TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
SEMI-ANNUAL REPORT 2013
AUGUST 2013
1
I. Important Reminders, Contents & Explanation
The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior
management staff of TSANN KUEN (CHINA) ENTERPRISE CO., LTD. (hereinafter referred to as
“the Company”) warrant that this report is factual, accurate and complete without any false record,
misleading statement or material omission. And they shall be jointly and severally liable for that.
All directors attended the board session for reviewing this report.
The Company plans not to distribute cash dividends or bonus shares or turn capital reserve into
share capital.
Mr. Jian Derong, company principal, and Mr. Chen Zongyi, head of the accounting work & the
accounting division (head of accounting) jointly declare that the financial statements carried in this
report are factual, accurate and complete.
English Translation for Reference Only. Should there be any discrepancy between the two versions,
the Chinese version shall prevail.
2
Contents
I. Important Reminders, Contents & Explanation ..................................................................................................... 2
II. Company Profile ................................................................................................................................................... 5
III. Accounting & Business Highlights...................................................................................................................... 6
IV. Report of the Board of Directors.......................................................................................................................... 8
V. Significant Events ............................................................................................................................................... 26
VI. Change in Share Capital and Particulars about Shareholders............................................................................ 35
VII. Directors, Supervisors, Senior Management Staffs and Employees ................................................................ 37
VIII. Financial Report.............................................................................................................................................. 37
IX. Documents Available for Reference .................................................................................................................. 37
3
Explanation
Term Refers to Contents
Xiamen Tsann Kuen, MCKB,
Refers to TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Company, the Company, TKC
Tsann Kuen Zhangzhou, TKL Refers to Tsann Kuen Zhangzhou Enterprise Co., Ltd.
Tsann Kuen Shanghai, TKS Refers to Tsann Kuen China (Shanghai) Enterprise Co., Ltd.
Xiamen Star Travel, TSX Refers to Xiamen Star Travel International Travel Service Co., Ltd.
Tsann Kuen (Zhangzhou) South Port Electronics Enterprise
South Port Electronics, TKN Refers to
Co., Ltd.
Tsann Kuen Institute, LTC Refers to Tsann Kuen (Zhangzhou) Vocational Technical Institute
STD Refers to Shanghai Star Commerce & Trade Co., Ltd.
TSX3C Refers to Xiamen Star Commerce & Trade Co., Ltd.
SCCX Refers to Xiamen Star Comgistic Capital Co., Ltd
TSST Refers to Shanghai Fanxin Airlines Service Co., Ltd.
TSD Refers to Star (Dalian) International Travel Service Co., Ltd.
TSXT Refers to Xiamen Star Airlines Service Co., Ltd.
East Sino Development Refers to East Sino Development Limited
SCI Refers to Pt.Star Comgistic Indonesia
Yuan Refers to RMB Yuan
4
II. Company Profile
I. Basic information of the Company
Stock abbreviation MCKB Stock code 200512
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 厦门灿坤实业股份有限公司
Abbr. of the Chinese name of
闽灿坤
the Company
English name of the Company TSANNKUEN(CHINA) ENTERPRISE CO. LTD
Abbr. of the English name of
TKC
the Company
Legal representative of the
Jian Derong
Company
II. For Contact
Company Secretary Securities Affairs Representative
Name Sun Meimei Xiong Jianlin
TSANN KUEN Industrial Park, Taiwanese TSANN KUEN Industrial Park, Taiwanese
Contact address Investment Zone, Zhangzhou, Fujian Investment Zone, Zhangzhou, Fujian
Province Province
Tel. 0596-6268161 0596-6268103
Fax 0596-6268104 0596-6268104
E-mail mm_sun@tkl.tsannkuen.com jl_xiong@tkl.tsannkuen.com
III. Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website address and email address of the
Company during the reporting period?
□ Applicable √ Inapplicable
2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the reporting period?
□ Applicable √ Inapplicable
5
3. Change of the registered information
Did any change occur to the registered information during the reporting period?
□ Applicable √ Inapplicable
4. Other relevant information
Did any change occur to other relevant information during the reporting period?
□ Applicable √ Inapplicable
III. Accounting & Business Highlights
I. Major accounting data and financial indicators
Same period of last
Major accounting data Reporting period YoY +/-（％）
year
Operating revenues 877,844,207.80 1,069,083,488.49 -17.89%
Net profit attributable to shareholders of the Company 10,425,680.85 -19,378,850.76 153.80%
Net profit attributable to shareholders of the Company
707,622.89 -18,876,331.13 103.75%
after deducting non-recurring gains and losses
Net cash flow from operating activities -63,436,545.48 -46,565,599.37 -36.23%
Basic EPS 0.06 -0.10 160.00%
Diluted EPS 0.06 -0.10 160.00%
Weighted average ROE (%) 2.14% -4.08% 6.22%
As at the end of the As at the end of last
Major accounting data YoY +/-（％）
reporting period year
Total assets 1,802,731,082.11 1,679,847,838.18 7.32%
Owners’ equity attributable to shareholders of the
485,352,491.45 488,049,282.91 -0.55%
Company
II. Differences between accounting data under domestic and overseas accounting standards
1. Differences of net profit and net assets disclosed in financial reports prepared under international and
Chinese accounting standards
□ Yes √ No
6
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards
□ Yes √ No
3. Reasons for accounting data differences under the domestic and overseas accounting standards
□ Yes √ No
III. Items and amounts of extraordinary gains and losses
Amount (RMB
Item Explanation
Yuan)
Gains/losses on the disposal of non-current assets (including the offset part of
1,579,092.37
asset impairment provisions)
Tax rebates, reductions or exemptions due to approval beyond authority or the
lack of official approval documents
Government grants recognized in the current period, except for those acquired in
the ordinary course of business or granted at certain quotas or amounts according 2,430,845.00
to the country’s unified standards
Capital occupation charges on non-financial enterprises that recorded into current
gains and losses
Gains due to that the investment costs for the Company to obtain subsidiaries,
associates and joint ventures are lower than the enjoyable fair value of the
identifiable net assets of the investees when making the investments
Gain/loss on non-monetary asset swap
Gain/loss on entrusting others with investments or asset management
Asset impairment provisions due to acts of God such as natural disasters
Gain/loss on debt restructuring
Expenses for business reorganization, such as expenses for staffing,
reorganization etc.
Gain/loss on the part over the fair value due to transactions with distinctly unfair
prices
Current gains and losses of subsidies acquired from business combination under
the same control as from period-begin to combination date
Gain/loss on contingent events irrelevant to the Company’s normal business
Gains and losses on change in fair value from tradable financial assets and Gains on sale of forward
tradable financial liabilities, as well as investment income from disposal of exchange contracts, fair value
10,875,310.96
tradable financial assets and tradable financial liabilities and financial assets changes, wealth management
available for sales except for effective hedging related with normal businesses of products and other current assets
7
Amount (RMB
Item Explanation
Yuan)
the Company
Reversal of provision for impairment that made impairment test independently
Gain/loss on loans obtained by entrusting others
Gain/loss on change of the fair value of investing real estate of which the
subsequent measurement is carried out adopting the fair value method
Effect on current gains/losses when a one-off adjustment is made to current
gains/losses according to requirements of taxation, accounting and other relevant
laws and regulations
Custody fee income when entrusted with operation
Other non-operation income and expenses other than the above -126,699.48
Other gain/loss items that meet the definition of an extraordinary gain/loss 42,720.64 Gains on disposal of subsidiaries
Less: Income tax effects 2,100,136.68
Minority interests effects (after tax) 2,983,074.85
Total 9,718,057.96
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Inapplicable
IV. Report of the Board of Directors
I. Business review for the reporting period
For the reporting period, the Company achieved operating revenues of RMB 878 million, down 17.89% over the
same period of last year, with net profit being RMB 10 million. The Company enhanced internal operation and
management, reduced procurement costs, optimized the production and sale processes and strictly controlled the
administrative and selling expenses, yielding a sharp YoY growth of 153.80% on net profit.
According to the strategic goals set—focusing on main business, improving operational management and
expanding emerging market, with “cash and profit growth” as the highest guiding principal, customers’ needs as
the orientation and technological innovation and design integration as the core, the Company built a high-end
service mode featuring “high speed, low cost and effective solution”, created leading advantages in areas from
R&D to marketing and enhanced the supporting supply chain management, so as to satisfy customers’ needs and
attract international orders.
The Company continuously input for small household appliance R&D and increased competitiveness of our
8
products through technical innovation. Meanwhile, the Company promoted development of the Tsann Kuen brand
and proactively planned for domestic sale of products such as comprehensive helpers, with the purpose of
enhancing expansion of the domestic market.
II. YoY changes of major financial data
Unit: RMB Yuan
Closing
Item Opening amount +/-% Main reasons for change
amount
Operating revenues 877,844,207.80 1,069,083,488.49 -17.89%
Operating costs 762,662,771.63 957,074,222.04 -20.31%
Operating revenues decreased and expense was
Selling expenses 34,293,872.54 50,929,006.43 -32.66%
controlled.
administrative expenses 74,849,826.36 91,512,870.63 -18.21%
RMB appreciation created an unfavorable factor
Financial expenses 3,869,546.71 -11,851,591.82 132.65%
for exchange.
Income tax expenses 1,139,442.82 158,701.37 617.98% Increase of the deferred income tax liabilities
Net cash flows from
-63,436,545.48 -46,565,599.37 -36.23% Main operating revenues decreased.
operating activities
Net cash flows from
-87,554,293.09 -12,665,845.78 -591.26% Increase of wealth management products
investing activities
Net cash flows from
322,062,323.39 383,482,654.28 -16.02%
financing activities
Net increase in cash and
160,843,030.86 324,758,861.76 -50.47% Decrease of export invoice financing borrowings
cash equivalents
Transactional financial
6,985,964.05 0.00 100.00% Gain on unsettled forward exchange contracts
assets
Notes receivable 5,277,843.70 3,356,956.00 57.22% Increase of undue banker’s acceptance notes
Other receivables 27,283,582.43 41,516,107.15 -34.28% Receivables were settled upon maturity.
Non-current assets due Equipment payments due within one year were
228,918.82 2,434,759.94 -90.60%
within one year collected.
9
Closing
Item Opening amount +/-% Main reasons for change
amount
More real estate and land were used for
operating leasing. Thus, the corresponding fixed
Investing real estate 55,701,135.53 39,319,457.87 41.66%
asset and intangible asset items were restated as
investing real estate items.
The corresponding intangible asset item was
Intangible assets 17,026,655.19 25,461,786.16 -33.13% restated as the investing real estate item due to
land leasing.
Short-term borrowings 208,305,912.00 31,427,500.00 562.81% Increase of export invoice financing borrowings
The end of last year saw a loss on the unsettled
Transactional financial
0.00 363,255.25 -100.00% forward exchange contracts while there was no
liabilities
such a case in the reporting period.
Operating revenues decreased, bringing down
Accounts payable 425,401,429.10 647,831,038.73 -34.33%
the procurement.
Accounts received in
26,519,346.16 12,488,450.33 112.35% Increase of advances from customers
advance
The Company borrowed from the controlling
Other payables 232,202,527.95 53,435,685.41 334.55%
shareholder.
Deferred income tax Gains on the unsettled forward exchange
1,129,348.13 44,686.69 2427.26%
liabilities contracts
Inventory falling price provisions decreased over
Asset impairment loss 2,780,336.49 4,391,503.91 -36.69%
the same period of last year.
Assessment gain on unsettled forward exchange
Gain on fair value change 7,349,219.30 -7,195,643.08 -202.13%
contracts
A smaller income from delivered forward
Investment income 3,576,345.30 5,118,543.74 -30.13%
exchange contracts
Non-business income 4,709,673.01 2,711,575.32 73.69% Increase of the subsidy income
Non-business expenses 826,435.12 1,450,451.43 -43.02% A smaller loss on disposal of fixed assets
The gross profit rate increased and the
Net profit 11,379,048.09 -25,893,398.92 143.95%
administrative and selling expenses decreased.
Major changes to the profit structure or sources of the Company during the reporting period:
□ Applicable √ Inapplicable
Reporting period progress of the future development planning in the disclosed documents of the Company such as share-soliciting
prospectuses, offering prospectuses, asset reorganization reports, etc.:
10
□ Applicable √ Inapplicable
III. Breakdown of main business
Unit: RMB Yuan
Increase/decrease Increase/decrease Increase/decrease
of operating of operating of gross profit
Operating Gross profit
Item Operating costs revenues over the costs over the rate over the
revenues rate (%)
same period of same period of same period of
last year (%) last year (%) last year (%)
Classified by industry:
Small home
appliance 845,775,086.33 752,449,378.64 11.03% -19.04% -20.76% 1.94%
manufacture
Total 845,775,086.33 752,449,378.64 11.03% -19.04% -20.76% 1.94%
Classified by product:
Gourmet
488,925,179.51 429,741,895.84 12.10% -16.05% -19.72% 4.02%
cooking
Home
223,417,870.62 208,838,462.09 6.53% -14.45% -12.74% -1.84%
assistant
Tea/coffee 78,725,449.38 70,039,397.60 11.03% -27.58% -26.50% -1.30%
Others 54,706,586.82 43,829,623.11 19.88% -40.78% -45.00% 6.15%
Total 845,775,086.33 752,449,378.64 11.03% -19.04% -20.76% 1.94%
Classified by region:
Australia 57,303,433.44 51,450,875.04 10.21% -8.25% -10.29% 2.04%
Africa 10,842,700.35 9,273,579.96 14.47% -15.16% -12.81% -2.30%
America 306,490,146.35 272,173,119.01 11.20% -19.84% -23.04% 3.70%
Europe 194,967,224.92 169,559,595.38 13.03% -3.92% -5.63% 1.58%
Asia 276,171,581.27 249,992,209.25 9.48% -28.11% -28.22% 0.14%
Total 845,775,086.33 752,449,378.64 11.03% -19.04% -20.76% 1.94%
IV. Core competitiveness analysis
□ Applicable √ Inapplicable
V. Investment analysis
11
1. Investments in equities of external parties
（1） Investments in external parties
Investments in external parties
Investment amount in the reporting period Investment amount in the same period of
+/-%
(RMB Ten thousand) last year (RMB Ten thousand)
0.00 3,981.19 -100%
Particulars about investees
Proportion of the Company’s investment in
Name of investee Main business
the investee’s total equity interests (%)
（2）Equity-holdings in financial enterprises
□ Applicable √ Inapplicable
（3）Securities investments
□ Applicable √ Inapplicable
Shareholdings in other listed companies:
□ Applicable √ Inapplicable
2. Wealth management entrustment, derivative investments and entrustment loans
（1）Wealth management entrustment
12
Unit: RMB Ten thousand
Actual
Related-party Principal Impairment
Name of Payment gain/loss in
Relation transaction Product variety Amount entrusted Beginning date Ending date actually provision (if Predicted gain
trustee determination reporting
or not recovered any)
period
Xiamen Huli
Highest
sub-branch of Break-even
annualized
China None No floating income 5,000 2013/6/25 2013/8/1 0 0 30.4 5.00
income rate at
Construction product
6%
Bank
Highest
Xiamen Break-even
annualized
International None No floating income 2,000 2013/6/28 2013/9/29 0 0 28.4 0.92
income rate at
Bank product
5.5%
Total 7,000 0 0 58.8 5.92
Source of the entrusted funds Self-owned funds
Cumulative overdue principals and gains 0
Lawsuit (if applicable) N/A
Disclosure date of the board announcement approving
2013/03/12
the wealth management entrustment (if any)
Disclosure date of the general meeting announcement
2013/05/18
approving the wealth management entrustment (if any)
13
（2）Derivative investments
Unit: RMB Ten thousand
Related-p Proportion of the closing Actual
Opening Impairment Closing
Relatio arty Type of derivative Initial investment investment amount in the gain/loss in
Operator Beginning date Ending date investment provision (if investment
n transactio investment amount Company’s closing net assets reporting
amount any) amount
n or not (%) period
Shanghai branch of First
N/A No Forward exchange 3,136.35 8 Jul. 2013 12 Jul. 2013 0.00 3,136.35 6.46% 29.40
Sino Bank
Shanghai branch of First
N/A No Forward exchange 1,853.88 24 Jul. 2013 31 Jul. 2013 0.00 1,853.88 3.82% -11.76
Sino Bank
Shanghai branch of First
N/A No Forward exchange 3,140.90 19 Aug. 2013 30 Aug. 2013 0.00 3,140.90 6.47% 35.15
Sino Bank
Huli sub-branch of China
N/A No Forward exchange 1,853.88 23 Aug. 2013 23 Nov. 2013 0.00 1,853.88 3.82% -1.89
Construction Bank
Zhangzhou branch of
N/A No Forward exchange 1,862.16 9 Sept. 2013 9 Oct. 2013 0.00 1,862.16 3.84% 2.34
Bank of China
Zhangzhou branch of
N/A No Forward exchange 6,169.80 20 Sept. 2013 20 Sept. 2013 0.00 6,169.80 12.71% 15.70
China Construction Bank
Zhangzhou branch of
N/A No Forward exchange 1,571.15 25 Oct. 2013 25 Nov. 2013 0.00 1,571.15 3.24% 23.68
China Construction Bank
Zhangzhou branch of
N/A No Forward exchange 1,571.15 25 Nov. 2013 25 Dec. 2013 0.00 1,571.15 3.24% 21.63
China Construction Bank
Shanghai branch of First
N/A No Forward exchange 1,242.28 25 Nov. 2013 29 Nov. 2013 0.00 1,242.28 2.56% -3.18
Sino Bank
Shanghai branch of First
N/A No Forward exchange 3,139.15 2 Dec. 2013 31 Dec. 2013 0.00 3,139.15 6.47% 28.15
Sino Bank
Zhangzhou branch of
N/A No Forward exchange 1,848.36 17 Dec. 2013 31 Dec. 2013 0.00 1,848.36 3.81% 5.67
China Construction Bank
14
Related-p Proportion of the closing Actual
Opening Impairment Closing
Relatio arty Type of derivative Initial investment investment amount in the gain/loss in
Operator Beginning date Ending date investment provision (if investment
n transactio investment amount Company’s closing net assets reporting
amount any) amount
n or not (%) period
Zhangzhou branch of
N/A No Forward exchange 1,233.96 24 Dec. 2013 31 Dec. 2013 0.00 1,233.96 2.54% 6.74
China Construction Bank
Zhangzhou branch of
Industrial and Commercial N/A No Forward exchange 3,119.20 6 Jan. 2014 29 Jan. 2014 0.00 3,119.20 6.43% 23.25
Bank of China
Shanghai branch of First
N/A No Forward exchange 3,141.05 21 Jan. 2014 29 Jan. 2014 0.00 3,141.05 6.47% 32.90
Sino Bank
Huli sub-branch of China
N/A No Forward exchange 3,119.20 27 Jan. 2014 28 Apr. 2014 0.00 3,119.20 6.43% 9.60
Construction Bank
Shanghai branch of First
N/A No Forward exchange 3,120.75 10 Feb. 2014 24 Feb. 2014 0.00 3,120.75 6.43% -6.35
Sino Bank
Shanghai branch of First
N/A No Forward exchange 3,137.25 24 Feb. 2014 28 Feb. 2014 0.00 3,137.25 6.46% 26.90
Sino Bank
Shanghai branch of First
N/A No Forward exchange 3,137.05 13 Mar. 2014 20 Mar. 2014 0.00 3,137.05 6.46% 23.75
Sino Bank
Huli sub-branch of China
N/A No Forward exchange 3,135.75 24 Mar. 2014 28 Mar. 2014 0.00 3,135.75 6.46% 35.55
Construction Bank
Shanghai branch of First
N/A No Forward exchange 3,133.70 25 Mar. 2014 3 Apr. 2014 0.00 3,133.70 6.46% 18.65
Sino Bank
Huli sub-branch of China
N/A No Forward exchange 3,120.80 15 Apr. 2014 22 Apr. 2014 0.00 3,120.80 6.43% 9.35
Construction Bank
Shanghai branch of First
N/A No Forward exchange 3,107.60 30 Apr. 2014 7 May 2014 0.00 3,107.60 6.40% -19.70
Sino Bank
Huli sub-branch of China
N/A No Forward exchange 3,096.25 9 May 2014 13 May 2014 0.00 3,096.25 6.38% -12.50
Construction Bank
15
Related-p Proportion of the closing Actual
Opening Impairment Closing
Relatio arty Type of derivative Initial investment investment amount in the gain/loss in
Operator Beginning date Ending date investment provision (if investment
n transactio investment amount Company’s closing net assets reporting
amount any) amount
n or not (%) period
Huli sub-branch of China
N/A No Forward exchange 1,848.36 6 Jun. 2014 6 Jun. 2014 0.00 1,848.36 3.81% 5.04
Construction Bank
Huli sub-branch of China
N/A No Forward exchange 3,087.85 9 Jun. 2014 9 Jun. 2014 0.00 3,087.85 6.36% -6.85
Construction Bank
Zhangzhou branch of
N/A No Forward exchange 1,850.94 24 Jun. 2014 24 Jun. 2014 0.00 1,850.94 3.81% 13.86
China Construction Bank
Shanghai branch of First
N/A No Forward exchange 1,262.12 17 Jun. 2014 17 Jul. 2014 1,262.12 1,262.12 2.60% 39.10
Sino Bank
Zhangzhou branch of
N/A No Forward exchange 629.20 15 Jul. 2013 31 Jul. 2013 629.20 629.20 1.30% 17.09
China Construction Bank
Shanghai branch of First
N/A No Forward exchange 628.91 17 Jul. 2013 31 Jul. 2013 628.91 628.91 1.30% 11.79
Sino Bank
Zhangzhou branch of
N/A No Forward exchange 629.20 15 Aug. 2013 2 Sept. 2013 629.20 629.20 1.30% 14.72
China Construction Bank
Shanghai branch of First
N/A No Forward exchange 628.91 16 Aug. 2013 30 Aug. 2013 628.91 628.91 1.30% 10.49
Sino Bank
Zhangzhou branch of
N/A No Forward exchange 629.20 13 Sept. 2013 27 Sept. 2013 629.20 629.20 1.30% 14.29
China Construction Bank
Shanghai branch of First
N/A No Forward exchange 628.91 16 Sept. 2013 30 Sept. 2013 628.91 628.91 1.30% 8.99
Sino Bank
Zhangzhou branch of
Industrial and Commercial N/A No Forward exchange 3,145.65 19 Sept. 2013 27 Sept. 2013 3,145.65 3,145.65 6.48% 81.55
Bank of China
Zhangzhou branch of
N/A No Forward exchange 629.20 16 Sept. 2013 30 Sept. 2013 629.20 629.20 1.30% 13.40
China Construction Bank
16
Related-p Proportion of the closing Actual
Opening Impairment Closing
Relatio arty Type of derivative Initial investment investment amount in the gain/loss in
Operator Beginning date Ending date investment provision (if investment
n transactio investment amount Company’s closing net assets reporting
amount any) amount
n or not (%) period
Shanghai branch of First
N/A No Forward exchange 628.91 15 Oct. 2013 31 Oct. 2013 628.91 628.91 1.30% 7.99
Sino Bank
Zhangzhou branch of
N/A No Forward exchange 314.36 17 Oct. 2013 31 Oct. 2013 314.36 314.36 0.65% 6.02
China Construction Bank
Shanghai branch of First
N/A No Forward exchange 3,144.00 21 Oct. 2013 31 Oct. 2013 3,144.00 3,144.00 6.48% 50.80
Sino Bank
Zhangzhou branch of
N/A No Forward exchange 314.36 8 Oct. 2013 31 Oct. 2013 314.36 314.36 0.65% 5.61
China Construction Bank
Shanghai branch of First
N/A No Forward exchange 3,145.55 21 Nov. 2013 30 Nov. 2013 3,145.55 3,145.55 6.48% 59.65
Sino Bank
Shanghai branch of First
N/A No Forward exchange 3,144.00 8 Nov. 2013 10 Dec. 2013 3,144.00 3,144.00 6.48% 53.00
Sino Bank
Shanghai branch of First
N/A No Forward exchange 309.68 2 Dec. 2013 20 Dec. 2013 0.00 309.68 0.64% -2.51
Sino Bank
Shanghai branch of First
N/A No Forward exchange 307.47 22 Jul. 2013 26 Jul. 2013 0.00 307.47 0.63% -1.88
Sino Bank
Shanghai branch of First
N/A No Forward exchange 304.91 22 Jul. 2013 26 Aug. 2013 0.00 304.91 0.63% -7.28
Sino Bank
Shanghai branch of First
N/A No Forward exchange 304.99 26 Aug. 2013 30 Aug. 2013 0.00 304.99 0.63% -5.01
Sino Bank
Shanghai branch of First
N/A No Forward exchange 189.74 19 Aug. 2013 23 Aug. 2013 0.00 189.74 0.39% 3.67
Sino Bank
Shanghai branch of First
N/A No Forward exchange 316.23 24 Sept. 2013 27 Sept. 2013 0.00 316.23 0.65% -0.44
Sino Bank
Shanghai branch of First N/A No Forward exchange 322.61 21 Oct. 2013 25 Oct. 2013 0.00 322.61 0.66% 12.49
17
Related-p Proportion of the closing Actual
Opening Impairment Closing
Relatio arty Type of derivative Initial investment investment amount in the gain/loss in
Operator Beginning date Ending date investment provision (if investment
n transactio investment amount Company’s closing net assets reporting
amount any) amount
n or not (%) period
Sino Bank
Zhangzhou branch of
N/A No Forward exchange 629.20 15 Jan. 2013 28 Jan. 2013 629.20 629.20 1.30% 3.26
China Construction Bank
Zhangzhou branch of
N/A No Forward exchange 628.71 21 Jan. 2013 28 Jan. 2013 628.71 628.71 1.30% 1.89
China Construction Bank
Suzhou branch of First
N/A No Forward exchange 628.91 17 Jan. 2013 29 Jan. 2013 628.91 628.91 1.30% 2.85
Sino Bank
Suzhou branch of First
N/A No Forward exchange 1,264.72 2 Jan. 2013 29 Jan. 2013 1,264.72 1,264.72 2.61% 14.60
Sino Bank
Suzhou branch of First
N/A No Forward exchange 1,897.08 2 Jan. 2013 30 Jan. 2013 1,897.08 1,897.08 3.91% 23.25
Sino Bank
Suzhou branch of First
N/A No Forward exchange 628.91 14 Feb. 2013 21 Feb. 2013 628.91 628.91 1.30% 2.90
Sino Bank
Suzhou branch of First
N/A No Forward exchange 1,256.28 22 Feb. 2013 22 Feb. 2013 0.00 1,256.28 2.59% -9.78
Sino Bank
Suzhou branch of First
N/A No Forward exchange 1,256.28 22 Feb. 2013 25 Feb. 2013 0.00 1,256.28 2.59% -10.20
Sino Bank
Zhangzhou branch of
N/A No Forward exchange 629.20 15 Feb. 2013 25 Feb. 2013 629.20 629.20 1.30% 2.52
China Construction Bank
Suzhou branch of First
N/A No Forward exchange 628.14 22 Feb. 2013 26 Feb. 2013 0.00 628.14 1.29% -4.74
Sino Bank
Suzhou branch of First
N/A No Forward exchange 1,260.04 1 Mar. 2013 8 Mar. 2013 1,260.04 1,260.04 2.60% 6.62
Sino Bank
Suzhou branch of First
N/A No Forward exchange 1,261.34 8 Mar. 2013 15 Mar. 2013 1,261.34 1,261.34 2.60% 7.54
Sino Bank
18
Related-p Proportion of the closing Actual
Opening Impairment Closing
Relatio arty Type of derivative Initial investment investment amount in the gain/loss in
Operator Beginning date Ending date investment provision (if investment
n transactio investment amount Company’s closing net assets reporting
amount any) amount
n or not (%) period
Zhangzhou branch of
N/A No Forward exchange 629.20 15 Mar. 2013 20 Mar. 2013 629.20 629.20 1.30% 4.28
China Construction Bank
Suzhou branch of First
N/A No Forward exchange 628.91 15 Mar. 2013 20 Mar. 2013 628.91 628.91 1.30% 4.20
Sino Bank
Zhangzhou branch of
N/A No Forward exchange 3,142.30 25 Mar. 2013 25 Mar. 2013 0.00 3,142.30 6.47% 2.95
China Construction Bank
Zhangzhou branch of
N/A No Forward exchange 629.20 15 Apr. 2013 19 Apr. 2013 629.20 629.20 1.30% 7.49
China Construction Bank
Suzhou branch of First
N/A No Forward exchange 628.91 16 Apr. 2013 19 Apr. 2013 628.91 628.91 1.30% 7.41
Sino Bank
Suzhou branch of First
N/A No Forward exchange 942.21 22 Apr. 2013 24 Apr. 2013 0.00 942.21 1.94% 2.57
Sino Bank
Suzhou branch of First
N/A No Forward exchange 942.21 22 Apr. 2013 25 Apr. 2013 0.00 942.21 1.94% 3.83
Sino Bank
Suzhou branch of First
N/A No Forward exchange 1,260.24 9 May 2013 9 May 2013 1,260.24 1,260.24 2.60% 26.67
Sino Bank
Zhangzhou branch of
N/A No Forward exchange 629.20 15 May 2013 17 May 2013 629.20 629.20 1.30% 11.47
China Construction Bank
Suzhou branch of First
N/A No Forward exchange 628.91 17 May 2013 21 May 2013 628.91 628.91 1.30% 12.25
Sino Bank
Suzhou branch of First
N/A No Forward exchange 634.30 28 May 2013 30 May 2013 634.30 634.30 1.31% 23.30
Sino Bank
Suzhou branch of First
N/A No Forward exchange 628.91 14 Jun. 2013 14 Jun. 2013 628.91 628.91 1.30% 15.29
Sino Bank
Zhangzhou branch of N/A No Forward exchange 629.20 17 Jun. 2013 17 Jun. 2013 629.20 629.20 1.30% 15.46
19
Related-p Proportion of the closing Actual
Opening Impairment Closing
Relatio arty Type of derivative Initial investment investment amount in the gain/loss in
Operator Beginning date Ending date investment provision (if investment
n transactio investment amount Company’s closing net assets reporting
amount any) amount
n or not (%) period
China Construction Bank
Suzhou branch of First
N/A No Forward exchange 356.18 31 Jan. 2013 31 Jan. 2013 0.00 356.18 0.73% 11.71
Sino Bank
Suzhou branch of First
N/A No Forward exchange 356.18 29 Feb. 2013 20 Feb. 2013 0.00 356.18 0.73% 21.16
Sino Bank
Suzhou branch of First
N/A No Forward exchange 363.17 1 Mar. 2013 21 Mar. 2013 363.17 363.17 0.75% 36.12
Sino Bank
Suzhou branch of First
N/A No Forward exchange 358.51 25 Mar. 2013 28 Mar. 2013 0.00 358.51 0.74% 25.92
Sino Bank
Suzhou branch of First
N/A No Forward exchange 348.36 22 Apr. 2013 22 Apr. 2013 0.00 348.36 0.72% 36.11
Sino Bank
Suzhou branch of First
N/A No Forward exchange 338.80 27 May 2013 29 May 2013 0.00 338.80 0.70% 32.06
Sino Bank
Suzhou branch of First
N/A No Forward exchange 332.43 17 Jun. 2013 19 Jun. 2013 0.00 332.43 0.68% 5.72
Sino Bank
Total 117,713.01 -- -- 35,620.74 117,713.01 242.62% 1,045.29
Capital source for derivative investment Self-owned funds
Disclosure date of the board announcement approving the wealth
12 Mar. 2013
management entrustment (if any)
Disclosure date of the general meeting announcement approving the wealth
18 May 2013
management entrustment (if any)
Analysis on risks and control measures of derivative products held in the 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.
reporting period (including but not limited to market risk, liquidity risk, 2. Control measures:
credit risk, operation risk, law risk, etc.)
