Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
SHENZHEN TELLUS HOLDING CO., LTD
Annual Report 2012
April 2013
1
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
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.
Zhang Ruili, Principal of the Company, Luo Bojun, person in charger of accounting
works and Fu Bo, person in charge of accounting organ (accounting principal) hereby
confirm that the Financial Report of 2012 Annual Report is authentic, accurate and
complete.
All directors are attending the Board Meeting for Report deliberation.
The Company has no plan of cash dividends carried out, bonus issued and
capitalizing of common reserves either.
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.
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Contents
Annual Report 2012 ........................................................................................................................... 1
Section I Important Notice, Contents and Paraphrase ................................................................. 2
Section II Company Profile ............................................................................................................... 6
Section III Accounting data and summary of finnaical indexes .................................................. 9
Section IV Report of the Board of Directors ................................................................................ 12
Section V Important Events .......................................................................................................... 31
Section VI Changes in shares and particular about shareholders............................................... 43
Section VII Particulars about Directors, Supervisors,Senior Executives and Employees ........ 48
Section VIII Corporate Governance .............................................................................................. 56
Section IX Internal Control ............................................................................................................ 63
Section X Financial Report ............................................................................................................. 66
Section XI Documents available for reference ............................................................................ 190
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Paraphrase
Items Refers to Contents
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, this reporting period, this
Refers to Year of 2012
year
Auto Industry and Trade Co., Refers to Shenzhen Auto Industry and Trade Corporation
RSM Refers to RSM China Certified Public Accountants LLP
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Major Risks Warning
The existing risk factor of the Company has been well-described in this Report,
for statement of future risks and countermeasures in way of development of the
Company please pay attention to the section of Report of the Board of Directors.
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Section II Company profile
I. Company information
Short form of the stock Tellus-A, Tellus-B Stock code 000025, 200025
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
深圳市特力(集团)股份有限公司
Chinese)
Short form of the Company
深特力
(in Chinese)
Foreign name of the
Shenzhen Tellus Holding Co.,Ltd
Company(if applicable)
Legal representative Zhang Ruili
Registrations add. 3/F, Tellus Building, Shui Bei Er Road, Luohu District, Shenzhen
Code for registrations add 518020
Offices add. 15/F, Zhonghe Building, Shennan Middle Road, Futian District, Shenzhen
Codes for office add. 518031
Company website www.tellus.cn
Email sztljtgf@public.szptt.net.cn
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Guo Dongri Sun Bolun
15/F, Zhonghe Building, Shennan Middle 15/F, Zhonghe Building, Shennan Middle
Contacts add.
Road, Futian District, Shenzhen Road, Futian District, Shenzhen
Tel. (0755) 83989328 (0755) 83989339
Fax. (0755) 83989386 (0755) 83989386
Email guodongri@yahoo.com.cn s9239243@163.com
III. Information disclosure and preparation place
Newspaper appointed for information disclosure Securities Times (Shenzhen) and Hong Kong Commercial Daily(H.K.)
Website for annual report publish appointed by
http://www.cninfo.com.cn
CSRC
Preparation place for annual report Secretariat of the Board of Directors of Shenzhen Tellus Holding Co., Ltd.
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
IV. Registration changes of the Company
Registration NO. for
No. of taxation
Date for registration Place for registration enterprise legal Organization code
registration
license
Shenzhen
Administration of
Initial registration 1986-11-10 440301103017750 440300192192210 19219221-0
Industry and
Commerce
Shenzhen
Registration at end Administration of
2012-04-27 440301103017750 440300192192210 19219221-0
of report period Industry and
Commerce
Before 26 May 1993, business scope of the Company: engaged in metal working
machinery, general equipment, general component, abrasive tools, abrasive materials,
instrument, micro motor, home appliances, electronic component, electronic device,
electronic computer and accessories, auto parts, rubber products and construction
materials. Self-operated products manufacture by the Company and owned enterprises
such as self-used production raw materials, metal working machinery and general
equipment; import & export of general component.
Business scope of the Company changed dated 26 May 1993 as: engaged in metal
working machinery, general equipment, general component, abrasive tools, abrasive
materials, instrument, micro motor, home appliances, electronic component, electronic
device, electronic computer and accessories, auto parts, rubber products, construction
materials, metal materials, chemical materials and products, plastic products, hardware
tools, warehousing & transportation and general equipment; self-operated products
manufacture by the Company and owned enterprises such as self-used production raw
Changes of main business since listing (if
materials and metal working machinery; import & export of general component; import
applicable)
and export business complies with the approval certificate (Shen Mao Guan Shen
Zheng Zi No.098).
Business scope of the Company changed dated 22 January 1997 as: develop enterprises
(specific projects needs application); warehousing & transportation, processing on
giving materials for machinery component and mechanic assembly. Domestic business
and supply & marketing industry of materials (excluding monopolized commodity and
commodity under special government control). Self-operated products manufacture by
the Company and owned enterprises such as self-used production raw materials and
metal working machinery; import & export of general component; import and export
business complies with the approval certificate (Shen Mao Guan Shen Zheng Zi
No.098).
Business scope of the Company changed dated 3 December 2009 as: develop
enterprises (specific projects needs application); develop and operate the real estate
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
business on the land with usage rights obtained legally; domestic business and supply
& marketing industry of materials (excluding monopolized commodity and commodity
under special government control); rental and management for self-owned property.
Self-operated products manufacture by the Company and owned enterprises such as
self-used production raw materials and metal working machinery; import & export of
general component; import and export business complies with the approval certificate
(Shen Mao Guan Shen Zheng Zi No.098).
1. On 31 March 1997, the 159,588,000 state shares held by Shenzhen Investment
Management Co., Ltd., the only non-circulation shareholder, were transfer to SDG;
total share capital of the Company was 220,281,600 shares while 159,588,000 state
Previous changes for controlling
shares held by SDG, a 72.45% in total share capital.
shareholders (if applicable)
2. On 4 January 2006, the 13,717,440 shares, as the consideration of share merger
reform, were transfer to account of A-shareholders from SDG. After share merger
reform, SDG holds 66.22% of the total share capital of the Company.
V. Other relevant information
CPA engaged by the Company
Name of CPA RSM China Certified Public Accountants LLP
3-9/F, West Tower, Zhonghai Real Estate Square, 7# Building, 8# Yard, Binhe Rd., Yong
Offices add. for CPA
DingMen (W), Dongcheng District, Beijing
Signing Accountants Zhou Wuzhong, Qin Changming
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
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
Changes over last year
2012 2011 2010
(%)
Operating income (RMB) 419,642,661.31 403,282,098.80 4.06% 38,634,879.27
Net profit attributable to
shareholders of the listed 7,146,259.35 2,157,675.12 231.2% 3,584,445.78
company(RMB)
Net profit attributable to
shareholders of the listed company
-15,060,776.70 -6,198,115.02 3,281,963.57
after deducting non-recurring gains
and losses(RMB)
Net cash flow arising from
-7,756,382.47 -14,738,664.02 7,143,993.37
operating activities(RMB)
Basic earnings per share
0.0324 0.0098 230.61% 0.0163
(RMB/Share)
Diluted earnings per share
0.0324 0.0098 230.61% 0.0163
(RMB/Share)
Return on Equity (%) 3.95% 1.22% 2.73% 2.07%
Changes over end of
End of 2012 End of 2011 End of 2010
last year (%)
Total assets (RMB) 644,911,292.00 570,693,268.15 13% 599,555,953.28
Net assets attributable to
shareholder of listed company
(Owners equity attributable to 184,675,401.61 177,365,899.51 4.12% 175,274,602.44
shareholder of 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)
Unit: RMB
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Net profit attributable to shareholders of listed Net assets attributable to shareholders of listed
company company
Amount at
Amount in this period Amount in last period Amount at period-end
period-begin
Chinese GAAP 7,146,259.35 2,157,675.12 184,675,401.61 177,365,899.51
Items and amount adjusted by IAS
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)
Unit: RMB
Net profit attributable to shareholders of listed Net assets attributable to shareholders of listed
company company
Amount at
Amount in this period Amount in last period Amount at period-end
period-begin
Chinese GAAP 7,146,259.35 2,157,675.12 184,675,401.61 177,365,899.51
Items and amount adjusted by foreign accounting rules
3. Reasons for the differences of accounting data under accounting rules in and out of China
III. Items and amounts of extraordinary profit (gains)/loss
Unit: RMB
Amount in Amount in Amount in
Item Note
2012 2011 2010
Including the follow investment real estate sold by subsidiary
Gains/losses from the
of the Company, Auto Industry & Trading Company: 3 sets of
disposal of non-current
housing located 8/F, Dongfeng Building, B4 annex building
asset (including the 15,152,740.17 -2,474,496.72 233,137.69
of 5#,6#,7# , A1 and B5 store and real estate 102, 4# office
write-off that accrued for
building, Weipeng Garden; disposing gains amounting as
impairment of assets)
RMB 15,192,192.09
The Company entered into “Agreement of Exempt From the
Liability for Guarantee” with Shenzhen Shangbu Sub ranch of
Agriculture Bank of China Co., Ltd. Shenzhen ABC exempts
from liability of the Company for loan interest unpaid to
Gains/losses of debt Petrochemical Company and joint and several liabilities
14,377,457.14
restructure guarantee for the new interest since 20 May 2012. The
amount involved in this lawsuits has been withdrawal for
accrual liability RMB 87,568,728.57 in 2006; the RMB
6,6401,271.43 were paid to Shenzhen ABC by agreement to
fulfill guarantee responsibility; the exempted interest and
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
penalty interest have been transfer to non-operation income
account in reporting period.
Other non-operating Last year including removal compensation RMB
income and expenditure 4,643,360.00 of 5 sets of bachelor dormitory; the liquidation
65,402.35 13,464,148.60 251,775.43
except for the of claim unable to pay for over 10 years from debtor was
aforementioned items RMB 8,907,320.12.
Impact on income tax 7,398,899.92 2,637,516.45 106,680.89
Impact on minority
shareholders equity -10,336.31 -3,654.71 75,750.02
(post-tax)
Total 22,207,036.05 8,355,790.14 302,482.21 --
Concerning the extraordinary profit (gain)/loss defined by Q&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 in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Section IV. Report of the Board of Directors
I. Introduction
In 2012, under the leadership of the Board, all employees of the Company continues to surrounding the working
principle of stable development, seized the two major themes of key projects and enterprises routine operation,
overcoming economic turmoil and vary grand impact on the way of development from the restriction of objective
factors, key projects gains a breakthrough progress, the whole-year operation target was completed.
In reporting period, the Company achieved operation income of RMB 419.64 million in total with a y-o-y growth
of 4.06%; profit realized RMB 9.24 million in total with 39.85% up y-o-y; net profit attributable to owners of
parent company amounting as RMB 7.15 million, 231.20% up y-o-y; growth of the profit mainly because the
gains obtained from debt reorganization in this period and part of the investment real estate disposed.
II. Main business analysis
1. Introduction
Main business of the Company was auto sales, auto inspection and maintenance and accessory sales, property
rental and services ect; main business and its structure as well as main business ability show no major changes
compare with last period.
Unit: RMB/CNY
y-o-y
Item 2012 2011 Note
changes (%)
Operation income 419,642,661.31 403,282,098.80 4.06%
Operation cost 336,419,631.43 335,264,237.62 0.34%
Period expense 76,215,966.94 72,846,885.19 4.62%
Cash flow from operation -7,756,382.47 -14,738,664.02 47.37% The account for vehichles received in advance increased
activities
Subtotal of cash in-flow 31,634,090.29 20,976,554.05 50.81% Cash received from disposal of investment real estate
from investment activities increased in this period
Subtotal of cash out-flow 64,322,848.76 2,322,621.53 2669.41% Expense of construction in progress increased and more
from investment activities investment in associated enterprise increased in this
period
Cash flow from financing 39,665,927.02 -12,096,262.57 Loans from parent company and cash from bank loans
activities increased in this period
In reporting period, major changes on profit structure and main influencing factors
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Unit: RMB/CNY
Item 2012 2011 +,- amount +,- (%)
Assets impairment losses 11,158,962.81 5,114,839.34 6,044,123.47 118.17%
Investment gains 4,907,776.00 8,080,990.33 -3,173,214.33 -39.27%
Income tax 8,264,624.20 5,354,382.93 2,910,241.27 54.35%
Note:
(1) Assets impairment losses: increase RMB 6.0441 million over same period of last year with 118.17% up,
mainly because the bad debt provision, provision for obsolete stock and fixed assets depreciation reserves are
accrual in this year;
(2) Investment gains: decrease RMB 3.1732 million over same period of last year with 39.27% down, mainly
because associated company –Shenzhen Zung Fu Tellus Auto Service Co., Ltd. has less profit in this period;
(3) Income tax: increase RMB 2.9102 million over same period of last year, mainly because Auto Industry
&Trading Company has more profit in this period while income tax expenses increased correspondingly.
Progress of the development strategy and operation planning that disclosed previously
Work report of the Board for year of 2011 has proposed the followed targets: in year of 2012, maintain the stable
operation in property rental business; perfect and strengthen the industry of auto post-service; seize opportunity
activity to promote the construction of Shuibei Jewelry Industrial Park; handling the problems left over by history
properly.
In this reporting period, the Company operating steady overcoming difficulties of soaring cost by pre-given
strategy orientation, the property rental and service business gains a profit of 0.81% up over that of 2011, which
provided a solid cash flow for the development of the Company.
In aspect of auto post-service, facing with the unfavorable factors of downturn industry and serious competition,
the Company gets over a difficulty, live in the present, maintain a stable business scale and reduce the losses to
accomplished whole-year operation target.
Key project of Shuibei Jewry Industrial Park is process smoothly and promoted steady by plan.
The lawsuit of Petrochemical guarantee reaches an accommodation in reporting period, reducing losses of the
Company, and the trouble of problems left over by history has been solved.
Reasons for difference of actual operation performance has 20% lower or higher than profit forecast of the Year disclosed
□ Applicable √ Not applicable
2. Revenue
Note:
In reporting period, operation income of the Company was RMB 419.64 million while income from main business
amounting as RMB 393.88 million, a y-o-y 0.46% down.
Main business income according to industry as:
Unit: RMB/CNY
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Main business profit margin
Industry Main business income Main business cost
(%)
Auto sales 251,410,681.00 248,501,428.28 1.16%
Auto inspection and maintenance and
47,965,398.31 34,469,136.38 28.14%
accessories sales
Property rental and service 94,499,183.06 47,471,372.04 49.77%
Total 393,875,262.37 330,441,936.70 16.10%
Business activities or main products with over 10% in total main business income or main business profit:
Unit: RMB/CNY
Main Increase/decrease of
Increase/decrease of Increase/decrease of
Main business Main business business main business profit
Products main business income main business cost
income cost profit margin over last year
over last year (%) over last year (%)
margin (%) (%)
Auto sales 251,410,681.00 248,501,428.28 1.16% -1.99% 0.36% -2.31%
Auto inspection 47,965,398.31 34,469,136.38 28.14% 5.54% -8.28% 10.83%
and maintenance
and accessories
sales
Property rental 94,499,183.06 47,471,372.04 49.77% 0.81% -2.25% 1.58%
and service
Whether income from physical sales larger than income from labors or not
√ Yes □ No
Increase/decrease y-o-y
Industries Item 2012 2011
(%)
Sales volume 1,630 1,589 2.58%
Auto sales
Inventory 340 132 157.58%
Reasons for y-o-y relevant data with over 30% changes
√Applicable □Not applicable
Inventory has more growth y-o-y mainly because suffer the influence of Sino-Japanese relations in 2012, Toyota Motor has a drop in
sales, while inventory growth.
Material orders in hands
□ Applicable √ Not applicable
Material changes or adjustment for products or services of the Company in reporting period
□ Applicable √ Not applicable
Major sales of the Company
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Total top five clients in sales (RMB) 28,621,967.55
Proportion in total annual sales volume for top five clients
6.82%
(%)
Information of top five clients of the Company
□Applicable √Not applicable
3. Cost
Industry classification
Unit: RMB
2012 2011
Industry Y-o-y changes
Item Ratio in operation Ratio in operation
classification Amount Amount (%)
cost (%) cost (%)
Auto sales Raw materials 248,501,428.28 73.87% 247,610,749.18 73.86% 0.36%
Auto sales Labor wages
Auto sales Motive power
Auto sales Depreciation
Auto inspection
and maintenance
Raw materials 21,415,255.23 6.37% 20,637,573.81 6.16% 3.77%
and accessories
sales
Auto inspection
and maintenance
Labor wages 10,224,828.84 3.04% 11,500,470.19 3.43% -11.09%
and accessories
sales
Auto inspection
and maintenance
Motive power 339,905.72 0.1% 381,283.04 0.11% -10.85%
and accessories
sales
Auto inspection
and maintenance
Depreciation 1,173,121.85 0.35% 2,175,920.90 0.65% -46.09%
and accessories
sales
Auto inspection
and maintenance
Others 1,316,024.74 0.39% 2,884,197.32 0.86% -54.37%
and accessories
sales
Property rental
Raw materials
and service
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Property rental
Labor wages 7,817,065.41 2.32% 7,552,235.87 2.25% 3.51%
and service
Property rental
Motive power 22,539,850.48 6.7% 24,894,346.54 7.43% -9.46%
and service
Property rental
Depreciation 6,625,551.77 1.97% 6,699,389.32 2% -1.1%
and service
Property rental
Others 10,488,904.38 3.12% 9,415,875.44 2.81% 11.4%
and service
Product classification
Unit: RMB
2012 2011
Product Y-o-y changes
Item Ratio in operation Ratio in operation
classification Amount Amount (%)
cost (%) cost (%)
Note
Operation cost for year of 2012 was RMB 336,419,631.43, a 0.34% growth y-o-y.
Main business cost was RMB 330,441,936.70, a 0.99% down y-o-y.
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 299,890,000.00
Proportion in total annual purchase amount for top five
98%
suppliers (%)
Information of top five suppliers of the Company
□Applicable √Not applicable
4. Expenses
Unit: RMB
Item 2012 2011 y-o-y growth
Sales expenses 20,698,948.07 19,891,677.92 4.06%
Administrative expenses 45,435,681.23 44,648,200.15 1.76%
Financial expenses 10,081,337.64 8,307,007.12 21.36%
5. R&D expenses
Nil
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
6. Cash flow
Unit: RMB
Item 2012 2011 Y-o-y changes (%)
Subtotal of cash in-flow from
498,995,175.37 481,325,073.34 3.67%
operation activity
Subtotal of cash out-flow from
506,751,557.84 496,063,737.36 2.15%
operation activity
Net cash flow from operation
-7,756,382.47 -14,738,664.02
activity
Subtotal of cash in-flow from
31,634,090.29 20,976,554.05 50.81%
investment activity
Subtotal of cash out-flow from
64,322,848.76 2,322,621.53 2,669.41%
investment activity
Net cash flow from investment
-32,688,758.47 18,653,932.52 -275.24%
activity
Subtotal of cash in-flow from
378,400,000.00 27,200,000.00 1,291.18%
financing activity
Subtotal of cash out-flow from
338,734,072.98 39,296,262.57 762%
financing activity
Net cash flow from financing
39,665,927.02 -12,096,262.57
activity
Net increased amount of cash
-781,042.07 -8,196,406.38
and cash equivalent
Reasons for y-o-y relevant data with over 30% changes
√Applicable □Not applicable
(1) Net cash flow from operation activity has a y-o-y growth of RMB 6.9823 million, mainly because account for
vehicle received in advance from Toyota Company increased;
(2) Subtotal of cash in-flow from investment activity increase RMB 10.6575 million over same period of last year,
mainly because cash received from disposal of investment real estate in this period increased;
(3) Subtotal of cash out-flow from investment activity increase RMB 62.0002 million over same period of last
year, mainly because in this period, RMB 33.50 million capital invested in Shenzhen Tellus Gem Investment Co.,
Ltd, and the land price and pre-phase expenses for Tellus Shuibei Jewelry Bullding (Phase I) paid in advance;
(4) Net cash flow from financing activity increase RMB 51.7622 million over same period of last year, mainly
because loans from parent company and cash from bank loans increased in this period.
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□Applicable √Not applicable
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
III. Composition of main business
Unit: RMB
Increase/decrease
Increase/decrease Increase/decrease
Operating Gross profit ratio of operating
Operating cost of operating cost of gross profit
revenue (%) revenue y-o-y
y-o-y (%) ratio y-o-y (%)
(%)
According to industries
Auto sales 251,410,681.00 248,501,428.28 1.16% -1.99% 0.36% -2.31%
Auto inspection
and maintenance
47,965,398.31 34,469,136.38 28.14% 5.54% -8.28% 10.83%
and accessories
sales
Property rental
94,499,183.06 47,471,372.04 49.77% 0.81% -2.25% 1.58%
and service
According to products
Auto sales 251,410,681.00 248,501,428.28 1.16% -1.99% 0.36% -2.31%
Auto inspection
and maintenance
47,965,398.31 34,469,136.38 28.14% 5.54% -8.28% 10.83%
and accessories
sales
Property rental
94,499,183.06 47,471,372.04 49.77% 0.81% -2.25% 1.58%
and service
According to region
Shenzhen 393,875,262.37 330,441,936.70 16.1%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
latest one years scope of period-end
□ Applicable √ Not applicable
IV. Assets and liability analysis
1. Major changes of assets
Unit: RMB
End of 2012 End of 2011 Ratio
Ratio in total Ratio in total changes Notes of major changes
Amount Amount
assets (%) assets (%) (%)
Monetary fund 55,145,531.39 8.55% 55,926,573.46 9.8% -1.25%
Account 5,779,383.21 0.9% 6,926,224.94 1.21% -0.31%
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Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
receivable
Inventory 47,813,852.20 7.41% 30,218,346.71 5.3% 2.11%
Investment real
96,666,571.61 14.99% 108,421,268.41 19% -4.01%
estate
Long-term equity 186,572,923.3
28.93% 143,657,138.71 25.17% 3.76%
investment 9
156,061,636.8
Fix assets 24.2% 164,608,682.41 28.84% -4.64%
0
Construction in
12,977,929.03 2.01% 2,461,073.03 0.43% 1.58%
progress
2. Major changes of liability
Unit: RMB
2012 2011
Ratio changes Notes of major
Ratio in total assets Ratio in total assets
Amount Amount (%) changes
(%) (%)
Short-term
93,881,155.00 14.56% 42,792,388.00 7.5% 7.06%
loans
Long-term
143,000,000.00 22.17% 4,680,000.00 0.82% 21.35%
loans
3. Assets and liability measure by fair value
Unit: RMB
Accumulative
Gains/losses of Impairment Amount
Amount at changes in fair Sale amount in Amount at
Item changes in fair accrual in this purchased in
period-begin value reckoned this period period-end
value period this period
into equity
Financial assets
3. financial
assets available 1,374,249.25 217,657.00 1,413,452.05 1,591,906.25
for sale
Subtotal of
1,374,249.25 217,657.00 1,413,452.05 1,591,906.25
financial assets
Total 1,374,249.25 217,657.00 1,413,452.05 1,591,906.25
Financial
0.00 0.00 0.00 0.00
liability
Whether measurement attributes for main assets of the Company in report period have major changes or not
19
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
□ Yes √No
V. Core competitive-ness analysis
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 and fast repair beauty chain, authorize maintenance, special maintenance and auto inspections, and
owes a completed industry chain of automotive aftermarket and maintenance sales team with rich experiences. As
the slow development in auto sales market, the whole industry comes to a period of low-speed development and
fierce competition. The Company will complete operational target, base on the professional operation, and
standardized management, focus on gaining more profit and cutting expenses, maintain stable development,
controlling risks as well as seized opportunity to overcoming difficulties.
In aspect of property rental & service, the Company owes a certain property management experience and has
higher property management qualification and perfected internal management mechanism, also owes a brand
recognition in regional; most of the property rental and management are self-owned property, which has a lower
cost and a stable income. With the stable promotion of Tellus-Gem Golden Jewelry Industrial Park, the Company
will seize policy opportunity, taking full advantage of the development advantage of core base for Shenzhen
golden jewelry industry and combining actual condition of the Group, to explore the value-added service model of
high-end industry zone, higering property management standards and create a new profitability point for the
Group.
VI. Investment analysis
1. Equity investment outside
(1) Investment outside
Investment outside
Investment for year of 2012 (RMB) Investment for year of 2011 (RMB) Changes
42,250,000.00 600,000.00 7,275%
Invested company
Proportion of equity in invested company
Name Main business
for listed company (%)
Investment develop enterprise, property
Shenzhen Tellus Gem Investment Co., Ltd. 50%
management and rental
Shenzhen Dongfeng Automobile Co., Ltd. Auto manufacture and repair 25%
(2) Holding the equity of financial enterprise
Initial Amount of Proportion Amount of Proportion Book Gains and Accountin Source of
Name Type investment
cost(RMB) stock-holdi of stock-holdi of value at the loss in the g subject stock
20
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
ng at the stock-holdi ng at the stock-holdi end of the reporting
beginning ng at the end of the ng at the period (RMB)
of the beginning period end of the (RMB)
period of the (Share) period (%)
(Share) period (%)
Total 0.00 0 -- 0 -- 0.00 0.00 -- --
(3) Securities investment
Amount
of Proportio Amount Proportio
Initial stock-hol n of of n of Book
Gains and
investmen ding at stock-hol stock-hol stock-hol value at
Short loss in the Accounti Source of
Variety of Code of
form of t the ding at the ding at ding at the the end of
securities securities reporting ng subject stock
securities
cost(RM beginning beginning the end of end of the the period
(RMB)
B) of the of the the period period (RMB)
period period (% (Share) (%)
(Share)
Total 0.00 0 -- 0 -- 0.00 0.00 -- --
Explanation on equity of other listed company hold
2. Trust financing, derivative investment and entrusted loans
(1) Trust financing
In ten thousand yuan
Whether
Date for Date for Determin Actually Is a Connecte
Amount Principal Interest by the Impairme
trust trust e way for interest in related d
Trustee for trust actually actually legal nt
financing financing remunerat this transactio relationsh
financing recover obtained procedure provision
begins ends ion period n or not ip
s or not
Total 0 -- -- -- 0 0 0 -- 0 -- --
Explanation
(2) Investment of derivatives
Derivatives investment holds at period-end
□ Applicable √ Not applicable
Explanation
(3) Entrustment loan
In 10 thousand yuan
Extension, Countermeasur
Whether the Interest rate of Guarantor or Use of loan
Loan object Amount of loan overdue or e for risks of
related party loan collateral objects fund
lawsuit extension,
21
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
overdue or
lawsuit
Total -- 0 -- -- -- -- --
Explanation
3. Application of raised proceeds
(1)Overall application of raised proceeds
In 10 thousand yuan
Total of raised proceeds 0
Overall application of raised proceeds
(2) Situation of committed project of raised proceeds
In 10 thousand yuan
Amount
Investme
Projects Total of Project
changed committe nt
Total Amount accumula Predicted Profit Reach the feasibility
Committed investment or not d program
investme invested ted useable realized predicted was
projects &investment (includin investme nt after in till the
of raised fund g nt of adjustme reporting investme date of in this interest changed
year-end
changed raised nt (1) period nt till the project year or not hugely or
partially) capitals (3)=(2)/(1
year-end not
)
(2)
Investment project commitment
Investment orientation for fund arising out of plan
Total -- 0 0 0 0 -- -- 0 -- --
Amount, usage and
progress of using for
Not applicable
fund raising out of the
plan
Change of
implementation place
Not applicable
of investment project
of raised capitals
Regulation of
implementation ways
Not applicable
of investment project
of raised capitals
Invested in pre-phases
Not applicable
and replacement for
22
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
raised fund projects
Temporarily
supplement for the
Not applicable
current capitals with
idle raised capitals
Amount and reason for
surplus of raised
Not applicable
capitals when
implementing projects
(3)The changed project of raised proceeds
In 10 thousand yuan
Accumulati Progress of
Whether the
Total on virtual the
Date of the Whether it feasibility
Correspondi amount Virtual amount investment
project Income has come up of the
Project after ng original invested amount input deadline the
coming to achieved in to the project
the change committed after input in the deadling the end of the
scheduled the scheduled changed
project adjustment reporting end of the reporting
usable state reporting income after the
(1) reporting (%)(3)=(2)/
alteration
(2) (1)
Total -- 0 0 0 -- -- 0 -- --
Changing reason, decision procedure
and statement of disclosure(In specific N/A
project)
4. Main subsidiaries and stock-jointly companies
Particular about main subsidiaries and stock-jointly companies
Main Operating Operating
Company Register Total assets Net Assets Net profit
Type Industries products or revenue profit
name capital (RMB) (RMB) (RMB)
service (RMB) (RMB)
Shenzhen
Auto Sales of RMB
306,094,305. 201,875,122. 19,349,090. 14,886,251.
Industry and Subsidiary Business auto and 58.96 38,335,826.49
40 40 73 69
Trade accessories million
Corporation
Auto
Shenzhen
maintenanc
SD Huari Service $5 82,747,489.2 44,708,362.1 -1,135,480.5
Subsidiary e and 50,740,054.74 -910,730.35
Automobile industry million 6 7 5
production
Enterprise
and sales
23
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Co. of
Limited accessories
Shenzhen
Service RMB
Zhongtian Property 55,233,594.7 20,880,797.7 2,274,755.7 1,687,837.3
Subsidiary industry 7.25 6,220,656.30
Industrial rental 8 5 1 5
million
Co., Ltd.
Shenzhen
Huari
Toyota Sales of RMB 2 72,757,191.6 -7,597,703.8 -7,586,578.6
Subsidiary Business -7,426,678.61 258,239,856.70
Automobile automobile million 7 0 9
Sales Co.
Ltd
Shenzhen
Manufactu
Xinyongton
re of
g Auto RMB
Service inspection 14,543,993.7 -5,271,879.0 -5,271,879.0
Vehicle Subsidiary 19.61 2,898,500.99 3,439,833.17
industry equipment 4 3 3
Inspection million
for motor
Equipment
vehicle
Co., Ltd.
Shenzhen
Tellus
Inspection
Xinyongton RMB
Service and repair 82,267,829.4 43,753,378.8 -1,933,904.2 -4,810,512.6
g Subsidiary 32.90 13,089,911.06
industry of motor 6 6 5 0
Automobile million
vehicle
Developmen
t Co. Ltd
Shenzhen Real estate
RMB
SD Tellus Manufactu developm 29,683,298.3 13,025,529.0
Subsidiary 31.15 0.00 -293,814.10 -293,814.10
Real Estate ring ent and 7 0
million
Co., Ltd operation
Shenzhen
SD Tellus Property RMB
Service 26,568,009.3 10,739,832.1
Property Subsidiary manageme 7.05milli 41,985,908.63 163,850.94 156,298.28
industry 7 4
Managemen nt on
t Co., Ltd
Shenzhen
Tellus Real Trading
Service RMB 2
Estate Subsidiary agency of 2,747,169.27 2,585,098.96 318,170.00 5,024.12 15,024.12
industry million
Exchange real estate
Co. Ltd
Shenzhen Stock Sales of
Service RMB 30 510,998,649. 185,050,375. 1,981,963,848. 8,525,589.0 7,143,085.0
Zung Fu jointly auto and
24
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Tellus Auto company industry maintenanc million 00 00 00 0 0
Service Co., e
Ltd.
Manufactu
Shenzhen
Stock re and
Dongfeng Manufactu RMB 100 283,598,462. 121,414,866. 8,013,302.7 6,427,780.3
jointly maintenanc 237,664,777.99
Automobile ring million 78 64 6 9
company e of
Co., Ltd.
automobile
Shenzhen
Process of
Xinglong Stock RMB
Manufactu mould and 51,418,657.4 31,979,136.8
Machinery jointly 27.6333 -490,605.18 -524,446.14
ring exportatio 3 2
Module Co., company million
n
Ltd.
Notes of main subsidiaries and stock-jointly companies
Particular about subsidiaries obtained or disposed in report period
□ Applicable √ Not applicable
5. Major projects invested by non-raised fund
In ten thousand yuan
Accumulated fund
Project Total investment Invested in this year actually till end of Progress Project benefit
this period
Tellus Shuibei
Jewelry Bullding 41,364 1,041.25 1,287.35 3.11%
(Phase I)
Total 41,364 1,041.25 1,287.35 -- --
Explanation on major projects invested by non-raised fund
Subsidiary of the Company, Zhongtian Company, was the implementing subject for the project; ended as 31 December 2012, the
project still in pre-phase stage of construction; the increase in this period mainly due to the pre-phase expenses for constructions.
VII. Special purpose vehicle controlled by the Company
Nil
VIII. Prospect for future development of the Company
(I) Development trend of the industry for the Company
1. Auto sales and automotive aftermarket business
Over a decade rapid development of Chinese automobile industry, a turning point turns to show up in way of
development and has a dramatically adjustment in recent year. In 2012, Chinas economy suffered a lot directly
from the continues unstable international political economic environment and soaring international oil prices; auto
25
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
sales and service industry facing a heavy impact, competitive pressures spreading from low-end economical auto
to high-end luxury brand auto. Being affected by unfavorable factors of Sino-Japanese relationship, auto-purchase
restriction and step out of the stimulate consumption policy, auto sales market is in a serious situation with profits
downing and fiercely competitive, and shows an unusual general deficit situation in the industry. Competition of
automotive aftermarket comes more and more harsh and fierce.
2. Property rental and service
With the large-scale, diversification and trans-regionalized for the property management enterprise in the Country,
industry concentration getting more and more better; under the slim profit from residential property management,
small-scale company will be eliminated while some of the famous property company implemented contraction
strategy, marketization of property management enterprise will upgrade and market competition comes to intense.
High-end property has a favorable profitability with more market attractiveness; clients from high-end property
requires more in aspect of professional competence, service idea, talent and brand, which promote the
development of large-scale and branding for property management and higering the industry concentration.
Existing superior enterprise will seize more market shares in incremental property management market by their
owned competiveness. Specialization of property service will comes more and more professional and the industry
will present a stronger professional service providers.
(II) Operation planning of the Company
1. Auto sales and automotive aftermarket business
The Company continues to overcome difficulties and adapt to the situation by development guideline of
“highlight-oriented, operation stabilized and scale maintenance”; externally, exploit distribution channels and
sales model, internally, focus on cost controlling to reduce deficit in sales. Proactively discover brand-new
marketing model, explore more for big clients and designated customer through standardized procedures and
highering efficiency; increase promotion items of vehicle care products, highering maintain gross margin and
output value for single vehicle, increase business of repairmen and accessory sales in order to improve income of
after-sales service. In accordance with general deployment and requirement of business adjustment for auto
service of the Company, chose opportunity to exit the unfavorable market steady for items or business orderly
with minimum cost, controlling the risks to reduce losses.
2. Property rental and service
Maintaining the stable operation of property rental business, under overcoming negative factor of soaring human
costs, create a service brand of Tellus Property, highering letting rate through upgrade service quality, provided a
stable cash flow support for the Company in way of development. Making the most of property resources,
plan-out market design, ensuring income from property operation shows no major fluctuation in construction
period of key projects, and ensuring rental price and letting rate of property will ascend with stable state. Take the
whole situation into account and plan accordingly in aspect of construction progress and capital for the
construction of Tellus Shuibei Jewelry Bullding (Phase I), guarantee the implementation of key project on
schedule. Take the construction of Tellus-Gem Jewelry Industry Park as opportunity, explore value-added service
model for jewelry professional market, expanding the service from foundation to value-added, improving service
benefit.
(III) Operation planning
The Company will continues to insist on guiding ideology of “innovation-driven, adjustment & transition oriented
and aim at sustainable development”, closely surrounded by operation target of 2013, upholding the integration of
26
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
stable and development, seize opportunity, proactively, stimulated to promote development projects with all-out
effort; brand building, market extension and strive to searching new management model for Tellus; emphasize on
internal control and management, ensuring security, tap the potential and increase benefits with purpose of
highering operational ability and profitability for the enterprise.
(IV) Capital requirement in way of development
In 2013 the Company will play a platform role of listed company by innovation thinking and dual-wheel driving,
combine assets management with capital operation; on the one hand, seize financing ways and methods, take
operability, sustainability of enterprise and short/long/mid term benefit of the Group into consideration, determine
specific plan for financing projects; on other hand, liquidize remnant assets, raise funds for constructions and lay
the foundation of fully construction for projects. Capital requirement of future development strategy of the
Company mainly comes from the investment for Shuibei Jewelry Industry Park. And the Company will solve
capital resources by means of many channels.
(V) Risks probably confronted
1. Market competition intensifies
Being affected by the tight international political economy environment and slowing growth of Chinas economic
development, auto sales industry has a dramatically down in profit, gross margin of auto inspection and
maintenance business drop gradually, industry competition getting more and more serious. Based on the
requirement of market for property rental and management business, more and more professional and experience
talent team required, enterprises cost and market competition have been strengthen. On the one hand, the
Company will improve management standards, controlling cost to maintain a stable operation; On the other hand,
strengthen market exploitation, comply with current situation, rich the model of sales and service, discover new
profitability point combine with development of key projects, enhancing competitiveness of the enterprise,
upgrading profitability of the Company.
2. More pressure from cost
Domestic CPI still in high position, operation cost and expenses continues to soaring. Property rental and
management as well as auto repair belongs to the labor-intensive industry, the industry suffered a lot from labor
cost due to high proportion of basic-level operator, soaring cost of labor resources bringing a pressure on cost for
the Company. In order to solve this situation, the Company will organized its procedures, improved efficiency and
management standards, highering profit margin and lower impacts from soaring costs.
3. More pressure from capital
On one hand, general industry for auto sales are in an ill-conditioned, sales income suffering material influence;
on the other hand, self-generated cash flow hard to satisfy the development requirements totally due to
construction period of key projects, capital imbalance between supply and demand turns more and more obviously.
The Company will take vary means to financing, on one hand, continues to stabilize operation, maintain the stable
of routine operation cash flow, at the same time, liquidize remnant assts, dispose property with low-benefits
orderly and step out less efficiency projects in unfavorable market prospect, concentrate advantage resources for
key projects investment; one the other hand, proactively searching a steady financing channel, lower financing
cost to guarantee the promotion of key projects on schedule.
27
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
IX. Explanation from the Board for “Qualified Opinion” from the CPA
Nil
X. Comparing with last year’s financial report, explain changes in aspect of accounting policy,
accounting estimates and calculation measures
Nil
XI. Particular about major accounting errors correction that needs retroactive re-statement
in reporting period
Nil
XII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
Nil
XIII. Profit and dividend distribution
Formulation, execution or adjustment for profit distribution policy in reporting period, cash bonus policy in particular
In accordance with regulations of cash dividend regulated in Article of Association, the Company always,
formulated specific plan of cash dividend after deliberation from the Board and Shareholders General Meeting,
totally asking for opinions from independent directors, which guarantee interest of minorities, and disclose timely
and accuracy on Annual Report and relevant medial based on requirement of regulations and systems.
In accordance with requirement of “Notification on Serious Implementation on Relevant Requirement of Notice
of Further Implementation of Cash Dividend For Listed Company”, with purpose of guarantee interest of
investors, the Company convened the 2nd extraordinary meeting of 7th session of the Board dated 30 July 2012, the
“Proposal of Amendment on Article of Association” (revised correspondingly on cash dividend clause regulated
in original Article of Association) and “Proposal of Formulation of Shareholders Return Plan in the Next Three
Years (2012-2014)” were deliberated and approved in the Meeting, more details found in “Resolution Notice of
2nd extraordinary meeting of 7th session of the Board (No.: 2012-016)”. The “Proposal of Amendment on Article
of Association” and “Proposal of Formulation of Shareholders Return Plan in the Next Three Years
(2012-2014)” have been deliberated and approved in First Extraordinary Shareholders General Meeting of 2012.
