2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Shenzhen SEG Co., Ltd.
2016 Semi-Annual Financial Reports
August 2016
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
I. Auditor's report
Is the semi-annual report audited?
□ Yes √ No
The Semi-Annual Report of the Company has not been audited.
II. Financial statements
Unit: RMB Yuan.
1. Consolidated Balance Sheet Statement
Prepared by: Shenzhen SEG Co., Ltd.
June 30, 2016
Unit: Yuan
Item Closing balance Opening balance
Current assets:
Monetary funds 143,304,754.16 276,863,429.10
Deposit reservation for balance
Loans to other banks 40,000,000.00 40,000,000.00
Financial assets measured by fair value with
changes included in current gains and losses
Derivative financial assets
Notes receivable
Accounts receivable 79,456,363.98 98,212,422.87
Advances 89,712,712.41 129,044,887.26
Premiums receivable
Reinsurance accounts receivable
Reinsurance deposit receivable
Interest receivable
Dividends receivable
Other receivables 46,250,769.24 27,352,784.33
Redemptory monetary capital for resale
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Inventory 568,759,249.94 450,809,934.72
Held-for-sale assets
Non-current assets due within one year
Other current assets 236,291,113.24 339,430,419.74
Total current assets 1,203,774,962.97 1,361,713,878.02
Non-current assets:
Loans and advances issued 505,950,062.08 475,520,822.08
Financial assets available for sale 34,384,017.93 34,539,973.24
Held-to-maturity investment
Long-term receivables
Long-term equity investment 189,295,871.13 185,122,573.88
Investment properties 434,510,747.94 443,851,726.40
Fixed assets 36,910,218.56 37,524,425.25
Construction in progress 140,810.00
Engineering materials
Disposal of fixed assets 4,577.55
Productive biological assets
Oil & gas assets
Intangible assets 977,176.99 1,143,762.11
Development expenses
Goodwill 10,328,927.82 10,328,927.82
Long-term expenses to be amortized 52,277,089.32 49,235,999.86
Deferred income tax assets 10,433,814.57 10,433,814.57
Other non-current assets 848,593.64 5,103,811.14
Total non-current assets 1,275,921,097.53 1,252,946,646.35
Total assets 2,479,696,060.50 2,614,660,524.37
Current liabilities:
Short-term borrowing 311,438,652.00 367,759,630.48
Loans from central bank
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Deposits from customers and interbank
Loans from other banks
Financial liabilities measured by fair value with
changes included in current gains and losses
Derivative financial liabilities
Notes payable
Accounts payable 24,526,663.69 89,908,781.98
Advances from customers 155,307,062.02 190,430,121.05
Financial assets sold for repurchase
Service charges and commissions payable
Payroll payable 7,529,491.72 21,849,134.16
Taxes payable 24,265,012.33 34,645,030.07
Interest payable 698,717.58 516,758.34
Dividends payable 18,966,398.39 2,218,224.58
Other payables 227,540,409.09 194,329,885.69
Reinsurance accounts payable
Insurance deposit
Customer brokerage deposits
Securities underwriting brokerage deposits
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 770,272,406.82 901,657,566.35
Non-current liabilities:
Long-term borrowing
Bonds payable
Preferred stock
Perpetual capital securities
Long-term payables
Payroll payable
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Special payables
Estimated liabilities 9,700,000.00 7,000,000.00
Deferred income 9,598,486.65 9,634,114.77
Deferred income tax liabilities 15,430,650.70 16,024,102.35
Other non-current liabilities
Total non-current liabilities 34,729,137.35 32,658,217.12
Total liabilities 805,001,544.17 934,315,783.47
Owners' equity:
Share capital 784,799,010.00 784,799,010.00
Other equity instruments
Preferred stock
Perpetual capital securities
Capital reserve 506,553,643.41 506,545,831.11
Less: Treasury shares
Other comprehensive income 248,834.30 326,662.48
Special reserve
Surplus reserve 109,922,336.87 109,922,336.87
General risk provision
Undistributed profits 76,719,244.65 73,532,388.70
Total owners' equity attributable to the parent
1,478,243,069.23 1,475,126,229.16
company
Minority shareholders' equity 196,451,447.10 205,218,511.74
Total owners' equity 1,674,694,516.33 1,680,344,740.90
Total liabilities and owners' equity 2,479,696,060.50 2,614,660,524.37
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
2. Balance Sheet Statement of the Parent Company
Unit: Yuan
Item Closing balance Opening balance
Current assets:
Monetary funds 59,736,832.79 186,369,470.58
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Financial assets measured by fair value with
changes included in current gains and losses
Derivative financial assets
Notes receivable
Accounts receivable
Advances 101,760.00 418,544.10
Interest receivable
Dividends receivable 24,259,680.00
Other receivables 652,724,525.27 570,671,617.38
Inventory 747,902.23 112,715.50
Held-for-sale assets
Non-current assets due within one year
Other current assets 386,000,000.00 393,166,401.54
Total current assets 1,123,570,700.29 1,150,738,749.10
Non-current assets:
Financial assets available for sale 33,515,392.83 33,515,392.83
Held-to-maturity investment
Long-term receivables
Long-term equity investment 469,279,397.37 455,106,100.12
Investment properties 279,140,304.72 284,399,860.14
Fixed assets 19,358,807.19 19,458,584.25
Construction in progress 140,810.00
Engineering materials
Disposal of fixed assets 4,577.55
Productive biological assets
Oil & gas assets
Intangible assets 523,881.18 622,054.24
Development expenses
Goodwill
Long-term expenses to be amortized 7,798,575.53 7,000,181.66
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Deferred income tax assets 8,242,045.89 8,242,045.89
Other non-current assets
Total non-current assets 817,862,982.26 808,485,029.13
Total assets 1,941,433,682.55 1,959,223,778.23
Current liabilities:
Short-term borrowing 290,000,000.00 315,000,000.00
Financial liabilities measured by fair value with
0.00
changes included in current gains and losses
Derivative financial liabilities 0.00
Notes payable 0.00 0.00
Accounts payable 79,596.00 36,075.52
Advances from customers 22,875,183.88 42,704,620.99
Payroll payable 2,701,632.12 13,652,201.42
Taxes payable 12,214,863.56 10,033,418.41
Interest payable 0.00 477,402.78
Dividends payable 119,803.29 119,803.29
Other payables 98,655,804.06 95,119,560.37
Held-for-sale liabilities 0.00
Non-current liabilities due within one year 0.00 0.00
Other current liabilities 0.00 0.00
Total current liabilities 426,646,882.91 477,143,082.78
Non-current liabilities:
Long-term borrowing 0.00 0.00
Bonds payable 0.00 0.00
Preferred stock 0.00 0.00
Perpetual capital securities 0.00 0.00
Long-term payables 0.00 0.00
Payroll payable 0.00 0.00
Special payables 0.00 0.00
Estimated liabilities 9,700,000.00 7,000,000.00
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Deferred income 9,500,000.00 9,500,000.00
Deferred income tax liabilities 0.00 0.00
Other non-current liabilities
Total non-current liabilities 19,200,000.00 16,500,000.00
Total liabilities 445,846,882.91 493,643,082.78
Owners' equity:
Share capital 784,799,010.00 784,799,010.00
Other equity instruments 0.00 0.00
Preferred stock 0.00 0.00
Perpetual capital securities 0.00 0.00
Capital reserve 507,781,650.13 507,773,837.83
Less: Treasury shares 0.00 0.00
Other comprehensive income 48.10 0.00
Special reserve 0.00 0.00
Surplus reserve 109,922,336.87 109,922,336.87
Undistributed profits 93,083,754.54 63,085,510.75
Total owners' equity 1,495,586,799.64 1,465,580,695.45
Total liabilities and owners' equity 1,941,433,682.55 1,959,223,778.23
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
3. Consolidated Profit Statement
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
I. Total operating revenue 412,250,832.76 425,219,054.09
Including: Operating revenue 362,673,236.85 374,555,135.61
Interest income 47,373,095.91 47,553,384.48
Earned premiums 0.00
Service charges and commissions income 2,204,500.00 3,110,534.00
II. Total operating cost 344,919,889.29 358,714,002.72
Including: Operating cost 320,996,877.99 317,303,931.44
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
Interest expenses 465,888.89 3,159,048.64
Commissions 0.00
Surrender value 0.00
Net compensation pay-outs 0.00
Net insurance deposit accrued 0.00
Insurance dividends 0.00
Reinsurance expenses 0.00
Operating tax and surcharges 10,129,674.14 13,748,030.14
Sale expenses 818,331.16 941,405.12
Management expenses 15,716,402.51 16,004,563.26
Financial cost 755,340.12 843,057.23
Loss from asset impairment -3,962,625.52 6,713,966.89
Income from change of fair value (enter "-" for
0.00
loss)
Income from investment (enter "-" for loss) 1,266,453.02 5,451,963.64
Including: Income from investment in joint
-4,826,750.85 -4,892,855.94
ventures or associates
Income from exchange (enter "-" for loss) 0.00
III. Operating profit (enter "-" for loss) 68,597,396.49 71,957,015.01
Add: Non-operating revenue 418,388.36 1,045,979.11
Including: Gains on disposal of non-current
0.00 18,693.10
assets
Less: Non-operating expenses 2,758,885.34 815,788.94
Including: Loss from disposal of non-current
9,316.22 196,424.21
assets
IV. Total profit (enter "-" for total loss) 66,256,899.51 72,187,205.18
Less: Income tax 22,038,716.72 20,121,370.92
V. Net profit (enter "-" for net loss) 44,218,182.79 52,065,834.26
Net profit attributable to owners of the parent
26,856,270.42 34,906,133.61
company
Profit and loss of minority shareholders 17,361,912.37 17,159,700.65
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
VI. Net of tax of other comprehensive incomes -116,918.38 316,765.26
Total owners' net of tax of other comprehensive
-77,828.18 210,902.31
income attributable to the parent company
1. Other comprehensive income not to be
reclassified into gains and losses
(1) Changes of net liabilities or net assets of the
re-measured defined benefit plans
(2) Shares of the investee of other
comprehensive income not to be reclassified
into gains and losses under the equity method
2. Other comprehensive income to be
-77,828.18 210,902.31
reclassified into gains and losses
(1) Shares of the investee of other
comprehensive income to be reclassified into 48.10
gains and losses under the equity method
(2) Gains and losses from changes of fair value
-77,876.28 210,902.31
of the available-for-sale financial assets
(3) Held-to-maturity investments categorized as
gains and losses from the available-for-sale 0.00
financial assets
(4) Effective gains or loss from cash flows 0.00
5. Foreign currency translation differences 0.00
(6) Others 0.00
Net of tax of other comprehensive income
-39,090.20 105,862.95
attributable to minority shareholders
VII. Total comprehensive income 44,101,264.41 52,382,599.52
Total comprehensive income attributable to
26,778,442.24 35,117,035.92
shareholders of the parent company
Total comprehensive income attributable to
17,322,822.17 17,265,563.60
minority shareholders
VIII. Earnings per share
1. Basic earnings per share 0.0342 0.0445
2. Diluted earnings per share 0.0342 0.0445
During the merger of the enterprises under the control of a same entity in the report period, the net profit of the acquired party realized before the
merger was: RMB 0.00 Yuan, and net profit of the purchased party realized before the merger in the previous period was: RMB 0.00 Yuan.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
4. Profit Statement of the Parent Company
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
I. Operating revenue 51,626,681.87 66,577,264.42
Less: Operating cost 36,890,488.44 44,695,244.80
Operating tax and surcharges 2,004,366.35 3,724,403.75
Sale expenses
Management expenses 6,516,831.79 6,176,205.10
Financial cost -13,065,151.38 -7,698,774.31
Loss from asset impairment -400,000.00
Income from change of fair value (enter "-" for
loss)
Income from investment (enter "-" for loss) 45,762,330.76 37,619,081.12
Including: Income from investment in joint
-4,826,750.85 -4,892,855.94
ventures and associates
II. Operating profit (enter "-" for loss) 65,042,477.43 57,699,266.20
Add: Non-operating revenue 7,300.00 214,230.19
Including: Gains on disposal of non-current
assets
Less: Non-operating expenses 2,707,915.25 21,350.50
Including: Loss from disposal of non-current
7,915.25 4,100.50
assets
III. Total profit (enter "-" for total loss) 62,341,862.18 57,892,145.89
Less: Income tax 8,674,203.92 10,111,975.20
V. Net profit (enter "-" for net loss) 53,667,658.26 47,780,170.69
V. Net of tax of other comprehensive incomes 48.10
1. Other comprehensive income not to be
reclassified into gains and losses
(1) Changes of net liabilities or net assets of the
re-measured defined benefit plans
(2) Shares of the investee of other
comprehensive income not to be reclassified
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
into gains and losses under the equity method
2. Other comprehensive income to be
48.10
reclassified into gains and losses
(1) Shares of the investee of other
comprehensive income to be reclassified into 48.10
gains and losses under the equity method
(2) Gains and losses from changes of fair value
of the available-for-sale financial assets
(3) Held-to-maturity investments categorized as
gains and losses from the available-for-sale
financial assets
(4) Effective gains or loss from cash flows
(5) Foreign currency translation differences
(6) Others
VI. Total comprehensive income 53,667,706.36 47,780,170.69
VII. Earnings per share
1. Basic earnings per share
2. Diluted earnings per share
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
5. Consolidated Cash Flow Statement
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
I. Cash flow from operating activities:
Cash received from sales of goods and
480,116,657.74 713,661,591.72
rendering of services
Net increase in deposits from customers and
0.00
interbank
Net increase in loans from central bank 0.00
Net increase in borrowing from other financial
0.00
institutions
Cash received from premiums of primary
0.00
insurance contracts
Net cash received from reinsurance business 0.00
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
Net increase in deposits from policyholders and
0.00
investment
Net increase in financial assets measured by
fair value with changes included in current 0.00
gains and losses
Cash received from interest and commissions 49,594,029.07 48,000,243.60
Net increase in loans from other banks 0.00
Net increase in redemption capital 0.00
Tax refunds 76,897,672.19 88,433,998.57
Other cash received related to operating
111,085,187.92 230,075,360.61
activities
Subtotal of cash inflow from operating
717,693,546.92 1,080,171,194.50
activities
Cash paid for goods and service 553,514,232.23 824,078,559.71
Net increase in loans to customers and
34,265,000.00 48,372,311.47
advances
Net increase in deposits with central bank and
0.00
interbank
Cash paid for compensation pay-outs of
0.00
primary insurance contracts
Cash paid for interest, service charges, and
24,273.94 24,453.96
commissions
Cash paid as insurance dividends 0.00
Cash paid to and on behalf of employees 56,950,190.52 51,910,984.07
Taxes paid 58,072,566.51 62,553,032.06
Other cash paid related to operating activities 114,181,312.12 191,819,686.85
Subtotal of cash outflow in operating activities 817,007,575.32 1,178,759,028.12
Net cash flow from operating activities -99,314,028.40 -98,587,833.62
II. Cash flows from investment activities:
Cash received from withdrawal of investment 434,200,000.00 1,318,877,729.90
Cash received from investment income 6,093,203.87 10,137,874.16
Net cash received from disposal of fixed assets,
10,000.00 28,493.50
intangible assets and other long-term assets
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
Net cash received from disposal of subsidiaries
0.00
and other business units
Other cash received related to investment
0.00
activities
Subtotal of cash inflow from investment
440,303,203.87 1,329,044,097.56
activities
Cash paid for purchase and construction of
fixed assets, intangible assets and other 3,992,387.70 9,058,685.65
long-term assets
Cash paid for investment 371,804,260.00 1,243,610,000.00
Net increase in mortgage loans 0.00
Net cash paid for acquisition of subsidiaries and
0.00
other business units
Other cash paid related to investment activities 0.00
Subtotal of cash outflow in investment
375,796,647.70 1,252,668,685.65
activities
Net cash flow from investment activities 64,506,556.17 76,375,411.91
III. Cash flow from financing activities:
Cash received by absorbing investment 0.00
Including: Cash received by subsidiaries from
0.00
investment of minority shareholders
Borrowings received 230,220,000.00 295,000,000.00
Cash received from bond issue 0.00
Other cash received related to financing
7,812.30
activities
Subtotal of cash inflow from financing
230,227,812.30 295,000,000.00
activities
Cash repayments of amounts borrowed 286,540,978.48 409,246,687.38
Cash paid for dividend and profit distribution or
39,573,361.82 31,895,839.49
interest payment
Including: Dividends and profit paid by
8,280,567.52 10,728,693.04
subsidiaries to minority shareholders
Other cash paid related to financing activities 1,524,692.51 58,429,722.92
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
Subtotal of cash outflow in financing activities 327,639,032.81 499,572,249.79
Net cash flow arising from financing activities -97,411,220.51 -204,572,249.79
IV. Influence of exchange rate fluctuation on
17.80 1.27
cash and cash equivalents
V. Net increase in cash and cash equivalents -132,218,674.94 -226,784,670.23
Add: Opening balance of cash and cash
275,523,429.10 382,056,680.70
equivalents
VI. Closing balance of cash and cash
143,304,754.16 155,272,010.47
equivalents
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
6. Cash Flow Statement of the Parent Company
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
I. Cash flow from operating activities:
Cash received from sales of goods and
45,134,847.16 46,077,293.80
rendering of services
Tax refunds
Other cash received related to operating
55,639,989.51 134,093,553.11
activities
Subtotal of cash inflow from operating
100,774,836.67 180,170,846.91
activities
Cash paid for goods and service 32,266,487.97 27,279,852.92
Cash paid to and on behalf of employees 23,691,555.31 18,281,258.17
Taxes paid 15,076,625.42 27,836,566.09
Other cash paid related to operating activities 113,721,306.86 224,334,962.62
Subtotal of cash outflow in operating activities 184,755,975.56 297,732,639.80
Net cash flow from operating activities -83,981,138.89 -117,561,792.89
II. Cash flows from investment activities:
Cash received from withdrawal of investment 543,000,000.00 1,258,100,000.00
Cash received from investment income 26,512,734.94 41,546,585.40
Net cash received from disposal of fixed assets,
10,000.00
intangible assets and other long-term assets
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
Net cash received from disposal of subsidiaries
and other business units
Other cash received related to investment
activities
Subtotal of cash inflow from investment
569,522,734.94 1,299,646,585.40
activities
Cash paid for purchase and construction of
fixed assets, intangible assets and other 251,207.00
long-term assets
Cash paid for investment 555,000,000.00 1,160,600,000.00
Net cash paid for acquisition of subsidiaries and
other business units
Other cash paid related to investment activities
Subtotal of cash outflow in investment
555,000,000.00 1,160,851,207.00
activities
14,522,734.94
Net cash flow from investment activities 138,795,378.40
III. Cash flow from financing activities:
Cash received by absorbing investment
Borrowings received 190,000,000.00 215,000,000.00
Cash received from bond issue
Other cash received related to financing
7,812.30
activities
Subtotal of cash inflow from financing
190,007,812.30 215,000,000.00
activities
Cash repayments of amounts borrowed 215,000,000.00 350,000,000.00
Cash paid for dividend and profit distribution or
32,182,063.94 20,043,250.00
interest payment
Other cash paid related to financing activities
Subtotal of cash outflow in financing activities 247,182,063.94 370,043,250.00
Net cash flow arising from financing activities -57,174,251.64 -155,043,250.00
IV. Influence of exchange rate fluctuation on
17.80 1.27
cash and cash equivalents
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
V. Net increase in cash and cash equivalents -126,632,637.79 -133,809,663.22
Add: Opening balance of cash and cash
186,369,470.58 204,395,253.65
equivalents
VI. Closing balance of cash and cash
59,736,832.79 70,585,590.43
equivalents
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
7. Consolidated Statement of Changes in Owners' equity
Amount incurred in the current period
Unit: Yuan
Current period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
I. Closing
784,799, 506,545, 109,922, 205,218,511.7 1,680,344,
balance of the 326,662.48 73,532,388.70
010.00 831.11 336.87 4 740.90
previous year
Plus: Change of
accounting
policies
Correction to
errors of the
previous period
Merger of
enterprises
under common
control
Others
II. Opening
784,799, 506,545, 109,922, 205,218,511.7 1,680,344,
balance of the 326,662.48 73,532,388.70
010.00 831.11 336.87 4 740.90
current year
III. Increase and
decrease of the -5,650,224
7,812.30 -77,828.18 3,186,855.95 -8,767,064.64
current year .57
(enter "-" for
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Current period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
decrease)
1. Total
17,322,822.1 44,101,26
comprehensive -77,828.18 26,856,270.42
7 4.41
income
2. Capital
invested or
decreased by
owners
(1) Ordinary
shares invested
by the
shareholders
(2) Capitals
invested by
other equity
instrument
holders
(3) Amount of
share-based
payment
included in
owners' equity
(4) Others
3. Profit -26,089,886.8 -49,759,30
-23,669,414.47
distribution 1 1.28
(1) Accrual of
surplus public
reserve
(2) Accrual of
general risk
provision
(3) Amount -26,089,886.8 -49,759,30
-23,669,414.47
distributed to 1 1.28
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Current period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
owners (or
shareholders)
(4) Others
4. Internal
carrying
forward of
owners' equity
(1) Capital
reserve
transferred to
increase capital
(or share
capital)
(2) Surplus
public reserve
transferred to
increase capital
(or share
capital)
(3) Surplus
public reserve
compensating
losses
(4) Others
5. Special
reserve
(1) Accrual of
the current year
(2) Amount
utilized in the
current period
6. Others 7,812.30 7,812.30
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Current period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
IV. Closing
784,799, 506,553, 109,922, 196,451,447. 1,674,694,
balance of the 248,834.30 76,719,244.65
010.00 643.41 336.87 10 516.33
current period
Amount of the previous year
Unit: Yuan
Previous period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
I. Closing
784,799, 404,727, 102,912, 196,398,356.7 1,495,369,
balance of the 231,817.05 6,299,799.41
010.00 257.72 835.67 6 076.61
previous year
Plus: Change of
accounting
policies
Correction to
errors of the
previous period
Merger of
enterprises
under common
control
Others
II. Opening
784,799, 404,727, 102,912, 196,398,356.7 1,495,369,
balance of the 231,817.05 6,299,799.41
010.00 257.72 835.67 6 076.61
current year
III. Increase and
decrease of the 101,816, 141,545,1
210,902.31 34,906,133.61 4,611,870.56
current year 219.19 25.67
(enter "-" for
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Previous period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
decrease)
1. Total
52,382,59
comprehensive 210,902.31 34,906,133.61 17,265,563.60
9.52
income
2. Capital
invested or
decreased by
owners
(1) Ordinary
shares invested
by the
shareholders
(2) Capitals
invested by
other equity
instrument
holders
(3) Amount of
share-based
payment
included in
owners' equity
(4) Others
3. Profit -12,653,693.0 -12,653,69
distribution 4 3.04
(1) Accrual of
surplus public
reserve
(2) Accrual of
general risk
provision
(3) Amount -12,653,693.0 -12,653,69
distributed to 4 3.04
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Previous period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
owners (or
shareholders)
(4) Others
4. Internal
carrying
forward of
owners' equity
(1) Capital
reserve
transferred to
increase capital
(or share
capital)
(2) Surplus
public reserve
transferred to
increase capital
(or share
capital)
(3) Surplus
public reserve
compensating
losses
(4) Others
5. Special
reserve
(1) Accrual of
the current year
(2) Amount
utilized in the
current period
101,816, 101,816,2
6. Others
219.19 19.19
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Previous period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
IV. Closing
784,799, 506,543, 102,912, 201,010,227.3 1,636,914,
balance of the 442,719.36 41,205,933.02
010.00 476.91 835.67 2 202.28
current period
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
8. Statement on Changes of Owners' Equity of the Parent Company
Amount incurred in the current period
Unit: Yuan
Current period
Other equity instruments
Item Less: Other
Special Undistributed Total owners'
Share capital Perpetual Capital reserve Treasury comprehensive Surplus reserve
Preferred reserve profits equity
capital Others shares income
Shares
securities
I. Closing balance of
784,799,010.00 507,773,837.83 109,922,336.87 63,085,510.75 1,465,580,695.45
the previous year
Plus: Change of
accounting policies
Correction to errors of
the previous period
Others
II. Opening balance of
784,799,010.00 507,773,837.83 109,922,336.87 63,085,510.75 1,465,580,695.45
the current year
III. Increase and
decrease of the
7,812.30 48.10 29,998,243.79 30,006,104.19
current year (enter "-"
for decrease)
1. Total
comprehensive 48.10 53,667,658.26 53,667,706.36
income
2. Capital invested or
decreased by owners
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Current period
Other equity instruments
Item Less: Other
Special Undistributed Total owners'
Share capital Perpetual Capital reserve Treasury comprehensive Surplus reserve
Preferred reserve profits equity
capital Others shares income
Shares
securities
(1) Ordinary shares
invested by the
shareholders
(2) Capitals invested
by other equity
instrument holders
(3) Amount of
share-based payment
included in owners'
equity
(4) Others
3. Profit distribution -23,669,414.47 -23,669,414.47
(1) Accrual of surplus
public reserve
(2) Amount
distributed to owners -23,669,414.47 -23,669,414.47
(or shareholders)
(3) Others
4. Internal carrying
forward of owners'
equity
(1) Capital reserve
transferred to increase
capital (or share
capital)
(2) Surplus public
reserve transferred to
increase capital (or
share capital)
(3) Surplus public
reserve compensating
losses
(4) Others
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Current period
Other equity instruments
Item Less: Other
Special Undistributed Total owners'
Share capital Perpetual Capital reserve Treasury comprehensive Surplus reserve
Preferred reserve profits equity
capital Others shares income
Shares
securities
5. Special reserve
(1) Accrual of the
current year
(2) Amount utilized in
the current period
6. Others 7,812.30 7,812.30
IV. Closing balance of
784,799,010.00 507,781,650.13 48.10 109,922,336.87 93,083,754.54 1,495,586,799.64
the current period
Amount of the previous year
Unit: Yuan
Previous period
Other equity instruments
Item Less: Other
Special Undistributed Total owners'
Share capital Perpetual Capital reserve Treasury comprehensive Surplus reserve
Preferred reserve profits equity
capital Others shares income
Shares
securities
I. Closing balance of
784,799,010.00 405,955,264.44 102,912,835.67 -22,209,989.62 1,271,457,120.49
the previous year
Plus: Change of
accounting policies
Correction to errors
of the previous period
Others
II. Opening balance
784,799,010.00 405,955,264.44 102,912,835.67 -22,209,989.62 1,271,457,120.49
of the current year
III. Increase and
decrease of the
101,816,219.19 47,780,170.69 149,596,389.88
current year (enter "-"
for decrease)
1. Total
comprehensive 47,780,170.69 47,780,170.69
income
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Previous period
Other equity instruments
Item Less: Other
Special Undistributed Total owners'
Share capital Perpetual Capital reserve Treasury comprehensive Surplus reserve
Preferred reserve profits equity
capital Others shares income
Shares
securities
2. Capital invested or
decreased by owners
(1) Ordinary shares
invested by the
shareholders
(2) Capitals invested
by other equity
instrument holders
(3) Amount of
share-based payment
included in owners'
equity
(4) Others
3. Profit distribution
(1) Accrual of surplus
public reserve
(2) Amount
distributed to owners
(or shareholders)
(3) Others
4. Internal carrying
forward of owners'
equity
(1) Capital reserve
transferred to
increase capital (or
share capital)
(2) Surplus public
reserve transferred to
increase capital (or
share capital)
(3) Surplus public
reserve compensating
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Previous period
Other equity instruments
Item Less: Other
Special Undistributed Total owners'
Share capital Perpetual Capital reserve Treasury comprehensive Surplus reserve
Preferred reserve profits equity
capital Others shares income
Shares
securities
losses
(4) Others
5. Special reserve
(1) Accrual of the
current year
(2) Amount utilized
in the current period
6. Others 101,816,219.19 101,816,219.19
IV. Closing balance
784,799,010.00 507,771,483.63 102,912,835.67 25,570,181.07 1,421,053,510.37
of the current period
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
III. Company Profile
Shenzhen SEG Co., Ltd. (hereinafter referred to as "the Company") was incorporated on July 16, 1996 through public
offering with Shenzhen SEG Group Co., Ltd. as the sole initiator upon the approval of relevant departments of Shenzhen
and the state in accordance with the Company Law of the People's Republic of China. With approval of the securities
administration departments of Shenzhen and the state, the Company's B shares and A shares were listed and traded on
Shenzhen Stock Exchange respectively in July 1996 and December 1996.
