SHENZHEN TELLUS HOLDING CO., LTD
SEMI-ANNUAL REPORT 2016
August 2016
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Shenzhen Tellus Holding Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents.
All directors are attended the Board Meeting for report deliberation.
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either.
Lv Hang, principal of the Company, Yang Jianping, person in charger of accounting works and Ke Wensheng, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of Semi-Annual Report 2016 is authentic, accurate and complete.
Content
Section I Important Notice, Contents and Paraphrase .................................................................. 2 Section II Company Profile ............................................................................................................... 5 Section III Accounting data and summary of finnaical indexes .................................................... 7 Section IV Report of the Board of Directors ................................................................................... 9 Section V Important Events ............................................................................................................ 24 Section VI Changes in shares and particular about shareholders ............................................... 38 Section VII PreferredStock………………………………………………………………………42 Section VIII Directors, Supervisors and Senior Executives ....................................................... 43 Section IX Financial Report ............................................................................................................ 44 Section X Documents Available for Reference ........................................................................... 158
Paraphrase
||||
|-|-|-|
|Items|Refers to|Definition|
|CSRC|Refers to|China Securities Regulatory Commission|
|SZ Exchange|Refers to|Shenzhen Stock Exchange|
|||Shenzhen Branch of China Securities Depository & Clearing|
|Shenzhen Branch of SD&C|Refers to||
|||Corporation Limited|
|Company, the Company, our Company, Tellus|||
||Refers to|Shenzhen Tellus Holding Co., Ltd.|
|Group|||
|Reporting period, Current Period, the Year|Refers to|January – June of 2016|
|Auto Industrial and Trading Company|Refers to|Shenzhen Auto Industry and Trade Corporation|
|Zhongtian Company|Refers to|Shenzhen Zhongtian Industrial Co., Ltd.|
|Zung Fu Company|Refers to|Shenzhen Zung Fu Tellus Auto Service Co., Ltd.|
|||Shenzhen SD Huari Automobile Enterprise Co.Limited and Shenzhen|
|Huari Company|Refers to||
|||Huari Toyota Auto-Sales Service Co., Ltd.|

Section II Company profile
I. Company Profile
|||||
|-|-|-|-|
|Short form for share|Tellus-A, Tellus-B|Code for share|000025 200025|
|Listing stock exchange|Shenzhen Stock Exchange|||
|Chinese name of the Company|深圳市特力(集团)股份有限公司|||
|Abbr. of Chinese name of the||||
||深特力|||
|Company(if applicable)||||
|English name of the||||
||Shenzhen Tellus Holding Co.,Ltd|||
|Company(if applicable)||||
|Legal Representative|Lv Hang|||

II. Contact person and ways
||||
|-|-|-|
||Secretary of the Board|Rep. of securities affairs|
|Name|Qi Peng|Sun Bolun|
||15/F, Zhonghe Building, Shennan Middle|15/F, Zhonghe Building, Shennan Middle|
|Contact adds.|||
||Road, Futian District, Shenzhen|Road, Futian District, Shenzhen|
|Tel.|(0755)83989378|(0755)83989339|
|Fax.|(0755)83989386|(0755)83989386|
|E-mail|ir@tellus.cn|ir@tellus.cn|

III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not
□ Applicable√ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period, found more details in Annual Report 2015
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable√ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2015
3. Registration changes of the Company
Whether registration has changed in reporting period or not
□ Applicable√ Not applicable
Date/place for registration of the Company, registration number for enterprise legal license, number of taxation registration and organization code have no change in reporting period, found more details in Annual Report 2015.
Section III. Accounting data and summary of financial indexes I. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not
□Yes√ No
|||||
|-|-|-|-|
||||Increase/decrease in this|
||Current period|Same period of last year||
||||report y-o-y (%)|
|Operating revenue (RMB)|157,147,166.48|158,491,781.84|-0.85%|
|Net profit attributable to shareholders of|17,747,952.63|7,650,356.02||
||||131.99%|
|the listed company(RMB)||||
|Net profit attributable to shareholders of||||
|the listed company after deducting|15,449,772.01|7,516,539.71|105.54%|
|non-recurring gains and losses(RMB)||||
|Net cash flow arising from operating|23,971,506.36|33,862,882.70||
||||-29.21%|
|activities(RMB)||||
|Basic earnings per share (RMB/Share)|0.0597|0.0296|101.69%|
|Diluted earnings per share (RMB/Share)|0.0597|0.0296|101.69%|
|Weighted average ROE|2.02%|1.49%|0.53%|
||||Increase/decrease in this|
||End of current period|End of last period|report-end over that of last|
||||period-end (%)|
|Total assets (RMB)|1,167,329,464.83|1,168,667,927.49|-0.11%|
|Net assets attributable to shareholder of|885,917,004.95|868,169,052.32||
||||2.04%|
|listed company(RMB)||||

II. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√ Not applicable
The Company has no difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) in reporting period
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√ Not applicable
The Company has no difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles) in reporting period
III. Items and amounts of extraordinary profit (gains)/loss
√Applicable □Not applicable
In RMB
||||
|-|-|-|
|Item|Amount|Note|
|Gains/losses from the disposal of non-current asset (including the|26,866.53||
|write-off that accrued for impairment of assets)|||
|Profit and loss of assets delegation on others’ investment or|2,291,789.05|Earnings from financial products|
|management|||
|Other non-operating income and expenditure except for the|12,649.53||
|aforementioned items|||
|Impact on minority shareholders’ equity (post-tax)|33,124.49||
|Total|2,298,180.62|--|

Concerning the extraordinary profit (gain)/loss defined byQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable√ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of extraordinary profit (gain)/loss inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss
Section IV. Report of the Board of Directors
I. Introduction
The first half year of 2016, under the background of macro-economic environment continued depression, Tellus achieved a favorable operation results by means of innovation thinking and open-sourcing and potential-tapping, total profit and net profit attributable to parent company have a major growth from a year earlier. In first half year of 2016, operation revenue achived 157.15 million Yuan with 1.34 million Yuan down compared with lastperiod’s 158.49 million Yuan, a0.85% declined; total profit reached 18.57 million Yuan with 10.06 million Yuan growth compared with lastperiod’s 8.51 million Yuan, a growth of118.21%; the net profit attributable to parent company reached 17.75 million Yuan with 10.10 million Yuan growth compared with lastperiod’s 7.65 million Yuan, a growth of131.99%. Main reasons of the above mentioned growth are as: the rental income and investment income increased,the financial expenses declined.
On current profit of main business increased substantially, transition work of Tellus was carried out with the utmost propriety and promoted actively.During the period, as entered the retail market of jewelry industry, the Anhui Tellus Star Jewelry Investment Co., Ltd. was registered; the regional sourcing platform for the jewelry market is working on a proactively way; as for the physical platform of jewelry, 1st pahse of Tellus Shuibei Jewelry Building is in its stage of inviting outside investments. Tullus will continue to expand way of thinking in second half year, to maintain steady development in order to completed vary economic indicators for the whole year.
II. Main business analysis
Y-o-y changes of main financial data
In RMB
||||||
|-|-|-|-|-|
||Current period|Same period of last year|Y-o-y increase/decrease|Reasons for changes|
|Operation revenue|157,147,166.48|158,491,781.84|-0.85%||
|Operation cost|112,822,380.88|116,939,503.91|-3.52%||
||7,399,760.23|9,520,419.70||Owing to the changes of|
|||||calculation caliber,|
|Sales expenses|||-22.27%|a fraction of sales|
|||||expenses re-classify to|
|||||operation costs|
||20,805,027.12|16,780,916.30||The remuneration|
|Administrative expenses|||23.98%|expenses rise resulted by|
|||||the year-end awards|

||||||
|-|-|-|-|-|
|||||accrual by month|
||289,000.78|4,529,677.17||The interest expenditure|
|||||declined from a year|
|Financial cost|||-93.62%||
|||||earlier due to loans|
|||||payment|
||597,869.12|1,200,717.31||Current income tax|
|||||declined due to the profit|
|||||decreased from a year|
|||||earlier by subsidiary|
|||||Zhongtain Company and|
|||||Auto Industrial and|
|||||Trading Company, profit|
|Income tax expense|||-50.21%||
|||||growth resulted by the|
|||||increased of profit from|
|||||parent company, and|
|||||there was a undistributed|
|||||deficit for previous,|
|||||which shows no impact|
|||||on current income tax|
||23,971,506.36|33,862,882.70||Operational net cash|
|||||inflow increased resulted|
|||||by the selling of stock|
|Net cash flow arising|||||
||||-29.21%|vehicles at year-end by|
|from operation activities|||||
|||||Huari Toyota Company|
|||||at same period of last|
|||||year|
|Net cash flow arising|24,320,840.63|-332,753,974.96||More inflows on the|
|from investment||||bank capital preservation|
|activities||||products in the Period|
||-16,495,591.67|350,100,271.84||Borrowing interests paid|
|||||to SDG in the Period; at|
|Net cash flow arising||||same period of last year,|
||||-104.71%||
|from financing activities||||target private placement|
|||||made the cash inflow|
|||||increased|
|Net increase of cash and|31,796,882.13|51,209,174.82|||
||||-37.91%||
|cash equivalent|||||
|||||Earnings from financial|
|||||products increased and|
|Investment earnings|5,100,570.96|624,390.10|716.89%|affiliated company Zung|
|||||Fu Company earnings in|
|||||the Period|

Major changes on profit composition or profit resources in reporting period
□ Applicable√ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
The future development and planning extended to reporting period that published in disclosure documents as prospectus, private placing memorandum and recapitalize statement
□ Applicable√ Not applicable
No future development and planning extended to reporting period that published in disclosure documents as prospectus, private placing memorandum and recapitalize statement
Review on the previous business plan and its progress during reporting period
The first half year of 2016, under the background of macro-economic environment continued depression, Tellus achieved a favorable operation results by means of innovation thinking and open-sourcing and potential-tapping. Revenue of property leasing have a sustainable growth, parts of the enterprise with deficits for a long-time have reducing losses, total profit and net profit attributable to parent company have a major growth from a year earlier. III. Constitution of main business
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||Increase or|Increase or|Increase or|
|||||decrease of|decrease of|decrease of gross|
||Operating||||||
|||Operating cost|Gross profit ratio|operating revenue|operating cost|profit ratio over|
||revenue||||||
|||||over same period|over same period|same period of|
|||||of last year|of last year|last year|
|According to industries|||||||
|Auto sales|67,525,711.38|66,364,064.95|1.72%|-13.40%|-13.38%|-0.02%|
|Auto inspection|||||||
|and maintenance|||||||
||26,625,898.24|20,799,253.76|21.88%|2.52%|8.95%|-4.61%|
|and accessories|||||||
|sales|||||||
|Rental and|||||||
||59,769,842.57|24,707,780.69|58.66%|17.60%|24.55%|-2.31%|
|service|||||||
|According to products|||||||
|Auto sales|67,525,711.38|66,364,064.95|1.72%|-13.40%|-13.38%|-0.02%|
|Auto inspection|||||||
|and maintenance|||||||
||26,625,898.24|20,799,253.76|21.88%|2.52%|8.95%|-4.61%|
|and accessories|||||||
|sales|||||||
|Rental and|||||||
||59,769,842.57|24,707,780.69|58.66%|17.60%|24.55%|-2.31%|
|service|||||||
|According to region|||||||
|Shenzhen|153,921,452.19|111,871,099.40|27.32%|-0.55%|-3.18%|1.98%|

IV. Core competitive-ness analysis
Shenzhen is the main gathering place of China's jewelry industry, Shuibei is the core gathering area of Shenzhen jewelry industry, the company holds a large number of properties in Shuibei area, and has provided various stable services for many leading enterprises in jewelry industry in Shenzhen and established good cooperative relations with many jewelry enterprises over the years; the project of Tellus Jimeng Gold Jewelry Industrial Park located in Shuibei core area has been listed as one of the 11 pilot projects in the transformation of old industrial zones of Shenzhen City, the company shall become the largest owner of this industrial park through its wholly owned and joint owned and associated enterprises. Currently all renovation projects in the industrial park have almost been completed and will be put into use in 2016. The company can make use of leading enterprises in jewelry industry that have strategic partnership with the company to gather the jewelry enterprises and attract talents to enter the industrial park.
As a state-owned holding listed company, the company has good market credibility, and possesses diversified and low-cost financing channels, by virtue of the identity of the third party jewelry operator, attracts distributors and wholesalers by providing resources, financial services and capital operation to the jewelry manufacturers, and builds regional channel platform and retail-end platform. Eventually created an ecological circle for Tellus jewelry industry, therefore, the Company integration-systematization industry chain within the ecological circle by gathering manufacturers, distributors, and terminal retailer resources on behalf of the comprehensive service operators of jewelry industry, and bringing a preliminary influence on theindustry’s upstream and downstream. V. Investment analysis
1. Equity investment outside
(1) Investment outside
□ Applicable√ Not applicable
The Company has no investment outside in the Period
(2) Holding equity of financial enterprise
□ Applicable√ Not applicable
The Company has no equity of financial enterprise held in the Period
(3) Securities investment
□ Applicable√ Not applicable
The Company has no securities investment in the Period
(4)Explanation on equity of other listed company held
□ Applicable√ Not applicable
The Company had no equity of other listed company held in Period.
2. Trust financing, investment of derivatives and entrustment loan
(1) Trust financing
√ Applicable□ Not applicable
In ten thousand Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Amount|||
||||||||||of reserve|||
|||||||||Principal|for|||
|||Whether|||||||||Actual|
||Related|||Trust|||Criterial|actually|devaluati|Anticipat||
|||related|||||||||gains/loss|
|Name|relationsh||Type|financing|Start date|End date|for fixing|collected|on of|ed||
|||trade or|||||||||es in|
||ip|||amount|||reward|in the|withdrawi|income||
|||not|||||||||period|
|||||||||Period|ng (if|||
||||||||||applicable|||
||||||||||)|||
|Shenzhen||||||||||||
|Huali|||||||Maturity|||||
||||Preservati|||||||||
|Branch of|||||||of|||||
||||on and||2015-10-|2016-01-||||||
|China|N/A|No||3,000|||principal|3,000|0|26.3|26.3|
||||income-g||16|16||||||
|Everbrigh|||||||and|||||
||||uarantee|||||||||
|t Bank|||||||interest|||||
|Co., Ltd.||||||||||||
|Shenzhen||||||||||||
||||||||Maturity|||||
|Tianan||||||||||||
||||||||of|||||
|Branch of|||Floating||2015-10-|2016-03-||||||
||N/A|No||3,000|||principal|3,000|0|56.61|56.61|
|Industrial|||proceeds||15|31||||||
||||||||and|||||
|Bank Co.,||||||||||||
||||||||interest|||||
|Ltd.||||||||||||
|Shenzhen||||||||||||
||||||||Maturity|||||
|Tianan||||||||||||
||||||||of|||||
|Branch of|||Floating||2015-10-|2016-04-||||||
||N/A|No||5,000|||principal|5,000|0|92.05|92.05|
|Industrial|||proceeds||29|14||||||
||||||||and|||||
|Bank Co.,||||||||||||
||||||||interest|||||
|Ltd.||||||||||||
|Shenzhen|||||||Maturity|||||
|Branch of|||||||of|||||
||||Floating||2015-11-|2016-02-||||||
|China|N/A|No||3,000|||principal|3,000|0|24.21|24.21|
||||proceeds||23|16||||||
|CITIC|||||||and|||||
|Bank|||||||interest|||||

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Corporati||||||||||||
|on||||||||||||
|Limited||||||||||||
|Shenzhen||||||||||||
|Huali||||||||||||
||||Preservati|||||||||
|Branch of||||||||||||
||||on and||2015-11-|2016-2-1|Contract|||||
|China|N/A|No||3,000||||3,000|0|24.03|24.03|
||||income-g||13|3|assumpsit|||||
|Everbrigh||||||||||||
||||uarantee|||||||||
|t Bank||||||||||||
|Co., Ltd.||||||||||||
|Sales||||||||||||
||||||||Maturity|||||
|departme||||||||||||
||||||||of|||||
|nt of|||Floating||2015-11-|Due on||||Uncertain||
||N/A|No||1,000|||principal|0|0||0|
|Shenzhen|||proceeds||18|demand||||ty||
||||||||and|||||
|Branch of||||||||||||
||||||||interest|||||
|JSBC||||||||||||
|Sales||||||||||||
||||||||Maturity|||||
|departme||||||||||||
||||||||of|||||
|nt of|||Floating||2015-12-|Due on||||Uncertain||
||N/A|No||3,000|||principal|1,000|0||11.93|
|Shenzhen|||proceeds||18|demand||||ty||
||||||||and|||||
|Branch of||||||||||||
||||||||interest|||||
|JSBC||||||||||||
|Shenzhen||||||||||||
|Huali|||||||Maturity|||||
|Branch of|||||||of|||||
||||Floating||2016-01-|2016-04-||||||
|China|N/A|No||3,000|||principal|3,000|0|23.65|23.65|
||||proceeds||18|18||||||
|Everbrigh|||||||and|||||
|t Bank|||||||interest|||||
|Co., Ltd.||||||||||||
|Shenzhen||||||||||||
||||||||Maturity|||||
|Branch of||||||||||||
||||||||of|||||
|China|||Floating||2016-02-|2016-05-||||||
||N/A|No||3,000|||principal|3,000|0|23.65|23.65|
|Everbrigh|||proceeds||15|15||||||
||||||||and|||||
|t Bank||||||||||||
||||||||interest|||||
|Co., LTd.||||||||||||
|Shenzhen||||||||||||
|Branch of|||||||Maturity|||||
|China|||||||of|||||
||||Floating||2016-02-|2016-06-||||||
|CITIC|N/A|No||3,000|||principal|3,000|0|24.32|24.32|
||||proceeds||26|02||||||
|Bank|||||||and|||||
|Corporati|||||||interest|||||
|on||||||||||||

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Limited||||||||||||
|Shenzhen||||||||||||
||||||||Maturity|||||
|Tianan||||||||||||
||||||||of|||||
|Branch of|||Floating||2016-03-|2016-09-||||||
||N/A|No||3,000|||principal|0|0|49.71|0|
|Industrial|||proceeds||31|14||||||
||||||||and|||||
|Bank Co.,||||||||||||
||||||||interest|||||
|Ltd.||||||||||||
|Shenzhen||||||||||||
|Huali|||||||Maturity|||||
||||Preservati|||||||||
|Branch of|||||||of|||||
||||on and||2016-05-|2016-08-||||||
|China|N/A|No||2,000|||principal|0|0|15.75|0|
||||income-g||20|20||||||
|Everbrigh|||||||and|||||
||||uarantee|||||||||
|t Bank|||||||interest|||||
|Co., Ltd.||||||||||||
|Shenzhen||||||||||||
|Huali|||||||Maturity|||||
||||Preservati|||||||||
|Branch of|||||||of|||||
||||on and||2016-05-|2016-07-||||||
|China|N/A|No||2,000|||principal|0|0|10.02|0|
||||income-g||20|20||||||
|Everbrigh|||||||and|||||
||||uarantee|||||||||
|t Bank|||||||interest|||||
|Co., Ltd.||||||||||||
|Shenzhen||||||||||||
|Huali|||||||Maturity|||||
||||Preservati|||||||||
|Branch of|||||||of|||||
||||on and||2016-05-|2016-06-||||||
|China|N/A|No||2,000|||principal|2,000|0|4.58|4.58|
||||income-g||20|20||||||
|Everbrigh|||||||and|||||
||||uarantee|||||||||
|t Bank|||||||interest|||||
|Co., Ltd.||||||||||||
|Shenzhen||||||||||||
||||||||Maturity|||||
|Tianan||||||||||||
||||||||of|||||
|Branch of|||Floating||2016-05-|2016-07-||||||
||N/A|No||3,000|||principal|0|0|14.05|0|
|Industrial|||proceeds||20|20||||||
||||||||and|||||
|Bank Co.,||||||||||||
||||||||interest|||||
|Ltd.||||||||||||
|Sales||||||||||||
||||||||Maturity|||||
|departme||||||||||||
||||||||of|||||
|nt of|||Floating||2016-05-|||||Uncertain||
||N/A|No||2,000||T+0|principal|0|0||0|
|Shenzhen|||proceeds||23|||||ty||
||||||||and|||||
|Branch of||||||||||||
||||||||interest|||||
|JSBC||||||||||||
|Sales|||Preservati||2016-06-|2016-09-|Maturity|||||
||N/A|No||1,000||||0|0|8.05|0|
|departme|||on and||17|23|of|||||

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|nt of|||income-g||||principal|||||
|Shenzhen|||uarantee||||and|||||
|Branch of|||||||interest|||||
|China||||||||||||
|CITIC||||||||||||
|Bank||||||||||||
|Corporati||||||||||||
|on||||||||||||
|Limited||||||||||||
|Shenzhen||||||||||||
||||||||Maturity|||||
|Jingtian|||Preservati|||||||||
||||||||of|||||
|Branch|||on and||2016-06-|2016-09-||||||
||N/A|No||3,000|||principal|0|0|24.16|0|
|of China|||income-g||17|23||||||
||||||||and|||||
|CITIC|||uarantee|||||||||
||||||||interest|||||
|Co.,Ltd.||||||||||||
|Total||||48,000|--|--|--|29,000||421.14|311.33|
|Capital resource||||Idle fund-rasing and parts of the owned funds||||||||
|Principal uncollected for overdue and||||||||||||
|||||0||||||||
|accumulated earninsg||||||||||||
|Lawsuit involved (if applicable)||||Not applicable||||||||
|Disclosure date for approval from the||||||||||||
|||||2016-04-29||||||||
|Board for trust financing (if applicable)||||||||||||
|Disclosure date for approval from board of||||||||||||
|shareholders for trust financing (if||||2016-05-21||||||||
|applicable)||||||||||||

(2) Investment of derivatives
□ Applicable√ Not applicable
The Company has no derivatives investment in the Period
(3) Entrustment loan
□ Applicable√ Not applicable
The Company has no entrustment loan in the Period
3. Application of raised proceeds
√ Applicable□ Not applicable
(1)Overall application of raised proceeds
√ Applicable□ Not applicable
In ten thousand Yuan
|||
|-|-|
|Total raised capitals|64,680|

|||
|-|-|
|Total raised capital invested in reporting period|3,563.95|
|Total accumulative raised capital invested|43,287.39|
|Total raised fund for changes its usage area in report||
||0|
|period||
|Total accumulative raised fund for changes its usage||
||0|
|area||
|Proportion of total accumulative raised fund for||
||0.00%|
|changes its usage area||
|Explanation on general usage of raised capital||
|According to the ―Proposal of the company’s plan for non-public offering of shares‖ and other related proposals deliberated and||
|approved by the company’s 19th extraordinary meeting of the seventh board of directors and the 4th extraordinary general meeting||
|of 2014, and the ―Approval for non-public offering of shares of Shenzhen Test Rite (Group) Co., Ltd.‖ (CSRC license No.||
|[2015]173) approved by China Securities Regulatory Commission, the Company has adopted non-public offering of shares to issue||
|RMB ordinary shares (A shares) of 77 million shares, and the issue price is 8.40 yuan /share. The total raised funds of this issuance||
|are 646,800,000 Yuan, the net amount of raised funds is 633,520,000 yuan after deducting the issuance costs of 13,280,000 yuan.||
|On March 12, 2015, Ruihua Certified Public Accountants (special general partnership) has verified the capital of this issuance and||
|issued "Capital Verification Report" RHYZ No. [2015]48330003. During the reporting period, the Company has totally put into||
|raised funds of 35,639,500 Yuan for project of the Tellus Shuibei Jewelry Building. Accumulated fund-rasing of 432,873,900||
|Yuan invested up to period-end, including 241373900 Yuan invested for the Tellus Shuibei Jewelry Building and 191,500,000 Yuan||
|used to supplement working capital.||

(2) Situation of committed project of raised proceeds
√Applicable□Not applicable
In 10 thousand Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Projects|Total|||||||||
||||Total||||||||
||||||Amount|Investme|||||
||||investme||||||||
||changed|committe|||||||||
||||||of|nt|Predicted|||Project|
||||nt after||||||||
|Committed investment|or not|d||Amount|accumula|program|serviceab|Profit|Reach the|feasibility|
||||adjustme||||||||
|||||invested|ted|till the|le|realized|predicted|was|
|projects &investment|(includin|investme|nt (1)||||||||
|||||in this|investme|period-en|condition|in this|interest or|changed|
|of raised fund|g|nt of||period|nt till the|d|date of|year|not|hugely or|
||changed|raised|||period-en|(3)=(2)/(1|project|||not|
||||||d (2)|)|||||
||partially)|capitals|||||||||
|Investment project commitment|||||||||||
|Tellus Shuibei Jewelry|||||||||||
||No|26,000|26,000|3,563.95|24,137.39|92.84%||0|No|No|
|Building|||||||||||
|Liquid assets|||||||||||
|supplementation of the|No|37,352|37,352|0|19,150|51.27%||0|No|No|
|Company|||||||||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Subtotal of|||||||||||
||--|63,352|63,352|3,563.95|43,287.39|--|--||--|--|
|commitment projects|||||||||||
|Investment orientation for fund arising out of plan|||||||||||
|N/A|||||||||||
|Total|--|63,352|63,352|3,563.95|43,287.39|--|--|0|--|--|
||1. Tellus Shuibei Jewelry Building has currently completed the main construction, and expected to be put||||||||||
||into use at end of 2016. 2. In the investment projects of raised funds for supplementing the company's||||||||||
||working capital: (1) Repayment of bank loans of 191,500,000 yuan has been completed in the reporting||||||||||
||period. (2) The newly increased renovation costs of Tellus Shuibei project will be put into use as planned||||||||||
||according to the project implementation progress, actual funds are reduced over that of planning. (3)||||||||||
||Jewelry e-commerce business: the jewelry e-commerce business market is highly competitive, payback||||||||||
||period is long, the Company bears a certain operation risks and deficits in business incubation period; there||||||||||
||may bring adverse effects on the Company’s overall performance if investing the jewelry e-commerce||||||||||
||platform according to the original plan under the current market situation, so the Company has decided not||||||||||
||to invested in the project with fund raising. The raised funds in the original plan shall be used for other||||||||||
||projects. (4) Jewelry retail market business: since 2015, affected by the decline of prosperity in jewelry||||||||||
||industry and the raise of property costs, large jewelry retail markets across the country have shrunk the||||||||||
||business and reduced the income and profits, if the company continued to invest large funds into the||||||||||
|Situation about not|jewelry retail market, the business risks would be large, so the Company has planned to reduce the||||||||||
|coming up to schemed|investment scale in single retail market, change to establish the small jewelry retail stores with the help of||||||||||
|progress or expected|their managerial experience and industry resources, accumulate the industry experience, and train the||||||||||
|revenue and the|management team so as to enlarge the investment scale when the industry climate becomes better. (5)||||||||||
|reason(In specific|Jewelry training business: this project has not yet been put into use. The company has started to investigate||||||||||
|project)|some schools in early 2015 and found that there are already many jewelry training schools in Shenzhen||||||||||
||Shuibei area and the market competition is rather intense; at the same time, affected by the decline of||||||||||
||prosperity in jewelry industry, the demand for training business has substantially reduced. If the company||||||||||
||invests in the construction of jewelry training schools, the return on investment is relatively low and the||||||||||
||payback period is long, so the company has decided to suspend the investment plan for this project, and||||||||||
||wait to argue until the business of jewelry service industry goes smoothly and enough resources are||||||||||
||accumulated. The raised funds in the original plan shall be used for other projects. (6) Automobile leasing||||||||||
||business supporting the jewelry market: the project has not yet been put into use. One main reason is that||||||||||
||Shenzhen Municipal Government announced the implementation of car-purchase restriction policy on||||||||||
||December 29, 2014, the car purchase takes two methods, i.e. lottery and bidding, this policy made the||||||||||
||company unable to carry out this business as planned; another reason is that the prosperity of jewelry||||||||||
||industry has declined, the demand for automobile leasing has greatly reduced in jewelry industry of||||||||||
||Shuibei, and the business prospects are influenced, so the company has decided to cancel the investment in||||||||||
||this project. The raised funds in the original plan shall be used for other projects.||||||||||
|Explanation on great|||||||||||
|changes of feasibility|N/A||||||||||
|of project|||||||||||
||Not applicable||||||||||
|Amount, usage and|||||||||||
|progress of using for|||||||||||

|||
|-|-|
|fund raising out of the||
|plan||
|Change of|Not applicable|
|implementation place||
|of investment project||
|of raised capitals||
|Adjustment of|Not applicable|
|implementation way||
|for investment project||
|of raised capitals||
||Applicable|
||On April 27, 2015, the company held the thirtieth interim meeting of the seventh board of directors whichdeliberated and approved the motion about replacing the self-raised funds beforehand invested infundraising project with the raise funds, and agreed the company to replace the self-raised funds of114,162,000 Yuan invested in fundraising project with the raise funds, of which 15.6 million Yuan was usedto replace and supplement the beforehand invested self-raised funds of the company’s circulating funds and98,562,000 Yuan was used to replace and supplement the beforehand invested self-raised funds of TellusShuibei Jewelry Building project. The company’s independent director and sponsor institution haveexpresses their agreement on this matter.|
|Regulation of||
|implementation ways||
|of investment project||
|of raised capitals||
|Temporarily|Not applicable|
|supplement for the||
|current capitals with||
|idle raised capitals||
|Surplus amount and|Not applicable|
|reasons for the||
|implementation of||
|raised capital projects||
||On 28 April 2016, the 4th session of 8th BOD and AGM of 2015 held on 20 May 2016 was deliberated and|
||approved the proposal of purchasing bank financial products with parts of the idle fund-raised and owned|
||capital, agrees that, on the premise that impact no fund-raised projects, the Company and it’s subsidiary to|
||purchasing short-term financial products as cash management with idle fund raise 800 million Yuan at most|
|Use of funds and||
||within one year since the date of proposals approved; Scroll to use money shall be required among the|
|allocation for reserved||
||above mentioned limit; in implementation, the investment balance shall not be over 300 million Yuan in|
|raised capital||
||any time-point. Up to end of the period, balance of financial products was 180 million Yuan. The reserved|
||fund-raised and financial income 31.3972 million Yuan have been saved in specific account in line with the|
||Management System of Fund-Raised Application for subsequent implementation for the fund-raised|
||projects.|
|Application of||
|fund-raised and issues||
||N/A|
|or other situation in||
|disclosure||

(3)The changed project of raised proceeds
□ Applicable√ Not applicable
The Company has no project of raised proceeds changed in the Period
(4) Project of raised proceeds
||||
|-|-|-|
|Project of raised proceeds and summary|Disclosure date|Disclosure index|
|||Found more in the announcement of|
|||Specific Report on Deposit and|
|Found more in Specific Report on Deposit|||
|||Application of the Fund Raised for First|
|and Application of the Fund Raised for|2016-08-26||
|||Half Year of 2016 released on Securities|
|First Half Year of 2016|||
|||Times, Hong Kong Commercial Daily|
|||and Juchao Website|

4. Main subsidiaries and joint-stock companies analysis
√ Applicable□ Not applicable
Main subsidiaries and joint-stock companies
In RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Main|||||||
|||Industry||Registered|||Operation|Operation||
|Name|Type||products or||Total assets|Net assets|||Net profit|
|||involved||capital|||revenue|profit||
||||service|||||||
||||Self-owned|||||||
|Shenzhen|||property|||||||
|Auto|||leasing,|||||||
|||||RMB 58.96|297,492,50|252,324,84|8,686,099.8|1,854,871||
|Industry|Subsidiary|Commerce|automobile||||||1,592,360.81|
|||||million|2.58|6.33|2|.67||
|and Trade|||and|||||||
|Corporation|||accessories|||||||
||||selling|||||||
||||Automobile|||||||
|Shenzhen||||||||||
||||maintenanc|||||||
|SD Huari||Service||||||||
||||e &|US$ 5|76,463,153.|30,628,462.|19,299,222.|-45,596.9||
|Automobile|Subsidiary||||||||101,794.49|
|||industry|production|million|00|63|50|0||
|Enterprise||||||||||
||||and sales of|||||||
|Co.Limited||||||||||
||||accessory|||||||
|Shenzhen||||||||||
|||||RMB||||||
|Zhongtian||Service|Property||397,370,42|283,947,80|2,676,372.9|-104,415.||
||Subsidiary|||267.25|||||-104,415.28|
|Industrial||industry|leasing||5.06|5.46|1|28||
|||||million||||||
|Co., Ltd.||||||||||
|Shenzhen|||Automobile|RMB 2|33,960,251.|-6,928,559.|94,044,194.|-28,948.0||
||Subsidiary|Commerce|||||||-19,548.04|
|Huari|||selling|million|05|54|14|4||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Toyota||||||||||
|Automobile||||||||||
|Sales Co.||||||||||
|Ltd||||||||||
|Shenzhen||||||||||
||||Production|||||||
|New||||||||||
||||of|||||||
|Yongtong||||||||||
|||Service|inspection|RMB 19.|9,257,666.0|2,911,755.5|2,288,350.7|512,975.4||
|Automobile|Subsidiary||||||||384,975.40|
|||industry|equipment|61 million|7|6|6|0||
|Inspection||||||||||
||||for auto|||||||
|Equipment||||||||||
||||vehicles|||||||
|Co. Ltd||||||||||
|Shenzhen||||||||||
||||Inspection|||||||
|Tellus New||||||||||
||||and|||||||
|Yongtong||Service||RMB 32.90|84,418,042.|45,919,464.|6,038,857.3|958,856.1||
||Subsidiary||maintenanc||||||648,281.95|
|Automobile||industry||million|78|81|8|3||
||||e of auto|||||||
|Developme||||||||||
||||vehicle|||||||
|nt Co. Ltd||||||||||
|Shenzhen|||Developmet|||||||
|SD Tellus||Manufactur|n and|RMB 31.15|28,511,925.|11,837,968.||-146,005.||
||Subsidiary||||||||-146,005.85|
|Real Estate||e|operation of|million|77|45||85||
|Co. Ltd|||real estate|||||||
|Shenzhen||||||||||
|SD Tellus|||Property|||||||
|||Service||RMB 7.05|35,338,002.|12,964,464.|20,744,895.|950,477.0||
|Property|Subsidiary||managemen||||||955,888.68|
|||industry||million|37|90|16|0||
|Managemen|||t|||||||
|t Co. Ltd||||||||||
|Shenzhen||||||||||
|Tellus Real|||Agency of|||||||
|||Service||RMB 2|2,576,344.4|2,449,209.1||||
|Estate|Subsidiary||real estate|||||-996.64|-996.64|
|||industry||million|2|7||||
|Exchange|||exchange|||||||
|Co. Ltd||||||||||
|Shenzhen||||||||||
||||Sales of|||||||
|Zung Fu||||||||||
||Joint-stock|Service|auto and|RMB 30|349,431,44|195,879,45|509,511,24|7,611,376||
|Tellus Auto|||||||||6,120,624.89|
||company|industry|maintenanc|million|7.71|4.44|4.05|.11||
|Service Co.,||||||||||
||||e|||||||
|Ltd.||||||||||
||||Auto|||||||
|Shenzhen||||||||||
||||manufacturi|||||||
|Dongfeng|Joint-stock|Manufactur||RMB 100|574,166,86|208,757,98|254,428,66|166,479.8||
||||ng and||||||2,210,135.53|
|Auto Co.,|company|e||million|9.19|6.01|9.06|7||
||||maintenanc|||||||
|Ltd.||||||||||
||||e|||||||
|Shenzhen|Joint-stock|Service|Property|RMB|364,014,34|119,734,69||27,701.41|27,701.41|

||||||||
|-|-|-|-|-|-|-|
|Tellus|company|industry|managemen|123,704,96|2.36|2.65|
|Jimeng|||t; leasing of|0|||
|Investment|||own||||
|Co., LTd.|||property||||
|Shenzhen|||||||
||||Mould||||
|Xinglong||||RMB|||
||Joint-stock|Manufactur|processing||292,076,56|64,979,136.|
|Machinery||||60.6333|||
||company|e|and||5.67|82|
|Mould Co.,||||million|||
||||exportation||||
|Ltd.|||||||

