2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
2018 SEMI-ANNUAL REPORT
(Unaudited)
August 2018
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Section I. Important Statements, Contents& Terms
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 ormaterial omission.Andthey shall bejointly and severally liablefor that. All directors attended theboardsession for reviewing thisReport.
Investors are kindly reminded to read the full text of this Report carefully and pay special attention to the risks mentioned in “X. Risks facing the Company and countermeasures” under “Section IV. Performance Discussion&Analysis”.
The Company plans not to distribute cash dividends or bonus shares or turn capital reserve into share capital.
Mr. Pan Zhirong, company principal, and Mr. Feng Zhiqing, 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.
English translation is for reference only. Should there be any discrepancy between the two versions, the Chineseversion shall prevail.
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Contents
Section I. Important Statements, Contents& Terms......................................................2 Section II. Company Profile& Financial Highlights.....................................................5 Section III. Business Highlights.....................................................................................8 Section IV. Performance Discussion&Analysis...........................................................9 Section V. Significant Events........................................................................................21 Section VI. Change in Shares& Shareholders.............................................................35 Section VII. Preference Shares.....................................................................................38 Section VIII. Directors, Supervisors& Senior Management Staff..............................38 Section IX. Corporate Bonds........................................................................................39 Section X. Financial Report..........................................................................................39 Section XI. DocumentsAvailable for Reference..........................................................40
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Terms
||||
|-|-|-|
|Term|Refersto|Contents|
|XiamenTsannKuen,TKCB,Company,theCompany,TKC|Refersto|TSANNKUEN(CHINA)ENTERPRISECO.,LTD.|
|TsannKuenZhangzhou,TKL|Refersto|TsannKuen(Zhangzhou)EnterpriseCo.,Ltd.|
|TsannKuenShanghai,TKS|Refersto|TsannKuenChina(Shanghai)EnterpriseCo.,Ltd.|
|SouthPortElectronics,TKN|Refersto|TsannKuen(Zhangzhou)SouthPortElectronicsEnterpriseCo.,Ltd.|
|STD|Refersto|ShanghaiCanxingTradingCo.,Ltd.|
|EastSinoDevelopment|Refersto|EastSinoDevelopmentLimited|
|SCI|Refersto|Pt.StarComgisticIndonesia|
|OrientStarInvestments|Refersto|OrientStarInvestmentsLimited|
|TsannkuenEdgeIntelligence|Refersto|TsannkuenEdgeIntelligenceCo.,Ltd.|
|TKCD|Refersto|XiamenTsannkuenHomeApplianceDesignCo.,Ltd.|
|SCPDI|Refersto|Pt.StarComgisticPropertyDevelopmentIndonesia|
|TKI|Refersto|TsannKuen(Zhangzhou)InvestmentCo.,Ltd.|
|RMB|Refersto|RMBYUAN|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Section II. Company Profile& Financial Highlights
I. Basicinformation abouttheCompany
|||||
|-|-|-|-|
|Stockname|TKCB|Stockcode|200512|
|Stockexchange|ShenzhenStockExchange|||
|ChinesenameoftheCompany|厦门灿坤实业股份有限公司|||
|Abbr.oftheChinesenameoftheCompany|闽灿坤|||
|EnglishnameoftheCompany|TSANNKUEN(CHINA)ENTERPRISECO.LTD.|||
|Abbr.oftheEnglishnameoftheCompany|TKC|||
|LegalrepresentativeoftheCompany|PanZhirong|||

II. Contact information
||||
|-|-|-|
||BoardSecretary|SecuritiesRepresentative|
|Name|SunMeimei|DongYuanyuan|
|Contactaddress|TSANN KUEN Industrial Park, Taiwanese InvestmentZone,Zhangzhou,FujianProvince,P.R.China|TSANN KUEN Industrial Park, Taiwanese InvestmentZone,Zhangzhou,FujianProvince,P.R.China|
|Tel.|0596-6268161|0596-6268103|
|Fax|0596-6268104|0596-6268104|
|E-mail|mm_sun@tkl.tsannkuen.com|yy_dong@tkl.tsannkuen.com|

III. Other information
1.WaystocontacttheCompany
Did any change occur to the registered address, office address and their postal codes, website address and email address of the CompanyduringtheReportingPeriod?
□Applicable√Notapplicable
2.AboutinformationdisclosureandwherethisReportisplaced
DidanychangeoccurtoinformationdisclosuremediaandwherethisReportisplacedduringtheReportingPeriod?
□Applicable√Notapplicable
3.Otherrelevantinformation
DidanychangeoccurtootherrelevantinformationduringtheReportingPeriod?
□Applicable√Notapplicable
IV.Accounting and financialhighlights
DoestheCompanyneedtoadjustretrospectivelyorrestateaccountingdataofpreviousperiods?
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.□Yes√No
Unit:RMBYuan
|||||
|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|YoY+/-（％）|
|Operatingrevenue|691,510,505.23|869,683,758.68|-20.49|
|NetprofitattributabletoshareholdersoftheCompany|-28,341,686.77|11,066,574.11|-356.10|
|Net profit attributable to shareholders of the Company beforeextraordinarygainsandlosses|-31,209,045.03|6,803,673.06|-558.71|
|Netcashflowsfromoperatingactivities|-119,821,570.49|-57,511,295.96|-108.34|
|BasicEPS(RMBYuan/share)|-0.15|0.06|-350.00|
|DilutedEPS(RMBYuan/share)|-0.15|0.06|-350.00|
|WeightedaverageROE(%)|-4.73|1.79|-6.52|
|Item|AsattheendoftheReportingPeriod|Asattheendoflastyear|+/-(%)|
|Totalassets|1,583,091,285.43|1,778,825,153.51|-11.00|
|NetassetsattributabletoshareholdersoftheCompany|567,601,992.34|610,814,327.77|-7.07|

 TotalsharesoftheCompanyasatclosureofthelasttradingdaybeforethedisclosureofthisReport:
|||
|-|-|
|Total shares of the Company as at closure of the last tradingdaybeforethedisclosureofthisReport(share)|185,391,680|
|Fully diluted EPS based on the latest total shares (RMBYuan/share)|-0.15|

V. Differences between accounting data under domesticandoverseas accountingstandards 1. Differences of net profit and net assets disclosed in financial reports prepared under international and Chineseaccountingstandards
□Applicable√Notapplicable
NodifferenceintheReportingPeriod.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chineseaccountingstandards
□Applicable√Notapplicable
NodifferenceintheReportingPeriod.
3. Explain reasons for the differences between accounting data under domestic and overseas accounting standards
□Applicable√Notapplicable
VI.Items andamounts ofextraordinary gains andlosses
√Applicable□Notapplicable
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Unit:RMBYuan
||||
|-|-|-|
|Item|Amount|Explanation|
|Gains/lossesonthedisposalofnon-currentassets(includingtheoffsetpartofassetimpairmentprovisions)|376,183.60|Gains/lossesonthedisposalofassets|
|Tax rebates, reductions or exemptions due to approval beyond authority orthelackofofficialapprovaldocuments|||
|Government grants recognized in the current period, except for thoseacquired in the ordinary course of business or granted at certain quotas oramountsaccordingtothecountry’sunifiedstandards|1,845,853.00||
|Capital occupation charges on non-financial enterprises that recorded intocurrentgainsandlosses|||
|Gains due to that the investment costs for the Company to obtainsubsidiaries, associates and joint ventures are lower than the enjoyable fairvalue of the identifiable net assets of the investees when making theinvestments|||
|Gain/lossonnon-monetaryassetswap|||
|Gain/lossonentrustingotherswithinvestmentsorassetmanagement|||
|AssetimpairmentprovisionsduetoactsofGodsuchasnaturaldisasters|||
|Gain/lossondebtrestructuring|||
|Expenses for business reorganization, such as expenses for staffing,reorganizationetc.|||
|Gain/loss on the part over the fair value due to transactions with distinctlyunfairprices|||
|Current gains and losses of subsidies acquired from business combinationunderthesamecontrolasfromperiod-begintocombinationdate|||
|Gain/lossoncontingenteventsirrelevanttotheCompany’snormalbusiness|||
|Gains and losses on change in fair value from tradable financial assets andtradable financial liabilities, as well as investment income from disposal oftradablefinancial assets and tradablefinancial liabilitiesand financial assetsavailable for sales except for effective hedging related with normalbusinessesoftheCompany|-57,499.02|Gains on sale of forwardexchange contracts, fair valuechanges and other currentassets (wealth managementinstruments)|
|Reversal of provision for impairment that made impairment testindependently|||
|Gain/lossonloansobtainedbyentrustingothers|||
|Gain/loss on change of the fair value of investing real estate of which thesubsequentmeasurementiscarriedoutadoptingthefairvaluemethod|||
|Effect on current gains/losses when a one-off adjustment is made to currentgains/losses according to requirements of taxation, accounting and otherrelevantlawsandregulations|||
|Custodyfeeincomewhenentrustedwithoperation|||
|Othernon-operationincomeandexpensesotherthantheabove|2,146,598.18||
|Othergain/lossitemsthatmeetthedefinitionofanextraordinarygain/loss|||
|Less:Incometaxeffects|745,230.24||
|Minorityinterestseffects(aftertax)|698,547.26||
|Total|2,867,358.26||

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 thePublic—Extraordinary Gains and Losses,orclassifiesanyextraordinarygain/lossitemmentionedinthesaidexplanatoryannouncementasarecurrentgain/lossitem□Applicable√Notapplicable
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Section III. Business Highlights
I. Main business during theReporting Period
Development and manufacture of household appliances, electronics, light industrial products, modern office supplies; design and manufacture of molds for those products; Sale of theCompany’s products in China and to other countries and regions as well as provision of relevant after-sales service; wholesale, retail (only in theCompany’s own shops), import& export and relevant supporting business of household appliances, electronic products, electrical equipment, office supplies, kitchen utensils and pre-packagedfoodaswellasprovisionofrelevantafter-salesservice(theaforesaidbusinessscopeoftheCompanydoesnotinvolve state trading commodities; where quotapermission or a license is required, it shall be obtained according to the regulations of the countrybeforeoperation).NomaterialchangesoccurredtothebusinessmodeloftheCompanyintheReportingPeriod.
IstheCompanysubjecttoanydisclosurerequirementsforspecialindustries?
No.
II. Material changes in main assets
1.Materialchangesinmainassets
|||
|-|-|
|Mainassets|Materialchange|
|Financialassetsatfairvaluethroughprofit/loss|Down100%fromtheopeningamountoftheyear,mainlybecauseofassessedlossonforwardforexcontracts|
|Interestreceivable|Up100%fromtheopeningamountoftheyear,mainlybecauseoftheopeningamountofaccruedinterestontermdepositsbeingzero|
|Equityassets|Nosuchassets|
|Fixedassets|Nomaterialchange|
|Constructioninprogress|Up45.49%fromtheopeningamountoftheyear,mainlybecausesitepreparationandbuildingrepairshadnotyetbeenexaminedforacceptance|
|Intangibleassets|Nomaterialchange|
|Long-termdeferredexpenses|Up84.51%fromtheopeningamountoftheyear,mainlybecauseofbuildingrepairs|

 2.Mainassetsoverseas
√Applicable□Notapplicable
Unit:RMBYuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Asset|Nature|Value|Location|Operationstatus|Measurestakentoprotectassetsafety|Earnings|IntheCompany’snetassets(%)|Anymajorimpairmentriskornot|
|Pt.StarComgisticIndonesia|Investment|135,486,222.64|Indonesia|Normal|Periodicreview|-8,160,647.89|23.87|No|
|TsannkuenEdgeIntelligenceCo.,Ltd.|Equityacquisition|9,565,442.49|Taiwan|Normal|Periodicreview|-4,085,170.16|1.69|No|
|Otherinformation|N/A||||||||

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. III. Core competitiveness analysis
IstheCompanysubjecttoanydisclosurerequirementsforspecialindustries?
No.
As a manufacturer of small home appliances, most of our products are exported.And our corecompetitive edges mainly liein thecapabilitytodevelopnewproductsinatimelymanneraccordingtomarketneedsduetoourstrengthintechnologyandR&Daswell asarelativelyhighmarketpositionduetoourgoodrelationshipwithsomecustomerswithgloballyfamousbrands.
Inthereportingperiod,weobtained19patentsinR&D,including2inventionpatents,3utilitymodelpatentsand14designpatents. Therearealsodozensofpatentsbeingappliedfor.Thesepatentscanhelpbetterprotectourintellectualpropertyrights,giveplayto ourcompetitiveedgeinindependentpropertyrights,keepaleadingpositionintechnologyandincreaseourcorecompetitiveness. Inaddition,TsannkuenEdgeIntelligenceCo.,Ltd.(“EdgeIntelligence”),asub-subsidiary,ownstheArduinoopencontrolplatform technology, which will be a great help in our medium and long-term strategy for IOT (Internet of Things), ICT (Information andCommunicationTech)andAI(ArtificialIntelligence).WealwaysfocusonR&Dandhumanresourcesasthemaindrivingforcesfor development,justaswealwaysfocusonintegrateddesignasaprimarymeansofdevelopingeverydayappliancesforcustomers.Astheworldembracessmartappliances,wewillincreaseourinvestmentinR&D,improveourdesignsystemcoveringMainlandChina and Taiwan to promote synergies, and join strong business alliances in the two regions to upgrade our management on smart appliances.
Section IV. Performance Discussion& Analysis
I. Overview
For the reporting period, we achieved operating revenue of RMB692 million, down20.49% from RMB870 million of the sameperiodoflastyear,andnetprofitofRMB-28million,down356.10%fromRMB11millionofthesameperiodoflastyear.Operating revenueandgrossprofitwere mainlyaffected bytheweakeningAmerican andEuropeanmarkets,customers’stockcontrolandthe risingrawmaterial prices.Andprofitswerealsodragged downbyassessedimpairmentsofinventories.Toboostoperatingrevenue and profits, we will continue to promote innovation inR&D and modularized development and design, utilize components in an economic manner,increaseproduct pricesandaddedvalue, cutdownprocurement cost inthesupplychain,increaseautomation in manufacturing,properlyadjustproductpricesthroughfriendlycommunication,andtrytoattractmoreorders.
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. II. Main business analysis
1.Overview
The Company belongs to the subsector of small household appliance design, manufacturing and marketing. Its business scope primarily includes: development and manufacture of household appliances, electronics, light industrial products, modern office supplies;designandmanufactureofmoldsforthoseproducts;SaleoftheCompany’sproductsinChinaandtoothercountriesandregionsaswellasprovisionofrelevantafter-salesservice;wholesale,retail(onlyintheCompany’sownshops),import&exportand relevantsupportingbusinessofhouseholdappliances,electronicproducts,electricalequipment,officesupplies,kitchenutensilsand pre-packaged food as well as provision of relevant after-sales service. No material changes occurred to the business model of the Companyinthereportingperiod.
ThesubsectorofsmallhouseholdappliancesinwhichtheCompanycompetesismatureandgrowing.TheCompany’smainproducts include grills, irons, coffee makers, juicers, ovens, electric tea kettles and toasters, most of which are exported. As the age of intelligent machines comes, small household appliances are gaining more popularity on the international market.And aspeople’s livingstandardsareimprovinginChina,adevelopmenttrendtowardssmart,healthyandmodernproductsintegratinghumanitiesand scienceisbeingseeninthesubsectorofsmallhouseholdappliances.
The Company vigorously explores the domestic market while also working on theAmerican and European markets. Supported by stable domestic demand, the Company promotes more innovation inR&D under its brand name to create a better future for the Company and maintain a leading position in the industry. Meanwhile, the Company promotes transformation and upgrade in its householdappliancebusinessthroughbrandingefforts.
2.YoYchangesinmajorfinancialdata
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|+/-%|Mainreasonsforchanges|
|Operatingrevenue|691,510,505.23|869,683,758.68|-20.49||
|Operatingcosts|625,449,017.39|739,507,468.93|-15.42||
|Taxesandsurtaxes|5,691,534.94|5,695,363.61|-0.07||
|Sellingexpenses|27,581,504.82|30,129,026.59|-8.46||
|Administrativeexpenses|74,639,753.64|74,782,758.93|-0.19||
|Financialcosts|-1,231,441.78|9,184,381.52|-113.41|Decreaseinunrealizedassessedexchangelosses|
|Assetimpairmentlosses|4,823,333.42|64,439.57|7,385.05|Inventoryvaluationallowancesmadeforthecurrentperiod|
|Gainsonfairvaluechanges|-9,934,400.00|1,881,750.00|-627.93|Assessedlossonforwardforexcontractsinthecurrentperiod|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||||
|-|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|+/-%|Mainreasonsforchanges|
|Investmentincome|9,876,900.98|1,724,730.14|472.66|Increasedgainsonsettledforwardforexdeals|
|Assetsdisposalincome|376,183.60|318,516.72|18.10||
|Otherincome|1,562,092.00|888,232.00|75.87|Increaseingovernmentalsubsidy|
|Non-businessrevenue|2,467,573.87|2,128,098.76|15.95||
|Non-businessexpenses|37,214.69|280,164.66|-86.72|Decreasedlossonassetretirement|
|Incometaxexpenses|-1,038,509.51|3,416,067.76|-130.40|Decreaseinrecognizeddeferredincometaxexpenses|
|R&Dexpense|34,122,824.80|36,181,239.58|-5.69||
|Netprofit|-40,093,551.93|13,565,414.73|-395.56|Decreasedoperatingrevenue,risingrawmaterialpricesandinventoryvaluationallowancesmade|
|Netcashflowsfromoperatingactivities|-119,821,570.49|-57,511,295.96|-108.34|Decreasedoperatingrevenue|
|Netcashflowsfrominvestingactivities|-171,845,120.19|-508,940,750.86|66.23|Decreasedoutflowsofrestrictedtermdeposits|
|Netcashflowsfromfinancingactivities|-19,294,734.68|100,706,644.87|-119.16|Increasedexportinvoicefinancingforwealthmanagementpurposesinthesameperiodoflastyear|
|Netincreaseincashandcashequivalents|-315,846,864.07|-474,256,524.44|33.40|Decreasedoutflowsofrestrictedtermdeposits|

MajorchangestotheprofitstructureorsourcesoftheCompanyduringtheReportingPeriod:
□Applicable√Notapplicable
Nosuchcases.
3.Breakdownofmainbusiness
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Item|Operatingrevenue|Operatingcosts|Grossprofitrate(%)|Increase/decreaseofoperatingrevenueoversameperiodoflastyear(%)|Increase/decreaseofoperatingcostsoversameperiodoflastyear(%)|Increase/decreaseofgrossprofitrateoversameperiodoflastyear(%)|
|Classifiedbyindustry|||||||
|Smallhomeappliancemanufacturing|658,944,365.34|613,781,412.65|6.85%|-21.58%|-15.14%|-7.08%|
|Total|658,944,365.34|613,781,412.65|6.85%|-21.58%|-15.14%|-7.08%|
|Classifiedbyproduct|||||||
|Cookingutensils|400,273,785.96|371,762,439.06|7.12%|-25.92%|-16.95%|-10.04%|
|Everyday homeappliances|164,940,858.72|159,587,268.54|3.25%|-26.37%|-24.33%|-2.61%|
|Tea and coffeemakers|84,387,695.78|79,103,482.40|6.26%|14.34%|25.18%|-8.11%|
|Other|9,342,024.88|3,328,222.65|64.37%|334.25%|110.58%|37.84%|
|Total|658,944,365.34|613,781,412.65|6.85%|-21.58%|-15.14%|-7.08%|
|Classifiedbyregion|||||||
|Americas|246,999,976.03|233,192,853.00|5.59%|-18.31%|-9.90%|-8.81%|
|Europe|200,874,235.23|191,285,145.74|4.77%|-30.86%|-25.40%|-6.97%|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||||||
|-|-|-|-|-|-|-|
|Item|Operatingrevenue|Operatingcosts|Grossprofitrate(%)|Increase/decreaseofoperatingrevenueoversameperiodoflastyear(%)|Increase/decreaseofoperatingcostsoversameperiodoflastyear(%)|Increase/decreaseofgrossprofitrateoversameperiodoflastyear(%)|
|Asia|161,948,690.59|145,155,496.92|10.37%|-10.23%|-6.01%|-4.03%|
|Australia|38,371,062.48|34,606,394.52|9.81%|-33.45%|-25.12%|-10.03%|
|Africa|10,750,401.01|9,541,522.47|11.24%|14.68%|28.89%|-9.79%|
|Total|658,944,365.34|613,781,412.65|6.85%|-21.58%|-15.14%|-7.08%|

 III. Analysisof non-corebusiness
√Applicable□Notapplicable
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Items|Amount|Ratiotothetotalprofitsamount(%)|Notesofthecauses|Recurringornot|
|Assetimpairmentlosses|4,823,333.42|-11.73|Inventoryvaluationallowancesmadeandreversalofcertainallowancesfordoubtfulaccountsreceivable|No|
|Gainsonfairvaluechanges|-9,934,400.00|24.15|Assessedlossesonforwardforexcontracts|No|
|Investmentincome|9,876,900.98|-24.01|Incomefromsettledforwardforexcontractsandwealthmanagementinstruments|No|
|Assetsdisposalincome|376,183.60|-0.91|Assetdisposal|No|
|Otherincome|1,562,092.00|-3.80|Governmentsubsidyinrelationtoproductionandoperation|No|
|Non-businessrevenue|2,467,573.87|-6.00|Lateinterestpaymentreceived,B2Brevenue,reclassificationofoverduepayablewithno-longer-existingpayee|No|
|Non-businessexpenses|37,214.69|-0.09|Donationexpensesandassetretirementloss|No|

 IV.Assets andliabilities
1.Significantchangesinassetcomposition
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Item|AtendofReportingPeriod||Atendofsameperiodoflastyear||Changeinpercentage(%)|Reasonforanysignificantchange|
||Amount|Asapercentageoftotalassets(%)|Amount|Asapercentageoftotalassets(%)|||
|Monetaryfunds|438,035,096.81|27.67|610,480,711.93|36.87|-9.20||
|Financialassetsatfairvaluethroughprofit/loss|0.00|0.00|1,881,750.00|0.11|-0.11|Assessedlossesonforwardforexcontracts|
|Notesreceivable|0.00|0.00|990,000.00|0.06|-0.06|Nonotesreceivableinthecurrentperiod|
|Accountsreceivable|208,402,211.03|13.16|242,579,524.63|14.65|-1.49||
|Prepayments|12,683,301.03|0.80|24,784,622.14|1.50|-0.70|Rentprepaymentsforplantsinthesameperiodoflastyear|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||||||
|-|-|-|-|-|-|-|
|Item|AtendofReportingPeriod||Atendofsameperiodoflastyear||Changeinpercentage(%)|Reasonforanysignificantchange|
||Amount|Asapercentageoftotalassets(%)|Amount|Asapercentageoftotalassets(%)|||
|Interestreceivable|1,695,898.95|0.11|1,038,777.61|0.06|0.05|Increaseintermdeposits|
|Otherreceivables|27,051,950.24|1.71|37,688,979.32|2.28|-0.57|Decreasedexporttaxrebates|
|Inventories|228,857,043.21|14.46|190,784,550.61|11.52|2.94||
|Othercurrentassets|377,710,035.73|23.86|281,488,319.23|17.00|6.86|Increaseinwealthmanagementinstruments|
|Investmentproperty|30,415,709.80|1.92|39,431,574.89|2.38|-0.46||
|Fixedassets|173,586,284.79|10.97|175,644,211.63|10.61|0.36||
|Constructioninprogress|2,996,491.22|0.19|495,974.59|0.03|0.16|Sitepreparationandbuildingrepairshadnotyetbeenexaminedforacceptance|
|Intangibleassets|28,124,283.40|1.78|28,363,603.13|1.71|0.07||
|Long-termdeferredexpenses|8,096,749.00|0.51|3,446,437.48|0.21|0.30|Morebuildingrepairs|
|Deferredincometaxassets|22,867,553.35|1.44|13,735,365.16|0.83|0.61|Deferredincometaxassetsrecognizedonoperatinglosscarryforwardsrecognizedattheendoflastyear|
|Othernon-currentassets|22,528,676.87|1.42|3,052,537.50|0.18|1.24|Increasedprepaymentsforequipment|
|Short-termborrowings|17,909,899.30|1.13|125,326,400.00|7.57|-6.44|Increasedexportinvoicefinancingforwealthmanagementpurposesinthesameperiodoflastyear|
|Financialliabilitiesatfairvaluethroughprofit/loss|6,008,550.00|0.38|0.00|0.00|0.38|Assessedlossesonforwardforexcontractsinthecurrentperiod|
|Notespayable|19,942,447.13|1.26|10,517,009.49|0.64|0.62|Increaseinbanker’sacceptancebillsinpayment|
|Accountspayable|432,489,623.92|27.32|473,690,790.92|28.61|-1.29||
|Accountsreceivedinadvance|11,941,937.58|0.75|14,843,333.11|0.90|-0.15||
|Payrollpayable|39,119,018.68|2.47|39,070,453.37|2.36|0.11||
|Taxpayable|4,674,769.16|0.30|3,384,970.78|0.20|0.10|Increaseinvalueaddedtaxpayableandwithheldtaxondividend|
|Interestpayable|9,957.32|0.00|170,592.29|0.01|-0.01|Decreasedinterestonshort-termborrowings|
|Otheraccountspayable|63,597,000.58|4.02|56,442,168.31|3.41|0.61||
|Long-termpayrollpayables|178,526.85|0.01|250,205.83|0.02|-0.01||
|Specificpayables|109,137,778.28|6.89|0.00|0.00|6.89|CompensationfortherelocationofTKSattheendoflastyear|
|Deferredincometaxliabilities|970,006.50|0.06|1,026,173.00|0.06|0.00||
|Othercomprehensiveincome|4,580,506.61|0.29|7,225,639.61|0.44|-0.15|Decreasedincomefromforeign-currencytranslationdifferences|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 2.Assetsandliabilitiesmeasuredatfairvalue
√Applicable□Notapplicable
Unit:RMBYuan
|||||||||
|-|-|-|-|-|-|-|-|
|Item|Openingbalance|Profit/lossonfairvaluechangesinthisReportingPeriod|Cumulativefairvaluechangeschargedtoequity|ImpairmentprovidedinthisReportingPeriod|PurchasedinthisReportingPeriod|SoldinthisReportingPeriod|Closingbalance|
|Financialassets||||||||
|1. Financial assets at fairvalue through profit/loss(excluding derivativefinancialassets)|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|2. Derivative financialassets|186,627,900.00|0.00|0.00|0.00|102,610,050.00|289,237,950.00|0.00|
|3. Available-for-salefinancialassets|40,000.00|0.00|0.00|0.00|0.00|0.00|40,000.00|
|Subtotaloffinancialassets|186,667,900.00|0.00|0.00|0.00|102,610,050.00|289,237,950.00|40,000.00|
|Investmentproperty|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|Productivelivingassets|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|Others|0.00|0.00|0.00|0.00|0.00|0.00|0.00|
|Totaloftheabove|186,667,900.00|0.00|0.00|0.00|102,610,050.00|289,237,950.00|40,000.00|
|Financialliabilities|0.00|6,008,550.00|0.00|0.00|204,241,350.00|38,032,400.00|166,208,950.00|

DidanysignificantchangesoccurtothemeasurementattributesoftheCompany’smainassetsintheReportingPeriod?
□Yes√No
3.RestrictedassetrightsasoftheendofthisReportingPeriod
□Applicable√Notapplicable
V. Investments made
1.Totalinvestmentsmade
√Applicable□Notapplicable
Unit:RMBYuan
||||
|-|-|-|
|InvestmentsmadeinReportingPeriod|Investmentsmadeinsameperiodoflastyear|+/-%|
|0.00|11,422,960.00|-100.00|

 2.SignificantequityinvestmentsmadeinthisReportingPeriod
□Applicable√Notapplicable
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 3.Significantnon-equityinvestmentsongoinginthisReportingPeriod
□Applicable√Notapplicable
4.Financialinvestments
(1)Securitiesinvestments
□Applicable√Notapplicable
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (2)Investmentinderivativefinancialinstruments
√Applicable□Notapplicable
Unit:RMB’0,000
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Operator|Relation|Related-partytransactionornot|Typeofderivativeinvestment|Initialinvestmentamount|Beginningdate|Endingdate|Openinginvestmentamount|PurchasedamountintheReportingPeriod|SoldamountintheReportingPeriod|Impairmentprovision|Closinginvestmentamount|ProportionoftheclosinginvestmentamountintheCompany’sclosingnetassets(%)|Actualgain/lossintheReportingPeriod|
|Bank|No|No|Forwardforex|49,347.93|1 January 2018|30 June 2018|18,662.79|30,685.14|32,727.04||16,620.90|29.28|-32.59|
|Total||||49,347.93|||18,662.79|30,685.14|32,727.04||16,620.90|29.28|-32.59|
|Capitalsourceforderivativeinvestment||||Self-ownedfunds||||||||||
|Lawsuits||||N/A||||||||||
|Disclosure date of the board announcement approvingthederivativeInvestment||||2013/3/12||||||||||
|Disclosure date of the general meeting announcementapprovingthederivativeInvestment||||2013/5/18||||||||||
|Risk analysis and risk control measures for positionsheld in derivatives in this Reporting Period (includingbutnotlimitedtomarketrisk,liquidityrisk,creditrisk,operationalrisk,legalrisk,etc.)||||1.Analysisonrisksfromholdingofderivativeproducts:gainsorlossesfromdifferencebetweencontractedexchangerateandmarketexchangerateonvaluedate.2.Controlmeasures:(1)Principle:Thepurposeofthefinancialderivativeoperationistoavoidrisks.TheCompanyshallnotconducttransactionaloperationforotherpurposesthanriskavoidance.TheCompany shallnotconductcomplex derivativetradingabove theactualoperationneedsandshall notspeculateinderivative tradingwithhedgingasanexcuse.TheoverallcontractualamountforriskavoidanceoftheCompanyshallnotexceedthesummationofthenetriskexposureoftheexistingassetsandliabilitiesandthenetriskexposureofassetsandliabilitiesarisingfromtheoperationoftheCompanyinthecomingyear.(2)Staffrequirements:Personneltakingpartintheinvestmentshallallfullyunderstandtherisksofderivativeinvestmentandstrictlyexecutethebusinessoperationandriskmanagementmechanismsforderivativeinvestment.(3)Operationstandardization:Beforemakingaderivativeinvestment,theCompanyshallrationallyequipitselfwithprofessionalpersonnelforinvestmentdecision-making,businessoperation,riskcontrol,etc.Itshallalsoinquireandcompareamongvariousmarketsandproducts.Besides,itshallstrictlycontrolthevarietyandsizeofderivativeinvestmentandtrytochoosederivativetradingonexchangeasmuchaspossible.(4)Periodicevaluation:Derivativeinvestmentsshallbeevaluatedatleasttwiceforamonthandtheevaluationreportshallbesenttoahigh-rankingexecutiveauthorizedbytheBoardofDirectors.AndaderivativeinvestmentreportshallbesenttotheBoardofDirectorsannually.TheCompanyanditssubsidiariesonlyneedtosubmittotheBoardofDirectorsofthesubsidiaries.(5)Losslimit:Theinvestmentlossonasinglederivativeandalltheinvestmentlossshallnotexceed20%ofthetotalinvestmentamount.(6)Auditsystem:Theauditdepartmentauditsderivativeproducttradingperiodicallyandsubmitsauditreportstorelevantunits.||||||||||
|Changes in market price or fair value of derivativesinvested in this Reporting Period (specific methodsused and relevant assumption and parameter settingsshall be disclosed for analysis of fair value ofderivatives)||||||||||||||

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
|||
|-|-|
|Significant changes in the Company’s accountingpolicies and specific accounting principles forderivativesinthisReportingPeriodascomparedtothepriorperiod||
|Special opinions expressed by independent directorsconcerning the Company’s derivatives investment andriskcontrol|TheCompany hascarried outa strict internalassessment for the financial derivative businessand hasestablisheda corresponding supervisionmechanism.Weareof theopinionthatthefinancialderivativebusinessconductedbytheCompanyisfairlynecessaryinitsroutineoperationandisincompliancewithrelevantlawsandregulations,withtheriskscontrollable.|

VI. Saleofmajor assets and equityinterests
1.Saleofmajorassets
□Applicable√Notapplicable
2.Saleofmajorequityinterests
□Applicable√Notapplicable
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. VII. Maincontrolled andjointstock companies
Mainsubsidiariesandjointstockcompanies
Unit:RMBYuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Companyname|RelationshipwiththeCompany|Mainbusinessscope|Registeredcapital|Totalassets|Netassets|Operatingrevenues|Operatingprofit|Netprofit|
|TsannKuen(Zhangzhou)EnterpriseCo.,Ltd.|Subsidiary|Small home appliancemanufacturing|USD160million|1,752,426,307.49|1,212,262,895.56|633,712,855.58|-34,475,349.72|-31,822,389.67|
|TsannKuenChina(Shanghai)EnterpriseCo.,Ltd.|Subsidiary|Small home appliancemanufacturing|USD40million|191,149,181.31|79,626,388.90|460,356.27|-1,237,495.29|-1,238,540.45|
|Pt.StarComgisticIndonesia|Subsidiary|Small home appliancemanufacturing|USD30million|135,486,222.64|79,272,790.79|57,156,180.74|-8,010,270.44|-8,160,647.89|
|TsannkuenEdgeIntelligenceCo.,Ltd.|Subsidiary|Industrialdesign|NTD200 million|9,565,442.49|-1,446,987.03|5,186,214.49|-4,113,815.35|-4,085,170.16|

