2015 Annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
2015 ANNUAL REPORT
March 2016
0
2015 Annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Section I. Important Statements, Contents & Terms
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 information,
misleading statements or material omissions. And they shall be jointly and severally liable for that.
All directors attended the board meeting for reviewing this Report.
The Company’s profit distribution preplan upon review and approval of this board meeting: Based
on the total 185,391,680 shares, a cash dividend of RMB1.00 (tax included) will be distributed for
every 10 shares held by shareholders. No bonus shares will be granted and no capital reserve will be
turned into share capital.
Mr. Pan Zhirong, company principal, and Mr. Wu Yanru, 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.
Any forward-looking statement such as those involving the future operational plans in this Report
shall not be considered as virtual promises of the Company to investors. And investors are kindly
reminded to pay attention to possible risks.
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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2015 Annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Contents
Section I. Important Statements, Contents & Terms............................................. 1
Section II. Company Profile & Financial Highlights ............................................. 4
Section III. Business Highlights............................................................................... 9
Section IV. Discussion & Analysis by Management............................................. 11
Section V. Significant Events................................................................................. 33
Section VI. Change in Shares & Shareholders ..................................................... 45
Section VII. Preferred stock .................................................................................. 49
Section VIII. Directors, Supervisors, Senior Management Staff & Employees.. 49
Section IX. Corporate Governance ....................................................................... 52
Section X. Financial Report................................................................................... 58
Section XI. Documents Available for Reference................................................... 59
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2015 Annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Terms
Term Refers to Content
Xiamen Tsann Kuen, MCKB, Company,
Refers to Tsann Kuen (China) Enterprise Co., Ltd.
the Company, TKC
Tsann Kuen Zhangzhou, TKL Refers to Tsann Kuen (Zhangzhou) Enterprise Co., Ltd.
Tsann Kuen Shanghai, TKS Refers to Tsann Kuen China (Shanghai) Enterprise Co., Ltd.
Tsann Kuen (Zhangzhou) South Port Electronics Enterprise
South Port Electronics, TKN Refers to
Co., Ltd.
Tsann Kuen (Zhangzhou) Profession and Technology
Tsann Kuen Institute, LTC Refers to
Institute
STD Refers to Shanghai Canxing Trading Co., Ltd.
East Sino Development Refers to East Sino Development Limited
SCI Refers to Pt.Star Comgistic Indonesia
Orient Star Investments Refers to Orient Star Investments Limited
Tsannkuen Edge Intelligence Refers to Tsannkuen Edge Intelligence Co., Ltd.
Yuan Refers to RMB Yuan
Major Risk Warning
Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn are designated by the Company as the
media for information disclosure. All information of the Company shall be subject to what is
disclosed by the Company on the said media. And Investors are kindly reminded to pay attention to
possible investment risks.
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2015 Annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Section II. Company Profile & Financial Highlights
I. Basic information of the Company
Stock abbr. TKC B Stock code 200512
Stock exchange Shenzhen Stock Exchange
Company name in
厦门灿坤实业股份有限公司
Chinese’s
Abbr. 闽灿坤
Company name in English TSANNKUEN(CHINA) ENTERPRISE CO. LTD
Abbr. TKC
Legal representative Pan Zhirong
Registered address No.88 Xinglong Road, Huli Industrial Park, Xiamen, Fujian Province, P.R. China
Zip code 361006
TSANN KUEN Industrial Park, Taiwanese Investment Zone, Zhangzhou, Fujian
Office address
Province
Zip code 363107
Internet website www.eupa.com
Email address mm_sun@tkl.tsannkuen.com
II. Contact us
Securities Affairs
Company Secretary
Representative
Name Sun Meimei
TSANN KUEN Industrial Park, Taiwanese Investment
Contact address
Zone, Zhangzhou, Fujian Province
Tel. 0596-6268161
Fax 0596-6268104
E-mail address mm_sun@tkl.tsannkuen.com
III. About information disclosure and where this Report is placed
Newspapers designated by the Company for information Securities Times (domestic), Ta Kung Pao (HK)
disclosure (overseas)
Internet website designated by CSRC for disclosing this
www.cninfo.com.cn
Report
TSANN KUEN Industrial Park, Taiwanese
Where this Report is placed
Investment Zone, Zhangzhou, Fujian Province
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2015 Annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
IV. Changes in the registered information
Organizational code 61200217-0
Changes of the main business since listing No changes
Changes of the controlling shareholder No changes
V. Other information
The CPAs firm hired by the Company:
Name Ruihua Certified Public Accountants LLP
5-11/F,WestTower of China Overseas PropertyPlaza, Building 7,NO.8,Yongdingmen
Office address
Xibinhe Road, Dongcheng District, Beijing
Signing accountants Pan Xinhua, Chen Lianwu
Sponsor engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Inapplicable
Financial consultant engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable √ Inapplicable
VI. Accounting and financial highlights
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the
accounting policy or correction of any accounting error?
□ Yes √ No
Unit: RMB Yuan
Increase/decrease
of current year
Item 2015 2014 2013
over last year
(%)
Operating revenue 1,968,728,531.55 2,008,161,297.50 -1.96 2,037,382,839.55
Net profit attributable to
36,782,299.50 51,348,795.39 -28.37 47,069,386.29
shareholders of the Company
Net profit attributable to
shareholders of the Company
25,526,229.90 41,759,659.26 -38.87 16,537,966.34
after extraordinary gains and
losses
Net cash flows from operating
83,438,590.84 45,016,298.98 85.35 165,776,987.42
activities
Basic EPS (RMB Yuan/share) 0.20 0.28 -28.57 0.25
Diluted EPS (RMB Yuan/share) 0.20 0.28 -28.57 0.25
Weighted average ROE (%) 6.31 9.66 -3.35 9.36
Increase/decrease
As at 31 Dec. As at 31 Dec. of current As at 31 Dec.
Item
2015 2014 year-end than 2013
last year-end (%)
Total assets 1,656,036,577.21 1,651,024,619.41 0.30 1,690,801,284.83
Net assets attributable to
559,728,743.98 546,574,409.55 2.41 520,693,211.26
shareholders of the Company
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2015 Annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Total shares of the Company as at closure of the last trading day before the disclosure of this Report:
Total shares of the Company as at closure of the last trading day before
185,391,680
the disclosure of this Report (share)
Fully diluted EPS based on the latest total shares (RMB Yuan/share) 0.20
VII. 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. Explain reasons for the differences between accounting data under domestic and overseas accounting
standards
□ Applicable √ Inapplicable
VIII. Financial highlights by quarter
Unit: RMB Yuan
Item Q1 Q2 Q3 Q4
Operating revenue 453,454,308.58 441,739,849.49 579,140,206.32 494,394,167.16
Net profit attributable to shareholders of
7,995,185.44 7,115,839.74 12,960,350.00 8,710,924.32
the Company
Net profit attributable to shareholders of
the Company after extraordinary gains 2,993,743.17 672,763.97 19,466,416.78 2,393,305.98
and losses
Net cash flows from operating activities -36,982,666.95 -13,580,972.86 -53,558,201.77 187,560,432.42
Any material difference between the financial indicators above or their summations and those which have been
disclosed in quarterly or semi-annual reports?
□ Yes √ No
IX. Extraordinary gains and losses
√ Applicable □ Inapplicable
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2015 Annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Unit: RMB Yuan
Item 2015 2014 2013 Note
Gain/loss on the disposal of non-current assets
(including the offset part of the asset impairment 1,498,471.95 1,407,170.02 4,442,400.54
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
3,752,212.58 3,248,685.00 3,492,934.73
business or granted at certain quotas or amounts
according to the government’s unified standards
Capital occupation charges on non-financial enterprises
that are 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 on business reorganization, such as expenses
on staff arrangements, integration, etc.
Gain/loss on the part over the fair value due to
transactions with distinctly unfair prices
Current net gains and losses of subsidiaries acquired in
business combination under the same control 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 tradable financial liabilities, as well
as investment income from disposal of tradable
financial assets and tradable financial liabilities and 9,471,741.12 6,129,027.65 38,301,429.47
financial assets available for sales except for effective
hedging related with normal businesses of the
Company
Impairment provision reversal of accounts receivable
on which the impairment test is carried out separately
Gain/loss on entrustment loans
Gain/loss on change of the fair value of investing real
estate of which the subsequent measurement is carried
out adopting the fair value method
Effect on current gains/losses when a one-off
adjustment is made to current gains/losses according to
requirements of taxation, accounting and other relevant
laws and regulations
Custody fee income when entrusted with operation
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2015 Annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Item 2015 2014 2013 Note
Non-operating income and expense other than the
2,854,865.72 3,343,434.29 617,292.26
above
Other gain and loss items that meet the definition of an
1,285,415.02
extraordinary gain/loss
Less: Income tax effects 2,613,182.91 2,487,669.32 7,380,677.11
Minority interests effects (after tax) 3,708,038.86 3,336,926.53 8,941,959.94
Total 11,256,069.60 9,589,136.13 30,531,419.95
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2015 Annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
Section III. Business Highlights
I. Main business during the reporting period
Development and manufacture of household appliances, electronics, light industrial products, modern office
supplies; design and manufacture of molds for those products; Sale of the Company’s products in China and to
other countries and regions as well as provision of relevant after-sales service; wholesale, retail (only in the
Company’s own shops), import & export and relevant supporting business of household appliances, electronic
products, electrical equipment, office supplies, kitchen utensils and pre-packaged food as well as provision of
relevant after-sales service (the aforesaid business scope of the Company does not involve state trading
commodities; where quota permission or a license is required, it shall be obtained according to the regulations of
the country before operation). No material changes occurred to the business model of the Company in the
reporting period.
II. Material changes in main assets
1. Material changes in main assets
Main assets Material change
Financial assets measured
RMB0.00 as at 31 Dec. 2015, down by RMB2,610,000.00 from the opening amount
at fair value of which
of the year, mainly because of loss on forward exchange contracts caused by RMB
changes are recorded into
depreciation
current gains and losses
RMB16,864,224.91 as at 31 Dec. 2015, up 32.18% from the opening amount of the
Prepayments
year, mainly because of increased prepayments for utilities
RMB1,135,305.55 as at 31 Dec. 2015, down 68.38% from the opening amount of the
Interest receivable year, mainly because of the considerable decrease in term deposits which were used to
generate interest income
RMB49,490,650.89 as at 31 Dec. 2015, up 41.92% from the opening amount of the
Other receivables
year, mainly because receivable export tax rebates increased
RMB264,090,949.73 as at 31 Dec. 2015, up 36.73% from the opening amount of the
Inventories year, mainly because the stock of finished products was increased for outstanding
orders
RMB89,858,232.99 as at 31 Dec. 2015, up 5.87 times from the opening amount of the
Other current assets
year, mainly undue financial products purchased in current period
RMB6,264,771.15 as at 31 Dec. 2015, up 2.25 times from the opening amount of the
Other non-current assets
year, mainly because of increased prepayments for molding equipment
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2015 Annual Report of Tsann Kuen (China) Enterprise Co., Ltd.
2. Main assets overseas
√ Applicable □ Inapplicable
Unit: RMB Yuan
Measures In the
taken to Company Any major
Operation
Asset Nature Value Location protect Earnings ’s net impairment
status
asset assets risk or not
safety (%)
Pt.Star
Indonesi No major
Comgistic Investment 117,164,318.11 Normal -9,217,941.00 20.93% No
a risk
Indonesia
Other
informatio N/A
n
III. Core competitiveness analysis
√ Applicable □ Inapplicable
As a manufacturer of small home appliances, most of our products are exported. And our core competitive edges
mainly lie in the capability to develop new products in a timely manner according to market needs due to our
strength in technology and R&D as well as a relatively high market position due to our good relationship with
some customers with globally famous brands.
In the reporting period, we obtained 177 patents in R&D, including 30 invention patents, 33 innovation patents
and 114 product design patents. There are also dozens of patents being applied for. These patents can help better
protect our intellectual property rights, give play to our competitive edge in independent property rights, keep a
leading position in technology and increase our core competitiveness.
In the reporting period, TsannKuen (Zhangzhou) Enterprise Co., Ltd. (“TsannKuen Zhangzhou”), one of our
controlled subsidiaries, acquired 100% equity rights of Taiwan-based related party Tsannkuen Edge Intelligence
Co., Ltd. (“Edge Intelligence”). Edge Intelligence owns the Arduino open control platform technology, which will
be a great help in our medium and long-term strategy for IOT (Internet of Things), ICT (Information and
Communication Tech) and AI (Artificial Intelligence). After the acquisition, the R&D and technology strength of
Edge Intelligence in Taiwan would help further increase our overall strength in R&D, strengthen our medium and
long-term strategy in R&D, mutually complement R&D resources of our operations in China Mainland, and
improve our smart home appliance division to cope with the rapid changes in the market. Currently, the approval
formalities with the competent authorities in Taiwan for the acquisition of the equity interests of Edge Intelligence
are being handled.
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Section IV. Discussion & Analysis by Management
I. Business review for reporting period
For the reporting period, the Company achieved operating revenues of RMB1.968 billion, down 1.96% over
RMB2.008 billion of last year, and net profit of RMB37 million, down 28.37% over RMB51 million of last year.
This was mainly because of increase in cost of labor and decrease in rent income of the subsidiary Tsann Kuen
Shanghai.
II. Main business analysis
1. Overview
According to our strategy of “lean reform and transformation for upgrading”, we introduced new technique to
improve our productivity effect, optimize our product performance and cut down our manufacturing costs.
Meanwhile, committed to green, low-carbon economy, we improved our operating efficiency to save energy and
reduce costs. Introducing new technique and at the same time upholding independent product development and
innovation with strict quality standards, we will transform our products, amid increasing competition, towards
products with high added value and build up a high-end service model to create more intimacy with customers and
therefore more market demands.
In 2015, the American and European markets continue to recover, with a larger market scale but a
slower-than-expected speed. We adjust our product structure, optimize our supplier management framework,
reduce our costs in every link of the supply chain, increase our operating efficiency and effectiveness, and provide
elaborately designed multifunctional small household appliances with high green, low-carbon technological
contents which are exactly what the market needs, trying to increase our profitability.
Meanwhile, as smart houses are becoming a trend and people are pursuing more convenient and comfortable life,
we will focus, in our efforts for product development and innovation, on smart household appliances to satisfy
people’s needs for a fully smart house. We will try to effectively enlarge our share in the market where smart
household appliances have been considered a necessary element for a comfortable life.
2. Revenues and costs
(1) Breakdown of operating revenues
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Unit: RMB Yuan
2015 2014
Item +/-%
In total operating In total operating
Amount Amount
revenues (%) revenues (%)
By segments
Small home
1,902,907,171.01 96.66 1,927,053,028.84 95.96 -1.25
appliance
Other 65,821,360.54 3.34 81,108,268.66 4.04 -18.85
Total 1,968,728,531.55 100.00 2,008,161,297.50 100.00 -1.96
By products
Cooking tools 1,237,385,562.27 62.85 1,200,426,463.00 59.78 3.08
Home helper 414,423,298.75 21.05 515,483,598.59 25.67 -19.60
Tea/Coffee makers 235,062,032.76 11.94 184,628,880.85 9.19 27.32
Other products 16,036,277.23 0.82 26,514,086.40 1.32 -39.52
Other services 65,821,360.54 3.34 81,108,268.66 4.04 -18.85
Total 1,968,728,531.55 100.00 2,008,161,297.50 100.00 -1.96
By areas
Australia 98,405,708.12 5.00 117,368,861.14 5.84 -16.16
Africa 9,827,663.03 0.50 15,476,211.60 0.77 -36.50
America 800,913,083.11 40.68 754,652,149.43 37.58 6.13
Europe 425,861,801.42 21.63 424,929,783.18 21.16 0.22
Asia 633,720,275.87 32.19 695,734,292.15 34.65 -8.91
Total 1,968,728,531.55 100.00 2,008,161,297.50 100.00 -1.96
(2) Segments, products or areas contributing over 10% of operating revenues or profit
Unit: RMB Yuan
Gross profit
Operating Operating
Gross profit margin: +/-%
Item Operating revenue Operating cost revenue: +/-% cost: +/-%
margin (%) from last
from last year from last year
year
By segments
Small home appliance 1,902,907,171.01 1,650,198,796.68 13.28 -1.25 -2.17 0.81
Other 65,821,360.54 22,426,043.53 65.93 -18.85 -3.37 -5.46
Total 1,968,728,531.55 1,672,624,840.21 15.04 -1.96 -2.18 0.19
By products
Cooking tools 1,237,385,562.27 1,056,546,841.40 14.61 3.08 1.90 0.99
Home helper 414,423,298.75 373,447,044.88 9.89 -19.60 -20.49 1.00
Tea/Coffee makers 235,062,032.76 207,140,807.34 11.88 27.32 26.51 0.57
Other products 16,036,277.23 13,064,103.06 18.53 -39.52 -20.80 -19.26
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Gross profit
Operating Operating
Gross profit margin: +/-%
Item Operating revenue Operating cost revenue: +/-% cost: +/-%
margin (%) from last
from last year from last year
year
Other services 65,821,360.54 22,426,043.53 65.93 -18.85 -3.37 -5.46
Total 1,968,728,531.55 1,672,624,840.21 15.04 -1.96 -2.18 0.19
By areas
Australia 98,405,708.12 82,385,770.35 16.28 -16.16 -20.37 4.43
Africa 9,827,663.03 8,638,937.49 12.10 -36.50 -30.78 -7.26
America 800,913,083.11 703,013,743.72 12.22 6.13 6.60 -0.39
Europe 425,861,801.42 366,981,330.59 13.83 0.22 -0.95 1.02
Asia 633,720,275.87 511,605,058.06 19.27 -8.91 -9.30 0.35
Total 1,968,728,531.55 1,672,624,840.21 15.04 -1.96 -2.18 0.19
Main business data of the previous year restated according to the changed statistical caliber for the reporting
period
□ Applicable √ Inapplicable
(3) Are the Company’s goods selling revenue higher than the service revenue?
√ Yes □ No
Unit: Unit
Industry Item 2015 2014 YoY +/-%
Sales volume 20,156,184 20,971,446 -3.89
Small home appliance manufacture Output 20,437,645 22,078,361 -7.43
Stock 1,513,077 1,231,616 22.85
Reasons for any over-30% YoY movement of the data above:
□ Applicable √ Inapplicable
(4) List of the execution of the signed significant sales contracts of the Company up to the reporting period
□ Applicable √ Inapplicable
(5) Operating cost form
Unit: RMB Yuan
2015 2014
Items YoY +/- (%)
Ratio to the Ratio to the
Amount Amount
operating cost (%) operating cost (%)
By segments
Small home
1,650,198,796.68 98.66 1,686,769,448.84 98.64 -2.17
appliance
Other 22,426,043.53 1.34 23,207,076.33 1.36 -3.37
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
2015 2014
Items YoY +/- (%)
Ratio to the Ratio to the
Amount Amount
operating cost (%) operating cost (%)
Total 1,672,624,840.21 100.00 1,709,976,525.17 100.00 -2.18
By products
Cooking tools 1,056,546,841.40 63.17 1,036,871,171.77 60.64 1.90
Home helper 373,447,044.88 22.33 469,664,332.45 27.46 -20.49
Tea/Coffee makers 207,140,807.34 12.38 163,739,852.05 9.58 26.51
Other products 13,064,103.06 0.78 16,494,092.57 0.96 -20.80
Other services 22,426,043.53 1.34 23,207,076.33 1.36 -3.37
Total 1,672,624,840.21 100.00 1,709,976,525.17 100.00 -2.18
(6) Whether there were changes of the consolidation scope during the reporting period
√ Yes □ No
In Feb. 2015, the controlled subsidiary of the Company Tsann Kuen (Zhangzhou) Enterprise Co., Ltd. written off its subsidiary Tsann
Kuen (Zhangzhou) Profession and Technology Institute. Since the date that completed the written-off, Tsann Kuen (Zhangzhou)
Profession and Technology Institute would be no longer included in the consolidated statement scope, while the income, expenses
and profits before the completion of the written-off included in the consolidated income statement and the cash flow in the
consolidated cash flow statement.
In Apr. 2015, the controlled subsidiary of the Company Tsann Kuen (Zhangzhou) Enterprise Co., Ltd. purchased the 100% equities of
Orient Star Investments Limited held by Bosco Consultancy Limited. And the Company included Orient Star Investments Limited
into the consolidated scope of the financial report since the date when completed the purchase.
(7) List of the significant changes or adjustment of the industries, products or services of the Company
during the reporting period
□ Applicable √ Inapplicable
(8) List of the major trade debtors and major suppliers
List of the major trade debtors of the Company
Unit: RMB Yuan
Total sales to the top 5 customers 1,005,033,973.35
Ratio of the total sales to the top 5 customers to the annual total sales (%) 52.82
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Information of the top 5 customers of the Company
Unit: RMB Yuan
Serial No. Name of customer Sales amount Proportion in annual total sales
1 No. 1 281,768,789.37 14.81
2 No. 2 219,880,176.27 11.56
3 No. 3 203,532,193.76 10.70
4 No. 4 197,423,472.62 10.37
5 No. 5 102,429,341.33 5.38
Total 1,005,033,973.35 52.82
Notes of the other situation of the major customers
□ Applicable √ Inapplicable
List of the major suppliers of the Company
Unit: RMB Yuan
Total purchase to the top 5 suppliers 235,022,505.01
Ratio of the total purchase to the top 5 suppliers to the annual total purchase (%) 17.04
Information of the top 5 suppliers of the Company
Unit: RMB Yuan
Ratio to the annual purchase amount
No. Name of supplier Purchase amount
(%)
1 No. 1 70,559,519.80 5.12
2 No. 2 53,590,162.39 3.88
3 No. 3 43,550,758.84 3.16
4 No. 4 36,192,251.45 2.62
5 No. 5 31,129,812.53 2.26
Total 235,022,505.01 17.04
Notes of the other situation of the major suppliers: naught
3. Expenses
Unit: RMB Yuan
Items 2015 2014 YoY +/- (%) Notes of the significant changes
Business tax and Mainly due to the decrease of the rental income and the free
6,915,701.14 10,955,439.55 -36.87
surtaxes tax amount of the reporting period.
Selling expenses 88,673,552.41 76,745,444.65 15.54
Management
181,577,528.19 155,016,162.11 17.13
expenses
Mainly due to the depreciation of the Renminbi that led to the
Financial expenses -35,475,102.02 -14,038,393.49 -152.70 increase of the exchange earnings from the USD monetary
assets
Mainly due to the rental income failed to recover in time that
Asset impairment
15,910,353.70 9,398,046.22 69.29 led to the increase of the bad debts provision of the accounts
loss
receivable of the reporting period
Mainly due to the decrease of the amount of the forward
exchange contracts which expired and settled then transferred
Gains on fair value
-7,116,240.15 -22,466,359.85 -68.32 to the investment profits over the last period and the
changes
depreciation of the Renminbi as well as the losses from the
forward exchange contracts
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
4. R&D investment
√ Applicable □ Inapplicable
The development of the intelligent home appliances/high efficiency and energy saving home appliances/green and healthy home
appliances as well as the constantly upgrading promotion of the relevant new products and technology platform, which ensured the
core innovation capability of the Tsann Kuen home appliances career and maintained our market competitiveness for sustainable
development.
List of the R&D investment of the Company
Items 2015 2014 Varied ratio (%)
Number of the R&D personnel (person) 341.00 562.00 -39.32
Ratio to the R&D personnel (%) 7.60 12.36 -4.76
Investment amount of the R&D (RMB10,000’) 76,302,589.62 67,148,812.66 13.63
Ratio of the R&D investment to the operating income (%) 3.88 3.34 0.54
Amount of the capitalized R&D investment (RMB Yuan) 0.00 0.00 0.00
Ratio of the capitalized R&D investment to the R&D investment 0.00 0.00 0.00
Reason of remarkable changes over the last year of the ratio of the total R&D investment amount to the operating
income
□ Applicable √ Inapplicable
Reason of the greatly change of the ratio of the R&D investment capitalization and its reasonable explanation
□ Applicable √ Inapplicable
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
List of the patents number of the recent 2 years
√ Applicable □ Inapplicable
Accumulative gained
Items Applied Gained
up to the period-end
Patent for invention 118 30 644
Utility model 22 33 753
Appearance design 125 114 1323
During the reporting period, there was no any change of the core
List of the changes of the core technology team or the
technology team or the key technology personnel which had significant
key technology personnel of 2015
influences on the core competitiveness of the Company
Whether belongs to the high-tech enterprises Controlled subsidiary TsannKuen Zhangzhou is a certified hi-tech
recognized by the MOST enterprise.
5. Cash flow
Unit: RMB Yuan
Item 2015 2014 YoY +/- (%)
Subtotal of cash inflows from operating activities 2,255,425,701.17 2,295,718,941.22 -1.76
Subtotal of cash outflows from operating activities 2,171,987,110.33 2,250,702,642.24 -3.50
Net cash flows from operating activities 83,438,590.84 45,016,298.98 85.35
Subtotal of cash inflows from investing activities 1,507,187,686.64 1,409,485,013.03 6.93
Subtotal of cash outflows from investing activities 1,292,470,460.96 1,784,603,160.20 -27.58
Net cash flows from investing activities 214,717,225.68 -375,118,147.17 157.24
Subtotal of cash inflows from financing activities 583,727,183.61 877,682,228.00 -33.49
Subtotal of cash outflows from financing activities 700,902,924.31 910,257,882.50 -23.00
Net cash flows from financing activities -117,175,740.70 -32,575,654.50 -259.70
Net increase in cash and cash equivalents 205,214,611.79 -364,123,511.67 156.36
Notes of the major effects on the YoY significant changes occurred of the data above
√ Applicable □ Inapplicable
1. The net amount of the cash flow from operating activities of the reporting period had a YoY increase of 85.35%,Mainly because of
the decrease in cash outflows for replenishment of material stocks;
2. The net amount of the cash flow from investment activities of the reporting period had a YoY increase of 157.24%, which mainly
due to the variable differences of the amount of the restricted time deposits of the two periods;
3. The net amount of the cash flow from financing activities of the reporting period had a YoY decrease of 259.70%, which mainly
due to the decrease of the export financing borrowings and the borrowings from the controlling shareholders of the reporting period.
Notes to the reason of the significant differences between the net cash flow from the operating activities and the net profits of 2015 of
the Company during the reporting period
17
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
√ Applicable □ Inapplicable
The reason of the differences between the net cash flow from operating activities and the 2015 net profits of the Company mainly due
to the business tickets period of the suppliers was rather long.
III. Analysis of the non-core business
Unit: RMB Yuan
Ratio to the
Whether was
Items Amount total profits Notes of the causes
sustainability
amount (%)
The cause mainly was the delivered part of the
investment derivatives of RMB2.6886 million that
Investment profits 16,587,981.27 29.58 influenced the gains and losses and the entrusted and Yes
financing part of RMB13.8994 million that influenced
the gains and losses of the reporting period.
The cause mainly due to the assessed losses amount of
Variable profit and the part of the investment derivatives that failed to
-7,116,240.15 -12.69 Yes
loss of fair value deliver was of RMB7.1162 million of the reporting
period.
The cause mainly due to the withdrawn of the accounts
Assets impairment receivable and other bad debts provision of the other
15,910,353.70 28.37 Yes
losses accounts receivable, the inventory falling price reserves
and the fixed assets depreciation reserves
The cause mainly due to the profits from the disposal of
Non-operating
8,177,992.94 14.58 the fixed assets of the Company and the income from Yes
revenues
the governmental subsidies.
The cause mainly due to the losses from the disposal of
Non-operating costs 72,442.69 0.13 the fixed assets, scrapping and the inventory losses of Yes
the Company.
IV. List of the assets and liabilities
1. List of the significant changes of the assets form
Unit: RMB Yuan
As at 31 Dec. 2015 As at 31 Dec. 2014
Proportion
Items Explain any major change
change (%)
Proportion in Proportion in
Amount total assets Amount total assets
(%) (%)
Monetary
755,580,059.80 45.63 886,464,448.01 53.69 -8.06 N/A
funds
Accounts
219,609,269.02 13.26 247,336,334.86 14.98 -1.72 N/A
receivable
18
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
As at 31 Dec. 2015 As at 31 Dec. 2014
Proportion
Items Explain any major change
change (%)
Proportion in Proportion in
Amount total assets Amount total assets
(%) (%)
Increased of 36.73% over
the amount of the
year-begin, which mainly
Inventories 264,090,949.73 15.95 193,150,144.07 11.70 4.25 due to the increased
backup of the finished
products for satisfying the
not yet dispatched orders.
Investing real
46,185,216.68 2.79 51,731,414.90 3.13 -0.34 N/A
estate
Fixed assets 173,254,819.42 10.46 165,560,208.64 10.03 0.43 N/A
Construction
151,942.11 0.01 233,968.67 0.01 0.00 N/A
in progress
2. List of the significant changes of the liabilities items
Unit: RMB Yuan
2015 2014
Proportion
Items Explain any major change
Proportion in Proportion in change (%)
Amount total assets Amount total assets
(%) (%)
Mainly due to the repay of
Short-term
0.00 0.00 61,190,000.00 3.71 -3.71 the expired foreign
loans
currency loans
3. Assets and liabilities measured at fair value
√ Applicable □ Inapplicable
Unit: RMB Yuan
Cumulative Impairment
Gain/loss on fair
fair value provisions Purchased Sold amount in
Opening value change in Closing
Item change in the amount in the the reporting
amount the reporting amount
recorded into reporting reporting period period
period
equity period
Financial assets
1. Financial assets measured at fair
value and whose changes are
recorded into current gains and 0.00 0.00 0.00 0.00 0.00 0.00 0.00
losses (excluding derivative
financial assets)
2. Derivative financial assets 2,610,000.00 -2,610,000.00 0.00 0.00 0.00 623,274,454.01 0.00
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Cumulative Impairment
Gain/loss on fair
fair value provisions Purchased Sold amount in
Opening value change in Closing
Item change in the amount in the the reporting
amount the reporting amount
recorded into reporting reporting period period
period
equity period
3.Available-for-sale financial assets 40,000.00 0.00 0.00 0.00 0.00 0.00 40,000.00
Subtotal of financial assets 2,650,000.00 -2,610,000.00 0.00 0.00 0.00 623,274,454.01 40,000.00
Investing real estate 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Production biological assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total of the above 2,650,000.00 -2,610,000.00 0.00 0.00 0.00 623,274,454.01 40,000.00
Financial liabilities 3,956,259.85 4,506,240.15 0.00 0.00 278,161,900.00 0.00 8,462,500.00
V. List of the investment
1. Overall condition
√ Applicable □ Inapplicable
Unit: RMB Yuan
Investment amount of the same period of last
Investment amount of the reporting period Variation amount
year
322,475.00 39,988,000.00 -99.19
20
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
2. List of the significant equity investment acquired from the reporting period
□ Applicable √ Inapplicable
3. List of the significant non-equity investment has been executing during the reporting period
□ Applicable √ Inapplicable
4. Investment on the financial assets
(1) List of the securities investment
□ Applicable √ Inapplicable
(2) List of the derivative investment
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Proportion
Amount of of the
the closing
Actual
Related-party Type of Initial Opening Impairment Sold provision Closing investment
Beginning Ending gain/loss in
Operator Relation transaction derivative investment investment provision amount for investment amount in
date date reporting
or not investment amount amount (if any) impairment amount the
period
losses Company’s
closing net
assets (%)
Forward 1 Jan. 31 Dec.