5. Major project invested by non-raised funds
□ Applicable√ Not applicable
No major project invested by non-raised funds in Period
VI. Prediction of business performance from January– September 2016
Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable√ Not applicable
VII. Explanation from the Board and Supervisory Committee for “Qualified Opinion” from the CPA of thisyear’s
□ Applicable√ Not applicable
VIII. Explanation on “Qualified Opinion” of previous year from the Board
□ Applicable√ Not applicable
IX. Implementation of profit distribution in reporting period
Implementation or adjustment of profit distribution plan in reporting period, cash dividend plan and shares converted from capital reserve in particular
□ Applicable√ Not applicable
Previousyear’s profit distribution plan was no profit distribution and shares converted from capital reserve either
X. Profit distribution and capitalization of capital reserves in the Period
□ Applicable√ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the semi-annual year
XI. In the report period, reception of research, communication and interview
□ Applicable√ Not applicable
The Company has no reception of research, communication and interview occurred in the Period
Section V. Important Events
I. Corporate governance
During the reporting period, the Company has been observing the Company Law, Securities Law and relevant rules issued by the CSRC, for the purpose of improving its legal person governance structure, setting up and improving the internal control system, and standardizing its operation level. According to the Articles of Association, Procedure Rules of General Meeting, Procedure Rules of Board of Directors, Procedure Rules of Supervisory Committee, Working Rules of Independent Directors, Working Rules of General Manager and a series of rules and regulations, the Company maintained formal procedures, clearly duties and obligations of its general meeting, board of directors, supervisory committee, each specialized committee of the board and senior manager. Each of its directors, supervisors and senior managers can perform their duties earnestly. Its corporate governance conformed to the requirements of certain regulation documents issued by the CSRC concerning corporate governance of listed company until the end of reporting period
During the reporting period, in order to improve the Company's internal control system, the company has followed the requirements of internal control, formulated an Enforcement Regulation of Network Voting for AGM, and revised the Article of Association, Rules of Procedure for the Board, Rules of Procedure for theShareholders’ General Meeting and Work System of Information Disclosure, and have been deliberated and approved by theShareholders’ General Meeting. The Company formulated a Rules of Procedure for Office Meeting of the Chairman, and revised the Management System of Inside Information and Insider, Management System of Strategy Planning and Management Method of the Subsidiary, and have been deliberated and approved by the Board.
II. Lawsuits
Significant lawsuits and arbitrations
□Applicable√Not applicable
The Company has no significant lawsuits and arbitrations in Period.
Other lawsuits
√Applicable□Not applicable
|||||||||
|-|-|-|-|-|-|-|-|
||Amount|Resulted an||||||
||involved (in|accrual||Trial result and|Execution of|Disclosure|Disclosure|
|Lawsuits (arbitrations)|||Progress|||||
||10 thousand|liability||influence|judgment|date|index|
||Yuan)|(Y/N)||||||
|The dispute case of|||Luohu|First-instance||||
||||||First-instance||Refer to|
||476|N||||||
|Shenzhen Nigang|||Court made|judgment|judgment was|2016 08 26|Semi-Annual|
||||||not||Report 2016|
|industrial Corporation|||a civil|result:1、Huari||||

|||||
|-|-|-|-|
|sued Huari Company|judgment,H|Company should|executed,Huari|
|to return the original|uari|return ground part|Company|
||||had appealed to|
|object[（2013）|Company|1,585.84 square||
||||the Shenzhen|
|Shenzhen Luohu|had appeale|meters of Parcel||
||||intermediate|
|Court-Min-three-Chu-|d to the She|H403-0054(B) to||
||||people's|
|zi-No.1875]:|nzhen|Shenzhen Nigang||
||||court,So far|
|The plaintiff’s litigant|intermediat|industrial Corpora|there is no|
|request:1、Return|e people's|tion within thirty|verdict.|
|ground part 1,585.84|court,So far|days from the||
|square meters of|there is no|effective date of||
|Parcel|verdict.|the judgment.2、||
|H403-0054(B);2、||Huari Company||
|From January 1, 1990||should||
|to the actual return||pay the royalties||
|date ,the royalties of||to Shenzhen||
|ground part 1,585.84||Nigang||
|square meters of||industrial Corpora||
|Parcel||tion within thirty||
|H403-0054(B),which||days from the||
|was||effective date of||
|implemented in accor||the judgment（By||
|dance with the||December 31,||
|government guidance||2015,the fee is||
|rental price||347,271.74 Yuan,||
|for the corresponding||and pay 7,268||
|period and location,||Yuan per month||
|the interest rate is imp||till actual||
|lemented in accordanc||returning of the||
|e with the loan interest||above||
|ratestipulated by the||property asset.3、||
|People's Bank of Chin||Overruled other||
|a for the correspondin||litigant requests||
|g period, annual use||from Shenzhen||
|fees calculated from||Nigang||
|the following year in||industrial Corpora||
|January 1st.||tion.||

III. Questions by media
□Applicable√ Not applicable
No questions by media in Period.
IV. Bankruptcy reorganization
□Applicable√ Not applicable
No bankruptcy reorganization in Period.
V. Transaction in assets
1. Assets acquisition
□Applicable√ Not applicable
The Company had no assets acquisition in the Period.
2. Sales of assets
□ Applicable√ Not applicable
The Company did not sell assets in the Period
3. Business combination
□ Applicable√ Not applicable
The Company has no business combined in the Period
VI. Implementation of thecompany’s equity incentive and the effects
□ Applicable√ Not applicable
No equity incentive in reporting period
VII. Significant related transaction
1. Related transaction with routine operations concerned
√Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||Related|Proporti||Whether|||||
|||||||||Trading||||||
|||||||transacti|on in the||over the|Related||||
|Related||Related|Related|||||limit|||Similar|||
||Related|||Pricing|Related|on|amount||approve|transacti||Date of|Index of|
|transacti||transacti|transacti|||||approve|||market|||
||relations|||principa|transacti|amount|of the||d|on||disclosu|disclosur|
|on||on|on|||||d (in 10|||price|||
||hip|||l|on price|(in 10|same||limited|settleme||re|e|
|parties||type|content|||||thousan|||obtained|||
|||||||thousan|transacti||or not|nt mode||||
|||||||||d Yuan)||||||
|||||||d Yuan)|on||(Y/N)|||||
|Shenzhe|Director|Routiner|House|Refer to||||||Based||2016-4-|Found|
||||||252|252|5.96%|530|N||252|||
|n Zung|,|elated|leasing|market||||||on the||15|more in|

||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Fu|supervis|transac|pricing||||||contract|||Annouce|
|Tellus|or and|tions|||||||or|||ment of|
|Auto|senior||||||||agreeme|||Routine|
|Service|executiv||||||||nt terms|||Related|
|Co.,|es of the|||||||||||Transacti|
|Ltd.|Compan|||||||||||ons ( No.:|
||y act as|||||||||||2016-024|
||director|||||||||||) released|
||in the|||||||||||on|
||enterpris|||||||||||Securities|
||e|||||||||||Times,|
|||||||||||||Hong|
|||||||||||||Kong|
|||||||||||||Commerc|
|||||||||||||ial Daily|
|||||||||||||and|
|||||||||||||Juchao|
|||||||||||||Website|
|Total|||--|--|252|--|530|--|--|--|--|--|
|Detail of sales return with major|||||||||||||
||||N/A||||||||||
|amount involved|||||||||||||
|Report the actual implementation of|||||||||||||
|the normal related transactions which|||||||||||||
|were projected about their total|||N/A||||||||||
|amount by types during the reporting|||||||||||||
|period(if applicable)|||||||||||||
|Reasons for major differences|||||||||||||
|between trading price and market|||Not applicable||||||||||
|reference price (if applicable)|||||||||||||

2. Related transaction incurred by purchase or sales of assets
□ Applicable√ Not applicable
No related transaction incurred by purchase or sales of assets in Period
3. Related transaction from jointly investment outside
□ Applicable√ Not applicable
No related transaction from jointly investment outside occurred in Period
4. Credits and liability of related party
√ Applicable□ Not applicable
Whether have non-operation related liabilities and credits relations or not
√ Yes□ No
Claim receivable from related party:
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Relatedparty|||Whether has|Balance at|Current|Current||Current|Balance at|
||||non-busines|period-begin|newly added|recovery||interest|period-end|
||Relationship|Causes|s capital|(10|(10|(10|Interest rate|(10|(10|
||||occupying|thousand|thousand|thousand||thousand|thousand|
||||or not|Yuan)|Yuan)|Yuan)||Yuan)|Yuan)|
|Influence on operation||||||||||
|results and financial status||||||||||
|||N/A||||||||
|from related credit and||||||||||
|debts||||||||||

Debts payable to related party:
||||||||||
|-|-|-|-|-|-|-|-|-|
||||Balance at|Current|Current||Current|Balance at|
||||period-begin|newly added|recovery||interest|period-end|
|Related party|Relationship|Causes||||Interest rate|||
||||(10 thousand|(10 thousand|(10 thousand||(10 thousand|(10 thousand|
||||Yuan)|Yuan)|Yuan)||Yuan)|Yuan)|
|Shenzhen||Loans with|||||||
||Controlling||||||||
|SDG Co.,||one year|6,300||||137|6,300|
||shareholder||||||||
|Ltd.||term|||||||
|||Current|||||||
|Shenzhen|||||||||
||Controlling|account and|||||||
|SDG Co.,|||4,794|163|1,649|||3,308|
||shareholder|loans|||||||
|Ltd.|||||||||
|||interest|||||||
|Shenzhen|||||||||
||Controlling||||||||
|SDG Co.,||loans|1,887||2||26|1,885|
||shareholder||||||||
|Ltd.|||||||||
|Influence on operation|||||||||
|results and financial status||More interest expenditure in the Year, the total profit decreased 1.63 million Yuan|||||||
|from related credit and debts|||||||||

5. Other related transactions
□ Applicable√ Not applicable
The Company had no other related transactions in the reporting period
VIII. Non-business capital occupying by controlling shareholders and its related parties□ Applicable√ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period
IX. Major contract and implantation
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable√ Not applicable
The Company had no trusteeship in the reporting period.
(2) Contract
□ Applicable√ Not applicable
The Company had no contract in the reporting period.
(3) Leasing
□ Applicable√ Not applicable
The Company had no leasing in the reporting period.
2. Guarantee
√ Applicable□ Not applicable
In ten thousand Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)|||||||||
||Related||||||||
||||Actual date of||||Complete|Guarante|
|Name of the|Announce||||||||
|||Guarantee|happening (Date|Actual|Guarantee|Guarantee|implemen|e for|
|Company|ment||||||||
|||limit|of signing|guarantee limit|type|term|tation or|related|
|guaranteed|disclosure||||||||
||||agreement)||||not|party|
||date||||||||
|||||||To the expire|||
|Shenzhen Zung Fu|||||||||
|||||||date of joint|||
|Tellus Auto|2014-09-30|3,500|2007-04-17|3,500|Pledged||N|Y|
|||||||venture|||
|Service Co., Ltd.|||||||||
|||||||contract|||
|||||Total actual occurred external|||||
|Total approving external|||||||||
|||0||guarantee in report period||3,500|||
|guarantee in report period (A1)|||||||||
|||||(A2)|||||
|Total approved external||||Total actual balance of|||||
|guarantee at the end of report||3,500||external guarantee at the end||3,500|||
|period ( A3)||||of report period (A4)|||||
|Guarantee between the Company and the subsidiaries|||||||||
||Related||||||||
||||Actual date of||||Complete|Guarante|
|Name of the|Announce||||||||
|||Guarantee|happening (Date|Actual|Guarantee|Guarantee|implemen|e for|
|Company|ment||||||||
|||limit|of signing|guarantee limit|type|term|tation or|related|
|guaranteed|disclosure||||||||
||||agreement)||||not|party|
||date||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Shenzhen||||||24 June 2014|||
||||||Joint liability||||
|Zhongtian|2014-05-07|30,000|2014-06-24|30,000||to 23 June|N|Y|
||||||guaranty||||
|Industrial Co., Ltd.||||||2014|||
|Shenzhen|||||||||
||||||General|To 25 June|||
|Zhongtian|2014-03-17|4,140||4,140|||Y|Y|
||||||guarantee|2016|||
|Industrial Co., Ltd.|||||||||
|||||Total amount of actual|||||
|Total amount of approving|||||||||
|||||occurred guarantee for|||||
|guarantee for subsidiaries in||0||||34,140|||
|||||subsidiaries in report period|||||
|report period (B1)|||||||||
|||||(B2)|||||
|||||Total balance of actual|||||
|Total amount of approved|||||||||
|||||guarantee for subsidiaries at|||||
|guarantee for subsidiaries at the||34,140||||30,000|||
|||||the end of reporting period|||||
|end of reporting period (B3)|||||||||
|||||(B4)|||||
|Guarantee of the Company for the subsidiaries|||||||||
||Related||||||||
||||Actual date of||||Complete|Guarante|
|Name of the|Announce||||||||
|||Guarantee|happening (Date|Actual|Guarantee|Guarantee|implemen|e for|
|Company|ment||||||||
|||limit|of signing|guarantee limit|type|term|tation or|related|
|guaranteed|disclosure||||||||
||||agreement)||||not|party|
||date||||||||
|||||Total amount of actual|||||
|Total amount of approving|||||||||
|||||occurred guarantee for|||||
|guarantee for subsidiaries in||0||||0|||
|||||subsidiaries in report period|||||
|report period (C1)|||||||||
|||||(C2)|||||
|||||Total balance of actual|||||
|Total amount of approved|||||||||
|||||guarantee for subsidiaries at|||||
|guarantee for subsidiaries at the||0||||0|||
|||||the end of reporting period|||||
|end of reporting period (C3)|||||||||
|||||(C4)|||||
|Total amount of guarantee of the Company( total three abovementioned guarantee)|||||||||
|Total amount of approving||||Total amount of actual|||||
|||0||||37,640|||
|guarantee in report period||||occurred guarantee in report|||||
|(A1+B1+C1)||||period (A2+B2+C2)|||||
|Total amount of approved||||Total balance of actual|||||
|||37,640||||33,500|||
|guarantee at the end of report||||guarantee at the end of report|||||
|period (A3+B3+C3)||||period (A4+B4+C4)|||||
|The proportion of the total amount of actually guarantee in the|||||||||
|||||37.81%|||||
|net assets of the Company(A4+ B4+C4)|||||||||
|Including:|||||||||
|Amount of guarantee for shareholders, actual controller and its|||||||||
|||||0|||||
|related parties(D)|||||||||
|The debts guarantee amount provided for the guaranteed|||||||||
|parties whose assets-liability ratio exceed 70% directly or||||0|||||
|indirectly(E)|||||||||
|Proportion of total amount of guarantee in net assets of the||||0|||||
|Company exceed 50%(F)|||||||||

|||
|-|-|
||0|
|Total amount of the aforesaid three guarantees(D+E+F)||
|Explanations on possibly bearing joint and several liquidating||
||N/A|
|responsibilities for undue guarantees (if applicable)||
|Explanations on external guarantee against regulated||
||N/A|
|procedures (if applicable)||

Explanation on guarantee with composite way
(1) Guarantee outside against the regulation
□ Applicable√ Not applicable
No guarantee outside against the regulation in Period
3. Other material contracts
□ Applicable√ Not applicable
The Company had no other material contracts in the reporting period.
4. Other material transactions
□ Applicable√ Not applicable
The Company had no other material transactions in the reporting period.
X. Commitments made by the Company or shareholders holding above5% shares of the Company in reporting period or occurred in the previous reporting period but continued to reporting period
√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||Commitmen|Commitmen|Implementati|
|Commitments|Accepter|Contents||||
||||t time|t period|on|
|||(I) Commitments during the work of Share|||Other|
|||Merger Reform of the Company: 1. commitment|||commitment|
|||for lock-up period. (1) In accordance with the|||has|
|||Measures for the Administration of the Share|||completed,|
|||Merger Reform of Listed Companies, SDG would|||special|
|||abide by the various laws, regulations and rules,|||commitment|
|Commitments for||||||
||SDG|and perform its statutory commitment duty. (2)|2005-12-25|Long-term|of the|
|Share Merger Reform||||||
|||Apart from the above-mentioned statutory|||incentive|
|||commitment, SDG also made the following|||mechanism|
|||special commitment: with 36 months since the|||has|
|||day the reform plan starts to take effect, SDG|||exemption|
|||would not list at Shenzhen Stock Exchange and|||from|
|||sell the shares of Tellus it held (except for the|||performance|

||
|-|
|shares used to promote the administration level of|
|Tellus). (3) The administration level would abide|
|by the laws, regulations and rules, and perform its|
|statutory commitment duty. (4) SDG made the|
|commitment: ―The Promiser hereby promises|
|that, if the Promiser failed to fulfill its|
|commitment or not fully fulfill its commitment, it|
|would compensate other shareholders for their|
|losses suffered thereafter‖. (5) SDG declared:|
|―The Promiser would dutifully fulfill its|
|commitments and shoulder corresponding legal|
|responsibilities. The Promiser would transfer the|
|shares held by it only if the assignee agree and|
|have the ability to shoulder the commitment|
|responsibility.‖ 2. Special commitment of|
|incentive mechanism. In order to effectively boost|
|the core management level and business|
|backbones for long, SDG would take out its|
|shares, not exceeding 10% in total number after|
|the Share Merger Reform, and apply them to the|
|boost of the administration level. The shares|
|would be sold to the Company’s administrative|
|level over 3 years, with the selling price being the|
|net asset value per share audited during the period|
|nearest to the implementation. Before the|
|implementation of the promoting plan by share|
|selling each year, the administration level must|
|prepay the Company a risk responsibility fund,|
|i.e. 20% of the planned selling price; Should the|
|work of the performance examination set by the|
|Board failed to be finished, the paid risk|
|responsibility fund would not be refunded and|
|shall be owned by the Company. Detailed rules|
|concerning the limitations on the administration|
|level, such as the subscription conditions and risk|
|responsibility fund, and boost plans would be set|
|by the Board and submitted to relevant|
|departments for approval. The implementation of|
|the shares for promoting would be conducted|
|strictly according to relevant laws and|
|regulations, and the circulation conditions of|
|these shares would be in conformity with relevant|
|regulations set by the Shenzhen Stock Exchange.|
|3. Relevant expenses of this Share Merger|

|||||||
|-|-|-|-|-|-|
|||Reform of Tellus would be paid by SDG.||||
|||SDG, the controlling shareholder of the Company,||||
|||made a special commitment of incentive||||
|||mechanism in Share Merger Reform. After that||||
|||SASAC and Ministry of Finance jointly issued a||||
|||―Trial Approach of Equity Incentive for||||
|||State-Owned Listed Companies‖, and CSRC||||
|||issued the ―Incentive Management on Shares of||||
|||Listed Companies (Trial)‖, after comparison, the||||
|||above mentioned commitments made by SDG are||||
|||out of the relevant regulations and requirement,||||
|||relevant commitments are not implemented as a|||Immunity to|
||SDG||2014-06-26|2016-6-30||
|||result. On 26 June 2014, the Company actively|||perform|
|||communicating with SDG, and promised that on||||
|||the premise of subjecting to applicable laws and||||
|||regulations and supervision requirements,||||
|||continues to support the Company promote a||||
|||long-term incentive plan as soon as possible in||||
|||stead of the commitments made in share merger||||
|||reform, and complete the long-term incentive plan||||
|||before 30 June 2016. At that time, the long-term||||
|||incentive plan shall be implemented after submit||||
|||for deliberation in General Meeting.||||
|Commitments in report of||||||
|acquisition or equity||||||
|change||||||
|Commitments in assets||||||
|reorganization||||||
|||The commitments to the fulfillment of||||
|||information disclosure about the company||||
|||business development are as follows: except for||||
|||the information has been disclosed publicly, the||||
||Shenzhen|||||
|Commitments make in||Company has not had the disclosed information||||
||Tellus||||Implementin|
|initial public offering or||about asset acquisition and business development|2014-10-17|Long-term||
||Holding||||g|
|re-financing||that has not been disclosed within one year. In the||||
||Co., Ltd.|||||
|||future, the company shall timely, accurately and||||
|||adequately disclose the relevant information||||
|||according to the progress of new business and the||||
|||related requirements.||||
|||In order to avoid the horizontal competition, the||||
|Other commitments for|Shenzhen|||||
|||company’s controlling shareholder, Shenzhen|||Implementin|
|medium and small|SDG Co.,||2014-05-26|Long-term||
|||SDG Co., Ltd., has issued the ―commitment letter|||g|
|shareholders|Ltd.|||||
|||about the avoidance of horizontal competition‖ on||||

||||||
|-|-|-|-|-|
||May 26, 2014. The full commitment letter is as||||
||follows: 1. The Company and other enterprises||||
||controlled by the Company except Test Rite||||
||Group haven’t occupied in any business that||||
||could substantially compete with the main||||
||businesses of Test Rite Group, and have no||||
||horizontal competition relationship with Test Rite||||
||Group.||||
||From 2014 to 2016, the company’s profits will||||
||first be used to cover the losses of previous years;||||
||after making up for losses of previous years, in||||
||the premise that the company’s profits and cash||||
||flow can meet the company's normal operations||||
||and long-term development, reward shareholders,||||
||the company will implement positive profit||||
||distribution approaches to reward the||||
||shareholders, details are as follows: 1. The||||
||company’s profit distribution can adopt cash,||||
||stock or the combination of cash and stock or||||
||other methods permitted by law. The foreign||||
||currency conversion rates of domestically listed||||
||foreign shares dividend are calculated according||||
||to the standard price of HK dollar against RMB||||
||announced by People's Bank of China on the first||||
|Shenzhen|working day after the resolution date of the||||
|Tellus|shareholders' meeting. The company prefers to|||Implementin|
|||2014-06-03|2016-12-31||
|Holding|adopt the cash dividends to distribute profits. In|||g|
|Co., Ltd.|order to maintain the adaptability between capital||||
||expansion and performance growth, in the||||
||premise of ensuring the full cash dividend||||
||distributions and the rationality of equity scale||||
||and equity structure, the company can adopt the||||
||stock dividend methods to distribute profits. 2.||||
||According to the "Company Law" and other||||
||relevant laws and the provisions of the company’s||||
||"Articles of Association", following conditions||||
||should be satisfied when the company implements||||
||cash dividends: (1) the company's annual||||
||distributable profits (i.e. the after-tax profits after||||
||making up for losses and withdrawing||||
||accumulation funds) are positive value, the||||
||implementation of cash dividends will not affect||||
||the company's subsequent continuing operations;||||
||(2) the audit institution issues the standard audit||||

||
|-|
|report with clean opinion to the company's annual|
|financial report; (3) the company has no|
|significant investment plans or significant cash|
|outlay (except for fund-raising projects). Major|
|investment plans or significant cash outlay refer|
|to: the accumulated expenditures the company|
|plans to used for investments abroad, acquisition|
|of assets, or purchase of equipments within the|
|next 12 months reach or exceed 30% of the net|
|assets audited in the latest period. 3. In the|
|premise of meeting the conditions of cash|
|dividends and ensuring the company’s normal|
|operation and long-term development, the|
|company makes cash dividends once a year in|
|principle, the company’s board of directors can|
|propose the company to make interim cash|
|dividends in accordance with the company's|
|profitability and capital demand conditions. The|
|proportion of cash dividends in profits available|
|for distribution and in distribution of profits|
|should meet the following requirements: (1) in|
|principle, the company’s profits distributed in|
|cash every year should not be less than 10% of|
|profit available for distribution realized in the|
|same year, and the company’s profits|
|accumulatively distributed in cash in the last three|
|years should not be less than 30% of the annual|
|average profit available for distribution realized in|
|the last three years. (2) if the company’s|
|development stage belongs to mature stage and|
|there is no significant capital expenditure|
|arrangement, when distributing profits, the|
|minimum proportion of cash dividends in this|
|profit distribution should be 80%; (3) if the|
|company’s development stage belongs to mature|
|stage and there are significant capital expenditure|
|arrangements, when distributing profits, the|
|minimum proportion of cash dividends in this|
|profit distribution should be 40%; (4) if the|
|company’s development stage belongs to growth|
|stage and there are significant capital expenditure|
|arrangements, when distributing profits, the|
|minimum proportion of cash dividends in this|
|profit distribution should be 20%; when the|

||||
|-|-|-|
|||company's development stage is not easy to be|
|||differed but there are significant capital|
|||expenditure arrangements, please handle|
|||according to the preceding provisions. 4. On the|
|||condition of meeting the cash dividend|
|||distribution, if the company's operation revenue|
|||and net profit grow fast, and the board of directors|
|||considers that the company’s equity scale and|
|||equity structure are reasonable, the company can|
|||propose and implement the dividend distribution|
|||plans except proposing the cash dividend|
|||distribution plans.|
|Completed on time(Y/N)|Y||

XI. Appointment and non-reappointment (dismissal) of CPA
Whether the semi-annual financial report had been audited
□Yes√ No
The semi-annual report was not audited
XII. Penalty and rectification
□ Applicable√ Not applicable
The Company had no penalty or rectification in the reporting period.
XIII. Risk disclosure of delisting with laws and rules violated
□ Applicable√ Not applicable
The Company has no delisting risks with laws and rules violated in Period
XIV. Explanation on other significant events
□ Applicable√ Not applicable
The Company had no explanation on other significant events in the reporting period.
XV. Issuance of corporate bonds
Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due but not fully cashed on the approval date of annual report
No
Section VI. Changes in Shares and Particulars about Shareholders I. Changes in shares
In share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before change||Increase/decrease in this time (+ , - )|||||After change||
||||||Capitalizat|||||
||||New|Bonus|ion of|||||
||Amount|Ratio||||Other|Subtotal|Amount|Ratio|
||||issue|share|public|||||
||||||reserve|||||
|I. Restricted shares|91,587,056|30.81%||||||91,587,056|30.81%|
|2. State-owned corporation||||||||||
||20,587,056|6.93%||||||20,587,056|6.93%|
|shares||||||||||
|3. Other domestic shares|71,000,000|23.88%||||||71,000,000|23.88%|
|Including: domestic legal||||||||||
||71,000,000|23.88%||||||71,000,000|23.88%|
|person’s shares||||||||||
|II. Un-restricted shares|205,694,544|69.19%||||||205,694,544|69.19%|
|1. RMB ordinary shares|179,294,544|60.31%||||||179,294,544|60.31%|
|2. Domestically listed||||||||||
||26,400,000|8.88%||||||26,400,000|8.88%|
|foreign shares||||||||||
|III. Total shares|297,281,600|100.00%||||||297,281,600|100.00%|

 Reasons for share changed
□Applicable√Not applicable
Approval of share changed
□Applicable√Not applicable
Ownership transfer of share changes
□Applicable√Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
□Applicable√Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable√ Not applicable
Explanation on changes in aspect of total shares, shareholders structures as well as structure of assets and liability of the Company□Applicable√Not applicable
II. Number of shares and shares held
In Share
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||Total preference shareholders||||||
|Total common shareholders at|||||with voting rights recovered at||||||
|||64,770||||||0|||
|period-end|||||end of reporting period (if||||||
||||||applicable) (see Note 8)||||||
|Particulars about shares held above 5% by common shareholders or top ten common shareholders|||||||||||
||||||||||Number of shares||
|||||Total common||Amount of|Amount of||||
||||||||||pledged/frozen||
||||Proportion|shareholders|Changes in|restricted|unrestricted||||
|Full name of|Nature of||||||||||
||||of shares||||||State||
|Shareholders|shareholder|||at the end of|report period|common|common||||
||||held||||||of|Amount|
|||||report period||shares held|shares held||||
||||||||||share||
|Shenzhen SDGCo., Ltd.|State-ownedcorporation||50.09%|148,898,023|-2,972,537|20,587,056|128,310,967||||
|Shenzhen CapitalFortune JewelryIndustryInvestmentEnterprise (limitedpartnership)|Domestic nonstate-ownedcorporate||23.88%|71,000,000||71,000,000|||||
|KGI ASIALIMITED|Foreigncorporation||2.45%|7,297,417|+6,480,206||7,297,417||||
|UOB (HongKong ) Co., Ltd.|Foreigncorporation||0.44%|1,308,693|||1,308,693||||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|Foreigncorporation||0.37%|1,098,132|-75,100||1,098,132||||
|Zhang Linbin|Domestic natureperson||0.25%|749,100|||749,100||||
|Weng Zhengwen|Foreign natureperson||0.20%|596,300|+33,300||596,300||||
|Wang Jinyi|Domestic natureperson||0.13%|400,000|||400,000||||
|Lai Suizhi|Domestic natureperson||0.13%|385,579|||385,579||||
|GuoyuanSecuritiesBrokerage (HK)Co., Ltd.|Foreigncorporation||0.13%|379,078|-110,000||379,078||||
|Strategy investors or general|||||||||||
||||N/A||||||||
|corporate becomes top 10 common|||||||||||

|||||
|-|-|-|-|
|shareholders due to rights issued (if||||
|applicable)(see Note 3)||||
|Explanation on associated||||
|relationship among the aforesaid|N/A|||
|shareholders||||
|Particular about top ten common shareholders with un-restrict shares held||||
||Amount of unrestricted common shares held at|Type of shares||
|Shareholders’ name||||
||period-end|Type|Amount|
|Shenzhen SDG Co., Ltd.|128,310,967|RMB ordinary||
||||128,310,967|
|||shares||
|KGI ASIA LIMITED|7,297,417|Overseas listed||
||||7,297,417|
|||foreign shares||
|UOB (Hong Kong ) Co., Ltd.|1,308,693|Overseas listed||
||||1,308,693|
|||foreign shares||
|GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED|1,098,132|Overseas listed||
||||1,098,132|
|||foreign shares||
|Zhang Linbin|749,100|RMB ordinary||
||||749,100|
|||shares||
|Weng Zhengwen|596,300|Overseas listed||
||||596,300|
|||foreign shares||
|Wang Jinyi|400,000|RMB ordinary||
||||400,000|
|||shares||
|Lai Suizhi|385,579|RMB ordinary||
||||385,579|
|||shares||
|Guoyuan Securities Brokerage (HK)Co., Ltd.|379,078|Overseas listed||
||||379,078|
|||foreign shares||
|Zeng Huiming|370,000|Overseas listed||
||||370,000|
|||foreign shares||
|Expiation on associated relationship|Among the top ten shareholders, there exists no associated relationship between the|||
|or consistent actors within the top|state-owned legal person’s shareholders Shenzhen SDG Co., Ltd and other shareholders, and|||
|10 un-restrict common shareholders|they do not belong to the consistent actionist regulated by the Management Measure of|||
|and between top 10 un-restrict|Information Disclosure on Change of Shareholding for Listed Companies. For the other|||
|common shareholders and top 10|shareholders of circulation share, the Company is unknown whether they belong to the|||
|common shareholders|consistent actionist.|||
|Explanation on shareholders||||
|involving margin business about top||||
|ten common shareholders with|N/A|||
|un-restrict shares held(if applicable)||||
|(see note4)||||

Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period
□ Yes√ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period.
III. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period
□ Applicable√ Not applicable
Changes of controlling shareholders had no change in reporting period.
Changes of actual controller in reporting period
□ Applicable√ Not applicable
Changes of actual controller in reporting period had no change in reporting period.
IV. Share holding increasing plan proposed or implemented in reporting period from shareholder of the Company and its concerted action person
□ Applicable√Not applicable
As far as the Company know, there are no share holding increasing plan proposed or implemented in Period from shareholder of the Company and its concerted action person
Section VII. Preferred Stock
□ Applicable√ Not applicable
The Company had no preferred stock in the reporting.
Section VIII. Directors, Supervisors and Senior Executives
I. Changes of shares held by directors, supervisors and senior executives
□ Applicable√ Not applicable
Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report 2015
II. Resignation and dismissal of directors, supervisors and senior executives
□ Applicable√ Not applicable
Directors, supervisors and senior executives of the Company have no changes in the Peirod, found more in Annual Report 2015
Section IX. Financial Report
I. Audit reports
Whether the semi-annual report was audited or not
□ Yes√ No
The financial report of this semi-annual report was unaudited
II. Financial statements
Units in Notes of Financial Statements is RMB
1. Consolidated Balance Sheet
Prepared by ShenZhen Tellus Holding Co.,Ltd
2016-06-30
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|190,981,593.06|159,184,710.93|
|Settlement provisions|||
|Capital lent|||
|Financial liability measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial liability|||
|Notes receivable|||
|Accounts receivable|1,664,778.74|562,051.31|
|Accounts paid in advance|7,663,519.57|6,454,769.40|
|Insurance receivable|||
|Reinsurance receivables|||
|Contract reserve of reinsurance|||
|receivable|||
|Interest receivable||348,833.33|
|Dividend receivable|||
|Other receivables|11,395,983.87|11,128,001.89|
|Purchase restituted finance asset|||
|Inventories|9,179,418.55|16,151,336.61|
|Divided into assets held for sale|||

||||
|-|-|-|
|Non-current asset due within one|||
|year|||
|Other current assets|110,319,674.72|165,565,445.21|
|Total current assets|331,204,968.51|359,395,148.68|
|Non-current assets:|||
|Loans and payments on behalf|||
|Finance asset available for sales|10,478,985.77|10,478,985.77|
|Held-to-maturity investment|||
|Long-term account receivable|||
|Long-term equity investment|216,689,503.20|220,180,721.29|
|Investment property|79,847,555.27|82,100,133.48|
|Fixed assets|132,707,486.29|136,583,565.00|
|Construction in progress|314,412,966.77|279,056,650.35|
|Engineering material|||
|Disposal of fixed asset|||
|Productive biological asset|||
|Oil and gas asset|||
|Intangible assets|54,296,001.28|52,985,273.37|
|Expense on Research and|||
|Development|||
|Goodwill|||
|Long-term expenses to be|||
||1,323,025.53|1,499,006.24|
|apportioned|||
|Deferred income tax asset|24,468,972.21|24,488,443.31|
|Other non-current asset|1,900,000.00|1,900,000.00|
|Total non-current asset|836,124,496.32|809,272,778.81|
|Total assets|1,167,329,464.83|1,168,667,927.49|
|Current liabilities:|||
|Short-term loans|||
|Loan from central bank|||
|Absorbing deposit and interbank|||
|deposit|||
|Capital borrowed|||
|Financial liability measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial liability|||
|Notes payable|||
|Accounts payable|21,507,032.73|27,417,068.61|

||||
|-|-|-|
|Accounts received in advance|8,747,886.64|11,460,807.66|
|Selling financial asset of|||
|repurchase|||
|Commission charge and|||
|commission payable|||
|Wage payable|23,766,762.69|19,639,738.81|
|Taxes payable|8,901,910.59|10,043,901.26|
|Interest payable|||
|Dividend payable|||
|Other accounts payable|179,682,571.96|193,797,786.68|
|Reinsurance payables|||
|Insurance contract reserve|||
|Security trading of agency|||
|Security sales of agency|||
|Divided into liability held for sale|||
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|||
|Total current liabilities|242,606,164.61|262,359,303.02|
|Non-current liabilities:|||
|Long-term loans|||
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Long-term account payable|13,972,779.67|13,972,779.67|
|Long-term wages payable|||
|Special accounts payable|||
|Projected liabilities|||
|Deferred income|||
|Deferred income tax liabilities|355,398.10|478,085.12|
|Other non-current liabilities|13,837,229.65|13,269,356.04|
|Total non-current liabilities|28,165,407.42|27,720,220.83|
|Total liabilities|270,771,572.03|290,079,523.85|
|Owner’s equity:|||
|Share capital|297,281,600.00|297,281,600.00|
|Other equity instrument|||
|Including: preferred stock|||

||||
|-|-|-|
|Perpetual capital|||
|securities|||
|Capital public reserve|564,192,605.51|564,192,605.51|
|Less: Inventory shares|||
|Other comprehensive income|||
|Reasonable reserve|||
|Surplus public reserve|2,952,586.32|2,952,586.32|
|Provision of general risk|||
|Retained profit|21,490,213.12|3,742,260.49|
|Total owner’s equity attributable to|||
||885,917,004.95|868,169,052.32|
|parent company|||
|Minority interests|10,640,887.85|10,419,351.32|
|Total owner’s equity|896,557,892.80|878,588,403.64|
|Total liabilities and owner’s equity|1,167,329,464.83|1,168,667,927.49|

