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特力A(000025)公告正文

特 力B:2016年半年度报告(英文版)

公告日期:2016-08-26

                    深圳市特力(集团)股份有限公司 2016 年半年度报告全文




SHENZHEN TELLUS HOLDING CO., LTD

       SEMI-ANNUAL REPORT 2016




            August 2016




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                                             深圳市特力(集团)股份有限公司 2016 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, Yang Jianping, person in charger of

accounting works and Ke Wensheng, person in charge of accounting organ

(accounting principal) hereby confirm that the Financial Report of Semi-Annual

Report 2016 is authentic, accurate and complete.




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                                                                            深圳市特力(集团)股份有限公司 2016 年半年度报告全文




                                                             Content
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 ............................................................................................................ 24

Section VI Changes in shares and particular about shareholders............................................... 38

Section VII Preferred Stock………………………………………………………………………42

Section VIII Directors, Supervisors and Senior Executives ....................................................... 43

Section IX Financial Report ............................................................................................................ 44

Section X Documents Available for Reference ........................................................................... 158




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                                                                     深圳市特力(集团)股份有限公司 2016 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 January – June of 2016

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

Zhongtian Company                            Refers to Shenzhen Zhongtian Industrial Co., Ltd.

Zung Fu Company                              Refers to Shenzhen Zung Fu Tellus Auto Service Co., Ltd.

                                                         Shenzhen SD Huari Automobile Enterprise Co.Limited and Shenzhen
Huari Company                                Refers to
                                                         Huari Toyota Auto-Sales Service Co., Ltd.




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                                                                        深圳市特力(集团)股份有限公司 2016 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

Name                                        Qi Peng                                       Sun Bolun

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

Tel.                                        (0755)83989378                                (0755)83989339

Fax.                                        (0755)83989386                                (0755)83989386

E-mail                                      ir@tellus.cn                                  ir@tellus.cn


III. Others

1. Way of contact

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

Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,
found more details in Annual Report 2015


2. Information disclosure and preparation place

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

The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2015

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                                                                          深圳市特力(集团)股份有限公司 2016 年半年度报告全文


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 2015.




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        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)                                 157,147,166.48                158,491,781.84                         -0.85%

Net profit attributable to shareholders of
                                                          17,747,952.63                  7,650,356.02                      131.99%
the listed company(RMB)

Net profit attributable to shareholders of
the listed company after deducting                        15,449,772.01                  7,516,539.71                      105.54%
non-recurring gains and losses(RMB)

Net cash flow arising from operating
                                                          23,971,506.36                 33,862,882.70                       -29.21%
activities(RMB)

Basic earnings per share (RMB/Share)                               0.0597                      0.0296                      101.69%

Diluted earnings per share (RMB/Share)                             0.0597                      0.0296                      101.69%

Weighted average ROE                                               2.02%                       1.49%                           0.53%

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

Total assets (RMB)                                    1,167,329,464.83              1,168,667,927.49                         -0.11%

Net assets attributable to shareholder of
                                                        885,917,004.95                868,169,052.32                           2.04%
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 2016 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
                                                                                         26,866.53
write-off that accrued for impairment of assets)

Profit and loss of assets delegation on others’ investment or
                                                                                      2,291,789.05 Earnings from financial products
management

Other non-operating income and expenditure except for the
                                                                                         12,649.53
aforementioned items

     Impact on minority shareholders’ equity (post-tax)                                 33,124.49

Total                                                                                 2,298,180.62                   --

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 2016 年半年度报告全文




                          Section IV. Report of the Board of Directors

I. Introduction

The first half year of 2016, under the background of macro-economic environment continued depression, Tellus
achieved a favorable operation results by means of innovation thinking and open-sourcing and potential-tapping,
total profit and net profit attributable to parent company have a major growth from a year earlier. In first half year
of 2016, operation revenue achived 157.15 million Yuan with 1.34 million Yuan down compared with last
period’s 158.49 million Yuan, a 0.85% declined; total profit reached 18.57 million Yuan with 10.06 million Yuan
growth compared with last period’s 8.51 million Yuan, a growth of 118.21%; the net profit attributable to parent
company reached 17.75 million Yuan with 10.10 million Yuan growth compared with last period’s 7.65 million
Yuan, a growth of 131.99%. Main reasons of the above mentioned growth are as: the rental income and
investment income increased,the financial expenses declined.
On current profit of main business increased substantially, transition work of Tellus was carried out with the
utmost propriety and promoted actively.During the period, as entered the retail market of jewelry industry, the
Anhui Tellus Star Jewelry Investment Co., Ltd. was registered; the regional sourcing platform for the jewelry
market is working on a proactively way; as for the physical platform of jewelry, 1st pahse of Tellus Shuibei
Jewelry Building is in its stage of inviting outside investments. Tullus will continue to expand way of thinking in
second half year, to maintain steady development in order to completed vary economic indicators for the whole
year.




II. Main business analysis

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

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

Operation revenue                      157,147,166.48            158,491,781.84                    -0.85%

Operation cost                         112,822,380.88            116,939,503.91                    -3.52%

                                                                                                             Owing to the changes of
                                                                                                             calculation caliber,
Sales expenses                           7,399,760.23              9,520,419.70                   -22.27% a fraction of sales
                                                                                                             expenses re-classify to
                                                                                                             operation costs

                                                                                                             The remuneration
Administrative expenses                 20,805,027.12             16,780,916.30                    23.98% expenses rise resulted by
                                                                                                             the year-end awards



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                                                                                   accrual by month

                                                                                   The interest expenditure
                                                                                   declined from a year
Financial cost                 289,000.78       4,529,677.17             -93.62%
                                                                                   earlier due to loans
                                                                                   payment

                                                                                   Current income tax
                                                                                   declined due to the profit
                                                                                   decreased from a year
                                                                                   earlier by subsidiary
                                                                                   Zhongtain Company and
                                                                                   Auto Industrial and
                                                                                   Trading Company, profit
Income tax expense             597,869.12       1,200,717.31             -50.21%
                                                                                   growth resulted by the
                                                                                   increased of profit from
                                                                                   parent company, and
                                                                                   there was a undistributed
                                                                                   deficit for previous,
                                                                                   which shows no impact
                                                                                   on current income tax

                                                                                   Operational net cash
                                                                                   inflow increased resulted
                                                                                   by the selling of stock
Net cash flow arising
                            23,971,506.36     33,862,882.70              -29.21% vehicles at year-end by
from operation activities
                                                                                   Huari Toyota Company
                                                                                   at same period of last
                                                                                   year

Net cash flow arising                                                              More inflows on the
from investment             24,320,840.63    -332,753,974.96                       bank capital preservation
activities                                                                         products in the Period

                                                                                   Borrowing interests paid
                                                                                   to SDG in the Period; at
Net cash flow arising                                                              same period of last year,
                            -16,495,591.67   350,100,271.84             -104.71%
from financing activities                                                          target private placement
                                                                                   made the cash inflow
                                                                                   increased

Net increase of cash and
                            31,796,882.13     51,209,174.82              -37.91%
cash equivalent

                                                                                   Earnings from financial
                                                                                   products increased and
Investment earnings          5,100,570.96        624,390.10              716.89% affiliated company Zung
                                                                                   Fu Company earnings in
                                                                                   the Period


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                                                                         深圳市特力(集团)股份有限公司 2016 年半年度报告全文


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

The first half year of 2016, under the background of macro-economic environment continued depression, Tellus
achieved a favorable operation results by means of innovation thinking and open-sourcing and potential-tapping.
Revenue of property leasing have a sustainable growth, parts of the enterprise with deficits for a long-time have
reducing losses, total profit and net profit attributable to parent company have a major growth from a year earlier.



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              67,525,711.38     66,364,064.95             1.72%           -13.40%            -13.38%            -0.02%

Auto      inspection
and maintenance
                        26,625,898.24     20,799,253.76            21.88%             2.52%              8.95%            -4.61%
and      accessories
sales

Rental          and
                        59,769,842.57     24,707,780.69            58.66%            17.60%            24.55%             -2.31%
service

According to products

Auto sales              67,525,711.38     66,364,064.95             1.72%           -13.40%            -13.38%            -0.02%

Auto      inspection
and maintenance
                        26,625,898.24     20,799,253.76            21.88%             2.52%              8.95%            -4.61%
and      accessories
sales

Rental and
                        59,769,842.57     24,707,780.69            58.66%            17.60%            24.55%             -2.31%
service

According to region

Shenzhen               153,921,452.19   111,871,099.40             27.32%             -0.55%            -3.18%             1.98%




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IV. Core competitive-ness analysis

Shenzhen is the main gathering place of China's jewelry industry, Shuibei is the core gathering area of Shenzhen
jewelry industry, the company holds a large number of properties in Shuibei area, and has provided various stable
services for many leading enterprises in jewelry industry in Shenzhen and established good cooperative relations
with many jewelry enterprises over the years; the project of Tellus Jimeng Gold Jewelry Industrial Park located in
Shuibei core area has been listed as one of the 11 pilot projects in the transformation of old industrial zones of
Shenzhen City, the company shall become the largest owner of this industrial park through its wholly owned and
joint owned and associated enterprises. Currently all renovation projects in the industrial park have almost been
completed and will be put into use in 2016. The company can make use of leading enterprises in jewelry industry
that have strategic partnership with the company to gather the jewelry enterprises and attract talents to enter the
industrial park.
As a state-owned holding listed company, the company has good market credibility, and possesses diversified and
low-cost financing channels, by virtue of the identity of the third party jewelry operator, attracts distributors and
wholesalers by providing resources, financial services and capital operation to the jewelry manufacturers, and
builds regional channel platform and retail-end platform. Eventually created an ecological circle for Tellus jewelry
industry, therefore, the Company integration-systematization industry chain within the ecological circle by
gathering manufacturers, distributors, and terminal retailer resources on behalf of the comprehensive service
operators of jewelry industry, and bringing a preliminary influence on the industry’s upstream and downstream.



V. Investment analysis

1. Equity investment outside

(1) Investment outside

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


(2) Holding equity of financial enterprise

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


(3) Securities investment

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

(4)Explanation on equity of other listed company held



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□ Applicable      √ Not applicable

The Company had no equity of other listed company held in Period.


2. Trust financing, investment of derivatives and entrustment loan

(1) Trust financing

√ Applicable □ Not applicable
                                                                                                                          In ten thousand Yuan

                                                                                                             Amount
                                                                                                            of reserve
                                                                                                Principal      for
                          Whether                                                                                                     Actual
              Related                                Trust                          Criterial   actually    devaluati Anticipat
                           related                                                                                                   gains/loss
  Name       relationsh                  Type       financing Start date End date for fixing collected        on of         ed
                          trade or                                                                                                     es in
                 ip                                 amount                          reward       in the     withdrawi income
                               not                                                                                                    period
                                                                                                 Period      ng (if
                                                                                                            applicable
                                                                                                                )

Shenzhen
Huali                                                                              Maturity
                                       Preservati
Branch of                                                                          of
                                       on and                  2015-10- 2016-01-
China        N/A          No                           3,000                        principal       3,000             0       26.3        26.3
                                       income-g                16       16
Everbrigh                                                                           and
                                       uarantee
t Bank                                                                              interest
Co., Ltd.

Shenzhen
                                                                                   Maturity
Tianan
                                                                                   of
Branch of                              Floating                2015-10- 2016-03-
             N/A          No                           3,000                       principal        3,000             0     56.61        56.61
Industrial                             proceeds                15       31
                                                                                   and
Bank Co.,
                                                                                   interest
Ltd.

Shenzhen
                                                                                   Maturity
Tianan
                                                                                   of
Branch of                              Floating                2015-10- 2016-04-
             N/A          No                           5,000                       principal        5,000             0     92.05        92.05
Industrial                             proceeds                29       14
                                                                                   and
Bank Co.,
                                                                                   interest
Ltd.

Shenzhen                                                                           Maturity
Branch of                                                                          of
                                       Floating                2015-11- 2016-02-
China        N/A          No                           3,000                       principal        3,000             0     24.21        24.21
                                       proceeds                23       16
CITIC                                                                              and
Bank                                                                               interest


                                                                                                                                               13
                                                          深圳市特力(集团)股份有限公司 2016 年半年度报告全文


Corporati
on
Limited

Shenzhen
Huali
                       Preservati
Branch of
                       on and               2015-11- 2016-2-1 Contract
China       N/A   No                3,000                                   3,000      0      24.03    24.03
                       income-g             13       3          assumpsit
Everbrigh
                       uarantee
t Bank
Co., Ltd.

Sales
                                                                Maturity
departme
                                                                of
nt of                  Floating             2015-11- Due on                                Uncertain
            N/A   No                1,000                       principal      0       0                  0
Shenzhen               proceeds             18       demand                                       ty
                                                                and
Branch of
                                                                interest
JSBC

Sales
                                                                Maturity
departme
                                                                of
nt of                  Floating             2015-12- Due on                                Uncertain
            N/A   No                3,000                       principal   1,000      0               11.93
Shenzhen               proceeds             18       demand                                       ty
                                                                and
Branch of
                                                                interest
JSBC

Shenzhen
Huali                                                           Maturity
Branch of                                                       of
                       Floating             2016-01- 2016-04-
China       N/A   No                3,000                       principal   3,000      0      23.65    23.65
                       proceeds             18       18
Everbrigh                                                       and
t Bank                                                          interest
Co., Ltd.

Shenzhen
                                                                Maturity
Branch of
                                                                of
China                  Floating             2016-02- 2016-05-
            N/A   No                3,000                       principal   3,000      0      23.65    23.65
Everbrigh              proceeds             15       15
                                                                and
t Bank
                                                                interest
Co., LTd.

Shenzhen
Branch of                                                       Maturity
China                                                           of
                       Floating             2016-02- 2016-06-
CITIC       N/A   No                3,000                       principal   3,000      0      24.32    24.32
                       proceeds             26       02
Bank                                                            and
Corporati                                                       interest
on



                                                                                                          14
                                                              深圳市特力(集团)股份有限公司 2016 年半年度报告全文


Limited

Shenzhen
                                                                 Maturity
Tianan
                                                                 of
Branch of               Floating             2016-03- 2016-09-
             N/A   No                3,000                       principal        0        0      49.71      0
Industrial              proceeds             31         14
                                                                 and
Bank Co.,
                                                                 interest
Ltd.

Shenzhen
Huali                                                            Maturity
                        Preservati
Branch of                                                        of
                        on and               2016-05- 2016-08-
China        N/A   No                2,000                       principal        0        0      15.75      0
                        income-g             20         20
Everbrigh                                                        and
                        uarantee
t Bank                                                           interest
Co., Ltd.

Shenzhen
Huali                                                            Maturity
                        Preservati
Branch of                                                        of
                        on and               2016-05- 2016-07-
China        N/A   No                2,000                       principal        0        0      10.02      0
                        income-g             20         20
Everbrigh                                                        and
                        uarantee
t Bank                                                           interest
Co., Ltd.

Shenzhen
Huali                                                            Maturity
                        Preservati
Branch of                                                        of
                        on and               2016-05- 2016-06-
China        N/A   No                2,000                       principal    2,000        0        4.58   4.58
                        income-g             20         20
Everbrigh                                                        and
                        uarantee
t Bank                                                           interest
Co., Ltd.

Shenzhen
                                                                 Maturity
Tianan
                                                                 of
Branch of               Floating             2016-05- 2016-07-
             N/A   No                3,000                       principal        0        0      14.05      0
Industrial              proceeds             20         20
                                                                 and
Bank Co.,
                                                                 interest
Ltd.

Sales
                                                                 Maturity
departme
                                                                 of
nt of                   Floating             2016-05-                                          Uncertain
             N/A   No                2,000              T+0      principal        0        0                 0
Shenzhen                proceeds             23                                                       ty
                                                                 and
Branch of
                                                                 interest
JSBC

Sales                   Preservati           2016-06- 2016-09- Maturity
             N/A   No                1,000                                        0        0        8.05     0
departme                on and               17         23       of


                                                                                                             15
                                                                                深圳市特力(集团)股份有限公司 2016 年半年度报告全文


nt of                              income-g                                        principal
Shenzhen                           uarantee                                        and
Branch of                                                                          interest
China
CITIC
Bank
Corporati
on
Limited

Shenzhen
                                                                                   Maturity
 Jingtian                          Preservati
                                                                                   of
 Branch                            on and                   2016-06- 2016-09-
            N/A         No                          3,000                          principal        0        0     24.16          0
 of China                          income-g                 17        23
                                                                                   and
 CITIC                             uarantee
                                                                                   interest
 Co.,Ltd.

Total                                              48,000        --        --            --     29,000            421.14     311.33

Capital resource                                Idle fund-rasing and parts of the owned funds

Principal uncollected for overdue and
                                                                                                                                  0
accumulated earninsg

Lawsuit involved (if applicable)                Not applicable

Disclosure date for approval from the
                                                2016-04-29
Board for trust financing (if applicable)

Disclosure date for approval from board of
shareholders for trust financing (if            2016-05-21
applicable)

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

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


3. Application of raised proceeds

√ Applicable □ Not applicable


(1)Overall application of raised proceeds

√ Applicable □ Not applicable
                                                                                                                 In ten thousand Yuan
Total raised capitals                                                                                                        64,680


                                                                                                                                  16
                                                                                  深圳市特力(集团)股份有限公司 2016 年半年度报告全文


Total raised capital invested in reporting period                                                                                       3,563.95
Total accumulative raised capital invested                                                                                             43,287.39
Total raised fund for changes its usage area in report
                                                                                                                                                  0
period
Total accumulative raised fund for changes its usage
                                                                                                                                                  0
area
Proportion of total accumulative raised fund for
                                                                                                                                            0.00%
changes its usage area

                                               Explanation on general usage of raised capital

According to the ―Proposal of the company’s plan for non-public offering of shares‖ and other related proposals deliberated and
approved by the company’s 19th extraordinary meeting of the seventh board of directors and the 4th extraordinary general meeting
of 2014, and the ―Approval for non-public offering of shares of Shenzhen Test Rite (Group) Co., Ltd.‖ (CSRC license No.
[2015]173) approved by China Securities Regulatory Commission, the Company has adopted non-public offering of shares to issue
RMB ordinary shares (A shares) of 77 million shares, and the issue price is 8.40 yuan /share. The total raised funds of this issuance
are 646,800,000 Yuan, the net amount of raised funds is 633,520,000 yuan after deducting the issuance costs of 13,280,000 yuan.
On March 12, 2015, Ruihua Certified Public Accountants (special general partnership) has verified the capital of this issuance and
issued "Capital Verification Report" RHYZ No. [2015]48330003. During the reporting period, the Company has totally put into
raised funds of 35,639,500 Yuan for project of the Tellus Shuibei Jewelry Building.                 Accumulated fund-rasing of 432,873,900
Yuan invested up to period-end, including 241373900 Yuan invested for the Tellus Shuibei Jewelry Building and 191,500,000 Yuan
used to supplement working capital.


