Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Shenzhen SEG Co., Ltd.
2017 Semi-annual Report
August 2017
1
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Chapter 1 Important Notice, Contents, and Definitions
The Board of Directors, the Board of Supervisors, and the directors, the supervisors and
the senior executives guarantee that the semi-annual report is authentic, accurate, and
complete and that it has no false records, misleading statements or major omissions, and
they undertake joint and several legal liabilities.
Chairman of the Board Wang Li, the Chief Financial Officer Liu Zhijun and the
responsible person of the accounting institution (accountant in charge) Ying Huadong
hereby declare that the Financial Statements enclosed in this semi-annual report are true,
accurate and complete.
All of the directors have attended this board meeting to review the semi-annual report.
The future plans, development strategies and other forward-looking statements mentioned
in the semi-annual report do not constitute substantial commitments to investors of the
Company. Investors are advised to pay attention to investment risks.
Shenzhen SEG Co., Ltd. plans not to distribute cash dividends and bonus shares or convert
accumulated funds into share capital.
2
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
CONTENTS
Chapter 1 Important Notice, Contents, and Definitions ..........................................................................2
Chapter 2 Company Profile and Major Financial Indexes ......................................................................6
Chapter 3 Summary of Company Business...............................................................................................9
Chapter 4 Management Discussion and Analysis ...................................................................................13
Chapter 5 Important Matters ...................................................................................................................33
Chapter 6 Changes in Share Capital and Information on Shareholders .............................................65
Chapter 7 Preferred Shares ......................................................................................................................70
Chapter 8 Directors, Supervisors and Senior Executives ......................................................................71
Chapter 9 Corporate Bonds ......................................................................................................................72
Chapter 10 Financial Report ....................................................................................................................73
Chapter 11 Documents Available for Reference....................................................................................202
3
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Definitions
Definition refers to Description
This Company, the Company, the listed company,
refers to Shenzhen SEG Co., Ltd.
SHEN SEG
SEG Group refers to Shenzhen SEG Group Co., Ltd.
Longgang SEG refers to Shenzhen SEG Electronics Market Management Co., Ltd.
Suzhou SEG refers to Suzhou SEG Electronics Market Management Co., Ltd.
Suzhou SEG Digital refers to Suzhou SEG Digital Plaza Management Co., Ltd.
Nanjing SEG refers to Shenzhen SEG Nanjing Electronics Market Management Co., Ltd.
Xi'an SEG refers to Xi'an SEG Electronics Market Co., Ltd.
Xi'an Hairong SEG refers to Xi'an Hairong SEG Electronics Market Co., Ltd.
Changsha SEG refers to Changsha SEG Development Co., Ltd.
Wujiang SEG refers to Wujiang SEG Market Management Co., Ltd.
Wuxi SEG refers to Wuxi SEG Electronics Market Co., Ltd
Foshan Shunde SEG Electronics Market Management Co., Ltd. in
Shunde SEG refers to
Foshan
Nanning SEG refers to Nanning SEG Digital Plaza Management Co., Ltd.
Shanghai SEG refers to Shanghai SEG Electronics Market Operation Management Co., Ltd.
SEG Baohua refers to Shenzhen SEG Baohua Enterprise Development Co., Ltd.
SEG Industry refers to Shenzhen SEG Industrial Investment Co., Ltd.
SEG Credit refers to Shenzhen SEG Credit Co., Ltd.
Nantong SEG refers to Nantong SEG Times Plaza Development Co., Ltd.
Nantong SEG Operation Company refers to Nantong SEG Commercial Operation Management Co., Ltd.
SEG Intelligent refers to Suzhou SEG Intelligent Technology Co., Ltd.
SEG Investment refers to Shenzhen SEG Investment Management Co., Ltd.
Shenzhen SEG Longyan New Energy Application and Development
SEG Application refers to
Co., Ltd.
SEG Longyan Technology refers to Shenzhen SEG Longyan Energy Technology Co., Ltd.
SEG Lianzhong refers to SEG Lianzhong Internet Technology Co., Ltd.
SEG Zhongtong refers to Shenzhen SEG Zhongtong Technology Co., Ltd.
SEG Real Estate refers to SEG Real Estate Investment Co., Ltd.
SEG Property Development refers to SEG Property Development Co., Ltd.
SEG Kangle refers to SEG Kangle Enterprise Development Co., Ltd.
SegMaker refers to Shenzhen SegMaker Co., Ltd.
SEG Property Management refers to SEG Property Management Co., Ltd.
4
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
SEG New Urban refers to Shenzhen SEG New Urban Construction Development Co., Ltd.
Four companies transferred inward through this asset re-organization,
Object companies Refer to including SEG Real Estate, SEG Proerty Development, SEG Kangle
and SegMaker
Xi’an SEG Kanghong refers to Xi’an SEG Kanghong Property Co., Ltd.
Huizhou Qunxing refers to Huizhou Qunxing Real Estate Co., Ltd.
Beijing SEG refers to Beijing SEG Property Development Co., Ltd.
SEG Wisdom refers to SEG Wisdom Sports and Culture Development Co., Ltd.
Mellow Orange Hotel refers to Shenzhen Mellow Orange Business Hotel Management Co., Ltd.
Maker Hotel refers to SEG Maker Hotel Management Co., Ltd.
Huakong SEG refers to Shenzhen Huakong SEG Co., Ltd.
SEG Navigations refers to Shenzhen SEG GPS Scientific Navigations Co., Ltd.
China International Consumer Electronics Exchange/Exhibition
CEEC refers to
Center
Longyan Energy Technology refers to Longyan Energy Technology (Hangzhou) Co., Ltd.
Wangyu Technology refers to Shanghai Wangyu Information Technology Co., Ltd.
Tencent refers to Shenzhen Tencent Computer System Co., Ltd.
Fujian Babycat refers to Fujian Babycat Animation Technology Co., ltd.
Zhuhai Zhongtong refers to Zhuhai Zhongtong Lexing Network Technology Co., Ltd.
Allied eSports refers to Tianjin Allied eSports Internet Technology Co., Ltd.
State-owned Assets Supervision and Administration Commission of
Shenzhen SASAC refers to
the People's Government of Shenzhen Municipality
CSRC refers to China Securities Regulatory Commission
Shenzhen Securities Regulatory Bureau of China Securities
Shenzhen Securities Regulatory Bureau refers to
Regulatory Commission
Articles of Association refer to The Articles of Association of Shenzhen SEG Co., Ltd.
Unless otherwise specified, the amount referred to
refers to Amount in CNY
in the report
5
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Chapter 2 Company Profile and Major Financial Indexes
I. Company profile
Stock abbreviation SHEN SEG, SHEN SEG B Stock code 000058, 200058
Changed stock abbreviation (if any) None
Listed on Shenzhen Stock Exchange
Company name in Chinese 深圳赛格股份有限公司
Company in Chinese (if any) 深赛格
Company name in English (if any) SHENZHEN SEG CO., LTD.
Company name abbreviations in
None
English (if any)
Legal representative Wang Li
II. Contact information
Secretary of the Board of Directors Securities affairs representative
Name Zheng Dan Zhang Xin
31/F, Tower A, the Stars Plaza, Huaqiang Road 31/F, Tower A, the Stars Plaza, Huaqiang Road
Contact address
(N), Futian District, Shenzhen (N), Futian District, Shenzhen
Phone 0755-83747939 0755-83747939
Fax 0755-83975237 0755-83975237
E-mail segcl@segcl.com.cn segcl@segcl.com.cn
III. Other information
1. Contact information of the Company
Are the registered address, office address, zip code, website and e-mail address of the Company changed in the reporting period?
□ Applicable √ Not applicable
No changes in the registered address, office address, zip code, website and e-mail address of the Company in the reporting period, please
refer to 2016 Annual Report.
2. The place of information disclosure and filing
Is the information disclosure and filing site changed in the reporting period?
□ Applicable √ Not applicable
The newspaper specified by the Company to disclose information, the website specified by CSRC to publish the semi-annual report and the
filing site for the semi-annual report are not changed in the reporting period,please refer to 2016 Annual Report for detailed information.
IV. Major accounting data and financial indexes
Are retrospective adjustments required to previous financial statements?
√ Yes □ No
Reason for retrospective adjustments or restatement
6
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Merger of enterprises under common control
Year-on-year
Amount of the Amount of the same period of the previous year
increase/decrease
reporting period
Before adjustment After adjustment After adjustment
Operating revenue (Yuan) 592,346,626.22 362,673,236.85 724,213,525.00 -18.21%
Net profit attributable to shareholders of the
50,008,785.42 26,856,270.42 104,913,059.48 -52.33%
listed company (Yuan)
Net profit attributable to shareholders of the
listed company after deduction of 28,696,459.47 13.21%
30,778,883.27 27,187,695.79
non-recurring profit or loss (Yuan)
Net cash flow arising from operating
93,125,278.74 -99,314,028.40 70,386,258.79 32.31%
activities (Yuan)
Basic EPS (Yuan/Share) 0.0405 0.0342 0.0849 -52.30%
Diluted EPS (Yuan/Share) 0.0405 0.0342 0.0849 -52.30%
Weighted average ROE 2.67% 1.82% 4.67% -2.00%
Year-on-year
Year-end amount
Closing amount increase/decrease
Before adjustment After adjustment After adjustment
Total assets (Yuan) 7,423,262,800.40 2,548,276,265.32 6,923,273,093.64 7.22%
Net assets attributable to shareholders of the
1,793,775,473.28 1,548,200,647.55 2,412,301,070.04 -25.64%
listed company (Yuan)
V. Differences of accounting data under Chinese and overseas accounting standards
1. Differences in net profits and net assets reported in the financial statements disclosed under
international accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
In the reporting period, the Company's net profits and net assets have no differences in the financial report disclosed based on both the
international and the Chinese accounting standards.
2. Differences in net profits and net assets reported in the financial statements disclosed under
overseas accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
In the reporting period, the Company's net profits and net assets have no differences in the financial report disclosed based on both the
international and the Chinese accounting standards.
VI. Items and amount of non-recurring profit or loss:
√ Applicable □ Not applicable
Unit: Yuan
Item Amount Remarks
Profit or loss on disposal of non-current assets (including the write-off of assets depreciation
-111,492.83
reserves)
7
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Government subsidies included in current profit or loss (except those closely related with
3,716,243.11
corporate business and enjoyed according to national standards or certain quota)
Capital occupation fee collected from non-financial enterprises recognized in current profit
1,676,532.33
or loss
Current net profit or loss of subsidiaries arising from merger of enterprises under common
10,632,970.72
control from the beginning of the period to the date of merger
Trustee fee income from entrusted operation 68,759.04
Other non-recurring profit or loss items 10,467,166.60
Less: Amount of affected income tax 3,242,832.45
Amount of influence of minority shareholders' equity (after tax) 3,977,444.37
Total 19,229,902.15 --
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
In the reporting period, it does not happen that the Company defines the non-recurring profit and loss items defined or listed by Interpretive
Bulletin No. 1 on Information Disclosure by Companies Publicly Issuing Securities - Non-recurring Profit or Loss as recurring profit and loss
items.
8
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Chapter 3 Summary of Company Business
I. Main business in the reporting period
Should the Company abide by the disclosure requirements of special industries?
No.
(I) Main business and operation model
In order to reduce horizontal competition, enhance the profitability and core competitiveness of the Company, and
complete transformation and upgrading of the existing business, the Company has carried out major assets
restructuring. the Company intended to purchase 100% of the equity of SegMaker, 55% of the equity of SEG
Kangle, 100% of the equity of SEG Property Development and 79.02% of the equity of SEG Real Estate held by
SEG Group by means of issuing shares and paying cashes to acquire assets (see the Report of Share Issuance and
Cash Payment to Acquire Assets and Raise Funds & Connected Transactions for details). On January 17, 2017,
the Company received the approval on the major assets restructuring issued by the CSRC. The Company has
completed asset transfer and issued 450,857,239 shares to SEG Group, and the newly issued shares were listed on
March 6, 2017.
After reconstructing, the main business of the Company has not changed greatly, including the development and
operation of electronics markets and supporting projects, property leasing services, city complex (industrial park)
real estate business, marker business, new energy business, value-added small loan business, economical hotel
business, trade and channel business.
Business model: On the basis of the electronics markets, commercial real estate (industrial parks), and CdTe solar
energy, the Company combines multiple business models, develops the overall resource advantages, accelerate
transformation and upgrading of the original main business, expands from operation of a single business platform
to the content production and operation, creates a business model combining multiple business types, including
the maker ecosystem, culture & education, intelligent technology, sports & entertainment, virtual experience,
e-sports, financial services, and construction of industrial parks, and builds a new SEG industrial ecosystem. The
Company marches from a single role of electronics market leasing into diversified strategic emerging industries
and high-end manufacturing and services. By innovating in the business model and integrating business resources,
the Company aims to create a platform for diversified strategic emerging industries and become a leader in
high-end manufacturing and services. The Company supports innovative business relying on the traditional
electronics market business, deploys full industry chains, and develops electronic information products, smart
electronic applications, supply chain financial services, strategic emerging industries, high-end manufacturing and
services.
(II) Current situation of industries which the Company mainly deals in
(1) Electronics market industry
Under the continuous impact of e-commerce, the traditional electronics market industry focuses on innovation in
the original business model: a. transforms from a single electronic trading platform to a complex business type
platform combining culture, science & technology, intelligence, sports, and financial services; b. transforms
enterprises engaged in electronics market operation from a single leasing role to platform operators and service
providers that integrate online and offline resources; c. supports innovative business based on the existing
electronics market business resource platform, deploys full industry chains, and develops electronic information
products, smart electronic applications, supply chain financial services, strategic emerging industries, high-end
manufacturing and services.
9
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
(2) Commercial real estate industry
In recent years, in the context of economic policy stimulus, rapid growth of total retailing of social consuming
goods, and transformation of the traditional department stores, China's commercial real estate witnesses
continuous rapid development. At present, China's real estate market enters the new normal state. The government
becomes more rational and attaches more importance to market regulation and control. As the market mechanism
and the investor sentiment become mature, commercial real estate will step into a rational and stable development
stage.
(3) Maker industry
Relying on its advantages in the electronic component industry, Shenzhen has initially formed three maker
clusters, namely Qianhai, Civic Center, and Huaqiangbei, and has full maker industry chains including the maker
space, venture capital, crowd funding platforms, incubators, and electronic supply chains. The construction of the
maker ecosystem is an important trend for economic transformation and upgrading of Huaqiangbei. At present,
the maker industry enters the stage of survival of the fittest, and equity investment tends to be rational.
(III) Industrial position of the Company
Having been dedicated to the electronics market industry for nearly 29 years, the Company is the founder of the
electronics market operation model of China and a leader in the industry. The Company has established more than
20 electronics markets in China by means of direct operation, joint operation, and entrusted operation, has formed
an electronics market chain system covering Zhujiang River Delta and Yangtze River Delta and radiating the whole
country, and has gained high brand influence both at home and abroad.
II. Significant changes in main assets
1. Significant changes in main assets
Main assets Description of Significant Changes
Long-term equity investment decreases by RMB 6.99 million (or 3.43%) over the
beginning of the period, mainly due to losses of Huakong SEG, CEEC, SEG Real Estate,
Equity
CEEC and SEG Wisdom based on accounting by the equity method in the reporting
period.
Fixed assets There is no significant change in the reporting period.
Intangible assets increase by RMB 28.55 million (or 1,064.52%) over the beginning of the
Intangible assets period, mainly because SEG Longyan obtained the land use right in Shenzhen-Shantou
Cooperation Zone in the reporting period.
Construction in progress increases by RMB 7.81 million (or 21.05%) over the beginning
Construction in progress of the period, mainly due to increased investment in the property decoration and
renovation of SEG Kangle Building in the reporting period.
Lending funds decrease by RMB 40 million (or 100%) over the beginning of the period,
Lending funds
mainly because SEG Credit recovered lending funds in the reporting period.
Accounts receivable Accounts receivable increase by RMB 21.24 million (or 36.04%) over the beginning of the
10
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
period, mainly because accounts receivable arising from trading business of SEG Industry
increased by RMB 6.67 million, and property management expenses receivable on the
accrual basis increased by RMB 13.13 million.
Other non-current assets increase by RMB 75.18 million (or 544.62%) over the beginning
Other non-current assets of the period, mainly because prepayment for key equipment in the production line of
CdTe film PV cell modules (RMB 88 million) of SEG Longyan was included in this item.
2. Main overseas assets
□ Applicable √ Not applicable
III. Analysis of the core competitiveness
Should the Company abide by the disclosure requirements of special industries?
No.
Shenzhen SEG Electronics market operated by the Company is the founder of the electronics market operation
model in China, leading in the industry. It has won honorable titles successively including "Five-star Market of
Electronic Products in China", "Most Influential Market in Shenzhen Special Area in 30 Years", “Top 10 Most
Influencial Shenzhen Branded Markets in China", "China's Top 10 Electronics Markets in 2016", and "China's
Electronics Market Operation Innovation Prize in 2016".
Dedicated to the electronics market for 29 years, the Company has acquired abundant market merchant resources
and mature market operation and management experience. As of today, the Company has set up more than 20
electronics markets in China by means of direct operation, joint operation and entrusted operation, has formed an
electronics market chain system covering Zhujiang River Delta and the Yangtze River Delta and radiating the
whole country, has become the largest comprehensive electronics market in China and even in Asia covering
electronic components, digital IT and communication products, and has gained high brand influence both at home
and abroad.
For the past several years, the Company has been exploring, innovating in, and practicing electronics market
business transformation and upgrading based on the traditional main business. Faced with new consumption, new
channels, and new retail, the Company expands from operation of a single business platform to the content
production and operation, creates a business model combining multiple business types, including the maker
ecosystem, culture & education, intelligent technology, sports & entertainment, virtual experience, e-sports, and
financial services, builds a new SEG industrial ecosystem, and provides one-stop and comprehensive consumption
experience to consumers.
In the reporting period, the Company has completed major assets restructuring and is raising funds. After
restructuring, by asset injection into quality electronics markets, property management, and commercial real estate,
the Company has reduced horizontal competition to the maximum extent, enriched the business structure,
enhanced the profitability and core competitiveness of the listed company, and achieved strategic integration,
transformation and upgrading of the existing business.
At present, the Company has developed in-depth cooperation with Longyan Energy Technology, Wangyu
Technology, Alibaba, Fujian Babycat, Tencent, and Zhuhai Zhongtong in new business fields, such as new energy,
e-sports, e-commerce, animation, makers, and WiFi on G-series high-speed trains. The Company has promoted
11
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
the transformation and upgrading of the original business, developed new business, and achieved coordinated
development of multiple business types. The Company will develop diversified strategic emerging industries,
high-end manufacturing, and services.
12
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Chapter 4 Management Discussion and Analysis
I. Overview
In the first half of 2017, China's economy features stable consumption growth in the short term, pick up in investment,
and downward pressure.
In the reporting period, the Company has completed major assets restructuring. Benefiting from injection of core
business assets into the electronics market, the scale of the main business of the Company will expand. Benefiting from
asset injection into commercial real estate and property management, the business of the Company will interwork. In this
way, the core competitiveness and sustaible operating ability of the Company will be enhanced.
Facing fierce market competition and the continuous impact of e-commerce, the Company is dedicated to user value,
integrates resources, further expands the industrial chain, improves the service quality of electronics markets, creates a
business model combining multiple business types, including the maker ecosystem, culture & education, intelligent
technology, sports & entertainment, virtual experience, e-sports, and financial services, vigorously promotes
transformation and upgrading of the traditional electronics market business, explores new business development models,
and continuously improves the operating capacity and profitability of the Company .
In the reporting period, the total operating income from the Company amounted to RMB 625,086,000 and decreased by
19.22% over the same period last year. The total profit amounted to RMB 103,484,000 and decreased by 49.21% over
the same period last year. Main reasons for decrease in the operating income: (1) As the sales revenue of the project of
SEG New Urban is not eligible for recognition, the real estate income and profit of SEG Real Estate is expected to be
recognized in the second half of 2017; (2) The purchasing agent business of SEG Industry is gradually terminated. The
main reason for decrease in the total profit: (1) In the same period of last year, SEF Real Estate transferred 48 sets of
properties and received the nonbusiness income of RMB 60,590,000, but such a business income did not occur in this
year. (2) As the sales revenue of the project of SEG New Urban cannot be recognized now, the real estate income and
profit of SEG Real Estate is expected to be recognized in the second half of 2017.
II. Analysis of main business
Overview
The main business of the Company includes the development and operation of electronics markets and supporting
projects, property leasing services, city complex (industrial park) real estate business, marker business, new energy
business, small loan business, economical hotel business, trade and channel business.
1. Operation of electronics markets
With the rapid development of various shopping behaviors, such as online shopping, the electronics markets have been
affected to some extent. In face of the difficulties, the Company actively transforms and upgrades its existing electronics
market business, and adopts a compound business model to create a comprehensive electronics market where multiple
business patterns can harmoniously co-exist. These efficient measures ensure a stable operating ability for the Company,
and also create new profit opportunities. As of June 2017, the new projects of the Company had been operating stably,
and the corporate transformation and development strategy had gained obvious achievements.
In the reporting period:
Children's amusement park project: The park in Nantong branch store has been operating stably. The project team is
planning to open a new park in Longgang branch store and the park is currently under decoration.
Internet caféand e-sports project: The "Nantong Area Finals of the Second SEG E-Sports Suzhou-Nantong Competition"
have been successfully rolled out in the Nantong branch store. The Nantong store has also cooperated with Nantong TV
Station and local colleges to jointly host multiple e-sports competitions. The e-sports business also has been officially
launched in the Suzhou branch store.
SEG-OURGAME e-sports stadium: The construction of e-sports stadium in Shenzhen branch store has been finished by
now, and the procedures of applying for examination and approval of fire protection and for relevant certificates and
licenses. After the stadium is transferred and handed over, it will be able to host e-sports competitions.
13
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Taobao e-commerce project: By the project, the Company cooperates with Taobao stragetically to develop value-added
service in O2O electronics market with SEG characteristics through build up on-line and off-line business platform. By
the end of June 2017, the Gross Merchandise Volume (GMV) of the Company's online shop is about 1 billion yuan.
Around 2600 suppliers have applied to move in the shop, among them 1500 have officially started their businesses. Up
to date, SEG has already started to charge operation fees from the suppliers moved in.
2. Property leasing and management services
The property leasing services of the Company are carried out both by its headquarters and holding companies, including
SEG Baohua, SEG Real Estate, SegMaker, SEG Kangle, and Nantong SEG Business Operation Company. During the
reporting period, the Company implemented many efficient operation measures, including improving its property
management capabilities and service quality, cutting down costs and expenses, and attracting more investments. The
occupancy rates of SEG Baohua and SEG Kangle properties maintain at 99%. The overall performance of the property
leasing services is stable and strong.
