2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd. TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
2014 SEMI-ANNUAL REPORT
August 2014
2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd. Section I. Important Reminders, Contents& Explanation
The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior management staff of Tsann Kuen (China) Enterprise Co., Ltd. (hereinafter referred to as “the Company”) warrant that this report is factual, accurate and complete without any false record,
misleading statement or material omission. And they shall be jointly and severally liable for that. All directors attended the board session for reviewing this report.
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. Chen Zongyi, head of the accounting work& the
accounting division (head of accounting) jointly declare that the financial statements carried in this report are factual, accurate and complete.
English Translation for Reference Only. Should there be any discrepancy between the two versions, the Chinese version shall prevail.
2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd. Contents
Section I. Important Reminders, Contents& Explanation..............................................2 Section II. Company Profile...........................................................................................5 Section III. Highlights of Accounting Data& Financial Indicators................................6 Section IV. Report of the Board of Directors.................................................................9 Section V. Significant Events.......................................................................................17 Section VI. Change in Shares& Shareholders..............................................................24 Section VII. Preferred Shares........................................................................................26 Section VIII. Directors, Supervisors, Senior Management Staff& Employees............27 Section IX. Financial Report.........................................................................................27 Section X. Documents Available for Reference............................................................27
2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd. Explanation
||||
|-|-|-|
|Term||Contents|
|Xiamen Tsann Kuen, MCKB, Company, the|||
||Refers to|TSANN KUEN (CHINA) ENTERPRISE CO., LTD.|
|Company, TKC|||
|Tsann Kuen Zhangzhou, TKL|Refers to|Tsann Kuen Zhangzhou Enterprise Co., Ltd.|
|Tsann Kuen Shanghai, TKS|Refers to|Tsann Kuen China (Shanghai) Enterprise Co., Ltd.|
|South Port Electronics, TKN|Refers to|Tsann Kuen (Zhangzhou) South Port Electronics Enterprise Co., Ltd.|
|Tsann Kuen Institute, LTC|Refers to|Tsann Kuen (Zhangzhou) Vocational Technical Institute|
|STD|Refers to|Shanghai Star Commerce & Trade Co., Ltd.|
|SCCX|Refers to|Xiamen Star Comgistic Capital Co., Ltd|
|East Sino|Refers to|East Sino Development Limited|
|SCI|Refers to|Pt.Star Comgistic Indonesia|
|Yuan|Refers to|RMB Yuan|

2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd. Section II. Company Profile
I. Basic information of the Company
|||||
|-|-|-|-|
|Stock abbreviation|MCKB|Stock code|200512|
|Stock exchange listed with|Shenzhen Stock Exchange|||
|Chinese name of the Company|厦门灿坤实业股份有限公司|||
|Abbr. of the Chinese name of the Company|闽灿坤|||
|English name of the Company|TSANNKUEN(CHINA) ENTERPRISE CO. LTD|||
|Abbr. of the English name of the Company|TKC|||
|Legal representative of the Company Pan Zhiro|ng|||

II. Contact information
||||
|-|-|-|
||Company Secretary|Securities Affairs Representative|
|Name|Sun Meimei|Xiong Jianlin|
||TSANN KUEN Industrial Park, Taiwanese|TSANN KUEN Industrial Park, Taiwanese|
|Contact address|||
||Investment Zone, Zhangzhou, Fujian Province|Investment Zone, Zhangzhou, Fujian Province|
|Tel.|0596-6268161|0596-6268103|
|Fax|0596-6268104|0596-6268104|
|E-mail|mm_sun@tkl.tsannkuen.com|jl_xiong@tkl.tsannkuen.com|

III. Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website address and email address of the
Company during the reporting period?
□ Applicable√ Inapplicable
2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the reporting period?
□ Applicable√ Inapplicable
3. Change of the registered information
□ Applicable√ Inapplicable
2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd. Section III. Highlights of Accounting Data& Financial Indicators I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of any accounting policy or
correction of any accounting error?
□ Yes√ No
Unit: RMB Yuan
|||||
|-|-|-|-|
|Major accounting data Reporting period||Same period of lastyear|YoY +/-（％）|
|Operating revenues|890,216,299.51|877,844,207.80|1.41|
|Net profit attributable to shareholders of the Company|14,857,989.76|10,425,680.85|42.51|
|Net profit attributable to shareholders of the Companyafter deducting non-recurring gains and losses|17,047,602.69|707,622.89|2,309.14|
|Net cash flow from operating activities -33,079,939.03||-63,381,893.64|47.81|
|Basic EPS 0.08||0.06|33.33|
|Diluted EPS 0.08||0.06|33.33|
|Weighted average ROE (%) 2.82||2.12|0.70|
|Major accounting data|As at the end of thereporting period|As at the end of lastyear|+/- (%)|
|Total assets|2,099,877,010.31|1,690,801,284.83|24.19|
|Owners’ equity attributable to shareholders of theCompany|509,872,496.29|520,693,211.26|-2.08|

II. Differences between accounting data under domestic and overseas accounting standards 1. Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards
□ Applicable√ Inapplicable
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards
□ Applicable√ Inapplicable
3. Reasons for accounting data differences under the domestic and overseas accounting standards
□ Applicable√ Inapplicable
2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd. III. Items and amounts of extraordinary gains and losses
||||
|-|-|-|
|Item|Accumulative amountin the current period|Explanation|
|Gains/losses on the disposal of non-current assets (including the offset partof asset impairment provisions)|984,987.08||
|Tax rebates, reductions or exemptions due to approval beyond authority orthe lack of official approval documents|||
|Government grants recognized in the current period, except for thoseacquired in the ordinary course of business or granted at certain quotas oramounts according to the country’s unified standards|1,913,721.00||
|Capital occupation charges on non-financial enterprises that recorded intocurrent gains and losses|||
|Gains due to that the investment costs for the Company to obtainsubsidiaries, associates and joint ventures are lower than the enjoyable fairvalue of the identifiable net assets of the investees when making theinvestments|||
|Gain/loss on non-monetary asset swap|||
|Gain/loss on entrusting others with investments or asset management|||
|Asset impairment provisions due to acts of God such as natural disasters|||
|Gain/loss on debt restructuring|||
|Expenses for business reorganization, such as expenses for staffing,reorganization etc.|||
|Gain/loss on the part over the fair value due to transactions with distinctlyunfair prices|||
|Current gains and losses of subsidies acquired from business combinationunder the same control as from period-begin to combination date|||
|Gain/loss on contingent events irrelevant to the Company’s normalbusiness|||
|Gains and losses on change in fair value from tradable financial assets andtradable financial liabilities, as well as investment income from disposal oftradable financial assets and tradable financial liabilities and financialassets available for sales except for effective hedging related with normalbusinesses of the Company|-12,768,052.50|Gains on sale of forwardexchange contracts, fair valuechanges, wealth managementproducts and other currentassets|
|Reversal of provision for impairment that made impairment testindependently|||
|Gain/loss on loans obtained by entrusting others|||
|Gain/loss on change of the fair value of investing real estate of which thesubsequent measurement is carried out adopting the fair value method|||

2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
||||
|-|-|-|
|Item|Accumulative amountin the current period|Explanation|
|Effect on current gains/losses when a one-off adjustment is made to currentgains/losses according to requirements of taxation, accounting and otherrelevant laws and regulations|||
|Custody fee income when entrusted with operation|||
|Other non-operation income and expenses other than the above|5,180,367.26||
|Other gain/loss items that meet the definition of an extraordinary gain/loss|1,285,415.02|Payments from customersthat had been written off wererecovered.|
|Less: Income tax effects -1,190,531.80|||
|Minority interests effects (after tax) -23,417.41|||
|Total -2,189,612.93|||

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Section IV. Report of the Board of Directors
I. Business review for the reporting period
For the reporting period, the Company achieved operating revenues of RMB 890 million, up1.41% over the same period of last year, with net profit being RMB 15 million. The Company enhanced internal operation and
management, reduced procurement costs, optimized the production and sale processes and strictly controlled the administrative and selling expenses, yielding a YoY growth of42.51% on net profit.
According to the strategic goals set—focusing on main business, improving operational management and
expanding emerging market, with “cash and profit growth” as the highest guiding principal,customers’ needs as the orientation and technological innovation and design integration as the core, the Company built a high-end service mode featuring “high speed, low cost and effective solution ”, created leading advantages in areas fromR&D to marketing and enhanced the supporting supply chain management, so as to satisfy customers’ needs and attract international orders.
The Company continuously input for small household applianceR&D and increased competitiveness of our
products through technical innovation. Meanwhile, the Company promoted development of the Tsann Kuen brand and proactively planned for domestic sale of products such as comprehensive helpers, with the purpose of
enhancing expansion of the domestic market.
II. YoY changes of major financial data
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Accumulative amountin the reporting period|Accumulative amountin the same period oflast year|+/-% Main|reasons for change|
|Operating revenues|890,216,299.51|877,844,207.80|1.41%||
|Operating costs|761,974,414.46|762,662,771.63|-0.09%||
|Selling expenses|34,383,454.76|34,293,872.54|0.26%||
|Administrative expenses|72,912,587.41|74,849,826.36|-2.59%||
|Financial expenses|-11,216,974.35|3,869,546.71|-389.88%|Exchange and interest incomes increased asRMB depreciated.|
|Income tax expenses|2,957,439.90|1,139,442.82|159.55%|Deferred income tax assets were reversed.|
|R&D input|30,469,780.95|30,687,843.84|-0.71%||
|Net cash flows from operatingactivities|-33,079,939.03|-63,381,893.64|47.81%|Payments to suppliers decreased.|
|Net cash flows from investingactivities|-1,181,899,628.49|-87,554,293.09|-1249.90%|More wealth management products wereacquired and there was more limitation onterm deposits.|
|Net cash flows from financingactivities|539,659,463.51|322,007,671.55|67.59%|Financings for export increased.|
|Net increase in cash and cashequivalents|-670,308,694.60|160,843,030.86|-516.75%||

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Major changes to the profit structure or sources of the Company during the reporting period:
□ Applicable√ Inapplicable
Reporting period progress of the future development planning in the disclosed documents of the Company such as share-soliciting prospectuses, offering prospectuses, asset reorganization reports, etc.:
□ Applicable√ Inapplicable
III. Breakdown of main business
Unit: RMB Yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Item|Operatingrevenues|Operating costs|Gross profitrate (%)||Increase/decrease||Increase/decrease||Increase/decrease|
||||||of operating||of operating||of gross profit|
||||||revenues over||costs over the||rate over the|
||||||the same period||same period of||same period of|
||||||of last year (%)||last year (%)||last year (%)|
|Classified by industry:||||||||||
|Classifiedby industry:|853,536,487.98|750,410,484.64|12.08%|0.92%||-0.27%||1.05%||
|Classifiedby industry:|853,536,487.98|750,410,484.64|12.08%|0.92%||-0.27%||1.05%||
|Classified by industry:||||||||||
|Gourmetcooking|515,128,658.12|445,237,910.10|13.57%|5.36%||3.61%||1.47%||
|Homeassistant|248,061,429.17|228,197,976.09|8.01%|-5.44%||-5.65%||0.21%||
|Tea/coffee|68,460,128.01|61,248,739.87|10.53%|-13.04%||-12.55%||-0.50%||
|Others|21,886,272.68|15,725,858.58|28.15%|38.50%||41.61%||-3.51%||
|Total 853,536|,487.98|750,410,484.64|12.08%|0.92%||-0.27%||1.05%||
|Classified by region:||||||||||
|America 329,|835,160.09|288,124,504.03|12.65%|7.62%||5.86%||1.45%||
|Asia 272,772,|273.18|244,584,531.76|10.33%|-1.23%||-2.16%||0.85%||
|Europe 190,83|0,464.63|165,219,858.39|13.42%|-2.12%||-2.56%||0.39%||
|Australia 53,9|49,820.33|47,545,356.17|11.87%|-5.85%||-7.59%||1.66%||
|Africa 6,148,|769.75|4,936,234.29|19.72%|-43.29%||-46.77%||5.25%||
|Total 853,536|,487.98|750,410,484.64|12.08%|0.92%||-0.27%||1.05%||

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 2. Wealth management entrustment, derivative investments and entrustment loans
(1) Wealth management entrustment
√Applicable□Inapplicable
Unit: RMB Ten thousand Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Related-party|||||||Impairment|||
|||||Amount|||Payment|Principal actually||Predicted|Actual gain/loss in|
|Name of trustee|Relation|transaction or|Product variety||Beginning date|Ending date|||provision (if|||
|||||entrusted|||determination|recovered||gain|reporting period|
|||not|||||||any)|||
|Huli CCB N/A|No||Break-evenfloating incomeproduct|5,000|2013/12/20 20|14/3/20 6.65% 5,0|00||N/A 81.99||70.91|
|XiamenInternational|N/A No||Break-evenfloating incomeproduct|11,000|2014/1/15 201|4/4/15 6.8% 11,0|00||N/A 187.0|0|187.00|
|Shenzhen Ping’an|N/A No||Break-evenfloating incomeproduct|500|2014/1/16 201|4/12/3 8.0%||0|N/A 35.67||17.33|
|Shenzhen Ping’an|N/A No||Break-evenfloating incomeproduct|1,500|2014/1/16 201|4/12/5 8.0%||0|N/A 107.6|7|52.00|
|Shenzhen Ping’an|N/A No||Break-evenfloating incomeproduct|1,500|2014/1/16 201|4/12/9 8.0%||0|N/A 109.0|0|52.00|
|Shenzhen Ping’an|N/A No||Break-evenfloating incomeproduct|1,500|2014/1/16 201|4/12/11 8.0%||0|N/A 109.6|7|52.00|
|Shenzhen Ping’an|N/A No||Break-evenfloating incomeproduct|1,500|2014/1/16 201|4/12/15 8.0%||0|N/A 110.0|0|52.00|
|Shenzhen Ping’an|N/A No||Break-evenfloating incomeproduct|1,500|2014/1/16 201|4/12/17 8.0%||0|N/A 111.6|7|52.00|
|XiamenInternational|N/A No||Break-evenfloating incomeproduct|6,000|2014/2/17 201|4/9/27 5.5%||0|N/A 203.5|0|0|
|XiamenInternational|N/A No||Break-evenfloating incomeproduct|5,000|2014/3/21 201|4/12/29 5.6%||0|N/A 220.1|1|0|

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Related-party|||||||Impairment|||
|||||Amount|||Payment|Principal actually||Predicted|Actual gain/loss in|
|Name of trustee|Relation|transaction or|Product variety||Beginning date|Ending date|||provision (if|||
|||||entrusted|||determination|recovered||gain|reporting period|
|||not|||||||any)|||
|XiamenInternational|N/A No||Break-evenfloating incomeproduct|11,000|2014/4/16 201|4/10/7 5.7%||0|N/A 303.0|5|0|
|XiamenInternational|N/A No||Break-evenfloating incomeproduct|3,000|2014/6/23 201|4/12/29 5.2%||0|N/A 81.90||0|
|Total 49,000|||||16,000||||1,661.23||535.24|
|Source of the entrusted funds Self-owned funds||||||||||||
|Cumulative overdue principals and gains 0||||||||||||
|Lawsuit N/A||||||||||||
|Disclosure date of the board announcement approving the wealth||||2014/3/18||||||||
|management entrustment||||||||||||
|Disclosure date of the general meeting announcement approving the||||2014/5/21||||||||
|wealth management entrustment||||||||||||

(2) Derivative investments
√Applicable□Inapplicable
Unit: RMB Ten thousand Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Related-pa|Type of|Initial|||Opening||Closing|Proportion of the closing||
|Operator|Relati|rty|derivative|investment|Beginning|Ending date|investment|Impairment|investment|investment amount in the|Actual gain/loss in|
||on|transaction|||date|||provision|||reporting period|
|||or not|investment|amount|||amount||amount|Company’s closing net assets (%)||
|Bank No||No|Forwardexchange|121,125.89|1 Jan. 2014|30 Jun. 2014 95|,896.14|77,417.|25 151.84 -1,81|2.04||
|Total||||||||||||
|Capital source for derivative investment||||Self-owned funds||||||||
|Lawsuit N/A||||||||||||
|Disclosure date of the board announcement||||||||||||
|||||2013/3/12||||||||
|approving the wealth management entrustment||||||||||||
|Disclosure date of the general meeting||||||||||||
|announcement approving the wealth management||||2013/5/18||||||||
|entrustment||||||||||||

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
||||
|-|-|-|
|||1. Analysis on risks from holding of derivative products: gains or losses from difference between contracted exchange rate and market exchange rate on|
|||value date.|
|||2. Control measures:|
|||(1) Principle: The purpose of the financial derivative operation is to avoid risks. The Company shall not conduct transactional operation for other|
|||purposes than risk avoidance. The Company shall not conduct complex derivative trading above the actual operation needs and shall not speculate in|
|||derivative trading with hedging as an excuse. The overall contractual amount for risk avoidance of the Company shall not exceed the summation of the|
|||net risk exposure of the existing assets and liabilities and the net risk exposure of assets and liabilities arising from the operation of the Company in the|
|Analysis on risks and control measures of||coming year.|
|derivative products held in the reporting period||(2) Staff requirements: Personnel taking part in the investment shall all fully understand the risks of derivative investment and strictly execute the|
|(including but not limited to market risk, liquidity||business operation and risk management mechanisms for derivative investment.|
|risk, credit risk, operation risk, law risk, etc.)||(3) Operation standardization: Before making a derivative investment, the Company shall rationally equip itself with professional personnel for|
|||investment decision-making, business operation, risk control, etc. It shall also inquire and compare among various markets and products. Besides, it|
|||shall strictly control the variety and size of derivative investment and try to choose derivative trading on exchange as much as possible.|
|||(4) Periodic evaluation: Derivative investments shall be evaluated at least twice for a month and the evaluation report shall be sent to a high-ranking|
|||executive authorized by the Board of Directors. And a derivative investment report shall be sent to the Board of Directors annually. Each subsidiary|
|||should only summit to the Board of Directors of the subsidiary.|
|||(5) Loss limit: The investment loss on a single derivative and all the investment loss shall not exceed 20% of the total investment amount.|
|||(6) Audit system: The audit department audits derivative product trading periodically and submits audit reports to relevant units.|
|||(1) Gains and losses affected by completed transaction amount of derivative products was RMB 8.6478 million, and gain from undelivered transaction|
|Changes of market prices or fair values in the||was RMB 26.7682 million in the reporting period, of which the rotation profits of the undelivered forward estimates of the investment derivatives was|
|reporting period of the invested derivatives. And the||of RMB 21.1201 million;|
|analysis on the fair value of the derivatives should||(2) The former contracted bank provided monthly sheets of estimated exchange rates for the undue contracted forward exchanges on the last trading day|
|include the specific use methods and the relevant||of the month.|
|assumptions and parameters.||(3) The profit and loss from fair value changes of the derivative was confirmed according to the difference between the contracted amount undue by the|
|||month*the estimated exchange rate and the currency amount when bought in.|
|Whether significant changes occurred to the|||
|Company’s account ing policy and specific|There were no significant changes between the Company ’s accounting policy and specific accounting principles of derivatives in th e reporting period||
|accounting principles of derivatives in the reporting|and those in the last reporting period.||
|period compared to the previous reporting period|||
|Special opinion from independent directors, sponsor|The Company has carried out a strict internal assessment for th e financial derivative business and has established a corresponding supervision||
|or financial consultant on the Company ’s|mechanism. We are of the opinion that the financial derivative business conducted by the Company is fairly necessary in its routine operation and is in||
|derivatives investment and risk control|compliance with relevant laws and regulations, with the risks controllable.||

(3) Entrustment loans
□ Applicable√ Inapplicable
3. Use of raised funds
□ Applicable√ Inapplicable
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 4. Analysis to main subsidiaries and stock-participating companies
Unit: RMB Yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Company name|Company variety|Industry|Main products/services Regist|ered capital|Total assets Net|assets|Operatingrevenues|Operatingprofit|Net profit|
|Tsann Kuen(Zhangzhou)Enterprise Co.,Ltd.|Controlledsubsidiary|Small homeappliancemanufacture|For details, see Note VI. Businesscombination and consolidated financial statements|USD 160 million|2,457,102,378.28|1,266,962,415.84|862,438,262.13|14,677,484.39|17,496,448.18|
|Tsann Kuen(Shanghai)Enterprise Co.,Ltd.|Controlledsubsidiary|Small homeappliancemanufacture|For details, see Note VI. Businesscombination and consolidated financial statements|USD 40 million|99,239,396.60|93,839,029.74|3,679,952.94|164,923.89|4,446,435.14|
|Pt. StarComgisticIndonesia|Subsidiary of acontrolledsubsidiary|Homeappliancemanufacture|For details, see Note VI. Businesscombination and consolidated financial statements|USD 17.5 million|102,454,363.22|61,563,120.62|24,079,496.50|-6,353,859.73|-6,739,559.45|

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 5. Significant projects of investments with non-raised funds
□ Applicable√ Inapplicable
VI. Predict the operating results of Jan.-Sept. 2014
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the next reporting period according to prediction, as well as explanations on the reasons
□ Applicable√ Inapplicable
VII. Explanation by the Board of Directors and the Supervisory Committee about the
“non-standard audit report” issued by the CPAs firm for the reporting period
□ Applicable√ Inapplicable
VIII. Explanation by the Board of Directors about the “non-standard audit report ” of last year
□ Applicable√ Inapplicable
IX. Implementation of profit allocation during the reporting period
Profit allocation plan implemented during the reporting period, especially execution and adjustment of the cash dividend plan and the plan for turning capital reserve into share capital:
√ Applicable□ Inapplicable
For the details of Y2013 profits distribution, please refer to the see the “Announcement on Implementation of the Equity Distribution for 2013” disclosed on Securities Times, Ta Kung Pao (HK) and http://www.cninfo.com.cn on 19 Jun. 2014, which had completed the execution according to the prescription.
|||
|-|-|
|Special explanation of the cash dividend policy||
|Whether conformed with the regulations of the Articles of||
|association or the requirements of the resolutions of the|Yes|
|shareholders’ meeting:||
|Whether the dividend standard and the proportion were definite||
||Yes|
|and clear:||
|Whether the relevant decision-making process and the system||
||Yes|
|were complete:||
|Whether the independent director acted dutifully and exerted the||
||Yes|
|proper function:||
|Whether the medium and small shareholders had the chances to||
|fully express their suggestions and appeals, of which their legal|Yes|
|interest had gained fully protection:||
|Whether the conditions and the process met the regulations and||
|was transparent of the adjustment or altered of the cash dividend|Yes|
|policy:||

X. Pre-plan for profit allocation and turning capital reserve into share capital for the
reporting period
□ Applicable√ Inapplicable
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. XI. Particulars about researches, visits and interviews received in this reporting period
|||||||
|-|-|-|-|-|-|
||||||Main discussion and|
|Time of reception|Place of reception|Way of reception|Visitor type|Visitor|materials provided by the|
||||||Company|
||||||Operation of the Company,|
|28 Feb. 2014|Office|By phone|Individual|Mr. Yu|B-share policies, with no|
||||||written materials provided|
||||||by the Company|

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Section V. Significant Events
I. Corporate governance
Company governance practice has no difference with requirements of relevant law and rules of Company Law and CSRC.
II. Significant litigations and arbitrations
√ Applicable□ Inapplicable
|||||||||
|-|-|-|-|-|-|-|-|
||Amount (RMB|Whether form||||||
|||||Results and|Sentence|Disclosure|Disclosure|
|Lawsuit (arbitration)|Ten Thousand|into estimated|Progress|||||
|||||influence|execution|date|index|
||Yuan)|liabilities||||||
|Events of the appealprogress of the lawsuitbetween the controlledsubsidiary of theCompany ZhangzhouTsann Kuen and XindaElectromechanics Co.,Ltd.|430.49 No||Held the hearing on26 Mar. 2014|No result|N/A 22 F|eb. 2014|www.cninfo.com.cn|
|Events the controlledsubsidiary of theCompany ZhangzhouTsann Kuen sued XindaElectromechanics Co.,Ltd. by anotherprosecution|370.30 No||ZhangzhouIntermediatePeople’s Court hadput on record andwaited for thehearing|No result|N/A 27 D|ec. 2013|www.cninfo.com.cn|

III.Media’s questions
□Applicable√Inapplicable
IV. Bankruptcy or reorganization events
□Applicable√Inapplicable
V. Assets transaction events
1. Purchase of assets
□Applicable√Inapplicable
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 2. Sales of assets
Unit: RMB Ten Thousand Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Transactionparty|Assets sold|Disposaldate|Transaction price|Net profitcontributedto the Companyfrom theperiod-beginto thedisposaldate|Impactto thecompany|Ratio of thenet profitscontributed bythe asset to theCompany tothe totalprofits (%)|Pricingprinciple|Related-partytransaction or not|Relationshipbetween thetransaction partyand the Company(applicable forrelated-partytransactions)|Whether ornot theownership ofthe assetinvolved hasbeen fullytransferred|Whether ornot thecreditor’sright andliabilitiesinvolved havebeen fullytransferred|Disclosuredate|Disclosureindex|
|Tsann KuenEnterpriseCo., Ltd.|Otherequipments|2014.01.24|10.01|1.17|1.17|0.08%|Based onthemarketprice,andsettledaccordingcontractsignedbybothparties|Relatedenterprise|Under control ofthe same actualcontroller|Yes Yes||2014.04.25|www.cninfo.com.cn|
|HAVELLS M|ould 2014.02.28||42.75|35.28|35.28|2.37%||Non-relatedenterprise|Inapplicable|||||
|Pinrui|Hardequipments|2014.02.28|8.70|7.28|7.28|0.49%||||||||
|Duobite|Otherequipments|2014.02.28|0.64|0.55|0.55|0.04%||||||||
|Hailong|Otherequipments|2014.02.28|1.20|1.03|1.03|0.07%||||||||
|Sungwon|Otherequipments|2014.02.28|2.40|2.05|2.05|0.14%||||||||
|YuejiaElectron|Moldingequipments|2014.03.31|6.50|1.34|1.34|0.09%||||||||
|Yixin|Otherequipments|2014.03.31|0.15|0.13|0.13|0.01%||||||||
|Yixin|Hardequipments|2014.03.31|0.80|0.78|0.78|0.05%||||||||
|Fushun|Hardequipments|2014.03.31|11.00|9.61|9.61|0.65%||||||||
|Huaruixing|Bakeliteequipments|2014.03.31|1.79|1.71|1.71|0.12%||||||||
|Tu Yibin|Bakeliteequipments|2014.04.30 10|.00|3.12|3.12|0.21%||||||Inapplicable|Inapplicable|
|YuejiaElectron|Otherequipments|2014.04.30 6.|50|1.44|1.44|0.10%||||||||
|Yixin|Moldingequipments|2014.04.30 1.|17|1.12|1.12|0.08%||||||||
|Tu Yibin|Moldingequipments|2014.04.30 2.|50|2.45|2.45|0.16%||||||||