(1) Principle: The purpose of the financial derivative operation is to avoid risks. The Company shall not conduct transactional operation for other purposes than risk
avoidance. The Company shall not conduct complex derivative trading above the actual operation needs and shall not speculate in derivative trading with hedging as an
20
Related-p Proportion of the closing Actual
Opening Impairment Closing
Relatio arty Type of derivative Initial investment investment amount in the gain/loss in
Operator Beginning date Ending date investment provision (if investment
n transactio investment amount Company’s closing net assets reporting
amount any) amount
n or not (%) period
excuse. The overall contractual amount for risk avoidance of the Company shall not exceed the summation of the net risk exposure of the existing assets and liabilities
and the net risk exposure of assets and liabilities arising from the operation of the Company in the coming year.
(2) Staff requirements: Personnel taking part in the investment shall all fully understand the risks of derivative investment and strictly execute the business operation
and risk management mechanisms for derivative investment.
(3) Operation standardization: Before making a derivative investment, the Company shall rationally equip itself with professional personnel for investment
decision-making, business operation, risk control, etc. It shall also inquire and compare among various markets and products. Besides, it shall strictly control the variety
and size of derivative investment and try to choose derivative trading on exchange as much as possible.
(4) Periodic evaluation: Derivative investments shall be evaluated at least twice for a month and the evaluation report shall be sent to a high-ranking executive
authorized by the Board of Directors. And a derivative investment report shall be sent to the Board of Directors annually.
(5) Loss limit: The investment loss on a single derivative and all the investment loss shall not exceed 20% of the total investment amount.
(6) Audit system: The audit department audits derivative product trading periodically and submits audit reports to relevant units.
(1) Gains and losses effected by completed transaction amount of derivative products was RMB 3.4669 million, and gain from undelivered transaction was RMB 7.3492
Changes of market prices or fair values in the reporting period of the
million in the reporting period.
invested derivatives. And the analysis on the fair value of the derivatives
(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.
should include the specific use methods and the relevant assumptions and
(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
parameters.
estimated exchange rate and the currency amount when bought in.
Whether significant changes occurred to the Company’s accounting policy
There were no significant changes between the Company’s accounting policy and specific accounting principles of derivatives in the reporting period and those in the
and specific accounting principles of derivatives in the reporting period
last reporting period.
compared to the previous reporting period
The Company has carried out a strict internal assessment for the financial derivative business and has established a corresponding supervision mechanism. We are of the
Special opinion from independent directors, sponsor or financial consultant
opinion that the financial derivative business conducted by the Company is fairly necessary in its routine operation and is in compliance with relevant laws and
on the Company’s derivatives investment and risk control
regulations, with the risks controllable.
21
（3）Entrustment loans
□ Applicable √ Inapplicable
3. Use of raised funds
（1）Overview of the use of raised funds
□ Applicable √ Inapplicable
（2）Projects invested with raised funds as promised
□ Applicable √ Inapplicable
（3）Change of raised-funds-invested projects
□ Applicable √ Inapplicable
（4）Projects invested with raised funds
□ Applicable √ Inapplicable
22
4. Analysis to main subsidiaries and stock-participating companies
Operating Operating
Total assets Net assets (RMB Net profit (RMB
Company name Company variety Industry Main products/services Registered capital revenues (RMB profit (RMB
(RMB Yuan) Yuan) Yuan)
Yuan) Yuan)
Development, production and sale of small home appliances,
Tsann Kuen Small home
Controlled new-typed electronic components, light industrial products
(Zhangzhou) appliance USD 160 million 2,223,624,671.36 1,309,295,581.86 852,286,404.30 15,421,455.38 17,838,254.37
subsidiary and modern office supplies; design and manufacture molds of
Enterprise Co., Ltd. manufacture
the aforesaid products
Xiamen Star
Wholly-owned
International Travel Tourism Inbound and domestic tourism services RMB 5 million 840,111.23 840,111.23 0.00 -3,183.93 -148.99
subsidiary
Service Co., Ltd.
Tsann Kuen Small home Production and sale of household appliances, electronic, light
Controlled
(Shanghai) Enterprise appliance industry products, modern office equipments and their related USD 40 million 94,777,272.06 91,576,750.33 1,157,325.31 -2,337,415.69 -2,337,415.69
subsidiary
Co., Ltd. manufacture molds
Tsann Kuen
Subsidiary of a Small home Development and production of small household electrical
(Zhangzhou) South
controlled appliance appliances, new kind of electronic appliances and parts, light RMB 5 million 11,958,322.25 11,398,542.37 0.00 198,441.50 198,441.50
Port Electronics
subsidiary manufacture industrial products, modern office supplies
Enterprise Co., Ltd.
Tsann Kuen Non-corporate
Secondary
(Zhangzhou) unit of a
vocational Secondary vocational education RMB 3 million 1,067,048.79 -928,421.20 327,243.41 62,913.11 125,356.24
Vocational Technical controlled
education
Institute subsidiary
Import & Export, Wholesales, retail and its after-sale services
of household appliances, computer sets and their components,
Shanghai Star Subsidiary of a Sale of
communication equipments, mechanical and electrical RMB 4.95 million
Commerce & Trade controlled household 14,925,025.27 5,291,362.99 1,405,762.29 -301,877.02 -302,877.02
equipments, office supplies and the related attachments
Co., Ltd. subsidiary appliances
(including kitchen facilities). Self-operating and acting as an
agent of various kinds of merchandise and import & export of
23
Operating Operating
Total assets Net assets (RMB Net profit (RMB
Company name Company variety Industry Main products/services Registered capital revenues (RMB profit (RMB
(RMB Yuan) Yuan) Yuan)
Yuan) Yuan)
technology; wholesale and retail of roasted coffee powder and
general merchandise, as well as other sales (not real foods)
Wholesale and retail: daily necessities, household appliances,
computer sets and auxiliary products, communication
Xiamen Star Subsidiary of a Sale of equipments, electrical and mechanical equipments, office
Commerce & Trade controlled household supplies, kitchen supplies and their auxiliary products; Import RMB 30 million 10,725,410.72 10,701,117.91 0.00 -10,090,115.87 -12,072,228.24
Co., Ltd. subsidiary appliances and export of various goods and technologies, while excluding
those products and technologies restricted by the government
or to be imported or exported.
Wholesale and retail: daily necessities, household appliances,
computer sets and auxiliary products, communication
equipments, electrical and mechanical equipments, office
Xiamen Star Subsidiary of a Sale of
supplies, kitchen supplies and their auxiliary products; Import
Comgistic Capital controlled household RMB 28 million 27,989,053.50 27,989,053.50 0.00 8,017.19 8,017.19
and export of various goods and technologies (Without the
Co., Ltd subsidiary appliances
attachments of catalogue of export & import products), while
excluding those products and technologies restricted by the
government or to be imported or exported.
Subsidiary of a
East Sino Trade and
controlled Business investment HKD 135,993,000 107,741,712.27 107,712,311.61 0.00 -45,251.60 -45,251.60
Development Limited investment
subsidiary
Subsidiary of a
Pt.Star Comgistic Home appliance Production and sale of home appliances, electronics, light
controlled USD 17.5 million 102,038,862.22 76,354,895.12 18,152,423.72 -9,996,400.24 -10,023,569.55
Indonesia manufacture industrial products and modern office supplies
subsidiary
24
5. Significant projects of investments with non-raised funds
□ Applicable √ Inapplicable
VI. Predict the operating results of Jan.-Sept. 2013
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the
next reporting period according to prediction, as well as explanations on the reasons:
√ Applicable □ Inapplicable
Prediction: turning deficit to profit
Type of the predicted data: interval data
Item Jan.-Sept. 2013 Jan.-Sept. 2012 +/- (%)
Predicted accumulative net profit (RMB
1,700-2,100 -222 866%-1046%
Ten thousand)
Basic EPS (RMB Yuan/share) 0.09-0.11 -0.01 1000%-1200%
The Company strictly controlled the procurement costs, enhanced the internal
operation and management and optimized the production and sales processes. As a
Explanation about the predictions
result, the overall gross profit and the management and sales expenses improved over
last year.
VII. Implementation of profit allocation during the reporting period
Profit allocation plan implemented during the reporting period, especially execution and adjustment of the cash dividend plan and the
plan for turning capital reserve into share capital:
√ Applicable □ Inapplicable
As the profit allocation plan for 2012, the Company, based on the total 185,391,680 shares as at the end of 2012, distributed a cash
dividend of RMB 0.85 (tax included) for every 10 shares held by its shareholders. The distribution was completed on 26 Jun. 2013.
For details, see the “Announcement on Implementation of the Equity Distribution for 2012” disclosed on Securities Times, Ta Kung
Pao (HK) and http://www.cninfo.com.cn on 19 Jun. 2013.
VIII. Pre-plan for profit allocation and turning capital reserve into share capital for the
reporting period
□ Applicable √ Inapplicable
25
IX. Particulars about researches, visits and interviews received in this reporting period
Place of Way of Main discussion and materials provided
Time of reception Visitor type Visitor
reception reception by the Company
Operation of the Company, B-share
19 Jan. 2013 Office By phone Individual Mr. Yu policies, with no written materials
provided by the Company
Operation of the Company, B-share
7 Feb. 2013 Office By phone Individual Mr. Yang policies, with no written materials
provided by the Company
Information about the annual report of the
13 Mar. 2013 Office By phone Individual Mr. Yu Company, with no written materials
provided by the Company
Securities and
Custody
26 Jun. 2013 Office By phone Institution Dividend distribution and tax deduction
Services of
HSBC
V. Significant Events
(I) Corporate governance
Company governance practice has no difference with requirements of relevant law and rules of Company Law and CSRC
(II) Significant litigations and arbitrations
□Applicable √Inapplicable
(III) Media’s questions
□Applicable √Inapplicable
(IV) Bankruptcy or reorganization events
□Applicable √Inapplicable
(V) Assets transaction events
1. Purchase of assets
□Applicable √Inapplicable
26
2. Sale of assets
Unit: RMB Ten Thousand
Net profit
Ratio of Relationship Whether or Whether or not
contributed
the net between the not the the creditor’s
to the Company Related-
Impact profit contributed transaction party ownership of right and
Transaction Disposal Transacti from the Pricing party Disclosur Disclosur
Assets sold to the by the asset to and the Company the asset liabilities
party date on price period-begin principle transacti e date e index
company the Company (applicable for involved has involved have
to the on or not
to the related-party been fully been fully
disposal
total profit (%) transactions) transferred transferred
date
PT TSANN
KUEN Under control of
Open, fair related
PROPERTY Electronic 28, May, the same actual inapplica inapplica
0.23 0.23 0.02% and just enterpris Yes Yes
DEVELOPME equipment 2013 5.08 controller ble ble
principle es
NT
INDONESIA
Zhangzhou Hardware Settled Not
2013.01.31 0.29 0.29 0.03% inapplicable
Canming device 0.30 according related
Injection to the enterpris
Zhangzhou 31, Jan,
molding 0.39 0.39 0.04% contract es
Chuangyi 2013 0.40
devices signed by
Zhangzhou 31, Jan, both parties
Other devices 0.69 0.69 0.07%
Hongyuan 2013 0.81
Zhangzhou Die casting 31, Jan,
0.21 0.21 0.02%
Ruicheng devices 2013 0.25
Zhangzhou Die casting 31, Jan,
0.47 0.47 0.04%
Yufeng devices 2013 0.50
Injection
Zhangzhou
molding 2013.02.28 1.25 1.25 0.12%
LianFuxin 1.27
devices
Cheng
Housings 2013.03.31 65.56 65.56 6.29%
Qingling 80.25
Xiamen Jin Die casting
2013.03.31 3.43 3.43 0.33%
Shengrong devices 3.50
Xiamen
Other devices 2013.03.31 2.13 2.13 0.20%
Weiyao 2.20
Zhangzhou Die casting
2013.03.31 3.73 3.73 0.36%
Boer devices 3.80
Zhangzhou Die casting
2013.03.31 2.06 2.06 0.20%
Huatai devices 2.10
Zhangzhou
Other devices 2013.03.31 0.22 0.22 0.02%
Kunyi 0.23
27
Net profit
Ratio of Relationship Whether or Whether or not
contributed
the net between the not the the creditor’s
to the Company Related-
Impact profit contributed transaction party ownership of right and
Transaction Disposal Transacti from the Pricing party Disclosur Disclosur
Assets sold to the by the asset to and the Company the asset liabilities
party date on price period-begin principle transacti e date e index
company the Company (applicable for involved has involved have
to the on or not
to the related-party been fully been fully
disposal
total profit (%) transactions) transferred transferred
date
Injection
Zhangzhou
molding 2013.03.31 0.09 0.09 0.01%
Lanboni 0.09
devices
Zhangzhou Die casting
2013.03.31 2.55 2.55 0.24%
Yingfa devices 2.60
Xiamen Die casting
2013.04.30 7.47 7.47 0.72%
JinShengrong devices 9.00
Xiamen
Other devices 2013.04.30 2.14 2.14 0.20%
LianFuxin 2.50
Zhangzhou Die casting
2013.04.30 1.18 1.18 0.11%
Boer devices 1.20
Zhangzhou
Other devices 2013.04.30 1.03 1.03 0.10%
XinJiafeng 1.20
Zhangzhou Die casting
2013.04.30 1.69 1.69 0.16%
Yixin devices 1.76
Zhangzhou Die casting
2013.05.31 1.46 1.46 0.14%
Hecheng devices 1.65
Zhanghou Hardware
2013.05.31 7.01 7.01 0.67%
Xangkun devices 9.77
Electronic
Tommy 2013.06.29 -0.72 -0.72 -0.07%
equipment 0.19
Die casting
Hecheng 2013.06.30 1.54 1.54 0.15%
devices 1.80
Ruida Other devices 2013.06.30 4.71 4.71 0.45%
4.80
Shenzhen Hardware
2013.06.30 6.02 6.02 0.58%
Dachang devices 15.50
Shenzhen Hardware
2013.06.30 12.74 12.74 1.22%
Hua Yuede devices 22.00
Hardware
Xiamen Deri 2013.06.30 3.82 3.82 0.37%
devices 5.56
Xiamen Hardware
2013.06.30 0.29 0.29 0.03%
Yichengda devices 0.30
Zhangzhou Die casting
2013.06.30 0.25 0.25 0.02%
Boer devices 0.25
Zhangzhou Die casting 2013.06.30 -1.64 -1.64 -0.16%
28
Net profit
Ratio of Relationship Whether or Whether or not
contributed
the net between the not the the creditor’s
to the Company Related-
Impact profit contributed transaction party ownership of right and
Transaction Disposal Transacti from the Pricing party Disclosur Disclosur
Assets sold to the by the asset to and the Company the asset liabilities
party date on price period-begin principle transacti e date e index
company the Company (applicable for involved has involved have
to the on or not
to the related-party been fully been fully
disposal
total profit (%) transactions) transferred transferred
date
Jingjin devices 70.51
Zhangzhou
Bakelite
Rong 2013.06.30 7.28 7.28 0.70%
equipment 7.42
Xinsheng
Zhangzhou Die casting
2013.06.30 4.52 4.52 0.43%
Ruicheng devices 4.70
Zhangzhou Bakelite
2013.06.30 2.89 2.89 0.28%
Shunkun equipment 10.00
Zhangzhou Hardware
2013.06.30 14.52 14.52 1.39%
Xiangkun devices 35.00
Total 161.47 161.47 15.49%
308.49
3. Business combination
See the description of change of consolidation scope in notes to financial staments.
VI. Implementation situation and influence of equity incentive plan of the Company
□ Applicable √ Inapplicable
VII. Significant related-party transactions
29
1. Related-party transaction relevant to routine operation
Transactio
Pricing principle Transaction Proportion in Settlement
Type of the Content of the n
of the amount same kind of method of the Market Disclosu Disclosure
Related party Relationship related-party related-party price(RM
transaction related-party (RMB Ten transactions related-party price re date index
transaction BTen
transaction thousand) (%) transaction
thousand)
Company directly
controlled by key
Purchase of raw
Thermaster Electronic management Purchase of
parts and 1,706.68 3.21
(Xiamen) Ltd. personnel and their commodities
mechanical parts
close family
members
Purchase of raw
STAR COMGISTIC Ultimate controlling Purchase of
parts and 262.71 0.49
CAPITAL CO.,LTD. company commodities
mechanical parts
Under the control of
TSANN KUEN Sales of Sales of parts and
the same ultimate 3,687.37 4.36
JAPAN CO., LTD commodities finished products
controlling company
STAR COMGISTIC Ultimate controlling Sales of Sales of parts and
1,345.37 1.59
CAPITAL CO.,LTD. company commodities finished products
STAR COMGISTIC Ultimate controlling Revenue from Procurement agency fee
11.15 100.00
CAPITAL CO.,LTD. company service
Settled according
Under the control of Expense for repair,
TSANN KUEN Revenue from Open, fair and to the contract 12 Mar. www.cninf
the same ultimate exchange and No 12.22 0.11 No
o.com.cn
JAPAN CO., LTD service just principle signed by both 2013
controlling company return of goods
parties
STAR
Under the control of
INTERNATIONAL Revenue from
the same ultimate service
Cost of services 31.81 0.19
TRAVEL SERVICES
controlling company
CO.,LTD
PT.TSANNKUEN Under the control of
PROPERTY the same actual Sale of Plant
Sale of Plant Assets 5.08 0.01
DEVELOPMENT controller Assets
INDONESIA
Under the control of
PT.TSANNKUEN the same actual Purchase of Purchase of Plant
13.95 0.01
INDONESIA controller Plant Assets Assets
Under the control of
TSAN KUEN
the same actual Rendering
TRADING Rental of plants 150.00 5.60
CO.,LTD(XIAMEN) controller of service
Total 7,226.34
Details of large amount of sales returns No
30
Transactio
Pricing principle Transaction Proportion in Settlement
Type of the Content of the n
of the amount same kind of method of the Market Disclosu Disclosure
Related party Relationship related-party related-party price(RM
transaction related-party (RMB Ten transactions related-party price re date index
transaction BTen
transaction thousand) (%) transaction
thousand)
As for the prediction on the total amount of routine related-party transactions to be The amount for the above related-party transactions were not exceed the predicted amount in the Announcement on
occurred in the reporting period by relevant types, the actual performance in the Prediction of the 2013 Annual Routine Related-party Transactions disclosed on Securities Times, Hong Kong Ta Kung Pao
reporting period and http://www.cninfo.com.cn dated 12 Mar. 2013.
The pricing principle of the related-party transaction of the Company was in accordance with the Pricing Arrangement on
Reason for significant difference between the transaction price and the market price Transactions between Related Enterprises signed with national taxation bureau, which was made by referring to the
horizontal fair trading principle.
2. Related-party transactions regarding purchase and sales of assets
√Applicable □Inapplicable
Book value
Pricing Transaction
of the Assessed value Transfer Settlement
Type of the Content of the principle of Market fair profit or
transferred of transferred price method of the Disclosure
Related party Relationship related-party related-party the value (RMB loss(RMB Disclosure date
assets assets (RMB (RMB Ten related-party index
transaction transaction related-party Ten Thousand) Ten
(RMB Ten Ten Thousand)） Thousand) transaction
transaction Thousand)
Thousand)
According to Settled
Dalian Star
the price in according to
International Subsidiary of Equity Equity
Travel Service subsidiary transfer transfer
the contract 0.00 Inapplicable Inapplicable 10.00 the contract 4.27 Inapplicable Inapplicable
signed by signed by
Co., Ltd.
both parties both parties
The reasons of the differences between transfer price and book value No
Impacts on the company’s operating results ans financial condiction No
3. Significant related-party transitions with joint investments
□Applicable √Inapplicable
4. Significant credits and liabilities with related parties
Was there any non-operating credit or liability with any related party?
□ Yes √No
31
5. Other significant related-party transactions
□Applicable √Inapplicable
VIII Significant contracts and execution
1. Particulars about trusteeship, contract and lease
(1) Status of trust
□Applicable √Inapplicable
(2) Contract
□Applicable √Inapplicable
（3）Particulars about leasing
√Applicable □Inapplicable
Involved
Influences of
Name of Status of amount of the Rental income Recognition
Name of Innitial date Ending date rental income Related-party
contract-out leased leased assets (RMB Ten basis of rental Relationship
leasor of leasing of leasing on the transaction or not
party assets (RMB Ten Thousand) income
Company
Thousand)
Xiamen
According to the
Xiamen Tsann Zhou Bao
Houses price in the
Kuen Enterprise You 4,475.45 1 Jan,2013 30 Jun,2013 285 27.34% No No
and land contract signed
Co., Ltd. logistics
by both parties
co., LTD
32
2. Guarantees provided by the Company
Unit: RMB Ten Thousand
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Actual Guarantee
Disclosure date of Amount occurrence Actual Execut for a
Guarantee Type of
relevant for date (date guarantee Period of guarantee ed or related
d party guarantee
announcement guarantee of amount not party or
agreement) not
One year since the
2012-12-04
2,471.48 0.00 Warranty liability period No No
expired
PT. Star One year since the
2012-12-04
Comgistic 1,235.74 2013-1-29 16.81 Warranty liability period No No
Indonesia expired
One year since the
2012-12-04
3,089.35 2013-6-3 0.00 Warranty liability period No No
expired
Total actual occurred
Total external guarantee line
amount of external
approved during the 0.00 16.81
guarantee during the
reporting period (A1)
reporting period (A2)
Total external guarantee line Total actual external
that has been approved at the guarantee balance at
6,796.57 16.81
end of the reporting period the end of the
(A3) reporting period (A4)
Guarantees provided by the Company for its subsidiaries
Actual Guarantee
Disclosure
occurrence Actual Execut for a
Guarantee date of Amount for Type of
date (date guarantee Period of guarantee ed or related
d party relevant guarantee guarantee
of amount not party or
announcement
agreement) not
No No No No No No No No No
Total actual occurred
Total guarantee line
amount of guarantee
approved for the subsidiaries
0.00 for the subsidiaries 0.00
during the reporting period
during the reporting
(B1) period (B2)
Total actual guarantee
Total guarantee line that has
balance for the
been approved for the
0.00 subsidiaries at the end 0.00
subsidiaries at the end of the
of the reporting
reporting period(B3)
period (B4)
Total guarantee amount provided by the Company (total of the above-mentioned two kinds of guarantees)
Total actual occurred
Total guarantee line
amount of guarantee
approved during the 0.00 0.00
during the reporting
reporting period (A1+B1)
period (A2+B2)
Total guarantee line
Total guarantee line that has
that has been
been approved at the end of
0.00 approved at the end of 0.00
the reporting period
the reporting period
(A3+B3)
(A3+B3)
Proportion of total guarantee amount (A4+B4) to the net assets
0.03%
of the Company
Of which:
Amount of guarantee for shareholders, actual controller and
0.00
related parties (C)
Amount of debt guarantee provided for the guaranteed party
whose asset-liability ratio is not less than 70% directly or 0.00
indirectly (D)
Part of the amount of the total guarantee over 50% of net assets 0.00
33
(E)
Total amount of the above three guarantees (C+D+E) 0.00
Explanation on possible bearing joint responsibility of
Naught
liquidation due to immature guarantee
Explanation on provision of guarantees for external parties in
Naught
violation of the prescribed procedure
3. Other significant contracts
□Applicable √Inapplicable
4. Other significant transaction
□Applicable √Inapplicable
VIIII．Commitments made by the Company or shareholders holding over 5% of the Company’s shares in
the report period, or such commitments carried down into the report period
Commitment Time of making Period of
Commitment Contents Fulfillment
maker commitment commitment
Commitment on share
Naught Naught Naught Naught Naught
reform
Commitment in the
acquisition report or the Naught Naught Naught Naught Naught
report on equity changes
Commitments made upon
Naught Naught Naught Naught Naught
the assets replacement
Commitments made upon
Naught Naught Naught Naught Naught
first issuance or refinance
Based on the confidence on the
continuous and stable development
of the Company, it committed to
The Company’s
increase the shareholding if the
stocks resumed
Company’s stock price lower than
trading on 31 Dec.
HKD2.40 per share after the
2012, but the
implementation of the shares
Company’s stock
contraction and trading resumption,
price hasn’t met
and it would increase no more than
Within one year the condition for
2% shares (i.e. 370,780,000 shares)
FILLMAN since the date of shareholding
Other commitments made to of the total shares issued by the
INVESTMENTS 28 Nov. 2012 initial increase since the
minority shareholders Company within one year since the
LIMITED shareholding date of trading
date of initial shareholding increase.
increase resumption,
If the plan on increasing holding 2%
FILLMAN
shares of the total shares is
Investment
completed, if the stock price hasn’t
Limited hasn’t
reached the target price, it will
implemented the
perform relevant approval
shareholding
procedures, and propose to CSRC
increase plan.
on continuous implementation of
shareholding increase by exemption
of offering.
Executed timely or not? Yes
Detailed reason for failing
The Company’s stock price was not reach the condition of shareholding increase, if the company’s stock price
to execute and the next plan
is lower than HKD2.40 per share in future, implete the shareholding increase plan.
(if any)
X. Particulars about engagement and disengagement of CPAs firm
Has this semi-annual report been audited?
□ Yes √ No
34
XI. Particulars about punishment and rectification
□ Yes √ No
Explaination on rectification
□Applicable √Inapplicable
XII. Explanation on other significant events
□ Yes √ No
VI. Change in Share Capital and Particulars about Shareholders
I. Particulars about the changes in share capital
Unit: share
Before the change Increase/decrease in the change (+,-) After the change
Capitalizat
Issuance ion of
Proporti Bonus Subtot
Number of new public Other Number Proportion
on shares al
shares reserve
fund
I. listed shares 185,391,680 100% 185,391,680 100%
1. Domestically listed
185,391,680 100% 185,391,680 100%
foreign shares
II.Total shares 185,391,680 100% 185,391,680 100%
Reasons for change in share capital
□Applicable √Inapplicable
Particulars about the approvement of the change in share capital
□Applicable √Inapplicable
The transfer of change in share capital
□Applicable √Inapplicable
Change in share capital’s impacts on basic EPS and diluted EPS in recent year and recent issue, and net assets per share attributed to
equity shareholder and financial index etc.
