2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
2017 SEMI-ANNUAL REPORT
(Unaudited)
August 2017
2017Semi-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.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Contents
Section I. Important Statements, Contents&Terms.........................................................2 Section II.CompanyProfile&FinancialHighlights..........................................................5 Section III. Business Highlights............................................................................................8 SectionIV. PerformanceDiscussion&Analysis...............................................................10 Section V. SignificantEvents...............................................................................................22 Section VI. ChangeinShares&Shareholders..................................................................34 Section VII. Preference Shares............................................................................................37 SectionVIII. Directors, Supervisors, SeniorManagementStaff& Employees.............37 Section IX. Corporate Bonds...............................................................................................38 Section X. Financial Report.................................................................................................38 SectionXI. Documents AvailableforReference................................................................39
2017Semi-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|
|RMB|Refersto|RMBYuan|

2017Semi-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, TaiwaneseInvestment Zone, Zhangzhou, Fujian Province,P.R.China|TSANN KUEN Industrial Park, TaiwaneseInvestment Zone, Zhangzhou, Fujian Province,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?
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.□Applicable√Notapplicable
IV.Accounting and financialhighlights
DoestheCompanyneedtoadjustretrospectivelyorrestateaccountingdataofpreviousperiods?
□Yes√No
Unit:RMBYuan
|||||
|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|YoY+/-（％）|
|Operatingrevenues|869,683,758.68|798,108,689.27|8.97|
|NetprofitattributabletoshareholdersoftheCompany|11,066,574.11|17,789,801.36|-37.79|
|Net profit attributable to shareholders of the Company afterexcludingnon-recurringgainsandlosses|6,803,673.06|15,944,852.56|-57.33|
|Netcashflowfromoperatingactivities|-57,511,295.96|-60,172,006.29|4.42|
|BasicEPS(RMBYuan/share)|0.06|0.10|-40.00|
|DilutedEPS(RMBYuan/share)|0.06|0.10|-40.00|
|WeightedaverageROE(%)|1.79|3.11|-1.32|
|Item|AsattheendoftheReportingPeriod|Asattheendoflastyear|+/-(%)|
|Totalassets|1,655,926,939.85|1,697,533,004.99|-2.45|
|NetassetsattributabletoshareholdersoftheCompany|598,409,580.98|610,856,271.31|-2.04|

 TotalsharesoftheCompanyasatclosureofthelasttradingdaybeforethedisclosureofthisReport:
|||
|-|-|
|Total shares of the Company as at closure of the last trading day before thedisclosureofthisReport(share)|185,391,680|
|FullydilutedEPSbasedonthelatesttotalshares(RMBYuan/share)|0.06|

 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.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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
Unit:RMBYuan
||||
|-|-|-|
|Item|Amount|Explanation|
|Gains/losses on the disposal of non-current assets (including the offset part of asset impairmentprovisions)|131,250.15|Gains/lossesonthedisposalofassets|
|Taxrebates,reductionsorexemptionsduetoapprovalbeyondauthorityorthelackofofficialapprovaldocuments|||
|Governmentgrantsrecognizedinthecurrentperiod,exceptforthoseacquiredintheordinarycourseofbusinessorgrantedatcertainquotasoramountsaccordingtothecountry’sunifiedstandards|888,232.00||
|Capitaloccupationchargesonnon-financialenterprisesthatrecordedintocurrentgainsandlosses|||
|Gains due to that the investment costs for the Company to obtain subsidiaries, associates and jointventures are lower than the enjoyable fair value of the identifiable net assets of the investees whenmakingtheinvestments|||
|Gain/lossonnon-monetaryassetswap|||
|Gain/lossonentrustingotherswithinvestmentsorassetmanagement|||
|AssetimpairmentprovisionsduetoactsofGodsuchasnaturaldisasters|||
|Gain/lossondebtrestructuring|||
|Expensesforbusinessreorganization,suchasexpensesforstaffing,reorganizationetc.|||
|Gain/lossonthepartoverthefairvalueduetotransactionswithdistinctlyunfairprices|||
|Current gainsand losses ofsubsidies acquired frombusinesscombinationunder the same controlasfromperiod-begintocombinationdate|||
|Gain/lossoncontingenteventsirrelevanttotheCompany’snormalbusiness|||
|Gainsandlossesonchangeinfairvaluefromtradablefinancialassetsandtradablefinancialliabilities,aswellasinvestmentincomefromdisposaloftradablefinancialassetsandtradablefinancialliabilitiesandfinancialassetsavailableforsalesexceptforeffectivehedgingrelatedwithnormalbusinessesoftheCompany|3,606,480.14|Gains on sale of forwardexchange contracts, fairvalue changes and othercurrent assets (wealthmanagementinstruments)|
|Reversalofprovisionforimpairmentthatmadeimpairmenttestindependently|||
|Gain/lossonloansobtainedbyentrustingothers|||
|Gain/lossonchangeofthefairvalueofinvestingrealestateofwhichthesubsequentmeasurementiscarriedoutadoptingthefairvaluemethod|||
|Effectoncurrentgains/losseswhenaone-offadjustmentismadetocurrentgains/lossesaccordingtorequirementsoftaxation,accountingandotherrelevantlawsandregulations|||
|Custodyfeeincomewhenentrustedwithoperation|||
|Othernon-operationincomeandexpensesotherthantheabove|2,035,200.67||
|Othergain/lossitemsthatmeetthedefinitionofanextraordinarygain/loss|||
|Less:Incometaxeffects|960,213.95||
|Minorityinterestseffects(aftertax)|1,438,047.96||
|Total|4,262,901.05||

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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
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|Up100%fromtheopeningamountoftheyear,mainlybecauseofassessedgainsonforwardforexcontracts|
|Prepayments|Up255.85%fromtheopeningamountoftheyear,mainlybecauseofincreasedrentprepaymentsforplants|
|Interestreceivable|Up18719.94%fromtheopeningamountoftheyear,mainlybecauseofincreasedaccruedinterestontermdeposits|
|Othercurrentassets|Up101.99%fromtheopeningamountoftheyear,mainlybecauseofincreasedwealthmanagementinstruments|
|Constructioninprogress|Up83.94%fromtheopeningamountoftheyear,mainlybecauseofunacceptedlandpreparationwork|
|Othernon-currentassets|Up144.54%fromtheopeningamountoftheyear,mainlybecauseofincreasedprepaymentsforequipment|

2.Mainassetsoverseas
√Applicable□Notapplicable
Unit:RMBYuan
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|Asset|Nature|Value|Location|Operationstatus|Measurestakentoprotectassetsafety|Earnings|IntheCompany’snetassets(%)|Anymajorimpairmentriskornot|
|Pt.StarComgisticIndonesia|Investment|135,424,919.89|Indonesia|Normal|Periodicreview|-3,823,567.47|22.63|No|
|TsannkuenEdgeIntelligenceCo.,Ltd.|Equityacquisition|12,201,898.36|Taiwan|Normal|Periodicreview|-7,849,662.99|2.04|No|
|Otherinformation|N/A||||||||

III. Core competitiveness analysis
IstheCompanysubjecttoanydisclosurerequirementsforspecialindustries?
No.
Asamanufacturerof small homeappliances, mostofour productsareexportedandwe alsoworkonthedomesticmarket aswell. AndourcorecompetitiveedgesmainlylieinthecapabilitytodevelopnewproductsinatimelymanneraccordingtomarketneedsduetoourstrengthintechnologyandR&D,ourdifferentiatedabilityindesignandresourceintegration,andarelativelyhighmarket positionduetoourgoodrelationshipwithcustomerswithgloballyfamousbrands.
IntheReportingPeriod,weobtained57patentsinR&D,including12inventionpatentsand45productdesignpatents.Therearealso dozensofpatentsbeingappliedfor.Thesepatentscanhelpbetterprotectourintellectualpropertyrights,giveplaytoourcompetitive edgeinindependentpropertyrights,keepaleadingpositionintechnologyandincreaseourcorecompetitiveness.
In addition, Tsannkuen Edge Intelligence Co., Ltd. (“Edge Intelligence”), one of our subsidiaries, owns theArduino open control platformtechnology,whichwillbeagreathelpinourmediumandlong-termstrategyforIOT(InternetofThings),ICT(Information and Communication Tech) andAI (Artificial Intelligence). TheR&D and technology strength of Edge Intelligence in Taiwan will help further increase our overall strength inR&D, strengthen our medium and long-term strategy inR&D, mutually complementR&DresourcesofouroperationsinmainlandChina,andimproveoursmarthomeappliancedivisiontocopewiththerapidchanges inthemarket.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Section IV. Performance Discussion& Analysis
I. Overview
For the Reporting Period, the Company achieved operating revenues of RMB870 million, up8.97% over RMB798 million of thesameperiodoflastyear,andnetprofitofRMB11million,down37.79%overRMB18millionofthesameperiodoflastyear.Thisis mainlybecausethepricesofrawmaterialswentup,whichoffsetthegrossprofitmarginontheincreasedoperatingrevenues,andthe foreignexchangegainsdropped.
II. Main business analysis
1.Overview
We carried on with our simplification and transformation strategies. We dividedR&D tasks for our teams in mainland China and Taiwan and built research institutions at three levels of resource allocation. We also checked the structures and functions of our departments of development, procurement, manufacturing and marketing to make sure the implementation of lean production. Meanwhile, new raw materials, techniques and manufacturing equipment have been brought in to increase our yield rate and productionefficiency.Upholdingthestrategy of innovation-driventransformation, we asked for betterexecutionin our innovation, production and differentiation to become more competitive and provide products with multi-functions, high added value and high quality.
The continuous recovery of the global small home appliance markets and the fast growing domestic market are expected to boost demandfor smallhome appliances.Through beingmoreintimatewith customersandcost leadership,wecreatemarket demandby developingsmart-homeandlow-carbonproducts,whicheffectivelyexpandsourmarketshareandstrengthenourprofitability.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 2.YoYchangesinmajorfinancialdata
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|+/-%|Mainreasonsforchanges|
|Operatingrevenues|869,683,758.68|798,108,689.27|8.97||
|Operatingcosts|739,507,468.93|662,817,165.10|11.57||
|Taxesandsurtaxes|5,695,363.61|2,975,879.16|91.38|Reclassificationduetothepolicyofreplacingbusinesstaxwithvalueaddedtax|
|Sellingexpenses|30,129,026.59|40,742,161.54|-26.05||
|Administrativeexpenses|74,782,758.93|80,750,640.07|-7.39||
|Financialcosts|9,184,381.52|-9,966,312.52|192.15|Unrealizedassessedexchangelosses|
|Assetimpairmentlosses|64,439.57|-760,811.14|108.47|Reversalofbad-debtprovisionduetorecoveryofrentinthesameperiodoflastyear|
|Gainsonfairvaluechanges|1,881,750.00|5,645,050.00|-66.67|Decreased assessed gains on forward forexcontracts|
|Investmentgains|1,724,730.14|-4,434,437.95|138.89|Increased gains on delivered forward forexdealsandwealthmanagementinstruments|
|Non-businessincome|3,353,082.90|4,349,049.40|-22.90|Decreaseingovernmentalsubsidy|
|Non-businessexpenses|298,400.08|61,724.97|383.44|Lossesonretirementoffixedassetsincreased|
|Incometaxexpenses|3,416,067.76|2,757,325.93|23.89||
|R&Dinput|36,181,239.58|36,526,821.94|-0.95||
|Netprofit|13,565,414.73|24,290,577.61|-44.15|The prices of raw materials went up, whichoffset thegrossprofit marginontheincreasedoperating revenues, and the foreign exchangegainsdropped|
|Netcashflowsfromoperatingactivities|-57,511,295.96|-60,172,006.29|4.42||
|Netcashflowsfrominvestingactivities|-508,940,750.86|-279,556,638.97|-82.05|Increasedoutflowsofrestrictedtermdeposits|
|Netcashflowsfromfinancingactivities|100,706,644.87|37,283,764.50|170.11|Increasedexportinvoicefinancingforwealthmanagementpurposes|
|Netincreaseincashandcashequivalents|-474,256,524.44|-295,890,034.04|-60.28|Increasedoutflowsofrestrictedtermdeposits|

MajorchangestotheprofitstructureorsourcesoftheCompanyduringtheReportingPeriod:
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.□Applicable√Notapplicable
Nosuchcases.
3.Breakdownofmainbusiness
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Item|Operatingrevenues|Operatingcosts|Grossprofitrate(%)|Increase/decreaseofoperatingrevenuesoversameperiodoflastyear(%)|Increase/decreaseofoperatingcostsoversameperiodoflastyear(%)|Increase/decreaseofgrossprofitrateoversameperiodoflastyear(%)|
|Classifiedbyindustry|||||||
|Small home appliancemanufacture|840,312,489.24|723,287,830.92|13.93%|9.04%|10.73%|-1.31%|
|Total|840,312,489.24|723,287,830.92|13.93%|9.04%|10.73%|-1.31%|
|Classifiedbyproduct|||||||
|Cookingtools|540,344,218.91|447,620,553.66|17.16%|7.70%|7.69%|0.01%|
|Houseworkhelpers|224,015,274.54|210,893,707.03|5.86%|17.04%|23.28%|-4.77%|
|Tea/Coffeemakers|73,801,696.03|63,193,074.09|14.37%|15.26%|18.88%|-2.61%|
|Others|2,151,299.76|1,580,496.14|26.53%|-84.06%|-88.13%|25.21%|
|Total|840,312,489.24|723,287,830.92|13.93%|9.04%|10.73%|-1.31%|
|Classifiedbyregion|||||||
|America|302,346,479.45|258,816,457.63|14.40%|9.72%|8.91%|0.64%|
|Asia|180,411,171.53|154,430,965.58|14.40%|-13.62%|-12.60%|-1.00%|
|Europe|290,524,069.58|256,421,924.47|11.74%|23.09%|29.43%|-4.32%|
|Australia|57,656,779.71|46,215,616.95|19.84%|27.88%|26.85%|0.65%|
|Africa|9,373,988.97|7,402,866.29|21.03%|82.65%|71.50%|5.13%|
|Total|840,312,489.24|723,287,830.92|13.93%|9.04%|10.73%|-1.31%|

 III. Analysisof non-corebusiness
√Applicable□Notapplicable
Unit:RMBYuan
||||||
|-|-|-|-|-|
|Items|Amount|Ratiotothetotalprofitsamount(%)|Notesofthecauses|Recurringornot|
|Assetimpairmentlosses|64,439.57|0.38||No|
|Gainsonfairvaluechanges|1,881,750.00|11.08|Forwardforexcontracts|No|
|Investmentincome|1,724,730.14|10.16|Forwardforexcontractsandwealthmanagementinstruments|No|
|Non-businessincome|3,353,082.90|19.75|Assetdisposalandgovernmentsubsidies|No|
|Non-businessexpenses|298,400.08|1.76||No|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. IV.Assets andliabilities
1.Significantchangesinassetcomposition
Unit:RMBYuan
||||||||
|-|-|-|-|-|-|-|
|Item|AtendofReportingPeriod||Atendofsameperiodoflastyear||Changeinpercentage(%)|Reasonforanysignificantchange|
||Amount|Asapercentageoftotalassets(%)|Amount|Asapercentageoftotalassets(%)|||
|Monetaryfunds|610,480,711.93|36.87|554,281,467.86|36.75|0.12||
|Financialassetsatfairvaluethroughprofit/loss|1,881,750.00|0.11|27,300.00|0.00|0.11|Assessedgainsonforwardforexcontracts|
|Notesreceivable|990,000.00|0.06|3,388,917.00|0.22|-0.16|Maturityofnotesreceivableatbeginningoftheyear|
|Accountsreceivable|242,579,524.63|14.65|212,505,897.39|14.09|0.56||
|Prepayments|24,784,622.14|1.50|12,002,139.01|0.80|0.70|Increasedrentprepaymentsforplants|
|Otherreceivables|37,688,979.32|2.28|25,608,750.65|1.70|0.58|Increasedexporttaxrebatesreceivable|
|Inventories|190,784,550.61|11.52|201,107,063.72|13.34|-1.82||
|Long-termequityinvestments|0.00|0.00|0.00|0.00|0.00||
|Investmentproperty|39,431,574.89|2.38|43,851,356.22|2.91|-0.53||
|Fixedassets|175,644,211.63|10.61|179,319,453.10|11.89|-1.28||
|Constructioninprogress|495,974.59|0.03|396,547.71|0.03|0.00||
|Intangibleassets|28,363,603.13|1.71|16,522,261.34|1.10|0.61|Increasedinputtosoftwareproducts|
|Othernon-currentassets|3,052,537.50|0.18|1,991,186.65|0.13|0.05|Increasedprepaymentsforequipment|
|Short-termborrowings|125,326,400.00|7.57|70,831,265.19|4.70|2.87|Increasedexportinvoicefinancingforwealthmanagementpurposes|
|Long-termborrowings|0.00|0.00|0.00|0.00|0.00||
|Financialliabilitiesatfairvaluethroughprofit/loss|0.00|0.00|2,844,750.00|0.19|-0.19|Assessedlossesonforwardforexcontractsinsameperiodoflastyear|
|Notespayable|10,517,009.49|0.64|19,566,032.81|1.30|-0.66|Maturityofbanker’sacceptancebillsatbeginningoftheyear|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||||||
|-|-|-|-|-|-|-|
|Item|AtendofReportingPeriod||Atendofsameperiodoflastyear||Changeinpercentage(%)|Reasonforanysignificantchange|
||Amount|Asapercentageoftotalassets(%)|Amount|Asapercentageoftotalassets(%)|||
|Long-termpayrollpayable|250,205.83|0.02|0.00|0.00|0.02|Increasedstaff|
|Deferredincometaxliabilities|1,026,173.00|0.06|251,973.01|0.02|0.04|Increaseinrecognizedassessedgainsonforwardforexcontracts|
|Othercomprehensiveincome|7,225,639.61|0.44|4,773,167.33|0.32|0.12|Increasedincomefromforeign-currencytranslationdifferences|

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|0.00|1,881,750.00|0.00|0.00|436,602,800.00|281,728,600.00|154,874,200.00|
|3. Available-for-salefinancialassets|40,000.00|0.00|0.00|0.00|0.00|0.00|40,000.00|
|Subtotal of financialassets|40,000.00|1,881,750.00|0.00|0.00|436,602,800.00|281,728,600.00|154,914,200.00|
|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|40,000.00|1,881,750.00|0.00|0.00|436,602,800.00|281,728,600.00|154,914,200.00|
|Financialliabilities|0.00|0.00|0.00|0.00|0.00|0.00|0.00|

DidanysignificantchangesoccurtothemeasurementattributesoftheCompany’smainassetsintheReportingPeriod?
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.□Yes√No
3.RestrictedassetrightsasoftheendofthisReportingPeriod
□Applicable√Notapplicable
V. Investments made
1.Totalinvestmentsmade
√Applicable□Notapplicable
Unit:RMBYuan
||||
|-|-|-|
|InvestmentsmadeinReportingPeriod|Investmentsmadeinsameperiodoflastyear|+/-%|
|11,422,960.00|6,278,499.22|81.94|

 2.SignificantequityinvestmentsmadeinthisReportingPeriod
□Applicable√Notapplicable
3.Significantnon-equityinvestmentsongoinginthisReportingPeriod
□Applicable√Notapplicable
4.Financialinvestments
(1)Securitiesinvestments
□Applicable√Notapplicable
2017Semi-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|43,660.28|2017-01-01|2017-06-30|0.00|43,660.28|28,172.86|0.00|15,487.42|25.88|245.79|
|Total||||43,660.28|||0.00|43,660.28|28,172.86|0.00|15,487.42|25.88|245.79|
|Capitalsourceforderivativeinvestment||||Self-ownedfunds||||||||||
|Lawsuits||||N/A||||||||||
|Disclosure date of the board announcement approvingthederivativeInvestment||||2013-3-12||||||||||
|Disclosure date of the general meeting announcementapprovingthederivativeInvestment||||||||||||||

2017Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Operator|Relation|Related-partytransactionornot|Typeofderivativeinvestment|Initialinvestmentamount|Beginningdate|Endingdate|Openinginvestmentamount|PurchasedamountintheReportingPeriod|SoldamountintheReportingPeriod|Impairmentprovision|Closinginvestmentamount|ProportionoftheclosinginvestmentamountintheCompany’sclosingnetassets(%)|Actualgain/lossintheReportingPeriod|
|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.TheCompanyshall not conductcomplex derivative tradingabove the actualoperationneedsand shall notspeculate inderivativetrading withhedgingasan excuse.TheoverallcontractualamountforriskavoidanceoftheCompanyshallnotexceedthesummationofthenetriskexposureoftheexistingassetsandliabilitiesandthenetriskexposureofassetsandliabilitiesarisingfromtheoperationoftheCompanyinthecomingyear.(2)Staffrequirements:Personneltakingpartintheinvestmentshallallfullyunderstandtherisksofderivativeinvestmentandstrictlyexecutethebusinessoperationandriskmanagementmechanismsforderivativeinvestment.(3) Operation standardization: Before making a derivative investment, the Company shall rationally equip itself with professional personnel for investment decision-making,businessoperation,riskcontrol, etc.It shall alsoinquireandcompareamongvariousmarketsandproducts.Besides, itshall strictlycontrolthevarietyandsize ofderivativeinvestmentandtrytochoosederivativetradingonexchangeasmuchaspossible.(4)Periodicevaluation:Derivativeinvestmentsshallbeevaluatedatleasttwiceforamonthandtheevaluationreportshallbesenttoahigh-rankingexecutiveauthorizedbytheBoardofDirectors.AndaderivativeinvestmentreportshallbesenttotheBoardofDirectorsannually.TheCompanyanditssubsidiariesonlyneedtosubmittotheBoardofDirectorsofthesubsidiaries.(5)Losslimit:Theinvestmentlossonasinglederivativeandalltheinvestmentlossshallnotexceed20%ofthetotalinvestmentamount.(6)Auditsystem:Theauditdepartmentauditsderivativeproducttradingperiodicallyandsubmitsauditreportstorelevantunits.||||||||||
|Changes in market price or fair value of derivativesinvestedinthisReportingPeriod(specificmethodsusedandrelevantassumptionandparametersettingsshallbedisclosedforanalysisoffairvalueofderivatives)||||(1)GainsondeliveredderivativesintheReportingPeriodwereRMB0.5761million,andassessedgainsononthoseundeliveredwereRMB1.8818million.(2)Theformercontractedbankprovidedmonthlysheetsofestimatedexchangeratesfortheunduecontractedforwardexchangesonthelasttradingdayofthemonth.(3)Theprofitandlossfromfairvaluechangesofthederivativewasconfirmedaccordingtothedifferencebetweenthecontractedamountunduebythemonth*theestimatedexchangerateandthecurrencyamountwhenboughtin.||||||||||
|Significant changes in the Company’s accountingpolicies and specific accounting principles forderivativesinthisReportingPeriodascomparedtothepriorperiod||||Nosignificantchanges||||||||||

2017Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Operator|Relation|Related-partytransactionornot|Typeofderivativeinvestment|Initialinvestmentamount|Beginningdate|Endingdate|Openinginvestmentamount|PurchasedamountintheReportingPeriod|SoldamountintheReportingPeriod|Impairmentprovision|Closinginvestmentamount|ProportionoftheclosinginvestmentamountintheCompany’sclosingnetassets(%)|Actualgain/lossintheReportingPeriod|
|Special opinions expressed by independent directorsconcerning the Company’s derivatives investment andriskcontrol||||TheCompanyhascarriedoutastrictinternalassessmentforthefinancialderivativebusinessandhasestablishedacorrespondingsupervisionmechanism.WeareoftheopinionthatthefinancialderivativebusinessconductedbytheCompanyisfairlynecessaryinitsroutineoperationandisincompliancewithrelevantlawsandregulations,withtheriskscontrollable.||||||||||

VI. Saleofmajor assets and equityinterests
1.Saleofmajorassets
□Applicable√Notapplicable
2.Saleofmajorequityinterests
□Applicable√Notapplicable
VII. Maincontrolled andjointstock companies
Mainsubsidiariesandjointstockcompanies
Unit:RMBYuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Companyname|RelationshipwiththeCompany|Mainbusinessscope|Registeredcapital|Totalassets|Netassets|Operatingrevenues|Operatingprofit|Netprofit|
|Tsann Kuen (Zhangzhou) Enterprise Co.,Ltd.|Controlledsubsidiary|Small home appliancemanufacturing|USD160million|1,947,654,218.11|1,270,264,176.96|819,506,110.82|31,402,575.92|31,148,900.00|
|Tsann Kuen China (Shanghai) EnterpriseCo.,Ltd.|Subsidiary of a controlledsubsidiary|Small home appliancemanufacturing|USD40million|87,707,717.31|84,433,859.35|429,020.81|-3,353,119.16|-3,055,828.76|

