深圳市特力（集团）股份有限公司
SHENZHEN TELLUS HOLDING CO.,LTD
Full Text of Semi-Annual Report 2011
12 August 2011
CONTENTS
Section I. IMPORTTANT NOTICE ____________________________________________________ 01
Section II.CORPORATE BASIC INFORAMTION________________________________________ 01
Section III. CHANGES IN SHARE CAPITAL AND MAJOR SHAREHOLDES’ SHAREHOLDING 04
Section IV . DIRECTORS, SUPERVISORS AND SENIOR MA NAGEMENT__________________ 06
Section V . THE BOARD OF DIRECTORS’ REPROT ____________________________________ 07
Section VI . SIGNIFICANT EVENTS __________________________________________________ 12
Section VII . FINANCIAL REPORT (UN-AUDITED) ____________________________________ 19
Section VIII .DOCUMENTS AVAILABE FOR REFERENCE ______________________________ 83
2
Section I. IMPOTANT NOTICE
Board of Directors, Supervisory Committee of Shenzhen Tellus Holdings Co., Ltd. (hereinafter
referred to as the Company) and its directors, supervisors and senior management hereby
confirm that there are no fictitious records, misleading statements or material omissions
carried in this report, and shall take all responsibilities, individually and/or jointly, for the
reality, accuracy and completion of the contents.
Totaling 9 directors of the Board attended the Meeting.
Mr. Zhang Ruili—Chairman of the Board, Mr. Fu Bin—CFO and Ms. Ke
Wensheng—Manager of the Accounting and Financial Department hereby confirm that the
Financial Report in the Semiannual Report is true and complete.
The Semi-annual Financial Report was not audited.
Section II. CORPORATE BASIC INFORAMTION
I. Company profile
1.Corporate Name: 深圳市特力(集团)股份有限公司
English Name: Shenzhen Tellus Holdings Co., Ltd.
English Shortened Name: Tellus
2. Legal Representative: Zhang Ruili
3. Secretary of the Board: Guo Dongri
Address: Shenzhen Tellus Holdings Co., Ltd.
Tel: (0755)83989328
Fax: (0755)83989386
E-mail: guodongri@yahoo.com.cn
Securities Affair Representative: Sun Bolun
Address: Secretariat of Shenzhen Tellus Holdings Co., Ltd.
Tel: (0755)83989339
Fax: (0755)83989386
E-mail: s9239243@163.com
4. Registered Address: 3 Floor of Tellus Building, No. 56 the Second Shuibei Road, Luohu
District, Shenzhen
Office Address: 15th Floor of Nucleus Building, Shennan Middle Road, Shenzhen
Postal Code: 518031
Corporate Internet Website: www.tellus.cn
5. Newspapers for Information Disclosure
Mainland: Securities Times, Shenzhen
Overseas: Hong Kong Commercial Daily, Hong Kong
Internet Website Designated by CSRC for the Company’s Semi-Annual Report Publication:
http://www.cninfo.com.cn
Preparation Place for the Company’s Semi-Annual Report: 15th Floor of Nucleus Building, Shennan
Middle Road, Shenzhen
6. Exchange for the Company’s Shares Listing: Shenzhen Stock Exchange
Stock Shortened Name and Code: Tellus A (000025) Tellus B (200025)
1
II. Major financial data and indicators
1. Summary of the Company’s main un-audited financial data and indicators in the first half of 2011:
Unit: RMB
Increase/decrease of
Period-end of this Period-end of period-end of this
Item
term last year term over that of
last year (%)
Total assets(RMB) 583,375,952.82 599,555,953.28 -2.70%
Owners’ equity attributable to
shareholders of listed 175,801,254.74 175,274,602.44 0.30%
company(RMB)
Share capital(RMB) 220,281,600.00 220,281,600.00 0.00%
Net assets per share
attributable to shareholders of 0.798 0.796 0.25%
listed company (RMB/share)
Increase/decrease of
Report period Same period of this term over same
Item
(Jan.-Jun.) last year period of last year
(%)
Total operating income(RMB) 178,047,165.38 198,323,188.79 -10.22%
Operating profit(RMB) 716,236.75 1,998,124.54 -64.15%
Total profit(RMB) 578,156.59 2,162,918.51 -73.27%
Net profit attributable to
shareholders of listed 502,339.55 1,098,680.67 -54.28%
company(RMB)
Net profit attributable to
shareholders of listed company
602,711.39 902,428.38 -33.21%
after deducting non- recurring
gain and loss(RMB)
Basic earnings per share
0.002 0.005 -60.00%
(RMB/Share)
Diluted earnings per share
0.002 0.005 -60.00%
(RMB/Share)
0.35 percentage
Weighted average ROE (%) 0.29% 0.64%
points down
Weighted average ROE after
0.19percentage
deducting non-recurring 0.34% 0.53%
points down
gains/losses (%)
Net cash flow arising
from operating 6,776,674.04 -19,733,147.73 134.34%
activities(RMB)
Net cash flow per share
arising from operating 0.031 -0.090 134.34%
activities (RMB/Share)
Item and amount of non-recurring gain and loss:
Unit: RMB
2
Items of non-recurring gains/losses Amount
Fund occupation charge received from non-financial enterprise that
37,708.32
reckoned into current gains/losses
Other non-operating income/expenditure besides the aforementioned
-138,080.16
items
Total -100,371.84
2. There was no substantial difference between statements prepared by Chinese Accounting
Standards (“CAS”) and International Financial Reporting Standards (“IFRC”).
3
Section III. Changes in Share Capital and Major Shareholders’ Shareholding
I. Changes in Company’s Stock
In the Report Period, there were no changes in the Company’s stock total and structure.
II. Total of Company’s shareholders
Total of shareholders at Period-end: as at 30 June 2011, total Company’s shareholders are 18,892,
with A-share holder of 14,813, B-share holders of 4,079.
III. Shareholding of the top ten shareholders at Period-end
Amount
Proporti
of
Nature of on of Total of Amount of
pledged
Name of shareholder sharehold sharehol shares restricted
and/or
er ding held stock
frozen
(%)
stock
State-owned 145,870,5
Shenzhen SDG Co., Ltd 66.22% 14,597,056 0
legal person 60
Domestic
Bu Haowen natural 0.29% 643,300 0 Unknown
person
Domestic
Ling Fengyuan natural 0.23% 512,858 0 Unknown
person
Domestic
Zhuang Yunjiang natural 0.23% 504,800 0 Unknown
person
FISRT SHANGHAI Foreign legal
0.21% 464,678 0 Unknown
SECURITIES LTD. person
Funds,
CMB—South Strategy
financial
Selected Stock Securities 0.20% 448,351 0 Unknown
products
Fund
and others
Domestic
Zhang Xiaoming natural 0.20% 432,760 0 Unknown
person
Guotai Jun’an Securities
Co., Ltd. guarantee
Unknown 0.17% 373,010 0 Unknown
securities A/C of client
credit transaction
Domestic
Kan Hui natural 0.16% 360,226 0 Unknown
person
Domestic
Gou Bo natural 0.16% 360,199 0 Unknown
person
Note: there is no affiliation between the top ten shareholders and legal person share holders. From
the second to the tenth shareholders, all of them are tradable share holders; and the Company is
unware that whether there is affiliation between the tradable share holders.
IV. Shareholding of top ten tradable shareholders at Period-end
4
Amount of unrestricted
Name of shareholder Type of shares
shares held
Shenzhen SDG Co., Ltd. 131,283,504 RMB ordinary shares
Domestically listed foreign
Bu Haowen 643,300
shares
Domestically listed foreign
Ling Fengyuan 512,858
shares
Zhuang Yunjiang 504,800 RMB ordinary shares
FISRT SHANGHAI SECURITIES Domestically listed foreign
464,678
LTD. shares
CMB—South Strategy Selected
448,351 RMB ordinary shares
Stock Securities Fund
Zhang Xiaoming 432,760 RMB ordinary shares
Guotai Jun’an Securities Co., Ltd.
guarantee securities A/C of client 373,010 RMB ordinary shares
credit transaction
Kan Hui 360,226 RMB ordinary shares
Gou Bo 360,199 RMB ordinary shares
Note: the Company is unware that whether there is affiliation or concerted action between the top ten
tradable share holders.
Shareholding of top ten restricted share holders and reason for restriction
Units: Share
Restricted Restricted Restricted Date
Restricted
Name of share at share share Reason for for
share at
shareholder Period-be released increased restriction releas
Period-end
ginning in Period in Period e
Relevant
Shenzhen specific
14,587,05
SDG Co., 0 0 14,587,056 commitment of
6
Ltd. Share Merger
Reform
14,587,05
Total 0 0 14,587,056
6
V. Company’s Controlling Shareholders
In the Period, controlling shareholders or actual controller of the Company remains the same.
5
Section IV. Directors, Supervisors and Senior Management
I. Changes in Company’s directors, supervisors and other senior management
1. Concering the Company’s former director and General Manager—Mr. Chen Peng’s resignation for
the post change, the Company held 11th Meeing of 6th Session of the Board on 18 Feburary 2011,
and agreed on his resignation and then appointed Mr. Lv Hang as the GM of the Company and
nominated as the director candidate for deliberation in Shareholders’ Genral Meeting. Relevant
announcement was published in the Securities Times and Hong Kong Commercial Daily dated 19th
Feburary 2011.
2. The Shareholders’ General Meeting of 2010 was held dated 15th June 2011 for deliberating and
approved the “Proposal of Director Election –Lv Hang”. Mr. Lv Hang was elected as the director for
6th Session of the Board under the name of the Tellus Group. Relevant announcement was released
on Securities Times and Hong Kong Commercial Daily dated 16th June 2011.
3. Concering the Company’s former securities representative—Mr. Ju Jiang’s resignation for the
post change, the Company held 16th Meeting of 6th Session of the Board on 20 July 2011, and agreed
on her resignation and then appointed Mr. Sun Bolun as the Representative. Relevant announcement
was published in the Securities Times and Hong Kong Commercial Daily dated 21st July 2011.
II. In the Period, there is no change in shareholding of directors, supervisors and other senior
management in the Company.
6
Section V. THE BOARD OF DIRECTOR’S REPORT
I. Management Discussion and Analysis
(I) Operation Result and Financial Analysis
1. Decrease in operation income
In the report period, operating income of the Company reached 178.0472 million yuan, a y-o-y
decrease of 20.276 million yuan with 10.22 percent down. Main reasons for decrease: on one hand,
affected by the earthquake in Japan, productivity of FAW Toyota has a downing situation that
resulted in a sales decrease for automobile business; on other hand, sales of the imported vehicles
has a decrease in selling due to the totally opening-up of imported vehicles from FAW Toyota.
2. Operating cost declining correspondent with the decrease of operating income, decline amplitude
larger than the downing amplitude of operating income
In the report period, operating cost of the Company was 144.2033 million yuan, a y-o-y decrease of
20.0564 million yuan with 12.21 percent down. The decline amplitude in operating cost larger than
the downing amplitude of operating income due to the strengthen control in cost.
3. Decrease in period expense in Period
Three period expenses totaled 34.7924 million yuan, a y-o-y decrease of 0.2799 million yuan with
0.80 percent down. Among which: sales expense amounting to 10.2544 million yuan, a y-o-y
decrease of 0.3047 million yuan with 2.89 percent down mainly due to the downing expenses on
salary and advertisement; management expense amounting to 120.2171 million yuan, a y-o-y
increase of 0.1455 million yuan with 0.72 percent up mainly due to the increase of housing
accumulation fund; financial expense amounting to 4.3209 million yuan, a y-o-y decrease of 0.1207
million yuan with 2.72 percent down mainly due to the decease of interest rates that arising from
principal decreased in borrowing.
4.Year-on-year decrease in profit
In the report period, net profit of the Company approved 0.3711 million yuan with a y-o-y decrease
of 1.3399 million yuan; net profit attributable to owners’ equity of parent company amounting to
0.5023 million yuan with a y-o-y decrease of 0.5964 million yuan. Profit decrease mainly due to the
decrease of operating income together with the execution of the policy of housing accumulation
fund.
(II) Financial status of the Company
1. Assets
As at 30 June of 2011, total assets of the Company amounting to 583.376 million yuan with
118.6526 million yuan of current assets and 464.7234 million yuan of non-current assts.
2. Liabilities
As at 30 June of 2011, total liabilities of the Company amounting to 383.1827 million yuan with
209.1088 million yuan of current liabilities and 174.0739 million yuan of non-current liabilities.
3. Owner’s equity
As at 30 June of 2011, total shareholders equity of the Company amounting to 200.1933 million
yuan with 175.8013 million yuan of owners’ equity and 24.392 million yuan of minority’s equity.
7
II. Operating status in the first half of 2011
(I) General operating status of the Company in report period
Unit: RMB
Same period of last
Item Report period +/- (%)
year
Operation income 178,047,165.38 198,323,188.79 -10.22%
Operation profit 716,236.75 1,998,124.54 -64.15%
Net profit 502,339.55 1,098,680.67 -54.28%
Main reasons for the decrease of operating profit and net profit: decrease of the operating income
and increase of the housing accumulation fund.
(II) Income from main business classified according to industries
Unit: RMB’0000
Year-on-year Year-on-year Year-on-year
According to Gross
Operation Operation increase/decreas increase/decreas increase/decre
industries or profit
income cost e in operating e in operating ase in gross
products rate (%)
income (%) cost (%) rate (%)
Sales of
10,657.31 10,207.13 4.22% -14.09% -13.81% -0.31%
automobile
Automobile
maintenance,
2,510.05 2,013.76 19.77% -18.60% -18.15% -0.45%
inspection and
parts sales
Property lease
4,487.92 2,113.80 52.90% 6.63% 3.45% 1.45%
and service
Total 17,655.28 14,334.69 18.81% -10.37% -12.31% 1.79%
(III) Constitution changes of profit in report period
Gross profit has 0.2196 million yuan decreased; investment income got a y-o-y decrease of 0.9408
million yuan; non-operating income has 0.1646 million yuan decreased while non-operating
expenditure got an increase of 0.1383 million yuan.
(IV) There is no other operation activity impacting greatly on the Company’s operation income in
the Period.
(V) Particular about the single stock-jointed enterpriess with over 10 percent investment returns on
net profit of the Company:
Unit: RMB
Proportion
Name of company of shares Main product or service Net profit
held
Shenzhen Renfu Tellus Automobile sales, maintenance,
Automobile Service 35% exhibition, technology consultation 1228.60
Company., Ltd. and parts sales
Shenzhen Dongfeng
25% Automobile manufacture and sales 139.88
Automobile Co., Ltd.
(VI) Particular about great changes in main items of accounting staements and fiancnial indexes
together with their reasons
8
Increas
Amount at
Amount at Increase/decre e/decre
Item period-beginni Explanations
period-end ase amount ase
ng
scope
Other account Current account
21,095,058.70 13,743,165.24 7,351,893.46 53.5%
receivable increased
Settlement of
Amount paid automobile
7,834,310.63 10,212,371.68 -2,378,061.05 -23.3%
in advance payment in
advance
Starting
Construction
922,279.81 - 922,279.81 construction in
in progress
the period
Non-current long-term
liabilities due borrowings due
16,440,000.00 8,640,000.00 7,800,000.00 90.3%
within one within one year
year increased
Increas
Amount in Same period Increase/decre e/decre
Item Explanations
this term of last year ase amount ase
scope
Obtaining income
from disposal
Non-operating of fixed assets
21,394.84 185,957.64 -164,562.80 -88.5%
income at same
period of last
year
Increase of the
Non-operating non-operating
159,475.00 21,163.67 138,311.33 653.5%
expenditure expenditure in
this term
Income tax 207,019.50 451,955.63 -244,936.13 -54.2% Decrease of profit
Changes of the
Other
market value of
consolidated 24,312.75 -460,971.20 485,283.95 105.3%
financial assets
income
available for sale
More payment of
Net cash flow
current account
arising from -134.3
6,776,674.04 -19,733,147.73 26,509,821.77 paid in same
operating %
period of last
activities
year
Net cash flow Increase of
arising from construction in
-1,480,669.66 -854,895.15 -625,774.51 73.2%
investment progress in the
activities term
Net cash flow Payment paid for
arising from bank loans
-14,821,846.68 -3,892,694.28 -10,929,152.40 280.8%
financing increased in the
activities period
9
(VII) Problems and difficulties in operation
1. Consumption market of automobile was affected by the unfavorable factors of macro policies,
property market & stock market, inflation expectation and monetary policies. Sales of the
automobile got a slowly growth, automobile inventory has a dramatically increase with enlargement
of productivity; capital faced more and more pressures and the consumption market for automobile
encounter with the risk of back to low valley for exploitation continuously.
2. Maintenance cost soaring due to the long-term use life of majority property of the Company,
surrounding facilities and equipments were getting more and more ancient. Part of the property
encounter with the problem of relocation and renewal construction that influenced a lot in the leasing
revenue for a long time since recently.
3. Difficulties in lawsuits that left by history. Case of the guarantee for Petrochemical from Tellus
Group, being retrial verdict from provincial high court, the case will impact a lot on Group after
entering into the execution.
(VIII) Operation measures in second falf year
1. Enforce the research in automobile consumption market, perfect sales strategy and explore the
market aggressively. Seized the opportunity of the recovery of productively from Toyota, new type
vehicle launched and market promotion to enlarge the sales. Overcoming the unfavorable impacts of
the increase of 4S stores and client resource separation, higher the service quality as well as
absorbing more clients by conducting serials preferential activities.
2. Enhance the management in property operation, higher the conscious-ness of service and maintain
current lessee for income growth in steady situation. Overall opening of the metro provided a
favorable opportunity to higher the rate of renting and rents as well as the rate of account received.
3. Speed up the promotion of key projects for new profit growth point formed as soon as possible.
Integrated and distributed the resources reasonable, continuously higher the profitability for profit
maximizing through upgrade and reform the self-owned property. Strength the efforts to promoting
project of jewelry industrial zone continuously, seized the opportunity of urban renewal reform
currently, strive for starting the phase I project as soon as possible after completed the government
application procedures.
4. Strength management and service on stock-jointed enterprises and with total supporting provided.
Increase the investment profits by higher the economy benefits for stock-jointed enterprise through
maximized the environment and co-operated with stock-jointed enterprise for their operating
activities.
5. Enhanced overall budget management, refining operation, strictly control every expenditures and
lower the cost, increase income and decrease expenditures for improving the economy benefits.
Conducting basic regulation works of the internal control enhanced the leadership of risk
management, preventing risks for guarantee the healthy and balanced development of the
enterprises.
6. Positively deal with the guarantee of Petrochemical and to minimized the losses from the
Company as practicable as possible.
III. Particular about investment in report period
(I) In the Period, there was no raised fund or use of previous fund continuing into the Period.
10
(II) Investment project by non-raised fund in Period
The Company is to reform the existing old industrial plant in Shuibei Industrial Zone, Luohu District,
Shenzhen for establishment of Jewelry Industrial Estate of Tellus Group. The project is three-period
rolling development. Total of investment in the above project establishment is 266.94 million yuan
as rolling periodical input. The pre-phase investment occurred in this period amounting to 0.9223
million yuan. Relevant announcement was released on Securities Times and Hong Kong Wen Wei Po
dated 19th June 2009 and 27th October 2009 respectively.
IV. There was no disclosure of profit prediction or related plan or prospect.
V. According to its present managemnt status and finacial position, the Company is impossible
to predict net profit in the third quarter.
11
Section VI. SIGNIFICANT EVENTS
I. Coporate Governance
In the Period, pursuant to the requirements of Company Law, Securities Law and relevant laws and
regulations of CSRC, the Company continued perfecting the corporate governance structure and
standardized the corporate operation. Furthermore, in accordance with requirement of “Basic Rules
of Internal Control for Enterprises” and “Matching of the Internal Control for Enterprises”, internal
control system of the Company and its subsidiaries were put into orders and revised as well as
supplemented and perfected by the Company, that higher the running standards of the Company
guarantee efficiency implementation and surveillance of the system. Board of the Directors takes the
opinions that: there is no obviously difference between the actual situation and relevant requirements
from CSRC in aspect of corporate governance.
II. Establishment and execution of the internal control system of the Company
Pursuit to the requirement from CSRC and five committee of Ministry of Finance on “Basic Rules of
Internal Control for Enterprises” and “Matching Guideline of the Internal Control for Enterprises” ,
the Company strength and standardized the internal control of the Company for higher the
management standards and risk prevention ability of the operational management that promoting the
sustainable development of the Company. In April of 2011, the Company started the construction
works on internal control system officially around the Company and appointed a professional agency
to helping the construction works on internal control system of the Company positively.
The proposal of “Work Plan of the Implementation on ‘Basic Rules of Internal Control for
Enterprises’” was deliberated and approved by 6th Meeting of 6th Session of the Board dated 13th
April 2011. Till end of the period, the Company positively participated in the training that organized
by CSRC; appointed professional agency organized the concentrate training within the Company.
Directors, supervisors and senior executives of the Company were participated in the training as well
as relevant staffs of managers and financial staff from subsidiary or branch of the Company.
Currently, construction works of the internal control standardized system was promoted on planning
steadily.
III. Profit distribution scheme and scheme of transfer of reserve to share capital
(I) In the Period, there was no implementation of profit distribution or transfer of reserve to share
capital.
(II) In the medium term, the Company has not to go with profit distribution or transfer of reserve to
share capital.
IV. Major lawsuit and arbitration
In the report period, the Company had no new significant lawsuits and arbitrations.
The explanations on original significant lawsuits and arbitrations of the Company are as follows:
1. On 4 March 2011, the civil order of (2007) YMCZi No.646, No.766, No.794, No.805 and No.817
was received by the Company from People’s Court of Yuanyang County, Hunan Province, details of
the order are: Zhou Bin and other 315 plaintiff withdrawing the charge from the Court dated 10th
August 2010. The Court takes the opinions that: plaintiff and defendant are resolved the dispute of
house sales contract within the two parties by themselves. Zhou Bin and other 315 plaintiff were
consented to withdraw charge; case charge was beared by Zhou Bin and other 315 plaintiff.
12
Meanwhile, the notice of executed (2009) YFZZi No.185, No. 186, No.187, No. 188 and No.189
was received by the Company from People’s Court of Yuanyang County, Hunan Province, details of
the order are: applicant Fu Yuansi, Wu Shenbao and other 62 persons applying case of dispute
settlement on quality of house sales contract of Tellus Group with civil order of (2008) YMCZi No.
506-1, No.506-2, No.506-3, No.506-4 and No. 506-5. In process of execution, all responsibilities of
the settlement agreement have been implemented by Tellus Group the case has been executed.
Meanwhile, the notice of executed (2007) YFZZi No.189, No. 190 and No.191 was received by the
Company from People’s Court of Yuanyang County, Hunan Province, details of the order are:
applicant Fu Guanbao and other 39 persons applying case of dispute settlement on quality house
sales contract of Tellus Group with civil order of (2006) YMCZi No. 702, No.703 and No. 704. In
process of execution, all responsibilities of the settlement agreement have been implemented by
Tellus Group the case has been executed.
Being consult from largest shareholder, the settlement agreement was reached with integrated
settlement agreement between Shenzhen SDG Co., Ltd and prosecutors. The case was resolved
between the two parties of plaintiff and defendant, plaintiff withdraw the suit in group.
The ruling result removes all contingency responsibilities that subsequently occurred probably on the
Company from the suits.
People’s Court of Yuanyang County was executed assets of the Company in 5 times with period of
October 2006 to June 2007 on totaled 1.1798 million yuan. The aforesaid account was reckoned into
the non-operating expenditure for year of 2007. Except the aforesaid account, other charges and
expenditures related to lawsuits were totally beared by controlling shareholder of the Company –
Shenzhen SDG Co., Ltd.
