CHINA TAISAN TECH. GROUP HOLDINGS LTD. (Company Registration Number: 200711863D)
China Taisan Technology Group Holdings Limited (the "Company") has received the following queries from the Singapore Exchange Securities Trading Limited ("SGX-ST") on its unaudited financial results for the fourth quarter ended 31 December 2015 ("4Q15"):
SGX Query 1
Under paragraph 8 of the Announcement, the Company announced that there were "written off of VAT amounting to RMB110 million" and that "the written off of VAT is due to the company have no enough sales to net off against the current VAT, and the impairment of property, plant and equipment is due to loss making for performance fabric and low utilization rate for the equipment".
Please provide further disclosure on why the VAT to be written off is so significant, when was VAT paid (including which financial years) and the nature of the transactions for which the VAT was paid.
Com pany's response
The Company wishes to clarify as follows:
Generally speaking, the Company can offset against output tax of its domestic sales with its input VAT on purchase, if such input VAT can be verified and declared within 180 days upon the invoices' issuance date.
As at 31 December 2015, the balance of input VAT amounts of RMB 119 million refer breakdown below:
Input/(output) VAT | Balance as at end of period | |
Beginning of FY2015 (before VAT output of RMB 3,132,000) | 81,612,278.15 | |
1Q15 | 34,852,422.41 | 116,464,700.56 |
2Q15 | 2,245,955.17 | 118,710,655.73 |
3Q15 | 1,267,183.17 | 119,977,838.90 |
4Q15 | (465,314.11) | 119,512,524.79 |
End of FY2015 before impairment | 119,512,524.79 |
The significant balance is mainly resulted from the additional purchase for the replenishment goods due to fabric quality issue in FY2014.
The management of the Company have been submitting the supplier invoices to local tax authority for VAT claim. Due to lack of enough sales to net off against the current VAT, the management did not submit bulk of the supplier invoices to local tax authority for scanning into the system until those supplier invoices expired. Based on the 180 days rule (took into account of 6 months back from end of March 2016), the management reviewed all the supplier invoices and the works on the submission for the VAT claim from the beginning and the first three quarters of the year 2015 and estimated an impairment on VAT recoverable amounted to RMB 110 million as at end of FY2015.
Lin Wen Chang
Chief Executive Officer 5 April 2016
China Taisan Technology Group Holdings Ltd. issued this content on 05 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 05 April 2016 12:21:09 UTC
Original Document: http://www.china-taisan.com/attachment/201604052014251789512934_en.pdf