 SubsidiariesobtainedordisposedinthisReportingPeriod
√Applicable□Notapplicable
1.TsannKuen(Zhangzhou)InvestmentCo.,Ltd.(“TKI”)wasincorporatedbytheCompany’scontrolledsubsidiary,TsannKuen(Zhangzhou)EnterpriseCo.,Ltd.on15June2018andhasbeenincludedintheCompany’sconsolidatedfinancialstatementssincethatday.
2.XiamenTravelCanxing(Xiamen)InternationalTravelServiceCo.,Ltd.wasofficiallydissolvedon6February2018forithadnoactualoperations.
VIII. Structured bodiescontrolled by theCompany
□Applicable√Notapplicable
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. IX.Predict theoperating results ofJanuary-September 2018
Warning ofpossiblelossorconsiderableYoYchangeof theaccumulated netprofit madeduringtheperiod-begin totheendof the nextReportingPeriodaccordingtoprediction,aswellasexplanationsonthereasons:
□Applicable√Notapplicable
X. RisksfacingtheCompany andcountermeasures
1.International
The global economy has recovered overall, and the anti-globalization and the trend of trade protectionism are on the rise with increasinguncertaintyofspillovereffectsfromthedevelopedeconomiespolicy.
Forprotectingthedomesticnewly-developingelectrical homeappliancesmanufacturingenterprises,partsofthecountriesbegan to adopttradeprotectionismandbegantosuppressthedomesticelectricalhomeappliancesforthemethodssuchasimprovetheimport tariff.Theoutburstoftheglobalfinancialcrisisledtotheriseoftheinternationaltradeprotection,theaggravationofthetariffbarrier andthenon-tariffbarrierespeciallysuchasthetechnologystandard,Intellectualpropertyrightprotectionandanti-dumpingetc., as well astheexportof thedomestic electrical home applianceencounteredmoreand morethreatenstariff andnon-tariff barrier with themorecomplicatedinternationalenvironmentfacedwiththeelectricalhomeappliances.
Meanwhile, in the OEM market, the supply and demand of the industry gradually varies with the supply exceeding the demand, wherethehorizontalcompetitionisquitefierce.Thecostcompetitionandinnovationresearcharegraduallynomoreaccessibletothe business opportunities. In addition, along with the development of the new life, the restructuring of industrial leading brand intensifiesthecompetitionoftheOEMmarket.
2.Domestic
Though there are still a lot of difficulties, like domestic excess capacity, inadequate endogenous power of economic growth, and increasinglyaccumulatedfinancialrisks,etc,thedomesticeconomyhasoverallremainedasteadyandrapidgrowthwithcontinuous optimizationofeconomicstructureandsteadyemployment.
Throughthepathofexpandingdomesticdemandandtheadjustmentoftheoveralleconomicsystem,thedomesticcompetitionwill becomefiercer.Asthedevelopmentofthedomesticproduction,thedomestichomeapplianceisnowfacingthesignificantindustrial consolidation phrase, which couldonly winin thecompetitionand become theindustry integratorwith powerful financial strength andtheabilitytodrivethedomestichomeapplianceinnovationenterprise.Sothesmallhomeapplianceenterprisesarefacingwith serious competition and challenge. Faced with the quick changes of the domestic environment, the Company will be close to thecustomers’requirements,topromotethebrandimagebytakingthetechnologyinnovationascore,tobuildupself-ownbrand,andto developgreen,intelligenthomeappliancestoincreasetheoccupationportionofthedomesticmarket.
Meanwhile,therisingcostofrawmaterialshasalsoposedchallengesforenterprises’developmentinChina.
3.Exchangeratefluctuation
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. TheCompany’s products were export-oriented, so the influence of the exchange rate fluctuation on the Company was rather big. Facing with the negative influences of the appreciation of the RMB, the main methods are: to avoid the exchange risks by the financial tools and to fully considerate the influences of the exchange risks when receiving an order,thus to transfer theexchange risks.
4.Increaseofthelaborcostsandthelaborshortage
Influencedbytheconstantlyriseofthelaborcost,theCompanyreducedtheemployeeturnoverratebyimprovingthelaborcharacter and perfectingthebenefits, promotedthepurchasing modularizationas well aslean automation, andimproved theoutput per head throughcontinuousemployeetrainingtodealwiththelaborshortageproblem.
5.Environmentalprotectionlow-carbon
AstheexecutionoftheEnvironmentalProtectionAct,topreventandremedypollutionandotherpublicnuisanceaswellastoensure theenvironmental andpublichealthbecome thedevelopmenttendency thattheproductionprocesses oftheenterprisesmust active deal with;theCompany put theleanmanufacturingintothecoregoal oftheenterprisesofthisyear,with theintroduceofthenew environmental protection materials, the input of the automation and the promotion of the environmental protection manufacturing that promoted theproductsof theCompany developed orientated to thedirection ofenvironmental protectionand the environment protectionwork.
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Section V. Significant Events
I. List of the Annual Meeting of Shareholders and Special Meeting of Shareholders held duringthe Reporting Period
1.ListofMeetingofShareholdersduringtheReportingPeriod
|||||||
|-|-|-|-|-|-|
|Time|Type|Participationratio|Dateofmeeting|Dateofdisclosure|Disclosureindex|
|The2017AnnualMeetingofShareholders|AnnualMeetingofShareholders|44.90%|05/18/2018|05/19/2018|www.cninfo.com.cn|
|The1stExtraordinaryGeneralMeetingof2018|ExtraordinaryGeneralMeeting|45.35%|06/15/2018|06/16/2018|www.cninfo.com.cn|

2. Preferred shareholders with the restoration of voting rights made a request for the Special Meeting of Shareholders
□Applicable√Notapplicable
II. Pre-plan for profit allocation and turning capital reserve into share capital during the Reporting period
□Applicable√Notapplicable
TheCompanyplannednottodistributecashdividendandbonusshare,andnottoconvertcapitalreservesintosharecapitalinhalf year.
III. Commitments of theCompany’s actual controller, shareholders, related parties and acquirer, as well as the Company and other commitment makers, fulfilled in this reporting period or ongoingat theperiod-end
√Applicable□Notapplicable
||||||||
|-|-|-|-|-|-|-|
|Commitment|Commitmentmaker|Commitmenttype|Contents|Timeofmakingcommitment|Periodofcommitment|Fulfillment|
|Commitment on sharereform|||||||
|Commitment in theacquisition report or thereportonequitychanges|||||||
|Commitments made upontheassetsreplacement|||||||
|Commitments made uponfirstissuanceorrefinance|||||||
|Commitment on equityincentive|||||||
|Other commitments madetominorityshareholders|FILLMANINVESTMENTSLIMITED|Commitmentonshareholding|Basedontheconfidenceonthecontinuousandstabledevelopmentof|12/28/2012|Long-termeffective|TheCompany’sstocksresumed|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||||||
|-|-|-|-|-|-|-|
|Commitment|Commitmentmaker|Commitmenttype|Contents|Timeofmakingcommitment|Periodofcommitment|Fulfillment|
|||increase|theCompany,itcommittedtoincreasetheshareholdingiftheCompany’sstockpricelowerthanHKD2.40pershareaftertheimplementationofthesharescontractionandtradingresumption,anditwouldincreasenomorethan2%shares(i.e.3.7078millionshares)ofthetotalsharesissuedbytheCompanywithinoneyearsincethedateofinitialshareholdingincrease.Iftheplanonincreasingholding2%sharesofthetotalsharesiscompleted,ifthestockpricehasn’treachedthetargetprice,itwillperformrelevantapprovalprocedures,andproposetoCSRConcontinuousimplementationofshareholdingincreasebyexemptionofoffering.|||tradingonDecember31,2012,buttheCompany’sstockpricehasn’tmettheconditionforshareholdingincreasesincethedateoftradingresumption,FILLMANInvestmentLimitedhasn’timplementedtheshareholdingincreaseplan.|
|Executedontimeornot|No||||||

IV.Engagement anddisengagementof CPAs firm
Whetherthesemi-annualfinancialreporthasbeenaudited
□Yes√No
Thesemi-annualfinancialreportoftheCompanyhasnotbeenaudited
V. Notes for “non-standard audit report” of CPAs firm during the Reporting Period by board ofdirectors andsupervisory board
□Applicable√Notapplicable
VI. Notes for the related information of “non-standard audit reports” last year by board of directors
□Applicable√Notapplicable
VII. Bankruptcy andrestructuring
□Applicable√Notapplicable
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. VIII. Litigationsand arbitrations
Significantlitigationsandarbitrations
□Applicable√Notapplicable
Otherlawsuits
√Applicable□Notapplicable
Unit:RMB’0,000
|||||||||
|-|-|-|-|-|-|-|-|
|Basicsituationoflawsuit(arbitration)|Lawsuitamount(RMBTenthousand)|Whetherformintoestimatedliabilities|Processoflawsuit(arbitration)|Trialresultsandinfluencesoflawsuit(arbitration)|Situationofexecutionofjudgmentoflawsuit(arbitration)|Disclosuredate|Disclosureindex|
|ThecaseofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,Ltd.suedJapanUCCUeshimaCoffeeCo.,Ltd.(contractdisputes)|1,770.26|No|Zhangzhou Tsann Ken hadsubmitted the indictment to thelocal judicatory in Kobe, Japanon May 9, 2014; recently is inthetrial|Hadnoresult|No|No|No|
|TheleasecontractdefaultcaseoftheCompanysuedXiamenTianyuanAssetsManagementCo.,Ltd.aboutthearrearsofrent(No.23ofHuarongRd,HuliDistrict,Xiamen)|29.43|No|XiamenHuliPeople’sCourthadputonrecordonOctober13,2014.TheCourtmadethefirstinstanceofjudgmentonFebruary2,2015,butbothtwopartiesrefusedtothedecisionandlodgedanappeal.XiamenIntermediatePeople’sCourtcancelledtheoriginaljudgmentandremandedfornewtrialonOctober13,2015.|XiamenHuliPeople’sCourtcombinedthesefourcasesfortrialonDecember29,2015.ThefirstinstanceofjudgmentofXiamenHuliPeople’sCourtwasmadeonMay30,2017:Tianyuan(Xiamen)AssetsManagementCo.,Ltd.shouldpaythelatepaymentpenalty.Whetherbothpartiestoappealhasnotconfirmedyet.|No|No|No|
|The lease contract default case ofthe Company sued XiamenTianyuan Assets Management Co.,Ltd.aboutthearrearsofrent(NorthBuilding of the Factory, No. 88 ofXinglong Rd, Huli District,Xiamen)|58.46||XiamenHuliPeople’sCourthadputonrecordonApril28,2015|||||
|The lease contract default case ofthe Company sued XiamenTianyuan Assets Management Co.,Ltd. about the arrears of rent(Southeast Corner, No. 88 ofXinglong Rd, Huli District,Xiamen)|8.32||XiamenHuliPeople’sCourthadputonrecordonApril28,2015|||||
|The lease contract default case ofthe Company sued XiamenTianyuan Assets Management Co.,Ltd. about the arrears of rent(Northwest Corner, No. 88 ofXinglong Rd, Huli District,Xiamen)|18.61||XiamenHuliPeople’sCourthadputonrecordonApril28,2015.|||||
|ThecaseofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,Ltd.suedMTNProducts,Inc./WaterSolutions （HongKong）Ltd.(disputesofdefaultingonloans)|1,429.40|No|SUPERIORCOURTOFCALIFORNIACOUNTYOFLOSANGELEShadputonrecordonNovember23,2016.|Hadnoresult|No|No|No|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|Basicsituationoflawsuit(arbitration)|Lawsuitamount(RMBTenthousand)|Whetherformintoestimatedliabilities|Processoflawsuit(arbitration)|Trialresultsandinfluencesoflawsuit(arbitration)|Situationofexecutionofjudgmentoflawsuit(arbitration)|Disclosuredate|Disclosureindex|
|ThecontractdisputescaseofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,LtdsuedPhilipslighting(China)investmentCo.Ltd.|250|No|ZhangzhouIntermediatePeople’sCourtopenedthesecondtrialonMay8,2018.。|ThefirstinstanceofjudgmentfromLonghaiPeople’sCourtwasreceivedonNovember12,2017:PhilipsshallreturnthepaymentforgoodsofRMB423,345.63andtheinterestsofoverduepaymenttoTsannKuenChina(Zhangzhou),whohadinstitutedanappealwithnoresultinsecondtrial.|No|No|No|
|ThecontractdisputescaseofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,LtdsuedSandaElectricMachineryCo.,Ltd.andBoluoCountyLianyuanIndustrialTechnologyCo.,Ltd.|333|No|ZhangzhouIntermediatePeople’sCourtmadethejudgmentonJune11,2018,andSandainstitutedanappeal.|ThefirstinstanceofjudgmentfromZhangzhouIntermediatePeople’sCourtwasreceivedonJune11,2018:1.DefendantsofSandaandLianyuanreturnedpaymentsfor80,603motorsofRMB2,435,368.34toTsannKuenChina(Zhangzhou);2.DefendantsofSandaandLianyuanreturnedtotalRMB895,062.3forlaborcostofchecking,dismantling,andsortingoutthedefectivemotors,materialfeesforevidencepreservationandcostofphotography.Sandahad|No|No|No|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|Basicsituationoflawsuit(arbitration)|Lawsuitamount(RMBTenthousand)|Whetherformintoestimatedliabilities|Processoflawsuit(arbitration)|Trialresultsandinfluencesoflawsuit(arbitration)|Situationofexecutionofjudgmentoflawsuit(arbitration)|Disclosuredate|Disclosureindex|
|||||institutedanappealwithnoresultinsecondtrial.||||
|TheleasecontractdisputescaseofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,LtdsuedXiamenSanyiliEnergy-savingMaterialsCo.,Ltd.|46|No|LonghaiPeople’sCourthadputonrecordonApril13,2017.|ThefirstinstanceofjudgmentfromLonghaiPeople’sCourtwasreceivedonOctober13,2017:1.Releasingtheleasecontractandsupplementaryagreementsignedbybothparties;2.SanyilishallreturntheeasedpropertytoTsannKuenChina(Zhangzhou)withinamonthfromthedateofthejudgmentcomingintoeffect;3.SanyilishallpayTsannKuenChina(Zhangzhou)therentRMB384,036andthepenaltywithin10daysfromthedateofthejudgmentcomingintoeffect;4.SanyilishallpaythemoneyfromMay,2017tothedateofreturningtheplantwithRMB71,604everymonth.Thistrialhasended.|ApplyingtoLonghaiPeople’sCourtforcompulsoryexecutiononJanuary2,2018.|No|No|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|Basicsituationoflawsuit(arbitration)|Lawsuitamount(RMBTenthousand)|Whetherformintoestimatedliabilities|Processoflawsuit(arbitration)|Trialresultsandinfluencesoflawsuit(arbitration)|Situationofexecutionofjudgmentoflawsuit(arbitration)|Disclosuredate|Disclosureindex|
|Thetotal7patentinfringementcasesofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,LtdsuedXiamenFukunHouseholdApplianceTechnologyCo.,Ltd(patentnumber:ZL200710009700.7、ZL200820102024.8、ZL200920137778.1、ZL201320822528.8、ZL200920308936.5、ZL201030287767.X、ZL201330112310.9)|70|No|XiamenIntermediatePeople’sCourtopenedthecourtsessionfromJune27,2017toJune29,2017.|ThefirstinstanceofjudgmentofCaseNo.329,Min02,Minchu,2017fromXiamenIntermediatePeople’sCourtwasreceivedonMarch13,2018:turneddowntheclaimsofTsannKuenChina(Zhangzhou).ThesecondinstanceofjudgmentofCaseNo.329fromFujianSuperiorPeople’sCourtwasreceivedonJune21,2018:upheldtheverdict,andturneddowntheclaims.Theother6casesstillhadnoresults.|No|No|No|
|ThecontractdisputescaseofXiamenYixinIndustrialandTradeCo.,LtdsuedthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,Ltd.|95.6||OpeningthecourtsessiononDecember26,2017|ThefirstinstanceofjudgmentfromLonghaiPeople’sCourtwasreceivedonOctober9,2017:1.PayingYixinthepaymentformouldofRMB339,772.93andpenaltyofoverduepayment;2.PayingYixinthepaymentforgoodsofRMB49,126.69andpenaltyofoverduepayment;ThesecondinstanceofjudgmentfromZhangzhouIntermediatePeople’sCourtwasreceivedon|YixinappliedforcompulsoryexecutiononJune13,2018,andpaidLonghaiCourttotalRMB425,513intheafternoononJune15,2018.|No|No|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|Basicsituationoflawsuit(arbitration)|Lawsuitamount(RMBTenthousand)|Whetherformintoestimatedliabilities|Processoflawsuit(arbitration)|Trialresultsandinfluencesoflawsuit(arbitration)|Situationofexecutionofjudgmentoflawsuit(arbitration)|Disclosuredate|Disclosureindex|
|||||March21,2018:upheldtheverdict||||
|ThepatentinfringementcasesoftheCompanysuedHuayu ElectricalAppliance Group Co., Ltd.|100|No|NingboIntermediatePeople’sCourtopenedthecourtsessiononMarch19,2018|Hadnoresult|No|No|No|
|Thetotal3patentinfringementcasesofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,Ltd.suedShenzheniCareIntelligentLightingCo.,Ltd(patentNo:ZL201030580030.7、ZL201120033670.5、ZL201030562160.8)|20|No|ShenzhenIntermediatePeople’sCourtopenedthecourtsessiononMay17,2018|ThefirstinstanceofjudgmentofCaseNo.376,Yue03,Minchu,2017fromGuangzhouIntellectualPropertyCourtwasreceivedonOctober31,2017:iCarestoppedproducing,selling,andpromisingtosellinfringingproductswithintheeffectivedateofthewrittenjudgment,andcompensatedTsannKuenChina(Zhangzhou)forfinanciallossesandtheinstigationfeesofRMB80,000.ICarehasinstitutedanappeal,andthecaseisstillatthetrial.ThefirstinstanceofjudgmentofCaseNo.377,Yue03,Minchu,2017fromGuangzhouIntellectualPropertyCourtwasreceivedonOctober31,2017:turneddownallclaims|No|No|No|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|Basicsituationoflawsuit(arbitration)|Lawsuitamount(RMBTenthousand)|Whetherformintoestimatedliabilities|Processoflawsuit(arbitration)|Trialresultsandinfluencesoflawsuit(arbitration)|Situationofexecutionofjudgmentoflawsuit(arbitration)|Disclosuredate|Disclosureindex|
|||||ofTsannKuenChina(Zhangzhou).TsannKuenChina(Zhangzhou)hasinstitutedanappeal,andthecaseisstillatthetrial.TheCaseNo.151,Yue03,Minchu,2018washeldbyShenzhenIntermediatePeople’sCourtonMay17,2018withnoresultsyet.||||
|ThepatentinfringementcaseofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,Ltd.suedShenzhenKangMingshengScienceandTechnologyIndustrialCo.,Ltd|20|No|ShenzhenIntermediatePeople’sCourthadputonrecordonJanuary11,2018|Hadnoresult|No|No|No|
|ThepatentinfringementcaseofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,Ltd.suedGuangdongDPCo.,Ltd.|20|No|GuangzhouIntellectualPropertyCourthadputonrecordonDecember15,2017.|Hadnoresult|No|No|No|
|ThecontractdisputescaseoftheCompanysuedZhongshanJaljaElectricApplianceTechnologyCo.,Ltd.|34|No|XiamenHuliPeople’sCourthadputonrecordonJanuary23,2018.|Hadnoresult|No|No|No|
|ThemaliciousprosecutioncaseoftheCompanysuedGettyImages(Beijing)TechnologyCo.,Ltd.|10|No|FreeTradeZoneCourt,HuliCourtopenedthecourtsessiononJune27,2018|Hadnoresult|No|No|No|

IX.Punishments andrectifications
□Applicable√Inapplicable
NosuchcasesintheReportingPeriod.
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. X. Credit conditions of the Company as well as its controlling shareholder and actual controller
□Applicable√Notapplicable
XI. Implementation of any equity incentive plan, employee stock ownership plan or other incentivemeasures foremployees
□Applicable√Notapplicable
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. XII. Significantrelated-party transactions
1.Related-partytransactionsrelevanttoroutineoperation
√Applicable□Notapplicable
Unit:RMB’0,000
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Relatedparty|Relationship|Typeoftherelated-partytransaction|Contentoftherelated-partytransaction|Pricingprincipleoftherelated-partytransaction|Transactionprice|Transactionamount|Proportioninsamekindoftransactions(%)|Approvedtransactionquota|Whetherexceededtheapprovedquota|Settlementmethodoftherelated-partytransaction|Similarmarketprice|Disclosuredate|Disclosureindex|
|Thermaster Electronic(Xiamen)Ltd.|Company directlycontrolled by actualcontroller and theirclosefamilymembers|Purchaseofcommoditiesfromtherelatedparty|Purchaseofrawparts|Basedonthemarketpriceandbothpartiesabidebythefairandreasonableprinciple|N/A|1,384.71|2.50%|4,000.00|No|Settledaccordingtothecontractsignedbybothparties|N/A|05/30/2018|www.cninfo.com.cn|
|Tsann KuenEnterpriseCo.,Ltd.|Underthecontrolofthesameactualcontroller|Purchaseofcommoditiesfromtherelatedparty|Purchaseofrawparts|||1.03|0.00%|10.00|No|||||
|GoldMiningChainCo.,Ltd.|Underthecontrolofthesameactualcontroller|Purchaseofcommoditiesfromtherelatedparty|Purchaseofrawparts|||0.15|0.00%|5.00|No|||||
|StarComgisticCapitalCo.,Ltd.|Ultimatecontrollingcompany|Purchaseofcommoditiesfromtherelatedparty|Purchaseofrawparts|||0.50|0.00%|10.00|No|||||
|KuaisanElectricBusinessServiceCo.,|Underthecontrolofthesameactual|Purchaseof|Purchaseofrawparts|||0.06|0.00%|3.00|No|||||

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Relatedparty|Relationship|Typeoftherelated-partytransaction|Contentoftherelated-partytransaction|Pricingprincipleoftherelated-partytransaction|Transactionprice|Transactionamount|Proportioninsamekindoftransactions(%)|Approvedtransactionquota|Whetherexceededtheapprovedquota|Settlementmethodoftherelated-partytransaction|Similarmarketprice|Disclosuredate|Disclosureindex|
|Ltd.|controller|commoditiesfromtherelatedparty||||||||||||
|StarComgisticCapitalCo.,Ltd.|Ultimatecontrollingcompany|Salesofcommoditiestotherelatedparty|Salesofpartsandfinishedproducts|||576.28|0.83%|1,716.00|No|||||
|GoldMiningChainCo.,Ltd.|Underthecontrolofthesameactualcontroller|Salesofcommoditiestotherelatedparty|Salesofpartsandfinishedproducts|||0.00|0.00%|10.00|No|||||
|Total||||||1,962.73||5,754.00||||||
|Detailsoflargeamountofsalesreturns||||N/A||||||||||
|Asforthepredictiononthetotalamountofroutinerelated-partytransactionstobeoccurredinthereportingperiodbyrelevanttypes,theactualperformanceinthereportingperiod||||N/A||||||||||
|Reason for significant difference between the transaction price and the marketprice||||N/A||||||||||

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 2.Related-partytransactionsregardingpurchaseandsalesofassetsorequity
□Applicable√Notapplicable
3.Related-partytransitionswithjointinvestments
□Applicable√Notapplicable
4.Significantcreditsandliabilitieswithrelatedparties
√Applicable□Notapplicable
Whetherexistnon-operatingcreditsandliabilitieswithrelatedparties?
□Yes√No
5.Othersignificantrelated-partytransactions
□Applicable√Notapplicable
XIII. Occupation of theCompany’s funds for non-operating purposes by the controlling shareholderand its related parties
□Applicable√Notapplicable
XIV. Significantcontracts andexecution
1.Particularsabouttrusteeship,contractandlease
(1)Trust
□Applicable√Notapplicable
(2)Contract
□Applicable√Notapplicable
(3)Lease
√Applicable□Notapplicable
Notesoftheleasing
TheproposalonLeaseofPropertywasreceivedandapprovedattheFirstSessionoftheBoardofDirectorsfor2013datedJune26, 2013 and for details, please refer to the Announcement on Lease of Property, Announcement on Resolutions Made at the First SessionoftheBoardofDirectorsfor2013disclosedonSecuritiesTimes,HongKongTaKungPaoandhttp://www.cninfo.com.cnon June28,2013.
Theleasewhoseprofitsreachingmorethan10%ofthetotalprofitsoftheCompanyintheReportingPeriod.
√Applicable□Notapplicable
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.Unit:RMB’0,000
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Nameofcontract-outparty|Nameofleasee|Statusofleasedassets|Involvedamountoftheleasedassets|Initialdateofleasing|Endingdateofleasing|Rentalincome|Recognitionbasisofrentalincome|InfluencesofrentalincomeontheCompany|Related-partytransactionornot|Relationship|
|XiamenTsannKun(China)EnterpriseCo.,Ltd.|Tianyuan(Xiamen)AssetsManagementCo.,Ltd.|Buildingsandland|1,616.01|07/01/2013|09/30/2018|525.11|Accordingtothecontractprice|18.53%|No|N/A|

2.Significantguarantees
√Applicable□Notapplicable
Unit:RMB’0,000
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Guaranteessubsidiaries||||||||||
|Guaranteedparty|Disclosuredateoftheguaranteelineannouncement|Lineofguarantee|Actualoccurrencedate(dateofagreementsigning)|Actualguaranteeamount|Typeofguarantee||Termofguarantee|Dueornot|Guaranteeforarelatedpartyornot|
|TsannKuenEdgeIntelligence|08/04/2017|496.25|2017-08-04|457.31|Pledged||1year|No|No|
|PT.STARCOMGISTICINDONESIA|08/04/2017|1,984.98|2017-08-04|853.39|Pledged||1year|No|No|
|Total guarantee line for subsidiariesapproved during this Reporting Period(C1)||0||Total actual guaranteeamount for subsidiariesduring this ReportingPeriod(C2)|||518.34|||
|Total approved guarantee line forsubsidiariesattheendofthisReportingPeriod(C3)||2,481.23||Total actual guaranteebalance for subsidiaries atthe end of this ReportingPeriod(C4)|||1,310.70|||
|Totalguaranteeamount(totaloftheabove-mentionedthreekindsofguarantees)||||||||||
|Total guarantee line approved duringthisReportingPeriod(A1+B1+C1)||0||Total actual guaranteeamount during thisReporting Period(A2+B2+C2)||518.34||||
|Totalapproved guaranteelineattheendofthisReportingPeriod(A3+B3+C3)||2,481.23||TotalactualguaranteebalanceattheendofthisReportingPeriod(A4+B4+C4)||1,310.70||||
|Proportionofthetotalactualguaranteeamount(A4+B4+C4)innetassetsoftheCompany||||2.31%||||||
|Ofwhich:||||||||||
|Amountofguaranteesprovidedforshareholders,theactualcontrollerandtheirrelatedparties(D)||||0||||||
|Amountofdebtguaranteesprovideddirectlyorindirectlyforentitieswithaliability-to-assetratioover70%(E)||||457.31||||||
|Portionofthetotalguaranteeamountinexcessof50%ofnetassets(F)||||0||||||
|Totalamountofthethreekindsofguaranteesabove(D+E+F)||||457.31||||||
|Explanationonundueguaranteeorpossiblejointliquidatedliabilityundertaken(ifany)||||N/A||||||
|Explanationonprovidingexternalguaranteeviolatingestablishedprocedures(ifany)||||N/A||||||

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 3.Othersignificantcontracts
□Applicable√Notapplicable
XV.Social responsibilities
1.Significantenvironmentalprotection
□Applicable√Notapplicable
2.Targetedmeasurestakentohelppeopleliftthemselvesoutofpoverty
□Applicable√Notapplicable
XVI. Othersignificantevents
□Applicable√Notapplicable
TherewasnosuchsituationduringtheReportingperiod.
XVII. Significantevents of subsidiaries
□Applicable√Notapplicable
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Section VI. Change in Shares& Shareholders
I. Changes inshares
1.Changesinshares
Unit:share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Beforethechange||Increase/decreaseinthechange(+,-)|||||Afterthechange||
||Number|Proportion|Issuanceofnewshares|Bonusshares|Capitalizationofpublicreservefund|Other|Subtotal|Number|Proportion|
|I.Unlistedtradableshares|0|0.00%|0|0|0|0|0|0|0.00%|
|1.Founders’shares||||||||||
|Amongwhich:sharesheldbyState||||||||||
|Sharesheldbydomesticcorporation||||||||||
|Sharesheldbyforeigncorporations||||||||||
|Other||||||||||
|2.Raisedcorporationshares||||||||||
|3.Staffshares||||||||||
|4.Preferredsharesorother||||||||||
|II.Listedtradableshares|185,391,680|100.00%|0|0|0|0|0|185,391,680|100.00%|
|1.RMBordinaryshares||||||||||
|2.Domesticallylistedforeignshares|185,391,680|100.00%|0|0|0|0|0|185,391,680|100.00%|
|3.Foreigncapitalstockslistedabroad||||||||||
|4.Other||||||||||
|III.Totalshares|185,391,680|100.00%|0|0|0|0|0|185,391,680|100.00%|

 Reasonsforchangeinsharecapital
□Applicable√Notapplicable
Particularsabouttheapprovalofthechangeinsharecapital
□Applicable√Notapplicable
Thetransferofchangeinsharecapital
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.□Applicable√Notapplicable
Changeinsharecapital’simpactsonbasicEPSanddilutedEPSinrecentyearandrecentissue,andnetassetspershareattributedto equityshareholderandfinancialindexetc.
□Applicable√Notapplicable
Othercontentswasnecessarytothecompanyorthesecuritiesregulatorsrequiredtobedisclosed
□Applicable√Notapplicable
2.Changesinrestrictedshares
□Applicable√Notapplicable
II. Issuance andlistingofsecurities
□Applicable√Notapplicable
III.Total numberofshareholders andtheirshareholdings
Unit:share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Totalnumberofcommonshareholdersattheperiod-end||16,429|||Totalnumberofpreferenceshareholderswithresumedvotingrightsattheperiod-end|||0||
|Greaterthan5%ortop10commonshareholders||||||||||
|Nameofshareholder|Natureofshareholder|Shareholdingpercentage|Totalcommonsharesheldattheperiod-end|Increase/decreaseduringthereportingperiod||Numberofnon-tradablecommonshares|Numberoftradablecommonshares|Pledgedorfrozenshares||
|||||||||Statusofshares|Numberofshares|
|FORDCHEEDEVELOPMENTLIMITED|Foreigncorporation|29.10%|53,940,530|No change||0|53,940,530|N/A|0|
|EUPAINDUSTRYCORPORATIONLIMITED|Foreigncorporation|13.09%|24,268,840|Nochange||0|24,268,840|N/A|0|
|GUOTAIJUNANSECURITIES(HONGKONG)LIMITED|Foreigncorporation|4.96%|9,196,449|No change||0|9,196,449|N/A|0|
|FILLMANINVESTMENTSLIMITED|Foreigncorporation|2.49%|4,621,596|Nochange||0|4,621,596|N/A|0|
|CHIANEVERBRIGHTSECURITIES(HK)CO.,LTD|Foreigncorporation|1.26%|2,335,823|213,723||0|2,335,823|N/A|0|
|SHENWANHONGYUANSECURITIES(H.K.)LIMITED|Foreigncorporation|1.06%|1,956,752|No change||0|1,956,752|N/A|0|
|CHENYONGQUAN|Domesticindividual|1.03%|1,900,376|3,033||0|1,900,376|N/A|0|
|CHENYONGQING|Foreignindividual|0.80%|1,488,949|No change||0|1,488,949|N/A|0|
|CHENLIJUAN|Foreignindividual|0.72%|1,339,434|Nochange||0|1,339,434|N/A|0|
|DINGXIAOLUN|Domesticindividual|0.61%|1,135,000|32,000||0|1,135,000|N/A|0|
|Strategic investor or general corporationbecoming a top ten shareholder due toplacingofnewshares||N/A||||||||
|Relatedpartiesoracting-in-concertparties||The first, thesecondand thefourth shareholdersare theCompany’scorporate controlling||||||||

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||||
|-|-|-|-|-|
|amongtheshareholdersabove|shareholders. It is unknown whether the other shareholders of tradable shares are relatedparties or acting-in-concert parties as prescribed in the Administrative Methods forDisclosureoftheShareholdingChangesoftheListedCompany’sShareholders.||||
|Top10tradablecommonshareholders|||||
|Nameofshareholder||Numberoftradablecommonsharesheldattheperiod-end|Typeofshares||
||||Type|Number|
|FORDCHEEDEVELOPMENTLIMITED||53,940,530|Domesticallylistedforeignshares|53,940,530|
|EUPAINDUSTRYCORPORATIONLIMITED||24,268,840|Domesticallylistedforeignshares|24,268,840|
|GUOTAIJUNANSECURITIES(HONGKONG)LIMITED||9,196,449|Domesticallylistedforeignshares|9,196,449|
|FILLMANINVESTMENTSLIMITED||4,621,596|Domesticallylistedforeignshares|4,621,596|
|CHIANEVERBRIGHTSECURITIES(HK)CO.,LTD||2,335,823|Domesticallylistedforeignshares|2,335,823|
|SHENWANHONGYUANSECURITIES(H.K.)LIMITED||1,956,752|Domesticallylistedforeignshares|1,956,752|
|CHENYONGQUAN||1,900,376|Domesticallylistedforeignshares|1,900,376|
|CHENYONGQING||1,488,949|Domesticallylistedforeignshares|1,488,949|
|CHENLIJUAN||1,339,434|Domesticallylistedforeignshares|1,339,434|
|DINGXIAOLUN||1,135,000|Domesticallylistedforeignshares|1,135,000|
|Explanation on associated relationship or/andpersons acting in concert among the top tencommon tradable shareholders and betweenthe top ten tradable shareholders and the toptencommonshareholders||Thefirst,thesecondandthefourthshareholdersaretheCompany’scorporatecontrollingshareholders.Itisunknownwhethertheothershareholdersoftradablesharesarerelatedparties or acting-in-concert parties as prescribed in the Administrative Methods forDisclosureoftheShareholdingChangesoftheListedCompany’sShareholders.|||
|Explanation on the top 10 commonshareholders participating in the margintradingbusiness||N/A|||