Relevant announcement was released on Securities Times and Hong Kong Commercial Daily dated
9th March 2011.
2. Shenzhen Tefa Tellus Real Estate Development Co., Ltd. (“Tellus Real Estate”), a subsidiary of
the Company, signed a Joint Property Construction Contract with Shenzhen Jinlu Industrial and
Trade Company (“Jinlu Company”) on November 29, 1994, to build Liye Huishi Street in Buji Town,
Shenzhen. In the agreement, it was agreed that on the basis of respecting the Cooperation Contract of
Construction for Buji Liye Huishi Street signed by Jinlu Company, and the land
providers-Guangzhou Military Area Shenzhen Property Administrative Department (referred to
Property Administrative Department later) and Army 75731 of Chinese People's Liberation Army
(referred to Army 75731 later), Tellus Real Estate input RMB 10 million as investment for
construction in return of a property whose construction area amounted to 6,000 square meters. Jinlu
Company promised to hand over the completed buildings and fitting equipments before end of
November, 1995. However, till Dec 31st of 1996, though it had already accumulatively input with
RMB 9,822,500.00 for this investment, Tellus Real Estate did not received the properties it should
had received on the agreed day for handing over property. So, it appealed to the court, to require
Jinlu Company immediately return the investment account of RMB 9.8 million and relevant interest,
and all legal fare. Through court hearing, the Court added Guangzhou Military Area Shenzhen
Property Administrative Department and Army 75731 as defendants according to laws. On Mar 18th
of 2003, Shenzhen Intermediate Peoples’ Court sentenced effectiveness of the aforementioned
Cooperation Contract by issuing SZFFCZi (2000) No. 101 Verdict. The nature was confirmed as
cooperation construction, and the two parties should continue to implement the contract. If disputes
occurred between the parties for any disagreement in contract implementation, law channel could be
an assistant for solving.
13
In March of 2005, Tellus Real Estate, together with Jinlu Company, prosecuted Property
Administrative Department and Army 75731 (Guangzhou Military Area Telecommunication
Equipments Repair Office), appealing that the two defendants implement the contract and hand over
the 11,845 square meters property in Liye Huishi Street to the two accusers. Meanwhile, the
defendants were appealed to pay lease income of RMB 5,034,664.94 collected from the property
since 1998. Meanwhile, Tellus Real Estate and Jinlu Company signed agreement, agreeing that: for
Liye Huishi Street property received back from automatic implementation or compulsory execution
by the Court, 6,000 square meters property belonged to Tellus Real Estate, and the rest belonged to
Jinlu Company. If insufficient to 6,000 square meters, all the property belonged to Tellus Real Estate;
as for the income called back from this case, distribution between the two parties with proportion of
5:5 was going to made. Shenzhen Mediate People’s Court took the first trial on this lawsuit in Aug.
of 2010. It wasn’t judged in court for the case was complicated.
On Apr. 29 of 2011, the Company received a civil ruling letter ([2005] SZFSMWCZi No. 82) from
Shenzhen Mediate People’s Court. The court believed the cooperation contract of real estate
development signed by Jinlu Company together with Housing Management Branch was valid. But
Liyehui Food Street built on land concerning this case by both parties was regarded as unauthorized
construction because they didn’t handle the construction planning permit in administrative division
of government though they got approval from the general logistic division. For both parties didn’t
post-handle relevant procedure in administrative division, this unauthorized construction belongs to
illegal target. People’s court isn’t able to adjudicate the construction as well as its interest
distribution. Thus Jinlu Company and Tellus Company rejected this lawsuit as for property payment
of Liyehui Food Street and rent distribution.
The rulings for other lawsuits of the two companies were as follows: reject lawsuit the plaintiff
namely Shenzhen Jinlu Industry and Trade Company and Shenzhen Tefa Tellus Real Estate Co., Ltd
appealed that Shenzhen Property Management Branch in Guangzhou Military Region, and PLA
75731 Army should submit 11845 square meters of Liyehui Food Street and they both should pay
rent of several years since 1998.
The Company had accrued total amount of provision for bad debts of cooperative development
capital Tellus Real Estate Company invested.
Relevant announcement was released on Securities Times and Hong Kong Commercial Daily dated
4th May 2011.
No new progress within the period for other lawsuits related to the Company.
V. Analysis of and explanation on other important events, impact and solutions
(I) Securities Investment: Nil
(II) Shareholding in other companies
Unit: RMB
Sharehol
Shortened Change of
Stock Initial ding Book value at Gain/Loss
name of owner’s equity in
code investment proporti Period-end in Period
stock Period
on
China
600036 Merchants 178,454.20 0.00% 1,507,390.50 0.00 24,312.75
Bank
Total 178,454.20 1,507,390.50 0.00 24,312.75
14
(III) Shareholding in unlisted finacial enterprise and will-be-listed company: Nil
VI. There were no substantive asset sales in the Period.
VII. Substantive related transaction in Period
(I) In the Period, there was no related transaction for commodity repurchase or labor supply between
the Company and the affiliated parties.
(II) Liabilities and guarantees between the Company and the affiliated parties: set out in detail in
Note VI. 6 of Accounting Statement.
(III) Other substantive related transaction: in the period, there was no other substantive related
transaction.
VIII. Significant contract and fulfillment
(I) In the Period, there was no substantive transaction, trust, contract or lease of other companys’
assets by the Company or otherwise.
(II) No significant guarantee contract in Period
IX. Independent Directors’ Specific Explanation and Independent Opinion on Fund
Embezzlement of and External Guarantee for Company’s Related Party
As the Company’s independent directors, we attended 4th of 6th Session of the Board Meeting of
Shenzhen Tellus Holdings Co., Ltd. and approved each proposal made out in the meeting. Pursant to
relevant laws and regulations, the explanation on fund embezzlement of and external guarantee for
the related party is as follows:
I) We have audited the Finacial Report presented by the Company; as ending the Period-ending,there
was no fund embezzlement of controlling shareholders or related parties.
II) Pursant to rules of CSRC Announcement on Standardization of Listed Company’s External
Guarantee (CSRC [2005] 120) (hereafter refered as the “Announcement”), and being practical and
realistic, we seriously audited the Company’s external guarantee; and then as ending 30 June 2011,
no external guarantee occurred of the Company and no guarantees provided to its controlling
shareholders and related parties from the Company been found.
IX. Significant Contract and Fulfillment
1. There were no substantive transaction, trust, contract or lease of other company’s assets by the
Company or otherwise in the Peiod or previous ones continuing into the Period.
2. There were no significant guarantee contract in the Period or previous ones continuing into the
Period.
3. There were no trust of cash asset management in the Period or previous ones into the Period
XI. Commitment of Shareholders of Shareholding above 5%
In the Company’s Stock Merger Reform, Tellus Group—the non-current share holder, in addition to
fufillment of legal obligations committed, also committed as follows:
1. Within the 36 month from the implementation day of the Reform Scheme, the Group din not list
and make sales of stock held (that for management option incentive excluded), in Shenzhen Stock
Exchange, which is performaned completely.
2. Specific commitment for option incentive mechanism
With the view of effective long-term incentive for the Company’s core management and business
bones, the Group made use of stock totalled below10% as management option incentive upon the
Stock Merger Reform, made three-year sales to its management at price of its latest audited net
15
assset value each. The management had to pay the Company 20% of the projected sales price as risk
responsibility money in advance before the implementation of the option incentive scheme every
year; if the management was unable to accomplish the Company’s performance evaluation
assignment, the risk responsibility money paid was not paid back and enjoyed by the Company.
Specific rules of restrictions and incentive scheme as stock subscription qualifications and risk
responsibility money, will be made out by the Company’s Board and reported for approval to the
relevant department. The Implementation will comply with relevant rules of Shenzhen Stock
Exchange.
The aforementioned commitments is being performed by the Group. Restriction sales period of stock
held by the Group expired on 20 January 2009, of which, 131,283,504 shares were listed and in trade
with the rest still under restriction as of the specific commitments for option incentive.
XII. In the Period, there was no change in the Company’s CPAs; and the Semi-annual
Financial Report was not audited.
XIII. In the Report period, the Company and its directors, supervisors, senior management
and actual controllers did not received any investigation of relevant institution, compulsive
measures of discipline inspection judicial department, deportation to judicial organ or
criminal liability, inspection and administrative penalty of CSRC, no bond-market-admission,
identification as inappropriate applicant, punishment by other administration department,
and public condemnation by the Stock Exchange.
XIV. In the Period, pursuant to the requirements of Guidance for Liseted Company’s Fair
Information Disclosure, save that they reported and submitted nonpublic information to
controlling shareholders in the previous disclosure manner, the Company and relevant
information disclosure obligors, strictly complying with fair information disclosure principle,
did not treat information differentially, or disclose, reveal or leak out nonpublic information
selectively and privately. And in the Period, the Company did not recept investigation and
study, and interview.
16
XV. Index of important events disclosed in Period
Announ
Disclosur
cement Disclosure event Disclosure media
e date
number
Resignation of the directors and 2011-2-1 Securities Times, Hong Kong
2011001
general manager of the Board 9 Commercial Daily, Juchao Website
2011-2-1 Securities Times, Hong Kong
2011002 Resolution of the Board
9 Commercial Daily, Juchao Website
Securities Times, Hong Kong
2011003 Progress of the Lawsuit Events 2011-3-9
Commercial Daily, Juchao Website
2011-4-1 Securities Times, Hong Kong
2011004 Annual Report and its Summary
5 Commercial Daily, Juchao Website
Resolution of the 6th Meeting of 6th 2011-4-1 Securities Times, Hong Kong
2011005
Session of the Board 5 Commercial Daily, Juchao Website
Resolution of the 7th Meeting of 6th 2011-4-1 Securities Times, Hong Kong
2011006
Session of Supervisory 5 Commercial Daily, Juchao Website
Explanation on the Changes of
2011-4-1 Securities Times, Hong Kong
2011007 Accounting Policy and
5 Commercial Daily, Juchao Website
Retrospective Adjustment
Opinions from Supervisory on
Retrospective Adjustment for 2011-4-1 Securities Times, Hong Kong
2011008
Previously Data of Financial 5 Commercial Daily, Juchao Website
Statements
Opinions from Independent
Directors on Retrospective 2011-4-1 Securities Times, Hong Kong
2011009
Adjustment for Previously Data of 5 Commercial Daily, Juchao Website
Financial Statements
2011-4-1 Securities Times, Hong Kong
2011010 Forecast of Performance
9 Commercial Daily, Juchao Website
Text of 1st Quarterly Report for 2011-4-2 Securities Times, Hong Kong
2011011
2011 5 Commercial Daily, Juchao Website
Resolution of 7th Meeting of 6th 2011-4-2 Securities Times, Hong Kong
2011012
Session of the Board 5 Commercial Daily, Juchao Website
Resolution of 8th Meeting of 8th 2011-4-2 Securities Times, Hong Kong
2011013
Session of Supervisory 5 Commercial Daily, Juchao Website
Securities Times, Hong Kong
2011014 Progress of the Lawsuit Events 2011-5-4
Commercial Daily, Juchao Website
Resolution of 14th Extraordinary 2011-5-2 Securities Times, Hong Kong
2011015
Meeting of 6th Session of the Board 5 Commercial Daily, Juchao Website
Holding 2010 Annual 2011-5-2 Securities Times, Hong Kong
2011016
Shareholders’ General Meeting 5 Commercial Daily, Juchao Website
Resolution of the Annual
2011-6-1 Securities Times, Hong Kong
2011017 Shareholders’ General Meeting of
6 Commercial Daily, Juchao Website
2010
17
VII Financial Report (Un-auidted)
Consolidated Balance Sheet
January-June 2011
Prepared by:SHENZHEN TELLUS HOLDING CO., LTD. Unit:RMB
Assets Note5 Amount of period-end Amount of year-begin
Current assets:
Monetary funds 1 59,594,020.80 69,122,979.84
Transactional financial assets - -
Notes receivable - -
Accounts receivable 2 6,818,385.86 8,831,986.63
Prepayment 3 7,834,310.63 10,212,371.68
Dividend receivable - -
Other accounts receivable 4 21,095,058.70 13,743,165.24
Inventories 5 23,310,846.67 25,045,954.52
Non-current asset due in 1 year - -
Other current assets - -
Total of current asset 118,652,622.66 126,956,457.91
Non-current assets:
Financial asset available for sale 6 1,507,390.50 1,483,077.75
Expired investment in possess 7 121,300.00 121,300.00
Long-term receivable - -
Long-term share equity investment 8 149,234,561.95 150,481,302.12
Investment real estate 9 111,040,875.91 113,660,483.41
Fixed asset 10 168,633,490.44 173,400,772.86
Construction in process 11 922,279.81 -
Engineering goods - -
Fixed asset disposal - -
Production biological asset - -
Intangible assets 12 192,838.50 221,588.46
R&D expense - -
Goodwill - -
Long-term amortizable expenses 13 1,098,158.49 1,258,536.21
Deferred income tax assets 14 31,972,434.56 31,972,434.56
Other non-current asset - -
Total of non-current assets 464,723,330.16 472,599,495.37
Total of assets 583,375,952.82 599,555,953.28
The notes to the Financial Statement are essential parts of the Financial Statements
18
Consolidated Balance Sheet(Con't)
January-June 2011
Prepared by:SHENZHEN TELLUS HOLDING CO., LTD. Unit: RMB
Liabilities&Shareholders' Equity Note5 Amount at period-end Balance at period-beginning
Current liability:
Short-term loans 16 34,840,900.42 42,363,705.42
Transactional financial liability - -
Notes payable - -
Accounts payable 17 27,470,361.89 30,767,809.82
Accounts receivable in advance 18 2,137,661.03 1,838,938.58
Wage payable 19 13,928,365.42 14,784,418.61
Taxes payable 20 6,322,972.89 7,464,874.69
Dividend payable -
Interest payable - -
Other account payable 21 107,968,492.04 107,704,456.87
Non-current liability due within 1 year 22 16,440,000.00 8,640,000.00
Other current liability - -
Total of current liability 209,108,753.69 213,564,203.99
Non-current liability:
Long-term loans 23 80,580,000.00 92,700,000.00
Bonds payable - -
Long-term payable 24 3,920,160.36 3,920,160.36
Special accounts payable - -
Projected liabilities 25 87,568,728.57 87,568,728.57
Deferred income tax liability 14 2,005,026.70 2,005,026.70
Other non-current liability - -
Total non-current liability 174,073,915.63 186,193,915.63
Total of liability 383,182,669.32 399,758,119.62
Owners' equity:
Share capital 26 220,281,600.00 220,281,600.00
Capital public reserve 27 8,660,142.60 8,635,829.85
Surplus public reserve 28 2,952,586.32 2,952,586.32
Retained profit 29 -56,093,074.18 -56,595,413.73
Total owner's equity attibutable to parent company 175,801,254.74 175,274,602.44
Minority interests 24,392,028.76 24,523,231.22
Total of owners' equity 200,193,283.50 199,797,833.66
Total liabilities & owner's equity 583,375,952.82 599,555,953.28
（The Notes to the Financial Statements are essential parts of the Finanical Statements）
19
Consolidated Income Statement
January-June 2011
Prepared by: SHENZHEN TELLUS HOLDING CO., LTD. Unit: RMB
Items Note5 Amount at this period Amount at last year
I. Turnover 30 178,047,165.38 198,323,188.79
Less: Operation cost 30 144,203,262.02 164,259,673.76
Business tax and surcharge 31 2,273,132.81 1,871,701.10
Sales expense 10,254,375.32 10,559,146.00
Administrative expense 20,217,091.42 20,071,551.74
Financial expense 32 4,320,901.64 4,441,621.86
Asset impairment loss - -
Plus:Income from change of fair value(loss is listed with"-") - -
Investment income（loss is listed with"-") 33 3,937,834.58 4,878,630.21
Incl: Investment income from affiliated enterprises and joint venture 3,904,259.83 4,878,630.21
II.Operation profit(loss is listed with"-") 716,236.75 1,998,124.54
Plus:Non-operation income 34 21,394.84 185,957.64
Less: Non-operation expenses 35 159,475.00 21,163.67
Incl: Loss from disposal of non-current assets - 3,053.74
III.Total profit（loss is listed with"-") 578,156.59 2,162,918.51
Less: Income tax expenses 36 207,019.50 451,955.63
IV.Net profit(loss is listed with"-") 371,137.09 1,710,962.88
Net profit attributable to owners' of patrent company 502,339.55 1,098,680.67
Minor shareholders' equity -131,202.46 612,282.21
V.Earning per share
(I) Basic earnings per share 37 0.002 0.005
(II) Diluted earnings per share 37 0.002 0.005
VI.Other consolidated income 38 24,312.75 -460,971.20
VII.Total of consolidated income 395,449.84 1,249,991.68
Total consolidated income attributable to owners of parent company 526,652.30 637,709.47
Total consolidated income attributable to minority shareholders -131,202.46 612,282.21
（The Notes to the Financial Statements are essential parts of the Finanical Statements）
20
Co ns oli dat ed Ca sh Flo w S ta tem ent
Jan uar y-Ju n e 20 11
Pr e pa re d by SH EN ZH EN TE LL US H OL D IN G CO ., LT D. Un it : R MB
It em s N ot e 5 A m o u n t a t t h is p e r io d A m o u n t a t la st y e a r
I. Ca sh f lo w f ro m op e ra ti ng a ct i vi ti es
Ca sh re cei ve d fro m sal es of p rod uc ts an d 179 ,5 56 ,003 .7 8 2 10,02 0,5 25.82
pr ovi di ng of s erv ic es
Ta xes s urr en de r r ec eiv ed - -
Ot her c ash r ec eiv ed fr om bu si nes s act iv iti es 39 35 ,7 41 ,630 .1 2 38,32 7,2 50.82
Su b- to t al o f ca s h in fl ow f r om b us in e ss 2 15 , 297, 633 .9 0 2 48,34 7, 7 76 . 64
a c ti vi ti es
Ca sh pa id fo r pur ch asi ng of m erc ha ndi se an d 142 ,1 71 ,643 .2 2 1 88,87 5,3 49.06
se rvi ce s
Ca sh pa id to /f or st aff 26 ,3 83 ,310 .2 0 24,99 8,9 85.65
Ta xes p aid 10 ,0 16 ,897 .4 5 10,85 2,0 05.46
Ot her C ash p ai d f or bu si nes s act iv iti es 39 29 ,9 49 ,108 .9 9 43,35 4,5 84.20
Su bt ot a l of c as h o ut fl ow f r om b us in e ss 208 , 520, 959 .8 6 2 68,08 0, 9 24 . 37
a c ti vi ti es
Ne t c as h fl o w ge ne ra te d f ro m bu s in es s 6 , 776, 674 .0 4 -19,733 , 147 . 73
a c ti vi ti es
II . C as h fl o w fr om i n ve st me nt a c ti vi ti es
Ca sh re cei ve d fro m inv es tme nt re tr iev in g - -
Ca sh re cei ve d as in ves tm ent g ain s 33 ,574 .7 5 -
Ne t c as h r ec ei ved f rom d isp os al of fi xe d, - 4 2,6 49.00
in tan gi ble a ss ets a nd ot her l ong -t erm a sse ts
Ne t c as h r ec ei ved f rom d isp os al of - -
su bsi di ari es o r o th er op era ti ona l uni ts
Ot her i nve st me nr- re lat ed ca sh re ce ive d - -
Su bt o ta l of c a sh i nf lo w d ue t o in v es tm en t 33, 574 .7 5 4 2, 6 49 . 00
a c ti vi ti es
Ca sh pa id fo r con st ruc ti on of fi xe d a ss ets , 9 14 ,244 .4 1 35 0,6 71.00
in tan gi ble a ss ets a nd ot her l ong -t erm a sse ts
Ca sh pa id as i nve st men t 6 00 ,000 .0 0 54 6,8 73.15
Ne t c as h r ec ei ved f rom s ubs id iar ie s a nd ot he r - -
op ear ti ona l un its
Ot her c ash p ai d f or in ve stm en t a ct ivi ti es - -
Su bt ot al of c as h o ut fl ow d ue to i nv es t me nt 1,5 14, 2 44.41 897 , 544. 15
ac ti v it ie
N et ca sh f lo w g en er at ed fr om i nv e st me nt -1, 480, 669 .6 6 -854 , 895. 15
II I . Ca sh f l ow g en er a te d by f in a nc in g
Ca sh re cei ve d as in ves tm ent a bso rp tio n - -
In clu di ng: C as h r ec eiv ed as i nve st men t fro m - -
mi nor s har eh ol der s by su bsi di ary
Ca sh re cei ve d as lo ans - 11,00 0,0 00.00
Ot her f ina nc in g-r el ate d cas h rec ei ved 28 ,201 .1 0 4 9,0 67.99
Su bt ot a l of c as h i nf lo w fr o m fi na nc i ng 28 , 201 .10 11,04 9, 0 67 . 99
a c ti vi ti es
Ca sh pa id to d ebt s 11 ,8 20 ,834 .0 0 11,70 3,3 18.00
Ca sh pa id as d ivi de nd, p rof it or i nte re sts 3 ,0 29 ,213 .7 8 3,23 8,4 44.27
In clu di ng: D iv ide nd an d pro fi t p ai d b y - -
su bsi di ari es t o m in or sh are ho lde rs
Ot her c ash p ai d f or fi na nci ng ac ti vit ie s - -
S ub t ot al o f c as h ou tf lo w f ro m fi n an ci ng 14 , 850, 047 .7 8 14,941, 7 62 . 27
a c ti vi ti es
N et c a sh f lo w g en er at ed b y f in an ci n g -14,82 1, 846 .6 8 -3,89 2, 6 94 . 28
a c ti vi ti es
IV . I nf lu en c e of e xc h an ge r at e a lt er na ti o n on
-3 ,116 .7 4 -2,6 10.60
ca s h an d ca s h eq ui va l en ts
V. Ne t in cr e as e of c a sh a nd c as h e qu iv al e nt s -9 , 528, 959 .0 4 -24,48 3, 3 47 . 76
Pl us: B ala nc e of ca sh an d c as h e qu iva le nts a t 64 ,1 22 ,979 .8 4 72,37 6,1 77.95
th e b eg inn in g of te rm
VI . B al an ce of c as h a nd c as h eq u iv al en ts at 54 , 594, 020 .8 0 4 7,892 , 830. 19
th e e nd o f t er m
（ Th e N ot es to t he Fi nan ci al St ate me nts a re es sen ti al pa rts o f t he Fi na nic al St at eme nt s）
21
Con so lid ate d S ta tem ent on C han ges of Ow ne rs' Eq uit y
S e m i-a nnu al of 2 0 11
Pr epa re d b y SH ENZ HE N T EL LUS H OLD IN G C O. , L TD . U nit : RMB
Am ou nt o f th e cu rr en t te rm A mo un t of l as t ye ar
Sh ar eh ol de rs ' eq ui ty a tt ib ut ab le to p ar en t co . Mi no r To ta l of Sh ar eh ol de rs ' eq ui ty a tt ib ut abl e to p ar en t co . Mi no r To ta l of
It em s
Sh ar e Ca pi ta l Su rp lu s R et ai ne d sh ar eh ol de r s har eh ol er s' S ha re C ap it al Su rp lu s R et ai ne d sh ar eh ol de rs sh ar eh ol er s'
