SHENZHEN TELLUS HOLDING CO., LTD

Transcription

1 SHENZHEN TELLUS HOLDING CO., LTD SEMI-ANNUAL REPORT 2014 August

2 Section I. Important Notice, Contents and Paraphrase Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of Shenzhen Tellus Holding Co., Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents. All directors are attended the Board Meeting for report deliberation. The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either. Lv Hang, principal of the Company, Luo Bojun, person in charger of accounting works,cfo FuBin and Ke Wensheng, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of Semi-Annual Report 2014 is authentic, accurate and complete. Concerning the future planning involved in the Report, they do not constitute a substantial commitment for investors. Investors are advised to exercise caution of investment risks. 2

3 Content Semi-Annual Report 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 Section VI Changes in shares and particular about shareholders Section VII Preferred Stock. 29 Section VIII Directors, Supervisors and Senior Executives Section IX Financial Report Section X Documents Available for Reference

4 Paraphrase Items Refers to Definition CSRC Refers to China Securities Regulatory Commission SZ Exchange Refers to Shenzhen Stock Exchange Shenzhen Branch of SD&C Company, the Company, our Company, Tellus Group Refers to Refers to Shenzhen Branch of China Securities Depository & Clearing Corporation Limited Shenzhen Tellus Holding Co., Ltd. Reporting period, Current Period, the Year Refers to 1 January 2014 to 30 June 2014 SDG Refers to Shenzhen SDG Co., Ltd. Auto Industrial and Trading Company Refers to Shenzhen Auto Industry and Trade Corporation 4

5 Section II Company profile I. Company Profile Short form for share Tellus-A, Tellus-B Code for share , 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 Company(if applicable) English name of the Company(if applicable) Legal Representative 深特力 ShenZhen Tellus Holding Co.,Ltd Lv Hang II. Contact person and ways Name Contact adds. Secretary of the Board Lv Hang (function in an acting capacity of Secretary of the Board) 15/F, Zhonghe Building, Shennan Middle Road, Futian District, Shenzhen Rep. of securities affairs Sun Bolun 15/F, Zhonghe Building, Shennan Middle Road, Futian District, Shenzhen Tel. (0755) (0755) Fax. (0755) (0755) ir@tellus.cn s @163.com III. Others 1. Way of contact Whether registrations address, offices address and codes as well as website and of the Company changed in reporting period or not Applicable Not applicable Registrations address, offices address and codes as well as website and of the Company has no change in reporting period, found more details in Annual Report 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 5

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

7 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 Current period Same period of last year Increase/decrease in this report y-o-y (%) Operating revenue (RMB) 228,692, ,087, % Net profit attributable to shareholders of the listed company(rmb) 5,380, ,746, % Net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses(rmb) Net cash flow arising from operating activities(rmb) 5,215, ,413, ,185, ,298, % Basic earnings per share (RMB/Share) % Diluted earnings per share (RMB/Share) % Weighted average ROE (%) 2.77% 2.01% 0.76% Increase/decrease in this End of current period End of last period report-end over that of last period-end (%) Total assets (RMB) 741,757, ,998, % Net assets attributable to shareholder of listed company(rmb) 196,666, ,351, % 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 7

8 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 write-off that accrued for impairment of assets) Other non-operating income and expenditure except for the aforementioned items 172, , Impact on minority shareholders equity (post-tax) 57, Total 165, 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 8

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

10 y-o-y Net cash flow arising from investment activities -70,203, ,944, More costs paid for construction of Shuibei Jewelry Building and received cash from % disposal of investment real estate at same period of last year, and no such item occurred in the Period Net cash flow arising from financing activities 67,083, ,147, Borrowings from parent company and the Bank increased in the Period Net increase of cash and cash equivalent -7,304, ,093, Amount paid for auto purchased from subsidiary Huari TOYOTA increased % y-o-y and more costs paid for construction of Shuibei Jewelry Building in the Period Inventory 43,766, ,826, Inventory decreased due to the sales expansion % from subsidiary Huari TOYOTA Other current assets 85,849, ,642, Auto sales deduct the % input tax from subsidiary Huari TOYOTA More costs for project of Construction in process 52,873, , % Shuibei Jewelry Building Land value of Shuibei Intangible assets 52,964, , ,166.39% Jewelry Building transferred-in Other non-current assets ,339, The 50% land value of Shuibei Jewelry Building % paid originally transferred-in as intangible assets Short-term loans 182,741, ,969, % Bank loans increased Bank acceptance paid by Note payable 6,225, ,920, % subsidiary Huari 10

