2026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
TSANN KUEN (CHINA) ENTERPRISE CO. LTD.2026 SEMI-ANNUALREPORT
(Unaudited)
August 2026
12026 Semi-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 seniormanagement staff of Tsann Kuen (China) Enterprise Co. Ltd. (hereinafter referred to as “theCompany”) warrant that this Report is factual accurate and complete without any false record
misleading statement or material omission. And they shall be jointly and severally liable for that.Mr. Cai Yuansong company principal and Mr. Wu Jianhua 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.All directors attended the board session for reviewing this Report.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.The Company plans not to distribute cash dividends or bonus shares or turn capital reserve into
share capital.English translation is for reference only. Should there be any discrepancy between the two versions
the Chinese version shall prevail.
22026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Contents
Section I. Important Statements Contents & Terms .....2
Section II. Company Profile & Financial Highlights... 6
Section III. Management Discussion & Analysis ....... 9
Section IV. Corporate Governance & Environmental & Social Responsibility . 22
Section V. Significant Events .......................24
Section VI. Change in Shares & Shareholders .........34
Section VII. Bonds ..................................37
Section VIII. Financial Report ..................... 38
32026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Documents Available for Reference
(I) The financial statements signed and sealed by the company principal and the head of the
accounting work & the accounting division (head of accounting) of the Company.(II) The originals of all the Company’s documents and announcements which were disclosed on the
website designated by the CSRC in the reporting period.(III) The original of this Report carrying the signature of the Board Chairman.(IV) The aforesaid documents are available at the Board Secretary’s Office of the Company.
42026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Terms
Term Refers to Contents
Xiamen Tsann Kuen TKC-B Company
the Company TKC Refers to Tsann Kuen (China) Enterprise Co. Ltd.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.East Sino Refers to East Sino Development Limited
SCI Refers to Pt.Star Comgistic Indonesia
Orient Star Investments Refers to Orient Star Investments Limited
SCPDI Refers to Pt.Star Comgistic Property Development Indonesia
TKW Refers to Xiamen Tsannkuen Property Services Co. Ltd.TKB Refers to Xiamen Yipengxin Trading Co. Ltd.TKCI Refers to Xiamen Tsannkuen Investment Co. Ltd.RMB Refers to RMB YUAN
52026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Section II. Company Profile & Financial Highlights
I.Basic information about the Company
Stock name TKC-B Stock code 200512
Stock exchange Shenzhen Stock Exchange
Chinese name of the
Company 厦门灿坤实业股份有限公司
Abbr. of the Chinese
name of the Company 闽灿坤
English name of the
Company TSANNKUEN(CHINA) ENTERPRISE CO. LTD
Abbr. of the English
name of the Company TKC
Legal representative of
the Company Cai Yuansong
II.Contact information
Board Secretary Securities Representative
Name Sun Meimei Dong Yuanyuan
TSANN KUEN Industrial Park TSANN KUEN Industrial Park
Contact address Taiwanese Investment Zone Zhangzhou Taiwanese Investment ZoneFujian Province P.R.China Zhangzhou Fujian Province
P.R.China
Tel. 0596-6268161 0596-6268103
Fax 0596-6268104 0596-6268104
E-mail mm_sun@tk-eupa.com yy_dong@tk-eupa.com
III. Other information
1.Ways to contact the Company
Did any change occur to the registered address office address and their postal codes website address and email
address of the Company during the reporting period
□ Applicable□ Inapplicable
No change occurred to the said information in the reporting period which can be found in the 2025 Annual
Report.
2. About information disclosure and where this Report is placed
Did any change occur to information disclosure media and where this Report is placed during the reporting period
□ Applicable□ Inapplicable
The stock exchanges website and the name and website of the media where the Company disclosed the Report as
well as the location where the Report was filed remained unchanged during the reporting period. The said
information can be found in the 2025 Annual Report.
62026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
3. Other relevant information
Did any change occur to other relevant information during the reporting period
□ Applicable□ Inapplicable
IV. Accounting and financial highlights
Does the Company adjust retrospectively or restate accounting data of previous years
□ Yes□ No
Unit: RMB Yuan
Item Reporting period Same period of last year YoY +/-（％）
Operating revenue 581312325.69 652773296.39 -10.95
Net profit attributable to
shareholders of the Company -28710803.70 16000988.65 -279.43
Net profit attributable to
shareholders of the Company
before extraordinary gains and -28225978.81 13521688.15 -308.75
losses
Net cash flows from operating
activities -48396052.26 -30246868.47 -60.00
Basic EPS (RMB Yuan/share) -0.15 0.09 -266.67
Diluted EPS (RMB
Yuan/share) -0.15 0.09 -266.67
Weighted average ROE (%) -0.03 1.44 -1.47
Item As at the end of theReporting period As at the end of last year +/- (%)
Total assets 2340635416.50 2454688092.64 -4.65
Net assets attributable to
shareholders of the Company 1037526371.31 1089608939.40 -4.78
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 the disclosure of this Report (share) 185391680
Fully diluted EPS based on the latest total shares:
Dividends paid to preference shareholders 0.00
Fully diluted EPS based on the latest total shares (RMB Yuan/share) -0.15
V. 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
72026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards
□ Applicable□ Inapplicable
VI. Items and amounts of extraordinary gains and losses
□Applicable □ Inapplicable
Unit: RMB Yuan
Items Amount Description
Losses on disposal of non-current assets (inclusive of impairment allowance write-offs)
Government grants recognised in current profit or loss (except government grants
that is closely related to operations and determined based on a fixed scale according 139290.87
to the national unified standard)
Gains /(losses) arising from changes in fair value of held-for-trading financial assets
and held-for-trading financial liabilities during the holding period and investment
income arising from disposal of held-for-trading financial assets held-for-trading -1849289.63
financial liabilities and assets classified as held for sale except effective hedging
transactions related to the Company's principal activities
Funds occupation fee recognised in current profit or loss from non-financial companies
Gains /(losses) on entrusted investments or asset managements
Gains /(losses) arising from entrusted loans to other entities
Provision for impairment of each asset due to force majeure such as a natural
disaster
Reversal of provision for impairment of accounts receivable tested for impairment
individually
The excess of attributable fair value of net identifiable assets over the consideration
paid for subsidiaries associates or joint ventures recognised by the Company
Net gains /(losses) of subsidiaries arising from business combination under common
control from the beginning of the reporting period till the combination date
Gains/(losses) generated from non-monetary asset exchange
Gains /(losses) on debt restructuring
Corporate restructuring charge such as expenditure for staff resettlement
and integration cost
Impact of one-off adjustment to current profit or loss based on the requirements of
taxation and accounting laws and regulations
Share-based payment expenses recognized at one time due to cancellation or
modification of the equity incentive plan
For cash-settled share-based payments gains or losses arising from changes in the fair
value of employee remuneration payable after the vesting date
Gains /(losses) arising from changes in fair value of investment properties
adopting fair value model for subsequent measurement
Gains /(losses) from excess of fair value in non-arm’s length transactions
Gains /(losses) arising from contingencies other than those related to principal
activities of the Company
Custody fee income from entrusted operations
Other non-operating income/expenses except for items mentioned above 915230.22
Other extraordinary gains/(losses) defined
Less: Income tax effects -123876.42
Non-controlling interests effects (after tax) -186067.23
Total -484824.89
Other gain and loss items that meet the definition of an extraordinary gain/loss:
82026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
□ Applicable□ Inapplicable
Explain the reasons if the Company classifies as a recurrent gain/loss item any extraordinary gain/loss item
mentioned in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their
Securities to the Public—Extraordinary Gains and Losses
□ Applicable□ Inapplicable
Section III. Management Discussion &Analysis
I. Main business during the reporting period
Develop produce and manufacture small home appliances of gourmet cooking home helper tea and coffee;
design and manufacture molds related to the above products sell the products at home and abroad and
provide after-sales service.II. Core competitiveness analysis
During the reporting period the core competitiveness of the Company remained stable and was further
strengthened which is mainly reflected in the following aspects:
I. Deep technical accumulation and continuous innovation
Forty-eight years of experience in the R&D and manufacturing of small household appliances has enabled
the company to accumulate profound technological heritage in the industry. According to National
Enterprise Technology Center the company has established a complete R&D technical service system and a
complete innovation chain. During the reporting period the company obtained 26 R&D patents (including 7
invention patents 10 utility model patents and 9 appearance patents) and 25 new patents were successfully
accepted (including 3 invention patents). The patent layout covers product structure core components
intelligent control and other dimensions further consolidating the company's technological leadership.II. Global Synergistic Innovation and Ecosystem Construction
The company maintains close interaction with the world's major well-known brands and customers through
co-creation model of “collaborative design joint development and strategic cooperation” to capture market
demand accurately and enhance the added value of products. At the same time company continues to
promote the upgrading and construction of Tsann Kuen Industrial Park improve the supply chain strategic
cooperation supporting ecosystem enhance the efficiency of industrial chain synergy reduce the
92026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
comprehensive operating cost and enhance the overall competitiveness.III. Dual-cycle market strategy and brand advantages
The company implements the strategy of “double cycle of global market and domestic market” stabling the
global international market while seizing the trend of domestic consumption upgrade actively and by
establishing a joint venture with a domestic third-party enhancing efforts to expand the domestic market.Relying on accurate market positioning and online and offline channel layout the company effectively
responds to self-brand influence market competition and continuously improves market share and brand
premium.IV.Product value expansion and intellectual property technology barriers
The company focuses on the research and development direction of product function intelligent home
appliances and scene IOT application focusing on the three dimensions of “appearance quality and value”
creating high-value-added products that combine aesthetic design intelligent interaction green energy
conservation and health attributes to meet diversified and personalized consumer needs and form
differentiated competitive advantages. At the same time the company attaches great importance to the
protection of intellectual property rights and has established a perfect management system. 16 new patents
were issued during the reporting period. Through continuous patent layout and technological innovation the
company effectively builds technical barriers soliding foundation for sustained and healthy development in
the future.To summarize the core competitiveness of the company remained stable and was further strengthened
during the reporting period laying a solid foundation for the sustainable and healthy development in the
future.III. Main business analysis
During this reporting period the Company realized total profit of -RMB46.53 million a decrease of 316.4%
compared with the same period of last year; realized net profit attributable to shareholders of the listed
company of -RMB28.71 million a decrease of 279.43% compared with the same period of last year; and the
basic earnings per share was -RMB0.15 a decrease of RMB0.24 compared with the same period of last year.The change of the above indicators is mainly due to the impact of weak international market demand during
102026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
the repoting period when revenue decreased. And at the same time the price of materials is still at a high
level the competition among the same industry intensified and price wars among products reduced the
profit margin of orders. In addition the company mainly exports and the appreciation of the RMB against
the US dollar led to an increase in exchange losses which had an adverse impact on the company's net profit.
1. YoY changes in major financial data
Unit: RMB Yuan
Item Reporting period Same period of lastyear +/-% Main reasons for changes
Mainly as a result of the decrease
Operating revenue 581312325.69 652773296.39 -10.95 in foreign sales orders during the
period;
Mainly as a result of the decrease
Operating cost 536227938.75 562880349.18 -4.74 in main operating revenues during
the period;
Selling expenses 10970441.79 11706746.06 -6.29
General and administrative
expenses 41144190.82 34691484.86 18.60
Mainly as a result of the decrease
Finance costs 13566565.85 2354891.68 476.10 in exchange evaluation losses
during the period;
Mainly as a result of the decrease
Other income 139290.87 1808128.78 -92.30 in government subsidies received
during the period;
Mainly as a result of the decrease
Investment income 10271121.42 16576429.63 -38.04 in interest income of fixed deposits
during the period;
Mainly as a result of same period
of last year the increase in losses in
Gains/ (losses) from changes in the year 2025 due to the reversal of
fair values -89300.00 -942083.33 90.52 gains on financial products of
RMB940000 at the end of the year
2024;
Mainly as a result of the recovered
payment of goods to some
customers in the current period
Impairment loss of credit 583571.07 -2109067.68 127.67 which required the reversal of the
impairment of accounts receivable
in accordance with the accounting
policy;
Gains from disposal of assets 0.00 1265588.90 -100.00 Mainly as a result of the decreasein gain on disposal of assets;
Mainly as a result of clearing
Non-operating income 1155943.73 679417.25 70.14 overdue other payables in the
current period;
Mainly as a result of the increase in
Non-operating expenses 240713.51 74055.07 225.05 fine expenses of subsidiary SCI in
the current period;
Mainly as a result of the decrease
Income tax expenses -5986255.04 1869934.96 -420.13 in income tax provision TKL in the
current period;
Research and development
investments 29429138.41 29941757.03 -1.71
Net cash flows from operating
activities -48396052.26 -30246868.47 -60.00
Mainly as a result of decrease in
tax rebates in the current period;
112026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Item Reporting period Same period of lastyear +/-% Main reasons for changes
Mainly as a result of the decrease
Net cash flows from investing in net outflow of bank time
activities 97710304.55 -11056381.12 983.75 deposits for the purpose ofobtaining interest income during
the period;
Net cash flows from financing Mainly as a result of the decrease
activities -24826183.85 -10676069.84 -132.54 in short-term borrowings duringthe period;
Decrease in net outflow of bank
Net increase / (decrease) in cash
and cash equivalents 22481775.38 -52657661.45 142.69
time deposits for the purpose of
earning interest income during the
period.Major changes to the profit structure or sources of the Company during the reporting period:
□ Applicable□ Inapplicable
No such cases.
2. Breakdown of operating revenues
（1）Breakdown of main business revenues
Unit: RMB Yuan
Reporting period Same period of last year
Item
Amount In total operating Amount In total operating
+/-%
revenues (%) revenues (%)
Total operating
revenues 581312325.69 100.00 652773296.39 100.00 -10.95
By segments
Small home
appliance 581312325.69 100.00 652773296.39 100.00 -10.95
manufacturing
By products
Cooking utensils 342337353.91 58.89 392599119.51 60.14 -12.80
Everyday home
appliances 161051016.46 27.70 193015583.40 29.57 -16.56
Tea and coffee
makers 53647153.01 9.23 41387776.71 6.34 29.62
Other 24276802.31 4.18 25770816.77 3.95 -5.80
Total 581312325.69 100.00 652773296.39 100.00 -10.95
By areas
Americas 241908928.50 41.61 246494836.05 37.76 -1.86
Europe 200768740.58 34.53 227996576.35 34.93 -11.94
Asia 131654283.51 22.65 171919397.77 26.34 -23.42
Australia 5552437.73 0.96 5378593.86 0.82 3.23
Africa 1427935.37 0.25 983892.36 0.15 45.13
Total 581312325.69 100.00 652773296.39 100.00 -10.95
122026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
(2) Segments products or areas contributing over 10% of operating revenues or profit
□Applicable □ Inapplicable
Unit: RMB Yuan
Operating Operating cost: Gross profit
Item Operating revenue Operating cost Gross profit
revenue: +/-% +/-% from the margin: +/-%
margin (%) from the same same period of from the sameperiod of last last year period of lastyear year
By segments
Small home
appliance 581312325.69 536227938.75 7.76 -10.95 -4.74 -6.01
manufacturing
Total 581312325.69 536227938.75 7.76 -10.95 -4.74 -6.01
By products
Cooking utensils 342337353.91 328986243.01 3.90 -12.80 -5.55 -7.38
Everyday home
appliances 161051016.46 157789686.33 2.03 -16.56 -9.02 -8.12
Tea and coffee
makers 53647153.01 42745953.52 20.32 29.62 18.31 7.62
Other 24276802.31 6706055.89 72.38 -5.80 34.34 -8.25
Total 581312325.69 536227938.75 7.76 -10.95 -4.74 -6.01
By areas
Americas 241908928.50 236904466.73 2.07 -1.86 5.14 -6.52
Europe 200768740.58 184866289.86 7.92 -11.94 -7.21 -4.70
Asia 131654283.51 108475624.93 17.61 -23.42 -18.40 -5.06
Australia 5552437.73 4684420.56 15.63 3.23 7.52 -3.37
Africa 1427935.37 1297136.67 9.16 45.13 25.57 14.15
Total 581312325.69 536227938.75 7.76 -10.95 -4.74 -6.01
If the statistical caliber of the company's main business data is adjusted during the reporting period the
company's main business data for the most recent period is adjusted according to the caliber at the end of the
reporting period.□ Applicable□ Inapplicable
IV. Analysis of non-core business
□Applicable □ Inapplicable
Unit: RMB Yuan
Items Amount Ratio to the total Notes of the causes Recurringprofits amount (%) or not
Other income 139290.87 -0.30 Mainly government grants related to production andoperations No
Investment income 10271121.42 -22.08 Mainly attributable to interest income from fixeddeposits No
Gains from changes -89300.00 0.19 Mainly attributable to forward foreign exchangein fair values evaluation losses No
132026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Items Amount Ratio to the totalprofits amount (%) Notes of the causes
Recurring
or not
Mainly due to recovered payment of goods to some
Impairment loss of 583571.07 -1.25 customers in the current period which required thecredit reversal of the impairment of accounts receivable in No
accordance with the accounting policy.Impairment loss of
asset -3451411.63 7.42
Loss on decline in value of inventories and
impairment loss on fixed assets. No
Non-operating Mainly as a result of clearing overdue other payables
income 1155943.73 -2.48 in the current period. No
Non-operating Mainly as a result of fines incurred by a subsidiary
expenses 240713.51 -0.52 Indonesia Canstar. No
V. Assets and liabilities
1. Significant changes in asset composition
Unit: RMB Yuan
At the end of the reporting
period At the end of last year
As a As a Change inItem percentage Reason for any significant
Amount percentage percentage changeof total Amount of total (%)
assets (%) assets (%)
Cash and cash
equivalents 483329551.38 20.65 460847776.00 18.77 1.88
Accounts receivable 135141611.88 5.77 139969323.13 5.70 0.07
Mainly as a result of the
Other receviables 13969590.88 0.60 21608192.98 0.88 -0.28 decrease in export tax rebates
receivable during the period;
Inventories 176220707.66 7.53 193718061.45 7.89 -0.36
Mainly as a result of the
decrease in the principal of
Debt investment 50879812.96 2.17 208602148.68 8.50 -6.33 one-year or longer-term
deposits that have matured
during the period;
Long-term equity
investment 6124949.19 0.26 7884938.82 0.32 -0.06
Investment properties 18224358.55 0.78 18560118.67 0.76 0.02
Fixed assets 169890505.73 7.26 162861863.08 6.63 0.63
Construction in
progress 12040385.08 0.51 14770911.87 0.60 -0.09
Right-of-use assets 335405671.43 14.33 340387210.22 13.87 0.46
Mainly as a result of operating
losses from TKL in the current
period. After the management
assessment it was determined
Deferred tax assets 25927502.14 1.11 15842586.55 0.65 0.46 that the losses could be
deducted before the tax law
allows carry-forward and thus
was recognized as deferred
income tax assets.Mainly as a result of prepaid
Other non-current
assets 775954.82 0.03 6273764.94 0.26 -0.23
equipment and acceptance
inspection at the beginning of
the current period;
Trading financial
liabilities 89300.00 0.00 0.00 0.00 0.00
Mainly as a result of forward
exchange contract evaluation
142026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
At the end of the reporting
period At the end of last year
As a As a Change inItem Reason for any significant
Amount percentage percentage
percentage change
of total Amount of total (%)
assets (%) assets (%)
losses in the current period;
Contract liabilities 36532115.76 1.56 23617663.18 0.96 0.60 Mainly as a result of increasein customer contract liabilities;
Non-current liabilities Mainly as a result of the
maturing within one 7377185.32 0.32 476624.15 0.02 0.30 increase in the recognition of
year one-year lease liabilitiesduring the period.Lease liabilities 405542937.14 17.33 401559564.79 16.36 0.97
Mainly as a result of the
Other comprehensive
income 3454629.88 0.15 8287226.27 0.34 -0.19
decrease in the foreign
currency translation
adjustment during the period;
2. Main assets overseas
□Applicable □ Inapplicable
Unit: RMB Yuan
Measures
taken to In the Any major
Asset Nature Value Location Operation protect Earnings Company’sstatus asset net assets
impairment
risk or not
safety (%)
Small home
SCI Investment 223397199.84 Indonesia appliance Periodic -12070344.30 21.53 No
manufacturing review
Other
information N/A
3. Assets and liabilities measured at fair value
□Applicable □ Inapplicable
Unit: RMB Yuan
Profit/loss on Cumulative
fair value fair value Impairment PurchasedOpening provided in in this Sold in thisItem changes in changes Other Closingbalance this reporting charged to this reporting reporting
reporting
period changes balance
period equity period period
Financial assets
1. Held-for-trading financial assets
(excluding derivative financial 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
assets)
2. Derivative financial assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3. Other debt investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4. Other equity instrument
investments 40000.00 0.00 0.00 0.00 0.00 0.00 0.00 40000.00
5. Other non current financial assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Subtotal of financial assets 40000.00 0.00 0.00 0.00 0.00 0.00 0.00 40000.00
Investment properties 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Productive biological assets 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Others 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
152026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Profit/loss on Cumulative Impairment Purchased
Item Opening
fair value fair value Sold in this
balance changes in changes
provided in in this
this reporting reporting reporting
Other Closing
this reporting charged to period changes balance
period equity period period
Total of the above 40000.00 0.00 0.00 0.00 0.00 0.00 0.00 40000.00
Financial liabilities 0.00 89300.00 0.00 0.00 0.00 0.00 0.00 89300.00
Any significant changes in the major assets’ measurement attributes of the Company in the reporting period
□ Yes□ No
4. Restricted asset rights as of the end of the reporting period
□ Applicable□ Inapplicable
VI. Investments made
1. Total investments made
□Applicable □ Inapplicable
Unit: RMB Yuan
Investment in this reporting period Investment in last reporting period Variation range (%)
0.009800000.00-100
2. Significant equity investments made in this
reporting period
□ Applicable□ Inapplicable
3. Significant non-equity investments ongoing in this reporting period
□ Applicable□ Inapplicable
4. Financial investments
(1) Securities investments
□ Applicable□ Inapplicable
No such cases in the reporting period.
(2) Investment in derivative financial instruments
□Applicable □ Inapplicable
162026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Unit: RMB’0000
The
proportion
of
Gains or investment
losses from Equity from Purchase Sell during amount to
Types of derivative investment Initial Opening changes in cumulative during the the Closing theinvestment amount fair value in changes in reporting reporting amount company's
the current fair value period period net assets at
period the end of
the
reporting
period %
Forward exchange 2028.29 0.00 -8.93 0.00 2028.29 0.00 2028.29 1.95
Total 2028.29 0.00 -8.93 0.00 2028.29 0.00 2028.29 1.95
Explanation of the accounting policies and
specific principles for hedging operations during
the reporting period as well as an account of During the reporting period the company's accounting policies and specific principles for derivative instruments
whether there have been any significant changes remained largely unchanged compared to the previous reporting period.compared to the previous reporting period
Explanation of actual gains or losses during the The loss amount affected by the partially settled portion of the investment in derivatives during the reporting period
reporting period was RMB 0.00 while the loss amount assessed for the un-settled portion was RMB 89300.Explanation of the effectiveness of hedging The company conducts derivative trading business by using the means of hedging to avoid and prevent exchange rate
fluctuation risks which is conducive to avoiding exchange rate fluctuation risks and enhancing financial stability.Source of funds for derivative investment Self-owned funds
172026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Risk analysis and control measures for derivative 1. Risk analysis of derivative positions: The difference between the contracted exchange rate on the delivery date and
positions during the reporting period (including the market exchange rate on the delivery date results in exchange gains or losses.but not limited to market risk liquidity risk credit 2. Control measures:
risk operational risk legal risk etc.) (1) Principle: All financial derivative operations of company are for hedging purposes and do not engage in non-
hedging trading operations. The company shall not engage in complex derivative transactions beyond the actual
business needs and shall not conduct derivative speculation under the pretext of hedging. The total amount of hedging
contracts of the company shall not exceed the net exposure position of the existing assets and liabilities plus the net
exposure position of assets and liabilities generated by the company within the next year.
(2) Position requirements: Personnel participating in the investment should fully understand the risks of derivative
investment and strictly implement the business operation and risk management system of derivative investment.
(3) Operating norms: Before conducting derivative investment the company should reasonably allocate professional
personnel such as investment decision-makers business operators and risk controllers and should compare and
inquire among multiple markets and various products. The company should strictly control the types and scale of
derivative investment and preferentially use on-exchange traded derivatives.
(4) Regular assessment: Derivative investment should be evaluated at least twice a month. The assessment report
should be sent to the senior management authorized by the board of directors. The annual investment total amount
report of financial derivatives of the company should be submitted to the board of directors once a year. The actual
trading situation of derivative products should be reported to the latest board of directors after the fact. Each subsidiary
of the company only needs to submit it to the board of directors of the subsidiary.
(5) Stop-loss point: The upper limit of loss for a single derivative investment and the total loss for all investments shall
not exceed 20% of the total investment amount.
(6) Audit system: The company's audit department should audit the procedures followed in derivative commodity
transactions on a monthly basis and prepare a report to be delivered to the relevant units.The situation of price changes or fair value (1) The loss amount affected by the partially settled portion of the investment in derivatives during the reporting period
fluctuations of invested derivatives during the was RMB 0.00 while the loss amount assessed for the un-settled portion was RMB 89300.reporting period the analysis of the fair value of (2) The original signing bank provides a bank's estimated table of the exchange rate for the current period of the signed
derivatives should disclose the specific methods but not yet expired forward settlement transactions on the last trading day of each month.used and the setting of relevant assumptions and (3) The difference between the estimated table exchange rate * currency of the unexpired signed amount in the current
parameters month and buying currency was recognized as gains or losses from changes in fair values
Litigation situation (if applicable) None
The disclosure date of the board announcement
for derivative investment approval 2026-3-10
The disclosure date of the shareholders' meeting
announcement for derivative investment approval 2026-5-23
182026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
5. Use of funds raised
□ Applicable□ Inapplicable
No such cases in the reporting period.VII. Sale of major assets and equity interests
1. Sale of major assets
□ Applicable□ Inapplicable
2. Sale of major equity interests
□ Applicable□ Inapplicable
VIII. Main controlled and joint stock companies
□Applicable □ Inapplicable
Main subsidiaries and joint stock companies with over 10% effect on the Company’s net profit
Unit: RMB Yuan
Company Relationshipwith the Main business Registered Operatingname Company scope capital
Total assets Net assets revenues Operating profit Net profit
Small home
TKL Subsidiary appliance USD160million 2100457231.71 1275197227.07 513515711.53 -47435805.29 -36195857.84manufacturing
SCI Sub- Small home
subsidiary appliance USD530million 223397199.84 185465037.20 81177318.59 -11864879.78 -12070344.30
manufacturing
Subsidiaries obtained or disposed in this reporting period
□Applicable□ Inapplicable
Company name Way of gaining and disposal Influence on overall production operation andsubsidiary performanc
Xiamen Yipengxin Trading New established The impact on the net profit of listed company isCo. Ltd. RMB4126.11 during the reporting period
Xiamen Tsannkuen The impact on the net profit of listed company is -
Investment Co. Ltd. New established RMB3260.43 during the reporting period
IX. Structured bodies controlled by the Company
□ Applicable□Inapplicable
192026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
X. Risks facing the Company and countermeasures
1.Risk of global economic environment and intensified market competition
Risk Description:In the first half of 2026 the global economic and trade environment was characterized by three
main features: a complex and volatile macro environment an accelerating restructuring of the global trade
landscape and intensified industry competition. Geopolitical tensions and the resurgence of trade protectionism
have led many countries to strengthen non-tariff barriers reshaping the global trade landscape. Meanwhile
competition in the small home appliance industry has entered a critical phase driven by the strong rise of
domestic brands and the accelerated entry of cross-sector enterprises. Furthermore affected by sluggish demand
in Europe and the United States the industry is facing significant pressure from demand fluctuations.Countermeasures: The company adheres to the global strategy accelerates the dispersion of production capacity
and avoids risks associated with single-plant policies. In the market segment it deeply penetrates the basic market
of Europe and the United States while vigorously expanding emerging markets such as Southeast Asia the
Middle East and Russia to reduce reliance on a single market. At the product level it strengthens the synergy of
technology scenarios and emotional value deepens cooperation with global leading brands and enhances
product value. At the same time it accelerates the construction of domestic brand autonomy through precise
positioning and full-channel layout to enhance brand penetration rate and establish competitive advantages.
2. Risk of exchange rate fluctuations
Risk Description: The company's products are mainly for export and the main settlement currency is the US
dollar. In the first half of 2026 due to expectations of the Federal Reserve's interest rate cuts and export surpluses
the RMB appreciated continuously against the US dollar. Exchange rate fluctuations will directly affect the
conversion amount of the company's export revenue and the exchange gains and losses of foreign currency assets
exerting certain pressure on the operating performance.Countermeasures: The company has established an exchange rate risk neutral management mechanism closely
monitoring the exchange rate trend and flexibly using financial derivative tools such as forward settlement and
sale options etc. for hedging to lock in exchange rate risks. At the same time it continuously optimizes the
structure of foreign currency assets and liabilities increases the proportion of natural hedging and minimizes the
impact of exchange rate fluctuations on the profit level to the greatest extent.