ca pi ta l r es er ve s re se rv es pr of it s ' eq ui ty e qu it y c ap it al re se rv es re se rv es pr of it ' eq ui ty e qu it y
I. B al a nc e a t t he en d 2 2 0 ,2 8 1 ,6 00 .0 0 8 ,6 35 ,8 2 9.8 5 2 ,9 52 ,5 86 .3 2 - 5 6 ,5 9 5 ,4 13 .7 3 2 4 ,5 2 3 ,2 31 .2 2 19 9,7 9 7 ,8 3 3 .6 6 2 2 0 ,2 8 1 ,60 0 .00 7 ,83 9 ,6 88 .3 1 2,9 5 2,5 8 6 .32 - 6 0,17 9 ,85 9 .5 1 2 4 ,185 ,3 6 9.7 2 19 5 ,0 7 9 ,3 8 4 .8 4
of la s t ye a r
Pl us :C han ge o f
- - - - - - - - - - - -
ac co un tin g po li cy
Co r re ct ing o f pr e v iou s
- - - - - - - - - - - -
er ro r s
II . Ba l an ce at th e
be g in n in g o f c ur r en t 2 2 0 ,2 8 1 ,6 00 .0 0 8 ,6 35 ,8 2 9.8 5 2 ,9 52 ,5 86 .3 2 - 5 6 ,5 9 5 ,4 13 .7 3 2 4 ,5 2 3 ,2 31 .2 2 19 9,7 9 7 ,8 3 3 .6 6 2 2 0 ,2 8 1 ,60 0 .00 7 ,83 9 ,6 88 .3 1 2,9 5 2,5 8 6 .32 - 6 0,17 9 ,85 9 .5 1 2 4 ,185 ,3 6 9.7 2 19 5 ,0 7 9 ,3 8 4 .8 4
ye a r
III.C h a n ge d in c u rr en t
y ea r（ L o s s is lis te d - 2 4 ,3 12 .7 5 - 50 2 ,3 39 .5 5 -1 3 1,2 02 .4 6 3 9 5,4 4 9 .8 4 - 7 9 6 ,1 41.5 4 - 3 ,5 8 4,4 4 5.7 8 3 3 7 ,86 1.5 0 4,7 1 8 ,4 4 8 .8 2
w it h "- " ）
(I )N et pr of it - - - 5 0 2 ,3 39 . 5 5 -1 31 , 2 02 .4 6 37 1 ,1 3 7 . 0 9 - - - 3 , 58 4 ,4 4 5. 7 8 3 3 7 , 86 1 .5 0 3,9 2 2 , 30 7 .2 8
(I I) Ot her i nt eg ra te d
- 2 4 ,3 12 . 7 5 - - - 2 4 ,3 1 2 . 7 5 - - 43 2 ,0 0 0 . 4 6 - - - -4 3 2 , 00 0 .4 6
in co me
T ota l of (I ) a nd (I I) - 2 4 ,3 12 . 7 5 - 5 0 2 ,3 39 . 5 5 -1 31 , 2 02 .4 6 39 5 ,4 4 9 . 8 4 - - 43 2 ,0 0 0 . 4 6 - 3 , 58 4 ,4 4 5. 7 8 3 3 7 , 86 1 .5 0 3,4 9 0 , 30 6 .8 2
(I II )S har eh ol de r
in pu t and w it hd ra w of - - - - - - - - - - - -
sh ar e cap it al
1 ,C ap ita l in pu t by
- - - - - - - - - - - -
shar e ho ld er s
2 .Sh ar e p ay m e nt ac c oun te d
- - - - - - - - - - - -
in to s ha re h old e rs' eq ui ty
3 .O t he rs - - - - - - - - - - - -
(I V) Pr ofi t - - - - - - - - - - - -
di st ri but io n
1 .P r ov i di ng of su rp lu s
- - - - - - - - - - - -
re ser v e s
2 .C om m o n r isk pr ovi sio n - - - - - - - - - - - -
3 .D i v id en d to shar e ho ld er s - - - - - - - - - - - -
4 . O th er s - - - - - - - - - - - -
(V )I nt ern al
se tt le men t of - - - - - - - 1 , 22 8 ,1 4 2 . 0 0 - - - 1,2 2 8 , 14 2 .0 0
sh ar eh old er s' e qu it y
1 . C ap ita l re se rv e s
- - - - - - - - - - - -
tra nsf er r ed to s ha re ca pi tal
2 . S ur pl us r ese rve s
- - - - - - - - - - - -
tra nsf er r ed to s ha re ca pi tal
3 . M aki ng up l oss e s b y
- - - - - - - - - - - -
sur plu s re ser v e s
4 . O th er s - - - - - - - 1 , 22 8 ,1 4 2 . 0 0 - - - 1,2 2 8 , 14 2 .0 0
(V I) R eas on ab le - - - - - - - - - - - -
re se rv e
1 . W i th dr aw in thi s p e ri od - - - - - - - - - - - -
2 .U sed i n th is pe r io d - - - - - - - - - - - -
IV . Ba l an ce at th e 2 2 0 ,2 8 1 ,6 00 .0 0 8 ,6 6 0 ,14 2.6 0 2 ,9 52 ,5 86 .3 2 - 5 6 ,0 9 3 ,0 7 4 .18 2 4 ,3 92 ,0 28 .7 6 20 0 ,19 3 ,2 8 3 .5 0 2 2 0 ,2 8 1 ,60 0 .00 8,6 3 5 ,8 2 9 .8 5 2,9 5 2,5 8 6 .32 - 5 6 ,59 5 ,413.7 3 2 4 ,5 2 3 ,23 1.2 2 19 9 ,7 9 7 ,8 3 3 .6 6
en d o f t hi s t e rm
22
Balance Sheet
January-June 2011
Prepared by SHENZHEN TELLUS HOLDING CO., LTD. Unit: RMB
Assets Note11 Balance at period-end Balance at year-begin
Current assets:
Monetary capital 450,112.02 324,541.62
Transactional financial assets - -
Notes receivable - -
Accounts receivable 1 - -
Prepayment - -
Dividend receivable - -
Other receivable 2 22,853,900.86 21,830,874.99
Inventory - -
Non-current assets due in 1 year - -
Other current assets - -
Total of current assets 23,304,012.88 22,155,416.61
Non-current assets
Financial assets available for sale 1,507,390.50 1,483,077.75
Expired investment in possess - -
Long-term recivable - -
Long-term share equity investment 3 374,987,776.35 376,413,291.95
Investment real estate 63,332,140.56 64,814,748.48
Fixed assts 19,993,075.87 20,466,877.39
Construction in process - -
Engineering goods -
Disposal of fixed assets - -
Production biological assets - -
Intangible assets 148,671.81 172,421.79
R&D expenses - -
Goodwill - -
Long-term amortizable expenses 113,639.14 174,688.06
Deferred income tax assets 14,865,962.87 14,865,962.87
Other non-current assets - -
Total of non-current asset 474,948,657.10 478,391,068.29
Total of assets 498,252,669.98 500,546,484.90
（The Notes to the Financial Statements are essential parts of the Finanical Statements）
23
Balance sheet(Con't)
January-June 2011
Prepared by:SHENZHEN TELLUS HOLDING CO., LTD. Unit: RMB
Liabilities & Sharholders' equity Note Blance at period-edn Balance at year-begin
Current liability:
Short-term loans 16,828,120.42 16,828,120.42
Transactional financial liability - -
Notes payable - -
Accounts payable 1,554.00 1,554.00
Accounts received in advance - -
Wage payable 3,633,663.53 3,547,611.71
Taxes payable 281,312.35 281,199.97
Dividend payable -
Interest payable - -
Other account payable 216,744,988.05 215,911,977.86
Non-current liability due within 1 year 4,480,000.00 4,480,000.00
Other current liability - -
Total of current liability 241,969,638.35 241,050,463.96
Non-current liability:
Long-term loans 43,920,000.00 46,160,000.00
Bonds payable - -
Long-term payable - -
Special accounts payable - -
Projected liabilities 87,568,728.57 87,568,728.57
Deferred income tax liability 341,399.21 341,399.21
Other non-current liability - -
Total non-current liability 131,830,127.78 134,070,127.78
Total liability 373,799,766.13 375,120,591.74
Owners' equity:
Share capital 220,281,600.00 220,281,600.00
Capital public reserve 5,466,719.32 5,442,406.57
Surplus public reserve 2,952,586.32 2,952,586.32
Retained profit -104,248,001.79 -103,250,699.73
Total owner's equity attributable to parent company 124,452,903.85 125,425,893.16
Minority interests - -
Total of owners' equity 124,452,903.85 125,425,893.16
Total liabilities&owner's equity 498,252,669.98 500,546,484.90
（The Notes to the Financial Statements are essential parts of the Finanical Statements）
24
Profit Statement
January-June 2011
Prepared by:SHENZHEN TELLUS HOLDING CO., LTD. Unit: RMB
Items Note11 Amount at this term Amount at last term
I. Total operating income 4 6,559,038.23 6,347,830.14
Less: Operating cost 4 2,025,180.40 2,045,111.40
Operating tax and extras 360,747.11 330,087.17
Sales expense - -
Administration expenses 7,002,540.49 6,939,731.34
Financial expense 1,947,403.34 2,219,352.03
Losses of devaluation of asset - -
Plus:Changing income of fair value(Loss is listed with"-") - -
Investment income(Loss is listed with"-") 5 3,774,059.15 4,012,405.21
Incl:Investment income on affiliated enterprises and joint venture 3,740,484.40 4,012,405.21
II.Operating profit(Loss if listed with"-") -1,002,773.96 -1,174,046.59
Plus:Non-operating income 5,471.90 -
Less:Non-operating expenses - 10,000.00
Incl:Loss from the disposal of non-current assets - -
III.Total profit(Loss is listed with"-") -997,302.06 -1,184,046.59
Less: Income tax expense - -
IV.Net profit(Loss is listed with"-") -997,302.06 -1,184,046.59
Net profit attributable to owner's of parent company -997,302.06 -1,184,046.59
Minority shareholders' gains and losses - -
V.Earnings per share
i.Basic earnings per share
ii.Diluted earnings per share
VI.Other integrated income 24,312.75 -460,971.20
VII. Total of intergrated income -972,989.31 -1,645,017.79
Total amount of owners' integrated income attributable to parent co., -972,989.31 -1,645,017.79
Total amount of integrated income attributable to minority shareholders - -
（The Notes to the Financial Statements are essential parts of the Finanical Statements）
25
Cash Flow Statement
January- June 2011
Prepared by:SHENZHEN TELLUS HOLDING CO., LTD. : RMB
Items Note Amount at this term Amount at last term
I.Cash flows arising from operating activities
Cash received from selling goods and provising labor services 415,104.64 660,979.70
Write-back of tax received - -
Other cash received concerning operating activities 10,856,234.00 10,622,478.66
Subtotal of cash inflow arising from operating activities 11,271,338.64 11,283,458.36
Cash paid to/for purchasing goods and receiving labor services - -
Cash paid to/for staff and workers 4,844,266.68 4,635,929.71
Taxes paid 1,203,875.22 1,180,497.59
Other cash paid concerning operating activities 1,486,797.86 7,874,858.13
Subtotal of cash outflow arising from operating activities 7,534,939.76 13,691,285.43
Net cash flows arising from operating activities 3,736,398.88 -2,407,827.07
II.Cash flows arising from investment activities
Cash received from recovering investment - -
Cash received from investment income 33,574.75 -
Net cash received from disposal of fixed, intangible and
- -
other long-term assets
Net cash received from disposal of subsidiaries and other units - -
Other cash received concerning investing activities - -
Subtotal of cash inflow from investing activities 33,574.75 -
Net cash paid for purchasing fixed, intangible and other
33,862.00 31,955.00
long-term assets
Cash paid for investment - 117,873.15
Net cash received from subsidiaries and other units - -
Other cash paid concerning investing activities - -
Subtotal of cash outflow from investing activities 33,862.00 149,828.15
Net cash flows arising from investing activities -287.25 -149,828.15
III.Cash flows arising from financing activities
Cash received from absorbing investment - -
Incl:Cash received from absorbing minority shareholders - -
Cash received from loan - 6,000,000.00
Other cash received concerning financing activities - -
Subtotal of cash inflow from financing activities - 6,000,000.00
Cash paid for settling debts 2,240,000.00 2,120,000.00
Cash paid for dividend and profit distributing or interest paying 1,370,541.23 1,439,394.14
Incl:Dividend and profit of minority shareholder paid by subsidiaries - -
Other cash paid concerning financing activities - -
Subtotal of cash outflow from financing activities 3,610,541.23 3,559,394.14
Net cash flow arising from financing activities -3,610,541.23 2,440,605.86
IV.Influence on cash due to fluctuation in exchange rate - -1,362.19
V.Net increase of cash and cash equivalents 125,570.40 -118,411.55
Plus:Balance of cash and cash equivalents at the period begin 324,541.62 401,503.65
VI.Balance of cash and cash equivalents at the period-end 450,112.02 283,092.10
（The Notes to the Financial Statements are essential parts of the Finanical Statements）
26
Sta tem en t o n C han ge s o f O wne rs ' E qui ty
Sem i-an nual of 2011
Pr epa re d b y: SH ENZ HE N T EL LUS H OLD IN G C O. , L TD . u ni t: RM B
A mou nt i n th is p er io d A mo un t in l as t per io d
O wn er s' e qu it y at tr ib ut ab le to p ar en t co mp an y O wn er s' e qu it y a tt ri bu ta bl e to p ar en t co mp an y
It em s M in or it y T ot al o wn er s' Mi no ri ty T ot al o wn er s'
Sh ar e C api ta l Su rp lu s R et ai ne d i nt er es t eq uit y S ha re Ca pi ta l S ur pl us R et ai ne d in te re st eq ui ty
ca pi ta l r es er ve r es er ve s pr of it c ap ita l re se rv e r es er ve s pr of it
I. B al a nc e a t t he en d o f 220,28 1,600.00 5,442,406.57 2,952,586.32 -103,250,699.73 - 1 25,4 25,893.16 220,281,600.00 5,874,407 .03 2 ,952,586.32 -1 05,286 ,986.57 - 123,821,606.78
la s t y ea r
Pl us :C han ge s of
- - - - - - - - - - - -
ac co un tin g po li cy
Erro r c orrec tio n o f the la st
- - - - - - - - - - - -
pe riod
II . Ba l an ce at th i s 220,28 1,600.00 5,442,406.57 2,952,586.32 -103,250,699.73 - 1 25,4 25,893.16 220,281,600.00 5,874,407 .03 2 ,952,586.32 -1 05,286 ,986.57 - 123,821,606.78
ye a r- b eg in
II I .I n cr ea s e/ d ec r ea s e
in th i s ye a r( D ec r ea s e - 24,312.75 - -997,302.06 - -9 72,989.31 - -432,000 .46 - 2,036 ,286.84 - 1,604,286.38
is li s te d w it h "- " )
（I )N et p ro fi t - - - - 997,302.06 - -997,302.06 - - - 2,036,286.84 - 2,03 6,286.84
（I I) Ot he r in te gr at ed
- 24,3 12.75 - - - 24,312.75 - -432,000.46 - - - -43 2,000.46
in co me
Sub tota l o f (I) an d (II) - 24,3 12.75 - - 997,302.06 - -972,989.31 - -432,000.46 - 2,036,286.84 - 1,60 4,286.38
(I II )O wne rs ' de vo te d an d
- - - - - - - - - - - -
de cr ea se ca pi ta l
1.Ow ne rs' de vo ted ca pit al - - - - - - - - - - - -
2.Am ou nt c alc ulate d into
- - - - - - - - - - - -
own ers' eq uit y pa id in sh ares
3.Ot he r - - - - - - - - - - - -
（I V) Pr of it d is tr ib ut io n - - - - - - - - - - - -
1.W ith draw al o f surpl us
- - - - - - - - - - - -
re serves
2Wi thd ra wal of ge ne ral risk
- - - - - - - - - - - -
provisio n
3.Distrib ution f or
- - - - - - - - - - - -
own ers(sh areh olde rs)
4.Ot he r - - - - - - - - - - - -
(V )C ar ryi ng f or wa rd - - - - - - - - - - - -
in te rn al ow ne rs ' eq ui ty
1.Cap ita l rese rv es co nve rted to
- - - - - - - - - - - -
ca pi tal ( sh are c ap ita l)
2.Su rp lus rese rves co nve rted to
- - - - - - - - - - - -
ca pi tal ( sh are c ap ita l)
3Re me dy in g loss wi th p ro fit
- - - - - - - - - - - -
surplu s
4.Ot he r - - - - - - - - - - - -
（V I） S pe ci al i nv en tor y - - - - - - - - - - - -
1.W ith draw al in this pe riod - - - - - - - - - - - -
2.U sed in th is pe rio d - - - - - - - - - - - -
IV . Ba l an ce at th e e n d 220,28 1,600.00 5,466,719.32 2,952,586.32 -104,248,001.79 - 124,452,903.85 220,281,600.00 5,442,406 .57 2 ,952,586.32 -1 03,250 ,699.73 - 125,425,893 .1 6
of th i s ye a r
27
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
SHENZHEN TELLUS HOLDING CO., LTD.
Notes to Financial Statements
Ended as 30 June 2011 Unit: RMB Currency: CNY
Note1.Basic information
1. Company Profiles
Shenzhen Tellus Machinery Co. Limited is a state-owned enterprise, established in Shenzhen in the
People’s Republic of China (the PRC) On 11 December 1992; the Shenzhen Municipal People’s
Government approved the reorganization of Shenzhen Tellus Machinery Co. Ltd. to become a
public limited company. Shenzhen Tellus Machinery Co. Ltd. was renamed Shenzhen Tellus
Holding Company Limited (hereinafter referred to as “the Company”) on 30 June 1994, with
approval by the Shenzhen Administration for Industry and commerce. The company respectively
obtained the approval certificates “Shen Zhen Ban Fu (1993) No. 34” and “Shen Zhen Shi Zi (1993)
No. 22”from the Shenzhen Stock Management Office and Shenzhen Stock Exchange in June 1993.
On 31 March 1997, with the approval of Shenzhen Municipal People’s Government “Shen Fu Han
(1997) No.19” and China Security Regulatory Commission “Zhen Jian Han (1997) No.5”,
Shenzhen Investment Administrative Company transferred its 159,588,000 shares to Shenzhen Te
Fa (Group) Company Company Limited (hereinafter referred to as “the Te Fa Group”). The shares
transferred represent 72.45% of the total issued shares of the Company. In order to circulate all the
non-negotiable shares in the A share market, the Te Fa Group, as the one and only shareholder of
non-negotiable shares in the Company, gave 13,717,440 shares to the holders of tradable shares of
the company in the A share market(Per 10 tradable shares for 4 shares). The transferring was
finished on 04 January 2006. After the split-share reform was completed, The Te Fa Group holds
66.22% of the shares capital of the Company.
The Company has Business License for Legal Person Numbered 440301103017750.
2. Industry, Business Scope, main products or service
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.
With the approval by Shenzhen Administration for Industry and Commerce, the Company’s
business scope includes investment (specific projects needs application); develop and operate the
real estate business on the land with usage rights; rental and management for the owned property;
warehouse and transportation, mechanical accessory processing, mechanical equipment installation,
mainland commerce, goods and materials business, (Government monopolistic goods and materials
are not included.), import and export business of internal production materials and accessories.
Import and export business complies with the approval certificate (Shen Mao Guan Zheng Zi
No.098).
During the period reported, there was no change in the main operating business.
3. Approver and approval reporting date of financial report
The financial report of the Company was approved and reported by the Board of the Company
dated 10 August 2011.
Note2. Accounting Policies, Accounting Estimates and Errors of previous term
1. Basis Preparation of the Financial Statements
The Company continues to operate as a going concern. These financial statements have been
prepared on an accrual basis, according to the actual transactions and events.
28
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
2. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the semi-annual of 2010 are in conformity with the
requirements of the Accounting Standard for Business Enterprises(2006) issued by Ministry of
Finance R.R.C, and present fairly, in all material respects, the financial position, the results of
operations, the cash flows and other relevant information of the Company.
3. Fiscal period
The accounting year of the company is from 1 January to 31 December of the Gregorian calendar
year.
4. Currency used in book-keeping
The Company’s reporting currency is the RMB Yuan.
5. Accounting treatment of the merging entities under common control and different control
Merger of companies refers to those trade or event that merges over two individual companies into
one report subject. Merger of companies is divided into merger of enterprises under common
control and merger of enterprises under different control.
5.1 Merger of entities under common control
Both before and after the merger, the enterprises are under common control of sole party or several
parties, and the controlling power is by no means temporary, it is regarded as merger of enterprise
under common control. Assets and liabilities obtained by the merging party are calculated at their
book value with the merged parties at the merger day. The differences between the book value of net
assets and the book value of consideration price (or the total of face value of share issued) are
adjusted to the share capital premium under the capital reserves. If the share capital premium is not
enough to neutralize the difference, it will be adjusted to the retained gains.
Direct expenses occurred to the merging party including auditing expenses, assessment expenses;
law service expenses etc. for the merger are accounted into current gains and losses account when
occurred. The issued bonds for the merger or handling charge, commission etc. of the bearing of
other debts are accounted into the initial measured amount of issued bonds and other debts account.
The handling charge, commission etc. of issued equity securities for the merger, abated the income
of equity securities premium. If the premium income is not enough for abatement, it will be abated
to the retained gains. The consolidation day is the date when the controlling power over the merged
parties is practically obtained by the merging party.
5.2 Merger of entities under different control
When the enterprises participated in the merger are not under controlling of the same party or group
of parties, either before or after the merger, the merger is regarded as merger of enterprises under
different control. The merger cost paid by buying party is the fair value of cash or non-cash assets,
liability occurred or undertaken, or equity instrument issued thereof, on the day of purchasing to
obtain power of control over the bought party, and those sum of expenses directly related to the
merger. The difference between non-cash assets and its book value will be accounted into current
gains and losses account.
When the merger cost is greater than the share of fair value of recognizable net asset of the bought
parties, the balance is recognized as goodwill; when the merger cost is lower than the share of fair
value of recognizable net asset of the bought enterprise, revising will firstly be done on the merger
cost and fair value of each recognizable assets, liabilities, and contingent liabilities of the bought
party, and if the merger cost is still lower than the share of fair value of recognizable net asset of the
bought enterprise, the balance will be accounted into current gains and loss account.
The purchasing day is the date when the controlling power over the bought parties is practically
obtained by the buying party. The buying party allocated the merger cost at the purchasing day for
the confirmation of various recognizable assets, liabilities or contingent liabilities obtained from
29
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
bought parties.
Merger of business treated as the same method.
6. Preparing method of consolidated financial statements
The range of consolidated financial statement consisted of the Company and its subsidiaries.
Controlling power means the Company has the ability to decide the financial and operation issued
of another firm and can obtain profit from the firm’s business operation.
Subsidiaries added as merger of enterprises under common control, while preparing consolidated
financial statement, regarded as the merged subsidiaries that controlled by Company’s final
controller at the beginning of controlling. Therefore, the operation result from the beginning of
controlling by final controller of the Company demonstrated in the consolidated income statement
and the comparison amount in the consolidated financial statement shall be adjusted accordingly.
Subsidiaries added as merger of enterprises under different control, while preparing the current
consolidated financial statement, adjusted subsidiary’s financial statement on the basis of various
recognizable assets and fair value of liabilities recognized at the day of purchasing. Their assets,
liabilities and operation results after the purchased day have been demonstrated in the consolidated
financial statement, and the initial amount and comparison amount of the consolidated financial
statement will not be adjusted.
Those minor shareholders’ equity and minor shareholders’ gains and losses in subsidiaries are
demonstrated respectively under the shareholders’ equity items in the consolidated balance sheet
and net profit items in the consolidated income statement.