Since its operations, Nantong SEG Times Plaza has been improving its internal management quality and coordinating
various external resources to introduce investments. With these efforts, the passenger traffic of the square has been
increasing and the brand influence and market value of SEG are greatly enhanced in the Nantong area. As of the end of
June 2017, the occupancy rate of SEG Times Plaza had reached 86.1%. Through brand adjustment, the square has
introduced many renowned children training institutes to move in, including the Starlight Dance Training, YMM Art
Education Group, and Rise Subject English. The children training businesses of the square have formed a considerable
scale. In the first half of 2017, the Animation Industrial Park of Nantong SEG Times Plaza received a cultural fund of
300,000 yuan from Nantong municipal government. At the same time, the original animation products of the industrial
park won the Best Works Award granted by the Jiangsu provincial government. The influence of the animation industrial
park is obviously promoted.
Aiming at the dwelling demand of customers who are dealing in domestic and foreign trade in Huaqiangbei electronics
industry, SEG Business Apartment of SEG Maker adopts the method of combining long-term and short-term lease to
enhance the property value. At the same time, it interacts and share resources with SEG Communication Market. The
apartment was set up through rebuilding Building 6, SEG Garden which is situated in Huaqiangbei and Huaqiangnan
metro circle. Since the operation from 2013, the occupation rate has been stabilized aound 90%, much higher than that of
the surrounding apartments of the same type.
In the reporting period, Beijing SEG, the holding subsidiary of SEG Real Estate, leases 17F (whole floor), Office Tower
A, Air China Building, No.36, Xiaoyun Road, Chaoyang District, Beijing, with an covered area of 1694.73㎡, which is
woned by Beijing CA Property & Hotel Management Co., Ltd. CA Building Branch, and plans to rebuilt the building
into a business center of operation and service type. This project is the first one through which SEG Real Estate enters
into north China market as an important step for SEG Real Esatte to march towards the whole China. It will surely
promote the influence of SEG Real Estate’s brand.
3. City complex (industrial park) real estate business
After its reorganization, the real estate business of the Company includes two major projects: the development and
construction of urban complexes conducted by SEG Real Estate Company and Nantong SEG Times Plaza.
Progress of relevant real estate business in the reporting period:
(1) Nantiong Times Plaza Project
Engineering closing audit: Nantong Times Plaza Project now has completed the stage of engineering closing audit and
nown has entered into the stage of second audit (interim).
LOFT sales: As of the end of the reporting period, Nantong SEG has signed contracts of purchasing 11 sets of property
with an subscribed area of 688.65㎡.
(2) SEG New Urban Plaza (Phase 2) Project (SEG ECO Center)
SEG New Urban Plaza (Phase 2) Project is developed by SEG New Urban Investment Company, the holding subsidiary
of SEG Real Estate. The project locates at the intersection of Bulong Road in Buji Sub-district, Longgang District,
Shenzhen and Lianzhong Road (under planning). The total area of development of SEG New Urban (Phase 2) is 108,000
㎡, as a landmark complex project integrating 5A class office, regional flagship commerce, luxioury business apartment
and enterprise’s HQ base together. The project is awarded the title of “Shenzhen Significant Project” ans recommended
by Shenzhen Development & Reform Committee to be listed ibn Guangdong Province major projects. At present, the
project is under completion and acceptance phase.
14
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
The project has obtained the license of pre-selling. As of the end of this report period, the total amount of pre-sales
transaction of this complex project has reached 1,431 million yuan (the final transaction amount is subject to the cost of
formally signed contracts), therein, 510 sets of apartments with the transaction amount of 796 milliom yuan; 77 sets of
pre-sold offices with the transaction amount of about 379 million yuan; and 55 sets of pre-sold commercial property with
transaction amount of 256 million yuan. The complex project is estimated to finish completion and acceptance within
this year.
(3) Huizhou Qunxing SEG Plaza Project
Huizhou Quanxing launched another landmark project in Huizhou in late 2012, i.e. SEG Holiday Plaza with 30,000 ㎡.
The whole project is schedured to be developed through three phases. The positioning of the project is a life and fashion
and culture center in Huizhou, i.e. a commercial complex integrating shopping, relaxation, catering, culture and
entertainment. Now the first phase of the project is under construction with an area of 100,000 ㎡, comprising “5A class
eco-office + experiencing-type commercial shopping center”. The sale of 5A Class eco-office of SEG Holiday Plaza
(Phase 1), i.e., SEG Plaza, was the champion in both 2015 and 2016 even when the sale of real estate was in depression.
On April 14, 2017, SEG Holiday Plaza opens officially and now the investment is being attracted worldwide.
In the report period, the business of SEG Holiday Plaza (Phase 2) is acrtively pushed forward. Now the calculation of
feasibility of Phase 2 project has been finished and the initial concept scheme is waiting for examination and approval.
On April 15, 2017, SEG Qunxing signed with the government of Huicheng Disrtric and China Film Association
Animation Film Working Committee the Framework Agreement of Placing Tianma Cup Competition in Huizhou,
deciding to organize activities to promoting the 2nd Tianma Cup of Chinese animation and films competition to facilitate
holding Tianma Cup event in Huizhou. Through building “Huizhou SEG International cartoon and animation Industry
Zone” in Huizhou and organize the event of “International Cartoon and animation Week for One Belt and One Road
(OBOR)”, SEG will promote Chinese cartoon and animation and film industry to develop towards internationalization.
(4) Xi’an SEG Plaza Project
Xi’an “SEG Plaza Project” is invested and built by Xi’an SEG Kanghong Investment Company, the holding subsidiary
of SEG Real Estate. The project locates at No.40, No.6 Gaoxin Road, Gaoxin District, Xi’an (i.e. the south-west corner
of intersection of No.2 Keji Road and No.6 Gaoxin Road). The project will integrate the commercial activities including
electronics market, relaxation and entertainment, catering, finance, and high-end office and apartment and etc., and build
self-owned property “SEG IT MALL” to form an experiencing-type metropolitan complex with regional radiating
influence mainly in office, electronics market, movie theatre and relaxation and catering.
In the reporting period, the project has completed all the procedures of planning and applying for approval, and also
obtained the License of Construction Project Planning.
(5) SEG Wisdom Sports Industry Project
In sports industry, SEG Real Estate cooperates with Shenzhen Wisdom Sports Building Investment Co., Ltd. and they
have established a joint venture SEG Wisdom Company, and will jopintly invest in developing and operating the
“Internet + Sports” complex sports project Dongle Rubik’s Cube, and exploring the “Cloud” management platform for
sports and health, smart sports facilities display and experience, and physical sports buildings.
SEG Wisdom has established strategic cooperation relation with the governments of Futian District and Bao’an Distric,
and successfully signed agreement on organizing the first round of OBOR Maarathon series games, i.e. Shenzhen
International Marathon Competition and on September 7, 2016, launched the 1st Bao’an Marathon Competition in
Shenzhen. Furthermore, in 2017, SEG Wisdom promotes business in many fields, such as sports games (Marathon and
football), training (basketball, badminton and teenage’s football and so on), and sports building project (sports theme
park and so on). At present, the first sports building operated by SEG Wisdom, Bao’a, Songgang Sports Center officially
opened on July 25, 2017.
4. Maker business
The Company centers on the maker ecological industry, and its maker business includes SEG business centers, SEG
business apartments, and SEG Maker Space. SEG Maker Space was established in June 2015. Based on the maker
business in the Huaqiangbei commercial area and the various business sectors of SEG Group, the Maker Space utilizes
the advantages of SEG in the industry, brand, and capital, gathers possible resources from the electronics information
industry and market, and provides all-round services to maker groups, satisfying their requirements on product launch,
exhibition, road show, market expansion, sales, financing, experience sharing, and training. SEG Maker Space aims to
facilitate the industrial development of maker products, and to enable the deep integration of the industrial chain and
innovation chain.
15
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
During the reporting period, SEG Maker Space was certified by Shenzhen Municipal Development and Reform
Commission as well as Shenzhen Human Resources and Social Security Bureau as the "First Batch of Innovation and
Entrepreneurship Bases in Shenzhen" and "Shenzhen Overseas Returnees Entrepreneurship Park". It has gained a special
support fund of 5.25 million yuan from Shenzhen Municipal Government. At the same time, it has launched many maker
activities, including the "Canadian High-end Project Road Show and Cooperation Fair", "Taiwan Young Entrepreneur
Representatives Seminar", "China – Italy Innovation & Entrepreneurship Investment and Cooperation Fair", "2017
Huaqiangbei – SEG Maker Banquet", and "Huawei LiteOS Hackathon Competition". These activities offered the maker
teams in and outside China a good opportunity to share experience. On one hand, the activities can generate good social
effects and boost the popularity of SEG Maker Space. On the other hand, they can win more maker project opportunities
for SEG Maker Space, ensuring its sustainable development.
(1) Equity investment: SEG Maker Space has reached cooperative intentions with Ouwo and Baonuo entrepreneurial
teams, and agreed to exchange market expansion resources and rent for project equities.
(2) Space leasing: The overall occupancy rate of SEG Maker Space maintains at 90%. A total of 260 entrepreneurial
teams and small- and medium-size enterprises have moved in, covering such fields as TMT, artificial intelligence, robots,
smart hardware, VR, and 3D printing.
Hongtu SEG Intelligence Industry Investment Funds: As of the end of the report period, Shenzhen Hongtu SEG
Investment Management Co., Ltd. and Shenzhen Hongtu SEG Intelligence Industry Investment funds （ limited
partnership）have completed the procedures of regislation of industry and commerce and now are handling the
procedures of regislation and record in China Securities Investment Fund Industry Association. At the same time, the
project preparation and investigation are just being carried out. On August 16, 2017, the event jointly organized by SEG
Group and Shenzhen Chuangxin Investment Co., Ltd. under the name of “Innovation in China: Shenzhen Station, SEG
Creates Future” (and the news press of Hongtu SEG Funds) was successfully held in Shenzhen Wuzhou Hotel, attracting
over 300 guests nationiwde, including important VC investors, famous and young entropreneurs and media
professionals.
After re-organization, the company’s maker business focuses on the business of Maker Branch and SegMaker.
Under the background of national strategy, i.e. “Mass entropreneurship and innovation”, the company takes innovative
products as its core competence, and invested and established Maker Branch oin Auguast 2015 responsible for operating
the project of CEEC”. Through the one-year development, Maker Branch has set up cooperation relation with more than
60 brand manufacturers, signed cooperation agreement with above 50 insititutions and held over 60 events covering
various themes, and over 300 types of products are exhibited in CEEC. All these efforts are popular in the business circle.
Meanwhile, Maker Branch also actively promotes educational projects on maker for teenages. As of the ende of June
2017, the educational project on maker for teenages has been awarded the title “Shenzhen Educational Base of
Popularization of Science” by Shenzhen Association for Science and Technology. Such educational training on various
topics was held for over 40 times. .
In the reporting period, in order to further develop the educational project on maker for teenages and build up complete
SegMaker eco-shpere, the company and Shenzhen Yingmengxin Technology Co., Ltd. jointly invested RMB 10 million
yuan in establishing Shenzhen SEG Yicheng Technology Co., Ltd. (the specific name is subject to the registration in the
industry and commerce administration). The capital will be used to build SEG Maker Education and Technology
Exploration Hall (For details, please refer to Noticeof Investing to Establish Shenzhen SEG Yicheng Technology Co., Ltd.
and Build SEG Maker Education and Technology Exploration Hall disclosed by the Company on August 11, 2017). The
original project professionals of Maker Branch merged into the business team of that company.
The SegMaker’s maker business focuses on the maker’s ech-sphere integrating SEG business center, SEG business hotel
and SEG maker space as a whole. Therein, SEG Maker Space was founded in June 2015, relying on Huaqiangbei maker
business and the business sections of SEG Group, and integrating the advantages of industries, brands and capital of
SEG Group and coordinating the industrial and marketing advantages in IT industry to provide the makers with the
comprehensive serves including new products issuance, display, route-show, promotion, transaction, financing and
makers’ communication and training to help the development of maker products industrialization and to deeply merge
industial chains and innovational chain.
5. New energy business
The new energy market has a great potential. With its green and environment-friendly features, it is supported and
facilitated by the government. Among the enterprises that embark on the CdTe thin-film industry, Longyan Energy
16
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Technology (Hangzhou) Co., Ltd. owns completely independent intellectual property rights in the CdTe thin-film battery
modules, and is an industry-leading company in the world. In April 2017, Longyan Application won the bidding for the
use right of a parcel of state-owned construction land numbered "E2016-0025" in Ebu Town, a special cooperation
district between Shenzhen and Shantou, with 28.01 million yuan. The success of this bidding ensures the smooth rollout
of the CdTe thin-film project. At present, the project is under site leveling and land consolidation.
6. Small loan business
In the first half of 2017, the China central government launched a series of strategies to protect finance security and
stabilize economic development. In order to reduce operating risks, SEG Credit has carried out a variety of measures,
such as shrinking business size, standardizing its business process, reinforcing project approval and supervision, strictly
investigating important projects and customers, and strengthening interest collection. With these measures, the company
has achieved a normal operation.
7. Economical hotel business
The economical hotel business of the Company consists of two brands: the SEG Baohua Mellow Orange Hotels and
SEG Maker Hotels. At present, there are four Mellow Orange Hotels in Changsha, Xingsha, Bao'an, and Dongmen. The
Mellow Orange Hotel in Dongmen has been in trial operation since January 2017.
SEG Maker Hotel began soft opening in early 2017. Because it locates in the prime area of Huaqiangbei and
Huaqiangnan commercial circle, which metro runs through and accompanies with Maker Space and SEG
Communication Market, it operates well by far.
8. Trade and channel business
The trade and channel business of the Company includes SEG Industrial Company and SEG Intelligent Technology Co.,
Ltd. During the reporting period, SEG Intelligent Technology Co., Ltd. expanded its business to the smart home and
engineering market, and segmented its existing services. By doing so, the Company becomes more agile to the market
situation and can efficiently capture market opportunities. The SEG Industrial Company has filed a law suit against its
previous cooperation partner for its late payment, and is trying to protect the Company's interests through legal measures.
Now, the relevant trade services have been halted.
Year-on-year changes in main financial data
Unit: Yuan
Year-on-year
The same period of the
The reporting period increase/decrease Reason for change
previous year
(%)
Total operating income 625,085,852.24 773,791,120.91 -19.22%
Operating cost 426,661,521.04 527,378,769.17 -19.10%
Sale expenses 18,930,296.04 15,452,527.47 22.51%
In the reporting period, Nantong SEG Times
Plaza and SEG Longyan incurred
Management expenses 62,603,332.15 48,360,132.61 29.45% management expenses. In the same period last
year, Nantong SEG Times Plaza was not open
yet and SEG Longyan was not established yet.
Nantong SEG Times Plaza has been put into
Financial cost 9,997,883.43 5,084,244.72 96.64% operation, and the capitalization of the
borrowing cost of the project is stopped.
Compared with the same period of previous
Income tax 38,782,427.00 58,174,040.67 -33.33% year, total profits decreases, so the income tax
fell accordingly.
R&D investment 156,656.92 127,447.60 22.92%
17
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Year-on-year
The same period of the
The reporting period increase/decrease Reason for change
previous year
(%)
Properties held and leased by the Company
Net cash flow from
93,125,278.74 70,386,258.79 32.31% increased over the same period last year, and
operating activities
cashes from operating activities increased.
Cashes used by SEG Longyan to purchase the
Net cash flow from investing
-112,220,284.03 21,719,468.61 -616.68% CdTe production line and the land use right
activities
increased.
In the reporting period, borrowed cashes of
Net cash flow arising from
110,562,243.93 244,451,134.98 -54.77% the Company decreased over the same period
financing activities
last year.
Net increase in cash and cash Borrowed cashes decreased and cashes paid
91,467,238.64 336,556,880.18 -72.82%
equivalents for investment increased.
In the reporting period, the Company paid the
value-added tax (VAT). In January through
April, before the implementation of the
program of replacing business tax with VAT,
the Company paid the business tax for real
Tax and surtax 10,579,222.45 39,850,665.86 -73.45% estate development, electronics markets,
property management, and financial business.
VAT is a tax excluded in prices and not listed
in the income statement. The business tax is a
tax included in prices and included in tax and
surtax item of the income statement.
In the same period last year, SEG Credit
granted loans and carried out write-off of
Loss of impairment of assets -542,043.79 -3,854,024.82 -85.94%
provisions for the impairment of advances,
which did not occur in the reporting period.
In the reporting period, CEEC incurred the
loss of RMB 7.32 million, and the Company's
income from investment decreased by RMB
Income from investment 408,928.49 4,177,657.94 -90.21% 2.2 million. In the same period last year,
CEEC was not open yet. In the reporting
period, the income from bank financing
decreased.
The nmain cause is that in order to guarantee
the successfully promote the asset
reorganization, in the same period last year,
Non-operating income 7,226,958.33 61,732,465.54 -88.29% SEG Real Estate obtained non-operating
income RMB 60.59 million from transfer of
48 houses. In the reporting period, no such
income was obtained.
In the same period last year, the Company
non-operating expense 549,897.70 3,208,366.60 -82.86% paid the litigation compensation incurred by
Nanning SEG.
Major changes occur in the profit structure or the profit sources of the Company in the reporting period.
□ Applicable √ Not applicable
18
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
No major changes occur in the profit structure or the profit sources of the Company in the reporting period.
Composition of main business
Unit: Yuan
Year-on-year Year-on-year
Year-on-year
Gross profit increase/decrease increase/decrease
Operating income Operating cost increase/decrease
rate of operating of gross profit
of operating cost
income rate
Classified by industry
Electronics
marketElectronics 193,479,031.00 116,350,738.85 39.86% 10.37% 13.85% -1.84%
market
Property leasing 121,726,160.66 68,705,515.52 43.56% 130.64% 138.22% -1.80%
Property
118,900,199.47 102,337,645.71 13.93% 12.07% 15.32% -2.43%
management
Trade 87,570,279.99 88,442,699.84 -1.00% -45.85% -44.73% -2.04%
Real estate
52,297,147.71 30,100,136.48 42.44% -74.32% -72.97% -2.87%
development
Finance 32,739,226.02 3,624,611.86 88.93% -33.96% -73.07% 16.07%
Hotel 18,373,807.39 17,100,172.78 6.93% 47.02% 53.95% -4.19%
Classified by product
Classified by region
Shenzhen 423,517,409.24 256,863,576.72 39.35% 11.60% 1.83% 5.82%
Huizhou 35,990,750.45 18,688,272.10 48.07% -83.66% -84.15% 1.62%
Suzhou 91,981,251.40 88,328,125.18 3.97% -13.36% -13.99% 0.70%
Xi'an 28,834,389.94 22,339,234.01 22.53% -7.06% 4.67% -8.69%
Changsha 19,830,361.95 14,523,155.59 26.76% 1.08% 5.25% -2.90%
Nanjing 12,064,470.86 13,873,176.03 -14.99% -2.63% -12.19% -14.99%
Nantong 9,160,022.94 8,327,899.94 9.08%
Wuxi 2,187,708.92 2,242,230.77 -2.49% -35.13% 10.32% -42.22%
Foshan 1,519,486.54 1,475,850.70 2.87% 2.68% 7.65% -4.48%
Property leasing：SEG Group transferred 170 houses to SegMaker for free in July 2016. Since then the incomes belong to
SegMaker, resulting in the operating income and profit increase dramatically. SEG Group transferred 170 houses to
SegMaker for free in July 2016. Since then the incomes belong to SegMaker, resulting in the operating income and profit
increase dramatically.
Trade: SEG Industrial Company terminated its trade business, leading to the sharp decease of income of trade business in
the reporting period.
Real estate development: A large sum of house payments of Huizhou Stars Real Estate project were carried forward in
profit and loss in the same period last year while remaining buildings of the project are sold in the reporting period and
fewer house payments are carried forward. The plaza project of New Urban has sold out the property of RMB 1.431
19
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
billion yuan but the income is not eligible for recognition in the reporting period. It is estimated that part of such income
will be brought forward from the Quarter 4, 2017.
Finance: SEG Credit’s business shrinkage results in the decrease of operating income, however, the company practices
strict economy to lower down costs and improve its gross profit rate. .
III. Analysis of non-main business
√ Applicable □ Not applicable
Unit: Yuan
Percentage in the total
Amount Reason Sustainable or not
profit
Income from Financing income and income
408,928.49 0.40% Sustainable
investment from investment in associates
Recognition of provisions for
bad debt and write-off of
Impairment of assets -542,043.79 -0.52% Partly sustainable
provisions for credit losses in
the previous year
Government subsidies received
Non-operating
7,226,958.33 6.98% and income from liquidated Partly sustainable
income
damages
1. Loss on disposal non-current
assets RMB 110,000; 2.
Donation RMB 100,000; 3.
Non-operating
549,897.70 0.53% attorney fee for the lawsuit of Not sustainable
expense
Nanning SEG, energy-saving
service fee, and other costs
RMB 300,000.
IV. Assets and liabilities
1. Material changes in the composition of assets
Unit: Yuan
End of the same period last year
End of the reporting period Increase or
(before trace) Notes to material
decrease in
Percentage in Percentage in changes
Amount Amount percentage
total assets total assets
Increase in the
Monetary fund 16.48% 5.78% 10.70% monetary fund of the
1,222,990,879.83 143,304,754.16
subject company
Accounts receivable 1.08% 3.20% -2.12%
80,193,593.82 79,456,363.98
The property of SEG
Inventory 49.49% 22.94% 26.56% Real Estate increased.
3,673,901,099.84 568,759,249.94
Development
20
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Investment real estate 9.37% 17.52% -8.15%
695,584,278.68 434,510,747.94
Long-term equity
2.65% 7.63% -4.98%
investment 196,671,333.80 189,295,871.13
Fixed assets 0.70% 1.49% -0.79%
51,807,396.55 36,910,218.56
Construction in
0.60% 0.00% 0.60%
progress 44,898,411.15 -
Short-term borrowing 7.34% 12.56% -5.22%
545,000,000.00 311,438,652.00
Increase in the
long-term borrowing
Long-term borrowing 10.40% 0.00% 10.40%
772,250,000.00 - of the subject
company
2. Assets and liabilities measured by fair value
√ Applicable □ Not applicable
Unit: Yuan
Changes in fair
Changes in
value Impairment
accumulated fair Monetary Sales proceeds
recognized in recognized in
Item Opening balance value amount in the in the reporting Closing balance
profit or loss in the reporting
recognized in reporting period period
the reporting period
equity
period
Financial assets
3.