WhethertheshareholdersofacompanyconductedthetransactionofrepurchaseundertheagreementduringtheReportingPeriod□Yea√No
NosuchsituationoftheCompanyduringtheReportingPeriod.
IV.Changeof thecontrolling shareholderor theactual controller
ChangeincontrollingshareholderintheReportingPeriod
□Applicable√Notapplicable
TherewasnoanychangeofthecontrollingshareholderintheReportingPeriod.
ChangeoftheactualcontrollerduringtheReportingPeriod
□Applicable√Notapplicable
TherewasnoanychangeoftheactualcontrollerduringtheReportingPeriod
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Section VII. Preference Shares
□Applicable√Notapplicable
TherewasnopreferencestockduringtheReportingPeriod.
Section VIII. Directors, Supervisors, Senior Management Staff& Employees
I. Changes inshareholding ofdirectors, supervisors and seniormanagement staff
□Applicable√Notapplicable
Therewasnochangeinshareholdingofdirectors,supervisorsandseniormanagementstaffs,forthespecificinformationpleaserefer tothe2017AnnualReport.
II. Changeofdirectors, supervisors and seniormanagementstaff
□Applicable√Notapplicable
Therewasnochangeinshareholdingofdirectors,supervisorsandseniormanagementstaffs,forthespecificinformationpleaserefer tothe2017AnnualReport.
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Section IX. Corporate Bonds
Arethereanycorporatebondspubliclyofferedandlistedonthestockexchange,whichwereunduebeforetheapprovaldateofthis Reportorwereduebutcouldnotberedeemedinfull?
No
Section X. Financial Report
I.Auditor’s Report
Whetherthesemi-annualreporthasbeenaudited?
□Yes√No
Thesemi-annualreportoftheCompanyhasnotbeenaudited.
II. Financialstatements (attached)
1.Balancesheet
2.Incomestatement
3.Cashflowstatement
4.StatementofChangeinOwners’Equity
5.NotestotheFinancialStatements
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Section XI. Documents Available for Reference
1.ThisReportcarryingthesignatureandsealoftheBoardChairman.
2.Thefinancialstatementssignedandsealedbythelegalrepresentative,theaccountingheadforthisReportandtheaccountinghead oftheCompany.
3. The originals of all theCompany’s documents and announcements which were disclosed on Securities Times, Hong Kong Ta KungPaoandhttp://www.cninfo.com.cn/inthereportingperiod)designatedbytheCSRC.
TheBoardofDirectorsofTsannKuen(China)EnterpriseCo.,Ltd. BoardChairman:PanZhirong
August7,2018
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 1.Consolidatedbalancesheet
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd. Unit:RMB
|||||
|-|-|-|-|
|Item|Note|Closingbalance|Openingbalance|
|CurrentAssets:||||
|Monetaryfunds|VI.1|438,035,096.81|564,381,960.88|
|Settlementreserves||||
|Intra-grouplendings||||
|Financial assets measured at fair value of whichchangesarerecordedincurrentprofitsandlosses|VI.2||3,925,850.00|
|Derivativefinancialassets||||
|Notesreceivable||||
|Accountsreceivable|VI.3|208,402,211.03|270,052,420.89|
|Accountspaidinadvance|VI.4|12,683,301.03|10,939,777.79|
|Premiumsreceivable||||
|Reinsurancepremiumsreceivable||||
|Receivablereinsurancecontractreserves||||
|Interestreceivable|VI.5|1,695,898.95||
|Dividendreceivable||||
|Otheraccountsreceivable|VI.6|27,051,950.24|35,318,724.60|
|Financialassetspurchasedunderagreementstoresell||||
|Inventories|VI.7|228,857,043.21|195,711,505.29|
|Assetsheldforsale||||
|Non-currentassetsduewithin1year||||
|Othercurrentassets|VI.8|377,710,035.73|413,119,671.14|
|Totalcurrentassets||1,294,435,537.00|1,493,449,910.59|
|Non-currentassets:||||
|Entrustedloansbymandateandadvancesgranted||||
|Available-for-salefinancialassets|VI.9|40,000.00|40,000.00|
|Held-to-maturityinvestments||||
|Long-termaccountsreceivable||||
|Long-termequityinvestment||||
|Investingrealestate|VI.10|30,415,709.80|32,125,408.51|
|Fixedassets|VI.11|173,586,284.79|173,361,312.05|
|Constructioninprogress|VI.12|2,996,491.22|2,059,623.18|
|Engineeringmaterials||||
|Disposaloffixedassets||||
|Productionbiologicalassets||||
|Oil-gasassets||||
|Intangibleassets|VI.13|28,124,283.40|29,501,389.01|
|R&Dexpense||||
|Goodwill||||
|Long-termdeferredexpenses|VI.14|8,096,749.00|4,388,248.42|
|Deferredincometaxassets|VI.15|22,867,553.35|22,682,483.17|
|Othernon-currentassets|VI.16|22,528,676.87|21,216,778.58|
|Totalofnon-currentassets||288,655,748.43|285,375,242.92|
|Totalassets||1,583,091,285.43|1,778,825,153.51|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||
|-|-|-|-|
|Item|Note|Closingbalance|Openingbalance|
|Currentliabilities:||||
|Short-termborrowings|VI.17|17,909,899.30|10,832,951.89|
|BorrowingsfromCentralBank||||
|Customer bank deposits and due tobanksandotherfinancialinstitutions||||
|Intra-groupborrowings||||
|Financial liabilities measured at fairvalue of which changes are recorded incurrentprofitsandlosses|VI.18|6,008,550.00||
|Derivativefinancialliabilities||||
|Notespayable|VI.19|19,942,447.13|20,024,149.15|
|Accountspayable|VI.20|432,489,623.92|583,540,229.36|
|Accountsreceivedinadvance|VI.21|11,941,937.58|11,661,974.88|
|Financialassetssoldforrepurchase||||
|Handling charges and commissionspayable||||
|Payrollpayable|VI.22|39,119,018.68|44,803,501.77|
|Taxpayable|VI.23|4,674,769.16|2,824,721.65|
|Interestpayable|VI.24|9,957.32|1,448.76|
|Dividendpayable||||
|Otheraccountspayable|VI.25|63,597,000.58|51,138,758.51|
|Reinsurancepremiumspayable||||
|Insurancecontractreserve||||
|Payablesforactingtradingofsecurities||||
|Payablesforunderwritingofsecurities||||
|Liabilitiesheldforsale||||
|Non-currentliabilitiesduewithin1year||||
|Othercurrentliabilities||||
|Totalcurrentliabilities||595,693,203.67|724,827,735.97|
|Non-currentliabilities:||||
|Long-termborrowings||||
|Bondspayable||||
|Ofwhich:preferredshares||||
|Perpetualbonds||||
|Long-termpayables||||
|Long-termpayrollpayables|VI.26|178,526.85|156,540.09|
|Specificpayables|VI.27|109,137,778.28|109,137,778.28|
|Estimatedliabilities||||
|Deferredincome||||
|Deferredincometaxliabilities|VI.15|970,006.50|1,431,505.08|
|Othernon-currentliabilities||||
|Totalnon-currentliabilities||110,286,311.63|110,725,823.45|
|Totalliabilities||705,979,515.30|835,553,559.42|
|Shareholders'equity||||
|Sharecapital|VI.28|185,391,680.00|185,391,680.00|
|Otherequityinstruments||||
|Ofwhich:preferredshares||||

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||
|-|-|-|-|
|Item|Note|Closingbalance|Openingbalance|
|Perpetualbonds||||
|Capitalreserves|VI.29|296,808,965.79|296,808,965.79|
|Less:Treasurystock||||
|Othercomprehensiveincome|VI.30|4,580,506.61|4,619,820.87|
|Specificreserves||||
|Surplusreserves|VI.31|33,888,636.90|33,888,636.90|
|Provisionsforgeneralrisks||||
|Retainedprofits|VI.32|46,932,203.04|90,105,224.21|
|Total equity attributable to shareholders oftheCompany||567,601,992.34|610,814,327.77|
|Minorityinterests||309,509,777.79|332,457,266.32|
|Totalshareholders'equity||877,111,770.13|943,271,594.09|
|Totalliabilitiesandshareholders'equity||1,583,091,285.43|1,778,825,153.51|

 LegalRepresentative:PanZhirong PersoninChargeofAccountingWork:FengZhiqing PersoninChargeofFinancialDepartment:FengZhiqing
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 2.BalancesheetoftheCompany
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd. Unit:RMB
|||||
|-|-|-|-|
|Item|Note|Closingbalance|Openingbalance|
|CurrentAssets:||||
|Monetaryfunds|XIII.1|6,629,136.10|5,342,389.95|
|Financial assets measured at fair valueof which changes are recorded in currentprofitsandlosses||||
|Derivativefinancialassets||||
|Notesreceivable||||
|Accountsreceivable|XIII.2|17,656,481.89|20,741,059.08|
|Accountspaidinadvance|||443,847.00|
|Interestreceivable||||
|Dividendreceivable||||
|Otheraccountsreceivable|XIII.3|2,442,972.59|472,467.07|
|Inventories||13,038,173.84|16,130,234.05|
|Assetsheldforsale||||
|Non-currentassetsduewithin1year||||
|Othercurrentassets|||1,023,556.88|
|Totalcurrentassets||39,766,764.42|44,153,554.03|
|Non-currentassets:||||
|Available-for-salefinancialassets||40,000.00|40,000.00|
|Held-to-maturityinvestments||||
|Long-termaccountsreceivable||||
|Long-termequityinvestment||922,914,701.56|922,914,701.56|
|Investingrealestate||31,038,377.44|32,598,504.60|
|Fixedassets||1,373,412.88|1,568,125.72|
|Constructioninprogress||||
|Engineeringmaterials||||
|Disposaloffixedassets||||
|Productionbiologicalassets||||
|Oil-gasassets||||
|Intangibleassets||42,749.99|56,249.99|
|R&Dexpense||||
|Goodwill||||
|Long-termdeferredexpenses||4,399.81|18,932.97|
|Deferredincometaxassets||10,422,098.93|10,492,468.50|
|Othernon-currentassets||||
|Totalofnon-currentassets||965,835,740.61|967,688,983.34|
|Totalassets||1,005,602,505.03|1,011,842,537.37|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||
|-|-|-|-|
|Item|Note|Closingbalance|Openingbalance|
|Currentliabilities:||||
|Short-termborrowings||||
|Financialliabilitiesmeasuredatfairvalueofwhich changes are recorded in current profitsandlosses||||
|Derivativefinancialliabilities||||
|Notespayable||||
|Accountspayable||55,526,323.32|71,274,018.34|
|Accountsreceivedinadvance||3,685,527.58|1,664,602.93|
|Payrollpayable||4,862,285.91|2,981,548.19|
|Taxpayable||1,923,789.30|894,510.08|
|Interestpayable||||
|Dividendpayable||||
|Otheraccountspayable||269,176,533.66|288,656,915.61|
|Liabilitiesheldforsale||||
|Non-currentliabilitiesduewithin1year||||
|Othercurrentliabilities||||
|Totalcurrentliabilities||335,174,459.77|365,471,595.15|
|Non-currentliabilities:||||
|Long-termborrowings||||
|Bondspayable||||
|Ofwhich:preferredshares||||
|Perpetualbonds||||
|Long-termpayables||||
|Long-termpayrollpayables||||
|Specificpayables||||
|Estimatedliabilities||||
|Deferredincome||||
|Deferredincometaxliabilities||||
|Othernon-currentliabilities||||
|Totalnon-currentliabilities||||
|Totalliabilities||335,174,459.77|365,471,595.15|
|Shareholders'equity:||||
|Sharecapital||185,391,680.00|185,391,680.00|
|Otherequityinstruments||||
|Ofwhich:preferredshares||||
|Perpetualbonds||||
|Capitalreserves||271,490,289.82|271,490,289.82|
|Less:Treasurystock||||
|Othercomprehensiveincome||||
|Specificreserves||||
|Surplusreserves||33,888,636.90|33,888,636.90|
|Provisionsforgeneralrisks||||
|Retainedprofits||179,657,438.54|155,600,335.50|
|Totalshareholders'equity||670,428,045.26|646,370,942.22|
|Totalliabilitiesandshareholders'equity||1,005,602,505.03|1,011,842,537.37|

LegalRepresentative:PanZhirong PersoninChargeofAccountingWork:FengZhiqing PersoninChargeofFinancialDepartment:FengZhiqing
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 3.Consolidatedincomestatement
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd. Unit:RMB
|||||
|-|-|-|-|
|Item|Note|Reportingperiod|Sameperiodoflastyear|
|I.Totaloperatingrevenues||691,510,505.23|869,683,758.68|
|Including:Salesincome|VI.33|691,510,505.23|869,683,758.68|
|II.Totaloperatingcosts||736,953,702.43|859,363,439.15|
|Including:Costofsales|VI.33|625,449,017.39|739,507,468.93|
|Taxesandassociatecharges|VI.34|5,691,534.94|5,695,363.61|
|Sellinganddistributionexpenses|VI.35|27,581,504.82|30,129,026.59|
|Administrativeexpenses|VI.36|74,639,753.64|74,782,758.93|
|Financialexpenses|VI.37|-1,231,441.78|9,184,381.52|
|Assetimpairmentloss|VI.38|4,823,333.42|64,439.57|
|Add:Gain/(loss)fromchangeinfairvalue(“-”meansloss)|VI.39|-9,934,400.00|1,881,750.00|
|Gain/(loss)frominvestment(“-”meansloss)|VI.40|9,876,900.98|1,724,730.14|
|Including:shareofprofitsinassociatesandjointventures||||
|Foreignexchangegains(“-”meansloss)||||
|Gainsondisposalofassets(“-”meansloss)|VI.41|376,183.60|318,516.72|
|Othergains|VI.42|1,562,092.00|888,232.00|
|III.Businessprofit(“-”meansloss)||-43,562,420.62|15,133,548.39|
|Add:non-operatingincome|VI.43|2,467,573.87|2,128,098.76|
|Including:Gainonscrappingofnon-currentassets||||
|Less:non-operatingexpense|VI.44|37,214.69|280,164.66|
|Including:Lossonscrappingofnon-currentassets||12,582.69|211,164.66|
|IV.Totalprofit(“-”meansloss)||-41,132,061.44|16,981,482.49|
|Less:Incometaxexpense|VI.45|-1,038,509.51|3,416,067.76|
|V.Netprofit(“-”meansloss)||-40,093,551.93|13,565,414.73|
|(I)Classifiedbybusinesscontinuity||||
|1.Netprofitfromcontinuedoperations(“-”meansloss)||-40,093,551.93|13,565,414.73|
|2.Netprofitfromdiscontinuedoperations(“-”meansloss)||||
|(II)Classifiedbyownership||||
|1.Minorityshareholders’income(“-”meansloss)||-11,751,865.16|2,498,840.62|
|2.NetprofitattributabletoshareholderoftheCompany(“-”meansloss)||-28,341,686.77|11,066,574.11|
|VI.After-taxnetamountofothercomprehensiveincomes|VI.46|-52,419.01|-1,688,350.45|
|After-tax net amount of other comprehensive incomesattributabletoshareholdersoftheCompany||-39,314.26|-1,266,262.84|
|(I) Other comprehensive incomes that will not bereclassifiedintogainsandlosses||||
|1. Changes in net liabilities or assets with a definedbenefitplanuponre-measurement||||
|2.Enjoyablesharesinothercomprehensiveincomesin investees that cannot be reclassified into gains and lossesundertheequitymethod||||
|(II) Other comprehensive incomes that will bereclassifiedintogainsandlosses||-39,314.26|-1,266,262.84|
|1.Enjoyablesharesinothercomprehensiveincomesininvesteesthatwillbereclassifiedintogainsandlossesundertheequitymethod||||
|2. Gains and losses on fair value changes ofavailable-for-salefinancialassets||||
|3.Gainsandlossesonreclassifyingheld-to-maturityinvestmentsintoavailable-for-salefinancialassets||||
|4.Effectivehedginggainsandlossesoncashflows||||
|5. Foreign-currency financial statement translationdifference||-39,314.26|-1,266,262.84|
|6.Other||||
|After-tax net amount of other comprehensive incomesattributabletominorityshareholders||-13,104.75|-422,087.61|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||
|-|-|-|-|
|Item|Note|Reportingperiod|Sameperiodoflastyear|
|VII.Totalcomprehensiveincomes||-40,145,970.94|11,877,064.28|
|AttributabletoshareholdersoftheCompany||-28,381,001.03|9,800,311.27|
|Attributabletominorityshareholders||-11,764,969.91|2,076,753.01|
|VIII.Earningspershare||||
|(I)Basicearningspershare||-0.15|0.06|
|(II)Dilutedearningspershare||-0.15|0.06|

 Wherebusinessmergersunderthesamecontroloccurredinthisreportingperiod,thenetprofitachievedbythemergedpartiesbefore thebusinessmergerswasRMB0,withthecorrespondingamountforthelastperiodbeingRMB0.
LegalRepresentative:PanZhirong PersoninChargeofAccountingWork:FengZhiqing PersoninChargeofFinancialDepartment:FengZhiqing
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 4.IncomestatementoftheCompany
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd. Unit:RMB
|||||
|-|-|-|-|
|Item|Note|Reportingperiod|Sameperiodoflastyear|
|I.Totalsales|XIII.4|57,021,722.96|37,935,863.38|
|Less:costofsales|XIII.4|45,432,601.10|26,745,263.79|
|Businesstaxesandsurcharges||1,143,445.76|1,034,131.00|
|Distributionexpenses||3,658,807.44|4,655,640.49|
|Administrativeexpenses||2,058,893.07|6,256,545.30|
|Financialcosts||163,280.68|-77,973.23|
|Impairmentloss||180,831.29|-890,712.11|
|Add:gain/(loss)fromchangeinfairvalue(“-”meansloss)||||
|Gain/(loss)frominvestment(“-”meansloss)|XIII.5|33,547,555.83|30,310,250.78|
|Including: income from investment on associatesandjointventures||||
|Gainsondisposalofassets(“-”meansloss)||||
|Othergains||||
|II.Businessprofit(“-”meansloss)||37,931,419.45|30,523,218.92|
|Add:non-operatingincome||1,032,019.56|111,632.54|
|Including: Gain on scrapping of non-currentassets||||
|Less:non-operatingexpense||4,632.00||
|Including: Loss on scrapping of non-currentassets||||
|III.Totalprofit(“-”meansloss)||38,958,807.01|30,634,851.46|
|Less:Incometaxexpense||70,369.57|303,964.46|
|IV.Netprofit(“-”meansloss)||38,888,437.44|30,330,887.00|
|(I)Netprofitfromcontinuedoperations(“-”meansloss)||||
|(II)Netprofitfromdiscontinuedoperations(“-”meansloss)||||
|V.After-taxnetamountofothercomprehensiveincomes||||
|(I)Othercomprehensiveincomesthatwillnotbereclassifiedintogainsandlosses||||
|1. Changes in net liabilities or assets with adefinedbenefitplanuponre-measurement||||
|2. Enjoyable shares in other comprehensiveincomes in investees that cannot be reclassified intogainsandlossesundertheequitymethod||||
|(II) Other comprehensive incomes that will bereclassifiedintogainsandlosses||||
|1. Enjoyable shares in other comprehensiveincomes in investees that will be reclassified into gainsandlossesundertheequitymethod||||
|2. Gains and losses on fair value changes ofavailable-for-salefinancialassets||||
|3. Gains and losses on reclassifyingheld-to-maturity investments into available-for-salefinancialassets||||
|4. Effective hedging gains and losses on cashflows||||
|5. Foreign-currency financial statementtranslationdifference||||
|6.Other||||
|VI.Totalcomprehensiveincomes||38,888,437.44|30,330,887.00|

LegalRepresentative:PanZhirong PersoninChargeofAccountingWork:FengZhiqing PersoninChargeofFinancialDepartment:FengZhiqing
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 5.Consolidatedcashflowstatement
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd. Unit:RMB
|||||
|-|-|-|-|
|Item|Note|Reportingperiod|Sameperiodoflastyear|
|I.Cashflowsfromoperatingactivities:||||
|Cash received from sale of commodities and rendering ofservice||741,100,978.85|880,124,770.86|
|Taxrefundsreceived||84,150,245.73|98,954,676.31|
|Othercashreceivedrelatingtooperatingactivities|VI.47(1)|30,549,731.71|31,713,946.31|
|Subtotalofcashinflowsfromoperatingactivities||855,800,956.29|1,010,793,393.48|
|Cashpaidforgoodsandservices||765,631,339.82|774,245,705.02|
|Cashpaidtoandforemployees||130,024,671.94|133,551,803.87|
|Varioustaxespaid||10,123,845.80|24,040,423.11|
|Othercashpaymentrelatingtooperatingactivities|VI.47(2)|69,842,669.22|136,466,757.44|
|Subtotalofcashoutflowsfromoperatingactivities||975,622,526.78|1,068,304,689.44|
|Netcashflowsfromoperatingactivities||-119,821,570.49|-57,511,295.96|
|II.Cashflowsfrominvestingactivities:||||
|Cashreceivedfromwithdrawalofinvestments||79,608,500.00|365,334,812.92|
|Cashreceivedfromreturnoninvestments||2,945,209.34|236,201.06|
|Net cash received from disposal of fixed assets, intangibleassetsandotherlong-termassets||463,696.00|2,112,841.63|
|Net cash received from disposal of subsidiaries or otherbusinessunits||||
|Othercashreceivedrelatingtoinvestingactivities|VI.47(3)|246,417,500.00|42,313,208.55|
|Subtotalofcashinflowsfrominvestingactivities||329,434,905.34|409,997,064.16|
|Cashpaidtoacquirefixedassets,intangibleassetsandotherlong-termassets||25,362,525.53|38,298,093.66|
|Cashpaidforinvestment||40,000,000.00|503,252,795.01|
|Netcashpaidtoacquiresubsidiariesandotherbusinessunits||||
|Othercashpaymentsrelatingtoinvestingactivities|VI.47(4)|435,917,500.00|377,386,926.35|
|Subtotalofcashoutflowsfrominvestingactivities||501,280,025.53|918,937,815.02|
|Netcashflowsfrominvestingactivities||-171,845,120.19|-508,940,750.86|
|III.CashFlowsfromFinancingActivities:||||
|Cashreceivedfromcapitalcontributions||||
|Including: Cash received from minority shareholderinvestmentsbysubsidiaries||||
|Cashreceivedfromborrowings||18,881,758.13|151,183,998.00|
|Cashreceivedfromissuanceofbonds||||
|Othercashreceivedrelatingtofinancingactivities|VI.47(5)||6,774,375.98|
|Subtotalofcashinflowsfromfinancingactivities||18,881,758.13|157,958,373.98|
|Repaymentofborrowings||11,912,827.70|24,730,160.00|
|Cash paid for interest expenses and distribution ofdividendsorprofit||26,263,665.11|32,521,569.11|
|Including: dividends or profit paid by subsidiaries tominorityshareholders||11,182,518.60|15,707,954.97|
|Othercashpaymentsrelatingtofinancingactivities|VI.47(6)|||
|Sub-totalofcashoutflowsfromfinancingactivities||38,176,492.81|57,251,729.11|
|Netcashflowsfromfinancingactivities||-19,294,734.68|100,706,644.87|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||
|-|-|-|-|
|Item|Note|Reportingperiod|Sameperiodoflastyear|
|IV. Effect of foreign exchange rate changes on cash and cashequivalents||-4,885,438.71|-8,511,122.49|
|V.Netincreaseincashandcashequivalents||-315,846,864.07|-474,256,524.44|
|Add:Openingbalanceofcashandcashequivalents||564,381,960.88|738,195,729.53|
|VI.Closingbalanceofcashandcashequivalents||248,535,096.81|263,939,205.09|

 LegalRepresentative:PanZhirong PersoninChargeofAccountingWork:FengZhiqing PersoninChargeofFinancialDepartment:FengZhiqing
2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 6.CashflowstatementoftheCompany
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd. Unit:RMB
|||||
|-|-|-|-|
|Item|Note|Reportingperiod|Sameperiodoflastyear|
|I.Cashflowsfromoperatingactivities:||||
|Cash received from sale of commoditiesandrenderingofservice||41,028,955.45|55,674,286.26|
|Taxrefundsreceived||||
|Other cash received relatingto operatingactivities||27,809,810.32|21,418,487.10|
|Subtotal of cash inflows from operatingactivities||68,838,765.77|77,092,773.36|
|Cashpaidforgoodsandservices||47,257,580.90|53,556,689.27|
|Cashpaidtoandforemployees||3,011,754.07|7,189,494.06|
|Varioustaxespaid||2,342,544.65|2,292,808.84|
|Othercash payment relatingtooperatingactivities||33,484,456.62|21,465,798.37|
|Subtotal of cash outflows from operatingactivities||86,096,336.24|84,504,790.54|
|Netcashflowsfromoperatingactivities||-17,257,570.47|-7,412,017.18|
|II.Cashflowsfrominvestingactivities:||||
|Cash received from retraction ofinvestments||||
|Cash received from return oninvestments||33,547,555.83|30,310,250.78|
|Net cash received from disposal of fixedassets,intangibleassetsandotherlong-termassets||||
|Net cash received from disposal ofsubsidiariesorotherbusinessunits||||
|Other cash received relating to investingactivities||||
|Subtotal of cash inflows from investingactivities||33,547,555.83|30,310,250.78|
|Cash paid to acquire fixed assets,intangibleassetsandotherlong-termassets|||25,500.00|
|Cashpaidforinvestment||||
|Net cashpaidtoacquiresubsidiariesandotherbusinessunits||||
|Othercashpaymentsrelatingtoinvestingactivities||||
|Subtotal of cash outflows from investingactivities||0.00|25,500.00|
|Netcashflowsfrominvestingactivities||33,547,555.83|30,284,750.78|
|III.CashFlowsfromFinancingActivities:||||
|Cash received from capitalcontributions||||
|Cashreceivedfromborrowings||||
|Cashreceivedfromissuanceofbonds||||
|Other cash received relating tofinancingactivities||||
|Subtotal of cash inflows from financingactivities||0.00|0.00|
|Repaymentofborrowings||||
|Cash paid for interest expenses anddistributionofdividendsorprofit||14,831,334.40|22,247,001.60|
|Other cash payments relating tofinancingactivities||||
|Sub-total of cash outflows from financingactivities||14,831,334.40|22,247,001.60|

2018Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||
|-|-|-|-|
|Item|Note|Reportingperiod|Sameperiodoflastyear|
|Netcashflowsfromfinancingactivities||-14,831,334.40|-22,247,001.60|
|IV.Effectofforeignexchangeratechangesoncashandcashequivalents||-171,904.81|81,131.60|
|V. Net increase in cash and cashequivalents||1,286,746.15|706,863.60|
|Add: Opening balance of cash andcashequivalents||5,342,389.95|6,668,219.24|
|VI. Closing balance of cash and cashequivalents||6,629,136.10|7,375,082.84|

LegalRepresentative:PanZhirong PersoninChargeofAccountingWork:FengZhiqing PersoninChargeofFinancialDepartment:FengZhiqing
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.7.Consolidatedstatementofchangesinshareholders’equity
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd. Unit:RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Reportingperiod|||||||||||||
||EquityattributabletoownersoftheCompany|||||||||||Minorityinterests|Totalowners’equity|
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:treasurystock|Othercomprehensiveincomes|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|||
|||Preferredshares|Perpetualbonds|Other||||||||||
|I.Balanceattheendofthepreviousyear|185,391,680.00||||296,808,965.79||4,619,820.87||33,888,636.90||90,105,224.21|332,457,266.32|943,271,594.09|
|Add: change ofaccountingpolicy||||||||||||||
|Correction of errorsinpreviousperiods||||||||||||||
|Business mergersunderthesamecontrol||||||||||||||
|Other||||||||||||||
|II. Balance at thebeginningoftheyear|185,391,680.00||||296,808,965.79||4,619,820.87||33,888,636.90||90,105,224.21|332,457,266.32|943,271,594.09|
|III. Increase/ decrease inthe period (“-” meansdecrease)|||||||-39,314.26||||-43,173,021.17|-22,947,488.53|-66,159,823.96|
|(I)Totalcomprehensiveincomes|||||||-39,314.26||||-28,341,686.77|-11,764,969.91|-40,145,970.94|
|(II) Capital increasedandreducedbyowners||||||||||||||
|1.Commonsharesincreasedbyshareholders||||||||||||||
|2.Capitalincreasedbyholdersofotherequityinstruments||||||||||||||
|3.Amountsofshare-basedpaymentsrecognizedinowners’equity||||||||||||||
|4.Other||||||||||||||
|(III)Profitdistribution|||||||||||-14,831,334.40|-11,182,518.60|-26,013,853.00|
|1. Appropriations tosurplusreserves||||||||||||||
|2. Appropriations to||||||||||||||

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Reportingperiod|||||||||||||
||EquityattributabletoownersoftheCompany|||||||||||Minorityinterests|Totalowners’equity|
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:treasurystock|Othercomprehensiveincomes|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|||
|||Preferredshares|Perpetualbonds|Other||||||||||
|generalriskprovisions||||||||||||||
|3. Appropriations toowners(orshareholders)|||||||||||-14,831,334.40|-11,182,518.60|-26,013,853.00|
|4.Other||||||||||||||
|(IV) Internalcarry-forward of owners’equity||||||||||||||
|1. New increase ofcapital (or share capital)from capital publicreserves||||||||||||||
|2. New increase ofcapital (or share capital)fromsurplusreserves||||||||||||||
|3. Surplus reservesformakinguplosses||||||||||||||
|4.Other||||||||||||||
|(V)Specificreserve||||||||||||||
|1.Withdrawn for theperiod||||||||||||||
|2.Usedintheperiod||||||||||||||
|(VI)Other||||||||||||-0.02|-0.02|
|IV.Closingbalance|185,391,680.00||||296,808,965.79||4,580,506.61||33,888,636.90||46,932,203.04|309,509,777.79|877,111,770.13|

 LegalRepresentative:PanZhirong PersoninChargeofAccountingWork:FengZhiqing PersoninChargeofFinancialDepartment:FengZhiqing
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (Continued) Unit:RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Sameperiodoflastyear|||||||||||||
||EquityattributabletoshareholdersoftheCompany|||||||||||Minorityinterests|Totalshareholders’equity|
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:treasurystock|Othercomprehensiveincomes|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|||
|||Preferredshares|Perpetualbonds|Other||||||||||
|I. Balance at the end of thepreviousyear|185,391,680.00||||296,808,965.79||8,491,902.45||29,946,218.17||90,217,504.90|340,821,925.69|951,678,197.00|
|Add:changeofaccountingpolicy||||||||||||||
|Correction of errors inpreviousperiods||||||||||||||
|Business mergers underthesamecontrol||||||||||||||
|Other||||||||||||||
|II. Balance at the beginningoftheyear|185,391,680.00||||296,808,965.79||8,491,902.45||29,946,218.17||90,217,504.90|340,821,925.69|951,678,197.00|
|III. Increase/ decrease in theperiod(“-”meansdecrease)|||||||-3,872,081.58||3,942,418.73||-112,280.69|-8,364,659.37|-8,406,602.91|
|(I) Total comprehensiveincomes|||||||-3,872,081.58||||26,077,139.64|1,738,757.56|23,943,815.62|
|(II) Capital increased andreducedbyshareholders||||||||||||||
|1.Commonsharesincreasedbyshareholders||||||||||||||
|2.Capitalincreasedbyholdersofotherequityinstruments||||||||||||||
|3.Amountsofshare-basedpaymentsrecognizedinshareholders’equity||||||||||||||
|4.Other||||||||||||||
|(III)Profitdistribution|||||||||3,942,418.73||-26,189,420.33|-10,103,416.93|-32,350,418.53|
|1. Appropriations tosurplusreserves|||||||||3,942,418.73||-3,942,418.73|||
|2. Appropriations togeneralriskprovisions||||||||||||||
|3. Appropriations toshareholders|||||||||||-22,247,001.60|-10,103,416.93|-32,350,418.53|
|4.Other||||||||||||||
|(IV)Internalcarry-forwardofshareholders’equity||||||||||||||
|1. New increase ofcapital(orsharecapital)from||||||||||||||

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Sameperiodoflastyear|||||||||||||
||EquityattributabletoshareholdersoftheCompany|||||||||||Minorityinterests|Totalshareholders’equity|
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:treasurystock|Othercomprehensiveincomes|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|||
|||Preferredshares|Perpetualbonds|Other||||||||||
|capitalpublicreserves||||||||||||||
|2. New increase ofcapital(orsharecapital)fromsurplusreserves||||||||||||||
|3. Surplus reserves formakinguplosses||||||||||||||
|4.Other||||||||||||||
|(V)Specificreserve||||||||||||||
|1. Withdrawn for theperiod||||||||||||||
|2.Usedintheperiod||||||||||||||
|(VI)Other||||||||||||||
|IV.Closingbalance|185,391,680.00||||296,808,965.79||4,619,820.87||33,888,636.90||90,105,224.21|332,457,266.32|943,271,594.09|

 LegalRepresentative:PanZhirong PersoninChargeofAccountingWork:FengZhiqing PersoninChargeofFinancialDepartment:FengZhiqing
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.8.Statementofchangesinshareholders’equityoftheCompany
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd. Unit:RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Reportingperiod||||||||||||
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:treasurystock|Othercomprehensiveincomes|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|Totalshareholders’equity|
|||Preferredshares|Perpetualbonds|Other|||||||||
|I.Balanceattheendofthepreviousyear|185,391,680.00||||271,490,289.82||||33,888,636.90||155,600,335.50|646,370,942.22|
|Add: change ofaccountingpolicy|||||||||||||
|Correction oferrors in previousperiods|||||||||||||
|Other|||||||||||||
|II. Balance at thebeginning of theyear|185,391,680.00||||271,490,289.82||||33,888,636.90||155,600,335.50|646,370,942.22|
|III. Increase/decrease in theperiod (“-” meansdecrease)|||||||||||24,057,103.04|24,057,103.04|
|(I) Totalcomprehensiveincomes|||||||||||38,888,437.44|38,888,437.44|
|(II) Capitalincreased andreduced byshareholders|||||||||||||
|1.Commonsharesincreasedbyshareholders|||||||||||||
|2.Capitalincreasedbyholdersofotherequityinstruments|||||||||||||
|3.Amountsofshare-basedpaymentsrecognizedinshareholders’equity|||||||||||||
|4.Other|||||||||||||
|(III) Profitdistribution|||||||||||-14,831,334.40|-14,831,334.40|

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Reportingperiod||||||||||||
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:treasurystock|Othercomprehensiveincomes|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|Totalshareholders’equity|
|||Preferredshares|Perpetualbonds|Other|||||||||
|1.Appropriations tosurplusreserves|||||||||||||
|2.Appropriations togeneral riskprovisions|||||||||||||
|3.Appropriations toshareholders|||||||||||-14,831,334.40|-14,831,334.40|
|4.Other|||||||||||||
|(IV) Internalcarry-forward ofshareholders’equity|||||||||||||
|1.Newincreaseof capital (or sharecapital) from capitalpublicreserves|||||||||||||
|2.Newincreaseof capital (or sharecapital)fromsurplusreserves|||||||||||||
|3. Surplusreserves for makinguplosses|||||||||||||
|4.Other|||||||||||||
|(V)Specificreserve|||||||||||||
|1. Withdrawnfortheperiod|||||||||||||
|2. Used in theperiod|||||||||||||
|(VI)Other|||||||||||||
|IV.Closingbalance|185,391,680.00||||271,490,289.82||||33,888,636.90||179,657,438.54|670,428,045.26|