11 TOYOTA Accounts receivable in advance Automobile Sales of 2,228, ,087, % Huari TOYOTA Enterprise income taxes Taxes payable 9,175, ,687, % paid Loss from asset devaluation Bad debt provision 35, , % decrease Investment earnings 7,841, ,780, Associates enterprise-- Shenzhen Zung Fu Tellus % Auto Service Co., Ltd gains more profit in the Period Non-operating expenditure Subtotal of cash in-flow arising from investment activities Subtotal of cash out-flow arising from investment activities Subtotal of cash in-flow arising from financing activities Subtotal of cash out-flow arising from financing activities 2, , There was losses from disposal of fixed assets % over a year earlier, and no such item occurred in the Period There was cash received over a year earlier from 40, ,414, disposal of investment % real estate, and no such item occurred in the Period Engineering funds paid 70,244, ,470, % for Shuibei Jewelry Building increased Borrowings from parent 226,000, ,600, % company and the Bank increased in the Period The loans due for 158,916, ,747, repayment to parent % company and the Bank increased in the Period Major changes on profit composition or profit resources in reporting period Applicable Not applicable No major changes on profit composition or profit resources occurred in reporting period The future development and planning extended to reporting period that published in disclosure documents as prospectus, private placing memorandum and recapitalize statement Applicable Not applicable No future development and planning extended to reporting period that published in disclosure documents as prospectus, private placing memorandum and recapitalize statement 11

12 Review on the previous business plan and its progress during reporting period There is no situation of failing to reach the planned goals III. Constitution of main business According to industries Operating revenue Operating cost Gross profit ratio Increase or decrease of operating revenue over same period of last year Increase or decrease of operating cost over same period of last year In RMB Increase or decrease of gross profit ratio over same period of last year Auto sales 159,587, ,270, % 13.49% 11.59% 1.66% Auto inspection and maintenance and accessories sales 22,878, ,282, % % -7.77% -3.14% Rental service and 43,155, ,048, % -3.80% % 3.20% According to products Auto sales 159,587, ,270, % 13.49% 11.59% 1.66% Auto inspection and maintenance and accessories sales Rental and service 22,878, ,282, % % -7.77% -3.14% 43,155, ,048, % -3.80% % 3.20% According to region Shenzhen 225,621, ,600, % 6.78% 6.82% -0.03% IV. Core competitive-ness analysis Core competitive-ness of the Company has no major changes in the Period. Main business of the Company mainly divided into two parts, the auto sales & aftermarket service and property rental & service. Core competitive-ness of the Company has no major changes in the Period. Main business of the Company mainly divided into two parts, the auto sales & aftermarket service and property rental & service. Auto sales & aftermarket service of the Company adopt business model of 4S store, comprehensive major maintenance, authorize maintenance, special maintenance and auto inspections. As profit standards in auto industry declined integradlly and soaring costs of raw maateirals and labors, the marketplace will become increasingly crowded. The Company will intergrate resources, active assets in full and reduce costs to step out the 12

13 enterprises and business gradually, who owes un-sustainable earnings and bad future perspective; overcome negative factors in automobile consumption market to achieve the operation goals with great efforts. In aspect of property rental & service, the Company owes a certain property management experience and has higher property management qualification ; most of the property rental and management are self-owned property, which has a lower cost and a stable income. The property of the Company in Shuibei area locates in a jewelry collection and distribution center, property around Shuibei area is in the process of upgrading and transformation recently with less property available, and the rental standards and price will be improved. With standard of market demand and targets of maximum benefit, the Company adopting various operation measures and innovative operation principle, implementing unified market planning via integration of existing property resources; promote overall image and level for the property availabe for lease, create a speciazlized and branded corporate image. Actively bringing in substantial stable clients, increase the ares for lease, improve rent standards and raise income of the property lease in order to achieved the maximization of property value. With the stable promotion of Tellus-Gem Golden Jewelry Industrial Park, the Company will promote targeted constructions of the Company with all-out efforts, guarantee the projects completed and put into operation on schedule, and increase areas of the Company s property (Shuibei Area in particular) for lease greatly, quality and grade ascended rapidly and the upgrading of property leasing business achieved. The Company will seize policy opportunity, taking full advantage of the development advantage of core base for Shenzhen golden jewelry industry, and making ues of the double roles of main owner in Shuibei area and majority investor of industrial project, play a leading part in project of industrial park. Actively to lead the coordination of vary body, promote the scientific planning and quality of Shuibei Jewerly Industry, to enhance the company's asset quality and profitability V. Investment analysis 1. Equity investment outside (1) Investment outside Applicable Not applicable The Company has no investment outside in the Period (2) Holding equity of financial enterprise Applicable Not applicable The Company has no equity of financial enterprise held in the Period (3) Securities investment Applicable Not applicable The Company has no securities investment in the Period 13