Available-for-sale 683,290.58 -214,210.99 469,079.59
financial assets
Subtotal of
683,290.58 -214,210.99 469,079.59
financial assets
Total 683,290.58 -214,210.99 469,079.59
Financial
0.00 0.00 0.00
liabilities
Are major asset measurement attributes of the Company materially changed in the reporting period?
□ Yes √ No
3. Restricted asset rights as of the end of the reporting period
(1) Mortgaged assets
As of the end of the reporting period, the Company mortgaged self-owned houses for bank borrowings. The following
are mortgaged houses and the net value at the end of the reporting period:
21
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Net value at the end of the
Owner House name Remarks
reporting period
Shenzhen SEG Co., Ltd. 4F of SEG Plaza 43,315,741.25 Mortgaged for bank borrowings
Some floors of Window to
Shenzhen SEG Co., Ltd. 51,476,952.71 Mortgaged for bank borrowings
Modernization
Shenzhen SEG Co., Ltd. 31F of Stars Plaza 9,150,016.33 Mortgaged for bank borrowings
Shenzhen SEG Co., Ltd. Other houses 6,572,813.17 Mortgaged for bank borrowings
Shenzhen SEG Real Estate See houses listed in Note
28,232,606.94 Mortgaged for bank borrowings
Investment Co., Ltd. VII (45)
Huizhou Stars Real Estate Some houses of SEG
119,691,853.07 Mortgaged for bank borrowings
Development Co., Ltd. Holiday Plaza
Total 258,439,983.47
(2) Pledged assets
SEG New Urban, a sub-subsidiary of the Company, and Bohai International Trust Co., Ltd. ("Bohai Trust") have entered
into a contract of loan on trust. Bohai Trust shall grant a total loan of RMB 500,000,000.00 to SEG New Urban.
According to the Right Pledge Contract between SEG Real Estate, a subsidiary of the Company, and Bohai Trust, the
pledged right is 52.0461% of the equity of SEG New Urban held by SEG Real Estate.
V. Analysis of the investment situation
1. General
√ Applicable □ Not applicable
Investment amount in the reporting period Investment amount in the same period last
Change
(Yuan) year (Yuan)
5,516,813,186.42 135,463,224.43 3972.55%
22
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
2. Significant equity investment in the reporting period
√ Applicable □ Not applicable
Unit: Yuan
Investment
Progress
profit or loss Lawsuit Disclosur
Investee Main Investment Investment Shareholdin Source of Investmen as of the Estimate
Partner Product type in the involve e date (if Disclosure index (if any)
name business mode amount g percentage capital t horizon balance d income
reporting d any)
sheet date
period
Shenzhen
Rongqi
Mechanical
and
Electrical
Issuance of
SEG Real Equipment
shares and
Estate Real estate 2,113,984,200.0 Co., Ltd., Transfer January
Acquisition 79.02% payment of Long-term Real estate 0.00 3,888,812.73 No
Investment development 0 employees completed 25, 2017
consideration
Co., Ltd. of SEG http://www.cninfo.com.c
s
Real Estate, n
and the
Announcement of
labor union
Shenzhen SEG Co., Ltd.
of SEG
on Transfer of
Real Estate
Underlying Assets for
Issuance of Electronics Share Issuance and Cash
SEG Kangle Electronics Harbin Payment to Acquire
shares and markets and
Enterprise markets and Haige Transfer 12,502,739.0 Assets and Raise Funds
Acquisition 310,244,700.00 55.00% payment of Long-term property 0.00 No
Developmen property Group Co., completed 8 & Connected
consideration leasing
t Co., Ltd. management Ltd Transactions
s services
Issuance of
SEG
shares and
Property Property Property Transfer
Acquisition 135,235,900.00 100.00% payment of None Long-term 0.00 6,560,017.61 No
Developmen management management completed
consideration
t Co., Ltd.
s
Shenzhen Electronics Acquisition 2,597,682,400.0 100.00% Issuance of None Long-term Electronics Transfer 0.00 16,615,312.3 No
SegMaker markets, shares and markets,
23
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Co., Ltd. property 0 payment of hotels, completed 2
management consideration property
, and makers s management
, and makers
Longyan
Energy
Technology
(Hangzhou)
Co., Ltd., http://www.cninfo.com.c
Shenzhen n
Raytai
Announcement of
SEG Technology
CdTe Film Shenzhen SEG Co., Ltd.
Longyan Photovoltai In
Establishmen Self-owned PV power Novembe on the Establishment of
Energy New energy 82,500,000.00 50.00% c Long-term preparatio 0.00 -2,395,988.98 No
t capital station and r 12, 2016 SEG Longyan Energy
Technology Engineering n
BIPV Technology Co., Ltd. and
Co., Ltd. Co., Ltd.
Launch of CdTe Film
and
Photovoltaic Industrial
Shenzhen
Base
Energy
Nanjing
Energy
Holding
Limited
Announcement of
Shenzhen Tianjin
Shenzhen SEG Co., Ltd.
SEG Allied
Internet Internet In on the Establishment of
Lianzhong Establishmen Self-owned eSports December
access 8,250,000.00 55.00% Long-term access preparatio 0.00 -56,208.02 No Shenzhen SEG Allied
Internet t capital Internet 16, 2016
services services n eSports Co., Ltd. and
Technology Technology
Launch of the E-Sports
Co., Ltd. Co., Ltd.
Stadium Project
Zhuhai http://www.cninfo.com.c
Shenzhen Zhongtong
Wi-Fi Wi-Fi n
SEG Lexing In
project of Establishmen Self-owned project of April 7, Announcement on the
Zhongtong 980,000.00 49.00% Network Long-term preparatio 0.00 0.00 No
China t capital China 2017 Investment and
Technology Technology n
Railway Railway Establishment of
Co., Ltd. Co., Ltd.
Shenzhen SEG
and
24
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Shenzhen Zhongtong Technology
Donglinde Co., Ltd. and
Investment Participation in the WiFi
Co., Ltd. Project of China
Railway
5,248,877,200.0 37,114,684.7
Total -- -- -- -- -- -- -- -- 0.00 -- -- --
0 4
25
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
3. Significant non-equity investment in progress in the reporting period
√ Applicable □ Not applicable
Unit: Yuan
Reasons for
Accumulated
Industries Accumulated incomplianc
Fixed Investment amount
involved income as of e with the
Investmen asset amount in the invested as of Source of Schedul Estimate
Project name in the end of the schedule
t mode investmen reporting the end of the capital e d income
investmen reporting and the
t or not period reporting
t period estimated
period
income
Self-owne
Nantong SEG Real d capital -13,140,910.0
Self-built No 151,925,986.4 749,190,834.0 - - -
Times Plaza estate and bank 6
2 1
loan
Land use right in
Shenzhen-Shanto
New Self-owne
u Cooperation Self-built Yes 28,010,000.00 28,010,000.00 - - -
energy d capital
Zone of SEG
Longyan
CdTe production
New Self-owne
line of SEG Self-built Yes 88,000,000.00 88,000,000.00 - - -
energy d capital
Longyan
-13,140,910.0
Total -- -- -- 267,935,986.4 865,200,834.0 -- -- - --
6
2 1
4. Financial assets investment
(1) Security investment
√ Applicable □ Not applicable
Changes
in fair
Monetar
value Changes in Sales
y Profit or loss
Stoc Short form Initial Accounting recognize accumulate proceed
Stock Opening book amount in the Closing book Accountin Source of
k of the investment measuremen d in profit d fair value s in the
code value in the reporting value g item capital
type security cost t mode or loss in recognized reportin
reporting period
the in equity g period
period
reporting
period
Financial
Measuremen
Shar 60077 Youhao -214,210.9 assets Self-owne
90,405.00 t of fair 683,290.58 0.00 0.00 469,079.59
e 8 Group 9 available d capital
value
for sale
Measuremen Long-term
Shar 00006 Huakong 279,307,046.3 174,552,073.9 -3,033,891.9 171,518,119.8 Self-owne
t by the cost 0.00 0.00 equity
e 8 SEG 8 9 8 5 d capital
method investment
SEG Measuremen Financial
Shar 83277 8,275,321.43 13,515,392.83 0.00 0.00 13,515,392.83 Self-owne
Navigation t by the cost assets
26
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
e 0 s method available d capital
for sale
287,672,772.8 188,750,757.4 -214,210.9 -3,033,891.9 185,502,592.2
Total -- 0.00 0.00 0.00 -- --
1 0 9 8 7
(2) Derivative investment
□ Applicable √ Not applicable
There is no derivative investment in the reporting period.
VI. Sales of major assets and equities
1. Sales of major assets
□ Applicable √ Not applicable
No major assets are sold in the reporting period.
2. Sales of major equities
□ Applicable √ Not applicable
VII. Analysis of main controlling and holding companies
√ Applicable □ Not applicable
Main subsidiaries and holding companies accounting for more than 10% of the Company's net profit
Unit: Yuan
Company Registered Operating Operating
Company type Major business Industry Total assets Net assets Net profit
name capital income profit
Operation and
management of
Electronics
Wujiang SEG Subsidiary professional 3,000,000.00 23,695,323.42 5,209,241.58 8,116,494.24 2,331,356.60 1,760,782.60
market
electronics
market
Operation and
management of
Electronics
Wuxi SEG Subsidiary professional 3,000,000.00 18,508,376.38 4,393,076.67 2,187,708.92 -58,548.94 -78,304.19
market
electronics
market
Development Development
Nantong SEG Subsidiary and operation and operation of 30,000,000.00 879,841,253.05 16,859,089.94 968,132.89 -6,761,655.34 -4,744,520.90
of real estate real estate
Operation and
management of
Electronics
Shunde SEG Subsidiary professional 6,000,000.00 5,479,681.19 3,307,872.58 1,519,486.54 26,954.39 56,542.99
market
electronics
market
SEG Credit Subsidiary Micro-credit Finance 150,000,000.00 473,191,333.92 199,425,662.55 32,739,226.02 12,277,406.85 9,208,055.13
Property
operation and
SEG Baohua Subsidiary Property lease 30,808,800.00 168,159,234.05 101,251,525.05 45,122,397.06 19,964,006.28 15,071,605.22
management
and hotel
27
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
business
Channel retail
terminal of
electronic
Trade and
SEG Industry Subsidiary products and 25,500,000.00 87,347,077.32 43,675,554.58 35,864,919.96 -1,286,899.76 -971,026.31
property lease
property
operation and
management
Operation and
management of
Electronics
Xi'an SEG Subsidiary professional 3,000,000.00 36,959,842.93 13,127,687.71 17,717,142.22 5,282,947.98 4,506,707.84
market
electronics
market
Operation and
management of
Longgang Electronics
Subsidiary professional 3,000,000.00 20,666,576.85 5,592,799.05 6,894,406.45 1,216,698.60 926,998.76
SEG market
electronics
market
Operation and
management of
Electronics
Suzhou SEG Subsidiary professional 3,000,000.00 27,571,182.10 6,224,221.11 21,679,589.19 1,299,491.28 903,148.75
market
electronics
market
Operation and
management of
Changsha Electronics
Subsidiary professional 35,000,000.00 94,129,784.36 72,833,241.63 11,863,928.52 4,093,123.82 3,070,809.45
SEG market
electronics
market
Operation and
management of
Xi'an Hairong Electronics
Subsidiary professional 3,000,000.00 23,582,288.79 4,989,237.15 11,117,247.72 1,645,440.80 1,478,392.41
SEG market
electronics
market
Operation and
management of
Electronics
Nanjing SEG Subsidiary professional 20,000,000.00 21,918,917.80 2,516,516.39 12,064,470.86 -1,945,379.00 -1,920,416.40
market
electronics
market
Operation and
management of
Suzhou SEG Electronics
Subsidiary professional 8,000,000.00 22,320,735.18 -950,720.29 10,014,693.68 1,464,765.63 1,098,574.24
Digital market
electronics
market
Nantong SEG Property Property
Subsidiary 5,000,000.00 13,901,528.23 -7,185,269.09 8,191,890.05 -2,989,053.48 -2,683,452.39
Operation operation operation
SEG
Subsidiary New energy Energy 165,000,000.00 136,275,031.30 136,204,011.02 -2,395,988.98 -2,395,988.98
Longyan
SEG Subsidiary Internet access Internet services 24,800,000.00 14,943,791.98 14,943,791.98 -56,208.02 -56,208.02
28
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Lianzhong service
Subsidiary manufacturing
Wi-Fi project
SEG of
of China 20,000,000.00 2,000,000.00 2,000,000.00
Zhongtong communications
Railway
equipment
Subsidiary Management
of electronics Electronics
SEG Kangle markets and markets and 5,000,000.00 66,409,171.07 44,014,778.46 26,265,254.11 16,681,587.67 12,502,739.08
property property leasing
management
SEG Property Subsidiary Property Property
5,000,000.00 130,377,901.50 67,533,453.09 27,899,956.45 7,284,620.53 6,560,017.61
Development management management
Subsidiary Electronics
Electronics
markets,
markets,
hotels,
SegMaker property 10,000,000.00 326,829,658.49 250,527,792.57 66,570,968.13 25,477,221.04 16,615,312.32
property
leasing, and
management,
leasing
and makers
Subsidiary Real estate Real estate
SEG Real development development
102,500,000.00 4,076,922,064.33 863,072,053.12 188,373,969.48 14,254,927.78 3,888,812.73
Estate and and
management management
Computer,
communication
and other
electronic
Communication
Huakong Holding equipment
equipment 1,006,671,464.00 1,814,976,904.91 1,042,490,065.03 92,777,210.59 -17,112,598.42 -17,471,098.54
SEG company manufacturing
manufacturing
industries and
economic
information
consulting
Operation and
management of
Shanghai Holding Electronics
professional 5,000,000.00 18,618,373.35 9,240,145.38 2,663,245.69 -597,818.23 -552,724.94
SEG company market
electronics
market
Holding Exhibition
CEEC 30,000,000.00 16,515,756.68 14,499,159.86 -7,318,486.45 -7,318,882.20
company market
Acquisition and disposal of subsidiaries in the reporting period
√ Applicable □ Not applicable
Mode of acquisition and
Company name disposal of subsidiaries in Impact on the overall operation and performance
the reporting period
In the reporting period, the operating income is RMB
SEG Real Estate Investment Co., Ltd. Acquisition of stocks
188,374,000, and the total profit achieved is RMB 14,930,000.
SEG Kangle Enterprise Development Co., Acquisition of stocks In the reporting period, the operating income is RMB
29
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
Ltd. 26,265,300, and the total profit achieved is RMB 16,680,000.
In the reporting period, the operating income is RMB
SEG Property Development Co., Ltd. Acquisition of stocks
27,900,000, and the total profit achieved is RMB 7,460,000.
In the reporting period, the operating income is RMB
Shenzhen SegMaker Co., Ltd. Acquisition of stocks
66,571,000, and the total profit achieved is RMB 25,470,000.
It is in preparation and has no operating income in the reporting
SEG Longyan Energy Technology Co., Ltd. Establishment period. As the organization expense is recognized in the cost,
the loss is RMB 2,396,000 in the reporting period.
It is in preparation and has no operating income in the reporting
Shenzhen SEG Lianzhong Internet
Establishment period. As the organization expense is recognized in the cost,
Technology Co., Ltd.
the loss is RMB 56,200 in the reporting period.
Shenzhen SEG Zhongtong Technology Co., It is in preparation and has no operating income in the reporting
Establishment
Ltd. period.
Information on main controlling and holding companies
1. In the reporting period, the operating income of SEG Credit decreases by 33.97% year on year, mainly because its
business shrinkage results in the decrease in both the income and the total profit.
2. In the reporting period, the operating income of SEG Industry decreases by 63.41% year on year, mainly because its
termination of the trade business results in a loss of RMB 1,080,000.
3. In the reporting period, the operating income of Longgang increases by 50.44% year on year, mainly due to a change
in the business mode. The net amount of some businesses is recognized as the operating income last year, while both the
operating income and the operating expense are stated in the reporting period. The change of business mode does not
affect its total profit.
4. In the reporting period, the loss of Nanjing SEG decreases by RMB 1,790,000, mainly because the rental costs
decrease over the same period last year.
5. In the reporting period, the total profit of Wujiang SEG increases by 114.68% year on year, mainly because its market
rental income and advertising revenue increase by 8.41%, and growth in its gross profit results in its profit growth. As its
cooperation mode has changed, such growth is not sustainable.
6. In the reporting period, the loss of Nantong SEG is RMB 4,740,000, mainly because Nantong SEG Times Plaza was in
initial stage and needs a period of time to test the water and the decoration expenses are amortized and recognized in
current profit.
7. In the reporting period, the operating income of Wuxi SEG decreases by 35.01% year on year and the net profit
declines sharply, mainly because its overall market occupancy rate decreases over the same period last year. At present,
the company enters into the procedure of equity transfer.
8. In the reporting period, the total profit of Suzhou SEG decreases by 70.98% year on year, mainly because its property
lessor Zongheng International Electronic Expo City (Suzhou) Co., Ltd. sold the property and it changed from direct
operation and management to entrusted management. The change in the operation model has influenced the income and
profit of Suzhou SEG to certain extent.
9. In the reporting period, the operating income of Suzhou SEG Digital decreases by 47.51% year on year, mainly
because it adjusted the business type and terminated direct sales of digital products. As the new business has a higher
return, the total profit of Suzhou SEG Digital increases greatly in the reporting period.
10. In the reporting period, the loss of SEG Intelligent decreases by RMB 1,820,000, mainly because it was open last
year and the organization expense was recognized in current profit and loss in the same period last year.
11. In the reporting period, the operating income of Nantong SEG is RMB 8,190,000 and the loss is RMB 2,660,000,
mainly because Nantong SEG Times Plaza was open at the end of last year and the market expansion cost increased.
12. In the reporting period, the operating income of SEG Real Estate decreases by 36.71% and the total profit decreases
by 86.07% year on year, mainly because a large sum of house payments of Huizhou Stars Real Estate project were
30
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
carried forward in profit and loss in the same period last year while remaining buildings of the project are sold in the
reporting period and fewer house payments are carried forward. The plaza project of New Urban has sold out the
property of RMB 1.431 billion yuan but the income is not eligible for recognition in the reporting period. SEG Real
Estate obtained RMB 60,590,000 from transfer of 48 houses in the same period last year, but has no such income in the
reporting period.
13. In the reporting period, the operating income of SegMaker increases by 924.15% year on year and the total profit
increases greatly, mainly because SEG Group transferred 170 houses to SegMaker for free in July 2016. Since then the
incomes belong to SegMaker, resulting in the operating income and profit increase dramatically.
14. SEG Longyan is newly established company in the reporting period. It is engaged in the R&D, production, and sales
of CdTe solar cell modules and EPC of the PV power generation system and BIPV engineering. The organization
expense is recognized as the cost, leading to a loss in the early stage of the company’s establishment.
15. CEEC, of which the Company holds 30% of the equity, is still in preparation. As the organization expense is
recognized in current profit or loss, its loss is RMB 7,320,000 and its income from investment decreases by RMB
2,200,000 in the reporting period.
VIII. Structural entity controlled by the Company
□ Applicable √ Not applicable
IX. Earnings forecasts from January to September 2017
Warning and reasons for forecasts on loss of the accumulated net profit from the beginning of the year to the end of next
period or material changes in net profit year on year
√ Applicable □ Not applicable
Earnings forecast: Upward trend compared with that (brfore adjustment) of the same period of previous year
Type of data: exact number
Same period
From the beginning of the year last year
Decrease or increase
to the end of next period (before
adjustment)
Estimated accumulated net profit
5,400.00 4,227.85 Increase 27.72%
(RMB 10,000)
Basic earnings per share
0.044 0.054 Decrease -19.07%
(Yuan/share)
1. The Company has issued shares and purchased underlying assets for major assets restructuring in Q1
2017. Four target companies, that is, SEG Real Estate, SEG Kangle, SegMaker, and SEG property
development, have completed asset transfer on January 19, 2017. As the Company includes these
underlying assets in the consolidated statements in 2017, the profit or loss of the four target companies is
included in earnings forecasts from January to September 2017.
2. The Company issued 450,857,200 shares to SEG Group in the reporting period and handled equity
registration and registration of change in its registered capital on February 15, 2017. In the same period last
Notes to earnings forecast year, Huizhou Stars Real Estate project has a large sum of profit or loss carried forward. In the reporting
period, remaining buildings of the project are sold and fewer profit or loss is carried forward. The plaza
project of New Urban has sold out the property of RMB 1.431 billion yuan but the income is not eligible
for recognition in the reporting period. It is estimated that the project will partly bring forward the profit or
loss from Quarter 4, 2017 and that the range of profit increase will be lower than that of capital stock,
leading to lowering down the earnings per share.
3. Financial data in the foregoing earnings forecasts is not audited yet, and the disclosed data in Q3 2017
report shall prevail.
31
Fulltext of 2017 Semi-annual Report of Shenzhen SEG Co., Ltd.
X. Company's risks and countermeasures
(1) Market competitions are fierce.
During recent years, the mobile Internet has been developing rapidly, and the emerging e-commerce platforms have been
exploring the segmented market sectors. The growth of e-commerce poses great impacts on the traditional
brick-and-mortar stores. In the future, as the e-commerce business continues to encroach on market shares, the sales
revenues of the brick-and-mortar stores will be further adversely affected.
The competition among industrial rivals in the electronics market is also intense. Under the slumped macro-economy and
the strong growth of e-commerce business, the companies embarking on the electronics market have to fiercely compete
for both customer and manufacturer resources. As the whole industry keeps shrinking, the price war is doomed to
become an important measure to win resources and maintain occupancy rates. In the future, this situation may cause
some operation risks to the electronics market.
Countermeasures: The Company will reform and transform its previous operation mode in the electronics market and
create a comprehensive and brand-new industrial eco-system with compound business patterns. At the same time, the
Company will actively seek for new business opportunities, ensure the harmonious development of multiple business
patterns, and expand its market to the strategic emerging industry, high-end manufacturing industry, and service
industry.
(2) Supporting financing cannot complete fund raising as planned.
During the restructuring process, the Company plans to issue stock shares to less than 10 specific investors to raise
supporting funds. The total amount of the supporting fund will not exceed 2 billion yuan, and the issue price will be no
less than 9.91 yuan/share. However, this fund raising intention may be affected by the fluctuation of the stock market
and the expectations of investors; therefore, a lot of uncertainty lies in whether the supporting financing can be
successfully implemented.
Countermeasures: If the supporting fund fails to be raised or the actually raised amount is less than the planned amount,
the Company will fill the funding gap by measures like self financing and bank loans.
