SHENZHEN TELLUS HOLDING CO., LTD
SEMI-ANNUAL REPORT 2015
August 2015
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 2015 is authentic, accurate and complete.
China Securities Journal, Hong Kong Commercial Daily and Juchao Website (www.cninfo.com.cn) are the media for information disclosure appointed by the Company, all information under the name of the Company disclosed on the above said media shall prevail. Concerning the forward-looking statements with future planning involved in the Report, they do not constitute a substantial commitment for investors, and investors are advised to exercise caution of investment risks.
Content
Semi-Annual Report 2015 ............................................................................................................. 1 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 ........................................................................................................ 23 Section VI Changes in shares and particular about shareholders............................................. 35 Section VII PreferredStock……………………………………………………………………….41 Section VIII Directors, Supervisors and Senior Executives ..................................................... 42 Section IX Financial Report ....................................................................................................... 44 Section X Documents Available for Reference ........................................................................ 159
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|1 January 2015 to 30 June 2015|
|SDG|Refers to|Shenzhen SDG Co., Ltd.|
|Auto Industrial and Trading Company|Refers to|Shenzhen Auto Industry and Trade Corporation|

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|
||Lv Hang (function in an acting capacity of||
|Name||Sun Bolun|
||Secretary of the Board)||
||15/F, Zhonghe Building, Shennan Middle|15/F, Zhonghe Building, Shennan Middle|
|Contact adds.|||
||Road, Futian District, Shenzhen|Road, Futian District, Shenzhen|
|Tel.|(0755)83989335|(0755)83989339|
|Fax.|(0755)83989386|(0755)83989386|
|E-mail|ir@tellus.cn|sunbl@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 2014.
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 2014.
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 2014.
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)|158,491,781.84|228,692,541.86|-30.70%|
|Net profit attributable to shareholders of|7,650,356.02|5,521,161.43||
||||38.56%|
|the listed company(RMB)||||
|Net profit attributable to shareholders of||||
|the listed company after deducting|7,516,539.71|5,355,980.64|40.34%|
|non-recurring gains and losses(RMB)||||
|Net cash flow arising from operating|33,862,882.70|-4,185,311.96||
|activities(RMB)||||
|Basic earnings per share (RMB/Share)|0.0296|0.0251|17.93%|
|Diluted earnings per share (RMB/Share)|0.0296|0.0251|17.93%|
|Weighted average ROE|1.49%|2.98%|-1.49%|
||||Increase/decrease in this|
||End of current period|End of last period|report-end over that of last|
||||period-end (%)|
|Total assets (RMB)|1,143,974,813.03|806,324,777.80|41.88%|
|Net assets attributable to shareholder of|833,050,618.82|191,880,262.80||
||||334.15%|
|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|-20,206.16||
|write-off that accrued for impairment of assets)|||
|Gains/losses from entrusted investment or asset management|154,657.53||
|Other non-operating income and expenditure except for the|31,650.33||
|aforementioned items|||
|Less: Impact on income tax|41,525.43||
|Impact on minority shareholders’ equity (post-tax)|-9,240.04||
|Total|133,816.31|--|

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
(I)Overview of the overall operation
The first half year of 2015, the international environment has been very complicated, the global economic recovery has been slow, and the domestic economy has entered a sustainable growth track after a slowdown, but the consumer demand failed to show a growing trend and the substantial economy was still low. As for the industry environment of ourcompany’s business development, the auto sales business has been influenced by the slowdown of economic growth and decrease of consumer demands, especially the car purchase policy issued by Shenzhen government in December 2014 has brought great impact on thecompany’s auto sales business, and the auto sales revenue has significantly decreased. On the business transformation, the company has established the―Business Transformation and Development Program of Test RiteGroup‖ in 2014, which clarified thegroup’s strategic development direction of transforming to the integrated service operator in jewelry industry. Since 2015, the jewelry industry has kept the status at the end of the second half year of 2014, influenced by the changes in economic environment, the low-price running of gold, and the excess capacity, the jewelry consumption has been tending to decline, the prosperity has been descending, and the industry development has a slowdown, as a results, the rental prices at distributing centers of jewelry enterprises in Shenzhen, such as Shuibei and Buxin, have been showing a decreasing trend. At the same time, compared with the sluggish growth of traditional jewelry sales model, the jewelry network retail business has a rapid growth with the help of E-commerce platform, so the whole jewelry industry is facing the transformation and reformation. In the face of so severe external environment, under the leadership of the board of directors, the company has been adhering to take the transformation and upgrading as guiding principle and take the market-oriented reform as power, actively responding to the market changes, intensifying the promotion of thecompany’s business transformation, focusing on the planning to develop the e-commerce and financial service business of jewelry while gradually sorting out and adjusting thecompany’s existing automotive aftermarket and leasing management and property service management of resources assets, which has found a accurate entry point for the company to transform to the jewelry industry and laid a solid foundation for the company to arrange the operations, e-commerce and financial services of jewelry market. During the reporting period, the company has achieved the operating income of 158,490,000 yuan, a decrease of 70.2 million yuan and down30.70% on a year-on-year basis, which was mainly because that the subsidiary Huari ToyotaCompany’s automobile sales revenue has decreased by 81.6 million yuan and down51.14% on a year-on-year basis under the influence of the car purchase policy in Shenzhen. The renter income has increased by 8.55 million yuan, up30.38% on a year-on-year basis by re-adjusting the rental price system and raising the unit rental price reasonably.Thecompany’s operating costs were 116,940,000 yuan, down40.12% on a year-on-year basis. The costs were 30,830,000 yuan, a decrease of 2.6 million yuan and down7.78% on a year-on-year basis. The company has achieved total profits of 8.51 million yuan, an increase of 2.98 million yuan and up53.89% on a year-on-year basis. The company has gained the net profits vesting in the parent company of 7.65 million yuan, an
increase of 2.13 million yuan and up38.59% on a year-on-year basis. The net profits assigned to the shareholders of listed company after deducting the non-recurring profits and losses were 7.51 million yuan, an increase of 2.16 million yuan on a year-on-year basis. Under the influence of the unfavorable factor ,such as the car purchase policy in Shenzhen, the significant decrease in automobile sales revenue, the declining investment revenue in holding subsidiary companies,The company makes the operating costs depressed more than that in the operating income and the profits sharply increased on a year-on-year basis by enhancing the management of leasing resource assets, improving control efforts of auto operating costs, innovating management, optimizing workforce structure,reducing costs in business, boosting revenue of the raising capital and so on.
(II) The implementation of main work
1.On the major project construction
The main construction of Tellus Shuibei Jewelry Building project which is built by theCompany’s subsidiary Zhongtian Company has been completed and capped in May, 2015, the project is under construction as planned now, and it is expected to be completed by the end of 2015 and put into use in June, 2016. The main construction of Shuibei Gold Plaza project which is built by the joint venture Shenzhen Tellus Gimeng Investment Co., Ltd. has been completed and capped in November, 2014, the project is expected to be completed before the end of 2015 and put into use in the first quarter of 2016.The main construction of Xinglong Gold Jewelry Building project (the original name is Shenzhen Shuibei XinglongR&D Center Building) which is built by the joint stock company Shenzhen Xinglong Machinery Co., Ltd. has been completed and capped in November, 2014, the project is expected to be completed before the end of 2015 and put into use in the first quarter of 2016.
2. On the business transformation
(1) The jewelry market operation: during the reporting period, the company has launched a market investigation and pre-work for attracting investments, and formed the investment attraction plan on the basis of registration data of investment intention.
(2)The e-commerce business: Via the market research and analysis, the company has preliminarily positioned the e-commerce business by cooperating with the e-commerce enterprises or merging and absorbing the excellent and mature e-commerce enterprises, made use of the advantages of the e-commerce enterprises in e-commerce field and big data analysis, replied on thecompany’s properties at Shuibei jewelry accumulation area and scale advantages of jewelry professional wholesale market that shall be brought by the transformation and operation of properties, and made the virtual platform side and physical platform side to complement each other's advantages so as to create a Test Rite jewelry e-commerce platform mainly in the form of B2B e-commerce and complete thecompany’s preliminary layout at e-commerce platform.
(3)The financial service business: Via the market research and analysis, the company has preliminarily positioned the financial service business as the core based on the owned and joint venture property operations management of Tellus Jimeng Gold Jewelry Industrial Park, made use of the advantageous conditions of being the biggest owner of the industrial park, the state-owned enterprise identity and the third party service provider, established an intelligent internet new model of property management based on the management services of the whole industrial
park, carried out the strategic cooperation with the large jewelry enterprises, gradually established a big data service system for the supply chain of large jewelry enterprises, progressively developed the financial service business such as the commercial factoring, financial leasing, petty loans, mortgage, and third party payment by adopting the self-building or cooperation, created the internet financial services platform company, and built a comprehensive jewelry financial service platform for the jewelry industry chain.
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|
||158,491,781.84|228,692,541.86||Impact by the car|
|||||restrictions, revenue from|
|Operation revenue|||-30.70%|car sales by subsidiary|
|||||Huari Toyota decreased|
|||||y-o-y|
||116,939,503.91|195,298,141.59||Operating costs|
|Operation cost|||-40.12%|decreased along the|
|||||declined of car sales|
|Sales expenses|9,520,419.70|9,182,022.30|3.69%||
|Administrative expenses|16,780,916.30|15,727,273.24|6.70%||
||4,529,677.17|8,521,242.69||Bank loans are paid in|
|||||the Period, than the|
|Financial cost|||-46.84%||
|||||interest expenses|
|||||declined|
||1,200,717.31|717,262.39||Enterprise income tax|
|||||payable increased in the|
|Income tax expense|||67.40%||
|||||Period with the increased|
|||||profits|
||33,862,882.70|-4,185,311.96||the stock vehicles in the|
|Net cash flow arising|||||
|||||previous year selling by|
|from operation activities|||||
|||||subsidiary Huari Toyota|
|Net cash flow arising|-332,753,974.96|-70,203,958.22||More expenses on the|
|from investment|||373.98%|bank capital preservation|
|activities||||products in the Period|
||350,100,271.84|67,083,699.08||More fund-raised in the|
|Net cash flow arising|||||
|||||Period due to the target|
||||421.89%||
|from financing activities||||private placement, and|
|||||net expenses from the|

||||||
|-|-|-|-|-|
|||||bank fund-raise increased|
|||||y-o-y|
|Net increase of cash and|51,209,174.82|-7,304,868.03|||
|cash equivalent|||||
|||||Profit from associated|
|||||enterprise Shenzhen|
|||||Zung Fu Tellus Auto|
|Investment earnings|624,390.10|7,841,475.98|-92.04%|Service Co., Ltd. and|
|||||Shenzhen Dongfeng|
|||||Automobile Co., Ltd.|
|||||decreased|

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
In the first half year of 2015, while gradually sorting out and adjusting thecompany’s existing automotive aftermarket and leasing management and property service management of resources assets according to the business plan, the company has put forth efforts to boost the key projects, and actively promoted the transformation and upgrading of the company. On the existing business, the company has further enhanced the marketization of property rental price and improved the property management business benefits by firmly grasping the management, reducing the cost of automobile sales business, and effecting decrease the losses. On the major project construction, the project of Tellus Shuibei Jewelry Building has been going well and should be completed as planned. On the enterprise strategy transformation, the company has strictly followed―The Business Transformation Development Program of Test RiteGroup‖, kept to the established strategic direction, actively explored thegroup’s business model and operation path of three business sections which are operations, e-commerce and financial services. All tasks have been carried forward steadily as planned.
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|77,974,081.36|76,616,616.19|1.74%|-51.14%|-50.66%|-0.97%|
|Auto inspection|||||||
|and maintenance|||||||
||25,971,734.61|19,091,451.78|26.49%|13.52%|4.43%|6.40%|
|and accessories|||||||
|sales|||||||
|Rental and|||||||
||50,824,379.95|19,838,423.28|60.97%|17.77%|-1.05%|7.43%|
|service|||||||
|According to products|||||||
|Auto sales|77,974,081.36|76,616,616.19|1.74%|-51.14%|-50.66%|-0.97%|
|Auto inspection|||||||
|and maintenance|||||||
||25,971,734.61|19,091,451.78|26.49%|13.52%|4.43%|6.40%|
|and accessories|||||||
|sales|||||||
|Rental and|||||||
||50,824,379.95|19,838,423.28|60.97%|17.77%|-1.05%|7.43%|
|service|||||||
|According to region|||||||
|Shenzhen|154,770,195.92|115,546,491.25|25.34%|-31.40%|-40.32%|11.15%|

 IV. Core competitive-ness analysis
During the period, core competitive-ness of the Company remain stable without important changes. Found more in―Section IV. Reprot of the Board ofDirectors‖ in the annual reprot of 2014
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||||||||||||
|Tianan||||||||||||
||||||||Agreeme|||||
|Branch of|||Floating||2015-04-|2015-10-||||||
||N/A|No||6,000|||nt to|||151.89||
|Industrial|||proceeds||30|15||||||
||||||||determine|||||
|Bank Co.,||||||||||||
|Ltd.||||||||||||
|Shenzhen||||||||||||
|Branch of||||||||||||
|China||||||||||||
||||||||Agreeme|||||
|CITIC|||Floating||2015-04-|2015-07-||||||
||N/A|No||3,000|||nt to|||32.91||
|Bank|||proceeds||30|30||||||
||||||||determine|||||
|Corporati||||||||||||
|on||||||||||||
|Limited||||||||||||
|Shenzhen||||||||||||
|Branch of||||||||||||
||||||||Agreeme|||||
|China|||Structured||2015-04-|2015-07-||||||
||N/A|No||4,000|||nt to|||40.5||
|Everbrigh|||deposit||30|30||||||
||||||||determine|||||
|t Bank||||||||||||
|Co., LTd.||||||||||||
|Shenzhen|||Floating||2015-05-|2015-08-|Agreeme|||||
||N/A|No||4,000||||||43.88||
|Branch of|||proceeds||07|06|nt to|||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|China|||||||determine||||
|CITIC|||||||||||
|Bank|||||||||||
|Corporati|||||||||||
|on|||||||||||
|Limited|||||||||||
|Shenzhen|||||||||||
|Tianan|||||||||||
||||||||Agreeme||||
|Branch of|||Floating||2015-05-|2015-05-|||||
||N/A|No||5,000|||nt to|5,000||2.4|
|Industrial|||proceeds||07|12|||||
||||||||determine||||
|Bank Co.,|||||||||||
|Ltd.|||||||||||
|Shenzhen|||||||||||
|Tianan|||||||||||
||||||||Agreeme||||
|Branch of|||Floating||2015-05-|2015-05-|||||
||N/A|No||4,000|||nt to|3,000||5.3|
|Industrial|||proceeds||08|12|||||
||||||||determine||||
|Bank Co.,|||||||||||
|Ltd.|||||||||||
|Shuibei|||||||||||
|Jewellery|||||||||||
|Branch of|||||||Agreeme||||
||||Deposit||2015-05-|2015-07-|||||
|China|N/A|No||3,000|||nt to|2,000|2.29|3.92|
||||products||08|29|||||
|Construct|||||||determine||||
|ion Bank|||||||||||
|Co., Ltd.|||||||||||
|Shenzhen|||||||||||
|Tianan|||||||||||
||||||||Agreeme||||
|Branch of|||Floating||2015-05-|2015-10-|||||
||N/A|No||5,000|||nt to||126.58||
|Industrial|||proceeds||14|29|||||
||||||||determine||||
|Bank Co.,|||||||||||
|Ltd.|||||||||||
|Shenzhen|||||||||||
|Tianan|||||||||||
||||||||Agreeme||||
|Branch of|||Floating||2015-05-|2015-10-|||||
||N/A|No||3,000|||nt to||75.95||
|Industrial|||proceeds||14|29|||||
||||||||determine||||
|Bank Co.,|||||||||||
|Ltd.|||||||||||
|Shenzhen|||||||||||
||||||||Agreeme||||
|Gold|||||||||||
||||Floating||2015-05-|2015-06-|||||
|Jewelry|N/A|No||5,000|||nt to|5,000||21.95|
||||proceeds||20|23|||||
|Branch of|||||||determine||||
|China|||||||||||

|||||||||
|-|-|-|-|-|-|-|-|
|Minsheng||||||||
|Bank Co.,||||||||
|Ltd.||||||||
|Total|42,000|--|--|--|15,000|474|33.57|
|Capital resource|Idle fund-rasing|||||||
|Principal uncollected for overdue and||||||||
||0|||||||
|accumulated earninsg||||||||
|Lawsuit involved (if applicable)|N/A|||||||
|Disclosure date for approval from the||||||||
||2015-04-29|||||||
|Board for trust financing (if applicable)||||||||
|Disclosure date for approval from board of||||||||
|shareholders for trust financing (if||||||||
|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|31,145.54|
|Total accumulative raised capital invested|31,145.54|
|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||
|The company has completed the non-public offering of shares in March, 2015. This non-public offering has totally raised funds of||

||
|-|
|RMB 646.8 million Yuan, and the net amount of raised funds was RMB 633,520,000 Yuan after deducting the issue expenses|
|including the sponsorship fee, underwriting fee, legal fee, capital verification, information disclosure, and registration fee of initial|
|public offering, etc. In accordance with the issuance program, the net amount of raised funds after deducting the issue expenses|
|should be used for the Tellus Shuibei Jewelry Building project and supplementing the company’s circulating funds. After the|
|non-public offering of shares was fully funded, it should be saved to the placement’s special account at China Construction Bank,|
|Shenzhen Shuibei Jewelry Branch. On April 10, 2015, the company has remitted the raised funds of 260 million Yuan from the|
|company’s special account of placement to the placement’s special account of its subsidiary Shenzhen Zhongtian Industrial Co.,|
|Ltd. (hereinafter referred to as "Zhongtian Company") at China Construction Bank, Shenzhen Shuibei Jewelry Branch which was|
|used for capital increase in Zhongtian Company, and the follow-up special project was used for Tellus Shuibei Jewelry Building|
|project; the surplus raised funds were saved in the company’s special account of placement for supplementing the circulating funds.|
|On April 27, 2015, the company held the thirtieth interim meeting of the seventh board of directors which deliberated and approved|
|the motion about replacing the self-raised funds beforehand invested in fundraising project with the raise funds, and agreed the|
|company to replace the self-raised funds of 114,162,000 Yuan invested in fundraising project with the raise funds, of which 15.6|
|million Yuan was used to replace and supplement the beforehand invested self-raised funds of the company’s circulating funds and|
|98,562,000 Yuan was used to replace and supplement the beforehand invested self-raised funds of Tellus Shuibei Jewelry Building|
|project. The company’s independent director and sponsor institution have expresses their agreement on this matter. On April 28,|
|2015, the company held the twelfth meeting of the seventh board of directors which deliberated and approved the motion of how to|
|use some idle raised funds to purchase the principal-protected bank financial products, and authorized the company and the|
|subsidiary Zhongtian Company to use the idle raised funds to purchase the principal-protected bank financial products, the total|
|amount was less than 0.35 billion Yuan. Up to June 30, 2015, the company has used the raise funds of 311,455,400 Yuan, and used|
|the temporarily idle raised funds to purchase the financial products of 270 million Yuan, and the balance of placement account was|
|55,359,000 Yuan（including the issue expenses 1.98 million Yuan, interest 982,000 Yuan and financing income 335,700 Yuan）.|