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Transactionparty|Assets sold|Disposaldate|Transaction price|Net profitcontributedto the Companyfrom theperiod-beginto thedisposaldate|Impactto thecompany|Ratio of thenet profitscontributed bythe asset to theCompany tothe totalprofits (%)|Pricingprinciple|Related-partytransaction or not|Relationshipbetween thetransaction partyand the Company(applicable forrelated-partytransactions)|Whether ornot theownership ofthe assetinvolved hasbeen fullytransferred|Whether ornot thecreditor’sright andliabilitiesinvolved havebeen fullytransferred|Disclosuredate|Disclosureindex|
|Pan Xibao|Otherequipments|2014.04.30 0.|50|0.48|0.48|0.03%||||||||
|DARMONO|Electronicequipments|2014.05.10 6.|33|-0.21|-0.21|-0.01%||||||||
|Hewang|Bakeliteequipments|2014.05.31 6.|45|0.73|0.73|0.05%||||||||
|Huasheng|Bakeliteequipments|2014.05.31 1.|00|0.98|0.98|0.07%||||||||
|Haikun Mould|2014.05.31 1.00|||0.98|0.98|0.07%||||||||
|Hongyuan Mo|uld 2014.05.31 5.|37||4.98|4.98|0.34%||||||||
|Xindongbao|Otherequipments|2014.05.31 0.|20|0.17|0.17|0.01%||||||||
|Li Qinghua|Otherequipments|2014.05.31 50|.00|1.47|1.47|0.10%||||||||
|Qiankun|Hardequipments|2014.05.31 25|.00|8.23|8.23|0.55%||||||||
|Wankun|Moldingequipments|2014.05.31 4.|00|0.96|0.96|0.06%||||||||
|WangZhibiao|Moldingequipments|2014.05.31 1.|00|0.98|0.98|0.07%||||||||
|Baifeng|Moldingequipments|2014.05.31 3.|50|2.79|2.79|0.19%||||||||
|DARMONO|Electronicequipments|2014.06.23 2.|74|-0.05|-0.05|0.00%||||||||
|Hongyuan Mo|uld 2014.06.30 7.|86||7.67|7.67|0.52%||||||||
|GoldenLance|Hardequipments|2014.06.30 2.|50|2.44|2.44|0.16%||||||||
|Yixin|Die castingequipments|2014.06.30 3.|42|3.33|3.33|0.22%||||||||
|Kailianxing|Die castingequipments|2014.06.30 5.|27|5.02|5.02|0.34%||||||||
|YangXiaodong|Building 2014.0|6.30 46.70||43.11|43.11|2.90%||||||||
|Total||278.95||153.12|153.12|10.31%||||||||

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 3. Business combination
□Applicable√Inapplicable
VI. Implementation situation and influence of equity incentive plan of the Company
□Applicable√Inapplicable
VII. Significant related-party transactions
1. Related-party transaction relevant to routine operation
√Applicable□Inapplicable
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Related party Relati|onship|Type of therelated-partytransaction|Content of therelated-partytransaction|Pricingprinciple oftherelated-partytransaction|Transactionprice(RMBTenThousandYuan)|Transactionamount(RMB TenThousandYuan)|Proportionin samekind oftransactions(%)|Settlementmethod of therelated-partytransaction|Market price|Disclosuredate|Disclosureindex|
|Thermaster Electronic(Xiamen) Ltd.|Company directlycontrolled by keymanagement personneland their close familymembers|Purchase ofcommodities|Purchase of rawparts andmechanical parts|Based on themarket priceand bothparties abideby the fair andreasonableprinciple|N/A|1,699.11|3.06|According tothe contractsigned by theboth parties|N/A|18Mar.2014|www.cninfo.com.cn|
|STAR COMGISTICCAPITAL CO.,LTD.|Ultimate controllingcompany|Purchase ofcommodities|Purchase of rawparts andmechanical parts|||199.33|0.36|||||
|TSANN KUEN JAPANCO., LTD|Under the control of thesame ultimate controllingcompany|Sales ofcommodities|Sales of parts andfinished products|||583.29|0.68|||||
|STAR COMGISTICCAPITAL CO.,LTD.|Ultimate controllingcompany|Sales ofcommodities|Sales of parts andfinished products|||1,969.81|2.31|||||
|STAR COMGISTICCAPITAL CO.,LTD.|Ultimate controllingcompany|Revenue fromservice|Procurement agencyfee|||9.78|100.00|||||
|Xiamen Tsann KuenTrading Co., Ltd.|Under the control of thesame ultimate controllingcompany|Provide service Wor|kshop rent|||75.00|2.80|||||
|Total|||||4,53|6.32||||||
|Details of large amount of sales returns Naught||||||||||||
|As for the prediction on the total amount of routine related-party transactions to be occurred in thereporting period by relevant types, the actual performance in the reporting period||||The amount for the above related-party transactions were not exceed the predicted amount in theAnnouncement on Prediction of the 2014 Annual Routine Related-party Transactions disclosed on SecuritiesTimes, Hong Kong Ta Kung Pao and http://www.cninfo.com.cn dated 18 Mar. 2014.||||||||

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
|||
|-|-|
|Reason for significant difference between the transaction price and the market price|The pricing principle of the related-party transaction of the Company was in accordance with the PricingArrangement on Transactions between Related Enterprises signed with national taxation bureau, which wasmade by referring to the horizontal fair trading principle.|

2. Related-party transactions regarding purchase and sales of assets
√Applicable□Inapplicable
Unit: RMB Ten Thousand Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Relatedparty|Relationship|Type of therelated-partytransaction|Content of therelated-partytransaction|Pricing principle of therelated-party transaction|Book valueof thetransferredassets|Assessedvalue oftransferredassets|Marketfair value|Transferprice|Settlement methodof the related-partytransaction|Transactionprofit or loss|Disclosure date|
|Tsann KunEnterpriseCo., Ltd.|Under thesame controlof the actualcontrolled|Sales of thefixed assets|Sales of thefixed assets|Based on the marketprice and both partiesabide by the fair andreasonable principle|8.84|N/A|10.01|10.01|Settled according tothe contract signedby the both parties|1.17|2 0 1 4 .04.25|
|The reasons of the differences between transfer price and bookvalue||||||||||||
|Impacts on the company’s operating results and financialcondition||||||||||||

3. Significant related-party transactions with joint investments
□Applicable√Inapplicable
4. Significant credits and liabilities with related parties
Was there any non-operating credit or liability with any related party?
□ Yes√No
5. Other significant related-party transactions
□Applicable√Inapplicable
VIII. Occupation of theCompany’s funds for non-operating purposes by the controlling shareholder and its related parties
□ Applicable√ Inapplicable
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. IX. Significant contracts and execution
1. Particulars about trusteeship, contract and lease
(1) Trust
□Applicable√Inapplicable
(2) Contract
□Applicable√Inapplicable
(3) Lease
Notes of the leasing
Explanation of lease
The Proposal on Lease of Property& Related-party Transactions was reviewed and approved at the Fourth Session of the Board of Directors for 2011 dated 13 Aug. 2011 and the First SpecialShareholders’ General Meeting for 2011 dated 16 Sept. 2011, for details, please refer to the Announcement on Lease of Property& Related-party Transactions, Announcement on Resolutions Made at the Fourth Session of the Board of Directors for 2011 and Announcement on Resolutions Made at the First Special Shareholders ’ General Meeting for 2011 disclosed on Securities Times, Hong Kong Ta Kung Pao and http://www.cninfo.com.cn.
The Proposal on Change of Property Leasing Agreement& Related-party Transaction was reviewed and approved at the Second
Special Session of the Board of Directors for 2012 dated 30 Jun. 2012 and the Second Special Shareholders ’ General Meeting for 2012 dated 24 Jul. 2012, for details, please refer to the Announcement on Change of Property Leasing Agreement& Related-party Transaction, Announcement on Resolutions Made at the Second Special Session of the Board of Directors for 2012 and
Announcement on Resolutions Made at the Second Special Shareholders’ General Meeting for 2012 disclosed on Securities Times, Hong Kong Ta Kung Pao and http://www.cninfo.com.cn.;
The proposal on Lease of Property was received and approved at the First Session of the Board of Directors for 2013 dated 26 Jun. 2013 and for details, please refer to the Announcement on 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. The lease whose profits reaching more than10% of the total profits of the Company in the reporting period
√Applicable□Inapplicable
Unit: RMB Ten thousand Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Name ofcontract-out party|Name ofleaser|Statusofleasedassets|Involvedamount of theleasedassets|Initialdate ofleasing|Endingdate ofleasing|Rentalincome|Recognition basisof rentalincome|Influences ofrentalincomeon theCompany|Related-partytransaction or not|Relationship|
|XiamenTsannKun(China)Enterprise Co.,Ltd.|Tianyuan(Xiamen)AssetsManagementCo.,Ltd.|Building|977 20|13-7-1|2018-9-30|577.60|According to thecontractprice|38.87%|No Nau|ght|

2. Guarantees provided by the Company
□Applicable√Inapplicable
3. Other significant contracts
□Applicable√Inapplicable
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 4. Other significant transaction
□Applicable√Inapplicable
X. Commitments made by the Company or shareholders holding over5% of theCompany’s shares in the report period, or such commitments carried down into the report period
√Applicable□Inapplicable
|||||||
|-|-|-|-|-|-|
||||Time of|Period of||
||Commitment|||||
|Commitment||Contents|making|commitme|Fulfillment|
||maker|||||
||||commitment|nt||
|Commitment on share||||||
|reform||||||
|Commitment in the||||||
|acquisition report or the||||||
|report on equity changes||||||
|Commitments made upon||||||
|the assets replacement||||||
|Commitments made upon||||||
|first issuance or refinance||||||
|||Based on the confidence on the continuous and||||
|||stable development of the Company, it committed|||The Company’s stocks|
|||to increase the shareholding if the Company’s stock|||resumed trading on 31|
|||price lower than HKD2.40 per share after the|||Dec. 2012, but the|
|||implementation of the shares contraction and||Within one|Company’s stock price|
|||trading resumption, and it would increase no more|||hasn’t met the condition|
|Other commitments made to|FILLMAN|than 2% shares (i.e. 370,780,000 shares) of the total|28 Dec .|year sincethe date of|for shareholding|
||INVESTMEN|shares issued by the Company within one year since|||increase since the date|
|minority shareholders|||2012|initial||
||TS LIMITED|the date of initial shareholding increase. If the plan|||of trading resumption,|
|||on increasing holding 2% shares of the total shares||shareholdi|Fillman Investments|
|||||ng increase||
|||is completed, if the stock price hasn ’t reached the|||Limited hasn ’t|
|||target price, it will perform relevant approval|||implemented the|
|||procedures, and propose to CSRC on continuous|||shareholding increase|
|||implementation of shareholding increase by|||plan.|
|||exemption of offering.||||
|Executed timely or not?|Yes|||||
|Detailed reason for failing|The Company’s stocks resumed trading on 31 Dec. 2012, but the Company ’s stock price hasn’t met the condition for|||||
|to execute and the next plan|shareholding increase since the date of trading resumption, Fillman Investments Limited hasn’t implemented the|||||
|(if any)|shareholding increase plan.|||||

XI. Particulars about engagement and disengagement of CPAs firm
Has this semi-annual report been audited?
□ Yes√ No
XII. Particulars about punishment and rectification
□Applicable√Inapplicable
XIII. Delisting risk due to violation of any law or regulation
□Applicable√Inapplicable
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. XIV. Other significant events
Coordinated with the adjustment of the Company’s operation strategy and stopped the operation business of the travel subsidiary. Except for the Travel Controlling Company Xiamen Star Comgistic Capital Co., Ltd is handling the liquidation events the rest of the travel entities had completed the liquidation.
Section VI. Change in Shares& Shareholders
I. Changes in shares
Unit: share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase/decrease in the change (+,-)|||||After the change||
||||Issuance||Capitalization|||||
|||||Bonus||||||
||Number|Proportion|of new||of public|Other|Subtotal|Number|Proportion|
|||||shares||||||
||||shares||reserve fund|||||
|I. Restricted shares|0|0.00%||||||0|0.00%|
|II. Non-restricted shares|185,391,680|100.00%||||||185,391,680|100.00%|
|1. Domestically listed||||||||||
||185,391,680|100.00%||||||185,391,680|100.00%|
|foreign shares||||||||||
|III. Total shares|185,391,680|100.00%||||||185,391,680|100.00%|

 Reasons for change in share capital
□Applicable√Inapplicable
Particulars about the approval of the change in share capital
□Applicable√Inapplicable
The transfer of change in share capital
□Applicable√Inapplicable
Change in sharecapital’s impacts on basic EPS and diluted EPS in recent year and recent issue, and net assets per share attributed to equity shareholder and financial index etc.
□Applicable√Inapplicable
Other contents was necessary to the company or the securities regulators required to be disclosed
□Applicable√Inapplicable
Changes of theCompany’s share number and structure, as well as the corresponding changes in its asset-liability structure
□Applicable√Inapplicable
Changes of theCompany’s share number and structure, as well as the corresponding changes in its asset-liability structure
□Applicable√Inapplicable
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. II. Total number of shareholders and their shareholding
Unit: share
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Total number of common|||||Total number of preferred share holders who|||||||
|shareholders at the end of the||24,749|||had resumed their voting right at the end of||||0|||
|reporting period|||||the reporting period|||||||
|Particulars about shares held by shareholders with a shareholding percentage over 5% or by the top ten shareholders holding shares||||||||||||
|||||||Increase/d|||Pledged or frozen shares|||
||Nature of||Shareholding|Total shares||ecrease|Number of|Number of||||
|Name of shareholder||||held at the||during the|restricted|non-restricted|Status of||Number of|
||shareholder||percentage|||||||||
|||||period-end||reporting|shares held|shares held|shares||shares|
|||||||period||||||
|FORDCHEEDEVELOPMENTLIMITED|Foreign corporation||29.10%|53,940,530||||53,940,530||||
||||||||||N/A||N/A|
|EUPA INDUSTRYCORPORATIONLIMITED|Foreign corporation||13.83%|25,633,718||||25,633,718||||
||||||||||N/A||N/A|
|FILLMANINVESTMENTSLIMITED|Foreign corporation||2.49%|4,621,596||||4,621,596||||
||||||||||N/A||N/A|
|Chen Yongquan Dome|stic individual||0.90%|1,668,747||||1,668,747|N/A||N/A|
|Xia Qianru Foreign in|dividual||0.70%|1,299,545||||1,299,545|N/A||N/A|
|Chen Lijuan Foreign i|ndividual||0.55%|1,012,791||||1,012,791|N/A||N/A|
|Chen Yongqing Foreig|n individual||0.53%|981,598||||981,598|N/A||N/A|
|Ding Xiaolun Domesti|c individual||0.52%|956,818||||956,818|N/A||N/A|
|Zou Shilin Domestic i|ndividual||0.47%|863,003||||863,003|N/A||N/A|
|CSC SECURITIES(HK) LTD.|Foreign corporation||0.43%|789,212||||789,212||||
||||||||||N/A||N/A|
|Strategic investor or general corporation||||||||||||
|becoming a top ten s hareholder due to|||N/A|||||||||
|placing of new shares||||||||||||
||||The top three shareholders are the Company’s corporate controlling shareholders. It is unknown|||||||||
|Explanation on associated relationship||||||||||||
||||whether the other shareholders of tradable shares are related parties or acting-in- concert parties|||||||||
|or/and persons acting in concert among the||||||||||||
||||as prescribed in the Administrative Methods for Disclosure of the Shareholding Changes of the|||||||||
|above-mentioned shareholders||||||||||||
||||Listed Company’s Shareholders.|||||||||
|Particulars about shares held by the top ten shareholders holding shares not subject to trading moratorium||||||||||||
||||Number of non-restricted shares held at the|||||Type of shares||||
|Name of shareholder||||||||||||
||||period-end|||||Type||Number||
|FORDCHEE DEVELOPMENT LIMITED|||53,940,530|||||||53,940,530||
|EUPA INDUSTRY CORPORATIONLIMITED|||25,633,718|||||||||
|||||||||||25,633,718||
|FILLMAN INVESTMENTS LIMITED 4,6|||21,596|||||||4,621,596||
|Chen Yongquan 1,668,747||||||||||1,668,747||
|||||||||Domestically listed||||
|Xia Qianru 1,299,545||||||||||1,299,545||
|||||||||foreign shares||||
|Chen Lijuan 1,012,791||||||||||1,012,791||
|Chen Yongqing 981,598||||||||||981,598||
|Ding Xiaolun 956,818||||||||||956,818||
|Zou Shilin 863,003||||||||||863,003||
|CSC SECURITIES (HK) LTD. 789,212||||||||||789,212||

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
|||
|-|-|
|Explanation on associated relationship||
||The top three shareholders are the Company’s corporate controlling shareholders. It is unknown|
|or/and persons acting in concert among the||
||whether the other shareholders of tradable shares are related parties or acting-in- concert parties|
|top ten tradable shareholders and between||
||as prescribed in the Administrative Methods for Disclosure of the Shareholding Changes of the|
|the top ten tradable shareho lders and the||
||Listed Company’s Shareholders.|
|top ten shareholders||
|Explanation on the top 10 shareholders||
||Naught|
|participating in the margin trading business||

Whether the shareholders of a company conducted the transaction of repurchase under the agreement during the reporting period
□ Yea√ No
III. Change of the controlling shareholder or the actual controller
Change in controlling shareholder in reporting period
□Applicable√ Inapplicable
Change of the actual controller during the reporting period
□ Applicable√ Inapplicable
IV. Particulars on shareholding increase scheme during the reporting period proposed or
implemented by the shareholders and act-in-concert persons
□ Applicable√ Inapplicable
Section VII. Preferred Shares
I. Issue and listing of preferred shares during the reporting period
□ Applicable√ Inapplicable
II. Amount of preferred shares and the holding situation of the Company
□ Applicable√ Inapplicable
III. Repurchase or transfer of preferred shares
1. Purchase of preferred shares
□ Applicable√ Inapplicable
2. Transfer of preferred shares
□ Applicable√ Inapplicable
IV. Resume and execution of the voting rights of preferred shares
□ Applicable√ Inapplicable
V. Accounting policy and reasons adopted of preferred shares
□ Applicable√ Inapplicable
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Section VIII. Directors, Supervisors, Senior Management Staff& Employees I. Changes in shareholding of directors, supervisors and senior management staff
□ Applicable√ Inapplicable
II. Change of directors, supervisors and senior management staff
√Applicable□Inapplicable
||||||
|-|-|-|-|-|
|Name|Position|Type|Date|Reason|
|Pan Zhirong|Chairman|Elected|||
|Tan Zichang|Managing Director|Elected|||
|Tang Jinmu|Independent Director|Elected||Qualitative and quantitative of the|
||||20 May 2014||
|Bai Shaoxiang|Independent Director|Elected||Board of Directors|
|Lu Jianxin|Independent Director|Left as expired|||
|Ge Xiaoping|Independent Director|Left as expired|||

Section IX. Financial Report
I.Auditor’s Report
Theauditor’s report had not audited.
II. Financial report (attached)
1. Balance sheet
2. Income statement
3. Cash flow statement
4. Statement of Change inOwners’ Equity
5. Notes to the Financial Statements
Section X. Documents Available for Reference
1. Text of Semi-annual Report 2014 signed and sealed by the Board of Directors of the Company.
2. Financial statements signed and sealed by legal representative, principal of accounting work, and manager of finance department. 3. In the reporting period, all texts and originals of the Company’s documents and public notices have been publicly disclosed in China Securities Journal, Hong Kong Ta Kung Pao and www.cninfo.com.cn designated by CSRC.
Chairman of the Board of Directors: Pan Zhirong
8 Aug. 2014
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 1. Consolidated balance sheet
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|1,060,646,603.55|834,088,959.68|
|Settlement reserves|||
|Intra-group lendings|||
|Transactional financial assets||21,120,100.00|
|Notes receivable|2,792,866.00|2,467,447.00|
|Accounts receivable|193,796,744.82|253,823,475.86|
|Accounts paid in advance|5,811,179.20|4,290,802.70|
|Premiums receivable|||
|Reinsurance premiums receivable|||
|Receivable reinsurance contract reserves|||
|Interest receivable|8,020,524.99|110,833.33|
|Dividend receivable|||
|Other accounts receivable|25,430,868.74|32,339,652.22|
|Financial assets purchased under agreements to resell|||
|Inventories|211,016,266.78|209,824,098.90|
|Non-current assets due within 1 year|||
|Other current assets|330,000,000.00|50,000,000.00|
|Total current assets|1,837,515,054.08|1,408,065,369.69|
|Non-current assets:|||
|Loans by mandate and advances granted|||
|Available-for-sale financial assets|||
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|40,000.00|40,000.00|
|Investing property|54,476,840.34|58,732,511.36|
|Fixed assets|165,830,240.13|173,152,964.50|
|Construction in progress|4,622,309.63|10,889,671.98|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|11,378,202.99|11,803,252.87|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|4,909,381.44|4,355,866.63|
|Deferred income tax assets|19,036,570.79|23,761,647.80|
|Other non-current assets|2,068,410.91||
|Total of non-current assets|262,361,956.23|282,735,915.14|
|Total assets|2,099,877,010.31|1,690,801,284.83|
|Current liabilities:|||
|Short-term borrowings|481,764,240.00|30,484,500.00|

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Borrowings from Central Bank|||
|Customer bank deposits and due to banks and other|||
|financial institutions|||
|Intra-group borrowings|||
|Transactional financial liabilities|5,648,071.00||
|Notes payable|7,745,858.91|30,577,887.89|
|Accounts payable|500,255,259.06|648,629,156.16|
|Accounts received in advance|18,637,100.79|10,431,654.59|
|Financial assets sold for repurchase|||
|Handling charges and commissions payable|||
|Employee’s compensation payable|36,626,638.25|40,748,328.96|
|Tax payable|-809,567.82|-17,127,309.97|
|Interest payable|3,270,214.70|108,661.00|
|Dividend payable|||
|Other accounts payable|191,525,702.08|69,376,770.31|
|Reinsurance premiums payable|||
|Insurance contract reserves|||
|Payables for acting trading of securities|||
|Payables for acting underwriting of securities|||
|Non-current liabilities due within 1 year|||
|Other current liabilities|||
|Total current liabilities|1,244,663,516.97|813,229,648.94|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Long-term payables|||
|Specific payables|||
|Projected liabilities|||
|Deferred income tax liabilities|217,345.05|3,258,742.65|
|Other non-current liabilities|222,600.00|222,600.00|
|Total non-current liabilities|439,945.05|3,481,342.65|
|Total liabilities|1,245,103,462.02|816,710,991.59|
|Owners’ equity (or shareholders’ equity)|||
|Share capital|185,391,680.00|185,391,680.00|
|Capital reserves|278,454,447.07|278,454,447.07|
|Less: Treasury stock|||
|Specific reserves|||
|Surplus reserves|11,495,983.58|11,495,983.58|
|Provisions for general risks|||
|Retained profits|35,636,457.99|46,733,303.43|
|Foreign exchange difference|-1,106,072.35|-1,382,202.82|
|Total equity attributable to owners of the Company|509,872,496.29|520,693,211.26|
|Minority interests|344,901,052.00|353,397,081.98|
|Total owners’ (or shareholders’) equity|854,773,548.29|874,090,293.24|
|Total liabilities and owners’ (or shareholders’) equity|2,099,877,010.31|1,690,801,284.83|

Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 2. Balance sheet of the Company
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|9,684,609.95|11,811,615.43|
|Transactional financial assets|||
|Notes receivable|2,792,866.00|822,974.00|
|Accounts receivable|11,473,376.99|39,868,837.59|
|Accounts paid in advance|199,702.71|418,695.09|
|Interest receivable|||
|Dividend receivable|||
|Other accounts receivable|2,105,008.19|1,195,292.22|
|Inventories|5,423,835.43|4,346,896.79|
|Non-current assets due within 1 year|||
|Other current assets|||
|Total current assets|31,679,399.27|58,464,311.12|
|Non-current assets:|||
|Available-for-sale financial assets|||
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|985,854,030.83|985,854,030.83|
|Investing property|46,121,763.22|48,731,726.97|
|Fixed assets|685,736.19|646,980.59|
|Construction in progress||92,700.00|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|103,249.63|313,667.95|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|942,163.55|1,126,312.61|
|Deferred income tax assets|2,831,864.96|4,228,126.98|
|Other non-current assets|165,900.00||
|Total of non-current assets|1,036,704,708.38|1,040,993,545.93|
|Total assets|1,068,384,107.65|1,099,457,857.05|
|Current liabilities:|||
|Short-term borrowings|||
|Transactional financial liabilities|||
|Notes payable|||
|Accounts payable|42,204,065.00|87,479,703.39|
|Accounts received in advance|8,891,461.90|988,253.99|
|Employee’s compensation payable|1,830,506.23|1,175,146.87|
|Tax payable|3,153,625.14|956,841.14|
|Interest payable|||

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Dividend payable|||
|Other accounts payable|478,981,572.41|491,868,854.25|
|Non-current liabilities due within 1 year|||
|Other current liabilities|||
|Total current liabilities|535,061,230.68|582,468,799.64|
|Non-current liabilities:|||
|Long-term borrowings|||
|Bonds payable|||
|Long-term payables|||
|Specific payables|||
|Projected liabilities|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|0.00|0.00|
|Total liabilities|535,061,230.68|582,468,799.64|
|Owners’ equity (or shareholders’ equity)|||
|Paid-up capital (or share capital)|185,391,680.00|185,391,680.00|
|Capital reserves|271,485,181.40|271,485,181.40|
|Less: Treasury stock|||
|Specific reserves|||
|Surplus reserves|11,495,983.58|11,495,983.58|
|Provision for general risks|||
|Retained profits|64,950,031.99|48,616,212.43|
|Foreign exchange difference|||
|Total owners’ (or shareholders’) equity|533,322,876.97|516,989,057.41|
|Total liabilities and owners’ (or shareholders’) equity|1,068,384,107.65|1,099,457,857.05|

 Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 3. Consolidated income statement
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Jun. 2014|Jan.-Jun. 2013|
|I. Total operating revenues|890,216,299.51|877,844,207.80|
|Including: Sales income|890,216,299.51|877,844,207.80|
|Interest income|||
|Premium income|||
|Handling charge and commission income|||
|II. Total operating cost|863,422,750.23|880,134,519.38|
|Including: Cost of sales|761,974,414.46|762,662,771.63|
|Interest expenses|||
|Handling charge and commission expenses|||
|Surrenders|||
|Net claims paid|||
|Net amount withdrawn for the insurance contract reserve|||
|Expenditure on policy dividends|||
|Reinsurance premium|||
|Taxes and associate charges|4,930,309.19|1,678,165.65|
|Selling and distribution expenses|34,383,454.76|34,293,872.54|
|Administrative expenses|72,912,587.41|74,849,826.36|
|Financial expenses|-11,216,974.35|3,869,546.71|
|Asset impairment loss|438,958.76|2,780,336.49|
|Add: Gain/(loss) from change in fair value (“-” means loss)|-26,768,171.00|7,349,219.30|
|Gain/(loss) from investment (“-” means loss)|14,000,118.50|3,576,345.30|
|Including: share of profits in associates and joint ventures|||
|Foreign exchange gains (“-” means loss)|||
|III. Business profit (“-” means loss)|14,025,496.78|8,635,253.02|
|Add: non-operating income|8,820,848.29|4,709,673.01|
|Less: non-operating expense|741,772.95|826,435.12|
|Including: loss from non-current asset disposal|2,627.18|157,115.25|
|IV. Total profit (“-” means loss)|22,104,572.12|12,518,490.91|
|Less: Income tax expense|2,957,439.90|1,139,442.82|
|V. Net profit (“-” means loss)|19,147,132.22|11,379,048.09|
|Including: Net profit achieved by combined parties before the combinations|||
|Attributable to owners of the Company|14,857,989.76|10,425,680.85|
|Minority shareholders’ income|4,289,142.46|953,367.24|
|VI. Earnings per share|--|--|
|(I) Basic earnings per share|0.08|0.06|
|(II) Diluted earnings per share|0.08|0.06|
|VII. Other comprehensive incomes|276,130.47|2,635,820.49|
|VIII. Total comprehensive incomes|19,423,262.69|14,014,868.58|
|Attributable to owners of the Company|15,134,120.23|13,061,501.34|
|Attributable to minority shareholders|4,289,142.46|953,367.24|

Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 4. Income statement of the Company
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Jun. 2014|Jan.-Jun. 2013|
|I. Total sales|42,607,992.64|35,446,112.19|
|Less: cost of sales|29,080,243.87|25,180,051.16|
|Business taxes and surcharges|666,158.20|449,925.76|
|Distribution expenses|2,999,669.89|2,296,965.36|
|Administrative expenses|5,578,182.60|1,867,215.18|
|Financial costs|272,108.26|-228,194.02|
|Impairment loss|-1,498,177.31|109,836.18|
|Add: gain/(loss) from change in fair value (“-” means loss)|||
|Gain/(loss) from investment (“-” means loss)|38,189,978.21|7,533.00|
|Including: income form investment on associates and joint|||
|ventures|||
|II. Business profit (“-” means loss)|43,699,785.34|5,777,845.57|
|Add: non-business income|20,923.16|821,707.94|
|Less: non-business expense|35,791.72|267.92|
|Including: loss from non-current asset disposal|||
|III. Total profit (“-” means loss)|43,684,916.78|6,599,285.59|
|Less: income tax expense|1,396,262.02||
|IV. Net profit (“-” means loss)|42,288,654.76|6,599,285.59|
|V. Earnings per share|--|--|
|(I) Basic earnings per share|||
|(II) Diluted earnings per share|||
|VI. Other comprehensive income|||
|VII. Total comprehensive income|42,288,654.76|6,599,285.59|

 Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 5. Consolidated cash flow statement
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Jun. 2014|Jan.-Jun. 2013|
|I. Cash flows from operating activities:|||
|Cash received from sale of commodities and rendering of service|933,113,991.58|915,918,056.59|
|Net increase of deposits from customers and dues from banks|||
|Net increase of loans from the central bank|||
|Net increase of funds borrowed from other financial institutions|||
|Cash received from premium of original insurance contracts|||
|Net cash received from reinsurance business|||
|Net increase of deposits of policy holders and investment fund|||
|Net increase of disposal of tradable financial assets|||
|Cash received from interest, handling charges and commissions|||
|Net increase of intra-group borrowings|||
|Net increase of funds in repurchase business|||
|Tax refunds received|112,084,917.29|117,641,803.60|
|Other cash received relating to operating activities|50,222,647.25|51,151,986.27|
|Subtotal of cash inflows from operating activities|1,095,421,556.12|1,084,711,846.46|
|Cash paid for goods and services|863,645,276.78|917,266,347.87|
|Net increase of customer lendings and advances|||
|Net increase of funds deposited in the central bank and amount|||
|due from banks|||
|Cash for paying claims of the original insurance contracts|||
|Cash for paying interest, handling charges and commissions|||
|Cash for paying policy dividends|||
|Cash paid to and for employees|122,896,952.98|119,101,972.34|
|Various taxes paid|14,180,644.90|17,925,388.23|
|Other cash payment relating to operating activities|127,778,620.49|93,800,031.66|
|Subtotal of cash outflows from operating activities|1,128,501,495.15|1,148,093,740.10|
|Net cash flows from operating activities|-33,079,939.03|-63,381,893.64|
|II. Cash flows from investing activities:|||
|Cash received from withdrawal of investments|168,647,755.48|3,466,924.99|
|Cash received from return on investments|5,463,196.35|7,533.00|
|Net cash received from disposal of fixed assets, intangible assets|||
||1,218,609.75|5,558,991.86|
|and other long-term assets|||
|Net cash received from disposal of subsidiaries or other business|||
|||99,000.00|
|units|||
|Other cash received relating to investing activities|||
|Subtotal of cash inflows from investing activities|175,329,561.58|9,132,449.85|
|Cash paid to acquire fixed assets, intangible assets and other|||
||20,362,851.60|26,686,742.94|
|long-term assets|||
|Cash paid for investment|440,000,000.00|70,000,000.00|
|Net increase of pledged loans|||
|Net cash received from subsidiaries and other business units|||
|Other cash payments relating to investing activities|896,866,338.47||

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
||||
|-|-|-|
|Item|Jan.-Jun. 2014|Jan.-Jun. 2013|
|Subtotal of cash outflows from investing activities|1,357,229,190.07|96,686,742.94|
|Net cash flows from investing activities|-1,181,899,628.49|-87,554,293.09|
|III. Cash Flows from Financing Activities:|||
|Cash received from capital contributions|||
|Including: Cash received from minority shareholder investments|||
|by subsidiaries|||
|Cash received from borrowings|592,439,628.00|309,898,896.00|
|Cash received from issuance of bonds|||
|Other cash received relating to financing activities|143,957,350.00|158,789,800.00|
|Subtotal of cash inflows from financing activities|736,396,978.00|468,688,696.00|
|Repayment of borrowings|143,526,470.00|130,435,800.00|
|Cash paid for interest expenses and distribution of dividends or|||
||40,906,844.49|16,245,224.45|
|profit|||
|Including: dividends or profit paid by subsidiaries to minority|||
|shareholders|||
|Other cash payments relating to financing activities|12,304,200.00||
|Sub-total of cash outflows from financing activities|196,737,514.49|146,681,024.45|
|Net cash flows from financing activities|539,659,463.51|322,007,671.55|
|IV. Effect of foreign exchange rate changes on cash and cash|||
||5,011,409.41|-10,228,453.96|
|equivalents|||
|V. Net increase in cash and cash equivalents|-670,308,694.60|160,843,030.86|
|Add: Opening balance of cash and cash equivalents|834,088,959.68|759,361,575.52|
|VI. Closing balance of cash and cash equivalents|163,780,265.08|920,204,606.38|

 Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 6. Cash flow statement of the Company
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
||||
|-|-|-|
|Item|Jan.-Jun. 2014|Jan.-Jun. 2013|
|I. Cash flows from operating activities:|||
|Cash received from sale of commodities and rendering of service|73,432,284.15|27,480,016.97|
|Tax refunds received||1,109,625.87|
|Other cash received relating to operating activities|27,100,050.69|24,807,414.50|
|Subtotal of cash inflows from operating activities|100,532,334.84|53,397,057.34|
|Cash paid for goods and services|77,681,958.10|4,837,151.98|
|Cash paid to and for employees|3,793,394.55|2,773,131.19|
|Various taxes paid|2,247,632.14|1,435,032.29|
|Other cash payment relating to operating activities|30,839,863.59|39,034,499.31|
|Subtotal of cash outflows from operating activities|114,562,848.38|48,079,814.77|
|Net cash flows from operating activities|-14,030,513.54|5,317,242.57|
|II. Cash flows from investing activities:|||
|Cash received from retraction of investments|||
|Cash received from return on investments|38,189,978.21|7,533.00|
|Net cash received from disposal of fixed assets, intangible assets and other|||
||5,000.00|797,450.00|
|long-term assets|||
|Net cash received from disposal of subsidiaries or other business units|||
|Other cash received relating to investing activities|||
|Subtotal of cash inflows from investing activities|38,194,978.21|804,983.00|
|Cash paid to acquire fixed assets, intangible assets and other long-term assets|321,135.90|43,000.00|
|Cash paid for investment|||
|Net cash paid to acquire subsidiaries and other business units|||
|Other cash payments relating to investing activities|||
|Subtotal of cash outflows from investing activities|321,135.90|43,000.00|
|Net cash flows from investing activities|37,873,842.31|761,983.00|
|III. Cash Flows from Financing Activities:|||
|Cash received from capital contributions|||
|Cash received from borrowings|||
|Cash received from issuance of bonds|||
|Other cash received relating to financing activities|||
|Subtotal of cash inflows from financing activities|0.00|0.00|
|Repayment of borrowings|||
|Cash paid for interest expenses and distribution of dividends or profit|25,954,835.20|15,758,292.80|
|Other cash payments relating to financing activities|||
|Sub-total of cash outflows from financing activities|25,954,835.20|15,758,292.80|
|Net cash flows from financing activities|-25,954,835.20|-15,758,292.80|
|IV. Effect of foreign exchange rate changes on cash and cash equivalents|-15,499.05|-30,792.31|
|V. Net increase in cash and cash equivalents|-2,127,005.48|-9,709,859.54|
|Add: Opening balance of cash and cash equivalents|11,811,615.43|17,652,594.45|
|VI. Closing balance of cash and cash equivalents|9,684,609.95|7,942,734.91|

Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 7. Consolidated statement of changes inowners’ equity
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Reporting period||||||||||
||Equity attributable to owners of the Company||||||||||
|Item|||||||||||
||Paid-up capital (or share|Capital reserve|Less: treasury|Specific|Surplus reserve|General risk reserve|Retained profit|Others|Minority interests|Total owners’ equity|
||capital)||stock|reserve|||||||
|I. Balance at the end of the previous year|185,391,680.00|278,454,447.07|||11,495,983.58||46,733,303.43|-1,382,202.82|353,397,081.98|874,090,293.24|
|Add: change of accounting policy|||||||||||
|Correction of errors in previous periods|||||||||||
|Other|||||||||||
|II. Balance at the beginning of the year|185,391,680.00|278,454,447.07|||11,495,983.58||46,733,303.43|-1,382,202.82|353,397,081.98|874,090,293.24|
|III. Increase/ decrease of amount in the year (“-” means decrease)|||||||-11,096,845.44|276,130.47|-8,496,029.98|-19,316,744.95|
|(I) Net profit|||||||14,857,989.76||4,289,142.46|19,147,132.22|
|(II) Other comprehensive incomes||||||||276,130.47||276,130.47|
|Subtotal of (I) and (II)|||||||14,857,989.76|276,130.47|4,289,142.46|19,423,262.69|
|(III) Capital paid in and reduced by owners|||||||||||
|1. Capital paid in by owners|||||||||||
|2. Amounts of share-based payments recognized in owners’ equity|||||||||||
|3. Others|||||||||||
|(IV) Profit distribution|||||||-25,954,835.20||-12,877,215.93|-38,832,051.13|
|1. Appropriations to surplus reserves|||||||||||
|2. Appropriations to general risk provisions|||||||||||
|3. Appropriations to owners (or shareholders)|||||||-25,954,835.20||-12,877,215.93|-38,832,051.13|
|4. Other|||||||||||
|(V) Internal carry-forward of owners’ equity|||||||||||
|1. New increase of capital (or share capital) from capital public reserves|||||||||||
|2. New increase of capital (or share capital) from surplus reserves|||||||||||
|3. Surplus reserves for making up losses|||||||||||
|4. Other|||||||||||
|(VI) Specific reserve|||||||||||
|1. Withdrawn for the period|||||||||||
|2. Used in the period|||||||||||
|(VII) Other|||||||||92,043.49|92,043.49|
|IV. Closing balance|185,391,680.00|278,454,447.07|||11,495,983.58||35,636,457.99|-1,106,072.35|344,901,052.00|854,773,548.29|

 Unit: RMB Yuan
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Last year||||||||||
||Equity attributable to owners of the Company||||||||||
|Item|||||||||||
||Paid-up capital|Capital reserve|Less: treasury|Specific reserve|Surplus reserve|General risk reserve|Retained profit|Others|Minority interests|Total owners’ equity|
||(or share capital)||stock||||||||
|I. Balance at the end of the previous year|185,391,680.00|278,454,447.07|||6,120,201.82||20,797,991.70|-2,715,037.68|358,837,214.25|846,886,497.16|
|Add: retrospective adjustments due to business combinations under|||||||||||
|the same control|||||||||||
|Add: change of accounting policy|||||||||||
|Correction of errors in previous periods|||||||||||
|Other|||||||||||
|II. Balance at the beginning of the year|185,391,680.00|278,454,447.07|||6,120,201.82||20,797,991.70|-2,715,037.68|358,837,214.25|846,886,497.16|
|III. Increase/ decrease of amount in the year (“-” means decrease)|||||5,375,781.76||25,935,311.73|1,332,834.86|-5,440,132.27|27,203,796.08|
|(I) Net profit|||||||47,069,386.29||7,257,218.73|54,326,605.02|
|(II) Other comprehensive incomes|||||||||||
|Subtotal of (I) and (II)|||||||47,069,386.29||7,257,218.73|54,326,605.02|
|(III) Capital paid in and reduced by owners|||||||||||
|1. Capital paid in by owners|||||||||||
|2. Amounts of share-based payments recognized in owners’ equity|||||||||||
|3. Others|||||||||||
|(IV) Profit distribution|||||5,375,781.76||-21,134,074.56||-13,307,306.29|-29,065,599.09|
|1. Appropriations to surplus reserves|||||5,375,781.76||-5,375,781.76||||
|2. Appropriations to general risk provisions|||||||||||
|3. Appropriations to owners (or shareholders)|||||||-15,758,292.80||-13,307,306.29|-29,065,599.09|
|4. Other|||||||||||
|(V) Internal carry-forward of owners’ equity|||||||||||
|1. New increase of capital (or share capital) from capital public reserves|||||||||||
|2. New increase of capital (or share capital) from surplus reserves|||||||||||
|3. Surplus reserves for making up losses|||||||||||
|4. Other|||||||||||
|(VI) Specific reserve|||||||||||
|1. Withdrawn for the period|||||||||||
|2. Used in the period|||||||||||
|(VII) Other||||||||1,332,834.86|609,955.29|1,942,790.15|
|IV. Closing balance|185,391,680.00|278,454,447.07|||11,495,983.58||46,733,303.43|-1,382,202.82|353,397,081.98|874,090,293.24|

 Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 8. Statement of changes inowners’ equity of the Company
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Reporting period||||||||
|Item|Paid-up capital (or share||Less: treasury||||||
|||Capital reserve||Specific reserve|Surplus reserve|General risk reserve|Retained profit|Total owners’ equity|
||capital)||stock||||||
|I. Balance at the end of the previous year|185,391,680.00|271,485,181.40|||11,495,983.58||48,616,212.43|516,989,057.41|
|Add: change of accounting policy|||||||||
|Correction of errors in previous periods|||||||||
|Other|||||||||
|II. Balance at the beginning of the year|185,391,680.00|271,485,181.40|||11,495,983.58||48,616,212.43|516,989,057.41|
|III. Increase/ decrease of amount in the year (“-” means decrease)|||||||16,333,819.56|16,333,819.56|
|(I) Net profit|||||||42,288,654.76|42,288,654.76|
|(II) Other comprehensive incomes|||||||||
|Subtotal of (I) and (II)|||||||42,288,654.76|42,288,654.76|
|(III) Capital paid in and reduced by owners|||||||||
|1. Capital paid in by owners|||||||||
|2. Amounts of share-based payments recognized in owners’ equity|||||||||
|3. Others|||||||||
|(IV) Profit distribution|||||||-25,954,835.20|-25,954,835.20|
|1. Appropriations to surplus reserves|||||||||
|2. Appropriations to general risk provisions|||||||||
|3. Appropriations to owners (or shareholders)|||||||-25,954,835.20|-25,954,835.20|
|4. Other|||||||||
|(V) Internal carry-forward of owners’ equity|||||||||
|1. New increase of capital (or share capital) from capital public|||||||||
|reserves|||||||||
|2. New increase of capital (or share capital) from surplus reserves|||||||||
|3. Surplus reserves for making up losses|||||||||
|4. Other|||||||||
|(VI) Specific reserve|||||||||
|1. Withdrawn for the period|||||||||
|2. Used in the period|||||||||
|(VII) Other|||||||||
|IV. Closing balance|185,391,680.00|271,485,181.40|||11,495,983.58||64,950,031.99|533,322,876.97|

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Last year||||||||
|Item|Paid-up capital (or share||||||||
|||Capital reserve|Less: treasury stock|Specific reserve|Surplus reserve|General risk reserve|Retained profit|Total owners’ equity|
||capital)||||||||
|I. Balance at the end of the previous year|185,391,680.00|271,485,181.40|||6,120,201.82||15,992,469.42|478,989,532.64|
|Add: change of accounting policy|||||||||
|Correction of errors in previous periods|||||||||
|Other|||||||||
|II. Balance at the beginning of the year|185,391,680.00|271,485,181.40|||6,120,201.82||15,992,469.42|478,989,532.64|
|III. Increase/ decrease of amount in the year (“-” means decrease)|||||5,375,781.76||32,623,743.01|37,999,524.77|
|(I) Net profit|||||||53,757,817.57|53,757,817.57|
|(II) Other comprehensive incomes|||||||||
|Subtotal of (I) and (II)|||||||53,757,817.57|53,757,817.57|
|(III) Capital paid in and reduced by owners|||||||||
|1. Capital paid in by owners|||||||||
|2. Amounts of share-based payments recognized in owners’ equity|||||||||
|3. Others|||||||||
|(IV) Profit distribution|||||5,375,781.76||-21,134,074.56|-15,758,292.80|
|1. Appropriations to surplus reserves|||||5,375,781.76||-5,375,781.76||
|2. Appropriations to general risk provisions|||||||||
|3. Appropriations to owners (or shareholders)|||||||-15,758,292.80|-15,758,292.80|
|4. Other|||||||||
|(V) Internal carry-forward of owners’ equity|||||||||
|1. New increase of capital (or share capital) from capital public reserves|||||||||
|2. New increase of capital (or share capital) from surplus reserves|||||||||
|3. Surplus reserves for making up losses|||||||||
|4. Other|||||||||
|(VI) Specific reserve|||||||||
|1. Withdrawn for the period|||||||||
|2. Used in the period|||||||||
|(VII) Other|||||||||
|IV. Closing balance|185,391,680.00|271,485,181.40|||11,495,983.58||48,616,212.43|516,989,057.41|

 Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Tsann Kuen (China) Enterprise Co., Ltd.
Annotation of 30 Jun. 2014
(All amounts are expressed, unless otherwise stated, in Renminbi (CNY).)
I. Company Profile
TsannKuen (China) Enterprise Co., Ltd. (hereafter “the Company or TKC ”) was established in the People’s Republic of China (“the PRC”) in 1988 as a wholly owned foreign investment enterprise, the Company named in TsannKuen China (Xiamen) Ltd., firstly, invested by the Fordchee Co., Ltd., EUPA Industry Corporation Limited and Fillman investment Co.,Ltd. . On 16 February 1993, with the approval of the Ministry of Foreign Trade and Economic Co-operation, the Company was reorganized into a incorporated company and was renamed as
TsannKuen (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 30 June 1993. According to the “Intended Implementation of Share Reducing Proposal” of the 5th extraordinary board of director of 2012 and the 3rd extraordinaryshareholders’ general meeting of 2012, obtained the consent from the Investment Promotion Bureau of Xiamen which is authorized by the Ministry of Commerce and the approval documents ”The Approval by Investment Promotion Bureau of Xiamen to Consent the Capital Reduction of TsannKuen (China) Enterprise Co., Ltd ”(IPB audit[2012] NO. 698), as the base 1,112,350,077 shares of the total original share capital, for implementation of share reducing model that all registered
shareholders who was recorded on December 28th 2012 with the proportion 6:1 to reduce the shares. After the implementation of share reducing model, total share capital was reduced from 1,112,350,077 shares to
185,391,680 shares of the company. Until 31 December 2013, theCompany’s share capital is CNY 185,391,680. Follow The Ministry of Commerce of thePeople’s Republic of China approved（The No.[2005]3107 “Agreed in Principle to the Ministry of Commerce on TsannKuen (China) Enterprise Co., Ltd. Shares Traded Sponsor of theApproval”）, On 6 December 2006, the Company received the[2006] No.266 file “The notice of TsannKuen (China) Enterprise Co., Ltd concerningthe Approval of non-listed Foreign Shares Traded ” 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 the Company ’s shareholders, EUPA Industry Corporation Limited, Fordchee Development Limited and Fillman Investments Limited to transfer into B shares. On 29
November 2007 these B shares could be listed and exercised on Shenzhen Stock Exchange. Up to 30 June 2014, total B shares hold by the three legal shareholders (EUPA Industry Corporation Limited, Fordchee Development Limited and Fillman Investments Limited) are 84,195,844 shares after the implementation of share reducing
model.( account for45.42% of the share capital).
Legal representative: Pan Zhirong
Place of registration: No.88 Xinglong Road, Huli Industrial District, Xiamen, Fujian Province
The ultimate parent company of the Company is Star Comgistic Capital Co. Ltd. which found in Taiwan.
The Company operates within the electrical machinery and equipment manufacturing industry.
The approved business scope: the main business is to develop, manufacture and sell household appliances,
electronics, light industrial products, modern office supplies; design and manufacture moulds relevant to the
above products, sell the products of the Company at home and abroad, and provide after-sell services; engage in wholesale, retail, import and outport of household appliances, electronics, electromechanical devices, office
supplies, kitchenware and prepackage food, and provide after-sell services. For the main business of the
subsidiaries see Note XI.
The Financial Report approved by the Board of the Directors of the Company and disclosed on 8 Aug. 2014.
II. Basis for preparation of the financial 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 in February 2006, and Accounting Standards (order No.38 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 (2010 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.
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Where assets are impaired, provisions for asset impairment are made in accordance with relevant requirements. III. Statement of Compliance with Enterprise Accounting 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 30 Jun. 2014. 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 (2010 Revision) issued by China Securities Regulatory
Commission (CSRC) in 2010.
IV. Important Accounting Principles and Accounting 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 of the Company is the calendar year from January 1 to December 31.
2. Monetary Unit
Yuan (CNY) is the currency of the primary economic environment in which the Company and its domestic
subsidiaries operate. Therefore, the Company and its domestic subsidiaries choose CNY as their functional
currency, the overseas subsidiaries decide the HKD or USD as their functional currency in accordance with the business in which currency of the primary economic environment. The Company adopts CNY to prepare its
functional statements.
3. Business combination
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 under common control
A business combination involving enterprises under common control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory.
For a business combination involving enterprises under common control, the party that, on the combination date, obtains control of another enterprise participating in the combination is the absorbing party, while that other
enterprise participating in the combination is a party being absorbed. Combination date is the date on which the absorbing party effectively obtains control of the party 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 not under common control
A business combination involving enterprises not under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the
business combination.
For a business combination not involving enterprises under common control, the party that, on the acquisition date, obtains control of another enterprise participating in the combination is the acquirer, while that other enterprise participating in the combination is the acquiree. Acquisition date is the date on which the acquirer effectively obtains control of the acquiree.
For a business combination not involving enterprise under common control, the combination cost including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. issued by the acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services, valuation and consultancy services etc and other associated administrative expenses attributable to the business combination are recognized in profit or loss when they are incurred.
The transaction cost arose from issuing of equity securities or liability securities shall be initially recognized as equity securities or liability securities.
The contingent consideration related to the combination shall be booked as combination cost at the fair value at the acquisition date. If, within the 12 months after acquisition, additional information can prove the existence of related information at acquisition date and the contingent consideration need to be adjusted, goodwill can be
adjusted.
Combination cost of theacquirer’s interest and identifiable net assets of the acquirer acquired through the business combination shall be measured by the fair value at the acquisition date. Where the cost of combination exceeds theacquirer’s interest in the fair value of theacquiree’s identifiable net assets, the difference shall be recognized as goodwill. Where the cost of combination is less than the acquirer’s interest in the fair value of the acquiree’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 the acquiree ’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 or loss for the 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 if the recognition of
deferred income tax assets is related to the combination.
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” (CaiKuai[2012] No. 19) on the “package deal” criterion (see Note 4.4.2) , 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 4.10 “long-term investment” accounting treatment, if it does not belong to the “package deal” to distinguish the individual financial statements and the consolidated financial statements related to the accounting treatment:
In the individual financial statements, the total value of the book value of the acquiree's equity investment before the acquisition date and the cost of new investment at the acquisition date, as the initial cost of the investment, the acquiree's equity investment before the acquisition date involved in other comprehensive income, in the disposal of the investment and other associated comprehensive income transferred to 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 other comprehensive income of the acquiree before the acquisition date relating to the previously held interest in the acquiree is transferred to investment income.
4. Preparation of the consolidated financial statements
(1)The scope 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 of the subsidiaries. Subsidiary is an enterprise or entity under the control of the Company.
(2) Preparation of the consolidated 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.
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. For a subsidiary acquired through a business combination not under common control, the operating results and cash flows from the acquisition (the date when the control is obtained) are included in the consolidated income statement and consolidated statement of cash flows, as appropriated; no adjustment is made to the opening
balance and comparative figures in the consolidated financial statements.
Where a subsidiary was acquired during the reporting period, through a business combination involving
enterprises under common control, the financial statements of the subsidiary are included in the consolidated
financial statements. The results of operations and cash flow are included in the consolidated balance sheet and the consolidated income statement, respectively, based on their carrying amounts, from the date that common control was established, and the opening balances and the comparative figures of the consolidated financial
statements are restated.
When the accounting period or accounting policies of a subsidiary are different from those of the Company, the Company makes necessary adjustments to the financial statements of the subsidiary based on theCompany’s own accounting period or accounting policies. Where a subsidiary was acquired during the reporting period through a business combination not under common control, the financial statements was reconciliated on the basis of the fair value of identifiable net assets at the date of acquisition. Intra-Group balances and transactions, and any
unrealized profit or loss arising from intra-Group transactions, are eliminated in preparing the consolidated
financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Company are presented separately in the consolidated balance sheet withinshareholders’/owners’ equity and net profit. Net profit or loss attributable to minority shareholders in the subsidiaries is presented separately as minority interest in the consolidated income statement below the net profit line item.
When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds the minorityshareholders’ portion of the opening balance ofshareholders’/equity of the subsidiary, the excess is allocated against the minority interests.
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. The amount recognized in other comprehensive income in relation to the formersubsidiary’s equity investment is reclassified as investment income for the current period when control is lost. 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 4.10 Long-term equity investments and Note 4.7 Financial instruments for details.
The company through multiple transactions step deals with disposal of the subsidiary's equity investment until the loss of control, need to distinguish between equity until the disposal of a subsidiary's loss of control over whether the transaction is package deal. Terms of the transaction disposition of equity investment in a subsidiary, subject to the following conditions and the economic impact of one or more of cases, usually indicates that several
transactions should be accounted for as a package deal:①these transactions are considered simultaneously, or in the case of mutual influence made,②these transactions as a whole in order to achieve a complete business results;③the occurrence of a transaction depends on occurs at least one other transaction ;④a transaction look alone is not economical, but when considered together with other transaction is economical. If they does not belong to the package deal, each of them separately, as the case of a transaction in accordance with “without losing control over the disposal of a subsidiary part of a long-term equity investments“ (see Note 4.10.2, 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 the subsidiary's investment corresponding to the difference between the
disposals, recognized in the consolidated financial statements as other comprehensive income, loss of control over the transferred together with the loss of control or loss in the period.
5. 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 low risks of change.
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 6. 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 the foreign exchange are translated at the spot exchange rate.
(2) Translation of monetary foreign currency and non-monetary foreign currency
At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at the
balance sheet date. All the exchange differences thus resulted are taken to profit or loss, except for ①those 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, ③ available-for-trade is recorded into profit or loss except for amortized cost.
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 thus resulted are recognized in profit or loss for the current period or as capital reserve.
(3) The translation of financial 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 or loss for the period upon disposal of the foreign operation.
The Group translates the financial statements of its foreign operations into CNY by following rules. Assets and liabilities in the balance sheet are translated at the spot exchange rate prevailing at the balance sheet date; all
equity items except for retained earnings are translated at the spot exchange rates at the dates on which such items occur; income and expenses in income statement are translated at the spot exchange rates at the date of transaction; the opening retained earnings is the closing retained earnings of the last period after translation; the closing
balance of retained earnings is calculates and presented in the basis of each translated income statements and
profit distribution item; the difference arising between the assets and liabilities and shareholders’ 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 over Group’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 the owners’ equity of the Company and presented undershareholders’ equity, to profit or loss in the period in which the disposal 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 an adjustment item in the cash flow statement.
The opening and actual amount of last year are presented in the financial statement after translation.
7. Financial instruments
(1) Determination of financial 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 recent arm ’s length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. same, discounted cash flow analysis and option pricing models.
The Company measures initially and subsequently the fair value of an interest rate swap at the value of a
competitor’s interest rate swap quoted by a recognized financial institution as at theCompany’s balance sheet date in accordance with the principle of consistency.
(2) Classification, recognition and measurement of financial 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 to financial assets of other categories are included in the amount initially recognized.
1) Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or loss.
Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in 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 the purpose of
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 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 asset is designated on initial recognition as at fair value through profit or loss only when it meets one of the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or recognition of
relevant gains or losses that would otherwise arise from measuring the financial instruments on different bases. B. a Group of financial instruments is managed and its performance is evaluated on a fair value basis, and is
reported to the enterprise’s key management personnel. Formal documentation regarding risk management or investment strategy has prepared.
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 on the financial assets are
recognized in the profit or loss.
2) Investment 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
derecognizing, impairment or amortization are recognized in profit or loss for the 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 the financial asset or financial liability.
When calculating the effective interest rate, the Company shall estimate future cash flow considering all
contractual terms of the financial asset or financial liability without considering future credit losses, and also
consider all fees paid or received between the parties to the contract giving rise to the financial asset and financial liability that are an integral part of the effective interest rate, transaction costs, and premiums or discounts, etc. 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 derecognizing, impairment or amortization is recognized in profit or loss.
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 value
through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 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 or loss.
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 be impaired, a provision is provided for the impairment.
1) Impairment on held-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.
2) Impairment loss on available-for-trade financial assets
Where the fair value of the equity instrument investment drops significantly or not contemporarily according to the integrated relevant factors, an available-for-trade financial asset is impaired.
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair value that had been recognized in capital reserve shall be removed and recognized in profit or loss. The amount of the cumulative loss that is removed shall be difference between the acquisition cost with deduction of recoverable amount less amortized cost, current fair value and any impairment loss on that financial asset previously
recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of the financial asset is recovered, and it is objectively related to an event occurring after the impairment loss was recognized, the initial impairment loss can be reversed and the reserved impairment loss on available-for-trade equity instrument is
recorded in the profit or loss, the reserved impairment loss on available-for-trade debt instrument is recorded in the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot be reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument shall not be reversed.
(4) Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a pass-through arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred
substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the 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 the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognizing criteria, (a) the carrying amount of the financial asset transferred; and (b) the sum of the consideration received from the transfer and any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognizing, 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 in other comprehensive income, is recognized in profit or loss.
(5) Classification and measurement of financial liabilities
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 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 by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the initial
recognition to be measured by the fair value follows the same criteria as the classification by which financial
assets held-for-trade and financial assets designed at the initial recognition to be measured by the fair value and their changes are recorded in the current profit or loss.
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 or loss for the current 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 derecognizing or amortization are recognized in profit or loss for the current period.
(6) Derecognizing of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation (or part of it) is discharged or cancelled or has expired. An agreement between the Company (an existing borrower) and existing lender to replace original financial liability with a new financial liability with substantially different terms is
accounted for as an extinguishment of the original financial liability and the recognition of a new liability.
When the Company derecognizes a financial liability or a part of it, it recognizes the difference between the
carrying amount of the financial liability (or part of the financial liability) derecognized the consideration paid (including any non-cash assets transferred or new financial liabilities assumed) in profit or loss.
(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 is recognized in profit or loss.
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 or financial liability at fair value through profit or loss.
(8) Offsetting financial 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) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The consideration received from issuing equity instruments, net of transaction costs, are added toshareholders’ equity. All types of distribution (excluding stock dividends) made by the Company to holders of equity instruments are deducted fromshareholders’ equity. The Group does not recognize any changes in the fair value of equity instruments.
8. Receivables
The receivables by the Company include account receivables, and other receivables.
(1) Criteria for recognition of bad debts:
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. The Company carries out an inspection on the balance sheet date. Where there is any objective evidence proving that the receivables have been impaired, an impairment provision shall be made:
1) A serious financial difficulty occurs to the issuer or debtor;
2) The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of
interests or the principal, etc.;
3) The debtor will probably become bankrupt or carry out other financial reorganizations;
4) Other objective evidences showing the impairment of the receivables.
(2) Method for bad debts provision
① Provisions of bad debts in account receivables that is individually significant.
Individual receivables equal to or higher than10% of total receivables are classified as receivables of individual 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 cash flow less the carrying amount, and provision is made accordingly.
② Provisions of bad debts in account receivables that individually insignificant item with similar credit risk
characteristics that have significant risk:
A. Evidence of credit risk characteristics
Whether the financial asset is individually significant or not individually significant, it is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment. Such credit risk reflects the repayment of all due amount under the contract, and is related to the estimation of future cash flow expected to be derived from the assets.
Evidence of portfolios:
Item Basis
Age portfolios Age
Related party portfolios The companies which are in the scope of the consolidation.
B. Provision by credit 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 for different portfolios:
Item Provision
Age portfolios Age analysis method
Related party portfolios No allowance for bad debt, Unless the related party is insolvent
a. Portfolio by age analysis
Category Proportion for accounts receivable(%) Proportion for other receivable(%)
1 to 90 days 0.00 0.00 91 to 180 days 10.00 10.00 181 to 270 days 30.00 30.00 271 to 365 days 50.00 50.00 Over 365 days 100.00 100.00 b. Adopt other methods for recognition of impairment allowances:
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Group name Proportion for accounts receivable(%) Proportion for other receivable(%)
Related party group 0.00 0.00③ Provisions of bad debts that is individually insignificant.
For the account receivables not individually significant, the Company assesses the account receivables
individually for impairment when are of following characteristics: if there is objective evidence indicating the impairment, the impairment loss is recognized at the difference between the present value of future cash flow less the carrying amount, and provision is made accordingly. For examples: receivables of individual insignificance bears differing credit risk characteristics to other receivables of individual insignificance account receivables with related parties; account receivables under litigations or arbitrations, or account receivables with obvious indication that debtor cannot fulfill the obligation of repayment.
(3) The reversal of bad debts provision
If there is objective evidence of recovery in value of account receivables, and the recovery can be related to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and recognized in profit or loss. However, the reversal shall not result in a carrying amount that exceeds what the amortized cost would have been had the impairment loss not been recognized at the date the impairment is
reversed.
9. Inventories
(1) Classification of inventory
Inventories include finished goods and merchandises held for sale, work-in-progress and materials and supplies to be consumed in the course of production of goods or rendering of services. Inventories are classified into
materials in transit, raw materials, work-in-progress, finished goods, materials and goods of consignment and revolving materials etc.
(2) Valuation method 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 inventories
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clear evidence obtained, and takes into consideration the purpose of holding inventories and effect of post 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 on an aggregate basis.
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 is included in profit or loss for the period.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method for low cost and short-lived consumable items and packaging materials.
Low cost and short-lived consumable items are amortized using immediate write-off method, packaging materials are amortized using immediate write-off method.
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 10. Long-term equity investments
(1) Determination of Investment cost
For a business combination involving enterprises under common control, the initial investment cost of the
long-term equity investment shall be carrying value of the absorbing party’s share of theshareholder’s equity of the party being absorbed at the date of combination.
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 for the equity securities or liability securities issued by the acquirer in the business
combination shall be recognized as initial amount of equity security or liability.
The equity investments other than the long-term equity through combination shall be initially measured by cost. The cost shall be recognized to the difference in the way of acquisition of long-term equity investment. Theses ways include the cash purchase price the Company actually paid, the fair value of equity security issued by the Company, value specified in the investment contract or agreement, the fair value or carrying value of the asset out in the transaction of non-monetary asset exchanges, and the fair value of the long-term equity investment.
Expenses, taxes and other necessary expenditures directly attributable to the acquisition of long-term equity
investment are taken into investment cost.
(2) Subsequent Measurement
Cost method shall be adopted in a long-term equity investment where the investing enterprise does not have
common control or significant influence over the investee, the investment is not quoted in an active market and its fair value cannot be measured reliably.
Where an investing enterprise can exercise common control or significant influence over the investee, a long-term investment shall be accounted for using the equity method.
When an investing enterprise can no longer exercise joint control or common control nor significant influence over the investee, and its fair value cannot be measured reliably, a long-term investment shall be counted as
financial asset ready-for trade.
A long-term equity investment where cost method is adopted in theCompany’s financial statements can exercise controls over the investee.
1) Cost method of accounting 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 by the investee.
2) Equity method of accounting for long-term equity investments
Where the initial investment cost of a long-term equity investment exceeds the investing enterprise’s interest in the fair values of theinvestee’s identifiable net assets at the time of acquisition, no adjustment shall be made to the initial investment cost.
Where the initial investment cost of a long-term equity investment is less than the investingenterprise’s interest in the fair values of investee’s identifiable net assets at the time of acquisition, the difference shall be charged to profit or loss for the current period, and the cost of the long-term equity investment shall adjusted accordingly. Under the equity method, the Company recognizes its share of the net profit or loss of the investee for the period as investment income or loss for the period. The Group recognizes it share of the investee ’s net profit or loss based on the fair value of the investee’s individual separately identifiable assets, etc at the acquisition date after making appropriate adjustments to confirm with the Company’s accounting policies and accounting period. Unrealized profits or losses resulting from the Company’s transactions with its associates and joint ventures are recognized as investment income or loss to the extent that those attributable to the Company’s equity interest are eliminated. However, unrealized losses resulting from the Company’s transactions with its investees on the transferred assets, in accordance with "Accounting Standards for Enterprises No. 8 - Impairment of Assets", are not eliminated. Changes in owners’ equity of the investee other than net profit or loss are correspondingly
adjusted to the carrying amount of the long-term equity investment, and recognized as other compressive income which is included in the capital reserve.
When the investee is recognized net losses, reduce the carrying value of long-term equity investments and
long-term equity of net investment (in substance) in investee to zero. In addition, the Company has the obligations
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. on additional losses, then the expected obligation as estimated liabilities and included in the current investment losses. Where the net profit from investee units, restoration confirm the amount of revenue sharing after offset the amount of unrecognized loss sharing.
For long-term equity investments in associates and joint ventures which had been held by the Company before its first time adoption of Accounting Standards for Business Enterprises, where the initial investment cost of a
long-term equity investment exceeds theCompany’s interest in theinvestee’s net assets at the time of acquisition, the excess is amortized and is recognized in profit or loss on a straight line basis over the original remaining life. 3) Acquisition of minority interest
The difference between newly increased equity investment due to acquisition of minority interests and portion of net asset cumulatively calculated from the acquisition date is adjusted as capital reserve. If the capital reserve is not sufficient to absorb the difference, the excess are adjusted against returned earnings.
4) Disposal of long-term equity investment
Where the parent company disposes long-term investment in a subsidiary without a change in control, the
difference in the net asset between the amount of disposed long-term investment and the amount of the
consideration paid or received is adjusted to the owner’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 4.4.2 applies.
On disposal of a long-term equity investment, the difference between the proceeds actually received and
receivable and the carrying amount is recognized in profit or loss for the period. For along-term equity investment accounted for using the equity method, the amount included in the owners’ equity attributable to the percentage interest disposed is transferred to profit or loss for the period.
For any retained interest, it shall be subsequently measured according to the related accounting policies in regard of long-term equity investments or financial assets as described above if its carrying amount is recognized as
long-term equity investments or other related financial assets. Retroactive adjustment is made on the basis of
relevant policies if the retained interests are settled from cost method to equity method.
(3) Recognition of investee under common control or significant influence
Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities.
Common control is the contractually agreed sharing of control over an economic activity, and exists only when the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
When determining whether an investing enterprise is able to exercise control or significant influence over an
investee, the effect of potential voting rights of the investee held the investing enterprise or other parties that are currently exercisable or convertible shall be considered.
(4) Impairment testing methods and recognition of impairment provision
The company assesses the long-term equity investment at the balance sheet date whether there is any indication of impairment. If any indication exists that an asset may be impaired, the enterprise shall estimate its recoverable value of the asset. If the recoverable value of the asset is less than its carrying amount, a provision for impairment loss of the asset is recognized accordingly.
Once an impairment loss is recognized, it shall not be reversed in a subsequent period.
11. 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. 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 of gains or losses when occurred.
The Group uses the cost model for subsequent measurement of investment property, and in accordance with the depreciation or amortization of buildings or land use rights policy.
Investment property impairment test method and impairment accrual method described in Note 4.17 “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 the book value before the conversion.
12. Fixed assets
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. (1) The conditions of recognition
Fixed assets refers to the tangible assets that are held for the sake of producing commodities, rendering labor
service, renting or business management and their useful life is in excess of one fiscal year.
(2) The method for depreciation
Fixed assets are stated at cost and consider the impact of expected costs of abandoning the initial measurement. From the following month of state of intended use, depreciation method of the straight-line method is used for different categories of fixed assets to take depreciation. The recognition of the classification, useful life and
estimated residual rate are as follows:
Category Estimated residual value(%) Expected useful life Depreciation(%)
Houses and building 10.00 20 4.50 Machineries 0.00 11-18 5.56-9.09 Electronicdevice、furniture and modules 0.00 5-6 16.67-20.00 Vehicles 0.00 6 16.67 Improvement expense of leased fixed assets 0.00 the shorter of lease term and beneficial lives 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 life and state the expected service life in the end.
(3) Measurement and recognition of fixed assets impairment
Impairment and provisions of fixed assets are disclosed on Note 4.17 Impairment of non-current and non-financial assets.
(4) Fixed Assets under finance leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. Title may or may not eventually be transferred.
Fixed assets that are held under finance leases shall be depreciated by applying the same policy as that for the fixed assets owned by the Company. If it can be reasonably determined that the ownership of the leased assets can be obtained at the end of the lease period, the leased assets are depreciated over their useful lives; otherwise, the leased assets are depreciated over the shorter of the lease terms and the useful lives of the leased assets.
(5) Others
A fixed asset is recognized only when the economic benefits associated with the asset will probably flow to the Company and the cost of the asset can be measured reliably. Subsequent expenditure incurred for a fixed asset that meet the recognition criteria shall be included in the cost of the fixed asset, and the carrying amount of the component of the fixed asset that is replaced shall be derecognized. Otherwise, such expenditure shall 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 of carrying value and related tax.
The Company conducts a review of useful life, expected net realizable value and depreciation methods of the fixed asset at least on an annual base. Any change is regarded as change in accounting estimates.
13. 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 for intended use.
Testing method for provision impairment of construction in progress and accrued method for provision
impairment please refer to Note 4.17.
14. Borrowing costs
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 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 for their
intended use or sale.
Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used on the asset or any investment income on the temporary investment of those funds.
Where funds are borrowed for a general-purpose, the amount of interest to be capitalized on such borrowings is determined by applying a weighted average interest rate to the weighted average of the excess amounts of
accumulated expenditure on the asset over and above 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 recognized in profit or loss in the period in which they are incurred.
Assets qualified for capitalization are the fixed assets, investment properties or inventories which need a long time of construction or production activities before ready for intended used or sale.
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 until the acquisition, construction or production is resumed.
15. Intangible assets
(1) Intangible asset
The term “intangible asset” refers to the identifiable non-monetary assets without physical shape, possessed or controlled by enterprises.
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 this shall be booked in the profit or loss when they occur.
Land use rights that are purchased by the 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 should accounted for as fixed assets.
When an intangible asset with a definite useful life is available for use, its original cost less net residual value and any accumulate impairment losses is amortized over its estimated useful life using the straight-line method. An intangible asset with an indefinite useful life is 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 of the research phase is recognized in the profit or loss in the period in which it is incurred.
Unless the following conditions are satisfied, cost of the development phase is recognized in the profit or loss in the period in which it is incurred:
1) it is technically feasible to complete the intangible asset so as to use it or sell it;
2) it is clearly invented to complete the intangible asset in order to use it or sell it;
3) 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;
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 4) there are sufficient technical, financial and other resources to complete the intangible asset and to use it or sell it;
5) the cost of the development of the intangible can be measured reliably.
If the cost cannot be distinguished into the search phase and the development phase, it is recognized in the profit or loss for the period in which it is incurred.
(3) Impairment of intangible assets
Impairment and provisions of intangible assets are disclosed on Note 4.17.
16. Long-term deferred expenditure
An item long-term deferred expenses is an expense which has been incurred and which has a beneficial period (a period during which an expense is expected to bring economic benefits to an entity) which is longer than one year and which includes at least part of the reporting period during which the expense was incurred and subsequent reporting periods. An item of long-term deferred expenses is recognized at the actual amount of the expense
incurred and allocated in each month of the beneficial period using the straight line method.
17. Impairment of non-current and non-financial assets
Non-financial assets with non-current nature include fixed assets, construction in progress, intangible assets with definite useful lives, investment properties measured by cost methods and long-term equity investment on
subsidiaries, jointly operations. The Company assesses whether there are any indicators of impairment for all non-financial assets at the balance sheet date, and impairment test is carried out and recoverable value is estimated if such an indicator exits. Goodwill and intangible assets with indefinite useful lives, as well as intangible assets not ready for use, are tested for impairment annually regardless of indicators 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 cost. The fair value of asset is determined by the sales agreement price within an arm’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 flow in independently.
The Company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the present value of the future expected cash flows from the asset Groups or sets of asset Groups to which the goodwill is allocated. Estimating the present value requires the Company to make an estimate of the expected future cash flows from the asset Groups or sets of asset Groups and also choose a suitable discount rate in order to calculate the present value of those cash flows. Once the loss from above asset impairment is recognized, the
recoverable part cannot be reserved in the subsequent periods.
18. The buyback conditions attached to the transferred assets
The sales and buy back is one of sales mode of the Company, that is means when sale the product, simultaneously agreed to buy back the same or similar product in the future. Under this sales mode, the Company according to the clause of contract or agreement to decide whether the revenue recognition criteria are satisfactory. If the Company has not transferred to the buyer the significant risks and rewards of ownership of the goods, the Company should not recognize the revenue; If the buy back price higher than the original sales price, during the buy back period, the Company shall recognize the interest expenses to income statement (financial expenses).
19. 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:
①This obligation is current obligation of the Company; and,
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.②The performance of this obligation will probably cause economic benefits outflow of the Company; and,
③The amount of this obligation can be reliably measured.
On balance sheet date the Company performed relate obligation that consider risk, incertitude, time value of
currency of contingency factor. According to the best estimate of the expenditure required to settle the present obligation for estimated liabilities 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 of estimated liabilities.
20. Shares-based payment
(1) Categories of share-based payment
The types of shares-based payment of the Company are: cash-settle and equity-settle.
② Cash-settled share-based payment
The measurement of cash-settle is according with the fair value of liability undertake by the Company, which is calculated base on theCompany’s share or other equity instrument.
The value of cash-settle share-based payment that could exercise immediately after award would be reckoned to relate cost or expense, and increase liability corresponds to it.
On each balance sheet date, a best estimated of situation of exercise cash-settled right that with waiting-period should be undertaken, and reckon cost or expense and increase liability which is on the base of service award by the Company, according to the fair value ofcompany’s liability.
① Equity-settled share-based payment
Equity settled share-based payments for employee services are measured by the fair value of the instruments
granted to employees on the date of grant. For instruments exercisable upon satisfaction of performance of expiry of vesting period for services, the fair value is amortized by the straight-line method and recognized in profit or loss for the relevant periods; for those with immediate exercisability, the fair value is recognized immediately in profit or loss and added to capital reserves.
Equity settled share-based payments for services rendered by third parties are measured by the fair value of
services on the receipt date if the relevant fair value can be reliably estimated and by the fair value of the
instruments on the service receipt date if the fair value of services received cannot be reliably estimated and the fair value of the instruments is reliably estimated. The measured fair value is recognized in the profit or loss and added equity.
(2) Determining the fair value of equity instruments granted
① For those shares granted to employees shall measure the fair value of equity instruments granted at the
measurement date, based on market prices if available, simultaneously, taking into account the terms and
conditions ( exclude the vesting conditions of external market) upon which those equity instruments were
granted.
② For those share options granted to employees, the market prices are not available in most circumstance. If there is no clause and requirement of other similar trading options, the Company shall estimate the fair value of the share option granted using a valuation technique.
(3) Base of the best estimate of vesting equityinstrument’s reorganization
On each balance sheet date of waiting-period, the Company shall recognize an amount for the equity instrument during the vesting period based on the best available estimate of the number of equity instruments expected to vest and shall revise that estimate, if necessary, if subsequent information indicates that the number of equity
instruments expected to vest differs from previous estimates.
(4) Implementation, modification, termination of share-based payment plan with the relevant accounting treatment
The Company to modify the plans of shares payments, if the modification increases the fair value of the equity instruments granted; in accordance with the increase in the fair value of equity instruments are recognized
accordingly get increased services. Increase in the fair value of the equity instruments is the difference of fair value between before and after of the modified date. If the modification reduces the total fair value of the shares paid or used other workers is not conducive to the way the service will continue to be made in the accounting treatment, as if the change had not occurred, unless the company to cancel some or all of the granted equity tool. If canceled equity instruments granted during the waiting period, the Company canceled equity instruments
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. granted as an acceleration of vesting treatment, the amount of the remaining waiting period should be recognized immediately in profit or loss, while recognizing the capital reserve. Employees or other parties can choose to meet non-vesting conditions are not met in the waiting period; the Company will be treated as canceled equity
instruments granted.
(5) The accounting treatment related to the Company and the shareholders of the Company or actual
control of share-based payment transactions
Shares in respect of the Company and the shareholders of the Company or actual control of payment transactions, one of the settlement enterprise and receiving services enterprise is in the Company and the other is outside of the Company, the Company's consolidated financial statements are accounted for the following provisions treatment :① Settlement companies settled in its own equity instruments to pay the share transaction as an equity-settled share-based payment processing; in addition, as a cash-settled share-based payment processing.
Settlement companies are receiving services business investors, the fair value of the equity instruments at the grant date fair value of liabilities assumed or to be recognized as the acceptance of long-term equity investment service companies, while recognizing capital reserve (other capital surplus) or liability .
