TSANN KUEN (CHINA) ENTERPRISE CO. LTD
Semi-Annual Report 2009
(Prepared under China Accounting Standards)
Contents
I. Company Profile-------------------------------------------------------------------------------1
II. Summary of Financial and Business Highlights--------------------------------------2
(I) Major accounting data and financial indexes -----------------------------------------2
(II) Explanation on difference between different accounting standards---------------3
III. Changes in Share Capital and Particular about Shareholders-------------------------3
(I) Changes in share capital-----------------------------------------------------------------3
(II) Particular about shareholders ----------------------------------------------------------4
(III) About controlling shareholders--------------------------------------------------------5
(IV) About actual controlling shareholders------------------------------------------------5
IV. Particulars about Directors, Supervisors and Senior Management-------------------6
V. Report of the Board of Directors-----------------------------------------------------------6
VI. Significant Events -------------------------------------------------------------------------12
VII. Financial Report (Attachment) ---------------------------------------------------------18
VIII. Documents Available for Reference--------------------------------------------------192
Important Notes
The Board of Directors, Supervisory Committee, as well as the directors, supervisors and senior
management of Tsann Kuen (China) Enterprise Co., Ltd. (hereinafter refer to as “the Company”)
hereby confirm that there is no false information, misleading statements or any material omission
carried in this report, and collectively and individually accept the responsibilities for the truthfulness,
accuracy and completeness of the whole contents.
None of directors, supervisors and senior management has ever declared that he (she) is uncertain of
or has any objection to the truthfulness, accuracy and completeness of this semi-annual report 2009.
All the directors had attended the Board meeting which reviewed and approved the semi-annual
report 2009.
The Chairman of the Board of Directors Mr. Jian Derong and the Accounting Manager Mr. Chen
Zongyi jointly declare that the financial report in this semi-annual report is true and complete.
The financial report in this semi-annual report has not been audited.
I. Company Profile
1. Company’s name (Chinese) : 厦门灿坤实业股份有限公司
Company’s name (English) : Tsann Kuen (China) Enterprise Co., Ltd.
Company’s name (Abbr.) : TKC
2. Legal Representative : Jian Derong
3. Secretary of the Board of Director : Luo Qingxing
Contact address :Tsann Kuen Industrial Park, Longchi Development Zone, Zhangzhou, Fujian
province
Telephone : 0596-6268103
Fax : 0596-6268104
E-mail : allenlo@tkl.tsannkuen.com
Securities Affairs Representative : Sun Meimei
Contact address : Tsann Kuen Industrial Park, Longchi Development Zone, Zhangzhou, Fujian
province
Telephone : 0596-6268161
Fax : 0596-6268104
E-mail : mm_sun@tkl.tsannkuen.com
4. Registered address : No.88, Xinglong Road, Huli Industry District, Xiamen, P.R.C.
Post code : 361006
Office address : Tsann Kuen Industrial Park, Longchi Development Zone, Zhangzhou, Fujian
province
Post code : 361107
Website : www.tsannkuen.com
E-mail : allenlo@tkl.tsannkuen.com3
5. Newspapers Chosen for Disclosing the Information of the Company:
Domestic : Securities Times; Overseas: Hong Kong Ta Kung Pao
Website for publishing semi-annual report: www.cninfo.com.cn
Place Where the semi-report is prepared and placed: Tsann Kuen Industrial Park, Longchi
Development Zone, Zhangzhou, Fujian province
6. Stock Exchange Listed with : Shenzhen Stock Exchange
Short form for stock : Tsann Kuen B
Stock code : 200512
7. Initial registered date and place : Jan. 1, 1988 in Xiamen, P.R.C.
Business license number : 350200400001420
Organization Code : 61200217-0
Tax registration code : NTW Zi 350206612002170
CPAs engaged by the Company : Reanda Certified Public Accountants Co., Ltd.
Address of CPAs engaged : Room 2008, Eastern 20/F, No. 1 Building, No. 100 Xili,
Balizhuang, Chaoyang District, Beijing.
II. Summary of Financial and Business Highlights
(I) Major accounting data and financial indices
Unit: RMB Yuan
Items
As at the end of
this report period
As at the end of
last year
Increase/decrease of the end
of report period compared
with the period-end of the
last year (%)
Total assets 1,815,519,734.32 2,236,370,415.83 (18.82)
Owners’ equity attributable to shareholders of listed
company
363,702,841.41 343,776,758.97 5.80
Share capital 1,112,350,077.00 1,112,350,077.00 (0.00)
Net assets per share attributable to shareholders of listed
company
0.3270 0.3091 5.79
Items The report period
(Jan. -Jun.)
The same period of
last year
Increase/decrease during the
report period compared with
that of the last year (%)
Operating income 1,184,719,288.10 2,092,963,091.76 (43.40)
Operating profit 18,952,570.69 38,802,145.05 (51.16)
Total profit 28,666,124.42 41,568,168.78 (31.04)
Net profit attributable to shareholders of listed company 20,163,216.18 27,749,022.72 (27.34)
Net profit after deducting non-recurring gains and losses 17,747,955.08 26,432,093.64 (32.85)
Earnings per share-basic 0.0181 0.0249 (27.31)
Earnings per share-diluted 0.0181 0.0249 (27.31)
Return on equity 5.54% 8.07% (2.53)
Net cash flow arising from operating activities (36,047,687.38) (159,919,434.80) 77.46
Net cash flow per share arising from operating activities (0.03241) (0.1438) 77.474
Items and amount of non-recurring gains and losses
Unit: RMB Yuan
Items Amount
Net profit 27,056,315.48
Add: gains and losses from disposal of non-current assets, including the part that withdrawn reserve for
impairment of assets were offset
(6,013,156.17)
Gains and losses from change in fair value of tradable financial assets and tradable financial liabilities and
investment income from disposal of tradable financial assets, tradable financial liabilities and available-for-sale
financial assets except for effective hedging business related to normal operation business of the Company
683,060.97
Government subsidy measured into current gains and losses, while closely related with the business of the
Company, excluding the fixed-amount or fixed-proportion government subsidy enjoyed according to the certain
standard
(2,700,117.03)
Other non-operating income and expense beside for the above-mentioned each items (1,000,280.39)
Subtotal (9,030,492.62)
Less: influence on enterprise income tax (1,474,606.78)
Less: net profit attributable to minority shareholders after deducting non-recurring gains and losses 1,752,474.56
Net profit attributable to shareholder of parent company after deducting non-recurring gains and losses 17,747,955.08
(II) Difference between PRC GAAP and IFRS
(Unit: RMB)
Net profit attributable to
shareholders of listed company
Net assets attributable to
shareholders of listed company
Items
Jan.-Jun. 2009
Jan.-Jun.
2008
30 Jun. 2009 Dec. 31 2008
Under IFRSs 19,187,741.44 26,773,547.98 364,252,645.90 345,302,038.21
Under PRC GAAP 20,163,216.18 27,749,022.72 363,702,841.41 343,776,758.97
Adjustment pursuant to IFRSs
Adjustment of fixed assets purchased before
1994 due to adopting adjusted rate (1,111,317.84) (1,111,317.84) 2,376,139.44 3,487,457.28
Writing off the depreciation in this year of
evaluation increment fixed asset of the
year1993
135,843.10 135,843.10 (1,826,334.95) (1,962,178.04)
Total (975,474.74) (975,474.74) 549,804.49 1,525,279.24
Explanation on difference
1. Adjustment to property, plant and equipment which acquired
before 1994 at swap rates
2. Writing off the depreciation in this year of evaluation increment fixed
asset of the year1993
III. Changes in Share Capital and Particular about Shareholders
(I) Changes in share capital
□Applicable √Inapplicable5
(II) Particulars about shareholders
Total shareholders: 27803
Shares held by the top ten shareholders
Unit: Share
No Name of shareholder Nature of shareholder
Proportion of
shares held
Shares held at
the period-end
Non-tradable
shares held
Shares pledged or
frozen
1
FORDCHEE
DEVELOPMENT LIMITED
Foreign corporation 29.10% 323,643,179 0 0
2
EUPA INDUSTRY
CORPORATION LIMITED
Foreign corporation 16.35% 181,855,147 0 0
3
FILLMAN INVESTMENTS
LIMITED
Foreign corporation 9.88% 109,900,037 0 0
4 TIMMERTON CO INC Foreign corporation 1.30% 14,505,644 0 Unknown
5 CHEN YONG QUAN Domestic natural person 0.68% 7,596,456 0 Unknown
6 CHEN YONG QING Domestic natural person 0.53% 5,855,089 0 Unknown
7 CHEN LI JUAN Domestic natural person 0.51% 5,693,846 0 Unknown
8 CSC SECURITIES (HK.) LTD Foreign corporation 0.44% 4,929,972 0 Unknown
9 HE JIAN XIONG Domestic natural person 0.40% 4,439,551 0 Unknown
10 TSAI SHU HUI Foreign natural person 0.39% 4,294,433 0 0
Shares held by the top ten stockholders holding tradable shares
Unit: Share
No. Name of shareholder Number of tradable shares held Type of shares
1 FORDCHEE DEVELOPMENT LIMITED 323,643,179 B-share
2 EUPA INDUSTRY CORPORATION LIMITED 181,855,147 B-share
3 FILLMAN INVESTMENTS LIMITED 109,900,037 B-share
4 TIMMERTON CO INC 14,505,644 B-share
5 CHEN YONG QUAN 7,596,456 B-share
6 CHEN YONG QING 5,855,089 B-share
7 CHEN LI JUAN 5,693,846 B-share
8 CSC SECURITIES（HK）LTD. 4,929,972 B-share
9 HE JIAN XIONG 4,439,551 B-share
10 TSAI SHU HUI 4,294,433 B-share
Explanation on related
relationship and
action-in-concert
among above
mentioned shareholders
The top three shareholders are the controlling shareholders. Shareholder Tsai Shuhui is also director of
TSANN KUEN (Taiwan) ENTERPRISE CO. LTD, which is the actual controller of the Company. The
Company was not aware that whether there were any related relationships between other shareholders
holding tradable shares and whether or not the other shareholders holding tradable shares belonged to the
action-in-concert people specified in The Regulations for Information Disclosure on the Change of Shares
Held by the Shareholders of the Listed Companies.
Remark:
FORDCHEE DEVELOPMENT LIMITED, the controlling shareholder of the Company, has sold
1,042,789 shares accumulatively in this report period through Shenzhen Stock Exchange, taking up
0.094% of total share capital of the Company; FILLMAN INVESTMENT LIMITED, The
controlling shareholder of the Company, has sold 52,442,947 shares accumulatively in this report
period through Shenzhen Stock Exchange, taking up 4.715% of total share capital of the Company.6
(III) About controlling shareholders
Name of shareholders
Legal
Representative
Foundation date
Business
scope
Registered capital Pledge
FORDCHEE DEVELOPMENT LTD Jian Derong 3 Jan. 1990 Investment HKD 10,000 Naught
EUPA INDUSTRY CORPORATION LTD Jian Derong 21 Jul. 1989 Investment HKD100,000 Naught
FILLMAN INVESTMENTS LTD Jian Derong 21 Jul. 1992 Investment HKD10,000 Naught
Note: all above mentioned controlling shareholders are the controlling subsidiaries of TSANN
KUEN (Taiwan) ENTERPRISE CO., LTD.
(IV) About actual controlling shareholders
1. Name of actual controlling shareholder : TSANN KUEN (Taiwan) ENTERPRISE CO. LTD
2. Legal representative : Zhuang Xing
3. Foundation day : 2 Nov. 1978
4. Major operation and products : Small household appliances and its raw material,
manufacturing the equipments, manufacturing and sales, appliances retail in department store
5. Registered capital : NTD 3,209,978,410
6. Equity structure : Ordinary share
7. Block diagram of the relationship between the Company and the real controlling shareholders:
16.35%
29.10%
9.88%
99.98% 99.96%
81.00%
Tsai Shuhui Wu Tsann
Kuen
Tsai Yuan
Song
Tsai Yuan
Yuan
Other
shareholders
Tsai Shuhui
Tsann Kuen Investment Co., Ltd.
Standard Chartered Bank Fidelity
Bailee
Tsann Kuen (Taiwan) Enterprise Co., Ltd.
SINO Global Development
EUPA Industry
Corporation Limited
FORDCHEE Development
Limited
FILLMAN Investment
Limited
Tsann Kuen (China) Enterprise Co., Ltd.
21.25% 16.25% 28.75% 16.25% 12.50% 5.00%
100% Wu Tsann Kuen
Tsai
Yuanzhong
Jiang Huamei
HSBC hosting Kim Eng
Securities(Hong Kong) Ltd.
Accounts.
Chase Manhattan Bank, Fidelity
Investment Trust Fidelity hosting
the Pacific Basin Fund
Investment accounts
Tsai Yuan Song
Hua Nan Commercial Bank by
Tsann Kuen Enterprise Trust
property accounts
Chase Manhattan Bank hosting
Public Employees Retirement
System of Ohio Investment
accounts
0.80% 0.94% 0.81% 4.90% 5.62% 33.94% 1.06% 0.68% 2.80%
0.85%7
IV. Particulars about Directors, Supervisors and Senior Management
(I) Changes in directors, supervisors and senior management
□Applicable √Inapplicable
V. Report of the Board of Directors
1. Discussion and analysis on operation status of the Company during the report period
According to relevant date of state, export amount in the first half year of 2009 totaled USD 521.5
billion, down by 21.8% year-on-year, of which export of electrical appliances and electrical products,
a decrease of 22.7% year-on-year. Executives of the Company stably actualized target of 2009 which
was confirmed at the year-begin. Facing severe market, executives of the Company combined
actuality, adjusted products structure, actively exploited new marker in domestic and overseas,
deeply acquaint catering and consumption culture of new market, innovated products and technology,
otherwise, the Company reduced cost of purchase materials with biding and tendering, satisfied
demand of customers, dispersed risks and promoted profitability of the Company.
During the report period, the Company realized operating income amounting to RMB 1.185 billion,
with a decrease of 43.40% year-on-year; operating cost amounting to RMB 10.28 billion, with a
decrease of 46.61% year-on-year, which was mainly because the Company effectively controlled the
net profits of orders, optimized sales structure of products with different classes and influenced by
international financial crisis.
The Company achieved a net profit amounting to RMB 20 million, with the debt ratio improved
from 69.54% at the end of 2008 to 60.98% at the end of the report period. In the first half of 2009,
despite the global economic downturn, the Company managed to maintain a stable business
performance and optimize its financial structure by taking such actions as improving the internal
management, strengthening its competitiveness, balancing production and sale, shortening the
delivery time of raw materials, reducing inventory, activating capital flows, perfecting business
mode and expense control, and improving the product quality and delivery time.
Due to influence of international financial crisis, the international economy was in downturn and
economic difficulties increased obviously. Facing influence of changeful economic environment and
various disadvantaged factors, the Company would adhere to strategic targets (focus on our own
industry, improvement on operation management and enhancing the risk control) put award at the
year-begin of 2008, took “positive cash and profits” as the highest guidelines, guide the technology
and product innovation, speed up the improvement of globalization manufacturing and marketing
capacity, adhere to self-management, strengthen the unity between the manufacturing and purchase,
research and sale, further perfect the internal control rules, finally reach the advanced advantages
from research, design to marketing system and realized steady development of all business of the
Company.8
2. Scope of main business and its operation
(1) Classifying according to industries and products
Unit: RMB’0000 Yuan
Main business classified according to industries
Industries/products
Income
of main
business
Cost of
main
business
Gross
profit
ratio (%)
Increase/decrease of
income from main
business year-on-year
(%)
Increase/decrease of
cost of main business
year-on-year (%)
Increase/decrease
of gross profit
ratio year-on-year
(%)
Household appliance
manufacture
114,737 101,965 11.13 -44.25 -46.84 4.33
Main business classified according to products
Home assistant 43,574 40,616 6.79 -46.58 -48.26 3.04
Gourmet cooking 53,693 45,839 14.63 -42.24 -45.10 4.46
Tea/coffee 14,068 12,450 11.50 -51.34 -54.72 6.61
Other 3,402 3,060 10.05 43.83 33.62 6.87
Among which: total related transaction amount on products and service of controlling shareholders
and subsidiary companies provided by listed company was RMB 34,435,924.06 in the report period.
(2) Classifying according to areas
Unit: RMB’0000 Yuan
Area Income from main business Increase/decrease of income from main business year-on-year (%)
America 48,014 -45.23
Europe 23,265 -47.78
Asia 38,627 -31.20
Other 4,832 -72.28
Total 114,737 -44.25
(3) The products whose sales income exceeded 10% of income from main business
Unit: RMB’0000 Yuan
Product Proportion (%) Sales income Cost of sales Gross profit ratio
Home assistant 37.98 43,574 40,616 6.79
Gourmet cooking 46.80 53,693 45,839 14.63
Tea/coffee 12.26 14,068 12,450 11.50
Other 2.96 3,402 3,060 10.05
Home assistant 100.00 114,737 101,965 11.13
(4) Explanation for significant changes of main business and its structure
□Applicable √Inapplicable
(5) Explanation on reasons for significant changes in profitability (gross profit ratio) of main
businesses compared with the previous year
□Applicable √Inapplicable
(6) Analysis of reasons for significant changes in profit structure compared with last year
□Applicable √Inapplicable9
3. Operation status and achievements of the Company’s main controlling companies and joint stock
companies
01. Tsann Kuen China (Shanghai) Enterprise Co., Ltd.
A. Business Type: Manufacturing;
B. Major Products and Services: Production of household appliances, electronic products, light
industry products, modern office appliances and their related modules, various kinds of computers
and their related equipments or spare parts. Development of computer software, IC packing and
testing; sale of our own products (the export of which does not usually require a license and quota;
where such a license or quota is required, it should be obtained before operation.)
C. Registered capital: USD 40 million
D: Asset scale: RMB 106.98 million
E: Net assets: RMB 103.47 million
F: Net profit: RMB -3.34 million
G: Net profit influence over 10%:
Income of main businesses: RMB 0
Cost of main business: RMB 0
02. Tsann Kuen Zhangzhou Enterprise Co. Ltd.
A. Business Type: Manufacturing;
B. Major Products and Services: Development, production and sale of small household electrical
appliances, new-type electronic appliances and parts (such as electrical kits, sensors and sensitive
transmitters), light industrial products, modern office supplies; designing and producing the molds
related to the above products; processing non-ferrous metal composite materials, new alloy materials,
sales of the products and semi-finished products made by the company, processing supplied
materials within the Company’s business scope and other processing businesses and compensation
trade (excluding those products restricted by the government or those whose import or export is
controlled by license or quota) Wholesale of various kinds of small household appliances (When
involved in those projects which need to be examined and approved first, the company carries out its
operation and production only within the range and the valid period set in the related license.)
C. Registered capital: USD 160 million
D: Asset scale: RMB 2114.12 million
E: Net assets: RMB 1192.19 million
F: Net profits: RMB 31.70 million
G: Net profit influence over 10%:
Income of main businesses: RMB 1159.13 million
Cost of main business: RMB 1013.18 million10
03. Tsann Kuen (Zhangzhou) South Port Eletronics Enterprise Co., Ltd.
A. Business Type: Manufacturing;
B: Major Products and Services: Development, production and sale of small household electrical
appliances, new-type electronic appliances and parts (such as electrical kits, sensors and sensitive
transmitters), light industrial products, modern office supplies; designing and producing the molds
related to the above products; processing non-ferrous metal composite materials, new alloy materials,
sale of the products and semi-finished products made by the company. (excluding those products
restricted by the government or those whose import or export is controlled by license or quota; when
involved in those projects which need to be examined and approved first, the company carries out its
operation and production only within the range and the valid period set in the related license.)
C. Registered capital: RMB 5 million
D: Asset scale: RMB 14.11 million
E: Net assets: RMB 11.92 million
F: Net profits: RMB 0.62 million
04. Zhangzhou Tsann Kuen Secondary Vocational School
A. Business Type: education and training
B: Major Products and Services: secondary vocational education
C. Registered capital: RMB 0.5 million
D: Asset scale: RMB 3.13 million
E: Net assets: RMB 0.1 million
F: Net profits: RMB 10,000
05. Eupa (Hong Kong) Co. Ltd.
A. Business type: Comprehensive
B. Main products and services: taking trade orders, purchasing agent, R&D of small household
appliances, investment, market research
C. Registered capital: USD 2.90 million
D: Asset scale: RMB 5.65 million
E: Net assets: RMB 5.50 million
F: Net profits: RMB 0.18 million
06. Shanghai Canxing Commerce & Trade Co., Ltd.
A. Business type: sale of household appliances;
B. Main products and services: import, wholesale, retail and after-sales service of household
appliances, calculator and its parts, communication equipment, electrical and mechanical equipment,
office supplies and related auxiliary products (including kitchen supplies); and importing and
exporting various types of goods and technologies on our own and as a agent for others. (Where an
administrative license is required, such a license will be obtained before operation.)
C. Registered capital: RMB 5 million
D: Asset scale: RMB 22.47 million
E: Net assets: RMB 5.82 million
F: Net profits: RMB 0.46 million11
07. Xiamen Canxing International Traval Service Co., Ltd.
A. Business type: tourism;
B. Main products and services: inbound and domestic tourist services. (where an authority permit is
required, such a permit will be obtained before the Company’s operation.)
