not Not

e line

Three

Konka 24 March 5000 24 May 2021 2000 Joint- yearsCircuit 2021 0 0 liability No No and a Not Not

half

Mobile

Interconn 28 April 1000 11 August 7000 Joint-2022 0 2022 liability No No

One

year Not Notection

Liaoyang 24 March

Kangshu 2021 and 2000 19 January28 April 0 2022 5000

Joint-

liability No No

One

n year

Not Not

2022

12 July 2021 2000 Joint- FiveKonka 24 March 3000 0 liability No No years Not Not

Xinyun 2021 0 26 May 2022 6000 Joint- Twoliability No No years Not Not

Yibin 24 March 1000 Joint- One

Smart 2021 0 31 March 2022 980 liability No No year Not Not

Chongqin 24 March 5560 13 December 3800 Joint- No No Fifteen Not Not

88Konka Group Co. Ltd. Annual Report 2022

g Konka 2021 0 2022 0 liability years

Frestec

Smart 28 April 12242022 0 6 July 2022

1020 Joint- Eight

Home 0 liability

No No years Not Not

Konka

Soft 28 April 1900 19 December Joint- Four

Electroni 2022 0 2022 975 liability No No years Not Not

c

Total approved line for such guarantees in the Reporting Total actual amount of such

Period (B1) 334470 guarantees in the Reporting Period 260835(B2)

Total approved line for such guarantees at the end of the Total actual balance of such

Reporting Period (B3) 1607180 guarantees at the end of the 484165Reporting Period (B4)

Guarantees provided between subsidiaries

Disclosure Actua Guaran

date of the Line l Colla Counter Term tee for

Obligor guarantee of Actual guara Type of teral guarante of

Having a

line guaran occurrence date ntee guarantee (if e (if guarant expired

announce tee amou any) any) ee or not

related

party or

ment nt not

Land

s

Anhui house

Electrical 1350 3 July 2020 1350 Mortgage

prope

Applianc 0 0 pledge rty No

Three

equit years

Not Not

e y

intere

sts

Hous

Boluo 1244 6 July 2021 1244Precision 9 9 Mortgage

e Two

prope No years Not Not

rty

Total approved line for such guarantees in the Reporting 0 Total actual amount of such guaranteesPeriod (C1) in the Reporting Period (C2) 0

Total approved line for such guarantees at the end of the Total actual balance of such guarantees

Reporting Period (C3) 25949 at the end of the Reporting Period (C4) 25949

Total guarantee amount (total of the three kinds of guarantees above)

Total guarantee line approved in the Reporting Period 986342 Total actual guarantee amount in the(A1+B1+C1) Reporting Period (A2+B2+C2) 412525

Total approved guarantee line at the end of the Reporting Total actual guarantee balance at the

Period (A3+B3+C3) 2418701 end of the Reporting Period 691804(A4+B4+C4)

Total actual guarantee amount (A4+B4+C4) as % of the

Company’s net assets 90.55%

Of which:

Balance of guarantees provided for shareholders actual controller and their related parties (D) 130000

Balance of debt guarantees provided directly or indirectly for obligors with an over 70% debt/asset ratio (E) 691804

Amount by which the total guarantee amount exceeds 50% of the Company’s net assets (F) 309784

Total of the three amounts above (D+E+F) 691804

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 forWealth Management

(1) Cash Entrusted forWealth Management

√ Applicable □ Not applicable

Overview of cash entrusted for wealth management in the Reporting Period

Unit: RMB’0000

89Konka Group Co. Ltd. Annual Report 2022

Unrecovered

Type Funding source Amount Undue amount Unrecovered overdue amountoverdue amount with provision

for impairment

Trust financial

products Self-owned 10000.00 10000.00 0 0

Total 10000.00 10000.00 0 0

High-risk entrusted wealth management with significant single amount or low security and poor

liquidity:

□ Applicable √ Not applicable

Whether there is the case where the principal cannot be recovered at maturity or other case which

may cause impairment for entrusted wealth management

□ Applicable √ Not applicable

(2) Entrusted Loans

□Applicable √ Not applicable

No such cases in the Reporting Period.

4. Other Major Contracts

□Applicable √ Not applicable

No such cases in the Reporting Period.XVI Other Significant Events

√ Applicable □ Not applicable

(I) Corporate bond issue: Currently the public offering of corporate bonds of RMB1.2 billion was

completed on 14 July 2022; as for the non-public offering of corporate bonds of RMB1.8 billion

RMB1.2 billion of corporate bonds have been issued respectively on 8 September 2022 and 18

October 2022. As for the rest of corporate bonds of RMB0.6 billion relevant matters are being

promoted as planned.(II) Initiation and establishment of funds: The total units of the Oriental-Konka Industry M&A

Fund worth RMB1001000000. Shenzhen Konka Investment Holding Co. Ltd. contributed

RMB500 million accounting for 49.95% of the total units. By the date of this report (31

December 2022) Shenzhen Konka Investment Holding Co. Ltd. has contributed

RMB487344000. 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 RMB1006000000. Shenzhen Konka Investment Holding Co. Ltd. contributed RMB500

million accounting for 49.7% of the total units. By the date of this report Shenzhen Konka

Investment Holding Co. Ltd. has contributed RMB195.21 million. The fund invested in

UNIONTECH Hercules Microsystems (HME) etc.The total units of the Tongxiang Wuzhen Jiayu Digital Economic Industry Fund worth RMB500

million. Shenzhen Konka Investment Holding Co. Ltd. contributed RMB200 million accounting

90Konka Group Co. Ltd. Annual Report 2022

for 40% of the total units. By the date of this report Shenzhen Konka Investment Holding Co.Ltd. has contributed RMB200000000. The fund invested in Feidi Technology (Shenzhen) Co.Ltd. CASICloud-Tech Co. Ltd.The total units of Yancheng Kangyan Industry Investment Fun worth RMB3 billion. Shenzhen

Konka Investment Holding Co. Ltd. and Shenzhen Konka Capital Equity Investment

Management Co. Ltd. contributed RMB1201500000 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 RMB217360000. The fund

invested in Anhui Zhongdian Xingfa and Xinlong Co. Ltd. and Chongqing YPFun Technology

Co. Ltd. etc.The total units of Yibin Kanghui Electronic Information Industry Equity Investment Fund worth

RMB1002000000. Shenzhen Konka Investment Holding Co. Ltd. and Shenzhen Konka Capital

Equity Investment Management Co. Ltd. contributed RMB401 million accounting for 40.02% of

the total units. By the issuance date of this report Shenzhen Konka Investment Holding Co. Ltd.has contributed RMB104 million. The fund invested in Talkweb Information System Co. Ltd.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% 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 RMB148248300. The fund invested

in Shanghai Veiglo Information Technology Co. Ltd. Jiangxi Taide Wisdom Technology Co. Ltd.etc.(III) Disclosure index of significant information

Announce

ment No. Date Title Page on newspaper

Website

link

2022-01 8 January

Announcement on Progress of Asset Acquisition and Funds

2022 Raising by Issuance of Shares and Cash Payment and

Securities Daily B76 Shanghai

Progress of Related Transaction Plan After Disclosure Securities News 28 etc.

2022-02 18 JanuaryAnnouncement on Resolutions of 53th Meeting of the Ninth Securities Daily B22 Shanghai2022 Board of Directors Securities News 84 etc.

2022-03 18 JanuaryAnnouncement on Proposed introduction of Strategic Securities Daily B22 Shanghai2022 Investors by Controlling Company Securities News 84 etc.

2022-04 25 January2022 2021 Result Forecast

Securities Daily B31 Shanghai

Securities News 29 etc. http://ww

w.cninfo.

2022-05 25 JanuaryAnnouncement on Progress of Security for Controlling Securities Daily B31 Shanghai2022 Company Securities News 29 etc. com.cn/n

ew/index

2022-06 9 February

Announcement on Progress of Asset Acquisition and Funds

2022 Raising by Issuance of Shares and Cash Payment and

Securities Daily B31 Shanghai

Progress of Related Transaction Plan After Disclosure Securities News 36 etc.

17

2022-07 February Announcement on the Change of the Signatory Certified Securities Daily B37 Shanghai

2022 Public Accountant Securities News 16 etc.

23

2022-08 February Announcement on Resolutions of 54th Meeting of the Ninth Securities Daily B38 Shanghai

2022 Board of Directors Securities News 33 etc.

91Konka Group Co. Ltd. Annual Report 2022

23

2022-09 February Announcement on Providing Financial Assistance to Securities Daily B38 Shanghai

2022 Shandong Econ Technology Co. Ltd. at Shareholding Ratio Securities News 33 etc.

23 Announcement on Providing Counter Guarantee to and

2022-10 February Conducting Connected Transaction with Shenzhen Overseas Securities Daily B38 Shanghai

2022 Chinese Town Co. Ltd. by Shenzhen Konka Securities News 33 etc.Telecommunications Technology Co. Ltd.

23

2022-11 February Announcement on Progress of Guarantee Provision for Securities Daily B38 Shanghai

2022 GuangDong XingDa HongYe Electronic Co. Ltd. Securities News 33 etc.

2022-12 1 March2022 Announcement on Resignation of the Company's Director

Securities Daily B48 Shanghai

Securities News 60 etc.

2022-13 1 March Announcement on Resignation of the Company's Vice Securities Daily B48 Shanghai2022 President Securities News 60 etc.

2022-14 7 March Announcement on Resolutions of 55th Meeting of the Ninth Securities Daily B3 Shanghai2022 Board of Directors Securities News 28 etc.

2022-15 7 March Announcement on Resolutions of 19th Meeting of the Ninth Securities Daily B3 Shanghai2022 Board of Directors Securities News 28 etc.

2022-16 7 March Announcement on Providing Financial Assistance to Sichuan Securities Daily B3 Shanghai2022 Chengrui Real Estate Co. Ltd. at Shareholding Ratio Securities News 28 etc.

2022-17 7 March Notice on Convening 2022 First Extraordinary General Securities Daily B3 Shanghai2022 Meeting Securities News 28 etc.

7 March Announcement on the Termination of Asset Acquisition and2022-18 Funds Raising by Issuance of Shares or Cash Payment and Securities Daily B3 Shanghai2022 Related Transaction Matters Securities News 28 etc.

2022-19 23 March Announcement on Resolutions of 2022 First Extraordinary Securities Daily B54 Shanghai2022 General Meeting Securities News 60 etc.

2022-20 24 March Announcement on the Postponement of the Replacement of Securities Daily B14 Shanghai2022 the Board of Directors and the Board of Supervisors Securities News 16 etc.

2022-21 25 March Announcement on Proposed Introduction of Strategic Securities Daily B60 Shanghai2022 Investors by Controlling Company Securities News 84 etc.

2022-22 30 March2022 2021 Annual Report of Mercedes-Benz Group AG

2022-23 30 March Announcement on Resolutions of 56th Meeting of the Ninth Securities Daily B55 Shanghai2022 Board of Directors Securities News 57 etc.

2022-24 30 March Announcement on Resolutions of 20th Meeting of the Ninth Securities Daily B55 Shanghai2022 Board of Directors Securities News 57 etc.

2022-25 30 March Announcement on Expected Routine Connected Transactions Securities Daily B56 Shanghai2022 in 2022 Securities News 57 etc.

2022-26 30 March2022 Announcement on Plan of Profit Distribution for 2022

Securities Daily B55 Shanghai

Securities News 59 etc.

2022-27 30 March2022 Notice on Convening 2021 Shareholders' General Meeting

Securities Daily B55 Shanghai

Securities News 57 etc.

2022-28 30 March Announcement on Accrual of Asset Impairment Reserves for Securities Daily B55 Shanghai2022 2021 Securities News 57 etc.

Announcement on Providing Counter Guarantee and

2022-29 30 March2022 Conducting Connected Transaction for Applying for Bank

Securities Daily B55 Shanghai

Credit Business Securities News 59 etc.

30 March Announcement on Issuing the Plan for the Company's Private2022-30 2022 Offering of Corporate Bonds and Providing Counter

Securities Daily B56 Shanghai

Guarantee for OCT Group Securities News 59 etc.

30 March Announcement on Applying for a Comprehensive Line of2022-31 2022 Credit to and Conducting Connected Transactions with China

Securities Daily B56 Shanghai

Everbright Bank Securities News 57 etc.

2022-32 30 March Abstract of 2021 Annual Report Securities Daily B55 Shanghai2022 Securities News 57 etc.

2022-33 1 April

Announcement on Completion of Industrial and Commercial

Registration of Changes for Capital Increase of Hefei Securities Daily B92 Shanghai2022 KONSEMI Storage Technology Co. Ltd. Securities News 92 etc.

2022-34 1 April2022 Announcement on Holding 2021 Online Result Release

Securities Daily B92 Shanghai

Securities News 92 etc.

2022-35 1 April Announcement on Progress of Security for Controlling Securities Daily B100 Shanghai

92Konka Group Co. Ltd. Annual Report 2022

2022 Company Securities News 92 etc.

2022-36 26 April Announcement on Resolutions of 2021 Shareholders' General Securities Daily B219 Shanghai2022 Meeting Securities News 236 etc.

2022-37 28 April 2022Q1 Report Securities Daily B181 Shanghai2022 Securities News 193 etc.

2022-38 28 April Notice on Convening 2022 Second Extraordinary General Securities Daily B183 Shanghai2022 Meeting Securities News 194 etc.

2022-39 28 April Announcement on Resolutions of 57th Meeting of the Ninth Securities Daily B181 Shanghai2022 Board of Directors Securities News 193 etc.

2022-40 28 April Announcement on Proposed Sale of Some of Equity in Securities Daily B183 Shanghai2022 Chutian Dragon Co. Ltd. Securities News 194 etc.

2022-41 28 April Announcement on Progress of Guarantee Provision for Securities Daily B182 Shanghai2022 Wholly-owned Company Securities News 194 etc.

2022-42 28 April Announcement on External Guarantee Securities Daily B181 Shanghai2022 Securities News 193 etc.

2022-43 28 April

Announcement on Providing Security Limit to and

2022 Conducting Connected Transaction with Shareholding

Securities Daily B182 Shanghai

Company Securities News 194 etc.

2022-44 17 May Announcement on Resolutions of 2022 Second Extraordinary Securities Daily B91 Shanghai2022 General Meeting Securities News 76 etc.

2022-45 21 May Announcement on Resolutions of 58th Meeting of the Ninth Securities Daily B16 Shanghai2022 Board of Directors Securities News 25 etc.

2022-46 21 May Announcement on Transfer of 100% of Equity in Xi'an Securities Daily B16 Shanghai2022 Huasheng Jiacheng Real Estate Co. Ltd. Securities News 25 etc.

2022-47 2 June Announcement on Resolutions of 59th Meeting of the Ninth Securities Daily B16 Shanghai2022 Board of Directors Securities News 41 etc.

2022-48 2 June

Announcement on Increasing Capital to and Conducting

2022 Connected Transaction with Chuzhou Kangjin Health

Securities Daily B16 Shanghai

Industrial Development Co. Ltd. Securities News 41 etc.

2022-49 2 June Announcement on Progress in the Provision of External Securities Daily B16 Shanghai2022 Guarantee Securities News 41 etc.

2022-50 2 June2022 Announcement on Distribution of 2022 Annual Equity

Securities Daily B71 Shanghai

Securities News 52 etc.

2022-51 11 June Announcement on Resolutions of 60th Meeting of the Ninth Securities Daily B23 Shanghai2022 Board of Directors Securities News 41 etc.

2022-52 11 June Notice on Convening 2022 Third Extraordinary General Securities Daily B23 Shanghai2022 Meeting Securities News 41 etc.

2022-53 11 June Announcement on Revision of the Articles of Association and Securities Daily B22 Shanghai2022 other systems of the Company Securities News 41 etc.

2022-54 18 June Announcement on Progress of Guarantee Provision for Securities Daily B22 Shanghai2022 Wholly-owned Company Securities News 20 etc.

25 June Announcement on Voluntary Information Disclosure for2022-55 2022 Signing Cooperation Framework Agreement with Hangzhou

Securities Daily B71 Shanghai

Hemai Power Electronics Co. Ltd. Securities News 60 etc.

2022-56 28 June Announcement on Resolutions of 2022 Third Extraordinary Securities Daily B57 Shanghai2022 General Meeting Securities News 52 etc.

2022-57 28 June Announcement on Progress in Transfer of 100% of Equity in Securities Daily B57 Shanghai2022 Xi'an Huasheng Jiacheng Real Estate Co. Ltd. Securities News 52 etc.

2022-57 9 July Announcement on Resolutions of 61

st Meeting of the Ninth Securities Daily B16 Shanghai

2022 Board of Directors Securities News 81 etc.

2022-58 9 July Announcement on Resolutions of 22

nd Meeting of the Ninth Securities Daily B16 Shanghai

2022 Supervisory Committee Securities News 81 etc.

2022-59 9 July Notice on Convening 2022 Fourth Extraordinary General Securities Daily B15 Shanghai2022 Meeting Securities News 81 etc.

2022-60 9 July2022 Statement of Independent Director Candidate (Liu Jian)

Securities Daily B15 Shanghai

Securities News 81 etc.

2022-61 9 July Statement of Independent Director Candidate (Deng Securities Daily B15 Shanghai2022 Chunhua) Securities News 81 etc.

2022-62 9 July Statement of Independent Director Candidate (Wang Securities Daily B15 Shanghai2022 Shuguang) Securities News 81 etc.