3. Risk of raw material price fluctuations
Risk description: In the first half of 2026 due to geopolitical conflicts in the Middle East and global supply-
demand imbalances the prices of bulk metals such as copper and aluminum fluctuated at high levels while the
prices of petroleum derivatives such as plastics rose significantly year-on-year. The cost of raw materials accounts
for a high proportion of the operating costs of small household appliances and a significant increase in prices will
continue to squeeze the company's profit margins.Countermeasures: The company has established a mechanism for monitoring and warning of raw material prices
and conducts strategic procurement and inventory adjustment in a timely manner; promotes supply chain
202026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
diversification to enhance bargaining power. In the R&D end through product platformization and
modularization design the commonality of components is improved and alternative materials are actively
researched; in the policy end fully utilize the tariff reduction policy of RCEP and take multiple measures to
hedge against the pressure of rising costs.
4.Risk of rising labor costs and structural shortage
Risk description: As the "difficulty in recruiting workers" persists in the manufacturing industry labor costs have
been increasing year by year. Especially the salary pressure on front-line operators and technical workers has
intensified which may have a negative impact on the company's profitability and production stability.Countermeasures: The company accelerates the implementation of intelligent manufacturing and lean automation
transformation promotes modular procurement and labor-saving production and improves the efficiency per
person. At the same time it continuously improves the production working environment perfects the retention
bonus policy and employee welfare system strengthens corporate culture construction and enhances employee
recognition and sense of belonging effectively reducing the turnover rate.
5. Risk of tightening of envirmental protection and low-carbon policies
Risk Description: With the advancement of the country's "carbon neutrality" goal and the implementation of
global green trade barriers (such as the EU carbon tariff and the new energy efficiency labeling standards) the
compliance costs for enterprises in pollution prevention carbon footprint certification and green design have
been continuously increasing.Countermeasures: The company has established green and low-carbon as its core development strategy
systematically promoting green design green manufacturing and the construction of a green supply chain. It
integrates low-carbon concepts at the research and development stage continuously increasing investment in
energy-saving equipment and environmentally friendly new materials; strengthens greenhouse gas emission
control and reduction actions at the production end; actively benchmarks against the latest international energy
efficiency standards at the product end accelerating product green iterations and effectively transforming
external compliance pressure into a differentiated advantage for participating in global green competition
Ⅺ.Development and implementation of market value management systems and
valuation enhancement plans
Whether the company has a market value management system in place.□ Applicable□ Inapplicable
Whether the company has disclosed plans for valuation enhancement.□Applicable □ Inapplicable
In order to realize an increase in the value of the Company's investment and improve the ability to return to
shareholders the Company will take the following specific measures:
1. Focusing on the main business improving the quality of operation and company performance
2. Implementing a stable cash dividend policy and effectively rewarding investors
212026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
3. Strengthening investor relations management and information disclosure quality
The board of directors believes that the "Valuation Enhancement Plan" disclosed by the company on March 11
2025 is in line with the actual situation of the company and there are no circumstances that require improvement.
This "Valuation Enhancement Plan" will be continued to be used in subsequent years.XII. "Quality and Return Dual Improvement" Action Plan Implementation Status
Whether the company has disclosed an announcement for its "Quality and Return Dual Improvement" action plan.□ Applicable□ Inapplicable
Section IV. Corporate Governance & Environmental & Social
Responsibility
I. Changes in directors supervisors and executive officers
□Applicable □ Inapplicable
Name Positions held typology Date rationale
WANGYOULIANG Director Resignation upon the end of term 2026/5/22 Leadership transition
WU YIBING Independent Director Resignation upon the end of term 2026/5/22 Leadership transition
LIU LUHUA Independent Director Resignation upon the end of term 2026/5/22 Leadership transition
LIAO MEIHUA Director Elected 2026/5/22 Leadership transition
ZHU YANSHENG Independent Director Elected 2026/5/22 Leadership transition
WANG FENGZHOU Independent Director Elected 2026/5/22 Leadership transition
II. Pre-plan for profit allocation and turning capital reserve into share capital for the
reporting period
□ Applicable□ Inapplicable
The Company planned not to distribute cash dividend and bonus share and not to convert capital reserves into
share capital in half year.III. Implementation of any equity incentive plan employee stock ownership plan or other
incentive measures for employees
□ Applicable□ Inapplicable
The Company planned not to distribute cash dividend and bonus share and not to convert capital reserves into
share capital in half year.
222026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
IV. Disclosure of environmental information
Whether listed companies and their major subsidiaries are included in the list of enterprises whose environmental
information is disclosed in accordance with the law.□ Applicable□ Inapplicable
V. Social responsibility situation
Not available.
232026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Section V. Significant Events
I. Commitments of the Company’s actual controller shareholders related parties and
acquirer as well as the Company and other commitment makers fulfilled in this reporting
period or ongoing at the period-end
□ Applicable□ Inapplicable
No such cases in the reporting period.On December 31 2012 the Company disclosed the "Announcement on the Proposed Share Increase by the
Controlling Shareholder" (Announcement No.: 2012-093) in Securities Times Ta Kung Pao (Hong Kong) and
CNINFO.Since the Company's closing share price fell below HKD 2.40 on July 27 2026 the Company received a "Letter
of Notification on Fulfilling Commitments and the Second Share Increase Plan for Min Can Kun B" from its
controlling shareholder FILLMAN INVESTMENTS LIMITED (hereinafter referred to as "Fillman Investment")
on the same day. Fillman Investment committed that given the Company's closing share price remained below
HKD 2.40 on July 27 2026 it will initiate a share increase plan on July 28 2026. The implementation period of
this plan will take into account the enforceability considering factors such as sensitive periods. Within 6 months
from July 28 2026 the cumulative share increase will be no less than 0.15% and no more than 0.30% of the
Company's total issued shares.If upon the expiration of the 6-month implementation period and during the period from the expiration date to
June 25 2027 the Company's closing share price on any trading day remains below HKD 2.40 per share Fillman
Investment will initiate the next share increase plan on the trading day following the day when the closing price
falls below HKD 2.40 per share. This is to fulfill the commitments made in 2012 and the cumulative share
increase within twelve months from the date of the first announcement of the share increase plan (i.e. June 26
2026) will not exceed 2% of the Company's total issued shares.
The reason and purpose of this share increase are based on Fillman Investment's confidence in the Company's
sustainable and stable future development and its fulfillment of the commitments made in 2012.Currently the second share increase plan is underway.II. Occupation of the Company’s funds for non-operating purposes by the controlling
shareholder and its related parties
□ Applicable□ Inapplicable
III. Illegal provision of guarantees for external parties
□ Applicable□ Inapplicable
IV. Engagement and disengagement of CPAs firm
Whether the semi-annual financial report has been audited
□ Yes□ No
The semi-annual financial report of the Company has not been audited.
242026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
V. Notes for “non-standard audit report” of CPAs firm during the Reporting Period by
board of directors and supervisory board
□ Applicable□ Inapplicable
VI. Notes for the related information of “non-standard audit reports” last year by board of
directors
□ Applicable□ Inapplicable
VII. Bankruptcy and restructuring
□ Applicable□ Inapplicable
VIII. Litigations and arbitrations
Significant litigations and arbitrations
□ Applicable□ Inapplicable
Other lawsuits
□Applicable □ Inapplicable
252026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Unit: RMB’0000
Situation of
Whether execution of
Basic situation of Lawsuitamount form into Process of lawsuit (arbitration) Trial results and influences judgment of Disclosure Disclosurlawsuit (arbitration) (RMB’0000) estimated of lawsuit (arbitration) lawsuit date e indexliabilities (arbitration
)
On November 14 2025 Zhangzhou Hongyuan Electronic
Industrial Co. Ltd. (hereinafter referred to as
"Hongyuan Company") filed a lawsuit with the Longhai
District People's Court claiming that TKL accepted the
inventory products and paid the payment of RMB
382769.31 along with interest and also claimed
The case of the
compensation for the material preparation loss of RMB
purchase and sale
323615.36 and interest totaling RMB 774814.78. On
contract dispute
June 16 2026 the trial was held. During the trial Pending the hearing of the
between subsidiadry 42.6 No second instance. No NoHongyuan Company proposed to change the litigation
TKL and Zhangzhou
request. The changed litigation request was that TKL
Hongyuan Electronic
accepted the inventory products and paid the payment of
Industrial Co. Ltd
RMB 90049.14 along with interest and also claimed
compensation for the material preparation loss of RMB
287197.98 and interest totaling RMB 426028.91. On
June 16 2026 the case was heard in the first instance.Due to some facts not being clarified a second hearing
is awaited.The first instance
On January 21 2026 the case was filed online with the
judgment ordered the
Ningbo Intermediate People's Court requesting the
defendant to cease the
The design patent defendant to cease the infringement and compensate the
infringement and
dispute cases where plaintiff for economic losses amounting to RMB 300000
compensate the plaintiff
the subsidiary TKL as well as covering the reasonable expenses incurred for To be
6.5 No for economic losses and No No
sued Xichang the protection of rights amounting to RMB 15000. The executed
reasonable expenses for
Zhouxiang Baizhi first instance trial was held on April 30 2026 and the
rights protection
Electrical Factory first instance judgment was issued on June 11 2026.totaling RMB 65000. The
(The defendant did not appeal and the first instance
judgment has taken
judgment has taken effect.)
effect.
262026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
IX. Punishments and rectifications
□ Applicable□ Inapplicable
X. Credit conditions of the Company as well as its controlling shareholder and actual controller
□ Applicable□ Inapplicable
XI. Significant related-party transactions
1. Related-party transactions relevant to routine operation
□Applicable □ Inapplicable
Unit: RMB’0000
Pricing Proportion Whether
Type of the Content of the principle of Transa in same Approved exceeded Settlement Similar
Related party Relationship related-party related-party the related- ction Transactio kind of transaction the method of then amount related-party market
Disclosure Disclosure
transaction transaction party price transaction quota approved price date index
transaction s (%) quota transaction
Thermaster Company directly Purchase of Based on the
Electronic controlled by actual commodities Purchase of market price 1498.72 3.92% 3500.00 No Settled
(Xiamen) Ltd. controller and their from the related raw parts and bothclose family members party parties abide N/A according to the 10 March
www.cninf
contract signed N/A 2026 o.com.cn
Star Comgistic Ultimate controlling Sales of Sales of parts by the fair and
Capital Co. Ltd. company commodities to and finished reasonable 48.19 0.08% 600.00 No
by both parties
the related party products principle
Total 1546.91 4100.00
Details of large amount of sales returns N/A
As for the prediction on the total amount of routine related-party
transactions to be occurred in the reporting period by relevant types the N/A
actual performance in the reporting period
Reason for significant difference between the transaction price and the
market price N/A
272026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
2. Related-party transactions regarding purchase or sales of assets or equity interests
□ Applicable□ Inapplicable
3. Related-party transitions regarding joint investments
□Applicable□ Inapplicable
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. Transactions with related finance company especially one that is controlled by the Company
□ Applicable□ Inapplicable
6. Transactions with related finance company controlled by the Company
□ Applicable□ Inapplicable
7. Other significant related-party transactions
□ Applicable□ Inapplicable
282026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
XII. Significant contracts and execution
1. Entrustment contracting and leasing
(1) Entrustment
□ Applicable□ Inapplicable
(2) Contracting
□ Applicable□ Inapplicable
(3) Leasing
□ Applicable□ Inapplicable
2. Significant guarantees
□Applicable □ Inapplicable
292026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Unit: RMB’0000
Guarantees between subsidiaries
Disclosure date Guarantee
Guaranteed of the guarantee Line of Actual occurrence Actual guarantee for a
party line guarantee date amount Type of guarantee Collateral
Counter- Term of
guarantee guarantee Due or not related
announcement party ornot
PT.STAR
COMGISTIC 2025/4/26 3750.00 The first half of Joint and several liability 50% credit2026 0.00 guarantee +50% funds N/A 1 year No NoINDONESIA
PT.STAR
COMGISTIC 2250.00 The first half of Joint and several liability2025/10/29 2026 62.00 guarantee 100% credit N/A 1 year No NoINDONESIA
Total guarantee line for
subsidiaries approved during 0.00 Total actual guarantee amount for subsidiaries
this Reporting Period (C1) during this Reporting Period (C2)
501.00
Total approved guarantee line
for subsidiaries at the end of this 6000.00 Total actual guarantee balance for subsidiaries at
Reporting Period (C3) the end of this Reporting Period (C4)
62.00
Total guarantee amount (total of the above-mentioned three kinds of guarantees)
Total guarantee line approved
during this Reporting Period 0.00 Total actual guarantee amount during this
(C1) Reporting Period (C2)
501.00
Total approved guarantee line
at the end of this Reporting 6000.00 Total actual guarantee balance at the end of
Period (C3) this Reporting Period (C4)
62.00
Proportion of the total actual guarantee amount (C4) in net assets
of the Company 0.31%
Of which:
Amount of guarantees provided for shareholders the actual
controller and their related parties (D) 0
Amount of debt guarantees provided directly or indirectly for
entities with a liability-to-asset ratio over 70% (E) 0
Portion of the total guarantee amount in excess of 50% of net
assets (F) 0
Total amount of the three kinds of guarantees above (D+E+F) 0
Explanation on undue guarantee or possible joint liquidated
liability undertaken None
Explanation on providing external guarantee violating
established procedures None
302026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Specification of the use of composite guarantees
Not available.
3. Entrusted cash management
□Applicable□ Inapplicabl
4. Other significant contracts
□ Applicable□ Inapplicable
XIII. Other significant events
□Applicable □ Inapplicable
Index of
basic
Reception time Recetion location Recetion method Type of reception Recetion object Main topics discussed and materials provided
research
situation
Telephone Understand the performance forecast of the company's 2025
Company Individual Mr. Chen
2026/1/16 communication annual report
Telephone Understand the company's production and operation status
Company communication Individual Mr. Chen hoping that major shareholders will increase their holdings
2026/2/3 and increase dividends
Telephone Understand the company's production and operation status
Company Individual Mr. Li
2026/2/9 communication and discuss the company's future development strategy
Telephone Understand the company's production and operation status
Company Individual Mr. Zhang
2026/2/27 communication and compare it with that of the same industry
Telephone Inquire about the arrangements for the performance
Company communication Individual Mr. Cao presentation and communicate the matters related to the
2026/3/4 transition from B to A.
Mr. Yang Mr. Gu Understand the company's production and operation status
Mr. Wang Mr. and its future development plans. http://www.c
Company Field research Individual
Zhang Ms. Gao ninfo.com.cn
2026/3/16 Mr. Su Mr. Han
312026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Index of
basic
Reception time Recetion location Recetion method Type of reception Recetion object Main topics discussed and materials provided
research
situation
Telephone Understand the company's production and operation status.Company Individual Mr. Zhang
2026/3/17 communication
Telephone Mr. Lu Inquire about the company's operating situation the matters
Company Individual
2026/4/7 communication related to the transition from B to A.
Telephone Mr. Chen Inquire about the company's operating situation the
Company communication Individual commitment of major shareholders' increase in holdings and
2026/4/16 the matters related to the transition from B to A.
Telephone Mr. Zhang Commitment of major shareholders' increase in holdings.Company Individual
2026/4/16 communication
Telephone Mr. Lu Commitment of major shareholders' increase in holdings the
Company Individual
2026/4/17 communication company's production and operation status.
Telephone Mr. Ding Commitment of major shareholders' increase in holdings the
Company Individual
2026/4/17 communication company's production and operation status.
Telephone Mr. Chen Commitment of major shareholders' increase in holdings the
Company communication Individual company's production and operation status suggesting the
2026/4/17 company to conduct a share repurchase.
Telephone Mr. Chen The problem of the company's stock price being too low.Company Individual
2026/4/27 communication
Telephone Mr. Zhang The problem of the company's stock price being too low the
Company Individual
2026/5/6 communication company's production and operation status.
Telephone Mr. Cao The problem of the company's stock price being too low the
communication company's production and operation status suggesting the
Company Individual
company to conduct a share repurchase the issue of B-share
2026/5/6 transfer.
Telephone Mr. Lu Suggesting the company to conduct a share repurchase
Company communication Individual commitment of major shareholders' increase in holdings
2026/5/14 dividend issue.
Telephone Mr. Chen Suggesting the company to conduct a share repurchase
Company Individual
2026/5/18 communication increasing dividends.
Telephone Mr. Zhang Inquire about the company's dividend issue in conjunction
Company communication Individual with the commitment of major shareholders' increase in
2026/6/9 holdings.
Telephone Mr. Lu Inquire about the company's dividend issue in conjunction
Company Individual
2026/6/11 communication with the commitment of major shareholders' increase in
322026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Index of
basic
Reception time Recetion location Recetion method Type of reception Recetion object Main topics discussed and materials provided
research
situation
holdings and the situation of the US market.Telephone Mr. Xu Inquire about the company's dividend issue in conjunction
Company communication Individual with the commitment of major shareholders' increase in
2026/6/16 holdings the company's operation status.
Telephone Mr. Ju Inquire about the company's dividend issue in conjunction
Company communication Individual with the commitment of major shareholders' increase in
2026/6/22 holdings the company's operation status.
Telephone Mr. Cao Inquire about the company's production and operation status
Company Individual
2026/6/25 communication the issue of B-share reform.
Telephone Mr. Lu Inquire about the company's dividend issue in conjunction
Company communication Individual with the commitment of major shareholders' increase in
2026/6/29 holdings the company's operation status.
Telephone Mr. Zhang Inquire about the company's dividend issue in conjunction
Company communication Individual with the commitment of major shareholders' increase in
2026/6/29 holdings the company's operation status.
XIV. Other significant events
□ Applicable□ Inapplicable
XV. Significant events of subsidiaries
□ Applicable□ Inapplicable
332026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Section VI. Change in Shares & Shareholders
I. Changes in shares
1. Changes in shares
Unit: share
Before Increase/decrease (+/-) After
Increase
Percentage New Bonus from Percentage
Number Other Subtotal Number
(%) issues shares capital (%)
reserve
1. Private shares
1.1 Founder’s shares
Of which: Shares
held by state
Shares held by
domestic corporations
Shares held by
foreign corporations
Others
1.2 Shares obtained
by corporations in
placement
1.3 Employee shares
1.4 Preference shares
or others
2. Public shares 185391680 100.00% 0 0 0 0 0 185391680 100.00%
2.1 RMB ordinary
shares
2.2 Domestically
185391680100.00%00000185391680100.00%
listed foreign shares
2.3 Foreign capital
stocks listed abroad
2.4 Other
3. Total shares 185391680 100.00% 0 0 0 0 0 185391680 100.00%
Reasons for the share changes
□ Applicable□ Inapplicable
Approval of share changes
□ Applicable□ Inapplicable
Transfer of share ownership
□ Applicable□ Inapplicable
Implementation progress of share repurchases
342026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
□ Applicable□ Inapplicable
Progress on reducing the repurchased shares by way of centralized bidding
□ Applicable□ Inapplicable
Change in share capital’s impacts on basic EPS and diluted EPS in recent year and recent issue and net assets per
share attributed to equity shareholder and financial index etc.□ Applicable□ Inapplicable
Other contents was necessary to the company or the securities regulators required to be disclosed
□ Applicable□ Inapplicable
2. Changes in restricted shares
□ Applicable□ Inapplicable
II. Issuance and listing of securities
□ Applicable□ Inapplicable
III. Total number of shareholders and their shareholdings
Unit: share
Total number of common shareholders at Total number of preference
the period-end 12528 shareholders with resumed voting 0rights at the period-end
Greater than 5% or top 10 common shareholders
Increase/dec Pledged marked or
Name of Nature of Shareholding Total common rease during Number of Number of frozen shares
shareholder shareholder percentage shares held at theperiod-end the reporting
common private common public
shares shares Status of Number ofperiod shares shares
FORDCHEE
DEVELOPM Foreign
ENT corporation 29.10% 53940530.00 Unchanged 0 53940530.00 N/A 0
LIMITED
EUPA
INDUSTRY Foreign
CORPORATI corporation 13.09% 24268840.00 Unchanged 0 24268840.00 N/A 0
ON LIMITED
FILLMAN
INVESTMEN Foreigncorporation 2.49% 4621596.00 Unchanged 0 4621596.00 N/A 0TS LIMITED
CHINA
MERCHANT
S Foreign
SECURITIES corporation 1.20% 2215691.00 877153 0 2215691.00 N/A 0
(HK) CO.LIMITED
CAO YIFAN Domesticindividual 1.11% 2063000.00 -31000 0 2063000.00 N/A 0
CHEN Domestic
YONGQUAN individual 1.09% 2028476.00 Unchanged 0 2028476.00 N/A 0
CHEN Foreign
LIJUAN individual 0.94% 1733768.00 Unchanged 0 1733768.00 N/A 0
352026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
CHEN Foreign
YONGQING individual 0.89% 1658078.00 Unchanged 0 1658078.00 N/A 0
DING Domestic
XIAOLUN individual 0.67% 1238000.00 67900 0 1238000.00 N/A 0
YIN HUILI Domesticindividual 0.57% 1050007.00 115895 0 1050007.00 N/A 0
Strategic investor or general
corporation becoming a top
ten common shareholder None
due to placing of new shares
Related or acting-in-concert The first the second and the third shareholders are the Company’s corporate controlling shareholders. It is
parties among the unknown whether the other public shareholders are related parties or acting-in-concert parties as prescribed in the
shareholders above Administrative Methods for Disclosure of the Shareholding Changes of the Listed Company’s Shareholders.Above shareholders
involved in entrusting/being
entrusted with voting rights None
and giving up voting rights
Special explanation for the
existence of repurchase
accounts among the top ten None
shareholders
Top ten common public shareholders
Name of shareholder Number of common public shares held at the
Type of shares
period-end Type Number
FORDCHEE
DEVELOPMENT 53940530.00 Domestically listed foreign share 53940530.00
LIMITED
EUPA INDUSTRY
CORPORATION LIMITED 24268840.00 Domestically listed foreign share 24268840.00
FILLMAN
INVESTMENTS LIMITED 4621596.00 Domestically listed foreign share 4621596.00
CHINA MERCHANTS
SECURITIES (HK) CO. 2215691.00 Domestically listed foreign share 2215691.00
LIMITED
CAO YIFAN 2063000.00 Domestically listed foreign share 2063000.00
CHEN YONGQUAN 2028476.00 Domestically listed foreign share 2028476.00
CHEN LIJUAN 1733768.00 Domestically listed foreign share 1733768.00
CHEN YONGQING 1658078.00 Domestically listed foreign share 1658078.00
DING XIAOLUN 1238000.00 Domestically listed foreign share 1238000.00
YIN HUILI 1050007.00 Domestically listed foreign share 1050007.00
Explanation on associated
relationship or/and persons
acting in concert among the
top ten unrestricted common The first the second and the third shareholders are the Company’s corporate controlling shareholders. It is
shareholders and between unknown whether the other public shareholders are related parties or acting-in-concert parties as prescribed in the
the top ten unrestricted Administrative Methods for Disclosure of the Shareholding Changes of the Listed Company’s Shareholders.common shareholders and
the top ten common
shareholders
Explanation on the top 10
common shareholders
participating in the margin N/A
trading business
362026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Situations regarding the participation of shareholders holding more than 5% of the shares the top 10 shareholders
and the top 10 unrestricted float shareholders in the securities lending component of the margin financing and
securities lending program.□ Yes□ No
The top 10 shareholders and the top 10 unrestrictedly tradable shareholders have changed since the last period due
to reasons related to securities lending and borrowing under the margin financing and securities lending program.□ Yes□ No
Did any of the top ten common shareholders or the top ten unrestricted common shareholders of the Company
conduct any promissory repo during the Reporting Period
□ Yes□ No
No such cases in the Reporting Period.IV. Changes in shareholdings of directors supervisors and executive officers
□ Applicable□ Inapplicable
There was no change in shareholding of directors supervisors and senior management staffs for the specific
information please refer to the 2025 Annual Report.V. Change of the controlling shareholder or the actual controller
Change of the controlling shareholder during this reporting period
□ Applicable□ Inapplicable
No such cases in this reporting period.Change of the actual controller during this reporting period
□ Applicable□ Inapplicable
No such cases in this reporting period.VI. Preference Shares
□ Applicable□ Inapplicable
No preference shares in this reporting period.Section VII. Bonds
□ Applicable□ Inapplicable
372026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Section VIII. Financial Report
I. Auditor’s Report
Whether the semi-annual report has been audited
□Yes□ No
The semi-annual report of the Company has not been audited.II. Financial statements (attached)
1. Statement of Financial Position
2. Statement of Profit or Loss and Other Comprehensive Income
3. Statement of Cash Flows
4. Statement of Changes in Shareholders' Equity
5. Notes to the Financial Statements
The Board of Directors of Tsann Kuen (China) Enterprise Co. Ltd.Board Chairman: Cai Yuansong
6 August 2026
382026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
1. Consolidated Statement of Financial Position as at 30 June 2026
Prepared by: TsannKuen (China) Enterprise Co. Ltd Unit：Yuan Currency: CNY
Item Note 2026/6/30 2025/12/31 Item Note 2026/6/30 2025/12/31
Current assets: Current liabilities
Cash and cash equivalents 5.1 483329551.38 460847776.00 Short-term borrowings
Held-for-trading financial assets Held-for-trading financialliabilities 5.19 89300.00
Derivative financial assets Derivative financial liabilities
Notes receivable Notes payable 5.20 2854902.60 2224816.88
Accounts receivable 5.2 135141611.88 139969323.13 Accounts payable 5.21 332366027.34 383868393.34
Accounts receivable financing Advances from customers 5.22 2619703.85 2382045.58
Advances to suppliers 5.3 4553642.79 4955253.01 Contract liabilities 5.23 36532115.76 23617663.18
Other receivables 5.4 13969590.88 21608192.98 Employee benefits payable 5.24 47355871.62 58319624.45
Including:Interests receivable Taxes payable 5.25 7376368.07 7067320.13
Dividend receivable Other payables 5.26 23257229.59 28579322.67
Inventories 5.5 176220707.66 193718061.45 Including: Interests payables
Contract assets Dividend payables
Assets classified as held for sale Liabilities classified as held forsale
Non-current assets maturing within Non-current liabilities maturing
one year 5.6 532789095.02 555877899.74 within one year 5.27 7377185.32 476624.15
Other current assets 5.7 362793251.67 288286038.04 Other current liabilities
Total current assets 1708797451.28 1665262544.35 Total current liabilities 459828704.15 506535810.38
Non-current assets: Non-current liabilities:
Debt investments 5.8 50879812.96 208602148.68 Long-term borrowings
Other debt investments Bonds payable
Long-term receivables Including: Preference share
Long-term equity investments 5.9 6124949.19 7884938.82 Perpetual capital securities
Other equity instrument investment 5.10 40000.00 40000.00 Lease liabilities 5.28 405542937.14 401559564.79
392026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Item Note 2026/6/30 2025/12/31 Item Note 2026/6/30 2025/12/31
Other non-current financial assets Long-term payables
Investment properties Long-term employee benefits5.11 18224358.55 18560118.67 payable
Fixed assets 5.12 169890505.73 162861863.08 Estimated liabilities
Construction in progress 5.13 12040385.08 14770911.87 Deferred income
Productive biological assets Deferred tax liabilities
Oil and gas assets Other non-current liabilities
Right-of-use assets 5.14 335405671.43 340387210.22 Total non-current liabilities 405542937.14 401559564.79
Intangible assets 5.15 9938455.89 10806092.17 Total liabilities 865371641.29 908095375.17
Research and development
expenditure Owners’ equity
Goodwill Share capital 5.29 185391680.00 185391680.00
Long-term deferred expenses 5.16 2590369.43 3395913.29 Other equity instruments
Deferred tax assets 5.17 25927502.14 15842586.55 Including: Preference shares
Other non-current assets 5.18 775954.82 6273764.94 Perpetual capital securities
Total non-current assets 631837965.22 789425548.29 Capital reserves 5.30 296808965.79 296808965.79
Less: Treasury stock
Other comprehensive income 5.31 3454629.88 8287226.27
Specific reserves
Surplus reserves 5.32 86780627.31 86780627.31
Retained earnings 5.33 465090468.33 512340440.03
Total owner’s equity attributable
to parent company 1037526371.31 1089608939.40
Non-controlling interests 437737403.90 456983778.07
Total owners’ equity 1475263775.21 1546592717.47
Total assets Total liabilities and owners'2340635416.50 2454688092.64 equity 2340635416.50 2454688092.64
Legal Representative: Cai Yuansong Chief Financial Officer:Wu Jianhua Finance Manager:Wu Jianhua
402026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