The Company will follow the revised Article of Association, regulations and relevant rules, continues to
implemented relevant works with cash dividend concerned, attach importance to shareholder return and create
more return for shareholders.
Net profit attributable to shareholder of parent company in consolidation statement for year of 2012 amounting as
RMB 7,146,259.35; profit of 2012 plans to un-distribution and un-capitalizing, retained profit will cover deficit of
the previous year. The aforesaid profit distribution plan should deliberate and approve in Annual Shareholders
General Meeting of 2012.
Independent opinions on un-distribution profit plan from independent directors are as: accepting the decision of
28
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
profit distribution for year of 2012, profit of 2012 plans to un-distribution and un-capitalizing, retained profit of
the Company will cover deficit of the previous year.
Profit distribution plan and capitalizing of common reserves plan of the Company are complied with relevant
regulations of Article of Association.
Profit distribution plan and capitalizing of common reserves plan in reporting period are complying with relevant regulations of
Article of Association.
Profit distribution plan and capitalizing of common reserves plan in latest three years (including the reporting period)
Profit of 2010 and 2011 are not distributed and no capitalizing, the retained profit were cover the deficit
previously.
The profit of 2012 plans no distribution and no capitalizing, retained profits were covering the deficit previously.
Cash dividend in latest three years
Unit: RMB
Net profit attributable to Ratio in net profit attributable to
Amount for cash bonus (tax shareholders of listed company shareholders of listed company
Year for bonus shares
included) in consolidation statement for contained in consolidation
bonus year statement (%)
2012 0.00 7,146,259.35 0%
2011 0.00 2,157,675.12 0%
2010 0.00 3,584,445.78 0%
The Company gains profits in reporting period and the retained profit of parent company is positive but no plan of cash dividend
proposed
□ Applicable √ Not applicable
XIV. Social responsibility
Base on fair principle, the Company always protects legal interest of creditors and suppliers, proactively care and
support business of community public cultural undertakings. Under premise of soaring benefits and sustainable
development, the Company emphasized on perfection of working situation and living environment for employees;
strengthen occupational protection and healthcare check-up, and take effective measures to supporting difficult
employees, improve salary for the employees step by step. Always attaches great importance to safety production,
totally implemented safety production responsibility system; seriously implemented responsibility of enterprise
entity based on “Production Safety Law”; concentrate on “three combinations”, that is combine totally inspection
with key spot test, combine census with plug up loophole and combine combat with emergency exercise; exercise
targeted specific examination regularly/ irregularly; place stress upon the personnel densely place for jewel
crafting enterprise and fire-fighting equipment of high-rise buildings, eliminate security risks, and totally 14
emergency exercise organized in whole year; conducting safety training to higher employees safety awareness.
Holding enterprise of the Group are realized pre-job safety training totally; Huari Company honor the title of
“Standard Enterprise of Safety Culture Construction” from Security Administration of Shenzhen; according to
characteristics of the Company, strengthen safety improvement, highering routine security prevention capacity
greatly, reduce and lower existing security hazard and risks, achieved safety production without major accidents
29
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
in whole year.
XV. In the report period, reception of research, communication and interview
Contents discussed and
Time Place Way Type Reception
material provided
30
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Section V. Iimportant Events
I. Significant lawsuits and arbitrations of the Company
√Applicable □Not applicable
Amount Whether
involved comes to Judgment
Basic information of Progress of lawsuits Trial results and Disclosure Index of
(in 10 accrual enforcement
lawsuits (arbitration) (arbitration) influence date disclosure
thousand liability situation
yuan) or not
The Company
entered into
“Agreement of
Exempt From the
Concerning Shenzhen
Liability for
Branch of Agriculture
Guarantee” with The amount
Bank of China sued to the
Shenzhen Shangbu involved in the
Court for overdue payment
Sub ranch of lawsuit was
RMB 57.6 million from
Agriculture Bank of withdrawal accrual
Shenzhen Petrochemical
China Co., Ltd. on liability RMB Found in
Industrial Corporation
13 December 2012. 87.5687 million in “Progress of
Ltd.(“Petrochemical
The two parties 2006. The Lawsuits”
company ” for short) and
confirmed that ended Company (No.:
guarantee by the Company
as 20 May 2012, the implements 2012-033)
as well as its judgments,
Company bear joint guarantee liability disclosed on
the Company has disclosed Implemented
and several liability by agreement, after Securities
the details. (more details guarantee
8,756.87 Yes guarantee for the deducting principal 2012-12-13 Times, Hong
found in Securities Times liability by
security offering to and interest, Kong
and Hong Kong Ta Kung agreement
Shenzhen ABC for litigation cost and Commercial
Pao dated 11 September
loan principal RMB attorney charge, Daily and
2004 and 10 May 2006;
57.6 million, the non-operation Juchao
Securities Times and Wen
interest and litigation income amounting Website dated
Wei Po dated 17 April
costs paid in advance as RMB 14.3775 14 December
2007 and 19 February
from Petrochemical million, which 2012
2008 as well as Securities
company. The brings a
Times and Hong Kong
Company will corresponding
Commercial Daily dated
implement loan influence on
15 January 2010, 9 July
guarantee current profit.
2010 and 14 December
responsibility, paying
2012
owed loan principal
and loan interest to
Shenzhen ABC and
litigation costs paid
31
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
in advance RMB
66.4013 for
Petrochemical
company in total.
The Company wills
fulfill the guarantee
liability by the
aforsaid agreement,
Shenzhen ABC
exempts from
liability of the
Company for loan
interest unpaid to
Petrochemical
Company and joint
and several liability
guarantees for the
new interest since 20
May 2012.
Questioned from media
□ Applicable √ Not applicable
No media questioned for the Company in reporting period
II. Particular about non-business fund occupation by controlling shareholders and its related
parties
Total
Amount of New
repayment Amount of
the holding Expected
Name of amount in the end of Expected
beginning amount in Expected repayment
shareholder the the repayment
Holding
or Reason of the the repayment amount (in
time reporting reporting (in time
connected
reporting (in reporting (in method 10 thousand
person (in 10 10 thousand (month)
10 thousand 10 thousand yuan)
thousand yuan)
yuan) yuan)
yuan)
Total 0 0 0 0 -- 0 --
Ratio of total value at period-end in
0%
net assets of period-end (%)
III. Bankruptcy reorganization
No bankruptcy reorganization occurred in reporting period
32
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
IV. Assets transaction
1. Purchase of assets
Net profit
Net profit
contributed to
contributed to
the listed
the listed Ratio of
Company
Company from net profit
from the begin The related
the purchase contribut
The other to the end of relationshi
party of Purchase date to the end ed by the Related
the p(applicabl
transacti Assets price (in of the assets for transact Date of Index of
on or purchase 10 Progress reporting(in e for
final d thousand reporting(in 10 listed ion or disclosure disclosure
10 thousand related
controlle yuan) thousand company not
r yuan)(applica transaction
yuan))(applicab in total
ble for )
le for enterprise profit
enterprise
merger under (%)
merger under
the uncommon
the common
control)
control)
Overview of assets purchasing
No purchasing in reporting period
2. Assets sold
Ratio of
Net net
profit
contribu profit
The ted to contribu
the
other listed ted by The Assets
Gains/lo Credit
Compan related rights
party of Sales sses the sold Explana Related relations concern and
y from liability Date of Index of
transacti Assets Sales price (in from assets tion on transacti hip(appl ed
the concern
10 sales (in icable transferr disclosu disclosu
on or sold date begin of for price on or ed
thousan 10 for ed
the shifted re re
final d yuan) thousan listed setting not related ownersh
reportin fully or
d yuan) transacti ip fully
controll g to compan not
the sales on) or not
er date(in y in
10 total
thousan
d yuan) profit
(%)
Overview of assets sold
1) The property A1 and B5 of annex building of 5#, 6#, 7# Weipeng Garden owed by controlling subsidiary of the Company--
Shenzhen Auto Industry and Trade Corporation were transfer by bidding to nature person Yang Haifeng and Zan Qingli with RMB
1.17 million and RMB 1.63 million respectively; Room 102, Building 4, Weipeng Garden was listed negotiating transfer to nature
person He Huaquan with price of RMB 3.396 million. Relevant events please found in “Notice of Assets Sold”(No.: 2012-021)
published on Securities Times, Hong Kong Commercial Daily and Juchao Website (http://www.cninfo.com.cn) respectively dated 31
33
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
August 2012.
2) The property B4of annex building of 5#,6#,7# Weipeng Garden, Room 801, Dongfeng Building and other 10 properties owed by
controlling subsidiary of the Company-- Shenzhen Auto Industry and Trade Corporation were negotiating transfer to nature person
Chen Ping with price of RMB 7.3005 million and RMB 15.59 million respectively. Relevant events please found in “Notice of
Assets Sold”(No.: 2013-001) published on Securities Times, Hong Kong Commercial Daily and Juchao Website
(http://www.cninfo.com.cn) respectively dated 8 January 2013.
3. Enterprise merger
In the reporting, the company has no enterprise merger.
V. Implementation and its influence of equity incentive plan
No implementation of equity incentive plan carried out in reporting period
VI. Material related transactions
1. Related transaction with daily operation concerned
Proportio Settlemen
Amount
Pricing n to
Type of Content Price of of related t method
Related principles amount of Market Disclosur Index of
Related related of related related transactio
relationsh of related transactio of related
party transactio transactio transactio n (10 price e date disclosure
ip transactio n or the transactio
n n n thousand
n same type
yuan) n
(%)
Total -- -- 0 0% -- -- -- --
2. Related transactions by assets acquisition and sold
Income
Related Book Assessm
Market gained
transacti value of ent value Transfer Related
Related Related Related fair from
Related on transfer of price (in transacti Date of Index of
transacti transacti transacti value (in assets
relations explanati assets (in transfer 10 on disclosur disclosur
on on on 10 transfer
hip on on 10 assets (in thousand settleme e e
parties type content thousand (in 10
price thousand 10 yuan) nt mode
yuan) thousand
setting yuan) thousand
yuan)
yuan)
3. Main related transactions of mutual investment outside
Mutual Total assets Net assets of Net profit of
Main Registered
Mutual investments Name of of companies companies companies
Related business of capital of
investment pricing companies invested (in invested (in invested (in
relationship companies companies
party principle invested 10 thousand 10 thousand 10 thousand
invested invested
yuan) yuan) yuan)
34
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
4. Contact of related credit and debt
Whether exist non-operating contact of related credit and debt or not
√Yes □No
Balance of Amount of the
Whether exist Balance at
period-begin period
Related Type of credit Forming non-operation period-end (in
Related party (in 10 occurrence (in
relationship and debt reason al capital 10 thousand
thousand 10 thousand
occupying yuan)
yuan) yuan)
Debts payable
SHENZHEN SDG Parent Long-term
to related No 0 7,300 7,300
CO., LTD. company loans
party
Debts payable
SHENZHEN SDG Parent Current
to related No 4,627 166 4,793
CO., LTD. company account
party
Debts payable
SHENZHEN SDG Parent Short-term
to related No 1,919 -11 1,908
CO., LTD. company loans
party
5. Other significant related transactions
The Company entered into “Loan Agreement” with SHENZHEN SDG CO., LTD. (“SDG” for short) for
SEVENTY THREE MILLION YUAN loans from SDG with term of three years. The transaction constitute
related transaction due to the controlling shareholder of the Company is SDG.
Relevant details please found in “Notice of Related Transaction”(No.: 2012-034) published on Securities Times,
Hong Kong Commercial Daily and Juchao Website respectively dated 26 December 2012.
Inquiry of disclosure website for relevant interim reports of material related transaction
Notice name Dated for disclosed Website for interim report disclosed
Notice of Related Transaction 2012-12-26 Juchao Website
VII. Major contract and implantation
1. Trusteeship, contract and leasing
(1) Trusteeship
Explanation on trusteeship
No trusteeship
Items generated over 10% gains/losses in total profit in reporting period for the Company
□ Applicable √ Not applicable
35
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
(2) Contract
Explanation on contract
No contract
Items generated over 10% gains/losses in total profit in reporting period for the Company
□ Applicable √ Not applicable
(3) Leasing
Explanation on leasing
No leasing
Items generated over 10% gains/losses in total profit in reporting period for the Company
□Applicable √Not applicable
2. Guarantee
In ten thousand yuan
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Guarante
Related Actual date of
Complete e for
Announcem happening
Name of the Guarantee Actual Guarantee Guarantee implemen related
ent (Date of
Company guaranteed limit guarantee limit type term tation or party
disclosure signing
not (Yes or
date agreement)
no)
Guarantee of the Company for the subsidiaries
Guarante
Related Actual date of
Complete e for
Announcem happening
Name of the Guarantee Actual Guarantee Guarantee implemen related
ent (Date of
Company guaranteed limit guarantee limit type term tation or party
disclosure signing
not (Yes or
date agreement)
no)
Total guarantee amount (total of the aforesaid items)
Including:
Explanation on guarantee with composite way
(1) Guarantee provided against regulations
In 10 thousand yuan
Amount
Amount
guarantee Predicted
guarantee Ratio in Ratio in
Relationsh against amount Predicted
against net assets net assets Predicted
Guarantee ip with Guarantee Guarantee regulation relieve (in date
regulation at at methods to
name listed type term ended 10 relieve(mo
(in 10 period-end period-end relieve
company before thousand nth)
thousand (%) (%)
annual yuan)
yuan)
report (in
36
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
10
thousand
yuan)
Total 0 0% -- -- 0 0% -- -- --
3. Other material contracts
Appraisal
Book
value for
value of
assets
amount Base date Trading Whether Implement
Company involved
Name of involved Appraisal of assets price (in constitute Related ation
entered in Pricing
counterpar in contract agency (if evaluation 10 related relationshi ended as
into a contract(in principle
t (in 10 applicable) (if thousand transaction p reporting
contract 10
thousand applicable) yuan) or not period
thousand
yuan) (if
yuan) (if
applicable)
applicable)
VIII. Implementation of committment
1. Commitments made by the Company or shareholders holding above 5% shares of the Company in
reporting period or extending to reporting period.
Commitment Commitment
Commitments Accepter Contents Implementation
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
commitment duty.
(2) Apart from the above-mentioned statutory
commitment, SDG also made the following special
commitment: with 36 months since the day the
reform plan starts to take effect, SDG would not list
at Shenzhen Stock Exchange and sell the shares of
Tellus it held (except for the shares used to promote
the administration level of Tellus).
Commitments for
(3) The administration level would abide by the
SDG 2005-12-25 Long-term Implementing
Share Merger Reform 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
37
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
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 Companys
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.
Commitments in report
of acquisition or
equity change
Commitments in assets
replacement
Commitments make in
Initial public offering or
re-financing
Other commitments for
minority shareholders
Other commitments for
medium and small Yes
shareholders
Detail reasons for
un-complement and N/A
further plan
Whether made a
promise to horizontal
competition and related No
transactions that
resulted or not
Solution term promised N/A
Solution way N/A
Complementation Implementing
38
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
2. Concerning assts or project of the Company, which has profit forecast, and reporting period still in
forecasting period, explain reasons of reaching the original profit forecast
Forecast Actual Reasons failure
Assets or Disclosure date Index of
Date starting Date ended for performance performance to reached
project owes for original original
for forecast forecast currently (in 10 currently (in 10 forecast (if
profit forecast forecast forecast
thousand yuan) thousand yuan) applicable)
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm RSM China Certified Public Accountants LLP
Remuneration for domestic accounting firm (in 10
55
thousand Yuan)
Continuous life of auditing service for domestic
1
accounting firm
Name of domestic CPA Qin Changming, Zhou Wuzhong
Whether re-appointed accounting firms in this period or not
√Yes □No
Whether re-appointed accounting firms during auditing period or not
□Yes √No
Whether completed approval process while changing accounting firms or not
√Yes □ No
Explanation on re-engagement and changes of accounting firms
The “Merge Statement” co-issued by Shenzhen Branch of China Audit International CPA Ltd. (“Shenzhen Branch
of CAICPA”) and RSM China Certified Public Accountants LLP was received by the Company in October 2012,
former Shenzhen Branch of CAICPA are merged with RSM China Certified Public Accountants LLP, the CPA
named RSM China Certified Public Accountants LLP (“RSM”) after mergered. All audit and verification legal
business of Shenzhen Branch of CAICPA will transfer to RSM for handling after merger. Before that, the contract
signed and implemented and reports issued under the name of CAICPA continues to remain in force, and RSM
continues to perform rights and obligation after business carried forward. In consideration of the above facts, the
Company will engage RSM as the audit institution for financial and internal control of 2012 of the Company from
CAICPA in order to maintain the continuity and stability of auditing works. The aforesaid event has been
deliberated and approved in 5th extraordinary meeting of 7th session of the Board dated 26 October 2012 and 2nd
extraordinary shareholders general meeting of 2012.
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√ Applicable □Not applicable
In reporting period, RSM China Certified Public Accountants was engaged by the Company as audit institute for internal control,
remuneration amounting as RMB 240,000.
39
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
X. Explanation from Supervisory Committee and Independent Directors (if applicable) for
“Qualified Opinion” from the CPA
Nil
XI. Penalty and rectification
Type of
Conclusion (if Index of
Name Type Reasons investigation and Disclosure date
applicable) disclosure
penalty
Explanation on rectification
No penalty and rectification occurred in reproting period
Particular about directors, supervisors, senior executives and shareholders with over 5% shares held suspected illegal dealings of the
stock of the Company and earnings of illegal dealings taken back by the Company that disclosed
□Applicable √ Not applicable
XII. Suspension and delisting after disclosure of annual report
No particular about suspension and delisting after annual report disclosed.
XIII. Explanation on other significant events
Serial Notice No.: Content Date of publish in the newspaper
1 2012-001 Resolution of 26th estraordinary meeting of 6th session of 2012-1-20
the Board
2 2012-002 Resignation of the Director and General Manager 2012-2-24
3 2012-003 Resolution of 21st estraordinary meeting of 6th session of 2012-2-24
the Board
4 2012-004 Performance forcast of first quarterly 2012-4-14
5 2012-005 Resolution of 10th officially meeting of 6th session of the 2012-4-14
Board
6 2012-006 The 13th meeting of 6th session of supervisory committee 2012-4-14
7 2012-007 Summary of annual report 2011 2012-4-14
8 2012-008 Abnormal fluctuation for stock price 2012-4-17
9 2012-008 Summary of first quarterly report 2012-4-25
40
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
10 2012-009 Resolution of 23rd extraordinary meeting of 6th session of 2012-5-16
the Board
11 2012-010 The 15th meeting of 6th session of supervisory committee 2012-5-16
12 2012-011 Notice of Annual Shareholders General Meeting for year of 2012-5-16
2011
13 2012-012 Resolution of Annual Shareholders General Meeting for 2012-6-7
year of 2011
14 2012-013 Resolution of First Meeting of 7th session of supervisory 2012-6-8
committee
15 2012-014 Resolution of First extraordianry meeting of 7th session of 2012-6-8
the Board
16 2012-015 Performance forcast of semi-annual report 2012-7-14
17 2012-016 Resolution Notice of Second extraordianry meeting of 7th 2012-7-31
session of the Board
18 2012-017 Resolution Notice of Second Meeting of 7th session of 2012-7-31
supervisory committee
19 2012-018 Notice of First Extraordinary Shareholders General 2012-7-31
Meeting of 2012
20 2012-019 Notice of Correction for Network Voting of Shareholders 2012-8-1
Genral Meeting
21 2012-020 Suggestive Notice of First Extraordinary Shareholders 2012-8-11
General Meeting of 2012
22 2012-021 Summary of Semi-annual report of 2012 2012-8-16
23 2012-022 Resolution notice of first officially meeting of 7th session 2012-8-16
of the Board
24 2012-023 Resolution notice of 3rd meeting of 7th session of 2012-8-16
supervisory committee
25 2012-024 Resolution of first extraordinary shareholders general 2012-8-16
meeting of 2012
26 2012-021 Notice of assets sold 2012-8-31
27 2012-025 Performance forecast of third quarterly of 2012 2012-10-13
28 2012-026 Third quarterly reprot of 2012 2012-10-22
29 2012-027 Resolution notice of the Board (5th extraordinary of 7th 2012-10-30
41
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
session)
30 2012-028 Changes of the audit institution of financial and internal 2012-10-30
control for year of 2012
31 2012-029 Notice of 2nd extraordinary shareholders general meeting 2012-10-30
of 2012
32 2012-030 Correction on changes of audit institution of financial and 2012-11-3
internal control
33 2012-031 Specific notice on un-completed commitments from 2012-11-7
shareholders, related party and the Company
34 2012-032 Resolution notice of 2nd extraordinary shareholders 2012-11-15
general meeting of 2012
35 2012-033 Progress of lawsuits 2012-12-14
36 2012-034 Notice of related transaction 2012-12-26
37 2012-035 Resolution notice of the Board (8th extraordianry of 7th 2012-12-26
session)
XIV. Significant events of the subsidiaries
Nil
XV. Corporate bond offering
Nil
42
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in shares
Before change Increase/decrease in this time (+ , - ) After change
Ratio New Bonus Capitalization of public Ratio
Amount Other Subtotal Amount
(%) issue share reserve (%)
I. Restricted shares 14,587,056 6.62% 14,587,056 6.62%
2. State-owned corporation
14,587,056 6.62% 14,587,056 6.62%
shares
II. Un-restricted shares 205,694,544 93.38% 205,694,544 93.38%
1. RMB ordinary shares 179,294,544 81.39% 179,294,544 81.39%
2. Domestically listed
26,400,000 11.98% 26,400,000 11.98%
foreign shares
III. Total shares 220,281,600 100% 220,281,600 100%
Reasons for share changed
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changed
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
II. Securities issue and listing
1. Previous security offering in latest three years at period-end
Numbers
Stock/derivative Offering price (or Circulation End of trading
Offering date Listing date approved for
securities interest rate) number date
trading
Stock
Convertible corporate bond, separably-traded convertible bond and corporate bonds
Warrant
Explanation on security offering in previous three years
43
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and
liability structure
Nil
3. Existing internal staff shares
Offering date of internal staff Circulation numbers of internal staff
Offering price for internal staff shares(RMB)
shares shares(Share)
III. Shareholders and actual controller
1. Number of shareholders of the Company and share-holding
Unit: Share
Total shareholders in reporting Total shareholders ended as the 5th trading day before annual report
17,450 16,716
period disclosed
Particulars about shares held above 5% by shareholders
Total Number of shares
Changes Amount of Amount of
Proportion shareholders at pledged/frozen
Full name of Nature of
of shares in report restricted unrestricted
Shareholders shareholder the end of
held (%)
period shares held shares held State of share Amount
report period
SHENZHEN State-owned
66.22% 145,870,560 0 14,587,056 131,283,504
SDG CO., LTD. corporation
Domestic
Wu Yongchun 0.3% 663,996 663,996 663,996
nature person
Domestic
Lin Fengyuan 0.23% 512,858 0 512,858
nature person
FISRT
SHANGHAI Foreign
0.23% 507,478 42800 507,478
SECURITIES corporation
LTD.
Domestic
Zhang Xiaoming 0.21% 463,961 22301 463,961
nature person
Domestic
Kan Hui 0.16% 369,126 7400 369,126
nature person
Domestic
Wang Shaoying 0.15% 338,498 211998 338,498
nature person
Domestic
Li Taoran 0.14% 330,058 330058 330,058
nature person
Shen Li Domestic 0.14% 322,260 322260 322,260
44
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
nature person
Domestic
Chen Shufeng 0.13% 308,300 308300 308,300
nature person
Strategy investors or general
corporation comes top 10
N/A
shareholders due to rights issue
(if applicable)
Among the top ten shareholders, there exists no associated relationship between the state-owned
Explanation on associated legal persons shareholders Shenzhen SDG Co., Ltd and other shareholders, and they do not
relationship among the top ten belong to the consistent actionist regulated by the Management Measure of Information
shareholders or consistent action 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 year-end (Note 4)
Type Amount
RMB ordinary
SHENZHEN SDG CO., LTD. 131,283,504
shares
RMB ordinary
Wu Yongchun 663,996
shares
Domestically
Lin Fengyuan 512,858 listed foreign
shares
Domestically
FISRT SHANGHAI
507,478 listed foreign
SECURITIES LTD.
shares
RMB ordinary
Zhang Xiaoming 463,961
shares
RMB ordinary
Kan Hui 369,126
shares
Domestically
Wang Shaoying 338,498 listed foreign
shares
RMB ordinary
Li Taoran 330,058
shares
Domestically
Shen Li 322,260 listed foreign
shares
RMB ordinary
Chen Shufeng 308,300
shares
45
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Expiation on associated
Among the top ten shareholders, there exists no associated relationship between the state-owned
relationship or consistent actors
legal persons shareholders Shenzhen SDG Co., Ltd and other shareholders, and they do not
within the top 10 un-restrict
belong to the consistent actionist regulated by the Management Measure of Information
shareholders and between top 10
Disclosure on Change of Shareholding for Listed Companies. For the other shareholders of
un-restrict shareholders and top
circulation share, the Company is unknown whether they belong to the consistent actionist.
10 shareholders
Explanation on shareholders
involved in securities margin N/A
trading business (if applicable)
2. Controlling shareholder of the Company
Corporation
Legal
Controlling Date Organization Register
rep./person in Main business
shareholder established code capital
charge of unit
Develop enterprise investment (specific projects needs
application); develop tourism industry investment;
operation and development of real estate; domestic
RMB
SHENZHEN SDG business and supply & marketing industry of materials
Liu Aiqun 1982-06-20 192194195 1582.82
CO., LTD. (excluding monopolized commodity and commodity
million
under special government control); economic advisory
consultant (excluding restricted projects); import & export
business
Operation result,
financial status, cash
flow and future -
development
strategy ect
Changes of controlling shareholder in reporting period
□ Applicable √ Not applicable
3. Actual controller of the Company
Corporation
Legal
Date
Actual controller rep./person in Organization code Register capital Main business
established
charge of unit
Shenzhen Municipal
Peoples Government
Zhang Xiaoli Not applicable Not applicable Not applicable
State-owned Assets
Supervision and
46
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Administration Commission
Operation result, financial
status, cash flow and future Not applicable
development strategy ect.
Equity of other
domestic/foreign listed
company controlled by Not applicable
actual controller in reporting
period
Changes of actual controllers reporting period
□Applicable √Not applicable
Property right and controlling relationship between the actual controller and the Company is as follow:
Shenzhen Municipal Peoples Government State-owned Assets Supervision and Administration Commission
43.30%
Shenzhen SDG Co., Ltd.
66.22%
Shenzhen Tellus Holding Co., Ltd.
Actual controller controlling the Company by entrust or other assets management
□Applicable √Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
Legal rep. /
Main operation
Person in Date of
Legal person shareholder Organization code Register capital business or
charge of the foundation
management activities
Unit
IV. Share holding increasing plan proposed or implemented in reporting period from
shareholder of the Company and its concerted action person
Disclosure dated
Shareholder/conc Ratio of shares Ratio of shares
Shares holding Shares holding Initial disclosure for end of
erted action plans to increased actually increased
plans to increased actually increased date shareholding
person (%) (%)
increased
Explanation on others
47
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Section VII. Particulars about Directors, Supervisors and Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Increasing Decreasing
Shares held
shares held shares held
Working Start dated at Shares held at
End date of
Title Sex Age of office in this in this
Name status office term period-begin period-end(Share)
term
period period
(Share)
(Share) (Share)
Zhang Currently
Chairman M 50 2012-06-06 2015-06-05 0 0 0 0
Ruili in office
Director, Currently
Luo Bojun M 51 2012-06-06 2015-06-05 0 0 0 0
GM in office
Director, Currently
Fu Bo M 51 2012-06-06 2015-06-05 0 0 0 0
CFO in office
Zhang Currently
Director M 54 2012-06-06 2015-06-05 0 0 0 0
Jianmin in office
Currently
Yu Lei Director F 45 2012-06-06 2015-06-05 0 0 0 0
in office
Liu Independent Currently
F 59 2012-06-06 2015-06-05 0 0 0 0
Hongling Director in office
Wei Independent Currently
M 41 2012-06-06 2015-06-05 0 0 0 0
Shaohui Director in office
Independent Currently
Ji Huibin M 43 2012-11-14 2015-06-05 0 0 0 0
Director in office
Guan Currently
Supervisor M 59 2012-06-06 2015-06-05 0 0 0 0
Zhicai in office
Zhang Currently
Supervisor M 43 2012-06-06 2015-06-05 0 0 0 0
Xinliang in office
Fu Currently
Supervisor M 40 2012-06-06 2015-06-05 0 0 0 0
Chunlong in office
Wang Currently
Supervisor M 55 2012-06-06 2015-06-05 0 0 0 0
Guangye in office
Ke Currently
Supervisor F 45 2012-06-06 2015-06-05 0 0 0 0
Wensheng in office
Executive Gurrently
Guo Jian M 2013-03-12 2015-06-05 0 0 0 0
Deputy GM in office
48
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Ren Currently
Deputy GM M 50 2012-06-07 2015-06-05 0 0 0 0
Yongjian in office
Deputy GM,
Guo Currently
Secretary of M 48 2012-06-07 2015-06-05 0 0 0 0
Dongri in office
the Board
Currently
Fen Yu Deputy GM M 46 2012-06-07 2015-06-05 0 0 0 0
in office
Zhang Office
Director M 48 2012-06-06 2013-03-11 0 0 0 0
Junlin leaving
Shi Office
Director M 55 2009-06-18 2012-06-06 0 0 0 0
Changyue leaving
Director, Office
Lv Hang M 52 2011-06-15 2012-02-23 0 0 0 0
GM leaving
Jiang Independent Office
M 52 2012-06-06 2012-11-14 0 0 0 0
Hongjun Director leaving
Independent Office
Ji Dejun M 69 2009-06-18 2012-06-06 0 0 0 0
Director leaving
0 0 0 0
Total -- -- -- -- -- -- 0 0 0 0
II. Post-holding
Major working experience of directors, supervisors and senior executive at the present in latest five years
Name Main work experience and holding the post or taking part-time job
He ever took the posts of Divisional Manager of Financial Company of Shenzhen Special Economic Zone
Development (Group) Company and Manager of Assets Department of Shenzhen Special Economic Zone
Development (Group) Company; now, he takes the post of Chairman of the Board of the Group. At the same time,
he concurrently Chairman of the Board in Shenzhen Auto Industry and Trade Corporation (the controlling
Zhang Ruili
subsidiaries of the Company), Chairman of the Board in Shenzhen SD Huari Automobile Co. Ltd. (the controlling
subsidiaries of the Company), Chairman of Shenzhen Xinglong Machinery Module Co., Ltd. (the associated
company of the Company) and deputy chairman of Shenzhen Zung Fu Tellus Auto Service Co., Ltd. (the associated
company of the Company)
He ever took the posts of Deputy Manager of HR Dept. and Director of Human Resource Communication Training
Center in the Company, and Deputy General Manger of Shenzhen Auto Industry and Trade Corporation. Now he
serves as Director and General Manager of the Company, at the same time, he concurrently took the posts of
Director of Shenzhen Auto Industry and Trade Corporation (the controlling subsidiary of the Company), Director of
Luo Bojun Shenzhen SD Huari Automobile Enterprise Co. Ltd. (the controlling subsidiaries of the Company), Chairman of the
Board of Shenzhen Teyao Investment Development Co., Ltd. (the controlling subsidiary of the Company),
Chairman of the Board of Shenzhen Tellus Xing Investment Co., Ltd. (jointed venture of the Company), Chairman
of the Board of Shenzhen Tellus Gem Investment Co., Ltd( the joint-venture company of the Company), deputy
chairman of Shenzhen Dongfeng Automobile Co., Ltd. (the associated company of the Company) and director
49
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
of Shenzhen Xinglong Mold Co., Ltd. (the associated company of the Company).
He ever took the posts of lecturer in Hunan College of Finance and Economics, Business Manager of Assets
Operation Department in Shenzhen SDG Co., Ltd., CFO of Shenzhen SDG Xiaomeisha Tourism Center. He now
Fu Bin acts as Director and CFO of the Group. At the same time, he concurrently took the post of Director of Shenzhen
Auto Industry and Trade Corporation (the controlling subsidiaries of the Company). And serve as the director of
China Perfect Machinery Industry Corp., Ltd. (the associated company of the Company).
He ever took the posts of secretary of committee for discipline inspection of Shenzhen SDG Co., Ltd. Now he acts
as the deputy GM of Shenzhen SDG Co., Ltd., director of the Company and at the same time, serve as the director
Zhang Jianmin
of Hon Kwok Sanhe Co., Ltd., director of Shenzhen International Enterprise Co., Ltd. and director of Shenzhen
SDG Information Co., Ltd. respectively.
She ever took the posts of secretary of international corporation dept. of Vocational Education Training Center of
Chaoyang District, Beijing, the deputy director, director and deputy chief of Luohu Branch of Shenzhen Home Land
Yu Lei Planning Bureau, the vice director and director of State-owned Assets Supervision and Administration Commission
of Peoples Government of Shenzhen; now she serves as deputy GM of SHENZHEN SDG CO., LTD. and Director
of the Company.
She ever took the posts of Assistant Accountant of Financial Department of Tianjin Components Industries
Corporation, Senior Staff of Tianjin Electronic Instruments Management Bureau, Deputy Head of Tianjin
Liu Hongling Zhonghuan Certified Public Accountants, CFO of Shenzhen Yongxing Industrial and Commercial Corporation,
Head of Shenzhen Weiming Appraisal Institute, and Chairman of Shenzhen Sinocoms Appraisal Co., Ltd. Now she
serves as deputy GM of Beijing Jimkai Sinocoms Appraisal Co., Ltd. and independent director of the Company.
He ever took post of law assistant and full-time attorney of Guangdong Shu Jun Law Firm. Now he serves as senior
Wei Shaohui partner of Guangdong Shu Jun Law Firm, and independent director of the Company; meanwhile serves as
independent director of Longhao Tiandi Co., Ltd. and Shenzhen Click Technology Co., Ltd. respectively.
He ever took the posts of project manager, director of engineering dept. deputy GM and GM of Shenzhen Jianyi
Municipal Engineering Co., Ltd; director of engineering dept. and director of operation dept. of Shenzhen Jianyi
Ji Huibin
Industrial Co., Ltd. Now he serves as deputy GM of Pang Yuan Real Estate Development Co., Ltd. and independent
director of the Company.
He ever took the posts of Workers, Head of Workshop Section, and Secretary Of Youth League Committee in
state-owned 5501 plant, and worked in Shenyang Agricultural Machinery Automotive Industry Bureau and
Shenyang Automotives Industry General Corporation. He also took the posts of Deputy Officer, Deputy Head and
Head of Enterprise Management Department, Director of Reform Office, Director of the Board, Vice Secretary
Guang Zhicai General of the Board of Shenyang Jinbei Automotive Company Limited; Secretary of Party Committee and Deputy
GM of Shenzhen Radio Industry and Trade Corporation, Deputy GM of Shenzhen Liming Industry Corporation;
Deputy GM of Shenzhen SDG Liming Group Co., Ltd., Vice Chairman and GM and Secretary of Party Committee
of Shenzhen SDG Liming Group Co., Ltd., Chairman and Secretary of Party Committee of Shenzhen SDG Liming
Group Co., Ltd. Now he acts as Chairman of Supervisory Committee of the Company.
He ever took the post of Manager of Financial Dept in Machinery And Equipment Import And Export Company,
Deputy Manager of Shenzhen SDG Co., Ltd. Now, he acts the supervisor of the group, Head of Audit and
Zhang Xinliang
Supervision Dept. and concurrently the Secretary of the supervisor committee of Shenzhen SDG Co., Ltd, and
Supervisor of the Company.
He ever took the Business Deputy General Manager of HR Department of Shenzhen SDG Co., Ltd., Deputy Team
Fu Chunlong Leader in Work Team of Shenzhen Tefa Huatong Packaging Co., Ltd. Now, he is the Deputy Minister of HR
Department of Shenzhen SDG Co., Ltd. and Supervisor of the Company.
50
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
He ever took the post of Deputy General Manger of Financial Department and Deputy General Manager of Auditing
Department in Shenzhen Tellus Holding Co., Ltd.; Now he acts as the Manager of Auditing Department in Shenzhen
Tellus Holing Co., Ltd and Employee Supervisor of the group. Meanwhile, he serves as supervisor of Shenzhen
Auto Industry and Trade Corporation (the controlling subsidiaries of the Company), supervisor of Shenzhen Tellus
Xinyongtong Auto Development Co., Ltd. (the controlling subsidiaries of the Company) and of Shenzhen SD Tellus
Wang Guangye Property Management Co., Ltd. (the controlling subsidiaries of the Company); and serves as supervisors in the
follow units as Shenzhen Xingyongtong Auto Inspection Equipment Co., Ltd. (the controlling subsidiaries of the
Company), Shenzhen SD Tellus Real Estate Co., Ltd. (the controlling subsidiaries of the Company), Shenzhen
Tellus Real Estate Exchange Co., Ltd. (the controlling subsidiaries of the Company), Shenzhen Xinglong Machinery
Mold Co., Ltd. (affiliated company of the Company) and Shenzhen Tellus Gem Investment Co., Ltd. (joint-venture
of the Company) respectively.
She ever acts as the teacher in School of Guangdong Foreign Trade, major accountant of Shenzhen SDG Co., Ltd.
and deputy GM and GM of the Accounting and Financial Dept. of the Company. Now, she acts as the GM of
Accounting and Financial Dept. and staff supervisor of the Company, director of Shenzhen Tellus Xinyongtong
Auto Development Co., Ltd., director of the Shenzhen Zhongtian Industrial Co., Ltd.(controlling subsidiary of the
Ke Wensheng Company), and Shenzhen Teyao Investment Development Co., Ltd.; serve as the supervisor of Shenzhen Tellus Real
Estates Exchange Co., Ltd. (the controlling subsidiaries of the Company), Shenzhen SD Tellus Property
Management Co., Ltd. (the controlling subsidiaries of the Company), Shenzhen Telihang Investment Co.,
Ltd.(joint-venture of the Company), Shenzhen Dongfeng Automobile Co., Ltd. And Shenzhen Auto Industry
Imp-Exp Co., Ltd. (joint-venture of the Company) respectively.
He ever took the posts of Software Engineer and Project Manager of Shenzhen Changhong Communication
Equipment Co., Ltd., Business Deputy General Manager and Senior Engineer of Development Dept. and Business
Management Dept., Deputy General Manager of Business Management Dept.1, Deputy Minister and Minister of
Guo Jian
Buseness Management Dept. of Shenzhen SDG Co., Ltd., Deputy GM of General Branch of Shenzhen SDG
Xiaomeisha Tourism Center, Deputy GM of Shenzhen SDG Information Co., Ltd, Minister of Business
Management Dept. of Shenzhen SDG Co., Ltd; He now acts as the executive Deputy GM of the company.