When the share of losses attributable to the minor shareholders has exceeded their shares in the
shareholders’ equity at the beginning of term, if the Articles of Association of the Company has
decided beforehand that the minor shareholders has the responsibility to undertake the losses and
have the power to make up them, the shareholders’ equity shall be deducted thereof. If not so, it will
be deducted from the shareholders’ equity attributable to the parent company of the Company.
Profits produced by the subsidiary of the Company before making up of the losses attributed to the
minor shareholders but undertaken by the parent company of the Company.
Concerning the different accounting periods or accounting policies of the subsidiaries, necessary
adjustment have been made to the financial statement of subsidiaries accord with the Company’s
accounting periods or accounting policies while consolidating the financial statement. Major trades
of the Company in merge have been neutralized when consolidated, internal realized profit and
current balance included.
7. Determination criteria of cash and cash equivalent
Cash refers to the inventory cash of the Company and the deposit available for payment anytime.
Cash equivalents represent short-term, highly liquid investments, which are readily convertible into
known amounts of cash and are subject to an insignificant risk of change in value.
8. Foreign currency business and the conversion of foreign currency statement
8.1Foreign currency transaction
The foreign currency transactions will be accounted to Renminbi that translated with the spot
exchange rate on the date of transaction occurred.
At the balance sheet day, monetary items in foreign currency translated to Renminbi at the instant
exchange rate of that day, the occurred exchange differences are accounted into current gains and
losses, except for the exchange difference of special foreign currency borrowing satisfying the
conditions of capitalization, which is capitalized and accounted into cost of related assts.
Non-monetary items in foreign currency and measured with historical costs are still measured at
standard currency with exchange rate of the day when the transaction is happened.
8.2Translation of foreign currency statement
30
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Assets and liability items of overseas business operation in the balance sheet are translated at the
spot exchange rate of balance sheet date; shareholders’ equity except for retained profits is
translated at the spot exchange rate of the day when they happened. Income and expenses items of
overseas business operation in the income statement are translated at the spot exchange rate of the
date when the trades happened. The difference amount of foreign currency statement translation is
demonstrated under shareholders’ equity items in the balance sheet. The cash flow items of overseas
business operation are translated on the spot exchange rate of the day when the cash flow was
happened. The influences of fluctuation of exchange rate on cash will be demonstrated in the cash
flow statement.
9. Financial instruments
9.1Classification of financial assets and financial liabilities
The initial Recognition of financial assets and financial liabilities are divided into the following s:
the financial assets or financial liabilities that measured at fair values and whose variations are
included into the current gains and losses; held-to-maturity investments; loans and accounts
receivable; financial assets available for sale and other financial liabilities.
9.2Recognition of financial assts and financial liabilities
The recognition of financial assets is the process of counted the items that meet the definition of
financial assets and the recognition condition of financial assets into balance sheet. And the
recognition of financial liabilities is the process of counted the items that meet the definition of
financial liabilities and the recognition condition of financial liabilities into balance sheet.
9.3Measurement of financial assets and financial liabilities
In initial recognition, the financial assets and financial liabilities are base on the fair value.
Concerning the financial assets or financial liabilities that measured at fair value and whose
variations are included into the current gains and losses, the relevant transaction expenses directly
included in current gains and losses; concerning the other types of financial assets or financial
liabilities, the relevant transaction expenses counted as the initial recognition amount.
The financial assets and financial liabilities shall be follow-up measured based on fair value
excluding the loans and account receivable, investment held-to-maturity and other financial
liabilities. Other financial liabilities shall be follow-up measured based on the effective-interest
method by cost amortizing.
The gains and losses from the change of financial assets or financial liabilities measured by fair
value and with variations accounted into current gains and losses account shall be accounted into
current gains and losses.
The gains/losses arising from the fair value change of financial assets available for sale, except the
exchange difference arising from depreciation losses and foreign currency monetary financial assets,
directly accounted into capital reserves. Transfer the gains/losses while determined the financial
assets recognition, accounted into current gains/losses.
The exchange differences from salable foreign currency monetary financial assets shall accounted
into current gains/losses. The interest of salable financial assets calculated based on
effective-interest method shall accounted into current gains/losses. The cash dividend of salable
investment of equity instrument shall account into current gains/losses when the invested company
declares to issuing the dividend.
Concerning the financial assets or financial liabilities calculated based on amortized cost, if there
has gains/losses from depreciation, amortizing or recognizing termination, then shall accounted into
current gains/losses.
9.4Termination of financial assets and financial liabilities
Terminated recognition of financial assets means written-off the financial assets from Company’s
account and balance sheet. When the contract of receiving financial assets’ cash flow have been
terminated or the financial assets have been transfer and meets the terminated recognition of
31
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
requirements of Enterprise Accounting Standard No23—Transfer of Financial Assets, the financial
assets terminated recognized.
Terminated recognition of financial liabilities means written-off the financial liabilities from
Company’s account and balance sheet. Recognized a financial liabilities or partial financial
liabilities terminated when the financial liabilities is wholly or partially terminated.
9.5Deciding of fair value of financial assets and financial liabilities
9.5.1 When there is an active market for the financial instrument, the value quoted at the active
market is adopted to determine the fair value;
9.5.2 When there isn’t any active market, fair value will be recognized by evaluation techniques;
9.5.3 Original obtained or derivative financial assets or undertaken financial liabilities, the fair value
shall base on the trading price in market.
9.5.4 the financial instrument’s fair value determined by discount of future cash flows, use the
discount rate of market return of the materially same other financial instruments in contract clause
or characteristic. If the rate-listless short-term account receivable and the current value of account
payable have small difference to actual prices, measured based on the actual trading price.
9.6 Impairment of financial assets
Except for financial assets accounted at fair value and variation accounted into current gains and
losses account, the Company undertakes inspection on the book value of other financial assets at
balance sheet day, whenever particle evidence showing that impairment occurred with them,
impairment provisions are provided.
9.6.1 Investment in possession till expiration
Upon objective evidence recognized for impairment losses at balance sheet day, the difference
between book value at period-end and current value of predicted future cash flow are recognized as
impairment that accounted into current gains/losses.
9.6.2 Financial assets available for sale
On balance sheet date, the Company analysis the impairment of financial assets available for sale, if
the fair value of financial assets available for sale changes turns dramatically down to over 50% of
the initial cost, or the down situation was predicted non-temporary and last more than 12 months
after fully considering, than the difference between current value of predicted future cash flows and
book value shall accounted into impairment provision.
When there is impairment of financial assets available for sale, transfer the accumulative losses
recognized as losses and accounted in to impairment provision.
10. Account receivable
10.1 Recognition and provision of bad debt provision on receivable accounts with large amount
The receivable accounts with large amount refers to the receivable accounts over RMB 10 million;
the other receivable accounts with large amount refers to the other receivable accounts over RMB
0.5 million.
Accruing way for accounts with single significant amount and bad debts provision accrued
individually: The Company performs impairment test separately on individual receivable accounts
with large amount, if found particle evidence on impairment. Concerning the impairment test of
single major amount, if there has principal evidence showing impairment, recognized losses
according to the difference between current value of original actual discount rate lowers its book
value with the predicts future cash flow(excluding the future credit loss) accounted into current
gains/losses.
2.Accounts whose bad debts provision was accrued by combination
In combination, accounts whose bad debts provision was accrued by age analysis
Account age Rate for receivables (%) Rate for other receivables (%)
Within 1 year (included) Un-withdrawing Un-withdrawing
1-2 years 5 5
32
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
2-3 years 20 20
Over 3 years 50 50
3.Accounts with single significant amount and bad debts provision accrued individually
The receivable accounts with large amount refers to the receivable accounts over RMB 10 million;
the other receivable accounts with large amount refers to the other receivable accounts over RMB
0.5 million.
Accruing way for accounts with single significant amount and bad debts provision accrued
individually: on balance sheet day, as for accounts with single significant amount and bad debts
provision accrued individually, the Company recognized losses according to the difference between
current value of original actual discount rate lowers its book value with the predicts future cash
flow(excluding the future credit loss) accounted into current gains/losses
11.Inventories
11.1 Categorizing of inventory
Inventories are divided into raw materials, inventory products, consumption biological assets,
products and low-value consumable products etc.
11.2 Calculation method of inventory
The various inventory’s purchase and storing calculated based on actual cost; Issuing inventories are
measures by weighted average method, low-value consumption and packages used the separated
amortizing method.
11.3 Recognition basis of realizable net value of inventory and providing basis of inventory
impairment provision
Recognition of realizable net value of inventory that directly for selling including completed
products, commodity and sale-able materials, the amount of predicted sales prices less predicted
sales expenses and tax. Concerning the material inventories need for processing, the net realizable
value is the amount of predicted sales price less predicted cost at completion of construction, less
predicted sales expenses and tax.
The provisions of value decrease of inventories: on the balance sheet date, the provisions of value
decrease of inventories are recognized when the net reliable values of inventories are lower than its
book values, and are included in the current profits and losses. If the value of inventories is
recovered in latter period, the amount of write-down should be resumed and be reversed from the
provisions of value decrease of inventories that has been made. The reversed amount should be
transferred to the current profits and losses. While recognized the realizable net value of inventory,
based on the value price that have been estimated by reliable evidence obtained balance sheet date,
considering the purpose of inventory, the fluctuation between the date of balance sheet and the date
of disclosure, if there has principal evidence showing new or more evidence towards inventory at
balance sheet date, counted as adjustment item; Otherwise, counted as non-adjustment item.
11.4 Inventory system
Inventory system is the perpetual inventory system.
12.Long-term equity investment
12.1. Category of long-term equity investment
Long-term equity investments are: long-term equity investments on subsidiaries, long-term equity
investments on joint enterprises, long-term equity investments on associated enterprises, long-term
equity investments on enterprises with little control and influence which is not quoted in the
principle market and whose fair value cannot be reliably measured (hereinafter referred to as "other
long-term equity investments").
12.2 Initial measurement of long-term equity investment
12.2.1 Long-term equity investment formed by corporate merger
33
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
For the long-term equity investment formed by corporate merger, if it is the long-term equity
investment obtained from the corporate merger under the same control, the share of book value of
owner’s equity on the merger date shall be taken as the initial investment cost, the difference
between the initial investment cost of long-term equity investment and book value of compensatory
payment rate shall be adjusted to the share capital premium under the capital reserves; if the share
capital premium is not enough to neutralize the difference, it will be adjusted to the retained gains.
Directed expenses from corporate merger will accounted into current gains and losses account when
it happened.
The long-term equity investment obtained through the corporate merger under different control shall
be taken the assets paid for control power from the bought parties, occurred or undertaken liabilities
and the fair value of issued equity bonds as the initial investment cost of long-term equity
investment. Direct expenses from corporate merger will accounted into initial investment cost.
12.2.2 long-term investment obtained from other methods
The long-term equity investment obtained by cash payment shall take the actual amount of payment
as initial investment cost. The initial cost consists of the expenses directly relevant to the
obtainment of the long-term equity investment, taxes and other necessary expenses. But the cash
dividends in purchase payment, which is declared but not yet received, shall be included in a
separate account receivable.
The long-term equity investment obtained from issuing the equity bonds shall taken the fair value of
issued equity bonds as initial investment cost. The initial cost of a long-term equity investment
obtained by issuing equity securities shall be recognized at the fair values of the issued equity
securities.
The initial cost of a long-term equity investment of an investor shall be recognized at the
contractual value, except the contractual value is unfair.
If a long-term investment is obtained by the exchange of non-monetary assets, the transaction
possesses commercial nature and the fair values of assets received or surrendered can be measured
reliably, the initial cost of the long-term equity investment shall be recognized at the fair values of
assets surrendered and the relevant expenses. The balance of fair values and the book values of
assets received is included in the current profits and losses.
If the long-term equity investment is obtained by liabilities restructuring, the initial cost of the
long-term equity investment shall be recognized by the fair values of equity. The balance of the
initial cost of long-term equity investment and book value of claim is included in the current profits
and losses.
12.3. Subsequent measurement of a long-term equity investment
For a long term equity investment on the subsidiaries, the Company shall be accounted by the cost
method as prescribed by these Standards, and shall make an adjustment by the equity method when
it works out consolidated financial statements. The following long-term equity investments of the
joint venture and associated enterprises shall be measured by the equity method.
12.4. Recognition of gains/losses of long-term equity investment
The value of a long-term equity investment measured by the cost method shall be recognized at its
initial investment cost. The cash dividend or profit enjoyed by invested enterprise that have been
announced by investment enterprise shall be recognized as investment income, excluding the actual
payment amount of investment while obtaining the investment or the cash dividend or profit that
have been announced but have not distributed obtained in the consideration.
Long-term equity investment calculated based on equity method, recognized investment income as
well as adjusted the book value of long-term equity investment based on the fair value of
recognizable assets of invested enterprises while obtaining the investment. According to the
distribution profit or cash dividends that has been announced, calculating the receivable part,
decreasing the book value of long-term equity investment correspondingly. Concerning other
owners’ equity changes of invested enterprises except the net gains/losses, adjusted the book value
34
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
of long-term equity investment and accounted into owners’ equity.
When disposing a long-term equity investment, the difference between its book value and the actual
purchase price shall be included in the current profits and losses. For the long-term equity
investment measured by the equity method, any variations other than the changes of net profits and
losses of the investee are included in the owner's equity. The amount of previous long-term equity
investment included in the owner's equity shall be transferred to the current profits and losses in a
certain proportion.
12.5. Basis of deciding the common control and major influence on the invested enterprise
12.5.1 recognition of invested enterprise with common control
Common controlling means controlling the economic activities jointly according to the contract’s
regulations. All joint parties made out a investment contract or Agreement that concerning the
significant finance and operation strategy-making, all joint parties consent the significant finance
and operation strategy-making for approving.
12.5.2 Basis major influence
Major influence refers to the right of decision-making for an enterprise’s finance and operational
strategy. Therefore, it can not be controlled or controlled with other parties on these strategy making.
Generally, if the Company directly/indirectly holds over 20% but lower than 50% voting shares of
the invested enterprises though its subsidiaries, shall recognized as major influence on invested
enterprises.
12.6. Impairment testing and basis of impairment provision
Impairment testing is performed on the long-term equity investment at each balance sheet date. In
case of there is evidence in subsidiaries, joint venture and associated enterprises showing
impairment has occurred, the recoverable amount shall be assessed. If the recoverable amount is
lower than the book value, the impairment provision shall be provided and accounted into current
gains and losses and impairment provision of long-term equity investment. When impairment has
occurred in other equity investment, market return of similar financial assets towards the confirmed
current value and the book value of investment, their difference shall be recognized as impairment
losses that accounted into current gains/losses. Once the impairment loss of a long-term equity
investment is recognized, it shall not be written back in subsequent periods.
13. Investment real estate
13.1 Category of investment real estate
Investment real estate divided into rented land use rights, land use right which are held and prepared
for transfer after appreciation and the rented buildings.
13.2 Measurement of investment real estate
Investment real estate is measured according to the initial cost; the Company adopts the cost model
to have follow-up measurements of the investment real estate. In which the depreciation method and
impairment provision recognition of a building shares the same method with fixed assets’
calculation, the amortizing method of land use right and impairment provision recognition shares
the same method with intangible assets’ calculation.
14. Fixed assets
14.1．Recognition of fixed assets
14.1.1the economic profit of fixed assets that probably inflow into the Company;
14.1.2cost of this fixed assets can measured reliability.
14.2．Category of fixed assets
The fixed assets of the Company divided into house and buildings, equipment and machinery,
transportation equipment, electronic equipment and other equipments.
14.3．Depreciation of various fixed assets
Depreciations on fixed assets shall be accounted by using the method of average life length, the
35
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
service life of fixed assets, expected net residual value and the year depreciation rate are as follows:
categories Depreciation age(year) Salvage value rate (%) Annual depreciation ratio (%)
Houses & buildings 35 3 2.77
equipment and machinery 12 3 8.08
transportation equipment 7 3 13.86
electronic equipment 7 3 13.86
other equipments 7 3 13.86
14.4．Impairment test on fixed asset and providing of impairment provision
Impairment testing is performed on fixed assets at each balance sheet day. When evidence showing
that impairment has occurred, the recoverable value shall be assessed. The recoverable value of an
asset is determined by the higher value between the net amounts of fair value of fixed assets minus
disposal expenses and the current value of predicted future cash flow of fixed assets. If the
recoverable value of an asset is lower than its book value, the balance shall be provided for
impairment provision and accounted into current income account. Once fixed asset impairment is
recognized, it shall not be written back in subsequent fiscal periods.
14.5． Basis of deciding the fixed assets from financing rental and its calculation
The financing rental fixed assets recognizable for the following one or more standards:
14.5.1 Ownership of the rental fixed assets has transfer to lessee at the expiry of renting.
14.5.2 The lessee has the option to purchase rental fixed assets, the decision purchase price
predicted lower than the fair value of rental fixed assets with option rights, therefore, at the begging
of lease, reasonably recognized that the lessee will use the option rights.
14.5.3though the ownership are not transfer, the time of rental occupied most of the proportion of
use life of a rental assets.
14.5.4 The minimum rental payment current value of the lessee at lease date almost equals to the
fair value of rental fixed assets at lease date; the minimum rental amount received current value of
the lesser at lease date equals to the fair value of rental fixed assets at lease date.
14.5.5The rental fixed assets have specific natures, only the lessee can use without making greater
changes.
At the beginning of leasing, takes the lower ones between fair values of rental fixed assets and
minimum rental payment amount as the accounting value for fixed assets rental, the minimum rental
payment as the accounting value of a long-term payable, their difference recognized as uncertain
financing expenses. The initial directly expenses attributable to rental fixed assets occurred in the
leasing negotiation and in the process of signing lease contract shall be accounted into value of
rental fixed assts.
While calculating the current value of minimum rental payment, if the interest rate implicit in the
lease of the lesser available, the discount rate will be the interest rate implicit in the lease; otherwise,
the discount rate will be adopted by the lease contract that have been regulated. If unavailable for
the interest rate implicit in the lease and there is no rate regulated in lease contract, the discount rate
will adopt the loan rate from the bank at the same period. Uncertain financing expenses adopt the
actual rate for amortizing in every period of leasing.
The depreciation of rental fixed assets will share the same policy with self-owned depreciable fixed
assets. If the ownership of rental fixed assets can reasonable recognized, accruing the depreciation
in the use life of this rental fixed assets. Otherwise, take the shorter time between them for accruing
depreciation. Contingent rent accounted into current gains/losses when it happened actually.
14.6． Subsequent expenditures of fixed assets
Subsequent expenditures of fixed assets refer to the expenditures and fitting fees in the process of
renewal during the use life of a fixed asset. If the subsequent expenditures of fixed assets comply
36
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
with the requirements of fixed assets, they should be accounted into cost of fixed assets, at the mean
time deducted the book value of the replaced part; if not comply with the requirement, accounted
into current gains and losses.
15. Construction-in-progress
The construction-in-progress divided into pre-construction preparation, engineering in progress,
setting engineering, technology reformed engineering and overhaul engineering etc. and the cost of
construction in process is determined at practical construction expenditures. The construction will
be transferred to fixed asset with relative expenses occurred as soon as the construction reaches the
useful status.
At the balance sheet date, as to construction in process which is long-term suspended and will not
be re-started in three years, its loss accounted into Construction-in-progress impairment losses shall
be calculated by the variance between the recoverable amount and the book value.
16. Borrowing expenses
The borrowing expenses shall include interests on borrowings, amortization of discounts or
premiums on borrowings, ancillary expenses, and exchange balance on foreign currency borrowings.
Where the borrowing expenses 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 expenses shall be recognized as
expenses on the basis of the actual amount incurred, and shall be recorded into the current profits
and losses.
16.1 Conditions of capitalization
The borrowing costs shall not be capitalized unless they simultaneously meet the following
requirements:
16.1.1The asset disbursements have already incurred, which shall include the cash, transferred
non-cash assets or interest bearing debts paid for the acquisition and construction or production
activities for preparing assets eligible for capitalization;
16.1.2The borrowing costs has already incurred; and
16.1.3 The acquisition and construction or production activities which are necessary to prepare the
asset for its intended use or sale have already started.
16.2 Recognition of capitalized amounts
As for specifically borrowed loans for the acquisition and construction or production of assets
eligible for capitalization, the to-be-capitalized amount of interests shall be determined in light of
the actual cost incurred of the specially borrowed loan at the present period minus the income of
interests earned on the unused borrowing loans as a deposit in the bank or as a temporary
investment.
Where a general borrowing is used for the acquisition and construction or production of assets
eligible for capitalization, the enterprise shall calculate and determine the to-be-capitalized amount
of interests on the general borrowing by multiplying the weighted average asset disbursement of the
part of the accumulative asset disbursements minus the general borrowing by the capitalization rate
of the general borrowing used. The capitalization rate shall be calculated and determined in light of
the weighted average interest rate of the general borrowing.
16.3 Capitalize cost suspension
Where the acquisition and construction or production of a qualified fixed asset is interrupted
abnormally and the interruption period lasts for more than 3 months, the capitalization of the
borrowing costs shall be suspended. The borrowing costs incurred during such period shall be
recognized as expenses, and shall be recorded into the current profits and losses, till the acquisition
and construction or production of the asset restarts. If the interruption is a necessary step for making
the qualified fixed asset under acquisition and construction or production to be ready for the
37
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
intended use or sale, the capitalization of the borrowing costs shall continue.
16.4Cease to capitalize cost
When the qualified asset under acquisition and construction or production is ready for the intended
use or sale, the capitalization of the borrowing costs shall be ceased. The borrowing costs incurred
after the qualified asset under acquisition and construction or production is ready for the intended
use or sale shall be recognized as expenses at the incurred amount when they are incurred, and shall
be recorded into the current profits and losses.
17.intangible assets
Intangible assets consist of intangible assets with limited useful life and those intangible assets with
uncertain useful life.
17.1Measurement of intangible assets
The intangible assets shall be initially measured according to its actual cost.
The cost of self-developed intangible assets shall include the total expenditures incurred during the
period from the time when it meets the provisions of certain standards to the time when the
expected purposes of use are realized.
17.2Amortization of intangible assets
17.2.1With regard to intangible assets with limited service life, its amortization amount shall be
amortized within its service life systematically and reasonably. If it is unable to determine the
expected realization pattern reliably, intangible assets shall be amortized by the straight-line
method.
17.2.2 Intangible assets with uncertain service life may not be amortized.
17.3The impairment of intangible assets
Impairment tests should be conducted towards intangible assets and intangible assets reached no the
useful status with uncertain service life at the balance sheet day.
For intangible assets with limited life, at the balance sheet day, where any evidence shows that there
is possible assets impairment, the recoverable amount of the assets shall be estimated. If the
recoverable amount is lower than its carrying value, the carrying value of the asset shall be recorded
down to the recoverable amount, and the reduced amount shall be recognized as the losses of
intangible asset impairment and be recorded as the current profits and losses. Simultaneously, a
provision for the asset impairment shall be made accordingly.
Once any loss of asset impairment is recognized, it shall not be switched back in the future
accounting periods.
18. Amortization policy of long-term prepaid expenses
Determine a reasonable benefit period for Long-term prepaid expenses, and amortize it according to
its average benefit period. Concerning the Long-term prepaid expenses with undetermined
reasonable benefit period shall amortize it according to its average benefit period of no longer than
10 years.
19. Employee remuneration
The term "employee remuneration" refers to all kinds of payments and other relevant expenditures
given by enterprises in exchange of the services offered by the employees. The employee
remuneration shall include: (1) Wages, bonuses, allowances and subsidies for the employees; (2)
Welfare expenses for the employees; (3) Medical insurance, endowment insurance, unemployment
insurance, work injury insurance, maternity insurance and other social insurances; (4) Housing
accumulation fund; (5) Labor union expenditure and employee education expenses; (6)
Non-monetary welfare; (7) Compensations for the cancellation of the labor relationship with the
employees; and(8) Other relevant expenditures of services offered by the employees.