Bank No No 90,143.64 61,298.55 27,816.19 62,327.45 27,816.19 49.70 -442.76
exchange 2015 2015
Total 90,143.64 61,298.55 27,816.19 62,327.45 27,816.19 49.70 -442.76
Capital source for derivative investment Self-owned funds
Lawsuit situations (if applicable) N/A
Disclosure date of the board announcement approving 2013-3-12
the wealth management entrustment
Disclosure date of the general meeting announcement 2013-5-18
approving the wealth management entrustment
21
2015 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 coming year.
(2) Staff requirements: Personnel taking part in the investment shall all fully understand the risks of derivative investment and strictly
Analysis on risks and control measures of derivative execute the business operation and risk management mechanisms for derivative investment.
products held in the reporting period (including but not
limited to market risk, liquidity risk, credit risk, (3) Operation standardization: Before making a derivative investment, the Company shall rationally equip itself with professional personnel
operation risk, law risk, etc.) 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.
(1) Gains on completed transaction amount of derivative products were of RMB2.6886 million, and loss from undelivered transaction was
Changes of market prices or fair values in the reporting of RMB7.1162 million in the reporting period, of which the gain rotation amount of the forward evaluation of the undelivered derivative
period of the invested derivatives. And the analysis on investment of last year was of RMB1.3463 million.
the fair value of the derivatives should include the (2) The former contracted bank provided monthly sheets of estimated exchange rates for the undue contracted forward exchanges on the last
specific use methods and the relevant assumptions and trading day of the month.
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 accounting There were no significant changes between the Company’s accounting policy and specific accounting principles of derivatives in the
principles of derivatives in the reporting period reporting period and those in the last reporting period.
compared to the previous reporting period
The Company has carried out a strict internal assessment for the financial derivative business and has established a corresponding
Specific opinion from independent directors on the supervision mechanism. We are of the opinion that the financial derivative business conducted by the Company is fairly necessary in its
Company’s derivatives investment and risk control routine operation and is in compliance with relevant laws and regulations, with the risks controllable.
22
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
5. Use of raised funds
□ Applicable √ Inapplicable
There was no such situation of the Company during the reporting period.
VI. Selling of the significant assets and the equities
1. List of the selling of the significant assets
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Whether Whether
Net profit Whether
Ratio of the Rela Relationship or not the or not the
contribute execute the plan
net profit ted- between the ownership creditor’s
d to the as planed and if
Impact contributed Pricin part transaction of the right and
Company hadn’t, should Disclo Disclo
Transaction Disposal Transactio to the by the asset g y party and the asset liabilities
Asset sold from the explain the sure sure
party date n price compan to the princi trans Company involved involved
period-be reason and the date index
y Company to ple actio (applicable for has been have been
gin to the measures
the total n or related-party fully fully
disposal adopted by the
profit (%) not transactions) transferre transferre
date Company
d d
Machinery Based Non 2015. www.
Xinwang 2015.1.31 2.50 2.45 2.45 0.07 Inapplicable Yes Yes Yes
devices on the -rela 10.24 cninfo
Nanyanghuan Other devices 2015.1.31 1.51 1.29 1.29 0.04 marke ted .com.c
Machinery t ente n
Jinyuan 2015.1.31 8.00 3.09 3.09 0.08 price, rpris
devices
Machinery and e
Li Qinghua 2015.1.31 9.00 3.20 3.20 0.09 settled
devices
Ruicheng Mould devices 2015.1.31 3.40 3.26 3.26 0.09 accord
Machinery ing to
Liao Sezhong 2015.1.31 12.80 2.04 2.04 0.06 the
devices
contra
Machinery
Zheng Wenhui 2015.1.31 1.30 0.54 0.54 0.01 ct
devices
signed
Shanghai
Mould devices 2015.1.31 115.00 22.72 22.72 0.62 by
Excellence
both
Machinery
Li Yiming 2015.3.31 10.50 3.72 3.72 0.10 parties
devices
Machinery
Xinwang 2015.3.31 0.25 0.25 0.25 0.01
devices
Electronic
Haichengxing 2015.3.31 0.80 0.78 0.78 0.02
devices
23
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Whether Whether
Net profit Whether
Ratio of the Rela Relationship or not the or not the
contribute execute the plan
net profit ted- between the ownership creditor’s
d to the as planed and if
Impact contributed Pricin part transaction of the right and
Company hadn’t, should Disclo Disclo
Transaction Disposal Transactio to the by the asset g y party and the asset liabilities
Asset sold from the explain the sure sure
party date n price compan to the princi trans Company involved involved
period-be reason and the date index
y Company to ple actio (applicable for has been have been
gin to the measures
the total n or related-party fully fully
disposal adopted by the
profit (%) not transactions) transferre transferre
date Company
d d
Baoxing Mould devices 2015.3.31 0.40 0.39 0.39 0.01
Hongyuan Mould devices 2015.3.31 13.93 13.34 13.34 0.36
Transportation
Gusong 2015.3.31 6.50 6.36 6.36 0.17
devices
Transportation
Yongkun 2015.4.30 3.00 2.94 2.94 0.08
devices
Kunsheng Mould devices 2015.4.30 1.25 1.23 1.23 0.03
Machinery
Hu Songchun 2015.4.30 23.60 -8.54 -8.54 -0.23
devices
Yixin Mould devices 2015.4.30 3.00 2.92 2.92 0.08
Liao Sezhong Other devices 2015.4.30 1.10 0.94 0.94 0.03
Hongyuan Mould devices 2015.4.30 2.62 2.54 2.54 0.07
Haicheng Electronic
2015.5.31 0.80 0.78 0.78 0.02
Xingxin devices
Hufeng
Machinery
Industry and 2015.5.31 0.50 0.48 0.48 0.01
devices
Trade
Machinery
Jinjing 2015.5.31 0.08 0.08 0.08 0.00
devices
Jinjing Other devices 2015.5.31 0.08 0.08 0.08 0.00
Yixin Mould devices 2015.5.31 1.50 1.45 1.45 0.04
Haikun Mould devices 2015.5.31 3.70 3.50 3.50 0.10
Nanyang
Mould devices 2015.5.31 1.28 1.24 1.24 0.03
University
Hongyuan Mould devices 2015.5.31 3.06 3.00 3.00 0.08
Hongyuan Other devices 2015.5.31 0.19 0.16 0.16 0.00
Dakun Mould devices 2015.6.30 6.35 6.20 6.20 0.17
Machinery
Suyuan 2015.6.30 5.10 -1.78 -1.78 -0.05
devices
Hongyuan Mould devices 2015.7.31 14.90 14.61 14.61 0.40
INDIA-HAVE
Mould devices 2015.8.31 59.92 26.41 26.41 0.72
LLS
Lianming Mould devices 2015.8.31 0.54 0.53 0.53 0.01
24
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Whether Whether
Net profit Whether
Ratio of the Rela Relationship or not the or not the
contribute execute the plan
net profit ted- between the ownership creditor’s
d to the as planed and if
Impact contributed Pricin part transaction of the right and
Company hadn’t, should Disclo Disclo
Transaction Disposal Transactio to the by the asset g y party and the asset liabilities
Asset sold from the explain the sure sure
party date n price compan to the princi trans Company involved involved
period-be reason and the date index
y Company to ple actio (applicable for has been have been
gin to the measures
the total n or related-party fully fully
disposal adopted by the
profit (%) not transactions) transferre transferre
date Company
d d
Liu Electronic
2015.8.31 0.50 0.49 0.49 0.01
Chengjiang devices
Hongyuan Mould devices 2015.8.31 3.37 3.30 3.30 0.09
Yixin Mould devices 2015.9.30 0.85 0.83 0.83 0.02
Hecheng Mould devices 2015.9.30 1.50 1.37 1.37 0.04
Hongyuan Mould devices 2015.9.30 8.00 7.82 7.82 0.21
Machinery
Xin Jiafeng 2015.9.30 3.05 2.99 2.99 0.08
devices
Leasehold
Xin Jiafeng 2015.9.30 0.75 0.39 0.39 0.01
improvement
Transportation
Wang Chunzhi 2015.9.30 3.25 -1.30 -1.30 -0.04
devices
Transportation
Shui Guohai 2015.9.30 2.40 2.35 2.35 0.06
devices
Yixin Mould devices 2015.10.31 0.41 0.40 0.40 0.01
Ruicheng Mould devices 2015.10.31 1.72 1.69 1.69 0.05
Low value
Ruicheng 2015.10.31 0.25 0.21 0.21 0.01 Inappl Inappl
consumables
icable icable
Hongyuan Mould devices 2015.10.31 9.71 9.32 9.32 0.25
Ruicheng Mould devices 2015.10.31 0.95 0.88 0.88 0.02
Yixin Mould devices 2015.12.31 3.65 3.55 3.55 0.10
Total 358.82 156.49 156.49 4.24
2. List of the selling of the significant equities
□ Applicable √ Inapplicable
25
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
VII. Analysis of the major controlling and stock-participating companies
List of the major subsidiaries and stock-participating companies
Unit: RMB Yuan
Register
Name Type Operating Operating
Main services ed Total assets Net assets Net profit
revenues profit
capital
Development and production of home appliances,
electronic products, light-industrial products, and
modern furniture and relative modules,
communication equipment, all kinds of lamps and
lighting devices such as mechanical and electrical
product. Processing and manufacturing non-ferrous
metal composite materials and new alloy material;
Tsann Kuen
Sales of the company products and semi-finished USD16
(Zhangzhou) Controlled 61,441,478.6
products; providing after-sales service and technical 0 2,027,280,180.93 1,315,098,007.35 1,882,801,210.22 61,897,115.50
Enterprise Co., subsidiary 2
services; contracting the company business scope of million
Ltd.
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
Production and sales of household appliances,
Tsann Kuen
electronics, light industrial products and modern office
China
Controlled supplies and relevant modules. All kinds of computers USD40
(Shanghai) 92,787,142.91 89,528,869.93 4,408,786.27 -8,000,498.79 -7,936,695.21
subsidiary and peripheral equipment and components, the million
Enterprise Co.,
development of computer software, IC packaging and
Ltd.
testing and sales of self-produced products
Production and sale of display/LCD
TV/chandelier/table lamps/LED lights/fluorescent
Pt. Star Subsidiary of
lamp/dehumidifier/mixer/juice/machine/mosquito USD25
Comgistic a controlled 117,164,318.11 94,561,620.88 75,313,080.64 -9,457,115.27 -9,217,941.00
killer/coffee pot / hair dryer/fan/humidifier/electric million
Indonesia subsidiary
oven, microwave oven, toaster/rice cooker/iron/deep
fryer
26
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Subsidiaries acquired or disposed during the reporting period:
√ Applicable □ Inapplicable
Effect on the overall production and business
Name of subsidiary Purpose for acquiring or disposing the subsidiary in the reporting period
performance
Tsann Kuen (Zhangzhou)
Coordinated the adjustment of the Company’s operating strategy to stop the operation business of the travel The effect on the net profit of the Company for the
Profession and Technology
subsidiaries. reporting period was of RMB-190.89
Institute
Controlled subsidiary TsannKuen (Zhangzhou) Enterprise Co., Ltd. possesses independent intellectual property
rights. In virtue of the R&D advantage of the target company Tsannkuen Edge Intelligence in Taiwan,
TsannKuen Zhangzhou would be able to carry out intelligence planning on its product lines, enhance its overall
The effect on the net profit of the Company for the
Orient Star Investments Limited R&D strength and reduce related-party transactions. It would acquire Tsannkuen Edge Intelligence by
reporting period was of RMB-8,157.38
increasing its investment in wholly-owned subsidiary Orient Star Investments Limited in Hong Kong.
Currently, the approval formalities with the competent authorities in Taiwan for the acquisition of the equity
interests of Edge Intelligence are being handled.
27
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
VIII. List of the structured main bodies controlled by the Company
□ Applicable √ Inapplicable
IX. Outlook of the Company’s future development
(I) Industry development trend and outlook of the market
As the wireless, IT and intelligent era comes, the trend of intelligent home appliances boosts intelligence, healthiness, fashion,
combination and culture and technology, cross-field integration of design, innovation and marketing modes and brand concepts, and
to count in the business development of e-commerce. The market that the Company will face in 2016 has the following features:
1. Profound change will happen to the global market structure of household appliances in 2016. Emerging markets such as Southeast
Asia, Middle East and North America will achieve a high-speed growth, with growth in some African countries expectedly reaching
over 15% and growth in Asia 12%. Mature markets like Europe and North America will also show a tendency of positive growth.
2. In terms of the main export markets, China exports more household appliances to developed countries than emerging economies
and the US is still the biggest market for China’s export of household appliances. In 2016, the global economy will continue to grow,
as well as the developed economies in America and Europe, which will provide bigger export markets for China. The export growth
potential brought by the new demand from emerging economies will become a hotspot for the growth of the small household
appliance market in the future.
3. China is still considered a strong market. The home appliance industry of China has entered an era featuring brand as the winning
trump. Different from the traditional home appliances, the small home appliances are still in a developing stage in terms of sale. As
the way of spending changes, more new products enter the market and old appliances are being renewed, domestic demand for small
home appliances will soar and the industry will enjoy good prospects. Actually, it is expected that the coming few years will be a
golden period for the development of the small home appliance market of China.
4. New urbanization gives us a fresh view about China’s city pattern and direction of future development. Growing, positive cities at
the second and third tiers with strong purchasing power are becoming high-end markets in an unprecedented speed. We believe the
“new first-tier markets” growing from the markets at the second and third tiers will make a strong engine for China ’s economic
growth in the future.
5. Due to the impact of e-commerce, the physical stores of household appliances are experiencing declining revenue with a falling
consumer demand. What’s more, considerately growing rent and labor cost put more pressure on these offline stores. Therefore,
e-commerce has become an important strategy for home appliance makers and sellers. Stimulated by the e-commerce strategy, online
stores have home appliances in more varieties to offer, with improving logistics and after-sales services. Meanwhile, with an
increasingly mature online shopping concept of consumers, the online market of home appliances expands quickly.
6. As more and more strong as well as large appliance brands and international brands are stepping into the small home appliance
industry, competition will become fiercer. The small home appliance business will step in the operation of professional, systematic
and branding, in order to fight for more market shares. Depending on its capital and R&D advantages, it will gradually eliminate a
batch of small brand enterprises which are comparatively feeble, lack of research and cost advantage and the market networks
management advantage. It is noteworthy that, under the dual demand stimulus of the improvement of the consumers ’ consciousness
of energy conservation and environmental protection as well as the purchasing of the living quality, the consumption of old for new
service of the future urban market will put more emphasis on the higher technical content and better quality high-end home
28
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
appliances, which will offer powerfully market power to the industrial upgrading of the electric utility of our nation.
7. Intelligent and green small household appliances will enter serialization and mass production. Considering the stricter international
environmental standards, China has launched a set of energy efficiency standards, strongly promoting the popularization of
energy-saving products through tough measures including price reform and taxation. Small household appliances with energy-saving
characteristic will become the mainstream in the sector sooner or later. And the Company also focuses its efforts on healthy,
energy-saving and green appliances.
(II) Strategies for future development
1. Strategy of domestic market development
Owning to the reforming of the strategy of domestic market development, the development main spindle of the future products will
aim at China, which is the world largest home appliances market as the springboard; and will spread out the brand planning and
marketing which focuses on the coffee, home helper and green energy saving. Strengthen the China brand strategy.
2. Intimate consumer relation management
To construct a sound platform of sales service and offer the structured solution plan to the customers standing in their position, to
make real gene modification; cost leadership is not the core strategy of an enterprise, is the foundation of an enterprise. The true core
strategy for an enterprise is to create more intimacy with customers, provide products that satisfy customers’ needs and build up
differentiate competitive edges.
3. Leading creatively and the deployment of green industry
Increase the design resources investment, and relocate and plan for the design team bases on the green industry, environmental
protection, energy saving, global innovation platform at the same time, so thus to insist in the design integration interdisciplinary and
the innovation of the marketing mode as well as the brand concept. Lead and drive the Company’s transformation and the
deployment of the products such as the new careers, new fields, home helpers and the digital lighting solutions with innovation and
originality.
4. Continue strengthen of the overseas manufacturing deployment and enhance of manufacturing enterprises competitiveness
Considering the rapid growth of emerging economies and the rise of the surrounding economies of Southeast Asia, the Company will,
with the advantageous costs of the overseas production base, accelerate the chain integration, promote our own brands with
knock-out products, set up overseas marketing organs, attend overseas fairs, place advertisements in target markets and speed up the
development of the Asian market in 2016.
(III) Future risk analysis
1. International
Influenced by the slowly recovery of the global economy, the enlarge of the exchange rate fluctuation, the enhance of the domestic
comprehensive cost, and with global inflation pressure that cannot be eased in the short run and more and more non-economic
obstacles from western countries in their trading with China, foreign trade of China will face, without doubt, a more complicated
environment and more serious conflicts in 2016.
For protecting the domestic newly-developing electrical home appliances manufacturing enterprises, parts of the countries began to
adopt trade protectionism and began to suppress the domestic electrical home appliances for the methods such as improve the import
tariff. The outburst of the global financial crisis led to the rise of the international trade protection, the aggravation of the tariff barrier
and the non-tariff barrier especially such as the technology standard, Intellectual property right protection and anti-dumping etc., as
well as the export of the domestic electrical home appliance encountered more and more threatens tariff an non-tariff barrier with the
more complicated international environment faced with the electrical home appliances.
29
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
As for the risks of the culture difference: the overseas expansion of the electrical home appliances desiderate the adjustment of
culture and products; the culture difference between China and other countries affect the difference process of the sales process of the
electrical home appliances at different degrees and different aspects, while the fusion of the culture and the adaptation of the products
are the two key elements of the success of the enterprises and to blend in the cultural environment of different regions as well as to
reduce the cost expenses brought by the unsteady elements as much as possible is the important content of the overseas expansion of
the enterprises.
2. Domestic
Y2016 will be the key year of the entirely promotion of the domestic great reform and adjustment and the year that the new normalcy
of domestic economy entirely step into the Crucial Period. Looking ahead to Y2016, the domestic and oversea environment is still of
anfractuosity as well as the economy development is still facing with many difficulties and challenges. However, the basic conditions
of the domestic economy development is still comparative good that will still provide favorable market environment and
development space for the electrical home appliances.
In recent years, the domestic per capita income grew steadily with the rise range of the price of commodities declined, and at the
same time influenced by the internal and external force factors such as the Chinese shopping spree, which stimulated the consuming
intention boosted constantly; as the constantly deepen of the domestic economy transformation, the future economy will realize
healthy and sustainable growth, which will depend on the consumption demands of each Chinese customers as the consumption
driving force of the domestic economy has been strengthening.
Through the path of expanding domestic demand and the adjustment of the overall economic system, the domestic competition will
become fiercer. As the development of the domestic production, the domestic home appliance is now facing the significant industrial
consolidation phrase, which could only win in the competition and become the industry integrator with powerful financial strength
and the ability to drive the domestic home appliance innovation enterprise. So the small home appliance enterprises are facing with
serious competition and challenge. Faced with the quick changes of the domestic environment, the Company will be close to the
customers’ requirements, to promote the brand image by taking the technology innovation as core, to build up self-own brand, and to
develop green, intelligent home appliances to increase the occupation portion of the domestic market.
3. Exchange rate fluctuation
The Company’s products were export-oriented, so the influence of the exchange rate fluctuation on the Company was rather big.
Facing with the negative influences of the appreciation of the RMB, the main methods are: to avoid the exchange risks by the
financial tools and to fully considerate the influences of the exchange risks when receiving an order, thus to transfer the exchange
risks.
4. Increase of the labor costs and the labor shortage
Influenced by the constantly rise of the labor cost, the Company reduced the employee turnover rate by improving the labor character
and perfecting the benefits, promoted the purchasing modularization as well as lean automation, and improved the per capita GDP to
deal with the labor shortage problem.
5. Environmental protection low-carbon
As the execution of the Environmental Protection Act, to prevent and remedy pollution and other public nuisance as well as to ensure
the environmental and public health become the development tendency that the production processes of the enterprises must active
deal with; the Company put the lean manufacturing into the core goal of the enterprises of this year, with the introduce of the new
environmental protection materials, the input of the automation and the promotion of the environmental protection manufacturing
that promoted the products of the Company developed orientated to the direction of environmental protection and the environment
protection work.
30
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
X. List of the received researches, visits and interviews
1. Particulars about researches, visits and interviews received in this reporting period
√ Applicable □ Inapplicable
Time of reception Way of reception Visitor type Index of the researches basic information
The operating situation of the Company and whether
30 Jan. 2015 Telephone communication Individual the Indonesia factory had stopped loss with no written
materials provided by the Company.
The operating situation of the Company and the
13 Mar. 2015 Telephone communication Individual relevant policies of Share B with no written materials
provided by the Company.
The operating situation of the Company and the
23 Mar. 2015 Telephone communication Individual relevant policies of Share B with no written materials
provided by the Company.。
。Investors: known of the reform situation of the
Share B and advised the Company to carry out the
reform. The Company replied: recently was focusing
on the cases about the market reform and under the
current laws, the feasibility of the assessment had not
made any practical progress. Investors: advised the
Company to enhance the position of the products and
to strive for the profits space as well as to enlarge the
automation investment for improving the whole
26 May 2015 Field research Individual competitiveness of the Company. The Company
replied: the Company has been always paying
attention on the R&D investment, including the
investment of the intelligent home appliances R&D
and invented the new products according to the
market demand as well as intensified and strictly
governed the order receiving profits in order to
enhance the profits space. And the Company recently
carried out part of the automation and will gradually
make improvement according to the service
efficiency of which in the future.
Inquired of the reform of the Share B and the basic
23 Sep. 2015 Telephone communication Individual situation as well as the intelligence R&D situation of
the Company.
Inquired of the reform of the Share B with no written
18 Dec. 2015 Telephone communication Individual
materials provided by the Company.
Inquired of the reform of the Share B and the
22 Dec. 2015 Telephone communication Individual operating situation with no written materials provided
by the Company.
Inquired of the reform of the Share B and the
25 Dec. 2015 Telephone communication Individual influences of the changes of the exchange rate on the
performances of the Company.
Reception times 8
Number of reception institutions 0
Number of reception person 8
Number of receipting other targets 0
Whether disclose, reveal or let out unpublished
N/A
significant information
31
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
2. Particulars about researches, visits and interviews received from the period-end to the disclosure date
√Applicable □ Inapplicable
Time of reception Way of reception Visitor type Index of the researches basic information
About B-share reform and transfer of
1 Feb. 2016 By phone Individual
equity interests in Tsann Kuen Shanghai
About B-share reform and transfer of
2 Feb. 2016 By phone Individual
equity interests in Tsann Kuen Shanghai
Reception times 2
Number of reception institutions 0
Number of reception person 2
Number of receipting other targets 0
Whether disclose, reveal or let out unpublished significant
No
information
32
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Section V. Significant Events
I. List of the profits distribution of the common shares and turning capital reserve into share
capital of the Company
List of the formulation, execution or adjustment of the profits distribution policies of the common shares, especially the cash
dividend policies
√ Applicable □ Inapplicable
For the details of the profits distribution of Y2014 of the Company, please refer to the Announcement on the 2014 Annual Equity
Distribution Execution disclosed on the Securities Times, Hong Kong Ta Kung Pao and www.cninfo.com.cn on 16 Jun. 2015, which
had completed execution according to the announcement aging.
Special explanation of cash dividend policy
Whether conformed with the regulations of the Articles of association or the requirements
Yes
of the resolutions of the shareholders’ meeting:
Whether the dividend standard and the proportion were definite and clear: Yes
Whether the relevant decision-making process and the system were complete: Yes
Whether the independent director acted dutifully and exerted the proper function: Yes
Whether the medium and small shareholders had the chances to fully express their
Yes
suggestions and appeals, of which their legal interest had gained fully protection:
Whether the conditions and the process met the regulations and was transparent of the
Yes
adjustment or altered of the cash dividend policy:
List of the dividend distribution proposal (preplan) of the common shares and the proposal (preplan) of turning capital reserve into
share capital of the Company of the recent 3 years
In 2013, the Company distributed a cash dividend of RMB1.4 (tax included) for every 10 shares held by its shareholders and there
was no turn from capital reserve to share capital. In 2014, the Company distributed a cash dividend of RMB1.5 (tax included) for
every 10 shares held by its shareholders and there was no turn from capital reserve to share capital. In 2015, the Company distributed
a cash dividend of RMB1(tax included) for every 10 shares held by its shareholders, and the estimated distributable profits of the
Company was of RMB18,539,168 with the retained profits of RMB61,512,298.55 transferred to the next year. There was no turn
from capital reserve to share capital of 2015.
Cash dividend distribution of the common shares of the Company of the recent 3 years (including the reporting period)
Unit: RMB Yuan
The ratio accounting in
Net profit belonging to
Amount of cash net profit which belongs Amount of the Ratio of the cash
shareholders of the listed
Dividend year dividend (including to shareholders of the cash dividend by dividend by other
company in consolidated
tax) listed company in other methods methods
statement of dividend year
consolidated statement
2015 18,539,168.00 36,782,299.50 50.40% 0.00 0.00%
2014 27,808,752.00 51,348,795.39 54.16% 0.00 0.00%
2013 25,954,835.20 47,069,386.29 55.14% 0.00 0.00%
The Company (including its subsidiaries) made profit in the reporting period and the profits distribution of the common shares held
by the shareholders of the Company (without subsidiaries) was positive, but it did not put forward a preplan for cash dividend
distribution of the common shares:
□ Applicable √ Inapplicable
33
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
II. Pre-plan for profit allocation and turning capital reserve into share capital for the
reporting period
√ Applicable □ Inapplicable
Bonus shares for every 10 shares (share) 0
Dividend for every 10 shares (RMB Yuan) (tax
1.00
included)
Turning capital reserve into share capital for every
0
10 shares (share)
Total shares as the basis for the allocation preplan 185,391,680
(share)
Total cash dividends (RMB Yuan) (tax included) 18,539,168.00
Distributable profit (RMB Yuan) 80,051,466.55
Percentage of the cash bonus of the total profits 100.00%
dividends
Cash dividend situation
If the development stage of the Company belongs to the mature period without any significant assets expenditure arrangement, when
executing the profits distribution, the ratio of the cash dividend to the profits distribution of the reporting period should at least reach
80%.
Details about the profit allocation or turning capital reserve into share capital
In 2015, the Company distributed a cash dividend of RMB1(tax included) for every 10 shares held by its shareholders , and the
estimated distributable profits of the Company was of RMB18,539,168 with the retained profits of RMB61,512,298.55 transferred to
the next year. There was no turn from capital reserve to share capital of 2015.
III. Performance of commitments
1. Commitments completed by the Company, the shareholders, the actual controllers, the purchasers, the
Directors, the Supervisors and the Senior Executives or the other related parties during the reporting
period and those hadn’t been completed execution up to the period-end
√ Applicable □ Inapplicable
Time of Period of
Commitmen Commitm
Commitment Contents making commitme Fulfillment
t maker ent type
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
Commitment on equity
incentive
Other commitments made
to minority shareholders FILLMAN Commitm Based on the confidence on the 28 Dec. 2012 Within one The Company’s stocks
INVESTME ent on continuous and stable development year since resumed trading on 31
NTS shareholdi of the Company, it committed to the date of Dec. 2012, but the
LIMITED ng increase the shareholding if the initial Company’s stock price
increase Company’s stock price lower than shareholdi hasn’t met the condition
HKD2.40 per share after the ng increase for shareholding
implementation of the shares increase since the date
contraction and trading resumption, of trading resumption,
and it would increase no more than FILLMAN Investment
2% shares 34 3.7078 million Limited hasn’t
shares) of the total shares issued by implemented the
the Company within one year since shareholding increase
the date of initial shareholding plan.
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Time of Period of
Commitmen Commitm
Commitment Contents making commitme Fulfillment
t maker ent type
commitment nt
shares is completed, if the stock
price hasn’t reached the target price,
it will perform relevant approval
procedures, and propose to CSRC
on continuous implementation of
shareholding increase by exemption
of offering.
The controlling
shareholder, EUPA
INDUSTRY
The Company had received the
CORPORATION
notification letter from the
LIMITED had not
controlling shareholder EUPA
decrease the
INDUSTRY CORPORATION
shareholding of the
LIMITED on 10 Jul. 2015: based
Company within the
on the response to the CSRC about
commitment period (10
maintaining the stability of the
Jul. 2015 – 9 Jan. 2016),
capital market and the legal
EUPA Commitm and on 21 Dec. 2015, it
interests of the investors as well as
INDUSTRY ent on used the self-owned
the confidence of the constantly and
CORPORA shareholdi 10 Jul. 2015 9 Jan. 2016 funds of HKD996,085
sustainable development in the
TION ng to increase the
future of the Company, EUPA
LIMITED decrease shareholding of 96,500
INDUSTRY CORPORATION
shares which was of
LIMITED committed to no more
0.05% to the total share
decrease the shareholding of the
capital of the Company.
Company within 6 months from
It had completed the
then on (10 Jul. 2015 – 9 Jan. 2016)
above commitments and
and to appropriately increase the
had disclosed the
shareholding within 6 months at the
announcement on the
right time.
shareholding increase of
the Company on 22
Dec. 2015.
Executed timely or not? Yes
2. Assets or projects existing profit forecast, which were still in the profit forecast period, the Company
made note and explain to the assets or project arrived at original profit forecast
□ Applicable √ Inapplicable
IV. Occupation of the Company’s capital by the controlling shareholder or its related parties
for non-operating purposes
No such cases in the reporting period.
V. Explanation by the Board of Directors, the Supervisory Committee and the Independent
Directors (if any) about the “non-standard audit report” issued by the CPAs firm for the
reporting period
□ Applicable √ Inapplicable
VI. Explanation of the changes of the accounting policy, the accounting estimates and the
accounting methods compared to the last financial report
□ Applicable √ Inapplicable
35
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
VII. Explain retrospective restatement due to correction of significant accounting errors in
the reporting period
□ Applicable √ Inapplicable
VIII. Explain change of the consolidation scope as compared with the financial reporting of
last year
In Feb. 2015, the controlled subsidiary of the Company Tsann Kuen (Zhangzhou) Enterprise Co., Ltd. written off its subsidiary Tsann
Kuen (Zhangzhou) Profession and Technology Institute. Since the date that completed the written-off, Tsann Kuen (Zhangzhou)
Profession and Technology Institute would be no longer included in the consolidated statement scope, while the income, expenses
and profits before the completion of the written-off included in the consolidated statement and the cash flow in the consolidated cash
flow statement.
In Apr. 2015, the controlled subsidiary of the Company Tsann Kuen (Zhangzhou) Enterprise Co., Ltd. purchased the 100% equities of
Orient Star Investments Limited held by Bosco Consultancy Limited. And the Company included Orient Star Investments Limited
into the consolidated scope of the financial report since the date when completed the purchase.