 Legal Representative: Lv Hang Person in charge of Accounting Works:Yang Jianping Person in charge of Accounting Institution: Ke Wensheng
2. Balance Sheet of Parent Company
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|128,952,496.99|80,301,551.68|
|Financial liability measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial liability|||
|Notes receivable|||
|Accounts receivable|||
|Account paid in advance|161,004.02|101,280.00|
|Interest receivable||348,833.33|
|Dividends receivable|||
|Other receivables|97,105,347.22|93,744,827.52|
|Inventories|||
|Divided into assets held for sale|||
|Non-current assets maturing within|||
|one year|||
|Other current assets|110,000,000.00|145,000,000.00|

||||
|-|-|-|
|Total current assets|336,218,848.23|319,496,492.53|
|Non-current assets:|||
|Available-for-sale financial assets|10,176,617.20|10,176,617.20|
|Held-to-maturity investments|||
|Long-term receivables|||
|Long-term equity investments|678,503,117.76|682,223,207.17|
|Investment property|51,265,933.87|52,808,715.01|
|Fixed assets|16,719,522.85|17,096,105.47|
|Construction in progress|362,279.69|362,279.69|
|Project materials|||
|Disposal of fixed assets|||
|Productive biological assets|||
|Oil and natural gas assets|||
|Intangible assets|418,413.87|478,422.33|
|Research and development costs|||
|Goodwill|||
|Long-term deferred expenses|62,723.74|31,644.20|
|Deferred income tax assets|13,927,725.14|13,947,196.24|
|Other non-current assets|||
|Total non-current assets|771,436,334.12|777,124,187.31|
|Total assets|1,107,655,182.35|1,096,620,679.84|
|Current liabilities:|||
|Short-term borrowings|||
|Financial liability measured by fair|||
|value and with variation reckoned into|||
|current gains/losses|||
|Derivative financial liability|||
|Notes payable|||
|Accounts payable|||
|Accounts received in advance|2,523,809.43||
|Wage payable|7,330,366.38|5,247,871.02|
|Taxes payable|811,050.36|592,579.23|
|Interest payable|||
|Dividend payable|||
|Other accounts payable|312,588,347.40|320,935,774.45|
|Divided into liability held for sale|||

||||
|-|-|-|
|Non-current liabilities due within 1|||
|year|||
|Other current liabilities|||
|Total current liabilities|323,253,573.57|326,776,224.70|
|Non-current liabilities:|||
|Long-term loans|||
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Long-term account payable|||
|Long-term wages payable|||
|Special accounts payable|||
|Projected liabilities|||
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|||
|Total liabilities|323,253,573.57|326,776,224.70|
|Owners’ equity:|||
|Share capita|297,281,600.00|297,281,600.00|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Capital public reserve|560,999,182.23|560,999,182.23|
|Less: Inventory shares|||
|Other comprehensive income|||
|Reasonable reserve|||
|Surplus reserve|2,952,586.32|2,952,586.32|
|Retained profit|-76,831,759.77|-91,388,913.41|
|Total owner’s equity|784,401,608.78|769,844,455.14|
|Total liabilities and owner’s equity|1,107,655,182.35|1,096,620,679.84|

 3. Consolidated Profit Statement
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|

||||
|-|-|-|
|I. Total operating income|157,147,166.48|158,491,781.84|
|Including: Operating income|157,147,166.48|158,491,781.84|
|Interest income|||
|Insurance gained|||
|Commission charge and commission|||
|income|||
|II. Total operating cost|143,719,895.22|150,618,182.26|
|Including: Operating cost|112,822,380.88|116,939,503.91|
|Interest expense|||
|Commission charge and commission|||
|expense|||
|Cash surrender value|||
|Net amount of expense of|||
|compensation|||
|Net amount of withdrawal of|||
|insurance contract reserve|||
|Bonus expense of guarantee slip|||
|Reinsurance expense|||
|Operating tax and extras|2,403,726.21|2,847,665.18|
|Sales expenses|7,399,760.23|9,520,419.70|
|Administration expenses|20,805,027.12|16,780,916.30|
|Financial expenses|289,000.78|4,529,677.17|
|Losses of devaluation of asset|||
|Add: Changing income of fair|||
|value(Loss is listed with ―-‖)|||
|Investment income (Loss is listed|||
||5,100,570.96|624,390.10|
|with ―-‖)|||
|Including: Investment income on|||
||2,808,781.91|469,732.57|
|affiliated company and joint venture|||
|Exchange income (Loss is listed|||
|with ―-‖)|||
|III. Operating profit (Loss is listed with|||
||18,527,842.22|8,497,989.68|
|―-‖)|||
|Add: Non-operating income|45,280.90|48,762.10|
|Including: Disposal gains of|||
||28,104.37|17,094.02|
|non-current asset|||
|Less: Non-operating expense|5,764.84|37,317.93|
|Including: Disposal loss of|||
||1,237.84|37,300.18|
|non-current asset|||

||||
|-|-|-|
|IV. Total Profit (Loss is listed with ―-‖)|18,567,358.28|8,509,433.85|
|Less: Income tax expense|597,869.12|1,200,717.31|
|V. Net profit (Net loss is listed with ―-‖)|17,969,489.16|7,308,716.54|
|Net profit attributable to owner’s of|||
||17,747,952.63|7,650,356.02|
|parent company|||
|Minority shareholders’ gains and|||
||221,536.53|-341,639.48|
|losses|||
|VI. Net after-tax of other comprehensive|||
|income|||
|Net after-tax of other comprehensive|||
|income attributable to owners of parent|||
|company|||
|(I) Other comprehensive income|||
|items which will not be reclassified|||
|subsequently to profit of loss|||
|1. Changes as a result of|||
|re-measurement of net defined benefit|||
|plan liability or asset|||
|2. Share of the other|||
|comprehensive income of the investee|||
|accounted for using equity method which|||
|will not be reclassified subsequently to|||
|profit and loss|||
|(II) Other comprehensive income|||
|items which will be reclassified|||
|subsequently to profit or loss|||
|1. Share of the other|||
|comprehensive income of the investee|||
|accounted for using equity method which|||
|will be reclassified subsequently to profit|||
|or loss|||
|2. Gains or losses arising|||
|from changes in fair value of|||
|available-for-sale financial assets|||
|3. Gains or losses arising|||
|from reclassification of held-to-maturity|||
|investment as available-for-sale financial|||
|assets|||
|4. The effect hedging portion|||
|of gains or losses arising from cash flow|||
|hedging instruments|||
|5. Translation differences|||

||||
|-|-|-|
|arising on translation of foreign currency|||
|financial statements|||
|6. Other|||
|Net after-tax of other comprehensive|||
|income attributable to minority|||
|shareholders|||
|VII. Total comprehensive income|17,969,489.16|7,308,716.54|
|Total comprehensive income|17,747,952.63||
|||7,650,356.02|
|attributable to owners of parent Company|||
|Total comprehensive income|221,536.53||
|||-341,639.48|
|attributable to minority shareholders|||
|VIII. Earnings per share:|||
|(i) Basic earnings per share|0.0597|0.0296|
|(ii) Diluted earnings per share|0.0597|0.0296|

 Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before
combination, and realized 0 Yuan at last period for combined party
Legal Representative: Lv Hang Person in charge of Accounting Works:Yang Jianping Person in charge of Accounting Institution: Ke Wensheng
4. Profit Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Operating income|21,654,258.03|17,058,260.06|
|Less: Operating cost|1,787,004.39|1,860,594.49|
|Operating tax and extras|794,738.55|955,262.54|
|Sales expenses|||
|Administration expenses|9,195,278.67|6,617,979.97|
|Financial expenses|53,700.38|3,534,837.43|
|Losses of devaluation of asset|||
|Add: Changing income of fairvalue(Loss is listed with ―-‖)|||
|Investment income (Loss islisted with ―-‖)|||
||4,753,088.69|785,987.91|
|Including: Investment incomeon affiliated company and joint venture|||
||2,579,910.59|631,330.38|
|II. Operating profit (Loss is listedwith ―-‖)|||
||14,576,624.73|4,875,573.54|
|Add: Non-operating income|0.01||

||||
|-|-|-|
|Including: Disposal gains of|||
|non-current asset|||
|Less: Non-operating expense|||
|Including: Disposal loss of|||
|non-current asset|||
|III. Total Profit (Loss is listed with|||
||14,576,624.74|4,875,573.54|
|―-‖)|||
|Less: Income tax expense|19,471.10|19,471.10|
|IV. Net profit (Net loss is listed with|||
||14,557,153.64|4,856,102.44|
|―-‖)|||
|V. Net after-tax of other comprehensive|||
|income|||
|(I) Other comprehensive income|||
|items which will not be reclassified|||
|subsequently to profit of loss|||
|1. Changes as a result of|||
|re-measurement of net defined benefit|||
|plan liability or asset|||
|2. Share of the other|||
|comprehensive income of the investee|||
|accounted for using equity method|||
|which will not be reclassified|||
|subsequently to profit and loss|||
|(II) Other comprehensive income|||
|items which will be reclassified|||
|subsequently to profit or loss|||
|1. Share of the other|||
|comprehensive income of the investee|||
|accounted for using equity method|||
|which will be reclassified subsequently|||
|to profit or loss|||
|2. Gains or losses arising|||
|from changes in fair value of|||
|available-for-sale financial assets|||
|3. Gains or losses arising|||
|from reclassification of held-to-maturity|||
|investment as available-for-sale|||
|financial assets|||
|4. The effect hedging|||
|portion of gains or losses arising from|||
|cash flow hedging instruments|||
|5. Translation differences|||

||||
|-|-|-|
|arising on translation of foreign|||
|currency financial statements|||
|6. Other|||
|VI. Total comprehensive income|14,557,153.64|4,856,102.44|
|VII. Earnings per share:|||
|(i) Basic earnings per share|0.0490|0.0188|
|(ii) Diluted earnings per share|0.0490|0.0188|

 5. Consolidated Cash Flow Statement
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Cash flows arising from operating|||
|activities:|||
|Cash received from selling|||
|commodities and providing labor|158,112,964.06|166,412,700.80|
|services|||
|Net increase of customer deposit|||
|and interbank deposit|||
|Net increase of loan from central|||
|bank|||
|Net increase of capital borrowed|||
|from other financial institution|||
|Cash received from original|||
|insurance contract fee|||
|Net cash received from reinsurance|||
|business|||
|Net increase of insured savings and|||
|investment|||
|Net increase of amount from|||
|disposal financial assets that measured|||
|by fair value and with variation|||
|reckoned into current gains/losses|||
|Cash received from interest,|||
|commission charge and commission|||
|Net increase of capital borrowed|||
|Net increase of returned business|||
|capital|||
|Write-back of tax received|||
|Other cash received concerning|||
||22,370,091.90|21,091,520.19|
|operating activities|||

||||
|-|-|-|
|Subtotal of cash inflow arising from|||
||180,483,055.96|187,504,220.99|
|operating activities|||
|Cash paid for purchasing|||
|commodities and receiving labor|88,512,297.28|70,874,644.66|
|service|||
|Net increase of customer loans and|||
|advances|||
|Net increase of deposits in central|||
|bank and interbank|||
|Cash paid for original insurance|||
|contract compensation|||
|Cash paid for interest, commission|||
|charge and commission|||
|Cash paid for bonus of guarantee|||
|slip|||
|Cash paid to/for staff and workers|29,272,522.61|25,426,536.32|
|Taxes paid|13,224,238.25|9,842,550.96|
|Other cash paid concerning|||
||25,502,491.46|47,497,606.35|
|operating activities|||
|Subtotal of cash outflow arising from|||
||156,511,549.60|153,641,338.29|
|operating activities|||
|Net cash flows arising from operating|||
||23,971,506.36|33,862,882.70|
|activities|||
|II. Cash flows arising from investing|||
|activities:|||
|Cash received from recovering|||
||165,500,000.00|80,000,000.00|
|investment|||
|Cash received from investment|||
||8,591,789.05|154,657.53|
|income|||
|Net cash received from disposal of|||
|fixed, intangible and other long-term||191,300.00|
|assets|||
|Net cash received from disposal of|||
|subsidiaries and other units|||
|Other cash received concerning|||
|investing activities|||
|Subtotal of cash inflow from investing|||
||174,091,789.05|80,345,957.53|
|activities|||
|Cash paid for purchasing fixed,|||
||38,970,948.42|58,099,932.49|
|intangible and other long-term assets|||
|Cash paid for investment|110,800,000.00|355,000,000.00|

||||
|-|-|-|
|Net increase of mortgaged loans|||
|Net cash received from|||
|subsidiaries and other units obtained|||
|Other cash paid concerning|||
|investing activities|||
|Subtotal of cash outflow from investing|||
||149,770,948.42|413,099,932.49|
|activities|||
|Net cash flows arising from investing|||
||24,320,840.63|-332,753,974.96|
|activities|||
|III. Cash flows arising from financing|||
|activities|||
|Cash received from absorbing|||
|||635,500,000.00|
|investment|||
|Including: Cash received from|||
|absorbing minority shareholders’|||
|investment by subsidiaries|||
|Cash received from loans||24,698,215.03|
|Cash received from issuing bonds|||
|Other cash received concerning|||
|financing activities|||
|Subtotal of cash inflow from financing|||
|||660,198,215.03|
|activities|||
|Cash paid for settling debts||304,995,765.58|
|Cash paid for dividend and profit|||
||16,495,591.67|4,665,177.61|
|distributing or interest paying|||
|Including: Dividend and profit of|||
|minority shareholder paid by|||
|subsidiaries|||
|Other cash paid concerning|||
|||437,000.00|
|financing activities|||
|Subtotal of cash outflow from financing|||
||16,495,591.67|310,097,943.19|
|activities|||
|Net cash flows arising from financing|||
||-16,495,591.67|350,100,271.84|
|activities|||
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in|126.81|-4.76|
|exchange rate|||
|V. Net increase of cash and cash|||
||31,796,882.13|51,209,174.82|
|equivalents|||
|Add: Balance of cash and cash|||
||159,184,710.93|80,045,669.65|
|equivalents at the period -begin|||

||||
|-|-|-|
|VI. Balance of cash and cash|||
||190,981,593.06|131,254,844.47|
|equivalents at the period -end|||

6. Cash Flow Statement of Parent Company
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Cash flows arising from operating|||
|activities:|||
|Cash received from selling|||
|commodities and providing labor|30,405,761.68|18,015,142.44|
|services|||
|Write-back of tax received|||
|Other cash received concerning|||
||24,198,098.94|50,522,932.88|
|operating activities|||
|Subtotal of cash inflow arising from|||
||54,603,860.62|68,538,075.32|
|operating activities|||
|Cash paid for purchasing|||
|commodities and receiving labor|||
|service|||
|Cash paid to/for staff and workers|7,686,514.98|7,125,889.43|
|Taxes paid|1,923,502.73|1,871,082.86|
|Other cash paid concerning|||
||23,114,646.01|38,586,106.40|
|operating activities|||
|Subtotal of cash outflow arising from|||
||32,724,663.72|47,583,078.69|
|operating activities|||
|Net cash flows arising from operating|||
||21,879,196.90|20,954,996.63|
|activities|||
|II. Cash flows arising from investing|||
|activities:|||
|Cash received from recovering|||
||135,000,000.00|80,000,000.00|
|investment|||
|Cash received from investment|||
||8,473,178.10|154,657.53|
|income|||
|Net cash received from disposal of|||
|fixed, intangible and other long-term|||
|assets|||
|Net cash received from disposal of|||
|subsidiaries and other units|||
|Other cash received concerning|||
|investing activities|||

||||
|-|-|-|
|Subtotal of cash inflow from investing|||
||143,473,178.10|80,154,657.53|
|activities|||
|Cash paid for purchasing fixed,|||
||205,838.02|483,189.15|
|intangible and other long-term assets|||
|Cash paid for investment|100,000,000.00|535,000,000.00|
|Net cash received from|||
|subsidiaries and other units|||
|Other cash paid concerning|||
|investing activities|||
|Subtotal of cash outflow from investing|||
||100,205,838.02|535,483,189.15|
|activities|||
|Net cash flows arising from investing|||
||43,267,340.08|-455,328,531.62|
|activities|||
|III. Cash flows arising from financing|||
|activities|||
|Cash received from absorbing|||
|||635,500,000.00|
|investment|||
|Cash received from loans|||
|Cash received from issuing bonds|||
|Other cash received concerning|||
|financing activities|||
|Subtotal of cash inflow from financing|||
|||635,500,000.00|
|activities|||
|Cash paid for settling debts||190,000,000.00|
|Cash paid for dividend and profit|||
||16,495,591.67|3,630,720.91|
|distributing or interest paying|||
|Other cash paid concerning|||
|||437,000.00|
|financing activities|||
|Subtotal of cash outflow from financing|||
||16,495,591.67|194,067,720.91|
|activities|||
|Net cash flows arising from financing|||
||-16,495,591.67|441,432,279.09|
|activities|||
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in|||
|exchange rate|||
|V. Net increase of cash and cash|||
||48,650,945.31|7,058,744.10|
|equivalents|||
|Add: Balance of cash and cash|||
||80,301,551.68|26,441,746.73|
|equivalents at the period -begin|||
|VI. Balance of cash and cash|||
||128,952,496.99|33,500,490.83|
|equivalents at the period -end|||

7. Statement of Changes inOwners’ Equity (Consolidated)
This Period
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||This Period|||||||||||||
||Owners’ equity attributable to parent company|||||||||||||
|||Other||||||||||||
|||equity instrument||||||||||||
|Item|||Perpet|||Less:|Other|||Provisio||Minorit|Total|
||Share||ual||Capital|Invento|compre|Reason|Surplus|n of|Retaine|y|owners’|
||capital|Prefer|capita||reserve|ry|hensive|able|reserve|general|d profit|interests|equity|
|||red|l|Other||shares|income|reserve||risk||||
|||stock||||||||||||
||||securi|||||||||||
||||ties|||||||||||
||297,28|||||||||||||
|I. Balance at the|||||564,192||||2,952,5||3,742,2|10,419,|878,588|
||1,600.|||||||||||||
|end of the last year|||||,605.51||||86.32||60.49|351.32|,403.64|
||00|||||||||||||
|Add:||||||||||||||
|Changes of||||||||||||||
|accounting policy||||||||||||||
|Error||||||||||||||
|correction of the||||||||||||||
|last period||||||||||||||
|Enterprise||||||||||||||
|combine under||||||||||||||
|the same control||||||||||||||
|Other||||||||||||||
||297,28|||||||||||||
|II. Balance at the|||||564,192||||2,952,5||3,742,2|10,419,|878,588|
|beginning of this|1,600.|||||||||||||
||||||,605.51||||86.32||60.49|351.32|,403.64|
|year|00|||||||||||||
|III. Increase/||||||||||||||
||||||||||||17,747,|221,536|17,969,|
|Decrease in this||||||||||||||
|year (Decrease is|||||||||||952.63|.53|489.16|
|listed with ―-‖)||||||||||||||
|(i) Total|||||||||||17,747,|221,536|17,969,|
|comprehensive||||||||||||||
||||||||||||952.63|.53|489.16|
|income||||||||||||||
|(ii) Owners’||||||||||||||
|devoted and||||||||||||||
|decreased capital||||||||||||||
|1.Common shares||||||||||||||
|invested by||||||||||||||
|shareholders||||||||||||||
|2. Capital invested||||||||||||||
|by holders of other||||||||||||||
|equity instruments||||||||||||||
|3. Amount||||||||||||||
|reckoned into||||||||||||||

||||||||
|-|-|-|-|-|-|-|
|owners equity with|||||||
|share-based|||||||
|payment|||||||
|4. Other|||||||
|(III) Profit|||||||
|distribution|||||||
|1. Withdrawal of|||||||
|surplus reserves|||||||
|2. Withdrawal of|||||||
|general risk|||||||
|provisions|||||||
|3. Distribution for|||||||
|owners (or|||||||
|shareholders)|||||||
|4. Other|||||||
|(IV) Carrying|||||||
|forward internal|||||||
|owners’ equity|||||||
|1. Capital reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|2. Surplus reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|3. Remedying loss|||||||
|with surplus|||||||
|reserve|||||||
|4. Other|||||||
|(V) Reasonable|||||||
|reserve|||||||
|1. Withdrawal in|||||||
|the report period|||||||
|2. Usage in the|||||||
|report period|||||||
|(VI)Others|||||||
||297,28|||||896,557,892.80|
|IV. Balance at the||564,192|2,952,5|21,490,|10,640,||
|end of the report|1,600.||||||
|||,605.51|86.32|213.12|887.85||
|period|00||||||

Last Period
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Last Period|||||||||||||
||Owners’ equity attributable to the parent Company|||||||||||||
|||||||||||||Minorit||
|Item|||||||||||||Total|
||Share|Other|||Capital|Less:|Other|Reason|Surplus|Provisio|Retaine|y|owners’|
|||equity instrument||||Invento|compre|able||n of||interest||
||capital||||reserve||||reserve||d profit||equity|
|||Prefer|Perpet|Other||ry|hensive|reserve||general||s||

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||red|ual||shares|income||risk||||
|||stock|capita|||||||||
||||l|||||||||
||||securi|||||||||
||||ties|||||||||
||220,28|||||||||||
|||||7,672,6|||2,952,5||-39,026,|10,450,|202,330|
|I. Balance at the||||||||||||
||1,600.|||||||||||
|end of the last year||||05.51|||86.32||529.03|097.29|,360.09|
||00|||||||||||
|Add:||||||||||||
|Changes of||||||||||||
|accounting policy||||||||||||
|Error||||||||||||
|correction of the||||||||||||
|last period||||||||||||
|Enterprise||||||||||||
|combine under the||||||||||||
|same control||||||||||||
|Other||||||||||||
||220,28|||||||||||
|II. Balance at the||||7,672,6|||2,952,5||-39,026,|10,450,|202,330|
|beginning of this|1,600.|||||||||||
|||||05.51|||86.32||529.03|097.29|,360.09|
|year|00|||||||||||
|III. Increase/|77,000|||||||||||
|||||556,520|||||7,650,3|-341,63|640,828|
|Decrease in this||||||||||||
||,000.0|||||||||||
|year (Decrease is||||,000.00|||||56.02|9.48|,716.54|
||0|||||||||||
|listed with ―-‖)||||||||||||
|(i) Total|||||||||7,650,3|-341,63|7,308,7|
|comprehensive||||||||||||
||||||||||56.02|9.48|16.54|
|income||||||||||||
||77,000|||||||||||
|(ii) Owners’||||556,520|||||||633,520|
|devoted and|,000.0|||||||||||
|||||,000.00|||||||,000.00|
|decreased capital|0|||||||||||
|1.Common shares||||||||||||
|invested by||||||||||||
|shareholders||||||||||||
|2. Capital invested||||||||||||
|by holders of other||||||||||||
|equity instruments||||||||||||
|3. Amount||||||||||||
|reckoned into||||||||||||
|owners equity with||||||||||||
|share-based||||||||||||
|payment||||||||||||
|4 Other||||||||||||
|(III) Profit||||||||||||
|distribution||||||||||||
|1. Withdrawal of||||||||||||
|surplus reserves||||||||||||
|2. Withdrawal of||||||||||||
|general risk||||||||||||

||||||||
|-|-|-|-|-|-|-|
|provisions|||||||
|3. Distribution for|||||||
|owners (or|||||||
|shareholders)|||||||
|4. Other|||||||
|(IV) Carrying|||||||
|forward internal|||||||
|owners’ equity|||||||
|1. Capital reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|2. Surplus reserves|||||||
|conversed to|||||||
|capital (share|||||||
|capital)|||||||
|3. Remedying loss|||||||
|with surplus|||||||
|reserve|||||||
|4. Other|||||||
|(V) Reasonable|||||||
|reserve|||||||
|1. Withdrawal in|||||||
|the report period|||||||
|2. Usage in the|||||||
|report period|||||||
|(VI)Others|||||||
||297,28||||||
|IV. Balance at the||564,192|2,952,5|-31,376,|10,108,|843,159|
|end of the report|1,600.||||||
|||,605.51|86.32|173.01|457.81|,076.63|
|period|00||||||

8. Statement of Changes inOwners’ Equity (Parent Company)
This Period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||This Period|||||||||||
|||Other||||||||||
|||equity instrument||||||||||
||||||||Other||||Total|
|Item|Share||Perpetu|||Less:||||Retaine||
||||||Capital||comprehe|Reasonab|Surplus|||
||||al|||Inventory|||||owners’|
||capital|Preferre|||reserve||nsive|le reserve|reserve|d profit||
||||capital|Other||shares|||||equity|
|||d stock|securiti||||income|||||
||||es|||||||||
||297,281,||||560,999,1||||2,952,586|-91,388,|769,844,4|
|I. Balance at the||||||||||||
|end of the last year|600.00||||82.23||||.32|913.41|55.14|
|Add: Changes||||||||||||
|of accounting||||||||||||

|||||||
|-|-|-|-|-|-|
|policy||||||
|Error||||||
|correction of the||||||
|last period||||||
|Other||||||
|II. Balance at the|297,281,|560,999,1|2,952,586|-91,388,|769,844,4|
|beginning of this||||||
||600.00|82.23|.32|913.41|55.14|
|year||||||
|III. Increase/||||||
|||||14,557,|14,557,15|
|Decrease in this||||||
|year (Decrease is||||153.64|3.64|
|listed with ―-‖)||||||
|(i) Total||||||
|||||14,557,|14,557,15|
|comprehensive||||||
|||||153.64|3.64|
|income||||||
|(ii) Owners’||||||
|devoted and||||||
|decreased capital||||||
|1.Common shares||||||
|invested by||||||
|shareholders||||||
|2. Capital invested||||||
|by holders of other||||||
|equity instruments||||||
|3. Amount||||||
|reckoned into||||||
|owners equity with||||||
|share-based||||||
|payment||||||
|4. Other||||||
|(III) Profit||||||
|distribution||||||
|1. Withdrawal of||||||
|surplus reserves||||||
|2. Distribution for||||||
|owners (or||||||
|shareholders)||||||
|3. Other||||||
|(IV) Carrying||||||
|forward internal||||||
|owners’ equity||||||
|1. Capital reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|2. Surplus reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||

|||||||
|-|-|-|-|-|-|
|3. Remedying loss||||||
|with surplus||||||
|reserve||||||
|4. Other||||||
|(V) Reasonable||||||
|reserve||||||
|1. Withdrawal in||||||
|the report period||||||
|2. Usage in the||||||
|report period||||||
|(VI)Others||||||
|IV. Balance at the|||||784,401,608.78|
||297,281,|560,999,1|2,952,586|-76,831,||
|end of the report||||||
||600.00|82.23|.32|759.77||
|period||||||

Last period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Last period|||||||||||
|||Other||||||||||
|||equity instrument||||||||||
||||||||Other||||Total|
|Item|Share||Perpetu|||Less:||||Retaine||
||||||Capital||comprehe|Reasonab|Surplus|||
||||al|||Inventory|||||owners’|
||capital|Preferre|||reserve||nsive|le reserve|reserve|d profit||
||||capital|Other||shares|||||equity|
|||d stock|||||income|||||
||||securiti|||||||||
||||es|||||||||
|||||||||||-109,67||
||220,281,||||4,479,182||||2,952,586||118,039,6|
|I. Balance at the||||||||||||
|||||||||||3,740.3||
|end of the last year|600.00||||.23||||.32||28.20|
|||||||||||5||
|Add: Changes||||||||||||
|of accounting||||||||||||
|policy||||||||||||
|Error||||||||||||
|correction of the||||||||||||
|last period||||||||||||
|Other||||||||||||
|||||||||||-109,67||
|II. Balance at the|220,281,||||4,479,182||||2,952,586||118,039,6|
|beginning of this||||||||||3,740.3||
||600.00||||.23||||.32||28.20|
|year||||||||||5||
|III. Increase/||||||||||||
||77,000,0||||556,520,0|||||4,856,1|638,376,1|
|Decrease in this||||||||||||
|year (Decrease is|00.00||||00.00|||||02.44|02.44|
|listed with ―-‖)||||||||||||
|(i) Total||||||||||4,856,1|4,856,102|
|comprehensive||||||||||||
|||||||||||02.44|.44|
|income||||||||||||
|(ii) Owners’|77,000,0||||556,520,0||||||633,520,0|
|devoted and||||||||||||
||00.00||||00.00||||||00.00|
|decreased capital||||||||||||

|||||||
|-|-|-|-|-|-|
|1.Common shares||||||
|invested by||||||
|shareholders||||||
|2. Capital invested||||||
|by holders of other||||||
|equity instruments||||||
|3. Amount||||||
|reckoned into||||||
|owners equity with||||||
|share-based||||||
|payment||||||
|4. Other||||||
|(III) Profit||||||
|distribution||||||
|1. Withdrawal of||||||
|surplus reserves||||||
|2. Distribution for||||||
|owners (or||||||
|shareholders)||||||
|3. Other||||||
|(IV) Carrying||||||
|forward internal||||||
|owners’ equity||||||
|1. Capital reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|2. Surplus reserves||||||
|conversed to||||||
|capital (share||||||
|capital)||||||
|3. Remedying loss||||||
|with surplus||||||
|reserve||||||
|4. Other||||||
|(V) Reasonable||||||
|reserve||||||
|1. Withdrawal in||||||
|the report period||||||
|2. Usage in the||||||
|report period||||||
|(VI)Others||||||
|||||-104,81||
|IV. Balance at the|297,281,|560,999,1|2,952,586||756,415,7|
|end of the report||||7,637.9||
||600.00|82.23|.32||30.64|
|period||||1||