 (2) Situation of committed project of raised proceeds
√ Applicable□ Not applicable
In ten thousand Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||Total||||||||
||||||Amount|Investme|||||
||||investme||||||||
||Projects|Total|||||||||
||||||of|nt|Predicted|||Project|
||||nt after||||||||
||changed|committe|||||||||
|||||Amount|accumula|program|serviceab|Profit|Reach the|feasibility|
||||adjustme||||||||
|Committed investment|or not|d|||||||||
|||||invested|ted|till the|le|realized|predicted|was|
||||nt (1)||||||||
|projects &investment|(includin|investme|||||||||
|||||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|
||partially)|capitals|||||||||
||||||d (2)|)|||||
|Investment project commitment|||||||||||
|Tellus Shuibei Jewelry|||||||||||
||No|26,000|26,000|11,995.54|11,995.54|46.14%||0||No|
|Building|||||||||||
|Liquid assets|||||||||||
|supplementation of the|No|38,680|38,680|19,150|19,150|49.51%||0||No|
|Company|||||||||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Subtotal of|||||||||||
||--|64,680|64,680|31,145.54|31,145.54|--|--|0|--|--|
|commitment projects|||||||||||
|Investment orientation for fund arising out of plan|||||||||||
|Total|--|64,680|64,680|31,145.54|31,145.54|--|--|0|--|--|
||1. Tellus Shuibei Jewelry Building project has been constructing as planned.||||||||||
||2. About the placement investment project supplementing the company’s circulating funds:||||||||||
||(1)The repayment of bank loan has been completed;||||||||||
||(2)The newly increased decoration project of Tellus Shuibei project has been proceeding as planned;||||||||||
||(3)Jewelry e-commerce business has been carrying forward as planned;||||||||||
||(4)Jewelry retail market business has been carrying forward as planned;||||||||||
||(5)Jewelry training business: This project has not yet been started. The company has started to investigate||||||||||
|Situation about not|||||||||||
||some schools in early 2015 and found there are already many jewelry training schools in Shuibei and the||||||||||
|coming up to schemed|||||||||||
||market competition is rather intense; moreover, the prosperity degree of jewelry industry has been declining||||||||||
|progress or expected|||||||||||
||so the training business requirements have sharply reduced. The return on investment shall be relatively||||||||||
|revenue and the|||||||||||
||low and the payback period shall be rather long if investing to establish the jewelry training school now,||||||||||
|reason(In specific|||||||||||
||therefore, the company has decided to cancel the investment plan to this project for the time being, and wait||||||||||
|project)|||||||||||
||until the company’s business in jewelry service industry has developed smoothly and accumulated the||||||||||
||certain resources.||||||||||
||(6)Automobile leasing business in the jewelry market: This project has not yet been started. The first main||||||||||
||reason was that Shenzhen Municipal Government announced the implementation of car purchase policy on||||||||||
||December 29, 2014 which shall adopt two methods, license-plate lottery and bidding, this policy caused the||||||||||
||company could not develop this business as planned, the second main reason was that the demands for||||||||||
||automobile leasing business in jewelry industry at Shuibei has sharply reduced so that the business||||||||||
||prospects have been affected, therefore, the company has decided to cancel the investment to this project.||||||||||
|Explanation on great|||||||||||
|changes of feasibility|Not applicable||||||||||
|of project|||||||||||
|Amount, usage and|Not applicable||||||||||
|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|||||||||||
|Regulation of|Applicable||||||||||
|implementation ways|On April 27, 2015, the company held the thirtieth interim meeting of the seventh board of directors which||||||||||

|||
|-|-|
|of investment project|deliberated 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.|
|of raised capitals||
|Temporarily|Not applicable|
|supplement for the||
|current capitals with||
|idle raised capitals||
|Temporarily|Not applicable|
|supplement for the||
|current capitals with||
|idle raised capitals||

(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|
|The Company completed the private|||
|||Found more in the ―Specific Reprot of the|
|placement in March 2015, and net amount|||
|||Fund-raised Saving for semi-annual of|
|of RMB 633.52 million are raised during|||
|||2015 and utilization conditions‖ released|
|the placement, which will contribute to the|2015-08-26||
|||on Securities Times, Hong Kong|
|Tellus Shuibei Jewerlly Building and|||
|||Commercial Daily and Juchao Website|
|supplement the current capital of the|||
|||dated 26 August 2015|
|Company|||

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|||||||
|Shenzhen|||Self-owned|RMB 58.96|279,934,72|234,296,06|9,224,944.7|1,897,379||
||Subsidiary|Commerce|||||||1,409,847.73|
|Auto|||property|million|0.91|8.50|4|.96||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Industry|||leasing,|||||||
|and Trade|||automobile|||||||
|Corporation|||and|||||||
||||accessories|||||||
||||selling|||||||
||||Automobile|||||||
|Shenzhen||||||||||
||||maintenanc|||||||
|SD Huari||Service||||||||
||||e &|US$ 5|70,923,149.|32,736,570.|16,856,842.|-686,656.||
|Automobile|Subsidiary||||||||-563,970.91|
|||industry|production|million|97|85|48|66||
|Enterprise||||||||||
||||and sales of|||||||
|Co.||||||||||
||||accessory|||||||
|Shenzhen||||||||||
|||||RMB||||||
|Zhongtian||Service|Property||382,129,96|281,937,10|2,438,145.0|1,469,812||
||Subsidiary|||267.25|||||1,102,359.28|
|Industrial||industry|leasing||0.69|7.75|3|.35||
|||||million||||||
|Co., Ltd.||||||||||
|Shenzhen||||||||||
|Huari||||||||||
|Toyota|||Automobile|RMB 2|26,557,682.|-9,430,200.|103,112,24|-930,793.||
||Subsidiary|Commerce|||||||-961,593.44|
|Automobile|||selling|million|64|50|8.20|26||
|Sales Co.||||||||||
|Ltd||||||||||
|Shenzhen||||||||||
||||Production|||||||
|New||||||||||
||||of|||||||
|Yongtong||||||||||
|||Service|inspection|RMB 19.|14,455,103.|2,140,999.1|1,863,208.6|732,320.3||
|Automobile|Subsidiary||||||||548,320.38|
|||industry|equipment|61 million|14|6|0|8||
|Inspection||||||||||
||||for auto|||||||
|Equipment||||||||||
||||vehicles|||||||
|Co. Ltd||||||||||
|Shenzhen||||||||||
||||Inspection|||||||
|Tellus New||||||||||
||||and|||||||
|Yongtong||Service||RMB 32.90|83,952,797.|45,082,227.|6,823,866.5|1,701,794||
||Subsidiary||maintenanc||||||1,471,803.46|
|Automobile||industry||million|76|99|8|.63||
||||e of auto|||||||
|Developme||||||||||
||||vehicle|||||||
|nt Co. Ltd||||||||||
|Shenzhen|||Developmet|||||||
|SD Tellus||Manufactur|n and|RMB 31.15|28,766,512.|11,723,046.||-147,748.||
||Subsidiary||||||0.00||-147,748.98|
|Real Estate||e|operation of|million|20|86||98||
|Co. Ltd|||real estate|||||||
|Shenzhen||||||||||
||||Property|||||||
|SD Tellus||Service||RMB 7.05|29,233,464.|9,709,381.5|17,536,463.|-378,742.||
||Subsidiary||managemen||||||-371,454.04|
|Property||industry||million|14|4|54|90||
||||t|||||||
|Managemen||||||||||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|t Co. Ltd||||||||||
|Shenzhen||||||||||
|Tellus Real|||Agency of|||||||
|||Service||RMB 2|2,673,778.5|2,447,277.5||-34,949.3||
|Estate|Subsidiary||real estate||||52,700.00||-34,949.38|
|||industry||million|8|9||8||
|Exchange|||exchange|||||||
|Co. Ltd||||||||||
|Shenzhen||||||||||
||||Sales of|||||||
|Zung Fu||||||||||
||Joint-stock|Service|auto and|RMB 30|331,855,66|223,133,73|334,504,85|-161,361.||
|Tellus Auto|||||||||300,028.70|
||company|industry|maintenanc|million|7.06|0.49|9.40|28||
|Service Co.,||||||||||
||||e|||||||
|Ltd.||||||||||
||||Auto|||||||
|Shenzhen||||||||||
||||manufacturi|||||||
|Dongfeng|Joint-stock|Manufactur||RMB 100|542,036,07|155,698,67|158,949,38|-2,195,90||
||||ng and||||||330,374.34|
|Auto Co.,|company|e||million|9.57|3.33|3.31|6.52||
||||maintenanc|||||||
|Ltd.||||||||||
||||e|||||||
|Shenzhen||||||||||
||||Mould|||||||
|Xinglong||||RMB||||||
||Joint-stock|Manufactur|processing||278,326,46|64,979,136.||||
|Machinery||||60.6333||||||
||company|e|and||5.96|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 2015
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 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 normal performance of the duties and obligations of its general meeting, board of directors and supervisory committee. Each of its directors and supervisors can perform their duties earnestly. The corporate governance of the Company is satisy the requirement of regulation documents with corporate governance for listed companies issued by CSRC.
During the reporting period, in order to improve the company's internal control system, the company has followed the requirements of internal control, and revised the "Articles of Association" according to the changes of thecompany’s share capital and registered capital which has been deliberated and approved by the general meeting of stockholders. The company has established―the provisional management procedures of the purchase of financialproducts‖ which has been deliberated and approved by the board of directors.
The actual situations of corporate governance have no difference with the―CorporationLaw‖ and the related provisions of China Securities Regulatory Commission.
II. Lawsuits
Significant lawsuits and arbitrations
□Applicable√Not applicable
The Company has no significant lawsuits and arbitrations in Period.
Other lawsuits
□Applicable√Not applicable
III. Question from media
□ Applicable√ Not applicable
No universal questioned by media in reporting period
IV. Bankruptcy reorganization
□ Applicable√ Not applicable
In reporting period, the Company has no bankruptcy reorganization occurred.
V. Transaction in assets
1. Assets acquisition
□ Applicable√ Not applicable
The Company did not purchased assets 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 routine operations concerned
□ Applicable√ Not applicable
The Company has no related transaction with routine operations concerned occurred in the Period
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:
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Whether has|Balance at|Current|Current||Current|Balance at|
||||non-busines|period-begin|newly added|recovery||interest|period-end|
|Related||||||||||
||Relationship|Causes|s capital|(10|(10|(10|Interest rate|(10|(10|
|party||||||||||
||||occupying|thousand|thousand|thousand||thousand|thousand|
||||or not|Yuan)|Yuan)|Yuan)||Yuan)|Yuan)|

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)|
|||Long-term|||||||
|||loans|||||||
|Shenzhen|||||||||
||Parent|( Non-curre|||||||
|SDG Co.,|||7,300|0||||7,300|
||company|nt liabilities|||||||
|Ltd.|||||||||
|||due within 1|||||||
|||year)|||||||
|Shenzhen|||||||||
||Parent|Accounts|||||||
|SDG Co.,|||5,978|270||||6,248|
||company|current|||||||
|Ltd.|||||||||
|Shenzhen|||||||||
||Parent|Short-term|||||||
|SDG Co.,|||1,892||2|||1,890|
||company|loans|||||||
|Ltd.|||||||||

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||||||||
|||||Total actual occurred external|||||
|Total approving external|||||||||
|||0||guarantee in report period||0|||
|guarantee in report period (A1)|||||||||
|||||(A2)|||||
|Total approved external||||Total actual balance of|||||
|guarantee at the end of report||0||external guarantee at the end||0|||
|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||||||||
|||||||To the expire|||
|Shenzhen Zung Fu|||||||||
|||||||date of joint|||
|Tellus Auto|2014-09-30|3,500|2007-04-17|3,500|Pledged||No|Yes|
|||||||venture|||
|Service Co., Ltd.|||||||||
|||||||contract|||
|Shenzhen|||||||||
||||||Joint liability|2014.6.24-|||
|Zhongtian|2014-05-07|30,000|2014-06-24|30,000|||No|No|
||||||guaranty|2024.6.23|||
|Industrial Co., Ltd.|||||||||
|Shenzhen|||||||||
||||||General|To 25 June|||
|Zhongtian|2014-03-17|4,140||4,140|||No|No|
||||||guarantee|2016|||
|Industrial Co., Ltd.|||||||||
|Shenzhen Auto|||||||||
||||||General||||
|Industry and Trade|2014-08-20|1,000|2014-09-16|1,000||2015-9-16|No|No|
||||||guarantee||||
|Corporation|||||||||
|||||Total amount of actual|||||
|Total amount of approving|||||||||
|||||occurred guarantee for|||||
|guarantee for subsidiaries in||0||||0|||
|||||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||38,640||||38,640|||
|||||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||||||||
|||||||Two years|||
|||||||since the|||
|||||||expired date|||
|Shenzhen Huari||||||when debtor|||
|Toyota Auto-Sales|2014-03-17|4,900|2014-06-26|4,900|Pledged|of the main|No|Yes|
|Service Co., Ltd.||||||contract|||
|||||||completed|||
|||||||debt|||
|||||||maturities|||
|Shenzhen Huari|||||||||
|Toyota Auto-Sales|2014-03-17|1,800|2014-10-13|1,800|Pledged|2015-10-13|No|Yes|
|Service Co., Ltd.|||||||||
|||||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||6,700||||6,700|||
|||||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||||0|||
|guarantee in report period||||occurred guarantee in report|||||
|(A1+B1+C1)||||period (A2+B2+C2)|||||
|Total amount of approved||||Total balance of actual|||||
|||45,340||||45,340|||
|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|||||||||
|||||54.43%|||||
|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|||||||||
|||||6,700|||||
|parties whose assets-liability ratio exceed 70% directly or|||||||||

|||
|-|-|
|indirectly(E)||
|Proportion of total amount of guarantee in net assets of the|3687.47|
|Company exceed 50%(F)||
||10387.47|
|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
|||||||
|-|-|-|-|-|-|
||||Commitment|Commitment||
|Commitments|Accepter|Contents|||Implementation|
||||time|period||
|||Commitments during the work||||
|||of Share Merger Reform of the||||
|||Company: (1) In accordance||||
|||with the Measures for the||||
|||Administration of the Share||||
|Commitments||Merger Reform of Listed||||
|for||Companies, SDG would abide||||
||SDG||2005-12-29|Long-term|Implementing|
|Share Merger||by the various laws, regulations||||
|Reform||and rules, and perform its||||
|||statutory commitment duty.||||
|||(2) Apart from the||||
|||above-mentioned statutory||||
|||commitment, SDG also made||||
|||the following special||||

||||||
|-|-|-|-|-|
||commitment: with 36 months||||
||since the day the reform plan||||
||starts to take effect, SDG||||
||would not list at Shenzhen||||
||Stock Exchange and sell the||||
||shares of Tellus it held (except||||
||for the 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.‖||||
||Commitments are as follows:|||SASAC and the Ministry of|
||(1) In order to effectively boost|||Finance have jointly issued the|
||the core management level and|||"trial implementation methods|
||business backbones for long,|||of how state-controlled listed|
||SDG would take out its shares,|||companies carry out stock|
|SDG|not exceeding 10% in total|2005-12-29|Long-term|ownership incentive", CSRC|
||number after the Share Merger|||has issued the ―stock ownership|
||Reform, and apply them to the|||incentive management methods|
||boost of the administration|||of listed companies (trial|
||level. The shares would be sold|||implementation)‖, it has found|
||to the Company’s|||that the above-mentioned|