He ever took the posts of Manager of China Marketing Department of Shanghai Pepsi Food Co., Ltd. and Assistant
General Manager of the Company. He now acts as Deputy General Manager and secretary of the Board of the
Guo Dongri
Company. Meanwhile, he serves as director of Shenzhen Xinyongtong Motor Vehicle Inspection Equipment Co.,
Ltd(the controlling subsidiary of the Company)
He ever took the posts of Deputy Manager of Planning & Financial Dept. and Manager of Auditing Dept. in
Shenzhen Special Economic Zone Development (Group) Company; Director and CFO of the Company. He now
acts as Deputy General Manager of the Company and concurrently holds the post of Director of Shenzhen Auto
Industry and Trade Corporation (the controlling subsidiary of the Company), Director of Shenzhen Tellus Xing
Ren Yongjian Investment Co., Ltd. (joint-venture of the Company), Director of Shenzhen Tellus Gem Investment Co.,
Ltd.( joint-venture company of the Company) , Director of and of Shenzhen Dongfeng Automobile Co.,
Ltd.(associated company of the Company) and Director of Shenzhen Zung Fu Tellus Auto Service Co., Ltd.
(associated company of the Company) and Director of Shenzhen Auto Industry Imp-Exp Co., Ltd. (joint-venture of
the Company)
He ever took the Deputy General Manger of Shenzhen Xianke Real-estate Co., Ltd., Manager of Investment
Department of China Sports Group Industry Co., Ltd.; Director to the Office of General Manger of Shenzhen SDG
Feng Yu Co., Ltd; and Supervisor of the Company. Now, he acts as Deputy General Manager of the Company. Meanwhile, he
serves as director of Shenzhen Auto Industry and Trade Corporation (the controlling subsidiaries of the Company),
Shenzhen SD Huari Auto Enterprise Co., Ltd. (the controlling subsidiaries of the Company)
51
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Post-holding in shareholders unit
√Applicable □Not applicable
Whether receiving
Office term Office term remuneration from
Name Name of shareholders units Position
start from ended shareholders units
or not
Zhang Jianmin SHENZHEN SDG CO., LTD. Deputy GM Yes
Yu Lei SHENZHEN SDG CO., LTD. Deputy GM Yes
Director of
audit &
Zhang Xinliang SHENZHEN SDG CO., LTD. Yes
supervision
department
Director of
Fu Chunlong SHENZHEN SDG CO., LTD. H&R Yes
department
Post-holding in other unit
√Applicable □Not applicable
Whether receiving
Office term Office term
Name Name of other units Position remuneration from
start from ended
other units or not
Beijing Jimkai Sinocoms Appraisal Co.,
Liu Hongling Deputy GM Yes
Ltd
Senior
Wei Shaohui Guangdong Shu Jun Law Firm Yes
partner
Pang Yuan Real Estate Development Co.,
Ji Huibin Deputy GM Yes
Ltd.
III. Remuneration for directors, supervisors and senior executives
Decision-making procedures, determine basis and actual payment of remuneration for directors, supervisors and senior executives
The Company strictly in accordance with relevant regulations of “Management System of Human Resources of
Tellus Group” and “Remuneration Management Plan of Tellus Group (Practice)”, continues to perfect inspection
rules and seriously exercise performance evaluation, carry out remuneration based on evaluation results.
Remuneration for directors, supervisors and senior executives in reporting period
Total remuneration Total remuneration
Post-holding Remuneration actually
Name Title Sex Age obtained from the obtained from
status obtained at period-end
Company shareholders unit
Zhang Currently in
Chairman M 50 588,912.93 0.00 588,912.93
Ruili office
52
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Currently in
Luo Bojun Director, GM M 51 493,261.49 0.00 493,261.49
office
Chairman of
Guan Currently in
supervisory M 59 505,402.21 0.00 505,402.21
Zhicai office
committee
Currently in
Fu Bin Director, CFO M 51 453,662.93 0.00 453,662.93
office
Ren Currently in
Deputy GM M 50 453,662.93 0.00 453,662.93
Yongjian office
Guo Currently in
Deputy GM M 48 453,662.93 0.00 453,662.93
Dongri office
Currently in
Feng Yu Deputy GM M 46 453,662.93 0.00 453,662.93
office
Wang Currently in
Supervisor M 55 236,777.76 0.00 236,777.76
Guangye office
Ke Currently in
Supervisor F 45 230,238.92 0.00 230,238.92
Wensheng office
Liu Independent Currently in
F 59 50,000.00 0.00 50,000.00
Hongling Director office
Independent Currently in
Ji Huibin M 43 4,166.67 0.00 4,166.67
Director office
Wei Independent Currently in
M 41 29,166.69 0.00 29,166.69
Shaohui Director office
Lv Hang Director, GM M 52 Office leaving 272,396.24 0.00 272,396.24
Jiang Independent
M 52 Office leaving 45,833.37 0.00 45,833.37
Hongjun Director
Independent
Ji Dejun M 69 Office leaving 20,833.35 0.00 20,833.35
Director
Total -- -- -- -- 4,291,641.35 0.00 4,291,641.35
Delegated equity incentive for directors, supervisors and senior executives in reporting period
□ Applicable √ Not applicable
IV. Post-leaving and dismissals for directors, supervisors and senior executives
Name Title Type Date Reasons
Shi Changyue Director Office leaving 2012-06-06 General election
Zhang Junlin Director Office leaving 2013-03-11 Work
Lv Hang Director, GM Office leaving 2012-02-23 Work
53
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Independent
Ji Dejun Office leaving 2012-06-06 General election
director
Independent
Jiang Hongjun Office leaving 2012-11-14 Work
director
V. Changes of core technology team or key technicians in reporting period (not including
directors, supervisors and senior executives)
Nil
VI. Employees of the Company
Employee in-post 578
Retired employees expenses borne by the 322
Company
Professional composition
Administration staff 137
Technician 30
Sales personnel 15
Financial staff 49
Production personnel 136
Educational background
Master 14
Bachelor degree 64
Junior college 128
Technical secondary school 87
Other 285
54
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Remuneration policy: The Company strictly in accordance with relevant regulations of “Management System of
Human Resources of Tellus Group” and “Remuneration Management Plan of Tellus Group (Practice)” ,
formulated inspection rules and seriously exercise performance evaluation, carry out remuneration based on
evaluation results.
Training planning: the Company always attaches importance to the training and development work for employees;
create innovation into part of the long-term development strategy of the Company. Combine with current situation
of the Company, and take annual planning, position requirement and responsibility as well as enterprises
development needs into consideration, the Company formulated a systematic training plans and talent cultivation
projects; strengthen training works in aspect of multi-tiered, multi-channel, multi-field and multi-form, including
induction training for new employees, business training for on-job employees, operation skill training for workers
at the production line, upgrade training for manager, project development and risk control training, continues to
improve general quality for employees in order to achieve a win-win situation for the Company and employees.
55
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Section VIII. Corporate Governance
I. Brief introduction about 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. Its corporate governance conformed to the
requirements of certain regulation documents issued by the CSRC concerning corporate governance of listed
company.
According to the requirements of the Circular concerning Implementation of the Notice on Further
Implementation of Cash Dividend Issues of Listed Company (SZJGSZ(2012)No.43) issued by the securities
regulatory bureau of Shenzhen, for the purpose of further improvement of profit distribution policy especially the
cash dividend policy and stable return to shareholders as expected, the Company amended and improved its
Articles of Association, and formulated the Shareholders Return Plan for the Future 3 Years (2012-2014).
Besides, the Company prepared the Investment Management Rules, Decision Making System for Related
Transaction, External Guarantee Management System, Subsidiary Management Method, Financing Management
Internal Control System, Fraud Prevention Inspection and Reporting System as well as Working Rules of the
Strategic Committee according to the requirements for internal control works based on its actual conditions, thus
to improve the internal decision-making and operation mechanism and standardize legal person governance
structure.
Whether there are differences between the corporate governance and the "Company Law" and the relevant provisions of China
Securities Regulatory Commission
□ Yes √ No
There were no significant differences in corporate governance and the "Company Law" and the relevant provisions of China
Securities Regulatory Commission.
The development of special activities for corporate governance, and establishment and implementation of registration and
management system for inside information insider
(I)Implementation of special activity in respect of corporate governance
1. Actively participated in “insider transaction warning education exhibition”. Pursuant to the requirements of
“insider transaction warning education exhibition” conducted by the securities regulatory bureau of Shenzhen, the
bureau carried out “insider transaction warning education exhibition” from 22 October to 26 October. The
directors, supervisors, senior management, the secretary to the board, personnel in departments of finance, legal
affairs and risk management of the Company took active participation in this activity to receive relevant education
and make communications.
56
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
2. Investor protection propaganda. Pursuant to the Circular on Investor Protection Propaganda Activity of Listed
Company (SZJGSZ(2012)No.60) issued by the securities regulatory bureau of Shenzhen, the Company carried out
investor protection propaganda and investor communication by certain means, to protect legal interests of
investors. The Company improved the detailed contents set out in the investor column and prepared propaganda
posters with the theme of “honest operation and rational investment” and “develop the concept of value
investment and build atmosphere for rational investment”. The posters were set out in the obvious position of its
bulletin board, thus to advertise the concept of value investment and guide investors to make rational judgment as
to the Companys value, and finally to make scientific investment decision.
3. Increase communications with investors and continue to enhance such communication. In detail, the Company
ensures normal operation of external consultant phone, and makes prompt response to the questions raised by
investors through phone and interactive channels.
4. According to the requirements of the Circular concerning Implementation of the Notice on Further
Implementation of Cash Dividend Issues of Listed Company issued by the CSRC, the Company amended certain
clauses of its Articles of Association concerning profit distribution policy based on its actual conditions, and
formulated the Shareholders Return Plan for the Future 3 Years (2012-2014) (hereinafter referred to as return
plan). The aforesaid amendments and return plan have been respectively considered and approved in the 2nd
extraordinary meeting of the 7th board and the 1st extraordinary general meeting of 2012, and the relevant
decision-making procedures were transparent and conformed to relevant regulations. The Company executed its
profit distribution policy in strict accordance to the Articles of Association. Formulation and execution of cash
dividend policy were in compliance with the Articles of Association and resolution of general meeting. The
dividend standard and proportion were clear, and the relevant decision-making procedure and mechanism were
complete. Independent directors had definite obligations and minority shareholders had opportunity to express
their opinions and demands, which promised protection of their legal interests. The Amendments to the Articles of
Association and the Shareholders Return Plan for the Future 3 Years (2012-2014) were set out in the website
www.cninfo.com.cn dated 31 July 2012.
(II) Determination and implementation of insider registration management system
The Company has been paying great attention to standardization of insider information management. In order to
standardize its insider information management, strengthen insider information confidentiality and disclose
information on a fair basis, according to relevant regulations, the Company considered and approved the
Information Disclosure Working System at the 5th extraordinary meeting of the 5th board on 20 July 2007. the
Insider Information Registration System was considered and approved at the 2nd meeting of the 6th board on 27
October 2009, pursuant to which, the Company expressly determined the principal organ in charge of information
disclosure, the internal reporting system, scope of insider information, insider information management rules,
filing registration methods and confidential obligations. The Company executed related policies in strict manner,
took effective measures before disclosing material sensitive information, minimized the scope of insider, and
made propaganda in respect of insider confidential obligations, thus to prevent escape of insider information and
insider transaction.
In 2012, the Company found that no insider took use of insider information to trade its stock out of line, and no
57
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
insider had received supervisory measures and administrative punishment from the regulatory authorities due to
involvement in insider transaction.
II. Annual shareholders’ general meeting and extraordinary shareholders’ general meeting
held in reporting period
1. Annual Shareholders’ General Meeting in the report period
Session of Date of
Date Name of meeting motion Situation Index of disclosure
meeting disclosure
Deliberated the follow proposals: 1)
“Work Report of the Board for year of
2011”; 2) “Work Report of Supervisory
Committee for year of 2011”; 3)
“Financial Result Report of 2011”; 4)
“Financial Budget for year of 2012”; 5) All proposals have
“Resolution Notice of Annual
“Audit Report of 2011” (Chinese and been passed with
Annual Shareholders General Meeting
English Version); 6) “Annual Report 100% in total
Shareholders of 2011” (No.: 2012-012)
of 2011” (Chinese and English Version); voting rights of
General 2012-06-06 2012-06-07 published on Securities Times,
7) “Profit Distribution Plan of 2011”; 8) attendant
Meeting of Hong Kong Commercial Daily
“Engagement of Audit Institution for shareholders in
2011 and Juchao Website
year of 2012”; 9) “Engagement of Audit favor, 0 in against
(www.cninfo.com.cn)
Institution for Internal Control of 2012”; and 0 abstention
10) Decision-making Mechanism of
Related Transactions”; 11) “Election of
Directors for 7th Session of the Board”;
12) “Election of Supervisor for 7th
Session of Supervisory Committee”
2. Extraordinary shareholders’ general meeting in the report period
Name of meeting
Session of meeting Date Situation Date of disclosure Index of disclosure
motion
“Resolution Notice
of First
1) Proposal of Extraordinary
amendment of All proposals have Shareholders
Article of been passed with General Meeting of
First Extraordinary
Association; 2) 100% in total voting 2012” (No.:
Shareholders
2012-08-15 Proposal of rights of attendant 2012-08-16 2012-024) published
General Meeting of
Formulation of shareholders in on Securities Times,
2012
Shareholder Return favor, 0 in against Hong Kong
Plan in Next Three and 0 abstention Commercial Daily
Years (2012-2014) and Juchao Website
(www.cninfo.com.cn
)
58
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
“Resolution Notice
1) Proposal of
of Second
increase independent
Extraordinary
directors for 7th
All proposals have Shareholders
session of the Board;
Second been passed with General Meeting of
2) Proposal of
Extraordinary 100% in total voting 2012” (No.:
Changes of Audit
Shareholders 2012-11-14 rights of attendant 2012-11-15 2012-032) published
Institution of
General Meeting of shareholders in on Securities Times,
Financial of 2012; 3)
2012 favor, 0 in against Hong Kong
proposal of changes
and 0 abstention Commercial Daily
of audit institution
and Juchao Website
for internal control
(www.cninfo.com.cn
of 2012
)
III. Responsibility performance of independent directors in report period
1. The attendance of Board meetings and shareholders’ general meeting for independent directors
Attendance of Board meetings for independent directors
Times of Board
Whether absent
meeting Times of Times of
Name of independent Times of present Times of the Meeting for
supposed to attending by entrusted
director in person Absence the second time
attend in the communication presence
in a row or not
report period
Liu Hongling 16 4 11 1 0 No
Wei Shaohui 10 3 7 0 0 No
Ji Huibin 3 0 3 0 0 No
Ji Dejun 6 2 4 0 0 No
Jiang Hongjun 13 5 8 0 0 No
Times presented in shareholders
general meeting by independent 3
directors
Explanation of absent the Board Meeting for the second time in a row
2. Objection for relevant events from independent directors
Whether independent directors come up with objection about companys relevant matters or not
□ Yes √ No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
Whether the opinions from independent directors have been adopted or not
√Yes □ No
Explanation on advice that accepted/not accepted from independent directors
59
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
In accordance with relevant laws and regulation of “Company Law”, “Securities Laws”, “Listing Rules for
Stocks” and “System of Independent Directors”, independent directors focus on the normative of Companys
operation, performed responsibility independently and carry out their duties diligently; issued independent and
fair-ness independent opinions on the audit institution, appointed in reporting period for financial report and
internal control of the Company, related transactions, capital contact with related parties and external guarantee,
profit distribution, amendment of article of association, director, independent director and senior executives
changes as well as other events needs independent opinions issued, which perfected supervision mechanism for
the Company and play a corresponding role in protecting legal interest of the Company and whole shareholders.
IV. Responsibility performance of subordinate special committee of the Board in report
period
The Company set three special committees under the board of directors, namely the strategic committee, the audit
committee as well as the remuneration and examination committee.
1. Duty performance of the strategic committee
The strategic committee of the board is specially set according to general meeting resolution and the Articles of
Association, responsible for study on the long term development strategy and material investment decisions and
raising its recommendations. The committee comprised of 5 directors, one of which is independent director, and
the committee is chaired by chairman of the board. During the reporting period, the committee performed its
duties according to the Working Rules of the Strategic Committee, with each of its members doing their best to
perform the respective duties. The Committee takes part in the discussion on the operation development planning
and related investment projects. Individual opinions and recommendations are encouraged. It emphasizes on legal
person governance and standardized operation. By raising measures to prevent operation risks, the committee
plays an important role in increasing the core competitiveness, strengthening scientific decisions and enhancing
efficiency of material investment decision as well as the quality of decisions.
2. Duty performance of the audit committee
During the reporting period, the committee performed its duties according to the Articles of Association and
Working Procedures of the Audit Committee. The committee pays close attention to the operation, finance and
implementation of standard internal control. It strengthens communications with the relevant responsible
departments within the Company, and reviews the effective appraisal on the internal control and corporate risk
management by means of telecommunication, investigation and reporting. It reviews that whether the operation,
finance and accounting policy of the Company follows relevant laws and rules, and provides management and
audit opinions.
During the annual audit, the audit committee took active attitude in relevant works. Prior to the official
involvement of RSM China Certified Public Accountant (hereinafter referred to as RSM) in the annual audit, the
committee determined the working arrangement for 2012 annual audit after negotiation with RSM on 5 November
2012, which has been submitted to the independent directors of the Company. On 6 January 2013, the audit
committee held meeting to review the financial statements prepared by the Company, and believed that the
preparation of such statements was in compliance with provisions of enterprise accounting principles, reflecting
the financial position as of the end of 2012 and operating results of 2012 on a truthful basis. Thus, the committee
agreed to submit the financial statements and related information to CAICPA for audit.
60
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
After the official audit by RSM, members of the audit committee made calls to enquire the audit progress, and
urged the accounting firm to complete audit as scheduled according to the working arrangement, so as to ensure
prompt disclosure of its annual report. Meanwhile, the committee conducted communications with the
accountants in respect of the issues found in audit works.
After the issuance of initial audit opinions by the accountants, the audit committee held meeting on 18 March
2013 to re-review the financial statements, and formed written opinions and resolutions in respect of the annual
financial statements, audit work summary report and reengagement of CPA, which were submitted to the board for
consideration.
3. Duty performance of the remuneration and examination committee
During the reporting period, the remuneration and examination committee reviewed the remuneration of directors,
supervisors and senior management of the Company. The entire members of the committee believed that the
remuneration payment in the reporting period complied with the Companys performance examination system.
The remuneration of directors, supervisors and senior management were determined according to the relevant
systems of the Company.
V. Works from Supervisory Committee
Whether the Company has risks or not in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objections for the supervise matters in reporting period
VI. Independency of the Company relative to controlling shareholders’ in aspect of businesses,
personnel, assets, institution and finance
The Company has been independent from the controlling shareholders in terms of business, personnel, asset,
institution and finance. The Company has independent and complete business and is able to operate
independently.
(I) Business: the Company belongs to independent legal person entity. Being completely independent from
controlling shareholders, it has independent and complete business system and is able to operate independently.
The Company has independent production, sales and service systems and its major business. There is no
inter-competition between the Company and its controlling shareholders and related parties.
(II) Personnel: the Company establishes complete labor, human resources and salary management systems. All the
senior management of the Company receives remuneration from the Company since they are employed by the
Company, and no one takes position in the enterprises owned by shareholders.
(III) Assets: the Company is completely independent from the controlling shareholder in terms of assets; each of
them is able to operate independently. The Company has complete and separate purchase system, production
system, sales system and relevant service system. Intangible assets including industry property, trademark and
non-proprietary technology are owned by the Company on separate basis.
(IV) Finance: the Company has independent financial accounting department which set independent accounting
calculation system and finance management system. No controlling shareholder intervenes in the capital
61
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
application of the Company. The Company opens separate bank accounts. No capital is saved in the financial
company or settlement center account controlled by substantial shareholder or other related parties. The Company
pays taxes by law independently.
(V)Institution: the board, the supervisory committee and other internal institutions of the Company operate
independently. All the institutions of the Company are set according to the standards requirements applicable to
listed company and actual business natures of the Company. It has independent office location.
VII. Horizontal competition
Nil
VIII. Appraisal and incentive mechanism for senior executives
Board of the Company evaluated senior executives based on relevant regulations at end of this reporting period.
62
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Section IX. Internal control
I. Construction of internal control
According to the requirements of laws and regulations and regulatory documents including Basic Standards of
Enterprise Internal Control, Application Guidance for Enterprise Internal Control, Appraisal Guidance for
Enterprise Internal Control, Guidance on Standard Operation of Listed Company on the Main board of Shenzhen
Stock Exchange, the Company has been constructing healthy internal control system, implementing the relevant
requirements, strengthening supervision and inspection on execution of internal control, continuing to improve
governance level, advancing corporate standard operation and effectively preventing operation decision and
management risks, to ensure stable operation of the Company.
During the reporting period, the Company made constant improvement and optimization as to its internal control
system based on specific risks pursuant to Basic Standards of Enterprise Internal Control and Guidance on
Internal Control of Listed Company issued by relevant national authorities, so as to adapt to variable external
environment and internal management. Implementation of internal control works was organized by the board
directly. In particular, it formed the working mechanism for internal control works which was responsible by the
chairman of the board and involved by relevant departments. The Company established appraisal team for internal
control. The board of the Company authorized its audit department to take charge of the detailed implementation
of internal control appraisal and to make appraisal on the high-risk areas and units within the appraisal scope.
Appraisal scope as to internal control covers the major business and issues of the Company and its underlying
entity, especially the following areas with high risks: investment management risk, market environment risk,
merger & acquisition risk, policy risk, investment decision risk, property management risk, lawsuits risk, contract
management risk, capital management risk, etc.
Business and issues taken into account in appraisal scope includes: capital management, purchase management,
property lease management, auto sales management, auto maintenance management, fixed assets management,
equity investment management, financing management, overall budget, cost expense management, contract
management, financial report, human resources, related transaction, etc. the internal control of the above business
and issues covers major aspects of the operation management of the Company, without material omission.
Internal control appraisal works were conducted in strict accordance with the basic standards, appraisal guidance
and procedures as provided by its internal control appraisal method, with major procedures implemented by the
internal control appraisal team. Specifically, it first made the Self-appraisal Implementation Scheme for Internal
Control which determined the appraisal scope and technical standard, and delivered the relevant test notice. Later,
it formed internal control appraisal project team. Prior to implementation by such project team, it held training
meeting oriented for personnel participating in the test. After that, it carried out site works and completed
appraisal draft. During the appraisal, the working team adopted various methods including individual interview,
investigation, subject discussion, operation test, site inspection, sample and comparison analysis, to collect the
evidence to prove whether the design and operation of internal control was effective. Besides, it completed the
appraisal draft based on actual condition, and identified defect in internal control.
According to the requirement for recognition of material defect, important defect and normal defect provided in
63
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
the Basic Standards and Appraisal Guidance, the Company, taking into account factors such as company scale,
industrial nature, risk preference and risk exposure, determined the specific recognition standard for internal
control defect applicable to the Company.
According to the above recognition standard, normal supervision and special supervision, there was no material
defect in the internal control of the Company during the appraisal. The Company engaged RSM to conduct
independent audit on its internal control.
II. Statement of the Board on responsibility for internal control
The board of directors and all the members guarantee that there is no false statement, misleading representation or
material omission in the content of this report, and take several and joint responsibility as to the truthfulness,
accuracy and completeness of the content.
To establish healthy internal control and effectively implement the same is the responsibility of the board. The
supervisory committee supervises the establishment and implementation of internal control by the board;
managers are in charge of normal operation of internal control.
Target of internal control: ensure legal operation on a reasonable basis, asset safety, truthful and complete of
financial report and related information, enhancement of operational efficiency and effects as well as realization of
development strategy. Since internal control has the inherent limit, guarantee for realization of such target is only
provided on a reasonable basis.
III. Bases for establishment of financial report internal control
The bases for establishment of financial report internal control are the Basic Standard of Enterprise Internal
Control and its affiliated guidance. During the reporting period, RSM issued the audit report with unqualified
opinion.
During the reporting period, the Company found no material defect in the financial report internal control.
IV. Self-evaluation report of internal control
Details of major defects in self-evaluation report that found in reporting period
No major defects been found in internal control in reporting period
Date of self-evaluation report of
2013-04-10
internal control (full-text) disclosed
Index of self-evaluation report of Juchao website http://www.cninfo.com.cn, the appointed website for information disclosure by
internal control (full-text) disclosed Shenzhen Stock Exchange
V. Auditing report of internal control
√ Applicable □ Not applicable
Auditing comments section in audit report of internal control
64
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
We consider that, according to relevant regulations and “Basic Rules of Internal Control for Enterprise”, Shenzhen Tellus Holding
Co., Ltd. maintained an efficiency internal control of financial report dated 31 December 2012, in all material aspects.
Date of audit report of internal
2013-04-10
control (full-text) disclosed
Index of audit report of internal Juchao website http://www.cninfo.com.cn, the appointed website for information disclosure by
control (full-text) disclosed Shenzhen Stock Exchange
Whether CPA carries out qualified opinion for audit report of internal control or not
□Yes √No
Whether the opinions are consistent in audit report of internal control carrying out by CPA and the self-evaluation report of the Board
√Yes □ No
VI. Establishment and enforcement of Accountability Mechanism for Major Errors in Annual
Report
The “Accountability Mechanism for Major Errors in Annual Report Disclosure under the Name of Shenzhen
Tellus Holding Co., Ltd.” was deliberated and approved by 3rd Meeting of 6th Session of the Board, with purpose
of standard operation quality, enhancing the accuracy, true-ness, complete-ness and timely of the information
disclosed; strengthening on accountability for person who in charge of the annual information disclosure,
improving the quality and transparency of annual information that disclosed.
During the reporting period, the Company strictly follow requirement of mechanism, has no major accounting
errors correction, major omission supplementation and correction on performance forecast been found.
65
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Section X. Financial Report
Auditors Report
RSM CCPA Shen Zi [2013] No.2439
To the shareholders of Shenzhen Tellus Holding Company Limited:
We have audited the accompanying financial statements of Shenzhen Tellus Holding Company Limited (“the Company”), which comprise the
consolidated and company balance sheet as at 31 December 2012, and the consolidated and company income statement, the consolidated and
company cash flow statement, the consolidated and company statements of changes in equity for the year then ended, and notes to these financial
statements
Management’s Responsibility for the Financial Statements
The Companys management is responsible for the preparation of financial statements that give a true and fair view. This responsibility includes:
(1) Preparing financial statements in accordance with the Accounting Standards for Business Enterprises. (2) Designing, implementing and
maintaining internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Chinas
Auditing Standards for the Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to
fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entitys preparation of the financial statements
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Companys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
Audit Opinions
In our opinion, the companys financial statements comply with the Accounting Standards for Business Enterprises and present fairly, in all
material respects, the financial position of the Company as at 31 December 2012, and the results of operations and cash flows of the Company for the
year then ended.
66
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
RSM China Certified Public Certified Public Accountant:
Accountants Co., Ltd. Shenzhen Branch Zhou Wuzhong,
Beijing, China C
Certified Public Accountant:
Qin Changming
9 April, 2013
67
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Consolidated Balance Sheet
As at 31 December 2012
Prepared by：Shenzhen Tellus Holding
Currency: RMB Yuan
Co.,Ltd.
Item Note Closing balance Opening balance
Current Assets：
Monetary funds Ⅶ、1 55,145,531.39
55,926,573.46
Financial assets held-for-trading
Note receivables
Account receivables Ⅶ、2
5,779,383.21 6,926,224.94
Prepayments Ⅶ、4
8,453,261.56 12,953,848.48
Premiums account receivable
Dividends receivable
Other receivables Ⅶ、3 12,294,045.05
11,043,423.52
Inventories Ⅶ、5 47,813,852.20
30,218,346.71
Non-current asset due within one year
Other current assets Ⅶ、6
7,495,557.97
Total current assets 136,981,631.38 117,068,417.11
Non-current Assets:
Financial assets held-for-trade Ⅶ、7
1,591,906.25 1,374,249.25
Held-to-maturity investments Ⅶ、8
100,000.00 121,300.00
Long-term receivables Ⅶ、9
2,341,645.69
Ⅶ、
Long-term equity investments 186,572,923.39 143,657,138.71
10
Ⅶ、
Investment properties 96,666,571.61 108,421,268.41
11
Ⅶ、
Fixed assets 156,061,636.80 164,608,682.41
12
Ⅶ、
Construction in progress 12,977,929.03
13 2,461,073.03
68
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Materials for construction
Disposal of fixed assets
Bio-assets in production
Oil and gas assets
Ⅶ、
Intangible assets
14 106,588.62 164,088.54
Development expenditure
Goodwill
Ⅶ、
Long-term deferred expenses
15 803,230.14 846,883.52
Ⅶ、
Deferred tax assets 26,709,762.78
16 29,628,521.48
Ⅶ、
Other non-current assets 26,339,112.00
17
Total non-current assets 507,929,660.62 453,624,851.04
Total Assets 644,911,292.00 570,693,268.15
Consolidated Balance Sheet（Continued）
As at 31 December 2012
Prepared by：Shenzhen Tellus Holding
Currency: RMB Yuan
Co.,Ltd.
Item Note Closing balance Opening balance
流动负债：
Ⅶ、
Short-term loans
20 93,881,155.00 42,792,388.00
Financial liabilities held-for-trade
Notes payable
Ⅶ、
Accounts payable
21 23,626,617.53 22,950,543.71
Ⅶ、
Advance from customers
22 31,857,080.49 2,070,889.22
Ⅶ、
Employee benefits payable
23 12,581,105.70 13,285,537.39
Ⅶ、
Taxes and due payable
24 11,845,434.44 7,627,833.60
Premiums payables
Ⅶ、
Dividends payable
25 1,455,297.72
Ⅶ、
Other payables
26 99,275,953.73 94,803,075.42
Ⅶ、
Non-current liabilities due within one year
28 12,000,000.00 88,020,000.00
69
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Other current liabilities
Total current liabilities
286,522,644.61 271,550,267.34
Non-current liabilities：
Ⅶ、
Long-term loans
29 143,000,000.00 4,680,000.00
Bonds payable
Ⅶ、
Long-term payables
30 12,981,872.24 3,920,160.36
Special payables
Ⅶ、
Accrued liabilities
27 87,568,728.57
Ⅶ、
Deferred tax liabilities
16 1,345,258.91 1,592,459.86
Other non-current liabilities
Total non-current liabilities
157,327,131.15 97,761,348.79
Total liabilities
443,849,775.76 369,311,616.13
Owners' equity：
Ⅶ、
Paid-in capital
31 220,281,600.00 220,281,600.00
Ⅶ、
Capital reserve
32 8,732,694.55 8,569,451.80
Less: treasury shares
Special reserve
Ⅶ、
Surplus reserve
33 2,952,586.32 2,952,586.32
General risk reserve
Ⅶ、
Undistributed profit
34 -47,291,479.26 -54,437,738.61
Foreign exchange translation difference
Total owners' equity attributable to
parent company 184,675,401.61 177,365,899.51
Minority interests
16,386,114.63 24,015,752.51
Total owners’equity
201,061,516.24 201,381,652.02
Total liabilities and owners’equity
644,911,292.00 570,693,268.15
Legal representative: Zhang Ruili Person in charge of accounting: Luo Bojun Person in charge of accounting organ: Fu Bin
70
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Balance Sheet
As at 31 December 2012
Prepared by：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
Item Note Closing balance Opening balance
Current Assets：
Monetary funds 1,614,187.49 64,442.86
Financial assets held-for-trade
Notes receivable
Accounts receivable XIII、1
Prepayments
Premiums receivable
Dividends receivable
Other receivables XIII、2 53,031,898.91 19,567,834.67
Inventories
Non-current asset due within one year
Other current assets
Total current assets 54,646,086.40 19,632,277.53
Non-current Assets:
Financial assets available-for-sale 1,591,906.25 1,374,249.25
Held-to-maturity investments
Long-term receivable 2,341,645.69
Long-term equity investments XIII、3 412,739,079.62 380,032,015.02
Investment properties 58,884,316.80 61,849,532.64
Fixed assets 18,963,289.36 19,484,310.81
Construction in progress 235,849.10 164,326.32
Materials for construction
Disposal of fixed assets
Bio-assets in production
Oil and gas assets
Intangible assets 124,921.83
77,421.87
Development expenditure
Goodwill
71
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Long-term deferred expenses 106,861.96 52,590.22
Deferred tax assets 14,064,022.84 14,094,084.22
Other non-current assets
Total non-current assets 506,662,747.80 479,517,676.00
Total Assets 561,308,834.20 499,149,953.53
Balance Sheet (Continued)
As at 31 December 2012
Prepared by：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
Item Note Closing balance Opening balance
Current liabilities：
Short-term loans 49,544,160.00 14,544,160.00
Financial liabilities held-for-trade
Notes payable
Accounts payable
Advance from customers
Employee benefits payable 3,400,003.58 3,056,874.78
Taxes and due payable 286,821.39 281,051.07
Interest payable
Dividends payable
Other payables 268,460,296.54 221,249,246.62
Non-current liabilities due within one year 6,000,000.00 41,480,000.00
Other current liabilities
Total current liabilities 327,691,281.51 280,611,332.47
Non-current liabilities：
Long-term loans 101,500,000.00 4,680,000.00
Bonds payable
Long-term payables
Special payables
Accrued liabilities 87,568,728.57
Deferred tax liabilities 353,363.01 298,948.76
Other non-current liabilities
Total non-current liabilities 101,853,363.01 92,547,677.33
Total liabilities 429,544,644.52 373,159,009.80
72
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Owners' equity：
Paid-in capital 220,281,600.00 220,281,600.00
Capital reserve 5,539,271.27 5,376,028.52
Less: treasury shares
Special reserve
Surplus reserves 2,952,586.32 2,952,586.32
General risk reserve
Undistributed profit -97,009,267.91 -102,619,271.11
Total owners' equity attributable to
131,764,189.68 125,990,943.73
parent company
Total liabilities and owners' equity 561,308,834.20 499,149,953.53
Legal representative: Zhang Ruili Person in charge of accounting: Luo Bojun Person in charge of accounting organ: Fu Bin
73
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Consolidated Income Statement
For the Year Ended 31 December 2012
Prepared by：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
Item Note Closing balance Opening balance
Ⅰ.Total operating income 419,642,661.31 403,282,098.80
Including: Operating income Ⅶ、35 419,642,661.31 403,282,098.80
Ⅱ.Total operating Costs 429,717,301.49 418,191,728.10
Including: Operating costs Ⅶ、35 336,419,631.43 335,264,237.62
Business tax and extra charges Ⅶ、36 5,922,740.31 4,965,765.95
Selling expenses Ⅶ、37 20,698,948.07 19,891,677.92
General and administrative expense Ⅶ、38 45,435,681.23 44,648,200.15
Financial expense Ⅶ、39 10,081,337.64 8,307,007.12
Impairment losses of assets Ⅶ、41 11,158,962.81 5,114,839.34
Add: Gains from changes in fair value ("-" means loss)
Investment income ("-" means loss) Ⅶ、40 4,907,776.00 8,080,990.33
Including: Investment income from associates and
4,256,541.71 10,053,234.53
joint venture
Ⅲ.Operating profit ("-" means loss) -5,166,864.18 -6,828,638.97
Add: Non-operating income Ⅶ、42 14,553,855.33 13,650,574.29
Less: Non-operating expenses Ⅶ、43 150,447.76 217,355.98
Including: Loss on disposal of non-current assets 121,282.97 31,131.29
Ⅳ.Total profit ("-" means loss) 9,236,543.39 6,604,579.34
Less: Income tax expenses Ⅶ、44 8,264,624.20 5,354,382.93
Ⅴ.Net profit ("-" means loss) 971,919.19 1,250,196.41
Net attributable to owners of parent company 7,146,259.35 2,157,675.12
Minority interests -6,174,340.16 -907,478.71
Ⅵ.Earnings per share
Basic Earnings per share Ⅶ、45 0.0324 0.0098
Diluted Earnings per share Ⅶ、45 0.0324 0.0098
Ⅶ.Other comprehensive income Ⅶ、46 163,242.75 -66,378.05
Ⅷ.Total comprehensive income 1,135,161.94 1,183,818.36
Total comprehensive income attributable to owners of parent company 7,309,502.10 2,091,297.07
Total comprehensive income attributable to minority interests -6,174,340.16 -907,478.71
Legal representative: Zhang Ruili Person in charge of accounting: Luo Bojun Person in charge of accounting organ: Fu Bin
74
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Income Statement
For the Year Ended 31 December 2012
Prepared by：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
Amount for the current
Item Note Amount for the prior period
period
Ⅰ.Total operating income XIII、4 14,936,256.61 13,353,977.17
Less:Operating cost XIII、4 4,205,086.89 4,085,746.61
Business tax and extra charges 836,430.39 747,822.71
Selling expenses
General and administrative
17,869,230.46 16,752,065.61
expense
Financial expense 4,102,486.94 3,166,247.88
Impairment losses of assets 2,214,726.96 929,897.61
Add: Gain from changes in fair value ("-"
means loss)
Investment income ("-" means loss) XIII、5 5,523,097.47 9,282,156.62
Including: Investment income from
2,689,622.59 8,810,834.39
associates and joint venture
II.Operating profit ("-" means loss) -8,768,607.56 -3,045,646.63
Add: Non-operating income 14,409,107.14 4,448,953.90
Less:Non-operating expenses 435.00
Including: Loss on disposal of
435.00
non-current assets
III.Total profit ("-" means loss) 5,640,064.58 1,403,307.27
Less: Income tax expenses 30,061.38 771,878.65
IV.Net profit ("-" means loss) 5,610,003.20 631,428.62
V.Other comprehensive income 163,242.75 -66,378.05
75
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
VI.Total comprehensive income 5,773,245.95 565,050.57
Legal representative: Zhang Ruili Person in charge of accounting: Luo Bojun Person in charge of accounting organ: Fu Bin
76
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Consolidated Statement of Cash Flows
For the Year Ended 31 December 2012
Prepared by：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
Amount for the Amount for the
Item Note
current period prior period
Ⅰ. Cash Flow from Operating Activities：
Cash received from sales of goods or rendering of services 490,650,957.82 471,409,532.23
Refund of taxes and levies
Cash received relating to other operating activities Ⅶ、47、（1） 8,344,217.55 9,915,541.11
Sub-total of Cash Inflows 498,995,175.37 481,325,073.34
Cash paid for goods and services 388,463,315.67 381,645,655.40
Cash paid to and on behalf of employees 56,067,397.03 56,611,287.67
Cash paid on taxes and levies 22,713,007.72 19,396,595.02
Cash paid relating to other operating activities Ⅶ、47、（2） 39,507,837.42 38,410,199.27
Sub-total of Cash Outflows 506,751,557.84 496,063,737.36
Net Cash Flows from Operating Activities -7,756,382.47 -14,738,664.02
Ⅱ. Cash Flows from Investing Activities:
Cash received from return of investments
Cash received investing income 4,255,528.29 5,721,322.23
Net cash received from disposal of fixed assets,
27,378,562.00 1,001,100.00
intangible assets and other long assets
Net cash flows from disposal subsidiary and other operating unite 9,254,131.82
Other cash received relating to investing activities Ⅶ、47、（3） 5,000,000.00
Sub-total of Cash Inflows 31,634,090.29 20,976,554.05
Cash paid to acquire fixed assets, intangible assets and other
30,822,848.76 2,322,621.53
long assets
Cash paid on investments 33,500,000.00
Net cash paid on obtain subsidiary and other operating unite
Cash paid on other investing activities
Sub-total of Cash Outflows 64,322,848.76 2,322,621.53
Net Cash Flows from Investing Activities -32,688,758.47 18,653,932.52
Ⅲ. Cash flow from Financing Activities
Cash received from investments 400,000.00
Including: Cash received from investments by minority interests of subsidiaries 400,000.00
Cash received from borrowing 378,400,000.00 26,800,000.00
Cash received from issuing bonds
Cash received from other financing activities
Sub-total of Cash Inflows 378,400,000.00 27,200,000.00
Cash repayments on borrowed amounts 322,611,233.00 32,640,000.00
Cash payments for distribution of dividends or profits 15,575,489.98 6,435,162.57
Including: Dividends or profit paid to minority interests of subsidiaries
Cash payments on other financing activities Ⅶ、47、（4） 547,350.00 221,100.00
Sub-total of cash Outflows 338,734,072.98 39,296,262.57
Net cash flows from financing activities 39,665,927.02 -12,096,262.57
Ⅳ. Effect of foreign exchange rate on cash -1,828.15 -15,412.31
Ⅴ. Net increase in cash and cash equivalents Ⅶ、48、（1） -781,042.07 -8,196,406.38
Add: cash equivalents at the beginning of the period 55,926,573.46 64,122,979.84
Ⅵ. Cash equivalents at the end of the period Ⅶ、48、（2） 55,145,531.39 55,926,573.46
Legal representative: Zhang Ruili Person in charge of accounting: Luo Bojun Person in charge of accounting organ: Fu Bin
77
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Cash Flow Statement
For the Year Ended 31 December 2012
Prepared by：Shenzhen Tellus Holding Co.,Ltd. Currency: RMB Yuan
Amount for the current
Item Note Amount for the prior period
period
Ⅰ. Cash Flow from Operating Activities：
Cash received from sales of goods or rendering of services 14,936,256.61 13,432,725.24
Refund of taxes and levies
Cash received relating to other operating activities 16,747,415.69 10,194,792.89
Sub-total of Cash Inflows 31,683,672.30 23,627,518.13
Cash paid for goods and services
Cash paid to and on behalf of employees 10,566,015.15 10,360,300.36
Cash paid on taxes and levies 3,013,316.53 2,855,742.88
Cash paid relating to other operating activities 14,029,304.76 8,938,768.67
Sub-total of Cash Outflows 27,608,636.44 22,154,811.91
Net Cash Flows from Operating Activities XIII、6 4,075,035.86 1,472,706.22
Ⅱ. Cash Flows from Investing Activities:
Cash received from return of investments
Cash received investing income 4,255,528.29 5,721,322.23
Net cash received from disposal of fixed assets,
120.00
intangible assets and other long assets
Other cash received relating to investing activities
Sub-total of Cash Inflows 4,255,648.29 5,721,322.23
Cash paid to acquire fixed assets, intangible assets and
673,083.78 81,060.64
other long assets
Cash paid on investments 33,500,000.00
Cash paid on other investing activities
Sub-total of cash outflows 34,173,083.78 81,060.64
Net Cash Flows from Investing Activities -29,917,435.49 5,640,261.59
Ⅲ. Cash flow from Financing Activities
Cash received from investments
Cash received from borrowing 268,000,000.00
Cash received from issuing bonds
Cash received from other financing activities
Sub-total of cash inflows 268,000,000.00
Cash repayments on borrowed amounts 229,260,000.00 4,480,000.00
Cash payments for distribution of dividends or profits 11,167,847.06 2,882,201.02
Cash payments on other financing activities 180,000.00
Sub-total of cash Outflows 240,607,847.06 7,362,201.02
Net cash flows from financing activities 27,392,152.94 -7,362,201.02
Ⅳ. Effect of foreign exchange rate on cash -8.68 -10,865.55
Ⅴ. Net increase in cash and cash equivalents XIII、6 1,549,744.63 -260,098.76
Add: cash equivalents at the beginning of the period 64,442.86 324,541.62
Ⅵ. Cash equivalents at the end of the period 1,614,187.49 64,442.86
Legal representative: Zhang Ruili Person in charge of accounting: Luo Bojun Person in charge of accounting organ: Fu Bin
78
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
CONSOLIDATED STATEMENT OF CHANGE IN OWNER'S EQUITY
For the Year Ended 31 December 2012
Prepared by：Shenzhen Tellus Holding Co.,Ltd.
