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公司公告

闽灿坤B:2010年第三季度报告全文(英文版)2010-10-18  

						TSANN KUEN (CHINA) ENTERPRISE CO. LTD

    THE THIRD QUARTERLY REPORT 2010

    §1. Important Notice

    1.1 The Board of Directors, the Supervisory Committee and directors, supervisors and senior

    management of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. (hereinafter referred to as

    “the Company”) warrant that this report does not contain any false or misleading statements or

    omit any material facts and hereby accept, individually and collectively, responsibility for the

    truth, accuracy and completeness of the contents of this report.

    1.2 None of the directors, supervisors, senior management demonstrated uncertainty or

    disagreement about the truthfulness, accuracy, and completeness of the third quarterly report.

    1.3 All directors attended the Board Meeting, at which reviewed and approved the third quarterly

    report.

    1.4 The Financial Report of the quarterly report period has not been audited.

    1.5 Mr. Jian Derong, Chairman of the Board of Directors and Mr. Chen Zongyi, Accounting

    Manager jointly guaranteed that the financial statements in this quarterly report are true and

    complete.

    §2 Company Profile

    Short form of the stock Tsann Kuen B

    Stock code 200512

    Stock exchange listed with Shenzhen Stock Exchange

    Secretary of the Board Securities Affairs Representative

    Name Luo Qingxing Sun Meimei

    Contact address

    Tsann Kuen Industrial Park, Longchi

    Development Zone, Zhangzhou, Fujian

    Province

    Tsann Kuen Industrial Park, Longchi Development

    Zone, Zhangzhou, Fujian Province

    Telephone 0596-6268103 0596-6268161

    Fax 0596-6268104 0596-6268104

    E-mail allenlo@tkl.tsannkuen.com mm_sun@tkl.tsannkuen.com2

    2.1 Main accounting data and financial indices

    Unit: RMB Yuan

    Items

    At the period-end of this report

    period

    At the period-end of

    last year

    Increase/decrease

    (%)

    Total assets 2,121,057,513.05 2,117,764,266.23 0.16

    Owners’ equity attributable to shareholders

    of listed company

    451,910,737.73 396,565,377.00 13.96

    Share capital 1,112,350,077.00 1,112,350,077.00 0.00

    Net assets per share attributable to

    shareholders of listed company

    0.4063 0.3565 13.97

    Items

    The report

    period

    Increase/decrea

    se year-on-year

    (%)

    From the year-begin

    to the end of report

    period

    Increase/decrease

    year-on-year (%)

    Operating revenue 853,595,297.04 21.03 2,518,604,859.66 33.26

    Net profit attributable to shareholders of

    listed company

    17,782,669.68 50.46 54,731,971.89 71.13

    Net cash flow arising from operating

    activities

    105,098,872.53 (28.88) 142,556,055.65 27.59

    Net cash flow per share arising from

    operating activities

    0.0945 (28.89) 0.1282 27.69

    Basic earnings per share 0.0160 50.94 0.0492 70.83

    Earnings per share-diluted 0.0160 50.94 0.0492 70.83

    Weighted average return on equity 3.93% 0.78 12.11% 3.59

    Weighted average return on equity after

    deducting non-recurring gains and losses

    3.93% 1.70 10.39% 3.43

    Items of non-recurring gains and losses

    Unit: RMB Yuan

    Items

    Amount from the year-begin to

    the period-end

    Gains and losses from disposal of non-current assets 7,807,105.25

    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

    6,490,590.38

    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

    (4,639,240.45)

    Other non-operating income and expense beside for the above-mentioned each items 659,786.57

    Influence on enterprise income tax 0.00

    Net profit attributable to minority shareholders after deducting non-recurring gains and

    losses

    (2,528,513.15)

    Total 7,789,728.603

    2.2 Total number of shareholders at the end of the report period and statement on shares held by

    the top ten shareholders holding tradable shares

    Unit: Share

    Total number of shareholders at the end

    of report period

    34,736

    Shares held by the top ten shareholders holding tradable shares

    No. Name of shareholder (full name) Number of tradable shares held Type of share

    1 FORDCHEE DEVELOPMENT LIMITED 323,643,179 B-share

    2 EUPA INDUSTRY CORPORATION LIMITED 153,802,306 B-share

    3 FILLMAN INVESTMENTS LIMITED 27,729,575 B-share

    4 TIMMERTON CO INC 14,505,644 B-share

    5 CHEN YONG QUAN 9,298,344 B-share

    6 CHEN YONG QING 5,889,589 B-share

    7 CSC SECURITIES (HK) LTD 5,734,179 B-share

    8 CHEN LI JUAN 5,721,246 B-share

    9 XU XIN HU 4,469,965 B-share

    10 HE JIAN XIONG 4,439,551 B-share

    Explanation on related relationship and action-in-concert

    among above mentioned shareholder

    The top three shareholders are controlling corporate shareholders.

    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.

    §3 Significant Events

    3.1 Particular about large-margin change of main accounting statement item and financial indices

    and its reason

    √Applicable □Inapplicable

    Unit: RMB’0000 Yuan

    Items

    Amount of

    period-end

    Amount of

    period-begin

    Increase/de

    crease (%)

    Main reasons for changes

    Transaction financial assets 0.00 158.87 -100.00

    Non-delivered forward exchange in Sep. was

    evaluated as transaction financial assets.

    Notes receivable 207.51 585.13 -64.54 The note was cashed in when matured.

    Accounts receivable 52,199.28 38,983.42 33.90

    Balance of relevant items increased when

    operating income increased.

    Accounts paid in advance 850.30 438.29 94.00 Payment for goods in advance increased.

    Other account receivable 3,037.85 1,485.31 104.53

    Expense for electricity and rent of fitting

    factories increased.

    Long-term expense to be

    apportioned

    479.81 129.48 270.55

    Payment for sporadic office decoration was

    confirmed to be amortized more than one year.