② Receive services companies do not settle the obligation or the employees of the enterprise is granted its own equity instruments, the share-based payment transaction as equity-settled share-based payment processing; accept the obligations and settlement services companies with enterprise workers are not granted its own equity
instruments of the share-based payment transaction as cash-settled share-based payment processing.
Shares occurred between the companies trading in the Company's payment, acceptance and settlement service business enterprise is not the same enterprise, the recognition and measurement of share-based payment
transactions in accepting the settlement enterprise and service enterprises in the each individual financial
statement, as above principles treatment.
21. Revenue
(1) Revenue from sales of goods
Revenue from sales of goods is recognized 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 the buyer’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 and the claim indemnity rate to
recognize the claim indemnity expense.
(2) Revenue from rendering of service
Revenue arising from rendering of services is recognized 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 the services can
be reliably measured.
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. When the outcome of the services rendered cannot be reliably estimate, revenue is recognized as cost
reimbursement received or to be received, if any, and cost incurred is recognized in profit or loss for the period in which the cost is incurred. No revenue is recognized 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 indistinguishable or distinguishable but not 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 recognized as revenue and expenses respectively by reference to the stage of completion of the contract activity at the balance sheet date.
In the case of a fixed price contract, the outcome of a construction contract can be estimated reliably when all the following conditions are satisfied:to①tal contract revenue can be measured reliably; it ispr②obable that the
economic benefits associated with the contract will flow to the enterprise;th③e 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,b④oth the contract costs to complete the contract and the stage of contract completion at the balance sheet date can be measured reliably.
When the outcome of a construction contract cannot be estimated reliably, but revenue should be recognized only to the extent of contract costs incurred that it is probable will be recoverable; and If the cost can not be recovered, contract costs should be recognized as an expense in the period in which they are incurred. So that the results of a construction contract can not be reliably estimated uncertainties exist, to determine the percentage of completion method and construction contracts related income and expense.
An expected loss on the construction contract should be recognized as an expense immediately.
(4) Royalty Revenue
According to the contract or agreement, the revenue is recognized on an accrual basis.
(5) Interest Income
The amount of interest revenue should be measured and confirmed in accordance with the length of time for
which the enterprise's cash is used by others and the actual interest rate.
22. Government Grants
Government grants are transfer of monetary assets and non-monetary assets from the government to the Company at no consideration, excluding the capital invested by the government as equity owner. Government grant can be classified as grant related to the assets and grants related to the income.
The government grants which were acquired by the Company will be used to purchase or otherwise form become long-term assets will be defined as grant related to the assets; the others will be defined as grants related to the income. If the files have not clearly defined government grants objects, it will be divided in the following manner compartmentalize the grants into rant related to the assets and grants 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 the income.
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 grants actually, 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) grants receivable of government departments issued a document entitled have been confirmed, or could reasonably 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
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. based on the local financial sector to be officially released and financial support for the project and its financial fund management approach voluntarily disclosed in accordance with the provisions of “Regulations on Disclosure Government Information”, and the management approach should be (inclusive of any compliance business
conditions may apply), and not specifically formulated for specific businesses;(3) related grants approval has been clearly committed the deadline, and is financed by the proceeds of a corresponding budget as a guarantee, so that will be received within the prescribed period with the a reasonable assurance; (4) according to the specific
circumstances of the Company and the subsidy matter, should satisfy the other conditions (if any).
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, the grant is recognized immediately in profit or loss for the period.
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 or loss for the period.
23. Deferred tax assets and deferred tax liabilities
(1) Income tax for the current period
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, according to the requirements of tax laws. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Company expects at the balance sheet date, to recover the assets or settle the
liabilities.
At the balance sheet date, current income tax liabilities or assets for the current and prior periods are measured at the amount expected to be paid (or recovered) according to the requirements of tax laws. The calculation for
income tax expenses in the current period is based on the taxable income according to the related tax laws after adjustment to the accounting profit of the reporting period.
(2) Deferred income tax assets and liabilities
For temporary differences between the carrying amount of certain assets or liabilities and their tax base, or
between the nil carrying amount of those items that are not recognized as assets or liabilities and their tax base that can be determined according to tax laws, deferred tax assets and liabilities are recognized using the balance sheet liability method.
For temporary differences associated with the initial recognition of goodwill and the initial recognition of an asset or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax asset or liability is recognized. For taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, no deferred income tax liability related is recognized except where the Company is able to control the timing of reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
All deferred income tax liabilities arising from taxable temporary differences except the ones mentioned above are recognized.
For temporary deductible differences associated with the initial recognition of an asset or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax asset is recognized.
For taxable temporary deductible differences associated with investments in subsidiaries and associates, and
interests in joint ventures, no deferred income tax asset related is recognized if it is impossible to reversal the temporary difference in the foreseeable future, or it is not probable to obtain taxable income which can be used for the deduction of the temporary difference in the future.
Except mentioned above, the Company recognizes other deferred income tax assets that can deduct temporary differences to the extent that it is probable that taxable profits will be available against which the deductible
temporary differences can be utilized.
For the deductible losses and tax credit that can be carried forward, deferred tax assets for deductible temporary
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. differences are recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to tax laws, which are expected to apply in the period in which the asset is realized or the liability is settled.
At the balance sheet date, the Company reviews the carrying amount of deferred tax assets. If it is no longer
probable that sufficient taxable profit will be available in future periods to allow the benefits of the deferred tax assets to be used, the Company reduces the carrying amount of deferred tax assets. The amount of such reduction is reversed when it becomes probable that sufficient taxable profit will be available.
(3) Income tax expenses
Income tax expenses consist of current income tax 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 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 income tax liability.
24. Leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. Title may or may not eventually be transferred. An operating lease is a lease other than a finance lease.
(1) The Company as Lessee under operating Lease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term, and either included in the cost of the related asset or charged to profit or loss for the current period. The
contingent rents shall be recorded in the profit or loss of the period in which they actually arise.
(2) The Company as Leaser under operating Lease
Lease income from operating leases shall be recognized by the leaser in profit or loss on a straight-line basis over the lease term. Initial direct cost of significance in amount shall be capitalized when incurred. If another basis is more systematic and rational, that basis may be used. Contingent rents are credited to profit or loss in the period in which they actually arise.
(3) The Company as Lessee under financing Lease
For an asset that is held under a finance lease, at the lease commencement, the leased asset is recorded at the
lower of its fair value at the lease commencement and the present value of the minimum lease payments, and the minimum lease payment is recorded as the carrying amount of the
long-term payables; the difference between the recorded amount of the leased asset and the recorded amount of the payable is accounted for as unrecognized finance charge, Initial direct costs incurred by the lessee during the process of negotiating and securing the lease agreement shall be added to the amount recognized for the leased asset.
The net amount of minimum lease payment deducted by the unrecognized finance shall be separated into
long-term liabilities and long-term liability within one year for presentation.
Unrecognized finance charge shall be computed by the effective interest method during the lease term. Contingent rent shall be booked into profit or loss when actually incurred.
(4) In the case of the lessor of a financing lease
For an asset that is leased out under a finance lease, the aggregate of the minimum lease receipts at the inception
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. of the lease and the initial direct costs is recorded as a finance lease receivable, and unguaranteed residual value is recorded at the same time; the difference between the aggregate of the minimum lease receipt, initial direct costs, and unguaranteed residual value, and the aggregate of their present values, is recognized as unearned finance income, which is amortized using the effective interest rate method over each period during the lease term.
Finance lease receivable less unearned finance income shall be separated into long-term liabilities and long-term liability within one year for presentation.
Unearned finance income shall be computed by the effective interest method during the lease term. Contingent rent shall be credited into profit or loss in which actually incurred.
25. Assets held-for-sale
The Company has made decision on disposal of some non-current assets, and signed irrecoverable transferring agreements with buyers. The transaction is probably to be completed with one year. If so, the non-current asset shall be counted as an asset ready-for-sale, not depreciated or amortized, and shall be measured by the lower of carrying amount and faire value less net value of disposal expenses. Non-current assets ready-for-sale includes individual asset and disposal Group. If disposal Group is an asset Group, and has allocated goodwill acquired during the combination according to the Accounting Standard for Business Enterprises No. 8 - Impairment, or. the disposal Group is an operation in the asset Group, the disposal Group includes goodwill in the business
combination.
Where an asset or a disposal Group is classified as held-for-trade, but cannot satisfy the condition of non-current asset ready-for-trade, the Company shall derecognize it as held-for-trade, and measure it by the lower of the
followings:
(1) the carrying amount of the asset or disposal Group before it is classified as held-for-trade, the value after the adjustment of depreciation, amortization or impairment recognized under the assumption that it is not classified as held-for-trade;
(2) the recoverable value on the date when decided not to trade any more.
26. Employee Benefits
During the accounting period of an employee’ providing services to the Company, the Company recognizes the compensation payable as liabilities.
The Company participates in the employees social security system set up by government agencies, including
pensions, medical insurance, housing fund and other social security system, and the corresponding expenditures are included in the cost of related assets or the profit or loss.
When an enterprise terminates the employment relationship with employees before the end of the employment contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, a
provision shall be recognized for the compensation arising from termination of employment relationship with employees, with a corresponding charge to the profit or loss for the current period. The enterprise cannot
unilaterally withdraw from the termination plan or the redundancy offer.
The early retirement plan adopts the same principles of termination benefits. Salaries and social insurance (from the date of ceasing services to the date of normal retirement) are paid by the Company, subject to the conditions to be recognized in profit or loss (termination benefits).
27. Changes in major accounting policies and accounting estimates
(1) Changes of accounting policies
There was no significant change of accounting policies for the Company during the reporting period.
(2) Changes of accounting estimates
There was no any change of accounting estimates during the reporting period.
28. Correction of prior period errors
There is no significant change of previous accounting errors for the Company during the reporting period.
29. Significant account judgment and estimates
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 the Company’s management
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 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 adjustments to the carrying amounts of the assets or liabilities affected in the future.
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 assumptions over the value of items in the financial statements:
(1) Revenue Recognition– Construction Contracts
When the result in the construction contract can be estimated reliably, contract revenue is recognized by the
Company at the balance sheet date using the percentage of completion method. The percentage of completion of the contract is confirmed in accordance with this Note 4, 4.22 “Revenue recognition”, and a cumulative basis in each accounting year of the implementation of the construction contract.
In determining the percentage of completion of the contract costs incurred, the estimated total contract revenue and total costs, as well as the recoverability of the contract requires significant judgment. Project management is primarily relying on past experience and work judgment. The estimated total contract revenue and total cost, and the estimated contract changes the results are likely to change the current or future period revenues, operating costs, and gains and losses during the impact, and may have a significant impact.
(2) Classification of lease
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 to the ownership of leased assets.
(3) Allowance for bad debt
According to the relevant accounting policies of the Company in receivables, allowance method is used for baddebt’s calculation. The impairment of receivables is calculated based on the assessment of recoverable of
receivables. Assurance of receivable impairment needs judgments and estimations from the management. The difference between actual results and original estimates shall have impact on the carrying amount of receivables and receivable bad debt provisions or the reverse during the change of estimation.
(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 are made if the cost is higher than their net realizable value and obsolete and slow-movement inventories. Inventories decline in value to net realizable value is the estimated selling price in the ordinary course of business. Net realizable value is determined on the basis of clear evidence obtained, and takes into consideration the purposes of holding inventories and effect of post balance sheet events. The 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 of change.
(5) The fair value of financial instruments
For a financial instrument which has no active market, the Company establishes fair value by using various
valuation methods, including of discounted cash flow analysis model. The Company needs to estimate future cash flow, credit risk, volatility and relationship during the valuation and choose appropriate discount rate. Such
assumptions have uncertainties and their changes shall have impact on the fair value of financial instruments. (6) Held-to-maturity investments
The Company will comply with the conditions of a fixed or determinable payments and fixed maturities that the Company has the positive intention and ability to hold to maturity are non-derivative financial assets are classified as held-to-maturity investments. This classification requires significant judgment. In the process of this judgment, the Company should make the assessment of its maturity willingness and ability to hold such investments. Except in specified circumstances (for example, towards the maturity date of the sale amount is not significant
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. investment), if the Company is unable These investments held-to-maturity, shall be all the class investments
classified as available-for-sale financial assets and in the current fiscal year and the next two fiscal year shall not classify any financial assets as held-to-maturity investments. in this theoretical situation, there have a significant impact on the financial statements listed on the reported value of financial assets, and affect the Company's
financial instruments risk management strategy.
(7) Held-to-maturity investments impairment
The Company to determine the held-to- maturity investments are impaired in dependent on management's
judgment. Occurred objective evidence of impairment including the disappearance of severe financial difficulties that financial asset cannot continue to be traded in an active market, unable to fulfill the terms of the contract (for example, interest or principal payments as a default ) . In processing of judgment, the Company is required to assess the occurred objective evidence of impairment of the investment in expected future cash flows.
(8) Impairment of financial assets available-for-sale
The Company determine the available-for-sale financial asset is impaired relies on judgments and assumptions of management, to determine whether impairment loss is recognized in the income statement. The process of making the judgments and assumptions, the Company is required to assess the extent and duration of the fair value of the investment below cost, as well as investment financial position and short-term business outlook, including
industry conditions, technological change, the credit rating, default rates and counterparty risk.
(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 any indication that its account balance cannot be recovered.
Impairment exists when the recoverable amount of an asset is the higher of its fair value less cost of disposal and present value of the future cash flows expected to be derived from the asset.
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 an arm’s length transaction or an observable market price less the additional cost directly attributable to the disposal of the asset.
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 on reasonable and 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 the estimation of present value of future cash flow is 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) The development expenditure
In determining the amount of capitalization, the Company's management needs to make the relevant asset the estimated future cash flows, applicable discount rate assumptions of the estimated benefit period.
(12) 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
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. requires the management of the Company make a lot of judgments over the estimation of time period, value and tax planning strategies when future taxable profit incurs so that the value of deferred tax assets can be determined. (13) Income tax
There are some transactions where ultimate tax treatments and calculations have uncertainties in the Company’s everyday operation. If it is possible for any item to make expenditure before tax that needs to be approved from competent tax authorities. If there is any difference between finalized determination value and their initial
estimations value, the difference shall have the impact on the income tax and deferred income tax of the current period during the final determination.
(14) Early retirement benefits and supplemental retirement benefits
The Company's internal early retirement benefits and supplemental retirement benefit expenses and liabilities amount determined based on various assumptions. These assumptions include the discount rate, the average
growth rate of health care costs, retired officers and retired officer’s subsidy rate and other factors. Differences between actual results and assumptions will be immediately recognized in the cost of the year. Although
management considers reasonable assumptions have been used, but the actual experience or changes in
assumptions will affect the Company's internal early retirement benefits and supplemental retirement benefit costs and liabilities balance.
(15) 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 and time value of money and other factors.
The Company will sell, repair and renovation of goods sold to provide customers with quality after-sales service commitment is accrued liabilities. Accrued liabilities have considered the recent experience in the maintenance data, but recent maintenance experience may not reflect future maintenance. Any increase or decrease in the
accrued liabilities may affect the profit or loss in future.
V. Taxation
1. Taxes and surcharges applicable to the Company
Taxes and surcharges Tax base Taxrate%
Revenues from sales of products and raw
Value added tax 0, 17 materials
Business tax Business tax taxable revenue 5
Sum of VAT payable, consumption duty payable
Urban maintenance
and business tax payable for the reporting 7 and construction surcharge
period, and exempt and deductible tax
Sum of VAT payable, consumption duty payable
Education surcharge and business tax payable for the reporting 3 period, and exempt and deductible tax
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Sum of VAT payable, consumption duty payable
Local education surcharge and business tax payable for the reporting 2 period, and exempt and deductible tax
Corporate income tax Taxable profits 25
Products, raw materials export sales applied the policy of exemption, reduction and refund of VAT, the rate is0%. 2. Taxes and surcharges applicable to the primary subsidiaries
(1) TsannKuen (Zhangzhou) Enterprise Co., Ltd. (hereafter, TKL)
Taxes and surcharges Tax base Taxrate%
Revenues from sales of products and raw
Value added tax 0, 17 materials
Business tax Business tax taxable revenue 5
Sum of VAT payable, consumption duty payable
Urban maintenance
and business tax payable for the reporting 5 and construction surcharge
period, and exempt and deductible tax
Sum of VAT payable, consumption duty payable
Education surcharge and business tax payable for the reporting 3 period, and exempt and deductible tax
Sum of VAT payable, consumption duty payable
Local education surcharge and business tax payable for the reporting 2 period, and exempt and deductible tax
Corporate income tax Taxable profits 15
Products, raw materials export sales applied the policy of exemption, reduction and refund of VAT, the rate is0%. In accordance with the “The Notice Regarding to Fujian Province 2011 First and Second Group of High
Technology Enterprise Review” (No. Mingkegao[2012]1), TKL was identified as Fujian Province 2011 first group of reviewed High Technology Enterprise (The certification No. GF201135000115), the validity is from the year 2011 to 2013. The company carried out application for high-tech enterprises.
(2) TsannKuen (Zhangzhou) South Port Electronics Enterprise Co., Ltd. (hereafter, TKN)
Taxes and surcharges Tax base Taxrate%
Revenues from sales of products and raw
Value added tax 0, 17 materials
Business tax Business tax taxable revenue 5
Urban maintenance Sum of VAT payable, consumption duty 5
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Taxes and surcharges Tax base Taxrate%
and construction surcharge payable and business tax payable for the
reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Education surcharge 3 reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Local education surcharge 2 reporting period, and exempt and deductible
tax
Corporate income tax Taxable profits 25
Products, raw materials export sales applied the policy of exemption, reduction and refund of VAT, the rate is0%. (3) TsannKuen China (Shanghai) Enterprise Co., Ltd. (hereafter, TKS)
Taxes and surcharges Tax base Taxrate%
Revenues from sales of products and raw
Value added tax 17 materials
Business tax Business tax taxable revenue 5
Sum of VAT payable, consumption duty
Urban maintenance payable and business tax payable for the
1 and construction surcharge reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Education surcharge 3 reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Local education surcharge 2 reporting period, and exempt and deductible
tax
Corporate income tax Taxable profits 25
(4) Shanghai Canxing Trading Co., Ltd. (hereafter, STD)
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Taxes and surcharges Tax base Taxrate%
Revenues from sales of products and raw
Value added tax 17 materials
Business tax Business tax taxable revenue 5
Sum of VAT payable, consumption duty
Urban maintenance payable and business tax payable for the
1 and construction surcharge reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Education surcharge 3 reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Local education surcharge 2 reporting period, and exempt and deductible
tax
Corporate income tax Taxable profits 25
(5) Xiamen Star Comgistic Trading Co., Ltd.
Taxes and surcharges Tax base Taxrate%
Revenues from sales of products and raw
Value added tax 17 materials
Business tax Business tax taxable revenue 5
Sum of VAT payable, consumption duty
Urban maintenance payable and business tax payable for the
7 and construction surcharge reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Education surcharge 3 reporting period, and exempt and deductible
tax
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Taxes and surcharges Tax base Taxrate%
Sum of VAT payable, consumption duty
payable and business tax payable for the
Local education surcharge 2 reporting period, and exempt and deductible
tax
Corporate income tax Taxable profits 25
(6) PT. STAR COMGISTIC INDONESIA
Category of taxes Tax basis Tax (fare)rate%
VAT Revenues from sales of product and raw
material
10(note) Enterprise income tax Taxable income
25 P.S.: The legal tax rate of VAT is10%, however, in according to the approval document with number as
ST-718/WBC.08/KPP.MP.02/2011 issued by Bureau of Customs of Indonesia on 5 Oct. 2011, the approval
document with number as 291KMK.05/1997 issued by Ministry of Finance of Indonesia on 26 Jul. 1997 and the approval document with number as KEP-63/BC /1997 issued by General Administration of Customs of Indonesia, PT. STAR COMGISTIC INDONESIA is confirmed as a bonded factory, thus the actual applicable VAT tax rate for the export products by acquiring raw materials is zero.
VI. Business combination and consolidated financial statement
1. Subsidiaries
(1) Subsidiaries obtained by establishment and investment
Register Business Registered
Subsidiaries name Type Business scope
ed place nature capital
Development, production and sales of
small home electronic appliance, new
style of electronic device,
light-industrial product, and modern
furniture and relative modules,
Manufact communication equipment, all kinds of
Tsann Kuen (Zhangzhou)
Holding Zhangzh ure home 160,000,000
Enterprise Co.,
subsidiary ou electronic lamps and lighting devices such as
Ltd.(TKL)
appliance
USD
mechanical and electrical product.
Processing and manufacturing
non-ferrous metal composite materials
and new alloy material; Sales of the
company products and semi-finished
products; providing after-sales service
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Register Business Registered
Subsidiaries name Type Business scope
ed place nature capital
and technical services; contracting the
company business scope of processing
according to thebuyer’s materials and
samples and assembling parts supplied
by buyers and compensation trade
business. The wholesale of all kinds of
home appliances, electronic products,
water purification equipment, air
purification equipment,
communications equipment, security
products and prepackaged foods
Subsidiaries obtained by establishment and investment (continued)
The proportion
The
Actual amount of of
proportion
Subsidiaries name investments at the Other essential investment holding
of voting
period-end shares
rights（%）
（%）
TKL 120,000,000.00 USD
0.00 75.00 75.00
Subsidiaries obtained by establishment and investment (continued)
Included in
Subsidiaries name consolidated Minority interest Deductible minority interests
statement
TKL Yes 307,129,227.83 0.00 (2) Subsidiaries obtained by business combination under same control
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Registered Business Registered
Subsidiaries name Type Business scope
place nature capital
Production and sales of household appliances, electronics, light industrial products and modern office supplies Manufacture and relevant modules. All kinds of Tsann Kuen China
Sino-foreign of small 40,000,000.00
(Shanghai) Enterprise
joint venture
Shanghai
household USD
computers and peripheral equipment Co., Ltd. (TKS)
appliances
and components, the development of computer software, IC packaging and testing and sales of self-produced products
Subsidiaries obtained by business combination under same control (continued)
Actual amount of
The proportion of The proportion of
Subsidiaries name investments at the Other essential investment
holdingshare（s%） votingrights（%）
period-end
25,000,000.00 USD
0.00 62.50 62.50
TKS
Subsidiaries obtained by business combination under same control (continued)
Included in
Subsidiaries name Minority interest Deductible minority interests
consolidated statement
Yes
35,189,636.17 0.00 TKS
2. Sub-subsidiaries
(1)Sub-subsidiaries obtained by establishment and investment
Regist
Registered
Sub-subsidiaries name Type ered Business nature Business scope
capital
place
Development and production of small home electronic appliance, new style of electronic device, light-industrial product, and modern furniture; design and manufacture related model to the above products. Processing Tsann Kuen (Zhangzhou) Manufacture and manufacturing non-ferrous metal Subsidiary of
South Port Electronics Zhang home electronic 5,000,000.00
Enterprise Co., Ltd.
holding
zhou appliance CNY
composite materials, new type of alloy subsidiary
(TKN)
material. Sale of self-produced products and semi-finished product. The wholesale of electronic, chemical products, metal plates, metal materials, electrical home appliances products Commission agency business
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Regist
Registered
Sub-subsidiaries name Type ered Business nature Business scope
capital
place
Tsann Kuen (Zhangzhou)
Non-enterprise Secondary
Profession and Zhang 3,000,000.00
unit of holding vocational Secondary vocational education
Technology Institute zhou CNY
subsidiary education
(LTC)
Engaged in import and export of goods and technology import and export business, the sale of household electrical appliances, Subsidiary of
Shanghai Canxing Shang Sales of home 4,950,000.00 calculators and accessories, communication holding
Trading Co.,Ltd. (STD) hai electronic CNY equipment, daily provisions, lighting subsidiary
equipment, electrical equipment, office supplies. Roasted coffee, wholesale;
Pre-packaged food
Wholesale, retail, general merchandise, home electronic appliance, computer and its fitting equipment, communication
Subsidiary of equipments, mechanical and electronic Xiamen Star Comgistic Xiame Sales of home 28,000,000.00
holding equipments, office equipments, kitchen Trading Co.,Ltd. (SCCX) n electronic CNY
subsidiary appliance and related complete product; Import or export products or technology, but those products prohibit by the Country are exempt.
Sub-subsidiaries obtained by establishment and investment (continued)
Actual amount of The proportion The proportion
Sub-subsidiaries
investments at the Other essential investment of holding shares of voting rights
name
period-end (%) (%)
TKN 3,750,000.00 CNY
0.00 56.25 75.00
LTC 3,000,000.00 CNY
0.00 75.00 100.00
STD 4,950,000.00 CNY
0.00 56.25 100.00
SCCX 28,000,000.00 CNY
0.00 75.00 100.00
Sub-subsidiaries obtained by establishment and investment (continued)
Included in
Sub-subsidiaries name Minority interest Deductible minority interests
consolidated statement
TKN Yes
1,452,178.02 0.00 LTC Yes
0.00 0.00 STD Yes
0.00 0.00 SCCX Yes
0.00 0.00 (2) Sub-subsidiaries obtained by business combination under same control
□ Applicable√ Inapplicable
(3) Sub-subsidiaries obtained by business combination under same control
Sub-subsidiaries Registered Business Registered
Type Business scope
name place nature capital
Subsidiary
East Sino Development Investment 135,993,000
Limited
of holding Hong Kong
company HKD
Investment
subsidiary
PT. STAR Subsidiary Manufacture
17,500,000 Produce and sale of display/LCD
COMGISTIC of holding Indonesia of home
USD
INDONESIA (SCI) subsidiary electronic
TV/chandelier/table lamps/LED
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Sub-subsidiaries Registered Business Registered
Type Business scope
name place nature capital
lights/fluorescent
lamp/dehumidifier/mixer/juice/machine/mosquito killer/coffee pot / hair
dryer/fan/humidifier/electric oven, microwave oven, toaster/rice cooker/iron/deep fryer
Sub-subsidiaries obtained by business combination under same control (continued)
The proportion of The proportion Sub-subsidiaries Actual amount of investments
Other essential investment holding shares of voting rights name at the period-end
(%) (%)
East Sino 16,300,00 USD
0.00 75.00 100.00 SCI 17,425,000 USD
0.00 74.68 99.57 Sub-subsidiaries obtained by business combination under same control (continued)
Included in consolidated
Sub-subsidiaries name Minority interest Deductible minority interests
statement
East Sino Yes
0.00 0.00 SCI Yes
264,799.62 0.00 3. Special purpose entities or operating entities with control right formed by entrusted operation or lease: Naught
4. Explanation on changes in consolidated scope
There was no change in consolidated scope in the reporting period.
5. Exchange rates of major items in financial statements for foreign entities
Item Assets and liabilities
30 Jun. 2014 31 Dec. 2013
PT. STAR
COMGISTIC $1= RMB 6.1528$1= RMB 6.0969
INDONESIA
East Sino HK$1= RMB 0.79375 HK$1= RMB 0.78623
Item Cash flow of income and expenses
30 Jun. 2014 31 Dec. 2013
PT. STAR
COMGISTIC $1= RMB 6.14313$1= RMB 6.1896
INDONESIA
East Sino HK$1= RMB=0.79198 HK$1= RMB=0.79791
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
2014.06.30 2013.12.31
Item
Original currency Exchange rate Standard money Original currency Exchange rate Standard money Cash stock
RMB 274,070.66 300,733.40 HKD 8,352.60 0.7938 6,629.88 18,027.60 0.7862 14,173.84 USD 7,365.80 6.1528 45,320.31 19,819.38 6.0969 120,836.78 JPY 1,454,791.80 0.0608 88,473.16 779,359.80 0.05777 45,024.40 IDR 33,172,614.24 0.0005 17,876.84 72,349,200.00 0.0005 36,174.04 CHF 7.00 6.9674 48.77 7.00 6.8029 47.62 EUR 25,358.32 8.3946 212,872.95 32,389.57 8.4189 272,684.55 HUF 1,313.50 10.4978 13,788.86 12,019.00 10.0556 120,858.26 Subtotal 81,016.00 0.0273 2,211.74 81,016.00 0.0281 2,276.55 RMB 661,293.17 912,809.44 Deposit in bank
RMB 259,200,480.41 524,280,964.87 HKD 2,413,125.94 0.7938 1,915,418.71 543,427.39 0.7862 427,258.92 USD 128,169,763.57 6.1528 788,602,947.55 48,461,432.03 6.0969 295,464,504.93 JPY 105,156,610.00 0.0608 6,395,099.23 119,508,051.00 0.05777 6,904,099.62 EUR 108,499.73 8.3946 910,811.84 580,582.62 8.4189 4,887,867.01 IDR 3,084,974,069.76 0.0005 1,685,132.17 2,422,949,991.95 0.0005 1,211,454.89 CHF 183,055.44 6.9674 1,275,420.47
Subtotal 1,059,985,310.38 833,176,150.24 Total 1,060,646,603.55 834,088,959.68 Note: in the reporting period, withdrawing deposit interest income thus RMB 896,886,338.47 of restricted monetary funds was
deducted from cash flow statement.
2. Trading financial assets
(1) Trading financial assets
Item 2014.06.30 2013.12.31 Derivative financial assets 0.00 21,120,100.00 Total 0.00 21,120,100.00 3. Notes receivable
(1) Category of notes receivable
Item 2014.06.30 2013.12.31 Bank acceptance bill 2,792,866.00 2,467,447.00 Total 2,792,866.00 2,467,447.00 (2) There was not receivable pledged at period-end
(3) There was not transferred to accounts receivable because drawer of the notes fails to execute the contract
or agreement, and undue notes endorsed to other parties at the end of the period.
4. Accounts receivable
(1) Accounts receivable listed by categories
2014.06.30
Item Proportion Bad debt Proportion Amount
(%) provision (%) Accounts receivable with significant single amount and
0.00 0.00 0.00 0.00 individually withdrawn bad debt provision
Accounts receivable for which bad debt provisions are
made on the group basis
Aging group 186,039,121.30 94.89 2,263,145.43 1.22
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Related party group 10,020,768.95 5.11 0.00 0.00 Subtotal of group 196,059,890.25 100.00 2,263,145.43 1.15 Accounts receivable with insignificant single amount and
0.00 0.00 0.00 0.00 individually withdrawn bad debt provision
Total 196,059,890.25 100.00 2,263,145.43 1.15 Continued
2013.12.31
Item Proportion Bad debt Proportion Amount
(%) provision (%) Accounts receivable with significant single amount and
0.00 0.00 0.00 0.00 individually withdrawn bad debt provision
Accounts receivable for which bad debt provisions are
made on the group basis
Aging group 247,231,980.91 94.59 7,559,178.67 3.06 Related party group 14,150,673.62 5.41 0.00 0.00 Subtotal of group 261,382,654.53 100.00 7,559,178.67 2.89 Accounts receivable with insignificant single amount and
0.00 0.00 0.00 0.00 individually withdrawn bad debt provision
Total 261,382,654.53 100.00 7,559,178.67 2.89 (2) Accounts receivable aging list
2014.06.30 2013.12.31
Item
Amount Proportion(%) Amount Proportion(%)
Within 1 year 194,788,572.30 99.35 256,513,081.90 98.14 1 to 2 year 215,570.56 0.11 272,154.68 0.10 2 to 3 year 30,427.20 0.02 3,604,829.01 1.38 Over 3 year 1,025,320.19 0.52 992,588.94 0.38 Total 196,059,890.25 100.00 261,382,654.53 100.00（3）In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision : 2014.06.30 2013.12.31
Aging Proportion Bad debt Proportion Bad debt Amount Amount
(%) provision (%) provision Within one year 184,767,803.35 99.31 991,827.48 242,362,408.28 98.03 2,689,606.05 Including 1-90
176,412,006.79 94.82 0.00 216,860,202.08 87.72 0.00 days
91-180 days 7,656,986.71 4.12 765,698.68 24,801,834.53 10.03 2,479,494.54 181-270 days 616,380.62 0.33 184,914.18 700,371.67 0.28 210,111.51 271-365 days 82,429.23 0.04 41,214.62 0.00 0.00 0.00 1-2 years 215,570.56 0.12 215,570.56 272,154.68 0.11 272,154.67 2-3 years 30,427.20 0.02 30,427.20 3,604,829.01 1.46 3,604,829.01 Over 3 years 1,025,320.19 0.55 1,025,320.19 992,588.94 0.40 992,588.94 Total 186,039,121.30 100.00 2,263,145.43 247,231,980.91 100.00 7,559,178.67（4）In the groups, accounts receivable adopting related party portfolio method to withdraw bad debt
provision:
Name of the borrowers Book balance Bad-debt provision Withdrawing proportion Reason
Withdraw in line with bad-debt Tsann Kuen Japan Co., Ltd. 1,096,262.38 0.00 0.00
provision policy Withdraw in line with bad-debt Canxing Comgistic Co.,Ltd. 8,924,506.57 0.00 0.00
provision policy Total 10,020,768.95 0.00 0.00
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. (5) Accounts receivable reversed or collected in the reporting period:
Amount of
accumulative bad Amount Name of entity Reason Judgment debt provision reversed or before reversed or collected collected
Spring AG
The customer clearing Can not recovered due
Matallwarenfabrik 1,285,415.02 1,285,415.02
remaining assets allocation to the Customer bankruptcy
Eschlikon
(6) The actual write-off accounts receivable:
Whether occurred because of Name of entity Nature Time Amount Reason
related party transactions Interactive Group payment for goods 9 May 2014 3,364,606.64 irrecoverable No Total 3,364,606.64
（7）Particulars about accounts receivable due to shareholders holding5% (including5%) voting rights of the Company
2014.06.30 2013.12.31
Name of entity Amount of Amount of provision
Amount Amount provision for bad for bad debts
debts
Canxing Comgistic Co.,Ltd. 8,924,506.57 0.00 9,066,228.33 0.00 Total 8,924,506.57 0.00 9,066,228.33 0.00 (8) Accounts receivable amount in the top five units
The percentage amount Name of entity Relationship with the Company Amount Aging
of receivable accounts% First Non-related relationship 21,200,490.68 Within 1 year 10.81 Second Non-related relationship 19,769,825.29 Within 1 year 10.08 Third Non-related relationship 19,708,435.97 Within 1 year 10.05 Fourth Non-related relationship 14,451,692.89 Within 1 year 7.37 Fifth Non-related relationship 10,644,728.61 Within 1 year 5.43 Total 85,775,173.44 43.74 (9) Accounts receivable affiliated parties
The percentage amount Name of entity Relationships with the Company Amount of receivable accounts% TSANN KUEN JAPAN CO., LTD The ultimate holding company 1,096,262.38 0.56 STAR COMGISTIC CAPITAL CO., LTD. Ultimate holding company 8,924,506.57 4.55 Total 10,020,768.95 5.11 VI. Prepayment
(1) Prepayments according to aging listed below
2014.06.30 2013.12.31
Aging
Amount Proportion Amount Proportion Within 1 year 5,811,179.20 100.00 4,290,802.70 100.00 Total 5,811,179.20 100.00 4,290,802.70 100.00
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. (2) The top five final prepayments amounts listed below
Name of entity Relationship with the Company Amount Aging unbalanced reason First Non-related relationship 2,173,881.15 2014 Goods afloat
Second Non-related relationship 1,000,000.00 2014 Goods afloat
Third Non-related relationship 697,497.23 2014 Goods afloat
Fourth Non-related relationship 636,798.82 2014 Goods afloat
Fifth Non-related relationship 174,026.68 2014 Goods afloat
Total 4,682,203.88
(3) Information about amount due from shareholders with more than5% (including5%) of the voting
shares of the Company in prepayment
6．Interest receivable
Item 2013.12.31 Increase Decrease 2014.06.30 Deposit interest 110,833.33 8,020,524.99 110,833.33 8,020,524.99 Total 110,833.33 8,020,524.99 110,833.33 8,020,524.99 7. Other accounts receivable
(1) Other receivables listed by type
2014.06.30
Category
Amount Proportion Provision for bad debts Proportion Other accounts receivable that is individually
0.00 0.00 0.00 0.00 significant and provisions for bad debts individually
Other accounts receivable that provisions for bad
debts by group
Aging group 25,152,569.94 97.00 500,151.20 1.99 Related party group 0.00 0.00 0.00 0.00 Subtotal of group 25,152,569.94 97.00 500,151.20 1.99 Other accounts receivable with insignificant single
amount and individually withdrawn bad debt 778,450.00 3.00 0.00 0.00 provision
Total 25,931,019.94 100.00 500,151.20 1.93 Continued
2013.12.31
Category
Amount Proportion Provision for bad debts Proportion Other accounts receivable that is individually
significant and provisions for bad debts 0.00 0.00 0.00 0.00 individually
Other accounts receivable that provisions for bad
debts by group
Aging group 32,151,975.05 97.72 561,872.83 1.75 Related party group 0.00 0.00 Subtotal of group 32,151,975.05 97.72 561,872.83 1.75 Other accounts receivable with insignificant
single
749,550.00 2.28 0.00 0.00 amount and individually withdrawn bad debt
provision
Total 32,901,525.05 100.00 561,872.83 1.71 (2) Other accounts receivable aging lists
2014.06.30 2013.12.31
Category
Amount Proportion Amount Proportion Within 1 year 24,924,213.52 96.12 31,763,515.35 96.54
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 1-2 years 14,045.61 0.05 48,810.76 0.15 2-3 years 983,260.81 3.79 1,038,587.58 3.16 Over 3 years 9,500.00 0.04 50,611.36 0.15 Total 25,931,019.94 100.00 32,901,525.05 100.00（3）In the group, other accounts receivable that provision for bad debts by aging analysis
2014.06.30 2013.12.31
Category
Provision for Provision for Amount Proportion Amount Proportion
doubtful debts doubtful debts Within 1 year 24,794,213.52 98.58 141,794.78 31,662,415.35 98.48 72,314.26 Including:1-90
23,624,083.03 93.92 0.00 31,292,573.43 97.33 0.00 days
91-180 days 1,050,003.47 4.17 105,000.35 203,262.55 0.63 20,327.33 181-270 days 116,345.41 0.46 34,903.62 156,513.76 0.49 46,954.13 271-365 days 3,781.61 0.02 1,890.81 10,065.61 0.03 5,032.81 1-2 years 14,045.61 0.06 14,045.61 48,810.76 0.15 48,809.68 2-3 years 334,810.81 1.33 334,810.81 390,137.58 1.21 390,137.53 Over 3 years 9,500.00 0.04 9,500.00 50,611.36 0.16 50,611.36 Total 25,152,569.94 100.00 500,151.20 32,151,975.05 100.00 561,872.83 (4) There was no other accounts receivable that provision for bad debts by related party group in the
reporting period
(5) There was no accounts receivable reversed or recovered in the reporting period
(6) Other receivables provision for bad debt provision that is not individually significant but has paid
separately for testing in the reporting period
Other receivables Book balance bad-debt provision Provision ratio(%) Reason for provision China Export and Credit Insurance
648,450.00 0.00 0.00 Cash deposit Corporation Fujian Branch
Zhejiang Tomall Techenology Co., ltd 130,000.00 0.00 0.00 Cash deposit Total 778,450.00 0.00 0.00
(7) No write-off of other receivables in the reporting period
(8) Information about amount due from shareholders with more than5% (including5%) of the voting
shares of the Company in other receivables
(9) Information of top five other accounts receivable in the reporting period
Relationship
Name of entity Amount Aging Proportion of the total% with the Company
First Non-related relationship 12,400,000.00 Within 1 year 47.82
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Second Non-related relationship 1,895,129.15 Within 1 year 7.31 Third Non-related relationship 845,394.72 Within 1 year 3.26 Fourth Non-related relationship 844,556.58 Within 1 year 3.26 Fifth Non-related relationship 648,450.00 1-3 years 2.50 Total 16,633,530.45 64.15 8. Inventory
(1) Category
2014.06.30 2013.12.31
Item Impairment of Impairment of
Book balance Book value Book balance Book value inventories inventories
Raw materials 102,649,926.72 21,687,041.11 80,962,885.61 95,467,381.56 29,402,004.84 66,065,376.72 Unfinished products 11,989,079.09 0.00 11,989,079.09 15,586,857.54 0.00 15,586,857.54 Self-made semi-
19,372,503.90 5,410,120.22 13,962,383.68 24,375,372.80 5,410,120.22 18,965,252.58 manufactured goods
Finished product 100,604,018.95 9,369,424.79 91,234,594.16 111,089,450.63 9,373,855.07 101,715,595.56 Low-value consumption
5,582,105.05 0.00 5,582,105.05 2,295,848.52 0.00 2,295,848.52 goods
Materials in transit 7,285,219.19 0.00 7,285,219.19 5,195,167.98 0.00 5,195,167.98 Total 247,482,852.90 36,466,586.12 211,016,266.78 254,010,079.03 44,185,980.13 209,824,098.90 (2) Impairment of inventories
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Item||2013.12.31||Withdrawing inthe reportingperiod|||Decrease in the|||2014.06.30||
||||||||reporting period|||||
|||||||Reversal in thereporting period||Written off in thereporting period||||
||Raw materials||29,402,004.84||509,853.27||0.00||8,224,817.00||21,687,041.11|
||Self-made semi-|5,410,120.22||0.00||0.00||0.00||5,410,120.22||
||manufactured goods|||||||||||
||Finished product||9,373,855.07||373,940.21||0.00||378,370.49||9,369,424.79|
|Total||44,185,980.13||883,793.48||0.00||8,603,187.49||36,466,586.12||