14 2. Trust financing, investment of derivatives and entrustment loan (1) Trust financing Applicable Not applicable The Company has no trust financing in the Period (2) Investment of derivatives Applicable Not applicable The Company has no derivatives investment in the Period (3) Entrustment loan Applicable Not applicable The Company has no entrustment loan in the Period 3. Application of raised proceeds (1)Overall application of raised proceeds Applicable Not applicable (2) Situation of committed project of raised proceeds Applicable Not applicable (3)The changed project of raised proceeds Applicable Not applicable The Company has no project of raised proceeds changed in the Period (4) Project of raised proceeds Project of raised proceeds and summary Disclosure date Disclosure index 4. Main subsidiaries and joint-stock companies analysis Applicable Not applicable Main subsidiaries and joint-stock companies In RMB Name Type Industry involved Main products or Registered capital Total assets Net assets Operation revenue Operation profit Net profit 14

15 service Self-owned Shenzhen property Auto Industry and Trade Subsidiary Commerce leasing, automobile and RMB million 311,500, ,034, ,418, ,771, ,212, Corporation accessories selling Shenzhen SD Huari Automobile Enterprise Co. Subsidiary Service industry Automobile maintenanc e & production and sales of accessory US$ 5 million 74,373, ,877, ,158, ,595, ,426, Shenzhen Zhongtian Industrial Subsidiary Service industry Property leasing RMB 7.25 million 148,542, ,399, , , , Co., Ltd. Shenzhen Huari Toyota Automobile Subsidiary Commerce Automobile selling RMB 2 million 69,004, ,483, ,529, ,002, ,100, Sales Co. Ltd Production Shenzhen of New inspection Yongtong Automobile Inspection Subsidiary Service industry equipment for auto vehicles, RMB million 14,177, ,919, ,800, , , Equipment self-owned Co. Ltd property leasing Inspection Shenzhen Tellus New Yongtong Automobile Developme nt Co. Ltd Subsidiary Service industry and maintenanc e of auto RMB vehicle, million property managemen t, house 83,119, ,270, ,023, , , lease 15

16 Shenzhen SD Tellus Real Estate Co. Ltd Subsidiary Manufactur e Self-owned property leasing RMB million 29,199, ,592, , , Shenzhen SD Tellus Property Subsidiary Managemen Service industry Property RMB 7.05 managemen million t 28,407, ,065, ,326, , , t Co. Ltd Shenzhen Tellus Real Estate Exchange Subsidiary Service industry Agency of real estate exchange RMB 2 million 2,664, ,507, , , , Co. Ltd Shenzhen Zung Fu Joint-stock Tellus Auto company Service Co., Ltd. Service industry Sales of auto and maintenanc e RMB 30 million 428,934, ,590, ,759, ,933, ,521, Shenzhen Dongfeng Auto Co., Ltd. Joint-stock company Manufactur e Auto manufacturi RMB 100 ng and million maintenanc e 556,126, ,640, ,332, ,799, ,013, Shenzhen Xinglong Machinery Mould Co., Ltd. Joint-stock company Manufactur e Mould processing and exportation RMB million 256,020, ,979, Major project invested by non-raised funds Applicable Not applicable In ten thousand Yuan Project Total investment planned Amount invested in this period Amount invested accumulative till end of reporting period Progress Earnings Tellus Shuibei jewelry Building (Phase I) 41,364 9, , % Total 41,364 9, ,

17 VI. Prediction of business performance from January September 2014 Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation on reason Applicable Not applicable VII. Explanation from the Board and Supervisory Committee for Qualified Opinion from the CPA of this year s Applicable Not applicable VIII. Explanation on Qualified Opinion of previous year from the Board Applicable Not applicable IX. Implementation of profit distribution in reporting period Implementation or adjustment of profit distribution plan in reporting period, cash dividend plan and shares converted from capital reserve in particular Applicable Not applicable Previous year s profit distribution plan was no profit distribution and shares converted from capital reserve either X. Profit distribution and capitalization of capital reserves in the Period Applicable Not applicable The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for the semi-annual year XI. In the report period, reception of research, communication and interview Applicable Not applicable The Company has no reception of research, communication and interview occurred in the Period 17