    Transaction financial

    liabilities

    23.36 0.00

    Non-delivered forward exchange in Sep. was

    evaluated as transaction financial assets,

    which will be confirmed as assets at the

    year-begin.4

    Items

    Amount of

    period-end

    Amount of

    period-begin

    Increase/de

    crease (%)

    Main reasons for changes

    Other account payable 8,792.57 25,653.17 -65.73

    Mainly due to repay borrowing of RMB 157

    million to EUPA INDUSTRY

    CORPORATION LIMITED

    Long-term borrowing due

    within one year

    0.00 6,828.20 -100.00

    Long-term borrowing has been repaid when it

    was matured.

    Projected liabilities 0.00 161.90 -100.00

    Deductible agreements had been reached on

    minimum-guarantee purchase contracts.

    Foreign exchange difference 0.00 (65.12) -100.00

    Difference arising from translation of financial

    statements of Eupa (Hong Kong) Co., Ltd.

    presented in HK dollars

    Items

    Jan.-Sep.

    2010

    Jan.-Sep.

    2009

    Increase/de

    crease (%)

    Main reasons for changes

    Total revenue 251,860.49 189,001.54 33.26

    Economy revived in 2010, and sale of products

    and gross profit increased year-on-year.

    Operating cost 219,804.41 164,901.50 33.29

    Economy revived in 2010, ratio of products sale

    compared with the same period of last year rose,

    and relevant subject rose year-on-year.

    Sales expenses 8,754.33 6,213.20 40.90

    Economy revived in 2010, ratio of products sale

    compared with the same period of last year rose,

    and relevant subject rose year-on-year.

    Financial expense (535.98) (264.45) 102.68

    Income from interest increased and expense for

    interest decreased.

    Impairment loss 115.64 22.43 415.66

    Mainly due to loss from withdrawal of

    impairment loss of inventories.

    Gains from change in fair

    value (“-” means loss)

    (182.23) (28.79) 532.92

    Loss evaluated from non-delivered forward

    exchange in Sep. the loss.

    Gain from investment (“-”

    means loss)

    (242.57) (180.84) 34.13 Confirmed loss from delivered forward exchange

    Non-operating expense 83.29 254.50 -67.27

    Loss from disposal of assets confirmed at the

    same period of last year.

    Cash flows from operating

    activities

    14,255.61 11,173.12 27.59

    More cash inflows due to increase of product

    sales

    Cash flows from

    investment Activities

    (310.73) (2,137.47) -85.46

    Consideration of transferring share of

    wholly-owned subsidiary and fitting factories

    decreased purchase of fixed assets

    Cash flows from financing

    activities

    (22,830.08) (11,828.12) 93.02

    Paid off borrowing to EUPA INDUSTRY

    CORPORATION LIMITED and long-term

    borrowings within one year.5

    3.2 Progress and influence of significant events and explanation on its solution

    3.2.1 About non-standard opinion

    □Applicable √Inapplicable

    3.2.2 The Company offer capital to the controlling shareholder or other related parties and

    provide external guarantees in violation of the prescribed procedures.

    □Applicable √Inapplicable

    3.2.3 Signing contract and execution of contract on routine operation

    √Applicable □Inapplicable

    Sales of assets:

    Tsann Kuen Zhangzhou Enterprise Co., Ltd., the Company’s holding subsidiary, invited some

    spare parts plants into the Tsann 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 overall

    market competitiveness of the Company would be strengthened for those more professional

    spare parts plants in the industrial park could supply spare parts directly to Tsann 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 overall 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 Tsann 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, all published on

    Securities Times, Hong Kong Ta Kung Pao and http://www.cninfo.com.cn dated respectively on

    29 Jul. 2008, 21 Jan. 2009, 28 Apr. 2009 and 28 Apr. 2010.

    The company sold out a small quantity equipments to the said spare parts plants to meet their

    business needs in the reported period, which was detailed as follows:

    Unit: RMB’0000 Yuan6

    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

    Whethe

    r a

    related

    transacti

    on 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

    Relations

    hip with

    the

    Company

    ZhangzhouShengyuan Hardware equipment 28 Feb. 2010 142.60 9.14 9.14 No No

    Xiamen Pinrui Hardware equipment 31 Jan. 2010 60.00 9.30 9.30

    Hongyuan Electronic Electronic equipment 31 Jan. 2010 71.67 31.35 31.35

    Zhangzhou Ruicheng Die casting equipment 31 Jan. 2010 11.00 1.10 1.10

    Suzhou Yifeng Bakelite equipment 31 Jan. 2010 4.00 3.92 3.92

    Xiamen Jingjing Die casting equipment 31 Jan. 2010 8.65 0.99 0.99

    Yes Yes

    Longhai Yingfa Bakelite equipment 28 Feb. 2010 171.17 15.59 15.59 No No

    Longhai Yingfa Bakelite equipment 28 Feb. 2010 0.71 0.61 0.61 Yes Yes

    Zhangzhou Boer Die casting equipment 28 Feb. 2010 163.30 (17.45) (17.45)

    Zhangzhou Xiangkun Hardware equipment 31 Mar. 2010 221.38 9.84 9.84

    Xiamen Jinwei Hardware equipment 31 Mar. 2010 210.00 2.14 2.14

    Zhangzhou Lanboni Injection molding equipment 31 Mar. 2010 173.00 17.50 17.50

    No No

    Zhangzhou Hongkun Injection molding equipment 31 Mar. 2010 0.50 0.43 0.43 Yes Yes

