Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Tsann Kuen (China) Enterprise Co., Ltd.
Report for the First Quarter of 2018
April 2018
1
Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Section I Important Statements
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.
Mr. Pan Zhirong, company principal, and Mr. Feng Zhiqing, 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.
This Report is prepared in both Chinese and English. Should there be any discrepancy
between the two versions, the Chinese version shall prevail.
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Section II Company Profile
I Key financial results
Whether the Company performed any retroactive adjustments to or restatement of its accounting data due to changes of accounting
policies or correction of accounting errors
□ Yes √ No
Unit: RMB
Item January-March 2018 January-March 2017 +/-%
Operating revenues 319,364,654.64 454,378,577.36 -29.71
Net profit attributable to shareholders of the Company -21,878,234.79 6,800,900.65 -421.70
Net profit attributable to shareholders of the Company
-27,785,628.47 5,620,130.15 -594.39
before exceptional profit and loss
Net operating cash flow -8,842,593.74 3,169,455.03 -378.99
Basic earnings per share (RMB/share) -0.12 0.04 -400.00
Diluted earnings per share (RMB/share) -0.12 0.04 -400.00
Weighted average return on equity (%) -0.04 1.10 -1.14
Item 31 March 2018 31 December 2017 +/-%
Total assets 1,625,804,755.14 1,778,825,153.51 -8.60
Net assets attributable to shareholders of the
586,422,273.11 610,814,327.77 -3.99
Company
Total share capital up to the former trading date before the disclosure:
Total share capital up to the former trading date before the disclosure (share) 185,391,680
Fully diluted EPS calculated by the newest share capital (RMB/share) -0.12
Exceptional profit and loss
√ Applicable □ Not applicable
Unit: RMB
Item January-March 2018 Note
Profit/loss on disposal of non-current assets (including offset amount of
327,372.40
asset impairment provisions)
Tax rebates, reductions and exemptions due to approval beyond
authority or the lack of official approval documents
Government grants charged to the profit/loss for the Reporting Period
1,255,697.00
(except for the government grants closely related to the business of the
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Item January-March 2018 Note
Company and given at a fixed quota or amount in accordance with the
State’s uniform standards)
Capital occupation charges on non-financial enterprises that are charged
to the profit/loss for the Reporting Period
Profit due to the situation where investment costs for the Company to
obtain subsidiaries, associates and joint ventures are lower than the
enjoyable fair value of identifiable net assets of investees when making
investments
Profit/loss on non-monetary asset swap
Profit/loss on entrusting others with investments or asset management
Asset impairment provisions due to acts of God such as natural disasters
Profit/loss on debt restructuring
Restructuring costs in staff arrangement, integration, etc.
Profit/loss on the part over the fair value due to transactions with
distinctly unfair prices
Reporting Period net profit/loss of subsidiaries acquired through
business mergers under the same control from period-beginnings to
merger dates
Profit/loss on contingencies irrelevant to the Company’s normal
business activities
Mainly the investment
income of sales of forward
Profit/loss on fair value changes of transactional financial assets and
foreign exchange contract,
liabilities & investment profit on disposal of transactional financial
income from changes in
assets and liabilities as well as financial assets available for sale, except 7,426,504.29
fair value, and other
for effectively hedging business related to normal business operations
current assets income
of the Company
from wealth management
products
Impairment provision reversal for accounts receivable on which the
impairment test is carried out separately
Profit/loss on entrusted loans
Profit/loss on fair value changes in investing properties of which the
subsequent measurement is carried out adopting the fair value method
Effect on Reporting Period profit/loss when a one-off adjustment is
made to Reporting Period profit/Loss according to requirements of
taxation, accounting and other relevant laws and regulations
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Item January-March 2018 Note
Custody fee income when entrusted with operations
Non-operating income and expense other than the above 251,523.42
Other profit/loss that meet the definition of exceptional profit/loss
Less: Income tax effects 1,388,031.68
Minority interests effects (after tax) 1,965,671.75
Total 5,907,393.68
Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Profit and Loss,
or reclassified any exceptional profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss
□ Applicable √ Not applicable
II Total number of shareholders at the period-end and shareholdings of top ten shareholders
1. Numbers of common shareholders and preference shareholders with resumed voting rights as well as
shareholdings of top ten shareholders
Unit: share
Total number of common Total number of preference shareholders with
16,646 0
shareholders at the period-end resumed voting rights at the period-end
Shareholdings of top ten shareholders
Shareholdin Number of Pledged or frozen shares
Nature of Number of
Name of shareholder g percentage non-circulating Status of Number of
shareholder shares held
(%) shares held shares shares
FORDCHEE DEVELOPMENT Foreign
29.10% 53,940,530 0 N/A 0
LIMITED corporation
EUPA INDUSTRY Foreign
13.09% 24,268,840 0 N/A 0
CORPORATION LIMITED corporation
GUOTAI JUNAN
Foreign
SECURITIES(HONGKONG) 4.96% 9,196,449 0 N/A 0
corporation
LIMITED
FILLMAN INVESTMENTS Foreign
2.49% 4,621,596 0 N/A 0
LIMITED corporation
CHINA EVERBRIGHT Foreign
1.06% 1,972,523 0 N/A 0
SECURITIES (HONGKONG) CO., corporation
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
LTD.
