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特力A(000025)公告正文

特 力B:2014年半年度报告(英文版)

公告日期:2014-08-08

                    深圳市特力(集团)股份有限公司 2014 年半年度报告全文




SHENZHEN TELLUS HOLDING CO., LTD

       SEMI-ANNUAL REPORT 2014




            August 2014




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                                             深圳市特力(集团)股份有限公司 2014 年半年度报告全文




         Section I. Important Notice, Contents and Paraphrase

Board of Directors, Supervisory Committee, all directors, supervisors and senior
executives of Shenzhen Tellus Holding Co., Ltd. (hereinafter referred to as the
Company) hereby confirm that there are no any fictitious statements, misleading
statements, or important omissions carried in this report, and shall take all
responsibilities, individual and/or joint, for the reality, accuracy and completion
of the whole contents.


All directors are attended the Board Meeting for report deliberation.


The Company has no plans of cash dividend distributed, no bonus shares and
has no share converted from capital reserve either.


Lv Hang, principal of the Company, Luo Bojun, person in charger of accounting
works ,CFO FuBin and Ke Wensheng, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of Semi-Annual
Report 2014 is authentic, accurate and complete.


Concerning the future planning involved in the Report, they do not constitute a
substantial commitment for investors. Investors are advised to exercise caution
of investment risks.




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                                                                            深圳市特力(集团)股份有限公司 2014 年半年度报告全文




                                                             Content
Semi-Annual Report 2014 ................................................................................................................. 1

Section I Important Notice, Contents and Paraphrase .................................................................. 2

Section II Company Profile ............................................................................................................... 5

Section III Accounting data and summary of finnaical indexes .................................................... 7

Section IV Report of the Board of Directors ................................................................................... 9

Section V Important Events ............................................................................................................ 18

Section VI Changes in shares and particular about shareholders............................................... 25

Section VII Preferred Stock…………………………………………………………………….…29

Section VIII Directors, Supervisors and Senior Executives ....................................................... 30

Section IX Financial Report ............................................................................................................ 31

Section X Documents Available for Reference ........................................................................... 146




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                                                                   深圳市特力(集团)股份有限公司 2014 年半年度报告全文



                                                 Paraphrase
                     Items                   Refers to                               Definition

CSRC                                         Refers to   China Securities Regulatory Commission

SZ Exchange                                  Refers to   Shenzhen Stock Exchange

                                                         Shenzhen Branch of China Securities Depository & Clearing
Shenzhen Branch of SD&C                      Refers to
                                                         Corporation Limited

Company, the Company, our Company, Tellus
                                             Refers to   Shenzhen Tellus Holding Co., Ltd.
Group

Reporting period, Current Period, the Year   Refers to   1 January 2014 to 30 June 2014

SDG                                          Refers to   Shenzhen SDG Co., Ltd.

Auto Industrial and Trading Company          Refers to   Shenzhen Auto Industry and Trade Corporation




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                                                                        深圳市特力(集团)股份有限公司 2014 年半年度报告全文




                                         Section II Company profile

I. Company Profile
Short form for share           Tellus-A, Tellus-B                       Code for share                 000025, 200025

Listing stock exchange         Shenzhen Stock Exchange

Chinese name of the Company 深圳市特力(集团)股份有限公司

Abbr. of Chinese name of the
                               深特力
Company(if applicable)

English name of the
                               ShenZhen Tellus Holding Co.,Ltd
Company(if applicable)

Legal Representative           Lv Hang


II. Contact person and ways

                                                      Secretary of the Board                       Rep. of securities affairs

                                            Lv Hang (function in an acting capacity of
Name                                                                                      Sun Bolun
                                            Secretary of the Board)

                                            15/F, Zhonghe Building, Shennan Middle        15/F, Zhonghe Building, Shennan Middle
Contact adds.
                                            Road, Futian District, Shenzhen               Road, Futian District, Shenzhen

Tel.                                        (0755) 83989335                               (0755) 83989339

Fax.                                        (0755) 83989386                               (0755) 83989386

E-mail                                      ir@tellus.cn                                  s9239243@163.com


III. Others

1. Way of contact

Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or
not
□ Applicable   √ Not applicable

Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,
found more details in Annual Report 2013.


2. Information disclosure and preparation place

Whether information disclosure and preparation place changed in reporting period or not
□ Applicable   √ Not applicable

The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation

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                                                                          深圳市特力(集团)股份有限公司 2014 年半年度报告全文


place for semi-annual report have no change in reporting period, found more details in Annual Report 2013.


3. Registration changes of the Company

Whether registration has changed in reporting period or not
□ Applicable   √ Not applicable
Date/place for registration of the Company, registration number for enterprise legal license, number of taxation registration and
organization code have no change in reporting period, found more details in Annual Report 2013.




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                                                                        深圳市特力(集团)股份有限公司 2014 年半年度报告全文




        Section III. Accounting data and summary of financial indexes

I. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting
error correction or not
□Yes   √ No

                                                                                                         Increase/decrease in this
                                                  Current period            Same period of last year
                                                                                                             report y-o-y (%)

Operating revenue (RMB)                                 228,692,541.86                222,087,318.26                           2.97%

Net profit attributable to shareholders of
                                                           5,380,420.81                  3,746,434.89                        43.61%
the listed company(RMB)

Net profit attributable to shareholders of
the listed company after deducting                         5,215,240.02                 -3,413,773.73
non-recurring gains and losses(RMB)

Net cash flow arising from operating
                                                          -4,185,311.96                 36,298,462.37                      -111.53%
activities(RMB)

Basic earnings per share (RMB/Share)                               0.0244                      0.0170                        43.53%

Diluted earnings per share (RMB/Share)                             0.0244                      0.0170                        43.53%

Weighted average ROE (%)                                           2.77%                       2.01%                           0.76%

                                                                                                         Increase/decrease in this
                                               End of current period           End of last period       report-end over that of last
                                                                                                              period-end (%)

Total assets (RMB)                                      741,757,937.15                700,998,151.85                           5.81%

Net assets attributable to shareholder of
                                                        196,666,117.09                191,351,957.28                           2.78%
listed company(RMB)


II. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable     √ Not applicable




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                                                                           深圳市特力(集团)股份有限公司 2014 年半年度报告全文


The Company has no difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) in reporting period


2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable    √ Not applicable


The Company has no difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and
Chinese GAAP (Generally Accepted Accounting Principles) in reporting period


III. Items and amounts of extraordinary profit (gains)/loss

√Applicable     □Not applicable
                                                                                                                                In RMB

                                  Item                                          Amount                             Note

Gains/losses from the disposal of non-current asset (including the
                                                                                        172,812.80
write-off that accrued for impairment of assets)

Other non-operating income and expenditure except for the
                                                                                         49,806.10
aforementioned items

     Impact on minority shareholders’ equity (post-tax)                                 57,438.11

Total                                                                                   165,180.79                   --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss




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                                                                          深圳市特力(集团)股份有限公司 2014 年半年度报告全文




                            Section IV. Report of the Board of Directors

I. Introduction

In the first half of the year, Board of the Company earnestly perform their duties to regulating corporate operation,
integrate all of the resources in total, taking marketization measure to contract and adjusted the cahin of enterprise
manaegment, tap the potential and increase income with operating sustainable earnings achieved. On the one hand,
ensure that construction of key projects are in s steady progress, on the other hand, strive to explore new business
model and management model for Tellus, actively promoted the Company’s transformation and upgrading,
looking for new revenue growth opportunities to drive a healthy and stable development for the Company.

II. Main business analysis

Introduction

Main business of the Company was auto sales, auto inspection and maintenance and accessory sales, property
rental and services etc.; main business and its structure as well as main business ability in the reporting show no
major changes compare with last period.

In reporting period, the Company achieved operation income of RMB 228.69 million in total with a y-o-y growth
of 2.97%; profit realized RMB 5.36 million in total, net profit attributable to owners of parent company
amounting as RMB 5.38million, growth of the profit mainly because i. in the Period, enterprise (engaged in
automobile business) with controlling rights obtained and with stock invested by the Company have greatly
growth in profit on a year-on-year basis; ii. Property rental revenue in the Period increased and; iii. Operating
margins of the Company growth due to the decrease of period expense in the Period


Y-o-y changes of main financial data
                                                                                                                              In RMB

                                                                                   Y-o-y increase/decrease
                               Current period           Same period of last year                               Reasons for changes
                                                                                            (%)

Operation revenue                      228,692,541.86            222,087,318.26                     2.97%

Operation cost                         195,298,141.59            183,087,649.86                     6.67%

Sales   expenses                         9,182,022.30              9,442,375.29                     -2.76%

Administrative expenses                 16,101,662.11             17,906,667.35                   -10.08%

Financial cost                           8,229,163.34              7,790,082.78                     5.64%

                                                                                                             More income tax paid in
Income tax expense                         701,033.07                195,375.12                    258.81%
                                                                                                             the Period

                                                                                                             Auto funds paid by
Net cash flow arising
                                        -4,185,311.96             36,298,462.37                   -111.53% subsidiary Huari
from operation activities
                                                                                                             TOYOTA increased



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                                                      深圳市特力(集团)股份有限公司 2014 年半年度报告全文


                                                                                    y-o-y

                                                                                    More costs paid for
                                                                                    construction of Shuibei
                                                                                    Jewelry Building and
Net cash flow arising                                                               received cash from
from investment             -70,203,958.22     12,944,409.13            -642.35% disposal of investment
activities                                                                          real estate at same period
                                                                                    of last year, and no such
                                                                                    item occurred in the
                                                                                    Period

                                                                                    Borrowings from parent
Net cash flow arising
                             67,083,699.08    -24,147,599.58                        company and the Bank
from financing activities
                                                                                    increased in the Period

                                                                                    Amount paid for auto
                                                                                    purchased from
                                                                                    subsidiary Huari
Net increase of cash and                                                            TOYOTA increased
                             -7,304,868.03     25,093,081.11            -129.11%
cash equivalent                                                                     y-o-y and more costs
                                                                                    paid for construction of
                                                                                    Shuibei Jewelry Building
                                                                                    in the Period

                                                                                    Inventory decreased due
                                                                                    to the sales expansion
Inventory                    43,766,660.19     62,826,365.70             -30.34%
                                                                                    from subsidiary Huari
                                                                                    TOYOTA

                                                                                    Auto sales deduct the
Other current assets          85,849,620.32    41,642,020.40              106.16% input tax from subsidiary
                                                                                    Huari TOYOTA

                                                                                    More costs for project of
Construction in process      52,873,743.56        33,255.04            158894.68%
                                                                                    Shuibei Jewelry Building

                                                                                    Land value of Shuibei
Intangible assets            52,964,100.72        33,255.04          159,166.39% Jewelry Building
                                                                                    transferred-in

                                                                                    The 50% land value of
                                                                                    Shuibei Jewelry Building
Other non-current assets              0.00     26,339,112.00            -100.00% paid originally
                                                                                    transferred-in as
                                                                                    intangible assets

Short-term loans            182,741,296.00    110,969,952.93              64.68% Bank loans increased

                                                                                    Bank acceptance paid by
Note payable                  6,225,651.90     15,920,748.09             -60.90%
                                                                                    subsidiary Huari



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                                                                         深圳市特力(集团)股份有限公司 2014 年半年度报告全文


                                                                                                          TOYOTA

Accounts receivable in                                                                                    Automobile Sales of
                                        2,228,640.04             22,087,866.51                  -89.91%
advance                                                                                                   Huari TOYOTA

                                                                                                          Enterprise income taxes
Taxes payable                          9,175,574.79             16,687,262.22                  -45.01%
                                                                                                          paid

Loss from asset                                                                                           Bad debt provision
                                           35,599.18               100,000.00                    -64.4%
devaluation                                                                                               decrease

                                                                                                          Associates enterprise--
                                                                                                          Shenzhen Zung Fu Tellus
Investment earnings                    7,841,475.98              1,780,082.57                  340.51% Auto Service Co., Ltd
                                                                                                          gains more profit in the
                                                                                                          Period

                                                                                                          There was losses from
                                                                                                          disposal of fixed assets
Non-operating
                                           2,633.01                  23,753.00                 -88.92% over a year earlier, and
expenditure
                                                                                                          no such item occurred in
                                                                                                          the Period

                                                                                                          There was cash received
                                                                                                          over a year earlier from
Subtotal of cash in-flow
                                                                                                          disposal of investment
arising from investment                   40,740.00             32,414,709.28                  -99.87%
                                                                                                          real estate, and no such
activities
                                                                                                          item occurred in the
                                                                                                          Period

Subtotal of cash out-flow                                                                                 Engineering funds paid
arising from investment               70,244,698.22             19,470,300.15                  260.78% for Shuibei Jewelry
activities                                                                                                Building increased

Subtotal of cash in-flow                                                                                  Borrowings from parent
arising from financing              226,000,000.00              41,600,000.00                  443.27% company and the Bank
activities                                                                                                increased in the Period

                                                                                                          The loans due for
Subtotal of cash out-flow
                                                                                                          repayment to parent
arising from financing              158,916,300.92              65,747,599.58                  141.71%
                                                                                                          company and the Bank
activities
                                                                                                          increased in the Period

Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
The future development and planning extended to reporting period that published in disclosure documents as prospectus, private
placing memorandum and recapitalize statement
□ Applicable √ Not applicable
No future development and planning extended to reporting period that published in disclosure documents as prospectus, private
placing memorandum and recapitalize statement


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Review on the previous business plan and its progress during reporting period
There is no situation of failing to reach the planned goals


III. Constitution of main business

                                                                                                                             In RMB
                                                                                    Increase or      Increase or      Increase or
                                                                                    decrease of     decrease of    decrease of gross
                        Operating
                                         Operating cost       Gross profit ratio operating revenue operating cost   profit ratio over
                         revenue
                                                                                 over same period over same period same period of
                                                                                    of last year     of last year      last year
According to industries

Auto sales             159,587,553.83     155,270,536.50                2.71%            13.49%             11.59%             1.66%

Auto      inspection
and maintenance
                        22,878,151.96      18,282,121.04               20.09%            -11.39%            -7.77%            -3.14%
and      accessories
sales

Rental          and
                        43,155,763.69      20,048,113.30               53.54%             -3.80%           -10.00%             3.20%
service

According to products

Auto sales             159,587,553.83     155,270,536.50                2.71%            13.49%             11.59%             1.66%

Auto      inspection
and maintenance
                        22,878,151.96      18,282,121.04               20.09%            -11.39%            -7.77%            -3.14%
and      accessories
sales

Rental and
                        43,155,763.69      20,048,113.30               53.54%             -3.80%           -10.00%             3.20%
service

According to region

Shenzhen               225,621,469.48     193,600,770.84               14.19%             6.78%              6.82%            -0.03%


IV. Core competitive-ness analysis

Core competitive-ness of the Company has no major changes in the Period. Main business of the Company mainly
divided into two parts, the auto sales & aftermarket service and property rental & service.


Core competitive-ness of the Company has no major changes in the Period. Main business of the Company mainly
divided into two parts, the auto sales & aftermarket service and property rental & service.
Auto sales & aftermarket service of the Company adopt business model of 4S store, comprehensive major
maintenance, authorize maintenance, special maintenance and auto inspections. As profit standards in auto
industry declined integradlly and soaring costs of raw maateirals and labors, the marketplace will become
increasingly crowded. The Company will intergrate resources, active assets in full and reduce costs to step out the


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                                                                       深圳市特力(集团)股份有限公司 2014 年半年度报告全文


enterprises and business gradually, who owes un-sustainable earnings and bad future perspective; overcome
negative factors in automobile consumption market to achieve the operation goals with great efforts.
In aspect of property rental & service, the Company owes a certain property management experience and has
higher property management qualification ; most of the property rental and management are self-owned property,
which has a lower cost and a stable income. The property of the Company in Shuibei area locates in a jewelry
collection and distribution center, property around Shuibei area is in the process of upgrading and transformation
recently with less property available, and the rental standards and price will be improved.
With standard of market demand and targets of maximum benefit, the Company adopting various operation
measures and innovative operation principle, implementing unified market planning via integration of existing
property resources; promote overall image and level for the property availabe for lease, create a speciazlized and
branded corporate image. Actively bringing in substantial stable clients, increase the ares for lease, improve rent
standards and raise income of the property lease in order to achieved the maximization of property value. With the
stable promotion of Tellus-Gem Golden Jewelry Industrial Park, the Company will promote targeted constructions
of the Company with all-out efforts, guarantee the projects completed and put into operation on schedule, and
increase areas of the Company’s property (Shuibei Area in particular) for lease greatly, quality and grade
ascended rapidly and the upgrading of property leasing business achieved.
The Company will seize policy opportunity, taking full advantage of the development advantage of core base for
Shenzhen golden jewelry industry, and making ues of the double roles of main owner in Shuibei area and majority
investor of industrial project, play a leading part in project of industrial park. Actively to lead the coordination of
vary body, promote the scientific planning and quality of Shuibei Jewerly Industry, to enhance the
company's asset quality and profitability



V. Investment analysis

1. Equity investment outside

(1) Investment outside

□ Applicable √ Not applicable
The Company has no investment outside in the Period


(2) Holding equity of financial enterprise

□ Applicable √ Not applicable
The Company has no equity of financial enterprise held in the Period


(3) Securities investment

□ Applicable √ Not applicable
The Company has no securities investment in the Period


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                                                                             深圳市特力(集团)股份有限公司 2014 年半年度报告全文


2. Trust financing, investment of derivatives and entrustment loan

(1) Trust financing

□ Applicable √ Not applicable
The Company has no trust financing in the Period


(2) Investment of derivatives
□ Applicable √ Not applicable
The Company has no derivatives investment in the Period



(3) Entrustment loan
□ Applicable √ Not applicable
The Company has no entrustment loan in the Period




3. Application of raised proceeds

(1)Overall application of raised proceeds

□ Applicable √ Not applicable


(2) Situation of committed project of raised proceeds

□ Applicable √ Not applicable


(3)The changed project of raised proceeds

□ Applicable √ Not applicable
The Company has no project of raised proceeds changed in the Period


(4) Project of raised proceeds


  Project of raised proceeds and summary                      Disclosure date                           Disclosure index


4. Main subsidiaries and joint-stock companies analysis

√ Applicable □ Not applicable
Main subsidiaries and joint-stock companies
                                                                                                                                In RMB

                                  Industry     Main        Registered                             Operation Operation
   Name           Type                                                  Total assets Net assets                            Net profit
                                  involved   products or    capital                               revenue     profit



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                                                                        深圳市特力(集团)股份有限公司 2014 年半年度报告全文


                                             service

                                        Self-owned
Shenzhen                                property
Auto                                    leasing,
                                               RMB 58.96 311,500,37 226,034,06 8,418,423.1 3,771,748
Industry      Subsidiary   Commerce automobile                                                       3,212,576.33
                                               million         2.56       3.86           5       .35
and Trade                           and
Corporation                             accessories
                                        selling

                                        Automobile
Shenzhen
                                        maintenanc
SD Huari
                             Service    e&             US$ 5        74,373,866. 37,877,258. 21,158,993. -4,595,15
Automobile Subsidiary                                                                                                 -4,426,761.95
                                        production million                  55          18          78         7.73
Enterprise                   industry
                                        and sales of
Co.
                                        accessory

Shenzhen
Zhongtian                  Service      Property       RMB 7.25     148,542,36 21,399,951.                199,823.3
              Subsidiary                                                                     488,671.10                 127,278.18
Industrial                 industry     leasing         million           5.14          46                       0
Co., Ltd.

