Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. Tsann Kuen (China) Enterprise Co., Ltd.
Report for the First Quarter of 2014
Apr. 2014
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. Section I. Important Reminders
The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior management staff of Tsann Kuen (China) Enterprise Co., Ltd. (hereinafter referred to as “the Company”) warrant that this report is factual, accurate and complete without any false record,
misleading statement or material omission. And they shall be jointly and severally liable for that. Mr. Jian Derong, company principal, and Mr. Chen Zongyi, head of the accounting work& the
accounting division (head of accounting) jointly declare that the financial statements carried in this report are factual, accurate and complete.
All directors attended the board session for reviewing this report.
This report is prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail.
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. Section II. Financial Highlights& Change of Shareholders
I. Financial highlights
Does the Company adjust retrospectively or restate financial data of previous periods?
□ Yes√ No
Unit: RMB Yuan
|||||
|-|-|-|-|
||||YoY|
||Jan.-Mar. 2014|Jan.-Mar. 2013|increase/decreas|
||||e (%)|
|Operating revenues|424,258,718.53|424,878,316.41|-0.15%|
|Net profit attributable to shareholders of the Company|5,447,385.36|7,578,667.87|-28.12%|
|Net profit attributable to shareholders of the Company after extraordinary|11,424,272.23|4,128,159.49|176.74%|
|gains and losses||||
|Net cash flows from operating activities|-15,588,009.47|-28,409,039.92|45.13%|
|Basic EPS (RMB Yuan/share)|0.03|0.04|-25.00%|
|Diluted EPS (RMB Yuan/share)|0.03|0.04|-25.00%|
|Weighted average ROE (%)|1.04%|1.54%|-0.50%|
||||Increase/decreas|
||31 Mar. 2014|31 Dec. 2013||
||||e (%)|
|Total assets|2,048,719,512.95|1,690,801,284.83|21.17%|
|Owners’ equity attributable to shareholders of the Company (RMB Yuan)|527,675,019.15|520,693,211.26|1.34%|

 Items and amounts of extraordinary gains and losses
√Applicable□Inapplicable
Unit: RMB Yuan
||||
|-|-|-|
||Amount as of Jan.-Mar. 2014||
|Item||Note|
||(unit: RMB Yuan)||
|Gain/loss on the disposal of non-current assets (including the offset part of the asset|626,858.39||
|impairment provisions)|||
|Tax rebates, reductions or exemptions due to approval beyond authority or the lack|||
|of official approval documents|||
|Government grants recognized in the current period, except for those acquired in|1,913,721.00||
|the ordinary course of business or granted at certain quotas or amounts according to|||
|the government’s unified standards|||
|Capital occupation charges on non- financial enterprises that are recorded into|||
|current gains and losses|||

Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd.
|||
|-|-|
|Gains due to that the investment costs for the Company to obtain subsidiaries,||
|associates and joint ventures are lower than the enjoyable fair value of the||
|identifiable net assets of the investees when making the investments||
|Gain/loss on non-monetary asset swap||
|Gain/loss on entrusting others with investments or asset management||
|Asset impairment provisions due to acts of God such as natural disasters||
|Gain/loss on debt restructuring||
|Expenses on business reorganization, such as expenses on staff arrangements,||
|integration, etc.||
|Gain/loss on the part ove r the fair value due to transactions with distinctly unfair||
|prices||
|Current gains and losses of subsidies acquired from business combination under the||
|same control as from period-begin to combination date||
|Gain/loss on contingent events irrelevant to the Company’s normal business||
|Gains and losses on change in fair value from tradable financial assets and tradable|-16,884,375.90|
|financial liabilities, as well as investment income from disposal of tradable||
|financial assets and tradable financial liabilities an d financial assets available for||
|sales except for effective hedging related with normal businesses of the Company||
|Impairment provision reversal of accounts receivable on which the impairment test||
|is carried out separately||
|Gain/loss on entrustment loans||
|Gain/loss on change of the fair value of investing real estate of which the||
|subsequent measurement is carried out adopting the fair value method||
|Effect on current gains/losses when a one- off adjustment is made to current||
|gains/losses according to requirements of taxation, accounting and other relevant||
|laws and regulations||
|Custody fee income when entrusted with operation||
|Non-operating income and expense other than the above|5,026,120.65|
|Other gain and loss items that meet the definition of an extraordinary gain/loss||
|Less: Income tax effects|-1,980,504.05|
|Minority interests effects (after tax)|-1,360,284.94|
|Total|-5,976,886.87|

Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item□ Applicable√ Inapplicable
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. II. Total number of shareholders at the period-end and shares held by the top ten
shareholders
Unit: Share
||||||||
|-|-|-|-|-|-|-|
|Total number of shareholders at the|||||||
|||25,074|||||
|period-end|||||||
|Shares held by the top ten shareholders|||||||
|||||Number of the|Pledged or frozen shares||
||Nature of|Shareholding|Number of the||||
|Name of shareholder||||restricted shares|||
||shareholder|percentage (%)|shares held||Status of shares|Number of shares|
|||||held|||
|FORDCHEEDEVELOPMENTLIMITED|Foreigncorporation|29.1%|53,940,530|0|||
||||||N/A|N/A|
|EUPA INDUSTRYCORPORATIONLIMITED|Foreigncorporation|13.83%|25,633,718|0|||
||||||N/A|N/A|
|FILLMANINVESTMENTSLIMITED|Foreigncorporation|2.49%|4,621,596|0|||
||||||N/A|N/A|
|Chen Yongquan|Domestic naturalperson|0.9%|1,668,747|0|||
||||||N/A|N/A|
|Xia Qianru|Foreign naturalperson|0.7%|1,299,545|0|||
||||||N/A|N/A|
|Ou Yanping|Domestic naturalperson|0.65%|1,205,200|0|||
||||||N/A|N/A|
|Chen Lijuan|Foreign naturalperson|0.55%|1,012,791|0|||
||||||N/A|N/A|
|Chen Yongqing|Foreign naturalperson|0.53%|981,598|0|||
||||||N/A|N/A|
|Zou Shilin|Domestic naturalperson|0.46%|847,503|0|||
||||||N/A|N/A|
|CSC SECURITIES(HK) LTD.|Foreigncorporation|0.45%|833,136|0|||
||||||N/A|N/A|
|Shares held by the top ten floating share holders|||||||
|||Number of non-restricted shares||Type of shares|||
|Name of shareholder|||||||
|||held||Type||Number|
|FORDCHEE DEVELOPMENTLIMITED||53,940,530|||||
|||||Domestically listed foreign shares||53,940,530|
|EUPA INDUSTRY CORPORATION||25,633,718||Domestically listed foreign shares||25,633,718|

Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd.
|||||
|-|-|-|-|
|LIMITED||||
|FILLMAN INVESTMENTS LIMITED|4,621,596|Domestically listed foreign shares|4,621,596|
|Chen Yongquan 1,668,747||Domestically listed foreign shares|1,668,747|
|Xia Qianru 1,299,545||Domestically listed foreign shares|1,299,545|
|Ou Yanping 1,205,200||Domestically listed foreign shares|1,205,200|
|Chen Lijuan 1,012,791||Domestically listed foreign shares|1,012,791|
|Chen Yongqing 981,598||Domestically listed foreign shares|981,598|
|Zou Shilin 847,503||Domestically listed foreign shares|847,503|
|CSC SECURITIES (HK) LTD. 833,136||Domestically listed foreign shares|833,136|
||The top three shareholders are the Company ’s corporate controlling shareholders. It is|||
|Explanation on associated relationship||||
||unknown to the Company whether there exists associated relationship among the|||
|or persons acting in concert among the||||
||shareholders above or they are acting-in-concert entities as stipulated in the Administrative|||
|above-mentioned shareholders||||
||Measures on Information Disclosure of Changes in Shareholding of Listed Companies.|||

Did any shareholder of the Company carry out an agreed buy-back in the reporting period?
□ Yes√ No
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. Section III. Significant Events
I. Significant changes of the major accounting statement items and financial indicators for the reporting period, as well as the reasons for these changes
√ Applicable□ Inapplicable
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|SerialNo.|Item 31 Mar. 2014 31|Dec. 2013 +/-% Ma|in reasons for the ch|ange||
|1 Tra|nsactional financial assets 0.00||21,120,100.00|-100.00%|The assessed loss on the undelivered forward exchange contracts|
|2 Inte|rest receivable 3,927,621.02||110,833.33|3443.72%|Term savings increased.|
|3 Oth|er current assets 300,000,000.00||50,000,000.00|500.00%|Wealth management products acquired increased.|
|4 Co|nstruction in progress 5,070,173.28||10,889,671.98|-53.44%|Construction of plants was completed and transferred into fixed assets.|
|5 Sho|rt-term borrowings 370,971,630.00||30,484,500.00|1116.92%|Short-term borrowings from banks increased.|
|6 Tra|nsactional financial liabilities 2,840,152.9|4|0.00|100.00%|Loss on the undelivered forward exchange contracts|
|7 Not|es payable 8,392,334.92||30,577,887.89|-72.55%|Due notes payable were settled and L/C was adopted more often insettlement.|
|8 Ac|counts received in advance 17,772,988.95||10,431,654.59|70.38%|Advances from customers increased.|
|9 Tax|es and fares payable 776,804.52||-17,127,309.97|104.54%|The export tax rebates of last year were called back.|
|10 Int|erest payable 1,162,370.12||108,661.00|969.72%|Short-term borrowings increased.|
|11 Ot|her payables 205,324,087.09||69,376,770.31|195.96%|The Company secured some borrowings from related parties.|
|12 De|ferred income tax liabilities 217,318.67||3,258,742.65|-93.33%|Forward exchange transactions failed to generate returns at theperiod-beginning.|

|||||||
|-|-|-|-|-|-|
|SerialNo.|Item Jan.-Mar. 2014||Jan.-Mar. 2013|+/-% Mai|n reasons for the change|
|1 Bus|iness tax and surtaxes|2,430,498.24|746,142.20|225.74%|Business tax and surtaxes incurred by the export tax exemption, offsetand refund .|
|2 Fin|ancial expenses|- 7,457,267.79|276,017.39|-2801.74%|RMB depreciation created a favorable condition in currency exchangeand the interest income increased.|
|3 Ass|et impairment loss|- 5,248,202.75|1,846,599.75|-384.21%|Inventory falling-price provisions were written off and bad debts amongthe accounts receivable were collected.|
|4 Gai|n on fair value changes -23,960,252.|94|523,529.64|-4676.68%|The assessed loss on the undelivered forward exchange contracts.|
|5 Inv|estment gain|7,075,877.04|1,520,632.17|365.32%|The gain on delivered forward exchange contracts and wealthmanagement products increased.|
|6 No|n-operating income|7,623,739.38|2,986,661.35|155.26%|The governmental subsidies increased.|
|7 Inc|ome tax expenses|- 909,585.09|1,293,262.02|-170.33%|Forward exchange transactions failed to generate returns at theperiod-beginning, resulting in a decrease in deferred income taxexpenses.|
|8 Net|cash flows from operating activities|-15,588,009.47|-28,409,039.92|45.13%|Payments to suppliers decreased.|
|9 Net|cash flows from investing activities|-252,135,178.71|-7,906,884.84|-3088.81%|Wealth management products increased.|
|10 Ne|t cash flows from financing activities|468,848,906.82|231,831,944.50|102.24%|Export financings and borrowings from the controlling shareholderincreased.|

Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. II. Progress of significant events and analysis& explanations on their influence and solutions (I) Contingent events
Tsann Kuen Zhangzhou, one of the Company’s subsidiaries, and Xinda Motor Co., Ltd. (hereinafter refer to as “Xinda Motor”) signed a product supply contract on 20 Jul. 2009, with the valid period for the contract being from 1 Jul. 2009 to 30 Jun. 2012. Both parties also signed the 2011 ED Procurement Contract of Tsann Kuen Zhangzhou Enterprises Co., Ltd., the Special Agreement and other agreements, according to which Tsann Kuen Zhangzhou would purchase products from Xinda Motor. Later, Tsann Kuen Zhangzhou refused to pay for the products and chose to terminate the contract due to quality problems found in XindaMotor’s products. On 2 Nov. 2011, Xinda Motor filed a civil action against Tsann Kuen Zhangzhou to Zhangzhou IntermediatePeople’s Court, asking the court to order Tsann Kuen Zhangzhou to pay USD 479,089.06 (RMB 3,071,535.78) to it for the part of the contract that had been executed but not yet paid for, to bear the damages for overdue payment, and to continue to execute the unexecuted contractual obligation (equivalent to a payment of USD 189,423.25 for goods).
Tsann Kuen Zhangzhou filed a cross action on 8 Jan. 2012. Xinda Motor had caused serious economic loss and reputation damage on Tsann Kuen Zhangzhou for the products it provided for Tsann Kuen Zhangzhou did not go with the contract, due to which Tsann Kuen Zhangzhou produced products of ill quality, goods were returned and orders were canceled. On that basis, Tsann Kuen Zhangzhou asked Zhangzhou Intermediate People’s Court to terminate the contract between both parties and order Xinda Motor to pay to Tsann Kuen Zhangzhou a damage of RMB 1,000,000.00, and a compensation of RMB 7,621,576.00.
On 15 Aug. 2013, Zhangzhou IntermediatePeople’s Court issued the judgment of the first trial, with its contents as follows: 1. Defendant Tsann Kuen Zhangzhou Enterprise Co., Ltd. shall pay a product payment of USD
479,089.06 (RMB 3,071,535.78) to plaintiff Xinda Motor Co., Ltd. within 15 days from the date of entry into force of this Judgment; 2. Plaintiff Xinda Motor Co., Ltd. and third party Boluo County Lian Yuan Industry
Technology Co., Ltd. shall jointly pay liquidated damages of RMB 1,233,399.70 to defendant Tsann Kuen
Zhangzhou Enterprise Co., Ltd. within 15 days from the date of entry into force of this Judgment; 3. The 10 orders that have not been executed between plaintiff Xinda Motor Co., Ltd.& third party Boluo County Lian Yuan
Industry Technology Co., Ltd. and defendant Tsann Kuen Zhangzhou Enterprise Co., Ltd. shall be cancelled; 4. The other claims of plaintiff Xinda Motor Co., Ltd. shall be overruled; and 5. The other claims of defendant Tsann Kuen Zhangzhou Enterprise Co., Ltd. shall be overruled. Both parties were not satisfied with the judgment of the first trial and filed appeals.
Up to the date of this report, the outstanding carrying amount due from Tsann Kuen Zhangzhou to Xinda Motor was USD 479,089.06. Since the case is currently in the second trial, Tsann Kuen Zhangzhou has not yet
recognized the contingent asset of RMB 1,233,399.70 on Xinda Motor.
Meanwhile, the defective motor products provided by Xinda Motor were 104,691 units and only 23,035 units of them were handled in this case, leaving 81,656 units un-handled. Therefore, Tsann Kuen Zhangzhou filed another suit in Zhangzhou Intermediate People’s Court on 24 Dec. 2013, with the involved amount being RMB
3,702,957.93. Zhangzhou IntermediatePeople’s Court has accepted the case and will open a court session on 9 Jul. 2014.
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. (II) Sale of assets:
Due to operating needs, the following assets were sold in the reporting period:
Unit: RMB Ten Thousand Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||Proportion of||||||||
|||||Net profit|||||Related relation|||||
|||||||the net profit||||||||
|||||contributed bythe sold asset||contributed by||Whether wa|ship with the c|Whether the|Whether the i|||
||||Selling|to the listed|Influence|the sold asset to|Pricing|s related p|ounterparty (ap|involving|nvolving clai|Disclosu|Disclosure|
|Transaction party|Asset sold|Selling date|||on the|the listed||||property right|ms and debts|||
||||price|companies|||principle|arty transa|plied for the re|||re date|index|
||||||Company|companies of||||had wholly|had wholly|||
|||||fromperiod-begin||the total amount||ction|lated transactio|transferred|transferred|||
|||||to date of sale||of the net profit|||n)|||||
|||||||(%)||||||||
|Tsann Kuen EnterpriseCo., Ltd.|Otherequipment|2014.01.24 10.|01|0.87|0.87|0.16%|Thetransactionpricesweredecidedbased onthe marketprice andsettledaccordingto thesignedcontract ofbothparties.|Related party|Under the samecontrol of theactual controller|Yes Yes||Inapplicable|Inapplicable|
|HAVELLS Mould 2014.02|.28 42.75|||35.28|35.28|6.48%||Non-relatedparty|Inapplicable Y|es Yes||Inapplicable|Inapplicable|
|PRME|Hardwareequipment|2014.02.28 8.70||7.28|7.28|1.34%||||||||
|DOB|Otherequipment|2014.02.28 0.64||0.55|0.55|0.10%||||||||
|Hailong|Otherequipment|2014.02.28 1.20||1.03|1.03|0.19%||||||||
|Shengyuan|Otherequipment|2014.02.28 2.40||2.05|2.05|0.38%||||||||
|Yuejia Electronics|Moldingequipment|2014.03.31 6.50||1.34|1.34|0.25%||||||||
|Yixin|Otherequipment|2014.03.31 0.15||0.13|0.13|0.02%||||||||
|Yixin|Hardwareequipment|2014.03.31 0.80||0.78|0.78|0.14%||||||||
|Fushun|Hardwareequipment|2014.03.31 11.|00|9.61|9.61|1.76%||||||||
|Huaruixing|Bakeliteequipment|2014.03.31 1.79||1.71|1.71|0.31%||||||||
|Total 85.94||||60.63|60.63|11.13%||||||||

Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. III. Commitments made by the Company or shareholders holding over5% of the Company’s shares in the reporting period or such commitments carried down into the reporting period
|||||||
|-|-|-|-|-|-|
||||Time of|||
||Commitment|||Period of||
|Commitment||Contents|making||Fulfillment|
||maker|||commitment||
||||commitment|||
|Commitments made in a share||||||
|reform||||||
|Commitments made in an||||||
|acquisition report or a report on||||||
|equity changes||||||
|Commitments made in asset||||||
|reorganization||||||
|Commitments made in the first||||||
|public offering or refinancing.||||||
|||Based on the confidence on the||||
|||continuous and stable development of the|||The Company’s|
|||Company, it committed to increase the||||
||||||stocks resumed|
|||shareholding if the Company’s stock price||||
||||||trading on 31 Dec.|
|||was lower than HKD2.40 per share after||||
||||||2012, but the|
|||the implementation of the shares||||
||||||Company’s stock|
|||contraction and trading resumption, and it||||
|||would increase no more than 2% shares||Within one year|price hasn’t met thecondition for|
|Other commitments made to|FILLMANINVESTMENTS LIMITED)|(i.e. 370,780,000 shares) of the totalshares issued by the Company within oneyear since the date of initial shareholding|28 Dec. 2012|since the date ofinitialshareholding|shareholding|
|minority shareholders|||||increase since the|
|||increase. If the plan on increasing holding||increase|date of tradingresumption,|
|||2% shares of the total shares is completed,||||
||||||FILLMAN|
|||if the stock price hasn’t reached the target||||
||||||Investment Limited|
|||price, it will perform relevant approval||||
||||||hasn’t implemented|
|||procedures, and propose to CSRC on||||
||||||the shareholding|
|||continuous implementation of||||
||||||increase plan.|
|||shareholding increase by exemption of||||
|||offering.||||
|Executed in time or not?|Yes|||||
|Detailed reason for failing to|The Company’s stocks resumed trading on 31 Dec. 2012, but the Company’s stock price hasn’t met the condition|||||
|execute and the plan for the next|for shareholding increase since the date of trading resumption, FILLMAN Investment Limited hasn ’t implemented|||||
|step (If any)|the shareholding increase plan.|||||

