2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
2014 SEMI-ANNUAL REPORT
August 2014
1
2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Section I. Important Reminders, Contents & Explanation
The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior
management staff of Tsann Kuen (China) Enterprise Co., Ltd. (hereinafter referred to as “the
Company”) warrant that this report is factual, accurate and complete without any false record,
misleading statement or material omission. And they shall be jointly and severally liable for that.
All directors attended the board session for reviewing this report.
The Company plans not to distribute cash dividends or bonus shares or turn capital reserve into
share capital.
Mr. Pan Zhirong, company principal, and Mr. Chen Zongyi, head of the accounting work & the
accounting division (head of accounting) jointly declare that the financial statements carried in this
report are factual, accurate and complete.
English Translation for Reference Only. Should there be any discrepancy between the two versions,
the Chinese version shall prevail.
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2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Contents
Section I. Important Reminders, Contents & Explanation .............................................. 2
Section II. Company Profile ........................................................................................... 5
Section III. Highlights of Accounting Data & Financial Indicators ................................ 6
Section IV. Report of the Board of Directors ................................................................. 9
Section V. Significant Events ....................................................................................... 17
Section VI. Change in Shares & Shareholders.............................................................. 24
Section VII. Preferred Shares........................................................................................ 26
Section VIII. Directors, Supervisors, Senior Management Staff & Employees ............ 27
Section IX. Financial Report......................................................................................... 27
Section X. Documents Available for Reference............................................................ 27
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2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Explanation
Term Contents
Xiamen Tsann Kuen, MCKB, Company, the
Refers to TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Company, TKC
Tsann Kuen Zhangzhou, TKL Refers to Tsann Kuen Zhangzhou Enterprise Co., Ltd.
Tsann Kuen Shanghai, TKS Refers to Tsann Kuen China (Shanghai) Enterprise Co., Ltd.
South Port Electronics, TKN Refers to Tsann Kuen (Zhangzhou) South Port Electronics Enterprise Co., Ltd.
Tsann Kuen Institute, LTC Refers to Tsann Kuen (Zhangzhou) Vocational Technical Institute
STD Refers to Shanghai Star Commerce & Trade Co., Ltd.
SCCX Refers to Xiamen Star Comgistic Capital Co., Ltd
East Sino Refers to East Sino Development Limited
SCI Refers to Pt.Star Comgistic Indonesia
Yuan Refers to RMB Yuan
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2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Section II. Company Profile
I. Basic information of the Company
Stock abbreviation MCKB Stock code 200512
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 厦门灿坤实业股份有限公司
Abbr. of the Chinese name of the Company 闽灿坤
English name of the Company TSANNKUEN(CHINA) ENTERPRISE CO. LTD
Abbr. of the English name of the Company TKC
Legal representative of the Company Pan Zhirong
II. Contact information
Company Secretary Securities Affairs Representative
Name Sun Meimei Xiong Jianlin
TSANN KUEN Industrial Park, Taiwanese TSANN KUEN Industrial Park, Taiwanese
Contact address
Investment Zone, Zhangzhou, Fujian Province Investment Zone, Zhangzhou, Fujian Province
Tel. 0596-6268161 0596-6268103
Fax 0596-6268104 0596-6268104
E-mail mm_sun@tkl.tsannkuen.com jl_xiong@tkl.tsannkuen.com
III. Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website address and email address of the
Company during the reporting period?
□ Applicable √ Inapplicable
2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the reporting period?
□ Applicable √ Inapplicable
3. Change of the registered information
□ Applicable √ Inapplicable
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2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Section III. Highlights of Accounting Data & Financial Indicators
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of any accounting policy or
correction of any accounting error?
□ Yes √ No
Unit: RMB Yuan
Same period of last
Major accounting data Reporting period YoY +/-（％）
year
Operating revenues 890,216,299.51 877,844,207.80 1.41
Net profit attributable to shareholders of the Company 14,857,989.76 10,425,680.85 42.51
Net profit attributable to shareholders of the Company
17,047,602.69 707,622.89 2,309.14
after deducting non-recurring gains and losses
Net cash flow from operating activities -33,079,939.03 -63,381,893.64 47.81
Basic EPS 0.08 0.06 33.33
Diluted EPS 0.08 0.06 33.33
Weighted average ROE (%) 2.82 2.12 0.70
As at the end of the As at the end of last
Major accounting data +/- (%)
reporting period year
Total assets 2,099,877,010.31 1,690,801,284.83 24.19
Owners’ equity attributable to shareholders of the
509,872,496.29 520,693,211.26 -2.08
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
□ Applicable √ Inapplicable
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards
□ Applicable √ Inapplicable
3. Reasons for accounting data differences under the domestic and overseas accounting standards
□ Applicable √ Inapplicable
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2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
III. Items and amounts of extraordinary gains and losses
Accumulative amount
Item Explanation
in the current period
Gains/losses on the disposal of non-current assets (including the offset part
984,987.08
of 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 1,913,721.00
amounts according 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
tradable financial assets and tradable financial liabilities and financial -12,768,052.50 changes, wealth management
assets available for sales except for effective hedging related with normal products and other current
businesses of the Company assets
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
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2014 Semi-annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Accumulative amount
Item Explanation
in the current period
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 5,180,367.26
Payments from customers
Other gain/loss items that meet the definition of an extraordinary gain/loss 1,285,415.02 that had been written off were
recovered.
Less: Income tax effects -1,190,531.80
Minority interests effects (after tax) -23,417.41
Total -2,189,612.93
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Section IV. Report of the Board of Directors
I. Business review for the reporting period
For the reporting period, the Company achieved operating revenues of RMB 890 million, up 1.41% over the same
period of last year, with net profit being RMB 15 million. The Company enhanced internal operation and
management, reduced procurement costs, optimized the production and sale processes and strictly controlled the
administrative and selling expenses, yielding a YoY growth of 42.51% on net profit.
According to the strategic goals set—focusing on main business, improving operational management and
expanding emerging market, with “cash and profit growth” as the highest guiding principal, customers’ needs as
the orientation and technological innovation and design integration as the core, the Company built a high-end
service mode featuring “high speed, low cost and effective solution”, created leading advantages in areas 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
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
Accumulative amount
Accumulative amount
Item in the same period of +/-% Main reasons for change
in the reporting period
last year
Operating revenues 890,216,299.51 877,844,207.80 1.41%
Operating costs 761,974,414.46 762,662,771.63 -0.09%
Selling expenses 34,383,454.76 34,293,872.54 0.26%
Administrative expenses 72,912,587.41 74,849,826.36 -2.59%
Exchange and interest incomes increased as
Financial expenses -11,216,974.35 3,869,546.71 -389.88%
RMB depreciated.
Income tax expenses 2,957,439.90 1,139,442.82 159.55% Deferred income tax assets were reversed.
R&D input 30,469,780.95 30,687,843.84 -0.71%
Net cash flows from operating
-33,079,939.03 -63,381,893.64 47.81% Payments to suppliers decreased.
activities
More wealth management products were
Net cash flows from investing
-1,181,899,628.49 -87,554,293.09 -1249.90% acquired and there was more limitation on
activities
term deposits.
Net cash flows from financing
539,659,463.51 322,007,671.55 67.59% Financings for export increased.
activities
Net increase in cash and cash
-670,308,694.60 160,843,030.86 -516.75%
equivalents
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Major changes to the profit structure or sources of the Company during the reporting period:
□ Applicable √ Inapplicable
Reporting period progress of the future development planning in the disclosed documents of the Company such as share-soliciting
prospectuses, offering prospectuses, asset reorganization reports, etc.:
□ Applicable √ Inapplicable
III. Breakdown of main business
Unit: RMB Yuan
Increase/decrease Increase/decrease Increase/decrease
of operating of operating of gross profit
Operating Gross profit
Item Operating costs revenues over costs over the rate over the
revenues rate (%)
the same period same period of same period of
of last year (%) last year (%) last year (%)
Classified by industry:
Classified
853,536,487.98 750,410,484.64 12.08% 0.92% -0.27% 1.05%
by industry:
Classified
853,536,487.98 750,410,484.64 12.08% 0.92% -0.27% 1.05%
by industry:
Classified by industry:
Gourmet
515,128,658.12 445,237,910.10 13.57% 5.36% 3.61% 1.47%
cooking
Home
248,061,429.17 228,197,976.09 8.01% -5.44% -5.65% 0.21%
assistant
Tea/coffee 68,460,128.01 61,248,739.87 10.53% -13.04% -12.55% -0.50%
Others 21,886,272.68 15,725,858.58 28.15% 38.50% 41.61% -3.51%
Total 853,536,487.98 750,410,484.64 12.08% 0.92% -0.27% 1.05%
Classified by region:
America 329,835,160.09 288,124,504.03 12.65% 7.62% 5.86% 1.45%
Asia 272,772,273.18 244,584,531.76 10.33% -1.23% -2.16% 0.85%
Europe 190,830,464.63 165,219,858.39 13.42% -2.12% -2.56% 0.39%
Australia 53,949,820.33 47,545,356.17 11.87% -5.85% -7.59% 1.66%
Africa 6,148,769.75 4,936,234.29 19.72% -43.29% -46.77% 5.25%
Total 853,536,487.98 750,410,484.64 12.08% 0.92% -0.27% 1.05%
IV. Core competitiveness analysis
□ Applicable √ Inapplicable
V. Investment analysis
1. Investments in equities of external parties
□ Applicable √ Inapplicable
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
2. Wealth management entrustment, derivative investments and entrustment loans
(1) Wealth management entrustment
√Applicable □Inapplicable
Unit: RMB Ten thousand Yuan
Related-party Impairment
Amount Payment Principal actually Predicted Actual gain/loss in
Name of trustee Relation transaction or Product variety Beginning date Ending date provision (if
entrusted determination recovered gain reporting period
not any)
Break-even
Huli CCB N/A No floating income 5,000 2013/12/20 2014/3/20 6.65% 5,000 N/A 81.99 70.91
product
Break-even
Xiamen
N/A No floating income 11,000 2014/1/15 2014/4/15 6.8% 11,000 N/A 187.00 187.00
International
product
Break-even
Shenzhen Ping’an N/A No floating income 500 2014/1/16 2014/12/3 8.0% 0 N/A 35.67 17.33
product
Break-even
Shenzhen Ping’an N/A No floating income 1,500 2014/1/16 2014/12/5 8.0% 0 N/A 107.67 52.00
product
Break-even
Shenzhen Ping’an N/A No floating income 1,500 2014/1/16 2014/12/9 8.0% 0 N/A 109.00 52.00
product
Break-even
Shenzhen Ping’an N/A No floating income 1,500 2014/1/16 2014/12/11 8.0% 0 N/A 109.67 52.00
product
Break-even
Shenzhen Ping’an N/A No floating income 1,500 2014/1/16 2014/12/15 8.0% 0 N/A 110.00 52.00
product
Break-even
Shenzhen Ping’an N/A No floating income 1,500 2014/1/16 2014/12/17 8.0% 0 N/A 111.67 52.00
product
Break-even
Xiamen
N/A No floating income 6,000 2014/2/17 2014/9/27 5.5% 0 N/A 203.50 0
International
product
Break-even
Xiamen
N/A No floating income 5,000 2014/3/21 2014/12/29 5.6% 0 N/A 220.11 0
International
product
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Related-party Impairment
Amount Payment Principal actually Predicted Actual gain/loss in
Name of trustee Relation transaction or Product variety Beginning date Ending date provision (if
entrusted determination recovered gain reporting period
not any)
Break-even
Xiamen
N/A No floating income 11,000 2014/4/16 2014/10/7 5.7% 0 N/A 303.05 0
International
product
Break-even
Xiamen
N/A No floating income 3,000 2014/6/23 2014/12/29 5.2% 0 N/A 81.90 0
International
product
Total 49,000 16,000 1,661.23 535.24
Source of the entrusted funds Self-owned funds
Cumulative overdue principals and gains 0
Lawsuit N/A
Disclosure date of the board announcement approving the wealth
2014/3/18
management entrustment
Disclosure date of the general meeting announcement approving the
2014/5/21
wealth management entrustment
(2) Derivative investments
√Applicable □Inapplicable
Unit: RMB Ten thousand Yuan
Related-pa
Type of Initial Opening Closing Proportion of the closing
Relati rty Beginning Impairment Actual gain/loss in
Operator derivative investment Ending date investment investment investment amount in the
on transaction date provision reporting period
investment amount amount amount Company’s closing net assets (%)
or not
Forward
Bank No No 121,125.89 1 Jan. 2014 30 Jun. 2014 95,896.14 77,417.25 151.84 -1,812.04
exchange
Total
Capital source for derivative investment Self-owned funds
Lawsuit N/A
Disclosure date of the board announcement
2013/3/12
approving the wealth management entrustment
Disclosure date of the general meeting
announcement approving the wealth management 2013/5/18
entrustment
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
1. Analysis on risks from holding of derivative products: gains or losses from difference between contracted exchange rate and market exchange rate on
value date.
2. Control measures:
(1) Principle: The purpose of the financial derivative operation is to avoid risks. The Company shall not conduct transactional operation for other
purposes than risk avoidance. The Company shall not conduct complex derivative trading above the actual operation needs and shall not speculate in
derivative trading with hedging as an excuse. The overall contractual amount for risk avoidance of the Company shall not exceed the summation of the
net risk exposure of the existing assets and liabilities and the net risk exposure of assets and liabilities arising from the operation of the Company in the
Analysis on risks and control measures of coming year.
derivative products held in the reporting period (2) Staff requirements: Personnel taking part in the investment shall all fully understand the risks of derivative investment and strictly execute the
(including but not limited to market risk, liquidity business operation and risk management mechanisms for derivative investment.
risk, credit risk, operation risk, law risk, etc.) (3) Operation standardization: Before making a derivative investment, the Company shall rationally equip itself with professional personnel for
investment decision-making, business operation, risk control, etc. It shall also inquire and compare among various markets and products. Besides, it
shall strictly control the variety and size of derivative investment and try to choose derivative trading on exchange as much as possible.
(4) Periodic evaluation: Derivative investments shall be evaluated at least twice for a month and the evaluation report shall be sent to a high-ranking
executive authorized by the Board of Directors. And a derivative investment report shall be sent to the Board of Directors annually. Each subsidiary
should only summit to the Board of Directors of the subsidiary.
(5) Loss limit: The investment loss on a single derivative and all the investment loss shall not exceed 20% of the total investment amount.
(6) Audit system: The audit department audits derivative product trading periodically and submits audit reports to relevant units.
(1) Gains and losses affected by completed transaction amount of derivative products was RMB 8.6478 million, and gain from undelivered transaction
Changes of market prices or fair values in the was RMB 26.7682 million in the reporting period, of which the rotation profits of the undelivered forward estimates of the investment derivatives was
reporting period of the invested derivatives. And the of RMB 21.1201 million;
analysis on the fair value of the derivatives should (2) The former contracted bank provided monthly sheets of estimated exchange rates for the undue contracted forward exchanges on the last trading day
include the specific use methods and the relevant of the month.
assumptions and parameters. (3) The profit and loss from fair value changes of the derivative was confirmed according to the difference between the contracted amount undue by the
month*the estimated exchange rate and the currency amount when bought in.
Whether significant changes occurred to the
Company’s accounting policy and specific There were no significant changes between the Company’s accounting policy and specific accounting principles of derivatives in th e reporting period
accounting principles of derivatives in the reporting and those in the last reporting period.
period compared to the previous reporting period
Special opinion from independent directors, sponsor The Company has carried out a strict internal assessment for th e financial derivative business and has established a corresponding supervision
or financial consultant on the Company’s mechanism. We are of the opinion that the financial derivative business conducted by the Company is fairly necessary in its routine operation and is in
derivatives investment and risk control compliance with relevant laws and regulations, with the risks controllable.
(3) Entrustment loans
□ Applicable √ Inapplicable
3. Use of raised funds
□ Applicable √ Inapplicable
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
4. Analysis to main subsidiaries and stock-participating companies
Unit: RMB Yuan
Operating Operating
Company name Company variety Industry Main products/services Registered capital Total assets Net assets Net profit
revenues profit
Tsann Kuen
Small home For details, see Note VI. Business
(Zhangzhou) Controlled
appliance combination and consolidated fin USD 160 million 2,457,102,378.28 1,266,962,415.84 862,438,262.13 14,677,484.39 17,496,448.18
Enterprise Co., subsidiary
manufacture ancial statements
Ltd.
Tsann Kuen
Small home For details, see Note VI. Business
(Shanghai) Controlled
appliance combination and consolidated fin USD 40 million 99,239,396.60 93,839,029.74 3,679,952.94 164,923.89 4,446,435.14
Enterprise Co., subsidiary
manufacture ancial statements
Ltd.
Pt. Star Subsidiary of a Home For details, see Note VI. Business
Comgistic controlled appliance combination and consolidated fin USD 17.5 million 102,454,363.22 61,563,120.62 24,079,496.50 -6,353,859.73 -6,739,559.45
Indonesia subsidiary manufacture ancial statements
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
5. Significant projects of investments with non-raised funds
□ Applicable √ Inapplicable
VI. Predict the operating results of Jan.-Sept. 2014
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the
next reporting period according to prediction, as well as explanations on the reasons
□ Applicable √ Inapplicable
VII. Explanation by the Board of Directors and the Supervisory Committee about the
“non-standard audit report” issued by the CPAs firm for the reporting period
□ Applicable √ Inapplicable
VIII. Explanation by the Board of Directors about the “non-standard audit report” of last
year
□ Applicable √ Inapplicable
IX. Implementation of profit allocation during the reporting period
Profit allocation plan implemented during the reporting period, especially execution and adjustment of the cash dividend plan and the
plan for turning capital reserve into share capital:
√ Applicable □ Inapplicable
For the details of Y2013 profits distribution, please refer to the see the “Announcement on Implementation of the Equity Distribution
for 2013” disclosed on Securities Times, Ta Kung Pao (HK) and http://www.cninfo.com.cn on 19 Jun. 2014, which had completed
the execution according to the prescription.
Special explanation of the cash dividend policy
Whether conformed with the regulations of the Articles of
association or the requirements of the resolutions of the Yes
shareholders’ meeting:
Whether the dividend standard and the proportion were definite
Yes
and clear:
Whether the relevant decision-making process and the system
Yes
were complete:
Whether the independent director acted dutifully and exerted the
Yes
proper function:
Whether the medium and small shareholders had the chances to
fully express their suggestions and appeals, of which their legal Yes
interest had gained fully protection:
Whether the conditions and the process met the regulations and
was transparent of the adjustment or altered of the cash dividend Yes
policy:
X. Pre-plan for profit allocation and turning capital reserve into share capital for the
reporting period
□ Applicable √ Inapplicable
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
XI. Particulars about researches, visits and interviews received in this reporting period
Main discussion and
Time of reception Place of reception Way of reception Visitor type Visitor materials provided by the
Company
Operation of the Company,
B-share policies, with no
28 Feb. 2014 Office By phone Individual Mr. Yu
written materials provided
by the Company
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Section V. Significant Events
I. Corporate governance
Company governance practice has no difference with requirements of relevant law and rules of Company Law and CSRC.
II. Significant litigations and arbitrations
√ Applicable □ Inapplicable
Amount (RMB Whether form
Results and Sentence Disclosure Disclosure
Lawsuit (arbitration) Ten Thousand into estimated Progress
influence execution date index
Yuan) liabilities
Events of the appeal
progress of the lawsuit
between the controlled
subsidiary of the Held the hearing on www.cninfo.c
430.49 No No result N/A 22 Feb. 2014
Company Zhangzhou 26 Mar. 2014 om.cn
Tsann Kuen and Xinda
Electromechanics Co.,
Ltd.
Events the controlled
Zhangzhou
subsidiary of the
Intermediate
Company Zhangzhou
People’s Court had www.cninfo.c
Tsann Kuen sued Xinda 370.30 No No result N/A 27 Dec. 2013
put on record and om.cn
Electromechanics Co.,
waited for the
Ltd. by another
hearing
prosecution
III. Media’s questions
□Applicable √Inapplicable
IV. Bankruptcy or reorganization events
□Applicable √Inapplicable
V. Assets transaction events
1. Purchase of assets
□Applicable √Inapplicable
17
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
2. Sales of assets
Unit: RMB Ten Thousand Yuan
Net profit Whether or
Ratio of the Relationship Whether or
contributed not the
net profits between the not the
to the Company Impact Prici Related-p creditor’s
contributed by transaction party ownership of Disclo Disclo
Transaction Disposal Transact from the to the ng arty right and
Assets sold the asset to the and the Company the asset sure sure
party date ion price period-begin compan prin transactio liabilities
Company to (applicable for involved has date index
to the y ciple n or not involved have
the total related-party been fully
disposal been fully
profits (%) transactions) transferred
date transferred
Tsann Kuen Base Under control of
Other d on Related
Enterprise 2014.01.24 10.01 1.17 1.17 0.08% the same actual Yes Yes
equipments the enterprise
Co., Ltd. controller
mar
HAVELLS Mould 2014.02.28 42.75 35.28 35.28 2.37% Non-relate Inapplicable
ket
d
Hard pric
Pinrui 2014.02.28 8.70 7.28 7.28 0.49% enterprise
equipments e,
Other and
Duobite 2014.02.28 0.64 0.55 0.55 0.04%
equipments settl
Other ed
Hailong 2014.02.28 1.20 1.03 1.03 0.07% acco www.
equipments
rdin 2014. cninfo
Other
Sungwon 2014.02.28 2.40 2.05 2.05 0.14% g 04.25 .com.c
equipments
cont n
Yuejia Molding
2014.03.31 6.50 1.34 1.34 0.09% ract
Electron equipments
Other sign
Yixin 2014.03.31 0.15 0.13 0.13 0.01% ed
equipments
Hard by
Yixin 2014.03.31 0.80 0.78 0.78 0.05% both
equipments
Hard parti
Fushun 2014.03.31 11.00 9.61 9.61 0.65% es
equipments
Bakelite
Huaruixing 2014.03.31 1.79 1.71 1.71 0.12%
equipments
Bakelite Inappl Inappl
Tu Yibin 2014.04.30 10.00 3.12 3.12 0.21%
equipments icable icable
Yuejia Other
2014.04.30 6.50 1.44 1.44 0.10%
Electron equipments
Molding
Yixin 2014.04.30 1.17 1.12 1.12 0.08%
equipments
Molding
Tu Yibin 2014.04.30 2.50 2.45 2.45 0.16%
equipments
18
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Net profit Whether or
Ratio of the Relationship Whether or
contributed not the
net profits between the not the
to the Company Impact Prici Related-p creditor’s
contributed by transaction party ownership of Disclo Disclo
Transaction Disposal Transact from the to the ng arty right and
Assets sold the asset to the and the Company the asset sure sure
party date ion price period-begin compan prin transactio liabilities
Company to (applicable for involved has date index
to the y ciple n or not involved have
the total related-party been fully
disposal been fully
profits (%) transactions) transferred
date transferred
Other
Pan Xibao 2014.04.30 0.50 0.48 0.48 0.03%
equipments
DARMON Electronic
2014.05.10 6.33 -0.21 -0.21 -0.01%
O equipments
Bakelite
Hewang 2014.05.31 6.45 0.73 0.73 0.05%
equipments
Bakelite
Huasheng 2014.05.31 1.00 0.98 0.98 0.07%
equipments
Haikun Mould 2014.05.31 1.00 0.98 0.98 0.07%
Hongyuan Mould 2014.05.31 5.37 4.98 4.98 0.34%
Other
Xindongbao 2014.05.31 0.20 0.17 0.17 0.01%
equipments
Other
Li Qinghua 2014.05.31 50.00 1.47 1.47 0.10%
equipments
Hard
Qiankun 2014.05.31 25.00 8.23 8.23 0.55%
equipments
Molding
Wankun 2014.05.31 4.00 0.96 0.96 0.06%
equipments
Wang Molding
2014.05.31 1.00 0.98 0.98 0.07%
Zhibiao equipments
Molding
Baifeng 2014.05.31 3.50 2.79 2.79 0.19%
equipments
DARMON Electronic
2014.06.23 2.74 -0.05 -0.05 0.00%
O equipments
Hongyuan Mould 2014.06.30 7.86 7.67 7.67 0.52%
Golden Hard
2014.06.30 2.50 2.44 2.44 0.16%
Lance equipments
Die casting
Yixin 2014.06.30 3.42 3.33 3.33 0.22%
equipments
Die casting
Kailianxing 2014.06.30 5.27 5.02 5.02 0.34%
equipments
Yang
Building 2014.06.30 46.70 43.11 43.11 2.90%
Xiaodong
Total 278.95 153.12 153.12 10.31%
19
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
3. Business combination
□Applicable √Inapplicable
VI. Implementation situation and influence of equity incentive plan of the Company
□Applicable √Inapplicable
VII. Significant related-party transactions
1. Related-party transaction relevant to routine operation
√Applicable □Inapplicable
Pricing Transaction Transaction Proportion
Settlement
Type of the Content of the principle of price(RMB amount in same Disclo Disclo
method of the Marke
Related party Relationship related-party related-party the Ten (RMB Ten kind of sure sure
related-party t price
transaction transaction related-party Thousand Thousand transactions date index
transaction
transaction Yuan) Yuan) (%)
Company directly
controlled by key Purchase of raw
Thermaster Electronic Purchase of
management personnel parts and 1,699.11 3.06
(Xiamen) Ltd. commodities
and their close family mechanical parts
members
Purchase of raw
STAR COMGISTIC Ultimate controlling Purchase of Based on the
parts and 199.33 0.36
CAPITAL CO.,LTD. company commodities market price www.
mechanical parts According to
and both 18 cninfo
Under the control of the the contract
TSANN KUEN JAPAN Sales of Sales of parts and parties abide N/A N/A Mar. .com.c
same ultimate controlling 583.29 0.68 signed by the
CO., LTD commodities finished products by the fair and 2014 n
company both parties
reasonable
STAR COMGISTIC Ultimate controlling Sales of Sales of parts and
principle 1,969.81 2.31
CAPITAL CO.,LTD. company commodities finished products
STAR COMGISTIC Ultimate controlling Revenue from Procurement agency
9.78 100.00
CAPITAL CO.,LTD. company service fee
Under the control of the
Xiamen Tsann Kuen
same ultimate controlling Provide service Workshop rent 75.00 2.80
Trading Co., Ltd.
company
Total 4,536.32
Details of large amount of sales returns Naught
The amount for the above related-party transactions were not exceed the predicted amount in the
As for the prediction on the total amount of routine related-party transactions to be occurred in the
Announcement on Prediction of the 2014 Annual Routine Related-party Transactions disclosed on Securities
reporting period by relevant types, the actual performance in the reporting period
Times, Hong Kong Ta Kung Pao and http://www.cninfo.com.cn dated 18 Mar. 2014.
20
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
The pricing principle of the related-party transaction of the Company was in accordance with the Pricing
Reason for significant difference between the transaction price and the market price Arrangement on 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
Unit: RMB Ten Thousand Yuan
Book value Assessed
Type of the Content of the Settlement method
Related Pricing principle of the of the value of Market Transfer Transaction Disclosu Disclosure
Relationship related-party related-party of the related-party
party related-party transaction transferred transferred fair value price profit or loss re date index
transaction transaction transaction
assets assets
Under the Based on the market
Tsann Kun Settled according to
same control Sales of the Sales of the price and both parties 2014.04. www.cninf
Enterprise the contract signed
of the actual fixed assets fixed assets abide by the fair and 8.84 N/A 10.01 10.01 1.17 25 o.com.cn
Co., Ltd. by the both parties
controlled reasonable principle
The reasons of the differences between transfer price and book
Naught
value
Impacts on the company’s operating results and financial
Naught
condition
3. Significant related-party transactions with joint investments
□Applicable √Inapplicable
4. Significant credits and liabilities with related parties
Was there any non-operating credit or liability with any related party?