Shenzhen
Huari
Toyota                                  Automobile RMB 2            69,004,837. -10,483,587 170,529,36 2,002,553
              Subsidiary   Commerce                                                                                   2,100,440.32
Automobile                              selling        million              96         .67         2.05         .80
Sales Co.
Ltd

                                        Production
Shenzhen                                of
New                                     inspection
Yongtong                                equipment
                           Service                     RMB 19.      14,177,894. 1,919,739.5 1,800,981.6 557,070.3
Automobile Subsidiary                   for auto                                                                        419,070.33
                           industry                    61 million           40           7           0           3
Inspection                              vehicles,
Equipment                               self-owned
Co. Ltd                                 property
                                        leasing

                                        Inspection
                                        and
Shenzhen
                                        maintenanc
Tellus New
                                        e of auto
Yongtong                   Service                     RMB 32.90 83,119,690. 44,270,331. 7,023,521.6 742,735.2
              Subsidiary                vehicle,                                                                        742,505.81
Automobile                 industry                    million              42          02           9           2
                                        property
Developme
                                        managemen
nt Co. Ltd
                                        t, house
                                        lease



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                                                                                   深圳市特力(集团)股份有限公司 2014 年半年度报告全文


Shenzhen
                                                Self-owned
SD Tellus                       Manufactur                     RMB 31.15 29,199,687. 12,592,974.                           -133,630.
               Subsidiary                       property                                                            0.00               -133,630.99
Real Estate                     e                              million                 28             88                         99
                                                leasing
Co. Ltd

Shenzhen
SD Tellus                                       Property
                                Service                        RMB 7.05       28,407,428. 11,065,242. 17,326,700. -237,599.
Property       Subsidiary                       managemen                                                                              -230,290.71
                                industry                       million                 57             60             63          41
Managemen                                       t
t Co. Ltd

Shenzhen
Tellus Real                                     Agency of
                                Service                        RMB 2          2,664,525.8 2,507,657.1                      -12,597.3
Estate         Subsidiary                       real estate                                                 213,547.00                   -12,597.36
                                industry                       million                  8              3                          6
Exchange                                        exchange
Co. Ltd

Shenzhen
                                                Sales of
Zung Fu
               Joint-stock      Service         auto and       RMB 30         428,934,21 218,590,39 706,759,01 24,933,74 18,521,442.7
Tellus Auto
               company          industry        maintenanc million                   9.71            5.45           7.70       4.94              4
Service Co.,
                                                e
Ltd.

                                                Auto
Shenzhen
                                                manufacturi
Dongfeng       Joint-stock      Manufactur                     RMB 100        556,126,42 135,640,69 104,332,33 4,799,317
                                                ng and                                                                                 6,013,464.08
Auto Co.,      company          e                              million               7.18            0.09           8.01         .99
                                                maintenanc
Ltd.
                                                e

Shenzhen
                                                Mould
Xinglong                                                       RMB
               Joint-stock      Manufactur processing                         256,020,99 64,979,136.
Machinery                                                      27.6333                                              0.00       0.00            0.00
               company          e               and                                  3.74             82
Mould Co.,                                                     million
                                                exportation
Ltd.


5. Major project invested by non-raised funds

√ Applicable □ Not applicable
                                                                                                                            In ten thousand Yuan

                                                                              Amount invested
                             Total investment         Amount invested in
         Project                                                             accumulative till end          Progress               Earnings
                                 planned                   this period
                                                                              of reporting period

Tellus Shuibei
jewelry Building                           41,364                 9,549.69              13,713.89                   33.15%
(Phase I)

Total                                      41,364                 9,549.69              13,713.89              --                       --



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VI. Prediction of business performance from January – September 2014

Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the
warning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable √ Not applicable



VII. Explanation from the Board and Supervisory Committee for “Qualified Opinion” from
the CPA of this year’s
□ Applicable √ Not applicable


VIII. Explanation on “Qualified Opinion” of previous year from the Board

□ Applicable √ Not applicable


IX. Implementation of profit distribution in reporting period

Implementation or adjustment of profit distribution plan in reporting period, cash dividend plan and shares converted from capital
reserve in particular
□ Applicable √ Not applicable
Previous year’s profit distribution plan was no profit distribution and shares converted from capital reserve either


X. Profit distribution and capitalization of capital reserves in the Period

□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the semi-annual year


XI. In the report period, reception of research, communication and interview

□ Applicable √ Not applicable
The Company has no reception of research, communication and interview occurred in the Period




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                                       Section V. Important Events

I. Corporate governance

During the reporting period, the Company has been observing the Company Law, Securities Law and relevant
rules issued by the CSRC, for the purpose of improving its legal person governance structure and standardizing its
operation level. According to the Articles of Association, Procedure Rules of General Meeting, Procedure Rules of
Board of Directors, Procedure Rules of Supervisory Committee, Working Rules of Independent Directors,
Working Rules of General Manager and a series of rules and regulations, the Company maintained normal
performance of the duties and obligations of its general meeting, board of directors and supervisory committee.
Each of its directors and supervisors can perform their duties earnestly.

In reporting period, the Company, in line with requirement of internal control, formulated ―Management
Measures of Raise Funds‖ combine with actual condition of the Company and revised the ―Article of
Association‖.

In 30 days before periodic report released, 10 days before performance prediction and express report disclosed
and in other major events public, board of the Company, supervisory committee, senior executives and other
insider information informed staff exercise self-examination in aspect of the stocks trading in senstive period, no
relevant personnel engage in securities trading activities using inside information been found.

Controlling shareholder of the Company has a norms behavior without beyond the general meeting to setp in the
decision-making and operation activity of the Company directly/indirectly, and has no violation of capital
occupation of the Company either, the Company strictly perform its decision-making procedures and disclosed the
information timely.


During reporting period, in strict accordance with relevant requirement of ―Rules of Stocks Listing in Shenzhen
Stock Exchange‖ and ―Guide of Fair Information Disclosure for Listed Company‖as well as normative documents,
by earnestly following the principle of ―fairly, openly and equitably‖, the Company perform its information
disclosure obligation seriously and timely;    furthermore, asuring the reality, accuracy and completion for the
whole contents of the information disclosed, no fictitious statement, misleading statement or important
ommissions been found either, whole of the sharehodles are equally to share the all information of the Company.
Presently, the actual condition of the corporate governance shows no difference with the Company Law and
relevant requriement from CSRC.



II. Significant lawsuits and arbitrations of the Company

□ Applicable √ Not applicable
The Company has no significant lawsuits and arbitrations in reporting period




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III. Question from media

□ Applicable √ Not applicable
No universal questioned by media in reporting period


IV. Bankruptcy reorganization

□ Applicable √ Not applicable
In reporting period, the Company has no bankruptcy reorganization occurred.


V. Transaction in assets

1. Assets acquisition

□ Applicable √ Not applicable
The Company did not purchased assets in the Period


2. Sales of assets

□ Applicable √ Not applicable
The Company did not sell assets in the Period


3. Business combination

□ Applicable √ Not applicable
The Company has no business combined in the Period



VI. Implementation of the company’s equity incentive and the effects
□ Applicable √ Not applicable
No equity incentive in reporting period


VII. Significant related transaction

1. Related transaction routine operations concerned

□ Applicable √ Not applicable
The Company has no related transaction with routine operations concerned occurred in the Period
2. Related transaction incurred by purchase or sales of assets
□ Applicable √ Not applicable
No related transaction incurred by purchase or sales of assets in Period
3. Related transaction from jointly investment outside
□ Applicable √ Not applicable
No related transaction from jointly investment outside occurred in Period


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4. Credits and liability of related party
√ Applicable □ Not applicable
Whether have non-operation related liabilities and credits relations or not
√ Yes   □ No

                                                                              Majority
                                                                         shareholder’s    Opening         Amount in             Closing
                                           Credit and                    non-business balance (in 10       Period    (in       balance    (in
       Related party      Relationship                      Causes
                                                 debt                          capital     thousand        10 thousand         10 thousand
                                                                              occupying     Yuan)            Yuan)                Yuan)
                                                                               (Y/N)

                                         Debt payable
Shenzhen SDG Co.,        Parent                         Long-term
                                         to related                     N                         7,300                    0             7,300
Ltd.                     company                        loans
                                         party

                                         Debt payable
Shenzhen SDG Co.,        Parent                         Accounts
                                         to related                     N                        5,385.8        -296.26            5,682.05
Ltd.                     company                        current
                                         party

                                         Debt payable
Shenzhen SDG Co.,        Parent                         Short-term
                                         to related                     N                    1,895.24                1.11          1,894.13
Ltd.                     company                        loans
                                         party


5. Other significant related transactions

□ Applicable √ Not applicable
The Company had no other significant related transactions in the reporting period


VIII. Non-business capital occupying by controlling shareholders and its related parties

□ Applicable √ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period


IX. Major contract and implantation

1. Trusteeship, contract and leasing

(1) Trusteeship

□ Applicable √ Not applicable
The Company had no trusteeship in the reporting period.


 (2) Contract

□ Applicable √ Not applicable


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                                                                           深圳市特力(集团)股份有限公司 2014 年半年度报告全文


The Company had no contract in the reporting period.


(3) Leasing

□ Applicable √ Not applicable
The Company had no leasing in the reporting period.


2. Guarantee

√ Applicable □ Not applicable
                                                                                                                   In ten thousand Yuan

                   Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
                           Related                Actual date of
                                                                                                                  Complete Guarante
                         Announcem                 happening
   Name of the                       Guarantee                       Actual            Guarantee        Guarantee implemen    e for
                              ent                   (Date of
Company guaranteed                     limit                     guarantee limit         type             term     tation or related
                          disclosure                 signing
                                                                                                                      not     party
                             date                  agreement)
                                           Guarantee of the Company for the subsidiaries
                     Related                      Actual date of
                                                                                                                  Complete Guarante
                   Announcem                       happening
   Name of the                 Guarantee                             Actual            Guarantee        Guarantee implemen    e for
                        ent                         (Date of
Company guaranteed               limit                           guarantee limit         type             term     tation or related
                    disclosure                       signing
                                                                                                                      not     party
                       date                        agreement)
Shenzhen Zhongtian                                                                   Joint liability
                         2014-03-20       4,140                              4,140                     2.5 years    No        Yes
Industrial Co., Ltd.                                                                 guaranty

Shenzhen Zhongtian                                                                   Joint liability
                         2014-05-08      30,000                             30,000                     10 years     No        Yes
Industrial Co., Ltd.                                                                 guaranty

Shenzhen Auto
Industry and Trade       2014-04-25       6,000                              6,000 Pledged             12 months    No        Yes
Corporation

                                                                   Total amount of actual
Total amount of approving
                                                                   occurred guarantee for
guarantee for subsidiaries in                             40,140                                                                 40,140
                                                                   subsidiaries in report period
report period (B1)
                                                                   (B2)

                                                                   Total balance of actual
Total amount of approved
                                                                   guarantee for subsidiaries at
guarantee for subsidiaries at the                         40,140                                                                 40,140
                                                                   the end of reporting period
end of reporting period (B3)
                                                                   (B4)

Total amount of guarantee of the Company( total two abovementioned guarantee)
Total amount          of approving                               Total amount of              actual
guarantee in         report period                        40,140 occurred guarantee in        report                             40,140
(A1+B1)                                                          period (A2+B2)
Total amount           of approved                               Total balance of             actual
guarantee at the       end of report                      40,140 guarantee at the end of      report                             40,140
period (A3+B3)                                                   period (A4+B4)
The proportion of the total amount of actually guarantee in the
                                                                                                                               204.10%
net assets of the Company(A4+ B4)


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                                                                          深圳市特力(集团)股份有限公司 2014 年半年度报告全文


Including:

Amount of guarantee for shareholders, actual controller and its
                                                                                                                               0
related parties(C)

The debts guarantee amount provided for the guaranteed parties
                                                                                                                          34,140
whose assets-liability ratio exceed 70% directly or indirectly(D)

Proportion of total amount of guarantee in net assets of the
                                                                                                                          30,000
Company exceed 50%(E)

Explanation on guarantee with composite way


(1) Guarantee outside against the regulation

□ Applicable √ Not applicable
No guarantee outside against the regulation in Period


3. Other material contracts
□ Applicable √ Not applicable
The Company had no other material contracts in the reporting period.




4. Other material transactions

□ Applicable √ Not applicable
The Company had no other material transactions in the reporting period.


X. Commitments made by the Company or shareholders holding above 5% shares of the
Company in reporting period or occurred in the previous reporting period but continued to
reporting period
√ Applicable □ Not applicable

                                                                                         Commitment Commitment
  Commitments        Accepter                           Contents                                                    Implementation
                                                                                              time         period
                                (I) Commitments during the work of Share Merger
                                Reform of the Company:
                                1. Commitments on Lock-up period
                                (1) In accordance with the Measures for the
                                Administration of the Share Merger Reform of Listed
                                Companies, SDG would abide by the various laws,
                                regulations and rules, and perform its statutory
Commitments for                 commitment duty.
Share Merger                    (2) Apart from the above-mentioned statutory
                     SDG                                                                   2005-12-25   Long-term   Implementing
                                commitment, SDG also made the following special
Reform                          commitment: with 36 months since the day the reform
                                plan starts to take effect, SDG would not list at Shenzhen
                                Stock Exchange and sell the shares of Tellus it held
                                (except for the shares used to promote the administration
                                level of Tellus).
                                (3) The administration level would abide by the laws,
                                regulations and rules, and perform its statutory
                                commitment duty.


                                                                                                                               22
                                                              深圳市特力(集团)股份有限公司 2014 年半年度报告全文


                       (4) SDG made the commitment: ―The Promiser hereby
                       promises that, if the Promiser failed to fulfill its
                       commitment or not fully fulfill its commitment, it would
                       compensate other shareholders for their losses suffered
                       thereafter‖.
                       (5) SDG declared: ―The Promiser would dutifully fulfill
                       its commitments and shoulder corresponding legal
                       responsibilities. The Promiser would transfer the shares
                       held by it only if the assignee agree and have the ability to
                       shoulder the commitment responsibility.‖
                       2. Special commitment concerning the incentive
                       mechanism
                       In order to effectively boost the core management level
                       and business backbones for long, SDG would take out its
                       shares, not exceeding 10% in total number after the Share
                       Merger Reform, and apply them to the boost of the
                       administration level. The shares would be sold to the
                       Company’s administrative level over 3 years, with the
                       selling price being the net asset value per share audited
                       during the period nearest to the implementation. Before
                       the implementation of the promoting plan by share selling
                       each year, the administration level must prepay the
                       Company a risk responsibility fund, i.e. 20% of the
                       planned selling price; Should the work of the performance
                       examination set by the Board failed to be finished, the
                       paid risk responsibility fund would not be refunded and
                       shall be owned by the Company. Detailed rules
                       concerning the limitations on the administration level,
                       such as the subscription conditions and risk responsibility
                       fund, and boost plans would be set by the Board and
                       submitted to relevant departments for approval. The
                       implementation of the shares for promoting would be
                       conducted strictly according to relevant laws and
                       regulations, and the circulation conditions of these shares
                       would be in conformity with relevant regulations set by
                       the Shenzhen Stock Exchange.
                       3. Relevant expenses of this Share Merger Reform of
                       Tellus would be paid by SDG.
                       Controlling shareholder of the Company SDG has special
                       commitment of incentive mechanism in the Company’s
                       split-share reform. Later, SASAC and Ministry of Finance
                       jointly issued the Trial Procedures of Stock Option
                       Incentive Implemented By State-Holding Listed
                       Companies and CSRC published the Regulation of Stock
                       Option Incentive for Listed Companies (Trial), after
                       checking the documents, the above mentioned
                       commitment made by SDG fails to satisfy relevant
                       requirements in the document, relevant commitment not
                 SDG   implemented temporary. The Company actively negotiate 2014-06-26   2016-06-30   Implementing
                       with the SDG with the matters concerned, on 26 June
                       2014, on the premise of relevant laws, regulations and
                       requirement of authority satisfied, SDG will continues to
                       support the Company implement a long-acting incentive
                       plan as soon as possible instead of stock option incentive
                       commitment made in share merger reform and complete
                       the construction of long-acting incentive mechanism
                       before 30 June 2016. The long-acting incentive plan will
                       implement after submit for approval in General Meeting
                       of the Company at the scheduled time.
Commitments in
report of
acquisition or
equity change




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                                                                        深圳市特力(集团)股份有限公司 2014 年半年度报告全文


Commitments in
assets replacement

Commitments
make in Initial
public offering or
re-financing

Other
commitments for
medium and small
shareholders

Completed on
                     Y
time(Y/N)




XI. Engagement and non-reappointment of CPA
Whether the semi-annual report was audited or not
□ Yes   √ No




XII. Penalty and rectification

□ Applicable √ Not applicable
The Company had no penalty or rectification in the reporting period.




XIII. Risk disclosure of delisting with laws and rules violated

□ Applicable √ Not applicable
The Company has no delisting risks with laws and rules violated in Period


XIV. Explanation on other significant events

□ Applicable √ Not applicable
The Company had no explanation on other significant events in the reporting period.




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                                                                            深圳市特力(集团)股份有限公司 2014 年半年度报告全文



    Section VI. Changes in Shares and Particulars about Shareholders

I. Changes in shares

                                                                                                                                  In share

                                    Before change               Increase/decrease in this time (+ , - )                 After change

                                                                             Capitalizat
                                                                    Bonus       ion of
                                 Amount       Ratio     New issue                           Other         Subtotal   Amount      Ratio
                                                                    share       public
                                                                               reserve

                                 14,587,05                                                                           14,587,05
I. Restricted shares                           6.62%                                                                              6.62%
                                          6                                                                                 6

2. State-owned corporation 14,587,05                                                                                 14,587,05
                                               6.62%                                                                              6.62%
shares                                    6                                                                                 6

                                 205,694,5                                                                           205,694,5
II. Un-restricted shares                      93.38%                                                                             93.38%
                                        44                                                                                 44

                                 179,294,5                                                                           179,294,5
1. RMB ordinary shares                        81.39%                                                                             81.39%
                                        44                                                                                 44

2. Domestically listed           26,400,00                                                                           26,400,00
                                               11.98%                                                                             11.98%
foreign shares                            0                                                                                 0

                                 220,281,6                                                                           220,281,6
III. Total shares                             100.00%                                                                            100.00%
                                        00                                                                                 00

Reasons for share changed
□ Applicable       √ Not applicable
Approval of share changed
□ Applicable       √ Not applicable
Ownership transfer of share changes
□ Applicable       √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable       √ Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable       √ Not applicable
Explanation on changes in aspect of total shares, shareholders structures as well as structure of assets and liability of the Company
□ Applicable       √ Not applicable


II. Number of shares and shares held

                                                                                                                                  In Share



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                                                                              深圳市特力(集团)股份有限公司 2014 年半年度报告全文


                                                                       Total preference shareholders
                                                                       with voting rights recovered at
Total shareholders at period-end                              16,818                                                                     0
                                                                       end of reporting period (if
                                                                       applicable) (see Note 8)

                            Particulars about shares held above 5% by shareholders or top ten shareholders

                                                                                                   Amount         Number of shares
                                                                                       Amount
                                                                Total                                 of            pledged/frozen
                                                                             Changes      of
  Full name of           Nature of          Proportion of   shareholders                           unrestri
                                                                             in report restricte
  Shareholders          shareholder          shares held at     the end of                           cted
                                                                              period d shares                 State of share    Amount
                                                            report period                          shares
                                                                                         held
                                                                                                     held

SHENZHEN           State-owned                                                          14,587, 131,283
                                                   66.22%     145,870,560 0
SDG CO., LTD.      corporation                                                              056        ,504

Guoyuan
Securities                                                                   -172,75
                   Foreign corporation              0.94%       2,075,600
Brokerage (HK)                                                               5
Co., Ltd.

                   Domestic nature                                           1,398,2
Zhang Yimei                                         0.63%       1,398,200
                   person                                                    00

                   Domestic nature
Fang Jinsong                                        0.32%        706,645 706,645
                   person

                   Domestic nature
Jiang Youhua                                        0.30%        650,838 650,838
                   person

FISRT
SHANGHAI                                                                     -266,47
                   Foreign corporation              0.27%        601,907
SECURITIES                                                                   0
LTD.