2. Statement of Financial Position of Parent Company as at 30 June 2026
Prepared by: TsannKuen (China) Enterprise Co. Ltd Unit：Yuan Currency: CNY
Assets Note 2026/6/30 2025/12/31 Liabilities and owners' equity Note 2026/6/30 2025/12/31
Current assets: Current liabilities
Cash and cash equivalents 25812413.45 21849532.74 Short-term borrowings
Held-for-trading financial Held-for-trading financial
assets liabilities
Derivative financial assets Derivative financial liabilities
Notes receivable Notes payable
Accounts receivable 15.1 460693.61 4371.17 Accounts payable 551561.71 556027.25
Accounts receivable
financing Advances from customers 2279030.09 2170012.42
Advances to suppliers Contract liabilities 116776.54 73127.34
Other receivables 15.2 5816753.71 5020385.44 Employee benefits payable 5216109.88 7323253.61
Including: Interests
receivable Taxes payable 4666740.99 5312866.63
Dividend receivable Other payables 3717297.00 3666211.88
Inventories 314707.61 862258.78 Including: Interests payables
Contract asset Dividend payables
Assets classified as held for Liabilities classified as held for
sale sale
Non-current assets maturing Non-current liabilities maturing
within one year within one year
Other current assets Other current liabilities
Total current assets 32404568.38 27736548.13 Total current liabilities 16547516.21 19101499.13
Non-current assets: Non-current liabilities:
Debt investments Long-term borrowings
Other debt investments Bonds payable
Long-term receivables Including: Preference share
Long-term equity
investments 15.3 923414701.56 923414701.56 Perpetual capital securities
412026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Assets Note 2026/6/30 2025/12/31 Liabilities and owners' equity Note 2026/6/30 2025/12/31
Other equity instrument
investment 40000.00 40000.00 Lease liabilities
Other non-current financial
assets Long-term payables
Investment properties Long-term employee benefits18147302.69 18488476.01 payable
Fixed assets 657400.23 729555.26 Estimated liabilities
Construction in progress 93577.98 80198.02 Deferred income
Productive biological assets Deferred tax liabilities
Oil and gas assets Other non-current liabilities
Right-of-use assets Total non-current liabilities 0.00 0.00
Intangible assets Total liabilities 16547516.21 19101499.13
Research and development
expenditure Owners’ equity
Goodwill Share capital 185391680.00 185391680.00
Long-term deferred
expenses 631349.96 736503.51 Other equity instruments
Deferred tax assets 531626.26 696346.82 Including: Preference shares
Other non-current assets Perpetual capital securities
Total non-current assets 943515958.68 944185781.18 Capital reserves 271490289.82 271490289.82
Less: Treasury stock
Other comprehensive income
Specific reserves
Surplus reserves 86780627.31 86780627.31
Retained earnings 415710413.72 409158233.05
Total owners’ equity 959373010.85 952820830.18
Total liabilities and owners'
Total assets 975920527.06 971922329.31 equity 975920527.06 971922329.31
Legal Representative: Cai Yuansong Chief Financial Officer:Wu Jianhua Finance Manager:Wu Jianhua
422026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
3. Consolidated Statement of Profit or Loss and Other Comprehensive Income
Prepared by: TsannKuen (China) Enterprise Co. Ltd Unit：Yuan Currency: CNY
Item Note Reporting period Same period of lastyear
I. Revenue 5.34 581312325.69 652773296.39
Including: operating revenue 5.34 581312325.69 652773296.39
II. Cost of sales 636207339.25 645659208.44
Including: operating cost 5.34 536227938.75 562880349.18
Taxes and surcharges 5.35 4869063.63 4083979.63
Selling and distribution expenses 5.36 10970441.79 11706746.06
General and administrative expenses 5.37 41144190.82 34691484.86
Research and development expenses 5.38 29429138.41 29941757.03
Finance costs 5.39 13566565.85 2354891.68
Including: Interest expense 9984247.79 11155646.85
Interest income 2718551.59 3750247.27
Add: Other income 5.40 139290.87 1808128.78
Investmentincome/(losses) 5.41 10271121.42 16576429.63
Including:Investment income from associates and joint ventures -1759989.63 -354876.17
Gains/ (losses) from derecognition of financial assets measured
at amortised cost
Income/ (losses) from net exposure hedging
Gains/ (losses) from changes in fair values 5.42 -89300.00 -942083.33
Impairment loss of credit 5.43 583571.07 -2109067.68
Impairment loss of asset 5.44 -3451411.63 -2818668.81
Gains/ (losses) from disposal of assets 5.45 1265588.90
III. Profit/(loss) from operations -47441741.83 20894415.44
Add: Non-operating income 5.46 1155943.73 679417.25
Less: Non-operating expenses 5.47 240713.51 74055.07
IV. Profit/(loss) before tax -46526511.61 21499777.62
Less: Income tax expenses 5.48 -5986255.04 1869934.96
V. Net profit/(loss) -40540256.57 19629842.66
(I) Net profit/(loss) by continuity
Net profit/(loss) from continuing operation -40540256.57 19629842.66
Net profit/(loss) from discontinued operation
(II) Net profit/(loss) by ownership attribution
Attributable to owners of the parent -28710803.70 16000988.65
Attributable to non-controlling interests -11829452.87 3628854.01
432026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Item Note Reporting period Same period of lastyear
VI. Other comprehensive income after tax 5.49 -6443461.85 -501554.00
(a) Attributable to owners of the parent 5.49 -4832596.39 -376165.50
(i) Items that will not be reclassified subsequently to profit or loss
1.Remeasurement of the net defined benefit liability (asset)
2. Other comprehensive income using the equity method
which will not be reclassified subsequently to profit and loss
3. Changes in fair value of other equity instrument investment
4. Changes in fair value of the Company’s own credit risks
(ii) Items that may be reclassified subsequently to profit or loss 5.49 -4832596.39 -376165.50
1. Other comprehensive income using the equity method
which will be reclassified subsequently to profit or loss
2. Changes in fair value of other debt instrument investment
3. Other comprehensive income arising from the
reclassification of financial assets
4. Provision for credit impairment in other debt investments
5. Reserve for cash flow hedges
6. Exchange differences on translating foreign operations 5.49 -4832596.39 -376165.50
(b) Attributable to non-controlling interests 5.49 -1610865.46 -125388.50
VII. Total comprehensive income -46983718.42 19128288.66
Attributable to owners of the parent -33543400.09 15624823.15
Attributable to non-controlling interests -13440318.33 3503465.51
VIII. Earnings per share:
Basic earnings per share 16.2 -0.15 0.09
Diluted earnings per share 16.2 -0.15 0.09
Where business mergers under the same control occurred in the Reporting Period net profit achieved by the merged parties before
the business mergers was CNY 0.00 with the corresponding amount for the same period of last year being CNY 0.00.Legal Representative: Cai Yuansong Chief Financial Officer：Wu Jianhua Finance Manager: Wu Jianhua
442026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
4. Statement of Profit or Loss and Other Comprehensive Income of Parent Company
Prepared by: TsannKuen (China) Enterprise Co. Ltd Unit：Yuan Currency: CNY
Item Note Reporting period Same period of lastyear
I. Revenue 15.4 35362061.10 33325016.04
Less: Costs of sales 15.4 22915428.75 20729470.91
Taxes and surcharges 1705313.99 1850440.08
Selling and distribution expenses 154565.99 1126624.30
Administrative expenses 1332265.90 1709394.31
Research and development expenses
Finance costs -297656.73 -212456.47
Including: Interest expense
Interest income 150953.64 116089.08
Add: Other income 48621.08 24784.44
Investment income/(losses) 15.5 18004677.24 40989673.41
Including: Investment income from associates and joint
ventures
Gains /(losses) from derecognition of financial assets
measured at amortised cost
Income /(losses) from net exposure hedging
Gains/(losses) from changes in fair values
Impairment loss of credit -22934.39 -80876.19
Impairment loss of asset -378965.52
Gains/(losses) from disposal of assets
II. Profit/(loss) from operations 27582507.13 48676159.05
Add: Non-operating income 48160.00 50150.00
Less: Non-operating expenses
III. Profit/(loss) before tax 27630667.13 48726309.05
Less: Income tax expenses 2539318.46 1922562.23
IV. Net profit/(loss) 25091348.67 46803746.82
Net profit/(loss) from continuing operation 25091348.67 46803746.82
Net profit/(loss) from discontinued operation
V. Other comprehensive income after tax
(i) Items that will not be reclassified subsequently to profit or
loss
1.Remeasurement of the net defined benefit liability (asset)
2. Other comprehensive income using the equity method
which will not be reclassified subsequently to profit and loss
3. Changes in fair value of other equity instrument investment
4. Changes in fair value of the Company’s own credit risks
(ii) Items that may be reclassified subsequently to profit or loss
1. Other comprehensive income using the equity method
which will be reclassified subsequently to profit or loss
2. Changes in fair value of other debt instrument investment
3. Other comprehensive income arising from the
reclassification of financial assets
4. Provision for credit impairment in other debt investments
5. Reserve for cash flow hedges
6. Exchange differences on translating foreign operations
VI. Total comprehensive income 25091348.67 46803746.82
Legal Representative: Cai Yuansong Chief Financial Officer：Wu Jianhua Finance Manager: Wu Jianhua
452026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
5. Consolidated Statement of Cash Flows
Prepared by: TsannKuen (China) Enterprise Co. Ltd Unit：Yuan Currency: CNY
Item Note Reporting period Same period oflast year
I. Cash flows from operating activities
Cash received from the sale of goods and the rendering of services 575758219.85 708216972.45
Cash received from tax refund 46197618.28 62498228.93
Other cash received relating to operating activities 5.50 24583015.48 31314118.51
Subtotal of cash inflows from operating activities 646538853.61 802029319.89
Cash payments for goods purchased and services received 461194704.73 593600941.63
Cash payments to and on behalf of employees 163134824.77 151067977.57
Payments of taxes 11697265.84 22675852.81
Other cash payments relating to operating activities 5.50 58908110.53 64931416.35
Subtotal of cash outflows from operating activities 694934905.87 832276188.36
Net cash flows from operating activities -48396052.26 -30246868.47
II. Cash flows from investing activities
Cash received from disposal and redemption of investments 50000000.00
Cash received from returns on investments 10253123.67 6148253.50
Net cash received from disposals of fixed assets intangible assets and other
long-term assets 1274449.21
Net cash received from disposals of subsidiaries and other business units
Other cash received relating to investing activities 5.50 189912423.93 173102725.55
Subtotal of cash inflows from investing activities 201439996.81 229250979.05
Cash payments to acquire fixed intangible and other long-term assets 23817268.33 34305082.39
Cash payments to acquire investments 89800000.00
Net cash payments to acquire subsidiaries and other business units
Other cash payments relating to investing activities 5.50 79912423.93 116202277.78
Subtotal of cash outflows from investing activities 103729692.26 240307360.17
Net cash flows from investing activities 97710304.55 -11056381.12
III. Cash flows from financing activities
Cash received from capital contributions
Including: Cash received from absorbing minority shareholders' equity
investment by subsidiaries
Cash received from borrowings 35848000.00
Other cash received relating to financing activities 5.50 3047365.87
Subtotal of cash inflows from financing activities 0.00 38895365.87
Cash repayments of debts
Cash payments for dividends distribution of profit and interest expenses 24345223.85 46817323.30
Including: Dividends distribution of profit paid by subsidiaries to
minority shareholders 5806055.85 13446820.90
Other cash payments relating to financing activities 5.50 480960.00 2754112.41
Subtotal of cash outflows from financing activities 24826183.85 49571435.71
Net cash flows from financing activities -24826183.85 -10676069.84
IV. Effect of foreign exchange rate changes on cash and cash equivalents -2006293.06 -678342.02
V. Net increase / (decrease) in cash and cash equivalents 22481775.38 -52657661.45
Plus: Cash and cash equivalents at the beginning of the period 460847776.00 441890727.50
VI. Cash and cash equivalents at the end of the period 483329551.38 389233066.05
Legal Representative: Cai Yuansong Chief Financial Officer：Wu Jianhua Finance Manager: Wu Jianhua
462026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
6. Statement of Cash Flows of Parent Company
Prepared by: TsannKuen (China) Enterprise Co. Ltd Unit：Yuan Currency: CNY
Item Note Reporting period Same period of lastyear
I. Cash flows from operating activities
Cash received from the sale of goods and the rendering of
services 160106.51 1689450.99
Cash received from tax refund
Other cash received relating to operating activities 37956775.96 36201121.80
Subtotal of cash inflows from operating activities 38116882.47 37890572.79
Cash payments for goods purchased and services received 114295.46 1574640.66
Cash payments to and on behalf of employees 1791933.85 3401721.24
Payments of taxes 7048170.49 6252092.45
Other cash payments relating to operating activities 24658960.38 31615499.30
Subtotal of cash outflows from operating activities 33613360.18 42843953.65
Net cash flows from operating activities 4503522.29 -4953380.86
II. Cash flows from investing activities
Cash received from disposal and redemption of investments
Cash received from returns on investments 18004677.24 40989673.41
Net cash received from disposals of fixed assets intangible
assets and other long-term assets
Net cash received from disposals of subsidiaries and other
business units
Other cash received relating to investing activities
Subtotal of cash inflows from investing activities 18004677.24 40989673.41
Cash payments to acquire fixed intangible and other long-term
assets
Cash payments to acquire investments
Net cash payments to acquire subsidiaries and other business
units
Other cash payments relating to investing activities
Subtotal of cash outflows from investing activities
Net cash flows from investing activities 18004677.24 40989673.41
III. Cash flows from financing activities
Cash received from capital contributions
Cash received from borrowings
Other cash received relating to financing activities
Subtotal of cash inflows from financing activities
Cash repayments of debts
Cash payments for dividends distribution of profit and interest
expenses 18539168.00 33370502.40
Other cash payments relating to financing activities
Subtotal of cash outflows from financing activities 18539168.00 33370502.40
Net cash flows from financing activities -18539168.00 -33370502.40
IV. Effect of foreign exchange rate changes on cash and cash
equivalents -6150.82 1478.03
V. Net increase / (decrease) in cash and cash equivalents 3962880.71 2667268.18
Plus: Cash and cash equivalents at the beginning of the period 21849532.74 9893016.08
VI. Cash and cash equivalents at the end of the period 25812413.45 12560284.26
Legal Representative: Cai Yuansong Chief Financial Officer：Wu Jianhua Finance Manager: Wu Jianhua
472026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
7. Consolidated Statement of Changes in Owners' Equity
Prepared by: TsannKuen (China) Enterprise Co. Ltd Unit：Yuan Currency: CNY
Reporting period
Owners’ equity attributable to the parent company
Item Other equity instruments
Less: Other Non-controlling Total owners’
Capital Specific Surplus Retained
Share capital Perpetual reserves Treasury comprehensive
interests equity
Preference reserves reserves earnings Subtotal
capital Others stock income
shares
securities
I. Balance brought forward 185391680.00 296808965.79 8287226.27 86780627.31 512340440.03 1089608939.40 456983778.07 1546592717.47
Add:Changes in accounting policy
Correction of prior period errors
Business combination under common
control
Others
II. Balance as at 1 January 185391680.00 296808965.79 8287226.27 86780627.31 512340440.03 1089608939.40 456983778.07 1546592717.47
III. Changes in equity during the
reporting period -4832596.39 -47249971.70 -52082568.09 -19246374.17 -71328942.26
(i) Total comprehensive income -4832596.39 -28710803.70 -33543400.09 -13440318.33 -46983718.42
(ii) Capital contributions or withdrawals
by owners
1. Ordinary shares contributed by
shareholders
2．Capital contributed by holders of
other equity instruments
3．Share-based payments recognised in
owners’ equity
4．Others
(iii) Profit distribution -18539168.00 -18539168.00 -5806055.85 -24345223.85
1．Withdrawal of surplus reserves
482026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
Reporting period
Owners’ equity attributable to the parent company
Item Other equity instruments
Less: Other Non-controlling Total owners’Capital Specific Surplus Retained
Share capital Perpetual Treasury comprehensive Subtotal interests equity
Preference reserves stock income reserves reserves earningscapital Others
shares
securities
2．Profit distribution to owners (or
shareholders) -18539168.00 -18539168.00 -5806055.85 -24345223.85
3．Others
(iv) Transfer between owners' equity
1． Capital reserves transfer to share
capital
2．Surplus reserves transfer to share
capital
3．Surplus reserves used to cover
accumulated deficits
4．Defined benefit plan transfer to
retained earnings
5. Other comprehensive income transfer
to retained earnings
6. Others
(v) Specific reserves
1．Withdrawal during the reporting
period
2．Usage during the reporting period
(vi) Others 0.01 0.01
IV. Balance carried forward 185391680.00 296808965.79 3454629.88 86780627.31 465090468.33 1037526371.31 437737403.90 1475263775.21
492026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
(Continued)
The same period of last year
Owners’ equity attributable to the parent company
Item Other equity instruments Non-
Less: Other Total owners’
Capital Specific Surplus Retained controlling
Share capital Preferenc Perpetual reserves Treasury comprehensive
equity
capital Others reserves reserves earnings
Subtotal interests
e shares stock incomesecurities
I. Balance brought forward 185391680.00 296808965.79 11252746.52 81427732.56 527518517.81 1102399642.68 466615694.36 1569015337.04
Add:Changes in accounting policy
Correction of prior period errors
Business combination under common
control
Others
II. Balance as at 1 January 185391680.00 296808965.79 11252746.52 81427732.56 527518517.81 1102399642.68 466615694.36 1569015337.04
III. Changes in equity during the
reporting period -376165.50 -17369513.75 -17745679.25 -9943355.39 -27689034.64
(i) Total comprehensive income -376165.50 16000988.65 15624823.15 3503465.51 19128288.66
(ii) Capital contributions or withdrawals
by owners
1. Ordinary shares contributed by
shareholders
2．Capital contributed by holders of
other equity instruments
3．Share-based payments recognised in
owners’ equity
4．Others
(iii) Profit distribution -33370502.40 -33370502.40 -13446820.90 -46817323.30
1．Withdrawal of surplus reserves
2．Profit distribution to owners (or
shareholders) -33370502.40 -33370502.40 -13446820.90 -46817323.30
3．Others
502026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
The same period of last year
Owners’ equity attributable to the parent company
Item Other equity instruments Non-
Less: Other Total owners’
Capital Specific Surplus Retained controlling
Share capital Perpetual Treasury comprehensive Subtotal equityPreferenc
capital Others reserves reserves reserves earnings
interests
e shares stock incomesecurities
(iv) Transfer between owners' equity
1． Capital reserves transfer to share
capital
2．Surplus reserves transfer to share
capital
3．Surplus reserves used to cover
accumulated deficits
4．Defined benefit plan transfer to
retained earnings
5. Other comprehensive income transfer
to retained earnings
6. Others
(v) Specific reserves
1．Withdrawal during the reporting
period
2．Usage during the reporting period
(vi) Others
IV. Balance carried forward 185391680.00 296808965.79 10876581.02 81427732.56 510149004.06 1084653963.43 456672338.97 1541326302.40
Legal Representative: Cai Yuansong Chief Financial Officer：Wu Jianhua Finance Manager：Wu Jianhua
512026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
8. Statement of Changes in Owners' Equity of Parent Company
Prepared by: TsannKuen (China) Enterprise Co. Ltd Unit：Yuan Currency: CNY
Reporting period
Other equity instruments
Item Less: Other
Share capital Perpetual
Specific Surplus
Preference Capital reserves Treasury comprehensive Retained earnings Total owners’ equitycapital Others
shares stock income
reserves reserves
securities
I. Balance brought forward 185391680.00 271490289.82 86780627.31 409158233.05 952820830.18
Add:Changes in accounting policy
Correction of prior period errors
Others
II. Balance as at 1 January 185391680.00 271490289.82 86780627.31 409158233.05 952820830.18
III. Changes in equity during the reporting period 6552180.67 6552180.67
(i) Total comprehensive income 25091348.67 25091348.67
(ii) Capital contributions or withdrawals by owners
1. Ordinary shares contributed by
shareholders
2．Capital contributed by holders of
other equity instruments
3．Share-based payments recognised in owners’ equity
4．Others
(iii) Profit distribution -18539168.00 -18539168.00
1．Withdrawal of surplus reserves
2．Profit distribution to owners (or shareholders) -18539168.00 -18539168.00
3．Others
(iv) Transfer between owners' equity
1． Capital reserves transfer to share capital
2．Surplus reserves transfer to share capital
3．Surplus reserves used to cover accumulated deficits
4．Defined benefit plan transfer to retained earnings
5. Other comprehensive income transfer to retained earnings
6. Others
(v) Specific reserves
1．Withdrawal during the reporting period
2．Usage during the reporting period
(vi) Others
IV. Balance carried forward 185391680.00 271490289.82 86780627.31 415710413.72 959373010.85
522026 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.
(Continued)
Same period of last year
Other equity instruments
Item Less: Other
Share capital Preference Perpetual Capital reserves Treasury comprehensive
Specific Total owners’
capital Others stock income reserves
Surplus reserves Retained earnings equity
shares securities
I. Balance brought forward 185391680.00 271490289.82 81427732.56 394352682.71 932662385.09
Add:Changes in accounting policy
Correction of prior period errors
Others
II. Balance as at 1 January 185391680.00 271490289.82 81427732.56 394352682.71 932662385.09
III. Changes in equity during the reporting period 13433244.42 13433244.42
(i) Total comprehensive income 46803746.82 46803746.82
(ii) Capital contributions or withdrawals by owners
1. Ordinary shares contributed by
shareholders
2．Capital contributed by holders of
other equity instruments
3．Share-based payments recognised in owners’
equity
4．Others
(iii) Profit distribution -33370502.40 -33370502.40
1．Withdrawal of surplus reserves
2．Profit distribution to owners (or shareholders) -33370502.40 -33370502.40
3．Others
(iv) Transfer between owners' equity
1． Capital reserves transfer to share capital
2．Surplus reserves transfer to share capital
3．Surplus reserves used to cover accumulated
deficits
4．Defined benefit plan transfer to retained earnings
5. Other comprehensive income transfer to retained
earnings
6. Others
(v) Specific reserves
1．Withdrawal during the reporting period
2．Usage during the reporting period
(vi) Others
IV. Balance carried forward 185391680.00 271490289.82 81427732.56 407785927.13 946095629.51
Legal Representative: Cai Yuansong Chief Financial Officer：Wu Jianhua Finance Manager：Wu Jianhua
53Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Tsann Kuen (China) Enterprise Co. Ltd.Notes to the Financial Statements for H1 2026
(All amounts are expressed in Renminbi Yuan (“CNY”) unless otherwise stated)
1. BASIC INFORMATION ABOUT THE COMPANY
Tsann Kuen (China) Enterprise Co. Ltd. (hereafter “the Company or TKC”) was established in the People’s
Republic of China (“the PRC”) in 1988 as a wholly owned foreign investment enterprise the Company
named in TsannKuen China (Xiamen) Ltd. firstly invested by the Fordchee (Hongkong) Co. Ltd. EUPA
Industry Corporation Limited and Hong Kong Fillman investment Co. Ltd.. On 16 February 1993 with the
approval of the Ministry of Foreign Trade and Economic Co-operation the Company was reorganized into
an incorporated company and was renamed as TsannKuen (China) Enterprise Co. Ltd. In June 1993 the
Company issued 40000000 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 approvaldocuments ”The Approval by Investment Promotion Bureau of Xiamen to Consent the Capital Reductionof TsannKuen (China) Enterprise Co. Ltd”(IPB audit [2012] NO. 698) as the base 1112350077 shares of
the total original share capital for implementation of share reducing model that all registered shareholders
who was recorded on 28 December 2012 with the proportion 6:1 to reduce the shares. After the
implementation of share reducing model total share capital was reduced from 1112350077 shares to
185391680 shares of the company. Until 30 June 2026 the Company’s share capital is CNY 185391680.
Following 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. SharesTraded Sponsor of the Approval”) On 6 December 2006 the Company received the [2006] No.266 file“The notice of TsannKuen (China) Enterprise Co. Ltd concerning the Approval of non-listed ForeignShares Traded” from China Securities Regulatory Commission. The China Securities Regulatory
Commission agreed 700476830 unlisted shares (account for 62.97% of the share capital) held 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 30 June 2026 total B shares held by the three legal
shareholders (EUPA Industry Corporation Limited Fordchee Development Limited and Fillman
Investment Limited) are 82830966 shares after the implementation of share reducing model (Accounts for
44.68% of the share capital).
Legal representative: Cai Yuansong
Place of registration: No.88 Xinglong Road Huli Industrial District Xiamen Fujian Province
54Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
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 company is actually engaged in the main business activities are: Develop produce and manufacture
small home appliances of gourmet cooking home helper tea and coffee; design and manufacture molds
related to the above products sell the products at home and abroad and provide after-sales service.These financial statements were approved for reporting by the Company's Board of Directors on August 6
2026.
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
2.1 Basis of Preparation
These financial statements have been prepared in accordance with the Accounting Standards for Business
Enterprises – Basic Standards specific accounting standards the Application Guidance for Accounting
Standards for Business Enterprises the Interpretations of Accounting Standards for Business Enterprisesand other relevant provisions (collectively referred to as the “Accounting Standards for BusinessEnterprises”) issued by the Ministry of Finance of the People’s Republic of China as well as the relevant
requirements of the Rules for the Preparation of Information Disclosure by Companies Offering Securities
to the Public No. 15 – General Provisions for Financial Reports issued by the China Securities Regulatory
Commission.
2.2 Going Concern
These financial statements have been prepared on a going concern basis.The Company has assessed its ability to continually operate for the next twelve months from the end of the
reporting period and no matters that may result in doubt on its ability as a going concern were noted.Therefore it is reasonable for the Company to prepare financial statements on the going concern basis.
3. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
3.1 Statement of Compliance with the Accounting Standards for Business Enterprises
The Company prepares its financial statements in accordance with the requirements of the Accounting
Standards for Business Enterprises truthfully and completely reflecting the Company’s financial position
as of 30 June 2026 and its operating results changes in shareholders' equity cash flows and other related
information for the year then ended.
3.2 Accounting Period
The accounting year of the Company is from January 1 to December 31 in calendar year.
3.3 Operating Cycle
The normal operating cycle of the Company is one year.
55Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
3.4 Functional Currency
The Company takes Renminbi Yuan (“CNY”) as the functional currency.The Company’s overseas subsidiaries choose the currency of the primary economic environment in which
the subsidiaries operate as the functional currency.
3.5 Accounting for business combination under same control and not under same control
Business combinations under common control: Assets and liabilities acquired by the consolidating party in
a business combination (including goodwill resulting from the acquisition of the consolidated party by the
ultimate controlling party) are measured at the carrying value of the consolidated party's assets and
liabilities in the consolidated financial statements of the ultimate controlling party at the date of the
combination. The difference between the book value of the net assets acquired in the merger and the book
value of the merger consideration paid (or the total nominal value of shares issued) is adjusted against the
equity premium in capital surplus and if the equity premium in capital surplus is not sufficient for
elimination retained earnings are adjusted.Business combinations not under common control: The cost of the combination is the fair value of the
assets paid liabilities incurred or assumed and equity securities issued by the purchaser to obtain control of
the acquiree at the date of acquisition. The difference between the cost of the combination and the share of
the fair value of the acquiree's identifiable net assets acquired in the combination is recognized as goodwill;
the difference between the cost of the combination and the share of the fair value of the acquiree's
identifiable net assets acquired in the combination is recognized in profit or loss for the period. Each
identifiable asset liability and contingent liability of the acquiree acquired in a merger that meets the
recognition criteria is measured at fair value at the date of acquisition.Directly related costs incurred for a business combination are recognized in profit or loss as incurred;
transaction costs for issuing equity securities or debt securities for a business combination are included in
the initial recognition amount of the equity securities or debt securities.
3.6 Criteria for determining control and Method of preparation of consolidated financial
statements
3.6.1 Criteria for determining control
The scope of consolidation in the consolidated financial statements is determined on the basis of control
and the scope of consolidation includes the Company and all of its subsidiaries. Control means that the
Company has power over the investee enjoys variable returns through its participation in the investee's
related activities and has the ability to use its power over the investee to influence the amount of its returns.
3.6.2 Consolidation procedures
56Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
The Company considers the entire enterprise group as one accounting entity and prepares consolidated
financial statements in accordance with uniform accounting policies to reflect the financial position results
of operations and cash flows of the enterprise group as a whole. The effects of internal transactions that
occur between the Company and its subsidiaries and between subsidiaries are eliminated. If an internal
transaction indicates an impairment loss on the related asset the full amount of such loss is recognized. If
the accounting policies and accounting periods adopted by a subsidiary are not consistent with those of the
Company the necessary adjustments are made in accordance with the Company's accounting policies and
accounting periods when preparing the consolidated financial statements.The share of ownership equity net
profit or loss for the period and comprehensive income for the period attributable to minority shareholders
of the subsidiaries arepresented separately in the consolidated balance sheet under the item of ownership
equity in the consolidated income statement under the item of net profit and in the consolidated statement
of total comprehensive income respectively. The balance resulting from the subsidiary's minority share of
current loss exceeding the minority's share of the subsidiary's opening ownership interest is eliminated to
reduce shareholders'equity.