IX. Particulars about engagement and disengagement of CPAs firm
CPAs firm engaged at present
Name of domestic CPAs firm Ruihua Certified Public Accountants (LLP)
Remuneration for domestic CPAs firm for the
133
reporting period (RMB Ten Thousand Yuan)
Consecutive years of the audit services provided by
3
domestic CPAs firm
Name of domestic CPAs firm Pan Xinhua, Chen Lianwu
Reengage the CPAs firm at current period or not?
□ Yes √ No
Reengage the CPAs firm during auditing period or not?
□ Yes √ No
Particulars on engaging the audit firm for the internal control, financial adviser or sponsor
√ Applicable □ Inapplicable
In 2015, the Company engaged Ruihua Cerfied Public Accountants (LLP) as the internal audit institution with the total amount of the
internal audit expenses and the annual audit expenses of RMB1.33 million; and in 2015, the Company had not engaged any financial
adviser or sponsor.
X. Particulars about trading suspension and termination faced after the disclosure of annual
report
□ Applicable √ Inapplicable
XI. Bankruptcy and reorganization
□Applicable √ Inapplicable
36
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
There was no such situation of the Company during the reporting period.
XII. Significant lawsuit or arbitration
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Situation
Lawsui
of
t
Whether Trial results and execution
amount
Basic situation of form into Process of lawsuit influences of of Disclosure Disclosure
(RMB
lawsuit (arbitration) estimated (arbitration) lawsuit judgment date index
Ten
liabilities (arbitration) of lawsuit
Thousa
(arbitratio
nd)
n)
The progress events of
the appeal between the Fujian High People’s
Company’s controlling Court decided to hold a http://www.cni
430.49 No Not yet disclosed N/A 22 Feb. 2014
subsidiary—Zhangzhou hearing on 26 Mar. nfo.com.cn/
Tsann Kuen and Xinda 2014.
Motor
Zhangzhou Tsann Kuen
had applied for the
withdrawal to the
Events of the Company’s
Zhangzhou Intermediate
controlling
People’s Court on 9 Sep. Lawsuit http://www.cni
subsidiary—Zhangzhou 377.04 No N/A 23 Sep. 2015
2015 and the latter made withdrawn nfo.com.cn/
Tsann Kuen separately
a verdict to approve
sued Xinda Motor
Zhangzhou Tsann Kuen
withdrawn the
prosecute.
XIII. Punishment and rectification
□ Applicable √ Inapplicable
No such cases in the reporting period.
XIV. Honesty situations of the Company, its controlling shareholders and actual controller
□ Applicable √ Inapplicable
XV. List of the execution of the stock incentive plan, ESOP, or other Staff incentives
□ Applicable √ Inapplicable
No such cases in the reporting period.
37
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
XVI. Significant related-party transactions
1. Related-party transactions relevant to routine operation
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Type of
Pricing Tran Proportion Settlement
the Content of Whether
principle of sacti in same Approved method of Similar
related-pa the Transactio exceed the Disclosure Disclosure
Related party Relationship the on kind of transaction the market
rty related-party n amount approved date index
related-party pric transactio quota related-party price
transactio transaction quota
transaction e ns (%) transaction
n
Company
directly
Purchase of
controlled by Purchase
Thermaster raw parts
actual of
Electronic and 3,940.34 2.86 4,000.00 No 13 Mar. 2015
controller and commodit
(Xiamen) Ltd. mechanical
their close ies
parts
family
members
Purchase of
Purchase Based on
Star Comgistic Ultimate raw parts
of the market
Trading Co., controlling and 384.61 0.28 280.00 Yes Settled 13 Mar. 2015
commodit price and
Ltd. company mechanical according to
ies the both www.cnin
parts the contracts
parties abide N/A N/A fo.com.cn
Purchase of signed by
TSANN KUEN Purchase to the
Same ultimate raw parts the both
PIONEER of principles
controlling and 187.39 0.14 225.14 No parties 5 Dec. 2015
INTELLIGEN commodit fair and
company mechanical
CE CO., LTD ies reasonable
parts
Sales of
TSANN KUEN Same ultimate Sales of
parts and
JAPAN CO., controlling commodit 316.97 0.17 845.00 No 13 Mar. 2015
finished
LTD company ies
products
STAR Sales of
Ultimate Sales of
COMGISTIC parts and
controlling commodit 1,523.95 0.80 1,945.00 No 13 Mar. 2015
CAPITAL CO., finished
company ies
LTD. products
Total 6,353.26 7,295.14
Details of large amount of sales returns N/A
38
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
As for the prediction on the total amount of routine The amount of the above related transactions was disclosed on the estimated amount on the Estimated Announcement of the 2015 Routine
related-party transactions to be occurred in the reporting period Related Transaction and the Announcement of the 2015 Newly Increase Estimated Routine Transaction on the Securities Times, Hong
by relevant types, the actual performance in the reporting Kong Ta Kung Pao and www.cninfo.com.cn on 13 Mar. 2015 and 5 Dec. 2015. Owing to the special requirements of the products parts,
period the estimated amount of the commodities bought from the Star Comgistic Trading Co., Ltd. exceeded of RMB1.0461 million.
Reason for significant difference between the transaction price
N/A
and the market price
2. Related-party transactions regarding purchase and sales of assets
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Book
Content of Pricing Assessed Settlement
Type of the value of Market Gains and
the principle of the value of Transfer method of Disclosure Disclosure
Related party Relationship related-party the fair losses of
related-party related-party the assets price related date index
transaction assets value transactions
transaction transaction transfer transactions
transfer
Company
directly
Thermaster
controlled by Purchased of Purchased of
Electronic 0.51 0.51 0.00
actual controller fixed assets fixed assets
(Xiamen) Ltd.
and their close Based on the
family members market price,
Settled
the two parties
Xiamen Tsann Controlled by the according to
Purchased of Purchased of set the price
Kuen Trading same actual 244.82 N/A N/A 244.82 the contract 0.00
fixed assets fixed assets abided by the Inapplicable Inapplicable
Co., Ltd. controller signed by
fair and
both parties
Company reasonable
directly principles
PT. ShenMin controlled by Purchase of Purchase of
67.92 83.40 0.00
Sukabumi actual controller land land
and their close
family members
Reason of the large difference between the transfer price and the
N/A
book value or the assessed value
Influences on the operation result and financial conditions N/A
3. Related-party transactions common external investment
□ Applicable √ Inapplicable
39
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
4. Credits and liabilities with related parties
√ Applicable □ Inapplicable
Whether was any contract related to the non-operating credits and liabilities with related parties?
□ Yes √ No
5. Other significant related-party transactions
√ Applicable □ Inapplicable
Unit: RMB Ten Thousand Yuan
Type of Pricing Ratio to
the Contents of principle of the Settlement
Index to
related-pa the the Transact Transactio amount of method of the Market Date of
Related transaction party Relationship the
rty related-party related-part ion price n amount the similar related-party price disclosure
disclosed
transactio transaction y transactio transaction
n transaction ns (%)
Accepts Expenses of
TSANN KUEN PIONEER Same ultimate
the labor purchasing 7.07 29.82 5 Dec. 2015
INTELLIGENCE CO., LTD controlling company
services agencies
Accepts Expenses of
Star Comgistic Trading Co., Ultimate controlling
the labor purchasing Based on 16.63 70.18 13 Mar. 2015
Ltd. company
services agencies the market
price, the Settled
Accepts Expenses of two parties according to
TSANN KUEN PIONEER Same ultimate www.cnin
the labor outsourcing set the price N/A 92.45 65.17 the contract N/A 5 Dec. 2015
INTELLIGENCE CO., LTD controlling company fo.com.cn
services design abided by signed by
the fair and both parties
WU WHA MA Stock-participating reasonable
RESTAURANT company of the Provides principles
Workshop rent 10.36 0.19 13 Mar. 2015
MANAGEMENT CO., ultimate controlling the service
LTD. IN XIAMEN company
Under the control of
Xiamen Tsann Kuen Provides
the same ultimate Workshop rent 85.00 1.53 13 Mar. 2015
Trading Co., Ltd. the service
controlling company
Total 211.51
Details of large amount of sales returns N/A
40
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
The amount of the above related transactions was disclosed on the estimated amount on the Estimated
As for the prediction on the total amount of routine related-party transactions to be Announcement of the 2015 Routine Related Transaction and the Announcement of the 2015 Newly Increase
Estimated Routine Transaction on the Securities Times, Hong Kong Ta Kung Pao and www.cninfo.com.cn on 13
occurred in the reporting period by relevant types, the actual performance in the
Mar. 2015 and 5 Dec. 2015. Owning to the increase of the purchase amount from Star Comgistic Trading Co.,
reporting period Ltd., the Company paid the amount exceeded of RMB26,300 of purchasing the agencies and the estimated amount
to Star Comgistic Trading Co., Ltd.
Reason for significant difference between the transaction price and the market price N/A
XVII. Significant contracts and their execution
1. Trusteeship, contracting and leasing
(1) Trusteeship
□ Applicable √ Inapplicable
(2) Contract
□ Applicable √ Inapplicable
(3) Lease
Notes:
The Proposal on Change of Property Leasing Agreement & Related-party Transaction was reviewed and approved at the Second Special Meeting 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 and the Announcement on Resolutions Made at the Second Special Meeting of the Board of Directors for 2012 disclosed on Securities Times, Hong Kong Ta Kung
Pao and http://www.cninfo.com.cn dated 3 Jul. 2015 as well as the 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 dated 25 Jul. 2012.
The proposal on Lease of Property was received and approved at the First Meeting 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 Meeting of the Board of Directors for 2013 disclosed on Securities Times, Hong Kong Ta Kung Pao and
http://www.cninfo.com.cn dated 28 Jun. 2013.
41
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
The lease whose profits reaching more than 10% of the total profits of the Company in the reporting period?
√ Applicable □ Inapplicable
Unit: RMB Thousand Yuan
Whether
The amount of Related
Beginning Termination Recognition basis of Influence to related
Lessor Name of leasee Lease assets leased assets Income transaction
date date lease income the Company transactio
involved or not
n
TSANN KUEN
Tianyuan (Xiamen) According to the
(CHINA) Houses 30 Sept.
Assets management 1,837.18 1 Jul. 2013 722.31 contract signed by 19.64% No Naught
ENTERPRISE CO., and land 2018
Co., Ltd. both parties
LTD.
2. Significant guarantees
□ Applicable √ Inapplicable
No such cases in the reporting period.
3. Cash assets management entrustment
(1) Wealth management entrustment
√ Applicable □ Inapplicable
Unit: RMB Thousand Yuan
Amount of Actual
Related Remunerati Principal amount Amount
actual profits withdraw of
transacti on actually received withdrawn Estimate
Name of the trustee Type Amount Initial date Ended Date or losses in profits or losses
on or determinatio in reporting impairment profit
reporting in reporting
not n method period provision
period period
Xiamen Break-even Recovery of
Naught floating proceeds 10,000.00 2015-1-19 2015-4-22 5.20% 10,000.00 Naught 134.33 134.33
International Bank sums due
Xiamen Break-even Recovery of
Naught floating proceeds 15,000.00 2015-1-19 2015-12-30 5.00% 15,000.00 Naught 718.75 718.75
International Bank sums due
Shenzhen Ping An Break-even Recovery of
Naught floating proceeds 8,000.00 2015-1-20 2015-12-17 7.40% 8,000.00 Naught 544.31 536.85
Bank sums due
Shenzhen Ping An Break-even
Naught floating proceeds 8,000.00 2015-12-24 2016-12-23 6.00% 0.00 Naught 480.00 0.00 immaturity
Bank
Total 41,000.00 33,000.00 1,877.39 1,389.93
42
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Amount of Actual
Related Remunerati Principal amount Amount
actual profits withdraw of
transacti on actually received withdrawn Estimate
Name of the trustee Type Amount Initial date Ended Date or losses in profits or losses
on or determinatio in reporting impairment profit
reporting in reporting
not n method period provision
period period
Capital resources Self-owned fund
Cumulative amount of principal and earnings
0.00
maturity that fail to recover
Cases involving lawsuit Naught
Disclosure date of announcement on wealth
management entrustment reviewed and approved by 2015-3-13
the Board of Directors
Disclosure date of announcement on wealth
management entrustment reviewed and approved by 2015-5-23
the Board of Shareholders
Whether there is wealth management entrustment
Considered through market interest rates and risk circumstances in the future
plan in future or not?
(2) Entrustment loans
□ Applicable √ Inapplicable
4 Other significant contracts
□ Applicable √ Inapplicable
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
XVIII. Other significant events
√ Applicable □ Inapplicable
The Company held First Special Meeting of the Board of Directors of 2016 on 27 Jan. 2016, the meeting reviewed and approved
the Proposal on Equity Transfer of Controlling Subsidiary TSANN KUEN (Shanghai); the Company and its controlling subsidiary
TsannKuen (Zhangzhou) and controlling subsidiary TSANN KUEN (Shanghai) considering the integration of operation, business,
and investment structure, the Company transfer all share equities of TSANN KUEN (Shanghai) (62.5%) equal to RMB0.13 billion to
its controlling subsidiary TsannKuen (Zhangzhou). After the completion of the transfer, the Company's scope of consolidated
financial statements did not change, however, the Company's shareholding proportion of TSANN KUEN (Shanghai) was changed
from 62.50% to 46.88%.
XIX. Significant events of subsidiaries
√ Applicable □ Inapplicable
1. The Company considered and judged as well as in virtue of the R&D advantages enjoyed in Taiwan of the related party Tsann
Kuen Xianrui Intelligence Co., Ltd. (refer to as “Tsann Kuen Xianrui Intelligence” for short) for further enhance the overall R&D
ability of the Company and at the same integrated and focused on the medium and long-term development of strategic management
of the Company to form the R&D resources complementary synergy of both sides of the Taiwan Straits for facing with the rapid
change of the household appliances industry, enhancing the household appliances intelligent upgrade management and reducing the
possible related transactions in the future. Based on which, the controlling subsidiary of the Company, Zhangzhou Tsann Kuen had
set up a wholly-owned subsidiary in Hong Kong, which purchased the whole equity of “Tsann Kuen Xianrui Intelligence”. For the
specific contents, please refer to the Announcement on the Controlling Subsidiary of the Company Zhangzhou Tsann Kuen Invested
on Its Wholly-owned Subsidiary which Purchased the Equity of Tsann Kuen Xianrui Intelligence and the Related Transactions as
well as the Correcting Announcement on the Controlling Subsidiary of the Company Zhangzhou Tsann Kuen Invested on Its
Wholly-owned Subsidiary which Purchased the Equity of Tsann Kuen Xianrui Intelligence and the Related Transactions
simultaneously disclosed on Securities Times, Hong Kong Ta Kung Pao and www.cninfo.com.cn. on 25 Apr. 2015 and 28 Apr. 2015.
(Announcement No. respectively: 2015-014/2015-016).
2. The wholly-owned subsidiary in Hong Kong invested by the Company, “ORIENT STAR INVESTMENTS LIMITED” had
completed business registration formalities and as for the details, please refer to the Announcement on the Wholly-owned Subsidiary
in Hong Kong of Zhangzhou Tsann Kuen, the Controlling Subsidiary of the Company Completed the Business Registration
Formalities (Announcement No. 2015-019) simultaneously disclosed on Securities Times, Hong Kong Ta Kung Pao and
www.cninfo.com.cn on 21 May 2015. Recently the Company is going through the approval formalities of purchasing “Tsannkuen
Edge Intelligence” at Taiwan authorities.
XX. Social responsibilities
□ Applicable √ Inapplicable
XXI. Corporation bonds
Whether existing corporation bonds public issued and listed in Stock Exchange and maturity or maturity but not fully paid on the
approval report date of annual report
No
44
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
Section VI. Change in Shares & Shareholders
I. Changes in shares
I. Changes in shares
Unit: share
Before the change Increase/decrease (+/-) After the change
Newly Capitalization
Bonus
Amount Proportion issue of public Other Subtotal Amount Proportion
shares
share reserves
I. Restricted shares 0 0.00% 0 0 0 0 0 0 0.00%
II. Shares not subject to
185,391,680 100.00% 0 0 0 0 0 185,391,680 100.00%
trading moratorium
1.Domestically listed foreign
185,391,680 100.00% 0 0 0 0 0 185,391,680 100.00%
shares
III. Total shares 185,391,680 100.00% 0 0 0 0 0 185,391,680 100.00%
Reason for the change in shares
□ Applicable √ Inapplicable
Approval of the change in shares
□ Applicable √ Inapplicable
Reason for the change in shares
□ Applicable √ Inapplicable
Effects of the change in shares on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the
Company and other financial indexes over the last year and last period
□ Applicable √ Inapplicable
Other contents that the Company considered necessary or were required by the securities regulatory authorities to disclose
□ Applicable √ Inapplicable
2. Changes in restricted shares
□ Applicable √ Inapplicable
II. Issuance and listing of securities
1. Issuance of securities (excluding preferred stock) in reporting period
□ Applicable √ Inapplicable
2. Explanation on changes in share capital & the structure of shareholders, the structure of assets and liabilities
□ Applicable √ Inapplicable
3. Existent shares held by internal staffs of the Company
□ Applicable √ Inapplicable
45
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
III. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholding
Unit: share
Total number of
Total number of
Total number of preferred stockholder
shareholders on
preferred with vote right
Total number of shareholders the 30th trading
17,702 17,817 stockholder 0 restored on the 30th 0
at the reporting period day before the
with vote right trading day before the
disclosure date of
restored disclosure date of the
the annual report
annual report
Shareholding of shareholders holding more than 5% shares
Increase and Pledged or frozen
Number of Number of Number of
decrease of shares
Holding shareholding shares held shares held not
Nature of shares
Name of shareholder percentage at the end of subject to subject to
shareholders during Status of Amou
(%) the reporting trading trading
reporting shares nt
period moratorium moratorium
period
FORDCHEE Overseas
29.10% 53,940,530 Unchanged 53,940,530 Naught 0
DEVELOPMENT LIMITED corporation
EUPA INDUSTRY Overseas
13.09% 24,268,840 - 1,364,878 24,268,840 Naught 0
CORPORATION LIMITED corporation
GUOTAI JUNAN
Overseas New
SECURITIES(HONGKONG 6.21% 11,509,505 11,509,505 Naught 0
corporation increase
) LIMITED
FILLMAN INVESTMENTS Overseas
2.49% 4,621,596 Unchanged 4,621,596 Naught 0
LIMITED corporation
Oversea
WU CHI LI 1.06% 1,968,000 1,968,000 Naught 0
individual
Domestic
CHEN YONGQUAN 1.02% 1,888,819 220,072 1,888,819 Naught 0
individual
Oversea
CHEN YONGQING 0.77% 1,436,149 454,551 1,436,149 Naught 0
individual
Domestic New
GU KUNYI 0.70% 1,300,862 1,300,862 Naught 0
individual increase
Oversea
CHEN LIJUAN 0.69% 1,287,817 275,026 1,287,817 Naught 0
individual
Domestic
XIE QINGJUN 0.60% 1,112,276 6,776 1,112,276 Naught 0
individual
The first, the second and the fourth shareholders are the Company’s corporate controlling
Explanation on relationship shareholders. It is unknown whether the other shareholders of tradable shares are related parties
associated
or/and persons or acting-in-concert parties as prescribed in the Administrative Methods for Disclosure of the
Shareholding Changes of the Listed Company’s Shareholders.
Particulars about shares held by top 10 shareholders not subject to trading moratorium
Number of shares held not subject to Type of share
Name of shareholder trading moratorium at the end of the
Type of share Amount
period
Domestically listed
FORDCHEE DEVELOPMENT LIMITED 53,940,530 53,940,530
foreign shares
Domestically listed
EUPA INDUSTRY CORPORATION LIMITED 24,268,840 24,268,840
foreign shares
GUOTAI JUNAN SECURITIES(HONGKONG) Domestically listed
11,509,505 11,509,505
LIMITED foreign shares
Domestically listed
FILLMAN INVESTMENTS LIMITED 4,621,596 4,621,596
foreign shares
Domestically listed
WU CHI LI 1,968,000 1,968,000
foreign shares
Domestically listed
CHEN YONGQUAN 1,888,819 1,888,819
foreign shares
Domestically listed
CHEN YONGQING 1,436,149 1,436,149
foreign shares
GU KUNYI 1,300,862 Domestically listed 1,300,862
46
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
foreign shares
Domestically listed
CHEN LIJUAN 1,287,817 1,287,817
foreign shares
Domestically listed
XIE QINGJUN 1,112,276 1,112,276
foreign shares
Explanation on associated relationship among the
top ten shareholders of tradable share not subject The first, the second and the fourth shareholders are the Company’s corporate controlling
to trading moratorium, as well as among the top shareholders. It is unknown whether the other shareholders of tradable shares are related
ten shareholders of tradable share not subject to parties or acting-in-concert parties as prescribed in the Administrative Methods for
trading moratorium and top ten shareholders, or Disclosure of the Shareholding Changes of the Listed Company ’s Shareholders.
explanation on acting-in-concert
Whether the shareholders of a company conducted the transaction of repurchase under the agreement during the reporting period
□ Yes √ No
Whether the shareholders of a company conducted the transaction of repurchase under the agreement during the reporting period
2. Particulars about the controlling shareholder
Nature of controlling shareholder: foreign investment holding
Type of controlling shareholder: legal person
Name of controlling Legal representative /
Date of establishment Organization code Business scope
shareholder company principal
Fordchee Development
Chen Yanjun 3 Jan. 1990 14676920-000-01-16-A Investment
Limited
EUPA Industry Corporation
Chen Yanjun 21 Jul. 1989 12959659-000-07-15-0 Investment
Limited
Fillman Investments Limited Chen Yanjun 21 Jul. 1992 16269694-000-07-15-4 Investment
Change of the controlling shareholder during the reporting period
□ Applicable √ Inapplicable
The controlling shareholder did not change during the reporting period
3. Particulars about actual controller
Nature of actual controller: oversea nature person
Type of actual controller: nature person
Whether gain the right of residence in other countries or
Name of the actual controller Nationality
regions or not
Wu Cankun Taiwan, China No
Occupation and position Promoter of TSANN KUEN Group in China and Taiwan
Actual controller of Tsann Kuen (Taiwan) Enterprise Co., Ltd. STAR COMGISTIC
Particulars on his controlling listed
CAPITAL (Taiwan) CO., LTD. and Star International Travel Service (Taiwan) Co.,
companies over the past ten years
Ltd.
Change of the actual controller during the reporting period
□ Applicable √ Inapplicable
The actual controller did not change during the reporting period
47
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD.
The ownership and controlling relationship between the actual controller of the Company and the Company is detailed as follows:
HU Wu Tsai Tsai Other
Tsai
CHUN Tsann Yuan Yuan sharehold
Shuhui
MEI Kuen Song Yuan ers
16.25%
21.25% 15.76% 28.75% 12.50% 5.49%
Tsann Kuen Investment
Wu Tsann Kuen Thai Shu Hui Other Shareholders
Co., Ltd.
4.16% 5.11% 44.40% 46.33%
STAR COMGISTIC
CAPITAL
CO.,LTD.
100.0%
SINO Global
Development
100.0% 93.90% 100.0%
EUPA Industry FORDCHEE FILLMAN Investment
Corporation Limited Development Limited Limited
29.10%
2.49%
13.09%
Tsann Kuen (China)
Enterprise Co., Ltd.
The actual controller controls the Company via trust or other ways of asset management
□ Applicable √ Inapplicable
4. Particulars about other corporate shareholders with shareholding proportion over 10%
□ Applicable √ Inapplicable
5. Particulars about restriction of reducing holding-shares of controlling shareholders, actual controller,
restructuring parties and other commitment entities
□ Applicable √ Inapplicable
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Section VII. Preferred stock
□ Applicable √ Inapplicable
There was no preferred stock during reporting period.
Section VIII. Directors, Supervisors, Senior Management Staff &
Employees
I. Changes in shareholding of directors, supervisors and senior management staff
□ Applicable √ Inapplicable
II. Particulars about changes of Directors, Supervisors and Senior Executives
□ Applicable √ Inapplicable
III. Resumes of important personnel
Main working experience of current directors, supervisors and senior management staff
Name Position Working experience and the situation of the jobs or part-time jobs in other units except for the shareholders ’
units
Pan Zhirong Chairman of the 2014.05.20- so far TSANN KUEN (CHINA) ENTERPRISE CO., Chairman of the Board
Board 2010.07.26-2014.5.20 LTD. GM of Director
2014.05.28- so far TSANN KUEN (CHINA) ENTERPRISE CO., Chairman of the Board
2010.07.07-so far LTD. Managing Director
2015.01.21-so far TsannKuen (Zhangzhou) Enterprise Co., Ltd. Director
2015.02.25-so far TsannKuen (Zhangzhou) Enterprise Co., Ltd. Chairman of the Board
TsannKuen (Shanghai) Enterprise Co., Ltd.
Tsann Kuen Xianrui Intelligence (Taiwan) Co.,
Ltd.
Zhuang Xing Director 2008.05.24-so far TSANN KUEN (CHINA) ENTERPRISE CO., Director
2008.04.25-2014.05.28 LTD. Director
2011.01.03-2015.11.30 TsannKuen (Zhangzhou) Enterprise Co., Ltd. Director
2010.12.24-so far Tsann Kuen Enterprise Co., Ltd.(Taiwan) Director
2011.01.31-2012.03.08 International Travel Co., Ltd.(Taiwan) Chairman of the Board
International Travel Co., Ltd.(Taiwan)
Chen Yanjun Director 2008.05.24-so far TSANN KUEN (CHINA) ENTERPRISE CO., Director
2012.04.13-2015.11.30 LTD. Director
2015.01.21-so far Tsann Kuen Enterprise Co., Ltd.(Taiwan) Director
2015.02.25-so far TsannKuen (Shanghai) Enterprise Co., Ltd. Director
2008.04.25-2014.05.28 Tsann Kuen Xianrui Intelligence (Taiwan) Co., Director
2013.02.20-2015.12.25 Ltd. Chairman of the Board
TsannKuen (Zhangzhou) Enterprise Co., Ltd.
International Travel Co., Ltd.(Taiwan)
Tan Zichang Managing 2014.05.20- so far TSANN KUEN (CHINA) ENTERPRISE CO., Managing Director
Director 2010.07.26-so far LTD. Deputy GM of R&D
2015.02.25-so far TsannKuen (Zhangzhou) Enterprise Co., Ltd. Director
2010.09.01-2013.02.28 Tsann Kuen Xianrui Intelligence (Taiwan) Co., Vice GM
Ltd.
Lianying Technology Co., Ltd (Taiwan)
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Name Position Working experience and the situation of the jobs or part-time jobs in other units except for the shareholders ’
units
Tu Liandong Independent 2003.05-so far Xiamen Ganeng Investment Consulting Co., CFO
Director 2011.05.21-so far Ltd. Independent director
2013.09.11-so far TSANN KUEN (CHINA) ENTERPRISE CO., Independent director
2014.03.17-so far LTD. Independent director
XIAMENANNECO., LTD.
Xiamen 35.com Technology Co.,Ltd
Bai Independent 2009.01.01-so far Fujian TENET& PARTNERS Law Office Partner, Executive Director
Shaoxiang Director 2014.05.20-so far TSANN KUEN (CHINA) ENTERPRISE CO., Independent director
LTD.
Tang Jinmu Independent 2002.09-so far General secretary of Xiamen Association of Secretary general
Director 2014.05.20-so far Certified Public Accountants Independent director
2015.01.15-so far TSANN KUEN (CHINA) ENTERPRISE CO., Independent director
LTD.
Xingye Technology Co., Ltd.
Luo Supervisory 2011.05.21-so far TSANN KUEN (CHINA) ENTERPRISE CO., Chairman of the Supervisor
Qingxing Board Chairman 2015.01.21-so far LTD. Chairman of the Board
2012.09.18-so far TsannKuen (Shanghai) Enterprise Co., Ltd. Vice GM
2011.04.24- 2012.9.17 TsannKuen (Zhangzhou) Enterprise Co., Ltd. Vice GM
2003.01.07-2011.04.23 Xiamen Shengming Electronics Co., Ltd. Secretary of the board
TSANN KUEN (CHINA) ENTERPRISE CO.,
LTD.
Yang Supervisor 2012.07.24-so far TSANN KUEN (CHINA) ENTERPRISE CO., Supervisor
Yongquan 2009.12.04-so far LTD. Vice GM of Account
2015.01.21-so far Tsann Kuen Enterprise Co., Ltd.(Taiwan) Department
TsannKuen (Shanghai) Enterprise Co., Ltd. Director
Yang Supervisor 2012.07.24-so far TSANN KUEN (CHINA) ENTERPRISE CO., Staff representative supervisor
Yusheng 2008.04-so far LTD. Production and
TSANN KUEN (CHINA) ENTERPRISE CO., marketing/Senior assistant
LTD. manager of information center
Sun Meimei Secretary of the 2011.04-so far TSANN KUEN (CHINA) ENTERPRISE CO., Chairman Secretary
Board of 2005.07-2011.04 LTD. Representative of Securities
Directors TSANN KUEN (CHINA) ENTERPRISE CO.,
LTD.
Wu Yanru Financial 2014.10.24-so far TSANN KUEN (CHINA) ENTERPRISE CO., Financial principal
principal 2013.12.01-so far LTD. Manager of accounting
2012.12-2013.05 TsannKuen (Zhangzhou) Enterprise Co., Ltd. department
2008.06-2012.10 Asia Cement Corporation (ACC) Accounting Officer
Chunghwa Picture Tubes LTD. Financial manager
Post-holding in shareholder units
√ Applicable □ Inapplicable
Name of the person Receives payment
Position in the Beginning date Ending date of
holding any post in any Name of the shareholder unit from the
shareholder unit of office term office term
shareholder unit shareholder unit?
International Travel Co.,
Zhuang Xing Director 1 Nov. 2009 No
Ltd.(Taiwan)
International Travel Co.,
Chen Yanjun GM 5 Mar. 2010 No
Ltd.(Taiwan)
Fordchee Development Limited
Chen Yanjun Director 26 Feb. 2009 No
(Hong Kong)
Chen Yanjun EUPA Industry Corporation Limited Director 26 Feb. 2009 No
Chen Yanjun Fillman Investments Limited Director 26 Feb. 2009 No
Post-holding in other units
□ Applicable √ Inapplicable
Particulars about the Company's current directors, supervisors and senior executives ‘punishments from Securities
Regulatory Institution of recent three years in reporting period
50
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
□ Applicable √ Inapplicable
IV. Remuneration for directors, supervisors and senior management
Decision-making procedure, determining basis and actual payment for the remuneration of directors, supervisors and senior
management
According to the Company Law, the Securities Law and other laws and regulations, the remuneration of the directors and
supervisors shall be decided by the Shareholders’ General Meeting, while the remuneration of the senior management staffs
shall be decided by the Board of Directors. And the remuneration of the directors, supervisors and senior management
staffs is decided by referring the market level and according to the Company ’s human resource management system.