    Zhangzhou Hewang Bakelite equipment 31 Mar. 2010 155.44 7.89 7.89

    Zhangzhou Shunkun Bakelite equipment 31 Mar. 2010 253.00 34.14 34.14

    No No

    Xiamen Jingjing Bakelite equipment 31 Mar. 2010 25.34 4.07 4.07 Yes Yes

    Zhangzhou Kerui Die casting equipment 31 Mar. 2010 115.00 23.42 23.42 No No

    Zhangzhou Kerui Die casting equipment 31 Jan. 2010 2.96 0.40 0.40

    Zhangzhou Ruicheng Die casting equipment 31 Jan. 2010 0.50 0.35 0.35

    Xiamen Jingjing Die casting equipment 31 Mar. 2010 5.70 0.89 0.89

    Zhangzhou Jiafeng Wiring equipment 30 Apr. 2010 47.22 30.29 30.29

    Yes

    Yes

    Yes

    Yes

    Zhangzhou Dakun Motor equipment 30 Apr. 2010 790.00 107.11 107.11 No No

    Zhangzhou Kerui Die casting equipment 30 Apr. 2010 0.65 0.20 0.20

    Zhangzhou Yuli Die casting equipment 30 Apr. 2010 3.40 0.78 0.78

    Zhangzhou Yongkun Injection molding equipment 30 Apr. 2010 9.52 0.77 0.77

    Zhangzhou Yukun Injection molding equipment 30 Apr. 2010 0.69 0.06 0.06

    Yes

    Yes

    Zhangzhou Haoyunda Hot iron equipment 31 May 2010 158.03 16.55 16.55 No No

    Suzhou Yifeng Injection molding equipment 31 May 2010 0.25 0.21 0.21

    Zhangzhou Keyida Bakelite equipment 31 May 2010 0.92 0.08 0.08

    Zhangzhou Yuli Die casting equipment 31 May 2010 1.60 0.20 0.20

    Zhangzhou Lanboni Injection molding equipment 31 May 2010 0.23 0.08 0.08

    Non-rel

    ated

    compan

    y

    The

    transaction

    prices were

    decided

    based on

    the

    principle of

    being

    above the

    book value,

    as well as

    the

    assessment

    and market

    prices.

    Yes Yes

    Non-relat

    ed

    company7

    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

    Whethe

    r a

    related

    transacti

    on 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

    Relations

    hip with

    the

    Company

    Zhangzhou Chuangyi Injection equipment 31 May 2010 0.40 0.05 0.05

    Zhangzhou Kerui Die casting equipment 31 May 2010 9.50 1.25 1.25

    Zhangzhou Ruicheng Die casting equipment 31 May 2010 18.00 7.08 7.08

    Zhangzhou Haikun Die casting equipment 31 May 2010 0.85 0.04 0.04

    Zhangzhou Fushun Injection molding equipment 31 May 2010 0.46 0.31 0.31

    Suzhou Yifeng Motor equipment 31 May 2010 2.50 0.28 0.28

    Zhangzhou Wangcheng Injection Molding equipment 30 Jun. 2010 91.45 9.33 9.33 No No

    Zhangzhou Shunkun Bakelite equipment 30 Jun. 2010 1.32 1.13 1.13

    Zhangzhou Kerui Die casting equipment 30 Jun. 2010 16.00 1.37 1.37

    Zhangzhou Chuangyi Injection molding equipment 30 Jun. 2010 0.10 0.04 0.04

    Zhangzhou Qiankun Injection molding equipment 30 Jun. 2010 0.30 0.05 0.05

    Zhangzhou Lanboni Injection molding equipment 30 Jun. 2010 0.30 0.13 0.13

    Zhangzhou Fushun Injection Molding equipment 30 Jun. 2010 0.90 0.61 0.61

    Yes Yes

    Zhangzhou Huasheng Mold equipment 31 Jul. 2010 17.96 4.67 4.67 Yes Yes

    Zhangzhou Fenlong Slitting equipment 31 Aug. 2010 922.00 92.06 92.06 No No

    Zhangzhou Hongyuan Die casting equipment 31 Jul. 2010 2.00 0.46 0.46

    Zhangzhou Hongyuan Die casting equipment 31 Jul. 2010 7.30 1.50 1.50

    Zhangzhou Haoyunda Die casting equipment 31 Jul. 2010 1.20 0.25 0.25

    Zhangzhou Ruicheng Die casting equipment 31 Jul. 2010 0.10 0.06 0.06

    Zhangzhou Boer Die casting equipment 31 Jul. 2010 0.40 0.06 0.06

    Zhangzhou Hailong Hardware equipment 31 Jul. 2010 0.12 0.10 0.10

    Zhangzhou Keid Bakelite equipment 31 Jul. 2010 0.25 0.21 0.21

    Zhangzhou Lanboni Injection molding equipment 31 Jul. 2010 2.00 0.10 0.10

    Zhangzhou Xiangkun Hardware equipment 31 Jul. 2010 22.60 1.67 1.67

    Zhangzhou Yizheng Bakelite equipment 31 Jul. 2010 0.83 0.76 0.76

    Zhangzhou Wangcheng Injection molding equipment 31 Jul. 2010 1.50 0.94 0.94

    Zhangzhou Ruicheng Die casting equipment 31 Jul. 2010 0.90 0.13 0.13

    Zhangzhou Dakun Motor equipment 31 Jul. 2010 16.00 1.49 1.49

    Zhangzhou Xiangkun Slitting equipment 31 Jul. 2010 7.25 0.28 0.28

    Longhai YIngfa Bakelite equipment 31 Jul. 2010 1.73 0.02 0.02

    Zhangzhou Hewang Bakelite equipment 31 Jul. 2010 0.37 0.32 0.32

    Yes Yes8

    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

    Whethe

    r a

    related

    transacti

    on 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

    Relations

    hip with

    the

    Company

    Zhangzhou Keyida Bakelite equipment 31 Jul. 2010 7.47 0.84 0.84

    Zhangzhou Wankun Bakelite equipment 31 Jul. 2010 1.95 0.99 0.99

    Zhangzhou Chuangyi Injection molding equipment 31 Jul. 2010 0.60 0.15 0.15

    Zhangzhou Chuangyi Injection molding equipment 31 Jul. 2010 0.30 0.14 0.14

    Zhangzhou Wankun Injection molding equipment 31 Aug. 2010 1.69 0.76 0.76

    Zhangzhou Shengyuan Hardware equipment 31 Aug. 2010 25.40 2.38 2.38

    Zhangzhou Shunkun Bakelite equipment 31 Aug. 2010 2.80 0.39 0.39

    Zhangzhou Fushun Injection molding equipment 31 Aug. 2010 0.20 0.17 0.17

    Zhangzhou Hongyuan Injection molding equipment 31 Aug. 2010 1.65 1.41 1.41

    Zhangzhou Yongkun Injection molding equipment 30 Sep. 2010 0.62 0.22 0.22

    Zhangzhou Xinhui Hot iron equipment 30 Sep. 2010 0.35 0.34 0.34

    Zhangzhou Shunkun Bakelite equipment 30 Sep. 2010 0.41 0.35 0.35

    Zhangzhou Hewang Bakelite equipment 30 Sep. 2010 0.11 0.09 0.09

    Zhangzhou Chuangyi Injection molding equipment 30 Sep. 2010 0.15 0.06 0.06

    Zhangzhou Wankun Injection molding equipment 30 Sep. 2010 2.95 0.31 0.31

    Total 4,001.67 447.30 447.309

    3.2.4 Changes in scope of consolidation

    Unit: RMB Yuan

    Name Date

    Closing net

    assets

    Profit as of

    reporting period

    The scope of consolidation and reason

    for change

    Shenzhen Canbao

    Commerce & Trade

    Co., Ltd.