32
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Chapter 5 Important Matters
I. Annual general meetings and extraordinary general meetings in the reporting period
1. Annual general meetings in the reporting period
Session Type of meeting Investment proportion Date of meeting Date of disclosure Disclosure index
http://www.cninfo.com.cn
Announcement of
1st extraordinary
Extraordinary general Shenzhen SEG Co., Ltd.
general meeting in 30.55% March 2, 2017 March 3, 2017
meeting on Resolutions of the 1st
2017
Extraordinary General
Meeting in 2017
http://www.cninfo.com.cn
Announcement of
2nd extraordinary
Extraordinary general Shenzhen SEG Co., Ltd.
general meeting in 55.89% March 16, 2017 March 17, 2017
meeting on Resolutions of the 2nd
2017
Extraordinary General
Meeting in 2017
http://www.cninfo.com.cn
Announcement of
22nd annual general Annual general Shenzhen SEG Co., Ltd.
56.05% May 9, 2017 May 10, 2017
meeting in 2016 meeting on Resolutions of the
22nd Annual General
Meeting in 2016
http://www.cninfo.com.cn
Announcement of
3rd extraordinary
Extraordinary general Shenzhen SEG Co., Ltd.
general meeting in 55.90% June 12, 2017 June 13, 2017
meeting on Resolutions of the 3rd
2017
Extraordinary General
Meeting in 2017
http://www.cninfo.com.cn
Announcement of
4th extraordinary
Extraordinary general Shenzhen SEG Co., Ltd.
general meeting in 55.92% July 21, 2017 July 22, 2017
meeting on Resolutions of the 4th
2017
Extraordinary General
Meeting in 2017
2. Request of preferred stockholders recovering voting powers for extraordinary general meetings
□ Applicable √ Not applicable
II. Plan of profit distribution and transfer of capital reserves into share capital in the reporting
period
□ Applicable √ Not applicable
The Company plans not to distribute cash dividends or bonus shares and not to transfer reserves into share capital.
33
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
III. Commitments fulfilled in the reporting period or yet to be fulfilled as of the end of the
reporting period by actual controllers, shareholders, affiliates, purchasers, or other promisers of
the Company
√ Applicable □ Not applicable
34
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Subject Type Content Fulfillment
date term
Commitment for
share reform
Commitments in the
Acquisition Report
and the Report of
Changes on Equity
"1. 100% shares of SEG Property have been entrusted to a share entrusting agency as
required. Its equity form is authentic and valid, and the equity structure and ownership are
clear. The Company has no objection to the share ownership, share quantity, and share
holding percentage of SEG Property. The Company has no disputes over share ownership Asset transfer is
with SEG Property and other shareholders. Before
Shenzhen SEG Other completed, and the
August 3, 2016 completion of
Group Co., Ltd. commitment 2. In case any dispute over ownership of the 3.85% shares of SEG Property of which commitment is
restructuring
ownership has not been determine as of July 26, 2016 occurs in the future, the Company fulfilled.
commits to SEG Property that the Company will provide any necessary assistant to SEG
Property to solve the dispute, protect SEG Property from any loss caused thereby, and
undertake corresponding responsibilities."
1. The Company does not exist any of the following situations as specified in Clause 6,
Commitments made Administrative Measures On Acquisition Of Listed Companies: (1) Damage legitimate
at the time of rights and interests of the company acquired and its shareholders utilizing acquisition of
restructuring of listed company; (2) With large amount of outstanding debts and this in-debt status has
major assets lasted for a certain period of time; (3) Has actual or alleged serious illegal activities in
Asset transfer is
recent three years; (4) Has serious behaviors of breaching promises in securities market in Before
Shenzhen SEG Other completed, and the
recent three years; (5) Other situations in which no acquisition of listed companies are August 3, 2016 completion of
Group Co., Ltd. commitment commitment is
allowed according to laws and administrative regulations and in the opinions of CSRC. restructuring
fulfilled.
2. The Company and its main managers have not suffered from any administrative
punishment (administrative punishment obviously unrelated to security market excluded),
criminal punishment, major civil lawsuit or arbitration related to economic disputes
within the last five years. In case of breach of the foregoing commitments, the Company
will bear all losses thus incurred to Shenzhen SEG, and the subject company."
"1. The Company is an enterprise incorporated in China that owns the full capacity for Before Asset transfer is
Shenzhen SEG Other
civil conduct and has the legal body qualification for participating in the restructuring, August 3, 2016 completion of completed, and the
Group Co., Ltd. commitment
signing agreements with Shenzhen SEG, and performing rights and obligations under the restructuring commitment is
35
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
agreement. fulfilled.
2. Except that the property located at 4F, Block 2, SEG Industry Building of SEG Real
Estate funded by the Company is to handle the transfer formality (with no legal
impediment), the Company has fulfilled the obligation of contributing capital to the
subject company, and has no acts against its obligations and responsibilities as a
shareholder, such as false contribution, deferred investment, or withdrawal of capital.
There are no circumstances that may affect the legal existence of the subject company.
3. There is no dispute or potential dispute over ownership of equities of the subject
company. There are no circumstances that may affect the legal existence of the subject
company.
4. The equities held by the Company in the subject company are actually legally owned.
There is no dispute or potential dispute over ownership of equities, no trust, shareholding
under entrustment or similar arrangement, no commitment or arrangement of forbidden
transfer or limited transfer, no pledge, freezing, seals up, property preservation or other
limitation of rights, and no lawsuit, arbitration or other forms of dispute which would
affect the restructuring. Meanwhile, the Company guarantees that the equities it held in
the subject company will maintain the status until the equities are registered under
Shenzhen SEG after change of registration.
5. The equities held by the Company in the subject company are assets with clear
ownership. The Company undertakes that there are no legal obstacles to stock transfer
after the restructuring of Shenzhen SEG is approved by CSRC, and no credit and debt
disputes. The Company promises to complete formalities for ownership transfer of these
equities within the agreed period.
6. Before the equities are registered under Shenzhen SEG after change of registration, the
Company undertakes that the subject company will maintain normal, orderly, and
legitimate operation, and will not take actions irrelevant to normal production and
management, such as disposal of assets, external guarantee, or additional major debts, or
illegally transfer or conceal assets and business. If the foregoing actions are indeed
necessary, provided that national laws, regulations, and normative documents are not
violated, these actions can be taken only after written approval of Shenzhen SEG.
7. The Company undertakes that there are not any ongoing or potential litigation,
arbitration, or dispute that may affect the Company's equity transfer, and all agreements or
contracts do not contain restrictive clauses that may affect the Company's equity transfer.
The articles of association, internal management system documents, and contracts or
agreements do not contain restrictive clauses that may affect the Company's equity
transfer. In case of breach of the foregoing commitments, the Company will bear all
36
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
losses thus incurred to Shenzhen SEG."
"1. In the recent 5 years, the Company has not been subject to any administrative penalty
(except those not related to the securities market) or criminal penalty.
2. In the recent 5 years, except for those cases that have been concluded, such as the case
of Hainan SEG International Trust and Investment Company, Zhongshi case, GTJA case
and Dasheng case, the Company is not involved in other major civil proceedings or
arbitration (the subject in dispute of 10 million yuan) related to economic disputes.
Before
Shenzhen SEG Other 3. The Company has never been suspected of insider trading related to major asset August 3, 2016 completion of Completed
Group Co., Ltd. commitment restructuring and placed on file for investigation or placed on file with the case not restructuring
settled. In the recent 5 years, the Company has never failed to repay large debts or fulfill
commitments, or been subject to administrative supervision measures by the CSRC or
disciplinary action by the Stock Exchange due to insider trading related to major assets
restructuring, or been held criminally liable by the judicial authorities according to law. In
case of breach of the foregoing commitments, the Company will bear all losses thus
incurred to Shenzhen SEG."
Bo Hongxi, Cao
Xiang, Fan
Zhiqing, Li
Luoli, Liu
Fusong, Liu "1. I have not been subject to any administrative penalty by the CSRC in recent 36
Zhijun, Ru months, or public censure by the Stock Exchange in the recent 12 months.
Guiqin, Song Before
Other 2. I have not been investigated by judicial authorities due to alleged crimes or by CSRC
Pingping, Tang August 3, 2016 completion of Completed
commitment due to alleged irregularities.
Chongyin, Wang restructuring
Li, Xu Ning, Yu In case of breach of the following commitments, I will bear all losses thus incurred to
Qian, Zhang Shenzhen SEG."
Guangliu, Zhang
Haifan, Zheng
Dan, Zhu
Longqing
Directors, "1. In the recent 5 years, the Company has not been subject to any administrative penalty
supervisors, and or criminal penalty or involved in other major civil proceedings or arbitration related to
Before
senior Other economic disputes.
August 3, 2016 completion of Completed
executives of commitment 2. The Company has never been suspected of insider trading related to major asset restructuring
Shenzhen SEG restructuring and placed on file for investigation or placed on file with the case not
Group Co., Ltd. settled. In the recent 5 years, the Company has never failed to repay large debts or fulfill
37
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
commitments, or been subject to administrative supervision measures by the CSRC or
disciplinary action by the Stock Exchange due to insider trading related to major assets
restructuring, or been held criminally liable by the judicial authorities according to law. In
case of breach of the following commitments, I will bear all losses thus incurred to
Shenzhen SEG."
SegMaker, SEG
Kangle, SEG "1. In the recent 3 years, the Company has not been subject to any major administrative
Property punishment or criminal punishment or involved in other major civil proceedings or
Development, arbitration related to economic disputes.
SEG Real 2. The Company has never been suspected of insider trading related to major asset
Estate, SEG restructuring and placed on file for investigation or placed on file with the case not Before
Other
New Urban settled. In the recent 5 years, the Company has never failed to repay large debts or fulfill August 3, 2016 completion of Completed
commitment
Construction, commitments, or been subject to administrative supervision measures by the CSRC or restructuring
SEG Property disciplinary action by the Stock Exchange due to insider trading related to major assets
Management, restructuring, or been held criminally liable by the judicial authorities according to law. In
Huizhou Stars, case of breach of the following commitments, I will bear all losses thus incurred to
Xi'an SEG, Shenzhen SEG."
Beijing
"As of the date of issuance of the commitment letter, SEG Kangle owns 9 properties with
the total construction area of 12,941.28 MM㎡. The actual proprietor of the property
located at 1F, Block 1, SEG Industry Building with an area of 902 MM㎡ is SEG
Group. Due to the provision that industrial buildings in Shenzhen shall be transferred as a
whole, the transfer registration formality for the property has not been handled. The actual
proprietor of Room 508, Block 4, SEG Residential Quarter is SEG Kangle, but the
property is registered under SEG Group and the transfer formality for the property has not
been handled. The Company undertakes that all parties have no disputes over the
ownership of the foregoing property whose registered proprietor is SEG Kangle but Before
Shenzhen SEG Other
whose actual proprietor is SEG Group and the property whose registered proprietor is August 3, 2016 completion of Completed
Group Co., Ltd. commitment
SEG Group but whose actual proprietor is SEG Kangle. SEG Group will assist SEG restructuring
Kangle in completing the division and transfer registration formalities for the foregoing
properties. After the restructuring, if Shenzhen SEG suffers any losses due to ownership
of such properties, SEG Group will compensate Shenzhen SEG in full.
2. The construction in process-assembly workshop that SEG Group uses to contribute
capital to SEG Real Estate is 4F, Block 2, SEG Industry Building (real estate
proprietorship certificate No.: S. F. D. Zi. No. 3000759297) with the total area of 1,936.71
MM㎡. The property was delivered to SEG Real Estate upon capital contribution, but
the transfer formality could not be handled without the certificate on capital contribution.
38
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Due to negligence of the handler, the property was registered under SEG Group together
with other properties of SEG Industry Building belonging to SEG Group. Due to the
restriction of transfer of industrial buildings as a whole, the transfer formality has not
been handled. SEG Real Estate has been occupying, using, and acquiring operating
revenue from the property since capital contribution. The Company will assist SEG Real
Estate in completing the transfer registration formality of the foregoing property. After the
restructuring, if Shenzhen SEG suffers any losses due to ownership of such properties,
SEG Group will compensate Shenzhen SEG in full.
3. The Company will help and propel the subject company and its subsidiaries to
complete ownership registration of land property assets and regulate the land purpose.
4. If due to land use rights and property assets existing before the completion of the
restructuring, the subject company and its subsidiaries (1) fail to timely handle the land
use rights and the proprietorship certificate (excluding results not caused by the subject
company and its subsidiaries, such as force majeure, laws, policies, government
management, and change in planned land purpose); or (2) cannot handle the relevant land
use rights and real estate proprietorship certificate (excluding results not caused by the
subject company and its subsidiaries, such as force majeure, laws, policies, government
management, and change in planned land purpose); or (3) are subject to other
circumstances of nonstandard land use rights and properties (excluding results not caused
by the subject company and its subsidiaries, such as force majeure, laws, policies,
government management, and change in planned land purpose), and suffer actual losses
including but not limited to compensation, fines, expenses, and interests damage, the
Company will compensate the subject company and its subsidiaries in full.
Before issuance date of the restructuring report of Shenzhen SEG, SEG Group will finish
formalities related to transfer of ownership of the property (4F, Block 2, SEG Industry
Building). If SEG Group fails to finish the formalities at expiration, SEG Group agrees to
Before
Shenzhen SEG Other compensate to SEG Real Estate RMB 1.5 million in currency, and allows SEG Real Estate
August 3, 2016 completion of Completed
Group Co., Ltd. commitment to continue to use the property for free until SEG Group transfers the ownership of the
restructuring
property to SEG Real Estate. SEG Group agrees to compensate SEG Real Estate for any
operating loss or other economic loss of SEG Real Estate caused by SEG Group's failure
in transferring the ownership of the property.
39
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
100% of the equity
of SegMaker is
transferred to the
Commitment The 6th interim meeting of the 5th Board of Directors held on January 26, 2011 reviewed Company. The
on horizontal and approved the Proposal of Solving the Horizontal Competition between the Company Company no
Commitment made
competition, and Its Controlling Shareholder. After friendly consultation, SEG Group agreed to entrust From February 1, longer has to
at the time of initial Shenzhen SEG January 26,
related the Company to operate and manage with full authority SEG Communications Market 2011 to January commission
public offerings or Group Co., Ltd. 2011
transaction, and under direct management of SEG Group. Therefore, the two parties have signed the 31, 2017. SegMaker to
refinancing
capital entrustment operation and management contract, and SEG Group will pay the Company operate the SEG
occupation RMB 200,000 Yuan as entrust management expenses. communication
market. The
commitment is
fulfilled.
Commitment on
equity incentives
Other commitments
made to the medium
and small
shareholders of the
Company
Were commitments
Yes
fulfilled on time?
If any commitment is not fulfilled as
scheduled, the reason for failure of
N/A
fulfillment and the subsequent work
plan have to be specified.
40
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
IV. Appointment or removal of the CPA firm
Has the annual financial report been audited?
□Yes √No
The annual financial report is not audited yet.
V. Explanation of the Board of Directors and the Board of Supervisors about "non-standard audit
report" in the reporting period issued by the CPA firm
□ Applicable √ Not applicable
VI. Explanation of the Board of Directors on "non-standard audit report" in the previous year
□ Applicable √ Not applicable
VII. Bankruptcy reorganization
□ Applicable √ Not applicable
There is no matter in connection with bankruptcy reorganization in the reporting period.
41
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
VIII. Litigation
Major lawsuits and arbitrations
√ Applicable □ Not applicable
S/N Amount
Basic Information on lawsuits and Estimated liabilities Judgment result Judgment Disclosure
(RMB Progress Disclosure index
arbitrations incurred or not and impact execution date
10,000)
1 Case number: 2016 G. 0102 M. C.
No. 3653
Plaintiff: Nanning Haiqi Real Estate
Development Co., Ltd.
Defendant 1: Nanning SEG
Electronics Market Co., Ltd.
Judgment result:
("Nanning SEG")
The case has The Company shall
The judgment http://www.cninfo.com.cn
Defendant 2: Shenzhen SEG Co., been pay the liquidated
Ltd. is not Announcement of
decided, and damages of RMB
executed, and September Shenzhen SEG Co., Ltd.
A dispute over the lease contract 1,026.3 No the 666,666.66 to
the 26, 2016 on Receipt of Court
arose among Nanning Haiqi, Nanning counterparty Nanning Haiqi and
counterparty Summons and the Civil
SEG and the Company. Nanning SEG has bear the case
has appealed. Complaint
did not pay the rent for the third year appealed. acceptance fee of
according to the cooperation contract. RMB 5,416.
The court found that Nanning SEG
locked and sealed the shop front on
June 30, 2015, which constituted a
fundamental breach of contract.
Nanning SEG was sued for breach of
contract.
2 The case has Judgment result: 1. The judgment http://www.cninfo.com.cn
Case number: 2016 G. 0102 M. C.
been The court confirms is not Announcement of
No. 3654
decided, and that the contract executed, and June 2, Shenzhen SEG Co., Ltd.
Plaintiff: Nanning Yuanpeng Property 246.98 No
the has been rescinded; the 2017 on the Progress of the
Service Co., Ltd.
counterparty 2. Other claims of counterparty Lawsuit with Nanning
Defendant 1: Nanning SEG has Yuanpeng Property has appealed. Yuanpeng Property
42
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Electronics Market Co., Ltd. appealed. are dismissed. Service Co., Ltd.
Defendant 2: Shenzhen SEG Co.,
Ltd.
A dispute over the property
service contract arose among
Nanning Yuanpeng Property Service
Co., Ltd. (hereinafter referred as
"Yuanpeng Property"), Nanning SEG
and the Company. Nanning SEG did
not pay the rent for the third year
according to the cooperation contract.
The court found that Nanning SEG
locked and sealed the shop front on
June 30, 2015, which constituted a
fundamental breach of contract.
Nanning SEG was sued by Yuanpeng
Property for breach of contract.
3 Case number: (2016) J. Z. A. Zi. No.
2294
As the
Plaintiff: Shenzhen SEG Co., Ltd.
parties
Defendant: Zongheng International http://www.cninfo.com.cn
reached a
Electronic Expo City (Suzhou) Co., Announcement of
settlement,
Ltd. ("Zongheng International") Shenzhen SEG Co., Ltd.
the other
Zongheng International party on the Progress of the
June 2,
breached the Suzhou SEG 2,460 No compensated Not applicable Not applicable Lawsuit and Arbitration
2017
Electronics Market Project for our loss with Zongheng
Cooperation Agreement signed with of RMB 3.5 International Electronic
Suzhou SEG on June 5, 2009. million, and Expo City (Suzhou) Co.,
According to the dispute resolution we canceled Ltd.
terms in Article 7 (4) of the the
cooperation agreement, the Company arbitration.
applied for arbitration to Beijing
Arbitration Commission.
4 The parties http://www.cninfo.com.cn
Case number: 2016 S. 0505 M. C. June 2,
1,900.08 No reached a Not applicable Not applicable Announcement of
No. 5176 2017
settlement. Shenzhen SEG Co., Ltd.
43
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Plaintiff: Suzhou SEG Electronics The other on the Progress of the
Market Co., Ltd. party Lawsuit and Arbitration
Defendant: Zongheng International returned the with Zongheng
Electronic Expo City (Suzhou) Co., principal and International Electronic
Ltd. interest of Expo City (Suzhou) Co.,
loan. We Ltd.
A loan dispute arose between
dismissed
Suzhou SEG and Zongheng
the case.
International. Suzhou SEG filed a
lawsuit against Zongheng
International to the court.
5 (2017) Y. 0304 M. C. No. 5092
Plaintiff: SEG Industry http://www.cninfo.com.cn
Defendant: Shenzhen Wonder The
Announcement of
Industry Co., Ltd. ("Wonder "), Liu properties
have been Shenzhen SEG Co., Ltd.
Guiyun, and Liu Yu
preserved. March 1, on the Receipt of the
A dispute over the purchase and 839.41 No Not applicable Not applicable
The trial is 2017 Notice of the Court's
sales contract arose between SEG
underway.
Industry and the defendant. SEG Case Acceptance by the
The case is
Industry filed a lawsuit to the court, Holding Company
pending.
and applied for preservation of the
properties of the defendant and its
debt guarantors.
6 (2017) Y. 0304 M. C. No. 5088
Plaintiff: SEG Industry http://www.cninfo.com.cn
Defendant: Shenzhen ZTYX The
Announcement of
Technology Co., Ltd., Zhe Shaojun, properties
have been Shenzhen SEG Co., Ltd.
and Zhao Xiaoyan
preserved. March 1, on the Receipt of the
A dispute over the purchase and 1,480.57 No Not applicable Not applicable
The trial is 2017 Notice of the Court's
sales contract arose between SEG
underway.
Industry and the defendant. SEG Case Acceptance by the
The case is
Industry filed a lawsuit to the court, Holding Company
pending.
and applied for preservation of the
properties of the defendant and its
debt guarantors.
44
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
7 (2017) Y. 0304 M. C. No. 7976
Plaintiff: SEG Industry
Defendant: Shenzhen Comnet
Technology Co., Ltd., Xiao The
Qingshan, Zhou Ronghua, Anhua properties
Meishan Small Loan Co., Ltd., and have been
Shenzhen Baiyi Technology Co., Ltd. 515.54 No preserved. Not applicable Not applicable
A dispute over the purchase and The hearing
sales contract arose between SEG is not held
Industry and the defendant. SEG yet.
Industry filed a lawsuit to the court,
and applied for preservation of the
properties of the defendant and its
debt guarantors.
8 (2017) Y. 0304 M. C. No. 7977
Plaintiff: SEG Industry
Defendant: Shenzhen Runto Digital
Co., Ltd., Xiao Qingshan, Zhou The
Ronghua, Anhua Meishan Small properties
Loan Co., Ltd., and Shenzhen Baiyi have been
Technology Co., Ltd. 1,534.5 No preserved. Not applicable Not applicable
A dispute over the purchase and The hearing
sales contract arose between SEG is not held
Industry and the defendant. SEG yet.
Industry filed a lawsuit to the court,
and applied for preservation of the
properties of the defendant and its
debt guarantors.
9 Case number: (2016) J. 0102. M. C.
The case has
No. 21435 been placed
Plaintiff: Beijing SEG Property 2004.74 No on file. The Not applicable Not applicable
hearing is
Development Co., Ltd. ("Beijing
not held yet.
SEG Property")
45
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Defendant: Beijing Furao Real Estate
Development Co., Ltd. ("Beijing
Furao")
Beijing SEG Property (the holding
subsidiary of SEG Realm Estate) and
Beijing Furao entered into Beijing
House Lease Contract on May 29,
2015. Beijing SEG Property has
fulfilled obligations hereunder, but
Beijing Furao still fails to deliver
houses at the south section to Beijing
SEG Property, which constituted a
fundamental breach of contract.