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 9. Other current assets
Item Nature 2014.06.30 2013.12.31 Short-term financial
Financial products 330,000,000.00 50,000,000.00 products of bank
Total 330,000,000.00 50,000,000.00 10. Long-term equity investment
(1) Category of long-term equity investment
Item 2013.12.31 Increase Decrease 2014.06.30 Other equity investments 40,000.00 0.00 0.00 40,000.00 Less: impairment provision of
0.00 0.00 0.00 0.00 long term equity investment
Total 40,000.00 0.00 0.00 40,000.00 (2) List of long-term equity investment
Accounting
Investee Investment Cost 2013.12.31 Increase/Decrease 2014.06.30 method
Xiamen Institute of Foreign
Cost method 40,000.00 40,000.00 0.00 40,000.00 Investment Enterprise
Total 40,000.00 40,000.00 0.00 40,000.00 Continued
Explanation for Impairment
indifferences
provision
Share holding Voting between the share Impairm
withdrawn Cash Investee percentage in percentage in holding percentage ent prov
in the bonus investee% investee% and voting ision
reporting
percentage in
investee
period
Xiamen Institute of Foreign
1.48 1.48 0.00 0.00 0.00 Investment Enterprise
Total 0.00 0.00 0.00 11. Investment property
(1) Investment property calculated by cost
Item 2013.12.31 Increase Decrease 2014.06.30 I. Total original book value 158,724,486.45 0.00 336,900.00 158,387,586.45 1. Houses and buildings 129,463,908.94 0.00 336,900.00 129,127,008.94 2. Land use right 29,260,577.51 0.00 0.00 29,260,577.51 Withdrawal in
Reporting period
II. Accumulated depreciation and amortization 99,991,975.09 4,086,800.56 168,029.54 103,910,746.11 1. Houses and buildings 88,808,698.11 3,775,744.66 168,029.54 92,416,413.23 2. Land use right 11,183,276.98 311,055.90 0.00 11,494,332.88 III. Book value of investment property 58,732,511.36 54,476,840.34 1. Houses and buildings 40,655,210.83 36,710,595.71 2. Land use right 18,077,300.53 17,766,244.63 IV. Accumulated impairment provision of investment property 0.00 0.00 0.00 0.00
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 1. Houses and buildings 0.00 0.00 0.00 0.00 2. Land use right 0.00 0.00 0.00 0.00 V. Book value of investment property 58,732,511.36 54,476,840.34 1. Houses and buildings 40,655,210.83 36,710,595.71 2. Land use right 18,077,300.53 17,766,244.63 Note:①The Depreciation and amortization amount was RMB 4,086.800.56 (Recorded into the current profits and losses)
②the decrease of investment property was transferred into self-use.
(2) Particulars about the investment real estate property certificate not completed
Item Reason Estimate completed time Book value
Three Village Green Garden
The procedure is not completed Not sure 2,430,894.41
Villa
Total 2,430,894.41 12. Fixed assets
(1) Fixed assets details
Increase in the Decrease in the
Item 2013.12.31 2014.06.30 reporting period reporting period
I. Total original book value 1,687,008,020.96 20,542,198.54 58,349,664.83 1,649,200,554.67 Including: Houses and buildings 79,818,099.14 6,992,658.13 114,149.88 86,696,607.39 Machineries 218,158,090.97 1,404,896.90 26,396,715.58 193,166,272.29 Vehicles 1,302,463,791.38 10,423,304.36 31,172,354.04 1,281,714,741.70 Electronics, module and others 21,322,088.94 420,780.67 494,445.33 21,248,424.28 Improvement expense of fixed assets 65,245,950.53 1,300,558.48 172,000.00 66,374,509.01 Increase in the
Charge for the period
reporting period
II. Accumulated depreciation 1,457,146,998.87 168,029.54 21,674,681.51 45,664,273.08 1,433,325,436.84 Including: Houses and buildings 33,431,646.39 168,029.54 1,284,396.74 97,169.62 34,786,903.05 Machineries 153,212,641.17 3,055,348.78 16,128,702.29 140,139,287.66 Vehicles 1,205,389,561.30 13,976,775.14 28,846,011.66 1,190,520,324.78 Electronics, module and others 20,299,827.10 123,544.71 483,080.94 19,940,290.87 Improvement expense of fixed assets 44,813,322.91 3,234,616.14 109,308.57 47,938,630.48 III. The net book value of fixed assets 229,861,022.09 215,875,117.83
Including: Houses and buildings 46,386,452.75 51,909,704.34
Machineries 64,945,449.80 53,026,984.63
Vehicles 97,074,230.08 91,194,416.92
Electronics, module and others 1,022,261.84 1,308,133.41
Improvement expense of fixed assets 20,432,627.62 18,435,878.53
IV. Total impairment provision 56,708,057.59 0.00 2,920,419.99 9,583,599.88 50,044,877.70 Including: Houses and buildings
Machineries 30,700,385.29 2,895,714.97 8,229,415.73 25,366,684.53 Vehicles 25,008,561.96 0.00 1,345,177.67 23,663,384.29 Electronics, module and others 9,363.36 0.00 9,006.48 356.88
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Improvement expense of fixed assets 989,746.98 24,705.02 0.00 1,014,452.00 V. Total book value of fixed assets 173,152,964.50 -168,029.54 -4,052,902.96 3,101,791.87 165,830,240.13 Including: Houses and buildings 46,386,452.75 -168,029.54 5,708,261.39 16,980.26 51,909,704.34 Machineries 34,245,064.51 -4,546,166.85 2,038,597.56 27,660,300.10 Vehicles 72,065,668.12 -3,553,470.78 981,164.71 67,531,032.63 Electronics, module and others 1,012,898.48 297,235.96 2,357.91 1,307,776.53 Improvement expense of fixed assets 19,442,880.64 -1,958,762.68 62,691.43 17,421,426.53 Note: Amount of depreciation was RMB 21,674,681.5; original price of construction project to fixed asset was RMB6, 015,356.99. (2) Particulars about fixed assets ownership restricted
There was no fixed assets ownership restricted
(3) Fixed assets hired through the financing lease
There was no fixed assets hired through the financing lease
(4) Fixed assets hired through operating lease
Accrued Impairment
Item Original book value Book value depreciation provision
Electronics, module and others 3,357,115.05 2,308,335.19 0.00 1,048,779.86 Total 3,357,115.05 2,308,335.19 0.00 1,048,779.86 (5) Hold-for-sale fixed assets in the reporting period.
There was no hold-for-sale fixed asset
（6）Particulars about property right certificate of fixed assets not completed
Item Reason Estimate completed time Book value
Three Village Green Garden
The procedure is not completed Not sure 1,286,944.10
Villa
Elite garden The procedure is not completed 2015 533,523.06 Total 1,820,467.16 13. Projects under construction
(1) Information of construction in progress
2014.06.30 2013.12.31
Item Impairment Impairment
Book balance Book value Book balance Book value provision provision
Industrial plant 4,622,309.63 0.00 4,622,309.63 9,693,098.24 113,498.10 9,579,600.14 Other 0.00 0.00 0.00 1,310,071.84 0.00 1,310,071.84 Total 4,622,309.63 0.00 4,622,309.63 11,003,170.08 113,498.10 10,889,671.98 Increase in Transferred Engineering Item Budget Number 2013.12.31 Other decrease 2014.06.30 Capital source reporting period to investment
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. fixed assets proportion
of the budget(%) Industrial plant 12,660,600.00 9,693,098.24 1,522,314.28 6,015,356.99 577,745.90 4,622,309.63 Owned fund 88.59% Other 1,310,071.84 1,310,071.84 0.00 0.00 1,310,071.84 0.00 Owned fund 100.00% Total 13,970,671.84 11,003,170.08 1,522,314.28 6,015,356.99 1,887,817.74 4,622,309.6389.66%
(2) Changes in significant construction in progress
(3) Provision for impairment of construction in progress
Item 2013.12.31 Increase Decrease 2014.06.30 Reason
Industrial Have been
113,498.10 -113,498.10 0.00 0.00
plant scrapped
Total 113,498.10 -113,498.10 0.00 0.00
14. Intangible assets
Item 2013.12.31 Increase in reporting period Decrease in reporting period 2014.06.30 I. Total original book value 25,955,044.35 110,626.63 0.00 26,065,670.98 Land use rights 12,358,778.66 110,626.63 0.00 12,469,405.29 Software 13,596,265.69 0.00 0.00 13,596,265.69 II. Accumulative amortization 14,151,791.48 535,676.51 0.00 14,687,467.99 Land use rights 1,220,701.89 212,654.39 0.00 1,433,356.28 Software 12,931,089.59 323,022.12 0.00 13,254,111.71 III.Total impairment provision 0.00 0.00 0.00 0.00 Land use rights 0.00 0.00 0.00 0.00 Software 0.00 0.00 0.00 0.00 IV. Total book value of intangible assets 11,803,252.87 11,378,202.99
Land use rights 11,138,076.77 11,036,049.01 Software 665,176.10 342,153.98 Note: Amortization amount in the reporting period was RMB 535,676.51
Item 2013.12.31 Increase Amortization Other decrease 2014.06.30 Reason of other decrease Telecommunications Engineering 1,077,866.57 0.00 168,000.06 0.00 909,866.51 No Housing renovation costs 3,229,554.02 1,561,595.00 823,931.13 0.00 3,967,217.89 No Landscape greening projects 48,446.04 0.00 16,149.00 0.00 32,297.04 No Total 4,355,866.63 1,561,595.00 1,008,080.19 0.00 4,909,381.44
15. Long-term unamortized expenses
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 16. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets and deferred income tax liabilities was confirmed
(1) Deferred income tax assets was confirmed
2014.06.30 2013.12.31
Deductible temporary Deductible temporary Item Deferred income Deferred income
differences deductible differences deductible tax assets tax assets
losses losses
Provision for assets impairment 11,355,850.97 75,705,673.12 14,197,675.96 94,504,286.63 accrued expenses 848,194.08 5,654,627.20 1,184,156.65 7,894,377.69 trading financial liabilities 847,210.65 5,648,071.00 0.00 0.00 Accrued wages 3,153,450.13 21,023,000.88 4,151,688.21 27,677,921.40
|||
|-|-|
|undistributed deficit 2,831,864.|96|

