SHENZHEN TELLUS HOLDING CO., LTD
SEMI-ANNUAL REPORT 2014
August 2014
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, Luo Bojun, person in charger of accounting works，CFO FuBin and Ke Wensheng, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of Semi-Annual Report 2014 is authentic, accurate and complete.
Concerning the future planning involved in the Report, they do not constitute a substantial commitment for investors. Investors are advised to exercise caution of investment risks.
Content
Semi-Annual Report 2014 ................................................................................................................. 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 ............................................................................................................ 18 Section VI Changes in shares and particular about shareholders ............................................... 25 Section VII PreferredStock…………………………………………………………………….…29 Section VIII Directors, Supervisors and Senior Executives ....................................................... 30 Section IX Financial Report ............................................................................................................ 31 Section X Documents Available for Reference ........................................................................... 146
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 2014 to 30 June 2014|
|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|s9239243@163.com|

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 2013.
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 2013.
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 2013.
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)|228,692,541.86|222,087,318.26|2.97%|
|Net profit attributable to shareholders of|5,380,420.81|3,746,434.89||
||||43.61%|
|the listed company(RMB)||||
|Net profit attributable to shareholders of||||
|the listed company after deducting|5,215,240.02|-3,413,773.73||
|non-recurring gains and losses(RMB)||||
|Net cash flow arising from operating|-4,185,311.96|36,298,462.37||
||||-111.53%|
|activities(RMB)||||
|Basic earnings per share (RMB/Share)|0.0244|0.0170|43.53%|
|Diluted earnings per share (RMB/Share)|0.0244|0.0170|43.53%|
|Weighted average ROE (%)|2.77%|2.01%|0.76%|
||||Increase/decrease in this|
||End of current period|End of last period|report-end over that of last|
||||period-end (%)|
|Total assets (RMB)|741,757,937.15|700,998,151.85|5.81%|
|Net assets attributable to shareholder of|196,666,117.09|191,351,957.28||
||||2.78%|
|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|172,812.80||
|write-off that accrued for impairment of assets)|||
|Other non-operating income and expenditure except for the|49,806.10||
|aforementioned items|||
|Impact on minority shareholders’ equity (post-tax)|57,438.11||
|Total|165,180.79|--|

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
In the first half of the year, Board of the Company earnestly perform their duties to regulating corporate operation, integrate all of the resources in total, taking marketization measure to contract and adjusted the cahin of enterprise manaegment, tap the potential and increase income with operating sustainable earnings achieved. On the one hand, ensure that construction of key projects are in s steady progress, on the other hand, strive to explore new business model and management model for Tellus, actively promoted theCompany’s transformation and upgrading, looking for new revenue growth opportunities to drive a healthy and stable development for the Company. II. Main business analysis
Introduction
Main business of the Company was auto sales, auto inspection and maintenance and accessory sales, property rental and services etc.; main business and its structure as well as main business ability in the reporting show no major changes compare with last period.
In reporting period, the Company achieved operation income of RMB 228.69 million in total with a y-o-y growth of2.97%; profit realized RMB 5.36 million in total, net profit attributable to owners of parent company amounting as RMB 5.38million, growth of the profit mainly because i. in the Period, enterprise (engaged in automobile business) with controlling rights obtained and with stock invested by the Company have greatly growth in profit on a year-on-year basis; ii. Property rental revenue in the Period increased and; iii. Operating margins of the Company growth due to the decrease of period expense in the Period
Y-o-y changes of main financial data
In RMB
||||||
|-|-|-|-|-|
||||Y-o-y increase/decrease||
||Current period|Same period of last year||Reasons for changes|
||||(%)||
|Operation revenue|228,692,541.86|222,087,318.26|2.97%||
|Operation cost|195,298,141.59|183,087,649.86|6.67%||
|Sales expenses|9,182,022.30|9,442,375.29|-2.76%||
|Administrative expenses|16,101,662.11|17,906,667.35|-10.08%||
|Financial cost|8,229,163.34|7,790,082.78|5.64%||
||701,033.07|195,375.12||More income tax paid in|
|Income tax expense|||258.81%||
|||||the Period|
||-4,185,311.96|36,298,462.37||Auto funds paid by|
|Net cash flow arising|||||
||||-111.53%|subsidiary Huari|
|from operation activities|||||
|||||TOYOTA increased|

||||||
|-|-|-|-|-|
|||||y-o-y|
||-70,203,958.22|12,944,409.13||More costs paid for|
|||||construction of Shuibei|
|||||Jewelry Building and|
|Net cash flow arising||||received cash from|
|from investment|||-642.35%|disposal of investment|
|activities||||real estate at same period|
|||||of last year, and no such|
|||||item occurred in the|
|||||Period|
||67,083,699.08|-24,147,599.58||Borrowings from parent|
|Net cash flow arising|||||
|||||company and the Bank|
|from financing activities|||||
|||||increased in the Period|
||-7,304,868.03|25,093,081.11||Amount paid for auto|
|||||purchased from|
|||||subsidiary Huari|
|Net increase of cash and||||TOYOTA increased|
||||-129.11%||
|cash equivalent||||y-o-y and more costs|
|||||paid for construction of|
|||||Shuibei Jewelry Building|
|||||in the Period|
|||||Inventory decreased due|
|||||to the sales expansion|
|Inventory|43,766,660.19|62,826,365.70|-30.34%||
|||||from subsidiary Huari|
|||||TOYOTA|
|||||Auto sales deduct the|
|Other current assets|85,849,620.32|41,642,020.40|106.16%|input tax from subsidiary|
|||||Huari TOYOTA|
|||||More costs for project of|
|Construction in process|52,873,743.56|33,255.04|158894.68%||
|||||Shuibei Jewelry Building|
|||||Land value of Shuibei|
|Intangible assets|52,964,100.72|33,255.04|159,166.39%|Jewelry Building|
|||||transferred-in|
|||||The 50% land value of|
|||||Shuibei Jewelry Building|
|Other non-current assets|0.00|26,339,112.00|-100.00%|paid originally|
|||||transferred-in as|
|||||intangible assets|
|Short-term loans|182,741,296.00|110,969,952.93|64.68%|Bank loans increased|
|||||Bank acceptance paid by|
|Note payable|6,225,651.90|15,920,748.09|-60.90%||
|||||subsidiary Huari|

||||||
|-|-|-|-|-|
|||||TOYOTA|
|Accounts receivable in||||Automobile Sales of|
||2,228,640.04|22,087,866.51|-89.91%||
|advance||||Huari TOYOTA|
|||||Enterprise income taxes|
|Taxes payable|9,175,574.79|16,687,262.22|-45.01%||
|||||paid|
|Loss from asset||||Bad debt provision|
||35,599.18|100,000.00|-64.4%||
|devaluation||||decrease|
|||||Associates enterprise--|
|||||Shenzhen Zung Fu Tellus|
|Investment earnings|7,841,475.98|1,780,082.57|340.51%|Auto Service Co., Ltd|
|||||gains more profit in the|
|||||Period|
|||||There was losses from|
|||||disposal of fixed assets|
|Non-operating|||||
||2,633.01|23,753.00|-88.92%|over a year earlier, and|
|expenditure|||||
|||||no such item occurred in|
|||||the Period|
|||||There was cash received|
|||||over a year earlier from|
|Subtotal of cash in-flow|||||
|||||disposal of investment|
|arising from investment|40,740.00|32,414,709.28|-99.87%||
|||||real estate, and no such|
|activities|||||
|||||item occurred in the|
|||||Period|
|Subtotal of cash out-flow||||Engineering funds paid|
|arising from investment|70,244,698.22|19,470,300.15|260.78%|for Shuibei Jewelry|
|activities||||Building increased|
|Subtotal of cash in-flow||||Borrowings from parent|
|arising from financing|226,000,000.00|41,600,000.00|443.27%|company and the Bank|
|activities||||increased in the Period|
|||||The loans due for|
|Subtotal of cash out-flow|||||
|||||repayment to parent|
|arising from financing|158,916,300.92|65,747,599.58|141.71%||
|||||company and the Bank|
|activities|||||
|||||increased in the Period|

 Major changes on profit composition or profit resources in reporting period
□ Applicable√ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
The future development and planning extended to reporting period that published in disclosure documents as prospectus, private placing memorandum and recapitalize statement
□ Applicable√ Not applicable
No future development and planning extended to reporting period that published in disclosure documents as prospectus, private
placing memorandum and recapitalize statement
Review on the previous business plan and its progress during reporting period
There is no situation of failing to reach the planned goals
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|159,587,553.83|155,270,536.50|2.71%|13.49%|11.59%|1.66%|
|Auto inspection|||||||
|and maintenance|||||||
||22,878,151.96|18,282,121.04|20.09%|-11.39%|-7.77%|-3.14%|
|and accessories|||||||
|sales|||||||
|Rental and|||||||
||43,155,763.69|20,048,113.30|53.54%|-3.80%|-10.00%|3.20%|
|service|||||||
|According to products|||||||
|Auto sales|159,587,553.83|155,270,536.50|2.71%|13.49%|11.59%|1.66%|
|Auto inspection|||||||
|and maintenance|||||||
||22,878,151.96|18,282,121.04|20.09%|-11.39%|-7.77%|-3.14%|
|and accessories|||||||
|sales|||||||
|Rental and|||||||
||43,155,763.69|20,048,113.30|53.54%|-3.80%|-10.00%|3.20%|
|service|||||||
|According to region|||||||
|Shenzhen|225,621,469.48|193,600,770.84|14.19%|6.78%|6.82%|-0.03%|

 IV. Core competitive-ness analysis
Core competitive-ness of the Company has no major changes in the Period. Main business of the Company mainly divided into two parts, the auto sales& aftermarket service and property rental& service.
Core competitive-ness of the Company has no major changes in the Period. Main business of the Company mainly divided into two parts, the auto sales& aftermarket service and property rental& service.
Auto sales& aftermarket service of the Company adopt business model of 4S store, comprehensive major maintenance, authorize maintenance, special maintenance and auto inspections. As profit standards in auto
industry declined integradlly and soaring costs of raw maateirals and labors, the marketplace will become
increasingly crowded. The Company will intergrate resources, active assets in full and reduce costs to step out the
enterprises and business gradually, who owes un-sustainable earnings and bad future perspective; overcome negative factors in automobile consumption market to achieve the operation goals with great efforts.
In aspect of property rental& service, the Company owes a certain property management experience and has higher property management qualification ; most of the property rental and management are self-owned property, which has a lower cost and a stable income. The property of the Company in Shuibei area locates in a jewelry collection and distribution center, property around Shuibei area is in the process of upgrading and transformation recently with less property available, and the rental standards and price will be improved.
With standard of market demand and targets of maximum benefit, the Company adopting various operation measures and innovative operation principle, implementing unified market planning via integration of existing property resources; promote overall image and level for the property availabe for lease, create a speciazlized and branded corporate image. Actively bringing in substantial stable clients, increase the ares for lease, improve rent standards and raise income of the property lease in order to achieved the maximization of property value. With the stable promotion of Tellus-Gem Golden Jewelry Industrial Park, the Company will promote targeted constructions of the Company with all-out efforts, guarantee the projects completed and put into operation on schedule, and increase areas of theCompany’s property (Shuibei Area in particular) for lease greatly, quality and grade ascended rapidly and the upgrading of property leasing business achieved.
The Company will seize policy opportunity, taking full advantage of the development advantage of core base for Shenzhen golden jewelry industry, and making ues of the double roles of main owner in Shuibei area and majority investor of industrial project, play a leading part in project of industrial park. Actively to lead the coordination of vary body, promote the scientific planning and quality of Shuibei Jewerly Industry, to enhance the company's asset quality and profitability
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
2. Trust financing, investment of derivatives and entrustment loan
(1) Trust financing
□ Applicable√ Not applicable
The Company has no trust financing in the Period
(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
(1)Overall application of raised proceeds
□ Applicable√ Not applicable
(2) Situation of committed project of raised proceeds
□ Applicable√ Not applicable
(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|

4. Main subsidiaries and joint-stock companies analysis
√ Applicable□ Not applicable
Main subsidiaries and joint-stock companies
In RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||Industry|Main|Registered|||Operation|Operation||
|Name|Type||||Total assets|Net assets|||Net profit|
|||involved|products or|capital|||revenue|profit||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||service|||||||
||||Self-owned|||||||
|Shenzhen|||property|||||||
|Auto|||leasing,|||||||
|||||RMB 58.96|311,500,37|226,034,06|8,418,423.1|3,771,748||
|Industry|Subsidiary|Commerce|automobile||||||3,212,576.33|
|||||million|2.56|3.86|5|.35||
|and Trade|||and|||||||
|Corporation|||accessories|||||||
||||selling|||||||
||||Automobile|||||||
|Shenzhen||||||||||
||||maintenanc|||||||
|SD Huari||Service||||||||
||||e &|US$ 5|74,373,866.|37,877,258.|21,158,993.|-4,595,15||
|Automobile|Subsidiary||||||||-4,426,761.95|
|||industry|production|million|55|18|78|7.73||
|Enterprise||||||||||
||||and sales of|||||||
|Co.||||||||||
||||accessory|||||||
|Shenzhen||||||||||
|Zhongtian||Service|Property|RMB 7.25|148,542,36|21,399,951.||199,823.3||
||Subsidiary||||||488,671.10||127,278.18|
|Industrial||industry|leasing|million|5.14|46||0||
|Co., Ltd.||||||||||
|Shenzhen||||||||||
|Huari||||||||||
|Toyota|||Automobile|RMB 2|69,004,837.|-10,483,587|170,529,36|2,002,553||
||Subsidiary|Commerce|||||||2,100,440.32|
|Automobile|||selling|million|96|.67|2.05|.80||
|Sales Co.||||||||||
|Ltd||||||||||
||||Production|||||||
|Shenzhen|||of|||||||
|New|||inspection|||||||
|Yongtong|||equipment|||||||
|||Service||RMB 19.|14,177,894.|1,919,739.5|1,800,981.6|557,070.3||
|Automobile|Subsidiary||for auto||||||419,070.33|
|||industry||61 million|40|7|0|3||
|Inspection|||vehicles,|||||||
|Equipment|||self-owned|||||||
|Co. Ltd|||property|||||||
||||leasing|||||||
||||Inspection|||||||
||||and|||||||
|Shenzhen||||||||||
||||maintenanc|||||||
|Tellus New||||||||||
||||e of auto|||||||
|Yongtong||Service||RMB 32.90|83,119,690.|44,270,331.|7,023,521.6|742,735.2||
||Subsidiary||vehicle,||||||742,505.81|
|Automobile||industry||million|42|02|9|2||
||||property|||||||
|Developme||||||||||
||||managemen|||||||
|nt Co. Ltd||||||||||
||||t, house|||||||
||||lease|||||||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Shenzhen||||||||||
||||Self-owned|||||||
|SD Tellus||Manufactur||RMB 31.15|29,199,687.|12,592,974.||-133,630.||
||Subsidiary||property||||0.00||-133,630.99|
|Real Estate||e||million|28|88||99||
||||leasing|||||||
|Co. Ltd||||||||||
|Shenzhen||||||||||
|SD Tellus|||Property|||||||
|||Service||RMB 7.05|28,407,428.|11,065,242.|17,326,700.|-237,599.||
|Property|Subsidiary||managemen||||||-230,290.71|
|||industry||million|57|60|63|41||
|Managemen|||t|||||||
|t Co. Ltd||||||||||
|Shenzhen||||||||||
|Tellus Real|||Agency of|||||||
|||Service||RMB 2|2,664,525.8|2,507,657.1||-12,597.3||
|Estate|Subsidiary||real estate||||213,547.00||-12,597.36|
|||industry||million|8|3||6||
|Exchange|||exchange|||||||
|Co. Ltd||||||||||
|Shenzhen||||||||||
||||Sales of|||||||
|Zung Fu||||||||||
||Joint-stock|Service|auto and|RMB 30|428,934,21|218,590,39|706,759,01|24,933,74|18,521,442.7|
|Tellus Auto||||||||||
||company|industry|maintenanc|million|9.71|5.45|7.70|4.94|4|
|Service Co.,||||||||||
||||e|||||||
|Ltd.||||||||||
||||Auto|||||||
|Shenzhen||||||||||
||||manufacturi|||||||
|Dongfeng|Joint-stock|Manufactur||RMB 100|556,126,42|135,640,69|104,332,33|4,799,317||
||||ng and||||||6,013,464.08|
|Auto Co.,|company|e||million|7.18|0.09|8.01|.99||
||||maintenanc|||||||
|Ltd.||||||||||
||||e|||||||
|Shenzhen||||||||||
||||Mould|||||||
|Xinglong||||RMB||||||
||Joint-stock|Manufactur|processing||256,020,99|64,979,136.||||
|Machinery||||27.6333|||0.00|0.00|0.00|
||company|e|and||3.74|82||||
|Mould Co.,||||million||||||
||||exportation|||||||
|Ltd.||||||||||

5. Major project invested by non-raised funds
√ Applicable□ Not applicable
In ten thousand Yuan
|||||||
|-|-|-|-|-|-|
||||Amount invested|||
||Total investment|Amount invested inthis period||||
|Project|||accumulative till end|Progress|Earnings|
||planned|||||
||||of reporting period|||
|Tellus Shuibei||||||
|jewelry Building|41,364|9,549.69|13,713.89|33.15%||
|(Phase I)||||||
|Total|41,364|9,549.69|13,713.89|--|--|

VI. Prediction of business performance from January– September 2014
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.
In reporting period, the Company, in line with requirement of internal control, formulated―Management Measures of RaiseFunds‖ combine with actual condition of the Company and revised the―Article ofAssociation‖.
In 30 days before periodic report released, 10 days before performance prediction and express report disclosed and in other major events public, board of the Company, supervisory committee, senior executives and other insider information informed staff exercise self-examination in aspect of the stocks trading in senstive period, no relevant personnel engage in securities trading activities using inside information been found.
Controlling shareholder of the Company has a norms behavior without beyond the general meeting to setp in the decision-making and operation activity of the Company directly/indirectly, and has no violation of capital occupation of the Company either, the Company strictly perform its decision-making procedures and disclosed the information timely.
During reporting period, in strict accordance with relevant requirement of―Rules of Stocks Listing in Shenzhen StockExchange‖ and―Guide of Fair Information Disclosure for ListedCompany‖as well as normative documents, by earnestly following the principle of―fairly, openly andequitably‖, the Company perform its information disclosure obligation seriously and timely; furthermore, asuring the reality, accuracy and completion for the whole contents of the information disclosed, no fictitious statement, misleading statement or important ommissions been found either, whole of the sharehodles are equally to share the all information of the Company. Presently, the actual condition of the corporate governance shows no difference with the Company Law and relevant requriement from CSRC.
II. Significant lawsuits and arbitrations of the Company
□ Applicable√ Not applicable
The Company has no significant lawsuits and arbitrations in reporting period
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
|||||||||
|-|-|-|-|-|-|-|-|
|||||Majority||||
|||||shareholder’s|Opening|Amount in|Closing|
|||Credit and||non-business|balance (in 10|Period (in|balance (in|
|Related party|Relationship||Causes|||||
|||debt||capital|thousand|10 thousand|10 thousand|
|||||occupying|Yuan)|Yuan)|Yuan)|
|||||(Y/N)||||
|||Debt payable||||||
|Shenzhen SDG Co.,|Parent||Long-term|||||
|||to related||N|7,300|0|7,300|
|Ltd.|company||loans|||||
|||party||||||
|||Debt payable||||||
|Shenzhen SDG Co.,|Parent||Accounts|||||
|||to related||N|5,385.8|-296.26|5,682.05|
|Ltd.|company||current|||||
|||party||||||
|||Debt payable||||||
|Shenzhen SDG Co.,|Parent||Short-term|||||
|||to related||N|1,895.24|1.11|1,894.13|
|Ltd.|company||loans|||||
|||party||||||

5. Other significant related transactions
□ Applicable√ Not applicable
The Company had no other significant 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|
||Announcem||happening||||||
|Name of the||Guarantee||Actual|Guarantee|Guarantee|implemen|e for|
||ent||(Date of||||||
|Company guaranteed||limit||guarantee limit|type|term|tation or|related|
||disclosure||signing||||||
||||||||not|party|
||date||agreement)||||||
|Guarantee of the Company for the subsidiaries|||||||||
||Related||Actual date of||||||
||||||||Complete|Guarante|
||Announcem||happening||||||
|Name of the||Guarantee||Actual|Guarantee|Guarantee|implemen|e for|
||ent||(Date of||||||
|Company guaranteed||limit||guarantee limit|type|term|tation or|related|
||disclosure||signing||||||
||||||||not|party|
||date||agreement)||||||
|Shenzhen Zhongtian|||||Joint liability||||
||2014-03-20|4,140||4,140||2.5 years|No|Yes|
|Industrial Co., Ltd.|||||guaranty||||
|Shenzhen Zhongtian|||||Joint liability||||
||2014-05-08|30,000||30,000||10 years|No|Yes|
|Industrial Co., Ltd.|||||guaranty||||
|Shenzhen Auto|||||||||
|Industry and Trade|2014-04-25|6,000||6,000|Pledged|12 months|No|Yes|
|Corporation|||||||||
|||||Total amount of actual|||||
|Total amount of approving|||||||||
|||||occurred guarantee for|||||
|guarantee for subsidiaries in||40,140||||40,140|||
|||||subsidiaries in report period|||||
|report period (B1)|||||||||
|||||(B2)|||||
|||||Total balance of actual|||||
|Total amount of approved|||||||||
|||||guarantee for subsidiaries at|||||
|guarantee for subsidiaries at the||40,140||||40,140|||
|||||the end of reporting period|||||
|end of reporting period (B3)|||||||||
|||||(B4)|||||
|Total amount of guarantee of the Company( total two abovementioned guarantee)|||||||||
|Total amount of approving||||Total amount of actual|||||
|||40,140||||40,140|||
|guarantee in report period||||occurred guarantee in report|||||
|(A1+B1)||||period (A2+B2)|||||
|Total amount of approved||||Total balance of actual|||||
|||40,140||||40,140|||
|guarantee at the end of report||||guarantee at the end of report|||||
|period (A3+B3)||||period (A4+B4)|||||
|The proportion of the total amount of actually guarantee in the|||||||||
|||||204.10%|||||
|net assets of the Company(A4+ B4)|||||||||

|||
|-|-|
|Including:||
|Amount of guarantee for shareholders, actual controller and its||
||0|
|related parties(C)||
|The debts guarantee amount provided for the guaranteed parties||
||34,140|
|whose assets-liability ratio exceed 70% directly or indirectly(D)||
|Proportion of total amount of guarantee in net assets of the||
||30,000|
|Company exceed 50%(E)||