Beijing SEG Property requested the
court to confirm that Beijing House
Lease Contract and the
Supplementary Agreement had been
rescinded on July 14, 2016 and to
order Beijing Furao to pay the
liquidated damages of RMB
8,047,400 and return double the
deposit of RMB 12,000,000.
Other lawsuits and arbitrations
√ Applicable □ Not applicable
S/N Estimated
Basic Information on lawsuits and Amount (RMB liabilities
Progress Judgment result and impact Judgment execution
arbitrations 10,000) incurred or
not
1 2016 G. 0102 M. C. No. 4612 The case has been Nanning SEG shall Both parties have appealed
Nanning SEG will hand over the operating 104.19 No decided, and both compensate for damages to and the judgment is not
premise to Nanning Haiqi according to the parties have appealed. the leased premise of RMB executed yet.
46
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
court ruling, and Nanning Haiqi requested 394,964.8 and pay the
Nanning SEG to compensate for damage attorney fee of RMB 23,000.
and decoration losses of the rented house
and the attorney fee.
2 2016 G. 0102 M. C. No. 4612
Nanning Haiqi requested Nanning SEG to
return the shop front occupied by CCB and Nanning SEG shall pay the
The case has been The counterparty has
compensate for the occupation expense occupation expense at the
decided, and the appealed, and CCB
(temporarily RMB 3,779.8) and the 7.93 No price of RMB 44,388.39 per
counterparty has transferred the shop front
liquidated damages of RMB 71,255.7. year and the attorney fee of
appealed. on July 3, 2017.
Defendant 1 was ordered to compensate for RMB 8,000.
the attorney fee of RMB 8,000 paid by the
plaintiff.
3 2016 G. 0102 M. C. No. 672
The case is undecided
The Company sued against CCB Taoyuan 88.64 No Not applicable Not applicable
yet.
Sub-branch for breach of contract.
4 2016 G. 0102 M. C. No. 672
CCB Taoyuan Sub-branch filed a
counterclaim against the Company and The case is undecided
8.72 No Not applicable Not applicable
requested the Company to rescind the yet.
contract, compensate for decoration
expenses, and pay the attorney fee.
5 (2015) X. M. C. Zi. No. 1573
The case has been Nanning SEG shall pay RMB
Leng Dacheng sued against Nanning SEG 24.58 No Executed
decided. 61,020.
for an economic contract dispute
6 (2015) X. M. C. Zi. No. 1574 Executed
Nanning Ruixi Digital Product Store sued The second instance Nanning SEG shall pay RMB
24.03 No
against Nanning SEG for an economic has been decided. 85,725.58.
contract dispute
7 (2015) X. M. C. Zi. No. 1575 Executed
Nanning Network Computer Accessory The case has been Nanning SEG shall pay RMB
16.78 No
Business Department sued against Nanning decided. 47,408.
SEG for an economic contract dispute
47
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
8 (2016) Y. 0304 M. C. No. 22821 The Company has applied for
The Company is the
The Company sued against the merchant 6.26 No enforcement, and the In progress
prevailing party.
Wu Yupu for unpaid rents. payment is not made yet.
9 (2016) Y. 0304 M. C. No. 24424
Shenzhen Quanxinhao Co., Ltd. sued
against the Company and requested the The hearing is not
Company to cancel 3,802,500 stocks of 0 No held yet on September Not applicable Not applicable
Dalian Beeda Technology (Group) Co., Ltd. 27, 2017.
pledged to the Company and to pay the
litigation expense.
10 The Company is the
prevailing party. The
(2013) S. F. F. M. E. C. Zi. No. 12066 The case has been Principal and interest
200 No principal and interest have
(2014) S. F. F. Z. Zi. No. 05055 settled. repaid
been repaid. No impact is
caused.
11 (2016) Y. 0304 Z. No. 11461
(2015) S. F. F. M. E. C. Zi. No. 14590
The Company is the
SEG Credit sued against Shenzhen Weike prevailing party and is
Oumei Investment Co., Ltd., Huang 310 No In progress Judicial foreclosure
disposing of the pledge. No
Shengwen, and Li Jing for failure to repay loss is expected.
capital with interest according to the loan
contract.
12 (2015) S. F. F. M. E. C. Zi. No. 14589
2016) Y. 0304 Z. No. 11460
The Company is the
SEG Credit sued against Shenzhen Weike prevailing party and is
Oumei Investment Co., Ltd., Huang 220 No In progress Judicial foreclosure
disposing of the pledge. No
Shengwen, and Li Jing for failure to repay loss is expected.
capital with interest according to the loan
contract.
13 (2016) Y. 0304 M. C. No. 11100 The Company is the
SEG Credit sued against Li Xin and Chen The case has been prevailing party and is
148 No Houses seized and the
Huajun for failure to repay capital with settled. disposing of the pledge.
pledge disposed of
interest according to the loan contract. Houses are seized. Some
48
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
impacts are expected.
14 (2016) Y. 0304 M. C. No. 17376
SEG Credit sued against Ling Xiao,
The principal and interest has
Shenzhen Songlian Communication Co., The case has been
500 No been settled. No losses are Payment for goods settled
Ltd. and Chen Lingling for failure to repay settled.
incurred.
capital with interest according to the loan
contract.
15 (2017) Y. 0304 M. C. No. 14559
(2017) Y. 0304 Z. B. No. 1675
SEG Credit sued against Zhou Ronghua, The case is undecided
Shenzhen Runto Digital Co., Ltd., Cheng 300 No Not applicable Not applicable
yet.
Sumin, and Xiao Qingshan for failure to
repay capital with interest according to the
loan contract.
49
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
IX. Punishment and rectification
□ Applicable √ Not applicable
There is no punishment and rectification in the reporting period.
X. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XI. Implementation of the equity incentive plan, employee stock ownership plan, or other employee
incentives
□ Applicable √ Not applicable
There is no the equity incentive plan, employee stock ownership plan, or other employee incentives in the reporting period.
XII. Major connected transactions
50
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
1. Transactions related to routine operation
√ Applicable □ Not applicable
Amount of Percentage Exceeding
Pricing
Party of Type of Price of connected in the
Content of connected principle of Clearing
connected Association connected connected transaction transactions approved Disclosure Disclosure index
transaction connected form
transaction transaction transaction (RMB of the same quota or date
transaction
10,000) kind not
A holding
company owned
Huizhou In
by the Receiving In
SEG accordance
management property Receiving property accordance April 18,
Property with the 52,900 yuan 5.29 0.01% No
board of a management management fees with the 2017
Service Co., market
subsidiary of its services agreement
Ltd. pricing
controlling
shareholder
1-416, Tower 101, SEG
Industrial Zone; 1F, Optical
Fiber Building; In
In
Shenzhen 6F, Plant No. 2; 403, accordance 40.57 Notice on Anticipated Connected
A controlling Leasing the accordance
SEG Group Qingyi Building, Nanyuan with the yuan/square 95.1 0.18% No Transaction Items In 2017 Annual
shareholder property with the
Co., Ltd. Road; 48 houses with the market meter Routine Operations of Shenzhen
agreement
total construction area of pricing SEG Co., Ltd. posted on the
3,907.13 MMin Qing'an CNINF website
Building, No. 1705 (http://www.cninfo.com.cn)
1F, SEG Kangle Building;
8F, SEG Industrial
Building; West Zone,
Tower 2, 8F, SEG In
In
Shenzhen Industrial Building; 3F, accordance 67.53
A controlling Leasing the accordance
SEG Group Tower 101, Shangbu with the yuan/square 391.87 0.74% No
shareholder property with the
Co., Ltd. Industrial Zone; Room 506, market meter
agreement
Tower 303, Pengji Shangbu pricing
Bachelor Apartment; 61
houses including the
connecting corridor in 4F,
51
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Tower A & Tower B, 101
Zhenxing Road, with the
total construction area of
9,672.12 MM
In
Providing In
Shenzhen accordance
A controlling property Providing property 114,500 accordance
SEG Group with the 11.45 0.02% No
shareholder management management services yuan with the
Co., Ltd. market
services agreement
pricing
In
Shenzhen Providing In
A subsidiary of accordance
SEG Talent property Providing property 102,400 accordance
its controller with the 10.24 0.02% No
Training management management services yuan with the
share holder market
Center services agreement
pricing
Shenzhen In
Providing In
SEG High A subsidiary of accordance
property Providing property accordance
Technology its controller with the 91,600 yuan 9.16 0.01% No
management management services with the
Investment share holder market
services agreement
Co., Ltd. pricing
Entrusted to In
In
Shenzhen manage the Entrusted to manage the accordance
A controlling accordance
SEG Group underground underground parking area with the 68,800 yuan 6.88 0.01% No
shareholder with the
Co., Ltd. parking area of of SEG Square market
agreement
SEG Square pricing
In
In
Shenzhen accordance
A controlling Leasing the 61st and 62nd floors of 786,900 accordance
SEG Group with the 78.69 0.13% No
shareholder property SEG Square yuan with the
Co., Ltd. market
agreement
pricing
Total -- -- 608.68 -- -- -- -- --
52
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
2. Connected transactions arising from asset or equity sales and acquisition
√ Applicable □ Not applicable
Book Estimate
Pricing
value of d value
Type of principle Transacti
the of the Price of
connecte Content of of on profit
Related Associati transferr transferre transfer Clearing
d connected connecte or loss Disclosu Disclosure index
party on ed assets d assets (RMB form
transacti transaction d (RMB re date
(RMB (RMB 10,000)
on transacti 10,000)
10,000) 10,000)
on
(if any) (if any)
55% of the
equity of
SEG
Kangle,
Proposal of Issuing
100% of
Stocks and Paying
the equity
Cash to Acquire Assets
of SEG
Shenzh Issuance of and Raise Supporting
Controlli Property
en SEG Fair shares and February Fund and Affiliate
ng Stock Developme 87,707.8 515,714. 515,714.
Group market payment for 0 4, 201 Transaction of
sharehold purchase nt, 100% of 6 72 72
Co., value consideratio 6 Shenzhen SEG Co.,
er the equity
Ltd. ns Ltd. posted on the
of
CNINF website
SegMaker,
(http://www.cninfo.co
and 79.02%
m.cn)
of the
equity of
SEG Real
Estate
Reason for great difference (if any)
The transfer price is consistent with the estimated value. Difference between the transfer price and
between the transfer price and book value
book value is caused by appreciation in appraisal.
or estimated value
1. In the reporting period, the operating income of SEG Real Estate is RMB 188,374,000, and the
net profit attributable to the parent company is RMB 14,154,800.
2. In the reporting period, the operating income of SEG Kangle is RMB 26,265,300, and the net
profit attributable to the parent company is RMB 12,502,700.
Impact on the operating result and 3. In the reporting period, the operating income of SEG Property is RMB 27,900,000, and the net
financial condition of the Company profit attributable to the parent company is RMB 6,560,000.
4. In the reporting period, the operating income of SegMaker is RMB 66,571,000, and the net
profit attributable to the parent company is RMB 616,615,300.
In the reporting period, the total operating income of the four target companies is RMB
309,110,000, and the total net profit attributable to the parent company is RMB 49,830,000.
Fulfillment of agreed performance (if
Same as above
any)
3. Connected transactions arising from joint external investment
□ Applicable √ Not applicable
No connected transaction arising from joint external investment is incurred in the reporting period.
53
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
4. Claim and debt with related parties
√ Applicable □ Not applicable
Are there non-operating claims and debts with related parties?
√Yes □No
Claim receivable from related parties:
□pplicable √ Not applicable
Debt payable to related parties:
Increased Recovered
Interest in the
Opening amount in the amount in the Closing
reporting
Related party Association Cause balance (RMB reporting reporting Interest balance (RMB
period (RMB
10,000) period (RMB period (RMB 10,000)
10,000)
10,000) 10,000)
8%, 0%,
No interest is
collected for
considerations
Capital of stock
borrowing reform, but
Shenzhen SEG
Controlling and SEG Group
Group Co., 17,181.03 67,804.57 10,000 849.39 74,985.61
shareholder consideration collects 8% of
Ltd.
for stock interest for the
purchase fund
supporting
SEG Real
Estate.
5. Other major connected transactions
□ Applicable √ Not applicable
The Company has no other major connected transaction in the reporting period.
XIII. Non-operating capital occupancy by controlling shareholders and affiliates
□ Applicable √ Not applicable
There is no non-operating capital occupancy by controlling shareholders and affiliates in the reporting period.
XIV. Major contracts and performance
1. Trusteeship, contracting, and leasing
(1) Trusteeship
□ Applicable √ Not applicable
The Company has no trusteeship in the reporting period.
54
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
(2) Contracting
□ Applicable √ Not applicable
The Company has no contracting in the reporting period.
(3) Leasing
□ Applicable √ Not applicable
The Company has no leasing in the reporting period.
2. Major guarantee
√ Applicable □ Not applicable
(1) Guarantee
Company's external guarantee situation (excluding the guarantee to its subsidiaries)
Disclosure
Guaranteed
date of Actual date of
for a
Name of guarantee notices Guarantee occurrence (date Actual guarantee Guarantee Guarantee Completed
connected
object related to quota of signing the amount type period or not
party or
guarantee agreement)
not
quota
Mortgage guarantee
clients of China May 26, Joint liability
26,000 June 30, 2017 15,893.8 One year No No
CITIC Bank, SEG 2017 guarantee
New City Branch
Housing guarantee
clients of China
Joint liability
Construction Bank, 45,000 May 05, 2015 4,077.37 Three years No No
guarantee
Huizhou Stars
Branch
Clients purchasing
the SEG New City
February 07, Joint liability
house properties 568.51 Five years No No
2017 guarantee
(China Construction
Bank)
Clients purchasing
the SEG New City
house properties Joint liability
30,000 May 06, 2016 9,355.64 Ten years No No
(Bank of guarantee
Communications of
China)
Clients purchasing
the SEG New City
house properties Joint liability
20,000 July 04, 2016 967.08 Three years No No
(Bank of Agriculture guarantee
and Commerce of
China)
55
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Clients purchasing
the SEG New City
Joint liability
house properties May 06, 2016 6,803.16 Ten years No No
guarantee
(China Merchants
Bank)
Clients purchasing
the SEG New City Joint liability
30,000 May 06, 2016 9,027.07 Ten years No No
house properties guarantee
(Bank of China)
Clients purchasing
the SEG New City
Joint liability
house properties 50,000 May 06, 2016 0 One year No No
guarantee
(Agricultural Bank
of China)
Total amount of approved external Total amount of actually
guarantee quota in the reporting 26,000 occurred external guarantee in 46,692.62
period (A1) the reporting period (A2)
Total amount of approved external Total amount of actual external
guarantee quota by the end of the 201,000 guarantee balance by the end of 46,692.62
reporting period (A3) the reporting period (A4)
Guarantee situation between the Company and its subsidiaries
Disclosure
Guaranteed
date of Actual date of
for a
Name of guarantee notices Guarantee occurrence (date Actual guarantee Guarantee Guarantee Completed
connected
object related to quota of signing the amount type period or not
party or
guarantee agreement)
not
quota
Total amount of approved Total amount of actually
guarantee quota for its occurred guarantee for its
subsidiaries in the reporting subsidiaries in the reporting
period (B1) period (B2)
Total amount of approved Total amount of actual guarantee
guarantee quota for its balance for its subsidiaries by
subsidiaries by the end of the the end of the reporting period
reporting period (B3) (B4)
Guarantee situation between the Company subsidiaries
Disclosure
Guaranteed
date of Actual date of
for a
Name of guarantee notices Guarantee occurrence (date Actual guarantee Guarantee Guarantee Completed
connected
object related to quota of signing the amount type period or not
party or
guarantee agreement)
not
quota
Shenzhen SEG New
Joint liability
City Development 50,000 October 30, 2015 50,000 Two years No Yes
guarantee
Group Ltd.
56
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Total amount of approved Total amount of actually
guarantee quota for its occurred guarantee for its
0 50,000
subsidiaries in the reporting subsidiaries in the reporting
period (C1) period (C2)
Total amount of approved Total amount of actual guarantee
guarantee quota for its balance for its subsidiaries by
50,000 50,000
subsidiaries by the end of the the end of the reporting period
reporting period (C3) (C4)
Total guarantee amount of the Company (the sum of the first three items)
Total amount of approved Total amount of actually
guarantee quota in the reporting 26,000 occurred guarantee in the 96,692.62
period (A1+B1+C1) reporting period (A2+B2+C2)
Total amount of approved Total amount of actual guarantee
guarantee quota by the end of the 251,000 balance by the end of the 96,692.62
reporting period (A3+B3+C3) reporting period (A4+B4+C4)
Proportion of the total actual guarantee balance (A4+B4+C4) to the
53.9%
Company's net assets
Herein:
Guarantee balance provided for shareholders, actual controllers,
0
and other connected parties (D)
Debt guarantee balance directly or indirectly provided for
0
guarantee objects with an asset-liability ratio higher than 70% (E)
Amount of the total guarantee amount minuses 50% of net assets
7,003.85
(F)
Sum of the previous three guarantee amounts (D+E+F) 7,003.85
(2) Illegal external guarantee
□ Applicable √ Not applicable
The Company has no illegal external guarantee in the reporting period.
3. Other major contracts
√ Applicable □ Not applicable
57
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Estimated
Book value
value of
of assets
assets Base date of Fulfillment as
involved in Appraisal Transaction Connected
Contracting Date of involved in asset Pricing of the end of
Counterparty Contract subject the contract agency (if price (RMB transaction or Association
party signing the contract appraisal (if principle the reporting
(RMB any) 10,000) not
(RMB any) period
10,000) (if
10,000) (if
any)
any)
Shenzhen SEG SEG Credit Co., Short-term January Market Controlling
3,000 None No Fulfilled
Group Co., Ltd. Ltd. financing 13, 2016 pricing subsidiary
Shenzhen SEG SEG Credit Co., Short-term April 12, Market Controlling
3,000 None No Fulfilled
Group Co., Ltd. Ltd. financing 2017 pricing subsidiary
Shenzhen SEG SEG Credit Co., Short-term April 14, Market Controlling
3,000 None No Being fulfilled
Group Co., Ltd. Ltd. financing 2017 pricing subsidiary
Shenzhen SEG SEG Credit Co., Short-term April 20, Market Controlling
4,500 None No Being fulfilled
Group Co., Ltd. Ltd. financing 2017 pricing subsidiary
Shenzhen SEG SEG Credit Co., Short-term May 17, Market Controlling
6,000 None No Being fulfilled
Group Co., Ltd. Ltd. financing 2017 pricing subsidiary
Shenzhen SEG SEG Credit Co., Short-term May 19, Market Controlling
3,500 None No Being fulfilled
Group Co., Ltd. Ltd. financing 2017 pricing subsidiary
SPDB Shenzhen
Shenzhen SEG Financial April 7, Market
Branch Tairan 8,300 None No None Fulfilled
Group Co., Ltd. management 2017 pricing
Sub-branch
SPDB Shenzhen
Shenzhen SEG Financial April 10, Market
Branch Tairan 3,000 None No None Fulfilled
Group Co., Ltd. management 2017 pricing
Sub-branch
Shenzhen SEG ABC Shenzhen May 11, Market
Borrowing 18,000 None No None Being fulfilled
Group Co., Ltd. Branch 2017 pricing
Shenzhen SEG ABC Shenzhen April 27, Market
Credit granting 25,000 None No None Being fulfilled
Group Co., Ltd. Branch 2017 pricing
58
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
SPDB Shenzhen Fulfilled
Shenzhen SEG Financial June 22, Market
Branch Tairan 5,000 None No None
Group Co., Ltd. management 2017 pricing
Sub-branch
SPDB Shenzhen Fulfilled
Shenzhen SEG Structural June 22, Market
Branch Tairan 4,000 None No None
Group Co., Ltd. deposits 2017 pricing
Sub-branch
Shenzhen SEG ABC Shenzhen April 27, Cushman &
Mortgage 32,943 32,943 Fair value 32,943 No None Being fulfilled
Group Co., Ltd. Branch 2017 Wakefield
Shenzhen Hongtu
SEG Investment
Management Co.,
Shenzhen SEG Ltd. and Partnership March 15, Market
9,000 None No None Being fulfilled
Group Co., Ltd. Shenzhen agreement 2017 pricing
Guiding Fund
Investment Co.,
Ltd.
Shenzhen SEG
Shenzhen SEG Industrial August 1, Free of Controlling
Borrowing 4,200 None No Being fulfilled
Group Co., Ltd. Investment Co., 2014 interest subsidiary
Ltd.
Suzhou SEG
Shenzhen SEG Digital Plaza June 8, Free of Controlling
Borrowing 1,000 None No Being fulfilled
Group Co., Ltd. Management Co., 2015 interest subsidiary
Ltd.
59
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
XV. Social responsibility
1. Fulfillment of the social responsibility for targeted poverty alleviation
According to the national decision to fight against poverty and the work arrangements of Shenzhen CPC Committee, the
People's Government of Shenzhen, State-owned Assets Supervision and Administration Commission of Shenzhen, and
SEG Group on three-year targeted poverty alleviation, SEG Group was designated to provide poverty alleviation aid for
Zishi Village, Zishi Town, Longchuan County, Heyuan. After receiving the task, the CPC Committee and leaders of the
Company fully realized the importance, arduousness and urgency of poverty alleviation and development in the new
period. Our thoughts and actions followed the spirits conveyed by important talks of Xi Jinping, CPC General Secretary
and decisions and arrangements on targeted poverty alleviation of government at all levels and the upper CPC committee.
SEG Group promptly appointed the leader of the work team and arranged for special personnel to stay at villages for
poverty alleviation. According to unified arrangements of SEG Group, the Company and its controlling subsidiaries
aided 20 low-income families and 46 impoverished persons.
In the first half of 2017, the Company organized "targeted poverty alleviation on campus and study assistance". In March,
the Company donated caring materials to Heyuan Zishi Town Central Primary School and brought STEAM creative
programs to students. In March, the Company arranged for merchants to visit Zishi and consoled low-income families.
Planning for subsequent targeted poverty alleviation: 1. The Company will increase efforts on industrial projects for
targeted poverty alleviation, and promote the pigeon eco-breeding program in the form of enterprises + farmers
according to the uniform arrangement of Longchuan CPC Committee; 2. the Company will promote infrastructure
projects and complete the villager cultural activity plaza, road hardening project, and drinking water purification
transformation.
2. Environmental protection
Are the listed company and its subsidiaries key polluters publicized by the environmental protection department?