2017Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|Companyname|RelationshipwiththeCompany|Mainbusinessscope|Registeredcapital|Totalassets|Netassets|Operatingrevenues|Operatingprofit|Netprofit|
|Pt.StarComgisticIndonesia|Subsidiary of a controlledsubsidiary|Small home appliancemanufacturing|USD30million|135,424,919.89|93,219,272.20|49,326,459.51|-6,766,090.41|-3,823,567.47|
|TsannkuenEdgeIntelligenceCo.,Ltd.|Subsidiary of a controlledsubsidiary|Industrialdesign|NTD200 million|12,201,898.36|7,079,147.28|3,528,954.02|-7,888,834.34|-7,849,662.99|

SubsidiariesobtainedordisposedinthisReportingPeriod
□Applicable√Notapplicable
VIII. Structured bodiescontrolled by theCompany
□Applicable√Notapplicable
IX. Predict theoperating results ofJanuary-September 2017
WarningofpossiblelossorconsiderableYoYchangeoftheaccumulatednet profit madeduringtheperiod-begintotheendofthenextReportingPeriodaccordingtoprediction,as wellas explanationsonthereasons:
□Applicable√Notapplicable
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. X. RisksfacingtheCompany andcountermeasures
1.International
Influencedbytheslowly recoveryoftheglobaleconomy,theenlargeoftheexchangeratefluctuation,theenhanceofthedomestic comprehensive cost, and with global inflation pressure that cannot be eased in the short run and more and more non-economic obstacles from western countries in their trading with China, foreign trade of China will face, without doubt, a more complicated environmentandmoreseriousconflictsin2017.
Forprotectingthedomesticnewly-developingelectrical homeappliancesmanufacturingenterprises,partsofthecountriesbegan to adopttradeprotectionismandbegantosuppressthedomesticelectricalhomeappliancesforthemethodssuchasimprovetheimport tariff.Theoutburstoftheglobalfinancialcrisisledtotheriseoftheinternationaltradeprotection,theaggravationofthetariffbarrier andthenon-tariffbarrierespeciallysuchasthetechnologystandard,Intellectualpropertyrightprotectionandanti-dumpingetc., as wellastheexportofthedomesticelectricalhomeapplianceencounteredmoreandmorethreatenstariffannon-tariffbarrierwiththe morecomplicatedinternationalenvironmentfacedwiththeelectricalhomeappliances.
As for the risks of the culture difference: the overseas expansion of the electrical home appliances desiderate the adjustment of cultureandproducts;theculturedifferencebetweenChinaandothercountriesaffectthedifferenceprocessofthesalesprocessofthe electricalhomeappliancesatdifferentdegreesanddifferentaspects,whilethefusionofthecultureandtheadaptationoftheproducts arethetwokeyelementsofthesuccessoftheenterprisesandtoblendintheculturalenvironmentofdifferentregionsaswellasto reducethecostexpensesbroughtbytheunsteadyelementsasmuchaspossibleistheimportantcontentoftheoverseasexpansionof theenterprises.
2.Domestic
Y2017willbethekeyyearoftheentirelypromotionofthedomesticgreatreformandadjustmentandtheyearthatthenewnormalcy ofdomesticeconomyentirelystepintotheCrucialPeriod.Thedomesticandoverseaenvironmentisstillofanfractuosityaswellas the economy development is still facing with many difficulties and challenges. However, the basic conditions of the domestic economydevelopmentisstillcomparativegoodthatwillstillprovidefavorablemarketenvironmentanddevelopmentspaceforthe electricalhomeappliances.
In recent years, the domestic per capita income grew steadily with the rise range of the price of commodities declined, and at the sametimeinfluencedbytheinternalandexternalforcefactorssuchastheChineseshoppingspree,whichstimulatedtheconsuming intention boosted constantly; as the constantly deepen of the domestic economy transformation, the future economy will realize healthy and sustainable growth, which will depend on the consumption demands of each Chinese customers as the consumption drivingforceofthedomesticeconomyhasbeenstrengthening.
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,therisingcostsofrawmaterialshasalsoposedchallengesforenterprises’developmentinChina.
3.Exchangeratefluctuation
TheCompany’s products were export-oriented, so the influence of the exchange rate fluctuation on the Company was rather big.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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.
2017Semi-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|
|The2016AnnualMeetingofShareholders|AnnualMeetingofShareholders|44.82%|04/06/2017|04/07/2017|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 onsharereform|||||||
|Commitment in theacquisition reportor the report onequitychanges|||||||
|Commitmentsmadeupon the assets|||||||

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||||||
|-|-|-|-|-|-|-|
|Commitment|Commitmentmaker|Commitmenttype|Contents|Timeofmakingcommitment|Periodofcommitment|Fulfillment|
|replacement|||||||
|Commitmentsmadeupon first issuanceorrefinance|||||||
|Commitment onequityincentive|||||||
|Other commitmentsmade to minorityshareholders|FILLMANINVESTMENTSLIMITED|Commitmentonshareholdingincrease|BasedontheconfidenceonthecontinuousandstabledevelopmentoftheCompany,itcommittedtoincreasetheshareholdingiftheCompany’sstockpricelowerthanHKD2.40pershareaftertheimplementationofthesharescontractionandtradingresumption,anditwouldincreasenomorethan2%shares(i.e.3.7078millionshares)ofthetotalsharesissuedbytheCompanywithinoneyearsincethedateofinitialshareholdingincrease.Iftheplanonincreasingholding2%sharesofthetotalsharesiscompleted,ifthestockpricehasn’treachedthetargetprice,itwillperformrelevantapprovalprocedures,andproposetoCSRConcontinuousimplementationofshareholdingincreasebyexemptionofoffering.|12/28/2012|Long-termeffective|TheCompany’sstocksresumedtradingonDecember31,2012,buttheCompany’sstockpricehasn’tmettheconditionforshareholdingincreasesincethedateoftradingresumption,FILLMANInvestmentLimitedhasn’timplementedtheshareholdingincreaseplan.|
|Executedontimeornot|Yes||||||

IV.Engagement anddisengagementof CPAs firm
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Whetherthesemi-annualfinancialreporthasbeenaudited
□Yes√No
Thesemi-annualfinancialreportoftheCompanyhasnoitbeenaudited
V. Notes for “unstandard audit reports” of CPAs firm during the Reporting Period by board ofdirectors andsupervisory board
□Applicable√Notapplicable
VI. Notes for the related information of “unstandard audit reports” last year by board of directors
□Applicable√Notapplicable
VII. Bankruptcy andrestructuring
□Applicable√Notapplicable
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|
|ThecaseofthecontrollingsubsidiaryZhangzhouTsannKuenEnterpriseCo.,Ltd.suedJapanUCCUeshimaCoffeeCo.,Ltd.(contractdisputes)|1,770.26|No|Zhangzhou Tsann Kenhad submitted theindictment to the localjudicatory in Kobe, Japanon May 9, 2014; recentlyisinthetrial|Hadnoresult|No|No|No|
|TheleasecontractdefaultcaseoftheCompanysuedXiamenTianyuanAssetsManagementCo.,Ltd.aboutthearrearsof|29.43|No|XiamenHuliPeople’sCourthadputonrecordinOctober13,2014.TheCourtmadethefirst|XiamenHuliPeople’sCourtcombinedthesefourcasesfortrialonDecember29,2015.thefirstinstanceof|No|No|No|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|Basicsituationoflawsuit(arbitration)|Lawsuitamount(RMBTenthousand)|Whetherformintoestimatedliabilities|Processoflawsuit(arbitration)|Trialresultsandinfluencesoflawsuit(arbitration)|Situationofexecutionofjudgmentoflawsuit(arbitration)|Disclosuredate|Disclosureindex|
|rent(No.23ofHuarongRd,HuliDistrict,Xiamen)|||instanceofjudgementonFeburary2,2015,butbothtwopartiesrefusedtothedecisionandlodgedanappeal.XiamenIntermediatePeople’sCourtcancelledtheoriginaljudgementandremandedfornewtrialonOctober13,2015.|judgementofXiamenHuliPeople’sCourtwasmadeonMay30,2017:Tianyuan(Xiamen)AssetsManagementCo.,Ltd.shouldpaythelatepaymentpenalty.Whetherbothpartiestoappealhasnotconfirmedyet.||||
|The lease contract default caseof the Company sued XiamenTianyuan Assets ManagementCo., Ltd. about the arrears ofrent (North Building of theFactory, No. 88 of XinglongRd,HuliDistrict,Xiamen)|58.46||XiamenHuliPeople’sCourthadputonrecordonApril28,2015|||||
|The lease contract default caseof the Company sued XiamenTianyuan Assets ManagementCo., Ltd. about the arrears ofrent (Southeast Corner, No. 88of Xinglong Rd, Huli District,Xiamen)|8.32||XiamenHuliPeople’sCourthadputonrecordonApril28,2015|||||
|The lease contract default caseof the Company sued XiamenTianyuan Assets ManagementCo., Ltd. about the arrears ofrent (Northwest Corner, No. 88of Xinglong Rd, Huli District,Xiamen)|18.61||XiamenHuliPeople’sCourthadputonrecordonApril28,2015.|||||
|TheeliminatingnuisancecaseofthecontrollingsubsidiaryTsannKuenChina(Shanghai)EnterpriseCo.,Ltdsued|0|No|ShanghaiJiadingPeople’sCourthadputonrecordonOctober28,2015.|The first instance ofjudgement from ShanghaiJiading People’s Court was|No|No|No|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|Basicsituationoflawsuit(arbitration)|Lawsuitamount(RMBTenthousand)|Whetherformintoestimatedliabilities|Processoflawsuit(arbitration)|Trialresultsandinfluencesoflawsuit(arbitration)|Situationofexecutionofjudgmentoflawsuit(arbitration)|Disclosuredate|Disclosureindex|
|ShanghaiLujiaFruitsalesCo.,Ltd.||||received on November 23,2016: supporting the appealof Shanghai Tsann Kuen,Lujia Fruit sales Co., Ltdshould stop the acts ofinfringement at once within10 days from the date of thejudgment come into effectand stop the construction ,restoretheoriginalsite.Court judgement fromShanghai the SecondIntermediate People’s CourtwasreceivedonJuly4,2017:upheldthejudgement.||||
|ThedefaultonaloandisputescaseofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,LtdsuedMTNProducts,Inc./WaterSolutions （HongKong）Ltd.|1,429.40|No|SUPERIORCOURTOFCALIFORNIACOUNTYOFLOSANGELEShadputonrecordonNovember23,2016.|Hadnoresult|No|No|No|
|ThecontractdisputescaseofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,LtdsuedPhilipslighting(China)investmentCo.Ltd.|250|No|LonghaiPeople’sCourthadputonrecordonNovember23,2016.|Hadnoresult|No|No|No|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|Basicsituationoflawsuit(arbitration)|Lawsuitamount(RMBTenthousand)|Whetherformintoestimatedliabilities|Processoflawsuit(arbitration)|Trialresultsandinfluencesoflawsuit(arbitration)|Situationofexecutionofjudgmentoflawsuit(arbitration)|Disclosuredate|Disclosureindex|
|ThecontractdisputescaseofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,LtdsuedXindaMotorCo.,LtdandBoluoCountyLianyuanIndustrialTechnologyCo.,Ltd.|333|No|ZhangzhouIntermediatePeople’sCourthadputonrecordonJanuary18,2017.|Hadnoresult|No|No|No|
|TheleasecontractdisputescaseofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,LtdsuedXiamenSanyiliEnergy-savingMaterialsCo.,Ltd.|46|No|LonghaiPeople’sCourthadputonrecordonApril13,2017.|Hadnoresult|No|No|No|
|Thetotal7patentinfringementcasesofthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,LtdsuedXiamenFukunHouseholdApplianceTechnologyCo.,Ltd(patentnumber:ZL200710009700.7、ZL200820102024.8、ZL200920137778.1、ZL201320822528.8、ZL200920308936.5、ZL201030287767.X、ZL201330112310.9)|70|No|XiamenIntermediatePeople’sCourthadputonrecordonMay4.2017.|Hadnoresult|No|No|No|
|ThecontractdisputescaseofXiamenYixinIndustrialandTradeCo.,LtdsuedthecontrollingsubsidiaryTsannKuenChina(Zhangzhou)EnterpriseCo.,Ltd.|95.6||HoldingahearingonMay19,2017|Hadnoresult|No|No|No|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. IX.Punishments andrectifications
√Applicable□Notapplicable
||||||||
|-|-|-|-|-|-|-|
|Name|Type|Reasons|TypeofInvestigationandPunishment|Conclusion|DisclosureDate|DisclosureIndex|
|TsannKuen(Zhangzhou)EnterpriseCo.,Ltd.|Corporation|OnMarch15,2016,the“3.15”eveningpartyheldbyCCTVthatreportedaproductoftheCompanyontheunqualifiedsituationamongthestateadministrationofqualitysupervisionandspotcheck.|Environment-protectionBureau,SafetySupervisionDepartment,TaxDepartmentandotheradministrativedepartmentshaverenderedsignificantadministrativepenalties.|RectificationWorkswerecompletedwithoutanydisputeinrelevantadministrativepenalties;nohearingwasrequestedandsuchpenaltywasaccepted.|01/20/2017|www.cninfo.com.cn|

Detailsaboutrectification:
√Applicable□Notapplicable
OnMarch15,2016,the“3.15”eveningpartyheldbyCCTVthatreportedaproductoftheCompany(model:TSK-2131GPN)onthe unqualified situation among the state administration of quality supervision and spot check. Owning to the case, the stock of the Company suspended for a day on March 16, 2016 and after the “3.15”evening party, the Company immediately set up the Emergencyprojectworkinggroupatthatnightaswellasexecutedthefollow-upproductrecallandtherectificationworkaccording to the requirements of the government quality inspection department. Please see details disclosed by the Company on theAnnouncementontheTreatmentoftheProductQualityProblemandtheResumptionoftheCompany’sStockonSecuritiesTimes, HongKongTaKungPaoandwww.cninfo.com.cnonMarch17,2016.
On January 18, 2017, thecompany’s controlling subsidiary---Zhangzhou Tsann Kuen received Administrative Penalty Notice (ZT)ZJFG[2017] NO. 1 issued by Zhangzhou Bureau of Quality and Technical Supervision, and the following administrative penalties shall be executed: 1. Unqualified electric ovens and toasters (Model: TSK-2131GPN Love Teppanyaki) shall not be produced and sold; 2. 989 pieces ofuUnqualified electric ovens and toasters (Model: TSK-2131GPN Love Teppanyaki) illegally manufacturedandsoldshallallbeconfiscated;3.Thepenaltydoublingthevalueofgoods(RMB183,200)shallbepaid;4.Illegal gains amounting to RMB 804.83 shall be confiscated. However, the total fines shall be RMB ONE HUNDRED AND EIGHTY FOUR THOUSANDANDFOURYUANEIGHT JIAOAND TREEFEN(¥184,004.83).ZhanzhouTsannKuenhadnodisputein relevant administrative penalties executed by Zhangzhou Bureau of Quality and Technical Supervision, requested no hearing and accepted all penalties. Please see details disclosed by the company on the Announcement on theSubsidiary’s Receiving of AdministrativePenaltyNoticeissuedbyZhangzhouBureauofQualityandTechnicalSupervisiononSecuritiesTimes,HongKong TaKungPaoandwww.cninfo.com.cnonJanuary20,2017.
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
2017Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. XII. Significantrelated-party transactions
1.Related-party transactions relevant to routineoperation
√Applicable□Notapplicable
Unit:RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Relatedparty|Relationship|Typeoftherelated-partytransaction|Contentoftherelated-partytransaction|Pricingprincipleoftherelated-partytransaction|Transactionprice|Transactionamount|Proportioninsamekindoftransactions(%)|Approvedtransactionquota|Whetherexceededtheapprovedquota|Settlementmethodoftherelated-partytransaction|Similarmarketprice|Disclosuredate|Disclosureindex|
|ThermasterElectronic(Xiamen)Ltd.|Company directlycontrolled by actualcontroller and theirclose familymembers|Purchaseofcommoditiesfromtherelatedparty|Purchaseofrawparts|Basedonthemarketpriceandbothpartiesabidebythefairandreasonableprinciple|N/A|16,738,518.44|2.85%|40,000,000|No|Settledaccordingtothecontractsignedbybothparties|N/A|03/14/2017|www.cninfo.com.cn|
|Tsann KuenEnterprise Co.,Ltd.|Underthecontrolofthesameactualcontroller|Purchaseofcommoditiesfromtherelatedparty|Purchaseofrawparts|||19,035.91|0.00%|100,000|No|||||
|GoldMiningChainCo.,Ltd|Underthecontrolofthesameactualcontroller|Purchaseofcommoditiesfromtherelatedparty|Mealticket|||392.98|0.00%|0.00|Yes|||||
|StarComgisticCapitalCo.,Ltd|Ultimatecontrollingcompany|Purchaseofcommoditiesfromtherelatedparty|Purchaseofrawparts|||2,876.99|0.00%|40,000|No|||||
|StarComgisticCapitalCo.,Ltd|Ultimatecontrollingcompany|Salesofcommoditiestotherelatedparty|Salesofpartsandfinishedproducts|||7,922,076.14|0.91%|16,320,000|No|||||
|TsannKuenEnterpriseCo.,Ltd.|Underthecontrolofthesameactualcontroller|Salesofcommoditiestotherelatedparty|Salesofpartsandfinishedproducts|||570.82|0.00%|50,000.00|No|||||

2017Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Relatedparty|Relationship|Typeoftherelated-partytransaction|Contentoftherelated-partytransaction|Pricingprincipleoftherelated-partytransaction|Transactionprice|Transactionamount|Proportioninsamekindoftransactions(%)|Approvedtransactionquota|Whetherexceededtheapprovedquota|Settlementmethodoftherelated-partytransaction|Similarmarketprice|Disclosuredate|Disclosureindex|
|GoldMiningChainCo.,Ltd|Underthecontrolofthesameactualcontroller|Salesofcommoditiestotherelatedparty|Salesofpartsandfinishedproducts|||85,749.96|0.01%|500,000.00|No|||||
|WuWhaMaRestaurantManagementCo.,Ltd.inXiamen|Investeeoftheultimatecontrollingcompany|Provision ofservice for therelatedparty|Rent|||32,760.00|0.13%|70,000.00|No|||||
|StarComgisticCapitalCo.,Ltd|Ultimatecontrollingcompany|Acceptanceoflaborservicefortherelatedparty|Rent|||691,394.42|2.77%|1,320,000.00|No|||||
|StarInternationalTravalAgencyCo.,Ltd.|Underthesameultimatecontroller|Acceptanceofservicefortherelatedparty|Planeticketfee|||419,093.08|31.99%|950,000.00|No|||||
|KuaisanElectricBusinessServiceCo.,Ltd|Underthecontrolofthesameactualcontroller|Acceptanceoflaborservicefortherelatedparty|Serviceincome|||34,565.61|46.76%|50,000.00|No|||||
|StarComgisticCapitalCo.,Ltd|Ultimatecontrollingcompany|Acceptanceofservicefortherelatedparty|Personnelrecruitmentfee|||6,211.35|8.40%|0.00|Yes|||||
|TsannKuenEnterpriseCo.,Ltd.|Underthecontrolofthesameactualcontroller|Provisionoflaborservicefortherelatedparty|Managementserviceincome|||33,151.76|44.84%|100,000.00|No|||||
|Total||||||25,986,397.46||59,500,000||||||
|Detailsoflargeamountofsalesreturns||||N/A||||||||||
|As for the prediction on the total amount of routine related-partytransactions to be occurred in the reporting period by relevant types, theactualperformanceinthereportingperiod||||TransactionamountwastheestimatedamountontheAnnouncementaboutEstimatedRoutineRelated-partyTransactionsin2017simultaneouslydisclosedonSecuritiesTimes,HongKongTaKungPaoandhttp://www.cninfo.com.cnonMarch14,2017.AnnouncementaboutEstimatedRoutineRelated-partyTransactionsin2017wasnotrevisedduetothebusinessneedsandnodisclosureofrelated-partytransactionswithinsignificantamounts.||||||||||
|Reason for significant difference between the transaction price and themarketprice||||N/A||||||||||

2017Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 2.Related-partytransactionsregardingpurchaseandsalesofassetsorequity
□Applicable√Notapplicable
3.Related-partytransitionswithjointinvestments
□Applicable√Notapplicable
4.Significantcreditsandliabilitieswithrelatedparties
√Applicable□Notapplicable
Whetherexistsnon-operatingcreditsandliabilitieswithrelatedparties?
□Yes√No
5.Othersignificantrelated-partytransactions
√Applicable□Notapplicable
Inordertoenrichtheholdingsub-subsidiaryPT.STARCOMGISTICINDONESIA[referredtoas“SCI”,thewholly-ownedsub-subsidiaryoftheholdingsubsidiaryTsannKuen(Zhangzhou)EnterpriseCo.,Ltd(theCompanyholds75%)oftheCompany,SCIplannedtoborrowforeigndebtlessthan2millionUSDintotalfromtheCompnay’soverseascontrollingshareholderSion GlobalCo.,Ltd.(referredtoas“ZGQQ”).TheCompanyconvenedBoardofDirectorsResolutionthatagreedtoborrowedforeigndebtlessthan2millionUSDintotalfromoverseasrelated partyZGQQbySCIonMarch12,2017.
Relatedpartytransactionsinterimreportdisclosurewebsite
||||
|-|-|-|
|Nameofinterimreport|Disclosuredare|Nameofthewebsite|
|AnnouncementaboutHoldingSub-subsidiaryborrowingForeignDebtandrelated-partytransactions|03/14/2017|www.cninfo.com.cn|

TheCompanyhadnotothersignificantrelated-partytransactionsduringtheReportingperiod.
XIII. OccupationoftheCompany’s funds fornon-operating purposes bythecontrolling shareholderandits related parties
□Applicable√Notapplicable
XIV.Significantcontracts andexecution
1.Particularsabouttrusteeship,contractandlease
2017Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (1)Trust
□Applicable√Notapplicable
(2)Contract
□Applicable√Notapplicable
(3)Lease
√Applicable□Notapplicable
Notesoftheleasing
Explanationoflease
The Proposal on Lease of Property& Related-party Transactions was reviewed and approved at the Fourth Session of the Board of Directors for 2011 datedAugust 13, 2011 and the FirstSpecialShareholders’GeneralMeetingfor2011datedSeptember16,2011,fordetails,pleaserefertotheAnnouncementonLeaseofProperty&Related-partyTransactions,Announcementon ResolutionsMadeattheFourthSessionoftheBoardofDirectorsfor 2011andAnnouncementonResolutionsMadeattheFirstSpecialShareholders’GeneralMeetingfor2011disclosedon SecuritiesTimes,HongKongTaKungPaoandhttp://www.cninfo.com.cn.
TheProposalonChangeofPropertyLeasingAgreement&Related-partyTransactionwasreviewedandapprovedattheSecondSpecialSessionoftheBoardofDirectorsfor2012datedJune 30, 2012 and the Second SpecialShareholders’General Meeting for 2012 dated July 24, 2012, for details, please refer to theAnnouncement on Change of Property LeasingAgreement& Related-partyTransaction,AnnouncementonResolutionsMadeattheSecondSpecialSessionoftheBoardofDirectorsfor2012andAnnouncementonResolutionsMadeattheSecondSpecialShareholders’GeneralMeetingfor2012disclosedonSecuritiesTimes,HongKongTaKungPaoandhttp://www.cninfo.com.cn.;
TheproposalonLeaseofPropertywasreceivedandapprovedattheFirstSessionoftheBoardofDirectorsfor2013datedJune26,2013andfordetails,pleaserefertotheAnnouncementon Lease of Property, Announcement on Resolutions Made at the First Session of the Board of Directors for 2013 disclosed on Securities Times, Hong Kong Ta Kung Pao and http://www.cninfo.com.cn.
Theleasewhoseprofitsreachingmorethan10%ofthetotalprofitsoftheCompanyintheReportingPeriod.
√Applicable□Notapplicable
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|1,700.40|07/01/2013|09/30/2018|443.56|Accordingtothecontractprice|40.08%|No|N/A|