                   Domestic nature
Chen Jiansheng                                      0.27%        600,050 600,050
                   person

                   Domestic nature
Chen Shufen                                         0.24%        522,490 372,490
                   person

                   Domestic nature
Lin Fengyuan                                        0.24%        520,358 3,200
                   person

                   State-owned
CMS (HK)                                            0.24%        520,020 371,721
                   corporation

Strategy investors or general corporate
becomes top 10 shareholders due to          N/A
rights issued (if applicable)(see Note 3)

Explanation on associated relationship Among the top ten shareholders, there exists no associated relationship between the
among the aforesaid shareholders            state-owned legal person’s shareholders Shenzhen SDG Co., Ltd and other shareholders,


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                                                                          深圳市特力(集团)股份有限公司 2014 年半年度报告全文


                                          and they do not belong to the consistent actionist regulated by the Management Measure of
                                          Information Disclosure on Change of Shareholding for Listed Companies. For the other
                                          shareholders of circulation share, the Company is unknown whether they belong to the
                                          consistent actionist.

                                  Particular about top ten shareholders with un-restrict shares held

                                                                                                             Type of shares
            Shareholders’ name             Amount of unrestricted shares held at period-end
                                                                                                          Type           Amount

                                                                                                 RMB ordinary
SHENZHEN SDG CO., LTD.                                                            131,283,504                            131,283,504
                                                                                                 shares

                                                                                                 Domestically
Guoyuan Securities Brokerage (HK)
                                                                                     2,075,600 listed foreign                 2,075,600
Co., Ltd.
                                                                                                 shares

                                                                                                 RMB ordinary
Zhang Yimei                                                                          1,398,200                                1,398,200
                                                                                                 shares

                                                                                                 RMB ordinary
Fang Jinsong                                                                           706,645                                 706,645
                                                                                                 shares

                                                                                                 RMB ordinary
Jiang Youhua                                                                           650,838                                 650,838
                                                                                                 shares

                                                                                                 Domestically
FISRT SHANGHAI SECURITIES
                                                                                       601,907 listed foreign                  601,907
LTD.
                                                                                                 shares

                                                                                                 RMB ordinary
Chen Jiansheng                                                                         600,050                                 600,050
                                                                                                 shares

                                                                                                 RMB ordinary
Chen Shufen                                                                            522,490                                 522,490
                                                                                                 shares

                                                                                                 Domestically
Lin Fengyuan                                                                           520,358 listed foreign                  520,358
                                                                                                 shares

                                                                                                 Domestically
CMS (HK)                                                                               520,020 listed foreign                  520,020
                                                                                                 shares

                                          Among the top ten shareholders, there exists no associated relationship between the
Expiation on associated relationship or
                                          state-owned legal person’s shareholders Shenzhen SDG Co., Ltd and other shareholders,
consistent actors within the top 10
                                          and they do not belong to the consistent actionist regulated by the Management Measure of
un-restrict shareholders and between
                                          Information Disclosure on Change of Shareholding for Listed Companies. For the other
top 10 un-restrict shareholders and top
                                          shareholders of circulation share, the Company is unknown whether they belong to the
10 shareholders
                                          consistent actionist.

Explanation on shareholders involving
margin business (if applicable)(see       N/A
note 4)


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Whether has a buy-back agreement dealing in reporting period
□Yes √No
The shareholders o f the Company had no buy-back agreement dealing in reporting period.


III. Changes of controlling shareholders or actual controller

Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
Changes of controlling shareholders had no change in reporting period.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
Changes of actual controller in reporting period had no change in reporting period.

IV. Share holding increasing plan proposed or implemented in reporting period from
shareholder of the Company and its concerted action person

□ Applicable   √Not applicable
As far as the Company know, there are no share holding increasing plan proposed or implemented in Period from shareholder of the
Company and its concerted action person




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                                  Section VII. Preferred Stock

I. Issuance and listing of preferred stock in Period

□ Applicable √ Not applicable


II. Number of shareholders with preferred stock held and shareholdings

□ Applicable √ Not applicable


III. Repurchase and conversion of preferred stock

1. Preferred stock repurchased

□ Applicable √ Not applicable


2. Preferred stock converted

□ Applicable √ Not applicable


IV. Preferred stock with voting rights recovered and executed

□ Applicable √ Not applicable


V. Accounting policy taken for preferred stock and reasons

□ Applicable √ Not applicable




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                                                                        深圳市特力(集团)股份有限公司 2014 年半年度报告全文



                 Section VIII. Directors, Supervisors and Senior Executives

I. Changes of shares held by directors, supervisors and senior executives

□ Applicable    √ Not applicable
Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report
2013.


II. Resignation and dismissal of directors, supervisors and senior executives

√ Applicable □ Not applicable

        Name             Title              Type             Date                                 Reason

Zhang Ruili        Chairman           Office leaving   2014-04-08        Resignation due to the work change

Zhang Jianmin      Director           Office leaving   2014-04-22        Resignation due to the work change

Lv Hang            Chairman           Be elected       2014-04-08        Be elected

Li Miao            Director           Be elected       2014-05-15        Be elected

                   Deputy General
Guo Jian                              Office leaving   2014-04-08        Resignation due to the work change
                   Manager

                   Secretary of the
Guo Dongri         Board, Deputy      Office leaving   2014-06-30        Resignation due to personal reason
                   GM




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                                        Section IX. Financial Report


I. Audit reports

Whether the semi-annual report was audited or not
□ Yes √ No
The financial report of this semi-annual report was unaudited


II. Financial statements

Units in Notes of Financial Statements is RMB




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                                      Consolidated Balance Sheet
                                                 2014年6月30日
Prepared by Shenzhen Tellus Holding Co., Ltd                                                      In RMB/CNY
             Assets                Note VII Balance at period-end                  Balance at year-begin
Current assets:
    Monetary funds                         1                       57,106,710.45                    69,898,791.56
    Transactional financial assets                                           -                                -
    Notes receivable                                                         -                                -
    Accounts receivable                    2                        4,510,326.96                     5,016,738.78
    Prepayment                             4                       10,291,564.10                     8,309,574.73
    Dividend receivable                                                      -                                -
    Other accounts receivable              3                       10,256,908.59                     8,028,356.69
    Inventories                            5                       43,766,660.19                    62,826,365.70
  Non-current asset due in 1 year                                          -                                -
    Other current assets                   6                        8,572,421.19                    11,644,102.02
    Total of current asset                                        134,504,591.48                   165,723,929.48
Non-current assets:
    Financial asset available for sale      7                       1,391,820.80                     1,480,168.80
    Expired investment in possess           8                         100,000.00                       100,000.00
    Long-term receivable                    9                                -                                -
    Long-term equity investment            10                     209,715,062.73                   201,873,586.75
    Investment real estate                 11                      86,137,027.37                    88,422,673.91
    Fixed asset                            12                     145,959,235.73                   149,968,663.80
    Construction in process                13                      85,849,620.32                    41,642,020.40
    Engineering goods                                                        -                                -
    Fixed asset disposal                                                     -                                -
    Production biological asset                                              -                                -
    Intangible assets                      14                      52,873,743.56                        33,255.04
    R&D expense                                                              -                                -
    Goodwill                                                                 -                                -
    Long-term amortizable expenses         15                         670,703.75                       848,038.96
    Deferred income tax assets             16                      24,556,131.41                    24,566,702.71
    Other non-current asset                17                                -                      26,339,112.00
    Total of non-current assets                                   607,253,345.67                   535,274,222.37


    Total assets                                                   741,757,937.15                   700,998,151.85
               The notes to the Financial Statement are essential parts of the Financial Statements




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                                                                     深圳市特力(集团)股份有限公司 2014 年半年度报告全文


                                   Consolidated Balance Sheet(Con't)
                                                          2014年6月30日
Prepared by Shenzhen Tellus Holding Co., Ltd                                                             In RMB/CNY
           Liability and owners' euqity                   Note VII   Amount at period-end      Balance at year-begin
Current liability:
     Short-term loans                                       20               182,741,296.00                110,969,952.93
     Transactional financial liability                                                  -                              -
     Notes payable                                          21                 6,225,651.90                 15,920,748.09
     Accounts payable                                       22                22,062,234.53                 22,008,010.24
     Accounts receivable in advance                         23                 2,228,640.04                 22,087,866.51
     Wage payable                                           24                12,688,086.44                 14,408,687.62
     Taxes payable                                          25                 9,175,574.79                 16,687,262.22
     Dividend payable                                       26                          -
     Interest payable                                                                   -                              -
     Other account payable                                  27               115,698,361.82                107,809,585.66
  Non-current liability due within 1 year                 28                12,000,000.00                 12,000,000.00
  Other current liability                                                               -                              -
 Total of current liability                                                  362,819,845.52                321,892,113.27
Non-current liability:
     Long-term loans                                        29               125,000,000.00                131,000,000.00
     Bonds payable                                                                      -                              -
     Long-term payable                                      30                13,319,681.59                 13,319,681.59
     Special accounts payable                                                           -                              -
     Projected liabilities                                                              -                              -
     Deferred income tax liability                          16                 1,102,701.09                  1,248,087.86
     Other non-current liability                                              31,211,904.55                 29,823,013.37
 Total non-current liability                                                 170,634,287.23               175,390,782.82
 Total liability                                                             533,454,132.75               497,282,896.09
Owners' equity:
     Share capital                                          31               220,281,600.00                220,281,600.00
     Capital public reserve                                 32                 8,442,270.18                  8,508,531.18
     Surplus public reserve                                 33                 2,952,586.32                  2,952,586.32
     Retained profit                                        34                -35,010,339.41               -40,390,760.22
     Total owner's equity attibutable to parent company                      196,666,117.09                191,351,957.28
     Minority interests                                                       11,637,687.31                 12,363,298.48
 Total of owners' equity                                                     208,303,804.40               203,715,255.76
 Total liabilities & owner's equity                                          741,757,937.15                700,998,151.85
                (The Notes to the Financial Statements are essential parts of the Finanical Statements)




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                                                                          深圳市特力(集团)股份有限公司 2014 年半年度报告全文


                                        Consolidated Profit Statement
                                                          Jan.- June 2014
Prepared by Shenzhen Tellus Holding Co., Ltd                                                                In RMB/CNY
                               Items                                   Note VII Amount at this period   Amount at last year

I. Operation revenue                                                      35           228,692,541.86        222,087,318.26
     Less: Operation cost                                                 35           195,298,141.59        183,087,649.86
       Business tax and surcharge                                       36             2,463,848.35          2,876,878.04
         Sales expense                                                   37             9,182,022.30          9,442,375.29
       Administrative expense                                            38            16,192,019.27         17,906,667.35
       Financial expense                                                39             8,229,163.34          7,790,082.78
      Asset impairment loss                                              41                35,599.18            100,000.00
     Plus:Income from change of fair value(loss is listed with"-")                                -                     -
       Investment income(loss is listed with"-")                       40             7,841,475.98          1,780,082.57
        Incl: Investment income from affiliated enterprises and joint venture           7,841,475.98          1,707,144.32
II.Operation profit(loss is listed with"-")                                              5,133,223.81          2,663,747.51
     Plus:Non-operation income                                            42               225,251.91            222,561.76
     Less: Non-operation expenses                                         43                 2,633.01             23,753.00
       Incl: Loss from disposal of non-current assets                                                           14,002.00
III.Total profit(loss is listed with"-")                                                 5,355,842.71          2,862,556.27
     Less: Income tax expenses                                            44               701,033.07            195,375.12
IV.Net profit(loss is listed with"-")                                                    4,654,809.64           2,667,181.15
     Net profit attributable to owners' of patrent company                               5,380,420.81          3,746,434.89
     Minor shareholders' equity                                                           -725,611.17          -1,079,253.74
V.Earning per share

     (I) Basic earnings per share                                         45                   0.0244                0.0170
     (II) Diluted earnings per share                                      45                   0.0244                0.0170
VI.Other consolidated income                                              46               -66,261.00           -248,916.25
VII.Total consolidated income                                                            4,588,548.64          2,418,264.90
     Total consolidated income attributable to owners of parent company                  5,314,159.81          3,497,518.64
     Total consolidated income attributable to minority shareholders                      -725,611.17          -1,079,253.74
                (The Notes to the Financial Statements are essential parts of the Finanical Statements)




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                                                                                       深圳市特力(集团)股份有限公司 2014 年半年度报告全文


                                     Consolidated Cash Flow Statement
                                                                Jan.- June 2014
Prepared by Shenzhen Tellus Holding Co., Ltd                                                                                  In RMB/CNY
                                 Items                                      Note VII         Amount at this period        Amount at last year
I. Cash flow from operating activities
     Cash received from sales of goods and labor service provided                                  253,756,652.24              239,638,243.75
     Taxes surrender received                                                                                  -                          -
     Other cash received from business activities                                 47                25,759,770.67               50,668,321.35
          Sub-total of cash inflow from business activities                                        279,516,422.91              290,306,565.10
     Cash paid for purchasing of merchandise and services                                          211,397,194.39              170,877,477.84
     Cash paid to/for staff                                                                         25,369,986.36               24,622,802.05
     Taxes paid                                                                                     16,810,604.28               17,252,571.19
     Other Cash paid for business activities                                      47                30,123,949.84               41,255,251.65
          Subtotal of cash outflow from business activities                                        283,701,734.87              254,008,102.73
          Net cash flow generated from business activities                                           -4,185,311.96              36,298,462.37
II. Cash flow from investment activities
     Cash received from investment retrieving                                                                    -                   84,713.03
     Cash received as investment gains                                                                           -                   72,938.25
     Net cash received from disposal of fixed, intangible assets and
                                                                                                          40,740.00              32,257,058.00
     other long-term assets
     Net cash received from disposal of subsidiaries or other operational units                                -                          -
     Other investmenr-related cash received                                       47                           -                          -
        Subtotal of cash inflow due to investment activities                                             40,740.00              32,414,709.28
     Cash paid for construction of fixed assets, intangible assets and
                                                                                                     70,244,698.22                9,185,642.58
     other long-term assets
     Cash paid as investment                                                                                  -                   9,900,000.00
     Net cash received from subsidiaries and other opeartional units                                          -                            -
     Other cash paid for investment activities                                    47                          -                     384,657.57
        Subtotal of cash outflow due to investment activitie                                        70,244,698.22                19,470,300.15
              Net cash flow generated from investment                                              -70,203,958.22                12,944,409.13
III. Cash flow generated by financing
     Cash received as investment absorption                                                                   -                            -
     Including: Cash received as investment from minor shareholders by subsidiary                             -                            -
     Cash received as loans                                                                        226,000,000.00               41,600,000.00
     Other financing-related cash received                                                                    -                            -
          Subtotal of cash inflow from financing activities                                        226,000,000.00               41,600,000.00
     Cash paid to debts                                                                            154,000,000.00               59,600,000.00
     Cash paid as dividend, profit or interests                                                      4,916,300.92                6,127,599.58
     Including: Dividend and profit paid by subsidiaries to minor shareholders                                -                            -
     Other cash paid for financing activities                                     47                          -                     20,000.00
         Subtotal of cash outflow from financing activities                                        158,916,300.92               65,747,599.58
           Net cash flow generated by financing activities                                          67,083,699.08              -24,147,599.58
IV. Influence of exchange rate alternation on cash and cash equivalents                                    703.07                    -2,190.81
V. Net increase of cash and cash equivalents                                                        -7,304,868.03               25,093,081.11
     Plus: Balance of cash and cash equivalents at the beginning of term                            63,166,448.10               55,145,531.39
VI. Balance of cash and cash equivalents at the end of term                                         55,861,580.07               80,238,612.50
                              (The Notes to the Financial Statements are essential parts of the Finanical Statements)




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                                                                                                                                                                                                                              深圳市特力(集团)股份有限公司 2014 年半年度报告全文

                                                                                       Consolidated Statement on Changes of Owners' Equity
                                                                                                                                             Semi-annual of 2014
   Prepared by Shenzhen Tellus Holding Co., Ltd                                                                                                                                                                                                                  In RMB/CNY
                                                                                                    Current amount                                                                                                                  Amount of last year
                     Items                                      Owners' equity attibutable to parent company                      Minor shareholders'                                          Owners' equity attibutable to parent company                        Minor shareholders'
                                                                                                                                                        Total owners' equity                                                                                                             Total owners' equity
                                                Share capital       Capital reserves     Surplus reserves       Retained profit        equity                                  Share capital    Capital reserves       Surplus reserves        Retained profit          equity

   I.Balance at the end of last year          220,281,600.00        8,508,531.18         2,952,586.32 -40,390,760.22 12,363,298.48 203,715,255.76 220,281,600.00                                8,732,694.55           2,952,586.32           -47,291,479.26        16,386,114.63         201,061,516.24
   Plus:Change of accounting policy                      -                   -                    -              -             -              -              -                                           -                      -                        -                    -                      -
        Correcting of previous errors                    -                   -                    -              -             -              -              -                                           -                      -                        -                    -                      -
   II.Balance at the beginning of
   current year
                                              220,281,600.00        8,508,531.18         2,952,586.32 -40,390,760.22 12,363,298.48 203,715,255.76 220,281,600.00                                8,732,694.55           2,952,586.32           -47,291,479.26        16,386,114.63         201,061,516.24
   III.Changed in current year(Loss
   is listed with"-")
                                                            -          -66,261.00                    -          5,380,420.81         -725,611.17          4,588,548.64                    -       -248,916.25                       -            3,746,434.89       -1,079,253.74            2,418,264.90
   (I)Net profit                                            -                 -                      -          5,380,420.81        -725,611.17           4,654,809.64                    -               -                         -            3,746,434.89       -1,079,253.74            2,667,181.15
   (II)Other integrated income                              -          -66,261.00                    -                   -                  -               -66,261.00                    -       -248,916.25                       -                     -                   -               -248,916.25
     Total of (I) and (II)                                  -          -66,261.00                    -          5,380,420.81        -725,611.17           4,588,548.64                    -       -248,916.25                       -            3,746,434.89       -1,079,253.74            2,418,264.90
   (III)Shareholder input and withdraw of
   share capital
                                                            -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   1,Capital input by shareholders                          -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   2.Share payment accounted into
   shareholders' equity
                                                            -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   3.Others                                                 -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   (IV)Profit distribution                                  -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   1.Providing of surplus reserves                          -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   2.Common risk provision                                  -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   3.Dividend to shareholders                               -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   4. Others                                                -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   (V)Internal settlement of shareholders'
   equity
                                                            -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   1. Capital reserves transferred to share
   capital
                                                            -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   2. Surplus reserves transferred to share
   capital
                                                            -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   3. Making up losses by surplus
   reserves
                                                            -                    -                   -                       -                 -                       -                  -                  -                      -                        -                    -                      -
   4. Others                                             -                   -                    -                       -                 -              -              -                                                     -                        -                    -                      -
   (VI) Reasonable reserve                               -                   -                    -                       -                 -              -              -                              -                      -                        -                    -                      -
   1. Withdraw in this period                            -                   -                    -                       -                 -              -              -                              -                      -                        -                    -                      -
   2.Used in this period                                 -                   -                    -                       -                 -              -              -                              -                      -                        -                    -                      -
   IV.Balance at the end of this year         220,281,600.00        8,442,270.18         2,952,586.32          -35,010,339.41     11,637,687.31 208,303,804.40 220,281,600.00                   8,483,778.30           2,952,586.32           -43,545,044.37        15,306,860.89         203,479,781.14





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                                                                   深圳市特力(集团)股份有限公司 2014 年半年度报告全文