During the accounting period of an employee' providing services to an enterprise, the enterprise
38
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
shall recognize the remuneration payable as liabilities. Except for the remuneration for the
cancellation of the labor relationship with the employee, the enterprise shall, in accordance with
beneficiaries of the services offered by the employee, treat this liabilities as the product costs and
service costs; construction costs of fixed asset; costs of intangible assets and the current profits or
losses.
20. Predicted debts
The obligation pertinent to contingencies shall be recognized as estimated debts when the following
conditions are satisfied simultaneously:
20.1That obligation is a current obligation of the enterprise;
20.2 It is likely to cause any economic benefit to flow out of the enterprise as a result of
performance of the obligation; and
20.3 The amount of the obligation can be measured in a reliable way.
The predicted debt use the optimum number needed in the current obligations of implement for
initial measurement. The discharge of predicted debts that needs wholly or partial predicts by the
third party for compensation, compensation amount considered as assets inclusively when
recoverable basic confirmed. The confirmed compensation amount should not exceed the book
value of predicted debts.
If the obligation of a losses contract and undertaken reconstruction obligations meets the
requirement of the abovementioned conditions, recognized as predicted debts. Promise to selling
partial business (namely signed the agreement of restricting sales) shall be confirmed as
reconstruction liability due to the reconstructed.
21. Income
21.1 No revenue from selling goods may be recognized unless the following conditions are met
simultaneously:
21.1.1 The significant risks and rewards of ownership of the goods have been transferred to the
buyer by the enterprise;
21.1.2 The enterprise retains neither continuous management right that usually keeps relation with
the ownership nor effective control over the sold goods;
21.1.3 The relevant amount of revenue can be measured in a reliable way;
21.1.4 The relevant economic benefits may flow into the enterprise; and
21.1.5 The relevant costs incurred or to be incurred can be measured in a reliable way.
21.2 If an enterprise can, on the date of the balance sheet, reliably estimate the outcome of a
transaction concerning the labor services it provides, it shall recognize the revenue from providing
services employing the percentage of-completion method.
The company adopted the method which applied the proportion of the costs incurred against the
estimated total costs to measure the work completed.
If an enterprise can not, on the date of the balance sheet, measure the result of a transaction
concerning the providing of labor services in a reliable way, it shall be conducted in accordance
with the following circumstances, respectively: a. If the cost of labor services incurred is expected
to be compensated, the revenue from the providing of labor services shall be recognized in
accordance with the amount of the cost of labor services incurred, and the cost of labor services
shall be carried forward at the same amount; or b. If the cost of labor services incurred is not
expected to compensate, the cost incurred should be included in the current profits and losses, and
no revenue from the providing of labor services may be recognized.
21.3 No revenue from abalienating of right to use assets may be recognized unless the relevant
economic benefits are likely to flow into the enterprise. 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. The amount of royalty revenue should be measured and
39
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
confirmed in accordance with the period and method of charging as stipulated in the relevant
contract or agreement.
22. Government Subsidies
A government subsidy means the monetary or non-monetary assets obtained free by an enterprise
from the government, but excluding the capital invested by the government as the owner of the
enterprise. Government subsidies consist of the government subsidies pertinent to assets and
government subsidies pertinent to income.
Asset-related government subsidies are recognized as deferred income and accounted into the
successive period’s non-operating income account since the relative assets reached the predicted
useful status. The relative assets have been sell-out, transfer, condemned or damaged before the
useful life expire, the un-neutralized balance of deferred income shall be accounted into
non-operating income of current assets disposal.
The government subsidies pertinent to incomes, which are used for compensating the related future
expenses or losses of the enterprise shall be recognized as deferred income and shall included in the
current non-operating income during the period when the relevant expenses are recognized while
which are used for compensating the related expenses or losses incurred to the enterprise shall be
directly included in the current non-operating income.
23. deferred income tax assets and deferred income tax liabilities
Where there is any difference (temporary) between the carrying amount of an asset or liability and
its tax base, it shall be recognized as a deferred income tax liability or deferred income tax asset
according to the present Standards. At the balance sheet date, the deferred income tax assets and
deferred income tax liabilities shall be measured at the tax rate applicable to the period during
which the assets are expected to be recovered or the liabilities are expected to be settled
For those taxable provisional differences related to investments in subsidiaries, joint ventures and
affiliated enterprises, if the Company is able to control the writing back time of the provisional
differences, and these provisional differences may neither be written back in an expectable future,
are not recognized as relative deferred income tax liabilities.
As for any deductible loss or tax deduction that can be carried forward to the next year, the
corresponding deferred income tax assets shall be determined to the extent that the amount of future
taxable income to be offset by the deductible loss or tax deduction to be likely obtained.
For those deductible provisional differences related to investments in subsidiaries, joint ventures
and affiliated enterprises, if these provisional differences may be written back in an expectable
future and may obtained taxable income used to deduct provisional differences in future possibly,
are recognized as relative deferred income tax assets.
Those tax deductions which can be used to deduct losses and can be carried on to future years, to
the extend of the amount of taxable income used to deduct the deducible losses and deductible tax
which can possibly be obtained, are recognized as corresponding deferred income tax assets.
24. Changes of major accounting policies and accounting estimation
24.1．Changes in accounting policies
There were no important changes in accounting policies of the Company in this reporting period.
24.2．Changes in accounting estimates
There were no important changes in accounting estimates of the Company in this reporting period.
25. Error correction of previous accounting
There are no error corrections for previous period.
40
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Note 3. Taxations
The types of tax applicable to the Company, and their tax rates are as follows:
Type Tax base Rate %
Added value of
sold goods 17
VAT
Value of
services 17
Operation tax Operation
turnover 5
City maintaining Taxable
& construction tax turnover 7
Corporation Taxable income
income tax 24
* The Company originally was the Dweller-Enterprises which enjoyed 15% Enterprise Income Tax,
in accordance with 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), the
Company would gradually transit to statutory rate after 5 years of the implementation of New
Income Tax Law, in which 18% tax rate was adopted for year 2008, 20% tax rate for year 2009,
22% tax rate for year 2010 , 24% tax rate for year 2011 and 25% tax rate for year 2012.
Note 4.Enterprise consolidation and consolidated financial statements
1. Information of subsidiaries
1.1．Conditions of subsidiaries under the same control（Expressed in RMB 10,000 Yuan）
Actual
Holding Voting Consolidated
Name of Type of Registere Busines Registered Business investment
proportion proportio statement
subsidiary subsidiary d place s nature capital scope amount at
% n% Yes/No
period-end
Shenzhen
Automobile Automobile
Industry and Wholly-ow
Trading Business and
Company ned Shenzhen Yes
(The Automobile industry accessories
Industry subsidiary
selling
and Trading) 5896 12625 100 100
Automobile
Shenzhen SD maintenance
Huari
Automobile Holding Service &
EnterpriseCo. Shenzhen Yes
Limited subsidiary industry production
(The Hua Ri )
and sales of
USD500 accessories 1922 60 60
Shenzhen Wholly-ow
Zhongtianye Service
ned Shenzhen Leasing Yes
Industry Co. Ltd
(The Zhongtian) industry
subsidiary 725 1070 100 100
41
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Shenzhen Huari
Toyota
Automobile Co. Holding Business Automobile
Ltd Shenzhen selling Yes
(The Huari subsidiary industry
Toyota) 200 181 60 60
Huari Anxin
Automobile
Inspection Ltd in
Shenzhen Shenzhen Yes
(Anxing Holding Service Automobile
Inspection) subsidiary industry 150 inspection 150 0 60
Shenzhen
Automotive Motor
Industry Supply vehicles and
Corporation Wholly-ow Shenzhen parts, Yes
(Supply ned Service chemicals,
Company) subsidiary industry 1111 instruments 648 0 100
1.2．Conditions of subsidiaries consolidated by other means (Expressed in 10,000 RMB Yuan)
Actual
Consolidated
Name of Type of Registered Business Registered investment Holding Voting
Business scope statement
subsidiary subsidiary place nature capital amount at proportion% proportion%
Yes/No
period-end
Shenzhen
Teli
Xinyongtong
Wholly-owned Service Automobile
Automobile
Shenzhen 3290 inspection & 5767 100 100 Yes
Development
subsidiary industry repair
Co. Ltd
(The
Xinyongtong)
Shenzhen SD
Teli Property
Management Wholly-owned Service Property
Co. Ltd Shenzhen 705 management 502 100 100 Yes
(The Teli subsidiary industry
Property)
Shenzhen SD
Teli Real Manufac
Estate Co. Wholly-owned Real estate
Ltd Shenzhen turing in 3115 development 3115 100 100 Yes
(The Real subsidiary
Estate) dustry
Shenzhen
Teli Real
Estate Wholly-owned Service Real estate
Exchange Co. Shenzhen Yes
200 agent 200 100 100
Ltd subsidiary industry
(The
Exchange)
Shenzhen
Xinyongtong
Automobile Production of
Inspection Holding Service automobile
Shenzhen 1961 Yes
Equipment inspection
Co. Ltd subsidiary industry equipment 1000 51 51
(The
Inspection)
Shenzhen
Fairmont Service
Yong Tong Holding Shenzhen 150 Motor vehicle 143 0 95 Yes
industry
Motor subsidiary inspection
42
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Vehicle
Inspection
Limited
(Fairmont
Detection)
Shenzhen
New Yong
Tong
Dongxiao Service
Automobile Shenzhen 150 Comprehensive 143 0 95 Yes
Inspection industry performance
Limited testing of road
(Dongxiao Holding transport
detection) subsidiary vehicles
Shenzhen
Baoan
Shiquan
Industrial Wholly-owned In industrial,
Co., Ltd. Shenzhen Business 200 supply of 150 0 100 Yes
(hereinafter subsidiary industry domestic
referred business and
Shiquan marketing
Company) materials
Shenzhen
Tefa Tellus
Manufac
Real Estate Wholly-owned
Company in Huizhou turing in 400 Real Estate 309 0 100 Yes
Huizhou Inc. subsidiary Development
(Huizhou dustry and
Company) Management
43
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
2. Condition of shareholders’ equity of minority of subsidiaries
Proportion of Amount of written down in
Name of subsidiary the share Minority interests gains/losses of minority
held% shareholders
Shenzhen SD Huari
Automobile Enterprise Co.,
Limited 40% 18,640,775.05 --
Shenzhen Huari Toyota
Automobile Co., Ltd. 40% 2,532,041.19 --
Shenzhen Xinyongtong Automobile
Inspection Equipment Co., Ltd. 49% 3,432,653.76 --
Shenzhen Fairmont Yongtong Motor
Vehicle Inspection Co., Ltd. 5％ -161,192.98 --
Shenzhen New Yong Tong Dongxiao
Automobile Inspection Limited
(Dongxiao Detection) 5％ -52,248.26 --
--
Total 24,392,028.76
(I) Subjects with special purpose or business entity whose control right formed in way of entrusted
operation or lease
Naught
(II) Change of consolidated scope during the reporting period
There is on changes in consolidated scope during the 1st half year of 2011
44
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Note 5. Notes to main items of financial statements
1. Monetary fund
Amount at period-end Amount at period-beginning
Category
Original Original
Exchange rate RMB conversion Exchange rate RMB conversion
currency currency
Cash
RMB 201,561.70 1.0000 201,561.70 159,780.96 1.0000 159,780.96
HKD 28,866.19 0.8516 24,581.34 42,092.83 0.8509 35,816.79
USD 1433 6.7232 9,634.31 1433 6.6227 9,490.33
JPY 250,826.00 0.0813 20,382.12 311,685.00 0.0813 25,327.52
Subtotal 256,159.47 230,415.60
Bank Deposit
RMB 59,060,103.82 1.0000 59,060,103.82 68,519,934.16 1.0000 68,519,934.16
HKD 26,132.00 0.8509 22,235.72 176,934.16 0.8509 150,553.28
USD 29,805.30 6.6227 197,391.58 29,833.79 6.6227 197,580.24
Subtotal of bank deposit 59,279,731.12 68,868,067.68
Other monetory fund 58,130.21 1.0000 58,130.21 24,496.56 1.0000 24,496.56
Total 59,594,020.80 69,122,979.84
Current deposit non-recognized as cash and cash equivalent as at 30 June 2011:
Deposit bank currency deposit amount Deposit term rate notes
SPD Bank Shenzhen Fuhua Branch RMB 3,000,000.00 3 months 2.85% Un-pledge
SPD Bank Shenzhen Fuhua Branch RMB 2,000,000.00 6 months 3.05% Un-pledge
45
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
2. Accounts receivable
2.1 classified by categories
Amount at period-end Amount at period-beginning
Bool balance Bad debt provision Bool balance Bad debt provision
Categories
Accruing Accruing
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Account
receivable with
single minor
amount and 20,131,654.12 41.19% 20,131,654.12 100.00% 20,131,654.12 39.55% 20,131,654.12 100.00%
withdrawal bad
debe provision
singlely
Account receivable of
bad debt provision
11,547,776.10 23.62% 4,729,390.24 40.95% 13,561,376.87 26.65% 4,729,390.24 34.87%
withdrawal by
combination(Age)
Account
receivable with
single minor
amount but 17,202,325.47 35.19% 17,202,325.47 100.00% 17,202,325.47 33.80% 17,202,325.47 100.00%
withdrawal bad
debt provision
singelly
Total 48,881,755.69 100.00% 42,063,369.83 86.05% 50,895,356.46 100.00% 42,063,369.83 82.65%
In combination, accounts whose bad debts provision was accrued by age analysis
Amount at period-end Amount at period-beginning
Age
Amount Proportion Bad debt provision Amount Proportion Bad debt provision
within 1 year 1,631,543.24 14.13% - 2,759,019.87 20.35% -
1-2 years 549,677.87 4.76% 94,365.48 877,963.40 6.47% 43,898.17
2-3 years 1,136,436.96 9.84% 206,136.34 922,349.10 6.80% 184,469.82
Over 3 years 8,230,118.03 71.27% 4,428,888.42 9,002,044.50 66.38% 4,501,022.25
Total 11,547,776.10 100.00% 4,729,390.24 13,561,376.87 100.00% 4,729,390.24
Single item with major amount in period-end or the account receivable of bad debt provision by solely
impairment testing for single item with minor amounts
46
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Accruing
Name of the companies Content Book balance Bad debt provision Accruing reasons
proportion
Unrecovered predicted due to
Da Dong Co., Rent 801,380.16 801,380.16 100.00% long age account
Unrecovered predicted due to
Qinling Auto Co., Loans 695,848.00 695,848.00 100.00% long age account
Shanghai Auto Industrial Marketing Unrecovered predicted due to
Co., Loans 641,341.90 641,341.90 100.00% long age account
China Auto Trading Guangzhou Unrecovered predicted due to
Co., Loans 558,000.00 558,000.00 100.00% long age account
Guangdong Materials Group Auto Unrecovered predicted due to
Trading Co., Loans 395,400.00 395,400.00 100.00% long age account
Unrecovered predicted due to
Yunnan Lanjian Plant Loans 389,640.00 389,640.00 100.00% long age account
Guangdong Materials Trading Unrecovered predicted due to
Center Loans 387,000.00 387,000.00 100.00% long age account
Unrecovered predicted due to
Other units 13,333,715.41 13,333,715.41 100.00% long age account
Total 17,202,325.47 17,202,325.47 100.00%
(2) In this reporting period, there were no accounts with actual cancel after verification.
(3) There is no balance of accounts receivable due from shareholders holding 5%
(including 5%) voting shares at the end of period end.
(4) Top 5 receivables in owed accounts as at 30 June 2010：
Relationship with Proportion in
Name of the company Amount Age
the Company total amount%
Shenzhen Jinlu Industry and Trading Co., Ltd. External units 9,846,607.00 20.14% Over 5 years
GD Zhanjiang Three Stars Automobile
External units 4,060,329.44 8.31% Over 5 years
Holdings Co., Ltd.
General Products of Guangdong Holdings
External units 1,862,000.00 3.81% Over 5 years
Company
Jiang Ling Plant External units 1,191,059.98 2.44% Over 5 years
Yangjiang Automobile Trading Co., Ltd. External units 1,150,000.00 2.35% Over 5 years
Total 18,109,996.42 37.05%
(5) Accounts receivable of related parties in period-end balance could be seen from Note VI 7.
3. Accounts paid in advance
3.1 Classified according to age
47
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Amount at period-end Amount at period-beginning
Age
Amount Proportion Amount Proportion
Within 1 year 7,570,968.01 96.63% 10,003,519.14 97.96%
1-2 years 136,117.94 1.74% 173,671.75 1.70%
2-3 years 111,063.89 1.42% 35,180.79 0.34%
Over 3 years 16,160.79 0.21% - -
Total 7,834,310.63 100.00% 10,212,371.68 100.00%
(2) Condition of top 5 companies in account paid in advance
Proportion in total
Name of the company amount Age Reasons
amount%
Not receiving the
FAW TOYOTA Motor Sales Co., Ltd. 5,465,972.97 69.77% within 1 year
commodities
Not receiving the
Toyota Motor (China) Investment Co., Ltd. 1,074,633.61 13.72% within 1 year
commodities
handling no
Dongguan Guangtong Trading Co., 115,550.00 1.47% 1-2 years settlement
procedures
handling no
Zhejiang Qingtian Lishengda Machine Co., 72,500.00 0.93% over 3 years settlement
procedures
handling no
Shenzhen Guardian Technology Co., 42,968.64 0.55% within 1 year settlement
procedures
Total 6,771,625.22 86.44%
(3) There is no balance of accounts paid in advance due from shareholders holding 5%
(including 5%) voting shares at the end of the reporting period.
(4) There is no balance of accounts paid in advance for associates.
48
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
4. Other receivables
4.1 Classified according to category
Amount at period-end
Bool balance Bad debt provision Bool balance Bad debt provision
Category Accruing Accruing
Amount Proportion Amount proportio Amount Proportion Amount proportio
n n
Account receivable
with single minor
amount and
35,629,566.55 49.63% 35,629,566.55 100.00% 35,629,566.55 55.29% 35,629,566.55 100.00%
withdrawal bad
debe provision
singlely
Account receivable of
bad debt provision
30,425,408.04 42.38% 9,330,349.34 30.67% 23,073,514.58 35.80% 9,330,349.34 40.44%
withdrawal by
combination(Age)
Account receivable
with single minor
amount but
5,740,656.56 8.00% 5,740,656.56 100.00% 5,740,656.56 8.91% 5,740,656.56 100.00%
withdrawal bad
debt provision
singelly
Total 71,795,631.15 100.01% 50,700,572.45 70.62% 64,443,737.69 100.00% 50,700,572.45 78.67%
In combination, other accounts receivable whose bad debts provision was accrued by age analysis
Amount at period-end Amount at period-beginning
Age Bad debt Bad debt
Amount Proportion Amount Proportion
provision provision
within 1 year 8,627,895.76 28.36% - 2,859,411.37 12.40% -
1-2 years 2,066,315.65 6.79% 36,458.49 1,119,321.40 4.85% 55,966.07
2-3 years 1,365,346.96 4.49% 156,316.23 910,025.45 3.94% 182,005.09
Over 3 years 18,365,849.67 60.36% 9,137,574.62 18,184,756.36 78.81% 9,092,378.18
Total 30,425,408.04 100.00% 9,330,349.34 23,073,514.58 100.00% 9,330,349.34
Single item with major amount in period-end or the account receivable of bad debt provision by solely impairment
testing for single item with minor amounts
49
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Bad debt Accruing
Name of the companies Content Book balance Accruing reasons
provision proportion
Hua Shengchang Motor Unrecovered predicted due to long
Co., Ltd. Loans 463,912.46 463,912.46 100.00% age account
Renmin North Branch of Unrecovered predicted due to long
ABC Rent 247,219.98 247,219.98 100.00% age account
account
Account for house for Unrecovered predicted due to long
purchase from staff house 217,892.57 217,892.57 100.00% age account
Unrecovered predicted due to long
Liang Rongde 182,133.26 182,133.26 100.00% age account
Shensha Industrial & Unrecovered predicted due to long
Trading Co., Rent 134,835.20 134,835.20 100.00% age account
Chengdu Airplane Desine Unrecovered predicted due to long
Institution 130,000.00 130,000.00 100.00% age account
Unrecovered predicted due to long
Other units 4,364,663.09 4,364,663.09 100.00% age account
Total 5,740,656.56 5,740,656.56 100.00%
(2) In this reporting period, there were no other accounts with actual cancel after verification.
(3) There is no balance of other accounts receivable due from shareholders holding
5% (including 5%) voting shares at the period-end.
(4) The other top 5 accounts receivable:
Proportion in total
Name of the company natures or conte nt Amount Age
amount %
Zhongqi South Corporation Current account 9,832,956.37 13.70% Over 3years
South Industry&T rading Industry Co., ltd. Current account 7,359,060.75 10.25% Over 3years
Shenzhen T ellus Motor Service Chain Co., Borrowings and investment
7,187,829.60 10.01% Over 4years
Ltd. income
Shenzhen Zhonghao Corporation Borrowing guarantee duty 5,000,000.00 6.96% Over 3years
Shenzhen Kaifeng Special Auto Industry
Borrowings 4,413,728.50 6.15% Over 3years
Co.,
Total 33,793,575.22 47.07%
(5) Balance of other accounts receivable of the related party’s account at period-end see more
details in 7 under Note 6.
Inventory
50
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Amount at period-end Amount at period-beginning
Items
Depreciation Depreciation
Amount Net amount Amount Net amount
provision provision
Raw material 8,161,986.02 5,161,245.85 3,000,740.17 7,803,134.67 5,161,245.85 2,641,888.82
Low value consumption
19,594.16 - 19,594.16 25,189.68 - 25,189.68
goods
Inventory goods 30,268,974.14 13,040,368.05 17,228,606.09 32,357,337.82 13,040,368.05 19,316,969.77
Products in progress 7,093,168.70 4,031,262.45 3,061,906.25 7,093,168.70 4,031,262.45 3,061,906.25
Total 45,543,723.02 22,232,876.35 23,310,846.67 47,278,830.87 22,232,876.35 25,045,954.52
6. Financial assets available for sale
Item Amount at period-end Amount at period-beginning
Equity instrument available for sale 1,507,390.50 1,483,077.75
Inc: Shares of China Merchant Bank 1,507,390.50 1,483,077.75
Total 1,507,390.50 1,483,077.75
7. Held-to-maturity investment
Item Amount at period-end Amount at period-beginning
Treasury bonds 121,300.00 121,300.00
Total 121,300.00 121,300.00
51
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
8.Long-term equity investment
Initial A mo u n t a t C h a n g e of P r opo rt io n of P r opo r tio n o f P r o p o r t io n
Amount at C a sh b o n u s
I n v e s t e d c om p a n y n a m e i n v e s t m en t pe r i o d - i n c r e a s e/ d e c s ha re s h eld v o ti ng s r ig hts for
period-end this term
cost b eg i n n i n g rease (% ) h e ld (% ) i m p a i r m en t
I . J o in t v e n tu r e s c a lc u l a t e d b a s e d o n
e q u i ty m e t h o d
S he n z he n T e ll u s G EM I n v es t m e nt C o . ,
2 8 ,3 52 ,4 8 0.0 0 2 6,2 9 0 ,77 3 .5 2 -4 9 6 ,3 50 .0 0 25 ,7 9 4,4 2 3 .52 5 0 .0 0 5 0 .00 - -
L td .