Amount for the current year Amount for the prior year
Attribute to the equity of parent company Attribute to the equity of parent company
Item
Less: Minority interests Total owners' equity Less: Minority in
Paid-in capital (or Special General Paid-in capital (or Special General
Capital reserve Treasury Surplus reserve Undistributed profit Others Capital reserve Treasury Surplus reserve Undistributed profit Others
Share capital) reserve reserve Share capital) reserve reserve
shares shares
1.Balance at the End of Last Period 220,281,600.00 8,569,451.80 2,952,586.32 -54,437,738.61 24,015,752.51 201,381,652.02 220,281,600.00 8,635,829.85 2,952,586.32 -56,595,413.73 24,523
Add: Changes of accounting policies
Prior year adjustments
Others
2. Balance at the Beginning of the Year 220,281,600.00 8,569,451.80 2,952,586.32 -54,437,738.61 24,015,752.51 201,381,652.02 220,281,600.00 8,635,829.85 2,952,586.32 -56,595,413.73 24,523
3. Increase/Decrease movements in this
163,242.75 7,146,259.35 -7,629,637.88 -320,135.78 -66,378.05 2,157,675.12 -507
Year ("-" means loss)
(I) Net Profit 7,146,259.35 -6,174,340.16 971,919.19 2,157,675.12 -907
(II) Gain/Loss to Owners' Equity Directly 163,242.75 163,242.75 -66,378.05
Subtotal of (I)and (II) 163,242.75 7,146,259.35 -6,174,340.16 1,135,161.94 -66,378.05 2,157,675.12 -907
(III) Capital Injected and Reduced by Owners 400
a. Capital injected by owners 400
b. Payment for shares included in owners' equity
c. Others
(IV) Profit Distribution -1,455,297.72 -1,455,297.72
a. Withdrawal surplus reserve
b. Provisions withdrawn for general risk
c. Distribution to owners (or shareholders) -1,455,297.72 -1,455,297.72
d. Others
(V) Internal transfers of owners' equity
a. Capitalisation of Additional paid-in capital;
(or share capital)
b. Capitalization of surplus reserve (or share
capital)
c. Making up losses of surplus reserve
d. Others
(VI) Special Reserve
a. Withdrawal of special reserve
b. Use of special reserve
(VII) Others
4. Balance at the end of the period 220,281,600.00 8,732,694.55 2,952,586.32 -47,291,479.26 16,386,114.63 201,061,516.24 220,281,600.00 8,569,451.80 2,952,586.32 -54,437,738.61 24,015
79
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
STATEMENT OF CHANGE IN OWNER'S EQUITY
For the Year Ended 31 December 2012
Prepared by：Shenzhen Tellus Holding Co.,Ltd.
Amount for the current year Amount for the prior year
Item Paid-in Less: Less:
Capital Special Surplus General Undistributed Total owners' Paid-in capital (or Special
capital (or Treasury Capital reserve Treasury Surplus reserve Undistribute Total owners' equity
reserve reserve reserve reserve profit equity Share capital) reserve
Share capital) shares shares d profit
1.Balance at the End of Last Period 220,281,600.00 5,376,028.52 2,952,586.32 -102,619,271.11 125,990,943.73 220,281,600.00 5,442,406.57 2,952,586.32 -103,250,699.7
Add: Changes of accounting policies
Prior year adjustments
Others
2. Balance at the Beginning of the Year 220,281,600.00 5,376,028.52 2,952,586.32 -102,619,271.11 125,990,943.73 220,281,600.00 5,442,406.57 2,952,586.32 -103,250,699.7
3. Increase/Decrease movements in this
163,242.75 5,610,003.20 5,773,245.95 -66,378.05 631,428.6
Year ("-" means loss)
(I) Net Profit 5,610,003.20 5,610,003.20 631,428.6
(II) Other comprehensive income 163,242.75 163,242.75 -66,378.05
Subtotal of (I)and (II) 163,242.75 5,610,003.20 5,773,245.95 -66,378.05 631,428.6
(III) Capital Injected and Reduced by
Owners
a. Capital injected by owners
b. Payment for shares included in owners'
equity
c. Others
(IV) Profit distribution
a. Withdrawal surplus reserve
b. Provisions withdrawn for general risk
c. Distribution to owners (or shareholders)
d. Others
(V) Internal transfers of owners' equity
a. Capitalisation of Additional paid-in capital;
(or share capital)
b. Capitalisation of surplus reserve (or share
capital)
c. Making up losses of surplus reserve
d. Others
(VI) Special Reserve
a. Withdrawal of current period
b. Use of special reserve
(VII) Others
4. Balance at the end of the period 220,281,600.00 5,539,271.27 2,952,586.32 -97,009,267.91 131,764,189.68 220,281,600.00 5,376,028.52 2,952,586.32 -102,619,271.1
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
SHENZHEN TELLUS HOLDING CO., LTD.
Notes to Financial Statements
（For the Year Ended 31 December, 2012 Expressed in RMB Yuan）
Ⅰ、 Corporation profile
1.1 Company’s history
Shenzhen Tellus Holding Company Limited (―the Company‖) was developed from the Shenzhen Tellus
Machinery Co.,Ltd., which established on 11 October, 1986. On 2nd January, 1992, with the approval of
Shenzhen Municipal People‘s Government ―shen fu ban fu (1992), No. 1850‖, Shenzhen Tellus
Machinery Co.,Ltd. reorganized to a public limited company and renamed to Shenzhen Tellus
Machinery Holding Company Limited. On 15 March 1993, with the approval of Bank of China Shenzhen
branch ―Shen Ren Yin Fu Zi (1993) No.92‖, the Company issued registered shares A 259.8 million
shares, B 200 million shares with par value per share of 1 yuan. On 30 June 1994, the Company
changed name to Shenzhen Tellus Holding Company Limited with the approval of Shenzhen
administrative bureau for industry and commerce .Number of business license for enterprise legal
person： 440301103017750. The headquarters of Shenzhen Tellus Holding Company Limited located
at Tellus Building level 3, Shuibei second Road, Luohu, Shenzhen City, Guangdong Province.
The company and its subsidiaries provided automobile overall services, including automobile retailing,
inspection and maintenance, production of inspection equipment, property lease and property
management service, etc. The group belongs to wholesale industry of resource, materials, and
electronic equipment.
The capital structure of the Company at listing date：
Category Amount (share) Ratio（%）
1. Non-tradable shares
Include: State shares 120,900,000 72.45
Sub-total of non-tradable shares 120,900,000 72.45
2. Tradable shares
-A 25,980,000 15.57
-B 20,000,000 11.98
Sub-total tradable shares 45,980,000 27.55
Total 166,880,000 100.00
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
Change of capital structure after established:
（1）Issue bonus shares in 1993
According to the decision made by general meeting of shareholders in 1993, the company distributed
a 2 for 10 bonus shares with cash dividend of RMB 0.5 , the capital increased from 1,668.8 million
shares to 2,002.56 million shares.
On 22 April 1994，the Shenzhen Stock Management Office agreed about plan of distributing bonus .
After plan, the company‘s capital structure changed as follows:
Category Amount（share） Ratio（%）
State - owned shares 145,080,000 72.45
Public shares 31,176,000 15.57
RMB special stock（B shares） 24,000,000 11.98
Total 200,256,000 100.00
（2）Issue bonus shares and increase capital in 1994
On 28 May 1995, the Group shareholder meeting agreed about plan of distributing bonus and
increasing capital. On the basis of 2,002.56 million shares in the end of 1994, the Group distributed 0.5
of 10 shares, and give RMB 0.5 from every increasing 0.5 share capital. After the Group‘s share capital
increased to 2,202.816 million shares.
After plan, the company‘s capital structure changed as follows:
Category Amount（share） Ratio（%）
State - owned shares 159,588,000 66.22
Public shares 34,293,600 21.80
RMB special stock（B shares） 26,400,000 11.98
Total 220,281,600 100.00
（3）Majority shareholder change in 1997
On 31st March 1997, with the approval of Shenzhen Municipal People‘s Government ―shen fu han
(1997), No. 19‖ and China Securities Regulatory Commission ―zheng jian han shang (1997), No. 5‖,
Shenzhen Investment Administrative Company transferred its 159,588,000 shares to Shenzhen Te Fa
(Group) Company Limited (hereinafter referred to as ―the Te Fa Group‖). The shares transferred
represent 72.45% of the total issued shares of the Company.
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
（4）The reform of listing non-tradable shares in 2006
In December 2005, shenzhen, the State-owned Assets Supervision and Administration Commission
agreed about the plan of reforming non-tradable shares.
On 4th January 2006, the Te Fa Group gave 13,717,440 shares to the holders of tradable shares of the
company in the A share market. After the split-share reform was completed, The Te Fa Group holds
66.22% of the shares capital of the Company.
After the split-share reform, the company‘s capital structure changed as follows:
Category Amount（share） Ratio（%）
State - owned shares 145,870,560 66.22
Public shares 48,011,040 21.79
RMB special stock（B shares） 26,400,000 11.99
Total 220,281,600 100.00
Till the end of 2012, the Company had issued 2,202.816 million shares, details in Note 7.29.
The Company‘s business scope includes induatrial projects, operating real estate under gaining
land-use right, mainland commerce, goods and materials business , (Government monopolistic goods
and materials are not included.),leasing and managing own property, import and export business of
internal production materials and accessories.Import and export business comply with the approval
certificate (Shen Mao Guan Zheng Zi No.098).
The Group‘s mother company is Shenzhen Te Fa (Group) Company Limited, and its ultimate controller
is shenzhen the State-owned Assets Supervision and Administration Commission.
The financial statements of the Company are authorized to be issued to the public on 9 rd April, 2013 by
the Board of Directors.
Ⅱ、 Basis of Preparation
The financial statements of the Company have been prepared on the basis of going concern in
conformity with Chinese Accounting Standards for Business Enterprises and the Accounting Systems
for Business Enterprises issued by the Ministry of Finance of People‘s Republic of China in February
2006, and Accounting Standards (order No.38 of the Ministry of Finance) and Compilation Rules for
Information Disclosure by Companies Offering Securities to the Public No.15—General Provisions on
Financial Reports (2010 Revision) issued by the China Securities Regulatory Commission (CSRC).
According to the relevant accounting regulations in Chinese Accounting Standards for Business
Enterprises, the Group has adopted the accrual basis of accounting. Except for certain financial
instruments which are measured by at fair value, the Group adopts the historical cost as the principle of
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
measurement in the financial statements. Where assets are impaired, provisions for asset impairment
are made in accordance with relevant requirements.
Ⅲ、 Statement of Compliance with Enterprise Accounting Standards
The financial statements of the Group comply are recognized and measured in accordance with the
regulations in the Chinese Accounting Standards for Business Enterprises and they give a true and fair
view of the financial position, business result and cash flow of the Group as of 31 December 2012. In
addition, the financial statements of the Company and the Group comply, in all material respects, with
the revised disclosing requirements for financial statements and the notes Compilation Rules for
Information Disclosure by Companies Offering Securities to the Public No.15—General Provisions on
Financial Reports (2010 Revision)‘ issued by China Securities Regulatory Commission (CSRC) in 2010.
Ⅳ、 Important Accounting Principles and Accounting Estimates
1、 Accounting period
The accounting period of the Group is classified as annual period and interim period. Interim period
refers to the reporting period shorter than a complete annual period. The accounting period of the
Group is the calendar year from January 1 to December 31.
2、 Monetary Unit
Renminbi (RMB) is the currency of the primary economic environment in which the Group and its
domestic subsidiaries operate. Therefore, the Group and its domestic subsidiaries choose RMB as their
functional currency. The Group adopts RMB to prepare its functional statements.
3、Basis of accounting
A business combination is a transaction or event that brings together two or more separate entities into
one reporting entity. Business combinations are classified into business combinations involving
enterprises under common control and business combinations not involving enterprises under common
control.
（1）Business combination involving entities under common control
A business combination involving enterprises under common control is a business combination in which
all of the combining enterprises are ultimately controlled by the same party or parties both before and
after the combination, and that control is not transitory. For a business combination involving
enterprises under common control, the party that, on the combination date, obtains control of another
enterprise participating in the combination is the absorbing party, while that other enterprise
participating in the combination is a party being absorbed. Combination date is the date on which the
absorbing party effectively obtains control of the party being absorbed.
The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
being combined at the combination date. The difference between the carrying amount of the net assets
obtained and the carrying amount of consideration paid for the combination (or the total face value of
shares issued) is adjusted to the capital premium (or share premium) in the capital reserve. If the
balance of the capital premium (or share premium) is insufficient, any excess is adjusted to retained
earnings.
The cost of a combination incurred by the absorbing party includes any costs directly attributable to the
combination shall be recognized as an expense through profit or loss for the current period when
incurred.
（2）Business combination involving entities not under common control
A business combination involving enterprises not under common control is a business combination in
which all of the combining enterprises are not ultimately controlled by the same party or parties both
before and after the business combination. For a business combination not involving enterprises under
common control, the party that, on the acquisition date, obtains control of another enterprise
participating in the combination is the acquirer, while that other enterprise participating in the
combination is the acquiree. Acquisition date is the date on which the acquirer effectively obtains
control of the acquiree.
For a business combination not involving enterprise under common control, the combination cost
including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or
assumed, and equity securities issued by the acquirer. The intermediary expenses incurred by the
acquirer in respect of auditing, legal services, valuation and consultancy services etc and other
associated administrative expenses attributable to the business combination are recognized in profit or
loss when they are incurred. The transaction cost arose from issuing of equity securities or liability
securities shall be initially recognized as equity securities or liability securities.
The contingent consideration related to the combination shall be booked as combination cost at the fair
value at the acquisition date. If, within the 12 months after acquisition, additional information can prove
the existence of related information at acquisition date and the contingent consideration need to be
adjusted, goodwill can be offset. For a business combination achieved in stages that involves multiple
exchange transactions, the equity interest in the acquiree previously held before the acquisition date
re-assessed at the fair value at the acquisition date, with any difference between its fair value and its
carrying amount is recorded as investment income. The other comprehensive income of the acquiree
before the acquisition date relating to the previously held interest in the acquiree is transferred to
investment income. Combination cost is the aggregate of the carrying amount of the equity interest held
in the acquiree prior to the acquisition date and the fair value of the cost of the additional investment at
the acquisition date.
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
Combination cost of the acquirer‘s interest and identifiable net assets of the acquirer acquired through
the business combination shall be measured by the fair value at the acquisition date. Where the cost of
combination exceeds the acquirer‘s interest in the fair value of the acquiree‘s identifiable net assets, the
difference shall be recognized as goodwill. Where the cost of combination is less than the acquirer‘s
interest in the fair value of the acquiree‘s identifiable net assets, the difference shall be accounted for
according to the following requirements: (i) the acquirer shall reassess the measurement of the fair
values of the acquiree‘s identifiable assets, liabilities and contingent liabilities and measurement of the
cost of combination; (ii) if after that reassessment, the cost of combination is still less than the
acquirer‘s interest in the fair values of the acquiree‘s identifiable net assets, the acquirer shall recognize
the remaining difference immediately in profit or loss for the current period.
Where the temporary difference obtained by the acquirer was not recognized due to inconformity with
the conditions applied for recognition of deferred income tax, if, within the 12 months after acquisition,
additional information can prove the existence of related information at acquisition date and the
expected economic benefits on the acquisition date arose from deductible temporary difference by the
acquiree can be achieved, relevant income tax assets can be recognized, and goodwill offset. If the
goodwill is not sufficient, the difference shall be recognized as profit of the current period.
Apart from above, the differences shall be taken into profit or loss of the current period if the recognition
of deferred income tax assets is related to the combination.
4、Preparation of consolidated financial statements
（1）The scope of consolidated financial statements
The scope of consolidation in the consolidated financial statements is determined on the basis of
control. Control is the power to govern the financial and operating policies of an enterprise so as to
obtain benefits from its operating activities. The scope of consolidation includes the Group and all of the
subsidiaries. Subsidiary is an enterprise or entity under the control of the Group.
（2）Preparation of the consolidated financial statements
The subsidiary of the Group is included in the consolidated financial statements from the date when the
control over the net assets and business decisions of the subsidiary is effectively obtained, and
excluded from the date when the control ceases. For a subsidiary disposed of by the Group, the
operating results and cash flows before the date of disposal (the date when control is lost) are included
in the consolidated income statement and consolidated statement of cash flows, as appropriate. For a
subsidiary disposed during the period, no adjustment is made to the opening balance of the
consolidated financial statements.
For a subsidiary acquired through a business combination not under common control, the operating
results and cash flows from the acquisition (the date when the control is obtained) are included in the
86
SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
consolidated income statement and consolidated statement of cash flows, as appropriated; no
adjustment is made to the opening balance and comparative figures in the consolidated financial
statements. Where a subsidiary was acquired during the reporting period, through a business
combination involving enterprises under common control, the financial statements of the subsidiary are
included in the consolidated financial statements. The results of operations and cash flow are included
in the consolidated balance sheet and the consolidated income statement, respectively, based on their
carrying amounts, from the date that common control was established, and the opening balances and
the comparative figures of the consolidated financial statements are restated.
When the accounting period or accounting policies of a subsidiary are different from those of the Group,
the Group makes necessary adjustments to the financial statements of the subsidiary based on the
Group‘s own accounting period or accounting policies. Where a subsidiary was acquired during the
reporting period through a business combination not under common control, the financial statements
was re-conciliated on the basis of the fair value of identifiable net assets at the date of acquisition.
Intra-group balances and transactions, and any unrealized profit or loss arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements.
Minority interest and the portion in the net profit or loss not attributable to the Group are presented
separately in the consolidated balance sheet within shareholders‘ equity and net profit. Net profit or loss
attributable to minority shareholders in the subsidiaries is presented separately as minority interest in
the consolidated income statement below the net profit line item. When the amount of loss for the
current period attributable to the minority shareholders of a subsidiary exceeds the minority
shareholders‘ portion of the opening balance of owners‘ equity of the subsidiary, the excess is allocated
against the minority interests.
When the Group loses control of a subsidiary due to the disposal of a portion of an equity investment or
other reasons, the remaining equity investment is re-measured at its fair value at the date when control
is lost. The difference between 1) the total amount of consideration received from the transaction that
resulted in the loss of control and the fair value of the remaining equity investment and 2) the carrying
amounts of the interest in the former subsidiary‘s net assets immediately before the loss of the control
is recognized as investment income for the current period when control is lost. The amount recognized
in other comprehensive income in relation to the former subsidiary‘s equity investment is reclassified as
investment income for the current period when control is lost. The retained interest is subsequently
measured according to the rules stipulated in the ―Chinese Accounting Standards for Business
Enterprises No.2—Long-term equity investment‖ or ―Chinese Accounting Standards for Business
Enterprises No.22—Determination and measurement of financial instruments‖ . Details in Note 4. 7
―Financial instruments‖ or Note 4.10 ‖Long-term equity investments ‖.
87
SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
5、Cash and Cash equivalent
Cash and cash equivalents of the Group include cash on hand, ready usable deposits and investments
having short holding term (normally will be due within three months from the day of purchase), with
strong liquidity and easy to be exchanged into certain amount of cash that can be measured reliably
and have low risks of change.
6、Foreign exchange
（1）Translation in foreign exchange transactions
The foreign currency transactions are recorded, on initial recognition in the functional currency, by
applying the spot exchange rate on the date of the transaction （an exchange rate that approximates
the actual spot exchange rate on the date of transaction）. The exchange of foreign currency and
transactions related to the foreign exchange are translated at the spot exchange rate.
（2）Translation of monetary foreign currency and non-monetary foreign currency
At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate
at the balance sheet date. All the exchange differences thus resulted are taken to profit or loss, except
for ①those relating to foreign currency borrowings specifically for construction and acquisition of
qualifying assets, which are capitalized in accordance with the principle of capitalization of borrowing
costs. ②The exchange difference from changes of other account balance of foreign currency monetary
items available-for-trade is recorded into profit or loss except for amortized cost.
Non-monetary foreign currency items measured at historical cost shall still be translated at the spot
exchange rate prevailing on the transaction date, and the amount denominated in the functional
currency is not changed. Non-monetary foreign currency items measured at fair value are translated at
the spot exchange rate prevailing at the date when the fair values are determined. The exchange
difference thus resulted are recognized in profit or loss for the current period or as capital reserve.
7、Financial instruments
（1）Determination of financial assets and liabilities‘ fair value
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm‘s length transaction. For a financial instrument which has an
active market, the Group uses quoted price in the active market to establish its fair value. The quoted
price in the active market refers to the price that can be regularly obtained from exchange market,
agencies, industry associations, pricing authorities; it represents the fair market trading price in the
actual transaction.
For a financial instrument which does not have an active market, the Group establishes fair value by
using a valuation technique. Valuation techniques include using recent arm‘s length market transactions
between knowledgeable, willing parties, reference to the current fair value of another instrument that is
88
SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
substantially the same, discounted cash flow analysis and option pricing models.
（2）Classification, recognition and measurement of financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date
basis. On initial recognition, the Group‘s financial assets are classified into one of the four categories,
including financial assets at fair value though profit or loss, held-to maturity investments, loans and
receivables and available-for-trade financial assets. A financial asset is recognized initially at fair value.
In the case of financial assets at fair value through profit or loss, relevant transaction costs are
immediately charged to the profit and loss of the current period; transaction costs relating to financial
assets of other categories are included in the amount initially recognized.
① Financial assets at fair value through profit or loss:
Including financial assets held-for-trade and financial assets designated at fair value through profit or
loss.
Financial asset held-for-trade is the financial asset that meets one of the following conditions:
A. the financial asset is acquired for the purpose of selling it in a short term;
B. the financial asset is a part of a portfolio of identifiable financial instruments that are
collectively managed, and there is objective evidence indicating that the enterprise recently manages
this portfolio for the purpose of short-term profits;
C. the financial asset is a derivative, except for a derivative that is designated and effective hedging
instrument, or a financial guarantee contract, or a derivative that is linked to and must be settled by
delivery of an unquoted equity instrument (without a quoted price from an active market) whose fair
value cannot be reliably measured. For such kind of financial assets, fair values are adopted for
subsequent measurement.
Financial asset is designated on initial recognition as at fair value through profit or loss only when it
meets one of the following conditions:
A. the designation eliminates or significantly reduces the inconsistency in the measurement or
recognition of relevant gains or losses that would otherwise arise from measuring the financial
instruments on different bases.
B.a group of financial instruments is managed and its performance is evaluated on a fair value basis,
and is reported to the enterprise‘s key management personnels. Formal documentation regarding risk
management or investment strategy has prepared.
Financial assets at fair value through profit or loss are subsequently measured at the fair value. Any
gains or losses arising from changes in the fair value and any dividends or interest income earned on
the financial assets are recognized in the profit or loss.
89
SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
② Investment held-to maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments
and fixed maturity that an entity has the positive intention and ability to hold to maturity. Such kind of
financial assets are subsequently measured at amortized cost using the effective interest method.
Gains or losses arising from derecognition, impairment or amortization are recognized in profit or loss
for the current period.
Effective interest rate is the rate that exactly discounted estimated future cash flows through the
expected life of the financial asset or financial liability or, where appropriate, a shorter period to the net
carrying amount of the financial asset or financial liability.
When calculating the effective interest rate, the Group shall estimate future cash flow considering all
contractual terms of the financial asset or financial liability without considering future credit losses, and
also consider all fees paid or received between the parties to the contract giving rise to the financial
asset and financial liability that are an integral part of the effective interest rate, transaction costs, and
premiums or discounts, etc.
③ Loans and receivables
Loans and receivables are non-derivative financial assets with fixed determinable payment that are not
quoted in an active market. Financial assets classified as loans and receivables by the Group include
note receivables, account receivables, interest receivable dividends receivable and other receivables.
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 profit or
loss.
④ Financial assets available-for-trade
Financial assets available-for-trade include non-derivative financial assets that are designated on initial
recognition as available for trade, and financial assets that are not classified as financial assets at fair
value through profit or loss, loans and receivables or investment held-to-maturity.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses
arising from changes in the fair value are recognized as other comprehensive income and included in
the capital reserve, except that impairment losses and exchange differences related to amortized cost
of monetary financial assets denominated in foreign currencies are recognized in profit or loss, until the
financial assets are derecognized, at which time the gains or losses are released and recognized in
profit or loss.
Interests obtained and dividends declared by the investee during the period in which the financial
assets available-for-trade are held, are recognized in investment gains.
90
SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
（3）Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for
the financial assets that measured by the fair value. If there is objective evidence indicating a financial
asset may be impaired, a provision is provided for the impairment.
The Group makes an impairment test for a financial asset that is individually significant. For a financial
asset that is not individually significant, it is included in a group of financial assets with similar credit risk
characteristics and collectively assessed for impairment [or individually assessed for impairment]. If no
objective evidence of impairment incurs for an individually assessed financial asset (whether the
financial asset is individually significant or not individually significant), it is included in a group of
financial assets with similar credit risk characteristics and collectively assessed for impairment. Assets
for which an impairment loss is individually recognized is not included in a group of financial assets with
similar credit risk characteristics and collectively assessed for impairment.
① Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the
estimated present value of future cash flow. The difference is recorded as impairment loss. If there is
objective evidence to indicate the recovery of value of financial assets after impairment, and it is related
with subsequent event after recognition of loss, the impairment loss recorded originally can be reversed.
The carrying value of financial assets after impairment loss reversed shall not exceed the amortized
cost of the financial assets without provisions of impairment loss on the reserving date.
② Impairment loss on available-for-trade financial assets
When decision is made with all related factors on whether the fall of fair value investment of an equity
instrument available-for-trade is significant or non-transient, it indicates impairment of such equity
instrument investment, in which, ―significant‖ means over 20% of fall in fair value and ―non-transient‖
means over 12 months of subsequent fall.
When an available-for-trade financial asset is impaired, the cumulative loss arising from declining in fair
value that had been recognized in capital reserve shall be removed and recognized in profit or loss. The
amount of the cumulative loss that is removed shall be difference between the acquisition cost with
deduction of recoverable amount less amortized cost, current fair value and any impairment loss on
that financial asset previously recognized in profit or loss.
If, after an impairment loss has been recognized, there is objective evidence that the value of the
financial asset is recovered, and it is objectively related to an event occurring after the impairment loss
was recognized, the initial impairment loss can be reversed and the reserved impairment loss on
available-for-trade equity instrument is recorded in the profit or loss, the reserved impairment loss on
available-for-trade debt instrument is recorded in the current profit or loss.
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
The equity instrument where there is no quoted price in an active market, and whose fair value cannot
be reliably measured, or impairment loss on a derivative asset that is linked to and must be settled by
delivery of such an unquoted equity instrument shall not be reversed.
（4）Recognition and measurement of financial assets transfer
The Group derecognizes a financial asset when one of the following conditions is met:
1) the rights to receive cash flows from the asset have expired;
2) the enterprise has transferred its rights to receive cash flows from the asset to a third party
under a ―pass-through‖ arrangement; or
3) the enterprise has transferred its rights to receive cash flows from the asset and either (a)
has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor
retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
If the enterprise has neither retained all the risks and rewards from the financial asset nor control over
the asset, the asset is recognized according to the extent it exists as financial asset, and correspondent
liability is recognized. The extent of existence refers the level of risk by the financial asset changes the
enterprise is facing.
For a transfer of a financial asset in its entirety that satisfies the derecognition criteria, (a). the carrying
amount of the financial asset transferred; and (b) the sum of the consideration received from the
transfer and any cumulative gain or loss that had been recognized in other comprehensive income, is
recognized in profit or loss.
If a part of the transferred financial asset qualifies for derecognition, the carrying amount of the
transferred financial asset is allocated between the part that continues to be recognized and the part
that is derecognized, based on the relative fair value of those parts. The difference between (a) the
carrying amount allocated to the part derecognized; and (b) the sum of the consideration received for
the part derecognized and any cumulative gain or loss allocated to the part derecognized which has
been previously recognized in other comprehensive income, is recognized in profit or loss.
（5）Classification and measurement of financial liabilities
The Group‘s financial liabilities are, on initial recognition, classified into financial liabilities at fair value
through profit or loss and other financial liabilities. For financial liabilities at fair value through profit or
loss, relevant transaction costs are immediately recognized in profit or loss for the current period, and
transaction costs relating to other financial liabilities are included in the initial recognition amounts.
①Financial liabilities measured by the fair value and the changes recorded in profit or loss
The classification by which financial liabilities held-for-trade and financial liabilities designed at the initial
recognition to be measured by the fair value follows the same criteria as the classification by which
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
financial assets held-for-trade and financial assets designed at the initial recognition to be measured by
the fair value and their changes are recorded in the current profit or loss.
For the financial liabilities measured by the fair value and changes recorded in the profit or loss, fair
values are adopted for subsequent measurement. All the gains or losses on the change of fair value
and the expenses on dividends or interests related to these financial liabilities are recognized in profit or
loss for the current period.
②Other financial liabilities
Derivative financial liabilities that linked with equity instruments, which do not have a quoted price in an
active market and their fair value cannot be measured reliably, is subsequently measured by cost Other
financial liabilities are subsequently measured at amortized cost using the effective interest method.
Gains or losses arising from derecognition or amortization are recognized in profit or loss for the current
period.
（6）Derecognition
The Group derecognizes a financial liability (or part of it) when the underlying present obligation (or part
of it) is discharged or cancelled or has expired. An agreement between the Group (an existing borrower)
and existing lender to replace original financial liability with a new financial liability with substantially
different terms is accounted for as an extinguishment of the original financial liability and the recognition
of a new liability.
When the Group derecognizes a financial liability or a part of it, it recognizes the difference between the
carrying amount of the financial liability (or part of the financial liability) derecognized the consideration
paid (including any non-cash assets transferred or new financial liabilities assumed) in profit or loss.
（7） Offsetting financial assets and financial liabilities
When the group has a legal right that is currently enforceable to set off the recognized financial assets
and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and
settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and
the net amount is presented in the balance sheet. Except for the above circumstances, financial assets
and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
（8） Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities. The consideration received from issuing equity instruments, net of
transaction costs, are added to owners‘ equity.
All types of distribution (excluding stock dividends) made by the Group to holders of equity instruments
are deducted from owners‘ equity. The Group does not recognize any changes in the fair value of equity
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
instruments.
8、Account receivables
The account receivable by the Group includes account receivables, and other receivables.
（1）Criteria for recognition of bad debts:
The Company carries out an inspection on the balance sheet date. Where there is any
objective evidence proving that the receivables have been impaired, an impairment provision shall be
made:
①A serious financial difficulty occurs to the issuer or debtor;
②The debtor breaches any of the contractual stipulations, for example, fails to pay or delays
the payment of interests or the principal, etc.;
③The debtor will probably become bankrupt or carry out other financial reorganizations;
④ Other objective evidences showing the impairment of the receivables.
（2）Method for bad debts provision
① Provisions of bad debts in account receivables that is individually significant.
The Group treats account receivables over RMB 1,000,000 and other receivables over RMB
500,000 as individually significant items.
For an account receivable that is individually significant, the asset is individually assessed for
impairment, and the amount of impairment is recognized in profit or loss if there is objective evidence of
impairment is included in a group of financial assets with similar credit risk characteristics and
collectively assessed for impairment. An account receivable for which an impairment loss is individually
recognized is not included in a group of account receivables with similar credit risk characteristics and
collectively assessed for impairment.
② Provisions of bad debts in account receivables that individually insignificant items with similar credit
risk characteristics that have significant risk:
A．Evidence of credit risk characteristics
Whether the financial asset is individually significant or not individually significant, it is included in a
group of financial assets with similar credit risk characteristics and collectively assessed for impairment.
Such credit risk reflects the repayment of all due amount under the contract, and is related to the
estimation of future cash flow expected to be derived from the assets.
Evidence of portfolios：
Item Evidence of portfolios
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
Aging portfolios Use the aging of account receivables as credit risk characteristics
B．Provision by credit risk characteristics
按 During the group impairment test, the amount of bad debts provisions is determined by the assessed
result from the experience of historical loss and current economic status and the existing loss in the
estimated account receivables according to the set of account receivables and credit risk characteristic.
Provisions for difference portfolios：
Item Method of provision
Aging portfolios Provision by Aging
a. Provision by Aging analysis
Aging Accounts receivable（%） Other receivables（%）
Within 1 year(inclusive) No provision No provision
1-2 years (inclusive) 5 5
2-3 years (inclusive) 20 20
Over 3 years 50 50
③ Provisions of bad debts that is individually insignificant.
The Group treats account receivables under RMB 1,000,000 and other receivables under RMB 500,000
as individually insignificant items.
For the account receivables not individually significant, the Group assesses the account receivables
individually for impairment when are of following characteristics: if there is objective evidence indicating
the impairment, the impairment loss is recognized at the difference between the present value of future
cash flow less the carrying amount, and provision is made accordingly. For example, account
receivables with related parties; account receivables under litigations or arbitrations, or account
receivables with obvious indication that debtor cannot fulfill the obligation of repayment.
（3）The reversal of bad debts provision
If there is objective evidence of recovery in value of account receivables, and the recovery can be
related to an event occurring after the impairment was recognized, the previously recognized
impairment loss is reversed and recognized in profit or loss. However, the reversal shall not result
in a carrying amount that exceeds what the amortized cost would have been had the impairment
loss not been recognized at the date the impairment is reversed.
9、Inventories
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
（1）Classification of inventory
The Group‘s inventory mainly include raw materials, goods in stock, work-in-progress and low value
consumables, etc.
（2）Valuation method of inventories upon delivery
Inventories are initially carried at the actual cost and delivered at the value by weighted average method. The low value
consumables and packaging should be amortized in equal installment.
（3）Basis for determining net realizable value of inventories and provision methods for decline in value
of inventories
Net realizable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable
value is determined on the basis of clear evidence obtained, and takes into consideration the purpose
of holding inventories and effect of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If
the net realizable value is below the cost of inventories, a provision for decline in value of inventories is
made. The provision for inventories decline in value is normally determined by the difference of the cost
of individual item less its realizable value.
After the provision for decline in value of inventories is made, if the circumstances that previously
caused inventories to be written down below cost no longer exist so that the net realizable value of
inventories is higher than their cost, the original provision for decline in value is reversed and the
reversal is included in profit or loss for the period.
（4）Inventory system is maintained for stock system.
10、Long-term equity investments
（1）Determination of Investment cost
For a business combination involving enterprises under common control, the initial investment cost of
the long-term equity investment shall be carrying value of the absorbing party‘s share of the owners‘
equity of the party being absorbed at the date of combination. For a business combination not involving
enterprise under common control, the combination cost including the sum of fair value, at the
acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the
acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services,
valuation and consultancy services etc and other associated administrative expenses attributable to the
business combination are recognized in profit or loss when they are incurred. Transaction fee of equity
securities or debt securities issued by purchaser‘s business combination, which should be calculated in
initializing confirming amount of equity securities or debt securities.
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
The equity investments other than the long-term equity through combination shall be initially measured
by cost. The cost shall be recognized to the difference in the way of acquisition of long-term equity
investment. Theses ways include the cash purchase price the Group actually paid, the fair value of
equity security issued by the Group, value specified in the investment contract or agreement, the fair
value or carrying value of the asset out in the transaction of non-monetary asset exchanges, and the
fair value of the long-term equity investment. Other direct cost, tax and necessary expenses related to
the acquisition of long-term equity investment are recognised in investment cost.
（2）Subsequent Measurement
Cost method shall be adopted in a long-term equity investment where the investing enterprise does not
have common control or significant influence over the investee, the investment is not quoted in an
active market and its fair value cannot be measured reliably. Where an investing enterprise can
exercise common control or significant influence over the investee, a long-term investment shall be
accounted for using the equity method. When an investing enterprise can no longer exercise joint
control or common control nor significant influence over the investee, and its fair value cannot be
measured reliably, a long-term investment shall be counted as financial asset ready-for trade.