III. Company profile
1. Company profile
Chinese name of the Company:深圳市特力(集团)股份有限公司
Foreign name of the Company: ShenZhen Tellus Holding Co.,Ltd
Registered address of the Company: 3/F, Tellus Building, Shuibei 2nd Road, Luohu District, Shenzhen, Guangdong Province. Office address of the Company: 15/F, Zhonghe Building, Shennan Middle Road, Futian District, Shenzhen
Stock exchange for listing: Shenzhen Stock Exchange
Short form of the stock and Stock code: Tellus-A(000025),Tellus-B(200025)
Registered capital: RMB 297,280,000
Legal representative: Lv Hang
Registration number of legal person business license: 440301103017750
2. Business nature, operating scope and major products and services of the Company
Business nature: wholesale industry of energy, materials and machinery electronic equipments.
Operating scope: mainly engaged in provision of auto related comprehensive services, including sales and maintenance of autos, production of detection equipments, and property leasing and management.
Major products and services: sales, detection and maintenance of autos and components, property leasing and service. 3. The history of the Company
Shenzhen Testrite Group Co., Ltd. (hereinafter referred to as the Company), previously known as Shenzhen Machinery Industry Company, was incorporated on 10 November 1986. In 1992, as authorized by the reply relating to Shenzhen Machinery Industry Company transforming to Shenzhen Testrite Machinery Co.,Ltd.(SFBF[1991]1012) issued by the Office of Shenzhen People Government, Shenzhen Machinery Industry Company was transformed to Shenzhen Testrite Machinery Co., Ltd. in 1993, as authorized by the reply relating to Shenzhen Testrite Machinery Co., Ltd. transforming to a public company(SFBF[1992]1850) issued by the Office of Shenzhen People Government and the reply relating to issuance of stocks by Shenzhen Testrite Machinery and Electric Co., Ltd.(SRYFZ[1993]092) issued by Shenzhen branch ofPeople’s Bank of China, Shenzhen Testrite Machinery Co., Ltd. changed to be a public company and made the initial public offering. The name of the Company changed to Shenzhen Testrite Machinery and Electric Co., Ltd., with a total share capital of 166,880,000 shares, among which, 120,900,000 shares were converted from the original assets and 45,980,000 shares were newly issued. The newly issued shares comprises of 25,980,000 RMB ordinary shares (A shares) and 20,000,000 RMB special shares (B shares). In June 1993, as approved by the reply relating to listing of Shenzhen Testrite Machinery and Electric Co., Ltd.(SZBF[1993]34) issued by Shenzhen Securities Management Office and the Listing Grant issued by Shenzhen StockExchange(SZSZ[1993]22), Shenzhen Testrite Machinery and Electric Co., Ltd. was listed on Shenzhen Stock Exchange. And the Company renamed as Shenzhen Tellus Holding Co., Ltd. dated 30 June 1994 after approval from the Shenzhen Administration for Industry and commerce. On 15 March 1993, being approved by branch of Shenzhen Special Economic Zone ofPeople’s Bank of China―Shen Ren Yin Fu Zi (1993) No.:092‖, the Company released 25.98 million registered common A shares with RMB 1.00 par value as well as 20 million B shares. Capital structure of the Company while initial public offering:
Type Amount (Share) Ratio(%) I. Non-tradable share
Including: State shares 120,900,000 72.45
Type Amount (Share) Ratio(%) Total non-tradable shares 120,900,000 72.45 II. Outstanding shares
1. Tradable A-Share 25,980,000 15.57 2. Tradable B-Share 20,000,000 11.98 Total tradable shares 45,980,000 27.55 Total 166,880,000 100.00 All previous changes in the share capital after the public issue of the Company:
(1) Bonus shares in 1993
The Company held the resolution of annual shareholders' general meeting of 1993, distribute dividend of 0.5 Yuan in cash for every 10 shares and 2 more bonus shares to all shareholders based on theCompany’s total share capital of 166,880,000 shares on 31st, Dec., 1993, and theCompany’s total share capital changed to 200,256,000 shares.
On 22nd April 1994, Shenzhen Securities Regulatory Office approved the stock dividend scheme of the Company. After the implementation of the stock dividend program, the ownership structure of the Company became as follows:
Type Amount (Share) Ratio(%) State-owned corporate shares 145,080,000 72.45 Domestic public shares 31,176,000 15.57 RMB special stock (B-Share) 24,000,000 11.98 Total 200,256,000 100.00 (2) Bonus shares and capitalization in 1994
On 28th May 1995, the shareholders' general meeting of the Group approved the bonus share and capitalization program proposed by the board of directors. The Company distributes 0.5 bonus shares to every 10 shares with 0.5 more shares increased for 0.5 Yuan dividend in cash to all shareholders based on theCompany’s total share capital of 200,256,000 shares on 31st, Dec., 1994, and theCompany’s total share capital changed to 220,281,600 shares.
Equity structure of the Company after bonus scheme implemented:
Type Amount (Share) Ratio(%) State-owned corporate shares 159,588,000 72.45 Domestic public shares 34,293,600 15.57 RMB special stock (B-Share) 26,400,000 11.98 Total 220,281,600 100.00 (3) The changes of controlling shareholders in 1997
On 31st March 1997, in accordance with the approval of―Shenfuhan[1997]No.19‖ and―Zhengjianhan[1997]No.5‖, the People's Government of SZ Municipality and China Securities Regulatory Commission agreed Shenzhen Investment and
Management Company to transfer its 159,588,000 shares of State shares to―Shenzhen Special Development Group Co.,Ltd‖ (hereinafter referred to as―SDG‖), which took proportion of72.45% in the total share capital.
(4) Reform of non-tradable shares in 2006
In December 2005, Shenzhen State-owned Assets Supervision and Administration Commission approved the non-tradable shares reform program of Shenzhen Tellus (Group) Ltd. which reported by theCompany’s non-tradable shareholders - Shenzhen Special Development Group Co., Ltd.
On 4th January 2006, SDG paid 13,717,440 shares of stock to the shareholders of A shares in circulation as the consideration of the non-tradable shares reform, and SDG held66.22% of theCompany’s total share capital after the non-tradable shares reform. After the implementation of the non-tradable shares reform program, the ownership structure of the company became as follows:
Type Amount (Share) Ratio(%) State-owned corporate shares 145,870,560 66.22 Domestic public shares 48,011,040 21.80 RMB special stock (B-Share) 26,400,000 11.98 Total 220,281,600 100.00 (5) Non-public RMB common stock offer in 2015
In accordance with the provisions of theCompany’s 19th extraordinary meeting of the 7th session of board of directors on April 21, 2014 and the resolutions of the fourth extraordinary general meeting of 2014 on June 3, 2014, the non-public offering of RMB ordinary shares (A shares) that the Company issues to Shenzhen SDG Co., Ltd. and Shenzhen CMAF Jewelry Industry Investment Company (limited partnership) should not exceed 77,000,000 shares, of which the par value is 1 yuan per share, the total raised funds are no more than RMB 646,800,000.00 yuan, the issuance objects are all subscribed by cash.
On May 19, 2014, State-owned Assets Supervision and Administration Commission of the People's Government of Shenzhen Municipality issued―Reply to issues related to non-public offering of shares of Shenzhen Test Rite (Group) Co., Ltd. from SASAC of ShenzhenMunicipality‖ (SGZWH No.[2014]237) which agreed theCompany’s plan for non-public offering of shares. TheCompany’s non-public offering has obtained the―Approval for non-public offering of shares of Shenzhen Test Rite (Group) Co.,Ltd.‖ (CSRC License No.[2015]173) approved by China Securities Regulatory Commission, which agrees the Company to issue the non-public offering of RMB ordinary shares (A shares) not exceeding 77,000,000 new shares. The registered capital is RMB 297,281,600.00 yuan after change, and thecompany’s ownership structure is as follows:
Type Amount (Share) Ratio(%) State-owned corporate shares 151,870,560 51.09 Domestic public shares 119,011,040 40.03
Type Amount (Share) Ratio(%) RMB special stock (B-Share) 26,400,000 8.88 Total 297,281,600 100.00 (6) Reducing stock by controlling shareholder in May 2016
From 4 May 2016 to 31 May 2016, SDG reducing 2,972,537 un-restricted circulation shares of the Company through centralized price bidding, presenting1% of the total share capital of the Company, equity structure after share reducing are as:
Type Amount (Share) Ratio(%) State-owned corporate shares 148,898,023 50.09 Domestic public shares 121,983,577 41.03 RMB special stock (B-Share) 26,400,000 8.88 Total 297,281,600 100.00 4. Consolidation scope of the Company in the year
Totally 14 companies included in the consolidation scope for the Year of 2016, found more in―Equity in otherentity‖ in the Note VIII. The consolidation range has no changes over that of last year.
5. Relevant party offering approval reporting of financial statements and date thereof
This financial statement is approved for disclosure by resolution from the Board dated 25 August 2016.
IV. Basis Preparation of the Financial Statements
The financial statements of the Group is prepared based on the going-concern assumption in accordance with the actually occurred transactions and events, the―Accounting standards for Businees Enteprise-Basicrules‖ (ministry of finance order No. 33 issued, ministry of finance No.76 revised), the―Accounting Standards for Business Enterprises– BasicStandards‖ and 41 specific accounting standards promulgated by the ministry of finance on 15th, Feb., 2006, the subsequently promulgated application guide and interpretation of the accounting standards for business enterprises and other relevant provisions (hereinafter collectively referred to as―ASBE‖), and China Securities Regulatory Commission―information disclosure regulations No.15 for the companies publicly issuing securities - general provisions of financialreports‖ (2014 Revision).
According to the relevant requirements under the Accounting Standards for Business Enterprises, the Company has adopted the accrual basis as its basis of accounting. Except for certain financial instruments, historical costs have been adopted as the basis of measurement in these Financial Statements. Non-current assets held for sale are recorded at the lower of fair value less predicted expenses and the original carrying value when the assets satisfy such conditions for sale. Provisions of corresponding impairment losses are recognised in respect of any impairment of assets.
V. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Groups meet the requirements of the Accounting Standards for Business Enterprises, truthfully and completely reflect the financial situation of the Company on 30th, June, 2016, and the business performance and cash flow in January to June of 2016. In addition, the financial statements of the Company and the Group meet the disclosure requirements of―Preparation Regulation of Information Disclosure for Enterprise with Security Issued
PubliclyNo.15—General Rules of FinancialReport‖ revised by China Securities Regulatory Commission in all significant aspects in 2014.
VI. Main accounting policy and estimate
The Company and its subsidiaries determine specific accounting policies and accounting estimation based on their actual production characteristics according to the relevant requirements under the Accounting Standards for Business Enterprises. Details relating to significant accounting judgment and estimation made by the management, please refer to note IV(29)―Significant accounting judgment andestimation‖
1. Fiscal period
The accounting period of the Group includes annual and interim, accounting interim refers to the reporting period shorter than a complete fiscal year. The fiscal year of the Group adopts the Gregorian calendar, i.e. from 1 January to 31 December for each year.
2. Business cycle
Normal business cycle is the period from purchasing assets used for process by the Company to the cash and cash equivalent achieved.
TheCompany’s normal business cycle was one-year (12 months), and as the determining criterion of the liquidity for astes and liabilities.
3. Book-keeping currency
RMB is the currency in the major economic environment of the Company and its sub-company which take RMB as the book-keeping currency. The Group adopts RMB as the currency when preparing this financial statement.
4. The accounting treatment of business merger under the common control and the different control.
Business merger refers to the transactions or matters that two or more than two individual enterprises form a reporting entit. Business combination is at least subject to the following conditions: to acquire controlling right upon another or multiple enterprises (or business); enterprises to be combined must constitute business. In case that an acquirer obtains controlling right upon another or multiple enterprises which do not constitute business, the transaction shall not constitute business combination.
When acquirer acquires a group of assets or net assets whichdon’t constitute business, the acquisition costs shall be allocated into various identifiable assets or liabilities based on their fair value as of the acquisition date. Where there are specific identifiable assets which cannot be substituted taking substantial proportion in a group of assets or net assets and the future cash flow of the acquiree also highly depends on such specific identifiable assets, the remaining amount between acquisition costs less fair value of other identifiable assets shall be entirely recorded in such specific identifiable assets. Business merger includes the business merger under the common control and the different control.
(1) Business merger under the common control
Business merger under the common control means the enterprises participated in the merger are subject to the ultimate control of the same party or the same multi-party before and after the merger, and the control is not temporary. For the business merger under the same control, the party obtains the control rights of other enterprises participated in the merger on the merger date is the merging party, and other enterprises participated in the merger are the merged party. The merger date refers to the date that the merging party obtains the control rights of the merged party.
The assets and liabilities of the merging party should be measured in accordance with the book value of the combined party on the combining date. The balance between the book value of the net asset obtained by the merging party and the book value of the merger consideration (or the total face value of the issued shares) paid by the merging party, and adjust the
capital reserve (share premium); for the capital reserve (share premium) insufficient to reduce, adjust the retained earnings. All direct expenses the merging party spent for the business merger are included in the current profit and loss when the business merger occurred.
(2) Business merger under the different control
Business merger under the different control means the enterprises participated in the merger are not subject to the ultimate control of the same party or the same multi-party before and after the merger. For the business merger under the different control, the party obtains the control rights of other enterprises participated in the merger on the acquisition date is the acquirer, and other enterprises participated in the merger are the acquiree. The acquisition date refers to the date that the acquirer obtains the control rights of the acquiree.
As for the business merger under the different control, the merger costs contain the assets paid by the acquirer for obtaining the control rights of the acquiree on the acquisition date, the liabilities incurred or assumed, and the fair value of the issued equity securities. The intermediary fees such as auditing, legal services and consulting services costs and other administrative costs incurred by the business merger are charged to the current profit and loss. The transaction costs of the equity securities or debt securities issued as the combination consideration by the acquirer are reckoned in the initially recognized amount of the equity securities or debt securities. As for the involved or existing consideration reckoned in the merger costs in accordance with the fair value on the acquisition date, correspondingly adjust the consolidated goodwill for these needs to be adjusted or possess consideration because new or further evidence appears for the situations existing on the acquisition date within 12 months after the acquisition date The merger costs of the acquirer and the net identifiable assets obtained in the merger are reckoned in accordance with the fair value on the acquisition date. The balance of which the merger costs are more than the net identifiableassets’ fair value share of the acquiree obtained in the merger on the acquisition date is recognized as goodwill. For those whose merger costs are less than the net identifiableassets’ fair value share of the acquiree obtained in the merger, recheck the obtained identifiable assets, liabilities, and the fair value with contingent liability of the acquiree, and the measurement of the merger costs at first, while for those whose merger costs are still less than the net identifiableassets’ fair value share of the acquiree obtained in the merge after rechecking, reckon its the balance in the current profit and loss.
For the deductable temporary difference obtained by the acquirer from the acquiree that is not confirmed because of not meeting the assets confirmation requirements of the deferred income taxes on the acquisition date, if there is new or further information states that the relevant conditions on the acquisition date has already existed and the economic interests on the acquisition date brought by the deductable temporary difference can be realized by the acquiree within 12 months after the acquisition date, then confirm the relevant deferred income tax assets, and decrease the goodwill, as for the goodwill insufficient for reducing, confirm the difference to be the current profit and loss; except for the above-mentioned cases, reckon those deferred income tax assets related to the business merger in the current profit and loss.
For a business combination not involving enterprises under common control and achieved in stages, the company shall determine whether the business combination shall be regarded as―a bundle oftransactions‖ in accordance with―Interpretation 5 on Accounting Standards for BusinessEnterprises‖ (Cai Kuai 2012 No. 19) and clause 51 of ASBE 33- Consolidated Financial Statements relating to judgment standard for―a bundle oftransactions‖(please refer to this Note IV 5(2)). When the business combination is regarded as―a bundle oftransactions‖, the accounting treatment for the business combination shall be in accordance with the previous paragraphs and Note IV 13―long term equityinvestment‖; when the business combination is not regarded as―a bundle oftransactions‖, the accounting treatment should be different when comes to individual financial report and consolidated financial report.
In the individual financial statements, the initial cost of the investment shall be the sum of the carrying amount of its previously-held equity interest in the acquiree prior to the acquisition date and the amount of additional investment made to the acquiree at the acquisition date. Other comprehensive income involved in the previously-held equity interest of the acquiree prior to the acquisition date shall be subject to accounting treatment on the same basis adopted by the acquiree in
its direct disposal of related assets or liabilities (which are reclassified as investment income during the period , net of the audited changing corresponding shares resulted from the net liability and net assets remeasured and set by acquiree according to equity method ).
In the consolidate financial statements, the previously-held equity interest of the acquire is re-measured according to the fair value at the acquisition date; the difference between the fair value and the carrying amount is recognized as investment income for the current period; the amount recognized in other comprehensive income relating to the previously-held equity interest in the acquire shall be subject to accounting treatment on the same basis adopted by the acquire in its direct disposal of related assets or liabilities (which are reclassified as investment income during the period, net of the audited changing corresponding shares resulted from the net liability and net assets re-measured and set by acquire according to equity method).
5. Preparing method of consolidated financial statements
(1) Determinate principles of range for consolidation financial statement
The scope of consolidated financial statements is determined based on control. Control is the power to govern the investees so as to obtain benefits from their operating activities by the involvement in the relevant activities of the investee. The scope of consolidation comprises the Company and all of its subsidiaries. Subsidiaries are the entities controlled by the Company. Once relevant elements involved in the above definition of control change due to alteration of relevant facts or situations, the Company will make evaluation again.
(2) Preparing method of consolidated financial statements
Since the date of gaining the net assets and the actual control rights of the production and operation decision-making of the subsidiaries, the Group has started to bring it into the consolidation scope; stop to bring into the consolidation scope since the date of losing the actual control rights. As for the disposed subsidiaries, the business performance and cash flow before the disposal have been suitably included in the consolidated income statement and the consolidated cash flow statement; as for the subsidiaries currently disposed;don’t adjust the opening balance of the consolidated balance sheet. For the subsidiaries increased by the business merger under the different control, the business performance and cash flow after its acquisition date have been suitably included in the consolidated income statement and the consolidated cash flow statement, anddon’t adjust the opening balance and correlation date of the combined financial statement. For the subsidiaries increased by the business merger under the common control, the business performance and cash flow from the beginning period of the merger to its merger date have been suitably included in the consolidated income statement and the consolidated cash flow statement, and adjust the correlation date of the combined financial statement at the same time.
When preparing the consolidated financial statements, for the accounting policies adopted by the subsidiaries and the Company being inconsistent during the accounting time period, adjust in accordance with the accounting policies of the Company and the financial statements of the subsidiaries during the accounting time period. As for the subsidiaries obtained by the business merger under the different control, adjust the financial statements based on the fair value of the net identifiable assets on the acquisition date.
All significant intra-group current account balances, transactions and unrealized profits are offset in the preparation of consolidated financial statements.
The stockholders' equity of the subsidiaries and the shares not belong to the Company in the current net profit or loss are respectively served as the separate presentation in the stockholders' equity and net profits of the minority interest and minority interest income in the consolidated financial statements. The shares of the current net profit or loss of the subsidiaries that belong to the minority interest are listed under net profit item in the consolidated profit statement as―minority interestincome‖ item. Reduce the minority interest for those that thesubsidiaries’ losses shared by the minority shareholders exceed the shares that the minority shareholders gained from the owner's equity at the beginning period of this subsidiary.
When losing the control rights of the original sub companies because of disposing some equity investment or other reasons, re-measure the residual equity in accordance with its fair value on the date of losing the control rights. Use the sum of the consideration obtained by disposing the stock rights and the fair value of the residual equity to minus the balance among the netassets’ shares of the original sub companies continuously calculated since the acquisition date in accordance with the original shareholding ratio, and then reckon in the current investment income when losing the control rights. The other consolidated incomes related to the equity investment of the original sub companies, It shall be subject to accounting treatment on the same basis adopted by the acquiree in its direct disposal of related assets or liabilities during the period when the control ceases (which are reclassified as investment income for the current period, other than changes resulting from re-measuring net liability or net assets under defined benefit plan of the original subsidiary). Thereafter, do the follow-up measurement for thispart’s residual equity in accordance with the relevant provisions of―Accounting Standards for Business Enterprises No.2 - long-term equityinvestment‖ or―Accounting Standards for Business Enterprises No.22 - financial instruments recognition andmeasure’, refer to the Note IV 13―long-term equityinvestment‖ or the Note IV 9―financialinstruments‖ for details.
The company shall determine whether loss of control arising from disposal in a series of transactions should be regarded as a bundle of transactions. When the economic effects and terms and conditions of the disposal transactions met one or more of the following situations, the transactions shall normally be accounted for as a bundle of transactions: (i) The transactions are entered into after considering the mutual consequences of each individual transaction; (ii) The transactions need to be considered as a whole in order to achieve a deal in commercial sense; (iii) The occurrence of an individual transaction depends on the occurrence of one or more individual transactions in the series; (iv) The result of an individual transaction is not economical, but it would be economical after taking into account of other transactions in the series. When the transactions are not regarded as a bundle of transactions, the individual transactions shall be accounted as―disposal of a portion of an interest in a subsidiary which does not lead to loss ofcontrol‖) (for details, please refer to Note IV13(2)④) and―disposal of a portion of an interest in a subsidiary which lead to loss ofcontrol‖ (details are set out in previous paragraph). When the transactions are regarded as a bundle of transactions, the transactions shall be accounted as a single disposal transaction; however, the difference between the consideration received from disposal and the share of net assets disposed in each individual transactions before loss of control shall be recognized as other comprehensive income, and reclassified as profit or loss arising from the loss of control when control is lost.
6. Classification of joint arrangement and accounting for joint operations
A joint arrangement refers to an arrangement jointly controlled by two or more parties. In accordance with theCompany’s rights and obligations under a joint arrangement, the Company classifies joint arrangements into: joint ventures and joint operations. Joint operations refer to a joint arrangement during which the Company is entitled to relevant assets and obligations of this arrangement. Joint ventures refer to a joint arrangement during which the Company only is entitled to net assets of this arrangement.
Investment in joint venture is accounted for using the equity method accounting to the accounting policies referred to Note IV13(2)②―Long-term equity investment accounted for using the equitymethod‖.
The Company shall, as a joint venture, recognise the assets held and obligations assumed solely by the Company, and recognise assets held and obligations assumed jointly by the Company in appropriation to the share of the Company; recognise revenue from disposal of the share of joint operations of the Company; recognise fees solely occurred by Company and recognise fees from joint operations in appropriation to the share of the Company.
When the Company, as a joint venture, invests or sells assets to or purchase assets (the assets dose not constitute a business, the same below) from joint operations, the Company shall only recognise the part of profit or lost from this transaction attributable to other parties of joint operations before these assets are sold to a third party. In case of an impairment loss incurred on these assets which meets the requirements as set out in―Accounting Standards for Business Enterprises No. 8– AssetImpairment‖, the Company shall recognise the full amount of this loss in relation to its investment in or sale of assets
to joint operations, or recognise the loss according to theCompany’s share of commitment in relation to the its purchase of assets from joint operations.
7. Determination criteria of cash and cash equivalent
Cash and cash equivalent of the Company including stock cash, deposits available for payment at any time and the investment held by the Company with the follow characters obtained at the same time: short term (expire within 3 months commencing from purchase day), active liquidity, easy to convert to already-known cash, and small value change risks. 8. Foreign Currency Operations and translation of foreign currency statements
(1) Basis for translation of foreign currency transactions
The foreign currency transactions of the Company, when initially recognized, are translated into functional currency at the prevailing spot exchange rate on the date of exchange (usually refers to the middle rate of the exchange rate for the day as quoted by thePeople’s Bank of China, the same below) while theCompany’s foreign currency exchange operations and transactions in connection with foreign currency exchange shall be translated into functional currency at the exchange rate actually adopted.
(2) Basis for translation of foreign currency monetary items and foreign currency non-monetary items
On the balance sheet date, foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. All differences are included in the consolidated income statement, except for:① the differences arising from foreign currency borrowings related to the acquisition or construction of fixed assets which are qualified for capitalization; and② except for other carrying amounts of the amortization costs, the differences arising from changes of the foreign currency items available for sale.
When preparing consolidated financial statement involving overseas operation, in case there is foreign currency monetary items which substantially constitute net investment in overseas operation, the exchange difference arising from exchange rate fluctuation shall be included in other comprehensive income; and shall transfer to gains and losses from disposal for the current period when the overseas operation is disposed of.
The foreign currency non-monetary items measured at historical cost shall still be measured by the functional currency translated at the spot exchange rate on the date of the transaction. Foreign currency non-monetary items measured at fair value are translated at the spot exchange rate on the date of determination of the fair value. The difference between the amounts of reporting currency before and after the translation will be treated as changes in fair value (including changes in foreign exchange rates) and recognized in profit or loss for the period or recognized as other consolidated income.
(3) Translation of foreign currency financial statement
When preparing consolidated financial statement involving overseas operation, in case there is foreign currency monetary items which substantially constitute net investment in overseas operation, the exchange difference arising from exchange rate fluctuation shall be included in other comprehensive income as―translation difference of foreign currencystatement‖; and shall transfer to gains and losses from disposal for the current period when the overseas operation is disposed of. Foreign currency financial statement for overseas operation is translated into RMB statement by the following means: assets and liabilities in balance sheet are translated at the spot rate as of balance sheet date;owner’s equity items (other than undistributed profit) are translated at the spot rate prevailing on the date of occurrence. Income and expense items in profit statement are translated at the spot rate prevailing on the date of transactions. Beginning undistributed profit represents the translated ending undistributed profit of previous year; ending undistributed profit is allocated and stated as several items upon translation. Upon translation, difference between assets, liabilities andshareholders’ equity items shall be recorded as foreign currency financial statement translation difference and recognized as other comprehensive income. In case of disposal of overseas operation where control is lost, foreign currency financial statement translation difference relating to the overseas operation as stated undershareholders’ equity in balance sheet shall be transferred to current gains and losses of disposal in full or under the proportion it disposes.
Foreign currency cash flow and cash flow of overseas subsidiary are translated at the spot rate prevailing on the date of occurrence of cash flow. Influence over cash from exchange rate fluctuation is taken as adjustment items to separately stated in cash flow statement.
The beginning figure and previous year actual figures are stated at the translated figures in previous year financial statement. If the Company loses control over overseas operation due to disposal of all theowners’ equity or part equity investment in the overseas operation or other reasons, foreign currency financial statement translation difference relating to the overseas operation attributable toowners’ equity of parent company as stated undershareholders’ equity in balance sheet shall be transferred to current gains and losses of disposal in full.
If the Company reduces equity proportion while not loses control over overseas operation due to disposal of part equity investment in the overseas operation or other reasons, foreign currency financial statement translation difference relating to the disposed part will be vested to minority interests and will not transfer to current gains and losses. When disposing part equity interests of overseas operation which is associate or joint venture, foreign currency financial statement translation difference relating to the overseas operation shall transfer to current disposal gains and losses according to the disposed proportion.
9. Financial instruments
(1) Method of determination of the fair value for financial assets and financial liabilities
Fair value represents the price that market participator can receive for disposal of an asset or he should pay for transfer of a liability in an orderly transaction happened on the measurement date. Financial instruments exist in an active market. Fair value is determined based on the quoted price in such market. An active market refers to where pricing is easily and regularly obtained from exchanges, brokers, industrial organizations and price-fixing service organizations, representing the actual price of a market transaction that takes place in a fair deal. While financial instruments do not exist in an active market, the fair value is determined using valuation techniques. Valuation technologies include reference to be familiar with situation and prices reached in recent market transactions entered into by both willing parties, reference to present fair values of similar other financial instruments, cash flow discounting method and option pricing models.
(2) Classification, recognition and measurement of the financial assets
Financial asset or financial liability is recognized when the Company becomes a party to financial instrument contract. Financial assets and liabilities are initially measured at fair value. For financial assets and financial liabilities classified as fair value through profit or loss, relevant transaction costs are directly recognized in profit or loss for the period. For financial assets and financial liabilities classified as other categories, relevant transaction costs are included in the amount initially recognized.
①Financial assets carried at fair value through profit or loss for the current period
They include financial assets held for trading and financial assets designated as at fair value through profit or loss for the current period.
Financial assets may be classified as financial assets held for trading if one of the following conditions is met: A. the financial assets is acquired or incurred principally for the purpose of selling it in the near term; B. the financial assets is part of a portfolio of identified financial instruments that are managed together and for which there is objective evidence of a recent pattern of short-term profit taking; or C. the financial assets is a derivative, excluding the derivatives designated as effective hedging instruments, the derivatives classified as financial guarantee contract, and the derivatives linked to an equity instrument investment which has no quoted price in an active market nor a reliably measured fair value and are required to be settled through that equity instrument.
A financial asset may be designated as at FVTPL upon initial recognition only when one of the following conditions is satisfied: A. Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise result from measuring assets or recognizing the gains or losses on them on different bases; or B. The financial
asset forms part of a group of financial assets or a group of financial assets and financial liabilities, which is managed and its performance is evaluated on a fair value basis, in accordance with theGroup’s documented risk management or investment strategy, and information about the grouping is reported to key management personnel on that basis.
Financial assets carried at fair value through profit or loss for the current period is subsequently measured at fair value. The gain or loss arising from changes in fair value and dividends and interest income related to such financial assets are charged to profit or loss for the current period.
②Held-to-maturity investments
They are non-derivative financial assets with fixed maturity dates and fixed or determinable payments that the Group has positive intent and ability to hold to maturity.
Held-to-maturity investments are subsequently measured at amortized cost using the effective interest method. Gain or loss on derecognition, impairment or amortization is recognized through profit or loss for the current period.
The effective interest method is a method of calculating the amortized cost of a financial asset and of allocating interest income or expense over each period based on the effective interest of a financial asset or a financial liability (including a group of financial assets or financial liabilities). The effective interest is the rate that discounts future cash flows from the financial asset or financial liability over its expected life or (where appropriate) a shorter period to the carrying amount of the financial asset or financial liability.
In calculating the effective interest rate, the Group will estimate the future cash flows (excluding future credit losses) by taking into account all contract terms relating to the financial assets or financial liabilities whilst considering various fees, transaction costs and discounts or premiums which are part of the effective interest rate paid or received between the parties to the financial assets or financial liabilities contracts.
③ Loans and receivable
They are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Financial assets, including bills receivable, accounts receivable, interest receivable, dividends receivable and other receivables, are classified as loans and receivables by the Group.
Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or loss arising from derecognition, impairment or amortization is recognized in current profit or loss.
④Available-for-sale financial assets
They include non-derivative financial assets that are designated in this category on initial recognition, and the financial assets other than the financial assets at fair value through profit and loss, loans and receivables and held-to-maturity investments.
The closing cost of available-for-sale debt instruments are determined based on amortised cost method, which means the amount of initial recognition less the amount of principle already repaid, add or less the accumulated amortised amount arising from the difference between the amount due on maturity and the amount initially recognised using effective interest rate method, and less the amount of impairment losses recognised. The closing cost of available-for-sale equity instruments is equal to its initial acquisition cost.
Available-for-sale financial assets are subsequently measured at fair value. The gain or loss on change in fair value are recognized as other comprehensive income, except for impairment loss and exchange differences arising from foreign monetary financial assets and amortized cost which are accounted for through profit or loss for the current period. The financial assets will be transferred out of the financial assets on derecognition and accounted for through profit or loss for the current period.
However, equity instrument investment which is not quoted in active market and whose fair value cannot be measured reliably, and derivative financial asset which is linked to the equity instrument and whose settlement is conditional upon delivery of the equity instrument, shall be subsequently measured at cost.
Interests received from available-for-sale financial assets held and the cash dividends declared by the investee are recognized as investment income.
(3) Impairment of financial assets
In addition to financial assets at fair value through profit or loss for the current period, the Group reviews the book value of other financial assets at each balance sheet date and provide for impairment where there is objective evidence that financial assets are impaired.
For a financial asset that is individually significant, the Group assesses the asset individually for impairment. For a financial asset that is not individually significant, the Group assess the asset individually for impairment or include the asset in a group of financial assets with similar credit risk characteristics and collectively assess them for impairment. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether the financial asset is individually significant or not, the financial asset is included in a group of financial assets with similar credit risk characteristics and collectively assessed for impairment. Financial assets for which an impairment loss is individually recognized are not included in the collective assessment for impairment.
①Impairment of held-to-maturity investments, loans and receivables
The carrying amount of financial assets measured at costs or amortized costs are subsequently reduced to the present value discounted from its projected future cash flow. The reduced amount is recognized as impairment loss and recorded as profit or loss for the period. After recognition of the impairment loss from financial assets, if there is objective evidence showing recovery in value of such financial assets impaired and which is related to any event occurring after such recognition, the impairment loss originally recognized shall be reversed to the extent that the carrying value of the financial assets upon reversal will not exceed the amortized cost as at the reversal date assuming there is no provision for impairment.
②Impairment of available-for-sale financial assets
In the event that decline in fair value of the available-for-sale equity instrument investment is regarded as―severedecline‖ or―non-temporarydecline‖ on the basis of comprehensive related factors, it indicates that there is impairment loss of the available-for-sale equity instrument investment.
Thecompany’s standards to judge if the fair value of available for sale equity instruments investment has a―severe‖ depreciation is that if the fair value of a single available for sale financial asset has a sharp fall which exceeds50% of its holding cost, then this available for sale financial asset is affirmed to have a severe decrease in value and should have the provision for asset impairment to confirm the impairment loss.
Thecompany’s standards to judge if the fair value of available for sale equity instruments investment has a―non-temporary" depreciation is that if the fair value of a single available for sale financial asset has a sharp fall and this downtrend is predicted to be non-temporary with the duration over a year that cannot be fundamentally changed in the whole holding period, then this available for sale financial asset is affirmed to have a non-temporary decrease in value and should have the provision for asset impairment to confirm the impairment loss.
When the available-for-sale financial assets impair, the accumulated loss originally included in the capital reserve arising from the decrease in fair value was transferred out from the capital reserve and included in the profit or loss for the period. The accumulated loss that transferred out from the capital reserve is the balance of the acquired initial cost of asset, after deduction of the principal recovered, amortized amounts, current fair value and the impairment loss originally included in the profit or loss.
After recognition of the impairment loss, if there is objective evidence showing recovery in value of such financial assets impaired and which is related to any event occurring after such recognition in subsequent periods, the impairment loss
originally recognized shall be reversed. The impairment loss reversal of the available-for-sale equity instrument will be recognized as other consolidated income, and the impairment loss reversal of the available-for-sale debt instrument will be included in the profit or loss for the period.
When an equity investment that is not quoted in an active market and the fair value of which cannot be measured reliably, or the impairment loss of a derivative financial asset linked to the equity instrument that shall be settled by delivery of that equity instrument, then it will not be reversed.
(4) Recognition and measurement of transfers of financial asset
Financial asset that satisfied any of the following criteria shall be derecognized:①the contract right to recover the cash flows of the financial asset has terminated;② the financial asset, along with substantially all the risk and return arising from the ownership of the financial asset, has been transferred to the transferee; and③ the financial asset has been transferred to the transferee, and the transferor has given up the control on such financial asset, though it does not assign maintain substantially all the risk and return arising from the ownership of the financial asset.
When the entity does not either assign or maintain substantially all the risk and return arising from the ownership of the financial asset and does not give up the control on such financial asset, to the extent of its continuous involvement in the financial asset, the entity recognizes it as a related financial asset and recognizes the relevant liability accordingly. The extent of the continuous involvement is the extent to which the entity exposes to changes in the value of such financial assets.
On derecognition of a financial asset, the difference between the following amounts is recognized in profit or loss for the current period: the carrying amount and the sum of the consideration received and any accumulated gain or loss that had been recognized directly in equity.
If a part of the financial assets qualifies for derecognition, the carrying amount of the financial asset is allocated between the part that continues to be recognized and the part that qualifies for derecognition, based on the fair values of the respective parts. The difference between the following amounts is recognized in profit or loss for the period: the sum of the consideration received and the carrying amount of the part that qualifies for derecognition and the aforementioned carrying amount.
For financial assets that are transferred with recourse or endorsement, the Company needs to determine whether the risk and rewards of ownership of the financial asset have been substantially transferred. If the risk and rewards of ownership of the financial asset have been substantially transferred, the financial assets shall be derecognised. If the risk and rewards of ownership of the financial assets have been retained, the financial assets shall not be derecognised. If the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial assets, the Company shall assess whether the control over the financial assets is retained, and the financial assets shall be accounted for according to the above paragraphs.
(5) Classification and measurement of financial liabilities
At initial recognition, financial liabilities are classified either as―financial liabilities at fair value through profit orloss‖ or―other financialliabilities‖. Financial liabilities are initially recognized at fair value. For financial liabilities classified as fair value through profit or loss, relevant transaction costs are directly recognized in profit or loss for the period. For financial liabilities classified as other categories, relevant transaction costs are included in the amount initially recognized.
① Financial liabilities at fair value through profit or loss for the period
The criteria for a financial liability to be classified as held for trading and designated as at financial liabilities at fair value through profit or loss are the same as those for a financial asset to be classified as held for trading and designated as at financial assets at fair value through profit or loss.
Financial liabilities at fair value through profit or loss for the period are subsequently measured at fair value. The gain or loss arising from changes in fair value and dividends and interest income related to such financial liabilities are included into the current profit or loss.
② Other financial liabilities
Derivative financial liabilities which are linked to equity instruments that are not quoted in an active market and the fair value of which cannot be measured reliably measured, and which shall be settled by delivery of equity instruments are subsequently measured at cost. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Gains or losses arising from derecognition or amortization is recognized in profit or loss for the current period.