                                               Balance Sheet
                                                   2014年6月30日
Prepared by Shenzhen Tellus Holding Co., Ltd                                                         In RMB/CNY
                        Assets                    Note XIII     Balance at period-end       Balance at year-begin
Current assets:
    Monetary capital                                                       12,570,634.30               30,209,143.04
    Transactional financial assets                                                    -                            -
    Notes receivable                                                                  -                            -
    Accounts receivable                                1                              -                            -
    Prepayment                                                                  88,050.00                    21,000.00
    Dividend receivable                                                               -                            -
    Other receivable                                   2                  114,936,595.70               36,330,120.01
    Inventory                                                                         -                            -
  Non-current assets due in 1 year                                                  -                            -
    Other current assets                                                              -                            -
    Total of current assets                                               127,595,280.00               66,560,263.05
Non-current assets
    Financial assets available for sale                                      1,391,820.80                  1,480,168.80
    Investment held-to-maturity                                                       -                            -
    Long-term recivable                                                               -                            -
    Long-term share equity investment                  3                  433,518,935.63              426,777,549.25
    Investment real estate                                                 54,436,493.04               55,919,100.96
    Fixed assts                                                            18,380,311.08               18,675,995.34
    Construction in process                                                   251,308.70                    251,308.70
    Engineering goods                                                                 -                            -
    Disposal of fixed assets                                                          -                            -
    Production biological assets                                                      -                            -
    Intangible assets                                                         285,877.72                     33,255.04
    R&D expenses                                                                      -                            -
    Goodwill                                                                          -                            -
    Long-term amortizable expenses                                              44,813.08                    65,496.04
    Deferred income tax assets                                             14,005,609.54               14,025,080.64
    Other non-current assets                                                          -                            -
    Total non-current asset                                               522,315,169.59              517,227,954.77


    Total assets                                                          649,910,449.59              583,788,217.82
               (The Notes to the Financial Statements are essential parts of the Finanical Statements)




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                                                                       深圳市特力(集团)股份有限公司 2014 年半年度报告全文

                                            Balance sheet(Con't)
                                                       2014年6月30日
Prepared by Shenzhen Tellus Holding Co., Ltd                                                          In RMB/CNY
            Liabilities & owners' equity                   Note    Blance at period-end        Balance at year-begin
Current liability:
     Short-term loans                                                        127,544,160.00             67,544,160.00
     Transactional financial liability                                                    -                         -
     Notes payable                                                                        -                         -
     Accounts payable                                                                     -                         -
     Accounts received in advance                                                         -                         -
     Wage payable                                                               4,004,995.60                4,145,439.65
     Taxes payable                                                               408,664.50                  403,514.95
     Dividend payable                                                                     -                         -
     Interest payable                                                                     -                         -
     Other account payable                                                   294,150,068.11            287,687,112.90
Non-current liability due within 1 year                                         6,000,000.00                6,000,000.00
  Other current liability                                                                 -                         -
 Total current liability                                                     432,107,888.21            365,780,227.50
Non-current liability:
     Long-term loans                                                          92,500,000.00             95,500,000.00
     Bonds payable                                                                        -                         -
     Long-term payable                                                                    -                         -
     Special accounts payable                                                             -                         -
     Projected liabilities                                                                -                         -
     Deferred income tax liability                                               256,554.88                  278,641.88
     Other non-current liability                                                          -                         -
 Total non-current liability                                                  92,756,554.88             95,778,641.88
 Total liability                                                             524,864,443.09            461,558,869.38
Owners' equity:
     Share capital                                                           220,281,600.00            220,281,600.00
     Capital public reserve                                                     5,248,846.90                5,315,107.90
     Surplus public reserve                                                     2,952,586.32                2,952,586.32
     Retained profit                                                         -103,437,026.72           -106,319,945.78
     Total owner's equity attributable to parent company                     125,046,006.50            122,229,348.44
     Minority interests                                                                   -                         -
 Total of owners' equity                                                     125,046,006.50            122,229,348.44
 Total liabilities&owner's equity                                            649,910,449.59            583,788,217.82
                (The Notes to the Financial Statements are essential parts of the Finanical Statements)




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                                                                             深圳市特力(集团)股份有限公司 2014 年半年度报告全文

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

     i.Basic earnings per share                                                                 0.0131              -0.0183
     ii.Diluted earnings per share                                                              0.0131              -0.0183
VI.Other integrated income                                                                   -66,261.00         -248,916.25
VII. Total of intergrated income                                                           2,816,658.06       -4,283,502.74
     Total amount of owners' integrated income attributable to parent co.,                 2,816,658.06       -4,283,502.74
     Total amount of integrated income attributable to minority shareholders                       -                   -
               (The Notes to the Financial Statements are essential parts of the Finanical Statements)




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                                                                         深圳市特力(集团)股份有限公司 2014 年半年度报告全文

                                            Cash Flow Statement
                                           Jan. - June 2014
Prepared by Shenzhen Tellus Holding Co., Ltd                                                             In RMB/CNY
                              Items                                    Note   Amount at this period Amount at last period
I.Cash flows arising from operating activities
     Cash received from selling goods and provising labor services                   10,855,355.64         10,165,621.62
     Write-back of tax received                                                                -                     -
     Other cash received concerning operating activities                            137,551,446.17        101,880,965.23
   Subtotal of cash inflow arising from operating activities                        148,406,801.81        112,046,586.85
     Cash paid to/for purchasing goods and receiving labor services                            -                     -
     Cash paid to/for staff and workers                                               5,844,213.54          6,037,588.81
     Taxes paid                                                                       1,314,378.34          1,285,904.17
     Other cash paid concerning operating activities                                210,948,195.60         72,033,784.75
   Subtotal of cash outflow arising from operating activities                       218,106,787.48         79,357,277.73
        Net cash flows arising from operating activities                            -69,699,985.67         32,689,309.12
II.Cash flows arising from investment activities
     Cash received from recovering investment                                                  -                     -
     Cash received from investment income                                                      -               72,938.25
     Net cash received from disposal of fixed, intangible and
                                                                                         39,890.00                   -
     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                                39,890.00             72,938.25
     Net cash paid for purchasing fixed, intangible and other
                                                                                        539,007.00             51,048.00
     long-term assets
     Cash paid for investment                                                                  -            9,900,000.00
     Net cash received from subsidiaries and other units                                       -                     -
     Other cash paid concerning investing activities                                           -                     -
       Subtotal of cash outflow from investing activities                               539,007.00          9,951,048.00
         Net cash flows arising from investing activities                              -499,117.00         -9,878,109.75
III.Cash flows arising from financing activities
     Cash received from absorbing investment                                                -                     -
     Incl:Cash received from absorbing minority shareholders                                -                     -
     Cash received from loan                                                     175,000,000.00                   -
     Other cash received concerning financing activities                                    -                     -
        Subtotal of cash inflow from financing activities                        175,000,000.00                   -
     Cash paid for settling debts                                                118,000,000.00          3,000,000.00
     Cash paid for dividend and profit distributing or interest paying             4,439,406.07          2,479,252.43
     Incl:Dividend and profit of minority shareholder paid by subsidiaries                  -                     -
     Other cash paid concerning financing activities                                        -                     -
       Subtotal of cash outflow from financing activities                        122,439,406.07          5,479,252.43
         Net cash flow arising from financing activities                          52,560,593.93         -5,479,252.43
IV.Influence on cash due to fluctuation in exchange rate                                    -                  -81.72
V.Net increase of cash and cash equivalents                                      -17,638,508.74         17,331,865.22
     Plus:Balance of cash and cash equivalents at the period begin                30,209,143.04          1,614,187.49
VI.Balance of cash and cash equivalents at the period-end                         12,570,634.30         18,946,052.71
               (The Notes to the Financial Statements are essential parts of the Finanical Statements)




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                                                                                                                                                                                                                        深圳市特力(集团)股份有限公司 2014 年半年度报告全文

                                                                                                  Statement on Changes of Owners' Equity
                                                                                                                                       Semi-annual of 2014
Prepared by Shenzhen Tellus Holding Co., Ltd                                                                                                                                                                                                                  In RMB/CNY
                                                                                                    Current amount                                                                                                                  Amount of last year
                   Items                                        Owners' equity attributable to parent company                                                                                    Owners' equity attributable to parent company
                                                                                                                                    Minority interest   Total owners' equity                                                                                        Minority interest   Total owners' equity
                                                Share capital       Capital reserve      Surplus reserves         Retained profit                                                Share capital      Capital reserve       Surplus reserves        Retained profit
I.Balance at the end of last year             220,281,600.00       5,315,107.90          2,952,586.32           -106,319,945.78                -        122,229,348.44         220,281,600.00       5,539,271.27          2,952,586.32           -97,009,267.91                -         131,764,189.68
Plus:Changes of accounting policy                        -                  -                     -                         -                  -                   -                      -                  -                     -                        -                  -                    -
    Error correction of the last period                  -                  -                     -                         -                  -                   -                      -                  -                     -                        -                  -                    -
II.Balance at this year-begin                 220,281,600.00       5,315,107.90          2,952,586.32           -106,319,945.78                -        122,229,348.44         220,281,600.00       5,539,271.27          2,952,586.32           -97,009,267.91                -         131,764,189.68
III.Increase/decrease in this
year(Decrease is listed with"-")
                                                            -         -66,261.00                      -              2,882,919.06              -           2,816,658.06                      -       -248,916.25                       -           -4,034,586.49               -          -4,283,502.74
(I)Net profit                                              -                -                        -              2,882,919.06              -           2,882,919.06                      -               -                         -           -4,034,586.49                -         -4,034,586.49
(II)Other integrated income                                -         -66,261.00                      -                       -                -             -66,261.00                      -       -248,916.25                       -                     -                  -           -248,916.25
  Subtotal of (I) and (II)                                  -         -66,261.00                      -              2,882,919.06              -           2,816,658.06                      -       -248,916.25                       -           -4,034,586.49                -         -4,283,502.74
(III)Owners' devoted and decrease capital                   -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
1.Owners' devoted capital                                   -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
2.Amount calculated into
                                                            -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
owners' equity paid in shares
3.Other                                                     -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
(IV)Profit distribution                                    -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
1.Withdrawal of surplus reserves                            -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
2Withdrawal of general risk provision                       -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
3.Distribution for owners(shareholders)                     -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
4.Other                                                     -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
(V)Carrying forward internal owners' equity                 -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
1.Capital reserves converted to capital
(share capital)
                                                            -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
2.Surplus reserves converted to capital
(share capital)
                                                            -                   -                     -                         -              -                        -                    -                  -                      -                        -               -                       -
3Remedying loss with profit surplus                      -                  -                     -                         -                  -                   -                      -                 -                      -                         -                 -                   -
4.Other                                                  -                  -                     -                         -                  -                   -                      -                 -                      -                         -                 -                   -
(VI)Special inventory                                  -                  -                     -                         -                  -                   -                      -                 -                      -                         -                 -                   -
1.Withdrawal in this period                              -                  -                     -                         -                  -                   -                      -                 -                      -                         -                 -                   -
2.Used in this period                                    -                  -                     -                         -                  -                   -                      -                 -                      -                         -                 -                   -
IV.Balance at the end of this year            220,281,600.00       5,248,846.90          2,952,586.32           -103,437,026.72                -        125,046,006.50         220,281,600.00      5,290,355.02           2,952,586.32           -101,043,854.40               -        127,480,686.94




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                                                                  深圳市特力(集团)股份有限公司 2014 年半年度报告全文



                             SHENZHEN TELLUS HOLDING CO., LTD.
                                         Notes to Financial Statements
                                                         Ended as 30 June 2014         Unit: RMB      Currency: CNY


I. Company profiles
1. Historical development of the Company
Shenzhen Tellus Holding Co., Ltd. (hereinafter referred to as ―the Company‖ or ―Company‖), former Shenzhen Machinery
Industry Co., Ltd., was founded on 10 November 1986. Shenzhen Machinery Industry Co., Ltd changed to Shenzhen Tellus
Machinery Co. Ltd. dated 2 January 1992. Being approved by the Shenzhen Municipal People’s Government ―Shen Fu Ban
Fu (1992) No.: 1850‖, Shenzhen Tellus Machinery Co. Ltd. reorganized as a public limited company with name changed as
Shenzhen Tellus Machinery Co. Ltd. On 15 March 1993, being approved by branch of Shenzhen Special Economic Zone of
People’s Bank of China ―Shen Ren Yin Fu Zi (1993) No.: 092‖, the Company released 25.98 million registered common A
shares with RMB 1.00 par value as well as 20 million B shares. And the Company renamed as Shenzhen Tellus Holding Co.,
Ltd. dated 30 June 1994 after approval from the Shenzhen Administration for Industry and commerce. Business License for
Legal Person Numbered of the Company: 440301103017750. Headquarter of the Company locates in 3/F, Tellus Building,
Shuibei 2nd Road, Luohu District, Shenzhen, Guangdong Province.


The Company and its subsidiaries (together as ―the Group‖) mainly engaged in the automobile overall services, including
automobile retailing, inspection and maintenance, production of inspection equipment, property lease and property
management service, etc., included in the industry of wholesale business of energy, materials and mechanical-electronic
instruments.


Capital structure of the Company while initial public offering:


                                  Type                                     Amount (Share)                   Ratio (%)

    I. Non-tradable share

    Including: State shares                                                          120,900,000                         72.45

    Total non-tradable shares                                                        120,900,000                         72.45

    II. Outstanding shares

    1. Tradable A-Share                                                               25,980,000                         15.57

    2. Tradable B-Share                                                               20,000,000                         11.98

    Total tradable shares                                                             45,980,000                         27.55

                                Total                                                166,880,000                        100.00
All previous changes in the share capital after the establishment of the Company:
(1) Bonus shares in 1993
The Company held the resolution of annual shareholders' general meeting of 1993, distribute dividend of 0.5 Yuan in cash
for every 10 shares and 2 more bonus shares to all shareholders based on the Company’s total share capital of 166,880,000
shares on 31st, Dec., 1993, and the Company’s total share capital changed to 200,256,000 shares.

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                                                                   深圳市特力(集团)股份有限公司 2014 年半年度报告全文


On 22nd April 1994, Shenzhen Securities Regulatory Office approved the stock dividend scheme of the Company. After the
implementation of the stock dividend program, the ownership structure of the Company became as follows:


                                   Type                                       Amount (Share)                Ratio (%)

    State-owned corporate shares                                                       145,080,000                      72.45

    Domestic public shares                                                              31,176,000                      15.57

    RMB special stock (B-Share)                                                         24,000,000                      11.98

                                Total                                                  200,256,000                   100.00
(2) Bonus shares and capitalization in 1994
On 28th May 1995, the shareholders' general meeting of the Group approved the bonus share and capitalization program
proposed by the board of directors. The Company distributes 0.5 bonus shares to every 10 shares with 0.5 more shares
increased for 0.5 Yuan dividend in cash to all shareholders based on the Company’s total share capital of 200,256,000 shares
on 31st, Dec., 1994, and the Company’s total share capital changed to 220,281,600 shares.
Equity structure of the Company after bonus scheme implemented:


                                   Type                                       Amount (Share)                Ratio (%)

    State-owned corporate shares                                                        159,588,000                      72.45

    Domestic public shares                                                               34,293,600                      15.57

    RMB special stock (B-Share)                                                          26,400,000                      11.98

                                Total                                                   220,281,600                     100.00
(3) The changes of controlling shareholders in 1997
On 31st March 1997, in accordance with the approval of ―Shenfuhan [1997] No.19‖ and ―Zhengjianhan [1997] No.5‖, the
People's Government of SZ Municipality and China Securities Regulatory Commission agreed Shenzhen Investment and
Management Company to transfer its 159,588,000 shares of State shares to ―Shenzhen Special Development Group Co.,
Ltd‖ (hereinafter referred to as ―SDG‖), which took proportion of 72.45% in the total share capital.


(4) Reform of non-tradable shares in 2006
In December 2005, Shenzhen State-owned Assets Supervision and Administration Commission approved the non-tradable
shares reform program of Shenzhen Tellus (Group) Ltd. which reported by the Company’s non-tradable shareholders -
Shenzhen Special Development Group Co., Ltd.


On 4th January 2006, SDG paid 13,717,440 shares of stock to the shareholders of A shares in circulation as the consideration
of the non-tradable shares reform, and SDG held 66.22% of the Company’s total share capital after the non-tradable shares
reform. After the implementation of the non-tradable shares reform program, the ownership structure of the company
became as follows:


                                   Type                                 Amount (Share)                      Ratio (%)

    State-owned corporate shares                                                        145,870,560                      66.22



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                                                                  深圳市特力(集团)股份有限公司 2014 年半年度报告全文



                                     Type                              Amount (Share)                          Ratio (%)

    Domestic public shares                                                              48,011,040                          21.80

    RMB special stock (B-Share)                                                         26,400,000                          11.98

                                   Total                                               220,281,600                         100.00
As of 30 June 2014, the Company has issued 220, 281,600 shares accumulatively, refer to Note VII. 31for more details
The business scope of the Company includes: invest and set up industries (specific projects to be reported separately);
Domestic commerce, Materials supply and marketing (excluding the franchise, special control and monopoly of goods);
Leasing and management of owned property. Operate the self-manufactured products of the Company and the affiliated
enterprises, the self-use production materials, the metalworking machines, and the import and export business of universal
parts, therein to, the import and export business is handled in accordance with Shen Mao Guan Zheng Zi No. 098 foreign
trade accreditation certificate.


The parent company of the Group is Shenzhen Special Development Group Co., Ltd., and the ultimate controller is
Shenzhen State-owned Assets Supervision and Administration Commission.
This financial statement is approved for disclosure by resolution from the Board dated 7 August 2014.
II. Basis Preparation of the Financial Statements
The financial statements of the Group is prepared based on the going-concern assumption in accordance with the actually
occurred transactions and events and the ―Accounting Standards for Business Enterprises – Basic Standards‖ and 38 specific
accounting standards promulgated by the ministry of finance on 15th, Feb., 2006, the subsequently promulgated application
guide and interpretation of the accounting standards for business enterprises and other relevant provisions (hereinafter
collectively referred to as ―ASBE‖), and China Securities Regulatory Commission ―information disclosure regulations No.15
for the companies publicly issuing securities - general provisions of financial reports‖ (2010 Revision)


In accordance with the relevant regulations of Accounting Standards for Business Enterprises, the financial accounting of the
Group is based on the accrual basis. Except for the financial instruments, this financial statement takes the historical cost as
the measuring base. If the assets decrease in value, count and withdraw the corresponding impairment in accordance with the
relevant provisions.
III. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Groups meet the requirements of the Accounting Standards for Business Enterprises,
truthfully and completely reflect the financial situation of the Company and the Group on 30th, June, 2014, and the business
performance and cash flow in the first half year of 2014. In addition, the financial statements of the Company and the Group
meet the disclosure requirements of ―Preparation Regulation of Information Disclosure for Enterprise with Security Issued
Publicly No.15—General Rules of Financial Report‖ revised by China Securities Regulatory Commission in all significant
aspects.
IV. Main accounting policy and estimate


1. Fiscal period
The accounting period of the Group includes annual and interim, accounting interim refers to the reporting period shorter
than a complete fiscal year. The fiscal year of the Group adopts the Gregorian calendar, i.e. from 1 January to 31 December
for each year.


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2. Book-keeping currency
RMB is the currency in the major economic environment of the Company and its sub-company which take RMB as the
book-keeping currency. The Group adopts RMB as the currency when preparing this financial statement.
3. The accounting treatment of business merger
Business merger refers to the transactions or matters that two or more than two individual enterprises form a reporting entity.
Business merger includes the business merger under the common control and the different control.
(1) Business merger under the common control
Business merger under the common control means the enterprises participated in the merger are subject to the ultimate
control of the same party or the same multi-party before and after the merger, and the control is not temporary. For the
business merger under the same control, the party obtains the control rights of other enterprises participated in the merger on
the merger date is the merging party, and other enterprises participated in the merger are the merged party. The merger date
refers to the date that the merging party obtains the control rights of the merged party.


The assets and liabilities of the merging party should be measured in accordance with the book value of the combined party
on the combining date. The balance between the book value of the net asset obtained by the merging party and the book
value of the merger consideration (or the total face value of the issued shares) paid by the merging party, and adjust the
capital reserve (share premium); for the capital reserve (share premium) insufficient to reduce, adjust the retained earnings.