2022-63 9 July2022 Statement of Independent Director Nominee (Deng Chunhua)

Securities Daily B16 Shanghai

Securities News 81 etc.

93Konka Group Co. Ltd. Annual Report 2022

2022-64 9 July2022 Statement of Independent Director Nominee (Liu Jian)

Securities Daily B15 Shanghai

Securities News 81 etc.

2022-65 9 July Statement of Independent Director Nominee (Wang Securities Daily B15 Shanghai2022 Shuguang) Securities News 81 etc.

2022-66 15 July2022 Announcement on Performance Forecast for H1 2022

Securities Daily B17 Shanghai

Securities News 84 etc.

2022-67 23 July Announcement on Overdue Shareholder Loan to Affiliated Securities Daily B13 Shanghai2022 Company Securities News 33 etc.

2022-68 23 July Announcement on Progress Update on Bid for Land Use Securities Daily B17 Shanghai2022 Rights Securities News 33 etc.

2022-69 26 July Announcement on Resolutions of the 2022 Fourth Securities Daily B37 Shanghai2022 Extraordinary General Meeting Securities News 52 etc.

2022-70 26 July Announcement on Election of Employee Directors and Securities Daily B37 Shanghai2022 Employee Supervisors Securities News 52 etc.

2022-71 26 July Announcement on Resolutions of 1

st Meeting of the Tenth Securities Daily B37 Shanghai

2022 Board of Directors Securities News 52 etc.

2022-72 26 July Announcement on Resolutions of 1

st Meeting of the Tenth Securities Daily B37 Shanghai

2022 Supervisory Committee Securities News 52 etc.

2022-73 18 August Announcement on Receipt of SZSE No Objection Letter for Securities Daily B14 Shanghai2022 2022 Corporate Bond Listing Qualification Securities News 108 etc.

2022-74 20 August Announcement on Progress in the Provision of External Securities Daily B64 Shanghai2022 Guarantee Securities News 16 etc.

2022-75 25 August2022 Summary of 2022 Interim Report

Securities Daily B2 Shanghai

Securities News 20 etc.

2022-76 25 August 2022 Interim Report Securities Daily B2 Shanghai2022 Securities News 20 etc.

2022-77 25 August Announcement on Resolutions of 2

nd Meeting of the Tenth Securities Daily B2 Shanghai

2022 Board of Directors Securities News 20 etc.

9

2022-78 September Announcement on Issuance Results of Non-public Offering of Securities Daily A12 Shanghai

2022 Corporate Bonds (Tranche I) in 2022 Securities News 25 etc.

15

2022-79 September Announcement on Progress in the Provision of External Securities Daily B33 Shanghai

2022 Guarantee Securities News 105 etc.

2022-80 1 October Announcement on Majority-owned Subsidiary Receiving Securities Daily B79 Shanghai2022 Government Grants Securities News 33 etc.

19

2022-81 October Announcement on Issuance Results of Non-public Offering of Securities Daily B99 Shanghai

2022 Corporate Bonds (Tranche II) in 2022 Securities News 81 etc.

20

2022-82 October Announcement on Progress in the Provision of External Securities Daily B59 Shanghai

2022 Guarantee Securities News 57 etc.

28

2022-83 October 2022 Q3 Report Securities Daily B221 Shanghai

2022 Securities News 84 etc.

28

2022-84 October Announcement on Resolutions of 4

th Meeting of the Tenth Securities Daily B221 Shanghai

2022 Board of Directors Securities News 84 etc.

28

2022-85 October Notice on Convening 2022 Fifth Extraordinary General Securities Daily B221 Shanghai

2022 Meeting Securities News 84 etc.

28

2022-86 October Announcement on Appointment of Audit Firms for 2022 Securities Daily B221 Shanghai

2022 Financial Statements and Internal Control Audit Securities News 84 etc.

1

2022-87 November Announcement on Participation in 2022 Shenzhen Online Securities Daily B28 Shanghai

2022 Group Reception Day for Listed Company Investors Securities News 68 etc.

15

2022-88 November Announcement on Resolutions of the 2022 Fifth Securities Daily B75 Shanghai

2022 Extraordinary General Meeting Securities News 52 etc.

2022-89 24 Securities Daily B33 ShanghaiNovember Announcement on Accumulative Lawsuits and Arbitrations Securities News 33 etc.

94Konka Group Co. Ltd. Annual Report 2022

2022

24

2022-90 November Announcement on Progress of Security for Controlling Securities Daily B33 Shanghai

2022 Company Securities News 33 etc.

7 th

2022-91 December Announcement on Resolutions of 5 Meeting of the Tenth Securities Daily B8 Shanghai

2022 Board of Directors Securities News 50 etc.

7 Announcement on Financial Assistance to Sichuan

2022-92 December Hongxinchen Real Estate Development Co. Ltd. Based on Securities Daily B8 Shanghai

2022 Shareholding Proportion Securities News 50 etc.

7

2022-93 December Announcement on Loans Provided to Shareholders by Securities Daily B8 Shanghai

2022 Subsidiary Company Based on Equity Proportion Securities News 50 etc.

7

2022-94 December Notice on Convening 2022 Sixth Extraordinary General Securities Daily B8 Shanghai

2022 Meeting Securities News 50 etc.

17

2022-95 December Announcement on Progress of Security for Controlling Securities Daily B44 Shanghai

2022 Company Securities News 44 etc.

24

2022-96 December Announcement on Resolutions of the 2022 Sixth Securities Daily B40 Shanghai

2022 Extraordinary General Meeting Securities News 57 etc.

XVII Significant Events of Subsidiaries

□ Applicable √ Not applicable

95Konka Group Co. Ltd. Annual 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

Sha

res

as Shares

divi as

den divide

New d nd Percent

Shares Percenta issue con converge (%) ted Other Subtotal Shares ages vert from (%)ed

fro capital

m reserv

pro es

fit

1. Restricted shares 19500 0.00% -19500 -19500 0 0.00%

1.3 Shares held by

other domestic 19500 0.00% -19500 -19500 0 0.00%

investors

Shares held by

domestic natural 19500 0.00% -19500 -19500 0 0.00%

persons

100.00100.00

240792590819500195002407945408

2. Unrestricted shares % %

2.1 RMB-

denominated ordinary 66.311596574300 66.31% 19500 19500 1596593800

shares %

2.2 Domestically 33.69

listed foreign shares 811351608 33.69% 811351608 %

3. Total shares 100.00 100.002407945408 2407945408

%%

Reasons for the share changes:

√ Applicable □ Not applicable

During the Reporting Period Mr. Sun Qingyan resigned as the Vice President of the Company for

personal reasons and the 19500 shares held by him in the Company locked up at the beginning of

the year shall be fully released after 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

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:

96Konka Group Co. Ltd. Annual Report 2022

□Applicable √ Not applicable

Other information that the Company considers necessary or is required by the securities regulator to

be disclosed:

□ Applicable √ Not applicable

2. Changes in Restricted Shares

√ Applicable □ Not applicable

Increase in

Unlocked

Beginning restricted Ending

Name of in the

restricted shares in the restricted Reason for restriction Date of unlocking

shareholder current

shares current shares

period

period

Over six months upon his

Sun Qingyan 19500 19500 0 0 1 September 2022

resignation

Total 19500 19500 0 0 -- --

II Issuance and Listing of Securities

1. Securities (Exclusive of Preferred Shares) Issued in the Reporting Period

□Applicable √ Not applicable

2. Changes to Total Shares Shareholder Structure and Asset and Liability Structures

□Applicable √ Not applicable

3. Existing Staff-Held Shares

□Applicable √ Not applicable

III Shareholders and Actual Controller

1. Shareholders and Their Shareholdings at the Period-End

Unit: share

Number of ordinary Number of preferred

Number of shareholders at the Number of preferred shareholders with resumed

ordinary 86602 month-end prior to 86570 shareholders with 0 voting rights at the month-end 0

shareholders the disclosure of this resumed voting rights (ifany) prior to the disclosure of thisReport Report (if any)

5% or greater shareholders or top 10 shareholders

Share

Nature of holdi Total

Increase/d Shares in pledge

Name of shareholder sharehold ng shares held

ecrease in Restricte Unrestricted marked or frozen

er perce at the

the d shares shares held

period-end Reporting held Status Sharesntage Period

OVERSEAS CHINESE State-

TOWN HOLDINGS owned 21.75 52374693legal % 2 0 0 523746932COMPANY person

CITIC SECURITIES Foreign

BROKERAGE (HONG legal 7.48 18000111% 0 0 0 180001110KONG) CO. LTD. person

Domestic

WANG JINGFENG natural 4.36 10500000% 0 -6111100 0 105000000person

GUOYUAN SECURITIES Foreign

BROKER (HK) CO. LTD. legal

2.4659227225-73100059227225

person %

HOLY TIME GROUP Foreign

LIMITED legal

2.38

% 57289100 0 0 57289100person

97Konka Group Co. Ltd. Annual Report 2022

Foreign

GAOLING FUNDL.P. legal 2.19% 52801250 0 0 52801250person

Foreign

NAM NGAI natural 0.96% 23019800 452260 0 23019800person

CHINA MERCHANTS State-

SECURITIES (HK) owned 0.81legal % 19457720

1945772

0 0 19457720LIMITED person

BOCOM INTERNATIONAL Foreign

SECURITIES LIMITED legal

0.78188960370018896037

person %

HONG KONG SECURITIES Foreign

CLEARING COMPANY legal 0.63% 15138506 6426947 0 15138506LTD. person

Strategic investor or general legal person

becoming a top-10 ordinary shareholder N/A

due to rights issue (if any) (see note 3)

Happy Bloom Investment Limited a wholly-owned subsidiary of the Company’s first

majority shareholder Overseas Chinese Town Holdings Company (OCT Group) holds

Related or acting-in-concert parties among 180001110 and 18360000 ordinary shares in the Company respectively through CITIC

the shareholders above Securities Brokerage (Hong Kong) Co. Ltd. and China Merchants 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 N/A

with voting rights or waiving voting rights

Special account for share repurchases (if

any) among the top 10 shareholders (see None

note 10)

Top 10 unrestricted shareholders

Name of shareholder Unrestricted shares held at the period-end Shares by typeType Shares

OVERSEAS CHINESE TOWN RMB-

HOLDINGS COMPANY 523746932 denominated

52374693

ordinary stock 2

CITIC SECURITIES BROKERAGE Domestically 18000111

(HONG KONG) CO. LTD. 180001110 listed foreignstock 0

RMB-

WANG JINGFENG 105000000 denominated 10500000

ordinary stock 0

GUOYUAN SECURITIES BROKER (HK) Domestically

CO. LTD. 59227225 listed foreign 59227225stock

Domestically

HOLY TIME GROUP LIMITED 57289100 listed foreign 57289100

stock

Domestically

GAOLING FUNDL.P. 52801250 listed foreign 52801250

stock

Domestically

NAM NGAI 23019800 listed foreign 23019800

stock

CHINA MERCHANTS SECURITIES Domestically

(HK) LIMITED 19457720 listed foreign 19457720stock

BOCOM INTERNATIONAL Domestically

SECURITIES LIMITED 18896037 listed foreign 18896037stock

HONG KONG SECURITIES CLEARING RMB-

COMPANY LTD. 15138506 denominated 15138506ordinary stock

Related or acting-in-concert parties among Happy Bloom Investment Limited a wholly-owned subsidiary of the Company’s first

98Konka Group Co. Ltd. Annual Report 2022

top 10 unrestricted public shareholders as majority shareholder Overseas Chinese Town Holdings Company (OCT Group) holds

well as between top 10 unrestricted public 180001110 and 18360000 ordinary shares in the Company respectively through CITIC

shareholders and top 10 shareholders Securities Brokerage (Hong Kong) Co. Ltd. and China Merchants 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.Top 10 ordinary shareholders involved in

securities margin trading (if any) (see note Wang Jingfeng holds 105000000 A-shares in the Company through his securities account

4) for customer 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.

2. Controlling Shareholder

Nature of the controlling shareholder: Controlled by a central state-owned legal person

Type of the controlling shareholder: legal person

Legal Date UnifieName of d

actual representat ofive/person establi social Principal activitycontroller in charge shment creditcode

Export of textile light industrial products etc; import of self-used goods in

Shenzhen mechanical equipment light industrial products etc. as approved by

the relevant authorities of Shenzhen (under Government Document JMB [92]

Overseas WJMGTSZZ No. A19024); compensation trade; investment in tourism and

Chinese 11 91440 relevant cultural industry (including art performance entertainment and their

Town Zhang Nove 30019 services etc) industry real estate commerce & trade packaging decoration

Holdings Zhengao mber 03461 and investment in printing industry. The convert of export commodities into

Company 1985 75T domestic sale and the domestic sales of import commodities. Travelling rentalof warehouses culture and art bonded warehouse of car donation convention

and exhibition services (the projects involved in license management can be

operated after getting the relevant license first ); sales of automobile (sedan car

included)

As of 31 December 2022 Overseas Chinese Town Holdings Company directly held 47.01% equity of Shenzhen

Controlling Overseas Chinese Town Co. Ltd. (a company listed in Shenzhen Stock Exchange SZ. 000069) and indirectly

shareholder held 0.96% equity of Shenzhen Overseas Chinese Town Co. Ltd. through OCT Capital Investment Management

’s holdings Co. Ltd. Meanwhile Shenzhen Overseas Chinese Town Co. Ltd. indirectly held 70.94% equity of OCT (Asia)

in other Holdings Ltd. (a company listed on the main Board of Hong Kong Stock Exchange 3366.HK). Overseas Chinese

listed Town Holdings Company indirectly held 53.88% equity of Yunnan Tourism Co. Ltd. (a company listed in

companies Shenzhen Stock Exchange SZ.002059).Overseas Chinese Town Holdings Company held 7.77% equity of China

at home or Everbright Bank Company Limited (a company listed on the main Board of Shanghai Stock Exchange

abroad in (SH.601818) and the main Board of Hong Kong Stock Exchange (6818.HK). Overseas Chinese Town Holdings

the Company indirectly held 2.74% equity of Zhejiang Century Huatong Group Co. Ltd. (a company listed in

Reporting Shenzhen Stock Exchange SZ.002602) through its subsidiary Shenzhen OCT Capital Investment Management

Period Co. Ltd. Overseas Chinese Town Holdings Company indirectly held 11.12% of equity of Jiangsu GuoxinCorporation Limited (a company listed in Shenzhen Stock Exchange SZ. 002608) through its subsidiary

Shenzhen OCT Capital Investment Management Co. Ltd..Change of the controlling shareholder in the Reporting Period:

□ Applicable √ Not applicable

No such cases in the Reporting Period.

3. Actual Controller and Its Acting-in-Concert Parties

Nature of the actual controller: Central institution for state-owned assets management

Type of the actual controller: legal person

Name of actual controller Legal representative/person in Date of Unified social Principal

99Konka Group Co. Ltd. Annual Report 2022

charge establishment credit code activity

State-owned Assets Supervision and

Administration Commission of the Zhang Yuzhuo Not applicable Not applicable

State Council

Actual controller’s holdings in other listed companies at home or abroad in the Reporting Period Not applicable

Change of the actual controller during the Reporting Period:

□ Applicable √ Not applicable

No such cases in the Reporting Period.Ownership and control relations between the actual controller and the Company:

Indicate by tick mark whether the actual controller controls the Company via trust or other ways of

asset management.□ Applicable √ Not applicable

4. Number of Accumulative Pledged Shares held by the Company’s Controlling Shareholder

or the Largest Shareholder as well as Its Acting-in-Concert Parties Accounts for 80% of all

shares of the Company held by Them

□Applicable √ Not applicable

5. Other 10% or Greater Corporate Shareholders

□Applicable √ Not applicable

6. Limitations on Shareholding Decrease by the Company’s Controlling Shareholder Actual

Controller Reorganizer and Other Commitment Makers

□Applicable √ Not applicable

IV Specific Implementation of Share Repurchases in the Reporting Period

Progress on any share repurchases:

□ Applicable √ Not applicable

Progress on reducing the repurchased shares by means of centralized bidding:

100Konka Group Co. Ltd. Annual Report 2022

□Applicable √ Not applicable

101Konka Group Co. Ltd. Annual Report 2022

Part VIII Preference Shares

□Applicable √ Not applicable

No Preference shares in the Reporting Period.