Not applicable
XVI. Notes to other major events
√ Applicable □ Not applicable
Inquiry index for the websites disclosing the
Overview of major events Disclosure date
temporary reports
1. Related matters on major assets January 18, 2017 Announcement of Shenzhen SEG Co., Ltd.
restructuring progress about Obtaining Approval on Issuing Shares,
On January 17, 2017, the Company Acquiring Assets by Cash and Raising
receives the Approval on Shenzhen SEG Co., Supporting Funds as well as Related
Ltd.'s Issuing Shares, Acquiring Assets and Transactions from China Securities
Raising Supporting Funds to Shenzhen SEG Regulatory Commission disclosed on
Group Co., Ltd. (Z. J. X. K. [2017] No. 21) http://www.cninfo.com.cn/
issued by China Securities Regulatory
January 18, 2017 Report of Shenzhen SEG Co., Ltd. about
Commission, to approve such matters as the
Issuing Shares, Acquiring Assets by Cash and
Company's issuing shares and acquiring assets
Raising Supporting Funds as well as Related
by cash and raising supporting funds.
Transactions (Revised) disclosed on
At present, the Company has completed http://www.cninfo.com.cn/
the share issuing and transfer of related
underlying assets acquired by cash, the capital January 25, 2017 Announcement of Shenzhen SEG Co., Ltd.
verification procedures of the newly-added about Ownership Transfer Situations of the
registered capital and the procedures of Underlying Assets Related to Issuing Shares,
issuing new shares to SEG Group. But the Acquiring Assets by Cash and Raising
Supporting Funds as well as Related
60
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Company still need to raise supporting funds Transactions disclosed on
for the non-public offering of shares from no http://www.cninfo.com.cn/
more than 10 specific investors within the
valid term of the documents approved by the March 4, 2017 Announcement of Shenzhen SEG Co., Ltd.
China Securities Regulatory Commission. about Implementation Situations of Issuing
Shares, Acquiring Assets by Cash and Raising
Supporting Funds as well as Related
Transactions and Newly-Added Shares Listing
disclosed on http://www.cninfo.com.cn/
2. Event that the controlling shareholder SEG May 15, 2017 Announcement of Shenzhen SEG Co., Ltd.
Group extends the lockup period of shares: about the Controlling Shareholder SEG Group
For 20 consecutive trading days from April Extending the Lockup Period of Shares
18, 2017 to May 16, 2017, the Company's disclosed on http://www.cninfo.com.cn/
share price is lower than RMB 9.94/share, i.e.
the price of issuing shares to acquire assets
this time. Thus, the lockup period 450,857,239
shares issued by the Company to the
Company's controlling shareholder SEG
Group in this restructuring will be
automatically extended for another six months
after 36 months from the listing date of the
aforesaid shares.
3. Investing in Shenzhen SEG Zhongtong April 7, 2017 Announcement of Shenzhen SEG Co., Ltd.
Technology Co., Ltd. and participating in the about Investing in Shenzhen SEG Zhongtong
Station Train Wi-Fi Project of China Railway Technology Co., Ltd. and Participating in the
Current progress of SEG Zhongtong Project: Station Train Wi-Fi Project of China Railway
(1) SEG Zhongtong has obtained the Radio disclosed on http://www.cninfo.com.cn/
Transmission Equipment Model Approval
Certificate issued by the Ministry of Industry
and Information Technology of the People's
Republic of China in July 2017; (2) The
operation team of SEG Zhongtong has been
established; at present the Company's
operating status is normal.
4. The Company implementing the annual July 6, 2017 Announcement of Shenzhen SEG Co., Ltd.
equity distribution in 2016 about I Profit Distribution and Capital
The Company passed the Proposal on Profit Reserves Converting into Capital Stock in
Distribution and Capital Reserves Converting 2016 disclosed on http://www.cninfo.com.cn/
into Capital Stock in 2016 through
August 11, 2017 Implementation Announcement of Shenzhen
deliberation of the Fourth Extraordinary
SEG Co., Ltd. about the Annual Equity
General Meeting of Shareholders in 2017. In
Distribution in 2016 disclosed on
accordance with the aforesaid proposal and the
http://www.cninfo.com.cn/
Implementation Announcement of Shenzhen
SEG Co., Ltd. about the Annual Equity
Distribution in 2016 issued on August 11,
2017, the annual equity distribution scheme of
the Company in 2016 are as follows: based on
the total existing general capital of
1,235,656,249 shares, the Company distributes
RMB 0.3 by cash (taxes included) for every 10
shares to all shareholders; the registration date
of A shares is August 16, 2017, and the
61
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
ex-dividend date is August 17, 2017; the last
trading date of B shares is August 16, 2017,
the registration date is August 21, 2017, and
the ex-dividend date is August 17, 2017. As of
the date of this report, the Company's equity
distribution has been finished.
5. Event relating to change of directors and July 6, 2017 Announcement of Shenzhen SEG Co., Ltd.
supervisors about Resignation of the Company's Director
Cao Xiang, Director of the Company, and Xu and Supervisor disclosed on
Ning, Supervisor of the Company, submitted a http://www.cninfo.com.cn/
written resignation report to the Board of
Directors and the Board of Supervisors on July July 21, 2017 Announcement of Shenzhen SEG Co., Ltd.
4, 2017 respectively. The Company conducted about the Resolution of the Fourth
a by-election of directors and supervisors Extraordinary General Meeting of
according to the relevant laws and regulations Shareholders in 2017 disclosed on
and the provisions and procedures stipulated http://www.cninfo.com.cn/
in the Articles of Association. At the Fourth
Extraordinary General Meeting of
Shareholders in 2017, Xu Laping is appointed
as Director of the Seventh Session of the
Board of Directors, and Liu Rongzhi as
Supervisor of the Seventh Session of the
Board of Supervisors.
6. Event about establishment of Shenzhen August 11, 2017 Announcement of Shenzhen SEG Co., Ltd.
SEG One-City Technology Co., Ltd. and about Establishment of Shenzhen SEG
construction and operation of SEG Maker One-City Technology Co., Ltd. and
Education Technology Experience Museum Construction and Operation of SEG Maker
The Company intends to invest RMB 10 Education Technology Experience Museum
million jointly with Shenzhen Yingmengxin disclosed on http://www.cninfo.com.cn/
Technology Co., Ltd. to set up Shenzhen SEG
One-City Technology Co., Ltd. (its name shall
be subject to industrial and commercial
registration information) for the construction
and operation of SEG Maker Education
Technology Experience Museum, among
which the Company subscribed RMB 5.1
million, accounting for 51% of the shares;
Yingmengxin contributed RMB 4.9 million,
accounting for 49%.
SEG One-City is mainly used for the
construction and operation of SEG Maker
Education Technology Experience Museum,
to meet double positioning requirements of
scientific and technological innovation
education industry and cultural and creative
industry, build China's first block-style science
and technology theme park and Chinese youth
STEAM popular education standard base, and
become the first and world-class juvenile
maker education platform integrated with
scientific and technological innovation, maker
education, experience and fun, culture and
62
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
creativity.
7.In the first quarter of 2017, the Company
carried out the major assets restructuring to
issue shares and acquire the underlying assets.
The assets transfer formalities of four
underlying companies on January 20, 2017,
i.e. SEG Real Estate, SEG Kangle, SegMaker,
SEG Property Development. Since February
2017, the above four underlying companies
will be included in the consolidated statement,
and the Company will track and adjust the
Company's annual financial statements upon
submitting the first-quarter statement. Since
the 2016 annual financial statements of the
four companies has not yet been audited upon
submitting the first-quarter statement, and as
of the end of the reporting period, the financial
statements of the four companies have been
audited by Shenzhen Branch of Zhongtianyun
Certified Public Accountants Co., Ltd., the
audit adjustment differences cause the
difference between the opening balance sheet
adjusted retrospectively by the report and the
he opening balance sheet adjusted
retrospectively in the first-quarter statement.
XVI. Major events of subsidiaries
√ Applicable □ Not applicable
1. SEG Real Estate and Shenzhen Branch of March 1, 2017 Announcement on the Holding Subsidiary
China Huarong Asset Management Co., Ltd. Shenzhen SEG Real Estate Investment Co.,
signed the Strategic Cooperation Agreement Ltd. Signing the Strategic Cooperation
Following the principles of resource sharing, Agreement with Shenzhen Branch of China
complementary advantages, and cooperative Huarong Asset Management Co., Ltd.
development, both parties plan to use their disclosed on http://www.cninfo.com.cn/
own platforms and resource advantages, to
jointly carry out cooperation in further
financial or broader areas, strengthen
exchanges and cooperation and create
opportunities for development
2. Event about SEG Lianzhong obtaining the February 11, 2017 Announcement of Shenzhen SEG Lianzhong
Business License Internet Technology Co., Ltd. Obtaining the
Business License disclosed on
http://www.cninfo.com.cn/
3. SEG Longyan Technology won the use March 14, 2017 Announcement on the Holding Subsidiary
rights of the state-owned construction land by Shenzhen SEG Longyan Energy Technology
RMB 28.01 million, which is located in Ebu Co., Ltd. Bidding Land disclosed on
Town, Shenzhen-Shantou Special Cooperation http://www.cninfo.com.cn/ by the Company
Zone, and whose land No. is "E2016-0026",
to use for cadmium telluride thin film April 6, 2017 Announcement on the Holding Subsidiary
photovoltaic industry base project. Winning the Land Use Rights disclosed on
63
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
http://www.cninfo.com.cn/ by the Company
4. The Company's holding grandson company May 26, 2017 Announcement on Shenzhen SEG Property
SEG Property increases investment to Management Co., Ltd. Increasing Investment
introduce strategic investors and supporting to Introduce Strategic Investors And
implementation management and core Supporting Implementation Management and
backbone for holding, so as to optimize the Core Backbone for Holding disclosed on
capital allocation, improve operational http://www.cninfo.com.cn/ by the Company
efficiency, and achieve benefit growth and
sustainable development.
5. The Company's holding grandson company May 26, 2017 Announcement on Shenzhen SEG New City
SEG New City provides a phased guarantee Construction and Development Co., Ltd.
with a loan limit of RMB 260 million for the Providing a Phased Guarantee for The
mortgage customers who purchase their Mortgage Customers Who Purchase Their
development projects Development Projects disclosed on
http://www.cninfo.com.cn/ by the Company
June 13, 2017 Announcement on the Resolution of the
Second Extraordinary General Meeting of
Shareholders in 2017 disclosed on
http://www.cninfo.com.cn/ by the Company
64
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Chapter 6 Changes in Share Capital and Information on Shareholders
I. Changes in share capital
1. Changes in share capital
Unit: Share
Before the change Increase/decrease by (+, -) After the change
Share
converted
Issue of Bonus
Quantity Percentage from Other Subtotal Quantity Percentage
new shares share
provident
Fund
I. Restricted shares 77,439 0.01% 450,857,239 0 0 -11,000 450,846,239 450,923,678 36.49%
1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00%
2. Shares held by
0 0.00% 450,857,239 0 0 0 450,857,239 450,857,239 36.49%
state-owned legal persons
3. Other domestic shares 77,439 0.01% 0 0 0 -11,000 -11,000 66,439 0.01%
Including: Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
domestic legal persons
Shares held by domestic
77,439 0.01% 0 0 0 -11,000 -11,000 66,439 0.01%
natural persons
4. Shares held by foreign
0 0.00% 0 0 0 0 0 0 0.00%
units
Including: Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
foreign legal persons
Shares held by foreign
0 0.00% 0 0 0 0 0 0 0.00%
natural persons
II. Unrestricted shares 784,721,571 99.99% 0 0 0 11,000 11,000 784,732,571 63.51%
1. RMB common shares 538,260,253 68.59% 0 0 0 11,000 11,000 538,271,253 43.56%
2. Domestically listed
246,461,318 31.40% 0 0 0 0 0 246,461,318 19.95%
foreign shares
3. Overseas listed foreign
0 0.00% 0 0 0 0 0 0 0.00%
shares
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total shares 784,799,010 100.00% 450,857,239 0 0 0 450,857,239 1,235,656,249 100.00%
Reason for changes
√ Applicable □ Not applicable
(1) On January 17, 2017, the Company received the Approval on Shenzhen SEG Co., Ltd.'s Issuing Shares to Shenzhen
SEG Group Co., Ltd. to Acquire Assets and Raise Supporting Funds (Z. J. X. K. [2017] No. 21) issued by the CSRC.
65
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Shenzhen SEG was approved to issue 450,857,239 shares to Shenzhen SEG Group for asset purchase. The said shares
were issued on March 6, 2017, and the total share capital of the Company is increased to 1,235,656,249 shares.
(2) The Company completed the general election of the Board of Directors and the Board of Supervisors in July 2016.
The number of restricted shares held by directors, supervisors, and senior executives are changed.
Approval of changes in share capital
□ Applicable √ Not applicable
Share transfer
□ Applicable √ Not applicable
Impact of changes in share capital on such financial indicators as basic EPS, diluted EPS, and net asset per share
attributable to common shareholders of the Company in last year and previous report period
√ Applicable □ Not applicable
None
Other contents as deemed necessary by the Company or required by the securities regulatory authority to be disclosed
□ Applicable √ Not applicable
2. Changes in restricted shares
√ Applicable □ Not applicable
Unit: Share
Restricted shares in Restricted shares Restricted shares at
Increase in Reason for
Shareholder name the beginning of released in the the end of the Date of release
restricted shares restriction
the period reporting period period
Shenzhen SEG Seasoned equity
0 0 450,857,239 450,857,239 2020.9.5
Group Co., Ltd. offering
Restricted shares
Xu Ning 15,000 0 0 15,000 held by senior 2019.7.15
executives
Restricted shares
Liu Zhijun 7,500 0 0 7,500 held by senior 2019.7.15
executives
Restricted shares
Zheng Dan 31,939 0 0 31,939 held by senior 2019.7.15
executives
Restricted shares
Zhu Longqing 12,000 0 0 12,000 held by senior 2019.7.15
executives
Removal of
supervisors due to
Ying Huadong 10,000 10,000 0 0 2017.1.16
changing the term
of office
Removal of
supervisors due to
Tian Jiliang 1,000 1,000 0 0 2017.1.16
changing the term
of office
Total 77,439 11,000 450,857,239 450,923,678 -- --
66
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
II. Issuance and listing of securities
√ Applicable □ Not applicable
Shares
Stock and Offering Termination
Date of Number of approved for Disclosure
derivative price (or Listing date date of Disclosure index
issuance shares listed date
securities rate) transaction
transaction
Stock
Notice of Implementing the
Resolution of Issuing
Stocks and Paying Cash to
Acquire Assets and Raise
Supporting Fund and
March 6, March 6, March 6, 20 March 4,
000058 9.94 450,857,239 450,857,239 Affiliate Transaction and
2017 2017 17 2017
Listing of Newly Added
Shares of Shenzhen SEG
Co., Ltd. posted on the
CNINF website
(http://www.cninfo.com.cn)
Note to issuance of securities in the reporting period
Not applicable
III. Information on the number of shareholders and their shareholding status
Unit: Share
Total number of ordinary Total number of preferred
shareholders at the end of the 75,823 shareholders restored with the voting 0
reporting period rights (if any) (see note 8)
Information on the shareholders holding more than 5% shares or top 10 ordinary shareholders
Number of Information on pledged or
ordinary Share Quantity of Quantity of frozen shares
Name of Nature of Shareholding shares held increase/decrease restricted unrestricted
shareholder shareholder ratio at the end of in the reporting ordinary ordinary
the reporting period shares held shares held Share status Quantity
period
Shenzhen SEG State-owned legal
55.70% 688,216,905 +450,857,239 450,857,239 237,359,666
Group Co., Ltd. person
Domestic natural
Liu Guocheng 0.55% 6,829,502 +25,000 0 6,829,502
person
Domestic natural
Zhang Jiao 0.33% 4,046,989 0 0 4,046,989
person
Domestic natural
Liu Guohong 0.27% 3,174,958 -125,600 3,174,958
person
Overseas natural
Gong Qianhua 0.24% 2,940,000 0 0 2,940,000
person
Shanghai Domestic 0.20% 2,476,621 +1,838,200 0 2,476,621
Juzhang non-state-owned
67
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Investment legal person
Management
Co., Ltd.
Domestic natural
Zeng Ying 0.19% 2,300,000 0 0 2,300,000
person
China Securities
Domestic
Finance
non-state-owned 0.18% 2,271,900 0 0 2,271,900
Corporation
legal person
Limited
China Hi-tech
State-owned legal
Group 0.12% 1,500,000 0 0 1,500,000
person
Corporation
Domestic natural
Zhao Dan 0.10% 1,259,263 +321,163 0 1,259,263
person
Strategic investors or general legal
entities who became one of the top 10
ordinary shareholders by N/A
participating in rights issue (If any)
(see note 3)
Explanations on the association Shenzhen SEG Group Co., Ltd. has no associated relationship with other shareholders, nor it is a
relationship or concerted action concerted action unit as specified in the Management Methods for Disclosure of Information on
among the above-mentioned Changes in Shareholding Status of Shareholders of Listed Companies. It is unknown whether other
shareholders shareholders have an associated relationship or are concerted action units or not.
Information on top 10 ordinary shareholders of non-restricted shares
Type of share
Name of shareholder Ordinary shares held at the period end
Type of share Quantity
Shenzhen SEG Group Co., Ltd. 237,359,666 RMB ordinary shares 237,359,666
Liu Guocheng 6,829,502 Domestically listed foreign shares 6,829,502
#Zhang Jiao 4,046,989 RMB ordinary shares 4,046,989
Liu Guohong 3,174,958 Domestically listed foreign shares 3,174,958
Gong Qianhua 2,940,000 Domestically listed foreign shares 2,940,000
Shanghai Juzhang Investment
2,476,621 RMB ordinary shares 2,476,621
Management Co., Ltd.
Zeng Ying 2,300,000 Domestically listed foreign shares 2,300,000
China Securities Finance Corporation
2,271,900 RMB ordinary shares 2,271,900
Limited
China Hi-tech Group Corporation 1,500,000 RMB ordinary shares 1,500,000
Zhao Dan 1,259,263 RMB ordinary shares 1,259,263
Explanations on the association Shenzhen SEG Group Co., Ltd has no associated relationship with other shareholders, nor it is a
relationship or concerted action concerted action unit as specified in the Management Methods for Disclosure of Information on
among top 10 shareholders of Changes in Shareholding Status of Shareholders of Listed Companies. It is unknown whether other
unrestricted ordinary shares, and shareholders have an associated relationship or are concerted action units or not.
68
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
between top 10 shareholders of
unrestricted ordinary shares and top
10 ordinary shareholders
Information of top 10 ordinary
Among top 10 shareholders, Zhang Jiao holds 0 share of the Company in the ordinary account and
shareholders participating in
4,046,989 shares of the Company in the margin trading investor credit account. Zhang Jiao holds
financing business (if any) (see note
4,046,989 shares of the Company in total.
4)
Have top 10 ordinary shareholders of the Company or top 10 ordinary shareholders of non-restricted shares conducted
agreed repurchase transactions in the reporting period?
□ Yes √ No
Top 10 ordinary shareholders of the Company or top 10 ordinary shareholders of non-restricted shares did not conduct
agreed repurchase transactions in the reporting period.
IV. Changes in controlling shareholders and actual controllers
Changes in the controlling shareholders in the reporting period
□ Applicable √ Not applicable
In the reporting period, the controlling shareholders of the Company are not changed.
Changes in the actual controllers in the reporting period
□ Applicable √ Not applicable
In the reporting period, the actual controllers of the Company are not changed.
69
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Chapter 7 Preferred Shares
□ Applicable √ Not applicable
No preferred shares exist in the reporting period.
70
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Chapter 8 Directors, Supervisors and Senior Executives
I. Changes in shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
No changes in shares held by directors, supervisors, and senior executives are involved in the reporting period. For
details, refer to 2016 Annual Report.
II. Changes in directors, supervisors and senior executives
□ Applicable √ Not applicable
No changes in directors, supervisors, and senior executives are involved in the reporting period. For details, refer to 2016
Annual Report.
71
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Chapter 9 Corporate Bonds
Has the Company issued and listed on the stock exchange corporate bonds that are not due or due but cannot be repaid in
full on the approved release data of the annual report?