All direct expenses the merging party spent for the business merger are included in the current profit and loss when the
business merger occurred.
(2) Business merger under the different control
Business merger under the different control means the enterprises participated in the merger are not subject to the ultimate
control of the same party or the same multi-party before and after the merger. For the business merger under the different
control, the party obtains the control rights of other enterprises participated in the merger on the acquisition date is the
acquirer, and other enterprises participated in the merger are the acquiree. The acquisition date refers to the date that the
acquirer obtains the control rights of the acquiree.


As for the business merger under the different control, the merger costs contain the assets paid by the acquirer for obtaining
the control rights of the acquiree on the acquisition date, the liabilities incurred or assumed, and the fair value of the issued
equity securities. The intermediary fees such as auditing, legal services and consulting services costs and other
administrative costs incurred by the business merger are charged to the current profit and loss. The transaction costs of the
equity securities or debt securities issued as the combination consideration by the acquirer are reckoned in the initially
recognized amount of the equity securities or debt securities. As for the involved or existing consideration reckoned in the
merger costs in accordance with the fair value on the acquisition date, correspondingly adjust the consolidated goodwill for
these needs to be adjusted or possess consideration because new or further evidence appears for the situations existing on the
acquisition date within 12 months after the acquisition date. As for the business merger achieved in stages by multiple
exchanges and transactions, the stock rights of the acquiree held before the acquisition date should be re-measured in
accordance with the stock rights’ fair value on the acquisition date in the consolidated financial statement of the Group, the
balance between the fair value and its book value is reckoned in the current investment income on the acquisition date,
meanwhile, transfer other consolidated income related to the stock rights of the acquiree held before the acquisition date to
the current investment income, and the merger costs are the sum of the fair values of the stock rights of the acquiree held
before the acquisition date and the stock rights of the acquiree increased and held on the acquisition date.


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The merger costs of the acquirer and the net identifiable assets obtained in the merger are reckoned in accordance with the
fair value on the acquisition date. The balance of which the merger costs are more than the net identifiable assets’ fair value
share of the acquiree obtained in the merger on the acquisition date is recognized as goodwill. For those whose merger costs
are less than the net identifiable assets’ fair value share of the acquiree obtained in the merger, recheck the obtained
identifiable assets, liabilities, and the fair value with contingent liability of the acquiree, and the measurement of the merger
costs at first, while for those whose merger costs are still less than the net identifiable assets’ fair value share of the acquiree
obtained in the merge after rechecking, reckon its the balance in the current profit and loss.


For the deductable temporary difference obtained by the acquirer from the acquiree that is not confirmed because of not
meeting the assets confirmation requirements of the deferred income taxes on the acquisition date, if there is new or further
information states that the relevant conditions on the acquisition date has already existed and the economic interests on the
acquisition date brought by the deductable temporary difference can be realized by the acquiree within 12 months after the
acquisition date, then confirm the relevant deferred income tax assets, and decrease the goodwill, as for the goodwill
insufficient for reducing, confirm the difference to be the current profit and loss; except for the above-mentioned cases,
reckon those deferred income tax assets related to the business merger in the current profit and loss.
4 Preparing method of consolidated financial statements
(1) Determinate principles of range for consolidation financial statement

Consolidation range for consolidation financial statement should be recognized based on the control.
Controlling means the Company has the ability to decide the financial and operation policy of the invested
unit and can obtain profit from the unit’s business operation. Range of consolidation including the
Company and all subsidiaries. Subsidiary means the enterprise or subject controlled by the Company.


      (2) Preparing method of consolidated financial statements
Since the date of gaining the net assets and the actual control rights of the production and operation decision-making of the
subsidiaries, the Group has started to bring it into the consolidation scope; stop to bring into the consolidation scope since
the date of losing the actual control rights. As for the disposed subsidiaries, the business performance and cash flow before
the disposal have been suitably included in the consolidated income statement and the consolidated cash flow statement; as
for the subsidiaries currently disposed; don’t adjust the opening balance of the consolidated balance sheet. For the
subsidiaries increased by the business merger under the different control, the business performance and cash flow after its
acquisition date have been suitably included in the consolidated income statement and the consolidated cash flow statement,
and don’t adjust the opening balance and correlation date of the combined financial statement. For the subsidiaries increased
by the business merger under the common control, the business performance and cash flow from the beginning period of the
merger to its merger date have been suitably included in the consolidated income statement and the consolidated cash flow
statement, and adjust the correlation date of the combined financial statement at the same time.


When preparing the consolidated financial statements, for the accounting policies adopted by the subsidiaries and the
Company being inconsistent during the accounting time period, adjust in accordance with the accounting policies of the
Company and the financial statements of the subsidiaries during the accounting time period. As for the subsidiaries obtained
by the business merger under the different control, adjust the financial statements based on the fair value of the net
identifiable assets on the acquisition date.




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All significant intra-group current account balances, transactions and unrealized profits are offset in the preparation of
consolidated financial statements.


The stockholders' equity of the subsidiaries and the shares not belong to the Company in the current net profit or loss are
respectively served as the separate presentation in the stockholders' equity and net profits of the minority interest and
minority interest income in the consolidated financial statements. The shares of the current net profit or loss of the
subsidiaries that belong to the minority interest are listed under net profit item in the consolidated profit statement as
―minority interest income‖ item. Reduce the minority interest for those that the subsidiaries’ losses shared by the minority
shareholders exceed the shares that the minority shareholders gained from the owner's equity at the beginning period of this
subsidiary.



When losing the control rights of the original sub companies because of disposing some equity investment
or other reasons, re-measure the residual equity in accordance with its fair value on the date of losing the
control rights. Use the sum of the consideration obtained by disposing the stock rights and the fair value of
the residual equity to minus the balance among the net assets’ shares of the original sub companies
continuously calculated since the acquisition date in accordance with the original shareholding ratio, and
then reckon in the current investment income when losing the control rights. Transfer the other
consolidated incomes related to the equity investment of the original sub companies to the current
investment income when losing the control rights. Thereafter, do the follow-up measurement for this part’s
residual equity in accordance with the relevant provisions of ―Accounting Standards for Business
Enterprises No.2 - long-term equity investment‖ or ―Accounting Standards for Business Enterprises No.22
- financial instruments recognition and measure’, refer to the Note IV 10 ―long-term equity investment‖ or
the Note IV 7 ―financial instruments‖ for details
5. Determination criteria of cash and cash equivalent
Cash and cash equivalent of the Group including stock cash, deposits available for payment at any time
and the investment held by the Group with the follow characters obtained at the same time: short term
(expire within 3 months commencing from purchase day), active liquidity, easy to convert to
already-known cash, and small value change risks.
6. Foreign Currency Operations


(1) Basis for translation of foreign currency transactions
The foreign currency transactions of the Company, when initially recognized, are translated into functional currency at the
prevailing spot exchange rate on the date of exchange (usually refers to the middle rate of the exchange rate for the day as
quoted by the People’s Bank of China, the same below) while the Company’s foreign currency exchange operations and
transactions in connection with foreign currency exchange shall be translated into functional currency at the exchange rate
actually adopted.


Foreign currency business is accounted with amount denominated in RMB as translated at the spot exchange rate as of the
occurrence day of such business. The occurred foreign currency exchange business or transactions with foreign currency
exchange involved shall be translated at the effective exchange rate (i.e. exchange rate adopted by banks for such
transactions) adopted by such transaction.

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(2) Basis for translation of foreign currency monetary items and foreign currency non-monetary items
On the balance sheet date, foreign currency monetary items shall be translated at the spot exchange rate on
the balance sheet date. All differences are included in the consolidated income statement, except for: ①
the differences arising from foreign currency borrowings related to the acquisition or construction of fixed
assets which are qualified for capitalization; and ② except for other carrying amounts of the amortization
costs, the differences arising from changes of the foreign currency items available for sale.


The foreign currency non-monetary items measured at historical cost shall still be measured by the
functional currency translated at the spot exchange rate on the date of the transaction. Foreign currency
non-monetary items measured at fair value are translated at the spot exchange rate on the date of
determination of the fair value. The difference between the amounts of reporting currency before and after
the translation will be treated as changes in fair value (including changes in foreign exchange rates) and
recognized in profit or loss for the period or recognized as other consolidated income and included in the
capital reserves.
7. Financial instruments


(1) Method of determination of the fair value for financial assets and financial liabilities
The fair value refers to the amount, at which both willing parties to a fair transaction who are familiar with
the condition exchange their assets or clear off their debts under fair conditions. Financial instruments exist
in an active market. Fair value is determined based on the quoted price in such market. An active market
refers to where pricing is easily and regularly obtained from exchanges, brokers, industrial organizations
and price-fixing service organizations, representing the actual price of a market transaction that takes place
in a fair deal. While financial instruments do not exist in an active market, the fair value is determined
using valuation techniques. Valuation technologies include reference to be familiar with situation and
prices reached in recent market transactions entered into by both willing parties, reference to present fair
values of similar other financial instruments, cash flow discounting method and option pricing models.
(2) Classification, recognition and measurement of the financial assets
By way of buying and selling the financial assets in a regular way, recognition and derecognition are
carried out according to the accounts on the transaction day. Financial assets are divided into financial
assets at fair value through profit or loss, held-to-maturity investments, loans, accounts receivable and
available for-sale financial assets when they are initially recognized. Financial assets and financial
liabilities are initially recognized at fair value. For financial assets and financial liabilities classified as fair
value through profit or loss, relevant transaction costs are directly recognized in profit or loss for the
period. For financial assets classified as other categories, relevant transaction costs are included in the
amount initially recognized.


①Financial assets carried at fair value through profit or loss for the current period

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They include financial assets held for trading and financial assets designated as at fair value through profit
or loss for the current period.


Financial assets may be classified as financial assets held for trading if one of the following conditions is
met: A. the financial assets is acquired or incurred principally for the purpose of selling it in the near term;
B. the financial assets is part of a portfolio of identified financial instruments that are managed together
and for which there is objective evidence of a recent pattern of short-term profit taking; or C. the financial
assets is a derivative, excluding the derivatives designated as effective hedging instruments, the derivatives
classified as financial guarantee contract, and the derivatives linked to an equity instrument investment
which has no quoted price in an active market nor a reliably measured fair value and are required to be
settled through that equity instrument.


A financial asset may be designated as at FVTPL upon initial recognition only when one of the following
conditions is satisfied: A. Such designation eliminates or significantly reduces a measurement or
recognition inconsistency that would otherwise result from measuring assets or recognizing the gains or
losses on them on different bases; or B. The financial asset forms part of a group of financial assets or a
group of financial assets and financial liabilities, which is managed and its performance is evaluated on a
fair value basis, in accordance with the Group’s documented risk management or investment strategy, and
information about the grouping is reported to key management personnel on that basis.


Financial assets carried at fair value through profit or loss for the current period is subsequently
measured at fair value. The gain or loss arising from changes in fair value and dividends and
interest income related to such financial assets are charged to profit or loss for the current
period.
 Held-to-maturity investments


They are non-derivative financial assets with fixed maturity dates and fixed or determinable
payments that the Group has positive intent and ability to hold to maturity.


Held-to-maturity investments are subsequently measured at amortized cost using the effective
interest method. Gain or loss on derecognition, impairment or amortization is recognized
through profit or loss for the current period.


The effective interest method is a method of calculating the amortized cost of a financial
asset and of allocating interest income or expense over each period based on the effective

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interest of a financial asset or a financial liability (including a group of financial assets or
financial liabilities). The effective interest is the rate that discounts future cash flows from the
financial asset or financial liability over its expected life or (where appropriate) a shorter
period to the carrying amount of the financial asset or financial liability.


In calculating the effective interest rate, the Group will estimate the future cash flows
(excluding future credit losses) by taking into account all contract terms relating to the
financial assets or financial liabilities whilst considering various fees, transaction costs and
discounts or premiums which are part of the effective interest rate paid or received between
the parties to the financial assets or financial liabilities contracts.


③ Loans and receivable
They are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market. Financial assets, including bills receivable, accounts receivable,
interest receivable, dividends receivable and other receivables, are classified as loans and
receivables by the Group.


Loans and receivables are subsequently measured at amortized cost using the effective interest method.
Gain or loss arising from derecognition, impairment or amortization is recognized in current profit or loss.


④Available-for-sale financial assets
They include non-derivative financial assets that are designated in this category on initial recognition, and
the financial assets other than the financial assets at fair value through profit and loss, loans and
receivables and held-to-maturity investments.


Available-for-sale financial assets are subsequently measured at fair value. The gain or loss on change in
fair value are recognized as other comprehensive income and charged to capital reserves, except for
impairment loss and exchange differences arising from foreign monetary financial assets and amortized
cost which are accounted for through profit or loss for the current period. The financial assets will be
transferred out of the financial assets on derecognition and accounted for through profit or loss for the
current period.


Interests received from available-for-sale financial assets held and the cash dividends declared by the
investee are recognized as investment income.
(3) Impairment of financial assets


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In addition to financial assets at fair value through profit or loss for the current period, the Group reviews
the book value of other financial assets at each balance sheet date and provide for impairment where there
is objective evidence that financial assets are impaired.


For a financial asset that is individually significant, the Group assesses the asset individually for
impairment. For a financial asset that is not individually significant, the Group assess the asset individually
for impairment or include the asset in a group of financial assets with similar credit risk characteristics and
collectively assess them for impairment. If it is determined that no objective evidence of impairment exists
for an individually assessed financial asset, whether the financial asset is individually significant or not, the
financial asset is included in a group of financial assets with similar credit risk characteristics and
collectively assessed for impairment. Financial assets for which an impairment loss is individually
recognized are not included in the collective assessment for impairment.
①Impairment of held-to-maturity investments, loans and receivables


The carrying amount of financial assets measured at costs or amortized costs are subsequently reduced to
the present value discounted from its projected future cash flow. The reduced amount is recognized as
impairment loss and recorded as profit or loss for the period. After recognition of the impairment loss from
financial assets, if there is objective evidence showing recovery in value of such financial assets impaired
and which is related to any event occurring after such recognition, the impairment loss originally
recognized shall be reversed to the extent that the carrying value of the financial assets upon reversal will
not exceed the amortized cost as at the reversal date assuming there is no provision for impairment.


 Impairment of available-for-sale financial assets
In the event that decline in fair value of the available-for-sale equity instrument investment is regarded as
―severe decline‖ or ―non-temporary decline‖ on the basis of comprehensive related factors, it indicates that
there is impairment loss of the available-for-sale equity instrument investment. In particular, ―severe
decline‖ refers to accumulative decline in fair value is more than 20%. ―Non-temporary decline‖ refers to
the fair value decreased continuously for more than 12 months.


When the available-for-sale financial assets impair, the accumulated loss originally included in the capital
reserve arising from the decrease in fair value was transferred out from the capital reserve and included in
the profit or loss for the period. The accumulated loss that transferred out from the capital reserve is the
balance of the acquired initial cost of asset, after deduction of the principal recovered, amortized amounts,
current fair value and the impairment loss originally included in the profit or loss.


After recognition of the impairment loss, if there is objective evidence showing recovery in value of such
financial assets impaired and which is related to any event occurring after such recognition in subsequent
periods, the impairment loss originally recognized shall be reversed. The impairment loss reversal of the

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available-for-sale equity instrument will be recognized as other consolidated income, and the impairment
loss reversal of the available-for-sale debt instrument will be included in the profit or loss for the period.


When an equity investment that is not quoted in an active market and the fair value of which cannot be
measured reliably, or the impairment loss of a derivative financial asset linked to the equity instrument that
shall be settled by delivery of that equity instrument, then it will not be reversed.
(4) Recognition and measurement of transfers of financial asset
Financial asset that satisfied any of the following criteria shall be derecognized:            the contract right to
recover the cash flows of the financial asset has terminated;  the financial asset, along with substantially
all the risk and return arising from the ownership of the financial asset, has been transferred to the
transferee; and  the financial asset has been transferred to the transferee, and the transferor has given up
the control on such financial asset, though it does not assign maintain substantially all the risk and return
arising from the ownership of the financial asset.


When the entity does not either assign or maintain substantially all the risk and return arising from the
ownership of the financial asset and does not give up the control on such financial asset, to the extent of its
continuous involvement in the financial asset, the entity recognizes it as a related financial asset and
recognizes the relevant liability accordingly. The extent of the continuous involvement is the extent to
which the entity exposes to changes in the value of such financial assets.


On derecognition of a financial asset, the difference between the following amounts is recognized in profit
or loss for the current period: the carrying amount and the sum of the consideration received and any
accumulated gain or loss that had been recognized directly in equity.


If a part of the financial assets qualifies for derecognition, the carrying amount of the financial asset is
allocated between the part that continues to be recognized and the part that qualifies for derecognition,
based on the fair values of the respective parts. The difference between the following amounts is
recognized in profit or loss for the period: the sum of the consideration received and the carrying amount
of the part that qualifies for derecognition and the aforementioned carrying amount.
(5) Classification and measurement of financial liabilities
At initial recognition, financial liabilities are classified either as ―financial liabilities at fair value through
profit or loss‖ or ―other financial liabilities‖. Financial liabilities are initially recognized at fair value. For
financial liabilities classified as fair value through profit or loss, relevant transaction costs are directly
recognized in profit or loss for the period. For financial liabilities classified as other categories, relevant
transaction costs are included in the amount initially recognized.


① Financial liabilities at fair value through profit or loss for the period


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The criteria for a financial liability to be classified as held for trading and designated as at financial
liabilities at fair value through profit or loss are the same as those for a financial asset to be classified as
held for trading and designated as at financial assets at fair value through profit or loss.


Financial liabilities at fair value through profit or loss for the period are subsequently measured at fair
value. The gain or loss arising from changes in fair value and dividends and interest income related to such
financial liabilities are included into the current profit or loss.


 Other financial liabilities
Derivative financial liabilities which are linked to equity instruments that are not quoted in an active
market and the fair value of which cannot be measured reliably measured, and which shall be settled by
delivery of equity instruments are subsequently measured at cost. Other financial liabilities are
subsequently measured at amortized cost using the effective interest method. Gains or losses arising from
derecognition or amortization is recognized in profit or loss for the current period.
(6) Derecognition of financial liabilities
Financial liabilities are derecognized in full or in part only when the present obligation is
discharged in full or in part. An agreement is entered between the Group (debtor) and a
creditor to replace the original financial liabilities with new financial liabilities with
substantially different terms, derecognize the original financial liabilities as well as recognize
the new financial liabilities.


When financial liabilities is derecognized in full or in part, the difference between the
carrying amount of the financial liabilities derecognized and the consideration paid (including
transferred non-cash assets or new financial liability) is recognized in profit or loss for the
current period.
(7) Offset of Financial Assets and Financial Liabilities
If the Group owns the legitimate rights of offsetting the recognized financial assets and financial liabilities,
which are enforceable currently, and the Group plans to realize the financial assets or to clear off the
financial liabilities by net amount method, the amount of the offsetting financial assets and financial
liabilities shall be reported in the balance sheep. Otherwise, financial assets and financial liabilities are
presented separately in the balance sheet without offsetting.


(8) Equity instruments
Equity instruments are any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. For equity instruments, the price received during the issue shall be added to
shareholder’s equity after reducing the transaction fees.


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The distribution (excluding the dividends) to the equity instrument holders by the Group shall reduce the
shareholder’s equity. The Group shall not recognize the changes of the equity instruments’ fair value.
8. Account receivable
Account receivable including receivables and other account receivables etc.
(1) Recognition standards for bad debt provision
On balance sheet date, the Company examined book value of the account receivable, if the followed objective evidence has
been show for impairment occurred, impairment provision shall withdrawal: ①the debtor has serious financial difficulties;
②debtor violated the terms of the contract (such as interest or principal payment default or overdue etc.); ③debtor probably
close down or exercise other financial restructuring; and ④other objective evidence showing impairment occurred on
receivables.
(2) Withdrawal method for bad debt provision

①Recognition criteria and depreciation method for account receivable with large single amount and accrued for provision of
bad debt on a single basis
Account receivable with over RMB one million and other account receivable with over RMB 500,000 are recognized as
account receivable with large single amount.
The Company exercise impairment test separately on account receivable with large single amount, if no impairment been
found in financial assets after separate testing, they shall be included in portfolios of accounts receivable with similar credit
risk features for impairment tests.
For accounts receivable with confirmed impairment losses after separate tests, they shall not be included in portfolios of
accounts receivable with similar credit risk features for impairment tests.