 Total 19,036,570.79 119,358,832.05 23,761,647.80 146,989,093.82 (2) Deferred income tax liabilities was confirmed
2014.06.30 2013.12.31
Deductible temporary Deductible temporary Item Deferred income Deferred income
differences deductible differences deductible tax assets tax assets
losses losses
Tradable financial
3,168,015.00 21,120,100.00 assets
Depreciation of
217,345.05 869,380.20 90,727.65 362,910.60 fixed assets
Total 217,345.05 869,380.20 3,258,742.65 21,483,010.60 (2) List of unrecognized deferred income tax assets
Item 2014.06.30 2013.12.31 Impairment of fixed assets 8,938,601.12 9,054,369.59 Impairment of construction in
113,498.10 process
Dad-debt provision 929,591.24 2,560,961.02 Accrued expenses 16,353,219.54 23,608,464.27 Provision for inventories 3,700,894.97 2,895,471.98 Accrued payroll 2,249,276.58 2,340,109.32 undistributed deficit 75,196,858.61 61,589,129.07 Total 107,368,442.06 102,162,003.35 (3) Unrecognized deferred income tax assets will be deductible losses expire the following year
Year 2014.06.30 2013.12.31 2014 5,782,257.42 5,782,257.42 2015 3,301,119.36 3,636,039.42 2016 10,716,556.41 12,638,980.26 2017 14,220,503.87 17,618,598.88 2018 34,426,305.63 21,913,253.09
2019 6,750,115.92 0.00
Total 75,196,858.61 61,589,129.07
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 17. List of provision for assets impairment
Decrease in
Increase in
Item 2013.12.31 reporting period 2014.06.30 reporting period
Reversal Written-off
Provision for bad debts 8,121,051.50 -3,278,563.25 -1,285,415.02 3,364,606.64 2,763,296.63 Provision for inventories 44,185,980.13 883,793.48 0.00 8,603,187.49 36,466,586.12 Impairment of fixed assets 56,708,057.59 2,920,419.99 0.00 9,583,599.88 50,044,877.70 Impairment of construction in process 113,498.10 -113,498.10 0.00 0.00 0.00 Total 109,128,587.32 412,152.12 -1,285,415.02 21,551,394.01 89,274,760.45 18. Other non-current assets
Item 2014.06.30 2013.12.31 Other non-current assets 2,068,410.91 0.00 Total 2,068,410.91 0.00 19. Short-term borrowing
Item 2014.06.30 2013.12.31 Borrow money on credit 481,764,240.00 30,484,500.00 Total 481,764,240.00 30,484,500.00 20. Trading financial liabilities
Item 2014.06.30 2013.12.31 Derivative financial liabilities 5,648,071.00 0.00 Total 5,648,071.00 0.00 21. Notes payable
Item 2014.06.30 2013.12.31 Bank acceptance 2,205,771.75 0.00 Trade acceptance 5,540,087.16 30,577,887.89 Total 7,745,858.91 30,577,887.89 Note: Bank and commercial acceptance bill expires in Dec. 2014
22. Accounts payable
(1) Information
Aging 2014.06.30 2013.12.31 Within 1 year 497,581,934.06 639,812,846.15 Over 1 years 2,673,325.00 8,816,310.01 Total 500,255,259.06 648,629,156.16 (2) The accounts payable to shareholders with more than5% (including5%) of the voting shares of the Company
Name of entity Proceeds content 2014.06.30 2013.12.31 STAR COMGISTIC CAPITAL CO., LTD. For materials 737,323.25 753,382.59
Total 737,323.25 753,382.59
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. (3) Notes of the accounts payable aging over one year:
Reason for Paid back after Balance Name of entity Amount
unsettlement Sheet Day amount Xinda ELECTRIC MOTOR
CO., LTD 3,050,108.51 Quality dispute No
Ningbo Jethro electric
Guarantee Money
appliance co., LTD
979,964.67 No Ningbo Chaochao Electrical
Guarantee Money
Appliance Co., Ltd. 500,237.01 No Total 4,530,310.19
23. Advance from customers
(1) Information
Aging 2014.06.30 2013.12.31 Within 1 year 15,912,414.16 7,788,806.71 Over 1 year 2,724,686.63 2,642,847.88 Total 18,637,100.79 10,431,654.59 (2) There was no advance from customers of shareholders with more than5% (including5%) of the
voting shares of the Company
(3) Notes of advance from customers aging over one year:
Name of creditors Amount in advance Reason not carry forward SEB Asia Ltd. 564,715.71 Settlement was uncompleted zojirushi corporation 251,132.83 Settlement was uncompleted HWI International Led 192,038.59 Settlement was uncompleted Arzum Asia Pacific Limited 190,143.00 Settlement was uncompleted BIALETTI INDUSTRIE SPA 165,626.09 Settlement was uncompleted Total 1,363,656.22
24. Payroll payable
Increase in
Item 2013.12.31 Paid during the period 2014.06.30 reporting period
Salary, bonus, allowance, subsidy 30,018,030.72 101,828,039.58 107,662,931.48 24,183,138.82 Employee welfare 0.00 3,837,923.11 967,222.05 2,870,701.06 ISocial insurance 1,936,390.75 8,070,103.96 9,831,333.58 175,161.13 Including Medical insurance 21,081.58 2,273,657.84 2,277,903.59 16,835.83 Basic endowment insurance 1,714,773.77 3,650,479.25 5,226,504.02 138,749.00 Annuity payment 0.00 0.00 0.00 0.00 Unemployment insurance expense 194,573.70 419,759.52 602,418.87 11,914.35 Employment injury insurance 2,976.53 1,102,511.69 1,101,601.22 3,887.00 Maternity insurance 2,985.16 623,695.67 622,905.88 3,774.95 Housing fund 8,767,473.49 2,820,123.01 2,206,854.26 9,380,742.24 Labour union fee and employee education fee 0.00 0.00 0.00 0.00
Non-monetary welfare 0.00 0.00 0.00 0.00
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Redundancy compensation 0.00 2,200,346.61 2,200,346.61 0.00 Other 26,434.00 18,726.00 28,265.00 16,895.00 Total 40,748,328.96 118,775,262.27 122,896,952.98 36,626,638.25 No any amount in arrears in the payroll payable.
25. Taxes payable
Taxes kind 2014.06.30 2013.12.31 Business tax 687,949.01 1,020,157.31 Corporate income tax 726,975.56 4,003,589.82 VAT -5,696,272.29 -24,357,591.75 Personal income tax 7,643.47 524,425.59 Education surtax 554,162.17 637,756.19 Urban maintenance and construction tax 528,697.98 319,172.35 building taxes 2,381,276.28 725,180.52 Others -809,567.82 -17,127,309.97 26. Interest payable
Item 2014.06.30 2013.12.31 Interest payable on short-term borrowings 3,270,214.70 108,661.00 Total 3,270,214.70 108,661.00 27. Other accounts payable
(1) Other accounts payable
Aging 2014.06.30 2013.12.31 Within 1 year 177,395,371.36 57,226,287.65 Over 1 year 14,130,330.72 12,150,482.66 Total 191,525,702.08 69,376,770.31 (2) Other accounts payable from shareholders with more than5% (including5%) of the voting shares of the Company
Name of entity Content 2014.06.30 2013.12.31 STAR COMGISTIC CAPITAL CO., LTD Agency fees 35,788.56 36,068.65 Sion Global Development Ltd. Money lending 123,056,000.00 0.00 Fillman Investments Limited Money lending 21,666,164.62 12,300,998.74 Total 144,757,953.18 12,337,067.39 (3) Notes of the other large amount accounts payable aging over 1 year
whether to return Name of entity Amount Reason of outstanding in the future after the report date Shanghai Taopu Management Service Co., Ltd. 1,000,000.00 Cash pledge No Fujian Zhangzhou Xinge non-ferrous Metal Co., Ltd. 800,000.00 Cash pledge No Xiamen Tsann Kuen Trading Co., Ltd. 365,539.26 Cash pledge No Shanghai Tanghai Investment Co., Ltd. 360,000.00 Cash pledge No Zhangzhou Jia Fengruichang Electronics Co., Ltd. 330,000.00 Cash pledge No
Total 2,855,539.26
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 28. Other non current liabilities
Item 2014.6.30 2013.12.31 Vocational education subsidies 222,600.00 222,600.00 Total 222,600.00 222,600.00 29. Capital stock
2013.12.31 Changes in this year(+-) 2014.06.30
Capital
New transfer
Item Share
Amount % share into Other Subtotal Amount % donation
share
I. Limited sale share
1. National holdings 0 0 0 0 0 0 0 0 0 2. Domestic legal person shares 0 0 0 0 0 0 0 0 0 3.Other domestic 0 0 0 0 0 0 0 0 0 shareholding
Domestic individual shares 0 0 0 0 0 0 0 0 0 4. Foreign shares 0 0 0 0 0 0 0 0 0 Including: Foreign legal person 0 0 0 0 0 0 0 0 0 shares
Foreign individual shares 0 0 0 0 0 0 0 0 0 Total of limited stock sale 0 0 0 0 0 0 0 0 0 condition
II. Unlimited shares sale 0 0 0 0 0 0 0 0 0 conditions
1.RMB Common share 0 0 0 0 0 0 0 0 0 2.Domestically listed foreign 0 0 0 0 0
185,391,680.00 100.00 185,391,680.00 100.00 shares
3.Overseas listed foreign shares 0 0 0 0 0 0 0 0 0 4.Other 0 0 0 0 0 0 0 0 0 Total of Unlimited sale
185,391,680.00 100.00
0 0 0 0 0
185,391,680.00 100.00 shares
III. Total amount of shares 185,391,680.00 100.00 0 0 0 0 0 185,391,680.00 100.00 30. Capital reserves
Item 2013.12.31 Increase Decrease 2014.6.30 Share premium 210,045,659.80 0.00 0.00 210,045,659.80 Other capital reserve 68,408,787.27 0.00 0.00 68,408,787.27 Total 278,454,447.07 0.00 0.00 278,454,447.07 31. Surplus reserves
Category 2013.12.31 Increase Decrease 2014.6.30 Statutory surplus reserve 11,495,983.58 0.00 0.00 11,495,983.58 Total 11,495,983.58 0.00 0.00 11,495,983.58
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 32. Retained profits
Extracting or Item 2014.6.30 2013.12.31 allocation proportion Opening balance of retained profits before
46,733,303.43 20,797,991.70
adjustments
Adjustments of opening balance of retained
0.00 0.00
profits( increase+, decrease-)
Opening balance of retained profits after adjustments 46,733,303.43 20,797,991.70
Add: Net profit attributable to owners of the
14,857,989.76 47,069,386.29
Company
Less: Withdrawal of statutory surplus reserves 0.00 5,375,781.76 10% Withdrawal of discretional surplus reserves 0.00 0.00
Withdrawal of provision for general risk 0.00 0.00
Dividend of common stock payable 25,954,835.20 15,758,292.80
Dividend of common stock converted into share
0.00 0.00
capital
Closing retained profits 35,636,457.99 46,733,303.43
33. Revenue and Cost of Sales
(1) Revenue and Cost of Sales
Item Current overall tally Accumulated last year Sales of main business 853,536,487.98 845,775,086.33 Other operating income 36,679,811.53 32,069,121.47 Total 890,216,299.51 877,844,207.80 Cost of main business 750,410,484.64 752,449,378.64 Cost of other operating income 11,563,929.82 10,213,392.99 Total 761,974,414.46 762,662,771.63 (2) Main business (Classified by industry)
Current overall tally Accumulated last year Item
Operating income Operating costs Operating income Operating costs Small home appliance
853,536,487.98 750,410,484.64 845,775,086.33 752,449,378.64 manufacturing
Home helper 853,536,487.98 750,410,484.64 845,775,086.33 752,449,378.64 (3) Main business (Classified by area)
Current overall tally Accumulated last year Item
Operating income Operating costs Operating income Operating costs Catering and
515,128,658.12 445,237,910.10 488,925,179.51 429,741,895.84 Cooking
Home helper 248,061,429.17 228,197,976.09 262,321,852.47 241,867,813.52 Tea/Coffee 68,460,128.01 61,248,739.87 78,725,449.38 70,039,397.60 Others 21,886,272.68 15,725,858.58 15,802,604.97 10,800,271.68 Total 853,536,487.98 750,410,484.64 845,775,086.33 752,449,378.64
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. (4) Main business (Classified by area)
Current overall tally Accumulated last year
Item
Operating income Operating costs Operating income Operating costs
America 329,835,160.09 288,124,504.03 306,490,146.35 272,173,119.01
Asia 272,772,273.18 244,584,531.76 276,171,581.27 249,992,209.25
Europe 190,830,464.63 165,219,858.39 194,967,224.92 169,559,595.38
Australia 53,949,820.33 47,545,356.17 57,303,433.44 51,450,875.04
Africa 6,148,769.75 4,936,234.29 10,842,700.35 9,273,579.96
Total 853,536,487.98 750,410,484.64 845,775,086.33 752,449,378.64
(5) The revenue of sales from the top five customers
Customer Operating income Operating income Proportion(%) First 145,659,705.05 16.36 Second 133,189,287.77 14.96 Third 63,686,467.94 7.15 Fourth 49,640,863.53 5.58 Fifth 48,787,515.42 5.48 Total 440,963,839.71 49.53 34. Business tax and surtax
Item The cumulative amount Accumulated last year Business tax 1,941,628.44 1,475,556.78 Education surtax 1,478,879.69 93,937.37 Urban maintenance and construction tax 1,489,554.01 108,671.50 Others 20,247.05 0.00 Total 4,930,309.19 1,678,165.65 35. Selling expenses
Item The cumulative amount Accumulated last year Export charges 16,377,256.67 17,122,067.99 Employee compensation 10,238,256.77 10,001,217.63 Contributory value -1,225,317.76 -1,109,288.29 Sales commission and after-sales service charges 1,369,690.46 1,338,558.81 Property lease fee 1,485,206.71 1,484,282.26 Travel expense 2,302,320.71 1,760,774.08 Advertising sales promotion cost 2,749,456.16 2,616,571.38 Office allowance 359,560.00 383,859.79 Traffic expense 375,274.89 416,778.45 Other expenses 351,750.15 279,050.44 Total 34,383,454.76 34,293,872.54 36 Administrative cost
Item The cumulative amount Accumulated last yearR&D expenditure 30,469,780.95 30,687,843.84 Employee compensation 13,510,399.40 15,254,431.20 Amortization charges 5,172,379.73 6,536,462.17 Rental expense 8,260,918.04 8,516,499.93
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Insurance expenses 905,634.04 593,301.54 Office allowance 3,063,340.05 2,812,130.24 Travel expense 823,312.06 1,076,864.78 Advisory fee
1,025,718.06 1,072,324.52 Repairs expense 3,502,443.67 2,836,636.89 Taxation expense 2,120,135.29 858,299.23 Other expenses 4,058,526.12 4,605,032.02 Total 72,912,587.41 74,849,826.36 37. Financial expense
Item The cumulative amount Accumulated last year Interest expense 5,286,440.55 1,563,100.22 Less: Interest income 15,453,140.23 8,581,346.66 Less: Implemented financing income 551,374.62 972,346.12 Exchange gain or loss -1,817,398.65 10,699,858.51 Bank charges 1,318,498.60 1,160,280.76 Total -11,216,974.35 3,869,546.7138．Assets impairment loss
Item The cumulative amount Accumulated last year Bad debt loss -3,225,929.92 1,394,731.69 Loss on inventory valuation 858,827.82 1,385,604.80 Fixed assets impairment losses 2,920,419.99 0.00 construction in process impairment losses -114,359.13 0.00 Total 438,958.76 2,780,336.49 39. Gains and losses from changes in fair value
Source The cumulative amount Accumulated last year Trading financial assets 0.00 7,349,219.30 Including: gains from the changes in fair value of derivative financial assets 0.00 7,349,219.30 Trading financial liabilities -26,768,171.00 0.00 Including: Derivative financial liabilities -26,768,171.00 0.00 Total -26,768,171.00 7,349,219.30 40. Investment income
(1) List of investment income
Source The cumulative amount Accumulated last year Trading financial assets 8,647,755.48 3,466,924.99 Investment income of disposal of subsidiary 0.00 42,720.64 Dividend distribution 0.00 7,533.00 Financing income 5,352,363.02 59,166.67 Total 14,000,118.50 3,576,345.30 (2) List of investment income by equity method
Name of investee The cumulative amount Accumulated last year Xiamen Institute of Foreign Investment Enterprise 0.00 7,533.00
Total 0.00 7,533.00
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 41. Non-operating gains
(1) Notes of non-operating gains
Amount recorded into Item The cumulative amount Accumulated last year non-recurring profit and loss
Total gains from disposal of non-current assets 1,533,850.20 1,765,239.78 1,533,850.20 Including: Gains from disposal of fixed assets 1,533,850.20 1,765,239.78 1,533,850.20 Governmental subsidy 1,913,721.00 2,430,845.00 1,913,721.00 Other 5,373,277.09 513,588.23 5,373,277.09 Total 8,820,848.29 4,709,673.01 8,820,848.29 (2) List of government grants recorded into recurring profit and loss
Whether belong to Reporting Accumulated last Related to assets/Related to
Item non-recurring profits period year income
and loss
The corporation export
313,221.00 884,368.00 Related to income Yes
subsidies
The providence innovative
0.00 100,000.00 Related to income Yes
enterprise innovation subsidies
Subsidies for application for a
160,500.00 124,530.00 Related to income Yes
patent
The exhibition subsidies 40,000.00 0.00 Related to income Yes
Developmental project
subsidies for commodities 500,000.00 150,000.00 Related to income Yes
export base
Subsidies for Electricity
0.00 171,947.00 Related to income Yes
consumption growth
The key export product
400,000.00 0.00 Related to income Yes
structure optimization
Industrial design subsidies
500,000.00 1,000,000.00 Related to income Yes
income
Total 1,913,721.00 2,430,845.00
42. Non-operating expenses
Amount recorded into non-recurring Item Reporting period Accumulated last year
profit and loss Loss on disposal of non-current assets 2,627.18 157,115.25 2,627.18 Including: Loss on disposal of fixed assets 2,627.18 157,115.25 2,627.18 Losses on scrap of fixed assets 546,235.94 29,032.16 546,235.94 fixed assets inventory loss 7,982.12 0.00 7,982.12 Penalty expense 102,177.57 17,053.57 102,177.57 Spending on public welfare donations 14,464.05 482,944.00 14,464.05 Others 68,286.09 140,290.14 68,286.09 Total 741,772.95 826,435.12 741,772.95 43. Income tax expense
Item Reporting period Accumulated last year
Current income tax expenses 1,273,760.49 -21,221.76 Deferred income tax expenses 1,683,679.41 1,160,664.58 Total 2,957,439.90 1,139,442.82
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 44. Calculation procedure of basic earnings per share and diluted earnings per share
BasicEPS==P÷S
0
S=S＋S＋S×M÷M–S×M÷M -S
0 1 i i 0 j j 0 k
Of which: P refers to net profit attributable to shareholders holding ordinary shares or net profit attributable to 0
shareholders holding ordinary shares after deducting non-recurring gains and losses; S refers to weighted average number of ordinary shares issued out; S refers to total number of shares at the period-begin; S refers to the 0 1
number of shares increased due to transferring capital reserve into share capital or dividend distribution of shares during the reporting period; S refers to the number of shares increased due to issuance of new shares or debt for i
equity swap during the reporting period; S refers to the number of shares decreased due to stock repurchase j
during the reporting period; S refers to the number of split-share during the reporting period; M refers to the k 0
number of months during the reporting period; M refers to the number of months from the next month to the end i
of the reporting period for increase of shares; M refers to the number of months from the next month to the end of j
the reporting period for decrease of shares.
Diluted EPS=P /(S＋S＋S×M÷M–S×M÷M–S+ weighted average amount of ordinary shares increased due 1 0 1 i i 0 j j 0 k
to warrant, share options, convertible bonds, etc.)
Of which, P refers to net profit attributable to shareholders holding ordinary shares or net profit attributable to 1
shareholders holding ordinary shares after deducting non-recurring gains and losses. The Company shall consider all influence on potential diluted interests of ordinary shares when the Company calculated diluted earnings per share, till to minimum diluted EPS.
（1）Lists of amount of basic EPS and diluted EPS
Reporting period Same period of last year
Profits during the reporting period
Basic EPS Diluted EPS Basic EPS Diluted EPS Net profits attributable to ordinary
0.08 0.08 0.06 0.06
shareholders
Net profits attributable to ordinary
shareholders (excl. extraordinary gains or 0.09 0.09 0.00 0.00
losses)
（2）Calculation procedure of basic earnings per share and diluted earnings per share
①When calculating the basic earnings per share, net profits attributable to ordinary shareholders:
Item
Reporting period Same period of last year
Net profits attributable to ordinary shareholders 14,857,989.76 10,425,680.85 Of which: net profits attributable to continuing operation 14,857,989.76 10,425,680.85 Net profits attributable to discontinuing operation 0.00 0.00 Net profits attributable to ordinary shareholders after
17,047,602.69 707,622.89 deducting non-recurring profit and loss
Of which: net profits attributable to continuing operation 17,047,602.69 707,622.89 Net profits attributable to discontinuing operation 0.00 0.00②When calculating the basic earnings per share, the denominator is the weighted average outstanding common share, and the process was as followed:
Item Reporting period Same period of last year
Weighted number of ordinary share initially issued
185,391,680.00 185,391,680.00 outstanding
Add: weighted number of ordinary share issued
0.00 0.00 outstanding this year
Less: weighted number of ordinary share repurchase this
0.00 0.00 year.
weighted number of ordinary share issued outstanding at
185,391,680.00 185,391,680.00 the end of year
During the reporting period, the company does not exist dilutive potential common shares, thus basis EPS was equal to diluted EPS.
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 45. Other comprehensive income
Item Reporting period Same period of last year
Foreign currency financial statements convert the
276,130.47 2,635,820.49 difference
Total 276,130.47 2,635,820.49 46. Notes of Cash Flow Statement
(1) Other cash received relevant to operating activities
Item Reporting period Same period of last year
Deposit 490,180.00 4,653,300.00 Income from rental 16,628,012.01 21,208,425.02 Interest income 7,432,615.24 8,564,975.98 Government grants 1,873,721.00 2,430,845.00 Others 23,798,119.00 14,294,440.27 Total 50,222,647.25 51,151,986.27 (2) Other cash paid relevant to operating activities
Item Reporting period Same period of last year
Workshop rent 18,634,101.57 0.00 Bank charges 1,017,121.51 1,160,280.76 Purchase and sales commission 2,600,097.44 2,360,610.76 Operation expenses and other items in administration expenses 73,203,627.45 59,673,937.68 Gardenelectricity charge 32,207,030.90 30,105,204.89 Donations and penalty expense 116,641.62 499,997.57 Total 127,778,620.49 93,800,031.66 (3) Other cash received relevant to investment activities
Item Reporting period Same period of last year
Restricted monetary funds 896,866,338.47 0.00 Total 896,866,338.47 0.00 (4) Other cash received relevant to financing activities
Item Reporting period Same period of last year
Money lending of related party 143,957,350.00 158,789,800.00 Total 143,957,350.00 158,789,800.00 (5) Other cash payments relating to financing activities
Item Reporting period Same period of last year
Money lending of related party 12,304,200.00 0.00 Total 12,304,200.00 0.00
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 47. Appendix of Cash Flow Statement
(1) Appendix of Cash Flow Statement
Supplemental information Reporting period Same period of last year Reconciliation of net profit to net cash
flows generated from operating activities
Net profit 19,147,132.22 11,379,048.09 Add: Provision for impairment of assets 438,958.76 2,780,336.49 Depreciation of fixed assets, of oil-gas assets, of productive biological assets 25,761,482.07 31,358,473.72 Amortization of intangible assets 535,676.51 794,379.54 Amortization of long-term deferred expense 1,008,080.19 951,819.48 Losses on disposal of property, plant and equipment,
-1,659,864.90 -1,608,124.53 intangible assets and other long-term assets (gains: negative)
Loss on retirement of fixed assets (gains: negative) 554,218.06 29,032.16 Loss on fair value change (gains: negative) 26,768,171.00 -7,349,219.30 Financial cost (gains: negative) -6,101,935.05 12,852,007.01 Investment loss (gains: negative) -14,000,118.50 -3,533,624.66 Decrease in deferred income tax assets (gains: negative) 4,725,077.01 76,003.14 Increase in deferred income tax liabilities (decrease: negative) -3,041,397.60 1,084,661.44 Decrease in inventory (gains: negative) 6,527,226.13 28,225,419.19 Decrease in accounts receivable from operating activities (gains: negative) 70,447,473.89 67,706,472.81 Increase in payables from operating activities (decrease: negative) -164,190,118.82 -208,128,578.22 Net cash flows generated from operating activities -33,079,939.03 -63,381,893.64 Investing and financing activities that do not involving
cash receipts and payment:
Conversion of debt into capital
Net increase in cash and cash equivalents
Closing balance of cash 163,780,265.08 920,204,606.38 Less: Opening balance of cash 834,088,959.68 759,361,575.52 Net increase in cash and cash equivalents -670,308,694.60 160,843,030.86 (2) Composition of cash and cash equivalents
Item Reporting period Same period of last year
1. Cash 163,780,265.08 920,204,606.38 Including: cash in hand 661,293.17 714,518.54 Bank deposit can be used for payment at any time 163,118,971.91 919,490,087.84 Other monetary funds can be used for payment at
any time
2.Cash equivalents 0.00 0.00
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 3. Closing balance of cash and cash equivalents 163,780,265.08 920,204,606.38 VIII. Accounting treatment of asset securitization business:
There was no accounting treatment of asset securitization business in the Company
IX. Relationship and Related Party Transactions
1. Particulars about the parent company:
Type of
Parents Relationship Place of registration Legal representative Nature of business
incorporation
STAR COMGISTIC Manufacture and sales Ultimate holding company INC Taiwan Yang Wenfang
CAPITAL CO.,LTD. electrical equipment
(Continued)
Ultimate
Shareholding Voting right
Parents Registered capital
in the Company% in the Company%
controller Organisation code
of the Company
STAR COMGISTIC TWD 2,686,000.00
43.64 45.42 Wu Cankun 28986660 CAPITAL CO.,LTD. thousand
Name of parent Enterprise Registration Legal
Relationship Business nature Registered capital company nature place representative
Manufacturing,
STAR COMGISTIC Joint stock Yang Wenf selling TWD2,686,000 Ultimate holding Taiwan
CAPITAL CO.,LTD.
company ang electrical thousand
company appliances
Continued:
Proportions of Proportions of Ultimate
parentcompany’s parentcompany’s controller
Name of parent company Organization code shareholding to voting right to the of the
the company(%) company(%) company
STAR COMGISTIC CAPITAL CO.,
43.64%45.42% Wu Cankun 28986660
LTD.
2. Subsidiaries of the Company
Proportio
Legal Proportion
Register Business Registered n of Organization Name of company Type represen of voting
ed place nature capital shares code tative right(%)
held(%)
TsannKuen Sino-forei Small home
Zhangzh Pan 16,000 ten
(Zhangzhou) gn joint appliance 75 75 73954770-9
ou Zhirong thousand dollar
Enterprise Co., Ltd. venture manufacturing
TsannKuen
Sino-forei Luo Small home
(Zhangzhou) South Zhangzh 500 ten
gn joint Qingxin appliance 56.25 75 77067325-2
Port Electronics ou thousand yuan
venture g manufacturing
Enterprise Co., Ltd.
TsannKuen China Small home
Limited Shangha Jian 4,000 ten
(Shanghai) Enterprise appliance 62.5 62.5 60729103-5
company i Derong thousand dollar
Co., Ltd. manufacturing
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. TsannKuen
Private Luo Secondary
(Zhangzhou) Zhangzh 300 ten
non-enterp Qingxin vocational 75 100 79176918-1
Profession and ou thousand yuan
rise entity g education
Technology Institute
Luo
Shanghai Canxing Limited Shangha Sale of home 495 ten
Qingxin 56.25 100 67455210-0
Trading Co.,Ltd company i appliance thousand yuan
g
Xiamen Canxing Limited Jian Sale of home 2800 ten
Xiamen 75 100 55623112-X
Trading Co.,Ltd. company Derong appliance thousand yuan
13,599.30 ten
East Sino Limited Hongko Pan Investment 52406771-000 thousand HK 75 100
Development Limited company ng Zhirong and trade -04-14-1 dollar
PT.STAR Small home
Limited Indonesi Pan 1,750 ten
COMGISTIC appliance 74.68 99.57
company a Zhirong thousand dollar
INDONESIA manufacturing
3. Joint venture and associated enterprises of the Company
There was no Joint venture and associated enterprises of the Company
4. Other related party of the enterprise
Name of other related party of the enterprise Relationship with the company Organization code
EUPA Industry Corporation Limited Shareholder 12959659-000-13-1
Fordchee Development Limited Shareholder 14676920-000-01-14-0
Fillman Investments Limited Shareholder 16269694-000-07-13-5
Tsann Kuen Japan Co., Ltd. The same ultimate holding company 0105-01-021064
The company directly controlled by the
Thermaster Electronic (Xiamen) Ltd. key management and closed family 61201968-5 members
Star International Travel Service Co., Ltd. The same ultimate holding company 80355209
Controlled by same actual
Tsann Kuen Enterprise Co., Ltd. 69568009 controller
Xiamen Tsann Kuen Trading Co., Ltd Controlled by same actual controller 58126129-1
Sion Global Development Ltd. Controlled by same actual controller ―― PT.TSANNKUENPROPERTYDEVELOPMENTINDONESIA Controlled by same actual controller ―― PT.TSANNKUENINDONESIA Controlled by same actual controller ―― The company directly controlled by the
PT.ShenMinSukabumi key management and closed family ―― members
5. Related party transactions
(1) Purchase of goods, services received among the related-party
Reporting period Same period of last year
Proportion Proportion Content of related Pricing principle of in in Name of company
transaction related parties Amount transactions Amount transactions of the same of the same kind kind STAR According to
COMGISTIC Purchase contract price 1,993,309.61 0.36 2,627,119.41 0.49 CAPITAL CO., signed by both
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. LTD. parties
According to
Thermaster
contract price
Electronic Purchase 16,991,120.15 3.06 17,066,825.03 3.21 signed by both
(Xiamen) Ltd.
parties
Total 18,984,429.76 3.42 19,693,944.44 3.70 (2) Statement of sales of goods and rendering of services
Reporting period Same period of last year
Proportion Proportion Content of related Pricing principle in in Name of company
transaction of related parties Amount transactions Amount transactions of the same of the same kind kind According to
Tsann Kuen Japan Co., contract price
Sales of goods 5,832,857.86 0.68 36,873,729.50 4.36 Ltd. signed by both
parties
According to
STAR COMGISTIC contract price
Sales of goods 19,698,104.28 2.31 13,453,679.07 1.59 CAPITAL CO., LTD. signed by both
parties
Total 25,530,962.14 2.99 50,327,408.57 5.95 (3) Information of related-party lease
①the Company was as the lessor
Rental income Pricing basis for
Category of the recognized in Name of lessor Name of lessee Initial date Ending date the rental
leased assets the reporting income
period Xiamen Tsann According to
Xiamen Tsann
Kuen (China) contract price
Kuen Trading Fixed assets 13 Aug. 2011 24 Jul. 2015 750,000.00 Enterprise Co., signed by both
Co., Ltd
Ltd. parities
(4) Money lending of related-party
Name of related party Amount Initial date Ending date Notes Borrowing
Fillman Investments Limited 3,500,000.00 dollars 2014.03.17 2014.09.16 dollar loan Sion Global Development Ltd. 10,000,000.00 dollars 2014.02.20 2014.12.31 dollar loan Sion Global Development Ltd. 10,000,000.00 dollars 2014.02.26 2015.02.25 dollar loan (5) Related party assets transfer and debt restructuring
Reporting period Same period of last year Proporti
Price principle of Proportion on in
Name of related party Type Content other related-party in transacti
transaction Amount Amount transaction ons of
s of the the same
same kind kind
Tsann Kuen Enterprise Sale of fixed According to the
Sale 100,099.39 0.22 0.00 0.00 Co., Ltd. assets contract price
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. PT.TSANNKUENPROP
Sale of fixed According to the
ERTYDEVELOPMENTI Sale 0.00 0.00 50,808.92 0.01 assets contract price
NDONESIA
The purchase of
PT.TSANNKUENINDO According to the
Purchase mould and 0.00 0.00 139,478.16 0.01 NESIA contract price
equipment
(6) Other related-party transaction
Accumulative in reporting
Transaction Contents Accumulated last year period
Name of related party Proportion in Proportion in Amount transactions of Amount transactions of the same kind the same kind Payment
STAR COMGISTIC CAPITAL
Purchasing agent fee(notes:1) 97,839.44 100.00 111,505.63 100.00 CO., LTD
Tsann Kuen Japan Co., Ltd. Three packs of cost(notes:2) 0.00 0.00 122,165.26 0.11 STAR INTERNATIONAL TRAVEL
Accept service(notes:3) 0.00 0.00 318,072.06 0.19 SERVICECo., LTD.
Total 97,839.44 551,742.95
Notes 1: The Company and its subsidiaries authorize related company to purchase raw materials, molds and equipments. The relevant agency fees would be paid of110% of the actual happened operating fees.
Notes 2: The three packs of costs is the relevant fees that the Company’s subsidiaries paid for the issues of quality to the related company about purchasing parts and finished goods.
Notes 3: Both of the Company and the related company offer non-exclusive agency service, to transact the TCAP of travel
business, and to agent service fees according to the actual quoted prices of orders requirements of each batch.
6. Amounts due from/to related parties
(1) Amounts due from related party of listed company
2014.06.30 2013.12.31
Item Book balance Bad debt Book balance Bad debt
provision provision Accounts receivable:
Tsann Kuen Japan Co., Ltd. 1,096,262.38 0.00 5,084,445.29 0.00 STAR COMGISTIC CAPITAL CO., LTD 8,924,506.57 0.00 9,066,228.33 0.00 Total 10,020,768.95 0.00 14,150,673.62 0.00 (2) Amounts to related party of listed company
Item 2014.06.30 2013.12.31 Account payable
Thermaster Electronic (Xiamen) Ltd. 9,655,687.66 9,238,457.73 STAR COMGISTIC CAPITAL CO., LTD 737,323.25 753,382.59 Total 10,393,010.91 9,991,840.32 Other accounts payable:
Tsann Kuen Japan Co., Ltd. 104,810.21 185,167.61 STAR COMGISTIC CAPITAL CO., LTD 35,788.56 36,068.65 Xiamen Tsann Kuen Trading Co., Ltd 740,539.26 1,099,436.46 Fillman Investments Limited 21,666,164.62 12,300,998.74 Sion Global Development Ltd. 123,056,000.00 0.00
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Total 145,603,302.65 13,621,671.46 X. Share-based payment
There was no share-based payment in the reporting period
XI. Contingency
Tsann Kuen Zhangzhou, one of the Company’s subsidiaries, and Xinda Motor Co., Ltd. (hereinafter refer to as “Xinda Motor”) signed a product supply contract on 20 Jul. 2009, with thee valid period for the contract being from 1 Jul. 2009 to 30 Jun. 2012. Both parties also signed the 2011 ED Procurement Contract of Tsann Kuen Zhangzhou Enterprises Co., Ltd., the Special Agreement and other agreements, according to which Tsann Kuen Zhangzhou would purchase products from Xinda Motor. Later, Tsann Kuen Zhangzhou refused to pay for the products and chose to terminate the contract due to quality problems found in XindaMotor’s products. On 2 Nov. 2011, Xinda Motor filed a civil action against Tsann Kuen Zhangzhou to Zhangzhou IntermediatePeople’s Court, asking the court to order Tsann Kuen Zhangzhou to payUS$479,089.06 to it for the part of the contract that had been executed but not yet paid for, to bear the damages for overdue payment, and to continue to execute the
unexecuted contractual obligation (equivalent to a payment ofUS$189,423.25 for goods).
Tsann Kuen Zhangzhou filed a cross action on 8 Jan. 2012. Xinda Motor had caused serious economic loss and reputation damage on Tsann Kuen Zhangzhou for the products it provided for Tsann Kuen Zhangzhou did not go with the contract, due to which Tsann Kuen Zhangzhou produced products of ill quality, goods were returned and orders were canceled. On that basis, Tsann Kuen Zhangzhou asked Zhangzhou Intermediate People’s Court to terminate the contract between both parties and order Xinda Motor to pay to Tsann Kuen Zhangzhou a damage of RMB100 million, and a compensation of RMB7, 621,600.00.
Zhangzhou IntermediatePeople’s Court had made the first-instance judgment on 15Aug. 2013, the judgment was as followed: (1) The accuse Tsann Kuen Zhangzhou should pay$479089.06 which was RMB 3,071,535.78of payment for goods to Xinda Motor within 15 days from the day of the enforcement of this judgment. (2) The
accuser Xinda Motor and third party Boluo county Lian Yuan Industry Technology Co., Ltd. should pay RMB 1,233,399.70 of liquidated damages to Tsann Kuen Zhangzhou within 15 days from the day of the enforcement of this judgment. (3) Released 10 batch orders that unredeemed between Xinda Motor, Boluo county Lian Yuan Industry Technology Co., Ltd. and Tsann Kuen Zhangzhou. (4) Reject other claims of Xinda Motor. (5) Reject other claims of Tsann Kuen Zhangzhou. After the first-instance judgment, neither party refused to accept the
first-instance judgment and lodged an appeal. As of the date of the report, Tsann Kuen Zhangzhou should pay the book balance of goods$ 479,089.06 to Xinda Motor, due to the case is pending; Tsann Kuen Zhangzhou did not recognize the contingent assets RMB 1,233,399.70 to Xinda Motor.
Besides, the defective motor products provided by Xinda Motor was in total of 104,691 sets, however, the case
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. processing 23,035 sets only, there were 81,656 sets remained untreated. Thus, on 21 Dec. 2013, Tsann Kuen
Zhangzhou filed a suit to Zhangzhou IntermediatePeople’s Court, and the claims amount was in total of RMB 3,702,957.93. Zhangzhou IntermediatePeople’s Court has accepted the case.
XII. Commitments
1. Rental contract entered into and under execution as well as its financial effect
Unit: RMB ten thousand yuan Item 2014.06.30 2013.12.31 The lowest rental payment of irreversible operating lease
House rental
The first year after the Balance Sheet Date 3,727 3,727 The second year after the Balance Sheet Date 3,727 3,727 The third year after the Balance Sheet Date 3,727 3,727 The follwowing years 130,438 134,165 Total 141,619 145,346 2. Fulfillment of previous commitments
Up to the reporting date, the above mentioned commitments were continued to execute and there was no
circumstance about violations of the above commitments.
XIII. Events after the balance sheet date
No events after the balance sheet date
XIV. Notes of other significant events
1. Assets and liabilities calculated by fair value
the cumulative
Changes in Provision
changes in the
Amount at fair value for Amount at Item fair value
the year beginning gains and impairment the year-end included in
losses this year of the year
equity
Financial assets
Financial assets recognized into current
gains and losses by calculated in fair
0.00 0.00 0.00 0.00 0.00 value (excluded derivative financial
assets)
Derivative financial assets 21,120,100.00 -21,120,100.00 0.00 0.00 0.00 Available-for-sale financial assets 0.00 0.00 0.00 0.00 0.00 Subtotal of financial assets 21,120,100.00 -21,120,100.00 0.00 0.00 0.00 Investment property 0.00 0.00 0.00 0.00 0.00 Productive biological assets 0.00 0.00 0.00 0.00 0.00 Others 0.00 0.00 0.00 0.00 0.00 Total 21,120,100.00 -21,120,100.00 0.00 0.00 0.00 Financial liabilities
Derivative financial liabilities 0.00 5,648,071.00 0.00 0.00 5,648,071.00
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. XV. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable
2014.06.30
Item
Amount Proportion(%) Provision for bad debts Proportion(%) Accounts receivable with significant single amount
0.00 0.00 0.00 0.00 and individually withdrawn bad debt provision
Accounts receivable for which bad debt provisions
are made on the group basis
Aging group 11,464,791.67 97.80 249,531.68 2.18 Related group 258,117.00 2.20 0.00 0.00 Subtotal of the groups 11,722,908.67 100.00 249,531.68 2.13 Accounts receivable with insignificant single
amount but individually withdrawn bad debt 0.00 0.00 0.00 0.00 provision
Total 11,722,908.67 100.00 249,531.68 2.13 Continued
2013.12.31
Item
Amount Proportion(%) Provision for bad debts Proportion(%) Accounts receivable with significant single amount
0.00 0.00 0.00 0.00 and individually withdrawn bad debt provision
Accounts receivable for which bad debt provisions
are made on the group basis
Aging group 41,561,170.60 99.65 1,839,715.01 4.43 Related group 147,382.00 0.35 0.00 0.00 Subtotal of the groups 41,708,552.60 100.00 1,839,715.01 4.41 Accounts receivable with insignificant single
amount but individually withdrawn bad debt 0.00 0.00 0.00 0.00 provision
Total 41,708,552.60 100.00 1,839,715.01 4.41 (2) Accounts receivable aging lists
2014.06.30 2013.12.31
Item
Amount Proportion(%) Amount Proportion(%) Within 1 year 11,722,908.67 100.00 41,708,552.60 100.00
Total 11,722,908.67 100.00 41,708,552.60 100.00
(3) In groups, the account receivable of provision for bad debts by aging analysis
2014.06.30 2013.12.31
Aging
Provision for Provision for Amount Proportion(%) Amount Proportion(%)
bad debts bad debts Within 1 year 11,464,791.67 100.00 249,531.68 41,561,170.60 100.00 1,839,715.01 Including: 1 to 90
9,842,800.58 85.85 0.00 23,157,131.35 55.72 0.00 days
91 to 180 days 1,188,164.71 10.36 118,816.48 18,404,039.25 44.28 1,839,715.01 181 to 270 days 430,989.94 3.76 129,296.98 0.00 0.00 0.00 271 to 365 days 2,836.44 0.02 1,418.22 0.00 0.00 0.00 Total 11,464,791.67 100.00 249,531.68 41,561,170.60 100.00 1,839,715.01
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. (4) Information of shareholders with more than5% (including5%) of the voting shares of the Company in accounts receivable in report period
(5) Top five accounts receivable
Name of entity Relationship Amount Aging Proportion(%) First Non-related party 8,292,165.89 Within 1 year 70.73 Second Non-related party 1,439,763.00 Within 1 year 12.28 Third Non-related party 904,625.00 Within 1 year 7.72 Fourth Non-related party 343,346.50 Within 1 year 2.93 Fifth Non-related party 322,209.54 Within 1 year 2.75 Total 11,302,109.93 96.41
(6) Accounts receivable of related parties
Relationship with
Name of entity Amount Proportion(%) the Company
Tsann Kuen Zhangzhou Subsidiary 258,117.00 2.20 Total 258,117.00 2.20 2. Other account receivable
(1) Other account receivable listed by category
Item
2014.06.30
Amount Proportion(%) Provision for bad debts Proportion(%) Other accounts receivable with significant
single amount and individually withdrawn bad 0.00 0.00 0.00 0.00 debt provision
Other accounts receivable for which bad debt
provisions are made on the group basis
Aging group 1,989,285.26 93.87 14,277.07 0.72 Related group 0.00 0.00 0.00 0.00 Subtotal of the groups 1,989,285.26 93.87 14,277.07 0.72 Other accounts receivable with insignificant
single amount but individually withdrawn bad 130,000.00 6.13 0.00 0.00 debt provision
Total 2,119,285.26 100.00 14,277.07 0.67 Continued
Item
2013.12.31
Amount Proportion(%) Provision for bad debts Proportion(%) Other accounts receivable with significant single
amount and individually withdrawn bad debt 0.00 0.00 0.00 0.00 provision
Other accounts receivable for which bad debt
provisions are made on the group basis
Aging group 1,198,121.33 100.00 2,829.11 0.24 Related group 0.00 0.00 0.00 0.00 Subtotal of the groups 1,198,121.33 100.00 2,829.11 0.24 Other accounts receivable with insignificant
single amount but individually withdrawn bad 0.00 0.00 0.00 0.00 debt provision
Total 1,198,121.33 100.00 2,829.11 0.24
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. (2) Other accounts receivable aging lists
2014.06.30 2013.12.31
Item
Amount Proportion(%) Amount Proportion(%) Within 1 year 2,119,285.26 100.00 1,198,121.33 100.00 Total 2,119,285.26 100.00 1,198,121.33 100.00 (3) In groups, the other account receivable of provision for bad debts by aging analysis
2014.06.30 2013.12.31
Item Provision for Provision for Amount Proportion(%) Amount Proportion(%)
bad debts bad debts Within 1 year 1,989,285.26 100.00 14,277.07 1,198,121.33 100.00 2,829.11 Including: 1 to 90
1,906,687.40 95.85 0.00 1,169,830.19 97.64 0.00 days
91 to 180 days 52,533.06 2.64 5,253.31 28,291.14 2.36 2,829.11 181 to 270 days 30,043.20 1.51 9,012.96 0.00 0.00 0.00 271 to 365 days 21.60 0.00 10.80 0.00 0.00 0.00 Total 1,989,285.26 100.00 14,277.07 1,198,121.33 100.00 2,829.11 (4) Information of shareholders with more than5% (including5%) of the voting shares of the Company in other accounts receivable in report period
(5) Top five other accounts receivable
Name of entity Relationship Amount Aging Proportion(%) First Non-related party 1,895,129.15 Within 1 year 89.42 Second Non-related party 130,000.00 Within 1 year 6.13 Third Non-related party 53,613.00 Within 1 year 2.53 Fourth Non-related party 30,000.00 Within 1 year 1.42 Fifth Non-related party 6,392.78 Within 1 year 0.30 Total 2,115,134.93 99.80
3. Long-term equity investments
Accounting Increase/
The investee Investment cost 2013.12.31 2014.06.30 method decrease
ShanghaiTsann Kuen Enterprise Co., Ltd. Cost method 194,545,872.18 194,545,872.18 0.00 194,545,872.18 Zhangzhou Tsann Kuen Enterprises Co., Ltd. Cost method 921,914,701.56 921,914,701.56 0.00 921,914,701.56 Xiamen Institute of Foreign Investment
Cost method 40,000.00 40,000.00 0.00 40,000.00 Enterprise
Total 1,116,500,573.74 1,116,500,573.74 0.00 1,116,500,573.74 Explanations
on Withdrawal
differences amount of
Voting between Provision for impairment
Shareholding
The investee right shareholding impairment provision Cash bonus Proportion
Proportion proportion loss in the
and voting reporting
right period
proportion
ShanghaiTsann Kuen Enterprise Co., Ltd. 62.50 62.50 130,646,542.91 0.00 0.00 Zhangzhou Tsann Kuen Enterprises Co., Ltd. 75.00 75.00 0.00 0.00 38,189,978.21 Xiamen Institute of Foreign Investment
1.48 1.48 0.00 0.00 0.00 Enterprise
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. Total 130,646,542.91 0.00 38,189,978.21 4. Operating income and costs
(1) Operating income
Accumulative amount
Item Same period of last year in reporting period
Main business revenue 31,655,528.61 27,869,917.21 Other business revenue 10,952,464.03 7,576,194.98 Total 42,607,992.64 35,446,112.19 Main business cost 26,639,150.58 22,768,892.12 Other business cost 2,441,093.29 2,411,159.04 Total 29,080,243.87 25,180,051.16 (2) Main business (Classified by industrial)
Accumulative amount
Same period of last year Item in reporting period
Operating income Operating costs Operating income Operating costs Small Household Appliance 31,655,528.61 26,639,150.58 27,869,917.21 22,768,892.12 Total 31,655,528.61 26,639,150.58 27,869,917.21 22,768,892.12 (3) Main business (Classified by product)
Accumulative amount
Item Same period of last year in reporting period
Operating income Operating costs Operating income Operating costs Catering and Cooking 9,487,969.10 7,887,152.22 6,182,380.83 4,936,382.81 Home helper 2,686,131.41 2,269,269.11 14,108,680.29 11,836,580.41 Tea/Coffee 5,925,694.54 4,641,420.79 7,054,358.34 5,627,339.05 Others 13,555,733.56 11,841,308.46 524,497.75 368,589.85 Total 31,655,528.61 26,639,150.58 27,869,917.21 22,768,892.12 (4) Main business (Classified by area)
Accumulative amount
Same period of last year Item in reporting period
Operating income Operating costs Operating income Operating costs Asia 31,655,528.61 26,639,150.58 27,869,917.21 22,768,892.12 Total 31,655,528.61 26,639,150.58 27,869,917.21 22,768,892.12 (5) Revenue of sales from the top five customers
Customers Operating income Proportion(%) First 7,853,630.00 18.43 Second 7,530,601.44 17.67 Third 4,775,349.68 11.21 Fourth 2,216,404.42 5.20 Fifth 1,404,180.57 3.30 Total 23,780,166.11 55.81
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 5. Investment income
(1) List of investment income
Accumulative amount
Source Same period of last year in reporting period
Long-term equity investment income accounted by cost method 38,189,978.21 7,533.00 Long-term equity investment income accounted by cost method 0.00 0.00 Investment income arising from disposal of long-term equity investments 0.00 0.00 Total 38,189,978.21 7,533.00 Accumulative
amount Reason of increase/decreas Investee Same period of last year
in reporting e period
Distributed in Aug. 2013 Tsann Kuen Zhangzhou 38,189,978.21 0.00
last year Xiamen Institute of Foreign Investment Enterprise 0.00 7,533.00 Undistributed this year Total 38,189,978.21 7,533.00
6. Supplemental information of Cash Flow Statement
Accumulative
Supplemental information amount Same period of last year in reporting period
1. Reconciliation of net profit to net cash flows generated from operations:
Net profit
42,288,654.76 6,599,285.59 Add: Provision for assets impairments
-1,498,177.31 109,836.18 Depreciation of fixed assets, oil and gas assets and productive biological assets
2,835,310.71 2,841,827.86 Amortization of intangible assets
210,418.32 218,254.92 Amortization of long-term deferred expense
184,149.06 170,149.02 Losses/gains on disposal of property, intangible asset and other long-term assets (gains: negative)
-4,746.26 -702,653.94 Losses/gains on scrapped of fixed assets (gains: negative)
0.00 0.00 Losses/gains from variation of fair value (gains: negative)
0.00 0.00 Financial cost (income: negative)
326,965.71 -176,981.36 Investment loss (gains: negative)
-38,189,978.21 -7,533.00 Decrease in deferred tax assets (increase: negative)
1,396,262.02 0.00 Increase in deferred tax liabilities (decrease: negative)
0.00 0.00 Decrease in inventory (increase: negative)
-1,157,496.70 2,416,142.22 Decrease in accounts receivable from operating activities (increase: negative)
27,313,580.38 -7,287,880.12 Increase in accounts payable from operating activities (decrease: negative)
-47,735,456.02 1,136,795.20 Net cash flows generated from operating activities
-14,030,513.54 5,317,242.57 2. Significant investing and financing activities without involvement of cash receipts and payments
Debt converted into capital
Change of cash and cash equivalent:
Closing balance of cash and cash equivalent 9,684,609.95 7,942,734.91 Less: opening balance of cash equivalents 11,811,615.43 17,652,594.45 Net increase of cash and cash equivalent -2,127,005.48 -9,709,859.54
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. XVI. Supplemental information
1. Notes of non-recurrent profit and loss in reporting period
||||
|-|-|-|
|Item Amount Notes|||
|Loss and gains on disposal of non-current assets (Including write-off part of theprovision for asset impairment)|984,987.08||
|Tax rebates and cuts of ultra vires approval or without formal approval|||
|Governmental subsidy included in the current profits and losses(is closely relatedwith the business event, except for the governmental subsidy that according to thenational unity standard quota or the quantitative regal assets)|1,913,721.00||
|Tax for the possession of funds from the non-financial business Included in thecurrent losses and gains|||
|The quota of the Company receives from the subsidiaries, joint ventures andcooperative enterprises of the costs of investment is less than that of the gainsproduced from the investment which enjoys net assets of fair value that recognizedby the investee.|||
|Exchange gains and losses of non-monetary assets|||
|Gains and losses of agenting others of investment or managing assets|||
|Withdrawing impairment of assets owning of force majeure factors, includingsuffer from natural disasters|||
|Gains and losses of debt restructuring|||
|Enterprise restructuring charges, for example, staffing costs of integration|||
|Gains and losses produced when exchanging prices unconscionable at the fair thatexceed the fair value|||
|The current net profits and losses produced when the subsidiaries combine under the same control from the beginning to the combining date|||
|Gains and losses produced from the contingency which have nothing to dowith the Company ’s normal business operations|||
|In addition to the valid hedging activity associated with the normal operation of theCompany, the changes in fair value through gains or losses which arising from theholding trading financial assets and the trading financial liabilities as well as theinvestment income that earning from the disposal of trading financial assets,trading financial liabilities and available-for-sale financial assets|-12,768,052.50|Mainly is the investment returnsof the Selling of forwardforeign exchange contracts,changes in fair value gains,other liquid assets income offinancial products|
|The reversal of impairment of receivables of the individual impairment test|||
|Gains and losses from the external entrusted loans|||
|Gains and losses for changes in fair value of investment property resulting from thesubsequent measure through the fair value model|||
|The impact of a one-time adjustment of current gains and losses according to thelaws and regulations of tax, accounting and others on current gains and losses|||
|Trustee fee income earning from the entrusted management|||
|Income and expenses of the other operation except the mentioned above|5,180,367.26||
|The other items of gains and losses conforming the definition of non-recurringgains and losses|1,285,415.02|The receive of cancel afterverification of payment|
|Less：the effect of income tax|-1,190,531.80||
|the effect of minority interest (after tax) -23,417.41|||
|Total -2,189,612.93|||