SHENWAN HONGYUAN Foreign
1.06% 1,956,752 0 N/A 0
SECURITIES (HK) CO., LTD. corporation
Domestic
CHEN YONGQUAN 1.02% 1,897,343 0 N/A 0
individual
Foreign
CHEN YONGQING 0.80% 1,488,949 0 N/A 0
individual
Foreign
CHEN LIJUAN 0.72% 1,330,434 0 N/A 0
individual
Domestic
DING XIAOLUN 0.59% 1,103,000 0 N/A 0
individual
Shareholdings of top ten circulating shareholders
Number of listed circulating Variety of shares
Name of shareholder
shares held Variety Number
Domestically listed
FORDCHEE DEVELOPMENT LIMITED 53,940,530 53,940,530
foreign shares
EUPA INDUSTRY CORPORATION Domestically listed
24,268,840 24,268,840
LIMITED foreign shares
GUOTAI JUNAN Domestically listed
9,196,449 9,196,449
SECURITIES(HONGKONG) LIMITED foreign shares
Domestically listed
FILLMAN INVESTMENTS LIMITED 4,621,596 4,621,596
foreign shares
CHINA EVERBRIGHT SECURITIES Domestically listed
1,972,523 1,972,523
(HONGKONG) CO., LTD. foreign shares
SHENWAN HONGYUAN SECURITIES Domestically listed
1,956,752 1,956,752
(HK) CO., LTD. foreign shares
Domestically listed
CHEN YONGQUAN 1,897,343 1,897,343
foreign shares
Domestically listed
CHEN YONGQING 1,488,949 1,488,949
foreign shares
Domestically listed
CHEN LIJUAN 1,330,434 1,330,434
foreign shares
Domestically listed
DING XIAOLUN 1,103,000 1,103,000
foreign shares
The first, the second and the fourth largest shareholders are the Company’s corporate
controlling shareholders. It is unknown to the Company whether there exists associated
Related or acting-in-concert parties among
relationship among the shareholders above or they are acting-in-concert entities as
the above shareholders
stipulated in the Administrative Measures on Information Disclosure of Changes in
Shareholding of Listed Companies.
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Did any of the top ten common shareholders or the top ten non-restricted common shareholders of the Company conduct any
promissory repo during the Reporting Period?
□ Yea √ No
No such cases in the Reporting Period.
2. Total number of preference shareholders and shareholdings of the top ten of them
□ Applicable √ Not applicable
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Section III Significant Events
I Changes in major accounting statement items and financial indicators for the Reporting
Period, as well as reasons for such changes
√ Applicable □ Not applicable
Unit: RMB
Item 31 March 2018 31 December 2017 +/-% Main reason for change
Financial assets measured at fair
value with fair value changes Evaluated gains on forward foreign exchange contracts in
5,449,550.00 3,925,850.00 38.81
included in the profit and loss for current period
the Reporting Period
Accounts receivable 166,051,743.35 270,052,420.89 -38.51 Decrease in operating revenues in current period
Interest receivable 1,529,753.57 0.00 100.00 Interest receivable on term deposits in current period
Other accounts receivable 23,508,562.57 35,318,724.60 -33.44 Decrease in export tax rebates in current period
Construction in progress 4,119,696.54 2,059,623.18 100.02 Plant renovation awaiting acceptance
Increase in amortized expenditure on plant renovation in
Long-term deferred expenses 6,047,050.35 4,388,248.42 37.80
current period
Short-term borrowings 15,564,600.41 10,832,951.89 43.68 Increase in bank borrowings in current period
Notes payable 29,532,657.35 20,024,149.15 47.49 Increase in bank acceptance bills in current period
Accounts received in advance 24,918,125.10 11,661,974.88 113.67 Increase in advances from customers in current period
Taxes and fares payable 3,864,727.20 2,824,721.65 36.82 Increase in VAT payable in current period
Increase in interest payable resulted from increased bank
Interest payable 16,244.36 1,448.76 1,021.26
borrowings in current period
Decrease in income from translation of
Other comprehensive income 2,106,001.00 4,619,820.87 -54.41 foreign-currency-denominated financial statements in
current period
January-March
Item January-March 2017 +/-% Main reason for change
2018
Operating revenues 319,364,654.64 454,378,577.36 -29.71 Decrease in operating revenues in current period
Increase in unrealized, evaluated foreign exchange loss in
Finance costs 11,665,399.89 1,738,365.97 571.06
current period
Increase in reversed portion of allowance for doubtful
Asset impairment loss -1,776,486.26 -1,181,070.83 50.41 accounts resulted from collection of payments from
customers in current period
No forward foreign exchange contracts in same period of
Gains on fair value changes 1,523,700.00 0.00 100.00
last year
Gains on delivered forward foreign exchange contracts in
Investment income 5,902,804.29 213,698.63 2,662.21
current period
Asset disposal income 327,372.40 172,996.23 89.24 Increase in income from sale of assets in current period
Other income 1,255,697.00 516,075.00 143.32 Increase in government subsidies in current period
Same period of last year seeing receipt of wind damage
Non-operating revenue 281,354.88 1,000,457.93 -71.88 compensation and TKS Phase III receiving default
compensation as lessee
Non-operating expense 29,831.46 56,900.45 -47.57 Same period of last year seeing donations to students
Corporate income tax 348,766.94 3,622,669.95 -90.37 Decrease in profit in current period
Net operating cash flow -8,842,593.74 3,169,455.03 -378.99 Decrease in operating revenues in current period
Same period of last year seeing a higher amount of
Net financing cash flow -6,164,673.70 21,832,513.50 -128.24
borrowings
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
II Progress of significant events and analysis & explanations on their influence and solutions
√ Applicable □ Not applicable
(I) Contingencies
(1) As MTN Products, Inc. / Water Solutions (Hong Kong) Ltd. ("MTN / WSL") did not pay the relevant payment in time and
fulfill the order according to the contract, the subsidiary of the Company, TsannKuen (Zhangzhou) Enterprise Co., Ltd. submitted the
indictment to the SUPERIOR COURT OF CALIFORNIA COUNTY OF LOS ANGELES on 23 November2016to sue MTN / WSL
for payment of USD707,522.92 and USD1,402,940 for reserve losses, totaling USD2,110,462.92. As of the reporting date, the case is
still pending.