②Recognition criteria and depreciation method for account receivable with accrued for provision of bad debt on credit risk
portfolio basis
A.    Recognition basis for credit risk characteristics portfolio
As for the account receivable with minor single amount and those with major amount without impairment had been found
after testing on a single basis, the Company grouping the financial assets according to similarity and relativity of the credit
risk characteristics. The credit risk characteristics usually reflect the repaying capability for all due amount from debtors, in
line with the terms of the contract, and related with the measurement of future cash flow on assets which has been examined.
Recognition basis for different portfolio:


                   Item                                                              Basis

                                                    Divide the portfolio on the age of account receivable as a credit risk
 Age portfolio
                                                                                 characteristics
B. Depreciation method for bad debt provision recognized by credit risk characteristics portfolio
At the time of impairment testing, the bad debt amount will recognized by the estimated losses, according to historical losses
experience, which has been occurred in account receivable portfolio, and current economic status as well as portfolio
structure and similar credit risk characteristics (debt paying capability for debtor based on terms of the contract).


Depreciation method of bad debt provision in different portfolio:


                   Item                                                       Depreciation method



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                   Item                                                   Depreciation method

 Age portfolio                                            Accrual bad debt provision by aging of accounts

a. Depreciation method of bad debt provision by aging of accounts in portfolio

                    Age                       Accrual ratio of account receivable (%) Accrual ratio of other receivables (%)

Within 1 year (including one year, the same

   below)                                                                No accrual                                No accrual

1-2 years                                                                            5                                      5

2-3 years                                                                           20                                     20

Over 3 years                                                                        50                                     50

③Accounts receivable that are individually insignificant but with bad debt provision provided on an individual basis:

Account receivable with RMB one million at most and other account receivable with RMB 500,000 at most are recognized
as account receivable with insignificant single amount.


As for the account receivable with insignificant single amount but with followed features, exercise impairment separately, if
there has evidence of impairment, provision for bad debts shall be made at the difference of present value of estimated future
cash flows in short of their book values, and shall be recognized as impairment losses: account receivable with dispute and
arbitration involved or exist with the counter party; receivables which has obvious evidence that the debtor probably unable
to performed payment obligations etc.

(3) Reversal of bad debt provisions
If there is evidence showing that the value of the account receivable has been recovered, and that the
recovery is objectively related to events after recognition of the loss, the originally recognized impairment
loss should be reversed and included in current profit and loss. However, the book values after such
reversal shall not exceed the amortized costs of the account receivable on the reversal date, assuming there
is no provision for impairment.
9. Inventories
(1)Classification of inventories

     Inventory including raw materials, stock commodity and low value consumables etc.


(2) Pricing for inventories delivered and obtained

     Purchase and storage of vary inventories are value at actual costs; delivered inventory value on

     weighted average method while low value consumables and wrappage value on gradation amortization

     method.



(3)Recognition for net realizable value of inventories and withdrawal method for inventory impairment provision


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Net realizable value refers to the amount resulted by inventory’s estimated sale price minor the cost, which is going to
occurred till end of the completion, estimated sales expenses and relevant taxes, in daily activities. At the time of recognizing
the net realizable value for inventory, on basis of unambiguous evidence, take the purpose of inventory held and influence of
events after the balance sheet date into account at the same time.


On balance sheet date, measure of the inventory is made as the lower of their cost and or net realizable values. Provision for
inventory depreciation reserve are made while the net realizable values below the cost. Inventory falling price reserves
withdrawal usually base on the difference of the cost of single inventory which over the net realizable value.



After inventory impairment provision, if any factor rendering write-downs of the inventories has been
eliminated as net realizable value higher than its book value resulted, the amounts written down are
recovered and reversed from the inventory depreciation reserve, which has been provided for. The reversed
amounts are included into the current profit and loss.


     (4) Inventory system was the perpetual inventory system.

10. Long-term equity investment
(1) Determination of investment cost


For a long-term equity investment acquired through a business combination involving enterprises under
common control, the initial investment cost of the long-term equity investment shall be the absorbing
party’s share of the carrying amount of the owner’s equity of the party being absorbed at the date of
combination. For a long-term equity investment acquired through business combination not involving
enterprises under common control, the business combination cost is the aggregate of assets paid, liabilities
incurred or undertook and fair value of equity securities issued by the acquirer. Agent fees incurred by the
acquirer for the acquisition such as audit, legal service, and valuation and consultation fees, and other
related administration expenses are charged to profit or loss in the current period at the time such expenses
incurred. Transaction cost incurred for issuing equity securities or debt securities, which are used as
consideration for the combination, are included in the initial recognition amount of the equity securities or
debt securities.


The long-term equity investment acquired through means other than a business combination shall be
initially measured at its cost. Such cost is depended upon the acquired means of long-term equity
investments, which is recognized based on the purchase cost actually paid by the Group in cash, the fair
value of equity securities issued by the Group, the agreed value of investment contract or agreement, the
fair value or original carrying amounts of the non-monetary asset exchange transaction which the asset will
be transferred out of the Group, and the fair value of long-term equity investment itself. The costs, taxes
and other necessary expenses that are directly attributable to the acquisition of the long-term equity
investments are also included in the investment cost.

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(2) Subsequent measurement and profit or loss recognition
Cost method is used to account for a long-term equity investment where the investor does not have joint
control or significant influence over the investee, and the investment is not quoted in an active market and
its fair value cannot be reliably measured. Long-term equity investments with joint control or significant
influence on the investee are accounted for using equity method. Long-term equity investment without
control or joint control or significant influence with a fair value which can be reliably measured is
accounted for as available-for-sale financial assets or financial assets measured at fair value with any
change in fair value charged to profit or loss.


In addition, long-term equity investments with control on the investee are accounted for using cost method
and record in the Company’s financial statements.
① Long-term equity investments accounted for using the cost method
Under the cost method, a long-term equity investment is measured at its initial investment cost. Except
receiving the actual consideration paid for the investment or the declared but not yet distributed cash
dividends or profits which is included in the consideration, investment gains for the period is recognized as
the cash dividends or profits declared by the investee.
② Long-term equity investments accounted for using the equity method
Under the equity method, where the initial investment cost of a long-term equity investment exceeds the
investor’s interest in the fair value of the investee’s identifiable net assets at the acquisition date, no
adjustment shall be made to the initial investment cost. Where the initial investment cost is less than the
investor’s interest in the fair value of the investee’s identifiable net assets at the acquisition date, the
difference shall be charged to profit or loss for the current period, and the cost of the long term equity
investment shall be adjusted accordingly.


Under the equity method, investment gain or loss represents the Group’s share of the net profits or losses
made by the investee for the current period. The Group shall recognize its share of the investee’s net
profits or losses based on the fair values of the investee’s individual separately identifiable assets at the
time of acquisition, after making appropriate adjustments thereto in conformity with the accounting
policies and accounting periods of the Group. The unrealized gain or loss from internal transactions
entered into between the Group and its associated enterprises and joint ventures is set off according to the
shareholding attributable to the Group and accounted for as investment income and loss based such basis.
However, the unrealized gain or loss from internal transactions entered into between the Group and its
investee is not set up if belonging to impairment loss from assets transferred according to regulations such
as ―Accounting Standards for Business Enterprises No. 8 ―Assets impairment‖. In respect of the other
consolidated income of investees, the carrying amount of long-term equity investments is accordingly
adjusted and recognized as other consolidated income and included in the capital reserves.




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The Group’s share of net losses of the investee shall be recognized to the extent that the carrying amount
of the long-term equity investment together with any long-term interests that in substance form part of the
investor’s net investment in the investee are reduced to zero. If the Group has to assume additional
obligations, the estimated obligation assumed shall be provided for and charged to the profit or loss as
investment loss for the period. Where the investee is making profits in subsequent periods, the Group shall
resume recognizing its share of profits after setting off against the share of unrecognized losses.


If there is debit variation in relation to the long-term equity investments in associates and joint venture held
prior to first adoption of the Accounting Standards for Business Enterprises by the Group on 1 January
2007, the amounts amortized over the original residual term using the straight-line method is included in
the profit or loss for the period.
③ Acquisition of minority interests
Upon the preparation of the consolidated financial statements, since acquisition of minority interests
increased of long-term equity investment which was compared to fair value of identifiable net assets
recognized which are measured based on the continuous measurement since the acquisition date (or
combination date) of subsidiaries attributable to the Group calculated according to the proportion of newly
acquired shares, the difference of which recognized as adjusted capital surplus, capital surplus insufficient
to set off impairment and adjusted retained earnings.
④ Disposal of long-term equity investments
In these consolidated financial statements, where the parent company disposes of a portion of the long term
equity investments in a subsidiary without a change in control, the difference between disposal cost and
disposal of long-term equity investments relative to the net assets of the subsidiary is charged to the
owners’ equity. As for the disposal of a portion of the long term equity investments in a subsidiary by the
parent company leading to lose of control over such subsidiary, it shall be accounted for under the relevant
accounting policies described in Note IV.4
(2) Headed ―preparation methods for consolidated financial statements‖.
On disposal of a long-term equity investment otherwise, the difference between the carrying amount of the
investment and the actual consideration paid is recognized through profit or loss in the current period.
Where the equity method is adopted, other comprehensive income attributable to the long term equity
investments previously included in shareholders’ equity shall be transferred to through profit or loss in the
current period on a pro-rata basis. The remaining equity shall be recognized as the long-term equity
investments or other relevant financial assets based on the carrying amount and subsequently measured in
accordance with the accounting policies of the foresaid long-term equity investments or financial assets.
The retrospective adjustment shall be made in accordance with the relevant provisions if the remaining
equity is accounted for using the equity method instead of the cost method.
(3) Recognition of having joint control or significant influence over the investee
The term ―control‖ means that the Group has the power to decide an enterprise’s financial and operating
policy, pursuant to which, the Group can get the power to obtain benefits from its operating activities. Joint


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control is the contractually agreed sharing of control over an economic activity, which only exists when
relevant and important financial affairs and management decisions related to such economic activity
require sharing of control by investors who unanimously agree upon. Significant influence is the power to
participate in the financial and operating policy decisions of an enterprise, but to fail to control or joint
control the formulation of such policies together with other parties. In determining whether there is control
or significance influence over the investee, potential voting right factors (such as the convertible corporate
bonds for the period and the exercisable stock warrants for the period of the investee and other invested
units held) were taken into account.
(4) Impairment test method and impairment provision
The Group assesses at each balance sheet date whether there is any indication that any
long-term equity investments may be impaired. If there is any evidence indicating that an
asset may be impaired, recoverable amount shall be estimated for the individual asset. If the
recoverable amount of an asset is less than its carrying amount, the reduction is recognized as
an impairment loss and charged to profit or loss for the current period. A provision for
impairment loss of the asset is recognized accordingly.


An impairment loss recognized on long-term equity investments shall not be reversed in a
subsequent period.
11. Investment real estate
Investment real estate is the real estate that held by the Company for purpose of obtaining rent or capital appreciation or both
purpose received. Investment real estate including rented land use right, land use right held ready for transfer after
appreciation and rented buildings etc.


Investment real estate is measured according to the initial cost; the Company adopts the cost model to have follow-up
measurements of the investment real estate. In which the depreciation method and impairment provision recognition of a
building shares the same method with fixed assets’ calculation, the amortizing method of land use right and impairment
provision recognition shares the same method with intangible assets’ calculation.


Impairment test method and accrual of depreciation reserves for the investment real estate please found in ―17.impairment of
non-current and non-financial assets‖ in Note IV.


At the time of investment real estate disposed, or permanently out of use and unable to obtained economic benefits from
disposal, the investment real estate shall be de-recognized.   The amount after deducted book value and relevant taxes from
income from disposal of real estate sold, transfer, scrap or derogate, shall reckoned into current gains/losses.

12. Fixed assets
(1) Recognition criteria of fixed assets
Fixed assets refer to the tangible assets held for the purpose of producing commodities, rendering services, renting or
business management with useful lives exceeding one fiscal year.


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(2) Depreciation method of fixed assets
The initial measurement of a fixed assets shall be made at its cost and consider expected discard expenses factors alternatives.
Accrual depreciation of fixed assets shall be made based on straight-line depreciation within the service life since the second
month, when the fixed assets reached its expected condition for use. Service life, estimated net residual value and annual
depreciation rate for vary fixed assets are as:


                                                                                                          Annual depreciation
                     Type                         Depreciation term (year)        Residual rate (%)
                                                                                                                rate (%)

 House and buildings                                                    35                            3                     2.77

 Machinery equipment                                                    12                            3                     8.08

 Transportation equipment                                                7                            3                    13.86

 Electronic equipment                                                    7                            3                    13.86

 Office and other equipment                                              7                            3                    13.86

 Decoration charge for self-owned houses                                10                            0                    10.00
Estimated net residual value is the amount obtained from disposal of such fixed assets after estimated disposal expense
deducted, on assumption basis of the fixed assets has full estimated service life and in an anticipating condition of service
life terminated.
(3) Impairment test method and accrual of depreciation reserves for fixed asset
Impairment test method and accrual of depreciation reserves for fixed asset please found in ―17. Impairment of non-current
and non-financial assets‖ in Note IV



(4)Others
As for the subsequent expenditure related to fixed assets, if the economic benefits related to the fixed
assets is probable to flow into the Company and its cost could be measured reliably, then the expenditure
shall be included in costs of the fixed assets, and the carrying value of the replaced portion shall be
derecognized. Other subsequent expenditures other than this shall be included in profits or losses of the
period when occurred.


The disposal income from disposal, transfer, dumping or damage of fixed assets less its carrying value and
related tax expenses shall be recorded in profits or losses of the period.


The Company, at least, re-reviews the use of life, projected net residual value and depreciation method of
fixed assets at the end of year. For any change of the above factor, it shall be dealt as change of accounting
estimation.
13. Construction-in-progress
Cost of construction-in-progress should recognized by the actual construction costs, including vary construction costs during
the period of construction, the capitalized borrowing costs prior to the expected conditions for use and other relevant
expenses etc. The construction-in-progress should carry forward as fixed assets after reached the expected conditions for use.

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Impairment test method and impairment provision method for the construction-in-progress found in ―17.impairment of
non-current/non-financial assets‖ in Note IV.

14. Borrowing costs
Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary
costs incurred in connection with the arrangement of borrowings, and exchange differences arising from
foreign currency borrowings. For borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset, when expenditures for the asset and borrowing costs are
being incurred, activities relating to the acquisition, construction or production of the asset that are
necessary to prepare the asset for its intended use or sale have commenced, such borrowing costs shall be
capitalized as part of the cost of that asset; and capitalization shall discontinue when the qualifying asset is
ready for its intended use or sale. Other borrowing costs shall be recognized as expense in the period in
which they are incurred.


Where funds are borrowed for a specific purpose, the amount of interest to be capitalized shall be the
actual interest expense incurred on that borrowing for the period less any bank interest earned from
depositing the borrowed funds before being used into banks or any investment income on the temporary
investment of those funds. Where funds are borrowed for general purpose, the Group shall determine the
amount of interest to be capitalized on such borrowings by applying a capitalization rate to the weighted
average of the excess amounts of cumulative expenditures on the asset over and above the amounts of
specific-purpose borrowings. The capitalization rate shall be the weighted average of the interest rates
applicable to the general-purpose borrowings.


During the capitalization period, exchange differences related to the principal and interest on a specific
purpose borrowing denominated in foreign currency shall be capitalized as part of the cost of the
qualifying asset. Exchange differences related to general-purpose borrowings denominated in foreign
currency shall be included in profit or loss for the current period.


Qualifying assets are assets (fixed assets, investment property, inventories, etc) that necessarily take a
substantial period of time for acquisition, construction or production to get ready for their intended use or
sale.


Capitalization of borrowing costs shall be suspended during periods in which the acquisition, construction
or production of a qualifying asset is interrupted abnormally, when the interruption is for a continuous
period of more than 3 months, until the acquisition, construction or production of the qualifying asset is
resumed.
15. Intangible assets
(1) Intangible assets



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An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled
by the Group.


An intangible asset shall be initially measured at cost. The expenditures incurred on an intangible asset
shall be recognized as cost of the intangible asset only if it is probable that economic benefits associated
with the asset will flow to the Group and the cost of the asset can be measured reliably. Other expenditures
on an item asset shall be charged to profit or loss when incurred.


Land use right acquired shall normally be recognized as an intangible asset. Self-constructed buildings (e.g.
plants), related land use right and the buildings shall be separately accounted for as an intangible asset and
fixed asset. For buildings and structures purchased, the purchase consideration shall be allocated among
the land use right and the buildings on a reasonable basis. In case there is difficulty in making a reasonable
allocation, the consideration shall be recognized in full as fixed assets.


     An intangible asset with an infinite useful life shall be averagely amortized in phases using the
straight-line method over its expected useful life when the asset is available for use. Intangible assets with
indefinite useful life are not amortized.


The Group shall review the useful life of intangible asset with an infinite useful life and the amortization
method applied at period-end. A change in the useful life or amortization method used shall be accounted
for as a change in accounting estimate. For an intangible asset with an indefinite useful life, the Group
shall review the useful life of the asset. If there is evidence indicating that the period during which the
intangible assets brings in economic benefits to the Group can be predicted, the Group shall estimate the
useful life of that asset and make amortization under the amortization policies applicable to intangible
assets with finite useful life.


(2) Intangible assets impairment test method and their impairment provision
The method for impairment test and impairment provision of intangible assets is detailed in Note IV.
17―Impairment of non-current non-monetary financial asset‖.
16. Long-term prepaid expenses
Long-term prepaid expenses refer to the general expenses that occurred but shall be amortized over one year in reporting
period and later period. Long-term prepaid expenses shall amortized by straight-line method in expected benefit period.

17. Impairment of non-current non-monetary financial asset
The Group will judge if there is any indication of impairment as at the balance sheet date in respect of
non-current non-financial assets such as fixed assets, construction in progress, intangible assets with a
finite useful life, investment properties measured at cost, and long-term equity investments in subsidiaries,
joint controlled entities and associates. If there is any evidence indicating that an asset may be impaired,
recoverable amount shall be estimated for impairment test. Goodwill, intangible assets with an indefinite


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useful life and intangible assets beyond working conditions will be tested for impairment annually,
regardless of whether there is any indication of impairment.


If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount,
the impairment provision will be made according to the difference and recognized as an impairment loss.
The recoverable amount of an asset is the higher of its fair value less costs of disposal and the present
value of the future cash flows expected to be derived from the asset. An asset’s fair value is the price in a
sale agreement in an arm’s length transaction. If there is no sale agreement but the asset is traded in an
active market, fair value shall be determined based on the bid price. If there is neither sale agreement nor
active market for an asset, fair value shall be based on the best available information. Costs of disposal are
expenses attributable to disposal of the asset, including legal fee, relevant tax and surcharges,
transportation fee and direct expenses incurred to prepare the asset for its intended sale. The present value
of the future cash flows expected to be derived from the asset over the course of continued use and final
disposal is determined as the amount discounted using an appropriately selected discount rate. Provisions
for assets impairment shall be made and recognized for the individual asset. If it is not possible to estimate
the recoverable amount of the individual asset, the Group shall determine the recoverable amount of the
asset group to which the asset belongs. The asset group is the smallest group of assets capable of
generating cash flows independently.


An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in
respect of the restorable value.
18. Accrual liability
The obligation pertinent to contingencies shall be recognized as accrual liability when the following conditions are satisfied
simultaneously: (1) That obligation is a current obligation of the Group; (2) It is likely to cause any economic benefit to flow
out of the enterprise as a result of performance of the obligation; and (3) The amount of the obligation can be measured in a
reliable way.