2. Net assets income rate and earnings per share
||||
|-|-|-|
|Profits in reporting period|ROEWA（%）|Earnings per share|

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
|||||
|-|-|-|-|
|Net margins of the Company ’s common stock holders|2.82|0.08|0.08|
|Net margins of the Company’s common stock holders whichhas reduced non-recurring gains and losses|3.23|0.09|0.09|

2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. 3. Particulars on the abnormal conditions of main items in the financial statements of the
Company and relevant reasons
||||||
|-|-|-|-|-|
|item Closing amo|unt|Openingamount|Increase/Decrease ratio|Reasons of change|
|Tradable financial assets 0.00||21,120,100.00|-100.00%|Mainly was the loss estimation of undelivery of forwardforeign exchange contracts|
|Customer in advance 5,811,17|9.20|4,290,802.70|35.43%|Mainly was the increase of the purchase of raw material|
|Interest receivable 8,020,524.|99|110,833.33|7136.56%|Mainly was the increase of fixed term deposit|
|other current assets 330,000,0|00.00|50,000,000.00|560.00%|Mainly was the increase of the purchase of financeproducts|
|construction in process 4,622,|309.63|10,889,671.98|-57.55%|Mainly due to the industry plant transfer into fixed assets|
|short-term borrowing 481,764|,240.00|30,484,500.00|1480.36%|Mainly was the increase of short term borrowing|
|transaction financialliabilities|5,648,071.00|0.00|100.00%|Mainly was the loss of undelivery of forward foreignexchange contracts|
|Notes receivable 7,745,858.91||30,577,887.89|-74.67%|Mainly was the note payable due to pay was paid byLetter of Credit|
|Receivable in advance 18,637|,100.79|10,431,654.59|78.66%|Mainly was the increase of customer in advance|
|Tax payable -809,567.82||-17,127,309.97|95.27%|Mainly due to recover export tax refunds of last year|
|Interest payable 3,270,214.70||108,661.00|2909.56%|Mainly was the increase of short term loan|
|Other payables 191,525,702.0|8|69,376,770.31|176.07%|Mainly duo to borrow from related party|
|Deferred income taxliabilities|217,345.05|3,258,742.65|-93.33%|Mainly due to the unrealized benefit of initial forwardforeign exchange|

||||||
|-|-|-|-|-|
|Item Closing amo|unt|Openingamount|Increase/Decrease ratio|Reasons of change|
|Business tax and surcharges|4,930,309.19|1,678,165.65|193.79%|Mainly due to business tax and surcharges occurred byexport tax avoid touch drawback|
|Financial expense -11,216,974|.35|3,869,546.71|-389.88%|Mainly due to depreciation caused exchange interests andthe interest income increase|
|Assets impairment loss 438,95|8.76|2,780,336.49|-84.21%|Mainly due to the recovery of the customerpayment and provision for fixed asset impairmentloss|
|Gains on the changes in thefair value|-26,768,171.00|7,349,219.30|-464.23%|Mainly was the profits of undelivery of forward foreignexchange contracts|
|Investment income|14,000,118.50|3,576,345.30|291.46%|Mainly was decrease of the income of delivery offorward foreign exchange|
|Non-operating income 8,820,8|48.29|4,709,673.01|87.29%|Mainly due to subsidiary increased than that in lastyear|
|Income tax expense 2,957,439|.90|1,139,442.82|159.55%|Mainly due to deferred income tax assets reverse|
|Net cash flow fromoperating activities|-33,079,939.03|-63,381,893.64|47.81%|Mainly due to the payment for goods was less thanthat in last year|
|Net cash flow frominvestment activities|-1,181,899,628.49|-87,554,293.09|-1249.90%|Mainly due to the increase of the purchase offinancing products and the limited deposit account|
|Net cash flow fromfinancing activities|539,659,463.51|322,007,671.55|67.59%|Mainly due to the increase of export financing loan|