2.Significantguarantees
□Applicable√Notapplicable
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 3.Othersignificantcontracts
□Applicable√Notapplicable
XV. Socialresponsibilities
1.Targetedmeasurestakentohelppeopleliftthemselvesoutofpoverty
□Applicable√Notapplicable
XVI. Othersignificantevents
□Applicable√Notapplicable
TherewasnosuchsituationduringtheReportingperiod.
XVII. Significantevents of subsidiaries
□Applicable√Notapplicable
2017Semi-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.Restrictedshares|0|0.00%|0|0|0|0|0|0|0.00%|
|1.Sharesheldbythestate||||||||||
|2. Shares held bystate-ownedcorporations||||||||||
|3. Shares held by otherdomesticinvestors||||||||||
|Among which: shares heldbydomesticcorporations||||||||||
|Shares held by domesticindividuals||||||||||
|4. Shares held by foreigninvestors||||||||||
|Among which: Shares heldbyforeigncorporations||||||||||
|Shares held by foreignindividuals||||||||||
|II.Non-restrictedshares|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
□Applicable√Notapplicable
Changeinsharecapital’simpactsonbasicEPSanddilutedEPSinrecentyearandrecentissue,andnetassetspershareattributedto
equityshareholderandfinancialindexetc.
□Applicable√Notapplicable
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Othercontentswasnecessarytothecompanyorthesecuritiesregulatorsrequiredtobedisclosed
□Applicable√Notapplicable
2.Changesinrestrictedshares
□Applicable√Notapplicable
II. Issuance andlistingofsecurities
□Applicable√Notapplicable
III. Total number ofshareholders andtheir shareholdings
Unit:share
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Totalnumberofcommonshareholdersattheperiod-end||17,233|||||Totalnumberofpreferenceshareholderswithresumedvotingrightsattheperiod-end|||0||||
|Particularsaboutsharesheldbycommonshareholderswithashareholdingpercentageover5%orbythetoptencommonshareholdersholdingshares||||||||||||||
|Nameofshareholder|Natureofshareholder||Shareholdingpercentage||Totalsharesheldattheperiod-end|Increase/decreaseduringthereportingperiod||Numberofrestrictedsharesheld|Numberofnon-restrictedsharesheld|||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||5.03%||9,320,780|-1,889,147||0|9,320,780|||N/A|0|
|FILLMANINVESTMENTSLIMITED|Foreigncorporation||2.49%||4,621,596|No change||0|4,621,596|||N/A|0|
|SHENWANHONGYUANSECURITIES(H.K.)LIMITED|Foreigncorporation||2.39%||4,437,015|3,266,964||0|4,437,015|||N/A|0|
|CHINAMERCHANTSSECURITIES(HK)CO.,LTD.|State-ownedcorporation||1.16%||2,144,050|125,300||0|2,144,050|||N/A|0|
|CHENYONGQUAN|Domesticindividual||1.02%||1,896,843|No change||0|1,896,843|||N/A|0|
|CHENYONGQING|Foreignindividual||0.79%||1,458,349|Nochange||0|1,458,349|||N/A|0|
|CHENLIJUAN|Foreignindividual||0.71%||1,308,017|No change||0|1,308,017|||N/A|0|
|DINGXIAOLUN|Domesticindividual||0.59%||1,100,000|17,700||0|1,100,000|||N/A|0|
|Strategicinvestororgeneralcorporationbecomingatoptenshareholderduetoplacingofnewshares|||N/A|||||||||||
|Relatedpartiesoracting-in-concertpartiesamongtheshareholdersabove|||Thefirst,thesecondandthefourthshareholdersaretheCompany’scorporatecontrollingshareholders.Itisunknownwhethertheothershareholdersoftradablesharesarerelatedpartiesoracting-in-concertpartiesas prescribed in theAdministrative Methods for Disclosure of the Shareholding Changes of the ListedCompany’sShareholders.|||||||||||
|Shareholdingsofthetoptennon-restrictedcommonshareholders||||||||||||||
|Nameofshareholder||||Numberofnon-restrictedsharesheldattheperiod-end|||Typeofshares|||||||
||||||||Type||||Number|||
|FORDCHEEDEVELOPMENTLIMITED||||53,940,530|||Domesticallylistedforeignshares||||53,940,530|||
|EUPAINDUSTRYCORPORATIONLIMITED||||24,268,840|||Domesticallylistedforeignshares||||24,268,840|||
|GUOTAIJUNANSECURITIES(HONGKONG)LIMITED||||9,320,780|||Domesticallylistedforeignshares||||9,320,780|||

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
|||||
|-|-|-|-|
|FILLMANINVESTMENTSLIMITED|4,621,596|Domesticallylistedforeignshares|4,621,596|
|SHENWANHONGYUANSECURITIES(H.K.)LIMITED|4,437,015|Domesticallylistedforeignshares|4,437,015|
|CHINAMERCHANTSSECURITIES(HK)CO.,LTD.|2,144,050|Domesticallylistedforeignshares|2,144,050|
|CHENYONGQUAN|1,896,843|Domesticallylistedforeignshares|1,896,843|
|CHENYONGQING|1,458,349|Domesticallylistedforeignshares|1,458,349|
|CHENLIJUAN|1,308,017|Domesticallylistedforeignshares|1,308,017|
|DINGXIAOLUN|1,100,000|Domesticallylistedforeignshares|1,100,000|
|Explanation on associated relationship or/andpersonsactinginconcertamongthetoptencommontradable shareholders and between the top tentradable shareholders and the top ten commonshareholders|Thefirst,thesecondandthefourthshareholdersaretheCompany’scorporatecontrollingshareholders.Itis unknown whether the other shareholders of tradable shares are related parties or acting-in-concertpartiesasprescribedintheAdministrativeMethodsforDisclosureoftheShareholdingChangesoftheListedCompany’sShareholders.|||
|Explanation on the top 10 common shareholdersparticipatinginthemargintradingbusiness|N/A|||

WhethertheshareholdersofacompanyconductedthetransactionofrepurchaseundertheagreementduringtheReportingPeriod□Yea√No
NosuchsituationoftheCompanyduringtheReportingPeriod.
IV.Changeof thecontrolling shareholderor theactual controller
ChangeincontrollingshareholderintheReportingPeriod
□Applicable√Notapplicable
TherewasnoanychangeofthecontrollingshareholderintheReportingPeriod.
ChangeoftheactualcontrollerduringtheReportingPeriod
□Applicable√Notapplicable
TherewasnoanychangeoftheactualcontrollerduringtheReportingPeriod
2017Semi-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 tothe2016AnnualReport.
II. Changeofdirectors, supervisors and seniormanagementstaff
√Applicable□Notapplicable
||||||
|-|-|-|-|-|
|Name|Position|Type|Date|Reason|
|TanZichang|ManagingDirector|Left|04/06/2017|Thedirectorleft,thepositionofgeneralmanagertermwastoexpireandapplyforresignationleaveing|
|PanZhirong|ChairmanoftheBoard|Elected|04/06/2017|Election|
|PanZhirong|Generalmanager|Employment|04/06/2017|TheboardofdirectorsemployedChairmanoftheBoardPanZhirongtoserveconcurrentlyasthegeneralmanager|
|ChenYanjun|Director|Elected|04/06/2017|Election|
|ZhuangXing|Director|Elected|04/06/2017|Election|
|CaiYuansong|Director|Elected|04/06/2017|Election|
|TuLiandong|IndependentDirector|Left|04/06/2017|Thetermexpiresandleft|
|TangJinmu|IndependentDirector|Elected|04/06/2017|Election|
|BaiShaoxiang|IndependentDirector|Elected|04/06/2017|Election|
|GeXiaoping|IndependentDirector|Elected|04/06/2017|Election|
|LuoQingxing|Shareholderrepresentativesupervisor|Elected|04/06/2017|Election|
|YangYongquan|Shareholderrepresentativesupervisor|Elected|04/06/2017|Election|
|ZhengCaiyun|Shareholderrepresentativesupervisor|Elected|04/06/2017|Election|

2017Semi-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
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Section XI. Documents Available for Reference
1.ThisReportcarryingthesignatureandsealoftheBoardChairman;
2.Thefinancialstatementssignedandsealedbythelegalrepresentative,theaccountingheadforthisReportandtheaccountinghead oftheCompany;and
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.
The Board of Directors of Tsann Kuen (China) Enterprise Co., Ltd. Board Chairman: Pan Zhirong
August 4, 2017
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 1.Consolidated balancesheet
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd. Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|CurrentAssets:|||
|Monetaryfunds|610,480,711.93|749,497,115.33|
|Settlementreserves|||
|Intra-grouplendings|||
|Financial assets measured at fair value of which changesarerecordedincurrentprofitsandlosses|1,881,750.00||
|Derivativefinancialassets|||
|Notesreceivable|990,000.00|1,341,076.70|
|Accountsreceivable|242,579,524.63|273,086,616.38|
|Accountspaidinadvance|24,784,622.14|6,964,904.97|
|Premiumsreceivable|||
|Reinsurancepremiumsreceivable|||
|Receivablereinsurancecontractreserves|||
|Interestreceivable|1,038,777.61|5,519.56|
|Dividendreceivable|||
|Otheraccountsreceivable|37,688,979.32|40,381,756.08|
|Financialassetspurchasedunderagreementstoresell|||
|Inventories|190,784,550.61|223,569,121.90|
|Assetsheldforsale|||
|Non-currentassetsduewithin1year|||
|Othercurrentassets|281,488,319.23|139,354,484.01|
|Totalcurrentassets|1,391,717,235.47|1,434,200,594.93|
|Non-currentassets:|||
|Loansbymandateandadvancesgranted|||
|Available-for-salefinancialassets|40,000.00|40,000.00|
|Held-to-maturityinvestments|||
|Long-termaccountsreceivable|||
|Long-termequityinvestment|||
|Investingrealestate|39,431,574.89|42,158,120.51|
|Fixedassets|175,644,211.63|174,529,010.36|
|Constructioninprogress|495,974.59|269,633.08|
|Engineeringmaterials|||
|Disposaloffixedassets|||
|Productionbiologicalassets|||
|Oil-gasassets|||
|Intangibleassets|28,363,603.13|23,840,277.12|
|R&Dexpense|||
|Goodwill|||
|Long-termdeferredexpenses|3,446,437.48|4,142,242.19|
|Deferredincometaxassets|13,735,365.16|17,104,853.57|
|Othernon-currentassets|3,052,537.50|1,248,273.23|
|Totalofnon-currentassets|264,209,704.38|263,332,410.06|
|Totalassets|1,655,926,939.85|1,697,533,004.99|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Currentliabilities:|||
|Short-termborrowings|125,326,400.00||
|BorrowingsfromCentralBank|||
|Customer bank deposits and due to banks and otherfinancialinstitutions|||
|Intra-groupborrowings|||
|Financial liabilities measured at fair value of whichchangesarerecordedincurrentprofitsandlosses|||
|Derivativefinancialliabilities|||
|Notespayable|10,517,009.49|23,251,704.93|
|Accountspayable|473,690,790.92|589,418,458.93|
|Accountsreceivedinadvance|14,843,333.11|11,187,023.96|
|Financialassetssoldforrepurchase|||
|Handlingchargesandcommissionspayable|||
|Payrollpayable|39,070,453.37|45,671,498.70|
|Taxpayable|3,384,970.78|16,965,068.11|
|Interestpayable|170,592.29||
|Dividendpayable|||
|Otheraccountspayable|56,442,168.31|58,411,663.19|
|Reinsurancepremiumspayable|||
|Liabilitiesheldforsale|||
|Non-currentliabilitiesduewithin1year|||
|Othercurrentliabilities|||
|Totalcurrentliabilities|723,445,718.27|744,905,417.82|
|Non-currentliabilities:|||
|Long-termborrowings|||
|Bondspayable|||
|Ofwhich:preferredshares|||
|Perpetualbonds|||
|Long-termpayables|||
|Long-termpayrollpayables|250,205.83|187,928.74|
|Specificpayables|||
|Estimatedliabilities|||
|Deferredincome|||
|Deferredincometaxliabilities|1,026,173.00|761,461.43|
|Othernon-currentliabilities|||
|Totalnon-currentliabilities|1,276,378.83|949,390.17|
|Totalliabilities|724,722,097.10|745,854,807.99|
|Owners’equity:|||
|Sharecapital|185,391,680.00|185,391,680.00|
|Otherequityinstruments|||
|Ofwhich:preferredshares|||
|Perpetualbonds|||
|Capitalreserves|296,808,965.79|296,808,965.79|
|Less:Treasurystock|||
|Othercomprehensiveincome|7,225,639.61|8,491,902.45|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||
|-|-|-|
|Specificreserves|||
|Surplusreserves|29,946,218.17|29,946,218.17|
|Provisionsforgeneralrisks|||
|Retainedprofits|79,037,077.41|90,217,504.90|
|TotalequityattributabletoownersoftheCompany|598,409,580.98|610,856,271.31|
|Minorityinterests|332,795,261.77|340,821,925.69|
|Totalowners’equity|931,204,842.75|951,678,197.00|
|Totalliabilitiesandowners’equity|1,655,926,939.85|1,697,533,004.99|

 Legalrepresentative:PanZhirong Person-in-chargeoftheaccountingwork:FengZhiqing Chiefoftheaccountingdivision:FengZhiqing
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 2.Balancesheet oftheCompany
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd. Unit:RMB
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|CurrentAssets:|||
|Monetaryfunds|7,375,082.84|6,668,219.24|
|Financialassetsmeasuredatfairvalueofwhichchangesarerecordedincurrentprofitsandlosses|||
|Derivativefinancialassets|||
|Notesreceivable|990,000.00|1,341,076.70|
|Accountsreceivable|11,171,289.00|30,084,632.38|
|Accountspaidinadvance|449,724.00|224,212.39|
|Interestreceivable|||
|Dividendreceivable|||
|Otheraccountsreceivable|875,121.08|539,684.23|
|Inventories|12,043,765.15|13,862,241.50|
|Assetsheldforsale|||
|Non-currentassetsduewithin1year|||
|Othercurrentassets|553,190.76|404,776.38|
|Totalcurrentassets|33,458,172.83|53,124,842.82|
|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|34,160,766.05|35,720,961.41|
|Fixedassets|1,759,189.75|1,985,546.98|
|Constructioninprogress|||
|Engineeringmaterials|||
|Disposaloffixedassets|||
|Productionbiologicalassets|||
|Oil-gasassets|||
|Intangibleassets|69,749.99|83,249.99|
|R&Dexpense|||
|Goodwill|||
|Long-termdeferredexpenses|43,866.37|69,866.41|
|Deferredincometaxassets|1,606,942.52|1,910,906.98|
|Othernon-currentassets|||
|Totalofnon-currentassets|960,595,216.24|962,725,233.33|
|Totalassets|994,053,389.07|1,015,850,076.15|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||
|-|-|-|
|Item|Closingbalance|Openingbalance|
|Currentliabilities:|||
|Short-termborrowings|||
|Financialliabilitiesmeasuredatfairvalueofwhichchangesarerecordedincurrentprofitsandlosses|||
|Derivativefinancialliabilities|||
|Notespayable|||
|Accountspayable|59,092,653.96|83,598,309.18|
|Accountsreceivedinadvance|2,053,293.49|930,623.95|
|Payrollpayable|1,851,697.45|2,912,637.07|
|Taxpayable|462,224.08|647,392.73|
|Interestpayable|||
|Dividendpayable|||
|Otheraccountspayable|293,315,878.21|298,567,356.74|
|Liabilitiesheldforsale|||
|Non-currentliabilitiesduewithin1year|||
|Othercurrentliabilities|||
|Totalcurrentliabilities|356,775,747.19|386,656,319.67|
|Non-currentliabilities:|||
|Long-termborrowings|||
|Bondspayable|||
|Ofwhich:preferredshares|||
|Perpetualbonds|||
|Long-termpayables|||
|Long-termpayrollpayables|||
|Specificpayables|||
|Estimatedliabilities|||
|Deferredincome|||
|Deferredincometaxliabilities|||
|Othernon-currentliabilities|||
|Totalnon-currentliabilities|0.00|0.00|
|Totalliabilities|356,775,747.19|386,656,319.67|
|Owners’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|29,946,218.17|29,946,218.17|
|Retainedprofits|150,449,453.89|142,365,568.49|
|Totalowners’equity|637,277,641.88|629,193,756.48|
|Totalliabilitiesandowners’equity|994,053,389.07|1,015,850,076.15|

Legalrepresentative:PanZhirong Person-in-chargeoftheaccountingwork:FengZhiqing Chiefoftheaccountingdivision:FengZhiqing
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 3.Consolidated income statement
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd Unit:RMB
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|I.Totaloperatingrevenues|869,683,758.68|798,108,689.27|
|Including:Salesincome|869,683,758.68|798,108,689.27|
|II.Totaloperatingcosts|859,363,439.15|776,558,722.21|
|Including:Costofsales|739,507,468.93|662,817,165.10|
|Taxesandassociatecharges|5,695,363.61|2,975,879.16|
|Sellinganddistributionexpenses|30,129,026.59|40,742,161.54|
|Administrativeexpenses|74,782,758.93|80,750,640.07|
|Financialexpenses|9,184,381.52|-9,966,312.52|
|Assetimpairmentloss|64,439.57|-760,811.14|
|Add:Gain/(loss)fromchangeinfairvalue(“-”meansloss)|1,881,750.00|5,645,050.00|
|Gain/(loss)frominvestment(“-”meansloss)|1,724,730.14|-4,434,437.95|
|Including:shareofprofitsinassociatesandjointventures||8,474.00|
|Foreignexchangegains(“-”meansloss)|||
|Othergains|||
|III.Businessprofit(“-”meansloss)|13,926,799.67|22,760,579.11|
|Add:non-operatingincome|3,353,082.90|4,349,049.40|
|Including:Gainsondisposalofnon-currentassets|336,752.14|542,527.01|
|Less:non-operatingexpense|298,400.08|61,724.97|
|Including:Lossesondisposalofnon-currentassets|205,501.99|17,353.82|
|IV.Totalprofit(“-”meansloss)|16,981,482.49|27,047,903.54|
|Less:Incometaxexpense|3,416,067.76|2,757,325.93|
|V.Netprofit(“-”meansloss)|13,565,414.73|24,290,577.61|
|NetprofitattributabletoownersoftheCompany|11,066,574.11|17,789,801.36|
|Minorityshareholders’income|2,498,840.62|6,500,776.25|
|VI.After-taxnetamountofothercomprehensiveincomes|-1,688,350.45|2,056,156.39|
|After-tax net amount of other comprehensive incomesattributabletoownersoftheCompany|-1,266,262.84|1,542,117.29|
|(I) Other comprehensive incomes that will not bereclassifiedintogainsandlosses|15,614.61||
|1. Changes in net liabilities or assets with a definedbenefitplanuponre-measurement|15,614.61||
|2.Enjoyablesharesinothercomprehensiveincomesininvestees that cannot be reclassified into gains and losses undertheequitymethod|||
|(II)Othercomprehensiveincomesthatwillbereclassifiedintogainsandlosses|-1,281,877.45|1,542,117.29|
|1.Enjoyablesharesinothercomprehensiveincomesininvestees thatwill bereclassified intogainsandlossesundertheequitymethod|||
|2. Gains and losses on fair value changes ofavailable-for-salefinancialassets|||
|3. Gains and losses on reclassifying held-to-maturityinvestmentsintoavailable-for-salefinancialassets|||
|4.Effectivehedginggainsandlossesoncashflows|||
|5. Foreign-currency financial statement translationdifference|-1,281,877.45|1,542,117.29|
|6.Other|||

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|After-tax net amount of other comprehensive incomesattributabletominorityshareholders|-422,087.61|514,039.10|
|VII.Totalcomprehensiveincomes|11,877,064.28|26,346,734.00|
|AttributabletoownersoftheCompany|9,800,311.27|19,331,918.65|
|Attributabletominorityshareholders|2,076,753.01|7,014,815.35|
|VIII.Earningspershare|||
|(I)Basicearningspershare|0.06|0.10|
|(II)Dilutedearningspershare|0.06|0.10|

 Wherebusinessmergersunderthesamecontroloccurredinthisreportingperiod,thenetprofitachievedbythemergedpartiesbefore thebusinessmergerswasRMB0,withthecorrespondingamountforthelastperiodbeingRMB-2,204,397.97.
Legalrepresentative:PanZhirong Person-in-chargeoftheaccountingwork:FengZhiqing Chiefoftheaccountingdivision:FengZhiqing
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 4.Income statementof theCompany
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd Unit:RMB
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|I.Totalsales|37,935,863.38|64,284,182.16|
|Less:costofsales|26,745,263.79|51,411,479.65|
|Businesstaxesandsurcharges|1,034,131.00|376,508.47|
|Distributionexpenses|4,655,640.49|4,712,679.84|
|Administrativeexpenses|6,256,545.30|6,407,301.54|
|Financialcosts|-77,973.23|9,027.92|
|Impairmentloss|-890,712.11|904,000.92|
|Add:gain/(loss)fromchangeinfairvalue(“-”meansloss)|||
|Gain/(loss)frominvestment(“-”meansloss)|30,310,250.78|107,582,142.80|
|Including:incomefrominvestmentonassociatesandjointventures||8,474.00|
|Othergains|||
|II.Businessprofit(“-”meansloss)|30,523,218.92|108,045,326.62|
|Add:non-operatingincome|111,632.54|173,232.50|
|Including:Gainsondisposalofnon-currentassets|||
|Less:non-operatingexpense|||
|Including:Lossesondisposalofnon-currentassets|||
|III.Totalprofit(“-”meansloss)|30,634,851.46|108,218,559.12|
|Less:Incometaxexpense|303,964.46|16,204,107.07|
|IV.Netprofit(“-”meansloss)|30,330,887.00|92,014,452.05|
|V.After-taxnetamountofothercomprehensiveincomes|||
|(I)Othercomprehensiveincomesthatwillnotbereclassifiedintogainsandlosses|||
|1. Changes in net liabilities or assets with a defined benefit planuponre-measurement|||
|2. Enjoyable shares in other comprehensive incomes in investeesthatcannotbereclassifiedintogainsandlossesundertheequitymethod|||
|(II) Other comprehensive incomes that will be reclassified into gainsandlosses|||
|1. Enjoyable shares in other comprehensive incomes in investeesthatwillbereclassifiedintogainsandlossesundertheequitymethod|||
|2. Gains and losses on fair value changes of available-for-salefinancialassets|||
|3. Gains and losses on reclassifying held-to-maturity investmentsintoavailable-for-salefinancialassets|||
|4.Effectivehedginggainsandlossesoncashflows|||
|5.Foreign-currencyfinancialstatementtranslationdifference|||
|6.Other|||
|VI.Totalcomprehensiveincomes|30,330,887.00|92,014,452.05|
|VII.Earningspershare|||
|(I)Basicearningspershare|||
|(II)Dilutedearningspershare|||

Legalrepresentative:PanZhirong Person-in-chargeoftheaccountingwork:FengZhiqing Chiefoftheaccountingdivision:FengZhiqing
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 5.Consolidated cash flowstatement
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd Unit:RMB
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|I.Cashflowsfromoperatingactivities:|||
|Cashreceivedfromsaleofcommoditiesandrenderingofservice|880,124,770.86|799,779,397.11|
|Taxrefundsreceived|98,954,676.31|107,484,793.44|
|Othercashreceivedrelatingtooperatingactivities|31,713,946.31|34,806,311.83|
|Subtotalofcashinflowsfromoperatingactivities|1,010,793,393.48|942,070,502.38|
|Cashpaidforgoodsandservices|774,245,705.02|764,993,901.10|
|Cashpaidtoandforemployees|133,551,803.87|123,885,869.23|
|Varioustaxespaid|24,040,423.11|12,713,941.82|
|Othercashpaymentrelatingtooperatingactivities|136,466,757.44|100,648,796.52|
|Subtotalofcashoutflowsfromoperatingactivities|1,068,304,689.44|1,002,242,508.67|
|Netcashflowsfromoperatingactivities|-57,511,295.96|-60,172,006.29|
|II.Cashflowsfrominvestingactivities:|||
|Cashreceivedfromwithdrawalofinvestments|365,334,812.92|214,290,235.67|
|Cashreceivedfromreturnoninvestments|236,201.06||
|Netcashreceivedfromdisposaloffixedassets,intangibleassetsandotherlong-termassets|2,112,841.63|5,830,678.69|
|Netcashreceivedfromdisposalofsubsidiariesorotherbusinessunits|||
|Othercashreceivedrelatingtoinvestingactivities|42,313,208.55|75,400,000.00|
|Subtotalofcashinflowsfrominvestingactivities|409,997,064.16|295,520,914.36|
|Cash paid to acquire fixed assets, intangible assets and other long-termassets|38,298,093.66|30,738,906.49|
|Cashpaidforinvestment|503,252,795.01|375,011,646.84|
|Netincreaseofpledgedloans|||
|Netcashpaidtoacquiresubsidiariesandotherbusinessunits|||
|Othercashpaymentsrelatingtoinvestingactivities|377,386,926.35|169,327,000.00|
|Subtotalofcashoutflowsfrominvestingactivities|918,937,815.02|575,077,553.33|
|Netcashflowsfrominvestingactivities|-508,940,750.86|-279,556,638.97|
|III.CashFlowsfromFinancingActivities:|||
|Cashreceivedfromcapitalcontributions|||
|Including: Cash received from minority shareholder investments bysubsidiaries|||
|Cashreceivedfromborrowings|151,183,998.00|65,128,000.00|
|Cashreceivedfromissuanceofbonds|||
|Othercashreceivedrelatingtofinancingactivities|6,774,375.98|4,519,265.19|
|Subtotalofcashinflowsfromfinancingactivities|157,958,373.98|69,647,265.19|
|Repaymentofborrowings|24,730,160.00||
|Cashpaidforinterestexpensesanddistributionofdividendsorprofit|32,521,569.11|32,363,500.69|
|Including: dividends or profit paid by subsidiaries to minorityshareholders|15,707,954.97|13,824,332.69|
|Othercashpaymentsrelatingtofinancingactivities|||
|Sub-totalofcashoutflowsfromfinancingactivities|57,251,729.11|32,363,500.69|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|Netcashflowsfromfinancingactivities|100,706,644.87|37,283,764.50|
|IV.Effectofforeignexchangeratechangesoncashandcashequivalents|-8,511,122.49|6,554,846.72|
|V.Netincreaseincashandcashequivalents|-474,256,524.44|-295,890,034.04|
|Add:Openingbalanceofcashandcashequivalents|738,195,729.53|675,824,861.29|
|VI.Closingbalanceofcashandcashequivalents|263,939,205.09|379,934,827.25|