||||
|-|-|-|
||administrative level over 3|promises made by SDG Group|
||years, with the selling price|didn’t conform to the|
||being the net asset value per|above-mentioned relevant|
||share audited during the period|provisions, so no relevant|
||nearest to the implementation.|commitment has been executed|
||Before the implementation of|yet.|
||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. (2)||
||Relevant expenses of this||
||Share Merger Reform of Tellus||
||would be paid by SDG.||
|Commitments|||
|in report of|||
|acquisition or|||
|equity change|||
|Commitments|||
|in assets|||

|||||||
|-|-|-|-|-|-|
|replacement||||||
|Commitments||||||
|make in Initial||||||
|public offering||||||
|or re-financing||||||
|||In order to avoid the horizontal||||
|||competition, the company’s||||
|||controlling shareholder,||||
|||Shenzhen SDG Co., Ltd., has||||
|||issued the ―commitment letter||||
|||about the avoidance of||||
|||horizontal competition‖ on||||
|||May 26, 2014. The full||||
|||commitment letter is as||||
||SDG|follows: 1. The Company and|2014-05-26|Long-term|Implementing|
|||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||||
|Other||||||
|||competition relationship with||||
|commitments||||||
|||Test Rite Group.||||
|for medium||||||
|||The commitments to the||||
|and small||||||
|||fulfillment of information||||
|shareholders||||||
|||disclosure about the company||||
|||business development are as||||
|||follows: except for the||||
|||information has been disclosed||||
|||publicly, the Company has not||||
|||had the disclosed information||||
||ShenZhen Tellus|about asset acquisition and||||
||||2014-10-17|Long-term|Implementing|
||Holding Co.,Ltd|business development that has||||
|||not been disclosed within one||||
|||year. In the future, the||||
|||company shall timely,||||
|||accurately and adequately||||
|||disclose the relevant||||
|||information according to the||||
|||progress of new business and||||
|||the related requirements.||||
||Shenzhen Capital|1. The commitments of the|2014-08-22|2015-3-27|Completed|

|||
|-|-|
|Fortune Investment|relevant bodies on the timely|
|Manaegment Co.,|arrival of funds of share|
|Ltd.; Shenzhen Jiahe|subscription: On August 22,|
|Investment|2014, about the subscription to|
|Managemetn|Test Rite Group’s private|
|Enterprise; Shenzhen|placement of shares, Jewelry|
|Wanban Investment|Industry Funds, SZ Capital,|
|Management Co.,|Capital Fortune, Jiahe|
|Ltd.; Shenzhen Capital|Investment, Wanbang|
|Investment Co., Ltd.;|Investment, and Test Rite|
|Shenzhen Zhiyuan|Group have respectively issued|
|Fuhai Jewlry Industry|the ―commitment letter‖, and|
|Investment Enterprise;|made commitments to the|
|ShenZhen Tellus|timely arrival of funds of share|
|Holding Co.,Ltd|subscription. The specific|
||contents of Jewelry Industry|
||Funds’ commitment letter are|
||that after this non-public|
||offering of shares being|
||approved by the China|
||Securities Regulatory|
||Commission, the subscription|
||funds of Test Rite Group’s|
||non-public offering of shares|
||have all been in place when|
||reporting the issuing scheme,|
||and have been transferred to|
||the special account which was|
||opened by the sponsor|
||institution (principal|
||underwriter) for this non-public|
||offering of shares at one time|
||in accordance with the|
||requirements of the payment|
||notice issued by Test Rite|
||Group and the sponsor|
||institution (principal|
||underwriter). The specific|
||contents of Test Rite Group’s|
||commitment letter are that after|
||this non-public offering of|
||shares being approved by the|
||China Securities Regulatory|
||Commission, the Company|

||||||
|-|-|-|-|-|
||should supervise and urge||||
||Capital Fortune (limited||||
||partnership) to put all||||
||subscription funds in place||||
||when reporting the issuing||||
||scheme, and transfer the||||
||subscription funds to the||||
||special account which was||||
||opened by the sponsor||||
||institution (principal||||
||underwriter) for this non-public||||
||offering of shares at one time||||
||in accordance with the||||
||requirements of the payment||||
||notice issued by the Company||||
||and the sponsor institution||||
||(principal underwriter).||||
||2. The commitments to no||||
||undisclosed related protocols||||
||of related bodies: On August||||
||22, 2014, Jewelry Industry||||
||Funds, Jiahe Investment, and||||
||Wanbang Investment has||||
||respectively made||||
||commitments that no other||||
||undisclosed protocols exist in||||
||Test Rite Group and its||||
||controlling shareholder SDG,||||
||the actual controller Shenzhen||||
||SASAC and the related parties||||
||except for the publicly||||
||disclosed protocols.||||
||SDG promised to continue to||||
||support the company to bring||||
||out a long-term incentive||||
||program to replace the stock||||
||ownership incentives during||||
||the stock reform and complete||||
|SDG||2014-06-26|2016-6-30|Implementing|
||the construction of long-term||||
||incentive system on the||||
||premise of conforming to the||||
||relevant laws and regulations||||
||and supervision requirements.||||
||At the appointed time, the||||

||||
|-|-|-|
|||long-term incentive program|
|||shall be implemented after|
|||being submitted to the|
|||company’s general meeting of|
|||stockholders for consideration.|
|Completed on|||
||Y||
|time(Y/N)|||

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.
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|||||
|||||Bonus|ion of|||||
||Amount|Ratio|New issue|||Other|Subtotal|Amount|Ratio|
|||||share|public|||||
||||||reserve|||||
|I. Restricted shares|14,587,056|6.62%|77,000,000||||77,000,000|91,587,056|30.81%|
|2. State-owned corporation||||||||||
||14,587,056|6.62%|6,000,000||||6,000,000|20,587,056|6.93%|
|shares||||||||||
|3. Other domestic shares|||71,000,000||||71,000,000|71,000,000|23.88%|
|Including: domestic legal||||||||||
||||71,000,000||||71,000,000|71,000,000|23.88%|
|person’s shares||||||||||
|II. Un-restricted shares|205,694,544|93.38%||||||205,694,544|69.19%|
|1. RMB ordinary shares|179,294,544|81.39%||||||179,294,544|60.31%|
|2. Domestically listed||||||||||
||26,400,000|11.98%||||||26,400,000|8.88%|
|foreign shares||||||||||
|III. Total shares|220,281,600|100.00%|77,000,000||||77,000,000|297,281,600|100.00%|

 Reasons for share changed
√ Applicable□ Not applicable
During the reporting period, the restricted shares has increased by 77 million Shares because the company issued the non-public offering of shares to two specified objectives to raise funds, respectively issued RMB ordinary shares of 6 million shares to Shenzhen Special Development Group Co., Ltd., and issued RMB ordinary shares of 71 million shares to Shenzhen Capital Fortune Jewelry Industry Investment Enterprise (limited partnership). Approval of share changed
√ Applicable□ Not applicable
On April 21, 2014, the company held the nineteenth interim meeting of the seventh board of directors which deliberated and passed the motions relevant to this offering, such as―Motion about the program of thecompany’s non-public offering ofshares‖; on June 3, 2014, the company held the fourth extraordinary general meeting in 2014 which deliberated and passed the motions relevant to this offering, such as―Motion about the program of thecompany’s non-public offering ofshares‖. On November 21, 2014, thecompany’s non-public offering of shares
has been checked and passed by the Issuance Examination Commission of China Securities Regulatory
Commission; on January 29, 2015, thecompany’s non-public offering of shares has been approved and obtained
―Reply about the approval of non-public offering of shares of Shenzhen Test Rite (Group) Co.Ltd.‖ (SFC license[2015] No. 173).
Ownership transfer of share changes
√ Applicable□ Not applicable
On March 18, 2015, the Company has submitted the relevant registration materials of the newly increased 77 million shares of share to China Securities Depository and Clearing Co., Ltd. Shenzhen Branch, the newly increased share this time has been registered to the account on the trading day (March 26, 2015) just one day before its offering day (March 27, 2015), and has been officially included in stock transfer books of listed companies.
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
The new issuing shares have registered to the account dated 26 March 2015, total share captial of the Company up to 297,281,600 shares from 220,281,600 shares. The EPS of the Period and same period of last year are calculated based on the weighted average of the total share capital, the basic EPS for first half of the Year of 2015 was RMB 0.0296, diluted EPS was RMB 0.0296, while the above mentioned are counted as RMB 0.0251 and RMB 0.0251 respectively for the same period of last year. Net assets attributable to common shareholders of the Company was RMB 2.80 while counted as RMB 0.85 for same period of last year.
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
The changes in the share capital structure of the issue are as follows:
||||||
|-|-|-|-|-|
|Type|Before the issue||After the issue||
||Amount (share)|Ratio|Amount (share)|Ratio|
|I.Restricted circulationshares|14,587,056|6.62%|91,587,056|30.81%|
|RMB ordinary shares|14,587,056|6.62%|91,587,056|30.81%|
|II.Un-restricted circulationshares|205,694,544|93.38%|205,694,544|69.19%|
|1. RMB ordinary shares|179,294,544|81.40%|179,294,544|60.31%|
|2. Domestically listedforeign shares|26,400,000|11.98%|26,400,000|8.88%|
|Total|220,281,600|100.00%|297,281,600|100.00%|

During the reporting period, thecompany’s total raise funds amount of non-public offering of shares has reached
646,800,000 Yuan, and the net amount of raise funds was 633,520,000.00 Yuan after deducting the issuance costs
of 13,280,000.00 Yuan, thecompany’s share has increased from 220,281,600 shares to 297,281,600 shares, an
increase of 77,000,000 shares and increased thecompany’s share by 77,000,000.00 Yuan, and increased the capital of the company - capital premium of 556,520,000.00 Yuan. On June 30, 2015, thecompany’s asset-liability ratio was26.30%, down48.61% compared with the asset-liability ratio at the end of 2014 which was74.91%. After the non-public offering of shares, thecompany’s asset size has increased, financial risk has reduced, and debt paying ability has greatly improved.
II. Number of shares and shares held
In Share
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||Total preference shareholders||||||
|Total common shareholders at||||||with voting rights recovered at||||||
|||13,306|||||||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||||||||||||
|||||Total||||||Number of shares||
|||||common|||Amount of|Amount of||pledged/frozen||
||||||Changes in|||||||
|Full name of|Nature of||Proportion|shareholders|||restricted|unrestricted||||
||||of shares||report|||||||
|Shareholders|shareholder|||at the end|||common|common||State of||
||||held||period||||||Amount|
|||||of report|||shares held|shares held||share||
|||||period||||||||
|SHENZHENSDG CO., LTD.|State-ownedcorporation||51.09%|151,870,560|||20,587,056|131,283,504||||
|ShenzhenCapital FortuneJewelryIndustryInvestmentEnterprise(limitedpartnership)|Domestic nonstate-ownedcorporate||23.88%|71,000,000|||71,000,000|||||
|FISRTSHANGHAISECURITIESLTD.|Foreigncorporation||0.56%|1,661,672||||1,661,672||||
|China SouthernFund – ICBC-Target clinetsassetsmanagement|Other||0.48%|1,438,642||||1,438,642||||
|ICBC Pension|Other||0.47%|1,406,830||||1,406,830||||

|||||||||
|-|-|-|-|-|-|-|-|
|plans –ABC||||||||
|GuoyuanSecuritiesBrokerage (HK)Co., Ltd.|Foreigncorporation|0.47%||1,399,432|1,399,432|||
|GUOTAIJUNANSECURITIES(HONGKONG)LIMITED|Foreigncorporation|0.45%||1,324,709|1,324,709|||
|NationalCouncil forSocial SecurityFund-411|Other|0.41%||1,233,496|1,233,496|||
|Bank of ChinaLimited –SouthIndustry ActiveStock Fund|Other|0.34%||999,961|999,961|||
|Bank of ChinaLimited-Xincheng CycleLundong StockFund (LOF)|Other|0.34%||997,866|997,866|||
|Strategy investors or general||||||||
|||Shenzhen Capital Fortune Jewelry Industry Investment Enterprise (limited partnership)holds||||||
|corporate becomes top 10||||||||
|||71,000,000 RMB ordinary shares of the Company through private placement, the shares||||||
|common shareholders due to||||||||
|||subscrib can not be trade or transfer within 36 months since the placement ended (27th March||||||
|rights issued (if applicable)(see||||||||
|||2015)||||||
|Note 3)||||||||
|||Among the top ten shareholders, there exists no associated relationship between the state-owned||||||
|Explanation on associated||legal person’s shareholders Shenzhen SDG Co., Ltd and other shareholders, and they do not||||||
|relationship among the aforesaid||belong to the consistent actionist regulated by the Management Measure of Information||||||
|shareholders||Disclosure on Change of Shareholding for Listed Companies. For the other shareholders of||||||
|||circulation share, the Company is unknown whether they belong to the consistent actionist.||||||
|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.|||131,283,504|||RMB ordinaryshares||
||||||||131,283,504|
|FISRT SHANGHAI SECURITIESLTD.|||1,661,672|||Domesticallylisted foreign||
||||||||1,661,672|

|||||
|-|-|-|-|
|||shares||
|China Southern Fund – ICBC-Target clinets assets management|1,438,642|RMB ordinary||
||||1,438,642|
|||shares||
|ICBC Pension plans –ABC|1,406,830|RMB ordinary||
||||1,406,830|
|||shares||
|Guoyuan Securities Brokerage (HK)Co., Ltd.|1,399,432|Domestically||
|||listed foreign|1,399,432|
|||shares||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|1,324,709|Domestically||
|||listed foreign|1,324,709|
|||shares||
|National Council for Social SecurityFund-411|1,233,496|RMB ordinary||
||||1,233,496|
|||shares||
|Bank of China Limited –SouthIndustry Active Stock Fund|999,961|RMB ordinary||
||||999,961|
|||shares||
|Bank of China Limited- XinchengCycle Lundong Stock Fund (LOF)|997,866|RMB ordinary||
||||997,866|
|||shares||
|Bank of China Limited- JinyingTechnology Innovation Stock Fund|971,760|RMB ordinary||
||||971,760|
|||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.|||

Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period
□ Yes√ No
The top ten common shareholders or top ten common 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 2014.
II. Resignation and dismissal of directors, supervisors and senior executives
√ Applicable□ Not applicable
||||||
|-|-|-|-|-|
|Name|Title|Type|Date|Reason|
|Lv Hang|Chairman|Be elected|2015-05-20|General election of the Board|
|Ding Hui|Director, GM|Be elected|2015-05-20|General election of the Board|
|Yang Jianping|Director, CFO|Be elected|2015-05-20|General election of the Board|
|Yu Lei|Director|Be elected|2015-05-20|General election of the Board|
|Zhang Quanxun|Director|Be elected|2015-05-20|General election of the Board|
|Chen Gengsen|Director|Be elected|2015-05-20|General election of the Board|
||Independent||||
|Ji Huibin||Be elected|2015-05-20|General election of the Board|
||Director||||
||Independent||||
|Wei Shaohui||Be elected|2015-05-20|General election of the Board|
||Director||||
||Independent||||
|Li Xiangjun||Be elected|2015-05-20|General election of the Board|
||Director||||
||Chairman of||||
|Chen Hua|Supervisory|Be elected|2015-05-20|General election of the Supervisory|
||Committee||||
|Li Miao|Supervisor|Be elected|2015-05-20|General election of the Supervisory|
|Fu Chunlong|Supervisor|Be elected|2015-05-20|General election of the Supervisory|
|Ke Wensheng|Supervisor|Be elected|2015-05-20|General election of the Supervisory|
|Li Xiaohong|Supervisor|Be elected|2015-05-20|General election of the Supervisory|
|Ren Yongjian|Deputy GM|Engagement|2015-05-20|General election of the Board|
|Feng Yu|Deputy GM|Engagement|2015-05-20|General election of the Board|
|Yao Xiongbin|Deputy GM|Engagement|2015-05-20|General election of the Board|
|Li Ming|Deputy GM|Engagement|2015-05-20|General election of the Board|
||Chairman of|Leave the post|||
|Guan Zhicai|||2015-05-20|General election of the Board|
||Supervisory|while office|||

||||||
|-|-|-|-|-|
||Committee|terms expired|||
|||Leave the post|||
|Wang Guangye|Supervisor|while office|2015-05-20|General election of the Board|
|||terms expired|||
|||Leave the post|||
|Li Miao|Director|while office|2015-05-20|General election of the Board|
|||terms expired|||
|||Leave the post|||
|Jiang Hongjun|Director|while office|2015-05-20|General election of the Board|
|||terms expired|||
|||Leave the post|||
||Independent||||
|Liu Hongling||while office|2015-05-20|General election of the Board|
||Director||||
|||terms expired|||
|Luo Bojun|Director, GM|Office leaving|2015-04-01|Due to the work change|
|Fu Bin|Director, CFO|Office leaving|2015-04-01|Due to the work change|