(2) Situation of committed project of raised proceeds

√Applicable □Not applicable
                                                                                                                            In 10 thousand Yuan

                                                     Total
                          Projects     Total                                 Amount Investme
                                                  investme
                          changed committe          nt after                     of         nt      Predicted                           Project

                                                  adjustme Amount accumula program serviceab Profit Reach the feasibility
Committed investment       or not        d
                                                    nt (1) invested  ted    till the   le    realized predicted  was
 projects &investment     (includin investme                   in this       investme period-en condition       in this    interest or changed
                                                               period        nt till the    d        date of     year            not   hugely or
       of raised fund           g      nt of
                                                                             period-en (3)=(2)/(1 project                                   not
                          changed     raised                                   d (2)        )

                         partially) capitals

Investment project commitment
Tellus Shuibei Jewelry
                         No             26,000       26,000 3,563.95 24,137.39             92.84%                         0 No         No
Building

Liquid assets
supplementation of the No               37,352       37,352              0      19,150     51.27%                         0 No         No
Company




                                                                                                                                                  17
                                                                            深圳市特力(集团)股份有限公司 2016 年半年度报告全文


Subtotal of
                               --       63,352     63,352 3,563.95 43,287.39           --         --                  --         --
commitment projects

Investment orientation for fund arising out of plan

N/A

Total                          --       63,352     63,352 3,563.95 43,287.39           --         --             0    --         --

                         1. Tellus Shuibei Jewelry Building has currently completed the main construction, and expected to be put
                         into use at end of 2016. 2. In the investment projects of raised funds for supplementing the company's
                         working capital: (1) Repayment of bank loans of 191,500,000 yuan has been completed in the reporting
                         period. (2) The newly increased renovation costs of Tellus Shuibei project will be put into use as planned
                         according to the project implementation progress, actual funds are reduced over that of planning. (3)
                         Jewelry e-commerce business: the jewelry e-commerce business market is highly competitive, payback
                         period is long, the Company bears a certain operation risks and deficits in business incubation period; there
                         may bring adverse effects on the Company’s overall performance if investing the jewelry e-commerce
                         platform according to the original plan under the current market situation, so the Company has decided not
                         to invested in the project with fund raising. The raised funds in the original plan shall be used for other
                         projects. (4) Jewelry retail market business: since 2015, affected by the decline of prosperity in jewelry
                         industry and the raise of property costs, large jewelry retail markets across the country have shrunk the
                         business and reduced the income and profits, if the company continued to invest large funds into the
Situation     about   not jewelry retail market, the business risks would be large, so the Company has planned to reduce the
coming up to schemed investment scale in single retail market, change to establish the small jewelry retail stores with the help of
progress or expected their managerial experience and industry resources, accumulate the industry experience, and train the
revenue       and     the management team so as to enlarge the investment scale when the industry climate becomes better. (5)
reason(In        specific Jewelry training business: this project has not yet been put into use. The company has started to investigate
project)                 some schools in early 2015 and found that there are already many jewelry training schools in Shenzhen
                         Shuibei area and the market competition is rather intense; at the same time, affected by the decline of
                         prosperity in jewelry industry, the demand for training business has substantially reduced. If the company
                         invests in the construction of jewelry training schools, the return on investment is relatively low and the
                         payback period is long, so the company has decided to suspend the investment plan for this project, and
                         wait to argue until the business of jewelry service industry goes smoothly and enough resources are
                         accumulated. The raised funds in the original plan shall be used for other projects. (6) Automobile leasing
                         business supporting the jewelry market: the project has not yet been put into use. One main reason is that
                         Shenzhen Municipal Government announced the implementation of car-purchase restriction policy on
                         December 29, 2014, the car purchase takes two methods, i.e. lottery and bidding, this policy made the
                         company unable to carry out this business as planned; another reason is that the prosperity of jewelry
                         industry has declined, the demand for automobile leasing has greatly reduced in jewelry industry of
                         Shuibei, and the business prospects are influenced, so the company has decided to cancel the investment in
                         this project. The raised funds in the original plan shall be used for other projects.
Explanation on great
changes of feasibility   N/A
of project

Amount, usage and        Not applicable

progress of using for


                                                                                                                                      18
                                                                               深圳市特力(集团)股份有限公司 2016 年半年度报告全文


fund raising out of the
plan

Change of                     Not applicable
implementation place
of investment project
of raised capitals

Adjustment of                 Not applicable
implementation way
for investment project
of raised capitals

                              Applicable

                              On April 27, 2015, the company held the thirtieth interim meeting of the seventh board of directors which
                              deliberated and approved the motion about replacing the self-raised funds beforehand invested in
Regulation of
                              fundraising project with the raise funds, and agreed the company to replace the self-raised funds of
implementation ways
                              114,162,000 Yuan invested in fundraising project with the raise funds, of which 15.6 million Yuan was used
of investment project
                              to replace and supplement the beforehand invested self-raised funds of the company’s circulating funds and
of raised capitals
                              98,562,000 Yuan was used to replace and supplement the beforehand invested self-raised funds of Tellus
                              Shuibei Jewelry Building project. The company’s independent director and sponsor institution have
                              expresses their agreement on this matter.

Temporarily                   Not applicable
supplement for the
current capitals with
idle raised capitals

Surplus amount and            Not applicable
reasons for the
implementation of
raised capital projects

                              On 28 April 2016, the 4th session of 8th BOD and AGM of 2015 held on 20 May 2016 was deliberated and
                              approved the proposal of purchasing bank financial products with parts of the idle fund-raised and owned
                              capital, agrees that, on the premise that impact no fund-raised projects, the Company and it’s subsidiary to
                              purchasing short-term financial products as cash management with idle fund raise 800 million Yuan at most
Use    of    funds      and
                              within one year since the date of proposals approved; Scroll to use money shall be required among the
allocation for reserved
                              above mentioned limit; in implementation, the investment balance shall not be over 300 million Yuan in
raised capital
                              any time-point. Up to end of the period, balance of financial products was 180 million Yuan. The reserved
                              fund-raised and financial income 31.3972 million Yuan have been saved in specific account in line with the
                              Management System of Fund-Raised Application for subsequent implementation for the fund-raised
                              projects.

Application of
fund-raised and issues
                              N/A
or other situation in
disclosure




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                                                                              深圳市特力(集团)股份有限公司 2016 年半年度报告全文


(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

                                                                                              Found more in the announcement                  of
                                                                                              Specific   Report     on         Deposit     and
Found more in Specific Report on Deposit
                                                                                              Application of the Fund Raised for First
and Application of the Fund Raised for 2016-08-26
                                                                                              Half Year of 2016 released on Securities
First Half Year of 2016
                                                                                              Times, Hong Kong Commercial Daily
                                                                                              and Juchao Website


4. Main subsidiaries and joint-stock companies analysis

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

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

                                             Self-owned
Shenzhen                                     property
Auto                                         leasing,
                                                 RMB 58.96 297,492,50 252,324,84 8,686,099.8 1,854,871
Industry      Subsidiary     Commerce automobile                                                       1,592,360.81
                                                 million         2.58       6.33           2       .67
and Trade                             and
Corporation                                  accessories
                                             selling

                                             Automobile
Shenzhen
                                             maintenanc
SD Huari
                                  Service    e&             US$ 5        76,463,153. 30,628,462. 19,299,222. -45,596.9
Automobile Subsidiary                                                                                                             101,794.49
                                             production million                    00         63          50               0
Enterprise                        industry
                                             and sales of
Co.Limited
                                             accessory

Shenzhen
                                                            RMB
Zhongtian                    Service         Property                    397,370,42 283,947,80 2,676,372.9 -104,415.
              Subsidiary                                    267.25                                                               -104,415.28
Industrial                   industry        leasing                              5.06      5.46             1           28
                                                            million
Co., Ltd.

Shenzhen                                     Automobile RMB 2            33,960,251. -6,928,559. 94,044,194. -28,948.0
              Subsidiary     Commerce                                                                                             -19,548.04
Huari                                        selling        million                05         54          14               4


                                                                                                                                              20
                                                                         深圳市特力(集团)股份有限公司 2016 年半年度报告全文


Toyota
Automobile
Sales Co.
Ltd

Shenzhen
                                          Production
New
                                          of
Yongtong
                             Service      inspection    RMB 19.      9,257,666.0 2,911,755.5 2,288,350.7 512,975.4
Automobile Subsidiary                                                                                                  384,975.40
                             industry     equipment     61 million            7           6           6          0
Inspection
                                          for auto
Equipment
                                          vehicles
Co. Ltd

Shenzhen
                                          Inspection
Tellus New
                                          and
Yongtong                     Service                    RMB 32.90 84,418,042. 45,919,464. 6,038,857.3 958,856.1
               Subsidiary                 maintenanc                                                                   648,281.95
Automobile                   industry                   million              78          81           8          3
                                          e of auto
Developme
                                          vehicle
nt Co. Ltd

Shenzhen                                  Developmet
SD Tellus                    Manufactur n and           RMB 31.15 28,511,925. 11,837,968.                 -146,005.
               Subsidiary                                                                                             -146,005.85
Real Estate                  e            operation of million               77          45                     85
Co. Ltd                                   real estate

Shenzhen
SD Tellus                                 Property
                             Service                    RMB 7.05     35,338,002. 12,964,464. 20,744,895. 950,477.0
Property       Subsidiary                 managemen                                                                    955,888.68
                             industry                   million              37          90          16          0
Managemen                                 t
t Co. Ltd

Shenzhen
Tellus Real                               Agency of
                             Service                    RMB 2        2,576,344.4 2,449,209.1
Estate         Subsidiary                 real estate                                                       -996.64       -996.64
                             industry                   million               2           7
Exchange                                  exchange
Co. Ltd

Shenzhen
                                          Sales of
Zung Fu
               Joint-stock   Service      auto and      RMB 30       349,431,44 195,879,45 509,511,24 7,611,376
Tellus Auto                                                                                                           6,120,624.89
               company       industry     maintenanc million               7.71        4.44        4.05         .11
Service Co.,
                                          e
Ltd.

                                          Auto
Shenzhen
                                          manufacturi
Dongfeng       Joint-stock   Manufactur                 RMB 100      574,166,86 208,757,98 254,428,66 166,479.8
                                          ng and                                                                      2,210,135.53
Auto Co.,      company       e                          million            9.19        6.01        9.06          7
                                          maintenanc
Ltd.
                                          e

Shenzhen       Joint-stock   Service      Property      RMB          364,014,34 119,734,69                27,701.41     27,701.41


                                                                                                                                21
                                                                           深圳市特力(集团)股份有限公司 2016 年半年度报告全文


Tellus        company        industry      managemen 123,704,96               2.36         2.65
Jimeng                                     t; leasing of 0
Investment                                 own
Co., LTd.                                  property

Shenzhen
                                           Mould
Xinglong                                                 RMB
              Joint-stock    Manufactur processing                     292,076,56 64,979,136.
Machinery                                                60.6333
              company        e             and                                5.67           82
Mould Co.,                                               million
                                           exportation
Ltd.


5. Major project invested by non-raised funds

□ Applicable √ Not applicable


No major project invested by non-raised funds in Period


VI. Prediction of business performance from January – September 2016

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




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                                                                     深圳市特力(集团)股份有限公司 2016 年半年度报告全文


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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                                                                            深圳市特力(集团)股份有限公司 2016 年半年度报告全文



                                           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, setting
up and improving the internal control system, 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 formal procedures, clearly duties and obligations of its
general meeting, board of directors, supervisory committee, each specialized committee of the board and senior
manager. Each of its directors, supervisors and senior managers can perform their duties earnestly. Its corporate
governance conformed to the requirements of certain regulation documents issued by the CSRC concerning
corporate governance of listed company until the end of reporting period


During the reporting period, in order to improve the Company's internal control system, the company has followed
the requirements of internal control, formulated an Enforcement Regulation of Network Voting for AGM, and
revised the Article of Association, Rules of Procedure for the Board, Rules of Procedure for the Shareholders’
General Meeting and Work System of Information Disclosure, and have been deliberated and approved by the
Shareholders’ General Meeting. The Company formulated a Rules of Procedure for Office Meeting of the
Chairman, and revised the Management System of Inside Information and Insider, Management System of
Strategy Planning and Management Method of the Subsidiary, and have been deliberated and approved by the
Board.



II. Lawsuits

Significant lawsuits and arbitrations
□Applicable     √Not applicable
The Company has no significant lawsuits and arbitrations in Period.
Other lawsuits
√Applicable     □Not applicable

                             Amount       Resulted an
                           involved (in     accrual                   Trial result and     Execution of   Disclosure    Disclosure
Lawsuits (arbitrations)                                   Progress
                           10 thousand     liability                     influence             judgment      date          index
                              Yuan)         (Y/N)


The dispute case of                                     Luohu        First-instance      First-instance                Refer to
                                                                                         judgment was     2016 08 26 Semi-Annual
Shenzhen Nigang                476            N         Court made judgment
                                                                                         not                           Report 2016
industrial Corporation                                  a civil      result:1、Huari

                                                                                                                                     24
                                                   深圳市特力(集团)股份有限公司 2016 年半年度报告全文


sued Huari Company          judgment,H Company should executed,Huari
                                                            Company
to return the original      uari         return ground part
                                                            had appealed to
object[(2013)             Company 1,585.84 square
                                                            the Shenzhen
Shenzhen Luohu              had appeale meters of Parcel
                                                            intermediate
Court-Min-three-Chu-        d to the She H403-0054(B) to people's

zi-No.1875]:                nzhen         Shenzhen Nigang court,So far

The plaintiff’s litigant   intermediat industrial Corpora there is no
                                                           verdict.
request:1、Return           e people's tion within thirty

ground part 1,585.84        court,So far days from the

square meters of            there is no   effective date of

Parcel                      verdict.      the judgment.2、

H403-0054(B);2、                          Huari Company

From January 1, 1990                      should

to the actual return                      pay the royalties

date ,the royalties of                    to Shenzhen

ground part 1,585.84                      Nigang

square meters of                          industrial Corpora

Parcel                                    tion within thirty

H403-0054(B),which                        days from the

was                                       effective date of

implemented in accor                      the judgment(By

dance with the                            December 31,

government guidance                       2015,the fee is

rental price                              347,271.74 Yuan,

for the corresponding                     and pay 7,268

period and location,                      Yuan per month

the interest rate is imp                  till actual

lemented in accordanc                     returning of the

e with the loan interest                  above

ratestipulated by the                     property asset.3、

People's Bank of Chin                     Overruled other

a for the correspondin                    litigant requests

g period, annual use                      from Shenzhen

fees calculated from                      Nigang

the following year in                     industrial Corpora
January 1st.                              tion.




III. Questions by media

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                                                                                      深圳市特力(集团)股份有限公司 2016 年半年度报告全文


□Applicable √ Not applicable

No questions by media in Period.

IV. Bankruptcy reorganization

□Applicable √ Not applicable

No bankruptcy reorganization in Period.


V. Transaction in assets

1. Assets acquisition


□Applicable √ Not applicable

The Company had no assets acquisition 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 with routine operations concerned

√Applicable    □ Not applicable

                                                                    Related Proporti                 Whether
                                                                                          Trading
                                                                    transacti on in the              over the Related
Related                 Related Related                                                    limit                         Similar
            Related                           Pricing Related          on      amount                approve transacti              Date of Index of
transacti               transacti transacti                                               approve                        market
            relations                         principa transacti amount        of the                   d         on                disclosu disclosur
   on                      on        on                                                   d (in 10                        price
               hip                                l      on price    (in 10    same                  limited settleme                    re       e
 parties                  type    content                                                 thousan                        obtained
                                                                    thousan transacti                 or not   nt mode
                                                                                          d Yuan)
                                                                    d Yuan)      on                   (Y/N)

Shenzhe Director Routiner House               Refer to                                                         Based                2016-4- Found
                                                         252             252    5.96%         530 N                      252
n Zung ,                 elated leasing       market                                                           on the               15        more in


                                                                                                                                                      26
                                                                                深圳市特力(集团)股份有限公司 2016 年半年度报告全文


Fu        supervis    transac           pricing                                                    contract                Annouce
Tellus    or and      tions                                                                        or                      ment of
Auto      senior                                                                                   agreeme                 Routine
Service executiv                                                                                   nt terms                Related
Co.,      es of the                                                                                                        Transacti
Ltd.      Compan                                                                                                           ons ( No.:
          y act as                                                                                                         2016-024
          director                                                                                                         ) released
          in the                                                                                                           on
          enterpris                                                                                                        Securities
          e                                                                                                                Times,
                                                                                                                           Hong
                                                                                                                           Kong
                                                                                                                           Commerc
                                                                                                                           ial Daily
                                                                                                                           and
                                                                                                                           Juchao
                                                                                                                           Website

Total                                      --        --         252        --          530    --        --    --      --         --

Detail of sales return with major
                                        N/A
amount involved

Report the actual implementation of
the normal related transactions which
were projected about their total        N/A
amount by types during the reporting
period(if applicable)

Reasons for major differences
between trading price and market        Not applicable
reference price (if applicable)


2. Related transaction incurred by purchase or sales of assets
□ Applicable √ Not applicable
No related transaction incurred by purchase or sales of assets in Period
3. Related transaction from jointly investment outside
□ Applicable √ Not applicable
No related transaction from jointly investment outside occurred in Period


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



                                                                                                                                      27
                                                                                       深圳市特力(集团)股份有限公司 2016 年半年度报告全文


                                             Whether has Balance at                Current       Current                            Current       Balance at
                                              non-busines period-begin newly added               recovery                           interest     period-end
   Related
              Relationship      Causes         s capital           (10              (10               (10        Interest rate        (10            (10
    party
                                              occupying      thousand            thousand        thousand                          thousand       thousand
                                                or not         Yuan)               Yuan)             Yuan)                          Yuan)           Yuan)

Influence on operation
results and financial status
                               N/A
from related credit and
debts

Debts payable to related party:

                                                  Balance at             Current           Current                               Current         Balance at
                                                 period-begin newly added                 recovery                               interest        period-end
Related party Relationship           Causes                                                                 Interest rate
                                                 (10 thousand (10 thousand (10 thousand                                     (10 thousand (10 thousand
                                                    Yuan)                Yuan)               Yuan)                               Yuan)             Yuan)

Shenzhen                          Loans with
               Controlling
SDG Co.,                          one year                 6,300                                                                         137           6,300
                 shareholder
Ltd.                              term

                                  Current
Shenzhen
               Controlling        account and
SDG Co.,                                                   4,794                 163            1,649                                                  3,308
               shareholder        loans
Ltd.
                                  interest

Shenzhen
               Controlling
SDG Co.,                          loans                    1,887                                      2                                     26         1,885
               shareholder
Ltd.

Influence on operation
results and financial status      More interest expenditure in the Year, the total profit decreased 1.63 million Yuan
from related credit and debts


5. Other related transactions

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


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

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




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                                                                            深圳市特力(集团)股份有限公司 2016 年半年度报告全文


IX. Major contract and implantation

1. Trusteeship, contract and leasing

(1) Trusteeship

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


(2) Contract

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


(3) Leasing

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


2. Guarantee

√ Applicable □ Not applicable
                                                                                                                       In ten thousand Yuan

                    Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
                        Related
                                               Actual date of                                                         Complete Guarante
    Name of the        Announce
                                    Guarantee happening (Date     Actual                  Guarantee     Guarantee     implemen    e for
     Company              ment
                                      limit      of signing   guarantee limit               type          term         tation or related
    guaranteed         disclosure
                                                agreement)                                                                not     party
                          date
                                                                                                      To the expire
Shenzhen Zung Fu
                                                                                                      date of joint
Tellus Auto           2014-09-30         3,500 2007-04-17                     3,500 Pledged                           N         Y
                                                                                                      venture
Service Co., Ltd.
                                                                                                      contract

                                                                    Total actual occurred external
    Total approving external
                                                                0    guarantee in report period                                     3,500
 guarantee in report period (A1)
                                                                                   (A2)

    Total approved external                                            Total actual balance of
 guarantee at the end of report                            3,500 external guarantee at the end                                      3,500
          period ( A3)                                                 of report    period (A4)

                                         Guarantee between the Company and the subsidiaries
                        Related
                                               Actual date of                                                         Complete Guarante
    Name of the        Announce
                                    Guarantee happening (Date     Actual                  Guarantee     Guarantee     implemen    e for
     Company              ment
                                      limit      of signing   guarantee limit               type          term         tation or related
    guaranteed         disclosure
                                                agreement)                                                                not     party
                          date



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                                                                           深圳市特力(集团)股份有限公司 2016 年半年度报告全文


Shenzhen                                                                                                24 June 2014
                                                                                     Joint liability
Zhongtian              2014-05-07      30,000 2014-06-24                   30,000                       to 23 June     N        Y
                                                                                     guaranty
Industrial Co., Ltd.                                                                                    2014

Shenzhen
                                                                                     General            To 25 June
Zhongtian              2014-03-17        4,140                               4,140                                     Y        Y
                                                                                     guarantee          2016
Industrial Co., Ltd.