C. Registered capital: RMB 5 million
D. Asset scale: RMB 5.79 million
E: Net assets: RMB 4.31 million
F: Net profits: RMB -0.69 million
08. Xiamen Canxing Commerce & Trade Co., Ltd.
A. Business type: sale of household appliances
B. Main products and services: 1. wholesale and retail: daily necessities, household appliances,
computer and its auxiliary products, communication equipment, electrical and mechanical equipment,
office supplies, kitchen supplies and their auxiliary products; 2. import and export of various goods
and technologies (the catalog of the imported and exported goods is not available in this report),
excluding those whose import and export are restricted by the government. (where an authority
permit is required, such a permit will be obtained before the Company’s operation.)
C. Registered capital: RMB 5 million
D. Asset scale: RMB 5.52 million
E: Net assets: RMB 4.83 million
F: Net profits: RMB -0.18 million
09. Shanghai Fanxin Airlines Service Co., Ltd.
A. Business type: airlines service
B. Main products and services: ticket-selling and agent service in passenger transportation of civil
aviation for domestic routes, excluding HK, Macau and Taiwan routes. (where a license is required,
such a license would be obtained before the Company’s operation.)
C. Registered capital: RMB 0.5 million
D. Asset scale: RMB 0.21 million
E: Net assets: RMB 0.21 million
F: Net profits: RMB 012
4. In the report period, significant changes occurred in the asset composition and relevant expenses
compared with the same period of last year.
Unit: RMB’0000
Items 30 Jun.
2009
31 Dec.
2008
Increase/
decrease
(%)
Main reasons for changes
Prepaid accounts 176.01 891.08 -80.25% Some of the prepayments for materials last year were made in this
period.
Other
receivables 1,626.15 2,898.63 -43.90%
1. On 26 Mar. 2008, RMB 5 million was invested into Xiamen Canxing
International Travel Service Co., Ltd. But the company in question had
not been officially founded by then, the long-term investment item was
thus reclassified into the other receivables item in the same period of
last year. On 17 Feb. 2009, the said company was officially founded
and the relevant item was turned back under the item of long-term
investments.
2. The balance of export tax rebates in the same period of last year
amounted to RMB 4.05 million, with that of this period standing at
RMB 0.
Available-for-sal
e financial assets 18.69 10.98 70.25%
The held shares of Shanghai Join Buy Co., Ltd. which were not subject
to control, common control or significant influence belonged to the
available-for-sale financial assets. And the differences between their
fair value and book value were included in the capital reserves.
Long-term
receivables
10,470.0
1 6,848.79 52.87% This was due to the increase of income arising from selling equipments
in this period.
Long-term
borrowings 2,247.83 0.00 This was due to the increased credit borrowings in this period.
Notes payable 8,575.45 17,759.6
8 -51.71%
Affected by the financial crisis, the operation revenue decreased by
43.40% over the same period of last year, which led to the decrease of
the relevant item.
Accounts
payable
52,234.3
2
75,440.6
0 -30.76%
Affected by the financial crisis, the operation revenue decreased by
43.40% over the same period of last year, which led to the decrease of
the relevant item.
Other payables 23,807.7
5
39,625.4
0 -39.92% The matured loan of USD 17 million from the controlling shareholder
was paid off.
Long-term
borrowings 0.00 6,834.60 -100.00% The original long-term borrowing due in Jan. 2010 was reclassified to
the non-current liabilities due within 1 year.
Deferred income
tax liabilities 3.12 63.64 -95.09% The unrealised exchange over the same period of last year was
conductec in this period.
Converted
difference in
foreign currency
statements
(83.71) (53.99) -55.05%
This was due to the converted difference resulted from the fact that the
subsidiary Eupa (Hong Kong) Co. Ltd. adopted Hong Kong dollar as its
accounts-keeping unit.
Items
This
reported
period
Same
period of
last year
Increase/
decrease
(%)
Main reasons for changes
Operation
revenue
118,471.
93
209,296.
31 -43.40%
Affected by the financial crisis, the operation revenue decreased by
43.40% over the same period of last year, which led to the decrease of
the relevant items.
Operation cost 102,821.
49
192,600.
24 -46.61%
Affected by the financial crisis, the operation revenue decreased by
43.40% over the same period of last year, which led to the decrease of
the relevant items.
Financial
expenses 92.60 2,629.29 -96.48%
1. The matured loans were paid off, which cut the interest expense by
RMB 12.22 million;
2. Due to the fluctuation of exchange rate in the same period of last
year, an exchange loss of RMB 10.22 million was registered.
Asset
impairment loss (235.48) 217.79 -208.12% The asset impairment loss withdrawn in the same period of last year
was reversed.
Gains from fair
value changes (54.70) 498.51 -110.97%
This was due to the operation of forward exchange. And the loss was
resulted from the difference between the bank exchange rate and the
contractual exchange rate.
Gains from
investments (67.56) 3,772.16 -101.79% The forward exchange transactions that incurred loss were settled in
this period.
Non-operational
expenses 149.66 679.26 -77.97% This was due to the asset disposal loss and donation expense in the
same period of last year.
Income tax
expenses 160.98 717.29 -77.56% This was due to that the total profit in the reported period decreased by
31.04% compared to the same period of last year.
(II) Investment status
□Applicable √Inapplicable13
(III) Changes proposed by the Board of Directors to the business plan for the second half
□Applicable √Inapplicable
(IV) Significant related transaction resulted from co-investment with related parties
□Applicable √Inapplicable
(V) Cautions and explanations for the estimated loss of the accumulated net profit from the
year-begin to the end of the next reporting period or significant fluctuation compared with that of the
same period of the previous year
□Applicable √Inapplicable
(VI) Explanation of the Board of Directors on changes and handling of relevant events of the
Qualified Auditor’s Report produced by the CPA firm
□Applicable √Inapplicable
VI. Significant Events
(I) Corporate governance and rectification
By the end of 2008, the corporate governance of the Company had been faithfully adjusted to the
requirements of the relevant documents issued by CSRC.
(II) Significant lawsuits and arbitrations
□Applicable √Inapplicable
(III) Asset acquisition and sale and mergers of the Company in the reporting period
1. Asset acquisition
□Applicable √Inapplicable
2. Sale of asset
Tssan Kuen Zhangzhou Enterprise Co., Ltd., the Company’s holding subsidiary, invited some spare
parts plants into the Tssan Kuen Industrial Park, so as to focus on its core advantages of R&D,
design and sale, and reduce the proportion of the self-made spare parts. And the overal market
competitivenss of the Company would be strengthened for those more professional spare parts plants
in the industrial park could supply spare parts directly to Tssan Kuen Zhangzhou, which contributed
to a lower cost and a better quality; Meanwhile, such a move was able to reduce the proportion of the
occupied fixed assets and increase the overal turnover rate of assets, so as to ensure a steady and
sustained future development of the Company.
For more details, please refer to the Public Notice on Selling Some Operating Assets of Spare Parts
Plants by Holding Subsidiary Tssan Kuen Zhangzhou Enterprise Co., Ltd., the Public Notice on
Progress of Holding Subsidiary’s Selling Some Operating Assets of Spare Parts Plants and Another
Sale of Assets and the Public Notice on Progress of Holding Subsidiary’s Selling Some Operating
Assets of Spare Parts Plants and A Third Sale of Assets, alll published on Securities Times, Hong
Kong Ta Kung Pao and http://www.cninfo.com.cn dated respectively on 29 Jul. 2008, 21 Jan. 2009
and 28 Apr. 2009.
Due to the needs of the said spare parts plants in their actual operation, the plants purchased a small
quantity of equipments from the Company in the reported period, which was detailed as follows:14
Unit: RMB’0000
Transaction party Asset sold Date of sale Selling
price
Net profit
contributed to
the Company
by the sold
asset from
year-begin to
the date of sale
Gains
and
losses
due to
selling
the
asset
Whether a
related
transaction
or not
Explanatio
n on pricing
principle
Whether or not the
ownership of the
involved asset had
been transferred
whether or not the
relevant creditor’s
rights and liabilities
had been
transferred
Relationship
with the
Company
Xiamen Haoren Injection molding
equipment 2009.03.31 1,338.02 (32.47) (32.47)
Longhai Chaoda Electronic equipment 2009.03.31 434.68 (32.38) (32.38)
Xiamen Hanrun Injection molding
equipment 2009.02.28 122.42 11.54 11.54
Xiamen
Yuanquanxing
Injection molding
equipment 2009.03.31 103.66 13.29 13.29
Xiamen Yongxinghe Injection molding
equipment 2009.03.31 99.24 7.43 7.43
Zhangzhou Weidi Injection molding
equipment 2009.02.28 95.39 39.57 39.57
Xiamen Jinyuan Hardware equipment 2009.04.30 41.03 6.59 6.59
Longhai Fushun Injection molding
equipment 2009.04.30 18.85 2.03 2.03
Xiamen Yongkun Electronic equipment 2009.06.30 10.21 1.85 1.85
Zhangzhou Xinhui Hot iron equipment 2009.06.30 5.37 0.24 0.24
Xiamen Pinrui Hardware equipment 2009.04.30 3.19 0.23 0.23
Xiamen Xingrongfei Hardware equipment 2009.04.30 2.34 1.98 1.98
Xiamen Jingjing Die casting equipment 2009.05.31 894.28 (12.85) (12.85)
Xiamen Huadaxing Die casting equipment 2009.04.30 570.34 101.01 101.01
Xiamen Keid Bakelite equipment 2009.04.30 527.31 85.42 85.42
Fujian Hongyuan Die casting equipment 2009.02.28 482.50 69.22 69.22
Suzhou Yifeng Injection molding
equipment 2009.03.31 431.46 38.09 38.09
Zhangzhou Tianfeng Hardware equipment 2009.03.31 69.25 21.03 21.03
Zhangzhou
Shengliang Die casting equipment 2009.03.31 65.02 38.79 38.79
Xiamen Huyiming Electronic equipment 2009.04.30 33.87 6.35 6.35
Zhangzhou
Ruicheng Die casting equipment 2009.05.31 251.24 26.40 26.40
Zhangzhou Rijin Electronic equipment 2009.05.31 59.91 9.02 9.02
Longhai Yingfa Bakelite equipment 2009.06.30 58.96 13.96 13.96
Xiamen Bailong Hardware equipment 2009.06.30 0.27 0.24 0.24
Total 5,718.81 416.58 416.58
Non-related
company
The
transaction
prices were
decided
based on
the
principle of
being
above the
book value,
as well as
the
assessmen
t and
market
prices.
Yes Yes Non-related
company15
(IV) Significant contracts of the Company and their execution during the reporting period
□Applicable √Inapplicable
(V) Guarantees provided by the Company during the reporting period
Unit: (RMB)’0000
Guarantees provided for external parties (excluding guarantees provided for subsidiaries)
Name of the guaranteed
Date of
occurrence
Amount of
guarantee
Type of
guarantee
Term of
guarantee
Implementation
accomplished or not
Guarantee for
related parties or not
Total guarantees occurred in the reporting
period
0
Total balance of guarantee at period-end 0
Guarantees for subsidiaries
Total guarantees provided for subsidiaries in
the reporting period
40,034.81
Total balance of guarantee provided for
subsidiaries at period-end
22,259.98
Total guarantee amount of the Company (including guarantees for subsidiaries)
Total guarantee amount 22,259.98
Proportion of total guarantee amount in net
assets of the Company
61.20%
Among which:
Amount of guarantees provided for
shareholders, actual controller and other
related parties
0
Amount of debt guarantees provided directly
or indirectly for parties with asset-liability
ratio exceeding 70%
0
Proportion of total guarantee amount
exceeding 50% of the Company’s net assets
4,074.84
Total amount of the above three guarantees 4,074.84
Explanation on possibility of taking several
and joint liability involving immature
guarantees
Inapplicable
Special Statement and Independent Opinions of Independent Directors on Funds Occupation
By Controlling Shareholder and Other Related Parties and the Company’s External Guarantees
As Stated in Semi-Annual Report 2009
According to the Notice on the Regulations of Funds Transfer between Related Parties and Listed
Companies and its External Guarantee Behaviors issued by CSRC (No.[2003] 56), the Notice on the
Standardization of the External Guarantee Behaviors of Listed Companies (ZJF No. [2005] 120) and the
Explanations of Relevant Issues Concerning Implementing Document No. [2005] 120 (Department for
Listed Companies No. [2006] 25), as the independent directors of TSANN KUEN (CHINA)
ENTERPRISE CO. LTD, we have conscientiously and thoroughly examined the funds occupation by
controlling shareholder and other related parties and the Company’s external guarantees as stated in the
Semi-Annual Report 2009, and expressed our special statement and independent opinions as follows:
Special statement of independent directors:16
1. By 30 Jun. 2009, it had been found that the controlling shareholder and other related parties occupied
no funds of the listed company, and that the funds transfer between the Company and its related parties
were all resulted from daily operation and sale.
2. By 30 Jun. 2009, the listed Company had accumulatively provided a guarantee totalling RMB
400,348,100 to its controlling subsidiary Tsann Kuen Zhangzhou Enterprise Co., Ltd., with the balance
of guarantee standing at RMB 222,599,800. And the Company and its controlling subsidiary provided
no guarantees for external parties during the reporting period.
Opinions of independent directors:
1. Although there were only operational funds transfer between the controlling shareholder, other related
parties and the Company, the listed Company still would pay sufficient attention to the Circular on
Regulating Funds Transfer between the Listed Companies and Related Parties and External Guarantee of
Listed Companies (ZJF [2003] No. 56), and avoid non-operational funds occupation from occuring;
Meanwhile, the operational funds transfer would also be made to keep in line with the market
requirement and fair pricing. Besides, the Company would minimize its transactions with related parties,
and ensure the legitimacy of the operational transactions with controlling shareholders and other related
parties so as to safeguard the rights and interests of minority shareholders.
2. Although the balance of guarantee at the year-begin saw a reduction from RMB 314,507,500 to the
present RMB 222,599,800 and the guarantees involved were all provided by the listed Company for its
controlling subsidiaries, the Company still, according to the Circular on Regulating Funds Transfer
between the Listed Companies and Related Parties and External Guarantee of Listed Companies (ZJF
[2003] No. 56), continued to ask its controlling subsidiary to take effective measures and reduce the
guarantee amount step by step, so as to minimize the Company’s risk of contingent liabilities. If there
was any external guarantee in the future, the Company must go through the necessary approval
procedure in strict compliance with the Circular on Regulating the Behaviors of External Guarantee in
Listed Companies (ZJF [2005] No. 120) and the Explanation on Relevant Issues about Implementing
ZJF No. 120 Document ( Department of Listed Companies, Document [2006] No. 25). Furthermore, the
Company should draft the contingency plan to protect the shareholders’ right and interests from the risks
arising from possible financial liquidity difficulties of the guaranteed controlling subsidiary.
3. Any information that had a significant impact on the Company’s finance will be disclosed on time to
protect the interests of minority shareholders.
Independent Directors: Lu Jianxin, Xu Rentang, Ge Xiaoping
10 Jul. 2009
(VI) Significant related transactions:
1. For the related transactions incurred in the reporting period, please refer to the Notes to the financial
statements.
2. All transactions with the related parties were priced according to the Pricing Agreement for Related
Companies’ Transactions issued by the State Tax Bureau, as well as the principle of fair transaction in
the relevant trade.
3. The mode of payment was decided by the contracts signed by both parties.
4. Explanation on necessity and consistency of related transactions: to enhance efficiency of upright
integration in the group, adopt unified purchase, cut the cost and increase the market share with the help
of related companies planted all over the world.
(VII) Implementation of commitments made by shareholders holding over 5% shares
□Applicable √Inapplicable17
(VIII) Implementation of related transactions arising from routine operation in the reporting period
Unit: (RMB) Yuan
Transaction
Nature
Name of related parties Transaction Type
Total amount in
2009
Total amount
from Jan.-Jun.
2009
Proportio
n
Raw material 68,440,000.00 18,372,929.16 26.85%
Tsann Kuen (Taiwan) Enterprise Co., Ltd. Machinery
equipment / Mold
10,810,000.00 1,277,645.01 11.82%
TSANN KUEN JAPAN CO., LTD. Raw material 0.00 604,590.03
Purchase
Thermaster Electronic (Xiamen) Ltd. Raw material 61,090,000.00 22,470,088.03 36.78%
Tsann Kuen (Taiwan) Enterprise Co., Ltd. Finished goods 84,700,000.00 34,435,924.06 40.66%
Sale TSANN KUEN JAPAN CO., LTD. Finished goods 278,240,000.00 116,360,731.09 41.82%
Thermaster Electronic (Xiamen) Ltd. Raw material 58,000.00 20,423.23 35.21%
Offering
labor
service
Thermaster Electronic (Xiamen) Ltd. Consulting service 2,640,000.00 889,603.50 33.70%
Tsann Kuen (Taiwan) Enterprise Co., Ltd. Technical service 16,000,000.00 7,601,361.22 47.51%
Tsann Kuen (Taiwan) Enterprise Co., Ltd. Service charge 3,960,000.00 1,000,104.12 25.26%
Tsann Kuen (Taiwan) Enterprise Co., Ltd. Consulting service 3,000,000.00 0.00 0.00%
TSANN KUEN JAPAN CO., LTD. Commission 12,300,000.00 5,233,549.98 42.55%
Receiving
labor
service
TSANN KUEN USA INC Commission 1,200,000.00 646,779.34 53.90%
(IX ) Explanation on receiving investigation from CSRC in 2007
On Apr. 26, 2007, the Company received the Notice of Investigation (XDCT Zi No. 0701) from CSRC
for the Company was “suspected of violating securities regulations”. For detailed information, please
refer to the Public Notice on Investigation from CSRC disclosed on Securites Times, Hong Kong Ta
Kung Pao and http://www.cninfo.com.cn dated 27 Apr. 2007; At present, the investigation has been
almost finished and the Company will disclose the relevant information in time according to rules and
regulations as soon as the result of CSRC investigation comes out.18
(X) Researches, interviews and visits in the reporting period
In the reporting period, according to Guidelines on Fair Information Disclosure of Listed Companies,
the Company and the staff in charge of relevant information disclosure strictly followed the principle of
fair information disclosure by not treating visitors differently, or leaking undisclosed information of the
Company to any particular party privately or selectively. The details were as follows:
Reception time Reception place Reception way Visitor Main discussion and materials provided
9 Jan.2009 By telephone Mr. Zhang Operation status of the Company
15 Jan. 2009 By telephone Mr. Zhou Operation status of the Company
13 Feb. 2009 By telephone Ms. Lin Operation status of the Company
16 Feb. 2009 By telephone Ms. Chen Operation status of the Company
18 Feb. 2009 By telephone Mr. Luo Date of annual report disclosure
18 Feb. 2009 By telephone Mr. Liu Operation status of the Company
25 Feb. 2009 By telephone Mr. Wang Date of annual report disclosure
2 Mar. 2009 By telephone Mr. Chen Operation status of the Company
11 Mar. 2009 By telephone Mr. Cai Operation status of the Company
11 Mar. 2009 By telephone Mr. Li Operation status of the Company
13 Mar. 2009 By telephone Mr. Huang Operation status of the Company
19 Mar. 2009 By telephone Ms. Gao Operation status of the Company
27 Mar. 2009 By telephone Mr. Lin Operation status of the Company
10 Apr. 2009 By telephone Mr. Tang Operation status of the Company
10 Apr. 2009 By telephone Mr. He Operation status of the Company
16 Apr. 2009 By telephone Mr. Tang Operation status of the Company
5 May 2009 By telephone Mr. Feng Operation status of the Company
13 May 2009 By telephone Mr. Xie Operation status of the Company
8 Jun. 2009 By telephone Ms. Li Operation status of the Company
(XI) Other significant matters: Inapplicable
VII. Financial Report (Refer to Attachment)
(I) Auditor’s opinion
Financial Report √Un-audited □Audited
Auditors’ Report □ Non-qualified audit report □ Qualified audit report
Un-audited19
(II) Accounting statements
1. Balance sheet
2. Income statement
3. Cash flow statement
4. Statement of owners’ equity
VIII. Documents Available for Reference
(I) The Financial statements with signatures and seals of the legal representative, person in charge of
accounting work, person in charge of accounting organization and the statement producer.
(II) All the company’s documents and announcement originals that were publicly disclosed during the
report period on the newspapers designated by CSRC.
(III) Articles of Association of the Company.
(IV) The above-mentioned documents are placed in the secretary office of the Board of Directors.
Tsann Kuen (China) Enterprise Co., Ltd.
Chairman of the Board: Jian Derong
1 Aug. 200920
Tsann Kuen (China) Enterprise Co. Ltd
Notes to Consolidated Financial Statements
As of 30 June 2009
（All amounts are expressed in RMB Yuan unless otherwise stated）
I. General
1. Company’s history
Tsann Kuen (China) Enterprise Co., Ltd. (“the Company or TKC”) was established by Fordchee
Development Ltd, EUPA Industry Corporation Ltd and Fillman Investments Ltd. in the People’s
Republic of China (“the PRC”) in 1988 under the name of Tsann Kuen China (Xiamen) Ltd. as a wholly
owned foreign investment enterprise. On 16 February 1993, with the approval of the Ministry of Foreign
Trade and Economic Co-operation, the Company was reorganized into a joint stock company limited by
shares and was renamed as Tsann Kuen (China) Enterprise Co., Ltd. In June 1993, the Company issued
40,000,000 new shares pursuant to an international placing and public offer and these new shares (“B
shares”) were then listed on the Shenzhen Stock Exchange on 30 June 1993. Until 30 June 2009, the
Company’s registered capital is RMB 1,112,350,077, B shares among the total shares issued on the
Shenzhen Stock Exchange.