③Financial guarantee contract
Financial guarantee contract in respect of financial liabilities not designed at fair value through profit or loss shall be initially measured at fair value, and subsequently measured at the lower between the amount determined under Accounting Standards for Enterprises No.13-Contingent issues and its initial measurement amount less accumulative amortization determined under Accounting Standards for Enterprises No.14-Revenue.
(6) Derecognition of financial liabilities
Financial liabilities are derecognized in full or in part only when the present obligation is discharged in full or in part. An agreement is entered between the Group (debtor) and a creditor to replace the original financial liabilities with new financial liabilities with substantially different terms, derecognize the original financial liabilities as well as recognize the new financial liabilities.
When financial liabilities is derecognized in full or in part, the difference between the carrying amount of the financial liabilities derecognized and the consideration paid (including transferred non-cash assets or new financial liability) is recognized in profit or loss for the current period.
(7) Derivatives and embedded derivatives
Derivatives are initially measured at fair value as of the execution date of relevant contract, and subsequently measured at fair value. Change of fair value of derivatives is recorded in profit or loss for the period.
In respect of mixed instruments containing embedded derivatives, if they are financial assets or financial liabilities not designated at fair value through profit or loss, and there is no close relation between embedded derivatives and such main contract in terms of economic characteristics and risk, separate instrument shares the same conditions with embedded derivatives and meets definition of derivatives, the embedded derivatives are split off from the mixed instruments and accounted for as separate derivative financial instrument. If an embedded derivative instrument cannot be measured separately upon acquisition or at subsequent balance sheet date, the mixed instruments shall be taken in its entirety as financial assets or financial liabilities designated at fair value through profit or loss.
(8) Offset of Financial Assets and Financial Liabilities
If the Group owns the legitimate rights of offsetting the recognized financial assets and financial liabilities, which are enforceable currently, and the Group plans to realize the financial assets or to clear off the financial liabilities by net amount method, the amount of the offsetting financial assets and financial liabilities shall be reported in the balance sheep. Otherwise, financial assets and financial liabilities are presented separately in the balance sheet without offsetting.
(9) Equity instruments
Equity instruments are any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. The Company issues (including refinancing), repurchases, sells or cancels equity instruments as movement of equity. No fair value change of equity instrument would be recognized by the Company. Transaction fees relating to equity transactions are deducted from equity.
The distribution (excluding the dividends) to the equity instrument holders by the Group shall reduce theshareholder’s equity. The Group shall not recognize the changes of the equityinstruments’ fair value. 10. Account receivable
Account receivable including receivables and other account receivables etc.
(1) Recognition standards for bad debt provision
On balance sheet date, the Company examined book value of the account receivable, if the followed objective evidence has been show for impairment occurred, impairment provision shall withdrawal:①the debtor has serious financial difficulties;②debtor violated the terms of the contract (such as interest or principal payment default or overdue etc.);③debtor probably close down or exercise other financial restructuring; and④other objective evidence showing impairment occurred on receivables.
(2) Withdrawal method for bad debt provision
①Recognition criteria and depreciation method for account receivable with large single amount and accrued for provision of bad debt on a single basis
Account receivable with over RMB one million and other account receivable with over RMB 500,000 are recognized as account receivable with large single amount.
The Company exercise impairment test separately on account receivable with large single amount, if no impairment been found in financial assets after separate testing, they shall be included in portfolios of accounts receivable with similar credit risk features for impairment tests.
For accounts receivable with confirmed impairment losses after separate tests, they shall not be included in portfolios of accounts receivable with similar credit risk features for impairment tests.
②Recognition criteria and depreciation method for account receivable with accrued for provision of bad debt on credit risk portfolio basis
A. Recognition basis for credit risk characteristics portfolio
As for the account receivable with minor single amount and those with major amount without impairment had been found after testing on a single basis, the Company grouping the financial assets according to similarity and relativity of the credit risk characteristics. The credit risk characteristics usually reflect the repaying capability for all due amount from debtors, in line with the terms of the contract, and related with the measurement of future cash flow on assets which has been examined. Recognition basis for different portfolio:
Item Basis
Age portfolio Divide the portfolio on the age of account receivable as a credit risk characteristics B. Depreciation method for bad debt provision recognized by credit risk characteristics portfolio
At the time of impairment testing, the bad debt amount will recognized by the estimated losses, according to historical losses experience, which has been occurred in account receivable portfolio, and current economic status as well as portfolio structure and similar credit risk characteristics (debt paying capability for debtor based on terms of the contract).
Depreciation method of bad debt provision in different portfolio:
Item Depreciation method
Item Depreciation method
Age portfolio Accrual bad debt provision by aging of accounts
a. Depreciation method of bad debt provision by aging of accounts in portfolio
Accrual ratio of account Accrual ratio of other Age
receivable(%) receivables(%) Within 1 year (including one year, the same below) No accrual No accrual
1-2 years 5 5
2-3 years 20 20
Over 3 years 50 50
③Accounts receivable that are individually insignificant but with bad debt provision provided on an individual basis: Account receivable with RMB one million at most and other account receivable with RMB 500,000 at most are recognized as account receivable with insignificant single amount.
As for the account receivable with insignificant single amount but with followed features, exercise impairment separately, if there has evidence of impairment, provision for bad debts shall be made at the difference of present value of estimated future cash flows in short of their book values, and shall be recognized as impairment losses: account receivable with dispute and arbitration involved or exist with the counter party; receivables which has obvious evidence that the debtor probably unable to performed payment obligations etc.
(3) Reversal of bad debt provisions
If there is evidence showing that the value of the account receivable has been recovered, and that the recovery is objectively related to events after recognition of the loss, the originally recognized impairment loss should be reversed and included in current profit and loss. However, the book values after such reversal shall not exceed the amortized costs of the account receivable on the reversal date, assuming there is no provision for impairment.
11. Inventories
(1) Classification of inventories
Inventory including raw materials, stock commodity and low value consumables etc.
(2) Pricing for inventories delivered and obtained
Inventories are priced at actual costs when acquired. Inventory cost includes procurement cost, processing cost and other costs. Raw materials and inventory commodities are measured under weighted average method when applied for use and delivered.
(3) Recognition for net realizable value of inventories and withdrawal method for inventory impairment provision
Net realizable value refers to the amount resulted byinventory’s estimated sale price minor the cost, which is going to occurred till end of the completion, estimated sales expenses and relevant taxes, in daily activities. At the time of recognizing the net realizable value for inventory, on basis of unambiguous evidence, take the purpose of inventory held and influence of events after the balance sheet date into account at the same time.
On balance sheet date, measure of the inventory is made as the lower of their cost and or net realizable
values. Provision for inventory depreciation reserve are made while the net realizable values below the cost. Inventory falling price reserves withdrawal usually base on the difference of the cost of single inventory which over the net realizable value. As for inventories with numerous quantity and low unit price, inventory depreciation provision is made based on categories of inventories.
After inventory impairment provision, if any factor rendering write-downs of the inventories has been eliminated as net realizable value higher than its book value resulted, the amounts written down are recovered and reversed from the inventory depreciation reserve, which has been provided for. The reversed amounts are included into the current profit and loss.
(4) Inventory system was the perpetual inventory system.
(5) Low value consumptions and packing materials are amortized under amortization method when applied for use.
12. Classified as assets held for sale
If a non-current asset can be promptly sold at its existing status only according to the practice terms in connection with disposal of this kind of assets, and the Company has already made resolution on disposal of the non-current asset and entered into irrevocable transfer agreement with the transferee, and this transfer will be completed within one year, then the non-current asset would be calculated as non-current asset held for sale which would be not applicable to depreciation or amortisation since the date of classification as asset held for sale, and would be measured at the lower of its carrying value less disposal cost and fair value less disposal cost. Non-current asset held for sale consists of single item asset and disposal group. If a disposal group is a group of assets as defined by No.8 of Business Accounting Standards-Assets Impairment, and goodwill arising from business combination shall be allocated to the group of assets under this accounting principle, or the disposal group constitutes one operation of the group of assets, then the disposal group includes the goodwill arising from business combination.
For single non-current asset and asset in disposal group classified as assets held for sale, they shall be presented in balance sheet separately as current assets. For liabilities in disposal group relating to the transferred assets classified as assets held for sale, they shall be presented in balance sheet separately as current liabilities.
If an asset or disposal group classified as held for sale no longer meets the recognition condition as non-current asset held for sale, the Company will cease such recognition and measure the asset at the lower of (1)the carrying value of the asset or disposal group prior to being classified as held for sale, based on the amount adjusted with the depreciation, amortisation or impairment which should have been recognised assuming it had not been classified as held for sale; (2)the recoverable amount on the date when the Company decides to cease disposal.
13. Long-term equity investments
Long-term equity investments under this section refer to long-term equity investments in which the Company has control, joint control or significant influence over the investee. Long-term equity investment without control or joint control or significant influence of the Group is accounted for as available-for-sale financial assets or financial assets measured at fair value with any change in fair value charged to profit or loss. Details on its accounting policy please refer to Note 9.―Financialinstruments‖ under section IV.
Joint control is theCompany’s contractually agreed sharing of control over an arrangement, which relevant activities of such arrangement must be decided by unanimously agreement from parties who share control. Significant influence is the power of the Company to participate in the financial and operating policy decisions of an investee, but to fail to control or joint control the formulation of such policies together with other parties.
(1) Determination of investment cost
For a long-term equity investment acquired through a business combination involving enterprises under common control,
the initial investment cost of the long-term equity investment shall be the absorbingparty’s share of the carrying amount of
theowner’s equity under the consolidated financial statements of the ultimate controlling party on the date of combination. The difference between the initial cost of the long-term equity investment and the cash paid, non-cash assets transferred as well as the book value of the debts borne by the absorbing party shall offset against the capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. If the consideration of the merger is satisfied by issue of equity securities, the initial investment cost of the long-term equity investment shall be the absorbingparty’s share of the carrying amount of theowner’s equity under the consolidated financial statements of the ultimate controlling party on the date of combination. With the total face value of the shares issued as share capital, the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall be used to offset against the capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. For business combination resulted in an enterprise under common control by acquiring equity of the absorbing party under common control through a stage-up approach with several transactions, these transactions will be judged whether they shall be treat as―transactions in abasket‖. If they belong to―transactions in abasket‖, these transactions will be accounted for a transaction in obtaining control. If they are not belong to―transactions in abasket‖, the initial investment cost of the long-term equity investment shall be the absorbingparty’s share of the carrying amount of theowner’s equity under the consolidated financial statements of the ultimate controlling party on the date of combination. The difference between the initial cost of the long-term equity investment and the aggregate of the carrying amount of the long-term equity investment before merging and the carrying amount the additional consideration paid for further share acquisition on the date of combination shall offset against the capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. Other comprehensive income recognised as a result of the previously held equity investment accounted for using equity method on the date of combination or recognised for available-for-sale financial assets will not be accounted for.
For a long-term equity investment acquired through a business combination involving enterprises not under common control, the initial investment cost of the long-term equity investment shall be the cost of combination on the date of acquisition. Cost of combination includes the aggregate fair value of assets paid by the acquirer, liabilities incurred or borne and equity securities issued. For business combination resulted in an enterprise not under common control by acquiring equity of the acquiree under common control through a stage-up approach with several transactions, these transactions will be judged whether they shall be treat as―transactions in abasket‖. If they belong to―transactions in abasket‖, these transactions will be accounted for a transaction in obtaining control. If they are not belong to―transactions in abasket‖, the initial investment cost of the long-term equity investment accounted for using cost method shall be the aggregate of the carrying amount of equity investment previously held by the acquiree and the additional investment cost. For previously held equity accounted for using equity method, relevant other comprehensive income will not be accounted for. For previously held equity investment classified as available-for-sale financial asset, the difference between its fair value and carrying amount, as well as the accumulated movement in fair value previously included in the other comprehensive income shall be transferred to profit or loss for the current period.
Agent fees incurred by the absorbing party or acquirer for the acquisition such as audit, legal service, and valuation and consultation fees, and other related administration expenses are charged to profit or loss in the current period at the time such expenses incurred.
The long-term equity investment acquired through means other than a business combination shall be initially measured at its cost. Such cost is depended upon the acquired means of long-term equity investments, which is recognised based on the purchase cost actually paid by the Company in cash, the fair value of equity securities issued by the Group, the agreed value of investment contract or agreement, the fair value or original carrying amounts of the non-monetary asset exchange transaction which the asset will be transferred out of the Company, and the fair value of long-term equity investment itself. The costs, taxes and other necessary expenses that are directly attributable to the acquisition of the long-term equity investments are also included in the investment cost. For additional equity investment made in order to obtain significant influence or common control over investee without resulted in control, the relevant cost for long-term equity investment
shall be the aggregate of fair value of previously held equity investment and additional investment cost determined according to―Accounting Standard for Business Enterprises No. 22– Recognition and measurement of FinancialInstruments‖.
(2) Subsequent measurement and income recognition method
Long term equity investment by which the Company has common control (other than that constituting joint operation) or significant influence in investee is measured under equity method. In addition, long term equity investment by which the Company is able to exercise control in investee is measured under cost method in financial statements.
①Long term equity investment measured under cost method
Under cost method, long term equity investment is measured at initial investment cost, and cost of long term equity investment shall be adjusted in case of adding or recovering investment. Other than the price actually paid when obtaining investment or cash dividends or distribution declared but not paid in consideration, investment income for the period would be recognised based on the cash dividend or distribution declared by the investee.
② Long-term equity investments accounted for using the equity method
Under the equity method, where the initial investment cost of a long-term equity investment exceeds theinvestor’s interest in the fair value of theinvestee’s identifiable net assets at the acquisition date, no adjustment shall be made to the initial investment cost. Where the initial investment cost is less than theinvestor’s interest in the fair value of theinvestee’s identifiable net assets at the acquisition date, the difference shall be charged to profit or loss for the current period, and the cost of the long term equity investment shall be adjusted accordingly.
Under the equity method, investment gain and other comprehensive income shall be recognised based on theGroup’s share of the net profits or losses and other comprehensive income made by the investee, respectively. Meanwhile, the carrying amount of long-term equity investment shall be adjusted. The carrying amount of long-term equity investment shall be reduced based on theGroup’s share of profit or cash dividend distributed by the investee. In respect of the other movement of net profit or loss, other comprehensive income and profit distribution of investee, the carrying value of long-term equity investment shall be adjusted and included in the capital reserves. The Group shall recognise its share of theinvestee’s net profits or losses based on the fair values of theinvestee’s individual separately identifiable assets at the time of acquisition, after making appropriate adjustments thereto. In the event of inconformity between the accounting policies and accounting periods of the investee and the Company, the financial statements of the investee shall be adjusted in conformity with the accounting policies and accounting periods of the Company. Investment gain and other comprehensive income shall be recognised accordingly. In respect of the transactions between the Group and its associates and joint ventures in which the assets disposed of or sold are not classified as operation, the share of unrealised gain or loss arising from inter-group transactions shall be eliminated by the portion attributable to the Company. Investment gain shall be recognised accordingly. However, any unrealised loss arising from inter-group transactions between the Group and an investee is not eliminated to the extent that the loss is impairment loss of the transferred assets. In the event that the Group disposed of an asset classified as operation to its joint ventures or associates, which resulted in acquisition of long-term equity investment by the investor without obtaining control, the initial investment cost of additional long-term equity investment shall be the fair value of disposed operation. The difference between initial investment cost and the carrying value of disposed operation will be fully included in profit or loss for the current period. In the event that the Group sold an asset classified as operation to its associates or joint ventures, the difference between the carrying value of consideration received and operation shall be fully included in profit or loss for the current period. In the event that the Company acquired an asset which formed an operation from its associates or joint ventures, relevant transaction shall be accounted for in accordance with―Accounting Standards for Business Enterprises No. 20―Businesscombination‖. All profit or loss related to the transaction shall be accounted for.
TheGroup’s share of net losses of the investee shall be recognized to the extent that the carrying amount of the long-term equity investment together with any long-term interests that in substance form part of theinvestor’s net investment in the investee are reduced to zero. If the Group has to assume additional obligations, the estimated obligation assumed shall be provided for and charged to the profit or loss as investment loss for the period. Where the investee is making profits in subsequent periods, the Group shall resume recognizing its share of profits after setting off against the share of unrecognized losses.
If there is debit variation in relation to the long-term equity investments in associates and joint venture held prior to first adoption of the Accounting Standards for Business Enterprises by the Group on 1 January 2007, the amounts amortized over the original residual term using the straight-line method is included in the profit or loss for the period.
③Acquisition of minority interests
Upon the preparation of the consolidated financial statements, since acquisition of minority interests increased of long-term equity investment which was compared to fair value of identifiable net assets recognized which are measured based on the continuous measurement since the acquisition date (or combination date) of subsidiaries attributable to the Group calculated according to the proportion of newly acquired shares, the difference of which recognized as adjusted capital surplus, capital surplus insufficient to set off impairment and adjusted retained earnings.
④Disposal of long-term equity investments
In these consolidated financial statements, where the parent company disposes of a portion of the long term equity investments in a subsidiary without a change in control, the difference between disposal cost and disposal of long-term equity investments relative to the net assets of the subsidiary is charged to theshareholders’ equity. As for the disposal of a portion of the long term equity investments in a subsidiary by the parent company leading to lose of control over such subsidiary, it shall be accounted for under the relevant accounting policies described in Note IV.5-(2) Headed―preparation methods for consolidated financialstatements‖.
On disposal of a long-term equity investment otherwise, the difference between the carrying amount of the investment and the actual consideration paid is recognized through profit or loss in the current period.
In respect of long-term equity investment at equity with the remaining equity interest after disposal also accounted for using equity method, other comprehensive income previously underowners’ equity shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability by investee on pro rata basis at the time of disposal. Theowners’ equity recognised for the movement of otherowners’ equity (excluding net profit or loss, other comprehensive income and profit distribution of investee) shall be transferred to profit or loss for the current period on pro rata basis.
In respect of long-term equity investment at cost with the remaining equity interest after disposal is also accounted for at cost, other comprehensive income recognised due to measurement at equity or recognition and measurement for financial instruments prior to obtaining control over investee shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability by investee and carried forward to current gains and losses on pro rata basis. The movement of otherowners’ equity (excluding net profit or loss, other comprehensive income and profit distribution of investee) shall be transferred to profit or loss for the current period on pro rata basis.
In the event of loss of control over investee due to partial disposal of equity investment by the Group, in preparing separate financial statements, the remaining equity interest which can apply common control or impose significant influence over the investee after disposal shall be accounted for using equity method. Such remaining equity interest shall be treated as accounting for using equity method since it is obtained and adjustment was made accordingly. For remaining equity interest which cannot apply common control or impose significant influence over the investee after disposal, it shall be accounted for using the recognition and measurement standard of financial instruments. The difference between its fair value and carrying amount as at the date of losing control shall be included in profit or loss for the current period. In respect of other comprehensive income recognised using equity method or the recognition and measurement standard of financial
instruments before the Group obtained control over the investee, it shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability by investee at the time when the control over investee is lost. Movement of otherowners’ equity (excluding net profit or loss, other comprehensive income and profit distribution under net asset of investee accounted for and recognised using equity method) shall be transferred to profit or loss for the current period at the time when the control over investee is lost. Of which, for the remaining equity interest after disposal accounted for using equity method, other comprehensive income and otherowners’ equity shall be transferred on pro rata basis. For the remaining equity interest after disposal accounted for using the recognition and measurement standard of financial instruments, other comprehensive income and otherowners’ equity shall be fully transferred.
In the event of loss of common control or significant influence over investee due to partial disposal of equity investment by the Group, the remaining equity interest after disposal shall be accounted for using the recognition and measurement standard of financial instruments. The difference between its fair value and carrying amount as at the date of losing common control or significant influence shall be included in profit or loss for the current period. In respect of other comprehensive income recognised under previous equity investment using equity method, it shall be accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability by investee at the time when equity method was ceased to be used. Movement of otherowners’ equity (excluding net profit or loss, other comprehensive income and profit distribution under net asset of investee accounted for and recognised using equity method) shall be transferred to profit or loss for the current period at the time when equity method was ceased to be used.
The Group disposes its equity investment in subsidiary by a stage-up approach with several transactions until the control over the subsidiary is lost. If the said transactions belong to―transactions in abasket‖, each transaction shall be accounted for as a single transaction of disposing equity investment of subsidiary and loss of control. The difference between the disposal consideration for each transaction and the carrying amount of the corresponding long-term equity investment of disposed equity interest before loss of control shall initially recognised as other comprehensive income, and subsequently transferred to profit or loss arising from loss of control for the current period upon loss of control.
14. Investment real estate
Investment real estate is the real estate that held by the Company for purpose of obtaining rent or capital appreciation or both purpose received. Investment real estate including rented land use right, land use right held ready for transfer after appreciation and rented buildings etc.
The investment real estate shall be measured initially at the cost. The subsequent spending related to the investment real estate, if it is very likely for the related economi interest to flow in and its cost can be reliably measured, shall be included in the cost for the investment real estate. Other subsequent spending shall be included in the current profit or loss when occurring.
The Company applies the cost model for subsequent measurement of investment real estate, and depreciates and amortizes it as per the policy consistent to those for the houses and buildings and land use right.
For details about the methods for impairment testing of the investment real estate and for accrual of impairment provision, see Notie IV 20―Impairment of long termassets‖.
Where property for own use or inventory transfers to investment property, or investment property transfers to property for own use, carrying value before such transfer shall be taken as book value after such transfer.
In the event that an investment property is converted to an owner-occupied property, such property shall become fixed assets or intangible assets since the date of its conversion. In the event that an owner-occupied property is converted to real estate held to earn rentals or for capital appreciation, such fixed assets or intangible assets shall become an investment property since the date of its conversion. Upon the conversion, investment property which is measured at cost is accounted for with the carrying value prior to conversion, and investment property which is measured at fair value is accounted for with the fair value as of the conversion date.
If an investment property is disposed of or if it withdraws permanently from use and no economic benefit will be obtained
from the disposal, the recognition of it as an investment property shall be terminated. When an investment property is sold, transferred, retired or damaged, the amount of proceeds on disposal of the property net of the carrying amount and related tax and surcharges is recognised in profit or loss for the current period.
15. Fixed assets
(1) Recognition criteria of fixed assets
Fixed assets refer to the tangible assets held for the purpose of producing commodities, rendering services, renting or business management with useful lives exceeding one fiscal year. Fixed assets are only recognised when the relevant economic benefits are likely to inflow to the Company and their cost can be measured reliably. Fixed assets are initially measured at cost taking into account predicted disposal expenses.
(2) Depreciation method of fixed assets
The initial measurement of a fixed assets shall be made at its cost and consider expected discard expenses factors alternatives. Accrual depreciation of fixed assets shall be made based on straight-line depreciation within the service life since the second month, when the fixed assets reached its expected condition for use. Service life, estimated net residual value and annual depreciation rate for vary fixed assets are as:
Annual depreciation Type Depreciation term (year) Residual rate(%)
rate(%) House and buildings 35 3 2.77 Machinery equipment 12 3 8.08 Transportation equipment 7 3 13.86 Electronic equipment 7 3 13.86 Office and other equipment 7 3 13.86 Decoration charge for self-owned houses 10 0 10.00 Estimated net residual value is the amount obtained from disposal of such fixed assets after estimated disposal expense deducted, on assumption basis of the fixed assets has full estimated service life and in an anticipating condition of service life terminated.
(3) Impairment test method and accrual of depreciation reserves for fixed asset
Impairment test method and accrual of depreciation reserves for fixed asset please found in―20. Impairment of non-current and non-financialassets‖ in Note IV.
(4) Others
As for the subsequent expenditure related to fixed assets, if the economic benefits related to the fixed assets is probable to flow into the Company and its cost could be measured reliably, then the expenditure shall be included in costs of the fixed assets, and the carrying value of the replaced portion shall be derecognized. Other subsequent expenditures other than this shall be included in profits or losses of the period when occurred.
The disposal income from disposal, transfer, dumping or damage of fixed assets less its carrying value and related tax expenses shall be recorded in profits or losses of the period.
The Company, at least, re-reviews the use of life, projected net residual value and depreciation method of fixed assets at the end of year. For any change of the above factor, it shall be dealt as change of accounting estimation.
16. Construction-in-progress
Cost of construction-in-progress should recognized by the actual construction costs, including vary construction costs during the period of construction, the capitalized borrowing costs prior to the expected conditions for use and other relevant expenses etc. The construction-in-progress should carry forward as fixed assets after reached the expected conditions for use.
Impairment test method and impairment provision method for the construction-in-progress found in―20.impairment of non-current/non-financialassets‖ in Note IV.
17. Borrowing costs
Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costs incurred in connection with the arrangement of borrowings, and exchange differences arising from foreign currency borrowings. For borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, when expenditures for the asset and borrowing costs are being incurred, activities relating to the acquisition, construction or production of the asset that are necessary to prepare the asset for its intended use or sale have commenced, such borrowing costs shall be capitalized as part of the cost of that asset; and capitalization shall discontinue when the qualifying asset is ready for its intended use or sale. Other borrowing costs shall be recognized as expense in the period in which they are incurred.
Where funds are borrowed for a specific purpose, the amount of interest to be capitalized shall be the actual interest expense incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being used into banks or any investment income on the temporary investment of those funds. Where funds are borrowed for general purpose, the Group shall determine the amount of interest to be capitalized on such borrowings by applying a capitalization rate to the weighted average of the excess amounts of cumulative expenditures on the asset over and above the amounts of specific-purpose borrowings. The capitalization rate shall be the weighted average of the interest rates applicable to the general-purpose borrowings.
During the capitalization period, exchange differences related to the principal and interest on a specific purpose borrowing denominated in foreign currency shall be capitalized as part of the cost of the qualifying asset. Exchange differences related to general-purpose borrowings denominated in foreign currency shall be included in profit or loss for the current period. Qualifying assets are assets (fixed assets, investment property, inventories, etc) that necessarily take a substantial period of time for acquisition, construction or production to get ready for their intended use or sale.
Capitalization of borrowing costs shall be suspended during periods in which the acquisition, construction or production of a qualifying asset is interrupted abnormally, when the interruption is for a continuous period of more than 3 months, until the acquisition, construction or production of the qualifying asset is resumed.
18. Intangible assets
(1) Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by the Group. An intangible asset shall be initially measured at cost. The expenditures incurred on an intangible asset shall be recognized as cost of the intangible asset only if it is probable that economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. Other expenditures on an item asset shall be charged to profit or loss when incurred.
Land use right acquired shall normally be recognized as an intangible asset. Self-constructed buildings (e.g. plants), related land use right and the buildings shall be separately accounted for as an intangible asset and fixed asset. For buildings and structures purchased, the purchase consideration shall be allocated among the land use right and the buildings on a reasonable basis. In case there is difficulty in making a reasonable allocation, the consideration shall be recognized in full as fixed assets.
An intangible asset with a finite useful life shall be stated at cost less estimated net residual value and any accumulated impairment loss provision and amortised using the straight-line method over its useful life when the asset is available for use. Intangible assets with indefinite life are not amortised.
The Group shall review the useful life of intangible asset with an infinite useful life and the amortization method applied at period-end. A change in the useful life or amortization method used shall be accounted for as a change in accounting estimate. For an intangible asset with an indefinite useful life, the Group shall review the useful life of the asset. If there is evidence indicating that the period during which the intangible assets brings in economic benefits to the Group can be predicted, the Group shall estimate the useful life of that asset and make amortization under the amortization policies applicable to intangible assets with finite useful life.
(2) Research and development expenditures
Research and development expenditure of the Group was divided into expenses incurred during the research phase and expenses incurred during the development phase.
Expenses incurred during the research phase are recognised as profit or loss in the current period.
Expenses incurred during the development phase that satisfy the following conditions are recognised as intangible assets, while those that do not satisfy the following conditions are accounted for in the profit or loss for the current period:
①it is technically feasible that the intangible asset can be used or sold upon completion;
②there is intention to complete the intangible asset for use or sale;
③the intangible asset can produce economic benefits, including there is evidence that the products produced using the intangible asset has a market or the intangible asset itself has a market; if the intangible asset is for internal use, there is evidence that there exists usage for the intangible asset;
④there is sufficient support in terms of technology, financial resources and other resources in order to complete the development of the intangible asset, and there is capability to use or sell the intangible asset;
⑤the expenses attributable to the development phase of the intangible asset can be measured reliably.
If the expenses incurred during the research phase and the development phase cannot be distinguished separately, all development expenses incurred are accounted for in the profit or loss for the current period.
(3) Intangible assets impairment test method and their impairment provision
The method for impairment test and impairment provision of intangible assets is detailed in Note IV. 20―Impairment of non-current non-monetary financialasset‖.
19. Long-term prepaid expenses
Long-term prepaid expenses refer to the general expenses that occurred but shall be amortized over one year in reporting period and later period. Long-term prepaid expenses shall amortized by straight-line method in expected benefit period. 20. Long-term impairment
The Group will judge if there is any indication of impairment as at the balance sheet date in respect of long-term investments such as fixed assets, construction in progress, intangible assets with a finite useful life, investment properties measured at cost, and long-term equity investments in subsidiaries, joint controlled entities and associates. If there is any evidence indicating that an asset may be impaired,
recoverable amount shall be estimated for impairment test. Goodwill, intangible assets with an indefinite useful life and intangible assets beyond working conditions will be tested for impairment annually, regardless of whether there is any indication of impairment.
If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, the impairment provision will be made according to the difference and recognized as an impairment loss. The recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the future cash flows expected to be derived from the asset. Anasset’s fair value is the price in a sale agreement in anarm’s length transaction. If there is no sale agreement but the asset is traded in an active market, fair value shall be determined based on the bid price. If there is neither sale agreement nor active market for an asset, fair value shall be based on the best available information. Costs of disposal are expenses attributable to disposal of the asset, including legal fee, relevant tax and surcharges, transportation fee and direct expenses incurred to prepare the asset for its intended sale. The present value of the future cash flows expected to be derived from the asset over the course of continued use and final disposal is determined as the amount discounted using an appropriately selected discount rate. Provisions for assets impairment shall be made and recognized for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the Group shall determine the recoverable amount of the asset group to which the asset belongs. The asset group is the smallest group of assets capable of generating cash flows independently.
For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financial statements shall be allocated to the asset groups or group of assets benefiting from synergy of business combination. If the recoverable amount is less than the carrying amount, the Group shall recognise an impairment loss. The amount of impairment loss shall first reduce the carrying amount of any goodwill allocated to the asset group or set of asset groups, and then reduce the carrying amount of other assets (other than goodwill) within the asset group or set of asset groups, pro rata on the basis of the carrying amount of each asset.
An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect of the restorable value.
21. Staff remuneration
Staff remuneration includes short term staff remuneration, post office benefit, dismissal benefit, among which:
Short term staff remuneration mainly consists of salary, bonus, allowance and subsidy, staff benefits, medical insurance, maternity insurance, work related injury insurance, housing funds, labor unit fee and education fee, non-monetary benefits, etc. short term staff remuneration actually happened during the accounting period in which staff provides services to the Company is recognised as liability, and shall be included in current gains and losses or relevant asset cost. Non-monetary benefits are measured at fair value.
Post office benefits mainly consist of defined withdraw plan and defined benefit plan. Defined withdraw plan mainly includes basic pension insurance, unemployment insurance and annuity, and the contribution payable is included in relevant asset cost or current gains and losses when occurs. Our defined benefit plan mainly relates to retirement benefits. The Company engaged independent actuary to make estimation on demographic variables and financial variables under predicted accumulative benefits unit method with unbiased and consistent actuary assumption, measure liabilities arising from defined benefit plan and determine vesting periods of various liabilities. On balance sheet date, the Company presented liabilities arising from defined benefit plan at present value, and recorded service costs as profit or loss for the period. When the Company terminates the employment relationship with employees before the end of the employment contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, the Company shall recognise employee compensation liabilities arising from compensation for staff dismissal and included in profit or loss for the current period, when the Company cannot revoke unilaterally compensation for dismissal due to the cancellation of labour relationship plans and employee redundant proposals; and the Company recognise cost and expenses related to payment of compensation for dismissal and restructuring, whichever is earlier. However, if the compensation for termination of
employment is not expected to be fully paid within 12 months from the reporting period, it shall be accounted for other long-term staff remuneration.
Employee internal retirement plans is to use the same principle to deal with termination benefits. The group will pay staff salary, social insurance and others from the date they stop providing service to their retire-day. This amount shall be included in the current profits and losses (termination benefits), only when it meets the projected liabilities confirmation conditions.
For other long-term employee benefits provided by the Company to its employees, if satisfy with the established withdraw plan, then the benefits are accounted for under the established withdraw plan, otherwise accounted for under defined benefit scheme.
22. Accrual liability
The obligation pertinent to contingencies shall be recognized as accrual liability when the following conditions are satisfied simultaneously: (1) That obligation is a current obligation of the Group; (2) It is likely to cause any economic benefit to flow out of the enterprise as a result of performance of the obligation; and (3) The amount of the obligation can be measured in a reliable way.
At the balance sheet date, considering matters related to risks, uncertainties and time value of money and other factors, the expected liabilities are measured in accordance with the best estimate of the necessary expenses for the performance of the current obligation.
If the expenditure required paying all or part of the expected liabilities was compensated by the third party, and the amount of compensation basically can be sure when received, it could be recognized as a separate asset. But the amount of compensation confirmedcouldn’t be more than the book value of the estimated debts.
23. Income
(1) Income of commodities sales
When the transfer of significant risks and rewards of ownership of the goods to the buyer is done, when the right of management usually associated with ownership is not reserved, when wedidn’t effectively control the goods sold, the amount of revenue can be measured reliably. The associated economic benefits are likely to flow into the enterprise. And the related costs incurred or to be incurred can be measured in a reliable way. Thus we realize sales income.
The company engages in sales of cars, confirming income after the vehicle delivery to customers according to agreement, payment received or the rights to receive payment.
(2) Income from providing labor
On condition that provision of services trade results can be reliably estimated, we confirm income from providing labor on the balance sheet date according to the percentage of completion. The Company calculates the completion schedule through the ratio of the costs incurred taking up of the estimated total cost.
The results of labor transaction provided can be estimated reliably only when simultaneously:①the amount of revenue can be measured reliably;②the economic interests are likely to flow into the enterprise;③the degree of completion can be reliably determined;④cost occurred and to be occurred can be reliably measured.
If the service transaction resultscouldn’t be able to reliably estimated, labor income will be calculated according to according to amount of labor costs which has occurred and is expected to be t compensated, and labor costs occurred would be included as expenses of the current period. Labor cost occurred which cannot be compensated will not be included as revenue.
The Company engages in car repair services, confirming income after the car repair service is delivered to customers according to agreement, payment received or the rights to receive payment.
(3) Use fee income
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|According to the relevant contract or agreement, revenue is recognized in accordance with the accrual basis.|
|(4) Interest income|
|Interest income is confirmed in accordance with time and actual interest others make use of the monetary capital of the|
|group|