□ Yes √No
5. Other significant related-party transactions
□Applicable √Inapplicable
VIII. Occupation of the Company’s funds for non-operating purposes by the controlling shareholder and its related parties
□ Applicable √ Inapplicable
21
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
IX. Significant contracts and execution
1. Particulars about trusteeship, contract and lease
(1) Trust
□Applicable √Inapplicable
(2) Contract
□Applicable √Inapplicable
(3) Lease
Notes of the leasing
Explanation of lease
The Proposal on Lease of Property & Related-party Transactions was reviewed and approved at the Fourth Session of the Board of
Directors for 2011 dated 13 Aug. 2011 and the First Special Shareholders ’ General Meeting for 2011 dated 16 Sept. 2011, for details,
please refer to the Announcement on Lease of Property & Related-party Transactions, Announcement on Resolutions Made at the
Fourth Session of the Board of Directors for 2011 and Announcement on Resolutions Made at the First Special Shareholders ’
General Meeting for 2011 disclosed on Securities Times, Hong Kong Ta Kung Pao and http://www.cninfo.com.cn.
The Proposal on Change of Property Leasing Agreement & Related-party Transaction was reviewed and approved at the Second
Special Session of the Board of Directors for 2012 dated 30 Jun. 2012 and the Second Special Shareholders’ General Meeting for
2012 dated 24 Jul. 2012, for details, please refer to the Announcement on Change of Property Leasing Agreement & Related-party
Transaction, Announcement on Resolutions Made at the Second Special Session of the Board of Directors for 2012 and
Announcement on Resolutions Made at the Second Special Shareholders’ General Meeting for 2012 disclosed on Securities Times,
Hong Kong Ta Kung Pao and http://www.cninfo.com.cn.;
The proposal on Lease of Property was received and approved at the First Session of the Board of Directors for 2013 dated 26 Jun.
2013 and for details, please refer to the Announcement on Lease of Property, Announcement on Resolutions Made at the First
Session of the Board of Directors for 2013 disclosed on Securities Times, Hong Kong Ta Kung Pao and http://www.cninfo.com.cn.
The lease whose profits reaching more than 10% of the total profits of the Company in the reporting period
√Applicable □Inapplicable
Unit: RMB Ten thousand Yuan
Involv Influence
Status ed Recogniti s of Related-p
Name of Initial Ending
Name of of amoun Rental on basis rental arty Relations
contract-o date of date of
leaser leased t of the income of rental income transactio hip
ut party leasing leasing
assets leased income on the n or not
assets Company
Tianyuan
Xiamen
(Xiame
Tsann
n) Accordin
Kun
Assets Buildi 2018-9-3 g to the
(China) 977 2013-7-1 577.60 38.87% No Naught
Manage ng 0 contract
Enterpris
ment price
e Co.,
Co.,
Ltd.
Ltd.
2. Guarantees provided by the Company
□Applicable √Inapplicable
3. Other significant contracts
□Applicable √Inapplicable
22
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
4. Other significant transaction
□Applicable √Inapplicable
X. Commitments made by the Company or shareholders holding over 5% of the Company’s shares in the
report period, or such commitments carried down into the report period
√Applicable □Inapplicable
Time of Period of
Commitment
Commitment Contents making commitme Fulfillment
maker
commitment nt
Commitment on share
reform
Commitment in the
acquisition report or the
report on equity changes
Commitments made upon
the assets replacement
Commitments made upon
first issuance or refinance
Based on the confidence on the continuous and
stable development of the Company, it committed The Company’s stocks
to increase the shareholding if the Company’s stock resumed trading on 31
price lower than HKD2.40 per share after the Dec. 2012, but the
implementation of the shares contraction and Company’s stock price
Within one
trading resumption, and it would increase no more hasn’t met the condition
year since
FILLMAN than 2% shares (i.e. 370,780,000 shares) of the total for shareholding
Other commitments made to 28 Dec. the date of
INVESTMEN shares issued by the Company within one year since increase since the date
minority shareholders 2012 initial
TS LIMITED the date of initial shareholding increase. If the plan of trading resumption,
shareholdi
on increasing holding 2% shares of the total shares Fillman Investments
ng increase
is completed, if the stock price hasn’t reached the Limited hasn’t
target price, it will perform relevant approval implemented the
procedures, and propose to CSRC on continuous shareholding increase
implementation of shareholding increase by plan.
exemption of offering.
Executed timely or not? Yes
Detailed reason for failing The Company’s stocks resumed trading on 31 Dec. 2012, but the Company’s stock price hasn’t met the condition for
to execute and the next plan shareholding increase since the date of trading resumption, Fillman Investments Limited hasn’t implemented the
(if any) shareholding increase plan.
XI. Particulars about engagement and disengagement of CPAs firm
Has this semi-annual report been audited?
□ Yes √ No
XII. Particulars about punishment and rectification
□Applicable √Inapplicable
XIII. Delisting risk due to violation of any law or regulation
□Applicable √Inapplicable
23
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
XIV. Other significant events
Coordinated with the adjustment of the Company’s operation strategy and stopped the operation business of the travel subsidiary.
Except for the Travel Controlling Company Xiamen Star Comgistic Capital Co., Ltd is handling the liquidation events the rest of the
travel entities had completed the liquidation.
Section VI. Change in Shares & Shareholders
I. Changes in shares
Unit: share
Before the change Increase/decrease in the change (+,-) After the change
Issuance Capitalization
Bonus
Number Proportion of new of public Other Subtotal Number Proportion
shares
shares reserve fund
I. Restricted shares 0 0.00% 0 0.00%
II. Non-restricted shares 185,391,680 100.00% 185,391,680 100.00%
1. Domestically listed
185,391,680 100.00% 185,391,680 100.00%
foreign shares
III. Total shares 185,391,680 100.00% 185,391,680 100.00%
Reasons for change in share capital
□Applicable √Inapplicable
Particulars about the approval of the change in share capital
□Applicable √Inapplicable
The transfer of change in share capital
□Applicable √Inapplicable
Change in 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
Changes of the Company’s share number and structure, as well as the corresponding changes in its asset-liability structure
□Applicable √Inapplicable
24
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
II. Total number of shareholders and their shareholding
Unit: share
Total number of common Total number of preferred share holders who
shareholders at the end of the 24,749 had resumed their voting right at the end of 0
reporting period the reporting period
Particulars about shares held by shareholders with a shareholding percentage over 5% or by the top ten shareholders holding shares
Increase/d Pledged or frozen shares
Total shares ecrease Number of Number of
Nature of Shareholding
Name of shareholder held at the during the restricted non-restricted Status of Number of
shareholder percentage
period-end reporting shares held shares held shares shares
period
FORDCHEE
DEVELOPMENT Foreign corporation 29.10% 53,940,530 53,940,530 N/A N/A
LIMITED
EUPA INDUSTRY
CORPORATION Foreign corporation 13.83% 25,633,718 25,633,718 N/A N/A
LIMITED
FILLMAN
INVESTMENTS Foreign corporation 2.49% 4,621,596 4,621,596 N/A N/A
LIMITED
Chen Yongquan Domestic individual 0.90% 1,668,747 1,668,747 N/A N/A
Xia Qianru Foreign individual 0.70% 1,299,545 1,299,545 N/A N/A
Chen Lijuan Foreign individual 0.55% 1,012,791 1,012,791 N/A N/A
Chen Yongqing Foreign individual 0.53% 981,598 981,598 N/A N/A
Ding Xiaolun Domestic individual 0.52% 956,818 956,818 N/A N/A
Zou Shilin Domestic individual 0.47% 863,003 863,003 N/A N/A
CSC SECURITIES
Foreign corporation 0.43% 789,212 789,212 N/A N/A
(HK) LTD.
Strategic investor or general corporation
becoming a top ten shareholder due to N/A
placing of new shares
The top three shareholders are the Company’s corporate controlling shareholders. It is unknown
Explanation on associated relationship
whether the other shareholders of tradable shares are related parties or acting-in- concert parties
or/and persons acting in concert among the
as prescribed in the Administrative Methods for Disclosure of the Shareholding Changes of the
above-mentioned shareholders
Listed Company’s Shareholders.
Particulars about shares held by the top ten shareholders holding shares not subject to trading moratorium
Number of non-restricted shares held at the Type of shares
Name of shareholder
period-end Type Number
FORDCHEE DEVELOPMENT LIMITED 53,940,530 53,940,530
EUPA INDUSTRY CORPORATION
25,633,718 25,633,718
LIMITED
FILLMAN INVESTMENTS LIMITED 4,621,596 4,621,596
Chen Yongquan 1,668,747 1,668,747
Domestically listed
Xia Qianru 1,299,545 foreign shares 1,299,545
Chen Lijuan 1,012,791 1,012,791
Chen Yongqing 981,598 981,598
Ding Xiaolun 956,818 956,818
Zou Shilin 863,003 863,003
CSC SECURITIES (HK) LTD. 789,212 789,212
25
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Explanation on associated relationship
The top three shareholders are the Company’s corporate controlling shareholders. It is unknown
or/and persons acting in concert among the
whether the other shareholders of tradable shares are related parties or acting-in- concert parties
top ten tradable shareholders and between
as prescribed in the Administrative Methods for Disclosure of the Shareholding Changes of the
the top ten tradable shareholders and the
Listed Company’s Shareholders.
top ten shareholders
Explanation on the top 10 shareholders
Naught
participating in the margin trading business
Whether the shareholders of a company conducted the transaction of repurchase under the agreement during the reporting period
□ Yea √ No
III. Change of the controlling shareholder or the actual controller
Change in controlling shareholder in reporting period
□Applicable √ Inapplicable
Change of the actual controller during the reporting period
□ Applicable √ Inapplicable
IV. Particulars on shareholding increase scheme during the reporting period proposed or
implemented by the shareholders and act-in-concert persons
□ Applicable √ Inapplicable
Section VII. Preferred Shares
I. Issue and listing of preferred shares during the reporting period
□ Applicable √ Inapplicable
II. Amount of preferred shares and the holding situation of the Company
□ Applicable √ Inapplicable
III. Repurchase or transfer of preferred shares
1. Purchase of preferred shares
□ Applicable √ Inapplicable
2. Transfer of preferred shares
□ Applicable √ Inapplicable
IV. Resume and execution of the voting rights of preferred shares
□ Applicable √ Inapplicable
V. Accounting policy and reasons adopted of preferred shares
□ Applicable √ Inapplicable
26
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Section VIII. Directors, Supervisors, Senior Management Staff & Employees
I. Changes in shareholding of directors, supervisors and senior management staff
□ Applicable √ Inapplicable
II. Change of directors, supervisors and senior management staff
√Applicable □Inapplicable
Name Position Type Date Reason
Pan Zhirong Chairman Elected
Tan Zichang Managing Director Elected
Tang Jinmu Independent Director Elected Qualitative and quantitative of the
20 May 2014
Bai Shaoxiang Independent Director Elected Board of Directors
Lu Jianxin Independent Director Left as expired
Ge Xiaoping Independent Director Left as expired
Section IX. Financial Report
I. Auditor’s Report
The auditor’s report had not audited.
II. Financial report (attached)
1. Balance sheet
2. Income statement
3. Cash flow statement
4. Statement of Change in Owners’ Equity
5. Notes to the Financial Statements
Section X. Documents Available for Reference
1. Text of Semi-annual Report 2014 signed and sealed by the Board of Directors of the Company.
2. Financial statements signed and sealed by legal representative, principal of accounting work, and manager of finance department.
3. In the reporting period, all texts and originals of the Company’s documents and public notices have been publicly disclosed in
China Securities Journal, Hong Kong Ta Kung Pao and www.cninfo.com.cn designated by CSRC.
Chairman of the Board of Directors: Pan Zhirong
8 Aug. 2014
27
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
1. Consolidated balance sheet
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 1,060,646,603.55 834,088,959.68
Settlement reserves
Intra-group lendings
Transactional financial assets 21,120,100.00
Notes receivable 2,792,866.00 2,467,447.00
Accounts receivable 193,796,744.82 253,823,475.86
Accounts paid in advance 5,811,179.20 4,290,802.70
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract reserves
Interest receivable 8,020,524.99 110,833.33
Dividend receivable
Other accounts receivable 25,430,868.74 32,339,652.22
Financial assets purchased under agreements to resell
Inventories 211,016,266.78 209,824,098.90
Non-current assets due within 1 year
Other current assets 330,000,000.00 50,000,000.00
Total current assets 1,837,515,054.08 1,408,065,369.69
Non-current assets:
Loans by mandate and advances granted
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 40,000.00 40,000.00
Investing property 54,476,840.34 58,732,511.36
Fixed assets 165,830,240.13 173,152,964.50
Construction in progress 4,622,309.63 10,889,671.98
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 11,378,202.99 11,803,252.87
R&D expense
Goodwill
Long-term deferred expenses 4,909,381.44 4,355,866.63
Deferred income tax assets 19,036,570.79 23,761,647.80
Other non-current assets 2,068,410.91
Total of non-current assets 262,361,956.23 282,735,915.14
Total assets 2,099,877,010.31 1,690,801,284.83
Current liabilities:
Short-term borrowings 481,764,240.00 30,484,500.00
28
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Item Closing balance Opening balance
Borrowings from Central Bank
Customer bank deposits and due to banks and other
financial institutions
Intra-group borrowings
Transactional financial liabilities 5,648,071.00
Notes payable 7,745,858.91 30,577,887.89
Accounts payable 500,255,259.06 648,629,156.16
Accounts received in advance 18,637,100.79 10,431,654.59
Financial assets sold for repurchase
Handling charges and commissions payable
Employee’s compensation payable 36,626,638.25 40,748,328.96
Tax payable -809,567.82 -17,127,309.97
Interest payable 3,270,214.70 108,661.00
Dividend payable
Other accounts payable 191,525,702.08 69,376,770.31
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of securities
Payables for acting underwriting of securities
Non-current liabilities due within 1 year
Other current liabilities
Total current liabilities 1,244,663,516.97 813,229,648.94
Non-current liabilities:
Long-term borrowings
Bonds payable
Long-term payables
Specific payables
Projected liabilities
Deferred income tax liabilities 217,345.05 3,258,742.65
Other non-current liabilities 222,600.00 222,600.00
Total non-current liabilities 439,945.05 3,481,342.65
Total liabilities 1,245,103,462.02 816,710,991.59
Owners’ equity (or shareholders’ equity)
Share capital 185,391,680.00 185,391,680.00
Capital reserves 278,454,447.07 278,454,447.07
Less: Treasury stock
Specific reserves
Surplus reserves 11,495,983.58 11,495,983.58
Provisions for general risks
Retained profits 35,636,457.99 46,733,303.43
Foreign exchange difference -1,106,072.35 -1,382,202.82
Total equity attributable to owners of the Company 509,872,496.29 520,693,211.26
Minority interests 344,901,052.00 353,397,081.98
Total owners’ (or shareholders’) equity 854,773,548.29 874,090,293.24
Total liabilities and owners’ (or shareholders’) equity 2,099,877,010.31 1,690,801,284.83
Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
29
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
2. Balance sheet of the Company
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item Closing balance Opening balance
Current Assets:
Monetary funds 9,684,609.95 11,811,615.43
Transactional financial assets
Notes receivable 2,792,866.00 822,974.00
Accounts receivable 11,473,376.99 39,868,837.59
Accounts paid in advance 199,702.71 418,695.09
Interest receivable
Dividend receivable
Other accounts receivable 2,105,008.19 1,195,292.22
Inventories 5,423,835.43 4,346,896.79
Non-current assets due within 1 year
Other current assets
Total current assets 31,679,399.27 58,464,311.12
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 985,854,030.83 985,854,030.83
Investing property 46,121,763.22 48,731,726.97
Fixed assets 685,736.19 646,980.59
Construction in progress 92,700.00
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 103,249.63 313,667.95
R&D expense
Goodwill
Long-term deferred expenses 942,163.55 1,126,312.61
Deferred income tax assets 2,831,864.96 4,228,126.98
Other non-current assets 165,900.00
Total of non-current assets 1,036,704,708.38 1,040,993,545.93
Total assets 1,068,384,107.65 1,099,457,857.05
Current liabilities:
Short-term borrowings
Transactional financial liabilities
Notes payable
Accounts payable 42,204,065.00 87,479,703.39
Accounts received in advance 8,891,461.90 988,253.99
Employee’s compensation payable 1,830,506.23 1,175,146.87
Tax payable 3,153,625.14 956,841.14
Interest payable
30
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Item Closing balance Opening balance
Dividend payable
Other accounts payable 478,981,572.41 491,868,854.25
Non-current liabilities due within 1 year
Other current liabilities
Total current liabilities 535,061,230.68 582,468,799.64
Non-current liabilities:
Long-term borrowings
Bonds payable
Long-term payables
Specific payables
Projected liabilities
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 0.00 0.00
Total liabilities 535,061,230.68 582,468,799.64
Owners’ equity (or shareholders’ equity)
Paid-up capital (or share capital) 185,391,680.00 185,391,680.00
Capital reserves 271,485,181.40 271,485,181.40
Less: Treasury stock
Specific reserves
Surplus reserves 11,495,983.58 11,495,983.58
Provision for general risks
Retained profits 64,950,031.99 48,616,212.43
Foreign exchange difference
Total owners’ (or shareholders’) equity 533,322,876.97 516,989,057.41
Total liabilities and owners’ (or shareholders’) equity 1,068,384,107.65 1,099,457,857.05
Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
31
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
3. Consolidated income statement
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2014 Jan.-Jun. 2013
I. Total operating revenues 890,216,299.51 877,844,207.80
Including: Sales income 890,216,299.51 877,844,207.80
Interest income
Premium income
Handling charge and commission income
II. Total operating cost 863,422,750.23 880,134,519.38
Including: Cost of sales 761,974,414.46 762,662,771.63
Interest expenses
Handling charge and commission expenses
Surrenders
Net claims paid
Net amount withdrawn for the insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and associate charges 4,930,309.19 1,678,165.65
Selling and distribution expenses 34,383,454.76 34,293,872.54
Administrative expenses 72,912,587.41 74,849,826.36
Financial expenses -11,216,974.35 3,869,546.71
Asset impairment loss 438,958.76 2,780,336.49
Add: Gain/(loss) from change in fair value (“-” means loss) -26,768,171.00 7,349,219.30
Gain/(loss) from investment (“-” means loss) 14,000,118.50 3,576,345.30
Including: share of profits in associates and joint ventures
Foreign exchange gains (“-” means loss)
III. Business profit (“-” means loss) 14,025,496.78 8,635,253.02
Add: non-operating income 8,820,848.29 4,709,673.01
Less: non-operating expense 741,772.95 826,435.12
Including: loss from non-current asset disposal 2,627.18 157,115.25
IV. Total profit (“-” means loss) 22,104,572.12 12,518,490.91
Less: Income tax expense 2,957,439.90 1,139,442.82
V. Net profit (“-” means loss) 19,147,132.22 11,379,048.09
Including: Net profit achieved by combined parties before the combinations
Attributable to owners of the Company 14,857,989.76 10,425,680.85
Minority shareholders’ income 4,289,142.46 953,367.24
VI. Earnings per share -- --
(I) Basic earnings per share 0.08 0.06
(II) Diluted earnings per share 0.08 0.06
VII. Other comprehensive incomes 276,130.47 2,635,820.49
VIII. Total comprehensive incomes 19,423,262.69 14,014,868.58
Attributable to owners of the Company 15,134,120.23 13,061,501.34
Attributable to minority shareholders 4,289,142.46 953,367.24
Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
4. Income statement of the Company
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2014 Jan.-Jun. 2013
I. Total sales 42,607,992.64 35,446,112.19
Less: cost of sales 29,080,243.87 25,180,051.16
Business taxes and surcharges 666,158.20 449,925.76
Distribution expenses 2,999,669.89 2,296,965.36
Administrative expenses 5,578,182.60 1,867,215.18
Financial costs 272,108.26 -228,194.02
Impairment loss -1,498,177.31 109,836.18
Add: gain/(loss) from change in fair value (“-” means loss)
Gain/(loss) from investment (“-” means loss) 38,189,978.21 7,533.00
Including: income form investment on associates and joint
ventures
II. Business profit (“-” means loss) 43,699,785.34 5,777,845.57
Add: non-business income 20,923.16 821,707.94
Less: non-business expense 35,791.72 267.92
Including: loss from non-current asset disposal
III. Total profit (“-” means loss) 43,684,916.78 6,599,285.59
Less: income tax expense 1,396,262.02
IV. Net profit (“-” means loss) 42,288,654.76 6,599,285.59
V. Earnings per share -- --
(I) Basic earnings per share
(II) Diluted earnings per share
VI. Other comprehensive income
VII. Total comprehensive income 42,288,654.76 6,599,285.59
Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
5. Consolidated cash flow statement
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2014 Jan.-Jun. 2013
I. Cash flows from operating activities:
Cash received from sale of commodities and rendering of service 933,113,991.58 915,918,056.59
Net increase of deposits from customers and dues from banks
Net increase of loans from the central bank
Net increase of funds borrowed from other financial institutions
Cash received from premium of original insurance contracts
Net cash received from reinsurance business
Net increase of deposits of policy holders and investment fund
Net increase of disposal of tradable financial assets
Cash received from interest, handling charges and commissions
Net increase of intra-group borrowings
Net increase of funds in repurchase business
Tax refunds received 112,084,917.29 117,641,803.60
Other cash received relating to operating activities 50,222,647.25 51,151,986.27
Subtotal of cash inflows from operating activities 1,095,421,556.12 1,084,711,846.46
Cash paid for goods and services 863,645,276.78 917,266,347.87
Net increase of customer lendings and advances
Net increase of funds deposited in the central bank and amount
due from banks
Cash for paying claims of the original insurance contracts
Cash for paying interest, handling charges and commissions
Cash for paying policy dividends
Cash paid to and for employees 122,896,952.98 119,101,972.34
Various taxes paid 14,180,644.90 17,925,388.23
Other cash payment relating to operating activities 127,778,620.49 93,800,031.66
Subtotal of cash outflows from operating activities 1,128,501,495.15 1,148,093,740.10
Net cash flows from operating activities -33,079,939.03 -63,381,893.64
II. Cash flows from investing activities:
Cash received from withdrawal of investments 168,647,755.48 3,466,924.99
Cash received from return on investments 5,463,196.35 7,533.00
Net cash received from disposal of fixed assets, intangible assets
1,218,609.75 5,558,991.86
and other long-term assets
Net cash received from disposal of subsidiaries or other business
99,000.00
units
Other cash received relating to investing activities
Subtotal of cash inflows from investing activities 175,329,561.58 9,132,449.85
Cash paid to acquire fixed assets, intangible assets and other
20,362,851.60 26,686,742.94
long-term assets
Cash paid for investment 440,000,000.00 70,000,000.00
Net increase of pledged loans
Net cash received from subsidiaries and other business units
Other cash payments relating to investing activities 896,866,338.47
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Item Jan.-Jun. 2014 Jan.-Jun. 2013
Subtotal of cash outflows from investing activities 1,357,229,190.07 96,686,742.94
Net cash flows from investing activities -1,181,899,628.49 -87,554,293.09
III. Cash Flows from Financing Activities:
Cash received from capital contributions
Including: Cash received from minority shareholder investments
by subsidiaries
Cash received from borrowings 592,439,628.00 309,898,896.00
Cash received from issuance of bonds
Other cash received relating to financing activities 143,957,350.00 158,789,800.00
Subtotal of cash inflows from financing activities 736,396,978.00 468,688,696.00
Repayment of borrowings 143,526,470.00 130,435,800.00
Cash paid for interest expenses and distribution of dividends or
40,906,844.49 16,245,224.45
profit
Including: dividends or profit paid by subsidiaries to minority
shareholders
Other cash payments relating to financing activities 12,304,200.00
Sub-total of cash outflows from financing activities 196,737,514.49 146,681,024.45
Net cash flows from financing activities 539,659,463.51 322,007,671.55
IV. Effect of foreign exchange rate changes on cash and cash
5,011,409.41 -10,228,453.96
equivalents
V. Net increase in cash and cash equivalents -670,308,694.60 160,843,030.86
Add: Opening balance of cash and cash equivalents 834,088,959.68 759,361,575.52
VI. Closing balance of cash and cash equivalents 163,780,265.08 920,204,606.38
Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
6. Cash flow statement of the Company
Prepared by Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item Jan.-Jun. 2014 Jan.-Jun. 2013
I. Cash flows from operating activities:
Cash received from sale of commodities and rendering of service 73,432,284.15 27,480,016.97
Tax refunds received 1,109,625.87
Other cash received relating to operating activities 27,100,050.69 24,807,414.50
Subtotal of cash inflows from operating activities 100,532,334.84 53,397,057.34
Cash paid for goods and services 77,681,958.10 4,837,151.98
Cash paid to and for employees 3,793,394.55 2,773,131.19
Various taxes paid 2,247,632.14 1,435,032.29
Other cash payment relating to operating activities 30,839,863.59 39,034,499.31
Subtotal of cash outflows from operating activities 114,562,848.38 48,079,814.77
Net cash flows from operating activities -14,030,513.54 5,317,242.57
II. Cash flows from investing activities:
Cash received from retraction of investments
Cash received from return on investments 38,189,978.21 7,533.00
Net cash received from disposal of fixed assets, intangible assets and other
5,000.00 797,450.00
long-term assets
Net cash received from disposal of subsidiaries or other business units
Other cash received relating to investing activities
Subtotal of cash inflows from investing activities 38,194,978.21 804,983.00
Cash paid to acquire fixed assets, intangible assets and other long-term assets 321,135.90 43,000.00
Cash paid for investment
Net cash paid to acquire subsidiaries and other business units
Other cash payments relating to investing activities
Subtotal of cash outflows from investing activities 321,135.90 43,000.00
Net cash flows from investing activities 37,873,842.31 761,983.00
III. Cash Flows from Financing Activities:
Cash received from capital contributions
Cash received from borrowings
Cash received from issuance of bonds
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities 0.00 0.00
Repayment of borrowings
Cash paid for interest expenses and distribution of dividends or profit 25,954,835.20 15,758,292.80
Other cash payments relating to financing activities
Sub-total of cash outflows from financing activities 25,954,835.20 15,758,292.80
Net cash flows from financing activities -25,954,835.20 -15,758,292.80
IV. Effect of foreign exchange rate changes on cash and cash equivalents -15,499.05 -30,792.31
V. Net increase in cash and cash equivalents -2,127,005.48 -9,709,859.54
Add: Opening balance of cash and cash equivalents 11,811,615.43 17,652,594.45
VI. Closing balance of cash and cash equivalents 9,684,609.95 7,942,734.91
Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
36
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
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
Paid-up capital (or share Less: treasury Specific Minority interests Total owners’ equity
Capital reserve Surplus reserve General risk reserve Retained profit Others
capital) stock reserve
I. Balance at the end of the previous year 185,391,680.00 278,454,447.07 11,495,983.58 46,733,303.43 -1,382,202.82 353,397,081.98 874,090,293.24
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 185,391,680.00 278,454,447.07 11,495,983.58 46,733,303.43 -1,382,202.82 353,397,081.98 874,090,293.24
III. Increase/ decrease of amount in the year (“-” means decrease) -11,096,845.44 276,130.47 -8,496,029.98 -19,316,744.95
(I) Net profit 14,857,989.76 4,289,142.46 19,147,132.22
(II) Other comprehensive incomes 276,130.47 276,130.47
Subtotal of (I) and (II) 14,857,989.76 276,130.47 4,289,142.46 19,423,262.69
(III) Capital paid in and reduced by owners
1. Capital paid in by owners
2. Amounts of share-based payments recognized in owners’ equity
3. Others
(IV) Profit distribution -25,954,835.20 -12,877,215.93 -38,832,051.13
1. Appropriations to surplus reserves
2. Appropriations to general risk provisions
3. Appropriations to owners (or shareholders) -25,954,835.20 -12,877,215.93 -38,832,051.13
4. Other
(V) Internal carry-forward of owners’ equity
1. New increase of capital (or share capital) from capital public reserves
2. New increase of capital (or share capital) from surplus reserves
3. Surplus reserves for making up losses
4. Other
(VI) Specific reserve
1. Withdrawn for the period
2. Used in the period
(VII) Other 92,043.49 92,043.49
IV. Closing balance 185,391,680.00 278,454,447.07 11,495,983.58 35,636,457.99 -1,106,072.35 344,901,052.00 854,773,548.29
Unit: RMB Yuan
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Last year
Equity attributable to owners of the Company
Item
Paid-up capital Less: treasury Minority interests Total owners’ equity
Capital reserve Specific reserve Surplus reserve General risk reserve Retained profit Others
(or share capital) stock
I. Balance at the end of the previous year 185,391,680.00 278,454,447.07 6,120,201.82 20,797,991.70 -2,715,037.68 358,837,214.25 846,886,497.16
Add: retrospective adjustments due to business combinations under
the same control
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 185,391,680.00 278,454,447.07 6,120,201.82 20,797,991.70 -2,715,037.68 358,837,214.25 846,886,497.16
III. Increase/ decrease of amount in the year (“-” means decrease) 5,375,781.76 25,935,311.73 1,332,834.86 -5,440,132.27 27,203,796.08
(I) Net profit 47,069,386.29 7,257,218.73 54,326,605.02
(II) Other comprehensive incomes
Subtotal of (I) and (II) 47,069,386.29 7,257,218.73 54,326,605.02
(III) Capital paid in and reduced by owners
1. Capital paid in by owners
2. Amounts of share-based payments recognized in owners’ equity
3. Others
(IV) Profit distribution 5,375,781.76 -21,134,074.56 -13,307,306.29 -29,065,599.09
1. Appropriations to surplus reserves 5,375,781.76 -5,375,781.76
2. Appropriations to general risk provisions
3. Appropriations to owners (or shareholders) -15,758,292.80 -13,307,306.29 -29,065,599.09
4. Other
(V) Internal carry-forward of owners’ equity
1. New increase of capital (or share capital) from capital public reserves
2. New increase of capital (or share capital) from surplus reserves
3. Surplus reserves for making up losses
4. Other
(VI) Specific reserve
1. Withdrawn for the period
2. Used in the period
(VII) Other 1,332,834.86 609,955.29 1,942,790.15
IV. Closing balance 185,391,680.00 278,454,447.07 11,495,983.58 46,733,303.43 -1,382,202.82 353,397,081.98 874,090,293.24
Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
38
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
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 share Less: treasury
Capital reserve Specific reserve Surplus reserve General risk reserve Retained profit Total owners’ equity
capital) stock
I. Balance at the end of the previous year 185,391,680.00 271,485,181.40 11,495,983.58 48,616,212.43 516,989,057.41
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 185,391,680.00 271,485,181.40 11,495,983.58 48,616,212.43 516,989,057.41
III. Increase/ decrease of amount in the year (“-” means decrease) 16,333,819.56 16,333,819.56
(I) Net profit 42,288,654.76 42,288,654.76
(II) Other comprehensive incomes
Subtotal of (I) and (II) 42,288,654.76 42,288,654.76
(III) Capital paid in and reduced by owners
1. Capital paid in by owners
2. Amounts of share-based payments recognized in owners’ equity
3. Others
(IV) Profit distribution -25,954,835.20 -25,954,835.20
1. Appropriations to surplus reserves
2. Appropriations to general risk provisions
3. Appropriations to owners (or shareholders) -25,954,835.20 -25,954,835.20
4. Other
(V) Internal carry-forward of owners’ equity
1. New increase of capital (or share capital) from capital public
reserves
2. New increase of capital (or share capital) from surplus reserves
3. Surplus reserves for making up losses
4. Other
(VI) Specific reserve
1. Withdrawn for the period
2. Used in the period
(VII) Other
IV. Closing balance 185,391,680.00 271,485,181.40 11,495,983.58 64,950,031.99 533,322,876.97
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Unit: RMB Yuan
Last year
Item Paid-up capital (or share
Capital reserve Less: treasury stock Specific reserve Surplus reserve General risk reserve Retained profit Total owners’ equity
capital)
I. Balance at the end of the previous year 185,391,680.00 271,485,181.40 6,120,201.82 15,992,469.42 478,989,532.64
Add: change of accounting policy
Correction of errors in previous periods
Other
II. Balance at the beginning of the year 185,391,680.00 271,485,181.40 6,120,201.82 15,992,469.42 478,989,532.64
III. Increase/ decrease of amount in the year (“-” means decrease) 5,375,781.76 32,623,743.01 37,999,524.77
(I) Net profit 53,757,817.57 53,757,817.57
(II) Other comprehensive incomes
Subtotal of (I) and (II) 53,757,817.57 53,757,817.57
(III) Capital paid in and reduced by owners
1. Capital paid in by owners
2. Amounts of share-based payments recognized in owners’ equity
3. Others
(IV) Profit distribution 5,375,781.76 -21,134,074.56 -15,758,292.80
1. Appropriations to surplus reserves 5,375,781.76 -5,375,781.76
2. Appropriations to general risk provisions
3. Appropriations to owners (or shareholders) -15,758,292.80 -15,758,292.80
4. Other
(V) Internal carry-forward of owners’ equity
1. New increase of capital (or share capital) from capital public reserves
2. New increase of capital (or share capital) from surplus reserves
3. Surplus reserves for making up losses
4. Other
(VI) Specific reserve
1. Withdrawn for the period
2. Used in the period
(VII) Other
IV. Closing balance 185,391,680.00 271,485,181.40 11,495,983.58 48,616,212.43 516,989,057.41
Legal representative: Pan Zhirong Person-in-charge of the accounting work: Chen Zongyi Chief of the accounting division: Chen Zongyi
40
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Tsann Kuen (China) Enterprise Co., Ltd.