Follow The Ministry of Commerce of the People’s Republic of China approved （The No. [2005]3107
号《商务部关于原则同意厦门灿坤实业股份有限公司发起人股上市流通的批复》）, On 6 December
2006, the Group received [2006] No.266 file 《关于核准厦门灿坤实业股份有限公司非上市外资股上
市流通的通知》from China Securities Regulatory Commission. China Securities Regulatory
Commission agreed 700,476,830 unlisted shares (62.97% paid in capital of the Group) hold by three
shareholders, EUPA Industry Corporation Ltd, Fordchee Development Limited and Fillman Investment
Limited to transfer into B shares. One year after 29 November 2007 these B shares could be listed and
exercised on Shenzhen Stock Exchange.
2. The industry
The Company operates within the electrical machinery and equipment manufacturing industry.
3. Scope of business
The Company approved business scope: the main business is to develop, produce and sell household
appliances, electronics, light industrial products, modern office supplies. Those subsidiary’s main
business is to produce household appliances, electronics, light industrial products, sell products by
wholesale, distribution appliances, communication equipment, electrical equipment, office equipment,
computer accessories, general merchandise and food; Design, produce and sell Precision (Punching) Die,
Precision Mold Cavity, and Model Standard Unit, engaged in the research and development of those
products.
4. Main changes
The Company has no major changes within reporting period.
II. Basis for preparation
The company and its subsidiaries maintain their accounting record and prepare their statutory financial
statement base on the assumption of going concern, accordance to transaction and item’s substance and
economic reality, and according to the New Accounting Standard for Business Enterprise issued by the
Ministry of Finance on 15 February 2006, and also accordance to those Accounting policy and
Accounting estimate that described in part four of this FS notes.21
III. Declaration of Compliance with the Enterprise Accounting Standards
The Company’s financial statements prepared follow the requirements of the Accounting Standards for
Business Enterprise promulgated by the Ministry of Finance; fairly and completely present the financial
position, operation result and cash flows, and other relevant information of the Company.
IV. Summary of Significant accounting policies and accounting estimates and methods of
consolidation
(1) Accounting Year
The Company employs a period of calendar days from January 1 to December 31 each year as
accounting year.
(2) Presentation currency
The Company’s presentation currency is Renminbi (“RMB”).
(3) Record-keeping basis and measurement characters
The Company is to use accrual basis as record-keeping basis for accounting recognition, measurement
and reporting.
The Company commonly measures accounting factors by historical cost method; the determined
accounting factor amount can be obtained or reliably measured, then replacement cost, net realizable
value, net value and fair value method may be employed for some individual accounting factors.
During the reporting period, with the fair value measurement and the changes are included in the current
profits and losses of the financial assets and financial liabilities, available for sale financial assets and
financial derivatives in the fair value measurement; Those inventories and fixed assets are measured by
present value of purchase price, when purchasing payment is delayed beyond the normal credit
conditions of inventories, fixed assets to the current value of the purchase price measurement; The
inventory with impairment loss is measured by net realizable value, and other assets with impairment
loss are measured by recoverable amount(which is higher of fair value or present value).Other financial
statements items are measured by historical cost.
By using historical cost method, assets are accounted for on the basis of cash or cash equivalents paid, or
fair value of the considerations paid when are acquired. The liabilities are accounted for on the basis of
amount actually received or asset amount for performing current obligations, or contract amount for
performing the current obligations, or expected cash or cash equivalent amount paid to repay the debts
in daily activities.
There is no change in measure characters of financial statement items during the reporting period.
(4) Standard of cash equivalents
The cash equivalents is that cash equivalents of the company include investment with short term (it
usually expires within three months from the purchase date), highly liquidity, easy to convert into
known amount of cash, and low-risk of changes in value.
(5) Foreign currency transactions
1 Foreign currency transactions
The Company’s foreign currency transactions are translated into presentation currency at spot exchange
rates (Usually refers to the middle rate of the exchange price quotation that announced by the People's
bank of China) prevailing on the day in which the transactions take place.
On balance sheet date, those foreign currency items to use in such currencies are translated at the rates
prevailing on the balance sheet date. The exchange gains and losses arising on the exchange are included
in profit and loss for the year. With historical cost measurement of foreign currency non-monetary items,
the transaction is translated at the spot exchange rate, without changing its presentation currency amount.
In the fair value measurement of foreign currency non-monetary items, translated at the spot exchange
rate at that day when the fair value can be determined, the difference between amount after convert into
presentation currency and the original presentation currency amount, as the changes in the fair value, in
the current profits and losses.22
2 Translation of financial statement denominated in foreign currency
1) Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are restated
into the reporting currency using the spot exchange rates at that date. Among the equity items, all items
are translated into reporting currency at spot exchange rates on the occurrence date in which the
transactions take place except for the item of retained earnings.
2) Income and expense listed in the Income Statement are translated into reporting currency at average
spot exchange rate on the occurrence date.
The exchange difference from translation of financial statements denominated in foreign currency is
included in the equity and presented individually.
3) Cash Flow Statement items are restated into the reporting currency using the spot exchange rates on
the day in which the cash flow take place. As reconciling items, impact on cash due to exchange rate
change is presented individually in the Cash Flow Statement.
(6)Financial Instruments: Recognition and Measurement
1 Confirmation of financial instruments
When the Company became party to a contract of financial instruments, related financial assets or
financial liabilities are recognized.
2 Classification of financial assets and financial liabilities
The Company in accordance with the investment purpose and economic substance of the ownership of
financial assets are divided into four category, which is fair value through profit or loss;
Held-to-maturity investments; Loans and receivables; Available-for-sale financial assets.
According to the economic substance those financial liabilities are divided into fair value through profit
or loss and others.
1) Financial assets or financial liabilities at fair value through profit or loss: including held for trading
financial assets or financial liabilities and designated by the company as at fair value through profit or
loss.
A financial asset or financial liability is classified as held for trading if it is:
(i) Acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
(ii) Part of a portfolio of identified financial instruments that are managed together and for which there
is evidence of a recent actual pattern of short-term profit-taking; or
(iii) A derivative (except for a derivative that is a designated and effective hedging instrument, a
derivative of financial guarantee contract, a derivative that settle by equity instrument, which the price
of instrument could not be quoted in active market and the fair value could not measure reasonably).
A financial asset or financial liability is classified as designated if it is:
(i) The designation can be eliminated or significantly reduced the inconsistent situation or relate profit
and loss cause by different measurement basis of financial assets and financial liabilities;
(ii) Company risk management or investment strategy has been enshrined in a formal written document
that the financial assets portfolio, the financial liabilities portfolio, or the financial assets and financial
liabilities portfolio are management in fair value-based and evaluation and report to key management
person.
2) Held-to-maturity investments: are non-derivative financial assets with fixed or determinable
payments and fixed maturity that company has the positive intention and ability to hold to maturity.
Mainly include the company's management has a clear intention and ability to hold to maturity of
fixed-rate bonds, floating-rate corporate bonds.
3) Receivables: are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. Receivables of the Company mainly refer to the Company's sales of goods
or rendering of services to form the accounts receivable and other receivables.23
4) Available-for-sale financial assets: are those non-derivative financial assets that are designated as
available for sale at initial recognized, or those asset are not measured in fair value based and through to
profit and loss (a) loans and receivables, (b) held-to-maturity investments ,(c) financial assets.
5) Other financial liabilities: financial liabilities not divided into measurement in fair value base and
through into profit and loss account.
3 Measurement of financial assets and financial liabilities
When a financial asset or financial liability is recognized initially, the company shall measure it at its
fair value. For financial assets or financial liabilities at fair value through profit or loss, transaction costs
that are directly attributable to current profit and loss; for other types of financial assets or financial
liabilities, transaction costs related to the amount included in the initial confirmation.
Subsequent measurement of financial assets and financial liabilities:
1) Financial assets or financial liabilities at fair value through profit or loss measured at its fair value, at
balance sheet date, the changes of fair value are accounted for profit and loss in current period.
2) Held-to-maturity investments, which shall be measured at amortized cost using the effective interest
method, its termination confirmation, impairment or amortization profit or loss included in the profit and
loss account.
3) Loans and receivables, which shall be measured at amortized cost using the effective interest method,
its termination confirmation, impairment or amortization profit or loss included in the profit and loss
account.
4) Available-for-sale financial assets, are measured with fair value, any changes of fair value of
available-for-sale financial assets at the end of period are accounted for capital reserve (other capital
reserve). Disposal of available-for-sale financial assets, the difference between consideration received
and the book value of financial assets including into investment income; at the same time, turn out the
original cumulative amount of corresponding part within the equity, included into investment profit. The
impairment losses and Exchange differences of foreign monetary financial assets including into current
profit and loss. Interest received and cash dividends received during the period held are recognized as
investment income.
5) Other financial liabilities, measured at amortized cost using the effective interest method. Its
termination confirmation, impairment or amortization profit or loss included in the profit and loss
account.
The financial guarantee contract is not belong to financial liabilities designated by the company as at fair
value through profit or loss, as well as the loan commitment is not belong to financial liabilities
designated by the company as at fair value through profit or loss and below-market rate, After initial
recognition, measured higher of ： 1 、amount confirmed by < Enterprise Accounting Standard
13--Provisions, Contingent Liabilities and Contingent Assets>；Initial recognition amount minus the
balance of the accumulated amortization refer to .
Other financial liabilities, which shall be measured at amortized cost using the effective interest method,
its termination confirmation or amortization profit or loss included in the profit and loss account.
6）Fair value: It’s the amount for which an asset could be exchanged or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction. In a fair deal, the transaction should the
two sides are continuing operations enterprises, do not intend to carry out the liquidation, a major
reduction in scale of operation, or under adverse conditions is still trading. The existence of an active
market of financial assets or financial liabilities, the quotation within the active market should be used to
determine its fair value. If there is no active market, company should adopt valuation techniques to
determine the fair value.24
7) The amortized cost of a financial asset or financial liability： it’s the amount at which the financial
asset or financial liability is measured at initial recognition minus principal repayments, plus or minus
the cumulative amortization using the effective interest method of any difference between that initial
amount and the maturity amount, and minus any reduction (directly or through the use of an allowance
account) for impairment or unrecoverable.
8）The effective interest method: It’s a method of using effective interest calculating the amortized cost
of a financial asset or a financial liability (or group of financial assets or financial liabilities) and of
allocating the interest income or interest expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimated future cash payments or receipts through the expected life of the
financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial
asset or financial liability. Then calculating the effective interest rate, company shall estimate cash flows
considering all contractual terms of the financial instrument (for example, prepayment, call and similar
options) but shall not consider future credit losses.
4 Transfers and derecognize of financial assets
(1) Derecognize financial asset if, and only if, meets one of the following three conditions:
1) the contractual rights to the cash flows from the financial basset expire;
2) the financial assets have been transferred, and the ownership of financial assets of almost all the risks
and rewards transfer to other party;
3) The financial assets have been transferred, but the company neither retains the ownership of financial
assets of almost all the risks and rewards, nor gives up control of the financial assets.
(2) When derecognize condition of entire transferred assets has been satisfied, the differences between
the amounts of following two items shall be accounted for profits and losses of current period.
1) The book value of transferred financial assets;
2) The sum of consideration received from the transfer, and the accumulative amount of the changes of
the fair value originally recorded in the shareholders’ equities (in the event that the financial asset
involved in the transfer is a financial asset available-for-sale)
(3) If the transfer of partial financial assets satisfies the conditions of derecognize the entire book value
of the transferred financial asset shall, between the portion whose derecognize and the recognized
portion (under such circumstance, the service asset retained shall be deemed as a portion of financial
asset whose derecognize), be apportioned according to their respective relative fair value, and the
difference between the amounts of the following two items shall be accounted for the profits and losses
of the current period .
1) The portion book value derecognized;
2) The sum of consideration of the portion whose derecognize and the portion of accumulative amount
of the changes in the fair value originally recorded in the shareholders’ equity which is corresponding to
the portion whose derecognized ( in the event that the financial assets involved in the transfer is a
financial assets available-for-sale).
(4) If the Company fails to satisfy the conditions of derecognize for transferred financial assets, it shall
continue to recognize the entire financial assets to be transferred and shall recognize the consideration it
receives as a financial liability.
5 Impairment of financial assets
The Company assesses the financial assets that carry at fair value, and those financial assets which
changes of fair value are recognized in profit and loss accounts at the balance sheet date. If there is
objective evidence that the one or several financial assets are impaired, the Company shall determine the
amount of any impairment loss.25
(1) Accounts receivable (including account receivable and other receivables)
At the end of the period, those individual accounts receivable and individual other receivable make up
more than 10% (include 10%) is considered as individual significant amounts, One by one to carry out
impairment test, if there is objective evidence that the accounts receivable have been impaired, the
impairment loss shall be recognized based on the difference of the book values higher than the present
value of future cash flows.
At the end of the period, for those individual accounts receivable with not significant amounts, if there is
objective evidence that the accounts receivable have been impaired, recognize impairment loss alone.
For other individual the amount of non-significant receivables, classification primarily on the basis of
account age, and those accounts receivable’s account age more than one year will be classified as
non-significant in amount but in accordance with the characteristics of credit risk portfolio, the risk of
the portfolio is high, others classified as other non-significant receivables. For those account receivables
classified as non-significant in amount but in accordance with the characteristics of credit risk portfolio,
the risk of the portfolio is high, as well as other individual non-significant receivable accounts that not
impaired after impairment test, these account receivables will carry out age analysis by the company and
consider the debtor’s actual business situation and cash flow to determine the recoverable amount of
receivables, a reasonable estimate of bad debts.
On the basis of the actual loss rate of receivable accounts, with same or similar credit risk characteristics
of accounts receivable package in previous year, the Company also considers current situation and
determine the percentage of bad debt provision.
Age Percentage
1-90days 0
91-180days 10
181-270days 30
271-360days 50
Over 360 days 100
(2) Long-term accounts receivable
Long-term accounts receivable shall be made collection on the date of receipt in accordance with the
Contract, whose aging shall be measured at the expiration of the day of receipt. Combining to the
current situation, the provision for bad debts of the long-term accounts receivable combination shall be
withdrawn at the following proportion:
Before deadline of collection: 0%
1-60 days: 10%
61-120 days: 30%
121-180 days: 50%
Over 181 days: 100%
Account receivable between the company and related party do not calculate bad debt provision.
(2) Held-to-maturity investment
At the balance sheet date, if there is objective evidence that the investment have been impaired calculate
and recognize the impairment loss, based on the difference between the asset’s carrying amount and the
present value of future cash flows. The measurement of impairment loss of held-to-maturity investment,
please refer to impairment loss treatment of accounts receivable.
(3) Available-for-sale financial assets
At the balance sheet date, the Company will test and analyze the impairment situation of the
available-for-sale financial assets, and analyze whether the fair value of the financial assets continued to
decline. If there is objective evidence that available-for-sale financial assets have significant depreciated,
or after considering various relevant factors, this downward tendency is deemed as not temporary, the26
impairment loss shall be recognized, record into current profit and loss. When recognize the impairment
loss, the previously recognized impairment loss within the fair value of equity shall be reversed, record
into current profit and loss.
In a subsequent period, objective evidence that fair value has increased to exist, and relevant the matters
that after original impairment loss recognized, the previously recognized impairment loss shall be
reversed. However, for those investments that no active market as well as whose fair value cannot be
measured accurately, or those derivative financial assets that should be linked with the equity
instruments and settlement must through pay the equity instruments, as well as does not have control,
joint control or significant influence, there is no active market and fair value measurement is not
reliable , all of those type of long-term equity investment, whose impairment loss occurred, cannot be
reversed.
(7) Inventory: Recognition and Measurement
1. Inventory of the Company refers to enterprises in the day-to-day activities of the holder for the sale of
finished goods or merchandise, product that in the production process, and materials consumed in the
production process or provision of services. Inventories category: materials in transit, raw materials,
work-in-process, finished goods, and low-value consumable supplies.
2. Inventories stock physical count system：perpetual inventory method.
3. Valuation methods of inventories input and output: Inventories are calculated at actual costs when
acquire. Inventories costs include purchasing costs, processing costs and other costs. The issue of
inventories is calculated by the weighted average method. The company's inventories costs adopt
planned cost in the day-to-day accounting, over carrying the cost differences at the ending period, and
adjust planned cost to actual cost.
4. Low-value consumable products amortization method ：The low–value consumable supplies are
amortized at one time.
5. Impairment loss of inventories
At the balance sheet date, the evaluation criteria should base on the lower value between costs and net
realizable value. When net realizable values are lower than costs, provision for impairment loss of
inventories shall be made. Under normal circumstances, the Company provision impairment loss in
according to individual inventory items, for large quantity and low-unit-price inventories, provision for
impairment loss of inventories shall be made based on the category of inventories; for those inventories
that relating to the same product line that have similar purposes or end uses, are produced and marketed
in the same geographical area, and cannot be practicably evaluated separately from other items in that
product line, their impairment loss provision shall be consolidated.
When the circumstances that previously caused inventories to be written down below cost no longer
exist or when there is clear evidence of an increase in net realizable value because of changed economic
circumstances, the amount of the write-down is reversed (i.e. the reversal is limited to the amount of the
original write-down) so that the new carrying amount is the lower of the cost and the revised net
realizable value. The amount reversed recording into current profit and loss.
Estimates of net realizable value: Those stocks used for directly sale, for example: finished goods,
merchandise and materials used for sale etc., the net realizable value is referred to the estimated selling
price minus the estimated selling expenses and related tax and fees in normal operating process. Those
stocks need to process; the net realizable value is referred to the estimated selling price minus the
estimated finished cost and estimated selling expenses and related tax and fees in normal operating
process; the net realizable value of the quantity of inventory held to satisfy firm sales or service
contracts is based on the contract price. If the sales contracts are for less than the inventory quantities
held, the net realisable value of the excess is based on general selling prices.27
(8) Long-term Equity Investment
Long-term equity investment including the equity investments held by the company, who can able to
exercise control, joint control or significant influence to the invested entity, or the company do not have
control, joint control or significant influence on the invested entity, and there is no active market
quotation, the fair value measurement should not reliable.
1. Initial measurement
The Company separates the following two cases of long-term equity investment in the initial
measurement:
(1) Long-term equity investment obtained through business combinations:
1) For obtaining subsidiary under common control, the consideration cost can be cash payment,
non-monetary assets transfer or taking over the subsidiary’s liability. Under this situation, the initial
investment cost is carrying amount of shareholder’s equity of the subsidiary on the merger date. The
difference between the carrying amount of the net assets obtained and initial investment cost of
long-term equity investment shall be adjusted to capital reserve. If the capital reserve is not sufficient to
absorb the difference, any excess shall be adjusted against retained earnings. In the case of company
issues equity securities as the consideration, the initial investment cost is carrying amount of
shareholder’s equity of the subsidiary on the merger date. If the book value amount of the issued shares
is deemed as the capital, the difference between the carrying amount of the issued shares and initial
investment cost of long-term equity investment shall be adjusted to capital reserve. If the capital reserve
is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings All direct
expenses related to the merger, including the auditor fee, evaluation expense, legal service expense, etc
will be accrued to the current profit and loss.
2) For obtaining subsidiary not under common control, the cost of long-term equity investment is fair
value of assets paid or liabilities undertaken by the Company. Where the cost of a business combination
exceeds the acquirer’s interest in the fair value of the bargainor’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 bargainor’s identifiable net assets, after reassessment, the difference shall be recognized
in profit or loss for the current period (non-operating income). The costs directly related to business
combinations shall be included in the cost of business combinations (except issuing expenses of bonds
and equity instruments).
(2) Other types of long-term equity investment, accordance with the following principles to determine
their initial investment costs:
1) Long-term equity investment, which is acquired by cash consideration, the actual cash payment
amount will be deemed as the initial investment cost. The initial investment cost includes the direct
expenses related to the long-term equity investment, taxes and other necessary expenses. But if the
actual payment contains cash dividend that has not been received but has been announced, that should
be accounted separately.
2) Long-term equity investment, which is acquired by issuing equity securities, the fair value of the
issued equity will be deemed as the initial investment cost.
3) For the long-term equity investment made by the investors, the values agreed in the investment
contracts or agreements will be deemed as the initial investment cost, except that the contracts or
agreements provide that the values are not fair.
4) Long-term equity investment is acquired by exchange of non-monetary assets, if this transaction has
commercial substance or the fair values of exchange assets can be reliably measured, the fair values of
these assets and relevant taxes will be deemed as the initial investment cost; the difference between the
fair values of the assets and book values will be record into the current profit and loss; if the28
non-currency asset exchange does not satisfy these two conditions mention above, the book values of the
assets and relevant taxes will be deemed as the initial investment cost.
5) Long-term equity investment, which is acquired by the debt restructuring, the fair values of the
obtained equities will be deemed as the initial investment cost; the difference between the initial
investment cost and book values of credit will be record into the current profit and loss.
2. Subsequent Measurement
The cost method is employed to calculate the long-term equity investment of subsidiaries and will be
adjusted in accordance with the equity method in the preparation of the consolidated financial
statements.
The company uses cost method for the following conditions: a long-term equity investment where the
investing enterprise does not have joint control or significant influence over the investee, the investment
is not quoted in an active market and its fair value can’t be reliably measured.
When an investing enterprise can exercise joint control or significant influence over the investee, a
long-term equity investment cost shall be treated as a recovery of initial investment cost.