(2) As Philips Lighting (China) Investment Co., Ltd. ("Philips Lighting") did not pay the relevant payment in accordance with the
relevant agreement, the Company's subsidiary TsannKuen (Zhangzhou) Enterprise Co., Ltd. (hereafter, TKL), submitted the
indictment on 23 November 2016 to Longhai City People's Court, requesting the payment of CNY2,499,658.4. On 12 January 2018,
TKL received the first instance judgment from the court that Philips should pay CNY 423,345.63 and overdue interest to TKL. TKL
has filed an appeal.
(3) TSANN KUEN (CHINA) ENTERPRISE CO., LTD. (therefore "TKC") and Tian Yuan (Xiamen) Asset Management Co., Ltd.
(therefore "Tianyuan") signed the "Land Lease Contract (Northwest Corner)" and “Housing Lease Contract (North Building) "on 26
June 2013, signed the "LandLease Contract (southeast corner) "," Housing Lease Contract (Huarong Road 23) "(part of the house) on
29 July 2013. TKCleased the part of the land and house on Xinglong Road 88 to Tianyuan for business activities, part of the site and
housing leased to Tian Yuan Company for business activities.
As Tianyuan did not pay the rent in accordance with the contract in time and unauthorized use of the leased property, TKC filed a
lawsuit in Xiamen Huli District People's Court to pay the relevant rent. On 29 December 2015, People's Court of Huli District of
Xiamen City ruled that the four cases will be merged. On 30 May 2017 People's Court of Huli District of Xiamen City made a ruling
of first instance: It ruled that Tianyuan Company paid liquidated damages of overdue payment of the Company. Tianyuan Company
filed an appeal. As of the reporting date, the case is still pending.
(4) The subsidiary of the Company - TsannKuen (Zhangzhou) Enterprise Co., Ltd. (hereafter, TKL) signed the < Product Supply
Agreement> with Xinda Electro mechanics Co., Ltd. (hereafter, Xinda) on 20 July 2009. The validity of the contract is from 1 July
2009 to 30 June 2012. Furthermore, on 1 January 2011, they signed the and relevant , and other agreements. According to those agreements, TKL
should purchase products from Xinda. TKL rejected to pay for the purchase and terminated those agreements due to the poor quality
products from Xinda. On 23 December 2011, Xinda lodged petition for civil litigation to the Intermediate People’s Court of
Zhangzhou for the order of Intermediate People’s Court of Zhangzhou that TKL pay for purchase from Xinda amounting to USD
479,089.06 (CNY 3,071,535.78) immediately together with the liquidated damages for delay payment and resume performance of the
agreement (the value of the unperformed agreement amounting to USD 189,423.25).
On 8 January 2012, TKL lodged counterclaim to the Court claiming that due to unsatisfactory quality of goods supplied by Xinda,
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
goods supplied by TKL had been returned from clients and orders cancelled, resulting in substantial financial loss and reputation
damage suffered by the TKL. TKL therefore petitioned for the court order for relief of agreement and that Xinda shall pay to TKL
liquidated damage amounting to CNY 1 million together with financial loss amounting to CNY 7.6216 million.
Intermediate People’s Court of Zhangzhou made the judgment on 15 August 2013 as follow:
a. TKL should pay goods payments amount USD479,089.06 to plaintiff Xinda within 15 days from the date on which the judgment
becomes effective, equivalent to CNY3,071,535.78.
b. Plaintiff Xinda and the third party BoLuo Lianyuan industry Co., Ltd. (hereafter Lianyuan) should jointly pay the laquidated
damage for CNY1,233,399.70 to TKL within 15 days from the date on which the judgment becomes effective.
c. Unperformed 10 orders entered into by TKL, Xinda and Lianyuan are declared cancelled.
d. Reject other claims partitioned by the plaintiff Xinda.
e. Reject other claims partitioned by TKL. After the first judgment, both parties appealed against the judgment.
Higher People's Court of Fujian Province made the final judgment on 15 December 2016 with the following verdict::
a. Verdict c,d,e from the first judgment remain unchanged.
b. Verdict a from the first judgment changed as: TKL should pay goods payments amount CNY2,375,547.92 Xinda within 15 days
from the date on which the judgment becomes effective.
c. Verdict b from the first judgment changed as: Xinda and BoLuo Lianyuan industry Co., Ltd. Should jointly pay TKL the laquidated
damage for CNY537,411.84 within 15 days from the date on which the judgement becomes effective.