102Konka Group Co. Ltd. Annual Report 2022

Part IX Corporate Bonds

√ Applicable □ Not applicable

I Enterprise Bonds

□Applicable √ Not applicable

No enterprise bonds in the Reporting Period.II Corporate Bonds

√ Applicable □ Not applicable

1. Basic Information of the Corporate Bonds

Unit: RMB

Bonds Way of

Name Abbr. Code Issue date Valuedate Due date

balance Interest redemptio Trade(RMB’0 rate n place000)

Interests

shall be

Privately placed paid

corporate bonds every

in 2021 of 21 8 January 8 January 8 January 1000000 year and Shenzhen

Konka Group Konk 114894 2021 2021 2024 000.00 4.46% the Stock

Co. Ltd a 01 principals Exchange

(Tranche I) shall berepaid

when

expired.Interests

shall be

Privately placed paid

corporate bonds every

in 2021 of 21Konk 133003 21 May 21 May 21 May 5000000

year and Shenzhen

Konka Group 2021 2021 2024 00.00 4.00% the Stock

Co. Ltd a 02 principals Exchange

(Tranche II) shall berepaid

when

expired.Interests

shall be

Privately placed paid

corporate bonds every

in 2021 of 21 year and Shenzhen

Konka Group Konk 133040

9 July 9 July 9 July 8000000 3.95% the Stock

Co. Ltd a 03

2021 2021 2024 00.00 principals Exchange

(Tranche III) shall berepaid

when

expired.Corporate bonds Interests

publicly offered shall be

to professional paid

investors in 22 ShenzhenKonk 149987 14 July 14 July 14 July 1200000 every2022 of Konka 2022 2022 2025 000.00 3.23% Stockyear and

Group Co. Ltd. a 01 Exchangethe

(Tranche I) principals

(Variety I) shall be

103Konka Group Co. Ltd. Annual Report 2022

repaid

when

expired.Interests

shall be

paid

Privately placed every

corporate bonds in 22 8 8 8 year and Shenzhen

2022 of Konka

Group Co. Ltd Konk 133306 Septembe Septembe Septembe

6000000 3.30% the Stock

(Tranche I) a 03 r 2022 r 2022 r 2025

00.00 principals Exchange

(Variety I) shall be

repaid

when

expired.Interests

shall be

paid

Privately placed every

corporate bonds in 22 18 18 18 year and Shenzhen

2021 of Konka Konk 133333 October October October 6000000 3.50% the Stock

Group Co. Ltd a 05 2022 2022 2025 00.00 principals Exchange

(Tranche II) shall be

repaid

when

expired.“21 Konka 01” “21 Konka 02” “21 Konka 03” “22 Konka 03” and “22 Konka 05” were

placed privately to professional investors meeting the requirements of management

method for investors eligibility of Shenzhen Stock Exchange which not exceeding 200

Appropriate arrangement of the investors (if

any) persons. “22 Konka 01” was offered publicly to professional institutional investors

meeting the requirements of Measures for the Administration of Issuing and Trading

Corporate Bonds and opening a qualified A-share securities account in Shenzhen Branch

of China Securities Depository and Clearing Corporation Limited.Applicable trade mechanism Comprehensive protocol trading platform: Match-and-deal click-and-deal inquire-and-deal bid-and-deal and negotiate-and-deal

Risk of delisting (if any) and

countermeasures No

Overdue bonds

□ Applicable √ Not applicable

2. The Trigger and Execution of the Option Clause of the Issuers or Investors and the

Investor Protection Clause

□Applicable √ Not applicable

3. Intermediary

Did the intermediary change during the Reporting Period?

□ Yes √ No

Bond Intermediary Office address Signature Contact person ofaccountant intermediary Contact number

Industrial 32/F SK Building No. 6

Securities Co. Jianguomen Waidajie / Zhang HuifangZhang Ning 010-50911203Ltd Chaoyang District Beijing

Centralized Business

21 Konka 01 Finance and Business

21 Konka 02

21 Konka 03 ZTF Securities

District Zone B Zhongtian

Co. Ltd. Exhibition City North / Qian Xi Cai Dan 0755-28777990Changling Road Guanshanhu

District Guiyang Guizhou

(North)

United Ratings No.2 Jianwai Street / Liu Qi 010-85679696

104Konka Group Co. Ltd. Annual Report 2022

Co. Ltd. Chaoyang District Beijing

Beijing 19-25/F Building 2 CP

Yingke Law Center Yard 20 Jinhe East Zhang Jinxing

Firm Road Chaoyang District

/ Han Jian 0755-36866600

Beijing

Ruihua

Certified

Public 4/F Building 2 Yard 16

Accountants Xisihuan Middle Road Liu Guibin Liu Guibin 010-88219191

(Special Haidian District Beijing

General

Partnership)

Shinewing

Certified

Public 8/F Block A Fu Hua

Accountants Mansion No. 8 Liu Jianhua Tang Liu Jianhua Tang

(Special Chaoyangmen Beidajie Qimei Qimei

028-62922886

General Dongcheng District Beijing

Partnership)

Industrial 32/F SK Building No. 6

Securities Co. Jianguomen Waidajie / Zhang Huifang 010-50911203

Ltd Chaoyang District Beijing Zhang Ning

Centralized Business

Finance and Business

ZTF Securities District Zone B Zhongtian

Co. Ltd. Exhibition City North / Qian Xi Cai Dan 0755-28777990Changling Road Guanshanhu

District Guiyang Guizhou

(North)

United Ratings No.2 Jianwai Street

22 Konka 01 Co. Ltd. Chaoyang District Beijing / Liu Qi 010-85679696

Beijing 19-25/F Building 2 CP

Yingke Law Center Yard 20 Jinhe East Zhang Jinxing

Firm Road Chaoyang District

/ Han Jian 0755-36866600

Beijing

Shinewing

Certified

Public 8/F Block A Fu Hua

Guo Dongchao

Accountants Mansion No. 8

Liu Lihong Zhan

Miaoling Liu Liu Jianhua Tang 028-62922886

(Special Chaoyangmen Beidajie Qimei

General Dongcheng District Beijing

Jianhua Tang

Qimei

Partnership)

Industrial 32/F SK Building No. 6

Securities Co. Jianguomen Waidajie / Zhang Huifang 010-50911203

Ltd Chaoyang District Beijing Zhang Ning

Centralized Business

Finance and Business

ZTF Securities District Zone B Zhongtian

Co. Ltd. Exhibition City North / Qian Xi 0755-28777990Changling Road Guanshanhu

District Guiyang Guizhou

22 Konka 03 (North)

22 Konka 05

Beijing 19-25/F Building 2 CP

Yingke Law Center Yard 20 Jinhe East Zhang Jinxing

Firm Road Chaoyang District

/ Han Jian 0755-36866600

Beijing

Shinewing

8/F Block A Fu Hua Guo DongchaoCertified Liu Lihong Zhan

Public Mansion No. 8 Liu Jianhua Tang

Accountants Chaoyangmen Beidajie

Miaoling Liu 020-28309500

Dongcheng District Beijing Jianhua Tang

Qimei

(Special Qimei

General

105Konka Group Co. Ltd. Annual Report 2022

Partnership)

4. List of the Usage of the Raised Funds

Unit: RMB

Whether is

consistent with

Rectification of

Operation of the usage using

raised funds for

Unused special account plan and other

Bonds Total amount Amount spent violation

amount for raised funds agreements

operation (if

(if any) stipulated in the

any)

raising

specification

21 Konka 1000000000.00 1000000000.00 0

01

21 Konka 500000000.00 500000000.00 0

02

21 Konka 800000000.00 800000000.00 0

03

Yes

22 Konka 1200000000.00 1200000000.00 0

01

22 Konka 600000000.00 600000000.00 0

03

22 Konka 600000000.00 600000000.00 0

05

The raised funds were used for project construction

□ Applicable √ Not applicable

The Company changed the usage of above funds raised from bonds during the Reporting Period.□ Applicable √ Not applicable

5. Adjustment of Credit Rating Results during the Reporting Period

□Applicable √ Not applicable

6. Execution and Changes of Guarantee Repayment Plan and Other Repayment Guarantee

Measures as well as Influence on Equity of Bond Investors during the Reporting Period

√ Applicable □ Not applicable

OCT Group provides full unconditional and irrevocable joint liability guarantee for "21 Konka

01" "21 Konka 02" "21 Konka 03" “22 Konka 01” “22 Konka 03” and “22 Konka 05”. The

Credit Enhancement Mechanisms Redemption Plans and Other Redemption Security Measures

during the Reporting Period are executed according to agreement. No change occurred.III Debt Financing Instruments of Non-financial Enterprises

□Applicable √ Not applicable

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

106Konka Group Co. Ltd. Annual Report 2022

Impact on the company's

Item Details of loss Reason for loss production operation and

solvency

The Company will base on its

main business adhere to the

1. In 2022 while the scale of the consumer electronics

platform professional operation

business declined the gross profit of the Company's

implement lean management

consumer electronics business declined significantly and

advocate long-term value focus

incurred a certain amount of loss due to factors such as

on efficiency improvement

fluctuations in raw material prices increasingly fierce market

continue to promote cost

competition continued low average retail prices of consumer

reduction and efficiency cost

electronics products and rising shipping costs. 2. In 2022 the

control and efficiency and

Company's semiconductor business continued to grow in

During the continue to optimize the

R&D investment but as it was still in the small-volume

Reporting industrial structure. For the

industrialization stage it was not able to achieve the

Period the consumer electronics business

corresponding revenue and profit in 2022 which affected the

Company's net the Company will continue to

overall earnings performance of the Company. 3. In 2022 in

profit loss promote the reform and upgrade

Net profit order to effectively revitalize the assets and further focus on

attributable to of the color TV business and

attributabl the main business the Company took the initiative to divest

shareholders of expand and strengthen the white

e to and liquidate the assets that are not strong enough to

listed TV business so as to achieve a

sharehold contribute to the development of the main business and make

companies was balance point in the sustainable

ers of low contribution to the expansion of the industrial chain and

RMB1.471 development of the core

listed based on the principle of prudence the Company recorded

billion consumer electronics business

companies credit and asset impairment on some of the receivables and

accounting for in the restructuring and enhance

inventory that may be impaired. The Company made

14.42% of the the market voice industry status

impairment provisions of RMB1245 million for assets such

net assets at the and premium level. For the

as accounts receivable and inventories resulting in a decline

end of the semiconductor business the

in profitability. 4. Due to the macroeconomic environment

previous year. Company will focus on core

the Company proactively contracted its industrial park and

semiconductor technology

investment business in 2022 resulting in a significant decline

breakthroughs accelerate the

in related earnings. RMB4047 million of gain or loss on

pace of semiconductor

disposal of non-current assets was incurred in 2021 due to

industrialization and enhance

the disposal of equity interests in some of the Company's

market effectiveness. The loss

subsidiaries. The gain or loss on disposal of non-current

for the reporting period will not

assets in 2022 was RMB755 million with a decrease of

affect the normal production

81.33% year-on-year.

and operation of the Company

and the repayment of debts due.VI Matured Interest-bearing Debt excluding Bonds up the Period-end

□Applicable √ Not applicable

VII Whether there was any Violation of Rules and Regulations during the Reporting Period

□ Yes √ No

VIII The Major Accounting Data and the Financial Indicators of the Recent 2 Years of the

Company up the Period-end

Unit: RMB’0000

Item 31 December 2022 31 December 2021 Increase/decrease

Current ratio 118.17% 88.92% 32.89%

Asset-liability ratio 77.74% 74.42% 3.32%

Quick ratio 88.59% 71.36% 24.15%

2022 2021 Increase/decrease

Net profit after deducting

non-recurring profit or loss -266555.04 -325079.81 18.00%

107Konka Group Co. Ltd. Annual Report 2022

Debt/EBITDA ratio -3.45% 13.59% -17.04%

Times interest earned -1.99 2.38 -183.61%

Times interest earned of cash 0.42 2.33 -81.97%

Times interest earned of

EBITDA -1.12 2.97 -137.71%

Loan repayment rate 100.00% 100.00% 0.00%

Interest coverage 100.00% 100.00% 0.00%

108Konka Group Co. Ltd. Annual Report 2022

Part X Financial Statements

I Independent Auditor’s Report

Type of the independent auditor’s opinion Unmodified unqualified opinion

Date of signing this report 24 March 2023

Name of the independent auditor ShineWing Certified Public Accountants (Special GeneralPartnership)

Reference number of audit report XYZH//2023GZAA7B0025

Name of the certified public accountants Tang Qimei Liu Lihong

Independent Auditor’s Report

XYZH//2023GZAA7B0025

All shareholders of Konka Group Co. Ltd.：

I. OpinionWe have audited the accompanying financial statements of Konka Group Co. Ltd. (the “KonkaGroup”) which comprise the Company’s and consolidated balance sheets of the parent company as

at 31 December 2022 the Company’s and consolidated income statements of the parent company

the Company’s and consolidated cash flow statements of the parent company the Company’s and

consolidated statements of changes in shareholders’ equity of the parent company for the year then

ended as well as the notes to the financial statements.In our opinion the financial statements attached were prepared in line with the regulations of

Accounting Standards for Business Enterprises in all significant aspects which gave a true and fair

view of the consolidated and parent financial position of the Company as at 31 December 2022 and

the consolidated and parent business performance and cash flow of the Company for 2022.II. Basis for Opinion

We conducted our audit in accordance with Standards on Auditing for Certified Public Accountants.Our responsibilities under those standards are further described in the Auditor’s Responsibilities for

the Audit of the Financial Statements section of our report. In accordance with professional ethics

for certified public accountants we are independent with Foshan Huaxin Packing Co. Ltd. and we

have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for our opinion.III. Key Audit Matters

Key audit matters are those matters that in our professional judgment were of most significance

in our audit of the financial statements of the Current Period. These matters were addressed in the

context of our audit of the financial statements as a whole and in forming our opinion thereon

and we do not provide a separate opinion on these matters.

109Konka Group Co. Ltd. Annual Report 2022

1. Recognition of operating revenues

Key audit matters Countermeasures of audit

Please refer to the notes to the (1) Evaluate and test income to confirm the effectiveness of key internal

financial statements "six notes to the control design and operation;

consolidated financial statements" 47. (2) Obtain signed sales contracts analyze relevant provisions and

In 2022 Konka Group's consolidated evaluate whether the revenue recognition of Konka Group is in

financial statements confirmed compliance with the Accounting Standards for Business Enterprises;

operating income of (3) Obtain the sales list of Konka Group products examine the

RMB29607.8543 million the mainly customers’ information registered with the industrial and commercial

revenue comes from the electronic administration inquire the relevant personnel of Konka Group and

business trading businessand identify whether any of the customers is a related party to Konka Group;

environmental protection business (4) Perform analytical procedures on revenue and costs evaluate the

environmental protection business rationality of sales revenue and gross profit margin changes;

etc. Due to the importance of revenue (5) Examine materials such as important sales contracts orders invoices

to the financial statements as a whole goods ownership transfer certificates bank receipts invoices; regarding

and the inherent misstatement risk of the industry trade business learn about trading backgrounds and business

management's manipulation of nature to decide whether Konka Group is the main responsibility entity

revenue recognition in order to or an agent; select important customers verify the transaction amounts

achieve specific goals or and balances in writing to verify the truthfulness completeness and

expectations we make revenue accuracy of revenue;

recognition a key audit matter. (6) Conduct a cut-off test on sales revenue.

2. Recognition of investment income

Key audit matters Countermeasures of audit

Please refer to the notes to the (1) Evaluate and test income to confirm the effectiveness of key internal

financial statements "six notes to the control design and operation;

consolidated financial statements"54. (2) Obtaining relevant decision-making documents for the disposal of the

In 2022 Konka Group's consolidated target company's equity as well as equity transfer agreements and

financial statements confirmed transaction documents conducting interviews with the company's

investment income of RMB936.0064 management and selected equity transferees to understand the

million Mainly for the disposal of commercial background and rationality of the equity transfer in order to

investment income generated by long- determine the authenticity of the equity transfer;

term equity investment the gains (3) Obtain Konka Group’s customer list examine the customers’

from the remeasurement of the information registered with the industrial and commercial administration

remaining equity at equity method on inquire the relevant personnel of Konka Group and identify whether any

the day of the loss of control rights at of the customers is a related party to Konka Group;

fair value. Since the amount of (4) Perform analytical procedures on revenue and costs evaluate the

investment income is significant we rationality of sales revenue and gross profit margin changes;

110Konka Group Co. Ltd. Annual Report 2022

1. Recognition of operating revenues

Key audit matters Countermeasures of audit

confirm the recognition of investment (5) Examine materials such as important sales contracts orders invoices

income as a key audit matter. goods ownership transfer certificates bank receipts invoices; regarding

the industry trade business learn about trading backgrounds and business

nature to decide whether Konka Group is the main responsibility entity

or an agent; select important customers verify the transaction amounts

and balances in writing to verify the truthfulness completeness and

accuracy of revenue; and

(6) Conduct a cut-off test on sales revenue.

IV. Other Information

The management of the Company is responsible for the other information. The other information

comprises all of the information included in the annual report for 2022 other than the financial

statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express

any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other

information and in doing so consider whether the other information is materially inconsistent with

the financial statements or our knowledge obtained in the audit or otherwise appears to be

materially misstated.If based on the work we have performed we conclude that there is a material misstatement of this

other information we are required to report that fact. We have nothing to report in this regard.V. Responsibility of Management and Those Charged with Governance for the Financial

Statements

The management of the Company is responsible for the preparation and fair presentation of these

financial statements in accordance with Accounting Standards for Business Enterprises to make

them a fair presentation and designing implementing and maintaining internal control relevant to

the preparation of financial statements that are free from material misstatement whether due to

fraud or error.In preparing the financial statements the management of the Company is responsible for assessing

the Company’s ability to continue as a going concern disclosing if applicable matters related to

going concern and using the going concern basis of accounting unless the management either

intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reporting

process.VI. CPA’s Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

111Konka Group Co. Ltd. Annual Report 2022

are free from material misstatement whether due to fraud or error and to issue an auditor’s report

that includes our opinion. We report our opinion solely to you as a body and for no other purpose.We do not assume responsibility towards or accept liability to any other person for the contents of

this report. Reasonable assurance is a high level of assurance but is not a guarantee that an audit

conducted in accordance with auditing standards will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are considered material if individually or in

the aggregate they could reasonably be expected to influence the economic decisions of users taken

on the basis of these financial statements.As part of an audit in accordance with auditing standards we exercise professional judgment and

maintain professional skepticism throughout the audit. We also:

(1) Identify and assess the risks of major misstatement of financial statements due to fraud or errors

design and implement audit procedures to deal with these risks and obtain sufficient and

appropriate audit evidence as the basis for issuing audit opinions. Since fraud may involve collusion

forgery intentional omissions misrepresentation or overriding internal control the risk of failing to

detect a major misstatement due to fraud is higher than the risk of failing to detect a major

misstatement due to error.