(1) Long-term equity investment measured at cost method
Such long-term equity investments as investment of the Company that is able to control the invested
enterprise, or investment of the Company that does not do joint control or does not have significant
influences on the invested entity, and entity, and has no offer in the active market and its fair value
cannot be reliably measured shall be measured by employing the cost method. The price of a long-term
equity investment measured by employing the cost method shall be included at its initial investment cost.
If there are additional investments or disinvestments, the cost of the long-term equity investment shall be
adjusted. As for long-term equity investment measured by employing the cost method, investing
enterprise shall, in accordance with the attributable share of the cash dividends or profits declared to
distribute by the invested entity, recognized investment income except for the purchase cost which is
actually paid when obtaining investment or cash dividend and profit which has been declared but not to
be distributed included in the consideration. The investment of the Company that is able to control the
invested enterprise shall be adjusted at the equity method when the Company prepared the consolidated
financial statement.
2) When using equity method, after the investing enterprise has acquired a long-term equity investment,
it shall recognize its share of net profits or losses made by the investee as investment income or losses,
and adjust the carrying amount of the investment accordingly.
Base on the investee’s book value of net profit, if the investee used inconsistent accounting policies with
the company, the company shall adjust the net profits by the balances of the depreciation or amortization
of the investee’s fixed assets and intangible assets measured by fair value on the investment acquired
date, as well as adjust the net profits by the balance of the impairment losses of investee’s assets
measured by fair value on the investment acquired date. Set off the internal transaction profit and loss
between the company and the joint enterprises or the jointly-run enterprises, and then recognize the
investment profit or loss on this basis.
The internal transaction profit and loss between the company and the joint enterprises or the jointly-run
enterprises, refer to the < Enterprise Accounting Standard 8: Impairment of assets>, belong to asset
impairment loss is recognized in full.
If an investor’s share of losses of an associate equals or exceeds its interest in the associate, the investor
discontinues recognizing its share of further losses, after the investor’s interest is reduced to zero,
additional losses are provided for, and a liability is recognized, only to the extent that the investor has
incurred legal or constructive obligations or made payments on behalf of the associate; If the associate
subsequently reports profits, the investor resumes recognizing its share of those profits only after its
share of the profits equals the share of losses not recognized, restore long-term investment interests, and29
in the book value of the long-term equity investment.
(9) Investment property: Recognition and Measurement
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.
Property investment is measured by cost model, according to its expected useful life and net residual
rate on buildings and land-use right to calculate depreciation or amortization. The company’s expected
useful life, net residual rate and annual depreciation rate of investment property as follow:
Categories Expected residual Expected useful Annual depreciation
rate% life(years) (amortization) rate %
Housing and
building 10 20 4.50
Land use right 0 20, 40, 50 5.00, 2.50, 2.00
The balance sheet date, there are indications that the investment property has impairment, refer
(10) Recognize and Measurement of Fixed Asset
1. Fixed asset are tangible asset that have characteristic simultaneity
①Are held for use in production or supply of goods or services, for rental to others, or for administrative
purpose;
②Have useful lives more than one accounting year.
2. Fixed assets shall be recognized if they meet the following conditions:
(a) The economic benefits related to fixed asset probably flows to the enterprise;
(b) The cost of fixed asset may be reliably measured.
The expenses relate meet above condition to fixed asset would be capitalized in the cost of asset, if not,
it would be recognize as expense in profit and loss account of that period.
3. Fixed assets shall be initially measured at cost. Asset acquire through financial lease would be
measured in the lower of its fair value at the date of lease begin or the present value of the minimum
lease payment, and depreciate according to the depreciation accounting policy.
4. The category and depreciation method of fixed assets
Straight-line method is in used to calculate the depreciation of fixed assets (including finance leased
fixed assets). The estimated useful lives, expected residual value and annual depreciation rate of various
types fixed assets are listed as follows:
Category Residual value rate Estimated useful life Annual depreciation rate
(%) (years) (%)
Housing
and building 10 20 4.50
Machineries Furniture and
Equipments 0 11-18 5.56-9.09
Electronic device and
Modules 0 6 16.67
Vehicles 0 6 16.67
Maintenance expense
of leased fixed assets 0 the shorter lease term and beneficial lives
5. Fixed asset would be treats as idle asset because of lack of working hours (except season reason) or
nature disaster cause the asset unused for 6 months. The idle asset is depreciated as the same with other
fixed asset that in the similar characteristic.
6. If there is evidence provide that the value of fixed asset are decreased on each balance sheet date, the
method of provision for the decrease value would according the method of this notes in No.1430
impairment of assets.
(11) Construction in progress
1. The construction project should meet the condition of inflow of future economic benefit; the cost
could be measured reliable simultaneity. The cost would be measured in the project is substantially
ready for its intend use
2. Construction in progress is transferred to fixed assets when the project is substantially ready for its
intended use. The project is in condition of ready for used but not transact in the final account would be
transferred to fixed assets in its estimate value, and adjust the value after transact in the final account,
but would not adjust depreciated value that have been depreciated.
3. If there is evidence provide that the value of project are decreased on each balance sheet date, the
method of provision for the decrease value would according the method of this notes in No.14
impairment of assets.
(12) Recognize and measurement of intangible asset
1. Intangible asset are recognize initially at cost.
2. Period of intangible asset that could bring future economic benefit inflow to company could
determined reasonably according to the judgment according to reason of contract right or other legal
right, condition in same industry, history experience, and demonstrate of expert would be recognize as
finite useful years asset. Otherwise, the asset would be recognize as infinite useful years asset.
3. To estimate the life of finite useful years asset would consider factor of:
The life cycle of the asset to produce product, and the information of similar asset;
The development of craftwork and technology, and the estimate of future development trend
The demand condition in market of the product produced by the asset;
The estimate action would be taken by competitor or potential competitor;
The expense expects to maintain the asset to bring future economic benefit and the ability of the
company to pay for it.
The relate law restriction on control period of the asset or other similar restriction such as franchise,
lease period.
Relation with other asset holds by company.
4. The intangible asset with finite useful years should be amortization on a systematic and rational basic
according its economic benefit achievement plan. A straight line method would be used if the plan could
not define. Intangible asset with infinite useful years would not amortize, but would conduct impairment
test every year.
5. Conduct test to ability of the asset to bring future economic benefit on balance sheet date, and make
provision for impairment of intangible asset according to method describe in Notes 14.
6. Internal organizational research expenses are accounted through profit and loss in current period;
development costs which are recognized as intangible assets shall satisfy the following conditions: It is
technical feasible for use or sales upon the completion of the intangible assets; it is intended for use or
sales upon the completion of the intangible assets; the manner to provide that expect future economic
benefits that are attributable the intangible assets including a market is exist for the asset or product of
the asset or provide evidence of serviceable if asset are inside used; the entity should have enough
technology, financial and other resources to support the completion of development, and have ability to
use or sale the intangible assets; the cost of intangible asset can be measured reliably.
(13) Long-term deferred expenses
The Long-term deferred expenses are defined as those expenses in this year but should be allocated in
flowing years. The amount transfer to the account are the amount actual paid, and allocate equally in
project period.31
(14) Impairment of Asset
1. An impairment test should be conduct to Goodwill whether impairment evidence has been provided.
The entity should check the carrying amounts of fixed assets, construction in process, intangible assets,
investment properties and long term equity investment that measure in cost, and make judgment if any
indication of impairment loss for those assets exists. If there is objective indication that the asset is
impaired, recoverable amount of the asset shall be estimated base on the higher value between fair value
less disposal expense and present value of estimated future cash flow. When the recoverable amount of
the asset is less than its carrying amount, the differences are recognized as impairment loss. Recoverable
amount shall be estimated for the individual asset .If it is not possible to estimate the recoverable amount
of the individual asset, the entity shall determine the recoverable amount of the asset group to which the
individual asset belongs. The entity determines asset group base on the cash flow which generate from
the asset group is independent with other asset or other asset group.
2. Assets may be impaired when the following indication exists
① During the period, an asset’s market valve has declined significantly more than would be expected as
a result of the passage of time or normal use.
② Significant changes with adverse effect on the entity have taken place during the period, or will take
place in near future, in the technology, market, economic or legal environment in which the entity
operates or in the market to which an asset is dedicated.
③ Market interest rate or other market rates on investment return have been increased during the period,
and those increases are likely to affect the discount rate that are used in calculation of present value of
future cash flows, resulting material decrease of recoverable amount of assets.
④ There is indication that an asset is obsolete, outdated or physically damaged.
⑤ There is indication that an asset is idle, and the entity plans to discontinue the usage of an asset, or
plans to disposal of an asset before the previous expected date.
⑥ Information of internal report of the entity indicates that the economic performance of an asset is
lower than expectation, net cash flow the asset created or realized operating profits (or losses) are far
below (or higher) than expected amount.
3. Recognize of Asset group
The entity determines asset group base on the cash flow which generate from the asset group is
independent with other asset or other asset group. Meanwhile, the entity should consider the method of
administration, production and operation activities, and held-for-use assets or disposal decision. Once
the asset group is determined, it shall keep consistence in each accounting period.
Several assets would be recognize as asset group accord with condition mention above if product (or
other output) produce by those assets have an activity market whether part or all of the products (or
other out) are provide interior. If cash flow of the asset group is affected by internal transaction price,
the cash flow should be estimated in the best estimate amount in the light of a fair shake.
The goodwill reflected in the consolidated financial statement shall not include the goodwill of
subsidiary attributable to minority interests; However, for relative group asset, the goodwill attributable
to minority interests shall be included, and the entity shall adjust the book values of the asset group, and
compare the adjusted value with its receivable amounts, then to determine whether the asset group
(including the goodwill) is impaired. If aforesaid asset group is impaired, the entity will deduct the share
of minority interests proportionately from the loss, and then determine the impaired loss of goodwill
attributable to parent company.
4. Impairment loss would not reverse once determined whether value of asset increase in future period.32
(15) Employment Benefit
1. Employment benefit
Mainly include salary, bonus, allowance, employee welfares, society insurance, housing accumulation
fund, employee education fee and other payment to acquire service provide by employee.
The companies recognizes employment benefit as liability when employee is providing service during
account period, and capitalize it in the cost of asset or treat as expense according to beneficiary.
Compensation because of release employee from labor contract would transfer to current profit and loss
account.
2. Dismiss compensation
Dismiss compensation means compensate to employee because of release labor relation by the company.
Compensation includes release before the end of contract and without agreement with employee;
encourage employee unconstraint accept cut down; the internal retirement plan implement by the
company.
(1) The principal to recognize dismiss compensation
i. The company has establish a formal release plan or announce an proposal to unconstraint accept cut
down, and is going to conduct.
ii. The plan or proposal could not withdraw by the company unilateral.
(2) Measurement method of compensation
i. To the plan that employee could not refused, accrued payroll according to the plan.
ii. To the proposal of unconstraint accept cut down, accrued payroll according to the proposal on a
predict number of employee would accept the proposal.
(3) Measurement standard of compensation
i. To the plan or proposal implement by stages, recognize accrued liability that produced by the plan or
proposal in that stage and reckon in administration fee of the period.
ii. For the internal retirement plan, recognize accrued liability equal to amount that the company would
pay salary and society insurance to employee from the date of stop provide service to the date of normal
retirement date according to the plan, and reckon in administration fee of current period.
(16) Recognize and measurement of shares-based payment
The types of shares-based payment of the company are: cash-settle, equity-settle.
1. Cash-settle
The measurement of cash-settle is according with the fair value of liability undertake by the company,
which is calculated base on the company’s share or other equity instrument.
The value of cash-settle shares-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-settle 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 of company’s liability.33
2. Equity-settle
The measurement is base on the fair value of the equity instrument.
The value of equity-settle payment that could be exercised immediately after award would be reckoned
in relates cost and expense and capital reserves.
On each balance sheet date, a best estimated of amount of exercise equity-settle should be undertaken,
and reckon in cost or expense and capital reserves which is on the base of service award by the company,
according to the fair value of company’s liability.
When recognizing the fair value of the equity instruments on the date of the grant, the influence from
market conditions in the specified vesting conditions and non-vesting conditions stipulated in the
share-based payment agreement shall be considered. As to the non-vesting conditions existing in the
share-based payment, as long as employee or other parties meet the non-market conditions in all vesting
conditions (i.e. service period and etc.), costs that corresponds to the service has been obtained.
If the equity instruments granted is cancelled during the vesting period, such equity instruments shall be
settled as accelerated exercise of rights, while the rest amount that shall be recognized in the vesting
period shall be recorded into the current profits and losses immediately as the capital reserves at the
same time.
(17) Accrued liabilities
1. Recognize 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 determine as liabilities:
A. This obligation is current obligation of the company; and,
B. The performance of this obligation will probably cause economic benefits outflow of the company;
and,
C. The amount of this obligation can be reliably measured.
Loss contracts and restructuring obligations of the company meet the above conditions shall be
recognized as accrued liabilities.
2. Measurement of accrued liabilities
Accrued liabilities would be measured initial according to the optimum evaluation of outflow of
economic benefit if the company perform relate obligation that consider risk, incertitude, time value of
currency of contingency factor. Discount future cash flow to present value to determine the optimum
evaluation if the time value of currency has great impact. On balance sheet date, check the carry amount
of accrued liabilities, and make adjustment to carry amount to reflect the optimum evaluation. The
increase amount in carry amount of accrued liabilities cause by time process would be determined as
interest fee.
3. Optimum evaluation of accrued liabilities
If the necessary payments have scopes, the optimum evaluation shall be determined based on the
average amount between the upper and lower limit amount of scope ; if the necessary payments do not
have such scopes, then the optimum evaluation shall be determined in the following method:
(a) If the contingent event is involved in an individual project, the optimum evaluation amount will be
determined base on the most possible amount;
(b)If the contingent event is involved more than one project, the optimum evaluation amount shall be
determined base on possible amount and occurrence probability. In case of all or part of payments about
the confirmed liquidation liabilities are expected to be compensated by the third parties or other parties,
and the compensation amounts are surely received, then such amounts shall be separately recognized.
The confirmed compensation amounts shall not exceed book values of confirmed liabilities.34
(18) Revenue recognition
1. Sale of goods
Revenue from the sale of goods shall be recognized when all of the following conditions are satisfied:
a. the entity has transferred the significant risks and reward ownership of goods to the buyer;
b. the entity retains neither continuing managerial involvement to the degree usually associated with
ownership nor effective control over goods sold
c. the amount of revenue can be measured reliably;
d. relate economic benefit is probably inflow to the enterprise;
e. the associated costs incurred or to be incurred can be measured reliably.
2. Rendering of services
1) The entity recognize revenue from rendering of service when come out of rendering of service can be
measured reliably at balance sheet date, and adopt percentage of completion method in recognition of
revenue. The method depends on schedule of complete to determined revenue and expense.
The outcome of service could be measure reliably must meet flow condition;
a. the amount of revenue can be measured reliably;
b. relate economic benefit is probably inflow to the enterprise;
c. the complete of schedule could be determined reliably;
d. the associated costs incurred or to be incurred can be measured reliably;
2) When the outcome of rendering of service cannot be measured reliably at balance sheet date, revenue
shall be recognized to the extent of costs incurred that are expected to be recoverable if compensation
are predict to be award; to those cost that without compensation in predict, through to profit and loss
account without recognize revenue.
3. Transfer of asset use right
When the economic benefits related to the transaction are probably will flow into enterprise and the
amounts can be reliably measured, the entity shall recognize them as income from the transfer of asset
use right under following situations:
(a) The amount of interest income is determined by the capital usage period and actual interest rate.
(b) The amount of royalties is determined by the period and method of charging as stipulated in the
relevant contract or agreement.
(19) Government grants
1. Government grants shall be recognized at fair value on the conditions that the entity can receive the
grant and comply with the condition attached to the grant.
2. Government grant will initial measure in amount received if the grant is currency-asset, if not, the
grant will measure either in its fair value when the fair value could be obtained or nominal amount.
A government grant related to an asset shall be recognized as deferred income, and evenly amortized to
profit and loss over the useful lives of the related asset. Unamortized amount would be recognized in
profit and loss account when the asset is sale, convey, scrap, derogation before its employee life.
3. For government grant related to income, if the grant is a compensation for related expenses or losses
to be incurred in subsequent periods, the grant shall be recognized as deferred income, and recognized in
profit and loss over the periods in which the related cost are recognized.35
(20) Capitalization of borrowing costs
1. Recognition of capitalization of borrowing costs
Borrowing costs that are direct attributable to construction, purchase and production of assets and
comply with capitalization conditions, shall be capitalized and accounted to costs of relate assets;
otherwise, borrowing costs shall be recognized as expenses when incurred and accounted through in
profit and loss in current period.
Assets which comply with the capitalization conditions refer those assets such as fixed assets,
investment properties and inventories etc that require a long time of construction and production
activities before being intended for use or for sales
2. Capitalization period
The capitalization of borrowing costs shall satisfy the following conditions:
a. The capital expenditures have been incurred; and,
b. The borrowing costs have been incurred; and,
c. Activities relating to acquisition, construction or production that are necessary to make the assets
being intended for use or sales have been launched.
d. Capitalization of borrowing costs shall be suspended during periods in which acquisition, construction
or production of assets is interrupted abnormally, and is interrupted for a continuous period of three
months.
Capitalization of borrowing costs also shall be suspended when the acquisition, construction or
production of assets are prepared for intended use or sales.
3. Measurement of capitalized borrowing costs
During the capitalization period, the amount of interest to be capitalized for each accounting period shall
be determined as following:
- for a specific purpose borrowing, the amount of interest to be capitalized shall be the actual interest
expenses incurred for the period less temporary deposit interests or investment income; the amount of
assistant expense for a specific purpose would be capitalized that before the acquisition, construction or
production of asset are prepared for intended use or sales, the amount after would be reckoned in current
profit and loss account;
- Where funds are borrowed under general purpose, the entity shall determine the amount of interest to
be capitalized by applying capitalization rate to weighted average of the excess amount between
cumulative expenditures on the asset and the amount of specific-purpose borrowings. The capitalization
rate shall be weighted average of the interest rates applicable to the general-purpose borrowings; the
assistant expense for the general purpose borrowing would be reckoned in current profit and loss
account;
- During the capitalization period, interest to capitalized would not exceed total amount of interest of
relate borrowing in every financial year; exchange margin of foreign currency borrowing and interest
would capitalized in capitalization period.
(21) Income taxes
1. The company uses deferred income tax liability method in calculation of income taxes.
2. According tothe deductible temporary differences between carry amount of asset and liability and its
tax base, apply tax rate to determine deferred income tax asset or liability according the predict period of
recover asset or discharge liability.
3. Deferred income tax assets
a. Deferred income tax assets shall be recognized according to deductible temporary differences to the
extent that is probable that tax profits will be available against which the deductible temporary
differences can be utilized, but deferred income tax asset arise from initial recognize of asset and
liabilities in transaction that have character listed below would not recognized:36
1) The transaction is not business combination;
2) At the time of the transaction, it affects neither accounting profit nor taxable profit (or deductible
loss)
b. For deductable temporary differences associated with investment in subsidiaries, associates, and
interests in jointly controlled enterprises, recognize as deferred income tax asset if the temporary
difference could be reverse in the foreseeable future and it is probably award the tax profit to again the
difference.
4. Deferred income tax liabilities
Deferred tax liabilities shall be recognized for all taxable temporary differences, except to the extent that
the deferred tax liabilities arise from:
a) the initial recognition of goodwill;
b) the transaction is not a business combination, at the time of the transaction, it affects neither
accounting profit nor taxable profit (or deductible loss)
For temporary differences associated with investment in subsidiaries, associates, and interests in jointly
controlled enterprises, the investing enterprise is able to control the timing of the reversal of the
temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable
future. On balance sheet date, check the carry amount of deferred tax asset; decrease the carry amount if
it is not probably to obtain enough tax profit to again the difference in the foreseeable future, and set-of
the decrease amount when probably to obtain enough tax profit.
(22) Basis of Consolidation
1. Consolidation Scope
The consolidated financial statements prepared are in accordance with the No. 33 Enterprise Accounting
Standards – Consolidated Financial Statement issued in February, 2006. The consolidated financial
statements incorporate the financial statements of the Company and enterprises controlled by the
Company (“its subsidiaries”). Control is achieved where the Company has the power to govern the
financial and operating policies of an investee enterprise so as to obtain benefits from its activities.
If there is evidence provide that the invested company is not control by invest company, the invested
company would not in consolidation scope.
2. Bought and sale the share of subsidiaries
The date of acquire or disposal the right of share of subsidiaries is recognized at the effect date of
transfer material risk or reward. The consolidation profit and loss statement and cash flow statement has
include the result of management and cash flow of subsidiaries(not in the same control) before disposal
or after acquire the share; for the subsidiaries in the same control from business combination, the
management result and cash flow has been included in consolidation profit and loss account and cash
flow statement from begin of current period to consolidation date and disclose in statement individual,
the compare amount in consolidation statement has been adjust correspond to it.
If parent company acquires new equity of subsidiaries, on the date of work out consolidation statement,
adjust shareholder reserve according to margin between the values of long-term equity investment and
proportion of net asset of subsidiaries, adjust retain earning if the reserve is not enough to offset.
3. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the
accounting policies used into line with those used by other members of the Group.
4. Consolidation method
All significant intercompany transaction and balances between group enterprises are eliminated on
consolidation. The minority interest would disclose in consolidation statement. Decrease minority
interest if minorities afford to the loss of the subsidiaries that allocate to minorities, otherwise, the
company would bear the loss of exceed.37
V Change in accounting policies, accounting estimates and correct previous accounting period
errors:
There are no changes in accounting policies, accounting estimates and no accounting errors in prior
accounting period.