The flawed motor supplied by Xinda and Lianyuan totalled 103,638, 23,035 of them was picked out in (2012) Zhangminchuzi Case
No.8, the Company conducted another notary pick out on the remaining flawed motors during the second instance, totalled 80,603.
TKL lodged petition for civil litigation on 18 January 2017, based on the judgments from (2012) Zhangminchuzi Case No.8, TKL
asks for the order of that Xinda and Lianyuan return the corresponding goods payments of the 80,603 flawed motors, along with
compensation for other losses caused by this. The case is still pending.
(II) Progress of capital increase from TKL to its sub-subsidiary Tsannkuen Edge Intelligence
Resolution on the 1st Special Meeting of Board of Directors for 2018 convened on February 1, 2018 by the Company approved the
capital increase from controlling subsidiary TKL to its sub-subsidiary Tsannkuen Edge Intelligence. For details, see Announcement
on the Capital Increase from Controlling Subsidiary TKL to its Sub-subsidiary Tsannkuen Edge Intelligence published on Securities
Times and Hong Kong Ta Kung Pao, and http://www.cninfo.com.cn on February 2, 2018.
(III) Progress of changes in usage of original part of capital increase of its sub-subsidiary Pt.Star Comgistic
Indonesia by TKL
Resolution on the 1st Special Meeting of Board of Directors for 2018 convened on February 1, 2018 by the Company approved the
Usage of original part of capital increase of its sub-subsidiary Pt.Star Comgistic Indonesia (referred to as “SCI”) by the changes of
controlling subsidiary. For details, see Announcement on the Usage of Original Part of Capital Increase of its Sub-subsidiary SCI by
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
the Changes of Controlling Subsidiary TKL published on Securities Times and Hong Kong Ta Kung Pao, and
http://www.cninfo.com.cn on February 2, 2018. It is in the process of approval now.
(IV) Establishing Subsidiary
The Controlling Subsidiary TKL planned to established wholly-owned subsidiary TsannKuen (Zhangzhou) Investment Co., Ltd. For
details, see Announcement on the Planning for Establishment of Wholly-owned Subsidiary by Controlling Subsidiary TKL published
on Securities Times and Hong Kong Ta Kung Pao, and http://www.cninfo.com.cn on April 28, 2018.
Website where the relevant current
Overview of significant event Disclosure date
announcement is disclosed
Announcement on the Capital Increase from Controlling
Subsidiary TKL to its Sub-subsidiary Tsannkuen Edge 2 February 2018 www.cninfo.com.cn
Intelligence
Announcement on the Usage of Original Part of Capital
Increase of its Sub-subsidiary SCI by the Changes of 2 February 2018 www.cninfo.com.cn
Controlling Subsidiary TKL
Announcement on the Planning for Establishment of
28 April 2018 www.cninfo.com.cn
Wholly-owned Subsidiary by Controlling Subsidiary TKL
III Commitments of the Company’s actual controller, shareholders, related parties and
acquirer, as well as the Company and other commitment makers, unfulfilled in this reporting
period
√ Applicable □ Not applicable
Time of Period
Commitmen Commitm making of
Commitment Contents Fulfillment
t maker ent type commitme comm
nt itment
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
Commitment on equity
incentive
Based on the confidence on the The Company’s
continuous and stable development of the stocks resumed
Company, it committed to increase the trading on
Commitm shareholding if the Company’s stock price December 31, 2012,
FILLMAN
Other commitments ent on lower than HKD2.40 per share after the Longs but the Company’s
INVESTME December
made to minority shareholdi implementation of the shares contraction tandin stock price hasn’t
NTS 28, 2012
shareholders ng and trading resumption, and it would g met the condition
LIMITED
increase increase no more than 2% shares (i.e. for shareholding
3.7078 million shares) of the total shares increase since the
issued by the Company within one year date of trading
since the date of initial shareholding resumption,
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Time of Period
Commitmen Commitm making of
Commitment Contents Fulfillment
t maker ent type commitme comm
nt itment
increase. If the plan on increasing holding FILLMAN
2% shares of the total shares is Investment Limited
completed, if the stock price hasn’t hasn’t implemented
reached the target price, it will perform the shareholding
relevant approval procedures, and increase plan.
propose to CSRC on continuous
implementation of shareholding increase
by exemption of offering.
Executed on time or not Yes
No such cases in the reporting period.
IV Operating result forecast for January-June 2018
Forecast of a possible deficit or considerable YoY change in the accumulative net profit made during the period from the beginning
of the year to the end of the next reporting period, as well as explanation of why:
□Applicable √ Not applicable
V Securities investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
VI Investments in derivative financial instruments
√ Applicable □ Not applicable
Unit: RMB’0,000
Ratio of
Investment investment
Type of amount at Pursed in Investment amount at the
Related-party investment in Initial Sold in this Amount Actual
amount end of the period profit/loss
Operating Commencement the this provided
Relation transaction derivative investment Termination date beginning reporting reporting at the end of to the Company's for the
party date period for
or not financial amount of the period impairment the period net asset at the period
instruments period end of the period
(%)
Forward
Bank Non-related No 36,551.81 January 1, 2018 March 31, 2018 18,662.79 11,561.68 19,656.78 16,895.03 0.29 797.45
forex
Total 36,551.81 18,662.79 11,561.68 19,656.78 16,895.03 0.29 797.45
Source of investment funds All from the Company's own funds
Lawsuits No lawsuits
Disclosure date of the announcement about the
2013-03-12
board’s consent for the investment
Disclosure date of the announcement about the
2013-05-18
general meeting’s consent for the investment
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
Risk analysis and risk control measures for positions Company in the coming year.
held in derivatives in this reporting period (including (2) Staff requirements: Personnel taking part in the investment shall all fully understand the risks of derivative investment and strictly execute the
but not limited to market risk, liquidity risk, credit business operation and risk management mechanisms for derivative investment.
risk, operational risk, legal 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. The Company
and its subsidiaries only need to submit to the Board of Directors of the subsidiaries.