3.6.2.1 Increase number of subsidiaries or operations
During the reporting period if a subsidiary or business is added as a result of a business combination under
the same control the operating results and cash flows of the subsidiary or business from the beginning of
the period in which the subsidiary or business is combined to the end of the reporting period are included in
the consolidated financial statementswhile the opening balance of the consolidated financial statements
and the relevant items in the comparative statements are adjusted as if the consolidated reporting entity had
existed since the point when the ultimate controlling party began to control it.If control over an investee under the same control can be exercised due to additional investment equity
investments held prior to the acquisition of control over the investee are eliminated from the opening
retained earnings or current profit or loss for the comparative statement period respectively for the
relevant gains or losses other comprehensive income and other changes in net assets recognized between
the later of the date of acquisition of the original equity interest and the date when the consolidated party
and the investee are under the same control and the date of consolidation.During the reporting period the addition of subsidiaries or operations as a result of a business combination
not under common control is included in the consolidated financial statements from the date of acquisition
based on the fair value of each identifiable asset liability and contingent liability determined at the date of
acquisition.If for example additional investments enable the exercise of control over an investee not under common
control the equity interest in the investee held prior to the date of acquisition is remeasured at the fair value
of that equity interest at the date of acquisition and the difference between the fair value and its carrying
amount is recognized as investment income for the current period. The difference between the fair value
and its
57Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
carrying amount is recognized as investment income for the period. The equity interest in the investee held
prior to the date of acquisition is transferred to investment income for the period to which the equity
interest is transferred under the equity method.
3.6.2.2 Disposal of subsidiaries
1)General treatment
When control over an investee is lost due to disposal of part of the equity investment or other reasons the
remaining equity investment after disposal is remeasured at its fair value at the date of loss of control. The
difference between the sum of the consideration received for the disposal of the equity interest and the fair
value of the remaining equity interestless the sum of the share of the net assets of the original subsidiary
calculated on a continuing basis from the date of acquisition or the date of consolidation in proportion to
the original shareholding and goodwill is recognized as investment income in the period in which control
is lost. Other comprehensive income and other changes in owners' equity under the equity method of
accounting related to the equity investment in the original subsidiary that can be reclassified to profit or
loss in the future are transferred to investment income in the current period when control is lost.
2)Step-by-step disposal of subsidiaries
Disposal of equity investments in subsidiaries through multiple transactions in steps until the loss of control
the terms and conditions of the disposal of equity investments in subsidiaries and the economic impact of
each transaction is consistent with one or more of the following usually indicating that the multiple
transactions are a package deal:
i. The transactions are entered into simultaneously or after taking into account their mutual effects;
Ⅱ. These transactions as a whole to achieve a complete business result;
ⅲ. The occurrence of one transaction depends on the occurrence of at least one other transaction;
ⅳ. A transaction is not economical when viewed alone but is economical when considered together with
other transactions.If each transaction is a package transaction each transaction is accounted for as a disposal of a subsidiary
and loss of control; the difference between the disposal price and the share of the net assets of the
subsidiary corresponding to the disposal of the investment before the loss of control is recognized in the
consolidated financial statements as other comprehensive income and is transferred to profit or loss in the
period is lost when control is lost.If each transaction is not a package transaction the accounting treatment is based on partial disposal of the
equity investment in the subsidiary without loss of control before the loss of control; upon the loss of
control the accounting treatment is based on the general treatment of disposal of subsidiaries.
3.6.2.3 Purchase of minority interests in subsidiaries
The difference between the newly acquired long-term equity investment due to the
58Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
purchase of minority interest and the share of net assets of the subsidiary calculated in proportion to the
newly acquired shareholding on an ongoing basis from the date of acquisition or the date of consolidation is
adjusted to the equity premium in capital surplus in the consolidated balance sheet; if the equity premium in
capital surplus is not sufficient for elimination it is adjusted to retained earnings.
3.6.2.4 Partial disposal of equity investments in subsidiaries without loss of control
The difference between the disposal price and the share of net assets of the subsidiary calculated on
acontinuing basis from the date of acquisition or the date of consolidation corresponding to the disposal of
the long-term equity investment is adjusted to the equity premium in capital surplus in the consolidated
balance sheet and if the equity premium in capital surplus is not sufficient to offset it retained earnings are
adjusted.
3.7 Cash and cash equivalent
The cash listed on the cash flow statements of the Group refers to cash on hand and bank
deposit. The cash equivalents refer to short-term (normally with original maturities of three months or less)
and liquid investments which are readily convertible to known amounts of cash and subject to an
insignificant risk of changes in value.
3.8 Translation of foreign currency
3.8.1 Foreign currency transaction
At the initial recognition of foreign currency transactions the entity uses the spot exchange rate on the date
of the transaction or an approximate spot exchange rate determined using a systematic and rational method
that is close to the spot rate at the date of the transaction (hereinafter referred to as the approximate spot
rate) for conversion into the functional currency.On the balance sheet date for foreign currency monetary items the spot exchange rate on the balance sheet
date is used for conversion. The exchange differences arising from the difference between the spot
exchange rate on the balance sheet date and the spot rate at the date of initial recognition or the previous
balance sheet date are recognized in profit or loss. For non-monetary foreign currency items measured at
historical cost the spot exchange rate at the date of the transaction continues to be used; for non-monetary
foreign currency items measured at fair value the spot exchange rate on the date when the fair value is
determined is used and the difference between the amount in the functional currency after conversion and
the original amount in the functional currency is recognized in profit or loss.
3.8.2 Translation of foreign currency financial statements
Before translating the financial statements of a foreign operation adjust the accounting periods and
accounting policies of the foreign operation to align with those of the reporting entity. Then prepare the
financial statements in the relevant currency (other than the functional currency) based on the adjusted
accounting policies and periods. The translation of the financial statements of the foreign operation should
59Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
be performed as follows:
* Assets and Liabilities in the Statement of Financial Position:
Assets and liabilities are translated at the spot exchange rate on the balance sheet date.For equity items except for "retained earnings" other equity items are translated at the spot exchange rates
prevailing at the dates of the transactions.* Income and Expense Items in the Statement of Profit or Loss:
Income and expense items are translated at the spot exchange rates on the dates of the transactions or using
an approximate exchange rate that is a reasonable approximation of the spot rate on the transaction date.* Foreign Currency Cash Flows and Cash Flows of Foreign Subsidiaries:
Foreign currency cash flows and cash flows of foreign subsidiaries are translated at the spot exchange rates
on the dates of the cash flows or using an approximate exchange rate that is a reasonable approximation of
the spot rate on the date of the cash flow.The effect of exchange rate changes on cash and cash equivalents should be reported as a separate
reconciling item in the statement of cash flows.* Translation Differences Arising from the Translation of Foreign Financial Statements:
In the preparation of consolidated financial statements the resulting translation differences are presented
separately in the consolidated statement of financial position under equity as "other comprehensive
income."
When a foreign operation is disposed of and control is lost the cumulative translation differences related to
that foreign operation which are presented in the equity section of the balance sheet should be transferred
to profit or loss in full or proportionally depending on the extent of the disposal.
3.9 Financial instrument
The Company recognizes a financial asset a financial liability or an equity instrument when it becomes a
party to a financial instrument contract.
3.9.1 Classification of financial instruments
Based on the Company's business model for managing financial assets and the contractual cash flow
characteristics of financial assets financial assets are classified at initial recognition as financial assets
carried at amortized cost financial assets at fair value through other comprehensive income and financial
assets at fair value through profit or loss.The Company classifies financial assets at amortized cost that are not designated as
financial assets at fair value through profit or loss if they both meet the following criteria:
- The business model is to collect the contractual cash flows;
- The contractual cash flows are only payments of principal and interest based on the outstanding principal
amount.
60Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
The Company classifies financial assets as financial assets at fair value through other comprehensive
income (debt instruments) that are not designated as at fair value through profit or loss if they also meet the
following criteria:
- Operating model with the objective of both collecting the contractual cash flows and selling the financial
asset;
- The contractual cash flows are only payments on the principal and interest based on the outstanding
principal amount.For investments in non-trading equity instruments the Company may irrevocably
designate them at initial recognition as financial assets at fair value through other comprehensive income
(equity instruments). This designation is made on an individual investment basis and the related investment
meets the definition of an equity instrument from the perspective of the issuer.Except for the above-mentioned financial assets measured at amortized cost and financial assets at fair
value through other comprehensive income the Company classifies all remaining financial assets as
financial assets at fair value through profit or loss. On initial recognition the Company may irrevocably
designate financial assets that would otherwise be classified as financial assets at amortized cost or at fair
value through other comprehensive income as financial assets at fair value through profit or loss if it can
eliminate or significantly reduce the accounting mismatch.Financial liabilities are classified at initial recognition as financial liabilities at fair value through profit or
loss and financial liabilities at amortized cost.A financial liability maybe designated as a financial liability at fair value through profit or loss at initial
measurement if one of the following conditions is met:
* The designation eliminates or significantly reduces an accounting mismatch.* The management and performance evaluation of a portfolio of financial liabilities or a portfolio of
financial assets and financial liabilities is performed on a fair value basis in accordance with the enterprise's
risk management or investment strategy as set out in formal written documentation and reported to key
management personnel on this basis within the enterprise.* The financial liability contains embedded derivatives that are subject to separate splitting.
3.9.2 Recognition basis and measurement method of financial instruments
3.9.2.1 Financial assets measured at amortized cost
Financial assets measured at amortized cost including notes receivable accounts receivable other
receivables long-term receivables and debt investments are initially measured at fair value with related
transaction costs included in the initial recognition amount; accounts receivable that do not contain
significant financing components and those that the Company has decided not to consider financing
components that do not exceed one year are initially measured at contractual transaction prices.
61Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Interest calculated using the effective interest rate method during the holding period is recognized in profit
or loss.On recovery or disposal the difference between the acquisition price and the carrying amount of the
financial asset is recognized in profit or loss for the current period.
3.9.2.2 Financial assets at fair value through other comprehensive income (debt instruments)
Financial assets (debt instruments) at fair value through other comprehensive income include receivables
financing and other debt investments which are initially measured at fair value with related transaction
costs recognized in the initial recognition amount. The financial assets are subsequently measured at fair
value and changes in fair value are recognized in other comprehensive income except for interest
impairment loss or gain and exchange gain or loss calculated using the effective interest rate method.Upon derecognition the cumulative gain or loss previously recognized in other
comprehensive income is transferred from other comprehensive income and recognized in profit or loss for
the current period.
3.9.2.3 Financial assets at fair value through other comprehensive income (equity instruments)
Financial assets (equity instruments) at fair value through other comprehensive incomeincluding
investments in other equity instruments are initially measured at fair value with related transaction costs
recognized in the initial recognition amount. The financial assets are subsequently measured at fair value
with changes in fair value recognized in other comprehensive income. Dividends received are recognized in
current profit or loss.Upon derecognition the cumulative gain or loss previously recognized in other
comprehensive income is transferred from other comprehensive income and recognized in retained
earnings.
3.9.2.4 Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading derivative
financial assets and other non-current financial assets which are initially measured at fair value with
related transaction costs recognized in profit or loss. The financial assets are subsequently measured at fair
value with changes in fair value recognized in profit or loss for the period.
3.9.2.5 Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and
derivative financial liabilities which are initially measured at fair value with related transaction costs
recognized in profit or loss. The financial liabilities are subsequently measured at fair value with changes
in fair value recognized in profit or loss for the period.Upon derecognition the difference between the carrying amount and the consideration paid is recognized
in profit or loss for the current period.
3.9.2.6 Financial liabilities measured at amortized cost
62Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Financial liabilities measured at amortized cost include short-term borrowings notes payable accounts
payable other payables long-term borrowings bonds payable and long- term payables which are initially
measured at fair value with related transaction costs included in the initial recognition amount.Interest calculated using the effective interest rate method during the holding period is recognized in profit
or loss.Upon derecognition the difference between the consideration paid and the carrying amount of the financial
liability is recognized in profit or loss for the current period.
3.9.3 Basis of recognition and measurement of financial asset derecognition and financial asset
transfers
The Company derecognizes a financial asset when one of the following conditions is met:
- The contractual rights to receive cash flows from the financial asset are terminated;
- The financial asset has been transferred and substantially all the risks and rewards of ownership of the
financial asset have been transferred to the transferring party;
- A financial asset has been transferred and control over the financial asset is not retained although the
Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset.When the Company modifies or renegotiates a contract with a counterparty and the
modification constitutes a material change the original financial asset is derecognized and a new financial
asset is recognized in accordance with the modified terms.A financial asset is not derecognized if substantially all the risks and rewards of ownership of the financial
asset are retained when a transfer of the financial asset occurs.In determining whether a transfer of financial assets meets the above conditions for derecognition of
financial assets the principle of substance over formis applied.The Company distinguishes between transfers of financial assets as a whole and partial transfers of
financial assets. If the transfer of a financial asset as a whole meets the derecognition condition the
difference between the following two amounts is recognized in profit or loss for the current period:
* The carrying amount of the financial asset transferred;
* The sum of the consideration received for the transfer and the cumulative amount of changes in fair
value previously recognized directly in owners'equity (in the case where the transferred financial asset is a
financial asset (debt instrument) measured at fair value through other comprehensive income).If a partial transfer of a financial asset satisfies the derecognition condition the carrying amount of the
financial asset transferred as a whole is apportioned between the
derecognized portion and the unrecognized portion according to theirrespective relative
fair values and the difference between the following two amounts is recognized in profit or loss:
63Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
* The carrying amount of the derecognized portion;
* The sum of the consideration for the derecognized portion and the amount
corresponding to the derecognized portion of the cumulative amount of changes in fair value previously
recognized directly in owners'equity (in the case where the financial asset involved in the transfer is a
financial asset (debt instrument) measured at fair value through other comprehensive income).If the transfer of a financial asset does not meet the derecognition condition the financial asset continues to
be recognized and the consideration received is recognized as a financial liability.
3.9.4 Derecognition of financial liabilities
A financial liability or a portion thereof is derecognized when the present obligation of the financial
liability is discharged in whole or in part. If the Company enters into an agreement with a creditor to
replace an existing financial liability by assuming a new financial liability and the contractual terms of the
new financial liability are materially different from those of the existing financial liability the existing
financial liability is derecognized and a new financial liability is recognized at the sametime.If all or part of the contractual terms of an existing financial liability are substantially modified the existing
financial liability or part of it is derecognized and the modified financial liability is recognized as a new
financial liability at the sametime.When a financial liability is derecognized in whole or in part the difference between the carrying amount
of the derecognized financial liability and the consideration paid (including non-cash assets transferred or
new financial liabilities assumed) is recognized in profit or loss for the period.If the Company repurchases a portion of a financial liability the carrying amount of the financial liability
as a whole is allocated on the repurchase date based on the relative fair values of the portion that continues
to be recognized and the portion that is derecognized. The difference between the carrying amount
allocated to the derecognized portion and the consideration paid (including non-cash assets transferred or
new financial liabilities assumed) is recognized in profit or loss for the period.
3.9.5 Methods to determine the fair value of financial assets and financial liabilities
The fair value of financial instruments for which there is an active market is determined by quoted prices in
an active market. The fair value of financial instruments for which no active market exists is determined
using valuation techniques. In valuation the Company uses valuation techniques that are applicable in the
current circumstances and supported by sufficient available data and other information selects inputs that
are consistent with the characteristics of the asset or liability considered by market participants in
transactions for the relevant asset or liability and gives preference to the use of relevant observable inputs.Unobservable inputs are used only if the relevant observable inputs are not available or not practicable to
obtain.
64Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
3.9.6 Methods of testing and accounting for impairment of financial instrument
The Company estimates the expected credit losses on financial assets measured at
amortized cost financial assets at fair value through other comprehensive income (debt instruments) and
financial guarantee contracts etc.The Company recognizes expected credit losses by calculating the probability-weighted amount of the
present value of the difference between the cash flows receivable under the contract and the cash flows
expected to be received taking into account reasonable and substantiated information about past events
current conditions and forecasts of future economic conditions weighted by the risk of default.For receivables and contract assets resulting from transactions governed by ASBE No. 14 Revenue the
Company always measures its allowance for losses at an amount equal to the expected credit losses over
the entire duration regardless of whether or not there is a significant financing component.For lease receivables resulting from transactions regulated by ASBE No. 21 "Leases" the Company has
elected to always measure its allowance for losses at an amount equal to the expected credit losses over the
entire duration.For other financial instruments the Company assesses at each balance sheet date the change in credit risk
of the related financial instruments since initial recognition.The Company assesses whether the credit risk of a financial instrument has increased significantly since
initial recognition by comparing the risk of default of the financial instrument at the balance sheet date with
the risk of default at the date of initial recognition to determine the relative change in the risk of default
over the expected life of the financial instrument. The Company generally considers that the credit risk of a
financial instrument has increased significantly if it is more than 30 days past due unless there is
conclusive evidence that the credit risk of the financial instrument has not increased significantly since
initial recognition.If the credit risk of a financial instrument is low at the balance sheet date the Company considers that the
credit risk of the financial instrument has not increased significantly since initial recognition.If the credit risk of a financial instrument has increased significantly since initial
recognition the Company measures the allowance for losses at an amount equal to the expected credit
losses over the entire life of the financial instrument; if the credit risk of a financial instrument has not
increased significantly since initial recognition the Company measures the allowance for losses at an
amount equal to the expected credit losses of the financial instrument in the next 12 months. The resulting
increase or reversal amount of the loss allowance is recognized as an impairment loss or gain in profit or
loss. For financial assets (debt instruments) that are measured at fair value through other comprehensive
income the allowance for losses is recognized in other comprehensive income and the impairment loss or
gain is recognized in profit or loss for the current period and does not reduce the carrying amount of the
financial asset as stated in the balance sheet.The Company classifies the remaining financial instruments into several groups based on their credit risk
65Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
characteristics and determines the expected credit losses on a collective basis. The categories of groups for
which the Company recognizes expected credit losses including notes receivable accounts receivable
financing receivables other receivables contract assets and long-term receivables and the basis for
determining these groups are as follows:
3.9.6.1 Receivables
For the notes receivable accounts receivable other receivables accounts receivable financing and long-
term receivables which are demonstrated to be impaired by any objective evidence or applicable for
individual assessment the Company shall individually assess for impairment and recognize the loss
allowance for expected credit losses. If the Company determines that no objective evidence of impairment
exists for notes receivable accounts receivable other receivables accounts receivable financing and long-
term receivables or the expected credit loss of a single financial asset cannot be assessed at reasonable cost
such notes receivable accounts receivable other receivables accounts receivable financing and long-term
receivables shall be divided into several groups based on similar credit risk characteristics and calculate
collectively on the expected credit loss. The determination basis of groups is as following:
1)Notes Receivables
For notes receivable classified as portfolios the Company calculates expected credit losses based on default
exposure and expected credit loss rates throughout the life of the Company considering historical credit
loss experience combined with current conditions and the forecast of the future economic conditions.Item Basis for determining the groups
Bank acceptance bill The acceptor is a bank with less credit risk.Commercial acceptance bill According to the credit risk of the acceptor it should be the same as the
portfolios of accounts receivable.
2)Accounts Receivables
For receivables that do not contain significant financing components our company measures the loss
provision based on the expected credit loss amount over the entire duration of the receivable.For receivables that contain significant financing components and lease receivables our company always
measures the loss provision based on the expected credit loss amount over the duration of the receivable.Except for accounts receivable that are assessed individually for credit risk they are categorized into
different groups based on their credit risk characteristics.：
Item Basis for determining the groups
Aging of Accounts Receivables This group uses the accounts receivables aging as the credit risk
characteristics.Related parties Related party relationships (Unless there is evidence that a credit loss may
occur).
66Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
3) Other Receivables
The Company assesses whether the credit risk of other receivables has significantly increased since initial
recognition and utilizes the amount equivalent to the expected credit loss in the next 12 months or the
whole duration to measures the impairment loss accordingly. Besides the other receivables that have
individually assessed credit risk the rest of the other receivables are classified into different groups based
on their credit risk characteristics:
Item Basis for determining the groups
This group of receivables includes deposit receivables advances on behalf of others and
Deposit guarantee quality guarantee deposits to be collected in daily activities.This group is the declared export tax refund funds that have not been received.Export tax refund
This group uses the age of accounts receivable as the credit risk characteristics.Open credits
Related party relationships (Unless there is evidence that a credit loss may occur)
Related parties
The Company's aging calculation method based on the combination of aging recognition credit risk
characteristics:
The aging of accounts receivables for the portfolio of credit risk features recognized by aging is calculated
as follows:
Aging Accrual ratio（%）
Not overdue 0.50
1-30 days overdue 4.50
31-60 days overdue 20.00
61-90 days overdue 45.00
More than 90 days overdue 100.00
The aging of other receivables for the portfolio of credit risk features recognized by aging is calculated as
follows:
Aging Accrual ratio（%）
1-90 days 0.00
90-180 days 10.00
180-270 days 30.00
270-360 days 50.00
More than one year 100.00
3.9.6.2 Debt investment and other debt investment
For debt investment and other debt investment the Company shall calculate the expected credit loss
through the default exposure and the 12-month or lifetime expected credit loss rate based on the nature of
67Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
the investment counterparty and the type of risk exposure.
1)Low credit risk
If the financial instrument has a low risk of default the borrower has a strong capacity to meet its
contractual cash flow obligations in the near term and adverse changes in economic and business conditions
in the longer term may but will not necessarily reduce the ability of the borrower to fulfill its contractual
cash flow obligations.
2)Significant increase in credit risk
The Company shall assess whether the credit risk on a financial instrument has increased significantly since
initial recognition using the change in the risk of a default occurring over the expected life of the financial
instrument through the comparison of the risk of a default occurring on the financial instrument as at the
reporting date with the risk of a default occurring on the financial instrument as at the date of initial
recognition.To make that assessment the Company shall consider reasonable and supportable information that is
available without undue cost or effort and that is indicative of significant increases in credit risk since
initial recognition including forward-looking information. The information considered by the Company are
as following:
Significant changes in internal price indicators of credit risk as a result of a change in credit risk since
inception
Existing or forecast adverse change in the business financial or economic conditions of the borrower
that results in a significant change in the borrower’s ability to meet its debt obligations；
An actual or expected significant change in the operating results of the borrower; An actual or expected
significant adverse change in the regulatory economic or technological environment of the borrower；
Significant changes in the value of the collateral supporting the obligation or in the quality of third-party
guarantees or credit enhancements which are expected to reduce the borrower’s economic incentive to
make scheduled contractual payments or to otherwise influence the probability of a default occurring;
Significant change that are expected to reduce the borrower’s economic incentive to make scheduled
contractual payments;
Expected changes in the loan documentation including an expected breach of contract that may lead to
covenant waivers or amendments interest payment holidays interest rate step-ups requiring additional
collateral or guarantees or other changes to the contractual framework of the instrument；
Significant changes in the expected performance and behavior of the borrower；
Contractual payments are more than 30 days past due.Depending on the nature of the financial instruments the Company shall assess whether the credit risk has
increased significantly since initial recognition on an individual financial instrument or a group of financial
68Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
instruments. When assessed based on a group of financial instruments the Company can group financial
instruments on the basis of shared credit risk characteristics for example past due information and credit
risk rating.Generally the Company shall determine the credit risk on a financial asset has increased significantly since
initial recognition when contractual payments are more than 30 days past due. The Company can only rebut
this presumption if the Company has reasonable and supportable information that is available without
undue cost or effort that demonstrates that the credit risk has not increased significantly since initial
recognition even though the contractual payments are more than 30 days past due.If the company no longer reasonably expects to recover all or part of the contractual cash flows of a
financial asset the carrying amount of that financial asset shall be directly reduced.
3.10 Inventory
3.10.1 Category and cost of inventory
Inventories are classified as: raw materials work-in-progress in-house semi-finished goods finished goods
low-value consumables and goods in transit etc.Inventories are initially measured at cost which includes purchase costs processing costs and other
expenditures incurred to bring the inventories to their present location and condition.
3.10.2 Valuation method of issued inventory
The cost of inventories used or sold is determined on the weighted average basis.
3.10.3 inventory system
Adoption of perpetual inventory system.
3.10.4 Amortization method of low-value consumables and packaging
* Low-value consumables are amortized using the one-time reversal method;
* The one-time reversal method is used for packaging.
3.10.5 Recognition criteria and accrual method for provision for decline in value of inventories
Inventories are stated at the lower of cost and net realizable value. The excess of cost over net realizable
value of the inventories is recognised as provision for impairment of inventory and recognised in current
profit or loss.Net realizable value of the inventory should be determined on the basis of reliable evidence obtained and
factors such as purpose of holding the inventory and impact of post balance sheet event shall be considered.
69Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
* In normal operation process finished goods products and materials for direct sale their net realizable
values are determined at estimated selling prices less estimated selling expenses and relevant taxes and
surcharges; for inventories held to execute sales contract or service contract their net realizable values are
calculated based on contract price. If the quantities of inventories specified in sales contracts are less than
the quantities held by the Company the net realizable value of the excess portion of inventories shall be
based on general selling prices. Net realizable value of materials held for sale shall be measured based on
market price.* For materials in stock need to be processed in the ordinary course of production and business net
realisable value is determined at the estimated selling price less the estimated costs of completion the
estimated selling expenses and relevant taxes. If the net realisable value of the finished products produced
by such materials is higher than the cost the materials shall be measured at cost; if a decline in the price of
materials indicates that the cost of the finished products exceeds its net realisable value the materials are
measured at net realisable value and differences shall be recognised at the provision for impairment.* The company generally makes provision for inventory impairment based on an individual basis. For
inventories with large quantity and low unit price the provisions for inventory impairment are determined
on a category basis. Provision for impairment in the value of inventories is made for inventories held in
stock for more than 180 days based on the estimated realisable value of inventories sold by material
category group.* If any factor rendering write-downs of the inventories has been eliminated at the reporting date the
amounts written down are recovered and reversed to the extent of the inventory impairment which has
been provided for. The reversal shall be included in profit or loss.
3.11 Contract assets
3.11.1 Methods and criteria for recognition of contract assets
The Company presents contract assets or contract liabilities in the balance sheet based on the relationship
between the performance obligations and payments from customers. The right to receive consideration for
goods transferred or services provided by the Company to the customer (and which is dependent on factors
other than the passage of time) is presented as a contract asset. Contract assets and contract liabilities under
the same contract are shown on a net basis. The Company's unconditional (depending only on the passage
of time) right to receive consideration from customers is shown separately as receivables.
3.11.2 Method of determining expected credit losses on contract assets and accounting treatment
The methods of determining expected credit losses on contract assets and the accounting treatment are
described in detail in Note "III.9. (6)Methods of testing and accounting treatment for impairment of
Financial instrument" in this Note.
70Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
3.12 Long-term equity investments
3.12.1 Criteria for determining joint control and significant influence
Joint control refers to the control shared by an arrangement in accordance with the relevant agreement and
the relevant activities of the arrangement can only be decided with the unanimous consent of the
participants sharing the control. If the Company exercises joint control over an investee together with other
joint venture parties and has rights to the investee's net assets the investee is a joint venture of the
Company.Significant influence means having the power to participate in the financial and operating decisions of the
investee but not being able to control or exercise joint control with other parties over the formulation of
those policies. Where the Company is able to exercise significant influence over an investee the investee is
an associate of the Company.
3.12.2 Determination of initial investment
* Long-term equity investments resulting from business combinations
For long-term equity investments in subsidiaries formed by business combinations under common control
the initial investment of long-term equity investments is determined at the date of consolidation based on
the acquisition of the share of the ownership interest of the consolidated party in the book value of the
consolidated financial statements of the ultimate controlling party. The difference between the initial
investment cost of the long-term equity investment and the carrying value of the consideration paid is
adjusted against the equity premium in capital surplus; if the equity premium in capital surplus is not
sufficient for elimination retained earnings are adjusted. If the Company is able to exercise control over an
investee under the same control due to additional investment the difference between the initial investment
cost of the long-term equity investment recognized in accordance with the above principle and the sum of
the book value of the long-term equity investment before reaching the consolidation plus the book value of
the consideration paid for further acquisition of shares at the date of consolidation is adjusted against equity
premium and if the equity premium is not sufficient for elimination it is reduced against retained earnings.For long-term equity investments in subsidiaries formed through business combinations not under common
control the initial investment cost of the long-term equity investment is based on the cost of the
combination determined at the date of acquisition. If it is possible to exercise control over the investee
under non-same control due to additional investment the sum of the book value of the equity investment
originally held plus the cost of the additional investment is used as the initial investment cost.* Long-term equity investments acquired through other means instead of business combination
Long-term equity investments acquired by cash payment are recorded at initial investment cost based on
the actual purchase price paid.Long-term equity investments acquired by issuing equity securities are recorded at the initial investment
cost based on the fair value of the equity securities issued.
71Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
3.12.3 Subsequent measurement and profit or loss recognition methods
* Long-term equity investments accounted for under the cost method
The Company accounts for its long-term equity investments in subsidiaries using the cost method unless
the investments meet the conditions of being held for sale. Except for the declared but unpaid cash
dividends or profits included in the actual price or consideration paid for the investment the Company
recognizes investment income for the current period based on the Company's entitlement to the declared
cash dividends or profits of the investee.* Long-term equity investments accounted for under the equity method
Long-term equity investments in associates and joint ventures are accounted for using the equity method.The difference between the initial investment cost and the share of the fair value of the identifiable net
assets of the investee at the time of investment is not adjusted to the initial investment cost of the long-term
equity investment; the difference between the initial investment cost and the share of the fair value of the
identifiable net assets of the
investee at the time of investment is recognized in profit or loss for the current period and the cost of the
long-term equity investment is also adjusted.The Company recognizes investment income and other comprehensive income according to the share of net
profit or loss and other comprehensive income realized by the investee respectively and adjusts the
carrying value of the long-term equity investment at the same time; the portion to which the Company is
entitled according to the profit or cash dividends declared by the investee is calculated and the carrying
value of the long-term equity investment is reduced accordingly; for the investee's ownership interest other
than net profit or loss other comprehensive income and profit distribution For changes in the equity of the
investee other than net profit or loss other comprehensive income and profit distribution ("changes in other
owners'equity") the carrying amount of the long-term equity investment is adjusted and recognized in
owners' equity.In recognizing the share of the investee's net profit or loss other comprehensive income and other changes
in owners'equity the fair value of the investee's identifiable net assets at the time of acquisition is used as
the basis for recognition and the net profit and other comprehensive income of the investee are adjusted in
accordance with the Company's accounting policies and accounting periods.Unrealized gains or losses on internal transactions between the company and associate and joint ventures
that are attributable to the Company on the basis of their proportionate share are offset and investment
income is recognized on this basis except when the assets invested or sold constitute a business.Unrealized losses on internal transactions with investees are recognized in full if there are impairment
losses on assets.The net loss incurred by the company in a joint venture or an associate except for the obligation to assume
additional losses is limited to a write-down to zero of the carrying amount of the long-term equity
investment and other long-term interests that substantially constitute the net investment in the joint venture
72Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
or associate. If the joint venture or associate subsequently realizes net profit the Company resumes
recognition ofrevenue sharing after the revenue sharing amount makes up for the unrecognized loss sharing
amount.* Disposal of long-term equity investments
The difference between the carrying amount and the actual acquisition price of a long-term equity
investment is recognized in profit or loss for the current period.If a long-term equity investment accounted for under the equity method is partially disposed of and the
remaining equity interest is still accounted for under the equity method the other comprehensive income
recognized under the former equity method is carried forward in proportion to the corresponding
percentage using the same basis as the direct disposal of the related assets or liabilities by the investee and
other changes in owners'equity are carried forward in proportion to the current profit or loss.If the common control or significant influence over the investee is lost due to the disposal of equity
investments etc. other comprehensive income recognized as a result of the adoption of the equity method
of accounting for the original equity investment is accounted for on the same basis as the direct disposal of
the related assets or liabilities of the investee upon the termination of the adoption of the equity method of
accounting and all changes in other owners'equity are transferred to current profit or loss upon the
termination of the adoption of the equity method of accounting.If control over the investee is lost due to disposal of part of the equity investment the remaining equity
interest that can exercise joint control or significant influence over the investee is accounted for under the
equity method in the preparation of individual financial statements and the remaining equity interest is
adjusted as if it had been accounted for under the equity method from the time of acquisition and other
comprehensive income recognized prior to the acquisition of control over the investee is accounted for on
the same basis as if the investee had directly disposed of the related assets or liabilities. If the remaining
equity interest cannot exercise joint control or significant influence over the investee it is recognized as a
financial asset and the difference between its fair value and its carrying amount at the date of loss of
control is recognized in profit or loss for the
current period and for other comprehensive income and other owner's equity recognized prior to the
acquisition of control of the investee the remaining equity interest is recognized in profit or loss for the
current period. All other comprehensive income and other changes in owners'equity recognized prior to the
acquisition of control of the investee are carried forward.If the disposal of an equity investment in a subsidiary through multiple transactions until the loss of control
is a package transaction each transaction is accounted for as a disposal of an equity investment in a
subsidiary and the loss of control; the difference between the disposal price and the carrying value of the
long-term equity investment corresponding to the equity interest disposed of before the loss of control is
recognized as other comprehensive income in the individual financial statements and then recognized as
other comprehensive income when control is lost. The difference between the disposal price and the
73Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
carrying amount of the long-term equity investment before the loss of control is recognized as other
comprehensive income in the individual financial statements and then transferred to profit or loss in the
period in which control is lost. If it is not a package transaction each transaction is accounted for separately.
3.13 Investment properties
Investment property refers to real estate held to earn rentals or for capital appreciation or both. It includes
land use rights that have been leased out land use rights held and intended to be transferred after
appreciation and buildings that have been leased out (including buildings constructed or developed by the
company for leasing purposes as well as buildings under construction or development intended for future
leasing).Subsequent expenditures related to investment property shall be included in the cost of the investment
property if it is probable that the associated economic benefits will flow to the entity and the cost can be
measured reliably; otherwise they are recognized in profit or loss for the period when incurred.The company measures existing investment property using the cost model. For investment property - leased
buildings measured at cost the same depreciation policy applied to the company's fixed assets is used. The
amortization policy for leased land use rights follows the same approach as for intangible assets.
3.14 Fixed Assets
3.14.1 Recognition and initial measurement of fixed assets
Fixed assets are tangible assets held for the production of goods provision of services rental or
management and with a useful life of more than one fiscal year . A fixed asset is recognized when both of
the following conditions are met:
* It is probable that the economic benefits associated with the fixed asset will flow to the enterprise;
* The cost of the fixed asset can be measured reliably.Fixed assets are initially measured at cost (taking into account the effect of expected disposal costs).Subsequent expenditures related to fixed assets are included in the cost of fixed assets when it is probable
that the economic benefits associated with them will flow to the enterprise and their cost can be measured
reliably; for the replaced part the carrying amount is derecognized; all other subsequent expenditures are
charged to current profit or loss when incurred.
3.14.2 Depreciation Method
Depreciation of fixed assets is provided using the average annual method and the depreciation rate is
determined based on the category of fixed assets estimated useful life and estimated net residual value rate.For fixed assets with provision for impairment the depreciation amount is determined in future periods
based on the carrying amount after deducting the provision for impairment and based on the remaining
74Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
useful life. If each component of fixed assets has different useful lives or provides economic benefits to the
enterprise in different ways different depreciation rates or depreciation methods are selected and
depreciated separately.The depreciation methods useful lifes residual value rate and annual depreciation rates of various types of
fixed assets are as follows:
Depreciation
Category method Residual Estimated useful life Annual depreciationrates (%) (year) rates (%)
Straight-line
Buildings and constructions 7.00-10.00 12-20 4.50-7.50
method
Straight-line
Machinery equipment 0.00 4-15 6.67-25.00
method
Electrical equipment Model Straight-line
and other 0.00 5-6 16.67-20.00
method
Straight-line
Vehicles 0.00 6-11 9.09-16.67
method
Straight-line
Improvement expenditure of Amortisation shall be made according to the
leased fixed assets method 0.00
shorter of benefit period and lease period
3.14.3 Disposal of fixed assets
Fixed assets are derecognized when they are disposed of or when no economic benefits are expected to
arise from their use or disposal. The disposal proceeds from the sale transferscrapping or destruction of
fixed assets net of their book value and related taxes and fees are recognized in profit or loss for the
current period.
3.15 Construction in progress
Construction in progress is measured at its actual incurred costs. Actual costs include construction costs
installation costs borrowing costs eligible for capitalization and other necessary expenditures incurred to
bring the construction in progress to its intended usable state. When the construction in progress reaches its
intended usable state it is transferred to property plant and equipment (fixed assets) and depreciation
begins from the following month.For fixed assets that have reached their intended usable state but have not yet completed final settlement
procedures they are provisionally transferred to fixed assets at estimated values based on project budgets
cost estimates or actual incurred costs from the date they reach their intended usable state. Depreciation is
calculated according to the company's fixed asset depreciation policy. Once the final settlement procedures
75Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
are completed the originally estimated provisional values are adjusted to reflect the actual costs but
previously recognized depreciation amounts are not adjusted.
3.16 Borrowing Costs
3.16.1 Recognition Principles for Capitalization of Borrowing Costs
Borrowing costs directly attributable to the acquisition or construction of qualifying assets are capitalized
and included in the cost of those assets. Other borrowing costs are recognized as an expense when they are
incurred and included in profit or loss for the period.A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use
or sale such as property plant and equipment investment property and inventories.
3.16.2 Period of Capitalization of Borrowing Costs
The capitalization period refers to the duration from the start of capitalizing borrowing costs until the
cessation of capitalization excluding periods when capitalization is suspended.Borrowing costs begin to be capitalized when all the following conditions are met:
* Expenditure on the asset has been incurred which includes payments made in cash non-cash
consideration or liabilities bearing interest for the acquisition or production of a qualifying asset.* Borrowing costs have been incurred.* Activities necessary to prepare the asset for its intended use or sale have commenced. Capitalization of
borrowing costs ceases when the qualifying asset is ready for its intended use or sale.
3.16.3 Suspension of Capitalization Period
If there is an abnormal interruption during the construction or production of a qualifying asset and the
interruption lasts continuously for more than three months the capitalization of borrowing costs should be
suspended. However if the interruption is a necessary part of the process for preparing the asset for its
intended use or sale borrowing costs continue to be capitalized. During the suspension period borrowing
costs are recognized as an expense until the construction or production activities resume.
3.16.4 Calculation Methods for Capitalization Rate and Amount of Borrowing Costs
For specific borrowings taken out to acquire or construct a qualifying asset the amount of borrowing costs
to be capitalized is determined by subtracting the interest income earned from depositing unused funds in a
bank or from temporary investments from the actual borrowing costs incurred during the period.For general borrowings used to acquire or construct a qualifying asset the amount of borrowing costs to be
capitalized is calculated by multiplying the weighted average of the expenditures exceeding the amount of
specific borrowings by the capitalization rate of the general borrowings. The capitalization rate is based on
76Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
the weighted average effective interest rate of the general borrowings.During the capitalization period exchange differences arising from foreign currency denominated specific
borrowings and their interest are capitalized and included in the cost of qualifying assets. Exchange
differences arising from other foreign currency borrowings and their interest are recognized as expenses in
profit or loss.
3.17 Intangible assets
3.17.1 Valuation method of intangible assets
* The company initially measures intangible assets at cost when they are acquired;
The cost of an externally acquired intangible asset includes the purchase price related taxes and other
expenses directly attributable to bringing the asset to its intended use.* Subsequent measurement
The useful life of an intangible asset is analyzed and determined at the time of acquisition.For intangible
assets with finite useful lives they are amortized over the period in which they bring economic benefits to
the enterprise; if the period in which the intangible assets bring economic benefits to the enterprise cannot
be fores een they are considered to be intangible assets with indefinite useful lives and are not amortized.
3.17.2 The useful life and amortisation of intangible assets
Category Estimated useful life Basis
Land use right 20-50years Legal right of use
The service life is determined by reference to the period that can
Software 3-5years bring economic benefits to the Company
3.17.3 Criteria for Judging Indefinite-Lived Intangible Assets and Procedures for Reviewing Their
Useful Lives Indefinite-Lived Intangible Assets
For intangible assets with an indefinite useful life no amortization is recognized. These assets are not
amortized because their useful lives cannot be reliably estimated.At the end of each annual period the useful life of indefinite-lived intangible assets should be reviewed. If
evidence indicates that the useful life of an intangible asset is actually finite its useful life should be
estimated and the asset should be amortized systematically and rationally over its estimated useful life.
3.17.4 Scope of Research and Development(R&D) expenditure Classification
The Company classifies all costs directly related to the conduct of research and development activities as
research and development expenses including research and development employee compensation
depreciation and amortisation expenses testing expenses maintenance expenses patent fees and other
expenses.
77Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
3.17.5 Specific criteria for classifying research and development phases
Expenditures on in-house research and development projects are categorized into research stage
expenditures and development stage expenditures.Research stage: the stage of original and planned investigation and research activities for the purpose of
acquiring and understanding new scientific or technological knowledge.Development phase: the stage of applying research results or other knowledge to a plan or design to
produce new or substantially improved materials devices products and other activities before commercial
production or use.
3.17.6 The specific conditions for capitalization of development stage expenditures
Expenditures in the research stage are recognized in profit or loss when they are incurred. Expenditures in
the development phase are recognized as intangible assets if the following conditions are met. Expenditures
in the development phase that do not meet the following conditions are recognized in the current period's
profit or loss:
* It is technically feasible to complete the intangible asset so that it can be used or sold;
* There is an intention to complete the intangible asset for use or sale;
* The manner in which the intangible asset will generate economic benefits including the ability to
demonstrate the existence of a market for the products produced by applying the intangible asset or the
existence of a market for the intangible asset itself and the usefulness of the intangible asset if it will be
used internally;
* The availability of sufficient technical financial and other resources to support the completion of the
development of the intangible asset and the ability to use or sell the intangible asset;
* Expenditures attributable to the development phase of the intangible asset can be measured reliably.If it is not possible to distinguish between research-phase expenditures and development-phase
expenditures all research and development expenditures incurred are recognized in the current period's
profit or loss.
3.18 Impairment of long term assets
Long-term equity investments investment properties measured using the cost model fixed assets
construction in progress right-of-use assets intangible assets with finite useful lifesoil and gas assets and
other long-term assets are tested for impairment if there is an indication of impairment at the balance sheet
date. If the result of the impairment test
indicates that the recoverable amount of an asset is less than its carrying amount a provision for
impairment is made for the difference and an impairment loss is recorded.The recoverable amount is the higher of the asset's fair value less costs of disposal and the present value of
78Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
estimated future cash flows of the asset. The provision for asset impairment is calculated and recognized on
an individual asset basis. If it is difficult to estimate the recoverable amount of an individual asset the
recoverable amount of the asset group is determined using the asset group to which the asset belongs. An
asset group is the smallest combination of assets that can generate cash inflows independently.For goodwill resulting from business combinations intangible assets with indefinite useful lives and
intangible assets that have not yet reached a serviceable status impairment tests are performed once a year
at the end of each year regardless of whether there is an indication of impairment.The Company conducts goodwill impairment tests and apportions the carrying value of
goodwill formed as a result of a business combination to the relevant asset group from the date of purchase
in accordance with a reasonable method; if it is difficult to apportion to
the relevant asset group it is apportioned to the relevant asset group combination. A relevant asset group or
a combination of asset groups is an asset group or a combination of asset groups that can benefit from the
synergistic effect of a business combination. When impairment test of the relevant asset group or
combination of asset groups that contain goodwill if there is an indication of impairment of the asset group
or combination of asset groups related to goodwill the asset group or combination of asset groups that do
not contain goodwill is first tested for impairment the recoverable amount is calculated
and compared with the relevant carrying amount and a corresponding impairment loss is
recognized. If the recoverable amount is less than the carrying amount the impairment loss is first reduced
by the carrying amount of goodwill apportioned to the asset group or group of assets and then reduced by
the carrying amount of each asset group or group of assets other than goodwill in proportion to its
proportionate share of the carrying amount of the other assets. The carrying value of each asset is then
reduced by the carrying value of each asset other than goodwill.Once the above impairment loss is recognized it will not be reversed in subsequent accounting periods.
3.19 Long-term Deferred Expenses
Long-term deferred expenses are various expenses already incurred which shall be amortized over current
and subsequent periods with the amortization period exceeding one year.Long-term deferred expenses are amortized on a straight-line basis during the benefit period.
3.20 Contract liability
An entity’s obligation to transfer goods or services to a customer for which the entity has received
consideration (or the amount is due) from the customer. Contract asset and contract liability originate from
same contact shall be listed at net amount.
3.21 Employee compensation
3.21.1 Accounting for short-term compensation
79Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
The Company recognizes actual short-term compensation incurred by employees as a liability in the
accounting period in which the employees provide services to the Company and recognizes it in the current
profit or loss or the cost of related assets.The social insurance premiums and housing fund paid by the Company for its employees as well as the
labor union funds and employee education funds withdrawn in accordance with regulations are used to
determine the corresponding amount of employee compensation in accordance with the prescribed accrual
basis and accrual ratio during the accounting period in which the employees provide services to the
Company.Employee benefit expenses incurred by the Company are charged to current profit or loss or the cost of
related assets based on the actual amount incurred when incurred of which non-monetary benefits are
measured at fair value.
3.21.2 Accounting for post-employment benefits
3.21.2.1 Defined contribution plan
The Company contributes to basic pension and unemployment insurance for employees in accordance with
the relevant local government regulations. During the accounting period in which the employees provide
services to the Company the amount payable is calculated based on the contribution base and ratio set by
the local regulations recognized as a liability and charged to current profit or loss or cost of related assets.In addition the Company participates in an enterprise annuity plan/supplemental pension fund approved by
the relevant state authorities. The Company contributes a certain percentage of the employees' total salaries
to the annuity plans/local social insurance agencies and the corresponding expenses are recognized in the
current profit or loss or cost of related assets.
3.21.2.2 Defined benefit plans
The Company attributes the benefit obligations arising from the defined benefit plans to the period in which
the employees render services in accordance with the formula determined by the expected accumulated
benefit unit method and recognizes them in current profit or loss or cost of related assets.The deficit or surplus resulting from the present value of the defined benefit plan obligation less the fair
value of the defined benefit plan assets is recognized as a net defined benefit plan liability or net asset. If a
defined benefit plan has a surplus the Company measures the net defined benefit plan asset at the lower of
the surplus or asset limit of the defined benefit plan.All defined benefit plan obligations including those expected to be paid within twelve months after the end
of the annual reporting period in which employees render services are discounted based on market yields
on treasury bonds or high-quality corporate bonds in active markets that match the maturity and currency of
the defined benefit plan obligations as of the balance sheet date.The service cost incurred by the defined benefit plan and the net interest on the net
liabilities or net assets of the defined benefit plan are recognized in profit or loss or the cost of the related
80Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
assets; changes resulting from theremeasurement of the net liabilities or net assets of the defined benefit
plan are recognized in other comprehensive income and are not reversed to profit or loss in subsequent
accounting periods and the entire portion previously recognized in other comprehensive income is carried
forward to unrecognized earnings to the extent of equity upon termination of the original defined benefit
plan. The portion of other comprehensive income withinequity is transferred to unappropriated earnings
upon termination of the defined benefit plan.Upon settlement of a defined benefit plan again or loss on settlement is recognized as the difference
between the present value of the defined benefit plan obligation and the settlement price determined at the
settlement date.
3.21.3 Accounting for termination benefits
If the Company provides termination benefits to employees it recognizes employee compensation
liabilities arising from termination benefits and recognizes them in profit or loss at the earlier of: when the
Company cannot unilaterally withdraw termination benefits provided as a result of a termination plan or a
proposed reduction in force; and when the Company recognizes costs or expenses related to a restructuring
involving the payment of termination benefits.
3.22 Accrued liabilities
The Company recognizes an obligation related to a contingent event as an accrued liabilities when the
following conditions are simultaneously mets:
* The obligation is a present obligation assumed by the Company;
* It is probable that the performance of the obligation will result in an outflow of economic benefits to the
Company;
* The amount of the obligation can be measured reliably.A provision is initially measured at the best estimate of the expenditure required to settle the related present
obligation.In determining the best estimate the risks associated with the contingency uncertainty and the time value
of money are considered. Where the effect of the time value of money is material the best estimate is
determined by discounting the related future cash outflows.Where a continuous range of expenditures required exists and it is equally probable that various outcomes
will occur within that range the best estimate is determined at the mid- point of the range; in other cases
the best estimate is treated separately as follows:
- Where the contingency relates to a single item the best estimate is determined in accordance with the
most probable occurrence amount.
81Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
- If the contingency involves multiple items it is determined on the basis of various possible outcomes and
related probabilities.If all or part of the expenditure required to settle the estimated liability is expected to be reimbursed by
athird party the amount of reimbursement is recognized separately as an asset when it is substantially
certain that it will be received and the amount of reimbursement recognized does not exceed the carrying
amount of the estimated liability.The Company reviews the carrying amount of the estimated liability at the balance sheet date and if there
is conclusive evidence that the carrying amount does not reflect the current best estimate the carrying
amount is adjusted in accordance with the current best estimate.
3.23 Revenue
3.23.1 Accounting policies used for revenue recognition and measurement
The Company recognizes revenue when it has fulfilled its performance obligations under a contract i.e.when the customer obtains control of the relevant goods or services. The acquisition of control of the
relevant goods or services is defined as the ability to dominate the use of the goods or services and derive
substantially all of the economic benefits therefrom.If a contract contains two or more performance obligations the Company apportions the transaction price
to each individual performance obligation on the contract commencement date in proportion to the relative
share of the individual selling price of the goods or services promised by each individual performance
obligation. The Company measures revenue based on the transaction price apportioned to each individual
performance obligation.The transaction price is the amount of consideration to which the Company expects to be entitled as a result
of the transfer of goods or services to the customer excluding amounts collected on behalf of third parties
and amounts expected to be refunded to the customer. The Company determines the transaction price in
accordance with the terms of the contract taking into account its past customary practices and considers
the impact of variable consideration the existence of significant financing components in the contract non-
cash consideration and consideration payable to the customer in determining the transaction price. The
Company determines the transaction price that includes variable consideration by an amount that does not
exceed the amount for which it is highly probable that there will be no material reversal of the cumulative
recognized revenue at the time the relevant uncertainty is removed. If there is a significant financing
component in the contract the Company determines the transaction price based on the amount payable in
cash assuming that the customer will pay for the goods or services as soon as control is obtained and
amortizes the difference between this transaction price and the contract consideration using the effective
interest rate method over the term of the contract.
82Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Performance obligations are fulfilled within a certain period of time if one of the following conditions is
met otherwise performance obligations are fulfilled at a certain point in time:
- The customer obtains and consumes the economic benefits resulting from the Company's performance at
the sametime as the Company's performance.- The customer is able to control the goods under construction in the course of the Company's performance.- The goods produced in the course of the Company's performance have irreplaceable use and the
Company is entitled to receive payment for the portion of the performance that has been completed to date
in the aggregate throughout the term of the contract.For performance obligations performed within a certain period of time the Company recognizes revenue in
accordance with the progress of performance during that period
except when the progress of performance cannot be reasonably determined. The Company uses the output
method or input method to determine the progress of performance taking into account the nature of the
goods or services. When the progress of performance cannot be reasonably determined the Company
recognizes revenue in the amount of costs already incurred until the progress of performance can be
reasonably determined if the costs already incurred are expected to be reimbursed.For performance obligations performed at a point in time the Company recognizes revenue at the point in
time when the customer obtains control of the related goods or services. In determining whether the
customer has acquired control of the goods or services the Company considers the following indications:
- The Company has a present right to receive payment for the goods or services i.e. the customer has a
present obligation to pay for the goods or services.- The Company has transferred legal title to the goods to the customer i.e. the customer has legal title to
the goods.- The Company has transferred physical possession of the goods to the customer i.e. the customer has
taken physical possession of the goods.- The Company has transferred the principal risks and rewards of ownership of the goods to the customer
i.e. the customer has acquired the principal risks and rewards of ownership of the goods.- The customer has accepted the goods or services etc.The Company determines whether its status is that of a principally liable person or an agent at the time of
engaging in a transaction based on whether it has control over the goods or services prior to transferring
them to the customer. If the Company is able to control the goods or services prior to transferring them to
the customer the Company is the principal and recognizes revenue based on the total consideration
received or receivable; otherwise the Company is the agent and recognizes revenue based on the amount of
commissions or fees it expects to be entitled to receive.
83Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
3.23.2 Disclosure of specific revenue recognition and measurement methods by business type
3.23.1.1 Sale of goods
The sales contract between the Company and the customer includes the performance obligation of
transferring the goods which belongs to the performance obligation at a certain point in time.Recognition of domestic sales product revenue must meet the following conditions: the Company has
delivered the products to the customer according to the contract and the customer has accepted the products;
the payment has been recovered or the receipt of payment has been obtained and the relevant economic
benefits are likely to flow in; the main risks and rewards of the ownership of the goods have been
transferred and the legal ownership of the goods has been transferred.Recognition of exporting revenue must meet the following conditions: The Company recognizes revenue
for exporting goods based on the sales contracts or sales orders regardless of the sales model adopted. For
sales model of FOB the revenue is recognised after the products are shipped and the customs declaration
and export formalities are handled; For sales model of FCA the revenue is recognised when products are
delivered to the carrier designated by the buyer
Treatment of sales return: according to the general rules of international trade the adoption of FOB and
CIF settlement indicates that the buyer has accepted the purchased goods at the place of shipment and the
relevant risks have been undertaken by the buyer after the acceptance and shipment. Therefore the
Company does not make provision for the above matters separately but directly records them into the
profits and losses in the current period.Processing of product claims: the estimated claim expense rate is calculated based on the actual claim
amount in the past two years (excluding special claims) as a percentage of the annual sales revenue and
accrued at period end based on the current sales revenue and the estimated claim expense rate to recognize
the claim expenses for products sold in the current period.
3.23.1.2 Service contract
The performance obligation of the service contract between the Company and the customer. Since the
customer obtains and consumes the economic benefits brought by the Company’s performance at the
same time as the Company fulfills the contract the Company recognises it as a performance obligation
performed within a certain period of time and amortized equally during the service provision period.
3.23.1.3 Construction contract
For the performance obligation of the construction contract between the Company and the customer since
the customer can control the goods under construction in the process of the Company's performance the
Company takes it as the performance obligation to perform in a certain period of time and recognizes the
income according to the performance progress except that the performance progress cannot be reasonably
determined. The Company determines the progress of the performance of providing services in accordance
with the output method. The progress of the performance shall be determined according to the proportion of
the completed contract workload to the expected total contract workload. On the balance sheet date the
84Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Company re-estimates the progress of completed performance or completed services to reflect the changes
in performance.
3.24 Government grants
3.24.1 Types
Government grants which are monetary or non-monetary assets acquired by the Company from the
government without compensation are classified as asset-related government grants and revenue-related
government grants.Government grants related to assets are obtained by the Company for the acquisition and construction or
otherwise forming long-term assets. Revenue-related government grants refer to government grants other
than asset-related government grants.The specific criteria for the Company to classify government grants as asset-related are: government grants
obtained by the Company and used for the acquisition and construction or otherwise forming long-term
assets.The Company's specific criteria for classifying government grants as revenue-related are: government
grants other than those related to assets.
3.24.2 Recognition point
Government grants are recognized when the Company is able to meet the conditions attached to them and
when they can be received.
3.24.3 Accounting treatment
Government grants related to assets are reduced to the carrying amount of the relevant assets or recognized
as deferred income. If recognized as deferred income it is recognized in profit or loss in accordance with a
reasonable and systematic method in installments over the useful life of the relevant assets (if it is related to
the Company's daily activities it is recognized in other income; if it is not related to the Company's daily
activities it is recognized in non-operating income);
Government grants related to revenue which are used to compensate the Company for relevant costs and
expenses or losses in subsequent periods are recognized as deferred revenue and charged to current profit
or loss (to other income if they are related to the Company's ordinary activities; to non-operating income if
they are not related to the Company's ordinary activities) or offset against relevant costs and expenses or
losses in the period in which the relevant costs and expenses or losses are recognized; to compensate the
Company for If it is used to compensate the Company for the related costs or losses incurred it is directly
recognized in profit or loss (other income if it is related to the Company's daily activities; non-operating
income if it is not related to the Company's daily activities) or reduced by the related costs or losses.The company receives preferential loan subsidies under two distinct scenarios each requiring specific
85Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
accounting treatment:
* If the fiscal authority provides the subsidy funds to the lending bank which then offers loans to the
company at a preferential interest rate we record the loan at the actual amount received. The borrowing
costs are calculated based on the principal amount of the loan and the preferential interest rate.* If the fiscal authority directly pays the subsidy funds to the company we offset the corresponding
subsidy against the related borrowing costs.
3.25 Deferred income tax assets and deferred income tax liabilities
Income taxes consist of current income taxes and deferred income taxes. The Company
recognizes current income tax and deferred income tax in profit or loss except for income tax arising from
business combinations and transactions or events directly recognized in owners'equity (including other
comprehensive income).Deferred income tax assets and deferred income tax liabilities are recognized based on the
difference between the tax basis of assets and liabilities and their carrying amounts (temporary differences).Deferred tax assets are recognized for deductible temporary differences to the extent that it is probable that
taxable income will be available in future periods against which the deductible temporary differences can
be utilized. For deductible losses and tax credits that can be carried forward to future years deferred tax
assets are recognized to the extent that it is probable that future taxable income will be available against
which the deductible losses and tax credits can be utilized.Deferred income tax liabilities are recognized for taxable temporary differences except under special
circumstances.The special circumstances under which deferred tax assets or deferred tax liabilities are not recognized
include
- Initial recognition of goodwill;
- Transactions or events that are neither business combinations nor at the time of their occurrence affect
accounting profit and taxable income (or deductible losses) and for which the initial recognition of assets
and liabilities does not result in taxable temporary differences and deductible temporary differences of an
equivalent amount.Deferred income tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries associates and joint ventures unless the Company is able to control the timing
of the reversal of the temporary difference and it is probable that the temporary difference will not reverse
in the foreseeable future. Deferred income tax assets are recognized for deductible temporary differences
associated with investments in
subsidiaries associates and joint ventures when it is probable that the temporary differences will reverse in
the foreseeable future and it is probable that future taxable income will be available against which the
86Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
deductible temporary differences can be utilized.At the balance sheet date deferred income tax assets and deferred income tax liabilities are measured at the
tax rates applicable to the periods when the related assets are expected to be recovered or the related
liabilities settled in accordance with the tax laws.At the balance sheet date the Company reviews the carrying amount of deferred tax assets. The carrying
amount of deferred tax assets is written down if it is more likely than not that sufficient taxable income
will not be available in future periods to offset the benefit of the deferred tax assets. To the extent that it is
probable that sufficient taxable income will be available the written down amount is reversed.When there is a legal right to settle on a net basis and the intention is to settle on a net basis or to acquire
assets and settle liabilities simultaneously current income tax assets and current income tax liabilities are
stated at the net amount after offsetting.At the balance sheet date deferred income tax assets and deferred income tax liabilities are presented on a
net basis after offsetting when both of the following conditions are met:
- The taxable entity has the legal right to settle current income tax assets and current income tax liabilities
on a net basis;
- Deferred income tax assets and deferred income tax liabilities relate to income taxes
levied by the same tax authority on the same taxable entity or to different taxable entities but in each future
period in which it is significant that the deferred income tax assets and
liabilities reverse the taxable entities involved intend to settle the current income tax assets and liabilities
on a net basis or to acquire the assets and The reversal of deferred income tax assets and liabilities is a
significant transaction.