A long-term equity investment where cost method is adopted in the Company‘s financial statements can
exercise controls over the investee.
① Cost method of accounting for long-term equity investments
Under the cost method, a long-term equity investment is measured at initial investment cost. Except for
cash dividends or profits declared but not yet paid that are included in the price or consideration
actually paid upon acquisition of the long-term equity investment, investment income is recognized in
the period in accordance with the attributable share of cash dividends or profit distributions declared by
the investee.
② Equity method of accounting for long-term equity investments
Where the initial investment cost of a long-term equity investment exceeds the investing enterprise‘s
interest in the fair values of the investee‘s identifiable net assets at the time of acquisition, no
adjustment shall be made to the initial investment cost. Where the initial investment cost of a long-term
equity investment is less than the investing enterprise‘s interest in the fair values of investee‘s
identifiable net assets at the time of acquisition, the difference shall be charged to profit or loss for the
current period, and the cost of the long-term equity investment shall adjusted accordingly.
Under the equity method, the Group recognizes its share of the net profit or loss of the investee for the
period as investment income or loss for the period. The Group recognizes it share of the investee‘s net
profit or loss based on the fair value of the investee‘s individual separately indentible assets, etc at the
acquisition date after making appropriate adjustments to confirm with the Group‘s accounting policies
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
and accounting period. Unrealized profits or losses resulting from the Group‘s transactions with its
associates and joint ventures are recognized as investment income or loss to the extent that those
attributable to the Group‘s equity interest are eliminated. However, unrealized losses resulting from the
Group‘s transactions with its investees on the transferred assets, in accordance with "Accounting
Standards for Enterprises No. 8 - Impairment of Assets", are not eliminated. Changes in owners‘ equity
of the investee other than net profit or loss are correspondingly adjusted to the carrying amount of the
long-term equity investment, and recognized as other compressive income which is included in the
capital reserve.
When the investee is recognized net losses, reduce the carrying value of long-term equity investments
and long-term equity of net investment (in substance) in investee to zero. In addition, the Group has the
obligations on additional losses, then the expected obligation as estimated liabilities and included in the
current investment losses. Where the net profit from investee units, restoration confirm the amount of
revenue sharing after offset the amount of unrecognized loss sharing.
For long-term equity investments in associates and joint ventures which had been held by the Group
before its first time adoption of Accounting Standards for Business Enterprises in 01-01-2007, where
the initial investment cost of a long-term equity investment exceeds the Group‘s interest in the
investee‘s net assets at the time of acquisition, the excess is amortized and is recognized in profit or
loss on a straight line basis over the original remaining life.
③ Acquisition of minority interest
The difference between newly increased equity investment due to acquisition of minority interests and
portion of net asset cumulatively calculated from the acquisition date is adjusted as capital reserve. If
the capital reserve is not sufficient to absorb the difference, the excess are adjusted against returned
earnings.
④ Disposal of long-term equity investment
Where the parent company disposes long-term investment in a subsidiary without a change in control,
the difference in the net asset between the amount of disposed long-term investment and the amount of
the consideration paid or received is adjusted to the owner‘s equity. If the disposal of long-term
investment in a subsidiary involves loss of control over the subsidiary, the related accounting policies in
Note 4.2.(2) applies.
On disposal of a long-term equity investment, the difference between the proceeds actually received
and receivable and the carrying amount is recognized in profit or loss for the period. For along-term
equity investment accounted for using the equity method, the amount included in the owners‘ equity
attributable to the percentage interest disposed is transferred to profit or loss for the period. For any
retained interest, it shall be subsequently measured according to the related accounting policies in
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
regard of long-term equity investments or financial assets as described above if its carrying amount is
recognized as long-term equity investments or other related financial assets. Retroactive adjustment is
made on the basis of relevant policies if the retained interests are settled from cost method to equity
method.
（3） Recognition of investee under common control or significant influence
Control is the power to govern the financial and operating policies of an enterprise so as to obtain
benefits from its operating activities. Common control is the contractually agreed sharing of control over
an economic activity, and exists only when the strategic financial and operating decisions relating to the
activity require the unanimous consent of the parties sharing control. Significant influence is the power
to participate in the financial and operating policy decisions of the investee but is not control or joint
control over those policies. When determining whether an investing enterprise is able to exercise
control or significant influence over an investee, the effect of potential voting rights of the investee held
be the investing enterprise or other parties that are currently exercisable or convertible shall be
considered.
（4）Impairment testing methods and recognition of impairment provision
The company assesses the long-term equity investment at the balance sheet date whether there is any
indication of impairment. If any indication exists that an asset may be impaired, the enterprise shall
estimate its recoverable value of the asset. If the recoverable value of the asset is less than its carrying
amount, a provision for impairment loss of the asset is recognized accordingly.
Once an impairment loss is recognized, it shall not be reversed in a subsequent period.
11、Investment properties
Investment property is property held to earn rental or for capital appreciation or both. It includes a land
use right that is leased out, a land use right held for transfer upon capital appreciation, and a building
that is leased out.
The investment properties shall be initially measured in light of their cost when getting it and make a
follow-up measurement to the investment real estate through the cost pattern on the date of the
balance sheet. The test method of depreciation or impairment of the buildings is the same as fixed
assets, the test method of depreciation or impairment of the land use rights is the same as intangible
assets.
The details of assess method and impairment provision for investment properties are in Note4.17
―Impairment of non-current non-financial assets‖.
Where an investment property is disposed or no longer in use permanently and no economic benefits
shall be obtained from the disposal, derecognized the investment property. The income from sale,
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
transfer or disposal of the investment property is recorded in the profit or loss after deduction of its
carrying amount and related tax.
12、Fixed assets
（1）The conditions of recognition
Fixed assets refers to the tangible assets that are held for the sake of producing commodities,
rendering labor service, renting or business management and their useful life is in excess of one fiscal
year.
（2）The method for depreciation
Fixed assets are stated at cost and consider the impact of expected costs of abandoning the initial
measurement. From the following month of state of intended use, the straight-line method is used for
different categories of fixed assets to take depreciation. The recognition of the classification, useful life
and estimated residual rate are as follows:
Estimated residual value
Category Expected useful life Depreciation（%）
（%）
Building & construction 35 3 2.77
Machines & equipments 12 3 8.08
Vehicles 7 3 13.86
Electronic appliances 7 3 13.86
Office and other equipment 7 3 13.86
Private housing renovation costs 10 0 10.00
Expected net residual value of fixed assets is the balance of the Group currently obtained from the
disposal of the asset less the estimated costs of disposal amount, assuming the asset is out of useful
life and state the expected service life in the end.
（3） Measurement and recognition of fixed assets
Impairment and provisions of fixed assets are disclosed on Note 4.17 ―Impairment of non-current
non-financial assets‖.
（4）Others
A fixed asset is recognized only when the economic benefits associated with the asset will probably
flow to the Company and the cost of the asset can be measured reliably. Subsequent expenditure
incurred for a fixed asset that meet the recognition criteria shall be included in the cost of the fixed
asset, and the carrying amount of the component of the fixed asset that is replaced shall be
derecognized. Otherwise, such expenditure shall be recognized in profit or loss in the period in which
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
they are incurred.
The revenue from selling or transferring, or disposing a fixed asset is booked into profit and loss after
deduction of carrying value and related tax.
The Group conducts a review of useful life, expected net realizable value and depreciation methods of
the fixed asset at least on an annual base. Any change is regarded as change in accounting estimates.
13、Construction in progress
Construction in progress is measured at its actual cost. The actual costs include various construction
expenditures during the construction period and other relevant costs. Construction in progress is
transferred to a fixed asset when it is ready for intended use.
Testing method for provision impairment of construction in progress and accrued method for provision
impairment please refer to Note 4.17 Impairment of non-current financial assets‘.
14、Borrowing costs
The borrowing costs shall include interests on borrowings, amortization of discounts or premiums on
borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. Where the
borrowing costs incurred to an enterprise can be directly attributable to the acquisition and construction
or production of assets eligible for capitalization, it shall be capitalized and recorded into the costs of
relevant assets. Other borrowing costs shall be recognized as expenses on the basis of the actual
amount incurred, and shall be recorded into the current profits and losses.
Where funds are borrowed for a specific-purpose, the amount of interest to be capitalized is the actual
interest expense incurred on that borrowing for the period less any bank interest earned from
depositing the borrowed funds before being used on the asset or any investment income on the
temporary investment of those funds. Where funds are borrowed for a general-purpose, the amount of
interest to be capitalized on such borrowings is determined by applying a weighted average interest
rate to the weighted average of the excess amounts of accumulated expenditure on the asset over and
above the amounts of specific-purpose borrowings. During the capitalization period, exchange
differences related to a specific-purpose borrowing denominating in foreign currency are all capitalized.
Exchange differences in connection with general-purpose borrowings are recognized in profit or loss in
the period in which they are incurred.
Assets qualified for capitalization are the fixed assets, investment properties or inventories which need
a long time of construction or production activities before ready for intended used or sale. Capitalization
of borrowing costs is suspended during periods in which the acquisition, construction or production of a
qualifying asset is interrupted by activities other than those necessary to prepare the asset for its
intended use or sale, when the interruption is for a continuous period of more than 3 months. Borrowing
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
costs incurred during these periods recognized as an expense for the current period until the
acquisition, construction or production is resumed.
15、Intangible assets
（1）Recognition and calculation of intangible asset
The term ―intangible asset‖ refers to the identifiable non-monetary assets without physical shape,
possessed or controlled by enterprises.
The intangible assets are initially measured by its cost. Expenses related to intangible assets, if the
economic benefits related to intangible assets are likely to flow into the enterprise and the cost of
intangible assets can be measured reliably, shall be recorded as cost of intangible assets. The
expenses other than this shall be booked in the profit or loss when they occur.
Land use rights that are purchased by the Group are accounted for as intangible assets. Buildings,
such as plants that are developed and constructed by the Group, and relevant land use rights and
buildings, are accounted for as intangible assets and fixed assets, respectively. Payments for the land
and buildings purchased are allocated between the land use rights and the buildings; if they cannot be
reasonably allocated, all of the land use rights and buildings are accounted for as fixed assets.
When an intangible asset with a definite useful life is available for use, its original cost is amortized over
its estimated useful life using the straight-line method . An intangible asset with an indefinite useful life
is not amortized.
For an intangible asset with a definite useful life, the Group reviews the useful life and amortization
method at the end of the period, and makes adjustment when necessary.. An additional review is also
carried out for useful life of the intangible assets with indefinite useful life. If there is evidence showing
the foreseeable limit period of economic benefits generated to the enterprise by the intangible assets,
then estimate its useful life and amortize according to the policy of intangible assets with definite useful
life.
（2）Methods of impairment assessment and determining the provision for impairment losses of
intangible assets
Testing method for provision impairment of intangible assets and accrued method for provision
impairment please refer to Note 4.17 Impairment of non-current financial assets‘.
16、Long-term prepaid expenses
Long-term prepaid expenses represent expenses incurred that should be borne and amortized over the
current and subsequent period together of more than one year. Long-term prepaid expenses are
amortized by using straight line method.
17、Impairment of non-current non-financial assets
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
Non-financial assets with non-current nature include fixed assets, construction in progress, intangible
assets with definite useful lives, investment properties measured by cost methods and long-term equity
investment on subsidiaries, jointly operations. The Company assesses whether there are any indicators
of impairment for all non-financial assets at the balance sheet date, and impairment test is carried out
and recoverable value is estimated if such an indicator exits. Goodwill and intangible assets with
indefinite useful lives, as well as intangible assets not ready for use, are tested for impairment annually
regardless of indicators of impairment.
Impairment of loss is calculated and provisions taken by the difference if the recoverable value of the
assets is lower than the book value. The recoverable value is the higher of estimated present value of
the future expected cash flows from the asset and net fair value of the asset less disposed cost. The
fair value of asset is determined by the sales agreement price within an arm‘s length transaction. In
case there is no sales agreement, but there is active market of assets, the fair value can be determined
by the selling price. If there is neither sales agreement nor active market, the fair value of the asset can
be estimated based on the best information obtained.
Disposal expenses include expenses related to the legislation, taxes, transportations and the direct
expense for the asset to be ready for sale. When calculating the present value of expected future cash
flows from an asset or asset group, the management shall estimate the expected future cash flows from
the asset or asset group and choose a suitable discount rate in order to calculate the present value of
those cash flows.
Provision for asset impairment is calculated and determined on the individual basis. If the recoverable
of individual asset is hard to estimate, the recoverable amount can be determined by the asset group
where subject asset belongs. Asset group is the smallest set of assets that can have cash flow in
independently.
Once the loss from above asset impairment is recognized, the recoverable part cannot be reserved in
the subsequent periods.
18、Accrued liabilities
Accrued liabilities (or Provisions) are recognized when following obligations related to a contingency are
satisfied simultaneously. They are (a) such obligation is the present obligation of the Group, (b)it is
probable that an outflow of economic benefits will be required to settle the obligation, and (c) the
amount of the obligation can be measured reliably.
The amount recognized as a provision is the best estimate of the consideration required to settle the
present obligation at the balance sheet date, taking into account factors pertaining to a contingency
such as risks, uncertainties and time value of money.
Where all or some of the expenditure required to settle a provision is expected to be reimbursed by a
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
third party, the reimbursement is recognized as a separate asset only when it is virtually certain that
reimbursement will be received, and the amount of reimbursement recognized does not exceed the
carrying amount of the provision.
19、Revenue
（1）Revenue from sales of goods
Revenue from selling goods can be recognized only when the Group has transferred to the buyer the
significant risks and rewards of ownership of the goods; the Group retains neither continuing
managerial involvement to the degree usually associated with ownership nor effective control over the
goods sold; the relevant economic benefits may flow into the enterprise, and the associated costs
incurred or to be incurred can be measured reliably.
The Company recognize revenue of selling automobiles after received payments with sales contract.
（2）Revenue from rendering service
When the outcome of a transaction involving the rendering of services can be estimated reliably at the
balance sheet date, revenue associated with the transaction is recognized using the percentage of
completion method. The stage of completion of a transaction for rendering services is determined
based on the proportion that costs incurred to date bear to the estimated total costs of the transaction.
The outcome of a transaction involving rendering of services can be estimated reliably when all of the
following conditions are satisfied:
①the amount of revenue can be measured reliably;
② it is probable that the associated economic benefits will flow to the Group;
③the stage of completion of the transaction can be measured reliably;
④the costs incurred and to be incurred for the transaction can be measured reliably.
If the outcome of a transaction involving rendering of services cannot be estimated reliably, the revenue
is recognized by the cost incurred and estimated compensation, and the actual cost is booked into
profit and loss. No revenue is recognized if the cost incurred cannot be recovered.
The Company recognizes revenue of providing automobile repair service after received payments or
has collection right.
（3）Royalty Revenue
According to the contract or agreement, the revenue is recognized on an accrual basis.
（4）Interest Income
The amount of interest revenue should be measured and confirmed in accordance with the length of
time for which the enterprise's cash is used by others and the actual interest rate.
20、Government Grants
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
Government grants are transfer of monetary assets and non-monetary assets from the government to
the Group at no consideration, excluding the capital invested by the government as equity owner.
Government grant can be classified as grant related to the assets and grants related to the income.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount
received or receivable. If a government grant is in the form of a non-monetary asset, it is measured at
fair value. If the fair value cannot be reliably determined, it is measured at a nominal amount. A
government grant measured at a nominal amount is recognized immediately in profit or loss for the
period.
A government grant related to an asset is recognized as deferred income, and evenly amortized to
profit or loss over the useful life of the related asset. For a government grant related to income, if the
grant is a compensation for related expenses or losses to be incurred in subsequent period, the grant is
recognized as deferred income, and recognized in profit or loss over the periods in which the related
costs are recognized. If the grant is a compensation for related expenses or losses already incurred,
the grant is recognized immediately in profit or loss for the period.
For repayment of a government grant already recognized, if there is a related deferred income, the
repayment is offset against the carrying amount of the deferred income, and any excess is recognized
in profit or loss for the period. If there is no related deferred income, the repayment is recognized
immediately in profit or loss for the period.
21、Deferred income tax assets and deferred income tax liabilities
（1）Income tax of the current period
At the balance sheet date, current income tax liabilities or assets for the current and prior periods, are
measured at the amount expected to be paid (or recovered) according to the requirements of tax laws.
The calculation for income tax expenses in the current period is based on the taxable income according
to the related tax laws after adjustment to the accounting profit of the current accounting.
（2）Deferred income tax assets and liabilities
For temporary differences between the carrying amount of certain assets or liabilities and their tax base,
or between the nil carrying amount of those items that are not recognized as assets or liabilities and
their tax base that can be determined according to tax laws, deferred tax assets and liabilities are
recognized using the balance sheet liability method.
For temporary differences associated with the initial recognition of goodwill and the initial recognition of
an asset or liability arising from a transaction (not a business combination) that affects neither the
accounting profit nor taxable profits (or deductible losses) at the time of transaction, no deferred tax
asset or liability is recognized.
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SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
For taxable temporary differences associated with investments in subsidiaries and associates, and
interests in joint ventures, no deferred income tax liability related is recognized except where the Group
is able to control the timing of reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future. All deferred income tax liabilities arising from
taxable temporary differences except the ones mentioned above are recognized.
For temporary deductible differences associated with the initial recognition of an asset or liability arising
from a transaction (not a business combination) that affects neither the accounting profit nor taxable
profits (or deductible losses) at the time of transaction, no deferred tax asset is recognized. For taxable
temporary deductible differences associated with investments in subsidiaries and associates, and
interests in joint ventures, no deferred income tax asset related is recognized if it is impossible to
reversal the temporary difference in the foreseeable future, or it is not probable to obtain taxable
income which can be used for the deduction of the temporary difference in the future.
Except mentioned above, the Group recognizes other deferred income tax assets that can deduct
temporary differences to the extent that it is probable that taxable profits will be available against which
the deductible temporary differences can be utilized.
For the deductible losses and tax credit that can be carried forward, deferred tax assets for deductible
temporary differences are recognized to the extent that it is probable that taxable profits will be
available against which the deductible temporary differences can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates according to
tax laws, that are expected to apply in the period in which the asset is realized or the liability is settled.
At the balance sheet date, the Group reviews the carrying amount of deferred tax assets. If it is no
longer probable that sufficient taxable profit will be available in future periods to allow the benefits of the
deferred tax assets to be used, the Group reduces the carrying amount of deferred tax assets. The
amount of such reduction is reversed when it becomes probable that sufficient taxable profit will be
available.
（3）Income Tax Expenses
Income tax expenses consist of current income tax and deferred income tax.
The expenses from income tax and deferred income tax, as well as the revenue, shall be recorded into
profit or loss in current accounting period, except expense for income tax of the current period and
deferred income tax that booked into other income or equity and adjusted carrying value of deferred
income tax goodwill arose from business combination.
22、Leases
106
SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of
an asset. Title may or may not eventually be transferred. An operating lease is a lease other than a
finance lease.
（1）The Group as Lessee under Operating Lease
Lease payments under an operating lease are recognized by a lessee on a straight-line basis over the
lease term, and either included in the cost of the related asset or charged to profit or loss for the current
period. The contingent rents shall be recorded in the profit or loss of the period in which they actually
arise.
（2）The Group as Leaser under Operating Lease
Lease income from operating leases shall be recognized by the leaser in profit or loss on a straight-line
basis over the lease term. Initial direct cost of significance in amount shall be capitalized when incurred.
If another basis is more systematic and rational, that basis may be used. Contingent rents are credited
to profit or loss in the period in which they actually arise.
23、Employee Benefits
During the accounting period of an employee‘ providing services to the Group, the Group recognizes
the compensation payable as liabilities.
The Group participates in the employees social security system set up by government agencies,
including pensions, medical insurance, housing fund and other social security system, and the
corresponding expenditures are included in the cost of related assets or the profit or loss.
When an enterprise terminates the employment relationship with employees before the end of the
employment contracts or provides compensation as an offer to encourage employees to accept
voluntary redundancy, a provision shall be recognized for the compensation arising from termination of
employment relationship with employees, with a corresponding charge to the profit or loss for the
current period. The enterprise cannot unilaterally withdraw from the termination plan or the redundancy
offer.
The early retirement plan adopts the same principles of termination benefits. Salaries and social
insurance (from the date of ceasing services to the date of normal retirement) are paid by the Group,
subject to the conditions to be recognized in profit or loss (termination benefits).
24、Changes in major accounting policies and accounting estimates
（1）Changes of accounting policies
The group do not have any changes of accounting policies in this reporting period.
（2）Changes of accounting estimates
The group do not have any changes of accounting estimates in this reporting period.
25、Correction of previous accounting errors
107
SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
The group do not have any previous accounting errors to correct in this reporting period.
26、Significant account judgment and estimates
The Group is required to make judgments, estimates and assumptions about the carrying amounts of
items in the financial statements that cannot be measured accurately, due to the internal uncertainties
of operation activities. These judgments, estimates and assumptions are based on historical
experiences of the Group‘s management as well as other factors that are considered to be relevant.
These judgments, estimates and assumptions may affect value of the financial statements in revenue,
expenses, assets and liabilities and the disclosure of contingency at the balance sheet date. However,
the result derived from those uncertainties in estimates may lead significant adjustments to the carrying
amounts of the assets or liabilities affected in the future.
The Group has reviews the judgments, estimates and assumptions regularly on the basis of going
concern. Where the changes in accounting estimates only affect the period when changes occurred,
and they are recognized within the same period. Where the changes in accounting estimates affect
both current period and future period, the changes are recognized within the period of change and
future period.
At balance sheet date, the followings are the significant areas where the Group needs to make
judgment, estimates and assumptions over the value of items in the financial statements:
（1）Provisions for bad debts
According to the relevant accounting policies of the Group in receivables, allowance method is used for
bad debt‘s calculation. The impairment of receivables is calculated based on the assessment of
recoverable of receivables. Assurance of receivable impairment needs judgments and estimations from
the management. The difference between actual results and original estimates shall have impact on the
carrying amount of receivables and receivable bad debt provisions or the reverse during the change of
estimation.
（2）Impairment of inventories
The Group measures inventories by the lower of cost and realizable net value according to the
accounting policies in regard of inventories and provisions for decline in value of inventories is made if
the cost is higher than their net realizable value, and obsolete and slow-movement inventories.
Inventories decline in value to net realizable value is the estimated selling price in the ordinary course
of business. Net realizable value is determined on the basis of clear evidence obtained, and takes into
consideration the purposes of holding inventories and effect of post balance sheet events. The
difference between the actual result and the original estimates shall have impact on reverse of the
carrying amount of the inventories and their decline in value or provisions during the period of change.
（3）Impairment of non-financial, non-current assets
The Company assesses whether there are any indicators of impairment for all non-current assets other
108
SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
than financial assets at the balance sheet date. For an intangible asset that has indefinite useful life,
impairment test is made in addition to the annual impairment test if there is any indication of impairment.
For non-current assets other than financial assets, impairment test is made when there is any indication
that its account balance cannot be recovered.
Impairment exists when the recoverable amount of an asset is the higher of its fair value less cost of
disposal and present value of the future cash flows expected to be derived from the asset.
Net value between the difference of fair value and disposal cost is determined by reference of the price
of similar product in a sale agreement in an arm‘s length transaction or an observable market price less
the additional cost directly attributable to the disposal of the asset.
When estimating the present value of future cash flow, significant judgments are made over the asset‘s
production, selling price and relevant operating expenses, and discount rate used to calculate present
value. All available materials that are considered to be relevant shall be used in the estimation of
recoverable value. These materials include estimations of production, selling price and operating
expenses based on reasonable and supportable assumptions.
（4）Depreciation and amortization
Investment property, fixed assets and intangible assets are depreciated and amortized using the
straight-line method over their useful lives after taking into account residual value. The useful lives are
regularly reviewed to determine the depreciation and amortization costs charged in each reporting
period. The useful lives are determined based on historical experience of similar assets and the
estimated technical changes. If there is an indication that there has been a change in the factor used to
determine the depreciation or amortization, the rate of depreciation or amortization is revised.
（5）Deferred income tax assets
The group shall recognize all unused tax losses as deferred tax assets to the extent that it is probable
that future taxable profit will be available against which the unused tax losses and unused tax credits
can be utilized. This requires the management of the Group make a lot of judgments over the
estimation of time period, value and tax planning strategies when future taxable profit incurs so that the
value of deferred tax assets can be determined.
（6）Income tax
There are some transactions where ultimate tax treatments and calculations have uncertainties in the
Group‘s dairy operation. It‘s need Tax office to approve for some items to make expenditure before tax
needs approval from competent tax authorities. If there is any difference between finalized
determination value and their initial estimations value, the difference shall have the impact on the
income tax and deferred income tax of the current period during the final determination.
（7）Accrued liabilities
According to the contract rules, obtained knowledge and historical experience to estimate and calculate
109
SHENZHEN TELLUS HOLDING CO., LTD. Notes to the financial statements for the year ended 31 December 2012
provision on products‘ quality, predicted contract lost, late delivery and liquidated damages.Accrued
liabilities (or Provisions) are recognized when following obligations related to a contingency are satisfied
simultaneously. They are (a) such obligation is the present obligation of the Group, (b)it is probable that
an outflow of economic benefits will be required to settle the obligation, and (c) the amount of the
obligation can be measured reliably. The determination and calculation of accrued liabilities on great
extent rely on judgments of manage level. The group should assess the relevant risk, uncertainty and
time value of currency when judging those obligations.
Ⅴ、Principal Taxes Applied
1、 Taxes and their rates
Category Tax rate (%)
The rate for domestic sales is 17%, pay as the difference of output tax less allowable
Value Added Tax
input tax.
Business Tax Business tax rate is the 5% of taxable income
City Construction Tax City construction tax rate is 7% of turnover tax.
Education surtax Education surtax rate is 3% of turnover tax.
Local education surcharge Local education surcharge is 2% of turnover tax.
Enterprise Income Tax * Income tax is calculated with the ratio of 25%.
*Note：According to the Notice by the PRC State Council on the Implementation of the Grandfathering
Preferential Policies under the PRC Enterprise Income Tax Law Decree No. [2007] 39, as from 1 st
January 2008, the enterprises that have enjoyed preferential tax rates shall be taxed at rates to be
increased from the current rate to the full rate under the EIT law within a period of 5 years. Among
others, the enterprises that have been taxed at 15% currently shall be taxed at 18% in 2008, 20% in
2009, 22% in 2010, 24% in 2011 and 25% in 2012. The Company and its subsidiaries (except
Shenzhen Dongchang Yongtong Automobile Inspection Equipment Co., Ltd. and Shenzhen
Xinyongtong Dongxiao Automobile Inspection Equipment Co., Ltd.) are taxed at 25% in 2012.
110
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Ⅵ、Business Combination & Consolidated Financial Statements
1、Information of subsidiaries
（1）Subsidiaries acquired from establishment or investment（Expressed in 10,000 Yuan）
Type of Registered Nature of Registered Type of Legal Organization Real Balance of other items that in substance
Name of subsidiaries Business scope
subsidiaries place business capital Company person code investment constitutes net investment
Shenzhen Tellus Xinyongtong Automobile
fully-owned su Automobile inspection &
Development Co. ,Ltd Shenzhen Service 3290 Co., Ltd Li Jinlong 192171903 5767 --
bsidiary repair
(The Xinyongtong)
Shenzhen Tefa Tellus Property Management fully-owned su Fang
Shenzhen Service 705 Property management Co., Ltd 192185088 502 --
Co.,Ltd(The Tellus Property) bsidiary Zhidong
Shenzhen Tefa Tellus Real Estate Co., fully-owned su Manufactur Fang
Shenzhen 3115 Manufacture Co., Ltd 192195470 3115 --
Ltd(The Real Estate) bsidiary e Zhidong
Shenzhen Tellus Real Estate Exchange Co., fully-owned su Fang
Shenzhen Service 200 Real estate agent Co., Ltd 192282945 200 --
Ltd(The Exchange) bsidiary Zhidong
Shenzhenxinyongtong Automobile Inspection holding Production of automobile Huang
Shenzhen Service 1961 Co., Ltd 715275892 1000 --
Equipment Co.,Ltd(The Inspection) subsidiary inspection equipment Peibo
Automobile and
holding Ren
Hezhou Service 500 accessories selling, Co., Ltd 576807800 60 --
subsidiary Yongjian
Guangxi Tellus Automobile Service Co.,Ltd. Leasing
Shenzhen Dongchang Yongtong Automobile holding
Shenzhen Service 150 Automobile inspection Co., Ltd Li Jinglong 775581736 143 --
Inspection Equipment Co.,Ltd. subsidiary
111
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Type of Registered Nature of Registered Type of Legal Organization Real Balance of other items that in substance
Name of subsidiaries Business scope
subsidiaries place business capital Company person code investment constitutes net investment
Shenzhen Xinyongtong Dongxiao Automobile holding
Shenzhen Service 150 Automobile inspection Co., Ltd Li Jinlong 775581744 143 --
Inspection Equipment Co.,Ltd. subsidiary
Shenzhen Shiquan Industrial Co.,Ltd. fully-owned su Induatrial&supply and Fang
Shenzhen Business 200 Co., Ltd 192474111 150 --
bsidiary marketing Zhidong
（continued）
The amount of losses attributed to the minority
included in the
Holding Minority equity shareholders of a subsidiary exceeds the minority
Name of subsidiaries Voting proportion% consolidated finiancial Note
proportion% interest shareholders‘ portion of the equity of the
statements(yes or no)
subsidiary
Shenzhen Tellus Xinyongtong Automobile Development
Co. ,Ltd 100 100 Yes -- --
(The Xinyongtong)
Shenzhen Tefa Tellus Property Management Co.,Ltd(The
100 100 Yes -- --
Tellus Property)
Shenzhen Tefa Tellus Real Estate Co., Ltd(The Real Estate) 100 100 Yes -- --
Shenzhen Tellus Real Estate Exchange Co., Ltd(The
100 100 Yes -- --
Exchange)
Shenzhenxinyongtong Automobile Inspection Equipment
51 51 Yes 142 --
Co.,Ltd(The Inspection)
112
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
The amount of losses attributed to the minority
included in the
Holding Minority equity shareholders of a subsidiary exceeds the minority
Name of subsidiaries Voting proportion% consolidated finiancial Note
proportion% interest shareholders‘ portion of the equity of the
statements(yes or no)
subsidiary
Guangxi Tellus Automobile Service Co.,Ltd. 60 60 Yes 31 --
Shenzhen Dongchang Yongtong Automobile Inspection
95 95 Yes -18 --
Equipment Co.,Ltd.
Shenzhen Xinyongtong Dongxiao Automobile Inspection
95 95 Yes -8 --
Equipment Co.,Ltd.
Shenzhen Shiquan Industrial Co.,Ltd. 100 100 Yes -- --
113
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
（2）Subsidiaries acquired through business combination under common control （Expressed in 10,000 Yuan）
Balance of other items
Type of Registered Nature of Registered Type of Organization Real that in substance
Name of subsidiaries Business scope Legal person
subsidiaries place business capital Company code investment constitutes net
investment
Shenzhen Automobile Industry and Trading fully-owned su Automobile and
Shenzhen Business 5896 Co., Ltd Zhang Ruili 192194881 12625 --
Co.,Ltd.(The Automobile Industry and Trading） bsidiary accessories selling
Automobile
Shenzhen Tefa Huari Automobile Enterprise holding maintenance &
Shenzhen Service USD500 Co., Ltd Zhang Ruili 618830081 1922 --
Co.,Ltd. subsidiary production and sales
of accessories
fully-owned su
Shenzhen Zhongtian Industrial Co.,Ltd. Shenzhen Service 725 Leasing Co., Ltd Fang Zhidong 192182485 1071 --
bsidiary
holding
Shenzhen Huari Toyota Automobile Co.,Ltd. Shenzhen Business 200 Automobile selling Co., Ltd Li Jinlong 19237652X 181 --
subsidiary
Shenzhen Huari Anxin Automobile Inspection holding
Shenzhen Service 150 Automobile Inspection Co., Ltd Li Jinlong 781385280 150 --
Equipment Co.,Ltd. subsidiary
Shenzhen Automobile Industry supply and holding Automobile and
Shenzhen Service 1111 Co., Ltd Cen Weinin 192189193 648 --
marketing Co.,Ltd. subsidiary accessories selling
114
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
（Continued）
The amount of losses attributed to the
Included in the
Holding minority shareholders of a subsidiary
Name of subsidiaries Voting proportion% consolidated financial Minority equity interest Note
proportion% exceeds the minority shareholders‘
statements(yes or no)
portion of the equity of the subsidiary
Shenzhen Automobile Industry and Trading Co.,Ltd.(The
100 100 Yes
Automobile Industry and Trading） -- --
Shenzhen Tefa Huari Automobile Enterprise Co.,Ltd. 60 60 Yes 1,788 --
Shenzhen Zhongtian Industrial Co., Ltd(The Zhongtian) 100 100 Yes -- --
Shenzhen Huari Toyota Automobile Co.,Ltd. 60 60 Yes -297 --
Shenzhen Huari Anxing Automobile Inspection Equipment
100 100 Yes -- --
Co.,Ltd.
Shenzhen Automobile Industry supply and marketing
100 100 Yes -- --
Co.,Ltd.
115
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
3、The Company has no any entities with special purpose or that the Company has no any controlling
entities through the way of trustee or leasing.
4、There is no entity newly included and no longer included in the consolidation scope during the year.
Ⅶ、Notes to the consolidated financial statements
The notes below except special noting, the opening balance is 1st January 2012, the closing balance is
31st December 2012.Company‘s accounting year starts on 1 January and ends on 31 December.
1、Monetary assets
Closing balance Opening balance
Items Exchange RMB Exchange RMB
Original currency Original currency
rate equivalent rate equivalent
Cash 148,896.54 246,498.05
Include：RMB — — 141,052.63 — — 194,395.63
HKD 5,123.55 0.8109 4,154.43 29,172.55 0.8107 23,650.19
USD 577.00 6.2855 3,626.73 1,433.00 6.3009 9,029.19
YEN 860.00 0.0730 62.75 239,494.94 0.0811 19,423.04
Cash at bank 54,996,344.76 55,679,936.81
Include：RMB — — 54,996,344.76 — — 55,679,936.81
Other cash balances 290.09 138.60
Include：RMB — — 290.09 — — 138.60
Total 55,145,531.39 55,926,573.46
2、Accounts receivable
（1）Accounts receivable are analysed by categories as follows:
Closing balance
Items Book amount Provision for bad debts
Amount Ratio % Amount Ratio %
Receivables that are individually significant and impaired 20,131,654.12 40.47 20,131,654.12 100.00
The aging analysis of the receivables that are grouped and impaired 9,508,414.02 19.11 3,729,030.81 39.22
Receivables that are individually insignificant and impaired 20,106,006.63 40.42 20,106,006.63 100.00
Total 49,746,074.77 100.00 43,966,691.56 88.38
116
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
（Continued）
Opening balance
Items Book amount Provision for bad debts
Amount Ratio % Amount Ratio %
Receivables that are individually significant and impaired 20,131,654.12 40.86 20,131,654.12 100.00
The aging analysis of the receivables that are grouped and impaired 11,708,523.54 23.77 4,782,298.60 40.84
Receivables that are individually insignificant and impaired 17,424,882.53 35.37 17,424,882.53 100.00
Total 49,265,060.19 100.00 42,338,835.25 85.94
（2） The aging analysis of the receivables that are grouped and impaired is as follows:
Closing balance Opening balance
Duration
Amount Ratio % Amount Ratio %
Within 1 year 1,066,184.90 2.14 1,096,064.27 2.23
1 to 2 years 553,615.48 1.11 578,077.36 1.17
2 to 3 years 570,727.36 1.15 816,924.15 1.66
Over 3 years 47,555,547.03 95.60 46,773,994.41 94.94
Total 49,746,074.77 100.00 49,265,060.19 100.00
（3）Provision for bad debts
① as at 31 December 2012, Receivables that are individually significant and impaired are analysed as
follows:
Provision for bad Ratio
Name of companies Book amount Reason
debts %
Shenzhen Jinlu trade Co.,Ltd. 9,846,607.00 9,846,607.00 100% Withdraw uncertain
Guangdong Zhanjiang Sanxing antomobile Aging long，not expected to
4,060,329.44 4,060,329.44 100%
Co.,Ltd. withdraw
Huizhou Jiandacheng Co.,Ltd. 2,021,657.70 2,021,657.70 100% Not expected to withdraw
Aging long，not expected to
Jianglin automobile factory 1,191,059.98 1,191,059.98 100%
withdraw
Aging long，not expected to
Guangdong Province commodity group 1,862,000.00 1,862,000.00 100%
withdraw
Aging long，not expected to
Yangjiang Automobile trade Co.,Ltd. 1,150,000.00 1,150,000.00 100%
withdraw
117
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Total 20,131,654.12 20,131,654.12 100%
② The aging analysis of the receivables :
Closing balance Opening balance
Duration Book amount Provision for bad Book amount Provision for
Amount Ratio % debts Amount Ratio % bad debts
Within 1 year 1,066,184.90 11.22 -- 1,096,064.27 9.36 --
1 to 2 years 553,615.48 5.82 26,800.59 578,077.36 4.94 28,513.87
2 to 3 years 570,727.36 6.00 114,146.65 816,924.15 6.98 163,384.83
Over 3 years 7,317,886.28 76.96 3,588,083.57 9,217,457.76 78.72 4,590,399.90
Total 9,508,414.02 100.00 3,729,030.81 11,708,523.54 100.00 4,782,298.60
③As at 31 December 2012, Receivables that are individually insignificant and impaired are analysed
as follows:
Ratio % Provision for bad
Name of companies Book amount Reason
debts
Dadong 801,380.16 100% 801,380.16 Aging long，not expected to withdraw
Qinglin 695,848.00 100% 695,848.00 Aging long，not expected to withdraw
Shanghai Automobile industry supply
641,341.90 100% 641,341.90
and sales Co.,Ltd. Aging long，not expected to withdraw
Zhongqi Trading 558,000.00 100% 558,000.00 Aging long，not expected to withdraw
Guangdong Province commodity group
395,400.00 100% 395,400.00
Automobile trade branch Aging long，not expected to withdraw
Yunnan Lanjian 389,640.00 100% 389,640.00 Aging long，not expected to withdraw
Guangdong Province commodity trade
387,000.00 100% 387,000.00
center Aging long，not expected to withdraw
Others 16,237,396.57 100% 16,237,396.57 Aging long，not expected to withdraw
Total 20,106,006.63 100% 20,106,006.63
（4）During the reporting period, no receivables were canceled after verification.
118
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
（5）As at 31 December 2012, no balances included in above accounts receivable are due from the
shareholders of the Company who hold over 5% shares with voting rights.
（6）As at 31 December 2012, the company‘s five largest accounts receivable balances are analysed
as follows:
Relationship with the % of total accounts
Name of companies Amount Duration
company receivable balance
Shenzhen Jinlu trade Co.,Ltd. Non-related party 9,846,607.00 Over 5 years 19.79
Guangdong Zhanjiang Sanxing automobile Co.,Ltd. Non-related party 4,060,329.44 Over 5 years 8.16
Huizhou Jiandacheng Co.,Ltd. Non-related party 2,021,657.70 Over 5 years 4.06
Guangdong Province commodity group Non-related party 1,862,000.00 Over 5 years 3.74
Jianglin automobile factory Non-related party 1,191,059.98 Over 5 years 2.39
Total 18,981,654.12 38.14
（7）Accounts receivable and advance money due from related parties see NoteⅧ.6.(1) for details.