    29 Mar. 2010 859,836.18 (104.163.82)

    Subsidiary newly established, the

    Company holds 74.25% of shares of

    this company indirectly

    Xiamen Star

    Comgistic

    Commerce & Trade

    Co., Ltd.

    12 Aug. 2010 27,978,684.15 (21,315.85)

    Subsidiary newly established, the

    Company holds 75% of shares of this

    company indirectly

    Shenzhen Canbao Commerce & Trade Co., Ltd. (hereinafter referred to as “Shenzhen

    Canbao”) was a wholly-owned subsidiary company established by Shanghai Star Travel

    Commerce & Trade Co., Ltd.--the subsidiary of South Port Electronics (the subsidiary of the

    Company) on 29 Mar. 2010 with RMB 1,000,000.00.

    Xiamen STAR Comgistic Commerce & Trade Co., Ltd. (hereinafter referred to as Xiamen

    STAR Comgistic) was a wholly-owned subsidiary company established by the subsidiary of

    Tsann Kuen Zhangzhou Enterprise Co., Ltd. (the subsidiary of the company) on 12 Aug. 2010

    with RMB 28,000,000.00.

    Unit: RMB Yuan

    Name Date

    Closing net

    assets

    Profit as of

    reporting period

    The scope of consolidation and

    reason for change

    EUPA (Hong Kong) Limited 1 May 2010 0.00 548,843.70 Share right transfer

    3.2.5 Transfer of equity under the same control

    Aim at the layout of industries and the integration of resources, it is necessary for the

    company to rearrange the structure of investment in its production, tourism, and channel

    industry in which to attain the administrative objective of professional division, explicit

    responsibility, and definable performance. The company conducted share transfer and capital

    increase to the two subsidiaries Xiamen Star Commerce and Trade and Shanghai Fanxin in

    Sep. 2010 according to net profit of Aug. 2010, and shareholders, proportion of shareholding

    and registered capital before and after the change were as follows:

    Unit: RMB Yuan

    Before the change After the change

    Company Full name of

    shareholder

    Proportion

    Registered

    Capital

    Full name of

    shareholder

    Proportion

    Registered

    Capital

    Shanghai STAR

    Commerce & Trade

    Co., Ltd. Commerce &

    Trade Co., Ltd

    99%

    Xiamen Star

    Commerce &

    Trade Co.,

    Ltd.

    Dai Huiyuan 1%

    9,000,000

    Xiamen Star

    Comgistic

    Commerce & Trade

    Co., Ltd.

    100% 30,000,000

    Shanghai Star

    Commerce & Trade

    Co., Ltd

    51%

    Shanghai

    Fanxin

    Aviation

    Services Ltd. Zhu Decheng 49%

    1,500,000

    Xiamen Star

    Commerce & Trade

    Co., Ltd

    100% 5,500,0001011

    3.2.6 Other equity investment

    Tsann Kuen Zhangzhou Enterprise Co., Ltd., the Company’s holding subsidiary, has

    completed the procedures of commerce registration for Globe Strong Limited and Brilliant

    Leader Limited which are two wholly owned subsidiaries. For more details, please refer to

    Public Notice on Completing Procedures of Business Registration by Holding Subsidiary

    Tsaan Kuen Zhangzhou Enterprise Co., Ltd. published on Securities Times, Ta Kung Pao and

    http://www.cninfo.com.cn dated on 11 Oct. 2010.

    Xiamen Star Commerce & Trade Co., Ltd, the Company’s holding subsidiary, purchased

    Suzhou Taihu Int,L Travel Service Co., Ltd. on 10 Sep. 2010 with a purchasing amount of

    RMB 486,867.8. Xianmen Star Commerce & Trade has paid 20% of the payment for share

    transfer until the reporting day and the balance would be paid after the change of license.

    3.3 Particulars about fulfillment of commitments made by the Company, its shareholders or

    actual controller

    □Applicable √Inapplicable

    3.4 Warnings of estimated losses or major changes of the accumulative net profit achieved

    during the period from year-begin to the end of the next report period compared with the

    same period of last year, as well as explanation on reasons

    □Applicable √Inapplicable

    3.5 Other significant events to be explained

    3.5.1 Securities investment

    □Applicable √Inapplicable

    3.5.2 Equity of other listed companies held by the Company

    √Applicable □Inapplicable

    Unit: (RMB) Yuan

    Stock

    code

    Short

    form of

    stock

    Initial

    investment

    Ratio to

    equity of

    invested

    company

    Book value at

    period-end

    Profit and

    loss in

    report

    period

    Change of

    owners’

    equity in

    report period

    Accounting

    entry

    Source

    of

    stock

    600838

    Shanghai

    Jiubai

    30,700.00 0.01 298,166.40 0 3,538.08

    Financial

    assets

    available

    for sale

    Corpor

    ate

    share

    Total 30,700.00 0.01 298,166.40 0 3,538.0812

    3.5.3 Researches, interviews and visits received in the report period

    In the report period, when receiving researches and interviews, the Company and relevant

    information disclosure obligors abided by the Guide for Fair Information Disclosure of Listed

    Companies, not conducting differential treatments or selectively and privately leak

    undisclosed information to certain parties. And the researches and interviews received were

    listed as follows:

    Time Place

    Way of

    reception

    Visitor

    Main discussion and materials

    provided by the Company

    19 Jan. 2010 By telephone Ms. Fang Operation status of the Company

    25 Feb. 2010 By telephone Mr. Ding Operation status of the Company

    20 Apr. 2010 By telephone Mr. Liu Operation status of the Company

    28 Jun. 2010 By telephone Ms. Li Operation status of the Company

    3 Sept. 2010 By telephone Mr. Yu Operation status of the Company

    16 Sept. 2010 By telephone Ms. Wang Operation status of the Company

    16 Sept. 2010 Field research Mr. Xu Operation status of the Company

    27 Sept. 2010

    Company office

    By telephone Mr. Mu Operation status of the Company

    3.6 Derivative investments

    √Applicable □Inapplicable

    As a listed company, the Company has not been engaged in derivatives investment. And this

    derivatives investment deal was conducted by the Company’s holding subsidiary—Tsann

    Kuen Zhangzhou Enterprise Co., Ltd.—in order to avoid foreign exchange risks, which

    involved buying and selling derivative financial products such as forward exchange and

    forward purchase/sale of foreign currency.