3.26 Lease
A lease is a contract in which the lessor cedes the right to use an asset to the lessee for a
certain period of time for consideration. At the inception date of the contract the Company assesses
whether the contract is a lease or contains a lease. A contract is a lease or contains a lease if one party to the
contract cedes the right to control the use of one or more identified assets for a certain period of time in
exchange for consideration.If a contract contains several separate leases the Company splits the contract and accounts for each
separate lease separately. If a contract contains both lease and non-lease components the lessee and the
lessor split the lease and non-lease components.
3.26.1 The Company as lessee
3.26.1.1 Right-of-use assets
At the commencement date of the lease term the Company recognizes right-of-use assets for leases other
87Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
than short-term leases and leases of low-value assets. Right-of-use assets are initially measured at cost. This
cost includes:
- the initial measurement amount of the lease liability;
- the amount of lease payments made on or before the commencement date of the lease term net of
amounts related to lease incentives taken if lease incentives exist;
- the initial direct costs incurred by the Company;
- costs that the Company expects to incur to disassemble and remove the leased assetrestore the site where
the leased asset is located or restore the leased asset to the condition agreed upon under the terms of the
lease excluding costs that are part of the costs incurred to produce the inventory.The Company subsequently depreciates right-of-use assets using the straight-line method. If it is reasonably
certain that ownership of the leased asset will be obtained at the end of the lease term the Company
depreciates the leased asset over its remaining useful life;otherwise the leased asset is depreciated over the
shorter of the lease term or the remaining useful life of the leased asset.The Company determines whether a right-of-use asset is impaired and accounts for the identified
impairment loss in accordance with the principles described in Note III.9 "Impairment of Long-lived
Assets".
3.26.1.2 Lease liabilities
The Company recognizes a lease liability for leases other than short-term leases and leases of low-value
assets at the commencement date of the lease term. Lease liabilities are initially measured at the present
value of the outstanding lease payments. Lease payments consist of
- fixed payments (including material fixed payments) net of amounts related to lease incentives if lease
incentives exist;
- variable lease payments that are dependent on an index or rate;
- payments expected to be payable based on the residual value of the guarantee provided by the company;
- the exercise price of the purchase option provided that the company reasonably determines that it will
exercise the option;
- the amount to be paid upon exercise of the option to terminate the lease provided that the lease term
reflects that the Company will exercise the option to terminate the lease.The Company uses the interest rate embedded in the lease as the discount rate but if the interest rate
embedded in the lease cannot be reasonably determined the Company'sincremental borrowing rate is used
as the discount rate.The Company calculates the interest expense on the lease liability for each period of the lease term based
on a fixed periodic interest rate which is included in the current profit or loss or the cost of the related
88Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
asset.Variable lease payments that are not included in the measurement of the lease liability are charged to
current profit or loss or the cost of the related assets when they are actually incurred.After the commencement date of the lease term the Company remeasures the lease
liability and adjusts the corresponding right-of-use asset if the carrying value of the right- of-use asset has
been reduced to zero but the lease liability still needs to be further reduced the difference is recognized in
profit or loss for the current period:
- When there is a change in the valuation of the purchase option lease renewal option or termination option
or when the actual exercise of the aforementioned options is not consistent with the original valuation the
Company remeasures the lease liability at the present value calculated by the changed lease payments and
the revised discount rate;
- When there is a change in the substantive fixed payment amount a change in the amount expected to be
payable for the guaranteed residual value or a change in the index or rate used to determine the lease
payment amount the Company remeasures the lease liability at the present value calculated from the
changed lease payment amount and the original discount rate. However if the change in the lease payment
amount results from a change in the floating interest rate the present value is calculated using the revised
discount rate.
3.26.1.3 Short-term leases and leases of low-value assets
The Company has elected not to recognize right-of-use assets and lease liabilities for short- term leases and
leases of low-value assets and to recognize the related lease payments in current profit or loss or the cost of
the related assets on a straight-line basis over each period of the lease term. Short-term leases which
areleases with a lease term of not more than 12 months at the commencement date of the lease term and do
not include a purchase option. Low-value asset leases which areleases with a lower value when the single
leased asset is a brand-new asset. If the company subleases or expects to sublease the leased assets the
original lease is not a low-value asset lease.
3.26.1.4 Change of lease
If a lease is changed and the following conditions are met at the sametime the company will account for
the lease change as a separate lease:
- the lease modification expands the scope of the lease by adding the right to use one or more leased assets;
- The increased consideration is equivalent to the separate price of the expanded portion of the lease
adjusted for the circumstances of that contract.If a lease modification is not accounted for as a separate lease at the effective date of the lease modification
the company reapportioned the consideration of the modified contract redetermined the lease term
andremeasured the lease liability based on the present value of the modified lease payments and the revised
discount rate.If a lease change results in a reduction in the scope of the lease or a shortening of the lease
term the Company reduces the carrying value of the right-of-use asset accordingly and recognizes the gain
89Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
or loss related to partial termination or complete termination of the lease in profit or loss for the current
period. If other lease changes result in the remeasurement of the lease liability the Company adjusts the
carrying value of the right- of-use asset accordingly.
3.26.2 The Company as lessor
At the commencement date of the lease the Company classifies leases into finance leases and operating
leases. A finance lease is a lease that transfers substantially all the risks and rewards associated with
ownership of the leased asset regardless of whether ownership is ultimately transferred. Operating leases
refer to leases other than finance leases. When the company acts as a sublease lessor it classifies the
sublease based on the right-to-use assets arising from the original lease.
3.26.2.1 Accounting for operating leases
Lease receipts under operating leases are recognized as rental income on a straight-line basis over each
period of the lease term. The Company capitalizes the initial direct costs incurred in connection with
operating leases and apportions them to current profit or loss over the lease term on the same basis as rental
income is recognized. Variable lease payments that are not included in the lease receipts are recognized in
current profit or loss when they are actually incurred. If a change in an operating lease occurs the
Company accounts for it as a new lease from the effective date of the change and the amount of lease
payments received in advance or receivable in connection with the lease before the change is regarded as
the amount of payments received under the new lease.
3.26.2.2 Accounting for finance leases
On the commencement date of the lease the Company recognizes finance lease receivables for finance
leases and derecognizes finance lease assets. When the Company makes initial measurement of the finance
lease receivable the net lease investment is used as the recorded value of the finance lease receivable. The
net lease investment is the sum of the unguaranteed residual value and the present value of the lease
receipts not yet received at the commencement date of the lease term discounted at the interest rate
embedded in the lease.The Company calculates and recognizes interest income for each period of the lease term based on a fixed
periodic interest rate. Derecognition and impairment of finance lease receivables are accounted for in
accordance with Note III.9 "Financial Instruments" of this note.Variable lease payments that are not
included in the net lease investment measurement are recognized in profit or loss when they are actually
incurred.If a change in a finance lease occurs and the following conditions are met the Company accounts for the
change as a separate lease:
- the change expands the scope of the lease by adding the right to use one or more leased assets;
90Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
- the increased consideration is equivalent to the separate price of the expanded portion of the lease
adjusted for the circumstances of that contract.If a change in a finance lease is not accounted for as a separate lease the Company treats the changed lease
separately in the following circumstances:
- If the change becomes effective on the lease commencement date and the lease would be classified as an
operating lease the Company accounts for it as a new lease from the effective date of the lease change and
uses the net investment in the lease prior to the effective date of the lease change as the carrying amount of
the leased asset;
- If the change becomes effective on the lease commencement date and the lease is
classified as a finance lease the Company accounts for the lease in accordance with the policy on
modification or renegotiation of contracts as described in Note III.9 Financial Instruments.
3.27 Methodology for determining materiality criteria and basis for selection
Items Materiality Criteria
Significant debt investments Amount≥CNY 50000000.00
Significant non-wholly owned The Company identifies subsidiaries whose total revenue exceeds 50% of the
subsidiaries total group profits as significant non-wholly owned subsidiaries
3.28 Changes in significant accounting policies and accounting estimates
3.28.1 Changes in significant accounting policies
There were no significant changes in the Company’s accounting policies during the reporting period.
3.28.2 Changes in significant accounting estimates
There were no significant changes in the Company’s accounting estimates during the reporting period.
4. Taxation
4.1 The main applicable tax and rate to the Group as follows
Tax Tax base Tax rate
The output tax is calculated on the basis of the income from the sale of
0%、1%、5%、goods and taxable services calculated in accordance with the provisions of
Value-added tax (VAT) 6%、9%、
the tax law and after deducting the input tax allowed to be deducted in the
11%、13%
current period the difference is the value-added tax payable
City construction tax Payable turnover tax tax exemption 7%、5%
Educational surcharge Payable turnover tax tax exemption 3%
Local education
Payable turnover tax tax exemption 2%
surcharge
91Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Tax Tax base Tax rate
25%、22%、Enterprise income tax Taxable profits
20%、15%
EIT rate for different taxpayer
Tax principles EIT rate
TsannKuen (Zhangzhou) Enterprise Co. Ltd. (hereafter TKL) 15%
TsannKuen China (Shanghai) Enterprise Co. Ltd. (hereafter TKS) 25%
Xiamen TsannKuen Property Service Co. Ltd. (hereafter TKW) 20%
Pt.Star Comgistic Indonesia 22%
4.2 Tax preference
4.2.1 According to the principle of“The Second Batch of High-tech Enterprise Filing List of FujianProvince's Accreditation Organisations for 2023 Accreditation Reporting” TKL was identified as Fujian
Province High-tech Enterprise and the certification was valid for 3 years (Certification No.GR202335003031) in accordance with the Enterprise Income Tax Law of the People's Republic of China
the Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China and
other relevant provisions the income tax rate of Tsann Kuen (Zhangzhou) Enterprise Co. Ltd. enjoys a
10% reduction for three years from 2023 which the income tax rate is 15%.
4.2.2 Pursuant to Article 3 of the Announcement on Further Tax and Fee Policies to Support the
Development of Small and Micro Enterprises and Individual Businesses (Joint Announcement of the
Ministry of Finance and State Taxation Administration No. 12 [2023]) the preferential corporate income
tax policy—where small low-profit enterprises are taxed at 20% on 25% of their taxable income—has been
extended until December 31 2027. Our subsidiary Xiamen Canqun Property Management Co. Ltd.qualifies for and has applied this tax benefit.
5.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.1 Cash and Cash Equivalents
Items 30 June 2026 1 January 2026
Cash on hand 554414.65 814719.21
Cash in bank 482711372.99 460016679.73
Other monetary funds 63763.74 16377.06
Total 483329551.38 460847776.00
Including：The total amount deposited overseas 36549570.95 42799561.10
Of the other monetary funds CNY 63763.74 is the balance of the company's Alipay account. There are no
other funds in monetary funds at the end of the period with restricted use rights or potential recovery risks
92Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
due to mortgage pledge or freeze.
5.2 Accounts Receivables
5.2.1 Accounts receivable by aging
Aging 30 June 2026 1 January 2026
Within one year 137197403.96 142623608.17
Including: Within 90 days 124709590.75 126361373.98
91 – 180 days 12438707.38 16260251.66
181 – 270 days 45871.83
271 – 365 days 3234.00 1982.53
1-2 years 107.83 748.23
2-3 years 0.00
Over 3 years 25418.08 25418.08
including: 3-4 years 0.00
4-5 years 0.00 9677.56
Over 5 years 25418.08 15740.52
Subtotal 137222929.87 142649774.48
Less: provision for bad debt 2081317.99 2680451.35
Total 135141611.88 139969323.13
5.2.2 Accounts receivable by bad debt provision method
Category 30 June 2026
Book balance Provision for bad debt
Proportion Provision Carrying amountAmount (%) Amount ratio (%)
Provision for bad debt recognised
individually 0.00 0.00 0.00 0.00 0.00
Provision for bad debt recognized
collectively 137222929.87 100.00 2081317.99 1.52 135141611.88
Including: Portfolio by age 134223244.96 97.81 2081317.99 1.55 132141926.97
Portfolio by related parties 2999684.91 2.19 0.00 0.00 2999684.91
Total 137222929.87 100.00 2081317.99 1.52 135141611.88
(Continued)
Category 1 January 2026
Book balance Provision for bad debt
Amount Proportion Amount Provision ratio
Carrying amount
(%)(%)
Provision for bad debt recognised
individually 0.00 0.00 0.00 0.00 0.00
Provision for bad debt recognized
collectively 142649774.48 100.00 2680451.35 1.88 139969323.13
Including: Portfolio by age 139200837.18 97.58 2680451.35 1.93 136520385.83
Portfolio by related parties 3448937.30 2.42 3448937.30
Total 142649774.48 100.00 2680451.35 1.88 139969323.13
Specific instructions for provision for bad debts:
Accounts receivables with bad debt provision are recognised by portfolio by age
30 June 2026
Aging
Book balance Provision for bad debt Provision ratio (%)
93Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Not overdue 121923223.33 611569.23 0.50
Overdue 1 – 30 days 8503526.97 382658.69 4.50
Overdue 31 – 60 days 2805360.64 561072.09 20.00
Overdue 61 – 90 days 845665.55 380549.51 45.00
Overdue more than 90 days 145468.47 145468.47 100.00
Total 134223244.96 2081317.99 1.55
(Continued)
1 January 2026
Aging
Book balance Provision for bad debt Provision ratio (%)
Not overdue 120294774.42 601159.83 0.50
Overdue 1 – 30 days 11130636.17 500878.63 4.50
Overdue 31 – 60 days 7744043.75 1548808.75 20.00
Overdue 61 – 90 days 3234.00 1455.30 45.00
Overdue more than 90 days 28148.84 28148.84 100.00
Total 139200837.18 2680451.35 1.93
Accounts receivable with bad debt provision are recognised by portfolio by related parties
30 June 2026
Accounts Receivables
Book balance Provision for bad debt Provision ratio (%) Reason for provision
Portfolio by related parties 2999684.91 0.00 0.00
Total 2999684.91 0.00 0.00
(Continued)
1 January 2026
Accounts Receivables
Book balance Provision for bad debt Provision ratio (%) Reason for provision
Portfolio by related parties 3448937.30 0.00 0.00
Total 3448937.30 0.00 0.00
The recognition criteria and explanation for provisions for bad debts by portfolio are detailed in Note 3.9.
5.2.3 Changes of provision for bad debt during the reporting period
1 January Changes during the reporting periodCategory 2026 30 June 2026Provision Recovery or reversal Write-off Other
Provision for bad debt by group 2680451.35 -573124.35 0.00 0.00 26009.01 2081317.99
Total 2680451.35 -573124.35 0.00 0.00 26009.01 2081317.99
5.2.4 Accounts receivable actually written off in the current period
N/A
5.2.5 Top five closing balances by entity
Entity Accounts Contractreceivable Assets Total Proportion (%) Bad debt provision
No. 1 35345356.94 35345356.94 25.76 176726.78
No. 2 21029895.81 21029895.81 15.32 120207.81
No. 3 15065571.97 15065571.97 10.98 1183126.65
No. 4 13537837.15 13537837.15 9.86 67689.18
94Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Entity Accounts Contractreceivable Assets Total Proportion (%) Bad debt provision
No. 5 12646242.37 12646242.37 9.22 90804.21
Total 97624904.24 97624904.24 71.14 1638554.63
5.3 Advances to Suppliers
5.3.1 Advances to suppliers by aging
Closing Balance Opening Balance
Items
Amoun Percentage (%) Amoun Percentage (%)
Within1 year 4553642.79 100.00 4955253.01 100.00
Total 4553642.79 100.00 4955253.01 100.00
5.3.2 Top five closing balances by entity
The total amount of the top five vendors with the largest prepaid amounts by the Company at the end of the
reporting period is CNY 1511137.98 accounting for 33.19% of the total amount of the prepayment at the
end of the reporting period.
5.4 Other Receivables
5.4.1 Other receivables by category
Items 30 June 2026 1 January 2026
Interest receivable 0.00 0.00
Dividend receivable 0.00 0.00
Other receivables 13969590.88 21608192.98
Total 13969590.88 21608192.98
5.4.2 Other Receivables
5.4.2.1 Other receivables by aging
Aging 30 June 2026 1 January 2026
Within one year 12925276.82 20499731.51
Including: Within 90 days 12892574.24 20311115.49
91 – 180 days -46927.19 93830.21
181 – 270 days 58629.77 21629.94
271 – 365 days 21000.00 73155.87
1-2 years 98814.63 180171.75
2-3 years 415422.64 376622.68
Over 3 years 999688.66 1031725.63
ncluding: 3-4 years 5000.00 5000.00
4-5 years 4102.68 0.00
Over 5 years 990585.98 1026725.63
Subtotal 14439202.75 22088251.57
Less: provision for bad debt 469611.87 480058.59
Total 13969590.88 21608192.98
5.4.2.2 Other receivables by nature
Nature 30 June 2026 1 January 2026
Export tax refund 6000000.00 12000000.00
95Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Nature 30 June 2026 1 January 2026
Other open credits 7275726.13 8960525.94
Deposit 1163476.62 1127725.63
Subtotal 14439202.75 22088251.57
Less: Provision for bad debt 469611.87 480058.59
Total 13969590.88 21608192.98
5.4.2.3 Other receivables by provision for bad debt
Stage 1 Stage 2 Stage 3
Expected credit Expected credit loss for the Expected credit loss for
Provision for bad debt loss for the next whole duration (no credit the whole duration Total
12 months impairment) (Credit impairment has
occurred)
Closing balance as of 1/1/2026 153635.95 0.00 326422.64 480058.59
Carrying amount of other
receivables in current period —— —— —— ——
on 1/1/2026
Transfer to stage 2 0.00 0.00 0.00 0.00
Transfer to stage 3 0.00 0.00 0.00 0.00
Transfer back to stage 2 0.00 0.00 0.00 0.00
Transfer back to stage 1 0.00 0.00 0.00 0.00
Recognition 23044.10 0.00 0.00 23044.10
Reversal 33490.82 0.00 0.00 33490.82
Used 0.00 0.00 0.00 0.00
Written off 0.00 0.00 0.00 0.00
Other movements 0.00 0.00 0.00 0.00
Closing balance as of
30/6/2026143189.230.00326422.64469611.87
5.4.2.4 Provision for bad debt recognized recovered or reversed
Changes during the reporting period
Category 1 January 2026 30 June 2026
Provision Recovery or reversal Write-off Other
Provision for bad debt
recognized individually 326422.64 0.00 0.00 0.00 0.00 326422.64
Provision for bad debt
recognized by portfolio 153635.95 23044.10 33490.82 0.00 0.00 143189.23
Total 480058.59 23044.10 33490.82 0.00 0.00 469611.87
5.4.2.5 There are no other receivables write-off during the reporting
5.4.2.6 Top five closing balances by entity
Balance at 30 Proportion of theEntity name Nature June 2026 Aging balance to the total
Provision for
other receivables (%) bad debt
Zhangzhou Taiwan investment
zone State Administration of Export taxrefund 6000000.00 1-90 days 41.55Taxation
China Export Credit Insurance
Corporation Fujian Branch Deposit 648450.00 Over 5 years 4.49
State Grid Fujian Electric Power
Co. Ltd. Zhangzhou Longhai Other open 542967.54 1-90 days 3.76
District Power Supply Company credits
96Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Entity name Nature Balance at 30
Proportion of the
June 2026 Aging balance to the total
Provision for
other receivables (%) bad debt
PT. PLN (PERSERO) Deposit 342136.01 Over 5 years 2.37
Zhangzhou Yangkun Industry and Water and
Trade Co. Ltd. electricity 332752.92 1-90 days 2.31rental fee
Total 7866306.47 54.48
5.5 Inventories
5.5.1 Inventories by category
30 June 2026 1 January 2026
Items
Book balance Provision for Provision forimpairment Carrying amount Book balance impairment Carrying amount
Raw materials
75218018.7813225641.9261992376.8674015782.1614946461.0259069321.14
Material
intransit 6780710.62 0.00 6780710.62 7796782.08 0.00 7796782.08
Self-
manufactured
semi-finished 11815856.09 2036471.31 9779384.78 16516601.91 1876938.57 14639663.34
goods
Work in
process 39615894.74 0.00 39615894.74 31803251.23 0.00 31803251.23
Finished
goods 45014100.22 5612905.31 39401194.91 69675139.12 5282134.24 64393004.88
Low-value
consumables 18651145.75 0.00 18651145.75 16016038.78 0.00 16016038.78
Total
197095726.2020875018.54176220707.66215823595.2822105533.83193718061.45
5.5.2 Provision for impairment
Increase in current year Decrease in current year
Impact of Impact ofItem 1 January 2026
Accrual changes in Recovered or changes in
30 June 2026
exchange rates Written off exchangerates
Raw materials 14946461.02 967947.15 0.00 2524896.23 163870.02 13225641.92
Self-manufactured
semi-finished goods 1876938.57 506158.66 0.00 333337.38 13288.54 2036471.31
Finished goods 5282134.24 1395233.38 0.00 1050539.06 13923.25 5612905.31
Total 22105533.83 2869339.19 0.00 3908772.67 191081.81 20875018.54
Note: The criteria for making provision for the decline in value of inventories on a portfolio basis are set
out in Note 3.10.
5.6 Non-current assets due within one year
Items 30 June 2026 1 January 2026
Debt investments due within one year 532789095.02 555877899.74
Less: Impairment provisions 0.00 0.00
Total 532789095.02 555877899.74
5.7 Other Current Assets
Items 30 June 2026 1 January 2026
Input tax to be deducted 10862262.31 8540179.76
97Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Items 30 June 2026 1 January 2026
Financial investment 351930989.36 279745858.28
Total 362793251.67 288286038.04
5.8 Debt Investment
5.8.1 Situation of debt investment
30 June 2026 1 January 2026
Item Provision ProvisionBook balance for Carrying amount Book balance for Carrying amount
impairment impairment
Large certificate of
deposit 556100000.00 556100000.00 736100000.00 736100000.00
Accrued interest on
large certificate of 27568907.98 27568907.98 28380048.42 28380048.42
deposit
Subtotal 583668907.98 583668907.98 764480048.42 764480048.42
Less: Debt
investments due 532789095.02 532789095.02 555877899.74 555877899.74
within one year
Total 50879812.96 50879812.96 208602148.68 208602148.68
5.8.2 Significant debt investments at the end of the period
30 June 2026
Item
Face value Coupon rate Effective rate Expiry date Overdueprincipal
Quanzhou Bank Co. Ltd. Zhangzhou
Branch Three-Year Large Amount 50000000.00 2.15% 2.15% 2028/9/5
Total 506100000.00
(Continued)
1 January 2026
Item Face value Coupon rate Effective rate Expiry date Overdueprincipal
Quanzhou Bank Co. Ltd. Putian
Branch Two-Year Fixed Deposit 74600000.00 2.50% 2.50% 2027/1/16
Quanzhou Bank Co. Ltd. Putian
Branch Two-Year Fixed Deposit 30000000.00 2.50% 2.50% 2027/1/16
Xiamen Bank Co. Ltd. Zhangzhou
Branch Two-Year Fixed Deposit
Quanzhou Bank Co. Ltd. Zhangzhou 50000000.00 2.40% 2.40% 2027/1/17
Branch Three-Year Large Amount
Quanzhou Bank Co. Ltd. Putian
Branch Two-Year Fixed Deposit 50000000.00 2.15% 2.15% 2028/9/5
Total 204600000.00
5.9 Long-term equity investments
Changes in the current period
1 January Opening Investment gains Adjustment Changes in Declaration
Accrual
of 30 June 2026 Closing
Invested entity 2026 (Carrying balance of of issuing balance of
amount) depreciatio
Follow-on Reduce or losses of other other rights cash impair
（Other Carryinginvestment investment recognized under comprehen and ment depreciation reserves amount）equity method sive income interests dividends orprofits provisi
n reserves
on
Joint venture
Shanghai Upa
Smart Chain Home 7884938.82 -1961572.32 201582.69 6124949.19
Appliances Co. Ltd.Total 7884938.82 -1961572.32 201582.69 6124949.19
5.10 Other equity instrument investment
98Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Items 30 June 2026 1 January 2026
Non-trading equity instrument investment 40000.00 40000.00
Total 40000.00 40000.00
5.11 Investment Properties
5.11.1 Investment properties accounted for using cost model
Items Building and Land use rights Construction inplants progress Total
Initial cost:
Balance on 1 January 2026 80853358.80 29260577.51 0.00 110113936.31
Increase during the reporting period 0.00 0.00 0.00 0.00
1. Acquisition 0.00 0.00 0.00 0.00
2. Transfer from inventories /fixed assets
/construction in progress 0.00 0.00 0.00 0.00
3. Impact of changes in exchange rate 0.00 0.00 0.00 0.00
Decrease during the reporting period 0.00 0.00 0.00 0.00
1. Disposal 0.00 0.00 0.00 0.00
2. Other transferred out 0.00 0.00 0.00 0.00
3. Impact of changes in exchange rate 0.00 0.00 0.00 0.00
Balance on 30 June 2026 80853358.80 29260577.51 0.00 110113936.31
Accumulated depreciation and amortisation:
Balance on 1 January 2026 72902721.00 18651096.64 0.00 91553817.64
Increase during the reporting period 23625.00 312135.12 0.00 335760.12
1. Accrual or amortization 23625.00 312135.12 0.00 335760.12
2. Transfer from fixed assets 0.00 0.00 0.00 0.00
3. Impact of changes in exchange rate 0.00 0.00 0.00 0.00
Decrease during the reporting period 0.00 0.00 0.00 0.00
1. Disposal 0.00 0.00 0.00 0.00
2. Other transferred out 0.00 0.00 0.00 0.00
3. Impact of changes in exchange rate 0.00 0.00 0.00
Balance on 30 June 2026 72926346.00 18963231.76 0.00 91889577.76
Provision for impairment:
Balance on 1 January 2026 0.00 0.00 0.00 0.00
Increase during the reporting period 0.00 0.00 0.00 0.00
1. Accrual or amortization 0.00 0.00 0.00 0.00
Decrease during the reporting period 0.00 0.00 0.00 0.00
1. Disposal 0.00 0.00 0.00 0.00
2. Other 0.00 0.00 0.00 0.00
Balance on 30 June 2026 0.00 0.00 0.00 0.00
Carrying amount:
Balance on 30 June 2026 7927012.80 10297345.75 0.00 18224358.55
Balance on 1 January 2026 7950637.80 10609480.87 0.00 18560118.67
99Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
5.11.2 Investment properties without certificate of title
Item Carrying amount Reason
Lvyuan three country villa 742403.57
Total 742403.57
Note: Lvyuan three country villa is the houses with limited property rights purchased by the TsannKuen
China (Shanghai) Enterprise Co. Ltd. which is the subsidiary of the Company from Shanghai Lvsheng
Real Estate Development Co. Ltd. in 1999 and there has no land expropriation. Shanghai Lvsheng Real
Estate Development Co. Ltd. and Shanghai Jiading district Huangdu town Lvyuan community residents'
committees issued the certificate jointly to prove the right of this property belongs to TsannKuen China
(Shanghai) Enterprise Co. Ltd. in January 2006.