On June 7, 2006, the Company passed a resolution at the general meeting of shareholders concerning the equity division
reform. According to the transfer plan of capital reserve into common shares, the Company distributed 4.6445 shares to
tradable A share shareholders for each 10 shares, which totaled 40,233,322 transferred shares. As a result, its non-tradable A
shares were qualified for listing and circulating. Among the converted and increased capital share obtained by the tradable
A-share shareholders, 6,997,054 shares were received due to the Company's share capital expansion and the rest of
33,236,268 shares were the consideration paid to the tradable A-share shareholders by non-tradable A-share holders under
fixed arrangements.
As of June 30, 2016, the total capital share of the Company amounts to 784,799,010 shares, including 26,689 restricted
shares and 784,772,321 unrestricted shares. The registered capital is 784,799,010 Yuan. The registered address is 31F,
Tower A, Stars Plaza, Huaqiang Road (N), Futian District, Shenzhen.
1. Business Scope
General items: Domestic commerce, goods supply and sales (excluding commodities under special operation, control and
sales), business development (specific projects shall be further declared), economic information consulting, property lease,
real estate agency, and operation of SEG special the electronics markets (the license for the special market shall be further
applied for).
2. Business Property and Business Operations
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
The Company engages in business service industry, involving products and service mainly in operation and management of
special the electronics markets, lease business and other tertiary industries. 22 entities are included in the current
consolidated financial statements, namely:
Proportion of Proportion of voting
Subsidiary name Type of subsidiary Level
shareholding (%) right (%)
Shenzhen SEG Baohua Enterprise Development Co., Ltd. Holding subsidiary I 66.58 66.58
Shenzhen Mellow Orange Business Hotel Management
Holding grandson company Ⅱ 66.58 66.58
Co., Ltd
Shenzhen SEG Industrial Investment Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Changsha SEG Development Co., Ltd. Holding subsidiary I 46.00 51.00
Shenzhen SEG Electronics Market Management Co., Ltd. Holding subsidiary I 70.00 70.00
Suzhou SEG Electronics Market Management Co., Ltd. Holding subsidiary I 45.00 45.00
Xi'an SEG Electronics Market Co., Ltd. Holding subsidiary I 65.00 65.00
Shenzhen SEG Credit Co., Ltd. Holding subsidiary I 53.02 53.02
Shenzhen SEG E-Commerce Co., Ltd. Holding subsidiary I 51.00 51.00
Shenzhen SEG Electronics Market Management Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Xi'an Hairong SEG Electronics Market Co., Ltd. Holding subsidiary I 51.00 51.00
Wujiang SEG Electronics Market Co., Ltd. Holding subsidiary I 51.00 51.00
Wuxi SEG Electronics Market Co., Ltd Holding subsidiary I 51.00 51.00
Foshan Shunde SEG Electronics Market Management Co.,
Wholly-owned subsidiary I 100.00 100.00
Ltd.
Nanning SEG Electronics Market Management Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Nantong SEG Times Square Development Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Yantai SEG Times Square Development Co., Ltd. Holding subsidiary I 90.00 90.00
Nantong SEG Commercial Operation Management Co.,
Wholly-owned subsidiary I 100.00 100.00
Ltd.
Suzhou SEG Digital Plaza Management Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Xi'an Fengdong New Town SEG Times Square Properties
Wholly-owned subsidiary I 100.00 100.00
Co., Ltd.
Suzhou SEG Intelligent Technology Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Shenzhen SEG Longyan New Energy Application and
Holding subsidiary I 50.00 50.00
Development Co., Ltd.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
For the cause for difference between the proportion of shareholding and the proportion of voting rights and the basis for control of the invested
entity even with half of voting rights or less, see "Note 8: Equities in other entities – (1) Equities in subsidiaries".
Compared with the previous period, two subsidiaries are added to entities included in the consolidated financial statements of the current period.
IV. Basis of preparation of the financial statements
1. Basis of preparation
The Company has conducted confirmation and measurement based on the transactions and events that have been actually
incurred and in accordance with the Accounting Standards for Business Enterprises (ASBE) and specific standards, the
application guide of ASBE, the interpretation of ASBE and other relevant regulations (hereinafter collectively referred to as
"the ASBE"). According to Listed Company Information Disclosure Preparation Rules No. 15 - General Regulations on
Financial Report (amended in 2014) released by CSRC, the Company prepared the financial statements.
2. Sustainable operation ability
There is no concern on sustainable operation ability of the Company within 12 months since the end of the report period.
V. Important accounting policies and accounting estimates
1. Statement on compliance with ASBE
The financial statements prepared by the Company comply with the requirements of the Accounting Standard for Business
Enterprises and truthfully and completely reflect relevant information on the financial position, operating results, and cash
flows of the Company.
2. Accounting period
A fiscal year lasts from January 1st to December 31st of the Gregorian calendar.
3. Recording currency
Renminbi is the recording currency of the financial statements of the Company.
4. Accounting treatment method for the merger of the enterprises under the control of a same entity
and those not under the control of a same entity
i. If the terms and conditions or economic influences of deals involved in business merger by steps are consistent with the
following case(s), several deals will be processed as a package deal for accounting treatment.
(1) Those deals are made at the same time or in consideration of mutual influences;
(2) A complete business result can be achieved only with the deals as integrity;
(3) The occurrence of one transaction depends on the occurrence of at least one transaction.
(4) A single deal is uneconomical but the integration with other deals is economical.
ii. Business merger under common control
Assets and liabilities acquired by the Company in the merger are calculated based on the book value of the merged party's
assets and liabilities (including goodwill resulting from the acquisition of the merged party) in the consolidated financial
statements of the ultimate controlling party on the date of merger. The capital stock premium of capital reserve is adjusted
based on the difference between the book value of net assets acquired in the merger and that of the consideration of the
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
merger (or the total book value of issued shares). The retained earnings are adjusted if the capital stock premium is not
sufficient for writing off.
If contingent consideration exists and the estimated liabilities and assets have to be recognized, the capital reserve (capital
surplus or capital stock premium) is adjusted based on the difference between the estimated liabilities and assets and the
subsequent contingent consideration. The retained earnings are adjusted if the capital reserve is not sufficient for writing off.
For business merger through several deals, deals in a package will be treated as one deal with control right acquired for
accounting treatment; for deals not in a package, the capital reserve is adjusted based on the difference between the initial
cost of long-term equity investment and the sum of book value of long-term equity investment before merger and book
value of consideration payment for new shares. The retained earnings are adjusted if the capital reserve is not sufficient for
writing off. For equity investment held before merger, other comprehensive income recognized by the equity method,
financial instruments or calculation standards will not be subject to accounting treatment, and until the disposal of such
investment such accounting treatment is carried out on the same basis as the direct disposal of related assets and liabilities
by the invested party; other changes in owners' equity excluding net profit and loss, other comprehensive income and profit
distribution in the net assets of the invested party recognized by the equity accounting method will not be subject to
accounting treatment and is transferred to current profit and loss after the disposal of such investment.
iii. Business merger not under common control
The assets paid and the liabilities incurred or undertaken by the Company as the consideration on the date of merger are
calculated based on fair value. The difference between fair value and book value will be included in current profit and loss.
If the merger cost is higher than the fair value of the net identifiable assets of the acquired party acquired by merger, the
difference is recognized as goodwill. If the merger cost is lower than the fair value of the net identifiable assets of the
acquired party acquired by merger, the difference is included in current profit and loss.
For business merger through several deals, deals in a package will be treated as one deal with control right acquired for
accounting treatment; for deals not in a package, the sum of book value of long-term equity investment before merger and
new investment cost is treated as the initial cost of long-term equity investment on the date of merger. For equity investment
held before merger, other comprehensive income recognized with the equity accounting method, accounting treatment of
such investment is carried out on the same basis as the direct disposal of related assets and liabilities by the invested party.
If the equity investment held before merger is subject to recognition by financial instruments and accounting by measure
standards, the sum of book value of long-term equity investment on the date of merger and new investment cost is treated as
the initial cost of long-term equity investment on the date of merger. The difference between the fair value and book value
of the equity previously held and accumulative changes in fair value originally included in other comprehensive income are
transferred to the investment income of the period of the date of merger.
iv. Expenses incurred due to merger
The auditing, legal, appraisal and consulting, and other relevant direct fees incurred for business merger are included in
current profit and loss at occurrence. The transaction expenses of equity securities issued for business merger which are
directly attributable to equity transaction are deducted from the equity.
5. Preparation method of the consolidated financial statements
i. Consolidation scope
The scope of the consolidated financial statements of the Company is determined based on share-holding status, and all
subsidiaries (including single entities controlled by the Company) are included in the scope.
ii. Consolidation procedure
The Company prepares the consolidated financial statements based on the financial statements of its own and its
subsidiaries and other related materials. In the preparation of consolidated financial statements, the whole group is deemed
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
as an accounting entity. According to the recognition, calculation and presentation requirements of related accounting
standards and consistent accounting policies, the overall financial condition, operation results and cash flow are reflected.
The accounting policies and accounting period adopted by all subsidiaries included in the consolidation scope are consistent
with those of the Company. Otherwise, the Company shall make necessary adjustments according to its own accounting
policies and accounting period when preparing the consolidated financial statements.
During the consolidation, the influences of internal transactions between the Company and its subsidiaries and among the
subsidiaries on the consolidated balance sheet statement, the consolidated profit statement, the consolidated cash flow
statement and the consolidated statement on changes of owner's equity will be counteracted. If judgment on the same
transaction differs from the group perspective and with the Company or a subsidiary as the accounting entity, the transaction
shall be adjusted from the group perspective.
The owner's equity of subsidiaries, current net profit and loss and minority shares in current comprehensive income are
separately listed in the owner's equity of the consolidated balance sheet statement, net profit and total comprehensive
income of the consolidated profit statement respectively. If the current losses undertaken by minority shareholders of a
subsidiary exceed the owners' equity shared by minority shareholders of a subsidiary, the balance will be used to offset the
minority shareholders' equity.
For a subsidiary acquired by merger of enterprises under common control, its financial statements are adjusted based on the
book value of its assets and liabilities (including goodwill resulting from acquisition of this subsidiary) in the financial
statements of the ultimate controlling party.
For a subsidiary acquired by merger of enterprises not under common control, its financial statements are adjusted based on
the fair value of net identifiable assets on the date of acquisition.
(1) Expansion of subsidiaries or business
In case of expansion of subsidiaries or business due to merger of enterprises under common control, the opening amount of
the consolidated balance sheet is adjusted in the report period. The income, expenses and profits of the subsidiaries and
business from the beginning of merger to the end of the report period are included in the consolidated profit statement. The
cash flow of the subsidiaries from the beginning of merger to the end of the report period is included in the consolidated
cash flow statement and related items of comparative statements are also adjusted. The reporting entity after merger is
deemed to exist since the ultimate controlling party starts control.
If the Company exerts control on an invested party under common control due to additional investment, it is deemed that all
parties involved in merger make adjustments in the present condition since the ultimate controlling party starts control. For
the equity investment held before acquisition of control right of the acquiree, relevant income and loss, other comprehensive
income and other changes in net asset are recognized from the later one between the date of acquisition of the original
equity and the date of the acquirer and the acquiree under common control to the date of merger, which are used to offset
the opening retained earnings or current profit and loss respectively.
In the report period, in case of expansion of subsidiaries or business due to merger of enterprises not under common control,
the opening amount of the consolidated balance sheet is not adjusted. The income, expenses and profits of such subsidiaries
and business from the date of acquisition to the end of the report period are included in the consolidated profit statement.
The cash flow of such subsidiaries from the date of acquisition to the end of the report period is included in the consolidated
cash flow statement
If the Company exerts control on an invested party not under common control due to additional investment, the equity of
the acquiree held before the date of acquisition shall be re-measured based on its fair value on the date of acquisition, and
the difference between the fair value and book value of the equity shall be included in current investment income. If the
equity of the acquiree held before the date of acquisition is involved in other comprehensive income and other changes in
owner's equity except net profit and loss, other comprehensive income and profit distribution with the equity method, the
relevant other comprehensive income and other changes in owner's equity are included in current investment income,
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
excluding other comprehensive income due to re-measurement of changes in net liabilities and net assets in defined benefit
plans.
(2) Disposal of subsidiaries or business
1) General disposal method
If the Company disposes of a subsidiary in the report period, the income, expenses and profits of the subsidiary from the
beginning period to the disposal date are included in the consolidated profit statement and the cash flow of the subsidiary in
the same period is included in the consolidated cash flow statement.
If the Company loses control of its subsidiary due to disposal of part of equity investment or other reasons, the remaining
equity shall be re-measured at fair value on the day when the Company losses control of the subsidiary. The difference
between the sum of consideration acquired due to equity disposal & fair value of the remaining equity and the sum of net
assets to be enjoyed based on the original shareholding proportion since the date of acquisition or merger & goodwill is
included in the investment income in the period of loss of control. Other comprehensive income and other changes in
owner's equity except net profit and loss, other comprehensive income and profit distribution relevant to the equity
investment in any previous subsidiary are transferred to current investment income at the time of loss of control, excluding
other comprehensive income due to re-measurement of changes in net liabilities and net assets in defined benefit plans.
2) Disposal of subsidiaries by steps
If the Company disposes of equity investment in a subsidiary in several deals by steps until its loss of control and the terms
and conditions or economic influences of deals are consistent with the following case(s), several deals will be treated as a
package deal for accounting treatment.
A. Those deals are made at the same time or in consideration of mutual influences;
B. A complete business result can be achieved only with the deals as integrity;
C. The occurrence of one deal depends on the occurrence of at least one deal.
D. A single deal is uneconomical but the integration with other deals is economical.
If deals incurred for disposal of equity investment in a subsidiary until the loss of control belong to a package deal, the
Company treats all deals as one for accounting treatment. However, the difference between the consideration acquired from
every disposal and the net asset to be enjoyed the said subsidiary based on such equity investment before loss of control is
recognized as other comprehensive income of the consolidated financial statements and transferred to the current profit and
loss at the time of loss of control.
For deals not in a package, before loss of control, the accounting treatment is based on policies about disposal of part of
equity investment in a subsidiary in case of no loss of control while at the time of losing control, the accounting treatment is
based on general methods for disposing of such subsidiary.
(3) Acquisition of minority shares of subsidiary
Based on the difference between long-term equity investment acquired due to acquisition of minority shares and net assets
to be enjoyed from such subsidiary since the date of acquisition (or merger), the capital stock premium of the consolidated
balance sheet statement is adjusted. The retained earnings are adjusted if the capital stock premium is not sufficient for
writing off.
(4) Disposal of part of equity investment in a subsidiary in case of no loss of control
The difference between the consideration acquired due to disposal of party of long-term equity investment in a subsidiary
and net assets to be enjoyed from such subsidiary since the date of acquisition (or merger), the capital stock premium of the
consolidated balance sheet statement is adjusted. The retained earnings are adjusted if the capital stock premium is not
sufficient for writing off.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
6. Classification of joint arrangement and accounting treatment method of joint operation
i. Classification of joint arrangement
Based on the structure and legal form of joint arrangement, terms agreed in joint arrangement and other facts and condition,
the Company classifies joint arrangement into joint operation and joint venture.
Joint arrangement agreed not by individual entities is defined as joint operation. Joint arrangement agreed by individual
entities is generally defined as joint venture. If any joint arrangement satisfies any of the following conditions and conforms
to relevant laws and regulations with conclusive evidence, such joint arrangement is defined as joint operation:
(1) The legal form of joint arrangement shows that joint ventures share rights and obligations for assets and liabilities in
such arrangement.
(2) It is agreed in the terms of joint arrangement that joint ventures share rights and obligations for assets and liabilities in
such arrangement.
(3) Other facts and condition show that joint ventures share rights and obligations for assets and liabilities in such
arrangement. For example, joint ventures enjoy nearly all output relevant to such arrangement and settlement of liabilities in
such arrangement constantly depends on the support of joint ventures.
ii. Accounting treatment method of joint operation
The Company recognizes the following items in interest shares during joint operation, and carries out accounting treatment
in accordance with Accounting Standards for Business Enterprises:
(1) Recognizing assets held separately and assets shared based on shares;
(2) Recognizing liabilities undertaken separately and liabilities shared based on shares;
(3) Recognizing the income from sales of the share in joint operation output;
(4) Recognizing the income from sales of joint operation output based on shares;
(5) Recognizing the expenses individually incurred and expenses incurred by joint operation based on shares.
If the Company invests or sells assets (excluding assets that constitute business) to the joint operation, before such assets are
sold by the joint operation to the third party, only the part of profit and loss attributed to other parties in the joint operation
incurred by such transaction is recognized. If any impairment losses occur to the assets invested or sold in accordance with
Accounting Standards for Business Enterprises No. 8 - Asset Impairment, the Company recognizes the losses in full.
If the Company purchases assets from the joint operation, before such assets are sold to the third party, only the part of
profit and loss attributed to other parties in the joint operation incurred by such transaction is recognized. If any impairment
losses occur to the assets purchased in accordance with Accounting Standards for Business Enterprises No. 8 - Asset
Impairment, the Company recognizes the losses based on shares.
The Company enjoys no common control of the joint operation. If the Company enjoys assets in the joint operation and
undertakes liabilities in the joint operation, the Company shall still carry out accounting treatment based on the foregoing
principles. Otherwise, the Company shall carry out accounting treatment in accordance with Accounting Standards for
Business Enterprises.
7. Standards for determination of cash and cash equivalents
In the preparation of the cash flow statement, the cash on hand and the bank deposits available for payment at any time of
the Company are recognized as cash. The investments that meet four conditions at the same time, i.e. short term (due within
3 months since the date of purchase), strong liquidity, easiness in being converted into known cash, fairly small risk of value
fluctuation are recognized as cash equivalents.
8. Foreign currency businesses and translation of the financial statements in foreign currency
Foreign currency business
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
In the initial recognition, a foreign currency business transaction is converted to RMB for bookkeeping based on the spot
exchange rate at the date of transaction.
At the balance sheet date, monetary items in foreign currency are converted based on the spot exchange rate at the balance
sheet date. The exchange difference thus incurred is included in current profit and loss while the exchange difference
incurred by special foreign currency borrowings for acquisition and construction of assets eligible for capitalization is
treated with the principle of capitalization of borrowing costs. The non-monetary items in foreign currency measured by the
historical cost method are converted based on the spot exchange rate at the date of transaction, and the amount in the
recording currency is not changed.
Non-monetary items in foreign currency measured by fair value are converted based on the spot exchange rate at the date of
recognition of the fair value while the translation difference thus incurred is included in current profit and loss as profit and
loss from changes in fair value. For non-monetary items in foreign currency available for sales, the translation difference is
included in other comprehensive income.
Translation of foreign currency financial statements
In the balance sheet statement, assets and liabilities are converted based on the spot exchange rate at the date of balance
sheet statement, and items other than "undistributed profits" in the owner's equity are converted based on the spot exchange
rate. The income and expense in the profit statement are converted based on the spot exchange rate at the date of transaction.
The translation difference of foreign currency financial statements with the foregoing method is included in other
comprehensive income.