□Applicable √Inapplicable
Other contents was necessary to the company or the securities regulators required to be disclosed
□Applicable √Inapplicable
Changes of the Company’s share number and structure, as well as the corresponding changes in its asset-liability structure
□Applicable √Inapplicable
II. Total number of shareholders and their shareholding
Unit: share
Total number of shareholders at
26,424
the reporting period
Particulars about shares held by shareholders with a shareholding percentage over 5%
Total Pledged or frozen shares
Increase/decrease Number of Number of
Name of Nature of Shareholding shares held
during the non-tradable tradable Status of Number of
shareholder shareholder percentage (%) at the
reporting period shares held shares held shares shares
period-end
FORDCHEE
Foreign
DEVELOPMENT 29.1% 53,940,530 0 0 53,940,530 Naught Naught
corporation
LIMITED
35
EUPA
INDUSTRY Foreign
13.83% 25,633,718 0 0 25,633,718 Naught Naught
CORPORATION corporation
LIMITED
FILLMAN
Foreign
INVESTMENTS 2.49% 4,621,596 0 0 4,621,596 Naught Naught
corporation
LIMITED
Domestic
Chen Yongquan 0.9% 1,668,747 0 0 1,668,747 Naught Naught
natural person
Domestic
Zhou Jie 0.83% 1,538,000 0 0 1,538,000 Naught Naught
natural person
Foreign
Xia Qianru 0.7% 1,299,545 0 0 1,299,545 Naught Naught
natural person
Foreign
Chen Lijuan 0.55% 1,012,791 0 0 1,012,791 Naught Naught
natural person
Foreign
Chen Yongqing 0.53% 981,598 0 0 981,598 Naught Naught
natural person
CSC
Foreign
SECURITIES 0.47% 869,522 0 0 869,522 Naught Naught
corporation
(HK) LTD.
Foreign
Cai Shuhui 0.39% 715,739 0 0 715,739 Naught Naught
natural person
The top three shareholders are the Company’s corporate controlling shareholders. Shareholder
Explanation on associated
Tsai Shuhui is the wife of Wu Tsann Kuen, the Company’s actual controller. It is unknown to the
relationship or/and persons acting
Company whether there exists associated relationship among the shareholders above or they are
in concert among the
acting-in-concert entities as stipulated in the Administrative Measures on Information Disclosure
above-mentioned shareholders:
of Changes in Shareholding of Listed Companies.
Particulars about shares held by the top ten shareholders holding shares not subject to trading moratorium
Type of shares
Name of shareholder Number of tradable shares held at the year-end
Type Number
FORDCHEE DEVELOPMENT
53,940,530 53,940,530
LIMITED
EUPA INDUSTRY
25,633,718 25,633,718
CORPORATION LIMITED
FILLMAN INVESTMENTS
4,621,596 4,621,596
LIMITED
Chen Yongquan 1,668,747 Domestically 1,668,747
listed foreign
Zhou Jie 1,538,000 shares 1,538,000
Xia Qianru 1,299,545 1,299,545
Chen Lijuan 1,012,791 1,012,791
Chen Yongqing 981,598 981,598
CSC SECURITIES (HK) LTD. 869,522 869,522
Cai Shuhui 715,739 715,739
Explanation on associated
The top three shareholders are the Company’s corporate controlling shareholders. Shareholder
relationship or/and persons acting in
Tsai Shuhui is the wife of Wu Tsann Kuen, the Company’s actual controller. It is unknown to
concert among the top ten tradable
the Company whether there exists associated relationship among the shareholders above or they
shareholders and between the top
are acting-in-concert entities as stipulated in the Administrative Measures on Information
ten tradable shareholders and the top
Disclosure of Changes in Shareholding of Listed Companies.
ten shareholders
III. Particulars about the controlling shareholder
Change in controlling shareholder in reporting period
□ Applicable √ Inapplicable
Change of the actual controller during the reporting period
□ Applicable √ Inapplicable
36
VII. Directors, Supervisors, Senior Management Staffs and Employees
I. Changes in shareholding of directors, supervisors and senior management staffs
□ Applicable √ Inapplicable
II. Changes in engagement and dismissal of Directors, Supervisors and Senior Management
Staffs within the reporting period
□ Applicable √ Inapplicable
VIII. Financial Report
I. Auditor’s Report
The company's semiannual financial report was not audited.
II. Financial Statement (Attached)
1. Balance sheet
2. Income statement
3. Cash flow statement
4. Statement of Change in Owners’ Equity
5. Notes to the Financial Statements
IX. Documents Available for Reference
1. Text of Semi-annual Report 2012 signed and sealed by the Board of Directors of the Company.
2. Financial statements signed and sealed by legal representative, principal of accounting work, and manager of finance department.
3. In the reporting period, all texts and originals of the Company’s documents and public notices have been publicly disclosed in
China Securities Journal, Hong Kong Ta Kung Pao and www.cninfo.com.cn designated by CSRC.
Chairman of the Board of Directors: Jian Derong
Date for submission approved by the Board of Directors: 2 Aug. 2013
37
1. Consolidated balance sheet
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Iterm 30 Jun. 2013 31 Dec. 2012
Current Assets:
Monetary funds 920,204,606.38 759,361,575.52
Settlement reserves
Intra-group lendings
Transactional financial assets 6,985,964.05 0.00
Notes receivable 5,277,843.70 3,356,956.00
Accounts receivable 246,560,301.06 302,133,025.05
Accounts paid in advance 5,028,681.71 3,348,515.58
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract reserves
Interest receivable 5,147,035.46 5,231,397.36
Dividend receivable 0.00 0.00
Other accounts receivable 27,283,582.43 41,516,107.15
Financial assets purchased under agreements to resell
Inventories 213,007,337.73 242,578,891.54
Non-current assets due within 1 year 228,918.82 2,434,759.94
Other current assets 70,000,000.00 0.00
Total current assets 1,499,724,271.34 1,359,961,228.14
Non-current assets:
Loans by mandate and advances granted
Available-for-sale financial assets 0.00 0.00
Held-to-maturity investments 0.00 0.00
Long-term accounts receivable 520,853.94 3,370,946.33
Long-term equity investment 40,000.00 40,000.00
Investing property 55,701,135.53 39,319,457.87
Fixed assets 197,257,810.73 219,374,057.54
Construction in progress 8,025,550.89 7,094,433.42
Engineering materials 0.00 0.00
Disposal of fixed assets 0.00 0.00
Production biological assets
Oil-gas assets
Intangible assets 17,026,655.19 25,461,786.16
R&D expense 0.00 0.00
Goodwill 0.00 0.00
Long-term deferred expenses 5,437,421.98 6,152,543.07
Deferred income tax assets 18,997,382.51 19,073,385.65
Other non-current assets
Total of non-current assets 303,006,810.77 319,886,610.04
Total assets 1,802,731,082.11 1,679,847,838.18
38
Current liabilities:
Short-term borrowings 208,305,912.00 31,427,500.00
Borrowings from Central Bank
Customer bank deposits and due to banks and other
financial institutions
Intra-group borrowings
Transactional financial liabilities 0.00 363,255.25
Notes payable 54,311,862.79 70,851,519.07
Accounts payable 425,401,429.10 647,831,038.73
Accounts received in advance 26,519,346.16 12,488,450.33
Financial assets sold for repurchase
Handling charges and commissions payable
Employee’s compensation payable 33,467,690.70 40,116,618.69
Tax payable -24,924,004.06 -23,837,739.85
Interest payable 0.00 6,324.78
Dividend payable 0.00 0.00
Other accounts payable 232,202,527.95 53,435,685.41
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of securities
Payables for acting underwriting of securities
Non-current liabilities due within 1 year 0.00 0.00
Other current liabilities 0.00 0.00
Total current liabilities 955,284,764.64 832,682,652.41
Non-current liabilities:
Long-term borrowings 0.00
Bonds payable 0.00
Long-term payables 0.00
Specific payables 0.00
Projected liabilities 16,410.21 11,401.92
Deferred income tax liabilities 1,129,348.13 44,686.69
Other non-current liabilities 222,600.00 222,600.00
Total non-current liabilities 1,368,358.34 278,688.61
Total liabilities 956,653,122.98 832,961,341.02
Owners’ equity (or shareholders’ equity)
share capital 185,391,680.00 185,391,680.00
Capital reserves 278,454,447.07 278,454,447.07
Less: Treasury stock
Specific reserves
Surplus reserves 6,120,201.82 6,120,201.82
Provisions for general risks
Retained profits 15,465,379.75 20,797,991.70
Foreign exchange difference -79,217.19 -2,715,037.68
Total equity attributable to owners of the Company 485,352,491.45 488,049,282.91
Minority interests 360,725,467.68 358,837,214.25
Total owners’ (or shareholders’) equity 846,077,959.13 846,886,497.16
Total liabilities and owners’ (or shareholders’) equity 1,802,731,082.11 1,679,847,838.18
Legal representative: Jian Derong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
39
2. Balance sheet of the Company
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item 30 Jun. 2013 31 Dec. 2012
Current Assets:
Monetary funds 7,942,734.91 17,652,594.45
Transactional financial assets 0.00
Notes receivable 1,971,540.00 1,257,500.00
Accounts receivable 10,803,784.82 4,172,243.78
Accounts paid in advance 118,047.67 96,047.65
Interest receivable 0.00
Dividend receivable 0.00
Other accounts receivable 133,084.34 236,719.46
Inventories 4,890,300.10 7,392,344.32
Non-current assets due within 1
0.00
year
Other current assets 0.00
Total current assets 25,859,491.84 30,807,449.66
Non-current assets:
Available-for-sale financial assets 0.00
Held-to-maturity investments 0.00
Long-term accounts receivable 0.00
Long-term equity investment 990,854,030.83 990,854,030.83
Investing property 46,638,019.24 31,212,851.79
Fixed assets 1,570,494.92 11,211,651.90
Construction in progress 0.00 58,500.00
Engineering materials 0.00
Disposal of fixed assets 0.00
Production biological assets
Oil-gas assets
Intangible assets 4,725,916.79 13,758,144.40
R&D expense 0.00
Goodwill 0.00
Long-term deferred expenses 1,218,594.98 1,216,744.00
Deferred income tax assets 0.00
Other non-current assets 0.00
Total of non-current assets 1,045,007,056.76 1,048,311,922.92
Total assets 1,070,866,548.60 1,079,119,372.58
40
Current liabilities:
Short-term borrowings 0.00
Transactional financial liabilities 0.00
Notes payable 0.00
Accounts payable 36,945,352.43 17,907,562.95
Accounts received in advance 7,677,971.59 115,424.99
Employee’s compensation payable 315,631.62 522,592.57
Tax payable 2,569,289.97 1,124,273.49
Interest payable 0.00
Dividend payable 0.00
Other accounts payable 553,527,777.56 580,459,985.94
Non-current liabilities due within 1
0.00
year
Other current liabilities 0.00
Total current liabilities 601,036,023.17 600,129,839.94
Non-current liabilities:
Long-term borrowings
Bonds payable
Long-term payables
Specific payables
Projected liabilities
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 0.00 0.00
Total liabilities 601,036,023.17 600,129,839.94
Owners’ equity (or shareholders’
equity)
Paid-up capital (or share capital) 185,391,680.00 185,391,680.00
Capital reserves 271,485,181.40 271,485,181.40
Less: Treasury stock
Specific reserves
Surplus reserves 6,120,201.82 6,120,201.82
Provision for general risks
Retained profits 6,833,462.21 15,992,469.42
Foreign exchange difference
Total owners’ (or shareholders’) equity
469,830,525.43 478,989,532.64
Total liabilities and owners’ (or
1,070,866,548.60 1,079,119,372.58
shareholders’) equity
Legal representative: Jian Derong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
41
3. Consolidated income statement
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2013 Jan.-Jun. 2012
I. Total operating revenues 877,844,207.80 1,069,083,488.49
Including: Sales income 877,844,207.80 1,069,083,488.49
Interest income
Premium income
Handling charge and commission income
II. Total operating cost 880,134,519.38 1,094,002,210.59
Including: Cost of sales 762,662,771.63 957,074,222.04
Interest expenses
Handling charge and commission expenses
Surrenders
Net claims paid
Net amount withdrawn for the insurance contract
reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and associate charges 1,678,165.65 1,946,199.40
Selling and distribution expenses 34,293,872.54 50,929,006.43
Administrative expenses 74,849,826.36 91,512,870.63
Financial expenses 3,869,546.71 -11,851,591.82
Asset impairment loss 2,780,336.49 4,391,503.91
Add: Gain/(loss) from change in fair value (“-” means
7,349,219.30 -7,195,643.08
loss)
Gain/(loss) from investment (“-” means loss) 3,576,345.30 5,118,543.74
Including: share of profits in associates and joint
ventures
Foreign exchange gains (“-” means loss)
III. Business profit (“-” means loss) 8,635,253.02 -26,995,821.44
Add: non-operating income 4,709,673.01 2,711,575.32
Less: non-operating expense 826,435.12 1,450,451.43
Including: loss from non-current asset disposal 157,115.25 1,125.22
IV. Total profit (“-” means loss) 12,518,490.91 -25,734,697.55
Less: Income tax expense 1,139,442.82 158,701.37
V. Net profit (“-” means loss) 11,379,048.09 -25,893,398.92
Including: Net profit achieved by combined parties
-4,512,158.51
before the combinations
Attributable to owners of the Company 10,425,680.85 -19,378,850.76
Minority shareholders’ income 953,367.24 -6,514,548.16
VI. Earnings per share -- --
(I) Basic earnings per share 0.06 -0.10
(II) Diluted earnings per share 0.06 -0.10
Ⅶ. Other comprehensive incomes 2,635,820.49 1,349,983.16
Ⅷ. Total comprehensive incomes 14,014,868.58 -24,543,415.76
Attributable to owners of the Company 13,061,501.34 -18,028,867.60
Attributable to minority shareholders 953,367.24 -6,514,548.16
Legal representative: Jian Derong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
42
4. Income statement of the Company
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2013 Jan.-Jun. 2012
I. Total sales 35,446,112.19 5,678,593.69
Less: cost of sales 25,180,051.16 2,575,647.75
Business taxes and surcharges 449,925.76 332,042.36
Distribution expenses 2,296,965.36
Administrative expenses 1,867,215.18 2,473,013.13
Financial costs -228,194.02 -19,653.17
Impairment loss 109,836.18 -613.09
Add: gain/(loss) from change in fair
0.00
value (“-” means loss)
Gain/(loss) from investment (“-”
7,533.00 7,062.00
means loss)
Including: income form investment on
associates and joint ventures
II. Business profit (“-” means loss) 5,777,845.57 325,218.71
Add: non-business income 821,707.94 313,665.38
Less: non-business expense 267.92
Including: loss from non-current
asset disposal
III. Total profit (“-” means loss) 6,599,285.59 638,884.09
Less: income tax expense 0.00
IV. Net profit (“-” means loss) 6,599,285.59 638,884.09
V. Earnings per share -- --
(I) Basic earnings per share 0.04 0.00
(II) Diluted earnings per share 0.04 0.00
VI. Other comprehensive income
VII. Total comprehensive income 6,599,285.59 638,884.09
Legal representative: Jian Derong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
43
5. Consolidated cash flow statement
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2013 Jan.-Jun. 2012
I. Cash flows from operating activities:
Cash received from sale of commodities and rendering of service 915,918,056.59 1,208,827,945.74
Net increase of deposits from customers and dues from banks
Net increase of loans from the central bank
Net increase of funds borrowed from other financial institutions
Cash received from premium of original insurance contracts
Net cash received from reinsurance business
Net increase of deposits of policy holders and investment fund
Net increase of disposal of tradable financial assets
Cash received from interest, handling charges and commissions
Net increase of intra-group borrowings
Net increase of funds in repurchase business
Tax refunds received 117,641,803.60 150,547,648.48
Other cash received relating to operating activities 51,151,986.27 40,574,661.12
Subtotal of cash inflows from operating activities 1,084,711,846.46 1,399,950,255.34
Cash paid for goods and services 917,266,347.87 1,124,296,590.20
Net increase of customer lendings and advances
Net increase of funds deposited in the central bank and amount due from banks
Cash for paying claims of the original insurance contracts
Cash for paying interest, handling charges and commissions
Cash for paying policy dividends
Cash paid to and for employees 119,101,972.34 131,793,664.82
Various taxes paid 17,925,388.23 11,321,878.97
Other cash payment relating to operating activities 93,854,683.50 179,103,720.72
Subtotal of cash outflows from operating activities 1,148,148,391.94 1,446,515,854.71
Net cash flows from operating activities -63,436,545.48 -46,565,599.37
II. Cash flows from investing activities:
Cash received from withdrawal of investments
Cash received from return on investments 3,474,457.99 5,118,543.74
Net cash received from disposal of fixed assets, intangible assets and other long-term assets 5,558,991.86 5,533,100.10
Net cash received from disposal of subsidiaries or other business units 99,000.00
Other cash received relating to investing activities
Subtotal of cash inflows from investing activities 9,132,449.85 10,651,643.84
Cash paid to acquire fixed assets, intangible assets and other long-term assets 26,686,742.94 23,317,489.62
Cash paid for investment
Net increase of pledged loans
Net cash received from subsidiaries and other business units
Other cash payments relating to investing activities 70,000,000.00
Subtotal of cash outflows from investing activities 96,686,742.94 23,317,489.62
Net cash flows from investing activities -87,554,293.09 -12,665,845.78
III. Cash Flows from Financing Activities:
Cash received from capital contributions
Including: Cash received from minority shareholder investments by subsidiaries
Cash received from borrowings 309,898,896.00 368,641,168.03
Cash received from issuance of bonds
Other cash received relating to financing activities 158,789,800.00 244,582,470.90
Subtotal of cash inflows from financing activities 468,688,696.00 613,223,638.93
Repayment of borrowings 130,435,800.00 63,355,000.00
Cash paid for interest expenses and distribution of dividends or profit 16,190,572.61 1,012,364.65
44
Item Jan.-Jun. 2013 Jan.-Jun. 2012
Including: dividends or profit paid by subsidiaries to minority shareholders
Other cash payments relating to financing activities 165,373,620.00
Sub-total of cash outflows from financing activities 146,626,372.61 229,740,984.65
Net cash flows from financing activities 322,062,323.39 383,482,654.28
IV. Effect of foreign exchange rate changes on cash and cash equivalents -10,228,453.96 507,652.63
V. Net increase in cash and cash equivalents 160,843,030.86 324,758,861.76
Add: Opening balance of cash and cash equivalents 759,361,575.52 706,132,122.10
VI. Closing balance of cash and cash equivalents 920,204,606.38 1,030,890,983.86
Legal representative: Jian Derong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
45
6. Cash flow statement of the Company
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2013 Jan.-Jun. 2012
I. Cash flows from operating activities:
Cash received from sale of commodities and rendering of service 27,480,016.97
Tax refunds received 1,109,625.87
Other cash received relating to operating activities 24,807,414.50 24,034,081.26
Subtotal of cash inflows from operating activities 53,397,057.34 24,034,081.26
Cash paid for goods and services 4,837,151.98
Cash paid to and for employees 16,398,159.12 16,363,888.64
Various taxes paid 1,435,032.29 1,024,193.98
Other cash payment relating to operating activities 25,464,123.22 7,245,458.61
Subtotal of cash outflows from operating activities 48,134,466.61 24,633,541.23
Net cash flows from operating activities 5,262,590.73 -599,459.97
II. Cash flows from investing activities:
Cash received from retraction of investments
Cash received from return on investments 7,533.00 7,062.00
Net cash received from disposal of fixed assets, intangible assets and other
797,450.00 180,000.00
long-term assets
Net cash received from disposal of subsidiaries or other business units
Other cash received relating to investing activities
Subtotal of cash inflows from investing activities 804,983.00 187,062.00
Cash paid to acquire fixed assets, intangible assets and other long-term assets 43,000.00 99,400.00
Cash paid for investment
Net cash paid to acquire subsidiaries and other business units
Other cash payments relating to investing activities
Subtotal of cash outflows from investing activities 43,000.00 99,400.00
Net cash flows from investing activities 761,983.00 87,662.00
III. Cash Flows from Financing Activities:
Cash received from capital contributions
Cash received from borrowings
Cash received from issuance of bonds
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities 0.00 0.00
Repayment of borrowings
Cash paid for interest expenses and distribution of dividends or profit 15,703,640.96
Other cash payments relating to financing activities 0.00 0.00
Sub-total of cash outflows from financing activities 15,703,640.96 0.00
Net cash flows from financing activities -15,703,640.96 0.00
IV. Effect of foreign exchange rate changes on cash and cash equivalents -30,792.31 19,018.90
V. Net increase in cash and cash equivalents -9,709,859.54 -492,779.07
Add: Opening balance of cash and cash equivalents 17,652,594.45 13,757,429.84
VI. Closing balance of cash and cash equivalents 7,942,734.91 13,264,650.77
Legal representative: Jian Derong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
46
7. Consolidated statement of changes in owners’ equity
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Reporting period
Item Equity attributable to owners of the Company
Minority interests Total owners’
Paid-up capital (or Capital reserve Less: treasury Specific Surplus reserve General risk Retained profit Others equity
share capital) stock reserve reserve
I. Balance at the end of the previous year 185,391,680.00 278,454,447.07 6,120,201.82 20,797,991.70 -2,715,037.68 358,837,214.25 846,886,497.16
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 185,391,680.00 278,454,447.07 6,120,201.82 20,797,991.70 -2,715,037.68 358,837,214.25 846,886,497.16
III. Increase/ decrease of amount in the year (“-” means -5,332,611.95 2,635,820.49 1,888,253.43 -808,538.03
decrease)
(I) Net profit 10,425,680.85 953,367.24 11,379,048.09
(II) Other comprehensive incomes 2,635,820.49 2,635,820.49
Subtotal of (I) and (II) 10,425,680.85 2,635,820.49 953,367.24 14,014,868.58
(III) Capital paid in and reduced by owners
1. Capital paid in by owners
2. Amounts of share-based payments recognized in owners’
equity
3. Others
(IV) Profit distribution -15,758,292.80 -15,758,292.80
1. Appropriations to surplus reserves
2. Appropriations to general risk provisions
3. Appropriations to owners (or shareholders) -15,758,292.80 -15,758,292.80
4. Other
(V) Internal carry-forward of owners’ equity
1. New increase of capital (or share capital) from capital public
reserves
2. New increase of capital (or share capital) from surplus
reserves
3. Surplus reserves for making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the period
2. Used in the period
(Ⅶ) Other 934,886.19 934,886.19
IV. Closing balance 185,391,680.00 278,454,447.07 0.00 0.00 6,120,201.82 0.00 15,465,379.75 -79,217.19 360,725,467.68 846,077,959.13
47
Unit: RMB Yuan
Last year
Item Equity attributable to owners of the Company
Minority interests Total owners’
Paid-up capital (or Capital reserve Less: treasury Specific Surplus reserve General risk Retained profit Others equity
share capital) stock reserve reserve
I. Balance at the end of the previous year 1,112,350,077.00 125,034,307.09 -773,499,943.43 -1,335,814.80 357,545,063.91 820,093,689.77
Add: retrospective adjustments due to business
combinations under the same control
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 1,112,350,077.00 125,034,307.09 -773,499,943.43 -1,335,814.80 357,545,063.91 820,093,689.77
III. Increase/ decrease of amount in the year (“-” means -926,958,397.00 153,420,139.98 6,120,201.82 794,297,935.13 -1,379,222.88 1,292,150.34 26,792,807.39
decrease)
(I) Net profit 21,459,739.95 7,105,471.37 28,565,211.32
(II) Other comprehensive incomes -1,379,222.88 -1,379,222.88
Subtotal of (I) and (II) 21,459,739.95 -1,379,222.88 7,105,471.37 27,185,988.44
(III) Capital paid in and reduced by owners 0.00 0.00
1. Capital paid in by owners 0.00
2. Amounts of share-based payments recognized in owners’
equity
3. Others
(IV) Profit distribution 1,776,941.05 -1,776,941.05 -6,715,021.80 -6,715,021.80
1. Appropriations to surplus reserves 1,776,941.05 -1,776,941.05
2. Appropriations to general risk provisions
3. Appropriations to owners (or shareholders) -6,715,021.80 -6,715,021.80
4. Other
(V) Internal carry-forward of owners’ equity -926,958,397.00 148,000,000.00 4,343,260.77 774,615,136.23
1. New increase of capital (or share capital) from capital public
reserves
2. New increase of capital (or share capital) from surplus
reserves
3. Surplus reserves for making up losses -774,615,136.23 774,615,136.23
4. Other -926,958,397.00 148,000,000.00 778,958,397.00
(Ⅵ) Specific reserve
1. Withdrawn for the period
2. Used in the period
(Ⅶ) Other 5,420,139.98 901,700.77 6,321,840.75
IV. Closing balance 185,391,680.00 278,454,447.07 6,120,201.82 20,797,991.70 -2,715,037.68 358,837,214.25 846,886,497.16
Legal representative: Jian Derong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
48
8. Statement of changes in owners’ equity of the Company
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Reporting period
Item Paid-up capital (or Less: treasury General risk
Capital reserve Specific reserve Surplus reserve Retained profit Total owners’ equity
share capital) stock reserve
I. Balance at the end of the previous year 185,391,680.00 271,485,181.40 6,120,201.82 15,992,469.42 478,989,532.64
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 185,391,680.00 271,485,181.40 6,120,201.82 15,992,469.42 478,989,532.64
III. Increase/ decrease of amount in the year (“-” means
-9,159,007.21 -9,159,007.21
decrease)
(I) Net profit 6,599,285.59 6,599,285.59
(II) Other comprehensive incomes
Subtotal of (I) and (II) 6,599,285.59 6,599,285.59
(III) Capital paid in and reduced by owners
1. Capital paid in by owners
2. Amounts of share-based payments recognized in
owners’ equity
3. Others
(IV) Profit distribution -15,758,292.80 -15,758,292.80
1. Appropriations to surplus reserves
2. Appropriations to general risk provisions
3. Appropriations to owners (or shareholders) -15,758,292.80 -15,758,292.80
4. Other
(V) Internal carry-forward of owners’ equity
1. New increase of capital (or share capital) from
capital public reserves
2. New increase of capital (or share capital) from
surplus reserves
3. Surplus reserves for making up losses
4. Other
(Ⅵ) Specific reserve
1. Withdrawn for the period
2. Used in the period
(Ⅶ) Other
IV. Closing balance 185,391,680.00 271,485,181.40 6,120,201.82 6,833,462.21 469,830,525.43
49
Unit: RMB Yuan
Last year
Item Paid-up capital (or
share capital) Capital reserve Less: treasury stock Specific reserve Surplus reserve General risk reserve Retained profit Total owners’ equity
I. Balance at the end of the previous year 1,112,350,077.00 123,485,181.40 -774,615,136.23 461,220,122.17
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 1,112,350,077.00 123,485,181.40 -774,615,136.23 461,220,122.17
III. Increase/ decrease of amount in the year (“-” means -926,958,397.00 148,000,000.00 6,120,201.82 790,607,605.65 17,769,410.47
decrease)
(I) Net profit 17,769,410.47 17,769,410.47
(II) Other comprehensive incomes
Subtotal of (I) and (II) 17,769,410.47 17,769,410.47
(III) Capital paid in and reduced by owners
1. Capital paid in by owners
2. Amounts of share-based payments recognized in
owners’ equity
3. Others
(IV) Profit distribution 1,776,941.05 -1,776,941.05
1. Appropriations to surplus reserves 1,776,941.05 -1,776,941.05
2. Appropriations to general risk provisions
3. Appropriations to owners (or shareholders)
4. Other
(V) Internal carry-forward of owners’ equity -926,958,397.00 148,000,000.00 4,343,260.77 774,615,136.23
1. New increase of capital (or share capital) from capital
public reserves
2. New increase of capital (or share capital) from surplus
reserves
3. Surplus reserves for making up losses -774,615,136.23 774,615,136.23
4. Other -926,958,397.00 148,000,000.00 778,958,397.00
(Ⅵ) Specific reserve
1. Withdrawn for the period
2. Used in the period
(Ⅶ) Other
IV. Closing balance 185,391,680.00 271,485,181.40 6,120,201.82 15,992,469.42 478,989,532.64
Legal representative: Jian Derong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
50
TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Notes to Financial Statements
By 30 June 2013
（Except for specific explaination, the functional currency is CNY）
(I) Company Profile
1. History
Tsann Kuen (China) Enterprise Co., Ltd. (hereafter “the Company or TKC”) was established in the People’s
Republic of China (“the PRC”) in 1988 as a wholly owned foreign investment enterprise, the Company named in
Tsann Kuen China (Xiamen) Ltd. firstly, invested by the Fordchee (Hongkong) Co., Ltd., EUPA Industry
Corporation Limited and Hongkong Fillman investment Co.,Ltd.. On 16 February 1993, with the approval of the
Ministry of Foreign Trade and Economic Co-operation, the Company was reorganized into an incorporated
company and was renamed as Tsann Kuen (China) Enterprise Co., Ltd. In June 1993, the Company issued
40,000,000 new shares pursuant to an international placing and public offer and these new shares (“B shares”)
were then listed on the Shenzhen Stock Exchange on 30 June 1993. In according to the 5th special Board of
Director in 2012, “Bill about Implementation of Drawing back Share” authorized by third special General
Meeting in 2012,document XTCS[2012] NO.698 “Subscriptions about Reduction of Capital of TSANN KUEN
(CHINA) ENTERPRISE CO., LTD. Authorized by Xiamen Investment Promotion Bureau” authorized by
Commerce Dpartment, the Company used the general capital of 1,112,350,077 shares as base number
implementing the plan of share reduction at the ratio of 1:6 to all the registed share holders in 28 December 2013.