 Legalrepresentative:PanZhirong Person-in-chargeoftheaccountingwork:FengZhiqing Chiefoftheaccountingdivision:FengZhiqing
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 6.Cash flowstatement oftheCompany
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd Unit:RMB
||||
|-|-|-|
|Item|Reportingperiod|Sameperiodoflastyear|
|I.Cashflowsfromoperatingactivities:|||
|Cashreceivedfromsaleofcommoditiesandrenderingofservice|55,674,286.26|54,541,061.46|
|Taxrefundsreceived|||
|Othercashreceivedrelatingtooperatingactivities|21,418,487.10|21,305,861.45|
|Subtotalofcashinflowsfromoperatingactivities|77,092,773.36|75,846,922.91|
|Cashpaidforgoodsandservices|53,556,689.27|69,402,417.98|
|Cashpaidtoandforemployees|7,189,494.06|7,241,953.89|
|Varioustaxespaid|2,292,808.84|2,112,861.45|
|Othercashpaymentrelatingtooperatingactivities|21,465,798.37|147,433,841.45|
|Subtotalofcashoutflowsfromoperatingactivities|84,504,790.54|226,191,074.77|
|Netcashflowsfromoperatingactivities|-7,412,017.18|-150,344,151.86|
|II.Cashflowsfrominvestingactivities:|||
|Cashreceivedfromretractionofinvestments||130,000,000.00|
|Cashreceivedfromreturnoninvestments|||
|Netcashreceivedfromdisposaloffixedassets,intangibleassetsandotherlong-termassets|||
|Netcashreceivedfromdisposalofsubsidiariesorotherbusinessunits|||
|Othercashreceivedrelatingtoinvestingactivities|||
|Subtotalofcashinflowsfrominvestingactivities|0.00|130,000,000.00|
|Cash paid to acquire fixed assets, intangible assets and other long-termassets|25,500.00|13,798.00|
|Cashpaidforinvestment||1,000,000.00|
|Netcashpaidtoacquiresubsidiariesandotherbusinessunits|||
|Othercashpaymentsrelatingtoinvestingactivities|||
|Subtotalofcashoutflowsfrominvestingactivities|25,500.00|1,013,798.00|
|Netcashflowsfrominvestingactivities|-25,500.00|128,986,202.00|
|III.CashFlowsfromFinancingActivities:|||
|Cashreceivedfromcapitalcontributions|30,310,250.78|41,472,998.07|
|Cashreceivedfromborrowings|||
|Cashreceivedfromissuanceofbonds|||
|Othercashreceivedrelatingtofinancingactivities|||
|Subtotalofcashinflowsfromfinancingactivities|30,310,250.78|41,472,998.07|
|Repaymentofborrowings|||
|Cashpaidforinterestexpensesanddistributionofdividendsorprofit|22,247,001.60|18,539,168.00|
|Othercashpaymentsrelatingtofinancingactivities|||
|Sub-totalofcashoutflowsfromfinancingactivities|22,247,001.60|18,539,168.00|
|Netcashflowsfromfinancingactivities|8,063,249.18|22,933,830.07|
|IV.Effectofforeignexchangeratechangesoncashandcashequivalents|81,131.60|-6,803.16|
|V.Netincreaseincashandcashequivalents|706,863.60|1,569,077.05|
|Add:Openingbalanceofcashandcashequivalents|6,668,219.24|7,750,025.58|
|VI.Closingbalanceofcashandcashequivalents|7,375,082.84|9,319,102.63|

Legalrepresentative:PanZhirong Person-in-chargeoftheaccountingwork:FengZhiqing Chiefoftheaccountingdivision:FengZhiqing
2017Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 7.Consolidated statementof changesinowners’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||8,491,902.45||29,946,218.17||90,217,504.90|340,821,925.69|951,678,197.00|
|Add:changeofaccountingpolicy||||||||||||||
|Correctionoferrorsinpreviousperiods||||||||||||||
|Businessmergersunderthesamecontrol||||||||||||||
|Other||||||||||||||
|II.Balanceatthebeginningoftheyear|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/decreaseintheperiod(“-”meansdecrease)|||||||-1,266,262.84||||-11,180,427.49|-8,026,663.92|-20,473,354.25|
|(I)Totalcomprehensiveincomes|||||||-1,266,262.84||||11,066,574.11|2,076,753.01|11,877,064.28|
|(II)Capitalincreasedandreducedbyowners||||||||||||||
|1.Commonsharesincreasedbyshareholders||||||||||||||
|2.Capitalincreasedbyholdersofotherequityinstruments||||||||||||||
|3.Amountsofshare-basedpaymentsrecognizedinowners’equity||||||||||||||
|4.Other||||||||||||||
|(III)Profitdistribution|||||||||||-22,247,001.60|-10,103,416.93|-32,350,418.53|
|1.Appropriationstosurplusreserves||||||||||||||
|2.Appropriationstogeneralriskprovisions||||||||||||||
|3.Appropriationstoowners(orshareholders)|||||||||||-22,247,001.60|-10,103,416.93|-32,350,418.53|
|4.Other||||||||||||||
|(IV)Internalcarry-forwardofowners’equity||||||||||||||
|1.Newincreaseofcapital(orsharecapital)fromcapitalpublicreserves||||||||||||||
|2. New increase of capital (or share capital) from surplusreserves||||||||||||||
|3.Surplusreservesformakinguplosses||||||||||||||
|4.Other||||||||||||||
|(V)Specificreserve||||||||||||||
|1.Withdrawnfortheperiod||||||||||||||
|2.Usedintheperiod||||||||||||||
|(VI)Other||||||||||||||
|IV.Closingbalance|185,391,680.00||||296,808,965.79||7,225,639.61||29,946,218.17||79,037,077.41|332,795,261.77|931,204,842.75|

Legalrepresentative:PanZhirong Person-in-chargeoftheaccountingwork:FengZhiqing Chiefoftheaccountingdivision:FengZhiqing
2017Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (Continued) Unit:RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Sameperiodoflastyear|||||||||||||
||EquityattributabletoownersoftheCompany|||||||||||Minorityinterests|Totalowners’equity|
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:treasurystock|Othercomprehensiveincomes|Specificreserve|Surplusreserve|Generalriskreserve|Retainedprofit|||
|||Preferredshares|Perpetualbonds|Other||||||||||
|I.Balanceattheendofthepreviousyear|185,391,680.00||||282,916,698.67||3,247,335.35||20,962,521.51||69,510,872.20|358,467,426.11|920,496,533.84|
|Add:changeofaccountingpolicy||||||||||||||
|Correctionoferrorsinpreviousperiods||||||||||||||
|Businessmergersunderthesamecontrol||||||||||||||
|Other||||||||||||||
|II.Balanceatthebeginningoftheyear|185,391,680.00||||282,916,698.67||3,247,335.35||20,962,521.51||69,510,872.20|358,467,426.11|920,496,533.84|
|III.Increase/ decreasein theperiod (“-”meansdecrease)|||||13,892,267.12||5,244,567.10||8,983,696.66||20,706,632.70|-17,645,500.42|31,181,663.16|
|(I)Totalcomprehensiveincomes|||||||5,244,567.10||||48,229,497.36|16,469,280.00|69,943,344.46|
|(II)Capitalincreasedandreducedbyowners|||||13,892,267.12|||||||-20,290,447.73|-6,398,180.61|
|1.Commonsharesincreasedbyshareholders||||||||||||||
|2.Capitalincreasedbyholdersofotherequityinstruments||||||||||||||
|3.Amountsofshare-basedpaymentsrecognizedinowners’equity||||||||||||||
|4.Other|||||13,892,267.12|||||||-20,290,447.73|-6,398,180.61|
|(III)Profitdistribution|||||||||8,983,696.66||-27,522,864.66|-13,824,332.69|-32,363,500.69|
|1.Appropriationstosurplusreserves|||||||||8,983,696.66||-8,983,696.66|||
|2.Appropriationstogeneralriskprovisions||||||||||||||
|3.Appropriationstoowners(orshareholders)|||||||||||-18,539,168.00|-13,824,332.69|-32,363,500.69|
|4.Other||||||||||||||
|(IV)Internalcarry-forwardofowners’equity||||||||||||||
|1.Newincreaseofcapital(orsharecapital)fromcapitalpublicreserves||||||||||||||
|2.Newincreaseofcapital(orsharecapital)fromsurplusreserves||||||||||||||
|3.Surplusreservesformakinguplosses||||||||||||||
|4.Other||||||||||||||
|(V)Specificreserve||||||||||||||
|1.Withdrawnfortheperiod||||||||||||||
|2.Usedintheperiod||||||||||||||
|(VI)Other||||||||||||||
|IV.Closingbalance|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|

Legalrepresentative:PanZhirong Person-in-chargeoftheaccountingwork:FengZhiqing Chiefoftheaccountingdivision:FengZhiqing
2017Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. 8.Statementofchanges inowners’equity ofthe Company
Preparedby:TsannKuen(China)EnterpriseCo.,Ltd Unit:RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Reportingperiod|||||||||||
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:treasurystock|Othercomprehensiveincomes|Specificreserve|Surplusreserve|Retainedprofit|Totalowners’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||||||||||||
|Correctionoferrorsinpreviousperiods||||||||||||
|Other||||||||||||
|II.Balanceatthebeginningoftheyear|185,391,680.00||||271,490,289.82||||29,946,218.17|142,365,568.49|629,193,756.48|
|III.Increase/decreaseintheperiod(“-”meansdecrease)||||||||||8,083,885.40|8,083,885.40|
|(I)Totalcomprehensiveincomes||||||||||30,330,887.00|30,330,887.00|
|(II)Capitalincreasedandreducedbyowners||||||||||||
|1.Commonsharesincreasedbyshareholders||||||||||||
|2.Capitalincreasedbyholdersofotherequityinstruments||||||||||||
|3.Amountsofshare-basedpaymentsrecognizedinowners’equity||||||||||||
|4.Other||||||||||||
|(III)Profitdistribution||||||||||-22,247,001.60|-22,247,001.60|
|1.Appropriationstosurplusreserves||||||||||||
|2.Appropriationstoowners(orshareholders)||||||||||-22,247,001.60|-22,247,001.60|
|3.Other||||||||||||
|(IV)Internalcarry-forwardofowners’equity||||||||||||
|1.Newincreaseofcapital(orsharecapital)fromcapitalpublicreserves||||||||||||
|2. New increase of capital (or share capital) fromsurplusreserves||||||||||||
|3.Surplusreservesformakinguplosses||||||||||||
|4.Other||||||||||||
|(V)Specificreserve||||||||||||
|1.Withdrawnfortheperiod||||||||||||
|2.Usedintheperiod||||||||||||
|(VI)Other||||||||||||
|IV.Closingbalance|185,391,680.00||||271,490,289.82||||29,946,218.17|150,449,453.89|637,277,641.88|

 Legalrepresentative:PanZhirong Person-in-chargeoftheaccountingwork:FengZhiqing Chiefoftheaccountingdivision:FengZhiqing
2017Semi-AnnualReportof TsannKuen(China)EnterpriseCo.,Ltd. (Continued) Unit:RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|Sameperiodoflastyear|||||||||||
||Sharecapital|Otherequityinstruments|||Capitalreserve|Less:treasurystock|Othercomprehensiveincomes|Specificreserve|Surplusreserve|Retainedprofit|Totalowners’equity|
|||Preferredshares|Perpetualbonds|Other||||||||
|I.Balanceattheendofthepreviousyear|185,391,680.00||||271,490,289.82||||20,962,521.51|80,051,466.55|557,895,957.88|
|Add:changeofaccountingpolicy||||||||||||
|Correctionoferrorsinpreviousperiods||||||||||||
|Other||||||||||||
|II.Balanceatthebeginningoftheyear|185,391,680.00||||271,490,289.82||||20,962,521.51|80,051,466.55|557,895,957.88|
|III.Increase/decreaseintheperiod(“-”meansdecrease)|||||||||8,983,696.66|62,314,101.94|71,297,798.60|
|(I)Totalcomprehensiveincomes||||||||||89,836,966.60|89,836,966.60|
|(II)Capitalincreasedandreducedbyowners||||||||||||
|1.Commonsharesincreasedbyshareholders||||||||||||
|2.Capitalincreasedbyholdersofotherequityinstruments||||||||||||
|3.Amountsofshare-basedpaymentsrecognizedinowners’equity||||||||||||
|4.Other||||||||||||
|(III)Profitdistribution|||||||||8,983,696.66|-27,522,864.66|-18,539,168.00|
|1.Appropriationstosurplusreserves|||||||||8,983,696.66|-8,983,696.66||
|2.Appropriationstoowners(orshareholders)||||||||||-18,539,168.00|-18,539,168.00|
|3.Other||||||||||||
|(IV)Internalcarry-forwardofowners’equity||||||||||||
|1.Newincreaseofcapital(orsharecapital)fromcapitalpublicreserves||||||||||||
|2.Newincreaseofcapital(orsharecapital)fromsurplusreserves||||||||||||
|3.Surplusreservesformakinguplosses||||||||||||
|4.Other||||||||||||
|(V)Specificreserve||||||||||||
|1.Withdrawnfortheperiod||||||||||||
|2.Usedintheperiod||||||||||||
|(VI)Other||||||||||||
|IV.Closingbalance|185,391,680.00||||271,490,289.82||||29,946,218.17|142,365,568.49|629,193,756.48|

 Legalrepresentative:PanZhirong Person-in-chargeoftheaccountingwork:FengZhiqing Chiefoftheaccountingdivision:FengZhiqing
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Tsann Kuen (China) Enterprise Co., Ltd.
Notes to Financial Statements as of June 30, 2017
(Allcurrency amounts hereinareexpressed, unless otherwisestated, in RMB.)
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., EUPAIndustry 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 to 185,391,680 shares. By June 30,2017,the registered capital ofthe Company 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 onTsann Kuen (China) Enterprise Co., Ltd. shares traded sponsor of theapproval>), On December 6, 2006, the Company received the[2006] No. 266 file<The notice of Tsann 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 these B shares could be listed and exercised on Shenzhen Stock Exchange. Up to June 30, 2017, total B shares hold by the three legal shareholders (EUPA Industry Corporation Limited, Fordchee Development Limited and Fillman Investment Limited) are 82,830,966 shares. (account for44.68%oftheshare capital).
Legal representative: Pan, Zhirong
Place ofregistration: No.88 Xinglong Road, Huli Industrial District, Xiamen, Fujian Province The parent: Star ComgisticCapital Co.Ltd.
The industryof thecompany: electrical machinery andequipment 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 ofthe Statefor theregulations application).
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. The Financial Report approved by the Board of the Directors of the Company and disclosed on August 4,2017.
There were 10 subsidiaries be included in 2017 of the Company with the details in Notes VIII “Equities among other entities”. There was no change of consolidated scope during the Reporting Period.
II. Basisforpreparationof thefinancial 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 41 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 by the China Securities 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 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, provisions for asset impairmentare madein accordance with relevant requirements.
III. StatementofCompliance withEnterpriseAccounting 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, 2017. 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 on Financial Reports (2014 Revision) issued by China Securities Regulatory Commission (CSRC) in 2014.
IV.ImportantAccountingPrinciples 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 of Accounting Standards, to make a number of specific accounting policies and accounting estimates for other transactions and events of revenue recognition, see Note IV. 22 “Revenue” for the description. For description of significant accounting judgments and estimates made​​ by management, see Note IV. 26 “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 ofthe Company isthecalendar year from January 1toDecember 31.
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 forthe classification.
3.Monetary Unit
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Yuan (RMB) isthecurrency of theprimary economic environment inwhich theCompany and its domesticsubsidiaries operate.Therefore, theCompany and its domesticsubsidiaries choose RMB as their functional currency,the overseas subsidiaries decide theHKD, USD, NTD orIndonesian Rupiah as theirfunctional currency in accordancewith thebusiness in which currency ofthe primary economicenvironment.The Companyadopts RMBto prepareits functional statements. 4. Accounting treatments of business combination under common control and under not the common control
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 not involving enterprises under common control.
(1) Business combination involving entities 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 onwhich theabsorbing party effectively obtainscontrol oftheparty 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 (or share 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 for the current period when incurred.
(2) Business combination involving entities 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 oftheacquiree.
For a business combination not involving enterprise under common control, the 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
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. fair value of theacquiree’s identifiable net assets, the difference shall be recognized 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 recognize the remaining difference immediately in profit orloss forthe current period.
Where the temporary difference obtained by the acquirer was not recognized 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 recognized, and goodwill offset. If the goodwill is not sufficient, the difference shall be recognized as profit of the current period. Apart from above, the differences shall be taken into profit or loss of the current period iftherecognition of deferred incometax assets is related to thecombination.
For a business combination not involving enterprise under common control, which achieved in stages that involves multiple exchange transactions, according to “The notice of the Ministry of Finance on the issuance of Accounting Standards Interpretation No. 5” (Cai-Kuai[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 IV. 12 “long-term investment” accounting treatment, if it does not belong to the “package deal” to distinguish the individual financial statements and theconsolidated financial statements related totheaccounting treatment: In the individual financial statements, the total value of the book value of theacquiree’s equity investment before the acquisition date and the cost of new investment at the acquisition date, as the initial cost of the investment, theacquiree’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 investment income).
5.Preparation ofthe consolidated financialstatements
(1)Thescope of consolidation
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 consolidation includes the Company and all ofthe subsidiaries. Subsidiaryis an enterprise orentity under thecontrol oftheCompany.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Once the change in the relevant facts and circumstances leading to the definition of the relevant elements involvedin thecontrol ofthechange, thecompany will bere-evaluated.
(2) Preparation oftheconsolidated 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 ofacquisition.
Intra-Group balances and transactions, and any unrealized profit or loss arising from intra-Group transactions, are eliminated in preparing theconsolidated 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 minorityinterest inthe consolidated income statementbelow thenet profit lineitem. 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 ofthesubsidiary,theexcess is allocated against theminorityinterests.
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 recognized as investment income for the current period when control is lost. Other comprehensive income related to the formersubsidiary’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(i.e., 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. 12
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Long-term equity investmentsand NoteIV.9Financial instruments for details.
The company through multiple transactions step deals with disposal of thesubsidiary’ s equity investment until the loss of control, need to distinguish between equity until the disposal of asubsidiary’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 package deal:① these transactions are considered simultaneously, or in the case of mutual influence made,② these transactions as a whole in order to achieve a complete business results;③ the occurrence of a transaction depends on occurs at least one other transaction;④ a 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. 12. (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 disposal, recognized in the consolidated financial statements as other comprehensive income, loss of control over the transferred together with the loss ofcontrol orlossin theperiod.
6.Jointarrangement
A joint 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 ofthearrangement have rightstothenet assets ofthe arrangement.
The Company accounts for joint ventures using the equity method, see Note IV. 12. (2),② for details.
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 thejoint operation ;(d) its share of the revenue from the sale of the output by the jointoperation; and (e) its expenses, including itsshare ofany 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 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 thejointoperation, theCompany shall recogniseits share ofthelosses.
7.Cash equivalent
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 amount of cash that can be measured reliably and have lowrisks ofchange.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 8.Foreign exchange
(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 theforeign exchange are translated at thespot exchangerate.
(2)Translation ofmonetary 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 recognized 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 orloss except foramortized 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, it should be converted into the profits and lossesof thecurrent period.
Non-monetary foreign currency items measured at historical cost shall still be translated 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 thusresulted are recognized inprofit orlossfor thecurrent period oras capital reserve. (3)Thetranslation 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 recognized as “exchange differences arising on translation of financial statements denominated in foreign currencies” inowner’s equity, and in profit orlossfor theperiod upondisposal of theforeign operation.
The Group translates the financial statements of its foreign operations into RMB 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 orlossin theperiod 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 cash is separately presented as anadjustment item inthe cash flowstatement.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. The opening and actual amount oflast year are presented in thefinancial statement after translation. At the disposal of all of the company's ownership interest in a foreign operation, or due 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, alltransferred tothe disposalofthe 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 ofthe incomestatement.
9.Financialinstruments
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 into theinitially recognized amount.
(1) Determination offinancial assets andliabilities’fair value
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 flow analysis and optionpricing models.
(2) Classification, recognition and measurement offinancial assets
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. A financial 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 tofinancial assets ofothercategories are included in theamount initiallyrecognized.①Financial assets at fair valuethrough profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit orloss.
Financial asset held-for-trade is thefinancial asset that meets oneof thefollowing conditions: A. thefinancial asset isacquired forthepurpose ofselling itin a short 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 recently manages this portfolio for thepurposeof short-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
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair value cannot be reliably measured. For such kind of financial assets, fair values are adopted for subsequent 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 income earned onthe financial assets are recognized in theprofit or loss.
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 ability to 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 amortization are recognized in profit orloss forthe current 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, a shorter period to the net 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 ordiscounts,etc.
③ Loans 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 receivable dividends 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.
④ Financial 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 valuethrough profit or loss,loans and receivables or investmentheld-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 initialreceived 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 time the gains or losses are released and recognized in profit orloss.
Interests obtained and dividends declared by the investee during the period in which the financial assets available-for-trade are held, are recognized in investment gains.
(3) Impairment of financial 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 beimpaired, a provisionis provided for theimpairment.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 combination of financial assets with similarrisk features for anyimpairment test.
①Impairment onheld-to maturity investment, loans and receivables
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 without provisions of impairment loss on the reserving date.
②Impairment loss onavailable-for-tradefinancial assets
Where the fair value of the equity instrument investment drops significantly or not contemporarily according tothe integrated relevant factors, an available-for-trade financial asset isimpaired. When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair value that had been recognized incapital 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 amortized cost, current fair value and any impairment loss onthat financial asset previously recognized in profit orloss.
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 onavailable-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 bydelivery ofsuch an unquoted equity instrument shall notbe reversed.
(4) Recognition and measurement offinancial assets transfer
The Group derecognizes a financial asset when one ofthefollowing conditions ismet:
①the rights to receive cash flows from theasset haveexpired;
② the enterprise has transferred its rights to receive cash flows from the asset to a third party under a pass-through arrangement; or
③ the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred norretained substantially all the risks and rewards of the asset, but has transferred control of the asset.
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 by the financial asset changes theenterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 other comprehensive income, isrecognized in profit orloss.
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 cumulative gain or loss allocated to the part derecognized which has been previously recognized inothercomprehensive 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 tothe principles described informer paragraphs.
(5) Classification andmeasurement of financial 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 the initial recognition amounts.
① Financial liabilities measured bythefair valueand thechanges recorded inprofit 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 bythefair value and theirchanges are recorded inthe current 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 recognized in profit orlossfor thecurrent period.
② Other financial 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 derecognition or amortization is recognized in profit orloss for thecurrent period.
③ Financial guarantee contract
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 the Accounting 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 theinitially 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
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 liabilityand the recognition ofa 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 or new financial 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 and loss isrecognized inprofit 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 liability at fair valuethrough profit or loss.
(8) Offsettingfinancial assets and financial 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 be presented separately in the balance sheet and shall not be offset.
(9) Equityinstruments
An equity instrumentis anycontract that evidences aresidual interest inthe assets oftheCompany after deducting all ofitsliabilities.Theconsideration received from issuingequity instruments, net oftransaction costs, are addedtoshareholders’equity.All types ofdistribution(excluding stock dividends) madebytheCompany to holders ofequity instruments are deducted fromshareholders’ equity.The Group does not recognize any changes in thefair valueof equity instruments.
10.Receivables
The receivables bythe Companyinclude account receivables, and otherreceivables.
(1) Criteriafor recognition of bad debts:
The Company carries out an inspection on the balance sheet date. Where there is any objective evidence proving that thereceivables have been impaired, an impairment provision shallbe made:①Aserious financial difficulty occurs to theissueror debtor;
② The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment ofinterests or theprincipal, etc.;
③The debtorwill probably become bankrupt orcarry out other financial reorganizations;
④Other objective evidences showing theimpairment ofthereceivables.
(2) Method for bad debts provision
①Provisions ofbad debts in account receivables that isindividually significant.
Individual receivables equal to or higher than 10Proportion receivables are classified as receivables ofindividual significance.
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
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. cash flowless thecarrying amount, andprovision ismade accordingly.
② Provisions of bad debts in account receivables that individually insignificant items with similar credit risk characteristics that havesignificant risk:
A. Evidence ofcreditrisk 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 theestimation offuture cash flow expected to bederived from theassets.
Evidence ofportfolios:
Item Basis
Ageportfolios Agecondition
Relatedpartyportfolios Relatedpartyrelationship
B. Provisionbycredit 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.
Provision fordifferent portfolios:
Item Provision
Ageportfolios Ageanalysismethod
Relatedpartyportfolios Noallowanceforbaddebt,Unlesstherelatedpartyisinsolvent a. Portfoliobyage analysis
||
|-|
|Proportionforaccountsreceivable(%)|
|0.00|
|10.00|
|30.00|
|50.00|