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||
||||||Implementation|
|Commitments|Accepter|Contents||||
||||time|period||
|||(I) Commitments during the work of Share Merger||||
|||Reform of the Company:||||
|||1. Commitments on Lock-up period||||
|||(1) In accordance with the Measures for the||||
|||Administration of the Share Merger Reform of Listed||||
|||Companies, SDG would abide by the various laws,||||
|||regulations and rules, and perform its statutory||||
|Commitments for||commitment duty.||||
|Share Merger|SDG|(2) Apart from the above-mentioned statutory|2005-12-25|Long-term|Implementing|
|||commitment, SDG also made the following special||||
|Reform||||||
|||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.‖||||
|||2. Special commitment concerning the incentive||||
|||mechanism||||
|||In order to effectively boost the core management level||||
|||and business backbones for long, SDG would take out its||||
|||shares, not exceeding 10% in total number after the Share||||
|||Merger Reform, and apply them to the boost of the||||
|||administration level. The shares would be sold to the||||
|||Company’s administrative level over 3 years, with the||||
|||selling price being the net asset value per share audited||||
|||during the period nearest to the implementation. Before||||
|||the implementation of the promoting plan by share selling||||
|||each year, the administration level must prepay the||||
|||Company a risk responsibility fund, i.e. 20% of the||||
|||planned selling price; Should the work of the performance||||
|||examination set by the Board failed to be finished, the||||
|||paid risk responsibility fund would not be refunded and||||
|||shall be owned by the Company. Detailed rules||||
|||concerning the limitations on the administration level,||||
|||such as the subscription conditions and risk responsibility||||
|||fund, and boost plans would be set by the Board and||||
|||submitted to relevant departments for approval. The||||
|||implementation of the shares for promoting would be||||
|||conducted strictly according to relevant laws and||||
|||regulations, and the circulation conditions of these shares||||
|||would be in conformity with relevant regulations set by||||
|||the Shenzhen Stock Exchange.||||
|||3. Relevant expenses of this Share Merger Reform of||||
|||Tellus would be paid by SDG.||||
|||Controlling shareholder of the Company SDG has special||||
|||commitment of incentive mechanism in the Company’s||||
|||split-share reform. Later, SASAC and Ministry of Finance||||
|||jointly issued the Trial Procedures of Stock Option||||
|||Incentive Implemented By State-Holding Listed||||
|||Companies and CSRC published the Regulation of Stock||||
|||Option Incentive for Listed Companies (Trial), after||||
|||checking the documents, the above mentioned||||
|||commitment made by SDG fails to satisfy relevant||||
|||requirements in the document, relevant commitment not||||
||SDG||2014-06-26|2016-06-30|Implementing|
|||implemented temporary. The Company actively negotiate||||
|||with the SDG with the matters concerned, on 26 June||||
|||2014, on the premise of relevant laws, regulations and||||
|||requirement of authority satisfied, SDG will continues to||||
|||support the Company implement a long-acting incentive||||
|||plan as soon as possible instead of stock option incentive||||
|||commitment made in share merger reform and complete||||
|||the construction of long-acting incentive mechanism||||
|||before 30 June 2016. The long-acting incentive plan will||||
|||implement after submit for approval in General Meeting||||
|||of the Company at the scheduled time.||||
|Commitments in||||||
|report of||||||
|acquisition or||||||
|equity change||||||

|||
|-|-|
|Commitments in||
|assets replacement||
|Commitments||
|make in Initial||
|public offering or||
|re-financing||
|Other||
|commitments for||
|medium and small||
|shareholders||
|Completed on||
||Y|
|time(Y/N)||

XI. Engagement and non-reappointment of CPA
Whether the semi-annual report was audited or not
□ Yes√ No
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|||||
||14,587,05|||||||14,587,05||
|I. Restricted shares||6.62%|||||||6.62%|
||6|||||||6||
|2. State-owned corporation|14,587,05|||||||14,587,05||
|||6.62%|||||||6.62%|
|shares|6|||||||6||
||205,694,5|||||||205,694,5||
|II. Un-restricted shares||93.38%|||||||93.38%|
||44|||||||44||
||179,294,5|||||||179,294,5||
|1. RMB ordinary shares||81.39%|||||||81.39%|
||44|||||||44||
|2. Domestically listed|26,400,00|||||||26,400,00||
|||11.98%|||||||11.98%|
|foreign shares|0|||||||0||
||220,281,6|||||||220,281,6||
|III. Total shares||100.00%|||||||100.00%|
||00|||||||00||

Reasons for share changed
□ Applicable√ Not applicable
Approval of share changed
□ Applicable√ Not applicable
Ownership transfer of share changes
□ Applicable√ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
□ Applicable√ Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable√ Not applicable
Explanation on changes in aspect of total shares, shareholders structures as well as structure of assets and liability of the Company□ Applicable√ Not applicable
II. Number of shares and shares held
In Share
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||Total preference shareholderswith voting rights recovered atend of reporting period (ifapplicable) (see Note 8)||||||
|Total shareholders at period-end||16,818|||||||0||
|Particulars about shares held above 5% by shareholders or top ten shareholders|||||||||||
|||||||||Amount|Number of shares||
||||||||Amount||||
|||||Total||||of|pledged/frozen||
|||||||Changes|of||||
|Full name of|Nature of||Proportion of|shareholders||||unrestri|||
|||||||in report|restricte||||
|Shareholders|shareholder||shares held|at the end of||||cted|||
|||||||period|d shares||State of share|Amount|
|||||report period||||shares|||
||||||||held||||
|||||||||held|||
|SHENZHENSDG CO., LTD.|State-ownedcorporation||66.22%|145,870,560||0|14,587,056|131,283,504|||
|GuoyuanSecuritiesBrokerage (HK)Co., Ltd.|Foreign corporation||0.94%|2,075,600||-172,755|||||
|Zhang Yimei|Domestic natureperson||0.63%|1,398,200||1,398,200|||||
|Fang Jinsong|Domestic natureperson||0.32%|706,645||706,645|||||
|Jiang Youhua|Domestic natureperson||0.30%|650,838||650,838|||||
|FISRTSHANGHAISECURITIESLTD.|Foreign corporation||0.27%|601,907||-266,470|||||
|Chen Jiansheng|Domestic natureperson||0.27%|600,050||600,050|||||
|Chen Shufen|Domestic natureperson||0.24%|522,490||372,490|||||
|Lin Fengyuan|Domestic natureperson||0.24%|520,358||3,200|||||
|CMS (HK)|State-ownedcorporation||0.24%|520,020||371,721|||||
|Strategy investors or general corporate|||||||||||
|becomes top 10 shareholders due to|||N/A||||||||
|rights issued (if applicable)(see Note 3)|||||||||||
|Explanation on associated relationship|||Among the top ten shareholders, there exists no associated relationship between the||||||||
|among the aforesaid shareholders|||state-owned legal person’s shareholders Shenzhen SDG Co., Ltd and other shareholders,||||||||

|||||
|-|-|-|-|
||and they do not belong to the consistent actionist regulated by the Management Measure of|||
||Information 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 shareholders with un-restrict shares held||||
|||Type of shares||
|Shareholders’ name|Amount of unrestricted shares held at period-end|||
|||Type|Amount|
|SHENZHEN SDG CO., LTD.|131,283,504|RMB ordinary||
||||131,283,504|
|||shares||
|Guoyuan Securities Brokerage (HK)Co., Ltd.|2,075,600|Domestically||
|||listed foreign|2,075,600|
|||shares||
|Zhang Yimei|1,398,200|RMB ordinary||
||||1,398,200|
|||shares||
|Fang Jinsong|706,645|RMB ordinary||
||||706,645|
|||shares||
|Jiang Youhua|650,838|RMB ordinary||
||||650,838|
|||shares||
|FISRT SHANGHAI SECURITIESLTD.|601,907|Domestically||
|||listed foreign|601,907|
|||shares||
|Chen Jiansheng|600,050|RMB ordinary||
||||600,050|
|||shares||
|Chen Shufen|522,490|RMB ordinary||
||||522,490|
|||shares||
|Lin Fengyuan|520,358|Domestically||
|||listed foreign|520,358|
|||shares||
|CMS (HK)|520,020|Domestically||
|||listed foreign|520,020|
|||shares||
||Among the top ten shareholders, there exists no associated relationship between the|||
|Expiation on associated relationship or||||
||state-owned legal person’s shareholders Shenzhen SDG Co., Ltd and other shareholders,|||
|consistent actors within the top 10||||
||and they do not belong to the consistent actionist regulated by the Management Measure of|||
|un-restrict shareholders and between||||
||Information Disclosure on Change of Shareholding for Listed Companies. For the other|||
|top 10 un-restrict shareholders and top||||
||shareholders of circulation share, the Company is unknown whether they belong to the|||
|10 shareholders||||
||consistent actionist.|||
|Explanation on shareholders involving||||
|margin business (if applicable)(see|N/A|||
|note 4)||||

Whether has a buy-back agreement dealing in reporting period
□Yes√No
The shareholders o f the Company had 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
I. Issuance and listing of preferred stock in Period
□ Applicable√ Not applicable
II. Number of shareholders with preferred stock held and shareholdings
□ Applicable√ Not applicable
III. Repurchase and conversion of preferred stock
1. Preferred stock repurchased
□ Applicable√ Not applicable
2. Preferred stock converted
□ Applicable√ Not applicable
IV. Preferred stock with voting rights recovered and executed
□ Applicable√ Not applicable
V. Accounting policy taken for preferred stock and reasons
□ Applicable√ Not applicable
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 2013.
II. Resignation and dismissal of directors, supervisors and senior executives
√ Applicable□ Not applicable
||||||
|-|-|-|-|-|
|Name|Title|Type|Date|Reason|
|Zhang Ruili|Chairman|Office leaving|2014-04-08|Resignation due to the work change|
|Zhang Jianmin|Director|Office leaving|2014-04-22|Resignation due to the work change|
|Lv Hang|Chairman|Be elected|2014-04-08|Be elected|
|Li Miao|Director|Be elected|2014-05-15|Be elected|
||Deputy General||||
|Guo Jian||Office leaving|2014-04-08|Resignation due to the work change|
||Manager||||
||Secretary of the||||
|Guo Dongri|Board, Deputy|Office leaving|2014-06-30|Resignation due to personal reason|
||GM||||

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
Consolidated Balance Sheet
2014年6月30日
Prepared by Shenzhen Tellus Holding Co., Ltd In RMB/CNY
|||||
|-|-|-|-|
|Assets|Note VII|||
|Current assets:||||
|Monetary funds|1|5 7,106,710.45|6 9,898,791.56|
|Transactional financial assets||-|-|
|Notes receivable||-|-|
|Accounts receivable|2|4 ,510,326.96|5 ,016,738.78|
|Prepayment|4|1 0,291,564.10|8 ,309,574.73|
|Dividend receivable||-|-|
|Other accounts receivable|3|1 0,256,908.59|8 ,028,356.69|
|Inventories|5|4 3,766,660.19|6 2,826,365.70|
|Non-current asset due in 1 year||-|-|
|Other current assets|6|8 ,572,421.19|1 1,644,102.02|
|Total of current asset||134,504,591.48|1 65,723,929.48|
|Non-current assets:||||
|Financial asset available for sale|7|1 ,391,820.80|1 ,480,168.80|
|Expired investment in possess|8|100,000.00|100,000.00|
|Long-term receivable|9|-|-|
|Long-term equity investment|10|209,715,062.73|201,873,586.75|
|Investment real estate|11|8 6,137,027.37|8 8,422,673.91|
|Fixed asset|12|145,959,235.73|149,968,663.80|
|Construction in process|13|8 5,849,620.32|4 1,642,020.40|
|Engineering goods||-|-|
|Fixed asset disposal||-|-|
|Production biological asset||-|-|
|Intangible assets|14|52,873,743.56|33,255.04|
|R&D expense||-|-|
|Goodwill||-|-|
|Long-term amortizable expenses|15|670,703.75|848,038.96|
|Deferred income tax assets|16|2 4,556,131.41|2 4,566,702.71|
|Other non-current asset|17|-|2 6,339,112.00|
|Total of non-current assets||607,253,345.67|535,274,222.37|
|Total assets||741,757,937.15|700,998,151.85|

 The notes to the Financial Statement are essential parts of the Financial Statements
Consolidated Balance Sheet(Con't)
2014年6月30日
Prepared by Shenzhen Tellus Holding Co., Ltd In RMB/CNY
|||||
|-|-|-|-|
|Liability and owners' euqity|Note VII|Amount at period-end||
|Current liability:||||
|Short-term loans|20|1 82,741,296.00|1 10,969,952.93|
|Transactional financial liability||-|-|
|Notes payable|21|6 ,225,651.90|1 5,920,748.09|
|Accounts payable|22|2 2,062,234.53|2 2,008,010.24|
|Accounts receivable in advance|23|2 ,228,640.04|2 2,087,866.51|
|Wage payable|24|1 2,688,086.44|1 4,408,687.62|
|Taxes payable|25|9 ,175,574.79|1 6,687,262.22|
|Dividend payable|26|-||
|Interest payable||-|-|
|Other account payable|27|1 15,698,361.82|1 07,809,585.66|
|Non-current liability due within 1 year|28|1 2,000,000.00|1 2,000,000.00|
|Other current liability||-|-|
|Total of current liability||3 62,819,845.52|321,892,113.27|
|Non-current liability:||||
|Long-term loans|29|1 25,000,000.00|1 31,000,000.00|
|Bonds payable||-|-|
|Long-term payable|30|1 3,319,681.59|1 3,319,681.59|
|Special accounts payable||-|-|
|Projected liabilities||-|-|
|Deferred income tax liability|16|1 ,102,701.09|1 ,248,087.86|
|Other non-current liability||3 1,211,904.55|2 9,823,013.37|
|Total non-current liability||1 70,634,287.23|1 75,390,782.82|
|Total liability||5 33,454,132.75|497,282,896.09|
|Owners' equity:||||
|Share capital|31|2 20,281,600.00|2 20,281,600.00|
|Capital public reserve|32|8 ,442,270.18|8 ,508,531.18|
|Surplus public reserve|33|2 ,952,586.32|2 ,952,586.32|
|Retained profit|34|-35,010,339.41|- 40,390,760.22|
|Total owner's equity attibutable to parent company||1 96,666,117.09|1 91,351,957.28|
|Minority interests||1 1,637,687.31|1 2,363,298.48|
|Total of owners' equity||208,303,804.40|2 03,715,255.76|
|Total liabilities & owner's equity||7 41,757,937.15|7 00,998,151.85|

（The Notes to the Financial Statements are essential parts of the FinanicalStatements）
Consolidated Profit Statement
Jan.- June 2014
Prepared by Shenzhen Tellus Holding Co., Ltd In RMB/CNY
|||||
|-|-|-|-|
|Items|Note VII|Amount at this period|Amount at last year|
|I. Operation revenue|35|2 28,692,541.86|2 22,087,318.26|
|Less: Operation cost|35|1 95,298,141.59|1 83,087,649.86|
|Business tax and surcharge|36|2 ,463,848.35|2 ,876,878.04|
|Sales expense|37|9 ,182,022.30|9 ,442,375.29|
|Administrative expense|38|1 6,192,019.27|1 7,906,667.35|
|Financial expense|39|8 ,229,163.34|7 ,790,082.78|
|Asset impairment loss|41|35,599.18|100,000.00|
|Plus:Income from change of fair value(loss is listed with"-")||-|-|
|Investment income（loss is listed with"-")|40|7 ,841,475.98|1 ,780,082.57|
|Incl: Investment income from affiliated enterprises and joint venture||7 ,841,475.98|1 ,707,144.32|
|II.Operation profit(loss is listed with"-")||5 ,133,223.81|2,663,747.51|
|Plus:Non-operation income|42|225,251.91|222,561.76|
|Less: Non-operation expenses|43|2,633.01|23,753.00|
|Incl: Loss from disposal of non-current assets|||14,002.00|
|III.Total profit(loss is listed with"-")||5,355,842.71|2,862,556.27|
|Less: Income tax expenses|44|701,033.07|195,375.12|
|IV.Net profit(loss is listed with"-")||4,654,809.64|2 ,667,181.15|
|Net profit attributable to owners' of patrent company||5 ,380,420.81|3 ,746,434.89|
|Minor shareholders' equity||-725,611.17|-1,079,253.74|
|V.Earning per share||||
|(I) Basic earnings per share|45|0 .0244|0 .0170|
|(II) Diluted earnings per share|45|0 .0244|0 .0170|
|VI.Other consolidated income|46|-66,261.00|-248,916.25|
|VII.Total consolidated income||4 ,588,548.64|2 ,418,264.90|
|Total consolidated income attributable to owners of parent company||5 ,314,159.81|3 ,497,518.64|
|Total consolidated income attributable to minority shareholders||-725,611.17|-1,079,253.74|

（The Notes to the Financial Statements are essential parts of the FinanicalStatements）
Consolidated Cash Flow Statement
Jan.- June 2014
Prepared by Shenzhen Tellus Holding Co., Ltd In RMB/CNY
|||||
|-|-|-|-|
|Items|Note VII|Amount at this period|Amount at last year|
|I. Cash flow from operating activities||||
|Cash received from sales of goods and labor service provided||2 53,756,652.24|2 39,638,243.75|
|Taxes surrender received||-|-|
|Other cash received from business activities|47|2 5,759,770.67|5 0,668,321.35|
|Sub-total of cash inflow from business activities||2 79,516,422.91|2 90,306,565.10|
|Cash paid for purchasing of merchandise and services||2 11,397,194.39|1 70,877,477.84|
|Cash paid to/for staff||2 5,369,986.36|2 4,622,802.05|
|Taxes paid||1 6,810,604.28|1 7,252,571.19|
|Other Cash paid for business activities|47|3 0,123,949.84|4 1,255,251.65|
|Subtotal of cash outflow from business activities||2 83,701,734.87|2 54,008,102.73|
|Net cash flow generated from business activities||- 4,185,311.96|3 6,298,462.37|
|II. Cash flow from investment activities||||
|Cash received from investment retrieving||-|8 4,713.03|
|Cash received as investment gains||-|7 2,938.25|
|Net cash received from disposal of fixed, intangible assets andother long-term assets||4 0,740.00|3 2,257,058.00|
|Net cash received from disposal of subsidiaries or other operational units||-|-|
|Other investmenr-related cash received|47|-|-|
|Subtotal of cash inflow due to investment activities||4 0,740.00|3 2,414,709.28|
|Cash paid for construction of fixed assets, intangible assets andother long-term assets||7 0,244,698.22|9 ,185,642.58|
|Cash paid as investment||-|9 ,900,000.00|
|Net cash received from subsidiaries and other opeartional units||-|-|
|Other cash paid for investment activities|47|-|3 84,657.57|
|Subtotal of cash outflow due to investment activitie||7 0,244,698.22|1 9,470,300.15|
|Net cash flow generated from investment||- 70,203,958.22|1 2,944,409.13|
|III. Cash flow generated by financing||||
|Cash received as investment absorption||-|-|
|Including: Cash received as investment from minor shareholders by subsidiary||-|-|
|Cash received as loans||2 26,000,000.00|4 1,600,000.00|
|Other financing-related cash received||-|-|
|Subtotal of cash inflow from financing activities||2 26,000,000.00|4 1,600,000.00|
|Cash paid to debts||1 54,000,000.00|5 9,600,000.00|
|Cash paid as dividend, profit or interests||4 ,916,300.92|6 ,127,599.58|
|Including: Dividend and profit paid by subsidiaries to minor shareholders||-|-|
|Other cash paid for financing activities|47|-|2 0,000.00|
|Subtotal of cash outflow from financing activities||1 58,916,300.92|6 5,747,599.58|
|Net cash flow generated by financing activities||6 7,083,699.08|- 24,147,599.58|
|IV. Influence of exchange rate alternation on cash and cash equivalents||7 03.07|- 2,190.81|
|V. Net increase of cash and cash equivalents||- 7,304,868.03|2 5,093,081.11|
|Plus: Balance of cash and cash equivalents at the beginning of term||6 3,166,448.10|5 5,145,531.39|
|VI. Balance of cash and cash equivalents at the end of term||5 5,861,580.07|8 0,238,612.50|

（The Notes to the Financial Statements are essential parts of the FinanicalStatements）
Consolidated Statement on Changes of Owners' Equity
Semi-annual of 2014
Prepared by Shenzhen Tellus Holding Co., Ltd In RMB/CNY
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Current amount||||||Amount of last year||||||
||Owners' equity attibutable to parent company||||Minor shareholders'equity|Total owners' equity|Owners' equity attibutable to parent company||||Minor shareholders'equity|Total owners' equity|
||Share capital|Capital reserves|Surplus reserves|Retained profit|||Share capital|Capital reserves|Surplus reserves|Retained profit|||
|I.Balance at the end of last year|220,281,600.00|8 ,508,531.18|2 ,952,586.32|- 40,390,760.22|12,363,298.48|203,715,255.76|220,281,600.00|8,732,694.55|2,952,586.32|- 47,291,479.26|1 6,386,114.63|201,061,516.24|
|Plus:Change of accounting policy|-|-|-|-|-|-|-|-|-|-|-|-|
|Correcting of previous errors|-|-|-|-|-|-|-|-|-|-|-|-|
|II.Balance at the beginning ofcurrent year|220,281,600.00|8 ,508,531.18|2 ,952,586.32|- 40,390,760.22|12,363,298.48|203,715,255.76|220,281,600.00|8,732,694.55|2,952,586.32|- 47,291,479.26|1 6,386,114.63|201,061,516.24|
|III.Changed in current year（Lossis listed with"-"）|-|- 66,261.00|-|5,380,420.81|-725,611.17|4,588,548.64|-|-248,916.25|-|3,746,434.89|- 1,079,253.74|2,418,264.90|
|(I)Net profit|-|-|-|5,380,420.81|-725,611.17|4 ,654,809.64|-|-|-|3 ,746,434.89|- 1,079,253.74|2,667,181.15|
|(II)Other integrated income|-|- 66,261.00|-|-|-|-66,261.00|-|-248,916.25|-|-|-|-248,916.25|
|Total of (I) and (II)|-|- 66,261.00|-|5,380,420.81|-725,611.17|4 ,588,548.64|-|-248,916.25|-|3 ,746,434.89|- 1,079,253.74|2,418,264.90|
|(III)Shareholder input and withdraw ofshare capital|-|-|-|-|-|-|-|-|-|-|-|-|
|1,Capital input by shareholders|-|-|-|-|-|-|-|-|-|-|-|-|
|2.Share payment accounted intoshareholders' equity|-|-|-|-|-|-|-|-|-|-|-|-|
|3.Others|-|-|-|-|-|-|-|-|-|-|-|-|
|(IV)Profit distribution|-|-|-|-|-|-|-|-|-|-|-|-|
|1.Providing of surplus reserves|-|-|-|-|-|-|-|-|-|-|-|-|
|2.Common risk provision|-|-|-|-|-|-|-|-|-|-|-|-|
|3.Dividend to shareholders|-|-|-|-|-|-|-|-|-|-|-|-|
|4. Others|-|-|-|-|-|-|-|-|-|-|-|-|
|(V)Internal settlement of shareholders'equity|-|-|-|-|-|-|-|-|-|-|-|-|
|1. Capital reserves transferred to sharecapital|-|-|-|-|-|-|-|-|-|-|-|-|
|2. Surplus reserves transferred to sharecapital|-|-|-|-|-|-|-|-|-|-|-|-|
|3. Making up losses by surplusreserves|-|-|-|-|-|-|-|-|-|-|-|-|
|4. Others|-|-|-|-|-|-|-||-|-|-|-|
|(VI) Reasonable reserve|-|-|-|-|-|-|-|-|-|-|-|-|
|1. Withdraw in this period|-|-|-|-|-|-|-|-|-|-|-|-|
|2.Used in this period|-|-|-|-|-|-|-|-|-|-|-|-|
|IV.Balance at the end of this year|220,281,600.00|8,442,270.18|2 ,952,586.32|-35,010,339.41|1 1,637,687.31|2 08,303,804.40|220,281,600.00|8,483,778.30|2,952,586.32|-43,545,044.37|15,306,860.89|203,479,781.14|