                                                                  Total amount of actual
Total amount of approving
                                                                  occurred guarantee for
guarantee for subsidiaries in                                 0                                                                     34,140
                                                                  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                        34,140                                                                     30,000
                                                                  the end of reporting period
end of reporting period (B3)
                                                                  (B4)

                                           Guarantee of the Company for the subsidiaries
                        Related
                                               Actual date of                                                          Complete Guarante
   Name of the         Announce
                                    Guarantee happening (Date     Actual               Guarantee         Guarantee     implemen    e for
    Company               ment
                                      limit      of signing   guarantee limit            type              term         tation or related
   guaranteed          disclosure
                                                agreement)                                                                 not     party
                          date
                                                                  Total amount of actual
Total amount of approving
                                                                  occurred guarantee for
guarantee for subsidiaries in                                 0                                                                         0
                                                                  subsidiaries in report period
report period (C1)
                                                                  (C2)

                                                                  Total balance of actual
Total amount of approved
                                                                  guarantee for subsidiaries at
guarantee for subsidiaries at the                             0                                                                         0
                                                                  the end of reporting period
end of reporting period (C3)
                                                                  (C4)

Total amount of guarantee of the Company( total three abovementioned guarantee)
Total amount of approving                                       Total amount of                actual
guarantee in report period                                    0 occurred guarantee in          report                               37,640
(A1+B1+C1)                                                      period (A2+B2+C2)
Total amount of approved                                        Total balance of               actual
guarantee at the end of report                           37,640 guarantee at the end of        report                               33,500
period (A3+B3+C3)                                               period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the
                                                                                                                                    37.81%
net assets of the Company(A4+ B4+C4)

Including:

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

The debts guarantee amount provided for the guaranteed
parties whose assets-liability ratio exceed 70% directly or                                                                             0
indirectly(E)
Proportion of total amount of guarantee in net assets of the
                                                                                                                                        0
Company exceed 50%(F)


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                                                                           深圳市特力(集团)股份有限公司 2016 年半年度报告全文


Total amount of the aforesaid three guarantees(D+E+F)                                                                              0

Explanations on possibly bearing joint and several liquidating
                                                                  N/A
responsibilities for undue guarantees (if applicable)

Explanations on external guarantee against regulated
                                                                  N/A
procedures (if applicable)

Explanation on guarantee with composite way


(1) Guarantee outside against the regulation

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


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


4. Other material transactions

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



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

                                                                                              Commitmen Commitmen Implementati
      Commitments            Accepter                         Contents
                                                                                                t time    t period           on

                                        (I) Commitments during the work of Share                                     Other
                                        Merger Reform of the Company: 1. commitment                                  commitment
                                        for lock-up period.      (1) In accordance with the                          has
                                        Measures for the Administration of the Share                                 completed,
                                        Merger Reform of Listed Companies, SDG would                                 special
                                        abide by the various laws, regulations and rules,                            commitment
Commitments for
                             SDG        and perform its statutory commitment duty. (2) 2005-12-25 Long-term          of the
Share Merger Reform
                                        Apart from the above-mentioned statutory                                     incentive
                                        commitment, SDG also made the following                                      mechanism
                                        special commitment: with 36 months since the                                 has
                                        day the reform plan starts to take effect, SDG                               exemption
                                        would not list at Shenzhen Stock Exchange and                                from
                                        sell the shares of Tellus it held (except for the                            performance



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shares used to promote the administration level of
Tellus). (3) The administration level would abide
by the laws, regulations and rules, and perform its
statutory commitment duty. (4) SDG made the
commitment: ―The Promiser hereby promises
that, if the Promiser failed to fulfill its
commitment or not fully fulfill its commitment, it
would compensate other shareholders for their
losses suffered thereafter‖. (5) SDG declared:
―The      Promiser     would        dutifully       fulfill    its
commitments and shoulder corresponding legal
responsibilities. The Promiser would transfer the
shares held by it only if the assignee agree and
have the ability to shoulder the commitment
responsibility.‖      2.   Special          commitment         of
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



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                                            Reform of Tellus would be paid by SDG.

                                            SDG, the controlling shareholder of the Company,
                                            made      a   special   commitment           of   incentive
                                            mechanism in Share Merger Reform. After that
                                            SASAC and Ministry of Finance jointly issued a
                                            ―Trial    Approach     of        Equity    Incentive    for
                                            State-Owned Listed Companies‖, and CSRC
                                            issued the ―Incentive Management on Shares of
                                            Listed Companies (Trial)‖, after comparison, the
                                            above mentioned commitments made by SDG are
                                            out of the relevant regulations and requirement,
                                            relevant commitments are not implemented as a                                         Immunity to
                               SDG                                                                         2014-06-26 2016-6-30
                                            result. On 26 June 2014, the Company actively                                             perform
                                            communicating with SDG, and promised that on
                                            the premise of subjecting to applicable laws and
                                            regulations     and     supervision          requirements,
                                            continues to support the Company promote a
                                            long-term incentive plan as soon as possible in
                                            stead of the commitments made in share merger
                                            reform, and complete the long-term incentive plan
                                            before 30 June 2016. At that time, the long-term
                                            incentive plan shall be implemented after submit
                                            for deliberation in General Meeting.

Commitments in report of
acquisition      or   equity
change

Commitments in assets
reorganization
                                            The       commitments        to     the    fulfillment   of
                                            information     disclosure         about    the   company
                                            business development are as follows: except for
                                            the information has been disclosed publicly, the
                               Shenzhen
Commitments make in                         Company has not had the disclosed information
                                Tellus                                                                                            Implementin
initial public offering or                  about asset acquisition and business development 2014-10-17 Long-term
                                Holding                                                                                           g
re-financing                                that has not been disclosed within one year. In the
                                Co., Ltd.
                                            future, the company shall timely, accurately and
                                            adequately disclose the relevant information
                                            according to the progress of new business and the
                                            related requirements.

                                            In order to avoid the horizontal competition, the
Other commitments for          Shenzhen
                                            company’s controlling shareholder, Shenzhen                                          Implementin
medium and small               SDG Co.,                                                                    2014-05-26 Long-term
                                            SDG Co., Ltd., has issued the ―commitment letter                                     g
shareholders                   Ltd.
                                            about the avoidance of horizontal competition‖ on


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            May 26, 2014. The full commitment letter is as
            follows: 1. The Company and other enterprises
            controlled by the Company except Test Rite
            Group haven’t occupied in any business that
            could substantially compete with the main
            businesses of Test Rite Group, and have no
            horizontal competition relationship with Test Rite
            Group.

            From 2014 to 2016, the company’s profits will
            first be used to cover the losses of previous years;
            after making up for losses of previous years, in
            the premise that the company’s profits and cash
            flow can meet the company's normal operations
            and long-term development, reward shareholders,
            the company will implement positive profit
            distribution approaches to reward the
            shareholders, details are as follows: 1. The
            company’s profit distribution can adopt cash,
            stock or the combination of cash and stock or
            other methods permitted by law. The foreign
            currency conversion rates of domestically listed
            foreign shares dividend are calculated according
            to the standard price of HK dollar against RMB
            announced by People's Bank of China on the first
Shenzhen working day after the resolution date of the
Tellus      shareholders' meeting. The company prefers to                                     Implementin
                                                                      2014-06-03 2016-12-31
Holding     adopt the cash dividends to distribute profits. In                                g
Co., Ltd.   order to maintain the adaptability between capital
            expansion and performance growth, in the
            premise of ensuring the full cash dividend
            distributions and the rationality of equity scale
            and equity structure, the company can adopt the
            stock dividend methods to distribute profits. 2.
            According to the "Company Law" and other
            relevant laws and the provisions of the company’s
            "Articles of Association", following conditions
            should be satisfied when the company implements
            cash dividends: (1) the company's annual
            distributable profits (i.e. the after-tax profits after
            making up for losses and withdrawing
            accumulation funds) are positive value, the
            implementation of cash dividends will not affect
            the company's subsequent continuing operations;
            (2) the audit institution issues the standard audit


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                                    深圳市特力(集团)股份有限公司 2016 年半年度报告全文


report with clean opinion to the company's annual
financial report; (3) the company has no
significant investment plans or significant cash
outlay (except for fund-raising projects). Major
investment plans or significant cash outlay refer
to: the accumulated expenditures the company
plans to used for investments abroad, acquisition
of assets, or purchase of equipments within the
next 12 months reach or exceed 30% of the net
assets audited in the latest period. 3. In the
premise of meeting the conditions of cash
dividends and ensuring the company’s normal
operation and long-term development, the
company makes cash dividends once a year in
principle, the company’s board of directors can
propose the company to make interim cash
dividends in accordance with the company's
profitability and capital demand conditions. The
proportion of cash dividends in profits available
for distribution and in distribution of profits
should meet the following requirements: (1) in
principle, the company’s profits distributed in
cash every year should not be less than 10% of
profit available for distribution realized in the
same year, and the company’s profits
accumulatively distributed in cash in the last three
years should not be less than 30% of the annual
average profit available for distribution realized in
the last three years. (2) if the company’s
development stage belongs to mature stage and
there is no significant capital expenditure
arrangement, when distributing profits, the
minimum proportion of cash dividends in this
profit distribution should be 80%; (3) if the
company’s development stage belongs to mature
stage and there are significant capital expenditure
arrangements, when distributing profits, the
minimum proportion of cash dividends in this
profit distribution should be 40%; (4) if the
company’s development stage belongs to growth
stage and there are significant capital expenditure
arrangements, when distributing profits, the
minimum proportion of cash dividends in this
profit distribution should be 20%; when the


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                                                                            深圳市特力(集团)股份有限公司 2016 年半年度报告全文


                                         company's development stage is not easy to be
                                         differed but there are significant capital
                                         expenditure arrangements, please handle
                                         according to the preceding provisions. 4. On the
                                         condition of meeting the cash dividend
                                         distribution, if the company's operation revenue
                                         and net profit grow fast, and the board of directors
                                         considers that the company’s equity scale and
                                         equity structure are reasonable, the company can
                                         propose and implement the dividend distribution
                                         plans except proposing the cash dividend
                                         distribution plans.

Completed on time(Y/N) Y


XI. Appointment and non-reappointment (dismissal) of CPA

Whether the semi-annual financial report had been audited

□Yes √ No

The semi-annual report was not audited


XII. Penalty and rectification

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


XIII. Risk disclosure of delisting with laws and rules violated

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


XIV. Explanation on other significant events

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


XV. Issuance of corporate bonds

Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due but
not fully cashed on the approval date of annual report
No




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

I. Restricted shares               91,587,056 30.81%                                                                     91,587,056   30.81%

2. State-owned corporation
                                   20,587,056      6.93%                                                                 20,587,056    6.93%
shares

3. Other domestic shares           71,000,000 23.88%                                                                     71,000,000   23.88%

Including: domestic legal
                                   71,000,000 23.88%                                                                     71,000,000   23.88%
person’s shares

II. Un-restricted shares          205,694,544 69.19%                                                                    205,694,544   69.19%

1. RMB ordinary shares            179,294,544 60.31%                                                                    179,294,544   60.31%

2. Domestically listed
                                   26,400,000      8.88%                                                                 26,400,000    8.88%
foreign shares

III. Total shares                 297,281,600 100.00%                                                                   297,281,600 100.00%
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 2016 年半年度报告全文


                                                                         Total preference shareholders
Total common shareholders at                                             with voting rights recovered at
                                                                64,770                                                                  0
period-end                                                               end of reporting period (if
                                                                         applicable) (see Note 8)

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

                                                                                                                     Number of shares
                                                          Total common                 Amount of       Amount of
                                                                                                               pledged/frozen
                                            Proportion shareholders Changes in restricted unrestricted
  Full name of            Nature of
                                             of shares                                                     State
  Shareholders           shareholder                   at the end of report period common       common
                                               held
                                                                                                            of        Amount
                                                        report period              shares held shares held
                                                                                                           share

Shenzhen SDG          State-owned
                                              50.09%       148,898,023 -2,972,537       20,587,056 128,310,967
Co., Ltd.             corporation

Shenzhen Capital
Fortune Jewelry
                      Domestic       non
Industry
                      state-owned             23.88%        71,000,000                  71,000,000
Investment
                      corporate
Enterprise (limited
partnership)

KGI ASIA              Foreign
                                                  2.45%      7,297,417 +6,480,206                        7,297,417
LIMITED               corporation

UOB (Hong             Foreign
                                                  0.44%      1,308,693                                   1,308,693
Kong ) Co., Ltd.      corporation

GUOTAI JUNAN
SECURITIES            Foreign
                                                  0.37%      1,098,132 -75,100                           1,098,132
(HONGKONG)            corporation
LIMITED

                      Domestic nature
Zhang Linbin                                      0.25%        749,100                                     749,100
                      person

                      Foreign nature
Weng Zhengwen                                     0.20%        596,300 +33,300                             596,300
                      person

                      Domestic nature
Wang Jinyi                                        0.13%        400,000                                     400,000
                      person

                      Domestic nature
Lai Suizhi                                        0.13%        385,579                                     385,579
                      person

Guoyuan
Securities            Foreign
                                                  0.13%        379,078 -110,000                            379,078
Brokerage (HK)        corporation
Co., Ltd.

Strategy     investors    or      general
                                            N/A
corporate becomes top 10 common


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shareholders due to rights issued (if
applicable)(see Note 3)

Explanation       on       associated
relationship among the aforesaid N/A
shareholders

                              Particular about top ten common shareholders with un-restrict shares held

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

                                                                                                  RMB ordinary
Shenzhen SDG Co., Ltd.                                                              128,310,967                            128,310,967
                                                                                                  shares

                                                                                                  Overseas listed
KGI ASIA LIMITED                                                                      7,297,417                                7,297,417
                                                                                                  foreign shares

                                                                                                  Overseas listed
UOB (Hong Kong ) Co., Ltd.                                                            1,308,693                                1,308,693
                                                                                                  foreign shares

GUOTAI JUNAN SECURITIES                                                                           Overseas listed
                                                                                      1,098,132                                1,098,132
(HONGKONG) LIMITED                                                                                foreign shares

                                                                                                  RMB ordinary
Zhang Linbin                                                                            749,100                                 749,100
                                                                                                  shares

                                                                                                  Overseas listed
Weng Zhengwen                                                                           596,300                                 596,300
                                                                                                  foreign shares

                                                                                                  RMB ordinary
Wang Jinyi                                                                              400,000                                 400,000
                                                                                                  shares

                                                                                                  RMB ordinary
Lai Suizhi                                                                              385,579                                 385,579
                                                                                                  shares

Guoyuan Securities Brokerage (HK)                                                                 Overseas listed
                                                                                        379,078                                 379,078
Co., Ltd.                                                                                         foreign shares

                                                                                                  Overseas listed
Zeng Huiming                                                                            370,000                                 370,000
                                                                                                  foreign shares

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

Explanation on shareholders
involving margin business about top
ten common shareholders with             N/A
un-restrict shares held(if applicable)
(see note4)



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Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.


III. Changes of controlling shareholders or actual controller

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

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

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




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                                      Section VII. Preferred Stock

□ Applicable   √ Not applicable
The Company had no preferred stock in the reporting.




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           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
2015


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

□ Applicable   √ Not applicable
Directors, supervisors and senior executives of the Company have no changes in the Peirod, found more in Annual Report 2015




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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


   1. Consolidated Balance Sheet

   Prepared by ShenZhen Tellus Holding Co.,Ltd
                                                           2016-06-30
                                                                                                                 In RMB

                    Item                               Closing balance                        Opening balance

Current assets:

     Monetary funds                                                  190,981,593.06                        159,184,710.93

     Settlement provisions

     Capital lent

     Financial liability measured by fair
value and with variation reckoned into
current gains/losses

     Derivative financial liability

     Notes receivable

     Accounts receivable                                                  1,664,778.74                           562,051.31

     Accounts paid in advance                                             7,663,519.57                          6,454,769.40

     Insurance receivable

     Reinsurance receivables
     Contract reserve of reinsurance
receivable
     Interest receivable                                                                                         348,833.33

     Dividend receivable

     Other receivables                                                   11,395,983.87                      11,128,001.89

     Purchase restituted finance asset

     Inventories                                                          9,179,418.55                      16,151,336.61

     Divided into assets held for sale


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       Non-current asset due within one
year
       Other current assets                       110,319,674.72                       165,565,445.21

Total current assets                              331,204,968.51                       359,395,148.68

Non-current assets:

       Loans and payments on behalf

       Finance asset available for sales           10,478,985.77                         10,478,985.77

       Held-to-maturity investment

       Long-term account receivable

       Long-term equity investment                216,689,503.20                       220,180,721.29

       Investment property                         79,847,555.27                         82,100,133.48

       Fixed assets                               132,707,486.29                       136,583,565.00

       Construction in progress                   314,412,966.77                       279,056,650.35

       Engineering material

       Disposal of fixed asset

       Productive biological asset

       Oil and gas asset

       Intangible assets                           54,296,001.28                         52,985,273.37
    Expense           on   Research       and
Development
       Goodwill
    Long-term          expenses      to    be
                                                    1,323,025.53                          1,499,006.24
apportioned
       Deferred income tax asset                   24,468,972.21                         24,488,443.31

       Other non-current asset                      1,900,000.00                          1,900,000.00

Total non-current asset                           836,124,496.32                       809,272,778.81

Total assets                                    1,167,329,464.83                      1,168,667,927.49

Current liabilities:

       Short-term loans

       Loan from central bank
    Absorbing deposit and interbank
deposit
       Capital borrowed

       Financial liability measured by fair
value and with variation reckoned into
current gains/losses

       Derivative financial liability

       Notes payable

       Accounts payable                            21,507,032.73                         27,417,068.61



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       Accounts received in advance                 8,747,886.64                         11,460,807.66
     Selling        financial     asset    of
repurchase
   Commission               charge        and
commission payable
       Wage payable                                23,766,762.69                         19,639,738.81

       Taxes payable                                8,901,910.59                         10,043,901.26

       Interest payable

       Dividend payable

       Other accounts payable                     179,682,571.96                       193,797,786.68

       Reinsurance payables

       Insurance contract reserve

       Security trading of agency

       Security sales of agency

       Divided into liability held for sale
       Non-current liabilities due within 1
year
Other current liabilities

Total current liabilities                         242,606,164.61                       262,359,303.02

Non-current liabilities:

       Long-term loans

       Bonds payable

         Including: preferred stock

                 Perpetual capital
securities

       Long-term account payable                   13,972,779.67                         13,972,779.67

       Long-term wages payable

       Special accounts payable

       Projected liabilities

       Deferred income

       Deferred income tax liabilities               355,398.10                            478,085.12

       Other non-current liabilities               13,837,229.65                         13,269,356.04

Total non-current liabilities                      28,165,407.42                         27,720,220.83

Total liabilities                                 270,771,572.03                       290,079,523.85

Owner’s equity:

       Share capital                              297,281,600.00                       297,281,600.00

       Other equity instrument

         Including: preferred stock



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                  Perpetual capital
securities
     Capital public reserve                                      564,192,605.51                         564,192,605.51

     Less: Inventory shares

     Other comprehensive income

     Reasonable reserve

     Surplus public reserve                                            2,952,586.32                          2,952,586.32

     Provision of general risk

     Retained profit                                                  21,490,213.12                          3,742,260.49
Total owner’s equity attributable to
                                                                 885,917,004.95                         868,169,052.32
parent company
Minority interests                                                    10,640,887.85                      10,419,351.32

Total owner’s equity                                            896,557,892.80                         878,588,403.64

Total liabilities and owner’s equity                           1,167,329,464.83                      1,168,667,927.49


   Legal Representative: Lv Hang                                Person in charge of Accounting Works:Yang Jianping
   Person in charge of Accounting Institution: Ke Wensheng


   2. Balance Sheet of Parent Company

                                                                                                              In RMB

                     Item                           Closing balance                        Opening balance

Current assets:

     Monetary funds                                              128,952,496.99                          80,301,551.68

     Financial liability measured by fair
value and with variation reckoned into
current gains/losses

     Derivative financial liability

     Notes receivable
     Accounts receivable

     Account paid in advance                                            161,004.02                            101,280.00

     Interest receivable                                                                                      348,833.33

     Dividends receivable

     Other receivables                                                97,105,347.22                      93,744,827.52

     Inventories

     Divided into assets held for sale
     Non-current assets maturing within
one year

     Other current assets                                         110,000,000.00                        145,000,000.00



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Total current assets                          336,218,848.23                       319,496,492.53

Non-current assets:

     Available-for-sale financial assets       10,176,617.20                         10,176,617.20

     Held-to-maturity investments

     Long-term receivables

     Long-term equity investments             678,503,117.76                       682,223,207.17

     Investment property                       51,265,933.87                         52,808,715.01

     Fixed assets                              16,719,522.85                         17,096,105.47

     Construction in progress                    362,279.69                            362,279.69

     Project materials

     Disposal of fixed assets

     Productive biological assets

     Oil and natural gas assets

     Intangible assets                           418,413.87                            478,422.33

     Research and development costs

     Goodwill

     Long-term deferred expenses                   62,723.74                            31,644.20

     Deferred income tax assets                13,927,725.14                         13,947,196.24

     Other non-current assets

Total non-current assets                      771,436,334.12                       777,124,187.31

Total assets                                1,107,655,182.35                      1,096,620,679.84

Current liabilities:

     Short-term borrowings

     Financial liability measured by fair
value and with variation reckoned into
current gains/losses

     Derivative financial liability

     Notes payable

     Accounts payable

     Accounts received in advance               2,523,809.43

     Wage payable                               7,330,366.38                          5,247,871.02

     Taxes payable                                811,050.36                           592,579.23

     Interest payable

     Dividend payable
     Other accounts payable                   312,588,347.40                       320,935,774.45

     Divided into liability held for sale


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       Non-current liabilities due within 1
year
       Other current liabilities

Total current liabilities                                 323,253,573.57                           326,776,224.70

Non-current liabilities:

       Long-term loans

       Bonds payable

         Including: preferred stock

                 Perpetual capital
securities

       Long-term account payable

       Long-term wages payable

       Special accounts payable

       Projected liabilities

       Deferred income

       Deferred income tax liabilities
       Other non-current liabilities

Total non-current liabilities

Total liabilities                                         323,253,573.57                           326,776,224.70