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
In RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|131,254,844.47|80,045,669.65|
|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|4,102,502.80|1,373,257.89|
|Accounts paid in advance|10,169,681.79|6,981,402.87|
|Insurance receivable|||
|Reinsurance receivables|||
|Contract reserve of reinsurance|||
|receivable|||
|Interest receivable|||
|Dividend receivable|||
|Other receivables|8,202,352.43|7,904,999.44|
|Purchase restituted finance asset|||
|Inventories|8,390,167.15|48,209,026.18|
|Divided into assets held for sale|||
|Non-current asset due within one|||

||||
|-|-|-|
|year|||
|Other current assets|275,145,955.22|8,968,278.77|
|Total current assets|437,265,503.86|153,482,634.80|
|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|100,000.00|100,000.00|
|Long-term account receivable|||
|Long-term equity investment|211,739,998.37|211,270,265.80|
|Investment property|84,449,111.32|85,083,745.72|
|Fixed assets|139,731,088.46|142,849,121.72|
|Construction in progress|180,350,822.65|122,551,469.97|
|Engineering material|||
|Disposal of fixed asset|||
|Productive biological asset|||
|Oil and gas asset|||
|Intangible assets|53,320,753.67|53,924,233.96|
|Expense on Research and|||
|Development|||
|Goodwill|||
|Long-term expenses to be|||
||892,758.22|905,871.01|
|apportioned|||
|Deferred income tax asset|25,645,790.71|25,678,449.05|
|Other non-current asset|||
|Total non-current asset|706,709,309.17|652,842,143.00|
|Total assets|1,143,974,813.03|806,324,777.80|
|Current liabilities:|||
|Short-term loans|20,702,909.00|74,719,672.00|
|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|21,606,693.00|22,340,922.90|
|Accounts received in advance|4,742,719.34|9,979,166.89|

||||
|-|-|-|
|Selling financial asset of|||
|repurchase|||
|Commission charge and|||
|commission payable|||
|Wage payable|14,811,315.29|17,164,185.03|
|Taxes payable|9,330,311.03|9,055,093.27|
|Interest payable|||
|Dividend payable|||
|Other accounts payable|119,927,946.68|114,533,081.65|
|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|||
||73,000,000.00|120,700,000.00|
|year|||
|Other current liabilities|||
|Total current liabilities|264,121,894.34|368,492,121.74|
|Non-current liabilities:|||
|Long-term loans||178,597,550.55|
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Long-term account payable|13,657,490.94|13,657,490.94|
|Long-term wages payable|9,783,743.11|9,953,557.75|
|Special accounts payable|||
|Projected liabilities|||
|Deferred income|||
|Deferred income tax liabilities|600,773.43|723,459.18|
|Other non-current liabilities|12,651,834.58|32,570,237.55|
|Total non-current liabilities|36,693,842.06|235,502,295.97|
|Total liabilities|300,815,736.40|603,994,417.71|
|Owner’s equity:|||
|Share capital|297,281,600.00|220,281,600.00|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||

||||
|-|-|-|
|Capital public reserve|564,192,605.51|7,672,605.51|
|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|-31,376,173.01|-39,026,529.03|
|Total owner’s equity attributable to|||
||833,050,618.82|191,880,262.80|
|parent company|||
|Minority interests|10,108,457.81|10,450,097.29|
|Total owner’s equity|843,159,076.63|202,330,360.09|
|Total liabilities and owner’s equity|1,143,974,813.03|806,324,777.80|

 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|33,500,490.83|26,441,746.73|
|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|266,250.00|106,810.00|
|Interest receivable|||
|Dividends receivable|||
|Other receivables|95,972,167.53|110,350,188.00|
|Inventories|||
|Divided into assets held for sale|||
|Non-current assets maturing within|||
|one year|||
|Other current assets|195,000,000.00|1,350,000.00|
|Total current assets|324,738,908.36|138,248,744.73|
|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|686,592,480.67|425,961,150.29|
|Investment property|54,354,654.23|54,186,250.01|
|Fixed assets|17,531,238.88|17,961,888.31|
|Construction in progress|251,308.70|251,308.70|
|Project materials|||
|Disposal of fixed assets|||
|Productive biological assets|||
|Oil and natural gas assets|||
|Intangible assets|242,680.79|274,939.25|
|Research and development costs|||
|Goodwill|||
|Long-term deferred expenses|271,845.09|346,559.91|
|Deferred income tax assets|13,966,667.34|13,986,138.44|
|Other non-current assets|||
|Total non-current assets|783,387,492.90|523,144,852.11|
|Total assets|1,108,126,401.26|661,393,596.84|
|Current liabilities:|||
|Short-term borrowings|9,544,160.00|19,544,160.00|
|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|||
|Wage payable|6,280,000.00|6,918,478.90|
|Taxes payable|604,470.42|430,065.27|
|Interest payable|||
|Dividend payable|||
|Other accounts payable|259,016,171.79|260,117,846.49|
|Divided into liability held for sale|||
|Non-current liabilities due within 1|||
||73,000,000.00|120,700,000.00|
|year|||

||||
|-|-|-|
|Other current liabilities|||
|Total current liabilities|348,444,802.21|407,710,550.66|
|Non-current liabilities:|||
|Long-term loans||132,300,000.00|
|Bonds payable|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Long-term account payable|||
|Long-term wages payable|3,265,868.41|3,343,417.98|
|Special accounts payable|||
|Projected liabilities|||
|Deferred income|||
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|3,265,868.41|135,643,417.98|
|Total liabilities|351,710,670.62|543,353,968.64|
|Owners’ equity:|||
|Share capita|297,281,600.00|220,281,600.00|
|Other equity instrument|||
|Including: preferred stock|||
|Perpetual capital|||
|securities|||
|Capital public reserve|560,999,182.23|4,479,182.23|
|Less: Inventory shares|||
|Other comprehensive income|||
|Reasonable reserve|||
|Surplus reserve|2,952,586.32|2,952,586.32|
|Retained profit|-104,817,637.91|-109,673,740.35|
|Total owner’s equity|756,415,730.64|118,039,628.20|
|Total liabilities and owner’s equity|1,108,126,401.26|661,393,596.84|

 3. Consolidated Profit Statement
In RMB
||||
|-|-|-|
|Item|Current Period|Last Period|
|I. Total operating income|158,491,781.84|228,692,541.86|
|Including: Operating income|158,491,781.84|228,692,541.86|

||||
|-|-|-|
|Interest income|||
|Insurance gained|||
|Commission charge and commission|||
|income|||
|II. Total operating cost|150,618,182.26|231,228,127.35|
|Including: Operating cost|116,939,503.91|195,298,141.59|
|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|2,847,665.18|2,463,848.35|
|Sales expenses|9,520,419.70|9,182,022.30|
|Administration expenses|16,780,916.30|15,727,273.24|
|Financial expenses|4,529,677.17|8,521,242.69|
|Losses of devaluation of asset||35,599.18|
|Add: Changing income of fair|||
|value(Loss is listed with ―-‖)|||
|Investment income (Loss is listed|||
||624,390.10|7,841,475.98|
|with ―-‖)|||
|Including: Investment income on|||
||469,732.57|7,841,475.98|
|affiliated company and joint venture|||
|Exchange income (Loss is listed|||
|with ―-‖)|||
|III. Operating profit (Loss is listed with|||
||8,497,989.68|5,305,890.49|
|―-‖)|||
|Add: Non-operating income|48,762.10|225,251.91|
|Including: Disposal gains of|||
||17,094.02|172,812.80|
|non-current asset|||
|Less: Non-operating expense|37,317.93|2,633.01|
|Including: Disposal loss of|||
||37,300.18|0.00|
|non-current asset|||
|IV. Total Profit (Loss is listed with ―-‖)|8,509,433.85|5,528,509.39|
|Less: Income tax expense|1,200,717.31|717,262.39|

||||
|-|-|-|
|V. Net profit (Net loss is listed with ―-‖)|7,308,716.54|4,811,247.00|
|Net profit attributable to owner’s of|||
||7,650,356.02|5,521,161.43|
|parent company|||
|Minority shareholders’ gains and|||
||-341,639.48|-709,914.43|
|losses|||
|VI. Net after-tax of other comprehensive|||
|||-66,261.00|
|income|||
|Net after-tax of other comprehensive|||
|income attributable to owners of parent||-66,261.00|
|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||-66,261.00|
|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||-66,261.00|
|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|7,308,716.54|4,744,986.00|
|Total comprehensive income|7,650,356.02||
|||5,454,900.43|
|attributable to owners of parent Company|||
|Total comprehensive income|-341,639.48||
|||-709,914.43|
|attributable to minority shareholders|||
|VIII. Earnings per share:|||
|(i) Basic earnings per share|0.0296|0.0251|
|(ii) Diluted earnings per share|0.0296|0.0251|

 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|17,058,260.06|9,684,900.12|
|Less: Operating cost|1,860,594.49|1,820,193.72|
|Operating tax and extras|955,262.54|542,354.41|
|Sales expenses|||
|Administration expenses|6,617,979.97|6,215,317.95|
|Financial expenses|3,534,837.43|4,923,931.67|
|Losses of devaluation of asset|||
|Add: Changing income of fairvalue(Loss is listed with ―-‖)|||
|Investment income (Loss islisted with ―-‖)|||
||785,987.91|6,741,386.38|
|Including: Investment incomeon affiliated company and joint venture|||
||631,330.38|6,741,386.38|
|II. Operating profit (Loss is listedwith ―-‖)|||
||4,875,573.54|2,924,488.75|
|Add: Non-operating income||28,512.68|
|Including: Disposal gains ofnon-current asset|||

||||
|-|-|-|
|Less: Non-operating expense|||
|Including: Disposal loss of|||
|non-current asset|||
|III. Total Profit (Loss is listed with|||
||4,875,573.54|2,953,001.43|
|―-‖)|||
|Less: Income tax expense|19,471.10|19,471.10|
|IV. Net profit (Net loss is listed with|||
||4,856,102.44|2,933,530.33|
|―-‖)|||
|V. Net after-tax of other comprehensive|||
|||-66,261.00|
|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||-66,261.00|
|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||-66,261.00|
|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|4,856,102.44|2,867,269.33|
|VII. Earnings per share:|||
|(i) Basic earnings per share|0.0188|0.0133|
|(ii) Diluted earnings per share|0.0188|0.0133|

 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|166,412,700.80|253,756,652.24|
|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|||
||21,091,520.19|25,759,770.67|
|operating activities|||
|Subtotal of cash inflow arising from|||
||187,504,220.99|279,516,422.91|
|operating activities|||

||||
|-|-|-|
|Cash paid for purchasing|||
|commodities and receiving labor|70,874,644.66|211,397,194.39|
|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|25,426,536.32|25,369,986.36|
|Taxes paid|9,842,550.96|16,810,604.28|
|Other cash paid concerning|||
||47,497,606.35|30,123,949.84|
|operating activities|||
|Subtotal of cash outflow arising from|||
||153,641,338.29|283,701,734.87|
|operating activities|||
|Net cash flows arising from operating|||
||33,862,882.70|-4,185,311.96|
|activities|||
|II. Cash flows arising from investing|||
|activities:|||
|Cash received from recovering|||
||80,000,000.00||
|investment|||
|Cash received from investment|||
||154,657.53||
|income|||
|Net cash received from disposal of|||
|fixed, intangible and other long-term|191,300.00|40,740.00|
|assets|||
|Net cash received from disposal of|||
|subsidiaries and other units|||
|Other cash received concerning|||
|investing activities|||
|Subtotal of cash inflow from investing|||
||80,345,957.53|40,740.00|
|activities|||
|Cash paid for purchasing fixed,|||
||58,099,932.49|70,244,698.22|
|intangible and other long-term assets|||
|Cash paid for investment|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|||
||413,099,932.49|70,244,698.22|
|activities|||
|Net cash flows arising from investing|||
||-332,753,974.96|-70,203,958.22|
|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|226,000,000.00|
|Cash received from issuing bonds|||
|Other cash received concerning|||
|financing activities|||
|Subtotal of cash inflow from financing|||
||660,198,215.03|226,000,000.00|
|activities|||
|Cash paid for settling debts|304,995,765.58|154,000,000.00|
|Cash paid for dividend and profit|||
||4,665,177.61|4,916,300.92|
|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|||
||310,097,943.19|158,916,300.92|
|activities|||
|Net cash flows arising from financing|||
||350,100,271.84|67,083,699.08|
|activities|||
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in|-4.76|703.07|
|exchange rate|||
|V. Net increase of cash and cash|||
||51,209,174.82|-7,304,868.03|
|equivalents|||
|Add: Balance of cash and cash|||
||80,045,669.65|63,166,448.10|
|equivalents at the period -begin|||
|VI. Balance of cash and cash|||
||131,254,844.47|55,861,580.07|
|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|18,015,142.44|10,855,355.64|
|services|||
|Write-back of tax received|||
|Other cash received concerning|||
||50,522,932.88|137,551,446.17|
|operating activities|||
|Subtotal of cash inflow arising from|||
||68,538,075.32|148,406,801.81|
|operating activities|||
|Cash paid for purchasing|||
|commodities and receiving labor|||
|service|||
|Cash paid to/for staff and workers|7,125,889.43|5,844,213.54|
|Taxes paid|1,871,082.86|1,314,378.34|
|Other cash paid concerning|||
||38,586,106.40|210,948,195.60|
|operating activities|||
|Subtotal of cash outflow arising from|||
||47,583,078.69|218,106,787.48|
|operating activities|||
|Net cash flows arising from operating|||
||20,954,996.63|-69,699,985.67|
|activities|||
|II. Cash flows arising from investing|||
|activities:|||
|Cash received from recovering|||
||80,000,000.00||
|investment|||
|Cash received from investment|||
||154,657.53||
|income|||
|Net cash received from disposal of|||
|fixed, intangible and other long-term||39,890.00|
|assets|||
|Net cash received from disposal of|||
|subsidiaries and other units|||
|Other cash received concerning|||
|investing activities|||
|Subtotal of cash inflow from investing|||
||80,154,657.53|39,890.00|
|activities|||
|Cash paid for purchasing fixed,|483,189.15|539,007.00|

||||
|-|-|-|
|intangible and other long-term assets|||
|Cash paid for investment|535,000,000.00||
|Net cash received from|||
|subsidiaries and other units|||
|Other cash paid concerning|||
|investing activities|||
|Subtotal of cash outflow from investing|||
||535,483,189.15|539,007.00|
|activities|||
|Net cash flows arising from investing|||
||-455,328,531.62|-499,117.00|
|activities|||
|III. Cash flows arising from financing|||
|activities|||
|Cash received from absorbing|||
||635,500,000.00||
|investment|||
|Cash received from loans||175,000,000.00|
|Cash received from issuing bonds|||
|Other cash received concerning|||
|financing activities|||
|Subtotal of cash inflow from financing|||
||635,500,000.00|175,000,000.00|
|activities|||
|Cash paid for settling debts|190,000,000.00|118,000,000.00|
|Cash paid for dividend and profit|||
||3,630,720.91|4,439,406.07|
|distributing or interest paying|||
|Other cash paid concerning|||
||437,000.00||
|financing activities|||
|Subtotal of cash outflow from financing|||
||194,067,720.91|122,439,406.07|
|activities|||
|Net cash flows arising from financing|||
||441,432,279.09|52,560,593.93|
|activities|||
|IV. Influence on cash and cash|||
|equivalents due to fluctuation in|||
|exchange rate|||
|V. Net increase of cash and cash|||
||7,058,744.10|-17,638,508.74|
|equivalents|||
|Add: Balance of cash and cash|||
||26,441,746.73|30,209,143.04|
|equivalents at the period -begin|||
|VI. Balance of cash and cash|||
||33,500,490.83|12,570,634.30|
|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|
|||||||||Reason||||||
||Share||||Capital|Invento|compre||Surplus|n of|Retaine|y|owners’|
||||ual|||||||||||
|||||||||able||||||
||capital|Prefer|||reserve|ry|hensive||reserve|general|d profit|interests|equity|
||||capita|||||||||||
|||||||||reserve||||||
|||red||Other||shares|income|||risk||||
||||l|||||||||||
|||stock||||||||||||
||||securi|||||||||||
||||ties|||||||||||
||220,28|||||||||||||
|I. Balance at the|||||7,672,6||||2,952,5||-39,026,|10,450,|202,330|
||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|||||||||||||
||77,000|||||||||||||
|1.Common shares|||||556,520||||||||633,520|
|invested by|,000.0|||||||||||||
||||||,000.00||||||||,000.00|
|shareholders|0|||||||||||||
|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|||||843,159,076.63|
|IV. Balance at the||564,192|2,952,5|-31,376,|10,108,||
|end of the report|1,600.||||||
|||,605.51|86.32|173.01|457.81||
|period|00||||||