VI Taxation
(1) The type of tax and tax rate for the company are list below:
Tax type Tax base Rate %
VAT Sale of product and raw material 17
Business Tax Business turnover 5
Local Education Surcharge
VAT payable, business tax, consumer tax、Tax that shall not be
exempt from tax allowance and deduction
1
Corporation Income Tax Taxable profit 15
According to《Notice about Implementation of Preferential Policies of the on Transition of Enterprise
Income Tax 》[No.39（2007 of State Council]issued by The State Council on Dec 16 2007 and《Notice
of the Ministry of Finance and State Administration of Taxation about Implementation of Preferential
Policies of the State Council on Transition of Enterprise Income Tax》[No. 21 [2008] of the Ministry of
Finance] issued by the ministry on Feb 23 2008, the income tax rate for the company in 2008 is 18%,
and 20% in 2009,22% in 2010, 24% in 2011.
(2) The tax type and tax rate for primary subsidiaries
1. Tsann Kuen (ZhangZhou) Enterprise Ltd(TKL)
Tax type Tax base Rate %
VAT Sale of product and raw material 0, 17
Business Tax Business turnover 5
Local Education Surcharge
VAT payable, business tax, consumer tax、Tax that shall not be
exempt from tax allowance and deduction
1
Corporation Income Tax Taxable profit 15
TKL was cognizance as high technology enterprise by the Fujian Province High Technology Enterprise
Cognizance Group (No. 8 [2009] Ming Ke Gao), according to the tax law, the corporation tax rate is
15%.
2. Tsann Kuen (Zhangzhou) South Port Electronics Enterprise Co., Ltd. (TKN)
Tax type Tax base Rate %
VAT Sale of product and raw material 17
Business Tax Business turnover 5
Local Education Surcharge VAT payable, business tax, consumer tax、 1
Corporation Income Tax Taxable profit 12.5
Tsann Kuen (Zhangzhou) South Port Electronics Enterprise Co., Ltd is a production enterprise which is
located at Zhangzhou Fujian, the enterprise income tax is levied at 25% of taxable income. According to
Income tax rules and regulations for foreign investment enterprises and foreign-owned enterprises, the
Company is exempted from income tax from the first to the second accounting period, and is levied at
12.5% from the third to the fifth accounting period since the Company is profitable. The Company’s
first profitable year is in the year of 2005.38
3. Tsann Kuen (ShangHai) Enterprise Ltd (TKS)
Tax type Tax base Rate %
VAT Sale of product and raw material 17
Business Tax Business turnover 5
Urban Construction Tax VAT payable, business tax, consumer tax、 1
Corporation Income Tax Taxable profit 25
4. Shanghai Canxing Trading Co.Ltd
Tax type Tax base Rate %
VAT Sale of product and raw material 17
Business Tax Business turnover 5
Urban Construction Tax VAT payable, business tax, consumer tax 1
Education Surcharge VAT payable, business tax, consumer tax 3
Corporation Income Tax Taxable profit 25
5. The Company’s subsidiary EUPA (Hong Kong) Co., Ltd is registered in Hong Kong Special
Administrative Zone, and income tax rate for the company is 17.5% in 2007, 16.5% in 2008 and 2009.
6. Xiamen Canxing International Travel Agency Co., Ltd.
Tax type Tax base Rate %
Business Tax Business turnover 5
Urban Construction Tax VAT payable, business tax, consumer tax、 7
Education Surcharge VAT payable, business tax, consumer tax、 3
Local Education Surcharge VAT payable, business tax, consumer tax、 1
Corporation Income Tax Taxable profit 25
7. Xiamen Canxing Trading Co. Ltd
Tax type Tax base Rate %
VAT Sale of product and raw material 17
Business Tax Business turnover 5
Urban Construction Tax VAT payable, business tax, consumer tax、 7
Education Surcharge VAT payable, business tax, consumer tax、 3
Local Education Surcharge VAT payable, business tax, consumer tax、 1
Corporation Income Tax Taxable profit 25
8. Shanghai Fanxin Airline Services Limited
Tax type Tax base Rate %
Business Tax Business turnover 5
Urban Construction Tax VAT payable, business tax, consumer tax、 7
Education Surcharge VAT payable, business tax, consumer tax、 3
Local Education Surcharge VAT payable, business tax, consumer tax、 1
Corporation Income Tax Taxable profit 2539
VII Enterprise consolidation and consolation statement scope
7.1 Information of subsidiaries in consolidation scope (The monetary unit is ten thousand unless
otherwise stated)
Company name
Registration
location
Registered
capital
Actual
investment
amount
Holding
proportion
Voting
rights
proportion
Business scope
Nature of
economy
Merger
or not
Tsann Kuen (ShangHai)
Enterprise Ltd(TKS)
ShangHai USD4,000 USD2,500 62.50% 62.50%
Manufacture and sales of small home electronic
appliance, electronic device, light-industrial
product, and modern furniture and relative modules
limited liability
company
Yes
Tsann Kuen (ZhangZhou)
Enterprise Ltd(TKL) (Note1)
ZhangZhou USD16,000 USD16,000 75.00% 75.00%
Development, production and sales of small home
electronic appliance, new style of electronic device,
light-industrial product, and modern furniture and
relative modules
limited liability
company
Yes
Tsann Kuen (Zhangzhou)
South Port Electronics
Enterprise Co., Ltd. (TKN)
ZhangZhou RMB500 RMB375 75.00% 75.00%
Development and production of small home
electronic appliance, new style of electronic device,
light-industrial product, and modern furniture
limited liability
company
Yes
Eupa (Hong Kong)
Ltd(EUPA)
HongKong USD290 USD140 100% 100%
Trading, purchase, small home appliance research,
investment, market research
limited liability
company
Yes
Tsann Kuen (Zhangzhou)
Profession and Technology
College (College)
Zhangzhou RMB50 RMB50 75.00% 75.00%
Secondary vocational education
non-governmental
non-enterprise
entities
Yes
Xiamen Canxing
International Travel Agency
Co., Ltd. (Xiamen Canxing
Travel)
XiaMen RMB500 RMB500 100% 100% Inbound tourism and domestic tourism
limited liability
company
Yes
Shanghai Canxing Trading
Co. Ltd (Shanghai Canxing)
ShangHai RMB500 RMB495 74.25% 74.25%
Import, wholesale, retail, and after service of home
electronic appliance, computer and its fitting
equipment, communication equipments, mechanical
and electronic equipments, office equipments and
related complete product(include kitchen
equipments);Import or export products or
technology by independence or act as agency.
limited liability
company
Yes
Shanghai Fanxin Airline
Services Limited (Shanghai
Fanxin)
ShangHai RMB50 RMB50 37.87% 37.87%
Civil air transport of domestic air routes, excluding
Hong Kong, Macao and Taiwan, sale and agency of
passenger transport
limited liability
company
Yes
Xiamen Canxing Trading Co.
Ltd (Xiamen Canxing
Trading)
XiaMen RMB500 RMB500 70.54% 70.54%
1. Wholesale and retail of general merchandise,
home electronic appliance, computer and its fitting
equipment, communication equipments, mechanical
and electronic equipments, office equipments,
kitchen equipments and related complete products.
2. Importing and exporting different kinds of
commodities and technologies
limited liability
company
Yes40
7.2 Change in consolidation scope
1. New subsidiary during reporting period
Company name Indirect holding proportion% Registration date
Xiamen Canxing Travel 100% 17 Feb. 2009
Xiamen Canxing Trading 70.54% 13 Mar. 2009
Shanghai Fanxin 37.87% 10 Apr. 2009
Xiamen Canxing International Travel Agency Co., Ltd. (“Xiamen Canxing Travel”) was established by the Company
by monetary funds in 17 Feb. 2009, the registered capital is RMB 5,000,000.00, which the Company holds 100% of
shares.
Xiamen Canxing Trading Co. Ltd. (“Xiamen Canxing Trading”) was established by Shanghai Canxing Trading Co.,
Ltd., a subsidiary company of TKN (the subsidiary of the Company) and individual shareholders by monetary funds in
13 Mar. 2009, the registered capital is RMB 5,000,000.00, which Shanghai Canxing Trading holds 95% of shares.
Shanghai Fanxin Airline Services Limited (“Shanghai Fanxin”) was established by Shanghai Canxing Trading Co.,
Ltd., a subsidiary company of TKN (the subsidiary of the Company) and individual shareholders by monetary funds in
10 Apr. 2009, the registered capital is RMB 500,000.00, which Shanghai Canxing Trading holds 51% of shares.
VIII There is no joint-venture enterprise or associate enterprise41
IX. Main items in Consolidation Financial Statement
9.1 Monetary fund
2009.06.30 2008.12.31
Original
currency
Exchange
rate
Presentation
currency
Original
currency
Exchange
rate
Presentation
currency
Cash on hand 517,083.03 753,580.34
CNY 244,316.04 1.0000 244,316.04 243,387.23 1.0000 243,387.23
HKD 500.75 0.8810 441.16 1,907.91 0.8819 1,682.59
USD 6,993.85 6.8319 47,781.28 19,891.04 6.8346 135,947.30
JPY 20,572.90 0.0714 1,468.91 1,470,508.90 0.0757 111,244.00
IDR 600,000.00 0.0007 420.00 0.00 0.00
FRF 7.00 6.3229 44.26 0.00 0.00
EUR 22,809.48 9.6323 219,707.75 27,054.48 9.6590 261,319.22
GBP 3.13 11.3930 35.66 0.00 0.00
HUF 81,016.00 0.0354 2,867.97 0.00 0.00
Cash in bank 209,572,299.85 335,536,344.49
CNY 98,637,388.42 1.0000 98,637,388.42 127,576,436.82 1.0000 127,576,436.82
HKD 1,059.80 0.8810 933.68 1,509,697.21 0.8819 1,331,401.97
USD 14,446,533.26 6.8319 98,697,270.56 28,084,570.81 6.8346 191,946,807.65
JPY 103,372,995.00 0.0714 7,380,831.84 177,565,874.00 0.0757 13,432,858.41
EUR 504,124.18 9.6323 4,855,875.35 129,292.85 9.6590 1,248,839.64
Other Monetary fund 91,682,200.93 80,216,349.99
CNY 91,115,482.39 1.0000 91,115,482.39 77,191,317.54 1.0000 77,191,317.54
HKD 0.00 0.8810 0.00 32,010.25 0.8819 28,229.84
USD 82,951.82 6.8319 566,718.54 438,475.20 6.8346 2,996,802.61
Total 301,771,583.81 416,506,274.82
Other monetary fund including bank acceptance notes, commercial acceptance notes and deposits for
issuance of letter of credit.
9.2 Notes Receivable
Items of notes 2009.06.30 2008.12.31
Bank acceptance notes-no pledge 1,661,299.64 5,823,544.00
Commercial acceptance bill-no pledge 3,143,863.00 0.00
Total 4,805,162.64 5,823,544.00
Compared with the beginning of reporting period, the ending balance of notes receivable is decreased by
17.49%, which is caused by acceptance maturity.
9.3 Accounts receivable
(1) Accounts Receivable
Items 2009.06.30 2008.12.31
Balance Proportion% Bad debit
provision
Net value Balance Proportion% Bad debit
provision
Net value
Individual transaction
with significant amount
176,845,426.05 49.01% 11,231,512.17 165,613,913.88 161,545,803.31 35.73% 12,904,956.35 148,640,846.96
Individual transaction
with not so significant
amount but significant
recoverable risk
41,187,436.95 11.42% 41,187,436.95 0.00 41,258,039.77 9.12% 41,258,039.77 0.00
Other transaction with
no significant amount
142,794,521.67 39.57% 831,262.67 141,963,259.00 249,342,672.13 55.15% 820,937.38 248,521,734.75
Total 360,827,384.67 100.00% 53,250,211.79 307,577,172.88 452,146,515.21 100.00% 54,983,933.50 397,162,581.7142
(2) Age Analysis
Aging 2009.06.30 2008.12.31
Balance Proportion
%
Bad debit
provision
Net value Balance Proportion
%
Bad debit
provision
Net value
Within 1 year 306,655,686.86 84.99% 842,661.06 305,813,025.80 397,638,202.33 87.94% 508,820.53 397,129,381.80
1-2 years 1,844,577.44 0.51% 80,430.36 1,764,147.08 13,376,232.29 2.96% 13,346,444.36 29,787.93
2-3 years 11,195,039.78 3.10% 11,195,039.78 0.00 41,132,080.59 9.10% 41,128,668.61 3,411.98
Above 3 years 41,132,080.59 11.40% 41,132,080.59 0.00 0.00 0.00% 0.00 0.00
Total 360,827,384.67 100.00% 53,250,211.79 307,577,172.88 452,146,515.21 100.00% 54,983,933.50 397,162,581.71
(3) As at 30 Jun. 2009, the amount due from shareholder who own 5% or more than 5% of voting right
as followed:
Name 2009.06.30 2008.12.31
Tsann Kuen (Taiwan) Enterprise Co., Ltd 18,618,197.43 27,157,898.62
(4) Total amount of top five account receivable is 245,487,675.16, representing 68.04% of account
receivables balance.
Aging 2009.06.30 2008.12.31
Amount Proportion% Amount Proportion%
Within 1 year 234,349,586.09 95.46% 232,873,277.00 94.75%
1-2 years 24,382.09 0.01% 12,895,690.10 5.25%
2-3 years 11,113,706.98 4.53% 0.00 0.00%
Total 245,487,675.16 100.00% 245,768,967.10 100.00%
(5) Other explanation
① Individual transaction with significant amount: Individual amount which represents more than 10%
(includes 10%) of ending balance of account receivable shall be treated as Individual transaction with
significant amount.
② Individual transaction with not so significant amount but significant recoverable risk which
represents any individual transaction with no so significant amount, but the age is more than 1 years,
those transaction are treated as Individual transaction with not so significant amount but significant
recoverable risk.
③ Other transactions with no significant amount represent any transaction except set forth in ①, ②.
9.4 Advance to suppliers
(1) Age analysis
Aging 2009.06.30 Proportion% 2008.12.31 Proportion%
Within 1 year 1,760,148.92 100.00% 5,915,476.53 66.39%
1-2 years 0.00 0.00% 2,995,322.41 33.61%
Total 1,760,148.92 100.00% 8,910,798.94 100.00%
(2) The ending balance is decreased of 80.25% compare with the beginning balance is caused by partial
advance for material are settle.
(3) Total amount of top five advance to supplier is 890,937.89, representing 50.62% of ending balance.
(4) Up to 30 Jun. 2009, there is no amount due from shareholder who own 5% or over 5% of voting
shares.43
9.5 Other receivables
(1) Other receivables
Items 2009.06.30 2008.12.31
Balance Proportion% Bad debit
provision
Net value Balance Proportion% Bad debit
provision
Net value
Individual transaction with
significant amount
2,698,608.41 13.83% 0.00 2,698,608.41 9,284,077.19 27.16% 0.00 9,284,077.19
Individual transaction with
not so significant amount
but significant recoverable
risk
2,397,501.71 12.29% 2,397,501.71 0.00 3,403,176.27 9.96% 3,403,176.27 0.00
Other transaction with no
significant amount
14,410,983.96 73.88% 848,111.50 13,562,872.46 21,495,669.25 62.88% 1,793,422.09 19,702,247.16
Total 19,507,094.08 100.00% 3,245,613.21 16,261,480.87 34,182,922.71 100.00% 5,196,598.36 28,986,324.35
(2) Breakdown of individual account receivable with significant amount
Debtor Amount Age Proportion Content
Fujian Longhai Power Supply
Co., Ltd.
2,698,608.41 Within 30 days 0.00% 70% of electrical charge in advance
Total 2,698,608.41
(3) Age analysis
Aging 2009.06.30 2008.12.31
Balance Proportion
%
Bad debit
provision
Net value Balance Proportion
%
Bad debit
provision
Net value
Within 1 year 17,109,592.37 87.71% 848,111.50 16,261,480.87 30,779,746.44 90.04% 1,793,422.09 28,986,324.35
1-2 years 1,532,956.36 7.86% 1,532,956.36 0.00 2,386,574.47 6.98% 2,386,574.47 0.00
2-3 years 864,545.35 4.43% 864,545.35 0.00 572,898.96 1.68% 572,898.96 0.00
Over 3 years 0.00 0.00% 0.00 0.00 443,702.84 1.30% 443,702.84 0.00
Total 19,507,094.08 100.00% 3,245,613.21 16,261,480.87 34,182,922.71 100.00% 5,196,598.36 28,986,324.35
(4) Up to 30 Jun. 2009, there is no amount due from shareholder who own 5% or over 5% of voting
shares.
(5) The total amount of top five other receivable is 7,300,555.48, represent 37.42% of ending balance
Name Amount Nature Aging Proportion%
Fujian Longhai Power Supply Co., Ltd. 2,698,608.41 70% of electrical charge in advance Within 30 days 13.83%
People’s Court of Xiamen City HuLi District
1,908,990.00 To pay margins of preservation prior to
lawsuit
Within 1 year 9.79%
Ni YiLian
1,100,000.00 Payment for selling 9/F of Information
Building
Over 1 year 5.64%
Medical Insurance Management Center
of Longhai Municipality
866,761.20 Temporary medical insurance premiums of
staffs
Over 1 year 4.44%
China Export & Credit Insurance
Corporation, Fujian Branch
726,195.87 Deposit of export credit insurance
Within 1 year 3.72%
Total 7,300,555.48 37.42%
(6) Other explanation
① Individual transaction with significant amount: Individual amount which represents more than 10%
(includes 10%) of ending balance of other receivables shall be treated as Individual transaction with
significant amount.
② Individual transaction with not so significant amount but significant recoverable risk which
represents any individual transaction with no so significant amount, but the age is more than 1 years,
those transaction are treated as Individual transaction with not so significant amount but significant
recoverable risk.
③ Other transactions with no significant amount represent any transaction except set forth above44
9.6 Inventory
(1) Inventories
Items 2009.06.30 2008.12.31
Amount
Provision for
impairment
Net Value
Amount
Provision for
impairment
Net Value
Raw material 214,136,978.91 6,104,106.20 208,032,872.71 190,355,952.68 6,624,807.61 183,731,145.07
Product in
process
49,295,271.33 0.00 49,295,271.33 91,693,725.66 0.00 91,693,725.66
Finished product 104,335,145.01 2,008,163.06 102,326,981.95 169,764,797.46 2,505,969.67 167,258,827.79
Material in
transit
865,797.64 0.00 865,797.64 8,542,553.88 0.00 8,542,553.88
Total 368,633,192.89 8,112,269.26 360,520,923.63 460,357,029.68 9,130,777.28 451,226,252.40
(2) Provision for Impairment
Items 2008.12.31 Increase Reversal Write off 2009.06.30
Raw material 6,624,807.61 0.00 244,019.40 276,682.01 6,104,106.20
Product in
process
0.00 0.00 0.00 0.00 0.00
Finished product 2,505,969.67 207,923.33 0.00 705,729.94 2,008,163.06
Total 9,130,777.28 207,923.33 244,019.40 982,411.95 8,112,269.26
(3) The total procurement amount of top five suppliers is RMB 133,617,116.47 in total, accounting for
22.31% of total procurement.
(4) The impairment loss provision for inventories is made base on the difference of the lower net
recoverable value into cash and book value on 30 Jun. 2009. Net recoverable value into cash refers
estimated sale price less estimated selling expense and related taxes expense in the course of normal
production and operation. The decrease of impairment loss of inventories is due to low balance of
inventories at report date.