S he n z he n T el i x i ng I n ve s t m en t Co . , Lt d . 1 3 ,6 00 ,0 0 0.0 0 8,4 0 8 ,57 2 .6 5 -3 ,2 65 .6 0 8 ,4 0 5,3 0 7 .05 5 0 .0 0 5 0 .00 - -
S u b to t a l 4 1 ,9 52 ,4 8 0.0 0 3 4,6 9 9 ,34 6 .1 7 -4 9 9 ,6 15 .6 0 34 ,1 9 9,7 3 0 .57 - -
I I . A ff i l i a t e d e n t e r pr i s e s c a l c u l at e d
based on equity method
S he n z he n Xi n g l on g M ec h a n ic a l Mould
2 ,4 00 ,0 0 0.0 0 6,4 4 3 ,03 2 .3 2 2 4 ,0 00 .0 0 6 ,4 6 7,0 3 2 .32 3 0 .0 0 3 0 .00 - -
C o. , Lt d .
S he n z he n T el l u s A u t o mo b i l e S e rv i c e s
8 00 ,0 0 0.0 0 - - - 4 0 .0 0 4 0 .00 - -
D ev e l op m e n t C o . , L t d .
S he n z he n Re n f u T e l lu s Au t o m ob i l e s 1 0 ,5 00 ,0 0 0.0 0 6 1,2 5 4 ,75 2 .6 5 -9 4 9 ,9 00 .0 0 60 ,3 0 4,8 5 2 .65 3 5 .0 0 3 5 .00 - 5,2 50,000 .00
S er v i ce s C o. , L td .
S he n z he n A ut o m o bi l e In d u s tr y Im p o r t 4 ,7 37 ,5 0 0.0 0 8,1 9 2 ,85 0 .7 0 -1 7 0 ,4 44 .0 9 8 ,0 2 2,4 0 6 .61 3 5 .7 5 3 5 .75 - -
a nd E xp o r t C o . , L t d .
S he n z he n D on g f e ng A u to m o b il e Co . , Lt d . 1 4 ,5 27 ,0 4 4.8 5 1 6,2 6 1 ,58 0 .6 5 3 4 9 ,2 19 .5 2 16 ,6 1 0,8 0 0 .17 2 5 .0 0 2 5 .00 - -
S he n z he n X in y o n gt o n g Test T e c h no l o g y
4 96 ,0 0 0.0 0 5 5 0 ,38 5 .6 8 - 5 5 0,3 8 5 .68 3 1 .0 0 3 1 .00 - -
C o. , Lt d .
S he n z he n X in y o n gt o n g O i l Pu m p 1 55 ,0 0 0.0 0 1 4 8 ,12 7 .9 9 - 1 4 8,1 2 7 .99 3 1 .0 0 3 1 .00 - -
S he n z he n X i ny o n gt o n g A u t o mo b i l e
3 00 ,0 0 0.0 0 2 1 7 ,07 0 .8 4 - 2 1 7,0 7 0 .84 3 1 .0 0 3 1 .00 - -
S er v i ce C o ., L t d.
S he n z he n X in y o ng t o n g D o ng x i a o -
1 75 ,0 0 0.0 0 1 7 5 ,28 7 .8 1 - 1 7 5,2 8 7 .81 3 1 .0 0 3 1 .00 -
A ut o m ob i l e S e r v ic e C o. , L td .
S he n z he n X i n y on g t o ng X in d a Test
4 00 ,0 0 0.0 0 3 0 1 ,63 9 .9 7 - 3 0 1,6 3 9 .97 4 0 .0 0 4 0 .00 - -
E qu i p me n t Co . , Lt d .
S he n z he n X in y o n gt o n g C o n s ul t i n g Co., 48 ,0 0 0.0 0 4 8 ,24 1 .5 7 - 4 8,2 4 1 .57 3 0 .0 0 3 0 .00 - -
L td .
S he n z he n Te l l u s X i ny o n g to n g Auto 5 04 ,0 0 0.0 0 - - - 1 8 .0 0 1 8 .00 - -
S er v i ce C o .,
S u b to t a l 3 5 ,0 42 ,5 4 4.8 5 9 3,5 9 2 ,97 0 .1 8 -7 4 7 ,1 24 .5 7 92 ,8 4 5,8 4 5 .61 - 5 ,25 0 ,0 00 .0 0
52
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
P ro p o r ti o n o f
I n i tia l in v e s tm e n t A m o u n t a t p er io d - A m o u n t a t p e rio d - P r o p o r ti o n o f D ep r ec ia ti o n C a s h b o n u s th i s
I n v e s te d c o m p a n y n a m e % ) v o t in g rig h t s h eld
c ost be g in nin g e nd s h a r e s h e l d (% ) p r o v i si o n te rm
(% )
I I I. O th e r e q u ity i n v e s t m e n t c a l c u la t e d b a s ed on
co s t
C h i n a P u fa M a c h i n e I n d u s t r y G e n e r a l C o m p a n y 1 0 ,1 7 6 , 6 1 7 . 2 0 1 0 , 1 7 6 ,6 1 7 .2 0 - 1 0 ,1 7 6 ,6 17 .2 0 5 .3 0 5.30 - -
H u n a n C h a n g y a n g I n d u s t r y C o ., L td .* 1 6 ,9 0 0 , 0 0 0 . 0 0 1 , 8 1 0 ,5 4 0 .7 0 - 1 ,8 1 0 ,5 40 .7 0 3 6 .5 5 36.55 1 ,81 0 ,5 4 0 .7 0 -
S h e n z h e n H a n l i H i g h -t e c h P o t t e r y C o . , L t d .* 1 3 ,4 6 6 , 0 0 0 . 0 0 1 , 9 5 6 ,0 0 0 .0 0 - 1 ,9 5 6 ,0 00 .0 0 8 0 .0 0 80.00 1 ,95 6 ,0 0 0 .0 0 -
S h e n z h en J i ec h e n g E le c t ro n ic s C o . , L t d . * 1 3 ,1 5 0 , 0 0 0 . 0 0 3 , 2 2 5 ,0 0 0 .0 0 - 3 ,2 2 5 ,0 00 .0 0 4 5 .0 0 45.00 3 ,22 5 ,0 0 0 .0 0 -
S h e n z h e n J i n g w e i In d u st r y C o . , L t d . 4 ,0 0 0 , 0 0 0 . 0 0 4 , 0 0 0 ,0 0 0 .0 0 - 4 ,0 0 0 ,0 00 .0 0 1 2 .5 0 12.50 4 ,00 0 ,0 0 0 .0 0 -
S h e n z h e n ( M o s c o w ) C o ., L td . 8 25,000.00 8 2 5 ,0 0 0 .0 0 - 825,000.00 7 .0 0 7.00 82 5 ,0 0 0 .0 0 -
W u h a n W e i te H o t e l 6 40,000.00 6 4 0 ,0 0 0 .0 0 - 640,000.00 64 0 ,0 0 0 .0 0 -
S h e n z h en X ia n d ao C h em i s try N e w M at e ri al C o . , L t d .
7 ,2 5 6 , 4 0 1 . 3 8 4 , 7 5 1 ,6 2 1 .6 2 - 4 ,7 5 1 ,6 21 .6 2 4 0 .0 0 40.00 4 ,75 1 ,6 2 1 .6 2 -
*1
S h e n z h e n P e t ro c h e m i c a l ( G r o u p ) C o ., L t d . 7 00,000.00 7 0 0 ,0 0 0 .0 0 - 700,000.00 10万 股 10万 股 70 0 ,0 0 0 .0 0 -
S o u t h ern A u t o m o b i l e M a i n te n a n c e C e n t e r* 1 6 ,7 0 0 , 0 0 0 . 0 0 6 , 7 0 0 ,0 0 0 .0 0 - 6 ,7 0 0 ,0 00 .0 0 1 0 0 .0 0 100.00 6 ,70 0 ,0 0 0 .0 0 -
C h in a A u to m o b ile In d u s t r y S h en z h en T ra d e
4 00,000.00 4 0 0 ,0 0 0 .0 0 - 400,000.00 4 0 .0 0 40.00 40 0 ,0 0 0 .0 0 -
C o r p o ra t io n * 1
S h e n z h e n G e n e r a l S t a n d a r d F i t t in g s C o . , L t d * 1 5 00,000.00 5 0 0 ,0 0 0 .0 0 - 500,000.00 2 5 .0 0 25.00 50 0 ,0 0 0 .0 0 -
S h e n z h en H u o j u S p ar k P l u g In d u s try C o / . * 1 17,849.20 1 7 ,8 4 9 .2 0 - 17,849.20 4 9 .0 0 49.00 1 7 ,8 4 9 .2 0 -
C h i n a A u t o m o b i l e S o u t h e r n S a le s C o r p o r a t io n * 1 2 ,2 5 0 , 0 0 0 . 0 0 2 , 2 5 0 ,0 0 0 .0 0 - 2 ,2 5 0 ,0 00 .0 0 4 9 .0 0 49.00 2 ,25 0 ,0 0 0 .0 0 -
E l e c tr i c a l B i c yc l e P r o j e c t 6 00,000.00 6 0 0 ,0 0 0 .0 0 - 600,000.00 1 1 .1 0 11.10 60 0 ,0 0 0 .0 0 -
S h e n zh en S o u th A u to m o b ile T r ad e In v es tm en t C o . ,
1 1 ,7 1 0 , 0 0 0 . 0 0 1 1 , 7 1 0 ,0 0 0 .0 0 - 1 1 ,7 1 0 ,0 00 .0 0 1 4 .7 3 14.73 - -
L td .
S he n z he n G o l d C r a n e St a n d ar d F i tt i n g s
4 53 ,4 4 0.0 0 4 5 3 ,44 0 .0 0 - 4 5 3,4 4 0 .00 1 5 .0 0 1 5 .00 4 5 3 , 4 4 0 .0 0 -
M ou l d C o . , L t d .
C hi n a A u t o mo b i l e T r a in i n g C e n te r 6 00 ,0 0 0.0 0 6 0 0 ,00 0 .0 0 - 6 0 0,0 0 0 .00 6 .2 5 6 .25 6 0 0 , 0 0 0 .0 0 -
S h e n z h e n B a i l i y u a n E l e c t ri c a l S o u r c e C o . , L t d . * 1 1 ,3 20 ,0 0 0.0 0 1,3 2 0 ,00 0 .0 0 - 1 ,3 2 0,0 0 0 .00 2 5 .0 0 2 5 .00 1 , 3 2 0 , 0 0 0 .0 0 -
M i n i-D r a g o n (Z e n g W en g a n g ) 1 62 ,0 0 0.0 0 1 6 2 ,00 0 .0 0 - 1 6 2,0 0 0 .00 6 .2 5 6 .25 1 6 2 , 0 0 0 .0 0 -
S h e n z h en Y i m i n A u t o m o b i le T ra d e C o m p an y 2 00 ,0 0 1.1 0 2 0 0 ,00 1 .1 0 - 2 0 0,0 0 1 .10 2 0 0 , 0 0 1 .1 0 -
S h e n z h e n B a s i c T r a n s p o r t a t i o n M a c h in e r y C o ., L t d . 3 02 ,3 6 8.5 7 3 0 2 ,36 8 .5 7 - 3 0 2,3 6 8 .57 1 5 .0 0 1 5 .00 - -
H o n g K o n g R is h e n In t e r n a t i o n a l C o . , L t d . 1 45 ,8 0 0.0 0 1 4 5 ,80 0 .0 0 - 1 4 5,8 0 0 .00 7 .5 0 7 .50 1 4 5 , 8 0 0 .0 0 -
S u b to t a l 6 2 ,4 75 ,4 7 7.4 5 5 3,4 4 6 ,23 8 .3 9 - 53 ,4 4 6,2 3 8 .39 3 1 , 2 5 7 , 2 5 2 .6 2 -
T o ta l 13 9 ,4 70 ,5 0 2.3 0 1 8 1,7 3 8 ,55 4 .7 4 - 1 ,2 4 6 , 7 4 0 . 1 7 1 80 ,4 9 1,8 1 4 .57 3 1 , 2 5 7 , 2 5 2 .6 2 5 ,25 0 ,0 00 .0 0
1. This series companies had stopped operation. The Company hadn’t any significant impact on them and accrued total amount provision for bad debts.
53
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
9. Investment real estate
9.1 investment real estate measured by cost model
Amount at period-
Item increaed in this term decrease in this term Amount at period-end
beginnning
Original value
House&building 181,002,443.71 - - 181,002,443.71
Total 181,002,443.71 - - 181,002,443.71
Accumulative depreciation
House&building 67,341,960.30 2,619,607.50 - 69,961,567.80
Total 67,341,960.30 2,619,607.50 - 69,961,567.80
Book value
House&building 113,660,483.41 111,040,875.91
Total 113,660,483.41 111,040,875.91
9.2 Mortgage investment real estate at period-end
Items been mortgaged Original value at period-end Net value at period-end
F/1 to F/4 and F/27 to F/29 of Tellus
23,961,792.74
building 16,910,394.06
421 factory building in Bagualing 33,917,679.95
24,438,940.73
Dongfeng building 9,640,803.22
6,972,670.75
Machine Processing Workshop 9,458,559.68
3,887,784.71
Riveting Workshop 4,455,052.22
1,186,966.81
5#,6# and 7# Block in Buxin 7,379,753.13
3,690,410.69
F/6to F/7 of 10#Block in Buxin 3,231,493.46
1,665,758.43
3#Factory building in Buxin 67,503,936.40
43,532,326.73
21# office building,underground to 2/f
1,815,996.00
norther forward 569,033.34
5# to 7# Factory building in Buxin 6,377,742.29
2,456,432.09
Total 167,742,809.09 105,310,718.34
54
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
10. Fixed assets
Original value
House & buildings 273,866,730.28 - - 273,866,730.28
Machinary equipment 19,414,912.00 442,136.75 - 19,857,048.75
Transportation equipment 7,703,613.40 - - 7,703,613.40
Electric equipment 8,631,927.84 145,306.27 - 8,777,234.11
Other equipment 8,280,694.21 31,140.96 - 8,311,835.17
Fitting fee for owned buildings
3,008,152.86 - - 3,008,152.86
Total 320,906,030.59 618,583.98 - 321,524,614.57
Accumulative depreciation
House & buildings 106,990,738.80 4,271,072.36 - 111,261,811.16
Machinary equipment 15,662,012.88 188,328.78 - 15,850,341.66
Transportation equipment 5,458,055.99 322,910.10 - 5,780,966.09
Electric equipment 6,373,784.47 310,042.26 - 6,683,826.73
Other equipment 6,890,865.73 137,225.30 - 7,028,091.03
Fitting fee for owned buildings
1,902,237.85 156,287.60 - 2,058,525.45
Total 143,277,695.72 5,385,866.40 - 148,663,562.12
Less: provision of impairment
House & buildings 3,555,385.70 - - 3,555,385.70
Machinary equipment 650,147.31 - - 650,147.31
Other equipment 22,029.00 - 22,029.00
Total 4,227,562.01 - - 4,227,562.01
Book value
House & buildings 163,320,605.78 159,049,533.42
Machinary equipment 3,102,751.81 3,356,559.78
Transportation equipment 2,245,557.41 1,922,647.31
Electric equipment 2,258,143.37 2,093,407.38
Other equipment 1,367,799.48 1,261,715.14
Fitting fee for owned buildings 1,105,915.01 949,627.41
Total 173,400,772.86 168,633,490.44
10.1 The fixed assets with original book value amount of RMB 25900,000 and net value of RMB
17570,000 have been mortgaged to bank.
10.2 Ended at 30 June 2011, the Company had not applied or obtained the Property Certificates of
the house and buildings with book values of RMB Yuan 194,540,000 and net values of RMB Yuan
117470,000. The time for obtained the Property Certificate un-predicted due to the historical
retained reasons.
10.3 Ended as 30 June 2011, the Company has no the significant fixed assets fully useless, no the
significant fixed assets held prepared to sold and no the fixed assts rented by financing tenancy.
55
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
11. Construction in process
Amount at period-end Amount at period-beginning
Item
Depreciation Net amount at Depreciation Net amount at
Book balance Book balance
provison period-end provison period-end
Jewerly Industry Zone 922,279.81 - 922,279.81 - - -
Total 922,279.81 - 922,279.81 - - -
12. Intangible assets
Amount at
Way of Increase in Decrease in Amount at
Category period-
obtaining this term this term period-end
beginning
Original value
Trademark right purchase 75,000.00 - - 75,000.00
Software purchase 250,000.00 - - 250,000.00
Total of original value 325,000.00 - 325,000.00
Accumulative amortizing
Trademark right 19,244.96 3,750.00 - 22,994.96
Software 84,166.58 24,999.96 - 109,166.54
Total of accumulative amortizing 103,411.54 28,749.96 - 132,161.50
Less:Impairment provision of intangible
- -
assets
Book value of intangible assets 221,588.46 192,838.50
13. Long-term deferred expenses
Item Amount at period-beginning in this term Amortizing Written back mount at period-end
Fitting expenses 139,407.62 - 21,552.96 - 117,854.66
Hotel facilities 371,919.34 - 92,979.84 - 278,939.50
Follwing-up restructure fee 424,092.04 169,687.00 90,460.15 - 503,318.89
Promises fee of 3-year loan limited of SPD
307,089.56 - 109,044.12 - 198,045.44
Bank
Other 16,027.65 - 16,027.65 - -
Total 1,258,536.21 169,687.00 330,064.72 1,098,158.49
14. Deferred income tax assets and deferred income tax liabilities
The deferred income tax assets and deferred income tax liabilities are not listed the net amount
after offsetting.
14.1 recognized deferred income tax assets and deferred income tax liabilities
56
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Items Amount of period-end Amount of period-begin
Deferred income tax assets:
Provision of assets impairment 26,491,542.53 26,491,542.53
Amortization of equity investment 3,562,593.44 3,562,593.44
Un-paid remuneration 431,253.12 431,253.12
Operation losses which can be made up in deferrable way 212,888.75 212,888.75
Un-realized transaction profit with affiliated companies 1,274,156.72 1,274,156.72
Subtotal 31,972,434.56 31,972,434.56
Deferred income tax liabilities:
Temporary difference between depreciation and amortization 2,057,152.44 2,057,152.44
Change of fair value of financial assets available for sale that have -52,125.74 -52,125.74
been accounted into capital reserves
Subtotal 2,005,026.70 2,005,026.70
14.2 un-recognized deferred income tax assets
Items Amount of period-end Amount of period-begin
offset-able differences 9,624,049.45 9,624,049.45
offset-able losses 12,373,828.15 12,373,828.15
Total 21,997,877.60 21,997,877.60
Due to the uncertain of sufficient amount of taxes payables obtaining in future, the partial
offset-able differences and offset-able losses are not recognized as deferred income tax assets.
（3）Particulars about taxable difference and deductible difference
items Amount
Deductible temporary difference
Bad debts 62,891,139.63
Provision for inventory devaluation 13,181,955.05
Provision for devaluation of long-term equity investment 30,156,978.45
Provision for fixed assets devaluation 4,151,354.08
Amortization of equity investment difference 14,844,139.31
Un-paid remuneration 1,796,888.00
Operation losses which can be made up in deferrable way 887,036.44
Un-realized transaction profit with affiliated companies 5,308,986.33
Total 133,218,477.29
57
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
items Amount
Taxable temporary difference
Temporary difference between depreciation and amortization 9,809,858.26
Change of fair value of financial asset available for sale included 341,399.21
in capital reserve
total 10,151,257.47
15. Asset Impairment Provision
decrease in this term
Amount at period- Increase in this Amount at period-
Item Written Transferre
beginning term end
back d
Bad debt provision 92,763,942.28 - - - 92,763,942.28
Inventory impairment provision 22,232,876.35 - - - 22,232,876.35
Long-term equity investment impairment
provision 31,257,252.62 - - - 31,257,252.62
Fixed assets impairment provision 4,227,562.01 - - - 4,227,562.01
Total 150,481,633.26 - - - 150,481,633.26
16. Short-term loans
Amount at period-
Tyle of loans Amount at period-end
beginning
Pleged loan 6,500,000.00 11,283,960.42
Credit loan 28,340,900.42 31,079,745.00
Total 34,840,900.42 42,363,705.42
There are no overdue loans in this report period.
17. Accounts payable
Items Amount at period-end Amount at period-beginning
Accounts payable 27,470,361.89 30,767,809.82
17.1 No accounts payable to shareholders with 5% or above voting shares of the Company.
17.2 Balance of accounts payable from associate are shown in No. 7 in Note 6.
18. Accounts received in advance
58
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Item Amount at period-end Amount at period-beginning
Accounts received in advance 2,137,661.03 1,838,938.58
18.1 At balance of period-end, no account received in advance from shareholders with 5%
(5%included) voting shares of the Company.
18.2 No account received in advance from related companies at period-end balance.
19. Wages payable
Amount at period- Amount at period-
Item Increae in this term Decrease in this term
beginning end
Wage, bonus, allowance and subsity 8,309,169.50 18,899,024.40 20,028,545.19 7,179,648.71
Emplyees' welfare 91,690.00 637,729.68 719,419.68 10,000.00
Social security 1,361,567.16 2,888,119.96 3,010,399.04 1,239,288.08
Housing public reserve 4,359,770.00 815,042.71 304,734.24 4,870,078.47
Trade union fee and education fee 394,981.95 368,353.59 400,327.78 363,007.76
Compensation for releasing of labor service
- 118,872.00 118,872.00 -
contract
Others 267,240.00 305,803.16 306,700.76 266,342.40
Total 14,784,418.61 24,032,945.50 24,888,998.69 13,928,365.42
20.Tax payable
Taxation type Amount at period-end Amount at period-beginning
VAT -696,638.67 -530,012.71
Business tax 611,636.94 640,226.44
City constructio tax 51,593.97 84,091.75
Enterprise income tax -172,658.82 735,617.03
Property tax 995,858.45 995,859.11
Land VAT 5,362,442.05 5,362,442.05
Individual income tax 68,095.62 73,467.65
Education surtax 71,549.11 65,569.26
Other 31,094.24 37,614.11
Total 6,322,972.89 7,464,874.69
21. Other payables
Item Amount at period-end Amount at period-beginning
Other payables 107,968,492.04 107,704,456.87
59
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
21.1 Other account payable to shareholders with 5% or above voting shares of the Company is
shown in No. 7 in Note 6.
21.2 Other account payables of related parties found in No.7 under Note 6.
22. Non-current liabilities due within 1 year
(1) Category
Amount at period-
Item Amount at period-end
beginning
Long-term loans due within 1 year 16,440,000.00 8,640,000.00
Total 16,440,000.00 8,640,000.00
（2） Long-term loans due within 1 year
Amount at period-
Name of the company Rate Type of loan Time
end
SPD Bank Fuhua Branch 4,960,000.00 5.40% Pledge 2009.08.10-2012.05.10
SPD Bank Fuhua Branch 2,800,000.00 5.40% Pledge 2009.07.31-2012.04.20
SPD Bank Fuhua Branch 8,200,000.00 6.40% Pledge 2009.05.31-2012.05.31
SPD Bank Fuhua Branch 480,000.00 6.1425% Pledge 2010.02.05-2012.05.05
Total 16,440,000.00
23.Long-term loans
(1) Category
Item Amount at period-end Amount at period-beginning
Pledge loan 80,580,000.00 92,700,000.00
Total 80,580,000.00 92,700,000.00
（2）major details of long-term loans
Balance at period-
Loan unit Rate Type of loan Term of loans
end
SPD Bank Fuhua Branch 48,360,000.00 5.40% Pledge 2009.08.10-2012.08.10
SPD Bank Fuhua Branch 27,300,000.00 5.40% Pledge 2009.07.31-2012.07.31
SPD Bank Fuhua Branch 4,920,000.00 6.1425% Pledge 2010.02.05-2013.02.05
Total 80,580,000.00
24.Long-term payables
60
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Item Amount at period-end Amount at period-beginning
Technical innovation loan 11,311.96 11,311.96
Employee housing deposit 2,588,848.40 2,588,848.40
Industry committee of SZ 1,320,000.00 1,320,000.00
Total 3,920,160.36 3,920,160.36
25.Projected liabilities
Amount at period- Increased in this Decreased in this Amount at period-
Categories
beginning period period end
External guarantee* 87,568,728.57 - - 87,568,728.57
Total 87,568,728.57 - - 87,568,728.57
*See more details of External guarantee in No. 1.3 in Note 7.