Upon the completion of share reduction, the general capital of the Company reduced from 1,112,350,077 shares to
185,391,680 shares. By 30 June 2013, the registered capital of the Company decreased to RMB 185,391,680.
Follow The Ministry of Commerce of the People’s Republic of China approved （The No. [2005]3107《Agreed in
principle to the Ministry of Commerce on Tsann Kuen (China) Enterprise Co., Ltd. shares traded sponsor of the
approval》）, On December 6, 2006, the Company received the [2006] No.266 file 《The notice of Tsann Kuen
(China) Enterprise Co., Ltd concerning the approval of non-listed foreign shares traded》from China Securities
Regulatory Commission. The China Securities Regulatory Commission agreed 700,476,830 unlisted shares
(account for 62.97% of the share capital) hold by the Company’s shareholders, EUPA Industry Corporation
Limited, Fordchee Development Limited and Fillman Investment Limited to transfer into B shares. In November
29, 2007 these B shares could be listed and exercised on Shenzhen Stock Exchange. Up to 30 June 2012, total B
shares hold by the three legal shareholders (EUPA Industry Corporation Limited, Fordchee Development Limited
and Fillman Investment Limited) are 505,175,060 shares.( account for 45.42% of the share capital).
Legal representative: Jian, Derong
Place of registration: No.88 Xinglong Road, Huli Industrial District, Xiamen, Fujian Province
The parent: Star Comgistic Capital Co. Ltd.
2. Industry
The Company operates within the electrical machinery and equipment manufacturing industry.
3. Scope of business
The approved business scope: the main business is to develop, manufacture and sell household appliances,
51
electronics, light industrial products, modern office supplies; design and manufature moulds relevant to the above
products, sell the products of the Company at home and abroad, and provide after-sell services; engage in
wholesale, retall, import and outport of household appliances, electronics, electromechanical devices, office
supplices, kitchenwares and prepackage food, and provide after-sell services. Those subsidiary’s main business is
to manufacture 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, manufacture and sell Precision (Punching) Die, Precision Mold Cavity,
and Model Standard Unit, as well as engaged in the research and development of those products.
4. Main products
The Company’s main products are: Household electrical appliance.
5. Explanation on changes of main business, significant changes of equities, significant acquisition and
reorganization occurred during the reporting period
During the reporting period, main business of the Company remained unchanged, and no significant acquisition or
reorganization occurred.
(II) Main accounting policies, accounting estimates and corrections of prior accounting errors
1. Basis for preparation of the financial statements
The financial statements are prepared on the basis of going concern, with reference to the actual occurrence of
transactions and events, and in accordance with the Enterprise Accounting Standards of China issued by Ministry
of Finance on 15 Feb. 2006, as well as based on those accounting policies and accounting estimates that described
in Note II.
2. Declaration of compliance with the Enterprise Accounting Standards of China
The financial statements of (the Group and) the Company have been prepared in accordance with the Enterprise
Accounting Standards of China and present truly, fairly and completely, in all material respects, the financial
position of (the Group and) the Company as at 30 June 2012, the performance, the cash flows and other relevant
information of (the Group and) the Company for the six months then ended.
3. Accounting year
The accounting year adopted by the Company is the calendar year (ie. from 1 January to 31 December).
4. Functional currency
The functional currency of the Company is the Renminbi (CNY).
5. Measurement method for the business combination under the same control and business combination not
52
under the same control
(1) Accountant arrangement methods for business combination under the same control
Identifiable assets acquired and liabilities assumed through business combination of an entity under common
control are measured at their carrying amounts in the acquiree’ account as at the combination date. The excess of
the consideration for combination over the net identifiable assets acquired as at the combination date is debited to
capital reserves, and to retained earnings where capital reserves are insufficient.
(2) Accountant arrangement methods for business combination not under the same control
Identifiable assets acquired and liabilities assumed through business combination of an entity not under common
control are measured at their fair values as at the combination date. Goodwill as of the combination date is
recognised and measured as the excess of the consideration for combination over the net identifiable assets
acquired as at the combination date. If the net identifiable assets acquired as at the combination date exceeds the
consideration for combination, the excess of the consideration for combination over the net identifiable assets
acquired as at the combination date, after the assessment of the fair value of the net identifiable assets acquired as
at the combination date, is recognised as a gain through profit or loss for the reporting period in which the
combination occurred.
6. Compilation of consolidated financial statements
(1) Determination of the consolidated scope
The consolidated financial statements are prepared in accordance with CAS 33 – Consolidated Financial
Statements issued on February 2006. The scope of consolidated financial statements, determined on the basis of
control existence. The consolidated financial statements consolidate separate financial statements of the parent
company and subsidiaries and entities for specific purposes directly or indirectly controlled by the parent company.
Control exists is when the parent company has power to govern the financial and operating policies of an entity
and is able to obtain economic benefits from the entity’s operation.
If it is objectively evidential that the parent company has no control over a subsidiary, the subsidiary is excluded
from consolidation.
(2) Acquisition and disposal the shares of subsidiaries
The transaction date of acquisition or disposal of share of subsidiary is the date on which the risks and economic
benefits associated with the transferred share is transferred to the transferee. The post-acquisition or pre-disposal
performance and cash flows of a subsidiary acquired or disposed through business combination not under
common control are adequately consolidated in the consolidated statement of comprehensive income and the
consolidated statement of cash flows. The performance and cash flows for the current reporting period of a
subsidiary acquired through business combination under common control during the current reporting period has
consolidated in the consolidated statement of comprehensive income and the consolidated statement of cash flows;
and, the comparables of the consolidated financial statements has adjusted accordingly.
If the Company acquires minority equity shares of subsidiaries, thus hold the long-term equity investment, on the
date of prepare consolidation statement, the difference between the value of the new long-term equity investment
and the value of subsidiary’s net assets enjoyed by proportion of shareholdings(begin with acquired date or
53
combination date), 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.
(3) Uniform accounting policies and accounting period
Where the accounting policies and accounting period of a subsidiary are different from those of the parent
company, the separate financial statements of the subsidiary are adjusted using the accounting policies and
accounting period adopted by the parent company before consolidation. The separate financial statements of a
subsidiary acquired through business combination not under common control are adjusted to reflect the fair values
of the identifiable assets, liabilities and contingent liabilities of the subsidiary as at the combination date before
consolidation.
(4) Consolidation method
During the preparation of the consolidated financial statements, intra-group balances and transactions are
eliminated.
The net identifiable assets of subsidiaries attributable to minority interest of subsidiaries are separately presented
in the consolidated financial statements.
7. Recognition standard for cash and cash equivalents
Cash and cash equivalents include cash in hand, demand deposits and short-term and highly liquid investments
and which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in
value.
8. Foreign currency businesses and translation of foreign currency financial statements
(1) Foreign currency business
Transactions denominated in foreign currencies (currencies other than the functional currency) are accounted for
in the functional currency using the transaction-date spot exchange rates (the middle rates quoted by the People’s
Bank of China; hereafter, the same applies).
Monetary assets held on a balance sheet date denominated in foreign currencies are translated into the functional
currency using the balance-sheet-date spot exchange rates; differences in value arising from differences between
the transaction-date spot exchange rates and the balance-sheet-date spot exchange rates are accounted for through
profit or loss for the reporting period ended on that balance sheet date. Non-monetary assets held and liabilities
outstanding on a balance sheet date measured using the historical cost convention is translated into the functional
currency using the transaction-date spot exchange rates. Non-monetary assets held and liabilities outstanding on a
balance sheet date measured at fair value are translated into the functional currency using the spot exchange rates
prevailing on the dates of fair value assessments; differences in value arising from differences between the
transaction-date spot exchange rates and the assessment-date spot exchange rates are accounted for through profit
or loss for the reporting period during which the assessments occurred.
(2) Translation of foreign currency financial statements
① Elements of assets and liabilities of financial statements denominated in foreign currencies are translated into
the functional currency using the balance-sheet-date spot exchange rates; elements of owner’s equity of financial
statements denominated in foreign currencies, except undistributed profit, are translated into the functional
54
currencies using the transaction-dates spot exchange rates.
② Elements of income and expenses of financial statements denominated in foreign currencies are translated into
the functional currency using the transaction-date spot exchange rates.
Foreign exchange differences arising from treatments described in the above paragraph are separately presented in
the financial statements as an element of owners’ equity.
③ Cash flows denominated in foreign currencies are translated into the functional currency using the
transaction-date spot exchange rates. The impact of changes in exchange rates on cash flows is separately
presented in the statement of cash flows.
9 Financial instruments
(1) Classification of financial assets and financial liabilities
Financial assets, according to their purposes of investment and economic substance, are classified into fair value
through profit or loss, held-to-maturity investments, loans and receivables, and available-for-sale financial assets
four categories.
Financial liabilities, according to their economic substance, are classified 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:
a. Acquired or incurred principally for the purpose of selling or repurchasing it in the near term; or
b. 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
c. 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 fair value through profit or loss if it is:
a. 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; or
b. 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 national bonds,
floating-rate corporate bonds.
③ Receivables: are non-derivative financial assets with fixed or determinable payments that are not quoted in an
55
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.
④ Available-for-sale financial assets: are those non-derivative financial assets that are designated as available for
sale at initial recognized, or those financial assets are not measured in fair value based and through to profit and
loss, or loans and receivables, or held-to-maturity investments.
⑤ Other financial liabilities: financial liabilities not divided into measurement in fair value base and through into
profit and loss account.
(2) Measurements for financial assets and financial liabilities
The Company’s financial asset or financial liability is recognized at its fair value initially. For financial assets or
financial liabilities at fair value through profit or loss, relevant 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 cost.
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 changed difference 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,
the profit or loss of termination confirmation, impairment or amortization included in the profit and loss account.
③ Loans and receivables, which shall be measured at amortized cost using the effective interest method, the profit
or loss from termination confirmation, impairment or amortization 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 carrying value of the
financial assets included into investment profit or loss account; at the same time, turn out the original cumulative
amount of fair value change of corresponding part within the equity, included into investment profit or loss
account. 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 hold period are recognized as
investment income.
⑤ Other financial liabilities, together with the equity instrument that price not be quoted in active market and the
fair value could not measure reasonably measured, as well as the subsequent measurement should according to the
cost of derivative financial liabilities.
A financial guarantee contracts not classified into financial liabilities designated at fair value with changes in fair
value accounted through profit for loss for the relevant reporting period or a deep-discounted loan not classified
into financial liabilities designated at fair value with changes in fair value accounted through profit for loss for the
relevant reporting period is subsequently measured at the higher of the amount determined by CAS 13 –
Contingencies and the residual amount after deducting the cumulative amortization determined by CAS 14 –
Revenue from the amount upon the initial recognition.
Other financial liabilities adopt the effective interest method, subsequent measured by amortization cost,
56
recognized the profits and losses by termination confirmation or amortization to current 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 or 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.
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 recognized amount and the
maturity date amount, and minus any reduction 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 flows 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.
(3) Transfer and derecognition of financial asset
① Derecognize financial asset if, and only if, meets one of the following three conditions:
a. terminate the contractual rights of cash flows from the financial asset;
b. the financial assets have been transferred, and the ownership of the risks and rewards of financial assets
transferred to other party;
c. the financial assets have been transferred, but the Company neither transferred the ownership of the risks
and rewards of financial assets, nor retained , and gives up control of the financial assets.
② When termination conditions of entire transferred assets has been satisfied, the differences between the
amounts of following items shall be recognised in the current period profits and losses account:
a. The carrying value of transferred financial assets;
b. The consideration received from the transfer, and the accumulative amount of the changes of the fair value
originally recorded in the shareholders’ equities.
③ If the transfer of partial financial assets satisfies the conditions of derecognize, the entire book value of the
transferred financial asset shall apportion, 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 .
a. The portion of carrying value derecognized;
b. The consideration received from the transfer, and the accumulative amount of the changes of the fair value
57
originally recorded in the shareholders’ equities.
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. For those financial assets transfer adopt continuing involvement method, the Company should
recognize one financial asset and one financial liability, according to the extent of the transferred financial assets
of continuing involvement.
(4) Methods for testing and withdrawing of financial assets impairment
① If the Company have the following evidence to prove the impairment of financial assets, should recognize the
provision of impairment:
a. significant financial difficulty of the issuer or obligor;
b. a breach of contract, such as a default or delinquency in interest or principal payments;
c. the lender, for economic or legal reasons relating to the borrower＇s financial difficulty, granting to the
borrower a concession that the lender would not otherwise consider;
d. it becoming probable that the borrower will enter bankruptcy or other financial inorganization;
e. the disappearance of an active market for that financial asset because of financial difficulties;
f. observable data indicating that there is a measurable decrease in the estimated future cash flows from a group
of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with
the individual financial assets in the group;
g. any seriously disadvantageous change has occurred to technical, market, economic or legal environment, etc.
wherein the debtor operates its business, which makes the investor of an equity instrument unable to take back its
investment;
h. the fair value of financial instrument investment incur serious or non-temporary decline;
i. other objective evidence that prove impairment of financial assets.
② On balance sheet date, the Company should adopt different impairment test method for different category of
financial assets, and recognize provision of impairment:
a. Held-to-maturity investments：on the balance sheet date, if there are objective evidence of impairment for the
investment, the Company has recognized the impairment loss by the asset’s carrying amount and the present
value of estimated future cash flows.
b. Available-for-sale financial assets：on the balance sheet date, the Company analyses the impairment evidences
of the financial assets, experienced judgment whether continuing decline in the fair value. Generally, if the fair
value of financial assets incurred serious decline, after consideration of all relevant factors, anticipate this is
non-temporary, therefore can identified the available-for-sale financial assets has impaired, should recognize the
impairment loss. When a decline in the fair value of an available-for-sale financial asset has been recognised
directly in equity and there is objective evidence that the asset is impaired, the cumulative loss that had been
recognised directly in equity shall be removed from equity and recognised in impairment loss account of income
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statement.
10. Accounts receivable
(1) Bad debt provision for individually significant accounts receivable
Judgment basis or monetary standards of provision for bad debts of the individually significant accounts receivable: On the balance
sheet date, those individual accounts receivable and individual other receivable account for more than 10% (include 10%) of total
balance of the accounts receivable is considered as individual significant amounts.
Method of individual provision for bad debts of the individually significant accounts receivable: A receivable of individual
significance is individually assessed for impairment on the balance sheet date. If it is objectively evidential that a receivable of
individual significance has impaired, the impairment loss shall be recognized based on the difference of the book values higher than
the present value of future cash flows, and relevant provision for bad debts impairment shall be withdrawn.
Individually testing un-happened decrease in individually significant accounts receivable, the Company use portfolio of
credit risk to withdrawing bad debt provision, as following:
(2) Accounts receivable for which bad debt provisions are made on the group basis
Recognition basis of Withdrawal method of bad debt
Name of group
group provision on the group basis
Aging group Aging status
Aging analysis method
Related-party group Related-party relationship
Other method
In the groups, adopting aging analysis method to withdraw bad debt provision:
Withdrawal proportion Withdrawal proportion for
Age
for accounts receivable (%) accounts receivable (%)
1-90 days 0.00 0.00
91-180 days 10.00 10.00
181-270 days 30.00 30.00
271-365 days 50.00 50.00
Over 365 days 100.00 100.00
In the groups, other methods to withdraw bad debt provision:
Name of group Note of method
Not bad debt provision withdrawing of acc
Related-party group ount receivable between the Company and the
related-party group
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made
individually
If any objective evidence shows that the accounts
receivable is with insignificant individual amount,
Reason of individually withdrawing
but its credit risks are different from that of other
bad debt provision
accounts receivable, which shall be individually
conducted the impairment test.
The accounts receivable should be individually
conducted the impairment test basing on the
Withdrawal method for bad debt
difference of the book values higher than the present
provision value of future cash flows, then withdrawn relevant
provision for bad debts.
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The Company conducted impairment tests of cash deposit and guarantee deposit respectively. If there is not
objective proof to indicate impairment, the bad debt provision would be waived.
(4) The Company collects its long-term account receivables according to the collection day stipulated in the
contract and calculates account age from the collection day, determines the ratio of bad debt withdrawing of the
following long-term accounts receivables in compliance to the status quota:
Ratio of long-term
Account-age
account-receivables withdrawing%
Undue collection period 0.00
1-60 days 10.00
61-120 days 30.00
121-180 days 50.00
Over 81 days 100.00
(5) As for other accounts receivables including receivable receipt, prepayment, interest receivable, etc., the
Company withdraws bad debt provision according to the margin between the future cash flow and book value.
11. Inventory
(1) Classification
Inventories include finished goods and merchandises held for sale, work-in-progress and materials and supplies to
be consumed in the course of production of goods or rendering of services. Inventories are classified into
materials in transit, raw materials, work-in-progress, finished goods, materials and goods of consignment and
revolving materials etc.
(2) Pricing method for outgoing inventories
Inventories are measured using the weighted average method upon issuance.
(3) Recognition basis of net realizable value and withdrawal method of depreciation reserves for inventories
① Estimates of net realizable value: Those stocks used for directly sale, 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 realizable value of the
excess is based on general selling prices.
② Withdrawal method of 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,
but 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.
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When the circumstances that previously caused inventories to be written off 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-off is reversed (i.e. the reversal is limited to the amount of the original write-off) 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.
(4) Inventory system for inventories:
The inventory system for inventories is perpetual inventory system.
(5) Amortization method of the low-value consumption goods and packing articles
Low-value consumption goods: one-off amortization method
12. Long-term equity investment
Long-term equity investment includes rights and interests investment that the Company can implement control,
joint control or exert influence on invested companies, or long-term investment without accurate measurement
and fair value that the company can’t implement control, joint control or exert influence on invested companies.
(1) Recognition of investment cost
The Company separates the following two cases of long-term equity investment for measurement:
① Long-term equity investment obtained through business combinations:
a. 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 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 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 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 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 into the current profit and
loss.
b. For obtaining subsidiary not under common control, the cost of long-term equity investment is fair value of
assets paid, liabilities undertaken by the Company, or the fair value of equity bonds issued. Where the cost of a
business combination exceeds the acquirer’s interest in the fair value of the bargainer’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 bargainer’s identifiable net assets, after reassessment, the difference shall be recognized in profit
or loss for the current period (non-operating income). The audit fees、legal services fees、assessment and
consultation fees and other costs directly related to business combinations shall be recognised in the transaction
period profits and losses, while instruments issued as the consideration of business combinations, the issuing
expenses of bonds or equity instruments recognised as the initial costs of bonds or equity instruments included in
the cost of business combinations (except for issuing expenses of bonds and equity instruments).
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② Other long-term equity investment that obtained not through business combinations, accordance with the
following principles to determine the investment costs:
a. Long-term equity investment, which is acquired by cash consideration, the actual cash payment amount will be
deemed as the investment cost. The 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.
b. Long-term equity investment, which is acquired by issuing equity securities, the fair value of the issued equity
will be deemed as the investment cost.
c. For those long-term equity investments that invested by the investors, the values agreed in the investment
contracts or agreements will be deemed as the investment cost, except that the contracts or agreements provide
that the values are not fair.
d. Long-term equity investment is acquired by exchange of non-monetary assets, if the 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 investment cost; the difference between the fair values of the assets and book
values will be recognised into the current profit and loss; if the 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 investment
cost.
e. Long-term equity investment, which is acquired by the debt restructuring the fair values of the obtained equities
will be deemed as the investment cost; the difference between the investment cost and book values of credit will
be recognised into the current profit and loss.
(2) Subsequent measurement of long-term equity instruments and recognition of gains or losses
The historical cost convention 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 adopts historical cost convention 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.
The Company adopts equity method for the following conditions: a long-term equity investment where the
investing enterprise have joint control or significant influence over the investee.
a. When a long-term equity investment is subsequently measured using the historical cost convention, increase or
recovery of investment need to adjust the cost of long term equity investment. Cash dividends or profit
distributions declared by the investee shall be recognized as investment income in the current period. However,
investment income recognized by the investing enterprise shall be limited to the amount distributed to it out of
accumulated net profits of the investee arising after the investment was made. Any cash dividends or distributions
received in excess of this amount shall be treated as a recovery of investment cost.
b. When a long-term equity investment is subsequently measured using the 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.
Investment income for the reporting period is recognised as the investor’s share of the net profit or loss of the
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investee for that reporting period. In computing the investor’s share of the net profit or loss of the investee, the net
profit or loss of the investee in the investee’s account is adjusted for non-uniform accounting policies, the
increased or decreased depreciation and amortization resulting from the acquisition fair value adjustments on
fixed assets and intangible assets of the investee, the acquisition fair value adjustments on impairment allowance
for assets and the elimination of intra-group transaction except losses arising from intra-group transactions which
are impairment loss on assets in accordance with CAS 8 – Impairment of assets.
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, recover investment interests, and in the book value of the long-term equity investment successively.
Those long term equity for affiliated company and joint company, hold before first executive date, if there is
relevant investment debit difference, according to residual time to amortize in straight line method, the
amortization amount recognized in current profit and loss account.
(3) Recognition basis of joint control and significant influences
The existence of jointly control by an investor is usually evidenced in one or more of the following ways: ①any
venturer cannot control the jointly controlled company’s operation alone; ②the strategy decision of the jointly
controlled company, should be agreed by each venture parties; ③the venturers may appoint one of them to
manage the jointly controlled company, through control or agreement, but the management must follow all
venturers’ financial and operation strategies. When the jointly controlled company during legal reconstruction or
bankrupt, or the transfer funds to investors strictly restricted in long time, the venturers cannot exercise joint
control to the investee. However, if the joint control is really exist can be certified, the venturers still adopt equity
method of long term equity investment principle to account.
The existence of significant influence by an investor is usually evidenced in one or more of the following ways:
①representation on the board of directors or equivalent governing body of the investee; ②participation in
policy-making processes, including participation in decisions about dividends or other distributions; ③material
transactions between the investor and the investee; ④dispatch of managerial personnel; or ⑤provision of
essential technical information.
(4) Testing method of impairment and withdrawal method of provision for impairment
Each long-term equity investment is individually assessed for impairment on the balance sheet date. The
assessment takes into account factors such as the investee’s operating strategies, the legal environment in which
the investee operates, the demand of the market in which the investee operates and the investee’s profit-making
ability to determine whether a long-term equity investment is subject to impairment. If the carrying amount of a
long-term equity investment exceeds its net recoverable amount as at the balance sheet date, the excess is
recognised as impairment loss of assets for the reporting period during which the impairment occurred; and an
impairment allowance for that long-term equity investment of equal amount is also recognised. The recognised
impairment loss for long-term equity investment is irreversible.
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13. Investment property
Investment property is held to earn rentals or for capital appreciation or for both. Investment property includes
leased or ready to transfer after capital appreciation land use rights and leased buildings.
(1) Depreciation or amortization method of property investment is measured by cost model:
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 estimated useful life, net
residual rate and annual depreciation rate of investment property set out below:
Estimated residual Annual depreciation
Categories Estimated useful life
rate % (amortization) rate %
Houses and buildings 10.00 20 years 4.50
Straight-line method during the
Land use rights 0.00
useful life
(2) Basis of impairment of property investment is measured by cost model
On 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 property investment shall
be made. If the value of the impaired investment property recovered, the provided impairment loss in prior period
cannot be carry back.
14. Fixed assets
(1)Recognized standard of fixed assets
Fixed assets are tangible assets, held for use in production or supply of goods or services, for rental to others, or
for administrative purpose, and have high unit price, as well as useful lives more than one accounting year. Fixed
assets shall be recognized by actual costs incurred, if they meet the following conditions:
① The economic benefits related to fixed asset probably flows to the enterprise;
② 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 recognized as expense in profit and loss account of that period.
(2) Depreciation methods of fixed assets
Straight-line method is in used to calculate the depreciation of fixed assets.
Expected net salvage value
Category of fixed assets Useful life (Y) Annual deprecation (%)
(%)
Housing and building 10.00 20 years 4.50
Machinery equipments 0.00 11-18 years 5.56-9.09
Electronic equipments and other 0.00 6 years 16.67
Transportation vehicle 0.00 6 years 16.67
Expenditures for improvement of The shorter one of beneficiary
0.00
rented fixed assets period and lease period
(3) Testing method of impairment and withdrawal method of provision for impairment on fixed assets
On the balance sheet date, the Company assess all types of fixed assets whether there is any indication that an
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asset may be impaired, if any such indication exists, the entity shall estimate the recoverable amount of the asset,
reducing the carrying value to the estimated recoverable amount, the difference recognized into the current profit
and loss account, simultaneous recognize the provision for impairment. Once the impairment loss has been
recognized, never carry back in future accounting period. In assessing whether there is any indication that an asset
may be impaired, the Company shall consider, as a minimum, the following indications:
- during the period, an asset’s market value has declined significantly more than would be expected as a result of
the passage of time or normal use;
- significant changes with an adverse effect on the entity have taken place during the period, or will take place in
the near future, in the technological, market, economic or legal environment in which the entity operates or in the
market to which an asset is dedicated;
- market interest rates or other market rates of return on investments have increased during the period, and those
increases are likely to affect the discount rate used in calculating an asset’s value in use and decrease the asset’s
recoverable amount materially;
- evidence is available of obsolescence or physical damage of an asset;
- significant changes with an adverse effect on the entity have taken place during the period, These changes
include the asset becoming idle, plans to discontinue or restructure the operation to which an asset belongs, plans
to dispose of an asset before the previously expected date;
- evidence is available from internal reporting that indicates that the economic performance of an asset is, or will
be, worse than expected. For example: the net cash inflow or realized operating profits( or losses) made by the
assets has declined significantly more than would be expected.
- other indications that an asset may be impaired.
(4) Affirmation and valuation methods to fixed assets under financing lease
The Company substantially transfers all the risks relevant to assets when renting fixed asset and affirms finance
lease as the lease of the fixed assets when making remuneration. Cost of fixed assets by finance lease would be
affirmed by the lower one of the fair value of leasing assets from the leasing commencement date and the present
value of the minimum lease payment. Fixed assets by finance lease adopt corresponding depreciation policy with
self-owned fixed assets to withdraw depreciation of leasing assets. Assets which can be rationally determined
enable to acquire ownership of leasing assets by the end of the leasing period would be withdrawn depreciation by
the durable years of leasing assets; assets which can’t e rationally determined enable to acquire ownership of
leasing assets by the end of the leasing period would be withdrawn depreciation by the shorter one of the using
period of lease term and leasing assets.
15. Construction in progress
(1) Categories of construction in progress
The category of construction in progress is classified by the approved project.
(2) Standards and time of transferring construction in progress into fixed asset
Construction in progress is transferred to fixed assets when the project is substantially ready for its intended use.
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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) Impairment test method and withdrawal method for impairment provision of construction in progress
On the balance sheet date, the Company shall assess the overall construction in progress, if there is evidence
provide that the value of project are declined, the entity shall estimate the recoverable amount of the asset,
reducing the carrying value to the estimated recoverable amount, the difference recognized into the current profit
and loss account, simultaneous recognize the provision for impairment. Once the impairment loss has been
recognized, never carry back in future accounting period. Exercise impairment test for construction in progress, if
meet the one or more the following conditions:
① suspend the project in a long time, and according to the estimate, not restart the construction within the next
3years;
② evidence is available of obsolescence in either function or technical, and bring great uncertainty for the cash
inflows to the Company;
③ other indications that project may be impaired.
16. Borrowing costs
(1) Recognition principles for 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.
The capitalization of borrowing costs shall satisfy the following conditions:
① The capital expenditures have been incurred.
② The borrowing costs have been incurred.
③ Activities relating to acquisition, construction or production that are necessary to make the assets being
intended for use or sales have been launched.
Other borrowing costs、discount or premium and difference of foreign exchange, should be recognized in the
current profit and loss account.
When assets in line with capitalization confront abnormal interruption exceeding 3 months continuously,
capitalization of borrowing costs should be suspended.
When assets that construction and manufacture meet the standards of capitalization reach expected workable or
merchantable state, capitalization of borrowing costs should be suspended; borrowing costs encountering later
would be determined by the encountering period.
(2) Calculation method of capitalized amount of borrowing costs
For a specific purpose borrowing, the amount of interest to be capitalized shall be the actual interest expenses
incurred for the period less deposit interests of the borrowing founds or investment income from the temporary
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investment.