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

③Provisions ofbad debts that is individuallyinsignificant.
The reason: if there is objective evidence indicating that the accountable receivable is individually insignificant, and the credit risk does not conform to other accountsreceivable’s credit risk, the impairment test should beconducted.
The withdrawal method: the difference between the present value of future cash flow is less than the carrying amount, theimpairment testshould beconducted and provision ismade accordingly. The Company conducted the impairment test for margin and deposit. If there is no objective evidence indicating mpairmnet, thenbad debts provision is notmade.
(3)Thereversal ofbad debts provision
If there is objective evidence of recovery in value of account receivables, and the recovery can be
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 thedatetheimpairment 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 shouldbe recorded intocurrent profit or loss
11.Inventories
(1) Classification ofinventory
Inventories are classified into materials in transit, raw materials, work-in-progress, finished goods, materials andgoods ofconsignment and revolving materials etc.
(2)Valuationmethod of inventories
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 of issue is measured using the weighted 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 thepurposeof holdinginventories andeffect ofpost balance sheet events. At the balance sheet date, inventories are measured at the lower of the cost and net 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 onan 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 decline in value is reversed and the reversal isincluded inprofit orloss fortheperiod.
(4)Theperpetual inventory system is maintained forstock system.
(5)Amortization method forlowcost and short-lived consumable itemsand packaging materials. Low cost and short-lived consumable items are amortized using immediate write-off method, packaging materials are amortized usingimmediatewrite-off method.
12.Long-term equity investments
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 the accounting policies in Note IV. 9 “financial Instruments”.
Joint control is theCompany control over anarrangement inaccordance with therelevant
stipulationsare common, related activities and thearrangement mustbe after sharing control
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. participants agreed tothedecision-making. Significant influence is theCompany s financial and operating policies oftheentity has the right to participate in decision-making, but can not control or with otherparties jointcontrol overthosepolicies.
(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 priorto thecombination is not affected bythecombination. 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 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 tothe combination are carried to profit 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 orloss for theperiod during which theacquisition 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
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. additional investment, is measured as the fair value determined in accordance with CAS 22 - Financial Instruments:Recognition and Measurement plusthe cost ofadditional investment. (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 equity can exercise control over theinvestee.
①Cost method ofaccounting for long-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 attributable share of cash dividends or profit distributions declared bytheinvestee.
②Equity method ofaccounting forlong-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, noadjustment shall bemade tothe initial investment 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 oftheCompany’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. 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 orloss is eliminated in full,theCompany’s share of net profit, if any, is recognizedas investment income.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. For long-term equity investments in associates and joint ventures which had been held by the Company before its first time adoption ofAccounting 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 onastraight linebasis over theoriginal remaining life.
③Acquisitionof minorityinterest
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, the excess 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 inthe net asset between theamount 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 is recognized inprofit or loss.
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. Theinvestee’s equity movement other than net profit, other comprehensive income and profit distribution is recognised in profit or loss proportionate 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 lossproportionate to 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. 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 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
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 inprofit or lossin full.
Where theCompany’s joint control or significant influence over an investee is lost due to 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 distributionis recognised in profit or losswhen jointcontrol or significant influence is lost.
WheretheCompany’s control overan investee islostthrough multipledisposals andthemultiple disposals shall beviewed as one singletransaction, themultiple disposalsare accounted forone single transaction which resultsintheCompany’s loss ofcontrol over theinvestee. Each difference between theconsideration received and the bookvalueoftheinvestment disposed is recognizedin other comprehensiveincomeand reclassified in full to profit orlossat thetimewhen control over the investeeis lost.
13.Investment property
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, but also as an investment real estate presentation .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 berecorded in thecurrent profits or losseswhen incurred.
The Group uses the cost model for subsequent measurement of investment property, and in accordance with thedepreciation oramortization ofbuildings or landuserights policy.
Investment property impairment test method and impairment accrual method described in Note IV. 18“Non-current and non-financial assets impairment”.
Occupied real estate for investment property or investment property is transferred to owner-occupied real estate or stock conversion as the recorded value after the conversion, according to thebookvalue before 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 income after deducting the
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. bookvalue andrelated taxes and profit orloss.
14.Fixed assets
(1)Theconditions ofrecognition
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 theexpected costs of abandoning theinitial measurement.
(2)Themethod for depreciation
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 lifeand 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||

 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, assuming the asset is out of useful lifeand statethe expected service life intheend.
(3) Measurement and recognition offixed assets impairment
Impairment and provisions of fixed assets are disclosed on Note IV. 19 Impairment of non-current and non-financial assets.
(4) FixedAssets under finance leases
Afinance 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 over the shorter of the lease terms and the useful lives of the leased assets.
(5) Others
Afixed 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 be recognized in profit or loss in the period 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 value and related tax.
The Company conducts a review ofuseful life, expected net realizablevalue and depreciation
methods of thefixed asset at least onan annual base.Any change is regarded as change in
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. accounting estimates.
15.Construction in progress
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 a fixed asset when it is ready forintended use.
Testing method for provision impairment of construction in progress and accrued method for provision impairment please refer toNote IV.19.
16.Borrowing costs
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 recognized 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 time for acquisition, construction or production to get ready fortheir intended use orsale.
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 ofthosefunds.
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 the amounts of specific-purpose borrowings.
During the capitalization period, exchange differences related to a specific-purpose borrowing denominating in foreign currency are all capitalized. Exchange differences in connection with general-purpose borrowings are recognizedin profit or loss inthe period in which they are incurred. Assets qualified for capitalization are the fixed assets, investment properties or inventories which need alongtimeofconstruction orproduction activities before ready forintended usedorsale. 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 recognized as an expense for the current period untiltheacquisition, construction or production is resumed.
17.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 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 thisshall be bookedin theprofit orloss when theyoccur.
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 use rights and buildings are accounted for as fixed
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 thestraight-linemethod.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 and development cost
Cost of research and development is distinguished into the research phase and the development phases.
Cost oftheresearch phase is recognized in theprofit orloss in theperiod in which itis incurred. Unless the following conditions are satisfied, cost of the development phase is recognized in the profit orlossin theperiod in which it isincurred:
It is technically feasibleto complete theintangible asset soas to useit orsell it;
It is clearly invented tocomplete theintangible asset in order touse itor sellit;
 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 going to be used internally;
 There are sufficient technical, financial and other resources to complete the intangible asset and to useit orsell it;
The cost ofthedevelopment oftheintangible can bemeasured reliably.
If the cost cannot be distinguished into the search phase and the development phase, it is recognized in theprofit orlossfor theperiod in which itis incurred.
(3) Impairment of intangible assets
Impairment andprovisions ofintangible assets are disclosed onNote IV.19.
18.Long-term deferred expenditure
An itemlong-term deferred expenses is an expensewhich has been incurred and which has a beneficial period (a period during which an expenseis expected to bring economic benefits to an entity) which is longer than oneyear and which includes at least part of thereporting period during which theexpensewas incurred and subsequent reporting periods.Anitem oflong-term deferred expenses is recognized at theactual amount oftheexpenseincurred and allocated in eachmonth of the beneficial period using thestraight linemethod.
19.Impairment oflong-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 ofindicators of impairment.
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
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 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 flowinindependently.
The Company determines whether goodwill is impaired at least onan annual basis.Thisrequires an estimation ofthepresent value ofthefuture expected cash flows from the asset Groups orsets of asset Groups to which thegoodwill is allocated. Estimatingthepresent value requires theCompany to make an estimateofthe expected future cash flows from theasset Groups orsets of asset Groups and also choosea suitablediscount rate inorder to calculatethe present value ofthosecash flows. Once theloss from above asset impairment isrecognized, therecoverablepart cannot be reserved in the subsequent periods.
After theasset impairment lossis determined, recoverablevalue amounts would notbe returned in future
20.Employee Benefits
The employee benefits ofthecompany include short-term employee benefits, post-employment benefits, termination benefitsand otherlong-term employee benefits:
Short-term employee benefits includes wages, bonuses, allowances and subsidies, welfare, health insurance ,maternity insurance, work injury insurance, housingfunds, labor union funds, employee education funds,non-monetary benefits and etc.Thecompany provides services accounting period in which an employee of thecompany willbe short-term employee benefitsare recognized as liabilities actually incurred andloss account orthecosts associated withtheasset.The non
-monetary benefits are measured at fair value.
Post-employment benefits mainly includebasic old-age insurance, unemployment insuranceand annuities. Post-employment benefits includedefined contributionplans and defined benefit plans. Relevant contribution amount inthedefined contribution plan shall berecognised as cost ofrelated assets or profit or loss during the year.The defined benefit plan inthe company is old-age insurance. Projected unitcredit cost method (“PUC”)was usedbyindependent actuaries engaged bythe Company to determine thepresent valueof thedefined benefit obligations withunbiased and consistent actuarial assumptions regarding population variables and financial variables. Defined benefit obligation was presented with thepresent value and therelated current service cost was accounted into current profit or loss.
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 shall beprocessed inaccordance with otherlong-term employee benefits.
Retirement plan adopts the same principles as the termination benefits. The salaries and insurance
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 the requirements ofa provision.
Other long-term employee benefits provided by the company to employees that is in line with defined contribution plans shall adopt the accounting treatment in accordance with defined contribution plans, otherwise theaccounting treatment ofdefined benefit plans.
21.Accrued liabilities
Recognition of accrued 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) This obligation is current obligation oftheCompany; and,
(2) The performance of this obligation will probably cause economic benefits outflow of the Company; and,
(3) The amount ofthisobligation 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 settlethepresent obligation for estimated liabilities 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 the carrying value ofestimated liabilities.
22.Revenue
(1) Revenue from sales of goods
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 domestic ports settlement, revenue recognition upon the bill of lading acquired from the shipping company and conducted the export declaration; for those product sales employ the FOB oversea ports settlement, revenue recognition upon the export declaration finished and shipment at thebuyer’s receiving dock, as well as acquired the bill of lading from the shipping company.
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 andtheclaim indemnity rate torecognizetheclaim indemnity expense.
(2) Revenue from rendering of service
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 dividing the cost to date by the budgeted total cost.
The outcome of the services rendered can be reliably estimated when revenue from the 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 theservices 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 if cost reimbursement is not 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 either indistinguishableor distinguishable 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 thepercentage of completion.at thebalance 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 ofcontract completion at thebalance sheet date canbe measured 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 tothe percentage ofcompletion.
An expected loss on the construction contract should be recognised as an expense during the year when thetotal contract cost is expected to behigher than thetotal contract 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)oftheconstruction contract is disclosed as advance from customers.
(4) Royalty Revenue
According to thecontract or agreement, therevenue isrecognized onan accrual basis.
(5) Interest Income
The amount of interest revenue should be measured and confirmed in accordance with the length of timefor which theenterprise's cash is used byothers and theactual interest rate.
23.Government Grants
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 theassets and grants related to theincome. 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 recognized immediately in profit or loss for the period.
When received the government grantsactually, recognized 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 Companyand thesubsidymatter,should satisfy theotherconditions (ifany).
A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or loss over the useful life of the related asset. 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 recognized as deferred income, and recognized in profit or loss over the periods in which the related costs are recognized. If the grant is a compensation for related expenses or losses already incurred, thegrant is recognized immediately in profit or lossfor theperiod.
For repayment of a government grant already recognized, if there is a related deferred income, the repayment is offset against the carrying amount of the deferred income, and any excess is recognized in profit or loss for the period. If there is no related deferred income, the repayment is recognized immediately in profit orloss fortheperiod.
24.Deferred tax assets anddeferred tax liabilities
(1) Income tax forthe current 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
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. laws. The calculation for income tax expenses in the current period is based on the taxable income according tothe related tax laws after adjustment to theaccounting profit ofthereporting period. (2) Deferred incometax assets andliabilities
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 income tax liabilities by adopting liabilities methodofbalance 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 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 taxable income used for deducting deductibletemporary 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 tax deduction.
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 paying related liabilities according totaxationregulation.
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 probable that sufficient taxable profit will be available
(3) Income tax expenses
Income tax expenses consist ofcurrent incometax and deferred income tax.
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 the current 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
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
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. value from the offset between current income tax asset and current income tax liability in the financial 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 value after the offset of deferred income tax asset and deferred incometax liability.
25Leases
Afinance 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 is a lease other than a finance lease.
(1)TheCompany 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 loss of the period in which they actually arise.
(2)TheCompany 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 toprofit orloss in theperiod inwhich 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 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 isrecognised inprofit or loss when it isincurred.
(4) Financial lease to which theCompany is theleasor
At the commencement of a financial lease to which the Company 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 onmaturity andpresented 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.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Contingency lease rental income is recognised in profit or loss when it is received or becomes receivable.
26.Significantaccount judgment andestimates
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 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 adjustmentsto thecarrying amounts ofthe assets orliabilities 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 recognized within the same period. Where the changes in accounting estimates affect both current period and future period, the changes are recognized within the period of change and future period.
At balance sheet date, the followings are the significant areas where the Company needs to make judgment, estimates and assumptionsover thevalueof itemsin thefinancial statements:
(1) Revenue recognition ofconstruction in progress
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 according to the percentage of completion at the balance sheet date. The percentage of completion is recognisedbased on the method in Notes IV.22 and is calculated accumulatively in the years when the construction contract isexecuted.
There would be a great amount of judgement in thedetermination of the percentage of completion, the incurred construction cost, the expected total construction revenue and total construction cost, and the recoverability of the contract. The management of the project make the judgement based on previous experience. The change of expected total contract revenue and total cost, and the change of the estimated result of the contract may have huge impact on the revenue and cost of the current period ortheperiod afterwards
(2) Classification oflease
The Company classifies leases as operating lease and financing lease according to the rule stipulated in the Accounting 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 substantially held the risks and rewards related totheownership ofleased assets.
(3)Allowance forbad 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 thechange ofestimation.
(4) Impairment of inventories
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
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 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 the period ofchange.
(5)Thefair value offinancial 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 onthe fairvalue offinancial instruments.
(6) Held-to-maturity investment
The non-derivative financial assets which meet the conditions of fixed or determinable repayment amount and fixed maturity date and the company has a clear intention and ability to hold to maturity classified as held-to-maturity investments. A large amount of judgmentis required to carry out this classification. In the course of the judgment, the Company will evaluate the willingness and ability to hold such investment to maturity. Unless the specific situation (For example, an investment that is insignificant in the amount close to the due date), if the Company fails to hold the investment until maturity, all such investments shall be reclassified to the available-for-sale financial assets, And the financial assets shall not be divided into held-to-maturity investments within the two full fiscal years of the current fiscal year and thereafter. In the event of such a situation, it may have a material impact on the value of the underlying financial assets presented in the financial statements and may affect theCompany's financial instrument risk management strategy.
(7) Impairment of held-to maturity investment
Whether the impairment of held-to-maturity investments to a large extent depends on management's judgment. The objective evidence of impairment includes the issuer's serious financial difficulties that prevent the financial asset from continuing to be traded in an active market and is unable to perform the terms of the contract (for example, to pay interest or default). In the course of the judgment, the Company shall assess the impact of the objective evidence of impairment on the expected future cash flowof theinvestment.
(8) Impairment of available-for-saleassets
Whether the impairment of available-for-sale financial assets to a large extent dependson 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,Thedefault rate andtherisk of opponents.
(9) Impairment of non-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 anyindication 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 ofthefuture cash flows expected to bederived 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 theadditional cost directly attributableto thedisposal oftheasset.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 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 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 onreasonableand supportable assumptions.
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 theestimationof present valueof futurecash flowis made.
(10) Depreciation and amortization
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 or amortization, the rate of depreciation or amortization is revised.
(11)Deferred tax assets
The group shall recognize 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 valueofdeferred tax assets can bedetermined.
(12) 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 ontheincome tax and deferred income tax ofthecurrent period during thefinal determination. (13)Accrued liabilities
According with the terms of the contract, the existing knowledge and historical experience, product quality assurance and expected contract losses, delay in delivery of liquidated damages are estimated and recognized 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 recognized 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 andtimevalue ofmoneyand 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 the profit or loss in future.
(14) Fair value measurement
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 you can not get the first level of input value, the company will hire
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. third-party qualified appraisers toperform the valuation.
V.Taxation
1.Taxes andsurcharges applicableto theCompany
||
|-|
|Taxbase|
|Accordingtotherevenuesfromsalestocalculatetheoutputtax,andusethebalanceafterdeductthedeductibleinputtaxtopaytheVAT|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|Taxableprofits|

 Notes: CS[2016] No. 36, which was about the Notice on the Comprehensively Launched Pilot for Replacing BusinessTaxbyVATthat beexecuted on1May 2016.
2Taxes andsurcharges applicableto theprimary subsidiaries
(1)TsannKuen (Zhangzhou)Enterprise Co., Ltd. (hereafter,TKL)
||
|-|
|Taxbase|
|Accordingtotherevenuesfromsalestocalculatetheoutputtax,andusethebalanceafterdeductthedeductibleinputtaxtopaytheVAT|
|Businesstaxtaxablerevenue|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|Taxableprofits|

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

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||
|-|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|SumofVATpayable,consumptiondutypayableandbusinesstaxpayableforthereportingperiod,andexemptanddeductibletax|
|Taxableprofits|

 (3)Tsannkuen Edge Intelligence Co.,Ltd. (hereafter,TKEI)
||
|-|
|Taxbase|
|Accordingtotherevenuesfromsalestocalculatetheoutputtax,andusethebalanceafterdeductthedeductibleinputtaxtopaytheVAT|
|Taxableprofits|