At the disposal of overseas business, the translation difference of foreign currency financial statements that is listed in other
comprehensive income of the balance sheet statement and relevant to such overseas business is transferred from other
comprehensive income to current profit and loss in the period of disposal. The equity proportion in overseas business is
reduced due to disposal of part of equity investment or other reasons but the control right on the overseas business remains,
the translation difference of foreign currency financial statements relevant to such overseas business is not transferred to
current profit and loss. At the disposal of part of equity investment in overseas business in the form of a joint venture or
associate, the translation difference of foreign currency financial statements relevant to such overseas business is transferred
to current profit and loss in the period of disposal based on the proportion of disposal.
9. Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
i. Classification of financial instruments
According to the contract terms and economic nature of financial instruments rather than in the legal form only, in
combination of the purposes of acquisition and holding of financial assets and undertaking of financial debts, the
management classifies financial assets and liabilities as follows: financial assets (or liabilities) measured based on fair value
with changes included in current profit and loss, held-to-maturity securities, accounts receivable, financial assets available
for sales, and other financial liabilities.
ii. Confirmation basis for and measurement method of financial instruments
(1) Financial assets (liabilities) measured by fair value and with changes included in the current gains and losses
Financial assets or liabilities measured by fair value with changes included in current profit and loss include transactional
financial assets or liabilities and financial assets or liabilities to be measured by fair value with changes included in the
current profit and loss by direct specification.
Transactional financial assets or liabilities refer to financial assets or liabilities that satisfy any of the following conditions:
1) Such financial assets or liabilities are acquired for the purpose of sales, repurchase or redemption in a short term;
2) Such financial assets or liabilities are part of identifiable financial instruments portfolio available for central management,
and objective evidence shows that the Company has recently managed the portfolio for short-term gains;
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
3) Such financial assets or liabilities belong to derivative financial instruments, excluding the designated derivative
instruments which are effective hedging instruments, derivative instruments for financial guarantee contracts, and derivative
instruments that are connected with equity instrument investments for which there is no quoted price in the active market,
whose fair value cannot be reliably measured, and which shall be settled by delivering the said equity instruments.
Financial assets or liabilities can be measured by fair value with changes included in the current profit and loss through
designation only when one of the following conditions is met.
1) Through such designation, inconsistency in recognition or measurement of profit and loss resulting from different
measurement basis of financial assets or liabilities can be eliminated or obviously reduced;
2) It has been set forth in formal written documents about risk management or investment strategy that such financial asset
portfolio, financial liability portfolio, or the portfolio of such financial assets or liabilities shall be managed, evaluated and
reported to key management based on fair value;
3) A mixed instrument with one and several embedded derivative instrument (s), unless the embedded derivative
instruments cause no major changes to the cash flow of such mixed instrument or shall not be separated from the derivative
instrument (s) obviously;
4) A mixed instrument with embedded derivative instrument (s) that needs to be separated but cannot be separately
measured at the time of acquisition or the subsequent balance sheet date.
The Company treats the fair value of financial assets or liabilities measured by fair value with changes included in the
current profit and loss at the time of acquisition as the initial recognized amount, including relevant transaction expenses in
the current profit and loss. The interests and cash dividends acquired during the period of holding are recognized as
investment income. At the time of disposal, the difference between the fair value and the initial amount entered in the
account is recognized as investment income and the profit and loss from changes in fair value are adjusted at the same time.
(2) Accounts receivable
For credit receivable due to the commodities sold or labor services provided by the Company and credit of other enterprises
held by the Company other than the credit of debt tools with quotes in an active market, including accounts receivable and
other receivables, the amount receivable in contracts or agreements from the purchaser is treated as the initial recognition
amount. For those of a financing nature, the current value is treated as the initial recognition amount.
At the time of collection or disposal, the difference between the amount acquired and the book value of such accounts
receivable are included in the current profit and loss.
(3) Held-to-maturity investment
Held-to-maturity investment refers to non-derivative financial assets with fixed maturity date and fixed or definite
collection amount which the Company may hold to maturity with clear intention and ability.
For held-to-maturity investment, the Company treats the sum of fair value at the time of acquisition (deducting bond
interests matured but not collected) and relevant transaction expenses as the initial recognition amount. During the period of
share-holding, the interest income is calculated and confirmed in accordance with the amortized and the actual interest rate,
which is recorded into the investment income. The actual interest rate is determined at the time of acquisition and remains
unchanged within the anticipated existence period or a shorter period applicable. At the time of disposal, the difference
between the price of acquisition and the book value of such investment is included in investment income.
If the amount of the held-to-maturity investment disposed of or re-classified as other financial assets is larger than the total
amount of all held-to-maturity investment before sale or reclassification, the remaining held-to-maturity investment shall be
re-classified as available-for-sale financial assets immediately after disposal or reclassification. On the reclassification date,
the difference between the book value and fair value of such investment is included in other comprehensive income, which
is transferred out at depreciation or recognition end of such available-for-sale financial assets and included in the current
profit and loss. The following cases can be excluded:
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
1) The sale or reclassification date is close to the expiry or redemption date of such investment (for example within three
months before the expiry date), and changes in interest rate have no significant impacts on the fair value of such investment.
2) The enterprise has recovered nearly all original principal with the repayment method specified in the contract.
3) Sale or reclassification arises from independent events that are beyond the control of the enterprise, expected not to recur,
and hard to be predicated.
(4) Available-for -sale financial assets
Available-for -sale financial assets refer to non-derivative financial assets designated at initial recognition and financial
assets other than other financial assets category.
For financial assets available for sale, the Company treats the sum of fair value at the time of acquisition (deducting bond
interests matured but not collected) and relevant transaction expenses as the initial recognition amount. The interests or cash
dividends obtained during the time of holding are recognized as investment income. Profit or loss from change in the fair
value of financial assets available for sale but excluding impairment loss and exchange difference of monetary financial
assets in foreign currency are directly included in other comprehensive incomes. At the time of disposal, the difference
between the price of acquisition and the book value of such financial assets is included in investment profit and loss. At the
same time, the amount of assets disposed originally included in the accumulative amount of changes in the fair value of
other comprehensive income is transferred to investment profit and loss.
Equity instruments with no quotes in the active market and with fair value not reliably measured and derivative instruments
that are connected with the said equity instruments and settled by delivery of the said equity instruments are measured by
cost.
(5) Other financial liabilities
The sum of the fair value of such assets and relevant transaction expenses is taken as the initial recognition amount. The
amortized cost is adopted in the subsequent measurement.
iii. Recognition basis and measurement method of financial assets transfer
In case of financial assets transfer of the Company, if almost all risks and returns in the ownership rights of financial assets
are transferred to the assignee, the recognition of such financial assets is terminated, and if almost all risks and returns in the
ownership rights of such financial assets are retained, the recognition of such financial assets is not terminated.
In the judgment whether a financial asset transfer meets the foregoing conditions for termination of its recognition, the
principle of more focus on substance than form is adopted. The Company divides financial assets transfer into the complete
and the partial transfer. Where the complete transfer of financial assets meets the conditions for termination of recognition,
the difference between the following two amounts is included in the current profit and loss.
(1) Book value of the transferred financial assets;
(1) The sum of consideration acquired due to transfer and the accumulative amount of changes in fair value originally
included in owners' equity (involving the case where the transferred financial assets are the financial assets available for
sale).
If the partial transfer of financial assets meet conditions for termination of recognition, the part with its recognition
terminated and that with its recognition not terminated, among the book value of all the transferred financial assets, are
apportioned separately based on their relevant fair value while the difference between the following two amounts is
included in the current profit and loss.
(1) Book value of the part with its recognition terminated;
(2) The sum of consideration of the part with its recognition terminated and the amount of the part with its recognition
terminated originally included in the accumulative amount of changes in the fair value of owners' equity (involving the case
where the transferred financial assets are the financial assets available for sale).
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
In case that financial assets transfer does not meet the conditions for termination of recognition, the recognition of such
financial assets is continued. The consideration acquired is recognized as a financial liability.
iv. Conditions for termination of recognition of financial liabilities
If current obligations for a financial liability are discharged wholly or partially, the recognition of the financial liability is
terminated wholly or partially. If the Company signs an agreement with the creditor to substitute an existing financial
liability with a new financial liability and the contract terms about the new liability and the existing liability are inconsistent,
the recognition of the existing financial liability is terminated and the new financial liability is recognized at the same time.
If material alterations have been made to contract terms of the existing financial liability wholly or partially, the recognition
of the existing liability is wholly or partially terminated and, in the meantime, the liability after alterations is recognized as a
new financial liability.
If the confirmation of all or a part of a financial liability is terminated, the difference between the book value of the liability
with its confirmation terminated and the consideration (including non-cash assets transferred or the new liability assumed)
is included in current gains and losses.
If the Company repurchases part of a financial liability, the total book value of such liability is allocated on the date of
purchase based on the relative fair value of the part with its recognition continued and that with its recognition terminated.
The difference between the book value allocated to the part with its recognition terminated and the consideration (including
non-cash assets or the new liability) is included in the current profit and loss.
v. Methods for the determination of the fair value of financial assets and liabilities
For financial assets and liabilities that exist in an active market, the Company determines their fair value based on the
quotation in the active market. For financial assets initially acquired or derivative financial assets or liabilities undertaken,
the Company determines their fair value based on the market price. For financial assets and liabilities that do not exist in an
active market, their fair values are determined with appraisal techniques. In appraisal, the Company adopts applicable
appraisal techniques in the current case with sufficient data and other information support, chooses the input values that are
consistent with features of assets or liabilities taken into consideration by market participants in relevant transactions, and
makes priority use of relevant observable input values. In case that relevant observable input values cannot be obtained or it
is unpractical to obtain them, unobservable input values will be used.
vi. Accrual of impairment provision for financial assets (excluding accounts receivable)
The Company shall verify the book value of financial assets measured by fair value with changes included in the current
profit and loss at the balance sheet date. If any objective evidence shows impairment of such financial assets, an impairment
provision shall be made.
Objective evidence for impairment of such financial assets includes but is not limited to:
(1) A serious financial difficulty occurs to the issuer or debtor;
(2) The debtor breaches any contract terms, for example, fails to pay or delays the payment of interests or the principal;
(3) The creditor makes any concession to the debtor which is in financial difficulties due to economic or legal factors;
(4) The debtor will probably become bankrupt or carry out other financial reorganizations;
(5) The financial asset can no longer continue to be traded in the active market due to serious financial difficulties of the
issuer;
(6) It is impossible to identify whether the cash flow of a certain asset within a certain combination of financial assets has
decreased or not. But after an overall appraisal according to the public data available, it is found that the predicted future
cash flow of the said combination of financial assets has indeed decreased since it was initially recognized and such
decrease can be measured, for example, the ability of the debtor of the said combination of financial assets worsens
gradually, the unemployment rate of the country or region where the debtor is situated increases, the prices of the region
where the guaranty is situated are obviously dropping, or the industrial sector concerned is in slump;
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
(7) Any seriously disadvantageous change has occurred to technical, market, economic or legal environment wherein the
issuer operates its business, which makes the investor of an equity instrument unable to withdraw its investment cost;
(8) Where the fair value of the equity instrument investment drops significantly or not temporarily;
Specific impairment methods of financial assets are as follows:
(1) Impairment provision for financial assets available for sale
The Company shall appraise the impairment loss of each financial asset with the specific identification method at the
balance sheet date. Where the fair value of the equity instrument investment drops significantly or not temporarily, it is an
objective evidence for impairment of equity instruments available for sale. In terms of the specific quantitative criterion, if
the fair value of such equity instrument investment is lower than over 50% (including 50%) of its cost or is lower than its
cost for over 12 months (including 2 months) consecutively, it indicates that such asset is impaired.
When a financial asset available for sale is impaired, even if the recognition of the financial asset has not been terminated,
the accumulative losses arising from decrease in the fair value of the owner's equity which was directly included in other
comprehensive income shall be transferred out and included in the current profit and loss. The accumulative losses that are
transferred out shall be the balance between the initial costs of the financial asset available for sale and the principals as
taken back, the current fair value and the impairment-related losses as was included in the current profit and loss.
As for the debt instruments available for sale whose impairment losses have been recognized, if, within the accounting
period thereafter, the fair value has risen and such instruments are objectively related to the subsequent events that occur
after the original impairment losses were recognized, the originally recognized impairment losses shall be reversed and
included in the current profit and loss. The impairment loss of equity instruments available for sale shall be reversed when
the value of such equity instruments rebound. However, for equity instruments investment with no quotes in the active
market and with fair value not reliably measured and derivative instruments that are connected with the said equity
instruments and settled by delivery of the said equity instruments, the impairment loss shall not be reversed.
(2) Impairment provision for held-to-maturity investments
If any objective evidence shows impairment of held-to-maturity investments, the impairment loss shall be calculated based
on the difference between the book value of those investments and the current value of the expected future cash flow. If any
evidence indicates that the investment value has recovered after provision, the originally recognized impairment loss can be
reversed and included in the current profit and loss. However, the reversed book value shall not exceed the amortized cost of
such financial assets at the date of reversal in case that the impairment provision has not been made.
vii. Counteraction of financial assets and liabilities
Financial assets and liabilities are separately listed in the balance sheet statement and not counteracted. However, if the
following conditions are satisfied at the same time, the balance after counteraction may be listed in the balance sheet
statement.
(1) The Company has the legal right to counteract the recognized amount which is currently enforceable.
(2) The Company plans to settle in net amount or realize such financial assets and liquidate such financial liabilities at the
same time.
10. Accounts receivable
(1) Accounts receivable with significant single amount and single provision for bad debts
Criterion or amount limit for determining a significant single amount Top five accounts receivable
Carry out independent impairment testing. If the current value of the
Accounts receivable with significant single amount and single provision expected future cash flow is less than its book value, a provision shall
for bad liabilities be made for the bad liabilities which will be included in the current
profit and loss. Accounts receivable with no impairment by test shall be
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
included in the bad debt provision for a certain combination.
(2) Other receivables with bad debt provision accrued based on credit risk feature combinations
Name of combination Accrual method for making bad debts provision
Combination of aging analysis method Aging analysis method
Combination of specific object Other method
Bad debt provision made using the aging analysis method
√ Applicable □ Not applicable
Provision proportion of accounts receivable Provision proportion of other accounts
Aging
(%) receivable (%)
1-2 years 5.00% 5.00%
2-3 years 10.00% 10.00%
Over 3 years 20.00% 20.00%
Accounts receivable in the portfolio, for which the bad debt provision was accrued by the Percentage of Total Accounts Receivable Outstanding
method.
□ Applicable √ Not applicable
Accounts receivable in the portfolio, for which the bad debt provision was accrued by other methods.
□ Applicable √ Not applicable
(3) Other receivables with an insignificant amount individually, for which bad debt provision is separately accrued
The reason for single provision for bad debts is that any objective
Reason of making bad debts provision for a single amount evidence indicates that the Company is unable to recover the accounts
receivable according to the original terms.
Accrual method for bad debt provision: The difference between the
Accrual method for making bad debts provision expected future cash flow and its book value is accrued for bad debt
provision.
11. Inventory
i. Classification of inventory
Inventory refers to finished products or commodities held for sale by the Company in daily activities, products in process,
and materials consumed in the production or labor service process. It mainly includes raw materials, circulating materials,
commissioned processing materials, products in process, semi-finished goods, finished products (stock goods), delivered
goods, development costs, product development, etc.
Development costs refer to properties not completed for sale purposes. Lands to be developed refer to the land which is
purchased and planned for developed products after its completion. Developed products refer to properties which have been
completed and are to be sold. In the overall development of a project, lands to be developed are transferred to development
costs. In the development by phases, the land developed in phases is transferred to development costs while the land not
developed remains in the land to be developed.
ii. Pricing method of inventory
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Initial measurement will be carried out at the time of acquisition of the inventory based on its costs, including procurement
cost, processing cost and other costs. The pricing of the inventory is based on the weighted-average method at the time of
delivery.
iii. Determination basis for net realizable value of inventory and accrual method for inventory depreciation provision
After a complete check on the inventory at the end of the period, the inventory depreciation provision is accrued or adjusted
based on the lower one between the inventory cost and the net realizable value. The net realizable value of commodity
inventory directly for sale including finished products, stock goods and materials for sale is determined by the estimated
selling price of such inventory minus estimated selling expenses and relevant taxes during production and operation. The
net realizable value of material inventory to be processed is determined by the estimated selling price of the finished
product minus estimated cost to be incurred until completion, estimated selling expenses and relevant taxes during
production and operation. The net realizable value of inventory held for fulfilling sales contract or labor service contract is
calculated based on the contract price. If quantity of inventories held is more than the ordered quantity in the sales contract,
the net realizable value of the inventory for the excess part is calculated based on general selling price.
At the end of the period, the inventory depreciation provision is accrued based on separate items. However, for inventories
in large quantity at low unit price, the depreciation provision is accrued based on types of inventories. For inventories that
are related to product series produced and sold in the same area for same or similar final use or purpose and difficult to be
measured separately from other items, inventory depreciation provision is consolidated for accrual.
Where factors that caused decrease in value of inventory disappear, the amount written down shall be recovered and written
back from the accrued inventory depreciation provision. The amount written back shall be included in the current profit and
loss.
iv. Inventory system
The perpetual inventory system is adopted.
v. Amortization method of low-value consumables and packages
(1) For low value consumables, the one-off amortization method is adopted.
(2) For packaging materials, the one-off amortization method is adopted
vi. Accounting method of land for development
The expenses incurred by pure land development project shall constitute the land development cost alone.
For projects with overall development of property, the expenses with definite payers are generally amortized to the cost of a
commodity house based on the actual area.
vii. Accounting method of public facility expenses
For public facilities that cannot be transferred with compensation, the allocation standard is determined based on the benefit
ratio and the facilities are included in the cost of the commodity house.
For public facilities that can be transferred with compensation, the supporting facilities are cost accounting objects and
included in the cost incurred.
viii. Accounting method of the maintenance fund
According to local provisions of the development project, the maintenance fund is collected from the house purchaser when
the developed product is sold (or pre-sold) or included in the development cost, and submitted to the maintenance fund
management department.
ix. Accounting method of the warranty deposit
According to provisions in the construction contract, the warranty deposit is retained from the project fund of the
construction organization. Maintenance expenses incurred in the warranty period of a developed product can be used to
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
offset the warranty deposit. When the warranty period expires, the balance shall be returned to the construction
organization.
12. Held-for-sale assets
i. Recognition standard for held-for-sale assets
The corporate integral part (or non-current asset) that satisfies the following conditions is recognized as an integral part of
held-for-sale assets.
(1) The integral part must be available for sale under its current status only according to conventional terms on sale of such
integral part.
(2) The enterprise has made resolutions concerning disposal of such integral part. For those requiring approval of
shareholders, approval of the general meeting of shareholders or other power organs has been gained.
(3) The enterprise and the transferee have entered into an irrevocable transfer agreement.
(4) Such transfer will be completed within one year.
ii. Accounting method of held-for-sale assets
For a fixed asset held for sale, the Company adjusts the estimated net residual value of such fixed asset which reflects the
balance between the fair value and disposal expense. If a fixed asset does not satisfy held-for-sale conditions, the balance
between the original book value of such fixed asset and the estimated net residual value after adjustment shall be treated as
asset depreciation and included in the current profit and loss. The fixed asset held for sale is not subject to accrual of
depreciation or amortization, and is measured by the lower one between the book value and the result after the disposal
expense is deducted from the fair value.
The foregoing method also applies to equity investment, intangible assets, and other non-current assets that satisfy
held-for-sale conditions. However, deferred tax assets, financial assets regulated in the Enterprise Accounting Standard No.
22 - Financial Instrument Recognition and Measurement, investment properties and biological assets measured by the fair
value, and contract rights conferred by the insurance contract are excluded.
13. Long-term equity investment
i. Determination of the investment cost
(1) For the specific accounting policy for long-term equity investment arising from business merger, see Note 4 (4)
accounting method for business merger under or not under common control.
Long-term equity investment obtained in other ways
(2) The actual payment is taken as the initial investment cost of the long-term equity investment obtained by cash. The
initial investment cost includes expenses, taxes, and other necessary expenditure directly related to long-term equity
investment.
The fair value of the issued equity securities is taken as the initial investment cost of the long-term equity investment
obtained by issue of equity securities. For issue or acquisition of the enterprise's own equity instruments that are directly
attributable to equity transaction, transaction expenses are deducted from the equity.
Under the premises that the non-monetary assets exchange is of commercial nature and that the fair value of the assets
received and given out in the exchange can be measured reliably, the initial investment cost of the long-term equity
investment received in non-monetary assets exchange is determined on the basis of the fair value of the assets given out,
unless there are definite evidences that the fair value of the received assets is more reliable. For the non-monetary assets
exchange that do not meet the above premises, the book value of the received assets and relevant taxes payable is taken as
the cost of the long-term equity investment.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
The initial investment cost of the long-term equity investment obtained through debt restructuring is determined according
to its fair value.
ii. Measurement after recognition and profit and loss recognition
(1) Cost method
The Company conducts accounting with the cost method for long-term equity investment controlled by the investee, enter
the initial investment cost to the account book, and add or recover investment to adjust the cost of long-term equity
investment.
Under equity method, the Company recognizes investment income according to the cash dividends or profits enjoyed by the
Company, for which the investee declares to distribute, except the actual amount paid when investment is acquired and cash
dividends and profits included in the consideration and declared but yet to be distributed.
(2) Equity method
The Company conducts accounting with the equity method for long-term equity investment of joint ventures or associates.
The equity investment part of associated enterprises held indirectly via the venture capital organization, mutual fund, trust
company, or similar entities including the unit-linked insurance foundation is measured by fair value and its changes are
included in the profit and loss.
If the initial cost of long-term equity investment is larger than the fair value of identifiable net assets of the investee to be
enjoyed by the Company at investment, the initial investment cost of the long-term equity investment is not adjusted. If the
former is smaller than the latter, the difference is included in the current profit and loss.
After the Company obtains long-term equity investment, the investment income and other comprehensive income are
recognized respectively based on the net profit and loss and other comprehensive income of the investee to be enjoyed by
the Company, and the book value of long-term equity investment is adjusted. The part to be enjoyed by the Company is
calculated based on the profit or cash dividend declared by the investee, and the book value of long-term equity investment
is reduced accordingly. For other changes in owner's equity excluding net profit and loss, other comprehensive income, and
profit distribution related to equity investment, the book value of long-term equity investment adjusted and included in
owner's equity.
When recognizing the net profit and loss of the investee to be enjoyed, the Company shall adjust the net profit of the
investee before recognition based on the fair value of identifiable net assets of the investee at investment. The unrealized
profit or loss of internal transactions between the Company and the joint venture or associate is calculated based on the ratio
to be enjoyed, and the part attributable to the Company is offset. The profit or loss from investment is recognized on this
basis.
Where the Company recognizes the due share of the losses incurred by the investee under the equity method, the following
sequence is adopted: First, the book value of the long-term equity investment is offset. Second, if the book value of the
long-term equity investment is not sufficient for the offsetting, the investment loss should continue to be recognized within
the limit of the book value of other long-term equity that practically constitutes net investments in the investee and the book
values of long-term accounts receivable and others are offset. Finally, if the enterprise still bears additional obligations as
agreed in the investment contract or agreement after the above processing, liabilities are recognized according to the
anticipated obligations to be borne and included in current investment loss.