Annotation of 30 Jun. 2014
(All amounts are expressed, unless otherwise stated, in Renminbi (CNY).)
I. Company Profile
TsannKuen (China) Enterprise Co., Ltd. (hereafter “the Company or TKC”) was established in the People’s
Republic of China (“the PRC”) in 1988 as a wholly owned foreign investment enterprise, the Company named in
TsannKuen China (Xiamen) Ltd., firstly, invested by the Fordchee Co., Ltd., EUPA Industry Corporation Limited
and Fillman investment Co.,Ltd. . On 16 February 1993, with the approval of the Ministry of Foreign Trade and
Economic Co-operation, the Company was reorganized into a incorporated company and was renamed as
TsannKuen (China) Enterprise Co., Ltd. In June 1993, the Company issued 40,000,000 new shares pursuant to an
international placing and public offer and these new shares (“B shares”) were then listed on the Shenzhen Stock
Exchange on 30 June 1993. According to the “Intended Implementation of Share Reducing Proposal” of the 5th
extraordinary board of director of 2012 and the 3rd extraordinary shareholders’ general meeting of 2012, obtained
the consent from the Investment Promotion Bureau of Xiamen which is authorized by the Ministry of Commerce
and the approval documents ”The Approval by Investment Promotion Bureau of Xiamen to Consent the Capital
Reduction of TsannKuen (China) Enterprise Co., Ltd”(IPB audit [2012] NO. 698), as the base 1,112,350,077
shares of the total original share capital, for implementation of share reducing model that all registered
shareholders who was recorded on December 28th 2012 with the proportion 6:1 to reduce the shares. After the
implementation of share reducing model, total share capital was reduced from 1,112,350,077 shares to
185,391,680 shares of the company. Until 31 December 2013, the Company’s share capital is CNY 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 TsannKuen (China) Enterprise Co., Ltd. Shares Traded Sponsor of the
Approval”）, On 6 December 2006, the Company received the [2006] No.266 file “The notice of TsannKuen
(China) Enterprise Co., Ltd concerningthe Approval of non-listed Foreign Shares Traded” from China Securities
Regulatory Commission. The China Securities Regulatory Commission agreed 700,476,830 unlisted shares
(account for 62.97% of the share capital) hold by the Company’s shareholders, EUPA Industry Corporation
Limited, Fordchee Development Limited and Fillman Investments Limited to transfer into B shares. On 29
November 2007 these B shares could be listed and exercised on Shenzhen Stock Exchange. Up to 30 June 2014,
total B shares hold by the three legal shareholders (EUPA Industry Corporation Limited, Fordchee Development
Limited and Fillman Investments Limited) are 84,195,844 shares after the implementation of share reducing
model.( account for 45.42% of the share capital).
Legal representative: Pan Zhirong
Place of registration: No.88 Xinglong Road, Huli Industrial District, Xiamen, Fujian Province
The ultimate parent company of the Company is Star Comgistic Capital Co. Ltd. which found in Taiwan.
The Company operates within the electrical machinery and equipment manufacturing industry.
The approved business scope: the main business is to develop, manufacture and sell household appliances,
electronics, light industrial products, modern office supplies; design and manufacture moulds relevant to the
above products, sell the products of the Company at home and abroad, and provide after-sell services; engage in
wholesale, retail, import and outport of household appliances, electronics, electromechanical devices, office
supplies, kitchenware and prepackage food, and provide after-sell services. For the main business of the
subsidiaries see Note XI.
The Financial Report approved by the Board of the Directors of the Company and disclosed on 8 Aug. 2014.
II. Basis for preparation of the financial statements
The financial statements of company have been prepared on basis of going concern in conformity with Chinese
Accounting Standards for Business Enterprises and the Accounting Systems for Business Enterprises issued by
the Ministry of Finance of People’s Republic of China in February 2006, and Accounting Standards (order No.38
of the Ministry of Finance) and Compilation Rules for Information Disclosure by Companies Offering Securities
to the Public No.15 – General Provisions on Financial Reports (2010 Revision) issued by the China Securities
Regulatory Commission (CSRC).
According to the relevant accounting regulations in Chinese Accounting Standards for Business Enterprises, the
company has adopted the accrual basis of accounting. Except for certain financial instruments which are measured
by at fair value, the Company adopts the historical cost as the principle of measurement in the financial statements.
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Where assets are impaired, provisions for asset impairment are made in accordance with relevant requirements.
III. Statement of Compliance with Enterprise Accounting Standards
The financial statements of the company are recognized and measured in accordance with the regulations in the
Chinese Accounting Standards for Business Enterprises and they give a true and fair view of the financial position,
business result and cash flow of the Company as of 30 Jun. 2014. In addition, the financial statements of the
company comply, in all material respects, with the revised disclosing requirements for financial statements and
the Compilation Rules for Information Disclosure by Companies Offering Securities to the Public
No.15—General Provisions on Financial Reports (2010 Revision) issued by China Securities Regulatory
Commission (CSRC) in 2010.
IV. Important Accounting Principles and Accounting Estimates
1. Accounting period
The accounting period of the Company is classified as interim period and annual period. Interim period refers to
the reporting period shorter than a complete annual period. The accounting period of the Company is the calendar
year from January 1 to December 31.
2. Monetary Unit
Yuan (CNY) is the currency of the primary economic environment in which the Company and its domestic
subsidiaries operate. Therefore, the Company and its domestic subsidiaries choose CNY as their functional
currency, the overseas subsidiaries decide the HKD or USD as their functional currency in accordance with the
business in which currency of the primary economic environment. The Company adopts CNY to prepare its
functional statements.
3. Business combination
A business combination is a transaction or event that brings together two or more separate entities into one
reporting entity. Business combinations are classified into business combinations involving enterprises under
common control and business combinations not involving enterprises under common control.
(1) Business combination involving entities under common control
A business combination involving enterprises under common control is a business combination in which all of the
combining enterprises are ultimately controlled by the same party or parties both before and after the combination,
and that control is not transitory.
For a business combination involving enterprises under common control, the party that, on the combination date,
obtains control of another enterprise participating in the combination is the absorbing party, while that other
enterprise participating in the combination is a party being absorbed. Combination date is the date on which the
absorbing party effectively obtains control of the party being absorbed.
The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise being
combined at the combination date. The difference between the carrying amount of the net assets obtained and the
carrying amount of consideration paid for the combination (or the total face value of shares issued) is adjusted to
the capital premium (or share premium) in the capital reserve. If the balance of the capital premium (or share
premium) is insufficient, any excess is adjusted to retained earnings.
The cost of a combination incurred by the absorbing party includes any costs directly attributable to the
combination shall be recognized as an expense through profit or loss for the current period when incurred.
(2) Business combination involving entities not under common control
A business combination involving enterprises not under common control is a business combination in which all of
the combining enterprises are not ultimately controlled by the same party or parties both before and after the
business combination.
For a business combination not involving enterprises under common control, the party that, on the acquisition date,
obtains control of another enterprise participating in the combination is the acquirer, while that other enterprise
participating in the combination is the acquiree. Acquisition date is the date on which the acquirer effectively
obtains control of the acquiree.
For a business combination not involving enterprise under common control, the combination cost including the
sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities
42
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
issued by the acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services,
valuation and consultancy services etc and other associated administrative expenses attributable to the business
combination are recognized in profit or loss when they are incurred.
The transaction cost arose from issuing of equity securities or liability securities shall be initially recognized as
equity securities or liability securities.
The contingent consideration related to the combination shall be booked as combination cost at the fair value at
the acquisition date. If, within the 12 months after acquisition, additional information can prove the existence of
related information at acquisition date and the contingent consideration need to be adjusted, goodwill can be
adjusted.
Combination cost of the acquirer’s interest and identifiable net assets of the acquirer acquired through the business
combination shall be measured by the fair value at the acquisition date. Where the cost of combination exceeds
the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference shall be recognized
as goodwill. Where the cost of combination is less than the acquirer’s interest in the fair value of the acquiree’s
identifiable net assets, the difference shall be accounted for according to the following requirements: (i) the
acquirer shall reassess the measurement of the fair values of the acquiree’s identifiable assets, liabilities and
contingent liabilities and measurement of the cost of combination; (ii) if after that reassessment, the cost of
combination is still less than the acquirer’s interest in the fair values of the acquiree’s identifiable net assets, the
acquirer shall recognize the remaining difference immediately in profit or loss for the current period.
Where the temporary difference obtained by the acquirer was not recognized due to inconformity with the
conditions applied for recognition of deferred income tax, if, within the 12 months after acquisition, additional
information can prove the existence of related information at acquisition date and the expected economic benefits
on the acquisition date arose from deductible temporary difference by the acquiree can be achieved, relevant
income tax assets can be recognized, and goodwill offset. If the goodwill is not sufficient, the difference shall be
recognized as profit of the current period.
Apart from above, the differences shall be taken into profit or loss of the current period if the recognition of
deferred income tax assets is related to the combination.
For a business combination not involving enterprise under common control, which achieved in stages that
involves multiple exchange transactions, according to “The notice of the Ministry of Finance on the issuance of
Accounting Standards Interpretation No. 5” (CaiKuai [2012] No. 19) on the “package deal” criterion (see Note
4.4.2) , to judge the multiple exchange transactions whether they are the "package deal". If it belong to the
“package deal” in reference to the preceding paragraphs of this section and the Notes described in 4.10 “long-term
investment” accounting treatment, if it does not belong to the “package deal” to distinguish the individual
financial statements and the consolidated financial statements related to the accounting treatment:
In the individual financial statements, the total value of the book value of the acquiree's equity investment before
the acquisition date and the cost of new investment at the acquisition date, as the initial cost of the investment, the
acquiree's equity investment before the acquisition date involved in other comprehensive income, in the disposal
of the investment and other associated comprehensive income transferred to investment income.
In the combination financial statements, the equity interest in the acquiree previously held before the acquisition
date re-assessed at the fair value at the acquisition date, with any difference between its fair value and its carrying
amount is recorded as investment income. The other comprehensive income of the acquiree before the acquisition
date relating to the previously held interest in the acquiree is transferred to investment income.
4. Preparation of the consolidated financial statements
(1)The scope of consolidation
The scope of consolidation for the consolidated financial statements is determined on the basis of control. Control
is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its
operating activities. The scope of consolidation includes the Company and all of the subsidiaries. Subsidiary is an
enterprise or entity under the control of the Company.
(2) Preparation of the consolidated financial statements
The subsidiary of the Company is included in the consolidated financial statements from the date when the control
over the net assets and business decisions of the subsidiary is effectively obtained, and excluded from the date
when the control ceases.
For a subsidiary disposed of by the Company, the operating results and cash flows before the date of disposal (the
date when control is lost) are included in the consolidated income statement and consolidated statement of cash
flows, as appropriate. For a subsidiary disposed during the period, no adjustment is made to the opening balance
of the consolidated financial statements.
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
For a subsidiary acquired through a business combination not under common control, the operating results and
cash flows from the acquisition (the date when the control is obtained) are included in the consolidated income
statement and consolidated statement of cash flows, as appropriated; no adjustment is made to the opening
balance and comparative figures in the consolidated financial statements.
Where a subsidiary was acquired during the reporting period, through a business combination involving
enterprises under common control, the financial statements of the subsidiary are included in the consolidated
financial statements. The results of operations and cash flow are included in the consolidated balance sheet and
the consolidated income statement, respectively, based on their carrying amounts, from the date that common
control was established, and the opening balances and the comparative figures of the consolidated financial
statements are restated.
When the accounting period or accounting policies of a subsidiary are different from those of the Company, the
Company makes necessary adjustments to the financial statements of the subsidiary based on the Company’s own
accounting period or accounting policies. Where a subsidiary was acquired during the reporting period through a
business combination not under common control, the financial statements was reconciliated on the basis of the fair
value of identifiable net assets at the date of acquisition. Intra-Group balances and transactions, and any
unrealized profit or loss arising from intra-Group transactions, are eliminated in preparing the consolidated
financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Company are presented separately
in the consolidated balance sheet within shareholders’/ owners’ equity and net profit. Net profit or loss attributable
to minority shareholders in the subsidiaries is presented separately as minority interest in the consolidated income
statement below the net profit line item.
When the amount of loss for the current period attributable to the minority shareholders of a subsidiary exceeds
the minority shareholders’ portion of the opening balance of shareholders’/equity of the subsidiary, the excess is
allocated against the minority interests.
When the Company loses control of a subsidiary due to the disposal of a portion of an equity investment or other
reasons, the remaining equity investment is re-measured at its fair value at the date when control is lost. The
difference between 1) the total amount of consideration received from the transaction that resulted in the loss of
control and the fair value of the remaining equity investment and 2) the carrying amounts of the interest in the
former subsidiary’s net assets immediately before the loss of the control is recognized as investment income for
the current period when control is lost. The amount recognized in other comprehensive income in relation to the
former subsidiary’s equity investment is reclassified as investment income for the current period when control is
lost. The retained interest is subsequently measured according to the rules stipulated in the - “Chinese Accounting
Standards for Business Enterprises No.2 - Long-term equity investment” or “Chinese Accounting Standards for
Business Enterprises No.22 - Determination and measurement of financial instruments”. See Note 4.10 Long-term
equity investments and Note 4.7 Financial instruments for details.
The company through multiple transactions step deals with disposal of the subsidiary's equity investment until the
loss of control, need to distinguish between equity until the disposal of a subsidiary's loss of control over whether
the transaction is package deal. Terms of the transaction disposition of equity investment in a subsidiary, subject
to the following conditions and the economic impact of one or more of cases, usually indicates that several
transactions should be accounted for as a package deal:①these transactions are considered simultaneously, or in
the case of mutual influence made, ②these transactions as a whole in order to achieve a complete business results;
③the occurrence of a transaction depends on occurs at least one other transaction ; ④a transaction look alone is
not economical, but when considered together with other transaction is economical. If they does not belong to the
package deal, each of them separately, as the case of a transaction in accordance with “without losing control over
the disposal of a subsidiary part of a long-term equity investments“ (see Note 4.10.2, 4)) and “due to the disposal
of certain equity investments or other reasons lost control of a subsidiary of the original” (see previous paragraph)
principles applicable accounting treatment. Until the disposal of the equity investment loss of control of a
subsidiary of the transactions belonging to the package deal, the transaction will be used as a disposal of a
subsidiary and the loss of control of the transaction. However, before losing control of the price of each disposal
entitled to share in the net assets of the subsidiary's investment corresponding to the difference between the
disposals, recognized in the consolidated financial statements as other comprehensive income, loss of control over
the transferred together with the loss of control or loss in the period.
5. Cash equivalent
Cash and cash equivalents of the Company include cash on hand, ready usable deposits and investments having
short holding term (normally will be due within three months from the day of purchase), with strong liquidity and
easy to be exchanged into certain amount of cash that can be measured reliably and have low risks of change.
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
6. Foreign exchange
(1) Translation in foreign exchange transactions
The foreign currency transactions are recorded, on initial recognition in the functional currency, by applying [the
spot exchange rate on the date of the transaction / an exchange rate that approximates the actual spot exchange
rate on the date of transaction]. The exchange of foreign currency and transactions related to the foreign exchange
are translated at the spot exchange rate.
(2) Translation of monetary foreign currency and non-monetary foreign currency
At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at the
balance sheet date. All the exchange differences thus resulted are taken to profit or loss, except for ①those
relating to foreign currency borrowings specifically for construction and acquisition of qualifying assets, which
are capitalized in accordance with the principle of capitalization of borrowing costs, ②hedging accounting, the
exchange difference related to hedging instruments for the purpose of net oversea operating investment is
recorded in the comprehensive income till the date of disposal and recognized in profit or loss of the period;
exchange difference from changes of other account balance of foreign currency monetary items, ③
available-for-trade is recorded into profit or loss except for amortized cost.
Non-monetary foreign currency items measured at historical cost shall still be translated at the spot exchange rate
prevailing on the transaction date, and the amount denominated in the functional currency is not changed.
Non-monetary foreign currency items measured at fair value are translated at the spot exchange rate prevailing at
the date when the fair values are determined. The exchange difference thus resulted are recognized in profit or
loss for the current period or as capital reserve.
(3) The translation of financial statement in foreign currency
When the consolidated financial statements include foreign operation(s), if there is a foreign currency monetary
item constituting a net investment in a foreign operation, exchange difference arising from changes in exchange
rates are recognized as “exchange differences arising on translation of financial statements denominated in foreign
currencies” in owner’s equity, and in profit or loss for the period upon disposal of the foreign operation.
The Group translates the financial statements of its foreign operations into CNY by following rules. Assets and
liabilities in the balance sheet are translated at the spot exchange rate prevailing at the balance sheet date; all
equity items except for retained earnings are translated at the spot exchange rates at the dates on which such items
occur; income and expenses in income statement are translated at the spot exchange rates at the date of transaction;
the opening retained earnings is the closing retained earnings of the last period after translation; the closing
balance of retained earnings is calculates and presented in the basis of each translated income statements and
profit distribution item; the difference arising between the assets and liabilities and shareholders’ equity shall be
booked as translation difference of foreign currency statements, and shall be presented as a separate component of
equity in the balance sheet. On a loss of control over Group’s oversea operation due to disposal, the Company
transfers the accumulated or proportionate share of the accumulated exchange difference arising on translation of
financial statements of this oversea operation attributable to the owners’ equity of the Company and presented
under shareholders’ equity, to profit or loss in the period in which the disposal occurs.
Foreign currency cash flows and cash flow of oversea subsidiaries are translated at the spot exchange rates on the
date of cash flows. The effect of exchange rate changes on cash is separately presented as an adjustment item in
the cash flow statement.
The opening and actual amount of last year are presented in the financial statement after translation.
7. Financial instruments
(1) Determination of financial assets and liabilities’ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,
willing parties in an arm’s length transaction. For a financial instrument which has an active market, the Company
uses quoted price in the active market to establish its fair value. The quoted price in the active market refers to the
price that can be regularly obtained from exchange market, agencies, industry associations, pricing authorities; it
represents the fair market trading price in the actual transaction.
For a financial instrument which does not have an active market, the Company establishes fair value by using a
valuation technique. Valuation techniques include using recent arm’s length market transactions between
knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the
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same, discounted cash flow analysis and option pricing models.
The Company measures initially and subsequently the fair value of an interest rate swap at the value of a
competitor’s interest rate swap quoted by a recognized financial institution as at the Company’s balance sheet date
in accordance with the principle of consistency.
(2) Classification, recognition and measurement of financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. On
initial recognition, the Company’s financial assets are classified into one of the four categories, including financial
assets at fair value though profit or loss, held-to maturity investments, loans and receivables and
available-for-trade financial assets. A financial asset is recognized initially at fair value. In the case of financial
assets at fair value through profit or loss, relevant transaction costs are immediately charged to the profit and loss
of the current period; transaction costs relating to financial assets of other categories are included in the amount
initially recognized.
1) Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or loss.
Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in a short term;
B. the financial asset is a part of a portfolio of identifiable financial instruments that are collectively managed, and
there is objective evidence indicating that the enterprise recently manages this portfolio for the purpose of
short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging instrument, or
a financial guarantee contract, or a derivative that is linked to and must be settled by delivery of an unquoted
equity instrument (without a quoted price from an active market) whose fair value cannot be reliably measured.
For such kind of financial assets, fair values are adopted for subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only when it meets one of
the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or recognition of
relevant gains or losses that would otherwise arise from measuring the financial instruments on different bases.
B. a Group of financial instruments is managed and its performance is evaluated on a fair value basis, and is
reported to the enterprise’s key management personnel. Formal documentation regarding risk management or
investment strategy has prepared.
Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any gains or losses
arising from changes in the fair value and any dividends or interest income earned on the financial assets are
recognized in the profit or loss.
2) Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed
maturity that an entity has the positive intention and ability to hold to maturity. Such kind of financial assets are
subsequently measured at amortized cost using the effective interest method. Gains or losses arising from
derecognizing, impairment or amortization are recognized in profit or loss for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the expected life of
the financial asset or financial liability or, where appropriate, a shorter period to the net carrying amount of the
financial asset or financial liability.
When calculating the effective interest rate, the Company shall estimate future cash flow considering all
contractual terms of the financial asset or financial liability without considering future credit losses, and also
consider all fees paid or received between the parties to the contract giving rise to the financial asset and financial
liability that are an integral part of the effective interest rate, transaction costs, and premiums or discounts, etc.
3) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are not quoted in
an active market. Financial assets classified as loans and receivables by the Company include note receivables,
account receivables, interest receivable dividends receivable and other receivables.
Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or
loss arising from derecognizing, impairment or amortization is recognized in profit or loss.
4) Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on initial
recognition as available for trade, and financial assets that are not classified as financial assets at fair value
through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
changes in the fair value are recognized as other comprehensive income and included in the capital reserve, except
that impairment losses and exchange differences related to amortized cost of monetary financial assets
denominated in foreign currencies are recognized in profit or loss, until the financial assets are derecognized, at
which time the gains or losses are released and recognized in profit or loss.
Interests obtained and dividends declared by the investee during the period in which the financial assets
available-for-trade are held, are recognized in investment gains.
(3) Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for the financial
assets that measured by the fair value. If there is objective evidence indicating a financial asset may be impaired, a
provision is provided for the impairment.
1) Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present
value of future cash flow. The difference is recorded as impairment loss. If there is objective evidence to indicate
the recovery of value of financial assets after impairment, and it is related with subsequent event after recognition
of loss, the impairment loss recorded originally can be reversed. The carrying value of financial assets after
impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of
impairment loss on the reserving date.
2) Impairment loss on available-for-trade financial assets
Where the fair value of the equity instrument investment drops significantly or not contemporarily according to
the integrated relevant factors, an available-for-trade financial asset is impaired.
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair value
that had been recognized in capital reserve shall be removed and recognized in profit or loss. The amount of the
cumulative loss that is removed shall be difference between the acquisition cost with deduction of recoverable
amount less amortized cost, current fair value and any impairment loss on that financial asset previously
recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of the financial asset is
recovered, and it is objectively related to an event occurring after the impairment loss was recognized, the initial
impairment loss can be reversed and the reserved impairment loss on available-for-trade equity instrument is
recorded in the profit or loss, the reserved impairment loss on available-for-trade debt instrument is recorded in
the current profit or loss.
The equity instrument where there is no quoted price in an active market, and whose fair value cannot be reliably
measured, or impairment loss on a derivative asset that is linked to and must be settled by delivery of such an
unquoted equity instrument shall not be reversed.
(4) Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party under a pass-through
arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either (a) has transferred
substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over the asset,
the asset is recognized according to the extent it exists as financial asset, and correspondent liability is recognized.
The extent of existence refers the level of risk by the financial asset changes the enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognizing criteria, (a) the carrying amount of
the financial asset transferred; and (b) the sum of the consideration received from the transfer and any cumulative
gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognizing, the carrying amount of the transferred
financial asset is allocated between the part that continues to be recognized and the part that is derecognized,
based on the relative fair value of those parts. The difference between (a) the carrying amount allocated to the part
derecognized; and (b) the sum of the consideration received for the part derecognized and any cumulative gain or
loss allocated to the part derecognized which has been previously recognized in other comprehensive income, is
recognized in profit or loss.
(5) Classification and measurement of financial liabilities
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value through
profit or loss and other financial liabilities. For financial liabilities at fair value through profit or loss, relevant
transaction costs are immediately recognized in profit or loss for the current period, and transaction costs relating
to other financial liabilities are included in the initial recognition amounts.
1) Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the initial
recognition to be measured by the fair value follows the same criteria as the classification by which financial
assets held-for-trade and financial assets designed at the initial recognition to be measured by the fair value and
their changes are recorded in the current profit or loss.
For the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair values are
adopted for subsequent measurement. All the gains or losses on the change of fair value and the expenses on
dividends or interests related to these financial liabilities are recognized in profit or loss for the current period.
2) Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price in an active
market and their fair value cannot be measured reliably, is subsequently measured by cost Other financial
liabilities are subsequently measured at amortized cost using the effective interest method. Gains or losses arising
from derecognizing or amortization are recognized in profit or loss for the current period.
(6) Derecognizing of financial liabilities
The Group derecognizes a financial liability (or part of it) when the underlying present obligation (or part of it) is
discharged or cancelled or has expired. An agreement between the Company (an existing borrower) and existing
lender to replace original financial liability with a new financial liability with substantially different terms is
accounted for as an extinguishment of the original financial liability and the recognition of a new liability.
When the Company derecognizes a financial liability or a part of it, it recognizes the difference between the
carrying amount of the financial liability (or part of the financial liability) derecognized the consideration paid
(including any non-cash assets transferred or new financial liabilities assumed) in profit or loss.
(7) Derivatives and embedded derivatives
Derivative financial instruments include derivatives are initially measured at fair value at the date when the
derivative contracts are entered into and are substantially re-measured at fair value. The resulting gain and loss is
recognized in profit or loss.
An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not designated as
a financial asset or financial liability at fair value though profit or loss, and the treated as a standalone derivative if
(a) the economic characteristics and risks of the embedded derivative are not closely related to the economic
characteristics and risks of the host contract; and (b) a separate instrument with the same terms as the embedded
derivative would meet the definition of a derivative. If the Company is unable to measure the embedded derivative
separately either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a
financial asset or financial liability at fair value through profit or loss.
(8) Offsetting financial assets and financial liabilities
When the Company has a legal right that is currently enforceable to set off the recognized financial assets and
financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the
financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is
presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall
be presented separately in the balance sheet and shall not be offset.
(9) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting
all of its liabilities. The consideration received from issuing equity instruments, net of transaction costs, are added
to shareholders’ equity. All types of distribution (excluding stock dividends) made by the Company to holders of
equity instruments are deducted from shareholders’ equity. The Group does not recognize any changes in the fair
value of equity instruments.
8. Receivables
The receivables by the Company include account receivables, and other receivables.
(1) Criteria for recognition of bad debts:
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
The Company carries out an inspection on the balance sheet date. Where there is any objective evidence proving
that the receivables have been impaired, an impairment provision shall be made:
1) A serious financial difficulty occurs to the issuer or debtor;
2) The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the payment of
interests or the principal, etc.;
3) The debtor will probably become bankrupt or carry out other financial reorganizations;
4) Other objective evidences showing the impairment of the receivables.
(2) Method for bad debts provision
① Provisions of bad debts in account receivables that is individually significant.
Individual receivables equal to or higher than 10% of total receivables are classified as receivables of individual
significance.
For an account receivable that is individually significant, the asset is individually assessed for impairment, the
impairment loss is recognized at the difference between the present value of future cash flow less the carrying
amount, and provision is made accordingly.
② Provisions of bad debts in account receivables that individually insignificant item with similar credit risk
characteristics that have significant risk:
A. Evidence of credit risk characteristics
Whether the financial asset is individually significant or not individually significant, it is included in a group of
financial assets with similar credit risk characteristics and collectively assessed for impairment. Such credit risk
reflects the repayment of all due amount under the contract, and is related to the estimation of future cash flow
expected to be derived from the assets.
Evidence of portfolios:
Item Basis
Age portfolios Age
Related party portfolios The companies which are in the scope of the consolidation.
B. Provision by credit risk characteristics
During the Company impairment test, the amount of bad debts provisions is determined by the assessed result
from the experience of historical loss and current economic status and the existing loss in the estimated account
receivables according to the set of account receivables and credit risk characteristic.
Provision for different portfolios:
Item Provision
Age portfolios Age analysis method
Related party portfolios No allowance for bad debt, Unless the related party is insolvent
a. Portfolio by age analysis
Category Proportion for accounts receivable (%) Proportion for other receivable (%)
1 to 90 days 0.00 0.00
91 to 180 days 10.00 10.00
181 to 270 days 30.00 30.00
271 to 365 days 50.00 50.00
Over 365 days 100.00 100.00
b. Adopt other methods for recognition of impairment allowances:
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Group name Proportion for accounts receivable (%) Proportion for other receivable (%)
Related party group 0.00 0.00
③ Provisions of bad debts that is individually insignificant.
For the account receivables not individually significant, the Company assesses the account receivables
individually for impairment when are of following characteristics: if there is objective evidence indicating the
impairment, the impairment loss is recognized at the difference between the present value of future cash flow less
the carrying amount, and provision is made accordingly. For examples: receivables of individual insignificance
bears differing credit risk characteristics to other receivables of individual insignificance account receivables with
related parties; account receivables under litigations or arbitrations, or account receivables with obvious indication
that debtor cannot fulfill the obligation of repayment.
(3) The reversal of bad debts provision
If there is objective evidence of recovery in value of account receivables, and the recovery can be related to an
event occurring after the impairment was recognized, the previously recognized impairment loss is reversed and
recognized in profit or loss. However, the reversal shall not result in a carrying amount that exceeds what the
amortized cost would have been had the impairment loss not been recognized at the date the impairment is
reversed.
9. Inventories
(1) Classification of inventory
Inventories include finished goods and merchandises held for sale, work-in-progress and materials and supplies to
be consumed in the course of production of goods or rendering of services. Inventories are classified into
materials in transit, raw materials, work-in-progress, finished goods, materials and goods of consignment and
revolving materials etc.
(2) Valuation method of inventories
Inventories are initially carried at the planed cost, to record the difference between planned cost and actual cost
through the cost variances account, and carryover the cost variances of issued inventory on schedule, to adjust the
planned cost to actual cost. Cost of issue is measured using the weighted average method.
(3) Basis for determining net realizable value of inventories and provision methods for decline in value of
inventories
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable value is determined
on the basis of clear evidence obtained, and takes into consideration the purpose of holding inventories and effect
of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If the net
realizable value is below the cost of inventories, a provision for decline in value of inventories is made. The
provision for inventories decline in value is determined normally by the difference of the cost of individual item
less its realizable value. For large quantity and low value items of inventories,
provision for decline in value is made based on categories of inventories. For items of inventories relating to a
product line that are produced and marketed in the same geographical area, have the same or similar end users or
purposes, and cannot be practicably evaluated separately from other items in that product line provision for
decline in value is determined on an aggregate basis.
After the provision for decline in value of inventories is made, if the circumstances that previously caused
inventories to be written down below cost no longer exist so that the net realizable value of inventories is higher
than their cost, the original provision for decline in value is reversed and the reversal is included in profit or loss
for the period.
(4) The perpetual inventory system is maintained for stock system.
(5) Amortization method for low cost and short-lived consumable items and packaging materials.
Low cost and short-lived consumable items are amortized using immediate write-off method, packaging materials
are amortized using immediate write-off method.
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
10. Long-term equity investments
(1) Determination of Investment cost
For a business combination involving enterprises under common control, the initial investment cost of the
long-term equity investment shall be carrying value of the absorbing party’s share of the shareholder’s equity of
the party being absorbed at the date of combination.
For a business combination not involving enterprise under common control, the combination cost including the
sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities
issued by the acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services,
valuation and consultancy services etc and other associated administrative expenses attributable to the business
combination are recognized in profit or loss when they are incurred.
The transaction cost for the equity securities or liability securities issued by the acquirer in the business
combination shall be recognized as initial amount of equity security or liability.
The equity investments other than the long-term equity through combination shall be initially measured by cost.
The cost shall be recognized to the difference in the way of acquisition of long-term equity investment. Theses
ways include the cash purchase price the Company actually paid, the fair value of equity security issued by the
Company, value specified in the investment contract or agreement, the fair value or carrying value of the asset out
in the transaction of non-monetary asset exchanges, and the fair value of the long-term equity investment.
Expenses, taxes and other necessary expenditures directly attributable to the acquisition of long-term equity
investment are taken into investment cost.
(2) Subsequent Measurement
Cost method shall be adopted in a long-term equity investment where the investing enterprise does not have
common control or significant influence over the investee, the investment is not quoted in an active market and its
fair value cannot be measured reliably.
Where an investing enterprise can exercise common control or significant influence over the investee, a long-term
investment shall be accounted for using the equity method.
When an investing enterprise can no longer exercise joint control or common control nor significant influence
over the investee, and its fair value cannot be measured reliably, a long-term investment shall be counted as
financial asset ready-for trade.
A long-term equity investment where cost method is adopted in the Company’s financial statements can exercise
controls over the investee.
1) Cost method of accounting for long-term equity investments
Under the cost method, a long-term equity investment is measured at initial investment cost. Except for cash
dividends or profits declared but not yet paid that are included in the price or consideration actually paid upon
acquisition of the long-term equity investment, investment income is recognized in the period in accordance with
the attributable share of cash dividends or profit distributions declared by the investee.
2) Equity method of accounting for long-term equity investments
Where the initial investment cost of a long-term equity investment exceeds the investing enterprise’s interest in
the fair values of the investee’s identifiable net assets at the time of acquisition, no adjustment shall be made to
the initial investment cost.
Where the initial investment cost of a long-term equity investment is less than the investing enterprise’s interest in
the fair values of investee’s identifiable net assets at the time of acquisition, the difference shall be charged to
profit or loss for the current period, and the cost of the long-term equity investment shall adjusted accordingly.
Under the equity method, the Company recognizes its share of the net profit or loss of the investee for the period
as investment income or loss for the period. The Group recognizes it share of the investee’s net profit or loss
based on the fair value of the investee’s individual separately identifiable assets, etc at the acquisition date after
making appropriate adjustments to confirm with the Company’s accounting policies and accounting period.
Unrealized profits or losses resulting from the Company’s transactions with its associates and joint ventures are
recognized as investment income or loss to the extent that those attributable to the Company’s equity interest are
eliminated. However, unrealized losses resulting from the Company’s transactions with its investees on the
transferred assets, in accordance with "Accounting Standards for Enterprises No. 8 - Impairment of Assets", are
not eliminated. Changes in owners’ equity of the investee other than net profit or loss are correspondingly
adjusted to the carrying amount of the long-term equity investment, and recognized as other compressive income
which is included in the capital reserve.
When the investee is recognized net losses, reduce the carrying value of long-term equity investments and
long-term equity of net investment (in substance) in investee to zero. In addition, the Company has the obligations
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on additional losses, then the expected obligation as estimated liabilities and included in the current investment
losses. Where the net profit from investee units, restoration confirm the amount of revenue sharing after offset the
amount of unrecognized loss sharing.
For long-term equity investments in associates and joint ventures which had been held by the Company before its
first time adoption of Accounting Standards for Business Enterprises, where the initial investment cost of a
long-term equity investment exceeds the Company’s interest in the investee’s net assets at the time of acquisition,
the excess is amortized and is recognized in profit or loss on a straight line basis over the original remaining life.
3) Acquisition of minority interest
The difference between newly increased equity investment due to acquisition of minority interests and portion of
net asset cumulatively calculated from the acquisition date is adjusted as capital reserve. If the capital reserve is
not sufficient to absorb the difference, the excess are adjusted against returned earnings.
4) Disposal of long-term equity investment
Where the parent company disposes long-term investment in a subsidiary without a change in control, the
difference in the net asset between the amount of disposed long-term investment and the amount of the
consideration paid or received is adjusted to the owner’s equity. If the disposal of long-term investment in a
subsidiary involves loss of control over the subsidiary, the related accounting policies in Note 4.4.2 applies.
On disposal of a long-term equity investment, the difference between the proceeds actually received and
receivable and the carrying amount is recognized in profit or loss for the period. For along-term equity investment
accounted for using the equity method, the amount included in the owners’ equity attributable to the percentage
interest disposed is transferred to profit or loss for the period.
For any retained interest, it shall be subsequently measured according to the related accounting policies in regard
of long-term equity investments or financial assets as described above if its carrying amount is recognized as
long-term equity investments or other related financial assets. Retroactive adjustment is made on the basis of
relevant policies if the retained interests are settled from cost method to equity method.
(3) Recognition of investee under common control or significant influence
Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its
operating activities.
Common control is the contractually agreed sharing of control over an economic activity, and exists only when
the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties
sharing control.
Significant influence is the power to participate in the financial and operating policy decisions of the investee but
is not control or joint control over those policies.
When determining whether an investing enterprise is able to exercise control or significant influence over an
investee, the effect of potential voting rights of the investee held the investing enterprise or other parties that are
currently exercisable or convertible shall be considered.
(4) Impairment testing methods and recognition of impairment provision
The company assesses the long-term equity investment at the balance sheet date whether there is any indication of
impairment. If any indication exists that an asset may be impaired, the enterprise shall estimate its recoverable
value of the asset. If the recoverable value of the asset is less than its carrying amount, a provision for impairment
loss of the asset is recognized accordingly.
Once an impairment loss is recognized, it shall not be reversed in a subsequent period.
11. Investment property
Investment property is held to earn rentals or for capital appreciation or for both. Investment property includes
leased or ready to transfer after capital appreciation land use rights and leased buildings. Investment property is
initially measured at cost. Subsequent expenditures related to an investment real estate are likely to flow about the
economic benefits of the asset and its cost can be measured reliably, is included in the cost of investment real
estate. Other subsequent expenditures of gains or losses when occurred.
The Group uses the cost model for subsequent measurement of investment property, and in accordance with the
depreciation or amortization of buildings or land use rights policy.
Investment property impairment test method and impairment accrual method described in Note 4.17 “Non-current
and non-financial assets impairment ".
Occupied real estate for investment property or investment property is transferred to owner-occupied real estate or
stock conversion as the recorded value after the conversion, according to the book value before the conversion.
12. Fixed assets
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
(1) The conditions of recognition
Fixed assets refers to the tangible assets that are held for the sake of producing commodities, rendering labor
service, renting or business management and their useful life is in excess of one fiscal year.
(2) The method for depreciation
Fixed assets are stated at cost and consider the impact of expected costs of abandoning the initial measurement.
From the following month of state of intended use, depreciation method of the straight-line method is used for
different categories of fixed assets to take depreciation. The recognition of the classification, useful life and
estimated residual rate are as follows:
Category Estimated residual value (%) Expected useful life Depreciation (%)
Houses and building 10.00 20 4.50
Machineries 0.00 11-18 5.56-9.09
Electronic device、furniture and modules 0.00 5-6 16.67-20.00
Vehicles 0.00 6 16.67
Improvement expense of leased fixed assets 0.00 the shorter of lease term and beneficial lives
Expected net residual value of fixed assets is the balance of the Company currently obtained from the disposal of
the asset less the estimated costs of disposal amount, assuming the asset is out of useful life and state the expected
service life in the end.
(3) Measurement and recognition of fixed assets impairment
Impairment and provisions of fixed assets are disclosed on Note 4.17 Impairment of non-current and non-financial
assets.
(4) Fixed Assets under finance leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset.
Title may or may not eventually be transferred.
Fixed assets that are held under finance leases shall be depreciated by applying the same policy as that for the
fixed assets owned by the Company. If it can be reasonably determined that the ownership of the leased assets can
be obtained at the end of the lease period, the leased assets are depreciated over their useful lives; otherwise, the
leased assets are depreciated over the shorter of the lease terms and the useful lives of the leased assets.
(5) Others
A fixed asset is recognized only when the economic benefits associated with the asset will probably flow to the
Company and the cost of the asset can be measured reliably. Subsequent expenditure incurred for a fixed asset
that meet the recognition criteria shall be included in the cost of the fixed asset, and the carrying amount of the
component of the fixed asset that is replaced shall be derecognized. Otherwise, such expenditure shall be
recognized in profit or loss in the period in which they are incurred.
The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss after deduction
of carrying value and related tax.
The Company conducts a review of useful life, expected net realizable value and depreciation methods of the
fixed asset at least on an annual base. Any change is regarded as change in accounting estimates.
13. Construction in progress
Construction in progress is measured at its actual cost. The actual costs include various construction expenditures
during the construction period, borrowing costs capitalized before it is ready for intended use and other relevant
costs. Construction in progress is transferred to a fixed asset when it is ready for intended use.
Testing method for provision impairment of construction in progress and accrued method for provision
impairment please refer to Note 4.17.
14. Borrowing costs
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Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costs
incurred in connection with the arrangement of borrowings, and exchange differences arising from foreign
currency borrowings.
The borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset are capitalized. The amounts of other borrowing costs incurred are recognized as an expense in the period in
which they are incurred. Qualifying assets are asset (fixed assets, investment property and inventories, etc.) that
necessarily take a substantial period of time for acquisition, construction or production to get ready for their
intended use or sale.
Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual interest
expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed
funds before being used on the asset or any investment income on the temporary investment of those funds.
Where funds are borrowed for a general-purpose, the amount of interest to be capitalized on such borrowings is
determined by applying a weighted average interest rate to the weighted average of the excess amounts of
accumulated expenditure on the asset over and above the amounts of specific-purpose borrowings.
During the capitalization period, exchange differences related to a specific-purpose borrowing denominating in
foreign currency are all capitalized. Exchange differences in connection with general-purpose borrowings are
recognized in profit or loss in the period in which they are incurred.
Assets qualified for capitalization are the fixed assets, investment properties or inventories which need a long time
of construction or production activities before ready for intended used or sale.
Capitalization of borrowing costs is suspended during periods in which the acquisition, construction or production
of a qualifying asset is interrupted by activities other than those necessary to prepare the asset for its intended use
or sale, when the interruption is for a continuous period of more than 3 months. Borrowing costs incurred during
these periods recognized as an expense for the current period until the acquisition, construction or production is
resumed.
15. Intangible assets
(1) Intangible asset
The term “intangible asset” refers to the identifiable non-monetary assets without physical shape, possessed or
controlled by enterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the economic
benefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can be
measured reliably, shall be recorded as cost of intangible assets. The expenses other than this shall be booked in
the profit or loss when they occur.
Land use rights that are purchased by the Company are accounted for as intangible assets. Buildings, such as
plants that are developed and constructed by the Company, and relevant land use rights and buildings, are
accounted for as intangible assets and fixed assets, respectively. Payments for the land and buildings purchased
are allocated between the land use rights and the buildings; if they cannot be reasonably allocated all of the land
use rights and buildings should accounted for as fixed assets.
When an intangible asset with a definite useful life is available for use, its original cost less net residual value and
any accumulate impairment losses is amortized over its estimated useful life using the straight-line method. An
intangible asset with an indefinite useful life is not amortized.
For an intangible asset with a definite useful life, the Company reviews the useful life and amortization method at
the end of the period, and makes adjustment when necessary.. An additional review is also carried out for useful
life of the intangible assets with indefinite useful life. If there is evidence showing the foreseeable limit period of
economic benefits generated to the enterprise by the intangible assets, then estimate its useful life and amortize
according to the policy of intangible assets with definite useful life.
(2) Research and development cost
Cost of research and development is distinguished into the research phase and the development phases.
Cost of the research phase is recognized in the profit or loss in the period in which it is incurred.
Unless the following conditions are satisfied, cost of the development phase is recognized in the profit or loss in
the period in which it is incurred:
1) it is technically feasible to complete the intangible asset so as to use it or sell it;
2) it is clearly invented to complete the intangible asset in order to use it or sell it;
3) it is probable that the intangible asset is capable of generating future economic benefit, such as the market for
the product produced by the intangible asset or the intangible asset itself, it is objectively evidential that the
intangible asset is economically usable if it is going to be used internally;
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
4) there are sufficient technical, financial and other resources to complete the intangible asset and to use it or sell
it;
5) the cost of the development of the intangible can be measured reliably.
If the cost cannot be distinguished into the search phase and the development phase, it is recognized in the profit
or loss for the period in which it is incurred.
(3) Impairment of intangible assets
Impairment and provisions of intangible assets are disclosed on Note 4.17.
16. Long-term deferred expenditure
An item long-term deferred expenses is an expense which has been incurred and which has a beneficial period (a
period during which an expense is expected to bring economic benefits to an entity) which is longer than one year
and which includes at least part of the reporting period during which the expense was incurred and subsequent
reporting periods. An item of long-term deferred expenses is recognized at the actual amount of the expense
incurred and allocated in each month of the beneficial period using the straight line method.
17. Impairment of non-current and non-financial assets
Non-financial assets with non-current nature include fixed assets, construction in progress, intangible assets with
definite useful lives, investment properties measured by cost methods and long-term equity investment on
subsidiaries, jointly operations. The Company assesses whether there are any indicators of impairment for all
non-financial assets at the balance sheet date, and impairment test is carried out and recoverable value is estimated
if such an indicator exits. Goodwill and intangible assets with indefinite useful lives, as well as intangible assets
not ready for use, are tested for impairment annually regardless of indicators of impairment.
Impairment of loss is calculated and provisions taken by the difference if the recoverable value of the assets is
lower than the book value. The recoverable value is the higher of estimated present value of the future expected
cash flows from the asset and net fair value of the asset less disposed cost. The fair value of asset is determined by
the sales agreement price within an arm’s length transaction. In case there is no sales agreement, but there is
active market of assets, the fair value can be determined by the selling price. If there is neither sales agreement nor
active market, the fair value of the asset can be estimated based on the best information obtained.
Disposal expenses include expenses related to the legislation, taxes, transportations and the direct expense for the
asset to be ready for sale. When calculating the present value of expected future cash flows from an asset or asset
Group, the management shall estimate the expected future cash flows from the asset or asset Group and choose a
suitable discount rate in order to calculate the present value of those cash flows.
Provision for asset impairment is calculated and determined on the individual basis. If the recoverable of
individual asset is hard to estimate, the recoverable amount can be determined by the asset Group where subject
asset belongs. Asset Group is the smallest set of assets that can have cash flow in independently.
The Company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of
the present value of the future expected cash flows from the asset Groups or sets of asset Groups to which the
goodwill is allocated. Estimating the present value requires the Company to make an estimate of the expected
future cash flows from the asset Groups or sets of asset Groups and also choose a suitable discount rate in order to
calculate the present value of those cash flows. Once the loss from above asset impairment is recognized, the
recoverable part cannot be reserved in the subsequent periods.
18. The buyback conditions attached to the transferred assets
The sales and buy back is one of sales mode of the Company, that is means when sale the product, simultaneously
agreed to buy back the same or similar product in the future. Under this sales mode, the Company according to the
clause of contract or agreement to decide whether the revenue recognition criteria are satisfactory. If the Company
has not transferred to the buyer the significant risks and rewards of ownership of the goods, the Company should
not recognize the revenue; If the buy back price higher than the original sales price, during the buy back period,
the Company shall recognize the interest expenses to income statement (financial expenses).
19. Accrued liabilities
Recognition of accrued liabilities:
Obligation with contingency factor such as external hypothecate, lawsuit or arbitrage in dispute, guarantee on
quality of product, cut-down plan, loss of contract, recombine obligation, obligation on abandon fixed asset, and
meet the follow condition simultaneously would determined as liabilities:
①This obligation is current obligation of the Company; and,
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
②The performance of this obligation will probably cause economic benefits outflow of the Company; and,
③The amount of this obligation can be reliably measured.
On balance sheet date the Company performed relate obligation that consider risk, incertitude, time value of
currency of contingency factor. According to the best estimate of the expenditure required to settle the present
obligation for estimated liabilities measured.
If the expenditure required to settle the liability is expected to be fully or partly compensated by a third party, to
determine the amount of compensation will be received at the basic, separately recognized as an asset, and is
recognized in the amount of compensation does not exceed the carrying value of estimated liabilities.
20. Shares-based payment
(1) Categories of share-based payment
The types of shares-based payment of the Company are: cash-settle and equity-settle.
② Cash-settled share-based payment
The measurement of cash-settle is according with the fair value of liability undertake by the Company, which is
calculated base on 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.
① Equity-settled share-based payment
Equity settled share-based payments for employee services are measured by the fair value of the instruments
granted to employees on the date of grant. For instruments exercisable upon satisfaction of performance of expiry
of vesting period for services, the fair value is amortized by the straight-line method and recognized in profit or
loss for the relevant periods; for those with immediate exercisability, the fair value is recognized immediately in
profit or loss and added to capital reserves.
Equity settled share-based payments for services rendered by third parties are measured by the fair value of
services on the receipt date if the relevant fair value can be reliably estimated and by the fair value of the
instruments on the service receipt date if the fair value of services received cannot be reliably estimated and the
fair value of the instruments is reliably estimated. The measured fair value is recognized in the profit or loss and
added equity.
(2) Determining the fair value of equity instruments granted
① For those shares granted to employees shall measure the fair value of equity instruments granted at the
measurement date, based on market prices if available, simultaneously, taking into account the terms and
conditions ( exclude the vesting conditions of external market) upon which those equity instruments were
granted.
② For those share options granted to employees, the market prices are not available in most circumstance. If there
is no clause and requirement of other similar trading options, the Company shall estimate the fair value of the
share option granted using a valuation technique.
(3) Base of the best estimate of vesting equity instrument’s reorganization
On each balance sheet date of waiting-period, the Company shall recognize an amount for the equity instrument
during the vesting period based on the best available estimate of the number of equity instruments expected to vest
and shall revise that estimate, if necessary, if subsequent information indicates that the number of equity
instruments expected to vest differs from previous estimates.
(4) Implementation, modification, termination of share-based payment plan with the relevant accounting
treatment
The Company to modify the plans of shares payments, if the modification increases the fair value of the equity
instruments granted; in accordance with the increase in the fair value of equity instruments are recognized
accordingly get increased services. Increase in the fair value of the equity instruments is the difference of fair
value between before and after of the modified date. If the modification reduces the total fair value of the shares
paid or used other workers is not conducive to the way the service will continue to be made in the accounting
treatment, as if the change had not occurred, unless the company to cancel some or all of the granted equity tool.
If canceled equity instruments granted during the waiting period, the Company canceled equity instruments
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
granted as an acceleration of vesting treatment, the amount of the remaining waiting period should be recognized
immediately in profit or loss, while recognizing the capital reserve. Employees or other parties can choose to meet
non-vesting conditions are not met in the waiting period; the Company will be treated as canceled equity
instruments granted.
(5) The accounting treatment related to the Company and the shareholders of the Company or actual
control of share-based payment transactions
Shares in respect of the Company and the shareholders of the Company or actual control of payment transactions,
one of the settlement enterprise and receiving services enterprise is in the Company and the other is outside of the
Company, the Company's consolidated financial statements are accounted for the following provisions treatment:
① Settlement companies settled in its own equity instruments to pay the share transaction as an equity-settled
share-based payment processing; in addition, as a cash-settled share-based payment processing.
Settlement companies are receiving services business investors, the fair value of the equity instruments at the
grant date fair value of liabilities assumed or to be recognized as the acceptance of long-term equity investment
service companies, while recognizing capital reserve (other capital surplus) or liability.
② Receive services companies do not settle the obligation or the employees of the enterprise is granted its own
equity instruments, the share-based payment transaction as equity-settled share-based payment processing; accept
the obligations and settlement services companies with enterprise workers are not granted its own equity
instruments of the share-based payment transaction as cash-settled share-based payment processing.
Shares occurred between the companies trading in the Company's payment, acceptance and settlement service
business enterprise is not the same enterprise, the recognition and measurement of share-based payment
transactions in accepting the settlement enterprise and service enterprises in the each individual financial
statement, as above principles treatment.
21. Revenue
(1) Revenue from sales of goods
Revenue from sales of goods is recognized when significant risks and rewards attached to the ownership of the
goods sold are passed to the buyer, when neither continual involvement in the rights normally associated with the
ownership of the goods sold nor effective control over the goods controls are retained, when revenue arising from
the goods sold is reliably measurable, when inflow of future economic benefits is probable, and when cost
incurred or to be incurred associated with the goods sold is reliably measurable.
For the export sales of the products of the Company, no matter what the sales pattern adopt, recognition of
revenue according to the sales contract or conventions listed in the orders, for those product sales employ the FOB
domestic ports settlement, revenue recognition upon the bill of lading acquired from the shipping company and
conducted the export declaration; for those product sales employ the FOB oversea ports settlement, revenue
recognition upon the export declaration finished and shipment at the buyer’s receiving dock, as well as acquired
the bill of lading from the shipping company.