 LegalRepresentative:PanZhirong PersoninChargeofAccountingWork:FengZhiqing PersoninChargeofFinancialDepartment:FengZhiqing
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (Continued) Unit:RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Sameperiodoflastyear||||||||||||
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:treasurystock|Othercomprehensiveincomes|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|Totalshareholders’equity|
|||Preferredshares|Perpetualbonds|Other|||||||||
|I. Balanceattheendofthepreviousyear|185,391,680.00||||271,490,289.82||||29,946,218.17||142,365,568.49|629,193,756.48|
|Add:changeofaccountingpolicy|||||||||||||
|Correction of errors in previousperiods|||||||||||||
|Other|||||||||||||
|II. Balance at the beginning of theyear|185,391,680.00||||271,490,289.82||||29,946,218.17||142,365,568.49|629,193,756.48|
|III. Increase/ decrease in the period(“-”meansdecrease)|||||||||3,942,418.73||13,234,767.01|17,177,185.74|
|(I)Totalcomprehensiveincomes|||||||||||39,424,187.34|39,424,187.34|
|(II) Capital increased and reducedbyshareholders|||||||||||||
|1.Commonsharesincreasedbyshareholders|||||||||||||
|2.Capitalincreasedbyholdersofotherequityinstruments|||||||||||||
|3.Amountsofshare-basedpaymentsrecognizedinshareholders’equity|||||||||||||
|4.Other|||||||||||||
|(III)Profitdistribution|||||||||3,942,418.73||-26,189,420.33|-22,247,001.60|
|1. Appropriations to surplusreserves|||||||||3,942,418.73||-3,942,418.73||
|2.Appropriationstogeneralriskprovisions|||||||||||||
|3. Appropriations toshareholders|||||||||||-22,247,001.60|-22,247,001.60|
|4.Other|||||||||||||
|(IV) Internal carry-forward ofshareholders’equity|||||||||||||
|1. New increase of capital (orshare capital) from capital publicreserves|||||||||||||
|2. New increase of capital (orsharecapital)fromsurplusreserves|||||||||||||

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Sameperiodoflastyear||||||||||||
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:treasurystock|Othercomprehensiveincomes|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|Totalshareholders’equity|
|||Preferredshares|Perpetualbonds|Other|||||||||
|3. Surplus reserves for makinguplosses|||||||||||||
|4.Other|||||||||||||
|(V)Specificreserve|||||||||||||
|1.Withdrawnfortheperiod|||||||||||||
|2.Usedintheperiod|||||||||||||
|(VI)Other|||||||||||||
|IV.Closingbalance|185,391,680.00||||271,490,289.82||||33,888,636.90||155,600,335.50|646,370,942.22|

 LegalRepresentative:PanZhirong PersoninChargeofAccountingWork:FengZhiqing PersoninChargeofFinancialDepartment:FengZhiqing
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Tsann Kuen (China) Enterprise Co., Ltd.
Notes to Financial Statements as of June 30, 2018
(All currency amounts hereinareexpressed, unless otherwisestated, inRMB.) I. Company Profile
Tsann Kuen (China) Enterprise Co., Ltd. (hereafter “the Company or TKC”) was established in thePeople’s Republic of China (“the PRC”) in 1988 as a wholly owned foreign investment enterprise, the Company named in Tsann Kuen China (Xiamen) Ltd. firstly, invested by the Fordchee (Hong Kong) Co., Ltd., EUPA Industry Corporation Limited and Hong Kong Fillman Investment Co., Ltd.. On February 16, 1993, with the approval of the Ministry of Foreign Trade and Economic Co-operation, the Company was reorganized into an incorporated company and was renamed as Tsann Kuen (China) Enterprise Co., Ltd. In June 1993, the Company issued 40,000,000 new shares pursuant to an international placing and public offer and these new shares (“B shares”) were then listed on the Shenzhen Stock Exchange on June 30, 1993. In according to the 5th special Board of Director in 2012, “Bill about Implementation of Drawing back Share” authorized by third special General Meeting in 2012,documentXTCS[2012] NO.698 “Subscriptions about Reduction of Capital of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Authorized by Xiamen Investment Promotion Bureau” authorized by Commerce Department, the Company used the general capital of 1,112,350,077 shares as base number implementing the plan of share reduction at the ratio of 1:6 to all the register share holders in December 28, 2012. Upon the completion of share reduction, the general capital of the Company reduced from 1,112,350,077 shares to185,391,680 shares. By June 30,2018,theregistered capital of theCompany decreased to RMB185,391,680. Follow The Ministry of Commerce of thePeople’s Republic of China approved (The No.[2005] 3107<Agreed in principle to the Ministry of Commerce on Tsann Kuen (China) Enterprise Co., Ltd. shares traded sponsor of theapproval>), On December 6, 2006, the Company received the[2006] No. 266 file<The notice ofTsann Kuen (China) Enterprise Co., Ltd concerning the approval of non-listed foreign sharestraded> from China Securities Regulatory Commission. The China Securities Regulatory Commission agreed 700,476,830 unlisted shares (account for62.97% of the share capital) hold by theCompany’s shareholders, EUPA Industry Corporation Limited, Fordchee Development Limited and Fillman Investment Limited to transfer into B shares. In November 29, 2007
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. these B shares could be listed and exercised on Shenzhen Stock Exchange. Up to June 30, 2018, total B shares hold by the three legal shareholders (EUPA Industry Corporation Limited, Fordchee Development Limited and Fillman Investment Limited) are 82,830,966shares. (accountfor44.68% oftheshare capital).
Legal representative: Pan, Zhirong
Place of registration: No.88 Xinglong Road, Huli Industrial District, Xiamen, Fujian Province
Theparent: StarComgisticCapital Co. Ltd.
Theindustry ofthecompany: electrical machinery and equipment manufacturing.
The approved business scope: the main business is to develop, manufacture household appliances, electronics, light industrial products, modern office supplies. Design and manufacture of molds associated with these products in domestic and international sales of thecompany’s products and after-sales service. Wholesale and retail household appliances, electronic products, electrical equipment, office supplies, kitchen utensils, pre-packaged food (limited to branches), import and export related business and provide after-sales service (the above description do not involve state trading commodity goods, involving quota license management products are according to the relevant provisions of theStateforthe regulations application).
The Financial Report approved by the Board of the Directors of the Company and disclosed onAugust 7,2018
There were 11 subsidiaries be included on June 30, 2018 of the Company with the details in Notes VII “Equities among other entities”. There was one more subsidiary during the ReportingPeriod than that in lastyear.
II.Basis forpreparation ofthefinancial statements
The financial statements of company have been prepared on basis of going concern in conformity with Chinese Accounting Standards for Business Enterprises and the Accounting Systems for Business Enterprises issued by the Ministry of Finance ofPeople’s Republic of China (Ministry of Finance issued order No.33, the Ministry of Finance revised order No.76) on February 15, 2006, and revised Accounting Standards (order 42 of the Ministry of Finance) and Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15– General Provisions on Financial Reports (2014 Revision)issued bytheChinaSecurities Regulatory Commission(CSRC). According to the relevant accounting regulations in Chinese Accounting Standards for Business Enterprises, the company has adopted the accrual basis of accounting. Except
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. for certain financial instruments which are measured by at fair value, the Company adopts the historical cost as the principle of measurement in the financial statements. Where assets are impaired, allowances for asset impairment are made in accordance with relevantrequirements.
III.Statementof Compliancewith EnterpriseAccounting Standards
The financial statements of the company are recognized and measured in accordance with the regulations in the Chinese Accounting Standards for Business Enterprises and they give a true and fair view of the financial position, business result and cash flow of the Company as of June 30, 2018. In addition, the financial statements of the company comply, in all material respects, with the revised disclosing requirements for financial statements and the Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15—General Provisions onFinancial Reports (2014 Revision) issued byChinaSecurities Regulatory Commission (CSRC)in 2014.
IV.ImportantAccounting Principles andAccounting Estimates
The Company and subsidiaries are principally engaged in the production and operation. The Company and subsidiaries in accordance with the actual production and management features, according to the relevant provisions ofAccounting Standards, to make a number of specific accounting policies and accounting estimates for other transactions and events of revenue recognition, see Note IV. 23 “Revenue” for the description. For description of significant accounting judgments and estimates made​​ by management, see Note IV. 28“Significant accounting judgments and estimates”.
1.Accounting period
The accounting period of the Company is classified as interim period and annual period. Interim period refers to the reporting period shorter than a complete annual period. The accounting period oftheCompany is thecalendar year from January 1to December31. 2.Operating cycle
Normal business cycle is realized by the Company in cash or cash equivalents from the purchase of assets for processing until. The company has a 12 -month operating cycle, and its assets and liabilities as liquidity criteria fortheclassification.
3.Monetary Unit
Yuan (CNY) is the currency of the primary economic environment in which the Company and its domestic subsidiaries operate. Therefore, the Company and its domestic subsidiaries choose CNY as their functional currency, the overseas subsidiaries decide the HKD, USD, NTD or IDR as their functional currency in accordance with the business in which currency of the primary economic environment. The Company adopts CNY to
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. prepareits functional statements.
4.Businesscombination
A business combination is a transaction or event that brings together two or more separate entities into one reporting entity. Business combinations are classified into business combinations involving enterprises under common control and business combinations notinvolvingenterprises undercommon control.
(1)Business combination involvingentities undercommon control
A business combination involving enterprises under common control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. For a business combination involving enterprises under common control, the party that, on the combination date, obtains control of another enterprise participating in the combination is the absorbing party, while that other enterprise participating in the combination is a party being absorbed. Combination date is the date on which the absorbing party effectively obtains control of theparty being absorbed.
The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise being combined at the combination date. The difference between the carrying amount of the net assets obtained and the carrying amount of consideration paid for the combination (or the total face value of shares issued) is adjusted to the capital premium (or share premium) in the capital reserve. If the balance of the capital premium (orshare premium)is insufficient, any excess is adjusted to retained earnings.
The cost of a combination incurred by the absorbing party includes any costs directly attributable to the combination shall be recognized as an expense through profit or loss forthe current period when incurred.
(2)Business combination involvingentities notunder common control
A business combination involving enterprises not under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the business combination. For a business combination not involving enterprises under common control, the party that, on the acquisition date, obtains control of another enterprise participating in the combination is the acquirer, while that other enterprise participating in the combination is the acquiree. Acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
For a business combination not involving enterprise under common control, the
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. combination cost including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services, valuation and consultancy services etc and other associated administrative expenses attributable to the business combination are recognized in profit or loss when they are incurred. The transaction cost arose from issuing of equity securities or liability securities shall be initially recognized as equity securities or liability securities. The contingent consideration related to the combination shall be booked as combination cost at the fair value at the acquisition date. If, within the 12 months after acquisition, additional information can prove the existence of related information at acquisition date and the contingent consideration need to be adjusted, goodwill can be adjusted. Combination cost of theacquirer’s interest and identifiable net assets of the acquirer acquired through the business combination shall be measured by the fair value at the acquisition date. Where the cost of combination exceeds theacquirer’s interest in the fair value of theacquiree’s identifiable net assets, the difference shall be recognised as goodwill. Where the cost of combination is less than theacquirer’s interest in the fair value of theacquiree’s identifiable net assets, the difference shall be accounted for according to the following requirements: (i) the acquirer shall reassess the measurement of the fair values of theacquiree’s identifiable assets, liabilities and contingent liabilities and measurement of the cost of combination; (ii) if after that reassessment, the cost of combination is still less than theacquirer’s interest in the fair values of theacquiree’s identifiable net assets, the acquirer shall recognise the remaining difference immediately in profit or loss for the current period.
Where the temporary difference obtained by the acquirer was not recognised due to inconformity with the conditions applied for recognition of deferred income tax, if, within the 12 months after acquisition, additional information can prove the existence of related information at acquisition date and the expected economic benefits on the acquisition date arose from deductible temporary difference by the acquiree can be achieved, relevant income tax assets can be recognised, and goodwill offset. If the goodwill is not sufficient, the difference shall be recognised as profit of the current period. Apart from above, the differences shall be taken into profit or loss of the current period iftherecognition ofdeferred incometax assets isrelated tothe combination.
For a business combination not involving enterprise under common control, which achieved in stages that involves multiple exchange transactions, according to “The notice
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. of the Ministry of Finance on the issuance ofAccounting Standards Interpretation No. 5” (CaiKuai[2012] No. 19) and Article 51 of “Accounting Standards for Business Enterprises No.33 - Consolidated Financial Statements” on the “package deal” criterion (see Note IV. 5 (2)), to judge the multiple exchange transactions whether they are the"package deal". If it belong to the “package deal” in reference to the preceding paragraphs of this section and the Notes described in Note IV.13 “long-term investment” accounting treatment, if it does not belong to the “package deal” to distinguish the individual financial statements and the consolidated financial statements related to the accounting treatment:
In the individual financial statements, the total value of the book valueoftheacquiree's equity investment before the acquisition date and the cost of new investment at the acquisition date, as the initial cost of the investment, the acquiree's equity investment before the acquisition date involved in other comprehensive income, in the disposal of the investment will be in other comprehensive income associated with the use of infrastructure and the acquiree directly related to the disposal of assets or liabilities of the same accounting treatment (that is, except in accordance with the equity method of accounting in the defined benefit plan acquiree is remeasured net changes in net assets or liabilities other than in the corresponding share of the lead, and the rest into the current investment income).
In the combination financial statements, the equity interest in the acquiree previously held before the acquisition date re-assessed at the fair value at the acquisition date, with any difference between its fair value and its carrying amount is recorded as investment income.The previously-held equity interest in the acquiree involved in other comprehensive income and other comprehensive income associated with the purchase of the foundation should be used party directly related to the disposal of assets or liabilities of the same accounting treatment (that is, except in accordance with the equity method of accounting in the acquiree is remeasured defined benefit plans other than changes in net liabilities or net assets due to a corresponding share of the rest of the acquisition date into current investmentincome).
5.Preparationof theconsolidatedfinancialstatements
(1)The scope ofconsolidation
The scope of consolidation for the consolidated financial statements is determined on the basis of control. Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities. The scope of
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. consolidation includes the Company and all of the subsidiaries. Subsidiary is an enterprise orentity under thecontrol ofthe Company.
Once the change in the relevant facts and circumstances leading to the definition of the relevant elements involved in the control of the change, the company will be re-evaluated.
(2)Preparation of theconsolidated financial statements
The subsidiary of the Company is included in the consolidated financial statements from the date when the control over the net assets and business decisions of the subsidiary is effectively obtained, and excluded from the date when the control ceases. For a subsidiary disposed of by the Company, the operating results and cash flows before the date of disposal (the date when control is lost) are included in the consolidated income statement and consolidated statement of cash flows, as appropriate. For a subsidiary disposed during the period, no adjustment is made to the opening balance of the consolidated financial statements. For a subsidiary acquired through a business combination not under common control, the operating results and cash flows from the acquisition (the date when the control is obtained) are included in the consolidated income statement and consolidated statement of cash flows, as appropriated; no adjustment is made to the opening balance and comparative figures in the consolidated financial statements. Where a subsidiary was acquired during the reporting period, through a business combination involving enterprises under common control, the financial statements of the subsidiary are included in the consolidated financial statements. The results of operations and cash flow are included in the consolidated balance sheet and the consolidated income statement, respectively, based on their carrying amounts, from the date that common control was established, and the opening balances and the comparative figures of the consolidated financial statements are restated.
When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Company makes necessary adjustments to the financial statements of the subsidiary based on theCompany’s own accounting period or accounting policies. Where a subsidiary was acquired during the reporting period through a business combination not under common control, the financial statements was reconciliated on the basis of the fair value of identifiable net assets at the date of acquisition.
Intra-Group balances and transactions, and any unrealised profit or loss arising from
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. intra-Group transactions, are eliminated in preparing the consolidated financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Company are presented separately in the consolidated balance sheet withinshareholders’/owners’ equity and net profit. Net profit or loss attributable to minority shareholders in the subsidiaries is presented separately as minority interest in the consolidated income statement below the net profit line item. When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds the minorityshareholders’portion of the opening balance ofshareholders’/equity of the subsidiary, the excess isallocated against the minorityinterests.
When the Company loses control of a subsidiary due to the disposal of a portion of an equity investment or other reasons, the remaining equity investment is re-measured at its fair value at the date when control is lost. The difference between 1) the total amount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and 2) the carrying amounts of the interest in the formersubsidiary’s net assets immediately before the loss of the control is recognised as investment income for the current period when control is lost. Other comprehensive income related to the former subsidiary's equity investment, using the foundation and the acquiree directly related to the disposal of the same assets or liabilities are accounted when the control is lost (ie, in addition to the former subsidiary is remeasured at the net defined benefit plan or changes in net assets and liabilities resulting from, the rest are transferred to the current investment income). The retained interest is subsequently measured according to the rules stipulated in the - “Chinese Accounting Standards for Business Enterprises No.2 - Long-term equity investment” or “Chinese Accounting Standards for Business Enterprises No. 22 - Determination and measurement of financial instruments”. See Note IV.13 Long-term equity investments and Note IV. 9 Financial instrumentsfor details.
The company get through multiple transactions step deal with disposal of the subsidiary's equity investment until the loss of control, need to distinguish between equity until the disposal of a subsidiary's loss of control over whether the transaction is package deal. Terms of the transaction disposition of equity investment in a subsidiary, subject to the following conditions and the economic impact of one or more of cases, usually indicates that several transactions should be accounted for as a packagedeal:①these transactions are considered simultaneously, or in the case of mutual influence made,②these
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. transactions as a whole in order to achieve a complete business results;③the occurrence of a transaction depends on occurs at least one other transaction;④a transaction look alone is not economical, but when considered together with other transaction is economical. If they does not belong to the package deal, each of them separately, as the case of a transaction in accordance with “without losing control over the disposal of a subsidiary part of a long-term equity investments“(see Note IV.13. (2)④) and “due to the disposal of certain equity investments or other reasons lost control of a subsidiary of the original” (see previous paragraph) principles applicable accounting treatment. Until the disposal of the equity investment loss of control of a subsidiary of the transactions belonging to the package deal, the transaction will be used as a disposal of a subsidiary and the loss of control of the transaction. However, before losing control of the price of each disposal entitled to share in the net assets of thesubsidiary’s investment corresponding to the difference between the disposals, recognised in the consolidated financial statements as other comprehensive income, loss of control over the transferred togetherwith theloss ofcontrol or lossin theperiod.
6.Jointarrangement
Ajoint arrangement is an arrangement of which two or more parties have joint control.A joint arrangement is either a joint operation or a joint venture, depending on the rights and obligation of the Company in the joint arrangement. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to thenet assets ofthearrangement.
The Company accounts for joint ventures using the equity method, see Note IV.13 (2) fordetails.
The company, a joint operator, recognises in relation to its interest in a jointoperation: (a) its assets, including its share of any assets held jointly; (b) its liabilities, including its share of any liabilities incurred jointly ;(c) its revenue from the sale of its share of the output arising from the joint operation ;(d) its share of the revenue from the sale of the output by the jointoperation; and (e) its expenses, including its share of any expenses incurred jointly.
When the Company enters into a transaction with a joint operation in which it is a joint operator, such as a sale or contribution of assets, the Company, prior to disposal of the assets to a third party, recognises gains and losses resulting from such a transaction only to the extent of the other parties' interests in the joint operation.When such transactions
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. provide evidence of a reduction in the net realizable value of the assets to be sold or contributed to the joint operation, which is in line with provision stipulated by CAS 8 - Assets Impairment, those losses shall be recognised fully by the Company.When there is evidence of a reduction in the net realizablevalue of the assets to be purchased from the jointoperation, theCompanyshall recognise itsshare ofthelosses.
7.Cashequivalent
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and investments having short holding term (normally will be due within three months from the day of purchase), with strong liquidity and easy to be exchanged into certain amountof cash that can be measured reliably and have lowrisks of change.
8.Foreignexchange
(1)Translation in foreign exchange transactions
The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying[the spot exchange rate on the date of the transaction / an exchange rate that approximates the actual spot exchange rate on the date oftransaction]. The exchange of foreign currency and transactions related to the foreign exchange are translated at thespotexchange rate.
(2)Translation of monetary foreign currency and non-monetary foreign currency
At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at the balance sheet date. All the exchange differences thus resulted are taken to profit or loss, except for①those relating to foreign currency borrowings specifically for construction and acquisition of qualifying assets, which are capitalized in accordance with the principle of capitalization of borrowing costs,②hedging accounting, the exchange difference related to hedging instruments for the purpose of net oversea operating investment is recorded in the comprehensive income till the date of disposal and recognised in profit or loss of the period; exchange difference from changes of other account balance of foreign currency monetary items,③available-for-trade is recorded intoprofit or lossexcept for amortized cost.
When prepared the consolidated financial statement involving in overseas business, if there was foreign currency monetary program virtually constituting overseas business net investment, the exchange difference caused from interests change should be recorded into other comprehensive income. When an enterprise disposes of an overseas business, itshouldbeconverted intotheprofits and losses ofthecurrent period.
Non-monetary foreign currency items measured at historical cost shall still be translated
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. at the spot exchange rate prevailing on the transaction date, and the amount denominated in the functional currency is not changed. Non-monetary foreign currency items measured at fair value are translated at the spot exchange rate prevailing at the date when the fair values are determined. The exchange difference thus resulted are recognised in profit orloss forthecurrent period oras capital reserve.
(3)The translation offinancial statement in foreign currency
When the consolidated financial statements include foreign operation(s), if there is a foreign currency monetary item constituting a net investment in a foreign operation, exchange difference arising from changes in exchange rates are recognised as “exchange differences arising on translation of financial statements denominated in foreign currencies” inowner’s equity, and in profit or loss for the period upon disposal of the foreign operation.
The Group translates the financial statements of its foreign operations into CNY by following rules. Assets and liabilities in the balance sheet are translated at the spot exchange rate prevailing at the balance sheet date; all equity items except for retained earnings are translated at the spot exchange rates at the dates on which such items occur; income and expenses in income statement are translated at the spot exchange rates at the date of transaction; the opening retained earnings is the closing retained earnings of the last period after translation; the closing balance of retained earnings is calculates and presented in the basis of each translated income statements and profit distribution item; the difference arising between the assets and liabilities andshareholders’ equity shall be booked as translation difference of foreign currency statements, and shall be presented as a separate component of equity in the balance sheet. On a loss of control overGroup’s oversea operation due to disposal, the Company transfers the accumulated or proportionate share of the accumulated exchange difference arising on translation of financial statements of this oversea operation attributable to theowners’ equity of the Company and presented undershareholders’ equity, to profit or loss in the period in which thedisposal occurs.
Foreign currency cash flows and cash flow of oversea subsidiaries are translated at the spot exchange rates on the date of cash flows.The effect of exchange rate changes on cashis separately presented as an adjustment item inthecash flow statement.
The opening and actual amount of last year are presented in the financial statement after translation.
At the disposal of all of the company's ownership interest in a foreign operation, or due
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. to the disposal of part of the equity investment or other reasons, the loss of control over a foreign operation, the project owner's equity in the balance sheet listed under the relevant overseas operations attributable to statements of the parent company's shareholders' equity of foreign currency translation differences, all transferred to the disposal of the incomestatement.
At the disposal of part of the equity investment or other causes lower hold percentage overseas business interests, but does not lose control over a foreign operation, and disposal of the foreign operation section related to foreign currency translation differences attributable to minority interests, is not transferred to the income statement. At the disposal of a foreign operation as part of the equity joint venture or joint ventures, foreign currency financial statements of the foreign operation and the associated translation difference in proportion to dispose of the foreign operation into the disposal of theincomestatement.
9.Financial instruments
When the Company becomes a party to a financial instrument, it shall recognize a financial asset or financial liability. The financial assets and financial liabilities initially recognized by the Company shall be measured at their fair values. For the financial assets and liabilities measured at their fair values and of which the variation is recorded into the profits and losses of the current period, the transaction expenses thereof shall be directly recorded into the profits and losses of the current period and for other categories of financial assets and financial liabilities, the transaction expenses thereof shall be included intotheinitially recognized amount.
(1)Determination offinancial assets andliabilities’fairvalue
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in anarm’s length transaction. For a financial instrument which has an active market, the Company uses quoted price in the active market to establish its fair value. The quoted price in the active market refers to the price that can be regularly obtained from exchange market, agencies, industry associations, pricing authorities; it represents the fair market trading price in the actual transaction. For a financial instrument which does not have an active market, the Company establishes fair value by using a valuation technique. Valuation techniques include using recentarm’s length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flowanalysis and option pricing models.
(2)Classification, recognitionand measurement offinancial assets
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. On initial recognition, theCompany’s financial assets are classified into one of the four categories, including financial assets at fair value though profit or loss, held-to maturity investments, loans and receivables and available-for-trade financial assets.Afinancial asset is recognized initially at fair value. In the case of financial assets at fair value through profit or loss, relevant transaction costs are immediately charged to the profit and loss of the current period; transaction costs relating to financial assets of othercategories are included inthe amount initiallyrecognized.
①Financial assets at fair valuethrough profit orloss:
Including financial assets held-for-trade and financial assets designated at fair value through profit orloss.
Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A.thefinancial asset is acquired for thepurposeof sellingit in ashort term;
B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively managed, and there is objective evidence indicating that the enterprise recentlymanages this portfolio forthe purposeofshort-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair value cannot be reliably measured. For such kind offinancial assets, fair values are adopted forsubsequent measurement.
Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any gains or losses arising from changes in the fair value and any dividends or interest incomeearned onthefinancial assets are recognized in theprofit orloss.
②Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that an entity has the positive intention and abilityto hold to maturity.
Such kind of financial assets are subsequently measured at amortized cost using the effective interest method. Gains or losses arising from derecognition, impairment or amortizationare recognized in profit orlossfor thecurrent period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the expected life of the financial asset or financial liability or, where appropriate,
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. ashorterperiod to thenet carrying amount of thefinancial asset orfinancial liability.
When calculating the effective interest rate, the Company shall estimate future cash flow considering all contractual terms of the financial asset or financial liability without considering future credit losses, and also consider all fees paid or received between the parties to the contract giving rise to the financial asset and financial liability that are an integral part of the effective interest rate, transaction costs, and premiums or discounts, etc.
③Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are not quoted in an active market. Financial assets classified as loans and receivables by the Company include note receivables, account receivables, interest receivabledividends receivable and other receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or loss arising from derecognition, impairment or amortization is recognized in profit orloss.
④Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on initial recognition as available for trade, and financial assets that are not classified as financial assets at fair value through profit or loss, loans and receivables or investment held-to-maturity.
The closing cost from sellable debt instruments investment was confirmed by post-amortization costs, that is initial confirmed amount deducting the paid prinpical, add or minus the accumulative amount of amortization incurred from amortizing the balance between the initially recognized amount and the amount of the maturity date by adopting the actual interest rate method, and deducting the impairment losses that have actually incurred. The closing cost from sellable debt instruments investment was its initial received cost.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from changes in the fair value are recognized as other comprehensive income and included in the capital reserve, except that impairment losses and exchange differences related to amortized cost of monetary financial assets denominated in foreign currencies are recognized in profit or loss, until the financial assets are derecognized, at which timethegains orlosses are released and recognized in profit orloss.
Interests obtained and dividends declared by the investee during the period in which the
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. financial assets available-for-trade are held, are recognizedininvestment gains.
(3)Impairment offinancial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for the financial assets that measured by the fair value. If there is objective evidence indicating a financial asset may be impaired, a provision is provided for the impairment.
An impairment test shall be made on the financial assets with significant single amounts. If any objective evidence shows that it has been impaired, the impairment-related losses shall be recognized and shall be recorded into the profits and losses of the current period. With regard to the financial assets with insignificant single amounts, an independent impairment test may be carried out, or they may be included in a combination of financial assets with similar credit risk features so as to carry out an impairment-related test. Where, upon independent test, the financial asset (including those financial assets with significant single amounts and those with insignificant amounts) has not been impaired, it shall be included in a combination of financial assets with similar risk features so as to conduct another impairment test. The financial assets which have suffered from an impairment loss in any single amount shall not be included in any combinationof financial assets with similarrisk features forany impairment test.
①Impairment onheld-to maturity investment, loans andreceivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value of future cash flow. The difference is recorded as impairment loss. If there is objective evidence to indicate the recovery of value of financial assets after impairment, and it is related with subsequent event after recognition of loss, the impairment loss recorded originally can be reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the amortized cost of the financial assets withoutprovisions ofimpairment loss onthereserving date.
②Impairment loss onavailable-for-trade financial assets
Where the fair value of the equity instrument investment drops significantly or not contemporarily according to the integrated relevant factors, an available-for-trade financial asset is impaired.
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair value that had been recognized in capital reserve shall be removed and recognized in profit or loss. The amount of the cumulative loss that is removed shall be difference between the acquisition cost with deduction of recoverable amount less
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. amortized cost, current fair value and any impairment loss on that financial asset previously recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of the financial asset is recovered, and it is objectively related to an event occurring after the impairment loss was recognized, the initial impairment loss can be reversed and the reserved impairment loss on available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on available-for-trade debt instrument is recorded inthecurrent profit orloss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot be reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument shall not be reversed.
(4)Recognition and measurement of financial assets transfer
TheGroup derecognizesa financial asset when oneofthe followingconditions is met:①therightstoreceive cash flows from theasset have expired;
② the enterprise has transferred its rights to receive cash flows from the asset to a third party under apass-through arrangement; or
③ the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred norretained substantially all the risks and rewards of the asset, but has transferred control oftheasset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the asset, the asset is recognized according to the extent it exists as financial asset, and correspondent liability is recognized. The extent of existence refers the level of risk bythefinancial asset changes theenterpriseis facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the carrying amount of the financial asset transferred; and (b) the sum of the consideration received from the transfer and any cumulative gain or loss that had been recognized in othercomprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the transferred financial asset is allocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair value of those parts. The difference between (a) the carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for the part derecognized and any
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. cumulative gain or loss allocated to the part derecognized which has been previously recognized in othercomprehensive income, is recognized in profit or loss.
If the Company endorses the financial assets sold by right of recourse and holding financial assets, it needs to confirm that whether almost all risks and remuneration in the ownership of financial assets have been transferred or not. Where an enterprise has transferred nearly all of the risks and rewards related to the ownership of the financial asset to the transferee, it shall stop recognizing the financialasset； If it retained nearly all of the risks and rewards related to the ownership of the financial asset, it shall not stop recognizing the financial asset. If the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of the financial asset, then it continuously judges that whether the Company retain the control of the assets, and conducts accounting treatment according to theprinciples described informer paragraphs.
(5)Classification and measurement offinancial liabilities
TheGroup’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value through profit or loss and other financial liabilities. For financial liabilities at fair value through profit or loss, relevant transaction costs are immediately recognized in profit or loss for the current period, and transaction costs relating to other financial liabilities are included in theinitial recognitionamounts.
① Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the initial recognition to be measured by the fair value follows the same criteria as the classification by which financial assets held-for-trade and financial assets designed at the initial recognition to be measured by the fair value and their changes are recorded inthecurrent profit orloss.
For the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair values are adopted for subsequent measurement.All the gains or losses on the change of fair value and the expenses on dividends or interests related to these financial liabilities are recognizedin profit or lossfor thecurrent period.
②Otherfinancial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price in an active market and their fair value cannot be measured reliably, is subsequently measured by cost Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Gains or losses arising from
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. derecognitionor amortizationis recognized inprofit orloss for thecurrent period.
③Financial guaranteecontract
For the financial guarantee contracts which are not designated as a financial liability measured at its fair value and the variation thereof is recorded into the profits and losses of the current period, they should be initially recognized by fair value. a subsequent measurement shall be made after they are initially recognized according to the higher one between the amount as determined according to theAccounting Standards for Enterprises No. 13– Contingencies and the surplus after accumulative amortization as determined according to the principles of the Accounting Standards for Enterprises No. 14 - Revenues issubtracted from the initially recognized amount.
(6)Derecognition offinancial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation (or part of it) is discharged or cancelled or has expired.An agreement between the Company (an existing borrower) and existing lender to replace original financial liability with a new financial liability with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new liability.
When the Company derecognizes a financial liability or a part of it, it recognizes the difference between the carrying amount of the financial liability (or part of the financial liability) derecognized the consideration paid (including any non-cash assets transferred ornewfinancial liabilities assumed) inprofit orloss.
(7)Derivatives and embedded derivatives
Derivative financial instruments include derivatives are initially measured at fair value at the date when the derivative contracts are entered into and are substantially re-measured at fair value.The resulting gain andloss isrecognized in profit orloss.
An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not designated as a financial asset or financial liability at fair value though profit or loss, and the treated as a standalone derivative if (a) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; and (b) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative. If the Company is unable to measure the embedded derivative separately either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a financial asset orfinancial liabilityat fair value through profit orloss.
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (8)Offsetting financial assets andfinancial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall bepresented separately inthe balance sheet and shallnot be offset.
(9)Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The consideration received from issuing equity instruments, net of transaction costs, are added toshareholders’equity.All types of distribution (excluding stock dividends) made by the Company to holders of equity instruments are deducted fromshareholders’ equity. The Group does not recognize any changes in thefair value ofequity instruments.
10.Receivables
Thereceivables bytheCompany includeaccount receivables, and other receivables.
(1)Criteriafor recognition ofbad debts:
The Company carries out an inspection on the balance sheet date. Where there is any objective evidence proving that the receivables have been impaired, an impairment provisionshall be made:
①Aserious financial difficultyoccurs to theissuer ordebtor;
② The debtor breaches any of the contractual stipulations, for example, fails to pay or delays thepayment of interests orthe principal, etc.;
③ The debtor will probably become bankrupt or carry out other financial reorganizations;
④Otherobjective evidences showing theimpairment of thereceivables.
(2)Method for bad debts provision
①Provisionsofbad debts in account receivables that is individually significant.
Individual receivables equal to or higher than 10Proportion receivables are classified as receivables of individualsignificance.
For an account receivable that is individually significant, the asset is individually assessed for impairment, the impairment loss is recognized at the difference between the present value of future cash flow less the carrying amount, and provision is made accordingly.
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.② Provisions of bad debts in account receivables that individually insignificant items withsimilarcredit risk characteristics thathave significant risk:
A.Evidence ofcredit risk characteristics
Whether the financial asset is individually significant or not individually significant, it is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment. Such credit risk reflects the repayment of all due amount under the contract, and is related to the estimation of future cash flow expected to bederived from theassets.
Evidenceof portfolios:
Item Basis
Ageportfolios Agecondition
Relatedpartyportfolios Relatedpartyrelationship
B. Provision bycredit risk characteristics
During the Company impairment test, the amount of bad debts provisions is determined by the assessed result from the experience of historical loss and current economic status and the existing loss in the estimated account receivables according to the set of account receivables and credit risk characteristic.
Provisionfor different portfolios:
Item Provision
Ageportfolios
Ageanalysismethod
Noallowanceforbaddebt,Unlesstherelated Relatedpartyportfolios
partyisinsolvent
a. Portfoliobyage analysis
||
|-|
|Proportionforaccountsreceivable(%)|
|0.00|
|10.00|
|30.00|
|50.00|
|100.00|

b.Adopt othermethods forrecognition ofimpairment allowances
||
|-|
|Proportionforaccountsreceivable(%)|
|0.00|