Owners’ equity:

       Share capita                                       297,281,600.00                           297,281,600.00

       Other equity instrument

         Including: preferred stock

                 Perpetual capital
securities

       Capital public reserve                             560,999,182.23                           560,999,182.23

       Less: Inventory shares

       Other comprehensive income

       Reasonable reserve

       Surplus reserve                                         2,952,586.32                          2,952,586.32

       Retained profit                                     -76,831,759.77                          -91,388,913.41

Total owner’s equity                                     784,401,608.78                           769,844,455.14

Total liabilities and owner’s equity                   1,107,655,182.35                       1,096,620,679.84


    3. Consolidated Profit Statement

                                                                                                      In RMB

                      Item                    Current Period                         Last Period


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I. Total operating income                            157,147,166.48                       158,491,781.84

Including: Operating income                          157,147,166.48                       158,491,781.84

         Interest income

         Insurance gained

         Commission charge and commission
income

II. Total operating cost                             143,719,895.22                       150,618,182.26

Including: Operating cost                            112,822,380.88                        116,939,503.91

         Interest expense

         Commission charge and commission
expense

         Cash surrender value

         Net amount of expense of
compensation

         Net amount of withdrawal of
insurance contract reserve

         Bonus expense of guarantee slip

         Reinsurance expense

         Operating tax and extras                      2,403,726.21                          2,847,665.18

         Sales expenses                                7,399,760.23                          9,520,419.70

         Administration expenses                      20,805,027.12                         16,780,916.30

         Financial expenses                             289,000.78                           4,529,677.17

         Losses of devaluation of asset

         Add: Changing income of fair
value(Loss is listed with ―-‖)

         Investment income (Loss is listed
                                                       5,100,570.96                           624,390.10
with ―-‖)

         Including: Investment income on
                                                       2,808,781.91                           469,732.57
affiliated company and joint venture

         Exchange income (Loss is listed
with ―-‖)

III. Operating profit       (Loss is listed with
                                                      18,527,842.22                          8,497,989.68
―-‖)

         Add: Non-operating income                        45,280.90                            48,762.10

              Including: Disposal gains of
                                                          28,104.37                            17,094.02
non-current asset

         Less: Non-operating expense                       5,764.84                            37,317.93

              Including: Disposal loss of
                                                           1,237.84                            37,300.18
non-current asset


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IV. Total Profit   (Loss is listed with ―-‖)      18,567,358.28                          8,509,433.85

     Less: Income tax expense                         597,869.12                           1,200,717.31

V. Net profit (Net loss is listed with ―-‖)       17,969,489.16                          7,308,716.54

    Net profit attributable to owner’s of
                                                    17,747,952.63                          7,650,356.02
parent company

  Minority shareholders’ gains and
                                                      221,536.53                           -341,639.48
losses

VI. Net after-tax of other comprehensive
income

  Net after-tax of other comprehensive
income attributable to owners of parent
company

         (I) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss

              1. Changes as a result of
re-measurement of net defined benefit
plan liability or asset

              2. Share of the other
comprehensive income of the investee
accounted for using equity method which
will not be reclassified subsequently to
profit and loss

     (II) Other comprehensive income
items which will be reclassified
subsequently to profit or loss

              1. Share of the other
comprehensive income of the investee
accounted for using equity method which
will be reclassified subsequently to profit
or loss

              2. Gains or losses arising
from changes in fair value of
available-for-sale financial assets

              3. Gains or losses arising
from reclassification of held-to-maturity
investment as available-for-sale financial
assets

              4. The effect hedging portion
of gains or losses arising from cash flow
hedging instruments

              5. Translation differences


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arising on translation of foreign currency
financial statements

                6. Other

   Net after-tax of other comprehensive
income attributable to minority
shareholders

VII. Total comprehensive income                                          17,969,489.16                                  7,308,716.54

      Total comprehensive income
                                                                         17,747,952.63                                  7,650,356.02
attributable to owners of parent Company

      Total comprehensive income
                                                                            221,536.53                                   -341,639.48
attributable to minority shareholders

VIII. Earnings per share:

       (i) Basic earnings per share                                             0.0597                                       0.0296

       (ii) Diluted earnings per share                                          0.0597                                       0.0296

    Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before
    combination, and realized 0 Yuan at last period for combined party


    Legal Representative: Lv Hang                                   Person in charge of Accounting Works:Yang Jianping
    Person in charge of Accounting Institution: Ke Wensheng


    4. Profit Statement of Parent Company

                                                                                                                         In RMB

                     Item                               Current Period                                 Last Period

I. Operating income                                                      21,654,258.03                                 17,058,260.06

      Less: Operating cost                                                1,787,004.39                                  1,860,594.49

              Operating tax and extras                                     794,738.55                                    955,262.54

              Sales expenses

              Administration expenses                                     9,195,278.67                                  6,617,979.97

              Financial expenses                                            53,700.38                                   3,534,837.43

              Losses of devaluation of asset

      Add: Changing income of fair
value(Loss is listed with ―-‖)

          Investment income (Loss is
                                                                          4,753,088.69                                   785,987.91
listed with ―-‖)

          Including: Investment income
                                                                          2,579,910.59                                   631,330.38
on affiliated company and joint venture

II. Operating profit       (Loss is listed
                                                                         14,576,624.73                                  4,875,573.54
with ―-‖)

   Add: Non-operating income                                                      0.01


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                                            深圳市特力(集团)股份有限公司 2016 年半年度报告全文


             Including: Disposal gains of
non-current asset

         Less: Non-operating expense

             Including: Disposal loss of
non-current asset

III. Total Profit   (Loss is listed with
                                               14,576,624.74                          4,875,573.54
―-‖)

         Less: Income tax expense                 19,471.10                             19,471.10

IV. Net profit (Net loss is listed with
                                               14,557,153.64                          4,856,102.44
―-‖)

V. Net after-tax of other comprehensive
income

          (I) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss

               1. Changes as a result of
re-measurement of net defined benefit
plan liability or asset

               2. Share of the other
comprehensive income of the investee
accounted for using equity method
which will not be reclassified
subsequently to profit and loss

          (II) Other comprehensive income
items which will be reclassified
subsequently to profit or loss

               1. Share of the other
comprehensive income of the investee
accounted for using equity method
which will be reclassified subsequently
to profit or loss

               2. Gains or losses arising
from changes in fair value of
available-for-sale financial assets

               3. Gains or losses arising
from reclassification of held-to-maturity
investment as available-for-sale
financial assets

               4. The effect hedging
portion of gains or losses arising from
cash flow hedging instruments

               5. Translation differences

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arising on translation of foreign
currency financial statements

              6. Other

VI. Total comprehensive income                              14,557,153.64                          4,856,102.44

VII. Earnings per share:

        (i) Basic earnings per share                              0.0490                                0.0188

        (ii) Diluted earnings per share                           0.0490                                0.0188


    5. Consolidated Cash Flow Statement

                                                                                                    In RMB

                    Item                   Current Period                          Last Period

I. Cash flows arising from operating
activities:

       Cash received from selling
commodities and providing labor                         158,112,964.06                           166,412,700.80
services

       Net increase of customer deposit
and interbank deposit

       Net increase of loan from central
bank

       Net increase of capital borrowed
from other financial institution

       Cash received from original
insurance contract fee

  Net cash received from reinsurance
business

    Net increase of insured savings and
investment

       Net increase of amount from
disposal financial assets that measured
by fair value and with variation
reckoned into current gains/losses

       Cash received from interest,
commission charge and commission
       Net increase of capital borrowed

       Net increase of returned business
capital

       Write-back of tax received

       Other cash received concerning
                                                            22,370,091.90                         21,091,520.19
operating activities


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Subtotal of cash inflow arising from
                                                 180,483,055.96                       187,504,220.99
operating activities

       Cash     paid      for    purchasing
commodities         and    receiving   labor      88,512,297.28                         70,874,644.66
service

       Net increase of customer loans and
advances

       Net increase of deposits in central
bank and interbank

       Cash paid for original insurance
contract compensation

       Cash paid for interest, commission
charge and commission

       Cash paid for bonus of guarantee
slip

       Cash paid to/for staff and workers         29,272,522.61                         25,426,536.32

       Taxes paid                                 13,224,238.25                          9,842,550.96

       Other    cash      paid   concerning
                                                  25,502,491.46                         47,497,606.35
operating activities

Subtotal of cash outflow arising from
                                                 156,511,549.60                       153,641,338.29
operating activities

Net cash flows arising from operating
                                                  23,971,506.36                         33,862,882.70
activities

II. Cash flows arising from investing
activities:

       Cash received from recovering
                                                 165,500,000.00                         80,000,000.00
investment

       Cash received from investment
                                                   8,591,789.05                           154,657.53
income

       Net cash received from disposal of
fixed, intangible and other long-term                                                     191,300.00
assets

       Net cash received from disposal of
subsidiaries and other units

       Other cash received concerning
investing activities

Subtotal of cash inflow from investing
                                                 174,091,789.05                         80,345,957.53
activities

       Cash paid for purchasing fixed,
                                                  38,970,948.42                         58,099,932.49
intangible and other long-term assets

       Cash paid for investment                  110,800,000.00                       355,000,000.00


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     Net increase of mortgaged loans

     Net cash received from
subsidiaries and other units obtained

     Other      cash   paid     concerning
investing activities

Subtotal of cash outflow from investing
                                                 149,770,948.42                       413,099,932.49
activities

Net cash flows arising from investing
                                                  24,320,840.63                       -332,753,974.96
activities

III. Cash flows arising from financing
activities

     Cash received from absorbing
                                                                                      635,500,000.00
investment

     Including: Cash received from
absorbing       minority      shareholders’
investment by subsidiaries

     Cash received from loans                                                           24,698,215.03

     Cash received from issuing bonds

     Other cash received concerning
financing activities

Subtotal of cash inflow from financing
                                                                                      660,198,215.03
activities

     Cash paid for settling debts                                                     304,995,765.58

     Cash paid for dividend and profit
                                                  16,495,591.67                          4,665,177.61
distributing or interest paying

     Including: Dividend and profit of
minority shareholder paid by
subsidiaries

     Other      cash   paid     concerning
                                                                                          437,000.00
financing activities

Subtotal of cash outflow from financing
                                                  16,495,591.67                       310,097,943.19
activities

Net cash flows arising from financing
                                                 -16,495,591.67                       350,100,271.84
activities

IV. Influence on cash and cash
equivalents due to fluctuation in                       126.81                                  -4.76
exchange rate

V. Net increase of cash and cash
                                                  31,796,882.13                         51,209,174.82
equivalents

     Add: Balance of cash and cash
                                                 159,184,710.93                         80,045,669.65
equivalents at the period -begin


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VI. Balance of cash and cash
                                                         190,981,593.06                           131,254,844.47
equivalents at the period -end


    6. Cash Flow Statement of Parent Company

                                                                                                     In RMB

                   Item                     Current Period                          Last Period

I. Cash flows arising from operating
activities:

     Cash received from selling
commodities and providing labor                              30,405,761.68                         18,015,142.44
services

     Write-back of tax received

     Other cash received concerning
                                                             24,198,098.94                         50,522,932.88
operating activities

Subtotal of cash inflow arising from
                                                             54,603,860.62                         68,538,075.32
operating activities

     Cash paid for purchasing
commodities and receiving labor
service

     Cash paid to/for staff and workers                       7,686,514.98                          7,125,889.43

     Taxes paid                                               1,923,502.73                          1,871,082.86

     Other    cash     paid    concerning
                                                             23,114,646.01                         38,586,106.40
operating activities

Subtotal of cash outflow arising from
                                                             32,724,663.72                         47,583,078.69
operating activities

Net cash flows arising from operating
                                                             21,879,196.90                         20,954,996.63
activities

II. Cash flows arising from investing
activities:

     Cash received from recovering
                                                         135,000,000.00                            80,000,000.00
investment

     Cash received from investment
                                                              8,473,178.10                           154,657.53
income

     Net cash received from disposal of
fixed, intangible and other long-term
assets

     Net cash received from disposal of
subsidiaries and other units

     Other cash received concerning
investing activities



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Subtotal of cash inflow from investing
                                              143,473,178.10                         80,154,657.53
activities

     Cash paid for purchasing fixed,
                                                 205,838.02                            483,189.15
intangible and other long-term assets

     Cash paid for investment                 100,000,000.00                       535,000,000.00

     Net      cash     received     from
subsidiaries and other units

     Other      cash   paid    concerning
investing activities

Subtotal of cash outflow from investing
                                              100,205,838.02                       535,483,189.15
activities

Net cash flows arising from investing
                                               43,267,340.08                       -455,328,531.62
activities

III. Cash flows arising from financing
activities

     Cash received from absorbing
                                                                                   635,500,000.00
investment

     Cash received from loans

     Cash received from issuing bonds

     Other cash received concerning
financing activities

Subtotal of cash inflow from financing
                                                                                   635,500,000.00
activities

     Cash paid for settling debts                                                  190,000,000.00

     Cash paid for dividend and profit
                                               16,495,591.67                          3,630,720.91
distributing or interest paying

     Other      cash   paid    concerning
                                                                                       437,000.00
financing activities

Subtotal of cash outflow from financing
                                               16,495,591.67                       194,067,720.91
activities

Net cash flows arising from financing
                                              -16,495,591.67                       441,432,279.09
activities

IV. Influence on cash and cash
equivalents due to fluctuation in
exchange rate

V. Net increase of cash and cash
                                               48,650,945.31                          7,058,744.10
equivalents

     Add: Balance of cash and cash
                                               80,301,551.68                         26,441,746.73
equivalents at the period -begin

VI. Balance of cash and cash
                                              128,952,496.99                         33,500,490.83
equivalents at the period -end


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   7. Statement of Changes in Owners’ Equity (Consolidated)

   This Period
                                                                                                                     In RMB

                                                                       This Period

                                             Owners’ equity attributable to parent company
                                     Other
                                equity instrument
       Item                                                Less:     Other                   Provisio         Minorit Total
                                      Perpet                                 Reason
                       Share                       Capital Invento   compre          Surplus n     of Retaine y         owners’
                                      ual                                    able
                       capital Prefer capita       reserve ry        hensive         reserve general d profit interests equity
                               red           Other                           reserve
                                      l                    shares    income                  risk
                               stock
                                      securi
                                      ties
                       297,28
I. Balance at the                                   564,192                             2,952,5         3,742,2 10,419, 878,588
                       1,600.
end of the last year                                ,605.51                               86.32          60.49 351.32 ,403.64
                           00
             Add:
Changes         of
accounting policy
             Error
correction of the
last period

 Enterprise
 combine under
 the same control
              Other

II. Balance at the 297,28
                                                    564,192                             2,952,5         3,742,2 10,419, 878,588
beginning of this 1,600.
                                                    ,605.51                               86.32          60.49 351.32 ,403.64
year                   00
III.       Increase/
Decrease in this                                                                                        17,747, 221,536 17,969,
year (Decrease is                                                                                       952.63      .53 489.16
listed with ―-‖)
 (i)        Total
                                                                                                        17,747, 221,536 17,969,
comprehensive
                                                                                                        952.63      .53 489.16
income
 (ii)      Owners’
devoted        and
decreased capital
1.Common shares
invested         by
shareholders
2. Capital invested
by holders of other
equity instruments
3.          Amount
reckoned       into

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owners equity with
share-based
payment
4. Other
(III)        Profit
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general        risk
provisions
3. Distribution for
owners          (or
shareholders)
4. Other
(IV)       Carrying
forward internal
owners’ equity
1. Capital reserves
conversed        to
capital      (share
capital)
2. Surplus reserves
conversed        to
capital      (share
capital)
3. Remedying loss
with        surplus
reserve
4. Other
(V)     Reasonable
reserve
1. Withdrawal in
the report period

2. Usage in the
report period

(VI)Others

IV. Balance at the 297,28
                                                    564,192                              2,952,5     21,490, 10,640, 896,557
end of the report 1,600.
                                                     ,605.51                               86.32      213.12 887.85 ,892.80
period                 00

   Last Period
                                                                                                                 In RMB

                                                                        Last Period

                                            Owners’ equity attributable to the parent Company              Minorit
       Item                                                                                                         Total
                                    Other                 Less:   Other Reason            Provisio          y
                      Share                       Capital                         Surplus          Retaine interest owners’
                                equity instrument         Invento compre able             n     of
                      capital                     reserve                         reserve          d profit s       equity
                              Prefer Perpet Other         ry      hensive reserve         general


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                              red   ual                shares   income                    risk
                              stock capita
                                    l
                                    securi
                                    ties
                     220,28
I. Balance at the                            7,672,6                            2,952,5          -39,026, 10,450, 202,330
                     1,600.
end of the last year                           05.51                             86.32            529.03 097.29 ,360.09
                         00
             Add:
Changes         of
accounting policy
             Error
correction of the
last period

Enterprise
combine under the
same control
          Other

II. Balance at the 220,28
                                             7,672,6                            2,952,5          -39,026, 10,450, 202,330
beginning of this 1,600.
                                               05.51                             86.32            529.03 097.29 ,360.09
year                   00
III.       Increase/ 77,000
Decrease in this                             556,520                                             7,650,3 -341,63 640,828
                     ,000.0
year (Decrease is                            ,000.00                                               56.02    9.48 ,716.54
                          0
listed with ―-‖)
 (i)        Total
                                                                                                 7,650,3 -341,63 7,308,7
comprehensive
                                                                                                   56.02    9.48     16.54
income
 (ii)     Owners’ 77,000
                                             556,520                                                               633,520
devoted        and ,000.0
                                             ,000.00                                                               ,000.00
decreased capital       0
1.Common shares
invested         by
shareholders
2. Capital invested
by holders of other
equity instruments
3.          Amount
reckoned       into
owners equity with
share-based
payment
4 Other
(III)         Profit
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general         risk

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provisions
3. Distribution for
owners          (or
shareholders)
4. Other
(IV)       Carrying
forward internal
owners’ equity
1. Capital reserves
conversed        to
capital      (share
capital)
2. Surplus reserves
conversed        to
capital      (share
capital)
3. Remedying loss
with        surplus
reserve
4. Other

(V) Reasonable
reserve

1. Withdrawal in
the report period

2. Usage in the
report period

(VI)Others

IV. Balance at the 297,28
                                                 564,192                             2,952,5         -31,376, 10,108, 843,159
end of the report 1,600.
                                                  ,605.51                              86.32          173.01 457.81 ,076.63
period                 00


     8. Statement of Changes in Owners’ Equity (Parent Company)

     This Period
                                                                                                                   In RMB

                                                                     This Period
                                       Other
                                  equity instrument
                                                                              Other                                     Total
          Item                         Perpetu                      Less:
                      Share                             Capital               comprehe Reasonab Surplus     Retaine
                                                                    Inventory                                          owners’
                      capital Preferre al               reserve               nsive    le reserve reserve   d profit
                                       capital Other                shares                                             equity
                              d stock                                         income
                                       securiti
                                       es
I. Balance at the 297,281,                              560,999,1                                 2,952,586 -91,388, 769,844,4
end of the last year 600.00                                 82.23                                       .32 913.41        55.14
      Add: Changes
of      accounting

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policy
           Error
correction of the
last period

           Other
II. Balance at the
                     297,281,   560,999,1                              2,952,586 -91,388, 769,844,4
beginning of this
                       600.00      82.23                                     .32 913.41      55.14
year
III.       Increase/
Decrease in this                                                                  14,557, 14,557,15
year (Decrease is                                                                 153.64      3.64
listed with ―-‖)
 (i)        Total
                                                                                  14,557, 14,557,15
comprehensive
                                                                                  153.64      3.64
income
 (ii)      Owners’
devoted        and
decreased capital
1.Common shares
invested         by
shareholders
2. Capital invested
by holders of other
equity instruments
3.          Amount
reckoned       into
owners equity with
share-based
payment
4. Other
(III)         Profit
distribution
1. Withdrawal of
surplus reserves
2. Distribution for
owners (or
shareholders)

3. Other
(IV)       Carrying
forward internal
owners’ equity
1. Capital reserves
conversed        to
capital      (share
capital)
2. Surplus reserves
conversed        to
capital      (share
capital)



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3. Remedying loss
with      surplus
reserve
4. Other
(V)     Reasonable
reserve
1. Withdrawal in
the report period

2. Usage in the
report period

(VI)Others
IV. Balance at the
                   297,281,                            560,999,1                                 2,952,586 -76,831, 784,401,6
end of the report
                     600.00                                82.23                                       .32 759.77          08.78
period
   Last period
                                                                                                                    In RMB