18 Section V. Important Events I. Corporate governance During the reporting period, the Company has been observing the Company Law, Securities Law and relevant rules issued by the CSRC, for the purpose of improving its legal person governance structure and standardizing its operation level. According to the Articles of Association, Procedure Rules of General Meeting, Procedure Rules of Board of Directors, Procedure Rules of Supervisory Committee, Working Rules of Independent Directors, Working Rules of General Manager and a series of rules and regulations, the Company maintained normal performance of the duties and obligations of its general meeting, board of directors and supervisory committee. Each of its directors and supervisors can perform their duties earnestly. In reporting period, the Company, in line with requirement of internal control, formulated Management Measures of Raise Funds combine with actual condition of the Company and revised the Article of Association. In 30 days before periodic report released, 10 days before performance prediction and express report disclosed and in other major events public, board of the Company, supervisory committee, senior executives and other insider information informed staff exercise self-examination in aspect of the stocks trading in senstive period, no relevant personnel engage in securities trading activities using inside information been found. Controlling shareholder of the Company has a norms behavior without beyond the general meeting to setp in the decision-making and operation activity of the Company directly/indirectly, and has no violation of capital occupation of the Company either, the Company strictly perform its decision-making procedures and disclosed the information timely. During reporting period, in strict accordance with relevant requirement of Rules of Stocks Listing in Shenzhen Stock Exchange and Guide of Fair Information Disclosure for Listed Company as well as normative documents, by earnestly following the principle of fairly, openly and equitably, the Company perform its information disclosure obligation seriously and timely; furthermore, asuring the reality, accuracy and completion for the whole contents of the information disclosed, no fictitious statement, misleading statement or important ommissions been found either, whole of the sharehodles are equally to share the all information of the Company. Presently, the actual condition of the corporate governance shows no difference with the Company Law and relevant requriement from CSRC. II. Significant lawsuits and arbitrations of the Company Applicable Not applicable The Company has no significant lawsuits and arbitrations in reporting period 18

19 III. Question from media Applicable Not applicable No universal questioned by media in reporting period IV. Bankruptcy reorganization Applicable Not applicable In reporting period, the Company has no bankruptcy reorganization occurred. V. Transaction in assets 1. Assets acquisition Applicable Not applicable The Company did not purchased assets in the Period 2. Sales of assets Applicable Not applicable The Company did not sell assets in the Period 3. Business combination Applicable Not applicable The Company has no business combined in the Period VI. Implementation of the company s equity incentive and the effects Applicable Not applicable No equity incentive in reporting period VII. Significant related transaction 1. Related transaction routine operations concerned Applicable Not applicable The Company has no related transaction with routine operations concerned occurred in the Period 2. Related transaction incurred by purchase or sales of assets Applicable Not applicable No related transaction incurred by purchase or sales of assets in Period 3. Related transaction from jointly investment outside Applicable Not applicable No related transaction from jointly investment outside occurred in Period 19

20 4. Credits and liability of related party Applicable Not applicable Whether have non-operation related liabilities and credits relations or not Yes No Majority shareholder s Opening Amount in Closing Related party Relationship Credit and debt Causes non-business capital balance (in 10 thousand Period (in 10 thousand balance (in 10 thousand occupying Yuan) Yuan) Yuan) (Y/N) Shenzhen SDG Co., Ltd. Parent company Debt payable to related party Long-term loans N 7, ,300 Shenzhen SDG Co., Ltd. Parent company Debt payable to related party Accounts current N 5, , Shenzhen SDG Co., Ltd. Parent company Debt payable to related party Short-term loans N 1, , Other significant related transactions Applicable Not applicable The Company had no other significant related transactions in the reporting period VIII. Non-business capital occupying by controlling shareholders and its related parties Applicable Not applicable No non-business capital occupied by controlling shareholders and its related parties in Period IX. Major contract and implantation 1. Trusteeship, contract and leasing (1) Trusteeship Applicable Not applicable The Company had no trusteeship in the reporting period. (2) Contract Applicable Not applicable 20