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

 VI.Notes on major items inconsolidatedfinancialstatements oftheCompany
1.Monetaryfunds
Item 2017.06.30 2016.12.31 Cashonhand 890,072.87 703,668.78 Bankdeposits 609,590,639.06 748,793,446.55 Total 610,480,711.93 749,497,115.33 Ofwhich:totalamountdepositedinoverseas 15,048,762.42 19,034,720.76 Notes:thebalanceoffixedtimedepositatfinancialinstitutionforinterestinthebankdepositsatperiod-endwas
RMB346,541,506.84.
2.Financialassetsmeasuredbyfairvaluewithchangesinfairvaluerecognisedinprofitorloss
Item 2017.06.30 2016.12.31
Tradingfinancialassets 1,881,750.00 0.00
Including:Derivativefinancialassets 1,881,750.00 0.00
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Total 1,881,750.00 0.00 (2)Explanation
Thederivativefinancialassetisforwardforeignexchangecontractsignedwithfinancialinstitutions.
3.Notesreceivable
(1)Disclosurebyclassification
Item 2017.06.30 2016.12.31 Bankacceptancebill 990,000.00 1,341,076.70 Total 990,000.00 1,341,076.70 (2)ThereisnonotesreceivablewhicehadpledgedbytheCompany
(3)Thereisnonotesreceivable whichhadendorsedbytheCompany orhaddiscountedandhadnotdueon thebalancesheetdateattheperiod-end
(4) There is no notes transferred to accounts receivable because drawer of the notes fails to executed the contractoragreement
4.Accountsreceivable
(1)Disclosurebyclassification
2017.06.30
Item Bookbalance Baddebtprovision
Bookvalue AmountProportion(%) AmountWithdrawalproportion(%)
Accountsreceivableof
individualsignificance
0.00 0.00 0.00 0.00 0.00 subjecttoindividually
assessmentforimpairment
Accountsreceivable
portfoliosubjectto 252,843,881.35 100.00 10,264,356.72 4.06 242,579,524.63 impairmentbycreditrisk:
Including:Portfoliobyage 250,427,706.55 99.04 10,264,356.72 4.10 240,163,349.83 Portfoliobyrelatedparties 2,416,174.80 0.96 0.00 0.00 2,416,174.80 Accountsreceivableof
individuallyinsignificance
0.00 0.00 0.00 0.00 0.00 subjecttoindividually
assessmentforimpairment
Total 252,843,881.35 100.00 10,264,356.72 4.06 242,579,524.63 2016.12.31
Item Bookbalance Baddebtprovision
Bookvalue AmountProportion(%) AmountWithdrawalproportion(%)
Accountsreceivableof
individualsignificance
subjecttoindividually 0.00 0.00 0.00 0.00 0.00 assessmentfor
impairment
Accountsreceivable
portfoliosubjectto
285,221,438.01 100.00 12,134,821.63 4.25 273,086,616.38 impairmentbycredit
risk:
Including:Portfolioby
282,541,651.92 99.06 12,134,821.63 4.29 270,406,830.29 age
Portfoliobyrelated
2,679,786.09 0.94 0.00 0.00 2,679,786.09 parties
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Accountsreceivableof
individually
insignificancesubject
0.00 0.00 0.00 0.00 0.00 toindividually
assessmentfor
impairment
Total 285,221,438.01 100.00 12,134,821.63 4.25 273,086,616.38①Inthegroups,accountsreceivableadoptingaginganalysismethodformeasurementofallowanceforbaddebt: 2017.06.30
Aging
Amount Baddebtprovision Proportion(%) Within1year 241,927,778.05 1,764,428.22 0.73 Including:1-90days 227,669,455.35 0.00 0.00 91-180days 13,003,560.80 1,300,356.08 10.00 181-270days 816,544.05 244,963.22 30.00 271-365days 438,217.85 219,108.92 50.00 1-2years 8,359,638.64 8,359,638.64 100.00 2-3years 140,289.86 140,289.86 100.00 Total 250,427,706.55 10,264,356.72 4.10②Inthegroups,accountsreceivableusingrelatedpartygroupmethodformeasurementofallowanceforbaddebt 2017.06.30
Item
Accountreceivable Baddebtprovision Withdrawalproportion(%) Relatedpartygroup 2,416,174.80 0.00 0.00 Total 2,416,174.80 0.00 0.00 (2)Recognisation,recoveryandreversalofallowanceforbaddebt
The amount of allowance for bad debts recognised during the Reporting Period is RMB14,447.09; the amount of recovered or reversedallowanceforbaddebtsduringtheReportingPeriodisofRMB1,494,519.39.
(3)AccountsreceivablewrittenoffduringtheReportingPeriod
Item Amount Sporadicaccountsreceivablewrittenoff 375,945.52 (4)Detailsoftopfiveaccountsreceivable
The total amount of top five accounts receivables summarized by debtors as at the end of the Reporting Period isRMB144,581,493.74,accountingfor57.19%ofthetotalaccountsreceivableasattheendoftheReportingPeriod, thetotalcorrespondingallowanceforbaddebtsisRMB413,034.06.
5.Advancestosuppliers
(1)Disclosurebyage
2017.06.30 2016.12.31
Item
Amount Proportion(%) Amount Proportion(%) Within1year 24,784,622.14 100.00 6,964,904.97 100.00 Total 24,784,622.14 100.00 6,964,904.97 100.00
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. (2)Detailsoftopfiveadvancetosuppliers
The total amount of top five advance to suppliers as at the end of Reporting Period is RMB23,582,222.49,accountingfor95.14%ofthetotaladvancetosuppliers.
6.Interestreceivable
(1)Disclosurebyclassification
Item 2017.06.30 2016.12.31 Fixeddepositreceipt 1,038,777.61 5,519.56 Total 1,038,777.61 5,519.56 7.Otherreceivable
(1)Disclosurebyclassification
2017.06.30
Bookbalance Baddebtprovision
Item
Bookvalue AmountProportion(%) AmountWithdrawalproportion(%)
Otheraccountsreceivableof
individualsignificance
0.00 0.00 0.00 0.00 0.00 subjecttoindividually
assessmentforimpairment
Otheraccountsreceivable
portfoliosubjectto 38,254,366.21 97.24 1,652,453.93 4.32 36,601,912.28 impairmentbycreditrisk:
Including:Portfoliobyage 38,010,355.12 96.62 1,652,453.93 4.35 36,357,901.19 Portfoliobyrelatedparties 244,011.09 0.62 0.00 0.00 244,011.09 Otheraccountsreceivableof
individuallyinsignificance
1,087,067.04 2.76 0.00 0.00 1,087,067.04 subjecttoindividually
assessmentforimpairment
Total 39,341,433.25 100.00 1,652,453.93 4.20 37,688,979.32 2016.12.31
Bookbalance Baddebtprovision
Item
Bookvalue AmountProportion(%) AmountWithdrawalproportion(%)
Otheraccountsreceivableof
individualsignificance
0.00 0.00 0.00 0.00 0.00 subjecttoindividually
assessmentforimpairment
Otheraccountsreceivable
portfoliosubjectto 40,404,849.01 96.02 1,698,478.04 4.20 38,706,370.97 impairmentbycreditrisk:
Including:Portfoliobyage 40,156,836.65 95.43 1,698,478.04 4.23 38,458,358.61 Portfoliobyrelatedparties 248,012.36 0.59 0.00 0.00 248,012.36 Otheraccountsreceivableof
individuallyinsignificance
1,675,385.11 3.98 0.00 0.00 1,675,385.11 subjecttoindividually
assessmentforimpairment
Total 42,080,234.12 100.00 1,698,478.04 4.04 40,381,756.08①Inthegroups,otheraccountsreceivableadoptingaginganalysismethodformeasurementofallowanceforbad
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. debt:
2017.06.30
Aging
Otheraccountsreceivable Baddebtprovision Proportion(%) Within1year 36,600,680.76 242,779.57 0.66 Including:1-90days 35,207,976.15 0.00 0.00 91-180days 1,026,997.38 102,698.77 10.00 181-270days 213,864.10 64,159.23 30.00 271-365days 151,843.13 75,921.57 50.00 1-2years 1,404,674.36 1,404,674.36 100.00 Over3years 5,000.00 5,000.00 100.00 Total 38,010,355.12 1,652,453.93 4.35②Otherreceivableofindividuallyinsignificancesubjecttoindividuallyassessmentforimpairment
Withdrawal Baddebt
Items Bookbalance Withdrawalreason
proportion(%) provision
ChinaExport&CreditInsurance Guaranteed deposits, absence of 648,450.00
Corporation,FujianBranch impairment
Guaranteed deposits, absence of onghaiPeople'sCourt 200,000.00
impairment
Alipay(China)NetworkTechnology Guaranteed deposits, absence of 103,000.00
Co.,Ltd. impairment
Guaranteed deposits, absence of ShunheTradingCo.,Ltd. 35,617.04
impairment
NiuhaiE-commerce(Shanghai)Co., Guaranteed deposits, absence of 30,000.00
Ltd. impairment
Guaranteed deposits, absence of JiangsuSuningE-CommerceCo.,Ltd. 30,000.00
impairment
BeijingDangdangkewenE-Commerce Guaranteed deposits, absence of 20,000.00
Co.,Ltd. impairment
ShanghaiFeiniujidaE-commerceCo., Guaranteed deposits, absence of 10,000.00
Ltd. impairment
Guaranteed deposits, absence of GomeOnlineE-CommerceCo.,Ltd. 10,000.00
impairment
Total 1,087,067.04
(2)Recognisation,recoveryandreversalofallowanceforbaddebt
The amount of allowance for bad debts recognised during the Reporting Period is RMB8,948.70; the amount of recovered or reversedallowanceforbaddebtsduringtheReportingPeriodisofRMB54,972.81.
(3)OtheraccountsreceivablewrittenoffduringtheReportingPeriod
Therewasnoactualwrite-offotheraccountsreceivable.
(4)Disclosurebyaccountnature
Nature 2017.06.30 2016.12.31 Non-relatedparty 39,097,422.16 41,832,221.76 Related 244,011.09 248,012.36 Total 39,341,433.25 42,080,234.12 (5)Detailsoftopfiveotherreceivables
Closingbalance Items NatureofOR Closing balance Aging %oftotal ofbaddebt provision
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. No.1
Exporttaxrefunds 18,000,000.00 Within1year 45.75
No.2 Electricityfees 4,399,636.31 Within1year 11.18
No.3
Rental&water&electricityfees 1,761,289.95 Within1year 4.48
No.4 Rental&water&electricityfees 1,701,287.13 Within1year 4.32
No.5
Rental&water&electricityfees 1,145,124.46 Over1year 2.91 1,145,124.46 27,007,337.85 68.64 1,145,124.46 8.Inventory
(1)Disclosurebyclassification
2017.06.30 2016.12.31
Item Impairment Impairment
Bookbalance Bookvalue Bookbalance Bookvalue allowance allowance
Rawmaterials 77,901,293.89 18,400,947.63 59,500,346.26 91,666,560.32 28,867,144.56 62,799,415.76 Goodsinprocess 9,215,822.53 0.00 9,215,822.53 15,235,243.63 0.00 15,235,243.63 Self-manufacture
dsemi-finished 19,971,102.69 1,572,057.26 18,399,045.43 14,871,592.53 1,572,057.26 13,299,535.27 goods
Finishedgoods 114,556,816.85 16,771,287.15 97,785,529.70 141,540,287.35 16,689,572.67 124,850,714.68 Low-value
2,671,053.19 0.00 2,671,053.19 5,214,202.94 0.00 5,214,202.94 consumables
Materialsin
3,212,753.50 0.00 3,212,753.50 2,170,009.62 0.00 2,170,009.62 transit
Total 227,528,842.65 36,744,292.04 190,784,550.61 270,697,896.39 47,128,774.49 223,569,121.90 (2)Impairmentallowanceforinventories
Increasedamount Decrease
Item 2016.12.31 2017.06.30 Withdrawal Others Reverseorwrite-off Others
Rawmaterials 28,867,144.56 1,423,925.33 0.00 11,890,122.26 0.00 18,400,947.63 Self-manufactured
1,572,057.26 0.00 0.00 0.00 0.00 1,572,057.26 semi-finishedgoods
Finishedgoods 16,689,572.67 181,057.74 0.00 99,343.26 0.00 16,771,287.15 Total 47,128,774.49 1,604,983.07 0.00 11,989,465.52 0.00 36,744,292.04 (3)The basis of recognizing impairment allowance and the reason of recovering or writing off the impairmentallowanceforinventories
Thebasisofrecognitionof
Thereasonofrecoveringimpairment Thereasonsforinventory Item impairmentallowancefor
allowanceforinventories impairmentwrite-off inventories
Market prices decrease, and
Rawmaterials resulting in rawmaterial’s net Saleordisposal realizablevaluelowerthancost
Market prices decrease, and
Finishedgoods resulting in finished goods' net Saleordisposal realizablevaluelowerthancost
(4)ClosingbalanceoftheinventorywhichincludescapitalizedborrowingexpenseswasRMB0.
9.Othercurrentassets
Item 2017.06.30 2016.12.31
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Inputtaxtobededucted 11,488,319.23 8,708,135.99 Financialproducts 270,000,000.00 130,646,348.02 Total 281,488,319.23 139,354,484.01 10.Available-for-salefinancialassets
(1)Thesituationofavailable-for-salefinancialassets
2017.06.30 2016.12.31
Item Depreciation Depreciation
Bookbalance Bookvalue Bookbalance Bookvalue reserves reserves
Availableforsaleequityinstruments 40,000.00 0.00 40,000.00 40,000.00 0.00 40,000.00 Including:measuredbycost 40,000.00 0.00 40,000.00 40,000.00 0.00 40,000.00 Total 40,000.00 0.00 40,000.00 40,000.00 0.00 40,000.00 (2)Available-for-salefinancialassetsmeasuredatcostattheperiod-end
Shareho Bookbalance Depreciationreserves
lding Cash proporti bonus on ofthe Investee
Increa Decre Increa Decr
among Report 2016.12.31 2017.06.30 2016.12.31 2017.06.30
se ase se ease the ing investee Periods(%) Xiamen
Associationof
Enterpriseswith 40,000.00 40,000.00 1.48 Foreign
Investment
Total 40,000.00 40,000.00 1.48 11.Investmentproperty
(1)Investmentpropertyadoptedthecostmeasurementmode
Constructionin
Item Housesandbuildings Landuseright Total progress
I.Originalbookvalue
1.Openingbalance 130,947,241.39 29,260,577.51 0.00 160,207,818.90
||
|-|
|2.Increasedamountoftheperiod|
|3.Decreasedamountoftheperiod|
|4.Closingbalance|
|II. Accumulated Depreciation and accumulatedamortization|
|1.Openingbalance|
|2.Increasedamountoftheperiod|
|(1)Withdrawaloramortization|
|(2)Transferredfromfixedassets|
|3.Decreasedamountoftheperiod|
|(1)Disposal|
|(2) Investment property transferred into fixedassets|
|4.Closingbalance|
|III.Depreciationreserves|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Constructionin
Item Housesandbuildings Landuseright Total progress
||
|-|
|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 1,656,969.66 Notes Notes:Lvyuan threecountryvillaisalimitedpropertyhousepurchasedbytheCompany’ssubsidiaryTKS in1999fromShanghai Lvsheng Real Estate Development Co., Ltd. without expropriating and transferring the land. In January of 2006, the property was certifiedtobelongtoTKS throughthejointstatementmadebyShanghaiLvshengRealEstateDevelopmentCo.,Ltd.andresidents committeeofLvyuancommunityofHuangduTowninJiadingDistrict.
12.Fixedassets
(1)Listoffixedassets
Improvement
Housesand Machinery Electronicdevice, Transportation expenseof
Item Total buildings equipment modulesandothers equipment leasedfixed
assets
I.Originalbookvalue
1.Openingbalance 93,887,488.58 162,550,581.94 1,120,150,534.38 16,572,864.54 68,159,024.27 1,461,320,493.71 2. Increased amount
-818,017.63 609,420.67 17,894,470.30 2,318,418.51 94,944.84 20,099,236.69 oftheperiod
(1)Purchase 0.00 324,902.53 14,998,691.95 2,287,222.90 238,507.11 17,849,324.49 (2)Transfered from
project under 0.00 981,600.00 3,299,419.24 50,000.00 0.00 4,331,019.24 construction
(3)Transfer from
0.00 0.00 0.00 0.00 0.00 0.00 investmentproperty
(4) Impact of changes
-818,017.63 -697,081.86 -403,640.89 -18,804.39 -143,562.27 -2,081,107.04 inexchangerates
(5)Other 0.00 0.00 0.00 0.00 0.00 0.00 3.Decreased amount
0.00 10,743,991.27 33,189,532.30 721,666.39 1,371,246.15 46,026,436.11 oftheperiod
(1)DisposalorScrap 0.00 10,743,991.27 33,189,532.30 721,666.39 1,371,246.15 46,026,436.11 (2)Transferred from
0.00 0.00 0.00 0.00 0.00 0.00 investmentproperty
4.Closingbalance 93,069,470.95 152,416,011.34 1,104,855,472.38 18,169,616.66 66,882,722.96 1,435,393,294.29 II.Accumulative
depreciation
1.Openingbalance 45,297,112.71 102,936,654.31 1,017,384,276.21 15,606,000.14 61,616,747.83 1,242,840,791.20 2. Increased amount
2,562,836.21 2,757,703.68 12,347,529.89 211,567.89 1,446,461.62 19,326,099.29 oftheperiod
(1)Withdrawal 2,151,862.77 3,002,089.10 12,600,877.15 222,333.46 1,561,918.05 19,539,080.53
(2) Transfered from
574,386.06 0.00 0.00 0.00 0.00 574,386.06
investmentproperty
(3) Impact of changes
-163,412.62 -244,385.42 -253,347.26 -10,765.57 -115,456.43 -787,367.30
inexchangerates
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Improvement
Housesand Machinery Electronicdevice, Transportation expenseof
Item Total buildings equipment modulesandothers equipment leasedfixed
assets
3.Decreased amount
1,533,167.97 8,045,698.59 31,060,381.66 656,730.17 1,276,974.32 42,572,952.71 oftheperiod
(1)DisposalorScrap 0.00 8,045,698.59 31,060,381.66 656,730.17 1,276,974.32 41,039,784.74 (2) Transfer from
1,533,167.97 0.00 0.00 0.00 0.00 1,533,167.97 investmentproperty
4.Closingbalance 46,326,780.95 97,648,659.40 998,671,424.44 15,160,837.86 61,786,235.13 1,219,593,937.78 III.Depreciation
reserves
1.Openingbalance 0.00 22,351,922.28 21,410,291.72 5,594.19 182,883.96 43,950,692.15 2. Increased amount
0.00 -38,206.90 -6,315.84 -122.79 0.00 -44,645.53 oftheperiod
(1)Withdrawal 0.00 0.00 0.00 0.00 0.00 0.00 (2) Impact of changes
0.00 -38,206.90 -6,315.84 -122.79 0.00 -44,645.53 inexchangerates
3.Decreased amount
0.00 2,577,072.01 1,094,216.31 142.18 79,471.24 3,750,901.74 oftheperiod
(1)DisposalorScrap 0.00 2,577,072.01 1,094,216.31 142.18 79,471.24 3,750,901.74 4.Closingbalance 0.00 19,736,643.37 20,309,759.57 5,329.22 103,412.72 40,155,144.88 IV.Bookvalue
1.Closingbookvalue 46,742,690.00 35,030,708.57 85,874,288.37 3,003,449.58 4,993,075.11 175,644,211.63 2. Opening book
48,590,375.87 37,262,005.35 81,355,966.45 961,270.21 6,359,392.48 174,529,010.36 value
(2)Fixedassetswithpendingownershipregistration
Item Bookvalue Reasonforpending Lvyuanthreecountryvilla 589,019.02 Notes Jingyinggarden 181,073.90 Underprocessing Notes:Lvyuan threecountryvillaisalimitedpropertyhousepurchasedbytheCompany’ssubsidiaryTKS in1999fromShanghai Lvsheng Real Estate Development Co., Ltd. without expropriating and transferring the land. In January of 2006, the property was certifiedtobelongtoTKS throughthejointstatementmadebyShanghaiLvshengRealEstateDevelopmentCo.,Ltd.andresidents committeeofLvyuancommunityofHuangduTowninJiadingDistrict.
13.Constructioninprogress
||
|-|
|Item|
|Sporadicproject|
|Total|

 14.Intangibleassets
Item Landuseright Software Total I.Originalbookvalue
1.Openingbalance 18,402,842.68 23,523,906.41 41,926,749.09
2.Increasedamountoftheperiod 192,552.72 5,923,067.49 6,115,620.21
(1)Purchase 578,709.67 5,902,000.00 6,480,709.67
(2)Impactofchangesinexchangerates -386,156.95 21,067.49 -365,089.46
3.Decreasedamountoftheperiod 0.00 9,191,967.69 9,191,967.69
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Item Landuseright Software Total (1)Disposal 0.00 9,191,967.69 9,191,967.69 (2)Impactofchangesinexchangerates 0.00 0.00 0.00 4.Closingbalance 18,595,395.40 20,255,006.21 38,850,401.61 II.Accumulatedamortization
1.Openingbalance 2,548,872.23 15,537,599.74 18,086,471.97 2.Increasedamountoftheperiod 235,616.25 1,356,677.95 1,592,294.20 (1)Withdrawal 295,133.07 1,346,167.67 1,641,300.74 (2)Impactofchangesinexchangerates -59,516.82 10,510.28 -49,006.54 3.Decreasedamountoftheperiod 0.00 9,191,967.69 9,191,967.69 (1)Disposal 0.00 9,191,967.69 9,191,967.69 (2)Impactofchangesinexchangerates 0.00 0.00 0.00 4.Closingbalance 2,784,488.48 7,702,310.00 10,486,798.48 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 15,810,906.92 12,552,696.21 28,363,603.13 2.Openingbookvalue 15,853,970.45 7,986,306.67 23,840,277.12 15.Long-termdeferredcharge
Item 2016.12.31 Increasedamount Amortizationamount Decrease 2017.06.30 Telecommunicationsengineering 69,866.41 0.00 26,000.04 0.00 43,866.37 Housesandbuildingsrenovationexpenses 4,072,375.78 0.00 669,804.67 0.00 3,402,571.11 Total 4,142,242.19 0.00 695,804.71 0.00 3,446,437.48 16.Deferredincometaxassets/deferredincometaxliabilities
(1)Deferredincometaxassetshadnotbeenoff-set
2017.06.30 2016.12.31
Item
Deductible
Deferredincome
Deductible
Deferredincome temporary temporary
taxassets taxassets difference difference
Assetsimpairmentprovision 75,723,996.75 11,682,236.37 90,927,159.61 14,054,185.03 Accruedexpenses 10,322,333.77 1,867,490.22 16,244,337.85 2,785,902.38 Transactionfinancialliabilities 0.00 0.00
Payrollliability 538,310.35 91,512.76 521,002.29 88,570.39 Depreciationoffixedassets 15,156.88 2,576.67 14,669.59 2,493.83 Unrealizedprofitsfromintragrouptransactions 488,262.07 91,549.14 694,807.76 173,701.94 Undistributeddeficit 0.00 0.00 0.00 0.00 Other 0.00 0.00 0.00 0.00
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Total 87,088,059.82 13,735,365.16 108,401,977.10 17,104,853.57 (2)Deferredincometaxliabilitieshadnotbeenoff-set
2017.06.30 2016.12.31
Item
Deductible Deferredincometax Deductibletemporary Deferredincome temporarydifference liabilities difference taxliabilities Depreciationoffixedassets 2,953,648.52 738,412.13 3,024,559.40 756,139.85 Tradingfinancialassets 1,881,750.00 282,262.50 0.00 0.00 Other 32,343.35 5,498.37 31,303.41 5,321.58 Total 4,867,741.87 1,026,173.00 3,055,862.81 761,461.43 (3)Listofunrecognizeddeferredincometaxassets
Item 2017.06.30 2016.12.31 Impairmentprovisionofthefixedassets 9,648,297.45 10,161,743.82 Baddebtprovision 1,227,923.67 1,580,473.40 Accruedexpenses 14,763,561.91 21,476,401.95 Impairmentofinventories 2,216,029.70 2,243,389.48 Payrollliability 1,344,224.86 1,946,095.13 Undistributeddeficit 101,374,634.02 98,961,110.41 Total 130,574,671.62 136,369,214.19 (4)Thedeductiblelossesofunrecognizeddeferredtaxassetsshallbematuredinthefollowingyears Year 2017.06.30 2016.12.31 Year2017 12,981,405.81 15,169,401.17 Year2018 21,156,026.72 15,995,805.21 Year2019 8,344,201.75 12,504,247.51 Year2020 11,293,904.22 14,123,000.61 Year2021 84,304,491.63 32,619,175.26 Year2022 7,093,216.05 0.00 Year2023 0.00 0.00 Year2024 0.00 0.00 Year2025 3,770,671.54 0.00 Year2026 9,069,767.26 0.00 Year2027 7,771,261.60 0.00 Total 165,784,946.58 90,411,629.76 17.Othernon-currentassets
Item 2017.06.30 2016.12.31 Prepaidmoldfee 1,033,480.93 735,106.87 Prepaymentforequipment 2,019,056.57 513,166.36 Total 3,052,537.50 1,248,273.23
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 18.Short-termborrowings
(1)Disclosurebyclassification
Item 2017.06.30 2016.12.31 Loanforexportinvoicefinancing 125,326,400.00 0.00 Total 125,326,400.00 0.00 19.Notespayable
Item 2017.06.30 2016.12.31 Bankacceptancebill 0.00 6,500,000.00 Tradeacceptance 10,517,009.49 16,751,704.93 Total 10,517,009.49 23,251,704.93 Therewasnoamountoftheduebutnotpaynotespayableattheperiod-end.
20.Accountspayable
(1)Listofaccountspayable
Item 2017.06.30 2016.12.31 Within1year 470,126,093.51 584,203,266.68 Over1years 3,564,697.41 5,215,192.25 Total 473,690,790.92 589,418,458.93 (2)Detailsofsignificantaccountspayableremainingunsettledformorethanoneyear
Unpaid/Un-carry-over Repaidornotafterbalancesheet Item 2017.06.30
reason date
NingboChaochaoElectricalEquipmentCo.,
500,237.01 Qualitydisputes No
Ltd.
NingboJiesiluoElectricalEquipmentCo.,
979,964.67 Qualitydisputes No
Ltd.
Total 1,480,201.68
21.Advancefromcustomers
(1)Listofadvancefromcustomers
Item 2017.06.30 2016.12.31 Within1year 12,468,575.93 6,763,325.48 Over1years 2,374,757.18 4,423,698.48 Total 14,843,333.11 11,187,023.96 (2)Detailsofsignificantadvancefromcustomersagingoveroneyear
Item Amount Unpaid/Un-carry-overreason WhirlpoolEMEAS.p.A. 468,917.45 Receiveinadvance BRITANIA 401,214.79 Receiveinadvance BoostVitalityAsiaPte.Ltd. 272,563.32 Receiveinadvance
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Item Amount Unpaid/Un-carry-overreason ZOJIRUSHI 156,472.83 Receiveinadvance Philip(China)InvestmentCo.,Ltd. 138,171.29 Receiveinadvance Total 1,437,339.68
22.Employeebenefitspayable
(1)Listofemployeebenefitspayable
||
|-|
|Item|
|I.Short-termsalary|
|II.Post-employmentbenefit-definedcontributionplans|
|III.Terminationbenefits|
|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|
|Total|

 (3)Listofdefinedcontributionplan
||
|-|
|Item|
|1.Basicpensionbenefits|
|2.Unemploymentinsurance|
|Total|

 23.Taxespayable
Categoryoftaxes 2017.06.30 2016.12.31 Businesstax 0.00 784,938.20 Corporateincometax 234.87 12,621,020.07 VAT 818,869.41 0.00 Personalincometax 404,127.26 463,263.27 EducationSurcharge 644,824.83 1,008,596.50 Urbanmaintenanceandconstructiontax 628,929.62 966,427.13
Realestaretax 801,166.71 0.00
Stampduty 86,818.08 1,120,822.94
Total 3,384,970.78 16,965,068.11
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 24.Interestpayable
Item 2017.06.30 2016.12.31 Interestsonshort-termborrowings 170,592.29 0.00 Total 170,592.29 0.00 25.Otheraccountspayable
(1)Otheraccountspayablelistedbynatureoftheaccount
Item 2017.06.30 2016.12.31 Within1year 49,567,165.77 50,629,928.01 Over1years 6,875,002.54 7,781,735.18 Total 56,442,168.31 58,411,663.19 (2)Othersignificantaccountspayablewithagingoveroneyear
Item 2017.06.30 Unpaid/Un-carry-overreason Cashpledge 5,765,388.00 Repaidattheterminationofcontract Paymentofmoldfee 670,841.53 Paymentonbehalf,unpaid Total 6,436,229.53
26.Long-termpayrollpayable
Item 2017.06.30 2016.12.31 I.Post-employmentbenefit-netliabilityofdefinedbenefit
250,205.83 187,928.74 plans
II.Terminationbenefits 0.00 0.00 III.Otherlong-termbenefits 0.00 0.00 Total 250,205.83 187,928.74 27.Sharecapital
Increase/decrease
Capitalization
Item Openingbalance Issuingnew Share Closingbalance ofpublic Other Subtotal
shares donation
reserves
Totalshares 185,391,680.00 185,391,680.00 28.Capitalreserves
Item 2016.12.31 Increase Decrease 2017.06.30 Sharepremium 210,045,659.80 0.00 0.00 210,045,659.80 Othercapitalreserves 86,763,305.99 0.00 0.00 86,763,305.99 Total 296,808,965.79 0.00 0.00 296,808,965.79
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 29.Othercomprehensiveincome
ReportingPeriod
Less:recorded
inother
Amount comprehensive
Item 2016.12.31 Less: Attributable Attributable 2017.06.30 before incomein
Income toownersof tominority
incometaxin priorperiod
tax theCompany shareholders
current andtransferred
expense aftertax aftertax
period toprofitor
lossincurrent
period
I.Other
comprehensive
incomethatwillnot
bereclassifiedinto
profit/loss
Including:changesin
netliabilitiesorassets
withadefinedbenefit 15,614.61 0.00 15,614.61 planupon
remeasurement
Shareofother
comprehensive
incomeofinvestees
thatcannotbe
reclassifiedinto
profit/lossunderthe
equitymethod
II.Other
comprehensive
incometobe
subsequently
reclassifiedinto
profit/loss
Including:sharesof
othercomprehensive
incomeofinvestees
thatwillbe
reclassifiedinto
profit/lossunderthe
equitymethod
Balancefromthe
translationofforeign
8,476,287.84 -1,688,350.45 -1,266,262.84 -422,087.61 7,210,025.00 currencyfinancial
statements
Total 8,491,902.45 -1,688,350.45 0.00 0.00 -1,266,262.84 -422,087.61 7,225,639.61 30.Surplusreserves
Item 2016.12.31 Increase Decrease 2017.06.30 Statutorysurplusreserves 29,946,218.17 0.00 0.00 29,946,218.17 Total 29,946,218.17 0.00 0.00 29,946,218.17
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 31.Retainedearnings
Item 2017.06.30 2016.12.31 Openingbalanceofretainedprofitsbeforeadjustments 90,217,504.90 69,510,872.20Totalopeningbalanceofretainedprofitsbeforeadjustments(Increase+，decrease-)
Openingbalanceofretainedprofitsafteradjustments 90,217,504.90 69,510,872.20 Add:NetprofitattributabletoownersoftheCompany 11,066,574.11 48,229,497.36 Less:Withdrawalofstatutorysurplusreserves 0.00 8,983,696.66 Withdrawalofdiscretionarysurplusreserves 0.00 0.00 Withdrawalofgenericriskreserve 0.00 0.00 Dividendofcommonstockpayable 22,247,001.60 18,539,168.00 Dividendofcommonstocktransferintosharecapital 0.00 0.00 Closingretainedprofits 79,037,077.41 90,217,504.90 32.RevenueandCostofSales
Item ReportingPeriod Sameperiodoflastyear Revenuefrommainoperations 840,312,489.24 770,647,435.81 Revenuefromotheroperations 29,371,269.44 27,461,253.46 Total 869,683,758.68 798,108,689.27 Costsofmainoperations 723,287,830.92 653,194,377.94 Costofotheroperations 16,219,638.01 9,622,787.16 Total 739,507,468.93 662,817,165.10 33.Businesstaxandsurcharges
Item ReportingPeriod Sameperiodoflastyear Businesstax 0.00 968,527.44 EducationSurcharge 1,642,018.73 1,000,327.29 Urbanmaintenanceandconstructiontax 1,657,297.65 1,006,737.00 Realestatetax 1,475,222.72 0.00 Landusetax 348,464.92 0.00 Stampduty 572,220.24 0.00 Other 139.35 287.43 Total 5,695,363.61 2,975,879.16 34.Salesexpenses
Item ReportingPeriod Sameperiodoflastyear Exportfees 15,649,265.39 14,112,135.80 Employeeremunerations 9,644,113.99 10,567,113.82 Claimsforsalespromotionalexpenses 992,673.57 10,541,659.04 Salescommissionandaftersalesservicefees 1,189,343.37 1,942,157.66 Assetsleaseexpenses 192,646.13 465,396.72 Businesstravelcharges 1,059,897.57 1,589,854.17 Officeexpenses 329,126.35 363,891.34 Transportfees 658,337.56 740,092.37 Others 413,622.66 419,860.62 Total 30,129,026.59 40,742,161.54
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 35.Administrationexpenses
Item ReportingPeriod SameperiodoflastyearR&Dexpenses 36,181,239.58 36,526,821.94 Employeeremuneration 16,404,001.41 15,003,011.98 Depreciationandamortization 5,736,884.90 6,319,391.07 Rentalcharges 8,178,777.89 9,747,380.98 Insuranceexpenses 1,149,100.21 574,767.94 Officeexpenses 1,093,362.53 1,456,109.90 Travelexpenses 1,540,597.10 1,874,034.60 Consultantfees 910,423.05 1,657,306.91 Maintenanceexpenses 2,378,906.44 2,222,064.47 Taxesandsurcharges 0.00 2,069,710.13 Others 1,209,465.82 3,300,040.15 Total 74,782,758.93 80,750,640.07 36.Financialcosts
Item ReportingPeriod Sameperiodoflastyear Interestexpenses 410,091.63 142,611.32 Less:interestincome 3,529,133.78 3,684,238.09 Exchangegainsandlosses 11,511,175.66 -7,477,904.70 Bankcharges 792,248.01 1,053,218.95 Total 9,184,381.52 -9,966,312.52 37.Impairmentlossonassets
Item ReportingPeriod Sameperiodoflastyear
|||
|-|-|
|-1,540,543.50|-1,541,116.89|
|1,604,983.07|780,305.75|