    Tsann Kuen Zhangzhou Enterprise Co., Ltd., the Company’s holding subsidiary, established

    the Management Procedures for Trading Derivative Financial Products after the Procedures

    was approved by the Board of Directors on 6 Mar. 2008.

    Analysis on risks and control

    measures of derivative products

    held in the report period

    (including but not limited to

    market risk, liquidity risk, credit

    risk, operation risk, law risk,

    etc.)

    1. Analysis on risks from holding of derivative products: gains or losses from difference

    between contracted exchange rate and market exchange rate on value date.

    2. Control measures:

    (1) Principle: total amount of whole contracted derivative financial commodities will not

    exceed sum of net position (net position: total foreign currency assets- total foreign currency

    liabilities) of current assets liabilities plus net position arising from business of the Company

    in the next 6 months.

    (2) Separation of post: separation of post of trader, dealer and authorization.

    (3) Normalization of procedure: trader should offer sufficient market information and risks to

    people who was authorized, clarify possible risks, consider feasibility of transaction when

    sign the contract, and complete derivative financial commodities trade with authorization.

    Documents referring to contract trade need examination of legal affairs ministry, and the

    dealer will requested to be authorized when complete business transaction.13

    (4) Periodic evaluation: The Company kept an eye on the profit and loss from the fair value

    changes of the derivative by checking daily/(monthly) the difference between the estimated

    exchange rate (provided by the bank)*the undue contracted amount and the currency amount

    when bought in.

    (5) Loss limit: contracted losses mustn’t exceed 6% of total trading amount.

    (6) Audit system: Audit ministry audits derivative audit trade of derivative financial products

    periodically and submit audit report.

    Changes of market prices or fair

    values in the report period of the

    invested derivatives. And the

    analysis on the fair value of the

    derivatives should include the

    specific use methods and the

    relevant assumptions and

    parameters.

    (1) Losses effected by completed transaction amount of derivative products was RMB

    2,816,970.85, and loss from undelivered transaction was RMB 233,608.22 in the report

    period;

    (2) The former contracted bank provided monthly sheets of estimated exchange rates for the

    undue contracted forward exchanges on the last trading day of the month;

    (3) The profit and loss from fair value changes of the derivative was confirmed according to

    the difference between the contracted amount undue by the month*the estimated exchange

    rate and the currency amount when bought in.

    Whether significant changes

    occurred to the Company’s

    accounting policy and specific

    accounting principles of

    derivatives in the report period

    compared to the previous report

    period

    There were no significant changes between the Company’s accounting policy and specific

    accounting principles of derivatives in the report period and those in the last report period.

    Specific opinion from

    independent directors, sponsors

    or financial consultants on the

    Company’s derivatives

    investment and risk control

    Derivative investment, which was operated by Zhangzhou Tsann Kuen, controlling subsidiary

    of the Company, was performance of signed contract. Then they will execute the examination

    and review procedure of the Board Meeting or Shareholder’s Meeting in accordance with

    regulations and execute obligation of information disclosure in time.

    3.6.1 Position-holding situation of derivative investments as at the end of the report period

    √Applicable □Inapplicable

    Unit: (RMB) Yuan

    Type of contract

    Opening

    contract amount

    Closing

    contract

    amount

    Gains and

    losses for

    report period

    Proportion of the closing contract

    amount in the Company’s net assets as

    at the end of the report period

    Buying and selling

    forward exchange

    33,966,028.92 33,717,968.00 (2,339,608.22) 7.46%

    Forward purchase/sale

    of foreign currency

    136,619,000.00 135,851,000.00 2,106,000.00 30.06%

    Total 170,585,028.92 169,568,968.00 (233,608.22) 37.52%14

    3.7 Contingencies

    1. Contingent liabilities caused by pending lawsuits or arbitrations, as well as the financial

    impact

    Zhangzhou Tsann Kuen, subsidiary of the Company, and Longhai Chaoda Industrial Co., Ltd

    (hereinafter refer to as “Chaoda”) has signed Cooperation Framework Agreement, Agreement

    on Transfer and Lease of Working Assets etc. on 12 Apr. 2008, on which contracted that

    Zhangzhou Tsann Kuen would purchase products from Chaoda; meanwhile, it contracted that

    Chaoda would purchase and lease equipment from Zhangzhou Tsann Kuen, and will hired

    workshop of Zhangzhou Tsann Kuen which locate Longchi Development Zone to put in

    production.

    On 3 Nov. 2009, Chaoda filed two lawsuits to Fujian Zhangzhou Intermediate People’s Court,

    with details as follows:

    1) Concerning the case of the equipment purchase & sales and lease dispute, Chaoda claimed

    to terminate all equipment purchase & sales and lease agreements between both parties and

    claimed Zhangzhou Tsann Kuen to return the equipment transfer payment which had been

    paid by Chaoda. On 16 Sept. 2010, the Court entered a verdict, terminating equipment

    purchase & sales and lease agreements between both parties. Not satisfied with the verdict of

    the first trial, Zhangzhou Tsann Kuen appealed on 7 Oct. 2010. Up until the report date, the

    second trial has not begun.