5.12 Fixed Assets
5.12.1 Fixed assets by category
Items 30 June 2026 1 January 2026
Fixed assets 169890505.73 162861863.08
Disposal of fixed assets 0.00 0.00
Total 169890505.73 162861863.08
100T s a n n K u e n ( C h i n a ) E n t e r p r i s e C o . L t d . N o t e s t o t h e f i n a n c i a l s t a t e m e n t s
5.12.2 Fixed assets
5.12.2.1 General information of fixed assets
Items Houses and buildings Machineries Electronic devices Improvement expensemodules and others Vehicles of fixed assets Total
Initial cost:
Balance on 1 January 2026 92438400.88 168651335.71 871337673.44 17682380.02 21333812.52 1171443602.57
Increase during the reporting period -1221646.34 9655529.52 14116133.72 -18096.31 -319406.12 22212514.47
(i) Acquisition 0.00 -50805.54 652199.85 0.00 0.00 601394.31
(ii) Transfer from construction in progress 326712.00 11175808.56 14969912.20 138053.12 0.00 26610485.88
(iii) Transfer from investment properties 0.00 0.00 0.00 0.00 0.00 0.00
(iv) Impact of changes in exchange rates -1548358.34 -1469473.50 -1505978.33 -156149.43 -319406.12 -4999365.72
Decrease during the reporting period 0.00 240920.62 1556234.27 12367.02 0.00 1809521.91
(i) Disposal 0.00 240920.62 1556234.27 12367.02 0.00 1809521.91
(ii) Transfer to investment properties 0.00 0.00 0.00 0.00 0.00 0.00
(iii) Impact of changes in exchange rates 0.00 0.00 0.00 0.00 0.00 0.00
Balance on 30 June 2026 91216754.54 178065944.61 883897572.89 17651916.69 21014406.40 1191846595.13
Accumulated depreciation:
Balance on 1 January 2026 58835000.66 94243384.21 795303025.69 15677608.13 19081116.44 983140135.13
Increase during the reporting period 480116.86 4789672.93 9219874.21 16503.58 177161.50 14683329.08
(i) Provision 1209426.36 5575560.09 10270382.04 149048.47 426744.50 17631161.46
(ii) Transfer from investment properties 0.00 0.00 0.00 0.00 0.00 0.00
(iii) Impact of changes in exchange rates -729309.50 -785887.16 -1050507.83 -132544.89 -249583.00 -2947832.38
Decrease during the reporting period 0.00 240920.62 1423898.24 12367.02 0.00 1677185.88
(i) Disposal 0.00 240920.62 1423898.24 12367.02 0.00 1677185.88
(ii) Transfer from investment properties 0.00 0.00 0.00 0.00 0.00 0.00
(iii) Impact of changes in exchange rates 0.00 0.00 0.00 0.00 0.00 0.00
Balance on 30 June 2026 59315117.52 98792136.52 803099001.66 15681744.69 19258277.94 996146278.33
101T s a n n K u e n ( C h i n a ) E n t e r p r i s e C o . L t d . N o t e s t o t h e f i n a n c i a l s t a t e m e n t s
Items Houses and buildings Machineries Electronic devices Vehicles Improvement expensemodules and others of fixed assets Total
Provision for impairment:
Balance on 1 January 2026 0.00 5623229.07 19799548.53 7854.22 10972.54 25441604.36
Increase during the reporting period 0.00 407613.14 11621.29 -175.87 -340.10 418718.46
(i) Provision 0.00 500793.13 81279.31 0.00 0.00 582072.44
(ii) Impact of changes in exchange rates 0.00 -93179.99 -69658.02 -175.87 -340.10 -163353.98
Decrease during the reporting period 0.00 0.00 50511.75 0.00 0.00 50511.75
(i) Disposal 0.00 0.00 50511.75 0.00 0.00 50511.75
Balance on 30 June 2026 0.00 6030842.21 19760658.07 7678.35 10632.44 25809811.07
Carrying amount:
Balance on 30 June 2026 31901637.02 73242965.88 61037913.16 1962493.65 1745496.02 169890505.73
Balance on 1 January 2026 33603400.22 68784722.43 56235099.22 1996917.67 2241723.54 162861863.08
5.12.2.2 Idle fixed assets
Item Initial cost Accumulated depreciation Provision for impairment Carrying amount
Machineries 5506721.47 3920625.37 1235615.32 350480.78
Electronic device modules and others 1084194.81 1016285.14 67909.67 0.00
Vehicles 0.00 0.00 0.00 0.00
Improvement expense of fixed assets 0.00 0.00 0.00 0.00
Total 6590916.28 4936910.51 1303524.99 350480.78
5.12.2.3 Fixed assets without certificate of title
102Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Items Carrying amount Reason
Jingying garden 44655.70 Legal procedures in process
Legal procedures in process
Lvyuan three country villa 297722.28
5.13 Construction in Progress
5.13.1 Construction in progress by category
Items 30 June 2026 1 January 2026
Construction in progress 12040385.08 14770911.87
Total 12040385.08 14770911.87
5.13.2 Construction in progress
30 June 2026 1 January 2026
Items
Book balance Provision for Carrying Provision for Carryingimpairment amount Book balance impairment amount
Sporadic project 6073236.19 0.00 6073236.19 4818922.51 0.00 4818922.51
Equipment pending
acceptance 5967148.89 0.00 5967148.89 9951989.36 0.00 9951989.36
Total 12040385.08 0.00 12040385.08 14770911.87 0.00 14770911.87
5.14 Right-of-use Assets
5.14.1 Status of Right-of-Use Assets
Items Houses and buildings Total
Initial cost:
Balance on 1 January 2026 410109592.92 410109592.92
Increase during the reporting period 3026964.33 3026964.33
(i) Leases 3026964.33 3026964.33
(ii) Impact of changes in exchange rates 0.00 0.00
Decrease during the reporting period 3538533.89 3538533.89
(i) Disposal 3538533.89 3538533.89
(ii) Impact of changes in exchange rates 0.00 0.00
Balance on 30 June 2026 409598023.36 409598023.36
Accumulated depreciation:
Balance on 1 January 2026 69722382.70 69722382.70
Increase during the reporting period 8008503.12 8008503.12
(i) Provision 8008503.12 8008503.12
(ii) Impact of changes in exchange rates 0.00 0.00
Decrease during the reporting period 3538533.89 3538533.89
(i) Disposal 3538533.89 3538533.89
(ii) Impact of changes in exchange rates 0.00 0.00
Balance on 30 June 2026 74192351.93 74192351.93
Accumulated depreciation:
Balance on 1 January 2026 0.00 0.00
Increase during the reporting period 0.00 0.00
(i) Provision 0.00 0.00
(ii) Impact of changes in exchange rates 0.00 0.00
Decrease during the reporting period 0.00 0.00
103Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Items Houses and buildings Total
(i) Disposal 0.00 0.00
(ii) Impact of changes in exchange rates 0.00 0.00
Balance on 30 June 2026 0.00 0.00
Carrying amount:
Balance on 30 June 2026 335405671.43 335405671.43
Balance on 1 January 2026 340387210.22 340387210.22
5.15 Intangible Assets
5.15.1 Status of Intangible Assets
Items Land use rights Software Total
Initial cost:
Balance on 1 January 2026 18777998.13 53875040.08 72653038.21
Increase during the reporting period 138760.59 0.00 138760.59
(i) Acquisition 0.00 0.00 0.00
(ii) Impact of changes in exchange rates 138760.59 0.00 138760.59
Decrease during the reporting period 1032284.15 0.00 1032284.15
(i) Disposal 0.00 0.00 0.00
(ii) Impact of changes in exchange rates 1032284.15 0.00 1032284.15
Balance on 30 June 2026 17884474.57 53875040.08 71759514.65
Accumulated depreciation:
Balance on 1 January 2026 7990224.56 53856721.48 61846946.04
Increase during the reporting period 369816.25 13738.92 383555.17
(i) Provision 369816.25 13738.92 383555.17
(ii) Impact of changes in exchange rates 0.00 0.00 0.00
Decrease during the reporting period 409442.45 0.00 409442.45
(i) Disposal 0.00 0.00 0.00
(ii) Impact of changes in exchange rates 409442.45 0.00 409442.45
Balance on 30 June 2026 7950598.36 53870460.40 61821058.76
Accumulated depreciation:
Balance on 1 January 2026 0.00 0.00 0.00
Increase during the reporting period 0.00 0.00 0.00
(i) Provision 0.00 0.00 0.00
(ii) Impact of changes in exchange rates 0.00 0.00 0.00
Decrease during the reporting period 0.00 0.00 0.00
(i) Disposal 0.00 0.00 0.00
(ii) Impact of changes in exchange rates 0.00 0.00 0.00
Balance on 30 June 2026 0.00 0.00 0.00
Carrying amount:
Balance on 30 June 2026 9933876.21 4579.68 9938455.89
Balance on 1 January 2026 10787773.57 18318.60 10806092.17
5.16 Long-term Deferred Expenses
Items 1 January 2026 Increase during thereporting period Amortisation Other decrease 30 June 2026
Telecommunications 46711.26 0.00 18743.94 0.00 27967.32
104Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Items 1 January 2026 Increase during thereporting period Amortisation Other decrease 30 June 2026
project expenses
Houses and buildings
renovation expenses 3349202.03 133663.37 920463.29 0.00 2562402.11
Total 3395913.29 133663.37 939207.23 0.00 2590369.43
5.17 Deferred Tax Assets and Deferred Tax Liabilities
5.17.1 Deferred tax assets before offsetting
30 June 2026 1 January 2026
Items Deductible temporary Deferred tax assets Deductible temporary Deferred tax assets
differences differences
Provision for asset impairment 34495913.86 5336355.68 36428524.38 5683315.53
Provision for credit impairment 1750684.82 248565.31 2314728.83 358528.48
Unrealized intragroup profit 575171.87 86275.78 274674.72 68668.68
Accrued expenses 6522814.22 1015491.44 6777249.76 1064770.17
Lease liabilities 412920122.46 61938018.41 402036188.94 60305428.34
Deductible losses 60991519.12 9148727.87 7227889.86 1084183.48
Total 517256226.35 77773434.49 455059256.49 68564894.68
5.17.2 Deferred tax liabilities before offsetting
30 June 2026 1 January 2026
Items Deductible temporary Deferred tax assets Deductible temporary Deferred tax assets
differences differences
Accelerated depreciation of
fixed assets 10233877.55 1535081.63 11094844.01 1664226.60
Right-of-use Assets 335405671.43 50310850.72 340387210.22 51058081.53
Total 345639548.98 51845932.35 351482054.23 52722308.13
5.17.3 Deferred tax assets or liabilities on a net basis after elimination
The amount of deferred The amount of deferred
Item tax assets and liabilities Balance after offsetting tax assets and liabilities Balance after offsetting
offset on 30 June 2026 on 30 June 2026 offset on 31 December on 31 December 20252025
Deferred tax assets -51845932.35 25927502.14 52722308.13 15842586.55
Deferred tax liabilities -51845932.35 52722308.13
5.17.4 Unrecognized deferred tax assets
Items 30 June 2026 1 January 2026
Provision for asset impairment 12019821.29 10949534.40
Provision for credit impairment 800244.04 845781.11
Accrued expenses 3988069.69 7502466.81
Payroll liability 3214045.33 4674110.43
Undistributed deficit 45387021.32 33440943.64
Total 65409201.67 57412836.39
5.17.5 Deductible losses not recognised as deferred tax assets will expire in the following periods
Items 30 June 2026 31 December 2025
Year 2026
Year 2027 6631108.51 6631108.51
105Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Items 30 June 2026 31 December 2025
Year 2028 5538094.86 5538094.86
Year 2029 12423000.68 12423000.68
Year 2030 to year 2036 20794817.27 8848739.59
Total 45387021.32 33440943.64
5.18 Other Non-current Assets
30 June 2026 1 January 2026
Items
Book balance Provision for Carryingimpairment amount Book balance
Provision for Carrying
impairment amount
Prepaid equipment
fee 775954.82 0.00 775954.82 6273764.94 0.00 6273764.94
Total 775954.82 0.00 775954.82 6273764.94 0.00 6273764.94
5.19 Held-for-trading financial liabilities
Items 30 June 2026 1 January 2026
Held-for-trading financial liabilities 89300.00 0.00
Including: Derivative financial liability 89300.00 0.00
Total 89300.00 0.00
5.20 Notes Payable
Items 30 June 2026 1 January 2026
Bank acceptance bills 2854902.60 2224816.88
Total 2854902.60 2224816.88
5.21 Accounts Payable
Items 30 June 2026 1 January 2026
Within 1 year 330868630.85 380458300.99
Over 1 year 1497396.49 3410092.35
Total 332366027.34 383868393.34
5.22 Advances from Customers
Items 30 June 2026 1 January 2026
Within 1 year 2497853.19 2250671.08
Over 1 year 121850.66 131374.50
Total 2619703.85 2382045.58
5.23 Contract Liabilities
Items 30 June 2026 1 January 2026
Advance from merchandise 36300478.28 23384580.98
Advance management fee 231637.48 233082.20
Total 36532115.76 23617663.18
5.24 Employee Benefits Payable
5.24.1 Details of employee benefits payable
Items 1 January 2026 Increase during the Decrease during thereporting period reporting period 30 June 2026
Short-term employee
benefits 56256521.73 149068328.12 157973914.50 47350935.35
106Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Items 1 January 2026 Increase during the Decrease during thereporting period reporting period 30 June 2026
Post-employment
benefits-defined 5092.72 11844955.95 11845112.47 4936.20
contribution plans
Termination benefits 2058010.00 5901161.84 7959171.77 0.07
Total 58319624.45 166814445.91 177778198.74 47355871.62
5.24.2 Short-term employee benefits
Items 1 January 2026 Increase during the Decrease during thereporting period reporting period 30 June 2026
Salaries bonuses allowances and
subsidies 34847732.53 131682915.74 141086322.14 25444326.13
Employee benefits 0.00 6500399.39 4305882.05 2194517.34
Social insurance 3040.83 6968758.43 6968758.43 3040.83
Including: Health insurance 2845.75 4833973.79 4833973.79 2845.75
Injury insurance 195.08 1772269.72 1772269.72 195.08
Birth insurance 0.00 362514.92 362514.92 0.00
Housing accumulation fund 18707510.52 3312728.77 4403938.75 17616300.54
Labour union funds and employee
education funds 0.00 591336.56 591336.56 0.00
Short-term absence pay 2698237.85 12189.23 617676.57 2092750.51
Total 56256521.73 149068328.12 157973914.50 47350935.35
5.24.3 Defined contribution plans
Items 1 January 2026 Increase during the Decrease during thereporting period reporting period 30 June 2026
Basic endowment insurance 4943.54 11401172.99 11401329.51 4787.02
Unemployment insurance 149.18 443782.96 443782.96 149.18
Total 5092.72 11844955.95 11845112.47 4936.20
5.25 Taxes Payable
Items 30 June 2026 1 January 2026
Value added tax (VAT) 691998.28 467002.43
Enterprise income tax 3831033.50 3642909.01
Individual income tax 612020.38 562112.35
City construction tax 255315.30 315000.00
Educational surcharge 153189.18 189000.00
Local education surcharge 102126.12 126000.00
Property tax 1394923.98 1428496.70
Land use tax 175232.82 175232.82
Stamp tax 160528.51 157324.77
Other 0.00 4242.05
Total 7376368.07 7067320.13
5.26 Other Payables
5.26.1 Other payables by category
107Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Items 30 June 2026 1 January 2026
Interest payable 0.00 0.00
Dividend payable 0.00 0.00
Other payable 23257229.59 28579322.67
Total 23257229.59 28579322.67
5.26.2 Other payables
5.26.2.1 Other payables by nature
Items 30 June 2026 1 January 2026
Within 1 year 15856573.11 20316561.38
Over 1 year 7400656.48 8262761.29
Total 23257229.59 28579322.67
5.26.2.2 Significant other payables with aging over one year
Items 30 June 2026 Reason
Deposit 6498151.04 Return upon termination of contract
Total 6498151.04
5.27 Non-current Liabilities Maturing within One Year
Items 30 June 2026 1 January 2026
Lease liabilities maturing within one year 7377185.32 476624.15
Total 7377185.32 476624.15
5.28 Lease Liabilities
Items 30 June 2026 1 January 2026
Lease liabilities 739025940.84 687431273.71
Less：unrecognized financing charges 326105818.38 285395084.77
Subtotal 412920122.46 402036188.94
Less：Lease liabilities due within one year 7377185.32 476624.15
Total 405542937.14 401559564.79
5.29 Share Capital
Changes during the reporting period (+-)
Item 1 January 2026 30 June 2026
New issues Bonus Capitalisation ofissues reserves Others Subtotal
Number of total
shares 185391680.00 185391680.00
5.30 Capital Reserves
Item 1 January 2026 Increase during the Decrease during thereporting period reporting period 30 June 2026
Capital premium
(share premium) 210045659.80 0.00 0.00 210045659.80
Other capital
reserves 86763305.99 0.00 0.00 86763305.99
Total 296808965.79 0.00 0.00 296808965.79
108T s a n n K u e n ( C h i n a ) E n t e r p r i s e C o . L t d . N o t e s t o t h e f i n a n c i a l s t a t e m e n t s
5.31 Other Comprehensive Income
Current year
Less: previously Less: previously
recognised in other recognised in other Less: After tax After taxItem 1 January 2026 Amount for the 30 June 2026
year before tax comprehensive comprehensive Income tax
attributable to attributable to
income transferred income transferred expense the parent minority
into profit or loss into retained earnings company shareholders
1. Other comprehensive income
will not be reclassified to profit or 41036.56 0.00 0.00 0.00 0.00 0.00 0.00 41036.56
loss
Including: Changes of
remeasurement of the defined 41036.56 0.00 0.00 0.00 0.00 41036.56
benefit plan
Other comprehensive income
inconvertible to profit or loss under
the equity method
Changes in fair value of other
equity instruments investments
Changes in fair value of corporate
credit risk
2. Items will be reclassified to profit
or loss 8246189.71 -6443461.85 0.00 0.00 0.00 -4832596.39 -1610865.46 3413593.32
Including: Other comprehensive
income convertible to profit or loss
under the equity method
Changes in fair value of other debt
investments
Value from reclassification of
financial assets that is recorded into
other comprehensive income
Credit impairment provision for
other debt investments
Reserves of cash flow hedges
Exchange differences on translating
foreign operations 8246189.71 -6443461.85 0.00 0.00 0.00 -4832596.39 -1610865.46 3413593.32
Total 8287226.27 -6443461.85 0.00 0.00 0.00 -4832596.39 -1610865.46 3454629.88
109Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
5.32 Surplus Reserves
Item 1 January 2026 Increase during the Decrease during thereporting period reporting period 30 June 2026
Statutory surplus
reserves 86780627.31 0.00 0.00 86780627.31
Total 86780627.31 0.00 0.00 86780627.31
5.33 Retained Earnings
Items Reporting period Same period of last year
Balance at the end of last period before adjustments 512340440.03 527518517.81
Adjustments for the opening balance (increase /(decrease) 0.00 0.00
Balance at the beginning of the reporting period after adjustments 512340440.03 527518517.81
Add: net profit attributable to owners of the parent company for the
reporting period -28710803.70 23545319.37
Less: appropriation to statutory surplus reserves 0.00 5352894.75
Appropriation to discretionary surplus reserves 0.00 0.00
Provision for general risk reserves 0.00 0.00
Payment of ordinary share dividends 18539168.00 33370502.40
Common stock dividends converted to share capital 0.00 0.00
Balance at the end of the reporting period 465090468.33 512340440.03
5.34 Revenue and Cost of Sales
Reporting period Same period of last year
Items Revenue Costs of sales Revenue Costs of sales
Principal activities 560392426.18 531745747.38 631409254.61 558582665.57
Other activities 20919899.51 4482191.37 21364041.78 4297683.61
Total 581312325.69 536227938.75 652773296.39 562880349.18
5.34.1 Revenue from principal activities (by industry or business)
Reporting period Same period of last year
Industry (business) Revenue Costs of sales Revenue Costs of sales
Household appliances
industry 560392426.18 531745747.38 631409254.61 558582665.57
Total 560392426.18 531745747.38 631409254.61 558582665.57
5.34.2 Revenue from principal activities (by product)
Reporting period Same period of last year
Products Revenue Costs of sales Revenue Costs of sales
Catering and Cooking 342337353.91 328986243.01 392599119.51 348325391.98
Home helper 161051016.46 157789686.33 193015583.40 173433583.72
Tea/Coffee makers 53647153.01 42745953.52 41387776.71 36129559.32
Others 3356902.80 2223864.52 4406774.99 694130.55
Total 560392426.18 531745747.38 631409254.61 558582665.57
5.34.3 Revenue from principal activities (by region)
110Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Reporting period Same period of last year
Region Revenue Costs of sales Revenue Costs of sales
Australia 5552437.73 4684420.56 5378593.86 4356657.52
Africa 1427935.37 1297136.67 983892.36 1032958.15
America 241908928.50 236904466.73 246494836.05 225318161.22
Europe 200768740.58 184866289.86 227996576.35 199231164.91
Asia 110734384.00 103993433.56 150555355.99 128643723.77
Total 560392426.18 531745747.38 631409254.61 558582665.57
5.35 Taxes and Surcharges
Items Reporting period Same period of last year
City construction tax 1461522.17 1005466.10
Educational surcharge 853481.28 575443.10
Local education surcharge 568987.50 383628.74
Property tax 1443369.01 1526635.96
Land use tax 199423.40 199423.38
Stamp duty 306372.05 343256.55
Other 35908.22 50125.80
Total 4869063.63 4083979.63
5.36 Selling and Distribution Expenses
Items Reporting period Same period of last year
Employee remunerations 6422766.40 7326689.09
Claims experiment expenses 744627.60 471482.30
Sales commission and after sales service fees 0.00 738747.16
Rental expenses 9460.19 11046.05
Travel expenses 271335.53 273858.58
Advertisements charges and sales promotion 1405624.48 1462551.31
Administrative expenses 66252.32 74926.77
Others 2050375.27 1347444.80
Total 10970441.79 11706746.06
5.37 General and Administrative Expenses
Items Reporting period Same period of last year
Employee remunerations 27334961.83 21966318.36
Depreciation and amortization of assets 4279279.75 4030881.41
Rental expenses 77436.62 74971.38
Insurance expenses 1070041.28 747590.60
Administrative expenses 799812.78 653659.38
Travel expenses 1036675.97 1432973.84
Consultant fees 1302729.14 1208674.02
Maintenance expenses 1739472.32 2040248.61
Others 3503781.13 2536167.26
Total 41144190.82 34691484.86
111Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
5.38 Research and Development Expenses
Items Reporting period Same period of last year
Employee remunerations 22937876.75 22384976.87
Test expenses 2641655.79 2916166.39
Depreciation and amortization of assets 1280265.66 1451857.05
Certification expenses 600871.17 697826.50
Rental expenses 17495.11 19520.43
Patent expenses 398895.83 290434.10
Travel expenses 137894.06 221262.09
Maintenance expenses 762449.74 871841.42
Consultant fees 13330.19 118453.68
Others 638404.11 969418.50
Total 29429138.41 29941757.03
5.39 Finance Expenses
Items Reporting period Same period of last year
Interest expenses 9984247.79 11155646.85
Including: interest expense on lease liabilities 8337929.19 8210823.74
Less: Interest income 2718551.59 3750247.27
Foreign exchange losses 6058239.69 -5484832.93
Bank charges 242629.96 434325.03
Total 13566565.85 2354891.68
5.40 Other Income
Items Reporting period Same period of last year
Government grant 49300.00 1727050.00
Charges of withholding individual income tax 89990.87 81078.78
Total 139290.87 1808128.78
5.41 Investment Income
Items Reporting period Same period of last year
Income from long-term equity investments accounted for using the
equity method -1759989.63 -354876.17
Investment income of trading financial assets during the holding
period 0.00 1487355.87
Investment income from disposal of trading financial assets 0.00 0.00
Other current assets for financial investments 12031111.05 15443949.93
Total 10271121.42 16576429.63
5.42 Gains on Changes in Fair Values
Source of gains from fair value changes Reporting period Same period of last year
Held-for-trading financial assets 0.00 -942083.33
Including: gains on changes in fair value of derivatives 0.00 0.00
Financial investments 0.00 -942083.33
Held-for-trading financial liabilities -89300.00 0.00
Total -89300.00 -942083.33
112Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
5.43 Impairment Loss of Credit
Items Reporting period Same period of last year
Bad debt of accounts receivables -573124.35 2015225.65
Bad debt of other receivables -10446.72 93842.03
Total -583571.07 2109067.68
5.44 Impairment Loss of Assets
Items Reporting period Same period of last year
Impairment of inventories 2869339.19 2803751.89
Impairment of fixed assets 582072.44 14916.92
Total 3451411.63 2818668.81
5.45 Gains from Disposal of Assets
Items Reporting period Same period of last year Recognized in currentextraordinary gains and losses
Income from the disposal of fixed
assets 0.00 1265588.90 0.00
Total 0.00 1265588.90 0.00
5.46 Non-operating Income
Items Reporting period Same period of last year Recognized in currentextraordinary gains and losses
Other 1155943.73 679417.25 1155943.73
Total 1155943.73 679417.25 1155943.73
5.47 Non-operating Expenses
Items Reporting period Same period of last year Recognized in currentextraordinary gains and losses
Loss from damage or scrapping of
non-current assets 0.00 4472.80 0.00
Including: fixed assets 0.00 4472.80 0.00
Donations 36000.00 0.00 36000.00
Fines expenses 204713.51 69113.01 204713.51
Other 0.00 469.26 0.00
Total 240713.51 74055.07 240713.51
5.48 Income Tax Expenses
5.48.1 Details of income tax expenses
Items Reporting period Same period of last year
Current tax expenses 4098660.55 4654110.88
Deferred tax expenses -10084915.59 -2784175.92
Total -5986255.04 1869934.96
5.48.2 Reconciliation of accounting profit and income tax expenses
Items Reporting period Same period of last year
Profit before tax -46526511.61 21499777.62
Income tax expense at the statutory /applicable tax rate -11631627.90 5374944.41
Effect of different tax rate of subsidiaries 5252109.67 -1283907.82
Adjustments of impact from prior period income tax 449537.86
113Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Items Reporting period Same period of last year
Effect of income that is exempt from taxation
Effect of non-deductible costs expenses or losses 29702.63 44508.09
Effect of previously unrecognized deductible losses
recognised as deferred tax assets
Effect of deductible temporary differences and deductible
losses not recognised as deferred tax assets 3589634.18 482539.30
R&D expenses plus deduction -3226073.62 -3197686.88
Income tax expenses -5986255.04 1869934.96
5.49 Other Comprehensive Income
For details of the other comprehensive income and related tax effect transfer to profit or loss
and adjustment of other comprehensive income refer to Note 5.31 Other Comprehensive
Income.