Remuneration of the directors, supervisors and senior management of the Company during the reporting period is as follow:
Unit: RMB Thousand Yuan
Whether gained
Total before-tax
remuneration
remuneration
Name Position Gender Age Current/former from the related
gained from the
parties of the
Company
Company
Chairman of the
Pan Zhirong Male 49 Current 83.49 No
Board
Zhuang Xing Director Male 61 Current 3.6 No
Chen Yanjun Director Male 54 Current 3.6 Yes
Tan Zichang Managing Director Male 46 Current 73.54 No
Tu Liandong Independent director Male 48 Current 15 No
Bai Shaoxiang Independent director Male 43 Current 12 No
Tang Jinmu Independent director Male 49 Current 12 No
Luo Qingxing Supervisor Male 61 Current 37.88 No
Yang
Supervisor Male 51 Current 2.4 Yes
Yongquan
Yang Yusheng Supervisor Male 59 Current 10.86 No
Sun Meimei Company Secretary Female 42 Current 14.74 No
Wu Yanru Financial principal Male 42 Current 35.6 No
Total -- -- -- -- 304.71 --
Situations of equity incentives awarded to the directors, supervisors and senior management of the Company during the
reporting period
□ Applicable √ Inapplicable
V. About employees
Education Number of person Classification of person Number of person
Doctor 1 Sales personnel 203
Master 14 Financial personnel 73
Bachelor 268 Technicians 485
Junior college 364 Administrative personnel 664
College below 3,839 Production personnel 3,061
Total 4,486 Total 4,486
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Situation of remuneration cost of Company
Item Reporting period
Total number of employees accepted salaries (person) 4,486
Total salaries (Ten Thousand Yuan) 26,348.83
Proportion of operation revenue in reporting period (%) 13.38
Average salary of senior executives (Ten Thousand Yuan/person) 25.39
Average salary of total employees (Ten Thousand Yuan/person) 5.88
Section IX. Corporate Governance
I. Basic details of corporate governance
During the reporting period, the Company standardize its operations strictly in accordance with
requirements of relevant law and rules of Company Law, Securities Law, Code of Corporate Governance
for Listed Companies in China, Rules for Listing Shares at Shenzhen Stock Exchange and so on, and
endlessly amplified and perfected administration structure and corporate system of the Company as well as
established relatively accomplished corporate governance structure. According to relevant regulations of
CSRC, the Company completed the establishment of Accountability System for Material Error in Annual
Report Information Disclosure, and strictly in line with relevant regulations in the process of disclosing
this annual report. Currently, the situation of corporate governance structure basically accorded with
regulations stipulated in regulatory documents on governance of listed companies reported by CSRC.
There were no governance problems remained unsolved. The governance of the Company is as follows:
1. Shareholders and Shareholders’ General Meeting
The Company convened Shareholders’ General Meeting in line with Articles of Association of the
Company and Rules of Procedures for Shareholders’ General Meeting, treated all shareholders with equity,
guaranteed middle and small shareholders enjoy equal status and ensured all shareholders be able to
exercise their rights.
2. Controlling shareholders and the Company
Controlling shareholders were strictly in accordance with requirements to exercise rights of promoters and
assumed responsibilities. The Company realized independence between controlling shareholder and
listed companies in business, assets, agencies and finance; and independent operation between the Board
of Directors of the Company, the Supervisory Board and internal agency which ensured independence in
accounting, assuming responsibility and bearing risks, so as to ensure legal rights and interests of
investors.
3. Directors and the Board of Directors
The Company strictly in accordance with election procedure of directors in Articles of Association of the
Company to elect directors that the number of directors and the structure of the Board of Directors were in
line with requirements of laws and regulations. The Board of Directors earnestly executed Rules of
Procedure for the Board of Directors so as to guaranteed efficient operation and scientific strategic
decision. All directors of the Company performed their responsibilities honestly, sincerely and
assiduously, presented the Board of Directors, the Shareholders’ General Meeting seriously, and
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
participated in relevant trains actively.
4. Supervisors and the Supervisory Board
The Supervisory Board of the Company strictly in line with relevant provisions of Company Law and the
Articles of Association of the Company that the number of supervisors and the structure of the Supervisory
Board were in accordance with requirements of laws and regulations. All supervisors exercised the Rules
of Procedure for the Supervisory Board, earnestly performed their responsibilities. In light of the
responsibility for shareholders, all supervisors conducted inspection and supervision to the legitimacy
corporate finance of the Company and other significant decisions, legally performed responsibilities to
directors of the Company and senior management and supervised the implement of resolutions of the
Board of Directors and Shareholders’ General Meeting.
5. Information disclosure and transparency
The Company strictly in accordance with requirements of relevant provisions and regulatory documents
such as Rules for Listing Shares at Shenzhen Stock Exchange, Guidelines on Fair Information Disclosure
of Listed Companies, performed responsibilities of information disclosure of the Company truthfully,
accurately, timely and completely, and then guaranteed the equal opportunity of all shareholders of the
Company to gain relevant information of the Company.
6. There isn’t any problem on horizontal competition and related transactions that arising from partial
restructures and other issues of the Company. In the reporting period, the Company continuing and strictly
in accordance with Company Law, Securities Law, Basic Standards for Enterprise Internal Control,
Supporting Guidelines for Corporate Internal Control as well as requirements of regulated documents of
corporate governance for listed companies published by CSRC, endlessly accomplished corporate
governance structure, actively enforced corporate governance work, and gradually perfected corporate
governance and internal control system, intensified supervision of internal control, promoted operation
efficiency, operation regulation and corporate governance level, endeavor to seek optimized profit and
earnestly protected legal profit of minority shareholders.
Whether it exists any difference between the corporate governance and the Company Law and relevant rules of CSRC or
not?
□ Yes √ No
There is no difference between the corporate governance and the Company Law and relevant rules of CSRC.
II. Particulars about the Company’s separation from the controlling shareholder in
respect of business, personnel, assets, organization and financial affairs
The Company totally kept separation from the controlling shareholder in respect of business, personnel,
assets, organization and financing that it owned an independent and complete business.
III. Horizontal competition
□ Applicable √ Inapplicable
IV. Particulars about the annual shareholders’ general meeting and special
shareholders’ general meetings held during the reporting period
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Particulars about the shareholders’ general meeting in reporting period
Proportion of Index to the
Session Type Convening date Disclosure date
investors' participation disclosed
The Annual
The Annual
Shareholders’
Shareholders’ 0.11% 22 May 2015 23 May 2015 www.cninfo.com.cn
General Meeting of
General Meeting
2014
2. Special Shareholders’ General Meeting applied by the preferred stockholder with restitution of voting
right
□ Applicable √ Inapplicable
V. Performance of the Independent Directors
1. Particulars about the independent directors attending the board sessions and the shareholders’ general
meetings
1. Particulars about the independent directors attending the board sessions
Sessions required
Attendance by Entrusted Non-attendance in
Independent to attend during Attendance Absence
way of presence person for two
director the reporting in person rate
telecommunication (times) consecutive times
period
Tu Liandong 6 6 0 0 0 No
Bai Shaoxiang 6 5 0 1 0 No
Tang Jinmu 6 6 0 0 0 No
General meetings sat in on by
1
independent directors
Note to non-attendance in person for two consecutive times: naught
2. Particulars about independent directors proposing objection on relevant events
Whether independent directors propose objection on relevant events or not?
□ Yes √ No
During the reporting period, no independent directors proposed any objection on relevant events of the Company.
3. Other explanations about the duty performance of independent directors
Whether advices to the Company from independent directors were adopted or not
√ Yes □ No
Explanation on the advices of independent directors for the Company being adopted or not adopted
The independent director of the Company focused on the Company’s operation and executed responsibilities independently
and at the same issued independent fair advice on the related transaction, trust management and recruitment of the CPAs
firm, which played a positive role of improving the Company’s governance structure, promoting the scientificity and
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
objectivity of the policy of the Board of Directors as well as protecting the Company ’s and the whole shareholders’ interests.
See details of the performance of independent directors on the Work Report on 2015 Independent Director disclosed on
http://www.cninfo.com.cn.
VI. Performance of the Special Committees under the Board during the reporting
period
The Board of Directors of the Company consists of three special committees, respectively is Strategy
Committee, Audit Committee, Nomination, Remuneration and Appraisal Committee. Each special
committee’s responsibilities are clear, according to execution rules of duty issued by the Company's board
of directors, the special committee perform his duty, study on professional events, put forward opinions
and suggestions as a reference for the decision-making of the Board.
1. Particulars about Strategy Committee of the Board
During reporting period, the Strategy Committee of the Board held two meetings, the meeting reviewed
and approved the following proposals: the Proposal on Controlling Subsidiary TsannKuen (Zhangzhou)'s
Wholly Subsidiary Purchasing Tsann Kuen Xianrui Intelligence and the Related Transactions, Proposal on
the Wholly Sub-subsidiary Orient Star Investments Ltd, Purchasing All Share Equity of SCI Held by
Related Party FILLMAN INVESTMENTS LIMITED. And the Company 2016 Annual Budget Report.
The meeting had carried on the discussion and analysis to the above bills, and put forward opinions and
suggestions, which had significant influence to enhancing the Company's core competitiveness,
strengthening the scientific decision-making and improving efficiency and quality of the decision-making.
2. Particulars about the Audit Committee of the Board
During reporting period, there were five meetings held by the Audit Committee of the Board, the Audit
Committee of the Board earnestly studied the various financial reports, the bills etc..
In the annual financial report audit work, the Company’s Audit Committee of the board in line with the
principle of faithfulness, give full play to the supervisory function, maintained the independence of the
audit:
(1) Before the entry of the accountants, the Audit Committee of the Company reviewed the Company's
financial and accounting reports which formed a paper examination opinion.
(2) The Audit Committee of the Company conducted communication with the annual auditor Ruihua
Certified Public Accountants on the audit schedule and during the auditing period, the Audit Committee of
the Company conducted full communication with Ruihua Certified Public Accountants, supervised and
urged them careful work as planned.
(3) After Certified public accountants issued the initial audit opinions, the Audit Committee of the
Company reviewed the Company's financial and accounting reports again, formed a paper examination
opinion.
(4) After Ruihua Certified Public Accountants issued annual auditing report, objective evaluated the
auditing work in the Company this year.
(5) On the basis of current Ruihua Certified Public Accountants, proposed opinions to the further
employed accounting firm.
3. Particulars about Nomination, Remuneration and Appraisal Committee of the Board
During reporting period, there were four meetings held by the Nomination, Remuneration and Appraisal
Committee of the Board, After the Nomination, Remuneration and Appraisal Committee reviewed the
actual production and operating results, it reviewed remuneration of directors, supervisors and senior
managers disclosed in 2015 annual report and formed a paper examination opinion: the Company’s
directors, supervisors and senior managers compensation was in line with Company general meeting of
shareholders, the relevant resolutions of the board of directors and relevant compensation management
55
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
system. The remuneration of directors, supervisors and senior managers disclosed in 2015 strictly
implement the company compensation management system and performance appraisal method. The
remuneration of directors, supervisors and senior managers disclosed in annual report was true, reasonable
and complete.
VII. Performance of the Supervisory Committee
During the reporting period, the Supervisory Committee found whether there was risk in the Company in
the supervisory activity
□ Yes √ No
The Supervisory Committee has no objection on the supervised events during the reporting period.
VIII. Performance Evaluation and Incentive Mechanism for Senior Management Staff
The Company regularly appraised the performance of Senior Management Staffs strictly in accordance
with the relevant laws and regulations as well as existing performance appraisal system. The Board of
Directors was divided into nomination, remuneration and appraise committee, of which conducted
appraise and encouragement to senior management and relevant personnel. The Company also placed
limitation to resumption behavior, authority and responsibility of senior management in line with Articles
of Association and internal control system.
IX. Internal Control
1. Particulars about significant defects found in the internal control during reporting period
□ Yes √ No
2. Self-appraisal report on internal control
Disclosure date of the Self-appraisal Report on Internal Control 15 Mar. 2016
Disclosure index of the Self-appraisal Report on Internal Control www.cninfo.com.cn
The proportion of total assets included in evaluation scope entities in the Company's total
100.00%
assets of the consolidated financial statements
The proportion of operation revenue included in evaluation scope entities in the
100.00%
Company's operation revenue of the consolidated financial statements
Defect judging standards
Category Financial Report Non-Financial Report
56
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Great defect:
Safety-a number of employee fatalities
Company reputation- negative news
Great defect: spread around, the government or
Refer to one or several controlling defects groups in regulators investigated which lead to
the enterprise which lead to the enterprise's serious public attention, and cause huge loss of
deviation from controlling target customers, or need be report.
Qualitative criteria Significant defect Significant defect
Refer to one or several controlling defects groups, Safety-lead to a employ or citizen
its severity and economic results lower than great defect disability or fatality
which may lead to the enterprise's deviation from Company reputation- negative news
controlling target spread around the state, had
complained the media or lead to the
contract will be cancelled by the
customers.
Great defect:
>5% of total profits of consolidated statements in recent
period
>1% of total assets of consolidated statements in recent
period
>2% of total operation revenue of consolidated
statements in recent period
A serious violation of laws, regulations and rules and the Great defect::RMB5 million (including
government's policy, was restricted enter industry, RMB5 million) or above. Significant
suspended business licenses, forced to shut down. defect: Within RMB1 million
Quantitative criteria Significant defect (including RMB1million) to RMB5
Within 3%~5% of total profits of consolidated million (including RMB5 million)
statements in recent period
Within 0.5%~1% of total assets of consolidated
statements in recent period
Within1%~2% of total operation revenue of
consolidated statements in recent period
A serious violation of laws, regulations and rules and the
government's policy, lead to investigation by the local
governments or regulators, was ordered to stop business
operations for rectification
Number of significant defects of
0
financial report (Piece)
Number of significant defects of
0
non- financial report (Piece)
Number of important defects of
0
financial report (Piece)
Number of important defects of
0
non-financial report (Piece)
X. Audit report on internal control
√ Applicable □ Inapplicable
57
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Audit opinion paragraphs in the Audit Report on Internal Control
TSANN KUEN (CHINA) ENTERPRISE CO., LTD. has maintained effective internal control on financial report in all significant
respects according to the Basic Rules for Enterprise Internal Control and relevant regulations on 31 Dec. 2015
Particulars about Audit Report on Internal Control Disclosure
Disclosure date of the Audit Report on Internal Control 15 Mar. 2016
Disclosure index of the Audit Report on Internal Control http://www.cninfo.com.cn/
Type of Audit Report on Internal Control Unqualified auditor's report
Whether there is significant defect in non-financial report No
Whether the CPAs firm issues an Audit Report on Internal Control with non-standard opinion or not?
□ Yes √ No
Whether the Audit Report on Internal Control from the CPAs firm is in consistent with the Self-appraisal
Report from the Board or not?
√ Yes □ No
Section X. Financial Report
I. Auditor’s Report
Type of audit opinions Standard unqualified opinions
Signing date of audit report 12 Mar. 2016
Name of audit institution Ruihua Certified Public Accountants (LLP)
No. of audit report RHSZ No. [2016] 48380004
Name of CPA Pan Xinhua, Chen Lianwu
II. Financial Statement (Attached)
1. Balance sheet
2. Income statement
3. Cash flow statement
4. Statement of Change in Owners’ Equity
5. Notes to the Financial Statements
58
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Section XI. Documents Available for Reference
1. The Annual Report for 2015 with signatures and seals of the Chairman of the Board of Directors.
2. The Financial statements with signatures and seals of the legal representative, person in charge of
accounting work, person in charge of accounting organization.
3. Originals of all documents and announcements of the Company ever disclosed on Securities Times,
Hong Kong Ta Kung Pao and http://www.cninfo.com.cn/ in the reporting period) nominated by CSRC.
TSANN KUEN (CHINA) ENTERPRISE CO., LTD
The chairman of the Board: Pan Zhirong
12 Mar. 2016
59
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
通讯地址：北京市东城区永定门西滨河路 8 号院 7 号楼中海地产广场西塔 5-11 层
Postal Address:5-11/F,WestTower of China Overseas PropertyPlaza, Building 7,NO.8,Yongdingmen
Xibinhe Road, Dongcheng District, Beijing
邮政编码（Post Code）：100077
电话（Tel）：+86(10)88095588 传真（Fax）：+86(10)88091199
Independent Auditors' Report
Ruihua Shen Zi [2016] 48380004 Hao
To The Board of Directors of TsannKuen (China) Enterprise Co., Ltd.:
We have audited the accompanying financial statements of TsannKuen (China)
Enterprise Co., Ltd., (hereafter, the Company), which comprise the Consolidated and
Separate Statements of Financial Position as at 31 December 2015, the
Consolidated and Separate Statements of Comprehensive Income, the Consolidated
and Separate Statements of Cash Flows and the Consolidated and Separate
Statements of Changes in Shareholders' Equity for the year then ended, as well as a
summary of significant accounting policies and other explanatory notes.
I. Management’s Responsibility for the Financial Statements
The Company’s management is responsible for the preparation and fair presentation
of financial statements. This responsibility includes: (1) preparation of financial
statements in accordance with Enterprise Accounting Standards for the purpose of
fair presentation; (2) designing, implementing and maintaining internal control
necessary to the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
II. Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit. We conducted our audit in accordance with the Chinese Certified Public
Accountant Auditing Standards. Those standards require that we comply with the
Chinese Certified Public Accountant ethical requirements, plan and perform the audit
to obtain reasonable assurance as to whether the financial statements are free from
material misstatement.
60
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial statements. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk
assessments, the Certified Public Accountant considers internal control relevant to
the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
reasonableness of accounting estimates made by the management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
III. Audit Opinion
In our opinion, the financial statements have been prepared in accordance with the
requirements of the Enterprises Accounting Standards of China and presented fairly,
in all material respects, the consolidated and separate financial position of
TsannKuen (China) Enterprise Co., Ltd. as at 31 December 2015, and the
consolidated and separate results of its operations and its cash flows for the year
then ended.
Ruihua Certified Public Accountants Certified Public Accountants
Beijing. China Certified Public Accountants
12 March 2016
61
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Consolidated Statement of Financial Position
as at 31 December 2015
Prepared by: TsannKuen (China) Enterprise Co., Ltd. Currency: CNY
Item Note 2015.12.31 2014.12.31
Current assets:
Monetary funds 6.1 755,580,059.80 886,464,448.01
Financial assets measured by fair value with changes in
6.2 2,610,000.00
fair value recognised in profit or loss
Notes receivable 6.3 1,483,710.00 2,004,498.59
Accounts receivable 6.4 219,609,269.02 247,336,334.86
Advances from suppliers 6.5 16,864,224.91 12,758,696.10
Interests receivable 6.6 1,135,305.55 3,590,399.84
Dividends receivable
Other receivables 6.7 49,490,650.89 34,873,104.97
Inventories 6.8 264,090,949.73 193,150,144.07
Current assets held-for-sale
Non-current assets due within one year
Other current assets 6.9 89,858,232.99 13,087,495.75
Total current assets 1,398,112,402.89 1,395,875,122.19
Non-current assets:
Available-for-sale financial assets 6.10 40,000.00 40,000.00
Held-to-maturity investments
Long-term receivables
Long-term equity investments
Investment property 6.11 46,185,216.68 51,731,414.90
Fixed assets 6.12 173,254,819.42 165,560,208.64
Construction in progress 6.13 151,942.11 233,968.67
Materials held for construction
Fixed assets disposals
Biological assets held for production
Oil and gas assets
Intangible asets 6.14 14,136,233.55 12,145,423.16
Development expenditure
Goodwill
Long-term deferred charge 6.15 3,483,463.55 4,797,144.17
Deferred tax assets 6.16 14,407,727.86 18,711,962.93
Other non-current assets 6.17 6,264,771.15 1,929,374.75
Total non-current assets 257,924,174.32 255,149,497.22
Total assets 1,656,036,577.21 1,651,024,619.41
62
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Consolidated Statement of Financial Position (Continued)
as at 31 December 2015
Prepared by: TsannKuen (China) Enterprise Co., Ltd. Currency: CNY
Item Note 2015.12.31 2014.12.31
Current liabilitie
Short-term borrowings 6.18 61,190,000.00
Financial liabilities measured by fair value with changes in fair value
6.19 8,462,500.00 3,956,259.85
recognised in profit or loss
Notes payable 6.20 26,974,641.74 29,749,982.77
Trade payables 6.21 574,065,704.82 533,071,295.43
Advances from customers 6.22 15,828,556.71 14,769,179.12
Employment benefits payable 6.23 42,127,630.75 45,910,725.14
Taxes and fees payable 6.24 6,158,518.50 6,521,778.61
Interests payable 6.25 68,275.80
Dividends payable
Other payables 6.26 64,748,250.77 53,159,623.33
Current liabilities held-for-sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 738,365,803.29 748,397,120.05
Non-current liabilities:
Long-term borrowings
Debt instruments payable
Including: Preferred shares
Sustainable debts
Long-term payables
Long-term employment benefits payable
Designated payables
Accrued liabilities
Deferred income
Deferred tax liabilities 6.16 241,391.76 618,966.78
Other non-current liabilities
Total non-current liabilities 241,391.76 618,966.78
Total liabilities 738,607,195.05 749,016,086.83
Shareholders' equity
Share capital 6.27 185,391,680.00 185,391,680.00
Other equity instruments
Including: Preferred shares
Sustainable debts
Capital reserves 6.28 278,414,448.67 278,458,862.55
Less: Treasury stock
Other comprehensive income 6.29 3,325,820.61 -899,380.20
Designated reserves
Surplus reserves 6.30 20,962,521.51 16,400,043.27
Provision for general risks
Retained earnings 6.31 71,634,273.19 67,223,203.93
Equity attributable to shareholders of the parent 559,728,743.98 546,574,409.55
Minority interests 357,700,638.18 355,434,123.03
Total shareholders' equity 917,429,382.16 902,008,532.58
Total liabilities and shareholders equity 1,656,036,577.21 1,651,024,619.41
Legal representative: Pan Zhirong Chief of the accounting work: Wu Yanru Chief of the accounting organ: Wu Yanru
63
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Consolidated Statement of Comprehensive Income
For the Year ended 31 December 2015
Prepared by: TsannKuen (China) Enterprise Co., Ltd. Currency: CNY
Item Note 2015 2014
Total operating income 1,968,728,531.55 2,008,161,297.50
Including: Operating income 6.32 1,968,728,531.55 2,008,161,297.50
Total operating costs 1,930,226,873.63 1,948,053,224.21
Including: Operating costs 6.32 1,672,624,840.21 1,709,976,525.17
Sales tax and surcharges 6.33 6,915,701.14 10,955,439.55
Sales expenses 6.34 88,673,552.41 76,745,444.65
General and administrative expenses 6.35 181,577,528.19 155,016,162.11
Financial costs 6.36 -35,475,102.02 -14,038,393.49
Loss on asset impairment 6.37 15,910,353.70 9,398,046.22
Add: Gain on fair value changes (loss presented by "-" prefix) 6.38 -7,116,240.15 -22,466,359.85
Investment income (loss presented by "-" prefix) 6.39 16,587,981.27 28,595,387.50
Including: investment income from associates and joint ventures
Operating profit (loss presented by "-" prefix) 47,973,399.04 66,237,100.94
Add: Non-operating income 6.40 8,177,992.94 10,400,069.30
Including: Gain on non-current assets dispoal 1,558,791.03 3,553,358.79
Less: Non-operating expenses 6.41 72,442.69 2,400,779.99
Including: Loss on non-current assets dispoal 60,319.08 2,146,188.77
Profit before tax 56,078,949.29 74,236,390.25
Less: Income tax expenses 6.42 8,749,717.62 8,134,278.75
Net profit 47,329,231.67 66,102,111.50
Net profit attributable to shareholders of the parent 36,782,299.50 51,348,795.39
Net profit attributable to minority interests 10,546,932.17 14,753,316.11
After-tax other comprehensive income 6.43 5,633,601.06 643,763.49
After-tax other comprehensive income attributable to shareholders of the parent 4,225,200.81 482,822.62
A. Other comprehensive income not reclassifiable to profit or loss in subsequent periods
1. Remeasurement of net assets or net liabilities of defined benefit plans
2. Share of other comprehensive income of investees measured by the equity method not
reclassifiable to profit or loss
B. Other comprehensive income reclassifiable to profit or loss in subsequent periods 4,225,200.81 482,822.62
1. Share of other comprehensive income of investees measured by the equity method
reclassifiable to profit or loss
64
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Item Note 2015 2014
2. Gain or loss on changes in fair value of available-for-sale financial assets
3. Gain or loss on reclassification of held-to-maturity investments to available-for-sale
financial assets
4. Effective elements of gain or loss of cash flow hedges
5. Exchange difference on translation of foreign financial statements 4,225,200.81 482,822.62
6. Others
After-tax other comprehensive income attributable to minority interests 1,408,400.25 160,940.87
Total comprehensive income 52,962,832.73 66,745,874.99
Total comprehensive income attributable to shareholders of the parent 41,007,500.31 51,831,618.01
Total comprehensive income attributable to minority interests 11,955,332.42 14,914,256.98
Earning per share
A. Basic earning per share 0.20 0.28
B. Diluted earning per share 0.20 0.28
Legal representative: Pan Zhirong Chief of the accounting work: Wu Yanru Chief of the accounting organ: Wu Yanru
65
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2015
Prepared by: TsannKuen (China) Enterprise Co., Ltd. Currency: CNY
Item Note 2015 2014
Cash flows from operating activities
Cash receipts from sales of goods and rendering of services 1,980,626,946.69 1,977,434,597.92
Tax repayments received 207,406,950.67 204,051,195.60
Other cash receipts relating to operating activities 6.44.1 67,391,803.81 114,233,147.70
Cash inflows from operating activities 2,255,425,701.17 2,295,718,941.22
Cash payments for purchase of goods and services 1,711,073,581.79 1,807,424,358.98
Cash paid to and on behalf of employees 290,279,821.57 252,861,652.75
Taxes and fees paid 18,804,202.58 25,317,973.52
Other cash payments relating to operating activities 6.44.2 151,829,504.39 165,098,656.99
Cash outflows for operating activitie 2,171,987,110.33 2,250,702,642.24
Net cash flows generated from operating activities 83,438,590.84 45,016,298.98
Cash flows from investing activities
Cash receipts from investment withdrawal 332,688,599.99 502,084,080.03
Cash receipts from investment income 27,428,962.23 16,511,307.45
Net cash receipts from disposal of fixed assets, intangible
3,468,191.79 5,431,247.93
assets and other non-current assets
Net cash receipts from disposal of subsidiaries and other
operating entities
Other cash receipts relating to investing activities 6.44.3 1,143,601,932.63 885,458,377.62
Cash inflows from investing activities 1,507,187,686.64 1,409,485,013.03
Cash payments for purchase and construction of fixed assets,
74,772,720.33 42,645,782.58
intangible assets and other non-current assets
Cash paid for invesetments 410,194,808.00 440,000,000.00
Cash paid for acquisition of subsidiaries and other operating
entities
Other cash payments relating to investing activities 6.44.4 807,502,932.63 1,301,957,377.62
Cash outflows for investing activities 1,292,470,460.96 1,784,603,160.20
Net cash flows generated from investing activities 214,717,225.68 -375,118,147.17
Cash flows from financing activities
Cash receipts from shareholders' contribution
Including: Cash receipts from contribution by minority
shareholders of subsidiaries
Cash receipts from borrowings 583,727,183.61 733,840,728.00
Cash receipts from debt instruments
Other cash receipts relating to financing activities 6.44.5 143,841,500.00
Cash inflows from financing activities 583,727,183.61 877,682,228.00
Cash payments for debt settlement 660,108,752.61 703,871,548.00
Cash payments for dividends, profit distribution and interests 40,794,171.70 50,351,834.50
Including: Cash payments of dividends and profit distribution to
9,439,680.90 12,877,215.93
minority shareholders
Other cash payments relating to financing activities 6.44.6 156,034,500.00
Cash outflows for financing activities 700,902,924.31 910,257,882.50
Net cash flows generated from financing activities -117,175,740.70 -32,575,654.50
Impact of changes in foreign exchange rates on cash and cash
24,234,535.97 -1,446,008.98
equivalents
Net increase of cash and cash equivalents 205,214,611.79 -364,123,511.67
Add: Cash and cash equivalents brought forward 469,965,448.01 834,088,959.68
Cash and cash equivalents carried forward 6.45.2 675,180,059.80 469,965,448.01
Legal representative: Pan Zhirong Chief of the accounting work: Wu Yanru Chief of the accounting organ: Wu Yanru
66
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Consolidated Statement of Changes in Shareholders' Equity
For the Year Ended 31 December 2015
Prepared by: TsannKuen (China) Enterprise Co., Ltd. Currency: CNY
2015
Equity attributable to shareholders of the parent
Item
Other equity instruments Minority
Total
Less: Other Provision interests
Capital Surplus Retained
Share capital Treasury comprehensive Designated for general
reserves reserves earnings
stock income reserves risks
Preferred Sustainable Others
shares debts
Balance brought forward 185,391,680.00 278,458,862.55 -899,380.20 16,400,043.27 67,223,203.93 355,434,123.03 902,008,532.58
Add: Changes of accounting policies
Correction of prior period errors
Business combination under
common control
Others
Balance as at 1January 185,391,680.00 278,458,862.55 -899,380.20 16,400,043.27 67,223,203.93 355,434,123.03 902,008,532.58
Changes for the period (decrease
-44,413.88 4,225,200.81 4,562,478.24 4,411,069.26 2,266,515.15 15,420,849.58
presented by "-" prefix)
1. Total comprehensive income 4,225,200.81 36,782,299.50 11,955,332.42 52,962,832.73
2. Changes in shareholders' contribution
a. Capital contributed
b. Contribution by holders of other equity
instruments
c. Share-based payments directly
recognised in equity
d. Others
3. Profit distribution 4,562,478.24 -32,371,230.24 -9,439,680.90 -37,248,432.90
67
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
2015
Equity attributable to shareholders of the parent
Item
Other equity instruments Minority
Less: Other Provision Total
Capital Surplus Retained interests
Share capital Treasury comprehensive Designated for general
reserves reserves earnings
stock income reserves risks
Preferred Sustainable Others
shares debts
a. Recognition of surplus reserves 4,562,478.24 -4,562,478.24
b. Recognition of provision for general risks
c. Distribution to shareholders -27,808,752.00 -9,439,680.90 -37,248,432.90
d. Others
4. Movements within equity
a. Share premium transferred to share
capital
b. Surplus reserves transferred to share
capital
c. Loss set-off by surplus reserves
d. Others
5. Designated reserves
a. Recognition during the current period
b. Withdrawal during the current period
6. Others -44,413.88 -249,136.37 -293,550.25
Balance carried forward 185,391,680.00 278,414,448.67 3,325,820.61 20,962,521.51 71,634,273.19 357,700,638.18 917,429,382.16
68
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Consolidated Statement of Changes in Shareholders' Equity(Continued)
For the Year Ended 31 December 2015
Prepared by: TsannKuen (China) Enterprise Co., Ltd. Currency: CNY
2014
Equity attributable to shareholders of the parent
Item
Other equity instruments Minority
Less: Other Provision Total
Capital Surplus Retained interests
Share capital Treasury comprehensive Designated for
reserves reserves earnings
Preferred Sustainable stock income reserves general
Others risks
shares debts
Balance brought forward 185,391,680.00 278,454,447.07 -1,382,202.82 11,495,983.58 46,733,303.43 353,397,081.98 874,090,293.24
Add: Changes of
accounting policies
Correction of prior
period errors
Business
combination under common
control
Others
Balance as at 1January 185,391,680.00 278,454,447.07 -1,382,202.82 11,495,983.58 46,733,303.43 353,397,081.98 874,090,293.24
Changes for the period
(decrease presented by "-" 4,415.48 482,822.62 4,904,059.69 20,489,900.50 2,037,041.05 27,918,239.34
prefix)
1. Total comprehensive
482,822.62 51,348,795.39 14,753,316.11 66,584,934.12
income
2. Changes in shareholders'
contribution
a. Capital contributed
b. Contribution by holders of
other equity instruments
c. Share-based payments
directly recognised in equity
d. Others
3. Profit distribution 4,904,059.69 -30,858,894.89 -12,877,215.93 -38,832,051.13
69
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
2014
Equity attributable to shareholders of the parent
Item
Other equity instruments Minority
Less: Other Provision Total
Capital Surplus Retained interests
Share capital Treasury comprehensive Designated for
reserves reserves earnings
Preferred Sustainable stock income reserves general
Others risks
shares debts
a. Recognition of surplus
4,904,059.69 -4,904,059.69
reserves
b. Recognition of provision for
general risks
c. Distribution to shareholders -25,954,835.20 -12,877,215.93 -38,832,051.13
d. Others
4. Movements within equity
a. Share premium transferred to
share capital
b. Surplus reserves transferred
to share capital
c. Loss set-off by surplus
reserves
d. Others
5. Designated reserves
a. Recognition during the
current period
b. Withdrawal during the current
period
6. Others 4,415.48 160,940.87 165,356.35
Balance carried forward 185,391,680.00 278,458,862.55 -899,380.20 16,400,043.27 67,223,203.93 355,434,123.03 902,008,532.58
Legal representative: Pan Zhirong Chief of the accounting work: Wu Yanru Chief of the accounting organ: Wu Yanru
70
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Statement of Financial Position
as at 31 December 2015
Prepared by: TsannKuen (China) Enterprise Co., Ltd. Currency: CNY
Item Note 2015.12.31 2014.12.31
Current assets:
Monetary funds 7,750,025.58 3,236,270.65
Financial assets measured by fair value with changes in
fair value recognised in profit or loss
Notes receivable 589,835.00 2,004,498.59
Accounts receivable 15.1 23,997,156.18 28,535,190.86
Advances from suppliers 1,202,214.48 159,129.74
Interests receivable
Dividends receivable
Other receivables 15.2 3,010,844.58 618,435.08
Inventories 11,151,650.93 9,123,446.86
Current assets held-for-sale
Non-current assets due within one year
Other current assets 55,278.38 259,083.99
Total current assets 47,757,005.13 43,936,055.77
Non-current assets:
Available-for-sale financial assets 40,000.00 40,000.00
Held-to-maturity investments
Long-term receivables
Long-term equity investments 15.3 985,814,030.83 985,814,030.83
Investment property 38,994,677.59 43,650,654.94
Fixed assets 2,328,116.94 573,821.18
Construction in progress
Materials held for construction
Fixed assets disposals
Biological assets held for production
Oil and gas assets
Intangible asets 110,249.99
Development expenditure
Goodwill
Long-term deferred charge 405,866.33 758,014.49
Deferred tax assets 18,053,868.00 1,902,042.53
Other non-current assets 4,000.00
Total non-current assets 1,045,746,809.68 1,032,742,563.97
Total assets 1,093,503,814.81 1,076,678,619.74
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Statement of Financial Position (Continued)
as at 31 December 2015