3、Other receivables
（1）Accounts receivable are analysed by categories as follows:
Closing balance
Items Book amount Provision for bad debts
Amount Ratio % Amount Ratio %
Other receivables that are individually significant and impaired 36,436,823.34 58.18 36,436,823.34 100.00
The aging analysis of the other receivables that are grouped and impaired 17,285,866.44 27.60 4,991,821.39 28.88
Other receivables that are individually insignificant and impaired 8,905,637.07 14.22 8,905,637.07 100.00
Total 62,628,326.85 100.00 50,334,281.80 80.37
（Continued）
Opening balance
Items Book amount Provision for bad debts
Amount Ratio % Amount Ratio %
Other receivables that are individually significant and impaired 36,437,380.71 61.34 36,437,380.71 100.00
The aging analysis of the other receivables that are grouped and impaired 16,893,445.37 28.44 5,850,021.85 34.63
Other receivables that are individually insignificant and impaired 6,076,219.82 10.22 6,076,219.82 100.00
119
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Opening balance
Items Book amount Provision for bad debts
Amount Ratio % Amount Ratio %
Total 59,407,045.90 100.00 48,363,622.38 81.41
（2）The aging analysis of the other receivables that are grouped and impaired is as follows:
Closing balance Opening balance
Duration
Amount Ratio % Amount Ratio %
Within 1 year 4,113,751.71 6.56 3,781,218.18 6.37
1 to 2 years 3,059,600.15 4.89 771,779.12 1.30
2 to 3 years 692,631.80 1.11 959,348.32 1.61
Over 3 years 54,762,343.19 87.44 53,894,700.28 90.72
Total 62,628,326.85 100.00 59,407,045.90 100.00
（3）Provision for bad debts
① As at 31 December 2012, other receivables that are individually significant and impaired are
analysed as follows:
Provision for bad Ratio
Name of companies Book amount Reason
debts %
Zhongqi Huanan Automobile sales Co.,Ltd. 9,832,956.37 9,832,956.37 100% Aging long，not expected to withdraw
Shenzhen Nanfang industry and trade Aging long，not expected to withdraw
7,359,060.75 7,359,060.75 100%
Co.,Ltd.
Win in the case, this company do not
ShenZhen ZhongHao (Group) Co.,Ltd. 5,000,000.00 5,000,000.00 100%
have asset to pay.
Jinbeili Household Company 2,706,983.51 2,706,983.51 100% Aging long，not expected to withdraw
Shenzhen Xinxintai trade Co.,Ltd. 2,418,512.90 2,418,512.90 100% Unwithdraw
Shenzhen Petrochemical Group 1,895,155.10 1,895,155.10 100% not expected to withdraw
Huatong casing Co.,Ltd. 1,212,373.79 1,212,373.79 100% Aging long，not expected to withdraw
Heyuan dongfeng 930,000.00 930,000.00 100% Aging long，not expected to withdraw
Shenzhen South Great Wall investment 819,460.91 819,460.91 100% Withdraw uncertain
120
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Provision for bad Ratio
Name of companies Book amount Reason
debts %
Co.,Ltd.
Shenzhen Xiandao chemical materials Aging long，not expected to withdraw
708,072.26 708,072.26 100%
Co.,Ltd.*2
Shenzhen Baodong real estateCo.,Ltd. 609,773.00 609,773.00 100% Aging long，not expected to withdraw
Others 2,944,474.75 2,944,474.75 100% Aging long，not expected to withdraw
Total 36,436,823.34 36,436,823.34 100%
②The aging analysis of the other receivables that are grouped and impaired is as follows:
Closing balance Opening balance
Duration Book amount Provision for bad Book amount Provision for bad
amount ratio（%） debts amount ratio（%） debts
Within 1 year 4,113,751.71 23.80 -- 3,781,218.18 22.38 --
1 to 2 years 3,059,600.15 17.70 145,932.51 771,779.12 4.57 36,724.11
2 to 3 years 692,631.80 4.01 139,526.36 959,348.32 5.68 143,949.19
Over 3 years 9,419,882.78 54.49 4,706,362.52 11,381,099.75 67.37 5,669,348.55
Total 17,285,866.44 100.00 4,991,821.39 16,893,445.37 100.00 5,850,021.85
③ As at 31 December 2012, other receivables that are individually insignificant and impaired are
analysed as follows:
Provision for bad
Name of companies Book amount ratio（%） Reason
debts
Huangshengchang 463,912.46 100.00 463,912.46 Aging long，not expected to withdraw
ABC north of renming branch 247,219.98 100.00 247,219.98 Aging long，not expected to withdraw
Staffs‘purchasing for real estate 217,892.57 100.00 217,892.57 Aging long，not expected to withdraw
Liang Rrongde 182,133.26 100.00 182,133.26 Aging long，not expected to withdraw
Shensha Trade 134,835.20 100.00 134,835.20 Aging long，not expected to withdraw
Chengdu Aircraft Design and Research
130,000.00 100.00 130,000.00 Aging long，not expected to withdraw
Institute
Others 7,529,643.6 100.00 7,529,643.6 Aging long，not expected to withdraw
Total 8,905,637.07 8,905,637.07
121
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
（4） During the reporting period, no other receivables were canceled after verification.
（5）As at 31 December 2012, no balances included in above other receivable are due from the
shareholders of the Company who hold over 5% shares with voting rights.
（6）As at 31 December 2012, the company‘s five largest other receivable balances are analysed as
follows:
122
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Relationship with the % of total other
Name of companies Amount Duration
company receivable balance
Zhongqi Huanan Automobile sales Co.,Ltd. Non-related party 9,832,956.37 Over 3 years 15.70
Shenzhen Nanfang industry and trade
Non-related party 7,359,060.75 Over 3 years 11.75
Co.,Ltd.
ShenZhen ZhongHao (Group) Co.,Ltd. Non-related party 5,000,000.00 Over 3 years 7.98
Shenzhen kaifeng Automobile Co., Ltd. Non-related party 4,413,728.50 Over 3 years 7.05
Shenzhen Junfengcheng investment
Non-related party 3,643,360.00 1-2years 5.82
decelopment Co.,Ltd.
Total 30,249,105.62 48.30
（7）Other receivable and prepayments due from related parties see NoteⅧ、.6.(1) for details.
4、Advance to suppliers
（1）The aging of advance to suppliers is analysed below:
Closing balance Opening balance
Duration
Amount Ratio % Amount Ratio %
Within 1 year 8,157,751.52 96.50 12,487,409.73 96.40
1 to 2 years 158,623.00 1.88 282,874.86 2.18
2 to 3 years 126,153.94 1.49 124,553.10 0.96
Above 3 years 10,733.10 0.13 59,010.79 0.46
Total 8,453,261.56 100.00 12,953,848.48 100.00
（2） As at 31 December 2012, the company‘s several larger advance to suppliers balances are
analysed as follows:
Relationship with the Time of
Name of companies Amount Unsettled reason
company prepayment
Relevant goods or
FAW Toyota Motor Sales Co., Ltd. supplier 4,371,361.91 2012 services
were not provided
Relevant goods or
Toyota Motor (China)Investment Co., Ltd. supplier 3,598,839.61 2012 services
were not provided
Total 7,970,201.52
（2）As at 31 December 2012, no balances included in above advance to suppliers are due from the
123
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
shareholders of the Company who hold over 5% shares with voting rights.
5、Inventories
（1）Categories of inventory
Closing balance
Items
Amount Provision for impairment Net book value
Raw materials 15,257,453.44 14,771,812.17 485,641.27
Consumables 27,015.13 -- 27,015.13
Stock products 61,784,214.30 14,483,018.50 47,301,195.80
Total 77,068,682.87 29,254,830.67 47,813,852.20
（Continued）
Opening balance
Items
Amount Provision for impairment Net book value
Raw materials 15,302,401.53 11,519,156.61 3,783,244.92
Consumables 26,110.13 -- 26,110.13
Stock products 40,332,010.16 13,923,018.50 26,408,991.66
Total 55,660,521.82 25,442,175.11 30,218,346.71
（2）Provision for impairment
Current year Current year decreases
Items Opening balance Closing balance
provisions Reversals Written-off
Raw materials 11,519,156.61 3,252,655.56 -- -- 14,771,812.17
Consumables -- -- -- -- --
Stock products 13,923,018.50 560,000.00 -- -- 14,483,018.50
Total 25,442,175.11 3,812,655.56 -- -- 29,254,830.67
（3）Reasons for reversal and written-off of provision
Reason for reverse inventory % of total reversal amount
Items Basis for inventory provision
provision in current year balance
net realizable value lower than
Raw materials
inventory cost
Stock products net realizable value lower than
124
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Reason for reverse inventory % of total reversal amount
Items Basis for inventory provision
provision in current year balance
inventory cost
6、Other current assets
Item Closing balance Opening balance
Deductible input tax 7,495,557.97 --
Total 7,495,557.97 --
7、Available-for-sale financial assets
Items 31 December 2012 31 December 2011
Available-for-sale equity investments 1,591,906.25 1,374,249.25
include：Shares of China Merchants Bank 1,591,906.25 1,374,249.25
less：Provision for Bad Debt -- --
Total 1,591,906.25 1,374,249.25
8、Held-to-maturity investments
Item Closing balance Opening balance
Treasury Securities 120,000.00 121,300.00
Less：Provision for Bab Debt 20,000.00 --
Total 100,000.00 121,300.00
9、Long-term receivables
Item Closing balance Opening balance
Other：
Long-term receivables which essentially contribute to the net
2,179,203.68 2,341,645.69
investment of invested entity
Include：Shenzhen Tellus Automobile Services Chain Co.,Ltd.* 2,179,203.68 2,341,645.69
Total Book Balance 2,179,203.68 2,341,645.69
Less：Provision for Bab Debt 2,179,203.68 --
Book value -- 2,341,645.69
*Note：This entity is a related entity of our company, the non-operating receivable essentially contribute
to the net investment of invested entity .Till the end of 2012, the total liabilities exceed total asset of
Shenzhen Tellus Automobile Services Chain Co.,Ltd., the owner‘s equity is negative. The Company
125
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
have decreased book value of long-term equity investment in Shenzhen Tellus Automobile Services
Chain Co.,Ltd. to zero. During the reporting period, the Company decided to quit joint stock running and
clear equity in Shenzhen Tellus Automobile Services Chain Co.,Ltd. Base on the above condition, bad
debt provision has been changed in full amount of relevant long-term equity investment.
10、Long-term equity investments
（1）Disclosure by category
Item Opening balance Decrease Increase Closing balance
Investment in joint ventures 34,007,714.13 33,969,318.69 -- 67,977,032.82
Investment in associates 99,170,438.81 9,074,302.58 -- 108,244,741.39
Other equity investments 41,736,238.39 -- -- 41,736,238.39
Less: Impairment provision 31,257,252.62 127,836.59 -- 31,385,089.21
Total 143,657,138.71 42,915,784.68 -- 186,572,923.39
（2）Details of long-term equity investments
Measurement Cost of
Investee Opening balance Movement Closing balance
method investment
Shenzhen Tellus Jimeng Investment
Equity method 61,852,480.00 25,433,598.67 33,817,001.47 59,250,600.14
Co.,Ltd.*Note②
Shenzhen Tellus Xing Investment Co.,Ltd. Equity method 13,600,000.00 8,574,115.46 152,317.22 8,726,432.68
Shenzhen Xing Long Mechanical Models
Equity method 2,400,000.00 6,240,588.58 -262,333.84 5,978,254.74
Co.,Ltd.
Shenzhen Tellus Automobile Services Chain
Equity method 800,000.00 -- -- --
Co.,Ltd.
Shenzhen Ren fu Tellus Automobiles Services
Equity method 10,500,000.00 65,767,551.50 -999,920.25 64,767,631.25
Co.,Ltd.
Shenzhen Automobile Industrial Import and
Equity method 4,737,500.00 8,252,899.91 -7,592.87 8,245,307.04
Export Co.,Ltd.
Shenzhen Dongfeng Automobile Co.,
Equity method 23,277,044.85 17,458,319.96 10,356,945.10 27,815,265.06
Ltd.*Note③
Shenzhen Xinyongtong Tenology Co.,Ltd. Equity method 496,000.00 568,705.88 -25,799.64 542,906.24
Shenzhen Xinyongtong Pump and
Equity method 155,000.00 127,836.59 -- 127,836.59
Environmental Protection Co.,Ltd
Shenzhen Xinyongtong Automobile Service Equity method 300,000.00 217,902.03 1,929.61 219,831.64
126
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Measurement Cost of
Investee Opening balance Movement Closing balance
method investment
Co.,Ltd.
Shenzhen Xinyongtong Dongxiao Automobile
Equity method 175,000.00 175,593.10 35.83 175,628.93
Parts Sales Co.,Ltd.
Shenzhen Xinyongtong Xinda Inspection
Equity method 400,000.00 312,423.19 10,928.42 323,351.61
Eqiupment Co.,Ltd
Shenzhen Xinyongtong Consulting Co.,Ltd Equity method 48,000.00 48,618.07 110.22 48,728.29
Shenzhen Tellus Xinyongtong Automobiles
Equity method 504,000.00 -- -- --
Services Co.,Ltd.
China Perfect Machinery Industry Co.,Ltd. Cost method 10,176,617.20 10,176,617.20 -- 10,176,617.20
Hunan Changyang Industrial Co.,Ltd.*Note① Cost method 6,900,000.00 1,810,540.70 -- 1,810,540.70
Shenzhen Hanli Hi-technology Ceramics
Cost method 3,466,000.00 1,956,000.00 -- 1,956,000.00
Co.,Ltd. *Note①
Shenzhen Jiecheng Electronic
Cost method 3,150,000.00 3,225,000.00 -- 3,225,000.00
Co.,Ltd.*Note①
Shenzhen Jingwei Industrial Co.,Ltd. Cost method 4,000,000.00 4,000,000.00 -- 4,000,000.00
Shenzhen Moscow 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 Xiandao chemical materials
Cost method 7,256,401.38 4,751,621.62 -- 4,751,621.62
Co.,Ltd.*Note①
Shenzhen Petroleum & Chemical
Cost method 700,000.00 700,000.00 -- 700,000.00
(Group)Co.,Ltd.
Nanfang Automobile Repairing center *Note① Cost method 6,700,000.00 6,700,000.00 -- 6,700,000.00
China Automobile industry shenzhen trading
Cost method 400,000.00 400,000.00 -- 400,000.00
Co.,Ltd. *Note①
Shenzhen General Standard software
Cost method 500,000.00 500,000.00 -- 500,000.00
Co.,Ltd.*Note①
Shenzhen torch spark plug Industrial
Cost method 17,849.20 17,849.20 -- 17,849.20
Co.,Ltd.*Note①
Zhongqi South China automobile sales
Cost method 2,250,000.00 2,250,000.00 -- 2,250,000.00
Co.,Ltd. *Note①
Electrombile project Cost method 600,000.00 600,000.00 -- 600,000.00
127
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Measurement Cost of
Investee Opening balance Movement Closing balance
method investment
Shenzhen Jinhe standard molds Co.,Ltd. Cost method 453,440.00 453,440.00 -- 453,440.00
Zhongqi Training center Cost method 600,000.00 600,000.00 -- 600,000.00
Shenzhen Bailiyuan Power Co.,Ltd.*Note① Cost method 1,320,000.00 1,320,000.00 -- 1,320,000.00
Mililong（Zeng Wengang） Cost method 162,000.00 162,000.00 -- 162,000.00
Shenzhen Yiming Automobile Trading Co.,Ltd. Cost method 200,001.10 200,001.10 -- 200,001.10
Shenzhen Bisike Machine Co.,Ltd. Cost method 302,368.57 302,368.57 -- 302,368.57
Hongkong Rishen International Co.,Ltd. Cost method 145,800.00 145,800.00 -- 145,800.00
Total 170,010,502.30 174,914,391.33 43,043,621.27 217,958,012.60
（Continued）
Reason for Impairment
Sharehol
Voting right disagreement between Impairment provision Cash dividend
Investee ding
(%) shareholding and provision recognised in in current year
(%)
voting right current year
Shenzhen Tellus Jimen Investment Co.,Ltd. 50 50 -- -- --
Shenzhen Tellus Xing Investment Co.,Ltd. 50 50 -- -- --
Shenzhen Xing Long Mechanical Models
30 30 -- -- 105,000.00
Co.,Ltd.
Shenzhen Tellus Automobile Services
40 40 -- -- --
Chain Co.,Ltd.
Shenzhen RenFu Tellus Automobiles
35 35 -- -- 3,500,000.00
Services Co.,Ltd.
Shenzhen Automobile Industrial Import and
35.75 35.75 -- -- --
Export Co.,Ltd.
Shenzhen Dongfeng Automobile Co., Ltd. 25 25 -- -- --
Shenzhen Xinyongtong Technology
31 31 -- -- --
Tenology Co.,Ltd.
128
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Reason for Impairment
Sharehol
Voting right disagreement between Impairment provision Cash dividend
Investee ding
(%) shareholding and provision recognised in in current year
(%)
voting right current year
Shenzhen Xinyongtong Pump and
31 31 127,836.59 127,836.59 --
Environmental Protection Co.,Ltd.
Shenzhen Xinyongtong Automobile Service
30 30 -- -- --
Co.,Ltd.
Shenzhen Xinyongtong Dongxiao
35 35 -- -- --
Automobile Service Co.,Ltd.
Shenzhen Xinyongtong Xinda Inspection
40 40 -- -- --
Eqiupment Co.,Ltd.
Shenzhen Xinyongtong consulting Co.,Ltd. 30 30 -- -- --
Shenzhen Tellus Xinyongtong Automobile
18 18 -- -- --
Service Co., Ltd.
China Pufa Machinery Industry Co., Ltd. 5.30 5.30 -- -- 601,902.79
Hunan Changyang Industrial
36.55 36.55 1,810,540.70 -- --
Co.,Ltd.*Note①
Shenzhen Hanli Hi-technology Ceramics
80 80 1,956,000.00 -- --
Co.,Ltd.*Note①
Shenzhen Jiecheng Electronic
45 45 3,225,000.00 -- --
Co.,Ltd.*Note①
Shenzhen Jingwei Industrial Co.,Ltd. 12.50 12.50 4,000,000.00 -- --
Shenzhen Moscow Co.,Ltd. 7.00 7.00 825,000.00 -- --
Wuhan Weite Hotel 640,000.00 -- --
Shenzhen Xiandao chemical materials
40 40 4,751,621.62 -- --
Co.,Ltd.*Note①
Shenzhen Petroleum & Chemical Co.,Ltd. 10 万股 10 万股 700,000.00 -- --
Nanfang Automobile Repairing center
100 100 6,700,000.00 -- --
*Note①
China Automobile industry shenzhen
40 40 400,000.00 -- --
trading Co.,Ltd. *Note①
Shenzhen General Standard software
25 25 500,000.00 -- --
Co.,Ltd.*Note①
129
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Reason for Impairment
Sharehol
Voting right disagreement between Impairment provision Cash dividend
Investee ding
(%) shareholding and provision recognised in in current year
(%)
voting right current year
Shenzhen torch spark plug Industrial
49 49 17,849.20 -- --
Co.,Ltd.*Note①
Zhongqi South China automobile sales
49 49 2,250,000.00 -- --
Co.,Ltd.*Note①
Electrombile project 11.10 11.10 600,000.00 -- --
Shenzhen Jinhe Standard Model Co.,Ltd. 15.00 15.00 453,440.00 -- --
Zhongqi Training center 6.25 6.25 600,000.00 -- --
Shenzhen Bailiyuan Power Co.,Ltd.*
25.00 25.00 1,320,000.00 -- --
Note①
Mililong（Zeng Wengang） 6.25 6.25 162,000.00 -- --
Shenzhen Yiming Automobile Trading
200,001.10 -- --
Co.,Ltd.
Shenzhen Bisike Machine Transportation
7.5 7.5 -- -- --
Co.,Ltd.
Hongkong Rishen National Co.,Ltd. 7.5 7.5 145,800.00 -- --
Total 31,385,089.21 127,836.59 4,206,902.79
*Note①These companies have terninated their business, and the Tellus does not have signficant
influence on them, accrued impairment provision on full amount.
* Note②The company increase capital to Shenzhen Tellus Jimeng Investment Co., Ltd. by RMB
335million based on the holding shares proportion.
* Note③Dongfeng Automobile (Huizhou)Co., Ltd.(short as ―the Dongfeng Huizhou Co., Ltd.‖)
increased capital to the Tellus‘s associate(Shenzhen Dongfeng Automobile Co.,Ltd. by 350Million in
2011. The industry and commerce change procedure was finished in April 26, 2011. According the the
resolution of Shareholders' Meeting of Shenzhen Dongfeng Automobile Co., Ltd. After the procedure of
increase capital completed, the Dongfeng Huizhou Co., Ltd. sold all held shares to th original two
shareholders of Shenzhen Dongfeng Automobile Co., Ltd. those two shareholders‘ shareholding ratio
recover to 75% and 25%, the total transfer price is 350million. The Dongfeng Huizhou CO., Ltd. do not
hold shares anymore after the transformation, at the meantime, before the transformation, the two
original shareholders possess the right based on the original shareholding ratio, the Dongfeng
130
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Huizhou Co., Ltd. do not possess any right. The purpose of the Dongfeng Huizhou participate the
capital increase of Shenzhen Dongfeng Automobile Co., Ltd. is not possess the shareholding right of
Shenzhen Dongfeng Automobile Co., Ltd. in a long-term.
In2012， the subsidiary(Auotmobile industy and Trading Co., Ltd.) acquired 25% shareholding of
Shenzhen Dongfeng Co., Ltd. that held by Dongfeng Huizhou Co., Ltd. before by 87.5 million, the
procedure of industry and commerce change registeration was finished in Dec.12, 2012. The Shenzhen
Dongfeng Automobile Co., Ltd transfer the capital reserve and retained earnings to capital by
20,000,000.00, the total amount of capital increased in Shenzhen Automobile Industry and Trading
Controlling Company is RMB 5,000,000.00，the shareholding ratio remain constant.
（3）restriction on transfermation of financial resource to investee.
As above, the Auotmobile industy and Trading Co., Ltd. acquired 25% shareholding of Shenzhen
Dongfeng Co., Ltd. that held by Dongfeng Huizhou Co., Ltd. before by 87.5 million， the price of stock
right acquisition have not pay yet. The Automobile Industry and Trading Co., Ltd. 、Huizhou Dongfeng
Co., Ltd. and Dongfeng Automobile Co., Ltd. signed the 《Debt and credit conversion agreement》,
Huizhou Dongfeng Co., Ltd. convert the creditor‘s right to Dongfeng Automobile Co., Ltd.
The Automobile Industy and Trading Co., Ltd. signed the 《Debt repayment agreement》and the
supplemental agreement, agreed that：①the amount of 87.5million repaid from Jan.18, 2012, payment
in full by the Automobile Industry and Trading Co., Ltd. in Jan. 18, 2019.②From Dec. 12, 2012,
counting the overdue surcharge of RMB 5,630,155.88 principal (87.5million deduct the amount of
retained earnings transferd to registerd capital-the Automobile Industry and Trading Co., Ltd. obtained
RMB 3,119,844.12 retained earnings，Calculation of once a year，by the interest published by the
People‘s bank in Dec. 31， 2011.③The Automobile Industry and Trading Co., Ltd. pay off the dabts
and surcharge by the retained earnings in Shenzhen Dongfeng Co., Ltd. Pay the surcharge first, the
remains pay off the debts.
（4）Unrecognized investment losses
2012 2011
Accmuated
Investee Unrecognized Unrecognized unrecognized
unrecognized
investment investment losses investment losses investment losses
losses in 2012 in 2011
Shenzhen Tellus Xinyongtong Automobile Service
98,187.75 623,557.79 123,566.89 525,370.04
Co., Ltd.
Total 98,187.75 623,557.79 123,566.89 525,370.04
（5）Details of Joint ventures and Associates
131
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
① Details of Joint ventures
Holding
Type of Registere Voting proportion
Investee Legal person Nature of business Registered capital proportion
company d location (%)
(%)
Shenzhen Tellus Focus on industy、
Shenzhe
Jimeng Investment Limited liablity Zhang Ruili property management 123,704,960.00 50 50
n
Co.,Ltd. and lease
Focus on industy、
Shenzhen Tellus Xing Shenzhe property management
Limited liablity Lou Bojun 27,200,000.00 50 50
Investment Co.,Ltd. n and buying and selling
of Automobile parts
（Continued）
Total asset at the incidence
end Total liability at Net asset at the Total operating Net profit in relation Organization
Investee
the end end revenue in 2012 2012 code
Shenzhen Tellus
Subsidiary
Jimeng Investment 127,121,626.90 8,620,426.64 118,501,200.26 -- 634,002.94 670026381
Co.,Ltd. associate
Shenzhen Tellus
Subsidiary
Xing Investment 27,726,349.65 278,556.86 27,447,792.79 1,200,726.60 -6,903.17 682008316
Co.,Ltd. associate
132
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
② Details of Associates
Holding
Registered Voting proportion
Investee Type of company Legal person Nature of business Registered capital proportion
location (%)
(%)
Shenzhen Xing Long Mechanical
Limited liablity Shenzhen Zhang Ruili Real estate lease 27,633,300.00 30 30
Models Co.,Ltd.
Shenzhen Tellus Automobile Services
Limited liablity Shenzhen Wu Yonggang Automobile Matainance and lease 2,000,000.00 40 40
Chain Co.,Ltd.
Shenzhen Rem Fu Tellus
Limited liablity Shenzhen Tan Yanling Sales and repair of Benz 30,000,000.00 35 35
Automobiles Services Co.,Ltd.
Shenzhen Automobile Industrial
Limited liablity Shenzhen HuangWeiqiang Import and export of Automobile Parts 13,250,000.00 35.75 35.75
Import and Export Co.,Ltd.
Shenzhen Dongfeng Automobile Co.,
Limited liablity Shenzhen Xue Tiansheng Manufacturing and repairing automobile 100,000,000.00 25 25
Ltd.
Shenzhen Xinyongtong Inspection
Limited liablity Shenzhen Li Jinlong Technique inspection of motor vehicle 1,600,000.00 31 31
Tenology Co.,Ltd.
Shenzhen Xinyongtong Pump and Consulting of Pump repair teconology and environmental
Limited liablity Shenzhen Lan Zhongxin 500,000.00 31 31
Environmental Protection Co.,Ltd. teconology
Shenzhen Xinyongtong Automobile Automobile Matainance ； automobile beauty and sales of
Limited liablity Shenzhen Li Jianjun 1,000,000.00 30 30
Service Co.,Ltd. automobile parts
Shenzhen Xinyongtong Dongxiao Second type automobile Matainance and sales of automobile
Limited liablity Shenzhen Li Jianjun 500,000.00 35 35
Automobile Service Co., Ltd. parts
Shenzhen Xinyongtong Xinda
Limited liablity Shenzhen Huang Peibo Develop and sales of equipment inspection teconology 1,000,000.00 40 40
Inspection Eqiupment Co.,Ltd.
133
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Holding
Registered Voting proportion
Investee Type of company Legal person Nature of business Registered capital proportion
location (%)
(%)
Shenzhen Xinyongtong Xinda Test Automobile management teconology consult ； Internet
Limited liablity Shenzhen Lan Zhongxin 142,080.00 30 30
Eqiupment Co.,Ltd. maintenance
Shenzhen Tellus Xinyongtong
Limited liablity Shenzhen Li Jinlong Automobile Matainance 2,800,000.00 18 18
Automobiles Services Co.,Ltd.
（Continued）
Total asset at the incidence
Total liability at the Net asset at the Total operating revenue in Net profit in Organization
Investee end relation
end end 2012 2012 code
Shenzhen Xing Long Mechanical Models Co.,Ltd. 51,418,657.43 19,439,520.61 31,979,136.82 -- -524,446.14 associate 192172420
Shenzhen Tellus Automobile Services Chain Co.,Ltd. 1,819,092.19 9,623,767.76 -7,804,675.57 1,663,481.89 -306,105.02 associate 767583926
Shenzhen Ren Fu Tellus Automobiles Services Co.,Ltd. 510,998,649.00 325,948,274.00 185,050,375.00 1,981,963,848.00 7,143,085.00 associate 774131792
Subsidiary
Shenzhen Automobile Industrial Import and Export Co.,Ltd. 192190506
45,490,562.01 22,426,766.10 23,063,795.91 23,734,006.34 38,639.20 associate
Subsidiary
Shenzhen Dongfeng Automobile Co., Ltd. 19218689X
283,598,462.78 159,843,527.87 121,414,866.64 237,664,777.99 6,427,780.39 associate
Subsidiary
Shenzhen Xinyongtong Tenology Co.,Ltd. 674800717
2,745,394.18 1,064,083.74 1,681,310.44 2,509,101.97 -83,224.66 associate
Subsidiary
Shenzhen Xinyongtong Pump and Environmental Protection Co.,Ltd. 674823599
422,655.80 86,243.66 336,412.14 -- -- associate
Shenzhen Xinyongtong Automobile Service Co.,Ltd. 3,112,168.83 2,379,396.70 732,772.13 7,7 09,609.02 6,432.04 Subsidiary 68376659X
134
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Total asset at the incidence
Total liability at the Net asset at the Total operating revenue in Net profit in Organization
Investee end relation
end end 2012 2012 code
associate
Subsidiary
Shenzhen Tellus Xinyongtong Automobiles Services Co.,Ltd. 683763583
2,920,818.85 2,419,021.92 501,796.93 2,525,588.18 102.37 associate
Subsidiary
Shenzhen Xinyongtong Xinda Inspection Eqiupment Co.,Ltd. 678587925
4,294,682.46 3,486,303.43 808,379.03 5,225,207.79 27,321.06 associate
Subsidiary
Shenzhen Xinyongtong consulting Co.,Ltd. 685393889
336,510.72 174,441.51 162,069.21 33,532.00 367.39 associate
Subsidiary
Shenzhen Tellus Xinyongtong Automobiles Services Co.,Ltd. 685350360
2,626,879.39 4,334,931.29 -1,708,051.90 4,359,682.57 -654,584.98 associate
（6）Details of impairment provision for long-term equity investments
Item Opening balance Increase Decrease Closing balance
Investment in associates
Shenzhen Xinyongtong Pump and Environmental Protection Co.,Ltd.* -- 127,836.59 -- 127,836.59
Other long-term equity investments
Shenzhen Xiandao chemical materials Co.,Ltd. 4,751,621.62 -- -- 4,751,621.62
Hunan Changyang Industrial Co.,Ltd. 1,810,540.70 -- -- 1,810,540.70
Shenzhen Hanli Hi-teconology ceramics Co.,Ltd. 1,956,000.00 -- -- 1,956,000.00
135
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Item Opening balance Increase Decrease Closing balance
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 Moscow Co.,Ltd. 825,000.00 -- -- 825,000.00
Wuhan Weite Hotel 640,000.00 -- -- 640,000.00
Shenzhen Petroleum & Chemical(group) Co.,Ltd. 700,000.00 -- -- 700,000.00
Nanfang Automobile Repairing center 6,700,000.00 -- -- 6,700,000.00
Shenzhen General Standard software Co.,Ltd. 500,000.00 -- -- 500,000.00
Shenzhen torch spark plug Industrial Co.,Ltd. 17,849.20 -- -- 17,849.20
Zhongqi South China automobile sales 2,250,000.00 -- -- 2,250,000.00
China Automobile industry shenzhen trading Co.,Ltd. 400,000.00 -- -- 400,000.00
Electrombile Project 600,000.00 -- -- 600,000.00
Shenzhen Jinhe standard molds Co.,Ltd. 453,440.00 -- -- 453,440.00
Zhongqi Training center 600,000.00 -- -- 600,000.00
Shenzhen Bailiyuan Power Co.,Ltd. 1,320,000.00 -- -- 1,320,000.00
Mililong（Zeng Wengang） 162,000.00 -- -- 162,000.00
Shenzhen Yiming Automobile Trading Co.,Ltd. 200,001.10 -- -- 200,001.10
Hongkong Rishen National Co.,Ltd. 145,800.00 -- -- 145,800.00
136
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Item Opening balance Increase Decrease Closing balance
Total 31,257,252.62 127,836.59 -- 31,385,089.21
137
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
*Note ： Shenzhen Xinyongtong Pump and Environmental Protection Co., Ltd. held the
shareholders‘meeting in March 1, 2012, resolute to winding process. The company recognizes
impairment provison by the full invested long-term equity investment amount on Shenzhen Xinyongtong
Pump and Environmental Protection Co., Ltd.
11、Investment properties
（1）Details of investment properties
Item Opening balance Increase decrease Ending balance
Investment properties subsequently measure
108,421,268.41 -- 11,754,696.8 96,666,571.61
by cost method
less ： impairment provision for investment
-- -- -- --
properties
Total 108,421,268.41 -- 11,754,696.8 96,666,571.61
（2）Investment properties measure by cost method
Item Opening balance Increase decrease Ending balance
1、Total historical cost 181,002,443.71 -- 16,695,155.19 164,307,288.52
Houses and buildings 181,002,443.71 -- 16,695,155.19 164,307,288.52
2 、 Total accumulated depreciation and
72,581,175.30 5,235,624.58 10,176,082.97 67,640,716.91
amortization
Houses and buildings 72,581,175.30 5,235,624.58 10,176,082.97 67,640,716.91
3、Total impairment provison -- -- -- --
Houses and buildings -- -- -- --
4、Total book value 108,421,268.41 96,666,571.61
Houses and buildings 108,421,268.41 96,666,571.61
Note ：① The depreciation for current year is RMB 5,235,624.58.
②In 2012，the subsidiary(automobile Industry and Trading Co., Ltd.) disposed some investment
properties (book value total in RMB2,168,080.91,historical cost is RMB 2,781,543.29), disposal
revenue is RMB 15,192,192.09.
③In 2012,the subsidiary(Zhongtian Co., Ltd.) renovates the investment properties amounting to RMB
4,350,991.31 in book value, RMB13,913,611.90 in historical cost, relate asset transferd to construction
in progress.
④Approved by the general meeting, investment properties amounting to RMB 1,219,032.79 in book
138
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
value(historical cost is RMB 1,795,398.44) were signed a sales contract, the full amount received in
advance amounting to RMB 9,077,100.00. In DEC. 30, 2012, signed the housing transfer
confirmation, this advance payment is not carry-over to revenue as the transfer procedure is in
progress.
The detail is as following：
expected disposal costs expected disposal
Fixed asset name Book value Fair value
time
Dongfeng the 8th floor room 801
1,219,032.79 8,715,531.00 508,317.60 2013 年内
to 810
（3）Investment properties of ownership or use-right restriction
In Dec.31, 2012,the investment properties amounting to RMB93,904,009.36 in book value(historical
cost is RMB159,286,942.55) were security mortgaged for China Citic Bank Shenzhen
Branch(《Comprehensive credit contract》 amounting to 600million loan ) and Pudong Development
Bank Shenzhen Branch(《Financing Limit Agreement》amounting to 900million). The ending balance of
mortgaged loan is 510million short-term borrowings（NoteⅦ、20）、700million long-term borrowings
（NoteⅦ、29） and 120million non-current liabilities due within one year （NoteⅦ、28）.
（4）Up to Dec.31, 2012, there are no accruing provisions for impairment of investment properties as
there is no impairment occurring in investment properties.
12、Fixed assets
（1）General information
Item Opening balance Increase Decrease Closing balance
1、Historical cost 321,653,421.91 2,178,793.12 5,566,896.65 318,265,318.38
：Houses and buildings 273,796,002.58 51,282.06 2,386,032.55 271,461,252.09
Machinery equipments 18,935,503.16 398,692.81 86,543.37 19,247,652.60
Transportation vehicles 8,854,965.40 827,114.02 1,803,868.27 7,878,211.15
Electronic equipments 10,580,447.28 584,964.23 73,192.91 11,092,218.60
Other equipments 6,625,012.39 316,740.00 1,217,259.55 5,724,492.84
Self-housing renovation costs 2,861,491.10 -- -- 2,861,491.10
2、Cumulative depreciation Addition Recognition
Total cumulative depreciation 152,817,177.49 8,170,586.53 4,360,624.51 156,627,139.51
139
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Item Opening balance Increase Decrease Closing balance
：Houses and buildings 114,574,507.90 6,173,688.32 2,144,707.74 118,603,488.48
Machinery equipments 15,402,311.12 333,282.11 155,483.62 15,580,109.61
Transportation vehicles 6,557,126.38 533,945.79 792,878.79 6,298,193.38
Electronic equipments 8,125,472.65 524,485.63 88,262.89 8,561,695.39
Other equipments 6,069,907.73 225,121.70 1,179,291.47 5,115,737.96
Self-housing renovation costs 2,087,851.71 380,062.98 -- 2,467,914.69
3 、 Net Book Value before
impairment allowance 168,836,244.42 161,638,180.87
：Houses and buildings 159,221,494.68 152,857,763.61
Machinery equipments 3,533,192.04 3,667,542.99
Transportation vehicles 2,297,839.02 1,580,017.77
Electronic equipments 2,454,974.63 2,530,523.21
Other equipments 555,104.66 608,754.88
Self-housing renovation costs 773,639.39 393,576.41
4、Impairment allowance 4,227,562.01 1,371,009.06 22,029.00 5,576,542.07
：Houses and buildings 3,577,414.70 -- 22,029.00 3,555,385.70
Machinery equipments 650,147.31 995,913.64 -- 1,646,060.95
Transportation vehicles -- 6,165.00 -- 6,165.00
Electronic equipments -- 17,984.71 -- 17,984.71
Other equipments -- 69,562.98 -- 69,562.98
Self-housing renovation costs -- 281,382.73 -- 281,382.73
5、Net Book Value 164,608,682.41
156,061,636.80
：Houses and buildings 155,644,079.98
149,302,377.91
Machinery equipments 2,883,044.73
2,021,482.04
Transportation vehicles 2,297,839.02
1,573,852.77
Electronic equipments 2,454,974.63
2,512,538.50
Other equipments 555,104.66
539,191.90
140
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Item Opening balance Increase Decrease Closing balance
Self-housing renovation costs 773,639.39
112,193.68
Note：The depreciation for current year is 8,170,586.53. The amount of construction in progress
transferred to fixed-assets is 0.
（2）Fixed assets of ownership or use-right restriction
In Dec. 31, 2012, the houses and buildings (historical cost is RMB36,216,402.19, book value is
RMB3,621,640.22) and Machinery equipments ((historical cost is 36,216,402.19,book value is
RMB4,418,472.87 in Dec.12,2011) were mortgaged as sercurity for short-term borrowings amounting to
RMB 220 million. Details refer to Ⅶ、20.
（3）The Company had no temporary idle fixed assets at the end of this period
（4）The Company had no fixed assets gerenated by financing lease out at the end of this period
（5）The Company had no fixed assets gerenated by operating lease out at the end of this period
（6）The Company had no fixed assets for sale at the end of this period
（7）Fixed assets with not completed Premises Permit
Item Historical cost Book value
Tellus building underground park and Conversion layer 29,918,843.50 15,532,917.16
Yongtong building 103,389,580.16 53,951,645.95
Shuibei Zhongtian building 2,722,490.41 1,340,788.20
Automobile building 33,707,119.96 23,029,061.29
Floor 1 of business housing,Baoan 1,867,500.00 1,086,966.93
Five sets of business housings,Baoan 590,040.00 343,430.16
Zhonghe building 8,312,377.03 6,488,416.77
5B,NO.4,Weipeng garden Building 357,905.78 298,371.38
Floor 3 to 5, the 3rd factory building, Taoyuan Load 2,860,500.00 1,108,076.67
West of the 16th apartment house, Taohua Yuan 2,210,725.54 1,169,277.29
NO.1 factory building, Taoyuan Load 2,902,634.00 2,024,449.30
NO.2 factory building, Taoyuan Load 3,491,960.00 2,437,608.99
Half of the 16th building,Tanhuayuan 2,210,725.54 1,185,845.11
Total 194,542,401.92 109,996,855.20
As the historical reason, the timing of deal with premises permit is unforeseen.
