2025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

TSANN KUEN (CHINA) ENTERPRISE CO. LTD.2025 SEMI-ANNUALREPORT

(Unaudited)

August 2025

12025 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.

22025 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 &.. 20

Section V. Significant Events ...................... 22

Section VI. Change in Shares & Shareholders .........31

Section VII. Bonds ................................. 34

Section VIII. Financial Report ..................... 35

32025 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.

42025 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.RMB Refers to RMB YUAN

52025 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 2024 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 2024 Annual Report.

62025 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 652773296.39 788085998.03 -17.17

Net profit attributable to

shareholders of the Company 16000988.65 33989579.63 -52.92

Net profit attributable to

shareholders of the Company

before extraordinary gains and 13521688.15 29146017.36 -53.61

losses

Net cash flows from operating

activities -30246868.47 -26296992.61 -15.02

Basic EPS (RMB Yuan/share) 0.09 0.18 -50.00

Diluted EPS (RMB

Yuan/share) 0.09 0.18 -50.00

Weighted average ROE (%) 1.44 3.11 -1.67

Item As at the end of theReporting period As at the end of last year +/- (%)

Total assets 2479488976.29 2635048828.74 -5.90

Net assets attributable to

shareholders of the Company 1084653963.43 1102399642.68 -1.61

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) 0.09

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

72025 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) 1265588.90

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 1808128.78

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 190396.37

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 605362.18

Other extraordinary gains/(losses) defined

Less: Income tax effects 582940.72

Non-controlling interests effects (after tax) 807235.01

Total 2479300.50

Other gain and loss items that meet the definition of an extraordinary gain/loss:

82025 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

1. Forty-seven years of experience in the R&D and manufacturing of small household appliances has

enabled the company to accumulate profound technological heritage and rich experience in the industry.

2. The company has long adhered to the corporate culture of “research and development as the core”

established a perfect research and development technology service system and has a nationally recognized

enterprise technology center forming a complete innovation chain.

3. During the reporting period the company obtained 19 R&D patents including 5 invention patents 10

utility model patents and 4 appearance patents. The patent layout covers product structure core components

intelligent control and other dimensions further consolidating the company's technological leadership.II.Synergistic Innovation and Ecosystem Construction

1. The company maintains close interaction with the world's major well-known brands and customers

through collaborative design joint development strategic cooperation and other ways to create value and

enhance the added value of products.

92025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

2. The company continues to promote the upgrading and construction of Cankun Industrial Park improve

the supply chain strategic cooperation supporting ecosystem enhance the efficiency of industrial chain

synergy reduce the comprehensive cost and enhance the overall competitiveness.III.Dual-cycle market strategy and brand advantages

1. The company implements the strategy of “double cycle of global market and domestic market”

consolidating and expanding the global international market while increasing the development of domestic

market to enhance the influence of independent brand.

2. Through accurate market positioning and channel layout the company effectively responds to market

competition and continuously improves market share and brand premium.IV.Product innovation and differentiated competitive advantages

1.The company has implemented a "dual-circulation strategy focusing on both global and domestic

markets." While consolidating and expanding its presence in the global market it has also established joint

ventures with domestic third-party companies. By leveraging both online (e.g. JD TikTok Rednote) and

offline (e.g. JD MALL) sales channels the company is intensifying its efforts to develop the domestic

market and enhance the influence of its proprietary brand.

2. Focusing on the three dimensions of “value quality and value” the company continues to create new

market demand meet diversified and personalized consumer needs and form differentiated competitive

advantages.V.Intellectual property protection and technical barriers

1. The company attaches great importance to the protection of intellectual property rights and has established

a perfect intellectual property management system. 32 new patents were issued during the reporting period

which further improved the company's intellectual property protection system.

2. Through continuous patent layout and technological innovation the company effectively builds technical

barriers maintains its leading position in the industry and continuously improves its core competitiveness.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.

102025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

III. Main business analysis

During this reporting period the Company realized total profit of RMB21.5 million a decrease of 56.76%

compared with the same period of last year; realized net profit attributable to shareholders of the listed

company of RMB16 million a decrease of 52.92% compared with the same period of last year; and the

basic earnings per share was RMB0.09 a decrease of RMB0.09 compared with the same period of last year.The change of the above indicators is mainly due to the impact of the international economic situation the

orders from American customers decreased significantly; at the same time the price of raw materials is still

at a high level and the cost of products increased. Based on the existing situation the company has increased

the investment in Indonesia subsidiary to strengthen the construction of overseas production base expand its

production scale enhance the ability to receive orders seize and attract the market orders of American

customers maintain and stabilize customer relationships.

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 652773296.39 788085998.03 -17.17 in foreign sales orders during the

period;

Mainly as a result of the decrease

Operating cost 562880349.18 665733282.11 -15.45 in main operating revenues during

the period;

Selling expenses 11706746.06 15705789.17 -25.46

General and administrative

expenses 34691484.86 34966806.51 -0.79

Mainly as a result of the decrease

Finance costs 2354891.68 213569.01 1002.64 in interest income during the

period;

Mainly as a result of the increase in

Other income 1808128.78 909068.05 98.90 government subsidies received

during the period;

Investment income 16576429.63 14548243.97 13.94

Mainly as a result of the increase in

Gains/ (losses) from changes in losses in the current period due to

fair values -942083.33 1950911.11 -148.29 the reversal of gains on financialproducts of RMB940000 at the

end of the year 2024;

Mainly as a result of the overdue

payment of goods to some

customers in the current period

Impairment loss of credit -2109067.68 1310991.27 -260.88 which required provision for

impairment of accounts receivable

in accordance with the accounting

policy;

Impairment loss of asset -2818668.81 -5385687.68 47.66 Mainly as a result of the decreasein provision for loss on decline in

112025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

Item Reporting period Same period of lastyear +/-% Main reasons for changes

value of inventories in the current

period as compared to the same

period last year;

Gains from disposal of assets 1265588.90 600085.35 110.90 Mainly as a result of the increase ingain on disposal of assets;

Mainly as a result of the receipt of

Non-operating income 679417.25 148920.32 356.23 refunds of golf memberships in the

current period;

Mainly as a result of the decrease

in profit from the decline in

revenue in the main business of the

Income tax expenses 1869934.96 5204909.85 -64.07 Company in the current period; and

Mainly as a result of the decrease

in profit as a result of the decrease

in revenue;

Research and development

investments 29941757.03 32146701.14 -6.86

Net cash flows from operating

activities -30246868.47 -26296992.61 -15.02

Mainly as a result of the decrease

Net cash flows from investing in net outflow of bank time

activities -11056381.12 -152804883.43 92.76 deposits for the purpose ofobtaining interest income during

the period;

Mainly as a result of the increase in

Net cash flows from financing -10676069.84 -37562013.34 71.58 short-term borrowings and theactivities decrease in dividend distribution

during the period;

Decrease in net outflow of bank

Net increase / (decrease) in cash

and cash equivalents -52657661.45 -217996478.33 75.84

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 In total operatingrevenues (%) Amount revenues (%)

Total operating

revenues 652773296.39 100.00 788085998.03 100.00 -17.17

By segments

Small home

appliance 652773296.39 100.00 788085998.03 100.00 -17.17

manufacturing

By products

Cooking utensils 392599119.51 60.14 462268892.25 58.65 -15.07

Everyday home

appliances 193015583.40 29.57 228514421.19 29.00 -15.53

122025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

Reporting period Same period of last year

Item In total operating In total operating +/-%Amount revenues (%) Amount revenues (%)

Tea and coffee

makers 41387776.71 6.34 63844429.06 8.10 -35.17

Other 25770816.77 3.95 33458255.53 4.25 -22.98

Total 652773296.39 100.00 788085998.03 100.00 -17.17

By areas

Americas 246494836.05 37.76 364669044.48 46.27 -32.41

Europe 227996576.35 34.93 254715358.72 32.32 -10.49

Asia 171919397.77 26.34 153601879.71 19.49 11.93

Australia 5378593.86 0.82 8195752.50 1.04 -34.37

Africa 983892.36 0.15 6903962.62 0.88 -85.75

Total 652773296.39 100.00 788085998.03 100.00 -17.17

(2) Segments products or areas contributing over 10% of operating revenues or profit

□Applicable □ Inapplicable

Unit: RMB Yuan

Operating

revenue: +/-% Operating cost:

Gross profit

margin: +/-%

Item Operating revenue Operating cost Gross profit +/-% from themargin (%) from the sameperiod of last same period of

from the same

last year period of lastyear year

By segments

Small home

appliance 652773296.39 562880349.18 13.77 -17.17 -15.45 -1.76

manufacturing

Total 652773296.39 562880349.18 13.77 -17.17 -15.45 -1.76

By products

Cooking utensils 392599119.51 348325391.98 11.28 -15.07 -12.74 -2.37

Everyday home

appliances 193015583.40 173433583.72 10.15 -15.53 -13.82 -1.79

Tea and coffee

makers 41387776.71 36129559.32 12.70 -35.17 -35.48 0.41

Other 25770816.77 4991814.16 80.63 -22.98 -46.48 8.51

Total 652773296.39 562880349.18 13.77 -17.17 -15.45 -1.76

By areas

Americas 246494836.05 225318161.22 8.59 -32.41 -29.67 -3.55

Europe 227996576.35 199231164.91 12.62 -10.49 -8.86 -1.56

Asia 171919397.77 132941407.38 22.67 11.93 15.87 -2.64

Australia 5378593.86 4356657.52 19.00 -34.37 -33.85 -0.64

Africa 983892.36 1032958.15 -4.99 -85.75 -80.93 -26.53

Total 652773296.39 562880349.18 13.77 -17.17 -15.45 -1.76

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.

132025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

□ Applicable□ Inapplicable

IV. Analysis of non-core business

□Applicable □ Inapplicable

Unit: RMB Yuan

Items Amount Ratio to the totalprofits amount (%) Notes of the causes

Recurring

or not

Other income 1808128.78 8.41 Mainly government grants related to production andoperations No

Mainly attributable to investment income from

Investment income 16576429.63 77.10 financial products and interest income from time No

deposits

Mainly attributable to the reversal of gains on

Gains from changes -942083.33 -4.38 financial products of RMB0.94 million at the end ofin fair values the year ended December 31 2024 in the current No

reporting period

Impairment loss of Mainly due to overdue payments from customers

credit -2109067.68 -9.81 which required provision for impairment of accounts Noreceivable in accordance with accounting policy.Impairment loss of

asset -2818668.81 -13.11

Loss on decline in value of inventories and

impairment loss on fixed assets. No

Gains from disposal

of assets 1265588.90 5.89 Income from disposal of fixed assets No

Non-operating 679417.25 3.16 Refunds of golf membership fees were receivedincome during the period. No

Non-operating 74055.07 0.34 Mainly as a result of fines incurred by a subsidiaryexpenses 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

Item As a As a

Change in

percentage percentage percentage

Reason for any significant

Amount of total Amount (%)

change

of total

assets (%) assets (%)

Cash and cash

equivalents 390933066.61 15.77 444377943.52 16.86 -1.09

Held-for-trading Mainly as a result of the

financial assets 0.00 0.00 50942083.33 1.93 -1.93 maturity of financial productsduring the period;

Accounts receivable 131705355.91 5.31 203955899.80 7.74 -2.43

Mainly as a result of the

Advances to suppliers 8261158.90 0.33 4318758.91 0.16 0.17 increase in prepayment for

goods during the period;

Mainly as a result of the

Other receivables 16834594.69 0.68 27902480.51 1.06 -0.38 decrease in export tax rebates

receivable during the period;

Inventories 182041733.82 7.34 194399523.78 7.38 -0.04

Non-current assets

maturing within one 237753845.51 9.59 51260694.44 1.95 7.64

Mainly as a result of the

increase in the transfer of debt

142025 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 (%)

year investments maturing within

one year during the period;

Long-term equity Mainly as a result of the

investments 9445123.83 0.38 0.00 0.00 0.38 payment of investment inassociates during the period;

Investment properties 18874577.41 0.76 19287755.23 0.73 0.03

Fixed assets 154068855.87 6.21 146795190.83 5.57 0.64

Mainly as a result of the non-

acceptance of the newly

Construction in 5056908.31 0.20 3462300.89 0.13 0.07 constructed plant in Canstarprogress Netcom Park Indonesia a

subsidiary of the Company

during the period;

Right-of-use assets 347968147.44 14.03 353943869.92 13.43 0.60

Mainly as a result of the

Short-term borrowings 36333653.27 1.47 0.00 0.00 1.47 increase in borrowings byTKL a subsidiary during the

period.Mainly as a result of the

Notes payable 4724919.53 0.19 19418627.35 0.74 -0.55 decrease in the issuance ofbanker's acceptance bills

during the period;

Contract liabilities 18059456.23 0.73 16296739.65 0.62 0.11

Mainly as a result of the

Taxes payable 8299865.76 0.33 18310394.76 0.69 -0.36 payment of 2024 remittance of

enterprise income tax;

Non-current liabilities Mainly as a result of the

maturing within one 7548324.44 0.30 922678.70 0.04 0.26 increase in the recognition of

year one-year lease liabilitiesduring the period.Lease liabilities 398487714.70 16.07 396004620.97 15.03 1.04

2. Main assets overseas

□Applicable □ Inapplicable

Unit: RMB Yuan

Measures

Operation taken to

In the

Company’s Any majorAsset Nature Value Location status protect Earningsasset net assets

impairment

(%) risk or notsafety

Small home

SCI Investment 198824238.95 Indonesia appliance Periodicreview -5354351.05 18.33 Nomanufacturing

Other

information N/A

3. Assets and liabilities measured at fair value

□Applicable □ Inapplicable

Unit: RMB Yuan

152025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

Profit/loss on Cumulative

fair value fair value Impairment Purchased

Item Opening changes in changes provided in in this

Sold in this Other Closing

balance 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 50942083.33 -942083.33 0.00 0.00 0.00 50000000.00 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 50982083.33 -942083.33 0.00 0.00 0.00 50000000.00 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

Total of the above 50982083.33 -942083.33 0.00 0.00 0.00 50000000.00 0.00 40000.00

Financial liabilities 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

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

Of the other monetary funds RMB1700000.56 is the margin deposited by TKL for opening a letter of credit.Except for the margin deposited for opening a letter of credit there are no other funds in monetary funds at the

end of the period with restricted use rights or potential recovery risks due to mortgage pledge or freeze.VI. Investments made

1. Total investments made

□ Applicable□ Inapplicable

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

162025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

No such cases in the reporting period.