Prepared by: Tsann Kuen (China) Enterprise Co., Ltd. Currency: CNY
Item Note 2015.12.31 2014.12.31
Current liabilitie
Short-term borrowings
Financial liabilities measured by fair value with changes in fair value recognised in profit or loss
Notes payable
Trade payables 66,922,540.32 52,496,435.80
Advances from customers 2,664,965.52 5,652,792.49
Employment benefits payable 3,390,321.73 2,347,177.91
Taxes and fees payable 966,665.47 898,026.25
Interests payable
Dividends payable
Other payables 461,663,363.89 475,204,952.74
Current liabilities held-for-sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 535,607,856.93 536,599,385.19
Non-current liabilities:
Long-term borrowings
Debt instruments payable
Including: Preferred shares
Sustainable debts
Long-term payables
Long-term employment benefits payable
Designated payables
Accrued liabilities
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 535,607,856.93 536,599,385.19
Shareholders' equity
Share capital 185,391,680.00 185,391,680.00
Other equity instruments
Including: Preferred shares
Sustainable debts
Capital reserves 271,490,289.82 271,489,596.88
Less: Treasury stock
Other comprehensive income
Designated reserves
Surplus reserves 20,962,521.51 16,400,043.27
Provision for general risks
Retained earnings 80,051,466.55 66,797,914.40
Total shareholders' equity 557,895,957.88 540,079,234.55
Total liabilities and shareholders equity 1,093,503,814.81 1,076,678,619.74
Legal representative: Pan Zhirong Chief of the accounting work: Wu Yanru Chief of the accounting organ: Wu Yanru
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Statement of Comprehensive Income
for the Year Ended 31 December 2015
Prepared by: Tsann Kuen (China) Enterprise Co., Ltd. Currency: CNY
Item Note 2015 2014
Operating income 15.4 127,854,853.84 138,125,503.73
Less: Operating costs 15.4 101,418,125.97 105,703,375.99
Sales tax and surcharges 1,126,375.48 1,490,154.55
Sales expenses 7,530,282.19 7,321,603.41
General and administrative expenses 16,130,465.48 10,215,032.07
Financial costs 440,380.20 201,333.40
Loss on asset impairment -17,344.39 210,315.35
Add: Gain on fair value changes (loss presented by "-" prefix)
Investment income (loss presented by "-" prefix) 15.5 28,286,287.22 38,189,978.21
Including: investment income from associates and joint ventures
Operating profit (loss presented by "-" prefix) 29,512,856.13 51,173,667.17
Add: Non-operating income 235,566.57 228,805.86
Including: Gain on non-current assets dispoal 23,533.98 83,894.34
Less: Non-operating expenses 12,952.66 35,791.72
Including: Loss on non-current assets dispoal 12,952.66
Profit before tax 29,735,470.04 51,366,681.31
Less: Income tax expenses -15,889,312.35 2,326,084.45
Net profit 45,624,782.39 49,040,596.86
After-tax other comprehensive income
A. Other comprehensive income not reclassifiable to profit or loss in subsequent periods
1. Remeasurement of net assets or net liabilities of defined benefit plans
2. Share of other comprehensive income of investees measured by the equity method not
reclassifiable to profit or loss
B. Other comprehensive income reclassifiable to profit or loss in subsequent periods
1. Share of other comprehensive income of investees measured by the equity method
reclassifiable to profit or loss
2. Gain or loss on changes in fair value of available-for-sale financial assets
3. Gain or loss on reclassification of held-to-maturity investments to available-for-sale
financial assets
4. Effective elements of gain or loss of cash flow hedges
5. Exchange difference on translation of foreign financial statements
6. Others
Total comprehensive income 45,624,782.39 49,040,596.86
Legal representative: Pan Zhirong Chief of the accounting work: Wu Yanru Chief of the accounting organ: Wu Yanru
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Statement of Cash Flows
for the Year Ended 31 December 2015
Prepared by: Tsann Kuen (China) Enterprise Co., Ltd. Currency: CNY
Item Note 2015 2014
Cash flows from operating activities
Cash receipts from sales of goods and rendering of services 134,971,219.25 155,926,222.61
Tax repayments received
Other cash receipts relating to operating activities 15,562,340.79 17,942,548.50
Cash inflows from operating activities 150,533,560.04 173,868,771.11
Cash payments for purchase of goods and services 103,592,297.07 159,814,799.80
Cash paid to and on behalf of employees 12,167,506.08 6,502,547.98
Taxes and fees paid 4,282,778.59 5,284,687.61
Other cash payments relating to operating activities 23,744,427.95 22,968,014.67
Cash outflows for operating activitie 143,787,009.69 194,570,050.06
Net cash flows generated from operating activities 6,746,550.35 -20,701,278.95
Cash flows from investing activities
Cash receipts from investment withdrawal
Cash receipts from investment income 28,286,287.22 38,189,978.21
Net cash receipts from disposal of fixed assets, intangible assets and other
85,700.00
non-current assets
Other cash receipts relating to investing activities
Cash inflows from investing activities 28,286,287.22 38,275,678.21
Cash payments for purchase and construction of fixed assets, intangible
2,721,295.15 178,998.29
assets and other non-current assets
Cash paid for invesetments
Other cash payments relating to investing activities
Cash outflows for investing activities 2,721,295.15 178,998.29
Net cash flows generated from investing activities 25,564,992.07 38,096,679.92
Cash flows from financing activities
Cash receipts from shareholders' contribution
Cash receipts from borrowings
Cash receipts from debt instruments
Other cash receipts relating to financing activities
Cash inflows from financing activities
Cash payments for debt settlement
Cash payments for dividends, profit distribution and interests 27,808,752.00 25,954,835.20
Other cash payments relating to financing activities
Cash outflows for financing activities 27,808,752.00 25,954,835.20
Net cash flows generated from financing activities -27,808,752.00 -25,954,835.20
Impact of changes in foreign exchange rates on cash and cash equivalents 10,964.51 -15,910.55
Net increase of cash and cash equivalents 4,513,754.93 -8,575,344.78
Add: Cash and cash equivalents brought forward 3,236,270.65 11,811,615.43
Cash and cash equivalents carried forward 7,750,025.58 3,236,270.65
Legal representative: Pan Zhirong Chief of the accounting work: Wu Yanru Chief of the accounting organ: Wu Yanru
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Statement of Changes in Shareholders' Equity
for the Year Ended 31 December 2015
Prepared by: Tsann Kuen (China) Enterprise Co., Ltd. Currency: CNY
2015
Other equity instruments
Item Less: Other Provision
Designated Surplus Retained
Share capital Capital reserves Treasury comprehensive for general Total
Preferred Sustainable reserves reserves earnings
Others stock income risks
shares debts
Balance brought
185,391,680.00 271,489,596.88 16,400,043.27 66,797,914.40 540,079,234.55
forward
Add: Changes of
accounting policies
Correction
of prior period errors
Others
Balance as at
185,391,680.00 271,489,596.88 16,400,043.27 66,797,914.40 540,079,234.55
1January
Changes for the
period (decrease 692.94 4,562,478.24 13,253,552.15 17,816,723.33
presented by "-" prefix)
1. Total
45,624,782.39 45,624,782.39
comprehensive income
2. Changes in
shareholders'
contribution
a. Capital contributed
b. Contribution by
holders of other equity
instruments
c. Share-based
payments directly
recognised in equity
d. Others
3. Profit distribution 4,562,478.24 -32,371,230.24 -27,808,752.00
a. Recognition of
4,562,478.24 -4,562,478.24
surplus reserves
b. Recognition of
provision for general risks
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
2015
Other equity instruments
Item Less: Other Provision
Designated Surplus Retained
Share capital Capital reserves Treasury comprehensive for general Total
Preferred Sustainable reserves reserves earnings
Others stock income risks
shares debts
c. Distribution to
-27,808,752.00 -27,808,752.00
shareholders
d. Others
4. Movements within
equity
a. Share premium
transferred to share
capital
b. Surplus reserves
transferred to share
capital
c. Loss set-off by
surplus reserves
d. Others
5. Designated
reserves
a. Recognition during
the current period
b. Withdrawal during the
current period
6. Others 692.94 692.94
Balance carried
185,391,680.00 271,490,289.82 20,962,521.51 80,051,466.55 557,895,957.88
forward
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Statement of Changes in Shareholders' Equity(Continued)
for the Year Ended 31 December 2015
Prepared by: Tsann Kuen (China) Enterprise Co., Ltd. Currency: CNY
2014
Other equity instruments
Item Less: Other Provision
Capital Surplus Retained
Share capital Treasury comprehensive Designated for general Total
reserves reserves earnings
Preferred Sustainable stock income reserves risks
Others
shares debts
Balance brought forward 185,391,680.00 271,485,181.40 11,495,983.58 48,616,212.43 516,989,057.41
Add: Changes of accounting policies
Correction of prior period errors
Others
Balance as at 1January 185,391,680.00 271,485,181.40 11,495,983.58 48,616,212.43 516,989,057.41
Changes for the period (decrease
4,415.48 4,904,059.69 18,181,701.97 23,090,177.14
presented by "-" prefix)
1. Total comprehensive income 49,040,596.86 49,040,596.86
2. Changes in shareholders' contribution
a. Capital contributed
b. Contribution by holders of other equity
instruments
c. Share-based payments directly recognised
in equity
d. Others
3. Profit distribution 4,904,059.69 -30,858,894.89 -25,954,835.20
a. Recognition of surplus reserves 4,904,059.69 -4,904,059.69
b. Recognition of provision for general risks
c. Distribution to shareholders -25,954,835.20 -25,954,835.20
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
2014
Other equity instruments
Item Less: Other Provision
Capital Surplus Retained
Share capital Treasury comprehensive Designated for general Total
reserves reserves earnings
Preferred Sustainable stock income reserves risks
Others
shares debts
d. Others
4. Movements within equity
a. Share premium transferred to share capital
b. Surplus reserves transferred to share
capital
c. Loss set-off by surplus reserves
d. Others
5. Designated reserves
a. Recognition during the current period
b. Withdrawal during the current period
6. Others 4,415.48 4,415.48
Balance carried forward 185,391,680.00 271,489,596.88 16,400,043.27 66,797,914.40 540,079,234.55
Legal representative: Pan Zhirong Chief of the accounting work: Wu Yanru Chief of the accounting organ: Wu Yanru
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
TsannKuen (China) Enterprise Co., Ltd.
Notes to the Financial Statements
For the Year Ended 31 December 2015
(All amounts are expressed, unless otherwise stated, in Renminbi (CNY).)
Note 1: 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 (Hongkong) Co., Ltd., EUPA Industry Corporation Limited and
HongkongFillman 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 2015, 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 concerningtheApproval of non-listed Foreign Shares Traded” from China Securities Regulatory
Commission. The China Securities Regulatory Commission agreed 700,476,830 unlisted shares (account for 62.97%
of the share capital) hold by the Company’s shareholders, EUPA Industry Corporation Limited, Fordchee Development
Limited and Fillman Investment Limited to transfer into B shares. On 29 November 2007 these B shares could be
listed and exercised on Shenzhen Stock Exchange. Up to 31 December 2015, total B shares hold by the three legal
shareholders (EUPA Industry Corporation Limited, Fordchee Development Limited and Fillman Investment Limited)
are 82,830,966 shares after the implementation of share reducing model. (Account for 44.68% of the share capital).
Legal representative: Pan, Zhirong
Place of registration: No.88 Xinglong Road, Huli Industrial District, Xiamen, Fujian Province
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
The parent: Star Comgistic Capital Co. Ltd.
The Company operates within the electrical machinery and equipment manufacturing industry.
The industry of the company: electrical machinery and equipment manufacturing.
The approved business scope: the main business is to develop, manufacture household appliances, electronics, light
industrial products, modern office supplies.Design and manufacture of molds associated with these products in
domestic and international sales of the company's products and after-sales service. Wholesale and retail household
appliances, electronic products, electrical equipment, office supplies, kitchen utensils, pre-packaged food (limited to
branches), import and export related business and provide after-sales service (the above description do not involve
state trading commodity goods, involving quota license management products are according to the relevant provisions
of the State for the regulationsapplication).
The financial statements approved by the resolution of the Board of Directors on12March2016, in accordance with the
Articles of Association, the financial statements will be submitted to the shareholders meeting for consideration
Conference.
The 2015 annual consolidated scope of company are 8 subsidiaries, please see Note 8 “The equity in other main
entities”. The consolidated scope of this annual increase one subsidiary than previous year and decreaseanother one
subsidiary than previous year, please see Note 7 “Changes of scope of consolidation financial statements”.
Note 2: 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 (Ministry of Finance issued order No.33, the Ministry of Finance
revised order No.76) on15 February 2006, and revised Accounting Standards (order 41 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 (2014 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.
Where assets are impaired, provisions for asset impairment are made in accordance with relevant requirements.
Note 3: 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 31 December 2015. In addition, the financial statements of the
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
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 (2014 Revision) issued by China Securities Regulatory Commission (CSRC) in 2014.
Note 4: Important Accounting Principles and Accounting Estimates
The Company and subsidiaries are principally engaged in the production and operation. The Company
andsubsidiaries in accordance with the actual production and management features, according to the relevant
provisions of Accounting Standards, to make a number of specific accounting policies and accounting estimates for
other transactions and events of revenue recognition, see Note 4.22 “Revenue” for the description. For description of
significant accounting judgments and estimates made by management, see Note 4.26 “Significant accounting
judgments and estimates”.
4.1 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.
4.2 Operating cycle
Normal business cycle is realized by the Company in cash or cash equivalents from the purchase of assets for
processing until. The company has a 12 -month operating cycle, and its assets and liabilities as liquidity criteria for the
classification.
4.3 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.
4.4 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.
4.4.1 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
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
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.
4.4.2 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 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
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
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) and Article55 of “Accounting Standards for Business
Enterprises No.33 - Consolidated Financial Statements” on the “package deal” criterion (see Note 4.5.2), 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 4.12 “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 valueoftheacquiree'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 will be in other comprehensive income associated with the use of infrastructure and the acquiree
directly related to the disposal of assets or liabilities of the same accounting treatment (that is, except in accordance
with the equity method of accounting in the defined benefit plan acquiree is remeasured net changes in net assets or
liabilities other than in the corresponding share of the lead, and the rest into the current 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 previously-held equity interest in the acquiree involved in other comprehensive
income and other comprehensive income associated with the purchase of the foundation should be used party directly
related to the disposal of assets or liabilities of the same accounting treatment (that is, except in accordance with the
equity method of accounting in the acquiree is remeasured defined benefit plans other than changes in net liabilities
or net assets due to a corresponding share of the rest of the acquisition date into current investment income).
4.5 Preparation of the consolidated financial statements
4.5.1 The scope of consolidation
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
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.
Once the change in the relevant facts and circumstances leading to the definition of the relevant elements involved in
the control of the change, the company will be re-evaluated.
4.5.2 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.
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.
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
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. Other comprehensive income related to the former subsidiary's equity investment, using
the foundation and the acquiree directly related to the disposal of the same assets or liabilities are accounted when
the control is lost (ie, in addition to the former subsidiary is remeasured at the net defined benefit plan or changes in
net assets and liabilities resulting from, the rest are transferred to the current investment income). 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 4.12 Long-term equity investments and
Note 4.9 Financial instruments for details.
The company get through multiple transactions step deal 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 4.12.2, 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 disposal, 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.
4.6 Cash equivalent
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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.
4.7 Foreign exchange
4.7.1 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.
4.7.2 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, ③available-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.
4.7.3 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
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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.
At the disposal of all of the company's ownership interest in a foreign operation, or due to the disposal of part of the
equity investment or other reasons, the loss of control over a foreign operation, the project owner's equity in the
balance sheet listed under the relevant overseas operations attributable to statements of the parent company's
shareholders' equity of foreign currency translation differences, all transferred to the disposal of the income statement.
At the disposal of part of the equity investment or other causes lower hold percentage overseas business interests,
but does not lose control over a foreign operation, and disposal of the foreign operation section related to foreign
currency translation differences attributable to minority interests, is not transferred to the income statement. At the
disposal of a foreign operation as part of the equity joint venture or joint ventures, foreign currency financial
statements of the foreign operation and the associated translation difference in proportion to dispose of the foreign
operation into the disposal of the income statement.
4.8 Financial instruments
4.8.1 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 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 recognised financial institution as at the Company’s balance sheet date in accordance
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with the principle of consistency.
4.8.2 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 personnels. 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
derecognition, impairment or amortization are recognized in profit or loss for the current period.
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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 derecognition, 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
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.
4.8.3 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
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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.
4.8.4 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 norretained 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 derecognition 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 derecognition, 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;
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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.
4.8.5 Classification and measurement of financial liabilities
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
derecognition or amortization is recognized in profit or loss for the current period.
4.8.6 Derecognition 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.
4.8.7 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
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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.
4.8.8 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.
4.8.9 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.
4.9 Receivables
The receivables by the Company include account receivables, and other receivables.
4.9.1 Criteria for recognition of bad debts:
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.
4.9.2 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
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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 % for accounts receivable % 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:
Group name % for accounts receivable % 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
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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.
4.9.3 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.
4.10 Inventories
4.10.1 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.
4.10.2 Valuation method of inventories
Inventories are initially carried at the planedcost,torecord 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.
4.10.3 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,
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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.
4.10.4 The perpetual inventory system is maintained for stock system.
4.10.5 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 methods, packaging materials are
amortized using immediate write-off method.
4.11 Long-term equity investments
Long-term equity investments referred to in this section refer to the Company invested entity has control, joint control
or significant influence over the long-term equity investments. The Company invested does not have control, joint
control or significant influence over the long-term equity investments as financial assets available for sale or at fair
value and the changes included financial assets through profit or loss, which refer to the accounting policies in Note
4.9 “financial instruments”.
Joint control is the Company control over an arrangement in accordance with the relevant stipulations are common,
related activities and the arrangement must be after sharing control participants agreed to the decision-making.
Significant influence is the Company s financial and operating policies of the entity has the right to participate in
decision-making, but cannot control or with other parties joint control over those policies.
4.11.1 Determination of Investment cost
The cost of a long-term equity investment acquired through business combination under common control is measured
at the acquirer's share of the combination date book value of the acquiree's net equity in the ultimate controller's
consolidated financial statements. The difference between the cost and book value of cash paid, non-monetary assets
transferred and liabilities assumed is adjusted to capital reserves, and to retained earnings if capital reserves is
insufficient. If the consideration is transferred by way of issuing equity instruments, the face value of the equity
instruments issued is recognised in share capital and the difference between the cost of the face value of the equity
instruments issued is adjusted to capital reserves, and to retained earnings if capital reserves is insufficient. Where a
business combination under common control is achieved by multiple acquisition of the acquiree's shareholding, the
multiple acquisitions shall be assessed to determine whether the multiple acquistions shall be viewed as one single
transaction. If the multiple acquistions shall be viewed as one single transaction, the multiple acquistions shall be
accounted for as one single transaction accordingly. If the multiple acquisitions shall not be viewed as one single
transaction, the difference between the cost of combination and the sum of the book value of the investment in the
acquiree immediately before the combination and the book value of the consideration transferred to acquire additional
shareholding is adjusted to capital reserves, and to retained earnings if capital reserves is insufficient. Cumulative
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other comprehensive income associated with the investment recognised as a result of the treatment of equity method
or available-for-sale financial assets prior to the combination is not affected by the combination.
The cost of a long-term equity investment acquired through business combination not under common control is the
fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued. Where a business
combination not under common control is achieved by multiple acquisition of the acquiree's shareholding, the multiple
acquisitions shall be assessed to determine whether the multiple acquistions shall be viewed as one single
transaction. If the multiple acquistions shall be viewed as one single transaction, the multiple acquistions shall be
accounted for as one single transaction accordingly. If the multiple acquisitions shall not be viewed as one single
transaction, the cost of combination is measured at the sum of book value of the investment in the acquiree
immediately before the combination and cost of acquisition of additional shareholding. If the investment prior to the
combination is measured by fair value, cumulative other comprehensive income associated with the investment prior
to the combination is not affected by the combination. If the investment prior to the combination is measured as an
available-for-sale financial asset, the difference between the fair value and the book value of the investment
immediately before the combination and the associated cumulative other comprehensive income recognised prior to
the combination are carried to profit or loss.
All expenses incurred directly associated with the acquisition by the acquirer, including expenditure of audit, legal
services, valuation and consultancy and other administrative expenses, are recognised in profit or loss for the period
during which the acquisition occurs.
Long-term equity investments acquired not through business combination are measured at cost on initial recognition.
Depending on the way of acquisition, the cost of acquisition can be the total cash paid, the fair value of equity
instrument issued, the contract price, the fair value or book value of the assets given away in the case of
non-monetary asset exchange, or the fair value of the relevant long-term equity investments. The cost of acquisition of
a long-term equity investment acquired not through business combination also includes all directly associated
expenses, applicable taxes and fees, and other necessary expenses. The cost of a long-term equity investment,
which enables the Company has significant influence or joint control over the acquiree which is achieved through
additional investment, is measured as the fair value determined in accordance with CAS 22 - Financial Instruments:
Recognition and Measurement plus the cost of additional investment.
4.11.2 Subsequent Measurement
To be invested joint control (except constitute common operator) or long-term equity investments significant influence
are accounted for using the equity method. In addition, the Company's financial statements using the cost method of
accounting for long-term equity can exercise control 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
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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.
The carrying amount of a long-term equity investment measured using the equity method is adjusted by the
Company's share of the investee's net profit and other comprehensive income, which is recognised as investment
income and other comprehensive income respectively. The carrying amount of a long-term equity investment
measured using the equity method is reduced by profit distribution or cash dividends announced by the investee. The
carrying amount of a long-term equity investment measured using the equity method is also adjusted by the investee's
equity movement other than net profit, other comprehensive income and profit distribution, which is adjusted to capital
reserves. The net profit of the investee is adjusted by the fair value of the investee's identifiable assets as at
acquistion. The financial statements and hence the net profit and other comprehensive income of an investee which
does not adopt accounting policies or accounting period uniform with the Company is adjusted by the Company's
accounting policies and accounting period. The Company's share of unrealised profit or loss arising from related party
transactions between the Company and an associate or joint venture is deducted from investment income. Unrealised
loss arising from related party transactions between the Company and an associate or joint venture which is
associated with asset impairment is not adjusted. Where assets transferred to an associate or joint venture which
form part of the Company's investment in the investee but which does not enable the Company obtain control over the
investee, the cost of the additional investment acquired is measured at the fair value of assets transferred and the
difference between the cost of the additional investment and the book value of the assets transferred is recognised in
profit or loss. Where assets transferred to an associate or joint venture form an operation, the difference between the
consideration received and the book value of the assets transferred in recognised in profit or loss. Where assets
transferred from an associate or joint venture form an operation, the transaction is accounted for in accordance with
CAS 20 - Business Combination, any gain or loss is reocgnised in profit or loss.
The Company's share of an investee's net loss is limited by the sum of the book value of the long-term equity
investment and other net long-term investments in the investees. The Company has obligation to share additional net
loss of the investee, the estimated share of loss recognised as accrued liabilities and investment loss. Where the
Company has unrecognised share of loss of the investee when the investee generates net profit, the Company's
unrecognised share of loss is reduced by the Company's share of net profit and when the Company's unrecognised
share or loss is eliminated in full, the Company's share of net profit, if any, is recognised as investment income.
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
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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
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 4.5.2 applies. For disposal of long-term equity investments in
any situation other than the fore-mentioned situation, the difference between the book value of the investment
disposed and the consideration received is recognised in profit or loss.
The long-term equity investment is measured by the equity method both before and after part disposal of the
investment, cumulative other comprehensive income relevant to the investment recognised prior to the acquistion is
treated in the same manner that the investee disposes the relevant assets or liabilities proportionate to the disposal.
The investee's equity movement other than net profit, other comprehensive income and profit distribution is
reocgnised in profit or loss proportionate to the disposal.
The long-term equity investment is measured at cost both before and after part disposal of the investment, cumulative
other comprehensive income relevant to the investment recognised, as a result of accounting by equity method or
recognition and measurement principles applicable to financial instruments, prior to the Company's acquisition of
control over the investee is treated in the same manner that the investee disposes the relevant assets or liabilities and
recognised in profit or loss proportionate to the disposal. The investee's equity movement other than net profit, other
comprehensive income and profit distribution, as a result of accounting by equity method, is reocgnised in profit or
loss proportionate to the disposal.
The Company's control over an investee is lost due to partial disposal of investment in the investee and the Company
continues to have significant influence over the investee after the partial disposal, the investment in measured by the
equity method in the Company's separate financial statements; the Company's control over an investee is lost due to
partial disposal of investment in the investee and the Company ceases to have significant influence over the investee
after the partial disposal, the investment in measured in accordance with the recognition and measurement principles
applicable to financial instruments in the Company's separate financial statements and the difference between the fair
value and the book value of the remaining investment at the date of loss of control is recognised in profit or loss.
Cumulative other comprehensive income relevant to the investment recognised, as a result of accounting by equity
method or recognition and measurement principles applicable to financial instruments, prior to the Company's
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acquisition of control over the investee is treated in the same manner that the investee disposes the relevant assets or
liabilities on the date of loss of control. The investee's equity movement other than net profit, other comprehensive
income and profit distribution, as a result of accounting by equity method, is reocgnised in profit or loss when control
is lost. Where the remaining investment is measured by equity method, the fore-mentioned other comprehensive
income and other equity movement are recognised in profit or loss proportionate to the disposal; Where the remaining
investment is measured in accordance with the recognition and measurement principles applicable to financial
instruments, the fore-mentioned other comprehensive income and other equity movement are recognised in profit or
loss in full.
The Company's joint control or significant influence over an investee is lost due to partial disposal of investment in the
investee, the remaining investment in the investee is measured in accordance with the recognition and measurement
principles applicable to financial instruments, the difference between the fair value and the book value of the
remaining investment at the date of loss of joint control or significant influence is recognised in profit or
loss.Cumulative other comprehensive income relevant to the investment recognised, as a result of accounting by
equity method, prior to the partial disposal is treated in the same manner that the investee disposes the relevant
assets or liabilities on the date of loss of joint control or significant influence. The investee's equity movement other
than net profit, other comprehensive income and profit distribution is reocgnised in profit or loss when joint control or
significant influence is lost.
The Company's control over an investee is lost through multiple disposals and the multiple disposals shall be viewed
as one single transaction, the multiple disposals is accounted for one single transaction which result in the Company's
loss of control over the investee. Each difference between the consideration received and the book value of the
investment disposed is recognised in other comprehensive income and reclassified in full to profit or loss at the time
when control over the investee is lost.
4.12 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. In addition, the Company holds for
future operating lease vacant buildings, if the board of directors (or similar body) to make a written resolution, made it
clear that their intention for rent and shall not occur in the short term change, but also as an investment real estate
presentation .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 expenditure is record in to the profit or loss when it incurred.
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 4.19 “Non-current and
non-financial assets impairment ".
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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.
When an investment property is changed for personal use, since the change of date, the investment property is
transferred to fixed assets or intangible assets. Owner-occupied property is changed to earn rentals or for capital
appreciation, change the date, will be converted to fixed assets or intangible investment property. When the transition
occurs, the conversion to the use of investment property cost model, the carrying value before conversion as the book
value after conversion, convert to investment property measured at fair value model, the fair value of the conversion
date as the conversion after the recorded value.
When the investment property is disposed ofor permanently withdrawn from use and no future economic benefits are
expected from the disposal,derecognition of the investment property. Investment property is sold, transferred, retired
or damaged, the disposal income after deducting the book value and related taxes and profit or loss.
4.13 Fixed assets
4.13.1 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.Fixed assets only in the economic
benefits associated with it will flow to the company and the cost can be measured reliably only are confirmed. Fixed
assets are stated at cost and considering the expected costs of abandoning the initial measurement.
4.13.2 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 7.00-10.00 20 4.50-4.65
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.