·
Balance Sheet
2014年6月30日
Prepared by Shenzhen Tellus Holding Co., Ltd In RMB/CNY
|||||
|-|-|-|-|
|Assets|Note XIII|Balance at period-end|Balance at year-begin|
|Current assets:||||
|Monetary capital||1 2,570,634.30|3 0,209,143.04|
|Transactional financial assets||-|-|
|Notes receivable||-|-|
|Accounts receivable|1|-|-|
|Prepayment||88,050.00|21,000.00|
|Dividend receivable||-|-|
|Other receivable|2|1 14,936,595.70|3 6,330,120.01|
|Inventory||-|-|
|Non-current assets due in 1 year||-|-|
|Other current assets||-|-|
|Total of current assets||1 27,595,280.00|66,560,263.05|
|Non-current assets||||
|Financial assets available for sale||1 ,391,820.80|1 ,480,168.80|
|Investment held-to-maturity||-|-|
|Long-term recivable||-|-|
|Long-term share equity investment|3|4 33,518,935.63|4 26,777,549.25|
|Investment real estate||5 4,436,493.04|5 5,919,100.96|
|Fixed assts||1 8,380,311.08|1 8,675,995.34|
|Construction in process||251,308.70|251,308.70|
|Engineering goods||-|-|
|Disposal of fixed assets||-|-|
|Production biological assets||-|-|
|Intangible assets||285,877.72|33,255.04|
|R&D expenses||-|-|
|Goodwill||-|-|
|Long-term amortizable expenses||44,813.08|65,496.04|
|Deferred income tax assets||1 4,005,609.54|1 4,025,080.64|
|Other non-current assets||-|-|
|Total non-current asset||5 22,315,169.59|5 17,227,954.77|
|Total assets||6 49,910,449.59|5 83,788,217.82|

（The Notes to the Financial Statements are essential parts of the FinanicalStatements）
Balance sheet(Con't)
2014年6月30日
Prepared by Shenzhen Tellus Holding Co., Ltd In RMB/CNY
|||||
|-|-|-|-|
|Liabilities & owners' equity|Note|Blance at period-end|Balance at year-begin|
|Current liability:||||
|Short-term loans||1 27,544,160.00|6 7,544,160.00|
|Transactional financial liability||-|-|
|Notes payable||-|-|
|Accounts payable||-|-|
|Accounts received in advance||-|-|
|Wage payable||4 ,004,995.60|4 ,145,439.65|
|Taxes payable||408,664.50|403,514.95|
|Dividend payable||-|-|
|Interest payable||-|-|
|Other account payable||2 94,150,068.11|2 87,687,112.90|
|Non-current liability due within 1 year||6 ,000,000.00|6 ,000,000.00|
|Other current liability||-|-|
|Total current liability||4 32,107,888.21|365,780,227.50|
|Non-current liability:||||
|Long-term loans||9 2,500,000.00|9 5,500,000.00|
|Bonds payable||-|-|
|Long-term payable||-|-|
|Special accounts payable||-|-|
|Projected liabilities||-|-|
|Deferred income tax liability||256,554.88|278,641.88|
|Other non-current liability||-|-|
|Total non-current liability||92,756,554.88|95,778,641.88|
|Total liability||524,864,443.09|4 61,558,869.38|
|Owners' equity:||||
|Share capital||2 20,281,600.00|2 20,281,600.00|
|Capital public reserve||5 ,248,846.90|5 ,315,107.90|
|Surplus public reserve||2 ,952,586.32|2 ,952,586.32|
|Retained profit||- 103,437,026.72|- 106,319,945.78|
|Total owner's equity attributable to parent company||1 25,046,006.50|1 22,229,348.44|
|Minority interests||-|-|
|Total of owners' equity||1 25,046,006.50|1 22,229,348.44|
|Total liabilities&owner's equity||6 49,910,449.59|5 83,788,217.82|

（The Notes to the Financial Statements are essential parts of the FinanicalStatements）
Profit Statement
Jan. - June 2014
Prepared by Shenzhen Tellus Holding Co., Ltd In RMB/CNY
|||||
|-|-|-|-|
|Items|Note XIII|Amount at this period|Amount at last period|
|I. Total operating revenue|4|9 ,684,900.12|8 ,845,953.02|
|Less: Operating cost|4|1 ,820,193.72|1 ,891,907.91|
|Operating tax and extras||542,354.41|495,373.36|
|Sales expense||-|-|
|Administration expenses||6 ,381,195.40|7 ,274,181.62|
|Financial expense||4 ,808,665.49|4 ,523,671.97|
|Losses of devaluation of asset||-|-|
|Plus:Changing income of fair value(Loss is listed with"-")||-|-|
|Investment income(Loss is listed with"-")|5|6 ,741,386.38|1 ,304,595.35|
|Incl:Investment income on affiliated enterprises and joint venture||6 ,741,386.38|1 ,231,657.10|
|II.Operating profit(Loss if listed with"-")||2,873,877.48|- 4,034,586.49|
|Plus:Non-operating income||28,512.68||
|Less:Non-operating expenses||-|-|
|Incl:Loss from the disposal of non-current assets||-|-|
|III.Total profit(Loss is listed with"-")||2,902,390.16|- 4,034,586.49|
|Less: Income tax expense||19,471.10|-|
|IV.Net profit(Loss is listed with"-")||2,882,919.06|- 4,034,586.49|
|Net profit attributable to owner's of parent company||2 ,882,919.06|- 4,034,586.49|
|Minority shareholders' gains and losses||-|-|
|V.Earnings per share||||
|i.Basic earnings per share||0.0131|- 0.0183|
|ii.Diluted earnings per share||0.0131|- 0.0183|
|VI.Other integrated income||-66,261.00|-248,916.25|
|VII. Total of intergrated income||2 ,816,658.06|- 4,283,502.74|
|Total amount of owners' integrated income attributable to parent co.,||2 ,816,658.06|- 4,283,502.74|
|Total amount of integrated income attributable to minority shareholders||-|-|

（The Notes to the Financial Statements are essential parts of the FinanicalStatements）
Cash Flow Statement
Jan. - June 2014
Prepared by Shenzhen Tellus Holding Co., Ltd In RMB/CNY
|||||
|-|-|-|-|
|Items|Note|Amount at this period|Amount at last period|
|I.Cash flows arising from operating activities||||
|Cash received from selling goods and provising labor services||1 0,855,355.64|1 0,165,621.62|
|Write-back of tax received||-|-|
|Other cash received concerning operating activities||1 37,551,446.17|1 01,880,965.23|
|Subtotal of cash inflow arising from operating activities||1 48,406,801.81|1 12,046,586.85|
|Cash paid to/for purchasing goods and receiving labor services||-|-|
|Cash paid to/for staff and workers||5 ,844,213.54|6 ,037,588.81|
|Taxes paid||1 ,314,378.34|1 ,285,904.17|
|Other cash paid concerning operating activities||2 10,948,195.60|7 2,033,784.75|
|Subtotal of cash outflow arising from operating activities||2 18,106,787.48|7 9,357,277.73|
|Net cash flows arising from operating activities||- 69,699,985.67|3 2,689,309.12|
|II.Cash flows arising from investment activities||||
|Cash received from recovering investment||-|-|
|Cash received from investment income||-|7 2,938.25|
|Net cash received from disposal of fixed, intangible andother long-term assets||3 9,890.00|-|
|Net cash received from disposal of subsidiaries and other units||-|-|
|Other cash received concerning investing activities||-|-|
|Subtotal of cash inflow from investing activities||3 9,890.00|7 2,938.25|
|Net cash paid for purchasing fixed, intangible and otherlong-term assets||5 39,007.00|5 1,048.00|
|Cash paid for investment||-|9 ,900,000.00|
|Net cash received from subsidiaries and other units||-|-|
|Other cash paid concerning investing activities||-|-|
|Subtotal of cash outflow from investing activities||5 39,007.00|9 ,951,048.00|
|Net cash flows arising from investing activities||- 499,117.00|- 9,878,109.75|
|III.Cash flows arising from financing activities||||
|Cash received from absorbing investment||-|-|
|Incl:Cash received from absorbing minority shareholders||-|-|
|Cash received from loan||1 75,000,000.00|-|
|Other cash received concerning financing activities||-|-|
|Subtotal of cash inflow from financing activities||1 75,000,000.00|-|
|Cash paid for settling debts||1 18,000,000.00|3 ,000,000.00|
|Cash paid for dividend and profit distributing or interest paying||4 ,439,406.07|2 ,479,252.43|
|Incl:Dividend and profit of minority shareholder paid by subsidiaries||-|-|
|Other cash paid concerning financing activities||-|-|
|Subtotal of cash outflow from financing activities||1 22,439,406.07|5 ,479,252.43|
|Net cash flow arising from financing activities||5 2,560,593.93|- 5,479,252.43|
|IV.Influence on cash due to fluctuation in exchange rate||-|- 81.72|
|V.Net increase of cash and cash equivalents||- 17,638,508.74|1 7,331,865.22|
|Plus:Balance of cash and cash equivalents at the period begin||3 0,209,143.04|1 ,614,187.49|
|VI.Balance of cash and cash equivalents at the period-end||1 2,570,634.30|1 8,946,052.71|

（The Notes to the Financial Statements are essential parts of the FinanicalStatements）
Statement on Changes of Owners' Equity
Semi-annual of 2014
Prepared by Shenzhen Tellus Holding Co., Ltd In RMB/CNY
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Items|Current amount||||||Amount of last year||||||
||Owners' equity attributable to parent company||||Minority interest|Total owners' equity|Owners' equity attributable to parent company||||Minority interest|Total owners' equity|
||Share capital|Capital reserve|Surplus reserves|Retained profit|||Share capital|Capital reserve|Surplus reserves|Retained profit|||
|I.Balance at the end of last year|220,281,600.00|5 ,315,107.90|2,952,586.32|-106,319,945.78|-|122,229,348.44|220,281,600.00|5 ,539,271.27|2,952,586.32|-97,009,267.91|-|1 31,764,189.68|
|Plus:Changes of accounting policy|-|-|-|-|-|-|-|-|-|-|-|-|
|Error correction of the last period|-|-|-|-|-|-|-|-|-|-|-|-|
|II.Balance at this year-begin|220,281,600.00|5 ,315,107.90|2,952,586.32|-106,319,945.78|-|122,229,348.44|220,281,600.00|5 ,539,271.27|2,952,586.32|-97,009,267.91|-|1 31,764,189.68|
|III.Increase/decrease in thisyear(Decrease is listed with"-")|-|- 66,261.00|-|2,882,919.06|-|2 ,816,658.06|-|-248,916.25|-|- 4,034,586.49|-|-4,283,502.74|
|（I)Net profit|-|-|-|2,882,919.06|-|2 ,882,919.06|-|-|-|-4,034,586.49|-|- 4,034,586.49|
|（II)Other integrated income|-|-66,261.00|-|-|-|-66,261.00|-|-248,916.25|-|-|-|-248,916.25|
|Subtotal of (I) and (II)|-|-66,261.00|-|2,882,919.06|-|2 ,816,658.06|-|-248,916.25|-|-4,034,586.49|-|- 4,283,502.74|
|(III)Owners' devoted and decrease capital|-|-|-|-|-|-|-|-|-|-|-|-|
|1.Owners' devoted capital|-|-|-|-|-|-|-|-|-|-|-|-|
|2.Amount calculated intoowners' equity paid in shares|-|-|-|-|-|-|-|-|-|-|-|-|
|3.Other|-|-|-|-|-|-|-|-|-|-|-|-|
|（IV)Profit distribution|-|-|-|-|-|-|-|-|-|-|-|-|
|1.Withdrawal of surplus reserves|-|-|-|-|-|-|-|-|-|-|-|-|
|2Withdrawal of general risk provision|-|-|-|-|-|-|-|-|-|-|-|-|
|3.Distribution for owners(shareholders)|-|-|-|-|-|-|-|-|-|-|-|-|
|4.Other|-|-|-|-|-|-|-|-|-|-|-|-|
|(V)Carrying forward internal owners' equity|-|-|-|-|-|-|-|-|-|-|-|-|
|1.Capital reserves converted to capital(share capital)|-|-|-|-|-|-|-|-|-|-|-|-|
|2.Surplus reserves converted to capital(share capital)|-|-|-|-|-|-|-|-|-|-|-|-|
|3Remedying loss with profit surplus|-|-|-|-|-|-|-|-|-|-|-|-|
|4.Other|-|-|-|-|-|-|-|-|-|-|-|-|
|（VI）Special inventory|-|-|-|-|-|-|-|-|-|-|-|-|
|1.Withdrawal in this period|-|-|-|-|-|-|-|-|-|-|-|-|
|2.Used in this period|-|-|-|-|-|-|-|-|-|-|-|-|
|IV.Balance at the end of this year|220,281,600.00|5,248,846.90|2,952,586.32|-103,437,026.72|-|125,046,006.50|220,281,600.00|5,290,355.02|2,952,586.32|-101,043,854.40|-|127,480,686.94|

SHENZHEN TELLUS HOLDING CO., LTD.
Notes to Financial Statements
Ended as 30 June 2014 Unit: RMB Currency: CNY I. Company profiles
1. Historical development of the Company
Shenzhen Tellus Holding Co., Ltd. (hereinafter referred to as―theCompany‖ or―Company‖), former Shenzhen Machinery Industry Co., Ltd., was founded on 10 November 1986. Shenzhen Machinery Industry Co., Ltd changed to Shenzhen Tellus Machinery Co. Ltd. dated 2 January 1992. Being approved by the Shenzhen MunicipalPeople’s Government―Shen Fu Ban Fu (1992) No.:1850‖, Shenzhen Tellus Machinery Co. Ltd. reorganized as a public limited company with name changed as Shenzhen Tellus Machinery Co. Ltd. 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. Business License for Legal Person Numbered of the Company: 440301103017750. Headquarter of the Company locates in 3/F, Tellus Building, Shuibei 2nd Road, Luohu District, Shenzhen, Guangdong Province.
The Company and its subsidiaries (together as―theGroup‖) mainly engaged in the automobile overall services, including automobile retailing, inspection and maintenance, production of inspection equipment, property lease and property management service, etc., included in the industry of wholesale business of energy, materials and mechanical-electronic instruments.
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 establishment of the Company:
(1) Bonus shares in 1993
The Company held the resolution of annual shareholders' general meeting of 1993, distribute dividend of 0.5 Yuan in cash for every 10 shares and 2 more bonus shares to all shareholders based on theCompany’s total share capital of 166,880,000 shares on 31st, Dec., 1993, and theCompany’s total share capital changed to 200,256,000 shares.
On 22nd April 1994, Shenzhen Securities Regulatory Office approved the stock dividend scheme of the Company. After the implementation of the stock dividend program, the ownership structure of the Company became as follows:
Type Amount (Share) Ratio(%)
State-owned corporate shares 145,080,000 72.45 Domestic public shares 31,176,000 15.57 RMB special stock (B-Share) 24,000,000 11.98 Total 200,256,000 100.00 (2) Bonus shares and capitalization in 1994
On 28th May 1995, the shareholders' general meeting of the Group approved the bonus share and capitalization program proposed by the board of directors. The Company distributes 0.5 bonus shares to every 10 shares with 0.5 more shares increased for 0.5 Yuan dividend in cash to all shareholders based on theCompany’s total share capital of 200,256,000 shares on 31st, Dec., 1994, and theCompany’s total share capital changed to 220,281,600 shares.
Equity structure of the Company after bonus scheme implemented:
Type Amount (Share) Ratio(%)
State-owned corporate shares 159,588,000 72.45 Domestic public shares 34,293,600 15.57 RMB special stock (B-Share) 26,400,000 11.98 Total 220,281,600 100.00 (3) The changes of controlling shareholders in 1997
On 31st March 1997, in accordance with the approval of―Shenfuhan[1997]No.19‖ and―Zhengjianhan[1997]No.5‖, the People's Government of SZ Municipality and China Securities Regulatory Commission agreed Shenzhen Investment and Management Company to transfer its 159,588,000 shares of State shares to―Shenzhen Special Development Group Co.,Ltd‖ (hereinafter referred to as―SDG‖), which took proportion of72.45% in the total share capital.
(4) Reform of non-tradable shares in 2006
In December 2005, Shenzhen State-owned Assets Supervision and Administration Commission approved the non-tradable shares reform program of Shenzhen Tellus (Group) Ltd. which reported by theCompany’s non-tradable shareholders - Shenzhen Special Development Group Co., Ltd.
On 4th January 2006, SDG paid 13,717,440 shares of stock to the shareholders of A shares in circulation as the consideration of the non-tradable shares reform, and SDG held66.22% of theCompany’s total share capital after the non-tradable shares reform. After the implementation of the non-tradable shares reform program, the ownership structure of the company became as follows:
Type Amount (Share) Ratio(%)
State-owned corporate shares 145,870,560 66.22
Type Amount (Share) Ratio(%)
Domestic public shares 48,011,040 21.80 RMB special stock (B-Share) 26,400,000 11.98 Total 220,281,600 100.00 As of 30 June 2014, the Company has issued 220, 281,600 shares accumulatively, refer to Note VII. 31for more details The business scope of the Company includes: invest and set up industries (specific projects to be reported separately); Domestic commerce, Materials supply and marketing (excluding the franchise, special control and monopoly of goods); Leasing and management of owned property. Operate the self-manufactured products of the Company and the affiliated enterprises, the self-use production materials, the metalworking machines, and the import and export business of universal parts, therein to, the import and export business is handled in accordance with Shen Mao Guan Zheng Zi No. 098 foreign trade accreditation certificate.
The parent company of the Group is Shenzhen Special Development Group Co., Ltd., and the ultimate controller is Shenzhen State-owned Assets Supervision and Administration Commission.
This financial statement is approved for disclosure by resolution from the Board dated 7 August 2014.
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 and the―Accounting Standards for Business Enterprises– BasicStandards‖ and 38 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‖ (2010 Revision)
In accordance with the relevant regulations of Accounting Standards for Business Enterprises, the financial accounting of the Group is based on the accrual basis. Except for the financial instruments, this financial statement takes the historical cost as the measuring base. If the assets decrease in value, count and withdraw the corresponding impairment in accordance with the relevant provisions.
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 and the Group on 30th, June, 2014, and the business performance and cash flow in the first half year 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.
IV. Main accounting policy and estimate
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. 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.
3. The accounting treatment of business merger
Business merger refers to the transactions or matters that two or more than two individual enterprises form a reporting entity. 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. As for the business merger achieved in stages by multiple exchanges and transactions, the stock rights of the acquiree held before the acquisition date should be re-measured in accordance with the stockrights’ fair value on the acquisition date in the consolidated financial statement of the Group, the balance between the fair value and its book value is reckoned in the current investment income on the acquisition date, meanwhile, transfer other consolidated income related to the stock rights of the acquiree held before the acquisition date to the current investment income, and the merger costs are the sum of the fair values of the stock rights of the acquiree held before the acquisition date and the stock rights of the acquiree increased and held on 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.
4 Preparing method of consolidated financial statements
(1) Determinate principles of range for consolidation financial statement
Consolidation range for consolidation financial statement should be recognized based on the control. Controlling means the Company has the ability to decide the financial and operation policy of the invested unit and can obtain profit from theunit’s business operation. Range of consolidation including the Company and all subsidiaries. Subsidiary means the enterprise or subject controlled by the Company.
(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. Transfer the other consolidated incomes related to the equity investment of the original sub companies to the current investment income when losing the control rights. 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 10―long-term equityinvestment‖ or the Note IV 7―financialinstruments‖ for details
5. Determination criteria of cash and cash equivalent
Cash and cash equivalent of the Group including stock cash, deposits available for payment at any time and the investment held by the Group 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.
6. Foreign Currency Operations
(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.
Foreign currency business is accounted with amount denominated in RMB as translated at the spot exchange rate as of the occurrence day of such business. The occurred foreign currency exchange business or transactions with foreign currency exchange involved shall be translated at the effective exchange rate (i.e. exchange rate adopted by banks for such
transactions) adopted by such transaction.
(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.
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 and included in the capital reserves.
7. Financial instruments
(1) Method of determination of the fair value for financial assets and financial liabilities
The fair value refers to the amount, at which both willing parties to a fair transaction who are familiar with the condition exchange their assets or clear off their debts under fair conditions. 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
By way of buying and selling the financial assets in a regular way, recognition and derecognition are carried out according to the accounts on the transaction day. Financial assets are divided into financial assets at fair value through profit or loss, held-to-maturity investments, loans, accounts receivable and available for-sale financial assets when they are initially recognized. Financial assets and financial liabilities are initially recognized 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 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.
➁ Held-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.
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 and charged to capital reserves, 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.
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.
➁ Impairment 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. In particular,―severedecline‖ refers to accumulative decline in fair value is more than20%.―Non-temporarydecline‖ refers to the fair value decreased continuously for more than 12 months.
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: (cid:1) 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.
(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.
(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) 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.
(8) Equity instruments
Equity instruments are any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. For equity instruments, the price received during the issue shall be added toshareholder’s equity after reducing the transaction fees.
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.
8. 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
Divide the portfolio on the age of account receivable as a credit risk
Age portfolio
characteristics
B. Depreciation method for bad debt provision recognized by credit risk characteristics portfolio
At the time of impairment testing, the bad debt amount will recognized by the estimated losses, according to historical losses experience, which has been occurred in account receivable portfolio, and current economic status as well as portfolio structure and similar credit risk characteristics (debt paying capability for debtor based on terms of the contract).
Depreciation method of bad debt provision in different portfolio:
Item Depreciation method
Item Depreciation method
Age portfolio Accrual bad debt provision by aging of accounts
a. Depreciation method of bad debt provision by aging of accounts in portfolio
Age Accrual ratio of account receivable(%) Accrual ratio of other 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 50③Accounts 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.
9. Inventories
(1)Classification of inventories
Inventory including raw materials, stock commodity and low value consumables etc.
(2) Pricing for inventories delivered and obtained
Purchase and storage of vary inventories are value at actual costs; delivered inventory value on weighted average method while low value consumables and wrappage value on gradation amortization method.
(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.
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.
10. Long-term equity investment
(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 of the party being absorbed at the date of combination. For a long-term equity investment acquired through business combination not involving enterprises under common control, the business combination cost is the aggregate of assets paid, liabilities incurred or undertook and fair value of equity securities issued by the acquirer. Agent fees incurred by the 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. Transaction cost incurred for issuing equity securities or debt securities, which are used as consideration for the combination, are included in the initial recognition amount of the equity securities or debt securities.
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 recognized based on the purchase cost actually paid by the Group 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 Group, 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.
(2) Subsequent measurement and profit or loss recognition
Cost method is used to account for a long-term equity investment where the investor does not have joint control or significant influence over the investee, and the investment is not quoted in an active market and its fair value cannot be reliably measured. Long-term equity investments with joint control or significant influence on the investee are accounted for using equity method. Long-term equity investment without control or joint control or significant influence with a fair value which can be reliably measured 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.
In addition, long-term equity investments with control on the investee are accounted for using cost method and record in theCompany’s financial statements.
① Long-term equity investments accounted for using the cost method
Under the cost method, a long-term equity investment is measured at its initial investment cost. Except receiving the actual consideration paid for the investment or the declared but not yet distributed cash dividends or profits which is included in the consideration, investment gains for the period is recognized as the cash dividends or profits 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 or loss represents theGroup’s share of the net profits or losses made by the investee for the current period. The Group shall recognize 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 conformity with the accounting policies and accounting periods of the Group. The unrealized gain or loss from internal transactions entered into between the Group and its associated enterprises and joint ventures is set off according to the shareholding attributable to the Group and accounted for as investment income and loss based such basis. However, the unrealized gain or loss from internal transactions entered into between the Group and its investee is not set up if belonging to impairment loss from assets transferred according to regulations such as―Accounting Standards for Business Enterprises No. 8―Assetsimpairment‖. In respect of the other consolidated income of investees, the carrying amount of long-term equity investments is accordingly adjusted and recognized as other consolidated income and included in the capital reserves.
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 theowners’ 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.4
(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. Where the equity method is adopted, other comprehensive income attributable to the long term equity investments previously included inshareholders’ equity shall be transferred to through profit or loss in the current period on a pro-rata basis. The remaining equity shall be recognized as the long-term equity investments or other relevant financial assets based on the carrying amount and subsequently measured in accordance with the accounting policies of the foresaid long-term equity investments or financial assets. The retrospective adjustment shall be made in accordance with the relevant provisions if the remaining equity is accounted for using the equity method instead of the cost method.
(3) Recognition of having joint control or significant influence over the investee
The term―control‖ means that the Group has the power to decide anenterprise’s financial and operating policy, pursuant to which, the Group can get the power to obtain benefits from its operating activities. Joint
control is the contractually agreed sharing of control over an economic activity, which only exists when relevant and important financial affairs and management decisions related to such economic activity require sharing of control by investors who unanimously agree upon. Significant influence is the power to participate in the financial and operating policy decisions of an enterprise, but to fail to control or joint control the formulation of such policies together with other parties. In determining whether there is control or significance influence over the investee, potential voting right factors (such as the convertible corporate bonds for the period and the exercisable stock warrants for the period of the investee and other invested units held) were taken into account.
(4) Impairment test method and impairment provision
The Group assesses at each balance sheet date whether there is any indication that any long-term equity investments may be impaired. If there is any evidence indicating that an asset may be impaired, recoverable amount shall be estimated for the individual asset. If the recoverable amount of an asset is less than its carrying amount, the reduction is recognized as an impairment loss and charged to profit or loss for the current period. A provision for impairment loss of the asset is recognized accordingly.
An impairment loss recognized on long-term equity investments shall not be reversed in a subsequent period.
11. 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.
Investment real estate is measured according to the initial cost; the Company adopts the cost model to have follow-up measurements of the investment real estate. In which the depreciation method and impairment provision recognition of a building shares the same method with fixedassets’ calculation, the amortizing method of land use right and impairment provision recognition shares the same method with intangibleassets’ calculation.
Impairment test method and accrual of depreciation reserves for the investment real estate please found in―17.impairment of non-current and non-financialassets‖ in Note IV.
At the time of investment real estate disposed, or permanently out of use and unable to obtained economic benefits from disposal, the investment real estate shall be de-recognized. The amount after deducted book value and relevant taxes from income from disposal of real estate sold, transfer, scrap or derogate, shall reckoned into current gains/losses.
12. 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.
(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―17. 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.
13. 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―17.impairment of non-current/non-financialassets‖ in Note IV.
14. 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.
15. 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 an infinite useful life shall be averagely amortized in phases using the straight-line method over its expected useful life when the asset is available for use. Intangible assets with indefinite useful life are not amortized.
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) 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.17―Impairment of non-current non-monetary financialasset‖.
16. 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. 17. Impairment of non-current non-monetary financial asset
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.
An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect of the restorable value.
18. 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.
19. 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.
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|(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|