③Provisionsofbad debts that isindividually insignificant.
The reason: if there is objective evidence indicating that the accountable receivable is
individually insignificant, and the credit risk does not conform to other accounts
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.receivable’s credit risk, theimpairment test should beconducted.
The withdrawal method: the difference between the present value of future cash flow is less than the carrying amount, the impairment test should be conducted and provision is madeaccordingly.
The Company conducted the impairment test for margin and deposit. If there is no objectiveevidence indicating mpairmnet, then bad debts provision isnot made.
(3)The reversal of bad debts provision
If there is objective evidence of recovery in value of account receivables, and the recovery can be related to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and recognized in profit or loss. However, the reversal shall not result in a carrying amount that exceeds what the amortized cost would have been had the impairment loss not been recognized at the date theimpairment isreversed.
The Company transfer the accounts receivables to financial institutions by right of no recourse, the difference between the book value that the transaction amount deduct the written off accounts receivables and related taxes should be recorded into current profit orloss
11.Inventories
(1)Classification ofinventory
Inventories are classified into materials in transit, raw materials, work-in-progress, finished goods, materials and goods of consignment, consignment goods and revolving materials etc.
(2)Valuation method ofinventories
Inventories are initially carried at the planed cost, to record the difference between planned cost and actual cost through the cost variances account, and carryover the cost variances of issued inventory on schedule, to adjust the planned cost to actual cost. Cost ofissueis measured usingtheweighted average method.
(3) Basis for determining net realizable value of inventories and provision methods for decline in value of inventoriesNet realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clear evidence obtained, and takes into consideration the purpose of holding inventories and effect ofpost balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. realizable value. If the net realizable value is below the cost of inventories, a provision for decline in value of inventories is made. The provision for inventories decline in value is determined normally by the difference of the cost of individual item less its realizable value. For large quantity and low value items of inventories, Provision for decline in value is made based on categories of inventories. For items of inventories relating to a product line that are produced and marketed in the same geographical area, have the same or similar end users or purposes, and cannot be practicably evaluated separately from other items in that product line provision for decline in value is determined on an aggregatebasis.
After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to be written down below cost no longer exist so that the net realizable value of inventories is higher than their cost, the original provision for declinein value isreversed andthereversal is included in profit orloss for theperiod. (4)The perpetual inventory system is maintained for stocksystem.
(5) Amortization method for low cost and short-lived consumable items and packaging materials.
Low cost and short-lived consumable items are amortized using immediate write-off method.
12.Assets held forsaleanddisposal group
The company classifies a non-current asset or disposal group as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the following conditions shall be met: a) the asset (or disposal group) must be available for immediate sale in its present condition subject to terms that are usual and customary for sales of such assets or disposal groups; b) the company has made the resolution on the disposal plan and must be committed to a plan to sell the asset (or disposal group); c) the sale is expected to be completed within one yearfrom the date of classification. A disposal group is a group of assets to be disposed of, by sale or otherwise, together as a group in a single transaction, and liabilities directly associated with those assets that will be transferred in the transaction. The group shall include goodwill acquired in a business combination if the group is a cash-generating unit to which goodwill has been allocated in accordance with the requirements of Accounting Standard for Business Enterprises No. 8– Impairment of assets.
The company measure a non-current asset or disposal group classified as held for sale at
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. the lower of its carrying amount and fair value less costs to sell on initial recognition and subsequent remeasuremnt on the balance sheet date. An impairment loss is recognised when the carrying amount is higher than the fair value less costs to sell, and allowance for impairment is recognised accordingly. For the disposal group, the recognised impairment loss on assets is offset against the carrying amount of the goodwill in the disposal group, and then reduced in proportion of the book value of the non-current assets applicable to "Accounting Standard for Business Enterprises No. 42 - Non-current Assets Held for Sale, Disposal Group and Discontinued Operations (hereinafter referred to as "held for sale accounting principle") measurement requirements. The company shall recognise a gain during the period for any subsequent increase in fair value less costs to sell of an asset, but not in excess of the cumulative impairment loss that has been recognised after the reclassification to non-current assets held for sale. The book value of assets in the disposal group is increased proportionately according to the proportion of the book value of each non-current asset except for goodwill. Impairment loss recognised before thereclassification to non-current assets heldfor sell shallnot be recovered.
Non-current asset or non-current asset in the disposal group classified as held for sale is not subject to depreciation or amortization. The interest and other expenses on liabilities heldinthe disposalgroup forsale are continuously recognised.
Non-current assets or disposal group that no longer meet the conditions of non-current asset held for sell shall be removed from the category, and shall be measured at the lower of the following: (a) The carrying amount before classification as held for sale after adjustment of depreciation, amortization or impairment that should be recognised if it is notclassified as non-current assets held for sell; (b)recoverableamount.
13.Long-term equityinvestments
Long-term equity investments referred to in this section refer to the Company invested entity has control, joint control or significant influence over the long-term equity investments. The Company invested does not have control, joint control or significant influence over the long-term equity investments as financial assets available for sale or at fair value and the changes included financial assets through profit or loss, which refer to theaccounting policiesin Note IV.9“financial Instruments”.
Joint control is the Company control over an arrangement in accordance with the relevant stipulations are common, related activities and the arrangement must be after sharing control participants agreed to the decision-making. Significant influence is the Company s financial and operating policies of the entity has the right to participate in
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. decision-making, but can not control or with other parties joint control over those policies.
(1)Determination ofInvestment cost
The cost of a long-term equity investment acquired through business combination under common control is measured at theacquirer’s share of the combination date book value of theacquiree’s net equity in the ultimatecontroller’s consolidated financial statements. The difference between the cost and book value of cash paid, non-monetary assets transferred and liabilities assumed is adjusted to capital reserves, and to retained earnings if capital reserves is insufficient. If the consideration is transferred by way of issuing equity instruments, the face value of the equity instruments issued is recognised in share capital and the difference between the costs of the face value of the equity instruments issued is adjusted to capital reserves, and to retained earnings if capital reserves is insufficient. Where a business combination under common control is achieved by multiple acquisition of theacquiree’s shareholding, the multiple acquisitions shall be assessed to determine whether the multiple acquisitions shall be viewed as one single transaction. If the multiple acquisitions shall be viewed as one single transaction, the multiple acquisitions shall be accounted for as one single transaction accordingly. If the multiple acquisitions shall not be viewed as one single transaction, the difference between the cost of combination and the sum of the book value of the investment in the acquiree immediately before the combination and the book value of the consideration transferred to acquire additional shareholding is adjusted to capital reserves, and to retained earnings if capital reserves is insufficient. Cumulative other comprehensive income associated with the investment recognised as a result of the treatment of equity method or available-for-sale financial assets prior to the combination is not affected by thecombination.
The cost of a long-term equity investment acquired through business combination not under common control is the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued. Where a business combination not under common control is achieved by multiple acquisition of theacquiree’s shareholding, the multiple acquisitions shall be assessed to determine whether the multiple acquisitions shall be viewed as one single transaction. If the multiple acquisitions shall be viewed as one single transaction, the multiple acquisitions shall be accounted for as one single transaction accordingly. If the multiple acquisitions shall not be viewed as one single transaction, the cost of combination is measured at the sum of book value of the
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. investment in the acquiree immediately before the combination and cost of acquisition of additional shareholding. If the investment prior to the combination is measured by fair value, cumulative other comprehensive income associated with the investment prior to the combination is not affected by the combination. If the investment prior to the combination is measured as an available-for-sale financial asset, the difference between the fair value and the book value of the investment immediately before the combination and the associated cumulative other comprehensive income recognised prior to the combinationare carried toprofit orloss.
All expenses incurred directly associated with the acquisition by the acquirer, including expenditure of audit, legal services, valuation and consultancy and other administrative expenses, are recognised in profit or loss for the period during which the acquisition occurs.
Long-term equity investments acquired not through business combination are measured at cost on initial recognition. Depending on the way of acquisition, the cost of acquisition can be the total cash paid, the fair value of equity instrument issued, the contract price, the fair value or book value of the assets given away in the case of non-monetary asset exchange, or the fair value of the relevant long-term equity investments. The cost of acquisition of a long-term equity investment acquired not through business combination also includes all directly associated expenses, applicable taxes and fees, and other necessary expenses. The cost of a long-term equity investment, which enables the Company, has significant influence or joint control over the acquiree which is achieved through additional investment, is measured as the fair value determined in accordance with CAS 22 - Financial Instruments: Recognition and Measurement plus the cost of additionalinvestment.
(2)Subsequent measurement
To be invested joint control (except constitute common operator) or long-term equity investments significant influence are accounted for using the equity method. In addition, theCompany’s financial statements using the cost method of accounting for long-term equitycan exercise control over theinvestee.
①Costmethod ofaccounting forlong-term equity investments
Under the cost method, a long-term equity investment is measured at initial investment cost. Except for cash dividends or profits declared but not yet paid that are included in the price or consideration actually paid upon acquisition of the long-term equity investment, investment income is recognized in the period in accordance with the
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. attributableshare ofcash dividends orprofit distributionsdeclared bytheinvestee.
②Equitymethod ofaccounting for long-term equity investments
Where the initial investment cost of a long-term equity investment exceeds the investingenterprise’s interest in the fair values of theinvestee’s identifiable net assets at the time of acquisition, noadjustmentshall be madeto theinitialinvestment cost.
The carrying amount of a long-term equity investment measured using the equity method is adjusted by theCompany’s share of theinvestee’s net profit and other comprehensive income, which is recognized as investment income and other comprehensive income respectively. The carrying amount of a long-term equity investment measured using the equity method is reduced by profit distribution or cash dividends announced by the investee. The carrying amount of a long-term equity investment measured using the equity method is also adjusted by theinvestee’s equity movement other than net profit, other comprehensive income and profit distribution, which is adjusted to capital reserves. The net profit of the investee is adjusted by the fair value of theinvestee’s identifiable assets as at acquisition. The financial statements and hence the net profit and other comprehensive income of an investee which does not adopt accounting policies or accounting period uniform with the Company is adjusted by theCompany’s accounting policies and accounting period. TheCompany’s share of unrealized profit or loss arising from related party transactions between the Company and an associate or joint venture is deducted from investment income. Unrealized loss arising from related party transactions between the Company and an associate or joint venture which is associated with asset impairment is not adjusted. Where assets transferred to an associate or joint venture which form part of theCompany’s investment in the investee but which does not enable the Company obtain control over the investee, the cost of the additional investment acquired is measured at the fair value of assets transferred and the difference between the cost of the additional investment and the book value of the assets transferred is recognized in profit or loss. Where assets transferred to an associate or joint venture form an operation, the difference between the consideration received and the book value of the assets transferred in recognized in profit or loss. Where assets transferred from an associate or joint venture form an operation, the transaction is accounted for in accordance with CAS 20 - Business Combination, any gain or loss is recognized in profit orloss.
TheCompany’s share of aninvestee’s net loss is limited by the sum of the book value of the long-term equity investment and other net long-term investments in the investees.
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Where the Company has obligation to share additional net loss of the investee, the estimated share of loss would be recognized as accrued liabilities and investment loss. Where the Company has unrecognized share of loss of the investee when the investee generates net profit, theCompany’s unrecognized share of loss is reduced by theCompany’s share of net profit and when theCompany’s unrecognized share or loss is eliminated in full, theCompany’s share of net profit, if any, is recognized as investment income.
For long-term equity investments in associates and joint ventures which had been held by the Company before its first time adoption of Accounting Standards for Business Enterprises, where the initial investment cost of a long-term equity investment exceeds theCompany’s interest in theinvestee’s net assets at the time of acquisition, the excess is amortized and is recognized in profit or loss on a straight line basis over the original remaining life.
③Acquisition ofminority interest
The difference between newly increased equity investment due to acquisition of minority interests and portion of net asset cumulatively calculated from the acquisition date is adjusted as capital reserve. If the capital reserve is not sufficient to absorb the difference, theexcess are adjusted against returned earnings.
④Disposal oflong-term equity investment
Where the parent company disposes long-term investment in a subsidiary without a change in control, the difference in the net asset between the amount of disposed long-term investment and the amount of the consideration paid or received is adjusted to theowner’s equity. If the disposal of long-term investment in a subsidiary involves loss of control over the subsidiary, the related accounting policies in Note IV. 5. (2) applies. For disposal of long-term equity investments in any situation other than the fore-mentioned situation, the difference between the book value of the investment disposed and theconsideration received isrecognized inprofit orloss.
For the disposal of long-term equity investments in other cases, the difference between the book value of the disposed equity and its actual acquisition price is charged to the current profits and losses.
Where a long-term equity investment is measured by the equity method both before and after part disposal of the investment, cumulative other comprehensive income relevant to the investment recognised prior to the acquisition is treated in the same manner that the investee disposes the relevant assets or liabilities proportionate to the disposal. The
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.investee’s equity movement other than net profit, other comprehensive income and profit distribution isrecognised in profit orlossproportionate to thedisposal.
Where a long-term equity investment is measured at cost both before and after part disposal of the investment, cumulative other comprehensive income relevant to the investment recognised, as a result of accounting by equity method or recognition and measurement principles applicable to financial instruments, prior to theCompany’s acquisition of control over the investee is treated in the same manner that the investee disposes the relevant assets or liabilities and recognised in profit or loss proportionate to the disposal. Theinvestee’s equity movement other than net profit, other comprehensive income and profit distribution, as a result of accounting by equity method, is recognised inprofit or loss proportionateto thedisposal.
Where theCompany’s control over an investee is lost due to partial disposal of investment in the investee and the Company continues to have significant influence over the investee after the partial disposal, the investment in measured by the equity method in theCompany’s separate financial statements; where theCompany’s control over an investee is lost due to partial disposal of investment in the investee and the Company ceases to have significant influence over the investee after the partial disposal, the investment in measured in accordance with the recognition and measurement principles applicable to financial instruments in theCompany’s separate financial statements and the difference between the fair value and the book value of the remaining investment at the date of loss of control is recognized in profit or loss. Cumulativeother comprehensive income relevant to the investment recognised, as a result of accounting by equity method or recognition and measurement principles applicable to financial instruments, prior to theCompany’s acquisition of control over the investee is treated in the same manner that the investee disposes the relevant assets or liabilities on the date of loss of control. Theinvestee’s equity movement other than net profit, other comprehensive income and profit distribution, as a result of accounting by equity method, is recognised in profit or loss when control is lost. Where the remaining investment is measured by equity method, the fore-mentioned other comprehensive income and other equity movement are recognised in profit or loss proportionate to the disposal; Where the remaining investment is measured in accordance with the recognition and measurement principles applicable to financial instruments, the fore-mentioned other comprehensive income and other equity movement are recognised in profit orloss in full.
Where theCompany’s joint control or significant influence over an investee is lost due to
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. partial disposal of investment in the investee, the remaining investment in the investee is measured in accordance with the recognition and measurement principles applicable to financial instruments, the difference between the fair value and the book value of the remaining investment at the date of loss of joint control or significant influence is recognized in profit or loss.Cumulative other comprehensive income relevant to the investment recognised, as a result of accounting by equity method, prior to the partial disposal is treated in the same manner that the investee disposes the relevant assets or liabilities on the date of loss of joint control or significant influence. Theinvestee’s equity movement other than net profit, other comprehensive income and profit distribution is recognised in profit or loss when joint control or significant influence is lost.
Where theCompany’s control over an investee is lost through multiple disposals and the multiple disposals shall be viewed as one single transaction, the multiple disposals are accounted for one single transaction which results in theCompany’s loss of control over the investee. Each difference between the consideration received and the book value of the investment disposed is recognized in other comprehensive income and reclassified in full toprofit orlossat thetimewhen control over theinvestee is lost.
14.Investmentproperty
Investment property is held to earn rentals or for capital appreciation or for both. Investment property includes leased or ready to transfer after capital appreciation land use rights and leased buildings. In addition, the Company holds for future operating lease vacant buildings, if the board of directors (or similar body) to make a written resolution, made​​ it clear that their intention for rent and shall not occur in the short term change, butalso as an investment real estatepresentation.
Investment property is initially measured at cost. Subsequent expenditures related to an investment real estate are likely to flow about the economic benefits of the asset and its cost can be measured reliably, is included in the cost of investment real estate. Other subsequent expenditures should be recorded in the current profits or losses when incurred.
The Group uses the cost model for subsequent measurement of investment property, and inaccordance with thedepreciation oramortization ofbuildings or land userights policy. Investment property impairment test method and impairment accrual method described in NoteIV.20“Non-current and non-financial assets impairment”.
Occupied real estate for investment property or investment property is transferred to
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. owner-occupied real estate or stock conversion as the recorded value after the conversion, according tothe bookvaluebefore theconversion.
When an investment property is changed for personal use, since the change of date, the investment property is transferred to fixed assets or intangible assets. Owner-occupied property is changed to earn rentals or for capital appreciation, change the date, will be converted to fixed assets or intangible investment property. When the transition occurs, the conversion to the use of investment property cost model, the carrying value before conversion as the book value after conversion, convert to investment property measured at fair value model, the fair value of the conversion date as the conversion after the recorded value.
When the investment property is disposed of or permanently withdrawn from use and no future economic benefits are expected from the disposal, derecognition of the investment property. Investment property is sold, transferred, retired or damaged, the disposal incomeafter deducting the bookvalueand related taxes and profit orloss.
15.Fixed assets
(1)The conditionsof recognition
Fixed assets refers to the tangible assets that are held for the sake of producing commodities, rendering labor service, renting or business management and their useful life is in excess of one fiscal year. Fixed assets only in the economic benefits associated with it will flow to the company and the cost can be measured reliably only are confirmed. Fixed assets are stated at cost and considering the expected costs of abandoning theinitialmeasurement.
(2)The method fordepreciation
From the following month of state of intended use, depreciation method of the straight-line method is used for different categories of fixed assets to take depreciation. The recognition of the classification, useful life and estimated residual rate are as follows:
|||
|-|-|
|Estimatedresidualvalue(%)|Expectedusefullife|
|7.00-10.00|20|
|0.00|11-18|
|0.00|5-6|
|0.00|6|
|0.00||

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. beneficiallives
Expected net residual value of fixed assets is the balance of the Company currently obtained from the disposal of the asset less the estimated costs of disposal amount, assumingtheasset is out ofuseful lifeand statetheexpected service lifein theend.
(3)Measurement and recognition of fixed assets impairment
Impairment and provisions of fixed assets are disclosed on Note IV. 20 Impairment of non-current and non-financial assets.
(4)FixedAssets underfinance leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. Title may or may not eventually be transferred. Fixed assets that are held under finance leases shall be depreciated by applying the same policy as that for the fixed assets owned by the Company. If it can be reasonably determined that the ownership of the leased assets can be obtained at the end of the lease period, the leased assets are depreciated over their useful lives; otherwise, the leased assets are depreciated overtheshorter of theleaseterms and theuseful livesof theleased assets.
(5)Others
A fixed asset is recognized only when the economic benefits associated with the asset will probably flow to the Company and the cost of the asset can be measured reliably. Subsequent expenditure incurred for a fixed asset that meet the recognition criteria shall be included in the cost of the fixed asset, and the carrying amount of the component of the fixed asset that is replaced shall be derecognized. Otherwise, such expenditure shall berecognized inprofit orlossin theperiod in which they are incurred.
The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss after deduction ofcarrying valueand related tax.
The Company conducts a review of useful life, expected net realizable value and depreciation methods of the fixed asset at least on an annual base. Any change is regarded as change in accounting estimates.
16.Construction inprogress
Construction in progress is measured at its actual cost. The actual costs include various construction expenditures during the construction period, borrowing costs capitalized before it is ready for intended use and other relevant costs. Construction in progress is transferred to afixed asset when it is ready forintended use.
Testing method for provision impairment of construction in progress and accrued method forprovision impairment please refer toNote IV.20.
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 17.Borrowingcosts
Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costs incurred in connection with the arrangement of borrowings, and exchange differences arising from foreign currency borrowings. The borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized. The amounts of other borrowing costs incurred are recognised as an expense in the period in which they are incurred. Qualifying assets are asset (fixed assets, investment property and inventories, etc.) that necessarily take a substantial period of timefor acquisition, construction orproduction toget ready fortheir intended useorsale. Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used on the asset or any investment income on the temporary investment of those funds. Where funds are borrowed for a general-purpose, the amount of interest to be capitalized on such borrowings is determined by applying a weighted average interest rate to the weighted average of the excess amounts of accumulated expenditure on the asset over and above theamounts ofspecific-purpose borrowings.
During the capitalization period, exchange differences related to a specific-purpose borrowingdenominating in foreign currency are all capitalized. Exchange differences in connection with general-purpose borrowings are recognised in profit or loss in the period inwhich they are incurred.
Assets qualified for capitalization are the fixed assets, investment properties or inventories which need a long time of construction or production activities before ready forintended used orsale.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production of a qualifying asset is interrupted by activities other than those necessary to prepare the asset for its intended use or sale, when the interruption is for a continuous period of more than 3 months. Borrowing costs incurred during these periods recognised as an expense for the current period until the acquisition, construction orproduction is resumed.
18.Intangibleassets
(1)Intangibleasset
The term “intangible asset” refers to the identifiable non-monetary assets without physical shape, possessed orcontrolled byenterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. assets, if the economic benefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can be measured reliably, shall be recorded as cost of intangible assets.The expenses other than this shall be booked in the profit or loss when they occur.
Land use rights that are purchased bythe Company are accounted for as intangible assets. Buildings, such as plants that are developed and constructed by the Company, and relevant land use rights and buildings, are accounted for as intangible assets and fixed assets, respectively. Payments for the land and buildings purchased are allocated between the land use rights and the buildings; if they cannot be reasonably allocated all of the land userights and buildings are accounted foras fixed assets.
When an intangible asset with a definite useful life is available for use, its original cost less net residual value and any accumulate impairment losses is amortized over its estimated useful life using the straight-line method.An intangible asset with an indefinite useful lifeis not amortized.
For an intangible asset with a definite useful life, the Company reviews the useful life and amortization method at the end of the period, and makes adjustment when necessary. An additional review is also carried out for useful life of the intangible assets with indefinite useful life. If there is evidence showing the foreseeable limit period of economic benefits generated to the enterprise by the intangible assets, then estimate its useful life and amortize according to the policy of intangible assets with definite useful life.
(2)Research anddevelopment cost
Cost of research and development is distinguished into the research phase and the development phases.
Cost of the research phase is recognized in the profit or loss in the period in which it is incurred.
Unless the following conditions are satisfied, cost of the development phase is recognized in theprofit or lossintheperiod inwhich itis incurred:
It is technically feasible to completetheintangible asset so as touse itor sell it;
It is clearly invented to complete theintangible asset in order to useit orsell it;
 it is probable that the intangible asset is capable of generating future economic benefit, such as the market for the product produced by the intangible asset or the intangible asset itself, it is objectively evidential that the intangible asset is economically usable if it is goingto beused internally;
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. There are sufficient technical, financial and other resources to complete the intangible asset and touseit orsell it;
The cost ofthe development of theintangible can be measured reliably.
If the cost cannot be distinguished into the search phase and the development phase, it is recognized in theprofit or lossfor theperiod inwhich itis incurred.
(3)Impairment ofintangible assets
Impairment and provisionsof intangibleassets are disclosed onNoteIV.20.
19.Long-term deferredexpenditure
An item long-term deferred expenses is an expense which has been incurred and which has a beneficial period (a period during which an expense is expected to bring economic benefits to an entity) which is longer than one year and which includes at least part of the reporting period during which the expense was incurred and subsequent reporting periods. An item of long-term deferred expenses is recognized at the actual amount of the expense incurred and allocated in each month of the beneficial period using the straight line method.
20.Impairmentoflong-term assets
Non-financial assets with non-current nature include fixed assets, construction in progress, intangible assets with definite useful lives, investment properties measured by cost methods and long-term equity investment on subsidiaries, jointly operations. The Company assesses whether there are any indicators of impairment for all non-financial assets at the balance sheet date, and impairment test is carried out and recoverable value is estimated if such an indicator exits. Goodwill and intangible assets with indefinite useful lives, as well as intangible assets not ready for use, are tested for impairment annually regardless of indicators ofimpairment.
Impairment of loss is calculated and provisions taken by the difference if the recoverable value of the assets is lower than the book value. The recoverable value is the higher of estimated present value of the future expected cash flows from the asset and net fair value of the asset less disposed cost. The fair value of asset is determined by the sales agreement price within anarm’s length transaction. In case there is no sales agreement, but there is active market of assets, the fair value can be determined by the selling price. If there is neither sales agreement nor active market, the fair value of the asset can be estimated based on the best information obtained. Disposal expenses include expenses related to the legislation, taxes, transportations and the direct expense for the asset to be ready for sale. When calculating the present value of expected future cash flows from an
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. asset or asset Group, the management shall estimate the expected future cash flows from the asset or asset Group and choose a suitable discount rate in order to calculate the present value of those cash flows. Provision for asset impairment is calculated and determined on the individual basis. If the recoverable of individual asset is hard to estimate, the recoverable amount can be determined by the asset Group where subject asset belongs. Asset Group is the smallest set of assets that can have cash flow in independently.
The Company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the present value of the future expected cash flows from the asset Groups or sets of asset Groups to which the goodwill is allocated. Estimating the present value requires the Company to make an estimate of the expected future cash flows from the asset Groups or sets of asset Groups and also choose a suitable discount rate in order to calculate the present value of those cash flows. Once the loss from above asset impairment is recognized, the recoverable part cannot be reserved in the subsequent periods.
After the asset impairment loss is determined, recoverable value amounts would not be returned in future
21.Employee Benefits
The employee benefits of the company include short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits: Short-term employee benefits includes wages, bonuses, allowances and subsidies, welfare, health insurance , maternity insurance, work injury insurance, housing funds, labor union funds, employee education funds, non-monetary benefits and etc. The company provides services accounting period in which an employee of the company will be short-term employee benefits are recognized as liabilities actually incurred and loss account or the costs associated with the asset. The non -monetary benefits are measured at fair value.
Post-employment benefits mainly include basic old-age insurance, unemployment insuranceand annuities. Post-employment benefits includedefined contribution plans and defined benefit plans. Relevant contribution amount in the defined contribution plan shall be recognised as cost of related assets or profit or loss during the year. The defined benefit plan in the company is old-age insurance. Projected unit credit cost method (“PUC”) was used by independent actuaries engaged by the Company to determine the present value of the defined benefit obligations with unbiased and consistent actuarial
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. assumptions regarding population variables and financial variables. Defined benefit obligation was presented with the present value and the related current service cost was accounted into current profit orloss.
When the Company terminates the labor relationship with employees prior to the employment contracts, or encourages employees to accept voluntary redundancy compensation proposals in this company, a provision shall be recognised for the compensation arising from the termination of employment relationship with employees at the time when the Company can not unilaterally withdraw layoff proposal termination benefits provided due to termination of employment, or the company ensures the costs related to the payment for termination benefits related to the restructuring, which one is early to confirm employee benefits liabilities, and recorded as profit or loss. However, if termination benefits can not be fully paid after twelve months of the reporting date,the liability shallbe processed in accordance with otherlong-term employee benefits.
Retirement plan adopts the same principles as the termination benefits. The salaries and insurance to be paid from the date when employees stop providing services to the date of normal retirementshall be recognised in profit or loss (termination benefits) when satisfying therequirements ofaprovision.
Other long-term employee benefits provided by the company to employees that are in line with defined contribution plans shall adopt the accounting treatment in accordance with defined contribution plans, otherwise the accounting treatment of defined benefit plans.
22.Accrued liabilities
Recognition ofaccrued liabilities:
Obligation with contingency factor such as external hypothecate, lawsuit or arbitrage in dispute, guarantee on quality of product, cut-down plan, loss of contract, recombine obligation, obligation on abandon fixed asset, and meet the follow condition simultaneously would determined as liabilities:
(1) Thisobligation is current obligation ofthe Company; and,
(2) The performance of this obligation will probably cause economic benefits outflow of theCompany; and,
(3) Theamount ofthis obligation can bereliably measured.
On balance sheet date the Company performs relate obligation that consider risk, incertitude, time value of currency of contingency factor. According to the best estimate of the expenditure required to settle the present obligation for estimated liabilities
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. measured.
If the expenditure required to settle the liability is expected to be fully or partly compensated by a third party, to determine the amount of compensation will be received at the basic, separately recognized as an asset, and is recognized in the amount of compensation does not exceed thecarrying value ofestimated liabilities.
23.Revenue
(1)Revenue from sales ofgoods
Revenue from sales of goods is recognised when significant risks and rewards attached to the ownership of the goods sold are passed to the buyer, when neither continual involvement in the rights normally associated with the ownership of the goods sold nor effective control over the goods controls are retained, when revenue arising from the goods sold is reliably measurable, when inflow of future economic benefits is probable, and when cost incurred or to be incurred associated with the goods sold is reliably measurable.
For the export sales of the products of the Company, no matter what the sales pattern adopt, recognition of revenue according to the sales contract or conventions listed in the orders, for those product sales employ the FOB settlement, revenue recognition upon from theshipment ofgoods and conducted theexport declaration.
Accounting treatment for sales return: in accordance with the international trade prevailing rules, the FOB settlement employed, indicate to the buyer has inspected and accepted those purchased commodities at the shipment dock, after acceptance and shipping the relevant risks has been transferred to buyer, therefore the Company has no individually recognized for the events, but the amount shall be recognized when incurred and accounted through in profit and loss in current period. Accounting treatment for product claims: calculate the claim indemnity rate, according to the proportion of actually payment for those product claims during recently two years account for the corresponding period sales revenue, at the end of period, on the basis of current period sales revenue and theclaim indemnity ratetorecognizetheclaim indemnity expense. (2)Revenue from rendering ofservice
Revenue arising from rendering of services is recognised on the balance date using the percentage of completion method when the outcome of the services rendered can be reliably estimated. The percentage of completion of the services rendered is calculated by dividingthecost to date bythebudgeted total cost.
The outcome of the services rendered can be reliably estimated when revenue from the
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. services render can be reliably measured, when the inflow of associated future economic benefits is probable, when the percentage of completion can be reliably measure, and when the cost incurred or to be incurred associated with the services can be reliably measured.
When the outcome of the services rendered cannot be reliably estimate, revenue is recognised as cost reimbursement received or to be received, if any, and cost incurred is recognised in profit or loss for the period in which the cost is incurred. No revenue is recognised ifcost reimbursement isnot probable.
When a contract between the group and another entity involves both sales of goods and rendering for services, the sales of goods and rendering of services are accounted for separately if they are distinguishable and separately measurable; the contract is accounted for as if it is a contract involves only sales of goods if the sales of goods and rendering of services are eitherindistinguishable ordistinguishable butnot separately measurable.
(3)Revenue from construction contracts
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs associated with the construction contract should be recognised as revenue and expenses according to the percentage of completion.at the balance sheet date.
The outcome of a construction contract can be estimated reliably when all the following conditions are satisfied:①total contract revenue can be measured reliably;②it is probable that the economic benefits associated with the contract will flow to the enterprise;③the contract costs attributable to the contract can be clearly identified and measured reliably so that actual contract costs incurred can be compared with prior estimates; and,④both the contract costs to complete the contract and the stage of contractcompletion at thebalance sheet date can bemeasured reliably.
When the outcome of a construction contract cannot be estimated reliably, but revenue should be recognised only to the extent of contract costs incurred that it is probable will be recoverable; and If the cost cannot be recovered, contract costs should be recognised as an expense in the period in which they are incurred and the contract revenue cannot be recognised. When the uncertainty that makes the outcome of the construction unable to be estimated reliably disappears, the revenue and cost are recognised according to the percentage ofcompletion.
An expected loss on the construction contract should be recognised as an expense during the year when the total contract cost is expected to be higher than the total contract
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. revenue.
The incurred cost and accumulated gross profit (loss) and the settled price of the construction contract are disclosed as a net amount in the balance sheet. The excess amount of the incurred cost and accumulated gross profit (loss) over the settled price of the construction contract is disclosed as inventory, while the excess amount of the settled price over the incurred cost and accumulated gross profit (loss) of the construction contractis disclosed as advancefrom customers.
(4)Royalty Revenue
Accordingto thecontract oragreement, therevenue is recognized onan accrual basis. (5)Interest Income
The amount of interest revenue should be measured and confirmed in accordance with the length of time for which the enterprise's cash is used by others and the actual interest rate.
24.Government Grants
Government grants are transfer of monetary assets and non-monetary assets from the government to the Company at no consideration, excluding the capital invested by the government as equity owner. Government grant can be classified as grant related to the assets and grants related to the income. The government grants which were acquired by the Company will be used to purchase or otherwise form become long-term assets will be defined asgrant related to the assets; the others will be defined asgrants related to the income. If the fileshave not clearly defined government grants objects, it will be divided in the following manner compartmentalize the grantsrelated to the assetsandgrants related to the income: (1) government documents defined specific projects targets, according to the relative proportion of the budgets of specific items included the expenditure of to form assets and the expenditure will be charged into expense to be divided, the division ratio required at each balance sheet date for review and make changes if necessary; (2) government documents to make a general presentation purposes only, does not specify a particular project, as grants related to theincome.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or receivable. If a government grant is in the form of a non-monetary asset, it is measured at fair value. If the fair value cannot be reliably determined, it is measured at a nominal amount. A government grant measured at a nominal amount is recognised immediately inprofit orlossfor theperiod.
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. When received the government grantsactually, recognised and measured them by the actual amount received. However, there is strong evidence that the end of fiscal support policies able to meet the conditions specified in the relevant funds are expected to be able to receive financial support, measured at the amount receivable. Government grants are measured according to the amount receivable shall also comply with the following conditions: (1)grantsreceivable of government departments issued a document entitled have been confirmed, or could reasonably are estimated in accordance with the relevant provisions of its own official release of financial resources management approach, and the expected amount of a material uncertainty which does not exist; (2) it is based on the local financial sector to be officially released and financial support for the project and its financial fund management approach voluntarily disclosed in accordance with the provisions of “Regulations on Disclosure Government Information”, and the management approach should be (inclusive of any compliance business conditions may apply), and not specifically formulated for specific businesses;(3) related grants approval has been clearly committed the deadline, and is financed by the proceeds of a corresponding budget as a guarantee, so that will be received within the prescribed period with the a reasonable assurance; (4) according to the specific circumstances of the Company and thesubsidy matter,should satisfy theotherconditions (if any).
A government grant related to an asset is recognised as deferred income, and evenly amortized to profit or loss over the useful life of the related assetin a reasonable and systematic manner. For a government grant related to income, if the grant is a compensation for related expenses or losses to be incurred in subsequent period, the grant is recognised as deferred income, and recognised in profit or loss over the periods in which the related costs are recognised. If the grant is a compensation for related expenses or losses already incurred, the grant is recognised immediately in profit or loss for the period.
Government subsidies including both assets-related parts and income-related parts should be treated separately. If it is difficult to seperate, the government subsidiesas a whole will beclassified as income-related government grants.
The government grants related to the daily activities of the Company are included in other income or offset the related costs according to the essence ofthe economic business. The government grants unrelated to the daily activities are included in the non-operating incomeand expenses.
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. When government subsidy needs to be returned, if the related deferred income balance exists, the book value of related deferred income shall be offset and the excess part shall be included in the current profit or loss; if it is other cases, it shall be directly carried to thecurrent profits and losses.
The compensation amount received from the government by the Company for relocation due to the public interest in overall urban planning, reservoir construction, shantytowns reconstruction and settlement of subsidence areas, is recognised as designated payables. Among them, the compensation for the loss of fixed assets and intangible assets, related expenses, stoppage losses and new assets rebuilding after relocation occurred during relocation and reconstruction of the Company, shall be transferred from designated payables to deferred income, and treated as government grants related to assets or the government grants related to income according to the nature. The excess of relocation compensation amount over the amount transferred to deferred income is recognised as capital reserve.
25.Deferredtax assets anddeferredtax liabilities
(1)Income tax for thecurrent period
At the balance sheet date, current income tax liabilities or assets for the current and prior periods, are measured at the amount expected to be paid (or recovered) according to the requirements of tax laws. The calculation for income tax expenses in the current period is based on the taxable income according to the related tax laws after adjustment to the accounting profit ofthereporting period.
(2)Deferred income tax assets and liabilities
The difference between the book value of some assets and liabilities and their tax basis, and the temporary difference which is not recognized as assets and liabilities but can be recognized by the difference between the book value of tax basis items and their tax basis according to taxation regulation, will be recognized as deferred income tax assets and deferred incometax liabilities byadopting liabilities method ofbalance sheet.
Related to the initial recognition of goodwill, taxable temporary difference related to the initial recognition of assets and liabilities produced from the transaction that is not business merger also will not influence accounting profit and taxable income(or deductible loss) when incurred, will not be recognized as the related deferred income tax liabilities. In addition, the taxable temporary difference related to subsidiaries, associated company, and joint venture will also be not recognized as the related deferred income tax liabilities if the Company can control the time of temporary difference reverse and the
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. temporary difference may not be reversed in the foreseeable future. Except the aboved exceptional examples, the Company recognizes deferred income tax liabilities from all othertaxabletemporary difference.
Deductible temporary difference related to the initial recognition of assets and liabilities produced from the transaction that is not business merger also will not influence accounting profit and taxable income(or deductible loss) when incurred, will not be recognized as the related deferred income tax assets. In addition, the deductible temporary difference related to subsidiaries, associated company, and joint venture will also be not recognized as the related deferred income tax assets if the temporary difference may not be reversed in the foreseeable future or taxable income of deductible temporary difference used for deduction may not be gained in the future. Except the aboved exceptional examples, the Company recognizes deferred income tax assets from other deductible temporary difference with the limit that the Company probably gain taxableincome used for deducting deductible temporary difference.
The deductible loss tax deduction that can be carried forward to subsequent years, will be recognized as deferred income tax assets with the limit that the Company probably gain future taxableincomeused fordeducting deductibleloss taxdeduction.
Deferred income tax assets and deferred income tax liabilities will be measured on the balance sheet date by applicable tax rate during the period of receiving related assets and payingrelated liabilities according to taxationregulation.
The Company rechecks the carrying amount of deferred tax asset at the balance sheet date. Ifit’s probable that sufficient taxable profit will not be available against which the deductible temporary difference can be utilized, the Company shall write down the carrying amount of deferred tax asset, or reverse the amount written down later whenit’s probablethat sufficient taxableprofit will beavailable
(3)Income tax expenses
Incometax expenses consistof current incometax and deferred incometax.
The expenses from income tax and deferred income tax, as well as the revenue, shall be recorded into profit or loss in current accounting period, except expense for income tax of thecurrent period and deferred income tax that booked into other income or equity and adjusted carrying value of deferred income tax goodwill arose from business combination.
(4)Income tax offset
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. When we have the legal right, and have intended to, to make settlement with net amount, or through the asset acquisition and liability fulfillment simultaneously, the Company shall present the net value from the offset between current income tax asset and current incometax liabilityin thefinancial statement.
When the Company has the legal right to make a settlement with the current income tax asset and current income tax liability, and the deferred income tax asset and deferred income tax liability are related to the same taxable subject under the same tax payer, or related to different taxable subject, but the intension of net value settlement in regard of the current income tax asset and current income tax liability, the Company shall present net valueafter the offsetof deferred incometaxasset and deferred income tax liability. 26.Leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. Title may or may not eventually be transferred.An operating lease isa lease otherthan a finance lease.
(1)The Company as Lessee under operating Lease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term, and either included in the cost of the related asset or charged to profit or loss for the current period. The contingent rents shall be recorded in the profit or lossof theperiod in which they actually arise.
(2)The Company as Leasorunder operating Lease
Lease income from operating leases shall be recognized by the leasorin profit or loss on a straight-line basis over the lease term. Initial direct cost of significance in amount shall be capitalized when incurred. If another basis is more systematic and rational, that basis may be used. Contingent rents are credited to profit or loss in the period in which they actually arise.
(3)Financial lease to which theCompany is theleasee
At the commencement of a financial lease to which the Company is the Leasee, the lower of the lease-commencement-date fair value of the leased asset and the present value of the minimum lease payment is recognised as the cost of the leased asset; the minimum lease payment is recognised as a long-term payable; and the excess of the long-term payable over the amount recognised as the cost of the leased asset is recognised as unrecognised lease expenditure. Expenses incurred during the negotiation and signing of the lease contract for activities directly attributable to the lease are recognised as part of the cost of the leased asset. The residual amount after deducting the unrecognised lease
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. expenditure from the long-term payable is divided into non-current liability and non-current liability due within one year depending on maturity and presented on (consolidated)financial statements separately.
The unrecognised lease expenditure is amortised over the lease term using the effective interest rate method and the amortisation is recognised as lease expense in profit or loss for the relevant period. Contingency lease rental is recognised in profit or loss when it is incurred.
(4)Financial lease to which theCompany is theleasor
At the commencement of a financial lease to which theCompany is the leasor, the sum of the minimum lease rental receivable and the initial expenses incurred for activities directly attributable to the lease is recognised as the initial amount of the respective financial lease rental receivable; unguaranteed residual value is recorded, if any; the excess of the present value of the sum of the minimum lease rental receivable, the initial expenses incurred for activities directly attributable to the lease and the unguaranteed residual value over the sum itself is recognised as unrecognised lease income. The residual amount after deducting the unrecognised lease income from the financial lease rental receivable is divided into non-current receivable and non-current receivable due within one year depending on maturity and presented on (consolidated) financial statements separately.
The unrecognised lease income is amortised over the lease term using the effective interest rate method and the amortisation is recognised as lease income in profit or loss for the relevant period. Contingency lease rental income is recognised in profit or loss when it is received orbecomes receivable.
27.Significantchanges inaccounting policiesandaccounting estimates
(1)Changes in accounting policies
Nochanges inaccounting policies need to bedisclosed for thecurrent period.
(2)Changes in accounting estimates
Nochanges inaccounting estimates need to be disclosed forthecurrent period.
28.Significantaccountjudgmentandestimates
The Company is required to make judgments, estimates and assumptions about the carrying amounts of items in the financial statements that cannot be measured accurately, due to the internal uncertainties of operation activities. These judgments, estimates and assumptions are based on historical experiences of theCompany’s management as well as other factors that are considered to be relevant. These judgments, estimates and
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. assumptions may affect value of the financial statements in revenue, expenses, assets and liabilities and the disclosure of contingency at the balance sheet date. However, the result derived from those uncertainties in estimates may lead significant adjustments to the carrying amountsof theassets or liabilities affected in thefuture.
The Company has reviews the judgments, estimates and assumptions regularly on the basis of going concern. Where the changes in accounting estimates only affect the period when changes occurred, and they are recognised within the same period. Where the changes in accounting estimates affect both current period and future period, the changes arerecognised withinthe period ofchange and future period.
At balance sheet date, the followings are the significant areas where the Company needs to make judgment, estimates and assumptions over the value of items in the financial statements:
(1)Classification oflease
The Company classifies leases as operating lease and financing lease according to the rule stipulated in theAccounting Standard for Business Enterprises No. 21--Leasing. The management shall make analysis and judgment on whether the risks and rewards related to the title of leased assets has been transferred to the leaser, or whether the Company has substantiallyheldtherisks and rewards related to theownership ofleased assets.
(2)Allowance for bad debts
According to the relevant accounting policies of the Company in receivables, allowance method is used for baddebt’s calculation. The impairment of receivables is calculated based on the assessment of recoverable of receivables. Assurance of receivable impairment needs judgments and estimations from the management. The difference between actual results and original estimates shall have impact on the carrying amount of receivables and receivable bad debt provisions or the reverse during the change of estimation.
(3)Impairment ofinventories
The Company measures inventories by the lower of cost and realizable net value according to the accounting policies in regard of inventories and provisions for decline in value of inventories is made if the cost is higher than their net realizable value, and obsolete and slow-movement inventories. Inventories decline in value to net realizable value is the estimated selling price in the ordinary course of business. Net realizable value is determined on the basis of clear evidence obtained, and takes into consideration the purposes of holding inventories and effect of post balance sheet events. The
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. difference between the actual result and the original estimates shall have impact on reverse of the carrying amount of the inventories and their decline in value or provisions during theperiod ofchange.
(4)The fair valueof financial instruments
For a financial instrument which has no active market, the Company establishes fair value by using various valuation methods, including of discounted cash flow analysis model. The Company needs to estimate future cash flow, credit risk, volatility and relationship during the valuation and choose appropriate discount rate. Such assumptions have uncertainties and their changes shall have impact on the fair value of financial instruments.
(5)Impairment ofavailable-for-sale assets
Whether the impairment of available-for-sale financial assets to a large extent depends on the judgment and assumptions of the management, in order to determine whether it is necessary to recognise its impairment losses in the income statement. In the course of judging and making assumptions, the Company shall assess the extent and duration of the fair value of the investment and the financial position and short-term business outlook of the investee, including the industry status, technological change, credit rating, The default rate and the risk ofopponents.
(6)Impairment ofnon-financial, non-current assets
The Company assesses whether there are any indicators of impairment for all non-current assets other than financial assets at the balance sheet date. For an intangible asset that has indefinite useful life, impairment test is made in addition to the annual impairment test if there is any indication of impairment. For non-current assets other than financial assets, impairment test is made when there is any indication that its account balance cannot be recovered.
Impairment exists when the recoverable amount of an asset is the higher of its fair value less cost of disposal and present value of the future cash flows expected to be derived from theasset.
Net value between the difference of fair value and disposal cost is determined by reference of the price of similar product in a sale agreement in anarm’s length transaction or an observable market price less the additional cost directly attributable to thedisposalof theasset.
When estimating the present value of future cash flow, significant judgments are made over theasset’s production, selling price and relevant operating expenses, and discount
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. rate used to calculate present value. All available materials that are considered to be relevant shall be used in the estimation of recoverable value. These materials include estimations of production, selling price and operating expenses based on reasonable and supportableassumptions.
The Company makes an impairment test for goodwill at least at each year end. This requires an estimation of present value of future cash flow of the assets or assets group where goodwill has been allocated. The Company shall makes estimation on the future cash flow derived from assets or assets group and determine an appropriate discount rate for the present value of future cash flow when the estimation of present value of future cashflow ismade.
(7)Depreciation andamortization
Investment property, fixed assets and intangible assets are depreciated and amortized using the straight-line method over their useful lives after taking into account residual value. The useful lives are regularly reviewed to determine the depreciation and amortization costs charged in each reporting period. The useful lives are determined based on historical experience of similar assets and the estimated technical changes. If there is an indication that there has been a change in the factor used to determine the depreciation oramortization,the rateof depreciation oramortization isrevised.
(8)Deferred tax assets
The group shall recognise all unused tax losses as deferred tax assets to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. This requires the management of the Company make a lot of judgments over the estimation of time period, value and tax planning strategies when future taxable profit incurs so that the value of deferred tax assets can be determined.
(9)Income tax
There are some transactions where ultimate tax treatments and calculations have uncertainties in theCompany’s everyday operation. Whether there are possible for some items to make expenditure before tax needs approval from competent tax authorities. If there is any difference between finalized determination value and their initial estimations value, the difference shall have the impact on theincome tax and deferred income tax of thecurrent period during the final determination.
(10)Accrued liabilities
According with the terms of the contract, the existing knowledge and historical
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. experience, product quality assurance and expected contract losses, delay in delivery of liquidated damages are estimated and recognised as accrued liabilities. In these matters has been the formation of a current obligation, and fulfilling the duty is likely to lead to the outflow of economic benefits of the Company, the Company or the best estimate of the current obligation expenditure required recognised as a accrued liabilities. Recognition and measurement of accrued liabilities is dependent on the judgment of management. In the processing of judgment the company needed to appraise the related risks, uncertainties and timevalue ofmoney and other factors.
The Company will sell, repair and renovation of goods sold to provide customers with quality after-sales service commitment is accrued liabilities. Accrued liabilities have considered the recent experience in the maintenance data, but recent maintenance experience may not reflect future maintenance. Any increase or decrease in the accrued liabilities may affect theprofit orloss in future.
(11)Fair valuemeasurement
Some of the Company's assets and liabilities are measured at fair value in the financial statements. In estimating the fair value of an asset or liability, the Company adopts available observable market data. If first level of input valuecannot be obtained, the company will hire third-party qualified appraisers to perform the valuation. See Note 9 for disclosure of the valuation techniques and input values used in determining the fair valueofvarious types ofassets and liabilities.
V.Taxation
1.Taxes andsurcharges applicabletotheCompany
||
|-|
|Taxbase|
|Accordingtotherevenuesfromsalestocalculatetheoutputtax,andusethebalanceafterdeductthedeductibleinputtaxtopaytheVAT|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|Taxableprofits|