4.13.3 Measurement and recognition of fixed assets impairment
Impairment and provisions of fixed assets are disclosed on Note 4.19“Impairment of non-current andnon-financial
assets”.
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4.13.4 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.
4.13.5 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.
4.14 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 4.19.
4.15 Borrowing costs
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.
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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 borrowingdenominating 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.
4.16 Intangible assets
4.16.1 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
are 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.
4.16.2 Research and development cost
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Cost of research and development is distinguished into the research phase and the development phases.
Cost of the research phase is recognised 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 recognised 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;
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 recognised in the profit or
loss for the period in which it is incurred.
4.16.3 Impairment of intangible assets
Impairment and provisions of intangible assets are disclosed on Note 4.19.
4.17 Long-term deferred expenditure
An item long-term deferred expenses is an expense which has been incurred and which has a beneficial period (a
period during which an expense is expected to bring economic benefits to an entity) which is longer than one year and
which includes at least part of the reporting period during which the expense was incurred and subsequent reporting
periods. An item of long-term deferred expenses is recognised at the actual amount of the expense incurred and
allocated in each month of the beneficial period using the straight line method.
4.18 Impairment of long-term 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
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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.
4.19 Employee Benefits
The employee benefits of the company include short-term employee benefits, post-employment benefits, termination
benefits and other long-term employee benefits:
Short-term employee benefits includes wages, bonuses, allowances and subsidies, welfare, health insurance ,
maternity insurance, work injury insurance, housing funds, labor union funds, employee education funds,
non-monetary benefits and etc. The company provides services accounting period in which an employee of the
company will be short-term employee benefits are recognized as liabilities actually incurred and loss account or the
costs associated with the asset. The non -monetary benefits are measured at fair value.
Post-employment benefits include defined contribution plans and defined benefit plans. Defined contribution plan
which includes the basic old-age insurance, unemployment insurance and annuities shall be deposited in the
appropriate amount accrued to the cost of related assets or profit or loss.
Prior to the employment contracts terminate the labor relationship with employees, or to encourage employees to
accept voluntary redundancy compensation proposals in this company cannot unilaterally withdraw due to termination
of employment or layoff proposal termination benefits provided, and the company recognized costs related to both pay
and termination benefits related to the restructuring which is early to confirm employee benefits liabilities, and
recorded as profit or loss. However, termination benefits expected at the end of the annual reporting period of twelve
months cannot be fully paid, in accordance with other long-term employee benefits processing.
Retirement plan is using the same principle as the layoff. The company will stop providing services from the employee
to be paid during the normal retirement date of retired staff salaries, social insurance and etc., when in compliance
with the conditions on recognition in profit or loss (termination benefits).
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Other long-term employee benefits are provided by the company to employees, in line with defined contribution plans,
the accounting treatment in accordance with a defined contribution plan, in addition to the set-benefit plans in
accordance with the accounting treatment.
4.20 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 determine as liabilities:
①This obligation is current obligation of the Company; and,
②The performance of this obligation will probably cause economic benefits outflow of the Company; and,
③The amount of this obligation can be reliably measured.
On balance sheet datethe Company performs 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.
4.21 Revenue
4.21.1 Revenue from sales of goods
Revenue from sales of goods is recognised 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
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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.
4.21.2 Revenue from rendering of service
Revenue arising from rendering of services is recognised 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.
When the outcome of the services rendered cannot be reliably estimate, revenue is recognised as cost
reimbursement received or to be received, if any, and cost incurred is recognised in profit or loss for the period in
which the cost is incurred. No revenue is recognised 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.
4.21.3 Royalty Revenue
According to the contract or agreement, the revenue is recognized on an accrual basis.
4.21.4 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.
4.22 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 asgrant related to the assets; the others will be defined asgrants related to the
income. If the fileshave not clearly defined government grants objects, it will be divided in the following manner
compartmentalize the grantsrelated to the assetsandgrants 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
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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 grantsactually, 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)grantsreceivable of government departments issued a document entitled have been confirmed, or could reasonably
are 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 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.
4.23 Deferred tax assets and deferred tax liabilities
4.23.1 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
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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 period, 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.
4.23.2 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
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.
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At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to tax law, that
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.
4.23.3 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.
4.23.4 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.
4.24 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.
4.24.1 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.
4.24.2 The Company as Leasorunder operating Lease
Lease income from operating leases shall be recognized by the leasorin 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.
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4.25 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 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:
4.25.1 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.
4.25.2 Allowance for bad debts
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.
4.25.3 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 is 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.
4.25.4 The fair value of financial instruments
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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.
4.25.5 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.
4.25.6 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.
4.25.7 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
requires the management of the Company make a lot of judgments over the estimation of time period, value and tax
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planning strategies when future taxable profit incurs so that the value of deferred tax assets can be determined.
4.25.8 Income tax
There are some transactions where ultimate tax treatments and calculations have uncertainties in the Company’s
everyday operation. Whether there are possible for some items to make expenditure before tax needs approval 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 theincome tax and deferred income tax of the current period during the
final determination.
4.25.9 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.
4.25.10 Fair value measurement
Some assets and liabilities of the Company are measured by fair value in the financial statements. The company use
available market date when to make an estimate of the fair value of an asset or liability. The company will hire the third
party qualified appraiser to perform the appraisal if cannot get the value ofsame assets or liabilities without adjustment
in the active market at measurement day. The valuation techniquesand the value of the informationwhich are used to
determine all kinds of the fair value of assets and liabilities in the process are disclosed in Note 10.
Note 5: Taxation
5.1 Taxes and surcharges applicable to the Company
Taxes and surcharges Tax base Tax rate%
According to the revenues from sales to calculate the output tax, and use the
Value added tax 17
balance afterdeduct the deductible input tax to pay the VAT
Business tax Business tax taxable revenue 5
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Urban maintenance Sum of VAT payable, consumption duty payable and business tax payable
7
and construction surcharge for the reporting period, and exempt and deductible tax
Sum of VAT payable, consumption duty payable and business tax payable
Education surcharge 3
for the reporting period, and exempt and deductible tax
Sum of VAT payable, consumption duty payable and business tax payable
Local education surcharge 2
for the reporting period, and exempt and deductible tax
Corporate income tax Taxable profits 25
5.2 Taxes and surcharges applicable to the primary subsidiaries
5.2.1 TsannKuen (Zhangzhou) Enterprise Co., Ltd. (hereafter, TKL)
Taxes and surcharges Tax base Tax rate%
According to the revenues from sales to calculate the output tax, and use the
Value added tax 0, 17
balance after deduct the deductible input tax to pay the VAT
Business tax Business tax taxable revenue 5
Urban maintenance Sum of VAT payable, consumption duty payable and business tax payable
5
and construction surcharge for the reporting period, and exempt and deductible tax
Sum of VAT payable, consumption duty payable and business tax payable
Education surcharge 3
for the reporting period, and exempt and deductible tax
Sum of VAT payable, consumption duty payable and business tax payable
Local education surcharge 2
for the reporting 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 2014 Second Group of High Technology Enterprise
Review” (Mingkegao No. [2015]6), TKL was identified as Fujian Province High Technology Enterprise (The certification
No. GR201435000140), the validity is from the year 2014 to 2016.The current income tax at 15%.
5.2.2 TsannKuen China (Shanghai) Enterprise Co., Ltd. (hereafter, TKS)
Taxes and surcharges Tax base Tax rate%
According to the revenues from sales to calculate the output tax, and use the
Value added tax 17
balance after deduct the deductible input tax to pay the VAT
Business tax Business tax taxable revenue 5
Urban maintenance Sum of VAT payable, consumption duty payable and business tax payable
1
and construction surcharge for the reporting period, and exempt and deductible tax
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Sum of VAT payable, consumption duty payable and business tax payable
Education surcharge 3
for the reporting period, and exempt and deductible tax
Sum of VAT payable, consumption duty payable and business tax payable
Local education surcharge 2
for the reporting period, and exempt and deductible tax
Corporate income tax Taxable profits 25
Note 6: Notes to significant elements of the financial statements
Unless otherwise stated (incl. notes to significant elements of the financial statements is), the current year is 2015,
prior year is 2014 respectively.
6.1 Monetary funds
Items Balance as at 31/12/2015 Balance as at 31/12/2014
Cash in hand 662,057.21 554,909.96
Bank deposit 754,918,002.59 885,909,538.05
Total 755,580,059.80 886,464,448.01
Including: The total amount of deposit abroad 9,697,534.15 21,699,601.60
Note: At the end of current year, the balance of bank deposits in financial institution for the purpose of obtaining
interest income is CNY80,400,000.00.
6.2 Financial assets measured by fair value with changes in fair value recognised in profit or loss
6.2.1 Disclosure by classification
Items Balance as at 31/12/2015 Balance as at 31/12/2014
Held for trading financial assets 0.00 2,610,000.00
Including:Derivative financial assets 0.00 2,610,000.00
Total 0.00 2,610,000.00
6.2.2 Explanation
The derivative financial asset is forward foreign exchange contract signed with financial institutions.
6.3 Notes receivable
6.3.1 Disclosure by classification
Items Balance as at 31/12/2015 Balance as at 31/12/2014
Bank acceptance 1,483,710.00 2,004,498.59
Total 1,483,710.00 2,004,498.59
6.3.2 Other explanation
There is no unexpired notes receivable endorsed to other parties as at the end of this year, and there is no bank
acceptance discounted to bank (the bank acceptance discounted to bank is CNY16,700,000.00in the prior year, and
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the cost of discount incurred is CNY86,714.75in the prior year).
6.4 Accounts receivable
6.4.1 Disclosure by classification
Balance as at 31/12/2015
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Accounts receivable of individual
significance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Accounts receivable portfolio subject to
impairment by credit risk:
Portfolio by age 219,650,503.83 98.15 4,173,924.76 1.90 215,476,579.07
Portfolio by related parties 4,132,689.95 1.85 0.00 0.00 4,132,689.95
Subtotal 223,783,193.78 100.00 4,173,924.76 1.87 219,609,269.02
Accounts receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 223,783,193.78 100.00 4,173,924.76 1.87 219,609,269.02
(Continued)
Balance as at 31/12/2014
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Accounts receivable of individual
significance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Accounts receivable portfolio subject to
impairment by credit risk:
Portfolio by age 244,344,498.25 97.32 3,744,690.14 1.53 240,599,808.11
Portfolio by related parties 6,736,526.75 2.68 0.00 0.00 6,736,526.75
Subtotal 251,081,025.00 100.00 3,744,690.14 1.49 247,336,334.86
Accounts receivable of individually
insignificance subject to individually 0.00 0.00 0.00 0.00 0.00
assessment for impairment
Total 251,081,025.00 100.00 3,744,690.14 1.49 247,336,334.86
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6.4.1.1Accounts receivable using age analysis method for measurement of allowance for bad debt
Balance as at 31/12/2015
Age
Carrying amount Allowance for bad debt % of total
Within 1 year 218,683,065.22 3,206,486.17 1.47
Including: 1-90 days 194,326,529.96 0.00 0.00
91-180 days 21,223,212.95 2,122,321.28 10.00
181-270days 2,412,481.31 723,744.39 30.00
271-365 days 720,841.00 360,420.50 50.00
1 to 2 years 627,099.73 627,099.71 100.00
2 to 3 years 119,770.88 119,770.88 100.00
Over 3 years 220,568.00 220,568.00 100.00
Total 219,650,503.83 4,173,924.76 1.90
6.4.1.2 Accounts receivable using related party group method for measurement of allowance for bad debt
Balance as at 31/12/2015
Items
Carrying amount Allowance for bad debt % of total
Related parties 4,132,689.95 0.00 0.00
Total 4,132,689.95 0.00 0.00
6.4.2 Recognisation, recovery and reversal of allowance for bad debt
The amount of allowance for bad debts recognised during the year is CNY2,958,699.03. The amount of recovered or
reversedallowance for bad debts during the year is CNY1,161,893.65, the recoveredallowance for bad debts that has
been written off in previous periods is CNY0.00 at current year.
6.4.3 Accounts receivable written off during the current year
Items Written off amount
Sporadic accounts receivable written off 1,383,433.15
6.4.4 Details of top five accounts receivable
The total amount of top five accounts receivablessummaried by debtors as at the end of current year is
CNY98,127,266.64, accounting for 43.85% of the total accounts receivable as at the end of current year, the total
corresponding allowance for bad debts is CNY106,655.22.
6.5 Advances to suppliers
6.5.1 Disclosure by age
Balance as at 31/12/2015 Balance as at 31/12/2014
Age
Amount % of total Amount % of total
Within 1 year 16,861,137.82 99.98 12,250,817.50 96.02
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1 to 2 years 3,087.09 0.02 507,878.60 3.98
Total 16,864,224.91 100.00 12,758,696.10 100.00
6.5.2 Details of top five advance to suppliers
The total amount of top five advance to suppliers as at the end of current year is CNY13,112,029.47, accounting
for 77.75% of the totaladvance to suppliers.
6.6 Interests receivable
Items Balance as at 31/12/2015 Balance as at 31/12/2014
Fixed deposit receipt 1,135,305.55 3,590,399.84
Total 1,135,305.55 3,590,399.84
6.7 Other receivable
6.7.1Disclosure by classification
Balance as at 31/12/2015
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Other receivable of individual significance
subject to individually assessment for 0.00 0.00 0.00 0.00 0.00
impairment
Other receivable portfolio subject to
impairment by credit risk:
Portfolio by age 52,812,764.94 96.01 4,371,184.05 8.28 48,441,580.89
Portfolio by related parties 0.00 0.00 0.00 0.00 0.00
Subtotal 52,812,764.94 96.01 4,371,184.05 8.28 48,441,580.89
Other receivable of individually
insignificance subject to individually 2,194,194.47 3.99 1,145,124.47 52.19 1,049,070.00
assessment for impairment
Total 55,006,959.41 100.00 5,516,308.52 10.03 49,490,650.89
(Continued)
Balance as at 31/12/2014
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Other receivable of individual significance
subject to individually assessment for 0.00 0.00 0.00 0.00 0.00
impairment
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Balance as at 31/12/2014
Items Carrying amount Allowance for bad debt
Book value
Amount % of total Amount % of total
Other receivable portfolio subject to
impairment by credit risk:
Portfolio by age 34,410,218.27 97.25 508,563.30 1.48 33,901,654.97
Portfolio by related parties 0.00 0.00 0.00 0.00 0.00
Subtotal 34,410,218.27 97.25 508,563.30 1.48 33,901,654.97
Other receivable of individually
insignificance subject to individually 971,450.00 2.75 0.00 0.00 971,450.00
assessment for impairment
Total 35,381,668.27 100.00 508,563.30 1.44 34,873,104.97
6.7.1.1 Accounts receivable using the age analysis method for measurement of allowance for bad debt
Balance as at 31/12/2015
Items
Carrying amount Allowance for bad debt % of total
Within 1 year 48,606,037.23 164,456.34 0.34
Including: 1-90 days 47,864,587.79 0.00 0.00
91-180 days 478,439.40 47,843.94 10.00
181-270days 74,463.09 22,338.93 30.00
271-365 days 188,546.95 94,273.47 50.00
1 to 2 years 4,201,727.71 4,201,727.71 100.00
2 to 3 years 0.00 0.00 0.00
Over 3 years 5,000.00 5,000.00 100.00
Total 52,812,764.94 4,371,184.05 8.28
6.7.1.2Other receivable of individually insignificance subject to individually assessment for impairment
Allowance for
Items Carrying amount % of total Reason(s) for allowance
bad debt
Expect all other receivable will not
Shanghai Tanghai Investment Co., Ltd. 1,145,124.47 100.00 1,145,124.47
be repaid
China Export & Credit Insurance Corporation, Guaranteed deposits, absence of
648,450.00 0.00 0.00
Fujian Branch impairment
Guaranteed deposits, absence of
Longhai People's Court 201,620.00 0.00 0.00
impairment
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Allowance for
Items Carrying amount % of total Reason(s) for allowance
bad debt
Guaranteed deposits, absence of
Alipay (China) Network Technology Co., Ltd. 106,000.00 0.00 0.00
impairment
Guaranteed deposits, absence of
Li Jinhe 30,000.00 0.00 0.00
impairment
Guaranteed deposits, absence of
NiuhaiE-commerce ( Shanghai ) Co., Ltd. 30,000.00 0.00 0.00
impairment
Guaranteed deposits, absence of
Beijing Dangdangkewen E-Commerce Co., Ltd. 20,000.00 0.00 0.00
impairment
Guaranteed deposits, absence of
Gome Online E-Commerce Co., Ltd. 10,000.00 0.00 0.00
impairment
Guaranteed deposits, absence of
Zeng Deqi 3,000.00 0.00 0.00
impairment
Total 2,194,194.47 1,145,124.47
6.7.2 Recognisation, recovery and reversal of allowance for bad debt
The amount of allowance for bad debts recognized during the current year is CNY5,340,486.22, other
receivables written off during the current year is CNY339,558.34.
6.7.3 Details of top five other receivables
Allowance for
Carrying amount % of
Debtors Nature of OR Age bad debt as at
as at 31/12/2015 total
31/12/2015
ZhangzhouState Administration of Taxation Export tax rebate 32,352,743.18 0-90 days 58.82 0.00
Anting Town People's Government Construction
Rent fee 3,850,369.00 Over 1 year 7.00 3,850,369.00
Headquarters
Rent fee, electricity and
Fujian Hongyuan Group Materials Recycling Ltd. 1,734,040.08 Within 1 year 3.15 15,625.88
water bill
Rent fee, electricity and
Shanghai Tanghai Investment Co., Ltd. 1,145,124.47 Within 1 year 2.08 1,145,124.47
water bill
ZhangzhouHaikun Metal Products Ltd. Rent fee, electricity and 995,520.68 0-90 days 1.81 0.00
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Allowance for
Carrying amount % of
Debtors Nature of OR Age bad debt as at
as at 31/12/2015 total
31/12/2015
water bill
Total 40,077,797.41 72.86 5,011,119.35
6.8 Inventories
6.8.1 Disclosure by classification
Balance as at 31/12/2015
Items Carrying amount before
Impairment allowance Net carrying amount
impairment allowance
Raw material 91,108,960.31 18,521,377.30 72,587,583.01
Work in progress 12,536,811.29 0.00 12,536,811.29
Self-manufactured semi-finished goods 18,983,995.05 1,858,837.76 17,125,157.29
Finished goods 169,996,603.19 17,464,104.93 152,532,498.26
Low-value consumables 5,087,609.94 0.00 5,087,609.94
Materials in transit 4,221,289.94 0.00 4,221,289.94
Total 301,935,269.72 37,844,319.99 264,090,949.73
(Continued)
Balance as at 31/12/2014
Items Carrying amount before
Impairment allowance Net carrying amount
impairment allowance
Raw material 87,977,009.15 26,097,578.86 61,879,430.29
Work in progress 17,499,962.24 0.00 17,499,962.24
Self-manufactured semi-finished goods 19,932,405.48 2,663,231.89 17,269,173.59
Finished goods 97,948,909.55 12,407,948.20 85,540,961.35
Low-value consumables 6,776,739.39 0.00 6,776,739.39
Materials in transit 4,183,877.21 0.00 4,183,877.21
Total 234,318,903.02 41,168,758.95 193,150,144.07
6.8.2Impairment allowance for inventories
Increase in current year Decrease in current year
Impact of
Balance as at Balance as at
Items changes in
31/12/2014 Accrual Recovered or Written off Other 31/12/2015
exchange
rates
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Raw material 26,097,578.86 3,490,197.09 112,143.04 11,178,541.69 0.00 18,521,377.30
Self-manufactured
2,663,231.89 37,844.27 0.00 842,238.40 0.00 1,858,837.76
semi-finished goods
Finished goods 12,407,948.20 5,091,574.91 23,103.53 58,521.71 0.00 17,464,104.93
Total 41,168,758.95 8,619,616.27 135,246.57 12,079,301.80 0.00 37,844,319.99
Note: The inventory impairment loss written off during the year is CNY12,079,301.80.It isdue to sale or disposal of
sluggish inventory, with corresponding inventory impairment loss written off. There isno reversal of impairment at
current year.
6.8.3 The basis of recognizingimpairment allowance and the reason of recovering or writing off the impairment
allowance for inventories
The reason of
The reasons for
The basis of recognition of impairment allowance recovering impairment
Items inventory impairment
for inventories allowance for
write-off at current year
inventories
Market prices decrease, and resulting in raw
Raw material Sale or disposal
material’s net realizable value lower than cost
Market prices decrease, and resulting in
Self-manufactured
self-manufactured semi-finished goods’ net Sale or disposal
semi-finished goods
realizable value lower than cost
Market prices decrease, and resulting in Finished
Finished goods Sale or disposal
goods’ net realizable value lower than cost
6.9 Other current assets
Items Carrying amounts as at 31/12/2015 Carrying amounts as at 31/12/2014
Input tax to be deducted 9,858,232.99 13,087,495.75
Financial products 80,000,000.00 0.00
Total 89,858,232.99 13,087,495.75
6.10 Available-for-sale financial assets
6.10.1 The situation of available-for-sale financial assets
Carrying amounts as at 31/12/2015 Carrying amounts as at 31/12/2014
Items Net carrying Net carrying
Carrying amounts Impairment Carrying amounts Impairment
amounts amounts
Available for sale equity instruments 40,000.00 0.00 40,000.00 40,000.00 0.00 40,000.00
Including: measured by cost 40,000.00 0.00 40,000.00 40,000.00 0.00 40,000.00
Total 40,000.00 0.00 40,000.00 40,000.00 0.00 40,000.00
6.10.2 The measurement of the cost of available for sale financial assets at the end of current year
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Carrying amounts as at 31/12/2015 Impairment
Cash
Carrying Carrying
Increase Decre Decreas dividend
Carrying Carrying amounts Increase amounts % of
Investee in ase in e in for
amounts as at amounts as at as at in current as at total
current current current current
31/12/2014 31/12/2015 31/12/20 year 31/12/20
year year year year
14 15
Xiamen
Association of
Enterprises with 40,000.00 0.00 0.00 40,000.00 0.00 0.00 0.00 0.00 1.48 0.00
Foreign
Investment
Total 40,000.00 0.00 0.00 40,000.00 0.00 0.00 0.00 0.00 1.48 0.00
6.11 Investment property
6.11.1 Investment property measured using the historical cost convention
Construction
Items Houses and buildings Land use rights Total
in-progress
1. Cost:
1.1 Balance as at 31/12/2014 128,248,009.10 29,260,577.51 0.00 157,508,586.61
1.2 Increased in current year 2,699,232.29 0.00 0.00 2,699,232.29
1.2.1 Purchase 0.00 0.00 0.00
1.2.2Transferred from inventories,
2,699,232.29 0.00 0.00 2,699,232.29
fixed assets, construction in-progress
1.2.3 Increased by business combination 0.00 0.00 0.00 0.00
1.3 Decreased in current year 0.00 0.00 0.00 0.00
1.3.1 Disposal 0.00 0.00 0.00 0.00
1.4 Balance as at 31/12/2015 130,947,241.39 29,260,577.51 0.00 160,207,818.90
2. Accumulated Depreciation and accumulated
amortization
2.1Balance as at 31/12/2014 93,971,782.93 11,805,388.78 0.00 105,777,171.71
2.2 Increased in current year 7,639,381.38 606,049.13 0.00 8,245,430.51
2.2.1 Accrual or amortization 6,012,173.90 606,049.13 0.00 6,618,223.03
2.2.2 Investment property transferred from fixed
1,627,207.48 0.00 0.00 1,627,207.48
assets
2.3 Decreased in current year 0.00 0.00 0.00 0.00
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Construction
Items Houses and buildings Land use rights Total
in-progress
2.3.1 Disposal 0.00 0.00 0.00 0.00
2.4 Balance as at 31/12/2015 101,611,164.31 12,411,437.91 0.00 114,022,602.22
3. Impairmentallowance
3.1Balance as at 31/12/2014 0.00 0.00 0.00 0.00
3.2 Increased in current year 0.00 0.00 0.00 0.00
3.2.1 Accrual 0.00 0.00 0.00 0.00
3.3 Decreased in current year 0.00 0.00 0.00 0.00
3.3.1 Disposal 0.00 0.00 0.00 0.00
3.3.2 Other transferred out 0.00 0.00 0.00 0.00
3.4 Balance as at 31/12/2015 0.00 0.00 0.00 0.00
4. Carrying amount
4.1 Carrying amount as at 31/12/2015 29,336,077.08 16,849,139.60 0.00 46,185,216.68
4.2 Carrying amount as at 31/12/2014 34,276,226.17 17,455,188.73 0.00 51,731,414.90
6.11.2 Investment property with pending ownership registration
Items Carrying amount Reason for pending
Lvyuan three country villa 2,411,522.89
Note: Lvyuan three country villa is the houses with limited property rights and it is bought by the TsannKuen China
(Shanghai) Enterprise Co., Ltd. which is the subsidiary of the Company from Shanghai Lvsheng Real State
Development Co., Ltd. in 1999, and there has no land expropriation. Shanghai Lvsheng Real State Development Co.,
Ltd. and Shanghai Jiading district, Huangdu town Lvyuan community residents' committees issued Certificate jointly to
prove the right of this property belongs to TsannKuen China (Shanghai) Enterprise Co., Ltd. in January 2006.
6.12 Fixed assets
6.12.1 Circumstance of fixed assets
Improvement
Electronic device,
Houses and expense of
Items Machineries modules and Vehicles Total
buildings leased fixed
others
assets
1. Cost:
1.1 Balance as at 31/12/2014 97,404,653.05 153,679,330.78 1,231,926,727.30 17,984,602.01 66,776,989.36 1,567,772,302.50
1.2 Increased in current year 967,665.39 12,072,087.22 45,059,552.19 288,234.06 781,912.52 59,169,451.38
1.2.1 Purchase 10,563,855.05 44,280,077.04 231,680.90 416,546.57 55,492,159.56
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Improvement
Electronic device,
Houses and expense of
Items Machineries modules and Vehicles Total
buildings leased fixed
others
assets
1.2.2 Transferred fromconstruction
297,947.00 0.00 0.00 0.00 0.00 297,947.00
in-progress
1.2.3 Impact of
669,718.39 1,508,232.17 779,475.15 56,553.16 365,365.95 3,379,344.82
changesinexchange rates
1.3 Decreased in current year 6,697,962.31 11,735,937.43 128,669,288.18 1,397,712.34 1,745,352.76 150,246,253.02
1.3.1Disposal or scrap 3,998,730.02 11,735,937.43 128,669,288.18 1,397,712.34 1,745,352.76 147,547,020.73
1.3.2 Transferred from
2,699,232.29 0.00 0.00 0.00 0.00 2,699,232.29
construction in-progress
1.4 Balance as at 31/12/2015 91,674,356.13 154,015,480.57 1,148,316,991.31 16,875,123.73 65,813,549.12 1,476,695,500.86
2. Accumulated Depreciation
2.1 Balance as at 31/12/2014 38,402,482.33 104,053,421.51 1,150,750,340.51 16,375,714.50 50,764,769.54 1,360,346,728.39
2.2 Increased in current year 4,519,409.35 4,718,255.94 27,740,057.70 333,923.67 6,415,019.32 43,726,665.98
2.2.1 Accrual 4,235,355.25 4,380,640.93 27,338,181.00 312,169.03 6,233,280.58 42,499,626.79
2.2.2 Impact of changes
284,054.10 337,615.01 401,876.70 21,754.64 181,738.74 1,227,039.19
in exchange rates
2.3 Decreased in current year 1,825,563.73 10,456,744.61 125,828,353.90 1,111,745.16 93,108.10 139,315,515.50
2.3.1 Disposal or scrap 198,356.25 10,456,744.61 125,828,353.90 1,111,745.16 93,108.10 137,688,308.02
2.3.2 Transferred from
1,627,207.48 0.00 0.00 0.00 0.00 1,627,207.48
construction in-progress
2.4 Balance as at 31/12/2015 41,096,327.95 98,314,932.84 1,052,662,044.31 15,597,893.01 57,086,680.76 1,264,757,878.87
3. Impairmentallowance
3.1Balance as at 31/12/2014 0.00 20,736,652.60 20,138,609.01 356.88 989,746.98 41,865,365.47
3.2 Increased in current year 0.00 106,700.09 60,394.91 982.74 0.00 168,077.74
3.2.1 Accrual 0.00 98,152.80 54,348.66 944.37 0.00 153,445.83
3.2.2 Impact of changes
0.00 8,547.29 6,046.25 38.37 0.00 14,631.91
in exchange rates
3.3 Decreased in current year 0.00 520,565.58 2,023,212.04 0.00 806,863.02 3,350,640.64
3.3.1 Disposal or scrap 0.00 520,565.58 2,023,212.04 0.00 806,863.02 3,350,640.64
3.4 Balance as at 31/12/2015 0.00 20,322,787.11 18,175,791.88 1,339.62 182,883.96 38,682,802.57
4. Carrying amount
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Improvement
Electronic device,
Houses and expense of
Items Machineries modules and Vehicles Total
buildings leased fixed
others
assets
4.1 Carrying amount as at
50,578,028.18 35,377,760.62 77,479,155.12 1,275,891.10 8,543,984.40 173,254,819.42
31/12/2015
4.2 Carrying amount as at
59,002,170.72 28,889,256.67 61,037,777.78 1,608,530.63 15,022,472.84 165,560,208.64
31/12/2014
6.12.2 Fixed assets with pending ownership registration
Items Carrying amount Reason forpending
Lvyuan three country villa 815,961.92
Qingying garden 209,161.50 Legal procedures in process
Note: Lvyuan three country villa is the houses with limited property rights and it is bought by the TsannKuen China
(Shanghai) Enterprise Co., Ltd. which is the subsidiary of the Company from Shanghai Lvsheng Real State
Development Co., Ltd., and there has no land expropriation. Shanghai Lvsheng Real State Development Co., Ltd. and
Shanghai Jiading district, Huangdu town Lvyuan community residents' committees issued Certificate jointly to prove
the right of this property belongs to TsannKuen China (Shanghai) Enterprise Co., Ltd.
6.12.3 Impairment allowancefor fixed assets amounting toCNY153,445.34 was recognised during the current period
for impaired fixed assets upon impairment assessment. The impairment allowance was measured as the net
recoverable value of the impaired assets which is computed as the fair value of the said assets minus disposal costs.
The fair value of the said assets is measured as the estimated value based on the recent transacted prices of similar
assets in secondary markets.