    2) Concerning the case of the product supply agreement termination and compensation

    dispute, Chaoda claimed to terminate the product supply agreement between both parties and

    claimed Zhangzhou Tsann Kuen to compensate for various losses reaching RMB 12.6 million

    and return the performance bond of RMB 200,000. On 29 Jun. 2010, the Court entered a

    verdict, terminating the product supply agreement between both parties and ordering

    Zhangzhou Tsann Kuen to pay about RMB 6.06 million to Chaoda for materials provided by

    Chaoda and return the performance bond of RMB 200,000 to Chaoda. The said verdict had

    no influence on gains and losses of the Company. Not satisfied with the verdict of the first

    trial, Zhangzhou Tsann Kuen appealed on 14 Jul. 2010. Up until the report date, the second

    trial has not begun.

    2. Up until the report date, there have been no contingent liabilities and their financial

    influence caused by the Company’s providing liability guarantees for other parties that needs

    to be disclosed.

    3. Other contingent liabilities and their financial influence

    TKC’s Coffee Grinder, which was supplied to Starbucks (Chinese name is called “星巴克”)

    by subsidiary of the Company Zhangzhou Tsann Kuen during 2002 to 2008, was called back

    due to complaint from customers of Starbucks. After 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.15

    TKL has been delivered 36,000-set finished products in Sep. 2009, and caused loss of RMB

    1,180,400. Up to the report day, neither there was new order, nor did the trader require the

    residual sets of 4,000.

    3.8 Other matters

    Zhangzhou Tsann Kuen, the controlling subsidiary of the Company, entered into Cooperation

    Framework Agreement, Purchase Agreement on Operation Assets and Agreement of Supply

    of Raw Materials for Production with Shanghai Sigma Metals Inc. (hereinafter referred to as

    Shanghai Sigma) on Dec. 31, 2006 and the main contents of agreements include: Expect for

    sale of the operation assets, Zhangzhou Tsann Kuen would transfer the business opportunities

    to Shanghai Sigma with the total transaction amount of RMB 100 million, which becomes the

    main supplier of raw materials of aluminum products purchased by the Company later,

    settlement price per ton would be determined according to decreasing amount and proportion

    stipulated by two parties. In accordance with Purchase Agreement on Operation Assets,

    Shanghai Sigma would pay the first installment amounting to RMB 38 million, the rest RMB

    62 million would be deducted from the processing expense for molten aluminum by the

    month, which Zhangzhou Tsann Kuen entrusted Shanghai Sigma to do production.

    Zhangzhou Tsann Kuen committed that it shall, within three years following Agreement of

    Supply of Raw Materials for Production into force, purchase molten aluminum (aluminum

    pig) from Shanghai Sigma with purchase volume not less than 70% of total demands of

    Zhangzhou Tsann Kuen for molten aluminum (aluminum pig). In case of expiration of three

    year, because of a shortage of orders, Zhangzhou Tsann Kuen fails to deducted fully the

    balance from processing expense, it shall agree to give extension to Agreement of Supply of

    Raw Materials for Production, the balance owed shall continue to deduct through business

    cooperation till full deduction. If executive termination due to responsibility of Zhangzhou

    Tsann Kuen, the balance owed shall not be paid by Shanghai Sigma, if executive termination

    due to responsibility of Shanghai Sigma, the balance owed shall be paid by Shanghai Sigma

    one-off.

    Up until the report date, RMB 39,746,220.40 has been left untransferred, which can be used

    for deduction for the future to come.16

    §4 Attachment

    4.1 Balance Sheet

    TSANN KUEN (CHINA) ENTERPRISE CO. LTD

    Balance Sheet (Un-audited)

    30 Sep. 2010

    Unit: RMB Yuan

    Closing balance Opening balance

    Assets

    Consolidation Parent company Consolidation Parent company

    Current Assets:

    Monetary funds 540,899,099.24 2,030,987.44 632,274,671.72 494,441.23

    Transaction financial asset 1,588,661.38

    Notes receivable 2,075,144.27 5,851,328.67

    Accounts receive bale 521,992,817.06 389,834,241.91

    Account paid in advance 8,503,028.78 278,166.95 4,382,912.72 48,231.48

    Interest receivable

    Dividend receivable

    Other account receivable 30,378,541.02 2,940,427.99 14,853,085.85 230,037.15

    Inventories 430,507,753.34 350,258,713.95

    Non-current assets due within 1 year

    Other current assets

    Total current assets 1,534,356,383.71 5,249,582.38 1,399,043,616.20 772,709.86

    Non-current assets

    Financial assets available for sale 298,166.40 298,166.40 293,630.40 293,630.40

    Held to maturity investments

    Long-term account receivable 106,856,737.33 99,661,083.56

    Long-term equity investment 40,000.00 994,604,030.83 40,000.00 1,005,105,478.85

    Investing property 20,757,833.95 24,966,382.69 33,666,204.47 35,507,404.55

    Fixed asset 396,595,502.34 27,929,124.25 519,670,147.89 19,068,274.15

    Project in construction 4,455,619.60 4,656,021.02 3,632,934.04

    Engineering material

    Fixed asset disposal

    Bearer biological asset

    Oil assets

    Intangible assets 25,764,122.00 19,569,198.15 27,735,258.23 20,330,648.46

    Development expense

    Goodwill 996,979.09 996,979.09

    Long-term expense to be

    apportioned

    4,798,072.27 153,414.54 1,294,834.29 126,758.11

    Deferred tax assets 26,138,096.36 30,706,491.08

    Other non-current assets

    Total of non-current assets 586,701,129.34 1,067,520,316.86 718,720,650.03 1,084,065,128.56

    Total assets 2,121,057,513.05 1,072,769,899.24 2,117,764,266.23 1,084,837,838.42

    Legal Representative: Jian Derong CFO: Chen Zongyi Person in charge of Accounting Office: Chen Zongyi17

    TSANN KUEN (CHINA) ENTERPRISE CO. LTD

    Balance Sheet-Continued (Un-audited)

    30 Sep. 2010

    Unit: RMB Yuan

    Closing balance Opening balance

    Items

    Consolidation Parent company Consolidation Parent company

    Current liabilities:

    Short-term borrowings

    Transaction financial liabilities 233,608.22

    Notes payable 68,893,946.39 56,370,310.39

    Account payable 987,951,181.87 308,748.92 837,178,756.46 1,665,294.11

    Account received in advance 18,655,976.99 146,260.00 14,680,017.93

    Employee’s compensation payable 42,665,974.15 194,523.12 48,929,470.49 113,858.79