Last Period
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Last Period|||||||||||||
||Owners’ equity attributable to the parent Company|||||||||||||
|||Other||||||||||||
|||equity instrument||||||||||||
|||||||||||||Minorit||
|Item|||Perpet|||Less:|Other|||Provisio||y|Total|
||Share||||||||||||owners’|
||||ual||Capital|Invento|compre|Reasonable|Surplus|n of|Retaine|interest||
||capital|Prefer|||reserve|ry|hensive||reserve|general|d profit||equity|
||||capita|||||reserve||||s||
|||red||Other||shares|income|||risk||||
||||l|||||||||||
|||stock||||||||||||
||||securi|||||||||||
||||ties|||||||||||
||220,28|||||||||||||
||||||8,508,5||||2,952,5||-49,371,|12,229,|194,600|
|I. Balance at the||||||||||||||
||1,600.|||||||||||||
|end of the last year|||||31.18||||86.32||746.70|106.80|,077.60|
||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||||||||||||||
||||||8,508,5||||2,952,5||-49,371,|12,229,|194,600|
|beginning of this|1,600.|||||||||||||
||||||31.18||||86.32||746.70|106.80|,077.60|
|year|00|||||||||||||
|III. Increase/||||||||||||||
||||||-66,261.||||||5,521,1|-709,91|4,744,9|
|Decrease in this||||||||||||||
|year (Decrease is|||||00||||||61.43|4.43|86.00|
|listed with ―-‖)||||||||||||||
|(i) Total||||||||||||||
||||||-66,261.||||||5,521,1|-709,91|4,744,9|
|comprehensive||||||||||||||
||||||00||||||61.43|4.43|86.00|
|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|||||||
||220,28||||||
|IV. Balance at the|||||||
|||8,442,2|2,952,5|-43,850,|11,519,|199,345|
|end of the report|1,600.||||||
|||70.18|86.32|585.27|192.37|,063.60|
|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|||
|||||||Inventory|||||owners’|
||||al|||||||||
||capital||||reserve||nsive|le reserve|reserve|d profit||
|||Preferre||||||||||
||||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||||||||||||
||77,000,0||||556,520,0||||||633,520,0|
|invested by||||||||||||
||00.00||||00.00||||||00.00|
|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|756,415,730.64|
|IV. Balance at the|297,281,|560,999,1|2,952,586|||
|end of the report||||7,637.9||
||600.00|82.23|.32|||
|period||||1||

 Last period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Last period|||||||||||
|||Other||||||||||
|||equity instrument||||||||||
||||||||Other||||Total|
|Item|Share||Perpetu|||Less:||||Retaine||
||||||Capital||comprehe|Reasonab|Surplus|||
|||||||Inventory|||||owners’|
||||al|||||||||
||capital||||reserve||nsive|le reserve|reserve|d profit||
|||Preferre||||||||||
||||capital|Other||shares|||||equity|
||||||||income|||||
|||d stock||||||||||
||||securiti|||||||||
||||es|||||||||
|||||||||||-109,76||
||220,281,||||5,315,107||||2,952,586||118,784,7|
|I. Balance at the||||||||||||
|||||||||||4,586.3||
|end of the last year|600.00||||.90||||.32||07.92|
|||||||||||0||
|Add: Changes||||||||||||
|of accounting||||||||||||
|policy||||||||||||
|Error||||||||||||
|correction of the||||||||||||

|||||||
|-|-|-|-|-|-|
|last period||||||
|Other||||||
|||||-109,76||
|II. Balance at the|220,281,|5,315,107|2,952,586||118,784,7|
|beginning of this||||4,586.3||
||600.00|.90|.32||07.92|
|year||||0||
|III. Increase/||||||
|||-66,261.0||2,933,5|2,867,269|
|Decrease in this||||||
|year (Decrease is||0||30.33|.33|
|listed with ―-‖)||||||
|(i) Total||-66,261.0||2,933,5|2,867,269|
|comprehensive||||||
|||0||30.33|.33|
|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||||||
|||||-106,83||
|IV. Balance at the|220,281,|5,248,846|2,952,586||121,651,9|
|end of the report||||1,055.9||
||600.00|.90|.32||77.25|
|period||||7||