(2) Investment in derivative financial instruments

□Applicable □ Inapplicable

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 Registeredname scope capital Total assets Net assets

Operating Operating

Company revenues profit

Net profit

Small home

TKL Subsidiary appliance USD160million 2218388565.76 1328235051.35 608398533.13 17036763.66 19422435.70manufacturing

Subsidiaries obtained or disposed in this reporting period

□Applicable□ Inapplicable

IX. Structured bodies controlled by the Company

□Applicable □Inapplicable

X. Risks facing the Company and countermeasures

1.Risk of market and industry competition

In 2025 the competition in the small household electrical appliances industry entered the “deep water”

172025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

intelligent scenario green has become the mainstream trend and consumers' requirements for the functional

integration emotional value and personalized experience of the products have been significantly enhanced. At the

same time the strong rise of local brands foreign brands adhere to the high-end market cross-border enterprises

to accelerate the entry the industry competition pattern is more complex.Factors such as geopolitical tensions trade barriers and emerging industry policies may reshape the global trade

pattern; differences in national regulations (e.g. EU carbon tariffs U.S. certificates of origin) increase the

difficulty of corporate compliance and the low threshold of counterfeiting technology in emerging markets makes

it costly for companies to defend their rights; insufficient orders in mature markets in Europe and the U.S. and

Southeast Asian production capacity expansion leads to an oversupply of low- and medium-end products and

intensified price wars.To address the complexities and volatilities of competitive risks the company has implemented the following

strategic measures: focusing on a trinity of competitiveness encompassing "technology + application scenarios +

emotional value" to reinforce differentiated advantages in smart controls health-focused functionalities and

aesthetic design; deepening collaborative development with global tier-one brands to enhance product value-add

and customer stickiness; accelerating the development of domestic proprietary brands by expanding across both

online e-commerce and offline retail channels to boost brand penetration; strengthening product R&D and

technological innovation to improve the value-add and competitiveness of export products; enhancing

cooperation with trade partners to jointly navigate trade challenges; advancing core technologies optimizing

supply chains and elevating brand power to capture the high-end product market segment; transitioning toward

product superiority technological leadership and innovation-driven advantages; diversifying market expansion to

increase corporate revenue and profitability while establishing competitive edges in the new phase of industry

rivalry. Additionally production capacity is being globalized and decentralized to mitigate risks associated with

single-origin dependence.

2. Risk of exchange rate fluctuations

The company's products are mainly exported and the main settlement currency is the U.S. dollar exchange rate

fluctuations will have a greater impact on the company's operating results. 2025 the first half of the year the

RMB against the U.S. dollar showed a slight appreciation the risk of exchange rate fluctuations still need to be

vigilant. In order to reduce the impact of exchange rate fluctuations on the company's assets liabilities and

profitability level changes the establishment of exchange rate risk-neutral management mechanism the use of

forwards options and other financial instruments for hedging. Optimize the structure of foreign currency assets

and liabilities and enhance the proportion of natural hedging.

3. Rising labor costs

As the manufacturing industry “difficult to recruit” problem persists labor costs are rising year by year especially

the front-line operators and skilled workers pay pressure. In order to cope with the risk of declining profitability

due to rising labor costs the company accelerates the intelligent manufacturing and automation transformation

182025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

improves the per capita output efficiency and reduces the dependence on labor; promotes procurement

modularization lean automation etc. to achieve manpower saving and continuously improves the production

environment promotes the retention bonus policy and improves the employees' enthusiasm and sense of identity

by improving employee welfare and strengthening the construction of corporate culture to reduce the turnover

rate. identity and reduce the turnover rate.

4.Environmental low-carbon policy

As the country's “dual-carbon” goal advances green manufacturing design and recycling have become the focus

of policy coupled with increasingly stringent environmental regulations the cost of compliance for companies in

terms of pollution prevention and control public health protection and carbon emissions reduction continues to

rise. This is both a challenge and an opportunity. For this reason the company firmly takes lean manufacturing as

its core strategy and actively responds to it through the following initiatives:

Technological upgrading: Invest vigorously in energy-saving equipment clean production processes and

environmentally friendly new materials upgrade automation and environmentally friendly process technology

and significantly improve energy utilization efficiency.Practicing low carbon: Incorporate low carbon concepts into product design and develop innovative and

environmentally friendly products.Build a system: Systematically promote green design green manufacturing and green supply chain construction.Strengthen compliance: At the same time develop products in line with international standards and obtain carbon

footprint certification to enhance export competitiveness.

5. Raw material price fluctuations

Copper prices rose significantly in the first half of 2025 plastic aluminum and other raw material prices remain

high cost pressure persists. The company's countermeasures are as follows: establish a raw material price

monitoring and early warning mechanism and carry out strategic procurement and inventory adjustment at the

right time. Promote supply chain diversification avoid dependence on a single supplier and enhance bargaining

power. Enhance the universality of parts and reduce material loss through product platformization and

modularization design. Research and develop alternative materials and fully utilize the RCEP tariff concession

policy to reduce the impact of rising costs.

6. Increased challenges in the global economic and trade environment

Geopolitical tensions and trade protectionism rise many countries to raise tariffs or add non-tariff barriers

reshaping trade rules export uncertainty steeply. from May 14 the United States will part of the Chinese small

household appliances tariffs from the highest 125% temporarily reduced to 10% but superimposed on the section

301 the combined rate is still as high as 32.7% -58.9%. Need to be vigilant about the closing of the 90-day tariff

reduction window on August 12 and the risk of a second hike in the third quarter. temporary tariff suspension on

Southeast Asia expired on July 8th. The Red Sea crisis has not been resolved Panama drought North American

192025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

port labor negotiations etc. further increase the volatility of shipping schedule. High inflation in major economies

around the world weakened consumers' purchasing power and overall order demand contracted.It is expected that the international situation in the second half of 2025 will be characterized by “high tariffs +high freight costs + regional differentiation”. With the release of overseas production capacity market

diversification and product structure upgrading the company is deeply cultivating the major markets of Europe

and the United States while expanding the emerging markets of Southeast Asia the Middle East Russia and other

emerging markets so as to reduce the dependence on a single market. The company adheres to the development

concept of globalization strengthens industrial competitiveness optimizes product structure expands diversified

markets increases independent innovation and other measures to actively respond to the challenges and seize the

opportunities.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 2025 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

3. Strengthening investor relations management and information disclosure quality

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

202025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

Name Positions held typology Date rationale

Chairman of the

Yang Yongquan leave office 2025/05/16 job transfer

Supervisory Board

Ding Hongming supervisor leave office 2025/05/16 job transfer

Supervisor of Employee

Zheng Caiyun leave office 2025/05/16 job transfer

Representatives

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.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.

212025 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.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.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

222025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

Unit: RMB’0000

Whether Situation of

Basic situation of Lawsuit form into Trial results and execution of

lawsuit (arbitration) amount estimated Process of lawsuit (arbitration) influences of lawsuit judgment of

Disclosure Disclosure

(RMB’0000) liabilities (arbitration) lawsuit

date index

(arbitration)

On August 19 2024 the Company filed a lawsuit with the People's

Court of Haicang District Xiamen City (during which the defendant

refused to accept the summons and on October 22 2024 the

defendant was served by public notice) claiming that in the case of

the housing lease contract dispute with the defendant Craftsmen

Forever Craftsmen Forever was required to pay to the Company the

total amount of 256600 RMB for the rent of the building

management fee utilities and liquidated damages etc. and that the

defendant was continuing to rent the building and then changed the

lawsuit claim. After that it changed the litigation demand and

claimed that the defendant should return the house rent management

fee utility fee and liquidated damages totaling 637300 Yuan as of

the latest date. After that Artisanal Permanent Residency objected to

The case of housing the jurisdiction and filed a counterclaim requesting that the Company

lease dispute between should pay the house repair cost of 178500 Yuan the loss of house

the Company and 63.73 No rent of 230100 Yuan the restoration of the related property service Pending second instanceXiamen Craftsmen of the leased property in the case as well as the Company should bear judgment of the Court No No

Forever Industry & the litigation cost of the case. After two court hearings the Xiamen

Trade Co. Haicang District People's Court ruled in favor of the Company's

claim to Artisanal Permanent Residence for house rent of

RMB461148 property management fee of RMB55126 utility fee of

RMB45749.19 and ruled that Artisanal Permanent Residence shall

pay to the Company the amount of RMB178500 for house repair

costs RMB230100 for loss of house rent RMB230100 for

restoration of property services in relation to the leased property and

the Company's share of the litigation costs in this case and the

Company shall bear the litigation costs in this case. On April 13

2025 Craftsmen filed an appeal to the Xiamen Intermediate People's

Court and after the public hearing of the case by the Xiamen

Intermediate People's Court on June 6 2025 the case is now awaiting

the judgment of the Xiamen Intermediate People's Court of the

second instance.

232025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

Situation of

Basic situation of Lawsuit

Whether

form into Trial results and execution ofamount Disclosure Disclosurelawsuit (arbitration) (RMB’0000) estimated

Process of lawsuit (arbitration) influences of lawsuit judgment of

liabilities (arbitration) lawsuit

date index

(arbitration)

On January 22 2025 the Company filed a lawsuit with the People's

Court of Haicang District Xiamen City claiming that the Company

and Zhuo Yincheng had a dispute over the rental contract and that

Zhuo Yincheng was required to pay to the Company an aggregate

amount of RMB77355.76 in respect of the rent management fee

In the matter of the utility fee and liquidated damages. Later the Company and Zhuo

housing lease contract Yincheng reached a settlement agreement which stipulated that the

dispute between the 7.735 No lease contract was terminated in advance and the Company forfeited Have withdrawn one's

Company and Cheukyin Zhuo Yincheng's lease deposit of RMB24000 and utility deposit of complaint

No No

City RMB2000 and Zhuo Yincheng transferred the fixed decorationplaced by Zhuo Yincheng to the Company without any

compensation.On February 27 2025 the Company filed an

application for the withdrawal of the case with the People's Court of

Xiamen City Haicang District. On April 8 2025 the Xiamen

Haicang District People's Court issued a civil ruling that the case was

dismissed.The first-instance court

ordered the defendant to

An online petition was filed with the Ningbo Intermediate People's cease infringement and

Court on August 14 2023 seeking an injunction against the compensate the plaintiff

The invention patent defendant to cease all infringing activities compensation for the for economic losses and

dispute cases where the plaintiff's economic losses and reimbursement for reasonable reasonable expenses

subsidiary TKL sued 335.16 No expenses incurred in the course of litigation amounting to RMB incurred in rightsCuori Electrical 3351751. protection totaling RMB No No

Appliances (GROUP) The first-instance trial commenced on March 30 2023. 824257.Co. Ltd. A judgment was rendered by the court on May 13 2024. The case has been heard in

The defendant filed an appeal against the judgment on May 29 2024. the second instance and is

Second trial begins May 22 2025. currently awaiting the

court's decision in the

second instance.