21 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 Related Announcem Name of the ent Company guaranteed disclosure date Related Announcem Name of the ent Company guaranteed disclosure date Shenzhen Zhongtian Industrial Co., Ltd. Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries) Guarantee limit Guarantee limit Actual date of happening (Date of signing agreement) Actual guarantee limit Guarantee type Guarantee of the Company for the subsidiaries Actual date of happening (Date of signing agreement) Actual guarantee limit Guarantee type Joint liability ,140 4,140 guaranty Guarantee term Guarantee term In ten thousand Yuan Complete implemen tation or not Complete implemen tation or not 2.5 years No Yes Guarante e for related party Guarante e for related party Shenzhen Zhongtian Industrial Co., Ltd. Joint liability ,000 30,000 guaranty 10 years No Yes Shenzhen Auto Industry and Trade Corporation ,000 6,000 Pledged 12 months No Yes Total amount of approving guarantee for subsidiaries in report period (B1) Total amount of approved guarantee for subsidiaries at the end of reporting period (B3) Total amount of actual occurred guarantee for 40,140 subsidiaries in report period (B2) Total balance of actual guarantee for subsidiaries at 40,140 the end of reporting period (B4) 40,140 40,140 Total amount of guarantee of the Company( total two abovementioned guarantee) Total amount of approving guarantee in report period (A1+B1) Total amount of approved guarantee at the end of report period (A3+B3) Total amount of actual occurred guarantee in report 40,140 period (A2+B2) 40,140 The proportion of the total amount of actually guarantee in the net assets of the Company(A4+ B4) Total balance of actual guarantee at the end of report period (A4+B4) 40,140 40, % 21

22 Including: Amount of guarantee for shareholders, actual controller and its related parties(c) The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly(d) Proportion of total amount of guarantee in net assets of the Company exceed 50%(E) 0 34,140 30,000 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 Commitments Accepter Contents Commitments for Share Merger Reform SDG Commitment time Commitment Implementation period (I) Commitments during the work of Share Merger Reform of the Company: 1. Commitments on Lock-up period (1) In accordance with the Measures for the Administration of the Share Merger Reform of Listed Companies, SDG would abide by the various laws, regulations and rules, and perform its statutory commitment duty. (2) Apart from the above-mentioned statutory commitment, SDG also made the following special Long-term Implementing commitment: with 36 months since the day the reform plan starts to take effect, SDG would not list at Shenzhen Stock Exchange and sell the shares of Tellus it held (except for the shares used to promote the administration level of Tellus). (3) The administration level would abide by the laws, regulations and rules, and perform its statutory commitment duty. 22

23 Commitments in report of acquisition or equity change SDG (4) SDG made the commitment: The Promiser hereby promises that, if the Promiser failed to fulfill its commitment or not fully fulfill its commitment, it would compensate other shareholders for their losses suffered thereafter. (5) SDG declared: The Promiser would dutifully fulfill its commitments and shoulder corresponding legal responsibilities. The Promiser would transfer the shares held by it only if the assignee agree and have the ability to shoulder the commitment responsibility. 2. Special commitment concerning the incentive mechanism In order to effectively boost the core management level and business backbones for long, SDG would take out its shares, not exceeding 10% in total number after the Share Merger Reform, and apply them to the boost of the administration level. The shares would be sold to the Company s administrative level over 3 years, with the selling price being the net asset value per share audited during the period nearest to the implementation. Before the implementation of the promoting plan by share selling each year, the administration level must prepay the Company a risk responsibility fund, i.e. 20% of the planned selling price; Should the work of the performance examination set by the Board failed to be finished, the paid risk responsibility fund would not be refunded and shall be owned by the Company. Detailed rules concerning the limitations on the administration level, such as the subscription conditions and risk responsibility fund, and boost plans would be set by the Board and submitted to relevant departments for approval. The implementation of the shares for promoting would be conducted strictly according to relevant laws and regulations, and the circulation conditions of these shares would be in conformity with relevant regulations set by the Shenzhen Stock Exchange. 3. Relevant expenses of this Share Merger Reform of Tellus would be paid by SDG. Controlling shareholder of the Company SDG has special commitment of incentive mechanism in the Company s split-share reform. Later, SASAC and Ministry of Finance jointly issued the Trial Procedures of Stock Option Incentive Implemented By State-Holding Listed Companies and CSRC published the Regulation of Stock Option Incentive for Listed Companies (Trial), after checking the documents, the above mentioned commitment made by SDG fails to satisfy relevant requirements in the document, relevant commitment not implemented temporary. The Company actively negotiate Implementing with the SDG with the matters concerned, on 26 June 2014, on the premise of relevant laws, regulations and requirement of authority satisfied, SDG will continues to support the Company implement a long-acting incentive plan as soon as possible instead of stock option incentive commitment made in share merger reform and complete the construction of long-acting incentive mechanism before 30 June The long-acting incentive plan will implement after submit for approval in General Meeting of the Company at the scheduled time. 23