(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.
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
(1) Gains on delivered derivatives in the Reporting Period were RMB 6.4508 million, and assessed gains on those undelivered were RMB 1.5237
Changes in market price or fair value of derivatives
million, of which, the rotation of forwards assessed gains on undelivered derivatives in the last year was RMB 3.9259 million.
invested in this reporting period (specific methods
used and relevant assumption and parameter settings (2) The former contracted bank provided monthly sheets of estimated exchange rates for the undue contracted forward exchanges on the last trading
shall be disclosed for analysis of fair value of day of the month.
derivatives) (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.
Significant changes in the Company’s accounting
policies and specific accounting principles for
No significant changes
derivatives in this reporting period as compared to
the prior period
Special opinions expressed by independent The Company has carried out a strict internal assessment for the financial derivative business and has established a corresponding supervision
directors concerning the Company’s derivatives mechanism. We are of the opinion that the financial derivative business conducted by the Company is fairly necessary in its routine operation and is
investment and risk control in compliance with relevant laws and regulations, with the risks controllable.
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
VII Visits paid to the Company in the Reporting Period for purposes of research,
communication, interview, etc.
√ Applicable □ Not applicable
Date of visit Way of visit Type of visitor Index to main inquiry information
Inquired of the operation of the
2018-01-08 Telephone communication Individual
Company
Inquired of the operation of the
2018-01-16 Telephone communication Individual
Company
Inquired of the forecast loss of the
2018-03-20 Telephone communication Individual annual report and first quarter report ,
and the reform of B-share
Inquired of the operation of the
2018-03-20 Telephone communication Individual
Company
Inquired of the operation of the
2018-03-22 Telephone communication Individual
Company, and the reform of B-share
VIII Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
IX Occupation of the Company’s funds by the controlling shareholder or its related parties
for non-operating purposes
□ Applicable √ Not applicable
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Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Section IV Financial Statements
I Financial statements
1. Consolidated balance sheet
Prepared by TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Unit: RMB
Item Closing amount Opening amount
Current assets:
Monetary funds 535,842,553.36 564,381,960.88
Settlement reserves
Lendings to banks and other financial institutions
Financial assets measured at fair value with fair value changes
5,449,550.00 3,925,850.00
included in the profit and loss for the Reporting Period
Derivative financial assets
Notes receivable
Accounts receivable 166,051,743.35 270,052,420.89
Accounts paid in advance 13,061,982.14 10,939,777.79
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract reserves
Interest receivable 1,529,753.57
Dividends receivable
Other accounts receivable 23,508,562.57 35,318,724.60
Financial assets purchased under agreement to resell
Inventories 188,071,614.03 195,711,505.29
Assets held for sale
Non-current assets due within one year
Other current assets 406,003,086.95 413,119,671.14
Total current assets 1,339,518,845.97 1,493,449,910.59
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 40,000.00 40,000.00
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments
Investment property 31,268,117.72 32,125,408.51
Fixed assets 169,048,296.12 173,361,312.05
Construction in progress 4,119,696.54 2,059,623.18
16
Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Item Closing amount Opening amount
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 28,303,564.06 29,501,389.01
R&D expense
Goodwill
Long-term deferred expenses 6,047,050.35 4,388,248.42
Deferred income tax assets 22,564,665.12 22,682,483.17
Other non-current assets 24,894,519.26 21,216,778.58
Total non-current assets 286,285,909.17 285,375,242.92
Total assets 1,625,804,755.14 1,778,825,153.51
Current liabilities:
Short-term borrowings 15,564,600.41 10,832,951.89
Borrowings from the Central Bank
Money deposits accepted and inter-bank deposits
Loans from banks and other financial institutions
Financial liabilities measured at fair value with fair value changes
included in the profit and loss for the Reporting Period
Derivative financial liabilities
Notes payable 29,532,657.35 20,024,149.15
Accounts payable 452,358,259.77 583,540,229.36
Accounts received in advance 24,918,125.10 11,661,974.88
Financial assets sold for repurchase
Handling charges and commissions payable
Payroll payable 34,137,337.87 44,803,501.77
Taxes and fares payable 3,864,727.20 2,824,721.65
Interest payable 16,244.36 1,448.76
Dividends payable
Other accounts payable 55,519,017.68 51,138,758.51
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of securities
Payables for acting underwriting of securities
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 615,910,969.74 724,827,735.97
Non-current liabilities:
Long-term borrowings
17
Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Item Closing amount Opening amount