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 2.Taxes andsurcharges applicabletotheprimary subsidiaries
(1)TsannKuen (Zhangzhou)Enterprise Co.,Ltd. (hereafter,TKL)
||
|-|
|Taxbase|
|Accordingtotherevenuesfromsalestocalculatetheoutputtax,andusethebalanceafterdeductthedeductibleinputtaxtopaytheVAT|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|Taxableprofits|

Products, raw materials export sales applied the policy of exemption, reduction and refund ofVAT,the rateis0%.
(2)Tsann Kuen China(Shanghai) Enterprise Co., Ltd. (hereafter,TKS)
||
|-|
|Taxbase|
|Accordingtotherevenuesfromsalestocalculatetheoutputtax,andusethebalanceafterdeductthedeductibleinputtaxtopaytheVAT|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|Taxableprofits|

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (3)Tsannkuen EdgeIntelligence Co.,Ltd. (hereafter,TKEI)
||
|-|
|Taxbase|
|Accordingtotherevenuesfromsalestocalculatetheoutputtax,andusethebalanceafterdeductthedeductibleinputtaxtopaytheVAT|
|Taxableprofits|

(4)Pt.Star ComgisticIndonesia
||
|-|
|Taxbase|
|Accordingtotherevenuesfromsalestocalculatetheoutputtax,andusethebalanceafterdeductthedeductibleinputtaxtopaytheVAT|
|Taxableprofits|

3.Taxconcessions and governmentapprovals
In accordance with the “The Notice Regarding to Fujian Province 2017 Second Group of High Technology Enterprise Review” (Mingkegao No.[2018]1), TKL was identified as Fujian Province High Technology Enterprise (The certification No. GR201735000565), thevalidityis from theyear 2017to2019.Thecurrent incometaxis15%.
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. VI. Notes on majoritems inconsolidated financialstatements of theCompany
For the following items noted (including notes on major items in financial statements of the Company), unless otherwise indicated, the “period-begin” refers to 1 January 2018, the “period-end” refers to 30 June 2018, the “Reporting Period” refers to the period from January of 2018 to June of 2018,andthe“sameperiodoflastyear”referstotheperiodfromJanuaryof2017toJuneof2017. 1.Monetaryfunds
Item 2018.06.30 2017.12.31 Cashonhand
675,029.35 800,792.90 Bankdeposits
437,360,067.46 563,581,167.98 Othermonetaryfunds 0.00 0.00 Total 438,035,096.81 564,381,960.88 2. Financial assets measured by fair value with changes in fair value recognised in profitorloss
(1)Category
Item 2018.06.30 2017.12.31 Tradingfinancialassets
0.00 3,925,850.00 Ofwhich:Derivativefinancialassets
0.00 3,925,850.00 Total
0.00 3,925,850.00 (2)Explanation
Thederivativefinancialassetisforwardforeignexchangecontractsignedwithfinancialinstitutions. 3.Accountsreceivable
(1)Disclosurebyclassification
2018.06.30
Item Bookbalance Baddebtprovision
Bookvalue Proportion Withdrawal
Amount Amount
(%) proportion(%)
Accountsreceivableof
individualsignificance
subjecttoindividually 0.00 0.00 0.00 0.00 0.00 assessmentfor
impairment
Accountsreceivable
portfoliosubjectto
218,435,925.10 100.00 10,033,714.07 4.59 208,402,211.03 impairmentbycredit
risk:
Including:Portfolioby
215,386,054.74 98.60 10,033,714.07 4.66 205,352,340.67 age
Portfoliobyrelated
3,049,870.36 1.40 0.00 0.00 3,049,870.36 parties
Accountsreceivableof
individually
insignificancesubject
0.00 0.00 0.00 0.00 0.00 toindividually
assessmentfor
impairment
Total 218,435,925.10 100.00 10,033,714.07 4.59 208,402,211.03
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (Continued)
2017.12.31
Bookbalance Baddebtprovision
Item
Proportion Withdrawal Bookvalue Amount Amount
(%) proportion(%)
Accountsreceivableof
individualsignificance
subjecttoindividually
assessmentforimpairment
Accountsreceivableportfolio
subjecttoimpairmentby 282,211,379.57 100.00 12,158,958.68 4.31 270,052,420.89 creditrisk:
Including:Portfoliobyage 280,945,797.16 99.55 12,158,958.68 4.33 268,786,838.48 Portfoliobyrelatedparties 1,265,582.41 0.45 1,265,582.41 Accountsreceivableof
individuallyinsignificance
0.00 0.00 0.00 0.00 0.00 subjecttoindividually
assessmentforimpairment
Total 282,211,379.57 100.00 12,158,958.68 4.31 270,052,420.89①In the groups, accounts receivable adopting aging analysis method for measurement of allowance forbaddebt:
2018.06.30
Aging
Amount Baddebtprovision Proportion(%) Within1year
206,959,704.22 1,607,363.55 0.78 Including:1-90days
194,669,752.71 0.00 0.00 91-180days
10,607,619.82 1,060,761.99 10.00 181-270days
1,472,821.39 441,846.41 30.00 271-365days
209,510.30 104,755.15 50.00 1-2years
76,801.40 76,801.40 100.00 2-3years
8,264,466.79 8,264,466.79 100.00 Over3years 85,082.33 85,082.33 100.00 Total 215,386,054.74 10,033,714.07 4.66②In the groups, accounts receivable using related party group method for measurement of allowance forbaddebt
2018.06.30
Item
Accountreceivable Baddebtprovision Withdrawalproportion(%) Relatedpartygroup
3,049,870.36 0.00 0.00 Total
3,049,870.36 0.00 0.00 (2)Recognisation,recoveryandreversalofallowanceforbaddebt
Theamountofallowance ofbaddebtsrecognized duringtheReportingPeriodisRMB0.00,theamountofrecovered allowancefor baddebtsduringtheReportingPeriodisRMB2,038,870.18,amongwhich,theamountofallowanceof baddebtsaffectedbyexchangerateisRMB10,417.80.
(3)AccountsreceivablewrittenoffduringtheReportingPeriod
Item Amount Accountsreceivablewrittenoff 75,956.63
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (4)Detailsoftopfiveaccountsreceivableinclosingbalance
The total amount of top five accounts receivables in accounts receivable summarized by debtors as at the end of the Reporting Period is RMB105,247,912.27, accounting for48.18% of the total accounts receivable as at the end of the Reporting Period, the total corresponding allowance for baddebtsisRMB228,946.52.
4.Advancestosuppliers
(1)Disclosurebyage
2018.06.30 2017.12.31
Item
Amount Proportion(%) Amount Proportion(%) Within1year 12,594,334.71 99.30 10,747,472.71 98.24 1to2years 88,966.32 0.70 192,305.08 1.76 Total 12,683,301.03 100.00 10,939,777.79 100.00 (2)Detailsoftopfiveadvancetosuppliersinclosingbalance
The totalamount oftop five advance to suppliers in closingbalanceas atthe endof Reporting PeriodisRMB11,336,927.79,accountingfor89.39%ofthetotalclosingbalanceofadvancetosuppliers. 5.Interestreceivable
Item 2018.06.30 2017.12.31 Fixeddepositreceipt
1,695,898.95 0.00 Total
1,695,898.95 0.00 6.Otherreceivable
(1)Disclosurebyclassification
2018.06.30
Bookbalance Baddebtprovision
Item
Withdrawal Bookvalue Proporti
Amount Amount proportion
on(%)
(%)
Otheraccountsreceivableof
individualsignificancesubject
0.00 0.00 0.00 0.00 0.00 toindividuallyassessmentfor
impairment
Otheraccountsreceivable
portfoliosubjecttoimpairment 26,625,955.10 92.25 1,812,325.16 6.81 24,813,629.94 bycreditrisk:
Including:Portfoliobyage 26,423,328.53 91.55 1,812,325.16 6.86 24,611,003.37 Portfoliobyrelatedparties 202,626.57 0.70 0.00 0.00 202,626.57 Otheraccountsreceivableof
individuallyinsignificance
2,238,320.30 7.75 0.00 0.00 2,238,320.30 subjecttoindividually
assessmentforimpairment
Total 28,864,275.40 100.00 1,812,325.16 6.28 27,051,950.24
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (Continued)
2017.12.31
Item Bookbalance Baddebtprovision
Withdrawal
Bookvalue Proportion
Amount Amount proportion
(%)
(%)
Otheraccountsreceivableof
individualsignificancesubjectto
individuallyassessmentfor
impairment
Otheraccountsreceivable
portfoliosubjecttoimpairmentby 34,239,603.90 92.55 1,677,945.42 4.90 32,561,658.48 creditrisk:
Including:Portfoliobyage 33,999,567.58 91.90 1,677,945.42 4.94 32,321,622.16 Portfoliobyrelatedparties 240,036.32 0.65 240,036.32 Otheraccountsreceivableof
individuallyinsignificancesubject
2,757,066.12 7.45 0.00 0.00 2,757,066.12 toindividuallyassessmentfor
impairment
Total 36,996,670.02 100.00 1,677,945.42 4.54 35,318,724.60① Other receivable of individually insignificance subject to individually assessment for impairment attheperiod-end
Withdrawal
Baddebt
Items Bookbalance proportion Withdrawalreason provision
(%)
ChinaExport&CreditInsurance
648,450.00
Guaranteeddeposits,absence Corporation,FujianBranch ofimpairment
LonghaiPeople'sCourt
625,513.00
Guaranteeddeposits,absence ofimpairment
ZhangzhouIntermediatePeople’sCourt 565,000.00
Guaranteeddeposits,absence ofimpairment
GuangzhouIntellectualPropertyCourt 200,000.00
Guaranteeddeposits,absence ofimpairment
Alipay(China)NetworkTechnologyCo.,
50,000.00
Guaranteeddeposits,absence Ltd. ofimpairment
AlipayofFlagshipStoreofXiamen
50,000.00
Guaranteeddeposits,absence Tsannkuen ofimpairment
NiuhaiE-commerce(Shanghai)Co.,
30,000.00
Guaranteeddeposits,absence Ltd. ofimpairment
JiangsuSuningE-CommerceCo.,Ltd. 30,000.00
Guaranteeddeposits,absence ofimpairment
ShunheTradingCo.,Ltd. 19,095.24
Guaranteeddeposits,absence ofimpairment
GomeOnlineE-CommerceCo.,Ltd. 10,000.00
Guaranteeddeposits,absence ofimpairment
Others 10,262.06
Guaranteeddeposits,absence ofimpairment
Total 2,238,320.30 0.00 0.00
②In the groups, other accounts receivable adopting aging analysis method for measurement of allowanceforbaddebt:
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 2018.06.30
Aging
Otheraccountsreceivable Baddebtprovision Proportion(%) Within1year
24,745,301.12 134,297.75 0.54 Including:1-90days
24,098,949.38 0.00 0.00 91-180days
383,634.54 38,363.45 10.00 181-270days
177,121.52 53,136.46 30.00 271-365days
85,595.68 42,797.84 50.00 1-2years
1,673,027.41 1,673,027.41 100.00 2to3years 5,000.00 5,000.00 100.00 Over3years
0.00 0.00 0.00 Total
26,423,328.53 1,812,325.16 6.86 (2)Recognisation,recoveryandreversalofallowanceforbaddebt
The amount of allowance for bad debts recognised during the Reporting Period is RMB147,581.74; theamountofrecoveredallowanceforbaddebtsduringtheReportingPeriodisofRMB13,202.
(3)Therewasnoactualwrite-offotheraccountsreceivable
(4)Detailsoftopfiveotherreceivables
Closing%of balanceof Items NatureofOR Closing balance Aging
total baddebt provision StateAdministrationofTaxationof
Exporttax
ZhangzhouLongchiDevelopment 14,119,516.57 0-90days 48.92 0.00 refunds
Zone,Fujian
ZhangzhouXinchengMetal
Rental&water&
1,269,443.28 0-90days 4.40 0.00 ProductsCo.,Ltd. electricityfees
ShanghaiTanghaiInvestmentCo.,
Rental&water&
1,238,148.47 Over1years 4.29 1,238,148.47 Ltd. electricityfees
LonghaiPeople’sCourt Attachment 891,043.00 0-over1years 3.09 0.00 StateGridFujianLonghaiPower
Electricityfees 717,327.44 0-90days 2.48 0.00 SupplyCo.,Ltd.
Total 18,235,478.76 63.18 1,238,148.47 7.Inventory
(1)Disclosurebyclassification
|||||
|-|-|-|-|
|Item|2018.06.30|||
||Bookbalance|Impairmentallowance|Bookvalue|
|Rawmaterials|119,382,752.55|27,848,923.82|91,533,828.73|
|Goodsinprocess|22,739,841.76|0.00|22,739,841.76|
|Entrustedprocessingmaterials|6,034,840.27|0.00|6,034,840.27|
|Self-manufacturedsemi-finishedgoods|17,431,323.36|1,133,845.14|16,297,478.22|
|Finishedgoods|87,474,433.53|8,290,670.42|79,183,763.11|
|Consignedfinishedgoods|8,612,349.72|0.00|8,612,349.72|
|Low-valueconsumables|1,579,308.20|0.00|1,579,308.20|

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
|||||
|-|-|-|-|
|Item|2018.06.30|||
||Bookbalance|Impairmentallowance|Bookvalue|
|Materialsintransit|2,875,633.20|0.00|2,875,633.20|
|Total|266,130,482.59|37,273,439.38|228,857,043.21|

 (Continued)
|||||
|-|-|-|-|
|Item|2017.12.31|||
||Bookbalance|Impairmentallowance|Bookvalue|
|Rawmaterials|91,556,442.22|29,307,728.29|62,248,713.93|
|Goodsinprocess|14,542,696.83|0.00|14,542,696.83|
|Entrustedprocessingmaterials|2,596,673.00|0.00|2,596,673.00|
|Self-manufacturedsemi-finishedgoods|16,901,263.40|1,246,838.74|15,654,424.66|
|Finishedgoods|86,380,339.44|5,608,126.31|80,772,213.13|
|Consignedfinishedgoods|14,253,812.21|0.00|14,253,812.21|
|Low-valueconsumables|1,872,537.93|0.00|1,872,537.93|
|Materialsintransit|3,770,433.60|0.00|3,770,433.60|
|Total|231,874,198.63|36,162,693.34|195,711,505.29|

 (2)Impairmentallowanceforinventories
Increasedamount Decrease
Item 2017.12.31
Affectedby Reverseor Affectedby
2018.06.30 Withdrawal
exchangerate write-off exchangerate
Rawmaterials 29,307,728.29 2,662,955.21 0.00 4,135,149.16 -13,389.48 27,848,923.82 Self-manufactured
1,246,838.74 269,239.24 0.00 382,232.84 0.00 1,133,845.14 semi-finishedgoods
Finishedgoods 5,608,126.31 3,795,629.41 0.00 1,113,085.30 0.00 8,290,670.42 Total 36,162,693.34 6,727,823.86 0.00 5,630,467.30 -13,389.48 37,273,439.38 (3)The basis of recognizing impairment allowance and the reason of recovering or writing off theimpairmentallowanceforinventories
Thereasonofrecovering
Thebasisofrecognitionofimpairment Thereasonsforinventory Item impairmentallowance
allowanceforinventories impairmentwrite-off forinventories
Market prices decrease, and resulting in
Rawmaterials rawmaterial’snetrealizablevaluelower Saleordisposal thancost
Self-manufactured Market prices decrease, and resulting in
semi-finished Self-manufactured semi-finished goods' Saleordisposal goods netrealizablevaluelowerthancost
Market prices decrease, and resulting in
Finishedgoods finished goods' net realizable value Saleordisposal
lowerthancost
8.Othercurrentassets
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Item 2018.06.30 2017.12.31 Inputtaxtobededucted
7,710,035.73 11,205,884.70
|||
|-|-|
|370,000,000.00|400,000,000.00|
|0.00|1,913,786.44|
|377,710,035.73|413,119,671.14|

 9.Available-for-salefinancialassets
(1)Thesituationofavailable-for-salefinancialassets
2018.06.30 2017.12.31
Item
Depreciation Book Depreciation Book Bookbalance Bookbalance
reserves value reserves value Availableforsaleequityinstruments
40,000.00 40,000.00 40,000.00 40,000.00 Including:measuredbycost
40,000.00 40,000.00 40,000.00 40,000.00 Total
40,000.00 40,000.00 40,000.00 40,000.00 (2)Available-for-salefinancialassetsmeasuredatcostattheperiod-end
Shareho Bookbalance Depreciationreserves lding Cash proporti bonus on ofthe Investee
among Report Decre Increa Decr
2018.01.01 Increase 2018.06.30 2018.01.01 2018.06.30 the ing ase se ease
investee Periods(%)
Xiamen
Associationof
40,000.00 40,000.00 1.48 Enterpriseswith
ForeignInvestment
Total 40,000.00 40,000.00 1.48 10.Investmentproperty
(1)Investmentpropertyadoptedthecostmeasurementmode
Housesand Constructionin
Item Landuseright Total buildings progress
I.Originalbookvalue
1.Openingbalance
97,887,590.91 29,260,577.51 0.00 127,148,168.42
||
|-|
|2.Increasedamountoftheperiod|
|(1)Outsourcing|
|(2) Transferred from inventories/fixedassets/constructioninprogress|
|(3)Proceedsfrombusinesscombinations|
|3.Decreasedamountoftheperiod|
|(1)Disposal|
|(2) Investment property transferred into fixedassets|
|4.Closingbalance|
|II. Accumulated Depreciation and accumulatedamortization|
|1.Openingbalance|
|2.Increasedamountoftheperiod|
|(1)Withdrawaloramortization|
|(2)Transferredfromfixedassets|
|3.Decreasedamountoftheperiod|

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Housesand Constructionin
Item Landuseright Total buildings progress
||
|-|
|(1)Disposal|
|(2) Investment property transferred into fixedassets|
|4.Closingbalance|
|III.Depreciationreserves|
|1.Openingbalance|
|2.Increasedamountoftheperiod|
|(1)Withdrawal|
|3.Decreasedamountoftheperiod|
|(1)Disposal|
|(2)Othertransferredout|
|4.Closingbalance|
|IV.Bookvalue|
|1.Closingbookvalue|
|2.Openingbookvalue|

 (2)Investmentpropertywithpendingownershipregistration
Item Bookvalue Reasonforpending Lvyuanthreecountryvilla 1,416,505.44
Notes: Lvyuan three country villa is a limited property house purchased by theCompany’s subsidiary TKS in 1999 fromShanghaiLvshengRealEstateDevelopmentCo.,Ltd.withoutexpropriatingandtransferringtheland.InJanuary of 2006, the property was certified to belong to TKS through the joint statement made by Shanghai Lvsheng Real EstateDevelopmentCo.,Ltd.andresidentscommitteeofLvyuancommunityofHuangduTowninJiadingDistrict. 11.Fixedassets
(1)Listoffixedassets
Electronic Improvement
Transportati
Housesand Machinery device, expenseof
Item on Total buildings equipment modulesand leasedfixed
equipment
others assets
I.Originalbook
value
1.Opening
91,979,314.65 138,265,237.18 975,642,609.48 18,088,145.19 66,001,091.14 1,289,976,397.64 balance
2. Increased
amount of the 320,672.68 4,392,661.66 15,559,456.69 1,037,022.22 76,046.94 21,385,860.19 period
(1)Purchase 0.00 4,035,733.48 15,296,836.49 1,106,611.64 0.00 20,439,181.61 (2)Transferred
from project
0.00 0.00 0.00 0.00 0.00 0.00 under
construction
(3)Transfer
from
0.00 0.00 0.00 0.00 0.00 0.00 investment
property
(4) Impact of
changes in 320,672.68 356,928.18 262,620.20 -69,589.42 76,046.94 946,678.58
exchangerates
(5)Other 0.00 0.00 0.00 0.00 0.00 0.00
3.Decreased 8,795.46 2,839,599.92 26,117,107.24 19,578.19 0.00 28,985,080.81
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Electronic Improvement
Transportati
Housesand Machinery device, expenseof
Item on Total buildings equipment modulesand leasedfixed
equipment
others assets
amount of the
period
(1) Disposal or
8,795.46 2,839,599.92 26,117,107.24 19,578.19 0.00 28,985,080.81 Scrap
(2)Transferred
from
0.00 0.00 0.00 0.00 0.00 0.00 investment
property
4. Closing
92,291,191.87 139,818,298.92 965,084,958.93 19,105,589.22 66,077,138.08 1,282,377,177.02 balance
II.Accumulative
depreciation
1.Opening
47,947,486.73 83,327,368.17 870,728,389.83 14,043,317.72 62,308,483.21 1,078,355,045.66 balance
2. Increased
amount of the 1,971,886.60 3,059,078.07 14,027,826.29 452,551.70 992,122.93 20,503,465.59 period
(1)Withdrawal 1,874,561.11 2,906,832.64 13,865,647.85 463,574.39 920,365.98 20,030,981.97 (2) Transferred
from
0.00 0.00 0.00 0.00 0.00 0.00 investment
property
(3) Impact of
changes in 97,325.49 152,245.43 162,178.44 -11,022.69 71,756.95 472,483.62 exchangerates
3.Decreased
amount of the 0.00 2,442,542.82 23,103,743.17 19,578.19 0.00 25,565,864.18 period
(1) Disposal or
0.00 2,442,542.82 23,103,743.17 19,578.19 0.00 25,565,864.18 Scrap
(2) Transfer
from
0.00 0.00 0.00 0.00 0.00 0.00 investment
property
4. Closing
49,919,373.33 83,943,903.42 861,652,472.95 14,476,291.23 63,300,606.14 1,073,292,647.07 balance
III.Depreciation
reserves
1.Opening
0.00 18,704,200.64 19,523,524.20 4,933.21 27,381.88 38,260,039.93 balance
2. Increased
amount of the 0.00 19,343.14 3,197.55 62.17 0.00 22,602.86 period
(1)Withdrawal 0.00 0.00 0.00 0.00 0.00 0.00 (2) Impact of
changes in 0.00 19,343.14 3,197.55 62.17 0.00 22,602.86 exchangerates
3.Decreased
amount of the 0.00 100,132.68 2,684,264.95 0.00 0.00 2,784,397.63 period
(1) Disposal or
0.00 100,132.68 2,684,264.95 0.00 0.00 2,784,397.63 Scrap
4. Closing
0.00 18,623,411.10 16,842,456.80 4,995.38 27,381.88 35,498,245.16 balance
IV.Bookvalue
1.Closing book
42,371,818.54 37,250,984.40 86,590,029.18 4,624,302.61 2,749,150.06 173,586,284.79 value
2. Opening
44,031,827.92 36,233,668.37 85,390,695.45 4,039,894.26 3,665,226.05 173,361,312.05 bookvalue
(2)Fixedassetswithpendingownershipregistration
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Item Bookvalue Reasonforpending Lvyuanthreecountryvilla 424,951.63
Jingyinggarden 165,626.24 Underprocessing Notes: Lvyuan three country villa is a limited property house purchased by theCompany’s subsidiary TKS in 1999 fromShanghaiLvshengRealEstateDevelopmentCo.,Ltd.withoutexpropriatingandtransferringtheland.InJanuary of 2006, the property was certified to belong to TKS through the joint statement made by Shanghai Lvsheng Real EstateDevelopmentCo.,Ltd.andresidentscommitteeofLvyuancommunityofHuangduTowninJiadingDistrict. (3)Temporarilyidlefixedassets
Accumulated depreciat Depreciation reser
Item Book value Book value ion ves
Machineryequipment 44,375,783.65 27,391,883.37 16,865,668.87 118,231.41 Electronicdevicemodulesand
224,774,496.29 214,412,244.05 10,324,755.88 37,496.36 others
Transportationequipment 208,800.00 208,800.00 0.00 0.00 Improvementexpenseofleased
999,659.75 972,277.87 27,381.88 0.00 fixedassets
Total 270,358,739.69 242,985,205.29 27,217,806.63 155,727.77 12.Constructioninprogress
||
|-|
|Item|
|Sporadicproject|
|Others|
|Total|