Where the investee realizes profits in the later periods, the Company should make accounting treatment in the reversed
sequence against the above after deducting the shared loss not yet recognized, reduce the book balance of the recognized
anticipated liabilities, restore other long-term equity that practically constitutes net investments in the investee and the book
value of the long-term equity investment, and recognize investment income at the same time.
iii. Conversion of accounting methods of long-term equity investment
(1) Conversion from fair value method to equity method
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
The equity investment originally held by the Company that involves no control, common control, or significant influence
over the investee is recognized based on the financial instrument and subject to accounting treatment according to
accounting standards. If due to additional investment, the equity investment involves significant influence or common
control rather than control over the investee, the sum of the fair value of the original equity investment calculated according
to the Enterprise Accounting Standard No. 22 - Financial Instrument Recognition and Measurement and the new investment
cost is treated as the original investment cost subject to accounting with the equity method.
The difference between the fair value and book value of the original equity investment (classified as the available-for-sale
asset) and accumulative changes in fair value originally included in other comprehensive income are transferred to the
current profit and loss subject to accounting with the equity method.
The original investment cost is less than the fair value of the identifiable net asset of the investee to be enjoyed by the
Company calculated based on the new shareholding ratio after additional investment. The book value of long-term equity
investment is adjusted based on the difference, and included in the current non-operating income.
(2) Conversion from fair value method or equity method to cost method
The equity investment originally held by the Company that involves no control, common control, or significant influence
over the investee or long-term equity investment in joint ventures or associates is recognized based on the financial
instrument and subject to accounting treatment according to accounting standards. If due to additional investment, the
equity investment involves significant control over the investee not under common control, the sum of the fair value of the
original equity investment calculated and the new investment cost is treated as the original investment cost subject to
accounting with the cost method when the Company prepares some financial statements.
If other comprehensive income of the equity investment held before the purchase date is subject to accounting with the
equity method, such investment is subject to accounting treatment on the same basis where the investee directly disposes of
related assets or liabilities.
If the equity investment held before the purchase date is subject to accounting treatment according to the Enterprise
Accounting Standard No. 22 - Financial Instrument Recognition and Measurement, accumulative changes in fair value
originally included in other comprehensive income are transferred to the current profit and loss subject to accounting with
the cost method.
(3) Conversion from equity method to fair value method
If the Company loses common control or significant influence over the investee due to disposal of partial equity investment,
the residual equity after disposal is subject to accounting according to the Enterprise Accounting Standard No. 22 -
Financial Instrument Recognition and Measurement. The difference between the fair value and book value on the date of
loss of common control or significant influence is included in the current profit and loss.
If other comprehensive income of the original equity investment is subject to accounting with the equity method, when the
equity method is abandoned, such investment is subject to accounting treatment on the same basis where the investee
directly disposes of related assets or liabilities.
(4) Conversion from cost method to equity method
If the Company loses control of the investee due to disposal of partial equity investment, the residual equity after disposal
with common control or significant influence over the investee is subject to accounting with the equity method, and such
residual equity is deemed to have adjusted subject to the equity method upon acquisition.
(5) Conversion from cost method to fair value method
If the Company loses control on the investee due to disposal of partial equity investment, the residual equity after disposal is
subject to accounting according to the Enterprise Accounting Standard No. 22 - Financial Instrument Recognition and
Measurement. The difference between the fair value and book value on the date of loss of control is included in the current
profit and loss when the Company prepares some financial statements.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
iv. Disposal of long-term equity investment
The difference between the book value and actual price of long-term equity investment is included in the current profit and
loss. If long-term equity investment is subject to accounting with the equity method, the part originally included in other
comprehensive income is subject to accounting treatment pro rata on the same basis where the investee directly disposes of
related assets or liabilities.
If the terms and conditions or economic influences of deals involved in disposal of the equity investment in a subsidiary are
consistent with the following case(s), several deals will be processed as a package deal for accounting treatment.
(1) Those deals are made at the same time or in consideration of mutual influences;
(2) A complete business result can be achieved only with the deals as integrity;
(3) The occurrence of one transaction depends on the occurrence of at least one transaction.
(4) A single deal is uneconomical but the integration with other deals is economical.
If the Company loses control of a subsidiary due to disposal of partial equity investment or other reasons which does not
belong to a package deal, accounting treatment of the individual financial statement and consolidated financial statement is
handled through differentiation.
(1) In the individual financial statement, the difference between the book value and actual price of the equity investment
disposed of is included in the current profit and loss. The residual equity after disposal with common control or significant
influence over the investee is subject to accounting with the equity method, and such residual equity is deemed to have
adjusted subject to the equity method upon acquisition. The residual equity after disposal without common control or
significant influence over the investee is subject to accounting treatment according to the Enterprise Accounting Standard
No. 22 - Financial Instrument Recognition and Measurement. The difference between the fair value and book value on the
date of loss of control is included in the current profit and loss.
(2) In the consolidated financial statement, for deals before the Company loses control of a subsidiary, based on the
difference between the consideration acquired due to disposal of party of long-term equity investment in a subsidiary and
net assets to be enjoyed from such subsidiary since the date of acquisition or merger, the capital reserve (share premium) is
adjusted. The retained earnings are adjusted if the capital reserve is not sufficient for writing off. The residual equity is
re-measured based on the fair value on the date of loss of control. (Consideration received in connection with equity
disposal + Fair value of remaining equity – Net assets that are calculated based on the original shareholding proportion
since the day of acquisition) shall be included in the investment income in the period when the Company loses control of
the subsidiary. Other comprehensive income in connection with the subsidiary's equity investment shall be transferred the
current investment income when the Company loses control of the subsidiary.
If deals incurred for disposal of equity investment in a subsidiary until the loss of control belong to a package deal, the
Company treats all deals as one deal for accounting treatment. Accounting treatment of the individual financial statement
and consolidated financial statement is handled through differentiation.
(1) In the individual financial statement, the difference between the consideration acquired from each disposal and the book
value of long-term equity investment before loss of control is recognized as other comprehensive income and transferred to
the current profit and loss at the time of loss of control.
(2) In the consolidated financial statement, the difference between the consideration acquired from each disposal and the net
asset of the subsidiary to be enjoyed by the Company before loss of control is recognized as other comprehensive income
and transferred to the current profit and loss at the time of loss of control.
Criteria for common control and significant influence
If the Company and the other participants jointly control an arrangement and decision-making with significant influences
over the returns of such arrangement as agreed, joint control exists only with unanimous consent from participants sharing
control. The Company and other participants shares control of the arrangement, and such arrangement is joint arrangement.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
If a joint arrangement is achieved through a single entity. If the Company has rights to the net asset of the single entity
according to related agreement, the single entity is a joint venture and the equity method applies. If the Company has no
rights to the net asset of the single entity according to related agreement, the single entity belongs to joint operation. The
Company confirms items related to the share of interests in the joint operation and conduct accounting treatment according
to provisions of the Enterprise Accounting Standard.
Significant influence refers to the case where the investor has the power to participate in financial and operating policy
decisions of an investee but cannot control or jointly control of those polices). The existence of significant influence by the
Company is evidenced in one or more of the following ways based on all facts and circumstances: (1) representation on the
board of directors or equivalent governing body of the investee; (2) participation in the financial and operating
policy-making process; (3) material transactions between the Company and the investee; (4) interchange of managerial
personnel; (5) provision of essential technical information.
14. Investment properties
Measurement mode of investment properties
Measurement of cost method
Depreciation and amortization
Investment property refers to the property held for earning rental or increasing the value of capital, including the right to use
of the rented land, the right to use of the land held for transfer after the value increases, and the rented building.
The Company uses the cost of investment properties as entry value. The cost of purchased investment properties includes
the purchase price, relevant taxes, and other expenses directly relegated to the asset. The cost of a self-built investment real
estate consists of the necessary expenses for building the asset to the expected condition for use.
The Company conducts measurement after recognition to the investment properties using the cost pattern, and makes
accrual depreciation or amortization for buildings and land use rights based on their expected service life and salvage value.
The following table lists the expected service life, net salvage value, and annual depreciation (amortization) rate of
investment properties:
Class Expected service life Expected salvage value Annual depreciation
(amortization) rate
Houses and buildings 20-40 5% 4.75%-2.38%
When the purpose of investment properties changes to self-use, the Company shall convert the investment properties to
fixed or intangible assets since the day of change. When the real estate with the right to self-use is changed for generating
rents or capital appreciation, the Company shall convert fixed or intangible assets to investment properties since the day of
change. The book value of the real estate prior to the conversion shall be entry value after conversion.
If investment properties are disposed of, or if they withdraw permanently from use and if no economic benefit will be
obtained from the disposal, the recognition of them as investment properties shall be terminated. When an enterprise sells or
transfers or discards any investment properties, or when any investment properties of an enterprise is damaged or destroyed,
the enterprise shall deduct the book value of the investment properties as well as the relevant taxes from the disposal income,
and include the amount in the current profit and loss.
15. Fixed assets
(1) Identification conditions
Fixed assets refer to the tangible assets held for the purpose of the manufacture of commodities, provision of labor services,
lease or operation and management with a term of use exceeding one year. Fixed assets can be identified when meeting the
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
following conditions: A. Economic interest relevant to the fixed assets is likely to flow into the enterprise; B. The cost of the
fixed assets can be reliably measured.
(2) Depreciation method
Class Depreciation method Depreciation life Residual value rate Annual depreciation rate
Houses and buildings Straight-line method 20-40 5 4.75-2.38
Machinery equipment Straight-line method 5-10 5 19.00-9.50
Electronic equipment Straight-line method 5-10 5 19.00-9.50
Transportation equipment Straight-line method 5-10 5 19.00-9.50
Other equipment Straight-line method 5-10 5 19.00-9.50
(3) Recognition basis and pricing method of the fixed assets acquired under finance leases
The Fixed assets rented by the Company can be identified as the fixed assets under financing lease when meeting one or
several criteria as follows: A. When the lease term is due the proprietary of the leased property is transferred to the
Company. B. The Company has the option to buy the leased asset at a price which is expected to be far lower than the fair
value of the leased asset at the date when the option becomes exercisable. Thus, on the lease beginning date, it can be
reasonably determined that the option will be exercised. C. Even if the ownership of the asset is not transferred, the lease
term covers the major part of the useful life of the leased asset. D. The current value of the minimum lease payment that is
paid by the Company on the lease beginning date amounts to substantially all of the fair value of the leased asset on the
lease beginning date. E. The leased assets are of a special nature that only the Company can use them without making major
modifications. The lessee shall record the smaller one of the fair value of the leased asset and the current value of the
minimum lease payments on the lease beginning date as the entry value in an account, recognize the amount of the
minimum lease payments as the entry in an account of long-term account payable, and treat the balance between the
recorded amount of the leased asset and the long-term account payable as unrecognized financing charges. The initial direct
costs such as commissions, attorney's fees, traveling expenses and stamp duties directly attributable to the leased item
incurred during the process of lease negotiating and lease contract signing shall be included in the asset value of the current
period. The unrecognized financing charge shall be amortized to each period during the lease term. In calculating the
depreciation of a leased asset, the Company adopts a depreciation policy for leased assets consistent with that for
depreciable assets which are owned by the lessee. If it is reasonably certain that the leasee will obtain the ownership of the
leased asset when the lease expires, the leased asset shall be fully depreciated over its service life. If it is not reasonably
certain that the lessee will obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be
fully depreciated over the shorter one of the lease term or its service life.
16. Construction in progress
i. Type of construction in progress
The construction in progress carried out by the Company shall be valued according to its actual cost which is composed of
all necessary expenses incurred for bringing the asset to the expected conditions for use, including material costs, labor
costs, relevant taxes, borrowing costs eligible for capitalization, and indirect expenses eligible for amortization. Cost
accounting for the construction in progress of the Company shall be performed based on projects.
ii. Standards and time points for the construction in progress being carried forward to fixed assets
For a construction in progress, all expenses during the construction till the desired usable status of the asset is reached are
taken as the recorded value of the fixed asset. If a construction in progress has reached the desired usable status but has not
conducted final accounting, it is transferred into fixed assets when it reaches the desired usable status, according to the
estimated value based on project budget, construction cost or actual cost; in the meantime, depreciation is accrued according
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
to the Company's depreciation policies for fixed assets; when the final accounting is conducted the temporarily estimated
value is adjusted according to the actual cost while the accrued depreciation amount is not adjusted.
17. Borrowing costs
i. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred by the Company can be directly attributable to the purchase, building or production of
the assets that meet the conditions of capitalization, such assets are capitalized and included in relevant assets cost. Other
borrowing costs are recognized as expenses according to the incurred amount at the time of occurrence and included in
current profit and loss.
The assets that meet the conditions of capitalization refer to the assets such as fixed assets, investment property and
inventory that can reach the anticipated usable or salable status only after a considerable time of purchase, building or
production activities.
The borrowing costs may be capitalized when all of the following conditions are met:
(1) The assets expenditure has already incurred, including that incurred in the form of cash payment, non-monetary assets
transfer or bearing of debts with interests for the purchase, building or production of the assets that meet the conditions of
capitalization.
(2) The borrowing costs have already been incurred.
(3) The construction or production activities necessary for putting the assets into a usable or salable status have already
started.
ii. Capitalization term of borrowing costs
The capitalization term refers to the period between the start time point and the end time port of the capitalization of the
borrowing costs, excluding the period in which the capitalization is suspended.
Where the purchase, building or production of the assets that meet the conditions of capitalization has put such assets into
the anticipated usable or salable status, the capitalization of the borrowing costs is stopped.
Where part of the projects in the purchase, building or production of the assets that meet the conditions of capitalization
have been completed and reached the anticipated usable or salable status, the capitalization of the borrowing costs of such
part of the assets is stopped.
Where different parts of the assets purchased, built or produced have been completed but cannot be used or sold till the
whole assets have been completed, the capitalization of the borrowing costs is stopped when the whole assets are
completed.
iii. Suspension period of capitalization
Where abnormal discontinuation has occurred in the purchase, building or production of the assets that meet the conditions
of capitalization and the time of discontinuation exceeds three months consecutively, the capitalization of the borrowing
costs is suspended. If the discontinuation is a necessary procedure in the process during which the assets purchased or
produced, which meet the conditions of capitalization, reach the usable or salable status, the capitalization of the borrowing
costs is continued. The borrowing costs occurring in the suspension period are recognized as current profit and loss and the
capitalization is continued until the purchasing and production activities of the assets are restarted.
iv. Calculation method of the amount of borrowing costs capitalization
The interest expenses of special loans (with the interest income of the unused borrowed funds deposited in the bank or the
investment income obtained from temporary investment deducted) and relevant auxiliary expenses are capitalized before the
assets that meet the conditions of capitalization, purchased, built or produced with such loans, reach the anticipated usable
or salable status.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
The amount of the interests of common loans that are capitalized is calculated and determined by the weighted average of
the accumulative parts of the assets expenditure exceeding special loans multiplied by the capitalization rate of common
loans. The capitalization rate is determined according to the weighted average interest rate of common loans.
Where the loans involve discount or premium, the amount of discount or premium to be amortized in each accounting
period is determined in accordance with the actual interest rate method and the amount of interests of each period should
also be adjusted.
18. Intangible assets
(1) Method of costing, service life and devaluation test
An intangible asset refers to an identifiable non-monetary asset without physical substance which is possessed or controlled
by the Company, including purchased software and land use rights.
i. Initial measurement of intangible assets
The cost of the intangible assets purchased from outside includes purchase price money, relevant taxes and other expenses
incurred due to putting such assets to the anticipated use that can be directly attributed to such assets. Where the price
money of the purchased intangible assets is paid on a deferred basis within a term exceeding regular credit conditions and
actually of a financing nature, the cost of the intangible assets is determined on the basis of the current value of the price
money in purchase.
The entry value in the account of the fixed assets obtained from debtors for the repayment of liabilities in debt restructuring
is determined on the basis of the fair value of the fixed assets. The difference between the book value of debt restructuring
and the fair value of the fixed assets used for the repayment of liabilities is included in the current profit and loss.
Under the premises that the non-monetary assets exchange is of commercial nature and that the fair value of the assets
received and given out in the exchange can be measured reliably, the initial investment cost of the long-term equity
investment received in non-monetary assets exchange is determined on the basis of the fair value of the assets given out,
unless there are definite evidences that the fair value of the received assets is more reliable. For the non-monetary assets
exchange that do not meet the above premises, the book value of the received assets and relevant taxes payable is taken as
the cost of the long-term equity investment.
The recorded value in the account of the intangible assets obtained by the merger of the enterprises under the control of a
same entity is determined according to the book value of the merged party. The recorded value in the account of the
intangible assets obtained by the merger of the enterprises under the control of different entities is determined according to
the fair value.
The cost of the intangible assets formed through internal R&D activities includes: the cost of materials and labor consumed
in the development of such intangible assets, registration fee, the amortization of other patent rights and franchises used in
the development process and the interests expenses that meet the conditions of capitalization, and other direct expenses
incurred due to putting such intangible assets into the anticipated use.
2. Subsequent measurement of intangible assets
When the Company acquires intangible assets, the Company analyzes and determines the service life and classifies
intangible assets into intangible assets with limited service life and intangible assets with uncertain service life.
1) Intangible assets with limited service life
The intangible assets with limited service life are amortized based on straight-line method in the period when the assets
bring economic benefits to the enterprise. The estimated service life and basis of intangible assets with limited service life
are as follows:
Item Estimated service life Basis
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Outsourced software 5 Benefit period
Land use right 50 Benefit period
At the end of each year, the service life and amortization method of intangible assets with limited service life are rechecked
and an adjustment is made if the service life differs from the original estimated service life.
At the end of the current period, the service life and amortization method of the intangible assets are the same as the last
year.
(2) Accounting policy for internal R&D expenditure
Research phase: a phase in which creative and planned investigation and research activities are carried out for the purpose
of obtaining and understanding new scientific or technological knowledge.
Development phase: a phase in which research results or other knowledge, before being produced or used for commercial
purposes, are applied in a certain plan or design for the purpose of producing materials, equipment and products that are
new or feature substantial improvement.
The expenses for inside R&D projects in the research phase are included in current profit and loss when the expenses occur.
i. Standards for meeting the conditions of capitalization by research phase
The expenditure in the development phase of the research and development project can be recognized as intangible assets
only when all the following conditions are met:
(1) The completion of such intangible assets makes it usable or its sale technically feasible.
(2) There is an intention to complete such intangible assets and use or sell it.
(3) The way that the intangible assets generate economic interests can prove that the product using such intangible assets or
the intangible assets itself have market. If the intangible assets are to be used internally, its usefulness is proved.
(4) The Company has sufficient technical and financial resources and other resources to support the completion of the
development of such intangible assets and the capacities to use or sell such intangible assets.
(5) The expenditure attributed to the development stage of such intangible assets can be reliably measured.
The expenditure in the development phase not meeting the preceding conditions is included in the current profit and loss
when it is incurred. The development expenditure that is included in profit and loss in the previous year will not be
identified as assets again in later years. The capitalized expenditure in the development phase is listed as development
expenditure in the balance sheet and is converted into intangible assets from the date when it meets the expected purpose.
19. Long-term impairment of assets
The Company determines whether any sign of possible impairment exists for long-term assets on the balance sheet date. If
the sign of impairment exists for long-term assets, the recoverable amount of each asset is estimated. If the recoverable
amount of each assets cannot be estimated, the recoverable amount of the asset group where the asset belong is determined
based on the asset group.
The recoverable amount may be determined according to the higher one of the net value of the fair value of the assets minus
the disposal expenses and the current value of the anticipated future cash flow of the assets.
If the measurement result of recoverable amount indicates that the recoverable amount of a long-term asset is lower than its
book value, the book value of the long-term asset is written down to the recoverable amount. The write-down amount is
identified as asset impairment loss and is included in the current profit and loss and provision for asset impairment
provision is made. Once the impairment loss of assets is confirmed, the loss will not be reversed in later accounting periods.
At the same time, the corresponding assets impairment provision is accrued. After the recognition of assets impairment loss,
corresponding adjustments are made in the future periods on the depreciation or amortized expenses of the impaired assets
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
so that the adjusted book value of such assets (with the anticipated expected salvage value deducted) can be amortized
systematically within the remaining service life.
The goodwill and intangible assets with uncertain service life, which are formed due to enterprise merger, are tested every
year on whether the sign of impairment exists.
During impairment testing, the book value of goodwill can be amortized to the asset group or combination of asset groups
that acquire synergistic benefit from business combination based on the proportion of benefits. When impairment test is
performed for relevant asset groups or asset group combinations that include goodwill, for example, if the sign of
impairment exists for asset groups or asset group combinations relevant to goodwill, the impairment test is first performed
for the asset groups or asset group combinations that do not include goodwill and the recoverable amount is calculated and
is compared with the relevant book value to confirm the corresponding impairment loss. Then the impairment test is first
performed for the asset groups or asset group combinations that include goodwill and the book value (including the book
value of amortized goodwill) of the relevant asset groups or asset group combinations is compared with the recoverable
amount. If the recoverable amount of relevant asset groups or asset group combinations is lower than the book value, the
impairment loss of goodwill is confirmed.
20. Long-term expenses to be apportioned
i. Method of amortization
Long-term unamortized expenses refer to the expenses that have incurred at the Company but should be born in the current
period and later periods, where the amortization period is above one year. Long-term unamortized expenses shall be
amortized with the straight-line method.
21. Payroll
(1) Accounting treatment method of payroll
Short-term remuneration refers to the payroll that needs to be paid completely within 12 months in the annual the report
period when employees provide relevant services, excluding welfare after leave and dismissal welfare. In the accounting
period when employees provide services, the Company identities short-term remuneration as liabilities and includes it in
relevant asset costs and fees according to the benefit objects of services provided by employees.
(2) Accounting treatment method of welfare after leave
The welfare after leave refers to the remuneration and welfare provided by the Company for obtaining services provided by
employees or for terminating the employment relationship after employees have retired, excluding short-term remuneration
and dismissal welfare. The welfare plan after dismissal is classified into the defined contribution plan and the defined
benefit plan.
The welfare defined contribution plan aims to join the social basic endowment insurance and unemployment insurance
organized and implemented by labor and social security agencies in various regions. In addition to social basic endowment
insurance and unemployment insurance, employees can join the pension plan set by the Company at their own discretion. In
the accounting period when employees provide the Company with services, the amount that shall be paid and deposited
shall be identified as liabilities according to the defined contribution plan and is included in the current profit and loss or
relevant asset costs.
After making the preceding payment according to the national standard and pension plan, the Company shall no longer have
any other payment obligation.
(3) Accounting treatment method of dismissal welfare
Dismissal welfare refers to the compensation for employees to terminate the labor relationship with employees before the
labor contracts expire or encourage employees to accept downsizing. On the earlier one between the time when the
Company cannot unilaterally withdraw the labor relationship termination plan and the time when restructuring costs and
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
expenses related to payment of dismissal welfare, the liabilities incurred due to compensation for termination of the labor
relationship is recognized and included in the current profit and loss.
The Company offers early retirement welfare to employees who accept the early retirement arrangement. Early retirement
welfare refers to salaries and social insurances expenses paid for employees that have not reached the statutory retirement
age and are willing to retire with approval of the management of the Company. The Company offers early retirement
welfare from the date of the early retirement arrangement to the date when an employee reaches the statutory retirement age.
The Company shall conduct accounting treatment for early retirement welfare by referring to dismissal welfare. When
recognition conditions for dismissal welfare are satisfied, salaries and social insurance premiums to be paid for employees
from the date when employees retire to the statutory retirement date are recognized as liabilities and included in the current
profit and loss. The difference arising from changes in actuarial assumptions of early retirement welfare and welfare
standards is included in the current profit and loss at occurrence.
(4) Accounting treatment methods of other long-term employees' welfare
Other long-term employees' welfare refers to all other employees' welfare except short-term remuneration, welfare after
leave and dismissal welfare.
For other long-term employees' welfare that meets conditions of the defined contribution plan, the amount that shall be paid
and deposited shall be identified as liabilities in the accounting period and is included in the current profit and loss or
relevant asset costs; except other long-term employees' welfare in the preceding circumstance, an independent actuary sets
the welfare generated by the defined benefit plan to the period in which employees provide services by using the method of
expected accumulative welfare unit and includes it in the current profit and loss or relevant asset costs.