20. 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.
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.
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.
21. 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
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.
22. 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 group 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 group 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.
23. Assets held for sale
If the group has made decision regarding dealing with a certain non-current assets, and assignees signed a revocable transfer agreement, and the transfer is likely to be completed within one year, the non-current assets shall be calculated as non-current assets held for sale which shall be without depreciation or amortization. It eventually is accounted as the lower net amount of the book value and fair value minus the disposal expenses. Non-current assets held for sale include individual assets and disposal group. If the disposal group is a group of assets, and goodwill acquired in a business combination is allocated to the group of assets in accordance with the " Accounting Standards for Business Enterprise No. 8 -- Impairment of Assets", or the disposal group is a business of the asset group, the disposal group shall comprises goodwill of enterprise merger.
An asset or disposal group was classified as held for sale, but then no longer meet the recognition conditions of non-current assets held for sale, the group will set it free from held for sale, and calculate it in accordance with the lower amount in the following two items: (1) book value before being designated as held for sale, referring amount after depreciation, amortization or value-deduction adjustment confirmed in accordance with the assumption that in the absence of being classified as held for sale; (2) recoverable amount on the point of stop holding for sale.
24. Employee compensation
The employee benefits payable is recognized as a liability by the Group when they are providing services in the accounting period.
The group participates in the workers' social security system set up by government agencies, including the basic old-age insurance, medical insurance, housing provident fund and other social security system, in accordance with the provisions. The corresponding expenditures shall be included in the relevant asset costs or profits and losses of the current period.
If we end relationship with staff prior to the contract expires, or in order to encourage staff to accept voluntarily salary-deduction thus we offer compensation, if the group has formulated a formal plan on the cancellation of labor relationship or voluntary layoff proposal which will be implemented, at the same time if the groupcan’t unilaterally withdraw the plan on the cancellation of labor relationship or the layoff proposal, expected liability arising from compensation given to staff we terminate relationship with, shall be included in the current profits and losses.
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 25. Changes of major accounting policies and accounting estimation
(1) Changes of accounting policy
No accounting policy changed in reporting period
(2) Changes of accounting estimate
No accounting estimate changed in reporting period
26. Error correction of previous accounting
No error correction of previous accounting needs to disclosed in reporting period
27. Major accounting judgment and estimate
The group 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 group'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 group 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 group 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 group 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 group 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) Impairment provision of non-financial non-current assets
The group 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.
(4) Depreciation and amortization
For the investment real estate, fixed assets and intangible assets, the group takes a straight-line depreciation and amortization within service life in consideration of its residual value. The group 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.
(5) The deferred income tax assets
Within the limits that it is very likely to have sufficient taxable profits to offset losses, the group 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. (6) 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.
(7) Accrual liabilities
The group 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 group, the group 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 group 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 2014, except Shenzhen New Yongtong Dongxiao Vehicle Inspection Co., Ltd., which has taxed on levy rate.
VI. Enterprise consolidation and consolidated financial statements
1. Subsidiary
(1) Subsidiary obtained by establishment or investment
In ten thousand Yuan Actual
Balance of other items Registration Registered Organization investment
Subsidiary
Type
place
Business nature
capital
Business scope Business type Corporate materially forming net code dated 30 June
investment to subsidiary 2014
Shenzhen Tellus New Yongtong
Automobile Development Co. Ltd
Inspection and maintenance
Limited liability Huang
Wholly-owned Shenzhen Service industry 3290 of auto vehicle, property 192171903 5767 -- company Peibo
management, house lease
Shenzhen SD Tellus Property
Limited liability Fang
Management Co. Ltd
Wholly-owned Shenzhen Service industry 705 Property management 192185088 502 -- company Zhidong
Shenzhen SD Tellus Real Estate Co.
Ltd
Domestic business, material
Limited liability Fang
Wholly-owned Shenzhen Manufacture 3115 supply industry, self-owned 192195470 3115 -- company Zhidong
property leasing
Shenzhen Tellus Real Estate Exchange
Co. Ltd
Agency, broker of real Limited liability Fang
Wholly-owned Shenzhen Service industry 200 192282945 200 -- estate exchange company Zhidong
Shenzhen New Yongtong Automobile
Inspection Equipment Co. Ltd
Production of inspection
equipment for auto Limited liability Huang
Holding Shenzhen Service industry 1961 715275892 1000 -- vehicles, self-owned company Peibo
property leasing
Shenzhen Dongchang Yongtong Motor Indirect Limited liability
Shenzhen Service industry 150 Inspection of auto vehicle Li Jinlong 775581736 143 -- Vehicle Detection Co., Ltd. holding company
Shenzhen New Yongtong Dongxiao Comprehensive inspection
Indirect Limited liability
Vehicle Inspection Co., Ltd. Shenzhen Service industry 150 on road transportation Li Jinlong 775581744 143 -- holding company
vehicle
ShenzhenBao’an Shiquan Industrial Indirect Industrial, domestic
Limited liability Fang
Co., Ltd wholly-owned Shenzhen Commerce 200 commerce and material 192474111 150 -- company Zhidong
subsidiary supply& sales industry
(Continued)
Holding proportion Voting right Statements combined Minority Amount in minority interest used for writing down Not Subsidiary
(%) proportion(%) or not interest minority gain and loss
e Yes
Shenzhen Tellus New Yongtong Automobile
100 100 -- --
Development Co. Ltd
Yes
Shenzhen SD Tellus Property Management Co. Ltd 100 100 -- --
Yes
Shenzhen SD Tellus Real Estate Co. Ltd 100 100 -- --
Yes
Shenzhen Tellus Real Estate Exchange Co. Ltd 100 100 -- --
Yes
Shenzhen New Yongtong Automobile Inspection
51 51 94 --
Equipment Co. Ltd
Yes
Shenzhen Dongchang Yongtong Motor Vehicle
95 95 -18 --
Detection Co., Ltd.
Yes
Shenzhen New Yongtong Dongxiao Vehicle
95 95 -8 --
Inspection Co., Ltd.
Yes
ShenzhenBao’an Shiquan Industrial Co., Ltd 100 100 -- --
(2) Subsidiaries acquired by business combination under the common control
In ten thousand Yuan Balance of other Actual items materially Type of Registered Registered Organization
Name of subsidiary
subsidiary place
Business nature
Business scope Business type Corporate investment at forming net capital code
year-end investment to subsidiary Shenzhen Automobile Self-owned
Industry and Trading
property leasing, Limited liability
Company Wholly-owned Shenzhen Commerce 5896 Ren Yongjian 192194881 12625 -- automobile and company
accessories selling
Automobile
Shenzhen SD Huari
Automobile Enterprise Co.
maintenance& Limited liability
Limited Holding Shenzhen Service industry USD500 Lv Hang 618830081 1922 -- production and company
sales of accessory
Shenzhen Zhongtian
Industrial Co. Ltd
Limited liability
Wholly-owned Shenzhen Service industry 725 Property leasing Fang Zhidong 192182485 1071 -- company
Shenzhen Huari Toyota Automobile Co. Automobile Limited liability
Holding Shenzhen Commerce 200 Lv Hang 19237652X 181 -- Ltd selling company
Shenzhen Huari Anxin Automobile Indirect Automobile Limited liability
Shenzhen Service industry 150 Li Jinlong 781385280 150 -- Inspection Ltd holding inspection company
Motor vehicles
Shenzhen Automotive Industry Supply Indirect and parts, Limited liability
Shenzhen Service industry 1111 Liang Wenjun 192189193 648 -- Corporation holding chemicals, company
instruments
(Continued)
Statements
Holding proportion Voting right proportion Amount in minority interest used for combined or Minority interest
Subsidiary
(%) (%) writing down minority gain and loss Note not
Yes
Shenzhen Automobile 100 100 -- -- Yes
Shenzhen SD Huari Automobile Enterprise
60 60
Co.Limited 1,515 -- Yes
Shenzhen Zhongtian Industrial Co. Ltd 100 100 -- -- Yes
Shenzhen Huari Toyota Automobile Co. Ltd 60 60 -419 -- Yes
Shenzhen Huari Anxin Automobile Inspection
100 100 -- -- Ltd
Yes
Shenzhen Automotive Industry Supply
100 100 -- -- Corporation
3. The Company has no special purposes entity or operation entity where controlling right is formed under entrusted operation or leasing
4. There are no entities newly included in consolidate scope during the reporting period and entities ceasing to be included in consolidate scope during the reporting period
5. Business combination under the same control in Period
No business combined under the same control in Period
6. Business combination under the different control in Period
No business combined under the different control in Period
7. Subsidiary reduced in the Period due to sales of equity that loss controlling rights
No subsidiary reduced in the Period due to sales of equity that loss controlling rights
8. Counter purchase in the Year
No counter purchase in the Period
9. Merger in the Year
No merger in the Period
10. Conversion rate of the main statement for foreign operational entity
The Company has no foreign operational entity
VII. Notes to major items in consolidated financial statements
1. Monetary fund
2014-6-30 2013-12-31
Item
Foreign Exchange Exchange RMB RMB conversion Foreign currency
currency rate rate conversion Stock cash 146,293.44 126,751.33 Including: RMB — — 125,567.25 — — 102,105.49 HKD
3,718.35 0.79375 2,951.45 21,419.47 0.78623 16,840.63 USD
856.00 6.1528 5,266.80 1,045.35 6.0969 6,373.38 JPY
205,655.00 0.06082 12,507.94 24,784.58 0.0578 1,431.83 Bank deposits: 55,712,194.45 63,018,754.91 Including: RMB — — 55,712,194.45 — — 63,018,754.91 Other monetarycapital*Note
①
1,248,222.56 6,753,285.32
2014-6-30 2013-12-31
Item
Foreign Exchange Exchange RMB RMB conversion Foreign currency
currency rate rate conversion Including: RMB — — 1,248,222.56 — — 6,753,285.32 Total 57,106,710.45 69,898,791.56*Note① Balance at the period-end of other monetary capital included bank acceptance deposits RMB 1,245,130.38.
2. Account receivable
(1) Account receivable by type
2014-6-30
Type
Book balance Provision for bad debt Proportion Proportion Amount Amount
(%) (%) Accounts receivable with large single amount and accrued for 20,131,654.12 41.09 20,131,654.12 100.00 provision of bad debt on a single basis
Accounts receivable accrued for provision of bad debt by age 8,585,797.08 17.53 4,075,470.12 47.47 group
Accounts receivable with insignificant single amount but accrued 20,273,298.57 41.38 20,273,298.57 100.00 for provision of bad debt on a single basis
Total 48,990,749.77 100.00 44,480,422.81 90.79 (Continued)
2013-12-31
Type
Book balance Provision for bad debt Proportion Proportion Amount Amount
(%) (%) Accounts receivable with large single amount and accrued for 20,131,654.12 40.69 20,131,654.12 100.00 provision of bad debt on a single basis
Accounts receivable accrued for provision of bad debt by age 9,069,724.07 18.33 4,052,985.29 44.69 group
Accounts receivable with insignificant single amount but accrued 20,273,298.57 40.98 20,273,298.57 100.00 for provision of bad debt on a single basis
Type 49,474,676.76 100.00 44,457,937.98 89.86
(2)
Account receivable by age group
2014-6-30 2013-12-31
Item
Amount Proportion(%) Amount Proportion(%) Within 1 year 186,339.71 0.38 453,674.83 0.92 1-2 years 8,122.90 0.02 358,715.77 0.73 2-3 years 402,010.86 0.82 536,004.01 1.08 Over 3 years 48,394,276.30 98.78 48,126,282.15 97.27 Total 48,990,749.77 100.00 49,474,676.76 100.00 (3) Withdrawal of provision for bad debt
①Accounts receivable with large single amount and accrued for provision of bad debt on a single basis
Provision for Accrual
Debtor Book balance Reasons
bad debt ratio
Shenzhen Jinlu Industry and Trade Co., Has greater uncertainty in 9,846,607.00 9,846,607.00100%
Ltd. collection
Guangdong Zhanjiang Sanxing Auto 100% Not expected to collected due to 4,060,329.44 4,060,329.44
Service Co., Ltd. long account age
Huizhou Jiandacheng Daoqiao 100% Unlikely to collected
2,021,657.70 2,021,657.70
Engineering Company
Jiangling Automobile Factory 100% Not expected to collected due to 1,191,059.98 1,191,059.98
long account age
Guangdong Materials Group Corp. 100% Not expected to collected due to 1,862,000.00 1,862,000.00
long account age
Yangjiang Auto Trade Co., Ltd. 100% Not expected to collected due to 1,150,000.00 1,150,000.00
long account age
Total 20,131,654.12 20,131,654.12100%
②Accounts receivable accrued for provision of bad debt by age group
2014-6-30 2013-12-31
Age
Book balance
Provision for
Book balance
Provision for Proportion Proportion
Amount bad debt Amount bad debt(%) (%)
Within 1 year 186,339.71 2.17 - 453,674.83 5.00 - 1-2 years 8,122.90 0.09 406.15 358,715.77 3.96 6,700.05
2-3 years 402,010.86 4.68 80,402.17 536,004.01 5.91 107,200.80 Over 3 years 7,989,323.61 93.05 3,994,661.81 7,721,329.46 85.13 3,939,084.44 Total 8,585,797.08 100.00 4,075,470.12 9,069,724.07 100.00 4,052,985.29③Accounts receivable with insignificant single amount but accrued for provision of bad debt on a single basis
Accrual ratio Provision for
Accounts receivable Book balance Reasons
bad debt
100% Not expected to collected due to Dadong Company
801,380.16 801,380.16 long account age
100% Not expected to collected due to Qingling Automobile Company
695,848.00 695,848.00 long account age
Shanghai Automobile Industry 100% Not expected to collected due to Supply and Marketing Company 641,341.90 641,341.90 long account age
Zhongqi Trade Guangzhou 100% Not expected to collected due to Company 558,000.00 558,000.00 long account age
Guangdong Materials Group Corp. 100% Not expected to collected due to Automobile Trade Company 395,400.00 395,400.00 long account age
100% Not expected to collected due to Yunnan Lanjian Factory
389,640.00 389,640.00 long account age
100% Not expected to collected due to Guangdong Materials Trade Center
387,000.00 387,000.00 long account age
100% Not expected to collected due to Other company
16,404,688.51 16,404,688.51 long account age
Total 20,273,298.57 100% 20,273,298.57
(4) No account receivables actually written-off during the reporting period
(5) No account receivables due from the shareholders holding5%(5% included) or above voting shares of the Company during the reporting period
(6) Top 5 account receivable
Relationship with Proportion in Name of the company
Amount Terms
the Company total account
receivables(%) Shenzhen Jinlu Industry and Trade Co., Ltd. Non-related party 9,846,607.00 Over 5 years 19.79 Guangdong Zhanjiang Sanxing Auto Service Co., Non-related party
Ltd. 4,060,329.44 Over 5 years 8.16 Huizhou Jiandacheng Daoqiao Engineering
Non-related party 2,021,657.70
Company Over 5 years 4.06 Guangdong Materials Group Corp. Non-related party 1,862,000.00 Over 5 years 3.74 Jiangling Automobile Factory Non-related party 1,191,059.98 Over 5 years 2.39 Total 18,981,654.12 38.14 (7) Account receivables due from related parties
Found more details in 6(1) Receivable and payable of related parties in Note VIII
3. Other account receivables
(1) Other account receivable by type
2014-6-30
Type
Book balance Provision for bad debt Proportion Proportion Amount Amount
(%) (%) Other accounts receivable with large single amount and accrued
37,789,294.43 60.87 37,789,294.43 100.00 for provision of bad debt on a single basis
Other accounts receivable accrued for provision of bad debt by age
14,884,815.11 23.98 4,627,906.52 31.09 group
Other accounts receivable with insignificant single amount but
9,403,872.62 15.15 9,403,872.62 100.00 accrued for provision of bad debt on a single basis
Total 62,077,982.16 100.00 51,821,073.57 83.48 (Continued)
2013-12-31
Type
Book balance Provision for bad debt Proportion Proportion Amount Amount
(%) (%) Other accounts receivable with large single amount and accrued 37,789,294.43 63.15 37,789,294.43 100.00
2013-12-31
Type
Book balance Provision for bad debt Proportion Proportion Amount Amount
(%) (%) for provision of bad debt on a single basis
Other accounts receivable accrued for provision of bad debt by age
12,643,148.86 21.13 4,614,792.17 36.5 group
Other accounts receivable with insignificant single amount but
9,403,872.62 15.72 9,403,872.62 100.00 accrued for provision of bad debt on a single basis
Total 59,836,315.91 100.00 51,807,959.22 86.58 (2) Other account receivable by age
2014-6-30 2013-12-31
Item
Amount Proportion(%) Amount Proportion(%) Within 1 year 5,253,797.11 8.46 3,106,182.90 5.19 1-2 years 534,983.49 0.86 672,196.31 1.12 2-3 years 142,719.64 0.23 602,961.71 1.01 Over 3 years 56,146,481.92 90.45 55,454,974.99 92.68 Total 62,077,982.16 100.00 59,836,315.91 100.00 (3) Withdrawal of provision for bad debt
①Other accounts receivable with large single amount and accrued for provision of bad debt on a single basis
Provision for Accrual
Other accounts receivable Book amount Reasons
bad debt ratio
Zhongqi South China Auto Sales Not expected to collected due to 9,832,956.37 9,832,956.37 100%
Company long account age
South Industry& TRADE Shenzhen Not expected to collected due to 7,359,060.75 7,359,060.75
Industrial Company 100% long account age
Win a lawsuit, no executable 5,000,000.00 5,000,000.00
Shenzhen Zhonghao (Group) Co., Ltd. 100% assets from adversary
Gold Beili Electrical Appliances Not expected to collected due to Company 2,706,983.51 2,706,983.51 100% long account age
Provision for Accrual
Other accounts receivable Book amount Reasons
bad debt ratio
Not expected to collected due to 2,418,512.90 2,418,512.90 100%
City Xingtai Trade Co., Ltd. the non-existence of the company Shenzhen Petrochemical Group 1,888,329.19 1,888,329.19 100% Unlikely to collected
Not expected to collected due to Huatong Package Co., Ltd. 1,212,373.79 1,212,373.79 100% long account age
Heyuan Dongfeng Technology Service Not expected to collected due to station 930,000.00 930,000.00 100% long account age
Shenzhen South Great Wall Investment Has greater uncertainty in Holding Co., Ltd. 819,460.91 819,460.91 100% collection
Shenzhen Xiandao Chemical New Not expected to collected due to Materials Company 708,072.26 708,072.26 100% long account age
Shenzhen Baodong Property Not expected to collected due to Development Company 609,773.00 609,773.00 100% long account age
Not expected to collected due to Others
4,303,771.75 4,303,771.75 100%
long account age
Total
37,789,294.43 37,789,294.43 100%
②Other accounts receivable accrued for provision of bad debt by age group
2014-6-30 2013-12-31
Age
Book balance
Provision for
Book balance
Provision for bad Proportion Proportion
Amount bad debt Amount debt(%) (%)
Within 1 year 5,253,797.11 35.30 -- 3,106,182.90 24.56 -- 1-2 years 534,983.49 3.59 26,749.18 672,196.31 5.32 24,054.83 2-3 years 142,719.64 0.96 28,543.93 143,619.69 1.14 58,123.93 Over 3 years 8,953,314.87 60.15 4,572,613.41 8,721,149.96 68.98 4,532,613.41 Total 14,884,815.11 100.00 4,627,906.52 12,643,148.86 100.00 4,614,792.17③Other accounts receivable with insignificant single amount but accrued for provision of bad debt on a single basis at period-end
Provision for bad
Other accounts receivable Book balance Accrual ratio(%) Reasons
debt
Huashengchang Auto Not expected to collected due to 100.00
Company 463,912.46 463,912.46 long account age
Renminbei branch of Not expected to collected due to 100.00
Agricultural Bank of China 247,219.98 247,219.98 long account age
Account for employees to Not expected to collected due to 100.00
purchase properties 217,892.57 217,892.57 long account age
Not expected to collected due to 100.00
Liang Rongde 182,133.26 182,133.26 long account age
Shensha Industry& Trade Not expected to collected due to 100.00
Company 134,835.20 134,835.20 long account age
Chengdu Airplane Design Not expected to collected due to 100.00
Institute 130,000.00 130,000.00 long account age
Not expected to collected due to 8,027,879.15 100.00 8,027,879.15
Other company long account age
Total 9,403,872.62 9,403,872.62
(4) No other receivables actually written-off during the reporting period
(5) No other receivables due from the shareholders holding5%(5% included) or above voting shares of the Company during the reporting period
(6) Top 5 other account receivable
Relationship with Proportion in total other Amount Terms
Name of the company