Accounting treatment for sales return: in accordance with the international trade prevailing rules, the FOB
settlement employed, indicate to the buyer has inspected and accepted those purchased commodities at the
shipment dock, after acceptance and shipping the relevant risks has been transferred to buyer, therefore the
Company has no individually recognized for the events, but the amount shall be recognized when incurred and
accounted through in profit and loss in current period.
Accounting treatment for product claims: calculate the claim indemnity rate, according to the proportion of
actually payment for those product claims during recently two years account for the corresponding period sales
revenue, at the end of period, on the basis of current period sales revenue and the claim indemnity rate to
recognize the claim indemnity expense.
(2) Revenue from rendering of service
Revenue arising from rendering of services is recognized on the balance date using the percentage of completion
method when the outcome of the services rendered can be reliably estimated. The percentage of completion of the
services rendered is calculated by dividing the cost to date by the budgeted total cost.
The outcome of the services rendered can be reliably estimated when revenue from the services render can be
reliably measured, when the inflow of associated future economic benefits is probable, when the percentage of
completion can be reliably measure, and when the cost incurred or to be incurred associated with the services can
be reliably measured.
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
When the outcome of the services rendered cannot be reliably estimate, revenue is recognized as cost
reimbursement received or to be received, if any, and cost incurred is recognized in profit or loss for the period in
which the cost is incurred. No revenue is recognized if cost reimbursement is not probable.
When a contract between the group and another entity involves both sales of goods and rendering for services, the
sales of goods and rendering of services are accounted for separately if they are distinguishable and separately
measurable; the contract is accounted for as if it is a contract involves only sales of goods if the sales of goods and
rendering of services are either indistinguishable or distinguishable but not separately measurable.
(3) Revenue from construction contracts
When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs
associated with the construction contract should be recognized as revenue and expenses respectively by reference
to the stage of completion of the contract activity at the balance sheet date.
In the case of a fixed price contract, the outcome of a construction contract can be estimated reliably when all the
following conditions are satisfied: ①total contract revenue can be measured reliably; ② it is probable that the
economic benefits associated with the contract will flow to the enterprise; ③the contract costs attributable to the
contract can be clearly identified and measured reliably so that actual contract costs incurred can be compared
with prior estimates; and, ④both the contract costs to complete the contract and the stage of contract completion
at the balance sheet date can be measured reliably.
When the outcome of a construction contract cannot be estimated reliably, but revenue should be recognized only
to the extent of contract costs incurred that it is probable will be recoverable; and If the cost can not be recovered,
contract costs should be recognized as an expense in the period in which they are incurred. So that the results of a
construction contract can not be reliably estimated uncertainties exist, to determine the percentage of completion
method and construction contracts related income and expense.
An expected loss on the construction contract should be recognized as an expense immediately.
(4) Royalty Revenue
According to the contract or agreement, the revenue is recognized on an accrual basis.
(5) Interest Income
The amount of interest revenue should be measured and confirmed in accordance with the length of time for
which the enterprise's cash is used by others and the actual interest rate.
22. Government Grants
Government grants are transfer of monetary assets and non-monetary assets from the government to the Company
at no consideration, excluding the capital invested by the government as equity owner. Government grant can be
classified as grant related to the assets and grants related to the income.
The government grants which were acquired by the Company will be used to purchase or otherwise form become
long-term assets will be defined as grant related to the assets; the others will be defined as grants related to the
income. If the files have not clearly defined government grants objects, it will be divided in the following manner
compartmentalize the grants into rant related to the assets and grants related to the income: (1) government
documents defined specific projects targets, according to the relative proportion of the budgets of specific items
included the expenditure of to form assets and the expenditure will be charged into expense to be divided, the
division ratio required at each balance sheet date for review and make changes if necessary; (2) government
documents to make a general presentation purposes only, does not specify a particular project, as grants related to
the income.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received or
receivable. If a government grant is in the form of a non-monetary asset, it is measured at fair value. If the fair
value cannot be reliably determined, it is measured at a nominal amount. A government grant measured at a
nominal amount is recognized immediately in profit or loss for the period.
When received the government grants actually, recognized and measured them by the actual amount received.
However, there is strong evidence that the end of fiscal support policies able to meet the conditions specified in
the relevant funds are expected to be able to receive financial support, measured at the amount receivable.
Government grants are measured according to the amount receivable shall also comply with the following
conditions: (1) grants receivable of government departments issued a document entitled have been confirmed, or
could reasonably estimated in accordance with the relevant provisions of its own official release of financial
resources management approach, and the expected amount of a material uncertainty which does not exist; (2) it is
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
based on the local financial sector to be officially released and financial support for the project and its financial
fund management approach voluntarily disclosed in accordance with the provisions of “Regulations on Disclosure
Government Information”, and the management approach should be (inclusive of any compliance business
conditions may apply), and not specifically formulated for specific businesses;(3) related grants approval has been
clearly committed the deadline, and is financed by the proceeds of a corresponding budget as a guarantee, so that
will be received within the prescribed period with the a reasonable assurance; (4) according to the specific
circumstances of the Company and the subsidy matter, should satisfy the other conditions (if any).
A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or loss
over the useful life of the related asset. For a government grant related to income, if the grant is a compensation
for related expenses or losses to be incurred in subsequent period, the grant is recognized as deferred income, and
recognized in profit or loss over the periods in which the related costs are recognized. If the grant is a
compensation for related expenses or losses already incurred, the grant is recognized immediately in profit or loss
for the period.
For repayment of a government grant already recognized, if there is a related deferred income, the repayment is
offset against the carrying amount of the deferred income, and any excess is recognized in profit or loss for the
period. If there is no related deferred income, the repayment is recognized immediately in profit or loss for the
period.
23. Deferred tax assets and deferred tax liabilities
(1) Income tax for the current period
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected to apply
to the period when the asset is realized or the liability is settled, according to the requirements of tax laws. The
measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow
from the manner in which the Company expects at the balance sheet date, to recover the assets or settle the
liabilities.
At the balance sheet date, current income tax liabilities or assets for the current and prior periods are measured at
the amount expected to be paid (or recovered) according to the requirements of tax laws. The calculation for
income tax expenses in the current period is based on the taxable income according to the related tax laws after
adjustment to the accounting profit of the reporting period.
(2) Deferred income tax assets and liabilities
For temporary differences between the carrying amount of certain assets or liabilities and their tax base, or
between the nil carrying amount of those items that are not recognized as assets or liabilities and their tax base
that can be determined according to tax laws, deferred tax assets and liabilities are recognized using the balance
sheet liability method.
For temporary differences associated with the initial recognition of goodwill and the initial recognition of an asset
or liability arising from a transaction (not a business combination) that affects neither the accounting profit nor
taxable profits (or deductible losses) at the time of transaction, no deferred tax asset or liability is recognized.
For taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint
ventures, no deferred income tax liability related is recognized except where the Company is able to control the
timing of reversal of the temporary difference and it is probable that the temporary difference will not reverse in
the foreseeable future.
All deferred income tax liabilities arising from taxable temporary differences except the ones mentioned above are
recognized.
For temporary deductible differences associated with the initial recognition of an asset or liability arising from a
transaction (not a business combination) that affects neither the accounting profit nor taxable profits (or deductible
losses) at the time of transaction, no deferred tax asset is recognized.
For taxable temporary deductible differences associated with investments in subsidiaries and associates, and
interests in joint ventures, no deferred income tax asset related is recognized if it is impossible to reversal the
temporary difference in the foreseeable future, or it is not probable to obtain taxable income which can be used for
the deduction of the temporary difference in the future.
Except mentioned above, the Company recognizes other deferred income tax assets that can deduct temporary
differences to the extent that it is probable that taxable profits will be available against which the deductible
temporary differences can be utilized.
For the deductible losses and tax credit that can be carried forward, deferred tax assets for deductible temporary
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
differences are recognized to the extent that it is probable that taxable profits will be available against which the
deductible temporary differences can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to tax laws,
which are expected to apply in the period in which the asset is realized or the liability is settled.
At the balance sheet date, the Company reviews the carrying amount of deferred tax assets. If it is no longer
probable that sufficient taxable profit will be available in future periods to allow the benefits of the deferred tax
assets to be used, the Company reduces the carrying amount of deferred tax assets. The amount of such reduction
is reversed when it becomes probable that sufficient taxable profit will be available.
(3) Income tax expenses
Income tax expenses consist of current income tax and deferred income tax.
The expenses from income tax and deferred income tax, as well as the revenue, shall be recorded into profit or
loss in current accounting period, except expense for income tax of the current period and deferred income tax
that booked into other income or equity and adjusted carrying value of deferred income tax goodwill arose from
business combination.
(4) Income tax offset
When we have the legal right, and have intended to, to make settlement with net amount, or through the asset
acquisition and liability fulfillment simultaneously, the Company shall present the net value from the offset
between current income tax asset and current income tax liability in the financial statement.
When the Company has the legal right to make a settlement with the current income tax asset and current income
tax liability, and the deferred income tax asset and deferred income tax liability are related to the same taxable
subject under the same tax payer, or related to different taxable subject, but the intension of net value settlement in
regard of the current income tax asset and current income tax liability, the Company shall present net value after
the offset of deferred income tax asset and deferred income tax liability.
24. Leases
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset.
Title may or may not eventually be transferred. An operating lease is a lease other than a finance lease.
(1) The Company as Lessee under operating Lease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the lease term,
and either included in the cost of the related asset or charged to profit or loss for the current period. The
contingent rents shall be recorded in the profit or loss of the period in which they actually arise.
(2) The Company as Leaser under operating Lease
Lease income from operating leases shall be recognized by the leaser in profit or loss on a straight-line basis over
the lease term. Initial direct cost of significance in amount shall be capitalized when incurred. If another basis is
more systematic and rational, that basis may be used. Contingent rents are credited to profit or loss in the period in
which they actually arise.
(3) The Company as Lessee under financing Lease
For an asset that is held under a finance lease, at the lease commencement, the leased asset is recorded at the
lower of its fair value at the lease commencement and the present value of the minimum lease payments, and the
minimum lease payment is recorded as the carrying amount of the
long-term payables; the difference between the recorded amount of the leased asset and the recorded amount of
the payable is accounted for as unrecognized finance charge, Initial direct costs incurred by the lessee during the
process of negotiating and securing the lease agreement shall be added to the amount recognized for the leased
asset.
The net amount of minimum lease payment deducted by the unrecognized finance shall be separated into
long-term liabilities and long-term liability within one year for presentation.
Unrecognized finance charge shall be computed by the effective interest method during the lease term. Contingent
rent shall be booked into profit or loss when actually incurred.
(4) In the case of the lessor of a financing lease
For an asset that is leased out under a finance lease, the aggregate of the minimum lease receipts at the inception
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
of the lease and the initial direct costs is recorded as a finance lease receivable, and unguaranteed residual value is
recorded at the same time; the difference between the aggregate of the minimum lease receipt, initial direct costs,
and unguaranteed residual value, and the aggregate of their present values, is recognized as unearned finance
income, which is amortized using the effective interest rate method over each period during the lease term.
Finance lease receivable less unearned finance income shall be separated into long-term liabilities and long-term
liability within one year for presentation.
Unearned finance income shall be computed by the effective interest method during the lease term. Contingent
rent shall be credited into profit or loss in which actually incurred.
25. Assets held-for-sale
The Company has made decision on disposal of some non-current assets, and signed irrecoverable transferring
agreements with buyers. The transaction is probably to be completed with one year. If so, the non-current asset
shall be counted as an asset ready-for-sale, not depreciated or amortized, and shall be measured by the lower of
carrying amount and faire value less net value of disposal expenses. Non-current assets ready-for-sale includes
individual asset and disposal Group. If disposal Group is an asset Group, and has allocated goodwill acquired
during the combination according to the Accounting Standard for Business Enterprises No. 8 - Impairment, or. the
disposal Group is an operation in the asset Group, the disposal Group includes goodwill in the business
combination.
Where an asset or a disposal Group is classified as held-for-trade, but cannot satisfy the condition of non-current
asset ready-for-trade, the Company shall derecognize it as held-for-trade, and measure it by the lower of the
followings:
(1) the carrying amount of the asset or disposal Group before it is classified as held-for-trade, the value after the
adjustment of depreciation, amortization or impairment recognized under the assumption that it is not classified as
held-for-trade;
(2) the recoverable value on the date when decided not to trade any more.
26. Employee Benefits
During the accounting period of an employee’ providing services to the Company, the Company recognizes the
compensation payable as liabilities.
The Company participates in the employees social security system set up by government agencies, including
pensions, medical insurance, housing fund and other social security system, and the corresponding expenditures
are included in the cost of related assets or the profit or loss.
When an enterprise terminates the employment relationship with employees before the end of the employment
contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, a
provision shall be recognized for the compensation arising from termination of employment relationship with
employees, with a corresponding charge to the profit or loss for the current period. The enterprise cannot
unilaterally withdraw from the termination plan or the redundancy offer.
The early retirement plan adopts the same principles of termination benefits. Salaries and social insurance (from
the date of ceasing services to the date of normal retirement) are paid by the Company, subject to the conditions to
be recognized in profit or loss (termination benefits).
27. Changes in major accounting policies and accounting estimates
(1) Changes of accounting policies
There was no significant change of accounting policies for the Company during the reporting period.
(2) Changes of accounting estimates
There was no any change of accounting estimates during the reporting period.
28. Correction of prior period errors
There is no significant change of previous accounting errors for the Company during the reporting period.
29. Significant account judgment and estimates
The Company is required to make judgments, estimates and assumptions about the carrying amounts of items in
the financial statements that cannot be measured accurately, due to the internal uncertainties of operation activities.
These judgments, estimates and assumptions are based on historical experiences of the Company’s management
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
as well as other factors that are considered to be relevant. These judgments, estimates and assumptions may affect
value of the financial statements in revenue, expenses, assets and liabilities and the disclosure of contingency at
the balance sheet date. However, the result derived from those uncertainties in estimates may lead significant
adjustments to the carrying amounts of the assets or liabilities affected in the future.
The Company has reviews the judgments, estimates and assumptions regularly on the basis of going concern.
Where the changes in accounting estimates only affect the period when changes occurred, and they are recognized
within the same period. Where the changes in accounting estimates affect both current period and future period,
the changes are recognized within the period of change and future period.
At balance sheet date, the followings are the significant areas where the Company needs to make judgment,
estimates and assumptions over the value of items in the financial statements:
(1) Revenue Recognition – Construction Contracts
When the result in the construction contract can be estimated reliably, contract revenue is recognized by the
Company at the balance sheet date using the percentage of completion method. The percentage of completion of
the contract is confirmed in accordance with this Note 4, 4.22 “Revenue recognition”, and a cumulative basis in
each accounting year of the implementation of the construction contract.
In determining the percentage of completion of the contract costs incurred, the estimated total contract revenue
and total costs, as well as the recoverability of the contract requires significant judgment. Project management is
primarily relying on past experience and work judgment. The estimated total contract revenue and total cost, and
the estimated contract changes the results are likely to change the current or future period revenues, operating
costs, and gains and losses during the impact, and may have a significant impact.
(2) Classification of lease
The Company classifies leases as operating lease and financing lease according to the rule stipulated in the
Accounting Standard for Business Enterprises No. 21—Leasing. The management shall make analysis and
judgment on whether the risks and rewards related to the title of leased assets has been transferred to the leaser, or
whether the Company has substantially held the risks and rewards related to the ownership of leased assets.
(3) Allowance for bad debt
According to the relevant accounting policies of the Company in receivables, allowance method is used for bad
debt’s calculation. The impairment of receivables is calculated based on the assessment of recoverable of
receivables. Assurance of receivable impairment needs judgments and estimations from the management. The
difference between actual results and original estimates shall have impact on the carrying amount of receivables
and receivable bad debt provisions or the reverse during the change of estimation.
(4) Impairment of inventories
The Company measures inventories by the lower of cost and realizable net value according to the accounting
policies in regard of inventories and provisions for decline in value of inventories are made if the cost is higher
than their net realizable value and obsolete and slow-movement inventories. Inventories decline in value to net
realizable value is the estimated selling price in the ordinary course of business. Net realizable value is determined
on the basis of clear evidence obtained, and takes into consideration the purposes of holding inventories and effect
of post balance sheet events. The difference between the actual result and the original estimates shall have impact
on reverse of the carrying amount of the inventories and their decline in value or provisions during the period of
change.
(5) The fair value of financial instruments
For a financial instrument which has no active market, the Company establishes fair value by using various
valuation methods, including of discounted cash flow analysis model. The Company needs to estimate future cash
flow, credit risk, volatility and relationship during the valuation and choose appropriate discount rate. Such
assumptions have uncertainties and their changes shall have impact on the fair value of financial instruments.
(6) Held-to-maturity investments
The Company will comply with the conditions of a fixed or determinable payments and fixed maturities that the
Company has the positive intention and ability to hold to maturity are non-derivative financial assets are classified
as held-to-maturity investments. This classification requires significant judgment. In the process of this judgment,
the Company should make the assessment of its maturity willingness and ability to hold such investments. Except
in specified circumstances (for example, towards the maturity date of the sale amount is not significant
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
investment), if the Company is unable These investments held-to-maturity, shall be all the class investments
classified as available-for-sale financial assets and in the current fiscal year and the next two fiscal year shall not
classify any financial assets as held-to-maturity investments. in this theoretical situation, there have a significant
impact on the financial statements listed on the reported value of financial assets, and affect the Company's
financial instruments risk management strategy.
(7) Held-to-maturity investments impairment
The Company to determine the held-to- maturity investments are impaired in dependent on management's
judgment. Occurred objective evidence of impairment including the disappearance of severe financial difficulties
that financial asset cannot continue to be traded in an active market, unable to fulfill the terms of the contract (for
example, interest or principal payments as a default ) . In processing of judgment, the Company is required to
assess the occurred objective evidence of impairment of the investment in expected future cash flows.
(8) Impairment of financial assets available-for-sale
The Company determine the available-for-sale financial asset is impaired relies on judgments and assumptions of
management, to determine whether impairment loss is recognized in the income statement. The process of making
the judgments and assumptions, the Company is required to assess the extent and duration of the fair value of the
investment below cost, as well as investment financial position and short-term business outlook, including
industry conditions, technological change, the credit rating, default rates and counterparty risk.
(9) Impairment of non-financial, non-current assets
The Company assesses whether there are any indicators of impairment for all non-current assets other than
financial assets at the balance sheet date. For an intangible asset that has indefinite useful life, impairment test is
made in addition to the annual impairment test if there is any indication of impairment. For non-current assets
other than financial assets, impairment test is made when there is any indication that its account balance cannot
be recovered.
Impairment exists when the recoverable amount of an asset is the higher of its fair value less cost of disposal and
present value of the future cash flows expected to be derived from the asset.
Net value between the difference of fair value and disposal cost is determined by reference of the price of similar
product in a sale agreement in an arm’s length transaction or an observable market price less the additional cost
directly attributable to the disposal of the asset.
When estimating the present value of future cash flow, significant judgments are made over the asset’s production,
selling price and relevant operating expenses, and discount rate used to calculate present value. All available
materials that are considered to be relevant shall be used in the estimation of recoverable value. These materials
include estimations of production, selling price and operating expenses based on reasonable and supportable
assumptions.
The Company makes an impairment test for goodwill at least at each year end. This requires an estimation of
present value of future cash flow of the assets or assets group where goodwill has been allocated. The Company
shall makes estimation on the future cash flow derived from assets or assets group and determine an appropriate
discount rate for the present value of future cash flow when the estimation of present value of future cash flow is
made.
(10) Depreciation and amortization
Investment property, fixed assets and intangible assets are depreciated and amortized using the straight-line
method over their useful lives after taking into account residual value. The useful lives are regularly reviewed to
determine the depreciation and amortization costs charged in each reporting period. The useful lives are
determined based on historical experience of similar assets and the estimated technical changes. If there is an
indication that there has been a change in the factor used to determine the depreciation or amortization, the rate of
depreciation or amortization is revised.
(11) The development expenditure
In determining the amount of capitalization, the Company's management needs to make the relevant asset the
estimated future cash flows, applicable discount rate assumptions of the estimated benefit period.
(12) Deferred tax assets
The group shall recognize all unused tax losses as deferred tax assets to the extent that it is probable that future
taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. This
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
requires the management of the Company make a lot of judgments over the estimation of time period, value and
tax planning strategies when future taxable profit incurs so that the value of deferred tax assets can be determined.
(13) Income tax
There are some transactions where ultimate tax treatments and calculations have uncertainties in the Company’s
everyday operation. If it is possible for any item to make expenditure before tax that needs to be approved from
competent tax authorities. If there is any difference between finalized determination value and their initial
estimations value, the difference shall have the impact on the income tax and deferred income tax of the current
period during the final determination.
(14) Early retirement benefits and supplemental retirement benefits
The Company's internal early retirement benefits and supplemental retirement benefit expenses and liabilities
amount determined based on various assumptions. These assumptions include the discount rate, the average
growth rate of health care costs, retired officers and retired officer’s subsidy rate and other factors. Differences
between actual results and assumptions will be immediately recognized in the cost of the year. Although
management considers reasonable assumptions have been used, but the actual experience or changes in
assumptions will affect the Company's internal early retirement benefits and supplemental retirement benefit costs
and liabilities balance.
(15) Accrued liabilities
According with the terms of the contract, the existing knowledge and historical experience, product quality
assurance and expected contract losses, delay in delivery of liquidated damages are estimated and recognized as
accrued liabilities. In these matters has been the formation of a current obligation, and fulfilling the duty is likely
to lead to the outflow of economic benefits of the Company, the Company or the best estimate of the current
obligation expenditure required recognized as a accrued liabilities. Recognition and measurement of accrued
liabilities is dependent on the judgment of management. In the processing of judgment the company needed to
appraise the related risks, uncertainties and time value of money and other factors.
The Company will sell, repair and renovation of goods sold to provide customers with quality after-sales service
commitment is accrued liabilities. Accrued liabilities have considered the recent experience in the maintenance
data, but recent maintenance experience may not reflect future maintenance. Any increase or decrease in the
accrued liabilities may affect the profit or loss in future.
V. Taxation
1. Taxes and surcharges applicable to the Company
Taxes and surcharges Tax base Tax rate%
Revenues from sales of products and raw
Value added tax 0, 17
materials
Business tax Business tax taxable revenue 5
Sum of VAT payable, consumption duty payable
Urban maintenance
and business tax payable for the reporting 7
and construction surcharge
period, and exempt and deductible tax
Sum of VAT payable, consumption duty payable
Education surcharge and business tax payable for the reporting 3
period, and exempt and deductible tax
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Sum of VAT payable, consumption duty payable
Local education surcharge and business tax payable for the reporting 2
period, and exempt and deductible tax
Corporate income tax Taxable profits 25
Products, raw materials export sales applied the policy of exemption, reduction and refund of VAT, the rate is 0%.
2. Taxes and surcharges applicable to the primary subsidiaries
(1) TsannKuen (Zhangzhou) Enterprise Co., Ltd. (hereafter, TKL)
Taxes and surcharges Tax base Tax rate%
Revenues from sales of products and raw
Value added tax 0, 17
materials
Business tax Business tax taxable revenue 5
Sum of VAT payable, consumption duty payable
Urban maintenance
and business tax payable for the reporting 5
and construction surcharge
period, and exempt and deductible tax
Sum of VAT payable, consumption duty payable
Education surcharge and business tax payable for the reporting 3
period, and exempt and deductible tax
Sum of VAT payable, consumption duty payable
Local education surcharge and business tax payable for the reporting 2
period, and exempt and deductible tax
Corporate income tax Taxable profits 15
Products, raw materials export sales applied the policy of exemption, reduction and refund of VAT, the rate is 0%.
In accordance with the “The Notice Regarding to Fujian Province 2011 First and Second Group of High
Technology Enterprise Review” (No. Mingkegao [2012]1), TKL was identified as Fujian Province 2011 first
group of reviewed High Technology Enterprise (The certification No. GF201135000115), the validity is from the
year 2011 to 2013. The company carried out application for high-tech enterprises.
(2) TsannKuen (Zhangzhou) South Port Electronics Enterprise Co., Ltd. (hereafter, TKN)
Taxes and surcharges Tax base Tax rate%
Revenues from sales of products and raw
Value added tax 0, 17
materials
Business tax Business tax taxable revenue 5
Urban maintenance Sum of VAT payable, consumption duty 5
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Taxes and surcharges Tax base Tax rate%
and construction surcharge payable and business tax payable for the
reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Education surcharge 3
reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Local education surcharge 2
reporting period, and exempt and deductible
tax
Corporate income tax Taxable profits 25
Products, raw materials export sales applied the policy of exemption, reduction and refund of VAT, the rate is 0%.
(3) TsannKuen China (Shanghai) Enterprise Co., Ltd. (hereafter, TKS)
Taxes and surcharges Tax base Tax rate%
Revenues from sales of products and raw
Value added tax 17
materials
Business tax Business tax taxable revenue 5
Sum of VAT payable, consumption duty
Urban maintenance payable and business tax payable for the
1
and construction surcharge reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Education surcharge 3
reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Local education surcharge 2
reporting period, and exempt and deductible
tax
Corporate income tax Taxable profits 25
(4) Shanghai Canxing Trading Co., Ltd. (hereafter, STD)
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Taxes and surcharges Tax base Tax rate%
Revenues from sales of products and raw
Value added tax 17
materials
Business tax Business tax taxable revenue 5
Sum of VAT payable, consumption duty
Urban maintenance payable and business tax payable for the
1
and construction surcharge reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Education surcharge 3
reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Local education surcharge 2
reporting period, and exempt and deductible
tax
Corporate income tax Taxable profits 25
(5) Xiamen Star Comgistic Trading Co., Ltd.
Taxes and surcharges Tax base Tax rate%
Revenues from sales of products and raw
Value added tax 17
materials
Business tax Business tax taxable revenue 5
Sum of VAT payable, consumption duty
Urban maintenance payable and business tax payable for the
7
and construction surcharge reporting period, and exempt and deductible
tax
Sum of VAT payable, consumption duty
payable and business tax payable for the
Education surcharge 3
reporting period, and exempt and deductible
tax
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Taxes and surcharges Tax base Tax rate%
Sum of VAT payable, consumption duty
payable and business tax payable for the
Local education surcharge 2
reporting period, and exempt and deductible
tax
Corporate income tax Taxable profits 25
(6) PT. STAR COMGISTIC INDONESIA
Category of taxes Tax basis Tax (fare) rate%
VAT Revenues from sales of product and raw
material 10(note)
Enterprise income tax Taxable income 25
P.S.: The legal tax rate of VAT 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.
VI. Business combination and consolidated financial statement
1. Subsidiaries
(1) Subsidiaries obtained by establishment and investment
Register Business Registered
Subsidiaries name Type Business scope
ed place nature capital
Development, production and sales of
small home electronic appliance, new
style of electronic device,
light-industrial product, and modern
furniture and relative modules,
Manufact communication equipment, all kinds of
Tsann Kuen (Zhangzhou) 160,000,000
Holding Zhangzh ure home
Enterprise Co., lamps and lighting devices such as
subsidiary ou electronic
Ltd.(TKL) USD
appliance
mechanical and electrical product.