24. Government subsidy
A government subsidy means the monetary or non-monetary assets obtained free by the Group from the government, but excluding the capital invested by the government as the owner of the enterprise. Government subsidies consist of the government subsidies pertinent to assets and government subsidies pertinent to income. Government grant obtained by the Company for the purpose of constructing or otherwise forming long term assets is recognised as government grant related to assets, and other government grants are recognised as those related to income. If government document fails to identify specific grantee, government grants will be categorized into government grants related to income or assets respectively under the below method: (1) in case government document indicates the specific project applicable to the grant, such categorization shall be made based on the respective proportion of expenditures to form assets or be recorded as expenses in budget for the specific project. The allocation proportion will be reviewed on each balance sheet date, and is subject to necessary alteration; (2) in case government document only indicate general purpose of such grant instead of specific project, the grant shall be viewed as government grant related to income.
The government subsidy with monetary assets concerned should be measured by the actual received or receivable amount while non-monetary assets government subsidy measured by fair value; if without realizable fair value obtained, measured by nominal amount instead. The government subsidy with nominal amount measured should reckon into current gains and losses.
Government grants are generally recognised when received and measured at the amount actually received, but are measured at the amount likely to be received when there is conclusive evidence at the end of the accounting period that the Group will meet related requirements of such grants and will be able to receive the grants. The government grants so measured should also satisfy the following conditions: (1) the amount of the grants be confirmed with competent authorities in written form or reasonably deduced from related requirements under financial fund management measures officially released without material
uncertainties; (2) the grants be given based on financial support projects and fund management policies officially published and voluntarily disclosed by local financial authorities in accordance with the requirements under disclosure of government information, where such policies should be open to any company satisfying conditions required and not specifically for certain companies; (3) the date of payment be specified in related documents and the payment thereof be covered by corresponding budget to ensure such grants will be paid on time as specified; and (4)other relevant conditions which shall be met based on the specific situations of the Company and the subject matter.
Asset-related government subsidies are recognized as deferred income and accounted into the current gains/losses equally within service life for the relevant assets. The government subsidies pertinent to incomes, which are used for compensating the related future expenses or losses of the enterprise shall be recognized as deferred income and should reckoned into current gains/losses in period of when relevant expenses are recognized; if used for compensating the occurred relevant expenses and losses, reckoned into current gains/losses directly.
As for the recognized government subsidy needs to return, if there has relevant balance of deferred incomes, relevant book
balance of the deferred income should be written down, and the exceeded part should included in the current gains/losses; if
there has no relevant balance of deferred incomes, reckoned into current gains/losses directly.
25. Deferred income tax assets and deferred income tax liabilities
(1) The current income tax
At the balance sheet date, for the current income tax liabilities (or assets) arising during the current and previous periods, current income tax should be calculated in line with expected payable (or return) income tax amount in accordance with the provisions of the tax law. Calculation of the current income tax expenses on the basis of the computation of taxable income is adjusted to the pre-tax accounting profit according to the relevant provisions of the tax law.
(2) The deferred income tax assets and deferred income tax liabilities
As for the balance between the book value of some assets and liabilities and the tax base, and those temporary difference arisen from balance which is not recognized as an asset or liability but whose difference between the book value and tax base could be calculable in accordance with the provisions of the tax law, we adopt debt method of balance sheet to recognize deferred income tax assets and deferred income tax liabilities.
As for taxable temporary differences which is arisen from initial recognition of goodwill, and those related to initial recognition of assets or liabilities arisen during trade with neither merging nor those whichwon’t affect the accounting profit and taxable income (or deductible loss), related deferred tax liabilities will not be confirmed. In addition, as for temporary differences taxable related to subsidiary companies, associated enterprises and joint venture investment, if the group is able to control the reversal time of the temporary difference, and the temporary differences in the foreseeable future probably will not be reversed, we also could not confirm the deferred income tax liabilities. In addition to the above condition, the group could confirm all the other deferred income tax liabilities arising from taxable temporary differences.
As for deductible temporary differences related to initial reorganization of asset or liability arising from trades with neither merge nor those whichwon’t affect the accounting profit and taxable income (or deductible loss),we’ll not recognize relevant deferred income tax assets. In addition, as for deductible temporary differences related to subsidiary companies, associated enterprises and joint venture investment, if the temporary differences in the foreseeable future probably will not be reversed, we also could not confirm the deferred income tax assets. In addition to the above condition, the group could confirm all the other deferred income tax assets arising from deductible temporary differences within benchmark of income of taxable deductible temporary differences.
As for deductible loss or tax deduction which to be reversed in the following years, we confirm the corresponding deferred income tax assets within benchmark of future taxable income to be likely deducted for deductible loss and tax deduction. On the balance sheet date, the deferred income tax assets and liabilities are measured according to the provisions of the tax law, in accordance with the applicable tax rate during related assets to be expected recovery or related liabilities to be paid off.
At the balance sheet date, we recheck the book value of deferred income tax assets. If in future it is unlikely to obtain adequate taxable income to offset the benefit of the deferred income tax asset, then we write down the book value of deferred income tax assets. When it is probable to obtain adequate taxable income, amount written down shall be reversed. (3) The income tax expenses
The income tax expense included the current income tax and deferred income tax.
In addition to trades and current income tax and deferred income tax related to projects which are included in other comprehensive income or directly included inowners’ interest, as well as the book value whose goodwill arranged in line with deferred income tax arising from enterprises combination, all the other current income tax and deferred income tax expenses or income will be included in current profit and loss.
(4) Offset of income tax
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realise the assets and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented on a net basis. When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realise the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
26. Leasing
Finance lease transfers substantially all the risks and rewards related to the ownership of an asset. Its ownership may eventually transfer, also may not. While all the other leases are classified as operating leases.
(1) The Company keeps record of lease business as lessee
Rental expense of operating lease is included in the relevant asset costs or current profits and losses through the straight-line method during every period. Initial direct costs shall be included in profit or loss for the current period. Or rent to the actual shall be included in the current profits and losses.
(2) The Company keeps record of lease business as lessor
Rental income of operating lease is included in the relevant asset costs or current profits and losses through the straight-line method during every period. The larger amount of initial direct costs shall be capitalized when it is created, and shall be included in the current profits and losses during the lease period in accordance with same basic as the confirmed amount by stages. The other small amount of initial direct costs shall be included in the current profits and losses whenit’s created. Or rent to the actual shall be included in the current profits and losses.
(3) Financing lease business with the Group recorded as lessee
On the beginning date of the lease, the entry value of leased asset shall be at the lower of the fair value of the leased asset and the present value of minimum lease payment at the beginning date of the lease. Minimum lease payment shall be the entry value of long-term accounts payable, with difference recognised as unrecognised financing expenses. In addition, initial direct costs attributable to leased items incurred during the process of lease negotiation and signing of lease agreement shall be included in the value of leased assets. The balance of minimum lease payment after deducting unrecognised financing expenses shall be accounted for long-term liability and long-term liability due within one year. Unrecognised financing expenses shall be recognised as financing expenses for the current period using effective interest method during the leasing period. Contingent rent shall be included in profit or loss for the current period at the time it incurred.
(4) Financing lease business with the Group recorded as lessor
On the beginning date of the lease, the entry value of lease receivable shall be the aggregate of minimum lease receivable and initial direct costs at the beginning date of the lease. The unsecured balance shall be recorded. The aggregate of minimum lease receivable, initial direct costs and unsecured balance and the different between their present value shall be recognised as unrealised financing income. The balance of lease receivable after deducting unrecognised financing income shall be accounted for long-term debt and long-term debt due within one year.
Unrecognised financing income shall be recognised as financing income for the current period using effective interest method during the leasing period. Contingent rent shall be included in profit or loss for the current period at the time it incurred.
27. Other significant accounting policies and accounting estimation
(1) Discontinued operation
Discontinued operation refers to the operation disposed or classified as held-for-sale by the Company and presented separately under operation segments and financial statements, which has fulfilled one of the following criteria:① it represents an independent key operation or key operating region;② it is part of the proposed disposal plan on an independent key operation or proposed disposal in key operating region; or③ it only establishes for acquisition of subsidiary through disposal.
Accounting for discontinued operation is set out in note IV 12―classified as assets held forsale‖.
(2) Repurchase of shares
Share repurchase consideration paid and transaction costs to reduce theowner’s equity, repurchase, transfer or cancellation of ChenmingPaper’s shares, the gains or losses are not recognised.
In respect of transfer of treasury shares, the difference between the actual amount received and the carrying amount of treasury shares shall be included in capital reserve. When insufficient to dilute, capital reserve will be offset against the surplus reserve and retained profits. Treasury shares are cancelled at par value and by the number of shares cancelled to reduce the share capital. The difference between the book balance and the nominal value of the treasury shares shall be offset against the capital reserve. When insufficient to dilute, capital reserve will be offset against the surplus reserve and retained profits.
(3) Assets securitization
Partial assets(―trustproperties‖) of the Company are securitized. Relevant assets are operated by special purpose vehicles on trust. The special purpose vehicles issue superior assets supporting securities to investors and the Company holds subordinated assets supporting securities. The subordinated ones are not allowed to transfer prior to completion of repayment of principal and interest of superior ones. As assets service provider, the Company provides assets maintenance and normal management, determination of annual assets disposal plan, preparation and implementation of assets disposal plan, execution of relevant assets disposal agreement and regular preparation of assets service report. In addition, as liquidity supporting institution, the Company shall provide liquidity support where principal of superior assets supporting securitiesaren’t paid in full, to make up shortage of interest or principal. Trust properties, after being applied to pay trust taxes and associate expenses, are preferentially used to repay the principal and interests of superior assets supporting securities, and the remaining trust properties after full settlement of such principal and interests are recorded as income of subordinated assets supporting securities and vested by the Company. The Company actually keeps nearly all the risks and rewards of trust properties, thus itdoesn’t derecognize trust properties. Besides, the Company owns effective control over special purpose vehicle which is included in consolidated financial statements.
When applying accounting policies in relation to securitization of financial assets, the Company has considered the risks and rewards of assets transferred to other entity as well as the level of control that the Company can exercise in respect of such entity:
- In case that the Company has transferred nearly all the risks and rewards of ownership of financial assets, the Company derecognizes such financial assets;
- In case that the Company keeps nearly all the risks and rewards of ownership of financial assets, the Company continues to recognize such financial assets;
- In case that the Companydoesn’t transfer or keep nearly all the risks and rewards of ownership of financial assets, the Company considers whether it owns control over such financial assets. If the Company maintains no control, it will derecognize such assets, and recognize the rights and liabilities occurred or kept during transfer as assets or liabilities respectively. If the Company maintains control, it will recognize such financial assets based on the continuous involvement level in respect of such assets.
28. Changes of major accounting policies and accounting estimation
(1) Changes of accounting policy
No accounting policy changed in reporting period.
(2) Changes of accounting estimate
No accounting estimate changed in reporting period.
29. Major accounting judgment and estimate
The Company need make judgment, estimation and hypothesis to book value of those unaccountable items in sheet due to inner uncertainties of operating activities in the process of using accounting policies. These judgments, estimates and
assumptions are made in line with the Company's past management experience, and in consideration of other relevant factors. These judgments, estimates and assumptions will affect disclosure of amount of income, expenses, assets and liabilities as well as contingent liability on the balance sheet day. However, the uncertainties in these estimates may cause significant adjustments to book value of those asset or liability affected in the future.
The Company rechecks regularly the judgment, estimation and hypothesis based on sustainable management. As for a change affecting only the current period, the amount shall be confirmed only in the current period; for those not only affecting the current but the future, the amount shall be confirmed in the current and future period.
At the balance sheet date, the Company needs to determine amount of items of the financial statements, estimation and hypothesis shown as the following important areas:
(1) Provision for bad debts
The Company accounts for the allowance for bad debt losses according to the receivable accounting policies. Accounts receivable is the valuation of accounts receivable can be recovered based on. Identification of devaluation of accounts receivable needs judgments and estimates of management level. Difference between actual results and the original estimates impact reversal of the book value accounts receivable and accounts receivable for provision for bad debts during the estimation was changing.
(2) Provision of inventory devaluation
According to the inventory accounting policies, the Company shall accrue inventory devaluation provision as for inventory whose cost is higher than net realizable and those obsolete or unmarketable in accordance with the lower one in cost and net realizable value. Write-down of inventories to net realizable value is to assess the salability and net amount of prospect realization. Identification of inventory impairment requiresmanagement’s judgment and estimation after their obtaining conclusive evidence and consideration of the purpose for holding inventories, events effects occurring after balance sheet date. The difference between actual results and original estimates will affect the reversal of book value and devaluation provision of inventories during the estimation was changing.
(3) Financial assets available for sale
In respect of impairment of available-for-sale financial assets, whether impairment loss shall be recognised in income statement significantly depends on the judgments and assumptions of the management. While making judgments and assumptions, the Company shall assess the excess of cost of theinvestee’s identifiable net assets attributable to the investment over fair value and the duration, and financial condition and short term business outlook of the investee, including industry situation, technical reform, credit rating, default rate and risks from counterparties.
(4) Long-term provision for asset impairment
The Company has checked if there is any sign that the long-term asset except for the financial assets may have the impairment at the balance sheet date. For the intangible assets with uncertain service life, in addition to the annual impairment test, make the impairment test when it has signs of impairment. Proceed with the impairment test when there is any sign indicates that the book amounts of other long-term assets except for the financial assets are uncollectible
When the book value of the asset or group of assets exceeds its recoverable amount, i.e. the higher one between the net amount after subtracting the disposal costs from the fair value and the present value of the future cash flow, it indicates impairment occurs.
The net amount after subtracting the disposal costs from the fair value is determined by subtracting the incremental costs
directly attributable to this disposal of assets from the sales agreement price similar to assets in fair dealing or the observable market price.
When predicting the present value of future cash flows, it is required to make significant judgments to the output, selling price and related operating expenses of this asset or group of assets and the discount rate used for calculating the present value. The Company shall adopt all available related data when predicting the recoverable amounts, including making predictions about the relevant output, selling price and related operating expenses based on reasonable and supportable assumptions.
(5) Depreciation and amortization
For the investment real estate, fixed assets and intangible assets, the Company takes a straight-line depreciation and amortization within service life in consideration of its residual value. The Company regularly review service life, thus determine the depreciation and amortization amount in each reporting period. Life is determined based on past experience of similar assets and technology update is expected. If the previous estimate changes, we will adjust depreciation and amortization expense in future periods.
(6) The deferred income tax assets
Within the limits that it is very likely to have sufficient taxable profits to offset losses, the Company confirms deferred income tax assets using all unused tax losses. This requires the management to use a lot of judgment to estimate the time and amount of future taxable profits, combined with the tax planning strategy, thus confirm the amount of deferred income tax assets.
(7) The income tax
During ordinary course of business, uncertainty exists in final tax treatment and calculation of a part of trading. Whether part of the project is in pre tax expenses requires approval of tax authorities. If the final confirmation of these tax matters differs from an initial estimate, the difference will affect current income tax and deferred income tax during the final period. (8) Accrual liabilities
The Company estimates and accrues corresponding provision for product quality guarantee, expected contract loss, penalty for late delivery and others in accordance with terms of the contract, existing knowledge and experience. When such contingencies has formed a present obligation, and the performance of the current obligation is likely to lead to the outflow of economic benefits of the Company, the Company recognizes the best estimate of required expense when performing current obligation as accrual liability. The recognition and measurement of debt is largely dependent on the judgment of management. In the process of judgment the Company needs to assess the contingent risks, uncertainties and money and the time value and other factors.
VII. Taxation
1. Main tax and tax rate
Type Tax rate
The output tax of taxable income is calculated by the tax rate of17% ,6%, or VAT
11%, the added-value tax is calculated and paid according to the balance after
Type Tax rate
deducting the input VAT allowed to be deducted in current period, immovable property leasing is levied taxes by5% (immovable property achieved before April 30, 2016).
Operation tax Calculated and paid on5% of the taxable operation amount
City maintaining& construction tax Calculated and paid on7% of the turnover tax actually paid
Education surcharge Calculated and paid on3% of the turnover tax actually paid
Local education surcharge Calculated and paid on2% of the turnover tax actually paid
Calculated and paid on25% of the taxable income amount and tax by the levy Corporation income tax*
rate
Since May 1, 2016, the pilot scheme scope of changing the business tax to added-value tax has extended to construction industry, real estate, financial industry, living service industry, etc., the Company and itssubsidiaries’ immovable property leasing, property management and service business all fall within the scope of the pilot.
* Note: The Company and subsidiaries exercise rate of25% in 2016, except Shenzhen New Yongtong Dongxiao Vehicle Inspection Co., Ltd., which has taxed on levy rate.
VIII. Enterprise consolidation and consolidated financial statements
Unless otherwise stated, the follow notes (including the items of financial statement of the Company), year-begin refers to 1st January 2016 while period-end refers to 30th June 2016.
1. Monetary fund
Item Closing balance Balance at year-begin Stock cash 91,387.70 75,003.23 Bank deposits: 190,890,205.36 159,109,707.70 Other monetary capital
Total 190,981,593.06 159,184,710.93 2. Accounts receivable
(1) Accounts receivable by category
Closing balance
Types
Book balance Bad debt reserve
Book value Amount Ratio(%) Amount Accrual ratio(%)
Account receivable with single
22,512,414.52 44.62 22,512,414.52 100.00
significant amount and withdrawal bad
Closing balance
Types
Book balance Bad debt reserve
Book value Amount Ratio(%) Amount Accrual ratio(%)
debt provision separately
Receivables with bad debt provision
1,664,778.74 3.30 1,664,778.74 accrual by credit portfolio
Accounts with single significant amount
and bad debts provision accrued 26,282,070.64 52.08 26,282,070.64 100.00
individually
Total 50,459,263.90 100.00 48,794,485.16 96.70% 1,664,778.74 (Cont.)
Balance at year-begin
Types
Book balance Bad debt reserve
Book value Amount Ratio(%) Amount Accrual ratio(%)
Account receivable with single
significant amount and withdrawal bad 22,512,414.52 45.61 22,512,414.52 100.00
debt provision separately
Receivables with bad debt provision
562,051.31 1.14 562,051.31 accrual by credit portfolio
Accounts with single significant amount
and bad debts provision accrued 26,282,070.64 53.25 26,282,070.64 100.00
individually
Total 49,356,536.47 100.00 48,794,485.16 98.86 562,051.31①Account receivable with single significant amount and withdrawal bad debt provision separately at period end
Closing balance
Account receivable(units)
Account Bad debt Accrual
Reasons
receivable ratio
reserve
Shenzhen Jinlu Industry and Trade Co., 9,846,607.00 9,846,607.00 100.00 Has greater uncertainty in Ltd. collection
Guangdong Zhanjiang Sanxing Auto 4,060,329.44 4,060,329.44 100.00 Not expected to collected due to Service Co., Ltd. long account age
Wang Changlong 2,380,760.40 2,380,760.40 100.00 Not expected to collected due to long account age
Huizhou Jiandacheng Daoqiao 2,021,657.70 2,021,657.70 100.00
Unlikely to collected
Engineering Company
Guangdong Materials Group Corp. 1,862,000.00 1,862,000.00 100.00 Not expected to collected due to long account age
Jiangling Automobile Factory 1,191,059.98 1,191,059.98 100.00 Not expected to collected due to long account age
Yangjiang Auto Trade Co., Ltd. 1,150,000.00 1,150,000.00 100.00 Not expected to collected due to long account age
Total 22,512,414.52 22,512,414.52 100.00 —②Account receivable provided for bad debt reserve under aging analysis method in the groups
Closing balance
Age
Account receivable Bad debt reserve Accrual ratio(%) Within 1 year 1,664,778.74
Total 1,664,778.74
(2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 0 Yuan; the amount collected or switches back amounting to 0 Yuan.
(3) Top 5 receivables at ending balance by arrears party
Proportion in total Relationship with
Name of the company
Amount Terms
account the Company
receivables(%) Shenzhen Jinlu Industry and Trade Co., Ltd. Non-related party 9,846,607.00 Over 3 years 19.51 Guangdong Zhanjiang Sanxing Auto Service Co., Ltd. Non-related party 4,060,329.44 Over 3 years 8.05 Wang Changlong Non-related party 2,380,760.40 Over 3 years 4.72 Huizhou Jiandacheng Daoqiao Engineering Company Non-related party 2,021,657.70 Over 3 years 4.01 Guangdong Materials Group Corp. Non-related party 1,862,000.00 Over 3 years 3.69 Total 20,171,354.54 39.98 (4) Account receivable derecognition due to financial assets transfer
The Company has no account receivable derecognition due to financial assets transfer in the Period.
(5) Assets and liabilities resulted by account receivable transfer and continues involvement
The Company has no assets and liabilities resulted by account receivable transfer and continues involvement in the Period. 3. Advance payment
(1) Advance payment by age
Closing balance Balance at year-begin
Age
Amount Ratio(%) Amount Ratio(%) Within one year
7,176,292.31 93.64 5,751,990.04 89.11 1-2 years
466,973.32 6.09 126,950.00 1.97 2-3 years
10,290.00 0.14 565,865.42 8.77 Over 3 years 9,963.94 0.13 9,963.94 0.15 Total 7,663,519.57 100.00 6,454,769.40 100.00 (2) Top 5 advance payment at ending balance by prepayment object
Total year-end balance of top five advance payment by prepayment object amounting to 7,457,400.99 Yuan, takes 97.31 percent of the total advance payment at year-end.
4. Interest receivable
(1) Interest receivable by category
Age Closing balance Balance at year-begin
Structured deposit 348,833.33 Total 348,833.33 5. Other accounts receivable
(1) Other accounts receivable by category
Closing balance
Category
Book balance Bad debt reserve
Book value Amount Ratio(%) Amount
Accrual ratio(%)
Other account receivable with single
significant amount and withdrawal bad 39,180,176.91 60.50 39,180,176.91 100.00
debt provision separately
Other receivables with bad debt 11,395,983.8 14,941,140.26 23.07 3,545,156.39 23.73
provision accrual by credit portfolio 7 Other accounts with single significant
amount and bad debts provision accrued 10,643,328.95 16.43 10,643,328.95 100.00
individually
Closing balance
Category
Book balance Bad debt reserve
Book value Amount Ratio(%) Amount
Accrual ratio(%)
11,395,983.8 Total 64,764,646.12 100.00 53,368,662.25 82.40
7 (Cont.)
Balance at year-begin
Category
Book balance Bad debt reserve
Book value Amount Ratio(%) Amount
Accrual ratio(%)
Other account receivable with single
significant amount and withdrawal bad 39,180,176.91 60.75 39,180,176.91 100.00
debt provision separately
Other receivables with bad debt 11,128,001.8 14,673,158.28 22.75 3,545,156.39 24.16
provision accrual by credit portfolio 9 Other accounts with single significant
amount and bad debts provision accrued 10,643,328.95 16.50 10,643,328.95 100.00
individually
11,128,001.8 Total 64,496,664.14 100.00 53,368,662.25 82.75
9①Other receivable with single significant amount and withdrawal bad debt provision separately at end of period
Closing balance
Account receivable(units)
Account Bad debt Accrua
Reasons
l ratio
receivable reserve
Zhongqi South China Auto Sales The company has revoked, and
9,832,956.37 9,832,956.37 100.00
Company estimated of uncollectible amount South Industry& TRADE Shenzhen The company has revoked, and
7,359,060.75 7,359,060.75 100.00
Industrial Company estimated of uncollectible amount Win a lawsuit, no executable assets 5,000,000.00 5,000,000.00 100.00
Shenzhen Zhonghao (Group) Co., Ltd. from adversary
Closing balance
Account receivable(units)
Account Bad debt Accrua
Reasons
l ratio
receivable reserve
Gold Beili Electrical Appliances Not expected to collected due to long 2,706,983.51 2,706,983.51 100.00
Company account age
The company has revoked, and
2,418,512.90 2,418,512.90 100.00
Shenzhen Xingtai Trade Co., Ltd. estimated of uncollectible amount Shenzhen Petrochemical Group 1,902,686.77 1,902,686.77 100.00 Unlikely to collected
Shenzhen Tefa Huatong Package Co., The company has revoked, and 1,212,373.79 1,212,373.79 100.00
Ltd. estimated of uncollectible amount Shenzhen Jinhe Standard Mould Co., The company has revoked, and
1,023,560.00 1,023,560.00 100.00
ltd. estimated of uncollectible amount Heyuan Dongfeng Technology Service The enterprise has revoked, and 930,000.00 930,000.00 100.00
station estimated of uncollectible amount Shenzhen Nuoer Electrical Co., Ltd. Not expected to collected due to long 906,024.60 906,024.60 100.00
account age
Shenzhen South Great Wall Investment Has greater uncertainty in collection 819,460.91 819,460.91 100.00
Holding Co., Ltd.
Shenzhen Xiandao New Materials The company has revoked, and
660,790.09 660,790.09 100.00
Company estimated of uncollectible amount Shenzhen Baodong Property Not expected to collected due to long 609,773.00 609,773.00 100.00
Development Company account age
Not expected to collected due to long Others
3,797,994.22 3,797,994.22 100.00
account age
Total 39,180,176.91 39,180,176.91 100.00
②In combination, other accounts receivable whose bad debts provision was accrued by age analysis Closing balance
Age
Other accounts receivable
Bad debt reserve Accrual ratio(%) Within 1 year 7,341,563.73
1-2 years 82,841.64 4,142.08 5.00 2-3 years 724,510.45 144,902.09 20.00
Closing balance
Age
Other accounts receivable
Bad debt reserve Accrual ratio(%) Over 3 years 6,792,224.44 3,396,112.22 50.00 Total 14,941,140.26 3,545,156.39 23.73 (2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 0 Yuan; the amount collected or switches back amounting to 0 Yuan.
(3) Classification of other receivables by nature
Nature
Closing book balance Book balance at year-begin Intercourse accounts of related units 4,929,657.05 4,881,267.41 receivable
Other intercourse 59,834,989.07 59,615,396.73 Total 64,764,646.12 64,496,664.14 (4) Top 5 other receivables at ending balance by arrears party
Ending Ratio in total ending balance Ending balance of Company Nature Age
balance of other receivables(%) bad bet provision Zhongqi South China Auto Intercourse 9,832,956.37 Over 3 15.18 9,832,956.37 funds
Sales Company years
South Industry& TRADE Intercourse 7,359,060.75 Over 3 11.36 7,359,060.75 funds
Shenzhen Industrial Company years
Shenzhen Zhonghao (Group) Intercourse Over 3 7.72
funds
Co., Ltd. 5,000,000.00 years 5,000,000.00 Shenzhen Kaifeng Special Intercourse Over 3 6.82
funds
Vehicles Industry Co., Ltd. 4,413,728.50 years 2,206,864.25 Jinbeili Home Appliance Intercourse 2,706,983.51 Over 3 4.18 2,706,983.51 funds
Company years
Total 29,312,729.13 45.26 27,105,864.88 6. Inventory
(1) Inventory classification
Closing balance
Item
Depreciation
Book balance Book value
reserve
Closing balance
Item
Depreciation
Book balance Book value
reserve
Raw materials 15,300,702.38 14,771,812.17 528,890.21 Low value consumable 909.00 909.00 Stock products 22,834,203.79 14,184,584.45 8,649,619.34 Total 38,135,815.17 28,956,396.62 9,179,418.55 (Cont.)
Balance at year-begin
Item
Depreciation
Book balance Book value
reserve
Raw materials 15,162,375.25 14,771,812.17 390,563.08 Low value consumable 2,103.50 2,103.50 Stock products 29,943,254.48 14,184,584.45 15,758,670.03 Total 45,107,733.23 28,956,396.62 16,151,336.61 (2) Inventory depreciation reserve
Increase in the
Decrease in the current period
current period
Item Balance at year-begin Closing balance Switch back or
Accrual Other Other
write-off
Raw materials 14,771,812.17 14,771,812.17 Low value consumable
Stock products 14,184,584.45 14,184,584.45 Total 28,956,396.62 28,956,396.62 (3) Accural basis for inventory depreciation reserve and reason of switch back or write-off in the year
Accrual basis for inventory Reasons of switch-back for Reasons of write-off for inventroy Item
impairment provision
inventroy falling price reserves falling price reserves
Stock Its net realisable value is lower Impact on inventory value The products with depreciation reserves products than cost of inventory write-down in previous accrual have been sell
7. Other current assets
Item Closing balance Balance at year-begin Input tax ready for deducted 19,674.72 565,445.21 Financial products 110,300,000.00 165,000,000.00 Total 110,319,674.72 165,565,445.21 8. Financial assets available for sale
(1) Particular about financial assets available for sale
Closing balance Balance at year-begin
Item
Depreciation Depreciation
Book balance Book value Book balance Book value reserves reserves
Instrument equity
18,605,225.77 8,126,240.00 10,478,985.77 18,605,225.77 8,126,240.00 10,478,985.77 available for sale:
Including: measured by
fair value
Measured by cost
18,605,225.77 8,126,240.00 10,478,985.77 18,605,225.77 8,126,240.00 10,478,985.77 Total 18,605,225.77 8,126,240.00 10,478,985.77 18,605,225.77 8,126,240.00 10,478,985.77
(2) Financial assets available for sale measured by cost at period-end
Book balance Depreciation reserves
Increa Decre Increa Decre Ratio of share-holding in The invested entity
sed in ased sed in ased invested entity At year-begin At period-end At year-begin At period-end (%) the in the the in the
year year year year
China Pudong Development Machinery Industry 10,176,617.20
10,176,617.20 4.94 Co., Ltd.
Shenzhen Jingwei Industrial Co., Ltd. 4,000,000.00 4,000,000.00 4,000,000.00 4,000,000.00 12.50 Shenzhen (Masco) Co., Ltd. 825,000.00 825,000.00 825,000.00 825,000.00 7.00 Wuhan Weite Hotel 640,000.00 640,000.00 640,000.00 640,000.00
Shenzhen Petrochemical Group 700,000.00 700,000.00 700,000.00 700,000.00 10万股 Shenzhen Shuntian Electrocar Technology 600,000.00
600,000.00 600,000.00 600,000.00 11.10 Development Co., Ltd.
Shenzhen Jinhe Standard Mould Co., ltd. 453,440.00 453,440.00 453,440.00 453,440.00 15.00 Shenzhen China Auto Training Center 600,000.00 600,000.00 600,000.00 600,000.00 6.25 Dratini 162,000.00 162,000.00 162,000.00 162,000.00 6.25 Shenzhen Bisike Machinery Transport Co., Ltd. 302,368.57 302,368.57 7.50 Rishen International Co., Ltd. 145,800.00 145,800.00 145,800.00 145,800.00 7.50 Total 18,605,225.77 18,605,225.77 8,126,240.00 8,126,240.00
(3) Changes of impairment in Year
Instrument
Instrument equity
Type liabilities Total available for sale
available for sale
Balance of impairment accrual at year-begin
8,126,240.00 8,126,240.00 Accrual
Including: transfer-in from other comprehensive
income
Decreased in the year
Including: switch back due to fair value rebound
at period-end
Balance of impairment accrual at year-end
8,126,240.00 8,126,240.00 9. Held-to-maturity investment
(1) Held-to-maturity investment
Closing balance Balance at year-begin
Item
Depreciation Depreciation
Book balance Book value Book balance Book value reserves reserves
Treasury 20,000.00 20,000.00 20,000.00 20,000.00
Total 20,000.00 20,000.00 20,000.00 20,000.00
10. Long-term account receivable
(1) Long-term account receivable
Closing balance Balance at year-begin Range of Item
Depreciation Book Depreciation Book
Book balance Book balance
discount reserves value reserves value
rate Other:
Essentially constitute a long-term
equity for net investment of 2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68
invested company
Including: Shenzhen Tellus
2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68
Auto Service Chain Co., Ltd.*
Total 2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68
* Notes: the Company is an associate of the Company, thus the non-operating receivables by the Company substantially constitute net investments in investee. Till the end of this reporting period, the total liabilities exceeded total assets, andowners’ equity was negative.