the Company account receivables(%) Zhongqi South China Auto Sales Company Non-related party 9,832,956.37 Over 3 years 16.43 South Industry& TRADE Shenzhen Industrial Company Non-related party 7,359,060.75 Over 3 years 12.30 Shenzhen Zhonghao (Group) Co., Ltd. Non-related party 5,000,000.00 Over 3 years 8.36 Shenzhen Kaifeng Special Vehicles Industry Co., Ltd. Non-related party 4,413,728.50 Over 3 years 7.38 Jinbeili Home Appliance Company Non-related party 2,706,983.51 Over 3 years 4.52 Total 29,312,729.13 48.99
(7) Other receivables due from related parties
Found more details in 6(1) Receivable and payable of related parties in Note VIII
4. Payment in advance
(1) Payment in advance by age
2014-6-30 2013-12-31
Age
Amount Proportion(%) Amount Proportion(%) Within 1 year 10,200,986.16 99.12 8,210,636.79 98.81 1-2 years -- -- -- -- 2-3 years -- -- 8,360.00 0.10 Over 3 years 90,577.94 0.88 90,577.94 1.09 Total 10,291,564.10 100.00 8,309,574.73 100.00 (2) Main units of payment in advance
Relationship with Time for
Name of the company Amount Unsettled reasons the Company advances
FAW-Toyota Automobile Selling Commodity has not Supplier 7,497,745.23 2014
Company been collected
Toyota Motor (China) Investment Co., Commodity has not Supplier 1,523,300.27 2014
Ltd. been collected
Total 9,021,045.50
(3) No shareholders holding5%(5% included) or above voting shares of the Company in payments in advance during the reporting period
5. Inventory
(1) Classification
2014-6-30
Item
Book balance Depreciation provision Book value
14,870,156.16 14,771,812.17 98,343.99 Raw materials
2,794.79 - 2,794.79 Low value consumable
57,648,711.11 13,983,189.70 43,665,521.41 Stock products
72,521,662.06 28,755,001.87 43,766,660.19 Total
(Continued)
2013-12-31
Item
Book balance Depreciation provision Book value
Raw materials 15,286,724.01 14,771,812.17 514,911.84 Low value consumable 25,935.10 -- 25,935.10 Stock products 76,268,708.46 13,983,189.70 62,285,518.76 Total 91,581,367.57 28,755,001.87 62,826,365.70 (2) Changes of inventory impairment provision
Provision for this
Decrease during this period
Item 2013-12-31 2014-6-30 period
Reversal Written-off
Raw materials 14,771,812.17 -- -- -- 14,771,812.17 Low value consumable -- -- -- -- -- Stock products 13,983,189.70 -- -- -- 13,983,189.70 Total 28,755,001.87 -- -- -- 28,755,001.87 6. Other current assets
Item 2014-6-30 2013-12-31
Input tax ready for deducted 8,572,421.19 11,644,102.02 Total 8,572,421.19 11,644,102.02 7. Financial assets available for sale
Particular about financial assets available for sale
Item 2014-6-30 2013-12-31
Equity instrument available for sale 1,391,820.80 1,480,168.80 Including: CMB Stock 1,391,820.80 1,480,168.80 Less: depreciation reserves -- -- Total 1,391,820.80 1,480,168.80
8. Held-to-maturity investment
Particular about held-to-maturity investment
Item 2014-6-30 2013-12-31
Treasury bill 120,000.00 120,000.00 Less: depreciation reserves 20,000.00 20,000.00 Total 100,000.00 100,000.00 9. Long-term account receivable
Item 2014-6-30 2013-12-31
Other:
Essentially constitute a long-term equity for net investment 2,179,203.68 2,179,203.68 of invested company
Including: Shenzhen Tellus Auto Service Chain Co., Ltd.* 2,179,203.68 2,179,203.68 Total book balance 2,179,203.68 2,179,203.68 Less: Provision for bad debt 2,179,203.68 2,179,203.68 Book value -- -- 10. Long-term equity investment
(1) Classification
Current Current
Item 2013-12-31 2014-6-30 increased decreased
258,881.43 68,856,761.38 Investment to joint venture 68,597,879.95 --
7,582,594.55 130,507,152.17 Investment to associated enterprise 122,924,557.62 --
41,736,238.39 Other equity investment 41,736,238.39 -- --
Less: depreciation reserves of long-term equity
31,385,089.21 -- --
31,385,089.21 investment
7,841,475.98 209,715,062.73 Total 201,873,586.75 --
(2) Details of long-term equity investment
Calculation Investment
Invested company 2013-12-31Increase/decrease(+,-) 2014-6-30 method cost
Calculation Investment
Invested company 2013-12-31Increase/decrease(+,-) 2014-6-30 method cost
Shenzhen Tellus Jimeng Investment Co., Ltd Equity method 61,852,480.00 59,672,265.92 997.01 59,673,262.93 Shenzhen Tellus Hang Investment Co., Ltd. Equity method 13,600,000.00 8,925,614.03 257,884.42 9,183,498.45 Shenzhen Xinglong Machinery Mould Co., Ltd. Equity method 12,300,000.00 15,878,254.74 -- 15,878,254.74 Shenzhen Tellus Auto Service Chain Co., Ltd. Equity method 800,000.00 -- -- -- Shenzhen Zung Fu Tellus Auto Service Co., Ltd. Equity method 10,500,000.00 68,285,253.75 6,482,504.95 74,767,758.70 Shenzhen Auto IndustryImp& Exp Co., Ltd. Equity method 4,737,500.00 8,278,240.60 1,503,366.02 9,781,606.62 Shenzhen Dongfeng Auto Co., Ltd. Equity method 23,277,044.85 29,221,071.32 -99,746.53 29,121,324.79 Shenzhen New Yongtong Technology Co., Ltd. Equity method 496,000.00 528,942.14 -14,312.96 514,629.18 Shenzhen New Yongtong Oil Pump Equity method
155,000.00 127,836.59 -- 127,836.59 Environment Protection Co., Ltd.
Shenzhen New Yongtong Auto Service Co., Ltd. Equity method 300,000.00 223,274.43 -88,052.96 135,221.47 Shenzhen New Yongtong Dongxiao Auto Service Equity method
175,000.00 175,844.33 -91,163.97 84,680.36 Co., Ltd.
Shenzhen Yongtong Xinda Inspection Equipment Equity method
400,000.00 164,282.89 -110,000.00 54,282.89 Co., Ltd.
Shenzhen New Yongtong Consultant Co., Ltd. Equity method 48,000.00 41,556.83 -- 41,556.83 Shenzhen Tellus New Yongtong Auto Service Equity method
504,000.00 -- -- -- Co., Ltd.
Shenzhen Tellus Jimeng Investment Co., Ltd Equity method 10,176,617.20 10,176,617.20 -- 10,176,617.20 Shenzhen Tellus Hang Investment Co., Ltd. Equity method 6,900,000.00 1,810,540.70 -- 1,810,540.70 Shenzhen Xinglong Machinery Mould Co., Ltd. Equity method
3,466,000.00 1,956,000.00 -- 1,956,000.00* Note②
Shenzhen Tellus Auto Service Chain Co., Ltd. Equity method 3,150,000.00 3,225,000.00 -- 3,225,000.00 Shenzhen Zung Fu Tellus Auto Service Co., Ltd. Equity method 4,000,000.00 4,000,000.00 -- 4,000,000.00 Shenzhen Auto IndustryImp& Exp Co., Ltd. Equity method 825,000.00 825,000.00 -- 825,000.00 Shenzhen Dongfeng Auto Co., Ltd.*Note③ Equity method 640,000.00 640,000.00 -- 640,000.00 Shenzhen New Yongtong Technology Co., Ltd. Equity method 7,256,401.38 4,751,621.62 -- 4,751,621.62
Calculation Investment
Invested company 2013-12-31Increase/decrease(+,-) 2014-6-30 method cost
Shenzhen New Yongtong Oil Pump Equity method
700,000.00 700,000.00 -- 700,000.00 Environment Protection Co., Ltd.
Shenzhen New Yongtong Auto Service Co., Ltd. Equity method 6,700,000.00 6,700,000.00 -- 6,700,000.00 Shenzhen New Yongtong Dongxiao Auto Service Equity method
400,000.00 400,000.00 -- 400,000.00 Co., Ltd.
Shenzhen Yongtong Xinda Inspection Equipment Equity method
500,000.00 500,000.00 -- 500,000.00 Co., Ltd.
Shenzhen New Yongtong Consultant Co., Ltd. Equity method 17,849.20 17,849.20 -- 17,849.20 Shenzhen Tellus New Yongtong Auto Service Equity method
2,250,000.00 2,250,000.00 -- 2,250,000.00 Co., Ltd.
Shenzhen Tellus Jimeng Investment Co., Ltd Equity method 600,000.00 600,000.00 -- 600,000.00 Shenzhen Tellus Hang Investment Co., Ltd. Equity method 453,440.00 453,440.00 -- 453,440.00 Shenzhen Xinglong Machinery Mould Co., Ltd. Equity method
600,000.00 600,000.00 -- 600,000.00* Note②
Shenzhen Tellus Auto Service Chain Co., Ltd. Equity method 1,320,000.00 1,320,000.00 -- 1,320,000.00 Shenzhen Zung Fu Tellus Auto Service Co., Ltd. Equity method 162,000.00 162,000.00 -- 162,000.00 Shenzhen Auto IndustryImp& Exp Co., Ltd. Equity method 200,001.10 200,001.10 -- 200,001.10 Shenzhen Dongfeng Auto Co., Ltd.*Note③ Equity method 302,368.57 302,368.57 -- 302,368.57 Shenzhen New Yongtong Technology Co., Ltd. Equity method 145,800.00 145,800.00 -- 145,800.00 Shenzhen New Yongtong Oil Pump Equity method
179,910,502.30 233,258,675.96 7,841,475.98 241,100,151.94 Environment Protection Co., Ltd.
(Continued)
Explanation on the
Proportion of
Proportion of voting incongruity in share
Impairment
share holding in Cash bonus this Invested company rights in invested holding proportion and Impairment provision
provision of
period invested
accruing this year
company(%) voting proportion in
company(%)
invested company
Shenzhen Tellus Jimeng Investment Co., Ltd 50 50 -- -- -- Shenzhen Tellus Hang Investment Co., Ltd. 50 50 -- -- -- Shenzhen Xinglong Machinery Mould Co., Ltd. 30 30 -- -- -- Shenzhen Tellus Auto Service Chain Co., Ltd. 40 40 -- -- -- Shenzhen Zung Fu Tellus Auto Service Co., Ltd. 35 35 -- -- -- Shenzhen Auto IndustryImp& Exp Co., Ltd. 35.75 35.75 -- -- -- Shenzhen Dongfeng Auto Co., Ltd. 25 25 -- -- -- Shenzhen New Yongtong Technology Co., Ltd. 31 31 -- -- -- Shenzhen New Yongtong Oil Pump Environment
Protection Co., Ltd. 31 31 127,836.59 -- -- Shenzhen New Yongtong Auto Service Co., Ltd. 30 30 -- -- -- Shenzhen New Yongtong Dongxiao Auto Service Co.,
Ltd. 35 35 -- -- -- 88
Explanation on the
Proportion of
Proportion of voting incongruity in share
Impairment
share holding in Cash bonus this Invested company rights in invested holding proportion and Impairment provision
provision of
period invested
accruing this year
company(%) voting proportion in
company(%)
invested company
Shenzhen Yongtong Xinda Inspection Equipment Co.,
Ltd. 40 40 -- -- -- Shenzhen New Yongtong Consultant Co., Ltd. 30 30 -- -- -- Shenzhen Tellus New Yongtong Auto Service Co., Ltd. 18 18 -- -- -- China Pudong Development Machinery Industry Co., Ltd. 5.30 5.30 -- -- -- Hunan Changyang Industrial Co., Ltd.*Note① 36.55 36.55 1,810,540.70 -- -- Shenzhen hanli Hi-Tech Ceramics Co.,Ltd.*Note① 80 80 1,956,000.00 -- -- Shenzhen Jiecheng Electronic Co.,Ltd*Note① 45 45 3,225,000.00 -- -- Shenzhen Jingwei Industrial Co., Ltd. 12.50 12.50 4,000,000.00 -- -- Shenzhen (Masco) Co., Ltd. 7.00 7.00 825,000.00 -- -- Wuhan Weite Hotel 640,000.00 -- -- Shenzhen Xiandao Chemical Industrial New Material Co.,
Ltd.*Note① 40 40 4,751,621.62 -- -- Shenzhen Petrochemical Group 100000 shares 100000 shares 700,000.00 -- -- 89
Explanation on the
Proportion of
Proportion of voting incongruity in share
Impairment
share holding in Cash bonus this Invested company rights in invested holding proportion and Impairment provision
provision of
period invested
accruing this year
company(%) voting proportion in
company(%)
invested company
South Auto MaintenanceCenter*Note① 100 100 6,700,000.00 -- -- China Auto Industrial Shenzhen TradingCompany* Note
① 40 40 400,000.00 -- -- Shenzhen General Standard Co.,Ltd.*Note① 25 25 500,000.00 -- -- Shenzhen Huoju Spark Plug Industry Co.,Ltd*Note① 49 49 17,849.20 -- -- Zhongqi South China Auto SalesCompany*Note① 49 49 2,250,000.00 -- -- Electric vehicles 11.10 11.10 600,000.00 -- -- Shenzhen Jinhe Standard Mould Co., ltd. 15.00 15.00 453,440.00 -- -- China Auto Training Center 6.25 6.25 600,000.00 -- -- Shenzhen Bailiyuan Power Supply Co.,Ltd*Note① 25.00 25.00 1,320,000.00 -- -- Dratini (Zeng Wengang) 6.25 6.25 162,000.00 -- -- Shenzhen Yimin Auto Tranding Co., Ltd. 200,001.10 -- -- Shenzhen Bisike Machinery Transport Co., Ltd. 7.5 7.5 -- -- -- Hong Kong Rishen International Co., Ltd. 7.5 7.5 145,800.00 -- -- 90
Explanation on the
Proportion of
Proportion of voting incongruity in share
Impairment
share holding in Cash bonus this Invested company rights in invested holding proportion and Impairment provision
provision of
period invested
accruing this year
company(%) voting proportion in
company(%)
invested company
Total 31,385,089.21 -- -- 91
*Note①: the company has stopped business; the company does not have significant influence which has fully accrued provision for impairment.
(3) Relevant information about limitation to ability to transfer funds to invested enterprises
According to Auto Industrial and Trading Company and Dongfeng Motor Corp (Dongfeng Motor Corporation is controlling shareholder of Shenzhen Dongfeng Co., LTD) signed the "Debt Payment Agreement" agreed that Auto Industrial and Trading Company pay off debts to Dongfeng Motor Corporation using its distributable profits shared from Shenzhen Dongfeng Co., LTD.
(4) Details of unrecognized investment losses
2014-6-30 2013-12-31
Unrecognized Accumulative Unrecognized Accumulative Invested company
investment loss unrecognized investment loss unrecognized in the year investment losses last year investment losses Shenzhen Tellus New Yongtong Auto Service
44,012.40 763,789.35 96,219.16 719,776.95 Co., Ltd.
Shenzhen Tellus Auto Service Chain Co., Ltd. 555.77 93,962.39 93,406.62 93,406.62 Total 44,568.17 857,751.74 189,625.78 813,183.57 (5) Investment to joint venture and associated enterprise
① Joint venture
Proporti
on of
Proportion of shares
Name of the Enterprise Registrati voting right in Corporate Business nature Register capital held by
company nature on place invested the
company(%) Compan
y(%)
Industrial
investment,
Shenzhen Tellus Limited
property
Jimeng Investment liability Shenzhen Luo Bojun 123,704,960.00 50 50 management and
Co., Ltd company
self-owned
property leasing
Shenzhen Tellus Limited Shenzhe Industrial
Luo Bojun 27,200,000.00 50 50 Hang Investment liability n investment,
Proporti
on of
Proportion of shares
Name of the Enterprise Registrati voting right in Corporate Business nature Register capital held by
company nature on place invested the
company(%) Compan
y(%)
Co., Ltd. company property
management and
purchase and sales
of auto accessories
(Continued)
Total assets dated 30 Total liability dated 30 Total net assets dated Current total Related
Name of the company Net profit Organization code June 2014 June 2014 30 June 2014 operation revenue relationship
Shenzhen Tellus Jimeng
Joint venture 670026381 Investment Co., Ltd 163,764,405.48 44,417,879.63 119,346,525.85 -- 2,481.74
Shenzhen Tellus Hang Investment
Joint venture 682008316 Co., Ltd. 28,265,833.76 301,901.85 27,963,931.91 668,214.00 368,552.80
②Associated enterprise
Proportio Proportio n of n of shares voting Registratio Register
Name of the company Enterprise nature Corporate Business nature held by right in n place capital
the invested Company company(%) (%) Shenzhen
Shenzhen Xinglong Machinery Mould Co., Ltd. Limited liability Property leasing, import the enterprise required raw materials, equipment and spare paets export mold
Zhang Ruili 60,633,300.00 30 30 company and parts
Shenzhen
Shenzhen Tellus Auto Service Chain Co., Ltd. Limited liability
Wu Yonggang Auto repair and rental 2,000,000.00 40 40 company
Shenzhen
Shenzhen Zung Fu Tellus Auto Service Co., Ltd. Limited liability
Chen Haoxian Sales and maintain of Benz, assessment and sales of second-hand car 30,000,000.00 35 35 company
Shenzhen
Shenzhen Auto IndustryImp& Exp Co., Ltd. Limited liability Huang
Import and export of auto spare parts 13,250,000.00 35.75 35.75 company Weiqiang
Shenzhen
Shenzhen Dongfeng Auto Co., Ltd. Limited liability 100,000,000.0 Xu Tiansheng Auto manufacture and maintain 25 25 company 0 Shenzhen
Shenzhen New Yongtong Technology Co., Ltd. Limited liability
Li Jinlong Technical checking on motor vehicle, delection equipment technology development consulting 1,600,000.00 31 31 company
Proportio Proportio n of n of shares voting Registratio Register
Name of the company Enterprise nature Corporate Business nature held by right in n place capital
the invested Company company(%) (%) Shenzhen
Shenzhen New Yongtong Oil Pump Environment Protection Co., Limited liability Lan Zhongxin Consultant on diesel oil pump maintence and environment technology
250,000.00 31 31 Ltd. company
Shenzhen
Shenzhen New Yongtong Auto Service Co., Ltd. Limited liability Li Jianjun Maintenance of auto and motorcycle; auto beauty and sales of auto accessory
1,000,000.00 30 30 company
Shenzhen
Shenzhen New Yongtong Dongxiao Auto Service Co., Ltd. Limited liability Li Jianjun Auto 2nd class maintenance; sales of auto accessories
500,000.00 35 35 company
Shenzhen
Shenzhen Yongtong Xinda Inspection Equipment Co., Ltd. Limited liability Huang Peibo Technology development of inspection equipment and sales
1,000,000.00 40 40 company
Shenzhen
Shenzhen New Yongtong Consultant Co., Ltd. Limited liability Lan Zhongxin Auto management , technology consultant; network maintenance etc.
160,000.00 30 30 company
Shenzhen
Shenzhen Tellus New Yongtong Auto Service Co., Ltd. Limited liability
Li Jinlong Auto maintenance, leasing, development and sales of infoemation technology 2,800,000.00 18 18 company
(Continued)
Total assets Total liability Total net assets Current total
Organization Name of the company dated 30 June dated 30 June dated 30 June operation Net profit Related relationship code 2014 2014 2014 revenue
Shenzhen Xinglong Machinery Mould Co., Ltd. 256,020,993.74 191,041,856.92 64,979,136.82 -- -- Affiliation 192172420 Shenzhen Tellus Auto Service Chain Co., Ltd. 1,542,572.21 9,582,153.75 -8,039,581.54 -- -1,389.43 Affiliation 767583926 Shenzhen Zung Fu Tellus Auto Service Co., Ltd. 428,934,219.71 210,343,824.26 218,590,395.45 706,759,017.70 18,521,442.74 Affiliation 774131792 Shenzhen Auto IndustryImp& Exp Co., Ltd. 35,036,468.51 12,101,433.26 22,935,035.25 10,183,747.30 -279,011.27 Affiliation of subsidiary 192190506 Shenzhen Dongfeng Auto Co., Ltd. 556,126,427.18 420,485,737.09 135,640,690.09 104,332,338.01 6,013,464.08 Affiliation of subsidiary 19218689X Shenzhen New Yongtong Technology Co., Ltd. 3,143,578.18 1,553,484.08 1,590,094.10 1,988,334.00 -46,170.85 Affiliation of subsidiary 674800717 Shenzhen New Yongtong Oil Pump Environment Protection Co., Ltd. -- -- -- -- -- Affiliation of subsidiary 674823599 Shenzhen New Yongtong Auto Service Co., Ltd. 2,794,834.76 2,344,096.55 450,738.21 2,314,297.63 -293,509.88 Affiliation of subsidiary 68376659X Shenzhen New Yongtong Dongxiao Auto Service Co., Ltd. 2,218,526.23 1,976,582.36 241,943.87 1,107,463.63 -260,468.48 Affiliation of subsidiary 683763583 Shenzhen Yongtong Xinda Inspection Equipment Co., Ltd. 4,163,204.92 4,027,497.68 135,707.24 474,700.86 -275,000.00 Affiliation of subsidiary 678587925 Shenzhen New Yongtong Consultant Co., Ltd. 341,587.62 203,055.89 138,531.73 -- -- Affiliation of subsidiary 685393889 Shenzhen Tellus New Yongtong Auto Service Co., Ltd. 2,195,984.21 4,790,010.51 -2,594,026.30 1,212,275.33 -244,513.34 Affiliation of subsidiary 685350360 98
(6)Details of long-term equity investment impairment
Increase in the Decrease in the
Item 2013-12-31 2014-6-30 period period
Investment in associated companies
Shenzhen New Yongtong Oil Pump
127,836.59 -- -- 127,836.59 Environment Protection Co.,Ltd.*
Other long-term equity investment
Shenzhen Xiandao Chemical Industrial New 4,751,621.62 4,751,621.62 -- --
Material Co., Ltd.
Hunan Changyang Industrial Co., Ltd. 1,810,540.70 -- -- 1,810,540.70 Shenzhen hanli Hi-Tech Ceramics Co., Ltd. 1,956,000.00 -- -- 1,956,000.00 Shenzhen Jiecheng Electronic Co., Ltd. 3,225,000.00 -- -- 3,225,000.00 Shenzhen Jingwei Industrial Co., Ltd. 4,000,000.00 -- -- 4,000,000.00 Shenzhen (Masco) Co., Ltd. 825,000.00 -- -- 825,000.00 Wuhan Weite Hotel 640,000.00 -- -- 640,000.00 Shenzhen Petroleum& Chemical (Group) Co., 700,000.00 700,000.00 -- --
Ltd.
South Auto Maintenance Center 6,700,000.00 -- -- 6,700,000.00 Shenzhen General Standard Co., Ltd. 500,000.00 -- -- 500,000.00 Shenzhen Huoju Spark Plug Industry Co., Ltd. 17,849.20 -- -- 17,849.20 China Auto South Auto Sales Co., Ltd. 2,250,000.00 -- -- 2,250,000.00 China Auto Industrial Shenzhen Trading 400,000.00 400,000.00 -- --
Company
Electric vehicles 600,000.00 -- -- 600,000.00 Shenzhen Jinhe Standard Mould Co., ltd. 453,440.00 -- -- 453,440.00 China Auto Training Center 600,000.00 -- -- 600,000.00 Shenzhen Bailiyuan Power Supply Co., Ltd 1,320,000.00 -- -- 1,320,000.00 Dratini (Zeng Wengang) 162,000.00 -- -- 162,000.00 Shenzhen Yimin Auto Tranding Co., Ltd. 200,001.10 -- -- 200,001.10 Hong Kong Rishen 145,800.00 -- -- 145,800.00
Total 31,385,089.21 -- -- 31,385,089.21 11. Investment real estate
(1)Details of investment real estate
Item 2013-12-31 Increase in the period Decrease in the period 2014-6-30
Investment real estate subsequent measured by
88,422,673.91 --
2,285,646.54 86,137,027.37 cost model
Less: provision for impairment of investment
-- -- -- -- real estate
Total 88,422,673.91 -- 2,285,646.54 86,137,027.37 (2) Investment real estate measured by cost
Increase in the Decrease in the
Item 2013-12-31 2014-6-30 period period
I. Total original book value 157,934,497.31 -- -- 157,934,497.31 Houses and buildings 157,934,497.31 -- -- 157,934,497.31 II. Accumulated depreciation and
69,511,823.40 2,285,646.54 -- 71,797,469.94 accumulated amortization
Houses and buildings 69,511,823.40 2,285,646.54 -- 71,797,469.94 III. Total provision for impairment -- -- -- -- Houses and buildings -- -- -- -- IV. Total book value 88,422,673.91
86,137,027.37 Houses and buildings 88,422,673.91
86,137,027.37 Note:① depreciation for the Period was 2,285,646.54 Yuan.
(3) Investment real estate with restriction in ownership
On 30 June 2014, the investment real estate with book value of 82,793,946.64 Yuan (original value of 150,934,356.34 Yuan) was mortgaged for the 60 million Yuan―Comprehensive CreditContract‖ with Shenzhen branch of CITIC, the 120 million Yuan―Financing CreditAgreement‖ with the Shenzhen branch of SPD Bank and 48 million Yuan―Basic Line of CreditContract‖ with ShenzhenTian’an branch of Industrial Bank. The borrowing balance for underlying security dated 30 June 2014 was: short term loans 129 million Yuan (Note VII.20), long-term loans 52 million Yuan (Note VII. 28) and 12 million Yuan long-term loans due within one year (Note VII. 27)
(4) As of 30 June 2014, no impairment been found in investment real estate of the Company, no corresponding assets for impairment accrual.
12. Fixed assets
(1) Particular about fixed assets