                                                                    Last period
                                       Other
                                  equity instrument
                                                                             Other                                        Total
       Item                            Perpetu                     Less:
                       Share                           Capital               comprehe Reasonab Surplus       Retaine
                                                                   Inventory                                            owners’
                      capital Preferre al              reserve               nsive    le reserve reserve     d profit
                                       capital Other               shares                                                equity
                              d stock                                        income
                                       securiti
                                       es
                                                                                                             -109,67
I. Balance at the 220,281,                             4,479,182                                 2,952,586              118,039,6
                                                                                                             3,740.3
end of the last year 600.00                                  .23                                       .32                 28.20
                                                                                                                    5
     Add: Changes
of     accounting
policy
        Error
correction of the
last period

           Other

II. Balance at the                                                                                           -109,67
                   220,281,                            4,479,182                                 2,952,586              118,039,6
beginning of this                                                                                            3,740.3
                     600.00                                  .23                                       .32                 28.20
year                                                                                                                5
III.       Increase/
Decrease in this 77,000,0                              556,520,0                                             4,856,1 638,376,1
year (Decrease is         00.00                            00.00                                               02.44       02.44
listed with ―-‖)
  (i)            Total
                                                                                                             4,856,1 4,856,102
comprehensive
                                                                                                               02.44            .44
income
  (ii)      Owners’
                       77,000,0                        556,520,0                                                        633,520,0
devoted            and
                          00.00                            00.00                                                           00.00
decreased capital

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1.Common shares
invested         by
shareholders
2. Capital invested
by holders of other
equity instruments
3.        Amount
reckoned      into
owners equity with
share-based
payment
4. Other
(III)        Profit
distribution
1. Withdrawal of
surplus reserves
2. Distribution for
owners (or
shareholders)

3. Other
(IV)       Carrying
forward internal
owners’ equity
1. Capital reserves
conversed        to
capital      (share
capital)
2. Surplus reserves
conversed        to
capital      (share
capital)
3. Remedying loss
with      surplus
reserve
4. Other
(V)     Reasonable
reserve
1. Withdrawal in
the report period

2. Usage in the
report period

(VI)Others

IV. Balance at the                                                               -104,81
                   297,281,   560,999,1                              2,952,586             756,415,7
end of the report                                                                7,637.9
                     600.00      82.23                                     .32                30.64
period                                                                                1




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III. Company profile

1. Company profile

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

Foreign name of the Company: ShenZhen Tellus Holding Co.,Ltd
Registered address of the Company: 3/F, Tellus Building, Shuibei 2nd Road, Luohu District, Shenzhen, Guangdong Province.
Office address of the Company: 15/F, Zhonghe Building, Shennan Middle Road, Futian District, Shenzhen
Stock exchange for listing: Shenzhen Stock Exchange
Short form of the stock and Stock code: Tellus-A(000025),Tellus-B(200025)
Registered capital: RMB 297,280,000
Legal representative: Lv Hang
Registration number of legal person business license: 440301103017750
2. Business nature, operating scope and major products and services of the Company
Business nature: wholesale industry of energy, materials and machinery electronic equipments.
Operating scope: mainly engaged in provision of auto related comprehensive services, including sales and maintenance of
autos, production of detection equipments, and property leasing and management.
Major products and services: sales, detection and maintenance of autos and components, property leasing and service.
3. The history of the Company
Shenzhen Testrite Group Co., Ltd. (hereinafter referred to as the Company), previously known as Shenzhen Machinery
Industry Company, was incorporated on 10 November 1986. In 1992, as authorized by the reply relating to Shenzhen
Machinery Industry Company transforming to Shenzhen Testrite Machinery Co., Ltd.(SFBF[1991]1012) issued by the
Office of Shenzhen People Government, Shenzhen Machinery Industry Company was transformed to Shenzhen Testrite
Machinery Co., Ltd. in 1993, as authorized by the reply relating to Shenzhen Testrite Machinery Co., Ltd. transforming to a
public company (SFBF[1992]1850) issued by the Office of Shenzhen People Government and the reply relating to issuance
of stocks by Shenzhen Testrite Machinery and Electric Co., Ltd. (SRYFZ[1993]092) issued by Shenzhen branch of People’s
Bank of China, Shenzhen Testrite Machinery Co., Ltd. changed to be a public company and made the initial public offering.
The name of the Company changed to Shenzhen Testrite Machinery and Electric Co., Ltd., with a total share capital of
166,880,000 shares, among which, 120,900,000 shares were converted from the original assets and 45,980,000 shares were
newly issued. The newly issued shares comprises of 25,980,000 RMB ordinary shares (A shares) and 20,000,000 RMB
special shares (B shares). In June 1993, as approved by the reply relating to listing of Shenzhen Testrite Machinery and
Electric Co., Ltd. (SZBF[1993]34) issued by Shenzhen Securities Management Office and the Listing Grant issued by
Shenzhen Stock Exchange(SZSZ[1993]22), Shenzhen Testrite Machinery and Electric Co., Ltd. was listed on Shenzhen
Stock Exchange. And the Company renamed as Shenzhen Tellus Holding Co., Ltd. dated 30 June 1994 after approval from
the Shenzhen Administration for Industry and commerce. On 15 March 1993, being approved by branch of Shenzhen
Special Economic Zone 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. 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



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                                   Type                                    Amount (Share)                   Ratio (%)

     Total non-tradable shares                                                      120,900,000                         72.45

     II. Outstanding shares

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

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

     Total tradable shares                                                           45,980,000                         27.55

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


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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

     Domestic public shares                                                             48,011,040                      21.80

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

                                 Total                                                 220,281,600                     100.00

(5) Non-public RMB common stock offer in 2015

In accordance with the provisions of the Company’s 19th extraordinary meeting of the 7th session of board of directors on

April 21, 2014 and the resolutions of the fourth extraordinary general meeting of 2014 on June 3, 2014, the non-public

offering of RMB ordinary shares (A shares) that the Company issues to Shenzhen SDG Co., Ltd. and Shenzhen CMAF

Jewelry Industry Investment Company (limited partnership) should not exceed 77,000,000 shares, of which the par value is

1 yuan per share, the total raised funds are no more than RMB 646,800,000.00 yuan, the issuance objects are all subscribed

by cash.

On May 19, 2014, State-owned Assets Supervision and Administration Commission of the People's Government of

Shenzhen Municipality issued ―Reply to issues related to non-public offering of shares of Shenzhen Test Rite (Group) Co.,

Ltd. from SASAC of Shenzhen Municipality‖ (SGZWH No. [2014]237) which agreed the Company’s plan for non-public

offering of shares. The Company’s non-public offering has obtained the ―Approval for non-public offering of shares of

Shenzhen Test Rite (Group) Co., Ltd.‖ (CSRC License No. [2015]173) approved by China Securities Regulatory

Commission, which agrees the Company to issue the non-public offering of RMB ordinary shares (A shares) not exceeding

77,000,000 new shares. The registered capital is RMB 297,281,600.00 yuan after change, and the company’s ownership

structure is as follows:


                                   Type                                      Amount (Share)                Ratio (%)

     State-owned corporate shares                                                      151,870,560                      51.09

     Domestic public shares                                                            119,011,040                      40.03


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                                   Type                                     Amount (Share)                     Ratio (%)

      RMB special stock (B-Share)                                                       26,400,000                           8.88

                                Total                                                 297,281,600                          100.00

(6) Reducing stock by controlling shareholder in May 2016

From 4 May 2016 to 31 May 2016, SDG reducing 2,972,537 un-restricted circulation shares of the Company through

centralized price bidding, presenting 1% of the total share capital of the Company, equity structure after share reducing are

as:

                                   Type                                     Amount (Share)                     Ratio (%)

      State-owned corporate shares                                                    148,898,023                           50.09

      Domestic public shares                                                          121,983,577                           41.03

      RMB special stock (B-Share)                                                       26,400,000                           8.88

                                Total                                                 297,281,600                          100.00
4. Consolidation scope of the Company in the year
Totally 14 companies included in the consolidation scope for the Year of 2016, found more in ―Equity in other entity‖ in the
Note VIII. The consolidation range has no changes over that of last year.

5. Relevant party offering approval reporting of financial statements and date thereof
This financial statement is approved for disclosure by resolution from the Board dated 25 August 2016.
IV. Basis Preparation of the Financial Statements
The financial statements of the Group is prepared based on the going-concern assumption in accordance with the actually
occurred transactions and events, the ―Accounting standards for Businees Enteprise-Basic rules‖ (ministry of finance order
No. 33 issued, ministry of finance No.76 revised), the ―Accounting Standards for Business Enterprises – Basic Standards‖
and 41 specific accounting standards promulgated by the ministry of finance on 15 th, 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‖ (2014
Revision).
According to the relevant requirements under the Accounting Standards for Business Enterprises, the Company has adopted
the accrual basis as its basis of accounting. Except for certain financial instruments, historical costs have been adopted as the
basis of measurement in these Financial Statements. Non-current assets held for sale are recorded at the lower of fair value
less predicted expenses and the original carrying value when the assets satisfy such conditions for sale. Provisions of
corresponding impairment losses are recognised in respect of any impairment of assets.


V. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Groups meet the requirements of the Accounting Standards for Business
Enterprises, truthfully and completely reflect the financial situation of the Company on 30th, June, 2016, and the business
performance and cash flow in January to June of 2016. 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


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Publicly No.15—General Rules of Financial Report‖ revised by China Securities Regulatory Commission in all significant
aspects in 2014.
VI. Main accounting policy and estimate

The Company and its subsidiaries determine specific accounting policies and accounting estimation based on their actual
production characteristics according to the relevant requirements under the Accounting Standards for Business Enterprises.
Details relating to significant accounting judgment and estimation made by the management, please refer to note IV(29)
―Significant accounting judgment and estimation‖
1. Fiscal period
The accounting period of the Group includes annual and interim, accounting interim refers to the reporting period shorter
than a complete fiscal year. The fiscal year of the Group adopts the Gregorian calendar, i.e. from 1 January to 31 December
for each year.
2. Business cycle
Normal business cycle is the period from purchasing assets used for process by the Company to the cash and cash equivalent
achieved.
The Company’s normal business cycle was one-year (12 months), and as the determining criterion of the liquidity for astes
and liabilities.
3. Book-keeping currency
RMB is the currency in the major economic environment of the Company and its sub-company which take RMB as the
book-keeping currency. The Group adopts RMB as the currency when preparing this financial statement.
4. The accounting treatment of business merger under the common control and the different control.

Business merger refers to the transactions or matters that two or more than two individual enterprises form a reporting entit.

Business combination is at least subject to the following conditions: to acquire controlling right upon another or multiple

enterprises (or business); enterprises to be combined must constitute business. In case that an acquirer obtains controlling

right upon another or multiple enterprises which do not constitute business, the transaction shall not constitute business

combination.

When acquirer acquires a group of assets or net assets which don’t constitute business, the acquisition costs shall be

allocated into various identifiable assets or liabilities based on their fair value as of the acquisition date. Where there are

specific identifiable assets which cannot be substituted taking substantial proportion in a group of assets or net assets and the

future cash flow of the acquiree also highly depends on such specific identifiable assets, the remaining amount between

acquisition costs less fair value of other identifiable assets shall be entirely recorded in such specific identifiable assets.
Business merger includes the business merger under the common control and the different control.
(1) Business merger under the common control
Business merger under the common control means the enterprises participated in the merger are subject to the ultimate
control of the same party or the same multi-party before and after the merger, and the control is not temporary. For the
business merger under the same control, the party obtains the control rights of other enterprises participated in the merger on
the merger date is the merging party, and other enterprises participated in the merger are the merged party. The merger date
refers to the date that the merging party obtains the control rights of the merged party.
The assets and liabilities of the merging party should be measured in accordance with the book value of the combined party
on the combining date. The balance between the book value of the net asset obtained by the merging party and the book
value of the merger consideration (or the total face value of the issued shares) paid by the merging party, and adjust the


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capital reserve (share premium); for the capital reserve (share premium) insufficient to reduce, adjust the retained earnings.
All direct expenses the merging party spent for the business merger are included in the current profit and loss when the
business merger occurred.
(2) Business merger under the different control
Business merger under the different control means the enterprises participated in the merger are not subject to the ultimate
control of the same party or the same multi-party before and after the merger. For the business merger under the different
control, the party obtains the control rights of other enterprises participated in the merger on the acquisition date is the
acquirer, and other enterprises participated in the merger are the acquiree. The acquisition date refers to the date that the
acquirer obtains the control rights of the acquiree.
As for the business merger under the different control, the merger costs contain the assets paid by the acquirer for obtaining
the control rights of the acquiree on the acquisition date, the liabilities incurred or assumed, and the fair value of the issued
equity securities. The intermediary fees such as auditing, legal services and consulting services costs and other
administrative costs incurred by the business merger are charged to the current profit and loss. The transaction costs of the
equity securities or debt securities issued as the combination consideration by the acquirer are reckoned in the initially
recognized amount of the equity securities or debt securities. As for the involved or existing consideration reckoned in the
merger costs in accordance with the fair value on the acquisition date, correspondingly adjust the consolidated goodwill for
these needs to be adjusted or possess consideration because new or further evidence appears for the situations existing on the
acquisition date within 12 months after the acquisition date The merger costs of the acquirer and the net identifiable assets
obtained in the merger are reckoned in accordance with the fair value on the acquisition date. The balance of which the
merger costs are more than the net 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.
For a business combination not involving enterprises under common control and achieved in stages, the company shall
determine whether the business combination shall be regarded as ―a bundle of transactions‖ in accordance with
―Interpretation 5 on Accounting Standards for Business Enterprises‖ (Cai Kuai 2012 No. 19) and clause 51 of ASBE 33-
Consolidated Financial Statements relating to judgment standard for ―a bundle of transactions‖(please refer to this Note IV
5(2)). When the business combination is regarded as ―a bundle of transactions‖, the accounting treatment for the business
combination shall be in accordance with the previous paragraphs and Note IV 13 ―long term equity investment‖; when the
business combination is not regarded as ―a bundle of transactions‖, the accounting treatment should be different when comes
to individual financial report and consolidated financial report.
In the individual financial statements, the initial cost of the investment shall be the sum of the carrying amount of its
previously-held equity interest in the acquiree prior to the acquisition date and the amount of additional investment made to
the acquiree at the acquisition date. Other comprehensive income involved in the previously-held equity interest of the
acquiree prior to the acquisition date shall be subject to accounting treatment on the same basis adopted by the acquiree in


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its direct disposal of related assets or liabilities (which are reclassified as investment income during the period , net of the
audited changing corresponding shares resulted from the net liability and net assets remeasured and set by acquiree
according to equity method ).
In the consolidate financial statements, the previously-held equity interest of the acquire is re-measured according to the fair
value at the acquisition date; the difference between the fair value and the carrying amount is recognized as investment
income for the current period; the amount recognized in other comprehensive income relating to the previously-held equity
interest in the acquire shall be subject to accounting treatment on the same basis adopted by the acquire in its direct disposal
of related assets or liabilities (which are reclassified as investment income during the period, net of the audited changing
corresponding shares resulted from the net liability and net assets re-measured and set by acquire according to equity
method).
5. Preparing method of consolidated financial statements
(1) Determinate principles of range for consolidation financial statement
The scope of consolidated financial statements is determined based on control. Control is the power to govern the investees
so as to obtain benefits from their operating activities by the involvement in the relevant activities of the investee. The scope
of consolidation comprises the Company and all of its subsidiaries. Subsidiaries are the entities controlled by the Company.
Once relevant elements involved in the above definition of control change due to alteration of relevant facts or situations, the
Company will make evaluation again.
(2) Preparing method of consolidated financial statements
Since the date of gaining the net assets and the actual control rights of the production and operation decision-making of the
subsidiaries, the Group has started to bring it into the consolidation scope; stop to bring into the consolidation scope since
the date of losing the actual control rights. As for the disposed subsidiaries, the business performance and cash flow before
the disposal have been suitably included in the consolidated income statement and the consolidated cash flow statement; as
for the subsidiaries currently disposed; don’t adjust the opening balance of the consolidated balance sheet. For the
subsidiaries increased by the business merger under the different control, the business performance and cash flow after its
acquisition date have been suitably included in the consolidated income statement and the consolidated cash flow statement,
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.
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.



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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. The other
consolidated incomes related to the equity investment of the original sub companies, It shall be subject to accounting
treatment on the same basis adopted by the acquiree in its direct disposal of related assets or liabilities during the period
when the control ceases (which are reclassified as investment income for the current period, other than changes resulting
from re-measuring net liability or net assets under defined benefit plan of the original subsidiary). Thereafter, do the
follow-up measurement for 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 13 ―long-term equity investment‖ or the Note IV 9
―financial instruments‖ for details.
The company shall determine whether loss of control arising from disposal in a series of transactions should be regarded as
a bundle of transactions. When the economic effects and terms and conditions of the disposal transactions met one or more
of the following situations, the transactions shall normally be accounted for as a bundle of transactions: (i) The transactions
are entered into after considering the mutual consequences of each individual transaction; (ii) The transactions need to be
considered as a whole in order to achieve a deal in commercial sense; (iii) The occurrence of an individual transaction
depends on the occurrence of one or more individual transactions in the series; (iv) The result of an individual transaction is
not economical, but it would be economical after taking into account of other transactions in the series. When the
transactions are not regarded as a bundle of transactions, the individual transactions shall be accounted as ―disposal of a
portion of an interest in a subsidiary which does not lead to loss of control‖) (for details, please refer to Note IV 13(2)④)
and ―disposal of a portion of an interest in a subsidiary which lead to loss of control‖ (details are set out in previous
paragraph). When the transactions are regarded as a bundle of transactions, the transactions shall be accounted as a single
disposal transaction; however, the difference between the consideration received from disposal and the share of net assets
disposed in each individual transactions before loss of control shall be recognized as other comprehensive income, and
reclassified as profit or loss arising from the loss of control when control is lost.
6. Classification of joint arrangement and accounting for joint operations
A joint arrangement refers to an arrangement jointly controlled by two or more parties. In accordance with the Company’s
rights and obligations under a joint arrangement, the Company classifies joint arrangements into: joint ventures and joint
operations. Joint operations refer to a joint arrangement during which the Company is entitled to relevant assets and
obligations of this arrangement. Joint ventures refer to a joint arrangement during which the Company only is entitled to net
assets of this arrangement.
Investment in joint venture is accounted for using the equity method accounting to the accounting policies referred to Note
IV 13(2)②―Long-term equity investment accounted for using the equity method‖.

The Company shall, as a joint venture, recognise the assets held and obligations assumed solely by the Company, and
recognise assets held and obligations assumed jointly by the Company in appropriation to the share of the Company;
recognise revenue from disposal of the share of joint operations of the Company; recognise fees solely occurred by
Company and recognise fees from joint operations in appropriation to the share of the Company.
When the Company, as a joint venture, invests or sells assets to or purchase assets (the assets dose not constitute a business,
the same below) from joint operations, the Company shall only recognise the part of profit or lost from this transaction
attributable to other parties of joint operations before these assets are sold to a third party. In case of an impairment loss
incurred on these assets which meets the requirements as set out in ―Accounting Standards for Business Enterprises No. 8 –
Asset Impairment‖, the Company shall recognise the full amount of this loss in relation to its investment in or sale of assets

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to joint operations, or recognise the loss according to the Company’s share of commitment in relation to the its purchase of
assets from joint operations.
7. Determination criteria of cash and cash equivalent
Cash and cash equivalent of the Company including stock cash, deposits available for payment at any time and the
investment held by the Company with the follow characters obtained at the same time: short term (expire within 3 months
commencing from purchase day), active liquidity, easy to convert to already-known cash, and small value change risks.
8. Foreign Currency Operations and translation of foreign currency statements
(1) Basis for translation of foreign currency transactions
The foreign currency transactions of the Company, when initially recognized, are translated into functional currency at the
prevailing spot exchange rate on the date of exchange (usually refers to the middle rate of the exchange rate for the day as
quoted by 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.
(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.
When preparing consolidated financial statement involving overseas operation, in case there is foreign currency monetary
items which substantially constitute net investment in overseas operation, the exchange difference arising from exchange
rate fluctuation shall be included in other comprehensive income; and shall transfer to gains and losses from disposal for the
current period when the overseas operation is disposed of.
The foreign currency non-monetary items measured at historical cost shall still be measured by the functional currency
translated at the spot exchange rate on the date of the transaction. Foreign currency non-monetary items measured at fair
value are translated at the spot exchange rate on the date of determination of the fair value. The difference between the
amounts of reporting currency before and after the translation will be treated as changes in fair value (including changes in
foreign exchange rates) and recognized in profit or loss for the period or recognized as other consolidated income.
(3) Translation of foreign currency financial statement
When preparing consolidated financial statement involving overseas operation, in case there is foreign currency monetary
items which substantially constitute net investment in overseas operation, the exchange difference arising from exchange
rate fluctuation shall be included in other comprehensive income as ―translation difference of foreign currency statement‖;
and shall transfer to gains and losses from disposal for the current period when the overseas operation is disposed of.
Foreign currency financial statement for overseas operation is translated into RMB statement by the following means: assets
and liabilities in balance sheet are translated at the spot rate as of balance sheet date; owner’s equity items (other than
undistributed profit) are translated at the spot rate prevailing on the date of occurrence. Income and expense items in profit
statement are translated at the spot rate prevailing on the date of transactions. Beginning undistributed profit represents the
translated ending undistributed profit of previous year; ending undistributed profit is allocated and stated as several items
upon translation. Upon translation, difference between assets, liabilities and shareholders’ equity items shall be recorded as
foreign currency financial statement translation difference and recognized as other comprehensive income.             In case of
disposal of overseas operation where control is lost, foreign currency financial statement translation difference relating to
the overseas operation as stated under shareholders’ equity in balance sheet shall be transferred to current gains and losses of
disposal in full or under the proportion it disposes.