（8）Impairment provision for fixed assets
The Tellus recognize RMB1,371,009.06 impairment provision for fixed assets in current year, the
reason is that the subsidiary (Tellus Xinyongtong Automobile development)recognize the fixed assets
provision for disposed the automobile maintanence equipment . The collectible amount is decided by
141
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
the asset group‘s predict cash inflow.
The subsidiary (Zhongtian Co., Ltd.) disposed the assets that accured impairment provision, and
reversed this accoured impairment provision amounting to 22,029.00.
13、Construction in progress
（1）Details of construction in progress
Closing balance Opening balance
Item Provision for Net carrying Carrying Provision for Net carrying
Carrying amount amount impairment amount
impairment amount
Tellus International Jewelry
Square（the first stage） 12,873,529.03 -- 12,873,529.03 2,461,073.03 -- 2,461,073.03
Others 104,400.00 -- 104,400.00 -- -- --
Total 12,977,929.03 -- 12,977,929.03 2,461,073.03 -- 2,461,073.03
（2）Significant changes in Construction in progress
Opening Transferred to fixed
Project Budget Increase assets in current Decrease Closing balance
balance year
Tellus International
Jewelry Square（the first
4,136.4million 2,461,073.03 10,412,456.00 -- -- 12,873,529.03
stage）*
Total 2,461,073.03 10,412,456.00 -- -- 12,873,529.03
（Continued）
Cumulative Rate of interest
：Borrowing costs capitalisation for
borrowing % of investment : Percentage of
Project capitalised in the the current year Source of finance
costs budget completion
capitalised current year （%）
Tellus International
Jewelry Square（the first
-- -- -- 3.11% Self-financing
stage）
Total -- -- --
*Note：The subsidiary (Zhongtian CO., Ltd.) is the mainly implement party of this project. Up to Dec. 31,
2012, this project is in pre-construct stage, the increase amount in this reporting year mainly caused by
142
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
pre -project cost.
14、Intangible assets
（1）Details of intangible assets
Item Opening balance Increase Decrease Closing balance
Ⅰ、Total carrying amount 325,000.00 -- -- 325,000.00
Trademarks 75,000.00 -- -- 75,000.00
Software 250,000.00 -- -- 250,000.00
Ⅱ、Total accumulated amortization① 160,911.46 57,499.92 -- 218,411.38
Trademarks 26,744.96 7,500.00 -- 34,244.96
Software 134,166.50 49,999.92 -- 184,166.42
Ⅲ、Total provision for impairment -- -- -- --
Trademarks -- -- -- --
Software -- -- -- --
Ⅳ、Total net carrying amount 164,088.54 106,588.62
Trademarks 48,255.04 40,755.04
Software 115,833.50 65,833.58
Note：①The current year amortization is RMB 57,499.92.
15、Long-term prepaid expenses
Reason for
Other Closing
Item Opening balance Increase Amortization reductions other
balance
reductions
Renovation costs 91,369.29 -- 43,105.92 -- 48,263.37
Hotel equipments reformation 185,959.66 -- 185,959.66 -- --
Subsequent restructurof properties 480,553.25 286,663.00 274,797.14 -- 492,419.11
Insurance fee for pledge and commitment
fee for loan 89,001.32 299,244.13 125,697.79 -- 262,547.66
Total 846,883.52 585,907.13 629,560.51 -- 803,230.14
16、Deferred tax assets and liabilities
（1）Recognized deferred tax assets and liabilities
143
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
① Recognized deferred tax assets
Closing balance Opening balance
Item Deductible temporary Deductible temporary
Deferred tax assets difference and tax loss Deferred tax assets difference and tax loss
carried forwards carried forwards
Allowance for bad debt 21,749,365.77 86,997,463.04 24,629,182.27 98,516,728.96
Impairment allowance for fixed
assets 3,711,034.83 14,844,139.31 3,711,034.83 14,844,139.31
Offset of internal unrealized
profit 1,249,362.18 4,997,448.72 1,288,304.38 5,153,217.52
Total 26,709,762.78 106,839,051.07 29,628,521.48 118,514,085.79
② Recognized deferred tax liabilities
Closing balance Opening balance
Item Deferred tax Taxable temporary Taxable temporary
Deferred tax liabilities
liabilities differences differences
Depreciation of fixed assets 991,895.90 3,967,583.60 1,293,511.10 5,174,044.40
Changes in the fair value of
available-for-sale financial
assets recognized in capital 353,363.01 1,413,452.05 298,948.76 1,195,795.05
reserve
Total 1,345,258.91 5,381,035.65 1,592,459.86 6,369,839.45
（2）Details of unrecognized deferred tax assets
Item Closing balance Opening balance
Deductible temporary differences 18,924,793.99 13,278,179.60
Deductible losses 11,924,047.39 13,075,844.48
Total 30,848,841.38 26,354,024.08
（3）Deductible losses, for which no deferred tax assets are recognized, will expire in the following
years
Year Closing balance Opening balance Remarks
2012 -- 9,584,526.39
2013 13,206,219.44 13,364,264.00
2014 7,363,389.12 10,462,181.85
2015 9,152,014.82 9,217,491.00
2016 9,674,914.68 9,674,914.68
144
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
2017 8,299,651.49 --
Total 47,696,189.55 52,303,377.92
17、Other non-current assets
Item Closing balance Opening balance
Prepaid 50% land price of Tellus International Jewelry Square(the
26,339,112.00
first stage) --
Total 26,339,112.00 --
18、provision for asset impairment
Decrease Closing balance
Item Opening balance Increase
Reversal Expanded
Ⅰ.Bad debt provision 90,702,457.63 5,827,461.60 -- 49,742.19 96,480,177.04
II. Provision for impairment of
-- 20,000.00 -- -- 20,000.00
held-to-maturity investments
III.Provision for decline in value of
25,442,175.11 3,812,655.56 -- -- 29,254,830.67
inventories
IV.Provision for impairment of
31,257,252.62 127,836.59 -- -- 31,385,089.21
long-term investments
Ⅴ、Provision for impairment of fixed
4,227,562.01 1,371,009.06 -- 22,029.00 5,576,542.07
assets
Total 151,629,447.37 11,158,962.81 -- 71,771.19 162,716,638.99
145
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
19、Assets of ownership or use-right restriction
Item Closing balance Reason of restriction
Subtotal of assets be used in guarantee：
Invested real estate 93,904,009.36 Mortgaged by bank loan
Fixed assets 3,621,640.22 Mortgaged by bank loan
Total 97,525,649.58
20、Short-term loans
（1）General information
Item Closing balance Opening balance
Mortgaged loans 73,000,000.00 16,800,000.00
Credit loans 20,881,155.00 25,992,388.00
Total 93,881,155.00 42,792,388.00
Types and amount of mortgaged assets refer to Note Ⅶ、11 andⅦ、12。
The ending balance of credit loans includes RMB 19,081,155.00 loan borrowed from the holding
company (Shenzhen Tefa Group Co., Ltd.)， the company do not set the expire date.
（2）There are no overdue short-term loans in the end of the period.
21、Accounts payable
（1）General information
Item Closing balance Opening balance
accounts payable 23,626,617.53 22,950,543.71
Total 23,626,617.53 22,950,543.71
（2）Accounts payable to shareholders holding at least 5% of the Company‘s shares with voting power
or to related parties in the reporting period. Please refer to NoteⅧ 、6 、Related parties‘ transaction.
（3）accounts payable due for more than 1 year as at the reporting date
If paid after reporting
Creditor Amount Reason for unpaid
date
Shenzhen Tefa Real Estate Co.,Ltd. 6,054,855.46 Related parties unpaid no
Total 6,054,855.46
146
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
22、Advances from customers
（1）Aging analysis
Item Closing balance Opening balance
Within in 1 year 31,106,429.79 1,349,175.53
1 to 2 year 29,139.00 20,000.00
2 to 3 year 20,000.00 15,300.21
Over 3 year 701,511.70 686,413.48
Total 31,857,080.49 2,070,889.22
The balance of advance in customer over year 3 mainly cause by the advance payment of the
subsidiary (the inspection Equipment Co., Ltd.). This amount donot transferred to revenue as the
client did not check upon delivery.
（2）There are no advances from customers to shareholders holding at least 5% of the Company‘s
shares with voting power or to related parties in the reporting period.
23、Employee benefits payable
Item Opening balance Increase decrease Closing balance
Ⅰ 、 Wages and salaries,
bonuses, subsidies and 10,234,986.18 42,219,821.90 42,746,519.84 9,708,288.24
allowances
Ⅱ、Employee benefits -- 1,741,386.03 1,741,386.03 --
Ⅲ、Social insurance 535,508.36 8,033,318.24 8,001,670.74 567,155.86
Ⅳ、Housing provident fund 2,012,522.62 2,800,793.93 3,158,926.17 1,654,390.38
Ⅴ 、 Labor union fee and
459,670.23 1,045,847.30 897,096.31 608,421.22
employee education fee
Ⅵ 、 Redemption of
-- 70,000.00 70,000.00 --
termination of labor contract
Ⅶ、Others 42,850.00 9,237.62 9,237.62 42,850.00
Total 13,285,537.39 55,920,405.02 56,624,836.71 12,581,105.70
Note：①There are no item in arrears in employee benefits payable.②The balance of employee
benefits payable would pay in quarter 1 to quarter 2.
147
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
24、Taxes and fees payable
Item Closing balance Opening balance
VAT 160,856.59 -2,105,520.09
Business tax 236,808.56 672,190.86
Enterprise income tax 4,823,547.78 2,510,351.45
Property tax 964,194.62 1,004,745.34
Land VAT 5,276,705.05 5,276,705.05
Land tax 21,183.50 --
Personal income tax 94,962.92 53,078.01
Urban construction and maintenance tax 78,919.05 66,275.21
Education surcharge 129,126.79 109,308.39
Embankment protection fees 6,569.42 1,348.46
Others 52,560.16 39,350.92
Total 11,845,434.44 7,627,833.60
25、Dividends payable
Company name Closing balance Opening balance
Zhongjing Auto Co., Ltd, ACU Enterprise Co., Ltd 1,455,297.72 --
Total 1,455,297.72 --
The subsidiaries (the Tefa Huari Automobile enterprise the Huari Toyota Automobile selling service)
distributed the previous annual profit, but the Japanese shareholders do not pay the shock dividend yet.
26、Other payables
（1）General information
Item Closing balance Opening balance
Related parties transactions and loan、interest 52,943,107.79 50,654,624.16
Deposit、security bond 5,710,153.00 5,912,228.10
Solicitor‘s fee of the petrochemical company case 6,650,000.00 --
Others 33,972,692.94 38,236,223.16
Total 99,275,953.73 94,803,075.42
148
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
（3）the Company have other payables which were due to parties having 5% or above shareholdings
see NoteⅧ.6、（accounts receivable from related parties）for details.
（3）Large amount of other payables due for more than 1 year
Post reporting date
Creditor Amount Reason for pending settlement
repayment
There are no expire dated decide by
Shenzhen Tefa Group Co., Ltd. 47,929,481.35 No
the holding company
Total 47,929,481.35
（4）Large amount of other payables
Creditor Closing balance Content
Shenzhen Tefa Group Co., Ltd. 47,929,481.35 Transaction with Related parties and loan 、interest
Total 47,929,481.35
27、Accrued liabilities
Item Opening balance Increase Decrease Closing balance
External guarantee 87,568,728.57 -- 87,568,728.57 --
Total 87,568,728.57 -- 87,568,728.57 --
Note：External guarantee see NoteⅫ(other significant events) for details.
28、Non-current liabilities due within one year
（1）General information non-current liabilities
Item Closing balance Opening balance
Long-term borrowings due within one year（NoteⅦ、29） 12,000,000.00 88,020,000.00
Total 12,000,000.00 88,020,000.00
（2）Long-term borrowings due within one year
① General information
Item Closing balance Opening balance
Mortgaged loans 12,000,000.00 88,020,000.00
149
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Item Closing balance Opening balance
Total 12,000,000.00 88,020,000.00
150
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
② Top five long-term borrowings due within one year
Interest Opening
Creditor Start date Expiry date Currency Closing balance
rate（%） balance
Shanghai Pudong Development Bank，
Fuhua Branch 2009/8/10 2012/2/10 6.65 RMB -- 1,240,000.00
Shanghai Pudong Development Bank，
Fuhua Branch 2009/8/10 2012/5/10 6.65 RMB -- 1,240,000.00
Shanghai Pudong Development Bank，
Fuhua Branch 2009/8/10 2012/8/10 6.65 RMB -- 48,360,000.00
Shanghai Pudong Development Bank，
Fuhua Branch 2010/2/5 2012/2/5 6.9825 RMB -- 120,000.00
Shanghai Pudong Development Bank，
Fuhua Branch 2010/2/5 2012/5/5 6.9825 RMB -- 120,000.00
Shanghai Pudong Development Bank，
Fuhua Branch 2010/2/5 2012/8/5 6.9825 RMB -- 120,000.00
Shanghai Pudong Development Bank，
Fuhua Branch 2010/2/5 2012/11/5 6.9825 RMB -- 120,000.00
Shanghai Pudong Development Bank，
Fuhua Branch 2009/7/31 2012/1/20 6.65 RMB -- 700,000.00
Shanghai Pudong Development Bank，
Fuhua Branch 2009/7/31 2012/4/20 6.65 RMB -- 700,000.00
Shanghai Pudong Development Bank，
Fuhua Branch 2009/7/31 2012/7/31 6.65 RMB -- 27,300,000.00
Shanghai Pudong Development Bank，
Fuhua Branch 2009/5/31 2012/2/29 6.65 RMB -- 100,000.00
Shanghai Pudong Development Bank，
Fuhua Branch 2009/5/31 2012/5/31 6.65 RMB -- 7,900,000.00
12/10/27(15million
China Citic Bank,Shenzhen Branch 2012/7/27 7.0725 RMB 6,000,000.00 --
quarterly repaid )
Shanghai Pudong Development Bank， 12/12/27(15million
2012/9/27 6.4575 RMB 6,000,000.00 --
Shenzhen Branch
quarterly repaid )
Total 12,000,000.00 88,020,000.00
③There are no overdue long-term borrowings due within one year
29、 Long-term borrowings
①Disclosure of Long-term borrowings by Category
Item Closing balance Opening balance
Mortgaged loan 82,000,000.00 92,700,000.00
Credit loan 73,000,000.00 --
Less：Non-current liabilities due within one year（NoteⅦ、25） 12,000,000.00 88,020,000.00
151
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
合 计 143,000,000.00 4,680,000.00
Types and mounts of asset mortgaged is refered to NoteⅦ、11.
Credit loan borrowed from holding company (Shenzhen Tefa Group Co., Ltd.)
②Top five debtor of long-term borrowings
Borrowing Borrowing Interest rate Opening
Loan compay Currency Closing balance
Beginning date ending date （%） balance
Shanghai Pudong Development
Bank，Fuhua Branch 2010/2/5 2013/2/5 6.9825 RMB -- 4,680,000.00
Shenzhen Tefa Group Co., Ltd. 2012/12/25 2015/12/24 6.00 RMB 73,000,000.00
China Citic Bank,Shenzhen
2012/7/27 2015/7/27 7.0725 RMB --
Branch 28,500,000.00
Shanghai Pudong Development
2012/9/27 2015/9/27 6.4575 RMB --
Bank，Shenzhen Branch 41,500,000.00
Total 143,000,000.00 4,680,000.00
30、Long-term Payables
（1）Disclosure of Long-term Payables by Category
Item Closing balance Opening balance
Employee housing deposit 3,908,848.40 3,908,848.40
Technical innovation 11,311.96 11,311.96
Dongfeng Automobile Co.,Ltd. *Note① 9,061,711.88 --
Total 12,981,872.24 3,908,848.40
*Note①details refer to NoteⅦ、10、（3）.
152
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
31、Share capital
Item Opening balance Changes for the period（+ -） Closing balance
New issue of Bonus Capitalization of
Amount % Other Subtotal Amount proportion
share issue surplus reserve
Ⅰ.Restricted tradable shares
1. State-owned shares -- -- -- -- -- -- -- -- --
2. State-owned legal person shares 14,587,056.00 6.62% -- -- -- -- -- 14,587,056.00 6.62%
3. Other domestic-owned shares -- -- -- -- -- -- -- -- --
Including: Domestic legal person ownership -- -- -- -- -- -- -- -- --
Domestic nature person -- -- -- -- -- -- -- -- --
4. Foreign-owned shares -- -- -- -- -- -- -- -- --
Including: Foreign legal person ownership -- -- -- -- -- -- -- -- --
Foreign nature person -- -- -- -- -- -- -- -- --
Total restricted tradable shares 14,587,056.00 6.62% -- -- -- -- -- 14,587,056.00 6.62%
Ⅱ、Tradable shares
1. Ordinary shares denominated in RMB 179,294,544.00 81.39% -- -- -- -- -- 179,294,544.00 81.39%
2. Foreign-owned shares listed domestically 26,400,000.00 11.98% -- -- -- -- -- 26,400,000.00 11.98%
3. Foreign-owned shares listed overseas -- -- -- -- -- -- -- -- --
4. Others -- -- -- -- -- -- -- -- --
Total tradable shares 205,694,544.00 93.38% -- -- -- -- -- 205,694,544.00 93.38%
Ⅲ、Total shares 220,281,600.00 100% -- -- -- -- -- 220,281,600.00 100%
Note：Tradable shares including the amount of 131,283,504shares hold by the holding company(The Tefa Group).
153
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
32、Capital reserve
Opening
Item Increase Decrease Closing balance
balance
Capital premium 3,024,773.35 -- -- 3,024,773.35
Other comprehensive income 896,846.29 163,242.75 -- 1,060,089.04
：Fair value changes of equity-settled share-based
896,846.29 163,242.75 -- 1,060,089.04
equity instrument
Other reserves 4,647,832.16 -- -- 4,647,832.16
Total 8,569,451.80 163,242.75 -- 8,732,694.55
33、Surplus reserve
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserve 2,952,586.32 -- -- 2,952,586.32
Total 2,952,586.32 -- -- 2,952,586.32
34、Undistributed profit
（1）Movements of undistributed profit
Rate of
Item 2012 2011
appropriation
Before adjustment: Undistributed profits at the end of prior
-54,437,738.61 -56,595,413.73
year
Adjustment: Total undistributed profits at beginning of year
-- --
(Increase +, decrease -)
After adjustment: Undistributed profits at beginning of year -54,437,738.61 -56,595,413.73
Add: Net profit attributable to shareholders of the parent 7,146,259.35 2,157,675.12
Loss set off by surplus reserves -- --
Others -- --
Less: Appropriation to statutory surplus reserve -- --
Appropriation to discretionary surplus reserve -- --
Ordinary dividends declared -- --
Capitalization of surplus reserve -- --
Undistributed profits at the end of period -47,291,479.26 -54,437,738.61
154
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
（2）Explanation for profit distribution
According to the approval of general meeting of shareholders in April 12, 2012, the Company
undistributed its dividends to all shareholders in 2011, and do not increase the capital reserve.
（3）Appropriation to surplus reserve by subsidiaries
Shenzhen Tefa Huari Automobile Enterprise Co., Ltd. had surplus reserve RMB 124,473.86 in 2012, of
which RMB 74,684.32 is attributable to the parent company.
Shenzhen Huari Toyota Automobile sales Co., Ltd. had surplus reserve RMB 325,876.94 in 2012，of
which RMB 195,526.16 is attributable to the parent company.
35、 Operating Revenues and Operating Costs
（1） Operating Revenues and Operating Costs
Item 2012 2011
Principal operating income 393,875,262.37 395,701,745.71
Other operating income 25,767,398.94 7,580,353.09
Total 419,642,661.31 403,282,098.80
Principal operating cost 330,441,936.70 333,752,041.61
Other operating cost 5,977,694.73 1,512,196.01
Total 336,419,631.43 335,264,237.62
（2）Principal operating activities (classified by industry)
2012 2011
Name of industry
Operating income Operating costs Operating income Operating costs
Sales of automobile 251,410,681.00 248,501,428.28 256,520,802.72 247,610,749.18
Inspection and manintanance of
48,800,035.00 35,303,773.07 46,175,786.21 38,309,656.14
automobile 、sales of parts
Lease and services 94,499,183.06 47,471,372.04 93,735,367.66 48,561,847.17
Sub-total 394,709,899.06 331,276,573.39 396,431,956.59 334,482,252.49
Less: offset the internal amount 834,636.69 834,636.69 730,210.88 730,210.88
Total 393,875,262.37 330,441,936.70 395,701,745.71 333,752,041.61
（3）Principal operating activities（classified by geographical areas）
2012 2011
Name of geographical
area Operating income Operating costs Operating income Operating costs
155
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
2012 2011
Name of geographical
area Operating income Operating costs Operating income Operating costs
Shenzhen 394,709,899.06 331,276,573.39 396,431,956.59 334,482,252.49
Subtotal
394,709,899.06 331,276,573.39 396,431,956.59 334,482,252.49
Less: offset the internal
amount 834,636.69 834,636.69 730,210.88 730,210.88
Total 393,875,262.37 330,441,936.70 395,701,745.71 333,752,041.61
（4）Operating income from the Company‘s top 5 customers
Period Total operating income % of total operating income
2012 28,621,967.55 6.82%
2011 23,018,457.92 5.71%
36、Business taxes and surcharges
Item 2012 2011
Business tax 4,665,746.74 3,880,789.57
City construction and maintenance tax 733,366.51 632,058.80
Education surcharges 523,627.05 452,917.58
Total 5,922,740.31 4,965,765.95
Note: Details of business taxes and surcharges please refer to NoteⅤ、taxes.
37、Selling expenses
Item 2012 2011
Employment benefits 10,226,661.89 10,097,883.00
Advertisement 1,295,163.59 591,440.37
Depreiciation 1,276,680.81 1,439,589.17
Office 1,076,426.41 941,656.36
Tax 943,100.49 950,641.83
Water and electricity fee 457,013.53 469,637.02
Goods freight 615,381.89 288,796.54
156
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Entertainment expenses 464,899.14 455,801.70
Travel expenses 418,194.75 322,065.92
Exhibition and meeting expenses 286,043.20 268,373.00
Others 3,639,382.37 4,065,793.01
Total 20,698,948.07 19,891,677.92
38、 Administration expenses
Items 2012 2011
Staff cost 22,876,737.10 23,780,343.40
Taxes and fees 3,349,618.90 3,275,467.06
Office expenses 2,689,957.70 3,113,949.10
Travel expenses 2,189,761.84 2,280,175.50
Entertainment expenses 1,786,406.81 1,746,399.10
Depreiciation and Amortisation 1,631,881.08 2,215,983.46
Consultation and service fee 1,235,127.00 777,343.89
Advertising expense 1,003,972.50 721,000.00
Leasing management fee 707,148.52 706,786.72
Water and electricity fee 408,820.92 408,285.72
Others 7,556,248.86 5,622,466.20
Total 45,435,681.23 44,648,200.15
39、Financial expenses
Items 2012 2011
Interest expenses 9,427,253.26 7,961,955.26
Less: Interest income 407,866.09 344,519.07
Less：interest capitalized -- --
Exchange difference 7,717.88 -95,256.41
Less：Exchange difference capitalized -- --
Others 1,054,232.59 784,827.34
Total 10,081,337.64 8,307,007.12
157
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
40、Investment income
（1）Investment income
Item 2012 2011
Income generated from long-term equity investments measured by cost method 601,902.79 437,747.48
Income generated from long-term equity investments measured by equity method 4,256,541.71 10,053,234.53
Gains on disposal of long-term equity investment -- -2,443,566.43
Gains on tradable financial aeest in the period 48,625.50 33,574.75
Gains on disposal of expired tradable financial aeest 706.00 --
Total 4,907,776.00 8,080,990.33
Note：Except the Note Ⅶ、10、 3）， there are no other significant limitations exist in regain investment
income in Tellus.
（2）Income from long-term equity investments measured at cost method
Investee 2012 2011
China Pufa Machinery Industry Co.,Ltd. 601,902.79 437,747.48
Total 601,902.79 437,747.48
（3）income on long- term equity investment measured by equity method
Investee 2012 2011 Reason of changes
Shenzhen Ren Fu Tellus Automobiles Services
2,500,079.75 9,762,798.85 Income of investee decreased
Co.,Ltd.
Shenzhen Dongfeng Automobile Co., Ltd. 1,606,945.10 1,196,739.31 Income of investee increased
Others 149,516.86 -906,303.63
Total 4,256,541.71 10,053,234.53
41、Impairment losses
Item 2012 2011
Impairment losses for bad debts 5,827,461.60 1,905,540.58
Inventory valuation loss 3,812,655.56 3,209,298.76
impairment loss for held-to-maturity investment 20,000.00 --
158
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Item 2012 2011
impairment loss for long- term equity investment 127,836.59 --
Impairment allowance for fixed assets 1,371,009.06 --
合 计 11,158,962.81 5,114,839.34
42、Non-operating income
Included in current
Category 2012 2011 year non-recurring
profit and loss
Gain on non-current asset disposals 81,831.05 201.00 81,831.05
Within: Gain on fixed asset disposals 81,831.05 201.00 81,831.05
Gain on disposal of intangible assets -- -- --
Gain on debt restructuring *Note① 14,377,457.14 -- 14,377,457.14
Gain on non-monetary assets exchange -- -- --
Gain on unable to paid account -- 8,907,320.12 --
demolition compensation of 5 sets of bachelor quarters in
-- 4,643,360.00 --
The Parts Co,.Ltd.
Government assistance -- -- --
Others 94,567.14 99,693.17 94,567.14
Total 14,553,855.33 13,650,574.29 14,553,855.33
*Note①details refer to NoteⅫ、other significant events
43、Non-operating expenses
Included in current year
Category 2012 2011
non-recurring profit and loss
Loss on non- recurring asset disposals 121,282.97 31,131.29 121,282.97
Within: Loss on fixed asset disposals 121,282.97 31,131.29 121,282.97
Loss on intangible assets disposals -- -- --
Loss on debt restructuring -- -- --
159
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Included in current year
Category 2012 2011
non-recurring profit and loss
Loss on non-monetary assets exchange -- -- --
Donation -- -- --
Others 29,164.79 186,224.69 29,164.79
Total 150,447.76 217,355.98 150,447.76
44、Income tax expenses
Category 2012 2011
Current tax calculated in accordance with relevant tax law 5,647,480.70 3,584,670.93
Deferred tax 2,617,143.50 1,769,712.00
Total 8,264,624.20 5,354,382.93
45、Computation of basic earnings per share(EPS) and diluted earnings per share
Basic EPS is calculated by dividing net profit attributable to shareholders of the parent by the weighted
average number of issued shares. The start date of ordinary shares issued in the period for the purpose
of calculation of basic earnings per share is the date on which subscription becomes receivable per
contract of issuance.
Diluted earnings per share is calculated by dividing the results of adjustment of net profit attributable to
shareholders of the parent for the interest expense for the dilutive convertible instruments, the expected
gain or expense at the time of conversion and their related income tax implication by the sum of the
weighted average number of issued shares for calculation of baisc earnings per shares and the
weighted average number of potential shares from convertible instruments.
For the purpose of calculation of the weighted average number of potential shares from convertible
instruments, the conversion date for dilutive conventible instruments issued in prior period and dilutive
convertible instruments issued in the period is the the 1st date of the period and the issue date
respectively.
（1）General disclosure
2012 2011
Category of earning
Basic EPS Diluted EPS Basic EPS Diluted EPS
160
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Net profit attributable to ordinary shareholders 0.0324 0.0324 0.0098 0.0098
Recurring profit or loss attributable to ordinary
-0.0684 -0.0684 -0.0281 -0.0281
shareholders
（2）The calculation of EPS and diluted EPS
① Net profit attributable for ordinary shareholders for the calculation of basic EPS：
Item 2012 2011
Net profit attributable for ordinary shareholders 7,146,259.35 2,157,675.12
: From continuing operation 7,146,259.35 2,157,675.12
From curtailed operation -- --
Recurring profit or loss attributable to ordinary shareholders -15,060,776.70 -6,198,115.02
: From continuing operation -15,060,776.70 -6,198,115.02
From curtailed operation -- --
In this reporting period, there are no diluted potential ordinary shares exist in the company,
therefore,diluted EPS is equal basic EPS.
② When calculating the basic earnings per share, the denominator is the weighted average number of
outstanding ordinary shares, calculated as follows：
Item 2012 2011
Number of ordinary shares issued at beginning of year 220,281,600.00 220,281,600.00
Add: the number of ordinary shares issued this year -- --
Less: the number of ordinary shares bought back this year -- --
Number of ordinary shares at the end of year 220,281,600.00 220,281,600.00
46、Other Comprehensive earnings
Item 2012 2011
① Gain/(loss) arising from available-for-sale financial assets 217,657.00 -108,828.50
Less: Tax effects arising from available-for-sales financial assets 54,414.25 -42,450.45
Net amount included in other comprehensive income in the prior periods that is
-- --
transferred to profit or loss for the period
Sub-total 163,242.75 -66,378.05
②Other -- --
161
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Item 2012 2011
Less：Tax effects arising from the share of other comprehensive income -- --
Net amount included in other comprehensive income in the prior periods -- --
Sub-total -- --
Total 163,242.75 -66,378.05
47、Notes to items in the cash flow statements
（1）Other cash receipts relating to operating activities
Item 2012 2011
Current accounts from related parties 100,000.00 568,432.60
Amount pledged and guaranteed 2,024,602.64 1,933,058.14
Interest income 473,998.49 268,410.14
Other income 5,745,616.42 7,145,640.23
Total 8,344,217.55 9,915,541.11
（2）Cash paid relating to other operating activities
Items 2012 2011
Current accounts from associates 675,000.00 413,150.00
Operating expense 11,474,231.74 14,953,176.14
Administrating expense 21,744,239.25 17,232,607.82
Pledge,deposit 1,175,247.31 2,033,865.97
Other advance payment 159,084.95 1,470,940.81
Others 4,280,034.17 2,306,458.53
Total 39,507,837.42 38,410,199.27
（3）Cash received relating to other investing activities
Items 2012 2011
Withdraw fixed deposit -- 5,000,000.00
Total -- 5,000,000.00
（4）Cash paid relating to other financing activities
Items 2012 2011
162
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Items 2012 2011
Cash paid for financing 547,350.00 221,100.00
Total 547,350.00 221,100.00
48、Supplementary information to the statement of cash flows
（1）Reconciliation of cash flows from operating activities to net profit
Category 2012 2011
①Reconciliation of cash flows from operating activities to net profit：
Net profit 971,919.19 1,250,196.41
Add: Loss on asset impairment 11,158,962.81 5,114,839.34
Depreciation of fixed assets, oil and gas assets, biological assets held for
production 13,406,211.11 15,301,508.01
Amortisation of intangible assets 57,499.92 57,499.92
Amortization of long-term deferred expenses 629,560.51 650,771.69
Losses on disposal of fixed assets, intangible assets and other long-term
assets(deduct: gains) -15,152,740.17 -4,612,228.71
Losses on scrapping of fixed assets (deduct: gains) -- 496.00
Loss of fair value variation (deduct: gains) -- --
Financial expenses (deduct: gains) 9,974,603.26 8,273,915.07
Losses from investments (deduct: gains) -4,907,776.00 -8,080,990.33
Decrease in deferred tax assets (deduct: increase) 2,918,758.70 2,343,913.08
Increase in deferred tax liabilities (deduct: decrease) -301,615.20 -370,116.39
Decrease in inventories (deduct: increase) -21,408,161.05 -8,381,690.95
Decrease in operating receivables (deduct: increase) -9,202,882.45 6,898,938.70
Increase in operating payables (deduct: decrease) 4,099,276.90 -33,185,715.86
Others -- --
Net cash flows from operating activities -7,756,382.47 -14,738,664.02
②Investing and financing activities that do not affect cash receipt and payment：
163
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Category 2012 2011
Liabilities converted capital -- --
Reclassify convertible bonds to be expired within one year as current
liability -- --
Fixed assets subject to finance leases -- --
③Net cincrease in cash and cash equivalents：
Cash at the end of the period 55,145,531.39 55,926,573.46
Less: cash at the beginning of the period 55,926,573.46 64,122,979.84
Add: cash equivalents at the end of the period -- --
Less: cash equivalents at the beginning of the period -- --
Net increase in cash and cash equivalents -781,042.07 -8,196,406.38
（2）Constitution of cash and cash equivalents
Item Opening balance Ending balance
①Cash 55,145,531.39 55,926,573.46
：Cash holding 148,896.54 246,498.05
Current cash at bank 54,996,344.76 55,679,936.81
Current other monetary funds 290.09 138.60
②Cash equivalents -- --
：Invested bonds expire in Three months -- --
③ Ending balance of cash and cash equivalents 55,145,531.39 55,926,573.46
Ⅷ、Related parties and related party transaction
1、General information of the parent company
Company Registered Legal
Name of the parent company relationship Type of business
type place representative
Real estate development
Limited
Shenzhen tefa Group Co., Ltd. Parent company Shenzhen Liu Aiqun and management, 、
liability
domestic commerce
（continued）
164
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Name of the parent Share holding Organization
Registered capital Voting proportion（%） Final control
company proportion% code
Shenzhen State-owned Assets
Shenzhen tefa Group
15,828.2million 66.22 66.22 Supervision and Administration 192194195
Co., Ltd.
Commission
2、Subsidiaries
Details refer to NoteⅥ、1、Subsidiaries.。
3、Associates and joint ventures
Details refer toNoteⅦ、10、（5）。
4、Other related parties
Other related party Relationship to the Company Institution code
Shenzhen Tefa Swan Industrial Co.,Ltd. Subsidiary of parent company 192473856
Shenzhen Mechanical Equipment Import and Export Co.,Ltd. Subsidiary of parent company 19034097X
Shenzhen Tefa Real Estate Co.,Ltd. Subsidiary of parent company 279365997
Hong Kong Jia Yu Investment Co.,Ltd Subsidiary of parent company
Shenzhen Tellus Real Estate(Yue Yang) Co.,Ltd. Subsidiary of parent company
Shenzhen Development Center Construction Management Subsidiary of parent company 192260957
Co.,Ltd.
Shenzhen Yang Chun Real Estate Co.,Ltd. Subsidiary of parent company
Shenzhen Tellus Real Estate(Long Gang) Co.,Ltd. Subsidiary of parent company
5、Related party transactions
（1）goods 、service and lease transactions
①Purchase goods/ Procurement of goods / Receiving service / Receiving lease
2012 2011
pricing Propotion in Propotion in
Related party Transaction principle
Amount Similar Amount Similar
transactions（%） transactions（%）
Shenzhen Tellus Xinyongtong Housing
Market price 58,000.00 34.13 100,000.00 48.89
Automobile Service Co., Ltd. rental
②Selling goods/providing service/leasing
165
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
2012 2011
Propotion in
pricing Propotion in
Related party Transaction principle Similar
Amount Similar Amount
transactions
transactions（%）
（%）
Shenzhen Ren Fu Tellus Houses
Market price 5,150,000.00 10.27% 5,150,000.00 10.69%
Automobile Service Co.,Ltd. leasing
Shenzhen Xinyongtong Houses
Market price 322,701.00 0.64% 309,204.00 0.64%
Automobile Service Co., Ltd. leasing
Shenzhen Xinyongtong Equipment
Market price -- -- 60,969.00 26.00%
Automobile Service Co., Ltd. leasing
Shenzhen Xinyongtong
Houses
Market price 236,700.00 0.47% 226,800.00 0.47%
Dongxiao Automobile Parts
leasing
Sales Co., Ltd.
Shenzhen Xinyongtong
Equipment
Market price -- -- 31,800.00 13.56%
Dongxiao Automobile Parts
leasing
Sales Co., Ltd.
Shenzhen Xinyongtong Equipment
Market price 141,680.00 100.00% 141,700.00 60.43%
Tenology Co., Ltd. leasing
（2）Lease
①Tellus is the leasor
Lease income
Date of Lease
lessor lessee Type of lease Date of Starting recognition
ending income
basis
Shenzhen Ren Fu Te Li
Shenzhen Tellus(Group)
Automobile Service Houses leasing 2005-1-1 2025-1-1 Contract price 5,150,000.00
Holding Co., Ltd.
Co.,Ltd.
Shenzhen Tellus Shenzhen Xinyongtong
Xinyongtong Automobile Automobile Service Co., Houses leasing 2012-4-1 2015-3-31 Contract price 322,701.00
Development Co., Ltd. Ltd.
Shenzhen Tellus Shenzhen Xinyongtong Houses leasing 2012-4-1 2015-3-31 Contract price 236,700.00
166
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Xinyongtong Automobile Dongxiao Automobile Parts
Development Co., Ltd. Sales Co., Ltd.
Shenzhen Tellus
Shenzhen Xinyongtong Equipment
Xinyongtong Automobile 2008-7-1 2016-6-30 Contract price 141,680.00
Tenology Co., Ltd. leasing
Development Co., Ltd.
（3）Gurarantee between related parties
There are no guarantee exist between related parties in this report period
（4）Borrowed and lent fund from related parties
Date of Date of
Related parties Amount Illustration
Starting ending
Borrowed：
Shenzhen Tefa Development Center Construction
5,000,000.00 2011/11/1 2012/10/31 For fund flow，redeemed
Management Co.,Ltd.
Shenzhen Tefa Group Co.,Ltd. 73,000,000.00 2012/12/25 2015/12/24
Shenzhen Tefa Group Co.,Ltd. 45,000,000.00 2012/8/1 2012/9/30 redeemed
Shenzhen Tefa Group Co.,Ltd. 60,000,000.00 2012/5/7 2012/5/11 redeemed
（5）Lending between related parties
Related parties 2012 2011
Tellus as the lender：
Shenzhen Xing Long Mechanical Models Co.,Ltd. 76,249.97 76,041.64
Tellus as the borrower：
Shenzhen Tefa Development Center Construction Management Co.,Ltd. 280,618.89 286,336.00
Shenzhen Tefa Group Co.,Ltd. 2,067,969.39 1,588,687.52
Pricing policy: Payment for the use of state funds is measured by market interest rate.
（6）Remuneration to key management personel
167
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Range of annual remuneration 2012 2011
Total 42.9million 39.1million
Within: (Number of management peronnel in each range)
Over 2 million 10 10
1.5 million to 2 million 0 1
1million to1.5million 0 0
Less than 1 million 5 3
6、Receivables from and payables to related parties
（1）Receivables owed by and advances paid to related parties
Ending balance Opening balance
Items Provision for Provision for
Book amount Book amount
bad debt bad debt
Accounts receivable：
Shenzhen Xinyongtong Automobile Service Co.,Ltd. 927,602.00 193,247.50 850,301.00 61,838.80
Shenzhen Xinyongtong Dongxiao Automobile Parts Sales
680,400.00 141,750.00 623,700.00 45,360.00
Co.,Ltd.
Total 1,608,002.00 334,997.50 1,474,001.00 107,198.80
Other receivables：
Shenzhen Tellus Automobile Services Chains Development
1,360,257.00 205,500.00 770,000.00 88,000.00
Co.,Ltd.