242025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

Situation of

Basic situation of Lawsuit

Whether

form into Trial results and execution ofamount Disclosure Disclosurelawsuit (arbitration) (RMB’0000) estimated

Process of lawsuit (arbitration) influences of lawsuit judgment of

liabilities (arbitration) lawsuit

date index

(arbitration)

The case concerns the

dispute over the An administrative lawsuit was filed with the Beijing Intellectual

invalidity decision of Property Court on July 17 2023 regarding the review decision on the

patent invalidation declaration request No. 561240; The decision of nullity was

CN200610069596.6 The first-instance hearing was held on October 11 2023 and the upheld in the first instance

(Pancake Machine) No first-instance judgment was received on October 27 2023 upholding pending the hearing of the No No

issued by the China the original invalidation decision; second instance.National Intellectual Our company appealed to the Supreme Court on November 13 2023;

Property Administration The second-instance hearing was held on May 28 2024.against our company.The case involves the

subsidiary TKL filing a

lawsuit against the An administrative lawsuit was filed with the Beijing Intellectual

China National Property Court regarding the review decision on the invalidation

Intellectual Property request for Trademark No. 560665 On August 7 2023. The decision of nullity was

Administration over its No The first instance hearing was held on January 18 2024 and the first upheld at first instancedecision to invalidate instance judgment was received on July 18 2024 upholding the pending a decision at No No

Patent original invalidation decision. second instance.CN201810220898.1 On August 7 2024 the Company filed an appeal with the Supreme

which pertains to a Court.grilling and toasting

appliance.IX. Punishments and rectifications

□ Applicable□ Inapplicable

X. Credit conditions of the Company as well as its controlling shareholder and actual controller

□ Applicable□ Inapplicable

252025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

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 Transaction amount kind of transaction the

method of the Disclosure Disclosure

transaction transaction party price transaction quota approved related-party

market

price date index

transaction s (%) quota transaction

Company directly

Thermaster controlled by actual Purchase ofcommodities Purchase of Based onElectronic (Xiamen) controller and their the market 1232.78 3.04% 3500.00 No

Ltd. close family from the raw partsrelated party price andmembers both Settled

parties N/A according to the 11 March

www.cninf

contract signed N/A 2025 o.com.cnSales of abide by

Star Comgistic Ultimate controlling commodities Sales of parts the fair and by both parties

Capital Co. Ltd. company to the related and finished reasonable 166.28 0.25% 600.00 No

party products principle

Total 1399.06 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

2. Related-party transactions regarding purchase or sales of assets or equity interests

□ Applicable□ Inapplicable

262025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

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

XII. Significant contracts and execution

1. Entrustment contracting and leasing

(1) Entrustment

□ Applicable□ Inapplicable

(2) Contracting

□ Applicable□ Inapplicable

272025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

(3) Leasing

□ Applicable□ Inapplicable

2. Significant guarantees

□Applicable □ Inapplicable

Unit: RMB’0000

Guarantees between subsidiaries

Disclosure Guarantee

Guaranteed date of the Line of Actual occurrence Actual for a

party guarantee line guarantee date guarantee Type of guarantee Collateral

Counter- Term of

amount guarantee guarantee

Due or not related

announcement party ornot

PT.STAR

COMGISTIC 2025/4/26 3750.00 2025/1/1- 254.38 Pledge 50% credit +50%2025/6/30 funds N/A 1 year No NoINDONESIA

PT.STAR

COMGISTIC 2024/10/24 2250.00 2025/1/1-2025/6/30 83.69 Pledge 100% credit N/A 1 year No NoINDONESIA

Total guarantee line for

subsidiaries approved during 3750.00 Total actual guarantee amount for subsidiaries 789.17

this Reporting Period (C1) during this Reporting Period (C2)

Total approved guarantee line

for subsidiaries at the end of 6000.00 Total actual guarantee balance for subsidiaries

this Reporting Period (C3) at the end of this Reporting Period (C4)

338.07

Total guarantee amount (total of the above-mentioned three kinds of guarantees)

Total guarantee line approved

during this Reporting Period 3750.00 Total actual guarantee amount during this

(C1) Reporting Period (C2)

789.17

Total approved guarantee line

at the end of this Reporting 6000.00 Total actual guarantee balance at the end of 338.07

Period (C3) this Reporting Period (C4)

Proportion of the total actual guarantee amount (C4) in net assets

of the Company 0.31%

282025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

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

Specification of the use of composite guarantees

Not available.

3. Entrusted cash management

□Applicable □ Inapplicable

Unit: RMB’0000

Allowance for impairment

Type Resource of funds Amount incurred Undue balance Amount overdue of overdue wealth

management instruments

Bank financial product Self-owned fund 5000.00 0.00 0.00 0.00

Total 5000.00 0.00 0.00 0.00

Particular information of high-risk entrusted asset management with individual significant amount or low security poor liquidity and no principal protection

□Applicable □ Inapplicable

Unit: RMB’0000

292025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

Amount of Actual

actual recovery of Amount

Whether there

Whether go is wealth Overview of

Name of the Type of the Type of the Resource Annual withdrawnAmount Initial date Ended date Use of fund Determination yield for Estimate profits or profits or impairment through management

the item and

trustee trustee product of funds of return reference profit losses in losses in provision in stator entrustment

the related

reporting reporting procedures plan in future index for

period period current year or not inquiring

Principal-

Xiamen protected Self- Payment of Recovered Subject to the

International Bank with 5000.00 owned 2024/1/10 2025/1/9 Structural interest and 3.11% 157.66 157.66 upon N/A Yes future market http://www.c

Bank floating fund deposit principal at maturity yield and fund ninfo.com.cn

proceeds maturity condition

Total 5000.00 157.66 157.66

Whether there is the case where the principal cannot be recovered at maturity or other case which may cause impairment for entrusted asset management

□ Applicable□ Inapplicable

4. Other significant contracts

□ Applicable□ Inapplicable

XIII. Other significant events

□ Applicable□ Inapplicable

XIV. Significant events of subsidiaries

□ Applicable□ Inapplicable

302025 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

312025 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 13271 shareholders with resumed voting 0rights at the period-end

Greater than 5% or top 10 common shareholders

Name of Nature of Shareholding Total common

Increase/dec Number of Pledged marked orrease during Number of common frozen shares

shareholder shareholder percentage shares held at theperiod-end the reporting private shares

common Status of Number of

period public shares 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

GUOTAI

JUNAN

SECURITIES ForeignHONG corporation 1.32% 2452166.00 -542130.00 0 2452166.00 N/A 0（KONG）

LIMITED

YANG Domestic

WENLIANG individual 1.14% 2108071.00 630641.00 0 2108071.00 N/A 0

CHEN Domestic

YONGQUAN individual 1.04% 1929476.00 Unchanged 0 1929476.00 N/A 0

CHEN Foreign

YONGQING individual 0.89% 1658078.00 Unchanged 0 1658078.00 N/A 0

322025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

CHEN Foreign

LIJUAN individual 0.88% 1633768.00 Unchanged 0 1633768.00 N/A 0

DING Domestic

XIAOLUN individual 0.63% 1170000.00 Unchanged 0 1170000.00 N/A 0

CAO YIFAN Domesticindividual 0.54% 1010000.00

New

shareholders 0 1010000.00 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

Number of common public shares held at the Type of sharesName of shareholder 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

GUOTAI JUNANSECURITIES（HONG 2452166.00 Domestically listed foreign share 2452166.00KONG） LIMITED

YANGWENLIANG 2108071.00 Domestically listed foreign share 2108071.00

CHEN YONGQUAN 1929476.00 Domestically listed foreign share 1929476.00

CHEN YONGQING 1658078.00 Domestically listed foreign share 1658078.00

CHEN LIJUAN 1633768.00 Domestically listed foreign share 1633768.00

DING XIAOLUN 1170000.00 Domestically listed foreign share 1170000.00

CAO YIFAN 1010000.00 Domestically listed foreign share 1010000.00

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

332025 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 2024 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

342025 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

7 August 2025

352025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

1. Consolidated Statement of Financial Position as at 30 June 2025

Prepared by: TsannKuen (China) Enterprise Co. Ltd Unit：Yuan Currency: CNY

Item Note 2025/6/30 2024/12/31 Item Note 2025/6/30 2024/12/31

Current assets: Current liabilities

Cash and cash equivalents 5.1 390933066.61 444377943.52 Short-term borrowings 5.21 36333653.27

Held-for-trading financial assets 5.2 50942083.33 Held-for-trading financialliabilities

Derivative financial assets Derivative financial liabilities

Notes receivable Notes payable 5.22 4724919.53 19418627.35

Accounts receivable 5.3 131705355.91 203955899.80 Accounts payable 5.23 380175511.95 517321517.29

Accounts receivable financing Advances from customers 5.24 2547519.68 2924333.25

Advances to suppliers 5.4 8261158.90 4318758.91 Contract liabilities 5.25 18059456.23 16296739.65

Other receivables 5.5 16834594.69 27902480.51 Employee benefits payable 5.26 48709969.52 53957022.40

Including:Interests receivable Taxes payable 5.27 8299865.76 18310394.76

Dividend receivable Other payables 5.28 33275738.81 40877557.33

Inventories 5.6 182041733.82 194399523.78 Including: Interests payables

Contract assets Dividend payables

Assets classified as held for sale Liabilities classified as held forsale

Non-current assets maturing within 5.7 237753845.51 51260694.44 Non-current liabilities maturingone year within one year 5.29 7548324.44 922678.70

Other current assets 5.8 419118142.70 554336979.01 Other current liabilities

Total current assets 1386647898.14 1531494363.30 Total current liabilities 539674959.19 670028870.73

Non-current assets: Non-current liabilities:

Debt investments 5.9 518710855.95 540534660.69 Long-term borrowings

Other debt investments Bonds payable

Long-term receivables Including: Preference share

Long-term equity investments 5.10 9445123.83 Perpetual capital securities

Other equity instrument investment 5.11 40000.00 40000.00 Lease liabilities 5.30 398487714.70 396004620.97

362025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

Item Note 2025/6/30 2024/12/31 Item Note 2025/6/30 2024/12/31

Other non-current financial assets Long-term payables

Investment properties 5.12 18874577.41 19287755.23 Long-term employee benefitspayable

Fixed assets 5.13 154068855.87 146795190.83 Estimated liabilities

Construction in progress 5.14 5056908.31 3462300.89 Deferred income

Productive biological assets Deferred tax liabilities

Oil and gas assets Other non-current liabilities

Right-of-use assets 5.15 347968147.44 353943869.92 Total non-current liabilities 398487714.70 396004620.97

Intangible assets 5.16 11488501.93 11947318.66 Total liabilities 938162673.89 1066033491.70

Research and development

expenditure Owners’ equity

Goodwill Share capital 5.31 185391680.00 185391680.00

Long-term deferred expenses 5.17 4300745.56 5571380.26 Other equity instruments

Deferred tax assets 5.18 14656978.77 11872802.85 Including: Preference shares

Other non-current assets 5.19 8230383.08 10099186.11 Perpetual capital securities

Total non-current assets 1092841078.15 1103554465.44 Capital reserves 5.32 296808965.79 296808965.79

Less: Treasury stock

Other comprehensive income 5.33 10876581.02 11252746.52

Specific reserves

Surplus reserves 5.34 81427732.56 81427732.56

Retained earnings 5.35 510149004.06 527518517.81

Total owner’s equity attributable

to parent company 1084653963.43 1102399642.68

Non-controlling interests 456672338.97 466615694.36

Total owners’ equity 1541326302.40 1569015337.04

Total assets 2479488976.29 2635048828.74 Total liabilities and owners'equity 2479488976.29 2635048828.74

Legal Representative: Cai Yuansong Chief Financial Officer:Wu Jianhua Finance Manager:Wu Jianhua

372025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

2. Statement of Financial Position of Parent Company as at 30 June 2025

Prepared by: TsannKuen (China) Enterprise Co. Ltd Unit：Yuan Currency: CNY

Assets Note 2025/6/30 2024/12/31 Liabilities and owners' equity Note 2025/6/30 2024/12/31

Current assets: Current liabilities

Cash and cash equivalents 12560284.26 9893016.08 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 421668.75 201780.44 Accounts payable 960812.01 1815877.06

Accounts receivable

financing Advances from customers 2212535.69 2403680.33

Advances to suppliers 23241.57 21287.13 Contract liabilities 65038.58 153646.35

Other receivables 15.2 6112753.11 6555310.24 Employee benefits payable 5230667.04 8589134.60

Including: Interests

receivable Taxes payable 5958844.13 5127289.98

Dividend receivable Other payables 3856814.34 13173843.37

Inventories 1172815.34 2264166.58 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 20290763.03 18935560.47 Total current liabilities 18284711.79 31263471.69

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

382025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

Assets Note 2025/6/30 2024/12/31 Liabilities and owners' equity Note 2025/6/30 2024/12/31

Other equity instrument

investment 40000.00 40000.00 Lease liabilities

Other non-current financial

assets Long-term payables

Investment properties 18848322.95 19301965.49 Long-term employee benefitspayable

Fixed assets 243499.51 294240.38 Estimated liabilities

Construction in progress 26732.67 97676.45 Deferred income

Productive biological assets Deferred tax liabilities

Oil and gas assets Other non-current liabilities

Right-of-use assets Total non-current liabilities

Intangible assets Total liabilities 18284711.79 31263471.69

Research and development

expenditure Owners’ equity

Goodwill Share capital 185391680.00 185391680.00

Long-term deferred

expenses 794380.03 1016860.33 Other equity instruments

Deferred tax assets 721941.55 824852.10 Including: Preference shares

Other non-current assets Perpetual capital securities

Total non-current assets 944089578.27 944990296.31 Capital reserves 271490289.82 271490289.82

Less: Treasury stock

Other comprehensive income

Specific reserves

Surplus reserves 81427732.56 81427732.56

Retained earnings 407785927.13 394352682.71

Total owners’ equity 946095629.51 932662385.09

Total assets 964380341.30 963925856.78 Total liabilities and owners'equity 964380341.30 963925856.78

Legal Representative: Cai Yuansong Chief Financial Officer:Wu Jianhua Finance Manager:Wu Jianhua

392025 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 5.36 652773296.39 788085998.03

Including: operating revenue 5.36 652773296.39 788085998.03

II. Cost of sales 645659208.44 752393700.63

Including: operating cost 5.36 562880349.18 665733282.11

Taxes and surcharges 5.37 4083979.63 3627552.69

Selling and distribution expenses 5.38 11706746.06 15705789.17

General and administrative expenses 5.39 34691484.86 34966806.51

Research and development expenses 5.40 29941757.03 32146701.14

Finance costs 5.41 2354891.68 213569.01

Including: Interest expense 11155646.85 11082809.10

Interest income 3750247.27 7043615.67

Add: Other income 5.42 1808128.78 909068.05

Investmentincome/(losses) 5.43 16576429.63 14548243.97

Including:Investment income from associates and joint ventures -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 5.44 -942083.33 1950911.11