No
72
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Chapter 10 Financial Report
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, 2017
Unit: Yuan
Item Closing balance Opening balance
Current assets:
Monetary funds 1,222,990,879.83 1,131,523,641.19
Deposit reservation for balance
Loans to other banks 40,000,000.00
Financial assets measured by fair value with
changes included in current profit or loss
Derivative financial assets
Notes receivable 100,792.00
Accounts receivable 80,193,593.82 58,949,389.88
Advances 44,051,607.10 56,142,960.81
Premiums receivable
Reinsurance accounts receivable
Reinsurance deposit receivable
Interest receivable 287,698.63
Dividends receivable 2,520,000.00
Other receivables 124,256,801.40 117,036,077.02
Redemptory monetary capital for resale
Inventory 3,673,901,099.84 3,378,533,067.95
Held-for-sale assets
Non-current assets due within one year
Other current assets 520,221,326.80 460,229,847.59
Total current assets 5,665,615,308.79 5,245,323,475.07
73
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Non-current assets:
Loans and advances issued 468,639,702.32 480,405,158.45
Financial assets available for sale 34,264,472.42 34,478,683.41
Held-to-maturity investment
Long-term receivables
Long-term equity investment 196,671,333.80 203,657,322.71
Investment properties 695,584,278.68 708,470,470.81
Fixed assets 51,807,396.55 52,029,921.10
Construction in progress 44,898,411.15 34,314,472.15
Engineering materials
Disposal of fixed assets
Productive biological assets
Oil & gas assets
Intangible assets 31,226,975.81 2,681,527.40
Development expenses
Goodwill 10,328,927.82 10,328,927.82
Long-term expenses to be amortized 107,219,693.41 111,787,439.52
Deferred income tax assets 28,018,999.65 28,511,034.74
Other non-current assets 88,987,300.00 13,804,660.46
Total non-current assets 1,757,647,491.61 1,680,469,618.57
Total assets 7,423,262,800.40 6,925,793,093.64
Current liabilities:
Short-term borrowing 545,000,000.00 355,000,000.00
Loans from central bank
Deposits from customers and interbank
Loans from other banks
Financial liabilities measured by fair value with
changes included in current profit or loss
Derivative financial liabilities
Notes payable
Accounts payable 118,802,646.01 31,010,953.20
Advances from customers 1,267,716,176.21 923,965,168.05
Financial assets sold for repurchase
74
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Service charges and commissions payable
Payroll payable 16,508,848.93 35,464,329.86
Taxes payable 158,551,248.58 254,715,544.38
Interest payable 2,595,650.28 3,357,745.13
Dividends payable 6,592,710.58 17,652,970.78
Other payables 1,331,127,533.52 800,746,883.93
Reinsurance accounts payable
Insurance deposit
Customer brokerage deposits
Securities underwriting brokerage deposits
Held-for-sale liabilities
Non-current liabilities due within one year 718,561,661.33 491,561,661.33
Other current liabilities 733,019.98
Total current liabilities 4,166,189,495.42 2,913,475,256.66
Non-current liabilities:
Long-term borrowing 772,250,000.00 1,030,000,000.00
Bonds payable
Preferred stock
Perpetual capital securities
Long-term payables
Payroll payable
Special payables
Estimated liabilities 232,500.00 232,500.00
Deferred income 11,936,612.19 14,667,442.84
Deferred income tax liabilities 93,277,129.52 93,885,145.21
Other non-current liabilities
Total non-current liabilities 877,696,241.71 1,138,785,088.05
Total liabilities 5,043,885,737.13 4,052,260,344.71
Owners' equity:
Share capital 1,235,656,249.00 784,799,010.00
Other equity instruments
Preferred stock
75
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Perpetual capital securities
Capital reserve 175,086,543.13 1,293,931,135.89
Less: Treasury shares
Other comprehensive income 189,207.20 296,235.62
Special reserve
Surplus reserve 121,803,040.24 121,803,040.24
General risk provision
Undistributed profits 261,480,433.71 211,471,648.29
Total owners' equity attributable to the parent
1,794,215,473.28 2,412,301,070.04
company
Minority shareholders' equity 585,161,589.99 461,231,678.89
Total owners' equity 2,379,377,063.27 2,873,532,748.93
Total liabilities and owners' equity 7,423,262,800.40 6,925,793,093.64
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 158,398,405.32 90,504,836.76
Financial assets measured by fair value with
changes included in current profit or loss
Derivative financial assets
Notes receivable
Accounts receivable 1,084,566.74 426,069.15
Advances
Interest receivable
Dividends receivable 20,540,880.00
Other receivables 812,767,906.77 724,658,970.18
Inventory 519,750.84 442,920.87
Held-for-sale assets
Non-current assets due within one year
Other current assets 378,881,432.18 438,146,382.10
Total current assets 1,372,192,941.85 1,254,179,179.06
76
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
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 1,416,970,028.30 453,584,470.91
Investment properties 268,621,193.88 273,880,749.30
Fixed assets 18,496,830.56 19,149,224.71
Construction in progress
Engineering materials
Disposal of fixed assets
Productive biological assets
Oil & gas assets
Intangible assets 331,810.02 425,708.10
Development expenses
Goodwill
Long-term expenses to be amortized 6,415,805.02 7,743,293.52
Deferred income tax assets 8,426,955.49 8,664,455.49
Other non-current assets
Total non-current assets 1,752,778,016.10 796,963,294.86
Total assets 3,124,970,957.95 2,051,142,473.92
Current liabilities:
Short-term borrowing 545,000,000.00 355,000,000.00
Financial liabilities measured by fair value with
changes included in current profit or loss
Derivative financial liabilities
Notes payable
Accounts payable 676.00 155,213.00
Advances from customers 17,121,910.98 25,448,125.00
Payroll payable 2,071,396.86 7,817,501.76
Taxes payable 6,781,260.33 23,485,483.97
Interest payable 475,177.74
Dividends payable 119,803.29 119,803.29
Other payables 742,218,993.15 75,858,657.13
77
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 1,313,314,040.61 488,359,961.89
Non-current liabilities:
Long-term borrowing
Bonds payable
Preferred stock
Perpetual capital securities
Long-term payables
Payroll payable
Special payables
Estimated liabilities
Deferred income 10,233,333.36 11,183,333.34
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 10,233,333.36 11,183,333.34
Total liabilities 1,323,547,373.97 499,543,295.23
Owners' equity:
Share capital 1,235,656,249.00 784,799,010.00
Other equity instruments
Preferred stock
Perpetual capital securities
Capital reserve 249,249,670.24 498,654,523.66
Less: Treasury shares
Other comprehensive income 116.05 178.21
Special reserve
Surplus reserve 121,803,040.24 121,803,040.24
Undistributed profits 194,714,508.45 146,342,426.58
Total owners' equity 1,801,423,583.98 1,551,599,178.69
Total liabilities and owners' equity 3,124,970,957.95 2,051,142,473.92
78
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
3. Consolidated Profit Statement
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
I. Total operating revenue 625,085,852.24 773,791,120.91
Including: Operating revenue 592,346,626.22 724,213,525.00
Interest income 32,107,247.09 47,373,095.91
Earned premiums
Service charges and commissions income
II. Total operating cost 528,687,711.32 632,738,203.90
Including: Operating cost 426,661,521.04 527,378,769.17
Interest expenses 457,500.00 465,888.89
Commissions
Surrender value
Net compensation pay-outs
Net insurance deposit accrued
Insurance dividends
Reinsurance expenses
Tax and surcharges 10,579,222.45 39,850,665.86
Sale expenses 18,930,296.04 15,452,527.47
Management expenses 62,603,332.15 48,360,132.61
Financial cost 9,997,883.43 5,084,244.72
Loss from asset impairment -542,043.79 -3,854,024.82
Add: Income from change of fair value (enter
"-" for loss)
Income from investment (enter "-" for loss) 408,928.49 4,177,657.94
Including: Income from investment in joint
-5,401,219.04 -4,826,750.85
ventures or associates
Income from exchange (enter "-" for loss)
Other income
III. Operating profit (enter "-" for loss) 96,807,069.41 145,230,574.95
Add: Non-operating revenue 7,226,958.33 61,732,465.54
Including: Profit on disposal of non-current
assets
Less: Non-operating expenses 549,897.70 3,208,366.60
Including: Loss from disposal of non-current
79
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
assets
IV. Total profit (enter "-" for total loss) 103,484,130.04 203,754,673.89
Less: Income tax 38,782,427.00 58,174,040.67
V. Net profit (enter "-" for net loss) 64,701,703.04 145,580,633.22
Net profit attributable to owners of the parent
50,008,785.42 104,913,059.48
company
Profit and loss of minority shareholders 14,692,917.62 40,667,573.74
VI. Net of tax of other comprehensive incomes -160,720.40 -45,789.16
Total owners' net of tax of other comprehensive
-107,028.42 -30,426.86
income attributable to the parent company
1. Other comprehensive income not to be
reclassified into profit or loss
(1) Changes in 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 profit or loss under the equity method
2. Other comprehensive income to be
-107,028.42 -30,426.86
reclassified into profit or loss
(1) Shares of the investee of other
comprehensive income to be reclassified into -62.16 178.21
profit or loss under the equity method
(2) Profit or loss from changes in fair value of
-106,966.26 -30,605.07
the available-for-sale financial assets
(3) Held-to-maturity investments categorized as
profit or loss from the available-for-sale
financial assets
(4) Effective profit or loss from cash flows
(5). Foreign currency translation differences
(6) Others
Net of tax of other comprehensive income
-53,691.98 -15,362.30
attributable to minority shareholders
VII. Total comprehensive income 64,540,982.64 145,534,844.06
Total comprehensive income attributable to
49,901,757.00 104,882,632.62
shareholders of the parent company
Total comprehensive income attributable to
14,639,225.64 40,652,211.44
minority shareholders
VIII. Earnings per share
80
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
1. Basic earnings per share 0.0405 0.0849
2. Diluted earnings per share 0.0405 0.0849
During the merger of the enterprises under the control of a same entity in the reporting period, the net profit of the acquiree realized before
the merger was: RMB 10,632,970.72 Yuan, and net profit of the purchased party realized before the merger in the previous period was: RMB
105,432,693.61 Yuan.
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 48,543,360.95 51,626,681.87
Less: Operating cost 35,675,486.34 36,890,488.44
Tax and surcharges 2,563,542.06 2,004,366.35
Sale expenses
Management expenses 9,022,593.04 6,516,831.79
Financial cost 8,177,592.69 -13,065,151.38
Loss from asset impairment
Add: Income from change of fair value (enter
"-" for loss)
Income from investment (enter "-" for loss) 54,919,567.30 45,762,330.76
Including: Income from investment in joint
-387,059.05 -4,826,750.85
ventures and associates
Other income
II. Operating profit (enter "-" for loss) 48,023,714.12 65,042,477.43
Add: Non-operating revenue 3,083,865.48 7,300.00
Including: Profit on disposal of non-current
assets
Less: Non-operating expenses 91,300.00 2,707,915.25
Including: Loss from disposal of non-current
7,915.25
assets
III. Total profit (enter "-" for total loss) 51,016,279.60 62,341,862.18
Less: Income tax 2,644,197.73 8,674,203.92
V. Net profit (enter "-" for net loss) 48,372,081.87 53,667,658.26
V. Net of tax of other comprehensive incomes -62.16 48.10
1. Other comprehensive income not to be
reclassified into profit or loss
81
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
(1) Changes in 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 profit or loss under the equity method
2. Other comprehensive income to be
-62.16 48.10
reclassified into profit or loss
(1) Shares of the investee of other
comprehensive income to be reclassified into -62.16 48.10
profit or loss under the equity method
(2) Profit or loss from changes in fair value of
the available-for-sale financial assets
(3) Held-to-maturity investments categorized as
profit or loss from the available-for-sale
financial assets
(4) Effective profit or loss from cash flows
(5) Foreign currency translation differences
(6) Others
VI. Total comprehensive income 48,372,019.71 53,667,706.36
VII. Earnings per share
1. Basic earnings per share
2. Diluted earnings per share
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
934,899,233.33 1,055,545,044.57
rendering of services
Net increase in deposits from customers and
interbank
Net increase in loans from central bank
Net increase in borrowing from other financial
institutions
Cash received from premiums of primary
insurance contracts
Net cash received from reinsurance business
Net increase in deposits from policyholders and
investment
82
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
Net increase in financial assets measured by
fair value with changes included in current
profit or loss
Cash received from interest, service charges,
36,706,475.79 49,594,029.07
and commissions
Net increase in loans from other banks
Net increase in redemption capital
Tax refunds 76,897,672.19
Other cash received related to operating
339,004,218.94 477,200,769.85
activities
Subtotal of cash inflow from operating
1,310,609,928.06 1,659,237,515.68
activities
Cash paid for goods and service 485,935,477.58 781,952,605.46
Net increase in loans to customers and
-11,916,029.19 34,265,000.00
advances
Net increase in deposits with central bank and
interbank
Cash paid for compensation pay-outs of
primary insurance contracts
Cash paid for interest, service charges, and
78,700.45 24,273.94
commissions
Cash paid as insurance dividends
Cash paid to and on behalf of employees 137,167,412.69 127,078,297.43
Taxes paid 196,042,163.93 145,962,776.86
Other cash paid related to operating activities 410,176,923.86 499,568,303.20
Subtotal of cash outflow in operating activities 1,217,484,649.32 1,588,851,256.89
Net cash flow from operating activities 93,125,278.74 70,386,258.79
II. Cash flows from investment activities:
Cash received from withdrawal of investment 1,139,300,000.00 703,900,000.00
Cash received from investment income 19,323,567.76 9,394,499.36
Net cash received from disposal of fixed assets,
1,320.00 10,200.00
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries
and other business units
Other cash received related to investment
49,130,164.38
activities
Subtotal of cash inflow from investment
1,158,624,887.76 762,434,863.74
activities
83
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
Cash paid for purchase and construction of
fixed assets, intangible assets and other 109,865,170.79 9,211,135.13
long-term assets
Cash paid for investment 1,160,980,001.00 682,504,260.00
Net increase in mortgage loans
Net cash paid for acquisition of subsidiaries and
other business units
Other cash paid related to investment activities 49,000,000.00
Subtotal of cash outflow in investment
1,270,845,171.79 740,715,395.13
activities
Net cash flow from investment activities -112,220,284.03 21,719,468.61
III. Cash flow from financing activities:
Cash received by absorbing investment 147,227,998.48
Including: Cash received by subsidiaries from
147,227,998.48
investment of minority shareholders
Borrowings received 550,000,000.00 1,250,220,000.00
Cash received from bond issue
Other cash received related to financing
7,812.30
activities
Subtotal of cash inflow from financing
697,227,998.48 1,250,227,812.30
activities
Cash repayments of amounts borrowed 414,370,963.93 764,540,978.48
Cash paid for dividend and profit distribution or
71,984,588.46 107,602,672.99
interest payment
Including: Dividends and profit paid by
30,521,822.45 14,637,675.51
subsidiaries to minority shareholders
Other cash paid related to financing activities 100,310,202.16 133,633,025.85
Subtotal of cash outflow in financing activities 586,665,754.55 1,005,776,677.32
Net cash flow arising from financing activities 110,562,243.93 244,451,134.98
IV. Influence of exchange rate fluctuation on
17.80
cash and cash equivalents
V. Net increase in cash and cash equivalents 91,467,238.64 336,556,880.18
Add: Opening balance of cash and cash
1,127,923,641.19 631,463,030.13
equivalents
VI. Closing balance of cash and cash
1,219,390,879.83 968,019,910.31
equivalents
84
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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
46,565,008.85 45,134,847.16
rendering of services
Tax refunds
Other cash received related to operating
12,568,990.48 55,639,989.51
activities
Subtotal of cash inflow from operating
59,133,999.33 100,774,836.67
activities
Cash paid for goods and service 38,952,915.52 32,266,487.97
Cash paid to and on behalf of employees 21,305,591.50 23,691,555.31
Taxes paid 22,448,823.21 15,076,625.42
Other cash paid related to operating activities 97,628,271.06 113,721,306.86
Subtotal of cash outflow in operating activities 180,335,601.29 184,755,975.56
Net cash flow from operating activities -121,201,601.96 -83,981,138.89
II. Cash flows from investment activities:
Cash received from withdrawal of investment 501,000,000.00 543,000,000.00
Cash received from investment income 39,801,697.67 26,512,734.94
Net cash received from disposal of fixed assets,
10,000.00
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries
and other business units
Other cash received related to investment
activities
Subtotal of cash inflow from investment
540,801,697.67 569,522,734.94
activities
Cash paid for purchase and construction of
fixed assets, intangible assets and other
long-term assets
Cash paid for investment 532,730,000.00 555,000,000.00
Net cash paid for acquisition of subsidiaries and
other business units
Other cash paid related to investment activities
Subtotal of cash outflow in investment
532,730,000.00 555,000,000.00
activities
Net cash flow from investment activities 8,071,697.67 14,522,734.94
85
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
III. Cash flow from financing activities:
Cash received by absorbing investment
Borrowings received 400,000,000.00 190,000,000.00
Cash received from bond issue
Other cash received related to financing
7,812.30
activities
Subtotal of cash inflow from financing
400,000,000.00 190,007,812.30
activities
Cash repayments of amounts borrowed 210,000,000.00 215,000,000.00
Cash paid for dividend and profit distribution or
8,976,527.15 32,182,063.94
interest payment
Other cash paid related to financing activities
Subtotal of cash outflow in financing activities 218,976,527.15 247,182,063.94
Net cash flow arising from financing activities 181,023,472.85 -57,174,251.64
IV. Influence of exchange rate fluctuation on
17.80
cash and cash equivalents
V. Net increase in cash and cash equivalents 67,893,568.56 -126,632,637.79
Add: Opening balance of cash and cash
90,504,836.76 186,369,470.58
equivalents
VI. Closing balance of cash and cash
158,398,405.32 59,736,832.79
equivalents
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 784,79 1,294,3 121,80
211,031,648 461,231,67 2,873,53
balance of the 9,010.0 71,135. 296,235.62 3,040.2
.29 8.89 2,748.93
previous year 0 89 4
Add: Change of
accounting
policies
Correction to
errors of the
86
Fulltext of Semi-Annual Report 2017 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
previous period
Merger of
enterprises
under common
control
Others
II. Opening 784,79 1,294,3 121,80
211,031,648 461,231,67 2,873,53
balance of the 9,010.0 71,135. 296,235.62 3,040.2
.29 8.89 2,748.93
current year 0 89 4
III. Increase
and decrease of 450,85 -1,119,
50,008,785. 124,369,91 -494,15
the current year 7,239.0 284,59 -107,028.42
42 1.10 5,685.66
(enter "-" for 0 2.76
decrease)
1. Total
50,008,785. 14,639,225 64,540,9
comprehensive -107,028.42
42 .64 82.64
income
2. Capital
450,85 -1,119,
invested or 140,829,10 -527,59
7,239.0 284,59
decreased by 7.91 8,245.85
0 2.76
owners
(1) Ordinary
450,85 -249,40
shares invested 147,227,99 348,680,
7,239.0 4,853.4
by the 8.48 384.06
0 2
shareholders
(2) Capitals
invested by
other equity
instrument
holders
(3) Amount of
share-based
payment
included in
owners' equity
-869,87
-6,398,890. -876,27
(4) Others 9,739.3
57 8,629.91
4
3. Profit -31,098,42 -31,098,
87
Fulltext of Semi-Annual Report 2017 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
distribution 2.45 422.45
(1) Accrual of
surplus public
reserve
(2) Accrual of
general risk
provision
(3) Amount
distributed to -31,098,42 -31,098,
owners (or 2.45 422.45
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
88
Fulltext of Semi-Annual Report 2017 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
current period
6. Others
IV. Closing 1,235,6 175,08 121,80
261,040,433 585,601,58 2,379,37
balance of the 56,249. 6,543.1 189,207.20 3,040.2
.71 9.99 7,063.27
current period 00 3 4
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 784,79 506,54 109,92
73,532,388. 205,218,51 1,680,34
balance of the 9,010.0 5,831.1 326,662.48 2,336.
70 1.74 4,740.90
previous year 0 1 87
Add: Change of
accounting
policies
Correction to
errors of the
previous period
Merger of
101,94
enterprises -73,013,405 224,336,64 253,272,
9,000.0
under common .88 3.55 237.67
0
control
Others
II. Opening 784,79 608,49 109,92
429,555,15 1,933,61
balance of the 9,010.0 4,831.1 326,662.48 2,336. 518,982.82
5.29 6,978.57
current year 0 1 87
III. Increase
and decrease of 685,87
11,880, 210,512,665 31,676,523 939,915,
the current year 6,304.7 -30,426.86
703.37 .47 .60 770.36
(enter "-" for 8
decrease)
1. Total
-30,426.86 246,062,783 63,201,072 309,233,
comprehensive
89
Fulltext of Semi-Annual Report 2017 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
income .31 .24 428.69
2. Capital
198,90
invested or -4,334,661. 194,571,
5,837.0
decreased by 84 175.17
1
owners
(1) Ordinary
198,60
shares invested -14,700,00 183,905,
5,476.8
by the 0.00 476.86
6
shareholders
(2) Capitals
invested by
other equity
instrument
holders
(3) Amount of
share-based
payment
included in
owners' equity
300,36 10,365,338 10,665,6
(4) Others
0.15 .16 98.31
3. Profit 11,880, -35,550,117. -27,189,88 -50,859,
distribution 703.37 84 6.80 301.27
(1) Accrual of
11,880, -11,880,703.
surplus public
703.37 37
reserve
(2) Accrual of
general risk
provision
(3) Amount
distributed to -23,669,414 -27,189,88 -50,859,
owners (or .47 6.80 301.27
shareholders)
(4) Others
4. Internal
496,09
carrying 496,097,
7,594.2
forward of 594.24
4
owners' equity
(1) Capital
90
Fulltext of Semi-Annual Report 2017 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
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
496,09
496,097,
(4) Others 7,594.2
594.24
4
5. Special
reserve
(1) Accrual of
the current year
(2) Amount
utilized in the
current period
-9,127, -9,127,1
6. Others
126.47 26.47
IV. Closing 784,79 1,294,3 121,80
211,031,648 461,231,67 2,873,53
balance of the 9,010.0 71,135. 296,235.62 3,040.
.29 8.89 2,748.93
current period 0 89 24
8. Statement on Changes in Owners' Equity of the Parent Company
Amount incurred in the current period
Unit: Yuan
Current period
Item
Share capital Other equity instruments Capital reserve Less: Other Special Surplus reserve Undistributed Total owners'
91
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Treasury comprehensive reserve profits equity
Perpetual
Preferred shares income
capital Others
Shares
securities
I. Closing balance
784,799,010.00 498,654,523.66 178.21 121,803,040.24 146,342,426.58 1,551,599,178.69
of the previous year
Add: Change of
accounting policies
Correction to errors
of the previous
period
Others
II. Opening balance
784,799,010.00 498,654,523.66 178.21 121,803,040.24 146,342,426.58 1,551,599,178.69
of the current year
III. Increase and
decrease of the
450,857,239.00 -249,404,853.42 -62.16 48,372,081.87 249,824,405.29
current year (enter
"-" for decrease)
1. Total
comprehensive -62.16 48,372,081.87 48,372,019.71
income
2. Capital invested
or decreased by 450,857,239.00 -249,404,853.42 201,452,385.58
owners
(1) Ordinary shares
invested by the 450,857,239.00 -249,404,853.42 201,452,385.58
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
92
Fulltext of Semi-Annual Report 2017 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
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
IV. Closing balance
of the current 1,235,656,249.00 249,249,670.24 116.05 121,803,040.24 194,714,508.45 1,801,423,583.98
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
784,799,010.00 507,773,837.83 109,922,336.87 63,085,510.75 1,465,580,695.45
the previous year
Add: Change of
accounting policies
Correction to errors
93
Fulltext of Semi-Annual Report 2017 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
of the previous
period
Others
II. Opening balance
784,799,010.00 507,773,837.83 109,922,336.87 63,085,510.75 1,465,580,695.45
of the current year
III. Increase and
decrease of the
-9,119,314.17 178.21 11,880,703.37 83,256,915.83 86,018,483.24
current year (enter
"-" for decrease)
1. Total
comprehensive 178.21 118,807,033.67 118,807,211.88
income
2. Capital invested or
7,812.30 7,812.30
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 7,812.30 7,812.30
3. Profit distribution 11,880,703.37 -35,550,117.84 -23,669,414.47
(1) Accrual of
surplus public 11,880,703.37 -11,880,703.37
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
94
Fulltext of Semi-Annual Report 2017 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
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 -9,127,126.47 -9,127,126.47
IV. Closing balance
784,799,010.00 498,654,523.66 178.21 121,803,040.24 146,342,426.58 1,551,599,178.69
of the current period
III. Company profile
(I) Registered place, organizational form and headquarters address
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. The Company holds the Enterprise
Corporation Business License with the unified social credit code 91440300279253776E and the registration number
440301103573251. Upon the approval of the securities administration departments of Shenzhen and the state, the
Company's B shares and A shares were listed 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.