(2) Understand the internal control related to auditing in order to design appropriate auditing

procedures.

(3) Evaluate the appropriateness of management's selection of accounting policies and the

rationality of accounting estimates and related disclosures.

(4) To draw conclusions on the appropriateness of the management's use of continuous operation

assumptions. At the same time based on the audit evidence obtained a conclusion can be drawn on

whether there is a material uncertainty that may cause significant doubts about Konka Group's

ability to continue operations. If we conclude that there are significant uncertainties the auditing

standards require us to draw the attention of the users of the statements to the relevant disclosures in

the financial statements in the audit report; if the disclosures are insufficient we should issue a non-

reserved opinion. Our conclusion is based on the information available as of the date of the audit

report. However future events or circumstances may prevent Konka Group from continuing its

operations.

(5) Evaluate the overall presentation structure and content of the financial statements and evaluate

whether the financial statements fairly reflect related transactions and events.

(6) Obtain sufficient and appropriate audit evidence on the financial information of the entities or

business activities in Konka Group to express audit opinions on the financial statements. We are

responsible for guiding supervising and executing group audits and assume full responsibility for

audit opinions.We communicate with those charged with governance regarding among other matters the planned

112Konka Group Co. Ltd. Annual Report 2022

scope and timing of the audit and significant audit findings including any significant deficiencies in

internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with

relevant ethical requirements regarding independence and to communicate with them all

relationships and other matters that may reasonably be thought to bear on our independence and

related safeguards (if applicable).From the matters communicated with those charged with governance we determine those matters

that were of most significance in the audit of the financial statements of the Current Period and

are therefore the key audit matters. We describe these matters in our auditor’s report unless law or

regulation precludes public disclosure about the matter or when in extremely rare circumstances

we determine that a matter should not be communicated in our report because the adverse

consequences of doing so would reasonably be expected to outweigh the public interest benefits

of such communication.ShineWing Certified Public Accountants CPA: (Engagement Partner)

(Special General Partnership)

CPA:

Beijing·China 24 March 2023

113Konka Group Co. Ltd. Annual Report 2022

II Financial Statements

Currency unit for the financial statements and the notes thereto: RMB

1. Consolidated Balance Sheet

Prepared by Konka Group Co. Ltd.

31 December 2022

Unit: RMB

Item 31 December 2022 1 January 2022

Current assets:

Monetary assets 5988095490.71 6489553211.24

Settlement reserve

Interbank loans granted

Held-for-trading financial assets

Derivative financial assets

Notes receivable 1059737243.54 1777477481.28

Accounts receivable 2036734836.22 3397729481.07

Accounts receivable financing 237187228.44 71490688.54

Prepayments 389947652.39 631400953.86

Premiums receivable

Reinsurance receivables

Receivable reinsurance contract reserve

Other receivables 1442124845.58 1837459705.64

Including: Interest receivable 3878580.64 2573082.79

Dividends receivable 272999.43

Financial assets purchased under resale agreements

Inventories 4409767756.22 4068537809.18

Contract assets

Assets held for sale

Current portion of non-current assets 14630000.00 28105523.78

Other current assets 2038841225.83 2299963391.24

Total current assets 17617066278.93 20601718245.83

Non-current assets:

Loans and advances to customers

Investments in debt obligations

Investments in other debt obligations

Long-term receivables 800400.00 18495499.14

Long-term equity investments 6351232955.58 5902588939.51

Investments in other equity instruments 23841337.16 23841337.16

Other non-current financial assets 2639662273.32 2293361603.68

Investment property 802407844.60 776525061.54

Fixed assets 4114029693.38 4010295277.14

Construction in progress 1990361377.07 1490777831.39

Productive living assets

Oil and gas assets

Right-of-use assets 50019838.68 71210415.37

Intangible assets 1116739707.27 975295916.08

Development costs 16870310.70

Goodwill 22196735.11 22196735.11

Long-term prepaid expense 387309503.07 297497383.39

Deferred income tax assets 1190454750.62 725315725.10

Other non-current assets 1710245378.26 2648530490.12

Total non-current assets 20399301794.12 19272802525.43

114Konka Group Co. Ltd. Annual Report 2022

Total assets 38016368073.05 39874520771.26

Current liabilities:

Short-term borrowings 7579559304.97 9920675121.08

Borrowings from the central bank

Interbank loans obtained

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable 1054573822.04 1116336958.91

Accounts payable 2659946562.93 3784315091.41

Advances from customers 825.69

Contract liabilities 601044358.35 652910408.02

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 348608204.05 410747084.80

Taxes payable 291102679.36 295825170.41

Other payables 1895711373.34 1788177748.59

Including: Interest payable 29590464.00 174383177.08

Dividends payable

Handling charges and commissions payable

Reinsurance payables

Liabilities directly associated with assets held for sale

Current portion of non-current liabilities 409220030.69 5089586269.32

Other current liabilities 68449783.71 109742188.24

Total current liabilities 14908216945.13 23168316040.78

Non-current liabilities:

Insurance contract reserve

Long-term borrowings 8906931402.89 3529140539.09

Bonds payable 4792392044.13 2293698899.30

Including: Preferred shares

Perpetual bonds

Lease liabilities 36586639.16 42532869.63

Long-term payables 7964127.18 140687570.78

Long-term employee benefits payable 4894209.73 5111296.75

Provisions 159395579.55 106276535.85

Deferred income 334844966.31 206302424.92

Deferred income tax liabilities 89535936.97 76894581.97

Other non-current liabilities 314233260.08 104610663.76

Total non-current liabilities 14646778166.00 6505255382.05

Total liabilities 29554995111.13 29673571422.83

Owners’ equity:

Share capital 2407945408.00 2407945408.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 365247361.05 234389963.10

Less: Treasury stock

Other comprehensive income -14265181.63 -20336087.87

Specific reserve

Surplus reserves 1244180364.24 1244180364.24

General reserve

Retained earnings 3637291770.33 5229098788.94

Total equity attributable to owners of the Company as

the parent 7640399721.99 9095278436.41

Non-controlling interests 820973239.93 1105670912.02

Total owners’ equity 8461372961.92 10200949348.43

115Konka Group Co. Ltd. Annual Report 2022

Total liabilities and owners’ equity 38016368073.05 39874520771.26

Legal representative: Zhou Bin CFO: Li Chunlei Head of the financial department: Ping Heng

2. Balance Sheet of the Company as the Parent

Unit: RMB

Item 31 December 2022 1 January 2022

Current assets:

Monetary assets 3987295740.42 4809203282.52

Held-for-trading financial assets

Derivative financial assets

Notes receivable 353764106.66 912584879.70

Accounts receivable 4473878994.50 4468684877.11

Accounts receivable financing 6250000.00

Prepayments 2105477988.44 1617640913.05

Other receivables 10342326355.05 10925066231.53

Including: Interest receivable 3878580.64 2002526.91

Dividends receivable 393563347.61 383943256.80

Inventories 173658748.80 192035723.31

Contract assets

Assets held for sale

Current portion of non-current assets

Other current assets 1581440821.79 1736172492.35

Total current assets 23017842755.66 24667638399.57

Non-current assets:

Investments in debt obligations

Investments in other debt obligations

Long-term receivables

Long-term equity investments 9100689137.42 8633142223.64

Investments in other equity instruments 17940215.36 17940215.36

Other non-current financial assets 396353137.96 200326093.02

Investment property 439835051.61 455475442.43

Fixed assets 418021638.28 398611899.13

Construction in progress 481659536.66 304489347.00

Productive living assets

Oil and gas assets

Right-of-use assets 1341125.40 4023376.21

Intangible assets 65620126.31 55814854.54

Development costs

Goodwill

Long-term prepaid expense 36665581.09 31718868.00

Deferred income tax assets 1127531647.49 711814124.48

Other non-current assets 458931.60

Total non-current assets 12086116129.18 10813356443.81

Total assets 35103958884.84 35480994843.38

Current liabilities:

Short-term borrowings 2217049472.22 4259749597.92

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable 890526510.04 1126421923.99

Accounts payable 6918579963.57 8297778584.91

Advances from customers

Contract liabilities 2445363632.98 740817658.30

Employee benefits payable 90137022.47 128148938.08

Taxes payable 4095684.11 8022098.02

116Konka Group Co. Ltd. Annual Report 2022

Other payables 3941891644.62 4155006946.60

Including: Interest payable 29271307.22 171516416.71

Dividends payable

Liabilities directly associated with assets held for sale

Current portion of non-current liabilities 151933839.55 4715415917.78

Other current liabilities 7129729.38 11124209.72

Total current liabilities 16666707498.94 23442485875.32

Non-current liabilities:

Long-term borrowings 8261287052.44 3161298604.12

Bonds payable 4792392044.13 2293698899.30

Including: Preferred shares

Perpetual bonds

Lease liabilities 1664232.11

Long-term payables

Long-term employee benefits payable

Provisions 83666032.25 572097.48

Deferred income 43377324.62 36243964.61

Deferred income tax liabilities

Other non-current liabilities 42948698.55 43677187.49

Total non-current liabilities 13223671151.99 5537154985.11

Total liabilities 29890378650.93 28979640860.43

Owners’ equity:

Share capital 2407945408.00 2407945408.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 241044390.55 110696992.60

Less: Treasury stock

Other comprehensive income -1500000.00 -1500000.00

Specific reserve

Surplus reserves 1260024039.76 1260024039.76

Retained earnings 1306066395.60 2724187542.59

Total owners’ equity 5213580233.91 6501353982.95

Total liabilities and owners’ equity 35103958884.84 35480994843.38

3. Consolidated Income Statement

Unit: RMB

Item 2022 2021

1. Revenue 29607854255.27 49106513669.58

Including: Operating revenue 29607854255.27 49106513669.58

Interest revenue

Insurance premium income

Handling charge and commission income

2. Costs and expenses 32164076308.01 51466453430.94

Including: Cost of sales 28788638393.88 47401884981.53

Interest costs

Handling charge and commission expense

Surrenders

Net insurance claims paid

Net amount provided as insurance contract reserve

Expenditure on policy dividends

Reinsurance premium expense

Taxes and surcharges 119339820.01 107078675.16

Selling expense 1240144735.77 1428062895.37

117Konka Group Co. Ltd. Annual Report 2022

Administrative expense 949647590.28 960449117.12

R&D expense 543882024.89 616335488.01

Finance costs 522423743.18 952642273.75

Including: Interest expense 913721408.10 1003080641.99

Interest income 237115652.09 169492982.89

Add: Other income 928712500.81 1353534580.11

Return on investment (“-” for loss) 936006397.44 4216806949.38

Including: Share of profit or loss of joint ventures and

associates 123392731.97 78926555.74

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) -40731333.54 52490907.33

Credit impairment loss (“-” for loss) -949885019.53 -1107273681.31

Asset impairment loss (“-” for loss) -295395852.33 -643102386.02

Asset disposal income (“-” for loss) 9580708.29 571964.16

3. Operating profit (“-” for loss) -1967934651.60 1513088572.29

Add: Non-operating income 125139042.00 82601532.35

Less: Non-operating expense 224724245.84 24444724.35

4. Profit before tax (“-” for loss) -2067519855.44 1571245380.29

Less: Income tax expense -297356565.55 764544554.19

5. Net profit (“-” for net loss) -1770163289.89 806700826.10

5.1 By operating continuity

5.1.1 Net profit from continuing operations (“-” for

net loss) -1770163289.89 806700826.10

5.1.2 Net profit from discontinued operations (“-”

for net loss)

5.2 By ownership

5.2.1 Net profit attributable to shareholders of the

Company as the parent -1471409748.21 905352997.68

5.2.1 Net profit attributable to non-controlling interests -298753541.68 -98652171.58

6. Other comprehensive income net of tax 7669161.80 -6210784.44

Attributable to owners of the Company as the parent 6070906.24 -3753045.45

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 6070906.24 -3753045.45

6.2.1 Other comprehensive income that will be

reclassified to profit or loss under the equity method -2814803.62 1182217.31

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-denominated financial statements 8885709.86 -4935262.76

6.2.7 Other

Attributable to non-controlling interests 1598255.56 -2457738.99

7. Total comprehensive income -1762494128.09 800490041.66

Attributable to owners of the Company as the parent -1465338841.97 901599952.23

Attributable to non-controlling interests -297155286.12 -101109910.57

118Konka Group Co. Ltd. Annual Report 2022

8. Earnings per share

8.1 Basic earnings per share -0.6111 0.3760

8.2 Diluted earnings per share -0.6111 0.3760

Legal representative: Zhou Bin CFO: Li Chunlei Head of the financial department: Ping Heng

4. Income Statement of the Company as the Parent

Unit: RMB

Item 2022 2021

1. Operating revenue 1811783519.02 2866801648.83

Less: Cost of sales 1962490364.97 2801504839.24

Taxes and surcharges 15338452.88 12498811.40

Selling expense 366876186.97 424186040.12

Administrative expense 336016963.92 382489529.42

R&D expense 72787542.14 97574600.53

Finance costs 285666822.84 483733481.27

Including: Interest costs 819229878.82 839889878.68

Interest revenue 353261761.47 452535196.29

Add: Other income 54121427.81 39245757.36

Return on investment (“-” for loss) 538946392.20 3464665015.66

Including: Share of profit or loss of joint ventures and

associates 138908805.41 94791865.50

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) -44886112.74 -12011365.31

Credit impairment loss (“-” for loss) -711816020.43 -1004145022.47

Asset impairment loss (“-” for loss) -355291000.36 -556453134.90

Asset disposal income (“-” for loss) 6034182.85

2. Operating profit (“-” for loss) -1740283945.37 596115597.19

Add: Non-operating income 91504267.54 13373472.37

Less: Non-operating expense 64661744.87 18967155.53

3. Profit before tax (“-” for loss) -1713441422.70 590521914.03

Less: Income tax expense -415717523.01 265929368.36

4. Net profit (“-” for net loss) -1297723899.69 324592545.67

4.1 Net profit from continuing operations (“-” for net

loss) -1297723899.69 324592545.67

4.2 Net profit from discontinued operations (“-” for

net loss)

5. Other comprehensive income net of tax 1182217.31

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

119Konka Group Co. Ltd. Annual Report 2022

5.2 Items that will be reclassified to profit or loss 1182217.31

5.2.1 Other comprehensive income that will be

reclassified to profit or loss under the equity method 1182217.31

5.2.2 Changes in the fair value of investments in other

debt obligations

5.2.3 Other comprehensive income arising from the

reclassification of financial assets

5.2.4 Credit impairment allowance for investments in

other debt obligations

5.2.5 Reserve for cash flow hedges

5.2.6 Differences arising from the translation of foreign

currency-denominated financial statements

5.2.7 Other

6. Total comprehensive income -1297723899.69 325774762.98

7. Earnings per share

7.1 Basic earnings per share

7.2 Diluted earnings per share

5. Consolidated Cash Flow Statement

Unit: RMB

Item 2022 2021

1. Cash flows from operating activities:

Proceeds from sale of commodities and rendering of

services 31247109491.35 49515088981.33

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 622846091.66 419652399.70

Cash generated from other operating activities 1597087027.13 2016982305.72

Subtotal of cash generated from operating activities 33467042610.14 51951723686.75

Payments for commodities and services 29639887809.19 46186429808.61

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 1800638478.78 1952798829.91

Taxes paid 585416375.42 862563882.08

Cash used in other operating activities 1969402988.58 2141174772.04

Subtotal of cash used in operating activities 33995345651.97 51142967292.64

Net cash generated from/used in operating activities -528303041.83 808756394.11

2. Cash flows from investing activities:

Proceeds from disinvestment 875506214.56 711179541.54

120Konka Group Co. Ltd. Annual Report 2022

Return on investment 128778266.85 98795653.56

Net proceeds from the disposal of fixed assets

intangible assets and other long-lived assets 9239243.90 235061583.74

Net proceeds from the disposal of subsidiaries and

other business units 297094350.04 2569725512.90

Cash generated from other investing activities 3988535308.42 2388474099.33

Subtotal of cash generated from investing activities 5299153383.77 6003236391.07

Payments for the acquisition of fixed assets intangible

assets and other long-lived assets 3613087559.62 6639941735.82

Payments for investments 877816559.18 841389150.64

Net increase in pledged loans granted

Net payments for the acquisition of subsidiaries and

other business units 96500200.00

Cash used in other investing activities 482014454.76 1110357931.34

Subtotal of cash used in investing activities 4972918573.56 8688189017.80

Net cash generated from/used in investing activities 326234810.21 -2684952626.73

3. Cash flows from financing activities:

Capital contributions received 87895628.12 149069787.60

Including: Capital contributions by non-controlling

interests to subsidiaries 87895628.12 149069787.60

Borrowings raised 20760552594.08 23661013892.77

Cash generated from other financing activities 525285976.82 1019124723.01

Subtotal of cash generated from financing activities 21373734199.02 24829208403.38