 13.Intangibleassets
Item Landuseright Software Total I.Originalbookvalue
1.Openingbalance
17,799,360.55 33,444,519.91 51,243,880.46 2.Increasedamountoftheperiod
0.00 1,313,815.02 1,313,815.02 (1)Purchase
0.00 1,313,815.02 1,313,815.02 (2)Impactofchangesinexchangerates
0.00 0.00 0.00 3.Decreasedamountoftheperiod
295,108.59 0.00 295,108.59 (1)Disposal
0.00 0.00 0.00 (2)Impactofchangesinexchangerates
295,108.59 0.00 295,108.59 4.Closingbalance
17,504,251.96 34,758,334.93 52,262,586.89 II.Accumulatedamortization
1.Openingbalance
2,969,634.07 18,772,857.38 21,742,491.45 2.Increasedamountoftheperiod
336,691.09 2,090,932.90 2,427,623.99 (1)Withdrawal
279,655.12 2,090,932.90 2,370,588.02 (2)Impactofchangesinexchangerates
57,035.97 0.00 57,035.97
3.Decreasedamountoftheperiod
31,811.95 0.00 31,811.95
(1)Disposal
0.00 0.00 0.00
(2)Impactofchangesinexchangerates
31,811.95 0.00 31,811.95
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Item Landuseright Software Total 4.Closingbalance
3,274,513.21 20,863,790.28 24,138,303.49 III.Depreciationreserves
1.Openingbalance
0.00 2.Increasedamountoftheperiod
0.00 0.00 0.00 (1)Withdrawal
0.00 0.00 0.00 (2)Impactofchangesinexchangerates
0.00 0.00 0.00 3.Decreasedamountoftheperiod
0.00 0.00 0.00 (1)Disposal
0.00 0.00 0.00 (2)Impactofchangesinexchangerates
0.00 0.00 0.00 4.Closingbalance
0.00 0.00 0.00 IV.Bookvalue
1.Closingbookvalue
14,229,738.75 13,894,544.65 28,124,283.40 2.Openingbookvalue
14,829,726.48 14,671,662.53 29,501,389.01 14.Long-termdeferredcharge
Item 2017.12.31
Increasedamount
Amortization
Decrease
2018.06.30 amount
Telecommunications
18,932.97 0.00 14,533.16 0.00 4,399.81 engineering
Housesandbuildings
4,077,187.92 4,715,601.69 1,014,785.71 0.00 7,778,003.90 renovationexpenses
PhaseIIIWallProject 292,127.53 0.00 35,014.94 0.00 257,112.59 Software 0.00 58,867.92 1,635.22 0.00 57,232.70 Total 4,388,248.42 4,774,469.61 1,065,969.03 0.00 8,096,749.00 15.Deferredincometaxassets/deferredincometaxliabilities
(1)Deferredincometaxassetshadnotbeenoff-set
2018.06.30 2017.12.31
Deductible Deductible
Item Deferredincome Deferredincome temporary temporary
taxassets taxassets difference difference
Assetsimpairmentprovision 72,098,480.87 11,182,632.91 75,021,501.16 11,604,071.98 Accruedexpenses 9,108,087.10 1,577,556.47 10,687,842.77 1,859,681.61 Transactionfinancialliabilities 6,008,550.00 901,282.50
Payrollliability 236,457.93 40,197.85 Unrealizedprofitsfromintergroup
763,463.84 190,865.96 812,548.04 203,137.01 transactions
Undistributeddeficit 35,896,354.04 8,974,088.51 35,896,354.02 8,974,088.51 Other 241,923.53 41,127.00 7,683.59 1,306.21 Total 124,116,859.38 22,867,553.35 122,662,387.51 22,682,483.17 (2)Deferredincometaxliabilitieshadnotbeenoff-set
2018.06.30 2017.12.31
Item Deductible Deductible
Deferredincome Deferredincometax temporary temporary
taxliabilities liabilities difference difference
Trading financial
3,925,850.00 588,877.50 assets
Depreciation of
3,821,490.52 955,372.63 3,311,438.01 827,859.50 fixedassets
Other
86,081.59 14,633.87 86,871.08 14,768.08 Total
3,907,572.11 970,006.50 7,324,159.09 1,431,505.08 (3)Listofunrecognizeddeferredincometaxassets
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Item 2018.06.30 2017.12.31 Assetsimpairmentprovision 12,307,606.32 13,238,136.21 Accruedexpenses 31,515,237.37 20,520,490.27 Payrollliability 1,658,362.49 1,842,179.97 Undistributeddeficit 122,029,314.49 96,571,791.11 Total 167,510,520.67 132,172,597.56 Notes: For the uncertainty of sufficient taxable income obtained in the future, the above was not recognizedasdeductibletemporarydifferenceanddeductiblelossofdeferredincometaxassets.
(4) The deductible losses of unrecognized deferred tax assets shall be matured in the following years
||||
|-|-|-|
|Year|2018.06.30|2017.12.31|
|Year2018|5,695,586.47|15,995,805.21|
|Year2019|526,972.07|12,504,247.51|
|Year2020|3,140,105.62|14,123,000.61|
|Year2021|42,927,755.28|21,145,780.79|
|Year2022|12,844,701.98|8,186,639.77|
|Year2023-2029|56,894,193.07|24,616,317.22|
|Total|122,029,314.49|96,571,791.11|

 Notes: The period for covering the annual loss generated by Tsannkuen Edge Intelligence Co., Ltd. (hereafter,TKEI)canbeextendedfornomorethantenyears.
16.Othernon-currentassets
Item 2018.06.30 2017.12.31 Prepaidmoldfee
1,596,234.94 877,801.58 Prepaymentforequipment
20,932,441.93 20,338,977.00 Total
22,528,676.87 21,216,778.58 17.Short-termborrowings
Item 2018.06.30 2017.12.31 Borrowingsonsecurity 17,909,899.30 0.00 Borrowingsoncredit 0.00 10,832,951.89 Total 17,909,899.30 10,832,951.89 18. Financial liabilities measured by fair value with changes in fair value recognised inprofitorloss
Item 2018.06.30 2017.12.31 Tradingfinancialliabilities 6,008,550.00 0.00 Including:derivativefinancialliabilities 6,008,550.00 0.00
Total 6,008,550.00 0.00
19.Notespayable
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Item 2018.06.30 2017.12.31 Bankacceptancebill
8,588,180.81 12,222,252.77 Tradeacceptance
11,354,266.32 7,801,896.38 Total
19,942,447.13 20,024,149.15 Therewasnoamountoftheduebutnotpaynotespayableattheperiod-end.
20.Accountspayable
(1)Listofaccountspayable
Item 2018.06.30 2017.12.31 Within1year
430,495,104.76 580,224,062.25 Over1years
1,994,519.16 3,316,167.11 Total
432,489,623.92 583,540,229.36 (2)Therewerenosignificantaccountspayableremainingunsettledformorethanoneyear
21.Advancefromcustomers
Item 2018.06.30 2017.12.31 Within1year 7,792,828.50 6,124,044.24 Over1years 4,149,109.08 5,537,930.64 Total 11,941,937.58 11,661,974.88 22.Employeebenefitspayable
(1)Listofemployeebenefitspayable
||
|-|
|Item|
|I.Short-termsalary|
|II.Post-employmentbenefit-definedcontributionplans|
|III.Terminationbenefits|
|IV.Otherbenefitsatmaturitywithoneyear|
|Total|

 (2)ListofShort-termemployeebenefits
||
|-|
|Item|
|1.Salary,bonus,allowance,subsidy|
|2.Employeewelfare|
|3.Socialinsurance|
|Including: Medicalinsurance|
|Employmentinjuryinsurance|
|Maternityinsurance|
|4.Housingfund|
|5.Laborunionbudgetandemployeeeducationbudget|
|6.Short-termabsencewithpayment|
|7.Short-termprofitsharingplan|
|Total|

(3)Listofdefinedcontributionplan
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
||
|-|
|Item|
|1.Basicpensionbenefits|
|2.Unemploymentinsurance|
|3.Enterpriseannuitypayment|
|Total|

 The Company participates in the endowment insuranceandunemployment insurance planestablished by the government, according to these plans, the Company pays planedfees to the company location. In addition to the monthly fee deposit, the Company no longer bears further payment obligations. Correspondingexpensesareexpensedasincurredorcostsrelatedassets.
23.Taxespayable
Categoryoftaxes 2018.06.30 2017.12.31 Realestatetax 741,854.33 833,651.47 Corporateincometax
175,869.56
VAT
890,243.91
Personalincometax
650,033.34 516,590.25 EducationSurcharge
658,546.93 692,945.25 Urbanmaintenanceandconstructiontax
643,322.80 677,699.31 Others 914,898.29 103,835.37 Total 4,674,769.16 2,824,721.65 24.Interestpayable
Item 2018.06.30 2017.12.31 Interestsonshort-termborrowings
9,957.32 1,448.76 Total
9,957.32 1,448.76 25.Otheraccountspayable
(1)Otheraccountspayablelistedbynatureoftheaccount
Item 2018.06.30 2017.12.31 Within1year
51,852,645.18 42,618,980.95 Over1years
11,744,355.40 8,519,777.56 Total
63,597,000.58 51,138,758.51 (2)Othersignificantaccountspayablewithagingoveroneyear
Item 2018.06.30 Unpaid/Un-carry-overreason Repaidattheterminationof Cashpledge 10,463,608.00
contract Total 10,463,608.00
26.Long-termpayrollpayable
(1)Listoflong-term payroll payable
Item 2018.06.30 2017.12.31 I.Post-employmentbenefit-netliabilityofdefinedbenefit 178,526.85 156,540.09
Total 178,526.85 156,540.09
27.SpecificPayables
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Item 2017.12.31
Increase Decrease
2018.06.30 PhaseIremovalcompensationmoneyofShanghaiTKS 109,137,778.28 0.00 0.00 109,137,778.28 Total 109,137,778.28 0.00 0.00 109,137,778.28 28.Sharecapital
Increase/decrease
Item 2017.12.31 Issuing Capitalization 2018.06.30 Share
new ofpublic Other Subtotal
donation
shares reserves
Totalshares
185,391,680.00 185,391,680.00 29.Capitalreserves
Item 2017.12.31
Increase Decrease
2018.06.30 Sharepremium
210,045,659.80 210,045,659.80 Othercapitalreserves
86,763,305.99 86,763,305.99 Total
296,808,965.79 0.00 0.00 296,808,965.79
2018InterimReportofTsannKuen(China)EnterpriseCo.,Ltd 30.Othercomprehensiveincome
ReportingPeriod
Less:recordedin
other
Item 2017.12.31 Amount comprehensive 2018.06.30 Attributableto
beforeincome incomeinprior Less:Income Attributabletominority
ownersofthe
taxincurrent periodand taxexpense shareholdersaftertax
Companyaftertax
period transferredto
profitorlossin
current period
I.Othercomprehensiveincomethatwillnot
53,821.50 53,821.50 bereclassifiedintoprofit/loss
Including:changesinnetliabilitiesorassets
withadefinedbenefitplanupon 53,821.50 53,821.50 remeasurement
Shareofothercomprehensiveincomeof
investeesthatcannotbereclassifiedinto
profit/lossundertheequitymethod
II.Othercomprehensiveincometobe
4,565,999.37 -52,419.01 -39,314.26 -13,104.75 4,526,685.11 subsequentlyreclassifiedintoprofit/loss
Including:sharesofothercomprehensive
incomeofinvesteesthatwillbereclassified
intoprofit/lossundertheequitymethod
Balancefromthetranslationofforeign
4,565,999.37 -52,419.01 -39,314.26 -13,104.75 4,526,685.11 currencyfinancialstatements
Total 4,619,820.87 -52,419.01 -39,314.26 -13,104.75 4,580,506.61 125
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 31.Surplusreserves
Item 2017.12.31
Increase Decrease
2018.06.30 Statutorysurplusreserves
33,888,636.90 0.00 0.00 33,888,636.90 Total
33,888,636.90 0.00 0.00 33,888,636.90 32.Retainedearnings
Item 2018.06.30 2017.12.31 Openingbalanceofretainedprofitsbeforeadjustments
90,105,224.21 90,217,504.90Totalopeningbalanceofretainedprofitsbeforeadjustments(Increase+，decrease-)
Openingbalanceofretainedprofitsafteradjustments
90,105,224.21 90,217,504.90 Add:NetprofitattributabletoownersoftheCompany
-28,341,686.77 26,077,139.64 Less:Withdrawalofstatutorysurplusreserves
0.00 3,942,418.73 Withdrawalofdiscretionarysurplusreserves
0.00 0.00 Withdrawalofgenericriskreserve
0.00 0.00 Dividendofcommonstockpayable
14,831,334.40 22,247,001.60 Dividendofcommonstocktransferintosharecapital
0.00 0.00 Closingretainedprofits
46,932,203.04 90,105,224.21 33.Revenueandcostofsales
(1)Revenue andcost ofsales
Item ReportingPeriod Sameperiodoflastyear Revenuefrommainoperations
658,944,365.34 840,312,489.24 Revenuefromotheroperations
32,566,139.89 29,371,269.44 Total
691,510,505.23 869,683,758.68 Costsofmainoperations
613,781,412.65 723,287,830.92 Costofotheroperations
11,667,604.74 16,219,638.01 Total
625,449,017.39 739,507,468.93 (2)Main operations (by industry)
ReportingPeriod Sameperiodoflastyear Item
Revenue Cost of sales Revenue Cost of sales Manufacturehomeelectronicappliance 658,944,365.34 613,781,412.65 840,312,489.24 723,287,830.92 Total 658,944,365.34 613,781,412.65 840,312,489.24 723,287,830.92 (3)Main operations (by product)
ReportingPeriod Sameperiodoflastyear Item
Revenue Cost of sales Revenue Cost of sales Cooking 400,273,785.96 371,762,439.06 540,344,218.91 447,620,553.66 Householdhelper 164,940,858.72 159,587,268.54 224,015,274.54 210,893,707.03 Tea/coffee 84,387,695.78 79,103,482.40 73,801,696.03 63,193,074.09 Others 9,342,024.88 3,328,222.65 2,151,299.76 1,580,496.14 Total 658,944,365.34 613,781,412.65 840,312,489.24 723,287,830.92 (4)Main operations (by area)
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. ReportingPeriod Sameperiodoflastyear Area
Revenue Cost of sales Revenue Cost of sales America 246,999,976.03 233,192,853.00 302,346,479.45 258,816,457.63 Europe 200,874,235.23 191,285,145.74 290,524,069.58 256,421,924.47 Asia 161,948,690.59 145,155,496.92 180,411,171.53 154,430,965.58 Australia 38,371,062.48 34,606,394.52 57,656,779.71 46,215,616.95 Africa 10,750,401.01 9,541,522.47 9,373,988.97 7,402,866.29 Total 658,944,365.34 613,781,412.65 840,312,489.24 723,287,830.92 (5)Revenues fromthe top5customers
Period Revenues from the top 5 customers Proportion to the totalrevenues(%) ReportingPeriod 316,048,452.50 45.70 Sameperiodoflastyear 423,578,219.72 48.70 34.Businesstaxandsurcharges
Item
ReportingPeriod Sameperiodoflastyear EducationSurcharge
1,947,014.86 1,642,018.73 Urbanmaintenanceandconstructiontax
1,969,352.57 1,657,297.65 Realestatetax
1,011,074.55 1,475,222.72 Landusetax
388,653.42 348,464.92 Stampduty
375,368.80 572,220.24 Other
70.74 139.35 Total
5,691,534.94 5,695,363.61 Notes: The detailed payment standards for various business tax and surcharges were presented in NoteV. Taxation.
35.Salesexpenses
Item
ReportingPeriod Sameperiodoflastyear Exportfees
12,445,365.51 15,649,265.39 Employeeremunerations
8,730,635.97 9,644,113.99 Claimsforsalespromotionalexpenses
-843,486.81 -3,212,402.85 Salescommissionandaftersalesservicefees
938,142.65 1,189,343.37 Assetsleaseexpenses
193,079.70 192,646.13 Businesstravelcharges
1,126,786.43 1,059,897.57 Advertisingexpensesforpromotion 3,899,934.81 4,205,076.42 Officeexpenses
162,720.93 329,126.35 Transportfees
419,913.34 658,337.56 Others
508,412.29 413,622.66 Total
27,581,504.82 30,129,026.59 36.Administrationexpenses
Item
ReportingPeriod Sameperiodoflastyear
||
|-|
|R&Dexpenses|
|Employeeremuneration|
|Depreciationandamortization|
|Rentalcharges|
|Insuranceexpenses|

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Item
ReportingPeriod Sameperiodoflastyear
||
|-|
|Officeexpenses|
|Travelexpenses|
|Consultantfees|
|Maintenanceexpenses|

 Others
4,414,931.58 3,178,472.37 Total
74,639,753.64 74,782,758.93 37.Financialcosts
Item
ReportingPeriod Sameperiodoflastyear Interestexpenses
287,648.29 410,091.63 Less:interestincome
4,483,457.96 3,529,133.78 Exchangegainsandlosses
2,505,899.01 11,511,175.66 Bankcharges
458,468.88 792,248.01 Total
-1,231,441.78 9,184,381.52 38.Impairmentlossonassets
Item
ReportingPeriod Sameperiodoflastyear Baddebtloss
-1,904,490.44 -1,540,543.50 Impairmentlossoninventories
6,727,823.86 1,604,983.07 Impairmentlossonfixedassets 0.00 0.00 Total 4,823,333.42 64,439.57 39.Gainsfromchangesinfairvalue
Reporting Sameperiodoflast Sourceoffairvaluechange
Period year Financialassetsmeasuredbyfairvalueandthechangesbeincludedinthecurrent
0.00 1,881,750.00 profitsandlosses
Ofwhich,gainsonthechangesinthefairvalueofderivativefinancialinstruments
0.00 1,881,750.00 Financialliabilitiesmeasuredbyfairvalueandthechangesincludedinthecurrent
-9,934,400.00 0.00 gainsandlosses
Ofwhich,gainsonthechangesinthefairvalueofderivativefinancialinstruments -9,934,400.00 0.00
|||
|-|-|
|-9,934,400.00|1,881,750.00|

 40.Investmentincome
Item ReportingPeriod Sameperiodoflastyear Long-termequityinvestmentincomeaccountedbyequitymethod
0.00 0.00 Investment income arising from disposal of long-term equity
0.00 0.00 investments
Investmentincomereceivedfrom financialassetsmeasuredbyfair
value and the changes be included in the current profits and losses
0.00 0.00 duringholdingperiod
Investment income received from disposal of financial assets
measured by fair value and the changes be included in the current
9,608,500.00 576,100.00 profitsandlossesduringholdingperiod
Investmentincomefromfinancialproducts
268,400.98 1,148,630.14 Others
0.00 0.00
Total
9,876,900.98 1,724,730.14
41.Gains fromdisposalof assets
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Amount included in the current non-recurring gains Reporting Sameperiodof
Item
Period lastyear and losses Gainsfromdisposalof
376,183.60 318,516.72 376,183.60 fixedassets
Total 376,183.60 318,516.72 376,183.60 42.Otherincome
Amount included in the current non-recurri Reporting Sameperiodoflast
Item
Period year ng gains and losses Subsidyforexportcredit
702,892.00 537,632.00 702,892.00 insurance
Patentssubsidies 32,400.00 40,600.00 32,400.00 Subsidiesfortechnological
0.00 300,000.00 0.00 innovation
Subsidyforexhibition 25,000.00 10,000.00 25,000.00 Subsidyforonlinetransactions
108,800.00 0.00 108,800.00 intechnology
SubsidyforR&D 693,000.00 0.00 693,000.00 Total 1,562,092.00 888,232.00 1,562,092.00 43.Non-operatingincome
Amount included in the Item ReportingPeriod Sameperiodoflastyear
current non-recurring g ains and losses Governmentsubsidies 283,761.00 0.00 283,761.00 Unpayableoverdueaccountspayable 676,788.07 0.00 676,788.07 IncomefromB2B 379,395.43 307,800.00 379,395.43 Incometransferredfromadvancesforthreeyears 0.00 844,169.97 0.00 Insuranceclaims 0.00 232,783.88 0.00 Others 1,127,629.37 743,344.91 1,127,629.37 Total 2,467,573.87 2,128,098.76 2,467,573.87 Ofwhich,governmentsubsidiesincludedintothecurrentgainsandlosses:
Same Period of
Item Reporting Period Relatedtoassets/relatedincome last year
Awardsasgovernmentsubsidiessubstituted
283,761.00 0.00 Relatedtotheincome forremoval
Total 283,761.00 0.00
44.Non-operatingexpenses
Amount included in the current Item ReportingPeriod Sameperiodoflastyear
non-recurring gains and losses Lossescausedbydamageand
12,582.69 211,164.66 12,582.69 scrapofnon-currentassets
Fines 4,632.00 19,000.00 4,632.00 Donation 20,000.00 50,000.00 20,000.00 Total 37,214.69 280,164.66 37,214.69
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 45.Incometaxexpense
(1)Listsofincometaxexpense
Item ReportingPeriod Sameperiodoflastyear Currentincometaxexpense
-377,202.20 -238,708.37 Deferredincometaxexpense
-661,307.31 3,654,776.13 Total
-1,038,509.51 3,416,067.76 (2)Reconciliationofaccountprofitandincometaxexpenses
Reporting Per Item
iod Totalprofits
-41,132,061.44 Currentincometaxexpenseaccountedbytaxandrelevantregulations
-10,283,015.36 Impactofdifferingtaxratesapplicabletosubsidiaries
3,970,255.26 Impactofadjustmentforpriorperiodtaxexpenses
-311,961.31 Impactofnon-taxableincome
-108,661.78 Impactofnon-deductiblecosts,expensesandlosses
332,317.41 Impact of utilisation of prior period deductible temporary differences and taxable temporary differences
forwhichnodeferredtaxassethasbeenrecognised
Impactofcurrentperioddeductibletemporarydifferencesandtaxabletemporarydifferencesforwhichno
6,912,313.44 deferredtaxassethasbeenrecognised
Adjustmentofdeferredtaxassetsanddeferredtaxliabilitiesbroughtforwardduetochangesintaxrates
ImpactofadditionaldeductionforR&Dexpenses
-1,549,757.17 Incometaxexpense
-1,038,509.51 46.Othercomprehensiveincome
SeeNoteVI30formoredetails.
47.Cash flowstatement
(1)Othercashreceivedrelevanttooperatingactivities:
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|Governmentsubsidies|1,845,853.00|888,232.00|
|Interestincome|1,153,304.46|2,128,069.08|
|Rentincome|27,398,244.83|25,168,728.17|
|Fundsincurrentaccountandothers|152,329.42|3,528,917.06|
|Total|30,549,731.71|31,713,946.31|

 (2)Othercashpaymentsrelatingtooperatingactivities
Item ReportingPeriod Sameperiodoflastyear Penaltiesanddonationspaid
0.00 69,000.00 Bankcharges
429,816.67 791,760.75 Salesexpensesandgeneralandadministrativeexpensespaidbycash
43,057,620.24 65,470,580.33
Feesforrent,waterandelectricity 26,355,232.31 70,135,416.36
Total 69,842,669.22 136,466,757.44
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (3)Othercashreceivedrelevanttoinvestmentactivities
Item ReportingPeriod Sameperiodoflastyear Torecoverthematuritytimedepositsthatforpurposetoearn
246,417,500.00 42,313,208.55 interestincomeinfinancialinstitutions
Total 246,417,500.00 42,313,208.55 (4)Othercashpaidrelevanttoinvestmentactivities
Item ReportingPeriod Sameperiodoflastyear Depositsinfinancialinstitutionsforthepurposeofearninginterestincome
435,917,500.00 377,386,926.35 Total
435,917,500.00 377,386,926.35 (5)Othercashreceivedrelevanttofinancingactivities
Item ReportingPeriod Sameperiodoflastyear Inter-banklendingofcapitalofrelatedparties
0.00 6,774,375.98 Total
0.00 6,774,375.98 (6)Therewasnoothercashpaidrelevanttofinancingactivities
48.Supplementaryinformationtothestatementofcashflows
(1)Supplementaryinformationtothestatementofcashflows
Supplementalinformation ReportingPeriod Sameperiodoflastyear 1.Reconciliationofnetprofittonetcashflowsgeneratedfrom
operatingactivities
Netprofit -40,093,551.93 13,565,414.73 Add:Provisionforimpairmentofassets 4,823,333.42 64,439.57 Depreciationoffixedassets,ofoil-gasassets,ofproductive
21,740,680.68 21,306,844.24 biologicalassets
Amortizationofintangibleassets 2,370,588.02 1,641,300.74 Long-termunamortizedexpenses 1,065,969.03 695,804.71 Lossesondisposaloffixedassets,intangibleassetsandother
-376,183.60 -318,516.72 long-termassets(gains:negative)
Lossonretirementoffixedassets(gainpresentedby"-"prefix) 12,582.69 211,164.66 Lossesfromvariationoffairvalue(gainpresentedby"-"prefix) 9,934,400.00 -1,881,750.00 Financialcost(gainpresentedby"-"prefix)) 454,499.85 8,316,196.20 Investmentloss(gainpresentedby"-"prefix) -9,876,900.98 -1,724,730.14 Decreaseindeferredincometaxassets((gainpresentedby"-"
-185,070.18 3,369,488.41 prefix)
Increaseindeferredincometaxliabilities
-461,498.58 264,711.57 (“-”meansdecrease)
Decreaseininventory(gainpresentedby"-"prefix) -34,785,431.30 31,179,588.22 Decreaseinaccountsreceivablefromoperatingactivities(gain
70,275,283.97 14,697,969.99 presentedby"-"prefix)
Increaseinpayablesfromoperatingactivities(“-”meansdecrease) -144,720,271.58 -148,899,222.14 Others
Netcashflowsgeneratedfromoperatingactivities -119,821,570.49 -57,511,295.96 2.Significantinvestingandfinancingactivitiesinvolvenocash:
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Supplementalinformation ReportingPeriod Sameperiodoflastyear Debt-to-capitalconversion
Convertiblebondstobeexpiredwithinoneyear
Fixedassetsunderfinancelease
3.Movementofcashandcashequivalents:
Closingbalanceofcashequivalents 248,535,096.81 263,939,205.09 Less:cashatthebeginningoftheperiod 564,381,960.88 738,195,729.53 Add:Closingbalanceofcashequivalents
Less:Cashatthebeginningoftheperiod
Netincreaseincashandcashequivalents -315,846,864.07 -474,256,524.44 (2)Cashandcashequivalents
Item ReportingPeriod Sameperiodoflastyear I.Cash
248,535,096.81 263,939,205.09 Including:Cashonhand
675,029.35 890,072.87 Bankdepositondemand
247,860,067.46 263,049,132.22 Othermonetaryfundsondemand
0.00 0.00 Payableofduefromcentralbank
0.00 0.00 Depositsinotherbanks
0.00 0.00 Callloanstobanks
0.00 0.00 II.Cashandcashequivalents
0.00 0.00 Including:Debtinstrumentmaturedwithinthreemonths
0.00 0.00 III.Closingbalanceofcashandcashequivalents
248,535,096.81 263,939,205.09 Ofwhich,therestrictedcashandcashequivalentsoftheCompany
andthesubsidiariesoftheGroupused
Note1:thecash andcashequivalentsexcludetherestrictedcashandcashequivalentstheCompanyandthesubsidiariesof theGroupused.
Note2:TimedepositsforthepurposeofearninginterestincomeinfinancialinstitutionsisRMB189,500,000.Cashservedas paymentrelatingtoinvestingactivitiesin2018shallbelistedanddeductedfromthebalanceofcashandcashequivalentsat theperiod-end.
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 49.Foreigncurrencymonetaryitems
(1)Foreigncurrencymonetaryitems
Item Closingforeigncurrencybalance Exchangerate ClosingconverttoRMBbalance Monetarycapital
Including:USD 12,507,859.10 6.6166 82,759,500.53 JPY 32,694,369.18 0.0599 1,958,850.43 IDR 2,548,755,894.76 0.0005 1,180,345.56 EUR 16,510.86 7.6515 126,332.84 GBP 9,519.60 8.6551 82,393.09 HKD 391,518.44 0.8431 330,089.20 HUF 81,016.00 0.0232 1,879.57 FRF 7.00 6.6546 46.58 TWD 740,854.00 0.2170 160,757.91 Total 86,600,195.71 Short-termloans
Including:USD 1,719,692.79 6.6166 11,378,458.25 TWD 30,100,000.00 0.2170 6,531,399.00 Total 17,909,857.25 Accountreceivable
Including:USD 33,534,668.11 6.6166 221,885,485.02 IDR 364,717,289.00 0.0005 168,568.48 EUR 45,634.84 7.6515 349,174.98 JPY 32,571,705.00 0.0599 1,951,501.13 Total 224,354,729.61 Accountpayable
Including:USD 11,636,161.90 6.6166 76,991,828.83 EUR 472,249.76 7.6515 3,613,419.04 HKD 579,212.94 0.8431 488,334.43 JPY 7,672,600.66 0.0599 459,696.20 IDR 1,181,987,641.32 0.0005 546,302.20 TWD 6,517,284.00 0.2170 1,414,185.46 Total 83,513,766.16 Otheraccountreceivable
Including:USD 99,672.65 6.6166 659,494.06 IDR 1,293,852,917.00 0.0005 598,005.15 TWD 1,267,017.00 0.2170 274,930.02 Total 1,532,429.23 Otheraccountpayable
Including:HKD 75,736.07 0.8431 63,853.08 JPY 540,300.00 0.0599 32,371.53 USD 845,515.80 6.6166 5,594,439.84 EUR 1,180.00 7.6515 9,028.77 IDR 837,872,704.42 0.0005 387,255.90 TWD 1,248,736.00 0.2170 270,963.22 Total 6,357,912.34 (2)Descriptionofoverseasoperatingentities
TheCompany'sholdingsub-subsidiariescompanyPt.StarComgisticIndonesiaislocatedatWestJavaprovinceinIndonesia,
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. due to Pt. Star Comgistic Indonesia are mostly settled in US dollars byusual purchases and sales, so that it adopt the US dollarasitsfunctionalcurrency.
TheCompany'sholdingsub-subsidiariescompanySCPDIislocatedatWestJavaprovinceinIndonesia, duetoSCPDIare mostlysettledinIDRbyusualpurchasesandsales,sothatitadopttheIDRasitsfunctionalcurrency.
The Company's holding sub-subsidiaries companyTKEI is located at Taiwan, due toTKEI are mostly settled inTWD by usualpurchasesandsales,sothatitadopttheTWDasitsfunctionalcurrency.
TheCompany'sholdingsub-subsidiariescompanyEastSinoislocatedatHongkong,duetoEastSinoaremostlysettledin HKDbyusualpurchasesandsales,sothatitadopttheHKDasitsfunctionalcurrency.
TheCompany'sholdingsub-subsidiariescompanyORIENTSTARINVESTMENTSLIMITEDislocatedatHongkong,due toORIENTSTARINVESTMENTSLIMITEDaremostlysettledinUSdollarsbyusualpurchasesandsales,sothatitadopt theUSdollarsasitsfunctionalcurrency.
50.Changesofscopeofconsolidationfinancialstatements
1.Changesofscopeofconsolidationfinancialstatementsforotherreasons
On15June2018,theCompany’smajority-ownedsubsidiaryTsannKuen(Zhangzhou)EnterpriseCo.,Ltd. newly set up a sub-subsidiary Tsann Kuen (Zhangzhou) Investment Co., Ltd. From the date of establishment on, Tsann Kuen (Zhangzhou) Investment Co., Ltd. has been included in the scope of consolidationfinancialstatements.
VII.Equityinothermainentities
1.Theequityinsubsidiaries
(1)Thestructureoftheenterprisegroup
Main Holdingpercentage(%)
Registration Natureof
Name operating Acquiredmethod place business Directly Indirectly
place
Manufacture
TsannKuen (Zhangzhou) Acquired through EnterpriseCo.,Ltd.
Zhangzhou Zhangzhou homeelectronic
75.00 75.00incorporation appliance
Acquired through Manufacture business
TsannKuen (Shanghai)
EnterpriseCo.,Ltd.
Shanghai Shanghai homeelectronic
46.875
62.50combination under appliance common
control
TsannKuen (Zhangzhou) Manufacture
Acquired through South Port Electronics Zhangzhou Zhangzhou homeelectronic
56.25 75.00incorporation EnterpriseCo.,Ltd.(TKN) appliance
Shanghai Canxing Trading Saleofhome Acquired through Co.,Ltd(STD)
Shanghai Shanghai
appliance
56.25 100.00incorporation Xiamen Tsannkuen Home
Designofhome Acquired through Appliance Design Co., Ltd. Xiamen Xiamen
appliance
100.00 100.00incorporation (“TKCD”)
Acquired through East Sino Development business
Investment,
Limited. HongKong HongKong
Trading
75.00
100.00combination under (EastSino) common
control
Acquired through Manufacture
Pt.Star Comgistic business
Indonesia(SCI)
Indonesia Indonesia homeelectronic
75.00 100.00combination under appliance
common
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Main Holdingpercentage(%)
Registration Natureof
Name operating Acquiredmethod place business Directly Indirectly
place
control
Pt.Star Comgistic Property
Realestate Acquired through Development Indonesia Indonesia Indonesia
development
75.00 100.00incorporation（“SCPDI”）
Acquired through Orient Star Investments
Investment, business
Limited (Orient Star HongKong HongKong
Trading
75.00 100.00combination under Investments)
uncommoncontrol Acquired through business
Tsann Kuen Edge
IntelligenceCo.,Ltd.
Taiwan Taiwan Industrialdesign
75.00
100.00combination under common
control
Tsann Kuen (Zhangzhou) Acquired through InvestmentCo.,Ltd.
Zhangzhou Zhangzhou
Investment 75.00 100.00incorporation (2)Significantnotwhollyownedsubsidiary
|||||
|-|-|-|-|
|Holdingproportionofminorityshareholders(%)|Profitandlossattributabletominorityequityduringcurrentyear|Dividendsattributabletominorityshareholders|Totalamountofminorityequityatperiod-end|
|25|-7,955,597.42|11,182,518.60|303,065,723.89|
|53.125|-657,974.61||42,301,519.10|
|25|-1,021,292.54||-361,746.76|
|25|-2,040,161.98||19,818,197.70|