22. Estimated liabilities
i. Recognition standards for estimated liabilities
The obligations related to contingencies, which meet all the following conditions, are recognized by the Company as
estimated liabilities.
The obligation is a current obligation undertaken by the Company;
The fulfillment of the obligation is very likely to cause an outflow of economic interests from the Company;
The amount of the obligation can be measured reliably.
ii. Measurement method of estimated liabilities
Initial measurement is carried out to estimated liabilities of the Company according to the optimum estimation amount of
the required expense when relevant obligations are fulfilled.
When determining the optimum estimation amount, the Company considers in a comprehensive way the factors related to
contingencies like risks, uncertainties and time value of currency. Where there are great influences of time value of currency,
the optimum estimation amount is determined after discounting relevant future cash flows.
The optimum estimation amount is determined according to different situations as follows:
Where there is a continuous range (or interval) of the required expense and different results in the range have same
possibility to occur, the optimum estimation amount is determined according to the intermediate value of the range, i.e. the
average of the maximal and the minimum amounts.
Where there is no continuous range (or interval) or there is a continuous range but different results have different
possibilities to occur, if contingencies involve individual proceedings, the optimum estimation amount is the amount most
likely to occur, and if contingencies involve several proceedings, the optimum estimation amount is determined according to
various possible results and the calculation of relevant probabilities.
If all expenses or part of them, which are used by the Company for paying off estimated liabilities, are anticipated to be
compensated by a third party and compensation amount is basically sure to be received, the compensation amount is
recognized separately as an asset, which should not exceed the book value of the estimated liabilities.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
23. Share-based payment
i. Types of share-based payment
The Company provides equity-settled and cash-settled share-based payment.
ii. Recognition of the fair value of equity instruments
For equity instruments such as the granted option, which exist in the active market, the fair value is recognized according to
their prices in the active market. For those not existing in the active market, their fair value is recognized by using the
option pricing model, which should be selected in consideration of the following factors: a. option exercise price; b. option
period; c. the current price of the underlying shares; d. the predicted fluctuation rate of the share price, e. the estimated
dividend of the share; f. risk free rate in the option period; g. payment of shares of installment options
When determining the grant-date fair value of equity instruments, the Company shall take into account the influence of
market conditions in vesting conditions and non-vesting conditions stipulated in the share-based payment agreement. Where
a share-based payment has a non-vesting condition, the Company shall recognize receipt of the corresponding service cost if
employees or other parties satisfy all the non-market conditions (for example, service duration) in vesting conditions.
iii. Basis of recognition of the best estimate of the number of vested equity instruments
On each balance sheet date in the vesting period, the Company shall make the best available estimate of the number of
equity instruments expected to vest, and shall revise that estimate if subsequent information indicates that the number of
equity instruments expected to vest differs from previous estimates. On vesting date, the Company shall revise the estimate
to equal the number of equity instruments that ultimately vested.
iv. Accounting for implementation, modification and termination of share-based payment plans
The Company shall measure the equity-settled share-based payment at the fair value of the granted employee equity
instruments. If the equity instruments granted vest immediately, the Company shall include the grant-date fair value of
equity instruments into related cost or expense, with a corresponding increase in capital reserve. If the equity instruments
granted do not vest until the counterparty completes a specified period of service or achieves a performance condition in the
vesting period, the Company shall include the service obtained in the current period into related cost or expense and capital
reserved by reference to the grant-date fair value of equity instruments based on the best estimate of the number of vested
equity instruments on each balance sheet date during the vesting period. The Company shall not adjust the recognized cost
or expense and total equity amount after the vesting date.
The case-settled share-based payment shall be measured by reference to the fair value of the Company's eligible liabilities
which is calculated based on shares or other equity instruments. If the equity instruments granted vest immediately, the
Company shall include the fair value of eligible liabilities in related cost or expense on the vesting date, with a
corresponding increase in liabilities. For the cash-settled share-based payment where the granted options are not exercised
until the counterparty completes a specified period of service or achieves a performance condition in the vesting period, the
Company shall include the service obtained in the current period into related cost or expense and liabilities by reference to
the grant-date fair value of liabilities, based on the best estimate of the number of vested equity instruments on each balance
sheet date during the vesting period. The Company shall re-measure the fair value of its liabilities on each balance sheet
date and settlement date before settlement of related liabilities, and include liability changes in the current profit and loss.
v. Modifications to the terms and conditions on which equity instruments were granted
If a grant of an equity instrument is canceled during the vesting period, the Company shall account for the cancellation as an
acceleration of vesting, and shall therefore include immediately the amount that would otherwise have been recognized for
services received over the remainder of the vesting period in the current profit and loss, and recognize capital reserve. If
employees or other parties can but fail to satisfy non-vesting conditions in the vesting period, the Company shall account for
the failure as a cancellation of the grant of the equity instrument.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
24. Other financial instruments such as preferred stock and sustainable debt
Based on the rules of financial instruments, the Company classifies financial instruments or their components into financial
liabilities or equity instruments during initial recognition according to the contact terms of financial instruments such as
preferred stock and sustainable debt and economic essence they reflect rather than legal form, in combination with
definitions of financial liabilities and equity instruments.
i. When one of the following conditions is met, the issued financial instrument is classified into financial liabilities:
(1) Contractual obligation to deliver cash or other financial assets to other parties;
(2) Contractual obligation to exchange financial assets or financial liabilities under potential adverse conditions;
(3) Non-derivative instrument contract that must or may use equity instruments of an enterprise for settlement in the future
(the enterprise delivers a variable number of equity instruments according to the contract);
(4) Derivative instrument contract that must or may use equity instruments of an enterprise for settlement in the future
(except derivative instrument contracts that use a fixed number of equity instruments to exchange a fixed amount of cash or
other financial assets).
ii. When the following conditions are met at the same time, the issued financial instruments are classified into equity
instruments:
(1) The financial instruments do not include the contractual obligation to deliver cash or other financial assets to other
parties or exchange financial assets or financial liabilities under potential adverse conditions;
(2) For the financial instruments that must or may use equity instruments of an enterprise for settlement in the future, if the
financial instruments are non-derivative instruments, the contractual obligation to deliver a variable number of equity
instruments for settlement is not included; if the financial instruments are derivative instruments, the enterprise can only
settle the financial instruments by exchanging a fixed number of equity instruments with the fixed amount of cash or other
financial assets.
iii. Accounting treatment method
For financial instruments that belong to equity instruments, the interest expenditure or dividend distribution shall be used as
profits of the enterprise for distribution, the buy-back and write-off are treated as changes of equity, and transaction
expenses such as handling charge and commission shall be deducted from the equity.
For financial instruments that belong to financial liabilities, the interest expenditure or dividend distribution shall be treated
as borrowing costs in principle, the gain or loss generated due to buy-back or redemption are included in the current profit
and loss, and transaction expenses such as handling charge and commission are included in the initial amount of
measurement of the issues instruments.
25. Income
i. Standards for recognition time of sales income
The realization of the income from the sale of commodities is recognized when the Company has already transferred the
main risks and consideration in the ownership right of the commodities to the purchaser, the Company has not retained any
further management right connected to the ownership right nor implement effective control over the sold commodities, the
amount of the revenue can be reliably measured, relevant economic interests are likely to flow into the enterprise, and
relevant costs incurred or to be incurred can be measured reliably.
The Company mainly runs the leasing business in the electronics market. It identifies received rental as rental income in the
term of lease by using the method of line and the income of other business is identified when the risk premium is transferred
according to contract provisions.
The price of a contract or agreement is collected through deferral. In the case of actual financial nature, the amount of
income from sales commodities shall be determined according to the fair value of the price of the contract or agreement.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
ii. Basis for recognition of income from transfer of asset use right
When economic interests relevant to transaction probably flow into the enterprise and the amount of income can be reliably
measured, the amount of income from transfer of asset use right is determined in the following circumstances:
(1) The amount of interest income is determined according to the time and actual interest rate of other people using the
monetary fund of the enterprise.
(2) The amount of the income from use fee is determined in accordance with the time and method of charges as agreed in
relevant contract or agreement.
iii. Basis and method for confirmation of income from rendering of services
Where the results of the labor services provided on the balance sheet date can be estimated reliably, the income from the
provision of labor services is recognized with the percentage of completion method. The completion progress of a labor
service transaction is determined by surveying the work completed.
When the following conditions are met at the same time, the result of rendering of services can be reliably estimated:
(1) The amount of income can be measured reliably.
(2) Relevant economic interests probably flow into the enterprise.
(3) The completion progress of transactions can be reliably determined.
(4) The costs that have been incurred or will be incurred in transactions can be reliably measured.
The total amount of the income from the provision of labor services is determined according to the price money received or
receivable of a relevant contract or agreement, unless the price money received or receivable of a relevant contract or
agreement is unfair. The labor services income of the current period is recognized on the balance sheet date according to the
resulted amount of the total amount of income from provision of labor services times the completion percentage and
deducted by the accumulative amount of the recognized income from provision of labor services in previous accounting
periods. At the same time, the labor cost of the current period is carried forward according to the estimated total cost of the
provision of labor services times the completion percentage and deducted by the accumulative amount of the recognized
labor cost in previous accounting periods.
Where the results of the provision of labor services on the balance sheet date cannot be estimated reliably, such results are
processed respectively according to the following conditions:
(1) Where it is estimated that the labor services cost incurred can be compensated, the income from provision of labor
services is recognized according to the amount of the labor services cost incurred and the same amount is transferred into
the labor cost.
(2) Where it is estimated that the labor services cost incurred cannot be compensated, the labor services cost incurred is
included in current profit and loss and no income is recognized.
When the contracts or agreements signed between the Company and other companies include commodity sales and labor
service and these two parts can be differentiated from each other and can be separately measured, commodity sales and
labor service are handled separately. If they cannot be differentiated from each other or they can be differentiated from each
other but cannot be separately measured, both parts will be handled as commodity sales.
iv. Basis and method for confirmation of income from construction contracts
(1) When the results of construction contracts can be reliably estimated, relevant income from contracts and costs of
contracts are confirmed based on the method of completion percentage. The method of completion percentage refers to the
method for confirming income from contracts and costs of contracts according to the completion progress of contracts. The
completion progress of a contract is determined according to the ratio of actual accumulated cost of the contract to
estimated total costs of the contract.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
When the following conditions are met at the same time, the result of a fixed construction contract can be reliably
estimated:
1) The total income from the contract can be reliably measured;
2) Economic interests relevant to the contract probably flow into the enterprise.
3) The actual costs of the contract can be clearly distinguished and reliably measured.
4) The completion progress of the contract and the costs needed for completing the contract can be reliably determined.
When the following conditions are met at the same time, the result of a cost-plus contract can be reliably estimated:
1) Economic interests relevant to the contract probably flow into the enterprise.
2) The actual costs of the contract can be clearly distinguished and reliably measured.
On the balance sheet date, the amount of total contractual income multiplied by the completion progress, deducting the
accumulated confirmed income in the previous accounting period, is identified as the current contractual income; the
amount of estimated total contract cost multiplied by the completion progress, deducting the accumulated confirmed cost in
the previous accounting period, is identified as the current costs of contract. The change of contract engineering, claim and
bonus is included in the total income of contract based on the amount that may be brought and can be reliably calculated.
(2) If the result of a construction contract cannot be reliably estimated, the contract is processed as follows:
1) If the contract cost can be recovered, the income from the contract is identified according to the actual recovered contract
cost and the contract cost is identified as the current costs of contract.
2) If the contract cost cannot be recovered, the cost is immediately identified as the costs of contract in the current period
when the cost is incurred and the income from the contract is not identified.
(3) If the total cost of contract probably exceeds the total income from the contract, the expected loss is immediately
identified as costs.
v. Transfer of the assets with repurchase conditions
If the Company signs a repurchase agreement when selling products or transferring other assets, whether the products sold
meet the conditions for income recognition is judged according to the articles of the agreement. If the repurchase is a
financing transaction, the Company does not recognize sales income when delivering products or assets. If the repurchase
price is higher than the selling price, interests are accrued for the difference during repurchase period and included in
financial expenses.
26. Government subsidies
(1) Basis for determining government subsidies relevant to assets and accounting treatment methods
The government subsidies relevant to assets are identified as deferred income and are included in non-operating income
according to the service life of the built or purchased assets.
(2) Basis for determining government subsidies relevant to income and accounting treatment methods
The government subsidies that are related to income and are used to compensate for relevant expenses or losses in later
periods are identified as deferred income when they are obtained; the subsidies used to compensate for relevant expenses or
losses that have been incurred are identified as the current non-operating income when they are obtained.
When identified government subsidies need to be returned and the balance of relevant deferred income exists, the book
balance of relevant deferred income is offset and the excess part is included in the current profit and loss; when relevant
deferred income does not exist, the government subsidies are directly included in the current profit and loss.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
27. Deferred income tax assets and liabilities
Deferred income tax assets and liabilities are calculated and identified according to the difference (temporary difference)
between the taxable basis of the assets and liabilities and their book value. On the balance sheet date, deferred income tax
assets and liabilities are measured based on the tax rate applicable to the period when the assets are expected to be
recovered or the liabilities are expected to be paid off.
i. Basis for the recognition of deferred incomes tax assets
The Company confirms the deferred income tax assets generated due to deductible temporary difference based on the
amount of taxable income that is probably obtained to deduct deductible temporary difference and can carry over deductible
loss and tax deduction. However, the deferred income tax assets generated due to initial confirmation of assets or liabilities
in a transaction that has the following features at the same time: (1) the transaction is not business merger; (2) the
transaction does not affect the accounting profit, taxable income or deductible loss.
For the deductible temporary difference relevant to investment in associates, when the following conditions are met at the
same time, corresponding deferred income tax assets are confirmed; the temporary difference is probably reversed in the
foreseeable future and taxable income used to deduct the deductible temporary difference will probably be obtained in the
future.
ii. Basis for recognition of deferred income tax liabilities
The temporary difference between the tax payable not paid in the current period and that in the previous period is
recognized by the Company as deferred income tax liabilities, excluding:
(1) Temporary difference formed due to initial confirmation of goodwill;
(2) Transaction or matter formed due to factors rather than business merger (the transaction or matter does not affect the
accounting profit or the temporary difference formed due to taxable income or deductible loss);
(3) For the taxable temporary difference relevant to investment of subsidiaries and associates, the reversal time of the
temporary difference can be controlled and may not be reversed in the foreseeable future.
iii. An entity shall offset deferred tax assets and deferred tax liabilities if, and only if:
(1) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
(2) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a
net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts
of deferred tax liabilities or assets are expected to be settled or recovered.
28. Lease
(1) Accounting treatment method of operating lease
A. The fee paid by the Company for rented assets is apportioned by the straight-line method in the whole lease term without
deduction of the rent-free period and included in current expenses. The initial direct expenses related to lease transactions,
paid by the Company, are included in current expenses.
In case that the leasing party undertakes the lease-related expenses that should be undertaken by the Company, the Company
deducts the expenses from the total lease fee and the lease fee after deduction is apportioned in the lease term and included
in current expenses.
B. The lease fee received by the Company from leasing of assets is apportioned by the straight-line method in the whole
lease term without deduction of the rent-free period and included in the lease income. The initial direct expenses related to
lease transactions, paid by the Company, are included in current expenses. Those with significant amounts are capitalized
and recorded by periods into current profits in the whole lease term according to the same basis for recognition of the lease
income.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
In case that the Company undertakes the lease-related expenses which should be undertaken by the lessee, the Company
deducts the expenses from the total lease income and the lease expenses after deduction are allocated in the lease term.
(2) Accounting treatment method of financing lease
A. Assets acquired under financing lease: Between the fair value of rented assets and the minimum lease payment, the
Company adopts the lower one as the recording value of the rented assets, the minimum lease payment as the recording
value of long-term accounts payable, and the difference between the two as financing expenses yet to be recognized.
The financing expenses yet to be recognized are apportioned by the Company by the actual interest rate method in the lease
term of the assets and included in accounting expenses. Assets given out under financing lease:
B. The difference between the total residual value, without guarantee, of the financing lease payment receivable and the
current value is recognized by the Company on the lease-beginning date as financing profits yet to be realized, and as the
lease income in future lease periods. The initial direct expenses related to lease transactions are included in the initial
calculation of financing lease payment receivable and the amount of profits recognized in the lease term is reduced.
29. Changes of important accounting policies and accounting estimates
(1) Changes of important accounting policies
□ Applicable √ Not applicable
(2) Changes of important accounting estimates
□ Applicable √ Not applicable
VI. Taxes
1. Main tax categories and tax rates
Tax Category Taxation Basis Tax Rate
Value-added tax Taxable income 5, 6, 17
Business tax Revenue from rental and interest on loans 5
Urban maintenance and construction tax Turnover tax payable 7
Corporate income tax Taxable income 25, 15
Education surtax Turnover tax payable 3
Education surtax Turnover tax payable 2
Tax payers when different enterprise income tax rates exist
Name of tax payer Income tax rate
Xi'an SEG Electronics Market Co., Ltd. 15
Xi'an Hairong SEG Electronics Market Co., Ltd. 15
2. Tax preference
According to the Letter of Confirmation Doc. No.[2014] 134 issued by Shaanxi Development and Reform Commission,
Xi'an SEG Electronics Market Co., Ltd., a subsidiary of the Company, is engaged in projects encouraged by the nation and
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
complies with the corporate income tax preference policy for development of the west regions. Therefore, the corporate
income tax shall be paid at the rate of 15%.
According to the Letter of Confirmation Doc. No.[2014] 060 issued by Shaanxi Development and Reform Commission,
Xi'an Hairong SEG Electronics Market Co., Ltd., a subsidiary of the Company, is engaged in projects encouraged by the
nation and complies with the corporate income tax preference policy for development of the west regions. Therefore, the
corporate income tax shall be paid at the rate of 15%.
Except for the foregoing two subsidiaries, the enterprise income tax rate of all other subsidiaries is 25%.
VII. Notes on items of consolidated financial statements
1. Monetary capital
Unit: Yuan
Item Closing balance Opening balance
Cash on hand 532,393.65 526,467.72
Bank deposit 142,717,238.17 274,816,839.04
Other monetary capital 55,122.34 1,520,122.34
Total 143,304,754.16 276,863,429.10
Other note
Details of other restricted monetary fund:
Item Closing balance Opening balance
Performance bond 340,000.00
Cash deposit for credit card repayment 1,000,000.00
Total 1,340,000.00
2. Accounts receivable
(1) Accounts receivable disclosed by type
Unit: Yuan
Closing balance Opening balance
Class Book balance Bad debt provision Book balance Bad debt provision
Book value Book value
Amount Percentage Amount Percentage Amount Percentage Amount Percentage
Accounts receivable with
bad debt provision accrued
79,482,537.58 87.81% 26,173.60 0.24% 79,456,363.98 98,238,596.47 89.91% 26,173.60 0.03% 98,212,422.87
based on credit risk feature
combinations
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Accounts receivable with
an insignificant amount
individually, for which bad 11,029,908.51 12.19% 11,029,908.51 99.76% 0.00 11,029,908.51 10.09% 11,029,908.51 100.00%
debt provision is separately
accrued
Total 90,512,446.09 100.00% 11,056,082.11 100.00% 79,456,363.98 109,268,504.98 100.00% 11,056,082.11 10.12% 98,212,422.87
Accounts receivable with a significant amount individually, for which bad debt provision is separately accrued at the end of period:
□ Applicable √ Not applicable
Accounts receivable in the combination, for which bad debt provision was accrued by the aging analysis method:
√ Applicable □ Not applicable
Unit: Yuan
Closing balance
Aging
Accounts receivable Bad debt provision Percentage
Sub-item within one year
Subtotal of accounts aged under 1
78,959,065.58 0.00 0.00%
year
1-2 years 523,472.00 26,173.60 5.00%
2-3 years 0.00 0.00
Over 3 years 0.00 0.00
3-4 years 0.00 0.00
Total 79,482,537.58 26,173.60 0.03%
Note to basis for confirming the combination:
Accounts receivable in a combination, for which bad debt provisions are made using the Percentage of Total Accounts Receivable Outstanding
method
□ Applicable √ Not applicable
i. Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
Accounts receivable with no significant single amount but with single provision for bad debts at the end of period
Closing balance
Name of company
Proportion of
Accounts receivable Bad debt provision Reason for provision
provision (%)
Unable to be recovered for aging of
Jiangsu Unicom 3,092,011.09 3,092,011.09 100.00
over 5 years
Shenzhen Shuangxionghui Industrial Co., Unable to be recovered for aging of
2,160,725.63 2,160,725.63 100.00
Ltd over 5 years
Shenzhen Liyuanshun Industrial Co., Ltd. 1,906,865.35 1,906,865.35 100.00 Unable to be recovered for aging of
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
over 5 years
Unable to be recovered for aging of
Zhejiang Financial Information Co., Ltd 786,000.00 786,000.00 100.00
over 5 years
Unable to be recovered for aging of
Shanghai Tianci Industrial Co., Ltd. 899,000.00 899,000.00 100.00
over 5 years
Other companies 2,185,306.44 2,185,306.44 100.00 Unable to be recovered for long aging
Total 11,029,908.51 11,029,908.51 100.00 -
(2) Accounts receivable with top 5 closing balance collected based on arrears party
Percentage in the total
Name of company Closing balance amount of accounts Accrued bad debt provision
receivable
Shenzhen Runneng Digital Co., Ltd. 20,165,776.97 22.28 -
Xinjiang Zhongdi Communications Equipment Co., Ltd. 13,241,726.56 14.63 -
Shenzhen Wonder Industry Co., Ltd. 7,955,493.47 8.79 -
Shenzhen Comnet Technology Co., Ltd. 5,216,504.81 5.76 -
Shenzhen Nanfang Yunhe Technology Co., Ltd. 3,941,752.87 4.35
Total 50,521,254.68 55.82 -
3. Advances
(1) Advances listed according to different durations
Unit: Yuan
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 89,712,712.41 100.00% 129,044,887.26 100.00%
Total 89,712,712.41 - 129,044,887.26 -
(2) Advances with top 5 closing balance collected based on advance object
Percentage in the total
Name of company Period-end amount amount of accounts Prepayment date Reason for non-settlement
receivable (%)
Xi'an Gaoke (Group) New West China Industrial 20,000,000.00 22.29 Within 1 year Advance rental payment
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Development Co., Ltd
Shenzhen Must Energy Technology Co., Ltd. 17,823,353.29 19.87 Within 1 year Prepayment for goods
Tonmac International Electronics (Suzhou) Co.,
17,500,000.00 19.51 Within 1 year Advance rental payment
Ltd
Shenzhen Must Power Co., Ltd. 9,337,733.44 10.41 Within 1 year Prepayment for goods
Suzhou SEG Digital Plaza Management Co., Ltd. 5,696,597.95 6.35 Within 1 year Advance rental payment
Total 70,357,684.68 78.43 - -
4. Other receivables
(1) Other receivables disclosed by type
Unit: Yuan
Closing balance Opening balance
Class Book balance Bad debt provision Book balance Bad debt provision
Book value Book value
Amount Percentage Amount Percentage Amount Percentage Amount Percentage
Other receivables with
single significant amount
14,434,547.87 15.95% 14,434,547.87 100.00% 14,434,547.87 24.12% 14,434,547.87 100.00%
and single bad debt
provision
Other receivables with bad
debt provision accrued
46,573,648.87 51.46% 322,879.63 0.69% 46,250,769.24 27,674,049.48 46.25% 321,265.15 1.16% 27,352,784.33
based on credit risk feature
combinations
Other receivables with an
insignificant amount
individually, for which bad 17,731,257.04 19.59% 17,731,257.04 100.00% 17,731,257.04 29.63% 17,731,257.04 100.00%
debt provision is separately
accrued
Total 78,739,453.78 87.00% 32,488,684.54 41.26% 46,250,769.24 59,839,854.39 100.00% 32,487,070.06 54.29% 27,352,784.33
Other receivables with a significant amount individually, for which bad debt provision is separately accrued
√ Applicable □ Not applicable
Unit: Yuan
Other receivables (by Closing balance
company) Other receivables Bad debt provision Percentage Reason for provision
Yangjiang Yuntong Grease Unable to be recovered for
8,530,276.35 8,530,276.35 100.00%
Co., Ltd. aging of over 5 years
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Creditor's right transferred Unable to be recovered for
5,904,271.52 5,904,271.52 100.00%
in by SEG Communications aging of over 5 years
Total 14,434,547.87 14,434,547.87 - -
Among the combinations, accounts receivable for which bad debt provision is computed by aging method:
√ Applicable □ Not applicable
Unit: Yuan
Closing balance
Aging
Other receivables Bad debt provision Percentage
Sub-item within one year
Within 1 year 40,180,552.52 0.00 0.00%
Subtotal of accounts aged under 1
40,180,552.52 0.00 0.00%
year
1-2 years 6,355,437.60 317,771.88 5.00%
2-3 years 24,240.00 2,424.00 10.00%
Over 3 years 13,418.75 2,683.75 20.00%
Total 46,572,034.39 321,265.15 0.69%
Note to basis for confirming the combination:
Other receivables in a combination, for which bad debt provisions are made using the Percentage of Total Receivables Outstanding method
□ Applicable √ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
□ Applicable √ Not applicable
(2) Current accrued, recovered or reversed bad debt provision
The amount of the current accrued bad debt provision is RMB 1,614.48 Yuan and the amount of the current recovered or reversed bad debt
provision is RMB 0.00 Yuan.