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Foreign currency cash flow and cash flow of overseas subsidiary are translated at the spot rate prevailing on the date of
occurrence of cash flow. Influence over cash from exchange rate fluctuation is taken as adjustment items to separately stated
in cash flow statement.
The beginning figure and previous year actual figures are stated at the translated figures in previous year financial statement.
If the Company loses control over overseas operation due to disposal of all the owners’ equity or part equity investment in
the overseas operation or other reasons, foreign currency financial statement translation difference relating to the overseas
operation attributable to owners’ equity of parent company as stated under shareholders’ equity in balance sheet shall be
transferred to current gains and losses of disposal in full.
If the Company reduces equity proportion while not loses control over overseas operation due to disposal of part equity
investment in the overseas operation or other reasons, foreign currency financial statement translation difference relating to
the disposed part will be vested to minority interests and will not transfer to current gains and losses. When disposing part
equity interests of overseas operation which is associate or joint venture, foreign currency financial statement translation
difference relating to the overseas operation shall transfer to current disposal gains and losses according to the disposed
proportion.

9. Financial instruments
(1) Method of determination of the fair value for financial assets and financial liabilities
Fair value represents the price that market participator can receive for disposal of an asset or he should pay for transfer of a
liability in an orderly transaction happened on the measurement date. Financial instruments exist in an active market. Fair
value is determined based on the quoted price in such market. An active market refers to where pricing is easily and
regularly obtained from exchanges, brokers, industrial organizations and price-fixing service organizations, representing the
actual price of a market transaction that takes place in a fair deal. While financial instruments do not exist in an active
market, the fair value is determined using valuation techniques. Valuation technologies include reference to be familiar with
situation and prices reached in recent market transactions entered into by both willing parties, reference to present fair
values of similar other financial instruments, cash flow discounting method and option pricing models.

(2) Classification, recognition and measurement of the financial assets
Financial asset or financial liability is recognized when the Company becomes a party to financial instrument contract.
Financial assets and liabilities are initially measured at fair value. For financial assets and financial liabilities classified as
fair value through profit or loss, relevant transaction costs are directly recognized in profit or loss for the period. For
financial assets and financial liabilities classified as other categories, relevant transaction costs are included in the amount
initially recognized.

①Financial assets carried at fair value through profit or loss for the current period
They include financial assets held for trading and financial assets designated as at fair value through profit or loss for the
current period.
Financial assets may be classified as financial assets held for trading if one of the following conditions is met: A. the
financial assets is acquired or incurred principally for the purpose of selling it in the near term; B. the financial assets is part
of a portfolio of identified financial instruments that are managed together and for which there is objective evidence of a
recent pattern of short-term profit taking; or C. the financial assets is a derivative, excluding the derivatives designated as
effective hedging instruments, the derivatives classified as financial guarantee contract, and the derivatives linked to an
equity instrument investment which has no quoted price in an active market nor a reliably measured fair value and are
required to be settled through that equity instrument.
A financial asset may be designated as at FVTPL upon initial recognition only when one of the following conditions is
satisfied: A. Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would
otherwise result from measuring assets or recognizing the gains or losses on them on different bases; or B. The financial


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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.
②Held-to-maturity investments
They are non-derivative financial assets with fixed maturity dates and fixed or determinable payments that the Group has
positive intent and ability to hold to maturity.
Held-to-maturity investments are subsequently measured at amortized cost using the effective interest method. Gain or loss
on derecognition, impairment or amortization is recognized through profit or loss for the current period.
The effective interest method is a method of calculating the amortized cost of a financial asset and of allocating interest
income or expense over each period based on the effective interest of a financial asset or a financial liability (including a
group of financial assets or financial liabilities). The effective interest is the rate that discounts future cash flows from the
financial asset or financial liability over its expected life or (where appropriate) a shorter period to the carrying amount of
the financial asset or financial liability.
In calculating the effective interest rate, the Group will estimate the future cash flows (excluding future credit losses) by
taking into account all contract terms relating to the financial assets or financial liabilities whilst considering various fees,
transaction costs and discounts or premiums which are part of the effective interest rate paid or received between the parties
to the financial assets or financial liabilities contracts.
③ Loans and receivable
They are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
Financial assets, including bills receivable, accounts receivable, interest receivable, dividends receivable and other
receivables, are classified as loans and receivables by the Group.
Loans and receivables are subsequently measured at amortized cost using the effective interest method. Gain or loss arising
from derecognition, impairment or amortization is recognized in current profit or loss.
④Available-for-sale financial assets
They include non-derivative financial assets that are designated in this category on initial recognition, and the financial
assets other than the financial assets at fair value through profit and loss, loans and receivables and held-to-maturity
investments.
The closing cost of available-for-sale debt instruments are determined based on amortised cost method, which means the
amount of initial recognition less the amount of principle already repaid, add or less the accumulated amortised amount
arising from the difference between the amount due on maturity and the amount initially recognised using effective interest
rate method, and less the amount of impairment losses recognised. The closing cost of available-for-sale equity instruments
is equal to its initial acquisition cost.
Available-for-sale financial assets are subsequently measured at fair value. The gain or loss on change in fair value are
recognized as other comprehensive income, except for impairment loss and exchange differences arising from foreign
monetary financial assets and amortized cost which are accounted for through profit or loss for the current period. The
financial assets will be transferred out of the financial assets on derecognition and accounted for through profit or loss for
the current period.
However, equity instrument investment which is not quoted in active market and whose fair value cannot be measured
reliably, and derivative financial asset which is linked to the equity instrument and whose settlement is conditional upon
delivery of the equity instrument, shall be subsequently measured at cost.




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Interests received from available-for-sale financial assets held and the cash dividends declared by the investee are
recognized as investment income.
(3) Impairment of financial assets
In addition to financial assets at fair value through profit or loss for the current period, the Group reviews the book value of
other financial assets at each balance sheet date and provide for impairment where there is objective evidence that financial
assets are impaired.
For a financial asset that is individually significant, the Group assesses the asset individually for impairment. For a financial
asset that is not individually significant, the Group assess the asset individually for impairment or include the asset in a
group of financial assets with similar credit risk characteristics and collectively assess them for impairment. If it is
determined that no objective evidence of impairment exists for an individually assessed financial asset, whether the financial
asset is individually significant or not, the financial asset is included in a group of financial assets with similar credit risk
characteristics and collectively assessed for impairment. Financial assets for which an impairment loss is individually
recognized are not included in the collective assessment for impairment.
①Impairment of held-to-maturity investments, loans and receivables
The carrying amount of financial assets measured at costs or amortized costs are subsequently reduced to the present value
discounted from its projected future cash flow. The reduced amount is recognized as impairment loss and recorded as profit
or loss for the period. After recognition of the impairment loss from financial assets, if there is objective evidence showing
recovery in value of such financial assets impaired and which is related to any event occurring after such recognition, the
impairment loss originally recognized shall be reversed to the extent that the carrying value of the financial assets upon
reversal will not exceed the amortized cost as at the reversal date assuming there is no provision for impairment.
②Impairment of available-for-sale financial assets
In the event that decline in fair value of the available-for-sale equity instrument investment is regarded as ―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.

The company’s standards to judge if the fair value of available for sale equity instruments investment has a ―severe‖

depreciation is that if the fair value of a single available for sale financial asset has a sharp fall which exceeds 50% of its

holding cost, then this available for sale financial asset is affirmed to have a severe decrease in value and should have the

provision for asset impairment to confirm the impairment loss.

The company’s standards to judge if the fair value of available for sale equity instruments investment has a ―non-temporary"

depreciation is that if the fair value of a single available for sale financial asset has a sharp fall and this downtrend is

predicted to be non-temporary with the duration over a year that cannot be fundamentally changed in the whole holding

period, then this available for sale financial asset is affirmed to have a non-temporary decrease in value and should have the

provision for asset impairment to confirm the impairment loss.

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


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originally recognized shall be reversed. The impairment loss reversal of the available-for-sale equity instrument will be
recognized as other consolidated income, and the impairment loss reversal of the available-for-sale debt instrument will be
included in the profit or loss for the period.
When an equity investment that is not quoted in an active market and the fair value of which cannot be measured reliably, or
the impairment loss of a derivative financial asset linked to the equity instrument that shall be settled by delivery of that
equity instrument, then it will not be reversed.
(4) Recognition and measurement of transfers of financial asset
Financial asset that satisfied any of the following criteria shall be derecognized: ①the contract right to recover the cash
flows of the financial asset has terminated; ② 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 ③ the financial asset has been transferred to
the transferee, and the transferor has given up the control on such financial asset, though it does not assign maintain
substantially all the risk and return arising from the ownership of the financial asset.
When the entity does not either assign or maintain substantially all the risk and return arising from the ownership of the
financial asset and does not give up the control on such financial asset, to the extent of its continuous involvement in the
financial asset, the entity recognizes it as a related financial asset and recognizes the relevant liability accordingly. The
extent of the continuous involvement is the extent to which the entity exposes to changes in the value of such financial
assets.
On derecognition of a financial asset, the difference between the following amounts is recognized in profit or loss for the
current period: the carrying amount and the sum of the consideration received and any accumulated gain or loss that had
been recognized directly in equity.
If a part of the financial assets qualifies for derecognition, the carrying amount of the financial asset is allocated between the
part that continues to be recognized and the part that qualifies for derecognition, based on the fair values of the respective
parts. The difference between the following amounts is recognized in profit or loss for the period: the sum of the
consideration received and the carrying amount of the part that qualifies for derecognition and the aforementioned carrying
amount.

For financial assets that are transferred with recourse or endorsement, the Company needs to determine whether the risk and

rewards of ownership of the financial asset have been substantially transferred. If the risk and rewards of ownership of the

financial asset have been substantially transferred, the financial assets shall be derecognised. If the risk and rewards of

ownership of the financial assets have been retained, the financial assets shall not be derecognised. If the Company neither

transfers nor retains substantially all the risks and rewards of ownership of the financial assets, the Company shall assess

whether the control over the financial assets is retained, and the financial assets shall be accounted for according to the

above paragraphs.
(5) Classification and measurement of financial liabilities
At initial recognition, financial liabilities are classified either as ―financial liabilities at fair value through profit 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
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.



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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.
② Other financial liabilities
Derivative financial liabilities which are linked to equity instruments that are not quoted in an active market and the fair
value of which cannot be measured reliably measured, and which shall be settled by delivery of equity instruments are
subsequently measured at cost. Other financial liabilities are subsequently measured at amortized cost using the effective
interest method. Gains or losses arising from derecognition or amortization is recognized in profit or loss for the current
period.

③Financial guarantee contract

Financial guarantee contract in respect of financial liabilities not designed at fair value through profit or loss shall be

initially measured at fair value, and subsequently measured at the lower between the amount determined under Accounting

Standards for Enterprises No.13-Contingent issues and its initial measurement amount less accumulative amortization

determined under Accounting Standards for Enterprises No.14-Revenue.

(6) Derecognition of financial liabilities

Financial liabilities are derecognized in full or in part only when the present obligation is discharged in full or in part. An

agreement is entered between the Group (debtor) and a creditor to replace the original financial liabilities with new financial

liabilities with substantially different terms, derecognize the original financial liabilities as well as recognize the new

financial liabilities.

When financial liabilities is derecognized in full or in part, the difference between the carrying amount of the financial

liabilities derecognized and the consideration paid (including transferred non-cash assets or new financial liability) is

recognized in profit or loss for the current period.
(7) Derivatives and embedded derivatives
Derivatives are initially measured at fair value as of the execution date of relevant contract, and subsequently measured at
fair value. Change of fair value of derivatives is recorded in profit or loss for the period.
In respect of mixed instruments containing embedded derivatives, if they are financial assets or financial liabilities not
designated at fair value through profit or loss, and there is no close relation between embedded derivatives and such main
contract in terms of economic characteristics and risk, separate instrument shares the same conditions with embedded
derivatives and meets definition of derivatives, the embedded derivatives are split off from the mixed instruments and
accounted for as separate derivative financial instrument. If an embedded derivative instrument cannot be measured
separately upon acquisition or at subsequent balance sheet date, the mixed instruments shall be taken in its entirety as
financial assets or financial liabilities designated at fair value through profit or loss.

(8) Offset of Financial Assets and Financial Liabilities
If the Group owns the legitimate rights of offsetting the recognized financial assets and financial liabilities, which are
enforceable currently, and the Group plans to realize the financial assets or to clear off the financial liabilities by net amount
method, the amount of the offsetting financial assets and financial liabilities shall be reported in the balance sheep.
Otherwise, financial assets and financial liabilities are presented separately in the balance sheet without offsetting.
(9) Equity instruments
Equity instruments are any contract that evidences a residual interest in the assets of an entity after deducting all of its


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liabilities. The Company issues (including refinancing), repurchases, sells or cancels equity instruments as movement of
equity. No fair value change of equity instrument would be recognized by the Company. Transaction fees relating to equity
transactions are deducted from equity.

The distribution (excluding the dividends) to the equity instrument holders by the Group shall reduce the
shareholder’s equity. The Group shall not recognize the changes of the equity instruments’ fair value.

10. Account receivable
Account receivable including receivables and other account receivables etc.
(1) Recognition standards for bad debt provision
On balance sheet date, the Company examined book value of the account receivable, if the followed objective evidence has
been show for impairment occurred, impairment provision shall withdrawal: ①the debtor has serious financial difficulties;
②debtor violated the terms of the contract (such as interest or principal payment default or overdue etc.); ③debtor probably
close down or exercise other financial restructuring; 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

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


                  Item                                                        Depreciation method


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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

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

Within 1 year (including one year, the same below)                        No accrual                     No accrual

1-2 years                                                                         5                           5

2-3 years                                                                     20                             20

Over 3 years                                                                  50                             50
③Accounts receivable that are individually insignificant but with bad debt provision provided on an individual basis:
Account receivable with RMB one million at most and other account receivable with RMB 500,000 at most are recognized
as account receivable with insignificant single amount.
As for the account receivable with insignificant single amount but with followed features, exercise impairment separately, if
there has evidence of impairment, provision for bad debts shall be made at the difference of present value of estimated
future cash flows in short of their book values, and shall be recognized as impairment losses: account receivable with
dispute and arbitration involved or exist with the counter party; receivables which has obvious evidence that the debtor
probably unable to performed payment obligations etc.
(3) Reversal of bad debt provisions

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

Inventory including raw materials, stock commodity and low value consumables etc.
(2) Pricing for inventories delivered and obtained
Inventories are priced at actual costs when acquired. Inventory cost includes procurement cost, processing cost and other
costs. Raw materials and inventory commodities are measured under weighted average method when applied for use and
delivered.
(3) Recognition for net realizable value of inventories and withdrawal method for inventory impairment provision
Net realizable value refers to the amount resulted 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


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values. Provision for inventory depreciation reserve are made while the net realizable values below the
cost. Inventory falling price reserves withdrawal usually base on the difference of the cost of single
inventory which over the net realizable value. As for inventories with numerous quantity and low unit
price, inventory depreciation provision is made based on categories of inventories.
After inventory impairment provision, if any factor rendering write-downs of the inventories has been
eliminated as net realizable value higher than its book value resulted, the amounts written down are
recovered and reversed from the inventory depreciation reserve, which has been provided for. The
reversed amounts are included into the current profit and loss.
(4) Inventory system was the perpetual inventory system.
(5) Low value consumptions and packing materials are amortized under amortization method when applied for use.
12. Classified as assets held for sale
If a non-current asset can be promptly sold at its existing status only according to the practice terms in connection with
disposal of this kind of assets, and the Company has already made resolution on disposal of the non-current asset and
entered into irrevocable transfer agreement with the transferee, and this transfer will be completed within one year, then the
non-current asset would be calculated as non-current asset held for sale which would be not applicable to depreciation or
amortisation since the date of classification as asset held for sale, and would be measured at the lower of its carrying value
less disposal cost and fair value less disposal cost. Non-current asset held for sale consists of single item asset and disposal
group. If a disposal group is a group of assets as defined by No.8 of Business Accounting Standards-Assets Impairment, and
goodwill arising from business combination shall be allocated to the group of assets under this accounting principle, or the
disposal group constitutes one operation of the group of assets, then the disposal group includes the goodwill arising from
business combination.
For single non-current asset and asset in disposal group classified as assets held for sale, they shall be presented in balance
sheet separately as current assets. For liabilities in disposal group relating to the transferred assets classified as assets held
for sale, they shall be presented in balance sheet separately as current liabilities.
If an asset or disposal group classified as held for sale no longer meets the recognition condition as non-current asset held
for sale, the Company will cease such recognition and measure the asset at the lower of (1)the carrying value of the asset or
disposal group prior to being classified as held for sale, based on the amount adjusted with the depreciation, amortisation or
impairment which should have been recognised assuming it had not been classified as held for sale; (2)the recoverable
amount on the date when the Company decides to cease disposal.
13. Long-term equity investments
Long-term equity investments under this section refer to long-term equity investments in which the Company has control,
joint control or significant influence over the investee. Long-term equity investment without control or joint control or
significant influence of the Group is accounted for as available-for-sale financial assets or financial assets measured at fair
value with any change in fair value charged to profit or loss. Details on its accounting policy please refer to Note 9.
―Financial instruments‖ under section IV.
Joint control is the Company’s contractually agreed sharing of control over an arrangement, which relevant activities of such
arrangement must be decided by unanimously agreement from parties who share control. Significant influence is the power
of the Company to participate in the financial and operating policy decisions of an investee, but to fail to control or joint
control the formulation of such policies together with other parties.
(1) Determination of investment cost
For a long-term equity investment acquired through a business combination involving enterprises under common control,
the initial investment cost of the long-term equity investment shall be the absorbing party’s share of the carrying amount of

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the owner’s equity under the consolidated financial statements of the ultimate controlling party on the date of combination.
The difference between the initial cost of the long-term equity investment and the cash paid, non-cash assets transferred as
well as the book value of the debts borne by the absorbing party shall offset against the capital reserve. If the capital reserve
is insufficient to offset, the retained earnings shall be adjusted. If the consideration of the merger is satisfied by issue of
equity securities, the initial investment cost of the long-term equity investment shall be the absorbing party’s share of the
carrying amount of the owner’s equity under the consolidated financial statements of the ultimate controlling party on the
date of combination. With the total face value of the shares issued as share capital, the difference between the initial cost of
the long-term equity investment and total face value of the shares issued shall be used to offset against the capital reserve. If
the capital reserve is insufficient to offset, the retained earnings shall be adjusted. For business combination resulted in an
enterprise under common control by acquiring equity of the absorbing party under common control through a stage-up
approach with several transactions, these transactions will be judged whether they shall be treat as ―transactions in a basket‖.
If they belong to ―transactions in a basket‖, these transactions will be accounted for a transaction in obtaining control. If
they are not belong to ―transactions in a basket‖, 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 under the consolidated financial statements of the
ultimate controlling party on the date of combination. The difference between the initial cost of the long-term equity
investment and the aggregate of the carrying amount of the long-term equity investment before merging and the carrying
amount the additional consideration paid for further share acquisition on the date of combination shall offset against the
capital reserve. If the capital reserve is insufficient to offset, the retained earnings shall be adjusted. Other comprehensive
income recognised as a result of the previously held equity investment accounted for using equity method on the date of
combination or recognised for available-for-sale financial assets will not be accounted for.
For a long-term equity investment acquired through a business combination involving enterprises not under common control,
the initial investment cost of the long-term equity investment shall be the cost of combination on the date of acquisition.
Cost of combination includes the aggregate fair value of assets paid by the acquirer, liabilities incurred or borne and equity
securities issued. For business combination resulted in an enterprise not under common control by acquiring equity of the
acquiree under common control through a stage-up approach with several transactions, these transactions will be judged
whether they shall be treat as ―transactions in a basket‖. If they belong to ―transactions in a basket‖, these transactions will
be accounted for a transaction in obtaining control. If they are not belong to ―transactions in a basket‖, the initial investment
cost of the long-term equity investment accounted for using cost method shall be the aggregate of the carrying amount of
equity investment previously held by the acquiree and the additional investment cost. For previously held equity accounted
for using equity method, relevant other comprehensive income will not be accounted for. For previously held equity
investment classified as available-for-sale financial asset, the difference between its fair value and carrying amount, as well
as the accumulated movement in fair value previously included in the other comprehensive income shall be transferred to
profit or loss for the current period.
Agent fees incurred by the absorbing party or acquirer for the acquisition such as audit, legal service, and valuation and
consultation fees, and other related administration expenses are charged to profit or loss in the current period at the time
such expenses incurred.
The long-term equity investment acquired through means other than a business combination shall be initially measured at its
cost. Such cost is depended upon the acquired means of long-term equity investments, which is recognised based on the
purchase cost actually paid by the Company in cash, the fair value of equity securities issued by the Group, the agreed value
of investment contract or agreement, the fair value or original carrying amounts of the non-monetary asset exchange
transaction which the asset will be transferred out of the Company, and the fair value of long-term equity investment itself.
The costs, taxes and other necessary expenses that are directly attributable to the acquisition of the long-term equity
investments are also included in the investment cost. For additional equity investment made in order to obtain significant
influence or common control over investee without resulted in control, the relevant cost for long-term equity investment



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shall be the aggregate of fair value of previously held equity investment and additional investment cost determined
according to ―Accounting Standard for Business Enterprises No. 22 – Recognition and measurement of Financial
Instruments‖.
(2) Subsequent measurement and income recognition method
Long term equity investment by which the Company has common control (other than that constituting joint operation) or
significant influence in investee is measured under equity method. In addition, long term equity investment by which the
Company is able to exercise control in investee is measured under cost method in financial statements.