26. Share capital
Amount at period- Increased in this Decreased in this Amount at period-
Item
beginning period period end
I.Negotiable shares with selling restriction
condition
1.State-owned shares - - - -
2.Statae-owned legal person shares 14,587,056.00 - - 14,587,056.00
3.Domestic legal person shares - - - -
4.Overseas legal person shares - - - -
5.Domestic nature person shares - - - -
6.Others - - - -
Total of restrict shares 14,587,056.00 - - 14,587,056.00
II.Unconditional negoriable shares
1.RMB common shares domestically listed 179,294,544.00 - - 179,294,544.00
2.Foreign shares domesticaly listed 26,400,000.00 - - 26,400,000.00
3.Foreign shares listed overseas - - - --
4.other - - - --
Total of unresticted shars 205,694,544.00 - - 205,694,544.00
III. Total shares 220,281,600.00 - - 220,281,600.00
27.Capital reserve
61
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Amount at
Increased in Decreased in Amount at
Items period-
this period this period period-end
beginning
Share capital premium 3,024,773.35 - - 3,024,773.35
Other capital reserves 5,611,056.50 24,312.75 - 5,635,369.25
Incl: Variation of the fair values of financial assets
963,224.34 24,312.75 - 987,537.09
available for sale
Total 8,635,829.85 24,312.75 - 8,660,142.60
28.Surplus reserve
Amount at period- Increased in this Decreased in this Amount at period-
Items
beginning period period end
Statutory suplus reserves 2,952,586.32 - - 2,952,586.32
Total 2,952,586.32 - - 2,952,586.32
29.Retained Profit
Items Semi-annual of 2011 Year of 2010
Net profit attibutable to owner of parent 502,339.55 3,584,445.78
company
Plus:Retained profit at year-begin -56,595,413.73 -60,179,859.51
Less:Profit distribution - -
Incl: Distilled statutory surplus reserves - -
Retained profit at year-end -56,093,074.18 -56,595,413.73
30.Operating income and operating cost
Operating income Operating cost Operating profit
Categories
Jan.-Jun.2011 Jan.-Jun.2010 Jan.-Jun.2011 Jan.-Jun.2010 Jan.-Jun.2011 Jan.-Jun.2010
Primary 176,552,777.10 196,981,374.00 143,346,837.46 163,465,870.00 33,205,939.64 33,515,504.00
business
Other 1,494,388.28 1,341,814.63 856,424.56 793,803.67 637,963.72 548,010.96
business
Total 178,047,165.38 198,323,188.63 144,203,262.02 164,259,673.67 33,843,903.36 34,063,514.96
(1) Primary business classified according to industries:
62
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Primary business income Primary business cost Primary business profit
Industries
Jan.-Jun.2011 Jan.-Jun.2010 Jan.-Jun.2011 Jan.-Jun.2010 Jan.-Jun.2011 Jan.-Jun.2010
Automobile 106,573,060.42 124,054,951.00 102,071,280.69 118,430,197.00 4,501,779.73 5,624,754.00
selling
Automobile
inspection,
25,100,471.03 30,837,380.00 20,137,598.95 24,603,382.00 4,962,872.08 6,233,998.00
repairing and
parts selling
Tenancy 44,879,245.65 42,089,043.00 21,137,957.82 20,432,291.00 23,741,287.83 21,656,752.00
sercive
Toatl 176,552,777.10 196,981,374.00 143,346,837.46 163,465,870.00 33,205,939.64 33,515,504.00
(2) Selling condition of top 5 clients:
Jan.-Jun. 2011 Jan.-Jun. 2010
Items
Propertion of Propertion of
Turnover Turnover
the total amount% the total amount%
Amount 14,364,957.62 8.07% 13,912,364.52 7.01%
31.Operational tax and surcharges
Item Jan.-Jun.2011 Jan.-Jun.2010
Operation tax 1,886,417.16 1,776,498.41
City maintaining&construction tax 253,450.52 36,456.65
Education surtax 133,265.13 58,746.04
Total 2,273,132.81 1,871,701.10
32.Financial expenses
Categories Jan.-Jun.2011 Jan.-Jun.2010
Interest expenses 3,938,584.27 4,475,776.14
Less: Interest income 196,008.08 223,954.69
Exchange loss 3,487.29 -52,102.49
Less: Exchange gains - -
Other 574,838.16 241,902.90
Total 4,320,901.64 4,441,621.86
63
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
34. Investment income
34.1 Particulars of investment income
Items Jan.-Jun.2011 Jan.-Jun.2010
Income from long-term equity investment adopt cost method 33,574.75 -
Income from long-term equity investment adopt equity method 3,904,259.83 4,878,630.21
Investment income from disposing of long-term
- -
equity investment
Investment income from disposing of
- -
transactional financial assets
Total 3,937,834.58 4,878,630.21
34.2 Income from long-term equity investment on equity method
Reasons for
Name of the companies Jan.-Jun.2011 Jan.-Jun.2010
changes(increase/decreased)
Shenzhen Renfu Tellus Auto
Service Co., Ltd. 4,300,100.00 4,420,500.00 Profit decreased
Shenzhen Tellus Gem Investment
Co., Ltd. -496,350.00 -318,500.01 Losses decreased
Shenzhen Dongfeng Auto Co., Ltd. 349,219.52 1,070,000.00 Profit decreased
Shenzhen Tellus Auto Service
Chain Co., Ltd. -84,000.00 -129,200.00 Losses decreased
Shenzhen Xinglong Machinery Mould
Co., Ltd. 24,000.00 17,700.00
Shenzhen Tellus New Yongtong
Automobile Service Co., Ltd -15,000.00 -
Shenzhen Telixing Investment Co.,
Ltd. -3,265.60 21,905.22
Shenzhen Automobile Industrial
Import and Export Company -170,444.09 -203,775.00 Losses decreased
Total
3,904,259.83 4,878,630.21
35. Non-operating income
Categories Jan.-Jun.2011 Jan.-Jun.2010
gains from disposal of non-current
- 165,950.63
assets
Incl:gains from disposal of fixed
- 165,950.63
assets
Penalty 1,532.94 2,381.81
Other 19,861.90 17,625.20
Total 21,394.84 185,957.64
64
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
36. Non-operating expenditures
Categories Jan.-Jun. 2011 Jan.-Jun. 2010
loss from disposal of non-current - 3,053.74
assets
Incl:loss from disposal of fixed - 3,053.74
assets
Penalty 10,480.00 3,069.93
Donation - 10,000.00
Other 148,995.00 5,040.00
Total 159,475.00 21,163.67
37. Income tax
Item Jan.-Jun.2011 Jan.-Jun.2010
Income tax expenditure in this period 207,019.50 451,955.63
Total 207,019.50 451,955.63
38. Earnings per share
The calculation of earnings per share is as follows:
Item Jan.-Jun.2011 Jan.-Jun.2010
Net profit attibutable to owner of the 502,339.55 1,098,680.67
Company
Weighted average of issued common 220,281,600 220,281,600
shares
Basic earnings per share(RMB Yuan per 0.002 0.005
share)
Diluted earnings per share(RMB Yuan per 0.002 0.005
share)
39. Other integrated income
Amount of the
Amount of this
Item same period of
period
last year
I. Gains/losses from financial assets available for sale 24,312.75 -460,971.20
Less: Income tax effect of financial assets available for sale -- --
Net amount that accounted into other integrated income previously transfer to -- --
current gains/losses
Subtotal 24,312.75 -460,971.20
II. Share of other integrated income under invested companies calculated -- -
65
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
based on equity
Less: Income tax effect of share of other integrated income under -- --
invested companies calculated based on equity
Net amount that accounted into other integrated income previously transfer to -- --
current gains/losses
Subtotal -- --
III. Other -- --
Less: Income tax effect of others accounted into other integrated income -- --
Net amount of others accounted into other integrated income previously -- --
transfer to current gains/losses
Subtotal -- --
Total 24,312.75 -460,971.20
40. Cash flow statement
40.1Other cash received concerning operating activities
Item Jan.-Jun.2011 Jan.-Jun.2010
Current account of affiliated units 29,276,094.96 31,434,143.47
Deposit and margin received 1,836,431.56 2,301,549.36
Interest income 196,008.08 223,954.69
Penalty and compensation income 1,532.94 2,381.81
Tenancy income 4,431,562.58 4,365,221.49
Total 35,741,630.12 38,327,250.82
40.2 Cash paid to others concerning operating activities
Item Jan.-Jun.2011 Jan.-Jun.2010
Current account of affiliated units 6,728,331.21 12,610,270.12
Cash paid for operation expenses 6,262,097.63 9,559,387.79
Cash paid for administration expenses 15,122,227.41 18,993,275.62
Deposit and margin 1,836,452.74 2,191,650.67
Total 29,949,108.99 43,354,584.20
66
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
41. Supplementary information of cash flow statement
41.1 Net profit adjusted to cash flow of operation
Items Jan.-Jun.2011 Jan.-Jun.2010
Net profit 371,137.09 1,710,962.88
Plus:Assets impairment provision - -
Fixed assets, productive biological assets,
8,005,473.90 8,170,483.11
investment real estate depreciation
Amortizing of intangible assets 28,749.96 23,749.98
Amortizing of long-term expenses 330,064.72 321,097.79
Loss from disposal of fixed assets, intangible
assets and other long-term assets(income listed - 165,950.63
with"-")
Loss of disposing fixed assets(income listed with"-
- -
")
Loss from change of fair value(income listed with
- -
"-")
Financial expenses(income listed with "-") 4,320,901.64 4,441,621.86
Investment loss(income listed with "-") -3,937,834.58 -4,878,630.21
Decrease of deferred income tax assets(increase
- -
listed with "-")
Increase of deferred income tax
- -
liabilities(decrease listed with"-")
Decrease of inventory(increase listed with "-") -1,735,107.85 -17,333,291.30
Decrease of operating receibale accounts(increase
2,960,231.64 7,669,374.19
listed with"-")
Increase of operating payable accounts(decrease -3,876,592.11 -14,004,129.63
listed with "-")
Other 309,649.63 -6,020,337.03
Net value of cash flow in operation 6,776,674.04 -19,733,147.73
41.2 Cash and cash equivalents
Item 2011-6-30 2011-1-1
I. Cash 54,594,020.80 64,122,979.84
Incl: Cash on hand 256,159.47 230,415.60
Bank deposit payable at any time 54,279,731.12 63,868,067.68
Other monetary funds payable at 58,130.21 24,496.56
any time
II. Cash equivalent - -
Inclu:Bond investment due within 3 - -
months
III.Cash at period-end and balance of 54,594,020.80 64,122,979.84
cash equivalent
Note6. Associated party and associated transaction
67
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
1. Recognition of associates
The associate parties refer to those that one party can control, jointly control or have significant
influence on the other party; and those that two parties or more are under control, jointly control, or
significant influence by the other party.
2. Shareholders of the Company with controlling relationship(or actual controller)
Share
Register Business Register Voting Organization
Name of the Parent Company Business scope holding
place trait capital proportion% code
proportion%
Real estate&
Limited
Shenzhen SDG Co., Ltd. Shenzhen Mainland 1,582,820,000 66.22 66.22 192194195
liability
business
3. Particulars about subsidiaries of the Company
More details of the basic and relevant information of subsidiaries of the Company could be
found in No.1 under Note4.
4. Particulars about the joint ventures and affiliated enterprises
Voting
Share
Business Register Legal Natural of Register proportion Organization
Name of the companies holding
trait place representative business capital(RMB’0000) of the code
proportion%
Company%
I. Joint venture
Industrial
Shenzhen Tellus investment,
Limited
Gem Investment Co., Shenzhen Zhang Ruili property 5670.496 50.00 50.00
liability
Ltd. management
and tenancy
Industrial
investment,
property
Shenzhen Telixing Limited
Shenzhen Lv Hang management 2720 50.00 50.00
Investment Co., Ltd. liability
and
purchase-sale of
motor fittings
II. Affiliated enterprise
Shenzhen Xinglong Import &export
Limited
Machinery Molds Shenzhen Zhang Ruili of mould 2763.33 30.00 30.00 192172420
liability
Co., Ltd. processing
Automobile
Shenzhen Tellus Motor Limited
Shenzhen Li Jinlong maintenance 200 40.00 40.00 767583926
Service Chain Co., Ltd. liability
and tenancy
Shenzhen Renfu Automobile
Limited
Tellus Automobile Shenzhen Wu Jianfan sales and 3000 35.00 35.00 774131792
liability
Service Co., Ltd. maintenance
Shenzhen Machinery
Limited Huang Import &export
Equipment Import & Shenzhen 1325 35.75 35.75 192190506
liability Weiqiang of motor fittings
Export Co., Ltd.
Shenzhen Dongfeng Limited Production of
ShenzhenXu Tiansheng 4500 25.00 25.00
Automobile Co., Ltd. liability automobile,
68
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Voting
Share
Business Register Legal Natural of Register proportion Organization
Name of the companies holding
trait place representative business capital(RMB’0000) of the code
proportion%
Company%
maintenance
Inspection of
Shenzhen Xinyongtong
Limited security
Test Technology Co., Shenzhen Li Jinlong 160 31.00 31.00
liability technology for
Ltd.
motor vehicle
Consultation of
Shenzhen Xinyongtong diesel oil pump
Limited
Oil Pump Environmental Shenzhen Li Jinlong technology and 100 31.00 31.00
liability
Co., Ltd. environmental
technology
Maintenance of
motor mobile
and
Shenzhen
Limited motorcycles;
XinyongtongAutomobi Shenzhen Qi Peng 100 31.00 31.00
liability Auto
le Services Co., Ltd.
decoration;
sale of auto
fittings
Maintenance of
Shenzhen Xinyongtong
Limited 2nd category
Dongxiao Auto Fittings Shenzhen Qi Peng 50 31.00 31.00
liability vehicle; sale of
Sale Co., Ltd.
auto fittings
Shenzhen Xinyongtong Development of
Xinda Inspection Limited inspection
Shenzhen Huang Peibo 100 40.00 40.00
Equipment Limited liability technology,
LiabilityCompany selling
Auto
management
Shenzhen Xinyongtong Limited
Shenzhen Li Jinlong technology and 16 30.00 30.00
Consultant Co., Ltd. liability
net work
maintenance
69
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
5. Particulars about other related parties
Name of the company Relationship between the Company Organization code
Shenzhen SD Swan Industrial Co., Ltd. Subsidiary of parent company 192473856
Shenzhen Machinery Equipment Import &
Export Co., Ltd. Subsidiary of parent company 19034097X
Shenzhen SD Real Estate Co., Ltd. Subsidiary of parent company 279365997
Hong Kong Yujia Investment Co., Ltd. Subsidiary of parent company
Shenzhen Tellus Real Estate Yueyang
Company Subsidiary of parent company
Shenzhen SD Development Center
Construction Supervision Co., Ltd. Subsidiary of parent company 192260957
Shenzhen Tellus Yangchun Real Estate
Company Subsidiary of parent company
Shenzhen Longang Tellus Real Estate
Company Subsidiary of parent company
5. Transaction with related parties
6.1 Related tenancy
Recognition
Date of tenancy Expire date basis of Leasing income
Name of Lesser Name of Lessee Tenancy assets
begin of tenancy tenancy (yuan)
earnings
Shenzhen RenfuTellus
Shenzhen Tellus building
Automobile Services 2005-1-1 2025-1-1 Contract price 2,575,000.00
Holding Co., Ltd. construction
Co., Ltd.
Shenzhen Tellus
Shenzhen Xinyongtong
Xinyongtong machinery
Inspection Technology 2008-7-1 2016-6-30 Contract price 80,000.00
Automobile equipment
Co., Ltd.
Development Co., Ltd.
Shenzhen Tellus
Shenzhen Xinyongtong
Xinyongtong building
Automobile Service Co., 2009-4-1 2012-3-31 Contract price 154,602.00
Automobile construction
Ltd.
Development Co., Ltd.
Shenzhen Tellus
Shenzhen Xinyongtong
Xinyongtong machinery
Dongxiao Auto Fittings 2009-4-1 2012-3-31 Contract price 30,484.50
Automobile equipment
Sale Co., Ltd.
Development Co., Ltd.
Shenzhen Tellus
Shenzhen Xinyongtong
Xinyongtong building
Automobile Service Co., 2009-4-1 2012-3-31 Contract price 113,400.00
Automobile construction
Ltd.
Development Co., Ltd.
Shenzhen Tellus
Shenzhen Xinyongtong
Xinyongtong machinery
Dongxiao Auto Fittings 2009-4-1 2012-3-31 Contract price 15,900.00
Automobile equipment
Sale Co., Ltd.
Development Co., Ltd.
（2）No related guarantee in this period
70
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
（3）No money lending of related parties in this period
7. Account receivable and account receivable of related parties
Items Related parties Amount of period-end Amount of period-begin
Shenzhen Xinyongtong Automobile
695,699.00 541,097.00
Accounts Service Co., Ltd.
receivable Shenzhen Xinyongtong Dongxiao Auto
510,300.00 396,900.00
Service Co., Ltd.
Shenzhen Xinyongtong Technology Co., - 80,000.00
Ltd.
Shenzhen Xinyongtong Xinda Inspection 496,450.47 494,158.47
Equipment Limited Liability Company
Other
Shenzhen Xiandao Chemistry New 708,072.26 708,072.26
accounts
material Co., Ltd.
recivable
Shenzhen Tellus Automobile Service 7,187,829.60 7,126,559.60
Chain Co., Ltd.
Shenzhen Xinlong Machinery Mould Co., 1,767,628.09 1,729,919.77
Ltd.
Shenzhen SDG Co., Ltd. 19,256,940.00 19,279,745.00
Short-term
loans Shenzhen SDG Development Center
5,000,000.00 5,000,000.00
Construction Superse Co., Ltd.
Shenzhen Xinyongtong Dongxiao Auto
accounts - 125,047.06
Service Co., Ltd.
payable
Shenzhen SDG Real Estate Co., Ltd. 6,054,855.46 6,054,855.46
Shenzhen SDG Real Estate Co., Ltd. 335,701.34 335,701.34
H.K. Yujia Investment Co., Ltd. 1,987,638.36 1,987,638.36
Shenzhen SDG Swan Industrial Co., 20,703.25 20,703.25
Shenzhen Machinery Equipment Import & 528,454.50 387,833.70
other Export Co., Ltd.
accounts Shenzhen SDG Co., Ltd. 32,720,688.91 32,288,988.91
payable Shenzhen Longgang Tellus Real Estate 1,095,742.50 1,095,742.50
Co.,
Shenzhen Yangchun Real Estate Co., 476,217.49 476,217.49
Shenzhen SDG Development Center 185,336.00 46,334.00
Construction Supervise Co., Ltd.
Shenzhen Xinlong Machinery Mould Co., - 78,515.56
Ltd.
Note 7. Contingency
1. Contingency and its financial influence from un-judged lawsuits and arbitration
1.1. 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 distained forcibly. Till the disclosure date for this report, Fu Tian
District People’s Court had adjudged that the Company won the lawsuit and the forcible execution
had been applied by the Company.
April 2006 Shenzhen Development Bank brought an accusation against Jintian’s overdue loan two
71
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
million U.S. dollars and the Company who guaranteed for this loan. The company took on the
principal and all interest. After that, the Company appealed to Shenzhen Luohu District People's
Court, asking Jintian to repay 2,960,490 U.S. dollars and interest. In 2008, it reached Shen Luo
No.937 Civil Reconciliation Agreement (2008) after the mediating action taken by Shenzhen Luohu
District People's Court. The agreement is as follows: If Jintian repay 2,960,490 U.S. dollars before
October 31, 2008, the company will exempt all the interest. If Jintian can not settle the amount on
time, it will pay the penalty in accordance with the People's Bank of China RMB benchmark
lending rate over the same period.
The Company has not yet received the money from Jintian till the disclosure day.
1.2. In October of 2005, a lawsuit was brought to Shenzhen Intermediate People’s Court by the
Company, which is the recognizor of bank loan guarantee of Shenzhen Zhong Hao (Group) Co.,
Ltd., to require Zhong Hao to redress RMB 16,620,000 which was finally paid by the Company on
behalf of Zhong Hao(principal: RMB 11,500,000, interest: RMB 5,000,000, legal fare and
evaluating fare: RMB 120,000, which were all dealt as a loss in last report term of the Company.).
Till the disclosure date for this report, Shenzhen Intermediate People’s Court had adjudged that the
Company won the lawsuit and the forcible execution had been applied by the Company.
In 2008, Shenzhen Intermediate People's Court issued the Shen Zhong Fa No. 420 Civil Verdict
(2007). Since the Company failed to provide the property or property clue of Zhong Hao available
for execution, and so did the Court, so the Court suspended the case. After the disappearance of the
suspension, the Company may apply to the court to recover the execution.
1.3. The Company signed a “Guarantee Contract for a limited loan” with Shenzhen Petroleum &
Chemical Limited Company (“Petroleum & Chemical Limited”) Agricultural Bank of China (ABC)
Shenzhen Shangbu Subbranch on 14 December 1995. Our company guaranteed Petroleum &
Chemical Limited to borrow a loan of RMB 57,600,000 from Agricultural Bank of China Shenzhen
Shangbu Subbranch, which would expire on 14 December 2000. On 29 December 2000, China
Agricultural Bank Shenzhen Branch, China Great wall Asset Management Corporation Shenzhen
Branch (“Great Wall Corporation Shenzhen Branch”) and Petroleum & Chemical Limited signed a
“Loan for Investment & Stock Transfer Agreement”. Three parties agreed that ABC Shenzhen
Branch would transfer a loan of RMB 270,000,000 (the above-mentioned loan of RMB 57,600,000
included), that he provided to Petroleum & Chemical Limited, to Great Wall Corporation Shenzhen
Branch, as a way of investment. In the agreement, they promised that “From the date on which the
contract become effective, Party A, Grate wall Corporation Shenzhen Branch, will be entitled with
the rights as a investor; Party B, ABC Shenzhen Branch, will not be a lender again. “The agreement
will become effective with the signatures of the representatives or agents from the three parties”. On
the same date, Great wall Corporation Shenzhen Branch, Petroleum & Chemical Limited and
Shenzhen Petroleum & Chemical Group Limited Company (“Petroleum & Chemical Group”)
signed an “Agreement”. Three parties agreed that Great wall Corporation Shenzhen Branch changed
his investor’s equity of RMB 270,000,000 in Petroleum & Chemical Limited as the investment
returns in Petroleum & Chemical Group. Meanwhile, Petroleum & Chemical Group and Great Wall
Corporation Shenzhen Branch signed a “Stock Transfer Contract”. They agreed that Great Wall
Corporation Shenzhen Branch would use his investment returns of RMB 270,000,000 in Petroleum
& Chemical Group to invest as a stockholder in a newly-registered company of Petroleum &
Chemical Group. The contract “will become effective with the signatures and chops from the two
parties”.