Carrying value of the long term equity investment in the company has been less to nil. This company ceased operation in this reporting period. Considering the actual conditions of this company, the Company made bad debt provision in full for this long term receivables.
11. Long-term equity investment
+,-
Balance at
Addition Capita Other
The invested entity Investment gains Other al l comprehensi
year-begin recognized under equity investme reducti ve income
equity change nt on adjustment
I. Joint venture
Shenzhen Tellus Jimeng Investment Co., Ltd 59,799,695.73 13,852.21
Shenzhen Tellus Hang Investment Co., Ltd. 9,958,144.84 423,839.67
Subtotal
69,757,840.57 437,691.88
II. Associated enterprise
Shenzhen Xinglong Machinery Mould Co., 15,878,254.74
Ltd.
Shenzhen Tellus Auto Service Chain Co.,
Ltd.
Shenzhen Zung Fu Tellus Auto Service Co., 72,747,568.25 2,142,218.71
Ltd.
Shenzhen Auto IndustryImp& Exp Co., Ltd. 8,293,805.73 -77,836.98
Shenzhen Dongfeng Auto Co., Ltd. 52,959,125.74 589,358.93
Shenzhen New Yongtong Technology Co., 486,878.16 -225,402.53
Ltd.
Shenzhen New Yongtong Oil Pump 127,836.59
Environment Protection Co., Ltd.
Shenzhen New Yongtong Consultant Co., 41,556.83
Ltd.
Shenzhen New Yongtong Auto Service Co., 57,248.10
-57,248.10
Ltd.
Shenzhen Xinyongtong Dongxiao Auto
Parts Sales Co., LTd.
+,-
Balance at
Addition Capita Other
The invested entity Investment gains Other al l comprehensi
year-begin recognized under equity investme reducti ve income
equity change nt on adjustment
Shenzhen Yongtong Xinda Inspection
Equipment Co., Ltd.
Hunan Changyang Industrial Co., Ltd.*① 1,810,540.70
Shenzhen Jiecheng Electronic Co.,Ltd*① 3,225,000.00
Shenzhen Xiandao New Material Co., 4,751,621.62
Ltd.*①
China Auto Industrial Shenzhen Trading 400,000.00
Company*①
Shenzhen General Standard Co.,Ltd.*① 500,000.00
Shenzhen Huoju Spark Plug Industry Co., 17,849.20
Ltd.
Zhongqi South China Auto Sales 2,250,000.00
Company*①
Shenzhen Bailiyuan Power Supply Co., 1,320,000.00
Ltd*①
Shenzhen Yimin Auto Tranding Co., 200,001.10
Ltd.*①
Subtotal 165,067,286.76 2,371,090.03
III. Other equity investment
Shenzhen hanli Hi-Tech Ceramics Co., 1,956,000.00
Ltd.*②
South Auto MaintenanceCenter*② 6,700,000.00
Subtotal 8,656,000.00
Total 243,481,127.33 2,808,781.91
(Cont.)
+,-
Depreciation The invested entity Cash dividend or
Closing balance
profit announced
Other reserves closing to issued
balance I. Joint venture
Shenzhen Tellus Jimeng Investment Co., Ltd 59,813,547.94
Shenzhen Tellus Hang Investment Co., Ltd. 10,381,984.51
Subtotal
70,195,532.45
II. Associated enterprise
Shenzhen Xinglong Machinery Mould Co., Ltd. 15,878,254.74
Shenzhen Tellus Auto Service Chain Co., Ltd.
Shenzhen Zung Fu Tellus Auto Service Co., Ltd. 6,300,000.00 68,589,786.96
Shenzhen Auto IndustryImp& Exp Co., Ltd. 8,215,968.75
Shenzhen Dongfeng Auto Co., Ltd. 53,548,484.67
Shenzhen New Yongtong Technology Co., Ltd. 261,475.63
Shenzhen New Yongtong Oil Pump Environment 127,836.59 Protection Co., Ltd. 127,836.59
Shenzhen New Yongtong Consultant Co., Ltd. 41,556.83 41,556.83 Shenzhen New Yongtong Auto Service Co., Ltd.
Shenzhen Xinyongtong Dongxiao Auto Parts Sales Co.,
LTd.
Shenzhen Yongtong Xinda Inspection Equipment Co.,
Ltd.
Hunan Changyang Industrial Co., Ltd.*① 1,810,540.70 1,810,540.70 Shenzhen Jiecheng Electronic Co.,Ltd*① 3,225,000.00 3,225,000.00 Shenzhen Xiandao New Material Co.,Ltd.*① 4,751,621.62 4,751,621.62 China Auto Industrial Shenzhen TradingCompany*① 400,000.00 400,000.00 Shenzhen General Standard Co.,Ltd.*① 500,000.00 500,000.00 Shenzhen Huoju Spark Plug Industry Co., Ltd. 17,849.20 17,849.20 Zhongqi South China Auto SalesCompany*① 2,250,000.00 2,250,000.00 Shenzhen Bailiyuan Power Supply Co.,Ltd*① 1,320,000.00 1,320,000.00 Shenzhen Yimin Auto Tranding Co.,Ltd.*① 200,001.10 200,001.10
Subtotal 6,300,000.00 161,138,376.79 14,644,406.04 III. Other equity investment
Shenzhen hanli Hi-Tech Ceramics Co.,Ltd.*② 1,956,000.00 1,956,000.00 South Auto MaintenanceCenter*② 6,700,000.00 6,700,000.00 Subtotal 8,656,000.00 8,656,000.00 Total 6,300,000.00 239,989,909.24 23,300,406.04 Note:*①Industry and commerce registration of the enterprise have been revoked, thelong-term equity investment for the above mentioned enterprise have accrual for depreciation reseves in total.
Note: more details of*②Other equity investment can be seen in Note VIII-1―Equity ofsubsidiaries‖.
12. Investment real estate
(1) Investment real estate measured at cost
Item
House and building
Total
I. Original book value
1.Balance at year-begin 160,870,656.51 160,870,656.51 2.Increase in the current period
(1) Newly increased
3.Decrease in the current period
(1) Disposal
4.Closing balance 160,870,656.51 160,870,656.51 II. Accumulated depreciation and accumulated
amortization
1.Balance at year-begin 78,770,523.03 78,770,523.03 2.Increase in the current period 2,252,578.21 2,252,578.21 (1) Accrual or amortization
2,252,578.21 2,252,578.21 3.Decrease in the current period
(1) Disposal
4.Closing balance 81,023,101.24 81,023,101.24 III.Depreciation reserves
House and building
Item Total
IV. Book value
1. Ending Book value
79,847,555.27 79,847,555.27 2. Book value at year-begin
82,100,133.48 82,100,133.48 (2) Investment real estate with ownership restricted
Up to 30 June 2016, investment real estate with ownership restricted found more in Note Vi-42
(3) Investment real estate with certificate of title im-completed
There are no investment real estate with certificate of title im-completed up to 30 June 2016
13. Fixed assets
(1) Fixed assets
Machinery Transportation Office and other Renovation costs of
Housing buildings Electronic equipment
Item
equipment equipment
Total equipmetn self-owned housing
I. Original book value
1. Balance at year-begin 271,582,729.60 18,597,264.98 6,032,579.79 12,371,209.74 4,251,541.51 3,056,469.95 315,891,795.57 2. Increase in the year 143,589.74 160,927.18 233,687.84 538,204.76 (1) Purchase 143,589.74 160,927.18 233,687.84 538,204.76 3. Decrease in the year 170,000.00 51,528.00 221,528.00 (1) Disposal or scrapping
170,000.00 51,528.00 221,528.00 4. Closing balance 271,582,729.60 18,740,854.72 6,023,506.97 12,553,369.58 4,251,541.51 3,056,469.95 316,208,472.33 II. Accumulated depreciation
1. Balance at year-begin 140,039,849.46 13,707,574.80 4,274,234.16 9,233,841.28 3,794,802.74 2,775,087.22 173,825,389.66 2. Increase in the year 3,578,961.48 196,986.20 235,846.57 321,360.74 49,940.64 4,383,095.63 (1) Accrual 3,578,961.48 196,986.20 235,846.57 321,360.74 49,940.64 4,383,095.63 3. Decrease in the year 140,250.00 50,090.16 190,340.16 (1) Disposal or scrapping 140,250.00 50,090.16 190,340.16 4.Closing balance 143,618,810.94 13,904,561.00 4,369,830.73 9,505,111.86 3,844,743.38 2,775,087.22 178,018,145.13
Machinery Transportation Office and other Renovation costs of
Housing buildings Electronic equipment
Item
equipment equipment
Total equipmetn self-owned housing
III. Depreciation reserves
1.Balance at year-begin 3,555,385.70 1,552,359.79 6,165.00 17,984.71 69,562.98 281,382.73 5,482,840.91 2.Increase in the year
(1) Accrual
3.Decrease in the year
(1) Disposal or scrapping
4. Closing balance 3,555,385.70 1,552,359.79 6,165.00 17,984.71 69,562.98 281,382.73 5,482,840.91 IV. Book value
1. Ending Book value
124,408,532.96 3,283,933.93 1,647,511.24 3,030,273.01 337,235.15 132,707,486.29 2. Book value at year-begin
127,987,494.44 3,337,330.39 1,752,180.63 3,119,383.75 387,175.79 136,583,565.00 Note: Depreciation in this period amounting to RMB 4,383,095.63. Transfer from construction in progress to fixed assets amounting as RMB 0.00 in this year.
(2) Temporary idle fixed asset
The Company had no temporary idle fixed asset end as 30 June 2016.
(3) Certificate of title un-completed
Item Book value
Reasons
1,296,197.46 A failure to carry out the property certificate Shuibei Zhongtian Comprehensive Build is caused by issues rooted in history
Hostel of People North Road 5,902.41 A failure to carry out the property certificate is caused by issues rooted in history
Songquan Apartment (mixed) 48,484.58 A failure to carry out the property certificate is caused by issues rooted in history
Tellus Building underground parking 11,301,880.58 Parking lot is un-able to carried out the
certificate
Tellus Building transformation layer 2,042,214.56 Un-able to carried out the certificate
Trade department warehouse 104,119.09 A failure to carry out the property certificate is caused by issues rooted in history
Warehouse 1,037,493.85 A failure to carry out the property certificate is caused by issues rooted in history
1#,2# and 3-5/F3# plant of Taoyuan Road 4,674,325.36 A failure to carry out the property certificate is caused by issues rooted in history
43,920,788.89 A failure to carry out the property certificate Yongtong Building is caused by issues rooted in history
16# Taohua Garden 1,926,173.88 A failure to carry out the property certificate is caused by issues rooted in history
Automotive building 19,765,036.39 A failure to carry out the property certificate is caused by issues rooted in history
First floor ofBao’an commercial-residence 1,191,966.45 A failure to carry out the property certificate build is caused by issues rooted in history
5,681,949.99 A failure to carry out the property certificate Nuclear Office build is caused by issues rooted in history
Total 92,996,533.49
(4) Fixed assets with restriction in ownership
Up to 30 June 2016, more details of fixed assets with restriction in ownership can be seen in Note VI-42.
14. Construction in process
(1) Basic situation of construction in process
Closing balance Balance at year-begin
Depreci
Item
ation Depreciation
Book balance Book value Book balance Book value reserve reserves
s
Shuibei Jewelry 314,412,966.77 314,412,966.77 279,056,650.35 279,056,650.35 Building
Total 314,412,966.77 314,412,966.77 279,056,650.35 279,056,650.35 (2) Changes of major projects under construction
Transfer to Other
Balance at Increased in the
Name Budget
fixed assets in decrease in Closing balance year-begin year
the year the year
Shuibei Jewelry RMB 413,640,0 279,056,650.35 35,356,316.42 314,412,966.77 Building 00
Total 279,056,650.35 35,356,316.42 314,412,966.77 (Cont.)
Interest
Proportion of project
Accumulated Including: interest
capitalization
Name
investment in budget Progress
amount of interest capitalized amount
Capital source capitalization of the year
rate of the year
(%) (%)
Shuibei Jewelry 76.01% 14,125,416.86
Self-raised Building
Total 76.01% 14,125,416.86
(3) Accrual of depreciation reserves of construction in process in the Year
Up to 30 June 2016, the construction in process of the Company has no impairment evidence 15. Intangible assets
(1) Particular about intangible assets
Item
Land use right
Trademark right Software Total I. Original book value
1.Balance at year-begin 54,284,923.80 95,800.00 937,185.00 55,317,908.80 2.Increase in the year 1,967,851.00 1,967,851.00 (1) Purchase 1,967,851.00 1,967,851.00 3.Decrease in the year
(1) Disposal
4. Closing balance 56,252,774.80 95,800.00 937,185.00 57,285,759.80 II. accumulated amortization
1.Balance at year-begin 1,859,072.76 59,344.91 414,217.76 2,332,635.43 2.Increase in the year 583,614.63 4,789.98 68,718.48 657,123.09 (1) Accrual 583,614.63 4,789.98 68,718.48 657,123.09 3.Decrease in the year
(1) Disposal
4. Closing balance 2,442,687.39 64,134.89 482,936.24 2,989,758.52 III. Depreciation reserves
IV. Book value
1. Ending Book value
53,810,087.41 31,665.11 454,248.76 54,296,001.28 2. Book value at year-begin
52,425,851.04 36,455.09 522,967.24 52,985,273.37 Note: The amount amortized in this year accounting as RMB 657,123.09.
(2) Up to 30 June 2016, details of intangible assets restricte in aspct of ownership or use of rights can be seen in Note VI-42.
(3)Up to 30 June 2016, the Company has no intangible assets with un-confirmed service life
16. Long-term deferred expense
Balance at Increase in the Amortization during
Item
Other decrease
Closing amount this year
year-begin current period
Decoration charge 1,499,006.24 103,480.90 279,461.61 1,323,025.53
Balance at Increase in the Amortization during
Item
Other decrease
Closing amount this year
year-begin current period
Total 1,499,006.24 103,480.90 279,461.61 1,323,025.53 17. Deferred income tax assets/ deferred income tax liabilities
(1) Details of recognized deferred income tax assets
Closing balance Balance at year-begin
Item Deductible temporary Deferred income tax Deductible Deferred income tax difference assets temporary difference assets Provision of assets impairment 78,579,491.60 19,644,872.90 78,579,491.60 19,644,872.90 Equity investment difference 14,844,139.32 3,711,034.83 14,844,139.32 3,711,034.83 Un-realized transaction profit with
4,452,257.92 1,113,064.48 4,530,142.32 1,132,535.58 affiliated companies
Total 97,875,888.84 24,468,972.21 97,953,773.24 24,488,443.31 (2) Details of recognized deferred income tax liabilities
Closing balance Balance at year-begin
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax differences liabilities differences liabilities Depreciation of fixed assets 1,421,592.40 355,398.10 1,912,340.48 478,085.12 Total 1,421,592.40 355,398.10 1,912,340.48 478,085.12 (3) Details of unrecognized deferred income tax assets
Item Closing balance Balance at year-begin
102,739,875.17 102,739,875.16 Offset-able differences
25,393,943.04 41,176,065.43 Offset-able losses
Total 128,133,818.21 143,915,940.59 (4) Offset-able losses of the unrecognized deferred income tax assets will expire the following year Year Closing balance Balance at year-begin Note
2016 2,656,114.39
2017 352,273.78 1,543,641.99
2018 6,414,490.87 15,520,231.84
2019 17,868,060.01 19,656,438.96
2020 507,700.61 1,799,638.25
2021 251,417.77
Total 25,393,943.04 41,176,065.43
18. Other non current assets
Item Closing balance Balance at year-begin
Equipment advance payment 1,800,000.00 1,800,000.00 Other 100,000.00 100,000.00 Total 1,900,000.00 1,900,000.00 19. Details of asset impairment provision
Decreased in the
Amount at Provision in the year Closing Item
year-begin year
Written Transferre
amount back d
104,342,351.09 104,342,351.0 I. Bad debt provision
9 II. Held-to-maturity investment 20,000.00 20,000.00 impairment provision
III. Inventory impairment provision 28,956,396.62 28,956,396.62 IV.Long-term equity investment impairment provision 23,300,406.04 23,300,406.04 V. Fixed assets impairment provision 5,482,840.91 5,482,840.91 VI. Financial assets depreciation reserves available for 8,126,240.00 8,126,240.00 sale
170,228,234.66 170,228,234.6 Total
6 20. Account payable
(1) Account payable
Item Closing balance Balance at year-begin
Item Closing balance Balance at year-begin Account payables 21,507,032.73 27,417,068.61 Total 21,507,032.73 27,417,068.61 (2) Major account payable with over one year age
Item Closing balance Unsettled reasons
Shenzhen SDG Real Estate Co., Ltd. 6,054,855.46 Not paid from related company Total 6,054,855.46
21. Account received in advance
(1) Account received in advance
Item Closing balance Balance at year-begin Within 1 year
8,020,285.90 10,729,385.35 1-2 years
2-3 years
26,059.78 29,881.35 Over 3 years 701,540.96 701,540.96 Total 8,747,886.64 11,460,807.66 Notes: payments in advance over three years mainly represent those by our subsidiary Shenzhen New Yongtong Automobile Detection equipments Co., Ltd. due to that installment and commissioning of equipments have not been inspected and accepted by clients, the payments are not carried forward accordingly.
22. Wages payable
(1) Wages payable
Balance at Decreased in the
Item Increased in the year Closing balance year-begin year
I. Short-term compensation
18,231,524.91 30,539,545.72 26,477,603.01 22,293,467.62 II. Post-employment welfare- defined
1,408,213.90 3,774,880.82 3,709,799.65 1,473,295.07 contribution plans
III. Compensation from labor
relationship dismissed
IV. Other welfare due within one year
Total
19,639,738.81 34,314,426.54 30,187,402.66 23,766,762.69
(2) Short-term compensation
Decreased in
Item Balance at year-begin Increased in the year Closing balance the year
1. Wages , bonuses, allowances and
15,850,539.89 25,410,963.95 21,244,496.07 20,017,007.77 subsidies
2. Welfare for workers and staff
682,837.67 682,837.67
3. Social insurance
10,312.26 2,150,543.10 2,152,146.64 8,708.72 Including: Medical
9,240.78 2,044,961.84 2,046,521.95 7,680.67 insurance
Work injury
476.16 24,779.21 24,798.38 456.99 insurance
Maternity
595.32 80,802.05 80,826.31 571.06 insurance
4. Housing accumulation fund
2,136,992.16 1,677,047.67 1,714,541.29 2,099,498.54 5. Labor union expenditure and
233,680.60 618,153.33 683,581.34 168,252.59 personnel education expense
6. Short-term compensated
absences
7. Short-term profit sharing
plan
8. Other
Total
18,231,524.91 30,539,545.72 26,477,603.01 22,293,467.62 (3) Defined contribution plans
Decreased in
Item Balance at year-begin Increased in the year Closing balance the year
1. Basic endowment insurance
254,438.37 2,658,416.60 2,764,668.96 148,186.01 2. Unemployment insurance
1,324.85 56,282.12 56,432.43 1,174.54 3. Enterprise annuity
1,152,450.68 1,060,182.10 888,698.26 1,323,934.52 Total 1,408,213.90 3,774,880.82 3,709,799.65 1,473,295.07 23. Tax payable
Item Closing balance Balance at year-begin Value-added tax
1,053,019.57 176,318.69 Business tax
294,719.27 974,988.75
Item Closing balance Balance at year-begin Enterprise income tax
745,151.46 1,969,038.78 Individual income tax
126,357.66 174,434.79 Urban maintenance and construction tax
128,221.09 159,154.08 Property right tax
864,954.62 864,954.64 land VAT
5,362,682.64 5,362,682.64 Land use tax 168,887.48 177,330.86 Educational surtax
130,476.59 155,960.23 Other 27,440.21 29,037.80 Total 8,901,910.59 10,043,901.26 24. Other payable
(1) Classification of other payable according to nature of account
Item Closing balance Balance at year-begin Relevance contact, borrowings and interests 120,859,570.50 135,662,323.98 Deposit and margin 20,298,785.55 16,313,694.07 Other 38,524,215.91 41,821,768.63 Total 179,682,571.96 193,797,786.68 (2) Significant other payable with over one year age
Item Closing balance
Reasons of un-paid or carry-over
Shenzhen SDG Co., Ltd. 114,930,125.60 Term of repayment has not been regulated by parent company Total 114,930,125.60
25. Long-term account payable
Item Closing balance Balance at year-begin Deposit of staff residence 3,908,848.40 3,908,848.40 Allocation for technology innovation projects 11,311.96 11,311.96 Dongfeng Motor Company 10,052,619.31 10,052,619.31 Total 13,972,779.67 13,972,779.67 26. Other non-current liability
Item Closing amount Amont at year-begin Rental received in advance 13,837,229.65 13,269,356.04 Total 13,837,229.65 13,269,356.04 Notes: other non-current liability refers to the rental received in advance from Shuibei Jewelry Building, the income was subsequently measured at amortised cost at effective rate.
27. Share capital
Increased/decreased(+,-) in the Period
Shares
Balance at
Item New shares Bonus converted Closing balance year-begin
Other Sub-total
issued shares from public
reserve
I. Restricted shares
1. State-owned shares
2. State-owned legal
person’s shares
20,587,056.00 20,587,056.00 3.Other domestic shares
Including: Domestic legal
person’s shares
71,000,000.00 71,000,000.00 Domestic naturalperson’s
shares
4. Foreign shares
Including: Foreign legal
person’s shares
Foreign naturalperson’s
shares
Total restricted shares 91,587,056.00 91,587,056.00 II. Unrestricted shares
1. RMB Ordinary shares
179,294,544.00 179,294,544.00 2. Domestically listed
foreign shares
26,400,000.00 26,400,000.00 3. Overseas listed foreign
shares
4. Others
Total unrestricted shares 205,694,544.00 205,694,544.00 III. Total shares 297,281,600.00 297,281,600.00 The above mentioned paid-in capital has been verified by Ruihua CPA (LLP), and issued the verification report Ruihua Yan Zi[2015] No. 48330003 and has changed the registration approved by Shenzhen Administration for Industrial and Commerce dated 16 July
2015
28. Capital reserves
Item Balance at year-begin Increased in the year Decreased in the year Closing balance Capital premium 559,544,773.35 559,544,773.35 Other capital reserve 4,647,832.16 4,647,832.16 Total 564,192,605.51 564,192,605.51 29. Surplus reserves
Item Balance at year-begin Increased in the year Decreased in the year Closing balance Statutory surplus
2,952,586.32 2,952,586.32 reserves
Total 2,952,586.32 2,952,586.32 30. Retained profits
Item The period Last year Undistributed profits at the end of last year before adjustment 3,742,260.49 -39,026,529.03 Adjust the total undistributed profits at the beginning of the year (Increase+,
Decrease -)
Undistributed profits at the beginning of the year after adjustment
3,742,260.49 -39,026,529.03 Add: The net profits belong to shareholders of patent company of this year
17,747,952.63 42,768,789.52 Less: Withdraw statutory surplus reserves
Withdraw free surplus reserves
Withdrawal of general risk provisions
Common stock dividends payable
Common stock dividends transferred to capital stock
Retained profits at end of the period 21,490,213.12 3,742,260.49 31. Operating income and cost
Jan.- Jun. 2016 Jan.- Jun. 2015
Item
Income Cost Income Cost Main operating
153,921,452.19 111,871,099.40 154,770,195.92 115,546,491.25 Other operating
3,225,714.29 951,281.48 3,721,585.92 1,393,012.66
Jan.- Jun. 2016 Jan.- Jun. 2015
Item
Income Cost Income Cost Total 157,147,166.48 112,822,380.88 158,491,781.84 116,939,503.91 32. Business tax and surcharges
Item Jan.- Jun. 2016 Jan.- Jun. 2015
Business tax
1,724,935.71 2,353,760.09 City maintenance and construction tax
401,069.68 311,363.21 Education surcharge
277,720.82 182,541.88 Total 2,403,726.21 2,847,665.18 Note: Calculation standards for business tax and surcharges found more in Note V. Taxes.
33. Sales expenses
Item Jan.- Jun. 2016 Jan.- Jun. 2015
Employee compensation 4,695,023.72 5,541,658.75 Advertising and exhibition expenses 164,859.10 175,873.52 Depreciation and amortization 398,391.34 825,516.58 Office
expenses
422,227.60 460,914.15 Utilities 142,347.99 178,593.29 Transportation expenses 252,965.15 300,387.49 Business entertainment expenses 153,784.80 130,496.57 Other 1,170,160.53 1,906,979.35 Total 7,399,760.23 9,520,419.70 34. Administration expense
Item Jan.- Jun. 2016 Jan.- Jun. 2015
Employee compensation 13,469,076.10 8,373,528.93 Taxes 1,489,743.87 1,867,053.64 Office
expenses
1,276,135.32 1,174,612.01 Travelling expense 423,970.13 382,273.10 Business entertainment expenses 363,685.60 361,500.30
Item Jan.- Jun. 2016 Jan.- Jun. 2015
Depreciation and amortization 838,535.59 783,449.14 Consulting and service expenses 1,090,214.77 1,440,968.87 Cargo transportation expenses 648,095.88 686,608.46 Other 1,205,569.86 1,710,921.85 Total 20,805,027.12 16,780,916.30 35. Financial expenses
Item Jan.- Jun. 2016 Jan.- Jun. 2015
Interest expenses
1,634,233.95 10,325,274.97 Less: Interest income
1,584,498.59 1,694,920.56 Less: interest capitalized amount 4,593,142.26 Exchange gains and losses 44,675.69 -10.89 Other 194,589.73 492,475.91 Total 289,000.78 4,529,677.17 36. Investment income
Item
Jan.- Jun. 2016 Jan.- Jun. 2015 Income of long-term equity investment calculated based on equity
2,808,781.91 469,732.57 Investment income of financial products during the holding period
2,291,789.05 154,657.53 Total
5,100,570.96 624,390.10 37. Non-operating income
Amount reckoned into current Item Jan.- Jun. 2016 Jan.- Jun. 2015
non-recurring gains/losses Non-current assets disposal gains
28,104.37 17,094.02 28,104.37 Including: fixed assets disposal gains
28,104.37 17,094.02 28,104.37 Other 17,176.53 31,668.08 17,176.53 Total 45,280.90 48,762.10 45,280.90 38. Non-operating expenditure
Amount reckoned into Item Jan.- Jun. 2016 Jan.- Jun. 2015
current non-recurring gains/losses Non-current assets disposal losses
1,237.84 37,300.18 1,237.84 Including: fixed assets disposal losses
1,237.84 37,300.18 1,237.84 Other 4,527.00 17.75 4,527.00 Total 5,764.84 37,317.93 5,764.84 39. Income tax expense
(1) Statement of income tax expense
Item Jan.- Jun. 2016 Jan.- Jun. 2015 Current income tax expense
701,085.04 1,290,744.72 Deferred income tax expense -103,215.92 -90,027.41 Total 597,869.12 1,200,717.31 (2) Adjustment on accounting profit and income tax expenses
Item Jan.- Jun. 2016
Total profit
18,567,358.28 Income tax measured by statutory/applicable tax rate
4,641,839.57 Impact by different tax rate applied by subsidaies
Adjusted the previous income tax
-73,289.08 Impact by non-taxable revenue
Impact on cost, expenses and losses that unable to deducted
-645,663.27 Impact by the deductible losses of the un-racognzied previous deferred income tax
-3,361,768.73 The deductible temporary differences or deductible losses of the un-recognized deffered
36,750.63 income tax assets in the Period
Change of the balance of deferred income tax asstes/liabilities at period-begin resulted by tax
rate adjustement
Income tax expense
597,869.12 40. Notes to statement of cash flow
(1) Other cash received in relation to operation activities
Item Jan.- Jun. 2016 Jan.- Jun. 2015 Interest income 1,584,498.59 1,694,920.56
Item Jan.- Jun. 2016 Jan.- Jun. 2015 Interest income 1,584,498.59 1,694,920.56 Intercourse funds and other 20,785,593.31 19,396,599.63 Total 22,370,091.90 21,091,520.19 (2) Other cash paid in relation to operation activities
Item Jan.- Jun. 2016 Jan.- Jun. 2015 Expenses of operation management cash paid
7,268,703.14 12,564,652.19 Intercourse funds and other 18,233,788.32 34,932,954.16 Total 25,502,491.46 47,497,606.35 (3) Cash paid related with financing activities
Item Jan.- Jun. 2016 Jan.- Jun. 2015 Cash paid for fund raising 437,000.00 Total 437,000.00 41. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
Supplementary information
Jan.- Jun. 2016 Jan.- Jun. 2015 1. Net profit adjusted to cash flow of operation activities:
Net profit
17,969,489.16 7,308,716.54 Add: Provision of assets impairment
6,583,807.92 Depreciation of fixed assets, consumption of oil assets and depreciation of
603,480.29 productive biology assets
6,600,980.21
Amortization of intangible assets
99,401.25 170,434.46 Amortization of long-term deferred expenses
279,461.61 20,206.16 Loss from disposal of fixed assets, intangible assets and other long-term assets(gain
is listed with―-‖)
-23,466.53 6,583,807.92 Loss of disposing fixed assets(gain is listed with―-‖)
Loss from change of fair value(gain is listed with―-‖)
Financial expenses (gain is listed with―-‖)
1,678,909.64 5,732,121.82 Investment loss (gain is listed with―-‖)
-5,100,570.96 -624,390.10 Decrease of deferred income tax asset( (increase is listed with―-‖)
19,471.10 32,658.34
Supplementary information
Jan.- Jun. 2016 Jan.- Jun. 2015 Increase of deferred income tax liability (decrease is listed with―-‖)
-122,687.02 -122,685.75 Decrease of inventory (increase is listed with―-‖)
6,971,918.06 39,818,859.03 Decrease of operating receivable accounts (increase is listed with―-‖)
-2,280,192.36 -8,858,504.36 Increase of operating payable accounts (decrease is listed with―-‖)
-2,121,207.80 -16,801,821.65 Other
Net cash flow arising from operating activities
23,971,506.36 33,862,882.70 2. Material investment and financing not involved in cash flow
Debt transfer to capital
Convertible bonds due within one year
Fixed assets financing lease-in
3. Net change of cash and cash equivalents:
Balance of cash at period end
190,981,593.06 131,254,844.47 Less: Balance of cash equivalent at year-begin
159,184,710.93 80,045,669.65 Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increasing of cash and cash equivalents
31,796,882.13 51,209,174.82 (2) Constitution of cash and cash equivalent
Item
Jan.- Jun. 2016 Jan.- Jun. 2015 I. Csah
190,981,593.06 159,184,710.93 Including: stock cash
91,387.70 75,003.23 Bank deposit available for payment at any time
190,890,205.36 159,109,707.70 Other monetary fund available for payment at any time
II. Cash equivalent
Including: bond investment matured within 3 months
II. Balance of cash and cash equivalent at period-end
190,981,593.06 159,184,710.93 Including: Cash and cash equivalent with restiction used by parent company
or subsidiary in the Group
Note: cash and cash equivalent excluding the cash and cash equivalent with use-restricted
concerned of the parent company or subsidiaries in the Group
42. Assets with ownership or use right restricted
Item
Book value at Period-end Reason
Investment real estate 48,012,528.46
Fixed assets 6,499,847.17
Intangible assets 51,868,129.20
Long-term equity investmnet 68,589,786.96 See Note IX -5(2)
Total 174,970,291.79
1. In order to meet needs in operation and construction, the Company signed the comprehensive credit contract (2014 SYJTZZ No.007) with credit amount of 211,000,000.00 yuan with China Citic Bank Jingtian Branch on August 28, 2014, and signed the highest mortgage contract (2014 SYJTZDZ No.008) by taking the book assets with the amount of 50,293,453.68 yuan of Shenzhen SDG Testrite Real Estate Co. Ltd. as the mortgage, and also signed the highest mortgage contract (2014 SYJTZDZ No.007) by taking the book assets with the amount of 117,706,546.32 yuan of the Company as the mortgage, and hereby signed the loan contract (2014 SYJTDZ No.0012) with the amount of 157,500,000.00 yuan and the length of maturity from August 28, 2014 to August 28, 2017 on August 28, 2014, the mode of repayment is to pay interest monthly and return8% of principal semiannually after the loan origination and pay the balance at one time once due, up to June 30, 2016, this loan has been returned, but the assets are still in the state of mortgage because the loan commitment has not been canceled.
2. The land of this project (SFDZ No. 2000609764) needs to be mortgaged in order to satisfy the requirements for the implementation of Testrite Shuibei Jewelry Building project, theCompany’s subsidiary Shenzhen Zhongtian Industry Co., Ltd. signed the loan contract (Mortgage& Loan 2014 Gu 250 Tianbei) with borrowing amount of 0.3 billion yuan and loan term from June 24, 2014 to June 23, 2024 with China Construction Bank Shuibei Branch on June 24, 2014, and the Company providing the joint liability guaranty (Guarantee and loan 2014 Gu 250 Tianbei), up to June 30, 2016, this loan has been returned, but the assets are still in the state of mortgage because the loan commitment has not been canceled.
3. The Company's non-wholly owned subsidiary, Shenzhen Huari Toyota Automobile Sales Co., Ltd. signed the macro contract of credit business with credit line of 49 million yuan with Guangdong Development Bank Shenzhen Branch on August 28, 2014 for the purchase of automobiles, of which the time limit is three years, and also signed the corresponding credit line contract, guarantee
contract of maximum amount, cash deposit pledge contract of maximum amount, and mortgage contract of maximum amount for which theCompany’s holding subsidiary, Shenzhen SDG Huari Automobile Enterprise Co., Ltd. providing guarantee and taking the basement, first to second floors, third to sixth floors and the seventh floor of Huari Xiuli Building which is under its name as the mortgage guarantee. Up to June 30, 2016, this loan has been returned, but the assets are still in the state of mortgage because the loan commitment has not been canceled.
43. Item of foreign currency
(1) Item of foreign currency
Closing balance of foreign
Item
Rate of conversion Ending RMB balance converted currency
Monetary fund
Including: USD 856.00 6.6312 5,676.31 HKD 534.00 0.8547 456.39 IX. Changes of consolidation range
1.Enterprise merger under the different control
The Company had no enterprise merger under the different control in Period.
2.Enterprise merger under the same control
The Company had no enterprise merger under the same control in Period.
3.Reverse purchase
The Company had no reverse purchase in Period.
4.Disposal of subsidiaries
The Company had no disposal of subsidiaries in Period.
X. Equity in other entity
1. Equity in subsidiary
(1) Constitute of enterprise group
Main Share-holding ratio
Registered Business
Subsidiary operation Acquired way place nature
Directly Indirectly
place
Shenzhen Tellus New Yongtong Automobile Service Obtained by Shenzhen Shenzhen 100.00
Development Co. Ltd
industry establishment or
Main Share-holding ratio
Registered Business
Subsidiary operation Acquired way place nature
Directly Indirectly
place
investment Obtained by Shenzhen Dongchang Yongtong Motor Service
Shenzhen Shenzhen 95.00 establishment or Vehicle Detection Co., Ltd. industry
investment Obtained by Shenzhen New Yongtong Dongxiao Vehicle Service
Shenzhen Shenzhen 95.00 establishment or Inspection Co., Ltd. industry
investment Obtained by Shenzhen SD Tellus Property Management Service
Shenzhen Shenzhen 100.00 establishment or Co., Ltd industry
investment Obtained by ShenzhenBao’an Shiquan Industrial Co., Ltd Shenzhen Shenzhen Commerce 100.00 establishment or investment Obtained by Shenzhen SD Tellus Real Estate Co., Ltd Shenzhen Shenzhen Manufacture 100.00 establishment or investment Obtained by Shenzhen Tellus Real Estate Exchange Co. Service
Shenzhen Shenzhen 100.00 establishment or Ltd industry
investment Obtained by\Shenzhen New Yongtong Automobile Service
Shenzhen Shenzhen 51.00 establishment or Inspection Equipment Co. Ltd industry
investment Obtained by Shenzhen Automobile Industry Trading
Shenzhen Shenzhen Commerce 100.00 establishment or General Company
investment Obtained by Shenzhen Automotive Industry Supply Service
Shenzhen Shenzhen 100.00 establishment or Corporation industry
investment Service Obtained by Shenzhen SD Huari Automobile Enterprise Shenzhen Shenzhen 60.00
industry
Main Share-holding ratio
Registered Business
Subsidiary operation Acquired way place nature
Directly Indirectly
place
Co.Limited establishment or investment Obtained by Shenzhen Huari Anxin Automobile Inspection Service
Shenzhen Shenzhen 100.00 establishment or Ltd industry
investment Obtained by Service
Shenzhen Zhongtian Industrial Co., Ltd. Shenzhen Shenzhen 100.00 establishment or industry
investment Obtained by Shenzhen Huari TOYOTA Automobile Sales
Shenzhen Shenzhen Commerce 60.00 establishment or Service Co., Ltd.
investment Obtained by Ceramic
Shenzhen Hanli Hi-Tech Ceramics Co., Ltd. Shenzhen Shenzhen 80.00 establishment or technology
investment Obtained by Vehicle
South Auto MaintenanceCenter* Shenzhen Shenzhen 100.00 establishment or maintenance
investment Notes:*the operation terms of Shenzhen Hanligao Technical Ceramics Company was form 21 September 1993 to 21 September 1998, and 12 July 1994 to 11 July 2002 for Shenzhen South Auto Maintenance and Repair Center. These two companies had been deregistered for failure to participate in annual business and commercial inspection since they ceased operation for years. The Company was not able to exercise effective control on these companies which were not included in our consolidated financial statements. Carrying value of our investments in these companies which actually constituted net investments was nil.
(2) Important non-wholly-owned subsidiary
Dividend
Gains/losses announced to
Share-holding ratio Ending equity of Subsidiary attributable to distribute for
of minority(%) minority minority in the Period minority in the
Period
Shenzhen Huari Toyota Automobile Co. Ltd
40% -7,819.22 -2,771,423.82
Dividend
Gains/losses announced to
Share-holding ratio Ending equity of Subsidiary attributable to distribute for
of minority(%) minority minority in the Period minority in the
Period
Shenzhen SD Huari Automobile Enterprise
Co.Limited
40% 40,717.80 12,251,385.05 (3) Main finance of the important non-wholly-owned subsidiary
Closing balance
Subsidiary
Non-current Non-current
Current assets Total assets Current liability Total liability assets liability
Shenzhen Huari Toyota
Automobile Co. Ltd
32,525,108.69 1,435,142.36 33,960,251.05 40,888,810.59 40,888,810.59 Shenzhen SD Huari
Automobile Enterprise
43,722,007.16 32,741,145.84 76,463,153.00 45,479,292.27 355,398.10 45,834,690.37 Co.Limited
（Cont.）
Book at year-begin
Non-current Non-current
Subsidiary
Current assets Total assets Current liability Total liability assets liability
Shenzhen Huari Toyota
Automobile Co. Ltd
36,700,757.39 1,308,446.07 38,009,203.46 44,918,214.96 44,918,214.96 Shenzhen SD Huari
Automobile Enterprise
39,761,100.57 33,740,985.59 73,502,086.16 42,497,332.90 478,085.12 42,975,418.02 Co.Limited
Jan.- Jun. 2016 Jan.- Jun. 2015
Total Cash flow Total Cash flow from Subsidiary
Business income Net profit comprehensiv from operating Business income Net profit comprehensiv operating e income activities e income activities Shenzhen
Huari
Toyota
94,044,194.14 -19,548.04 -19,548.04 211,114.88 103,112,248.20 -961,593.44 -961,593.44 38,080,060.28 Automobil
e Co. Ltd
Shenzhen
19,299,222.50 101,794.49 101,794.49 2,163,653.64 16,856,842.48 -563,970.91 -563,970.91 -1,026,202.62
Subsidiary Jan.- Jun. 2016 Jan.- Jun. 2015
SD Huari
Automobil
e
Enterprise
Co.Limited
(4) Material limits on using group assets or discharging group debts
There is no material limit on using group assets or discharging group debts by our subsidiaries. 2. Transactions leading to change ofowner’s equity while not resulting in loss of control in subsidiary
There is no transaction by the Company leading to change ofowner’s equity while not resulting in loss of control in subsidiary.
3. Equity in joint venture and cooperative enterprise
(1) Important cooperative enterprise
Share-holding ratio(%) Accounting treatment on Main
Registered investment for joint Name operation Business nature
place
Directly Indirectly
venture and place
cooperative enterprise Affiliation
Shenzhen Zung Fu Tellus Auto
Shenzhen Shenzhen Sales and maintain of Benz 35.00 -- Equity method Service Co., Ltd.
Shenzhen Dongfeng Auto Co., Auto manufacture and
Shenzhen Shenzhen -- 25.00 Equity method Ltd. maintain
Joint venture
Investment in industry and
Shenzhen Tellus Jimeng
Shenzhen Shenzhen property management and 50.00 -- Equity method Investment Co., Ltd
leasing
(2) Main financial information of the important joint venture
2016-6-30 / Jan.- Jun. 2016 2015-6-30 / Jan.- Jun. 2015
Shenzhen
Item
Shenzhen Zung Fu Tellus Shenzhen Zung Fu Tellus Shenzhen Dongfeng Dongfeng Auto
Auto Service Co., Ltd. Auto Service Co., Ltd. Auto Co., Ltd. Co., Ltd.
Current assets
325,276,749.35 389,688,621.60 284,555,030.00 349,579,989.46 Non -current assets
24,154,698.36 184,478,247.59 25,699,486.00 194,895,619.83
2016-6-30 / Jan.- Jun. 2016 2015-6-30 / Jan.- Jun. 2015
Shenzhen
Item
Shenzhen Zung Fu Tellus Shenzhen Zung Fu Tellus Shenzhen Dongfeng Dongfeng Auto
Auto Service Co., Ltd. Auto Service Co., Ltd. Auto Co., Ltd. Co., Ltd.
Total assets
349,431,447.71 574,166,869.19 310,254,516.00 544,475,609.29 Current liabilities
153,551,993.27 294,559,478.97 102,404,321.00 262,389,706.82 Non–current liabilities
70,849,404.21 75,538,051.99 Total liabilities