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term accounts payable
Long-term payroll payable 169,856.55 156,540.09
Special payables 109,137,778.28 109,137,778.28
Estimated liabilities
Deferred income
Deferred income tax liabilities 1,739,945.92 1,431,505.08
Other non-current liabilities
Total non-current liabilities 111,047,580.75 110,725,823.45
Total liabilities 726,958,550.49 835,553,559.42
Owners’ equity:
Share capital 185,391,680.00 185,391,680.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserves 296,808,965.79 296,808,965.79
Less: Treasury stock
Other composite income 2,106,001.00 4,619,820.87
Special reserves
Surplus reserves 33,888,636.90 33,888,636.90
Provisions for general risks
Retained profit 68,226,989.42 90,105,224.21
Total equity attributable to owners of the Company 586,422,273.11 610,814,327.77
Minority interests 312,423,931.54 332,457,266.32
Total owners’ equity 898,846,204.65 943,271,594.09
Total liabilities and owners’ equity 1,625,804,755.14 1,778,825,153.51
Legal representative: Pan Zhirong Chief of the accounting work: Feng Zhiqing Chief of the accounting organ: Feng Zhiqing
18
Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
2. Balance sheet of the Company
Unit: RMB
Item Closing balance Opening balance
Current Assets:
Monetary funds 22,156,283.70 5,342,389.95
Financial assets measured at fair value with fair value changes
included in the profit and loss for the Reporting Period
Derivative financial assets
Notes receivable
Accounts receivable 14,528,037.12 20,741,059.08
Accounts paid in advance 215,712.00 443,847.00
Interest receivable
Dividends receivable
Other accounts receivable 287,598.90 472,467.07
Inventories 12,870,257.68 16,130,234.05
Assets held for sale
Non-current assets due within one year
Other current assets 1,023,556.88
Total current assets 50,057,889.40 44,153,554.03
Non-current assets:
Available-for-sale financial assets 40,000.00 40,000.00
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 922,914,701.56 922,914,701.56
Investment property 31,818,440.40 32,598,504.60
Fixed assets 1,470,769.30 1,568,125.72
Construction in progress
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 49,499.99 56,249.99
R&D expense
Goodwill
Long-term deferred expenses 8,799.82 18,932.97
Deferred income tax assets 10,475,642.18 10,492,468.50
Other non-current assets
Total non-current assets 966,777,853.25 967,688,983.34
Total assets 1,016,835,742.65 1,011,842,537.37
Current liabilities:
Short-term borrowings
Financial liabilities measured at fair value with fair value changes
included in the profit and loss for the Reporting Period
Derivative financial liabilities
Notes payable
19
Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Item Closing balance Opening balance
Accounts payable 46,405,172.40 71,274,018.34
Accounts received in advance 3,828,526.06 1,664,602.93
Payroll payable 3,678,923.53 2,981,548.19
Taxes and fares payable 963,673.38 894,510.08
Interest payable
Dividends payable
Other accounts payable 280,839,107.52 288,656,915.61
Liabilities held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 335,715,402.89 365,471,595.15
Non-current liabilities:
Long-term borrowings
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term payables
Long-term payroll payables
Special payables
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 335,715,402.89 365,471,595.15
Owners’ equity:
Share capital 185,391,680.00 185,391,680.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserves 271,490,289.82 271,490,289.82
Less: Treasury stock
Other composite income
Special reserves
Surplus reserves 33,888,636.90 33,888,636.90
Retained profit 190,349,733.04 155,600,335.50
Total owners’ equity 681,120,339.76 646,370,942.22
Total liabilities and owners’ equity 1,016,835,742.65 1,011,842,537.37
Legal representative: Pan Zhirong Chief of the accounting work: Feng Zhiqing Chief of the accounting organ: Feng Zhiqing
20
Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
3. Consolidated income statement
Unit: RMB
Item January-March 2018 January-March 2017
1. Operating revenues 319,364,654.64 454,378,577.36
Including: Sales revenue 319,364,654.64 454,378,577.36
Interest revenue
Premium revenue
Handling charge and commission revenue
2. Total operating costs 358,168,095.81 444,388,401.44
Including: Cost of sales 293,239,451.95 387,349,957.02
Interest expenses
Handling charge and commission expenses
Surrenders
Net claims paid
Net amount provided as insurance contract reserves
Expenditure on policy dividends
Reinsurance premium
Taxes and surtaxes 3,143,568.77 3,337,174.29
Selling expenses 13,638,807.57 17,801,039.57
Administrative expenses 38,257,353.89 35,342,935.42
Finance costs 11,665,399.89 1,738,365.97
Asset impairment loss -1,776,486.26 -1,181,070.83
Add: Profit/loss on fair value changes (“-” means loss) 1,523,700.00
Profit/loss on investment (“-” means loss) 5,902,804.29 213,698.63
Including: Share of profit in associates and joint ventures
Foreign exchange profit (“-” means loss)
Income arising from disposal of assets (“-” means loss) 327,372.40 172,996.23
Other income 1,255,697.00 516,075.00
3. Operating profit (“-” means loss) -29,793,867.48 10,892,945.78
Add: Non-operating revenue 281,354.88 1,000,457.93
Including: Profit on damage and scrapping of non-current assets
Less: Non-operating expense 29,831.46 56,900.45
Including: Loss on damage and scrapping of non-current assets 5,199.46 6,900.45
4. Total profit (“-” means loss) -29,542,344.06 11,836,503.26
Less: Corporate income tax 348,766.94 3,622,669.95