9.7 Available-for-Sale Financial Asset
Items 2009.06.30 2008.12.31
Available-for-sale equity instrument 186,883.20 109,771.20
Total 186,883.20 109,771.20
9.8 Long-term Receivable
Items 2009.06.30 2008.12.31
Receivable 104,700,136.71 68,487,888.93
Total 104,700,136.71 68,487,888.93
9.9 Long-term Equity Investment
(1) Long-term equity investment and impairment loss provision:
Item 2009.06.30 2008.12.31
Investment
cost
Impairment loss
provision Carrying value Investment cost
Impairment
loss provision Carrying value
Calculation by
cost method 40,000.00 0.00 40,000.00 40,000.00 0.00 40,000.00
Total 40,000.00 0.00 40,000.00 40,000.00 0.00 40,000.00
(2) Long-term equity investment measured by cost method:
Investee
Initial
Investment cost
2008.12.31
Increment Decrement
2009.06.30
Xiamen Foreign Investment
Enterprise Association
40,000.00 40,000.00 0.00 0.00 40,000.00
Total 40,000.00 40,000.00 0.00 0.00 40,000.0045
9.10 Investment Property
(1) Subsequent measurement by cost model
Item 2008.12.31 Increment Decrement 2009.06.30
Total cost:
Buildings and structures 67,534,204.94 39,000.00 0.00 67,573,204.94
Land use right 0.00 0.00 0.00 0.00
Subtotal 67,534,204.94 39,000.00 0.00 67,573,204.94
Accumulated depreciation and
accumulated amortization
Buildings and structures 30,079,317.83 700,858.32 0.00 30,780,176.15
Land use right 0.00 0.00 0.00 0.00
Subtotal 30,079,317.83 700,858.32 0.00 30,780,176.15
Total accumulated impairment loss
provision
Buildings and structures 0.00 0.00 0.00 0.00
Land use right 0.00 0.00 0.00 0.00
Subtotal 0.00 0.00 0.00 0.00
Total carrying value
Buildings and structures 37,454,887.11 0.00 0.00 36,793,028.79
Land use right 0.00 0.00 0.00 0.00
Subtotal 37,454,887.11 0.00 0.00 36,793,028.79
9.11 Fixed assets and accumulated depreciation
(1) Fixed assets and accumulated depreciation
Item 2008.12.31 Increment Decrement 2009.06.30
Total cost:
Buildings and structures 136,021,801.61 48,703.40 3,891.61 136,066,613.40
Machinery equipment 809,742,834.05 386,589.43 111,828,707.58 698,300,715.90
electronic equipment, modules and others 1,840,315,843.39 12,096,744.83 58,303,493.42 1,794,109,094.80
Vehicles 54,543,057.24 244,329.52 2,939,349.43 51,848,037.33
Capitalized maintenance expenses for fixed asset 59,253,093.84 1,518,378.69 579,050.00 60,192,422.53
Subtotal 2,899,876,630.13 14,294,745.87 173,654,492.04 2,740,516,883.96
Total Accumulated depreciation:
Buildings and structures 63,718,812.42 3,806,665.76 95,333.39 67,430,144.79
Machinery equipment 415,624,712.98 26,301,926.43 59,655,806.63 382,270,832.78
electronic equipment, modules and others 1,533,711,373.55 62,107,941.88 53,484,212.55 1,542,335,102.88
Vehicles 44,193,091.78 1,458,030.66 2,273,774.91 43,377,347.53
Capitalized maintenance expenses for fixed asset 16,167,367.24 2,933,810.75 173,524.08 18,927,653.91
Subtotal 2,073,415,357.97 96,608,375.48 115,682,651.56 2,054,341,081.89
Net value:
Buildings and structures 72,302,989.19 0.00 0.00 68,636,468.61
Machinery equipment 394,118,121.07 0.00 0.00 316,029,883.12
electronic equipment, modules and others 306,604,469.84 0.00 0.00 251,773,991.92
Vehicles 10,349,965.46 0.00 0.00 8,470,689.80
Capitalized maintenance expenses for fixed asset 43,085,726.60 0.00 0.00 41,264,768.62
Subtotal 826,461,272.16 0.00 0.00 686,175,802.07
Impairment loss provision:
Buildings and structures 0.00 0.00 0.00 0.00
Machinery equipment 20,625,867.39 658,940.72 593,449.24 20,691,358.87
electronic equipment, modules and others 40,854,730.33 1,138,851.45 6,589,112.01 35,404,469.77
Vehicles 66,319.84 623,370.19 4,563.45 685,126.58
Capitalized maintenance expenses for fixed asset 821,736.09 448,108.12 933.25 1,268,910.96
Subtotal 62,368,653.65 2,869,270.48 7,188,057.95 58,049,866.18
Net value: 764,092,618.51 0.00 0.00 628,125,935.8946
(2) The amount of fixed assets that are transferred from construction in progress in the reporting period
is RMB 3,590,067.55.
(3) Details of purpose to dispose fixed assets:
Items Cost
Accumulated
depreciation
impairment loss
Provision Net value
Predicted disposal
date
A batch of equipment 7,053,998.18 3,431,984.25 106,364.55 3,515,649.38 July 2009
Total 7,053,998.18 3,431,984.25 106,364.55 3,515,649.38
(4) The Company has no finance leased fixed asset.
(5) The Company has no operating leased fixed asset.
(6) Fixed assets which have not completed the process of property right certificate.
Item
Cost
Accumulated
depreciation
impairment loss
Provision
Net value
Reason
Buildings and structures 1,957,670.50 220,238.70 0.00 1,737,431.80 Being processed
(7) The Company has no pledged fixed assets.
(8) Details of idle fixed assets:
Items Cost
Accumulated
depreciation
Impairment loss
Provision
Net value
Machinery equipment 58,918,026.45 21,792,756.17 13,567,985.16 23,557,285.12
Electronic equipment,
modules and others
30,854,682.88 17,979,362.60 4,869,799.40 8,005,520.88
Total 89,772,709.33 39,772,118.77 18,437,784.56 31,562,806.00
9.12 Construction in progress
(1) Details of construction in progress
Project name 2009.06.30 2008.12.31
Carrying
value
Impairment loss
Provision
Net value Carrying value Impairment loss
Provision
Net value
Device Installation 0.00 0.00 0.00 58,630.00 0.00 58,630.00
Module-in-process 943,660.92 0.00 943,660.92 2,967,294.68 0.00 2,967,294.68
Decoration 1,465,177.36 0.00 1,465,177.36 398,415.73 0.00 398,415.73
Total 2,408,838.28 0.00 2,408,838.28 3,424,340.41 0.00 3,424,340.41
(2) Details of construction in progress (Con.)
Project name Budget 2008.12.31 Increment
Transfer to
Fixed assets
Other
decrement
2009.06.30
Sources of
capital
Project
input
over its
budget
%
Device
Installation
8,099,536.00 58,630.00 50,665.99 86,531.45 22,764.54 0.00 Self-owned
capital
0.63%
Module-in-process 14,451,566.00 2,967,294.68 1,005,373.34 2,836,020.37 192,986.73 943,660.92 Self-owned
capital
6.96%
Decoration 3,000,000.00 398,415.73 1,734,277.36 667,515.73 0.00 1,465,177.36 Self-owned
capital
57.81%
Total 25,551,102.00 3,424,340.41 2,790,316.69 3,590,067.55 215,751.27 2,408,838.28
(3) There is no amount to interest capitalization in construction in progress until 30 June 2009.
(4) The ending balance is decreased by 29.66% compared with the beginning of the period, which was
mainly due to transfer to fixed assets.47
9.13 Intangible assets and accumulated amortization
Items
Carrying balance on
2008.12.31
Increment Decrement
Carrying balance on
2009.6.30
(1) Total cost 45,165,918.80 441,575.32 0.00 45,607,494.12
Information system software 15,605,191.29 441,575.32 0.00 16,046,766.61
Land use right 29,560,727.51 0.00 0.00 29,560,727.51
（2）Total accumulated
amortization
14,572,459.40 1,627,202.29 0.00 16,199,661.69
Information system software 6,414,176.15 1,300,013.89 0.00 7,714,190.04
Land use right 8,158,283.25 327,188.40 0.00 8,485,471.65
（3）Total accumulated
impairment loss provision
0.00 0.00 0.00 0.00
Information system software 0.00 0.00 0.00 0.00
Land use right 0.00 0.00 0.00 0.00
（4）Total carrying value 30,593,459.40 0.00 0.00 29,407,832.43
Information system software 9,191,015.14 0.00 0.00 8,332,576.57
Land use right 21,402,444.26 0.00 0.00 21,075,255.86
9.14 Goodwill
Name of investee
Balance on
2008.12.31
Increment Decrement
Balance on
2009.6.30
Impairment loss
Provision on
2009.6.30
Sources
Shanghai Fanxin Airline
Services Limited
0.00 71,870.08 71,870.08 0.00
Difference between
long-term equity
investment and net
assets when purchasing
Total 0.00 71,870.08 0.00 71,870.08 0.00 -
9.15 Long-term deferred expense
Items Carrying balance on 2009.6.30 Carrying balance on 2008.12.31
Telecommunications engineering 141,108.13 155,458.15
Other 77,103.06 0.00
SUN computer service fees 291,666.75 341,666.73
Internet charges 323,232.00 375,648.00
Total 833,109.94 872,772.88
9.16 Deferred income tax assets
Recognition of deferred income tax assets
Category Deductible temporary difference Deferred income tax assets
2009.06.30 2008.12.31 2009.06.30 2008.12.31
Impairment loss of fixed assets 50,569,911.06 48,765,101.41 7,585,486.66 7,314,765.21
Unrealized loss or gain on
exchange
2,411,151.84 0.00 361,672.78 0.00
Changes in fair value 547,025.01 0.00 82,053.75 0.00
Provision for bad debts 32,317.58 158,583.32 4,847.64 19,822.92
Accrued Expense 177,192.48 177,192.43 44,298.12 44,298.11
Provision for falling price of
Inventory
0.00 982,411.95 0.00 122,801.49
Loss relief 81,181,782.06 101,066,374.38 12,177,267.30 15,177,213.44
Total 134,919,380.03 151,149,663.49 20,255,626.25 22,678,901.1748
9.17 Impairment provision for assets
Decrement
Items 2008.12.31 Increment
Reversal Written-off
2009.06.30
Provision for bad debts 61,683,769.00 0.00 5,187,944.00 0.00 56,495,825.00
Provision for falling price
of inventories
9,130,777.28 207,923.33 244,019.40 982,411.95 8,112,269.26
Impairment loss provision
for fixed assets
62,368,653.65 2,869,270.48 0.00 7,188,057.95 58,049,866.18
Total 133,183,199.93 3,077,193.81 5,431,963.40 8,170,469.90 122,657,960.44
9.18 Restricted assets
Items 2008.12.31 Increment Decrement 2009.06.30
Pledged assets:
Buildings and structures 30,007,359.86 0.00 30,007,359.86 0.00
Machinery equipment 134,097,376.43 0.00 134,097,376.43 0.00
Modules 199,364,791.07 0.00 199,364,791.07 0.00
Land use right 14,145,624.25 0.00 14,145,624.25 0.00
Other causes of asset ownership restrictions
Other monetary fund 80,216,349.99 171,173,242.76 159,707,391.82 91,682,200.93
Total 457,831,501.60 171,173,242.76 537,322,543.43 91,682,200.93
9.19 Short-term loan
Type 2009.06.30 2008.12.31
Borrow money on credit 22,478,317.38 0.00
Total 22,478,317.38 0.00
9.20 Transaction financial liabilities
Items 2009.06.30 2008.12.31
Derivative financial liabilities 547,025.01 0.00
Total 547,025.01 0.00
9.21 Notes payable
Items 2009.06.30 2008.12.31
Bank acceptance notes 77,629,855.16 104,065,444.40
Trade acceptance notes 8,124,630.08 73,531,316.49
Total 85,754,485.24 177,596,760.89
(1) The ending balance of notes payable shall be due in before December 2009.
(2) There is no amount due to shareholders who own 5% or more than 5% voting rights until 30 June
2009.
9.22 Accounts payable
(1) Aging
Aging 2009.06.30 2008.12.31
Within 1 year 522,198,096.12 750,391,401.61
Over 1 year 145,094.42 4,014,554.37
Total 522,343,190.54 754,405,955.98
Account payable, which the aging is more that one year accounts for 0.03% of the ending balance, which caused by
unsettled payment for goods by suppliers in time.49
(2) As at 30 Jun. 2009, the amount due to shareholders who own 5% or more than 5% voting right is as
followed:
Name of Shareholders amount in arrear Aging Proportion % Nature
Tsann Kuen (Taiwan) Enterprise Co.
Ltd
7,167,658.92 Within one year 1.37%
Payment for goods
that bill undue
9.23 Advanced from customers
(1) Aging
Aging 2009.06.30 2008.12.31
Within 1 year 13,404,798.08 20,285,350.06
Over 1 year 10,638,882.99 1,166,879.95
Total 24,043,681.07 21,452,230.01
(2) There is no amount due to shareholders who own 5% or more than 5% voting rights until 30 Jun.
2009.
9.24 Payroll payables
Items 2008.12.31 Increment Pay out 2009.06.30
Salary, bonus and allowance 30,329,618.43 128,369,088.91 133,449,980.99 25,248,726.35
Employee welfare 0.00 5,206,503.18 3,379,486.16 1,827,017.02
Social insurance 11,113,996.43 11,465,698.98 16,734,354.51 5,845,340.90
Including: Medical insurance 580,647.53 3,513,542.45 2,668,460.37 1,425,729.61
Basic retirement insurance 9,155,979.17 6,162,567.60 11,462,777.56 3,855,769.21
Unemployment insurance 901,235.88 606,355.26 1,110,464.24 397,126.90
Injury insurance 340,197.60 812,237.96 1,033,019.43 119,416.13
Pregnancy insurance 135,936.25 370,995.71 459,632.92 47,299.04
Housing accumulation fund 7,226,224.15 3,622,763.52 3,107,137.59 7,741,850.08
Labour union fee and employee education
fee
0.00 168,000.00 168,000.00 0.00
Redemption for termination of labor
contract
132,000.00 38,458.00 162,628.00 7,830.00
Others 3,800.00 1,001,862.98 995,114.95 10,548.03
Total 48,805,639.01 149,872,375.57 157,996,702.20 40,681,312.38
9.25 Tax payable
Types 2009.06.30 2008.12.31
Business Tax (95,059.76) 1,105,750.68
Income Tax (4,765,669.04) (4,438,943.55)
VAT 50,621,535.33 26,021,612.62
Personal Income Tax 435,330.76 304,432.16
Education fee 100,804.40 159,778.99
Withholding Income Tax 1,144.12 0.00
Others 11,975,921.65 21,125,967.93
Total 58,274,007.46 44,278,598.83
9.26 Other account payables
(1) Aging analysis
Aging 2009.06.30 2008.12.31
Within 1 year 235,345,948.71 395,710,661.53
Over 1 year 2,731,538.86 543,311.60
Total 238,077,487.57 396,253,973.13
Other account payables, which the aging is more that one year accounts for 1.15% of the ending balance, which caused
by deposit of rent payable.50
(2) The balance of other account payables, which is significant and age is more than one year:
Company name
Amount in
arrear
Aging Reasons
Repayment after the
balance sheet date
Fujian Zhangzhou Sigma Metals Co., Ltd. 800,000.00 Over 1 year Deposit for rent 0
Xiamen Hexing Packing Printing Co., Ltd. 348,720.00 Over 1 year Deposit for rent 0
Zhangzhou Rijin Wire Co., Ltd. 212,000.00 Over 1 year Deposit for rent 0
Xiamen Jingwei Hardware Industry Co., Ltd 210,000.00 Over 1 year Deposit for rent 0
Zhangzhou Yisheng Packing Materials Co., Ltd 160,000.00 Over 1 year Deposit for rent 0
Total 1,730,720.00
(3) As at 30 Jun. 2009, the amount due to shareholders who own 5% or more than 5% voting right is as
followed:
Name of Shareholders Amount in arrear Aging Proportion % Reasons
Tsann Kuen (Taiwan) Enterprise Co.
Ltd
8,329,905.14 Within one year 3.50%
Not to maturity
EUPA (Hong Kong) Limited 157,133,700.00 Within one year 66.00% Not to maturity
Total 165,463,605.14 69.50%
9.27 Long-term borrowings due within one year
Items 2009.06.30 2008.12.31
Long-term borrowings due within one year 68,319,000.00 0.00
Total 68,319,000.00 0.00
9.28 Long-term loans
Types 2009.06.30 2008.12.31
Guaranteed loan 0.00 68,346,000.00
Total 0.00 68,346,000.00
9.29 Deferred Income
Items 2009.06.30 2008.12.31
Deferred income 46,603,733.73 43,400,202.15
Total 46,603,733.73 43,400,202.15
9.30 Deferred income tax liabilities
Types 2009.06.30 2008.12.31
Taxable temporary differences arising from available-for-sale
financial assets
31,236.64 14,232.82
Unrealized exchange gains and losses 0.00 622,195.82
Total 31,236.64 636,428.6451
9.31 Share capital
Chang in current reporting period（+、－）
Items 2008.12.31
Allotment
of shares
Bonus
shares
Transfer
reserve into
shares
Additional
offering
Others Subtotal
2009.06.30
I. Unlisted shares
Including: Shares held by the
State
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Share held by domestic
corporation
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Share held by foreign corporation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total unlisted shares 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
II. Listed circulation shares
1. RMB ordinary shares 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2. Domestically listed foreign
shares
1,112,350,077.00 0.00 0.00 0.00 0.00 0.00 0.00 1,112,350,077.00
3. Overseas listed foreign shares 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4. Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total listed shares 1,112,350,077.00 0.00 0.00 0.00 0.00 0.00 0.00 1,112,350,077.00
III. Total Share 1,112,350,077.00 0.00 0.00 0.00 0.00 0.00 0.00 1,112,350,077.00
9.32 Capital Reserves
Items 2008.12.31 Increment Decrement 2009.06.30
Share premium 62,019,360.00 0.00 0.00 62,019,360.00
Other capital reserves 63,054,383.50 60,108.18 0.00 63,114,491.68
Total 125,073,743.50 60,108.18 0.00 125,133,851.68
The increment in capital reserve is due to changes in fair value of available-for-sale financial assets.
9.33 Retained Earnings
Items 2009.06.30 2008.12.31
Retained profit as of 31 Dec. 2008 (893,107,158.60) (935,643,358.89)
Add: Transfer-in net profit in this period 20,163,216.18 42,536,200.29
Other transfer-in 0.00 0.00
Less：Withdrawal of statuary surplus reserve 0.00 0.00
Withdrawal of employees’ reward and welfare fund 0.00 0.00
Withdrawal of reserve fund 0.00 0.00
Withdrawal of Enterprise development fund 0.00 0.00
Reimbursement of investment 0.00 0.00
Less: dividends payable for preference shares 0.00 0.00
Withdrawal of discretionary surplus reserves 0.00 0.00
Dividends payable for ordinary shares 0.00 0.00
Dividends for ordinary shares transfer into capital 0.00 0.00
Balance as at 30 Jun. 2009 (872,943,942.42) (893,107,158.60)
9.34 Operating revenues and operating costs
(1) Items
Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Items
Operating revenue Operating cost Operating profit Operating revenue Operating cost Operating profit
Main
operation
1,147,374,671.39 1,019,651,336.00 127,723,335.39 2,057,915,920.07 1,917,936,482.56 139,979,437.51
Others 37,344,616.71 8,563,526.42 28,781,090.29 35,047,171.69 8,065,911.56 26,981,260.13
Total 1,184,719,288.10 1,028,214,862.42 156,504,425.68 2,092,963,091.76 1,926,002,394.12 166,960,697.6452
(2) Segment report of main operation by category of products:
Accumulative amount from Jan.-Category of Jun. 2009 Accumulative amount from Jan.-Jun. 2008
products Operating revenue Operating cost Operating profit Operating revenue Operating cost Operating profit
Catering
Cooking
536,929,822.94 458,392,494.49 78,537,328.45 929,524,208.62 835,032,752.06 94,491,456.56
Home best help 435,742,365.43 406,164,716.42 29,577,649.01 815,636,416.44 785,050,557.68 30,585,858.76
Tea/Coffee 140,681,760.01 124,504,414.45 16,177,345.56 289,102,493.45 274,959,805.79 14,142,687.66
Other 34,020,723.01 30,589,710.64 3,431,012.37 23,652,801.56 22,893,367.03 759,434.53
Total 1,147,374,671.39 1,019,651,336.00 127,723,335.39 2,057,915,920.07 1,917,936,482.56 139,979,437.51
(3) Segment report of main operation by areas:
Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Items
Operating revenue Operating cost Operating profit Operating revenue Operating cost Operating profit
America 480,136,612.90 415,316,892.87 64,819,720.03 876,640,761.95 802,941,933.29 73,698,828.66
Europe 232,649,511.17 209,432,091.91 23,217,419.26 445,505,283.92 427,287,197.27 18,218,086.65
Asia 386,272,469.26 357,287,898.12 28,984,571.14 561,454,748.61 532,482,308.61 28,972,440.00
other 48,316,078.06 37,614,453.10 10,701,624.96 174,315,125.59 155,225,043.39 19,090,082.20
Total 1,147,374,671.39 1,019,651,336.00 127,723,335.39 2,057,915,920.07 1,917,936,482.56 139,979,437.51
(4) Sales revenues form top five clients
Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Name of clients
Sales
Proportion to total sale
revenues
Sales
Proportion to total sale
revenues
Total sales revenues from the
top five clients
652,232,968.01 56.85% 825,678,618.32 40.12%
(5) Segment report of other business income and cost by category of business:
Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Items
Other operation income Other operation cost
Other operation
income
Other operation cost
Leftover material
sales
22,224,747.37 0.00 22,840,242.45 0.00
Rental income 11,758,063.65 5,615,221.94 8,974,099.62 5,084,776.19
Education income 2,113,482.98 2,100,983.38 1,534,308.86 1,080,885.08
Consultant fee 889,603.50 845,948.10 1,379,205.79 1,313,529.32
Other 358,719.21 1,373.00 319,314.97 586,720.97
Total 37,344,616.71 8,563,526.42 35,047,171.69 8,065,911.56
9.35 Business tax and surtax
Items Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Business tax 786,330.45 500,142.26
Educational surtax 1,058,838.38 1,262,543.12
Urban construction tax 875.50 0.00
Total 1,846,044.33 1,762,685.38
9.36 Financial expense
Items Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Interest expense 1,855,773.58 14,084,631.42
Less: Interest Income (2,810,689.25) (3,282,824.62)
Exchange gain (or loss) (1,055,862.03) 9,172,925.30
Bank charges 2,936,736.61 6,318,133.34
Total 925,958.91 26,292,865.44
9.37 Impairment loss of assets
Items Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Loss on bad debts (5,187,944.00) 1,236,803.72
Loss on falling price of inventories (36,096.07) 0.00
Loss on impairment of fixed assets 2,869,270.48 941,096.25
Total (2,354,769.59) 2,177,899.9753
9.38 Gain from changes in fair values
Source of Gain from changes in fair
values
Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Transaction financial assets 0.00 4,985,120.00
Including: Derivative financial assets 0.00 4,985,120.00
Transaction financial liabilities (547,025.01) 0.00
Including: Derivative financial liabilities (547,025.01) 0.00
Total (547,025.01) 4,985,120.00
9.39 Investment income
Source of investment income
Accumulative amount from
Jan.-Jun. 2009
Accumulative amount from
Jan.-Jun. 2008
Income from long-term equity investment measured by
cost method
7,500.00 0.00
Investment income obtained during held for tradable
financial assets
0.00 37,721,620.00
Investment income obtained during held for tradable
financial liabilities
(683,060.97) 0.00
Total (675,560.97) 37,721,620.00
9.40 Non-operating income
(1) Details of non-operating income:
Items Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Gains from disposal of non-current assets 7,209,772.81 4,563,139.95
Including: Gains from disposal of fixed
assets
7,209,772.81 4,563,139.95
Income from penalties 0.00 2,556.20
Government grants 2,700,117.03 317,000.00
Other 1,300,285.67 4,675,940.73
Total 11,210,175.51 9,558,636.88
(2) Government grants
Types
Accumulative
amount from
Jan.-Jun. 2009
Accumulative
amount from
Jan.-Jun. 2008
Approval organ Approval Documents
Encouragement funds for
technique innovation
program
500,000.00 20,000.00
Finance Bureau of Longhai
City
Zhangjingmaofazhan [2006] No. 263
Export insurance subsidy 2,000,717.03 0.00
Finance Bureau of Fujian
Province
《China Export & Credit Insurance
Corporation Fujian Branch》
Technology 0.00 48,000.00
Municipal Accounting
Center of Zhangzhou
Contract from proposed technology projects of
Zhangzhou
Subsidy for patent 0.00 179,000.00
Intellectual property Bureau
of Xiamen
Xiacaijiao (2006) No. 22
Other 199,400.00 70,000.00
Intellectual property Bureau
of Xiamen
Xiazhi [2009] No. 3 /《Intellectual
property Bureau of Xiamen》
Total 2,700,117.03 317,000.00
9.41 Non-operating expenses
Items Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Loss on disposal of non-current assets 1,020,524.77 0.00
Including: Loss on disposal of fixed assets 1,020,524.77 0.00
Losses on scraped fixed assets 176,091.87 4,183,809.37
Fines 5.14 37,836.77
Donation 300,000.00 2,030,000.00
Other 0.00 540,967.01
Total 1,496,621.78 6,792,613.1554
9.42 Income tax expense
Items Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Income Tax for current period (208,273.98) 380,885.55
Deferred Income Tax Expense 1,818,082.92 6,792,047.54
Total 1,609,808.94 7,172,933.09
9.43 Other consolidated income
Items Capital reserve Influence on income tax
Available-for-sale financial assets 60,108.18 31,236.64
Total 60,108.18 31,236.64
9.44 Cash received relate to other operating activities
Items Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Deposit collected 747,842.40 1,504,140.40
Rental 13,499,880.34 10,466,546.14
Interest Income 2,810,689.25 3,282,824.62
Income from compensation and penalties 0.00 2,556.20
Government grants 2,700,117.03 317,000.00
Other 17,266,302.96 40,663,105.09
Total 37,024,831.98 56,236,172.45
9.45 Cash paid relate to other operating activities
Items
Accumulative amount from
Jan.-Jun. 2009
Accumulative amount from Jan.-Jun.