153,551,993.27 365,408,883.18 102,404,321.00 337,927,758.81 Minorityshareholders’ equity
-5,435,952.70 -5,288,652.50 Attributable to parent company
shareholders’ equity
195,879,454.44 214,193,938.71 207,850,195.00 211,836,502.98 Share of net assets calculated by
shareholding ratio
68,557,809.05 53,548,484.68 72,747,568.25 52,959,125.74 Adjustment items
--Goodwill
--Unrealized profit of internal
trading
—Other
31,977.91
Book value of equity investment
in joint ventures
68,589,786.96 53,548,484.67 72,747,568.25 52,959,125.74 Fair value of the equtiy
incestment of affiliation with
public offers concerned
Operation income
509,511,244.05 254,428,669.06 345,123,222.02 158,949,383.31 Net profit
6,120,624.89 2,210,135.53 300,028.70 330,374.34 Net profit of the termination of
operation
Other comprehensive income
2016-6-30 / Jan.- Jun. 2016 2015-6-30 / Jan.- Jun. 2015
Shenzhen
Item
Shenzhen Zung Fu Tellus Shenzhen Zung Fu Tellus Shenzhen Dongfeng Dongfeng Auto
Auto Service Co., Ltd. Auto Service Co., Ltd. Auto Co., Ltd. Co., Ltd.
Total comprehensive income
6,120,624.89 2,210,135.53 300,028.70 330,374.34 Dividends received from
affiliation in the year
6,300,000.00
(3) Main financial information of the important cooperative enterprise
Shenzhen Tellus Jimeng Investment Co., Ltd
Item
2016-6-30 / Jan.- Jun. 2016 2015-6-30 / Jan.- Jun. 2015 Current assets
33,679,916.52 17,734,574.30 Including: cash and cash equivalents
28,236,376.99 13,645,857.23 Non -current assets
330,334,425.84 297,377,588.89 Total assets
364,014,342.36 315,112,163.19 Current liabilities
13,409,649.71 10,642,771.76 Non–current liabilities
230,870,000.00 184,870,000.00 Total liabilities
244,279,649.71 195,512,771.76 Minorityshareholders’ equity
Attributable to parent companyshareholders’
119,734,692.65 119,599,391.43 equity
Share of net assets calculated by shareholding
59,867,346.33 59,799,695.73 ratio
Adjustment items
--Goodwill
--Unrealized profit of internal trading
—Other -53,798.39
Book value of equity investment in joint ventures
59,813,547.94 59,717,642.94
Shenzhen Tellus Jimeng Investment Co., Ltd
Item
2016-6-30 / Jan.- Jun. 2016 2015-6-30 / Jan.- Jun. 2015 Fair value of the equtiy incestment of joint
ventures with public offers concerned
Operation income
Financial expense
-27,701.41 -249,400.62 Income tax expense
Net profit
27,701.41 249,400.62 Net profit of the termination of operation
Other comprehensive income
Total comprehensive income
27,701.41 249,400.62 Dividends received from joint venture in the year
(4) Summary financial informantion of not important joint venture and cooperative enterprise 2016-6-30 / Jan.- Jun. 2016 2015-6-30 / Jan.- Jun. 2015 Item
Joint ventures:
Total investment of book value 10,381,984.51 9,958,144.84 Total amount of the follow items calculated by
share-holding ratio
—net profit 345,955.27 401,620.03—Other comprehensive income
—Total comprehensive income 345,955.27 401,620.03 affiliation:
Total investment of book value 24,355,699.12 24,716,186.73 Total amount of the follow items calculated by
share-holding ratio
—net profit -360,487.61 -145,997.05
2016-6-30 / Jan.- Jun. 2016 2015-6-30 / Jan.- Jun. 2015 Item
—Other comprehensive income
—Total comprehensive income -360,487.61 -145,997.05 (5) Excess deficit from joint venture or affiliated business
Cumulative losses Losses of last year Cumulative losses Name un-recognized in un-recognized (or net profit un-recognized at current last year shares in the Year ) period-end Shenzhen Tellus Auto Service Chain Co., Ltd. 97,536.99 130.47 97,667.46 Shenzhen New Yongtong Dongxiao Auto Service
433,009.11 135,925.49 568,934.60 Co., Ltd.
Shenzhen Yongtong Xinda Inspection Equipment
432,678.37 316,676.27 749,354.64 Co., Ltd.
4. Imporant co-management
No co-management in the Peirod.
XI. Related party and related transactions
1. Parent company of the enterprise
Regist Share-holding ratio
Registered Voting right ratio on the Parent company ration Business nature on the enterprise for
capital enterprise(%)
place parent company(%)
Development and
operation of real
Shenz
Shenzhen SDG Co., Ltd. estate and 2,582,820,000 50.09 50.09 hen
domestic
commerce
Note: Ultimate controller of the Company is SASAC of Shenzhen.
2. Subsidiary of the Company
Found more in Note X-1.
3. Details of joint-venture and affiliated enterprise of the Company
Found more in Note X-3.
4. Particulars about other related parties
Other related parties Relationship
Shenzhen SDG Swan Industrial Company Ltd. Subsidiary of parent company
Shenzhen Machinery Equipment Imp& Exp. Company Subsidiary of parent company
Shenzhen SDG Real Estate Co., Ltd. Subsidiary of parent company
Hong Kong Yujia Investment Co, Ltd. Subsidiary of parent company
Shenzhen Tellus Real Estate Yueyang Co., Subsidiary of parent company
Shenzhen SDG Development Center Construction Subsidiary of parent company
Supervision Co., Ltd.
Shenzhen Tellus Yangchun Real Estate Co., Ltd. Subsidiary of parent company
Shenzhen Longgang Tellus Real Estate Co., Ltd. Subsidiary of parent company
5. Related transaction
(1) Related lease
①As a lessor for the Company
Lease income in Lease income in Lessee Assets type
recognized in Jan.- recognized in Jan.- Jun. 2016 Jun. 2015 Shenzhen Zung Fu Tellus Auto Service Co., Ltd. House leasing 2,523,809.42 2,650,000.00 Shenzhen New Yongtong Automobile Services Co., Ltd. House leasing 203,557.22 192,639.00 Shenzhen New Yongtong Dongxiao Auto Service Co., Ltd. House leasing 144,933.34 141,300.00 (2) Related guarantee
①The Company serves as guarantor
The Company entered into pledge contract with Renfu Auto Management (Shenzhen) Co., Ltd. (hereinafter referred to as Renfu Shenzhen), pursuant to which, during the period from establishment of our associate company Shenzhen Renhu Teli Auto Service Co., Ltd. (hereinafter referred to as Renhu Teli) to the expiration date of the joint venture contract between the Company and Renhe Shenzhen, provided that Renfu Shenzhen provides borrowings to Renfu Teli under entrusted loan, Renfu Teli makes borrows from bank or other financial institutions and guaranteed by Renfu Shenzhen, and the total borrowings shall not exceed RMB100 million, the Company bears35% of the obligations arising from above borrowings according to its shareholding proportion. It was agreed for the Company to pledge35% equity interests held in Renfu Teli to Renfu Shenzhen as counter guarantee for the above borrowings.
Other than the above guarantee, theCompany’s provision of guarantees as guarantor all relates to
such guarantees provided to subsidiaries.
(3) Engagement of related parties to provide labor services
Zhongtian Industrial selected construction supervision institution for Teli Shuibei Project through public bidding. On 14 May 2013, Tefa Supervision obtained letter of acceptance (No. 20130514002C) issued by Shenzhen Construction Project Trading Service Center, and became the construction supervision institution for Teli Shuibei Project through public bidding.
In May 2013, Zhongtian Industrial signed Supervision Contract in respect of Teli Shuibei Jewelry Building Project with Tefa Supervision, pursuant to which, Zhongtian Industrial engaged Tefa Supervision to exercise supervision in respect of Teli Shuibei Jewelry Building Project. The supervision fee was RMB 5,041,900. As at 30 June 2016, an aggregate of RMB 3,597,200 has been paid.
(4) No currencies deposit occurred with related parties in the period
(5) Related fund occupation expenses
Related party Content Jan.- Jun. 2016 Jan.- Jun. 2015 Borrow-in:
Shenzhen SDG Co., Ltd. Fund occupation expenses 1,634,233.95 2,700,873.50 Borrow-out:
Shenzhen Xinglong Machinery Mould Co., ltd. Fund occupation expenses 38,013.32 37,708.32 (6) Remuneration of key manager
Item Jan.- Jun. 2016 Jan.- Jun. 2015
Remuneration of key manager RMB 2,810,000 RMB 2,710,000 6. Receivable/payable items of related parties
(1) Receivable item
Closing balance Balance at year-begin Item
Book balance Bad debt Book balance Bad debt reserve reserve Account receivable:
Shenzhen New Yongtong Automobile Services Co., Ltd. 960,731.00 927,602.00 927,602.00 927,602.00 Shenzhen New Yongtong Dongxiao Auto Service Co., Ltd. 704,700.00 680,400.00 680,400.00 680,400.00 Total 1,665,431.00 1,608,002.00 1,608,002.00 1,608,002.00
Closing balance Balance at year-begin Item
Book balance Bad debt Book balance Bad debt reserve reserve Other account receivable:
Shenzhen Tellus Auto Service Chain Co., Ltd. 1,359,297.00 1,359,297.00 1,359,297.00 1,359,297.00 Shenzhen New Yongtong Technology Co., Ltd. 116,480.22 58,240.11 116,480.22 58,240.11 Shenzhen Yongtong Xinda Inspection Equipment Co., Ltd. 520,600.47 519,587.47 519,587.47 519,587.47 Shenzhen Xiandao New Material Co., Ltd. 660,790.09 660,790.09 660,790.09 660,790.09 Shenzhen Xinglong Machinery Mould Co., ltd. 2,148,349.62 960,116.10 2,110,336.30 960,116.10 Shenzhen Tellus New Yongtong Auto Service Co., ltd. 114,776.33 114,776.33 114,776.33 114,776.33 Shenzhen Tellus Jimeng Investment Co., Ltd 9,363.32
Total 4,929,657.05 3,672,807.10 4,881,267.41 3,672,807.10 Long-term account receivables
Shenzhen Tellus Auto Service Chain Co., Ltd. 2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68 Total 2,179,203.68 2,179,203.68 2,179,203.68 2,179,203.68 (2) Payable item
Item Closing balance Balance at year-begin Account payable:
Shenzhen SDG Co., Ltd. 6,054,855.46 6,054,855.46 Shenzhen Machinery Equipment Imp& Exp. Company 45,300.00 45,300.00 Total 6,100,155.46 6,100,155.46 Other account payable:
Shenzhen SDG Real Estate Co., Ltd. 335,701.34 335,701.34 Hong Kong Yujia Investment Co, Ltd. 1,999,610.15 2,019,296.65 Shenzhen SDG Swan Industrial Company Ltd. 20,703.25 20,703.25 Shenzhen Machinery Equipment Imp& Exp. Company 1,554,196.80 1,455,892.44 Shenzhen SDG Co., Ltd. 114,930,125.60 129,810,211.32 Shenzhen Longgang Tellus Real Estate Co., Ltd. 1,095,742.50 1,095,742.50
Item Closing balance Balance at year-begin Shenzhen Tellus Yangchun Real Estate Co., Ltd. 476,217.49 476,217.49 Shenzhen Xinglong Machinery Mould Co., ltd. 78,515.56 78,515.56 Shenzhen New Yongtong Technology Co., Ltd. 320,000.00 320,000.00 Shenzhen Tellus Hang Investment Co., ltd. 24,417.81 25,703.43 Shenzhen Yongtong Xinda Inspection Equipment Co., Ltd. 24,340.00 24,340.00 Total 120,859,570.50 135,662,323.98 XII. Commitment or contingency
1. Important commitments
(1) Capital commitments
Item Closing balance Balance at year-begin Signed without recognized in financial statement
—Purchase and construction of long-term assets 137,851,735.07 158,289,230.16 commitment
Total 137,851,735.07 158,289,230.16 2. Contingency
(1) Contingent liability and its financial influence formed by un-settle lawsuits or arbitration
①In October 2005, a lawsuit was brought before Shenzhen Luo Hu DistrictPeople’s Court by the Company, which was the recognizer of Jintian Industrial (Group) Co., Ltd.(―Jintian‖) to require Jintian to redress RMB 4,081,830 (principal: RMB 3,000,000, interest: RMB 1,051,380, legal fare: RMB 25,160 and executive fare: RMB 5,290). Shenzhen IntermediatePeople’s Court had adjudged that the Company won the lawsuit and the forcible execution had been applied by the Company. As for the deducted amount in previous years, the Company has counted as debt losses. The lawsuit has not executed yet till on 30 June 2015.
In April 2006, Shenzhen Development Bank brought an accusation againstJintian’s overdue loan two million U.S. dollars and the Company who guaranteed for this loan. The company took on the principal and all interest. After that, the Company appealed to Shenzhen Luohu District People's Court, asking Jintian to repay 2,960,490 U.S. dollars and interest. In 2008, it reached Shen Luo No.937 Civil Reconciliation Agreement (2008) after the mediating action taken by Shenzhen Luohu District People's Court. The agreement is as follows: If Jintian repay 2,960,490 U.S. dollars before October 31, 2008, the company will exempt all the interest. If Jintian can not settle the amount on time, it will pay the penalty in accordance with the People's Bank of China RMB benchmark lending rate over the same period. The lawsuit has not executed yet till on 30 June 2015.
②Subsidiary of the Company Shenzhen SD Tellus Real Estate Company(―Tellus Real EstateCompany‖) entered
into the―Contract of Liyehui Food Street Co-operation in BujiTown‖ with Shenzhen Jinlu Industrial& Trading Company(―JinluCompany‖) on 29 November 1994. In accordance with the Contract, on the foundation of―Cooperative Development Contract of Liyehui Food Street in BujiTown‖ signed between the Jinlu Company and land providers -- Shenzhen Real Estate Management Branch Bureau of Guangzhou Military Region(―Real Estate Management BranchBureau‖) andPeople’s Liberation Army Unit 75731(― Unit75731‖), construction funds 10 million Yuan invested by Tellus Real Estate, received fixed floor area of 6,000
M2
property, and Jinlu Company promise to delivered the completed building and ancillary facility at the end of November 1995. Tellus Real Estate Company have invested a total of 9,822,500.00 Yuan in cooperative development up to 31 December 1996, however, Tellus Real Estate Company failed to get the property should enjoy on the agreed date for property hand over. Tellus Real Estate Company institute an action at law to the Court, requesting Jinlu Company pay back the 9.8 million Yuan investment and interests immediately and shoulder all the Court Costs, Real Estate Management Branch Bureau and Unit 75731 were sentence to be the defendant pursuant to the law in trial. On 18 March 2003, in line with the Written Judgment (2000) Shen Zhong Fa Fang Chu Zi No. 101 by Shenzhen IntermediatePeople’s Court, the above mentioned―CooperativeContract‖ is valid, identified as nature of cooperative housing, the two parties continue to perform the contract and legitimate mechanism should be follow if any disputes arising from executing the Contract by parties in the Contract.
In March 2005, as a joint plaintiff, Tellus Real Estate Company and Jinlu Company start a suit to Real Estate Management Branch Bureau and Unit 75731(Communication Equipment Repair Institute of Guangzhou Military Region), requesting two defendants performing cooperative contract, and delivered 11,845
M2(approximately 11,851,357 Yuan in value) property of Liyehui Food Street to two plaintiff, moreover, pay for the rental income 5,034,664.94 Yuan in total due to two plaintiff since 1998. Meanwhile, Tellus Real Estate Company and Jinlu Company entered into an agreement, that is, due to the self-executing or mandatory enforcement by the Court, concerning the Liyehui Food Street property taken back in lawsuit, Tellus Real Estate Company received a fixed property of 6,000
M2,
rests of the property belongs to Jinlu Company and Tellus Real Estate Company owns all property while less than 6,000
M2;
the income deserved in the lawsuit should be allocated according to 5:5 ratio by two parties, and as for this lawsuit, which have its first trial in Shenzhen IntermediatePeople’s Court in August 2010, because details of a case is complex, the case did not judge in court.
In 2011, Tellus Real Estate Company received a civil ruling paper (2005) Shen Zhong Fa Min Chu Zi No. 82 from Shenzhen IntermediatePeople’s Court, that is,―People’s Court has no right to judged how to allocate the building and its workinginterest‖, because Liyehui Food Street property―is part of the illegalbuilding‖, reject the Tellus Real Estate Company and JinluCompany’s claim in aspect of the property delivery and rental allocation of Liyehui Food Street. The cooperative development fund invested for Tellus Real Estate Company has been provision for bad debts in total in previous year by the Company.
③In 2014, our subsidiary Shenzhen Auto Industrial Trading Company (hereinafter referred to as Auto Industrial Trading Company) was served with a summon frompeople’s court in Futian district, Shenzhen, pursuant to which, Shenzhen branch of China Huarong Asset Management Co., Ltd.(―HuarongShenzhen‖) sued Auto Industrial Trading Company for joint settlement responsibility in respect of the debt disputes between Shenzhen Guangming Watch Co., Ltd.(―GuangmingWatch‖) and its creditors.
Pursuant to the civil verdict (SFFJCZD No.801(1997)) issued bypeople’s court in Futian district, Shenzhen on 24 November 1997, Guangming Watch shall repay RMB700,000 and interests thereof to Shenzhen Futian branch of China CITIC Bank. Guangming Watch failed to discharge debts after such verdict, and Shenzhen Futian branch of China CITIC Bank applied for compulsive execution and recovered an amount of RMB561,398.30. later, due to that there was no property available for execution,people’s court in Futian district of Shenzhen issued civil verdict (SFFZZD No.102(1998)) to suspend execution on 10 December 1998. In July, the original creditor Shenzhen Futian branch of China CITIC Bank transferred the abovecreditor’s right (namely outstanding principal of RMB350,000 million and relevant interests) to Huarong Shenzhen.
Guangming Watch was an associate company of Auto Industrial Trading Company with a shareholding of10% in 1990. Guangming Watch has been deregistered with Shenzhen Business and Commerce Bureau on 28 February 2002. Huarong Shenzhen sued Guangming Watch and Auto Industrial Trading Company atpeople’s court in Futian district of Shenzhen in May 2014, requesting to obtain all the interests of Guangming Watch under the civil verdict (SFFJCZD No.801(1997)), and request an order for Auto Industrial Trading Company to take joint settlement responsibility for the above debts on the grounds that failure of Guangming Watch to settle debts resulted in prejudice increditors’ right by shareholders. Up to the approval date of the financial report, the case has not been ruled yet.
④ TheCompany’s subsidiary, Shenzhen Automobile Industry and Trade Co., Ltd (hereinafter referred to as "Automobile Industry and Trade Company") got shares in Shenzhen Guangming Watch Co., Ltd. (hereinafter referred to as "Guangming Watch Company", Automobile Industry and Trade Company holds10% of shares) in 1990, this company loaned RMB 2 million yuan from China Construction Bank on December 12, 1990 with time limit of nine months, Guangming Watch Company repaid RMB 100,000 yuan in October 1992, but the balance was still in arrears. Shenzhen Bao'an District People's Court (1996) BFJZ No. 183 paper of civil judgment determined Guangming Watch Company to repay the loan of RMB 1.9 million yuan and the interests to China Construction Bank, Shenzhen Intermediate People's Court (1996) SZFJYZZ No. 563 paper of civiljudgment’ final judgment affirmed the original judgment. After the judgment, Guangming Watch Companydidn’t perform the obligations, so China Construction Bank applied for compulsory execution and got repayment of 1.64 million yuan, but later due to no property for execution, Bao'an District People's Court (1997) SBFZZ No. 220 civil ruling paper had the verdict for termination of execution on May 20, 2003. In June 2004, the original creditor CCB transferred the above-mentioned creditor's rights to Assets Management Company, after several transfers, Ezhou Liantai Investment and Consulting Co., Ltd. put forward the creditor's rights in April 2008.
Guangming Watch Company has been revoked license by Shenzhen Industrial and Commercial Bureau on February 28, 2002. Ezhou Liantai Investment and Consulting Co., Ltd. submitted the case of Guangming Watch Company and Automobile Industry and Trade Company to Shenzhen Futian District People's Court in May 2012, requesting to order Guangming Watch Company to pay off 3.607 million yuan and the interests from May 11, 2012 to the actual repayment date, and requesting to order Automobile Industry and Trade Company to assume the joint liability for above-mentioned debts by the reason of Automobile Industry and Trade Company being its last shareholder, not setting up a liquidation team for liquidation within the legal time limit, and assuming the joint liability for debts.
In 2013, Shenzhen Futian District People's Court (2012) SFFMECZ No. 4328 paper of civil judgment determined Automobile Industry and Trade Company to assume the joint liability for debts in (1996) SZFJYZZ No. 563 paper of civil judgment to the accused, Guangming Watch Company. Automobile Industry and Trade Company appealed, on December 12, 2013, Shenzhen Intermediate People's Court (2013) SZFSZZ No. 1677 civiljudgment’s final judgment affirmed the original judgment. Automobile Industry and Trade Company accrued the payable joint liability funds of 2,130,200 yuan in 2013.
Hua Rong District People's Court of Ezhou City (2008) HMCZ No. 57 civil judgment determined the accused Ezhou Liantai Investment and Consulting Co., Ltd. to pay the accuser Huizhou Lamei Information Consulting Co., Ltd. assignment of claims and liquidated damages and also bear the legal fare. In the executing process, on April 14, 2015, Hua Rong District People's Court of Ezhou City (2015) EHRZYZ No. 0005 execution ruling added Automobile Industry and Trade Company as the person subject to enforcement and ordered Automobile Industry and Trade Company to pay the object funds of 4,170,859.54 yuan. Hua Rong District People's Court of Ezhou City held that the object Guangming Watch Company should perform is the loan principal of 1.9 million yuan and the promissory loan interest of 331,785.60 yuan from November 21, 1995 to January 22, 1997, with a total of 2,231,785.60 yuan. ShenzhenBao’an District People's Court has executed 1,641,888.10 yuan, deducting the litigation fee of 21,700 yuan and execution fee of 28,500 yuan, up to March 25, 2002, there were still object funds of 1,161,725.65 yuan and debt interest of 1,274,604.31 yuan during the delay in performance calculated by the principle of repayment of principal with interest and debt interest of 1,734,529.5 yuan caused by delay in performance from March 25, 2002 to March 30, 2009, principal and interest amounting to 4,170,859.54 yuan. Automobile Industry and Trade Company proposed an opposition to execution that Automobile Industry and Trade Company should assume the joint liability for the debts of 258,111.90 yuan and the interest to be assumed by Guangming Watch Company, and (1996) BFJZ No. 183 litigation fee of 21,700 yuan, and (1997) SBFZZ No. 220 case execution fee of 28,500 yuan.
Ezhou City Intermediate People's Court held that the surplus creditor's rights was non liquet after Shenhzen Bao'an District People'sCourt’s execution of (1996) SZFJYZZ No. 563 civil judgment, both parties had large difference in opinion whether the executed 1.64 million yuan was just principal or principal and interest, which was difficult to be determined, therefore, Ezhou City Intermediate People's Court (2015) EHRZYZ No. 00005 execution ruling was repealed and returned for re-examination.
⑤ Shenzhen Nigang industrial Corporation sued Huari Company to return the ground part 1,585.84 square meters of Parcel H403-0054(B) and the royalties from January 1, 1990 to the actual return date ,which was implemented in accordance with the government guidance rental price for the corresponding period and location, the interest rate is implemented in accordance with the loan interest ratestipulated by the People's Bank of China f or the corresponding period, annual use fees calculated from the following year in January 1st, that comes to about 476 million Yuan. Luohu Court made a civiljudgment[（ 2013） Shenzhen LuohuCourt-Min-three-Chu-zi-No.1875]at April 8, 2016: Huari Company should return ground part 1,585.84 square meters of Parcel H403-0054(B) to Shenzhen Nigang industrial Corporation within thirty days from the effective date of the judgment..Huari Company should pay the royalties to Shenzhen Nigang industrial Corporation within thirty days from the effective date of thejudgmen（t By December 31, 2015,the fee is
347,271.74 Yuan, and pay 7,268 Yuan per month till actual returning of the above property asset.Meanwhile,overruled other litigant requests from Shenzhen Nigang industrial Corporation.
Huari Company had appealed to the Shenzhen intermediate people's court, The case was first held at July13, 2016, the second session held at August 1, 2016,So far there is no verdict.
XIII. Events occurring after the balance sheet date
The Company has no major events occurring after the balance sheet date which should disclosed XIV. Other important events
1. Previous accounting errors collection
The Company had no previous accounting errors collection in Period.
2. Debt restructuring
The Company had no debt restructuring in Period.
3. Assets replacement
The Company had no non-monetary assets change in Period.
4. Segment
Financial information for reportable segment
Jan.- Jun. 2016
Auto maintenance Leasing and Offset of segment
Auto sales
Item Total and repair services
Main operating revenue
67,525,711.38 42,408,814.86 62,272,010.17 -18,285,084.22 153,921,452.19 Main operating cost
66,364,064.95 36,582,170.38 27,209,948.29 -18,285,084.22 111,871,099.40 Total assets
24,632,259.44 92,225,788.83 1,962,620,091.40 -912,148,674.84 1,167,329,464.83 Total liabilities
39,554,548.10 53,603,597.08 565,862,967.94 -388,249,541.09 270,771,572.03 Jan.- Jun. 2015
Auto maintenance Leasing and Offset of segment
Auto sales
Item Total and repair services
Main operating revenue
77,974,081.36 40,136,632.00 53,134,379.95 -16,474,897.39 154,770,195.92 Main operating cost
76,616,616.19 33,256,349.17 22,148,423.28 -16,474,897.39 115,546,491.25 Total assets
22,272,490.41 82,047,429.12 1,929,272,738.68 -889,617,845.18 1,143,974,813.03 Total liabilities
37,738,553.96 43,274,995.22 585,520,898.65 -365,718,711.43 300,815,736.40 XV. Principle notes of financial statements of parent company
1. Accounts receivable
(1) Category
Closing balance
Book balance Bad debt reserve
Types
Book Accrual
Amount Ratio(%) Amount value ratio(%) Account receivable with single significant amount and
withdrawal bad debt provision separately
Receivables with bad debt provision accrual by credit portfolio
Accounts with single significant amount and bad debts provision 484,803.08 100.00 484,803.08 100.00 accrued individually
Total 484,803.08 100.00 484,803.08 100.00 (Cont.)
Balance at year-begin
Book balance Bad debt reserve Boo Types
k Ratio Accrual ratio Amount Amount valu(%)
(%)
e Account receivable with single significant amount and withdrawal bad debt
provision separately
Receivables with bad debt provision accrual by credit portfolio
Accounts with single significant amount and bad debts provision accrued 484,803.0 100.0 484,803.0
individually 8 0 8 100.00 484,803.0 100.0 484,803.0
Total 100.00 8 0 8
2. Other accounts receivable
(1) Classification
Closing balance
Type
Book balance Bad debt reserve
Book value Amount Ratio(%) Amount
Accrual ratio(%)
Other account receivable with single 12,246,315.95 10.91 12,246,315.95 100.00
significant amount and withdrawal bad
debt provision separately
Other receivables with bad debt
98,166,411.08 87.46 1,061,063.86 1.08 97,105,347.22 provision accrual by credit portfolio
Other accounts with single significant
amount and bad debts provision 1,833,967.78 1.63 1,833,967.78 100.00
accrued individually
Total 112,246,694.81 100.00 15,141,347.59 13.49 97,105,347.22 (Cont.)
Balance at year-begin
Type
Book balance Bad debt reserve
Book value Amount Ratio(%) Amount
Accrual ratio(%)
Other account receivable with single
significant amount and withdrawal bad 12,246,315.95 11.25 12,246,315.95 100.00
debt provision separately
Other receivables with bad debt
94,805,891.38 87.07 1,061,063.86 1.12 93,744,827.52 provision accrual by credit portfolio
Other accounts with single significant
amount and bad debts provision 1,833,967.78 1.68 1,833,967.78 100.00
accrued individually
Total 108,886,175.11 100.00 15,141,347.59 13.91 93,744,827.52①Other receivable with single significant amount and withdrawal bad debt provision separately at end of period
Closing balance
Other receivable(By unit)
Accrual
Other receivable Bad debt reserve Reason
ratio(%)
Shenzhen Zhonghao (Group) Co., Ltd. 5,000,000.00 5,000,000.00 100.00 Win a lawsuit, no executable assets from adversary
Jinbeili Home Appliance Company 2,706,983.51 2,706,983.51 100.00 Not expected to collected due to long account age
Shenzhen Petroleum& Chemical (Group) Co., Unlikely to collected
1,902,686.77 1,902,686.77 100.00
Ltd.
Huatong Package Co., Ltd. Not expected to collected 1,212,373.79 1,212,373.79 100.00
due to long account age Shenzhen Xiandao New Material Co., Ltd. Not expected to collected 660,790.09 660,790.09 100.00
due to long account age Not expected to collected due toOther_VAT(trade department) 763,481.79 763,481.79 100.00
long account age
Total 12,246,315.95 12,246,315.95
②In combination, other accounts receivable whose bad debts provision was accrued by age analysis Closing balance
Age
Other receivable
Bad debt reserve Accrual ratio(%) Within 1 year 95,673,877.61
1-2 year 76,041.64 3,802.08 5.00 2-3 year 503,280.45 100,656.09 20.00 Over 3 years 1,913,211.38 956,605.69 50.00 Total 98,166,411.08 1,061,063.86 1.08 (2) Bad debt provision accrual, collected or reversed
Accrual bad debt provision 0 Yuan; collected or reversed 0 Yuan.
(3) Other receivables by nature
Nature Ending book balance Book balance at year-begin Intercourse funds receivable from internal units
92,419,295.42 92,031,334.71 Intercourse funds receivable from related units
2,818,503.03 2,771,126.39 Other 17,008,896.36 14,083,714.01 Total 112,246,694.81 108,886,175.11 (4) Top 5 other receivables at ending balance by arrears party
Ratio in total ending
Ending balance of Company Nature Ending balance Book age balance of other receivables
bad bet provision(%)
Shenzhen Zhonghao (Group) Intercourse 5,000,000.00 Over 3 years 4.45 5,000,000.00
Ratio in total ending
Ending balance of Company Nature Ending balance Book age balance of other receivables
bad bet provision(%)
Co., Ltd. funds
Jinbeili Home Appliance Intercourse
2,706,983.51 Over 3 years 2.41 2,706,983.51 funds
Company
Shenzhen Petroleum & Intercourse
1,902,686.77 Over 3 years 1.70 1,902,686.77 funds
Chemical (Group) Co., Ltd.
Intercourse
Huatong Machinery Co., Ltd.
1,212,373.79 Over 3 years 1.08 1,212,373.79 funds
Intercourse
Other_VAT(trade department)
763,481.79 Over 3 years 0.68 763,481.79 funds
Total 11,585,525.86 10.32 11,585,525.86 (5) Account receivable with government grand involved
No account receivable with government grand involved of the Company at period-end.
(6) Other account receivable derecognition due to financial assets transfer
No other account receivable derecognition due to financial assets transfer of the Company in Period.
(7) Assets and liabilities resulted by other account receivable transfer and continues involvement No assets or liabilities resulted by other account receivable transfer and continues involvement of the Company in Period.
3. Long-term equity investment
(1) Category of Long-term equity investment
Closing balance Balance at year-begin
Item
Depreciation Depreciation
Book balance Book value Book balance Book value reserves reserves
Investment
for
525,795,543.61 1,956,000.00 523,839,543.61 525,795,543.61 1,956,000.00 523,839,543.61 subsidiary
Investment
for
associates
164,450,736.47 9,787,162.32 154,663,574.15 168,170,825.88 9,787,162.32 158,383,663.56 and joint
venture
Closing balance Balance at year-begin
Item
Depreciation Depreciation
Book balance Book value Book balance Book value reserves reserves
Total 690,246,280.08 11,743,162.32 678,503,117.76 693,966,369.49 11,743,162.32 682,223,207.17 (2) Investment for subsidiary
Impairm Ending balance Decrease
The invested entity Opening balance Increased Ending balance ent of impairment d
accrual provision Shenzhen SD Tellus Real
31,152,888.87 31,152,888.87
Estate Co., Ltd
Shenzhen Tellus Real Estate
2,000,000.00 2,000,000.00
Exchange Co. Ltd
Shenzhen SD Tellus Property
5,021,970.88 5,021,970.88
Management Co., Ltd
Shenzhen Tellus New
Yongtong Automobile 57,672,885.22 57,672,885.22
Development Co. Ltd
Shenzhen Zhongtian
270,708,622.90 270,708,622.90
Industrial Co., Ltd.
Shenzhen Automobile
Industry Trading General 126,251,071.57 126,251,071.57
Company
Shenzhen SD Huari
Automobile Enterprise 19,224,692.65 19,224,692.65
Co.Limited
Shenzhen Huari TOYOTA
Automobile Sales Service 1,807,411.52 1,807,411.52
Co., Ltd.
Shenzhen New Yongtong
Automobile Inspection 10,000,000.00 10,000,000.00
Equipment Co. Ltd
Shenzhen hanli Hi-Tech
1,956,000.00 1,956,000.00 1,956,000.00 Ceramics Co.,Ltd.*
Total 525,795,543.61 525,795,543.61 1,956,000.00
Note: more details of* Shenzhen hanli Hi-Tech Ceramics Co., Ltd. can be seen in Note VIII-1―Equity ofsubsidiaries‖.
(3) Investment for associates and joint venture
+,-
Addition Other
Balance at
Capital Investment gains
Unit al comprehensive Other equity year-begin reducti recognized under
investme income change on equity
nt adjustment
I. Joint venture
Shenzhen Tellus Jimeng Investment Co., Ltd 59,799,695.73 13,852.21
Shenzhen Tellus Hang Investment Co., Ltd. 9,958,144.84 423,839.67
Subtotal
69,757,840.57 437,691.88
II. Associated enterprise
Shenzhen Xinglong Machinery Mould Co., 15,878,254.74
Ltd.
Shenzhen Tellus Auto Service Chain Co.,
Ltd.
Shenzhen Zung Fu Tellus Auto Service Co., 72,747,568.25 2,142,218.71
Ltd.
Hunan Changyang Industrial Co., Ltd.* 1,810,540.70
Shenzhen Jiecheng Electronic Co.,Ltd* 3,225,000.00
Shenzhen Xiandao New Material Co.,Ltd.* 4,751,621.62
Subtotal
98,412,985.31 2,142,218.71
Total 168,170,825.88 2,579,910.59
(Cont.)
+,-
Ending balance Cash dividend or
Invested company Impairment Closing balance
of impairment profit announced
Other provision accrual
to issued
I. Joint venture
Shenzhen Tellus Jimeng Investment Co., Ltd
59,813,547.94
+,-
Ending balance Cash dividend or
Invested company Impairment Closing balance
of impairment profit announced
Other provision accrual
to issued
Shenzhen Tellus Hang Investment Co., Ltd. 10,381,984.51
Subtotal - 70,195,532.45
II. Associated enterprise
Shenzhen Xinglong Machinery Mould Co., Ltd. 15,878,254.74
Shenzhen Tellus Auto Service Chain Co., Ltd.
Shenzhen Zung Fu Tellus Auto Service Co., Ltd.
6,300,000.00 68,589,786.96
Hunan Changyang Industrial Co., Ltd.* 1,810,540.70 1,810,540.70 Shenzhen Jiecheng Electronic Co.,Ltd* 3,225,000.00 3,225,000.00 Shenzhen Xiandao New Material Co.,Ltd.* 4,751,621.62 4,751,621.62 Subtotal 6,300,000.00 94,255,204.02 9,787,162.32 Total 6,300,000.00 164,450,736.47 9,787,162.32 4. Operating income and cost
Jan.- Jun. 2016 Jan.- Jun. 2015
Item
Income Cost Income Cost Main business 21,654,258.03 1,787,004.39 17,058,260.06 1,860,594.49 Total 21,654,258.03 1,787,004.39 17,058,260.06 1,860,594.49 5. Investment income
Item Jan.- Jun. 2016 Jan.- Jun. 2015 Income of long-term equity investment calculated based on equity
2,579,910.59 631,330.38 Investment income of financial products during the holding period 2,173,178.10 154,657.53 Total 4,753,088.69 785,987.91 XVI. Supplementary Information
1. Details of non-recurring gains and losses in Year
Item Amount Note Gains/losses from disposal of non-current asset
26,866.53
Item Amount Note Tax refund or mitigate due to examination-and-approval beyond power or without official
approval document or accident
Government subsidies included in current gains and loss (excluding those closely in accordance
with corporation business and enjoyed according to fixed amount under national united
standard)
Capital occupancy expense, collected from non-financial enterprises and recorded in current
gains and losses
Income from the exceeding part between investment cost of the Company paid for obtaining
subsidiaries, associates and joint-ventures and recognizable net assets fair value attributable to
the Company when acquiring the investment
Gains and losses from exchange of non-monetary assets
Earnings from f Gains and losses from assets under trusted investment or management
2,291,789.05 inancial product s
Various provision for impairment of assets withdrew due to act of God, such as natural disaster
Gains and losses from debt restructuring
Enterprise reorganization expense, such as expenses from staffing and integrated cost etc.
Gains and losses of the part arising from transaction in which price is not fair and exceeding fair
value
Current net gains and losses occurred from period-begin to combination day by subsidiaries
resulting from business combination under common control
Gains and losses arising from contingent proceedings irrelevant to normal operation of the
Company
Except for effective hedge business relevant to normal operation of the Company, gains and
losses arising from fair value change of tradable financial assets and tradable financial liabilities,
and investment income from disposal of tradable financial assets, tradable financial liabilities and
financial assets available for sale
Switch-back of provision of impairment of account receivable which are treated with separate
depreciation test
Gains and losses obtained from external trusted loans
Item Amount Note Gains and losses arising from change of fair value of investment real estate whose follow-up
measurement are conducted according to fair value pattern
Affect on current gains and losses after an one-time adjustment according to requirements of laws
and regulations regarding to taxation and accounting
Trust fee obtained from trust operation
Other non-operating income and expenditure except for the aforementioned ones
12,649.53
Other gains and losses items complying with definition for non-current gains and losses
Subtotal
2,331,305.11
Affect on income tax
Affect on minority equity(after tax)
33,124.49
Total
2,298,180.62
Note: as for the numbers of non-recurring gains/losses,―+‖ stands for income orearnings,‖-―stands for losses or expenses
The Company recognizes non-recurring profit or loss items according to Information Disclosure Explanatory Document Announcement No.1 for Public Listed Issuer- Non-recurring Profit or Loss(ZJHGG[2008]43).
2. REO and earnings per share
Earnings per share
Profits during report period Weighted average ROE(%)
Basic EPS Diluted EPS Net profits belong to common stock
stockholders of the Company
2.0236 0.0597 0.0597 Net profits belong to common stock
stockholders of the Company after
deducting nonrecurring gains and
1.7616 0.0520 0.0520 losses
Section XII. Documents available for Reference
The Company reserved completed integrated documents for CSRC, SZSE, relevant departments and public investor for reference, including:
1. Original accounting statement of the Company with signature and seal of the legal representative, CFO and financial manager;
2. All original documents and notifications of the Company disclosed in newspapers that designated by CSRC in report period;
3. Semi-annual report disclosed in other securities market (Summary)