Processing and manufacturing
non-ferrous metal composite materials
and new alloy material; Sales of the
company products and semi-finished
products; providing after-sales service
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Register Business Registered
Subsidiaries name Type Business scope
ed place nature capital
and technical services; contracting the
company business scope of processing
according to the buyer’s materials and
samples and assembling parts supplied
by buyers and compensation trade
business. The wholesale of all kinds of
home appliances, electronic products,
water purification equipment, air
purification equipment,
communications equipment, security
products and prepackaged foods
Subsidiaries obtained by establishment and investment (continued)
The proportion
The
Actual amount of of
proportion
Subsidiaries name investments at the Other essential investment holding
of voting
period-end shares
rights（%）
（%）
TKL 120,000,000.00 USD 0.00 75.00 75.00
Subsidiaries obtained by establishment and investment (continued)
Included in
Subsidiaries name consolidated Minority interest Deductible minority interests
statement
TKL Yes 307,129,227.83 0.00
(2) Subsidiaries obtained by business combination under same control
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Registered Business Registered
Subsidiaries name Type Business scope
place nature capital
Production and sales of household
appliances, electronics, light industrial
products and modern office supplies
Manufacture and relevant modules. All kinds of
Tsann Kuen China
Sino-foreign of small 40,000,000.00
(Shanghai) Enterprise Shanghai computers and peripheral equipment
joint venture household USD
Co., Ltd. (TKS)
appliances
and components, the development of
computer software, IC packaging and
testing and sales of self-produced
products
Subsidiaries obtained by business combination under same control (continued)
Actual amount of The proportion of The proportion of
Subsidiaries name investments at the Other essential investment
holding shares（%） voting rights（%）
period-end
25,000,000.00 USD 0.00 62.50 62.50
TKS
Subsidiaries obtained by business combination under same control (continued)
Included in
Subsidiaries name Minority interest Deductible minority interests
consolidated statement
Yes 35,189,636.17 0.00
TKS
2. Sub-subsidiaries
(1)Sub-subsidiaries obtained by establishment and investment
Regist
Registered
Sub-subsidiaries name Type ered Business nature Business scope
capital
place
Development and production of small home
electronic appliance, new style of electronic
device, light-industrial product, and modern
furniture; design and manufacture related
model to the above products. Processing
Tsann Kuen (Zhangzhou) Manufacture and manufacturing non-ferrous metal
Subsidiary of
South Port Electronics Zhang home electronic 5,000,000.00
holding composite materials, new type of alloy
Enterprise Co., Ltd. zhou appliance CNY
subsidiary
(TKN)
material. Sale of self-produced products
and semi-finished product. The wholesale
of electronic, chemical products, metal
plates, metal materials, electrical home
appliances products Commission agency
business
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Regist
Registered
Sub-subsidiaries name Type ered Business nature Business scope
capital
place
Tsann Kuen (Zhangzhou)
Non-enterprise Secondary
Profession and Zhang 3,000,000.00
unit of holding vocational Secondary vocational education
Technology Institute zhou CNY
subsidiary education
(LTC)
Engaged in import and export of goods and
technology import and export business, the
sale of household electrical appliances,
Subsidiary of
Shanghai Canxing Shang Sales of home 4,950,000.00 calculators and accessories, communication
holding
Trading Co.,Ltd. (STD) hai electronic CNY equipment, daily provisions, lighting
subsidiary
equipment, electrical equipment, office
supplies. Roasted coffee, wholesale;
Pre-packaged food
Wholesale, retail, general merchandise,
home electronic appliance, computer and its
fitting equipment, communication
Subsidiary of equipments, mechanical and electronic
Xiamen Star Comgistic Xiame Sales of home 28,000,000.00
holding equipments, office equipments, kitchen
Trading Co.,Ltd. (SCCX) n electronic CNY
subsidiary appliance and related complete product;
Import or export products or technology,
but those products prohibit by the Country
are exempt.
Sub-subsidiaries obtained by establishment and investment (continued)
Actual amount of The proportion The proportion
Sub-subsidiaries
investments at the Other essential investment of holding shares of voting rights
name period-end (%) (%)
TKN 3,750,000.00 CNY 0.00 56.25 75.00
LTC 3,000,000.00 CNY 0.00 75.00 100.00
STD 4,950,000.00 CNY 0.00 56.25 100.00
SCCX 28,000,000.00 CNY 0.00 75.00 100.00
Sub-subsidiaries obtained by establishment and investment (continued)
Included in
Sub-subsidiaries name consolidated statement
Minority interest Deductible minority interests
TKN Yes 1,452,178.02 0.00
LTC Yes 0.00 0.00
STD Yes 0.00 0.00
SCCX Yes 0.00 0.00
(2) Sub-subsidiaries obtained by business combination under same control
□ Applicable √ Inapplicable
(3) Sub-subsidiaries obtained by business combination under same control
Sub-subsidiaries Registered Business Registered
Type Business scope
name place nature capital
Subsidiary
East Sino Development Investment 135,993,000
of holding Hong Kong Investment
Limited company HKD
subsidiary
PT. STAR Subsidiary Manufacture
17,500,000 Produce and sale of display/LCD
COMGISTIC of holding Indonesia of home
USD
INDONESIA (SCI) subsidiary electronic TV/chandelier/table lamps/LED
71
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Sub-subsidiaries Registered Business Registered
Type Business scope
name place nature capital
lights/fluorescent
lamp/dehumidifier/mixer/juice/machine/mosquito
killer/coffee pot / hair
dryer/fan/humidifier/electric oven, microwave
oven, toaster/rice cooker/iron/deep fryer
Sub-subsidiaries obtained by business combination under same control (continued)
The proportion of The proportion
Sub-subsidiaries Actual amount of investments
Other essential investment holding shares of voting rights
name at the period-end
(%) (%)
East Sino 16,300,00 USD 0.00 75.00 100.00
SCI 17,425,000 USD 0.00 74.68 99.57
Sub-subsidiaries obtained by business combination under same control (continued)
Included in consolidated
Sub-subsidiaries name statement
Minority interest Deductible minority interests
East Sino Yes 0.00 0.00
SCI Yes 264,799.62 0.00
3. Special purpose entities or operating entities with control right formed by entrusted operation or lease:
Naught
4. Explanation on changes in consolidated scope
There was no change in consolidated scope in the reporting period.
5. Exchange rates of major items in financial statements for foreign entities
Item Assets and liabilities
30 Jun. 2014 31 Dec. 2013
PT. STAR
COMGISTIC $1 = RMB 6.1528 $1= RMB 6.0969
INDONESIA
East Sino HK $1 = RMB 0.79375 HK $1 = RMB 0.78623
Item Cash flow of income and expenses
30 Jun. 2014 31 Dec. 2013
PT. STAR
COMGISTIC $1 = RMB 6.14313 $1 = RMB 6.1896
INDONESIA
East Sino HK $1 = RMB =0.79198 HK $1 = RMB =0.79791
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
2014.06.30 2013.12.31
Item
Original currency Exchange rate Standard money Original currency Exchange rate Standard money
Cash stock
RMB 274,070.66 300,733.40
HKD 8,352.60 0.7938 6,629.88 18,027.60 0.7862 14,173.84
USD 7,365.80 6.1528 45,320.31 19,819.38 6.0969 120,836.78
JPY 1,454,791.80 0.0608 88,473.16 779,359.80 0.05777 45,024.40
IDR 33,172,614.24 0.0005 17,876.84 72,349,200.00 0.0005 36,174.04
CHF 7.00 6.9674 48.77 7.00 6.8029 47.62
EUR 25,358.32 8.3946 212,872.95 32,389.57 8.4189 272,684.55
HUF 1,313.50 10.4978 13,788.86 12,019.00 10.0556 120,858.26
Subtotal 81,016.00 0.0273 2,211.74 81,016.00 0.0281 2,276.55
RMB 661,293.17 912,809.44
Deposit in bank
RMB 259,200,480.41 524,280,964.87
HKD 2,413,125.94 0.7938 1,915,418.71 543,427.39 0.7862 427,258.92
USD 128,169,763.57 6.1528 788,602,947.55 48,461,432.03 6.0969 295,464,504.93
JPY 105,156,610.00 0.0608 6,395,099.23 119,508,051.00 0.05777 6,904,099.62
EUR 108,499.73 8.3946 910,811.84 580,582.62 8.4189 4,887,867.01
IDR 3,084,974,069.76 0.0005 1,685,132.17 2,422,949,991.95 0.0005 1,211,454.89
CHF 183,055.44 6.9674 1,275,420.47
Subtotal 1,059,985,310.38 833,176,150.24
Total 1,060,646,603.55 834,088,959.68
Note: in the reporting period, withdrawing deposit interest income thus RMB 896,886,338.47 of restricted monetary funds was
deducted from cash flow statement.
2. Trading financial assets
(1) Trading financial assets
Item 2014.06.30 2013.12.31
Derivative financial assets 0.00 21,120,100.00
Total 0.00 21,120,100.00
3. Notes receivable
(1) Category of notes receivable
Item 2014.06.30 2013.12.31
Bank acceptance bill 2,792,866.00 2,467,447.00
Total 2,792,866.00 2,467,447.00
(2) There was not receivable pledged at period-end
(3) There was not transferred to accounts receivable because drawer of the notes fails to execute the contract
or agreement, and undue notes endorsed to other parties at the end of the period.
4. Accounts receivable
(1) Accounts receivable listed by categories
2014.06.30
Item Proportion Bad debt Proportion
Amount
(%) provision (%)
Accounts receivable with significant single amount and
0.00 0.00 0.00 0.00
individually withdrawn bad debt provision
Accounts receivable for which bad debt provisions are
made on the group basis
Aging group 186,039,121.30 94.89 2,263,145.43 1.22
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Related party group 10,020,768.95 5.11 0.00 0.00
Subtotal of group 196,059,890.25 100.00 2,263,145.43 1.15
Accounts receivable with insignificant single amount and
0.00 0.00 0.00 0.00
individually withdrawn bad debt provision
Total 196,059,890.25 100.00 2,263,145.43 1.15
Continued
2013.12.31
Item Proportion Bad debt Proportion
Amount
(%) provision (%)
Accounts receivable with significant single amount and
0.00 0.00 0.00 0.00
individually withdrawn bad debt provision
Accounts receivable for which bad debt provisions are
made on the group basis
Aging group 247,231,980.91 94.59 7,559,178.67 3.06
Related party group 14,150,673.62 5.41 0.00 0.00
Subtotal of group 261,382,654.53 100.00 7,559,178.67 2.89
Accounts receivable with insignificant single amount and
0.00 0.00 0.00 0.00
individually withdrawn bad debt provision
Total 261,382,654.53 100.00 7,559,178.67 2.89
(2) Accounts receivable aging list
2014.06.30 2013.12.31
Item
Amount Proportion (%) Amount Proportion (%)
Within 1 year 194,788,572.30 99.35 256,513,081.90 98.14
1 to 2 year 215,570.56 0.11 272,154.68 0.10
2 to 3 year 30,427.20 0.02 3,604,829.01 1.38
Over 3 year 1,025,320.19 0.52 992,588.94 0.38
Total 196,059,890.25 100.00 261,382,654.53 100.00
（3）In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
2014.06.30 2013.12.31
Aging Proportion Bad debt Proportion Bad debt
Amount Amount
(%) provision (%) provision
Within one year 184,767,803.35 99.31 991,827.48 242,362,408.28 98.03 2,689,606.05
Including 1-90
176,412,006.79 94.82 0.00 216,860,202.08 87.72 0.00
days
91-180 days 7,656,986.71 4.12 765,698.68 24,801,834.53 10.03 2,479,494.54
181-270 days 616,380.62 0.33 184,914.18 700,371.67 0.28 210,111.51
271-365 days 82,429.23 0.04 41,214.62 0.00 0.00 0.00
1-2 years 215,570.56 0.12 215,570.56 272,154.68 0.11 272,154.67
2-3 years 30,427.20 0.02 30,427.20 3,604,829.01 1.46 3,604,829.01
Over 3 years 1,025,320.19 0.55 1,025,320.19 992,588.94 0.40 992,588.94
Total 186,039,121.30 100.00 2,263,145.43 247,231,980.91 100.00 7,559,178.67
（4）In the groups, accounts receivable adopting related party portfolio method to withdraw bad debt
provision:
Name of the borrowers Book balance Bad-debt provision Withdrawing proportion Reason
Withdraw in line with bad-debt
Tsann Kuen Japan Co., Ltd. 1,096,262.38 0.00 0.00
provision policy
Withdraw in line with bad-debt
Canxing Comgistic Co.,Ltd. 8,924,506.57 0.00 0.00
provision policy
Total 10,020,768.95 0.00 0.00
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
(5) Accounts receivable reversed or collected in the reporting period:
Amount of
accumulative bad Amount
Name of entity Reason Judgment debt provision reversed or
before reversed or collected
collected
Spring AG
The customer clearing Can not recovered due
Matallwarenfabrik 1,285,415.02 1,285,415.02
remaining assets allocation to the Customer bankruptcy
Eschlikon
(6) The actual write-off accounts receivable:
Whether occurred because of
Name of entity Nature Time Amount Reason
related party transactions
Interactive Group payment for goods 9 May 2014 3,364,606.64 irrecoverable No
Total 3,364,606.64
（7）Particulars about accounts receivable due to shareholders holding 5% (including 5%) voting rights of
the Company
2014.06.30 2013.12.31
Name of entity Amount of
Amount of provision
Amount Amount provision for bad
for bad debts
debts
Canxing Comgistic Co.,Ltd. 8,924,506.57 0.00 9,066,228.33 0.00
Total 8,924,506.57 0.00 9,066,228.33 0.00
(8) Accounts receivable amount in the top five units
The percentage amount
Name of entity Relationship with the Company Amount Aging
of receivable accounts %
First Non-related relationship 21,200,490.68 Within 1 year 10.81
Second Non-related relationship 19,769,825.29 Within 1 year 10.08
Third Non-related relationship 19,708,435.97 Within 1 year 10.05
Fourth Non-related relationship 14,451,692.89 Within 1 year 7.37
Fifth Non-related relationship 10,644,728.61 Within 1 year 5.43
Total 85,775,173.44 43.74
(9) Accounts receivable affiliated parties
The percentage amount
Name of entity Relationships with the Company Amount of receivable accounts
%
TSANN KUEN JAPAN CO., LTD The ultimate holding company 1,096,262.38 0.56
STAR COMGISTIC CAPITAL CO., LTD. Ultimate holding company 8,924,506.57 4.55
Total 10,020,768.95 5.11
VI. Prepayment
(1) Prepayments according to aging listed below
2014.06.30 2013.12.31
Aging
Amount Proportion Amount Proportion
Within 1 year 5,811,179.20 100.00 4,290,802.70 100.00
Total 5,811,179.20 100.00 4,290,802.70 100.00
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
(2) The top five final prepayments amounts listed below
Name of entity Relationship with the Company Amount Aging unbalanced reason
First Non-related relationship 2,173,881.15 2014 Goods afloat
Second Non-related relationship 1,000,000.00 2014 Goods afloat
Third Non-related relationship 697,497.23 2014 Goods afloat
Fourth Non-related relationship 636,798.82 2014 Goods afloat
Fifth Non-related relationship 174,026.68 2014 Goods afloat
Total 4,682,203.88
(3) Information about amount due from shareholders with more than 5% (including 5%) of the voting
shares of the Company in prepayment
6．Interest receivable
Item 2013.12.31 Increase Decrease 2014.06.30
Deposit interest 110,833.33 8,020,524.99 110,833.33 8,020,524.99
Total 110,833.33 8,020,524.99 110,833.33 8,020,524.99
7. Other accounts receivable
(1) Other receivables listed by type
2014.06.30
Category
Amount Proportion Provision for bad debts Proportion
Other accounts receivable that is individually
0.00 0.00 0.00 0.00
significant and provisions for bad debts individually
Other accounts receivable that provisions for bad
debts by group
Aging group 25,152,569.94 97.00 500,151.20 1.99
Related party group 0.00 0.00 0.00 0.00
Subtotal of group 25,152,569.94 97.00 500,151.20 1.99
Other accounts receivable with insignificant single
amount and individually withdrawn bad debt 778,450.00 3.00 0.00 0.00
provision
Total 25,931,019.94 100.00 500,151.20 1.93
Continued
2013.12.31
Category
Amount Proportion Provision for bad debts Proportion
Other accounts receivable that is individually
significant and provisions for bad debts 0.00 0.00 0.00 0.00
individually
Other accounts receivable that provisions for bad
debts by group
Aging group 32,151,975.05 97.72 561,872.83 1.75
Related party group 0.00 0.00
Subtotal of group 32,151,975.05 97.72 561,872.83 1.75
Other accounts receivable with insignificant
single
749,550.00 2.28 0.00 0.00
amount and individually withdrawn bad debt
provision
Total 32,901,525.05 100.00 561,872.83 1.71
(2) Other accounts receivable aging lists
2014.06.30 2013.12.31
Category
Amount Proportion Amount Proportion
Within 1 year 24,924,213.52 96.12 31,763,515.35 96.54
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
1-2 years 14,045.61 0.05 48,810.76 0.15
2-3 years 983,260.81 3.79 1,038,587.58 3.16
Over 3 years 9,500.00 0.04 50,611.36 0.15
Total 25,931,019.94 100.00 32,901,525.05 100.00
（3）In the group, other accounts receivable that provision for bad debts by aging analysis
2014.06.30 2013.12.31
Category Provision for Provision for
Amount Proportion Amount Proportion
doubtful debts doubtful debts
Within 1 year 24,794,213.52 98.58 141,794.78 31,662,415.35 98.48 72,314.26
Including:1-90
23,624,083.03 93.92 0.00 31,292,573.43 97.33 0.00
days
91-180 days 1,050,003.47 4.17 105,000.35 203,262.55 0.63 20,327.33
181-270 days 116,345.41 0.46 34,903.62 156,513.76 0.49 46,954.13
271-365 days 3,781.61 0.02 1,890.81 10,065.61 0.03 5,032.81
1-2 years 14,045.61 0.06 14,045.61 48,810.76 0.15 48,809.68
2-3 years 334,810.81 1.33 334,810.81 390,137.58 1.21 390,137.53
Over 3 years 9,500.00 0.04 9,500.00 50,611.36 0.16 50,611.36
Total 25,152,569.94 100.00 500,151.20 32,151,975.05 100.00 561,872.83
(4) There was no other accounts receivable that provision for bad debts by related party group in the
reporting period
(5) There was no accounts receivable reversed or recovered in the reporting period
(6) Other receivables provision for bad debt provision that is not individually significant but has paid
separately for testing in the reporting period
Other receivables Book balance bad-debt provision Provision ratio (%) Reason for provision
China Export and Credit Insurance
648,450.00 0.00 0.00 Cash deposit
Corporation Fujian Branch
Zhejiang Tomall Techenology Co., ltd 130,000.00 0.00 0.00 Cash deposit
Total 778,450.00 0.00 0.00
(7) No write-off of other receivables in the reporting period
(8) Information about amount due from shareholders with more than 5% (including 5%) of the voting
shares of the Company in other receivables
(9) Information of top five other accounts receivable in the reporting period
Relationship
Name of entity Amount Aging Proportion of the total %
with the Company
First Non-related relationship 12,400,000.00 Within 1 year 47.82
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Second Non-related relationship 1,895,129.15 Within 1 year 7.31
Third Non-related relationship 845,394.72 Within 1 year 3.26
Fourth Non-related relationship 844,556.58 Within 1 year 3.26
Fifth Non-related relationship 648,450.00 1-3 years 2.50
Total 16,633,530.45 64.15
8. Inventory
(1) Category
2014.06.30 2013.12.31
Item Impairment of Impairment of
Book balance Book value Book balance Book value
inventories inventories
Raw materials 102,649,926.72 21,687,041.11 80,962,885.61 95,467,381.56 29,402,004.84 66,065,376.72
Unfinished products 11,989,079.09 0.00 11,989,079.09 15,586,857.54 0.00 15,586,857.54
Self-made semi-
19,372,503.90 5,410,120.22 13,962,383.68 24,375,372.80 5,410,120.22 18,965,252.58
manufactured goods
Finished product 100,604,018.95 9,369,424.79 91,234,594.16 111,089,450.63 9,373,855.07 101,715,595.56
Low-value consumption
5,582,105.05 0.00 5,582,105.05 2,295,848.52 0.00 2,295,848.52
goods
Materials in transit 7,285,219.19 0.00 7,285,219.19 5,195,167.98 0.00 5,195,167.98
Total 247,482,852.90 36,466,586.12 211,016,266.78 254,010,079.03 44,185,980.13 209,824,098.90
(2) Impairment of inventories
Decrease in the
Withdrawing in reporting period
Item 2013.12.31 the reporting 2014.06.30
Reversal in the Written off in the
period
reporting period reporting period
Raw materials 29,402,004.84 509,853.27 0.00 8,224,817.00 21,687,041.11
Self-made semi-
5,410,120.22 0.00 0.00 0.00 5,410,120.22
manufactured goods
Finished product 9,373,855.07 373,940.21 0.00 378,370.49 9,369,424.79
Total 44,185,980.13 883,793.48 0.00 8,603,187.49 36,466,586.12
(3) Particulars about impairment of inventories
Proporti
Reason of reversal in the
Item Basis on of the
reporting period
total %
The decline of market prices led to the net realizable value
Raw materials Naught 0.00
lower than the inventory cost of raw materials
The decline of market prices led to the net realizable value
Self-made semi-
lower than the inventory cost of Self-made semi- Naught 0.00
manufactured goods
manufactured goods
The decline of market prices led to the net realizable value
Finished product Naught 0.00
lower than the inventory cost of Finished product
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
9. Other current assets
Item Nature 2014.06.30 2013.12.31
Short-term financial
Financial products 330,000,000.00 50,000,000.00
products of bank
Total 330,000,000.00 50,000,000.00
10. Long-term equity investment
(1) Category of long-term equity investment
Item 2013.12.31 Increase Decrease 2014.06.30
Other equity investments 40,000.00 0.00 0.00 40,000.00
Less: impairment provision of
0.00 0.00 0.00 0.00
long term equity investment
Total 40,000.00 0.00 0.00 40,000.00
(2) List of long-term equity investment
Accounting
Investee Investment Cost 2013.12.31 Increase/Decrease 2014.06.30
method
Xiamen Institute of Foreign
Cost method 40,000.00 40,000.00 0.00 40,000.00
Investment Enterprise
Total 40,000.00 40,000.00 0.00 40,000.00
Continued
Explanation for Impairment
indifferences provision
Share holding Voting between the share Impairm
withdrawn Cash
Investee percentage in percentage in holding percentage ent prov
investee % investee % and voting
in the bonus
ision
percentage in reporting
investee period
Xiamen Institute of Foreign
1.48 1.48 0.00 0.00 0.00
Investment Enterprise
Total 0.00 0.00 0.00
11. Investment property
(1) Investment property calculated by cost
Item 2013.12.31 Increase Decrease 2014.06.30
I. Total original book value 158,724,486.45 0.00 336,900.00 158,387,586.45
1. Houses and buildings 129,463,908.94 0.00 336,900.00 129,127,008.94
2. Land use right 29,260,577.51 0.00 0.00 29,260,577.51
Withdrawal in
Reporting period
II. Accumulated depreciation and amortization 99,991,975.09 4,086,800.56 168,029.54 103,910,746.11
1. Houses and buildings 88,808,698.11 3,775,744.66 168,029.54 92,416,413.23
2. Land use right 11,183,276.98 311,055.90 0.00 11,494,332.88
III. Book value of investment property 58,732,511.36 54,476,840.34
1. Houses and buildings 40,655,210.83 36,710,595.71
2. Land use right 18,077,300.53 17,766,244.63
IV. Accumulated impairment provision of investment property 0.00 0.00 0.00 0.00
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
1. Houses and buildings 0.00 0.00 0.00 0.00
2. Land use right 0.00 0.00 0.00 0.00
V. Book value of investment property 58,732,511.36 54,476,840.34
1. Houses and buildings 40,655,210.83 36,710,595.71
2. Land use right 18,077,300.53 17,766,244.63
Note: ①The Depreciation and amortization amount was RMB 4,086.800.56 (Recorded into the current profits and losses)
②the decrease of investment property was transferred into self -use.
(2) Particulars about the investment real estate property certificate not completed
Item Reason Estimate completed time Book value
Three Village Green Garden
The procedure is not completed Not sure 2,430,894.41
Villa
Total 2,430,894.41
12. Fixed assets
(1) Fixed assets details
Increase in the Decrease in the
Item 2013.12.31 2014.06.30
reporting period reporting period
I. Total original book value 1,687,008,020.96 20,542,198.54 58,349,664.83 1,649,200,554.67
Including: Houses and buildings 79,818,099.14 6,992,658.13 114,149.88 86,696,607.39
Machineries 218,158,090.97 1,404,896.90 26,396,715.58 193,166,272.29
Vehicles 1,302,463,791.38 10,423,304.36 31,172,354.04 1,281,714,741.70
Electronics, module and others 21,322,088.94 420,780.67 494,445.33 21,248,424.28
Improvement expense of fixed assets 65,245,950.53 1,300,558.48 172,000.00 66,374,509.01
Increase in the
Charge for the period
reporting period
II. Accumulated depreciation 1,457,146,998.87 168,029.54 21,674,681.51 45,664,273.08 1,433,325,436.84
Including: Houses and buildings 33,431,646.39 168,029.54 1,284,396.74 97,169.62 34,786,903.05
Machineries 153,212,641.17 3,055,348.78 16,128,702.29 140,139,287.66
Vehicles 1,205,389,561.30 13,976,775.14 28,846,011.66 1,190,520,324.78
Electronics, module and others 20,299,827.10 123,544.71 483,080.94 19,940,290.87
Improvement expense of fixed assets 44,813,322.91 3,234,616.14 109,308.57 47,938,630.48
III. The net book value of fixed assets 229,861,022.09 215,875,117.83
Including: Houses and buildings 46,386,452.75 51,909,704.34
Machineries 64,945,449.80 53,026,984.63
Vehicles 97,074,230.08 91,194,416.92
Electronics, module and others 1,022,261.84 1,308,133.41
Improvement expense of fixed assets 20,432,627.62 18,435,878.53
IV. Total impairment provision 56,708,057.59 0.00 2,920,419.99 9,583,599.88 50,044,877.70
Including: Houses and buildings
Machineries 30,700,385.29 2,895,714.97 8,229,415.73 25,366,684.53
Vehicles 25,008,561.96 0.00 1,345,177.67 23,663,384.29
Electronics, module and others 9,363.36 0.00 9,006.48 356.88
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Improvement expense of fixed assets 989,746.98 24,705.02 0.00 1,014,452.00
V. Total book value of fixed assets 173,152,964.50 -168,029.54 -4,052,902.96 3,101,791.87 165,830,240.13
Including: Houses and buildings 46,386,452.75 -168,029.54 5,708,261.39 16,980.26 51,909,704.34
Machineries 34,245,064.51 -4,546,166.85 2,038,597.56 27,660,300.10
Vehicles 72,065,668.12 -3,553,470.78 981,164.71 67,531,032.63
Electronics, module and others 1,012,898.48 297,235.96 2,357.91 1,307,776.53
Improvement expense of fixed assets 19,442,880.64 -1,958,762.68 62,691.43 17,421,426.53
Note: Amount of depreciation was RMB 21,674,681.5; original price of construction project to fixed asset was RMB6, 015,356.99.
(2) Particulars about fixed assets ownership restricted
There was no fixed assets ownership restricted
(3) Fixed assets hired through the financing lease
There was no fixed assets hired through the financing lease
(4) Fixed assets hired through operating lease
Accrued Impairment
Item Original book value Book value
depreciation provision
Electronics, module and others 3,357,115.05 2,308,335.19 0.00 1,048,779.86
Total 3,357,115.05 2,308,335.19 0.00 1,048,779.86
(5) Hold-for-sale fixed assets in the reporting period.