Impairment loss of credit 5.45 -2109067.68 1310991.27

Impairment loss of asset 5.46 -2818668.81 -5385687.68

Gains/ (losses) from disposal of assets 5.47 1265588.90 600085.35

III. Profit/(loss) from operations 20894415.44 49625909.47

Add: Non-operating income 5.48 679417.25 148920.32

Less: Non-operating expenses 5.49 74055.07 52501.87

IV. Profit/(loss) before tax 21499777.62 49722327.92

Less: Income tax expenses 5.50 1869934.96 5204909.85

V. Net profit/(loss) 19629842.66 44517418.07

(I) Net profit/(loss) by continuity

Net profit/(loss) from continuing operation 19629842.66 44517418.07

Net profit/(loss) from discontinued operation

(II) Net profit/(loss) by ownership attribution

Attributable to owners of the parent 16000988.65 33989579.63

Attributable to non-controlling interests 3628854.01 10527838.44

402025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

Item Note Reporting period Same period of lastyear

VI. Other comprehensive income after tax 5.51 -501554.00 122316.97

(a) Attributable to owners of the parent 5.51 -376165.50 91737.73

(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 5.51 -376165.50 91737.73

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 5.51 -376165.50 91737.73

(b) Attributable to non-controlling interests 5.51 -125388.50 30579.24

VII. Total comprehensive income 19128288.66 44639735.04

Attributable to owners of the parent 15624823.15 34081317.36

Attributable to non-controlling interests 3503465.51 10558417.68

VIII. Earnings per share:

Basic earnings per share 16.2 0.09 0.18

Diluted earnings per share 16.2 0.09 0.18

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

412025 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 33325016.04 30099321.70

Less: Costs of sales 15.4 20729470.91 18160768.94

Taxes and surcharges 1850440.08 1738871.49

Selling and distribution expenses 1126624.30 2163347.05

Administrative expenses 1709394.31 1740236.93

Research and development expenses

Finance costs -212456.47 750817.04

Including: Interest expense

Interest income 116089.08 156953.27

Add: Other income 24784.44 137551.83

Investment income/(losses) 15.5 40989673.41 50748305.69

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 -80876.19 -21905.00

Impairment loss of asset -378965.52 -124775.72

Gains/(losses) from disposal of assets

II. Profit/(loss) from operations 48676159.05 56284457.05

Add: Non-operating income 50150.00 38150.00

Less: Non-operating expenses

III. Profit/(loss) before tax 48726309.05 56322607.05

Less: Income tax expenses 1922562.23 1377120.27

IV. Net profit/(loss) 46803746.82 54945486.78

Net profit/(loss) from continuing operation 46803746.82 54945486.78

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 46803746.82 54945486.78

Legal Representative: Cai Yuansong Chief Financial Officer：Wu Jianhua Finance Manager: Wu Jianhua

422025 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 708216972.45 744020596.18

Cash received from tax refund 62498228.93 64704665.32

Other cash received relating to operating activities 5.52 31314118.51 31938727.92

Subtotal of cash inflows from operating activities 802029319.89 840663989.42

Cash payments for goods purchased and services received 593600941.63 568982943.37

Cash payments to and on behalf of employees 151067977.57 162193081.64

Payments of taxes 22675852.81 64227780.29

Other cash payments relating to operating activities 5.52 64931416.35 71557176.73

Subtotal of cash outflows from operating activities 832276188.36 866960982.03

Net cash flows from operating activities -30246868.47 -26296992.61

II. Cash flows from investing activities

Cash received from disposal and redemption of investments 50000000.00 101260500.00

Cash received from returns on investments 6148253.50 11292745.00

Net cash received from disposals of fixed assets intangible assets and other

long-term assets 1022498.75

Net cash received from disposals of subsidiaries and other business units

Other cash received relating to investing activities 5.52 173102725.55 268987022.90

Subtotal of cash inflows from investing activities 229250979.05 382562766.65

Cash payments to acquire fixed intangible and other long-term assets 34305082.39 14149364.23

Cash payments to acquire investments 89800000.00 280000000.00

Net cash payments to acquire subsidiaries and other business units

Other cash payments relating to investing activities 5.52 116202277.78 241218285.85

Subtotal of cash outflows from investing activities 240307360.17 535367650.08

Net cash flows from investing activities -11056381.12 -152804883.43

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 21282600.00

Other cash received relating to financing activities 5.52 3047365.87 6069665.05

Subtotal of cash inflows from financing activities 38895365.87 27352265.05

Cash repayments of debts

Cash payments for dividends distribution of profit and interest expenses 46817323.30 60612944.83

Including: Dividends distribution of profit paid by subsidiaries to

minority shareholders 13446820.90 16479864.07

Other cash payments relating to financing activities 5.52 2754112.41 4301333.56

Subtotal of cash outflows from financing activities 49571435.71 64914278.39

Net cash flows from financing activities -10676069.84 -37562013.34

IV. Effect of foreign exchange rate changes on cash and cash equivalents -678342.02 -1332588.95

V. Net increase / (decrease) in cash and cash equivalents -52657661.45 -217996478.33

Plus: Cash and cash equivalents at the beginning of the period 441890727.50 561809622.45

VI. Cash and cash equivalents at the end of the period 389233066.05 343813144.12

Legal Representative: Cai Yuansong Chief Financial Officer：Wu Jianhua Finance Manager: Wu Jianhua

432025 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 oflast year

I. Cash flows from operating activities

Cash received from the sale of goods and the rendering of

services 1689450.99 1760436.27

Cash received from tax refund 0.00 4882.54

Other cash received relating to operating activities 36201121.80 30502889.54

Subtotal of cash inflows from operating activities 37890572.79 32268208.35

Cash payments for goods purchased and services received 1574640.66 2328505.23

Cash payments to and on behalf of employees 3401721.24 3016039.56

Payments of taxes 6252092.45 6501551.23

Other cash payments relating to operating activities 31615499.30 29296111.31

Subtotal of cash outflows from operating activities 42843953.65 41142207.33

Net cash flows from operating activities -4953380.86 -8873998.98

II. Cash flows from investing activities

Cash received from disposal and redemption of investments

Cash received from returns on investments 40989673.41 50748305.69

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 40989673.41 50748305.69

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 0.00 0.00

Net cash flows from investing activities 40989673.41 50748305.69

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 0.00 0.00

Cash repayments of debts

Cash payments for dividends distribution of profit and interest

expenses 33370502.40 44133080.76

Other cash payments relating to financing activities

Subtotal of cash outflows from financing activities 33370502.40 44133080.76

Net cash flows from financing activities -33370502.40 -44133080.76

IV. Effect of foreign exchange rate changes on cash and cash

equivalents 1478.03 -2947.90

V. Net increase / (decrease) in cash and cash equivalents 2667268.18 -2261721.95

Plus: Cash and cash equivalents at the beginning of the period 9893016.08 7989557.11

VI. Cash and cash equivalents at the end of the period 12560284.26 5727835.16

Legal Representative: Cai Yuansong Chief Financial Officer：Wu Jianhua Finance Manager: Wu Jianhua

442025 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 0.00 0.00 0.00 296808965.79 0.00 11252746.52 0.00 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

452025 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) -33370502.40 -33370502.40 -13446820.90 -46817323.30

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 296808965.79 10876581.02 81427732.56 510149004.06 1084653963.43 456672338.97 1541326302.40

462025 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

Less: Other Non-controlling Total owners’

Perpetual Capital Specific Surplus RetainedShare capital Treasury comprehensive Subtotal interests equityPreferenc

capital Others reserves reserves reserves earnings

e shares stock incomesecurities

I. Balance brought forward 185391680.00 296808965.79 10227053.51 75501488.36 507010039.53 1074939227.19 459444612.96 1534383840.15

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 10227053.51 75501488.36 507010039.53 1074939227.19 459444612.96 1534383840.15

III. Changes in equity during the

reporting period 91737.73 -12358340.37 -12266602.64 -5921446.38 -18188049.02

(i) Total comprehensive income 91737.73 33989579.63 34081317.36 10558417.68 44639735.04

(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 -46347920.00 -46347920.00 -16479864.07 -62827784.07

1．Withdrawal of surplus reserves

2．Profit distribution to owners (or

shareholders) -46347920.00 -46347920.00 -16479864.07 -62827784.07

3．Others

472025 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

Less: Other Non-controlling Total owners’

Perpetual Capital Specific Surplus RetainedShare capital Preferenc reserves Treasury comprehensive reserves reserves earnings Subtotal

interests equity

capital Others

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 0.01 0.01

IV. Balance carried forward 185391680.00 296808965.79 10318791.24 75501488.36 494651699.16 1062672624.55 453523166.58 1516195791.13

Legal Representative: Cai Yuansong Chief Financial Officer：Wu Jianhua Finance Manager：Wu Jianhua

482025 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 Capital Less: Other Specific Surplus

Share capital PerpetualPreference Treasury comprehensive Retained earnings Total owners’ equitycapital Others reserves stock income reserves reservesshares

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

492025 Semi-Annual Report of Tsann Kuen (China) Enterprise Co. Ltd.

(Continued)

Same period of last year

Other equity instruments

Item Perpetual Capital

Less: Other Specific Surplus

Share capital Preference Treasury comprehensive Retained earnings Total owners’ equitycapital Others reserves stock income reserves reservesshares

securities

I. Balance brought forward 185391680.00 271490289.82 75501488.36 387364404.92 919747863.10

Add:Changes in accounting policy

Correction of prior period errors

Others

II. Balance as at 1 January 185391680.00 271490289.82 75501488.36 387364404.92 919747863.10

III. Changes in equity during the reporting period 8597566.78 8597566.78

(i) Total comprehensive income 54945486.78 54945486.78

(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 -46347920.00 -46347920.00

1．Withdrawal of surplus reserves

2．Profit distribution to owners (or shareholders) -46347920.00 -46347920.00

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 75501488.36 395961971.70 928345429.88

Legal Representative: Cai Yuansong Chief Financial Officer：Wu Jianhua Finance Manager：Wu Jianhua

50Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Tsann Kuen (China) Enterprise Co. Ltd.Notes to the Financial Statements for H1 2025

(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 2025 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 2025 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

51Tsann 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 7

2025.

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 2025 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.

52Tsann 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

53Tsann 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

54Tsann 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

55Tsann 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

56Tsann 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.

57Tsann 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.

58Tsann 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

59Tsann 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:

60Tsann 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.

61Tsann 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

62Tsann 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).

63Tsann 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

64Tsann 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

65Tsann 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.

66Tsann 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.

67Tsann 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.

68Tsann 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

69Tsann 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

70Tsann 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

71Tsann 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

72Tsann 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

73Tsann 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.

74Tsann 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

75Tsann 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

76Tsann 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

77Tsann 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.

78Tsann 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.

79Tsann 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.

80Tsann 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

81Tsann 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

82Tsann 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

83Tsann 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

84Tsann 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

85Tsann 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

86Tsann 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;

87Tsann 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 goods

0%、1%、5%、and taxable services calculated in accordance with the provisions of the tax

Value-added tax (VAT) 6%、9%、11%、

law and after deducting the input tax allowed to be deducted in the current

13%

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

88Tsann 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 2025 1 January 2025

Cash on hand 1001771.94 887987.84

Cash in bank 388207960.50 440872233.11

Other monetary funds 1723334.17 2617722.57

Total 390933066.61 444377943.52

Including：The total amount deposited overseas 27915737.15 37357738.79

Of the other monetary funds CNY 1700000.56 is the margin deposited by TKL for opening a letter of

credit and CNY 23333.61 is the balance of the company's Alipay account. Except for the margin deposited

89Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

for opening a letter of credit there are no other funds in monetary funds at the end of the period with

restricted use rights or potential recovery risks due to mortgage pledge or freeze.

5.2 Held-for-trading financial assets

Items 30 June 2025 1 January 2025

Financial assets measured at fair value through Profit or Loss 0.00 50942083.33

Including: Derivative financial assets 0.00 0.00

Structured Deposit Investment 0.00 50942083.33

Total 0.00 50942083.33

5.3 Accounts Receivables

5.3.1 Accounts receivable by aging

Aging 30 June 2025 1 January 2025

Within one year 135404384.60 205640866.11

Including: Within 90 days 111211765.19 190204917.49

91 – 180 days 23062185.71 15422144.41

181 – 270 days 1129920.70 13804.21

271 – 365 days 513.00

1-2 years 171.00 40.24

2-3 years 20000.00 20000.00

Over 3 years 125418.08 125418.08

including: 3-4 years 0.00 9677.56

4-5 years 120418.08 110740.52

Over 5 years 5000.00 5000.00

Subtotal 135549973.68 205786324.43

Less: provision for bad debt 3844617.77 1830424.63

Total 131705355.91 203955899.80

5.3.2 Accounts receivable by bad debt provision method

Category 30 June 2025

Book balance Provision for bad debt

Amount Proportion Provision

Carrying amount

(%) Amount ratio (%)

Provision for bad debt recognised

individually 0.00 0.00 0.00 0.00 0.00

Provision for bad debt recognized

collectively 135549973.68 100.00 3844617.77 2.84 131705355.91

Including: Portfolio by age 133880740.68 98.77 3844617.77 2.87 130036122.91

Portfolio by related parties 1669233.00 1.23 0.00 0.00 1669233.00

Total 135549973.68 100.00 3844617.77 2.84 131705355.91

(Continued)

Category 1 January 2025

Book balance Provision for bad debt

Proportion Provision ratio Carrying amountAmount (%) Amount (%)

Provision for bad debt recognised

individually 0.00 0.00 0.00 0.00 0.00

Provision for bad debt recognized 205786324.43 100.00 1830424.63 0.89 203955899.80

90Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Category 1 January 2025

Book balance Provision for bad debt

Amount Proportion Amount Provision ratio

Carrying amount

(%)(%)

collectively

Including: Portfolio by age 204835409.81 99.54 1830424.63 0.89 203004985.18

Portfolio by related parties 950914.62 0.46 0.00 950914.62

Total 205786324.43 100.00 1830424.63 0.89 203955899.80

Specific instructions for provision for bad debts:

Accounts receivables with bad debt provision are recognised by portfolio by age

30 June 2025

Aging

Book balance Provision for bad debt Provision ratio (%)

Not overdue 114223083.39 573921.15 0.50

Overdue 1 – 30 days 11803950.37 531177.78 4.50

Overdue 31 – 60 days 5545847.05 1109169.41 20.00

Overdue 61 – 90 days 1231837.09 554326.65 45.00

Overdue more than 90 days 1076022.78 1076022.78 100.00

Total 133880740.68 3844617.77

(Continued)

30 June 2025

Aging

Book balance Provision for bad debt Provision ratio (%)

Not overdue 191437682.38 957008.77 0.50

Overdue 1 – 30 days 11960968.06 538243.56 4.50

Overdue 31 – 60 days 1376983.84 275396.77 20.00

Overdue 61 – 90 days

Overdue more than 90 days 59775.53 59775.53 100.00

Total 204835409.81 1830424.63

Accounts receivables with bad debt provision are recognised by portfolio by related parties

30 June 2025

Accounts Receivables

Book balance Provision for bad debt Provision ratio (%) Reason for provision

Portfolio by related parties 364979.43 0.00 0.00

Total 364979.43 0.00 0.00

(Continued)

30 June 2025

Accounts Receivables

Book balance Provision for bad debt Provision ratio (%) Reason for provision

Portfolio by related parties 950914.62 0.00 0.00

Total 950914.62 0.00 0.00

The recognition criteria and explanation for provisions for bad debts by portfolio are detailed in Note III.9.