Repayment of borrowings 19821101947.09 19372566049.47

Interest and dividends paid 1025755719.07 963157376.97

Including: Dividends paid by subsidiaries to non-

controlling interests 110680000.00 49620733.43

Cash used in other financing activities 859164470.60 928627586.95

Subtotal of cash used in financing activities 21706022136.76 21264351013.39

Net cash generated from/used in financing activities -332287937.74 3564857389.99

4. Effect of foreign exchange rates changes on cash

and cash equivalents 27920961.23 -18370051.58

5. Net increase in cash and cash equivalents -506435208.13 1670291105.79

Add: Cash and cash equivalents beginning of the

period 5968347219.03 4298056113.24

6. Cash and cash equivalents end of the period 5461912010.90 5968347219.03

6. Cash Flow Statement of the Company as the Parent

Unit: RMB

Item 2022 2021

1. Cash flows from operating activities:

Proceeds from sale of commodities and rendering of

services 7297996873.73 5382231744.24

Tax rebates 230063490.93 146315048.47

Cash generated from other operating activities 372486582.46 354644830.80

Subtotal of cash generated from operating activities 7900546947.12 5883191623.51

Payments for commodities and services 7900208310.15 4801085160.78

Cash paid to and for employees 312957158.05 305846589.21

Taxes paid 44490340.42 17618283.94

Cash used in other operating activities 927360896.15 1090364534.12

Subtotal of cash used in operating activities 9185016704.77 6214914568.05

Net cash generated from/used in operating activities -1284469757.65 -331722944.54

2. Cash flows from investing activities:

Proceeds from disinvestment 572941738.40 3791610018.69

Return on investment 70285307.27 416108161.42

Net proceeds from the disposal of fixed assets

intangible assets and other long-lived assets 66770.14 250499.51

121Konka Group Co. Ltd. Annual Report 2022

Net proceeds from the disposal of subsidiaries and

other business units

Cash generated from other investing activities 6707788692.79 5806654263.21

Subtotal of cash generated from investing activities 7351082508.60 10014622942.83

Payments for the acquisition of fixed assets intangible

assets and other long-lived assets 219097737.67 193906338.75

Payments for investments 896121280.49 516428500.00

Net payments for the acquisition of subsidiaries and

other business units

Cash used in other investing activities 6311902161.21 8187892613.35

Subtotal of cash used in investing activities 7427121179.37 8898227452.10

Net cash generated from/used in investing activities -76038670.77 1116395490.73

3. Cash flows from financing activities:

Capital contributions received

Borrowings raised 17271455216.03 16431809395.06

Cash generated from other financing activities 15043752843.76 12359266361.42

Subtotal of cash generated from financing activities 32315208059.79 28791075756.48

Repayment of borrowings 15948765699.19 15084306762.28

Interest and dividends paid 814951365.94 782072702.29

Cash used in other financing activities 15040575205.97 11934250317.89

Subtotal of cash used in financing activities 31804292271.10 27800629782.46

Net cash generated from/used in financing activities 510915788.69 990445974.02

4. Effect of foreign exchange rates changes on cash

and cash equivalents 597369.19 -3272298.44

5. Net increase in cash and cash equivalents -848995270.54 1771846221.77

Add: Cash and cash equivalents beginning of the

period 4682608814.76 2910762592.99

6. Cash and cash equivalents end of the period 3833613544.22 4682608814.76

122Konka Group Co. Ltd. Annual Report 2022

7. Consolidated Statements of Changes in Owners’ Equity

2022

Unit: RMB

2022

Equity attributable to owners of the Company as the parent

Other equity

instruments O

Item O Less: Spec Gen t

Share capital Prefe Perpet t Capital Trea

Other

comprehensive ific eral h

Non-controlling Total owners’

rred ual h reserves sury income reser

Surplus reserves reser Retained earnings e Subtotal interests equity

share

s bonds e

stock ve ve r

r

1. Balance as at the end of the

prior year 2407945408.00 234389963.10 -20336087.87 1244180364.24 5229098788.94 9095278436.41 1105670912.02 10200949348.43

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 year 2407945408.00 234389963.10 -20336087.87 1244180364.24 5229098788.94 9095278436.41 1105670912.02 10200949348.43

3. Increase/ decrease in the

period (“-” for decrease) 130857397.95 6070906.24 -1591807018.61 -1454878714.42 -284697672.09 -1739576386.51

3.1 Total comprehensive

income 6070906.24 -1471409748.21 -1465338841.97 -297155286.12 -1762494128.09

3.2 Capital increased and

reduced by owners 130857397.95 130857397.95 123636214.83 254493612.78

3.2.1 Ordinary shares increased

by owners 87895628.12 87895628.12

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 130857397.95 130857397.95 35740586.71 166597984.66

3.3 Profit distribution -120397270.40 -120397270.40 -110680000.00 -231077270.40

3.3.1 Appropriation to

surplus reserves

3.3.2 Appropriation to

general reserve

3.3.3 Appropriation to

owners (or shareholders) -120397270.40 -120397270.40 -110680000.00 -231077270.40

3.3.4 Other

3.4 Transfers within owners’

equity

3.4.1 Increase in capital (or

share capital) from capital

reserves

123Konka Group Co. Ltd. Annual Report 2022

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 -498600.80 -498600.80

4. Balance as at the end of the

period 2407945408.00 365247361.05 -14265181.63 1244180364.24 3637291770.33 7640399721.99 820973239.93 8461372961.92

2021

Unit: RMB

2021

Equity attributable to owners of the Company as the parent

Other equity

instruments O

Item Per Less: Other Spec Gen t Non-controlling Total owners’

Share capital Preferred petu O Capital reserves

Treas

ury comprehensive

ific

reser Surplus reserves

eral Retained h

reser earnings e Subtotal interests equity

share al th incomebon er stock ve ve rs ds

1. Balance as at the end of the

prior year 2407945408.00 230185310.09 -16583042.42 1211721109.67 4595371391.63 8428640176.97 2292254947.67 10720895124.64

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 year 2407945408.00 230185310.09 -16583042.42 1211721109.67 4595371391.63 8428640176.97 2292254947.67 10720895124.64

3. Increase/ decrease in the

period (“-” for decrease) 4204653.01 -3753045.45 32459254.57 633727397.31 666638259.44 -1186584035.65 -519945776.21

3.1 Total comprehensive

income -3753045.45 905352997.68 901599952.23 -101109910.57 800490041.66

3.2 Capital increased and

reduced by owners 4204653.01 4204653.01 -1015079437.90 -1010874784.89

3.2.1 Ordinary shares

increased by owners 79947914.99 79947914.99

3.2.2 Capital increased by

holders of other equity

instruments

124Konka Group Co. Ltd. Annual Report 2022

3.2.3 Share-based payments

included in owners’ equity

3.2.4 Other 4204653.01 4204653.01 -1095027352.89 -1090822699.88

3.3 Profit distribution 32459254.57 -273253795.37 -240794540.80 -42123733.44 -282918274.24

3.3.1 Appropriation to

surplus reserves 32459254.57 -32459254.57

3.3.2 Appropriation to

general reserve

3.3.3 Appropriation to

owners (or shareholders) -240794540.80 -240794540.80 -42123733.44 -282918274.24

3.3.4 Other

3.4 Transfers within owners’

equity -28270953.74 -28270953.74

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 -28270953.74 -28270953.74

3.5 Specific reserve

3.5.1 Increase in the period

3.5.2 Used in the period

3.6 Other 1628195.00 1628195.00 1628195.00

4. Balance as at the end of the

period 2407945408.00 234389963.10 -20336087.87 1244180364.24 5229098788.94 9095278436.41 1105670912.02 10200949348.43

8. Statements of Changes in Owners’ Equity of the Company as the Parent

2022

Unit: RMB

2022

Other equity instruments O

t

Item Share capital Preferr Perpetu

Less: Other Specific h

ed al Other Capital reserves Treasury comprehensive reserve Surplus reserves Retained earnings e Total owners’ equity

shares bonds stock income r

1. Balance as at the end of the prior year 2407945408.00 110696992.60 -1500000.00 1260024039.76 2724187542.59 6501353982.95

Add: Adjustment for change in accounting

policy

125Konka Group Co. Ltd. Annual Report 2022

Adjustment for correction of previous

error

Other adjustments 23.10 23.10

2. Balance as at the beginning of the year 2407945408.00 110696992.60 -1500000.00 1260024039.76 2724187565.69 6501354006.05

3. Increase/ decrease in the period (“-” for

decrease) 130347397.95 -1418121170.09 -1287773772.14

3.1 Total comprehensive income -1297723899.69 -1297723899.69

3.2 Capital increased and reduced by

owners 130347397.95 130347397.95

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 130347397.95 130347397.95

3.3 Profit distribution -120397270.40 -120397270.40

3.3.1 Appropriation to surplus reserves

3.3.2 Appropriation to owners (or

shareholders) -120397270.40 -120397270.40

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 period 2407945408.00 241044390.55 -1500000.00 1260024039.76 1306066395.60 5213580233.91

2021

Unit: RMB

2021

Other equity instruments O

Item Less: Other

t

Share capital Preferre Perpetual Other Capital reserves Treasury comprehensive

Specific

reserve Surplus reserves Retained earnings

h Total owners’ equity

d shares bonds stock income

e

r

1. Balance as at the end of the prior year 2407945408.00 112570352.72 -2682217.31 1227564785.19 2352385005.09 6097783333.69

Add: Adjustment for change in

accounting policy

Adjustment for correction of previous

error

Other adjustments 320463787.20 320463787.20

126Konka Group Co. Ltd. Annual Report 2022

2. Balance as at the beginning of the year 2407945408.00 112570352.72 -2682217.31 1227564785.19 2672848792.29 6418247120.89

3. Increase/ decrease in the period (“-”

for decrease) -1873360.12 1182217.31 32459254.57 51338750.30 83106862.06

3.1 Total comprehensive income 1182217.31 324592545.67 325774762.98

3.2 Capital increased and reduced by

owners -1873360.12 -1873360.12

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 -1873360.12 -1873360.12

3.3 Profit distribution 32459254.57 -273253795.37 -240794540.80

3.3.1 Appropriation to surplus reserves 32459254.57 -32459254.57

3.3.2 Appropriation to owners (or

shareholders) -240794540.80 -240794540.80

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 period 2407945408.00 110696992.60 -1500000.00 1260024039.76 2724187542.59 6501353982.95

127Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

I. Company Profile

1. Establishment

Konka Group Co. Ltd. (hereinafter referred to as the Company and the “Group” when including

subsidiaries) is a joint-stock limited company reorganized from the former Shenzhen Konka

Electronic Co. Ltd. in August 1991 upon approval of the People’s Government of Shenzhen

Municipality and has its ordinary shares (A-share and B-share) listed on Shenzhen Stock

Exchange with prior consent from the People’s Bank of China Shenzhen Special Economic Zone

Branch. On 29 August 1995 the Company was renamed to “Konka Group Co. Ltd.” (Credibility

code: 914403006188155783) with its main business electronic industry. And now the

headquarters locates in No. 28 of No. 12 of Keji South Rd. Science & Technology Park Yuehai

Street Nanshan District Shenzhen Guangdong Province.

2. Share capital

After the distribution of bonus shares allotments increased share capital and new shares issued

over the years as of 31 December 2022 the Company has issued a total of 2407945408.00

shares (denomination of RMB1 per share) with a registered capital of RMB2407945408.00.

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 24 March 2023.II. Consolidation scope

The Company has a total of 127 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 20 entities including Jiangxi Konka High-tech Park Operation and

Management Co. Ltd. Shangrao Konka Electronic Technology Innovation Co. Ltd. and Konka

Photovoltaic Technology Co. Ltd. due to incorporation or acquisition and decreased by 13

households including Xi'an Huasheng Jiacheng Real Estate Co. Ltd. and Hefei KONSEMI

Storage Technology 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

128Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

No. Corporate name Abbreviation

1 Shenzhen Konka Electronics Technology Co. Ltd. Electronics Technology

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

12 Chuzhou Konka Precision Intelligent Manufacturing Chuzhou Konka

Technology Co. 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

17 Suining Konka Flexible Electronic Technology Co. Ltd. Konka Flexible Electronic

18 Suining Konka Hongye Electronics Co. Ltd. Konka Hongye Electronics

19 Boluo Konka Precision Technology Co. Ltd. Boluo Precision

20 Boluo Konka PCB Co. Ltd. Boluo Konka

21 Anhui Konka Tongchuang Electrical Appliances Co. Ltd. Anhui Tongchuang

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 Frestec Household

Henan Frestec Household Appliances Co. Ltd.Appliances

27 Henan Frestec Smart Home Technology Co. Ltd. Frestec Smart Home

129Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

No. Corporate name Abbreviation

28 Shenzhen Konka Investment Holdings Co. Ltd. Konka Investment

29 Yibin Konka Technology

Yibin Konka Technology Park Operation Co. Ltd.Park

30 Shenzhen Konka Capital Equity Investment Management

Konka Capital

Co. Ltd.

31 Konka Suiyong Investment (Shenzhen) Co. Ltd. Konka Suiyong

32 Shenzhen Konka Shengxing Industrial Co. Ltd. Shengxing 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

Suining Konka Industrial Park Development Co. Ltd.Park

38 Suining Konka Electronic Technological Innovation Co. Suining Electronic

Ltd. Technological 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.

Mobile Interconnection

Ltd.

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.Konka Xinyun

Ltd. Semiconductor

51 Konka Industrial and Trade Technology (Shenzhen) Co. Industrial and Trade

130Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

No. Corporate name Abbreviation

Ltd. 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

55 Shenzhen Chuangzhi

Shenzhen Konka Chuangzhi Electrical Appliances Co. Ltd.Electrical Appliances

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. TelecommunicationTechnology

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

63 Chongqing Optoelectronic

Chongqing Konka Optoelectronic Technology Research

Technology Research

Institute Co. Ltd.Institute

64 Yibin Kangrun Environmental Technology Co. Ltd. Yibin Kangrun

65 Yibin Kangrun Medical Waste Centralized Treatment Co.Yibin Kangrun Medical

Ltd.

66 Yibin Kangrun Environmental Protection Power GenerationYibin Kangrun

Co. Ltd. Environmental 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 TechnologyJiangxi High Transparent

Co. Ltd. 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

131Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

No. Corporate name Abbreviation

73 Konka Huanjia (Henan) Environmental Technology Co.

Konka Huanjia (Henan)

Ltd.

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 (Zhejiang) Co. Ltd. Konka Ronghe

78 Chongqing Kangxingrui Environmental Technology Co.

Chongqing Kangxingrui

Ltd.

79 Chongqing Kangxingrui Scraped Automobile RecyclingChongqing Kangxingrui

Co. Ltd. Automobile Recycling

80 Shenzhen Konka Unifortune Technology Co. Ltd. Konka Unifortune

81 Jiali International (Hong Kong) Limited Jiali International

82 Sichuan Kangjiatong Technology Co. Ltd. Kangjiatong

83 Kanghong (Yantai)

Kanghong (Yantai) Environmental Technology Co. Ltd.Environmental

84 Jiangkang (Shanghai)

Jiangkang (Shanghai) Technology Co. Ltd.Technology

85 Shenzhen Konka Intelligent Manufacturing Technology Co.Konka Intelligent

Ltd. 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

91 Chengdu Anren Konka Cultural and Creative Incubator

Chengdu Anren

Management 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

132Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

No. Corporate name Abbreviation

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

100 Chain Kingdom Memory Technologies Co. Limited Chain Kingdom Memory

Technologies

101 Chain Kingdom Memory Technologies (Shenzhen) Co.Chain Kingdom Memory

Limited Technologies (Shenzhen)

102 Hongjet (Hong Kong) Company Limited Hongjet

103 Xi'an Feihe Real Estate Development Co. Ltd. Xi'an Feihe

104 Chongqing Xinyuan Semiconductor Co. Ltd. Chongqing Xinyuan

Semiconductor

105 Jiangxi Konka Industrial Park Development Co. Ltd. Jiangxi Konka Industrial Park

106 Ruichang Kangrui Real Estate Co. Ltd. Ruichang Kangrui Real

Estate

107 Konka Industrial Development (Wuhan) Co. Ltd. Industrial development in

Wuhan

108 Shenzhen Kangxiaojia Digital Information Technology Co.Kangxiaojia Digital

Ltd.

109 Shenzhen Kanghong Dongsheng Investment Partnership

(Limited Partnership) Kanghong Dongsheng

110 Shenzhen Yijiakang Smart Terminal Technology Co. Ltd. Yijiakang Smart Terminal

111 Guizhou Kangkai Material Technology Co. Ltd. Guizhou Kangkai Material

Technology

112 Guizhou Konka New Material Technology Co. Ltd. Guizhou Konka New

Material Technology

113 Guizhou Kanggui Energy Co. Ltd. Guizhou Kanggui Energy

114 Guangdong Xinwei Semiconductor Co. Ltd. Guangdong Xinwei

115 Chongqing Kangxingrui Renewable Resources Co. Ltd. Kangxinrun Renewable

Resources

116 Guizhou Kanggui Material Technology Co. Ltd. Guizhou Kanggui Material

133Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

No. Corporate name Abbreviation

Technology

117 Sichuan Chengrui Real Estate Co. Ltd. Sichuan Chengrui

118 Chongqing Jiarun Real Estate Co. Ltd. Chongqing Jiarun

119 Nantong Kanghai Technology Industry Development Co.Nantong Kanghai

Ltd.