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.
17. Intangible assets
(1) Pricing method of intangible assets
Intangible assets are recognized initially at cost.
(2) Useful life and amortization of intangible assets
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 life assets. Otherwise,
the asset would be recognized as infinite useful life assets.
① To estimate the life of finite useful years asset would consider factor of: a. The life cycle of the product
produced by the assets, and the information of similar asset; b. The development of craftwork and technology, and
the estimate of future development trend; c. The demand condition in market of the product produced by the asset;
d. The estimated action would be taken by competitor or potential competitor; e. The expense expected to
maintain the assets to bring future economic benefits and the ability of the Company to pay for it; f. The relevant
law restriction on control period of the asset or other similar restriction such as franchise, lease period; g. Relation
with other assets’ useful life, that hold by the Company.
② 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.
(3) Impairment test method and withdrawal method of impairment provision of life-uncertained tangible assets
Intangible asset with infinite useful years would not amortize, but would conduct impairment test every year. the
useful life of such an asset should be reviewed each reporting period to determine whether events and
circumstances continue to support an indefinite useful life assessment for that asset., if still under uncertainty
situation after the revaluation, shall conduct impairment test. When the net recoverable amount lower than the
carrying value, reducing the carrying value to the estimated recoverable amount, the difference recognized into the
current profit and loss account, simultaneous recognize the impairment allowance. The recognised impairment
allowance is irreversible in subsequent reporting periods.
Exercise impairment test for intangible assets, if meet the one or more the following conditions:
① Significant changes with an adverse effect on the profitability of intangible assets have taken place during
the period, These changes include the intangible replaced by other new technique;
② The market value has declined in current period, and may not rise in the future residual period;
③ Other indication to prove that the carrying value higher than the recoverable value.
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(4) Criteria of separating the research phase and development phase of internal R&D project
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: ① it is technical feasible
for use or sales upon the completion of the intangible assets; ② it is intended for use or sales upon the completion
of the intangible assets; ③ the manner to provide that expect future economic benefits that are attributable to 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; ④ 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; ⑤ the cost of intangible asset can
be measured reliably.
18. Long-term deferred expenditure
An item long-term deferred expenses is an expense which has been incurred and which has a beneficial period (a
period during which an expense is expected to bring economic benefits to an entity) which is longer than one year
and which includes at least part of the reporting period during which the expense was incurred and subsequent
reporting periods. An item of long-term deferred expenses is recognised at the actual amount of the expense
incurred and allocated in each month of the beneficial period using the straight line method.
19. Assets transfer with repurchasing conditions
The sales and buy back is one of sales mode of the Company, that is means when sale the product, simultaneously
agreed to buy back the same or similar product in the future. Under this sales mode, the Company accords to the
clause of contract or agreement to decide whether the revenue recognition criteria are satisfied. If the Company
has not transferred to the buyer the significant risks and rewards of ownership of the goods, the Company should
not recognize the revenue; if the buy back price higher than the original sales price, during the buy back period,
the Company shall recognize the interest expenses to income statement (financial expenses).
20. Estimated liabilities
(1) Recognition criteria of estimated liabilities
Obligation with contingency factor such as external hypothecate, lawsuit or arbitrage in dispute, guarantee on
quality of product, cut-down plan, loss of contract, recombine obligation, obligation on abandon fixed asset, and
meet the follow condition simultaneously would determined as liabilities:
①This obligation is current obligation of the Company; and,
②The performance of this obligation will probably cause economic benefits outflow of the Company; and,
③The 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 estimated liabilities
Accrued liabilities would be measured initial according to the optimum evaluation of outflow of economic benefit,
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and 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) Determination method for the optimum evaluation
If needed expenditure lies in a range of amounts, it means that the optimum evaluation would be the average
amount of the maximum amount and the minimum amount in the range; if expenditure doesn’t lie in a range of
amount, the best optimum would be determined as following:
①as for item relating to a single project, the optimum evaluation would be determined by the most possible
accrual;
②as for item relation to several projects, the optimum evaluation would be determined by various kinds of
possible accruals and probability of occurrence. Third-party or other-parties need to pay all or part of expected
remunerations which is affirmative for debt by liquidity and the remuneration would be confirmed independently.
Affirmative amount of remuneration should not exceed book value of affirmative debt.
21. Share-based payment and equity instruments
(1) Categories of share-based payment
The types of shares-based payment of the Company are: cash-settle and equity-settle.
① Cash-settled share-based payment
The measurement of cash-settle is according with the fair value of liability undertake by the Company, which is
calculated base on the Company’s share or other equity instrument.
The value of cash-settle share-based payment that could exercise immediately after award would be reckoned to
relate cost or expense, and increase liability corresponds to it.
On each balance sheet date, a best estimated of situation of exercise cash-settled right that with waiting-period
should be undertaken, and reckon cost or expense and increase liability which is on the base of service award by
the Company, according to the fair value of company’s liability.
② Equity-settled share-based payment
The measurement is base on the fair value of the equity instrument granted to employees.
The value of equity-settled payment that could be exercised immediately after award would be reckoned in relates
cost and expense and increase capital reserves corresponds to it..
On each balance sheet date, a best estimated of amount of exercise equity-settled that with waiting-period 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.
(2) The measures for the recognition of the fair value of the equity instruments.
① For those shares granted to employees shall measure the fair value of equity instruments granted at the
measurement date, based on market prices if available, simultaneously, taking into account the terms and
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conditions ( exclude the vesting conditions of external market) upon which those equity instruments were
granted.
② For those share options granted to employees, the market prices are not available in most circumstance. If
there is no clauses and requirements of others similar trading options, the Company shall estimate the fair value of
the share option granted using a valuation technique.
(3) Basis for the recognition of the best estimation of the vested equity instruments
On each balance sheet date of waiting-period, the Company shall recognize an amount for the equity instrument
during the vesting period based on the best available estimate of the number of equity instruments expected to vest
and shall revise that estimate, if necessary, if subsequent information indicates that the number of equity
instruments expected to vest differs from previous estimates.
(4) Relevant accounting treatment on the implementation of share-based payment plan
① For cash-settled share-based payment transactions granted vest immediately, reckon cost or expense according
to the fair value of the Company’s liability on the measurement date, increase liability corresponds to it. At each
reporting date and at the date of final settlement, with any change in intrinsic value recognised in profit or loss.
② If the equity instruments granted do not vest until completes a specified period of service or can be satisfied
pre requirement, on each balance sheet date of waiting-period, the Company shall recognize an amount for the
equity instrument during the vesting period based on the best available estimate of the number of equity
instruments, according to the fair value of the Company’s liability, recognize the received services as cost or
expense, and increase liability corresponds to it.
③ The value of equity-settled payment that could be exercised immediately after award would be reckoned in
relates cost and expense and increase capital reserves corresponds to it..
④ If the equity instruments granted do not vest until completes a specified period of service or can be satisfied
pre requirement, on each balance sheet date of waiting-period, the Company shall recognize an amount for the
equity instrument during the vesting period based on the best available estimate of the number of equity
instruments, according to the fair value on the measurement date,, recognize the received services as cost or
expense, and increase capital reserve corresponds to it.
22. Repurchase of shares of the Company
The Company accords to the legal procedures and approval through legal reporting, to decrease the share capital
by the shares buy back method, reduce the paid-in capital by the amount of total nominal value of withdrawn
shares, the difference between share price paid(including trading expense) and the nominal value shall be adjust
the amount of equity, any amount more than the total nominal value, shall reducing the capital reserve(share
premium)、surplus reserve and undistributed profits successively; any amount lower than the total nominal value,
shall increasing the capital reserve(share premium).
The shares before buy back, as the treasury stock management, the share buy back payment recognized as cost of
treasury stock.
If the transfer revenue received higher than the cost of the treasury stock, transfer the treasury stock, should be
70
increase the capital reserve(share premium); if that revenue received lower than the cost, should be reduce the
capital reserve(share premium)、surplus reserve and undistributed profits successively.
23. Revenue
(1) Criteria for recognition time of revenue from selling goods
Revenue from the sale of goods shall be recognized when all of the following conditions are satisfied:
① the entity has transferred the significant risks and reward ownership of goods to the buyer;
② the entity retains neither continuing managerial involvement to the degree usually associated with ownership
nor effective control over goods sold;
③ the amount of revenue can be measured reliably;
④ relate economic benefit is probably inflow to the enterprise;
⑤ the associated costs incurred or to be incurred can be measured reliably.
No matter what sales way the Company adopts to conduct its export sales of products, the recognition method for
revenue is based on agreement in sales contracts or orders. As for selling products with the settlement way of FOB
domestic port, revenue of sales are recognized to realize after gaining the B/L upon loading and completing the
customs export formalities; as for selling products with the settlement way of FOB overseas port, revenue of sales
are recognized to realize after completing the customs export formalities and gaining the B/L upon loading
overseas.
The Company’s accounting treatment for return of sales: according to the prevailing rules for international trade,
the settlement way of FOB means that the purchaser has checked and accepted the purchased goods at the loading
place, and undertaken relevant risks after shipping upon the check and acceptance, so the Company didn’t make
individual provision for the above issue, but recorded it directly into the gains and losses upon occurance. The
Company’s accounting treatment of claims: the Company calculated the claims expense ratio according to the
ratio of the annual amount of claims over the recent two years in the annual revenue of sales, and then withdrew
the claims expenses to be recognized for the current sales of products according to the current revenue of sales
and expected claims expenses ratio at the end of reporting period.
(2) Revenue from construction contracts
① When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs
associated with the construction contract should be recognised as revenue and expenses respectively by reference
to the stage of completion of the contract activity at the balance sheet date. The recognition of revenue and
expenses by reference to the stage of completion of a contract is often referred to as the percentage of completion
method. Under this method, contract revenue is matched with the contract costs incurred in reaching the stage of
completion, resulting in the reporting of revenue, expenses and profit which can be attributed to the proportion of
work completed.
In the case of a fixed price contract, the outcome of a construction contract can be estimated reliably when all the
following conditions are satisfied:
a. total contract revenue can be measured reliably;
b. it is probable that the economic benefits associated with the contract will flow to the enterprise;
c. the contract costs attributable to the contract can be clearly identified and measured reliably so that actual
71
contract costs incurred can be compared with prior estimates; and
d. both the contract costs to complete the contract and the stage of contract completion at the balance sheet date
can be measured reliably.
In the case of a cost plus contract, the outcome of a construction contract can be estimated reliably when all the
following conditions are satisfied:
a. it is probable that the economic benefits associated with the contract will flow to the enterprise; and
b. the contract costs attributable to the contract, can be clearly identified and measured reliably.
On the balance sheet date, under the percentage of completion method, contract revenue is recognised as revenue
in the income statement in the accounting periods in which the work is performed. Contract costs are usually
recognised as an expense in the income statement in the accounting periods in which the work to which they relate
is performed. The Company may have incurred contract costs, indemnity or reward, caused by the change of the
contract. Such contract costs can be recognised as revenue, if such costs represent an amount due from the
customer and there is an agreement with the customer.
② When the outcome of a construction contract cannot be estimated reliably:
a. revenue should be recognised only to the extent of contract costs incurred that it is probable will be
recoverable; and
b. if the cost can not be recovered, contract costs should be recognised as an expense in the period in which they
are incurred.
③ An expected loss on the construction contract should be recognised as an expense immediately
(3) Revenue from rendering of services
① The Company 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 can be estimated reliably when all the following conditions are satisfied:
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:
a. revenue shall be recognized to the extent of costs incurred that are expected to be recoverable if compensation
are predict to be award;
b. to those cost that without compensation in predict, through to profit and loss account without recognize
revenue.
(4) Revenue from abalienating of right to use assets
The revenue from abalienating of right to use assets including : interest income、user charges etc, recognized when
all the following conditions are satisfied:
72
① the economic benefits related to the transaction are probably will flow into the Company;
② the amounts can be reliably measured.
Interest income, compute base on the funds used time by other peoples and the actual interest rate.
User charges, compute base on the chargeable time and method arranged in the contract or agreement.
24. Government subsidies
(1) Prerequisites for government subsidies
① enterprises can meet the standard of government subsidies;
② enterprises can receive the subsidies from government.
(2) type of government subsidies and accounting treatment method
① A government grant related to an asset shall be recognized as deferred income, when the assets is substantially
ready for its intended use, evenly amortized to profit and loss over the useful lives of the related asset.
Unamortized amount would be one-off recognized in profit and loss account when the asset is sale, convey, scrap,
derogation before its useful life.
② 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.
(3) Measurement of government subsidies
Government subsidies measured according to amount received or receivable are monetary assets. Those
government subsidies measured according to fair value are non-monetary assets; if the fair value can not be obtain
in a reliable way, it shall be measured at its nominal amount.
(4) If the recognized government grants needed to return back, which shall be treated as follows:
①If there is relevant deferred income, decrease the carrying value of the deferred income, any exceeds the amount
shall be recognized to current profit and loss account.
②If there is no relevant deferred income, recognized to current profit and loss account directly.
25. Deferred income tax assets and deferred income tax liabilities
The Company checks its business income tax in line with balance sheet liability method
Pursuant to the discrepancy between the fair value of assets, liabilities and tax basis, the Company determines
deferred income tax assets and deferred income tax liabilities according to the expected withdrawal of assets or
the calculation of applicable tax rate in liquidating period.
(1) Recognition basis of deferred income tax assets
① Deferred 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 tax assets arise from initial recognize of assets and liabilities in transaction that have character listed
below would not recognised:
a. The transaction is not business combination;
b. At the time of the transaction, it affects neither accounting profit nor Taxable business revenue (or deductible
73
loss).
② The Company and subsidiaries, associated companies and joint venture investments that can be related to
deductible temporary differences, while meeting the following conditions, to confirm the corresponding deferred
income tax assets:
a. Temporary differences in the foreseeable future is likely to switch back to; and
b. It is likely to be used for deductible temporary differences in taxable income in the future.
③ The Company can carry forward for the subsequent year’s tax losses and tax credits, to very likely be used to
offset tax losses and tax credits amount of future taxable income limit, verify the corresponding deferred income
tax assets.
(2) Recognition basis of 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:
① The initial recognition of goodwill;
② The initial recognition of assets or liabilities, when all the following conditions are satisfied:
a. The transaction is not a business combination;
b. At the time of the transaction, it affects neither accounting profit nor Taxable business revenue (or deductible
loss).
③ Temporary differences arise from the investments in subsidiaries, associates and interests in joint ventures,
when all the following conditions are satisfied:
a. The parent, investor or venturer is able to control the timing of the reversal of the temporary difference; and
b. It is probable that the temporary difference will not reverse in the foreseeable future.
(3) The carrying amount of deferred income tax assets shall be reviewed at each balance sheet date. If it is
unlikely to obtain sufficient taxable income to offset against the benefit of the deferred income tax asset, the
carrying amount of the deferred income tax assets shall be written down.
Any such write-down should be subsequently reversed where it becomes probable that sufficient taxable income
will be available.
26. Operating lease and financial lease
(1) Accounting treatments of operating lease
① When the Company as the lessee under operating lease, lease payments under an operating lease shall be
recognized as an expense on a straight-line basis over the lease term. Initial direct expense undertaken by the
Company, recognized to the management expenses, contingent rental incurred recognized as current expenses. If
the lease contract including a rent-free period, the Company shall amortize the overall rent expenses on a
straight-line basis over the whole lease period, during the rent-free period recognize lease expenses and liability
correspond to it. If the lessee’s expenses paid by the lessor, the Company shall be reduce this expenses from the
total rent expenses, and amortize the balance.
② When the as the lessor under operating lease, lease income from operating leases shall be recognised in
income on a straight-line basis over the lease term. The initial costs, recognized to the current profit and loss
74
account, however, if the amount is large, shall be added to the carrying amount of the leased asset and recognised
as an expense over the lease term on the same basis as the lease income. If the contract including a rent-free
period, the Company shall recognize the total lease income for the whole lease period, during the rent-free period
recognize the income also. If the Company paid some lessee’s expenses, the Company shall amortize the income
balance (total lease income deduct the expenses) during lease period.
(2) Accounting treatments of financial lease
① At the commencement of the lease term, lessees shall recognize finance leases as assets in their balance sheets
at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease
payments, and the amount of present value of the minimum lease payments recognized as long term accounts
payable, the difference recognized as unrecognized financial charges. During each lease period, adopt actual
interest rate method to amortize the expenses, and recognized to financial expense in current period.
The depreciation policy for depreciable leased assets shall be consistent with that for depreciable assets that are
owned, the depreciation period according to the lease period. If there is reasonable certainty that the lessee will
obtain ownership by the end of the lease term, the assets shall be depreciated over its useful life. If there is no
reasonable certainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully
depreciated over the shorter of the lease term and its useful life.
② When the Company as the lessor under finance lease, lessor shall recognize assets held under a finance lease
in their balance sheets and present them as a long term accounts receivable at an amount equal to the minimum
lease receivable add the initial cost, and simultaneously recognize unguaranteed residual value and the total of
present value shall be recognized as unrealized financing profits, adopt the actual interest rate method to recognize
income during the lease period, recording to other operating income.
27. Assets held for sale
(1) Recognition criteria of the assets held for sale
The Company shall classify a non-current asset as held for sale if when all the following conditions are satisfied:
① The appropriate level of management must be committed to a plan to sell the assets;
② The Company has entered into a irrepealably transfer agreement with buyer;
③ The sale should be expected to qualify for recognition as a completed sale within one year from the date of
classification.
(2) Accounting treatments of the assets held for sale
A non-current asset classified as held for sale is measured at the net residual amount after deducting the costs
necessary to make a sale from its held-for-sale-classification fair value upon classification. The net residual
amount is capped by the carrying amount of the asset immediately before the classification. The excess of the
carrying amount of the asset immediately before the classification over the net residual amount is accounted for as
impairment loss on assets for the reporting period during which the asset is classified as held for sale.
If a non-current asset (or disposal group) held for sale no longer meets the criteria for recognition as held for sale,
the asset (or disposal group) is ceased to be recognised as held for sale and measured at the lower of:
① Its carrying amount before the asset (or disposal group) was classified as held for sale, adjusted for any
75
depreciation, amortization or revaluations that would have been recognised had the asset (or disposal group) not
been classified as held for sale, and
② Its recoverable amount at the date of the subsequent decision not to sell.
28. Changes in main accounting policies and estimates
(1) Change of accounting policies
There were not main accounting policies changed during the report period.
(2) Change of accounting estimates
There were not main accounting estimates changed during the report period.
29. Correction of previous accounting errors
There was not accounting error made in previous periods discovered in the report period.
(III) Taxation
1. Main taxes and tax rate
(1) Applicable taxes and tax rate of the Company
Category of taxes Tax basis Tax rate
Revenues from sales of products and raw
VAT 0, 17
materials
Business tax Taxable business revenue 5
Circulating taxes, exemption and
Urban construction tax 7
deductible taxes
Circulating taxes, exemption and
Education surcharge 3
deductible taxes
Circulating taxes, exemption and
Local education surcharge 2
deductible taxes
Enterprise income tax Taxable income 25
“Exemption, set off, return method” is applicable to export products and raw materials with a VAT of 0%.
(2) Taxes and tax rate of main subsidiaries
① Tsann Kuen (Zhangzhou) Enterprise Co., Ltd. (hereafter, TKL)
Category of taxes Tax basis Tax rate%
VAT Revenues from sales of product and raw material 0,17
Business tax Taxable business revenue 5
Urban construction tax Circulating taxes, exemption and deductible taxes 5
Education surcharge Circulating taxes, exemption and deductible taxes 3
Local education surcharge Circulating taxes, exemption and deductible taxes 2
Enterprise income tax Taxable income 15
“Exemption, set off, return method” is applicable to export products and raw materials with a VAT of 0%
In accordance with the Notice on Confirmation of the First and Second Batch Re-examined Hi-tech Enterprises of
Fujian Province for 2011 (Min-Ke-Gao (2012) No. 1), Tsann Kuen (Zhangzhou) Enterprise Co., Ltd. was
76
confirmed as the first batch re-examined hi-tech enterprise of Fujian Province for 2011 (certificate No.:
GF201135000115), with the valid periods of the year of 2011, 2012 and 2013.
② Tsann Kuen (Zhangzhou) South Port Electronics Enterprise Co., Ltd.
Category of taxes Tax basis Tax rate%
VAT Revenues from sales of product and raw material 0,17
Business tax Taxable business revenue 5
Urban construction tax Circulating taxes 5
Education surcharge Circulating taxes 3
Local education surcharge Circulating taxes 2
Enterprise income tax Taxable income 25
“Exemption, set off, return method” is applicable to export products and raw materials with a VAT of 0%
③ Tsann Kuen China (Shang Hai) Enterprise Co., Ltd.
Category of taxes Tax basis Tax rate%
VAT Revenues from sales of product and raw material 17
Business tax Taxable business revenue 5
Urban construction tax Circulating taxes 1
Education surcharge Circulating taxes 3
Local education surcharge Circulating taxes 2
Enterprise income tax Taxable income 25
④ Shanghai Canxing Trading Co.,Ltd.
Category of taxes Tax basis Tax rate%
VAT Revenues from sales of product and raw material 17
Business tax Taxable business revenue 5
Urban construction tax Circulating taxes 1
Education surcharge Circulating taxes 3
Local education surcharge Circulating taxes 2
Enterprise income tax Taxable income 25
⑤ Star Travel International (Xia Men) Co.,Ltd.
Category of taxes Tax basis Tax rate%
Business tax Taxable business revenue 5
Urban construction tax Circulating taxes 7
Education surcharge Circulating taxes 3
77
Category of taxes Tax basis Tax rate%
Local education surcharge Circulating taxes 2
Enterprise income tax Taxable income 25
⑥ Xiamen Canxing Trading Co.,Ltd.
Category of taxes Tax basis Tax rate%
VAT Revenues from sales of product and raw material 17
Business tax Taxable business revenue 5
Urban construction tax Circulating taxes 7
Education surcharge Circulating taxes 3
Local education surcharge Circulating taxes 2
Enterprise income tax Taxable income 25
⑦ Xiamen Star Comgistic Trading Co.,Ltd.
Category of taxes Tax basis Tax rate%
VAT Revenues from sales of product and raw material 17
Business tax Taxable business revenue 5
Urban maintenance
Circulating taxes 7
and construction tax
Education surcharge Circulating taxes 3
Local education surcharge Circulating taxes 2
Enterprise income tax Taxable income 25
⑧ PT. STAR COMGISTIC INDONESIA
Category of taxes Tax basis Tax (fare) rate%
VAT Revenues from sales of product and 10(note)
raw material
Enterprise income tax Taxable income 25
P.S.: The legal tax rate of VAT is 10%, however, in according to the approval document with number as
ST-718/WBC.08/KPP.MP.02/2011 issued by Bureau of Customs of Indonesia on 5 Oct. 2011, the approval
document with number as 291KMK.05/1997 issued by Ministry of Finance of Indonesia on 26 Jul. 1997 and the
approval document with number as KEP-63/BC /1997 issued by General Administration of Customs of Indonesia,
PT. STAR COMGISTIC INDONESIA is confirmed as a bonded factory, thus the actual applicable VAT tax rate
for the export products by acquiring raw materials is zero.
(IV) Business combination and consolidated financial statement
1. Subsidiaries
(1) Subsidiaries obtained by establishment and investment
78
Registered Business Registered
Subsidiaries name Type Business scope
place nature capital
Development, production and
sales of small home electronic
Tsann Kuen Manufacture
appliance, new style of
(Zhangzhou) Holding home 160,000,000.00
Zhangzhou electronic device,
Enterprise Co., subsidiary electronic USD
light-industrial product, and
Ltd.(TKL) appliance
modern furniture and relative
modules
Star Travel
Wholly-owned Travel 5,000,000.00 Inbound tourism business;
International (Xia Xiamen
subsidiary business USD domestic tourism business
Men) Co.,Ltd.(TSX)
Subsidiaries obtained by establishment and investment
The
Actual amount of The proportion of proportion
Subsidiaries name investments at the Other essential investment holding shares of voting
period-end （%） rights（%）
TKL 120,000,000.00 USD 0.00 75.00 75.00
0.00
TSX 5,000,000.00USD 100.00 100.00
Subsidiaries obtained by establishment and investment
Included in
Subsidiaries name consolidated Minority interest Deductible minority interests
statement
TKL Yes 322,447,140.27 0.00
TSX Yes 0.00 0.00
(2) Subsidiaries obtained by business combination under same control
Registered Business Registered
Subsidiaries name Type Business scope
place nature capital
Manufacture Production and sales of household
Tsann Kuen China Sino-foreign
of small 40,000,000.00 appliances, electronics, light
(Shanghai) Enterprise joint Shanghai
household USD industrial products and modern
Co., Ltd. (TKS) venture
appliances office supplies and relevant modules
Subsidiaries obtained by business combination under same control
Actual amount of The proportion of The proportion of
Other essential
Subsidiaries name investments at the
investment holding shares（%） voting rights（%）
period-end
25,000,000.00 USD 0.00 62.5% 62.5%
TKS
Subsidiaries obtained by business combination under same control
Included in
Subsidiaries name consolidated Minority interest Deductible minority interests
statement
Yes 35,532,550.22 366,620.35
TKS
2. Sub-subsidiaries
(1)Sub-subsidiaries obtained by establishment and investment
79
Sub-subsidiaries Registered Business Registered
Type Business scope
name place nature capital
Development and production of
Tsann Kuen Manufacture
small home electronic
(Zhangzhou) South Subsidiary of home
5,000,000.00 appliance, new style of
Port Electronics holding Zhangzhou electronic
CNY electronic device,
Enterprise Co., subsidiary appliance
light-industrial product, and
Ltd. (TKN)）
modern furniture
Tsann Kuen
(Zhangzhou) Non-enterprise Secondary
3,000,000.00
Profession and unit of holding Zhangzhou vocational Secondary vocational education
CNY
Technology subsidiary education
Institute (LTC)
Engaging in household
appliances, calculators and
accessories, communication
equipment, electrical
Shanghai Canxing Subsidiary of
Sales of home 4,950,000.00 equipment, office supplies and
Trading Co.,Ltd holding Shanghai
electronic CNY related products (including
(STD) subsidiary
kitchen supplies) the import,
wholesale, retail and after-sales
service; self-and agent all kinds
of goods and
Wholesale, retail, general
merchandise, home electronic
appliance, computer and its
fitting equipment,
communication equipments,
Xiamen Canxing Subsidiary of
Sales of home 30,000,000.00 mechanical and electronic
Trading Co.,Ltd. holding Xiamen
electronic CNY equipments, office equipments,
(TSX3C) subsidiary
kitchen appliance and related
complete product; Import or
export products or technology,
but those products prohibit by
the Country are exempt.
Wholesale, retail, general
merchandise, home electronic
appliance, computer and its
fitting equipment,
communication equipments,
Xiamen Star Subsidiary of
Sales of home 28,000,000.00 mechanical and electronic
Comgistic Trading holding Xiamen
electronic CNY equipments, office equipments,
Co.,Ltd. (SCCX) subsidiary
kitchen appliance and related
complete product; Import or
export products or technology,
but those products prohibit by
the Country are exempt.
Sub-subsidiaries obtained by establishment and investment
Actual amount of The proportion The proportion
Sub-subsidiaries name investments at the Other essential investment of holding shares of voting rights
period-end （%） （%）
0.00
TKN 3,750,000.00 CNY 56.25 75.00
0.00
LTC 3,000,000.00 CNY 75.00 100.00
0.00
STD 4,950,000.00 CNY 56.25 100.00
0.00
TSX3C 30,000,000.00 CNY 75.00 100.00
0.00
SCCX 28,000,000.00 CNY 75.00 100.00
Sub-subsidiaries obtained by establishment and investment
80
Included in
Sub-subsidiaries
consolidated Minority interest Deductible minority interests
name statement
TKN Yes 2,934,976.34 0.00
LTC Yes 0.00 0.00
STD Yes 0.00 0.00
TSX3C Yes 0.00 0.00
SCCX Yes 0.00 0.00
(2) Sub-subsidiaries obtained by business combination under same control
Sub-subsidiaries Registered Business Registered
Type Business scope
name place nature capital
Subsidiary of
East Sino Hong Investment 135,993,000
holding Investment
Development Limited Kong company HKD
subsidiary
Production and sales of
PT. STAR Subsidiary of Manufacture household appliances,
COMGISTIC 17,500,000
holding Indonesia of home electronics, light industrial
USD
INDONESIA（SCI） subsidiary electronic products and modern office
supplies
Sub-subsidiaries obtained by business combination under same control
Actual amount of
Sub-subsidiaries The proportion of The proportion of
investments at the Other essential investment
name holding shares（%） voting rights（%）
period-end
16,300,00
ESD 0.00 75.00 100.00
USD
17,425,000
SCI 0.00 74.68 99.57
USD
Sub-subsidiaries obtained by business combination under same control
Included in
Sub-subsidiaries
consolidated Minority interest Deductible minority interests
name statement
ESD Yes 0.00 0.00
SCI Yes 138,406.51 103,769.21
P.S.: SCI is the holding subsidiary of ESD.