5.3.3 Changes of provision for bad debt during the reporting period

1 January Changes during the reporting periodCategory 2025 30 June 2025Provision Recovery or reversal Write-off Other

91Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Provision for bad debt by group 1830424.63 2045153.37 29927.72 0.00 1032.51 3844617.77

Total 1830424.63 2045153.37 29927.72 0.00 1032.51 3844617.77

5.3.4 Accounts receivable actually written off in the current period

N/A

5.3.5 Top five closing balances by entity

Entity Accountsreceivable Contract Assets Total Proportion (%) Bad debt provision

No. 1 26934129.27 26934129.27 19.87 134670.65

No. 2 24273161.11 24273161.11 17.91 196527.28

No. 3 20900688.78 20900688.78 15.42 107757.39

No. 4 14553818.36 14553818.36 10.74 87489.70

No. 5 10138603.13 10138603.13 7.48 883842.55

Total 96800400.65 0.00 96800400.65 71.42 1410287.57

5.4 Advances to Suppliers

5.4.1 Advances to suppliers by aging

Closing Balance Opening Balance

Items

Amoun Percentage (%) Amoun Percentage (%)

Within1 year 8261158.90 100.00 4318758.91 100.00

Total 8261158.90 100.00 4318758.91 100.00

5.4.2 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 4188466.16 accounting for 50.70% of the total amount of the prepayment at the

end of the reporting period.

5.5 Other Receivables

5.5.1 Other receivables by category

Items 30 June 2025 1 January 2025

Interest receivable 0.00 0.00

Dividend receivable 0.00 0.00

Other receivables 16834594.69 27902480.51

Total 16834594.69 27902480.51

5.5.2 Other Receivables

5.5.2.1 Other receivables by aging

Aging 30 June 2025 1 January 2025

Within one year 15843474.07 26709851.91

Including: Within 90 days 15079300.67 26401440.21

91 – 180 days 520749.63 290303.70

181 – 270 days 206335.43 18108.00

271 – 365 days 37088.34

92Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Aging 30 June 2025 1 January 2025

1-2 years 515330.64 625214.28

2-3 years 27372.62 35500.00

Over 3 years 1058750.01 1048404.94

ncluding: 3-4 years 14743.31 0.00

4-5 years 0.00 0.00

Over 5 years 1044006.70 1048404.94

Subtotal 17444927.34 28418971.13

Less: provision for bad debt 610332.65 516490.62

Total 16834594.69 27902480.51

5.5.2.2 Other receivables by nature

Nature 30 June 2025 1 January 2025

Export tax refund 6500000.00 18000000.00

Other open credits 9324648.29 9213566.19

Deposit 1620279.05 1205404.94

Subtotal 17444927.34 28418971.13

Less: Provision for bad debt 610332.65 516490.62

Total 16834594.69 27902480.51

5.5.2.3 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 1/1/2025 190067.98 0.00 326422.64 516490.62

Carrying amount of other

receivables in current period —— —— —— ——

on 1/1/2025

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 94295.77 0.00 0.00 94295.77

Reversal 453.74 0.00 0.00 453.74

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

30/6/2025283910.010.00326422.64610332.65

5.5.2.4 Provision for bad debt recognized recovered or reversed

Changes during the reporting period

Category 1 January 2025 30 June 2025

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 190067.98 94295.77 453.74 0.00 0.00 283910.01

93Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Total 516490.62 94295.77 453.74 0.00 0.00 610332.65

5.5.2.5 There are no other receivables write-off during the reporting period按欠款方归集的期末

5.5.2.6 Top five closing balances by entity

Entity name Nature Balance at 30

Proportion of the Provision for

June 2025 Aging balance to the totalother receivables (%) bad debt

Zhangzhou Taiwan investment

zone State Administration of Export taxrefund 6500000.00 1-90 days 37.26Taxation

State Grid Fujian Electric Power

Co. Ltd. Zhangzhou Longhai Other opencredits 2409792.51 1-90 days 13.81District Power Supply Company

Xiamen Gongxin Yongzhu Industry Other open Within 1

and Trade Co. Ltd. credits 924911.75 year 5.30 83159.23

China Export Credit Insurance

Corporation Fujian Branch Deposit 648450.00 Over 1 year 3.72

KPPBC TMT A PABEAN BOGOR. Deposit 428710.51 1-90 days 2.46

Total 10911864.77 62.55 83159.23

5.6 Inventories

5.6.1 Inventories by category

30 June 2025 1 January 2025

Items

Book balance Provision for Carrying Book balance Provision for Carryingimpairment amount impairment amount

Raw materials 86976095.46 14623191.76 72352903.70 74560733.28 13095705.30 61465027.98

Work in

process 15390161.11 0.00 15390161.11 3073604.45 0.00 3073604.45

Self-

manufactured

semi-finished 15792812.49 2256988.90 13535823.59 27333598.54 3193768.90 24139829.64

goods

Finished goods 38678344.37 0.00 38678344.37 29574402.53 0.00 29574402.53

Low-value

consumables 40287738.41 6188752.98 34098985.43 78687157.30 6285683.77 72401473.53

Materials in

transit 7985515.62 0.00 7985515.62 3745185.65 0.00 3745185.65

Total 205110667.46 23068933.64 182041733.82 216974681.75 22575157.97 194399523.78

5.6.2 Provision for impairment

Increase in current year Decrease in current year

Item 1 January 2025 Impact of

Impact of

30 June 2025

Accrual changes in Recovered or changes in

exchange rates Written off exchangerates

Raw materials 13095705.30 2061011.42 -20252.17 513272.79 0.00 14623191.76

Self-manufactured

semi-finished goods 3193768.90 -705519.93 -3037.40 228222.67 0.00 2256988.90

Finished goods 6285683.77 1448260.40 -1542.44 1543648.75 0.00 6188752.98

Total 22575157.97 2803751.89 -24832.01 2285144.21 0.00 23068933.64

Note: The criteria for making provision for the decline in value of inventories on a portfolio basis are set

out in Note 3.10.

94Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

5.7 Non-current assets due within one year

Items 30 June 2025 1 January 2025

Debt investments due within one year 237753845.51 51260694.44

Less: Impairment provisions 0.00 0.00

Total 237753845.51 51260694.44

5.8 Other Current Assets

Items 30 June 2025 1 January 2025

Input tax to be deducted 5260042.99 9897443.29

Financial investment 413858099.71 544439535.72

Total 419118142.70 554336979.01

5.9 Debt Investment

5.9.1 Situation of debt investment

30 June 2025 1 January 2025

Item Provision Provision

Book balance for Carrying amount Book balance for Carrying amount

impairment impairment

Large certificate of

deposit 736100000.00 0.00 736100000.00 581500000.00 0.00 581500000.00

Accrued interest on

large certificate of 20364701.46 0.00 20364701.46 10295355.13 0.00 10295355.13

deposit

Subtotal 756464701.46 0.00 756464701.46 591795355.13 0.00 591795355.13

Less: Debt

investments due 237753845.51 0.00 237753845.51 51260694.44 0.00 51260694.44

within one year

Total 518710855.95 0.00 518710855.95 540534660.69 0.00 540534660.69

5.9.2 Significant debt investments at the end of the period

30 June 2025

Item

Face value Coupon rate Effective rate Expiry date Overdueprincipal

Bank Of Quanzhou Fixed deposit 74600000.00 2.50% 2.50% 2027/1/16

Bank Of Quanzhou Fixed deposit 30000000.00 2.50% 2.50% 2027/1/16

Xiamen Bank Fixed deposit 50000000.00 2.40% 2.40% 2027/1/17

Bank Of Quanzhou Fixed deposit 51500000.00 2.75% 2.75% 2026/9/12

Xiamen Bank Large Certificates of

Deposit 50000000.00 3.30% 3.30% 2026/12/21

Xiamen Bank Fixed deposit 50000000.00 3.30% 3.30% 2026/12/26

Bank Of Quanzhou Fixed deposit 50000000.00 2.85% 2.85% 2026/7/4

Bank Of Quanzhou Fixed deposit 50000000.00 2.75% 2.75% 2026/9/9

Bank Of Quanzhou Fixed deposit 50000000.00 2.75% 2.75% 2026/9/11

Bank Of Quanzhou Fixed deposit 50000000.00 2.75% 2.75% 2026/9/12

Total 506100000.00

(Continued)

1 January 2025

Item Face value Coupon rate Effective rate Expiry date Overdueprincipal

95Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

1 January 2025

Item Face value Coupon rate Effective rate Expiry date Overdueprincipal

Bank Of Quanzhou Fixed deposit 51500000.00 2.75% 2.75% 2026/9/12

Xiamen Bank Large Certificates of

Deposit 50000000.00 3.30% 3.30% 2026/12/21

Xiamen Bank Fixed deposit 50000000.00 3.30% 3.30% 2026/12/26

Bank Of Quanzhou Fixed deposit 50000000.00 2.85% 2.85% 2026/7/4

Bank Of Quanzhou Fixed deposit 50000000.00 2.75% 2.75% 2026/9/9

Bank Of Quanzhou Fixed deposit 50000000.00 2.75% 2.75% 2026/9/11

Bank Of Quanzhou Fixed deposit 50000000.00 2.75% 2.75% 2026/9/12

Xiamen International Bank Fixed

deposit 50000000.00 2.85% 2.85% 2026/4/9

Chiyu Banking Corporation Ltd.Xiamen Branch Fixed deposit 50000000.00 2.85% 2.85% 2026/5/11

Xiamen International Bank Fixed

deposit 50000000.00 2.75% 2.75% 2026/5/23

Bank Of Quanzhou Fixed deposit 30000000.00 2.85% 2.85% 2026/6/25

Total 531500000.00

5.10 Long-term equity investments

Changes in the current period

1 January Opening Investment gains Adjustment Changes in Declaration Accrual 30 June 2025 ClosingInvested entity 2025 (Carrying balance of Follow-on Reduce or losses of other other rights of issuing of （Carrying balance ofamount) depreciation reserves investment investment recognized under comprehen and

cash impairm Other depreciatio

equity method sive income interests dividends entamount） n reserves

or profits provision

Joint venture

Shanghai Upa

Smart Chain Home 0.00 9800000.00 -354876.17 9445123.83

Appliances Co. Ltd.Total 0.00 9800000.00 -354876.17 9445123.83

5.11 Other equity instrument investment

Items 30 June 2025 1 January 2025

Non-trading equity instrument investment 40000.00 40000.00

Total 40000.00 40000.00

5.12 Investment Properties

5.12.1 Investment properties accounted for using cost model

Items Building and Land use rights Construction inplants progress Total

Initial cost:

Balance on 1 January 2025 80814358.80 29260577.51 0.00 110074936.31

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 2025 80814358.80 29260577.51 0.00 110074936.31

Accumulated depreciation and amortisation:

96Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items Building and Land use rights Construction inplants progress Total

Balance on 1 January 2025 72758196.24 18028984.84 0.00 90787181.08

Increase during the reporting period 102121.92 311055.90 0.00 413177.82

1. Accrual or amortization 102121.92 311055.90 0.00 413177.82

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 2025 72860318.16 18340040.74 0.00 91200358.90

Provision for impairment:

Balance on 1 January 2025 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 2025 0.00 0.00 0.00 0.00

Carrying amount:

Balance on 30 June 2025 7954040.64 10920536.77 0.00 18874577.41

Balance on 1 January 2025 8056162.56 11231592.67 0.00 19287755.23

5.12.2 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.