At the balance sheet date, considering matters related to risks, uncertainties and time value of money and other factors, the
expected liabilities are measured in accordance with the best estimate of the necessary expenses for the performance of the
current obligation.


If the expenditure required paying all or part of the expected liabilities was compensated by the third party, and the amount
of compensation basically can be sure when received, it could be recognized as a separate asset. But the amount of
compensation confirmed couldn’t be more than the book value of the estimated debts.
19. Income
(1) Income of commodities sales
When the transfer of significant risks and rewards of ownership of the goods to the buyer is done, when the right of
management usually associated with ownership is not reserved, when we didn’t effectively control the goods sold, the
amount of revenue can be measured reliably. The associated economic benefits are likely to flow into the enterprise. And the
related costs incurred or to be incurred can be measured in a reliable way. Thus we realize sales income.


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The company engages in sales of cars, confirming income after the vehicle delivery to customers according to agreement,
payment received or the rights to receive payment.


(2) Income from providing labor
On condition that provision of services trade results can be reliably estimated, we confirm income from providing labor on
the balance sheet date according to the percentage of completion. The Company calculates the completion schedule through
the ratio of the costs incurred taking up of the estimated total cost.


The results of labor transaction provided can be estimated reliably only when simultaneously: ①the amount of revenue can
be measured reliably; ②the economic interests are likely to flow into the enterprise; ③the degree of completion can be
reliably determined; ④cost occurred and to be occurred can be reliably measured.



If the service transaction results couldn’t be able to reliably estimated, labor income will be calculated according to
according to amount of labor costs which has occurred and is expected to be t compensated, and labor costs occurred would
be included as expenses of the current period. Labor cost occurred which cannot be compensated will not be included as
revenue.


The Company engages in car repair services, confirming income after the car repair service is delivered to customers
according to agreement, payment received or the rights to receive payment.
(3) Use fee income
According to the relevant contract or agreement, revenue is recognized in accordance with the accrual basis.
(4) Interest income
Interest income is confirmed in accordance with time and actual interest others make use of the monetary capital of the
group
20. Government subsidy
A government subsidy means the monetary or non-monetary assets obtained free by the Group from the government, but
excluding the capital invested by the government as the owner of the enterprise. Government subsidies consist of the
government subsidies pertinent to assets and government subsidies pertinent to income.


The government subsidy with monetary assets concerned should be measured by the actual received or receivable amount
while non-monetary assets government subsidy measured by fair value; if without realizable fair value obtained, measured
by nominal amount instead. The government subsidy with nominal amount measured should reckon into current gains and
losses.


Asset-related government subsidies are recognized as deferred income and accounted into the current gains/losses equally
within service life for the relevant assets. The government subsidies pertinent to incomes, which are used for compensating
the related future expenses or losses of the enterprise shall be recognized as deferred income and should reckoned into
current gains/losses in period of when relevant expenses are recognized; if used for compensating the occurred relevant
expenses and losses, reckoned into current gains/losses directly.


As for the recognized government subsidy needs to return, if there has relevant balance of deferred incomes, relevant book


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balance of the deferred income should be written down, and the exceeded part should included in the current gains/losses; if
there has no relevant balance of deferred incomes, reckoned into current gains/losses directly.
21. Deferred income tax assets and deferred income tax liabilities
(1) The current income tax
At the balance sheet date, for the current income tax liabilities (or assets) arising during the current and previous periods,
current income tax should be calculated in line with expected payable (or return) income tax amount in accordance with the
provisions of the tax law. Calculation of the current income tax expenses on the basis of the computation of taxable income
is adjusted to the pre-tax accounting profit according to the relevant provisions of the tax law.


(2) The deferred income tax assets and deferred income tax liabilities
As for the balance between the book value of some assets and liabilities and the tax base, and those temporary difference
arisen from balance which is not recognized as an asset or liability but whose difference between the book value and tax base
could be calculable in accordance with the provisions of the tax law, we adopt debt method of balance sheet to recognize
deferred income tax assets and deferred income tax liabilities.


As for taxable temporary differences which is arisen from initial recognition of goodwill, and those related to initial
recognition of assets or liabilities arisen during trade with neither merging nor those which won’t affect the accounting profit
and taxable income (or deductible loss), related deferred tax liabilities will not be confirmed. In addition, as for temporary
differences taxable related to subsidiary companies, associated enterprises and joint venture investment, if the group is able
to control the reversal time of the temporary difference, and the temporary differences in the foreseeable future probably will
not be reversed, we also could not confirm the deferred income tax liabilities. In addition to the above condition, the group
could confirm all the other deferred income tax liabilities arising from taxable temporary differences.


As for deductible temporary differences related to initial reorganization of asset or liability arising from trades with neither
merge nor those which won’t affect the accounting profit and taxable income (or deductible loss), we’ll not recognize
relevant deferred income tax assets.


In addition, as for deductible temporary differences related to subsidiary companies, associated enterprises and joint venture
investment, if the temporary differences in the foreseeable future probably will not be reversed, we also could not confirm
the deferred income tax assets. In addition to the above condition, the group could confirm all the other deferred income tax
assets arising from deductible temporary differences within benchmark of income of taxable deductible temporary
differences.


As for deductible loss or tax deduction which to be reversed in the following years, we confirm the corresponding deferred
income tax assets within benchmark of future taxable income to be likely deducted for deductible loss and tax deduction.


On the balance sheet date, the deferred income tax assets and liabilities are measured according to the provisions of the tax
law, in accordance with the applicable tax rate during related assets to be expected recovery or related liabilities to be paid
off.


At the balance sheet date, we recheck the book value of deferred income tax assets. If in future it is unlikely to obtain
adequate taxable income to offset the benefit of the deferred income tax asset, then we write down the book value of deferred
income tax assets. When it is probable to obtain adequate taxable income, amount written down shall be reversed.

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(3) The income tax expenses
In addition to trades and current income tax and deferred income tax related to projects which are included in other
comprehensive income or directly included in owners’ interest, as well as the book value whose goodwill arranged in line
with deferred income tax arising from enterprises combination, all the other current income tax and deferred income tax
expenses or income will be included in current profit and loss.
22. Leasing
Finance lease transfers substantially all the risks and rewards related to the ownership of an asset. Its ownership may
eventually transfer, also may not. While all the other leases are classified as operating leases.


(1) The group keeps record of lease business as lessee
Rental expense of operating lease is included in the relevant asset costs or current profits and losses through the straight-line
method during every period. Initial direct costs shall be included in profit or loss for the current period. Or rent to the actual
shall be included in the current profits and losses.


(2) The group keeps record of lease business as lessor
Rental income of operating lease is included in the relevant asset costs or current profits and losses through the straight-line
method during every period. The larger amount of initial direct costs shall be capitalized when it is created, and shall be
included in the current profits and losses during the lease period in accordance with same basic as the confirmed amount by
stages. The other small amount of initial direct costs shall be included in the current profits and losses when it’s created. Or
rent to the actual shall be included in the current profits and losses.
23. Assets held for sale
If the group has made decision regarding dealing with a certain non-current assets, and assignees signed a revocable transfer
agreement, and the transfer is likely to be completed within one year, the non-current assets shall be calculated as
non-current assets held for sale which shall be without depreciation or amortization. It eventually is accounted as the lower
net amount of the book value and fair value minus the disposal expenses. Non-current assets held for sale include individual
assets and disposal group. If the disposal group is a group of assets, and goodwill acquired in a business combination is
allocated to the group of assets in accordance with the " Accounting Standards for Business Enterprise No. 8 -- Impairment
of Assets", or the disposal group is a business of the asset group, the disposal group shall comprises goodwill of enterprise
merger.


An asset or disposal group was classified as held for sale, but then no longer meet the recognition conditions of non-current
assets held for sale, the group will set it free from held for sale, and calculate it in accordance with the lower amount in the
following two items: (1) book value before being designated as held for sale, referring amount after depreciation,
amortization or value-deduction adjustment confirmed in accordance with the assumption that in the absence of being
classified as held for sale; (2) recoverable amount on the point of stop holding for sale.
24. Employee compensation
The employee benefits payable is recognized as a liability by the Group when they are providing services in the accounting
period.




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The group participates in the workers' social security system set up by government agencies, including the basic old-age
insurance, medical insurance, housing provident fund and other social security system, in accordance with the provisions.
The corresponding expenditures shall be included in the relevant asset costs or profits and losses of the current period.


If we end relationship with staff prior to the contract expires, or in order to encourage staff to accept voluntarily
salary-deduction thus we offer compensation, if the group has formulated a formal plan on the cancellation of labor
relationship or voluntary layoff proposal which will be implemented, at the same time if the group can’t unilaterally
withdraw the plan on the cancellation of labor relationship or the layoff proposal, expected liability arising from
compensation given to staff we terminate relationship with, shall be included in the current profits and losses.


Employee internal retirement plans is to use the same principle to deal with termination benefits. The group will pay staff
salary, social insurance and others from the date they stop providing service to their retire-day. This amount shall be included
in the current profits and losses (termination benefits), only when it meets the projected liabilities confirmation conditions
25. Changes of major accounting policies and accounting estimation
(1) Changes of accounting policy
No accounting policy changed in reporting period
(2) Changes of accounting estimate
No accounting estimate changed in reporting period



26. Error correction of previous accounting
No error correction of previous accounting needs to disclosed in reporting period
27. Major accounting judgment and estimate
The group need make judgment, estimation and hypothesis to book value of those unaccountable items in sheet due to inner
uncertainties of operating activities in the process of using accounting policies. These judgments, estimates and assumptions
are made in line with the group's past management experience, and in consideration of other relevant factors. These
judgments, estimates and assumptions will affect disclosure of amount of income, expenses, assets and liabilities as well as
contingent liability on the balance sheet day. However, the uncertainties in these estimates may cause significant adjustments
to book value of those asset or liability affected in the future.
The group rechecks regularly the judgment, estimation and hypothesis based on sustainable management. As for a change
affecting only the current period, the amount shall be confirmed only in the current period; for those not only affecting the
current but the future, the amount shall be confirmed in the current and future period.


At the balance sheet date, the group needs to determine amount of items of the financial statements, estimation and
hypothesis shown as the following important areas:


(1) Provision for bad debts
The group accounts for the allowance for bad debt losses according to the receivable accounting policies. Accounts
receivable is the valuation of accounts receivable can be recovered based on. Identification of devaluation of accounts
receivable needs judgments and estimates of management level. Difference between actual results and the original estimates
impact reversal of the book value accounts receivable and accounts receivable for provision for bad debts during the
estimation was changing.



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(2) Provision of inventory devaluation
According to the inventory accounting policies, the group shall accrue inventory devaluation provision as for inventory
whose cost is higher than net realizable and those obsolete or unmarketable in accordance with the lower one in cost and net
realizable value. Write-down of inventories to net realizable value is to assess the salability and net amount of prospect
realization. Identification of inventory impairment requires management’s judgment and estimation after their obtaining
conclusive evidence and consideration of the purpose for holding inventories, events effects occurring after balance sheet
date. The difference between actual results and original estimates will affect the reversal of book value and devaluation
provision of inventories during the estimation was changing.


(3) Impairment provision of non-financial non-current assets
The group takes judge on non-current assets excluding financial assets to see whether there is any sign of possible
impairment at the balance sheet date. For those intangible assets not sure on the service life, when there is any indication of
impairment, are to be tested for impairment, too, except for impairment testing performed each year. Other financial assets
outside the non-current assets, when there are signs that its carrying amount is not recoverable, tested for impairment is
needed.


The book value of the asset or asset group is higher than that of the recoverable amount, namely fair value minus the higher
net amount between the disposal expenses and the future cash flows, which show that impairment happened.


The net amount of fair value minus the disposal expenses is confirmed by referring to sales agreement price of assets of
similar bargain or observable market price, then minus the incremental costs directly attributable to the disposal of assets.


When prospecting current value of future cash flows, we need make critical judgments for the asset (or asset group) yield,
price, related operating costs and discount rate when calculating the present value. The group shall make use of relevant
materials to estimate recoverable amount, including the predictions about the production, price and related operating costs
based on reasonable and supportable assumptions.


(4) Depreciation and amortization
For the investment real estate, fixed assets and intangible assets, the group takes a straight-line depreciation and amortization
within service life in consideration of its residual value. The group regularly review service life, thus determine the
depreciation and amortization amount in each reporting period. Life is determined based on past experience of similar assets
and technology update is expected. If the previous estimate changes, we will adjust depreciation and amortization expense in
future periods.


(5) The deferred income tax assets
Within the limits that it is very likely to have sufficient taxable profits to offset losses, the group confirms deferred income
tax assets using all unused tax losses. This requires the management to use a lot of judgment to estimate the time and amount
of future taxable profits, combined with the tax planning strategy, thus confirm the amount of deferred income tax assets.


(6) The income tax
During ordinary course of business, uncertainty exists in final tax treatment and calculation of a part of trading. Whether part
of the project is in pre tax expenses requires approval of tax authorities. If the final confirmation of these tax matters differs


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from an initial estimate, the difference will affect current income tax and deferred income tax during the final period.


(7) Accrual liabilities
The group estimates and accrues corresponding provision for product quality guarantee, expected contract loss, penalty for
late delivery and others in accordance with terms of the contract, existing knowledge and experience. When such
contingencies has formed a present obligation, and the performance of the current obligation is likely to lead to the outflow
of economic benefits of the group, the group recognizes the best estimate of required expense when performing current
obligation as accrual liability. The recognition and measurement of debt is largely dependent on the judgment of
management. In the process of judgment the group needs to assess the contingent risks, uncertainties and money and the time
value and other factors.

V. Taxation
Main tax and tax rate

                    Type                                                          Tax rate

                                            Output tax calculated based on 17% of the taxable income, calculated and paid
 VAT
                                            the VAT on the difference after deducted deductible current input tax

 Operation tax                              Calculated and paid on 5% of the taxable operation amount

 City maintaining & construction tax        Calculated and paid on 7% of the turnover tax actually paid

 Education surcharge                        Calculated and paid on 3% of the turnover tax actually paid

 Local education surcharge                  Calculated and paid on 2% of the turnover tax actually paid

                                            Calculated and paid on 25% of the taxable income amount and tax by the levy
 Corporation income tax *
                                            rate

* Note: The Company and subsidiaries exercise rate of 25% in 2014, except Shenzhen New Yongtong Dongxiao Vehicle
Inspection Co., Ltd., which has taxed on levy rate.




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         VI. Enterprise consolidation and consolidated financial statements


         1. Subsidiary

         (1) Subsidiary obtained by establishment or investment


                                                                                                                                                                              In ten thousand Yuan

                                                                                                                                                                            Actual
                                                                                                                                                                                          Balance of other items
                                                   Registration                 Registered                                                                 Organization investment
             Subsidiary                    Type                 Business nature                    Business scope           Business type      Corporate                                 materially forming net
                                                      place                      capital
                                                                                                                                                              code      dated 30 June
                                                                                                                                                                                         investment to subsidiary
                                                                                                                                                                            2014
Shenzhen Tellus New Yongtong
Automobile Development Co. Ltd                                                               Inspection and maintenance
                                                                                                                           Limited liability    Huang
                                       Wholly-owned Shenzhen   Service industry   3290        of auto vehicle, property                                     192171903           5767                                --
                                                                                                                           company               Peibo
                                                                                              management, house lease
Shenzhen   SD     Tellus    Property
Management Co. Ltd                                                                                                         Limited liability Fang
                                       Wholly-owned Shenzhen   Service industry    705         Property management                                          192185088              502                              --
                                                                                                                           company             Zhidong
Shenzhen SD Tellus Real Estate Co.
Ltd                                                                                          Domestic business, material
                                                                                                                           Limited liability Fang
                                       Wholly-owned Shenzhen   Manufacture        3115       supply industry, self-owned                                    192195470           3115                                --
                                                                                                                           company             Zhidong
                                                                                                  property leasing
Shenzhen Tellus Real Estate Exchange
Co. Ltd                                                                                        Agency, broker of real      Limited liability Fang
                                       Wholly-owned Shenzhen   Service industry    200                                                                      192282945              200                              --
                                                                                                  estate exchange          company             Zhidong




                                                                                                                                                                                                       70
                                                                                                                                              深圳市特力(集团)股份有限公司 2014 年半年度报告全文


Shenzhen New Yongtong Automobile
Inspection Equipment Co. Ltd                                                                    Production of inspection

                                                                                                     equipment for auto        Limited liability    Huang
                                        Holding       Shenzhen   Service industry    1961                                                                       715275892         1000                       --
                                                                                                    vehicles, self-owned       company               Peibo

                                                                                                      property leasing

Shenzhen Dongchang Yongtong Motor Indirect                                                                                     Limited liability
                                                      Shenzhen   Service industry     150       Inspection of auto vehicle                         Li Jinlong    775581736         143                       --
Vehicle Detection Co., Ltd.             holding                                                                                company

Shenzhen New Yongtong Dongxiao                                                                 Comprehensive inspection
                                        Indirect                                                                               Limited liability
Vehicle Inspection Co., Ltd.                          Shenzhen   Service industry     150      on     road    transportation                       Li Jinlong    775581744         143                       --
                                            holding                                                                            company
                                                                                               vehicle

Shenzhen Bao’an Shiquan Industrial Indirect                                                   Industrial,         domestic
                                                                                                                               Limited liability Fang
Co., Ltd                                wholly-owned Shenzhen       Commerce          200      commerce      and    material                                     192474111         150                       --
                                                                                                                               company             Zhidong
                                        subsidiary                                             supply& sales industry




                  (Continued)

                                                            Holding proportion       Voting right        Statements combined Minority                Amount in minority interest used for writing down Not
                               Subsidiary                          (%)              proportion (%)       or not              interest                            minority gain and loss
                                                                                                                                                                                                        e
                                                                                                                   Yes
           Shenzhen Tellus New Yongtong Automobile
                                                                   100                   100                                             --                                  --
           Development Co. Ltd
                                                                                                                   Yes
           Shenzhen SD Tellus Property Management Co. Ltd          100                   100                                             --                                  --
                                                                                                                   Yes
           Shenzhen SD Tellus Real Estate Co. Ltd                  100                   100                                             --                                  --
                                                                                                                   Yes
           Shenzhen Tellus Real Estate Exchange Co. Ltd            100                   100                                             --                                  --

                                                                                                                                                                                                       71
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                                                                  Yes
Shenzhen New Yongtong Automobile Inspection
                                                      51    51          94                           --
Equipment Co. Ltd
                                                                  Yes
Shenzhen Dongchang Yongtong Motor Vehicle
                                                      95    95          -18                          --
Detection Co., Ltd.
                                                                  Yes
Shenzhen    New       Yongtong   Dongxiao   Vehicle
                                                      95    95          -8                           --
Inspection Co., Ltd.
                                                                  Yes
Shenzhen Bao’an Shiquan Industrial Co., Ltd          100   100         --                           --




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      (2) Subsidiaries acquired by business combination under the common control


                                                                                                                                                                                 In ten thousand Yuan

                                                                                                                                                                                         Balance of other

                                                                                                                                                                             Actual      items materially
                                                Type of     Registered                 Registered                                                             Organization
           Name of subsidiary                                          Business nature               Business scope        Business type        Corporate                investment at     forming net
                                               subsidiary     place
                                                                                        capital                                                                  code
                                                                                                                                                                           year-end       investment to
                                                                                                                                                                                           subsidiary

Shenzhen Automobile                                                                                    Self-owned
Industry and Trading                                                                                property leasing, Limited liability
Company                                      Wholly-owned Shenzhen       Commerce           5896                                               Ren Yongjian    192194881       12625                         --
                                                                                                     automobile and          company

                                                                                                    accessories selling


Shenzhen SD Huari                                                                                      Automobile
Automobile Enterprise Co.                                                                            maintenance &        Limited liability
Limited                                         Holding     Shenzhen Service industry   USD500                                                   Lv Hang       618830081        1922                         --
                                                                                                     production and          company