 (3)Themainfinancialinformationofsignificantnotwhollyownedsubsidiary
2018.6.30
Nameof
Non-current Current Non-current
subsidiaries Currentassets Totalassets Totalliabilities assets liabilities liability
|||||||
|-|-|-|-|-|-|
|1,349,355,182.27|403,071,125.22|1,752,426,307.49|540,163,411.93|0.00|540,163,411.93|
|177,954,770.92|13,194,410.39|191,149,181.31|2,385,014.13|109,137,778.28|111,522,792.41|
|5,249,698.64|4,315,743.85|9,565,442.49|10,819,268.80|193,160.72|11,012,429.52|
|64,921,939.99|70,564,282.65|135,486,222.64|55,258,059.23|955,372.63|56,213,431.86|

(Continued)
2017.12.31
Nameofsubsidiaries Non-current Non-current
Currentassets Totalassets Currentliabilities Totalliabilities assets liability
TsannKuen (Zhangzhou)
EnterpriseCo.,Ltd.
1,569,688,493.26 396,137,339.10 1,965,825,832.36 676,421,595.20 588,877.50 677,010,472.70 TsannKuen (Shanghai)
EnterpriseCo.,Ltd.
180,634,383.82 11,938,656.68 192,573,040.50 2,570,332.87 109,137,778.28 111,708,111.15 Pt.StarComgistic
Indonesia(SCI) 62,295,711.26 72,303,711.81 134,599,423.07 47,136,417.88 827,859.50 47,964,277.38
TsannKuenEdge 4,755,678.58 4,784,549.74 9,540,228.32 6,683,867.35 171,308.17 6,855,175.52
IntelligenceCo.,Ltd.
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. ReportingPeriod
Total
Name Operatingcash
Operationrevenue Netprofit comprehensive
flow
income
||||
|-|-|-|
|633,712,855.58|-31,822,389.67|-99,054,381.42|
|460,356.27|-1,238,540.45|-2,584,983.96|
|5,186,214.49|-4,085,170.16|-6,159,899.06|
|57,156,180.74|-8,160,647.89|5,372,765.23|

Sameperiodoflastyear
Total
Name Operatingcash
Operationrevenue Netprofit comprehensive
flow
income
||||
|-|-|-|
|819,506,110.82|31,148,900.00|-41,034,228.98|
|429,020.81|-3,055,828.76|-2,883,754.57|
|3,528,954.02|-7,849,662.99|-7,771,230.43|
|49,326,459.51|-3,823,567.47|1,806,173.69|

2.Theequityinjointventuresorassociates
(1)Insignificantenterpriseinformationofassociates
Place Shareholding（%）
Nature Registered Acquired Companyname of Paidcapital
ofbusiness capital Direct Indirect method registration
Xiamentravelcanxing（Xiamen） Leasing RMB10
Acquired International Travel Service Co., and million
Xiamen 0.00 22.00 0.00 through Ltd. business
incorporation services
Note:Xiamentravelcanxing（Xiamen）InternationalTravelServiceCo.,Ltd.,withnoactualoperation,has completedthecancellationprocesson6February2018.
VIII.Theriskrelatedfinancialinstruments
The main financial instruments of the Company includes equity investments, debt investments, loans, accounts receivable, accounts payable, convertible bond and so on. For more details about all financial instruments, please see the relevant items in NoteVI. The risk associated with financial instruments, and risk management policies which the company uses to reduce these risks are described as follows. The management of the Company manages and supervises therisks to ensure thatthe risks can be controlled within alimited range. The Company analyzes the rationality of risk variables and possible impacts of possible changes on current gain and loss orshareholders’equity through sensitivity analysis.All risk variables rarely can change in isolation, and the correlation between variables has great influence on the ultimate amount generated from the change of some risk variable. Thus, the following isdone ontheassumptionthat each variable changes inisolation.
(I)Thetargets andpoliciesof risksmanagement
The target of risks management is to obtain the proper balance between the risks and benefits,
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. to reduce the negative impact that caused by the risk of the Company to the lowest level, and to maximize the benefits of shareholders and other equity investors. Based on the targets of risk management, the basic strategy of theCompany’s risk management is to identify and analyze the risks which are faced by the Company, establish suitable risk tolerance baseline and precede the risk management, and supervise a variety of risks timely and reliably, and control therisk within alimited range.
1.Market risk
(1)Foreign exchange risk
Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations generally. The company bears the foreign exchange risk primarily concerned with USD, JYP, IDR, EUR, HKD and TWD, in addition to the Company's subsidiary SCI purchases and sales used by USD, SCPDI by IDR, TKEI by TWD, the other main business activities of the Company used by RMB. On 30 June 2018, except the following assets or liabilities are recorded in foreign currency, the others are recorded in RMB. Foreign exchange risk of the assets and liabilities in foreign currencies may have an impact on the Company's performance of operation.
Item 2018.06.30 2017.12.31 Monetarycapital 86,600,195.71 212,200,290.58 Accountreceivable 224,354,729.61 256,438,317.51 Otheraccountsreceivable 1,532,429.23 2,715,037.60 Accountspayable 83,513,766.16 61,995,745.86 Otheraccountpayable 6,357,912.34 4,038,251.32 The Group purchases foreign currency forward contracts to reduce the foreign exchange risk, and foreign currency forward contracts shall be based on the amount of foreign currency assets.
2.Creditrisk
That could cause theCompany’s maximum credit risk of financial losses mainly from the losses of financial assets, which are resulted by the other party of contract fails to fulfill the obligations, as at 30June2018.
In order to reduce credit risk, the Company set up a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that the necessary measures be taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at each balance sheet date to ensure recognized fully provision for bad debts for the money cannot be recovered. So that the Company's management believestheCompany’s credit risk has been greatly reduced.
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. The Company's circulating funds deposited in banks which with high credit ratings, so that thelower credit risk ofcirculating funds.
3.Liquidity Risk
When managing liquidity risk, theCompany’s management believes that maintaining adequate cash and cash equivalents, and monitoring that at same time, in order to meet the needs of operation of the Company, and to reduce the impact of fluctuations in cash flows. The management of the Company monitors the use of bank borrowings and ensures to abide byloan agreements.
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. IX. Disclosureof thefairvalue
1.Closingfairvalueofassetsandliabilitiescalculatedbyfairvalue
Closingfairvalue
Fairvalue Fairvalue Fairvalue
Item
measurementitems measurement measurement Total atlevel1 itemsatlevel2 itemsatlevel3
I.Consistentfairvaluemeasurement
(I)Financialassetsmeasuredbyfair
valueandthechangesbeincludedinthe
currentprofitsandlosses
1.Tradingfinancialassets
(1)Debtinstrumentsinvestment
(2)Equitytoolinvestment
(3)Derivativefinancialassets
Totalassetsofconsistentfairvalue
measurement
(II)Tradingfinancialliabilities
Including:tradablebondissued
Derivativefinancialliabilities
6,008,550.00 6,008,550.00 Others
Totalliabilitiesofconsistentfair
valuemeasurement 6,008,550.00 6,008,550.00 2. Market price recognition basis for consistent and inconsistent fair value measurement items at level1
Based on the identical assets or liabilities acquired on unadjusted quoted in an active market at balance sheetday.
XI. Related party andrelated transaction
1.Detailsoftheparent
Proportionofvoting Proportionofshare
Registration Natureof
heldbyparent
rightsownedby parentcompany Nameofparentcompany Registeredcapital companyagainstthe
againsttheCompany place business Company(%)
(%)
Manufacture
STARCOMGISTIC and sales TWD
Taiwan 42.90 44.68 CAPITALCO.,LTD. electrical 3,000,000,000.00
equipment
2.SubsidiariesoftheCompany
SeeNoteVII.1“Theequityinsubsidiaries”.
3.DetailsoftheCompany’sjointventuresandassociates
SeeNoteVII.3Equityinjointventuresandassociates.
4.Detailsofotherrelatedparties
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. Name Relationship
FillmanInvestmentLimited Shareholder
TsannKuenJapanCo.,Ltd. Sameultimateholdingcompany
Thecompanydirectlycontrolledbythekeymanagementandclosed ThermasterElectronic(Xiamen)Ltd.
familymembers
WUWHAMARESTAURANTMANAGEMENT
Ultimateholdingcompanyhaveequity
CO.,LTD.INXIAMEN
TsannKuenEnterpriseCo.,Ltd. Undersameactualcontroller
KuaisanElectricBusinessServiceCo.,Ltd. Undersameactualcontroller
GoldMineChainEnterpriseCo.,Ltd. Undersameactualcontroller
StarInternationalTravelCo.,Ltd. Sameultimateholdingcompany
SinoGlobalDevelopmentLtd. Undersameactualcontroller
StarcomgisticAustraliaPtyLtd Sameultimateholdingcompany
5.Transactionswithrelatedparties
(1)Transactionsthroughpurchaseorsellgoodsandacceptorsupplyservices
①Thesituationofpurchasesgoods
|||||||
|-|-|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Theapprovaltradecredit|Whetherexceedtradecreditornot|Sameperiodoflastyear|
|Thermaster Electronic(Xiamen)Ltd.|Purchaseofgoods|13,847,118.67|40,000,000.00|No|16,738,518.44|
|TsannKuenEnterpriseCo.,Ltd.|Purchaseofgoods|10,290.50|100,000.00|No|19,035.91|
|Gold Mine ChainEnterpriseCo.,Ltd.|Purchaseofgoods|1,513.82|50,000.00|No|392.98|
|STARCOMGISTICCAPITALCO.,LTD.|Purchaseofgoods|4,964.08|100,000.00|No|2,876.99|
|KuaisanElectricBusinessServiceCo.,Ltd..|Purchaseofgoods|643.50|30,000.00|No|0.00|
|Total||13,864,530.57|||16,760,824.32|

②Thesituationofsellsgoods
|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
|STARCOMGISTICCAPITALCO.,LTD.|Saleofgoods|5,762,835.97|7,922,076.14|
|TsannKuenEnterpriseCo.,Ltd.|Saleofgoods|0.00|570.82|
|GoldMineChainEnterpriseCo.,Ltd.|Saleofgoods|0.00|85,749.96|
|Total||5,762,835.97|8,008,396.92|

 (2)Informationofrelatedlease
①TheCompanyisastheleasor
Nameoflessee Categoryofleasedassets ReportingPeriod Sameperiodoflastyear WUWHAMARESTAURANT
Houseproperty 23,700.00 32,760.00 MANAGEMENTCO.,LTD.INXIAMEN
Total
23,700.00 32,760.00
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.②TheCompanyisasthelessee
Categoryofleased
Nameoflessor ReportingPeriod Sameperiodoflastyear assets
STARCOMGISTICCAPITALCO.,LTD. Houseproperty
684,104.52 691,394.42 Total
684,104.52 691,394.42 (3)Assetstransfer,Debtrestructuringbetweenrelatedparties
|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
|StarcomgisticAustraliaPtyLtd|Saleoffixedassets|0.00|17,664.40|
|TsannKuenEnterpriseCo.,Ltd.|Saleoffixedassets|0.00|0.00|
|STARCOMGISTICCAPITALCO.,LTD.|Saleoffixedassets|8,844.00|0.00|
|Total||8,844.00|17,664.40|
|TsannKuenEnterpriseCo.,Ltd.|Purchaseoffixedassets|0.00|177,486.58|
|KuaisanElectricBusinessServiceCo.,Ltd.|Purchaseoffixedassets|0.00|36,433.06|
|ThermasterElectronic(Xiamen)Ltd.|Purchaseoffixedassets|12,820.51|12,820.51|
|Total||12,820.51|226,740.15|

 (4) Inter-banklendingofcapitalofrelatedparties
Reporting Sameperiod Relatedparty Content
Period oflastyear
||
|-|
|STARCOMGISTICCAPITALCO.,LTD.|
|STARCOMGISTICCAPITALCO.,LTD.|

 SinoGlobalDevelopmentLtd. Borrowingcapital 0.00 6,774,375.98 SinoGlobalDevelopmentLtd. Interestfrominter-bankborrowingandlending 0.00 115,259.48 Total 441,661.22 6,889,635.46 (5)Otherrelated-partytransactions
|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
|StarInternationalTravelCo.,Ltd.|Receivingservice|425,218.20|419,093.08|
|KuaisanElectricBusinessServiceCo.,Ltd.|Receivinglaborservice|480.48|34,565.61|
|STARCOMGISTICCAPITALCO.,LTD.|Receivingservice|0.00|6,211.35|
|TsannKuenEnterpriseCo.,Ltd.|Offeringlaborservice|27,680.84|33,151.76|
|Total||453,379.52|493,021.80|

 (6)Remunerationsofkeymanagementpersonnel
Unit:RMB’0,000 Item ReportingPeriod Sameperiodoflastyear Remunerationsofkeymanagement
102.62 109.65 personnel
Total 102.62 109.65
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 6.Receivablesandpayablesofrelatedparties
(1)Receivables
||||||
|-|-|-|-|-|
|Nameofitem|2018.06.30||2017.12.31||
||Bookbalance|Baddebtprovision|Bookbalance|Baddebtprovision|
|Accountsreceivable:|||||
|STARCOMGISTICCAPITALCO.,LTD.|3,049,870.36||1,265,582.41||
|GoldMineChainEnterpriseCo.,Ltd.|0.00||0.00||
|Total|3,049,870.36|0.00|1,265,582.41|0.00|
|Otheraccountsreceivable:|||||
|TsannKuenEnterpriseCo.,Ltd.|0.00||5,723.50||
|STARCOMGISTICCAPITALCO.,LTD.|202,626.57||204,484.13||
|GoldMineChainEnterpriseCo.,Ltd.|0.00||29,828.69||
|Total|202,626.57|0.00|240,036.32|0.00|

 (2)Payables
||||
|-|-|-|
|Nameofitem|2018.06.30|2017.12.31|
|Accountspayable:|||
|ThermasterElectronic(Xiamen)Ltd.|6,492,182.34|9,004,478.45|
|Total|6,492,182.34|9,004,478.45|
|Otheraccountpayable:|||
|WUWHAMARESTAURANTMANAGEMENTCO.,LTD.INXIAMEN|23,776.60|23,776.60|
|TsannKuenEnterpriseCo.,Ltd.|71.61|915.96|
|STARCOMGISTICCAPITALCO.,LTD.|468,710.10|29,259.30|
|KuaisanElectricBusinessServiceCo.,Ltd.|497.56|0.00|
|StarInternationalTravelCo.,Ltd.|51,962.06|0.00|
|Total|545,017.93|53,951.86|

 XI. Commitments andcontingency
1.Significantcommitments
(1)Operatingleasecommitments
Asoftheendofbalancesheetdate,theirrevocableoperatingleasecommitmentsthattheCompanysignedwereasfollowed:Unit:RMB’0,000 Item 2018.06.30 2017.12.31 Minimumlease paymentsof irrevocableoperating
lease
1yearafterbalancedate
3,638.00 3,638.00 2yearafterbalancedate
3,638.00 3,638.00 3yearafterbalancedate
3,638.00 3,638.00 Futureyears
118,228.00 120,047.00 Total
129,142.00 130,961.00 2.Contingency
(1)As MTN Products, Inc. /Water Solutions(HongKong) Ltd ("MTN /WSL") didnot paytherelevant payment intime
andfulfilltheorderaccordingtothecontract,thesubsidiaryoftheCompany,TsannKuen(Zhangzhou)EnterpriseCo.,Ltd.
submitted the indictment to the SUPERIOR COURTOF CALIFORNIACOUNTYOF LOSANGELES on 23 November
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 2016tosueMTN/WSLforpaymentofUSD707,522.92andUSD1,402,940forreservelosses,totalingUSD2,110,462.92. Asofthereportingdate,thecaseisstillpending.
(2)As Philips Lighting (China) Investment Co., Ltd. ("Philips Lighting") did not pay the relevant payment in accordance with the relevant agreement, the Company's subsidiary TsannKuen (Zhangzhou) Enterprise Co., Ltd. (hereafter, TKL), submittedtheindictmenton23November2016toLonghaiCityPeople'sCourt,requestingthepaymentofRMB2,499,658.4. On12January2018,TKLreceivedthefirstinstancejudgmentfromthecourtthatPhilipsshouldpayRMB423,345.63and overdueinteresttoTKL.TKLhasfiledanappeal.Asofthereportingdate,thecaseisstillpending.
(3)TSANNKUEN(CHINA)ENTERPRISECO.,LTD.(therefore"TKC")andTianYuan(Xiamen)AssetManagementCo., Ltd. (therefore "Tianyuan") signed the "Land Lease Contract (Northwest Corner)" and “Housing Lease Contract (North Building)"on26June2013,signedthe"LandLeaseContract(southeastcorner)","HousingLeaseContract(HuarongRoad 23)"(partofthehouse)on29July2013.TKCleased thepartofthelandandhouseonXinglongRoad88toTianyuanfor businessactivities,partofthesiteandhousingleasedtoTianYuancompanyforbusinessactivities.
AsTianyuandidnotpaytherentinaccordancewiththecontractintimeandunauthorizeduseoftheleasedproperty,TKC filedalawsuitinXiamenHuliDistrictPeople'sCourttopaytherelevantrent.On29December2015,People'sCourtofHuli DistrictofXiamenCityruledthatthefourcaseswillbemerged.On30May2017People'sCourtofHuliDistrictofXiamen City made a ruling of first instance: It ruled that Tianyuan Company paid liquidated damages of overdue payment of the Company.Tianyuancompanyfiledanappeal.Asofthereportingdate,thecaseisstillpending.
(4) The subsidiary of the Company - TsannKuen (Zhangzhou) Enterprise Co., Ltd. (hereafter,TKL) signed the< ProductSupplyAgreement>withXindaElectromechanicsCo.,Ltd.(hereafter,Xinda)on20July2009.Thevalidityofthecontractisfrom1July2009to30June2012.Furthermore,on1January2011,theysignedthe<TsannKuen(Zhangzhou)Enterprise Co.,Ltd. 2011EDProcurementContract> and relevant<SpecialArrangementClauses>, andother agreements.According tothoseagreements,TKLshouldpurchaseproductsfromXinda.TKLrejectedtopayforthepurchaseandterminatedthose agreementsduetothepoorqualityproductsfromXinda.On23December2011,XindalodgedpetitionforcivillitigationtotheIntermediatePeople’sCourtofZhangzhoufortheorderofIntermediatePeople’sCourtofZhangzhouthatTKLpayfor purchasefromXindaamountingtoUSD479,089.06(RMB3,071,535.78)immediatelytogetherwiththeliquidateddamages for delay payment and resume performance of theagreement (thevalue oftheunperformed agreement amountingtoUSD 189,423.25).
On8January2012,TKLlodgedcounterclaimtotheCourtclaimingthatduetounsatisfactoryqualityofgoodssuppliedby Xinda, goods supplied byTKL had been returned from clients and orders cancelled, resulting in substantial financial loss and reputation damage suffered by theTKL. TKL therefore petitioned for the court order for relief of agreement and that Xinda shall pay to TKL liquidated damage amounting to RMB1 million together with financial loss amounting to RMB7.6216million.
IntermediatePeople’sCourtofZhangzhoumadethejudgment([2012]ZMCZNo.8)on15August2013asfollow:
a.TKLshouldpay goodspayments amountUSD479,089.06to plaintiff Xinda within 15days from thedateon which the
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. judgmentbecomeseffective,equivalenttoRMB3,071,535.78.
b. Plaintiff Xinda and the third party BoLuo Lianyuan industry Co., Ltd. (hereafter Lianyuan) should jointly pay the liquidateddamageforRMB1,233,399.70toTKLwithin15daysfromthedateonwhichthejudgmentbecomeseffective. c.Unperformed10ordersenteredintobyTKL,XindaandLianyuanaredeclaredcancelled.
d.RejectotherclaimspartitionedbytheplaintiffXinda.
e.RejectotherclaimspartitionedbyTKL.Afterthefirstjudgment,bothpartiesappealedagainstthejudgment.
HigherPeople'sCourtofFujianProvincemadethefinaljudgmenton15December2016withthefollowingverdict: a.Verdictc,d,efromthefirstjudgmentremainsunchanged.
b.Verdict afrom thefirst judgment changed as:TKLshouldpay goodspayments amount RMB2,375,547.92Xindawithin 15daysfromthedateonwhichthejudgmentbecomeseffective.
c.Verdictbfromthefirstjudgmentchangedas: XindaandBoLuoLianyuanindustryCo.,Ltd.ShouldjointlypayTKLthe liquidateddamageforRMB537,411.84within15daysfromthedateonwhichthejudgmentbecomeseffective.
TheflawedmotorsuppliedbyXindaandLianyuantotaled103,638,23,035ofthemwaspickedoutin(2012)Zhangminchuzi Case No.8, the Company conducted another notary pick out on the remaining flawed motors during the second instance, totaled 80,603. TKL lodged petition for civil litigation on 18 January 2017, based on the judgments from (2012)Zhangminchuzi Case No.8, TKL asks for the order of that Xinda and Lianyuan return the corresponding goods paymentsofthe80,603flawedmotors,alongwithcompensationforotherlossescausedbythis.
IntermediatePeople’sCourtofZhangzhoumadethejudgment(2017M06MCNo.110)on11June2018asfollow:
a. The defendant Xinda and Lianyuan should jointly return the goods payments of 80603 motors amounting to RMB2,435,368.34totheplaintiffTKLwithin15daysfromthedateonwhichthejudgmentbecomeseffective.
b. The defendant Xinda and Lianyuan should jointly pay the labor cost of RMB873,107.3 generated from checking, disassembly and sorting of flawed motors and fees of RMB21,955 for preservation and notary of evidence and for photographyandvideorecording,whichtotalsRMB895,062.3.ThelitigationfeeofRMB33,443shallbejointlybornbythe twodefendants.Xindahasfiledanappeal.AsoftheReportingPeriod,thecaseisstillpending.
XII. Events afterbalancesheet date:None
XIII. Notes of mainitems in thefinancialstatements oftheCompany
1.Accountsreceivable
(1)Accountsreceivableclassifiedbycategory
2018.06.30
Item Bookbalance Baddebtprovision
Bookvalue Withdrawal
Amount Proportion(%) Amount
proportion(%)
Accounts receivable
with significant single
amount for which bad 0.00 0.00 0.00 0.00 0.00 debt provision
separatelyaccrued
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 2018.06.30
Item Bookbalance Baddebtprovision
Bookvalue Withdrawal
Amount Proportion(%) Amount
proportion(%)
Accounts receivable
withdrawal of bad debt
18,184,974.05 100.00 528,492.16 2.91 17,656,481.89 provision of by credit
riskscharacteristics:
Portfoliobyage 18,093,176.15 99.50 528,492.16 2.92 17,564,683.99 Relatedpartygroup 91,797.90 0.50 0.00 91,797.90 Accounts receivable
with insignificant
single amount for
0.00 0.00 0.00 0.00 0.00 which bad debt
provision separately
accrued
Total 18,184,974.05 100.00 528,492.16 2.91 17,656,481.89 (Continued)
2018.01.01
Bookbalance Baddebtprovision
Item
Withdrawal Bookvalue Amount Proportion(%) Amount proportion(
%)
Accounts receivable with
significant single amount for
which bad debt provision
separatelyaccrued
Accounts receivable withdrawal
of bad debt provision of by 21,753,323.81 100.00 1,012,264.73 4.65 20,741,059.08 creditriskscharacteristics:
Portfoliobyage 21,581,665.45 99.21 1,012,264.73 4.69 20,569,400.72 Relatedpartygroup 171,658.36 0.79 0.00 171,658.36 Accounts receivable with
insignificant single amount for
0.00 0.00 0.00 0.00 which bad debt provision
separatelyaccrued
Total 21,753,323.81 100.00 1,012,264.73 4.65 20,741,059.08 (Continued)
①Accountsreceivableusingtheageanalysismethodformeasurementofallowanceforbaddebt
2018.06.30
Aging
Amount Baddebtprovision Proportion(%) Within1year
18,076,930.66 512,246.67 2.83 Including:1-90days
14,248,138.33 0.00 91-180days
3,287,253.11 328,725.31 10.00 181-270days
436,241.22 130,872.36 30.00 271-365days
105,298.00 52,649.00 50.00 1-2years
10,600.00 10,600.00 100.00 2-3years 5,645.49 5,645.49 100.00 Total 18,093,176.15 528,492.16 2.92②Inthegroups,accountsreceivableusingrelatedpartymethodformeasurementofallowanceforbaddebt
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 2018.06.30
Item
Accountreceivable BaddebtprovisionWithdrawalproportion(%) Relatedpartygroup
91,797.90 0.00 0.00 Total
91,797.90 0.00 0.00 (2)Baddebtprovisionwithdrawal,reversedorrecoveredintheReportingPeriod
TheamountofbaddebtprovisionrecovedintheReportingPeriodwasRMB483,772.57.
(3)ParticularsofaccountsreceivablewithoutactualverificationduringtheReportingPeriod
(4)Detailsoftopfiveaccountsreceivableinclosingbalance
The total amount of top five accounts receivables in closing balance summarized by debtors as at the end of the Reporting Period is RMB18,092,331.15, accounting for99.49% of the total closing balance of accounts receivable as at the end of the Reporting Period, the total corresponding closing balance of allowanceforbaddebtsisRMB528,492.16.
2.Otheraccountsreceivable
(1)Disclosurebyclassification
|||||||
|-|-|-|-|-|-|
|Item|2018.06.30|||||
||Bookbalance||Baddebtprovision||Bookvalue|
||Amount|Proportion(%)|Amount|Withdrawalproportion(%)||
|Otheraccounts receivablewithsignificant single amount forwhich bad debt provisionseparatelyaccrued|0.00|0.00|0.00|0.00|0.00|
|Other accounts receivablewithdrawn bad debt provisionaccording to credit riskscharacteristics|2,301,311.69|92.93|33,339.10|1.45|2,267,972.59|
|Portfoliobyage|414,095.53|16.72|33,339.10|8.05|380,756.43|
|Relatedpartygroup|1,887,216.16|76.21|0.00|0.00|1,887,216.16|
|Otheraccounts receivablewithinsignificant single amount forwhich bad debt provisionseparatelyaccrued|175,000.00|7.07|0.00|0.00|175,000.00|
|Total|2,476,311.69|100.00|33,339.10|1.35|2,442,972.59|

 (Continued)
2017.12.31
Item Bookbalance Baddebtprovision
Bookvalue Proportion Withdrawal
Amount Amount
(%) proportion(%)
Other accounts receivable with
significant single amount for which
baddebtprovisionseparatelyaccrued
Other accounts receivable withdrawn
baddebtprovisionaccordingtocredit
riskscharacteristics
Portfoliobyage
388,868.17 74.95 46,401.10 11.93 342,467.07
Relatedpartygroup
Other accounts receivable with
130,000.00 25.05 0.00 0.00 130,000.00
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 2017.12.31
Item Bookbalance Baddebtprovision
Bookvalue Proportion Withdrawal
Amount Amount
(%) proportion(%)
insignificant single amount for which
baddebtprovisionseparatelyaccrued
Total
518,868.17 100.00 46,401.10 8.94 472,467.07 (Continued)
①Inthegroups,otherreceivableusingtheageanalysismethodformeasurementofallowanceforbaddebt
2018.06.30
Aging
Otheraccountsreceivable Baddebtprovision Proportion(%)
||||
|-|-|-|
|382,711.43|1,955.00|0.51|
|363,761.43||0.00|
|18,800.00|1,880.00|10.00|
|0.00|0.00|0.00|
|150.00|75.00|50.00|
|31,384.10|31,384.10|100.00|
|414,095.53|33,339.10|8.05|

 (2)Baddebtprovisionwithdrawal,reversedorrecoveredintheReportingPeriod
TheamountofrecoveredbaddebtprovisionduringtheReportingperiodwasRMB13,062.00.
3.Long-termequityinvestment
(1)Long-termequityinvestment
2018.06.30 2017.12.31
Item Depreciation Depreciation
Bookbalance Bookvalue Bookbalance Bookvalue reserves reserves
Investmenttothe
922,914,701.56 922,914,701.56 922,914,701.56 922,914,701.56 subsidiary
Total 922,914,701.56 922,914,701.56 922,914,701.56 922,914,701.56 (2)Investmenttothesubsidiary
Withdrawn
Closing impairment
Investee 2017.12.31
Increase Decrease
2018.06.30
provisioninthe
balanceof impairment Reporting
provision Period
TKL 921,914,701.56 921,914,701.56
Xiamen Tsannkuen
Home Appliance
1,000,000.00 1,000,000.00
DesignCo.,Ltd.
Total 922,914,701.56 0.00 0.00 922,914,701.56
4.Revenuesandoperatingcosts
ReportingPeriod Sameperiodoflastyear
Item
Revenues Operatingcosts Revenues Operatingcosts Mainoperations
32,269,461.73 29,744,013.84 29,163,387.63 25,654,159.29
Otheroperations
24,752,261.23 15,688,587.26 8,772,475.75 1,091,104.50
Total 57,021,722.96 45,432,601.10 37,935,863.38 26,745,263.79
2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 5.Investmentincome
Item ReportingPeriod Sameperiodoflastyear Long-term equity investment income
33,547,555.83 30,310,250.78 accountedbycostmethod
Total 33,547,555.83 30,310,250.78 XIV.Supplementary materials
1.Itemsandamountsofextraordinarygainsandlosses
||||
|-|-|-|
|Item||Explanation|
||376,183.60||
|Tax return and relief approved ultra vires or without any official approvaldocuments|||
|Tax rebates, reductions or exemptions due to approval beyond authority orthelackofofficialapprovaldocuments|1,845,853.00||
|Capitaloccupationchargesonnon-financialenterprisesthatarerecordedintocurrentgainsandlosses|||
|Gains due to that the investment costs for the Company to obtainsubsidiaries, associates and joint ventures are lower than the enjoyable fairvalue of the identifiable net assets of the investees when making theinvestments|||
|Gain/lossonnon-monetaryassetswap|||
|Gain/lossonentrustingotherswithinvestmentsorassetmanagement|||
|AssetimpairmentprovisionsduetoactsofGodsuchasnaturaldisasters|||
|Gainsandlossesfromdebtrestructuring|||
|Expenses on business reorganization, such as expenses on staffarrangements,integration,etc.|||
|Gain/loss on the part over the fair value due to transactions with distinctlyunfairprices|||
|Currentnetgainsandlossesofsubsidiariesacquiredinbusinesscombinationunderthesamecontrolfromperiod-begintocombinationdate|||
|Profit and loss from contingencies irrelative to the normal businessoperationsofcompany|||
|Gain/lossfromchangeoffairvalueoftransactionalassetsandliabilities,andinvestmentgainsfromdisposaloftransactionalfinancialassetsandliabilitiesandavailable-for-salefinancialassets,otherthanvalidhedgingrelatedtotheCompany’scommonbusinesses|||
|Depreciationreservesreturnsofreceivableswithseparatedepreciationtest|||
|Gain/lossonentrustmentloans|||
|Gain/loss on change of the fair value of investing real estate of which thesubsequentmeasurementiscarriedoutadoptingthefairvaluemethod|||
|Effect on currentgains/losses when a one-off adjustment ismade to currentgains/losses according to requirements of taxation, accounting and otherrelevantlawsandregulations|||
|Custodyfeeincomewhenentrustedwithoperation|||
|Othernon-operatingincomeandexpensesotherthantheabove|2,146,598.18||
|Project confirmed with the definition of non-recurring gains and losses andlosses|||
|Less:Incometaxeffects|745,230.24||

2018Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
||||
|-|-|-|
|Item||Explanation|
|Minorityinterestseffects(aftertax)|698,547.26||
|Total|2,867,358.26||

Note: Extraordinary gains or losses event use“+”express revenue and income, “-” express loss and expenditure.
The Company recognised non-recurring categories of activities in accordance with the Explanatory Announcement regarding Information Disclosure by Publicly Listed Company No. 1 - Non-recurringProfitandLoss(ZhengjianhuiGonggao[2008]No.43).
2.Yieldrateofnetassetsandearningspershare
Weightedaverage EPS(Yuan/share)
ProfitasofReportingPeriod
yieldrateofnetassets% EPS-basic EPS-diluted Net profit attributable to common shareholders of the -4.73 -0.15 -0.15 Company
Net profit attributable to common shareholders of the -5.22 -0.17 -0.17 Companyafterdeductionofnon-recurringprofitandloss