24 Commitments in assets replacement Commitments make in Initial public offering or re-financing Other commitments for medium and small shareholders Completed on time(y/n) Y XI. Engagement and non-reappointment of CPA Whether the semi-annual report was audited or not Yes No XII. Penalty and rectification Applicable Not applicable The Company had no penalty or rectification in the reporting period. XIII. Risk disclosure of delisting with laws and rules violated Applicable Not applicable The Company has no delisting risks with laws and rules violated in Period XIV. Explanation on other significant events Applicable Not applicable The Company had no explanation on other significant events in the reporting period. 24

25 Section VI. Changes in Shares and Particulars about Shareholders I. Changes in shares Before change Increase/decrease in this time (+, - ) After change In share Capitalizat Amount Ratio New issue Bonus share ion of public Other Subtotal Amount Ratio reserve I. Restricted shares 14,587, % 14,587, % 2. State-owned corporation shares 14,587, % 14,587, % II. Un-restricted shares 205,694, % 205,694, % 1. RMB ordinary shares 179,294, % 179,294, % 2. Domestically listed foreign shares 26,400, % 26,400, % III. Total shares 220,281, % 220,281, % 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 25

26 Total preference shareholders with voting rights recovered at Total shareholders at period-end 16,818 end of reporting period (if applicable) (see Note 8) 0 Particulars about shares held above 5% by shareholders or top ten shareholders Full name of Shareholders Nature of shareholder Proportion of shares held Amount Total Changes of shareholders in report restricte at the end of period d shares report period held Amount of unrestri cted shares held Number of shares pledged/frozen State of share Amount SHENZHEN SDG CO., LTD. State-owned corporation 66.22% 145,870, ,587, ,283,504 Guoyuan Securities Brokerage (HK) Co., Ltd. Foreign corporation 0.94% 2,075, ,75 5 Zhang Yimei Fang Jinsong Jiang Youhua Domestic nature person Domestic nature person Domestic nature person 0.63% 1,398,200 1,398, % 706, , % 650, ,838 FISRT SHANGHAI SECURITIES LTD. Foreign corporation 0.27% 601, ,47 0 Chen Jiansheng Chen Shufen Lin Fengyuan CMS (HK) Domestic nature person Domestic nature person Domestic nature person State-owned corporation 0.27% 600, , % 522, , % 520,358 3, % 520, ,721 Strategy investors or general corporate becomes top 10 shareholders due to N/A rights issued (if applicable)(see Note 3) Explanation on associated relationship among the aforesaid shareholders Among the top ten shareholders, there exists no associated relationship between the state-owned legal person s shareholders Shenzhen SDG Co., Ltd and other shareholders, 26

27 and they do not belong to the consistent actionist regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Companies. For the other shareholders of circulation share, the Company is unknown whether they belong to the consistent actionist. Particular about top ten shareholders with un-restrict shares held Shareholders name Amount of unrestricted shares held at period-end Type Type of shares Amount SHENZHEN SDG CO., LTD. Guoyuan Securities Brokerage (HK) Co., Ltd. Zhang Yimei Fang Jinsong Jiang Youhua FISRT SHANGHAI SECURITIES LTD. Chen Jiansheng Chen Shufen RMB ordinary 131,283,504 shares Domestically 2,075,600 listed foreign shares RMB ordinary 1,398,200 shares RMB ordinary 706,645 shares RMB ordinary 650,838 shares Domestically 601,907 listed foreign shares RMB ordinary 600,050 shares RMB ordinary 522,490 shares 131,283,504 2,075,600 1,398, , , , , ,490 Domestically Lin Fengyuan 520,358 listed foreign shares Domestically CMS (HK) 520,020 listed foreign shares 520, ,020 Expiation on associated relationship or consistent actors within the top 10 un-restrict shareholders and between top 10 un-restrict shareholders and top 10 shareholders Explanation on shareholders involving margin business (if applicable)(see note 4) Among the top ten shareholders, there exists no associated relationship between the state-owned legal person s shareholders Shenzhen SDG Co., Ltd and other shareholders, and they do not belong to the consistent actionist regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Companies. For the other shareholders of circulation share, the Company is unknown whether they belong to the consistent actionist. N/A 27