5. Net profit (“-” means loss) -29,891,111.00 8,213,833.31
5.1 Net profit from going concern (“-” means net loss) -29,891,111.00 8,213,833.31
5.2 Net profit from discontinued operation (“-” means net loss)
Net profit attributable to owners of the Company -21,878,234.79 6,800,900.65
21
Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
Item January-March 2018 January-March 2017
Minority shareholders’ income -8,012,876.21 1,412,932.66
6. After-tax net amount of other composite income -3,351,759.83 211,819.25
After-tax net amount of other composite income attributable to owners of the
-2,513,819.87 158,864.44
Company
6.1 Other composite income that will not be reclassified into profit and loss
6.1.1 Changes in net liabilities or assets with a defined benefit plan upon
re-measurement
6.1.2 Enjoyable share in other comprehensive income in investees that cannot
be reclassified into profit and loss under the equity method
6.2 Other composite income that will be reclassified into profit and loss -2,513,819.87 158,864.44
6.2.1 Enjoyable share in other composite income in investees that will be
reclassified into profit and loss under the equity method
6.2.2 Profit and loss on fair value changes of available-for-sale financial assets
6.2.3 Profit and loss on reclassifying held-to-maturity investments into
available-for-sale financial assets
6.2.4 Effective hedging profit and loss on cash flow
6.2.5 Foreign-currency financial statement translation difference -2,513,819.87 158,864.44
6.2.6 Other
After-tax net amount of other composite income attributable to minority
-837,939.96 52,954.81
shareholders
7. Total composite income -33,242,870.83 8,425,652.56
Attributable to owners of the Company -24,392,054.66 6,959,765.09
Attributable to minority shareholders -8,850,816.17 1,465,887.47
8. Earnings per share
8.1 Basic earnings per share -0.12 0.04
8.2 Diluted earnings per share -0.12 0.04
Where business mergers under the same control occurred in the Reporting Period, net profit achieved by the merged parties before
the business mergers was RMB 0.00, with the corresponding amount for the same period of last year being RMB0.00.
Legal representative: Pan Zhirong Chief of the accounting work: Feng Zhiqing Chief of the accounting organ: Feng Zhiqing
22
Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
4. Income statement of the Company
Unit: RMB
January-March January-March
Item
2018 2017
1. Operating revenues 25,078,057.17 21,002,892.18
Less: Operating costs 20,332,971.17 15,142,772.24
Taxes and surtaxes 605,071.88 729,157.30
Selling expenses 1,754,858.63 2,156,628.15
Administrative expenses 1,433,363.89 2,943,317.20
Financial costs -1,065.19 -15,902.72
Asset impairment loss -251,973.27 -1,150,303.33
Add: profit/loss on fair value changes (“-” means loss)
Profit/loss on investment (“-” means loss) 33,547,555.83 30,310,250.78
Including: Income from investment on associates and joint ventures
Income arising from disposal of assets (“-” means loss)
Other income
2. Operating profit (“-” means loss) 34,752,385.89 31,507,474.12
Add: Non-operating revenue 18,469.97 41,647.63
Including: Profit on damage and scrapping of non-current assets
Less: Non-operating expense 4,632.00
Including: Loss on damage and scrapping of non-current assets
3. Total profit (“-” means loss) 34,766,223.86 31,549,121.75
Less: Corporate income tax 16,826.32 266,215.77
4. Net profit (“-” means loss) 34,749,397.54 31,282,905.98
4.1 Net profit from going concern (“-” means net loss) 34,749,397.54 31,282,905.98
4.2 Net profit from discontinued operation (“-” means net loss)
5. After-tax net amount of other composite income
5.1 Other composite income that will not be reclassified into profit and loss
5.1.1 Changes in net liabilities or assets with a defined benefit plan upon
re-measurement
5.1.2 Enjoyable share in other composite income in investees that cannot be
reclassified into profit and loss under the equity method
5.2 Other composite income that will be reclassified into profit and loss
5.2.1 Enjoyable share in other composite income in investees that will be reclassified
into profit and loss under the equity method
5.2.2 Profit and loss on fair value changes of available-for-sale financial assets
5.2.3 Profit and loss on reclassifying held-to-maturity investments into
available-for-sale financial assets
5.2.4 Effective hedging profit and loss on cash flow
5.2.5 Foreign-currency financial statement translation difference
5.2.6 Other
6. Total composite income 34,749,397.54 31,282,905.98
Legal representative: Pan Zhirong Chief of the accounting work: Feng Zhiqing Chief of the accounting organ: Feng Zhiqing
23
Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
5. Consolidated cash flow statement
Unit: RMB
January-March January-March
Item
2018 2017
1. Operating cash flow:
Cash received from sale of commodities and rendering of service 421,714,037.46 491,298,063.61
Net increase in money deposits from customers and inter-bank placements
Net increase in loans from the Central Bank
Net increase in funds borrowed from other financial institutions
Cash received from premium of original insurance contracts
Net cash received from reinsurance business
Net increase in deposits of policy holders and investment fund
Net increase in disposal of financial assets measured at fair value with fair value changes
included in the profit and loss for the Reporting Period
Cash received from interest, handling charges and commissions
Net increase in loans from banks and other financial institutions