6.13 Construction in progress
Carrying amounts as at 31/12/2015 Carrying amounts as at 31/12/2014
Items
Carrying amounts Impairment Net carrying amounts Carrying amounts Impairment Net carrying amounts
Sporadic project 151,942.11 151,942.11 233,968.67 233,968.67
Total 151,942.11 151,942.11 233,968.67 233,968.67
6.14 Intangible assets
Items Land rights Software Total
1. Cost:
1.1 Balance as at 31/12/2014 12,402,545.60 14,718,110.04 27,120,655.64
1.2 Increased in current year 1,308,591.78 1,647,155.33 2,955,747.11
1.2.1 Purchase 833,976.44 1,647,155.33 2,481,131.77
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Items Land rights Software Total
1.2.2 Impact of changes
474,615.34 0.00 474,615.34
in exchange rates
1.3 Decreased in current year 0.00 39,200.00 39,200.00
1.3.1 Disposal 0.00 39,200.00 39,200.00
1.3.3 Impact of changes
0.00 0.00 0.00
in exchange rates
1.4 Balance as at 31/12/2015 13,711,137.38 16,326,065.37 30,037,202.75
2. Accumulated amortization
2.1Balance as at 31/12/2014 1,523,126.31 13,452,106.17 14,975,232.48
2.2 Increased in current year 380,744.18 584,192.54 964,936.72
2.2.1 Accrual 279,220.74 584,192.54 863,413.28
2.2.2 Impact of changes
101,523.44 0.00 101,523.44
in exchange rates
2.3 Decreased in current year 0.00 39,200.00 39,200.00
2.3.1 Accrual 0.00 39,200.00 39,200.00
2.3.2 Impact of changes
0.00 0.00 0.00
in exchange rates
2.4 Balance as at 31/12/2015 1,903,870.49 13,997,098.71 15,900,969.20
3. Impairment allowance
3.1Balance as at 31/12/2014 0.00 0.00 0.00
3.2 Increased in current year 0.00 0.00 0.00
3.2.1 Accrual 0.00 0.00 0.00
3.2.2 Impact of changes
0.00 0.00 0.00
in exchange rates
3.3 Decreased in current year 0.00 0.00 0.00
3.3.1 Disposal 0.00 0.00 0.00
3.3.2 Impact of changes
0.00 0.00 0.00
in exchange rates
3.4 Balance as at 31/12/2015 0.00 0.00 0.00
4. Carrying amount
4.1 Carrying amount as at 31/12/2015 11,807,266.89 2,328,966.66 14,136,233.55
4.2 Carrying amount as at 31/12/2014 10,879,419.29 1,266,003.87 12,145,423.16
6.15 Long-term deferred charge
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Increase Other decrease
Carrying amount Amortisation Carrying amount
Items during the current during the current
as at 31/12/2014 for the current year as at 31/12/2015
year year
Telecommunications
741,866.45 0.00 336,000.12 0.00 405,866.33
engineering
Houses and buildings
4,039,129.68 1,397,902.17 2,359,434.63 0.00 3,077,597.22
renovation expenses
Landscape engineering 16,148.04 0.00 16,148.04 0.00 0.00
Total 4,797,144.17 1,397,902.17 2,711,582.79 0.00 3,483,463.55
6.16 Deferred tax assets and deferred tax liabilities
6.16.1 Without offsetting deferred tax assets
Carrying amountas at 31/12/2015 Carrying amountas at 31/12/2014
Items Deductible temporary Deferred Deductible temporary Deferred tax
difference tax assets difference assets
Impairment allowance 70,226,882.23 10,735,568.74 74,390,647.44 11,367,720.13
Accrued expenses 11,934,848.95 2,200,171.07 8,451,204.35 1,585,779.18
Held for trading financial liabilities 8,462,500.00 1,269,375.00 3,956,259.85 593,438.98
Payroll liability 0.00 0.00 29,342,266.85 4,401,340.03
Unrealized profits from
810,452.20 202,613.05 718,783.58 179,695.90
intragrouptransactions
Undistributed deficit 0.00 0.00 2,335,954.85 583,988.71
Total 91,434,683.38 14,407,727.86 119,195,116.92 18,711,962.93
6.16.2 Without offsetting deferred tax liabilities
Carrying amountas at 31/12/2015 Carrying amountas at 31/12/2014
Items Taxable temporary Deferred tax Taxable temporary Deferred tax
difference assets difference assets
Accumulated depreciation of
965,567.04 241,391.76 909,867.12 227,466.78
fixedassets
Held for trading financial assets 0.00 0.00 2,610,000.00 391,500.00
Total 965,567.04 241,391.76 3,519,867.12 618,966.78
6.16.3 Details of unrecognized deferred tax assets
Items Carrying amountas at 31/12/2015 Carrying amountas at 31/12/2014
Impairment allowance for fixed assets 15,990,473.61 12,896,730.42
Accrued expenses 17,993,277.12 18,469,353.81
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Items Carrying amountas at 31/12/2015 Carrying amountas at 31/12/2014
Payroll liability 1,321,984.20 1,384,448.27
Undistributed deficit 67,812,406.96 55,117,853.35
Total 103,118,141.89 87,868,385.85
Note: Due to whether the availability of future to obtain sufficient taxable income is uncertain that is list in above, and
therefore no deferred tax assets are recognized as deductible temporary differences and recoverable losses.
6.16.4 The deductible losses of unrecognized deferred tax assets shall be matured in the following years
Year Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014 Note
Year 2015 0.00 63,700.89
Year 2016 3,187,362.29 3,187,362.29
Year 2017 17,618,598.88 17,618,598.88
Year 2018 21,913,253.09 21,913,253.09
Year 2019 12,334,938.20 12,334,938.20
Year 2020 12,758,254.50 0.00
Total 67,812,406.96 55,117,853.35
6.17 Other non-current assets
Items Carrying amountas at 31/12/2015 Carrying amountas at 31/12/2014
Prepaid mold fee 1,608,236.93 1,929,374.75
Prepaid facilities etc. 4,656,534.22 0.00
Total 6,264,771.15 1,929,374.75
6.18 Short-term borrowings
Items Carrying amountas at 31/12/2015 Carrying amountas at 31/12/2014
Creditborrowings 0.00 61,190,000.00
Total 0.00 61,190,000.00
6.19 Financial liabilities measured as at fair value and the changes recorded into profit and loss
Items Carrying amountas at 31/12/2015 Carrying amountas at 31/12/2014
Held for trading financial liabilities 8,462,500.00 3,956,259.85
Including:Derivative financial liabilities 8,462,500.00 3,956,259.85
Total 8,462,500.00 3,956,259.85
6.20 Notes payable
Items Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
128
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Items Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
Bank acceptance 10,194,127.43 9,672,364.33
Commercial acceptance 16,780,514.31 20,077,618.44
Total 26,974,641.74 29,749,982.77
6.21 Accounts payable
6.21.1 Detail for accounts payable
Items Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
Within 1 year 566,405,876.76 522,517,246.90
Over 1 year 7,659,828.06 10,554,048.53
Total 574,065,704.82 533,071,295.43
6.21.2 Details of significant accounts payable remaining unsettled for more than one year
Creditors Amounts outstandingas at 31/12/2015 Reason(s) for unsettlement
XingdaElectronical& Mechanical Co,. Ltd. 3,190,682.91 Quality disputes
Ningbo Jiesiluo Electrical Equipment Co., Ltd. 1,024,264.67 Quality disputes
Ningbo Chaochao Electrical Equipment Co., Ltd. 500,237.01 Quality disputes
Total 4,715,184.59
6.22 Advances from customers
Items Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
Within 1 year 13,784,897.40 13,458,842.62
Over 1 year 2,043,659.31 1,310,336.50
Total 15,828,556.71 14,769,179.12
6.23 Employee benefits payable
6.23.1 Disclosure by classification
Carrying amount as at Increase during the Decrease during the Carrying amount as at
Items
31/12/2014 current year current year 31/12/2015
1. Short-term employee benefits 44,132,014.98 263,488,272.49 265,939,905.60 41,680,381.87
2. Post-employment benefits 1,608,710.16 10,016,674.45 11,569,477.73 55,906.88
3. Termination benefits 170,000.00 14,935,523.51 14,714,181.51 391,342.00
Total 45,910,725.14 288,440,470.45 292,223,564.84 42,127,630.75
6.23.2 Disclosure by classification of short-term employee benefits
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Carrying amount as at Increase during the Decrease during the Carrying amount as at
Items
31/12/2014 current year current year 31/12/2015
1. Wages, salaries and subsidies 31,405,772.66 235,575,979.21 236,071,053.04 30,910,698.83
2. Employee welfare 2,748.00 13,100,261.13 13,103,009.13 0.00
3. Social insurance: 886,538.25 8,664,436.68 9,049,695.99 501,278.94
Including: Medical insurance 475,271.74 5,671,282.12 5,697,123.75 449,430.11
Employment injury insurance 367,778.55 2,380,229.47 2,739,625.96 8,382.06
Maternity insurance 43,487.96 612,925.09 612,946.28 43,466.77
4.Housing provident fund 10,086,281.81 5,011,577.53 6,516,292.44 8,581,566.90
5.Labour union fee and employee
0.00 1,125,784.18 1,125,784.18 0.00
education fee
6. Short-term paid absences 1,750,674.26 10,233.76 74,070.82 1,686,837.20
Total 44,132,014.98 263,488,272.49 265,939,905.60 41,680,381.87
6.23.3 Disclosure by defined contribution plan
Carrying amount as at Increase during the Decrease during the Carrying amount as at
Items
31/12/2014 current year current year 31/12/2015
1. Basic pension 1,444,646.60 9,125,912.58 10,553,467.86 17,091.32
2. Unemployment insurance 164,063.56 890,761.87 1,016,009.87 38,815.56
Total 1,608,710.16 10,016,674.45 11,569,477.73 55,906.88
The company participates in the establishment of the government agency endowment insurance, unemployment
insurance plan, according to these plans, the Company pays planed fees to the company location. In addition to the
monthly fee deposit, the Company no longer bears further payment obligations. Corresponding expenses are
expensed as incurred or costs related assets.
6.24 Taxes payable
Items Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
Business tax 1,175,349.15 1,120,916.39
Corporate income tax 2,126,878.13 3,297,898.90
Value added tax 222,137.80 1.59
Personal income tax 472,557.24 602,035.27
Education surcharge 736,753.02 479,352.30
Urban maintenance and construction surcharge 698,361.21 443,507.87
Others 726,481.95 578,066.29
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Items Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
Total 6,158,518.50 6,521,778.61
6.25 Interests payable
Items Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
Interests on short-term borrowings 0.00 68,275.80
Total 0.00 68,275.80
6.26 Other payables
6.26.1 Detail for other payables
Items Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
Within 1 year 53,555,924.76 39,741,179.54
Over 1 year 11,192,326.01 13,418,443.79
Total 64,748,250.77 53,159,623.33
6.26.2 Details of significant other payables remaining unsettled for more than one year
Items Carrying amount as at 31/12/2015 Reason(s)for unsettlement
Mold fees 1,113,966.33 Generation advances, unpaid
Deposit 7,659,173.40 Termination be returned
Total 8,773,139.73
6.27 Share capital
Carrying amount as at Carrying amount as at
Movements during the current reporting period (+、－)
31/12/2014 31/12/2015
Items
Share Bonus Conversion
Total amount % Others Subtotal Total amount %
issue issue from reserves
1. Shares with restriction on disposal
1.1 State-held shares
1.2 Shares held by state-owned entities
1.3 Shares held by other domestic investors
Within: Held by institutional investors
Held by non-institutional investors
1.4 Shares held by foreign
investors
Within: Held by institutional
investors
Held by non-institutional
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Carrying amount as at Carrying amount as at
Movements during the current reporting period (+、－)
31/12/2014 31/12/2015
Items
Share Bonus Conversion
Total amount % Others Subtotal Total amount %
issue issue from reserves
investors
Subtotal of shares with
restriction on disposal
2. Floating shares
2.1 Ordinary shares issued in
CNY
2.2 Shares issued in domestic stock market
185,391,680.00 100.00 185,391,680.00 100.00
in foreign currency
2.3 Shares issued in foreign
market in foreign currency
2.4 Others
Subtotal of floating shares 185,391,680.00 100.00 185,391,680.00 100.00
3. Total 185,391,680.00 100.00 185,391,680.00 100.00
6.28 Capital reserves
Carrying amount as at Increaseduring the Decreaseduring the Carrying amount as at
Items
31/12/2014 currentyear currentyear 31/12/2015
Share premium 210,045,659.80 0.00 0.00 210,045,659.80
Other capital reserves 68,413,202.75 692.94 45,106.82 68,368,788.87
Total 278,458,862.55 692.94 45,106.82 278,414,448.67
Note: The increase of the capital reserve CNY692.94resulted from recognition in equity of proceeds from disposal of
miscellaneous shares held on behalf by CSDC Shenzhen.The decrease of the capital reserve CNY45,106.82resulted
from purchase the minority shareholders equity of sub-subsidiary company.
6.29 Other comprehensive income
Items Carrying Total amount in current year Carrying
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Less:
previously
recognized in
Less: After tax After tax
Amount for other
Income attributable to attributable to
the year comprehensiv
tax the parent minority
before tax e
expense company shareholders
incometransf
erred into
profit or loss
1.Other comprehensive
income will bereclassified into
income or loss in the future
Including: foreign currency
translation differences of financial -899,380.20 5,633,601.06 0.00 0.00 4,225,200.81 1,408,400.25 3,325,820.61
statements
Total of other comprehensive
-899,380.20 5,633,601.06 0.00 0.00 4,225,200.81 1,408,400.25 3,325,820.61
income
6.30 Surplus reserves
Carrying amount as at Increase Decrease Carrying amount as at
Items
31/12/2014 during the current year during the current year 31/12/2015
Statutory surplus
16,400,043.27 4,562,478.24 0.00 20,962,521.51
reserve
Total 16,400,043.27 4,562,478.24 0.00 20,962,521.51
Note: According to the provisions of the Company Law and the Articles of Association of the Company to accrual
statutory surplus reserve of 10 % of net profit,and no longer to accrual the statutory surplus reserve has reached more
than 50% of the registered capital of the company.
6.31 Retained earnings
Items Current year Prior year
Pre-adjustment balance brought forward 67,223,203.93 46,733,303.43
Total adjustment to retained earnings b/f (+, -) 0.00 0.00
Retained earnings b/f after adjustment 67,223,203.93 46,733,303.43
Add: Net profit attributable to shareholders of the parent 36,782,299.50 51,348,795.39
Less: Appropriation to statutory surplus reserve 4,562,478.24 4,904,059.69
Appropriation to discretionary surplus reserve 0.00 0.00
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Items Current year Prior year
General reserve 0.00 0.00
Ordinary dividends declared 27,808,752.00 25,954,835.20
Bonus issue 0.00 0.00
Balance carrying forward 71,634,273.19 67,223,203.93
6.32 Operating revenues and costs
6.32.1 General information
Items Current year Prior year
Principal operating income 1,902,907,171.01 1,927,053,028.84
Other operating income 65,821,360.54 81,108,268.66
Total 1,968,728,531.55 2,008,161,297.50
Principal operating cost 1,650,198,796.68 1,686,769,448.84
Other operating cost 22,426,043.53 23,207,076.33
Total 1,672,624,840.21 1,709,976,525.17
6.32.2 Revenues from principal operating activities by business
Current year Prior year
Industry
Operating revenues Operating costs Operating revenues Operating costs
Household appliances industry 1,902,907,171.01 1,650,198,796.68 1,927,053,028.84 1,686,769,448.84
Total 1,902,907,171.01 1,650,198,796.68 1,927,053,028.84 1,686,769,448.84
6.32.3 Revenues from principal operating activities by products
Current year Prior year
Products
Operating revenues Operating costs Operating revenues Operating costs
Catering and Cooking 1,237,385,562.27 1,056,546,841.40 1,200,426,463.00 1,036,871,171.77
Home helper 414,423,298.75 373,447,044.88 515,483,598.59 469,664,332.45
Tea/Coffee makers 235,062,032.76 207,140,807.34 184,628,880.85 163,739,852.05
Others 16,036,277.23 13,064,103.06 26,514,086.40 16,494,092.57
Total 1,902,907,171.01 1,650,198,796.68 1,927,053,028.84 1,686,769,448.84
6.32.4Revenues from principal operating activities by territories
Current year Prior year
Area
Operating revenues Operating costs Operating revenues Operating costs
Australia 98,405,708.12 82,385,770.35 117,368,861.14 103,466,125.63
Africa 9,827,663.03 8,638,937.49 15,476,211.60 12,480,621.77
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Current year Prior year
Area
Operating revenues Operating costs Operating revenues Operating costs
America 800,913,083.11 703,013,743.72 754,652,149.43 659,457,688.43
Europe 425,861,801.42 366,981,330.59 424,929,783.18 370,505,116.46
Asia 567,898,915.33 489,179,014.53 614,626,023.49 540,859,896.55
Total 1,902,907,171.01 1,650,198,796.68 1,927,053,028.84 1,686,769,448.84
6.32.5 Details of operating revenues from top five clients
Period Total amount of operating revenues from top five clients % of operating revenues in the same period
Year 2015 1,005,033,973.35 51.05
Year 2014 1,014,380,834.51 50.51
6.33 Business tax and surcharges
Items Current year Prior year
Business tax 3,874,088.21 4,532,148.28
Education surcharge 1,515,403.52 3,197,292.10
Urban maintenance and construction tax 1,523,365.77 3,217,655.01
Others 2,843.64 8,344.16
Total 6,915,701.14 10,955,439.55
Note: the recognition criteria for taxes and surcharges refer to Note 5 Taxation.
6.34 Sales expenses
Items Current year Prior year
Export expanses 35,724,665.88 34,663,868.05
Employee remunerations 21,664,940.71 21,830,181.88
Travel expenses 2,816,940.07 3,941,427.91
Sales commission and after sales service fees 4,713,775.71 3,854,246.72
Advertisements charges and sales promotion 4,712,912.40 3,553,919.76
Claimsexperiment expenses 13,953,124.51 3,223,367.26
Assets lease expenses 2,661,536.01 2,949,078.32
Transportation charges 979,986.18 1,442,123.52
Administrative expenses 885,667.76 707,662.18
Others 560,003.18 579,569.05
Total 88,673,552.41 76,745,444.65
6.35 General and administrative expenses
Items Current year Prior year
R&D expenses 76,302,589.62 67,148,812.66
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Items Current year Prior year
Employee remunerations 48,235,906.15 31,419,434.06
Depreciation and amortization of assets 9,844,183.11 12,013,919.37
Rental expenses 16,714,566.79 16,352,704.93
Insurance expenses 1,806,665.71 1,911,767.83
Administrative expenses 3,122,809.69 2,903,532.20
Travel expenses 4,262,209.81 4,038,740.58
Consultant fees 2,904,186.84 1,388,475.95
Maintenance expenses 6,554,904.03 6,797,141.66
Taxes and surcharges 3,194,832.43 4,459,915.47
Other expenses 8,634,674.01 6,581,717.40
Total 181,577,528.19 155,016,162.11
6.36 Financial costs
Items Current year Prior year
Interest expenses 3,488,381.49 11,479,398.17
Less:Interestincome 13,064,748.85 30,155,698.54
Exchange gain or loss -28,354,079.64 2,117,289.05
Bank charges 2,455,344.98 2,517,555.83
Other 0.00 3,062.00
Total -35,475,102.02 -14,038,393.49
6.37 Impairment loss on assets
Items Current year Prior year
Impairment loss on receivables 7,137,291.60 -1,733,519.93
Impairment loss on inventories 8,619,616.27 8,073,387.99
Impairment loss on fixed assets 153,445.83 3,058,178.16
Total 15,910,353.70 9,398,046.22
6.38 Gain from changes in fair value
Source of fair value change Current year Prior year
Financial assets measured by fair value with changes in fair value recognised in profit or loss - 2,610,000.00 -18,510,100.00
Including: Derivative financial assets - 2,610,000.00 -18,510,100.00
Financial liabilities measured by fair value with changes in fair value recognised in profit or loss -4,506,240.15 -3,956,259.85
Including: Derivative financial assets -4,506,240.15 -3,956,259.85
Total -7,116,240.15 -22,466,359.85
6.39 Investment income
Items Current year Prior year
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Items Current year Prior year
Investment income from disposal of financial assets measured by fair value
2,688,599.99 12,084,080.03
with changes in fair value recognised in profit or loss
Investment income from financial products 13,899,381.28 16,511,307.47
Total 16,587,981.27 28,595,387.50
6.40 Non-operating income
Included in current year
Items Current year Prior year
non-recurring profit and loss
Gains from disposal of non-current assets 1,558,791.03 3,553,358.79 1,558,791.03
Including: Gains from disposal of fixed assets 1,558,791.03 3,553,358.79 1,558,791.03
Income from indemnities 646,499.10 1,636,882.21 646,499.10
Government grants (see the following table for
3,752,212.58 3,248,685.00 3,752,212.58
detail: Details for government grants)
Unable to pay overdue accounts payable 765,043.20 1,000,653.16 765,043.20
Others 1,455,447.03 960,490.14 1,455,447.03
Total 8,177,992.94 10,400,069.30 8,177,992.94
Details of government grants which are recognised into profit or loss during current year
Government assistance Current year Prior year Related with assets/income
Patents subsidies 425,700.00 339,100.00 Related with income
Technology development grants 0.00 500,000.00 Related with income
Enterprise development subsidies 0.00 900,000.00 Related with income
Subsidies for export letter guarantees 1,164,401.00 1,119,434.00 Related with income
Science and technology subsidies 262,111.58 0.00 Related with income
Industry transformation and upgradingsubsidies 1,000,000.00 0.00 Related with income
Entrepreneurial talents special subsidies 400,000.00 0.00 Related with income
Other fiscal subsidies 500,000.00 390,151.00 Related with income
Total 3,752,212.58 3,248,685.00
6.41 Non-operating expenses
Included in current year
Items Current year Prior year
non-recurring profit and loss
Loss on disposal of non-current assets 60,319.08 2,146,188.77 60,319.08
Including: Loss on disposal of fixed assets 18,376.30 1,586,018.83 18,376.30
Loss on scraped fixed assets 41,942.78 560,169.94 41,942.78
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Included in current year
Items Current year Prior year
non-recurring profit and loss
Fines 3,200.00 45,000.00 3,200.00
Others 8,923.61 209,591.22 8,923.61
Total 72,442.69 2,400,779.99 72,442.69
6.42 Income tax expenses
6.42.1General information
Items Current year Prior year
Current income tax calculated in accordance with relevant tax law 4,823,057.57 5,724,369.75
Deferred tax 3,926,660.05 2,409,909.00
Total 8,749,717.62 8,134,278.75
6.42.2 Reconciliation of account profit and income tax expenses
Items Current year
Profit before tax 56,078,949.29
Income tax computed in accordance with the applicable tax rate 14,019,737.32
Impact of differing tax rates applicable to subsidiaries -6,957,661.39
Impact of adjustment for prior period tax expenses 572,505.70
Impact of non-taxable income -4,913.32
Impact of non-deductible costs, expenses and losses 878,588.46
Impact of utilisation of prior period deductible temporary differences and taxable temporary differences for which no
-431,724.90
deferred tax asset has been recognised
Impact of current period deductible temporary differences and taxable temporary differences fo which no deferred
4,804,883.42
tax asset has been recognised
Adjustment of deferred tax assets and deferred tax liabilities brought forward due to changes in tax rates
Impact of additional deduction for R&D expenses -4,131,697.67
Income tax expenses 8,749,717.62
6.43 Other comprehensive income
Please see Note 6.29 for details.
6.44 Notes to the statement of cash flows
6.44.1 Other cash received relating to operating activities
Items Current year Prior year
Government grants 3,752,212.58 3,026,085.00
Interests income 1,982,696.05 26,676,132.03
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Items Current year Prior year
Rent income 38,570,610.82 66,213,105.39
Funds in current account and others 23,086,284.36 18,317,825.28
Total 67,391,803.81 114,233,147.70
6.44.2 Other cash payments relating to operating activities
Items Current year Prior year
Penalties and donations paid 12,123.61 254,591.22
Bank charges paid by cash 2,455,344.98 2,517,555.83
Sales expenses and general and administrative expenses paid by cash 139,725,550.69 132,749,651.08
Current accounts and others 9,636,485.11 29,576,858.86
Total 151,829,504.39 165,098,656.99
6.44.3 Other cash received relating to investing activities
Items Current year Prior year
To recover the maturity time deposits thatfor purpose to earn interest income in
1,143,601,932.63 885,458,377.62
financial institutions
Total 1,143,601,932.63 885,458,377.62
6.44.4 Other cash payments relating to investing activities
Items Current year Prior year
Depositsin financial institutionsfor the purpose of earning interest income 807,502,932.63 1,301,957,377.62
Total 807,502,932.63 1,301,957,377.62
6.44.5 Other cash received relating to financing activities
Items Current year Prior year
Capital absorbed and loan between related parties 0.00 143,841,500.00
Total 0.00 143,841,500.00
6.44.6 Other cash payments relating to financing activities
Items Current year Prior year
Capital absorbed and loan between related parties 0.00 156,034,500.00
Total 0.00 156,034,500.00
6.45 Supplementary information to the statement of cash flows
6.45.1 Supplementary information to the statement of cash flows
Items Current year Prior year
① Reconciliation of cash flows from operating activities to net profit:
Net profit 47,329,231.67 66,102,111.50
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Items Current year Prior year
Add: Loss on asset impairment 15,910,353.70 9,398,046.22
Depreciation of fixed assets, oil and gas assets, biological assets held for
49,117,849.82 50,536,119.09
production
Amortisation of intangible assets 863,413.28 927,125.55
Amortisation of Long-term deferred expenditure 2,711,582.79 2,211,582.56
Loss on non-current assets disposal (gain presented by "-" prefix) - 1,540,414.73 -1,967,339.96
Loss on scrap of fixed assets (gain presented by "-" prefix) 41,942.78 560,169.94
Loss on fair value changes (gain presented by "-" prefix) 7,116,240.15 22,466,359.85
Financial costs (gain presented by "-" prefix) -6,703,972.98 12,925,407.15
Investment loss (gain presented by "-" prefix) -16,587,981.27 -28,595,387.50
Decrease of deferred tax assets (increase presented by "-" prefix) 4,304,235.07 5,049,684.87
Increase of deferred tax liabilities (increase presented by "-" prefix) -377,575.02 -2,639,775.87
Decrease of inventories (increase presented by "-" prefix) -79,695,668.39 8,600,566.84
Decrease of operating receivables (increase presented by "-" prefix) 6,114,514.45 -16,750,520.94
Increase of operating payables (decrease presented by "-" prefix) 54,834,839.52 -83,807,850.32
Others 0.00 0.00
Net cash flows generated from operating activities 83,438,590.84 45,016,298.98
②Significant investing and financing activities involve no cash:
Debt-to-capital conversion 0.00 0.00
Convertible loan due within one year 0.00 0.00
Fixed assets acquired under financial lease 0.00 0.00
③Movement of cash and cash equivalents:
Cash as at 31/12/2015 675,180,059.80 469,965,448.01
Less: Cash as at 31/12/2014 469,965,448.01 834,088,959.68
Add: Cash equivalents as at 31/12/2015 0.00 0.00
Less: Cash equivalents as at 31/12/2014 0.00 0.00
Net increase of cash and cash equivalents 205,214,611.79 -364,123,511.67
6.45.2 Composition of cash and cash equivalents
Items Current year Prior year
①Cash 675,180,059.80 469,965,448.01
Including: Cash at hand 662,057.21 554,909.96
Demand bank deposit 674,518,002.59 469,410,538.05
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Items Current year Prior year
Demand other monetary funds 0.00 0.00
Demand deposit in the Central Bank 0.00 0.00
Deposit in peer firms 0.00 0.00
Loan to peer firms 0.00 0.00
②Cash equivalents
Including: Debt instrument matured within three months 0.00 0.00
③Cash and cash equivalents as at 31/12/2015 675,180,059.80 469,965,448.01
Including: restricted cash and cash equivalents in parent company or subsidiary 0.00 0.00
Note1: Cash and cash equivalents excluding restricted cash and cash equivalents in parent company or subsidiary.
Note 2: Time deposits for the purpose of earning interest income in financial institutions is CNY80,400,000.00 at the
end of current year, listed as the other cash payments relating to investing activities and deducted from the balance of
cash and cash equivalents at the end of current year.
6.46 Foreign currency monetary items
6.46.1 Foreign currency monetary items
Translated amount as at
Items Original amount as at 31/12/2015 Foreignexchange rate
31/12/2015
Monetary funds
Including: -USD 39,679,395.69 6.4936 257,662,123.85
-EUR 55,987.26 7.0952 397,240.82
-HKD 57,822.86 0.8378 48,443.99
-JPY 47,415,233.80 0.0539 2,555,681.10
-FRF 7.00 6.5543 45.88
-GBP 10,354.60 9.6160 99,569.83
-IDR 3,085,139,073.03 0.0005 1,542,569.54
-HUF 81,016.00 0.0226 1,830.96
Total 262,307,505.97
Accounts receivable
Including: -USD 30,223,550.73 6.4936 196,259,649.03
-JPY 34,675,940.00 0.0539 1,868,166.27
-HKD 67,343.74 0.8378 56,420.59
Total 198,184,235.89
Other receivables
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Translated amount as at
Items Original amount as at 31/12/2015 Foreignexchange rate
31/12/2015
Including: -USD 34,238.28 6.4936 222,329.70
-EUR 7,013.33 7.0952 49,760.98
-JPY 784,897.28 0.0539 42,305.96
-IDR 1,273,526,855.00 0.0005 636,763.43
Total 951,160.07
Accounts payable
Including: -USD 7,199,277.09 6.4936 46,749,225.72
-EUR 198,262.79 7.0952 1,406,714.15
-HKD 1,077,409.00 0.8378 902,653.26
-JPY 11,582,042.00 0.0539 624,272.06
-IDR 711,295.00 0.0005 355.65
Total 49,683,220.84
Other payables
Including: -USD 246,994.69 6.4936 1,603,884.70
-HKD 181,864.12 0.8378 152,365.76
-JPY 130,494.00 0.0539 7,033.63
-IDR 1,306,835,564.70 0.0005 653,417.78
Total 2,416,701.87
6.46.2 Description of overseas operating entities
The Company's holdingsub-subsidiaries company Pt.StarComgistic Indonesia locate at West Java province in
Indonesia, due to Pt. Star Comgistic Indonesia are mostly settled in US dollars byusual purchases and sales, so that it
adopt the US dollar as its functional currency.
Note 7: Changes of scope of consolidation financial statements
The Company's holding subsidiary TsannKuen (Zhangzhou) Enterprise Co., Ltd. cancelled its subsidiary TsannKuen
(Zhangzhou) Profession and Technology Institute (LTC) in February2015. Since the date of cancellation that
TsannKuen (Zhangzhou) Profession and Technology Institute (LTC) is no longer included in the consolidated financial
statements, the revenue, expense and profit before completion of cancellation are included in the consolidated
income statement, cash flow before completion of cancellation is included in the consolidated statement of cash flows.
The Company's holding subsidiary TsannKuen (Zhangzhou) Enterprise Co., Ltd. purchased 100% shareholding of
Orient Star Investments Limited from Bosco Consultancy Limited in April 2015. Since the date of purchase that the
Orient Star Investments Limited is included in the scope of consolidated statement.