IV. Predict the operating results of Jan.-Jun. 2014
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the next reporting period according to prediction, as well as explanations on the reasons
□Applicable√Inapplicable
V. Securities investment
Explanation of the situation of holding the equities of other listed companies
□Applicable√Inapplicable
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. VI. Investments in derivatives
Unit: (RMB) Ten thousand Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Proportion of||
|||||||||||the closing|Actual|
|||Related-party|Type of|Initial|||Opening|Impairment|Closing|investment||
|Operator|Relation|transaction or|derivative|investment|Beginning date|Ending date|investment|provision (if|investment|amount in the|gain/loss in|
||||||||||||reporting|
|||not|investment|amount|||amount|any)|amount|Company’s|period|
|||||||||||closing net||
|||||||||||assets (%)||
|Bank No No|||Forwardexchange|113,306.52|1 Jan. 2014|31 Mar. 2014|95,896.14||94,356.70|178.82%|-1,894.57|
|Total||||113,306.52|||95,896.14||94,356.70|178.82%|-1,894.57|
|Capital source for derivative investment Self-owned||||funds||||||||
|Litigation cases situation||||N/A||||||||
|Disclosure date of the board announcement approving the||||||||||||
|||||2013/3/12||||||||
|wealth management entrustment||||||||||||
|Disclosure date of the general meeting announcement||||||||||||
|||||2013/5/18||||||||
|approving the wealth management entrustment||||||||||||
|||||1. Analysis on risks from holding of derivative products: gains or losses from difference between contracted exchange rate andmarket exchange rate on value date.2. Control measures(1) Principle: The purpose of the financial derivative operation is to avoid risks. The Company shall not conduct transactionaloperation for other purposes than risk avoidance. The Company shall not conduct complex derivative trading above the ac tualoperation needs and shall not speculate in derivative trading with hedging as an excuse. The overall contractual amount for riskavoidance of the Company shall not exceed the summation of the net risk exposure of the existing assets and liabilities an d thenet risk exposure of assets and liabilities arising from the operation of the Company in the coming year.(2) Staff requirements: Personnel taking part in the investment shall all fully understand the risks of derivative investment andstrictly execute the business operation and risk management mechanisms for derivative investment.(3) Operation standardization: Before making a derivative investment, the Company shall rationally equip itself withprofessional personnel for investment decision-making, business operation, risk control, etc. It shall also inquire and compareamong various markets and products. Besides, it shall strictly control the variety and size of derivative investment and try tochoose derivative trading on exchange as much as possible.(4) Periodic evaluation: Derivative investments shall be evaluated at least twice for a month and the evaluation report shall besent to a high-ranking executive authorized by the Board of Directors. And a derivative investment report shall be sent to theBoard of Directors annually.(5) Loss limit: The investment loss on a single derivative and all the investment loss shall not exceed 20% of the total investmentamount.||||||||
|Analysis on risks and control measures of derivative products||||||||||||
|held in the reporting period (including but not lim ited to||||||||||||
|market risk, liquidity risk, credit risk, operation risk, law risk,||||||||||||
|etc.)||||||||||||

Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd.
|||
|-|-|
||(6) Audit system: The audit department audits derivative product trading periodically and submits audit reports to relevant units.|
||(1) Gains and losses effected by completed transaction amount of derivative products was RMB 5.0146 million , and loss fromundelivered transaction was RMB 23.9603 million, of which the of revenue rotation of the undelivered forward exchangeassessment was of RMB 21.1201 million.(2) The former contracted bank provided monthly sheets of estimated exchange rates for the undue contracted forward exchangeson the last trading day of the month.(3) The profit and loss from fair value cha nges of the derivative was confirmed according to the difference between thecontracted amount undue by the month*the estimated exchange rate and the currency amount when bought in.|
|Changes of market prices or fair values in the reporting period||
|of the invested derivatives. And the analysis on the fair value||
|of the derivatives should include the specific use methods and||
|the relevant assumptions and parameters.||
|Whether significant changes occurred to the Company’s|There were no significant changes between the Company’s accounting policy and specific accounting principles of derivatives inthe reporting period and those in the last reporting period.|
|accounting policy and specific accounting principles of||
|derivatives in the reporting period compared to the previous||
|reporting period||
|Special opinion from independent directors, sponsor or|The Company has carried out a strict internal assessment for the financial derivative business and has established acorresponding supervision mechanism. We are of the opinion that the financial derivative business conducted by the Company isfairly necessary in its routine operation and is in compliance with relevant laws and regulations, with the risks controllable.|
|financial consultant on the Company ’s derivatives investment||
|and risk control||

 VII. Researches, visits and interviews received in the reporting period
|||||||
|-|-|-|-|-|-|
||||||Main discussion and|
|Time of reception|Place of reception|Way of reception|Visitor type|Visitor|materials provided by the|
||||||Company|
||||||Operating situation of the|
|28 Feb. 2014|The office of the|TelephoneICommunication|ndividual|Mr. Yu|Company, relevant policies|
||Company||||of B shares; had not offer|
||||||any written sources.|

Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. Section IV. Financial Statements
I. Financial statements
1. Consolidated balance sheet
Prepared by TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|1,040,319,224.03|834,088,959.68|
|Settlement reserves|||
|Intra-group lendings|||
|Transactional financial assets||21,120,100.00|
|Notes receivable|2,295,968.41|2,467,447.00|
|Accounts receivable|197,852,598.73|253,823,475.86|
|Accounts paid in advance|5,582,911.95|4,290,802.70|
|Premiums receivable|||
|Reinsurance premiums receivable|||
|Receivable reinsurance contract reserves|||
|Interest receivable|3,927,621.02|110,833.33|
|Dividend receivable|||
|Other accounts receivable|30,333,829.71|32,339,652.22|
|Financial assets purchased under agreements to resell|||
|Inventories|191,901,834.83|209,824,098.90|
|Non-current assets due within 1 year|||
|Other current assets|300,000,000.00|50,000,000.00|
|Total current assets|1,772,213,988.68|1,408,065,369.69|
|Non-current assets:|||
|Loans by mandate and advances granted|||
|Available-for-sale financial assets|||
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|40,000.00|40,000.00|
|Investing property|56,546,533.15|58,732,511.36|
|Fixed assets|175,113,609.64|173,152,964.50|
|Construction in progress|5,070,173.28|10,889,671.98|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|11,735,571.55|11,803,252.87|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|3,906,746.64|4,355,866.63|
|Deferred income tax assets|22,401,592.66|23,761,647.80|
|Other non-current assets|1,691,297.35||
|Total of non-current assets|276,505,524.27|282,735,915.14|
|Total assets|2,048,719,512.95|1,690,801,284.83|

Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current liabilities:|||
|Short-term borrowings|370,971,630.00|30,484,500.00|
|Borrowings from Central Bank|||
|Customer bank deposits and due to banks and other|||
|financial institutions|||
|Intra-group borrowings|||
|Transactional financial liabilities|2,840,152.94||
|Notes payable|8,392,334.92|30,577,887.89|
|Accounts payable|525,082,894.94|648,629,156.16|
|Accounts received in advance|17,772,988.95|10,431,654.59|
|Financial assets sold for repurchase|||
|Handling charges and commissions payable|||
|Employee’s compensation payable|33,138,140.31|40,748,328.96|
|Tax payable|776,804.52|-17,127,309.97|
|Interest payable|1,162,370.12|108,661.00|
|Dividend payable|||
|Other accounts payable|205,324,087.09|69,376,770.31|
|Reinsurance premiums payable|||
|Insurance contract reserves|||
|Payables for acting trading of securities|||
|Payables for acting underwriting of securities|||
|Non-current liabilities due within 1 year|||
|Other current liabilities|||
|Total current liabilities|1,165,461,403.79|813,229,648.94|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Long-term payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income tax liabilities|217,318.67|3,258,742.65|
|Other non-current liabilities|222,600.00|222,600.00|
|Total non-current liabilities|439,918.67|3,481,342.65|
|Total liabilities|1,165,901,322.46|816,710,991.59|
|Owners’ equity (or shareholders’ equity)|||
|Paid-up capital (or share capital)|185,391,680.00|185,391,680.00|
|Capital reserves|278,454,447.07|278,454,447.07|
|Less: Treasury stock|||
|Specific reserves|||
|Surplus reserves|11,495,983.58|11,495,983.58|
|Provisions for general risks|||
|Retained profits|52,180,688.79|46,733,303.43|
|Foreign exchange difference|152,219.71|-1,382,202.82|
|Total equity attributable to owners of the Company|527,675,019.15|520,693,211.26|
|Minority interests|355,143,171.34|353,397,081.98|
|Total owners’ (or shareholders’) equity|882,818,190.49|874,090,293.24|
|Total liabilities and owners’ (or shareholders’) equity|2,048,719,512.95|1,690,801,284.83|

Legal representative: Jian Derong Chief of the accounting work: Chen Zongyi Chief of the accounting organ: Chen Zongyi
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. 2. Balance sheet of the Company
Prepared by TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|14,343,643.50|11,811,615.43|
|Transactional financial assets|||
|Notes receivable|2,295,968.41|822,974.00|
|Accounts receivable|9,661,625.97|39,868,837.59|
|Accounts paid in advance|224,512.97|418,695.09|
|Interest receivable|||
|Dividend receivable|||
|Other accounts receivable|2,152,057.90|1,195,292.22|
|Inventories|4,876,970.53|4,346,896.79|
|Non-current assets due within 1 year|||
|Other current assets|||
|Total current assets|33,554,779.28|58,464,311.12|
|Non-current assets:|||
|Available-for-sale financial assets|||
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|985,854,030.83|985,854,030.83|
|Investing property|47,357,317.37|48,731,726.97|
|Fixed assets|616,259.25|646,980.59|
|Construction in progress||92,700.00|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|206,499.64|313,667.95|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|1,034,238.08|1,126,312.61|
|Deferred income tax assets|4,228,126.98|4,228,126.98|
|Other non-current assets|92,700.00||
|Total of non-current assets|1,039,389,172.15|1,040,993,545.93|
|Total assets|1,072,943,951.43|1,099,457,857.05|
|Current liabilities:|||
|Short-term borrowings|||
|Transactional financial liabilities|||
|Notes payable|||
|Accounts payable|47,002,757.80|87,479,703.39|
|Accounts received in advance|10,193,856.81|988,253.99|
|Employee ’s compensation payable|1,108,085.09|1,175,146.87|

Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Tax payable|1,237,106.88|956,841.14|
|Interest payable|||
|Dividend payable|||
|Other accounts payable|492,694,502.92|491,868,854.25|
|Non-current liabilities due within 1 year|||
|Other current liabilities|||
|Total current liabilities|552,236,309.50|582,468,799.64|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Long-term payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|0.00|0.00|
|Total liabilities|552,236,309.50|582,468,799.64|
|Owners’ equity (or shareholders’ equity)|||
|Paid-up capital (or share capital)|185,391,680.00|185,391,680.00|
|Capital reserves|271,485,181.40|271,485,181.40|
|Less: Treasury stock|||
|Specific reserves|||
|Surplus reserves|11,495,983.58|11,495,983.58|
|Provisions for general risks|||
|Retained profits|52,334,796.95|48,616,212.43|
|Foreign exchange difference|||
|Total owners’ (or shareholders’) equity|520,707,641.93|516,989,057.41|
|Total liabilities and owners ’ (or shareholders ’)|||
||1,072,943,951.43|1,099,457,857.05|
|equity|||