Shenzhen Tellus Holding Co., Ltd.
Notes to Financial Statements in semi-annual 2015
(The unit is RMB except special explanation)
I. Company profiles
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 297,281,600
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. And the Company renamed as Shenzhen Tellus Holding Co., Ltd. dated 30 June 1994 after approval from the Shenzhen Administration for Industry and commerce.
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 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
Type Amount (Share) Ratio(%) 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 stock offer in 2015
In March 2015, the total proceeds from non-public stock offer was RMB646.8 million, and the net proceeds was RMB633.52 million after deduction of issuance expense of RMB13.28 million. 77,000,000 shares were issued through the non-public offering, the listing date of which was 27 March 2015. They were circulating shares with lock-up conditions. These shares were respectively subscribed by Tefa Group and Shenzhen Yuanzhi Fuhai Jewelry Industry Investment Company (limited partnership, hereinafter referred to as Jewelry Industry Fund) in cash, among which, Tefa Group was allocated with 6,000,000 shares with subscription amount of RMB50.4 million and Jewelry Industry Fund was allocated with 71,000,000 shares with subscription amount of RMB596.4 million.
This non-public offering has been verified by Ruihua CPA which issued the assets verification report(RFYZ[2015]48330003) on 12 March 2015.
As at 30 June 2015, the Company has in aggregate issued total share capital of 297,281,600 shares. Details are set out in note VII(29).
4. Consolidation scope of the Company in the year
Totally 14 companies included in the consolidation scope for the Year of 2015, 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 2015.
II. 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.
III. 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, 2015, and the business performance and cash flow in January to June of 2014. 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.
IV. 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.
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: the contract right to recover the cash flows of the financial asset has terminated;➁ 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; and➂ 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.
➁ 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
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.
③ Acquisition 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.
④ Disposal 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 non-current non-financial assets 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|
|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
Accounting policies changed due to the implementation of the new accounting standards.
In early 2014, the Ministry of Finance issued―Accounting Standard for Business Enterprises No. 39– Fair ValueMeasurement‖,―Accounting Standard for Business Enterprises No. 30– Presentation of FinancialStatements‖,―Accounting Standard for Business Enterprises No. 9– EmployeeBenefits‖,―Accounting Standard for Business Enterprises No. 33– Consolidated FinancialStatements‖,―Accounting Standard for Business Enterprises No. 40– JointArrangements‖,―Accounting Standard for Business Enterprises No. 2– Long-term Equity Investments (as amended in2014)‖ and―Accounting Standard for Business Enterprises No. 41– Disclosure of Interest in OtherEntities‖ in Cai Kuai[2014] No. 6, No. 7, No. 8, No. 10, No. 11, No. 14 and No. 16, requiring the above to be adopted among companies applying the Standards from 1 July 2014, and encouraging entities listed overseas to early adopt the above. Furthermore, the Ministry issued―Accounting Standard for Business Enterprises No. 37– Presentation of Financial Instruments (as amended in2014)‖ (the―Financial Instrument PresentationStandard‖) in Cai Kuai[2014] No. 23, requiring the adoption of the above standard for accounting periods starting in or after 2014.
As resolved at the fourth meeting of the Board of the tenth session held on 24 October 2014, the Company has adopted since the accounting period starting from 1 July 2014 the above seven new or revised standards save for Financial Instrument Presentation Standard. Adjustments made to the items and amounts in financial statements for the half year of 2014 when preparing the financial statement for the half year of 2015 according to transitional arrangements were set out as follows: Amount impact on relevant financial Changes of accounting policy and impacts on the
Standards statement dated 30 June 2014/ January to Company
June in 2014
Amount impact Items Increase+/decrease - Accounting Prior to implementation of Accounting Standard for Financial assets
+10,478,985.77 Standards for Business Enterprises No. 2– Long-term Equity available for sale
Business Enterprises Investments (as amended in 2014), the Company
No. 2 - Long-term recognized such equity investment where it owned
Equity no control or significant influence over the acquire
Investments(2014 and which was not quoted in active market and
Revised) whose fair value cannot be measured reliably as
long-term equity investment, and measured it at cost
method. After implementation of Accounting
Long-term equity
-10,478,985.77 Standard for Business Enterprises No. 2–
investment
Long-term Equity Investments (as amended in
2014), the aforesaid kind of equity investment shall
be accounted for as financial assets available for
sale. The Company has made corresponding
accounting treatment in respect of the above
accounting policy change retrospectively.
Accounting Deferred income tax
Prior to implementation of Accounting Standard for + 1,165,792.85 Standards for assets
Business Enterprises No. 9– Employee Benefits(as
Business Enterprises
amended in 2014), the retirement benefits were Long-term
+ 10,124,533.65 No. 9 - Employee
recorded in current profit or loss when occurred remuneration payables
Remuneration
actually. After implementation of Accounting
Minority interest -118,494.94 Standard for Business Enterprises No. 9– Employee
Retained profit -8,840,245.86 Benefits(as amended in 2014), retirement benefits
Administration
will be accounted for by reference to the accounting
-464,746.03 expenses
policies as detailed in Note IV 21. The Company has
made corresponding accounting treatment in respect Financial expenses + 292,079.35 of the above accounting policy change
Opening retained
retrospectively.
-8,980,986.48 profit
(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) Impairment provision of non-financial non-current assets
The Company takes judge on non-current assets excluding financial assets to see whether there is any sign of possible impairment at the balance sheet date. For those intangible assets not sure on the service life, when there is any indication of impairment, are to be tested for impairment, too, except for impairment testing performed each year. Other financial assets outside the non-current assets, when there are signs that its carrying amount is not recoverable, tested for impairment is needed.
The book value of the asset or asset group is higher than that of the recoverable amount, namely fair value minus the higher net amount between the disposal expenses and the future cash flows, which show that impairment happened.
The net amount of fair value minus the disposal expenses is confirmed by referring to sales agreement price of assets of similar bargain or observable market price, then minus the incremental costs directly attributable to the disposal of assets. When prospecting current value of future cash flows, we need make critical judgments for the asset (or asset group) yield, price, related operating costs and discount rate when calculating the present value. The group shall make use of relevant materials to estimate recoverable amount, including the predictions about the production, price and related operating costs 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)Retirement benefits
Expenses and expenditures regarding to retirement benefits are determined based on various assumptions including discount rate, average medical care expense growth rate, growth rate of retirement subsidy and other factors. Difference between actual results and assumption will be recognised immediately upon occurrence and recorded in expense for the year. Although management believes that reasonable assumption has been adopted, actual results and change of assumption conditions would affect balance of expenses and liabilities regarding to retirement benefits.
(9) 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.
V. Taxation
Main tax and tax rate
Type Tax rate
Output tax calculated based on17% of the taxable income, calculated and paid VAT
the VAT on the difference after deducted deductible current input tax
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
* Note: The Company and subsidiaries exercise rate of25% in 2015, except Shenzhen New Yongtong Dongxiao Vehicle Inspection Co., Ltd., which has taxed on levy rate.
VI. 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 31st December 2014 while period-end refers to 30th June 2015.
1. Monetary fund
Item Closing balance Balance at year-begin Stock cash 131,222.54 84,813.57 Bank deposits: 131,123,621.93 79,960,856.08 Other monetary capital -- -- Total 131,254,844.47 80,045,669.65 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
significant amount and withdrawal bad 22,512,414.52 43.25 22,512,414.52 100.00 -- - debt provision separately
Receivables with bad debt provision
4,866,303.50 9.35 763,800.70 15.70 4,102,502.80 accrual by credit portfolio
Accounts with single significant amount
and bad debts provision accrued 24,674,068.64 47.40 24,674,068.64 100.00 -- individually
Total 52,052,786.66 100.00 47,950,283.86 92.12 4,102,502.80 (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 45.65 22,512,414.52 100.00 -- - debt provision separately
Receivables with bad debt provision
2,137,058.59 4.33 763,800.70 35.74 1,373,257.89 accrual by credit portfolio
Balance at year-begin
Types
Book balance Bad debt reserve
Book value Amount Ratio(%) Amount Accrual ratio(%)
Accounts with single significant amount
and bad debts provision accrued 24,674,068.64 50.02 24,674,068.64 100.00 -- individually
Total 49,323,541.75 100.00 47,950,283.86 97.22 1,373,257.89①Account 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 H as greater uncertainty in Ltd. collection
Guangdong Zhanjiang Sanxing Auto Not expected to collected due to 4,060,329.44 4,060,329.44 100.00
Service Co., Ltd. long account age
Wang Changlong Not expected to collected due to 2,380,760.40 2,380,760.40 100.00
long account age
Huizhou Jiandacheng Daoqiao
2,021,657.70 2,021,657.70 100.00 Unlikely to collected
Engineering Company
Jiangling Automobile Factory Not expected to collected due to 1,191,059.98 1,191,059.98 100.00
long account age
Yangjiang Auto Trade Co., Ltd. Not expected to collected due to 1,150,000.00 1,150,000.00 100.00
long account age
Guangdong Materials Group Corp. 1,862,000.00 1,862,000.00 100.00 N ot 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 3,258,301.50 -- -- 1-2 years -- -- -- 2-3 years 134,001.00 26,800.20 20.00
Closing balance
Age
Account receivable Bad debt reserve Accrual ratio(%) Over 3 years 1,474,001.00 737,000.50 50.00 Total 4,866,303.50 763,800.70 15.70 (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 18.92 Guangdong Zhanjiang Sanxing Auto Service Co., Ltd. Non-related party 4,060,329.44 Over 3 years 7.80 Wang Changlong Non-related party 2,380,760.40 Over 3 years 4.57 Huizhou Jiandacheng Daoqiao Engineering Company Non-related party 2,021,657.70 Over 3 years 3.88 Guangdong Materials Group Corp. Non-related party 1,862,000.00 Over 3 years 3.58 Total 20,171,354.54 38.75 (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
9,398,652.43 92.42 6,384,573.51 91.45 1-2 years
761,065.42 7.48 586,865.42 8.41 2-3 years
-- -- -- -- Over 3 years 9,963.94 0.10 9,963.94 0.14 Total 10,169,681.79 100.00 6,981,402.87 100.00 (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 9,852,428.22 Yuan, takes 96.88 percent of the total advance payment at year-end.
4. 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 39,166,619.18 63.69 39,166,619.18 100.00 -- debt provision separately
Other receivables with bad debt
11,651,823.44 18.95 3,449,471.01 29.60 8,202,352.43 provision accrual by credit portfolio
Other accounts with single significant
amount and bad debts provision accrued 10,675,308.95 17.36 10,675,308.95 100.00 -- individually
Total 61,493,751.57 100.00 53,291,399.14 86.66 8,202,352.43 (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 39,166,619.18 64.00 39,166,619.18 100.00 -- debt provision separately
Other receivables with bad debt
11,354,470.45 18.55 3,449,471.01 30.38 7,904,999.44 provision accrual by credit portfolio
Other accounts with single significant
amount and bad debts provision accrued 10,675,308.95 17.45 10,675,308.95 100.00 -- individually
Total 61,196,398.58 100.00 53,291,399.14 87.08 7,904,999.44①Other receivable with single significant amount and withdrawal bad debt provision separately at end of period
Account receivable(units)
Closing balance
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
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 1,889,129.04 1,889,129.04 100.00 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 39,166,619.18 39,166,619.18 100.00
②In combination, other accounts receivable whose bad debts provision was accrued by age analysis
Age
Closing balance
Other accounts receivable
Bad debt reserve Accrual ratio(%) Within 1 year 3,777,028.86 -- -- 1-2 years 724,510.45 36,225.52 5.00 2-3 years 539,654.51 107,930.69 20.00 Over 3 years 6,610,629.62 3,305,314.80 50.00 Total 11,651,823.44 3,449,471.01 29.60 (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 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
15.99 9,832,956.37 funds
Sales Company years
South Industry& TRADE Intercourse 7,359,060.75 Over 3
11.97 7,359,060.75 funds
Shenzhen Industrial Company years
Shenzhen Zhonghao (Group) Intercourse Over 3
5,000,000.00 8.13 5,000,000.00 funds
Co., Ltd. years
Shenzhen Kaifeng Special Intercourse Over 3
4,413,728.50 7.18 2,206,864.25 funds
Vehicles Industry Co., Ltd. years
Jinbeili Home Appliance Intercourse Over 3
2,706,983.51 4.40 2,706,983.51 funds
Company years
Total 29,312,729.13 47.67 27,105,864.88 (4) Classification of other receivables by nature
Nature
Closing balance Balance at year-begin Intercourse accounts of related units
4,851,396.97 4,803,420.77 receivable
Other intercourse 56,642,354.6 56,392,977.81 Total 61,493,751.57 61,196,398.58 5. Inventory
(1) Inventory classification
Closing balance
Item Depreciation
Book balance Book value
reserve
Raw materials 15,132,475.32 14,771,812.17 360,663.15 Low value consumable 3,792.99 -- 3,792.99 Stock products 21,944,055.13 13,918,344.12 8,025,711.01 Total 37,080,323.44 28,690,156.29 8,390,167.15 (Cont.)
Balance at year-begin
Item Depreciation
Book balance Book value
reserve
Raw materials 14,887,672.70 14,771,812.17 115,860.53 Low value consumable 4,053.49 -- 4,053.49 Stock products 62,007,456.28 13,918,344.12 48,089,112.16 Total 76,899,182.47 28,690,156.29 48,209,026.18 (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 13,918,344.12 -- -- -- 13,918,344.12 Total 28,690,156.29 -- -- -- 28,690,156.29 (3) Accural basis for inventory depreciation reserve and reason of switch back or write-off in the year
Reason s of write-o ff for Accrual basis for inventory impairment Reasons of switch-back for inventroy falling price inventr Item
provision
reserves oy falling price reserve s Stock Its net realisable value is lower than cost of The inventory with depreciation reserves accrual
-- products inventory have been sell
6. Other current assets
Item Closing balance Balance at year-begin Input tax ready for deducted 145,955.22 7,618,278.77 Non-pubic issue expense -- 1,350,000.00 Bank financial products 275,000,000.00 -- Total 275,145,955.22 8,968,278.77 7. 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
Balance at sed in ased Balance at sed in ased invested entity Closing balance Closing balance (%) year-begin the in the year-begin 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 100000 shares 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
Shenzhen New Yongtong Dongxiao Auto Service --
-- -- -- --
-- -- -- 18.00 Co., Ltd.
-- -- -- --
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
available for sale
liabilities
Total 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 8. 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 120,000.00 20,000.00 100,000.00 120,000.00 20,000.00 100,000.00 Total 120,000.00 20,000.00 100,000.00 120,000.00 20,000.00 100,000.00 9. 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 2,179,203.68 2,179,203.68 - 2,179,203.68 2,179,203.68 -
investment of 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.
10. 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 59,717,642.94 -- -- 124,700.30 -- -- Shenzhen Tellus Hang Investment Co., Ltd. 9,313,071.40 -- -- 401,620.03 -- -- Subtotal
69,030,714.34 -- -- 526,320.33 -- -- 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.,
-- -- 105,010.05 -- -- Ltd. 77,212,637.60
Shenzhen Auto IndustryImp& Exp Co., Ltd. 8,273,939.33 -- -- -84,832.32 -- -- Shenzhen Dongfeng Auto Co., Ltd. 40,183,926.36 -- -- -15,600.76 -- -- Shenzhen New Yongtong Technology Co.,
-- -- 2,009.21 -- -- Ltd. 522,733.17
Shenzhen New Yongtong Oil Pump
-- -- -- -- -- Environment Protection Co., Ltd. 127,836.59
Shenzhen New Yongtong Consultant Co.,
-- -- -- -- -- Ltd. 41,556.83
Shenzhen New Yongtong Auto Service Co.,
-- -- -63,173.94 -- -- Ltd. 126,503.43
Shenzhen Xinyongtong Dongxiao Auto
-- -- -- -- -- -- Parts Sales Co., LTd.
Shenzhen Yongtong Xinda Inspection
-- -- -- -- -- -- Equipment 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
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.,Ltd.*
-- -- -- -- --① 4,751,621.62
China Auto Industrial Shenzhen Trading
-- -- -- -- --Company*① 400,000.00
Shenzhen General Standard Co.,Ltd.*① 500,000.00 -- -- -- -- -- Shenzhen Huoju Spark Plug Industry Co.,
-- -- -- -- -- Ltd. 17,849.20
Zhongqi South China Auto SalesCompany*
-- -- -- -- --① 2,250,000.00
Shenzhen Bailiyuan Power Supply Co.,Ltd*
-- -- -- -- --① 1,320,000.00
Shenzhen Yimin Auto Tranding Co.,Ltd.*
-- -- -- -- --① 200,001.10
Subtotal 156,842,400.67 -- -- -56,587.76 -- -- III. Other equity investment
Shenzhen hanli Hi-Tech Ceramics Co.,
-- -- -- -- --Ltd.*② 1,956,000.00
South Auto MaintenanceCenter*② 6,700,000.00 -- -- -- -- -- Subtotal 8,656,000.00 -- -- -- -- -- Total 234,529,115.01 -- -- 469,732.57 -- -- (Cont.)
+,-
Depreciation The invested entity Cash dividend or
Impairmen Ot Closing balance reservesClosing profit announced
t accrual
to issued her balance I. Joint venture
Shenzhen Tellus Jimeng Investment Co., Ltd -- -- -- 59,842,343.24 -- Shenzhen Tellus Hang Investment Co., Ltd. -- -- -- 9,714,691.43 -- Subtotal
-- -- -- 69,557,034.67 -- 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. -- -- -- 77,317,647.65 -- Shenzhen Auto IndustryImp& Exp Co., Ltd. -- -- -- 8,189,107.01 -- Shenzhen Dongfeng Auto Co., Ltd. -- -- -- 40,168,325.60 -- Shenzhen New Yongtong Technology Co., Ltd. -- -- -- 524,742.38 -- Shenzhen New Yongtong Oil Pump Environment
Protection Co., Ltd. -- -- -- 127,836.59 127,836.59 Shenzhen New Yongtong Consultant Co., Ltd. -- -- -- 41,556.83 -- Shenzhen New Yongtong Auto Service Co., Ltd. -- -- -- 63,329.49 -- 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 -- -- -- 156,785,812.91 14,602,849.21
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 -- -- -- 234,998,847.58 23,258,849.21 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‖.
11. Investment real estate
(1) Investment real estate measured at cost
House and Land use Construction in
Item building right process Total I. original book value
159,169,717. 1.Balance at year-begin 159,169,717.60 -- --
60 2.Increase in the current period 1,700,938.91 -- -- 1,700,938.91 (1)pay the land price 1,700,938.91 -- -- 1,700,938.91 3.Decrease in the current period -- -- -- -- (1) disposal
-- -- -- -- 160,870,656. 4.Closing balance 160,870,656.51 -- --
51 II. Accumulated depreciation and accumulated
amortization
74,085,971.8 1.Balance at year-begin 74,085,971.88 -- --
8 2.Increase in the current period 2,335,573.31 -- -- 2,335,573.31 (1) accrual or amortization
2,335,573.31 -- -- 2,335,573.31 3.Decrease in the current period -- -- -- -- (1) disposal -- -- -- -- 76,421,545.1 4.Closing balance 76,421,545.19 -- --
9 III.Depreciation reserves
House and Land use Construction in
Item building right process Total 1.Balance at year-begin -- -- -- -- 2.Increase in the current period -- -- -- -- (1) accrual -- -- -- -- 3.Decrease in the current period -- -- -- -- (1) disposal -- -- -- -- 4.Closing balance -- -- -- -- IV. Book value
84,449,111.3 1. Ending Book value
84,449,111.32 -- --
2 85,083,745.7 2. Book value at year-begin
85,083,745.72 -- --
2 (2) The Company had no investment real estate with restriction in ownership end as 30 June 2015.
12. 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 20,203,188.64 6,232,481.81 11,566,041.28 4,179,271.23 3,056,469.95 316,820,182.51 2.Increase in the current period -- 757,500.00 342,177.31 200,654.50 35,143.51 -- 1,335,475.32 (1) Purchase -- 757,500.00 342,177.31 200,654.50 35,143.51 -- 1,335,475.32 3.Decrease in the current period -- 2,650,961.30 406,483.22 -- -- -- 3,057,444.52 (1) disposal or scrapping
-- 2,650,961.30 406,483.22 -- -- -- 3,057,444.524、Closing balance 271,582,729.60 18,309,727.34 6,168,175.90 11,766,695.78 4,214,414.74 3,056,469.95 315,098,213.31 II. Accumulated depreciation