    Tax payable 44,881,607.01 68,947,954.19 40,091,138.11 68,631,609.07

    Interest payable

    Dividend payable

    Other account payable 87,925,714.50 604,800,907.31 256,531,703.89 616,799,841.82

    Non-current liabilities due within 1 year 68,282,000.00

    Other current liabilities

    Total current liabilities 1,251,208,009.13 674,398,393.54 1,322,063,397.27 687,210,603.79

    Non-current liabilities:

    Long-term borrowings

    Bonds payable

    Long-term accounts payable

    Special accounts payable

    Deferred income

    Projected liabilities 1,618,986.20

    Deferred tax liabilities 58,842.61 58,842.61 296,143.90 57,844.69

    Other non-current liabilities 44,008,881.36 40,106,220.40

    Total of non-current liabilities 44,067,723.97 58,842.61 42,021,350.50 57,844.69

    Total liabilities 1,295,275,733.10 674,457,236.15 1,364,084,747.77 687,268,448.48

    Shareholders’ equity

    Share capital 1,112,350,077.00 1,112,350,077.00 1,112,350,077.00 1,112,350,077.00

    Capital reserve 125,217,528.91 123,693,805.19 125,213,990.83 123,690,267.11

    Less: Treasury Stock

    Surplus reserves

    Retained earnings (785,656,868.18) (837,731,219.10) (840,347,470.50) (838,470,954.17)

    Foreign exchange difference (651,220.33)

    Total shareholders' equity attributable to

    parent company

    451,910,737.73 398,312,663.09 396,565,377.00 397,569,389.94

    Minority interest 373,871,042.22 357,114,141.46

    Total shareholder’s equity 825,781,779.95 398,312,663.09 753,679,518.46 397,569,389.94

    Total liabilities and shareholders’ equity 2,121,057,513.05 1,072,769,899.24 2,117,764,266.23 1,084,837,838.42

    Legal Representative: Jian Derong CFO: Chen Zongyi Person in charge of Accounting Office: Chen Zongyi18

    4.2 Income statement during the reporting period

    TSANN KUEN (CHINA) ENTERPRISE CO. LTD

    Income Statement (Un-audited)

    1 Jul.-30 Sep. 2010

    Unit: RMB Yuan

    Jul.-Sep. 2010 Jul.-Sep. 2009

    Items

    Consolidation Parent company Consolidation Parent company

    I. Total revenue 853,595,297.04 1,319,236.20 705,296,161.86 1,633,727.82

    II. Total sales cost 826,189,199.04 3,330,148.43 695,069,310.25 2,760,205.42

    Less: sales cost 733,014,214.31 1,271,516.44 620,800,104.52 1,577,155.78

    Taxes and associate charges 1,196,073.91 69,995.34 873,413.01 81,798.67

    Sales expenses 34,290,108.06 22,340,569.47

    Administrative expenses 58,850,194.13 1,957,188.40 52,046,676.80 1,230,594.64

    Financial expense 1,069,630.77 30,322.06 (3,570,480.13) 110,796.87

    Impairment loss (2,231,022.14) 1,126.19 2,579,026.58 (240,140.54)

    Add: gain/(loss) from change in fair

    value (“-” means loss)

    (9,256.59) 259,111.76

    Gain/(loss) from investment (“-” means

    loss)

    (4,521,157.79) (1,132,867.40)

    III. Business profit (“-” means loss) 22,875,683.62 (2,010,912.23) 9,353,095.97 (1,126,477.60)

    Add: non-business income 4,531,665.78 131,428.37 9,035,708.60 154,752.42

    Less: non-business expense 24,392.70 1,048,362.32

    Including: loss from non-current asset

    disposal

    16,938.86 203,451.94

    IV. Total profit (“-” means loss) 27,382,956.70 (1,879,483.86) 17,340,442.25 (971,725.18)

    Less: income tax expense 2,693,598.03 1,725,088.86

    V. Net profit (“-” means loss) 24,689,358.67 (1,879,483.86) 15,615,353.39 (971,725.18)

    Attributable to parent company 17,782,669.68 (1,879,483.86) 11,819,201.62 (971,725.18)

    Minority interest 6,906,688.99 3,796,151.77

    VI. Earnings per share

    (I) Basic earnings per share 0.0160 0.0106

    (II) Diluted earnings per share 0.0160 0.0106

    VII. Other comprehensive income 36,560.16 (357,763.56) 62,043.54

    VIII. Total comprehensive income 24,725,918.83 (1,879,483.86) 15,257,589.83 (909,681.64)

    Total comprehensive income attributable

    to owner of parent company

    17,819,229.84 (1,879,483.86) 11,461,438.06 (909,681.64)

    Total comprehensive income attributable

    to minority shareholders

    6,906,688.99 3,796,151.77

    Legal Representative: Jian Derong CFO: Chen Zongyi Person in charge of Accounting Office: Chen Zongyi19

    4.3 Income statement from the year-begin to the end of reporting period

    TSANN KUEN (CHINA) ENTERPRISE CO. LTD

    Income Statement (Un-audited)

    1 Jan.-30 Sep. 2010

    Unit: RMB Yuan

    Jan.-Sep. 2010 Jan.-Sep. 2009

    Items

    Consolidation Parent company Consolidation Parent company

    I. Total revenue 2,518,604,859.66 4,340,328.62 1,890,015,449.96 4,340,355.55

    II. Total sales cost 2,448,299,260.58 9,112,221.91 1,859,613,441.68 8,725,357.77

    Less: sales cost 2,198,044,090.73 4,192,428.15 1,649,014,966.94 4,222,276.10

    Taxes and associate charges 3,295,459.81 220,540.00 2,719,457.34 225,821.80

    Sales expenses 87,543,256.12 62,131,985.82

    Administrative expenses 163,619,886.37 5,292,973.14 148,167,295.81 5,144,948.19

    Financial expense (5,359,845.71) 77,161.81 (2,644,521.22) 616,820.10

    Impairment loss 1,156,413.26 (670,881.19) 224,256.99 (1,484,508.42)

    Add: gain/(loss) from change in fair value

    (“-” means loss)