120 Chongqing Kangyiyun Business Operation ManagementChongqing Kangyiyun

Co. Ltd.

121 Jiangxi Konka High-tech Park Operation and Management Jiangxi Konka High-tech

Co. Ltd. Park

122 Shangrao Konka Electronic Technology Innovation Co. Shangrao Konka Electronic

Ltd. Technology Innovation

123 Guizhou Konka New Energy Material Technology Co. Ltd. Guizhou Konka New Energy

124 Zhejiang Konka Electronic Technology Co. Ltd. Zhejiang Konka Electronic

125 Zhejiang Konka Technology Industry Development Co. Zhejiang Konka Technology

Ltd. Industry

126 Sichuan Hongxinchen Real Estate Development Co. Ltd. Sichuan Hongxinchen

127 Xi'an Konka Intelligent Appliance Co. Ltd. Xi'an Konka Intelligent

128 Xi'an Konka Network Technology Co. Ltd. Xi'an Konka Network

129 Xi'an Kanghong Technology Industry Development Co. Xi'an Kanghong Technology

Ltd. Industry

130 Xi'an Konka Intelligent Technology Development Co. Ltd. Xi'an Konka IntelligentTechnology

131 Chongqing Fangbing Real Estate Co. Ltd. Chongqing Fangbing RealEstate

132 Chongqing Konka Low Carbon Technology Co. Ltd. Chongqing Konka LowCarbon

133 Shenzhen Kanghong Xintong Investment Partnership

(Limited Partnership) Kanghong Xintong

134 Songyang Konka Smart Industry Operation Management

Co. Ltd. Songyang Industry Operation

135 Shenzhen Kangyan Technology Co. Ltd. Kangyan Technology

136 Konka Photovoltaic Technology Co. Ltd. Konka PhotovoltaicTechnology

137 Songyang Konka Intelligent Technology Development Co.

Ltd. Songyang Konka Intelligent

138 Konka North China (Tianjin) Technology Co. Ltd. Konka North China

139 Zhongshan Kanghong Electronic Technology Co. Ltd. Zhongshan Kanghong

140 Shenzhen Konka Digital Technology Development Co. Digital Technology

134Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

No. Corporate name Abbreviation

Ltd.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 aswell as the accounting policies and estimations stipulated in the Note IV “Significant AccountingPolicies and Estimations”.

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

135Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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

136Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

under the same control is successively obtained through several transactions and eventually the

enterprise merger is conducted. For example: At the occasion of the equity of the investee under

the same control is acquired step by step through multiple transactions and finally form the

business combination when preparing the consolidated statement it shall be deemed as the

adjustment is made in the current state when the final controlling party starts to control. And

when compiling the comparative report the assets and liabilities of the merged party shall be

merged into the comparative statement of the consolidated financial statements of the

consolidated Group without any earlier than the time when the Group and the merged party are

under the control of the ultimate controlling party and the combined net increased assets shall be

adjusted to the relevant items under owners' equity in the comparative statements. In order to

avoid the re-calculation of the net assets value of the merged party the long-term equity

investment held by the Group before the merger the confirmed relevant profit and loss on the

same party with the Group and the merged party on the date of acquisition of the original equity

from the final control date to the merger date and changes of other comprehensive income and

other net assets shall offset the beginning retained earnings and current profits and losses of the

comparative statement period respectively.For subsidiaries acquired through business combination under the different control the operating

results and cash flow shall be included in the consolidated financial statements from the date

when the Group obtains the control right. When preparing the consolidated financial statements

the financial statements of the subsidiaries shall be adjusted on the basis of the fair value of the

identifiable assets liabilities and contingent liabilities determined on the acquisition date.The treatment method of supplementary disclosure in consolidated financial statement for the

Reporting Period when the controlling right is acquired if the equity of the invested organization

not under the same control is successively obtained through several transactions and eventually

the 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

137Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

of purchase or the date of consolidation is corresponding to the disposal of long-term equity

investments. The capital premium or equity premium is adjusted. If the capital reserve is

insufficient to offset the retained earnings are adjusted.If the Group loses control over the investee due to the disposal of some equity investments and

other reasons the remaining equity shall be re-measured at its fair value on the date of loss of

control when preparing the consolidated financial statements. The difference between the sum of

the consideration obtained from the disposal of equity and the fair value of the remaining equity

minus the share of the net assets of the original subsidiary calculated on the basis of the original

shareholding ratio and continuously calculated from the date of purchase or merger is included in

the investment profit and loss of the current period when the control right is lost and goodwill is

offset. Other comprehensive income related to the original subsidiary's equity investment etc.will be transferred to the current investment profit and loss when the control right is lost.If the Group disposes of the equity investment in a subsidiary Group step by step through

multiple transactions until the loss of control right if the transactions of the disposal of the equity

investment in a subsidiary Group until the loss of control right belong to a package transaction

the transactions shall be treated as transactions of the disposal of the subsidiary Group and the

loss of control right for accounting. However the difference between the disposal price and the

share of the subsidiary's net assets corresponding to the disposal investment before the loss of

control right is recognized as other comprehensive income in the consolidated financial

statements and is transferred to the investment profit and loss of the current period when the

control right is lost.

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

138Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

(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

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: * The business mode of the Group to manage the financial

assets targets at collecting the contractual cash flow. * The contract of the financial assets

stipulates that the cash flow generated in the specific date is the payment of the interest based on

the principal and outstanding principal amount. These financial assets initially measured at fair

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

139Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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: * The Business mode for

managing financial assets of the Group takes contract cash flow collected as target and selling as

target.* The contract of the financial assets stipulates that the cash flow generated in the specific

date is the payment of the interest based on the principal and outstanding principal amount. These

financial assets initially measured at fair value and relevant transaction cost shall be included into

the initial recognized amount. Except for those designated as hedged items as for these financial

assets except for gains or losses on credit impairment exchange gain and loss and interest of

financial assets measured at actual interest rate other gains or losses generated shall be recorded

into other comprehensive income. When derecognized the accumulated gains and losses

originally recorded into other comprehensive income shall be transferred out into the current

profit or loss.The Group recognizes interest income according to the effective interest rate method. Interest

income is calculated and determined according to the book balance of the financial asset

multiplied by the actual interest rate except for the following circumstances: * 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.* 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

140Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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:

* the rights to receive cash flows from the asset have expired; * the enterprise has transferred

its rights to receive cash flows from the asset to a third party under a pass-through arrangement;

or * the enterprise has transferred its rights to receive cash flows from the asset and either (a)

has transferred substantially all the risks and rewards of the asset or (b) has neither transferred

nor retained substantially all the risks and rewards of the asset but has transferred control of the

asset.If the overall transfer of financial assets fulfills the requirements for derecognition the difference

between the book value of the transferred financial assets and the sum of the consideration

received due to the transfer and the corresponding derecognition part of the accumulated amount

of fair value changes originally directly included in other comprehensive income (the contract

terms involving the transferred financial assets stipulate that the cash flow generated on a specific

date is only the payment of the principal and interest based on the unpaid principal amount) shall

be included in the current profits and losses.If the partial transfer of financial assets satisfies the conditions for termination confirmation the

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

141Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

rate. The Group classifies financial liabilities except for the following items as financial liabilities

at amortized cost: * Financial 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. * Financial liabilities

arising from the transfer of financial assets not meeting the derecognition conditions or

continuous involvement in the transferred financial assets. * Financial guarantee contract not

belonging to cases of above * or * and loan commitments at interest rate lower than the market

rate not belonging to the case in* .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

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

142Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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

143Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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.

144Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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.

(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

BankAcceptance

risks

145Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Item Basis

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

This portfolio is accounts receivable with aging as the credit risk

Aging Combination

feature.Related party combination The accounts receivable from the other entities within the Group

14. Accounts Receivable Financing

The Group’s accounts receivable financing is based on expected credit losses and provision is

made for depreciation reserves in accordance with the expected credit loss measurement method

for notes receivable.

15. Other Receivables

The Group measures the loss reserves on other receivables in accordance with the following

circumstances: a) For financial assets whose credit risk has not significantly increased since the

initial recognition the Group measures the loss reserves at the amount of expected credit losses

for the next 12 months; b) For financial assets whose credit risk has increased significantly since

the initial recognition the Group measures the loss reserves at an amount equal to the expected

credit losses for the entire period of the financial instrument; c) For financial assets purchased or

originated from credit impairment the Group measures the loss reserves at an amount equal to the

expected credit losses over the entire period of the financial instrument. Except other receivables

whose credit risks shall be separately evaluated the Group shall divide them into different

combinations based on the specific credit risk features:

Item Basis

Aging Combination This portfolio is other receivables with aging as the credit risk

146Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Item Basis

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 from the other entities within the Group

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

Combination credit risk characteristics

17. Inventories

The Group's inventories mainly include raw materials products in process semi-finished

products Products on handand 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

147Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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

For the method of determining the expected credit loss of contract assets see the above-

mentioned measurement method for impairment losses of receivables.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

148Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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

149Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

judge whether the Group has a significant influence on the investee by taking into account the

facts and circumstances such as having representatives on the board of directors or similar

authority of the investee or participating in the process of formulating financial and operating

policies of the investee or having major transactions with the investee or sending management

personnel to the investee or providing key technical information to the investee.If control over the investee is formed it is a subsidiary of the Group. For long-term equity

investment acquired through business combination under the same control the initial investment

cost of the long-term equity investments is recorded at the merger date based on the acquisition of

the merged party's share of the book value of the net assets of the ultimate controller in the

consolidated financial statement. If the book value of the net assets of the merged party on the

merger date is negative the cost of long-term equity investments is determined as zero.If the equity of the investee under the same control is acquired in stages through multiple

transactions to eventually result in a business combination additional disclosures of the treatment

of long-term equity investments in the parent Group's financial statements shall be made in the

Reporting Period in which control is obtained. For example if the business combination that is

ultimately formed through multiple transactions to acquire the equity of the investee under the

same control belongs to a package deal the Group shall conduct accounting treatment to treat

each transaction as a single transaction to acquire control. If the transaction is not a package deal

the initial investment cost of the long-term equity investment is based on the share of the book

value of the net assets of the merged party in the consolidated financial statements of the ultimate

controller at the merger date. The difference between the initial investment cost and the sum of

the book value of the long-term equity investment before the merger plus the book value of the

new consideration paid for further acquisition of shares at the merger date shall offset against

capital reserve; and where capital reserve is insufficient to be offset the retained earnings shall be

adjusted.For long-term equity investment acquired through business combination not under the same

control the initial investment cost shall be the consolidation cost.If the equity of the investee not under the same control is acquired in stages through multiple

transactions to eventually result in a business combination additional disclosures of the cost

treatment of long-term equity investments in the parent Group's financial statements shall be

made in the Reporting Period in which control is obtained. For example if the business

combination that is ultimately formed through multiple transactions to acquire the equity of the

investee not under the same control belongs to a package deal the Group shall conduct

accounting treatment to treat 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

150Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

shall not be adjusted. The same basis of accounting as that used for the direct disposal of the

related assets or liabilities by the investee is used for the disposal of the investment. If the equity

held prior to the purchase date is a financial asset designated to be measured at fair value with

fluctuations included in other comprehensive income the cumulative profit or loss on the equity

previously recognized in other comprehensive income shall be transferred from other

comprehensive income to the retained earnings; if the equity is a financial asset measured at fair

value and the changes of which are included in profits and losses of the current period the equity

previously recognized as profits and losses from the changes in fair value shall not be transferred

to investment income. If the equity held prior to the purchase date is an investment for other

equity instruments the changes in fair value of the equity investment accumulated in other

comprehensive income before the purchase date shall be transferred to the retained earnings.Except for the long-term equity investments acquired through business combination hereinabove

long-term equity investments acquired by paying cash are recorded as investment cost based on

the actual purchase price paid; long-term equity investments acquired by issuing equity securities

are recorded as investment cost based on the fair value of the equity securities issued; long-term

equity investments invested by investors are recorded as investment cost based on the value

agreed in the investment contract or agreement.The Group calculates its investments in subsidiaries through the cost method and its investments

in joint ventures and associate enterprises through the equity method.For long-term equity investments calculated by the cost method for subsequent measurement the

book value of the cost of long-term equity investments shall be increased by the fair value of the

cost amount paid for the additional investment and relevant transaction costs incurred when the

additional investment is made. Cash dividends or profits declared by the investee are recognized

as investment income for the current period in accordance with the due amount.In addition to the above-mentioned long-term equity investment obtained through business

combination the long-term equity investment obtained by paying cash shall be regarded as the

investment cost according to the purchase price actually paid; the long-term equity investment

obtained by issuing equity securities shall be regarded as the investment cost according to the fair

value of issuing equity securities; the long-term equity investment invested by investors shall be

regarded as the investment cost according to the investment contract or agreement The value of

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

151Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

should be enjoyed.For the long-term equity investment with equity method for subsequent measurement the book

value of the long-term equity investment will increase or decrease with the change of the owner's

equity of the invested entity. When confirming the share of the net profit and loss of the investee

the net profit and loss of the investee shall be calculated based on the fair value of the identifiable

assets of the investee at the time of obtaining the investment in accordance with the accounting

policies and accounting period of the Group and offset the internal transaction profit and loss

between the joint venture and the joint venture according to the shareholding ratio Profit is

recognized after adjustment.For disposal of long-term equity investment the difference between the book value and the actual

price shall be included in the current investment income. For long-term equity investment

accounted by equity method other comprehensive income accounted by the original equity

method shall be accounted on the same basis as the investee's direct disposal of relevant assets or

liabilities when the equity method is terminated and the owner's equity shall be recognized due to

other changes in owner's equity of the investee except net profit and loss other comprehensive

income and profit distribution When the equity method is terminated all of them shall be

transferred into the current investment income.In case of loss of joint control or significant influence on the investee due to the disposal of part

of equity investment the remaining equity after disposal shall be accounted according to the

relevant provisions of the recognition and measurement standards of financial instruments and

the difference between the fair value and the book value of the remaining equity on the date of

loss of joint control or significant influence shall be included in the current profits and losses.When the equity method is terminated the other comprehensive income of the original equity

investment recognized as a result of its accounting with the equity method shall be handled on the

same basis as the investee's direct disposal of the relevant assets or liabilities and carried forward

in proportion. The owner's equity recognized as a result of the changes in the owner's equity of

the 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

152Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

residual equity on the day of losing control shall be included in the current profits and losses.If the transaction from step-by-step disposal of equity to loss of control right does not belong to

package transaction accounting treatment shall be carried out for each transaction separately. If it

is a "package deal" each transaction will be treated as a transaction of disposal of subsidiaries

and loss of control. However before the loss of control the difference between the disposal price

of each transaction and the book value of the long-term equity investment corresponding to the

disposed equity will be recognized as other comprehensive income and when the control is lost

it will be transferred to the current account of loss of control Period profit and loss

21. Investment Property

The term “investment property” refers to the real estate held for generating rent and/or capital

appreciation. Investment property of the Group include the right to use any land which has

already been rented; the right to use any land which is held and prepared for transfer after

appreciation; and the right to use any building which has already been rented. In addition if the

board of directors (or similar organizations) makes a written resolution to use the vacant buildings

held by the Group for operating lease and the holding intention will not change in a short time

they will also be listed as investment real estate.The initial measurement of the investment property shall be made at its cost. Subsequent

expenditures incurred for an investment property is included in the cost of the investment

property when it is probable that economic benefits associated with the investment property will

flow to the Group and the cost can be reliably measured otherwise the expenditure is recognized

in profit or loss in the period in which they are incurred.The Group shall make a follow-up measurement to the investment property by employing the cost

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

153Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

transferred to investment property at the date of such change. If the fixed asset or intangible asset

is changed into investment property measured by adopting the cost pattern whose book value

prior to the change shall be the entry value after the change; if the fixed asset or intangible asset is

changed into investment property measured by adopting the fair value pattern whose fair value

on the date of such change shall be the entry value after the change.An investment property is derecognized on disposal or when the investment property is

permanently withdrawn from use and no future economic benefits are expected from its disposal.The amount of proceeds on sale transfer retirement or damage of an investment property less its

carrying amount and related taxes and expenses is recognized in profit or loss in the period in

which it is incurred.

22. Fixed Assets

The Group’s fixed assets are tangible assets held for the production of goods provision of

services rental or operation management and have a useful life of more than one year.Fixed assets should be recognized when it is probable that the economic benefits associated with

them will be incorporated into the Group and their cost can be measured reliably. The Group’s

fixed assets include buildings and constructions machinery and equipment electronic equipment

transportation equipment and other equipment.The Group depreciates all fixed assets by straight-line method except for fully depreciated fixed

assets that continue to be used and land that is separately valued. The categorized depreciable

lives estimated net salvage rates and depreciation rates of the Group’s fixed assets are as follows.Annual

Depreciation Expected net

No. Category Method deprecation

period (year) salvage value (%)

(%)

Housing and Straight-line

20-405-10.002.25-4.75

1 building depreciation

Machinery Straight-line

5-105-10.009.00-19.00

2 equipment depreciation

Electronic Straight-line

3-55-10.0018.00-31.67

3 equipment depreciation

Transportation Straight-line

3-55-10.0018.00-31.67

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.

154Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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

155Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

terms except those incurred for the production of inventories.

(2) Follow-up measurement

After the commencement date of the lease term the Group adopts the cost model to carry out follow-

up measurement of the right-of-use assets that is the right-of-use assets are measured at cost less

accumulated depreciation and accumulated impairment losses. If the Group re-measures the lease

liabilities according to the relevant provisions of the lease standards the book value of the right-of-use

assets shall be adjusted accordingly.