 Total 64,439.57 -760,811.14 38.Gainsfromchangesinfairvalue
Reporting Sameperiodoflast Sourceoffairvaluechange
Period year Financialassetsmeasuredbyfairvalueandthechangesbeincludedinthecurrentprofits
1,881,750.00 27,300.00 andlosses
Ofwhich,gainsonthechangesinthefairvalueofderivativefinancialinstruments 1,881,750.00 27,300.00 Financialliabilitiesmeasuredbyfairvalueandthechangesincludedinthecurrentgains
0.00 5,617,750.00 andlosses
|||
|-|-|
|1,881,750.00|5,645,050.00|

 39.Investmentincome
Item ReportingPeriod Sameperiodoflastyear Long-termequityinvestmentincomeaccountedbyequitymethod 0.00 0.00 Investment income arising from disposal of long-term equity
0.00 0.00 investments
Investment income received from financial assets measured by fair
valueandthechangesbeincludedinthecurrentprofitsandlossesduring 0.00 0.00 holdingperiod
Investmentincomereceivedfromdisposalof financialassetsmeasured
by fair value and the changes be included in the current profits and 576,100.00 -4,442,911.95
lossesduringholdingperiod
Investmentincomefromfinancialproducts 1,148,630.14 0.00
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Item ReportingPeriod Sameperiodoflastyear Others 0.00 8,474.00 Total 1,724,730.14 -4,434,437.95 40.Non-operatingincome
Amountrecordedintothe Item ReportingPeriod Sameperiodoflastyear non-recurringgainsand losses Totalgainsfromdisposalofnon-currentassets 336,752.14 542,527.01 336,752.14 Including:Gainsfromdisposaloffixedassets 336,752.14 542,527.01 336,752.14 Unpayableoverdueaccountspayable 844,169.97 357,502.62 844,169.97 Governmentsubsidies 888,232.00 2,627,972.00 888,232.00 Other 1,283,928.79 821,047.77 1,283,928.79 Total 3,353,082.90 4,349,049.40 3,353,082.90 Ofwhich,governmentsubsidiesrecordedintocurrentprofitsandlosses:
Reporting Sameperiodof Relatedto Whethernon-currentgainsor Item
Period lastyear assets/relatedincome lossesornot
||||||
|-|-|-|-|-|
|Patentssubsidies|40,600.00|0.00|Relatedtotheincome|Yes|
||0.00|100,000.00|Relatedtotheincome|Yes|
||0.00|836,053.00|Relatedtotheincome|Yes|
|Governmentsubsidyinexportcreditinsurance|537,632.00|179,419.00|Relatedtotheincome|Yes|
||0.00|1,000,000.00|Relatedtotheincome|Yes|
|Subsidiesfortechnologicalinnovation|300,000.00|0.00|Relatedtotheincome|Yes|
||0.00|507,500.00|Relatedtotheincome|Yes|
|Other|10,000.00|5,000.00|Relatedtotheincome|Yes|
|Total|888,232.00|2,627,972.00|||

41.Non-operatingexpenses
Recordedintheamount Item ReportingPeriod Sameperiodoflastyear ofthenon-recurring gainsandlosses Lossondisposalofnon-currentassets 229,400.08 17,353.82 229,400.08 Including:Lossondisposaloffixedassets 18,235.42 0.00 18,235.42 Lossonscrapedfixedassets 190,452.01 16,717.75 190,452.01 Fixed assetsinventoryloss 20,712.65 636.07 20,712.65 Fines 19,000.00 3,448.44 19,000.00 Donation 50,000.00 0.00 50,000.00 Other 0.00 40,922.71 0.00 Total 298,400.08 61,724.97 298,400.08 42.Incometaxexpense
(1)Listsofincometaxexpense
Item ReportingPeriod Sameperiodoflastyear
Currentincometaxexpense -238,708.37 2,015,929.23
Deferredincometaxexpense 3,654,776.13 741,396.70
Total 3,416,067.76 2,757,325.93
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. (2)Reconciliationofaccountprofitandincometaxexpenses:
Item ReportingPeriod Totalprofits 16,981,482.49 Currentincometaxexpenseaccountedbytaxandrelevantregulations 4,245,370.62 Impactofdifferingtaxratesapplicabletosubsidiaries -2,788,992.50 Impactofadjustmentforpriorperiodtaxexpenses 0.00
||
|-|
|0.00|
|73,481.75|
|0.00|
|3,448,534.19|
|0.00|
|-1,562,326.30|

 Incometaxexpense 3,416,067.76 43.Othercomprehensiveincome
SeeNoteVI29formoredetails.
44.Supplementaryinformationtocashflowstatement
(1)Othercashreceivedrelevanttooperatingactivities:
||||
|-|-|-|
|Item|ReportingPeriod|Sameperiodoflastyear|
|Governmentsubsidies|888,232.00|2,627,972.00|
|Interestincome|2,128,069.08|3,375,534.00|
|Rentincome|15,875,926.97|13,693,655.65|
|Fundsincurrentaccountandothers|12,821,718.26|15,109,150.18|
|Total|31,713,946.31|34,806,311.83|

 (2)Othercashpaymentsrelatingtooperatingactivities
Item ReportingPeriod Sameperiodoflastyear Penaltiesanddonationspaid 69,000.00 448.44 Bankcharges 791,760.75 1,043,931.11 Salesexpensesandgeneralandadministrativeexpensespaidbycash 84,375,936.83 57,843,445.56 Fundsincurrentaccountandothers 51,230,059.86 41,760,971.41 Total 136,466,757.44 100,648,796.52
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. (3)Othercashreceivedrelevanttoinvestmentactivities
Item ReportingPeriod Sameperiodoflastyear Torecoverthematuritytimedepositsthatforpurposeto
42,313,208.55 75,400,000.00 earninterestincomeinfinancialinstitutions
Total 42,313,208.55 75,400,000.00 (4)Othercashpaidrelevanttoinvestmentactivities
Item ReportingPeriod Sameperiodoflastyear Depositsinfinancialinstitutionsforthepurposeofearninginterestincome 377,386,926.35 169,327,000.00 Total 377,386,926.35 169,327,000.00 (5)Othercashreceivedrelevanttofinancingactivities
Item ReportingPeriod Sameperiodoflastyear Inter-banklendingofcapitalofrelatedparties 6,774,375.98 4,519,265.19 Total 6,774,375.98 4,519,265.19 45.Supplementaryinformationtothestatementofcashflows
(1)Supplementaryinformationtothestatementofcashflows
Sameperiodoflast Supplementalinformation ReportingPeriod
year 1.Reconciliationofnetprofittonetcashflowsgeneratedfromoperating
activities
Netprofit 13,565,414.73 24,290,577.61 Add:Provisionforimpairmentofassets 64,439.57 -760,811.14 Depreciationoffixedassets,ofoil-gasassets,ofproductivebiologicalassets 21,306,844.24 24,386,736.40 Amortizationofintangibleassets 1,641,300.74 898,579.42 Long-termunamortizedexpenses 695,804.71 780,533.53 Lossesondisposaloffixedassets,intangibleassetsandotherlong-termassets(gains:
-318,516.72 -542,527.01 negative)
Lossonretirementoffixedassets(gainpresentedby"-"prefix) 211,164.66 17,353.82 Lossesfromvariationoffairvalue(gainpresentedby"-"prefix) -1,881,750.00 -5,645,050.00 Financialcost(gainpresentedby"-"prefix)) 8,316,196.20 7,938,507.95 Investmentloss(gainpresentedby"-"prefix) -1,724,730.14 4,434,437.95 Decreaseindeferredincometaxassets((gainpresentedby"-"prefix) 3,369,488.41 732,126.64 Increaseindeferredincometaxliabilities
264,711.57 9,270.06 (“-”meansdecrease)
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Decreaseininventory(gainpresentedby"-"prefix) 31,179,588.22 68,280,511.94 Decreaseinaccountsreceivablefromoperatingactivities(gainpresentedby"-"prefix) 14,697,969.99 34,939,749.18 Increaseinpayablesfromoperatingactivities(“-”meansdecrease) -148,899,222.14 -219,932,002.64 Others
Netcashflowsgeneratedfromoperatingactivities -57,511,295.96 -60,172,006.29 2.Significantinvestingandfinancingactivitiesinvolvenocash:
Debt-to-capitalconversion
Convertiblebondstobeexpiredwithinoneyear
Fixedassetsunderfinancelease
3.Movementofcashandcashequivalents:
Closingbalanceofcashequivalents 263,939,205.09 379,934,827.25 Less:cashatthebeginningoftheperiod 738,195,729.53 675,824,861.29 Add:Closingbalanceofcashequivalents
Less:Cashatthebeginningoftheperiod
Netincreaseincashandcashequivalents -474,256,524.44 -295,890,034.04 (2)NetCashpaidforobtainingthesubsidiary
□Applicable√Notapplicable
(3)NetCashreceivefromdisposalofthesubsidiary
□Applicable√Notapplicable
(4)Cashandcashequivalents
Item ReportingPeriod Sameperiodoflastyear I.Cash 263,939,205.09 379,934,827.25 Including:Cashonhand 890,072.87 733,184.57 Bankdepositondemand 263,049,132.22 379,201,642.68 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 263,939,205.09 379,934,827.25 Ofwhich,therestrictedcashandcashequivalentsoftheCompanyand
thesubsidiariesoftheGroupused
Note1:thecashandcashequivalentsexcludetherestrictedcashandcashequivalentstheCompanyandthesubsidiariesoftheGroup used.
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Note2: Time deposits for the purpose of earning interest income in financial institutions is RMB346,541,506.84. Cash served as payment relating to investing activities shall be listed and deducted from the balance of cash and cash equivalents at the end of currentyear.
46.Theassetswiththeownershiporuserightrestricted
Item 2017.6.30 Restrictedreason
Time deposits for the purpose of earning interest income in financial Monetarycapital 346,541,506.84
institutions
Total 346,541,506.84
47.Foreigncurrencymonetaryitems
(1)Foreigncurrencymonetaryitems
Item Closingforeigncurrencybalance Exchangerate ClosingconverttoRMBbalance Monetarycapital
Including:USD 53,064,417.83 6.7744 359,479,592.15 JPY 30,522,187.07 0.0605 1,846,134.48 IDR 4,937,289,376.13 0.0005 2,508,138.70 EUR 17,312.86 7.7496 134,167.74 GBP 9,519.60 8.8144 83,909.56 HKD 423,127.52 0.8679 367,240.84 HUF 81,016.00 0.0250 2,025.40 FRF 7.00 7.0886 49.62 TWD 5,606,394.00 0.2226 1,248,028.16 Total 365,669,286.65 Short-termloans
Including:USD 18,500,000.00 6.7744 125,326,400.00 Total 125,326,400.00 Accountreceivable
Including:USD 36,495,204.28 6.7744 247,233,111.78 IDR 24,308,640.00 0.0005 12,348.79 EUR 365,535.32 7.7496 2,832,752.51 JPY 37,273,971.00 0.0605 2,254,516.14 TWD 798,000.00 0.2226 177,641.18 Total 252,510,370.40 Accountpayable
Including:USD 7,912,250.89 6.7744 53,600,752.43 EUR 217,794.19 7.7496 1,687,817.85 HKD 920,031.98 0.8679 798,514.16 JPY 7,811,200.00 0.0605 472,460.43 IDR 1,040,790,881.85 0.0005 528,721.77 TWD 4,729,224.00 0.2226 1,052,763.10 Total 58,141,029.74 Otheraccountsreceivable
Including:JPY 462,290.00 0.0605 27,961.61 USD 182,689.49 6.7744 1,237,611.68 IDR 1,048,137,849.00 0.0005 532,454.03 TWD 1,256,197.00 0.2226 279,639.50 Total 2,077,666.82 Otheraccountpayable
including:HKD 131,390.80 0.8679 114,036.71 JPY 102,246.00 0.0605 6,184.35 USD 1,520,800.17 6.7744 10,302,508.67
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. Item Closingforeigncurrencybalance Exchangerate ClosingconverttoRMBbalance IDR 832,934,040.00 0.0005 423,130.49 TWD 1,318,266.00 0.2226 293,456.56 Total 11,139,316.78 (2) Description of overseas operating entities including the disclosure of main overseas places of business, recording currency and selection basis of significant overseas operating entities and disclosure reason for theentitywhoserecordingcurrencychanges.
TheCompany'sholdingsub-subsidiariescompanyPt.StarComgisticIndonesiaislocatedatWestJavaprovinceinIndonesia,dueto Pt. Star Comgistic Indonesia are mostly settled in US dollars by usual purchases and sales, so that it adopt the US dollar as its functionalcurrency.
The Company's holding sub-subsidiaries company SCPDI is located at West Java province in Indonesia, due to SCPDI are mostly settledinIDRbyusualpurchasesandsales,sothatitadopttheIDRasitsfunctionalcurrency.
The Company's holding sub-subsidiaries company TKEI is located at Taiwan, due to TKEI are mostly settled in TWD by usual purchasesandsales,sothatitadopttheTWDasitsfunctionalcurrency.
TheCompany'sholdingsub-subsidiariescompanyEastSinoislocatedatHongkong,duetoEastSinoaremostlysettledinHKDby usualpurchasesandsales,sothatitadopttheHKDasitsfunctionalcurrency.
The Company's holding sub-subsidiaries company ORIENT STAR INVESTMENTS LIMITED is located at Hongkong, due to ORIENT STAR INVESTMENTS LIMITED are mostly settled in US dollas by usual purchases and sales, so that it adopt the US dollasasitsfunctionalcurrency.
VII. Changes ofscope ofconsolidationfinancialstatements
1.Businesscombinationnotunderthesamecontrol:naught
2.Businesscombinationunderthesamecontrol:naught
VIII. Equity in othermain entities
1.Theequityinsubsidiaries
(1)Thestructureoftheenterprisegroup
||||||||
|-|-|-|-|-|-|-|
|Name|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||Acquiredmethod|
|||||Directly|Indirectly||
|TsannKuen (Zhangzhou)EnterpriseCo.,Ltd.|Zhangzhou|Zhangzhou|Manufacturehomeelectronicappliance|75|75|Acquired throughincorporation|
|TsannKuen (Shangha)EnterpriseCo.,Ltd.|Shanghai|Shanghai|Manufacturehomeelectronicappliance|46.875|62.5|Acquired throughbusinesscombination undercommoncontrol|
|TsannKuen (Zhangzhou) SouthPort Electronics Enterprise Co.,Ltd.(TKN)|Zhangzhou|Zhangzhou|Manufacturehomeelectronicappliance|56.25|75|Acquired throughincorporation|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.
||||||||
|-|-|-|-|-|-|-|
|Name|Mainoperatingplace|Registrationplace|Natureofbusiness|Holdingpercentage(%)||Acquiredmethod|
|||||Directly|Indirectly||
|Shanghai Canxing TradingCo.,Ltd(STD)|Shanghai|Shanghai|Saleofhomeappliance|56.25|75|Acquired throughincorporation|
|East Sino DevelopmentLimited.(EastSino)|HongKong|HongKong|Investment,Trading|75|100|Acquired throughbusinesscombination undercommoncontrol|
|Pt.Star ComgisticIndonesia(SCI)|Indonesia|Indonesia|Manufacturehomeelectronicappliance|75|100|Acquired throughbusinesscombination undercommoncontrol|
|Pt.Star Comgistic PropertyDevelopment Indonesia（“SCPDI”）|Indonesia|Indonesia|Realestatedevelopment|75|100|Acquired throughincorporation|
|OrientStarInvestmentsLimited(OrientStarInvestments)|HongKong|HongKong|Investment,Trading|75|100|Acquired throughbusinesscombination underuncommoncontrol|
|Tsann Kuen Edge IntelligenceCo.,Ltd.|Taiwan|Taiwan|DesignIndustry.R&DDevelopmentServiceBusiness|75|100|Acquired throughbusinesscombination undercommoncontrol|
|Xiamen Tsannkuen HomeAppliance Design Co., Ltd.(“TKCD”)|Xiamen|Xiamen|Professionaldesignservices|100|100|Acquired throughincorporation|

(2)Significantnotwhollyownedsubsidiary
||||||
|-|-|-|-|-|
|Name|Holdingproportionofminorityshareholders(%)|Profitandlossattributabletominorityequityduringcurrentyear|Dividendsattributabletominorityshareholders|Totalamountofminorityequityattheendofcurrentyear|
|TsannKuen(Zhangzhou)EnterpriseCo.,Ltd.|25|7,787,225.00|10,103,416.93|317,566,044.24|
|TsannKuen(Shangha)EnterpriseCo.,Ltd.|53.125|-1,623,409.03||44,855,487.78|
|TsannKuenEdgeIntelligenceCo.,Ltd.|25|-1,962,415.75||1,769,786.82|
|Pt.StarComgisticIndonesia(SCI)|25|-955,891.87||23,304,818.05|

 (3)Themainfinancialinformationofsignificantnotwhollyownedsubsidiary
||||||||
|-|-|-|-|-|-|-|
|Nameofsubsidiaries|Closingbalance||||||
||Currentassets|Non-currentassets|Totalassets|Currentliabilities|Non-currentliability|Totalliabilities|
|TsannKuen(Zhangzhou)EnterpriseCo.,Ltd.|1,575,965,099.85|371,689,118.26|1,947,654,218.11|677,107,778.65|282,262.50|677,390,041.15|
|TsannKuen(Shangha)EnterpriseCo.,Ltd.|70,363,652.02|17,344,065.29|87,707,717.31|3,273,857.96||3,273,857.96|
|TsannKuenEdgeIntelligenceCo.,Ltd.|6,876,251.66|5,325,646.70|12,201,898.36|4,867,046.90|255,704.18|5,122,751.08|
|Pt.StarComgisticIndonesia(SCI)|58,766,882.75|76,658,037.14|135,424,919.89|41,467,235.57|738,412.13|42,205,647.70|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. (Continued)
||||||||
|-|-|-|-|-|-|-|
|Nameofsubsidiaries|Openingbalance||||||
||Currentassets|Non-currentassets|Totalassets|Currentliabilities|Non-currentliability|Totalliabilities|
|TsannKuen(Zhangzhou)Enterprise Co.,Ltd.|1,624,051,073.12|364,451,512.20|1,988,502,585.32|708,973,640.65||708,973,640.65|
|TsannKuen(Shangha)Enterprise Co.,Ltd.|72,271,032.35|18,580,465.06|90,851,497.41|3,361,809.30||3,361,809.30|
|TsannKuenEdgeIntelligenceCo.,Ltd.|13,840,007.66|4,808,941.09|18,648,948.75|4,270,700.85|5321.58|4,276,022.43|
|Pt.StarComgisticIndonesia(SCI)|50,276,296.04|76,114,006.87|126,390,302.91|26,310,784.21|756,139.85|27,066,924.06|

(Continued)
||||||
|-|-|-|-|-|
|Name|ReportingPeriod||||
||Operationrevenue|Netprofit|Totalcomprehensiveincome|Operatingcashflow|
|TsannKuen (Zhangzhou)EnterpriseCo.,Ltd.|819,506,110.82|31,148,900.00||-41,034,228.98|
|TsannKuen (Shangha)EnterpriseCo.,Ltd.|429,020.81|-3,055,828.76||-2,883,754.57|
|TsannKuenEdgeIntelligenceCo.,Ltd.|3,528,954.02|-7,849,662.99||-7,771,230.43|
|Pt.StarComgisticIndonesia(SCI)|49,326,459.51|-3,823,567.47||1,806,173.69|

(Continued)
||||||
|-|-|-|-|-|
|Name|Sameperiodoflastyear||||
||Operationrevenue|Netprofit|Totalcomprehensiveincome|Operatingcashflow|
|TsannKuen (Zhangzhou)EnterpriseCo.,Ltd.|757,339,909.16|36,328,907.41||94,566,449.14|
|TsannKuen (Shangha)EnterpriseCo.,Ltd.|1,319,683.80|1,615,462.46||2,516,500.80|
|TsannKuenEdgeIntelligenceCo.,Ltd.|2,322,933.29|-3,929,651.24||-4,130,727.32|
|Pt.StarComgisticIndonesia(SCI)|30,021,531.63|-10,158,628.72||-2,690,472.42|