2. Special purpose entities or operating entities with control right formed by entrusted operation or lease
□ Applicable √ Inapplicable
3. Explanation on changes in consolidated scope
√ Applicable □ Inapplicable
Unit：RMB Yuan
Net profit from
Net asset at the Reason for change of
Subsidiaries deconsolidated Date of deconsolidation year-begin to
disposal date consolidated scope
disposal date
Shanghai Fanxin Airlines Service Co.,
18 March 2013 254,402.41 -25,738.47 Write-off
Ltd. (TSST)
81
Star Travel International (Da Lian)
21 March 2013 0.00 120,759.65 Equity transfer
Co.,Ltd. (TSD)
Xiamen Canxing Airlines Service
24 June 2013 0.00 -33,177.32 Write-off
Co., Ltd.( TSXT)
In line with adjustment of operating strategy of the Company, the Company suspended the operation of travel subsidiaries. Up to the
reporting period, progresses relating to travel subsidiaries are as following:
The Company held 100% stock equity of Shanghai Fanxin Airlines Service Co., Ltd. with a registered capital of 5,500,000 RMB,
finishing liquidating formalities in 18 March 2013.
The Company holds 99% stock equity of Star Travel International (Da Lian) Co.,Ltd. with a registered capital of 5,300,000 RMB. In
13 March 2013 the Company transferred all the share equity to irrelated parties and finished industrial and commercial registration
formalities of transfer in 21 March 2013.
Xiamen Canxing Airlines Service Co., Ltd., the wholly-owned subsidiary of Tsann Kuen (Zhangzhou) Enterprise Co., Ltd finished
liquidating formalities in 24June 2013 with a registration capital of 1,500,000.
Other travel subsidiaries are arranging follow-up liquidating formalities.
4. Business combination under same control during the reporting period
□Applicable√ Inapplicable
5. Business combination not under same control during the reporting period
□Applicable√ Inapplicable
6. Subsidiaries reduced by selling equities without control right during the reporting period
□Applicable√ Inapplicable
7. The counter purchases in the reporting period
□Applicable√ Inapplicable
8. Mergers in the reporting period
□Applicable√ Inapplicable
9. Exchange rates of major items in financial statements for foreign entities
Within the consolidated financial statement, East Sino Development Limited was the oversea business entities, the
functional currency adopt HKD. The applicable exchange rate is HKD/CNY 0.79655(the balance sheet date spot
rate) for assets and liabilities items; elements of owner’s equity of financial statements except undistributed profit,
are translated into the functional currencies using the transaction-dates spot exchange rates; elements of income
and expenses of financial statements denominated in foreign currencies are translated into the functional currency
using the spot exchange rate of HKD/CNY at the transaction-date; foreign exchange differences arising from
treatments described in the above paragraph are separately presented in the financial statements as an element of
owners’ equity.
Within the consolidated financial statement, PT. STAR COMGISTIC INDONESIA was the oversea business entities,
the functional currency adopt USD. The applicable exchange rate is USD/CNY 6.1787(the balance sheet date
spot rate) for assets and liabilities items; elements of owner’s equity of financial statements except undistributed
profit, are translated into the functional currencies using the transaction-dates spot exchange rates; elements of
income and expenses of financial statements denominated in foreign currencies are translated into the functional
currency using the spot exchange rate of USD/CNY at the transaction-date; foreign exchange differences arising
from treatments described in the above paragraph are separately presented in the financial statements as an
element of owners’ equity.
(V) Notes on major items in consolidated financial statements of the Company
1. Monetary funds
30 June 2013 31 December 2013
Item
Original currency Exchange rate Standard Original currency Exchange rate Standard
82
money money
Cash stock
RMB 269,997.15 1.0000 269,997.15 344,281.70 1.0000 344,281.70
HKD 10,428.60 0.7965 8,306.90 17,133.10 0.8109 13,893.23
USD 8,242.15 6.1787 50,925.77 15,917.43 6.2855 100,049.01
JPY 302,745.80 0.0626 18,954.01 569,261.80 0.0730 41,584.01
IDR 72,534,822.96 0.0006 45,144.25 150,541,027.35 0.0007 98,215.28
CHF 7.00 6.4877 45.41 7.00 6.8274 47.79
EUR 39,602.34 8.0536 318,941.41 28,083.09 8.3176 233,583.91
HUF 81,016.00 0.0272 2,203.64 81,016.00 0.0283 2,292.75
Subtotal 714,518.54 833,947.68
Deposit in
bank
RMB 380,276,298.78 1.0000 380,276,298.78 431,696,307.47 1.0000 431,696,307.47
HKD 1,447,652.16 0.7965 1,153,178.38 13.50 0.8109 10.95
USD 85,838,800.06 6.1787 530,372,193.91 50,944,139.44 6.2855 320,209,388.45
JPY 53,275,417.00 0.0626 3,335,414.04 50,289,340.00 0.0730 3,673,586.00
EUR 276,871.20 8.0536 2,229,809.90 756.15 8.3176 6,289.35
IDR 3,411,911,704.98 0.0006 2,123,192.83 4,509,466,875.94 0.0007 2,942,045.62
Subtotal 919,490,087.84 758,527,627.84
Total 920,204,606.38 759,361,575.52
2. Trading financial assets
(1) Trading financial assets
Item 2013.06.30 2012.12.31
Derivative financial assets 6,985,964.05 0.00
Total 6,985,964.05 0.00
3. Notes receivable
(1) Category of notes receivable
Item 2013.06.30 2012.12.31
Bank acceptance bill 5,277,843.70 3,356,956.00
Total 5,277,843.70 3,356,956.00
(2) There was not receivable pledged at period-end
(3) There was not transferred to accounts receivable because drawer of the notes fails to execute the contract
or agreement, and undue notes endorsed to other parties at the end of the period.
(4) There was not commercial acceptance bill that already discounted or pledged in the period-end.
4. Interest receivable
Item 31 December 2012 Increase in current period Decrease in current period 30 June 2013
Inerest of term deposit 5,231,397.36 6,094,840.50 6,238,369.07 5,087,868.79
Banking interest income 0.00 59,166.67 0.00 59,166.67
Total 5,231,397.36 6,154,007.17 6,238,369.07 5,147,035.46
5. Accounts receivable
(1) Accounts receivable listed by categories
30 June 2013
Item Proportion Bad debt Proportion(%
Amount
(%) provision )
Accounts receivable with significant single amount
0.00 0.00% 0.00 0.00%
and individually withdrawn bad debt provision
83
Accounts receivable for which bad debt provisions
are made on the group basis
Aging group 226,544,366.60 88.64% 9,017,005.88 3.98%
Related party group 29,032,940.34 11.36% 0.00 0.00%
Subtotal of group 255,577,306.94 100.00% 9,017,005.88 3.53%
Accounts receivable with insignificant single amount
0.00 0.00% 0.00 0.00%
and individually withdrawn bad debt provision
Total 255,577,306.94 100.00% 9,017,005.88 3.53%
Continued
Item 31 December 2012
Amount Amount Amount Amount
Accounts receivable with significant single amount and
0.00 0.00% 0.00 0.00%
individually withdrawn bad debt provision
Accounts receivable for which bad debt provisions are
made on the group basis
Aging group 287,193,170.82 92.72% 7,611,554.71 2.65%
Related party group 22,551,408.94 7.28% 0.00 0.00%
Subtotal of group 309,744,579.76 100.00% 7,611,554.71 2.46%
Accounts receivable with insignificant single amount and
0.00 0.00% 0.00 0.00%
individually withdrawn bad debt provision
Total 309,744,579.76 100.00% 7,611,554.71 2.46%
(2) In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
30 June 2013 31 December 2012
Aging
Amount Proportion Provision for bad debts Amount Proportion Provision for bad debts
Within one year 219,486,525.57 96.88% 1,959,164.85 281,719,711.03 98.09% 2,138,094.92
Including 1-90 days 203,604,745.28 89.87% 0.00 267,557,094.81 93.16% 0.00
91-180 days 14,235,561.60 6.28% 1,426,156.84 11,964,703.52 4.17% 1,196,470.35
181-270 days 1,439,991.36 0.64% 429,894.34 786,658.93 0.27% 235,997.68
271-365 days 206,227.33 0.09% 103,113.67 1,411,253.77 0.49% 705,626.89
1-2 years 5,199,776.12 2.30% 5,199,776.12 4,480,870.85 1.56% 4,480,870.85
2-3 years 1,083,721.93 0.48% 1,083,721.93 172,778.55 0.06% 172,778.55
Over 3 years 774,342.98 0.34% 774,342.98 819,810.39 0.29% 819,810.39
Total 226,544,366.60 100.00% 9,017,005.88 287,193,170.82 100.00% 7,611,554.71
(3) In the groups, accounts receivable adopting related party portfolio method to withdraw bad debt provision:
Name of the borrowers Book balance Bad-debt provision Withdrawing proportion Reason
Withdraw in line with bad-debt
Tsann Kuen Japan Co., Ltd. 23,918,636.16 0.00 0.00%
provision policy
Withdraw in line with bad-debt
Canxing Comgistic Co.,Ltd. 5,114,304.18 0.00 0.00%
provision policy
Total 29,032,940.34 0.00 0.00%
(4) Accounts receivable reversed or collected in the reporting period: Naught
(5) The write-off accounts receivable: Naught
(6) Particulars about accounts receivable due to shareholders holding 5% (including 5%) voting rights of the
Company
30 June 2013 31 Dec 2012
Name of entity
Amount Amount of Amount Amount of
84
provision for provision for
bad debts bad debts
TSANN KUEN (CHINA)
5,114,304.18 0.00 7,657,257.39 0.00
ENTERPRISE CO., LTD.
Total 5,114,304.18 0.00 7,657,257.39 0.00
(7) Accounts receivable amount in the top five units
The percentage amount
Name of entity Relationship with the Company Amount Aging
of receivable accounts %
First Non-related relationship 38,356,747.84 Within 1 year 15.01%
Second Related party 23,918,636.16 Within 1 year 9.36%
Third Non-related relationship 23,315,986.61 Within 1 year 9.12%
Fourth Non-related relationship 18,283,935.88 Within 1 year 7.15%
Fifth Non-related relationship 17,476,987.10 Within 1 year 6.84%
Total 121,352,293.59 47.48%
(8) Accounts receivable affiliated parties
The percentage amount
Name of entity Relationships with the Company Amount
of receivable accounts %
TSANN KUEN JAPAN CO., LTD The ultimate holding company 23,918,636.16 9.36%
STAR COMGISTIC CAPITAL CO., LTD. Ultimate holding company 5,114,304.18 2.00%
合 计 29,032,940.34 11.36%
6. Prepayment
(1) Prepayments according to aging listed below
30 June 2013 31 Dec 2012
Aging
Amount Proportion Amount Proportion
Within 1 year 5,028,681.71 100.00% 3,348,515.58 100.00%
Total 5,028,681.71 100.00% 3,348,515.58 100.00%
(2) The top five final prepayments amounts listed below
Name of entity Relationship with the Company Amount Aging unbalanced reason
First Non-related relationship 2,491,397.00 Within 1 year The contract has not completed
Second Non-related relationship 465,141.80 Within 1 year Supplier has not delivery
Third Non-related relationship 464,005.49 Within 1 year Supplier has not delivery
Fourth Non-related relationship 217,985.87 Within 1 year Supplier has not delivery
Fifth Non-related relationship 203,960.00 Within 1 year Supplier has not delivery
Total 3,842,490.16
85
(3) Information about amount due from shareholders with more than 5% (including 5%) of the voting
shares of the Company in prepayment
7. Other accounts receivable
(1) Other accounts receivable disclosed by type
30 June 2013
Category
Amount Proportion Provision for doubtful debts Proportion
Other accounts receivable that is individually
0.00 0.00% 0.00 0.00%
significant and provisions for bad debts individually
Other accounts receivable that provisions for bad
debts by group
Aging group 25,221,335.55 89.96% 753,538.22 2.99%
Related party group 0.00 0.00% 0.00 0.00%
Subtotal of group 25,221,335.55 89.96% 753,538.22 2.99%
Other accounts receivable with insignificant single
2,815,785.10 10.04% 0.00 0.00%
amount and individually withdrawn bad debt provision
Total 28,037,120.65 100.00% 753,538.22 2.69%
continued
31 Dec 2012
Category
Amount Proportion Provision for doubtful debts Proportion
Other accounts receivable that is individually
0.00 0.00% 0.00 0.00%
significant and provisions for bad debts individually
Other accounts receivable that provisions for bad
debts by group
Aging group 38,934,534.38 92.17% 722,231.44 1.85%
Related party group 0.00 0.00% 0.00 0.00%
Subtotal of group 38,934,534.38 92.17% 722,231.44 1.85%
Other accounts receivable with insignificant single
3,303,804.21 7.83% 0.00 0.00%
amount and individually withdrawn bad debt provision
Total 42,238,338.59 100.00% 722,231.44 1.71%
(2) In the group, other accounts receivable that provisions for bad debts by aging analysis
30 June 2013 31 Dec 2012
Category Provision for Provision for
Amount Proportion Amount Proportion
doubtful debts doubtful debts
Within 1 year 24,542,886.82 97.31% 75,089.48 38,222,289.95 98.17% 9,987.01
Including:1-90 days 24,301,760.84 96.36% 0.00 38,156,357.56 98.00% 0.00
91-180 days 43,800.61 0.17% 4,380.06 48,963.62 0.13% 4,896.37
181-270 days 139,766.34 0.55% 41,929.91 16,968.77 0.04% 5,090.64
271-365 days 57,559.03 0.23% 28,779.51 0.00 0.00% 0.00
1-2 years 414,347.23 1.64% 414,347.24 358,339.08 358,339.08
0.92%
2-3 years 248,601.50 0.99% 248,601.50 335,405.35 0.86% 335,405.35
Over 3 years 15,500.00 0.06% 15,500.00 18,500.00 0.05% 18,500.00
Total 25,221,335.55 100.00% 753,538.22 38,934,534.38 100.00% 722,231.44
(3) Other accounts receivable that provisions for bad debts not by related party group in the reporting
period
(4) Information of other accounts receivable reversed or recovered in the reporting period
Accumulated
The basis determines the depreciation in the
The reason reversed Total of reversed
Name of entity original provision for bad amount of provision for
or recovered or recovered
debts bad debt before reversed
or recovered
According to the policy of
DELONGI Returned provision 72,666.20 72,666.20
provision for bad debt provision
86
(5) Other receivables provision for bad debt provision that is not individually significant but has paid
separately for testing in the reporting period
Other receivables Book balance bad-debt provision Provision ratio（%） Reason for provision
According to the policy
Deposit 998,450.00 0.00 0.00
of provision for bad debt provision
According to the policy
Payments for equipment 1,817,335.10 0.00 0.00
of provision for bad debt provision
Total 2,815,785.10 0.00 0.00
(6) No write-off of other receivables in the reporting period
(7) Information about amount due from shareholders with more than 5% (including 5%) of the voting
shares of the Company in other receivables
(8) Information of top five other accounts receivable in the reporting period
Relationship
Name of entity Amount Aging Proportion of the total %
with the Company
First Non-related relationship 18,049,888.81 Within 30 days 64.38%
Second Non-related relationship 799,464.21 Within 30 days 2.85%
Third Non-related relationship 760,950.00 1-3 years 2.71%
Fourth Non-related relationship 647,025.08 Within 90 days 2.31%
Fifth Non-related relationship 502,168.31 Within 90 days 1.79%
Total 20,759,496.41 74.04%
8. Inventory
(1) Category
30 June 2013 31 Dec 2012
Item Impairment of Impairment of
Book balance Book value Book balance Book value
inventories inventories
Raw materials 118,538,813.16 28,093,949.94 90,444,863.22 134,790,681.50 27,281,627.75 107,509,053.75
Construction contract assets 14,997,433.02 0.00 14,997,433.02 17,675,815.86 0.00 17,675,815.86
Inventory goods 23,376,829.82 3,180,857.92 20,195,971.90 32,408,148.84 3,180,857.92 29,227,290.92
Turnover material 89,139,665.85 6,173,142.61 82,966,523.24 88,076,699.41 5,639,330.18 82,437,369.23
Consumable biological assets 3,406,176.41 0.00 3,406,176.41 3,216,710.88 0.00 3,216,710.88
Self-made semi-finished product 996,369.94 0.00 996,369.94 2,512,650.90 0.00 2,512,650.90
Finished product 250,455,288.20 37,447,950.47 213,007,337.73 278,680,707.39 36,101,815.85 242,578,891.54
(2) Impairment of inventories
Current
reversal
amount
Increase in t Reversal in t
Written off in t representing
he he 30 June 201
Item 31 Dec 2012 he the ratio of
reporting reporting 3
reporting period the closing
period period
balance of
inventories
%
Raw materials 27,281,627.75 2,564,322.19 0.00 1,752,000.00 28,093,949.94 0.00%
87
Self-made semi-finished
3,180,857.92 0.00 0.00 0.00 3,180,857.92 0.00%
product
Finished product 5,639,330.18 533,812.43 0.00 0.00 6,173,142.61 0.00%
Total 36,101,815.85 3,098,134.62 0.00 1,752,000.00 37,447,950.47 0.00%
9. Due within one year of non-current assets
Item 30 June 2013 31 Dec 2012
Due within one year of long-term receivables 236,478.72 2,442,481.41
- Installment transferred assets
Including: Due within one year of Long-term receivables for bad debts 7,559.90 7,721.47
Total 228,918.82 2,434,759.94
10. Other current assets
Item 30 June 2013 31 Dec 2012
Financial products 70,000,000.00 0.00
Total 70,000,000.00 0.00
11. Long-term accounts receivable
30 June 2013 31 Dec 2012
Item
Amount bad-debt provision Book value Amount bad-debt provision Book value
Installment transferred assets 723,370.84 0.00 723,370.84 3,883,551.22 4,581.59 3,878,969.63
Including: unrealized financing gains 202,516.90 0.00 202,516.90 508,023.30 0.00 508,023.30
Total 520,853.94 0.00 520,853.94 3,375,527.92 4,581.59 3,370,946.33
12. Long-term equity investment
(1) List of long-term equity investment
Withdrawn impairment
Item 31 Dec 2012 Increase/decrease 30 June 2013 Impairment provision
provision in the reporting period
Long-term equity investment
counting by cost method
Xiamen Institute of Foreign
40,000.00 0.00 40,000.00 0.00 0.00
Investment Enterprise
Total 40,000.00 0.00 40,000.00 0.00 0.00
Continued:
Explanation for
indifferences
between the
Share holding Voting
share holding Cash bonus in the
Investee Initial investment cost percentage in percentage in
percentage and reporting period
investee % investee %
voting
percentage in
investee
Long-term equity investment
counting by cost method
Xiamen Institute of Foreign
40,000.00 1.48% 1.48% None 7,533.00
Investment Enterprise
40,000.00 1.48% 1.48% 7,533.00
88
13. Investment property
(1) Investment property calculated by cost
Increase in the Decrease in the
Item 31 Dec 2012 30 June 2013
reporting period reporting period
I. Total original book value 102,541,517.29 48,153,657.54 0.00 150,695,174.83
1. Houses and buildings 93,643,129.72 33,459,026.60 0.00 127,102,156.32
2. Land use right 8,898,387.57 14,694,630.94 0.00 23,593,018.51
Increase in the Withdrawn for the
reporting period reporting period
II. Accumulated depreciation
63,222,059.42 26,926,434.51 4,845,545.37 0.00 94,994,039.30
and amortization
1. Houses and buildings 60,016,205.39 20,989,100.68 4,591,165.05 0.00 85,596,471.12
2. Land use right 3,205,854.03 5,937,333.83 254,380.32 0.00 9,397,568.18
III. Book value of investment
39,319,457.87 55,701,135.53
property
1. Houses and buildings 33,626,924.33 41,505,685.20
2. Land use right 5,692,533.54 14,195,450.33
IV. Accumulated impairment
provision of investment 0.00 0.00 0.00 0.00
property
1. Houses and buildings 0.00 0.00 0.00 0.00
2. Land use right 0.00 0.00 0.00 0.00
V. Book value of investment
39,319,457.87 55,701,135.53
property
1. Houses and buildings 33,626,924.33 41,505,685.20
2. Land use right 5,692,533.54 14,195,450.33
(2) The amount of depreciation and amortization withdrawn for investing real estate is RMB 4,845,545.37
for the reporting period.
14. Fixed assets
(1) Fixed assets details
Increase in the Decrease in the
Item 31 Dec 2012 30 June 2013
reporting period reporting period
I. Total original book value 1,808,631,955.28 19,012,475.38 63,692,030.09 1,763,952,400.57
Including: Houses and
122,047,551.41 30,005.59 33,723,477.52 88,354,079.48
buildings
Machineries 252,273,276.23 4,794,997.28 8,723,770.30 248,344,503.21
Vehicles 1,344,871,852.80 13,670,811.67 18,936,878.11 1,339,605,786.36
Electronics, module and
23,177,448.39 174,256.46 1,467,904.16 21,883,800.69
others
Improvement expense of
66,261,826.45 342,404.38 840,000.00 65,764,230.83
fixed assets
89
Increase in the
-- Charge for the period
reporting period
II. Accumulated
1,534,738,610.56 0.00 26,512,928.25 47,780,571.03 1,513,470,967.78
depreciation
Including: Houses and
56,595,360.60 0.00 1,184,637.99 21,737,814.70 36,042,183.88
buildings
Machineries 179,557,657.50 0.00 4,136,500.56 6,765,284.40 176,928,873.66
Vehicles 1,237,443,693.65 0.00 17,293,558.43 17,298,835.16 1,237,438,416.93
Electronics, module and
22,215,413.55 0.00 168,310.73 1,540,578.08 20,843,146.20
others
Improvement expense of
38,926,485.26 0.00 3,729,920.54 438,058.69 42,218,347.11
fixed assets
--
III. The net book value of
273,893,344.72 0.00 0.00 250,481,432.79
fixed assets
Including: Houses and
65,452,190.81 52,311,895.60
buildings
Machineries 72,715,618.73 71,415,629.55
Vehicles 107,428,159.15 102,167,369.43
Electronics, module and
962,034.84 1,040,654.49
others
Improvement expense of
27,335,341.19 23,545,883.72
fixed assets
IV. Total impairment
54,519,287.18 0.00 1,295,665.12 53,223,622.06
provision
Including: Houses and
0.00 0.00 0.00 0.00
buildings
Machineries 27,306,896.91 0.00 780,975.54 26,525,921.37
Vehicles 25,884,535.93 0.00 514,689.58 25,369,846.35
Electronics, module and
9,363.36 0.00 0.00 9,363.36
others
Improvement expense of
1,318,490.98 0.00 0.00 1,318,490.98
fixed assets
V. Total book value of fixed
219,374,057.54 197,257,810.73
assets
Including: Houses and
65,452,190.81 52,311,895.60
buildings
Machineries 45,408,721.82 44,889,708.18
Vehicles 81,543,623.22 76,797,523.08
Electronics, module and
952,671.48 1,031,291.13
others
Improvement expense of
26,016,850.21 22,227,392.74
fixed assets
90
(2) In the accumulated increasing depreciation of fixed assets, the amount of the charge in the reporting
period is RMB 26,512,928.25.
(3) The amount of fixed assets transferred from the construction in progress which has completed in the
reporting period is RMB 1,985,142.26.
(4) Temporary idle fixed assets
Accrued Impairment Expected when to
Item Original book value Net book value
depreciation provision put into use
Machineries 87,133,868.75 55,014,902.99 26,410,209.99 5,708,755.77 Jan 2014
Vehicles 35,855,456.72 23,756,684.19 12,006,200.71 92,571.82 Jan 2014
Electronics, module and
442,924.56 433,918.08 9,006.48 0.00 Jan 2014
others
Improvement expense of
769,902.33 224,544.83 511,627.96 33,729.54 Jan 2014
fixed assets
Total 124,202,152.36 79,430,050.09 38,937,045.14 5,835,057.13
(5) Hold-for-sale fixed assets in the reporting period.
□Applicable √Inapplicable
(6) Fixed assets leased in from financing lease
□Applicable √Inapplicable
(7) Lists of fixed assets leased out from operation lease
Accrued Impairment
Item Original book value Net book value
depreciation provision
Machineries 1,294,781.88 82,039.00 0.00 1,212,742.88
Electronics, module and others 21,595.97 11,062.69 0.00 10,533.28
Vehicles 0.00 0.00 0.00 0.00
Improvement expense of fixed assets 0.00 0.00 0.00 0.00
Total 1,316,377.85 93,101.69 0.00 1,223,276.16
(8) Information of fixed assets failed to accomplish certification of property
√Applicable □Inapplicable
Accrued Impairment
Item Original book value Net book value
depreciation provision
Elite Garden 835,324.09 236,047.05 0.00 599,277.04
Three Village Green Garden Villa 11,006,702.37 6,741,874.58 0.00 4,264,827.79
Total 11,842,026.46 6,977,921.63 0.00 4,864,104.83
(9) Information of fixed assets for security guarantees at period-end
91
□Applicable √Inapplicable
15. Construction in progress
(1) information of construction in progress
30 June 2013 31 Dec 2012
Item
Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Modules work in progress 928,027.79 0.00 928,027.79 758,631.32 0.00 758,631.32
New plant construction 7,097,523.10 0.00 7,097,523.10 6,335,802.10 0.00 6,335,802.10
Plant reconstruction
0.00 0.00 0.00 0.00 0.00 0.00
project
Total 8,025,550.89 0.00 8,025,550.89 7,094,433.42 0.00 7,094,433.42
(2) Changes in significant construction in progress
Transferred to
Item Budget 31 Dec 2012 Increase in reporting period Other decrease 30 June 2013
fixed assets
Modules work in progress 4,551,367.00 758,631.32 1,522,978.51 1,291,943.59 61,638.45 928,027.79
New plant construction 1,178,161.90 0.00 631,461.90 578,161.90 53,300.00 0.00
Plant reconstruction project 17,310,628.50 6,335,802.10 876,757.77 115,036.77 0.00 7,097,523.10
Total 23,040,157.40 7,094,433.42 3,031,198.18 1,985,142.26 114,938.45 8,025,550.89
Continued:
Including:
Project input
Capitalization capitalization of Capitalization of Source of
Item percentage of Project process
of interest interest this interest rate (%) funding
budget (%)
period
Modules work in
50.13% Partly completed 0.00 0.00 0.00% Self-owned
progress
New plant construction 53.60% Partly completed 0.00 0.00 0.00% Self-owned
Plant reconstruction
41.99% Partly completed 0.00 0.00 0.00% Self-owned
project
Total 0.00 0.00 0.00%
16. Intangible assets
(1) Information
Increase in Decrease in
Item 31 Dec 2012 30 June 2013
reporting period reporting period
I. Total original book value 45,671,934.23 1,173,221.26 14,694,630.94 32,150,524.55
Land use rights 32,022,668.54 1,173,221.26 14,694,630.94 18,501,258.86
Software of information system 13,649,265.69 0.00 0.00 13,649,265.69
II. Accumulative amortization 20,210,148.07 794,379.54 5,880,658.25 15,123,869.36
Land use rights 8,191,036.31 214,710.38 5,880,658.25 2,525,088.44
Software of information system 12,019,111.76 579,669.16 0.00 12,598,780.92
92
III. Total net book value of
25,461,786.16 17,026,655.19
intangible assets
Land use rights 23,831,632.23 15,976,170.42
Software of information system 1,630,153.93 1,050,484.77
IV. Total impairment provision 0.00 0.00 0.00 0.00
Land use rights 0.00 0.00 0.00 0.00
Software of information system 0.00 0.00 0.00 0.00
Total book value of intangible
25,461,786.16 17,026,655.19
assets
Land use rights 23,831,632.23 15,976,170.42
Software of information system 1,630,153.93 1,050,484.77
(2) Amortization was of RMB 794,379.54 in reporting period.
(3) Total expenditure of R&D projects in the reporting period is RMB 30,687,843.84, which were all
included in the current profits and losses.