(3)Depreciation of right-of-use assets

From the commencement date of the lease term the Group has accrued depreciation on the right-of-

use assets. Right-of-use assets are usually depreciated from the month when the lease term begins. The

accrued depreciation amount is included in the cost of related assets or current profits and losses

according to the use of the right-of-use assets.When determining the depreciation method of the right-of-use assets the Group makes a decision

based on the expected consumption mode of the economic benefits related to the right-of-use assets

and accrues depreciation for the right-of-use assets on the straight-line method.When determining the depreciation period of the right-of-use assets the Group follows the following

principles: If the ownership of the leased assets can be reasonably determined when the lease term

expires depreciation shall be accrued within the remaining service life of the leased assets; if it cannot

be reasonably determined that the ownership of the leased asset can be obtained when the lease term

expires depreciation shall be accrued within the shorter of the lease term and the remaining service

life of the leased asset.

(4)Impairment of right-of-use assets

If the right-of-use assets are impaired the Group carries out subsequent depreciation according to the

book value of the right-of-use assets after deducting the impairment loss.

26. Intangible Assets

The Group’s intangible assets include land use rights patented technology and non-proprietary

technology which are measured at actual cost at the time of acquisition. Acquired intangible

assets are stated at actual cost based on the actual price paid and related other expenses. The

actual cost of intangible assets invested by investors is determined at the value agreed in the

investment contract or agreement but if the agreed value in the contract or agreement is not fair

the actual cost is determined at fair value. Intangible assets such as patents acquired in a merger

not under common control but owned by the acquiree but not recognized in its financial

statements are recognized as intangible assets at fair value at the time of initial recognition of the

acquiree’s assets.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

156Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

assets with finite useful lives are reviewed at the end of each year. Accounting estimation

methods are used when changes are required.

(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.* It is feasible technically to finish intangible assets for use or sale;

* It is intended to finish and use or sell the intangible assets;

* The usefulness of methods for intangible assets to generate economic benefits shall be proved

including being able to prove that there is a potential market for the products manufactured by

applying the intangible assets or there is a potential market for the intangible assets itself or the

intangible assets will be used internally;

* 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;

* The development expenditures of the intangible assets can be reliably measured.

27. Impairment of Long-termAssets

For non-current financial Assets of fixed Assets projects under construction intangible Assets

with limited service life investing real estate with cost model long-term equity investment of

subsidiaries cooperative enterprises and joint ventures the 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

157Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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.

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

158Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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

159Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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

160Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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.

(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:

* The customer obtains and consumes the economic benefits brought by the Group's performance

at the same time the Group performs the contract.* The customer can control the products under construction during the performance of the Group.* The goods produced during the performance of the Group have irreplaceable uses and the

Group has the right to collect payments for the cumulative performance of the contract during the

entire contract period.For performance obligations performed within a certain period of time the Group recognizes

revenue according to the performance progress during that period. When the performance

progress cannot be reasonably determined if the cost incurred by the Group is expected to be

compensated the revenue shall be recognized according to the amount of the cost incurred until

the performance progress can be reasonably determined.

161Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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:

* The Group enjoys the current right to receive payment for the goods or services.* The Group has transferred the legal ownership of the product to the customer.* The Group has transferred the goods in kind to the customer.* The Group has transferred the main risks and rewards of the ownership of the product to the

customer.* The 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

* 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.* The transaction price is the amount of consideration that the Group expects to be entitled to

receive due to the transfer of goods or services to customers excluding payments collected on

behalf of third parties and payments expected to be returned to customers. The transaction price

confirmed by the Group does not exceed the amount at which the accumulated confirmed income

will most likely not undergo a significant reversal when the relevant uncertainty is eliminated. It

is expected that the money returned to the customer will not be included in the transaction price

as a liability.* If 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.* For the consideration payable to customers the Group offsets the transaction price from the

consideration payable to customers and offsets the current income at the time when the relevant

income is recognized and the payment (or promised to pay) the customer consideration is later

162Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

unless the consideration payable is for Obtain other clearly distinguishable products from

customers.* For 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.* If there is a significant financing component in the contract the Group shall determine the

transaction price based on the amount payable in cash when the customer assumes control of the

goods or services. Using the discount rate that discounts the nominal amount of the contract

consideration into the current commodity price the difference between the determined transaction

price and the amount of the consideration promised in the contract is amortized by the actual

interest method during the contract period. On the starting date of the contract the Group expects

that the time between the customer's acquisition of control of the goods or services and the

customer's payment of the price will not exceed one year regardless of the significant financing

components in the contract.* According to contractual agreements legal provisions etc. the Group provides quality

assurance for the products sold and the assets built. For guarantee-type quality assurance to assure

customers that the goods sold meet the established standards the Group conducts accounting

treatment in accordance with "contingent events-estimated liabilities". For the service quality

assurance that provides a separate service in order to assure customers that the goods sold meet

the established standards the Group regards it as a single performance obligation based on the

stand-alone selling price of the quality assurance of goods and services. In a relative proportion

part of 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.* When the construction contract between the Group and the customer is changed: * If the

contract change adds clearly distinguishable construction services and contract prices and the

new contract price reflects the stand-alone selling price of the new construction services the

Group will The contract change shall be treated as a separate contract for accounting treatment;

* If the contract change does not fall into the above-mentioned circumstance * and there is a

163Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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;

* If the contract change does not fall into the above situation* 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

* Revenue recognized on time

The Group's sales of household appliances electronic components etc. belong to the

performance obligation performed at a certain point in time.Recognition conditions for income from domestic sales of goods and overseas direct sales of

goods: The Group has delivered the product to the customer in accordance with the contract and

the customer has received the product the payment has been recovered or the receipt of payment

has been obtained and the relevant economic benefits are likely to flow in. The main risks and

rewards have been transferred and the legal ownership of the goods has been transferred.Conditions for confirming the income of exported goods: The Group has declared the products

for export according to the contract obtained the bill of lading and delivered the goods to the

carrier entrusted by the purchaser. The payment has been recovered or the receipt of payment has

been obtained and relevant economic benefits are likely to flow in. The main risks and rewards of

commodity ownership have been transferred and the legal ownership of commodities has been

transferred.* Income 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

164Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

quota standard or funds that meet the relevant conditions stipulated by the financial support

policy with conclusive evidence at the end of the year and which are expected as the financial

support. Non-monetary elements of the government grants shall be measured at fair value. Those

whose fair value cannot be obtained reliably shall be measured at its nominal amount (RMB1).Asset-based grants shall be used to offset the carrying value of related assets or presented as

deferred income and shall over the life of the related asset be included in the current profits and

losses by the equal amortization method.If the related asset is sold transferred scrapped or damaged before the end of its useful life its

deferred income that has not been distributed shall be transferred to the current profit and loss of

asset disposal.Income-based grants that are used to compensate related costs or losses in subsequent periods

shall be deemed as deferred income and shall be included in the current profits and losses during

the period when the related costs or losses are recognized. Government grants related to routine

activities shall be included in other income in accordance with the nature of the transaction.Government grants not related to routine activities shall be included in non-operating income and

expenditure.The Group obtains interest grants on policy-related concessional loans in two different ways: the

interest subsidy funds are allocated by the government either to the lending bank or directly to the

Group. The respective accounting treatment is carried out as follows:

(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

165Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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

166Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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

167Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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

168Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

(1) Changes of accounting policies

On 30 December 2021 the Ministry of Finance ("MOF") issued Accounting Standard for

Business Enterprises ("ASBE") Interpretation No. 15 (Caikuai [2021] No. 35) ("ASBE

Interpretation No. 15").* The Group implemented the provisions of ASBE Interpretation No. 15 "Accounting for the

sale of products or by-products produced by an enterprise before a fixed asset reaches its intended

useable state or in the course of research and development" issued by the Ministry of Finance

with effect from 1 January 2022 and the change in accounting policy has no impact on the

Company's financial statements.* The Group has implemented the provisions of ASBE Interpretation No. 15 "Judgment on

Loss-making Contracts" since 1 January 2022 and the change in accounting policy has no impact

on the Company's financial statements.

(2) Changes in Accounting Estimates

No such cases in the Reporting Period.V. Taxation

1. Main Taxes and Tax Rate

Specific situation of the taxes

Category of taxes Basis

rate

169Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Specific situation of the taxes

Category of taxes Basis

rate

Calculated the output tax at

the tax rate and paid the

VAT by the amount after

deducting the deductible

withholding VAT at 1%、3%、5%、6%、9%、

VAT

current period of which 13%

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 Kanghanrui Jiangsu

Konka Smart Yibin Kangrun

Urban maintenance and The circulating tax actually Yibin Kangrun Medical Yibin

construction tax paid Kangrun Environmental

Protection Jiangkang

(Shanghai) Technology. Paid

at 3.5%: Konka Capital. Paid

at 1%: Jiangxi Konka Jiangxi

High Transparent Substrate.Paid at 7%: other subsidiaries.The circulating tax actually

Education surtax 3%

paid

The circulating tax actually

Local education surtax 2%

paid

25%/ See 2.Tax Preference

Enterprise income tax Taxable income and Approved Documents for

details

The main taxpayers of different corporate income tax rates are explained as follows:

Name of entity Income tax rate

Xiaojia Technology Electronic Technology

Anhui Konka Anhui Tongchuang Xinfeng

Microcrystalline Xingda Hongye Jiangxi Konka 15%

Jiangxi High Transparent Substrate Wankaida

Chengdu Konka Electronic

170Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Name of entity Income tax rate

Hong Kong Konka Konka Electrical Appliances

International Trading Jiali International

Kangjietong Jiaxin Technology Jiaxin 16.5%

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 administrativemeasures of income tax of “unified computing level-to-level administration local prepaymentliquidation 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 19 December 2022 Xiaojia Technology a subsidiary of the Company received the

"Certificate of High-tech Enterprise" jointly issued by Shenzhen Science and Technology

Innovation Committee Shenzhen Finance Bureau and Shenzhen Taxation Bureau of the State

Administration of Taxation with the certificate number GR202244203274 which is valid for

three years. According to the relevant tax regulations Xiaojia Technology will enjoy the relevant

preferential tax policies regarding high-tech enterprises for three consecutive years from 2022 to

2024 and pay enterprise income tax at a preferential tax rate of 15%.

171Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

(3) On 19 December 2022 Electronic Technology a subsidiary of the Company received the

Certificate of High-Tech Enterprise jointly issued by Shenzhen Science and Technology

Innovation Committee Shenzhen Finance Bureau and Shenzhen Taxation Bureau of the State

Administration of Taxation with the certificate number GR202244205867 which is valid for

three years. In accordance with the relevant tax regulations Electronic Technology is entitled to

the relevant tax incentives for three consecutive years from 2022 to 2024 to enjoy the relevant tax

preferential policies on high-tech enterprises and pay enterprise income tax at a preferential tax

rate of 15%.

(4) On 18 October 2022 Anhui Konka a subsidiary of the Company obtained the Certificate of

High-Tech Enterprise jointly issued by the Department of Science and Technology of Anhui

Province the Department of Finance of Anhui Province and the Taxation Bureau of Anhui

Province of the State Administration of Taxation with the certificate number GR202234002272

which is valid for three years. In accordance with the relevant tax regulations Anhui Konka is

entitled to the relevant tax incentives for three consecutive years from 2022 to 2024 to enjoy the

relevant tax preferential policies on high-tech enterprises and pay enterprise income tax at a

preferential tax rate of 15%.

(5) On 18 October 2022 Anhui Tongchuang a subsidiary of the Company obtained the

Certificate of High-Tech Enterprise jointly issued by the Department of Science and Technology

of Anhui Province the Department of Finance of Anhui Province and the Taxation Bureau of

Anhui Province of the State Administration of Taxation with the certificate number

GR202234000798 which is valid for three years. In accordance with the relevant tax regulations

Anhui Tongchuang is entitled to the relevant tax incentives for three consecutive years from 2022

to 2024 to enjoy the relevant tax preferential policies on high-tech enterprises and pay enterprise

income tax at a preferential tax rate of 15%.

(6) On 4 November 2022 Xinfeng Microcrystalline a subsidiary of the Company obtained the

Certificate of High-Tech Enterprise jointly issued by the Department of Science and Technology

of Jiangxi Province the Department of Finance of Jiangxi Province and the Taxation Bureau of

Jiangxi Province of the State Administration of Taxation with the certificate number

GR202236000999 which is valid for three years. In accordance with the relevant tax regulations

Xinfeng Microcrystalline shall enjoy the relevant tax incentives for three consecutive years from

2022 to 2024. According to the relevant tax regulations Xinfeng Microcrystalline is entitled to

the relevant tax incentives for three consecutive years from 2022 to 2024 to enjoy the relevant tax

preferential policies on high-tech enterprises and pay enterprise income tax at a preferential tax

rate of 15%.

172Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

(7) On 20 December 2021 XingDa HongYe a subsidiary of the Company obtained the "High-

tech Enterprise Certificate" jointly issued by Department of Science and Technology of

Guangdong Province Department of Finance of Guangdong Province and Guangdong Provincial

Tax Service of State Taxation Administration (No. GR202144002737) which will be valid for

three years. According to relevant tax regulations XingDa HongYe enjoys relevant preferential

tax policies for high-tech enterprises for three consecutive years from 2021 to 2023 and pays

enterprise income tax at a reduced rate of 15%.

(8) On 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%.

(9) 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

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%.

(10) 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%.

(11) 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

60% of its gross income in the current year is entitled to a reduced corporate income tax rate of

15%. Chongqing Kangxingrui and Chengdu Konka Electronic subsidiaries of the Company are

eligible for this preferential tax policy.

173Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

(12) 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 Electronics

Technology and Anhui Tongchuang all enjoy this preferential policy.VI. Notes to Major Items in the Consolidated Financial Statements of the

Company

Regarding the following disclosures in relation to the financial statements unless otherwise

specified the period-begin refers to 1 January 2022 the period-end refers to 31 December 2022

this period refers to the period from 1 January 2022 to 31 December 2022 and the last year refers

to the period from 1 January 2021 to 31 December 2021. The monetary unit is RMB.

1. Monetary Assets

Item Ending balance Beginning balance

Cash on hand 14.78 363.22

Bank deposits 5473400175.52 5968346855.81

Other monetary assets 514695300.41 521205992.21

Total 5988095490.71 6489553211.24

Of which: total amount deposited

137008617.40167359880.91

overseas

Note: The ending balance of other monetary funds mainly includes margin deposits financial

supervision account funds WeChat Alipay and other platform accounts and other deposits

subject to use restrictions. For details see "Note VI 65 Assets with Restricted Ownership or Use

Rights".

2. Notes Receivable

(1) Notes Receivable Listed by Category

Item Ending balance Opening balance

Bank’s acceptance bill 709558838.75 1215753215.01

Commercial acceptance bill 350178404.79 561724266.27

Total 1059737243.54 1777477481.28

(2) Notes Receivable Pledged by the Company at the Period-end

Item Amount

Bank’s acceptance bill 504958051.41

174Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Item Amount

Commercial acceptance bill

Total 504958051.41

(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

Bank’s acceptance bill 1062929117.11

Commercial acceptance bill 35251562.48

Total 1062929117.11 35251562.48

(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

Category Withdr

Proport awal Carrying value

Amount Amount

ion (%) proport

ion (%)

Provision for

bad debts

provided

individually

Bad debt

provision made 1067029648.07 100.00 7292404.53 0.68 1059737243.54

as per portfolio

Of which: Bank

709558838.7566.50709558838.75

acceptance bill

Commercia

357470809.3233.507292404.532.04350178404.79

l acceptance bill

Total 1067029648.07 100.00 7292404.53 0.68 1059737243.54

(Continued)

175Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Beginning balance

Carrying amount Bad debt provision

Category Withdr

Proport awal Carrying value

Amount Amount

ion (%) proport

ion (%)

Provision for bad

debts provided

individually

Bad debt

provision made 1789175291.65 100.00 11697810.37 0.65 1777477481.28

as per portfolio

Of which: Bank

1215753215.0167.951215753215.01

acceptance bill

Commercial

573422076.6432.0511697810.372.04561724266.27

acceptance bill

Total 1789175291.65 100.00 11697810.37 0.65 1777477481.28

In the group the provision for expected credit loss on commercial acceptance bills was made

according to aging

Ending balance

Name Withdrawal

Carrying amount Bad debt provision

proportion (%)

Within 1 year 357470809.32 7292404.53 2.04

Total 357470809.32 7292404.53 2.04

(6) Bad debt provision for notes receivable withdrawn collected or reversed during the Reporting

Period

Changed amount

Beginning Withdrawal Collected or Write- Ending

Category Othe

balance reversed off or balance

r

verified

Commercial

acceptance 11697810.37 8112015.62 12517421.46 7292404.53

bill

Bank’s

176Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Changed amount

Beginning Withdrawal Collected or Write- Ending

Category Othe

balance reversed off or balance

r

verified

acceptance

bill

Total 11697810.37 8112015.62 12517421.46 7292404.53

(7) Notes receivable actually written off in the current period

There is no notes receivable actually written off in the current period.