Increase in the Decrease in the
Item 2013-12-31 2014-6-30
period period
I. Total book balance 317,196,458.05 305,819.80 770,031.93 316,732,245.92 Including: House& buildings 271,461,252.09 - - 271,461,252.09 Machinery equipments 20,030,803.65 3,611.11 - 20,034,414.76 Transportation tools 7,102,578.90 - 760,301.93 6,342,276.97 Electronic equipment 9,947,993.60 271,740.69 9,730.00 10,210,004.29 Office and other equipment 5,792,338.71 30,468.00 - 5,822,806.71 Decoration charge of
2,861,491.10 - - 2,861,491.10 self-owned houses
II. accumulated depreciation
Total accumulated
161,651,252.18 4,233,953.70 688,737.76 165,196,468.12 depreciation
Including: House& buildings 124,871,914.63 3,578,966.48 - 128,450,881.11 Machinery equipments 15,768,665.36 124,971.64 - 15,893,637.00 Transportation tools 5,704,485.10 224,427.35 679,618.82 5,249,293.63 Electronic equipment 7,553,762.51 260,957.46 9,118.94 7,805,601.03 Office and other equipment 5,183,078.95 44,630.77 - 5,227,709.72 Decoration charge of
2,569,345.63 - - 2,569,345.63 self-owned houses
III. total net value 155,545,205.87 151,535,777.80 Including: House& buildings 146,589,337.46 143,010,370.98 Machinery equipments 4,262,138.29 4,140,777.76 Transportation tools 1,398,093.80 1,092,983.34 Electronic equipment 2,394,231.09 2,404,403.26
Increase in the Decrease in the
Item 2013-12-31 2014-6-30
period period
Office and other equipment 609,259.76 595,096.99 Decoration charge of
292,145.47 292,145.47 self-owned houses
IV. total impairment provision 5,576,542.07 -- -- 5,576,542.07 Including: House& buildings 3,555,385.70 -- -- 3,555,385.70 Machinery equipments 1,646,060.95 -- -- 1,646,060.95 Transportation tools 6,165.00 -- -- 6,165.00 Electronic equipment 17,984.71 -- -- 17,984.71 Office and other equipment 69,562.98 -- -- 69,562.98 Decoration charge of
281,382.73 -- -- 281,382.73 self-owned houses
V. total book value 149,968,663.80 145,959,235.73 Including: House& buildings 143,033,951.76 139,454,985.28 Machinery equipments 2,616,077.34 2,494,716.81 Transportation tools 1,391,928.80 1,086,818.34 Electronic equipment 2,376,246.38 2,386,418.55 Office and other equipment 539,696.78 525,534.01 Decoration charge of
10,762.74 10,762.74 self-owned houses
Note: Depreciation in this period amounting to RMB
4,233,953.70.Original
price transfer from construction in progress to fixed assets amounting as RMB 0.00 in this year.
(2) Fixed assets with restriction in ownership
On 30 June 2014, the fix assets with book value approximately of
21,691,139.49
Yuan (original value of
36,216,402.19 Yuan) was mortgaged for the 18 million Yuan―Comprehensive CreditContract‖ with Shenzhen branch of CITIC and 40 million Yuan―Comprehensive CreditContract‖ with Baihua branch of China Guangfa Bank. The borrowing balance for underlying security dated 30 June 2014 was 33 million Yuan short-term loans (Note VII. 20) and 6.23 million Yuan note payable (Note VII.21)
(3) There was no temporary idle fixed asset at period-end.
(4) There were no fixed assets leasing-in by financing lease at period-end.
(5) There were no fixed assets leasing-out by operational lease at period-end.
(6) There were no fixed assets held for sale in period-end at period-end.
(7) Fixed assets with un-completed property certificates
Item Original book value Book value
Yongtong Building 103,389,580.16 49,652,707.21 Automobile Building 33,707,119.96 21,627,519.19 Plant in Taoyuan Road 9,255,094.00 5,186,216.56 Zhongtian Complex Building 3,259,325.31 1,476,894.42 Dormitory in Taoyuan Road 4,421,451.08 2,171,287.32 Zhonghe Building 8,312,377.03 6,142,788.15 No.188, Renmin Road (N) 196,747.13 5,902.41 No.100,Bao’an Section 2,457,540.00 1,328,212.53 5 rooms in Buxin Songquan Apartment 336,226.20 67,124.90 Total 165,335,460.87 87,658,652.69 The above said house& building shows no expected time for finished their property certificate due to the problem left over by history.
13. Construction in process
(1) Basic situation of construction in process
2014-6-30 2013-12-31
Item
Book balance Provision reserve Carrying value Book balance Provision reserve Carrying value Shuibei Jewelry Building 85,849,620.32 -- 85,849,620.32 41,642,020.40 -- 41,642,020.40 Other -- -- -- -- -- -- Total 85,849,620.32 -- 85,849,620.32 41,642,020.40 -- 41,642,020.40 (2) Changes of major projects under construction
Transfer to
Increase in the Other
Name Budget
2013-12-31 fixed assets in 2014-6-30 period decrease
the period
Shuibei JewelryBuilding* 413,640,000 41,642,020.40 44,207,599.92
-- -- 85,849,620.32 Total 41,642,020.40 44,207,599.92 -- -- 85,849,620.32 (Cont.)
Interest
Proportion of
Accumulated Including: interest
capitalization
Name
amount of interest capitalized amount
project investment Progress Capital source capitalization of the year
rate of the
year(%) in budget(%)
Shuibei Jewelry
4,191,386.72 2,211,400.03
-- 20.42% Self-raised Building
Total 4,191,386.72 2,211,400.03 -- 20.42% 自筹 14. Intangible assets
(1) Particular about intangible assets
Decrease in the
Item 2013-12-31 Increase in the period 2014-6-30 period
I. total original value 325,000.00 52,952,908.00 -- 53,277,908.00 Trademark right 75,000.00 -- -- 75,000.00 Software 250,000.00 274,685.00 -- 524,685.00 Land use rights -- 52,678,223.00 -- 52,678,223.00 II. total accumulated amortization 291,744.96 112,419.48 -- 404,164.44 Trademark right 41,744.96 3,750.00 -- 45,494.96 Software 250,000.00 18,312.32 -- 268,312.32 Land use rights -- 90,357.16 -- 90,357.16 III. Total impairment accumulative -- -- -- -- Trademark right -- -- -- -- Software -- -- -- -- Land use rights -- -- -- -- IV. Total book value 33,255.04 -- -- 52,873,743.56 Trademark right 33,255.04 -- -- 29,505.04 Software -- -- -- 256,372.68 Land use rights -- -- -- 52,587,865.84 Note: The amount amortized in this period accounting as RMB 112,419.48.
15. Long-term deferred expense
Amortizatio Other Reasons for Increase in
Item 2013-12-31
n during this decrea
2014-6-30 other the period
period se
decrease Decoration charge 685,239.38 9,230.00 136,691.17 - 557,778.17
Insurance charge for pledge from the bank and
162,799.58 - 49,874.04 - 112,925.58
commitment charge for loan limit
Total 848,039.96 9,230.00 186,565.21 - 670,703.75
16. Deferred income tax assets/ deferred income tax liabilities
(1) Recognized deferred income tax assets and deferred income tax liabilities
① Recognized deferred income tax assets
2014-6-30 2013-12-31
Item
Deferred income tax offset-able differences and Deferred income offset-able differences and assets offset-able losses tax assets offset-able losses Provision of assets 19,654,147.70 78,616,590.74 19,645,247.90 78,580,991.56 impairment
Equity investment difference 3,711,034.83 14,844,139.31 3,711,034.83 14,844,139.31 Un-realized transaction profit
1,190,948.88 4,763,795.52 1,210,419.98 4,841,679.92 with affiliated companies
Total 24,556,131.41 98,224,525.57 24,566,702.71 98,266,810.79② Recognized deferred income tax liabilities
2014-6-30 2013-12-31
Item
Deferred income tax Taxable temporary Deferred income tax Taxable temporary liabilities difference liabilities difference
Depreciation of fixed assets 846,146.21 3,384,584.84 969,445.98 3,877,783.92 Change of fair value of
financial asset available for
256,554.88 1,026,219.52 278,641.88 1,114,567.52 sale included in capital
reserve
Total 1,102,701.09 4,410,804.36 1,248,087.86 4,992,351.44
（2）Details of unrecognized deferred income tax assets
Item 2014-6-30 2013-12-31
Offset-able differences
20,855,384.70 20,855,384.70 Offset-able losses 15,039,008.41 16,879,644.87 Total 35,894,393.11 37,735,029.57 (3) Offset-able losses of the unrecognized deferred income tax assets will expire the following year
Year 2014-6-30 2013-12-31 Note
2014 3,660,259.13 16,785,106.07
2015 9,065,002.36 9,065,002.36
2016 9,597,431.58 9,597,431.58
2017 8,299,651.49 8,299,651.49
2018 23,771,388.00 23,771,388.00
2019 5,762,301.07 --
Total 60,156,033.63 67,518,579.50
17. Other non-current assets
Item 2014-6-30 2013-12-31
50% land price in advance to Shuibei Jewelry Building -- 26,339,112.00 Total -- 26,339,112.00 18. Details of asset Impairment Provision
Provision in the
Decrease in the period 2014-6-30 Item 2013-12-31
period
Written back Transferred
I. bad debt provision 98,445,100.88 35,599.18 -- -- 98,480,700.06 II. Held-to-maturity investment 20,000.00 20,000.00 -- -- --
impairment provision
III. Inventory impairment provision 28,755,001.87 -- -- -- 28,755,001.87 IV. Long-term equity investment 31,385,089.21 31,385,089.21 -- -- --
impairment provision
Provision in the
Decrease in the period 2014-6-30 Item 2013-12-31
period
Written back Transferred
V. Fixed assets impairment provision 5,576,542.07 -- -- -- 5,576,542.07 Total 164,181,734.03 35,599.18 -- -- 164,217,333.21 19. Assets with restriction in ownership or the right to use
Item 2014-6-30 Restriction reasons
Subtotal of assets for guarantee:
Investment real estate 82,793,946.64 Mortgage for bank loans
Fixed assets 21,691,139.49 Mortgage for bank loans and bank acceptance
Total 104,485,086.13
20. Short-term loans
(1) Type of Short-term Loans
Item 2014-6-30 2013-12-31
Collateral loan 162,000,000.00 90,217,530.93 Guarantee loans 20,741,296.00 20,752,422.00 Total 182,741,296.00 110,969,952.93 The category and amount of assets mortgaged for loans found more in Note VII.11 and Note VII. 12
The guarantee loans in the Period including
18,941,296.00
Yuan borrowings from parent company Shenzhen SDG Co., Ltd., payment term was not specified.
(2) There are no overdue loans in this report period-end.
21. Note payable
Type 2014-6-30 2013-12-31
Bank acceptance 6,225,651.90 15,920,748.09 Trade acceptance -- -- Total 6,225,651.90 15,920,748.09 22. Account payables
(1)Details of Account payables
Item 2014-6-30 2013-12-31
Account payables 22,062,234.53 22,008,010.24 Total 22,062,234.53 22,008,010.24
(2)
Accounts payable to shareholders or related party holding5%(5% included) or above voting shares of the Company in reporting period, found more details in (2) Account payable/receivable in advance to related party of Note VIII. 6
(3) Explanation on major account payable with over one year age:
Return after statement Creditor Amount Unsettled reasons
date or not Not paid from related
Shenzhen SDG Real Estate Co., Ltd. 6,054,855.46 No
company
Total 6,054,855.46
23. Account received in advance
(1) Classify by age
Item 2014-6-30 2013-12-31
within 1 year
1,504,132.84 21,318,369.31 1-2 years
38,816.50 38,816.50 2-3 years
23,139.00 41,632.58 Over 3 years
662,551.70 689,048.12 Total 2,228,640.04 22,087,866.51 The account received in advance with over 3 year account age refers to the amount received in advance from subsidiary Inspection Equipment Company, the amount was not carried forward due to the client un-accepted for in process of equipment installation and debugging.
(2)In the period, no account received in advance from shareholders with5%(5%included) voting shares of the Company or related companies.
24. Wages payable
Decrease in the
Item 2013-12-31 Increase in the period 2014-6-30
period
I. Wage, bonus, allowance and subsidy
11,477,893.29 19,611,714.28 21,109,708.23 10,172,133.29 II.Employees’ welfare
-- 925,014.62 925,014.62 -- III. Social security
715,031.09 4,691,947.96 4,840,396.14 195,088.83 IV. Housing public reserve
1,628,327.80 1,484,951.63 1,474,760.10 2,003,259.16
V. Labor union expenditure and employee
339,784.94 509,102.18 594,657.76 253,550.16 education expenses
VI. Compensation from labor relationship
-- 244,818.37 244,818.37 -- dismissed
VII. Other
247,650.50 84,035.00 82,830.00 64,055.00 Total 14,408,687.62 27,551,584.04 29,272,185.22 12,688,086.44 25. Tax payable
Item 2014-6-30 2013-12-31
VAT 575,208.45 547,825.41 Business tax
801,302.00 846,602.53 Enterprise income tax
1,082,277.96 8,474,718.22 Property right tax
848,779.91 847,387.91 land VAT
5,362,442.05 5,362,442.05 Land use tax 163,153.47 171,606.95 Personal income tax
76,187.93 89,774.62 City maintenance and construction tax
97,792.37 128,615.66 Educational surcharge
140,163.99 162,890.42 Embankment fee
160.79 1,687.03 Other
28,105.87 53,711.42 Total 9,175,574.79 16,687,262.22 26. Other payables
Item 2014-6-30 2013-12-31
Relevance contact, borrowings and interests 62,065,414.60 58,996,200.34 Deposit and margin 13,459,101.47 12,242,528.34 Compensation of joint liability for 2,130,200.00 2,130,200.00 GuangmingCase*
Other 38,043,645.75 34,440,656.98 Total 115,698,361.82 107,809,585.66 (1)
Other payable to shareholders or related party holding5%(5% included) or above voting shares of the Company in reporting
period, found more details in (2) Account payable/receivable in advance to related party of Note VIII. 6
(2) Explanation on other payable with major amount
Creditor 2014-6-30 Age Nature or content
Shenzhen SDG Co., Ltd. 56,820,523.00 O ver 3 years Relevance contact, borrowings and interests
Total 56,820,523.00
27. Non-current liability due within one year
(1)Details of long-term liabilities due within one year
Item 2014-6-30 2013-12-31
Long-term loans due within one year (Note VII. 28) 12,000,000.00 12,000,000.00 Total 12,000,000.00 12,000,000.00 (2) Long-term loans due within one year
①Details of long-term loans due within one year
Item 2014-6-30 2013-12-31
Collateral loan 12,000,000.00 12,000,000.00 Total 12,000,000.00 12,000,000.00②Top five long-term loans due within one year
Starting
Termination date Currenc
Unit
date for
Rate(%) 2014-6-30 2013-12-31 for loans
y
loans
Paid 1.5 million
Yuan every 3
Shenzhen Branch of CITIC Bank 2012/7/27 7.0725 RMB 6,000,000.00 6,000,000.00 months since 27
Oct. 2012
Paid 1.5 million
Shenzhen Branch of Shanghai Yuan every 3
2012/9/27 6.4575 RMB 6,000,000.00 6,000,000.00 Pudong Development Bank months since 27
Dec. 2012
Total 12,000,000.00 12,000,000.00③ No overdue loans in long-term loans due within one year
28. Long-term loan
(1) Category of long-term loans
① Category of long-term loans
Item 2014-6-30 2013-12-31
Collateral loan 64,000,000.00 70,000,000.00 Loan in credit 73,000,000.00 73,000,000.00 Less: long-term loans due within one year
12,000,000.00 12,000,000.00 (Note VII. 27)
Total 125,000,000.00 131,000,000.00 The category and amount of assets mortgaged for
collateral
loans found more in Note VII.11
The
loan in credit
refers to the borrowings from parent company Shenzhen SDG Co., Ltd.
②Top five long-term loans
Starting date Termination Currenc
Unit Rate(%) 2014-6-30 2013-12-31 for loans date for loans
y
Shenzhen SDG Co., Ltd. 2012/12/25 2015/12/24 6.00
RMB
73,000,000.00 73,000,000.00 Shenzhen Branch of CITIC Bank 2012/7/27 2015/7/27 7.0725
RMB
19,500,000.00 22,500,000.00 Shenzhen Branch of Shanghai RMB
Pudong Development Bank 2012/9/27 2015/9/27 6.4575 32,500,000.00 35,500,000.00 Total 125,000,000.00 131,000,000.00 29. Long-term account payable
(1) Category of long-term account payable
Item 2014-6-30 2013-12-31
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 9,399,521.23 9,399,521.23 Total 13,319,681.59 13,319,681.59 30. Other non-current liability
Item Content 2014-6-30 2013-12-31
Deferred income Unearned rent*Note① 31,211,904.55 29,823,013.37
Item Content 2014-6-30 2013-12-31
Total 31,211,904.55 29,823,013.37*Note①: the rent pre-collected from Shuibei Jewelry Building, the Company subsequently stated at amortized cost using the effective interest method.
31. Share capital
Increased/decreased(+,-) in the
Item 2013-12-31 2014-6-30
Period
Shares
Bon
New converted
us Othe Sub-
Amount Ratio shares from Amount Ratio shar r total
issued public
es
reserve
I. Restricted shares
1. State-owned shares
-- -- -- -- -- -- -- -- -- 2. State-owned legal
person’s shares
14,587,056.006.62% -- -- -- -- -- 14,587,056.00 6.62% 3. Other domestic shares
-- -- -- -- -- -- -- -- -- Including: Domestic legal
person’s shares
-- -- -- -- -- -- -- -- -- Domestic naturalperson’s
shares
-- -- -- -- -- -- -- -- -- 4. Foreign shares
-- -- -- -- -- -- -- -- -- Including: Foreign legal
person’s shares
-- -- -- -- -- -- -- -- -- Foreign naturalperson’s
shares
-- -- -- -- -- -- -- -- -- Total restricted shares 14,587,056.006.62% -- -- -- -- -- 14,587,056.00 6.62% II. Unrestricted shares
1. RMB Ordinary shares
179,294,544.0081.39% -- -- -- -- -- 179,294,544.00 81.39% 2. Domestically listed
foreign shares
26,400,000.0011.98% -- -- -- -- -- 26,400,000.00 11.98% 3. Overseas listed foreign
shares
-- -- -- -- -- -- -- -- -- 4. Others
-- -- -- -- -- -- -- -- -- Total unrestricted shares 205,694,544.0093.38% -- -- -- -- -- 205,694,544.00 93.38% III. Total shares 220,281,600.00 100% -- -- -- -- -- 220,281,600.00 100% Note: unrestricted shares including 131,283,504 shares held by parent company SDG
32. Capital reserves
Increase in the Decrease in the
Item 2013-12-31 2014-6-30 period period
Capital premium 3,024,773.35 -- -- 3,024,773.35 Other comprehensive income 835,925.67 -- 66,261.00 769,664.67 Including: Variation of the fair values of financial 835,925.67
-- 66,261.00 769,664.67 assets available for sale
Other capital reserve 4,647,832.16 -- -- 4,647,832.16 Total 8,508,531.18 -- 66,261.00 8,442,270.18 33. Surplus reserves
Increase in the
Item 2013-12-31 Decrease in the period 2014-6-30 period
Statutory surplus reserves 2,952,586.32 -- -- 2,952,586.32 Total 2,952,586.32 -- -- 2,952,586.32 34 Retained profits
(1) Changes of retained profits
Withdrawal or Item Jan.- Jun. 2014 2013
Allocation Ratio Undistributed profits at the end of last year before -47,291,479.26
-40,390,760.22
adjustment
Adjust the total undistributed profits at the beginning of the
--
--
year (Increase+, Decrease -)
Undistributed profits at the beginning of the year after
-47,291,479.26
-40,390,760.22
adjustment
Add: The net profits belong to owners of patent company
6,900,719.04
5,380,420.81
of this year
Cover losses by surplus reserves -- --
Other transfer in -- --
Less: Withdraw statutory surplus reserves -- --
Withdraw free surplus reserves -- --
Common stock dividends payable -- --
Common stock dividends transferred to capital stock -- --
Retained profits at end of the year -35,010,339.41 -40,390,760.22
35. Operating income and cost
(1) Operating income and cost
Item Jan.- Jun. 2014 Jan.- Jun. 2013
Main operating income
225,621,469.48 211,302,424.66 Other operating income
3,071,072.38 10,784,893.60 Total operating income 228,692,541.86 222,087,318.26 Main operating cost
193,600,770.84 181,245,324.99 Other operating cost
1,697,370.75 1,842,324.87 Total operating cost 195,298,141.59 183,087,649.86 (2) Primary business (By industries)
Jan.- Jun. 2014 Jan.- Jun. 2013
Industry
Operating income Operating cost Operating income Operating cost Auto sales 159,587,553.83 155,270,536.50 140,623,182.08 139,147,318.08 Auto maintenance and repair
22,878,151.96 18,282,121.04 25,819,884.09 19,821,958.48 Leasing and services
43,155,763.69 20,048,113.30 44,859,358.49 22,276,048.43 Total 225,621,469.48 193,600,770.84 211,302,424.66 181,245,324.99 (3) Primary business (By districts)
Jan.- Jun. 2014 Jan.- Jun. 2013
District
Operating income Operating cost Operating income Operating cost Shenzhen 225,621,469.48 193,600,770.84 211,302,424.66 181,245,324.99 Total 225,621,469.48 193,600,770.84 211,302,424.66 181,245,324.99 (4) The operating income of the top five customers of the Company
Operating income of the top five The percentage in all operating income Customer
customers of the Company(%)
Shenzhen Zung Fu Tellus Co., Ltd. 2,575,000.02 1.13 Shenzhen Yiquan Investment Consultant Co., 1,764,000.00 0.77
Ltd.
Shenzhen branch of Ping An Bank Co., Ltd. 1,329,022.20 0.58 Shenzhen Xingguangda Jewelry Industrial Co.,
1,257,306.00 0.55 Ltd
Chen Zhonghua 1,109,029.00 0.48 Total 8,034,357.22 3.51 36. Business tax and surcharges
Item Jan.- Jun. 2014 Jan.- Jun. 2013
Business tax
1,952,501.60 2,356,351.15 City maintenance and construction tax
298,572.74 303,704.66 Education surcharge
212,774.01 216,822.23 Total 2,463,848.35 2,876,878.04 Note: Calculation standards for business tax and surcharges found more in Note V. Taxes
37. Sales expenses
Item Jan.- Jun. 2014 Jan.- Jun. 2013
Employee compensation 5,271,556.10 5,007,223.41 Depreciation and amortization 667,978.08 614,301.93 Taxes 489,777.87 492,384.00 Office expenses 263,384.89 265,943.33 Operating expense 138,610.00 185,458.70 Advertising and exhibition expenses 39,381.94 368,256.66 Utilities 145,209.12 115,149.11 Transportation expenses 326,356.13 253,973.24 Communication postal fees 167,046.07 168,391.57 Other 1,672,722.1 1,971,293.34 Total 9,182,022.30 9,442,375.29 38. Administration expense
Item Jan.- Jun. 2014 Jan.- Jun. 2013
Employee compensation 8,297,822.37 8,153,354.01
Taxes 1,460,536.21 1,529,135.89 Office expenses 883,578.61 1,021,631.34 Depreciation and amortization 806,349.97 760,537.65 Travelling expense 373,744.40 529,831.95 Operating expense 438,464.00 698,050.50 Conference fee 149,600.06 274,807.56 Transportation expenses 871,444.00 911,919.70 Communication postal fees -- 278,062.36 Other 2,910,479.65 3,749,336.39 Total 16,192,019.27 17,906,667.35 39. Financial expenses
Item Jan.- Jun. 2014 Jan.- Jun. 2013
Interest expenses
8,137,300.87 7,727,022.63 Less: Interest income
206,703.02 169,413.90 Exchange gains and losses 20,969.24 -38,375.55 Bank charges 277,596.25 270,849.60 Total 8,229,163.34 7,790,082.78 40. Investment income
(1) Particulars about investment income
Item Jan.- Jun. 2014 Jan.- Jun. 2013 Income of long-term equity investment calculated based on equity 7,841,475.98 1,707,144.32 Investment income obtained during holding available-for-sale
financial assets -- 72,938.25 Total 7,841,475.98 1,780,082.57 Note: the repatriation of investment gains of the Group has no major restriction except the situation stated in Note VII 10(3) (2) Income of long-term equity investment calculated based on equity