Net increase in funds in repurchase business
Tax refunds received 54,253,887.28 50,899,572.11
Other operating cash received 8,917,968.49 19,055,478.67
Subtotal of operating cash inflow 484,885,893.23 561,253,114.39
Cash paid for goods and services 388,927,995.77 421,536,510.47
Net increase in loans and advances to customers
Net increase in funds deposited in the Central Bank and inter-bank placements
Cash for paying claims of original insurance contracts
Cash for paying interest, handling charges and commissions
Cash for paying policy dividends
Cash paid to and for employees 66,421,877.12 71,049,721.91
Taxes and fares paid 3,866,015.63 16,287,373.30
Other cash payment relating to operating activities 34,512,598.45 49,210,053.68
Subtotal of operating cash outflow 493,728,486.97 558,083,659.36
Net operating cash flow -8,842,593.74 3,169,455.03
2. Investment cash flow:
Cash received from retraction of investments 46,450,800.00 32,729,887.43
Cash received from return on investments 1,396,650.10 229,280.83
Net cash received from disposal of fixed assets, intangible assets and other long-term
287,716.15 1,882,588.00
assets
Net cash received from disposal of subsidiaries or other business units
Other cash received relating to investment activities 62,300,000.00 9,819,374.14
Subtotal of investment cash inflow 110,435,166.25 44,661,130.40
Cash paid to acquire fixed assets, intangible assets and other long-term assets 13,979,813.74 18,968,169.49
Cash paid for investment 40,000,000.00 192,047,415.57
24
Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
January-March January-March
Item
2018 2017
Net increase in pledged loans
Net cash paid to acquire subsidiaries and other business units
Other cash payments relating to investment activities 358,264,600.00 134,062,797.79
Subtotal of investment cash outflow 412,244,413.74 345,078,382.85
Net investment cash flow -301,809,247.49 -300,417,252.45
3. Financing cash flow:
Cash received from capital contributions
Including: Cash received from minority shareholder investments by subsidiaries
Cash received as borrowings 5,108,330.63 25,036,648.00
Cash received from issuance of bonds
Other financing cash received 6,899,282.43
Subtotal of financing cash inflow 5,108,330.63 31,935,930.43
Repayment of borrowings
Cash paid for interest expenses and distribution of dividends or profit 11,273,004.33 10,103,416.93
Including: dividends or profit paid by subsidiaries to minority shareholders 11,182,518.61 10,103,416.93
Other cash payments relating to financing activities
Sub-total of financing cash outflow 11,273,004.33 10,103,416.93
Net financing cash flow -6,164,673.70 21,832,513.50
4. Effect of foreign exchange rate changes on cash and cash equivalents -7,687,492.59 -2,285,644.08
5. Net increase in cash and cash equivalents -324,504,007.52 -277,700,928.00
Add: Opening balance of cash and cash equivalents 564,381,960.88 738,195,729.53
6. Closing balance of cash and cash equivalents 239,877,953.36 460,494,801.53
Legal representative: Pan Zhirong Chief of the accounting work: Feng Zhiqing Chief of the accounting organ: Feng Zhiqing
25
Report for the First Quarter of 2018 of Tsann Kuen (China) Enterprise Co., Ltd.
6. Cash flow statement of the Company
Unit: RMB
Item January-March 2018 January-March 2017
1. Operating cash flow:
Cash received from sale of commodities and rendering of service 22,858,389.74 35,261,061.42
Tax refunds received
Other operating cash received 10,659,931.71 14,251,817.18
Subtotal of operating cash inflow 33,518,321.45 49,512,878.60
Cash paid for goods and services 35,107,058.89 38,935,020.23
Cash paid to and for employees 704,419.01 4,595,972.16
Taxes and fares paid 1,021,402.40 1,423,553.61
Other operating cash payments 13,419,027.17 9,177,813.37
Subtotal of operating cash outflow 50,251,907.47 54,132,359.37
Net operating cash flow -16,733,586.02 -4,619,480.77
2. Investment cash flow:
Cash received from retraction of investments
Cash received from return on investments 33,547,555.83 30,310,250.78
Net cash received from disposal of fixed assets, intangible assets and other
long-term assets
Net cash received from disposal of subsidiaries or other business units
Other cash received relating to investment activities
Subtotal of investment cash inflow 33,547,555.83 30,310,250.78
Cash paid to acquire fixed assets, intangible assets and other long-term assets 22,950.00
Cash paid for investment
Net cash paid to acquire subsidiaries and other business units
Other investment cash payments
Subtotal of investment cash outflow 0.00 22,950.00
Net investment cash flow 33,547,555.83 30,287,300.78
3. Financing cash flow:
Cash received from capital contributions
Cash received as borrowings
Cash received from issuance of bonds
Other financing cash received
Subtotal of financing cash inflow
Repayment of borrowings
Cash paid for interest expenses and distribution of dividends or profit
Other cash payments relating to financing activities
Sub-total of financing cash outflow
Net financing cash flow
4. Effect of foreign exchange rate changes on cash and cash equivalents -76.06 21.99
5. Net increase in cash and cash equivalents 16,813,893.75 25,667,842.00
Add: Opening balance of cash and cash equivalents 5,342,389.95 6,668,219.24
6. Closing balance of cash and cash equivalents 22,156,283.70 32,336,061.24
Legal representative: Pan Zhirong Chief of the accounting work: Feng Zhiqing Chief of the accounting organ: Feng Zhiqing
II Auditor’s report
Is this Report audited?
□ Yes √ No
This Report is not audited.
26