17. Goodwill
Name of investee or event Increase in Decrease in
31 Dec 2012 30 June 2013 The final impairment loss
that generated goodwill reporting period reporting period
Shanghai Ficense, Co., Ltd. 71,870.08 0.00 71,870.08 0.00 0.00
Dalian Startravel, Co., Ltd. 800,109.01 0.00 800,109.01 0.00 0.00
Xiamen shimmering star
international travel service 125,000.00 0.00 125,000.00 0.00 0.00
co., LTD
Totall 996,979.09 0.00 996,979.09 0.00 0.00
18. Long-term amortization expense
Increase in Amortization in
Item 31 Dec 2012 30 June 2013
reporting period reporting period
Telecommunications
1,135,999.96 0.00 142,000.02 993,999.94
engineering
Houses and buildings
4,788,345.00 172,000.00 793,670.46 4,166,674.54
renovation expenses
Landscape engineering 80,744.04 0.00 16,149.00 64,595.04
Others 147,454.07 64,698.39 0.00 212,152.46
Total 6,152,543.07 236,698.39 951,819.48 5,437,421.98
19. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets and deferred income tax liabilities are not listed as the net value after offset
√Applicable □Inapplicable
Item 30 June 2013 31 Dec 2012
Deferred income tax assets
Provision for assets impairment 13,408,537.20 13,312,791.54
accrued expenses 1,382,130.03 1,752,809.23
trading financial liabilities 54,488.29
93
accrued liabilities 2,721.33 2,850.48
accrued liabilities 3,223,429.46 3,876,039.86
undistributed deficit 906,158.24
Unrealized profits from intra-group transactions 74,406.25 74,406.25
Subtotal 18,997,382.51 19,073,385.65
Deferred income tax liabilities:
trading financial assets 1,047,894.61 0.00
depreciation of fixed assets 81,453.52 44,686.69
Total 1,129,348.13 44,686.69
(2) List of unrecognized deferred income tax assets
Item 30 June 2013 31 Dec 2012
Impairment of fixed assets 2,130,762.20 2,130,762.20
Provision for bad debts 105,860.04 89,878.01
Accrued expenses 4,699,486.84 1,935,174.08
Provision for inventories 592,986.59 397,923.66
Damage can be remedied 14,423,515.89 16,657,993.05
Accrued payroll 306,691.55 224,443.34
Impairment of long-term investment 32,661,635.73 32,661,635.73
Total 54,920,938.84 54,097,810.07
(3) Unrecognized deferred income tax assets will be deductible losses expire the following year
Years 30 June 2013 31 Dec 2012
2013 0.00 11,867,632.29
2014 7,007,422.53 7,007,422.53
2015 5,018,318.69 5,151,692.12
2016 15,060,412.43 18,276,746.93
2017 18,131,033.36 24,328,478.25
2018 12,476,876.49 0.00
Total 57,694,063.50 66,631,972.12
(4) Assets which caused temporary differences or corresponding liabilities for temporary differences at
period-end
The amount of the deductible The amount of the taxable
Item
temporary differences temporary differences
Impairment of fixed assets 44,021,715.68 0.00
Provision for inventories 35,076,004.14 0.00
Provision for bad debts 9,354,663.82 0.00
Accrued expenses 9,186,886.87 0.00
Accrued payroll 21,472,232.95 0.00
Losses could be made up 6,041,054.93 0.00
Internal purchasing unrealized profits 297,625.00 0.00
Accrued liabilities 16,410.21 0.00
Depreciation of fixed assets 0.00 325,814.08
Trading financial assets 0.00 6,985,964.05
Total 125,466,593.60 7,311,778.13
94
20. List of provision for assets impairment
Decrease in
Increase in
Item 31 Dec 2012 reporting period 30 June 2013
reporting period
Reversal Written-off
Provision for bad debts 8,346,089.21 1,516,757.94 72,666.20 12,076.95 9,778,104.00
Provision for inventories 36,101,815.85 3,098,134.62 0.00 1,752,000.00 37,447,950.47
Impairment of fixed assets 54,519,287.18 0.00 0.00 1,295,665.12 53,223,622.06
Impairment of goodwill 996,979.09 0.00 0.00 996,979.09 0.00
Total 99,964,171.33 4,614,892.56 72,666.20 4,056,721.16 100,449,676.53
21. Short-term loan
(1) Category
Item 30 June 2013 31 Dec 2012
fiduciary loan 208,305,912.00 31,427,500.00
Total 208,305,912.00 31,427,500.00
22. Trading financial liabilities
(1) Category
Item 30 June 2013 31 Dec 2012
Derivative financial liabilities 0.00 363,255.25
Total 0.00 363,255.25
23. Notes payable
Item 30 June 2013 31 Dec 2012
Trade acceptance bill 54,311,862.79 70,851,519.07
Total 54,311,862.79 70,851,519.07
24. Accounts payable
(1) Information
Aging 30 June 2013 31 Dec 2012
Within 1 year 417,983,293.24 638,464,227.60
Over 1 years 7,418,135.86 9,366,811.13
Total 425,401,429.10 647,831,038.73
(2) The accounts payable to shareholders with more than 5% (including 5%) of the voting shares of the
Company
√Applicable □Inapplicable
Name of entity Proceeds content 30 June 2013 31 Dec 2012
STAR COMGISTIC CAPITAL CO., LTD. For materials 491,093.09 1,892,677.06
Total 491,093.09 1,892,677.06
95
(3) Notes of the accounts payable aging over one year:
Reason for Paid back after Balance
Name of entity The amount owed Aging
unsettlement Sheet Day amount
Xinda ELECTRIC MOTOR
3,091,636.18 1 to 3 years Litigation unsettlement 0.00
CO., LTD
Ningbo Jethro electric
982,464.67 2 to 3 years Temporary unsettlement 0.00
appliance co., LTD
Ningbo Chaochao Electrical
500,237.01 2 to 3 years Temporary unsettlement 0.00
Appliance Co., Ltd.
Zhangzhou Yongxing Hechi
250,000.00 2 to 3 years Guarantee Money 0.00
Plastics Co., Ltd.
Longhai Huaning
226,055.72 2 to 3years Guarantee Money 0.00
Metal Products Co., Ltd.
Total 4,074,100.85 0.00
(4) In payable accounts, the list of the accounts of payable related party in reporting period
Name of entity Proceeds content 30 June 2013 31 Dec 2012
STAR COMGISTIC CAPITAL CO., LTD. Material procurement 491,093.09 1,892,677.06
Thermaster Electronic (Xiamen) Ltd. Material procurement 9,189,924.17 11,110,626.59
Total 9,681,017.26 13,003,303.65
25. Advance from customers
(1) Information
Aging 30 June 2013 31 Dec 2012
Within 1 year 21,890,049.43 10,541,326.03
Over 1 year 4,629,296.73 1,947,124.30
Total 26,519,346.16 12,488,450.33
(2) Notes of significant advance from customers aging over one year
Name of entity Advance amount Aging Reason for unsettlement
Sunbeam Corporation Limited 653,429.02 1 to 2 years Temporary unsettled
PT.COSMOTECHNOLOGY 529,002.75 1 to 2 years Temporary unsettled
LIYA 484,249.82 1 to 2 years Temporary unsettled
Conair Corporation 881,254.69 1 to 2 years Temporary unsettled
SEB ASIA LTD 374,090.14 1 to 2 years Temporary unsettled
Total 2,922,026.42
26. Payroll payable
Increase in
Item 31 Dec 2012 Paid during the period 30 June 2013
reporting period
Salary, bonus, allowance,
27,238,826.19 97,231,541.11 101,517,863.98 22,952,503.32
subsidy
Employee welfare 0.00 3,622,994.84 2,628,030.62 994,964.22
ISocial insurance 2,562,674.86 7,346,691.90 9,703,618.37 205,748.39
Including Medical insurance 36,451.72 2,314,514.34 2,328,540.94 22,425.12
96
Basic endowment insurance 2,263,735.48 3,539,430.97 5,640,888.28 162,278.17
Annuity payment 0.00 0.00 0.00 0.00
Unemployment insurance
252,986.23 428,724.89 670,653.72 11,057.40
expense
Employment injury insurance 6,296.15 598,817.35 598,590.31 6,523.19
Maternity insurance 3,205.28 465,204.35 464,945.12 3,464.51
Housing fund 8,641,996.20 2,815,205.00 2,436,527.42 9,020,673.78
Labour union fee and employee
0.00 0.00 0.00 0.00
education fee
Non-monetary welfare 0.00 1,050.00 1,050.00 0.00
Redundancy compensation 1,673,121.44 1,304,178.40 2,692,038.85 285,260.99
Other 0.00 21,222.00 12,682.00 8,540.00
Total 40,116,618.69 112,342,883.25 118,991,811.24 33,467,690.70
No any amount in arrears in the payroll payable.
The closing balance of payroll payable is provision for salary and bonus on of June 2013, and year-end
bonus would be released in 2014.
27. Taxes payable
Taxes kind 30 June 2013 31 Dec 2012
Business tax 713,303.70 752,725.14
Corporate income tax -1,636,875.43 8,951,307.39
VAT -26,696,131.29 -36,856,195.70
Personal income tax 477,508.00 445,840.37
Education surtax 67,450.00 682,043.99
Urban maintenance and construction tax 44,932.12 623,987.38
building taxes 913,952.75 580,141.06
Others 1,191,856.09 982,410.52
Total -24,924,004.06 -23,837,739.85
28. Interest payable
Item 30 June 2013 31 Dec 2012
Interest payable on short-term borrowings 0.00 6,324.78
Total 0.00 6,324.78
29. Other accounts payable
(1) Aging analysis accounts
Aging 30 June 2013 30 June 2013
Within 1 year 222,648,223.21 43,050,264.26
Over 1 year 9,554,304.74 10,385,421.15
Total 232,202,527.95 53,435,685.41
97
(2) Notes of the other large amount accounts payable aging over 1 year
Reason for 资产负债表日后偿还
Name of entity Owned amount Aging
unsettlement Amount
Xiamen Tsann Kuen Trading Co., Margin
1,468,311.95 1 to 2 years 0.00
Ltd
Fujian Province Zhangzhou Margin
800,000.00 1 to 4 years 0.00
SIGMA Metal,INC
Zhangzhou Huadaxin Metal Margin
716,500.00 1 to 4 years 0.00
Co., Ltd.
Xiamen Hexing Packaging Margin
348,720.00 1 to 4 years 0.00
Printing Co., Ltd.
Zhangzhou Jiafeng Ruichuang Margin
330,000.00 1 to 3 years 0.00
Electrics Co., Ltd.
Total 3,663,531.95 0.00
(3) Other accounts payable from shareholders with more than 5% (including 5%) of the voting shares of
the Company
Name of entity Proceeds content 30 June 2013 31 Dec 2012
Fullman Investments Ltd. Money lending 37,072,200.00 0.00
Sinoglobal Development Limited Money lending 61,787,000.00 0.00
EUPA Industry Corporation Limited Money lending 58,079,780.00 0.00
STAR COMGISTIC CAPITAL CO., LTD Agency fees 70,589.36 379,984.25
Total 157,009,569.36 379,984.25
(4) Notes of the other payable accounts of related payable party in reporting period
Name of entity Proceeds content 30 June 2013 31 Dec 2012
American CANKUN CO., LTD After sales service 0.00 127,099.16
Tsann Kuen Japan Co., Ltd. reimbursed expenses 623,105.87 715,594.51
Thermaster Electronic (Xiamen) Ltd. material purchase 0.00 22,500.00
STAR TRAVEL SERVICE CORP. Accept service 0.00 35,160.52
The rent deposit and the
Xiamen Tsann Kuen Trading Co., Ltd 2,218,311.95 2,993,692.00
rent in advance
STAR COMGISTIC CAPITAL CO., LTD Agency fees 70,589.36 379,984.25
Fillman Investment Limited Money lending 37,072,200.00 0.00
Fordchee Development Limited Money lending 61,787,000.00 0.00
EUPA Industry Corporation Limited Money lending 58,079,780.00 0.00
PT.TSANNKUEN INDONESIA equipment purchase 6,862.93 0.00
Total 159,857,850.11 4,274,030.44
30. 预计负债
Increase in reporting Decrease in reporting
Item 31 Dec 2012 30 June 2013
period period
employee welfare
11,401.92 5,008.29 0.00 16,410.21
Total 11,401.92 5,008.29 0.00 16,410.21
98
31. Other Non-current liabilities
Item 30 June 2013 31 Dec 2012
Vocational education subsidies 222,600.00 222,600.00
Total 222,600.00 222,600.00
32. capital stock
Unit：Share
Increase/Decrease
Item 31 Dec 2012 Bonus Conversion 30 June 2013
Allotment Additional Others Subtotal
Amount Fund
I、Not Listed shares
Including: National
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
holdings
Domestic legal person
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
shares
Overseas legal person
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
shares
Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total of not listed
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
shares
II、Listed shares
1.Domestically listed
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
RMB ordinary shares
2.Domestically listed
185,391,680.00 0.00 0.00 0.00 0.00 0.00 0.00 185,391,680.00
foreign shares
3.Overseas listed
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
foreign shares
4.Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total of listed shares 185,391,680.00 0.00 0.00 0.00 0.00 0.00 0.00 185,391,680.00
III、Sum of shares 185,391,680.00 0.00 0.00 0.00 0.00 0.00 0.00 185,391,680.00
33. Capital reserves
Increase in reporting Decrease in
Item 31 Dec 2012 30 June 2013
period reporting period
Capital premium
(share capital 210,045,659.80 0.00 0.00 210,045,659.80
premium)
Other capital
68,408,787.27 0.00 0.00 68,408,787.27
reserves
Total 278,454,447.07 0.00 0.00 278,454,447.07
34. Surplus reserves
Category 31 Dec 2012 Increase in this year Decrease in this year 30 June 2013
Reserve fund 1,776,941.05 0.00 0.00 1,776,941.05
Others 4,343,260.77 0.00 0.00 4,343,260.77
Total 6,120,201.82 0.00 0.00 6,120,201.82
35. Retained profits
Item 30 June 2013 31 Dec 2012
99
Opening balance of retained profits before adjustments 20,797,991.70 -773,499,943.43
Adjustments of opening balance of retained profits 0.00 0.00
Opening balance of retained profits after adjustments 20,797,991.70 -773,499,943.43
Add: Net profit attributable to owners of the Company 10,425,680.85 21,459,739.95
Surplus reserves make up losses 0.00 774,615,136.23
Less: Withdrawal of statutory surplus reserves 0.00 1,776,941.05
Withdrawal of discretional surplus reserves 0.00 0.00
Withdrawal of provision for general risk 0.00 0.00
Dividend of common stock payable 15,758,292.80 0.00
Dividend of common stock converted into share capital 0.00 0.00
Closing retained profits 15,465,379.75 20,797,991.70
36. Revenue and Cost of Sales
(1) Revenue and Cost of Sales
Item Current overall tally Accumulated last year
Sales of main business 845,775,086.33 1,044,642,038.16
Other operating income 32,069,121.47 24,441,450.33
Total 877,844,207.80 1,069,083,488.49
Cost of main business 752,449,378.64 949,590,779.03
Cost of other operating income 10,213,392.99 7,483,443.01
Total 762,662,771.63 957,074,222.04
(2) Main business (Classified by industry)
Current overall tally Accumulated last year
Item
Operating income Operating costs Operating income Operating costs
Catering and
488,925,179.51 429,741,895.84 582,393,490.23 535,280,111.34
Cooking
Home helper 223,417,870.62 208,838,462.09 261,169,345.25 239,323,135.82
Tea/Coffee 78,725,449.38 70,039,397.60 108,701,447.51 95,297,668.22
Others 54,706,586.82 43,829,623.11 92,377,755.17 79,689,863.65
Total 845,775,086.33 752,449,378.64 1,044,642,038.16 949,590,779.03
(3) Main business (Classified by area)
Item Current overall tally Accumulated last year
Operating income Operating costs Operating income Operating costs
Australia 57,303,433.44 51,450,875.04 62,458,640.05 57,354,131.32
Africa 10,842,700.35 9,273,579.96 12,780,284.07 10,636,560.87
America 306,490,146.35 272,173,119.01 382,338,083.85 353,665,878.59
Europe 194,967,224.92 169,559,595.38 202,912,779.50 179,678,435.66
Asia 276,171,581.27 249,992,209.25 384,152,250.69 348,255,772.59
Total 845,775,086.33 752,449,378.64 1,044,642,038.16 949,590,779.03
100
(1) The revenue of sales from the top five customers
Customer Operating income 占公司全部 Operating income 的 Proportion (%)
First 118,650,453.62 13.52%
Second 109,517,294.40 12.48%
Third 56,502,474.11 6.44%
Fourth 48,720,139.98 5.55%
Fifth 39,971,897.21 4.55%
Total 373,362,259.32 42.54%
37. Business tax and surtax
Item Current overall tally Accumulated last year
Business tax 1,475,556.78 1,682,165.45
Education surtax 93,937.37 173,731.94
Urban maintenance and construction tax 108,671.50 88,101.27
Others 0.00 2,200.74
Total 1,678,165.65 1,946,199.40
38. Selling expenses
Item Current overall tally Accumulated last year
Export charges 17,122,067.99 18,671,576.44
Employee compensation 10,001,217.63 13,223,191.10
Contributory value -1,109,288.29 9,133,457.93
Sales commission and after-sales service
1,338,558.81 1,367,655.56
charges
Property lease fee 1,484,282.26 2,412,131.66
Travel expense 1,760,774.08 826,479.30
Advertising sales promotion cost 2,616,571.38 3,024,764.92
Office allowance 383,859.79 539,097.04
Traffic expense 416,778.45 550,451.70
Business entertainment 43,253.00 77,965.00
Repairs expense 33,842.83 417,973.89
Depreciation cost 63,073.94 98,165.55
Utility bills 42,896.87 90,005.63
Other expenses 95,983.80 496,090.71
Total 34,293,872.54 50,929,006.43
39. Administrative cost
Item Current overall tally Accumulated last year
R&D expenditure 30,687,843.84 35,058,310.24
Employee compensation 15,254,431.20 20,357,203.01
Amortization charges 6,536,462.17 6,367,552.02
Rental expense 8,516,499.93 14,372,106.52
Insurance expenses 593,301.54 1,066,747.47
Office allowance 2,812,130.24 2,299,218.65
Travel expense 1,076,864.78 2,426,999.11
Advisory fee 1,072,324.52 2,089,192.58
Repairs expense 2,836,636.89 1,526,054.51
101
Taxation expense 858,299.23 1,762,392.95
Business entertainment 112,704.89 368,457.62
Board of directors' expenses 398,897.78 402,784.87
Utility bills 708,700.75 960,728.66
Other expenses 3,384,728.60 2,455,122.42
Total 74,849,826.36 91,512,870.63
40. Financial expense
Item Current overall tally Accumulated last year
Interest expense 1,563,100.22 1,767,183.57
Less: Interest income 8,581,346.66 14,308,058.88
Less: Implemented financing income 972,346.12 706,488.20
Exchange gain or loss 10,699,858.51 168,456.42
Bank charges 1,160,280.76 1,227,315.27
Total 3,869,546.71 -11,851,591.82
41. Assets impairment loss
Item Current overall tally Accumulated last year
Bad debt loss 1,394,731.69 1,423,288.06
Loss on inventory valuation 1,385,604.80 2,968,215.85
Total 2,780,336.49 4,391,503.91
42. Gains and losses from changes in fair value
Source Current overall tally Accumulated last year
Trading financial assets 7,349,219.30 0.00
Including: gains from the changes in fair value of
7,349,219.30 0.00
derivative financial assets
Trading financial liabilities 0.00 -7,195,643.08
Including: Derivative financial liabilities 0.00 -7,195,643.08
Total 7,349,219.30 -7,195,643.08
43. Investment income
(1) List of investment income
Source Current overall tally Accumulated last year
Trading financial assets 3,466,924.99 5,111,481.74
Investment income from disposal of
42,720.64 0.00
subsidiaries
Other current assets-financial products 59,166.67 0.00
Others 7,533.00 7,062.00
Total 3,576,345.30 5,118,543.74
102
44. Non-operating gains
(1) Notes of non-operating gains
Item Current overall tally Accumulated last year
Total gains from disposal of non-current assets 1,765,239.78 1,667,049.84
Including: Gains from disposal of fixed assets 1,765,239.78 1,667,049.84
Government grants 2,430,845.00 434,095.56
Others 513,588.23 610,429.92
Total 4,709,673.01 2,711,575.32
(2) List of government grants
Current overall Accumulated last
Item Source unit approval documents
tally year
Fujian Province
Subsidies for export letter China Exports & Credit Insurance
884,368.00 -258,946.44 Financial
guarantees Corporation Fujian Branch
Bureau
Innovation grants for Zhangzhou
provincial innovative 100,000.00 Province Financ Zhangcaijiao [2012] No. 63
enterprise ial Bureau
Zhangzhou
Provincial science and
50,000.00 Province Minzheng [2011] No.11
technology award
Financial Bureau
Zhangzhou
Special funds for patent 124,530.00 20,000.00 Province Zhangzhi [2013] No.2, No.8
Financial Bureau
Fujian Province
Foreign
Subsidies for exhibition 8,400.00 ZS120101
Investment
Service Center
Commodities export base
Zhangzhou
developmental project 150,000.00 Province Zhangzhou (ex) zhi [2013] No.7
subsidies Financial Bureau
Zhangzhou
Subsidies for increase of
171,947.00 405,692.00 Province Zhangzhengfamingdian [2013] No.1
power consumption
Financial Bureau
Zhangzhou
Free tuition for secondary
208,950.00 Province Mincaijiao [2011] No. 74
school
Financial Bureau
Zhangzhou
Subsidies for industrial
1,000,000.00 Province Zhangcaijiao [2012] No. 62
design
Financial Bureau
Total 2,430,845.00 434,095.56
45. Non-operating expenses
Item Current overall tally Accumulated last year
Loss on disposal of non-current assets 157,115.25 1,125.22
Including: Loss on disposal of fixed assets 157,115.25 1,125.22
Losses on scrap of fixed assets 29,032.16 1,147,955.34
Penalty expense 17,053.57 100,025.25
Spending on public welfare donations 482,944.00 0.00
Others 140,290.14 201,345.62
Total 826,435.12 1,450,451.43
103
46. Income tax expense
Item Current overall tally Accumulated last year
Current income tax expenses 15,674.22 8,701.09
Deferred income tax charge 1,123,768.60 150,000.28
Total 1,139,442.82 158,701.37
47. Calculation procedure of basic earnings per share and diluted earnings per share
Reporting period Same period of last year
Profits for the reporting period
Basic EPS Diluted EPS Basic EPS Diluted EPS
Net profits attributable to ordinary 0.06 0.06 -0.10 -0.10
Net profits attributable to ordinary shareholders (excl.
0.00 0.00 -0.10 -0.10
extraordinary gains or losses)
Basic EPS==P0÷S
S=S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0-Sk
Of which: P0 refers to net profit attributable to shareholders holding ordinary shares or net profit attributable to
shareholders holding ordinary shares after deducting non-recurring gains and losses; S refers to weighted average
number of ordinary shares issued out; S0 refers to total number of shares at the period-begin; S1 refers to the
number of shares increased due to transferring capital reserve into share capital or dividend distribution of shares
during the reporting period; Si refers to the number of shares increased due to issuance of new shares or debt for
equity swap during the reporting period; Sj refers to the number of shares decreased due to stock repurchase
during the reporting period; Sk refers to the number of split-share during the reporting period; M0 refers to the
number of months during the reporting period; Mi refers to the number of months from the next month to the end
of the reporting period for increase of shares; Mj refers to the number of months from the next month to the end of
the reporting period for decrease of shares.
Diluted EPS =P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+ weighted average amount of ordinary shares increased due
to warrant, share options, convertible bonds, etc.)
Of which, P1 refers to net profit attributable to shareholders holding ordinary shares or net profit attributable to
shareholders holding ordinary shares after deducting non-recurring gains and losses. The Company shall consider
all influence on potential diluted interests of ordinary shares when the Company calculated diluted earnings per
share, till to minimum diluted EPS.
48. Other comprehensive income
Item Current overall Accumulated last
tally period
1. Profits/(losses) from available-for-sale financial assets 0.00 0.00
Less: Effects on income tax generating from available-for-sale financial assets 0.00 0.00
Net amount transferred into profit and loss in the current period that recognized into other
comprehensive income in prior period 0.00 0.00
Subtotal 0.00 0.00
2. Interests in the investee entities’ other comprehensive income as per equity method 0.00 0.00
Less: Effects on income tax generating from the interests in the investee entities’ other
comprehensive income as per equity method 0.00 0.00
104
Net amount transferred into profit and loss in the current period that recognized into other
comprehensive income in prior period 0.00 0.00
Subtotal 0.00 0.00
3. Profits/(losses) from cash flow hedging instrument 0.00 0.00
Less: Effects on income tax generating from cash flow hedging instrument 0.00 0.00
Net amount transferred into profit and loss in the current period that recognized into other
comprehensive income in prior period 0.00 0.00
The adjustment value that is the converted initial recognition amount of arbitrage
project 0.00 0.00
Subtotal 0.00 0.00
4. Converted amount of foreign currency financial statements 2,635,820.49 1,349,983.16
Less: Net value of disposal of oversea operations that recognized into current profit
and loss 0.00 0.00
Subtotal 2,635,820.49 1,349,983.16
5. Others 0.00 0.00
Less: Effects on income tax generating from the others that included into other
comprehensive income 0.00 0.00
Net amount transferred into profit and loss in the current period that recognized into other
comprehensive income in prior period 0.00 0.00
Subtotal 0.00 0.00
Total 2,635,820.49 1,349,983.16
49. Notes of Cash Flow Statement
(1) Other cash received relevant to operating activities
Item Current overall tally Accumulated last year
Deposit 4,653,300.00 1,319,819.35
Income from rental 21,208,425.02 14,094,642.07
Interest income 8,564,975.98 11,361,011.57
Government grants 2,430,845.00 1,143,604.00
Others 14,294,440.27 12,655,584.13
Total 51,151,986.27 40,574,661.12
(2) Other cash paid relevant to operating activities
Item Current overall tally Accumulated last year
Compensation for technological knowledge 0.00 3,725,389.14
Bank charges 1,160,280.76 1,227,315.27
Purchase and sales commission 2,360,610.76 784,654.73
Operation expenses and other items in administration
89,833,794.41 173,266,336.33
expenses
Donate and others 499,997.57 100,025.25
Total 93,854,683.50 179,103,720.72
(3) Other cash received relevant to investment activities
Item Current overall tally Accumulated last year
Payment of investment in financial products 70,000,000.00 0.00
Total 70,000,000.00 0.00
105
(4) Other cash received relevant to financing activities
Item Current overall tally Accumulated last year
Money lending of related party 158,789,800.00 244,582,470.90
Total 158,789,800.00 244,582,470.90
(5) Other cash payments relating to financing activities
Item Current overall tally Accumulated last year
Cash paid for the combination of entities
0.00 39,811,905.00
under common control
Money lending of related party 0.00 125,561,715.00
Total 0.00 165,373,620.00
50. Appendix of Cash Flow Statement
(1) Appendix of Cash Flow Statement
Supplemental information Current overall tally Accumulated last year
Reconciliation of net profit to net cash flows generated from operating
activities
Net profit 11,379,048.09 -25,893,398.92
Add: Provision for impairment of assets 2,780,336.49 4,391,503.91
Depreciation of fixed assets, of oil-gas assets, of productive biological
31,358,473.72 39,535,785.94
assets
Amortization of intangible assets 794,379.54 1,163,945.14
Amortization of long-term deferred expense 951,819.48 1,291,742.90
Losses on disposal of property, plant and equipment, intangible assets
-1,608,124.53 -1,665,924.62
and other long-term assets (gains: negative)
Loss on retirement of fixed assets (gains: negative) 29,032.16 1,147,955.34
Loss on fair value change (gains: negative) -7,349,219.30 7,195,643.08
Financial cost (gains: negative) 12,852,007.01 1,229,151.79
Investment loss (gains: negative) -3,533,624.66 -5,118,543.74
Decrease in deferred income tax assets (gains: negative) 76,003.14 150,000.28
Increase in deferred income tax liabilities (decrease: negative) 1,084,661.44 0.00
Decrease in inventory (gains: negative) 28,225,419.19 30,519,780.10
106
Decrease in accounts receivable from operating activities (gains:
67,706,472.81 127,472,860.71
negative)
Increase in payables from operating activities (decrease: negative) -208,183,230.06 -227,986,101.28
Net cash flows generated from operating activities -63,436,545.48 -46,565,599.37
Investing and financing activities that do not involving
cash receipts and payment:
Conversion of debt into capital
Net increase in cash and cash equivalents
Closing balance of cash 920,204,606.38 1,030,890,983.86
Less: Opening balance of cash 759,361,575.52 706,132,122.10
Net increase in cash and cash equivalents 160,843,030.86 324,758,861.76
(2) Information about acquisition or disposal of subsidiary and other business units in the reporting
period
Occurred in same period of last
Supplementary Information Occurred in reporting period
year
I. Information about acquisition of subsidiaries and other business
-- --
units:
1. Price of the acquisition of subsidiaries and other business units
39,811,905.00
2. Cash and cash equivalents paid for the acquisition of
subsidiaries and other business units
Less: Cash and cash equivalents held by subsidiaries and
other business units 8,650,355.33
3. Net cash paid for the acquisition of subsidiaries and other
business units 31,161,549.67
4. Net assets from the acquisition of subsidiaries 29,819,283.95
Current assets 39,018,387.19
Non-current assets 51,997,367.76
Current liabilities 61,151,346.28
None current liabilities 45,124.72
II. Information about disposal of subsidiaries and other business
-- --
units
1. Price of the disposal of subsidiaries and other business units 99,000.00
2. Cash and cash equivalents received from the disposal of
99,000.00
subsidiaries and other business units
Less: Cash and cash equivalents held by subsidiaries and
0.00
other business units
3. Net cash received from the disposal of subsidiaries and other
99,000.00
business units
4. Net assets from the disposal of subsidiaries 0.00
Current assets 0.00
Non-current assets 0.00
Current liabilities 0.00
None current liabilities 0.00
107
(3) Composition of cash and cash equivalents
Item 30 June 2013 31 Dec 2012
1. Cash 920,204,606.38 759,361,575.52
Including: cash in hand 714,518.54 833,947.68
Bank deposit can be used for payment at any time 919,490,087.84 758,527,627.84
Other monetary funds can be used for payment at any time 0.00 0.00
Deposits in central bank can be used for payment 0.00 0.00
Deposits in other banks 0.00 0.00
Call loans to banks 0.00 0.00
2.Cash equivalents 0.00 0.00
Including: bond investments due within three months 0.00 0.00
3. Closing balance of cash and cash equivalents 920,204,606.38 759,361,575.52
VI. Accounting treatment of asset securitization business: none
VII. Relationship and Related Party Transactions
1. Particulars about the parent company:
1. Particulars about the control relationship of the parent company
Name of parent Enterprise Registrati Legal Business
Relationship Registered capital
company nature on place representative nature
STAR Ultimate Manufacturi
COMGISTIC Joint stock ng, selling TWD2,686,000
holding Taiwan Yang Wenfang
CAPITAL CO., company electrical thousand
LTD. company appliances
continued:
Proportions of Proportions of Ultimate
parent company’s parent company’s controller
Name of parent company Organization code
shareholding to voting right to the of the
the company (%) company (%) company
STAR COMGISTIC CAPITAL CO., 43.64% 45.42% Wu Cankun 28986660
LTD.