    (1,822,269.60) (287,913.25)

    Gain/(loss) from investment (“-” means loss) (2,425,692.45) 5,266,277.58 (1,808,428.37) 7,500.00

    III. Business profit (“-” means loss) 66,057,637.03 494,384.29 28,305,666.66 (4,377,502.22)

    Add: non-business income 15,790,354.63 245,350.78 20,245,884.11 769,094.81

    Less: non-business expense 832,872.43 2,544,984.10 (2,714.93)

    Including: loss from non-current asset

    disposal

    57,570.89 1,223,976.71 (2,714.93)

    IV. Total profit (“-” means loss) 81,015,119.23 739,735.07 46,006,566.67 (3,605,692.48)

    Less: income tax expense 6,424,153.67 3,334,897.80

    V. Net profit (“-” means loss) 74,590,965.56 739,735.07 42,671,668.87 (3,605,692.48)

    Attributable to parent company 54,731,971.89 739,735.07 31,982,417.80 (3,605,692.48)

    Minority interest 19,858,993.67 10,689,251.07

    VI. Earnings per share

    (I) basic earnings per share 0.0492 0.0288

    (II) diluted earnings per share 0.0492 0.0288

    VII. Other comprehensive income 654,758.41 3,538.08 (297,655.38) 62,043.54

    VIII. Total comprehensive income 75,245,723.97 743,273.15 42,374,013.49 (3,543,648.94)

    Total comprehensive income attributable to

    owner of parent company

    55,386,730.30 743,273.15 31,684,762.42 (3,543,648.94)

    Total comprehensive income attributable to

    minority shareholders

    19,858,993.67 10,689,251.07

    Legal Representative: Jian Derong CFO: Chen Zongyi Person in charge of Accounting Office: Chen Zongyi20

    4.4 Cash flow statement from the year-begin to the end of reporting period

    TSANN KUEN (CHINA) ENTERPRISE CO. LTD

    Cash Flow Statement (Un-audited)

    1 Jan.-30 Sep. 2010

    Unit: RMB Yuan

    Accumulative amount as of reporting

    period

    Accumulative Amount at the same

    Items period of last year

    Consolidation Parent company Consolidation Parent company

    I. Cash flows for operating activities:

    Cash received from sales of goods or rending of

    services

    2,349,018,074.47 1,902,634,202.37

    Refund of tax and fare received 197,497,897.91 92,087,126.18 284,154.60

    Other cash received relating to operating activities 86,687,534.97 31,885,487.28 57,685,588.52 30,745,711.47

    Sub-total of cash inflows 2,633,203,507.35 31,885,487.28 2,052,406,917.07 31,029,866.07

    Cash paid for goods and services 1,959,390,817.91 1,486,435,557.73 122,176.65

    Cash paid to and on behalf of employees 265,834,906.95 24,118,979.65 253,361,643.42 22,801,699.13

    Tax and fare paid 16,934,214.63 2,372,762.40 15,622,497.93 2,024,664.73

    Other cash paid relating to operating activities 248,487,512.21 20,070,510.17 185,255,985.89 6,270,515.25

    Sub-total of cash outflows 2,490,647,451.70 46,562,252.22 1,940,675,684.97 31,219,055.76

    Net cash flow from operating activities 142,556,055.65 (14,676,764.94) 111,731,232.10 (189,189.69)

    II. Cash Flows from Investment Activities:

    Cash received from return of investments 1,061,500.00

    Cash received from investment income 7,925,803.21 15,767,517.18 7,500.00 7,500.00

    Net cash received from disposal of fixed assets,

    intangible assets and other long-term assets

    17,020,782.09 17,165,208.34

    Net cash received from disposal of subsidiaries and

    other operating units

    Other cash received relating to investment activities

    Sub-total of cash inflows 24,946,585.30 15,767,517.18 18,234,208.34 7,500.00

    Cash paid for acquiring fixed assets, intangible assets

    and other long-term assets

    27,399,317.27 1,919,183.89 37,883,916.73 1,939,914.00

    Cash paid for acquiring investments 654,557.82 1,725,000.00 5,000,000.00

    Net cash used in acquiring subsidiaries and other operating units

    Other cash paid relating to investment activities

    Sub-total of cash outflows 28,053,875.09 1,919,183.89 39,608,916.73 6,939,914.00

    Net cash flow from investing activities (3,107,289.79) 13,848,333.29 (21,374,708.39) (6,932,414.00)

    III. Cash Flows from Financing Activities:

    Cash received from absorbing investment

    Including: Cash received from increase in minority interest

    Cash received from borrowings 266,013,820.76 157,261,700.00

    Cash received from issuance of bonds

    Other cash relating to financing activities 160,000,000.00 120,000,000.00

    Sub-total of cash inflows 160,000,000.00 266,013,820.76 277,261,700.00

    Cash paid for settling debt 225,948,239.46 157,577,962.02 384,294,974.87 274,400,368.22

    Cash paid for distribution of dividends or profit or

    reimbursing interest

    2,352,514.18

    Including: dividends or profit paid to minority interest 2,352,514.18

    Other cash payments relating to financing activities

    Sub-total of cash outflows 228,300,753.64 157,577,962.02 384,294,974.87 274,400,368.22

    Net cash flow from financing activities (228,300,753.64) 2,422,037.98 (118,281,154.11) 2,861,331.78

    IV. Effect of foreign exchange rate changes (1,234,182.37) (57,060.12) (308,586.25) (49,210.85)

    V. Increase in cash and cash equivalents (90,086,170.15) 1,536,546.21 (28,233,216.65) (4,309,482.76)

    Add: Cash and cash equivalents at year-begin 540,739,906.30 494,441.23 399,276,546.68 4,939,594.77

    VI. Cash and cash equivalents at the end of the year 450,653,736.15 2,030,987.44 371,043,330.03 630,112.01

    Legal Representative: Jian Derong CFO: Chen Zongyi Person in charge of Accounting Office: Chen Zongyi21

    4.5 Auditors’ Report

    Audit opinion: Un-audited

    Chairman of the Board: Jian Derong

    TSANN KUEN (CHINA) ENTERPRISE CO. LTD

    16 October 2010