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Note 8: The equity in other main entities
8.1 The equity in subsidiaries
8.1.1 The construction of the group
Place of Place Nature Holding proportion %
Subsidiaries Acquired method
operation of registration of business Directly Directly
TsannKuen Manufacture
Acquired through
(Zhangzhou)Enterprise Co., Zhangzhou Zhangzhou home electronic 75.00 75.00
incorporation
Ltd.(TKL) appliance
Manufacture Acquired through business
TsannKuen China (Shanghai)
Shanghai Shanghai home electronic 62.50 62.50 combination under common
Enterprise Co., Ltd. (TKS)
appliance control
TsannKuen (Zhangzhou) South Manufacture
Acquired through
Port Electronics Enterprise Co., Zhangzhou Zhangzhou home electronic 56.25 75.00
incorporation
Ltd. (TKN) appliance
TsannKuen (Zhangzhou) Secondary
Acquired through
Profession and Technology Zhangzhou Zhangzhou vocational 75.00 100.00
incorporation
Institute (LTC) education
Shanghai Canxing Trading Sales of home Acquired through
Shanghai Shanghai 56.25 75.00
Co.,Ltd (STD) electronic incorporation
Acquired through business
East Sino Development Limited. Investment,
Hong Kong Hong Kong 75.00 100.00 combination under common
(East Sino) Trading
control
Manufacture Acquired through business
Pt.StarComgistic Indonesia.
Indonesia Indonesia home electronic 75.00 100.00 combination under common
(SCI)
appliance control
Acquired through business
Orient Star Investments Limited Investment,
Hong Kong Hong Kong 75.00 100.00 combination under
(OSI) Trading
uncommoncontrol
8.1.2 Important non-wholly-owned subsidiary
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Profit and loss attributable Total amount of minority
Holding proportion of Dividends attributable to
Subsidiaries to minority equity during equity at the end of current
minority shareholders(%) minority shareholders
current year year
TKL 25.00 15,360,369.66 9,428,762.41 297,910,443.86
TKS 37.50 -2,976,260.70 0.00 34,436,989.41
SCI 25.00 -2,325,916.96 0.00 23,279,916.23
8.1.3 The main financial information of important non-wholly-owned subsidiary
Balance as at 31/12/2015
Subsidiaries Non-current Non-current
Current assets Total Current liabilities Total
assets liabilities
TKL 1,764,872,221.80 262,407,959.13 2,027,280,180.93 712,182,173.58 0.00 712,182,173.58
TKS 71,502,200.29 21,284,942.62 92,787,142.91 3,258,272.98 0.00 3,258,272.98
SCI 46,200,836.76 70,963,481.35 117,164,318.11 22,361,305.46 241,391.76 22,602,697.22
(Continued)
Balance as at 31/12/2014
Subsidiaries Non-current
Current assets Non-current assets Total Current liabilities Total
liabilities
TKL 1,750,566,275.80 261,075,742.61 2,011,642,018.41 719,878,940.06 391,500.00 720,270,440.06
TKS 76,107,385.62 24,641,697.87 100,749,083.49 3,283,518.35 0.00 3,283,518.35
SCI 54,107,897.96 65,287,362.80 119,395,260.76 21,021,950.25 227,466.78 21,249,417.04
(Continued)
Total amount during current year
Subsidiaries Total amount of Cash flow relating to
Revenues Net profit
comprehensive income operating activities
TKL 1,882,801,210.22 61,441,478.62 0.00 78,845,329.56
TKS 4,408,786.27 -7,936,695.21 0.00 -1,985,113.94
SCI 75,313,080.64 -9,217,941.00 0.00 -6,807,836.10
(Continued)
Total amount during prior year
Subsidiaries Total amount of Cash flow relating to
Revenues Net profit
comprehensive income operating activities
TKL 1,927,149,411.69 41,905,610.69 0.00 64,272,775.48
TKS 14,392,078.55 8,072,970.54 0..00 6,525,185.74
SCI 49,571,852.61 -16,866,398.58 0.00 1,752,667.18
8.2.1 The transactions which change the owner’s equity of subsidiaries, and through the transactions that the owner
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still control the subsidiaries
The subsidiary of the Company - TKL purchased 0.31% of capital which are held by Hong KongFillman investment
Co.,Ltd. of SCI through OSI, and leading to the proportionofthe shareholding of SCI by TKL increase to 100% for East
Sino.
8.2.2 The impact of the transaction forminority equity and attributable to the parent company of the owner's equity
Items SCI
Purchase cost consideration
Cash 294,243.20
Total 294,243.20
Less: the net assets of subsidiary calculated byproportion of equity share 234,100.77
Difference 60,142.43
Including: adjustment of capital reserves 60,142.43
Note 9: The risk associated with financial instruments
The main financial instruments of the Company including equity investments, loans, accounts receivable, accounts
payable, derivative financial instruments and etc., please see Note 6 for detail of related items. The risk associated
with financial instruments, and risk management policies which the company use to reduce these risks as described
below. The management of the Company manages and supervises the risks to ensure that the risks can be controlled
within a limited range.
9.1 The targets and policies of risks management
The target of risks management is to obtain the proper balance between the risks and benefits, to reduce the negative
impact that caused by the risk of the Company to the lowest level, and to maximize the benefits of shareholders and
other equity investors. Based on the targets of risk management, the basic strategy of the Company’s risk
management is to identify and analyze the risks which are faced by the Company, establish suitable risk tolerance
baseline and proceed the risk management, and supervise a variety of risks timely and reliably, and control the risk
within a limited range.
9.1.1 Market Risk
(1) Foreign exchange risk
Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations generally. The company bears the
foreign exchange risk primarily concerned with USD, JYP, IDR, EUR and HKD, in addition to the Company's
subsidiary TKL and SCI purchases and sales used by USD, the other main business activities of the Company used
by CNY. On 31 December 2015, except the following assets or liabilities are recorded in foreign currency, the others
are recorded in CNY. Foreign exchange risk of the assets and liabilities in foreign currencies may have an impact on
the Company's performance of operation.
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Items Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
Monetary funds 262,307,505.97 265,678,689.15
Accounts receivable 198,184,235.89 230,432,201.21
Other receivables 951,160.07 2,524,982.28
Accounts payable 49,683,220.84 64,913,478.77
Other payables 2,416,701.87 2,726,760.09
Short-term borrowing 0.00 61,190,000.00
The Group purchases foreign currency forward contracts to reduce the foreign exchange risk, and foreign currency
forward contracts shall be based on the amount of foreign currency assets.
(2) Interest rate risk - the risk of changes in cash flow
Due to the risk of changes in cash flows of a financial instrument is mainly concerned with the floating rate of bank
borrowings. The company's policy is to maintain a floating interest rate on the borrowings.
9.1.2. Credit Risk
That could cause the Company’s maximum credit risk of financial losses mainly from the losses of financial assets,
which are resulted by the other party of contract fails to fulfill the obligations, as at 31 December 2015.
In order to reduce credit risk, the Company set up a team responsible for determination of credit limits, credit
approvals and other monitoring procedures to ensure that the necessary measures be taken to recover overdue debts.
In addition, the Company reviews the recoverable amount of each individual trade debt at each balance sheet date to
ensure recognized fully provision for bad debts for the money cannot be recovered. So that the Company's
management believes the Company’s credit risk has been greatly reduced.
The Company's circulating funds deposited in banks which with high credit ratings, so that the lower credit risk of
circulating funds.
9.1.3 Liquidity risk
When managing liquidity risk, the Company’s management believes that maintaining adequate cash and cash
equivalents, and monitoring that at same time, in order to meet the needs of operation of the Company, and to reduce
the impact of fluctuations in cash flows. The management of the Company monitors the use of bank borrowings and
ensures to abide by loan agreements.
Note 10: Disclosure of the fair value
10.1 The fair value at the end of current year of assets and liabilities which are measured by fair value
146
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
The fair value at the end of current year
The first level The second level The third level
Items
measured by fair measured by fair measured by fair Total
value value value
1. Continuousmeasurement by fair value
The financial assets are measured by fair value
and the changes are recognized into current
profit or loss
1.1 Trading financial assets 0.00 0.00 0.00 0.00
1.1.1 Debt instruments investment 0.00 0.00 0.00 0.00
1.1.2 Equity instruments investment 0.00 0.00 0.00 0.00
1.1.3 Derivative financial assets 0.00 0.00 0.00 0.00
Total amount of assets continuous
0.00 0.00 0.00 0.00
measurement by fair value
2. Trading financial liabilities
including: Issued trading bonds 0.00 0.00 0.00 0.00
Derivative financial liabilities 8,462,500.00 0.00 0.00 8,462,500.00
Other 0.00 0.00 0.00 0.00
Total amount of liabilities continuous
8,462,500.00 0.00 0.00 8,462,500.00
measurement by fair value
10.2 Determined on the basis of continuous first level for fair value measurement of the market of project
Based on the identical assets or liabilities acquired on unadjusted quoted in an active market at balance sheet day.
Note 11: Related parties and related party transaction
11.1 Details of the parent
Type of Place of Legal
Parents Relationship Nature of business
incorporation registration representative
STAR COMGISTIC CAPITAL Ultimate holding Manufacture and sales
INC Taiwan Yang Wenfang
CO.,LTD. company electrical equipment
(Continued)
Shareholding Voting right Ultimate controller Organisation
Parents Registered capital
in the Company % in the Company % of the Company code
STAR COMGISTIC TWD 42.90 44.68 Wu Cankun 28986660
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
CAPITAL CO.,LTD. 1,343,000.00thousand
11.2 Subsidiaries
See Note 8.1 “The equity in subsidiaries”.
11.3 Details of other related parties
Other related parties Relationship Organisation code
Fillman Investment Limited Shareholder 16269694-000-07-15-4
TsannKuen Japan Co., Ltd. Same ultimate holding company 0105-01-021064
The company directly controlled by the key
Thermaster Electronic (Xiamen) Ltd. 61201968-5
management and closed family members
Xiamen TsannKuen Trading Co., Ltd. Same actual controller 58126129-1
The company directly controlled by the key
PT.ShenMin Sukabumi ――
management and closed family members
Xiamen Wuhuama Restaurant Management Co.,
Ultimate holding company have equity 31055232-9
Ltd.
TsannKuen Enterprise Co., Ltd. Same ultimate holding company 69568009
TsannKuen XianRui Intelligence& Smart Co., Ltd. Same ultimate holding company 54578057
11.4 Transactions with related parties
11.4.1 Transactions through purchase or sell goods and accept or supply services
11.4.1.1 The situation of purchases goods or accepts services
Content Total amount during current Total amount during
Related parties
of transaction year prior year
Thermaster Electronic (Xiamen) Ltd. Purchase of goods 39,403,392.81 38,114,488.57
STAR COMGISTIC CAPITAL CO., LTD. Purchase of goods 3,846,085.30 4,800,082.51
TsannKuen XianRui Intelligence& Smart Co., Ltd. Purchase of goods 1,873,930.86 0.00
Total 45,123,408.97 42,914,571.08
11.4.1.2 The situation of sells goods or rendering services
Content Total amount during current Total amount during
Related parties
of transaction year prior year
TsannKuen Japan Co., Ltd. Sale of goods 3,169,679.72 9,388,745.35
STAR COMGISTIC CAPITAL CO., LTD. Sale of goods 15,239,478.55 33,345,339.27
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Content Total amount during current Total amount during
Related parties
of transaction year prior year
Total 18,409,158.27 42,734,084.62
11.4.2 Lease between related parties
11.4.2.1 The Company is as the leasor
Lease rental recognized in Lease rental recognized in
Leasee Classification
current year prior year
Xiamen TsannKuen Trading Co., Ltd Property 850,000.00 1,500,000.00
Xiamen Wuhuama Restaurant Management Co., Ltd. Property 103,600.00 49,100.00
Total 953,600.00 1,549,100.00
11.4.3 Assets transfer, Debt restructuring between related parties
Total amount during current
Related parties Contentof transaction Total amount during prior year
year
TsannKuen Enterprise Co., Ltd. Sell the fixed assets 0.00 100,099.39
Total 0.00 100,099.39
Thermaster Electronic (Xiamen) Ltd. Purchase of the fixed assets 5,128.21 0.00
Xiamen TsannKuen Trading Co., Ltd. Purchase of the fixed assets 2,448,210.14 0.00
PT. SHENMIN SUKABUMI Purchase of the land 833,976.44 0.00
Fillman Investment Limited Purchase of the shareholding 294,243.20 0.00
Total 3,581,557.99 0.00
11.4.4 Other transactions with related parties
Total amount during Total amount during prior
Related parties Contentof transaction
current year year
TsannKuen XianRui Intelligence& Smart Co., Ltd. Procurement agency fee 70,664.56 0.00
STAR COMGISTIC CAPITAL CO., LTD. Procurement agency fee 166,330.64 218,201.11
TsannKuen XianRui Intelligence& Smart Co., Ltd. Outsourcing design fee 924,530.77 0.00
Total 1,161,525.97 218,201.11
11.5 The balance of payables and receivables among related parties
11.5.1 Receivables owed by related parties
Related party Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
149
2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Carrying amount Allowance for Carrying amount Allowance for bad
bad debt debt
Accounts receivable:
STAR COMGISTIC CAPITAL CO., LTD. 3,768,255.21 0.00 5,083,138.17 0..00
TsannKuen Japan Co., Ltd. 364,434.74 0.00 1,653,388.58 0.00
Total 4,132,689.95 0.00 6,736,526.75 0.00
11.5.2 Payables owed to related parties
Related party Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
Accounts payable:
Thermaster Electronic (Xiamen) Ltd. 11,011,858.27 10,554,478.81
TsannKuen XianRui Intelligence& Smart Co., Ltd. 518,485.45 0.00
STAR COMGISTIC CAPITAL CO., LTD. 31,418.63 761,114.88
Total 11,561,762.35 11,315,593.69
Advances from customers:
STAR COMGISTIC CAPITAL CO., LTD. 40,749.12 0.00
Xiamen Wuhuama Restaurant Management Co., Ltd. 9,060.00 0.00
Total 49,809.12 0.00
Other payable:
TsannKuen XianRui Intelligence& Smart Co., Ltd. 38,712.57 0.00
Xiamen Wuhuama Restaurant Management Co., Ltd. 48,200.00 59,100.00
TsannKuen Japan Co., Ltd. 3,476.28 104,052.63
Xiamen TsannKuen Trading Co., Ltd. 0.00 738,531.20
STAR COMGISTIC CAPITAL CO., LTD. 0.00 37,181.49
Fillman Investment Limited 99,435.20 0.00
Total 189,824.05 938,865.32
Note 12: Commitments and contingencies
12.1 Important commitments
Irrevocable lease contracts under performance and their financial effects as at the end of current year.
*Unit: CNY ten thousands
Items Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
The minimum lease payments of irrevocable operating lease
contracts:
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2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD
Items Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014
1st year after the balance sheet date 3,727 3,727
2nd year after the balance sheet date 3,727 3,727
3rd year after the balance sheet date 3,727 3,727
Subsequent years 126,711 130,438
Total 137,892 141,619
12.2 Contingencies
12.2.1 The subsidiary of the Company -TsannKuen (Zhangzhou) Enterprise Co., Ltd. (hereafter, TKL)signed the <
Product Supply Agreement> with XindaElectromechanics Co., Ltd. (hereafter, Xinda) on July 20, 2009. The validity of
the contract is from July 1, 2009 to June 30, 2012. Furthermore, on 1 January 2011, they signed the
Clauses>, 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 2 November 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 Xindaamounting 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, 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 cour 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 judgement on 15 August 2013 as follow: a. TKL should pay goods payments amount USD479,089.06 to plaintiff Xindawithin 15 days from the date on which the judgement becomes effective, equivalent to CNY3,071,535.78. b. Plaintiff Xinda and the third party BoLuoLianyuan industry Co., Ltd. (hereafter Lianyuan)shouldjointlypay the laquidated damage for CNY1,233,399.70toTKLwithin 15 days from the date on which the judgementbecomes 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 byTKL.After the first judgement, both parties appealed against the judgment. Up to the end of the reporting date, the financial statement of TKL included accounts payable to Xinda amounting to USD 479,089.06. As the second hearing was yet to be finalized, TKL unrecognized contingent assets CNY1,233,399.70 to Xinda. 12.2.2 The subsidiary of the Company - TsannKuen China (Shanghai) Enterprise Co., Ltd. (hereafter, TKS) signed the 151 2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD PlantLeasing contract with Shanghai Liangxin Industrial Co., Ltd. (hereafter, SHLX) at November 2007, and leased the plant (including plant affiliated land, ground buildings and related ancillary equipment, etc) located in No. 4407 Caoan Road Jiading District, Shanghai to SHLX. The real estate certificate of leasehold is Hu Fangdi Jia Zi (2006) No. 011945, the lease period is from November 2007 to November 2019, the purpose to the lessee for the use of legitimate factory and storage. The provisions of contract point out if the lessee need to build plant because of productionshould to obtain government and relevant authorities’agreements. Except to confiscate the deposit, the lessor can terminate the contract and does not have to undertake any responsibilityif the lessee sublease the leasehold, make improvement or addition to the leasehold without to obtain the written consent from lessor. TKS submitted the civil action to Shanghai Jiading District People's Courtby cause of action“the lessee SHLX decorated and subleased the leasehold to Shanghai Hujia Fruit Sales Limited Company (hereafter, SHHJ) without to obtain the written consent from lessor” on 28 October 2015, and required early termination of the Plant Leasing contract withSHLX, and required SHHJ to terminate constructionand to repristinate the leasehold. Up to the end of the reporting date, the civil action is still in process. Note 13: Post reporting date events The Company held the first meeting of Board of Directors of 2016 on 12 March 2016 that approved profit distribution plan for the year of 2015, to provide to all shareholder for every 10 shares distributed cash CNY1.00 (including tax) based on total of 185,391,680.00 shares as at the end of 2015, and the distribution profit amounting to CNY18,539,168.00. The profit distribution plan is pending resolution by the shareholders’ meeting. Note 14: Other significant events The company held the first meeting ofBoard of Directors of 2016 on 27 January 2016 to approval the proposal of transfer shareholdings of holding subsidiary TsannKuen China (Shanghai) Enterprise Co., Ltd. (TKS): the Company, holding subsidiary TsannKuen (Zhangzhou) Enterprise Co., Ltd.(TKL) and TsannKuen China (Shanghai) Enterprise Co., Ltd. (TKS) are accordance with integrated consideration of operation, business and investment structure, the Company decides to transfer all of its shareholdings of TKS (62.5%) to holding subsidiary TKL by CNY130 million. After the transfer activity there is no change of the scope of consolidation financial statements, however,the Company’s shareholding ratio of TKS decrease from the original 62.50% to 46.88%. Note 15: Notes to the main elements of the separate financial statement of the Company 15.1Accounts receivable 15.1.1 Disclosure by classification Items Balance as at 31/12/2015 Carrying amount Allowance for bad debt Book value 152 2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD Amount % of total Amount % of total Accounts receivable of individual significance subject to individually 0.00 0.00 0.00 0.00 0.00 assessment for impairment Accounts receivable portfolio subject to impairment by credit risk: Portfolio by age 23,013,044.53 95.39 128,400.47 0.56 22,884,644.06 Portfolio by related parties 1,112,512.12 4.61 0.00 0.00 1,112,512.12 Subtotal 24,125,556.65 100.00 128,400.47 0.53 23,997,156.18 Accounts receivable of individually insignificance subject to individually 0.00 0.00 0.00 0.00 0.00 assessment for impairment Total 24,125,556.65 100.00 128,400.47 0.53 23,997,156.18 (Continued) Balance as at 31/12/2014 Items Carrying amount Allowance for bad debt Book value Amount % of total Amount % of total Accounts receivable of individual significance subject to individually 0.00 0.00 0.00 0.00 0.00 assessment for impairment Accounts receivable portfolio subject to impairment by credit risk: Portfolio by age 29,724,857.96 99.66 1,290,294.12 4.34 28,434,563.84 Portfolio by related parties 100,627.02 0.34 0.00 0.00 100,627.02 Subtotal 29,825,484.98 100.00 1,290,294.12 4.33 28,535,190.86 Accounts receivable of individually insignificance subject to individually 0.00 0.00 0.00 0.00 0.00 assessment for impairment Total 29,825,484.98 100.00 1,290,294.12 4.33 28,535,190.86 15.1.1.1 Accounts receivable using the age analysis method for measurement of allowance for bad debt Balance as at 31/12/2015 Age Carrying amount Allowance for bad debt % of total Within 1 year 22,996,552.03 111,907.97 0.49 Include：1 to 90 days 22,256,593.78 0.00 0.00 153 2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD Balance as at 31/12/2015 Age Carrying amount Allowance for bad debt % of total 91 to 180 days 606,260.51 60,626.05 10.00 181 to 270 days 77,834.74 23,350.42 30.00 271 to 365 days 55,863.00 27,931.50 50.00 1 to 2 years 16,492.50 16,492.50 100.00 Total 23,013,044.53 128,400.47 0.56 15.1.1.2 Accounts receivable using the related party method for measurement of allowance for bad debt Balance as at 31/12/2015 Related parties Carrying amount Allowance for bad debt % of total Related parties 1,112,512.12 0.00 0.00 Total 1,112,512.12 0.00 0.00 15.1.2 Recognisation, recovery and reversal of allowance for bad debt Recovery and reversal of allowance for bad debts is CNY1,161,893.65 during current year. 15.1.3 Accounts receivable written off during the current year There is no accounts receivable written off during the current year. 15.1.4 Details of top five accounts receivable The total amount of top five accounts receivables which are summarized by the balance as at the end of current year is CNY22,678,335.90, accounting for the proportion of the total accounts receivable balance as at the end of current year is94.00%, the total amount of corresponding allowance for bad debts is CNY106,655.22. 15.2 Other receivable 15.2.1 Disclosure by classification Balance as at 31/21/2015 Items Carrying amount Allowance for bad debt Book value Amount % of total Amount % of total Other receivable of individual significance subject to individually assessment for 0.00 0.00 0.00 0.00 0.00 impairment Other receivable portfolio subject to impairment by credit risk: Portfolio by age 495,720.01 16.19 50,715.73 10.23 445,004.28 Portfolio by related parties 2,339,840.30 76.43 2,339,840.30 Subtotal 2,835,560.31 92.62 50,715.73 1.79 2,784,844.58 Other receivable of individually 226,000.00 7.38 0.00 0.00 226,000.00 154 2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD Balance as at 31/21/2015 Items Carrying amount Allowance for bad debt Book value Amount % of total Amount % of total insignificance subject to individually assessment for impairment Total 3,061,560.31 100.00 50,715.73 1.66 3,010,844.58 (Continued) Balance as at 31/21/2014 Items Carrying amount Allowance for bad debt Book value Amount % of total Amount % of total Other receivable of individual significance subject to individually assessment for 0.00 0.00 0.00 0.00 0.00 impairment Other receivable portfolio subject to impairment by credit risk: Portfolio by age 298,404.98 48.02 2,969.90 1.00 295,435.08 Portfolio by related parties 0.00 0.00 0.00 0.00 0.00 Subtotal 298,404.98 48.02 2,969.90 1.00 295,435.08 Other receivable of individually insignificance subject to individually 323,000.00 51.98 0.00 0.00 323,000.00 assessment for impairment Total 621,404.98 100.00 2,969.90 0.48 618,435.08 15.2.1.1 Other receivables using the age analysis method for measurement of allowance for bad debt Balance as at 31/12/2015 Age Carrying amount Allowance for bad debt % of total Within 1 year 459,905.01 14,900.73 3.24 Include：1 to 90 days 388,435.91 0.00 0.00 91 to 180 days 32,800.00 3,280.00 10.00 181 to 270 days 38,569.10 11,570.73 30.00 271 to 365 days 100.00 50.00 50.00 1 to 2 years 35,815.00 35,815.00 100.00 Total 495,720.01 50,715.73 10.23 15.2.1.2 Other receivables using the related party method for measurement of allowance for bad debt 155 2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD Balance as at 31/12/2015 Related parties Carrying amount Allowance for bad debt % of total Related parties 2,339,840.30 0.00 0.00 Total 2,339,840.30 0.00 0.00 15.2.2 Recognition, recovery and reversal of allowance for bad debt Recognition of allowance for bad debts is CNY47,745.83 during current year. There is no recovery and reversal of allowance for bad debts during current year. 15.2.3 Accounts receivable written off during the current year There is no accounts receivable written off during the current year. 15.3 Long-term equity investments 15.3.1 Disclosure by classification Carrying amount as at 31/12/2015 Carrying amount as at 31/12/2014 Items allowance for Net carrying allowance for Net carrying Carrying amount Carrying amount bad debts amount bad debts amount Invest to 1,116,460,573.74 130,646,542.91 985,814,030.83 1,116,460,573.74 130,646,542.91 985,814,030.83 subsidiaries Total 1,116,460,573.74 130,646,542.91 985,814,030.83 1,116,460,573.74 130,646,542.91 985,814,030.83 15.3.2 Investment for subsidiaries Carrying Increase Decrease amount of Carrying amount during during Carrying amount Impairment Items impairment as at 31/12/2014 current current as at 31/12/2015 allowance allowance as at year year 31/12/2015 TKS 194,545,872.18 194,545,872.18 130,646,542.91 TKL 921,914,701.56 921,914,701.56 Total 1,116,460,573.74 1,116,460,573.74 130,646,542.91 15.4 Operating revenues and costs Current year Prior year Items Revenue Costs Revenue Costs Revenue from principal operating activities 108,045,715.72 97,049,568.97 115,336,221.31 101,204,400.31 Revenue from other operating activities 19,809,138.12 4,368,557.00 22,789,282.42 4,498,975.68 Total operating revenue 127,854,853.84 101,418,125.97 138,125,503.73 105,703,375.99 15.5 Investment income 156 2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD Items Current year Prior year Long-term equity investment income under cost method 28,286,287.22 38,189,978.21 Total 28,286,287.22 38,189,978.21 Note 16: Supplementary information 16.1 Extraordinary gains or losses for current year Supplemental information Total amount Explanation Gains or losses arising from disposal of non-current assets 1,498,471.95 Tax repayments or waiving of taxes not officially authorized or not with proper authorization Government grants accounted for through profit or loss for the current reporting period (excl. 3,752,212.58 grants directly associated with the Company’s operations and subject to national quotas) Cost of monetary funds charged on non-financial institutions accounted for through profit or loss for the current reporting period Gains from the investment costs paid less than the acquirer’s interest in the fair value of the bargainor’s identifiable net assets( During acquire subsidiary、joint venture and associates) Gains or losses arising from non-monetary assets exchange Gains or losses arising from entrusted assets and investments Impairment allowances arising from force majeure, such as natural disasters Gain or loss arising from debt restructuring Restructuring expenses, such as employee settlement and relocation costs and costs of integration Gains or losses arising from transactions of which the prices are deemed unfair (the difference between the price and the fair value) Net profit or loss of subsidiaries acquired through business combination under common control from the beginning of the current reporting period to the combination dates. Gains or losses arising from contingent events not associated with the Company’s operating activities Gains or losses arising from changes in the fair values of financial instruments held for trading (excl. effective hedging instruments associated with the Company’s operating activities) or 9,471,741.12 disposal of financial instruments held for trading and available-for-sale financial assets (excl. effective hedging instruments associated with the Company’s operating activities) Recovery of impairment allowance for receivables subject to individual assessment for impairment Gains or losses arising from entrusted borrowings 157 2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD Supplemental information Total amount Explanation Gains or losses arising from changes in the fair values of investment property measured at fair value Impact of one-off adjustment required by tax laws, accounting standards and relevant regulations on the profit or loss for the current reporting period Revenue arising from entrusted operation Other non-operating revenue and non-operating expenses not listed above 2,854,865.72 Other gains or losses satisfying the definition of extraordinary gains or losses Subtotal 17,577,291.37 Less: Effect of corporate income tax 2,613,182.91 Less: Net amount attributable to minority interests (after tax) 3,708,038.86 Total 11,256,069.60 Note: Extraordinary gains or losses event use “+”express revenue and income, “-” express loss and expenditure. The Company recognized non-recurring categories of activities in accordance with the Explanatory Announcement regarding Information Disclosure by Publicly Listed Company No. 1 - Non-recurring Profit and Loss (ZhengjianhuiGonggao [2008] No.43). 16.2 Yield Rate of Net Assets and Earnings Per Share Weightedaverage yield rate of Earnings Per Share(Yuan per share) Profits for the reporting period net assets% Basic EPS Diluted EPS Net profits attributable to ordinary shareholders 6.31 0.20 0.20 Net profits attributable to ordinary shareholders 4.38 0.14 0.14 (excl. extraordinary gains or losses) 16.3 Reasons and details of extraordinary movement of significant items of financial statements 16.3.1 Held for trading financial assets measured by fair value amounts to CNY0.00 as at the end of current year, and CNY2,610,000.00decrease from prior yearmainly resulted fromCNY depreciation leadloss of forward foreign exchange contracts. 16.3.2 Advances to suppliers amounts to CNY16,864,224.91 as at the end of current year: 32.18% increase from prior year mainly resulted from increased advances of the electricity and wateras at the end of current year. 16.3.3 Interest receivable amounting to CNY1,135,305.55 as at the end of current year: 68.38%decrease from prior year mainly resulted from the decrease of significantly unexpired fixed-term bank deposit as at the end of current year. 16.3.4 Other receivables amounting to CNY49,490,650.89 as at the end of current year: 41.92% increase from prior year mainly resulted from the increase of outstanding receivable export tax rebates. 16.3.5 Inventories amounting to CNY264,090,949.73 as at the end of current year: 36.73% increase from prior year mainly resulted to meet the demands of non-shipped orders of goods. 158 2015 Annual Report of TSANN KUEN (CHINA) ENTERPRISE CO., LTD 16.3.6 Other current assets amounting to CNY89,858,232.9 as at the end of current year: 5.87 timesincrease from prior year mainly resulted from unduefinancial productswhich are purchase in prior year. 16.3.7 Other non-current assets amounting to CNY6,264,771.15 as at the end of current year: 2.25 times increase from prior year mainly resulted from advances to suppliers for mold and equipment. 16.3.8 Short-term borrowings amounts to CNY0.00 as at the end of current year: CNY61,190,000.00decrease from prior year mainly resulted from repayment of due foreign currency loans. 16.3.9 Held for trading financial liabilities are measured by fair value and the changes are recognized into current profits and losses amounting to CNY8,462,500.00 as at the end of current year: 1.14 times increase from prior year mainly resulted from CNY depreciation lead the loss of forward foreign exchange contracts. 16.3.10 Other payables amounting to CNY64,748,250.77 as at the end of current year: 21.80%increase from prior year mainly resulted from increase of quality assurance deposit from suppliers. 16.3.11 Deferred tax liabilities amounting to CNY241,391.76 as at the end of current year: 61.00%decrease from prior year mainly resulted from the changes of expected gains of loss of forward foreign exchange contracts. 16.3.12 Business tax and surcharges amounting to CNY6,915,701.14 for the year: 36.87% decrease from prior year mainly resulted from decrease of rent revenue and exempted tax. 16.3.13 Financial expenses amounting to CNY-35,475,102.02 for the year: 1.53 times decrease from prior year mainly resulted from CNY depreciation lead exchange gains from US dollar currency assets. 16.3.14 Impairment loss on assets amounting to CNY15,910,353.70 for the year: 69.29% increase from prior year mainly resulted from increase of allowance for bad debtforoverdue rent revenue. 16.3.15 Gains or losses from changes in fair value amounting to CNY-7,116,240.15 for the year: 68.32% decrease from prior year mainly resulted from decrease of investment income from settled forward foreign exchange contracts, and CNY depreciation lead loss of forward foreign exchange contracts. 16.3.16 Investment income amounting to CNY16,587,981.27 for the year: 41.99%decrease from prior year mainly resulted from CNY depreciation lead loss of forward foreign exchange contracts. 159
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