There was no hold-for-sale fixed asset
（6）Particulars about property right certificate of fixed assets not completed
Item Reason Estimate completed time Book value
Three Village Green Garden
The procedure is not completed Not sure 1,286,944.10
Villa
Elite garden The procedure is not completed 2015 533,523.06
Total 1,820,467.16
13. Projects under construction
(1) Information of construction in progress
2014.06.30 2013.12.31
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Industrial plant 4,622,309.63 0.00 4,622,309.63 9,693,098.24 113,498.10 9,579,600.14
Other 0.00 0.00 0.00 1,310,071.84 0.00 1,310,071.84
Total 4,622,309.63 0.00 4,622,309.63 11,003,170.08 113,498.10 10,889,671.98
Increase in Transferred Engineering
Item Budget Number 2013.12.31 Other decrease 2014.06.30 Capital source
reporting period to investment
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
fixed assets proportion
of the
budget (%)
Industrial plant 12,660,600.00 9,693,098.24 1,522,314.28 6,015,356.99 577,745.90 4,622,309.63 Owned fund 88.59%
Other 1,310,071.84 1,310,071.84 0.00 0.00 1,310,071.84 0.00 Owned fund 100.00%
Total 13,970,671.84 11,003,170.08 1,522,314.28 6,015,356.99 1,887,817.74 4,622,309.63 89.66%
(2) Changes in significant construction in progress
(3) Provision for impairment of construction in progress
Item 2013.12.31 Increase Decrease 2014.06.30 Reason
Industrial Have been
113,498.10 -113,498.10 0.00 0.00
plant scrapped
Total 113,498.10 -113,498.10 0.00 0.00
14. Intangible assets
Item 2013.12.31 Increase in reporting period Decrease in reporting period 2014.06.30
I. Total original book value 25,955,044.35 110,626.63 0.00 26,065,670.98
Land use rights 12,358,778.66 110,626.63 0.00 12,469,405.29
Software 13,596,265.69 0.00 0.00 13,596,265.69
II. Accumulative amortization 14,151,791.48 535,676.51 0.00 14,687,467.99
Land use rights 1,220,701.89 212,654.39 0.00 1,433,356.28
Software 12,931,089.59 323,022.12 0.00 13,254,111.71
III.Total impairment provision 0.00 0.00 0.00 0.00
Land use rights 0.00 0.00 0.00 0.00
Software 0.00 0.00 0.00 0.00
IV. Total book value of intangible assets 11,803,252.87 11,378,202.99
Land use rights 11,138,076.77 11,036,049.01
Software 665,176.10 342,153.98
Note: Amortization amount in the reporting period was RMB 535,676.51
Item 2013.12.31 Increase Amortization Other decrease 2014.06.30 Reason of other decrease
Telecommunications Engineering 1,077,866.57 0.00 168,000.06 0.00 909,866.51 No
Housing renovation costs 3,229,554.02 1,561,595.00 823,931.13 0.00 3,967,217.89 No
Landscape greening projects 48,446.04 0.00 16,149.00 0.00 32,297.04 No
Total 4,355,866.63 1,561,595.00 1,008,080.19 0.00 4,909,381.44
15. Long-term unamortized expenses
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
16. Deferred income tax assets and deferred income tax liabilities
(1) Deferred income tax assets and deferred income tax liabilities was confirmed
(1) Deferred income tax assets was confirmed
2014.06.30 2013.12.31
Item Deductible temporary Deductible temporary
Deferred income Deferred income
differences deductible differences deductible
tax assets tax assets
losses losses
Provision for assets impairment 11,355,850.97 75,705,673.12 14,197,675.96 94,504,286.63
accrued expenses 848,194.08 5,654,627.20 1,184,156.65 7,894,377.69
trading financial liabilities 847,210.65 5,648,071.00 0.00 0.00
Accrued wages 3,153,450.13 21,023,000.88 4,151,688.21 27,677,921.40
undistributed deficit 2,831,864.96 11,327,459.85 4,228,126.98 16,912,508.10
Total 19,036,570.79 119,358,832.05 23,761,647.80 146,989,093.82
(2) Deferred income tax liabilities was confirmed
2014.06.30 2013.12.31
Deductible temporary Deductible temporary
Item Deferred income Deferred income
differences deductible differences deductible
tax assets tax assets
losses losses
Tradable financial
3,168,015.00 21,120,100.00
assets
Depreciation of
217,345.05 869,380.20 90,727.65 362,910.60
fixed assets
Total 217,345.05 869,380.20 3,258,742.65 21,483,010.60
(2) List of unrecognized deferred income tax assets
Item 2014.06.30 2013.12.31
Impairment of fixed assets 8,938,601.12 9,054,369.59
Impairment of construction in
113,498.10
process
Dad-debt provision 929,591.24 2,560,961.02
Accrued expenses 16,353,219.54 23,608,464.27
Provision for inventories 3,700,894.97 2,895,471.98
Accrued payroll 2,249,276.58 2,340,109.32
undistributed deficit 75,196,858.61 61,589,129.07
Total 107,368,442.06 102,162,003.35
(3) Unrecognized deferred income tax assets will be deductible losses expire the following year
Year 2014.06.30 2013.12.31
2014 5,782,257.42 5,782,257.42
2015 3,301,119.36 3,636,039.42
2016 10,716,556.41 12,638,980.26
2017 14,220,503.87 17,618,598.88
2018 34,426,305.63 21,913,253.09
2019 6,750,115.92 0.00
Total 75,196,858.61 61,589,129.07
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
17. List of provision for assets impairment
Decrease in
Increase in reporting period
Item 2013.12.31 2014.06.30
reporting period
Reversal Written-off
Provision for bad debts 8,121,051.50 -3,278,563.25 -1,285,415.02 3,364,606.64 2,763,296.63
Provision for inventories 44,185,980.13 883,793.48 0.00 8,603,187.49 36,466,586.12
Impairment of fixed assets 56,708,057.59 2,920,419.99 0.00 9,583,599.88 50,044,877.70
Impairment of construction in process 113,498.10 -113,498.10 0.00 0.00 0.00
Total 109,128,587.32 412,152.12 -1,285,415.02 21,551,394.01 89,274,760.45
18. Other non-current assets
Item 2014.06.30 2013.12.31
Other non-current assets 2,068,410.91 0.00
Total 2,068,410.91 0.00
19. Short-term borrowing
Item 2014.06.30 2013.12.31
Borrow money on credit 481,764,240.00 30,484,500.00
Total 481,764,240.00 30,484,500.00
20. Trading financial liabilities
Item 2014.06.30 2013.12.31
Derivative financial liabilities 5,648,071.00 0.00
Total 5,648,071.00 0.00
21. Notes payable
Item 2014.06.30 2013.12.31
Bank acceptance 2,205,771.75 0.00
Trade acceptance 5,540,087.16 30,577,887.89
Total 7,745,858.91 30,577,887.89
Note: Bank and commercial acceptance bill expires in Dec. 2014
22. Accounts payable
(1) Information
Aging 2014.06.30 2013.12.31
Within 1 year 497,581,934.06 639,812,846.15
Over 1 years 2,673,325.00 8,816,310.01
Total 500,255,259.06 648,629,156.16
(2) The accounts payable to shareholders with more than 5% (including 5%) of the voting shares of the
Company
Name of entity Proceeds content 2014.06.30 2013.12.31
STAR COMGISTIC CAPITAL CO., LTD. For materials 737,323.25 753,382.59
Total 737,323.25 753,382.59
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
(3) Notes of the accounts payable aging over one year:
Reason for Paid back after Balance
Name of entity Amount
unsettlement Sheet Day amount
Xinda ELECTRIC MOTOR
CO., LTD 3,050,108.51 Quality dispute No
Ningbo Jethro electric
Guarantee Money
appliance co., LTD 979,964.67 No
Ningbo Chaochao Electrical
Appliance Co., Ltd. 500,237.01 Guarantee Money No
Total 4,530,310.19
23. Advance from customers
(1) Information
Aging 2014.06.30 2013.12.31
Within 1 year 15,912,414.16 7,788,806.71
Over 1 year 2,724,686.63 2,642,847.88
Total 18,637,100.79 10,431,654.59
(2) There was no advance from customers of shareholders with more than 5% (including 5%) of the
voting shares of the Company
(3) Notes of advance from customers aging over one year:
Name of creditors Amount in advance Reason not carry forward
SEB Asia Ltd. 564,715.71 Settlement was uncompleted
zojirushi corporation 251,132.83 Settlement was uncompleted
HWI International Led 192,038.59 Settlement was uncompleted
Arzum Asia Pacific Limited 190,143.00 Settlement was uncompleted
BIALETTI INDUSTRIE SPA 165,626.09 Settlement was uncompleted
Total 1,363,656.22
24. Payroll payable
Increase in
Item 2013.12.31 Paid during the period 2014.06.30
reporting period
Salary, bonus, allowance, subsidy 30,018,030.72 101,828,039.58 107,662,931.48 24,183,138.82
Employee welfare 0.00 3,837,923.11 967,222.05 2,870,701.06
ISocial insurance 1,936,390.75 8,070,103.96 9,831,333.58 175,161.13
Including Medical insurance 21,081.58 2,273,657.84 2,277,903.59 16,835.83
Basic endowment insurance 1,714,773.77 3,650,479.25 5,226,504.02 138,749.00
Annuity payment 0.00 0.00 0.00 0.00
Unemployment insurance expense 194,573.70 419,759.52 602,418.87 11,914.35
Employment injury insurance 2,976.53 1,102,511.69 1,101,601.22 3,887.00
Maternity insurance 2,985.16 623,695.67 622,905.88 3,774.95
Housing fund 8,767,473.49 2,820,123.01 2,206,854.26 9,380,742.24
Labour union fee and employee education fee 0.00 0.00 0.00 0.00
Non-monetary welfare 0.00 0.00 0.00 0.00
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Redundancy compensation 0.00 2,200,346.61 2,200,346.61 0.00
Other 26,434.00 18,726.00 28,265.00 16,895.00
Total 40,748,328.96 118,775,262.27 122,896,952.98 36,626,638.25
No any amount in arrears in the payroll payable.
25. Taxes payable
Taxes kind 2014.06.30 2013.12.31
Business tax 687,949.01 1,020,157.31
Corporate income tax 726,975.56 4,003,589.82
VAT -5,696,272.29 -24,357,591.75
Personal income tax 7,643.47 524,425.59
Education surtax 554,162.17 637,756.19
Urban maintenance and construction tax 528,697.98 319,172.35
building taxes 2,381,276.28 725,180.52
Others -809,567.82 -17,127,309.97
26. Interest payable
Item 2014.06.30 2013.12.31
Interest payable on short-term borrowings 3,270,214.70 108,661.00
Total 3,270,214.70 108,661.00
27. Other accounts payable
(1) Other accounts payable
Aging 2014.06.30 2013.12.31
Within 1 year 177,395,371.36 57,226,287.65
Over 1 year 14,130,330.72 12,150,482.66
Total 191,525,702.08 69,376,770.31
(2) Other accounts payable from shareholders with more than 5% (including 5%) of the voting shares of
the Company
Name of entity Content 2014.06.30 2013.12.31
STAR COMGISTIC CAPITAL CO., LTD Agency fees 35,788.56 36,068.65
Sion Global Development Ltd. Money lending 123,056,000.00 0.00
Fillman Investments Limited Money lending 21,666,164.62 12,300,998.74
Total 144,757,953.18 12,337,067.39
(3) Notes of the other large amount accounts payable aging over 1 year
whether to return
Name of entity Amount Reason of outstanding in the future after
the report date
Shanghai Taopu Management Service Co., Ltd. 1,000,000.00 Cash pledge No
Fujian Zhangzhou Xinge non-ferrous Metal Co., Ltd. 800,000.00 Cash pledge No
Xiamen Tsann Kuen Trading Co., Ltd. 365,539.26 Cash pledge No
Shanghai Tanghai Investment Co., Ltd. 360,000.00 Cash pledge No
Zhangzhou Jia Fengruichang Electronics Co., Ltd. 330,000.00 Cash pledge No
Total 2,855,539.26
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
28. Other non current liabilities
Item 2014.6.30 2013.12.31
Vocational education subsidies 222,600.00 222,600.00
Total 222,600.00 222,600.00
29. Capital stock
2013.12.31 Changes in this year (+-) 2014.06.30
Capital
New transfer
Item Share
Amount % share into Other Subtotal Amount %
donation
share
I. Limited sale share
1. National holdings 0 0 0 0 0 0 0 0 0
2. Domestic legal person shares 0 0 0 0 0 0 0 0 0
3.Other domestic 0 0 0 0 0 0 0 0 0
shareholding
Domestic individual shares 0 0 0 0 0 0 0 0 0
4. Foreign shares 0 0 0 0 0 0 0 0 0
Including: Foreign legal person 0 0 0 0 0 0 0 0 0
shares
Foreign individual shares 0 0 0 0 0 0 0 0 0
Total of limited stock sale 0 0 0 0 0 0 0 0 0
condition
II. Unlimited shares sale 0 0 0 0 0 0 0 0 0
conditions
1.RMB Common share 0 0 0 0 0 0 0 0 0
2.Domestically listed foreign 0 0 0 0 0
185,391,680.00 100.00 185,391,680.00 100.00
shares
3.Overseas listed foreign shares 0 0 0 0 0 0 0 0 0
4.Other 0 0 0 0 0 0 0 0 0
Total of Unlimited sale 0 0 0 0 0
185,391,680.00 100.00 185,391,680.00 100.00
shares
III. Total amount of shares 185,391,680.00 100.00 0 0 0 0 0 185,391,680.00 100.00
30. Capital reserves
Item 2013.12.31 Increase Decrease 2014.6.30
Share premium 210,045,659.80 0.00 0.00 210,045,659.80
Other capital reserve 68,408,787.27 0.00 0.00 68,408,787.27
Total 278,454,447.07 0.00 0.00 278,454,447.07
31. Surplus reserves
Category 2013.12.31 Increase Decrease 2014.6.30
Statutory surplus reserve 11,495,983.58 0.00 0.00 11,495,983.58
Total 11,495,983.58 0.00 0.00 11,495,983.58
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
32. Retained profits
Extracting or
Item 2014.6.30 2013.12.31 allocation
proportion
Opening balance of retained profits before
46,733,303.43 20,797,991.70
adjustments
Adjustments of opening balance of retained
0.00 0.00
profits( increase +, decrease-)
Opening balance of retained profits after adjustments 46,733,303.43 20,797,991.70
Add: Net profit attributable to owners of the
14,857,989.76 47,069,386.29
Company
Less: Withdrawal of statutory surplus reserves 0.00 5,375,781.76 10%
Withdrawal of discretional surplus reserves 0.00 0.00
Withdrawal of provision for general risk 0.00 0.00
Dividend of common stock payable 25,954,835.20 15,758,292.80
Dividend of common stock converted into share
0.00 0.00
capital
Closing retained profits 35,636,457.99 46,733,303.43
33. Revenue and Cost of Sales
(1) Revenue and Cost of Sales
Item Current overall tally Accumulated last year
Sales of main business 853,536,487.98 845,775,086.33
Other operating income 36,679,811.53 32,069,121.47
Total 890,216,299.51 877,844,207.80
Cost of main business 750,410,484.64 752,449,378.64
Cost of other operating income 11,563,929.82 10,213,392.99
Total 761,974,414.46 762,662,771.63
(2) Main business (Classified by industry)
Current overall tally Accumulated last year
Item
Operating income Operating costs Operating income Operating costs
Small home appliance
853,536,487.98 750,410,484.64 845,775,086.33 752,449,378.64
manufacturing
Home helper 853,536,487.98 750,410,484.64 845,775,086.33 752,449,378.64
(3) Main business (Classified by area)
Current overall tally Accumulated last year
Item
Operating income Operating costs Operating income Operating costs
Catering and
515,128,658.12 445,237,910.10 488,925,179.51 429,741,895.84
Cooking
Home helper 248,061,429.17 228,197,976.09 262,321,852.47 241,867,813.52
Tea/Coffee 68,460,128.01 61,248,739.87 78,725,449.38 70,039,397.60
Others 21,886,272.68 15,725,858.58 15,802,604.97 10,800,271.68
Total 853,536,487.98 750,410,484.64 845,775,086.33 752,449,378.64
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
(4) Main business (Classified by area)
Current overall tally Accumulated last year
Item
Operating income Operating costs Operating income Operating costs
America 329,835,160.09 288,124,504.03 306,490,146.35 272,173,119.01
Asia 272,772,273.18 244,584,531.76 276,171,581.27 249,992,209.25
Europe 190,830,464.63 165,219,858.39 194,967,224.92 169,559,595.38
Australia 53,949,820.33 47,545,356.17 57,303,433.44 51,450,875.04
Africa 6,148,769.75 4,936,234.29 10,842,700.35 9,273,579.96
Total 853,536,487.98 750,410,484.64 845,775,086.33 752,449,378.64
(5) The revenue of sales from the top five customers
Customer Operating income Operating income Proportion (%)
First 145,659,705.05 16.36
Second 133,189,287.77 14.96
Third 63,686,467.94 7.15
Fourth 49,640,863.53 5.58
Fifth 48,787,515.42 5.48
Total 440,963,839.71 49.53
34. Business tax and surtax
Item The cumulative amount Accumulated last year
Business tax 1,941,628.44 1,475,556.78
Education surtax 1,478,879.69 93,937.37
Urban maintenance and construction tax 1,489,554.01 108,671.50
Others 20,247.05 0.00
Total 4,930,309.19 1,678,165.65
35. Selling expenses
Item The cumulative amount Accumulated last year
Export charges 16,377,256.67 17,122,067.99
Employee compensation 10,238,256.77 10,001,217.63
Contributory value -1,225,317.76 -1,109,288.29
Sales commission and after-sales service charges 1,369,690.46 1,338,558.81
Property lease fee 1,485,206.71 1,484,282.26
Travel expense 2,302,320.71 1,760,774.08
Advertising sales promotion cost 2,749,456.16 2,616,571.38
Office allowance 359,560.00 383,859.79
Traffic expense 375,274.89 416,778.45
Other expenses 351,750.15 279,050.44
Total 34,383,454.76 34,293,872.54
36 Administrative cost
Item The cumulative amount Accumulated last year
R&D expenditure 30,469,780.95 30,687,843.84
Employee compensation 13,510,399.40 15,254,431.20
Amortization charges 5,172,379.73 6,536,462.17
Rental expense 8,260,918.04 8,516,499.93
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Insurance expenses 905,634.04 593,301.54
Office allowance 3,063,340.05 2,812,130.24
Travel expense 823,312.06 1,076,864.78
Advisory fee 1,025,718.06 1,072,324.52
Repairs expense 3,502,443.67 2,836,636.89
Taxation expense 2,120,135.29 858,299.23
Other expenses 4,058,526.12 4,605,032.02
Total 72,912,587.41 74,849,826.36
37. Financial expense
Item The cumulative amount Accumulated last year
Interest expense 5,286,440.55 1,563,100.22
Less: Interest income 15,453,140.23 8,581,346.66
Less: Implemented financing income 551,374.62 972,346.12
Exchange gain or loss -1,817,398.65 10,699,858.51
Bank charges 1,318,498.60 1,160,280.76
Total -11,216,974.35 3,869,546.71
38．Assets impairment loss
Item The cumulative amount Accumulated last year
Bad debt loss -3,225,929.92 1,394,731.69
Loss on inventory valuation 858,827.82 1,385,604.80
Fixed assets impairment losses 2,920,419.99 0.00
construction in process impairment losses -114,359.13 0.00
Total 438,958.76 2,780,336.49
39. Gains and losses from changes in fair value
Source The cumulative amount Accumulated last year
Trading financial assets 0.00 7,349,219.30
Including: gains from the changes in fair value of derivative financial assets 0.00 7,349,219.30
Trading financial liabilities -26,768,171.00 0.00
Including: Derivative financial liabilities -26,768,171.00 0.00
Total -26,768,171.00 7,349,219.30
40. Investment income
(1) List of investment income
Source The cumulative amount Accumulated last year
Trading financial assets 8,647,755.48 3,466,924.99
Investment income of disposal of subsidiary 0.00 42,720.64
Dividend distribution 0.00 7,533.00
Financing income 5,352,363.02 59,166.67
Total 14,000,118.50 3,576,345.30
(2) List of investment income by equity method
Name of investee The cumulative amount Accumulated last year
Xiamen Institute of Foreign Investment Enterprise 0.00 7,533.00
Total 0.00 7,533.00
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
41. Non-operating gains
(1) Notes of non-operating gains
Amount recorded into
Item The cumulative amount Accumulated last year non-recurring profit and
loss
Total gains from disposal of non-current assets 1,533,850.20 1,765,239.78 1,533,850.20
Including: Gains from disposal of fixed assets 1,533,850.20 1,765,239.78 1,533,850.20
Governmental subsidy 1,913,721.00 2,430,845.00 1,913,721.00
Other 5,373,277.09 513,588.23 5,373,277.09
Total 8,820,848.29 4,709,673.01 8,820,848.29
(2) List of government grants recorded into recurring profit and loss
Whether belong to
Reporting Accumulated last Related to assets/Related to
Item non-recurring profits
period year income
and loss
The corporation export
313,221.00 884,368.00 Related to income Yes
subsidies
The providence innovative
0.00 100,000.00 Related to income Yes
enterprise innovation subsidies
Subsidies for application for a
160,500.00 124,530.00 Related to income Yes
patent
The exhibition subsidies 40,000.00 0.00 Related to income Yes
Developmental project
subsidies for commodities 500,000.00 150,000.00 Related to income Yes
export base
Subsidies for Electricity
0.00 171,947.00 Related to income Yes
consumption growth
The key export product
400,000.00 0.00 Related to income Yes
structure optimization
Industrial design subsidies
500,000.00 1,000,000.00 Related to income Yes
income
Total 1,913,721.00 2,430,845.00
42. Non-operating expenses
Amount recorded into non-recurring
Item Reporting period Accumulated last year
profit and loss
Loss on disposal of non-current assets 2,627.18 157,115.25 2,627.18
Including: Loss on disposal of fixed assets 2,627.18 157,115.25 2,627.18
Losses on scrap of fixed assets 546,235.94 29,032.16 546,235.94
fixed assets inventory loss 7,982.12 0.00 7,982.12
Penalty expense 102,177.57 17,053.57 102,177.57
Spending on public welfare donations 14,464.05 482,944.00 14,464.05
Others 68,286.09 140,290.14 68,286.09
Total 741,772.95 826,435.12 741,772.95
43. Income tax expense
Item Reporting period Accumulated last year
Current income tax expenses 1,273,760.49 -21,221.76
Deferred income tax expenses 1,683,679.41 1,160,664.58
Total 2,957,439.90 1,139,442.82
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
44. Calculation procedure of basic earnings per share and diluted earnings per share
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; S 1 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; S j 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.
（1）Lists of amount of basic EPS and diluted EPS
Reporting period Same period of last year
Profits during the reporting period
Basic EPS Diluted EPS Basic EPS Diluted EPS
Net profits attributable to ordinary
0.08 0.08 0.06 0.06
shareholders
Net profits attributable to ordinary
shareholders (excl. extraordinary gains or 0.09 0.09 0.00 0.00
losses)
（2）Calculation procedure of basic earnings per share and diluted earnings per share
①When calculating the basic earnings per share, net profits attributable to ordinary shareholders:
Item Reporting period Same period of last year
Net profits attributable to ordinary shareholders 14,857,989.76 10,425,680.85
Of which: net profits attributable to continuing operation 14,857,989.76 10,425,680.85
Net profits attributable to discontinuing operation 0.00 0.00
Net profits attributable to ordinary shareholders after
17,047,602.69 707,622.89
deducting non-recurring profit and loss
Of which: net profits attributable to continuing operation 17,047,602.69 707,622.89
Net profits attributable to discontinuing operation 0.00 0.00
②When calculating the basic earnings per share, the denominator is the weighted average outstanding common share, and the
process was as followed:
Item Reporting period Same period of last year
Weighted number of ordinary share initially issued
185,391,680.00 185,391,680.00
outstanding
Add: weighted number of ordinary share issued
0.00 0.00
outstanding this year
Less: weighted number of ordinary share repurchase this
0.00 0.00
year.
weighted number of ordinary share issued outstanding at
185,391,680.00 185,391,680.00
the end of year
During the reporting period, the company does not exist dilutive potential common shares, thus basis EPS was equal to diluted EPS.
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
45. Other comprehensive income
Item Reporting period Same period of last year
Foreign currency financial statements convert the
276,130.47 2,635,820.49
difference
Total 276,130.47 2,635,820.49
46. Notes of Cash Flow Statement
(1) Other cash received relevant to operating activities
Item Reporting period Same period of last year
Deposit 490,180.00 4,653,300.00
Income from rental 16,628,012.01 21,208,425.02
Interest income 7,432,615.24 8,564,975.98
Government grants 1,873,721.00 2,430,845.00
Others 23,798,119.00 14,294,440.27
Total 50,222,647.25 51,151,986.27
(2) Other cash paid relevant to operating activities
Item Reporting period Same period of last year
Workshop rent 18,634,101.57 0.00
Bank charges 1,017,121.51 1,160,280.76
Purchase and sales commission 2,600,097.44 2,360,610.76
Operation expenses and other items in administration expenses 73,203,627.45 59,673,937.68
Gardenelectricity charge 32,207,030.90 30,105,204.89
Donations and penalty expense 116,641.62 499,997.57
Total 127,778,620.49 93,800,031.66
(3) Other cash received relevant to investment activities
Item Reporting period Same period of last year
Restricted monetary funds 896,866,338.47 0.00
Total 896,866,338.47 0.00
(4) Other cash received relevant to financing activities
Item Reporting period Same period of last year
Money lending of related party 143,957,350.00 158,789,800.00
Total 143,957,350.00 158,789,800.00
(5) Other cash payments relating to financing activities
Item Reporting period Same period of last year
Money lending of related party 12,304,200.00 0.00
Total 12,304,200.00 0.00
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
47. Appendix of Cash Flow Statement
(1) Appendix of Cash Flow Statement
Supplemental information Reporting period Same period of last year
Reconciliation of net profit to net cash
flows generated from operating activities
Net profit 19,147,132.22 11,379,048.09
Add: Provision for impairment of assets 438,958.76 2,780,336.49
Depreciation of fixed assets, of oil-gas assets, of productive biological assets 25,761,482.07 31,358,473.72
Amortization of intangible assets 535,676.51 794,379.54
Amortization of long-term deferred expense 1,008,080.19 951,819.48
Losses on disposal of property, plant and equipment,
-1,659,864.90 -1,608,124.53
intangible assets and other long-term assets (gains: negative)
Loss on retirement of fixed assets (gains: negative) 554,218.06 29,032.16
Loss on fair value change (gains: negative) 26,768,171.00 -7,349,219.30
Financial cost (gains: negative) -6,101,935.05 12,852,007.01
Investment loss (gains: negative) -14,000,118.50 -3,533,624.66
Decrease in deferred income tax assets (gains: negative) 4,725,077.01 76,003.14
Increase in deferred income tax liabilities (decrease: negative) -3,041,397.60 1,084,661.44
Decrease in inventory (gains: negative) 6,527,226.13 28,225,419.19
Decrease in accounts receivable from operating activities (gains: negative) 70,447,473.89 67,706,472.81
Increase in payables from operating activities (decrease: negative) -164,190,118.82 -208,128,578.22
Net cash flows generated from operating activities -33,079,939.03 -63,381,893.64
Investing and financing activities that do not involving
cash receipts and payment:
Conversion of debt into capital
Net increase in cash and cash equivalents
Closing balance of cash 163,780,265.08 920,204,606.38
Less: Opening balance of cash 834,088,959.68 759,361,575.52
Net increase in cash and cash equivalents -670,308,694.60 160,843,030.86
(2) Composition of cash and cash equivalents
Item Reporting period Same period of last year
1. Cash 163,780,265.08 920,204,606.38
Including: cash in hand 661,293.17 714,518.54
Bank deposit can be used for payment at any time 163,118,971.91 919,490,087.84
Other monetary funds can be used for payment at
any time
2.Cash equivalents 0.00 0.00
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
3. Closing balance of cash and cash equivalents 163,780,265.08 920,204,606.38
VIII. Accounting treatment of asset securitization business:
There was no accounting treatment of asset securitization business in the Company
IX. Relationship and Related Party Transactions
1. Particulars about the parent company:
Type of
Parents Relationship Place of registration Legal representative Nature of business
incorporation
STAR COMGISTIC Manufacture and sales
Ultimate holding company INC Taiwan Yang Wenfang
CAPITAL CO.,LTD. electrical equipment
(Continued)
Ultimate
Shareholding Voting right
Parents Registered capital controller Organisation code
in the Company % in the Company %
of the Company
STAR COMGISTIC TWD 2,686,000.00
43.64 45.42 Wu Cankun 28986660
CAPITAL CO.,LTD. thousand
Name of parent Enterprise Registration Legal
Relationship Business nature Registered capital
company nature place representative
Manufacturing,
STAR COMGISTIC Joint stock Yang Wenf selling TWD2,686,000 Ultimate holding
Taiwan
CAPITAL CO.,LTD. company ang electrical thousand company
appliances
Continued:
Proportions of Proportions of Ultimate
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
Register Business Registered n of Organization
Name of company Type represen of voting
ed place nature capital shares code
tative right (%)
held (%)
TsannKuen Sino-forei Small home
Zhangzh Pan 16,000 ten
(Zhangzhou) gn joint appliance 75 75 73954770-9
ou Zhirong thousand dollar
Enterprise Co., Ltd. venture manufacturing
TsannKuen
Sino-forei Luo Small home
(Zhangzhou) South Zhangzh 500 ten
gn joint Qingxin appliance 56.25 75 77067325-2
Port Electronics ou thousand yuan
venture g manufacturing
Enterprise Co., Ltd.