①Long term equity investment measured under cost method

Under cost method, long term equity investment is measured at initial investment cost, and cost of long term equity
investment shall be adjusted in case of adding or recovering investment. Other than the price actually paid when obtaining
investment or cash dividends or distribution declared but not paid in consideration, investment income for the period would
be recognised based on the cash dividend or distribution declared by the investee.

② Long-term equity investments accounted for using the equity method
Under the equity method, where the initial investment cost of a long-term equity investment exceeds 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 and other comprehensive income shall be recognised based on the Group’s share
of the net profits or losses and other comprehensive income made by the investee, respectively. Meanwhile, the carrying
amount of long-term equity investment shall be adjusted. The carrying amount of long-term equity investment shall be
reduced based on the Group’s share of profit or cash dividend distributed by the investee. In respect of the other movement
of net profit or loss, other comprehensive income and profit distribution of investee, the carrying value of long-term equity
investment shall be adjusted and included in the capital reserves. The Group shall recognise its share of 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 the event of inconformity between the accounting policies and accounting
periods of the investee and the Company, the financial statements of the investee shall be adjusted in conformity with the
accounting policies and accounting periods of the Company. Investment gain and other comprehensive income shall be
recognised accordingly. In respect of the transactions between the Group and its associates and joint ventures in which the
assets disposed of or sold are not classified as operation, the share of unrealised gain or loss arising from inter-group
transactions shall be eliminated by the portion attributable to the Company. Investment gain shall be recognised accordingly.
However, any unrealised loss arising from inter-group transactions between the Group and an investee is not eliminated to
the extent that the loss is impairment loss of the transferred assets. In the event that the Group disposed of an asset classified
as operation to its joint ventures or associates, which resulted in acquisition of long-term equity investment by the investor
without obtaining control, the initial investment cost of additional long-term equity investment shall be the fair value of
disposed operation. The difference between initial investment cost and the carrying value of disposed operation will be fully
included in profit or loss for the current period. In the event that the Group sold an asset classified as operation to its
associates or joint ventures, the difference between the carrying value of consideration received and operation shall be fully
included in profit or loss for the current period. In the event that the Company acquired an asset which formed an operation
from its associates or joint ventures, relevant transaction shall be accounted for in accordance with ―Accounting Standards
for Business Enterprises No. 20 ―Business combination‖. All profit or loss related to the transaction shall be accounted for.



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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.
③Acquisition 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.
④Disposal 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 shareholders’ equity. As for the disposal of a
portion of the long term equity investments in a subsidiary by the parent company leading to lose of control over such
subsidiary, it shall be accounted for under the relevant accounting policies described in Note IV.5-(2) Headed ―preparation
methods for consolidated 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.
In respect of long-term equity investment at equity with the remaining equity interest after disposal also accounted for using
equity method, other comprehensive income previously under owners’ equity shall be accounted for in accordance with the
same accounting treatment for direct disposal of relevant asset or liability by investee on pro rata basis at the time of
disposal. The owners’ equity recognised for the movement of other owners’ equity (excluding net profit or loss, other
comprehensive income and profit distribution of investee) shall be transferred to profit or loss for the current period on pro
rata basis.
In respect of long-term equity investment at cost with the remaining equity interest after disposal is also accounted for at
cost, other comprehensive income recognised due to measurement at equity or recognition and measurement for financial
instruments prior to obtaining control over investee shall be accounted for in accordance with the same accounting treatment
for direct disposal of relevant asset or liability by investee and carried forward to current gains and losses on pro rata basis.
The movement of other owners’ equity (excluding net profit or loss, other comprehensive income and profit distribution of
investee) shall be transferred to profit or loss for the current period on pro rata basis.
In the event of loss of control over investee due to partial disposal of equity investment by the Group, in preparing separate
financial statements, the remaining equity interest which can apply common control or impose significant influence over the
investee after disposal shall be accounted for using equity method. Such remaining equity interest shall be treated as
accounting for using equity method since it is obtained and adjustment was made accordingly. For remaining equity interest
which cannot apply common control or impose significant influence over the investee after disposal, it shall be accounted
for using the recognition and measurement standard of financial instruments. The difference between its fair value and
carrying amount as at the date of losing control shall be included in profit or loss for the current period. In respect of other
comprehensive income recognised using equity method or the recognition and measurement standard of financial


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instruments before the Group obtained control over the investee, it shall be accounted for in accordance with the same
accounting treatment for direct disposal of relevant asset or liability by investee at the time when the control over investee is
lost. Movement of other owners’ equity (excluding net profit or loss, other comprehensive income and profit distribution
under net asset of investee accounted for and recognised using equity method) shall be transferred to profit or loss for the
current period at the time when the control over investee is lost. Of which, for the remaining equity interest after disposal
accounted for using equity method, other comprehensive income and other owners’ equity shall be transferred on pro rata
basis. For the remaining equity interest after disposal accounted for using the recognition and measurement standard of
financial instruments, other comprehensive income and other owners’ equity shall be fully transferred.
In the event of loss of common control or significant influence over investee due to partial disposal of equity investment by
the Group, the remaining equity interest after disposal shall be accounted for using the recognition and measurement
standard of financial instruments. The difference between its fair value and carrying amount as at the date of losing common
control or significant influence shall be included in profit or loss for the current period. In respect of other comprehensive
income recognised under previous equity investment using equity method, it shall be accounted for in accordance with the
same accounting treatment for direct disposal of relevant asset or liability by investee at the time when equity method was
ceased to be used. Movement of other owners’ equity (excluding net profit or loss, other comprehensive income and profit
distribution under net asset of investee accounted for and recognised using equity method) shall be transferred to profit or
loss for the current period at the time when equity method was ceased to be used.
The Group disposes its equity investment in subsidiary by a stage-up approach with several transactions until the control
over the subsidiary is lost. If the said transactions belong to ―transactions in a basket‖, each transaction shall be accounted
for as a single transaction of disposing equity investment of subsidiary and loss of control. The difference between the
disposal consideration for each transaction and the carrying amount of the corresponding long-term equity investment of
disposed equity interest before loss of control shall initially recognised as other comprehensive income, and subsequently
transferred to profit or loss arising from loss of control for the current period upon loss of control.
14. Investment real estate
Investment real estate is the real estate that held by the Company for purpose of obtaining rent or capital appreciation or
both purpose received. Investment real estate including rented land use right, land use right held ready for transfer after
appreciation and rented buildings etc.
The investment real estate shall be measured initially at the cost. The subsequent spending related to the investment real
estate, if it is very likely for the related economi interest to flow in and its cost can be reliably measured, shall be included in
the cost for the investment real estate. Other subsequent spending shall be included in the current profit or loss when
occurring.
The Company applies the cost model for subsequent measurement of investment real estate, and depreciates and amortizes it
as per the policy consistent to those for the houses and buildings and land use right.
For details about the methods for impairment testing of the investment real estate and for accrual of impairment provision,
see Notie IV 20 ―Impairment of long term assets‖.
Where property for own use or inventory transfers to investment property, or investment property transfers to property for
own use, carrying value before such transfer shall be taken as book value after such transfer.
In the event that an investment property is converted to an owner-occupied property, such property shall become fixed assets
or intangible assets since the date of its conversion. In the event that an owner-occupied property is converted to real estate
held to earn rentals or for capital appreciation, such fixed assets or intangible assets shall become an investment property
since the date of its conversion. Upon the conversion, investment property which is measured at cost is accounted for with
the carrying value prior to conversion, and investment property which is measured at fair value is accounted for with the fair
value as of the conversion date.
If an investment property is disposed of or if it withdraws permanently from use and no economic benefit will be obtained

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from the disposal, the recognition of it as an investment property shall be terminated. When an investment property is sold,
transferred, retired or damaged, the amount of proceeds on disposal of the property net of the carrying amount and related
tax and surcharges is recognised in profit or loss for the current period.
15. Fixed assets
(1) Recognition criteria of fixed assets

Fixed assets refer to the tangible assets held for the purpose of producing commodities, rendering services, renting or

business management with useful lives exceeding one fiscal year. Fixed assets are only recognised when the relevant

economic benefits are likely to inflow to the Company and their cost can be measured reliably. Fixed assets are initially

measured at cost taking into account predicted disposal expenses.

(2) Depreciation method of fixed assets

The initial measurement of a fixed assets shall be made at its cost and consider expected discard expenses factors

alternatives. Accrual depreciation of fixed assets shall be made based on straight-line depreciation within the service life

since the second month, when the fixed assets reached its expected condition for use. Service life, estimated net residual

value and annual depreciation rate for vary fixed assets are as:


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

House and buildings                                          35                          3                      2.77

Machinery equipment                                          12                          3                      8.08

Transportation equipment                                     7                           3                     13.86

Electronic equipment                                         7                           3                     13.86

Office and other equipment                                   7                           3                     13.86

Decoration charge for self-owned houses                      10                          0                     10.00

Estimated net residual value is the amount obtained from disposal of such fixed assets after estimated disposal expense
deducted, on assumption basis of the fixed assets has full estimated service life and in an anticipating condition of service
life terminated.
(3) Impairment test method and accrual of depreciation reserves for fixed asset
Impairment test method and accrual of depreciation reserves for fixed asset please found in ―20. Impairment of non-current
and non-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.



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The disposal income from disposal, transfer, dumping or damage of fixed assets less its carrying value and
related tax expenses shall be recorded in profits or losses of the period.
The Company, at least, re-reviews the use of life, projected net residual value and depreciation method of
fixed assets at the end of year. For any change of the above factor, it shall be dealt as change of accounting
estimation.
16. Construction-in-progress
Cost of construction-in-progress should recognized by the actual construction costs, including vary construction costs during
the period of construction, the capitalized borrowing costs prior to the expected conditions for use and other relevant
expenses etc. The construction-in-progress should carry forward as fixed assets after reached the expected conditions for
use.
Impairment test method and impairment provision method for the construction-in-progress found in ―20.impairment of
non-current/non-financial assets‖ in Note IV.

17. Borrowing costs
Borrowing costs include interest, amortization of discounts or premiums related to borrowings, ancillary costs incurred in
connection with the arrangement of borrowings, and exchange differences arising from foreign currency borrowings. For
borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, when
expenditures for the asset and borrowing costs are being incurred, activities relating to the acquisition, construction or
production of the asset that are necessary to prepare the asset for its intended use or sale have commenced, such borrowing
costs shall be capitalized as part of the cost of that asset; and capitalization shall discontinue when the qualifying asset is
ready for its intended use or sale. Other borrowing costs shall be recognized as expense in the period in which they are
incurred.
Where funds are borrowed for a specific purpose, the amount of interest to be capitalized shall be the actual interest expense
incurred on that borrowing for the period less any bank interest earned from depositing the borrowed funds before being
used into banks or any investment income on the temporary investment of those funds. Where funds are borrowed for
general purpose, the Group shall determine the amount of interest to be capitalized on such borrowings by applying a
capitalization rate to the weighted average of the excess amounts of cumulative expenditures on the asset over and above the
amounts of specific-purpose borrowings. The capitalization rate shall be the weighted average of the interest rates applicable
to the general-purpose borrowings.
During the capitalization period, exchange differences related to the principal and interest on a specific purpose borrowing
denominated in foreign currency shall be capitalized as part of the cost of the qualifying asset. Exchange differences related
to general-purpose borrowings denominated in foreign currency shall be included in profit or loss for the current period.
Qualifying assets are assets (fixed assets, investment property, inventories, etc) that necessarily take a substantial period of
time for acquisition, construction or production to get ready for their intended use or sale.
Capitalization of borrowing costs shall be suspended during periods in which the acquisition, construction or production of a
qualifying asset is interrupted abnormally, when the interruption is for a continuous period of more than 3 months, until the
acquisition, construction or production of the qualifying asset is resumed.
18. Intangible assets
(1) Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by the Group.
An intangible asset shall be initially measured at cost. The expenditures incurred on an intangible asset shall be recognized
as cost of the intangible asset only if it is probable that economic benefits associated with the asset will flow to the Group
and the cost of the asset can be measured reliably. Other expenditures on an item asset shall be charged to profit or loss
when incurred.


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Land use right acquired shall normally be recognized as an intangible asset. Self-constructed buildings (e.g. plants), related
land use right and the buildings shall be separately accounted for as an intangible asset and fixed asset. For buildings and
structures purchased, the purchase consideration shall be allocated among the land use right and the buildings on a
reasonable basis. In case there is difficulty in making a reasonable allocation, the consideration shall be recognized in full as
fixed assets.
An intangible asset with a finite useful life shall be stated at cost less estimated net residual value and any accumulated
impairment loss provision and amortised using the straight-line method over its useful life when the asset is available for use.
Intangible assets with indefinite life are not amortised.
      The Group shall review the useful life of intangible asset with an infinite useful life and the amortization method
applied at period-end. A change in the useful life or amortization method used shall be accounted for as a change in
accounting estimate. For an intangible asset with an indefinite useful life, the Group shall review the useful life of the asset.
If there is evidence indicating that the period during which the intangible assets brings in economic benefits to the Group
can be predicted, the Group shall estimate the useful life of that asset and make amortization under the amortization policies
applicable to intangible assets with finite useful life.
(2) Research and development expenditures
Research and development expenditure of the Group was divided into expenses incurred during the research phase and
expenses incurred during the development phase.
Expenses incurred during the research phase are recognised as profit or loss in the current period.
Expenses incurred during the development phase that satisfy the following conditions are recognised as intangible assets,
while those that do not satisfy the following conditions are accounted for in the profit or loss for the current period:
①it is technically feasible that the intangible asset can be used or sold upon completion;
②there is intention to complete the intangible asset for use or sale;

③the intangible asset can produce economic benefits, including there is evidence that the products produced using the
intangible asset has a market or the intangible asset itself has a market; if the intangible asset is for internal use, there is
evidence that there exists usage for the intangible asset;
④there is sufficient support in terms of technology, financial resources and other resources in order to complete the
development of the intangible asset, and there is capability to use or sell the intangible asset;
⑤the expenses attributable to the development phase of the intangible asset can be measured reliably.

If the expenses incurred during the research phase and the development phase cannot be distinguished separately, all
development expenses incurred are accounted for in the profit or loss for the current period.

(3) Intangible assets impairment test method and their impairment provision
The method for impairment test and impairment provision of intangible assets is detailed in Note IV. 20
―Impairment of non-current non-monetary financial asset‖.
19. Long-term prepaid expenses
Long-term prepaid expenses refer to the general expenses that occurred but shall be amortized over one year in reporting
period and later period. Long-term prepaid expenses shall amortized by straight-line method in expected benefit period.

20. Long-term impairment
The Group will judge if there is any indication of impairment as at the balance sheet date in respect
of long-term investments 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,



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recoverable amount shall be estimated for impairment test. Goodwill, intangible assets with an indefinite
useful life and intangible assets beyond working conditions will be tested for impairment annually,
regardless of whether there is any indication of impairment.
If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, the impairment
provision will be made according to the difference and recognized as an impairment loss. The recoverable amount of an
asset is the higher of its fair value less costs of disposal and the present value of the future cash flows expected to be derived
from the asset. 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.
For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financial statements shall
be allocated to the asset groups or group of assets benefiting from synergy of business combination. If the recoverable
amount is less than the carrying amount, the Group shall recognise an impairment loss. The amount of impairment loss shall
first reduce the carrying amount of any goodwill allocated to the asset group or set of asset groups, and then reduce the
carrying amount of other assets (other than goodwill) within the asset group or set of asset groups, pro rata on the basis of
the carrying amount of each asset.
An impairment loss recognized on the aforesaid assets shall not be reversed in a subsequent period in respect of the
restorable value.
21. Staff remuneration
Staff remuneration includes short term staff remuneration, post office benefit, dismissal benefit, among which:
Short term staff remuneration mainly consists of salary, bonus, allowance and subsidy, staff benefits, medical insurance,
maternity insurance, work related injury insurance, housing funds, labor unit fee and education fee, non-monetary benefits,
etc. short term staff remuneration actually happened during the accounting period in which staff provides services to the
Company is recognised as liability, and shall be included in current gains and losses or relevant asset cost. Non-monetary
benefits are measured at fair value.
Post office benefits mainly consist of defined withdraw plan and defined benefit plan. Defined withdraw plan mainly
includes basic pension insurance, unemployment insurance and annuity, and the contribution payable is included in relevant
asset cost or current gains and losses when occurs. Our defined benefit plan mainly relates to retirement benefits. The
Company engaged independent actuary to make estimation on demographic variables and financial variables under
predicted accumulative benefits unit method with unbiased and consistent actuary assumption, measure liabilities arising
from defined benefit plan and determine vesting periods of various liabilities. On balance sheet date, the Company presented
liabilities arising from defined benefit plan at present value, and recorded service costs as profit or loss for the period.
When the Company terminates the employment relationship with employees before the end of the employment contracts or
provides compensation as an offer to encourage employees to accept voluntary redundancy, the Company shall recognise
employee compensation liabilities arising from compensation for staff dismissal and included in profit or loss for the current
period, when the Company cannot revoke unilaterally compensation for dismissal due to the cancellation of labour
relationship plans and employee redundant proposals; and the Company recognise cost and expenses related to payment of
compensation for dismissal and restructuring, whichever is earlier. However, if the compensation for termination of


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employment is not expected to be fully paid within 12 months from the reporting period, it shall be accounted for other
long-term staff remuneration.
Employee internal retirement plans is to use the same principle to deal with termination benefits. The group will pay staff
salary, social insurance and others from the date they stop providing service to their retire-day. This amount shall be
included in the current profits and losses (termination benefits), only when it meets the projected liabilities confirmation
conditions.