5.50 Notes to the Statement of Cash Flow
5.50.1 Cash flows from operating activities
5.50.1.1 Other cash received relating to operating activities
Items Reporting period Same period of last year
Government grants 49300.00 1727050.00
Interests income 2718551.59 3750247.27
Rent income 15430931.78 17804902.14
Funds in current account and others 6384232.11 8031919.10
Total 24583015.48 31314118.51
5.50.1.2 Other cash payments relating to operating activities
Items Reporting period Same period of last year
Penalties and donations 240713.51 69113.01
Bank charges 242629.96 434325.03
Sales expenses general and administrative expenses
and research and development expenses paid by cash 58194995.06 64357978.31
Current accounts and others 229772.00 70000.00
Total 58908110.53 64931416.35
5.50.2 Cash flows from investing activities
5.50.2.1 Other cash received relating to investing activities
Items Reporting period Same period of last year
Time deposits recovered after maturity for the purpose
to earn interest income in financial institutions 189912423.93 173102725.55
Total 189912423.93 173102725.55
5.50.2.2 Other cash payments relating to investing activities
Items Reporting period Same period of last year
Time deposits in financial institutions for the purpose
of earning interest income 79912423.93 116202277.78
Total 79912423.93 116202277.78
114Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
5.50.3 Cash flows from financing activities
5.50.3.1 Other cash received relating to financing activities
Items Reporting period Same period of last year
Security deposit of L/C 0.00 3047365.87
Total 0.00 3047365.87
5.50.3.2 Other cash payments relating to financing activities
Items Reporting period Same period of last year
Lease payments of right-of-use assets 480960.00 0.00
Security deposit of L/C 0.00 2754112.41
Total 480960.00 2754112.41
5.51 Supplementary Information to the Statement of Cash Flows
5.51.1 Supplementary information to the statement of cash flows
Supplementary information Reporting period Same period of lastyear
1. Adjustments of net profit to cash flows from operating activities:
Net profit -40540256.57 19629842.66
Add: Provisions for impairment of assets 3451411.63 2818668.81
Impairment loss of credit -583571.07 2109067.68
Depreciation of fixed assets oil and gas asset and productive biological assets 17966921.58 16754679.95
Depreciation of use rights assets 8008503.12 7354598.21
Amortisation of intangible assets 383555.17 407469.30
Amortisation of long-term deferred expenses 939207.23 1270634.70
Gains on disposal of fixed assets intangible assets and other long-term assets 0.00 -1265588.90
Loss on scrapping of fixed assets 0.00 4472.80
Gains on changes in fair value 89300.00 942083.33
Finance income 16042487.48 8762972.78
Investment income -10271121.42 -16576429.63
Decreases in deferred tax assets -10084915.59 -2784175.92
Increases in deferred tax liabilities 0.00 0.00
Increases in inventories 18727869.08 11864014.29
Increases in operating receivables 12867923.57 79376029.72
Increases in operating payables -65393366.47 -160915208.25
Others 0.00 0.00
Net cash flows from operating activities -48396052.26 -30246868.47
2. Significant investing and financing activities not involving cash receipts and
payments:
Conversion of debt into capital
Convertible corporate bonds maturing within one year
Fixed assets acquired under finance leases
3. Net increases in cash and cash equivalents:
Cash equivalents at the end of the reporting period 483329551.38 389233066.05
Less: Cash equivalents at the beginning of the reporting period 460847776.00 441890727.50
Add: Cash equivalents at the end of the reporting period
Less: Cash equivalents at the beginning of the reporting period
Net increase in cash and cash equivalents 22481775.38 -52657661.45
115Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
5.51.2 The components of cash and cash equivalents
Items Reporting period Same period of last year
1. Cash 483329551.38 460847776.00
Including: Cash on hand 554414.65 814719.21
Cash in bank available for immediate use 482711372.99 460016679.73
Other monetary funds available for immediate use 63763.74 16377.06
Deposit in the central banks available for immediate use 0.00 0.00
Deposit in peer firms 0.00 0.00
Loan to peer firms 0.00 0.00
2. Cash equivalents 0.00 0.00
Including: Bond investments maturing within three months 0.00 0.00
3. Cash and cash equivalents at the end of the reporting period 483329551.38 460847776.00
5.51.3 Monetary funds that are not cash and cash equivalents
Items Reporting period Same period of last year Reason
Letter of credit margin 0.00 1700000.56 Not readily available
Total 0.00 1700000.56
5.52 Foreign Currency Monetary Items
5.52.1 Details for foreign currency monetary items:
Items Carrying amount in foreign currency Carrying amount in CNY on 30 Juneon 30 June 2026 Exchange rate 2026
Cash and cash
equivalents
Including: USD 11211309.66 6.8109 76359108.97
JPY 409359706.42 0.042045 17211528.86
IDR 1901724047.62 0.000385 731908.93
EUR 34949.72 7.7671 271457.97
GBP 7024.87 9.0145 63325.69
HKD 1016693.23 0.86855 883048.90
HUF 81016.00 0.021063 1706.44
Total 95522085.76
Accounts receivables
Including: USD 18414042.80 6.8109 125416204.11
JPY 73142051.00 0.042045 3075257.53
Total 128491461.64
Accounts payables
Including: USD 5180541.93 6.8109 35284153.03
HKD 1495.70 0.86855 1299.09
JPY 4399038.39 0.042045 184957.57
IDR 6949990691.53 0.000385 2674815.12
Total 38145224.81
Other receivables
116Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Items Carrying amount in foreign currency Exchange rate Carrying amount in CNY on 30 Juneon 30 June 2026 2026
Including: EUR 8544.00 7.7671 66362.10
USD -28937.35 6.8109 -197089.40
IDR 1685656106.00 0.000385 648751.72
Total 518024.42
Other payables
Including: HKD 51500.00 0.86855 44730.33
JPY 252375.00 0.042045 10611.11
USD 92694.94 6.8109 631335.96
IDR 1396055660.59 0.000385 537294.35
Total 1223971.75
5.52.2 Description of overseas business entities
Name of the overseas operating entity: Pt.Star Comgistic Indonesia
Main business area: Indonesia
Accounting standard currency: US dollars
5.53 Lease
5.53.1 The Company as the lessee
Current profit and loss and cash flow related to the lease
Items Reporting period
Short-term lease expenses included in the profit and loss of the current period 78424.78
Lease expense of low-value assets included in current period (except short-term lease) 0.00
Interest expense of the lease liability 8337929.19
Variable lease payments not included in the measurement of lease liabilities as included in
current profits and losses 0.00
Income obtained from the sublease of the use right assets 6904150.41
Total cash outflow related to leasing 480960.00
5.53.2 The company shall be the lessor
5.53.2.1 Operation lease
Lease income
Items Reporting period
Lease income 7844797.80
Including: income related to variable lease payments not included in the measurement of
lease receipts 0.00
6. R&D expenditures (Research and Development)
Item Reporting period Same period of last year
Employee remunerations 22937876.75 22384976.87
Test expenses 2641655.79 2916166.39
Depreciation and amortization of assets 1280265.66 1451857.05
117Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Item Reporting period Same period of last year
Certification expenses 600871.17 697826.50
Rental expenses 17495.11 19520.43
Patent expenses 398895.83 290434.10
Travel expenses 137894.06 221262.09
Maintenance expenses 762449.74 871841.42
Consultant fees 13330.19 118453.68
Others 638404.11 969418.50
Total 29429138.41 29941757.03
Including: Expense recognition 29429138.41 29941757.03
Capitalization
7. CHANGES IN THE SCOPE OF CONSOLIDATION
7.1 business combination not under common control：none
7.2 business combination under common control：none
7.3 Changes in the scope of consolidation for other reasons：
In October 2025 company established a subsidiary Xiamen Yipengxin Trading Co. Ltd. In
January 2026 TKL completed the paid-in capital contribution to Yipengxin. From the date of the
paid-in capital being in place Xiamen Yipengxin Trading Co. Ltd. was included in the
consolidated financial statements.In May 2026 company established a sub-subsidiary Xiamen Tsannkuen Investment Co. Ltd..From the date of its registration Xiamen Tsannkuen Investment Co. Ltd. was included in the
consolidated financial statements.
8. NTERESTS IN OTHER ENTITIES
8.1 Interests in Subsidiaries
8.1.1 Composition of corporate group
Percentage of
Principal
Name of subsidiary Registered capital place of Registered Nature of
equity interests Methods of
business City business
by the
Company (%) acquisition
Direct Indirect
Manufactures
TsannKuen (Zhangzhou)
Enterprise Co. Ltd.(TKL) USD 160 million Zhangzhou Zhangzhou
home Acquired through
electronic 75.00 establishment
appliance
TsannKuen China Manufactures Acquired through
(Shanghai) Enterprise Co. USD 40 million Shanghai Shanghai home 46.875 business
Ltd. (TKS) electronic combination underappliance common control
Xiamen Tsannkuen Acquired through
Property Services Co. CNY 1.5 million Xiamen Xiamen Property 100.00 establishment
Ltd. (TKW) services
Hong Kong Hong Kong Investment Acquired through
East Sino Development HKD 413.1705 Trading business
Limited. (East Sino) million 75.00 combination under
common control
118Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Percentage of
Principal equity interests
Name of subsidiary Registered capital place of Registered Nature of Methods of
business City business
by the
Company (%) acquisition
Direct Indirect
Indonesia Indonesia Manufactures Acquired through
Pt.StarComgistic
Indonesia USD 53 million
home business
electronic 75.00 combination under
appliance common control
Pt.Star Comgistic Indonesia Indonesia Real estate Acquired through
Property Development USD 5.01 million development 75.00 establishment
Indonesia
Orient Star Investments USD 0.185 Hong Kong Hong Kong Investment Acquired through
Limited million Trading 75.00 business
Xiamen Yipengxin Acquired through
CNY 2 million Xiamen Xiamen Trading 75
Trading Co. Ltd. establishment
Xiamen Tsannkuen Xiamen Investment Acquired throughCNY 50 million Xiamen 75
Investment Co. Ltd. establishment
8.1.2 Significant non-wholly owned subsidiaries
Dividends declared to
Name of Proportion of ownership Profit or loss attributable to Non-controlling
subsidiary interest held by non- non- controlling interests
distribute to non-
controlling interest during the reporting period controlling interests during
interests at the end of
the reporting period the reporting period
TKL 25.00 -9048964.46 5806055.85 318799306.77
SCI 25.00 -3017586.08 46366259.30
8.1.3 Main financial information of significant non-wholly owned subsidiaries
30 June 2026
Name of
subsidiary
Current assets Non-current Total assets Current Non-currentassets liabilities liabilities Total liabilities
TKL 1291962075.56 808495156.15 2100457231.71 419717067.50 405542937.14 825260004.64
SCI 119724761.05 103672438.79 223397199.84 37932162.64 37932162.64
(Continued)
Name of 1 January 2026
subsidiary Current assets Non-currentassets Total assets
Current Non-current
liabilities liabilities Total liabilities
TKL 1317356645.48 873294984.74 2190651630.22 454474757.15 401559564.79 856034321.94
SCI 150489209.26 106466891.84 256956101.10 53233785.24 53233785.24
(Continued)
Reporting period
Name of subsidiary
Revenue Net profit/(loss) Total comprehensive Net cash flows fromincome operating activities
TKL 513515711.53 -36195857.84 -54019356.97
SCI 81177318.59 -12070344.30 2629427.53
119Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
(Continued)
The same period of last year
Name of subsidiary
Revenue Net profit/(loss) Total comprehensive Net cash flows fromincome operating activities
TKL 608398533.13 19422435.70 -22076764.62
SCI 67134765.13 -5354351.05 -1764877.56
8.2 Interests in Subsidiaries
8.2.1 Summarized financial information of individually immaterial joint ventures and
associates
Item 30 June 2026 1 January 2026
Associates:
Total Book Value of investments 6124949.19 7884938.82
The following aggregate amounts are presented based
on the shareholding ratio (%)
Net profits -1471179.24 -1285108.87
Other comprehensive income 0.00 0.00
Total comprehensive income -1471179.24 -1285108.87
9. GOVERNMENT GRANTS
Item Reporting period The same period of last year
Government grants related to earnings 49300.00 1727050.00
Total 49300.00 1727050.00
10. RISK RELATED TO FINANCIAL INSTRUMENTS
10.1 Types of risks arising from financial instruments
The company faces various financial risks during its operations including credit risk liquidity risk and
market risk (including foreign exchange risk interest rate risk and other price risks). The following
describes these financial risks and the risk management policies adopted by the company to mitigate them:
The Board of Directors is responsible for planning and establishing the company's risk management
framework formulating risk management policies and related guidelines and overseeing the
implementation of risk management measures. The company has established risk management policies to
identify and analyze the risks it faces. These policies provide clear regulations for specific risks covering
aspects such as market risk credit risk and liquidity risk management. The company regularly assesses
changes in the market environment and its business activities to determine whether updates to its risk
management policies and systems are necessary. Risk management is conducted by the Risk Management
Committee according to policies approved by the Board of Directors. The Risk Management Committee
collaborates closely with other business departments to identify evaluate and mitigate relevant risks. The
company’s internal audit department conducts regular reviews of risk management controls and
procedures and reports the results to the Audit Committee.The company diversifies financial instrument risks through appropriate investment and business portfolio
120Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
strategies and reduces concentration risks associated with single industries specific regions or particular
counterparties by implementing corresponding risk management policies.
10.1.1 Credit Risk
Credit risk refers to the risk of financial loss arising from a counterparty's failure to fulfill its contractual
obligations.The main sources of credit risk for the company include cash and bank balances notes receivable accounts
receivable receivables financing contract assets other receivables debt investments other debt
investments and financial guarantee contracts as well as debt instruments measured at fair value through
profit or loss and derivative financial assets that are not subject to impairment assessment. As of the
balance sheet date the carrying amount of the company's financial assets represents its maximum exposure
to credit risk.The company's cash and bank balances are primarily held with state-owned banks and other large and
medium-sized listed banks with high credit ratings. The company believes there is no significant credit risk
and it is unlikely that major losses will arise from bank defaults.For notes receivable accounts receivable receivables financing contract assets and other receivables the
company has established policies to control credit risk exposure. The company assesses the
creditworthiness of customers based on their financial condition the possibility of obtaining guarantees
from third parties credit history and other factors such as current market conditions and sets appropriate
credit terms accordingly. The company monitors customer credit records regularly. For customers with poor
credit records the company may take actions such as written reminders shortening credit periods or
canceling credit periods to ensure that its overall credit risk remains within a manageable range.
10.1.2 Liquidity Risk
Liquidity risk refers to the risk of a shortage of funds when a company needs to settle obligations
denominated in cash or other financial assets.The company's policy is to maintain sufficient cash to repay maturing debts. Liquidity risk is centrally
controlled by the finance department. The finance department monitors cash balances readily marketable
securities and rolling forecasts of cash flows for the next 12 months to ensure that the company has
adequate funds to meet its debt obligations under all reasonable scenarios. Additionally the company
continuously monitors compliance with loan agreements and secures commitments from major financial
institutions to provide sufficient standby funding to meet both short-term and long-term capital
requirements.
10.1.3 Market Risk
121Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Market risk refers to the risk that the fair value or future cash flows of financial instruments will fluctuate
due to changes in market prices including foreign exchange risk interest rate risk and other price risks.* Interest Rate Risk
Interest rate risk refers to the risk that the fair value or future cash flows of financial instruments will
fluctuate due to changes in market interest rates.Fixed-rate and floating-rate interest-bearing financial instruments expose the company to fair value interest
rate risk and cash flow interest rate risk respectively. The company determines the proportion of fixed-rate
versus floating-rate instruments based on market conditions and maintains an appropriate mix of fixed and
floating rate instruments through regular reviews and monitoring. When necessary the company uses
interest rate swaps to hedge interest rate risks.* Foreign Exchange Risk
Foreign exchange risk refers to the risk that the fair value or future cash flows of financial instruments will
fluctuate due to changes in foreign exchange rates.The company continuously monitors foreign currency transactions and the scale of foreign currency assets
and liabilities to minimize its exposure to foreign exchange risks. Additionally the company may enter into
forward foreign exchange contracts or currency swap contracts to hedge against foreign exchange risks.During the current and previous periods the company did not enter into any forward foreign exchange
contracts or currency swap contracts.The company's exposure to foreign exchange risk mainly arises from financial assets and liabilities
denominated in US dollars. The amounts of foreign currency financial assets and liabilities converted into
CNY are listed below:
Items 30 June 2026 1 January 2026
Cash and cash equivalent 95522085.76 130186633.20
Accounts receivable 128491461.64 137352795.82
Other receivables 518024.42 1036138.74
Accounts payable 38145224.81 43825342.58
Other payables 1223971.75 2897152.27
Total 263900768.38 315298062.61
11. FAIR VALUE DISCLOSURES
The inputs used in fair value measurements are divided into three levels:
Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that are
available at the measurement date.Level 2 inputs are inputs other than Level 1 inputs that are directly or indirectly observable for the related
asset or liability.Level 3 inputs are unobservable inputs for the relevant asset or liability.The level to which the fair value measurement results belong is determined by the lowest level to which the
inputs that are significant to the fair value measurement as a whole belong.
122Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
11.1 Assets and Liabilities Measured at Fair Value as at 30 June 2026
Fair value at 30 June 2026
Items
Level 1 Level 2 Level 3 Total
Recurring fair value measurements
(a) Held-for-trading financial assets
(i) Financial assets at fair value through profit or
loss
Debt instruments
Equity instruments
Derivatives
(b) Other investments in equity instruments 40000.00 40000.00
(c) Other non-current financial assets
Total assets measured at fair value on a recurring
basis
(d) Held-for-trading financial liabilities
(i) Financial liabilities at fair value through profit
or loss
Including: Held-for-trading bonds
Derivatives 89300.00 89300.00
Others
Total liabilities measured at fair value on a
recurring basis 89300.00 89300.00
11.2 Determination for the Quoted Prices of Fair Value Measurement in Level 2 on a
Recurring or Nonrecurring Basis
The fair value measurement is based on the valuation provided by the bank where the unsettled forward
foreign exchange is located on the balance sheet date.
12. RELATED PARTIESAND RELATED PARTYTRANSACTIONS
12.1 General Information of the Parent Company
Percentage of
Registered Nature of the Registered capital Voting rights in the
Name of the parent equity interests in
address business (NTD ten thousand) Company (%)
the Company (%)
Manufactures and
STAR COMGISTIC CAPITAL
Taiwan sales electrical 300000.00 42.90 44.68
CO. LTD.equipment
Note: The ultimate controlling party of the Company is STAR COMGISTIC CAPITAL CO. LTD.
12.2 General Information of Subsidiaries
Refer to Notes 8 INTERESTS IN OTHER ENTITIES for details of the subsidiaries.
12.3 Joint Ventures and Associates
Name of Joint Venture or Associate Relationship with the Company
Shanghai Upa Smart Chain Home Appliances Co. Ltd. Associates of the Company's Subsidiaries
123Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
12.4 Other Related Parties of the Company
Name of related party Related party relationship
Thermaster Electronic (Xiamen) Ltd. The company is directly controlled by the key managementand closed family members
Tsann Kuen Enterprise Co. Ltd. Same actual controller
Tsann Kuen (Japan) Electric Co. Ltd. Same actual controller
12.5 Related Party Transactions
12.5.1 Purchases or sales of goods rendering or receiving of services
Purchases of goods receiving of services:
Related parties Content of Reporting period Approval trade Whether exceed Same period of lasttransaction credit trade credit or not year
Thermaster
Electronic Purchase of goods 14987155.60 35000000.00 No 12327823.19
(XIAMEN) Limited
Sales of goods/provide labour services
Related parties Nature of thetransaction(s) Reporting period Same period of last year
STAR COMGISTIC CAPITAL CO. LTD. Sales of goods 481863.14 1662803.05
Shanghai Upa Smart Chain Home Appliances Co. Ltd. Sales of goods 3182673.27 2451939.01
Total 3664536.41 4114742.06
12.5.2 Management remuneration
Currency: Ten thousand yuan
Item Reporting period Same period of last year
Key management personnel compensation 141.39 208.20
12.5.3 Other related party transactions
Related parties Nature of thetransaction(s) Reporting period Same period of last year
Tsann Kuen (Japan) Electric Co. Ltd. Accept labor service 656513.62 735529.89
Total 656513.62 735529.89
12.6 Receivables and Payables with Related Parties
12.6.1 Receivables
30 June 2026 1 January 2026
Items
Book balance Bad debt Bad debtprovision Book balance provision
Accounts receivable
STAR COMGISTIC CAPITAL CO. LTD. 199355.04 611403.68
124Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
30 June 2026 1 January 2026
Items
Book balance Bad debt Book balance Bad debtprovision provision
Accounts receivable
Shanghai Upa Smart Chain Home Appliances Co. Ltd. 2800329.87 2837533.62
Total 2999684.91 3448937.30
12.6.2 Payables
Items 30 June 2026 1 January 2026
Accounts payable
Thermaster Electronic (Xiamen) Ltd. 9459460.78 5975170.05
Total 9459460.78 5975170.05
13. COMMITMENTS AND CONTINGENCIES
13.1 Significant Commitments
As of June 30 2026 the Company has no significant commitments to disclose.
13.2 Contingencie
As of 30th June 2026 The Company has no significant contingencies need to be disclosed.
14. EVENTSAFTER THE REPORTING PERIOD
None.
15. NOTES TO THE MAIN ITEMS OF THE FINANCIAL STATEMENTS OF THE
PARENT COMPANY
15.1 Accounts Receivable
15.1.1 Accounts receivable by aging
Aging 30 June 2026 1 January 2026
Within 1 year 460693.61 4480.88
Including: 1 – 90 days 460693.61 4480.88
91 – 180 days
181 – 270 days
271 – 365 days
1-2 years 107.83 107.83
2-3 years
Over 3 years 25418.08 25418.08
ncluding: 3-4 years
4-5 years 9677.56
Over 5 years 25418.08 15740.52
Subtotal 486219.52 30006.79
Less: Provision for bad debt 25525.91 25635.62
Total 460693.61 4371.17
125Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
15.1.2 Accounts receivable by bad debt provision method
30 June 2026
Category Book balance Provision for bad debt
Carrying amount
Amount Proportion (%) Amount Proportion (%)
Provision for bad debt recognised individually 0.00 0.00 0.00 0.00 0.00
Provision for bad debt recognised collectively 486219.52 100.00 25525.91 5.25 460693.61
Including: Portfolio by age 25525.91 5.25 25525.91 100.00 0.00
Portfolio by related parties 460693.61 94.75 0.00 0.00 460693.61
Total 486219.52 100.00 25525.91 5.25 460693.61
(Continued)
1 January 2026
Category Book balance Provision for bad debt
Carrying amoun
Amount Proportion (%) Amount Proportion (%)
Provision for bad debt recognised individually 0.00 0.00 0.00 0.00 0.00
Provision for bad debt recognised collectively 30006.79 100.00 25635.62 85.43 4371.17
Including: Portfolio by age 27963.91 93.19 25635.62 91.67 2328.29
Portfolio by related parties 2042.88 6.81 0.00 2042.88
Total 30006.79 100.00 25635.62 85.43 4371.17
Specific instructions for provision for bad debts: accounts receivable with bad debt provision recognised
collectively by aging
30 June 2026
Items
Book balance Provision for bad debt Provision ratio (%)
Not overdue 0.00 0.00 0.00
Overdue 1 – 30 days 0.00 0.00
Overdue 31 – 60 days 0.00 0.00 0.00
Overdue 61 – 90 days 0.00 0.00 0.00
Overdue more than 90 days 25525.91 25525.91 100.00
Total 25525.91 25525.91 100.00
(Continued)
1 January 2026
Items
Book balance Provision for bad debt Provision ratio (%)
Not overdue
0.000.00
Overdue 1 – 30 days
2438.00109.714.50
Overdue 31 – 60 days
0.000.00
Overdue 61 – 90 days
0.000.00
Overdue more than 90 days
25525.9125525.91100.00
126Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
1 January 2026
Items
Book balance Provision for bad debt Provision ratio (%)
Total
27963.9125635.6291.67
For the criteria for recognition of bad debts and the description of bad debt provision by combination
please refer to note 3.9.
15.1.3 Changes in Provision for bad debts
Changes during the reporting period
Category 1 January 2026 Recovery or 30 June 2026Provision reversal Write-off Others
Provision for bad debt
recognised collectively 25635.62 -109.71 0.00 0.00 0.00 25525.91
Total 25635.62 -109.71 0.00 0.00 0.00 25525.91
15.1.4 Top five closing balances by entity
Entity Balance at 30 Contract Assets at Proportion of the balance to the total Provision for
name June 2026 30 June 2026 Total accounts receivable and Contract Assets (%) bad debt
No. 1 460693.61 460693.61 94.75
No. 2 20418.08 20418.08 4.20 20418.08
No. 3 5000.00 5000.00 1.03 5000.00
No. 4 107.83 107.83 0.02 107.83
Total 486219.52 0.00 486219.52 100.00 25525.91
15.2 Other Receivables
15.2.1 Other receivables by category
Items 30 June 2026 1 January 2026
Interest receivable
Dividend receivable
Other receivables 5816753.71 5020385.44
Total 5816753.71 5020385.44
15.2.2 Other receivables
15.2.2.1 Other receivables by aging
Aging 30 June 2026 1 January 2026
Within 1 year 5816353.71 4933605.68
Including: 1 – 90 days 5710353.71 4888067.24
91 – 180 days 106000.00 21372.44
181 – 270 days 0.00
271 – 365 days 0.00 24166.00
1-2 years 51000.00 174335.66
2-3 years 60000.00
127Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Aging 30 June 2026 1 January 2026
Over 3 years 0.00
ncluding: 3-4 years 0.00
4-5 years 0.00
Over 5 years 0.00
Subtotal 5927353.71 5107941.34
Less: Provision for bad debt 110600.00 87555.90
Total 5816753.71 5020385.44
15.2.2.2 Other receivables by nature
Nature 30 June 2026 1 January 2026
Other current balances 4148837.75 3391221.61
Deposit 101000.00 101000.00
Due from related parties 1677515.96 1615719.73
Subtotal 5927353.71 5107941.34
Less: bad debt provision 110600.00 87555.90
Total 5816753.71 5020385.44
15.2.2.3 Bad debt provision of other receivable
1st stage 2nd stage 3rd stage
Provision for bad debt Expected credit loss Expected credit loss Expected credit loss Total
within following 12 within life time within life time
months (unimpaired) (impaired)
Balance on January 1 2026 87555.90 87555.90
On January 1 2026 Other receivable
carrying amount on the book —— —— —— ——
transfer to 2nd stage
transfer to 3rd stage
reverse to 2nd stage
reverse to 1st stage
Accrued 23044.10 23044.10
Reversed
Recollected
Written off
Others
Balance on June 30 2026 110600.00 110600.00
15.2.2.4 Provision for bad debts charged off reversed or recovered during the period
Changes during the reporting period
Category 1 January 2026 30 June
Provision Recovery orreversal Write-off Others
2026
Provision for bad debt recognised
individually
Accounts receivable with provision for
bad debt recognised collectively 87555.90 23044.10 110600.00
Total 87555.90 23044.10 110600.00
15.2.2.5 Other receivables write-off during the reporting period
Entity name Nature Balance as of 30
Proportion of the Allowance for
June 2026 Aging balance to the total bad debts as atother receivables 30 June 2026
128Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
(%)
Tsann Kuen (CHINA) Enterprise Co. Related party
Ltd. 1677515.96 Within 90 days 28.30
Leyu Era (Xiamen Sports) Accounts Within 90 days
Receivable 202199.71 3.41
State Grid Fujian Electric Power Co. Accounts Within 90 days
Ltd. Xiamen Power Supply Company Receivable 177682.42 3.00
JD Official Store Deposit 100000.00 1-2 years 1.68
Xiamen Lurenjia Sports Culture Co. Accounts Within 90 days
Ltd. Receivable 95880.00 1.62
Total 2253278.09 38.01
15.3 Long-term Equity Investments
15.3.1 Situation of long-term equity investments
30 June 2026 1 January 2026
Items
Book Provision for
Provision
impairment Carrying amount Book balance for Carrying amountbalance impairment
Investments in
subsidiaries 923414701.56 0.00 923414701.56 923414701.56 0.00 923414701.56
Total 923414701.56 0.00 923414701.56 923414701.56 0.00 923414701.56
15.3.2 Investments in subsidiaries
Increase during Decrease Provision for Provision for
Investees 1 January 2026 the reporting during thereporting 30 June 2026
impairment impairment at
period during theperiod reporting period 30 June 2026
TKL 921914701.56 921914701.56
TKW 1500000.00 1500000.00
Total 923414701.56 923414701.56
15.4 Revenue and Cost of Sales
The Reporting period The same period of last year
Items
Revenue Costs of sales Revenue Costs of sales
Principal activities 812773.22 578279.98 1648487.96 1270757.64
Other activities 34549287.88 22337148.77 31676528.08 19458713.27
Total 35362061.10 22915428.75 33325016.04 20729470.91
15.5 Investment Income
Items The Reporting period The same period of last year
Investment income from long-term equity investments under equity
method 18004677.24 40989673.41
Total 18004677.24 40989673.41
16. SUPPLEMENTARY INFORMATION
16.1 Extraordinary Gains or Losses
Items Amount Description
129Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
Items Amount Description
Losses on disposal of non-current assets (inclusive of impairment allowance write-offs)
Government grants recognised in current profit or loss (except government grants
that is closely related to operations and determined based on a fixed scale according to 139290.87
the national unified standard)
Gains /(losses) arising from changes in fair value of held-for-trading financial assets
and held-for-trading financial liabilities during the holding period and investment
income arising from disposal of held-for-trading financial assets held-for-trading -1849289.63
financial liabilities and assets classified as held for sale except effective hedging
transactions related to the Company's principal activities
Funds occupation fee recognised in current profit or loss from non-financial companies
Gains /(losses) on entrusted investments or asset managements
Gains /(losses) arising from entrusted loans to other entities
Provision for impairment of each asset due to force majeure such as a natural
disaster
Reversal of provision for impairment of accounts receivable tested for impairment
individually
The excess of attributable fair value of net identifiable assets over the consideration
paid for subsidiaries associates or joint ventures recognised by the Company
Net gains /(losses) of subsidiaries arising from business combination under common
control from the beginning of the reporting period till the combination date
Gains/(losses) generated from non-monetary asset exchange
Gains /(losses) on debt restructuring
Corporate restructuring charge such as expenditure for staff resettlement
and integration cost
Impact of one-off adjustment to current profit or loss based on the requirements of
taxation and accounting laws and regulations
Share-based payment expenses recognized at one time due to cancellation or
modification of the equity incentive plan
For cash-settled share-based payments gains or losses arising from changes in the fair
value of employee remuneration payable after the vesting date
Gains /(losses) arising from changes in fair value of investment properties
adopting fair value model for subsequent measurement
Gains /(losses) from excess of fair value in non-arm’s length transactions
Gains /(losses) arising from contingencies other than those related to principal
activities of the Company
Custody fee income from entrusted operations
Other non-operating income/expenses except for items mentioned above 915230.22
Other extraordinary gains/(losses) defined
Less: Income tax effects -123876.42
Non-controlling interests effects (after tax) -186067.23
Total -484824.89
16.2 Return on Net Assets and Earnings Per Share (‘EPS’)
EPS
Profit for the reporting period Weighted average returnon net assets (%) Basic (Yuan per share) Diluted (Yuan per share)
Net profit attributable to ordinary -0.03 -0.15 -0.15
130Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements
EPS
Profit for the reporting period Weighted average returnon net assets (%) Basic (Yuan per share) Diluted (Yuan per share)
shareholders
Net profit attributable to ordinary
shareholders after extraordinary gains -0.03 -0.15 -0.15
and losses
16.3 Supplementary Information on Changes in Accounting Policies
Please see Note 3.28 “Changes in Significant Accounting Policies and Accounting Estimates” for details.Name of the Company: TsannKuen (China) Enterprise Co. Ltd.Date: 6 August 2026
131
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