(3) Classification of other receivables by nature
Unit: Yuan
Nature of receivables Period-end book balance Period-end book balance
Creditor's right transfer cost 32,165,804.91 32,165,804.91
Imprest 1,636,672.31 831,185.54
Deposit and security deposit 23,173,739.64 23,342,863.94
Others 21,763,236.92 3,500,000.00
Total 78,739,453.78 59,839,854.39
(4) Other receivables with top 5 closing balance collected based on arrears party
Unit: Yuan
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Percentage in the total
amount of closing Closing balance of bad
Name of company Nature of payables Closing balance Aging
balance of other debt provision
receivables
Yangjiang Yuntong Debt restructuring of
8,530,276.35 Over 5 years 10.83% 8,530,276.35
Grease Co., Ltd. SEG Orient
Nantong Construction
Salary deposit for
Engineering 6,200,000.00 1-2 years 7.87% 310,000.00
peasant workers
Administration
Creditor's right
Debt restructuring of
transferred in by SEG 5,904,271.52 Over 5 years 7.50% 5,904,271.52
SEG Communications
Communications
Shenzhen Lianjing Creditor's incomings
5,697,287.51 Over 5 years 7.24% 5,697,287.51
Trade Co., Ltd. and outgoings
Shenzhen Top Industry Creditor's incomings
3,281,387.96 Over 5 years 4.17% 3,281,387.96
Co., Ltd. and outgoings
Total - 29,613,223.34 - 37.61% 23,723,223.34
5. Inventory
(1) Classification of inventory
Unit: Yuan
Closing balance Opening balance
Item Provision for loss Provision for loss
Book balance for decline in value Book value Book balance for decline in value Book value
of inventories of inventories
Raw materials 0.00 149,186.66 149,186.66
Commodity stocks 3,209,971.90 3,209,971.90 1,579,916.40 1,579,916.40
Low-cost
227,302.70 227,302.70 222,080.75 222,080.75
consumables
Development cost 565,321,975.34 565,321,975.34 448,858,750.91 448,858,750.91
Total 568,759,249.94 568,759,249.94 450,809,934.72 450,809,934.72
(2) Note to capitalization amount of borrowing costs included in closing balance of inventory
Decrease in the current period Capitalization rate of
Increase in the capitalization amount
Inventory item name Opening balance Closing balance
current period Decrease in recognized in the
Others
sales current period (%)
Nantong SEG Times 13,915,097.17 6,576,579.00 20,491,676.17 5.30
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Square
Total 13,915,097.17 6,576,579.00 20,491,676.17 -
(3) Development cost
Expected
Commencement Expected
Project name investment Closing balance Opening balance
time completion date
amount
Nantong SEG Times
2013.5 2015.12 600,000,000.00 565,321,975.34 448,858,750.91
Square
Total - - - 565,321,975.34 448,858,750.91
6. Other current assets
Unit: Yuan
Item Closing balance Opening balance
Bank financial products 187,400,000.00 259,831,270.00
Tax to be deducted and withheld 41,330,588.65 79,402,305.52
Others 7,560,524.59 196,844.22
Total 236,291,113.24 339,430,419.74
7. Available-for-sale financial assets
(1) Financial assets available for sale
Unit: Yuan
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Available-for-sale equity
34,399,017.93 15,000.00 34,384,017.93 34,554,973.24 15,000.00 34,539,973.24
instruments
Measured by fair value 588,625.10 588,625.10 744,580.41 744,580.41
Measured by cost 33,810,392.83 15,000.00 33,795,392.83 33,810,392.83 15,000.00 33,795,392.83
Total 34,399,017.93 15,000.00 34,384,017.93 34,554,973.24 15,000.00 34,539,973.24
(2) Available-for-sale financial assets measured by fair value at the end of the period
Unit: Yuan
Financial assets available Available-for-sale equity Available-for-sale debt
Total
for sale instruments instruments
Cost of equity
90,405.00 90,405.00
instruments/amortized cost
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
of debt instruments
Fair value 588,625.10 588,625.10
Accumulative changes in
fair value included in other 498,220.10 498,220.10
comprehensive income
(3) Available-for-sale financial assets measured by cost at the end of the period
Unit: Yuan
Book balance Impairment provision Cash
dividends
Increase in Decrease in Increase in Decrease in Shareholding
Investee Period Period of the
the current the current Period end the current the current Period end proportion
beginning beginning current
period period period period period
Kashgar
Shenzhen
20,000,000.00 20,000,000.00
City Co.,
Ltd.
Shenzhen
SEG GPS
Scientific 13,515,392.83 13,515,392.83
Navigations
Co., Ltd.
Nanjing
Shangsha 280,000.00 280,000.00
Co., Ltd
Anshan
Yibai Co., 15,000.00 15,000.00 15,000.00 15,000.00
Ltd
Total 33,810,392.83 33,810,392.83 15,000.00 15,000.00 -
(4) Changes in impairment of available-for-sale financial assets in the report period
Unit: Yuan
Financial assets available Available-for-sale equity Available-for-sale debt
Total
for sale instruments instruments
Accrued impairment
balance at the beginning of 15,000.00 15,000.00
period
Accrued impairment
15,000.00 15,000.00
balance at the end of period
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
8. Long-term equity investment
Unit: Yuan
Increase/Decrease of the year
Investment
Closing
gains and
Opening Adjustment of Closing balance of
Investee losses Other Issued cash Accrued
balance Additional Negative other balance impairment
confirmed equity dividends impairment Others
investment investment comprehensive provision
under the changes or profits provision
income
equity
method
1. Cooperative enterprise
2. Associate
Shanghai SEG
Electronics Market 3,379,412.81 -111,608.08 3,267,804.73
Co., Ltd.
Shenzhen Huakong
181,743,161.07 -4,715,142.77 48.10 177,028,066.40
SEG Co., Ltd.
Shenzhen
International
Consumer
9,000,000.00 9,000,000.00
Electronics
Exhibition/Exchange
Center Co., Ltd.
Subtotal 185,122,573.88 9,000,000.00 0.00 -4,826,750.85 48.10 189,295,871.13
Total 185,122,573.88 9,000,000.00 0.00 -4,826,750.85 48.10 189,295,871.13
9. Investment real estate
(1) Investment properties using cost measurement model
√ Applicable □ Not applicable
Unit: Yuan
Item Houses and buildings Land use right Construction in progress Total
I. Original book value
1. Opening balance 718,281,629.05 5,237,512.49 723,519,141.54
2. Amount of increase in the
current period
(1) Outsourcing
(2) Transfer-in of inventory/fixed
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Houses and buildings Land use right Construction in progress Total
assets/construction in progress
(3) Business merger increase
3. Amount of decrease in the
current period
(1) Disposal
(2) Other transfer-out
4. Closing balance 718,281,629.05 5,237,512.49 723,519,141.54
II. Accumulated depreciation or
accumulated amortization
1. Opening balance 277,694,588.74 1,972,826.40 279,667,415.14
2. Amount of increase in the
9,295,757.78 45,220.68 0.00 9,340,978.46
current period
(1) Provision or amortization 9,295,757.78 45,220.68 9,340,978.46
3. Amount of decrease in the
current period
(1) Disposal
(2) Other transfer-out
4. Closing balance 286,990,346.52 2,018,047.08 0.00 289,008,393.60
III. Impairment provision
1. Opening balance
2. Amount of increase in the
current period
(1) Provision
3. Amount of decrease in the
current period
(1) Disposal
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Houses and buildings Land use right Construction in progress Total
(2) Other transfer-out
4. Closing balance
IV. Book value
1. Closing book value 431,291,282.53 3,219,465.41 0.00 434,510,747.94
2. Opening book value 440,587,040.31 3,264,686.09 0.00 443,851,726.40
10. Fixed assets
(1) Information on fixed assets
Unit: Yuan
Houses and Machinery Transportation Electronic
Item Other equipment Total
buildings equipment vehicles equipment
I. Original book value
1. Opening balance 35,694,847.73 30,744,844.49 5,470,881.82 32,437,022.84 3,717,659.88 108,065,256.76
2. Amount of increase in
0.00 3,000.00 0.00 1,122,111.47 778,244.00 1,903,355.47
the current period
(1) Purchase 3,000.00 1,117,611.47 778,244.00 1,898,855.47
(2) Transfer-in of
construction in progress
(3) Business merger
increase
Other transfer-in 4,500.00 4,500.00
3. Amount of decrease in
0.00 0.00 291,551.00 186,324.31 0.00 477,875.31
the current period
(1) Disposal or scrap 291,551.00 186,324.31 477,875.31
4. Closing balance 35,694,847.73 30,747,844.49 5,179,330.82 33,372,810.00 4,495,903.88 109,490,736.92
II. Accumulated
depreciation
1. Opening balance 14,788,585.07 29,586,623.96 3,630,627.47 20,012,581.46 2,522,413.55 70,540,831.51
2. Amount of increase in
436,930.80 826,192.94 252,348.96 687,629.82 290,565.87 2,493,668.39
the current period
(1) Provision 436,930.80 826,192.94 252,348.96 687,629.82 290,565.87 2,493,668.39
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Houses and Machinery Transportation Electronic
Item Other equipment Total
buildings equipment vehicles equipment
3. Amount of decrease in
0.00 0.00 276,973.45 177,008.09 0.00 453,981.54
the current period
(1) Disposal or scrap 276,973.45 177,008.09 453,981.54
4. Closing balance 15,225,515.87 30,412,816.90 3,606,002.98 20,523,203.19 2,812,979.42 72,580,518.36
III. Impairment provision
1. Opening balance
2. Amount of increase in
the current period
(1) Provision
3. Amount of decrease in
the current period
(1) Disposal or scrap
4. Closing balance
IV. Book value
1. Closing book value 20,469,331.86 335,027.59 1,573,327.84 12,849,606.81 1,682,924.46 36,910,218.56
2. Opening book value 20,906,262.66 1,158,220.53 1,840,254.35 12,424,441.38 1,195,246.33 37,524,425.25
(2) Fixed assets not obtaining a property right certificate
Unit: Yuan
Reason for not obtaining the property right
Item Book value
certificate
Houses and buildings 1,260,353.07 Qualification procedures not complete
11. Construction in progress
(1) Construction in progress
Unit: Yuan
Closing balance Opening balance
Item
Book balance Impairment Book value Book balance Impairment Book value
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
provision provision
LCD in the lobby of SEG
140,810.00 140,810.00
Plaza
Total 140,810.00 140,810.00
12. Intangible assets
(1) Intangible assets
Unit: Yuan
Non-patented
Item Land use right Patent right Outsourced software Total
technology
I. Original book value
1. Opening balance 159,759.24 3,042,853.00 3,202,612.24
2. Amount of increase in the
current period
(1) Purchase
(2) Internal R&D
(3) Business merger increase
3. Amount of decrease in the
current period
(1) Disposal
4. Closing balance 159,759.24 3,042,853.00 3,202,612.24
II. Accumulated amortization
1. Opening balance 57,514.55 2,001,335.58 2,058,850.13
2. Amount of increase in the
1,379.88 165,205.24 166,585.12
current period
(1) Provision 1,379.88 165,205.24 166,585.12
3. Amount of decrease in the
current period
(1) Disposal
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Non-patented
Item Land use right Patent right Outsourced software Total
technology
4. Closing balance 58,894.43 2,166,540.82 2,225,435.25
III. Impairment provision
1. Opening balance
2. Amount of increase in the
current period
(1) Provision
3. Amount of decrease in the
current period
(1) Disposal
4. Closing balance
IV. Book value
1. Closing book value 100,864.81 876,312.18 977,176.99
2. Opening book value 102,244.69 1,041,517.42 1,143,762.11
Proportion of intangible assets formed not through internal R&D of the Company to the balance of intangible assets
13. Goodwill
(1) Original book value of goodwill
Unit: Yuan
Name of the investee or the
item contributing to a Opening balance Increase in the current period Decrease in the current period Closing balance
goodwill
Changsha SEG Development
10,328,927.82 10,328,927.82
Co., Ltd.
Total 10,328,927.82 10,328,927.82
(2) Goodwill impairment provision
Unit: Yuan
Name of the investee or the
item contributing to a Opening balance Increase in the current period Decrease in the current period Closing balance
goodwill
Goodwill impairment testing process, parameters, and recognition method for goodwill impairment provision
Other note
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Goodwill is measured as the difference on the acquisition date between the cost of the enterprises merger not under common
control over the acquirer's interest in the fair value of the identifiable net assets.
The goodwill calculation process is as follows:
Item Amount
Investment cost 69,000,000.00
Book value of the net assets of the investee 57,508,384.14
Estimated increment of net assets 93,383,233.24
Deferred income tax liabilities incurred by the estimated increment of net assets 23,345,808.30
Fair value of the net assets of the investee 127,545,809.08
Shareholding proportion in the investee 46.00%
The difference caused when the investment cost is more than the recognizable net assets 10,328,927.82
of the investee, which should be enjoyed at the time of acquisition
The Company purchased 46% of the equity of Changsha SEG Development Co., Ltd with the price of 69,000,000 Yuan in
March 2009. The net assets in book value of Changsha SEG Development Co., Ltd were 57,508,384.14 Yuan in the current
month while the net assets in fair value of Changsha SEG Development Co., Ltd after the evaluation for the added value
was carried out. Thus, a goodwill amounting to 10,328,927.82 was formed.
The goodwill impairment testing was conducted at the end of the period and there was no sign of impairment, so no
provision was accrued for impairment.
14. Long-term expenses to be apportioned
Unit: Yuan
Increase in the Amount of current Amount of other
Item Opening balance Closing balance
current period period amortization decrease
Decoration expenses 44,225,335.11 9,536,846.70 5,634,707.68 48,127,474.13
Firefighting renovation 4,318,931.80 404,738.70 3,914,193.10
Market supporting fee of Tower B 691,732.95 456,310.86 235,422.09
Total 49,235,999.86 9,536,846.70 6,495,757.24 52,277,089.32
15. Deferred income tax assets and liabilities
(1) Deferred income tax assets not offset
Unit: Yuan
Closing balance Opening balance
Item Deductible temporary Deductible temporary
Deferred income tax assets Deferred income tax assets
difference difference
Asset impairment provision 32,235,258.25 8,058,814.57 32,235,258.25 8,058,814.57
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Government subsidies included
9,500,000.00 2,375,000.00 9,500,000.00 2,375,000.00
in deferred income
Total 41,735,258.25 10,433,814.57 41,735,258.25 10,433,814.57
(2) Deferred income tax liabilities not offset
Unit: Yuan
Closing balance Opening balance
Item Deferred income tax Taxable temporary Deferred income tax
Taxable temporary difference
liabilities difference liabilities
Asset evaluation increment for
merger of not the same controlling 61,146,303.68 15,286,575.92 63,442,234.08 15,860,558.49
enterprise
Gains and losses from changes of
fair value of the available-for-sale 576,299.13 144,074.78 654,175.41 163,543.86
financial assets
Total 61,722,602.81 15,430,650.70 64,096,409.49 16,024,102.35
(3) Details of unconfirmed deferred income tax assets
Unit: Yuan
Item Closing balance Opening balance
Deductible losses 56,411,415.84 46,691,048.83
Asset impairment provision 11,322,893.92 11,322,893.92
Total 67,734,309.76 58,013,942.75
(4) The deductible loss of deferred income tax assets that have not been confirmed will come to maturity in the
following years:
Unit: Yuan
Year Period-end amount Period-beginning amount Remarks
2016 12,973,257.02 12,973,257.02
2017 7,431,196.64 7,431,196.64
2018 9,231,815.77 9,295,488.88
2019 6,429,382.30 6,546,777.27
2020 10,444,329.02 10,444,329.02
2021 9,901,435.09
Total 56,411,415.84 46,691,048.83 -
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
16. Other non-current assets
Unit: Yuan
Item Closing balance Opening balance
Prepayment for software
Prepayment for engineering in the electronics market 848,593.64 5,103,811.14
Total 848,593.64 5,103,811.14
17. Short-term loans
(1) Classification of short-term loans
Unit: Yuan
Item Closing balance Opening balance
Pledge loans 21,438,652.00 42,759,630.48
Mortgage loans 290,000,000.00 315,000,000.00
Borrowing on credit 10,000,000.00
Total 311,438,652.00 367,759,630.48
Notes on the classification of short-term loans:
i. The collateral of the pledge loan is the export tax rebate of Shenzhen SEG E-Commerce Co., Ltd., a subsidiary of the Company.
18. Accounts payable
(1) List of accounts payable
Unit: Yuan
Item Closing balance Opening balance
Payment for goods 23,663,551.07 84,158,671.54
Others 863,112.62 5,750,110.44
Total 24,526,663.69 89,908,781.98
19. Advance receipts
(1) List of advance receipts
Unit: Yuan
Item Closing balance Opening balance
Advance brand royalty 8,906,055.45 11,452,476.85
Advance rental payment 87,715,324.08 111,836,641.23
Advance payment for goods 48,518,993.35 53,693,141.53
Advance advertising payment 5,287,090.98 8,013,712.80
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Others 4,879,598.16 5,434,148.64
Total 155,307,062.02 190,430,121.05
20. Wages payable
(1) List of payroll payable
Unit: Yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Short-term payroll 21,780,103.03 29,772,242.45 44,092,156.09 7,460,189.39
2. Welfare after leave -
69,031.13 1,390,690.75 1,390,419.55 69,302.33
defined contribution plan
3. Dismissal welfare 24,503.00 24,503.00 0.00
Other welfare due within
0.00 0.00 0.00
one year
Total 21,849,134.16 31,187,436.20 45,507,078.64 7,529,491.72
(2) List of short-term payroll
Unit: Yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Wages, bonuses,
19,480,254.22 26,026,240.24 39,872,167.53 5,634,326.93
allowances and subsidies
2. Employee welfare 401,274.44 401,274.44 0.00
3. Social insurance
89,152.51 1,283,936.64 1,363,936.64 9,152.51
premiums
Work injury insurance 27,123.44 27,123.44 0.00
Maternity insurance 49,903.10 49,903.10 0.00
Basic medical insurance 88,756.51 803,191.60 880,191.60 11,756.51
Supplementary medical
396.00 5,720.00 5,720.00 396.00
insurance
4. Housing fund 1,265,986.46 1,466,082.22 1,569,641.43 1,162,427.25
5. Labor union expenditure
and employee education 944,709.84 399,481.91 716,337.55 627,854.20
fund
Other short-term payroll 195,227.00 168,798.50 26,428.50
Total 21,780,103.03 29,772,242.45 44,092,156.09 7,460,189.39
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
(3) Defined contribution plan
Unit: Yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Pension insurance 68,043.51 799,048.10 798,776.90 68,314.71
Unemployment insurance
987.62 591,642.65 591,642.65 987.62
premium
3. Supplementary pension
0.00
payment
Total 69,031.13 1,390,690.75 1,390,419.55 69,302.33
21. Taxes payable
Unit: Yuan
Item Closing balance Opening balance
Value-added tax 1,486,940.24 169,594.16
Business tax -3,095,394.16 1,424,420.92
Corporate income tax 21,351,544.22 28,476,563.20
Individual income tax 1,439,614.04 805,153.42
Urban maintenance and construction tax -9,965.70 178,371.98
Education surtax -58,358.39 102,484.34
Housing property tax 2,158,907.17 2,939,568.67
Stamp tax and water fund 38,840.51 532,994.96
Others 952,884.40 15,878.42
Total 24,265,012.33 34,645,030.07
22. Interest payable
Unit: Yuan
Item Closing balance Opening balance
Interest payable on short-term loans 698,717.58 516,758.34
Total 698,717.58 516,758.34
23. Dividends payable
Unit: Yuan
Item Closing balance Opening balance
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Common stock dividends 18,966,398.39 2,218,224.58
Total 18,966,398.39 2,218,224.58
24. Other payables
(1) Other payables listed based on nature
Unit: Yuan
Item Closing balance Opening balance
Deposit and security deposit 129,468,386.91 117,687,835.08
Central air conditioner maintenance cost and
13,288,284.61 12,975,174.61
special maintenance fund
Receipts under custody 10,788,431.53 16,469,845.49
Funds from related parties 2,110,695.41 2,753,679.48
Water and electricity charges, rental, and others
71,884,610.63 44,443,351.03
payable of the electronics market
Total 227,540,409.09 194,329,885.69
25. Estimated liabilities
Unit: Yuan
Item Closing balance Opening balance Cause
Pending litigation 9,700,000.00 7,000,000.00
Total 9,700,000.00 7,000,000.00 -
Note to important assumption and estimation related to important estimated liabilities
In March 2013, Nanning SEG leased the house located on 1F and 2F of podium building of Nanning Zhidi Square at 158 East Renmin Road,
Xingning District, Nanning as the electronics market. The agreed term of tenancy is from March 18, 2013 to March 17, 2025. Due to a large area
of water seepage and leaking existing with the house leased, Nanning SEG lodged a lawsuit at Xingning District People's Court after negotiation
with Haiqi Company for several times with no solution achieved. As Nanning SEG failed to pay the rental and breached the contract, Nanning
SEG was also accused by Haiqi Company at the same court.
On June 28, 2016, the lawsuit was dismissed by Nanning Xingning District People's Court in the (2015) X. M. Y. C. Zi. Civil Judgment No.
1590. In the (2015) X. M. Y. C. Zi. Civil Judgment No. 1393, RMB 12,000,000 was involved in the case, and the Company decided not to file an
appeal. The Company accrued the estimated liabilities RMB 7,000,000 for the case in 2015. Nanning SEG has estimated the rental payable RMB
2,300,000. According to the judgment, the Company additionally accrued the compensation RMB 2,700,000.