28 Whether has a buy-back agreement dealing in reporting period Yes No The shareholders o f the Company had no buy-back agreement dealing in reporting period. III. Changes of controlling shareholders or actual controller Changes of controlling shareholders in reporting period Applicable Not applicable Changes of controlling shareholders had no change in reporting period. Changes of actual controller in reporting period Applicable Not applicable Changes of actual controller in reporting period had no change in reporting period. IV. Share holding increasing plan proposed or implemented in reporting period from shareholder of the Company and its concerted action person Applicable Not applicable As far as the Company know, there are no share holding increasing plan proposed or implemented in Period from shareholder of the Company and its concerted action person 28

29 Section VII. Preferred Stock I. Issuance and listing of preferred stock in Period Applicable Not applicable II. Number of shareholders with preferred stock held and shareholdings Applicable Not applicable III. Repurchase and conversion of preferred stock 1. Preferred stock repurchased Applicable Not applicable 2. Preferred stock converted Applicable Not applicable IV. Preferred stock with voting rights recovered and executed Applicable Not applicable V. Accounting policy taken for preferred stock and reasons Applicable Not applicable 29

30 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 II. Resignation and dismissal of directors, supervisors and senior executives Applicable Not applicable Name Title Type Date Reason Zhang Ruili Chairman Office leaving Resignation due to the work change Zhang Jianmin Director Office leaving Resignation due to the work change Lv Hang Chairman Be elected Be elected Li Miao Director Be elected Be elected Guo Jian Guo Dongri Deputy General Manager Secretary of the Board, Deputy GM Office leaving Resignation due to the work change Office leaving Resignation due to personal reason 30

31 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 31

32 Prepared by Shenzhen Tellus Holding Co., Ltd In RMB/CNY Assets Note VII Balance at period-end Balance at year-begin Current assets: Monetary funds 1 57,106, ,898, Transactional financial assets - - Notes receivable - - Accounts receivable 2 4,510, ,016, Prepayment 4 10,291, ,309, Dividend receivable - - Other accounts receivable 3 10,256, ,028, Inventories 5 43,766, ,826, Non-current asset due in 1 year - - Other current assets 6 8,572, ,644, Total of current asset 134,504, ,723, Non-current assets: Consolidated Balance Sheet 2014 年 6 月 30 日 Financial asset available for sale 7 1,391, ,480, Expired investment in possess 8 100, , Long-term receivable Long-term equity investment ,715, ,873, Investment real estate 11 86,137, ,422, Fixed asset ,959, ,968, Construction in process 13 85,849, ,642, Engineering goods - - Fixed asset disposal - - Production biological asset - - Intangible assets 14 52,873, , R&D expense - - Goodwill - - Long-term amortizable expenses , , Deferred income tax assets 16 24,556, ,566, Other non-current asset 17-26,339, Total of non-current assets 607,253, ,274, Total assets 741,757, ,998, The notes to the Financial Statement are essential parts of the Financial Statements 32

33 Prepared by Shenzhen Tellus Holding Co., Ltd Current liability: 深圳市特力 ( 集团 ) 股份有限公司 2014 年半年度报告全文 In RMB/CNY Liability and owners' euqity Note VII Amount at period-end Balance at year-begin Short-term loans ,741, ,969, Transactional financial liability - - Notes payable 21 6,225, ,920, Accounts payable 22 22,062, ,008, Accounts receivable in advance 23 2,228, ,087, Wage payable 24 12,688, ,408, Taxes payable 25 9,175, ,687, Dividend payable 26 - Interest payable - - Other account payable ,698, ,809, Non-current liability due within 1 year 28 12,000, ,000, Other current liability - - Total of current liability 362,819, ,892, Non-current liability: Long-term loans ,000, ,000, Bonds payable - - Long-term payable 30 13,319, ,319, Special accounts payable - - Projected liabilities - - Deferred income tax liability 16 1,102, ,248, Other non-current liability 31,211, ,823, Total non-current liability 170,634, ,390, Total liability 533,454, ,282, Owners' equity: Consolidated Balance Sheet(Con't) 2014 年 6 月 30 日 Share capital ,281, ,281, Capital public reserve 32 8,442, ,508, Surplus public reserve 33 2,952, ,952, Retained profit 34-35,010, ,390, Total owner's equity attibutable to parent company 196,666, ,351, Minority interests 11,637, ,363, Total of owners' equity 208,303, ,715, Total liabilities & owner's equity 741,757, ,998, (The Notes to the Financial Statements are essential parts of the Finanical Statements) 33