                                                                                                    sales of accessory
Shenzhen Zhongtian
Industrial Co. Ltd                                                                                                        Limited liability
                                             Wholly-owned Shenzhen Service industry          725 Property leasing                              Fang Zhidong    192182485        1071                         --
                                                                                                                             company

Shenzhen Huari Toyota Automobile Co.                                                                   Automobile         Limited liability
                                                Holding     Shenzhen     Commerce            200                                                 Lv Hang       19237652X         181                         --
Ltd                                                                                                       selling            company

Shenzhen    Huari    Anxin      Automobile      Indirect                                               Automobile         Limited liability
                                                            Shenzhen Service industry        150                                                 Li Jinlong    781385280         150                         --
Inspection Ltd                                  holding                                                 inspection           company

                                                                                                                                                                                                        73
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                                                                                                       Motor vehicles

Shenzhen Automotive Industry Supply              Indirect                                                  and parts,    Limited liability
                                                            Shenzhen Service industry         1111                                            Liang Wenjun 192189193              648                    --
Corporation                                      holding                                                   chemicals,       company

                                                                                                           instruments

      (Continued)
                                                                                             Statements
                                                  Holding proportion Voting right proportion                                                          Amount in minority interest used for
                  Subsidiary                                                                 combined or Minority interest                                                                   Note
                                                         (%)                   (%)                                                                    writing down minority gain and loss
                                                                                             not
                                                                                                     Yes
Shenzhen Automobile                                              100                    100                                                      --                                     --
                                                                                                     Yes
Shenzhen SD Huari Automobile Enterprise
                                                                  60                     60
Co.Limited                                                                                                                                    1,515                                     --
                                                                                                     Yes
Shenzhen Zhongtian Industrial Co. Ltd                            100                    100                                                      --                                     --
                                                                                                     Yes
Shenzhen Huari Toyota Automobile Co. Ltd                          60                     60                                                    -419                                     --
                                                                                                     Yes
Shenzhen Huari Anxin Automobile Inspection
                                                                 100                    100                                                      --                                     --
Ltd
                                                                                                     Yes
Shenzhen      Automotive   Industry     Supply
                                                                 100                    100                                                      --                                     --
Corporation




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 3. The Company has no special purposes entity or operation entity where controlling right is
 formed under entrusted operation or leasing
 4. There are no entities newly included in consolidate scope during the reporting period and entities
 ceasing to be included in consolidate scope during the reporting period
 5. Business combination under the same control in Period
 No business combined under the same control in Period
 6. Business combination under the different control in Period
 No business combined under the different control in Period
 7. Subsidiary reduced in the Period due to sales of equity that loss controlling rights
 No subsidiary reduced in the Period due to sales of equity that loss controlling rights
 8. Counter purchase in the Year
 No counter purchase in the Period
 9. Merger in the Year
 No merger in the Period
 10. Conversion rate of the main statement for foreign operational entity
 The Company has no foreign operational entity


 VII. Notes to major items in consolidated financial statements
 1. Monetary fund

                                              2014-6-30                                       2013-12-31

             Item             Foreign         Exchange                                          Exchange         RMB
                                                            RMB conversion Foreign currency
                              currency          rate                                              rate         conversion

Stock cash                                                       146,293.44                                     126,751.33

Including: RMB                           —            —        125,567.25              —              —     102,105.49

HKD                              3,718.35      0.79375             2,951.45       21,419.47       0.78623        16,840.63

USD                                856.00       6.1528             5,266.80        1,045.35        6.0969          6,373.38

JPY                            205,655.00      0.06082            12,507.94       24,784.58        0.0578          1,431.83

Bank deposits:                                                55,712,194.45                                   63,018,754.91

Including: RMB                           —            —     55,712,194.45              —              — 63,018,754.91

Other monetary capital*Note

①                                                             1,248,222.56                                    6,753,285.32

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                                                   2014-6-30                                          2013-12-31

             Item                   Foreign        Exchange                                             Exchange         RMB
                                                                 RMB conversion Foreign currency
                                   currency          rate                                                 rate         conversion

Including: RMB                                —            —      1,248,222.56                 —              —    6,753,285.32

            Total                                                  57,106,710.45                                      69,898,791.56

 *Note ① Balance at the period-end of other monetary capital included bank acceptance deposits RMB 1,245,130.38.

 2. Account receivable

 (1) Account receivable by type


                                                                                              2014-6-30

                               Type                                          Book balance                Provision for bad debt

                                                                                        Proportion                       Proportion
                                                                         Amount                           Amount
                                                                                           (%)                              (%)

Accounts receivable with large single amount and accrued for            20,131,654.12        41.09       20,131,654.12        100.00

provision of bad debt on a single basis

Accounts receivable accrued for provision of bad debt by age             8,585,797.08        17.53        4,075,470.12         47.47

group

Accounts receivable with insignificant single amount but accrued        20,273,298.57        41.38       20,273,298.57        100.00

for provision of bad debt on a single basis

                              Total                                     48,990,749.77       100.00       44,480,422.81         90.79

   (Continued)
                                                                                             2013-12-31

                               Type                                          Book balance                Provision for bad debt

                                                                                        Proportion                       Proportion
                                                                         Amount                           Amount
                                                                                           (%)                              (%)

Accounts receivable with large single amount and accrued for            20,131,654.12        40.69      20,131,654.12        100.00
provision of bad debt on a single basis

Accounts receivable accrued for provision of bad debt by age             9,069,724.07        18.33       4,052,985.29         44.69
group

Accounts receivable with insignificant single amount but accrued        20,273,298.57        40.98      20,273,298.57        100.00
for provision of bad debt on a single basis

                               Type                                     49,474,676.76       100.00      44,457,937.98         89.86


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  (2) Account receivable by age group
                                          2014-6-30                                               2013-12-31
       Item
                               Amount                    Proportion (%)               Amount                     Proportion (%)

Within 1 year                           186,339.71                        0.38                 453,674.83                        0.92

1-2 years                                 8,122.90                        0.02                 358,715.77                        0.73

2-3 years                               402,010.86                        0.82                 536,004.01                        1.08

Over 3 years                         48,394,276.30                      98.78             48,126,282.15                      97.27

       Total                         48,990,749.77                    100.00              49,474,676.76                     100.00

       (3) Withdrawal of provision for bad debt

       ①Accounts receivable with large single amount and accrued for provision of bad debt on a single basis

                                                                   Provision for     Accrual
                     Debtor                    Book balance                                                  Reasons
                                                                      bad debt        ratio

Shenzhen Jinlu Industry and Trade Co.,                                                          Has    greater     uncertainty    in
                                                  9,846,607.00       9,846,607.00    100%
Ltd.                                                                                            collection

Guangdong Zhanjiang Sanxing Auto                                                     100%       Not expected to collected due to
                                                  4,060,329.44       4,060,329.44
Service Co., Ltd.                                                                               long account age

Huizhou         Jiandacheng       Daoqiao                                            100%       Unlikely to collected
                                                  2,021,657.70       2,021,657.70
Engineering Company

Jiangling Automobile Factory                                                         100%       Not expected to collected due to
                                                  1,191,059.98       1,191,059.98
                                                                                                long account age

Guangdong Materials Group Corp.                                                      100%       Not expected to collected due to
                                                  1,862,000.00       1,862,000.00
                                                                                                long account age

Yangjiang Auto Trade Co., Ltd.                                                       100%       Not expected to collected due to
                                                  1,150,000.00       1,150,000.00
                                                                                                long account age

                     Total                     20,131,654.12        20,131,654.12    100%

       ②Accounts receivable accrued for provision of bad debt by age group
                                                    2014-6-30                                      2013-12-31

               Age                      Book balance                                     Book balance
                                                                 Provision for                                       Provision for
                                                    Proportion                                        Proportion
                                    Amount                         bad debt          Amount                            bad debt
                                                       (%)                                               (%)

Within 1 year                         186,339.71          2.17                   -     453,674.83            5.00                  -

1-2 years                                8,122.90         0.09            406.15       358,715.77            3.96         6,700.05


                                                                                                                                  77
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2-3 years                             402,010.86         4.68        80,402.17          536,004.01          5.91      107,200.80

Over 3 years                         7,989,323.61     93.05       3,994,661.81        7,721,329.46         85.13 3,939,084.44

            Total                    8,585,797.08    100.00       4,075,470.12        9,069,724.07        100.00 4,052,985.29

      ③Accounts receivable with insignificant single amount but accrued for provision of bad
debt on a single basis

                                                             Accrual ratio   Provision for
        Accounts receivable               Book balance                                                    Reasons
                                                                                 bad debt

                                                                    100%                     Not expected to collected due to
 Dadong Company
                                                801,380.16                        801,380.16 long account age

                                                                    100%                     Not expected to collected due to
 Qingling Automobile Company
                                                695,848.00                        695,848.00 long account age

 Shanghai      Automobile     Industry                              100%                     Not expected to collected due to

 Supply and Marketing Company                   641,341.90                        641,341.90 long account age

 Zhongqi        Trade       Guangzhou                               100%                     Not expected to collected due to

 Company                                        558,000.00                        558,000.00 long account age

 Guangdong Materials Group Corp.                                    100%                     Not expected to collected due to

 Automobile Trade Company                       395,400.00                        395,400.00 long account age

                                                                    100%                     Not expected to collected due to
 Yunnan Lanjian Factory
                                                389,640.00                        389,640.00 long account age

                                                                    100%                     Not expected to collected due to
 Guangdong Materials Trade Center
                                                387,000.00                        387,000.00 long account age

                                                                    100%                     Not expected to collected due to
 Other company
                                            16,404,688.51                    16,404,688.51 long account age

                 Total                      20,273,298.57           100%     20,273,298.57


(4) No account receivables actually written-off during the reporting period

(5) No account receivables due from the shareholders holding 5% (5% included) or above voting shares of
the Company during the reporting period

(6) Top 5 account receivable


                                                    Relationship with                                              Proportion in
               Name of the company                                            Amount              Terms
                                                      the Company                                                  total account



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                                                                                                                  receivables (%)


Shenzhen Jinlu Industry and Trade Co., Ltd.           Non-related party         9,846,607.00      Over 5 years                19.79

Guangdong Zhanjiang Sanxing Auto Service Co., Non-related party

Ltd.                                                                            4,060,329.44      Over 5 years                 8.16

Huizhou    Jiandacheng     Daoqiao     Engineering
                                                      Non-related party         2,021,657.70
Company                                                                                           Over 5 years                 4.06

Guangdong Materials Group Corp.                       Non-related party         1,862,000.00      Over 5 years                 3.74

Jiangling Automobile Factory                          Non-related party         1,191,059.98      Over 5 years                 2.39

                      Total                                                    18,981,654.12                                  38.14


(7) Account receivables due from related parties


Found more details in 6(1) Receivable and payable of related parties in Note VIII


3. Other account receivables

(1) Other account receivable by type


                                                                                                2014-6-30

                                Type                                          Book balance              Provision for bad debt

                                                                                           Proportion                    Proportion
                                                                           Amount                        Amount
                                                                                              (%)                           (%)

Other accounts receivable with large single amount and accrued
                                                                           37,789,294.43        60.87    37,789,294.43       100.00
for provision of bad debt on a single basis

Other accounts receivable accrued for provision of bad debt by age
                                                                           14,884,815.11        23.98     4,627,906.52        31.09
group

Other accounts receivable with insignificant single amount but
                                                                            9,403,872.62        15.15     9,403,872.62       100.00
accrued for provision of bad debt on a single basis

                               Total                                       62,077,982.16       100.00    51,821,073.57        83.48

  (Continued)

                                                                                                2013-12-31

                                Type                                          Book balance              Provision for bad debt

                                                                                           Proportion                    Proportion
                                                                           Amount                        Amount
                                                                                              (%)                           (%)

Other accounts receivable with large single amount and accrued            37,789,294.43        63.15    37,789,294.43        100.00


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                                                                                                             2013-12-31

                                        Type                                                Book balance              Provision for bad debt

                                                                                                     Proportion                      Proportion
                                                                                      Amount                          Amount
                                                                                                        (%)                             (%)

  for provision of bad debt on a single basis

  Other accounts receivable accrued for provision of bad debt by age
                                                                                     12,643,148.86           21.13    4,614,792.17         36.5
  group

  Other accounts receivable with insignificant single amount but
                                                                                      9,403,872.62           15.72    9,403,872.62       100.00
  accrued for provision of bad debt on a single basis

                                        Total                                        59,836,315.91         100.00    51,807,959.22        86.58

       (2) Other account receivable by age

                                                    2014-6-30                                                   2013-12-31
           Item
                                    Amount                          Proportion (%)                   Amount                  Proportion (%)

  Within 1 year                                  5,253,797.11                        8.46                   3,106,182.90                   5.19

  1-2 years                                       534,983.49                         0.86                    672,196.31                    1.12

  2-3 years                                       142,719.64                         0.23                    602,961.71                    1.01

  Over 3 years                                  56,146,481.92                      90.45                   55,454,974.99                  92.68

           Total                                62,077,982.16                     100.00                   59,836,315.91                 100.00

   (3) Withdrawal of provision for bad debt
   ①Other accounts receivable with large single amount and accrued for provision of bad debt
   on a single basis

                                                                               Provision for      Accrual
       Other accounts receivable                     Book amount                                                           Reasons
                                                                                 bad debt          ratio

Zhongqi     South     China      Auto     Sales                                                                  Not expected to collected due to
                                                                9,832,956.37       9,832,956.37       100%
Company                                                                                                          long account age

South Industry & TRADE Shenzhen                                                                                  Not expected to collected due to
                                                                7,359,060.75       7,359,060.75
Industrial Company                                                                                    100%       long account age

                                                                                                                 Win a lawsuit, no executable
                                                                5,000,000.00       5,000,000.00
Shenzhen Zhonghao (Group) Co., Ltd.                                                                   100%       assets from adversary

Gold      Beili     Electrical    Appliances                                                                     Not expected to collected due to

Company                                                         2,706,983.51       2,706,983.51       100%       long account age




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                                                                            Provision for      Accrual
      Other accounts receivable                        Book amount                                                   Reasons
                                                                              bad debt          ratio

                                                                                                           Not expected to collected due to
                                                             2,418,512.90       2,418,512.90       100%
City Xingtai Trade Co., Ltd.                                                                               the non-existence of the company

Shenzhen Petrochemical Group                                 1,888,329.19       1,888,329.19       100%    Unlikely to collected

                                                                                                           Not expected to collected due to

Huatong Package Co., Ltd.                                    1,212,373.79       1,212,373.79       100%    long account age

Heyuan Dongfeng Technology Service                                                                         Not expected to collected due to

station                                                        930,000.00        930,000.00        100%    long account age

Shenzhen South Great Wall Investment                                                                       Has      greater     uncertainty        in

Holding Co., Ltd.                                              819,460.91        819,460.91        100%    collection

Shenzhen       Xiandao         Chemical     New                                                            Not expected to collected due to

Materials Company                                              708,072.26        708,072.26        100%    long account age

Shenzhen           Baodong            Property                                                             Not expected to collected due to

Development Company                                            609,773.00        609,773.00        100%    long account age

                                                                                                           Not expected to collected due to
Others                                                       4,303,771.75       4,303,771.75       100%
                                                                                                           long account age

                       Total                                37,789,294.43     37,789,294.43        100%

           ②Other accounts receivable accrued for provision of bad debt by age group

                                                         2014-6-30                                         2013-12-31

               Age                           Book balance              Provision for              Book balance              Provision for bad
                                                        Proportion                                             Proportion
                                      Amount                             bad debt              Amount                             debt
                                                           (%)                                                    (%)

   Within 1 year                      5,253,797.11             35.30                   --       3,106,182.90        24.56                     --

   1-2 years                              534,983.49            3.59         26,749.18           672,196.31          5.32          24,054.83

   2-3 years                              142,719.64            0.96         28,543.93           143,619.69          1.14          58,123.93

   Over 3 years                       8,953,314.87             60.15      4,572,613.41          8,721,149.96        68.98       4,532,613.41

               Total                 14,884,815.11            100.00      4,627,906.52         12,643,148.86      100.00        4,614,792.17

           ③Other accounts receivable with insignificant single amount but accrued for provision
    of bad debt on a single basis at period-end




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                                                                               Provision for bad
        Other accounts receivable       Book balance       Accrual ratio (%)                                      Reasons
                                                                                     debt

      Huashengchang            Auto                                                                 Not expected to collected due to
                                                                      100.00
      Company                                463,912.46                               463,912.46 long account age

      Renminbei       branch       of                                                               Not expected to collected due to
                                                                      100.00
      Agricultural Bank of China             247,219.98                               247,219.98 long account age

      Account for employees to                                                                      Not expected to collected due to
                                                                      100.00
      purchase properties                    217,892.57                               217,892.57 long account age

                                                                                                    Not expected to collected due to
                                                                      100.00
      Liang Rongde                           182,133.26                               182,133.26 long account age

      Shensha Industry & Trade                                                                      Not expected to collected due to
                                                                      100.00
      Company                                134,835.20                               134,835.20 long account age

      Chengdu Airplane Design                                                                       Not expected to collected due to
                                                                      100.00
      Institute                              130,000.00                               130,000.00 long account age

                                                                                                    Not expected to collected due to
                                            8,027,879.15              100.00        8,027,879.15
      Other company                                                                                 long account age

                   Total                    9,403,872.62                            9,403,872.62


         (4) No other receivables actually written-off during the reporting period

       (5) No other receivables due from the shareholders holding 5% (5% included) or above voting shares of
       the Company during the reporting period

       (6) Top 5 other account receivable


                                                           Relationship with                                        Proportion in total other
                  Name of the company                                              Amount             Terms
                                                             the Company                                            account receivables (%)

Zhongqi South China Auto Sales Company                     Non-related party     9,832,956.37      Over 3 years                         16.43

South Industry & TRADE Shenzhen Industrial Company         Non-related party     7,359,060.75      Over 3 years                         12.30

Shenzhen Zhonghao (Group) Co., Ltd.                        Non-related party     5,000,000.00      Over 3 years                          8.36

Shenzhen Kaifeng Special Vehicles Industry Co., Ltd.       Non-related party     4,413,728.50      Over 3 years                          7.38

Jinbeili Home Appliance Company                            Non-related party     2,706,983.51      Over 3 years                          4.52

                           Total                                                29,312,729.13                                           48.99



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   (7) Other receivables due from related parties

 Found more details in 6(1) Receivable and payable of related parties in Note VIII

 4. Payment in advance

   (1) Payment in advance by age

                                         2014-6-30                                                    2013-12-31
       Age
                               Amount                  Proportion (%)                   Amount                      Proportion (%)

Within 1 year                     10,200,986.16                         99.12              8,210,636.79                            98.81

1-2 years                                       --                         --                              --                            --

2-3 years                                       --                         --                     8,360.00                             0.10

Over 3 years                            90,577.94                        0.88                 90,577.94                                1.09

       Total                      10,291,564.10                        100.00              8,309,574.73                           100.00

   (2) Main units of payment in advance

                                             Relationship with                             Time for
            Name of the company                                          Amount                                    Unsettled reasons
                                               the Company                                 advances

FAW-Toyota        Automobile      Selling                                                                       Commodity        has    not
                                                 Supplier              7,497,745.23                    2014
Company                                                                                                          been collected

Toyota Motor (China) Investment Co.,                                                                            Commodity        has    not
                                                 Supplier              1,523,300.27                    2014
Ltd.                                                                                                            been collected

                      Total                                            9,021,045.50


  (3) No shareholders holding 5% (5% included) or above voting shares of the Company in
 payments in advance during the reporting period

 5. Inventory

 (1) Classification


                                                                            2014-6-30
               Item
                                            Book balance                 Depreciation provision                   Book value

 Raw materials                                       14,870,156.16                14,771,812.17                             98,343.99


 Low value consumable                                       2,794.79                              -                          2,794.79




                                                                             &nbs