Company Jan.- Jun. 2014 Jan.- Jun. 2013 Reasons of change(+,-) Shenzhen Zung Fu Tellus Auto Service Co., 6,482,504.95 951,521.96 Profit of the invested unit
Company Jan.- Jun. 2014 Jan.- Jun. 2013 Reasons of change(+,-) Ltd. increased
Shenzhen Dongfeng Motor Company Profit of the invested unit 1,503,366.02 642,704.20
increased
Other -144,394.99 112,918.16
Total 7,841,475.98 1,707,144.32
41. Asset impairment loss
Item Jan.- Jun. 2014 Jan.- Jun. 2013 Bad debt loss 35,599.18 100,000.00 Total 35,599.18 100,000.00 42. Non-operating income
Item Jan.- Jun. 2014 Jan.- Jun. 2013
Non-current assets disposal gains
172,812.80 215,227.83 Thereinto: fixed assets disposal gains
172,812.80 215,227.83 Penalty and liquidated damages income
-- -- Others
52,439.11 7,333.93 Total 225,251.91 222,561.76 43. Non-operating expenditure
Item Jan.- Jun. 2014 Jan.- Jun. 2013
Total losses from disposal of non-current assets -- 14,002.00 Including: losses from disposal of fixed assets -- 14,002.00 Other 2,633.01 9,751.00 Total 2,633.01 23,753.00
44. Income tax expense
Item Jan.- Jun. 2014 Jan.- Jun. 2013 Current income tax calculated based on tax law and relevant rules
813,761.54 195,375.12 Deferred income tax adjustment
-112,728.47 -- Total 701,033.07 195,375.12 45. Basic EPS (earnings per share) and diluted EPS
Basic EPS is calculated with divide current net profit attributable to the shareholders of ordinary shares of the Company by weighted average number of ordinary shares outstanding. As for the ordinary shares newly issued, recognize according to detail terms of the offering contract, since the date of consideration receivable (usually refers to the date stock issued).
Numerator of the diluted EPS will recognized after the followed factors adjusted based on current net profit attributable to shareholders of ordinary shares of the Company: (1) interest of dilutive potential ordinary share which was recognized as expenses; (2) income or expenses while the dilutive potential ordinary share converted; and (3) impact on income tax with the above mentioned adjustment concerned
Denominator of diluted EPS equals the followed two items: (1) weighted average number of ordinary shares outstanding of the parent company in basic EPS; and (2) weighted average number of ordinary shares, which was increased from conversion of dilutive potential ordinary share under circumstance of assumption
The dilutive potential ordinary share issued in previous period, assuming to converted in the year, while calculated the weighted average number of ordinary shares, which was increased from conversion of dilutive potential ordinary share; the dilutive potential ordinary share issued in the year, assuming to convert on the offering date.
(1) Basic EPS and diluted EPS
Jan.- Jun. 2014 Jan.- Jun. 2013
Profit in the period
Basic EPS Diluted EPS Basic EPS Diluted EPS
Net profit attributable to the
shareholders of ordinary 0.0244 0.0244 0.017 0.017 shares of the Company
Net profit attributable to the
shareholders of ordinary
shares after the deduction of 0.0237 0.0237 -0.015 -0.015 non-recurring gains and
losses
(2) Calculation of basic earnings per share and diluted earnings per share
①Net profit attributable to shareholders of ordinary shares while basic EPS counts:
Item Current period Last period Net profit attributable to the shareholders of ordinary shares 5,380,420.81 3,746,434.89 Including: net profit attributable to sustainable operation 5,380,420.81 3,746,434.89
Item Current period Last period Net profit attributable to discontinued operation -- -- Net profit attributable to the shareholders of ordinary shares of the
5,215,240.02 -3,413,773.73 Company after deducting non-recurring gains/losses
Including: net profit attributable to sustainable operation 5,215,240.02 -3,413,773.73 Net profit attributable to discontinued operation -- -- In the period, the Company has no dilutability potential ordinary shares, thus, the diluted EPS is equals to the basic EPS
②Denominator refers to the weighted average amount of ordinary shares issued while basic EPS counts:
Item Current period Last period
Number of ordinary shares outstanding at year-begin 220,281,600.00 220,281,600.00 Add: Weighted average number of ordinary shares
-- -- outstanding this year
Less: Weighted average number of ordinary shares buy-back
-- -- in the year
Weighted average number of ordinary shares outstanding at
220,281,600.00 220,281,600.00 year-end
46. Other comprehensive income
Item Current period Last period①(cid:1) Gains (losses) amount generated by available-for-sale financial assets -88,348.00 -248,916.25 Less: affected by income tax generated by available-for-sale financial assets -22,087.00 -- Net amount reckoned in other comprehensive income at earlier stage but
-- -- turned to gains and losses at the current period
Subtotal -66,261.00 -248,916.25②Other -- -- Less: affected by income tax reckoned in other comprehensive income -- -- Net amount reckoned in other comprehensive income at earlier stage but turned
-- -- to gains and losses at the current period
Subtotal -- -- Total -66,261.00 -248,916.25 47. Notes to statement of cash flow
(1) Other cash received in relation to operation activities
Item Jan.- Jun. 2014 Jan.- Jun. 2013 Contact amount between related parties 1,164,466.17 22,490,881.00 Interest income 168,989.20 169,413.90 Income from penalty and compensation received 3,614.82 -- Other operating temporary receipts 24,422,700.48 28,008,026.45 Total 25,759,770.67 50,668,321.35 (2) Other cash paid in relation to operation activities
Item Jan.- Jun. 2014 Jan.- Jun. 2013 Contact amount between related parties 18,700,479.91 28,709,172.94 Expenses of cash paid
3,731,935.00 3,669,178.50 Expenses of management cash paid
7,691,534.93 8,876,900.21 Total 30,123,949.84 41,255,251.65 (3) Cash paid related with investment activities
Item Jan.- Jun. 2014 Jan.- Jun. 2013 Service charge and handling charge of housing transaction -- 384,657.57 Total -- 384,657.57 (4) Cash paid related with financing activities
Item Jan.- Jun. 2014 Jan.- Jun. 2013 Cash paid for financing costs occurred -- 20,000.00 Total -- 20,000.00 48. Supplementary information to statement of cash flow
(1)Net profit adjusted to cash flow of operation
Item Jan.- Jun. 2014 Jan.- Jun. 2013 Net profit adjusted to cash flow of operation activities:
Net profit
4,654,809.64 2,667,181.15 Add: Provision of assets impairment 35,599.18 100,000.00 Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets
6,519,600.24 6,169,692.35 Amortization of intangible assets
112,419.48 28,749.96 Amortization of long-term deferred expenses
186,565.21 160,868.85 Loss from disposal of fixed assets, intangible assets and other long-term assets(gain is listed with―-‖)
-172,812.80 -7,247,156.82
Item Jan.- Jun. 2014 Jan.- Jun. 2013 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―-‖)
8,137,300.87 7,727,022.63 Investment loss (gain is listed with―-‖)
-7,841,475.98 -1,780,082.57 Decrease of deferred income tax asset( (increase is listed with―-‖)
10,571.30 -- Increase of deferred income tax liability (decrease is listed with―-‖)
-123,299.77 -- Decrease of inventory (increase is listed with―-‖)
19,059,705.51 11,691,081.34 Decrease of operating receivable accounts (increase is listed with―-‖)
-11,071,423.18 -16,154,336.58 Increase of operating payable accounts (decrease is listed with―-‖) -23,692,871.66
3 2 ,935,442.06 Others
-- -- Net cash flow arising from operating activities -4,185,311.96 36,298,462.37 (2) Constitution of cash and cash equivalent
Item 2014-6-30 2013-12-31
①(cid:1) Cash 55,861,580.07 63,166,448.10 Including: stock cash
146,293.44 126,751.33 Bank deposit available for payment at any time
55,712,194.45 63,018,754.91 Other monetary fund available for payment at any time
3,092.18 20,941.86②Cash equivalent -- -- Including: bond investment matured within 3 months -- --③Balance of cash and cash equivalent at year-end 55,861,580.07 63,166,448.10 VIII. Related Parties and Transactions
1. Parent company of the Company
Legal
Registration
Parent company
Relationship Nature representativ Business nature
place
e
Limited Development and operation of Parent Zhang
Shenzhen SDG Co., Ltd.
liability
Shenzhen real estate and domestic company
company
Junlin
commerce
(Cont.)
Proportion of shares
Registered Proportion of voting right Final controller of the Organization Parent company
held to the
capital to the Company(%) Company code Company(%)
Shenzhen SDG Co.,
1,582,820,000 66.22 66.22 SASAC of Shenzhen 192194195 Ltd.
2. Subsidiary of the Company
Found more in Note VI. 1: Particular about subsidiary
3. Details of joint-venture and affiliated enterprise of the Company
Found more in Note VI. 10(5)
4. Particulars about other related parties
Other related parties Relationship Organization code
Shenzhen SDG Swan Industrial Company Ltd. Subsidiary of parent company 192473856
Shenzhen Machinery Equipment Imp& Exp. Subsidiary of parent company 19034097X
Company
Shenzhen SDG Real Estate Co., Ltd. Subsidiary of parent company 279365997
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 192260957
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 transaction with commodity, labor service and operating lease concerned
①Related transaction of goods purchasing/accepting labor service/operating rent-in
Jan.- Jun. 2014 Jan.- Jun. 2013
Pricing way
Ratio in and decision
Related party Content
Ratio in similar similar making
Amount Amount
transactions(%) transactions procedures
(%)
-- -- -- -- -- -- --②Related transaction of goods sold/ labor service providing/operating rent-out
Related party Content Pricing way Jan.- Jun. 2014 Jan.- Jun. 2013
and decision Ratio in making Ratio in similar similar Amount Amount
procedures transactions(%) transactions(%)
Shenzhen Zung Fu Tellus House Market
2,575,000.02 5.97 2,575,000.02 5.74 Auto Service Co., Ltd. leasing pricing
Shenzhen New Yongtong
House Market
Automobile Services Co., 188,958.00 0.44 185,277.00 0.41 leasing pricing
Ltd.
Shenzhen New Yongtong
House Market
Dongxiao Auto Service 138,600.00 0.32 135,900.00 0.30 leasing pricing
Co., Ltd.
(2) Related leasing
①Act as a lessor for the Group
Leasing Pricing basis
Type of Terminate income Lessor Lessee Starting from for leasing
leasing d dated recognized in income
the year Shenzhen Tellus (Group) Shenzhen Zung Fu
House,
Co., Ltd. Tellus Auto Service Co., 2005-1-1 2025-1-1 Contract price 5,150,000.00 building
Ltd.
Shenzhen Tellus New Shenzhen New
House,
Yongtong Automobile Yongtong Automobile 2012-4-1 2015-3-31 Contract price 380,370.00 building
Development Co. Ltd Services Co., Ltd.
Shenzhen Tellus New Shenzhen New
House,
Yongtong Automobile Yongtong Dongxiao 2012-4-1 2015-3-31 Contract price 279,000.00 building
Development Co. Ltd Auto Service Co., Ltd.
(3) Related guarantee
There was no related guarantee in the period.
(4) Borrowed funds from related party
Starting Terminated
Related party
Borrowed funds Note
from dated
Borrow-in:
Shenzhen SDG Co., Ltd. 73,000,000.00 2012/12/25 2015/12/24
In addition to the loan, between the issuer and its subsidiaries andidiopathic group because
of historical reasons for the formation of a number of debtor creditor relationship, Mainly because short-term borrowing for idiopathic group rite group formed by transfer of credit and other reasons, as well as the special group because offunds between history and interest payable without repayment on the formation of other payables.of the group.
(5) Related fund occupation expenses
Fund occupation expenses Jan.- Jun. 2014 Jan.- Jun. 2013
Lending funds from the Group:
Shenzhen Xinglong Machinery Mould Co., ltd. 37,708.32 37,708.32 Borrowing funds by the Group:
Shenzhen SDG Development Center Construction
Supervision Co., Ltd. -- -- Shenzhen SDG Co., Ltd. 2,632,260.00 2,632,260.00 Pricing policy: accounted the fund occupation expenses on market interest rate for inter-bank borrowing and lending transaction (6) Remuneration of the key management personnel
Annual remuneration section Jan.- Jun. 2014 Jan.- Jun. 2013
Total
2.63 million Yuan 2.65 million Yuan Including: (numbers in every amount section)
Over 0.2 million Yuan
10 10 0.15 million Yuan～0.2 million Yuan
0 0 0.1 million Yuan～1.5 million Yuan
0 0 Under 0.1 million Yuan
3 4 6. Account receivable/payable for related parties
(1) Account receivable / paid in advance from/to related party
2014-6-30 2013-12-31
Item
Book balance Provision for Book balance Provision for bad bad debts debts
Account receivable:
Shenzhen New Yongtong Automobile Services 927,602.00 336,254.35 927,602.00 336,254.35 Co., Ltd.
Shenzhen New Yongtong Dongxiao Auto Service 680,400.00 246,645.00 680,400.00 246,645.00
2014-6-30 2013-12-31
Item
Book balance Provision for Book balance Provision for bad bad debts debts
Co., Ltd.
Total 1,608,002.00 582,899.35
1,608,002.00 582,899.35 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 44,388.01
167,760.22 44,388.01 Shenzhen Yongtong Xinda Inspection Equipment -- 515,235.47 -- Co., Ltd. 516,370.47
Shenzhen Xiandao Chemical New Material Co., 708,072.26 708,072.26 708,072.26 708,072.26 Ltd.
Shenzhen Xinglong Machinery Mould Co., ltd. 1,995,961.34 883,980.71 1,958,253.02 883,980.71 Shenzhen Tellus New Yongtong Auto Service Co., 204,776.33 102,388.17 ltd. 204,776.33 102,388.17
Shenzhen Tellus Hang Investment Co., ltd. -- -- -- -- Shenzhen Tellus GEM investment Co., Ltd. 9,483.57
-- 10,782.72 -- Total 4,910,441.19 3,098,126.15 4,924,177.02 3,098,126.15 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) Account payable/received in advance to/ from related party
Item 2014-6-30 2013-12-31
Short-term loans
Shenzhen SDG Co., Ltd. 18,941,296.00 18,952,422.00 Total 18,941,296.00 18,952,422.00 Account payable:
Shenzhen SDG Real Estate Co., Ltd. 6,054,855.46 6,054,855.46 Shenzhen Machinery Equipment Imp& Exp. 45,300.00 45,300.00
Company
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. 1,836,580.68 1,816,174.87 Shenzhen SDG Swan Industrial Company Ltd. 20,703.25 20,703.25 Shenzhen Machinery Equipment Imp& Exp. 1,069,869.30 991,556.64 Company
Shenzhen SDG Co., Ltd. 56,820,523.00 53,857,950.77 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. 11,561.48 3,637.92 Total 62,065,414.60 58,996,200.34 Long-term loans:
Shenzhen SDG Co., Ltd. 73,000,000.00 73,000,000.00 Total 73,000,000.00 73,000,000.00 IX. Contingency
1. Contingent liability and its financial influence formed by un-settle lawsuits or arbitration
(1)In 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 the approval for the financial report disclosed. 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 Company has not yet received the money from Jintian till the disclosure day.
(2) Subsidiary 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.
X. Events occurring after the balance sheet date
The Company has no major events occurring after the balance sheet date which should disclosed
XI. Other explanations on major event
1. Litigation judgment
On June 20, 2012, the Company received summons from Shenzhen Futian District People's Court, which was about loan contract disputes between Ezhou Liantai Capital Ltd and China Construction Bank ShenzhenBao’an branch (hereinafter referred to as " Construction Bank ") regarding Shenzhen Guangming Industry Co. Ltd. (hereinafter referred to as the "Guangming Company"), bringing a civil lawsuit to the subsidiary of the Company Auto Industrial and Trading Company.
Guangming Company is an associate company of Auto Industrial and Trading Company in 1990 by share of10%. This company took bank loans of RMB 2,000,000 with a period of 9 months on December 12, 1990. In October 1992Guangming Company has paid 100,000 Yuan. ShenzhenBao’an District People's Court (1996) BAJZ No. 183 judged that Guangming Company should repay the loan of RMB 1,900,000 and interest to Construction Bank. And Shenzhen Intermediate People's Court (1996) SZFJYZ No.563 made final judgment upheld the original. Guangming Company never performed after the verdict, CCB asked for compulsory execution of return of 1,640,000 Yuan. Due to no property available for enforcement, the court ofBao’an District in May 20, 2003 (1997) SBFZZ No. 220th ruled the termination of execution. In June 2004, the original creditor Construction Bank transferred all the above creditor's rights to Asset Management Co. Transferred by several times, in 2008 April Ezhou Liantai Capital Ltd raises its acquisition of the creditor's rights.
Shenzhen City Administration of industry and Commerce revoked GuangmingCompany’s business license on February 28, 2002. Ezhou Liantai Capital Ltd in May 2012appealed Guangming Company and Auto Industrial
and Trading Company to Shenzhen Futian District People's Court, requesting Guangming Company to pay 3,607,000 Yuan and real interest accounted from May 11, 2012 to the date of liquidation. And it required Auto Industrial and Trading Company to take joint liability for the debts "as its final shareholder because no liquidation group is formed within the statutory time limit".
The Company received a paper of civil judgment-- (2012) Shen Fu Fa Min Er Chu Zi No. 4328 from Shenzhen Futian DistrictPeople’s Court in 2013. Automobile Industrial and Trade Company take joint responsibility of debt payment as the defendant Guangming Company judged in paper of civil judgment -- (1996) Shen Zhong Fa Jing Yi Zhong Zi No. 563. The Company appeals to the Court, and Shenzhen IntermediatePeople’s Court carried out a Civil Judgments (2013) Shen Zhong Fa Shang Zhong Zi No. 1677 on 12 December 2013 and affirm the original judgment as result. The payable joint liability 2.1302 million Yuan was accrual by the Company. Shenzhen Auto Industry and Trade Corporation is work on the appeals recently, Guangdong HigherPeople’s Court has accepted and filed the case.
2. Exchange of non-monetary assets
The Company has no event of non-monetary assets exchange that needs to disclose up to 30 June 2014
3. Debt restructuring
The Company has no debt restructuring that needs to disclose up to 30 June 2014
4. Business combination
The Company has no business combination that needs to disclose up to 30 June 2014
5. Leasing
The Company has no leasing that needs to disclose up to 30 June 2014
6. Outstanding financial instrument which can be converted to shares
The Company has no financial instrument that needs to disclose up to 30 June 2014
7. Assets and liability measured by fair value
Variation Accumulative Impairment
Item 2013-12-31 gains/losses variation of fair value accrual in 2014-6-30 from fair values reckoned into equity the year
Financial assets
Financial assets available for sale 1,480,168.80 -88,348.00 1,026,219.55 -- 1,391,820.80 Total financial assets 1,480,168.80 -88,348.00 1,026,219.55 -- 1,391,820.80 8. Main content of pension plan and major changes
The Company has no pension plan that needs to disclose up to 30 June 2014
9. Discontinuing operation
The Company has no discontinuing operation that needs to disclose up to 30 June 2014
XII. Principle notes of financial statements of company
1. Accounts receivable
(1) Classified according to category of accounts receivable
2014-6-30
Type
Book balance Bad debt reserves Amount Ratio(%) Amount Ratio(%) Account receivable with major single amount and provision for
-- -- -- -- bad debt reserve on a single basis
Account receivable with bad debt reserve provision on an age basis -- -- -- -- Account receivable with minor single amount but provision for bad
484,803.08 100.00 484,803.08 100.00 debt reserve on a single basis
Total 484,803.08 100.00 484,803.08 100.00 (Cont.)
2013-12-31
Type Book balance Bad debt reserves Amount Ratio(%) Amount Ratio(%) Account receivable with major single amount and provision for
-- -- -- -- bad debt reserve on a single basis
Account receivable with bad debt reserve provision on an age basis -- -- -- -- Account receivable with minor single amount but provision for bad
484,803.08 100.00 484,803.08 100.00 debt reserve on a single basis
Total 484,803.08 100.00 484,803.08 100.00 (2)Classified according to age of accounts receivable
Item 2014-6-30 2013-12-31
Amount Ratio(%) Amount Ratio(%)
Within 1 year -- -- -- -- 1-2 years -- -- -- -- 2-3 year -- -- -- -- Over 3 years 484,803.08 100.00 484,803.08 100.00 Total 484,803.08 100.00 484,803.08 100.00 (3)Provision for bad debt reserves
Account receivable with minor single amount but provision for bad debt reserve on a single basis at period-end
Provision ratio Bad debt
Accounts receivable Book balance Provision reasons
(%) reserves
Shenzhen Bijiashan 172,000.00 172,000.00 Estimated uncollectible due to100%
Entertainment Co., Ltd. long account age
SEG retail sales 97,806.64 97,806.64 Estimated uncollectible due to100% long account age
Guangzhou Lemin Computer 86,940.00 86,940.00 Estimated uncollectible due to Center 100% long account age
Other units 128,056.44 128,056.44 Estimated uncollectible due to100% long account age
Total 484,803.08 100% 484,803.08
(4) Particular about switch back or collected in the Year
No account receivable switch back or collected in the Period
(5) Major amount account receivable actually charge off in the Period
No account receivable actually charge off in the Period
(6) Accounts receivable due from shareholders holding over5% (including5%) voting shares in the Period.
No accounts receivable due from shareholders holding over5% (including5%) voting shares in this report period.
(7) Units with top five accounts receivable amount
Relationship with Percentage in accounts Unit name
Amount Age limit
the Company
receivable amount(%) Shenzhen Bijiashan
Non-related parties 172,000.00 Over 3 years 35.48 Entertainment Co., Ltd.
SEG retail sales Non-related parties 97,806.64 Over 3 years 20.17 Guangzhou Lemin Computer 86,940.00