26. Deferred income
Unit: Yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance Cause
period period
Government subsidies 9,634,114.77 35,628.12 9,598,486.65
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Total 9,634,114.77 35,628.12 9,598,486.65 -
Items involving government subsidies:
Unit: Yuan
Amount of
Amount of new Relevant to
non-operating
Liability item Opening balance subsidies in the Other changes Closing balance assets/relevant to
income in the
current period income
current period
Subsidies for online
88,110.37 35,628.12 52,482.25 Relevant to assets
SEG projects
Subsidies for
46,004.40 46,004.40 Relevant to income
project funds
Support project for
construction of
9,500,000.00 9,500,000.00 Relevant to assets
Nantong SEG
Electronics Market
Total 9,634,114.77 35,628.12 9,598,486.65 -
27. Share capital
Unit: Yuan
Increase/decrease of the change (+)
Opening balance Issue of new Capitalization of Closing balance
Bonus share Others Subtotal
shares public reserve
Sum of shares 784,799,010.00 784,799,010.00
28. Capital reserves
Unit: Yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Capital premium (capital
322,339,973.81 322,339,973.81
share premium)
Other capital reserves 184,205,857.30 7,812.30 184,213,669.60
Total 506,545,831.11 7,812.30 506,553,643.41
29. Other comprehensive income
Unit: Yuan
Item Opening Amount incurred in the report period Closing
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
balance Less: gains and balance
Pre-tax losses Amount after Amount after
amount transferred in tax tax
Less: Income
obtained in from other attributable attributable
tax
the current comprehensive to parent to minority
period income in the company shareholders
current period
II. Other comprehensive income that can
326,662.48 -155,907.21 -38,988.83 -77,828.18 -39,090.20 248,834.30
be categorized as gains and losses
Including: Shares of the investee of other
comprehensive income to be reclassified
48.10 48.10 48.10
into gains and losses under the equity
method
Gains and losses from changes of fair
value of the available-for-sale financial 326,662.48 -155,955.31 -38,988.83 -77,876.28 -39,090.20 248,786.20
assets
Held-to-maturity investments classified
as gains and losses from the 0.00
available-for-sale financial assets
(4) Effective gains or loss from cash
0.00
flows
(5) Foreign currency translation
0.00
differences
Total of other comprehensive income 326,662.48 -155,907.21 -38,988.83 -77,828.18 -39,090.20 248,834.30
30. Surplus reserve
Unit: Yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Statutory surplus reserve 109,922,336.87 109,922,336.87
Total 109,922,336.87 109,922,336.87
31. Undistributed profits
Unit: Yuan
Item Current period Previous period
Before adjustment undistributed profits at the end of the
73,532,388.70
previous period
After adjustment undistributed profit at the beginning 73,532,388.70
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
of period
Add: Net profits attributable to the parent company
26,856,270.42
owner in the current period
Other distributions to shareholders 23,669,414.47
Undistributed profits at the end of period 76,719,244.65
32. Operating income and operating cost
Unit: Yuan
Amount incurred in the current period Amount incurred in the previous period
Item
Income Cost Income Cost
Main business 412,250,832.76 320,996,877.99 425,219,054.09 317,303,931.44
Total 412,250,832.76 320,996,877.99 425,219,054.09 317,303,931.44
33. Business taxes and surcharges
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Business tax 8,574,445.98 12,116,694.54
Urban maintenance and construction tax 880,743.75 926,364.05
Education surtax 566,286.99 617,537.62
Others 108,197.42 87,433.93
Total 10,129,674.14 13,748,030.14
34. Financing expenses
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Interest expenses 2,866,946.54 10,723,583.83
Less: Interest income 2,161,658.98 9,503,644.66
Loss on exchange -301,807.07 -671,695.25
Others 351,859.63 294,813.31
Total 755,340.12 843,057.23
35. Investment income
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Long-term equity investment income by the equity
-4,826,750.85 -4,892,855.94
method
Investment income during the possession of
750,000.00
available-for-sale financial assets
Others (financial products) 6,093,203.87 9,594,819.58
Total 1,266,453.02 5,451,963.64
36. Non-operating income
Unit: Yuan
Amount incurred in the current Amount incurred in the previous Amount included in current
Item
period period non-recurring gains and losses
Total gains on disposal of
0.00 18,693.10
non-current assets
Including: Gain on disposal of
18,693.10
fixed assets
Government subsidies 101,608.00 223,828.12 101,608.00
Liquidated damages 61,872.11 301,209.17 61,872.11
Others 254,908.25 502,248.72 254,908.25
Total 418,388.36 1,045,979.11 418,388.36
Government subsidies included in current gains and losses:
Unit: Yuan
Influence on Amount
Amount Relevant to
the profit and Special incurred in the
Subsidy item Fund source Purpose Property and type incurred in the assets/relevant
loss of the subsidy previous
current period to income
current year period
Shenzhen Subsidy gained from
Science and engagement in special
Subsidies for Technology, industries encouraged
Relevant to
online SEG Industry, Allowance and supported by the Yes No 35,628.12 35,628.12
assets
projects Trade, and state (legally gained
Information according to national
Commission policies)
Shenzhen Subsidy gained from
Futian engagement in special
Subsidies for District industries encouraged Relevant to
Allowance No No 188,200.00
project funds Economic and supported by the income
Promotion state (legally gained
Council according to national
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Influence on Amount
Amount Relevant to
the profit and Special incurred in the
Subsidy item Fund source Purpose Property and type incurred in the assets/relevant
loss of the subsidy previous
current period to income
current year period
policies)
Subsidy gained from
Guiding funds engagement in special
Suzhou
for industries encouraged
Wujiang Relevant to
development Reward and supported by the Yes No 50,000.00
Finance income
of service state (legally gained
Bureau
industry according to national
policies)
Subsidy gained from
Nanjing engagement in special
Post Social industries encouraged
Relevant to
stabilization Security Allowance and supported by the Yes No 15,979.88
income
subsidy Management state (legally gained
Center according to national
policies)
Total - - - - - 101,608.00 223,828.12 -
Other note:
37. Non-operating expenses
Unit: Yuan
Amount incurred in the current Amount incurred in the previous Amount included in current
Item
period period non-recurring gains and losses
Total loss from disposal of
9,316.22 196,424.21 9,316.22
non-current assets
Including: loss from disposal of
9,316.22 196,424.21 9,316.22
fixed assets
Compensation for loss 2,710,190.00 605,580.63 2,710,190.00
Others 39,379.12 13,784.10 39,379.12
Total 2,758,885.34 815,788.94 2,758,885.34
38. Income tax expenses
(1) Income tax
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Income tax of the current period 22,632,168.37 20,575,833.86
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Deferred income tax -593,451.65 -454,462.94
Total 22,038,716.72 20,121,370.92
(2) Adjustment process of accounting profit and income tax
Unit: Yuan
Item Amount incurred in the current period
Total profit 66,256,899.51
Income tax calculated according to statutory or applicable tax rate 16,564,224.88
Impact of different tax rates applicable to subsidiaries -893,339.17
Impact of non-taxable income 1,206,687.71
Impact of non-deductible costs, expenses and losses 424,082.57
Impact of deferred income tax assets unrecognized in the previous
45,267.00
period on deductible losses
Impact of deferred income tax assets unrecognized in current period on
4,691,793.73
deductible temporary difference or deductible losses
Income tax 22,038,716.72
39. Items in the cash flow statement
(1) Other cash received from operating activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Acquisition of security deposit for land 60,000,000.00
Current account 15,833,361.21 35,059,959.29
Goods payment collected from tenants 92,828,409.85 130,068,994.68
Interest income 2,161,658.98 4,764,834.98
Non-operating income 261,757.88 181,571.66
Total 111,085,187.92 230,075,360.61
(2) Other cash paid related to operating activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Incomings and outgoings 21,991,291.71 43,627,781.29
Goods payment paid for tenants 67,321,062.09 125,990,506.28
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Cash expenses 24,818,276.07 21,024,437.31
Non-operating expenses 50,682.25 1,176,961.97
Total 114,181,312.12 191,819,686.85
Note to other cash paid related to operating activities:
(3) Other cash received related to financing activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Cash received from disposal of fractional
7,812.30
shares
Total 7,812.30
(4) Other paid cash related to financing activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Interbank financing of related parties 57,650,000.00
Payment for cash deposit
Payment for loan interest of related parties 110,222.92
Payment for issuance of short-term financing
1,524,692.51 669,500.00
bonds
Total 1,524,692.51 58,429,722.92
40. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
Unit: Yuan
Supplementary data Amount incurred in the current period Amount of the previous period
1. Reconciliation of net income to cash flow from
- -
operating activities
Net profit 44,218,182.79 52,065,834.26
Plus: Asset impairment provision -3,962,625.52 6,713,966.89
Depreciation of fixed assets, oil & gas assets and
11,834,646.85 11,982,280.62
consumable biological assets
Amortization of intangible assets 166,585.12 142,489.91
Amortization of long-term expenses to be
6,495,757.24 6,574,494.06
apportioned
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Supplementary data Amount incurred in the current period Amount of the previous period
Loss on disposal of fixed assets, intangible assets,
and other long-term assets (Profit will be marked 9,316.22 -177,731.11
with "-")
Financial expenses (enter "-" for income) 2,866,946.54 843,057.23
Income from investment (enter "-" for profit) -1,266,453.02 -5,451,963.64
Decrease in deferred tax assets (enter "-" for
-1,678,491.72
increase)
Increase in deferred tax liabilities (enter "–" for
-593,451.65 -320,684.81
decrease)
Inventory decrease (enter "-" for increase) -126,395,646.47 -135,253,821.65
Decrease in accounts receivable related to
-70,788,237.75 158,080,537.33
operating activities (enter "-" for increase)
Increase in accounts payable related to operating
38,100,951.25 -192,107,800.99
activities (enter "-" for decrease)
Net cash flow from operating activities -99,314,028.40 -98,587,833.62
2. 2. Major investing and financing activities that
- -
involve no cash payments and receipts:
3. Change in cash and cash equivalents: - -
Closing balance of cash 143,304,754.16 155,272,010.47
Less: Opening balance of cash 275,523,429.10 382,056,680.70
Net increase in cash and cash equivalents -132,218,674.94 -226,784,670.23
(2) Composition of cash and cash equivalents:
Unit: Yuan
Item Closing balance Opening balance
I. Cash 143,304,754.16 275,523,429.10
Including: Cash on hand 532,393.65 526,467.72
II. Bank deposits available for payment at any
142,717,238.17 274,816,839.04
time
III. Closing balance of cash and cash equivalents 143,304,754.16 275,523,429.10
41. Assets of which the ownership or the right to use is restricted
Unit: Yuan
Item Closing book value Reason for restriction
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Deposit and performance bond for credit card
Monetary funds
repayment
Fixed assets 11,384,175.51 Collaterals for bank loans
Investment properties 99,465,255.47 Collaterals for bank loans
Total 110,849,430.98 -
42. Foreign currency monetary projects
(1) Foreign currency monetary projects
Unit: Yuan
Closing balance of foreign
Item Discount exchange rate Closing balance of converted RMB
currency
USD 100.00 6.6447 664.47
HK$ 239.17 0.8564 204.83
USD 8,822,851.05 6.6447 58,625,198.38
VIII. Change in consolidation scope
1. Others
Twenty-two entities are included in the current consolidated financial statements, namely:
Proportion of Proportion of voting
Subsidiary name Type of subsidiary Level
shareholding (%) right(%)
Shenzhen SEG Baohua Enterprise Development
Holding subsidiary I 66.58 66.58
Co., Ltd.
Shenzhen Mellow Orange Business Hotel Holding grandson
II 66.58 66.58
Management Co., Ltd company
Shenzhen SEG Industrial Investment Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Changsha SEG Development Co., Ltd. Holding subsidiary I 46.00 51.00
Shenzhen SEG Electronics Market Management
Holding subsidiary I 70.00 70.00
Co., Ltd.
Suzhou SEG Electronics Market Co., Ltd. Holding subsidiary I 45.00 45.00
Xi'an SEG Electronics Market Co., Ltd. Holding subsidiary I 65.00 65.00
Shenzhen SEG Credit Co., Ltd. Holding subsidiary I 53.02 53.02
Shenzhen SEG E-Commerce Co., Ltd. Holding subsidiary I 51.00 51.00
Shenzhen SEG Electronics Market Management Wholly-owned subsidiary I 100.00 100.00
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Proportion of Proportion of voting
Subsidiary name Type of subsidiary Level
shareholding (%) right(%)
Co., Ltd.
Xi'an Hairong SEG Electronics Market Co.,
Holding subsidiary I 51.00 51.00
Ltd.
Wujiang SEG Electronics Market Co., Ltd. Holding subsidiary I 51.00 51.00
Wuxi SEG Electronics Market Co., Ltd Holding subsidiary I 51.00 51.00
Shunde SEG Electronics Market Management
Wholly-owned subsidiary I 100.00 100.00
Co., Ltd.
Nanning SEG Electronics Market Management
Wholly-owned subsidiary I 100.00 100.00
Co., Ltd.
Nantong SEG Times Square Development Co.,
Wholly-owned subsidiary I 100.00 100.00
Ltd.
Yantai SEG Times Square Development Co.,
Holding subsidiary I 90.00 90.00
Ltd.
Nantong SEG Commercial Operation
Wholly-owned subsidiary I 100.00 100.00
Management Co., Ltd.
Suzhou SEG Digital Plaza Management Co.,
Wholly-owned subsidiary I 100.00 100.00
Ltd.
Xi'an Fengdong New Town SEG Times Square
Wholly-owned subsidiary I 100.00 100.00
Properties Co., Ltd.
Suzhou SEG Intelligent Technology Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Shenzhen SEG Longyan New Energy
Holding subsidiary I 50.00 50.00
Application and Development Co., Ltd.
For the cause for difference between the proportion of shareholding and the proportion of voting rights and the basis for
control of the invested entity even with half of voting rights or less, see "Attachment 8: Equities in other entities – (1)
Equities in subsidiaries".
Compared with the previous period, two subsidiaries are added to entities included in the consolidated financial statements
of the current period.
IX. Equity in other entities
1. Equity in subsidiaries
(1) Composition of enterprise group
Subsidiary name Main place of Place of Nature of business Shareholding ratio Method of
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
business registration Direct Indirect acquisition
Xi'an SEG Electronics Electronics market lease Investment and
Xi'an Xi'an 65.00%
Market Co., Ltd. management establishment
Shenzhen SEG
Electronics market lease Investment and
Electronics Market Shenzhen Shenzhen 70.00%
management establishment
Management Co., Ltd.
Suzhou SEG
Electronics market lease Investment and
Electronics Market Su Zhou Su Zhou 45.00%
management establishment
Co., Ltd.
Shenzhen Mellow Hotel management,
Investment and
Orange Business Hotel Shenzhen Shenzhen consultancy and property 66.58%
establishment
Management Co., Ltd management
Petty loan business (pooling
public deposits is
Shenzhen SEG Credit Investment and
Shenzhen Shenzhen prohibited) within the 36.00% 17.02%
Co., Ltd. establishment
administrative region of
Shenzhen.
Shenzhen SEG Investment and
Shenzhen Shenzhen E-commerce 51.00%
E-Commerce Co., Ltd. establishment
Market facilities leasing,
Shenzhen SEG
property management, sales Investment and
Electronics Market Nanjing Nanjing 100.00%
of electronic products and establishment
Management Co., Ltd.
advertisement
Xi'an Hairong SEG Property leasing, sales of
Investment and
Electronics Market Xi'an Xi'an electronic products and 51.00%
establishment
Co., Ltd. advertisement
Wujiang SEG
Electronics market lease Investment and
Electronics Market Wujiang Wujiang 51.00%
management establishment
Co., Ltd.
Wuxi SEG Electronics Electronics market lease Investment and
Wuxi Wuxi 51.00%
Market Co., Ltd management establishment
Shunde SEG
Electronics market lease Investment and
Electronics Market Foshan Foshan 100.00%
management establishment
Management Co., Ltd.
Nanning SEG
Electronics market lease Investment and
Electronics Market Nanning Nanning 100.00%
management establishment
Management Co., Ltd.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Main place of Place of Shareholding ratio Method of
Subsidiary name Nature of business
business registration Direct Indirect acquisition
Nantong SEG Times
Investment and
Square Development Nantong Nantong real estate development 100.00%
establishment
Co., Ltd.
Shenzhen SEG Baohua Merger of
Property lease and
Enterprise Shenzhen Shenzhen 66.58% enterprises under
management
Development Co., Ltd. common control
Shenzhen SEG Merger of
Investment in industrial and
Industrial Investment Shenzhen Shenzhen 100.00% enterprises under
commercial business
Co., Ltd. common control
Merger of the
Changsha SEG enterprises under
Changsha Changsha Property lease 46.00%
Development Co., Ltd. the control of a
same entity
Yantai SEG Times
Investment and
Square Development Yantai Yantai real estate development 90.00%
establishment
Co., Ltd.
Nantong SEG
Investment and
Commercial Operation Nantong Nantong - 100.00%
establishment
Management Co., Ltd.
Suzhou SEG Digital
Investment and
Plaza Management Su Zhou Su Zhou - 100.00%
establishment
Co., Ltd.
Xi'an Fengdong New
Town SEG Times Investment and
Xi'an Xi'an real estate development 100.00%
Square Properties Co., establishment
Ltd.
Suzhou SEG
Investment and
Intelligent Technology Su Zhou Su Zhou Trading 100.00%
establishment
Co., Ltd.
Shenzhen SEG
Longyan New Energy Investment and
Shenzhen Shenzhen New energy development 50.00%
Application and establishment
Development Co., Ltd.
Difference between the shareholding ratio and the ratio of voting power
For Changsha SEG Development Co., Ltd. (originally named Changsha Emerging Development Co., Ltd.), the current
capital stock structure is as follows: The Company holds 46% of shares and is the largest shareholder. In addition, according
to the Memorandum of Cooperation Concerning the Stock Equity Project of Joint Investment and Acquisition of Changsha
Emerging Development Co., Ltd. signed by and between the Company and Hong Kong Jinhong Group on October 8 2008,
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Hong Kong Jinhong Group agreed to give up the 5% of voting power, which would be exercised by the Company, and the
voting power ratio of the Company is 51%. Half of the directors, the Chairman of the Board, the General Manager, the
Chief Financial Officer and the management team of Changsha SEG Development Co., Ltd are all dispatched by the
Company. Therefore, the Company has obtained the control of Changsha SEG Development Co., Ltd.
Basis for half of or less voting power with control of the investee and more than half of voting power with control of
the investee
Half of the directors, the Chairman of the Board, the General Manager, the Chief Financial Officer and the management
team of Suzhou SEG The electronics market Management Co., Ltd are all dispatched by the Company so that the Company
actually controls the operation of Suzhou SEG.
(2) Important non-wholly-owned subsidiaries
Unit: Yuan
Current dividends Minority shareholders'
Equity proportion of Current gains of losses of
Subsidiary name distributed to minority equity balance at the end
minority shareholders minority shareholders
shareholders of the period
Shenzhen SEG Credit Co., Ltd. 46.98% 6,623,617.77 14,490,000.00 81,090,646.88
Changsha SEG Development Co.,
54.00% 1,790,571.99 36,219,633.11
Ltd.
Shenzhen SEG Baohua
33.42% 4,911,495.19 6,177,600.00 33,510,984.03
Enterprise Development Co., Ltd.
Difference between the shareholding ratio and the ratio of voting power of minority shareholders:
Changsha SEG Development Co., Ltd. (originally named Changsha Emerging Development Co., Ltd.), the current capital
stock structure is as follows: The Company holds 46% of shares and is the largest shareholder. In addition, according to the
Memorandum of Cooperation Concerning the Stock Equity Project of Joint Investment and Acquisition of Changsha
Emerging Development Co., Ltd. signed by and between the Company and Hong Kong Jinhong Group on October 8 2008,
Hong Kong Jinhong Group agreed to give up 5% of the voting power, which would be exercised by the Company. As a
result, Hong Kong Jinhong Group holds 40% of shares and 35% of the voting power.
(3) Main financial information of important non-wholly-owned subsidiaries
Unit: Yuan
Closing balance Opening balance
Subsidiary
Non-curre Non-curre
name Current Non-current Current Total Current Non-current Current Total
Total assets nt Total assets nt
assets: assets: liabilities: liabilities assets: assets: liabilities: liabilities
liabilities: liabilities:
Shenzhen
59,974,18 506,374,314. 566,348,502. 393,741,762. 393,741,762. 43,081,968. 476,007,451. 519,089,420. 329,081,482. 329,081,482
SEG Credit
8.78 14 92 00 00 84 60 44 77 .77
Co., Ltd.
Changsha
SEG 19,815,16 66,331,113.4 86,146,274.1 19,072,879.4 19,072,879.4 15,438,729. 68,199,562.6 83,638,292.1 19,880,771.5 19,880,771.
Development 0.65 7 2 7 7 45 7 2 3 53
Co., Ltd.
Shenzhen 106,070,7 52,545,493.0 158,616,283. 58,219,484.4 124,555.0 58,344,039.4 97,334,289. 52,503,037.0 149,837,326. 45,495,566.8 163,543.8 45,659,110.7
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
SEG Baohua 90.71 4 75 6 3 9 19 2 21 7 6 3
Enterprise
Development
Co., Ltd.
Unit: Yuan
Amount incurred in the report period Amount incurred in the previous period
Subsidiary name Total Cash flow of Total Cash flow of
Operating income Net profit comprehensive operating Operating income Net profit comprehensive operating
income activities income activities
Shenzhen SEG
49,577,595.91 14,098,803.25 14,098,803.25 -27,673,263.51 48,064,462.25 12,426,082.81 12,426,082.81 -33,638,954.38
Credit Co., Ltd.
Changsha SEG
Development Co., 11,509,734.96 3,315,874.06 3,315,874.06 4,093,245.31 11,490,331.21 1,315,968.42 1,315,968.42 6,346,992.49
Ltd.
Shenzhen SEG
Baohua Enterprise
41,085,826.65 14,696,275.26 14,579,308.78 3,096,434.93 42,445,648.66 13,595,029.71 13,911,794.97 9,349,544.27
Development Co.,
Ltd.
2. Equity in joint arrangements or associates
(1) Important joint ventures or associates
Shareholding ratio Accounting
treatment method
Name of joint venture Main place of Place of
Nature of business for investment in
or associate business registration Direct Indirect joint venture or
associate
Shenzhen Huakong
Shenzhen Shenzhen Manufacturing 20.00% Equity method
SEG Co., Ltd.
Shanghai SEG
Electronics Market Shanghai Shanghai Service industry 35.00% Equity method
Management Co., Ltd.
Shenzhen International
Consumer Electronics
Shenzhen Shenzhen Exhibition 30.00% Equity method
Exhibition/Exchange
Center Co., Ltd.
(2) Main financial information about important joint ventures
Unit: Yuan
Closing balance/amount incurred in the current period Opening balance/amount incurred in the previous period
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Shenzhen Shenzhen
Shanghai SEG International Shanghai SEG International
Shenzhen Huakong Electronics Market Consumer Shenzhen Huakong Electronics Market Consumer
SEG Co., Ltd. Management Co., Electronics SEG Co., Ltd. Management Co., Electronics
Ltd. Exhibition/Exchange Ltd. Exhibition/Exchange
Center Co., Ltd. Center Co., Ltd.