Legal representative: Jian Derong Chief of the accounting work: Chen Zongyi Chief of the accounting organ: Chen Zongyi
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. 3. Consolidated income statement
Prepared by TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Mar. 2014|Jan.-Mar. 2013|
|I. Operating revenues|424,258,718.53|424,878,316.41|
|Including: Sales income|424,258,718.53|424,878,316.41|
|Interest income|||
|Premium income|||
|Handling charge and commission income|||
|II. Total operating cost|409,168,627.22|419,000,253.40|
|Including: Cost of sales|369,674,443.64|362,729,320.18|
|Interest expenses|||
|Handling charge and commission expenses|||
|Surrenders|||
|Net claims paid|||
|Net amount withdrawn for the insurance contract reserve|||
|Expenditure on policy dividends|||
|Reinsurance premium|||
|Taxes and associate charges|2,430,498.24|746,142.20|
|Selling and distribution expenses|15,550,356.79|16,237,180.87|
|Administrative expenses|34,218,799.09|37,164,993.01|
|Financial expenses|-7,457,267.79|276,017.39|
|Asset impairment loss|-5,248,202.75|1,846,599.75|
|Add: Gain/(loss) from change in fair value (“-” means loss)|-23,960,252.94|523,529.64|
|Gain/(loss) from investment (“-” means loss)|7,075,877.04|1,520,632.17|
|Including: share of profits in associates and joint ventures|||
|Foreign exchange gains (“-” means loss)|||
|III. Business profit (“-” means loss)|-1,794,284.59|7,922,224.82|
|Add: non-operating income|7,623,739.38|2,986,661.35|
|Less: non-operating expense|57,039.34|36,288.86|
|Including: loss from non-current asset disposal|14,857.02|21,954.21|
|IV. Total profit (“-” means loss)|5,772,415.45|10,872,597.31|
|Less: Income tax expense|-909,585.09|1,293,262.02|
|V. Net profit (“-” means loss)|6,682,000.54|9,579,335.29|
|Including: Net profit achieved by combined parties before the|||
|combinations|||
|Attributable to owners of the Company|5,447,385.36|7,578,667.87|
|Minority shareholders’ income|1,234,615.18|2,000,667.42|
|VI. Earnings per share|--|--|
|(I) Basic earnings per share|0.03|0.04|
|(II) Diluted earnings per share|0.03|0.04|
|VII. Other comprehensive incomes|1,534,422.53|3,143,700.62|
|VIII. Total comprehensive incomes|8,216,423.07|12,723,035.91|
|Attributable to owners of the Company|6,981,807.89|10,722,368.49|
|Attributable to minority shareholders|1,234,615.18|2,000,667.42|

 Legal representative: Jian Derong Chief of the accounting work: Chen Zongyi Chief of the accounting organ: Chen Zongyi
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. 4. Income statement of the Company
Prepared by TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Mar. 2014|Jan.-Mar. 2013|
|I. Operating revenues|19,668,041.34|14,033,533.23|
|Less: operating costs|12,827,510.42|9,440,705.71|
|Business taxes and surcharges|323,834.21|243,736.32|
|Distribution expenses|1,616,468.48|1,129,123.84|
|Administrative expenses|2,781,031.86|1,340,721.67|
|Financial costs|-42,307.79|-30,339.32|
|Impairment loss|-1,556,664.17|-1,265.05|
|Add: gain/(loss) from change in fair value (“-” means loss)|||
|Gain/(loss) from investment (“-” means loss)||7,533.00|
|Including: income form investment on associates and joint|||
|ventures|||
|II. Business profit (“-” means loss)|3,718,168.33|1,918,383.06|
|Add: non-business income|416.19|774,627.02|
|Less: non-business expense|||
|Including: loss from non-current asset disposal|||
|III. Total profit (“-” means loss)|3,718,584.52|2,693,010.08|
|Less: income tax expense|||
|IV. Net profit (“-” means loss)|3,718,584.52|2,693,010.08|
|V. Earnings per share|--|--|
|(I) Basic earnings per share|||
|(II) Diluted earnings per share|||
|VI. Other comprehensive income|||
|VII. Total comprehensive income|3,718,584.52|2,693,010.08|

 Legal representative: Jian Derong Chief of the accounting work: Chen Zongyi Chief of the accounting organ: Chen Zongyi
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. 5. Consolidated cash flow statement
Prepared by TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Mar. 2014|Jan.-Mar. 2013|
|I. Cash flows from operating activities:|||
|Cash received from sale of commodities and rendering of service|472,050,234.57|501,946,380.82|
|Net increase of deposits from customers and dues from banks|||
|Net increase of loans from the central bank|||
|Net increase of funds borrowed from other financial institutions|||
|Cash received from premium of original insurance contracts|||
|Net cash received from reinsurance business|||
|Net increase of deposits of policy holders and investment fund|||
|Net increase of disposal of tradable financial assets|||
|Cash received from interest, handling charges and commissions|||
|Net increase of intra-group borrowings|||
|Net increase of funds in repurchase business|||
|Tax refunds received|71,980,717.35|60,384,540.74|
|Other cash received relating to operating activities|26,368,981.31|27,491,106.59|
|Subtotal of cash inflows from operating activities|570,399,933.23|589,822,028.15|
|Cash paid for goods and services|458,851,343.59|503,436,795.67|
|Net increase of customer lendings and advances|||
|Net increase of funds deposited in the central bank and amount due|||
|from banks|||
|Cash for paying claims of the original insurance contracts|||
|Cash for paying interest, handling charges and commissions|||
|Cash for paying policy dividends|||
|Cash paid to and for employees|65,483,557.51|63,454,007.41|
|Various taxes paid|8,264,059.89|10,366,404.15|
|Other cash payment relating to operating activities|53,388,981.71|40,973,860.84|
|Subtotal of cash outflows from operating activities|585,987,942.70|618,231,068.07|
|Net cash flows from operating activities|-15,588,009.47|-28,409,039.92|
|II. Cash flows from investing activities:|||
|Cash received from withdrawal of investments|55,014,569.58|1,470,378.53|
|Cash received from return on investments|2,172,140.79||
|Net cash received from disposal of fixed assets, intangible assets|||
||439,943.13|3,947,653.12|
|and other long-term assets|||
|Net cash received from disposal of subsidiaries or other business|||
|||99,000.00|
|units|||
|Other cash received relating to investing activities|||
|Subtotal of cash inflows from investing activities|57,626,653.50|5,517,031.65|
|Cash paid to acquire fi xed assets, intangible assets and other|||
||9,761,832.21|13,423,916.49|
|long-term assets|||
|Cash paid for investment|300,000,000.00||
|Net increase of pledged loans|||
|Net cash paid to acquire subsidiaries and other business units|||
|Other cash payments relating to investing activities|||
|Subtotal of cash outflows from investing activities|309,761,832.21|13,423,916.49|
|Net cash flows from investing activities|-252,135,178.71|-7,906,884.84|

Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd.
||||
|-|-|-|
|Item|Jan.-Mar. 2014|Jan.-Mar. 2013|
|III. Cash flows from financing Activities:|||
|Cash received from capital contributions|||
|Including: Cash received from minority shareholder investments|||
|by subsidiaries|||
|Cash received from borrowings|338,139,940.00|125,387,600.00|
|Cash received from issuance of bonds|||
|Other cash received relating to financing activities|143,957,350.00|106,608,300.00|
|Subtotal of cash inflows from financing activities|482,097,290.00|231,995,900.00|
|Repayment of borrowings|||
|Cash paid for interest expenses and distribution of dividends or|||
||944,183.18|163,955.50|
|profit|||
|Including: dividends or profit paid by subsidiaries to minority|||
|shareholders|||
|Other cash payments relating to financing activities|12,304,200.00||
|Sub-total of cash outflows from financing activities|13,248,383.18|163,955.50|
|Net cash flows from financing activities|468,848,906.82|231,831,944.50|
|IV. Effect of foreign exchange rate changes on cash and cash|||
||5,104,545.71|-1,551,459.05|
|equivalents|||
|V. Net increase in cash and cash equivalents|206,230,264.35|193,964,560.69|
|Add: Opening balance of cash and cash equivalents|834,088,959.68|759,361,575.52|
|VI. Closing balance of cash and cash equivalents|1,040,319,224.03|953,326,136.21|

 Legal representative: Jian Derong Chief of the accounting work: Chen Zongyi Chief of the accounting organ: Chen Zongyi
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. 6. Cash flow statement of the Company
Prepared by TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Mar. 2014|Jan.-Mar. 2013|
|I. Cash flows from operating activities:|||
|Cash received from sale of commodities and rendering of service|56,243,897.26|9,750,164.61|
|Tax refunds received|||
|Other cash received relating to operating activities|14,183,210.67|13,777,633.02|
|Subtotal of cash inflows from operating activities|70,427,107.93|23,527,797.63|
|Cash paid for goods and services|54,480,417.57|3,509,553.52|
|Cash paid to and for employees|9,944,933.01|10,134,529.22|
|Various taxes paid|1,184,029.17|416,609.55|
|Other cash payment relating to operating activities|2,291,960.23|16,986,336.66|
|Subtotal of cash outflows from operating activities|67,901,339.98|31,047,028.95|
|Net cash flows from operating activities|2,525,767.95|-7,519,231.32|
|II. Cash flows from investing activities:|||
|Cash received from retraction of investments|||
|Cash received from return on investments|||
|Net cash received from disposal of fixed assets, intangible assets and|||
|||797,450.00|
|other long-term assets|||
|Net cash received from disposal of subsidiaries or other business units|||
|Other cash received relating to investing activities|||
|Subtotal of cash inflows from investing activities|0.00|797,450.00|
|Cash paid to acquire fixed assets, intangible assets and other long-term|||
||735.90||
|assets|||
|Cash paid for investment|||
|Net cash paid to acquire subsidiaries and other business units|||
|Other cash payments relating to investing activities|||
|Subtotal of cash outflows from investing activities|735.90|0.00|
|Net cash flows from investing activities|-735.90|797,450.00|
|III. Cash flows from financing activities:|||
|Cash received from capital contributions|||
|Cash received from borrowings|||
|Cash received from issuance of bonds|||
|Other cash received relating to financing activities|||
|Subtotal of cash inflows from financing activities|||
|Repayment of borrowings|||
|Cash paid for interest expenses and distribution of dividends or profit|||
|Other cash payments relating to financing activities|||
|Sub-total of cash outflows from financing activities|||
|Net cash flows from financing activities|||
|IV. Effect of foreign exchange rate changes on cash and cash equivalents|6,996.02|-3,986.18|
|V. Net increase in cash and cash equivalents|2,532,028.07|-6,725,767.50|
|Add: Opening balance of cash and cash equivalents|11,811,615.43|17,652,594.45|
|VI. Closing balance of cash and cash equivalents|14,343,643.50|10,926,826.95|

Legal representative: Jian Derong Chief of the accounting work: Chen Zongyi Chief of the accounting organ: Chen Zongyi
Report for the First Quarter of 2014 of Tsann Kuen (China) Enterprise Co., Ltd. II. Audit report
Is this report audited?
□ Yes√ No
This report is not audited.