1.Balance at year-begin 132,881,916.51 15,965,798.06 4,147,352.29 8,917,145.97 3,716,774.85 2,765,531.04 168,394,518.72 2.Increase in the current period 3,582,119.56 116,977.04 240,107.70 263,908.30 44,841.99 280.02 4,248,234.61 (1) accrual 3,582,119.56 116,977.04 240,107.70 263,908.30 44,841.99 280.02 4,248,234.61 3.Decrease in the current period -- 2,557,260.14 201,209.25 -- -- -- 2,758,469.39 (1) disposal or scrapping -- 2,557,260.14 201,209.25 -- -- -- 2,758,469.39 4.Closing balance 136,464,036.07 13,525,514.96 4,186,250.74 9,181,054.27 3,761,616.84 2,765,811.06 169,884,283.94 III. Depreciation reserves
Machinery Transportation Office and other Renovation costs of
Housing buildings Electronic equipment
Item equipment equipment Total equipmetn self-owned housing
1.Balance at year-begin 3,555,385.70 1,646,060.95 6,165.00 17,984.71 69,562.98 281,382.73 5,576,542.07 2.Increase in the current period -- -- -- -- -- -- -- (1) accrual -- -- -- -- -- -- -- 3.Decrease in the current period -- 93,701.16 -- -- -- -- 93,701.16 (1) disposal or scrapping -- 93,701.16 -- -- -- -- 93,701.164、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
131,563,307.83 3,231,852.59 1,975,760.16 2,567,656.80 383,234.92 9,276.16 139,731,088.46 2. Book value at year-begin
135,145,427.39 2,591,329.63 2,078,964.52 2,630,910.60 392,933.40 9,556.18 142,849,121.72 Note: Depreciation in this period amounting to RMB 4,248,234.6. 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 2015.
(3) Certificate of title un-completed
Item Book value
Reasons
1,152,119.70 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) 57,804.74 A failure to carry out the property certificate is caused by issues rooted in history
Tellus Building underground parking 11,815,317.74 Parking lot is un-able to carried out the
certificate
Tellus Building transformation layer 2,154,155.12 Un-able to carried out the certificate
Trade department warehouse 111,449.17 A failure to carry out the property certificate is caused by issues rooted in history
Warehouse 1,081,530.73 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 4,930,270.96 A failure to carry out the property certificate is caused by issues rooted in history
47,823,254.66 A failure to carry out the property certificate Yongtong Building is caused by issues rooted in history
16# Taohua Garden 2,048,730.60 A failure to carry out the property certificate is caused by issues rooted in history
Automotive building 20,699,397.79 A failure to carry out the property certificate is caused by issues rooted in history
First floor ofBao’an commercial-residence 1,260,089.49 A failure to carry out the property certificate build is caused by issues rooted in history
5,912,369.07 A failure to carry out the property certificate Nuclear Office build is caused by issues rooted in history
Total 99,052,392.18
(4) Fixed assets with restriction in ownership
The Company had no fixed assets with restriction in ownership end as 30 June 2015.
13. 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 180,350,822.65 -- 180,350,822.65 122,551,469.97 -- 122,551,469.97 Building
Total 180,350,822.65 -- 180,350,822.65 122,551,469.97 -- 122,551,469.97 (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 413,640,0 180,350,822.65 Building 00 122,551,469.97 57,799,352.68 -- --
Total 122,551,469.97 57,799,352.68 -- -- 180,350,822.65 (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 43.60% -- 15,598,288.15 4,593,142.26 4.94%
Self-raised Building
Total 15,598,288.15 4,593,142.26
(3) Accrual of depreciation reserves of construction in process in the Year
Up to 30 June 2015, the construction in process of the Company has no impairment evidence
14. Intangible assets
(1) Particular about intangible assets
Item
Land use right
Trademark right Software Total
Item
Land use right
Trademark right Software Total I. original book value
1.Balance at year-begin 54,284,923.80 95,800.00 659,685.00 55,040,408.80 2.Increase in the current period -- -- -- -- (1) Purchase -- -- -- -- 3.Decrease in the current period -- -- -- -- (1) disposal -- -- -- --4、Closing balance 54,284,923.80 95,800.00 659,685.00 55,040,408.80 II. accumulated amortization
1.Balance at year-begin 743,629.09 49,764.95 322,780.80 1,116,174.84 2.Increase in the current period 557,721.83 4,789.98 40,968.48 603,480.29 (1) accrual 557,721.83 4,789.98 40,968.48 603,480.29 3.Decrease in the current period -- -- -- -- (1) disposal -- -- -- -- 4.Closing balance 1,301,350.92 54,554.93 363,749.28 1,719,655.13 III. Depreciation reserves
1. Balance at year-begin -- -- -- -- 2. Increase in the current period -- -- -- -- (1) accrual -- -- -- -- 3. Decrease in the current period -- -- -- -- (1) disposal -- -- -- -- 4. Closing balance -- -- -- -- IV. Book value
1. Ending Book value
52,983,572.88 41,245.07 295,935.72 53,320,753.67 2. Book value at year-begin
53,541,294.71 46,035.05 336,904.20 53,924,233.96 Note: The amount amortized in this year accounting as RMB 603,480.29.
(2) up to 30 June 2015, the Company has no intangible assets restricte in aspct of ownership or use of rights caused by guarantee or other reasons
(3)Up to 30 June 2015, the Company has no intangible assets with un-confirmed service life
15. Long-term deferred expense
Balance at Increase in the Amortization during
Item
Other decrease
Closing amount this year
year-begin current period
Decoration charge 594,606.54 157,321.67 97,545.26 -- 654,382.95 Insurance charge for
pledge from the bank and
311,264.47 -- 72,889.20 -- 238,375.27 commitment charge for
loan limit
Total 905,871.01 157,321.67 170,434.46 -- 892,758.22 16. 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 78,585,491.56 19,646,372.90 78,585,491.56 19,646,372.90 Equity investment difference 14,844,139.31 3,711,034.83 14,844,139.31 3,711,034.83 Employee compensation(defined
4,545,505.22 1,136,376.30 4,598,254.14 1,149,563.54 benefit plans)
Un-realized transaction profit with
4,608,026.72 1,152,006.68 4,685,911.12 1,171,477.78 affiliated companies
Total 102,583,162.81 25,645,790.71 102,713,796.13 25,678,449.05 (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 2,403,093.60 600,773.43 2,893,836.72 723,459.18 Total 2,403,093.60 600,773.43 2,893,836.72 723,459.18 (3)Details of unrecognized deferred income tax assets
Item Closing balance Balance at year-begin Offset-able differences
22,626,248.64 22,631,660.03 Offset-able losses
11,507,776.67 15,101,430.98
Item Closing balance Balance at year-begin Total 34,134,025.31 37,733,091.01 (4) Offset-able losses of the unrecognized deferred income tax assets will expire the following year
Year Closing balance Balance at year-begin Note
2015 -- 8,294,521.87
2016 6,106,031.92 6,106,031.92
2017 8,304,549.12 8,117,981.88
2018 15,518,214.36 15,579,607.94
2019 14,510,021.35 22,307,580.30
2020 1,592,289.94 --
Total 46,031,106.69 60,405,723.91
17. Details of asset Impairment Provision
Decreased in the
Amount at Provision in the year Closing Item
year-begin year
Written Transferre
amount back d
103,420,886.68 -- -- --
I. bad debt provision
103,420,886.68 II. Held-to-maturity investment 20,000.00 -- -- -- 20,000.00 impairment provision
III. Inventory impairment provision 28,690,156.29 -- -- -- 28,690,156.29 IV. Long-term equity investment impairment 23,258,849.21 -- -- -- 23,258,849.21 provision
V. Fixed assets impairment provision 5,576,542.07 -- -- 93,701.16 5,482,840.91 VI. Financial assets depreciation reserves available for 8,126,240.00 -- -- -- 8,126,240.00 sale
Total 169,092,674.25 -- -- 93,701.16 168,998,973.09 18. Short-term loans
(1) Type of Short-term Loans
Item Closing balance Balance at year-begin
Item Closing balance Balance at year-begin Collateral loan -- 44,000,000.00 Guarantee loans -- 10,000,000.00 Credit loans 20,702,909.00 20,719,672.00 Total 20,702,909.00 74,719,672.00 The guarantee loans in the Period including 18,902,909.00 Yuan borrowings from parent company Shenzhen SDG Co., Ltd., payment term was not specified.
(2) There are no overdue loans in this report period.
19. Account payables
(1) Account payables
Item Closing balance Balance at year-begin Account payables 21,606,693.00 22,340,922.90 Total 21,606,693.00 22,340,922.90 (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
20. Account received in advance
(1) Account received in advance
Item Closing balance Balance at year-begin within 1 year
4,006,520.04 9,242,967.59 1-2 years
-- 34,657.64 2-3 years
34,657.64 -- Over 3 years 701,541.66 701,541.66 Total 4,742,719.34 9,979,166.89 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.
21. Wages payable
(1) Wages payable
Balance at Decreased in the
Item Increased in the year Closing balance year-begin year
I. Short-term compensation 16,624,460.11 23,949,049.31 27,021,512.94 13,551,996.48 II. Post-employment welfare- defined 539,724.92 2,340,696.57 2,389,954.68 490,466.81 contribution plans
III. Compensation from labor -- 768,852.00 -- 768,852.00 relationship dismissed
IV. Other welfare due within one year -- -- -- -- Total 17,164,185.03 27,058,597.88 29,411,467.62 14,811,315.29 (2) Short-term compensation
Decreased in
Item Balance at year-begin Increased in the year Closing balance the year
1. Wages , bonuses, allowances and
14,178,624.98 19,492,661.13 22,410,768.97 11,260,517.14 subsidies
2. Welfare for workers and staff -- 1,071,020.20 1,071,020.20 -- 3. Social insurance 10,384.19 1,228,081.64 1,230,429.85 8,035.98 Including: Medical
9,312.71 1,046,641.66 1,048,989.87 6,964.50 insurance
Work injury
476.16 42,924.04 42,924.04 476.16 insurance
Maternity
595.32 138,515.94 138,515.94 595.32 insurance
4. Housing accumulation fund 2,154,037.42 1,390,390.45 1,465,722.23 2,078,705.64 5. Labor union expenditure and
281,413.52 766,895.89 843,571.69 204,737.72 personnel education expense
6. Short-term compensated
absences -- -- -- -- 7. Short-term profit sharing
plan -- -- -- -- 8. Other -- -- -- -- Total 16,624,460.11 23,949,049.31 27,021,512.94 13,551,996.48 (3) Defined contribution plans
Decreased in
Item Balance at year-begin Increased in the year Closing balance the year
Decreased in
Item Balance at year-begin Increased in the year Closing balance the year
1. Basic endowment insurance
136,412.87 1,911,628.86 1,909,533.99 138,507.74 2. Unemployment insurance
1,055.26 78,764.86 78,785.65 1,034.47 3. Enterprise annuity
402,256.79 350,302.85 401,635.04 350,924.60 Total 539,724.92 2,340,696.57 2,389,954.68 490,466.81 22. Tax payable
Item Closing balance Balance at year-begin Value-added tax
188,027.88 243,780.42 Business tax
942,436.07 835,558.77 Enterprise income tax
1,187,740.52 1,259,693.58 Individual income tax
365,756.24 79,246.30 Urban maintenance and construction tax
106,564.64 106,786.05 Property right tax
864,954.69 858,788.79 land VAT
5,362,442.05 5,362,442.05 Land use tax 185,256.12 172,536.12 Educational surtax
118,715.28 118,873.26 Other 8,417.54 17,387.93 Total 9,330,311.03 9,055,093.27 23. Other payable
(1) Classification of other payable according to nature of account
Item Closing balance Balance at year-begin Relevance contact, borrowings and interests 67,903,902.16 65,230,936.82 Deposit and margin 18,142,947.06 16,165,861.14 Other 33,881,097.46 33,136,283.69 Total 119,927,946.68 114,533,081.65 (2) Significant other payable with over one year age
Item Closing balance
Reasons of un-paid or carry-over
Shenzhen SDG Co., Ltd. 62,477,486.22 Term of repayment has not been regulated by parent company Total 62,477,486.22
24. Non-current liability due within one year
Item Closing balance Balance at year-begin Long-term loans due within one year (Note VI. 25) 73,000,000.00 120,700,000.00 Total 73,000,000.00 120,700,000.00 25. Long-term loan
Item Closing balance Balance at year-begin Collateral loan -- 226,297,550.55 Loan in credit 73,000,000.00 73,000,000.00 Less: long-term loans due within one year 73,000,000.00 120,700,000.00 (Note VI. 24)
Total -- 178,597,550.55 Credit borrowing refers to the borrowing of RMB73 million from Tefa Group according to the borrowing agreement entered into by the Company and its parent company Tefa Group on 24 December 2012. The borrowings bore interest at one-year loan benchmark interest rate issued by PBOC for the period from 24 December 2012 to 24 December 2015. As of 30 June 2015, this borrowing has not expired yet.
26. 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 9,737,330.58 9,737,330.58 Total 13,657,490.94 13,657,490.94 27. Long-term employee payable
(1) Long-term employee payable
Item Closing balance Balance at year-begin I. Post-employment benefit–net liability of defined 9,783,743.11 9,953,557.75
Item Closing balance Balance at year-begin benefit plans
II. Compensation from labor relationship dismissed -- -- III. Other long-term welfare
-- -- Total 9,783,743.11 9,953,557.75 (2) changes of defined benefit plans
①the obligation present value of defined benefit plans
Item Jan.-Jun. 2015 Amount in 2014 I. Balance at year-begin 9,953,557.75 10,297,200.34 II. Cost of defined benefit reckoned into current 272,635.36 561,197.43 gains/losses
1. Current service cost -- -- 2. Past service cost -- -- 3. Settlement gains (Loss is listed with―-‖)、 -- -- 4. Net interest 272,635.36 561,197.43 III. Cost of defined benefit reckoned into other -- -- comprehensive income
1. Actuary gains (Loss is listed with―-‖) -- -- IV. Other changes 442,450.00 904,840.02 1. Consideration paid by settlement -- -- 2. Welfare paid 442,450.00 904,840.02 V. Closing balance 9,783,743.11 9,953,557.75②Contents of defined benefit plan and material actuary assumption and sensitive analysis relating to defined benefit plan
Our defined benefit plan relates to the present value of the future retirement benefits payables.
The major actuary assumption for calculation of present value is discount rate and death rate. Sensitive analysis on discount rate: interest rate rises while present value declines. However, as compared to fixed assumed interest rate, adjustment to present value is less than that to interest rate. In case that floating ratio of interest rate remains consistent, period-on-period deviation for present value increases, while absolute deviation ratio is smaller than floating ratio of interest rate. Sensitive analysis on death rate: death rate increases while present value decline, while the decline scope is less than the increase rate of death rate.
28. Other non-current liability
Item Closing amount Amont at year-begin Deferred income 12,651,834.58 32,570,237.55 Total 12,651,834.58 32,570,237.55 Notes: our deferred income refers to the rental received in advance from Shuibei Jewelry Building. The income was subsequently measured at amortised cost at effective rate. The Company had repaid the total rental received in advance of RMB 21,391,274.26 to Shenzhen Xingguangda Jewelry Industry Co., Ltd. and Shenzhen Jinbaifu Jewelry Co., Ltd.
29. Share capital
Increased/decreased(+,-) in the Period
Shares
Bonu convert
Balance at
Item New shares s ed Closing balance year-begin Other Sub-total
issued share from
s public
reserve
I. Restricted shares
1. State-owned shares
-- -- -- -- -- -- -- -- 2. State-owned legal
person’s shares 14,587,056.00 6,000,000.00 -- -- -- -- 20,587,056.00 6.93% 3. Other domestic shares
-- 71,000,000.00 -- -- -- -- 71,000,000.00 23.88% Including: Domestic legal
person’s shares -- 71,000,000.00 -- -- -- -- 71,000,000.00 23.88% Domestic naturalperson’s
shares -- -- -- -- -- -- -- -- 4. Foreign shares
-- -- -- -- -- -- -- -- Including: Foreign legal
person’s shares -- -- -- -- -- -- -- -- Foreign naturalperson’s
shares -- -- -- -- -- -- -- -- Total restricted shares 14,587,056.00 77,000,000.00 -- -- -- -- 91,587,056.00 30.81% II. Unrestricted shares
1. RMB Ordinary shares
179,294,544.00 -- -- -- -- -- 179,294,544.00 60.31% 2. Domestically listed
foreign shares 26,400,000.00 -- -- -- -- -- 26,400,000.00 8.88% 3. Overseas listed foreign
shares -- -- -- -- -- -- -- -- 4. Others
-- -- -- -- -- -- -- -- Total unrestricted shares 205,694,544.00 -- -- -- -- -- 205,694,544.00 69.19%
Increased/decreased(+,-) in the Period
Shares
Bonu convert
Balance at
Item New shares s ed Closing balance year-begin Other Sub-total
issued share from
s public
reserve
III. Total shares 220,281,600.00 77,000,000.00 -- -- -- -- 297,281,600.00 100% 30. Capital reserves
Item Balance at year-begin Increased in the year Decreased in the year Closing balance Capital premium 3,024,773.35 556,520,000.00 -- 559,544,773.35 Other capital reserve 4,647,832.16 -- -- 4,647,832.16 Total 7,672,605.51 556,520,000.00 -- 564,192,605.51 31. 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 Notes: under the Company Law and Articles of Association, the Company made statutory surplus reserve based on10% of net profits. Such provision shall cease when the accumulated statutory surplus reserve achieves50% or above of the registered capital of the Company.
The Company may make other surplus reserve after it makes statutory surplus reserve. Once authorized, other surplus reserve can be used to make up previous losses or increase share capital.
32. Retained profits
Item Jan.- Jun. 2015 2014 Undistributed profits at the end of last year before adjustment -39,026,529.03 -40,390,760.22 Adjust the total undistributed profits at the beginning of the year (Increase+, Decrease -)
-- -8,980,986.48 Undistributed profits at the beginning of the year after adjustment
-39,026,529.03 -49,371,746.70 Add: The net profits belong to shareholders of patent company of this year
7,650,356.02 10,345,217.67 Less: Withdraw statutory surplus reserves -- -- Withdraw free surplus reserves -- --
Item Jan.- Jun. 2015 2014 Withdrawal of general risk provisions -- -- Common stock dividends payable -- -- Common stock dividends transferred to capital stock -- -- Retained profits at end of the period -31,376,173.01 -39,026,529.03 Notes: as required by the Accounting Standards for Business Enterprises and its relevant new provisions, the Company retrospectively adjusted the beginning undistributed profit of RMB(8,980,986.48) for 2014. For details, please refer to Note IV 28 change of significant accounting policies and accounting estimation.
33. Operating income and cost
Jan.- Jun. 2015 Jan.- Jun. 2014
Item
Income Cost Income Cost Main operating
154,770,195.92 115,546,491.25 225,621,469.48 193,600,770.84 Other operating
3,721,585.92 1,393,012.66 3,071,072.38 1,697,370.75 Total 158,491,781.84 116,939,503.91 228,692,541.86 195,298,141.59 34. Business tax and surcharges
Item Jan.- Jun. 2015 Jan.- Jun. 2014
Business tax
2,353,760.09 1,952,501.60 City maintenance and construction tax
311,363.21 298,572.74 Education surcharge
182,541.88 212,774.01 Total 2,847,665.18 2,463,848.35 Note: Calculation standards for business tax and surcharges found more in Note V. Taxes
35. Sales expenses
Item Jan.- Jun. 2015 Jan.- Jun. 2014
Employee compensation 5,541,658.75 5,236,572.80 Advertising and exhibition expenses 175,873.52 39,381.94 Depreciation and amortization 825,516.58 667,978.08 Office expenses 460,914.15 430,430.96 Taxes 482,719.91 489,777.87 Utilities 178,593.29 145,209.12
Item Jan.- Jun. 2015 Jan.- Jun. 2014
Transportation expenses 300,387.49 326,356.13 Business entertainment expenses 130,496.57 138,610.00 Other 1,424,259.44 1,707,705.40 Total 9,520,419.70 9,182,022.30 36. Administration expense
Item Jan.- Jun. 2015 Jan.- Jun. 2014
Employee compensation 8,373,528.93 7,993,845.17 Taxes 1,867,053.64 1,464,200.36 Office expenses 1,174,612.01 1,152,504.78 Travelling expense 382,273.10 373,744.40 Business entertainment expenses 361,500.30 438,464.00 Depreciation and amortization 783,449.14 806,349.97 Consulting and service expenses 1,440,968.87 440,772.00 Cargo transportation expenses 686,608.46 871,444.00 Conference fee 171,600.03 149,600.06 Other 1,539,321.82 2,036,348.50 Total 16,780,916.30 15,727,273.24 37. Financial expenses
Item Jan.- Jun. 2015 Jan.- Jun. 2014
Interest expenses
10,325,274.97 11,723,072.08 Less: Interest income
1,694,920.56 206,703.02 Less: interest capitalized amount 4,593,142.26 3,585,771.21 Exchange gains and losses -10.89 20,969.24 Other 492,475.91 569,675.60 Total 4,529,677.17 8,521,242.69 38. Asset impairment loss
Item Jan.- Jun. 2015 Jan.- Jun. 2014
Item Jan.- Jun. 2015 Jan.- Jun. 2014 Bad debt loss -- 35,599.18 Total -- 35,599.18 39. Investment income
Item Jan.- Jun. 2015 Jan.- Jun. 2014 Income of long-term equity investment calculated based on equity 469,732.57 7,841,475.98 Investment income obtained from disposal of long-term equity investment -- -- Investment gains from financial assets measured by fair value and with its variation -- -- reckoned into current gains/losses during holding period
Investment gains from disposal of the inancial assets measured by fair value and with its -- -- variation reckoned into current gains/losses
Investment income obtained from held-to-maturity investment -- -- Investment income from holding financial assets available for sales -- -- Investment income obtained from disposal of financial assets available for sales -- -- Gains from the residual equity re-measured by fair value after controls loss -- -- Other investment income 154,657.53 -- Total 624,390.10 7,841,475.98 40. Non-operating income
Amount reckoned into current Item Jan.- Jun. 2015 Jan.- Jun. 2014
non-recurring gains/losses Non-current assets disposal gains
17,094.02 172,812.80 17,094.02 Including: fixed assets disposal gains
17,094.02 172,812.80 17,094.02 Other 31,668.08 52,439.11 31,668.08 Total 48,762.10 225,251.91 48,762.10 41. Non-operating expenditure
Amount reckoned into current non-recurring Item Jan.- Jun. 2015 Jan.- Jun. 2014
gains/losses Non-current assets disposal losses
37,300.18 -- 37,300.18 Including: fixed assets disposal losses
37,300.18 -- 37,300.18 Loss of joint liability -- -- --
Amount reckoned into Item Jan.- Jun. 2015 Jan.- Jun. 2014