TsannKuen China Small home
Limited Shangha Jian 4,000 ten
(Shanghai) Enterprise appliance 62.5 62.5 60729103-5
company i Derong thousand dollar
Co., Ltd. manufacturing
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
TsannKuen
Private Luo Secondary
(Zhangzhou) Zhangzh 300 ten
non-enterp Qingxin vocational 75 100 79176918-1
Profession and ou thousand yuan
rise entity g education
Technology Institute
Luo
Shanghai Canxing Limited Shangha Sale of home 495 ten
Qingxin 56.25 100 67455210-0
Trading Co.,Ltd company i appliance thousand yuan
g
Xiamen Canxing Limited Jian Sale of home 2800 ten
Xiamen 75 100 55623112-X
Trading Co.,Ltd. company Derong appliance thousand yuan
13,599.30 ten
East Sino Limited Hongko Pan Investment 52406771-000
thousand HK 75 100
Development Limited company ng Zhirong and trade -04-14-1
dollar
PT.STAR Small home
Limited Indonesi Pan 1,750 ten
COMGISTIC appliance 74.68 99.57
company a Zhirong thousand dollar
INDONESIA manufacturing
3. Joint venture and associated enterprises of the Company
There was no Joint venture and associated enterprises of the Company
4. Other related party of the enterprise
Name of other related party of the enterprise Relationship with the company Organization code
EUPA Industry Corporation Limited Shareholder 12959659-000-13-1
Fordchee Development Limited Shareholder 14676920-000-01-14-0
Fillman Investments Limited Shareholder 16269694-000-07-13-5
Tsann Kuen Japan Co., Ltd. The same ultimate holding company 0105-01-021064
The company directly controlled by the
Thermaster Electronic (Xiamen) Ltd. key management and closed family 61201968-5
members
Star International Travel Service Co., Ltd. The same ultimate holding company 80355209
Controlled by same actual
Tsann Kuen Enterprise Co., Ltd. 69568009
controller
Xiamen Tsann Kuen Trading Co., Ltd Controlled by same actual controller 58126129-1
Sion Global Development Ltd. Controlled by same actual controller ――
PT.TSANNKUENPROPERTYDEVELOPMENTINDONESIA Controlled by same actual controller ――
PT.TSANNKUENINDONESIA Controlled by same actual controller ――
The company directly controlled by the
PT.ShenMinSukabumi key management and closed family ――
members
5. Related party transactions
(1) Purchase of goods, services received among the related-party
Reporting period Same period of last year
Proportion Proportion
Content of related Pricing principle of in in
Name of company
transaction related parties Amount transactions Amount transactions
of the same of the same
kind kind
STAR According to
COMGISTIC Purchase contract price 1,993,309.61 0.36 2,627,119.41 0.49
CAPITAL CO., signed by both
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
LTD. parties
According to
Thermaster
contract price
Electronic Purchase 16,991,120.15 3.06 17,066,825.03 3.21
signed by both
(Xiamen) Ltd.
parties
Total 18,984,429.76 3.42 19,693,944.44 3.70
(2) Statement of sales of goods and rendering of services
Reporting period Same period of last year
Proportion Proportion
Content of related Pricing principle in in
Name of company
transaction of related parties Amount transactions Amount transactions
of the same of the same
kind kind
According to
Tsann Kuen Japan Co., contract price
Sales of goods 5,832,857.86 0.68 36,873,729.50 4.36
Ltd. signed by both
parties
According to
STAR COMGISTIC contract price
Sales of goods 19,698,104.28 2.31 13,453,679.07 1.59
CAPITAL CO., LTD. signed by both
parties
Total 25,530,962.14 2.99 50,327,408.57 5.95
(3) Information of related-party lease
①the Company was as the lessor
Rental income
Pricing basis for
Category of the recognized in
Name of lessor Name of lessee Initial date Ending date the rental
leased assets the reporting
income
period
Xiamen Tsann According to
Xiamen Tsann
Kuen (China) contract price
Kuen Trading Fixed assets 13 Aug. 2011 24 Jul. 2015 750,000.00
Enterprise Co., signed by both
Co., Ltd
Ltd. parities
(4) Money lending of related-party
Name of related party Amount Initial date Ending date Notes
Borrowing
Fillman Investments Limited 3,500,000.00 dollars 2014.03.17 2014.09.16 dollar loan
Sion Global Development Ltd. 10,000,000.00 dollars 2014.02.20 2014.12.31 dollar loan
Sion Global Development Ltd. 10,000,000.00 dollars 2014.02.26 2015.02.25 dollar loan
(5) Related party assets transfer and debt restructuring
Reporting period Same period of last year
Proporti
Price principle of Proportion
on in
Name of related party Type Content other related-party in
transacti
transaction Amount Amount transaction
ons of
s of the
the same
same kind
kind
Tsann Kuen Enterprise Sale of fixed According to the
Sale 100,099.39 0.22 0.00 0.00
Co., Ltd. assets contract price
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
PT.TSANNKUENPROP
Sale of fixed According to the
ERTYDEVELOPMENTI Sale 0.00 0.00 50,808.92 0.01
assets contract price
NDONESIA
The purchase of
PT.TSANNKUENINDO According to the
Purchase mould and 0.00 0.00 139,478.16 0.01
NESIA contract price
equipment
(6) Other related-party transaction
Accumulative in reporting
Transaction Contents Accumulated last year
period
Name of related party Proportion in Proportion in
Amount transactions of Amount transactions of
the same kind the same kind
Payment
STAR COMGISTIC CAPITAL
Purchasing agent fee(notes:1) 97,839.44 100.00 111,505.63 100.00
CO., LTD
Tsann Kuen Japan Co., Ltd. Three packs of cost(notes:2) 0.00 0.00 122,165.26 0.11
STAR INTERNATIONAL TRAVEL
Accept service(notes:3) 0.00 0.00 318,072.06 0.19
SERVICECo., LTD.
Total 97,839.44 551,742.95
Notes 1: The Company and its subsidiaries authorize related company to purchase raw materials, molds and equipments. The
relevant agency fees would be paid of 110% of the actual happened operating fees.
Notes 2: The three packs of costs is the relevant fees that the Company’s subsidiaries paid for the issues of quality to the related
company about purchasing parts and finished goods.
Notes 3: Both of the Company and the related company offer non-exclusive agency service, to transact the TCAP of travel
business, and to agent service fees according to the actual quoted prices of orders requirements of each batch.
6. Amounts due from/to related parties
(1) Amounts due from related party of listed company
2014.06.30 2013.12.31
Item Book balance Bad debt Book balance Bad debt
provision provision
Accounts receivable:
Tsann Kuen Japan Co., Ltd. 1,096,262.38 0.00 5,084,445.29 0.00
STAR COMGISTIC CAPITAL CO., LTD 8,924,506.57 0.00 9,066,228.33 0.00
Total 10,020,768.95 0.00 14,150,673.62 0.00
(2) Amounts to related party of listed company
Item 2014.06.30 2013.12.31
Account payable
Thermaster Electronic (Xiamen) Ltd. 9,655,687.66 9,238,457.73
STAR COMGISTIC CAPITAL CO., LTD 737,323.25 753,382.59
Total 10,393,010.91 9,991,840.32
Other accounts payable:
Tsann Kuen Japan Co., Ltd. 104,810.21 185,167.61
STAR COMGISTIC CAPITAL CO., LTD 35,788.56 36,068.65
Xiamen Tsann Kuen Trading Co., Ltd 740,539.26 1,099,436.46
Fillman Investments Limited 21,666,164.62 12,300,998.74
Sion Global Development Ltd. 123,056,000.00 0.00
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Total 145,603,302.65 13,621,671.46
X. Share-based payment
There was no share-based payment in the reporting period
XI. Contingency
Tsann Kuen Zhangzhou, one of the Company’s subsidiaries, and Xinda Motor Co., Ltd. (hereinafter refer to as
“Xinda Motor”) signed a product supply contract on 20 Jul. 2009, with thee valid period for the contract being
from 1 Jul. 2009 to 30 Jun. 2012. Both parties also signed the 2011 ED Procurement Contract of Tsann Kuen
Zhangzhou Enterprises Co., Ltd., the Special Agreement and other agreements, according to which Tsann Kuen
Zhangzhou would purchase products from Xinda Motor. Later, Tsann Kuen Zhangzhou refused to pay for the
products and chose to terminate the contract due to quality problems found in 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.
Zhangzhou Intermediate People’s Court had made the first-instance judgment on 15Aug. 2013, the judgment was
as followed: (1) The accuse Tsann Kuen Zhangzhou should pay $479089.06 which was RMB 3,071,535.78of
payment for goods to Xinda Motor within 15 days from the day of the enforcement of this judgment. (2) The
accuser Xinda Motor and third party Boluo county Lian Yuan Industry Technology Co., Ltd. should pay RMB
1,233,399.70 of liquidated damages to Tsann Kuen Zhangzhou within 15 days from the day of the enforcement of
this judgment. (3) Released 10 batch orders that unredeemed between Xinda Motor, Boluo county Lian Yuan
Industry Technology Co., Ltd. and Tsann Kuen Zhangzhou. (4) Reject other claims of Xinda Motor. (5) Reject
other claims of Tsann Kuen Zhangzhou. After the first-instance judgment, neither party refused to accept the
first-instance judgment and lodged an appeal. As of the date of the report, Tsann Kuen Zhangzhou should pay the
book balance of goods $ 479,089.06 to Xinda Motor, due to the case is pending; Tsann Kuen Zhangzhou did not
recognize the contingent assets RMB 1,233,399.70 to Xinda Motor.
Besides, the defective motor products provided by Xinda Motor was in total of 104,691 sets, however, the case
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
processing 23,035 sets only, there were 81,656 sets remained untreated. Thus, on 21 Dec. 2013, Tsann Kuen
Zhangzhou filed a suit to Zhangzhou Intermediate People’s Court, and the claims amount was in total of RMB
3,702,957.93. Zhangzhou Intermediate People’s Court has accepted the case.
XII. Commitments
1. Rental contract entered into and under execution as well as its financial effect
Unit: RMB ten thousand yuan
Item 2014.06.30 2013.12.31
The lowest rental payment of irreversible operating lease
House rental
The first year after the Balance Sheet Date 3,727 3,727
The second year after the Balance Sheet Date 3,727 3,727
The third year after the Balance Sheet Date 3,727 3,727
The follwowing years 130,438 134,165
Total 141,619 145,346
2. Fulfillment of previous commitments
Up to the reporting date, the above mentioned commitments were continued to execute and there was no
circumstance about violations of the above commitments.
XIII. Events after the balance sheet date
No events after the balance sheet date
XIV. Notes of other significant events
1. Assets and liabilities calculated by fair value
the cumulative
Changes in Provision
changes in the
Amount at fair value for Amount at
Item fair value
the year beginning gains and impairment the year-end
included in
losses this year of the year
equity
Financial assets
Financial assets recognized into current
gains and losses by calculated in fair
0.00 0.00 0.00 0.00 0.00
value (excluded derivative financial
assets)
Derivative financial assets 21,120,100.00 -21,120,100.00 0.00 0.00 0.00
Available-for-sale financial assets 0.00 0.00 0.00 0.00 0.00
Subtotal of financial assets 21,120,100.00 -21,120,100.00 0.00 0.00 0.00
Investment property 0.00 0.00 0.00 0.00 0.00
Productive biological assets 0.00 0.00 0.00 0.00 0.00
Others 0.00 0.00 0.00 0.00 0.00
Total 21,120,100.00 -21,120,100.00 0.00 0.00 0.00
Financial liabilities
Derivative financial liabilities 0.00 5,648,071.00 0.00 0.00 5,648,071.00
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
XV. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable
2014.06.30
Item
Amount Proportion (%) Provision for bad debts Proportion (%)
Accounts receivable with significant single amount
0.00 0.00 0.00 0.00
and individually withdrawn bad debt provision
Accounts receivable for which bad debt provisions
are made on the group basis
Aging group 11,464,791.67 97.80 249,531.68 2.18
Related group 258,117.00 2.20 0.00 0.00
Subtotal of the groups 11,722,908.67 100.00 249,531.68 2.13
Accounts receivable with insignificant single
amount but individually withdrawn bad debt 0.00 0.00 0.00 0.00
provision
Total 11,722,908.67 100.00 249,531.68 2.13
Continued
2013.12.31
Item
Amount Proportion (%) Provision for bad debts Proportion (%)
Accounts receivable with significant single amount
0.00 0.00 0.00 0.00
and individually withdrawn bad debt provision
Accounts receivable for which bad debt provisions
are made on the group basis
Aging group 41,561,170.60 99.65 1,839,715.01 4.43
Related group 147,382.00 0.35 0.00 0.00
Subtotal of the groups 41,708,552.60 100.00 1,839,715.01 4.41
Accounts receivable with insignificant single
amount but individually withdrawn bad debt 0.00 0.00 0.00 0.00
provision
Total 41,708,552.60 100.00 1,839,715.01 4.41
(2) Accounts receivable aging lists
2014.06.30 2013.12.31
Item
Amount Proportion (%) Amount Proportion (%)
Within 1 year 11,722,908.67 100.00 41,708,552.60 100.00
Total 11,722,908.67 100.00 41,708,552.60 100.00
(3) In groups, the account receivable of provision for bad debts by aging analysis
2014.06.30 2013.12.31
Aging Provision for Provision for
Amount Proportion (%) Amount Proportion (%)
bad debts bad debts
Within 1 year 11,464,791.67 100.00 249,531.68 41,561,170.60 100.00 1,839,715.01
Including: 1 to 90
9,842,800.58 85.85 0.00 23,157,131.35 55.72 0.00
days
91 to 180 days 1,188,164.71 10.36 118,816.48 18,404,039.25 44.28 1,839,715.01
181 to 270 days 430,989.94 3.76 129,296.98 0.00 0.00 0.00
271 to 365 days 2,836.44 0.02 1,418.22 0.00 0.00 0.00
Total 11,464,791.67 100.00 249,531.68 41,561,170.60 100.00 1,839,715.01
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
(4) Information of shareholders with more than 5% (including 5%) of the voting shares of the Company in
accounts receivable in report period
(5) Top five accounts receivable
Name of entity Relationship Amount Aging Proportion (%)
First Non-related party 8,292,165.89 Within 1 year 70.73
Second Non-related party 1,439,763.00 Within 1 year 12.28
Third Non-related party 904,625.00 Within 1 year 7.72
Fourth Non-related party 343,346.50 Within 1 year 2.93
Fifth Non-related party 322,209.54 Within 1 year 2.75
Total 11,302,109.93 96.41
(6) Accounts receivable of related parties
Relationship with
Name of entity Amount Proportion (%)
the Company
Tsann Kuen Zhangzhou Subsidiary 258,117.00 2.20
Total 258,117.00 2.20
2. Other account receivable
(1) Other account receivable listed by category
Item
2014.06.30
Amount Proportion (%) Provision for bad debts Proportion (%)
Other accounts receivable with significant
single amount and individually withdrawn bad 0.00 0.00 0.00 0.00
debt provision
Other accounts receivable for which bad debt
provisions are made on the group basis
Aging group 1,989,285.26 93.87 14,277.07 0.72
Related group 0.00 0.00 0.00 0.00
Subtotal of the groups 1,989,285.26 93.87 14,277.07 0.72
Other accounts receivable with insignificant
single amount but individually withdrawn bad 130,000.00 6.13 0.00 0.00
debt provision
Total 2,119,285.26 100.00 14,277.07 0.67
Continued
Item
2013.12.31
Amount Proportion (%) Provision for bad debts Proportion (%)
Other accounts receivable with significant single
amount and individually withdrawn bad debt 0.00 0.00 0.00 0.00
provision
Other accounts receivable for which bad debt
provisions are made on the group basis
Aging group 1,198,121.33 100.00 2,829.11 0.24
Related group 0.00 0.00 0.00 0.00
Subtotal of the groups 1,198,121.33 100.00 2,829.11 0.24
Other accounts receivable with insignificant
single amount but individually withdrawn bad 0.00 0.00 0.00 0.00
debt provision
Total 1,198,121.33 100.00 2,829.11 0.24
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
(2) Other accounts receivable aging lists
2014.06.30 2013.12.31
Item
Amount Proportion (%) Amount Proportion (%)
Within 1 year 2,119,285.26 100.00 1,198,121.33 100.00
Total 2,119,285.26 100.00 1,198,121.33 100.00
(3) In groups, the other account receivable of provision for bad debts by aging analysis
2014.06.30 2013.12.31
Item Provision for Provision for
Amount Proportion (%) Amount Proportion (%)
bad debts bad debts
Within 1 year 1,989,285.26 100.00 14,277.07 1,198,121.33 100.00 2,829.11
Including: 1 to 90
1,906,687.40 95.85 0.00 1,169,830.19 97.64 0.00
days
91 to 180 days 52,533.06 2.64 5,253.31 28,291.14 2.36 2,829.11
181 to 270 days 30,043.20 1.51 9,012.96 0.00 0.00 0.00
271 to 365 days 21.60 0.00 10.80 0.00 0.00 0.00
Total 1,989,285.26 100.00 14,277.07 1,198,121.33 100.00 2,829.11
(4) Information of shareholders with more than 5% (including 5%) of the voting shares of the Company
in other accounts receivable in report period
(5) Top five other accounts receivable
Name of entity Relationship Amount Aging Proportion (%)
First Non-related party 1,895,129.15 Within 1 year 89.42
Second Non-related party 130,000.00 Within 1 year 6.13
Third Non-related party 53,613.00 Within 1 year 2.53
Fourth Non-related party 30,000.00 Within 1 year 1.42
Fifth Non-related party 6,392.78 Within 1 year 0.30
Total 2,115,134.93 99.80
3. Long-term equity investments
Accounting Increase/
The investee Investment cost 2013.12.31 2014.06.30
method decrease
ShanghaiTsann Kuen Enterprise Co., Ltd. Cost method 194,545,872.18 194,545,872.18 0.00 194,545,872.18
Zhangzhou Tsann Kuen Enterprises Co., Ltd. Cost method 921,914,701.56 921,914,701.56 0.00 921,914,701.56
Xiamen Institute of Foreign Investment
Cost method 40,000.00 40,000.00 0.00 40,000.00
Enterprise
Total 1,116,500,573.74 1,116,500,573.74 0.00 1,116,500,573.74
Explanations
on Withdrawal
differences amount of
Voting between Provision for impairment
Shareholding
The investee right shareholding impairment provision Cash bonus
Proportion
Proportion proportion loss in the
and voting reporting
right period
proportion
ShanghaiTsann Kuen Enterprise Co., Ltd. 62.50 62.50 130,646,542.91 0.00 0.00
Zhangzhou Tsann Kuen Enterprises Co., Ltd. 75.00 75.00 0.00 0.00 38,189,978.21
Xiamen Institute of Foreign Investment
1.48 1.48 0.00 0.00 0.00
Enterprise
103
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Total 130,646,542.91 0.00 38,189,978.21
4. Operating income and costs
(1) Operating income
Accumulative amount
Item Same period of last year
in reporting period
Main business revenue 31,655,528.61 27,869,917.21
Other business revenue 10,952,464.03 7,576,194.98
Total 42,607,992.64 35,446,112.19
Main business cost 26,639,150.58 22,768,892.12
Other business cost 2,441,093.29 2,411,159.04
Total 29,080,243.87 25,180,051.16
(2) Main business (Classified by industrial)
Accumulative amount
Same period of last year
Item in reporting period
Operating income Operating costs Operating income Operating costs
Small Household Appliance 31,655,528.61 26,639,150.58 27,869,917.21 22,768,892.12
Total 31,655,528.61 26,639,150.58 27,869,917.21 22,768,892.12
(3) Main business (Classified by product)
Accumulative amount
Item Same period of last year
in reporting period
Operating income Operating costs Operating income Operating costs
Catering and Cooking 9,487,969.10 7,887,152.22 6,182,380.83 4,936,382.81
Home helper 2,686,131.41 2,269,269.11 14,108,680.29 11,836,580.41
Tea/Coffee 5,925,694.54 4,641,420.79 7,054,358.34 5,627,339.05
Others 13,555,733.56 11,841,308.46 524,497.75 368,589.85
Total 31,655,528.61 26,639,150.58 27,869,917.21 22,768,892.12
(4) Main business (Classified by area)
Accumulative amount
Same period of last year
Item in reporting period
Operating income Operating costs Operating income Operating costs
Asia 31,655,528.61 26,639,150.58 27,869,917.21 22,768,892.12
Total 31,655,528.61 26,639,150.58 27,869,917.21 22,768,892.12
(5) Revenue of sales from the top five customers
Customers Operating income Proportion (%)
First 7,853,630.00 18.43
Second 7,530,601.44 17.67
Third 4,775,349.68 11.21
Fourth 2,216,404.42 5.20
Fifth 1,404,180.57 3.30
Total 23,780,166.11 55.81
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
5. Investment income
(1) List of investment income
Accumulative amount
Source Same period of last year
in reporting period
Long-term equity investment income accounted by cost method 38,189,978.21 7,533.00
Long-term equity investment income accounted by cost method 0.00 0.00
Investment income arising from disposal of long-term equity investments 0.00 0.00
Total 38,189,978.21 7,533.00
Accumulative
amount Reason of increase/decreas
Investee Same period of last year
in reporting e
period
Distributed in Aug. 2013
Tsann Kuen Zhangzhou 38,189,978.21 0.00
last year
Xiamen Institute of Foreign Investment Enterprise 0.00 7,533.00 Undistributed this year
Total 38,189,978.21 7,533.00
6. Supplemental information of Cash Flow Statement
Accumulative
Supplemental information amount Same period of last year
in reporting period
1. Reconciliation of net profit to net cash flows generated from operations:
Net profit 42,288,654.76 6,599,285.59
Add: Provision for assets impairments -1,498,177.31 109,836.18
Depreciation of fixed assets, oil and gas assets and productive biological assets 2,835,310.71 2,841,827.86
Amortization of intangible assets 210,418.32 218,254.92
Amortization of long-term deferred expense 184,149.06 170,149.02
Losses/gains on disposal of property, intangible asset and other long-term assets (gains: negative) -4,746.26 -702,653.94
Losses/gains on scrapped of fixed assets (gains: negative) 0.00 0.00
Losses/gains from variation of fair value (gains: negative) 0.00 0.00
Financial cost (income: negative) 326,965.71 -176,981.36
Investment loss (gains: negative) -38,189,978.21 -7,533.00
Decrease in deferred tax assets (increase: negative) 1,396,262.02 0.00
Increase in deferred tax liabilities (decrease: negative) 0.00 0.00
Decrease in inventory (increase: negative) -1,157,496.70 2,416,142.22
Decrease in accounts receivable from operating activities (increase: negative) 27,313,580.38 -7,287,880.12
Increase in accounts payable from operating activities (decrease: negative) -47,735,456.02 1,136,795.20
Net cash flows generated from operating activities -14,030,513.54 5,317,242.57
2. Significant investing and financing activities without involvement of cash receipts and payments
Debt converted into capital
Change of cash and cash equivalent:
Closing balance of cash and cash equivalent 9,684,609.95 7,942,734.91
Less: opening balance of cash equivalents 11,811,615.43 17,652,594.45
Net increase of cash and cash equivalent -2,127,005.48 -9,709,859.54
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2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
XVI. Supplemental information
1. Notes of non-recurrent profit and loss in reporting period
Item Amount Notes
Loss and gains on disposal of non-current assets (Including write-off part of the
984,987.08
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 subsidy that according to the 1,913,721.00
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 of integration
Gains and losses produced when exchanging prices unconscionable at the fair that
exceed the fair value
The current net profits and losses produced when the subsidiaries combine u
nder the same control from the beginning to the combining date
Gains and losses produced from the contingency which have nothing to do
with the Company’s normal business operations
Mainly is the investment returns
In addition to the valid hedging activity associated with the normal operation of the
of the Selling of forward
Company, the changes in fair value through gains or losses which arising from the
foreign exchange contracts,
holding trading financial assets and the trading financial liabilities as well as the -12,768,052.50
changes in fair value gains,
investment income that earning from the disposal of trading financial assets,
other liquid assets income of
trading financial liabilities and available-for-sale financial assets
financial products
The reversal of impairment of receivables of the individual impairment test
Gains and losses from the external entrusted loans
Gains and losses for changes in fair value of investment property resulting from 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 above 5,180,367.26
The other items of gains and losses conforming the definition of non-recurring The receive of cancel after
1,285,415.02
gains and losses verification of payment
Less：the effect of income tax -1,190,531.80
the effect of minority interest (after tax) -23,417.41
Total -2,189,612.93
2. Net assets income rate and earnings per share
Profits in reporting period ROEWA（%） Earnings per share
106
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Basic EPS Diluted EPS
Net margins of the Company’s common stock holders 2.82 0.08 0.08
Net margins of the Company’s common stock holders which
3.23 0.09 0.09
has reduced non-recurring gains and losses
107
2014 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
3. Particulars on the abnormal conditions of main items in the financial statements of the
Company and relevant reasons
Opening Increase/De
item Closing amount Reasons of change
amount crease ratio
Mainly was the loss estimation of undelivery of forward
Tradable financial assets 0.00 21,120,100.00 -100.00%
foreign exchange contracts
Customer in advance 5,811,179.20 4,290,802.70 35.43% Mainly was the increase of the purchase of raw material
Interest receivable 8,020,524.99 110,833.33 7136.56% Mainly was the increase of fixed term deposit
Mainly was the increase of the purchase of finance
other current assets 330,000,000.00 50,000,000.00 560.00%
products
construction in process 4,622,309.63 10,889,671.98 -57.55% Mainly due to the industry plant transfer into fixed assets
short-term borrowing 481,764,240.00 30,484,500.00 1480.36% Mainly was the increase of short term borrowing
transaction financial Mainly was the loss of undelivery of forward foreign
5,648,071.00 0.00 100.00%
liabilities exchange contracts
Mainly was the note payable due to pay was paid by
Notes receivable 7,745,858.91 30,577,887.89 -74.67%
Letter of Credit
Receivable in advance 18,637,100.79 10,431,654.59 78.66% Mainly was the increase of customer in advance
Tax payable -809,567.82 -17,127,309.97 95.27% Mainly due to recover export tax refunds of last year
Interest payable 3,270,214.70 108,661.00 2909.56% Mainly was the increase of short term loan
Other payables 191,525,702.08 69,376,770.31 176.07% Mainly duo to borrow from related party
Deferred income tax Mainly due to the unrealized benefit of initial forward
217,345.05 3,258,742.65 -93.33%
liabilities foreign exchange
Opening Increase/De
Item Closing amount Reasons of change
amount crease ratio
Mainly due to business tax and surcharges occurred by
Business tax and surcharges 4,930,309.19 1,678,165.65 193.79%
export tax avoid touch drawback
Mainly due to depreciation caused exchange interests and
Financial expense -11,216,974.35 3,869,546.71 -389.88%
the interest income increase
Mainly due to the recovery of the customer
Assets impairment loss 438,958.76 2,780,336.49 -84.21% payment and provision for fixed asset impairment
loss
Gains on the changes in the Mainly was the profits of undelivery of forward foreign
-26,768,171.00 7,349,219.30 -464.23%
fair value exchange contracts
Mainly was decrease of the income of delivery of
Investment income 14,000,118.50 3,576,345.30 291.46%
forward foreign exchange
Mainly due to subsidiary increased than that in last
Non-operating income 8,820,848.29 4,709,673.01 87.29%
year
Income tax expense 2,957,439.90 1,139,442.82 159.55% Mainly due to deferred income tax assets reverse
Net cash flow from Mainly due to the payment for goods was less than
-33,079,939.03 -63,381,893.64 47.81%
operating activities that in last year
Net cash flow from Mainly due to the increase of the purchase of
-1,181,899,628.49 -87,554,293.09 -1249.90%
investment activities financing products and the limited deposit account
Net cash flow from
539,659,463.51 322,007,671.55 67.59% Mainly due to the increase of export financing loan
financing activities
108