5.13 Fixed Assets

5.13.1 Fixed assets by category

Items 30 June 2025 1 January 2025

Fixed assets 154068855.87 146795190.83

Disposal of fixed assets 0.00 0.00

Total 154068855.87 146795190.83

97T 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

5.13.2 Fixed assets

5.13.2.1 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 2025 89810823.21 154643353.55 849500172.53 16444897.00 20762399.27 1131161645.56

Increase during the reporting period 3262373.52 16832311.59 10498259.10 326929.02 -40297.56 30879575.67

(i) Acquisition 0.00 10075777.43 5111581.21 337308.62 0.00 15524667.26

(ii) Transfer from construction in progress 3458870.76 6912389.41 5548809.75 0.00 0.00 15920069.92

(iii) Transfer from investment properties 0.00 0.00 0.00 0.00 0.00 0.00

(iv) Impact of changes in exchange rates -196497.24 -155855.25 -162131.86 -10379.60 -40297.56 -565161.51

Decrease during the reporting period 0.00 4639778.99 7130467.55 0.00 0.00 11770246.54

(i) Disposal 0.00 4639778.99 7130467.55 0.00 0.00 11770246.54

(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 2025 93073196.73 166835886.15 852867964.08 16771826.02 20722101.71 1150270974.69

Accumulated depreciation:

Balance on 1 January 2025 56173349.46 89331263.33 777633498.27 15424464.62 18962663.07 957525238.75

Increase during the reporting period 1486682.39 4757129.30 9417380.03 179254.92 116934.65 15957381.29

(i) Provision 1577230.11 4875635.45 9550596.98 188186.27 149853.32 16341502.13

(ii) Transfer from investment properties 0.00 0.00 0.00 0.00 0.00 0.00

(iii) Impact of changes in exchange rates -90547.72 -118506.15 -133216.95 -8931.35 -32918.67 -384120.84

Decrease during the reporting period 0.00 850389.76 3168665.37 0.00 0.00 4019055.13

(i) Disposal 0.00 850389.76 3168665.37 0.00 0.00 4019055.13

(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 2025 57660031.85 93238002.87 783882212.93 15603719.54 19079597.72 969463564.91

98T 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 2025 0.00 6971735.34 19849759.00 8499.92 11221.72 26841215.98

Increase during the reporting period 0.00 -17773.47 5268.15 -24.02 -46.46 -12575.80

(i) Provision 0.00 0.00 14916.92 0.00 0.00 14916.92

(ii) Impact of changes in exchange rates 0.00 -17773.47 -9648.77 -24.02 -46.46 -27492.72

Decrease during the reporting period 0.00 76591.27 13495.00 0.00 0.00 90086.27

(i) Disposal 0.00 76591.27 13495.00 0.00 0.00 90086.27

Balance on 30 June 2025 0.00 6877370.60 19841532.15 8475.90 11175.26 26738553.91

Carrying amount:

Balance on 30 June 2025 35413164.88 66720512.68 49144219.00 1159630.58 1631328.73 154068855.87

Balance on 1 January 2025 33637473.75 58340354.88 52016915.26 1011932.46 1788514.48 146795190.83

5.13.2.2 Idle fixed assets

Item Initial cost Accumulated depreciation Provision for impairment Carrying amount Item

Machineries 5587205.03 3761475.77 1431780.84 393948.42

Electronic device modules and others 827810.52 763987.56 48607.12 15215.84

Improvement expense of fixed assets 2571879.58 2571879.58 0.00 0.00

Total 8986895.13 7097342.91 1480387.96 409164.26

5.13.2.3 Fixed assets without certificate of title

99Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items Carrying amount Reason

Jingying garden 61448.62 Legal procedures in process

Lvyuan three country villa 297722.28

5.14 Construction in Progress

5.14.1 Construction in progress by category

Items 30 June 2025 1 January 2025

Construction in progress 5056908.31 3462300.89

Total 5056908.31 3462300.89

5.14.2 Construction in progress

30 June 2025 1 January 2025

Items

Book balance Provision for Carrying Provision for Carryingimpairment amount Book balance impairment amount

Sporadic project 3347837.54 0.00 3347837.54 2107628.32 0.00 2107628.32

Equipment pending

acceptance 1709070.77 0.00 1709070.77 1354672.57 0.00 1354672.57

Total 5056908.31 0.00 5056908.31 3462300.89 0.00 3462300.89

5.15 Right-of-use Assets

5.15.1 Status of Right-of-Use Assets

Items Houses and buildings Total

Initial cost:

Balance on 1 January 2025 408735436.56 408735436.56

Increase during the reporting period 1378875.73 1378875.73

(i) Leases 1378875.73 1378875.73

(ii) Impact of changes in exchange rates 0.00 0.00

Decrease during the reporting period 0.00 0.00

(i) Disposal 0.00 0.00

(ii) Impact of changes in exchange rates 0.00 0.00

Balance on 30 June 2025 410114312.29 410114312.29

Accumulated depreciation:

Balance on 1 January 2025 54791566.64 54791566.64

Increase during the reporting period 7354598.21 7354598.21

(i) Provision 7354598.21 7354598.21

(ii) Impact of changes in exchange rates 0.00 0.00

Decrease during the reporting period 0.00 0.00

(i) Disposal 0.00 0.00

(ii) Impact of changes in exchange rates 0.00 0.00

Balance on 30 June 2025 62146164.85 62146164.85

Accumulated depreciation:

Balance on 1 January 2025 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

100Tsann 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 2025 0.00 0.00

Carrying amount:

Balance on 30 June 2025 347968147.44 347968147.44

Balance on 1 January 2025 353943869.92 353943869.92

5.16 Intangible Assets

5.16.1 Status of Intangible Assets

Items Land use rights Software Total

Initial cost:

Balance on 1 January 2025 19423602.68 53847562.20 73271164.88

Increase during the reporting period 0.00 0.00 0.00

(i) Acquisition 0.00 0.00 0.00

(ii) Impact of changes in exchange rates 0.00 0.00 0.00

Decrease during the reporting period 80414.99 0.00 80414.99

(i) Disposal 0.00 0.00 0.00

(ii) Impact of changes in exchange rates 80414.99 0.00 80414.99

Balance on 30 June 2025 19343187.69 53847562.20 73190749.89

Accumulated depreciation:

Balance on 1 January 2025 7589198.59 53734647.63 61323846.22

Increase during the reporting period 318823.00 88646.30 407469.30

(i) Provision 318823.00 88646.30 407469.30

(ii) Impact of changes in exchange rates 0.00 0.00 0.00

Decrease during the reporting period 29067.56 0.00 29067.56

(i) Disposal 0.00 0.00 0.00

(ii) Impact of changes in exchange rates 29067.56 0.00 29067.56

Balance on 30 June 2025 7878954.03 53823293.93 61702247.96

Accumulated depreciation:

Balance on 1 January 2025 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 2025 0.00 0.00 0.00

Carrying amount:

Balance on 30 June 2025 11464233.66 24268.27 11488501.93

Balance on 1 January 2025 11834404.09 112914.57 11947318.66

5.17 Long-term Deferred Expenses

Items 1 January 2025 Increase during thereporting period Amortisation Other decrease 30 June 2025

Telecommunications 84199.14 0.00 18743.94 0.00 65455.20

101Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items 1 January 2025 Increase during thereporting period Amortisation Other decrease 30 June 2025

project expenses

Houses and buildings

renovation expenses 5487181.12 0.00 1251890.76 0.00 4235290.36

Total 5571380.26 0.00 1270634.70 0.00 4300745.56

5.18 Deferred Tax Assets and Deferred Tax Liabilities

5.18.1 Deferred tax assets before offsetting

30 June 2025 1 January 2025

Items Deductible temporary Deferred tax assets Deductible temporary Deferred tax assets

differences differences

Provision for asset impairment 37183948.14 5790889.88 36745296.24 5756204.14

Provision for credit impairment 4212073.02 612926.29 2087383.34 325513.21

Unrealized intragroup profit 787972.73 118195.91 445561.88 111390.47

Accrued expenses 7756354.78 1218438.84 8188555.64 1301408.77

Lease liabilities 406036039.14 60905405.87 396776679.42 59538736.82

Total 455976387.81 68645856.79 444243476.52 67033253.41

5.18.2 Deferred tax liabilities before offsetting

30 June 2025 1 January 2025

Items Deductible temporary Deferred tax assets Deductible temporary Deferred tax assets

differences differences

Financial assets held for trading 942083.33 141312.50

Accelerated depreciation of

fixed assets 11957705.92 1793655.89 12850383.83 1927557.57

Right-of-use Assets 347968147.44 52195222.13 353943869.92 53091580.49

Total 359925853.36 53988878.02 367736337.08 55160450.56

5.18.3 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 on30 June 2025 on 30 June 2025 offset on 31 December on 31 December 20242024

Deferred tax assets -53988878.02 14656978.77 55160450.56 11872802.85

Deferred tax liabilities -53988878.02 55160450.56

5.18.4 Unrecognized deferred tax assets

Items 30 June 2025 1 January 2025

Provision for asset impairment 12454416.31 12501998.30

Provision for credit impairment 242876.55 259531.91

Accrued expenses 598651.20 16484156.08

Payroll liability 1482069.15 2119054.60

Undistributed deficit 29994843.09 24592204.05

Total 44772856.30 55956944.94

5.18.5 Deductible losses not recognised as deferred tax assets will expire in the following periods

Items 30 June 2025 31 December 2024

Year 2025

Year 2026

102Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items 30 June 2025 31 December 2024

Year 2027 6631108.51 6631108.51

Year 2028 5538094.86 5538094.86

Year 2029 to year 2035 17825639.72 12423000.68

Total 29994843.09 24592204.05

5.19 Other Non-current Assets

30 June 2025 1 January 2025

Items

Book balance Provision for Carrying Book balance Provision for Carryingimpairment amount impairment amount

Prepaid equipment

fee 8230383.08 0.00 8230383.08 10099186.11 0.00 10099186.11

Total 8230383.08 0.00 8230383.08 10099186.11 0.00 10099186.11

5.20 Assets with restricted ownership or right of use

30 June 2025 1 January 2025

Items

Book balance Carrying amount Reasons Book balance Carrying amount Reasons

Monetary funds 1700000.56 1700000.56 Credit 2487216.02 2487216.02 Credit

Total 1700000.56 1700000.56 2487216.02 2487216.02

5.21 Short-term Borrowings

Items 30 June 2025 1 January 2025

Credit loan 36333653.27 0.00

Total 36333653.27 0.00

5.22 Notes Payable

Items 30 June 2025 1 January 2025

Bank acceptance bills 4724919.53 19418627.35

Total 4724919.53 19418627.35

5.23 Accounts Payable

Items 30 June 2025 1 January 2025

Within 1 year 376756931.68 513873164.01

Over 1 year 3418580.27 3448353.28

Total 380175511.95 517321517.29

5.24 Advances from Customers

Items 30 June 2025 1 January 2025

Within 1 year 2425430.88 2803884.45

Over 1 year 122088.80 120448.80

Total 2547519.68 2924333.25

5.25 Contract Liabilities

Items 30 June 2025 1 January 2025

Advance from merchandise 17801441.24 15988527.98

Advance management fee 258014.99 308211.67

Total 18059456.23 16296739.65

5.26 Employee Benefits Payable

5.26.1 Details of employee benefits payable

103Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items 1 January 2025 Increase during the Decrease during thereporting period reporting period 30 June 2025

Short-term employee

benefits 53950714.15 148570138.00 153817010.74 48703841.41

Post-employment

benefits-defined 6308.25 12094598.31 12094778.45 6128.11

contribution plans

Termination benefits 0.00 0.00 0.00 0.00

Total 53957022.40 160664736.31 165911789.19 48709969.52

5.26.2 Short-term employee benefits

Items 1 January 2025 Increase during the Decrease during thereporting period reporting period 30 June 2025

Salaries bonuses allowances and

subsidies 34998217.81 130382259.38 138426087.88 26954389.31

Employee benefits 0.00 6380129.02 4081964.79 2298164.23

Social insurance 4662.77 6491589.92 6492742.73 3509.96

Including: Health insurance 3512.85 4703811.10 4703981.33 3342.62

Injury insurance 1149.92 1424684.88 1425667.46 167.34

Birth insurance 0.00 363093.94 363093.94 0.00

Housing accumulation fund 15982742.50 4700519.70 3218450.55 17464811.65

Labour union funds and employee

education funds 0.00 600528.79 600528.79 0.00

Short-term absence pay 2965091.07 15111.19 997236.00 1982966.26

Total 53950714.15 148570138.00 153817010.74 48703841.41

5.26.3 Defined contribution plans

Items 1 January 2025 Increase during the Decrease during thereporting period reporting period 30 June 2025

Basic endowment insurance 6122.54 11713289.09 11713469.23 5942.40

Unemployment insurance 185.71 381309.22 381309.22 185.71

Total 6308.25 12094598.31 12094778.45 6128.11

Note: The Company participates in the endowment insurance and unemployment insurance plan established

by the government according to these plans the Company pays planed fees to the Company’s location. In

addition to the monthly fee deposit the Company no longer bears further payment obligations.Corresponding expenses are expensed as incurred or costs related assets.