3. Accounts Receivable

(1) Accounts Receivable Listed by Withdrawal Methods for Bad Debts

Ending balance

Carrying amount Bad debt provision

Withd

Category Propor rawal Carrying value

Amount tion Amount propo

(%) rtion

(%)

Accounts

receivable for

which the

independent 1487466561.80 40.11 1350460284.27 90.79 137006277.53

provision for

expected credit

losses

Accounts

receivable for

which the

provision for

expected credit

losses was

withdrawn

according to

groups

Of which: aging 2221448326.94 59.89 321719768.25 14.48 1899728558.69

group

Subtotal of 2221448326.94 59.89 321719768.25 14.48 1899728558.69

groups

Total 3708914888.74 100.00 1672180052.52 45.09 2036734836.22

177Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

(Continued)

Beginning balance

Carrying amount Bad debt provision

With

Category drawPropor

al Carrying value

Amount tion Amount

propo

(%)

rtion

(%)

Accounts

receivable for

which the

independent 1608537820.30 33.82 1061967130.77 66.02 546570689.53

provision for

expected

credit losses

Accounts

receivable for

which the

provision for

expected

credit losses

was

withdrawn

according to

groups

Of which: 3148039065.69 66.18 296880274.15 9.43 2851158791.54

aging group

Subtotal of 3148039065.69 66.18 296880274.15 9.43 2851158791.54

groups

Total 4756576885.99 100.00 1358847404.92 28.57 3397729481.07

1) Accounts receivable for which the independent provision for expected credit loss is made at

the period-end

Ending balance

Withdra

Name Bad debt wal

Carrying amount Withdrawal reason

provision proporti

on (%)

Shanghai Huaxin Expected to be

International Group 299136676.70 293153943.17 98.00

Co. Ltd. difficult to recover

178Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Ending balance

Withdra

Name Bad debt wal

Carrying amount Withdrawal reason

provision proporti

on (%)

Hongtu Sanbao

High-tech

Technology Co. 200000000.00 160000000.00 80.00

Agreement

reorganization

Ltd.Shenzhen Yaode

Technology Co. 143135135.62 121664865.28 85.00 Expected to be

Ltd. difficult to recover

Guangan Ouqishi

Electronic

Technology Co. 113230553.53 110965942.46 98.00

Expected to be

difficult to recover

Ltd.Guangxi BG New

Materials Co. Ltd. 83396556.37 81728625.24 98.00

Expected to be

difficult to recover

Zhongfu Tiangong

Construction Group 71589096.65 53691822.49 75.00 Expected to be

Co. Ltd. difficult to recover

Gome

Customization

(Tianjin) Home 59569295.02 35741577.01 60.00 Higher credit risk

Appliances Co. Ltd.No. 1 Engineering

Company Ltd. of

CCCC First Harbor 65221300.00 65221300.00 100.00 Expected to be

Engineering difficult to recover

Company Ltd.Xingda Hongye Expected to be

(Hk) Limited 51902301.95 51902301.95 100.00 difficult to recover

China Energy Power

Fuel Co. Ltd. 50000000.00 50000000.00 100.00

Expected to be

difficult to recover

Others 350285645.96 326389906.67 93.18 Expected to bedifficult to recover

Total 1487466561.80 1350460284.27

2) Accounts receivable for which the provision for expected credit losses was withdrawn

according to groups

Aging Ending balance

Bad debt Withdrawal

Carrying amount

provision proportion (%)

Within 1 year 1627108997.86 33193023.51 2.04

1 to 2 years 160485489.75 16080646.09 10.02

2-3 years 172032450.77 39034163.05 22.69

3-4 years 80892519.74 52483066.78 64.88

179Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Aging Ending balance

Bad debt Withdrawal

Carrying amount

provision proportion (%)

Over 4 years 180928868.82 180928868.82 100.00

Total 2221448326.94 321719768.25 14.48

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 1708338208.62

1 to 2 years 163165760.88

2 to 3 years 267210849.90

3 to 4 years 671539902.08

Over 4 years 898660167.26

Subtotal 3708914888.74

Less: bad debt provision 1672180052.52

Total 2036734836.22

(3) Bad debt provision for accounts receivable during the Reporting Period

Changed amount

Category Beginning balance Collected or

Withdrawal

reversed

Bad debt provision of 1358847404.92 454228913.77 17074349.72

accounts receivable

Total 1358847404.92 454228913.77 17074349.72

(Continued)

Changed amount

Category Decrease for other Ending balance

Write-off or verified

reasons

Bad debt provision of 134980802.82

accounts receivable -11158886.37 1672180052.52

Total 134980802.82 -11158886.37 1672180052.52

Note: The debt restructuring of Tianjin Property Group Finance Co. Ltd. resulted in a decrease

of RMB 100000000.00. Other reasons for the reduction of RMB 11219324.62 due to exchange

rate changes and RMB 60438.25 due to the loss of control.

180Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

(4) Accounts receivable actually verified during the Reporting Period

Item Amount verified

Actually verified accounts receivable 34980802.82

Of which the verification of significant accounts receivable:

Whethe

r

occurre

d

Verification

Verification Reason for because

Name of entity Nature procedures

Amount verification of

performed

related-

party

transact

ions

ASANZO GROUP Payme Approved by

JOINT STOCK nt for 6572331.70 Expected to be

COMPANY goods unrecoverable

the Board of No

Directors

A SANZO VIETNAM Payme Approved by

ELECTRONIC JOINT nt for 4683514.23 Expected to be

STOCK COMPANY goods unrecoverable

the Board of No

Directors

Xi'an Huajin Payme

Technology Trade Co. nt for 4508000.00 Expected to be

Approved by

unrecoverable the Board of NoLtd. goods Directors

Payme Approved by

Shantan Innovations nt for 2951754.15 Expected to be

goods unrecoverable

the Board of No

Directors

ASANZO MEDIA Payment for 2127153.73 Expected to be

Approved by

AND ENT unrecoverable the Board of Nogoods Directors

Shenzhen

Zhongbailong Payme Expected to be Approved by

Industrial Development nt for 2086034.00 unrecoverable the Board of No

Co. Ltd. goods Directors

Total 22928787.81

(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 RMB1100214633.59 accounting for 29.66% of total closing balance of account receivable

the relevant ending balance of bad debt provision withdrawn was RMB584194373.72.

(6) Accounts Receivable Derecognized due to the Transfer of Financial Assets

There was no accounts receivable derecognized for transfer of financial assets.

181Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

(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.

4. Accounts Receivable Financing

Item Ending balance Beginning balance

Notes Receivable 237187228.44 71490688.54

Total 237187228.44 71490688.54

5. Prepayments

(1) Age of prepayments

Ending balance Beginning balance

Item Amount Proportion Amount Proportion

(%)(%)

Within 1 year 332218631.50 85.20 602386221.38 95.41

1 to 2 years 52945431.22 13.58 20098838.22 3.18

2-3 years 4191405.92 1.07 8614486.12 1.36

Over 3 years 592183.75 0.15 301408.14 0.05

Total 389947652.39 100.00 631400953.86 100.00

Note: The amount of prepayments aged over one year at the end of the period is RMB

57729020.89 accounting for 14.80% of the total balance of prepayments of the Company and

consists mainly of 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

RMB143766927.84 accounting for 36.87% of the total ending balance of prepayments.

6. Other Receivables

Item Ending balance Opening balance

Interests receivable 3878580.64 2573082.79

Dividends receivable 272999.43

Other Receivables 1437973265.51 1834886622.85

Total 1442124845.58 1837459705.64

6.1 Interests Receivable

182Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

(1) Category of Interests Receivable

Item Ending balance Opening balance

Interest on term deposits 3878580.64 2002526.91

Factoring interest 570555.88

Total 3878580.64 2573082.79

(2) Withdrawal of Bad Debt Provision for Interests Receivable

The Group did not have impaired interests receivable.

6.2 Dividends Receivable

(1) Category of Dividends Receivable

Item (or investee) Ending balance Opening balance

Chongqing Qingjia Electronics Co. 272999.43

Ltd.Total 272999.43

6.3 Other Receivables

(1) Classified by Account Nature

Nature Ending carrying balance Opening carrying balance

Deposit and margin 1411807968.60 1356193440.22

Intercourse funds among minority

shareholders in the business 176571471.89 173487141.27

consolidation not under the same

control and related parties

Energy-saving subsidies receivable 152399342.00 152399342.00

Others 1523970760.63 1489929312.88

Total 3264749543.12 3172009236.37

(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

17419904.57182212040.321137490668.631337122613.52

January 2022

183Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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)

In the Reporting

Period carrying

amount of other -8819408.46 5698496.85 3120911.61

receivables on 1

January 2022

——Transferred -8819408.46 8819408.46

to the Phase II

——Transferred -3120911.61 3120911.61

to the Phase III

——Transferred

back to the Phase

II

——Transferred

back to the Phase

I

Provision made

in the current 197326914.52 324641320.72 521968235.24

period

Amount

transferred back 4783363.92 49010.00 4832373.92

in the current

year

Write-off

Verification 2368413.91 27727482.07 30095895.98

Other changes 2658242.31 -44543.56 2613698.75

Balance as at 31 6475374.50 382824494.22 1437476408.89 1826776277.61

December 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.

184Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

significant

individual

amount and 1461191467.51 44.76 1437476408.89 98.38 23715058.62

make

independent

provision for

expected credit

loss

Other

receivables

withdrawn bad

debt provision

according to

credit risks

characteristics

Of which: 1342397234.31 41.12 372315645.78 27.74 970081588.53

Aging group

Low-risk group 461160841.30 14.12 16984222.94 3.68 444176618.36

Subtotal of 1803558075.61 55.24 389299868.72 21.59 1414258206.89

groups

185Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Ending balance

Carrying amount Bad debt provision

Withd

Category Propo

rawal Carrying value

Amount rtion Amount

propor

(%)

tion

Total 3264749543.12 100.00 1826776277.61 55.95 1437973265.51

(Continued)

Beginning balance

Carrying amount Bad debt provision

Withd

Category Propo

rawal Carrying value

Amount rtion Amount

propor

(%)

tion

Other

receivables with

significant

individual

amount and 1458258132.07 45.97 1137490668.63 78.00 320767463.44

make

independent

provision for

expected credit

loss

Other

receivables

withdrawn bad

debt provision

according to

credit risks

characteristics

Of which: 1494744336.27 47.13 188949294.11 12.64 1305795042.16

Aging group

Low-risk group 219006768.03 6.90 10682650.78 4.88 208324117.25

Subtotal of 1713751104.30 54.03 199631944.89 11.65 1514119159.41

groups

186Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Beginning balance

Carrying amount Bad debt provision

Withd

Category Propo

rawal Carrying value

Amount rtion Amount

propor

(%)

tion

Total 3172009236.37 100.00 1337122613.52 42.15 1834886622.85

(4) Listed by aging

Aging Ending balance

Within 1 year 531774524.39

1 to 2 years 551601162.73

2-3 years 688602155.02

3-4 years 1096771140.67

4-5 years 201058646.10

Over 5 years 194941914.21

Subtotal 3264749543.12

Less: bad debt provision 1826776277.61

Total 1437973265.51

(5) Bad Debt Provision for Other Receivables

The amount of bad debt provision withdrawn this year was RMB517135861.32 mainly because

the expected credit loss of the advanced deposit and quality reparations receivable for the whole

duration was withdrawn because the supplier of the subsidiary Konka Huanjia was in abnormal

business status and could not make delivery or refund the advanced deposit in the short term.There was a decrease amounting to RMB122818.70 due to a loss of controlling right over the

subsidiary an increase amounting to RMB2736517.45 due to exchange rate changes and d

decrease of RMB30095895.98 due to verified writeoffs.

(6) Other Receivables Actually Written off in the Reporting Period

Item Amount written off

Other receivables actually written off 35665095.98

(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 RMB1467347627.97 accounting for 44.95% of the total ending balance

187Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

of other receivables. The total ending balance of bad debt provision correspondingly withdrawn

was RMB547785002.00.

(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.

7. Inventories

(1) Category of Inventories

Ending balance

Inventory falling

price

Item

Carrying balance reserves/impairment Carrying value

provision of contract

performance costs

Raw materials 1168223234.28 64695751.94 1103527482.34

Semi-finished products 145186803.18 37339815.90 107846987.28

Products on hand 3316097782.82 270664206.34 3045433576.48

Commissioned products 2862799.75 2862799.75

Contract performance

costs 254159.33 254159.33

Development costs 149842751.04 149842751.04

Total 4782467530.40 372699774.18 4409767756.22

(continued)

Beginning balance

Inventory falling price

Item reserves/impairment

Carrying balance Carrying value

provision of contract

performance costs

Raw materials 1297747452.36 56921789.83 1240825662.53

Semi-finished products 188626889.60 36212915.54 152413974.06

Products on hand 2925212679.95 252742763.86 2672469916.09

188Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Beginning balance

Inventory falling price

Item reserves/impairment

Carrying balance Carrying value

provision of contract

performance costs

Commissioned products 2574097.17 2574097.17

Contract performance

costs 254159.33 254159.33

Development costs

Total 4414415278.41 345877469.23 4068537809.18

(2) Inventory falling price reserves and impairment provision of contract performance costs

Increased

Item Beginning balance Withdrawn or

Others

transferred back

Raw materials 56921789.83 70103713.00

Semi-finished products 36212915.54 2165316.60

Products on hand 252742763.86 84294399.03

Commissioned products

Contract performance

costs

Development costs

Total 345877469.23 156563428.63

(Continued)

Item Decreased Ending balance

Write-off Other

Raw materials 61949071.27 380679.62 64695751.94

Semi-finished products 1038416.24 37339815.90

Products on hand 65588454.19 784502.36 270664206.34

Commissioned products

Contract performance

costs

Development costs

Total 128575941.70 1165181.98 372699774.18

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:

189Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

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

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

8. Current Portion of Non-current Assets

Item Ending balance Beginning balance Nature

Current portion of long-term 14630000.00 28105523.78 Finance leasing

receivable amount

Total 14630000.00 28105523.78

9. Other Current Assets

Item Ending balance Beginning balance

Principal and interests of

entrusted loans to associated 1544592633.44 1624197904.35

enterprises

Prepayments and deductible

taxes and refund of tax for 457991464.58 649198781.95

export receivable

Expenses to be deferred 17278894.58

Costs receivable for

14214651.9621501882.70

returning goods

Others 4763581.27 5064822.24

Total 2038841225.83 2299963391.24

10. Long-term Receivables

Ending balance

Item Bad debt

Carrying amount Carrying value

provision

Finance leasing amount

Of which: unrealized financing income

Cash deposits of long-term receivables 15430400.00 15430400.00

190Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Ending balance

Item Bad debt

Carrying amount Carrying value

provision

Long-term receivables of projects with

franchise rights

Less: Long-term receivables due within one

year (See Note VI-8 for details.) 14630000.00 14630000.00

Total 800400.00 800400.00

（Continued）

Beginning balance

Item Bad debt

Carrying amount Carrying value

provision

Finance leasing amount 10960622.92 10960622.92

Of which: unrealized financing income 390068.94 390068.94

Cash deposits of long-term receivables 35640400.00 35640400.00

Long-term receivables of projects with

franchise rights

Less: Long-term receivables due within one

year (See Note VI-8 for details.) 28105523.78 28105523.78

Total 18495499.14 18495499.14

191Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

11. Long-term Equity Investments

Increase/decrease

Adjustment of

Gains and losses

Investee Opening balance Additional Investment Cost method to other

recognized under the

investment reduced equity method comprehensive

equity method

income

Konka Ventures Development

(Shenzhen) Co. Ltd. (formerly“Konka Ventures Development 4895096.41 68062.48(Shenzhen) Co. Ltd.”)

Nanjing Zhihuiguang Information

Technology Research Institute Co. 1642793.07 43797.97

Ltd.Feidi Technology (Shenzhen) Co. 10468555.83 123048.04

Ltd. and its subsidiaries

Shenzhen Kangyue Enterprise Co. 32504265.03 -271849.15

Ltd.Foshan Pearl River Media Creative

Park Cultural Development Co. 4179700.00 -1345332.96

Ltd.Kangkai Technology Service 228931.64 -19883.32

(Chengdu) Co. Ltd.

Puchuang Jiakang Technology Co 1836583.36 1821901.35

Ltd.Chongqing Qingjia Electronics Co. 15034341.13 437734.72

192Notes to the Financial Statements of Konka Group Co. Ltd.

For the Year from 1 January 2022 to 31 December 2022 (all amounts in RMB yuan unless otherwise stated)

Increase/decrease

Adjustment of

Gains and losses

Investee Opening balance Additional Investment Cost method to other

recognized under the

investment reduced equity method comprehensive

equity method

income

Ltd.Shenzhen Jielunte Technology Co. 94278354.91 5470240.06

Ltd.Panxu Intelligence Co. Ltd. 52366635.10 1801410.64 -2775874.28

Orient Excellent (Zhuhai) Asset 5077777.37 2405086.69

Management Co. Ltd.Dongfang Konka No. 1 (Zhuhai)

Private Equity Investment Fund 467638787.38 5076700.00 11190298.97

(LP)

Tongxiang Wuzhen Kunyu Equity 3528077.43 -315.79

Investment Co. Ltd.Shenzhen RF-LINK Technology

Co. Ltd.Anhui Kaikai Shijie E-commerce 418721305.96

Co. Ltd.Kunshan Kangsheng Investment 317101869.51 -3617175.94

Development Co. Ltd.Chutian Dragon Co. Ltd. 647490626.93 141928645.31 22575475.16

Helongjiang Longkang Zhijia 1117531.32 1157647.82 40116.50

193Notes to the Financial Statements of Konka Group Co. Ltd.