34 Prepared by Shenzhen Tellus Holding Co., Ltd Consolidated Profit Statement Jan.- June 2014 In RMB/CNY Items Note VII Amount at this period Amount at last year I. Operation revenue ,692, ,087, Less: Operation cost ,298, ,087, Business tax and surcharge 36 2,463, ,876, Sales expense 37 9,182, ,442, Administrative expense 38 16,192, ,906, Financial expense 39 8,229, ,790, Asset impairment loss 41 35, , Plus:Income from change of fair value(loss is listed with"-") - - Investment income(loss is listed with"-") 40 7,841, ,780, Incl: Investment income from affiliated enterprises and joint venture 7,841, ,707, II.Operation profit(loss is listed with"-") 5,133, ,663, Plus:Non-operation income , , Less: Non-operation expenses 43 2, , Incl: Loss from disposal of non-current assets 14, III.Total profit(loss is listed with"-") 5,355, ,862, Less: Income tax expenses , , IV.Net profit(loss is listed with"-") 4,654, ,667, Net profit attributable to owners' of patrent company 5,380, ,746, Minor shareholders' equity -725, ,079, V.Earning per share (I) Basic earnings per share (II) Diluted earnings per share VI.Other consolidated income 46-66, , VII.Total consolidated income 4,588, ,418, Total consolidated income attributable to owners of parent company 5,314, ,497, Total consolidated income attributable to minority shareholders -725, ,079, (The Notes to the Financial Statements are essential parts of the Finanical Statements) 34

35 Jan.- June 2014 Prepared by Shenzhen Tellus Holding Co., Ltd 深圳市特力 ( 集团 ) 股份有限公司 2014 年半年度报告全文 In RMB/CNY Items Note VII Amount at this period Amount at last year I. Cash flow from operating activities Cash received from sales of goods and labor service provided 253,756, ,638, Taxes surrender received - - Other cash received from business activities 47 25,759, ,668, Sub-total of cash inflow from business activities 279,516, ,306, Cash paid for purchasing of merchandise and services 211,397, ,877, Cash paid to/for staff 25,369, ,622, Taxes paid 16,810, ,252, Other Cash paid for business activities 47 30,123, ,255, Subtotal of cash outflow from business activities 283,701, ,008, Net cash flow generated from business activities -4,185, ,298, II. Cash flow from investment activities Cash received from investment retrieving - 84, Cash received as investment gains - 72, Net cash received from disposal of fixed, intangible assets and other long-term assets 40, ,257, Net cash received from disposal of subsidiaries or other operational units - - Other investmenr-related cash received Subtotal of cash inflow due to investment activities 40, ,414, Cash paid for construction of fixed assets, intangible assets and other long-term assets 70,244, ,185, Cash paid as investment - 9,900, Net cash received from subsidiaries and other opeartional units - - Other cash paid for investment activities , Subtotal of cash outflow due to investment activitie 70,244, ,470, Net cash flow generated from investment -70,203, ,944, III. Cash flow generated by financing Consolidated Cash Flow Statement Cash received as investment absorption - - Including: Cash received as investment from minor shareholders by subsidiary - - Cash received as loans 226,000, ,600, Other financing-related cash received - - Subtotal of cash inflow from financing activities 226,000, ,600, Cash paid to debts 154,000, ,600, Cash paid as dividend, profit or interests 4,916, ,127, Including: Dividend and profit paid by subsidiaries to minor shareholders - - Other cash paid for financing activities 47-20, Subtotal of cash outflow from financing activities 158,916, ,747, Net cash flow generated by financing activities 67,083, ,147, IV. Influence of exchange rate alternation on cash and cash equivalents , V. Net increase of cash and cash equivalents -7,304, ,093, Plus: Balance of cash and cash equivalents at the beginning of term 63,166, ,145, VI. Balance of cash and cash equivalents at the end of term 55,861, ,238, (The Notes to the Financial Statements are essential parts of the Finanical Statements) 35