Shenzhen Xinyongtong Tenology Co.,Ltd. 176,480.22 16,000.00 80,000.00 4,000.00
Shenzhen Xinyongtong Xinda Inspection Eqiupment Co.,Ltd 512,131.47 -- 498,893.47 --
Shenzhen Pilot New Chemical Materials Co.,Ltd. 708,072.26 708,072.26 708,072.26 708,072.26
Shenzhen Xing Long Mechanical Models Co.,Ltd. 1,882,211.38 845,949.48 1,805,961.41 807,928.66
Shenzhen Tellus Xinyongtong Automobile Service Co.,Ltd. 224,020.16 32,033.03 267,716.62 9,979.33
Shenzhen Tellus Xing Investment Co.,Ltd. 571.95 -- 1,172.19 --
Shenzhen Tellus Jimeng investment Co.,Ltd. 9,973.86 -- -- --
Total 4,873,718.30 1,807,554.77 4,131,815.95 1,617,980.25
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SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Ending balance Opening balance
Items Provision for Provision for
Book amount Book amount
bad debt bad debt
Long-term receivables
Shenzhen Tellus Automobile Services Chain Co.,Ltd. 2,179,203.68 2,179,203.68 2,341,645.69 --
Total 2,179,203.68 2,179,203.68 2,341,645.69 --
（2）Payables to related parties、and received in advance from related parties
Items Ending balance Opening balance
short-term borrowings
Shenzhen Tefa Group Co.,Ltd. 19,081,155.00 19,192,388.00
Shenzhen Tefa Development Center Construction Management Co.,Ltd. -- 5,000,000.00
Total 19,081,155.00 24,192,388.00
Accounts payable：
Zhenzhen Tefa Real Estate Co., Ltd. 6,054,855.46 6,054,855.46
Total 6,054,855.46 6,054,855.46
Other payables：
Shenzhen Tefa Real Estate Co., Ltd. 335,701.34 335,701.34
Hongkong Yujia Investment Co., Ltd. 1,882,483.80 1,987,638.36
Shenzhen Tefa Swan Enterprise Co.,Ltd. 20,703.25 20,703.25
henzhen Mechanical Equipment Import and Export Co.,Ltd. 769,116.90 387,833.70
Shenzhen Tefa Group Co.,Ltd. 47,929,481.35 46,272,271.96
Shenzhen Tellus Real Estate(Long Gang) Co.,Ltd. 1,095,742.50 1,095,742.50
Shenzhen Tellus Yan Chun Real Estate Co.,Ltd. 476,217.49 476,217.49
Shenzhen Xing Long Mechanical Models Co.,Ltd. 78,515.56 78,515.56
Shenzhen Tellus Xinyongtong Technoledge Co., Ltd. 355,145.60 --
Total 52,943,107.79 50,654,624.16
Long-term payables
Shenzhen Tefa Group Co.,Ltd. 73,000,000.00 --
169
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Items Ending balance Opening balance
Total 73,000,000.00 --
Ⅸ、Contingency
1、Significant lawsuits and arbitrations
（1）In October of 2005, a lawsuit was brought before Shenzhen Luo Hu District People‘s Court by the
Company, which was the recognizor 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, which were all dealt as a loss in last report term.) It was the amount
money that was distrained forcibly. The Fu Tian District People‘s Court had adjudged that the Company
won the lawsuit and the forcible execution had been applied by the Company.
In April 2006 Shenzhen Development Bank brought an accusation against Jintian‘s overdueing loan two
million U.S. dollars and the company who guaranteed for this case. 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 the 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 at the end of the Octorber 31, 2012.
（2）、Shenzhen Tellus Real Estate Development Co., Ltd. (―Real Estate Co.,‖), a wholly-owned
subsidiary of the company, entered into a Joint Property Construction Contract with Shenzhen Jinlu
Industrial and Trade Company (―Jinlu Company‖) at November 29, 1994 to build a real estate in
Shenzhen. Real Estate Co. paid RMB 9,800,000 to Jinlu Company as of December 31, 1996. However,
Jinlu Company breached the contract and cooperated with Guangzhou Military Area Shenzhen
Property Administrative Department (―GMAA‖) to develop the real estate and paid the RMB9,800,000
received from Real Estate Co. to GMAA. Therefore, Real Estate Co. lodged a claim against Jinlu
Company. The Futian District People‘s Court admitted GMAA as the third party of this case according to
the law of the PRC. It was ruled by the Futian District People‘s Court that the contract was of no effect;
GMAA shall repay Jinlu Company the principal of RMB9,800,000 、 interests and judicial proceeding
expense, which shall be transferred to Real Estate Co. within three days of the reception by Jinlu
Company. GMAA applied for further trial that was allowed, and the original judgement was suspended
during the retrial. Since the target of the litigation was located out of Futian District, the second trial was
undertaken by the Shenzhen Intermediate People‘ Court at March 18, 2003, which overruled the
judgment of the Futian District People‘s Court. The Shenzhen Intermediate People‘s Court admitted
170
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
that the original contract entered between Real Estate Co. and Jinlu Company was still effective.
As Real Estate Co.was still under negotiation with Jinlu Company, in the opinion of directors, no further
provision was deemed necessary as of the balance sheet date. Up to the date of the approval of these
financial statements, the settlement consultation of the two parties was still on going. The company has
recognized bad debt provision in full to developing fund of Tellus Real Estate.
（3）、In June 20, 2012，the Company received the civil judgment from the Shenzhen Futian People‘s
Court, about the contract dispute between Shenzhen Guangming Watch Co., Ltd. and People‘s
Construction Bank of China-Shenzhen Baoan Branch, due to the Ezhou Liantai Investment consulting
Co., Ltd. Sued Tellus‘s subsidiary- Shenzhen Automobile Industry and Trading Co., Ltd.
Guangming Watch Co., Ltd. is an associate of Shenzhen Automobile Industry and Trading Co., Ltd.,
The Automobile Industry and Trading participated 10% of shares to Guangming Watch Co., Ltd. in 1990.
The Guangming Watch lent 20 million short-term loans for 9month in Dec. 12, 1990. The Guangming
Watch repaid 1million in Oct. 1992.
According to Shenzhen Baoan People‘s Court (1996) Bao Fa ―Jing‖ Zi NO.183 civil judgment, verdict
the Guangming Watch Co., Ltd. repays the principal and interest of 19million loan, and the civil
judgment of Shenzhen Intermediate People's Court (1996) Shen Zhong Fa (Jing yi Zhong) Zi
NO.563remain the first judgement. The Guangming Watch Co., Ltd. did not repay the loan after the
verdiction. Then the Construction Bank apply enforcement, token back 16.4million，there are no more
other assets to execut, Shenzhen Baoan People‘s Court verdict Termination of execution by Shen Bao
Fa ―zhi‖Zi NO.220 in May 20, 2003. The original debtor Construction Bank transfered the debt to Asset
Management Co., Ltd. in June, 2004, gone by several time transformations, Ezhou Liantai Investment
consulting Co., Ltd. acquired the claim power in April, 2008.
Guangming Watch Co., Ltd. was canceled the business licence by Shenzhen Adminstration of Industry
and Commerce in Feb. 28, 2002. Ezhou Liantai Investment consulting Co., Ltd. sued Guangming
Watch Co., Ltd. and Shenzhen Automobile Industry and Trading Co., Ltd., the plaintiff want the court
verdict Guangming Watch Co., Ltd. repay 36.07million debts and the interest formed after May 11, 2012.
Shenzhen Automobile Industry and Trading Co., Ltd. as the last shareholder, did not establish a
liquidate team to liquidate the associate in legal deadline, ―should bear the joint liability‖.The Futian
court call the first treatment for this litigation. As the case is complicated, the court did not give a
decision on the court.
The Tellus connot predict the result of the litigation，according《Sino-foreign Joint Ventures Law》section
four：―the format for Joint Ventures is limited liability company,every party of the Joint Ventures share
the profit and undertake the risk 、loss depends on registered capital assets. The company only own
10% of shares in Guangming Watch Co., Ltd., the capital is sufficient, so we don‘t need to undertake
171
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
other liability.
Ⅹ、Commitment issues
1、Significant Commitment issues
Capital commitment
RMB
Item Ending balance Opening balance
Signed but not confirmed in financial report
- commitment of purchase long-term assets * 26,339,111.00 --
Total 26,339,111.00 --
*Note：The subsidairy(Zhongtian Co., Ltd.) gained the land using right by remising method , land
payable is RMB 52,678,223(Inculding remised charge of land use right、charge of land development
and charge of municipal facilities).Zhongtian Co., Ltd. Paid 50% of the land price, according to the land
remise agreement,the remaining amount(RMB26,339,111.00) should be paid in one year.
Ⅺ、Subsequent Event
1、 Significant subsequent event
（1） In march 28, 2013, the company approved the proposal of selling the Dongfeng Building sixth,
seven-story in the second extraordinary general meeting of shareholders in 2013.
（2）Guangxi Tellus Automobile Service Co., Ltd. is an associate, owned by the Tellus‘s subsidiary
(Automobile Industry and Trading Co., Ltd.) and Guangxi Hezhou Guidongsong Power Transformation
Engineering Co., Ltd.), the registered capital is 50 million, paid-up capital is 10 million. The
Automobile Industry and Trading Co., Ltd. hold 60% of stock right, due to the environment changes and
company strategy adjustment, in March 12, 2013, the general meeting of shareholder decides to
terminate of Guangxi Tellus‘s operation, then get in dissolut and liquidate stage. Up to Dec. 31, 2012,
the book value of net assets is RMB 783,527.03 in Guangxi Tellus Co., Ltd.
2、Subsequent dividends distribution
Pursuant to the resolution of Board at the Board of Directors‘ meeting on April 9, 2012, the company
does not distribute dividends in 2012, and not increase capital reserve .The allocation of profit
resolution need the board of shareholders to approval.
Ⅻ、Other significant events
1、Debts Restructuring
In December 31, 2012,Tellus Signed a contract with Agricultural Bank of China Limited by Share Ltd
Shenzhen Shangbu Branch（hereinafter referred to as―Shenzhen Agricultural Bank ‖） , the contract is
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SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
〈Exempt from guarantee liability agreement〉. The two partied agreed that up to May 20, 2012, the
company provide guarantee to Petrochemical Corporation(石化公司) for 576 millionl loan、interest
and advanced judicial proceeding expense, induced Tellus have to undertake the liability of joint
suretyship.
Now, Tellus discharge the duty of loan guarantee to pay the 576million loan 、interest and advanced
judicial proceeding expense total in 66,401,271.43 for Petrochemical Corporation , the Tellus would pay
this amount in 1 month after the agreement effective to Agricultural Bank appointed account in one-time.
After the Tellus discharge the duty as agreed, the Agricultural Bank agree to exempt the joint suretyship
liablity of Tellus for the unpaid loan interest and increased interest after May 20, 2012.
Tellus counted the Accrued liabilities for 87,568,728.57 in 2006. In December 25, 2012, the company
paid 66,401,271.43 to the Agricultural Bank, discharged the guarantee liability , and recorded the
interest as non-operating income.
2、Assets and liabilities measured by fair value
Changes in
Opening Accumulated changes Current year Closing
Category current year fair
balance recored in equity impairment balance
value
Financial assets
Tradable financial assets 1,374,249.25 217,657.00 1,413,452.05 -- 1,591,906.25
Total financial assets 1,374,249.25 217,657.00 1,413,452.05 -- 1,591,906.25
XIII、Notes to Items in the Financial Statements of the Company
1、Accounts receivable
（1） Accounts receivable by categories
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Accounts receivable of which provision for bad debts is of individually
-- -- -- --
significant
Accounts receivable of which provision for bad debts are accrued by
-- -- -- --
portfolios
Accounts receivable of which provision for bad debts is of individually
484,803.08 100.00 484,803.08 100.00
insignificant
Total 484,803.08 100.00 484,803.08 100.00
173
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
（Continued）
Closing balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Accounts receivable of which provision for bad debts is of individually
-- -- -- --
significant
Accounts receivable of which provision for bad debts are accrued by
-- -- -- --
portfolios
Accounts receivable of which provision for bad debts is of individually
484,803.08 100.00 484,803.08 100.00
insignificant
Total 484,803.08 100.00 484,803.08 100.00
（2）Accounts receivable by aging balance
Closing balance Opening balance
Item
Amount (%) Amount (%)
Within 1 year -- -- -- --
1-2 years -- -- -- --
2-3 years -- -- -- --
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）Bad debt provision
Bad debt provision of accounts receivable which is of individually significant
Amount of bad Proportion of
Content of accounts receivable Carrying amount Reasons for the provision
debt provision
Shenzhen Bijiashan Entertainment
172,000.00 100% 172,000.00 Aging long，not expected to withdraw
Co.,Ltd.
Saige Retail Store 97,806.64 100% 97,806.64 Aging long，not expected to withdraw
Guangzhou Lemin Computer
86,940.00 100% 86,940.00 Aging long，not expected to withdraw
Center
Other Companies 128,056.44 100% 128,056.44 Aging long，not expected to withdraw
Total 484,803.08 100% 484,803.08
（4）There are no clearance of large receivables exist in this reporting period.
174
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
（5）As at 31 December 2011, no balances included in above accounts receivable are due from the
shareholders of the Company who hold over 5% shares with voting rights.
（6）Top five other receivables
Relationship with the % of total accounts
Name of companies Amount Duration
company receivable balance
Shenzhen Bijiashan Entertainment
Third Party 172,000.00 3 年以上 35.48
Co.,Ltd.
Saige Retail Store Third Party 97,806.64 3 年以上 20.17
Guangzhou Lemin Computer Center Third Party 86,940.00 3 年以上 17.93
Lanzhou Daichuan Electronic Co.,Ltd. Third Party 37,308.00 3 年以上 7.70
Sichuan Shentong Electronic Computer
Third Party 28,764.00 3 年以上 5.93
Company
Total 422,818.64 87.21
（7）There are no Accounts receivable due from related parties.
2、Other receivables
（1）Disclosure by category
Closing Balance
Category Carrying amount Allowance for bad debt
Amount % Amount %
Other receivables of which provision for bad debts is of individually
12,286,066.45 18.09 12,286,066.45 100.00
significant
Other receivables of which provision for bad debts are accrued by
54,484,027.78 80.21 1,452,128.87 2.67
portfolios
Other receivables of which provision for bad debts is of individually
1,157,688.20 1.70 1,157,688.20 100.00
insignificant
Total 67,927,782.43 100.00 14,895,883.52 21.93
175
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
（Continued）
Opening balance
Category Carrying amount Bad debt provision
Amount (%) Amount (%)
Other receivables of which provision for bad debts is of individually
12,286,623.82 35.69 12,286,623.82 100.00
significant
Other receivables of which provision for bad debts are accrued by
20,983,882.89 60.95 1,416,048.22 6.75
portfolios
Other receivables of which provision for bad debts is of individually 1,157,688.20 3.36 1,157,688.20 100.00
insignificant
Total 34,428,194.91 100.00 14,860,360.24 43.16
（2）Other receivables by aging balance
Closing balance Opening balance
Item
Amount (%) Amount (%)
Within 1 year 51,641,333.54 76.03 18,019,423.97 52.34
1-2 years 111,541.64 0.16 76,041.64 0.22
2-3 years 76,041.64 0.11 106,541.64 0.31
Over 3 years
16,098,865.61 23.70 16,226,187.66 47.13
Total
67,927,782.43 100.00 34,428,194.91 100.00
（3）Bad debt provision
① Bad debt provision of other receivables which is of individually significant
Amount of bad Proportion of
Content of accounts receivable Carrying amount Reasons for the provision
debt provision
ShenZhen ZhongHao (Group) Co.,Ltd. 5,000,000.00 5,000,000.00 100.00% Unwithdraw
Aging long ， not expected to
Jinbeili electrical appliances Co.,Ltd. 2,706,983.51 2,706,983.51 100.00%
withdraw
Aging long ， not expected to
Shenzhen Petrochemical Group 1,895,155.10 1,895,155.10 100.00%
withdraw
Aging long ， not expected to
Huatong casing Co.,Ltd. 1,212,373.79 1,212,373.79 100.00%
withdraw
176
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Amount of bad Proportion of
Content of accounts receivable Carrying amount Reasons for the provision
debt provision
Shenzhen Xiandao chemical materials Aging long ， not expected to
708,072.26 708,072.26 100.00%
Co.,Ltd. withdraw
Aging long ， not expected to
Others 763,481.79 763,481.79 100.00%
withdraw
Total 12,286,066.45 12,286,066.45 100.00%
②Bad debt provision by portfolios
Closing balance Opening balance
Age Carrying amount Bad debt Carrying amount Bad debt
Amount (%) provision Amount (%) provision
Within 1 year 51,452,507.57 94.44 -- 18,019,423.97 85.87 --
1 to 2 years 94,041.64 0.17 4,202.08 76,041.64 0.36 3,802.08
2 to 3 years 76,041.64 0.14 17,208.33 106,541.64 0.51 21,308.32
Over 3 years 2,861,436.93 5.25 1,430,161.09 2,781,875.64 13.26 1,390,937.82
Total 54,484,027.78 100.00 1,452,128.87 20,983,882.89 100.00 1,416,048.22
④ Bad debt provision of other receivables which is of individually insignificant
Proportion of
Content of other receivables Carrying amount Amount of bad debt Reasons for the provision
provision
Staffs‘purchasing for real Aging long ， not expected to
217,892.57 100.00% 217,892.57
estate withdraw
Aging long ， not expected to
939,795.63 100.00% 939,795.63
Others withdraw
合 计 1,157,688.20 1,157,688.20
（4）During the reporting period, no other receivables were cleared.
（5）As at 31 December 2011, no balances included in above other receivable are due from the
shareholders of the Company who hold over 5% shares with voting rights.
（6）Top five other receivables
Relationship to the % of total other
Name of companies Amount Duration
Company receivable balance
177
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
ShenZhen ZhongHao (Group) Co.,Ltd. Third party 5,000,000.00 Over 3 years 7.36
Jinbeili electrical appliances Co.,Ltd. Third party 2,706,983.51 Over 3 years 3.99
Shenzhen Petrochemical Industry (Group)
Other investee 1,895,155.10 Over 3 years 2.79
Co., Ltd.
Shenzhen Xing Long Mechanical Model
associate 1,882,211.38 1 to 4 years 2.77
Co.,Ltd.
Huatong casing Co.,Ltd. Third party 1,212,373.79 Over 3 years 1.78
Total 12,696,723.78 18.69
（7）Other receivable due from related parties
% of total other
Name of companies Relationship to the Company Amount
receivable balance
Shenzhen Xing Long Mechanical Model
associate 1,882,211.38 2.77
Co.,Ltd.
Shenzhen Xiandao chemical materials Co.,Ltd. associate（liquidated） 708,072.26 1.04
Shenzhen Tellus Jimeng Investment Co.,Ltd. Joint venture 9,973.86 0.01
Shenzhen Tellus Xing Investment Co.,Ltd. Joint venture 571.95 --
合 计 2,600,829.45 3.83
3、 Long-term equity investments by types
（1）Disclosure by category
Item Opening balance Increase Decrease Closing balance
Investment in subsidiaries 263,839,543.61 -- -- 263,839,543.61
invested in joint ventures 34,007,714.13 33,969,318.69 -- 67,977,032.82
Invested in associates 72,008,140.08 -- 1,262,254.09 70,745,885.99
Other equity investments 28,084,779.52 -- -- 28,084,779.52
Less：provisions for long-term equity investment
17,908,162.32 -- -- 17,908,162.32
impairment
Total 380,032,015.02 33,969,318.69 1,262,254.09 412,739,079.62
（2）Details of long-term equity investments
Changes
Accounting [Increase
Investee Investment cost Opening balance Closing balance
method /decrease]
Shenzhen Tefa Tellus Real Estate
Cost method 31,152,888.87 31,152,888.87 -- 31,152,888.87
Co.,Ltd.
178
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Changes
Accounting [Increase
Investee Investment cost Opening balance Closing balance
method /decrease]
Shenzhen Tefa Tellus Property
Cost method 5,021,970.88 5,021,970.88 -- 5,021,970.88
Management Co., Ltd.
Shenzhen Tellus Xinyongtong Automobile
Cost method 57,672,885.22 57,672,885.22 -- 57,672,885.22
Development Co.,Ltd.
Shenzhen Zhongtian.shiye Industrial
Cost method 10,708,622.90 10,708,622.90 -- 10,708,622.90
Co.,Ltd
Shenzhen Automobile Industry and
Cost method 126,251,071.57 126,251,071.57 -- 126,251,071.57
Trading Co.,Ltd.
Shenzhen Tefa Huari Automobile
Cost method 19,224,692.65 19,224,692.65 -- 19,224,692.65
Enterprise Co.,Ltd.
Shenzhen Tellus Real Estate Exchange
Cost method 2,000,000.00 2,000,000.00 -- 2,000,000.00
Co.,Ltd.
Shenzhen Huari Toyota Automobile
Cost method 1,807,411.52 1,807,411.52 -- 1,807,411.52
Co.,Ltd.
Shenzhen Xinyongtong Automobile
Cost method 10,000,000.00 10,000,000.00 -- 10,000,000.00
Inspection Equipment Co.,Ltd.
Shenzhen Tellus Jimeng Investment
Equity method 61,852,480.00 25,433,598.67 33,817,001.47 59,250,600.14
Co.,Ltd.*Note①
Shenzhen Tellus Xing Investment Co.,Ltd. Equity method 13,600,000.00 8,574,115.46 152,317.22 8,726,432.68
Shenzhen Xing Long Mechanical Model
Equity method 2,554,392.64 6,240,588.58 -262,333.84 5,978,254.74
Co.,Ltd.
Shenzhen Tellus Automobile Service
Equity method 800,000.00 -- -- --
Development Co.,Ltd.
Shenzhen Ren Fu-Tellus Automotive
Equity method 10,500,000.00 65,767,551.50 -999,920.25 64,767,631.25
Service Co.,Ltd.
Shenzhen Xiandao chemical materials
Cost method 7,256,401.38 4,751,621.62 -- 4,751,621.62
Co.,Ltd.
Hunan Changyang Industrial Co.,Ltd. Cost method 6,900,000.00 1,810,540.70 -- 1,810,540.70
Shenzhen Hanli ceramics Co.,Ltd. Cost method 3,466,000.00 1,956,000.00 -- 1,956,000.00
179
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Changes
Accounting [Increase
Investee Investment cost Opening balance Closing balance
method /decrease]
Shenzhen Jiecheng Electronic Co.,Ltd. Cost method 3,150,000.00 3,225,000.00 -- 3,225,000.00
China Perfect Machinery Industry
Cost method 10,176,617.20 10,176,617.20 -- 10,176,617.20
Co.,Ltd.
Shenzhen Jingwei Industrial Co.,Ltd. Cost method 4,000,000.00 4,000,000.00 -- 4,000,000.00
Shenzhen Mosike 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
Cost method 700,000.00 700,000.00 -- 700,000.00
Co.,Ltd.
Total 390,260,434.83 397,940,177.34 32,707,064.60 430,647,241.94
（continued）
Proportion Proportion of Provision
of voting power Explanation of the Provision for for
Cash dividend for
Investee ownership in the inconsistency between impairmen
the period
interest investee these two proportions impairment losses t losses for
held (%) (%) the period
Shenzhen Tefa Tellus Real
Estate Co.,Ltd. 100 100 -- -- --
Shenzhen Tefa Tellus Property
Management Co., Ltd. 100 100 -- -- --
Shenzhen Tellus Xinyongtong
Automobile Development 100 100 -- -- --
Co.,Ltd.
Shenzhen Zhongtian.shiye
Industrial Co.,Ltd 100 100 -- -- --
Shenzhen Automobile Industry
and Trading Co.,Ltd. 100 100 -- -- --
Shenzhen Tefa Huari Automobile
Enterprise Co.,Ltd. 60 60 -- -- 423,211.13
Shenzhen Tellus Real Estate
Exchange Co.,Ltd. 100 100 -- -- --
Shenzhen Huari Toyota
Automobile Co.,Ltd. 60 60 -- -- 1,759,735.46
Shenzhen Xinyongtong
Automobile Inspection 51 51 -- -- --
Equipment Co.,Ltd.
180
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Proportion Proportion of Provision
of voting power Explanation of the Provision for for
Cash dividend for
Investee ownership in the inconsistency between impairmen
the period
interest investee these two proportions impairment losses t losses for
held (%) (%) the period
Shenzhen Tellus Jimen
50 50 -- -- --
Investment Co.,Ltd.
Shenzhen Tellus Xing
50 50 -- -- --
Investment Co.,Ltd.
Shenzhen Xing Long Mechanical
30 30 -- -- 105,000.00
Model Co.,Ltd.
Shenzhen Tellus Automobile
40 40 -- -- --
Service Development Co.,Ltd.
Shenzhen Zung Fu-Tellus
35 35 -- -- 3,500,000.00
Automotive Service Co.,Ltd.
Shenzhen Xiandao chemical
40 40 4,751,621.62 -- --
materials Co.,Ltd.
Hunan Changyang Industrial
36.55 36.55 1,810,540.70 -- --
Co.,Ltd.
Shenzhen Hanli ceramics
80 80 1,956,000.00 -- --
Co.,Ltd.
Shenzhen Jiecheng Electronic
45 45 3,225,000.00 -- --
Co.,Ltd.
China Perfect Machinery
5.30 5.30 -- -- --
Industry Co.,Ltd.
Shenzhen Jingwei Industrial
12.50 12.50 4,000,000.00 -- --
Co.,Ltd.
Shenzhen Mosike Co.,Ltd. 7 7 825,000.00 -- --
Wuhan Weite Hotel 640,000.00 -- --
Shenzhen Petroleum & 10 million 10 million sh
700,000.00 -- --
Chemical Co.,Ltd. shares ares
Total 17,908,162.32 -- 5,787,946.59
*Note①The company increase the investment of Shenzhen Tellus Jimeng Investment Co., Ltd.
To335million.
（3） There are no limitations exist in liability of switching financial resources to investees in long-term
equity investment.
（4）Provision for impairment of long-term investments
Item Opening balance Increase Decrease Closing balance
181
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Item Opening balance Increase Decrease Closing balance
Other long-term equity investments
Shenzhen Xiandao chemical materials Co.,Ltd. 4,751,621.62 -- -- 4,751,621.62
Hunan Changyang Industrial Co.,Ltd. 1,810,540.70 -- -- 1,810,540.70
Shenzhen Hanli 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 (Moscow) Co.,Ltd. 825,000.00 -- -- 825,000.00
Wuhan Weite Hotel 640,000.00 -- -- 640,000.00
Shenzhen Petroleum & Chemical (group)Co.,Ltd. 700,000.00 -- -- 700,000.00
Total 17,908,162.32 -- -- 17,908,162.32
4、Operating income and operating costs
（1）Operating income and operating costs
Amount for the
Item Amount for the current year
last year
Principal operating income 14,936,256.61 13,353,977.17
Other operating income -- --
Total 14,936,256.61 13,353,977.17
Principal operating cost 4,205,086.89 4,085,746.61
Other operating cost -- --
Total 4,205,086.89 4,085,746.61
（2）Principal operating activities (classified by industries)
Amount for the
Amount for the current year
Name of industry last year
Operating income Operating costs Operating income Operating costs
Rent service 14,936,256.61 4,205,086.89 13,353,977.17 4,085,746.61
Total 14,936,256.61 4,205,086.89 13,353,977.17 4,085,746.61
（3）Principal operating activities（classified by geographical areas）
182
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Name of geographical Amount for the current year Amount for the prior period
area Operating income Operating costs Operating income Operating costs
Shenzhen 14,936,256.61 4,205,086.89 13,353,977.17 4,085,746.61
Total 14,936,256.61 4,205,086.89 13,353,977.17 4,085,746.61
（4）Operating income from the Company‘s top 5 customers
Period Total operating income Proportion to total operating income（%）
2012 8,065,624.00 54.00
2011 7,349,819.50 55.04
5、Investment Income
（1）Details of Investment income
Amount for the
Name of investee Amount for the current year
last year
Investment income from long-term investments under cost method 2,784,849.38 437,747.48
Income from long-term investments under equity method 2,689,622.59 8,810,834.39
Income generated from tradable financial assets 48,625.50 33,574.75
Total 5,523,097.47 9,282,156.62
Note：There are not significant restrict in investment income regain.
（2）Investment income from long-term investments under cost method
Amount for the
Name of investee Amount for the current year
last year
China Perfect Machinery Industry Co.,Ltd. 601,902.79 437,747.48
Shenzhen Tefa Huari Automobile Enterprise Co.,Ltd(The Hua Ri )*Note① 423,211.13 --
Shenzhen Huari Toyota Automobile Co., Ltd(The Huari Toyota)*Note① 1,759,735.46 --
Total 2,784,849.38 437,747.48
* Note①the holding subsidiary company(The Hua Ri and The Huari Toyota) distributed the profit of
previous years.
（3）Income from long-term investments under equity method
183
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Amount for the
Name of investee Amount for the current year Reasons for changes
last year
Shenzhen Ren Fu Tellus Automobiles Services Co.,
2,500,079.75 9,762,798.85 Investee‘s profit decrease
Ltd.
Others 189,542.84 -951,964.46 Investee‘s profit decrease
Total 2,689,622.59 8,810,834.39
6、Supplementary information to the cash flow statement
Item Current year Last year
（1）Reconciliation of net profit to cash flows from operating
activities:
Net profit 5,610,003.20 631,428.62
Add: Provision for impairment loss of assets 2,214,726.96 929,897.61
Depreciation of fixed assets, bio-assets, and natural gas 4,087,243.29 4,030,171.42
Amortization of intangible assets 47,499.96 47,499.96
Amortization of long-term deferred expenses 69,826.02 122,097.84
Loss on non-current assets disposal (gain as in "-") 435.00 --
Loss on scrap of fixed assets (gain as in"-") -- --
Loss on fair value changes (gain as in"-") -- --
Financial costs (gain as in "-") 4,102,486.94 3,166,247.88
Investment loss (gain as in "-") -5,523,097.47 -9,282,156.62
Decrease in deferred tax assets(increase as in "-") 30,061.38 771,878.65
Increase of deferred tax liabilities（increase as in "-"） 54,414.25 --
Decrease of inventories (increase as in "-") -- --
Decrease of operating receivables（(increase as in "-"） -29,837,414.79 5,224,636.17
Increase in operating payables（decrease as in "-"） 23,218,851.12 -4,168,995.31
Others -- --
Net cash flows from operating activities 4,075,035.86 1,472,706.22
（2）Investing and financing activities that do not affect cash receipt and
payment：
Liabilities converted capital -- --
Convertible loan due within one year -- --
Fixed assets subject to finance leases -- --
（3）Net increase in cash and cash equivalents:
Cash at the end of the period 1,614,187.49 64,442.86
184
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Item Current year Last year
Less: cash at the beginning of the period 64,442.86 324,541.62
Add: cash equivalents at the end of the period -- --
Less: cash equivalents at the beginning of the period -- --
Net increase in cash and cash equivalents 1,549,744.63 -260,098.76
XIV、Supplementary information
1、Non-recurring profit and loss
Item Current year Last year
Gains from disposals of non-current assets after expending impairment provisions *Note① 15,152,740.17 -2,474,496.72
Exceeded-authority approved, non-official approved or accidental tax repayment and relief -- --
Government grants recognized through profit or loss for the current reporting period, excluding
grants which are closely related to the Company‘s operating activities and of which the quota or -- --
approval is eligible for automatic renewal in accordance with relevant regulations
Financial resource usage fees charged on non-financial institution recognized through profit or
-- --
loss for the current reporting period
Gains arising from bargain purchase in business combination and investments in associates and
-- --
joint ventures
Non-monetary asset exchange -- --
Consigned investment and asset management -- --
Impairment provision resulting from force majeure, e.g. natural disasters -- --
debt restructuring *Note② 14,377,457.14 --
Entity restructuring expenses, e.g., expenditure for layoff of employees, integration expenses, etc. -- --
Profit or loss attributable to the evidently unfair portion of transaction price, being transacted price
-- --
in excess of fair transaction price, of a transaction
Net profits or losses achieved by an acquired under-common-control entity during the period from
-- --
the start of the period to the acquisition date
Gains or losses arising from contingent events unconnected with the Company‘s daily operating
-- --
activities
Fair value changes of tradable financial assets and tradable financial liabilities held and gains or
losses arising from disposals of tradable financial assets, tradable financial liabilities and
-- --
available-for-sale financial assets, excluding hedging contracts relevant to the Company‘s daily
operating activities
185
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Item Current year Last year
Reversal of provision for account receivables that are tested for impairment losses individually -- --
Profit or loss on entrusted loans -- --
Profit or loss on changes in the fair value of investment properties that are subsequently
-- --
measured using the fair value model
Effects on profit or loss of one-off adjustment to profit or loss for the period according to the period
-- --
requirements of tax laws and accounting laws and regulations
Custodian fees earned from entrusted operation -- --
Other non-operating income or expenses other than the above *Note③ 65,402.35 13,464,148.60
Other profit or loss that meets the definition of non-recurring profit or loss -- --
Subtotal 29,595,599.66 10,989,651.88
Tax effects -7,398,899.92 -2,637,516.45
Effects attributable to minority interests (after tax) 10,336.31 3,654.71
Total 22,207,036.05 8,355,790.14
Note：‖+‖ means income or gain and ―-‖ means loss or expense
The Group defines items as non-recurring profit or loss items according to ―Information Disclosure and
Presentation Rules for Companies Making Public Offering of Securities No.1---Non-recurring Profit or
Loss‖(CSRC No.[2008]43)
*Note①Contains the subsidiary (The Automobile Industry and Trading) proceeds of investment
properties –3 sets of eighth floor of Dong Feng building , podium building B4 of
NO.5、NO.6、NO.7 of Wei Peng park, shops A1、b5 and room NO.105 of the fourth business building,
The disposal proceeds is RMB 15,192,192.09.
*Note②detail refer to Note Ⅻ、Other significant affairs.
*Note③Last year contains the relocation compensation of 5 sets of bachelordom dormitory which
amount to RMB 4,643,360.00, liquidation of debt in RMB 8,907,320.12,as unable to pay the debts to
the debtors more than 10 years due they without recourse.
2、Rate of return on net assets and earnings per share
Rate of the weighted average net Earnings per share (RMB/share)
Profit category
profit Basic EPS Diluted earnings per share
Net profit attributable to ordinary
3.95% 0.0324 0.0324
shareholders
186
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Rate of the weighted average net Earnings per share (RMB/share)
Profit category
profit Basic EPS Diluted earnings per share
Recurring profit or loss attributable to
-8.32% -0.0684 -0.0684
ordinary shareholders
187
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
3、Abnormal financial statements items and description of reasons
Adjusted balance Changes
Item Changed Ratio of Illustration
2012 2011
amount change
Assets：
The prepaid automobile payment decrease
Prepayments 8,453,261.56 12,953,848.48 -4,500,586.92 -34.74%
in the subsiary-Huari Toyota Co., Ltd.
ending balance of inventories in
Inventories 47,813,852.20 30,218,346.71 17,595,505.49 58.23%
subsidiary( the Huari Toyota) increased
Deductible input tax,the subsidiary-Huari
Toyota increased the amount of
Other current assets 7,495,557.97 -- 4,871,209.13 100.00%
automobile purchased at the end of the
period.
Long-term extracting the bad debts in the entire
-- 2,341,645.69 -2,341,645.69 -100.00%
receivables amount
the prophase expenditure of the land and
Construction in
12,977,929.03 2,461,073.03 10,516,856.00 427.33% project of Tellus international jewelry
progress
square(the first stage) is increased
50% land price prepaid on Tellus
Other non-current
26,339,112.00 -- 26,339,112.00 100.00% international jewllery square( the first
assets
stage)
Liability and
owners’ equity：
Short-term
93,881,155.00 42,792,388.00 51,088,767.00 119.39% increase in bank mortgage loans
borrowings
increase in house sale in advance of the
Advance from subsidiary (The Automobile Industry and
31,857,080.49 2,070,889.22 29,786,191.27 1438.33%
customers Trading) automobile advance payment of
the subsidiary(The Huari Toyota)
Mainly caused by the increases in closing
Taxes and fees
11,845,434.44 7,627,833.60 4,217,600.84 55.29% balance of business income tax and
payable
deductible input VAT reclassified to other
188
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Adjusted balance Changes
Item Changed Ratio of Illustration
2012 2011
amount change
current asset
( the Huari Toyota) distribute the previous
newly annual profit, but the Japanese
Dividends payable 1,455,297.72 -- 1,455,297.72
increased shareholders do not pay the shock
dividend
Non-current
The ending balance of non-current
liabilities due within 12,000,000.00 88,020,000.00 -76,020,000.00 -86.37%
liabilities due within one year decreased
one year
Borrow money from holding company and
Long-term
143,000,000.00 4,680,000.00 138,320,000.00 2955.56% newly increased RMB 700 million bank
borrowings
mortgage loan
Long-term payables increase in
Long-term payables 12,981,872.24 3,920,160.36 9,061,711.88 231.16% subsidiary(The Automobile Industry and
Trading）
Accrued liabilities -- 87,568,728.57 -87,568,728.57 -100.00% restructuring debts in related items
Losses in wholly owned subsidiary and
Minority interests 16,386,114.63 24,015,752.51 -7,629,637.88 -31.77%
distribute profit from prior year
Profit and loss
statement：
Increase in accrued special provision for
Loss on asset
11,158,962.81 5,114,839.34 6,044,123.47 118.17% bad-debt 、 Provision for inventory and
impairment
provision of fixed assets
the profit of the associate (Shenzhen Ren
Investment income 4,907,776.00 8,080,990.33 -3,173,214.33 -39.27% Fu Tellus Automobiles Services Co.,
Ltd. )Reduced
accrued income tax increase by 20.628
Income tax
8,264,624.20 5,354,382.93 2,910,241.27 54.35% million、deferred Income Tax increase by
expenses
8.474 million
189
SHENZHEN TELLUS HOLDING CO., LTD. NOTES TO FINANCIAL STATEMENTS
Adjusted balance Changes
Item Changed Ratio of Illustration
2012 2011
amount change
Cash flow：
Net Cash Flows
Proceeds of aotumobile advance from
from Operating -7,756,382.47 -14,738,664.02 6,982,281.55 47.37%
customers increased
Activities
Sub-total of Cash
Increase in cash inflow from disposal of
Inflows from 31,634,090.29 20,976,554.05 10,657,536.24 50.81%
Investment real estate
Investing Activities
Sub-total of Cash
Cash outflow form construction in progress
Outflows from 64,322,848.76 2,322,621.53 62,000,227.23 2669.41%
and increased investment in related parties
Investing Activities
From
Net cash flows from Increase in cash inflow in borrow money
39,665,927.02 -12,096,262.57 51,762,189.59 negative to
financing activities from holding company and bank increased
positive
190
Shenzhen Tellus Holding Co., Ltd. Annual Report of 2012
Section XI. Documents available for Reference
The Company reserved completed integrated documents for CSRC, SZSE, relevant departments and public
investor for reference, including:
1. Original Accounting Statement of 2012 carrying the signatures and seals of the legal representative,
general manager, CFO and manager of Financial Department;
2. Original Auditors Report (Chinese and English Version) carrying the seals of accounting firms, and
signatures and seals of the CPA;
3. All original documents and notifications of the Company disclosed in newspapers that designated by
CSRC in report period;
4. Annual report disclosed in other securities market (Summary)
Signature of the Chairman: Zhang Ruili
Board of Director of
Shenzhen Tellus Holding Co., Ltd.
9 April 2013
191