For other long-term employee benefits provided by the Company to its employees, if satisfy with the established withdraw

plan, then the benefits are accounted for under the established withdraw plan, otherwise accounted for under defined benefit

scheme.
22. Accrual liability
The obligation pertinent to contingencies shall be recognized as accrual liability when the following conditions are satisfied
simultaneously: (1) That obligation is a current obligation of the Group; (2) It is likely to cause any economic benefit to flow
out of the enterprise as a result of performance of the obligation; and (3) The amount of the obligation can be measured in a
reliable way.
At the balance sheet date, considering matters related to risks, uncertainties and time value of money and other factors, the
expected liabilities are measured in accordance with the best estimate of the necessary expenses for the performance of the
current obligation.
If the expenditure required paying all or part of the expected liabilities was compensated by the third party, and the amount
of compensation basically can be sure when received, it could be recognized as a separate asset. But the amount of
compensation confirmed couldn’t be more than the book value of the estimated debts.
23. Income
(1) Income of commodities sales
When the transfer of significant risks and rewards of ownership of the goods to the buyer is done, when the right of
management usually associated with ownership is not reserved, when 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.
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


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According to the relevant contract or agreement, revenue is recognized in accordance with the accrual basis.
(4) Interest income
Interest income is confirmed in accordance with time and actual interest others make use of the monetary capital of the
group
24. Government subsidy

A government subsidy means the monetary or non-monetary assets obtained free by the Group from the government, but

excluding the capital invested by the government as the owner of the enterprise. Government subsidies consist of the

government subsidies pertinent to assets and government subsidies pertinent to income. Government grant obtained by the

Company for the purpose of constructing or otherwise forming long term assets is recognised as government grant related to

assets, and other government grants are recognised as those related to income. If government document fails to identify

specific grantee, government grants will be categorized into government grants related to income or assets respectively

under the below method: (1) in case government document indicates the specific project applicable to the grant, such

categorization shall be made based on the respective proportion of expenditures to form assets or be recorded as expenses in

budget for the specific project. The allocation proportion will be reviewed on each balance sheet date, and is subject to

necessary alteration; (2) in case government document only indicate general purpose of such grant instead of specific project,

the grant shall be viewed as government grant related to income.
The government subsidy with monetary assets concerned should be measured by the actual received or receivable amount
while non-monetary assets government subsidy measured by fair value; if without realizable fair value obtained, measured
by nominal amount instead. The government subsidy with nominal amount measured should reckon into current gains and
losses.
Government grants are generally recognised when received and measured at the amount actually received, but are measured
at the amount likely to be received when there is conclusive evidence at the end of the accounting period that the Group will
meet related requirements of such grants and will be able to receive the grants. The government grants so measured should
also satisfy the following conditions: (1) the amount of the grants be confirmed with competent authorities in written form
or reasonably deduced from related requirements under financial fund management measures officially released without
material
uncertainties; (2) the grants be given based on financial support projects and fund management policies officially published
and voluntarily disclosed by local financial authorities in accordance with the requirements under disclosure of government
information, where such policies should be open to any company satisfying conditions required and not specifically for
certain companies; (3) the date of payment be specified in related documents and the payment thereof be covered by
corresponding budget to ensure such grants will be paid on time as specified; and (4)other relevant conditions which shall be
met based on the specific situations of the Company and the subject matter.
Asset-related government subsidies are recognized as deferred income and accounted into the current gains/losses equally
within service life for the relevant assets. The government subsidies pertinent to incomes, which are used for compensating
the related future expenses or losses of the enterprise shall be recognized as deferred income and should reckoned into
current gains/losses in period of when relevant expenses are recognized; if used for compensating the occurred relevant
expenses and losses, reckoned into current gains/losses directly.
As for the recognized government subsidy needs to return, if there has relevant balance of deferred incomes, relevant book
balance of the deferred income should be written down, and the exceeded part should included in the current gains/losses; if
there has no relevant balance of deferred incomes, reckoned into current gains/losses directly.
25. Deferred income tax assets and deferred income tax liabilities

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(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.
(3) The income tax expenses
The income tax expense included the current income tax and deferred income tax.
In addition to trades and current income tax and deferred income tax related to projects which are included in other
comprehensive income or directly included 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.
(4) Offset of income tax
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realise the assets and
settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented on a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets and deferred
tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different


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taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realise the assets and
liabilities simultaneously, in each future period in which significant amounts of deferred tax assets or liabilities are expected
to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on a net basis.
26. Leasing
Finance lease transfers substantially all the risks and rewards related to the ownership of an asset. Its ownership may
eventually transfer, also may not. While all the other leases are classified as operating leases.
(1) The Company keeps record of lease business as lessee
Rental expense of operating lease is included in the relevant asset costs or current profits and losses through the straight-line
method during every period. Initial direct costs shall be included in profit or loss for the current period. Or rent to the actual
shall be included in the current profits and losses.
(2) The Company keeps record of lease business as lessor
Rental income of operating lease is included in the relevant asset costs or current profits and losses through the straight-line
method during every period. The larger amount of initial direct costs shall be capitalized when it is created, and shall be
included in the current profits and losses during the lease period in accordance with same basic as the confirmed amount by
stages. The other small amount of initial direct costs shall be included in the current profits and losses when it’s created. Or
rent to the actual shall be included in the current profits and losses.
(3) Financing lease business with the Group recorded as lessee
On the beginning date of the lease, the entry value of leased asset shall be at the lower of the fair value of the leased asset
and the present value of minimum lease payment at the beginning date of the lease. Minimum lease payment shall be the
entry value of long-term accounts payable, with difference recognised as unrecognised financing expenses. In addition,
initial direct costs attributable to leased items incurred during the process of lease negotiation and signing of lease
agreement shall be included in the value of leased assets. The balance of minimum lease payment after deducting
unrecognised financing expenses shall be accounted for long-term liability and long-term liability due within one year.
Unrecognised financing expenses shall be recognised as financing expenses for the current period using effective interest
method during the leasing period. Contingent rent shall be included in profit or loss for the current period at the time it
incurred.
(4) Financing lease business with the Group recorded as lessor
On the beginning date of the lease, the entry value of lease receivable shall be the aggregate of minimum lease receivable
and initial direct costs at the beginning date of the lease. The unsecured balance shall be recorded. The aggregate of
minimum lease receivable, initial direct costs and unsecured balance and the different between their present value shall be
recognised as unrealised financing income. The balance of lease receivable after deducting unrecognised financing income
shall be accounted for long-term debt and long-term debt due within one year.
Unrecognised financing income shall be recognised as financing income for the current period using effective interest
method during the leasing period. Contingent rent shall be included in profit or loss for the current period at the time it
incurred.
27. Other significant accounting policies and accounting estimation
(1) Discontinued operation
Discontinued operation refers to the operation disposed or classified as held-for-sale by the Company and presented
separately under operation segments and financial statements, which has fulfilled one of the following criteria: ① it
represents an independent key operation or key operating region; ② it is part of the proposed disposal plan on an
independent key operation or proposed disposal in key operating region; or ③ it only establishes for acquisition of
subsidiary through disposal.
Accounting for discontinued operation is set out in note IV 12 ―classified as assets held for sale‖.

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(2) Repurchase of shares
Share repurchase consideration paid and transaction costs to reduce the owner’s equity, repurchase, transfer or cancellation
of Chenming Paper’s shares, the gains or losses are not recognised.
In respect of transfer of treasury shares, the difference between the actual amount received and the carrying amount of
treasury shares shall be included in capital reserve. When insufficient to dilute, capital reserve will be offset against the
surplus reserve and retained profits. Treasury shares are cancelled at par value and by the number of shares cancelled to
reduce the share capital. The difference between the book balance and the nominal value of the treasury shares shall be
offset against the capital reserve. When insufficient to dilute, capital reserve will be offset against the surplus reserve and
retained profits.
(3) Assets securitization
Partial assets (―trust properties‖) of the Company are securitized. Relevant assets are operated by special purpose vehicles
on trust. The special purpose vehicles issue superior assets supporting securities to investors and the Company holds
subordinated assets supporting securities. The subordinated ones are not allowed to transfer prior to completion of
repayment of principal and interest of superior ones. As assets service provider, the Company provides assets maintenance
and normal management, determination of annual assets disposal plan, preparation and implementation of assets disposal
plan, execution of relevant assets disposal agreement and regular preparation of assets service report. In addition, as
liquidity supporting institution, the Company shall provide liquidity support where principal of superior assets supporting
securities aren’t paid in full, to make up shortage of interest or principal. Trust properties, after being applied to pay trust
taxes and associate expenses, are preferentially used to repay the principal and interests of superior assets supporting
securities, and the remaining trust properties after full settlement of such principal and interests are recorded as income of
subordinated assets supporting securities and vested by the Company. The Company actually keeps nearly all the risks and
rewards of trust properties, thus it doesn’t derecognize trust properties. Besides, the Company owns effective control over
special purpose vehicle which is included in consolidated financial statements.
When applying accounting policies in relation to securitization of financial assets, the Company has considered the risks and
rewards of assets transferred to other entity as well as the level of control that the Company can exercise in respect of such
entity:
- In case that the Company has transferred nearly all the risks and rewards of ownership of financial assets, the Company
 derecognizes such financial assets;
- In case that the Company keeps nearly all the risks and rewards of ownership of financial assets, the Company continues to
 recognize such financial assets;
- In case that the Company doesn’t transfer or keep nearly all the risks and rewards of ownership of financial assets, the
 Company considers whether it owns control over such financial assets. If the Company maintains no control, it will
 derecognize such assets, and recognize the rights and liabilities occurred or kept during transfer as assets or liabilities
 respectively. If the Company maintains control, it will recognize such financial assets based on the continuous involvement
 level in respect of such assets.
28. Changes of major accounting policies and accounting estimation
(1) Changes of accounting policy
No accounting policy changed in reporting period.
(2) Changes of accounting estimate
No accounting estimate changed in reporting period.
29. Major accounting judgment and estimate
The Company need make judgment, estimation and hypothesis to book value of those unaccountable items in sheet due to
inner uncertainties of operating activities in the process of using accounting policies. These judgments, estimates and


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assumptions are made in line with the Company's past management experience, and in consideration of other relevant
factors. These judgments, estimates and assumptions will affect disclosure of amount of income, expenses, assets and
liabilities as well as contingent liability on the balance sheet day. However, the uncertainties in these estimates may cause
significant adjustments to book value of those asset or liability affected in the future.
The Company rechecks regularly the judgment, estimation and hypothesis based on sustainable management. As for a
change affecting only the current period, the amount shall be confirmed only in the current period; for those not only
affecting the current but the future, the amount shall be confirmed in the current and future period.
At the balance sheet date, the Company needs to determine amount of items of the financial statements, estimation and
hypothesis shown as the following important areas:
(1) Provision for bad debts
The Company accounts for the allowance for bad debt losses according to the receivable accounting policies. Accounts
receivable is the valuation of accounts receivable can be recovered based on. Identification of devaluation of accounts
receivable needs judgments and estimates of management level. Difference between actual results and the original estimates
impact reversal of the book value accounts receivable and accounts receivable for provision for bad debts during the
estimation was changing.
(2) Provision of inventory devaluation
According to the inventory accounting policies, the Company shall accrue inventory devaluation provision as for inventory
whose cost is higher than net realizable and those obsolete or unmarketable in accordance with the lower one in cost and net
realizable value. Write-down of inventories to net realizable value is to assess the salability and net amount of prospect
realization. Identification of inventory impairment 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) Financial assets available for sale

In respect of impairment of available-for-sale financial assets, whether impairment loss shall be recognised in income

statement significantly depends on the judgments and assumptions of the management. While making judgments and

assumptions, the Company shall assess the excess of cost of the investee’s identifiable net assets attributable to the

investment over fair value and the duration, and financial condition and short term business outlook of the investee,

including industry situation, technical reform, credit rating, default rate and risks from counterparties.

(4) Long-term provision for asset impairment

The Company has checked if there is any sign that the long-term asset except for the financial assets may have the

impairment at the balance sheet date. For the intangible assets with uncertain service life, in addition to the annual

impairment test, make the impairment test when it has signs of impairment. Proceed with the impairment test when there is

any sign indicates that the book amounts of other long-term assets except for the financial assets are uncollectible

When the book value of the asset or group of assets exceeds its recoverable amount, i.e. the higher one between the net

amount after subtracting the disposal costs from the fair value and the present value of the future cash flow, it indicates

impairment occurs.

The net amount after subtracting the disposal costs from the fair value is determined by subtracting the incremental costs


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directly attributable to this disposal of assets from the sales agreement price similar to assets in fair dealing or the observable

market price.

When predicting the present value of future cash flows, it is required to make significant judgments to the output, selling

price and related operating expenses of this asset or group of assets and the discount rate used for calculating the present

value. The Company shall adopt all available related data when predicting the recoverable amounts, including making

predictions about the relevant output, selling price and related operating expenses based on reasonable and supportable

assumptions.


(5) Depreciation and amortization
For the investment real estate, fixed assets and intangible assets, the Company takes a straight-line depreciation and
amortization within service life in consideration of its residual value. The Company regularly review service life, thus
determine the depreciation and amortization amount in each reporting period. Life is determined based on past experience of
similar assets and technology update is expected. If the previous estimate changes, we will adjust depreciation and
amortization expense in future periods.
(6) The deferred income tax assets
Within the limits that it is very likely to have sufficient taxable profits to offset losses, the Company confirms deferred
income tax assets using all unused tax losses. This requires the management to use a lot of judgment to estimate the time and
amount of future taxable profits, combined with the tax planning strategy, thus confirm the amount of deferred income tax
assets.
(7) The income tax
During ordinary course of business, uncertainty exists in final tax treatment and calculation of a part of trading. Whether
part of the project is in pre tax expenses requires approval of tax authorities. If the final confirmation of these tax matters
differs from an initial estimate, the difference will affect current income tax and deferred income tax during the final period.
(8) Accrual liabilities
The Company estimates and accrues corresponding provision for product quality guarantee, expected contract loss, penalty
for late delivery and others in accordance with terms of the contract, existing knowledge and experience. When such
contingencies has formed a present obligation, and the performance of the current obligation is likely to lead to the outflow
of economic benefits of the Company, the Company recognizes the best estimate of required expense when performing
current obligation as accrual liability. The recognition and measurement of debt is largely dependent on the judgment of
management. In the process of judgment the Company needs to assess the contingent risks, uncertainties and money and the
time value and other factors.



VII. Taxation
1. Main tax and tax rate

                  Type                                                             Tax rate

                                            The output tax of taxable income is calculated by the tax rate of 17% , 6%, or
VAT
                                            11%, the added-value tax is calculated and paid according to the balance after




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                 Type                                                             Tax rate

                                            deducting the input VAT allowed to be deducted in current period, immovable

                                            property leasing is levied taxes by 5% (immovable property achieved before

                                            April 30, 2016).


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

Since May 1, 2016, the pilot scheme scope of changing the business tax to added-value tax has extended to construction
industry, real estate, financial industry, living service industry, etc., the Company and its subsidiaries’ immovable property
leasing, property management and service business all fall within the scope of the pilot.
* Note: The Company and subsidiaries exercise rate of 25% in 2016, except Shenzhen New Yongtong Dongxiao Vehicle
Inspection Co., Ltd., which has taxed on levy rate.



VIII. Enterprise consolidation and consolidated financial statements
Unless otherwise stated, the follow notes (including the items of financial statement of the Company), year-begin refers to

1st January 2016 while period-end refers to 30th June 2016.
1. Monetary fund

                  Item                                     Closing balance                          Balance at year-begin

Stock cash                                                                    91,387.70                                  75,003.23

Bank deposits:                                                           190,890,205.36                             159,109,707.70

Other monetary capital

                 Total                                                   190,981,593.06                             159,184,710.93
2. Accounts receivable
(1) Accounts receivable by category


                                                                              Closing balance

                 Types                                Book balance                   Bad debt reserve
                                                                                                                      Book value
                                               Amount          Ratio (%)        Amount          Accrual ratio (%)

Account      receivable     with   single
                                             22,512,414.52            44.62   22,512,414.52                100.00
significant amount and withdrawal bad


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                                                                               Closing balance

                    Types                           Book balance                       Bad debt reserve
                                                                                                                        Book value
                                                Amount         Ratio (%)         Amount          Accrual ratio (%)

debt provision separately

Receivables with bad debt provision
                                                1,664,778.74          3.30                                            1,664,778.74
accrual by credit portfolio

Accounts with single significant amount

and    bad     debts   provision     accrued   26,282,070.64         52.08      26,282,070.64                100.00

individually

                    Total                      50,459,263.90        100.00      48,794,485.16                96.70% 1,664,778.74

       (Cont.)

                                                                             Balance at year-begin

                    Types
                                                    Book balance                       Bad debt reserve
                                                                                                                        Book value
                                                Amount         Ratio (%)         Amount          Accrual ratio (%)

Account        receivable     with    single

significant amount and withdrawal bad          22,512,414.52         45.61      22,512,414.52                100.00

debt provision separately

Receivables with bad debt provision
                                                 562,051.31           1.14                                               562,051.31
accrual by credit portfolio

Accounts with single significant amount

and    bad     debts   provision     accrued   26,282,070.64         53.25      26,282,070.64                100.00

individually

                    Total                      49,356,536.47        100.00      48,794,485.16                 98.86      562,051.31

①Account receivable with single significant amount and withdrawal bad debt provision separately at period end

                                                                               Closing balance

       Account receivable(units)                Account                            Accrual
                                                                 Bad debt
                                                                                                              Reasons
                                               receivable                            ratio
                                                                   reserve

Shenzhen Jinlu Industry and Trade Co.,          9,846,607.00    9,846,607.00           100.00 Has      greater     uncertainty   in
Ltd.                                                                                            collection

Guangdong Zhanjiang Sanxing Auto                4,060,329.44    4,060,329.44           100.00 Not expected to collected due to
Service Co., Ltd.                                                                               long account age



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Wang Changlong                                2,380,760.40       2,380,760.40      100.00 Not expected to collected due to
                                                                                            long account age

Huizhou         Jiandacheng        Daoqiao    2,021,657.70       2,021,657.70      100.00
                                                                                            Unlikely to collected
Engineering Company

Guangdong Materials Group Corp.               1,862,000.00       1,862,000.00      100.00 Not expected to collected due to
                                                                                            long account age

Jiangling Automobile Factory                  1,191,059.98       1,191,059.98      100.00 Not expected to collected due to
                                                                                            long account age

Yangjiang Auto Trade Co., Ltd.                1,150,000.00       1,150,000.00      100.00 Not expected to collected due to

                                                                                            long account age

                   Total                     22,512,414.52     22,512,414.52       100.00                                    —

②Account receivable provided for bad debt reserve under aging analysis method in the groups

                                                                         Closing balance
                Age
                                        Account receivable              Bad debt reserve               Accrual ratio (%)

Within 1 year                                    1,664,778.74

                Total                            1,664,778.74

(2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 0 Yuan; the amount collected or switches back amounting to 0 Yuan.
(3) Top 5 receivables at ending balance by arrears party

                                                                                                                    Proportion

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

                                                                                                                       (%)

Shenzhen Jinlu Industry and Trade Co., Ltd.                  Non-related party    9,846,607.00     Over 3 years           19.51

Guangdong Zhanjiang Sanxing Auto Service Co., Ltd.           Non-related party    4,060,329.44     Over 3 years            8.05

Wang Changlong                                               Non-related party    2,380,760.40     Over 3 years            4.72

Huizhou Jiandacheng Daoqiao Engineering Company              Non-related party    2,021,657.70     Over 3 years            4.01

Guangdong Materials Group Corp.                              Non-related party    1,862,000.00     Over 3 years            3.69

                           Total                                                 20,171,354.54                            39.98

(4) Account receivable derecognition due to financial assets transfer
The Company has no account receivable derecognition due to financial assets transfer in the Period.
(5) Assets and liabilities resulted by account receivable transfer and continues involvement

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The Company has no assets and liabilities resulted by account receivable transfer and continues involvement in the Period.
3. Advance payment
(1) Advance payment by age


                                          Closing balance                                     Balance at year-begin
        Age
                                 Amount                     Ratio (%)                     Amount                     Ratio (%)

Within one year                        7,176,292.31                      93.64                5,751,990.04                       89.11

1-2 years                                466,973.32                        6.09                   126,950.00                      1.97

2-3 years                                 10,290.00                        0.14                   565,865.42                      8.77

Over 3 years                                9,963.94                       0.13                      9,963.94                     0.15

        Total                          7,663,519.57                     100.00                6,454,769.40                    100.00

(2) Top 5 advance payment at ending balance by prepayment object
Total year-end balance of top five advance payment by prepayment object amounting to                 7,457,400.99 Yuan, takes 97.31
percent of the total advance payment at year-end.

4. Interest receivable

(1) Interest receivable by category

                  Age                                    Closing balance                             Balance at year-begin

Structured deposit                                                                                                        348,833.33

                  Total                                                                                                   348,833.33
5. Other accounts receivable
(1) Other accounts receivable by category


                                                                                  Closing balance

                 Category                              Book balance                      Bad debt reserve
                                                                                                                         Book value
                                                 Amount         Ratio (%)           Amount          Accrual ratio (%)

Other account receivable with single

significant amount and withdrawal bad          39,180,176.91            60.50     39,180,176.91                 100.00

debt provision separately

Other     receivables     with   bad    debt                                                                             11,395,983.8
                                               14,941,140.26            23.07      3,545,156.39                  23.73
provision accrual by credit portfolio                                                                                                 7

Other accounts with single significant

amount and bad debts provision accrued         10,643,328.95            16.43     10,643,328.95                 100.00

individually




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                                                                               Closing balance

                 Category                           Book balance                        Bad debt reserve
                                                                                                                       Book value
                                                Amount         Ratio (%)         Amount           Accrual ratio (%)

                                                                                                                       11,395,983.8