On 20 August 2004, the Agricultural Bank of China Shenzhen Branch claimed that “Agreement”,
“Loan for Investment & Stock Transfer Agreement” and “Stock Transfer Contract” had not been
72
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
carried out. They appealed to the Shenzhen Intermediate People's Court and required the borrower,
Petroleum & Chemical Limited, to repay the loan of RMB 57,600,000, interest of RMB
16,652,286.37, and debt interest and expense of realization of creditors’ right occurred in overdue
period since the judge day. It also required the Company to undertake joint responsibility for all
debt.
On 9 May 2006, the Company received the civil judgment of (2004) Shen Zhong Fa Min No. 437
from Shenzhen Intermediate People’s Court. In its judgment for first instance, Shenzhen
Intermediate People’s Court ordained that the Company should undertake the joint liability of
settlement for the loan of Petroleum & Chemical Limited. The Company shall repay the loan
principal of RMB 57,600,000 and interests to the Agricultural Bank of China Shenzhen Shangbu
Subbranch, within 10 days upon effectiveness of this judgment. If the Company failed to repay in
the regulated time, interest would be doubled according to the interest rate of the overdue time. As
Petroleum & Chemical Limited was delisted and its assets were seized by the creditors, so there
were no assets available for execution. The Company made provision of RMB 87,568,728.57 for
the relevant loss, in accordance with the Accounting Regulations for Business Enterprises.
The Company refused to accept the above-mentioned verdict and appealed to Guangdong
Provincial High People's Court (hereinafter referred to Guangdong High Court). Guangdong High
Court rejected the appeal and upheld the original verdict by the Civil Judgment [2006] No. 172. The
Company refused to accept the verdict of Guangdong High Court and submitted Civil Retrial
applications and asked for Revocation of Civil Judgment of [2004] No.437 and [2006] No. 172
respectively issued by Shenzhen Intermediate People’s Court and Guangdong High Court.
Guangdong High Court accepted the application for retrial and decided to retrial this case by issuing
Civil Judgment [2007] No.682 on October 16, 2007. During the retrial, the enforcement execution
application presented by China Agricultural Bank Shenzhen Branch to Shenzhen Intermediate
People’s Court has been suspended. And the case had entered the trial supervision procedure in
Guangdong High Court.
The Company received the verdict of Civil Judgment [2008] No.23 from the Guangdong High
Court on 13 January 2010. Maintaining the decision of Civil Judgment [2006] No. 172, and this
judgment was the final decision.
On 7 July 2010, the Company receive Intermediate People’s Court. The civil judgment of [2008]
No.23 from Guangdong High Court, civil judgment of [2006] No.172 and civil judgment of [2004]
No.437 from Shenzhen Intermediate Court have been in legal validity. Pursuit to the application
from Shenzhen Agriculture Bank of China, on 2 July 2010, the Shenzhen Intermediate People’s
Court freed the following shares as: 95% equity of Shenzhen Tefa Tellus Real Estate Development
Co., Ltd., 50% equity of Shenzhen Tellus GEM Investment Co., Ltd.,d a Freezing Notice [2010]
No.534-1 from Shenzhen 60% of Shenzhen Tafa Huari Automobile Enterprise Co., Ltd., 60% of
Shenzhen Huari TOYOTA Automobile Sale Services Co., Ltd. and 35% of Shenzhen Renfu Tellus
Automobile Services Co., Ltd. Held by the Company.
Till reporting day, both parties are negotiating and becoming reconciled.
1.4. Shenzhen Tefa Tellus Real Estate Development Co., Ltd. (“Tellus Real Estate”), a subsidiary of
the Company, signed a Joint Property Construction Contract with Shenzhen Jinlu Industrial and
Trade Company (“Jinlu Company”) on November 29, 1994, to build Liye Huishi Street in Buji
Town, Shenzhen. In the agreement, it was agreed that on the basis of respecting the Cooperation
Contract of Construction for Buji Liye Huishi Street signed by Jinlu Company, and the land
providers-Guangzhou Military Area Shenzhen Property Administrative Department (referred to
Property Administrative Department later) and Army 75731 of Chinese People's Liberation Army
73
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
(referred to Army 75731 later), Tellus Real Estate input RMB 10 million as investment for
construction in return of a property whose construction area amounted to 6,000 square meters. Jinlu
Company promised to hand over the completed buildings and fitting equipments before end of
November, 1995. However, till Dec 31st of 1996, though it had already accumulatively input with
RMB 9,822,500.00 for this investment, Tellus Real Estate did not received the properties it should
had received on the agreed day for handing over property. So, it appealed to the court, to require
Jinlu Company immediately return the investment account of RMB 9.8 million and relevant interest,
and all legal fare. Through court hearing, the Court added Guangzhou Military Area Shenzhen
Property Administrative Department and Army 75731 as defendants according to laws. On Mar
18th of 2003, Shenzhen Intermediate Peoples’ Court sentenced effectiveness of the aforementioned
Cooperation Contract by issuing SZFFCZi (2000) No. 101 Verdict. The nature was confirmed as
cooperation construction, and the two parties should continue to implement the contract. If disputes
occurred between the parties for any disagreement in contract implementation, law channel could be
an assistant for solving.
In March of 2005, Tellus Real Estate, together with Jinlu Company, prosecuted Property
Administrative Department and Army 75731 (Guangzhou Military Area Telecommunication
Equipments Repair Office), appealing that the two defendants implement the contract and hand over
the 11,845 square meters property in Liye Huishi Street to the two accusers. Meanwhile, the
defendants were appealed to pay lease income of RMB 5,034,664.94 collected from the property
since 1998. Meanwhile, Tellus Real Estate and Jinlu Company signed agreement, agreeing that: for
Liye Huishi Street property received back from automatic implementation or compulsory execution
by the Court, 6,000 square meters property belonged to Tellus Real Estate, and the rest belonged to
Jinlu Company. If insufficient to 6,000 square meters, all the property belonged to Tellus Real
Estate; as for the income called back from this case, distribution between the two parties with
proportion of 5:5 was going to made. Shenzhen Mediate People’s Court took the first trial on this
lawsuit in Aug. of 2010. It wasn’t judged in court for the case was complicated.
On Apr. 29 of 2011, the Company received a civil ruling letter ([2005] SZFSMWCZi No. 82) from
Shenzhen Mediate People’s Court. The court believed the cooperation contract of real estate
development signed by Jinlu Company together with Housing Management Branch was valid. But
Liyehui Food Street built on land concerning this case by both parties was regarded as unauthorized
construction because they didn’t handle the construction planning permit in administrative division
of government though they got approval from the general logistic division. For both parties didn’t
post-handle relevant procedure in administrative division, this unauthorized construction belongs to
illegal target. People’s court isn’t able to adjudicate the construction as well as its interest
distribution. Thus Jinlu Company and Tellus Company rejected this lawsuit as for property payment
of Liyehui Food Street and rent distribution.
The rulings for other lawsuits of the two companies were as follows: reject lawsuit the plaintiff
namely Shenzhen Jinlu Industry and Trade Company and Shenzhen Tefa Tellus Real Estate Co., Ltd
appealed that Shenzhen Property Management Branch in Guangzhou Military Region, and PLA
75731 Army should submit 11845 square meters of Liyehui Food Street and they both should pay
rent of several years since 1998.
The Company had accrued total amount of provision for bad debts of cooperative development
capital Tellus Real Estate Company invested.
74
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Note 8. Commitment
There is no significant commitments need for disclosure.
Note 9. Items after the balance sheet date
There are no Items after the balance sheet date needed for disclosure.
Note 10. Other significant events
1.the 30% equity of Shenzhen Xinlong Machinery Mould Co., Ltd., 50% equity of Shenzhen
Telixing Investment Co., Ltd., 50% equity of Shenzhen Tellus GEM Investment Co., Ltd., 51%
equity of Shenzhen Xinyongtong Moto Vehicle Inspection Equipment Co.,Ltd.,100% equity of
Shenzhen Tellus Real Estate Transaction Co., Ltd., 100% equity of Shenzhen Tefa Tellus Real
Estate Co., Ltd., 100% equity of Shenzhen Tafa Tellus Property Management Co., 100% equity of
Shenzhen Automobile Industry Trading General Company and 100% equity of Shenzhen Zhongtian
Industrial Co., Ltd. held by the Company have been hedge to the Bank as the deposit for RMB 6
million loans.
75
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Note 11. Notes to Financial Statement of parent company
1. Accounts receivable
1.1 Classified according to category
2011-6-30 2011-1-1
Balance of book
Balance of book value Bad debt provision Bad debt provision
value
Category
Accruing Accruing
Proporti
Amount Proportion Amount proporti Amount Amount proporti
on
on on
accounts receivble
with major single
amount but with
single provision
for bad debt
accounts receivable
whose bad debts
provision was
accrued by
combination (by
age)
accounts receivble
with minor single
amount but with 484,803.08 100.00% 484,803.08 100.00% 484,803.08 100.00% 484,803.08 100.00%
single provision
for bad debt
Total 484,803.08 100.00% 484,803.08 100.00% 484,803.08 100.00% 484,803.08 100.00%
Single item with major amount in period-end or the account receivable of bad debt provision by solely
impairment testing for single item with minor amounts
Book Bad debt Accruing Reasons
Units Contents
balance amount proportion
Shenzhen Bijiashan
Entertainment Predicted un-recovered due to
Company Loan 172,000.00 172,000.00 100% long age
Loan Predicted un-recovered due to
SEG stores 97,806.64 97,806.64 100% long age
Guangzhou Lemin Loan Predicted un-recovered due to
Computer Center 86,940.00 86,940.00 100% long age
Loan Predicted un-recovered due to
Other units 128,056.44 128,056.44 100% long age
Total 484,803.08 484,803.08 100%
（2）In this reporting period, there were no accounts receivable with actual cancel after verification.
1.3 There is no other accounts receivable due from shareholders holding 5% (including
5%) voting shares in this report period.
76
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
1.4 Top 5 amount of accounts receivable
Name Relationship Amount Time Proportion of total
between the amount receivables
Company (%)
Shenzhen Bijiashan Entertainment
Company External unit 172,000.00 Over 3 years 35.48
SEG store External unit 97,806.64 Over 3 years 20.17
Guangzhou Lemin Computer Center External unit 86,940.00 Over 3 years 17.93
Lanzhou Dachuan Elctronic
Company External unit 37,308.00 Over 3 years 7.70
Sichuan Shentong Computer
Company External unit 28,764.00 Over 3 years 5.93
Total 422,818.64 87.21
（5）Accounts receivable of related parties in period-end balance could be seen from Note VI 7.
77
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
2.Other receivables
2.1Classified according to types
2011-6-30 2011-1-1
Book balance Bad debt provision Book balance Bad debt provision
Type Accruin Accruin
Proporti g Proporti g
Amount Amount Amount Amount
on proport on proport
ion ion
accounts
receivble with
major single 12,298,270.57 30.18% 12,298,270.57 100.00% 12,298,270.57 30.96% 12,298,270.57 100.00%
amount but with
single provision
for bad debt
accounts
receivable whose
bad debts
provision was 27,422,477.84 67.29% 4,568,576.98 16.66% 26,399,451.97 66.45% 4,568,576.98 17.31%
accrued by
combination (by
age)
accounts
receivble with
minor single 1,030,640.31 2.53% 1,030,640.31 100.00% 1,030,640.31 2.58% 1,030,640.31 100.00%
amount but with
single provision
for bad debt
Total 40,751,388.72 100.00% 17,897,487.86 43.92% 39,728,362.85 99.99% 17,897,487.86 45.05%
In combination, other accounts whose bad debts provision was accrued by age analysis
2011-6-30 2011-1-1
Age Proportio Bad debt Proportio Bad debt
Amount Amount
n% provision n% provision
Within 1 year 17,364,645.69 63.32% - 17,057,647.67 64.61% -
1-2 years 326,451.19 1.19% 26,315.16 106,541.60 0.40% 5,327.08
2-3 years 1,365,346.96 4.98% 76,986.92 181,271.50 0.69% 36,254.30
Over 3 years 8,366,034.00 30.51% 4,465,274.90 9,053,991.20 34.30% 4,526,995.60
Total 27,422,477.84 100.00% 4,568,576.98 26,399,451.97 100.00% 4,568,576.98
Single item with major amount in period-end or the account receivable of bad debt provision by solely
impairment testing for single item with minor amounts
78
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Content
Units Book balance bad debt Accruing proportion % Reasons
s
house
staffs' house purchas Predicted un-recovered due to long age
purchase fees e fees 217,892.57 217,892.57 100.00%
Tongcheng Industry 133,085.87 133,085.87 100.00% Predicted un-recovered due to long age
other units 679,661.87 679,661.87 100.00% Predicted un-recovered due to long age
Total 1,030,640.31 1,030,640.31 100.00%
（2）n this reporting period, there were no accounts with actual cancel after verification.
2.3There is no other accounts receivable due from shareholders holding 5% (including 5%)
voting shares in this report period.
2.4Top 5 amount of Other account receivable
nature or
Name Amount Time Proportion%
content
loan and
Shenzhen Tellus Automobile
investment 6,322,559.60 2-3 years 15.51%
Service Development Co., Ltd.
income
guarant
Shenzhen Zhonghao Company liability of 5,000,000.00 over 3 years 12.27%
loan
Jinbeili Household Appliance contact accounts 2,706,983.51 over 3 years 6.64%
guarant
Shenzhen Petro-chemical Group liability of 1,914,796.79 over 3 years 4.70%
loan
Shenzhen Xinglong Machinery loan and
1,767,628.09 over 3 years 4.34%
Equipments Company interest
Total 17,711,967.99 43.46%
2.5 Other account receivable from related parties see more details in No. 7 under Note6.
3. Long-term equity investment
calcula Initial
Impairment
Item tion investment 2011-1-1 change(+,-) 2011-6-30
provision
method capital
subsidiary
Cost 263,839,543.61 263,839,543.61 - 263,839,543.61 -
investment
Joint venture 41,952,480.00 34,699,346.17 -499,615.60 34,199,730.57 -
Equity
investment
Affiliated
Equity 13,854,392.64 67,697,784.97 -925,900.00 66,771,884.97 -
investment
Other equity 37,114,018.58 28,084,779.52 - 28,084,779.52 17,908 ,162.32
Cost
investment
Total 356,760,434.83 394,321,45 4.27 -1,425,515.60 392,895,938.67 17,908,162.32
79
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Category and details of equity investment
Change of
Calculatio Initial Investment Impairment cash dividend
Name of the companies been invested 2010-1-1 increased/dec 2010-6-30
n method investment cost proportion% provision of this period
reased
Investment in subsidiaries
Shenzhen Tefa Tellus Real Estate Co.,
Cost method 31,152,888.87 31,152,888.87 31,152,888.87 100.00 -
Ltd. - -
Shenzhen Tefa Tellus Property
Cost method 5,021,970.88 5,021,970.88 5,021,970.88 100.00 -
Management Co., Ltd. - -
Shenzhen Tefa Xinyongtong Industrial 57,672,885.22 57,672,885.22 57,672,885.22 100.00 -
Cost method - -
Co., Ltd.
Shenzhen Zhongtian Industrial Co., 10,708,622.90 10,708,622.90 10,708,622.90 100.00 -
Cost method
Ltd. - -
Shenzhen Automobile Industry Trading
Cost method 126,251,071.57 126,251,071.57 126,251,071.57 100.00 -
General Company - -
Shenzhen SDG Huari Automobile
Cost method 19,224,692.65 19,224,692.65 19,224,692.65 60.00 -
Enterprise Co., Ltd. - -
Shenzhen Tellus Real Estate Trading 2,000,000.00 2,000,000.00 2,000,000.00 100.00 -
Cost method - -
Co.,Ltd．
Shenzhen Huari TOYATO Automobile Sale 1,807,411.52 1,807,411.52 1,807,411.52 60.00 -
Cost method
Service Co., Ltd. - -
Shenzhen Xinyongtong Vehicle 10,000,000.00 10,000,000.00 10,000,000.00 51.00 -
Cost method
Inspection Equipement Co., Ltd. - -
Subtotal 263,839,543.61 263,839,543.61 - 263,839,543.61 - -
Investment in joint venture
Shenzhen Tellus GEM Investment Co., Equity
28,352,480.00 26,290,773.52 -496,350.00 25,794,423.52 50.00 -
Ltd. method -
Equity
Shenzhen Telixing Investment Co., Ltd. 13,600,000.00 8,408,572.65 -3,265.60 8,405,307.05 50.00 -
method -
Subtotal 41,952,480.00 34,699,346.17 -499,615.60 34,199,730.57 - -
Investment in affiliated enterprises
Shenzhen Xinlong Machinery Mould Co., Equity 2,554,392.64 6,443,032.32 24,000.00 6,467,032.32 30.00 -
Ltd. method -
Shenzhen Tellus Auto Services Equity 800,000.00 - - - 40.00 -
Development Co., Ltd. method -
Shenzhen Renfu Tellus Automobile Equity 10,500,000.00 61,254,752.65 -949,900.00 60,304,852.65 35.00 5,250,000.00
Services Co., Ltd. method -
Subtotal 13,854,392.64 67,697,784.97 -925,900.00 66,771,884.97 - 5,250,000.00
Other equity investment
China Pufa Machin Industry General Company method 10,176,617.20 10,176,617.20 - 10,176,617.20 5.30 - -
Hunan Changyang Industry Co., Ltd. Cost method 6,900,000.00 1,810,540.70 - 1,810,540.70 36.55 1,810,540.70 -
Shenzhen Hanli High-tech Pottery Co., Ltd. method 3,466,000.00 1,956,000.00 - 1,956,000.00 80.00 1,956,000.00 -
Shenzhen Jiecheng Electronics Co., Ltd.Cost method 3,150,000.00 3,225,000.00 - 3,225,000.00 45.00 3,225,000.00 -
Shenzhen Jingwei Industry Co., Ltd. Cost method 4,000,000.00 4,000,000.00 - 4,000,000.00 12.50 4,000,000.00 -
Shenzhen (Moscow) Co., Ltd. Cost method 825,000.00 825,000.00 - 825,000.00 7.00 825,000.00 -
Wuhan Weite Hotel Cost method 640,000.00 640,000.00 - 640,000.00 640,000.00 -
Shenzhen Xiandao Chemistry New MaterialCost method 7,256,401.38 4,751,621.62 - 4,751,621.62 40.00 4,751,621.62 -
Shenzhen Petroleum Chemisry(Group) Co.,Cost method 700,000.00 700,000.00 - 700,000.00 100,000.00 700,000.00 -
Subtotal 37,114,018.58 28,084,779.52 - 28,084,779.52 17,908,162.32 -
Total 356,760,434.83 394,321,454.27 -1,425,515.60 392,895,938.67 17,908,162.32 5,250,000.00
80
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
4. Operating income and cost
Operating income Operating cost Operating profit
type
Jan.-Jun.2011 Jan.-Jun.2010 Jan.-Jun.2011 Jan.-Jun.2010 Jan.-Jun.2011 Jan.-Jun.2010
Primary
business
Tenancy 6,559,038.23 6,347,830.14 2,025,180.40 2,045,111.40 4,533,857.83 4,302,718.74
service
Total 6,559,038.23 6,347,830.14 2,025,180.40 2,045,111.40 4,533,857.83 4,302,718.74
5. Investment income
（1）Particulars about investment income
Item Jan.-Jun.2011 Jan.-Jun.2010
Income of long-term equity investment calculated based on cost 33,574.75 -
Income of long-term equity investment calculated based on equity 3,740,484.40 4,012,405.21
Investment income from disposal of long-term equity investment - -
Investment income from disposal of transactional financial
- -
assets
Total 3,774,059.15 4,012,405.21
（2）Income of long-term equity investment calculated based on equity
Company name Jan.-Jun.2011 Jan.-Jun.2010 Reason of change(+,-)
Shenzhen Renfu Tellus Auto
4,300,100.00 4,420,500.00 Profit decreased
Service Co., Ltd.
Shenzhen Tellus GEM Investment -496,350.00 -318,500.01 Losses increased
Co., Ltd.
Shenzhen Tellus Automobile -84,000.00 -129,200.00 Losses increased
Service Chain Co., Ltd.
Shenzhen Xinlong Machinery Mould
24,000.00 17,700.00
Co., Ltd.
Shenzhen Telixing Investment Co.,
-3,265.60 21,905.22
Ltd.
Total 3,740,484.40 4,012,405.21
81
Shenzhen Tellus Holding Co., Ltd. Notes to Financial Statements
Note 12 Supplemental Material
1. Non-recurring gains and losses
Items January-June 2011 January-June 2010
Gains/losses from disposal of non-current - 162,896.89
asset(non-equity assets)
Funds occupied capital received from non-financial 37,708.32 31,458.32
enterprises reckoned into current gains/losses
Non-operating income and expenses except for -138,080.16 1,897.08
abovesaid items
Total -100,371.84 196,252.29
2. Return on equity and earnings per share
earnings per share (yuan/share)
Net return on weighted
Items Basic earnings per Diluted earnings
everage assets(%)
share per share
Net profit attributable to
common shareholders of listed 0.29% 0.002 0.002
company
Net profit after deducting the
0.34% 0.003 0.003
non-recurring losses and gains
3. Explanation on the extraordinary situation and the reasons for accounting statement
Increase/decrea Change
Item 2011-6-30 2011-1-1 Notes
sed amount range
other accounts receivable 2 1,0 95,058 .70 13,7 43,16 5.24 7,3 51,893.46 53 .5% contact accounts increased
Prepaid car models for
Prepaid accounts 7,834,3 10.63 10,2 12,37 1.68 -2 ,37 8,061.05 -23 .3%
settlement
922 ,2 79.81 - 922,27 9.8 1 project constructed from
construction in process
this period
non-current liabilities 1 6,4 40,000 .00 8,640,000.00 7,8 00,000.00 90 .3% long-term loan due within
due within 1 year 1 year increased
amount of amount of Increase/decrea Change
Item Notes
this period the same sed amount range
21,394 .84 185 ,957.64 -164,562.80 -88 .5% income from disposal of
non-operating income
fixed asset at the same
Other current operating
non-operating expenses 159 ,4 75.00 21,163.67 138,31 1.3 3 653 .5%
expenses increased
income tax 207 ,0 19.50 451 ,955.63 -244,936.13 -54 .2% profit of this period
decreased
market value of financial
other comprehensive income 24,312 .75 -4 60,971.20 485,28 3.9 5 105 .3%
asset available for sale
net cash flow arising from 6,776,6 74.04 -19 ,733,147.73 26,509,821.77 -134 .3% payment for contact
operating activities accounts of the same
net cash flow arising from contstruction in process
-1,480,669.6 6 -8 54,895.15 -625,774.51 73 .2%
investing activities increased
net cash flow arising from -14,821,8 46.68 -3,892 ,69 4.28 -10,929 ,15 2.40 280 .8% payment for bank loan of
financing activities this period increased
82
Section VIII DOCUMENTDS AVAILABLE FOR REFERENCE
The Company reserved complete integrated documents for CSRC, SZSE, relevant
departments and investing public to refer to. The documents for reference were as follows:
I. Semi-annual Report enclosed with signature of President
II. Text of Financial Report personal enclosed with signatures and seals of Legal
Representative, Person in Charge of Accounting and Person in Charge of Accounting
Department;
III. Originals of all documents and announcements disclosed in newspapers designated by
CSRC in Period
IV. Other relevant information
Chairman: Zhang Ruili
Board of Directors of
Shenzhen Tellus Holding Co., Ltd.
12 August 2011
83