5.27 Taxes Payable

Items 30 June 2025 1 January 2025

Value added tax (VAT) 685920.24 952185.68

Enterprise income tax 3195023.65 13505915.29

Individual income tax 460737.73 809831.82

City construction tax 279795.99 601276.22

Educational surcharge 167877.59 360765.73

Local education surcharge 111918.40 240510.49

Property tax 1642278.58 1456280.69

Land use tax 26376.34 175232.78

104Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items 30 June 2025 1 January 2025

Stamp tax 166028.89 202995.02

Other 1563908.35 5401.04

Total 8299865.76 18310394.76

5.28 Other Payables

5.28.1 Other payables by category

Items 30 June 2025 1 January 2025

Interest payable 0.00 0.00

Dividend payable 0.00 0.00

Other payable 33275738.81 40877557.33

Total 33275738.81 40877557.33

5.28.2 Other payables

5.28.2.1 Other payables by nature

Items 30 June 2025 1 January 2025

Within 1 year

24706632.5031061411.13

Over 1 year

8569106.319816146.20

Total

33275738.8140877557.33

5.28.2.2 Significant other payables with aging over one year

Items 30 June 2025 Reason

Deposit 7564028.69 Return upon termination of contract

Total 7564028.69

5.29 Non-current Liabilities Maturing within One Year

Items 30 June 2025 1 January 2025

Lease liabilities maturing within one year 7548324.44 922678.70

Total 7548324.44 922678.70

5.30 Lease Liabilities

Items 30 June 2025 1 January 2025

Lease liabilities 699657407.54 698687752.67

Less：unrecognized financing charges 293621368.40 301760453.00

Subtotal 406036039.14 396927299.67

Less：Lease liabilities due within one year 7548324.44 922678.70

Total 398487714.70 396004620.97

5.31 Share Capital

105Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Changes during the reporting period (+-)

Item 1 January 2025 Bonus Capitalisation of 30 June 2025New issues issues reserves Others Subtotal

Number of total

shares 185391680.00 185391680.00

5.32 Capital Reserves

Item 1 January 2025 Increase during the Decrease during thereporting period reporting period 30 June 2025

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

106T 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

5.33 Other Comprehensive Income

Current year

Less: previously Less: previously

recognised in other recognised in other Less: After tax After taxItem 1 January 2025 Amount for the 30 June 2025

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 11211709.96 -501554.00 0.00 0.00 0.00 -376165.50 -125388.50 10835544.46

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 11211709.96 -501554.00 0.00 0.00 0.00 -376165.50 -125388.50 10835544.46

Total 11252746.52 -501554.00 0.00 0.00 0.00 -376165.50 -125388.50 10876581.02

107Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

5.34 Surplus Reserves

Item 1 January 2025 Increase during the Decrease during thereporting period reporting period 30 June 2025

Statutory surplus

reserves 81427732.56 0.00 0.00 81427732.56

Total 81427732.56 0.00 0.00 81427732.56

Note: Pursuant to the Company Law of the People's Republic of China and Articles of

Association the Company appropriates 10% of net profit to the statutory surplus reserves.

5.35 Retained Earnings

Items Reporting period Same period of last year

Balance at the end of last period before adjustments 527518517.81 507010039.53

Adjustments for the opening balance (increase /(decrease) 0.00 0.00

Balance at the beginning of the reporting period after adjustments 527518517.81 507010039.53

Add: net profit attributable to owners of the parent company for the

reporting period 16000988.65 72782642.48

Less: appropriation to statutory surplus reserves 0.00 5926244.20

Appropriation to discretionary surplus reserves 0.00 0.00

Provision for general risk reserves 0.00 0.00

Payment of ordinary share dividends 33370502.40 46347920.00

Common stock dividends converted to share capital 0.00 0.00

Balance at the end of the reporting period 510149004.06 527518517.81

5.36 Revenue and Cost of Sales

Reporting period Same period of last year

Items Revenue Costs of sales Revenue Costs of sales

Principal activities 631409254.61 558582665.57 761016486.42 659592166.69

Other activities 21364041.78 4297683.61 27069511.61 6141115.42

Total 652773296.39 562880349.18 788085998.03 665733282.11

5.36.1 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 631409254.61 558582665.57 761016486.42 659592166.69

Total 631409254.61 558582665.57 761016486.42 659592166.69

5.36.2 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 392599119.51 348325391.98 462268892.25 399171424.13

Home helper 193015583.40 173433583.72 228514421.19 201239650.62

Tea/Coffee makers 41387776.71 36129559.32 63844429.06 55995383.83

Others 4406774.99 694130.55 6388743.92 3185708.11

Total 631409254.61 558582665.57 761016486.42 659592166.69

5.36.3 Revenue from principal activities (by region)

108Tsann 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 5378593.86 4356657.52 8195752.50 6586175.57

Africa 983892.36 1032958.15 6903962.62 5416726.87

America 246494836.05 225318161.22 364669044.48 320394879.52

Europe 227996576.35 199231164.91 254715358.72 218603500.75

Asia 150555355.99 128643723.77 126532368.10 108590883.98

Total 631409254.61 558582665.57 761016486.42 659592166.69

5.37 Taxes and Surcharges

Items Reporting period Same period of last year

City construction tax 1005466.10 771046.35

Educational surcharge 575443.10 439841.14

Local education surcharge 383628.74 293227.44

Property tax 1526635.96 1464035.27

Land use tax 199423.38 199423.38

Stamp duty 343256.55 422227.45

Other 50125.80 37751.66

Total 4083979.63 3627552.69

5.38 Selling and Distribution Expenses

Items Reporting period Same period of last year

Employee remunerations 7326689.09 7980455.20

Claims experiment expenses 471482.30 739908.02

Sales commission and after sales service fees 738747.16 3370906.57

Rental expenses 11046.05 11475.66

Travel expenses 273858.58 519120.57

Advertisements charges and sales promotion 1462551.31 1599504.01

Administrative expenses 74926.77 68301.60

Others 1347444.80 1416117.54

Total 11706746.06 15705789.17

5.39 General and Administrative Expenses

Items Reporting period Same period of last year

Employee remunerations 21966318.36 20480551.60

Depreciation and amortization of assets 4030881.41 5616418.35

Rental expenses 74971.38 218444.62

Insurance expenses 747590.60 1128414.22

Administrative expenses 653659.38 699904.81

Travel expenses 1432973.84 1038227.91

Consultant fees 1208674.02 1127270.04

Maintenance expenses 2040248.61 1449875.10

Others 2536167.26 3207699.86

Total 34691484.86 34966806.51

5.40 Research and Development Expenses

109Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items Reporting period Same period of last year

Employee remunerations 22384976.87 23261847.82

Test expenses 2916166.39 3430331.72

Depreciation and amortization of assets 1451857.05 2189562.63

Certification expenses 697826.50 773128.19

Rental expenses 19520.43 20388.54

Patent expenses 290434.10 240516.01

Travel expenses 221262.09 193016.15

Maintenance expenses 871841.42 896637.74

Consultant fees 118453.68 158649.16

Others 969418.50 982623.18

Total 29941757.03 32146701.14

5.41 Finance Expenses

Items Reporting period Same period of last year

Interest expenses 11155646.85 11082809.10

Including: interest expense on lease liabilities 8210823.74 8126807.82

Less: Interest income 3750247.27 7043615.67

Foreign exchange losses -5484832.93 -4274603.16

Bank charges 434325.03 448978.74

Total 2354891.68 213569.01

5.42 Other Income

Items Reporting period Same period of last year

Government grant 1727050.00 808125.63

Charges of withholding individual income tax 81078.78 100942.42

Total 1808128.78 909068.05

5.43 Investment Income

Items Reporting period Same period of last year

Income from long-term equity investments accounted for using the

equity method -354876.17 0.00

Investment income of trading financial assets during the holding

period 1487355.87 3252096.44

Investment income from disposal of trading financial assets 0.00 1260500.00

Other current assets for financial investments 15443949.93 10035647.53

Total 16576429.63 14548243.97

5.44 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 -942083.33 1950911.11

Including: gains on changes in fair value of derivatives 0.00 -432800.00

Financial investments -942083.33 2383711.11

Total -942083.33 1950911.11

5.45 Impairment Loss of Credit

Items Reporting period Same period of last year

Bad debt of accounts receivables 2015225.65 -1389333.18

110Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items Reporting period Same period of last year

Bad debt of other receivables 93842.03 78341.91

Total 2109067.68 -1310991.27

5.46 Impairment Loss of Assets

Items Reporting period Same period of last year

Impairment of inventories 2803751.89 4439574.84

Impairment of fixed assets 14916.92 946112.84

Total 2818668.81 5385687.68

5.47 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 1265588.90 600085.35 1265588.90

Total 1265588.90 600085.35 1265588.90

5.48 Non-operating Income

Items Reporting period Same period of last year Recognized in currentextraordinary gains and losses

Other 679417.25 148920.32 679417.25

Total 679417.25 148920.32 679417.25

5.49 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 4472.80 0.00 4472.80

Including: fixed assets 4472.80 0.00 4472.80

Donations 0.00 52501.87 0.00

Fines expenses 69113.01 0.00 69113.01

Other 469.26 0.00 469.26

Total 74055.07 52501.87 74055.07

5.50 Income Tax Expenses

5.50.1 Details of income tax expenses

Items Reporting period Same period of last year

Current tax expenses 4654110.88 7618913.13

Deferred tax expenses -2784175.92 -2414003.28

Total 1869934.96 5204909.85

5.50.2 Reconciliation of accounting profit and income tax expenses

Items Reporting period Same period of last year

Profit before tax 21499777.62 49722327.92

Income tax expense at the statutory /applicable tax rate 5374944.41 12430581.98

Effect of different tax rate of subsidiaries -1283907.82 -4643985.61

Adjustments of impact from prior period income tax 449537.86 1125725.60

Effect of income that is exempt from taxation

Effect of non-deductible costs expenses or losses 44508.09 96625.55

Effect of previously unrecognized deductible losses

111Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items Reporting period Same period of last year

recognised as deferred tax assets

Effect of deductible temporary differences and deductible

losses not recognised as deferred tax assets 482539.30 -509841.29

R&D expenses plus deduction -3197686.88 -3294196.38

Income tax expenses 1869934.96 5204909.85

5.51 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 5.33 Other Comprehensive

Income.

5.52 Notes to the Statement of Cash Flow

5.52.1 Cash flows from operating activities

5.52.1.1 Other cash received relating to operating activities

Items Reporting period Same period of last year

Government grants 1727050.00 909068.05

Interests income 3750247.27 6860842.72

Rent income 17804902.14 17154282.27

Funds in current account and others 8031919.10 7014534.88

Total 31314118.51 31938727.92

5.52.1.2 Other cash payments relating to operating activities

Items Reporting period Same period of last year

Penalties and donations 69113.01 52501.87

Bank charges 434325.03 448978.74

Sales expenses general and administrative expenses

and research and development expenses paid by cash 64357978.31 68376882.66

Current accounts and others 70000.00 2678813.46

Total 64931416.35 71557176.73

5.52.2 Cash flows from investing activities

5.52.2.1 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 173102725.55 268987022.90

Total 173102725.55 268987022.90

5.52.2.2 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 116202277.78 241218285.85

Total 116202277.78 241218285.85

5.52.3 Cash flows from financing activities

5.52.3.1 Other cash received relating to financing activities

112Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items Reporting period Same period of last year

Security deposit of L/C 3047365.87 6069665.05

Total 3047365.87 6069665.05

5.52.3.2 Other cash payments relating to financing activities

Items Reporting period Same period of last year

Lease payments of right-of-use assets 0.00 0.00

Security deposit of L/C 2754112.41 4301333.56

Total 2754112.41 4301333.56

5.53 Supplementary Information to the Statement of Cash Flows

5.53.1 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 19629842.66 44517418.07

Add: Provisions for impairment of assets 2818668.81 5385687.68

Impairment loss of credit 2109067.68 -1310991.27

Depreciation of fixed assets oil and gas asset and productive biological assets 16754679.95 17244448.77

Depreciation of use rights assets 7354598.21 7310060.88

Amortisation of intangible assets 407469.30 901477.54

Amortisation of long-term deferred expenses 1270634.70 1540481.91

Gains on disposal of fixed assets intangible assets and other long-term assets -1265588.90 -600085.35

Loss on scrapping of fixed assets 4472.80 0.00

Gains on changes in fair value 942083.33 -1950911.11

Finance income 8762972.78 8196564.57

Investment income -16576429.63 -14548243.97

Decreases in deferred tax assets -2784175.92 -2414003.28

Increases in deferred tax liabilities 0.00 0.00

Increases in inventories 11864014.29 -17859898.34

Increases in operating receivables 79376029.72 -28637315.68

Increases in operating payables -160915208.25 -44071683.03

Others 0.00 0.00

Net cash flows from operating activities -30246868.47 -26296992.61

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 389233066.05 343813144.12

Less: Cash equivalents at the beginning of the reporting period 441890727.50 561809622.45

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 -52657661.45 -217996478.33

113Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

5.53.2 The components of cash and cash equivalents

Items Reporting period Same period of last year

1. Cash 389233066.05 343813144.12

Including: Cash on hand 1001771.94 782436.23

Cash in bank available for immediate use 388207960.50 342946232.24

Other monetary funds available for immediate use 23333.61 84475.65

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 389233066.05 343813144.12

5.53.3 Monetary funds that are not cash and cash equivalents

Items Reporting period Same period of last year Reason

Letter of credit margin 1700000.56 3253013.75 Not readily available

Total 1700000.56 3253013.75

5.54 Foreign Currency Monetary Items

5.54.1 Details for foreign currency monetary items:

Items Carrying amount in foreigncurrency on 30 June 2025 Exchange rate

Carrying amount in CNY on 30 June

2025

Cash and cash equivalents

Including: USD 17969923.02 7.158600 128639490.94

JPY 87969600.42 0.049594 4362764.37

IDR 12989766211.37 0.000442 5738592.94

EUR 34071.62 8.402400 286283.38

GBP 9419.62 9.830000 92594.87

HKD 65613.38 0.911950 59836.12

HUF 81016.00 0.021063 1706.44

Total 139181269.06

Short-term borrowings

Including: USD 5000000.00 7.158600 35793000.00

Total 35793000.00

Accounts receivables

Including: USD 17784053.75 7.158600 127308927.18

IDR 426639600.00 0.000442 188479.99

JPY 41474048.00 0.049594 2056863.94

Total 129554271.11

Accounts payables

Including: USD 6856620.36 7.158600 49083802.51

EUR 269590.25 8.402400 2265205.12

GBP 126.00 9.830000 1238.58

HKD 1495.70 0.911950 1364.00

JPY 1500009.82 0.049594 74391.49

114Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items Carrying amount in foreign Exchange rate Carrying amount in CNY on 30 Junecurrency on 30 June 2025 2025