Current assets: 373,956,916.16 22,154,876.66 30,000,000.00 395,623,546.83 20,901,493.33
Including: Cash
and cash 178,367,249.86 6,720,794.24 30,000,000.00 214,877,742.71 1,518,901.94
equivalent
Non-current assets 361,767,967.50 176,002.47 362,254,332.48 210,798.06
Total assets 735,724,883.66 22,330,879.13 30,000,000.00 757,877,879.31 21,112,291.39
Current liabilities 66,603,007.25 12,309,947.01 94,113,723.78 10,747,847.59
Non-current
1,881,551.16 1,369,185.93
liabilities
Total liabilities 68,484,558.41 12,309,947.01 95,482,909.71 10,747,847.59
Minority
shareholders' 76,561,972.97 48,141,144.00
equity
Shareholders'
equity attributable
590,678,352.28 10,020,932.12 30,000,000.00 614,253,825.60 10,364,443.80
to the parent
company
Net asset shares
calculated based on 118,135,670.46 3,507,326.24 9,000,000.00 122,857,318.61 3,627,555.33
shareholding ratio
Adjustment 58,892,395.94 -239,521.51 58,885,842.46 -248,142.52
- Others 58,892,395.94 -239,521.51 58,885,842.46 -248,142.52
Book value of
equity investment 177,028,066.40 3,267,804.73 9,000,000.00 185,122,573.88 3,379,412.81
in joint ventures
Fair value of equity
investment in joint
1,949,019,919.44 2,551,041,568.11
ventures with
public offer
Operating income 42,719,787.19 3,084,877.60 16,994,189.98 1,282,610.27
Financial cost -1,923,861.70 -272.15 -382,325.95 -431.99
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Closing balance/amount incurred in the current period Opening balance/amount incurred in the previous period
Shenzhen Shenzhen
Shanghai SEG International Shanghai SEG International
Shenzhen Huakong Electronics Market Consumer Shenzhen Huakong Electronics Market Consumer
SEG Co., Ltd. Management Co., Electronics SEG Co., Ltd. Management Co., Electronics
Ltd. Exhibition/Exchange Ltd. Exhibition/Exchange
Center Co., Ltd. Center Co., Ltd.
Income tax
-367,558.89
payment
Net profit -26,861,012.87 -318,880.23 -28,588,277.77 -1,571,178.03
Other
comprehensive 240.52
income
Total
comprehensive -26,860,772.35 -318,880.23 -28,588,277.77 -1,571,178.03
income
Dividends received
from joint ventures 500,000.00
in the current year
X. Disclosure of fair value
1. Period-end fair value of assets and liabilities measured based on fair value
Unit: Yuan
Period-end fair value
Item Level-1 fair value Level-2 fair value Level-3 fair value
Total
measurement measurement measurement
(I) Persistent fair value measurement - - - -
(II) Available-for-sale financial assets 588,625.10 588,625.10
(2) Equity instrument investment 588,625.10 588,625.10
II. Non-persistent fair value measurement - - - -
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
XI. Related parties and related party transactions
1. Information on the parent company of the Company
Percentage of the Percentage of the
Company's shares Company's voting
Name of parent company Place of registration Nature of business Registered Capital
held by the parent shares held by the
company parent company
Shenzhen SEG Group Co., Comprehensive
Shenzhen 135,542.00 30.24% 30.24%
Ltd. business
Information on subsidiaries of the Company:
The final controlling party of the enterprise is Shenzhen State-owned Assets Supervision and Administration Commission.
2. Information on subsidiaries of the Company
For information on subsidiaries of the Company, see the note.
3. Information on the Company's joint ventures and associates
For details about important joint ventures or associates of the enterprises, see the note.
Information on other joint ventures or associates involved in related party transaction with the Company in the current period or the previous
period:
Name of joint venture or associate Relation with the Company
4. Information on other related parties
Name of other related parties Relation with the Company
Shenzhen SEG Property Development Co., Ltd. Subsidiary of shareholders
Shenzhen SEG Group Service Co., Ltd Subsidiary of shareholders
Shenzhen SEG Computers Co., Ltd Subsidiary of shareholders
Shenzhen SEG Hi-tech Industrial Co., Ltd. Subsidiary of shareholders
Shenzhen SEG Real Estate Investment Co., Ltd. Subsidiary of shareholders
Shenzhen SEG Business Operation Co., Ltd. Subsidiary of the controlling shareholder
5. Information on related transactions
(1) Related trusted management, contracting and mandatory administration and initial contracting
Trusted management/contracting of the Company:
Unit: Yuan
Name of Type of Pricing basis for income Confirmed trust
Name of entrusted
entrusting/contract entrusted/contracted Starting date Ending date from entrusted profit/contracting
party/contractor
issuing party assets management/contracting profit in the report
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
period
SEG
Shenzhen SEG Shenzhen SEG Sunday, February Sunday, January
Communications Trusteeship Agreement
Group Co., Ltd. Co., Ltd. 01, 2015 31, 2016
Market
(2) Leases between the Company and related parties
The Company acts as the lessee:
Unit: Yuan
Rental recognized in the current Rental recognized in the previous
Name of lessor Type of leased assets
period period
The warehouse with its area of
Shenzhen SEG Group Co., Ltd. 809.26 square meters on the 8th 328,074.00 310,587.00
floor of SEG Plaza
Subsidiaries of the Company act as the lessee:
Rental recognized in the current Rental recognized in the previous
Name of lessee Type of leased assets
period period
Shenzhen SEG Business Operation 15F, SEG Plaza covering 687.01 253,960.20
2
Co., Ltd. m
Shenzhen SEG Properties 12F, West of SEG Science and 411,390.66
Development Co., Ltd. Technology Park covering 909.79
m2
Total 411,390.66 253,960.20
(3) Remuneration of key managers
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Remuneration of key managers 124.51 132.46
6. Accounts receivable from and payable to related parties
(1) Receivables
Unit: Yuan
Closing balance Opening balance
Project name Related party
Book balance Bad debt provision Book balance Bad debt provision
Shenzhen SEG Property
Other receivables 10,325.00
Development Co., Ltd.
Shenzhen SEG Group
227,149.60
Co., Ltd.
Shenzhen SEG Property 20,100.00 20,100.00
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Management Co., Ltd.
Shenzhen SEG Real
Estate Investment Co., 139,342.00 139,342.00
Ltd.
(2) Payables
Unit: Yuan
Project name Related party Period-end book balance Period-end book balance
Dividends payable Shenzhen SEG Computers Co., Ltd 781,110.00 662,310.00
Shenzhen SEG Group Co., Ltd. 11,970,000.00
Shenzhen SEG Property Development Co.,
2,520,000.00
Ltd.
XII. Commitments and contingencies
1. Important commitments
Important commitment on the balance sheet date
(1) Signed lease contract that is being performed or will be performed and minimum rental to be paid in the next year
Shenzhen SEG
Suzhou SEG
Xi'an SEG Shenzhen SEG Xi'an Hairong Electronics Wujiang SEG
Electronics Market
Remaining lease term Electronics Electronics Market SEG Electronics Market Electronics
Management Co.,
Market Co., Ltd. Management Co., Ltd. Market Co., Ltd. Management Co., Market Co., Ltd.
Ltd.
Ltd.
Within one year (including
13,125,000.00 16,024,907.88 5,060,198.20 - - -
one year)
Above one year but within
two years (including two 13,375,000.00 16,234,383.80 5,212,004.15 - - -
years)
Above two years but within
three years (including three 13,375,000.00 16,234,383.80 5,212,004.15 - - -
years)
Over 3 years 35,375,000.00 140,977,294.16 9,925,451.00 - - -
Total 75,250,000.00 189,470,969.64 25,409,657.50 Note *1 Note *2 Note *3
(Continued)
Nanning SEG Electronics Shunde SEG Wuxi SEG Electronics Suzhou SEG Digital Plaza
Remaining lease term
Market Management Co., Electronics Market Market Co., Ltd Management Co., Ltd.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Ltd. Management Co., Ltd.
Within one year (including one
4,800,000.00 - 13,054,290.12
year)
Above one year but within two
5,040,000.00 - 13,403,893.21
years (including two years)
Above two years but within three
5,040,000.00 - 13,403,893.21
years (including three years)
Over 3 years 38,047,508.73 - 69,228,846.75
Total 52,927,508.73 Note *4 109,090,923.29
Note *1: Under the cooperation agreement signed by and between both parties, Xi'an Hairong SEG Electronics Market Co., Ltd. pays the rental
according to 70% of profits of the electronics market. Therefore, the amount of rental in the future is uncertain.
Note *2: The rental of Shenzhen SEG Electronics Market Management Co., Ltd. is adjusted according to the CPI. Therefore, the amount of
rental in the future is uncertain.
Note *3: Under the cooperation agreement signed by and between both parties, Wujiang SEG Electronics Market Co., Ltd. pays the rental
according to 70% of pre-tax profits of the electronics market. Therefore, the amount of rental in the future is uncertain.
Note *4: Wuxi SEG Electronics Market Co., Ltd. is exempted from the rental within the three years before opening of the Company and pays the
rental in the fourth year according to 70% of the pre-tax profits of the electronics market. Therefore, the amount of rental in the future is
uncertain.
Except the preceding commitments, the Company has not significant commitments that shall be disclosed or have not been disclosed as of June
30, 2016.
(2) Information on mortgaged assets
As of the end of the report period, details of properties mortgaged by the Company to loan from the bank and closing net value of those
properties are shown below:
Owner of property Name of property Closing net value Remarks
Shenzhen SEG Co., Ltd. 4F, SEG Plaza 46,120,804.67 Mortgaged to loan from the bank
Shenzhen SEG Co., Ltd. Some floors of Contemporary 53,344,450.80 Mortgaged to loan from the bank
Window
Shenzhen SEG Co., Ltd. 31F, Stars Plaza 9,480,414.61 Mortgaged to loan from the bank
Shenzhen SEG Co., Ltd. Other houses 1,903,760.90 Mortgaged to loan from the bank
Total 110,849,430.98
2. Contingencies
(1) Contingencies on the balance sheet date
Contingencies arising from pending litigation or arbitration and financial impacts
In March 2013, Nanning SEG leased the house located on 1F and 2F of podium building of Nanning Zhidi Square at 158
East Renmin Road, Xingning District, Nanning as the electronics market. The agreed term of tenancy is from March 18,
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
2013 to March 17, 2025. Due to a large area of water seepage and leaking existing with the house leased, Nanning SEG
lodged a lawsuit at Xingning District People's Court after negotiation with Haiqi Company for several times with no
solution achieved. As Nanning SEG failed to pay the rental and breached the contract, Nanning SEG was also accused by
Haiqi Company at the same court.
On June 28, 2016, the lawsuit was dismissed by Nanning Xingning District People's Court in the (2015) X. M. Y. C. Zi.
Civil Judgment No. 1590. In the (2015) X. M. Y. C. Zi. Civil Judgment No. 1393, RMB 12,000,000 was involved in the
case, and the Company decided not to file an appeal. The Company accrued the estimated liabilities RMB 7,000,000 for the
case in 2015. Nanning SEG has estimated the rental payable RMB 2,300,000. According to the judgment, the Company
additionally accrued the compensation RMB 2,700,000 based on the possible payable. As of the end of the report, the
Company has recognized the accumulative estimated liabilities RMB 9,700,000.
(2) If the Company has no significant matters or contingencies to disclose, the Company shall also indicate it.
The Company has no significant matters or contingencies to disclose.
XIII. Other significant matters
1. Others
(I) Purchase of financial products with idle funds
On the second shareholders meeting held on July 21, 2014, the Proposal on Purchase of Financial Products Using Idle
Funds of the Company was passed, which allows the Company and its subsidiaries to invest and manage wealth by using
idle funds of no more than RMB 1,000,000,000. The general meeting of the Company approves that the general manager of
the Company to can make decisions on special projects and the management of the Company executes such decisions. The
investment period is from the date of resolution to June 30, 2016 (calculated since the time when the financial product is
purchased).
As of June 30, 2016, the amount of financial products purchased by the Company and its subsidiaries is as follows:
Unit: ten thousand Yuan
Wujiang SEG Shenzhen SEG Baohua Xi'an Hairong SEG
Shenzhen SEG Co., Wuxi SEG Electronics
Company name Electronics Market Enterprise Electronics Market Co.,
Ltd. Market Co., Ltd
Management Co., Ltd. Development Co., Ltd. Ltd.
Amount 3,800.00 1,100.00 8,000.00 920.00 2,050.00
Continued:
Unit: ten thousand Yuan
Shenzhen SEG Nanjing Nantong SEG Times
Changsha SEG Xi'an Electronics
Company name Electronics Market Plaza Management Co., Total
Development Co., Ltd. Market Co., Ltd.
Management Co., Ltd. Ltd.
Amount 550.00 320.00 1,900.00 100.00 18,740.00
XIV. Notes to the parent company financial statements
1. Accounts receivable
(1) Accounts receivable disclosed by type
Unit: Yuan
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Closing balance Opening balance
Class Book balance Bad debt provision Book Book balance Bad debt provision Book
Amount Percentage Amount Percentage value Amount Percentage Amount Percentage value
Accounts receivable
with an insignificant
amount individually,
8,869,182.88 100.00% 8,869,182.88 100.00% 8,869,182.88 100.00% 8,869,182.88 100.00%
for which bad debt
provision is
separately accrued
Total 8,869,182.88 100.00% 8,869,182.88 100.00% 8,869,182.88 100.00% 8,869,182.88 100.00%
Accounts receivable with a significant amount individually, for which bad debt provision is separately accrued at the end of period:
□ Applicable √ Not applicable
Accounts receivable in the combination, for which bad debt provision was accrued by the aging analysis method:
□ Applicable √ Not applicable
Accounts receivable in a combination, for which bad debt provisions are made using the Percentage of Total Accounts Receivable Outstanding
method
□ Applicable √ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
(2) Current accrued, recovered or reversed bad debt provision
The amount of the current accrued bad debt provision is RMB 0.00 Yuan and the amount of the current recovered or reversed bad debt provision
is RMB 0.00 Yuan.
(3) Accounts receivable with top 5 closing balance collected based on arrears party
Percentage in the total amount
Name of company Closing balance Accrued bad debt provision
of accounts receivable
Jiangsu Unicom 3,092,011.09 34.86 3,092,011.09
Shenzhen Liyuanshun Industrial Co., Ltd. 1,906,865.35 21.50 1,906,865.35
Shanghai Tianci Industrial Co., Ltd. 899,000.00 10.14 899,000.00
Zhejiang Financial Information Co., Ltd 786,000.00 8.86 786,000.00
Sichuan Huiyuan Electronics Co., Ltd. 480,000.00 5.41 480,000.00
Total 7,163,876.44 80.77 7,163,876.44
2. Other receivables
(1) Other receivables disclosed by type
Unit: Yuan
Class Closing balance Opening balance
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Book balance Bad debt provision Book balance Bad debt provision
Book value Book value
Amount Percentage Amount Percentage Amount Percentage Amount Percentage
Other
receivables
with single
8,530,276. 8,530,276.3 8,530,276.
significant 1.26% 33.32% 0.00 8,530,276.35 1.43% 100.00%
35 5 35
amount and
single bad debt
provision
Other
receivables
with bad debt
provision 652,725,6 652,724,52 570,672,790.8 570,671,61
96.23% 1,173.47 95.71% 1,173.47 0.00%
accrued based 98.74 5.27 5 7.38
on credit risk
feature
combinations
Other
receivables
with an
insignificant
amount 17,070,35 17,070,353. 17,070,353
2.52% 66.68% 0.00 17,070,353.09 2.86% 100.00%
individually, 3.09 09 .09
for which bad
debt provision
is separately
accrued
678,326,3 25,601,802. 652,724,52 596,273,420.2 25,601,802 570,671,61
Total 100.00% 100.00% 100.00% 4.29%
28.18 91 5.27 9 .91 7.38
Other receivables with a significant amount individually, for which bad debt provision is separately accrued
√ Applicable □ Not applicable
Unit: Yuan
Other receivables (by Closing balance
company) Other receivables Bad debt provision Percentage Reason for provision
Yangjiang Yuntong Grease Unable to be recovered for
8,530,276.35 8,530,276.35 100.00%
Co., Ltd. aging of over 5 years
Total 8,530,276.35 8,530,276.35 - -
Among the combinations, accounts receivable for which bad debt provision is computed by aging method:
√ Applicable □ Not applicable
Unit: Yuan
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Closing balance
Aging
Other receivables Bad debt provision Percentage
Sub-item within 1 year
Within 1 year 3,256,969.01
Subtotal of accounts aged under 1
3,256,969.01
year
1-2 years 23,469.34 1,173.47 5.00%
Total 3,280,438.35 1,173.47 0.04%
Note to basis for confirming the combination:
Other receivables in a combination, for which bad debt provisions are made using the Percentage of Total Receivables Outstanding method
□ Applicable √ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
□ Applicable √ Not applicable
(2) Accrued, recovered or reversed bad debt provision in the current period
The amount of the current accrued bad debt provision is RMB 0.00 Yuan and the amount of the current recovered or reversed bad debt provision
is RMB 0.00 Yuan.
(3) Classification of other receivables by nature
Unit: Yuan
Nature of receivables Period-end book balance Period-end book balance
Receivables of related parties 649,445,260.39 568,166,228.80
Creditor's right transfer cost 23,583,862.58 23,583,862.58
Imprest 498,989.14 579,868.64
Deposit and security deposit 1,726,559.79 1,446,667.78
Others 3,071,656.28 2,496,792.49
Total 678,326,328.18 596,273,420.29
(4) Other receivables with top 5 closing balance collected based on arrears party
Unit: Yuan
Percentage in the total
Closing balance of bad
Name of company Nature of payables Closing balance Aging amount of closing balance
debt provision
of other receivables
Nantong SEG Times
Square Development Loans and interests 587,120,832.26 Within 3 year 86.55%
Co., Ltd.
Shenzhen SEG
Loans and interests 47,088,490.03 Within 5 year 6.94%
Industrial Investment
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Co., Ltd.
Suzhou SEG Digital
Plaza Management Co., Current account 10,000,000.00 Within 1 year 1.47%
Ltd.
Yangjiang Yuntong Debt restructuring of
8,530,276.35 Over 5 years 1.26% 8,530,276.35
Grease Co., Ltd. SEG Orient
Shenzhen Lianjing Creditor's incomings
1,668,343.74 Over 5 years 0.25%
Trade Co., Ltd. and outgoings
Total - 654,407,942.38 - 96.47% 8,530,276.35
3. Long-term equity investment
Unit: Yuan
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment in
279,983,526.24 279,983,526.24 269,983,526.24 269,983,526.24
subsidiaries
Investment in
cooperative
189,295,871.13 189,295,871.13 185,122,573.88 185,122,573.88
enterprises and
joint ventures
Total 469,279,397.37 0.00 469,279,397.37 455,106,100.12 455,106,100.12
(1) Investment in subsidiaries
Unit: Yuan
Accrued Closing balance of
Increase in the Decrease in the
Investee Opening balance Closing balance impairment impairment
current period current period
provision provision
Shenzhen SEG Baohua
Enterprise Development 20,512,499.04 20,512,499.04
Co., Ltd.
Shenzhen SEG Industrial
29,181,027.20 29,181,027.20
Investment Co., Ltd.
Changsha SEG
69,000,000.00 69,000,000.00
Development Co., Ltd.
Shenzhen SEG Electronics
Market Management Co., 2,100,000.00 2,100,000.00
Ltd.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Accrued Closing balance of
Increase in the Decrease in the
Investee Opening balance Closing balance impairment impairment
current period current period
provision provision
Suzhou SEG Electronics
Market Management Co., 1,350,000.00 1,350,000.00
Ltd.
Xi'an SEG Electronics
1,950,000.00 1,950,000.00
Market Co., Ltd.
Shenzhen SEG Credit Co.,
54,000,000.00 54,000,000.00
Ltd.
Shenzhen SEG
15,300,000.00 15,300,000.00
E-Commerce Co., Ltd.
Shenzhen SEG Nanjing
Electronics Market 20,000,000.00 20,000,000.00
Management Co., Ltd.
Xi'an Hairong SEG
Electronics Market Co., 1,530,000.00 1,530,000.00
Ltd.
Wujiang SEG Electronics
Market Management Co., 1,530,000.00 1,530,000.00
Ltd.
Wuxi SEG Electronics
1,530,000.00 1,530,000.00
Market Co., Ltd
Foshan Shunde SEG
Electronics Market 6,000,000.00 6,000,000.00
Management Co., Ltd.
Nanning SEG Electronics
Market Management Co., 8,000,000.00 8,000,000.00
Ltd.
Nantong SEG Times
Square Development Co., 30,000,000.00 30,000,000.00
Ltd.
Suzhou SEG Digital Plaza
8,000,000.00 8,000,000.00
Management Co., Ltd.
Suzhou SEG Intelligent
10,000,000.00 10,000,000.00
Technology Co., Ltd.
Total 269,983,526.24 10,000,000.00 279,983,526.24
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
(2) Investment in cooperative enterprises and joint ventures
Unit: Yuan
Increase/Decrease of the year
Investment
Closing
gains and
Opening Adjustment of Closing balance of
Investee losses Other Issued cash Accrued
balance Additional Negative other balance impairment
confirmed equity dividends impairment Others
investment investment comprehensive provision
under the changes or profits provision
income
equity
method
1. Cooperative enterprise
2. Associate
Shanghai SEG
Electronics Market
3,379,412.81 -111,608.08 3,267,804.73
Management Co.,
Ltd.
Shenzhen Huakong
181,743,161.07 -4,715,142.77 48.10 177,028,066.40
SEG Co., Ltd.
Shenzhen
International
Consumer
9,000,000.00 9,000,000.00
Electronics
Exhibition/Exchange
Center Co., Ltd.
Subtotal 185,122,573.88 9,000,000.00 0.00 -4,826,750.85 48.10 189,295,871.13
Total 185,122,573.88 9,000,000.00 0.00 -4,826,750.85 48.10 189,295,871.13
4. Operating income and operating cost
Unit: Yuan
Amount incurred in the current period Amount incurred in the previous period
Item
Income Cost Income Cost
Main business 51,626,681.87 36,890,488.44 66,577,264.42 44,695,244.80
Total 51,626,681.87 36,890,488.44 66,577,264.42 44,695,244.80
5. Investment income
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
Long-term equity investment income by the cost
-4,826,750.85 -4,892,855.94
method
Long-term equity investment income by the
32,747,355.51 22,060,280.00
equity method
Income from disposal of held-to-maturity
750,000.00
investments
Others 17,841,726.10 19,701,657.06
Total 45,762,330.76 37,619,081.12
XV. Supplemental information
1. Details on non-recurring gains and losses
√ Applicable □ Not applicable
Unit: Yuan
Item Amount Remarks
Gains and losses from disposal of non-current assets -9,316.22 Disposal loss of fixed assets
The main purpose is to obtain the special reward for
Government subsidies included in current gains and
the service industry from Suzhou Wujiang Finance
losses (except those closely related with corporate
101,608.00 Bureau and SEG e-commerce platform support fund
business and enjoyed according to national standards
from Shenzhen Economy, Trade, and Information
or certain quota)
Commission
Including: Additional accrual of the litigation
Other non-operating income and expenses except the
-2,432,788.76 compensation expenditure RMB 2,700,000 and
above-mentioned items
income from merchant compensation
Less: Amount of affected income tax -629,774.56
Influenced amount of minority shareholders' equity 129,466.63
Total -1,840,189.05 -
An explanation shall be made with regard to the Company's considerations for defining non-recurring profit and loss according to the
Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profit and
Loss and the reason of classifying the non-recurring profit and loss listed in this announcement as recurring.
□ Applicable √ Not applicable
2. Return on equity and earnings per share
Earnings per share
Profit in the report period Weighted average ROE
Basic EPS (Yuan/Share) Diluted EPS (Yuan/Share)
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Net profit attributable to common shareholders of the
1.82 0.0342
Company 0.0342
Net profit attributable to common shareholders of the
Company after deduction of -recurring losses and 1.94 0.0366
0.0366
gains
3. Differences in accounting data under Chinese and overseas accounting standards
(1) Differences of net profit and net assets in this financial report calculated based on international and Chinese
accounting standards
□ Applicable √ Not applicable
(2) Differences of net profit and net assets in this financial report calculated based on overseas and Chinese
accounting standards
□ Applicable √ Not applicable
(3) Explanation for differences shall be given. If the Company modifies the data audited by a foreign auditing
institution, the name of the foreign institution shall be indicated.
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