2008
Compensation as to technological know-how 7,601,361.22 10,262,073.49
Bank commission charge 2,933,883.41 6,373,364.56
Expense for purchase and sales commission 9,152,208.41 988,829.25
Cash paid in Sales expense and administration expense 128,923,266.26 262,496,740.50
Penalties and donation 300,005.14 2,067,836.77
Total 148,910,724.44 282,188,844.57
9.46 Supplemental information for cash flow statement
Items
Accumulative amount from
Jan.-Jun. 2009
Accumulative amount
from Jan.-Jun. 2008
1 Adjusting net profit to cash flow from operating activities:
Net profit 27,056,315.48 34,395,235.69
Add: Impairment loss provision of assets (2,354,769.59) 2,177,899.97
Depreciation of fixed assets, oil and gas assets and production biological
assets 97,309,233.80 121,564,064.26
Amortization of intangible assets 1,627,202.29 1,420,102.16
Amortization of Long-term deferred expenses 39,662.94 744,163.50
Loss on disposal of fixed assets, intangible assets and other long-term
deferred assets（Loss/Gain +/－） (6,189,248.04) (379,330.58)
Loss on retirement of fixed assets（Loss/Gain +/－） 176,091.87
Loss on change in fair value（Loss/Gain +/－） 547,025.01 (4,985,120.00)
Financial cost（Loss/Gain +/－） 799,911.55 23,257,556.72
Loss on investment（Loss/Gain +/－） 675,560.97 (37,721,620.00)
Decrease of deferred income tax assets（Decrease/Increase +/-） 2,423,274.92 11,302,742.55
Increase of deferred income tax liabilities (Increase/Decrease +/-) (605,192.00) (4,520,416.11)
Decrease of inventories（Decrease/Increase +/-） 91,723,836.79 151,418,106.96
Decrease of operating receivables (Decrease/Increase +/-) (79,454,979.91) 39,640,416.57
Increase of operating payables (Increase/Decrease +/-) (169,821,613.46) (498,233,236.49)
Net cash flows arising from operating activities (36,047,687.38) (159,919,434.80)
Significant investing and financing activities that without cash flows
Debts transfer to capital - -
Net increase (decrease) of cash and cash equivalents:
Ending balance of cash equivalents 254,320,197.38 240,407,757.96
Less: Beginning balance of cash equivalents 399,276,546.68 534,372,308.53
Net increase of cash and cash equivalents (144,956,349.30) (293,964,550.57)55
9.47 Cash and cash equivalent
Items
Accumulative amount from
Jan.-Jun. 2009
Accumulative amount from
Jan.-Jun. 2008
1. Cash
Including: Cash on hand 517,083.03 657,317.98
Unrestricted bank deposit 209,572,299.85 123,996,344.53
Unrestricted other monetary funds 44,230,814.50 115,754,095.45
2. Ending balance of cash and cash equivalents 254,320,197.38 240,407,757.96
Including: Restricted cash or cash equivalent of the parent company
or subsidiaries in the Group
47,451,386.43 65,843,777.28
X. Notes to financial statements for parent company
10.1 Account receivable
(1) Breakdown of account receivable
2009.06.30 2008.12.31
Items Balance Proportion% Bad debit
provision
Net value Balance Proportion% Bad debit
provision
Net value
Individual transaction with
significant amount
0.00 0.00% 0.00 0.00 36,375.82 100.00% 0.00 36,375.82
Individual transaction with not so
significant amount but significant
recoverable risk
0.00 0.00% 0.00 0.00 0.00 0.00% 0.00 0.00
Other transaction with no
significant amount
0.00 0.00% 0.00 0.00 0.00 0.00% 0.00 0.00
Total 0.00 0.00% 0.00 0.00 36,375.82 100.00% 0.00 36,375.82
(2) Aging analysis
2009.06.30 2008.12.31
Aging Balance Proportion% Bad debit
provision
Net value Balance Proportion% Bad debit
provision
Net value
Within 1 year 0.00 0.00% 0.00 0.00 36,375.82 100.00% 0.00 36,375.82
1-2 years 0.00 0.00% 0.00 0.00 0.00 0.00% 0.00 0.00
2-3 years 0.00 0.00% 0.00 0.00 0.00 0.00% 0.00 0.00
Above 3 years 0.00 0.00% 0.00 0.00 0.00 0.00% 0.00 0.00
Total 0.00 0.00% 0.00 0.00 36,375.82 100.00% 0.00 36,375.82
(3) Up to 30 Jun. 2009, there is no amount due from shareholder who own 5% or over 5% of voting
shares.
10.2 Other receivables
(1) Breakdown of other receivables
2009.06.30 2008.12.31
Items Balance Proportion% Bad debit
provision
Net value Balance Proportion% Bad debit
provision
Net value
Individual transaction
with significant amount
15,269,358.97 88.98% 0.00 15,269,358.97 3,608,990.00 82.12% 2,272,697.00 1,336,293.00
Individual transaction
with not so significant
amount but significant
recoverable risk
1,212,777.26 7.07% 1,212,777.26 0.00 0.00 0.00% 0.00 0.00
Other transaction with
no significant amount
677,430.25 3.95% 30,200 647,230.25 10,983,335.66 17.88% 214,648.14 10,768,687.52
Total 17,159,566.48 100.00% 1,242,977.26 15,916,589.22 14,592,325.66 100.00% 2,487,345.14 12,104,980.5256
(2) Aging analysis
2009.06.30 2008.12.31
Aging Balance Proportion% Bad debit
provision
Net value Balance Proportion% Bad debit
provision
Net value
Within 1 year 15,946,789.22 92.93% 30,200.00 15,916,589.22 12,685,555.66 86.93% 580,575.14 12,104,980.52
1-2 years 1,212,777.26 7.07% 1,212,777.26 0.00 1,906,770.00 13.07% 1,906,770.00 0.00
2-3 years 0.00 0.00% 0.00 0.00 0.00 0.00% 0.00 0.00
Over 3 years 0.00 0.00% 0.00 0.00 0.00 0.00% 0.00 0.00
Total 17,159,566.48 100.00% 1,242,977.26 15,916,589.22 14,592,325.66 100.00% 2,487,345.14 12,104,980.52
(3) Up to 30 Jun. 2009, there is no amount due from shareholder who own 5% or over 5% of voting
shares.
(4) The total amount of top five other receivable is 16,886,803.33, represent 98.41% of ending balance
Name Amount Nature Aging Proportion%
Tsann Kuen (Zhangzhou) Enterpeise Co. Ltd 13,360,368.97 Payment for goods Within 30 days 77.86%
People’s Court of HuLi District, Xiamen City 1,908,990.00
To pay margins of preservation prior
to lawsuit
Within 1 year
11.12%
Ni Yi Lian 1,100,000.00
Payment for selling 9/F of
Information Building
Over 1 year 6.41%
Xia Men Shou Chuang Jun He Patent Firm Ltd 317,444.36 To pay patent expense Within 1 year 1.85%
Hong Shao Shu 200,000.00 Temporary business agency fees Within 1 year 1.17%
Total 16,886,803.33 98.41%
10.3 Long-term Equity Investment
(1) Long-term equity investment and impairment loss provision:
2009.06.30 2008.12.31
Item
Investment cost
Impairment
loss provision Carrying value
Investment
cost
Impairment
loss provision Carrying value
Investing in
subsidiaries
1,135,712,021.76 130,646,542.91 1,005,065,478.85 1,130,712,021.76 130,646,542.91 1,000,065,478.85
Other equity
investment
40,000.00 0.00 40,000.00 40,000.00 0.00 40,000.00
Total 1,135,752,021.76 130,646,542.91 1,005,105,478.85 1,130,752,021.76 130,646,542.91 1,000,105,478.85
(2) Long-term equity investment measured by cost method:
Investee
Initial
Investment cost
2008.12.31
Increment Decrement
2009.06.30
Tsann Kuen (ShangHai) Enterprise
Ltd(TKS)
194,545,872.18 194,545,872.18 0.00 0.00 194,545,872.18
Tsann Kuen (ZhangZhou) Enterprise
Ltd(TKL) (Note1)
921,914,701.56 921,914,701.56 0.00 0.00 921,914,701.56
Tsann Kuen (Zhangzhou) South Port
Electronics Enterprise Co., Ltd. (TKN)
3,750,000.00 3,750,000.00 0.00 0.00 3,750,000.00
Eupa (Hong Kong) Ltd(EUPA) 10,503,848.02 10,501,448.02 0.00 0.00 10,501,448.02
Xiamen Canxing International Travel
Agency Co., Ltd. (Xiamen Canxing
Travel)
5,000,000.00 0.00 5,000,000.00 0.00 5,000,000.00
Xiamen Foreign Investment
Enterprises Association
40,000.00 40,000.00 0.00 0.00 40,000.00
Total 1,135,754,421.76 1,130,752,021.76 5,000,000.00 0.00 1,135,752,021.76
(3) Long-term equity investment measured by cost method
Investee
Carrying balance as of
31 Dec. 2008
Withdrawal Decrease
Carrying balance as of
30 Jun. 2009
Tsann Kuen (ShangHai)
Enterprise Ltd(TKS)
130,646,542.91 0 0.00 130,646,542.91
Total 130,646,542.91 0 0.00 130,646,542.9157
10.4 Operating revenues and operating costs
(1) Items
Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Items
Operating revenue Operating cost Operating profit Operating revenue Operating cost Operating profit
Main
operation
0.00 0.00 0.00 2,221,434.03 3,423,454.91 (1,202,020.88)
Others 2,706,627.73 2,645,120.32 61,507.41 8,053,175.67 5,867,782.75 2,185,392.92
Total 2,706,627.73 2,645,120.32 61,507.41 10,274,609.70 9,291,237.66 983,372.04
(2) Segment report of other operation income and cost by category of businesses:
Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Items
Other operation income Other operation cost Other operation income Other operation cost
Leftover material
sales
0.00 0.00 53,098.76 0.00
Rental income 1,818,382.22 1,799,172.22 6,636,693.55 5,867,782.75
Consultant fee 888,245.51 845,948.10 1,363,383.36 0.00
Total 2,706,627.73 2,645,120.32 8,053,175.67 5,867,782.75
10.5 Business tax and surtax
Items Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Business tax 142,675.31 342,287.69
Education fee 1,347.82 46,987.22
Total 144,023.13 389,274.91
10.6 Investment income
Source of investment income Accumulative amount from Jan.-Jun. 2009 Accumulative amount from Jan.-Jun. 2008
Income from long-term equity investment
measured by cost method
7,500.00 0.00
Total 7,500.00 0.00
XI. Related party and related party transactions
11.1 Confirmation related parties
The Company has control, jointly control or significant influence on the other party, or is under same party’s control,
jointly control or significant influence with other company, is deemed as related parties.
11.2 The relationship of related parties
(1) Related party with controllable relationship
Name
Registration
address
Main operation Registration number
Relation of with the
company
Nature
Legal representative
Tsann Kuen (Taiwan)
Enterprise Co., Ltd
Taiwan Manufacturing
北市商一字第
00408469-10 号
Final controlling party Listed company Zhuang Xing
Information of other subsidiaries are shown in note VI
(2) The registered capital and changes the related parties with controllable relationship (NT＄)
Name 2008.12.31 Incremental Decrement 2009.06.30
Tsann Kuen (Taiwan) Enterprise Co., Ltd 3,209,978,410 —— —— 3,209,978,410
(3) Particulars about equities held by related party with controllable relationship and related change
Name 2008.12.31 proportion
%
Incremental Decrement 2009.6.30 proportion%
Tsann Kuen (Taiwan)
Enterprise Co., Ltd
861,792,526 50.26 41,914,058 0.00 903,706,584 49.79
Tsann Kuen Enterpise Co., Ltd holds the Company’s shares by holding the Company’s subsidiaries of EUPA
(Hongkong) Industry Co., Ltd, Fordchee (Hongkong) Co., Ltd and Hongkong Fillman Investment Co., Ltd.58
(4) The related party without controllable relationship
Relate Party Organization code Relationship
EUPA (Hongkong) Industry Co., Ltd 12959659-000-07-6 Shareholder
Tsann Kuen(USA) Co., Ltd Under control by the same holding company
Tsann Kuen(Japan) Co., Ltd 0105-01-021064 Under control by the same holding company
Xiamen Shengming Electronic Co., Ltd 61201968-5 Under control directly by key management and closed family members
11.3 Related party transactions between the Company and the above related party
(1) Sales of accessories and finished products
Related parties
Accumulative amount in the current
period
Accumulative amount at the same period
of last year
Tsann Kuen(Japan) Co., Ltd 116,360,731.09 195,914,939.66
Tsann Kuen (Taiwan) Enterprise Co., Ltd 34,435,924.06 51,153,040.60
Xiamen Shengming Electronic Co., Ltd 20,423.23 12,729.68
Total 150,817,079.38 247,080,709.94
The price of transaction between the Company and related parties is based on the market price in
contract signed by both parties.
(2) Purchase of raw materials, spare parts and machine accessories
Related parties
Accumulative amount in the current
period
Accumulative amount at the same period
of last year
Tsann Kuen(Japan) Co., Ltd 604,590.03 44,469,876.30
Xiamen Shengming Electronic Co., Ltd 22,470,088.03 36,022,584.92
Tsann Kuen (Taiwan) Enterprise Co., Ltd 18,372,929.16 54,671,949.70
Total 41,447,607.22 135,164,410.92
The Company and its subsidiaries purchase raw materials, spare parts and machine accessories from
related parties at cost price except Xiamen Shengming Electronic Co., Ltd. The Company purchases raw
materials, spare parts and machine accessories Xiamen Shengming Electronic Co., Ltd at market price in
the contract signed by both parties.
(3) Purchase of modules and machineries
Related parties
Accumulative amount in the current
period
Accumulative amount at the same period
of last year
Tsann Kuen (Taiwan) Enterprise Co., Ltd 1,277,645.01 6,697,202.06
Total 1,277,645.01 6,697,202.06
The Company purchases asset from related parties at its carrying value.
(4) Internal borrowings
Related parties
Accumulative amount in the current
period
Accumulative amount at the same period
of last year
EUPA (Hongkong) Industry Co., Ltd 157,133,700.00 234,433,000.00
Total 157,133,700.00 234,433,000.0059
(5) Other transactions
Related party Content
Accumulative
amount in the current
period
Accumulative amount at
the same period of last
year
Payment
Tsann Kuen (Taiwan) Enterprise
Co., Ltd
Technical knowledge support fee (note
1)
7,601,361.22 10,262,073.49
Tsann Kuen(USA) Co., Ltd Pay for after sales service in America
area (note 2)
646,779.34 2,080,281.68
Tsann Kuen (Taiwan) Enterprise
Co., Ltd Pay for procurement agencies (note 3)
1,000,104.12 988,829.25
Tsann Kuen(Japan) Co., Ltd selling commission (note 4) 5,233,549.98 7,511,179.24
Tsann Kuen (Taiwan) Enterprise
Co., Ltd consulting fees (note 5)
0.00 2,059,402.02
Total 14,481,794.66 22,901,765.68
Income
Xiamen Shengming Electronic Co.,
Ltd consulting fees (note6)
889,603.50 1,379,205.79
Total 889,603.50 1,379,205.79
Note 1: The Company and its subsidiaries measure technical knowledge support fees base on
proportionate monthly excess accumulated sales of net amount of licensed products.
Note 2: Tsann Kuen (USA) Co., Ltd provides after sales services in America area for the Company and
its subsidiaries’ sales in American area, the company and its subsidiaries pay for those after sales service
base on 102% of the actual expense incurred.
Note 3: The Company and its subsidiaries entrust Tsann Kuen Enterprise Co., Ltd to purchase raw
material, modules and machineries. The procurement agency fees (including service charges) are
calculated base on 110% of the actual procurement expense incurred by the agencies.
Note 4: It refers to relative product quality expenses for those sales from TKL to TKJ.
Note 5: Tsann Kuen Enterprise Co., Ltd provided professional consultant service for the company and
its subsidiaries related to the worldwide purchase activities. The company and its subsidiaries pay for the
consultant fees base on 105% of the actual related expenses incurred.