2. Subsidiaries of the Company
Proportio
Legal Proportion
Name of Registered Registered n of Organization
Type represent Business nature of voting
company place capital shares code
ative right (%)
held (%)
Small home
Controlling Jian 16,000 ten
TKL Zhangzhou appliance 75.00 75.00 73954770-9
subsidiary Derong thousand dollar
manufacturing
Subsidiary of Small home
Jian 500 ten thousa
TKN controlling Zhangzhou appliance 56.25 75.00 77067325-2
Derong nd yuan
subsidiary manufacturing
TKS Controlling Shanghai Jian Small home 4,000 ten 62.50 62.50 60729103-5
108
Proportio
Legal Proportion
Name of Registered Registered n of Organization
Type represent Business nature of voting
company place capital shares code
ative right (%)
held (%)
subsidiary Derong appliance thousand dollar
manufacturing
Non-enterprise
Secondary voc
units of Zhu 300 ten
LTC Zhangzhou ational educati 75.00 100.00 79176918-1
Chengde thousand yuan
controlling on
subsidiary
the sale
Subsidiary of
Jian 495 ten
STD controlling Shanghai of home 56.25 100.00 67455210-0
Derong thousand yuan
subsidiary
appliance
wholly-owned Zhu 500 ten thousa
TSX Xiamen travel business 100.00 100.00 67829338-8
subsidiaries Chengde nd yuan
Subsidiary of
Dai the sale of 3,000 ten thous
TSX3C controlling Xiamen 75.00 100.00 68525122-3
Huiyuan home appliance and yuan
subsidiary
Subsidiary of
Jian the sale of 2,800 ten thous
SCCX controlling Xiamen 75.00 100.00 55623112-X
Derong home appliance and yuan
subsidiary
Yingsheng Subsidiary of
Jian Investment and 13,599.30ten
Development controlling Hongkong 75.00 100.00
Derong trade thousand HKD
Co., Ltd. subsidiary
Subsidiary of Small home
Jian 1,750ten
TKI controlling Indonesia appliance 74.68 99.57
Derong thousand dollar
subsidiary manufacturing
3. Other related parties of the Company
Name Relationship Organization code
EUPA Industry Corporation Limited Shareholder 12959659-000-07-6
Fordchee Development Limited Shareholder 14676920-000-01-09-A
Fillman Investment Limited Shareholder 16269694-000-07-08-4
American CANKUN CO., LTD Same ultimate holding company
Tsann Kuen Japan Co., Ltd. Same ultimate holding company 0105-01-021064
The company directly controlled by the key
Thermaster Electronic (Xiamen) Ltd. 61201968-5
management and closed family members
STAR TRAVEL SERVICE CORP. Same ultimate holding company 80170076
Xiamen Star International Travel Service
Same ultimate holding company 80355209
Co., Ltd.
Xiamen Tsann Kuen Trading Co., Ltd Controlled by same actual controller 58126129-1
PT.TSANNKUEN INDONESIA Controlled by same actual controller
PT TSANNKUEN PROPERTY
Controlled by same actual controller
DEVELOPMENT INDONESIA
Fordchee Development Limited Controlled by same actual controller 1748378
The company directly controlled by the key
Rich Star Limited
management and closed family members
109
4. Related party transactions
(1) Purchase of goods, services received among the related-party
Current overall tally Accumulated last year
Content of
Name of Pricing principle
related Proportion in Proportion in
company of related parties
transaction Amount transactions of Amount transactions of
the same kind the same kind
Procurement of According to
Thermaster
raw materials contract price
Electronic 2.15
and mechanical signed by both 17,066,825.03 3.21 19,376,014.52
(Xiamen) Ltd.
parts parties
STAR Procurement of According to
COMGISTIC raw materials contract price
0.65
CAPITAL CO., and mechanical signed by both 2,627,119.41 0.49 5,829,975.84
LTD. parts parties
Total
19,693,944.44 3.70 25,205,990.36 2.80
(2) Statement of sales of goods and rendering of services
Current overall tally Accumulated last year
Content of
Name of Pricing principle of Proportion in Proportion in
related
company related parties Amount transactions of Amount transactions of
transaction
the same kind the same kind
According to
Tsann Kuen contract price
Sales of goods 36,873,729.50 4.36 70,085,341.71 6.97
Japan Co., Ltd. signed by both
parties
Tsann Kuen According to
(China) contract price
Sales of goods 0.00 0.00 142,435.90 0.01
Enterprise Co., signed by both
Ltd. parties
According to
Thermaster
contract price
Electronic Sales of goods 0.00 0.00 1,312.96 0.00
signed by both
(Xiamen) Ltd.
parties
According to
Xiamen Tsann
contract price
Kuen Trading Sales of goods 13,453,679.07 1.59 29,845,110.64 2.97
signed by both
Co.,Ltd
parties
Total 50,327,408.57 5.95 100,074,201.21 9.95
(3) Information of related-party lease
Rental income
Pricing basis
Category of the recognized in
Name of lessor Name of lessee Initial date Ending date for the rental
leased assets the reporting
income
period
Xiamen Tsann According to
Xiamen Tsann
Kuen (China) contract price
Kuen Trading House and land 16 Sept 2011 24 July 2015
Enterprise Co., signed by both 759,053.58
Co., Ltd
Ltd. parities
110
(4) Money lending of related-party
Name of related party Amount Initial date Ending date Notes
Borrowing
Fillman Investment Limited 4,000,000.00 2013.04.15 2014.04.14 dollar loan
EUPA Industry Corporation
9,400,000.00 2013.03.20 2014.03.19 dollar loan
Limited
Fordchee Development Limited 10,000,000.00 2013.03.01 2014.02.28 dollar loan
Fillman Investment Limited 1,000,000.00 2013.03.18 2013.12.31 dollar loan
Fillman Investment Limited 1,000,000.00 2013.04.24 2013.12.31 dollar loan
(5) Other related-party transaction
Current overall tally Accumulated last year
Proportion in Proportion in
Name of related party Transaction Contents
transactions d transactions
of the same of the same
Amount kind Amount kind
Payment
After-sale service
American CANKUN CO., LTD 0.00 0.00 144,679.93 100.00
cost(notes:1)
STAR COMGISTIC CAPITAL CO., Purchasing agent
111,505.63 100.00 290,007.92 100.00
LTD fee(notes:2)
Three packs of
Tsann Kuen Japan Co., Ltd. 122,165.26 0.11 4,942,860.04 24.82
cost(notes:3)
STAR TRAVEL NETWORK Accept
0.00 0.00 637,829.65 17.01
TRAVEL SERVICE CORP. service(notes:4)
Accept
STAR TRAVEL SERVICE CORP. 318,072.06 1,065,008.69 28.40
service(notes:4) 0.19
Purchase of fixed
PT.TSANNKUEN INDONESIA 139,478.16 0.01 0.00 0.00
assets
Total 691,221.11 7,080,386.23
Income
STAR TRAVEL NETWORK Rendering of service 0.00 0.00 2,835.50 0.07
TRAVEL SERVICE CORP. (notes:4)
STAR TRAVEL SERVICE CORP. Rendering of service 0.00 0.00 453,062.86 10.78
(notes:4)
Thermaster Electronic (Xiamen) Ltd. Rendering of service 0.00 0.00 94,419.00 2.25
(notes:4)
Xiamen Tsann Kuen Trading Co., Ltd Rendering of service 0.00 0.00 86,497.00 2.06
(notes:4)
1,500,000.0
Xiamen Tsann Kuen Trading Co., Ltd Rent 5.60 4,513,888.86 18.50
0
PT TSANNKUEN PROPERTY Sale of plant assets 50,808.92 0.01 0.00 0.00
DEVELOPMENT INDONESIA
1,550,808.9
Total 5,150,703.22
2
Notes 1: American CANKUN CO., LTD provides after-sale service for the Company and its subsidiaries in
the USA, and the Company and its subsidiaries would pay for the after-sale service fees of 102% according to the
actually happened related fees. Both parts would end up this agreement in 1 Jan 2013.
111
Notes 2: The Company and its subsidiaries authorize related company to purchase raw materials, molds and
equipments. The relevant agency fees would be paid of 110% of the actual happened operating fees.
Notes 3: The three packs of costs is the relevant fees that the Company’s subsidiaries paid for the issues of
quality to the related company about purchasing parts and finished goods.
Notes 4: Both of the Company and the related company offer non-exclusive agency service, to transact the
TCAP of travel business, and to agent service fees according to the actual quoted prices of orders requirements of
each batch.
5. Amounts due from/to related parties
Name of the item Related party 30 June 2013 31 Dec 2012
Accounts receivable 29,032,940.34 22,551,408.94
Tsann Kuen Japan Co., Ltd. 23,918,636.16 14,894,151.55
STAR COMGISTIC CAPITAL CO.,
5,114,304.18 7,657,257.39
LTD
Accounts receivable 9,681,017.26 13,003,303.65
Thermaster Electronic (Xiamen) Ltd. 9,189,924.17 11,110,626.59
STAR COMGISTIC CAPITAL CO.,
491,093.09 1,892,677.06
LTD
Other accounts payable 159,857,850.11 4,274,030.44
American CANKUN CO., LTD 0.00 127,099.16
Tsann Kuen Japan Co., Ltd. 623,105.87 715,594.51
Thermaster Electronic (Xiamen) Ltd. 0.00 22,500.00
STAR TRAVEL SERVICE CORP. 0.00 35,160.52
Xiamen Tsann Kuen Trading Co., Ltd 2,218,311.95 2,993,692.00
STAR COMGISTIC CAPITAL CO.,
70,589.36 379,984.25
LTD
Fillman Investment Limited 37,072,200.00 0.00
EUPA Industry Corporation Limited 58,079,780.00 0.00
Fordchee Development Limited 61,787,000.00 0.00
PT.TSANNKUEN INDONESIA 6,862.93 0.00
Deposit received 226,511.14 0.00
Thermaster Electronic (Xiamen) Ltd. 226,511.14 0.00
VIII. Contingency
Tsann Kuen Zhangzhou, one of the Company’s subsidiaries, and Xinda Motor Co., Ltd. (hereinafter refer to as
“Xinda Motor”) signed a product supply contract on 20 Jul. 2009, with thee valid period for the contract being
from 1 Jul. 2009 to 30 Jun. 2012. Both parties also signed the 2011 ED Procurement Contract of Tsann Kuen
112
Zhangzhou Enterprises Co., Ltd., the Special Agreement and other agreements, according to which Tsann Kuen
Zhangzhou would purchase products from Xinda Motor. Later, Tsann Kuen Zhangzhou rufused to pay for the
products and chose to terminate the contract due to quality problems found in Xinda Motor’s products. On 2 Nov.
2011, Xinda Motor filed a civil action against Tsann Kuen Zhangzhou to Zhangzhou Intermediate People’s Court,
asking the court to order Tsann Kuen Zhangzhou to pay US$479,089.06 to it for the part of the contract that had
been executed but not yet paid for, to bear the damages for overdue payment, and to continue to execute the
unexecuted contractual obligation (equivalent to a payment of US$189,423.25 for goods).
Tsann Kuen Zhangzhou filed a cross action on 8 Jan. 2012. Xinda Motor had caused serious economic loss and
reputation damage on Tsann Kuen Zhangzhou for the products it provided for Tsann Kuen Zhangzhou did not go
with the contract, due to which Tsann Kuen Zhangzhou produced products of ill quality, goods were returned and
orders were canceled. On that basis, Tsann Kuen Zhangzhou asked Zhangzhou Intermediate People’s Court to
terminate the contract between both parties and order Xinda Motor to pay to Tsann Kuen Zhangzhou a damage of
RMB100 million, and a compensation of RMB7,621,600.00.
Up to the reporting day, the outstanding amount due from Tsann Kuen Zhangzhou to Xinda Motor was
US479,089.06. The case is currently on the docket.
IX. Commitments
1. Rental contract entered into and under execution as well as its financial effect
Item 30 June 2013 31 Dec 2012
The lowest rental payment of irreversible operating
lease
House rental
The first year after the Balance Sheet Date 3,727 3,727
The second year after the Balance Sheet Date 3,727 3,727
The third year after the Balance Sheet Date 3,727 3,727
The follwowing years 134,165 137,892
Total 145,346 149,073
2. Fulfillment of previous commitments
Up to the reporting date, the above mentioned commitments were continued to execute and there was no
circumstance about violations of the above committments.
X. Notes of other significant events
1.Assets and liabilities calculated by fair value
Income from Withdrawn
Accrued fair value
fair value impairment
Item 31 Dec 2012 change that 30 June 2013
change in in reporting
recognized in equit
reporitng period period
Financial assets
1.Financial assets recogninzed
into current gains and losses by
0.00 0.00 0.00 0.00 0.00
calculated in fair value (excluded
derivative financial assets)
2. Derivative financial assets 0.00 6,985,964.05 0.00 0.00 6,985,964.05
113
Income from Withdrawn
Accrued fair value
fair value impairment
Item 31 Dec 2012 change that 30 June 2013
change in in reporting
recognized in equit
reporitng period period
3. Available-for-sale financial
0.00 0.00 0.00 0.00 0.00
assets
Subtotal of financial assets 0.00 0.00 0.00 0.00 0.00
Investment property 0.00 0.00 0.00 0.00 0.00
Productive biological assets 0.00 0.00 0.00 0.00 0.00
Others 0.00 0.00 0.00 0.00 0.00
Total 0.00 6,985,964.05 0.00 0.00 6,985,964.05
Financial liabilities
1.Derivative financial liabilities 363,255.25 -363,255.25 0.00 0.00 0.00
2. Foreign financial assets and financial liability
Income from
fair value Accrued fair value Withdrawn
Item 31 Dec 2012 change in change that impairment in 30 June 2013
reporitng recognized in equit reporting period
period
Financial assets
1.Financial assets
recogninzed into
current gains and losses
by calculated in fair
value (excluded
derivative financial
assets)
2. Derivative financial
assets
3. Loan and accounts
272,834,974.72 1,405,451.17 223,183,466.53
receivable
4. Available-for-sale
financial assets
5. Held-to-maturity
investment
Subtotal of financial
272,834,974.72 1,405,451.17 223,183,466.53
assets
Financial liabilities 157,381,973.03 0.00 284,459,403.19
3. Notes of mutual guarantee between the Company and its subsidiaries in reporting period: None
114
XI. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable
Item 30 June 2013 31 Dec 2012
Provision Propo Provision Propo
Proporti Proporti
Amount for bad rtion Amount for bad rtion
on (%) on (%)
debts (%) debts (%)
Accounts receivable with
significant single amount and
0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00%
individually withdrawn bad
debt provision
Accounts receivable for
which bad debt provisions are
made on the group basis
Aging group 10,707,565.09 98.89% 23,453.20 0.22% 4,102,975.24 98.34% 0.00 0.00%
Related group 119,672.93 1.11% 0.00 0.00% 69,268.54 1.66% 0.00 0.00%
Subtotal of the groups 10,827,238.02 100.00% 23,453.20 0.22% 4,172,243.78 100.00% 0.00 0.00%
Accounts receivable with
insignificant single amount
0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00%
but individually withdrawn
bad debt provision
Total 10,827,238.02 100.00% 23,453.20 0.22% 4,172,243.78 100.00% 0.00 0.00%
(2) In groups, the payable assets of provision for bad debts by aging analysis
30 June 2013 31 Dec 2012
Aging Proportion Provision for Proportion Provision for
Amount Amount
(%) bad debts (%) bad debts
Within 1 year 10,707,565.09 100.00% 23,453.20 4,102,975.24 100.00% 0.00
Including: 1 to
10,548,465.16 98.51% 0.00 4,102,975.24 100.00% 0.00
90 days
91 to 180 days 123,872.00 1.16% 14,987.89 0.00 0.00% 0.00
181 to 270 days
35,227.93 0.33% 8,465.31 0.00 0.00% 0.00
271 to 365 days 0.00 0.00% 0.00 0.00 0.00% 0.00
1 to 2 years 0.00 0.00% 0.00 0.00 0.00% 0.00
2 to 3 years 0.00 0.00% 0.00 0.00 0.00% 0.00
Total 10,707,565.09 100.00% 23,453.20 4,102,975.24 100.00% 0.00
(3) Information of shareholders with more than 5% (including 5%) of the voting shares of the Company
in accounts receivable in report period
□Applicable √Inapplicable
115
(4) Top five accounts receivable
Name of entity Relationship Amount Aging Proportion (%)
First Non-related party 6,768,900.00 Within 1 year 62.52%
Second Non-related party 1,085,479.00 Within 1 year 10.03%
Third Non-related party 1,066,238.00 Within 1 year 9.85%
Fourth Non-related party 1,022,134.60 Within 1 year 9.44%
Fifth Non-related party 225,000.00 Within 1 year 2.08%
Total 10,167,751.60 93.92%
2. Other accounts receivable
(1) Category
30 June 2013 31 Dec 2012
Item Provision Propo Provision Propo
Proporti Proporti
Amount for bad rtion Amount for bad rtion
on (%) on (%)
debts (%) debts (%)
Other accounts receivable with
significant single amount and
0.00 0.00% 0.00% 0.00 0.00% 0.00 0.00%
individually withdrawn bad debt
provision
Other accounts receivable for
which bad debt provisions are
made on the group basis
Aging group 137,699.39 100.00% 4,615.05 3.35% 240,853.53 100.00% 4,134.07 1.72%
Related group 0.00 0.00% 0.00% 0.00 0.00% 0.00 0.00%
Subtotal of the groups 137,699.39 100.00% 4,615.05 3.35% 240,853.53 100.00% 4,134.07 1.72%
Other accounts receivable with
insignificant single amount but
0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0.00%
individually withdrawn bad debt
provision
Total 137,699.39 100.00% 4,615.05 3.35% 240,853.53 100.00% 4,134.07 1.72%
(2) In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt
provision:
√Applicable □Inapplicable
30 June 2013 31 Dec 2012
Aging Proportion Provision for Proportion Provision for
Amount Amount
(%) bad debts (%) bad debts
Within 1 year 133,763.29 97.14% 678.95 237,892.38 98.77% 1,172.92
Including: 1 to 90
131,631.11 95.59% 0.00 233,206.44 96.83% 0.00
days
91 to 180 days 967.86 0.70% 96.79 1,164.32 0.48% 116.43
181 to 270 days 0.00 0.00% 0.00 3,521.62 1.46% 1,056.49
271 to 365 days 1,164.32 0.85% 582.16 0.00 0.00% 0.00
1 to 2 years 2,184.54 1.59% 2,184.54 2,961.15 1.23% 2,961.15
2 to 3 years 1,751.56 1.27% 1,751.56 0.00 0.00% 0.00
Total 137,699.39 100.00% 4,615.05 240,853.53 100.00% 4,134.07
116
(3) The other accounts receivable due from shareholders with more than 5% (including 5%) of the voting
shares of the Company in the reporting period
□Applicable √Inapplicable
(4) Notes of the major units of other payable assets
Name of entity Relationship Amount Aging Proportion (%)
Xiamen Souchuang Junhe Patent
Non-related party 20,902.00 Within 30 days 15.18%
Agency Co., Ltd.
Xiamen Zhoubaoyou COSCO
Non-related party 18,136.57 30 to 180 days 13.17%
LOGISTICS
Xiamen Islands Hotel co., LTD. Non-related party 15,000.00 Within 30 days 10.89%
Xiamen Yipin Fujian Wine Wine
Non-related party 14,055.54 Within 30 days 10.21%
industry co., LTD.
Total 68,094.11 49.45%
3. Long-term equity investments
(1) Notes
Explanations on
differences between
Accounting Initial investment Shareholding Voting right
The investee shareholding proportion
method cost Proportion Proportion
and voting right
proportion
ShanghaiTsann Kuen Enterprise Co.,
Cost method 194,545,872.18 62.50 62.50
Ltd.
Zhangzhou Tsann Kuen Enterprises
Cost method 921,914,701.56 75.00 75.00
Co., Ltd.
Xiamen Star International Travel
Cost method 5,000,000.00 100.00 100.00
Service Co., Ltd.
Xiamen Institute of Foreign
Cost method 40,000.00 1.48 1.48
Investment Enterprise
Total 1,121,500,573.74
Continued:
Withdrawal
amount of
Increase/ Provision for impairment
The investee 31 Dec 2012 30 June 2013 Cash bonus
decrease impairment loss provision in
the reporting
period
ShanghaiTsann Kuen Enterprise Co.,
194,545,872.18 0.00 194,545,872.18 130,646,542.91 0.00 0.00
Ltd.
Zhangzhou Tsann Kuen Enterprises
921,914,701.56 0.00 921,914,701.56 0.00 0.00 0.00
Co., Ltd.
Xiamen Star International Travel
5,000,000.00 0.00 5,000,000.00 0.00 0.00 0.00
Service Co., Ltd.
Xiamen Institute of Foreign
40,000.00 0.00 40,000.00 0.00 0.00 7,533.00
Investment Enterprise
Total 1,121,500,573.74 0.00 1,121,500,573.74 130,646,542.91 0.00 7,533.00
117
4. Operating income and costs
(1) Operating income
Item Current overall tally Accumulated last year
Main business revenue 27,869,917.21 0.00
Other business revenue 7,576,194.98 5,678,593.69
Total 35,446,112.19 5,678,593.69
Cost of sales 22,768,892.12 0.00
Other cost of sales 2,411,159.04 2,575,647.75
Total 25,180,051.16 2,575,647.75
(2) Main business (Classified by product)
Current overall tally Accumulated last year
Item
Operating income Operating costs Operating income Operating costs
Catering and Cooking 6,182,380.83 4,936,382.81 0.00 0.00
Home helper 14,108,680.29 11,836,580.41 0.00 0.00
Tea/Coffee 7,054,358.34 5,627,339.05 0.00 0.00
Others 524,497.75 368,589.85 0.00 0.00
Total 27,869,917.21 22,768,892.12 0.00 0.00
(3) Main business (Classified by area)
Current overall tally Accumulated last year
Item
Operating income Operating costs Operating income Operating costs
Asia 27,869,917.21 22,768,892.12 0.00 0.00
Total 27,869,917.21 22,768,892.12 0.00 0.00
(4) Revenue of sales from the top five customers
Customers Operating income Proportion (%)
First 7,106,312.78 20.05%
Second 4,131,177.80 11.65%
Third 3,976,529.96 11.22%
Fourth 3,547,363.27 10.01%
Fifth 2,401,545.55 6.78%
Total 21,162,929.36 59.71%
5. Investment income
(1) List of investment income
118
Source Current overall tally Accumulated last year
Long-term equity investment income accounted by cost method 7,533.00 7,062.00
Long-term equity investment income accounted by cost method 0.00 0.00
Investment income arising from disposal of long-term equity
0.00 0.00
investments
Total 7,533.00 7,062.00
(2) Long-term equity investment income accounted by cost method
Reason for increase/decrease
Name of investee Current overall tally Accumulated last year
YoY
Xiamen Institute of Foreign Investment
7,533.00 7,062.00 None
Enterprise
Total 7,533.00 7,062.00
6. Supplemental information of Cash Flow Statement
Supplemental information Current overall tally Accumulated last year
1. Reconciliation of net profit to net cash flows generated from operations:
Net profit 6,599,285.59 638,884.09
Add: Provision for assets impairments 109,836.18 -613.09
Depreciation of fixed assets, oil and gas assets and productive biological assets 2,841,827.86 3,002,297.99
Amortization of intangible assets 218,254.92 235,676.63
Amortization of long-term deferred expense 170,149.02 158,149.02
Losses/gains on disposal of property, intangible asset and other long-term assets
(gains: negative) -702,653.94 -147,115.38
Losses/gains on scrapped of fixed assets (gains: negative) 0.00 0.00
Losses/gains from variation of fair value (gains: negative) 0.00 0.00
Financial cost (income: negative) -176,981.36 -36.01
Investment loss (gains: negative) -7,533.00 -7,062.00
Decrease in deferred tax assets (increase: negative) 0.00 0.00
119
Increase in deferred tax liabilities (decrease: negative) 0.00 0.00
Decrease in inventory (increase: negative) 2,416,142.22 0.00
Decrease in accounts receivable from operating activities (increase: negative) -7,287,880.12 -209,568.97
Increase in accounts payable from operating activities (decrease: negative) 1,082,143.36 -4,270,072.25
Net cash flows generated from operating activities 5,262,590.73 -599,459.97
2. Significant investing and financing activities without involvement of cash
receipts and payments
Debt converted into capital
3. Change of cash and cash equivalent:
Closing balance of cash 7,942,734.91 13,264,650.77
Plus: closing balance of cash equivalent 17,652,594.45 13,757,429.84
Less: opening balance of cash equivalents -9,709,859.54 -492,779.07
XII. Supplemental information
1. Notes of non-recurrent profit and loss in reporting period
Item Amount Notes
Loss and gains on disposal of non-current assets (Including
1,579,092.37
write-off part of the provision for asset impairment)
Tax rebates and cuts of ultra vires approval or without formal
approval
Governmental subsidy included in the current profits and losses(is
closely related with the business event, except for the governmental
2,430,845.00
subsidy that according to the national unity standard quota or the
quantitative regal assets)
Tax for the possession of funds from the non-financial business
Included in the current losses and gains
The quota of the Company receives from the subsidiaries, joint
ventures and cooperative enterprises of the costs of investment is
less than that of the gains produced from the investment which
enjoys net assets of fair value that recognized by the investee.
Exchange gains and losses of non-monetary assets
Gains and losses of agenting others of investment or managing
assets
Withdrawing impairment of assets owning of force majeure factors,
including suffer from natural disasters
Gains and losses of debt restructuring
Enterprise restructuring charges, for example, staffing costs costs of
integration
Gains and losses produced when exchanging prices unconscionable
at the fair that exceed the fair value
120
Item Amount Notes
The current net profits and losses produced when the subsidiar
ies combine under the same control from the beginning to the
combining date
Gains and losses produced from the contingency which have n
othing to do with the Company’s normal business operations
In addition to the valid hedging activity associated with the normal
operation of the Company, the changes in fair value through gains Mainly is the investment returns of the
or losses which arising from the holding trading financial assets and Selling of forward foreign exchange
10,875,310.96
the trading financial liabilities as well as the investment income that contracts, changes in fair value gains, other
earning from the disposal of trading financial assets, trading liquid assets income of financial products
financial liabilities and available-for-sale financial assets
The reversal of impairment of receivables of the individual
impairment test
Gains and losses from the external entrusted loans
Gains and losses for changes in fair value of investment property
resulting from the subsequent measure through the fair value model
The impact of a one-time adjustment of current gains and losses
according to the laws and regulations of tax, accounting and others
on current gains and losses
Trustee fee income earning from the entrusted management
Income and expenses of the other operation except the mentioned
-126,699.48
above
The other items of gains and losses conforming the definition of
42,720.64 Gains of the disposal of subsidiaries
non-recurring gains and losses
Less：the effect of income tax 2,100,136.68
the effect of minority interest (after tax) 2,983,074.85
Total 9,718,057.96
2. Net assets income rate and earnings per share
Unit: yuan
Earnings per share
Profits in reporting period ROEWA（%）
Basic EPS Diluted EPS
Net margins of the Company’s common stock holders 2.14% 0.06 0.06
Net margins of the Company’s common stock holders
0.15% 0.00 0.00
which has reduced non-recurring gains and losses
121