IDR 8371658626.23 0.000442 3698414.60

Total 55124416.30

Other receivables

Including: EUR 2160.00 8.402400 18149.18

HKD 2000.00 0.911950 1823.90

USD 80563.42 7.158600 576721.30

IDR 3025232868.00 0.000442 1336481.33

Total 1933175.71

Other payables

Including: USD 14289.39 7.158600 102292.03

IDR 2299420950.13 0.000442 1015833.59

Total 1118125.62

5.54.2 Description of overseas business entities

Name of the overseas operating entity: Pt.Star Comgistic Indonesia

Main business area: Indonesia

Accounting standard currency: US dollars

5.55 Lease

5.55.1 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 98870.40

Lease expense of low-value assets included in current period (except short-term lease) 0.00

Interest expense of the lease liability 8210823.74

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 7201741.60

Total cash outflow related to leasing 480960.00

5.55.2 The company shall be the lessor

5.55.2.1 Operation lease

Lease income

Items Reporting period

Lease income 8826543.69

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 22384976.87 23261847.82

Test expenses 2916166.39 3430331.72

115Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Depreciation and amortization of assets 1451857.05 2189562.63

Certification expenses 697826.50 773128.19

Rental expenses 19520.43 20388.54

Patent expenses 290434.10 240516.01

Travel expenses 221262.09 193016.15

Maintenance expenses 871841.42 896637.74

Consultant fees 118453.68 158649.16

Others 969418.50 982623.18

Total 29941757.03 32146701.14

Including: Expense recognition 29941757.03 32146701.14

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：none

8. NTERESTS IN OTHER ENTITIES

8.1 Interests in Subsidiaries

8.1.1 Composition of corporate group

Percentage of

Principal Registered Nature of equity interestsName of subsidiary Registered capital place of by the Methods of

business City business 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 business combination

Ltd. (TKS) electronic

46.875 under common

appliance control

Xiamen Tsannkuen Acquired through

Property Services Co. CNY 1.5 million Xiamen Xiamen Propertyservices 100.00 establishmentLtd. (TKW)

Hong Kong Hong Kong Investment Acquired through

East Sino Development HKD 318.84766 Trading 75.00 business combinationLimited. (East Sino) million under common

control

Indonesia Indonesia Manufactures Acquired through

Pt.StarComgistic 41 million US home business combination

Indonesia dollars electronic 75.00 under common

appliance control

Pt.Star Comgistic Indonesia Indonesia Real estate Acquired through

Property Development 5.01 million US development 75.00 establishment

Indonesia dollars

Orient Star Investments 185000 US Hong Kong Hong Kong Investment Acquired through

Limited dollars Trading 75.00 business

8.1.2 Significant non-wholly owned subsidiaries

116Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Proportion of ownership Profit or loss attributable to Dividends declared toName of 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 ofthe reporting period the reporting period

TKL 25.00 4855608.93 13446820.90 332058762.84

8.1.3 Main financial information of significant non-wholly owned subsidiaries

Name of 30 June 2025

subsidiary Current assets Non-current Total assets Current Non-currentassets liabilities liabilities Total liabilities

TKL 1166694495.79 1051694069.97 2218388565.76 491665799.71 398487714.70 890153514.41

(Continued)

Name of 1 January 2025

subsidiary Current assets Non-currentassets Total assets

Current Non-current

liabilities liabilities Total liabilities

TKL 1228298524.91 1154739765.97 2383038290.88 624433770.65 396004620.97 1020438391.62

(Continued)

Reporting period

Name of subsidiary

Revenue Net profit/(loss) Total comprehensive Net cash flows fromincome operating activities

TKL 608398533.13 19422435.70 -22076764.62

(Continued)

The same period of last year

Name of subsidiary

Revenue Net profit/(loss) Total comprehensive Net cash flows fromincome operating activities

TKL 736700275.24 46128800.78 18948235.38

8.2 Interests in Subsidiaries

8.2.1 Summarized financial information of individually immaterial joint ventures and

associates

Item 30 June 2025 1 January 2025

Associates:

Total Book Value of investments 9800000.00 0.00

The following aggregate amounts are presented based

on the shareholding ratio (%)

Net profits -266157.13 0.00

Other comprehensive income 0.00 0.00

Total comprehensive income -266157.13 0.00

9. GOVERNMENT GRANTS

Item in P&L statemen Reporting period The same period of last year

Other earnings 1727050.00 909068.05

Total 1727050.00 909068.05

10. RISK RELATED TO FINANCIAL INSTRUMENTS

117Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

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

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

118Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

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

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

119Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

CNY are listed below:

Items 30 June 2025 1 January 2025

Cash and cash equivalent 139181269.06 112054855.83

Accounts receivable 129554271.11 203496159.10

Other receivables 1933175.71 609593.63

Short-term loan 35793000.00 0.00

Accounts payable 55124416.30 46143775.01

Other payables 1118125.62 1274139.73

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.

11.1 Assets and Liabilities Measured at Fair Value as at 30 June 2025

Fair value at 30 June 2025

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

Others

Total liabilities measured at fair value on a

recurring basis

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.

120Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

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

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

TsannKuen Japan 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 oftransaction Reporting period

Approval trade Whether exceed Same period of last

credit trade credit or not year

Thermaster

Electronic Purchase of goods 12327823.19 35000000.00 No 16417697.76

(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 1662803.05 1241109.47

12.5.2 Management remuneration

Currency: Ten thousand yuan

121Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Item Reporting period Same period of last year

Key management personnel compensation 208.20 210.59

12.5.3 Other related party transactions

Related parties Nature of thetransaction(s) Reporting period Same period of last year

TsannKuen Japan Co. Ltd. Accept labor service 735529.89 686252.07

Total 735529.89 686252.07

12.6 Receivables and Payables with Related Parties

12.6.1 Receivables

30 June 2025 1 January 2025

Items

Book balance Bad debt provision Book balance Bad debtprovision

Accounts receivable

STAR COMGISTIC CAPITAL CO. LTD. 364979.43 950914.62

Total 364979.43 950914.62

12.6.2 Payables

Items 30 June 2025 1 January 2025

Accounts payable

Thermaster Electronic (Xiamen) Ltd. 7288976.42 6936867.52

Total 7288976.42 6936867.52

13. COMMITMENTS AND CONTINGENCIES

13.1 Significant Commitments

As of June 30 2025 the Company has no significant commitments to disclose.

13.2 Contingencie

As of 30th June 2025 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 2025 1 January 2025

Within 1 year 323501.01 117163.04

Including: 1 – 90 days 222811.18 102845.83

122Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Aging 30 June 2025 1 January 2025

91 – 180 days 0.00 513.00

181 – 270 days 100176.83 13804.21

271 – 365 days 513.00

1-2 years 171.00 40.24

2-3 years 20000.00 20000.00

Over 3 years 125418.08 125418.08

ncluding: 3-4 years 0.00 9677.56

4-5 years 120418.08 110740.52

Over 5 years 5000.00 5000.00

Subtotal 469090.09 262621.36

Less: Provision for bad debt 47421.34 60840.92

Total 421668.75 201780.44

15.1.2 Accounts receivable by bad debt provision method

30 June 2025

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 469090.09 100.00 47421.34 10.11 421668.75

Including: Portfolio by age 249443.91 53.18 47421.34 19.01 202022.57

Portfolio by related parties 219646.18 46.82 0.00 0.00 219646.18

Total 469090.09 100.00 47421.34 10.11 421668.75

(Continued)

1 January 2025

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 262621.36 100.00 60840.92 23.17 201780.44

Including: Portfolio by age 262621.36 100.00 60840.92 23.17 201780.44

Portfolio by related parties

Total 262621.36 100.00 60840.92 23.17 201780.44

Specific instructions for provision for bad debts: accounts receivable with bad debt provision recognised

collectively by aging

30 June 2025

Items

Book balance Provision for bad debt Provision ratio (%)

Not overdue 200000.00 1000.00 0.50

Overdue 1 – 30 days 3165.00 142.43 4.50

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 46278.91 46278.91 100.00

123Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

30 June 2025

Items

Book balance Provision for bad debt Provision ratio (%)

Total 249443.91 47421.34

(Continued)

1 January 2025

Items

Book balance Provision for bad debt Provision ratio (%)

Not overdue 201566.83 1007.83 0.50

Overdue 1 – 30 days 1279.00 57.56 4.50

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 59775.53 59775.53 100.00

Total 262621.36 60840.92

For the criteria for recognition of bad debts and the description of bad debt provision by combination

please refer to "III.9" in this note.

15.1.3 Changes in Provision for bad debts

Changes during the reporting period

Category 1 January 2025

Provision Recovery or

30 June 2025

reversal Write-off Others

Provision for bad debt

recognised collectively 60840.92 886.14 14305.72 0.00 0.00 47421.34

Total 60840.92 886.14 14305.72 0.00 0.00 47421.34

15.1.4 Top five closing balances by entity

Proportion of the balance

Entity Balance at 30 Contract Assets Total to the total accountsname June 2025 at 30 June 2025 receivable and Contract Provision for bad debt

Assets (%)

No. 1 219646.18 219646.18 46.82

No. 2 100107.83 100107.83 21.34 607.83

No. 3 100000.00 100000.00 21.32 500.00

No. 4 20753.00 20753.00 4.42 20753.00

No. 5 20418.08 20418.08 4.35 20418.08

Total 460925.09 460925.09 98.25 42278.91

15.2 Other Receivables

15.2.1 Other receivables by category

Items 30 June 2025 1 January 2025

Interest receivable

Dividend receivable

Other receivables 6112753.11 6555310.24

Total 6112753.11 6555310.24

15.2.2 Other receivables

124Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

15.2.2.1 Other receivables by aging

Aging 30 June 2025 1 January 2025

Within 1 year 6150265.08 6472526.44

Including: 1 – 90 days 5563156.32 6435216.14

91 – 180 days 396751.58 37310.30

181 – 270 days 185208.88 0.00

271 – 365 days 5148.30 0.00

1-2 years 110000.00 115500.00

2-3 years 0.00 30500.00

Over 3 years 10000.00 0.00

ncluding: 3-4 years 10000.00 0.00

4-5 years 0.00 0.00

Over 5 years 0.00 0.00

Subtotal 6270265.08 6618526.44

Less: Provision for bad debt 157511.97 63216.20

Total 6112753.11 6555310.24

15.2.2.2 Other receivables by nature

Nature 30 June 2025 1 January 2025

Other current balances 3795136.69 3036610.37

Deposit 61000.00 87000.00

Due from related parties 2414128.39 3494916.07

Subtotal 6270265.08 6618526.44

Less: bad debt provision 157511.97 63216.20

Total 6112753.11 6555310.24

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 2025 63216.20 63216.20

On January 1 2025 Other receivable

carrying amount on the book —— —— —— ——

transfer to 2nd stage 0.00

transfer to 3rd stage 0.00

reverse to 2nd stage 0.00

reverse to 1st stage 0.00

Accrued 94295.77 94295.77

Reversed 0.00

Recollected 0.00

Written off 0.00

Others 0.00

Balance on June 30 2025 157511.97 0.00 0.00 157511.97

15.2.2.4 Provision for bad debts charged off reversed or recovered during the period

Changes during the reporting period

Category 1 January 2025 30 June

Provision Recovery or Write-off Others 2025

125Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

reversal

Provision for bad debt recognised

individually 0.00

Accounts receivable with provision for

bad debt recognised collectively 63216.20 94295.77 0.00 157511.97

Total 63216.20 94295.77 0.00 0.00 0.00 157511.97

15.2.2.5 Other receivables write-off during the reporting period

Proportion of the

Balance as of 30 balance to the total Allowance forEntity name Nature June 2025 Aging other receivables bad debts as at

(%) 30 June 2025

Xiamen Jingxin Yongzhuo Trading Co. Accounts

Ltd. Receivable 924911.75 Within 1 year 14.75 83159.23

State Grid Fujian Electric Power Co. Accounts Within 90

Ltd. Xiamen Power Supply Company Receivable 188760.13 days 3.01

Tsann Kuen (CHINA) Enterprise Co. Accounts 120-270 days

Ltd.(Alipay account) Receivable 110000.00 Over 1 year 1.75 70166.80

Tmall supply and marketing platform Deposit 50000.00 Over 1 year 0.80

Tesla Automobile Sales and Service Accounts

(Xiamen) Co. Ltd. Receivable 21339.88

Within 30

days 0.34

Total 1295011.76 20.65 153326.03

15.3 Long-term Equity Investments

15.3.1 Situation of long-term equity investments

30 June 2025 1 January 2025

Items Provision for Provision for

Book impairment Carrying amount Book balance impairment Carrying amount

balance

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

Decrease Provision forIncrease during impairment Provision for

Investees 1 January 2025 the reporting during thereporting 30 June 2025 during the

impairment

period reporting at 30 Juneperiod period 2025

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 1648487.96 1270757.64 1419149.09 968090.70

Other activities 31676528.08 19458713.27 28680172.61 17192678.24

Total 33325016.04 20729470.91 30099321.70 18160768.94

126Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

15.5 Investment Income

Items The Reporting period The same period of last year

Investment income from long-term equity investments under equity

method 40989673.41 50748305.69

Total 40989673.41 50748305.69

16. SUPPLEMENTARY INFORMATION

16.1 Extraordinary Gains or Losses

Items Amount Description

Losses on disposal of non-current assets (inclusive of impairment allowance write-offs) 1265588.90

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 1808128.78

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 190396.37

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 605362.18

Other extraordinary gains/(losses) defined

127Tsann Kuen (China) Enterprise Co. Ltd. Notes to the financial statements

Items Amount Description

Less: Income tax effects 582940.72

Non-controlling interests effects (after tax) 807235.01

Total 2479300.50

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

shareholders 1.44 0.09 0.09

Net profit attributable to ordinary

shareholders after extraordinary gains 1.21 0.07 0.07

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: 7 August 2025

128