Note 6: The Company assists Xiamen Shengming Electronic Co., Ltd for its management, the consulting
fees from Xiamen Shengming Electronic Co., Ltd are calculated base on 105% of actual expenses
incurred from the assistance of management.60
11.4 The balance of payables and receivables among related parties
2009.06.30 2008.12.31
Related party
Amount Proportion% Amount Proportion%
Accounts receivable
Tsann Kuen (Japan) Co., Ltd 84,720,358.98 23.48% 61,813,298.98 13.67%
Xiamen Shengming Electronic Co., Ltd 15,211.82 0.00% 34,784.20 0.01%
Tsann Kuen (Taiwan) Enterprise Co., Ltd 18,618,197.43 5.16% 27,157,898.62 6.01%
Total 103,353,768.23 28.64% 89,005,981.80 19.69%
Accountants Payable
Xiamen Shengming Electronic Co., Ltd 7,380,370.10 1.41% 411,418.86 0.05%
Tsann Kuen (Taiwan) Enterprise Co., Ltd 7,167,658.92 1.37% 13,633,806.27 1.81%
Tsann Kuen (Japan) Co., Ltd 34,909.65 0.01% 1,242,838.44 0.16%
Total 14,582,938.67 2.79% 15,288,063.57 2.02%
Other accountant payable
Tsann Kuen (USA) Co., Ltd 27,267.23 0.01% 423,167.88 0.11%
Tsann Kuen (Japan) Co., Ltd 3,702,616.89 1.56% 1,980,480.74 0.50%
Xiamen Shengming Electronic Co., Ltd 162,205.79 0.07% 49,515.15 0.01%
EUPA (Hongkong) Industry Co., Ltd 157,133,700.00 66.00% 157,195,800.00 39.67%
Fordchee (Hongkong) Co., Ltd 0.00 0.00% 82,015,200.00 20.70%
Hongkong Fillman Investment Co., Ltd 0.00 0.00% 34,173,000.00 8.62%
Tsann Kuen (Taiwan) Enterprise Co., Ltd 8,329,905.14 3.50% 17,482,751.86 4.41%
Total 169,355,695.05 71.13% 293,319,915.63 74.02%
Advance to supplier
Xiamen Shengming Electronic Co., Ltd 0.00 0.00% 1,468,866.52 16.48%
Total 0.00 0.00% 1,468,866.52 16.48%
Advance from customers
Xiamen Shengming Electronic Co., Ltd 0.00 0.00% 193.02 0.01%
Total 0.00 0.00% 193.02 0.01%
XII. Contingencies
As to the customer complaints on the holdings subsidiary, Tsannkuen (Zhangzhou) Enterprise Co.,Ltd
( here-in-after referred to as 'TKL') about the coffee grinders shipped to Starbucks (Chinese name is
called “星巴克”) during 2002-2008.After some negotiation, Starbucks and U.S. consumer Product
Safety Commission (hereinafter referred to as “CPSC”) agreed to callback by goods replacement. The
traders has placed an order with Tsann Kuen (Zhangzhou) Enterprise Co., Ltd. (a subsidiary under
controlled by the Company, hereinafter referred to as “TKL”) for 40,000-set coffee grinders in the light
of the quantity declared by the consumers and the potential recall in the future.As at the date of the
announcement, TKL has been delivered 21,804-set finished products. The influence on profit and loss is
about RMB 715,063.61
XIII. Commitment
13.1 Capital Commitment: Naught
13.2 Leased commitment
Up to balance sheet date, the irrevocable operating lease contracts signed with third parties as followed:
Items 30 Jun. 2009 31 Dec. 2008
RMB’000 RMB’000
Minimum lease payment of irrevocable operating
leases
House lease
1st year after balance sheet date 40,000 40,000
2nd year after balance sheet date 40,000 40,000
3rd year after balance sheet date 40,000 40,000
Years after 1,600,000 1,640,000
Total 1,720,000 1,760,000
XIV. Return on equity and earnings per share
Return on equity (%) Earnings per share (RMB/share)
Profit in the report period
Fully diluted
Weighted
average
Basic earnings
per share
Diluted earnings
per share
Net profit attributable to
shareholders of listed company
20,163,216.18 5.54% 5.70% 0.0181 0.0181
Net profit after deducting
non-recurring gains and losses
17,747,955.08 4.88% 5.02% 0.0160 0.016062
Tsann Kuen (China) Enterprise Co., Ltd
Balance Sheet (Un-audited)
30 Jun. 2009
Monetary unit: ( RMB) Yuan
30 Jun. 2009 31 Dec. 2008
Assets Note
Consolidation Parent Company Consolidation Parent Company
Current Assets:
Monetary Funds IX.1 301,771,583.81 400,802.17 416,506,274.82 4,939,594.77
Tradable financial assets - - - -
Notes receivables IX.2 4,805,162.64 - 5,823,544.00 -
Account receivables IX.3 307,577,172.88 - 397,162,581.71 36,375.82
Advances to suppliers IX.4 1,760,148.92 96,000.00 8,910,798.94 -
Interest receivables - - - -
Dividends receivable - - - -
Other receivables IX.5 16,261,480.87 15,916,589.22 28,986,324.35 12,104,980.52
Inventories IX.6 360,520,923.63 - 451,226,252.40 -
Non-current assets due within
one year
- - - -
Other current assets - - - -
Total current assets 992,696,472.75 16,413,391.39 1,308,615,776.22 17,080,951.11
Non-current assets:
Available-for-sale financial assets IX.7 186,883.20 186,883.20 109,771.20 109,771.20
Held-to-maturity investments - - - -
Long-term account receivables IX.8 104,700,136.71 - 68,487,888.93 -
Long-term equity investments IX.9 40,000.00 1,005,105,478.85 40,000.00 1,000,105,478.85
Investment properties IX.10 36,793,028.79 42,276,958.73 37,454,887.11 43,714,625.57
Fixed assets IX.11 628,125,935.89 24,538,753.31 764,092,618.51 26,967,210.64
Construction in progress IX.12 2,408,838.28 1,361,577.36 3,424,340.41 -
Construction materials - - - -
Liquidation of fixed assets - - - -
Production biology assets - - - -
Oil and gas assets - - - -
Intangible assets IX.13 29,407,832.43 16,192,842.59 30,593,459.40 16,643,800.55
Development expenses - - - -
Goodwill IX.14 71,870.08 - - -
Long-term deferred assets IX.15 833,109.94 141,108.13 872,772.88 155,458.15
Deferred income tax assets IX.16 20,255,626.25 - 22,678,901.17 -
Other non-current assets - - - -
Total non-current assets 822,823,261.57 1,089,803,602.17 927,754,639.61 1,087,696,344.96
Total assets 1,815,519,734.32 1,106,216,993.56 2,236,370,415.83 1,104,777,296.07
Legal Representative: Jian Derong CFO: Chen Zongyi Person in charge of Accounting Office: Chen Zongyi Lister: Chen Zongyi
(The notes form an integral part of these consolidated financial statements.)63
Tsann Kuen (China) Enterprise Co., Ltd
Balance Sheet (Un-audited)-Con.
30 Jun. 2009
Monetary unit: ( RMB) Yuan
30 Jun. 2009 31 Dec. 2008
Items Note
Consolidation Parent Company Consolidation Parent Company
Current liabilities:
Short-term loans IX.19 22,478,317.38 - - -
Tradable financial liabilities IX.20 547,025.01 - - -
Notes payables IX.21 85,754,485.24 - 177,596,760.89
Account payables IX.22 522,343,190.54 1,129,044.33 754,405,955.98 142,211.99
Advances from customers IX.23 24,043,681.07 - 21,452,230.01 -
Payroll payables IX.24 40,681,312.38 113,766.55 48,805,639.01 111,791.55
Tax payable IX.25 58,274,007.46 68,248,094.89 44,278,598.83 69,208,975.75
Interest payables - - - -
Dividend payables - - - -
Other account payables IX.26 238,077,487.57 631,745,787.91 396,253,973.13 627,777,161.60
Long-term borrowings due within one year IX.27 68,319,000.00 - - -
Other current liabilities - - - -
Total current liabilities 1,060,518,506.65 701,236,693.68 1,442,793,157.85 697,240,140.89
Non-current liabilities:
Long-term borrowings IX.28 - - 68,346,000.00 -
Bond payable - - - -
Long-term account payable - - - -
Special account payable - - - -
Deferred incomes IX.29 46,603,733.73 - 43,400,202.15 -
Accrued liabilities 0.00 - -
Deferred income tax liabilities IX.30 31,236.64 31,236.64 636,428.64 14,232.82
Other non-current liabilities - - - -
Total non-current liabilities 46,634,970.37 31,236.64 112,382,630.79 14,232.82
Total liabilities 1,107,153,477.02 701,267,930.32 1,555,175,788.64 697,254,373.71
Shareholders' equity:
Share capital IX.31 1,112,350,077.00 1,112,350,077.00 1,112,350,077.00 1,112,350,077.00
Capital reserve IX.32 125,133,851.68 123,610,127.96 125,073,743.50 123,550,019.78
Less: treasury stock
Surplus reserve - - - -
Retained earnings IX.33 (872,943,942.42) (831,011,141.72) (893,107,158.60) (828,377,174.42)
Exchange difference of foreign currency
financial statements translation
(837,144.85) - (539,902.93) -
Equity attributable to the holders of parent
company
363,702,841.41 404,949,063.24 343,776,758.97 407,522,922.36
Minority interests 344,663,415.89 - 337,417,868.22 -
Total shareholders’ equity 708,366,257.30 404,949,063.24 681,194,627.19 407,522,922.36
Total liabilities and shareholders’ equity 1,815,519,734.32 1,106,216,993.56 2,236,370,415.83 1,104,777,296.07
Legal Representative: Jian Derong CFO: Chen Zongyi Person in charge of Accounting Office: Chen Zongyi Lister: Chen Zongyi
(The notes form an integral part of these consolidated financial statements.)64
Tsann Kuen (China) Enterprise Co., Ltd
Income Statement – (Un-audited)
January – June 2009
Monetary unit: ( RMB) Yuan
January–June 2009 January–June 2008
Items Note
Consolidation Parent Company Consolidation Parent Company
1. Total operating income IX.34 1,184,719,288.10 2,706,627.73 2,092,963,091.76 10,274,609.70
Less: Operating cost IX.34 1,028,214,862.42 2,645,120.32 1,926,002,394.12 9,291,237.66
Business taxes and surtax IX.35 1,846,044.33 144,023.13 1,762,685.38 389,274.91
Selling expenses 39,791,416.35 - 52,124,346.98 -
Administrative expenses 96,120,619.01 3,914,353.55 88,507,494.82 4,739,690.00
Financial costs IX.36 925,958.91 506,023.23 26,292,865.44 (6,452,430.99)
Impairment loss of assets IX.37 (2,354,769.59) (1,244,367.88) 2,177,899.97 926,555.05
Add: gains from the fair value changes
(The loss is listed beginning with “-“)
IX.38 (547,025.01) - 4,985,120.00 -
Investment income (The loss is listed
beginning with “-“)
IX.39 (675,560.97) 7,500.00 37,721,620.00 -
II. Operating profit 18,952,570.69 (3,251,024.62) 38,802,145.05 1,380,283.07
Add: non-operating income IX.40 11,210,175.51 614,342.39 9,558,636.88 2,822,833.29
Less: non-operating expense IX.41 1,496,621.78 (2,714.93) 6,792,613.15 258,565.43
Including: loss from disposal of non-current
assets 1,020,524.77 (2,714.93)
III. Total profits (The loss is listed
beginning with “-“) 28,666,124.42 (2,633,967.30) 41,568,168.78 3,944,550.93
Less: income tax expense IX.42 1,609,808.94 - 7,172,933.09 -
IV. Net profits (the net loss is listed
beginning with “-”) 27,056,315.48 (2,633,967.30) 34,395,235.69 3,944,550.93
Net profits attributable to equity
holders of the parent company
20,163,216.18 (2,633,967.30) 27,749,022.72 3,944,550.93
Minority interests 6,893,099.30 - 6,646,212.97 -
V. Earnings per share
1. Basic earnings per share 0.0181 0.0249
2. Diluted earnings per share 0.0181 0.0249
VI. Other consolidated income IX.43 60,108.18 (82,325.38)
VII. Total consolidated income 27,116,423.66 34,312,910.31
Total consolidated income attributable
to owners of parent company
20,223,324.36 27,666,697.34
Total consolidated income attributable
to minority interest
6,893,099.30 6,646,212.97
Legal Representative: Jian Derong CFO: Chen Zongyi Person in charge of Accounting Office: Chen Zongyi Lister: Chen Zongyi
(The notes form an integral part of these consolidated financial statements.)65
Tsann Kuen (China) Enterprise Co., Ltd
Cash Flow Statement (Un-audited)
January - June 2009
Monetary unit: ( RMB) Yuan
January–June 2009 January–June 2008
Items Note
Consolidation Parent Company Consolidation Parent Company
I. Cash flows from operating activities:
Cash received from sales of goods or rendering of
services 1,274,906,800.81 - 1,843,216,916.92 6,108,467.06
Tax refund 67,793,346.42 - 75,561,779.56 -
Cash received related to other operating activities IX.44 37,024,831.98 19,833,717.68 56,236,172.45 87,886,439.26
Subtotal of cash inflow from operating activities 1,379,724,979.21 19,833,717.68 1,975,014,868.93 93,994,906.32
Cash paid for sales of goods and received services 1,097,811,391.75 118,008.42 1,604,687,103.17 386,033.07
Cash paid to and on behalf of employees 157,865,803.60 15,632,959.79 229,813,522.35 16,482,504.47
Tax payments 11,184,746.80 1,464,239.15 18,244,833.64 3,285,173.66
Cash paid to other operating activities IX.45 148,910,724.44 4,558,189.64 282,188,844.57 80,181,391.21
Subtotal of Cash outflow from operating
activities 1,415,772,666.59 21,773,397.00 2,134,934,303.73 100,335,102.41
Net cash flow arising from operating activities (36,047,687.38) (1,939,679.32) (159,919,434.80) (6,340,196.09)
II. Cash flow from investment activities:
Cash received from investments 421,500.00 - - -
Cash dividends received from investment 7,500.00 7,500.00 - -
Net cash received from disposal of fixed assets,
intangible assets and other long-term assets 11,765,565.84 - 8,374,700.50 7,822,888.77
Net cash received from disposal of subsidiaries an
other business units - - - -
Cash received related to other investing activities - - - -
Subtotal of cash inflow from investing activities 12,194,565.84 7,500.00 8,374,700.50 7,822,888.77
Cash paid to acquire and construct fixed assets,
intangible assets and other long-term assets 24,443,477.66 418,550.00 30,033,017.45 95,150.00
Cash paid to acquire investments - 5,000,000.00 - 3,473,600.00
Net cash paid to acquire subsidiaries and other
business units - - - -
Cash paid related to other investing activities - - - -
Subtotal of Cash outflow from investing
activities 24,443,477.66 5,418,550.00 30,033,017.45 3,568,750.00
Net cash flow arising from investing activities (12,248,911.82) (5,411,050.00) (21,658,316.95) 4,254,138.77
III. Cash flow from financing activities:
Cash received from investments - - 50,000.00 -
Including: subsidiaries received cash investment
from minority shareholders - - 50,000.00 -
Cash received from loans 253,061,652.18 157,261,700.00 364,900,969.19 234,248,600.00
Cash received from issuance of securities - - - -
Cash received related to other financing activities - 120,000,000.00 - -
Subtotal of cash inflow from financing activities 253,061,652.18 277,261,700.00 364,950,969.19 234,248,600.00
Repayment of loans or debts 349,085,555.47 274,400,368.22 471,533,960.27 -
Cash paid for dividends, profits, or interests - - - -
Including: subsidiaries paid to minority
shareholders with cash dividends and profits - - - -
Cash paid related to other financing activities - - - 232,899,900.00
Subtotal of cash outflow from financing activities 349,085,555.47 274,400,368.22 471,533,960.27 232,899,900.00
Net cash flow arising from financing activities (96,023,903.29) 2,861,331.78 (106,582,991.08) 1,348,700.00
IV. Effects on cash and cash equivalents for the
change of foreign exchange rates (635,846.81) (49,395.06) (5,803,807.74) (646,790.32)
V. Net increase in cash and cash equivalents (144,956,349.30) (4,538,792.60) (293,964,550.57) (1,384,147.64)
Add: beginning balance of cash and cash
equivalents 399,276,546.68 4,939,594.77 534,372,308.53 3,722,741.66
VI .Ending balance of cash and cash equivalents IX.47 254,320,197.38 400,802.17 240,407,757.96 2,338,594.02
Legal Representative: Jian Derong CFO: Chen Zongyi Person in charge of Accounting Office: Chen Zongyi Lister: Chen Zongyi
(The notes form an integral part of these consolidated financial statements.)66
Tsann Kuen (China) Enterprise Co., Ltd
Consolidated Statement of Changes in Equity
30 June 2009
Monetary unit: ( RMB) Yuan
Amount for the current period Amount for the same period of last year
Equity attributable to the holders of parent company Equity attributable to the holders of parent company
Items
Share capital Capital reserve
Capital
surplus
Retained earnings Other
Minority
interests
Total equity
Share capital Capital reserve
Capital
surplus
Retained earnings Other
少数股东权益 所有者权益合计
I. Balance at the end of last year 1,112,350,077.00 125,073,743.50 0.00 (893,107,158.60) (539,902.93) 337,417,868.22 681,194,627.19 1,112,350,077.00 126,726,569.01 0.00 (935,643,358.89) (252,565.30) 321,152,341.65 624,333,063.47
II. Balance at the beginning of this
year 1,112,350,077.00 125,073,743.50 - (893,107,158.60) (539,902.93) 337,417,868.22 681,194,627.19 1,112,350,077.00 126,726,569.01 0.00 (935,643,358.89) (252,565.30) 321,152,341.65 624,333,063.47
III. Increase/ decrease of amount in
this year (“-” means decrease) - 60,108.18 - 20,163,216.18 (297,241.92) 7,245,547.67 27,171,630.11 - (1,652,825.51) - 42,536,200.29 (287,337.63) 16,265,526.57 56,861,563.72
(I) Net profit - - - 20,163,216.18 - 6,893,099.30 27,056,315.48 - - - 42,536,200.29 13,386,205.51 55,922,405.80
(II)Gain/loss listed to owners’ equity
directly - 60,108.18 - - - - 60,108.18 - (1,652,825.51) - - - 2,829,321.06 1,176,495.55
1. Net amount on changes in book
value of financial assets available for
sale
- 60,108.18 - - - - 60,108.18 - (115,305.12) - - - - (115,305.12)
2. Effect on income tax related to
items listed to owners’ equity - - - - - - - - - - - - - -
3. Others - - - - - - - - (1,537,520.39) - - - 2,829,321.06 1,291,800.67
Subtotal of (I)and (II) 0.00 60,108.18 0.00 20,163,216.18 0.00 6,893,099.30 27,116,423.66 - (1,652,825.51) - 42,536,200.29 - 16,215,526.57 57,098,901.35
(III) Input an reduced capital of
owners - - - - - 352,448.37 352,448.37 - - - - - 50,000.00 50,000.00
1. Input capital of owners - - - - - 421,500.00 421,500.00 - - - - - 50,000.00 50,000.00
2. Amount of Shares included in the
owners’ equity - - - - - - - - - - - - -
3. Others - - - - - (69,051.63) (69,051.63) - - - - - - -
(IV) Profit distribution - - - - - - - - - - - - - -
1．Withdrawing surplus public
reserve - - - - - - - - - - - - - -
2. Withdrawing general risk reserve - - - - - - - - - - - - - -
3. Distribution to owners
(shareholders) - - - - - - - - - - - - - -
4. Other - - - - - - - - - - - - - -
(V)Internal carrying forward of
owners’ equity - - - - - - - - - - - -
1. New increase of capital (share
capital) from capital reserves - - - - - - - - - - - - - -
2. Convert surplus reserves to
capital(share capital) - - - - - - - - - - - - - -
3. Surplus reserves make up losses - - - - - - - - - - - -
4. Others - - - - - - - - - - -
(VI) Other (297,241.92) - (297,241.92) (287,337.63) (287,337.63)
IV. Balance at the end of this period 1,112,350,077.00 125,133,851.68 - (872,943,942.42) (837,144.85) 344,663,415.89 708,366,257.30 1,112,350,077.00 125,073,743.50 - (893,107,158.60) (539,902.93) 337,417,868.22 681,194,627.19
Legal Representative: Jian Derong CFO: Chen Zongyi Person in charge of Accounting Office: Chen Zongyi Lister: Chen Zongyi
(The notes form an integral part of these consolidated financial statements.)67
Tsann Kuen (China) Enterprise Co., Ltd
Statement of Changes in Equity of Parent Company
30 June 2009
Monetary unit: ( RMB) Yuan
Amount for the current period Amount for the same period of last year
Items
Share capital Capital reserve
Capital
surplus
Retained earnings Total equity Share capital Capital reserve
Capital
surplus
Retained earnings Total equity
I. Balance at the end of last year 1,112,350,077.00 123,550,019.78 0.00 (828,377,174.42) 407,522,922.36 1,112,350,077.00 123,665,324.90 0.00 (627,995,170.14) 608,020,231.76
II. Balance at the beginning of this year 1,112,350,077.00 123,550,019.78 - (828,377,174.42) 407,522,922.36 1,112,350,077.00 123,665,324.90 0.00 (627,995,170.14) 608,020,231.76
III. Increase/ decrease of amount in this year (“-” means decrease) - 60,108.18 - (2,633,967.30) (2,573,859.12) - (115,305.12) 0.00 (200,382,004.28) (200,497,309.40)
(I) Net profit - - - (2,633,967.30) (2,633,967.30) - - - (200,382,004.28) (200,382,004.28)
(II)Gain/loss listed to owners’ equity directly - 60,108.18 - - 60,108.18 - (115,305.12) - - (115,305.12)
1. Net amount on changes in book value of financial assets available for sale - 60,108.18 - - 60,108.18 - (115,305.12) - - (115,305.12)
2. Effect on income tax related to items listed to owners’ equity - - - - - - - - - -
3. Others - - - - - - - - -
Subtotal of (I)and (II) 0.00 60,108.18 0.00 (2,633,967.30) (2,573,859.12) - (115,305.12) - (200,382,004.28) (200,497,309.40)
(III) Input an reduced capital of owners - - - - - - - - - -
1. Input capital of owners - - - - - - - - - -
2. Amount of Shares included in the owners’ equity - - - - - - - - - -
3. Others - - - - - - - - - -
(IV) Profit distribution - - - - - - - - - -
1．Withdrawing surplus public reserve - - - - - - - - - -
2. Withdrawing general risk reserve - - - - - - - - - -
3. Distribution to owners (shareholders) - - - - - - - - - -
4. Other - - - - - - - - - -
(V)Internal carrying forward of owners’ equity - - - - - - - - -
1. New increase of capital (share capital) from capital reserves - - - - - - - - - -
2. Convert surplus reserves to capital(share capital) - - - - - - - - - -
3. Surplus reserves make up losses - - - - - - - -
4. Others - - - - - - - - - -
(VI) Other -
IV. Balance at the end of this period 1,112,350,077.00 123,610,127.96 - (831,011,141.72) 404,949,063.24 1,112,350,077.00 123,550,019.78 - (828,377,174.42) 407,522,922.36
Legal Representative: Jian Derong CFO: Chen Zongyi Person in charge of Accounting Office: Chen Zongyi Lister: Chen Zongyi
(The notes form an integral part of these consolidated financial statements.)