2. The transactions which change theowner’s equity of subsidiaries, and through the transactions that the ownerstillcontrolthesubsidiaries
□Applicable√Notapplicable
IX.Therisk related financial instruments
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 the risks to ensure
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. that the riskscan be controlled withina limited range.
The Company analyzes the rationality of risk variables and possible impacts of possible changes on current gain and loss orshareholders’equity through sensivity 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 is done on the assumption that each variable changes inisolation.
(I)Thetargets andpolicies ofrisks management
The target of risks management is to obtain the proper balance between the risks and benefits, 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 the risk within a limited range.
1.Market risk
(1) Foreign exchangerisk
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, East Sino by HKD and
Orient Star Investments
by USD, the other main business activities of the Company used by RMB. On 30 June 2017, 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 2017.6.30 2016.12.31 Monetarycapital 365,669,286.65 373,034,883.47 Accountreceivable 252,510,370.40 247,566,867.43 Otheraccountsreceivable 2,077,666.82 991,675.55 Accountspayable 58,141,029.74 52,464,873.92 Otheraccountpayable 11,139,316.78 2,965,091.63 Short-termloans 125,326,400.00 0.00 The Group purchases foreign currency forward contracts to reduce the foreign exchange risk, and foreign currency forward contracts shall be based ontheamount of foreign currency assets.
(2) Interest rate risk-cash flowchange risk
Due to the risk of changes in cash flows of a financial instrument is mainly concerned with the floating rate of bank borrowings. The company's policy is to maintain a floating interest rate on
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. the borrowings.
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 30June2017.
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 believes theCompany’s credit risk has been greatly reduced.
The Company's circulating funds deposited in banks which with high credit ratings, so that the lower creditrisk of circulating 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 theuseofbank borrowings and ensures toabide byloanagreements.
X. Disclosureofthefairvalue
1.Closingfairvalueofassetsandliabilitiescalculatedbyfairvalue
Closingfairvalue
Item
Fairvalue Fairvalue Fairvalue
measurement measurement measurement Total itemsatlevel1 itemsatlevel2 itemsatlevel3
I.Consistentfairvaluemeasurement
Financialassetsmeasuredbyfairvalueandthe
changesbeincludedinthecurrentprofitsand
losses
1.Tradingfinancialassets
(1)Debtinstrumentsinvestment
(2)Equitytoolinvestment
(3)Derivativefinancialassets 1,881,750.00
1,881,750.00 Totalassetsofconsistentfairvaluemeasurement 1,881,750.00 1,881,750.00 II.Tradingfinancialliabilities
Including:tradablebondissued
Derivativefinancialliabilities
Others
Totalliabilitiesofconsistentfairvalue
measurement
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 2.Marketpricerecognitionbasisforconsistentandinconsistentfairvaluemeasurementitemsatlevel1 Basedontheidenticalassetsorliabilitiesacquiredonunadjustedquotedinanactivemarketatbalancesheetday. XI.Related party andrelatedtransaction
1.Detailsoftheparent
|||||
|-|-|-|-|
|Whetherrelatedtransaction|Typeofincorporation|Registrationplace|LegalRepresentative:|
|Finalcontrolcompany|INC|Taiwan|Chen Yanjun|

（Continued）
|||||
|-|-|-|-|
|Registeredcapital|ProportionofshareheldbyparentcompanyagainsttheCompany(%)|Proportionofvotingrights|Theultimatecontrollerofthe|
|||ownedbyparentcompanyagainsttheCompany(%)||
||||enterprise|
|TWD3,000,000,000.00|42.90|44.68|WuCankun|

2.SubsidiariesoftheCompany
SeeNoteVIII.1“Theequityinsubsidiaries”.
3.Detailsofotherrelatedparties
Name Relationship
SinoGlobalDevelopmentLtd. Undersameactualcontroller
Thecompanydirectlycontrolledbythekeymanagementandclosedfamily XiamenShengmingElectronicsCo.,Ltd.
members
WUWHAMARESTAURANTMANAGEMENT
Ultimateholdingcompanyhaveequity
CO.,LTD.INXIAMEN
TsannKuenEnterpriseCo.,Ltd. Undersameactualcontroller
FastThreeE-commerceServiceCo.,Ltd. Undersameactualcontroller
GoldMineChainEnterpriseCo.,Ltd. Undersameactualcontroller
StarInternationalTravelCo.,Ltd. Sameultimateholdingcompany
StarcomgisticAustraliaPtyLtd Undersameactualcontroller
4.Transactionswithrelatedparties
(1)Transactionsthroughpurchaseorsellgoodsandacceptorsupplyservices
①Thesituationofpurchasesgoodsoracceptsservices
|||||||
|-|-|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Theapprovaltradecredit|Whetherexceedtradecreditornot|Sameperiodoflastyear|
|XiamenShengmingElectronicsCo.,Ltd.|Purchaseofgoods|16,738,518.44|40,000,000.00|No|14,355,901.32|
|TsannKuenEnterpriseCo.,Ltd.|Purchaseofgoods|19,035.91|100,000.00|No|12,265.48|
|GoldMineChainEnterpriseCo.,Ltd.|Purchaseofgoods|392.98||Yes||
|STARCOMGISTICCAPITALCO.,LTD.|Purchaseofgoods|2,876.99|40,000.00|No||
|Total||16,760,824.32|||14,368,166.80|

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.②Thesituationofsellsgoodsorrenderingservices
|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
|STARCOMGISTICCAPITALCO.,LTD.|Saleofgoods|7,922,076.14|7,864,689.34|
|TsannKuenEnterpriseCo.,Ltd.|Saleofgoods|570.82||
|GoldMineChainEnterpriseCo.,Ltd.|Saleofgoods|85,749.96||
|Total||8,008,396.92|7,864,689.34|

 (2)Informationofrelatedlease
①TheCompanyisastheleasor
|||||
|-|-|-|-|
|Nameoflessee|Categoryofleasedassets|ReportingPeriod|Sameperiodoflastyear|
|WUWHAMARESTAURANTMANAGEMENTCO.,LTD.INXIAMEN|Houseproperty|32,760.00|32,760.00|
|Total||32,760.00|32,760.00|

②TheCompanyisasthelessee
|||||
|-|-|-|-|
|Nameoflessor|Categoryofleasedassets|ReportingPeriod|Sameperiodoflastyear|
|STARCOMGISTICCAPITALCO.,LTD.|Houseproperty|691,394.42|78,672.13|
|Total||691,394.42|78,672.13|

 (3)Assetstransfer,Debtrestructuringbetweenrelatedparties
|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
|StarcomgisticAustraliaPtyLtd|Saleoffixedassets|17,664.40||
|TsannKuenEnterpriseCo.,Ltd.|Saleoffixedassets||6,882.63|
|Total||17,664.40|6,882.63|
|TsannKuenEnterpriseCo.,Ltd.|Purchaseoffixedassets|177,486.58||
|FastThreeE-commerceServiceCo.,Ltd.|Purchaseoffixedassets|36,433.06||
|Total||213,919.64||

(4)Inter-banklendingofcapitalofrelatedparties
|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
|STARCOMGISTICCAPITALCO.,LTD.|Borrowingcapital||4,519,265.19|
|SinoGlobalDevelopmentLtd.|Borrowingcapital|6,774,375.98||
|SinoGlobalDevelopmentLtd.|Interestfrominter-bankborrowingandlending|115,259.48||
|Total||6,889,635.46|4,519,265.19|

 (5)Otherrelated-partytransactions
|||||
|-|-|-|-|
|Relatedparty|Content|ReportingPeriod|Sameperiodoflastyear|
|StarInternationalTravelCo.,Ltd.|Receivingservice|419,093.08||
|FastThreeE-commerceServiceCo.,Ltd.|Receivinglaborservice|34,565.61||
|STARCOMGISTICCAPITALCO.,LTD.|Receivingservice|6,211.35||
|TsannKuenEnterpriseCo.,Ltd.|Offeringlaborservice|33,151.76||
|Total||493,021.80||

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 5.Receivablesandpayablesofrelatedparties
(1)Receivables
||||||
|-|-|-|-|-|
|Nameofitem|Closingbalance||Openingbalance||
||Bookbalance|Baddebtprovision|Bookbalance|Baddebtprovision|
|Accountsreceivable:|||||
|STARCOMGISTICCAPITALCO.,LTD.|2,416,174.80||2,658,068.80||
|GoldMineChainEnterpriseCo.,Ltd.|||21,717.29||
|Total|2,416,174.80||2,679,786.09||
|Otheraccountsreceivable:|||||
|TsannKuenEnterpriseCo.,Ltd.|5,818.27||17,478.11||
|STARCOMGISTICCAPITALCO.,LTD.|207,870.22||201,186.60||
|GoldMineChainEnterpriseCo.,Ltd.|30,322.61||29,347.65||
|Total|244,011.10||248,012.36||

(2)Payables
||||
|-|-|-|
|Nameofitem|Closingbalance|Openingbalance|
|Accountspayable:|||
|XiamenShengmingElectronicsCo.,Ltd.|9,966,993.00|11,632,531.94|
|Total|9,966,993.00|11,632,531.94|
|Prepayment:|||
|WUWHAMARESTAURANTMANAGEMENTCO.,LTD.INXIAMEN|609.59||
|Total|609.59||
|Otheraccountpayable:|||
|XiamenShengmingElectronicsCo.,Ltd.||55,000.00|
|WUWHAMARESTAURANTMANAGEMENTCO.,LTD.INXIAMEN|23,776.60|23,776.60|
|TsannKuenEnterpriseCo.,Ltd.||1,914.91|
|STARCOMGISTICCAPITALCO.,LTD.|38,812.61|15,423.37|
|FastThreeE-commerceServiceCo.,Ltd.||2,171.23|
|SinoGlobalDevelopmentLtd.|6,831,280.73||
|Total|6,893,869.94|98,286.11|

 XII. Stock payment
NosuchcasesinReportingPeriod.
XIII. Commitments andcontingency
1.Significantcommitments
Asoftheendofbalancesheetdate,theirrevocableoperatingleasecommitmentsthattheCompanysignedwereasfollowed: Unit:RMBtenthousands Item 2017.06.30 2016.12.31 Minimumleasepaymentsofirrevocableoperatinglease
1yearafterbalancedate 3,638 3,638
2yearafterbalancedate 3,638 3,638
3yearafterbalancedate 3,638 3,638
Futureyears 116,409 123,685
Total 127,323 134,599
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 2.Contingency
(1) The subsidiary of the Company - TsannKuen China (Shanghai) Enterprise Co., Ltd. (hereafter,TKS) signed the Plant Leasing contract with Shanghai Liangxin Industrial Co., Ltd. (hereafter, SHLX) at November 2007, and leased the plant (including plant affiliatedland,groundbuildingsandrelatedancillaryequipment,etc)locatedinNo.4407CaoanRoadJiadingDistrict,Shanghaito SHLX.The real estate certificate of leasehold isHu Fangdi Jia Zi (2006) No. 011945, thelease periodis from November 2007 to November2019,thepurposetothelesseefortheuseoflegitimatefactoryandstorage. Theprovisionsofcontractpointoutifthe lessee need to build plant because of production should to obtain government and relevantauthorities’ agreements. Except to confiscate thedeposit,thelessor canterminatethecontractanddoesnothavetoundertakeanyresponsibilityifthelessee sublease theleasehold,makeimprovementoradditiontotheleaseholdwithouttoobtainthewrittenconsentfromlessor.
TKS submitted the civil action to Shanghai Jiading District People's Court by cause of action “the lessee SHLX decorated and subleasedtheleaseholdtoShanghaiHujiaFruitSalesLimitedCompany(hereafter,SHHJ)withouttoobtainthewrittenconsentfrom lessor”on28October2015,andrequiredearlyterminationofthePlantLeasingcontractwithSHLX,andrequiredSHHJtoterminate constructionandtorepristinatetheleasehold.
OnNovember20,2016,onthedisputebetweenTKSandHujiaFruitCo.,Ltd.,ShanghaiJiadingDistrictPeople'sCourtmade((2015) JiaMinEr(Commerce)thefirst wordNo.2661)civiljudgment:thedecisionsupportstheclaimsofTKS andHujiaFruitCo.,Ltd. shall immediately stop the infringement within 10 days after the court's judgment takes effect, cease construction and restore the originalappearanceofthesite.
Hujia Fruit Co., Ltd was not satisfied with the first instance verdict and appealed to the Shanghai Second IntermediatePeople’s Court.. On June23, 2017, Shanghai SecondIntermediatePeople’s Court made ((2017) H 02Civil Final Judgement No.3007) and rejectedtheappealofHujiaFruitCo.,Ltd.
(2)AsMTNProducts,Inc./WaterSolutions（HongKong）Ltd.（“MTN/WSL”）didn’tpayrelevantpaymentintimeandfulfillthe orderinaccordancewiththecontract,onNovember23,2016,thesubsidiaryoftheCompanyTKLsubmittedpetitiontoSUPERIORCOURTOFCALIFORNIACOUNTYOFLOSANGELESsuingMTN/WSLforpaymentofUS$707,522.92andUS$1,402,940forreservelosses,totalingUS$2,110,462.92.Asofthedateofthisreport,thecaseisstillpending.
(3)As PhilipsLighting (China) Investment Co., Ltd. ("Philips Lighting") did not pay the relevant payment in accordance with the relevant agreement, the company's subsidiary TKL submitted petition to LonghaiPeople’s Court requesting PhilipsLighting’s paymentofRMB2,499,658.4.Asofthedateofthisreport,thecaseisstillpending.
(4) TsannKuen (Xiamen) Enterprise Co., Ltd. ("Xiamen Tsann Kuen") and Tianyuan (Xiamen) Assets management Co., Ltd. ("Tianyuan Company") signed the "Land Lease Contract (Northwest Corner)" and Housing Lease Contract (North Building) "on June26,2013,the"VenueLeaseContract (SoutheastCorner)"and"HousingLeaseContract(HuarongRoadNo.23)"(part ofthe house) on July 29, 2013. Xiamen Tsann Kuen will lease part of ground and housing in plant located at Xinglong Road No.88. to TianyuanCompanyforbusinessactivities.
AsTianYuanCompanydidnotpaytherentinaccordancewiththecontractintimeandunauthorizeduseofthelease,theCompany filed a lawsuit to the Xiamen Huli District People's Court of to pay the relevant rent. On December 29, 2015, the Huli District
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. People's Court of Xiamen ruled to combine the four cases and hear them. On May 30, 2017, Xiamen Huli DistrictPeople’s Court madethefirstinstancejudgement:TianyuanCompanyshallpayXiamenTsannKuenthepenaltyduetooverduepayment.Whether thetwosideshavereachedanagreementhasnotdecidedyet.
XIV. Events after balancesheetdate
□Applicable√Notapplicable
XV. Othersignificantevents
□Applicable√Notapplicable
XVI. Notes ofmain items inthe financialstatements oftheCompany
1.Accountsreceivable
(1)Accountsreceivableclassifiedbycategory
2017.06.30
Item Bookbalance Baddebtprovision
Bookvalue Amount Proportion(%) Amount Withdrawalproportion(%)
Accounts receivable with
insignificant single amount for
0.00 0.00 0.00 0.00 0.00 which bad debt provision
separatelyaccrued
Accounts receivable withdrawal
ofbaddebtprovisionofbycredit 11,675,968.35 100.00 504,679.35 4.32 11,171,289.00 riskscharacteristics:
Portfoliobyage 11,458,667.65 98.14 504,679.35 4.40 10,953,988.30 Relatedpartygroup 217,300.70 1.86 0.00 0.00 217,300.70 Accounts receivable with
insignificant single amount for
0.00 0.00 0.00 0.00 0.00 which bad debt provision
separatelyaccrued
Total 11,675,968.35 100.00 504,679.35 4.32 11,171,289.00 (Continued)
2016.12.31
Item Bookbalance Baddebtprovision
Bookvalue Amount Proportion(%) Amount Withdrawalproportion(%)
Accounts receivable with
insignificant single amount for
0.00 0.00 0.00 0.00 0.00 which bad debt provision
separatelyaccrued
Accounts receivable withdrawal
ofbaddebtprovisionofbycredit 31,635,877.38 100.00 1,551,245.00 4.90 30,084,632.38 riskscharacteristics:
Portfoliobyage 30,918,276.22 97.73 1,551,245.00 5.02 29,367,031.22 Relatedpartygroup 717,601.16 2.27 0.00 0.00 717,601.16 Accounts receivable with
insignificant single amount for
0.00 0.00 0.00 0.00 0.00 which bad debt provision
separatelyaccrued
Total 31,635,877.38 100.00 1,551,245.00 4.90 30,084,632.38
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd.①Accountsreceivableusingtheageanalysismethodformeasurementofallowanceforbaddebt
2017.06.30
Aging
Amount Baddebtprovision Proportion(%) Within1year 11,453,022.16 499,033.86 4.36 Including:1-90days 6,793,840.13 0.00 0.00 91-180days 4,544,282.83 454,428.28 10.00 181-270days 64,220.12 19,266.04 30.00 271-365days 50,679.08 25,339.54 50.00 1-2years 5,645.49 5,645.49 100.00 Total 11,458,667.65 504,679.35 4.40②Inthegroups,accountsreceivableusingrelatedpartymethodformeasurementofallowanceforbaddebt
2017.06.30
Item
Accountreceivable Baddebtprovision Withdrawalproportion(%) Relatedpartygroup 217,300.70 0.00 0.00
Total 217,300.70 0.00 0.00
(2)Baddebtprovisionwithdrawal,reversedorrecoveredinthereportperiod
The amount of allowance for bad debts recognized during the Reporting Period is RMB0.; the amount of recovered or reversed allowanceforbaddebtsduringtheReportingPeriodisofRMB1,046,565.65.
(3)ParticularsoftheactualverificationofaccountsreceivableduringtheReportingPeriod
(4)Detailsoftopfiveaccountsreceivable
The total amount of top five accounts receivables summarized by debtors as at the end of the Reporting Period is RMB11,903,213.49, accounting for101.95% of the total accounts receivable as at the end of the Reporting Period, thetotalcorrespondingallowanceforbaddebtsisRMB457,608.28.
2.Otheraccountsreceivable
(1)Disclosurebyclassification
2017.06.30
Baddebt
Bookbalance
provision
Item
Withdrawal Bookvalue Amount Proportion(%) Amount proportion
(%)
Other accounts receivable with
insignificant single amount for which 0.00 0.00 0.00 0.00 0.00 baddebtprovisionseparatelyaccrued
Other accounts receivable withdrawn
bad debt provision according to credit 704,387.43 77.63 32,266.35 4.58 672,121.08 riskscharacteristics
Portfoliobyage 704,387.43 77.63 32,266.35 4.58 672,121.08 Relatedpartygroup 0.00 0.00 0.00 0.00 0.00 Other accounts receivable with
insignificant single amount for which 203,000.00 22.37 0.00 0.00 203,000.00 baddebtprovisionseparatelyaccrued
Total 907,387.43 100.00 32,266.35 3.56 875,121.08
(Continued)
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 2016.12.31
Baddebt
Bookbalance
Item provision
Withdrawal Bookvalue Proportion
Amount Amount proportion
(%)
(%)
Other accounts receivable with
insignificant single amount for which 0.00 0.00 0.00 0.00 0.00 baddebtprovisionseparatelyaccrued
Other accounts receivable withdrawn
bad debt provision according to credit 331,154.78 55.46 57,470.55 17.35 273,684.23 riskscharacteristics
Portfoliobyage 285,736.39 47.85 57,470.55 20.11 228,265.84 Relatedpartygroup 45,418.39 7.61 0.00 0.00 45,418.39 Other accounts receivable with
insignificant single amount for which 266,000.00 44.54 0.00 0.00 266,000.00 baddebtprovisionseparatelyaccrued
Total 597,154.78 100.00 57,470.55 9.62 539,684.23 1 Inthegroups,otherreceivableusingtheageanalysismethodformeasurementofallowanceforbaddebt
2017.06.30
Aging
Otheraccountsreceivable Baddebtprovision Proportion(%) Within1year 679,903.33 7,782.25 1.14 Including:1-90days 659,538.83 0.00 0.00 91-180days 0.00 0.00 0.00 181-270days 12,000.00 3,600.00 30.00 271-365days 8,364.50 4,182.25 50.00 1-2years 24,484.10 24,484.10 100.00 Total 704,387.43 32,266.35 4.58 (2)Baddebtprovisionwithdrawal,reversedorrecoveredinthereportperiod
ThewithdrawalamountofthebaddebtprovisionduringtheReportingPeriodwasofRMB0;theamountofthereversedorcollected partduringtheReportingPeriodwasofRMB25,204.20.
(3)ParticularsoftheactualverificationofotheraccountsreceivableduringtheReportingPeriod
Therewasnoactualwrite-offotheraccountsreceivable
(4)Disclosurebyaccountnature
Nature 2017.06.30 2016.12.31 Non-relatedparty 907,387.43 551,736.39 Related 0.00 45,418.39 Total 907,387.43 597,154.78 (5)Thetopfiveotheraccountreceivableclassifiedbydebtoratperiod-end
Items Nature Closing balance Aging %oftotal Closingbalanceofbaddebtprovision No.1 Central collection 595,547.02 0-30days 65.63
No.2 Margin 103,000.00 Over 1 years 11.35
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. No.3 Margin& annual fee 42,000.00 Over 1 years 4.63
No.4 Margin 30,000.00 Over 1 years 3.31
No.5 Daily suspense debit 30,000.00 0-30 days 3.31
Total 800,547.02 88.23
3.Long-termequityinvestment
(1)Long-termequityinvestment
2017.06.30 2016.12.31
Item
Depreciation Depreciatio
Bookbalance Bookvalue Bookbalance Bookvalue reserves nreserves
Investmentto
922,914,701.56 0.00 922,914,701.56 922,914,701.56 0.00 922,914,701.56 thesubsidiary
Total 922,914,701.56 0.00 922,914,701.56 922,914,701.56 0.00 922,914,701.56 (2)Investmenttothesubsidiary
Withdrawn
Closing impairment
balanceof Investee Openingbalance Increase Decrease Closingbalance provisionin
impairment theReporting
provision Period
TKL 921,914,701.56 0.00 0.00 921,914,701.56 0.00 0.00 Xiamen Tsannkuen Home
1,000,000.00 0.00 0.00 1,000,000.00 0.00 0.00 ApplianceDesignCo.,Ltd.
Total 922,914,701.56 0.00 0.00 922,914,701.56 0.00 0.00 4.Revenuesandoperatingcosts
Item ReportingPeriod Sameperiodoflastyear Mainoperations 29,163,387.63 54,967,379.49 Otheroperations 8,772,475.75 9,316,802.67 Total 37,935,863.38 64,284,182.16 Costsofmainoperations 25,654,159.29 50,167,049.69 Otheroperationcost 1,091,104.50 1,244,429.96 Total 26,745,263.79 51,411,479.65 5.Investmentincome
Item ReportingPeriod Sameperiodoflastyear Long-termequityinvestmentincomeaccountedbycostmethod 30,310,250.78 41,472,998.07 Investment income arising from disposal of long-term equity
0.00 66,100,670.73 investments
Others 0.00 8,474.00 Total 30,310,250.78 107,582,142.80
2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. XVII. Supplementary materials
1.Itemsandamountsofextraordinarygainsandlosses
||||
|-|-|-|
|Item|Amount|Explanation|
|Gains or losses arising from disposal of non-current assets(including assetsimpairmentwithdrawnhadbeenoffset)|131,250.15|Mainlywasnon-currentassets|
|Tax return and relief approved ultra vires or without any official approvaldocuments|||
|Taxrebates,reductionsorexemptionsduetoapprovalbeyondauthorityorthelackofofficialapprovaldocuments|888,232.00||
|Capital occupation charges on non-financial enterprises that are recorded intocurrentgainsandlosses|||
|GainsduetothattheinvestmentcostsfortheCompanytoobtainsubsidiaries,associates and joint ventures are lower than the enjoyable fair value of theidentifiablenetassetsoftheinvesteeswhenmakingtheinvestments|||
|Gain/lossonnon-monetaryassetswap|||
|Gain/lossonentrustingotherswithinvestmentsorassetmanagement|||
|AssetimpairmentprovisionsduetoactsofGodsuchasnaturaldisasters|||
|Gainsandlossesfromdebtrestructuring|||
|Expenses on business reorganization, such as expenses on staff arrangements,integration,etc.|||
|Gain/loss on the part over the fair value due to transactions with distinctlyunfairprices|||
|Current net gains and losses of subsidiaries acquired in business combinationunderthesamecontrolfromperiod-begintocombinationdate|||
|Profitandlossfromcontingenciesirrelativetothenormal businessoperationsofcompany|||
|Gain/loss from change of fair value of transactional assets and liabilities, andinvestment gains from disposal of transactional financial assets and liabilitiesand available-for-sale financial assets, other than valid hedging related to theCompany’scommonbusinesses|3,606,480.14|Mainlywastheincomefromsaleofforwardforeignexchangecontractinvestment,changeinfairvalue,financialproductsandothercurrentassetsreturns|
|Depreciationreservesreturnsofreceivableswithseparatedepreciationtest|||
|Gain/lossonentrustmentloans|||
|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-operatingincomeandexpensesotherthantheabove|2,035,200.67||
|Project confirmed with the definition of non-recurring gains and losses andlosses|||
|Less:Incometaxeffects|960,213.95||
|Minorityinterestseffects(aftertax)|1,438,047.96||
|Total|4,262,901.05||

2017Semi-AnnualReportofTsannKuen(China)EnterpriseCo.,Ltd. 2.YieldRateofNetAssetsandEarningsPerShare
|||||
|-|-|-|-|
|ProfitasofReportingPeriod|Weightedaverageyieldrateofnetassets%|EPS(Yuan/share)||
|||EPS-basic|EPS-diluted|
|Net profit attributable to commonshareholdersoftheCompany|1.79|0.06|0.06|
|Net profit attributable to commonshareholders of the Company afterdeduction of non-recurring profit andloss|1.11|0.04|0.04|

3.Differencesbetweenaccountingdataunderdomesticandoverseasaccountingstandards
(1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chineseaccountingstandards:naught
(2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chineseaccountingstandards:naught
(3) Explain reasons for the differences between accounting data under domestic and overseas accounting standards, for audit data adjusting differences had been foreign audited, should indicate the name of the foreigninstitutions:naught