current non-recurring gains/losses Other 17.75 2,633.01 17.75 Total 37,317.93 2,633.01 37,317.93 42. Income tax expense
(1) Statement of income tax expense
Item Jan.- Jun. 2015 Jan.- Jun. 2014 Current income tax expense
1,290,744.72 813,761.54 Deferred income tax expense -90,027.41 -96,499.15 Total 1,200,717.31 717,262.39 (2) Adjustment on accounting profit and income tax expenses
Item Jan.- Jun. 2015
Total profit 8,509,433.85 Income tax measured by statutory/applicable tax rate 2,127,358.46 Impact by different tax rate applied by subsidaies 38.58 Adjusted the previous income tax -- Impact by non-taxable revenue -132,724.33 Impact on cost, expenses and losses that unable to deducted 644,383.40 Impact by the deductible losses of the un-racognzied previous deferred income tax -1,814,487.89 The deductible temporary differences or deductible losses of the un-recognized deffered 376,149.09 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 1,200,717.31 43. Notes to statement of cash flow
(1) Other cash received in relation to operation activities
Item Jan.- Jun. 2015 Jan.- Jun. 2014 Interest income 1,694,920.56 206,703.02 Intercourse funds and other 19,396,599.63 25,553,067.65 Total 21,091,520.19 25,759,770.67 (2) Other cash paid in relation to operation activities
Item Jan.- Jun. 2015 Jan.- Jun. 2014 Expenses of operation management cash paid
12,564,652.19 11,423,469.93 Intercourse funds and other 34,932,954.16 18,700,479.91 Total 47,497,606.35 30,123,949.84 (3) Cash paid related with financing activities
Item Jan.- Jun. 2015 Jan.- Jun. 2014 Cash related to the private placement 437,000.00 -- Total 437,000.00 -- 44. Supplementary information to statement of cash flow
(1) Supplementary information to statement of cash flow
Supplementary information Jan.- Jun. 2015 Jan.- Jun. 2014 1. Net profit adjusted to cash flow of operation activities:
Net profit 7,308,716.54 4,811,247.00 Add: Provision of assets impairment -- 35,599.18 Depreciation of fixed assets, consumption of oil assets and depreciation of
6,583,807.92 6,519,600.24 productive biology assets
Amortization of intangible assets 603,480.29 112,419.48 Amortization of long-term deferred expenses 170,434.46 186,565.21 Loss from disposal of fixed assets, intangible assets and other long-term assets(gain
20,206.16 -172,812.80 is listed with―-‖)
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―-‖) 5,732,121.82 8,137,300.87 Investment loss (gain is listed with―-‖) -624,390.10 -7,841,475.98 Decrease of deferred income tax asset( (increase is listed with―-‖) 32,658.34 10,571.30 Increase of deferred income tax liability (decrease is listed with―-‖) -122,685.75 -123,299.77 Decrease of inventory (increase is listed with―-‖) 39,818,859.03 19,059,705.51 Decrease of operating receivable accounts (increase is listed with―-‖) -8,858,504.36 -11,227,860.54 Increase of operating payable accounts (decrease is listed with―-‖) -16,801,821.65 -23,692,871.66 Other -- -- Net cash flow arising from operating activities 33,862,882.70 -4,185,311.96 2. Material investment and financing not involved in cash flow
Supplementary information Jan.- Jun. 2015 Jan.- Jun. 2014 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 131,254,844.47 55,861,580.07 Less: Balance of cash equivalent at year-begin 80,045,669.65 63,166,448.10 Add: Closing balance of cash equivalents -- -- Less: Opening balance of cash equivalents -- -- Net increasing of cash and cash equivalents 51,209,174.82 -7,304,868.03 (2) Constitution of cash and cash equivalent
Item Jan.- Jun. 2015 Jan.- Jun. 2014
I. Csah 131,254,844.47 55,861,580.07 Including: stock cash 131,222.54 146,293.44 Bank deposit available for payment at any time 131,123,621.93 55,712,194.45 Other monetary fund available for payment at any time -- 3,092.18 II. Cash equivalent -- -- Including: bond investment matured within 3 months -- -- II. Balance of cash and cash equivalent at period-end 131,254,844.47 55,861,580.07 Including: Cash and cash equivalent with restiction used by parent
-- -- company or subsidiary in the Group
45. Assets with ownership or use right restricted
Item
Book value at Period-end Reason
Long-term equity investmnet 77,317,647.65 See Note IX-5-(2)
Total 77,317,647.65
46. 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: Cash-USD 856.00 6.1136 5,233.24 Cash-HKD 534.00 0.7886 421.12
VII. 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.
VIII. 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 Obtained by Service
Development Co. Ltd
Shenzhen Shenzhen 100.00 -- establishment or industry
investment Obtained by Shenzhen SD Tellus Property Management Service
Shenzhen Shenzhen 100.00 -- establishment or Co., Ltd industry
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 Shenzhen New Yongtong Automobile Service Obtained by Shenzhen Shenzhen 51.00 --
Inspection Equipment 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 ShenzhenBao’an Shiquan Industrial Co., Ltd Shenzhen Shenzhen Commerce -- 100.00 establishment or investment Obtained by Shenzhen Automobile Industry Trading
Shenzhen Shenzhen Commerce 100.00 -- establishment or General Company
investment Obtained by Shenzhen SD Huari Automobile Enterprise Service
Shenzhen Shenzhen 60.00 -- establishment or Co.Limited 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 Shenzhen Huari Anxin Automobile Inspection Service
Shenzhen Shenzhen -- 60.00 establishment or Ltd industry
investment Obtained by Shenzhen Automotive Industry Supply Service
Shenzhen Shenzhen -- 100.00 establishment or Corporation industry
investment Ceramic Obtained by Shenzhen hanli Hi-Tech Ceramics Co., Ltd. Shenzhen Shenzhen 80.00 --
technology
Main Share-holding ratio
Registered Business
Subsidiary operation Acquired way place nature
Directly Indirectly
place
establishment or 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% -384,637.38 -- -3,772,080.20 Shenzhen SD Huari Automobile Enterprise
40% -225,588.36 -- 13,094,628.34 Co.Limited
(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
25,099,608.16 1,458,074.48 26,557,682.64 35,987,883.14 -- 35,987,883.14 Automobile Co. Ltd
Shenzhen SD Huari
Automobile Enterprise 36,186,448.81 34,736,701.16 70,923,149.97 37,485,468.64 701,110.48 38,186,579.12 Co.Limited
(3)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
2015-6-30 / Jan.- Jun. 2015 2014-6-30 / Jan.- Jun. 2014
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 305,041,849.50 343,158,823.01
312,304,427.00 455,215,900.97 Non -current assets 26,813,817.56 198,877,256.56
35,303,675.00 197,175,553.60 Total assets 331,855,667.06 542,036,079.57
347,608,102.00 652,391,454.57 Current liabilities 108,721,936.57 386,337,406.24
127,000,566.00 439,039,200.65 Non–current liabilities -- --
-- 57,687,321.71 Total liabilities 108,721,936.57 386,337,406.24
127,000,566.00 496,726,522.36 Minorityshareholders’ equity -- -4,584,966.42
-- -5,070,773.24 Attributable to parent company
223,133,730.49 160,283,639.75
shareholders’ equity
220,607,536.00 160,735,705.45 Share of net assets calculated by 78,096,805.67 40,070,909.94
77,212,637.60 40,183,926.36
2015-6-30 / Jan.- Jun. 2015 2014-6-30 / Jan.- Jun. 2014
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.
shareholding ratio
Adjustment items -- -- -- -- --Goodwill -- -- -- -- --Unrealized profit of internal
-- -- -- -- trading
—Other -779,158.02 97,415.66
-- -- Book value of equity investment
77,317,647.65 40,168,325.60
in joint ventures
77,212,637.60 40,183,926.36 Fair value of the equtiy
incestment of affiliation with -- -- -- -- public offers concerned
Operation income 334,504,859.40 158,949,383.31 706,759,017.70 104,332,338.01 Net profit 300,028.70 330,374.34 18,521,442.74 6,013,464.08 Net profit of the termination of
-- -- -- -- operation
Other comprehensive income -- -- -- -- Total comprehensive income 300,028.70 330,374.34 18,521,442.74 6,113,479.96 Dividends received from
-- -- -- -- affiliation in the year
(3) Main financial information of the important cooperative enterprise
Shenzhen Tellus Jimeng Investment Co., Ltd
Item
2015-6-30 / Jan.- Jun. 2015 2014-6-30 / Jan.- Jun. 2014 Current assets
20,195,989.69 28,159,623.29 Including: cash and cash equivalents
17,968,129.05 19,987,349.61 Non -current assets
257,537,458.25 199,171,630.91 Total assets
277,733,447.94 227,331,254.20
Shenzhen Tellus Jimeng Investment Co., Ltd
Item
2015-6-30 / Jan.- Jun. 2015 2014-6-30 / Jan.- Jun. 2014 Current liabilities
15,898,761.46 17,815,968.34 Non–current liabilities
142,150,000.00 90,080,000.00 Total liabilities
158,048,761.46 107,895,968.34 Minorityshareholders’ equity
-- -- Attributable to parent companyshareholders’
119,684,686.48 119,435,285.86 equity
Share of net assets calculated by shareholding
59,842,343.24 59,717,642.94 ratio
Adjustment items
-- -- --Goodwill
-- -- --Unrealized profit of internal trading
-- --—Other -- -- Book value of equity investment in joint ventures
59,842,343.24 59,717,642.94 Fair value of the equtiy incestment of joint
ventures with public offers concerned
Operation income
-- -- Financial expense
-249,400.62 -3,990.60 Income tax expense
-- -- Net profit
249,400.62 1,994.02 Net profit of the termination of operation
-- -- Other comprehensive income
-- -- Total comprehensive income
249,400.62 1,994.02 Dividends received from joint venture in the year
-- --
(4)summary financial informantion of not important joint venture and cooperative enterprise
Item 2015-6-30 / Jan.- Jun. 2015 2014-6-30 / Jan.- Jun. 2014 Joint ventures:
Total investment of book value 9,714,691.43 9,313,071.40 Total amount of the follow items calculated by
401,620.03 257,884.42 share-holding ratio
—net profit 401,620.03 257,884.42—Other comprehensive income -- --—Total comprehensive income 401,620.03 257,884.42 affiliation:
Total investment of book value 39,299,839.66 24,842,987.50 Total amount of the follow items calculated by
-145,997.05 1,199,836.13 share-holding ratio
—net profit -145,997.05 1,199,836.13—Other comprehensive income -- --—Total comprehensive income -145,997.05 1,199,836.13 (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. 95,013.99 333.62 95,347.61 Shenzhen New Yongtong Dongxiao Auto Service 46,912.77 188,284.33 235,197.10 Co., Ltd.
Shenzhen Yongtong Xinda Inspection Equipment 213,433.08 300,924.41 514,357.49 Co., Ltd.
4. Imporant co-management
No co-management in the Peirod
IX. 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 1,582,820,000 51.09 51.09 hen
domestic
commerce
Note: Ultimate controller of the Company is SASAC of Shenzhen.
2. Subsidiary of the Company
Found more in Note VIII. 1: Equity of subsidiary
3. Details of joint-venture and affiliated enterprise of the Company
Found more in Note VI. 10
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
As a lessor for the Company
Lease income in Lease income in Lessee Assets type
recognized in Jan.- Jun. recognized in Jan.- Jun. 2015 2014
Shenzhen Zung Fu Tellus Auto Service Co., Ltd. House leasing 2,650,000.00 2,575,000.02 Shenzhen New Yongtong Automobile Services Co., Ltd. House leasing 192,639.00 188,958.00 Shenzhen New Yongtong Dongxiao Auto Service Co., Ltd. House leasing 141,300.00 138,600.00 (2) The 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 RMB5,041,900. As at 30 June 2015, an aggregate of RMB2,268,900 has been paid.
(4) Related fund occupation expenses
Related party Content Jan.- Jun. 2015 Jan.- Jun. 2014 Borrow-in:
Shenzhen SDG Co., Ltd. fund occupation expenses 2,700,873.50 2,632,260.00 Borrow-out:
Shenzhen Xinglong Machinery Mould Co., ltd. fund occupation expenses 37,708.32 37,708.32 (5) Remuneration of key manager
Jan.- Jun. 2015(in the thousand
Item Jan.- Jun. 2014(in ten thousand yuan) yuan)
Remuneration of key manager RMB 2,710,000 RMB 2,630,000 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. 927,602.00 440,610.70 927,602.00 440,610.70 Shenzhen New Yongtong Dongxiao Auto Service Co., Ltd. 680,400.00 323,190.00 680,400.00 323,190.00 Total 1,608,002.00 763,800.70 1,608,002.00 763,800.70 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 47,296.04 116,480.22 47,296.04 Shenzhen Yongtong Xinda Inspection Equipment Co., Ltd. 518,429.47 517,782.47 517,782.47 517,782.47 Shenzhen Xiandao New Material Co., Ltd. 660,790.09 660,790.09 660,790.09 660,790.09 Shenzhen Xinglong Machinery Mould Co., ltd. 2,072,002.98 922,032.78 2,034,294.66 922,032.78 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 9,620.88 -- -- -- Total 4,851,396.97 3,621,974.71 4,803,420.77 3,621,974.71 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 Short-term loans:
Shenzhen SDG Co., Ltd. 18,902,909.00 18,919,672.00 Total 18,902,909.00 18,919,672.00 Account payable:
Item Closing balance Balance at year-begin Shenzhen SDG Real Estate 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. 1,822,721.57 1,887,561.15 Shenzhen SDG Swan Industrial Company Ltd. 20,703.25 20,703.25 Shenzhen Machinery Equipment Imp& Exp. Company 1,258,857.30 1,195,503.24 Shenzhen SDG Co., Ltd. 62,477,486.22 59,782,492.72 Shenzhen Longgang Tellus Real Estate Co., Ltd. 1,095,742.50 1,095,742.50 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. 17,956.93 14,159.57 Shenzhen Yongtong Xinda Inspection Equipment Co., Ltd. -- 24,340.00 Total 67,903,902.16 65,230,936.82 Long-term loans:
Shenzhen SDG Co., Ltd. -- 73,000,000.00 Total -- 73,000,000.00 Non-current liabilities due within 1 year
Shenzhen SDG Co., Ltd. 73,000,000.00 -- Total 73,000,000.00 -- X. 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 195,748,908.70 235,913,223.51 commitment
Total 195,748,908.70 235,913,223.51 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. As at 30 June 2015, the case has not been ruled yet.④in 2014, the Company raised proceeding on Shenzhen Mingkeda Logistics Development Company(―MingkedaCompany‖) to
request: discharge the housing leasing contract (NO.A0028765) signed between the Company and Mingkeda Company; Mingkeda Company to return property located at No.2182 (original No.108) north Renmin road, Luohu District, Shenzhen to the Company; Mingkeda Company pay rentals for the involved property for the period commencing from the date of the proceeding to actual return date of such property under standard rental applicable to commercial properties leasing in this region during the contract period; Mingkeda Company shall bear proceeding fees. On 29 December 2014 and 29 June 2015, the Company won the case respectively in the first and second instances. As at 30 June 2015, this case is being executed.
XI. Events occurring after the balance sheet date
The Company has no major events occurring after the balance sheet date which should disclosed
XII. 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. 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 Jan.- Jun. 2014
Auto maintenance Leasing and Offset of segment
Auto sales
Item Total and repair services
Main operating revenue
159,587,553.83 30,830,711.22 43,155,763.69 -7,952,559.26 225,621,469.48 Main operating cost
155,270,536.50 26,234,680.30 20,048,113.30 -7,952,559.26 193,600,770.84 Total assets
66,109,401.55 77,568,016.86 1,270,077,097.87 -670,830,786.28 742,923,730.00
Auto maintenance Leasing and Offset of segment
Auto sales
Item Total and repair services
Total liabilities
78,700,663.09 37,731,108.52 834,051,847.94 -406,904,953.15 543,578,666.40 XIII. 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
100.00 -- individually 8 0 8
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
significant amount and withdrawal bad 12,232,758.22 11.02 12,232,758.22 100.00 -- debt provision separately
Other receivables with bad debt
96,949,062.25 87.33 976,894.72 1.01 95,972,167.53 provision accrual by credit portfolio
Other accounts with single significant
amount and bad debts provision 1,833,967.78 1.65 1,833,967.78 100.00 -- accrued individually
Total 111,015,788.25 100.00 15,043,620.72 13.55 95,972,167.53 (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 12,232,758.22 9.76 12,232,758.22 100.00 -- debt provision separately
Other receivables with bad debt
111,327,082.72 88.78 976,894.72 0.88 110,350,188.00 provision accrual by credit portfolio
Other accounts with single significant
amount and bad debts provision 1,833,967.78 1.46 1,833,967.78 100.00 -- accrued individually
Total 125,393,808.72 100.00 15,043,620.72 12.00 110,350,188.00①
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period
Other receivable(By unit) Closing balance
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., 1,889,129.04 1,889,129.04 100.00 Unlikely to collected
Ltd.
Huatong Package Co., Ltd. 1,212,373.79 1,212,373.79 100.00 Not expected to collected due to long account age Shenzhen Xiandao New Material Co., Ltd. 660,790.09 660,790.09 100.00 Not expected to collected due to long account age 763,481.79 763,481.79 100.00 Not expected to collected due toOther_VAT(trade department)
long account age Total 12,232,758.22 12,232,758.22
②
In 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 94,496,570.42 -- -- 1-2 year 503,280.45 25,164.02 5.00 2-3 year 76,249.97 15,249.99 20.00 Over 3 years 1,872,961.41 936,480.71 50.00 Total 96,949,062.25 976,894.72 1.01 (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
91,604,289.17 107,087,610.34 Intercourse funds receivable from related units
2,742,413.95 2,695,084.75 Other 16,669,085.13 15,611,113.63
Total 111,015,788.25 125,393,808.72 (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 4.50 5,000,000.00 Co., Ltd. funds
Jinbeili Home Appliance Intercourse
2,706,983.51 Over 3 years 2.44 2,706,983.51 funds
Company
Shenzhen Xinglong Machinery Intercourse
2,072,002.98 Over 3 years 1.87 922,032.78 funds
Module Co., Ltd.
Shenzhen Petroleum & Intercourse
1,889,129.04 Over 3 years 1.70 1,889,129.04 funds
Chemical (Group) Co., Ltd.
Intercourse
Huatong Machinery Co., Ltd.
1,212,373.79 Over 3 years 1.09 1,212,373.79 funds
Total 12,880,489.32 11.60 11,730,519.12 (5) Account receivable with government grand involved
Nil
(6) Other account receivable derecognition due to financial assets transfer
Nil
(7) Assets and liabilities resulted by other account receivable transfer and continues involvement
Nil
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 1,956,000.00 521,883,543.61 265,795,543.61 1,956,000.00 263,839,543.61 subsidiary
Investment
for 172,540,099.38 9,787,162.32 164,708,937.06 171,908,769.00 9,787,162.32 162,121,606.68 associates
Closing balance Balance at year-begin
Item
Depreciation Depreciation
Book balance Book value Book balance Book value reserves reserves
and joint
venture
Total 698,335,642.99 11,743,162.32 686,592,480.67 437,704,312.61 11,743,162.32 425,961,150.29 (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
10,708,622.90 260,000,000.00 -- 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.
Impairm Ending balance Decrease
The invested entity Opening balance Increased Ending balance ent of impairment d
accrual provision Total 265,795,543.61 260,000,000.00 -- 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 59,717,642.94 -- -- 124,700.30 -- -- Shenzhen Tellus Hang Investment Co., Ltd. 9,313,071.40 -- -- 401,620.03 -- -- Subtotal
69,030,714.34 -- -- 526,320.33 -- -- 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.,
77,212,637.60 -- -- 105,010.05 -- -- 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
102,878,054.66 -- -- 105,010.05 -- -- Total 171,908,769.00 -- -- 631,330.38 -- -- (Cont.)
+,-
Ending balance Cash dividend or
Invested company Impairment Closing balance
of impairment profit announced
Other provision accrual
to issued
+,-
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
--
-- --
59,842,343.24
-- Shenzhen Tellus Hang Investment Co., Ltd. --
-- --
9,714,691.43
-- Subtotal --
-- --
69,557,034.67
-- 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. -- --
77,317,647.65
-- 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
-- --
102,983,064.71 9,787,162.32 Total
-- --
172,540,099.38 9,787,162.32Note:* The enterprises have revoked the industry and commerce liances, and the long-term equity investment have been accrual depreciation reserves in total
4. Operating income and cost
Jan.- Jun. 2015 Jan.- Jun. 2014
Item
Income Cost Income Cost Main business 17,058,260.06 1,860,594.49 9,684,900.12 1,820,193.72 Other business -- -- -- -- Total 17,058,260.06 1,860,594.49 9,684,900.12 1,820,193.72 5. Investment income
Item Jan.- Jun. 2015 Jan.- Jun. 2014 Income of long-term equity investment calculated based on equity
631,330.38 6,741,386.38 Other investment income 154,657.53 --
Item Jan.- Jun. 2015 Jan.- Jun. 2014 Total 785,987.91 6,741,386.38 XIV. Supplementary Information
1. Details of non-recurring gains and losses in Year
Item Amount Note Gains/losses from disposal of non-current asset
-20,206.16
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 --
Gains and losses from assets under trusted investment or management 154,657.53
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
--
Item Amount Note 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
--
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
31,650.33
Other gains and losses items complying with definition for non-current gains and losses
--
Subtotal
166,101.70
Affect on income tax
-41,525.43
Affect on minority equity(after tax)
9,240.04
Total
133,816.31
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 1.49
0.0296 0.0296 Company
Net profits belong to common
stock stockholders of the
1.47
Company after deducting 0.0290 0.0290 nonrecurring gains and 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. Financial statement and orginal financial report of the Company with signature and seal from the principal of the Company, person in charger of accounting works and person in charge of accounting organ (accounting principal);
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).
ShenZhen Tellus Holding Co.,Ltd August 26, 2015