Non-related parties
Center Over 3 years 17.93 Lanzhou Dachuan Electronic 37,308.00
Non-related parties
Company Over 3 years 7.70 Sichuan Shentong Computer 28,764.00
Non-related parties
Company Over 3 years 5.93 Total 422,818.64 87.21 (8) Particular about account receivable from related parties
No account receivable from related parties in the Period
(9)Account receivable de-recognition in line with Accounting Standards for Enterprises No.23—Transfer of Financial Assets
No account receivable de-recognition in the Period
(10) As for the asset securitization with object of account receivable, amount of assets and liabilities formed by its continuous involvement
No assets securitization in the Period with object of account receivable
2. Other accounts receivable
(1) Classified according to category of other accounts receivable
2014-6-30
Type Book balance Bad debt reserves Amount Ratio(%) Amount Ratio(%) Other account receivable with major single amount and provision
12,279,240.54
9.45
12,279,240.54 100.00 for bad debt reserve on a single basis
Other account receivable with bad debt reserve provision on an age
116,328,991.05
89.52
1,392,395.35 1.20 basis
2014-6-30
Type Book balance Bad debt reserves Amount Ratio(%) Amount Ratio(%) Other account receivable with minor single amount but provision
1,340,896.89
1.03
1,340,896.89 100.00 for bad debt reserve on a single basis
Total 129,949,128.48 100.00 15,012,532.78 11.55 (Cont.)
2013-12-31
Type Book balance Bad debt reserves Amount Ratio(%) Amount Ratio(%) Other account receivable with major single amount and provision
for bad debt reserve on a single basis 12,279,240.54 23.92 12,279,240.54 100.00 Other account receivable with bad debt reserve provision on an age
basis 37,722,515.36 73.47 1,392,395.35 3.69 Other account receivable with minor single amount but provision
for bad debt reserve on a single basis 1,340,896.89 2.61 1,340,896.89 100.00 Total 51,342,652.79 100.00 15,012,532.78 29.24 (2)Classified according to age
2014-6-30 2013-12-31
Item
Amount Ratio(%) Amount Ratio(%)
Within 1 year 113,872,208.78 87.63 35,259,233.09 68.67 1-2 years 86,249.97 0.07 91,249.97 0.18 2-3 year 99,541.64 0.08 101,041.64 0.20 Over 3 years 15,891,128.09 12.23 15,891,128.09 30.95 Total 129,949,128.48 100.00 51,342,652.79 100.00 (3)Provision for bad debt reserves
①
Other account receivable with major single amount and provision for bad debt reserve on a single basis
Carrying Provision for Ratio of
Content Reason
amount bad debts provision
Shenzhen Zhonghao (Group) Co., Ltd. Win a lawsuit, no executable 5,000,000.00 5,000,000.00
100.00% assets from adversary
Carrying Provision for Ratio of
Content Reason
amount bad debts provision
Jinbeili Home Appliance Company Estimated uncollectible due to 2,706,983.51 2,706,983.51
100.00% long account age
Shenzhen Petroleum& Chemical
1,888,329.19 1,888,329.19 100.00% Unlikely to collected (Group) Co., Ltd.
Huatong Package Co., Ltd. Estimated uncollectible due to 1,212,373.79 1,212,373.79
100.00% long account age
Shenzhen Xiandao Chemical New Estimated uncollectible due to 708,072.26 708,072.26
Material Co., Ltd.
100.00% long account age
Other 763,481.79 763,481.79 100.00% Unlikely to collected Total 12,279,240.54 12,279,240.54 100.00%
②
Other account receivable with bad debt reserve provision on an age basis
2014-6-30 2013-12-31
Age
Book balance Provision for Book balance Provision for bad Amount Ratio(%) bad debts Amount Ratio(%) debts Within 1 year 113,872,208.78 97.89 -- 35,259,233.09 93.47 -- 1-2 year 86,249.97 0.07 4,052.07 91,249.97 0.24 4,052.07 2-3 year 99,541.64 0.09 15,208.33 101,041.64 0.27 15,208.33 Over 3 years 2,270,990.66 1.95 1,373,134.95 2,270,990.66 6.02 1,373,134.95 Total 116,328,991.05 100.00 1,392,395.35 37,722,515.36 100.00 1,392,395.35③
Other account receivable with minor single amount but provision for bad debt reserve on a single basis at period-end
Provision ratio
Other accounts receivable Book balance bad debt reserves Reasons
(%)
Money used for purchasing Estimated uncollectible due to long 217,892.57 100.00% 217,892.57
house by staff account age
Other units Estimated uncollectible due to long 1,123,004.32 100.00% 1,123,004.32
account age
Total 1,340,896.89 1,340,896.89
(4) No major other account receivable actually charge off in the Period
(5) No other accounts receivable due from shareholders holding over5% (including5%) voting shares in the Period.
(6) Units with top five other accounts receivable amount
Percentage in other Relationship with
Unit name Amount Age limit accounts receivable the Company
amount(%)
Shenzhen Zhonghao (Group) Co., Ltd. Non-related
5,000,000.00
Over 3 years
3.85 parties
Jinbeili Home Appliance Company Non-related
2,706,983.51
Over 3 years
2.08 parties
Shenzhen Petroleum& Chemical Other long-term
(Group) Co., Ltd. equity investment
1,888,329.19
Over 3 years
1.45 unit
Shenzhen Xinglong Machinery
Associates
1,995,961.34
1-5 years
1.54 Module Co., Ltd.
debt obligatory right of Huatong Non-related
1,212,373.79
Over 3 years
0.93 Machinery parties
Total
12,803,647.83 9.85 (7)Account receivable from related parties
Percentage in other Unit name Relationship with the Company Amount
accounts receivable amount(%)
1,995,961.34 1.54 Shenzhen Xinglong Machinery Module Associates
CShoe.,n Lzhtde.n Xiandao Chemical New Material Associates(discontinued
708,072.26 0.54 Co., Ltd. operations)
9,483.57 0.01 Shenzhen Tellus GEM investment Co., Joint Venture
2,713,517.17 2.09 Ltd.
Total
3. Long-term equity investment
(1) Classification of long-term equity investment
Item 2013-12-31 Increase in the period Decrease in the period 2014-6-30 Investment to subsidiary 263,839,543.61 -- -- 263,839,543.61
Investment to Joint venture 68,597,879.95 258,881.43 -- 68,856,761.38 Investment to affiliated 84,163,508.49 6,482,504.95 -- 90,646,013.44 Other equity investment 28,084,779.52 -- -- 28,084,779.52 Less: impairment of Long-term
17,908,162.32 -- -- 17,908,162.32 equity investment
Total 426,777,549.25 6,741,386.38 -- 433,518,935.63 (2)Details of long-term equity investment
Calculating
Invested units Investment 2013-12-31 Changes 2014-6-30 methods
costs
Shenzhen SD Tellus Real Estate Co., Ltd Cost method 31,152,888.8 31,152,888.8 31,152,888.8 7 7 -- 7 Shenzhen SD Tellus Property Management Co., Ltd Cost method 5,021,970.88 5,021,970.88 -- 5,021,970.88 Shenzhen Tellus New Yongtong Automobile Development Cost method 57,672,885.2 57,672,885.2 57,672,885.2 Co. Ltd
2 2 -- 2 Shenzhen Zhongtian Industrial Co., Ltd. Cost method 10,708,622.9 10,708,622.9 10,708,622.9 0 0 -- 0 Shenzhen Automobile Industry Trading General Company Cost method 126,251,071. 126,251,071. 126,251,071. 57 57 -- 57 Shenzhen SD Huari Automobile Enterprise Co., Ltd Cost method 19,224,692.6 19,224,692.6 19,224,692.6 5 5 -- 5 Shenzhen Tellus Real Estate Exchange Co. Ltd Cost method 2,000,000.00 2,000,000.00 -- 2,000,000.00 Shenzhen Huari TOYOTA Automobile Sales Service Co., Cost method
Ltd. 1,807,411.52 1,807,411.52 -- 1,807,411.52 Shenzhen New Yongtong Automobile Inspection Equipment Cost method 10,000,000.0 10,000,000.0 10,000,000.0 Co. Ltd
0 0 -- 0 Shenzhen Tellus GEM investment Co., Ltd. Equity 61,852,480.0 59,672,265.9 59,673,262.9 method
0 2 997.01 3 Shenzhen Tellus Hang Investment Co., ltd. Equity 13,600,000.0
8,925,614.03
method
0 257,884.42 9,183,498.45 Shenzhen Xinglong Machinery Module Co.,Ltd.*Note① Equity 12,300,000.0 15,878,254.7 -- 15,878,254.7
Calculating
Invested units Investment 2013-12-31 Changes 2014-6-30 methods
costs
method 0 4 4 Shenzhen Tellus Auto Service Chain Co., Ltd. Equity
method 800,000.00 -- -- -- Shenzhen Zung Fu Tellus Auto Service Co., Ltd. Equity 10,500,000.0 68,285,253.7 6,482,504. 74,767,758.7 method
0 5 95 0 Shenzhen Xiandao Chemical Industrial New Material Co., Cost method
Ltd. 7,256,401.38 4,751,621.62 -- 4,751,621.62 Hunan Changyang Industrial Co., Ltd. Cost method 6,900,000.00 1,810,540.70 -- 1,810,540.70 Shenzhen hanli Hi-Tech Ceramics Co., Ltd. Cost method 3,466,000.00 1,956,000.00 -- 1,956,000.00 Shenzhen Jiecheng Electronic Co., Ltd. Cost method 3,150,000.00 3,225,000.00 -- 3,225,000.00 China Pufa Machinery Industry Co., Ltd. Cost method 10,176,617.2 10,176,617.2 10,176,617.2 0 0 -- 0 Shenzhen Jingwei Industrial Co., Ltd. Cost method 4,000,000.00 4,000,000.00 -- 4,000,000.00 Shenzhen (Masco) Co., Ltd. Cost method 825,000.00 825,000.00 -- 825,000.00 Wuhan Weite Hotel Cost method 640,000.00 640,000.00 -- 640,000.00 Shenzhen Petroleum& Chemical (Group) Co., Ltd. Cost method 700,000.00 700,000.00 -- 700,000.00 400,006,042. 444,685,711. 6,741,386.
451,427,097. Total
19 57 38 95 (Cont.)
Description
of Counting Share inconformit and
Vote Cash holding y of share drawing
percentag dividend percentag holding Provision impairme Invested units
e in s at the e in percentage nt reserves reserve
invested current invested and vote at the
units(%) period units(%) percentage current
in invested period
units
Shenzhen SD Tellus Real Estate Co., Ltd 100 100 -- -- --
Description
of Counting Share inconformit and
Vote Cash holding y of share drawing
percentag dividend percentag holding Provision impairme Invested units
e in s at the e in percentage nt reserves reserve
invested current invested and vote at the
units(%) period units(%) percentage current
in invested period
units
Shenzhen SD Tellus Property Management Co., Ltd 100 100 -- -- -- Shenzhen Tellus New Yongtong Automobile Development 100 100 -- -- -- Co. Ltd
Shenzhen Zhongtian Industrial Co., Ltd. 100 100 -- -- -- Shenzhen Automobile Industry Trading General Company 100 100 -- -- -- Shenzhen SD Huari Automobile Enterprise Co., Ltd 60 60 -- -- -- Shenzhen Tellus Real Estate Exchange Co. Ltd 100 100 -- -- -- Shenzhen Huari TOYOTA Automobile Sales Service Co., Ltd. 60 60 -- -- -- Shenzhen New Yongtong Automobile Inspection Equipment
51 51 -- -- -- Co. Ltd
Shenzhen Tellus GEM investment Co., Ltd. 50 50 -- -- -- Shenzhen Tellus Hang Investment Co., ltd. 50 50 -- -- -- Shenzhen Xinglong Machinery Module Co., Ltd. 30 30 -- -- -- Shenzhen Tellus Auto Service Chain Co., Ltd. 40 40 -- -- -- Shenzhen Zung Fu Tellus Auto Service Co., Ltd. 35 35 -- -- -- Shenzhen Xiandao Chemical Industrial New Material Co., Ltd. 40 40 4,751,621.62 -- -- Hunan Changyang Industrial Co., Ltd. 36.55 36.55 1,810,540.70 -- -- Shenzhen hanli Hi-Tech Ceramics Co., Ltd. 80 80 1,956,000.00 -- -- Shenzhen Jiecheng Electronic Co., Ltd. 45 45 3,225,000.00 -- -- China Pufa Machinery Industry Co., Ltd. 5.30 5.30 -- -- -- Shenzhen Jingwei Industrial Co., Ltd. 12.50 12.50 4,000,000.00 -- -- Shenzhen (Masco) Co., Ltd. 7 7 825,000.00 -- -- Wuhan Weite Hotel 640,000.00 -- --
Description
of Counting Share inconformit and
Vote Cash holding y of share drawing
percentag dividend percentag holding Provision impairme Invested units
e in s at the e in percentage nt reserves reserve
invested current invested and vote at the
units(%) period units(%) percentage current
in invested period
units
Shenzhen Petroleum& Chemical (Group) Co., Ltd. 100000 100000 700,000.00 -- -- shares shares
17,908,162.3
-- Total 2 -- (3) The long-term equity investment of the Company has no restriction in capital transfer to investment enterprise
(4)Details of impairment of long-term equity investment
Increase in the Decrease in the
Item 2013-12-31 2014-6-30 period period
Other long-term equity investment
Shenzhen Xiandao Chemical Industrial New 4,751,621.62 4,751,621.62 -- --
Material Co., Ltd.
Hunan Changyang Industrial Co., Ltd. 1,810,540.70 -- -- 1,810,540.70 Shenzhen hanli Hi-Tech Ceramics Co., Ltd. 1,956,000.00 -- -- 1,956,000.00 Shenzhen Jiecheng Electronic Co., Ltd. 3,225,000.00 -- -- 3,225,000.00 Shenzhen Jingwei Industrial Co., Ltd. 4,000,000.00 -- -- 4,000,000.00 Shenzhen (Masco) Co., Ltd. 825,000.00 -- -- 825,000.00 Wuhan Weite Hotel 640,000.00 -- -- 640,000.00 Shenzhen Petroleum& Chemical (Group) Co., 700,000.00 700,000.00 -- --
Ltd.
Total 17,908,162.32 -- -- 17,908,162.32 4. Operating income and cost
(1) Operating income and cost
Item Jan.- Jun. 2014 Jan.- Jun. 2013
Item Jan.- Jun. 2014 Jan.- Jun. 2013
Main operating income
9,684,900.12 8,845,953.02 Other operating income
-- -- Total operating income 9,684,900.12 8,845,953.02 Main operating cost
1,820,193.72 1,891,907.91 Other operating cost
-- -- Total operating cost 1,820,193.72 1,891,907.91 (2) Primary business (By industries)
Jan.- Jun. 2014 Jan.- Jun. 2013
industries
Operating income Operating cost Operating income Operating cost Leasing services 9,684,900.12 1,820,193.72 8,845,953.02 1,891,907.91 Total 9,684,900.12 1,820,193.72 8,845,953.02 1,891,907.91 (3) Primary business (By districts)
Jan.- Jun. 2014 Jan.- Jun. 2013
Districts
Operating income Operating cost Operating income Operating cost Shenzhen 9,684,900.12 1,820,193.72 8,845,953.02 1,891,907.91 Total 9,684,900.12 1,820,193.72 8,845,953.02 1,891,907.91 (5) The operating income of the top five customers of the Company
Customer name Business income
The percentage in all operating income of the Company(%)
Shenzhen Zung Fu Tellus Co., Ltd. 2,575,000.02 26.59 Shenzhen Xingguangda Jewelry Industrial Co.,
1,257,306.00 12.98 Ltd
BAITAI JEWELRY 416,289.00 4.30 Xiang Xia 368,600.00 3.81 YIDALONG JEWELRY 331,176.00 3.42 4,948,371.02 51.09 Total
5. Investment income
(1) Particulars about investment income
Name of invested unit Jan.- Jun. 2014 Jan.- Jun. 2013 Income of long-term equity investment calculated based on cost
-- -- Income of long-term equity investment calculated based on equity
6,741,386.38 1,231,657.10 Investment income obtained during holding available-for-sale
-- 72,938.25 financial assets
Total 6,741,386.38 1,304,595.35 Note: the repatriation of investment gains of the Group has no major restriction.
(2) Income of long-term equity investment calculated based on equity
Name of invested unit Jan.- Jun. 2014 Jan.- Jun. 2013 Reasons for changes Shenzhen Tellus Auto Service Chain Co., Ltd. -- --
Shenzhen Xinglong Machinery Module Co.,
-- --
Ltd.
Shenzhen Zung Fu Tellus Auto Service Co., Profit of the invested unit 6,482,504.95 951,521.96
Ltd. increased
Shenzhen Tellus GEM investment Co., Ltd. 997.01 199,850.66
Shenzhen Tellus Hang Investment Co., ltd. 257,884.42 80,284.48
Total 6,741,386.38 1,231,657.10
6. Supplementary information to statement of cash flow
Item Current Year Last Year
(1) Net profit adjusted to cash flow of operation activities:
Net profit 2,882,919.06 -4,034,586.49 Add: Provision of assets impairment -- -- Depreciation of fixed assets, consumption of oil assets and depreciation
of productive biology assets 1,971,186.86 2,013,868.02 Amortization of intangible assets 22,062.32 23,749.98 Amortization of long-term deferred expenses 20,682.96 20,682.96 Loss from disposal of fixed assets, intangible assets and other long-term -28,512.68 --
Item Current Year Last Year
assets(gain 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―-‖)
4,860,266.04 4,677,170.76 Investment loss (gain is listed with―-‖)
-6,741,386.38 -1,304,595.35 Decrease of deferred income tax asset( (increase is listed with―-‖)
19,471.10 -- Increase of deferred income tax liability (decrease is listed with―-‖)
-- -- Decrease of inventory (increase is listed with―-‖) -- -- Decrease of operating receivable accounts (increase is listed with―-‖)
-78,673,525.69 13,497,064.50 Increase of operating payable accounts (decrease is listed with―-‖)
5,966,850.74 17,795,954.74 Others
-- -- Net cash flow arising from operating activities -69,699,985.67 32,689,309.12 (2) Major investment and financing activity without cash payment
-- -- and receipts
Conversion of debt into capital -- -- Convertible bonds due within one year -- -- Fixed assets financed by leasing -- -- (3) Net change of cash and cash equivalent: -- -- Closing cash balance 12,570,634.30 18,946,052.71 Less: opening cash balance 30,209,143.04 1,614,187.49 Add: closing balance of cash equivalent -- -- Less: opening balance of cash equivalent -- -- Net increase of cash and cash equivalent -17,638,508.74 17,331,865.22 XIII. Supplementary Information
1. Details of non-recurring gains and losses
Item Jan.- Jun. 2014 Jan.- Jun. 2013 Gains/losses from disposal of non-current asset*Note① 172,812.80 7,247,156.82
Item Jan.- Jun. 2014 Jan.- Jun. 2013 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 -- -- Various provision for impairment of assets withdrew due to act of God, such as natural
-- -- disaster
Gains and losses from debt restructuring -- -- Enterprise reorganization expense, such as expenses from staffing and integrated cost
-- -- etc.
Gains and losses of the part arising from transaction in which price is not fair and
-- -- exceeding fair value
Current net gains and losses occurred from period-begin to combination day by
-- -- subsidiaries resulting from business combination under common control
Gains and losses arising from contingent proceedings irrelevant to normal operation of
-- -- the Company
Except for effective hedge business relevant to normal operation of the Company, gains
and losses arising from fair value change of tradable financial assets and tradable
-- -- financial liabilities, and investment income from disposal of tradable financial assets,
tradable financial liabilities and financial assets available for sale
Switch-back of provision of impairment of account receivable which are treated with
-- -- separate depreciation test
Gains and losses obtained from external trusted loans
-- --
Item Jan.- Jun. 2014 Jan.- Jun. 2013 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 49,806.10 -2,417.07 Other gains and losses items complying with definition for non-current gains and losses -- -- Subtotal 222,618.90 7,244,739.75 Affect on income tax
-- -- Affect on minority equity(after tax)
-57,438.11 -84,531.13 Total 165,180.79 7,160,208.62 Note: as for the numbers of non-recurring gains/losses,―+‖ stands for income orearnings,‖-―stands for losses or expenses
Recognition of the non-recurring gains/losses was executed in line with theQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss (Zheng Jian Hui Gong Gao[2008] No.: 43).*note①Including the investment real estate sold (9 sets apartment of 8/F, Dongfeng Building) by Automobile Industry and Trade Company (subsidiary of the Company), disposal income was 7,045,930.99 Yuan.
2. REO and earnings per share
Earnings per share (RMB/Share)
Profits during report period Weighted average ROE
Basic EPS Diluted EPS
Net profits belong to common
stock stockholders of the
2.77 0.0244 0.0244 Company
Net profits belong to common
stock stockholders of the
2.69 0.0237 0.0237 Company after deducting
nonrecurring gains and losses
3. Abnormalities and reasons of the accounting statement items of the Company
Item 2014-6-30 2013-12-31 Change amount Change ratio Note Assets:
Inventory decreased due Inventory 43,766,660.19 62,826,365.70 -19,059,705.51 -30.34% to the sales expansion from subsidiary Huari
TOYOTA
More costs for project of Construction in
85,849,620.32 41,642,020.40 44,207,599.92 106.16% Shuibei Jewelry process
Building
Land value of Shuibei Intangible assets 52,873,743.56 33,255.04 52,840,488.52 158894.68% Jewelry Building transferred-in The50% land value of Shuibei Jewelry Other non-current
-- 26,339,112.00 -26,339,112.00 -100.00% Building paid originally assets
transferred-in as intangible assets Liability and owners
equity:
Short-term loans 182,741,296.00 110,969,952.93 71,771,343.07 64.68% Bank loans increased Bank acceptance paid by Note payable 6,225,651.90 15,920,748.09 -9,695,096.19 -60.90% subsidiary Huari TOYOTA
Enterprise income taxes Taxes payable 9,175,574.79 16,687,262.22 -7,511,687.43 -45.01%
paid
Automobile Sales of Advance payment 2,228,640.04 22,087,866.51 -19,859,226.47 -89.91%
Huari TOYOTA Item Jan.- Jun. 2014 Jan.- Jun. 2013 Change amount Change ratio Note Profit statement:
Loss from asset Bad debt provision 35,599.18 100,000.00 -64,400.83 -64.4%
devaluation
decrease
Associates enterprise-- Shenzhen Zung Fu Investment earnings 7,841,475.98 1,780,082.57 6,061,393.41 340.51% Tellus Auto Service Co., Ltd gains more profit in the Period
There was losses from Non-operating
2,633.01 23,753.00 -21,119.99 -88.92% disposal of fixed assets expenditure
over a year earlier, and
no such item occurred in the Period
More income tax paid in Income tax expense 701,033.07 195,375.12 505,657.95 258.81%
the Period
Cash flow
statement:
Auto funds paid by Net cash flow arising
subsidiary Huari from operating -4,185,311.96 36,298,462.37 -40,483,774.33 -111.53%
TOYOTA increased activities
y-o-y
There was cash received over a year earlier from Subtotal of cash
disposal of investment in-flow arising from 40,740.00 32,414,709.28 -32,373,969.28 -99.87%
real estate, and no such investment activities
item occurred in the Period
Subtotal of cash Engineering funds paid out-flow arising from 70,244,698.22 19,470,300.15 50,774,398.07 260.78%
for Shuibei Jewelry investment activities
Building increased Subtotal of cash Borrowings from parent in-flow arising from 226,000,000.00 41,600,000.00 184,400,000.00 443.27%
company and the Bank financing activities
increased in the Period The loans due for Subtotal of cash
repayment to parent out-flow arising from 158,916,300.92 65,747,599.58 93,168,701.34 141.71%
company and the Bank financing activities
increased in the Period
Section X. Documents available for reference
1. Text of semi-annual report with signature of the Chairman;
2. Financial statement of the Company with signature and seal from the legal representative, person in charge of finance and person in charge of accounting;
3. Original text of all documents of the Company as well as manuscript of the announcement that disclosed on website appointed by CSRC.