On February 3, 2016, Shenzhen SEG Co., Ltd. and Shenzhen SEG Group Co., Ltd. entered into the Framework
Agreement of Share Issuance and Cash Payment to Acquire Assets. The Company intended to purchase the equity of
target companies held by SEG Group by non-public offering of shares and in cash (including 55% of equity of SEG
95
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Kangle, 100% of equity of SEG Property, 100% of equity of SEG SegMaker, and 79.02% of equity of SEG Real Estate)
by non-public offering of shares and in cash, and issue private placement to no more than 10 specific investors to raise
supporting funds of no more than RMB 2 billion. On January 17, 2017, the Company received the Approval on Shenzhen
SEG Co., Ltd.'s Issuing Shares to Shenzhen SEG Group Co., Ltd. to Acquire Assets and Raise Supporting Funds (Z. J. X.
K. [2017] No. 21) issued by the CSRC. On February 15, 2017, the Company received the Acceptance Confirmation of
the Application for Share Registration issued by Shenzhen Branch of China Securities Depository and Clearing
Company Limited. As confirmed, 450,857,239 A shares are issued for non-public offering, the new shares are restricted
outstanding shares listed on March 6, 2017.
As of June 30, 2017, the total capital share of the Company amounts to 1,235,656,249 shares, including 450,923,678
restricted shares and 784,732,571 unrestricted shares. The registered capital is 1,235,656,249 yuan. The registered place
is 31F, Tower A, Stars Plaza, North Huaqiang Road, Futian District, Shenzhen. The parent company is Shenzhen SEG
Group Co., Ltd., and its final controlling party is Shenzhen State-owned Assets Supervision and Administration
Commission.
(II) Business scope
General items: Investment in industrial projects (specific items to be declared separately); operation and management of
electronics markets; online trade; Internet technology development; advertising business; housing leasing; sales of
computers, software, auxiliary equipment, and electronic products; cultural and artistic exchange activity planning
(excluding performances); exhibition activities; investment in and management of children's industrial chain projects;
children's playground equipment leasing (excluding financial leasing activities); playground management and services
(limited to branch management); catering services (limited to branch management); business management consulting;
education consulting; wholesale and retail of pre-packaged food, unpacked food, and dairy products (including infant
formula milk powder) (limited to branch management); sales of stationery, craft gifts, toys, children's clothing, electronic
products, handicrafts, and daily necessities; photography services; technical development of new energy; EPC of
photovoltaic power generation and building integrated photovoltaic (BIPV) engineering; technical development and
services of CdTe film solar cell modules; investment in photovoltaic power plants, contracting of BIPV curtain wall
engineering; domestic trade (excluding franchised goods, proprietary goods, and goods under special control). (Any item
subject to approval pursuant to laws can be operated only after approval.)
Licensed items: information services (limited to Internet information services); sales of food; manufacturing and sales of
CdTe solar cell modules.
(III) Business property and business operations
The Company engages in business service industry, involving products and service mainly in operation and management
of special electronics markets, lease business and other tertiary industries.
(IV) Approval for disclosure of the financial statements
The Financial Statements are approved for disclosure by all directors of the Company on August 28, 2017.
37 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 subsidiary II 66.58 66.58
Co., Ltd
96
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Wholly-owned I 100.00 100.00
Shenzhen SEG Industrial Investment Co., Ltd.
subsidiary
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 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 62.00 62.00
Shenzhen SEG Nanjing Electronics Market Management Wholly-owned I 100.00 100.00
Co., Ltd. subsidiary
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
Wholly-owned I 100.00 100.00
Shunde SEG Electronics Market Management Co., Ltd.
subsidiary
Wholly-owned I 100.00 100.00
Nanning SEG Electronics Market Management Co., Ltd.
subsidiary
Wholly-owned I 100.00 100.00
Nantong SEG Times Plaza Development Co., Ltd.
subsidiary
Yantai SEG Times Plaza Development Co., Ltd. Holding subsidiary I 90.00 90.00
Nantong SEG Commercial Operation Management Co., Wholly-owned I 100.00 100.00
Ltd. subsidiary
Wholly-owned I 100.00 100.00
Suzhou SEG Digital Plaza Management Co., Ltd.
subsidiary
Xi'an Fengdong New Town SEG Times Plaza Properties Wholly-owned I 100.00 100.00
Co., Ltd. subsidiary
Wholly-owned I 100.00 100.00
Suzhou SEG Intelligent Technology Co., Ltd.
subsidiary
Shenzhen SEG Longyan New Energy Application and Holding subsidiary I 50.00 50.00
Development Co., Ltd.
Shenzhen SEG Investment Management Co., Ltd. Wholly-owned I 100.00 100.00
subsidiary
Shenzhen SEG Longyan Energy Technology Co., Ltd. Holding subsidiary I 50.00 50.00
Shenzhen-Shantou Cooperation Zone SEG Longyan Wholly-owned II 100.00 100.00
Energy Technology Co., Ltd. subsidiary
SEG Lianzhong Internet Technology Co., Ltd. Holding subsidiary I 55.00 55.00
Shenzhen SEG Zhongtong Technology Co., Ltd. Holding subsidiary I 49.00 49.00
Shenzhen SegMaker Co., Ltd. Wholly-owned I 100.00 100.00
subsidiary
SEG Kangle Enterprise Development Co., Ltd. Holding subsidiary I 55.00 55.00
SEG Property Development Co., Ltd. Wholly-owned I 100.00 100.00
subsidiary
Shenzhen SEG Real Estate Investment Co., Ltd. Holding subsidiary I 79.02 79.02
Huizhou Stars Real Estate Development Co., Ltd. Holding subsidiary II 88.00 88.00
97
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
SEG Property Management Co., Ltd. Holding subsidiary II 45.00 45.00
Shenzhen SEG New Urban Construction Development Holding subsidiary II 72.05 72.05
Co., Ltd.
Shenzhen SEG New Urban Business Operation Co., Ltd. Wholly-owned III 100.00 100.00
subsidiary
Beijing SEG Property Development Co., Ltd. Holding subsidiary II 50.00 50.00
Xi'an Konghong Property Co., Ltd. Holding subsidiary II 55.00 55.00
Shenzhen Hongge Cultural Development Co., Ltd. Wholly-owned II 100.00 100.00
subsidiary
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, 14 subsidiaries are added to entities included in the consolidated financial
statements of the current period.
1. Subsidiaries, special purpose entities, and business entities that profit control by way of commissioning management
or renting newly included in the consolidation scope in the current period
Name Reason for change
Shenzhen-Shantou Cooperation Zone SEG Longyan Energy Technology Co.,
Newly established
Ltd.
SEG Lianzhong Internet Technology Co., Ltd. Newly established
Shenzhen SEG Zhongtong Technology Co., Ltd. Newly established
Shenzhen SegMaker Co., Ltd. Merger of enterprises under common control
SEG Kangle Enterprise Development Co., Ltd. Merger of enterprises under common control
SEG Property Development Co., Ltd. Merger of enterprises under common control
Shenzhen SEG Real Estate Investment Co., Ltd. Merger of enterprises under common control
Huizhou Stars Real Estate Development Co., Ltd. Merger of enterprises under common control
SEG Property Management Co., Ltd. Merger of enterprises under common control
Shenzhen SEG New Urban Construction Development Co., Ltd. Merger of enterprises under common control
Shenzhen SEG New Urban Business Operation Co., Ltd. Merger of enterprises under common control
Beijing SEG Property Development Co., Ltd. Merger of enterprises under common control
Xi'an Konghong Property Co., Ltd. Merger of enterprises under common control
Shenzhen Hongge Cultural Development Co., Ltd. Merger of enterprises under common control
IV. Basis of preparation of the financial statements
1. Basis of preparation of the financial statements
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. Going-concern ability
The Company has evaluated the going-concern ability for the 12-month period from the end of the reporting period, and
no matters or circumstances of major concern were found. Accordingly, the financial statements are prepared on a
going-concern basis.
98
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
V. Important accounting policies and accounting estimates
Tips for specific accounting policies and accounting estimates:
None
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. Business period
The business period is 12 months, which is a criterion for the liquidity division of assets and liabilities.
4. Recording currency
Renminbi is the recording currency of the financial statements of the Company.
5. 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 the 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 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
99
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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 acquiree 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
acquiree 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.
6. 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 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 in 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.
iii. Expansion of subsidiaries or business
100
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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 reporting period. The income, expenses and profits of the subsidiaries
and business from the beginning of merger to the end of the reporting period are included in the consolidated profit
statement. The cash flow of the subsidiaries from the beginning of merger to the end of the reporting 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 reporting 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 reporting period are included in the consolidated
profit statement. The cash flow of such subsidiaries from the date of acquisition to the end of the reporting 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 remeasured 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,
excluding other comprehensive income due to re-measurement of changes in net liabilities and net assets in defined
benefit plans.
iv. Disposal of subsidiaries or business
(1) General disposal method
If the Company disposes of a subsidiary in the reporting 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 remeasured 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 an 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 subsidiary based on such equity investment before loss of control
101
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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 loss of control, the accounting
treatment is based on general methods for disposing of such subsidiary.
v. 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.
vi. 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.
7. 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 conditions 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 has 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
102
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
principles. Otherwise, the Company shall carry out accounting treatment in accordance with Accounting Standards for
Business Enterprises.
8. Standards for determination of cash and cash equivalents
In the preparation of the cash flow statement, the cash on hand 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.
9. Foreign currency businesses and translation of the financial statements in foreign currency
i. Foreign currency business
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.
ii. 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.
10. 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, during
initial recognition the Company 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 profit or loss
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.
103
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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 profit;
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, and include 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
Accounts receivable are non-derivative financial assets with fixed and determinable payments that are not quoted in an
active market.
For credit receivable arising from 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 that are quoted in an active market, including
accounts receivable, other receivables, notes receivable, and prepayment, the amount receivable in contracts or
agreements from the purchaser is treated as the initial recognition amount. For those of a financing nature, the present
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
104
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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:
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. Profits or losses (excluding
impairment loss and exchange difference of monetary financial assets in foreign currency) from change in the fair value
of financial assets available for sale are directly included in other comprehensive income. 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;
(2) 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).
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
105
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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 profit or loss.
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 in an active market, the Company determines respective fair value based on the
quotation in the active market. The quotation in the active market includes the quotation of an asset or liability that can
be easily and regularly obtained from exchanges, dealers, brokers, industry groups, pricing agencies, or regulators and
can represent the actual and frequent trading on the basis of fair trade.
For financial assets initially acquired or derivative financial assets or liabilities undertaken, the Company determines
their fair value based on the market pricing.
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;
(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:
106
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
(1) Impairment provision for financial assets available for sale
The Company shall appraise individual available-for-sale equity instrument investment on the balance sheet date. In case
the fair value of the equity instrument investment on the balance sheet date is lower than over 50% (included) of its cost
or is lower than its cost for over 12 months (included) consecutively, it indicates that such asset is impaired. In case the
fair value of such equity instrument investment on the balance sheet date is lower than over 20% (included) but below
50% of its cost, the Company will determine whether such equity instrument investment is impaired by taking into
consideration other relevant factors such as price volatility.
The cost described in the preceding paragraph is determined at the initial acquisition cost of available-for-sale equity
instrument investment less the recovered principal, amortized amount, and impairment losses originally included in
profit or loss. The fair value of available-for-sale equity instrument investment that does not exist in an active market is
determined at the present value of the future cash flows discounted at the current market yield. The fair value of
available-for-sale equity instrument investment that is quoted in an active market is determined at the closing price of the
stock exchange at the end of the period, unless such available-for-sale equity instrument investment is subject to
restricted period. The fair value of available-for-sale equity instrument investment that is subject to restricted period is
determined at the closing price of the stock exchange at the end of the period less the amount of compensation claimed
by market participants for bearing the risk of being unable to sell such equity instrument in the open market for a
specified period.
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.
11. Accounts receivable
(1) Accounts receivable with significant single amount and single provision for bad debts
Criterion or amount limit for determining a significant
Top five accounts receivable
single amount
Carry out independent impairment testing. If the current
Accounts receivable with significant single amount and
value of the expected future cash flow is less than its book
107
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
single provision for bad liabilities value, a provision shall 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 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 Provision proportion of other accounts
Aging
receivable (%) 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 evidence indicates that the Company is unable to
Reason of making bad debts provision for a single amount
recover the accounts receivable according to the original
terms.
Accrual method for bad debt provision: The difference
Accrual method for making bad debts provision between the expected future cash flow and its book value is
accrued for bad debt provision.
12. Inventory
Should the Company abide by the disclosure requirements of special industries?
No.
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 completed but
not 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
108
Fulltext of Semi-Annual Report 2017 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.
(3) Other turnover materials are amortized with one-off write-off method.
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
offset the warranty deposit. When the warranty period expires, the balance shall be returned to the construction
organization.
13. Held-for-sale assets
i. Categorization of held-for-sale non-current assets or disposal groups
The Company defines the non-current assets or disposal groups that meet both of the following requirements as
held-for-sale assets: (1) In accordance with the usual practice of selling such assets or disposal groups in similar
109
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
transactions, they can be sold immediately under the current circumstances. (2) The sale is very likely to occur, that is,
the Company has already made a sales plan and decision, a definite purchase commitment has been received, and the
sale is expected to be completed within a year.
For a non-current asset or a disposal group that the Company acquired for resale purposes, if it meets the requirement of
"the sale is expected to be completed within a year" on the day of its acquisition, and is very likely to meet other
requirements of the held-for-sale category in a short term (usually 3 months), it can be categorized as held-for-sale on the
day of its acquisition.
If one of the following reasons that are beyond the control of the Company causes a transaction between non-related
parties to fail to be completed within a year, and the Company remains committed to sell the non-current asset or
disposal group, the non-current asset or disposal group is categorized as held-for-sale: (1) The buyer or another party
accidentally sets a condition causing a delay in sale. The Company has taken timely actions towards the condition, and
the factors that cause the delay are expected to be resolved within one year after the condition causing a delay in sale was
set. (2) Under some rare cases, the sale of the held-for-sale non-current assets or disposal groups fails to be completed
within a year. The Company took necessary measures towards these new situations in the initial year and the conditions
of the held-for-sale category are satisfied again.
ii. Measurement of held-for-sale non-current assets or disposal groups
When a held-for-sale non-current asset or disposal group is initially measured or re-measured on the balance sheet date,
if its book value is higher than the net value after the fair value minuses the selling expense, the book value is written
down to the net value after the fair value minuses the selling expense. The amount written down is recognized as an
assets impairment loss and included in the current profit and loss, and at the same time it is recorded as a provision for
the impairment of the held-for-sale asset.
During the initial measurement of the non-current asset or disposal group that is categorized as held-for-sale on the day
of its acquisition, compare its initial measured value if it is assumed not to belong to the held-for-sale category and the
net value after the fair value minuses the selling expense, and then measure the value that is lower between the two.
Except for the non-current assets or disposal groups that are acquired from enterprise merger, the difference generated
from the initial measured value and the net value of a non-current asset or disposal group after its fair value minuses the
selling expense is recorded in the current profit and loss.
For the confirmed amount of asset impairment loss of a held-for-sale disposal group, first deduct the book value of
goodwill in the disposal group, and then deduct the book value based on the proportions of the book values of all
non-current assets in the disposal group.
If the net value of a held-for-sale non-current asset after its fair value minuses its selling expense increases before the
balance sheet date, restore it to the previous deducted value, and reverse the difference from the asset impairment loss
amount confirmed after the asset was categorized as held-for-sale. The reversed amount is recorded in the current profit
and loss. The asset impairment loss confirmed before the asset was categorized as held-for-sale shall not be reversed.
If the net value of a held-for-sale disposal group after its fair value minuses its selling expense increases before the
balance sheet date, restore it to the previous deducted value, and reverse the difference from the asset impairment loss
amount confirmed after the disposal group was categorized as held-for-sale. The reversed amount is recorded in the
current profit and loss. The deducted goodwill book value and the asset impairment loss confirmed before the disposal
group was categorized as held-for-sale shall not be reversed
For the amount reversed after the confirmation of asset impairment loss of a held-for-sale disposal group, add its book
value according to the proportion of the book values of all non-current assets in the disposal group except for its
goodwill.
A held-for-sale non-current asset or a non-current asset in a disposal group is not recorded in depreciation or
amortization. The liability interests and other expenses of a held-for-sale disposal group shall be further confirmed.
For a non-current asset or a disposal group that no longer meets the conditions of the held-for-sale category and thus
cannot be categorized as held-for-sale, or for a non-current asset that has been removed from a held-for-sale disposal
group, measure the lower value between the following two: (1) the book value before it is categorized as held-for-sale,
the amount adjusted after depreciation, amortization, or deduction if it is assumed not to belong to the held-for-sale
category; (2) retrievable amount.
When the Company terminates its confirmation on the held-for-sale non-current assets or disposal groups, the
unconfirmed profits and losses are recorded in the current profit and loss.
110
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
14. Long-term equity investment
i. Determination of the initial investment cost
(1) For the specific accounting policy for long-term equity investment arising from business merger, see Note 4 (5)
accounting method for business merger under or not under common control.
(2) Long-term equity investment obtained in other ways
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.
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
111
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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
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
112
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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.
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 the 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.
v. 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 share control of the arrangement, and such arrangement is joint
arrangement.
If joint arrangement is achieved through a single entity, and 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
113
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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.
15. Investment properties
Measurement mode of investment properties
Measurement of cost method
Depreciation and amortization
Class Expected service life Expected salvage value Annual depreciation
(year) (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, 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.
16. 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 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
Annual depreciation
Class Depreciation method Depreciation life Residual value rate
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
Straight-line method 5-10 5 19.00-9.50
equipment
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
114
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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 lessee 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.
17. Construction in progress
i. Initial measurement 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.
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 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.
18. 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.
115
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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.
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.
19. Biological assets
20. Oil and gas assets
21. 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.
1) 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
116
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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.
3) 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
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, through rechecking, the service life and amortization method of the intangible assets are
the same as the last year.
4) Intangible assets with unlimited service life
If the period during which an intangible asset will bring economic benefits to an enterprise is unpredictable, the service
life of such intangible asset is deemed as uncertain. Intangible assets with uncertain service life are not amortized during
the holding period and the service life is reviewed at the end of each period. If the service life is still uncertain after
review, the impairment test is performed in each accounting period.
(2) Accounting policy for internal R&D expenditure
i. Classification standards for research and development phases of R&D projects inside the Company
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.
ii. 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
117
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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.
22. 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 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.
23. 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.
ii. Period of amortization
It depends on the period of benefit.
24. Payroll
(1) Accounting treatment method of short-term remuneration
Payroll refers to various remunerations and compensations provided by the Company for obtaining services provided by
employees or for terminating the employment relationship. Payroll includes short-term remuneration, welfare after leave,
dismissal welfare and other long-term employee's welfare.
i. Short-term remuneration
Short-term remuneration refers to the payroll that needs to be paid completely within 12 months in the annual 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.
118
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
(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 of the Company 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
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.
25. 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.
119
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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.
26. 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.
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 methods
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.
120
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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.
27. Other financial instruments such as preferred stock and perpetual capital securities
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 perpetual capital securities 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 in 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 profit 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.
28. Income
Should the Company abide by the disclosure requirements of special industries?
No.
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.
121
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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.
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.
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.
122
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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.
29. Government subsidies
(1) Basis for determining government subsidies relevant to assets and accounting treatment methods
The government subsidy related to assets shall be used to offset the book value of relevant assets or recognized as
deferred income. Where the government subsidy related to assets is recognized as deferred income, it shall be recognized
in current profit or loss on a reasonable and systematic basis within the service life of relevant assets. Where relevant
assets are sold, transferred, scrapped, or damaged before the end of the service life, undistributed balance of related
deferred income shall be transferred to asset disposal in current profit or loss.
(2) Basis for determining government subsidies relevant to income and accounting treatment methods
The government subsidy used to compensate for expenses or losses of the Company in subsequent periods shall be
recognized as deferred income, and shall be recognized in current profit or loss or be used to offset costs when relevant
expenses are recognized. The government subsidy used to compensate for the existing expenses or losses of the
Company shall be directly recognized in current profit or loss or be used to offset costs.
30. 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.
123
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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.
31. Lease
(1) Accounting treatment method of operating lease
1) 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.
2) 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.
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
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.
32. Other important accounting policies and accounting estimates
i. Discontinued operations
The corporate integral part that has been disposed or categorized as held-for-sale, is under operation, and can be
separately identified in financial statements and that meets one of the following conditions is recognized as an integral
part of disconnected operations.
(1) The integral part represents an independent major business or a major business area.
(2) The integral part belongs to a disposal plan on an independent major business or a major business area.
(3) The integral part is a subsidiary that was acquired only for the resale purposes.
124
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
33. Changes in important accounting policies and accounting estimates
(1) Changes in important accounting policies
√ Applicable □ Not applicable
Content of and Reason for Accounting Policies Procedure for examination and approval
The Notice on the issuance and revision of the Accounting Examined and approved by the 4th meeting of 7th Board of Directors
Standard for Business Enterprises No. 16 - Government and the 4th meeting of 7th Board of Supervisors of the Company
Subsidy (Accounting [2017] No. 15) issued by the Ministry
of Finance on May 10, 2017 is implemented from June 12,
2017. Government subsidies on January 1, 2017 shall be
disposed of by prospective application. New government
subsidies from January 1, 2017 to the implementation date
of the new standard shall be adjusted according to the new
standard.
The Notice on the issuance of the Accounting Standard for Examined and approved by the 4th meeting of 7th Board of Directors
Business Enterprises No. 42 - Non-current Assets Held for and the 4th meeting of 7th Board of Supervisors of the Company
Disposal, Disposal Group and Termination of Business
(Accounting [2017] No. 13) issued by the Ministry of
Finance on April 28, 2017 is implemented from May 28,
2017.
(2) Changes in important accounting estimates
□ Applicable √ Not applicable
34. Others
□ Applicable √ Not applicable
VI. Taxes
1. Main tax categories and tax rates
Tax Category Taxation Basis Tax Rate
Sales of goods, taxable sales and service income,
Value-added tax 5%, 6%, 11%, 17%
intangible assets or real estate
Urban maintenance and construction
Paid-in turnover tax payable 7%
tax
Corporate income tax Taxable income 15%, 25%
Education surtax Paid-in turnover tax payable 3%
Local education surtax Paid-in turnover tax payable 2%
70% of the original value of the property (or rental
Property tax 1.2%, 12%
income) as the taxation basis
Tax payers when different enterprise income tax rates exist
125
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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 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.[2015] 042 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%.
3. Others
The individual income tax of the staff is withheld by the Company.
VII. Notes on items of consolidated financial statements
1. Monetary capital
Unit: yuan
Item Closing balance Opening balance
Cash on hand 935,508.63 712,997.23
Bank deposit 1,218,397,546.60 1,116,832,758.78
Other monetary capital 3,657,824.60 13,977,885.18
Total 1,222,990,879.83 1,131,523,641.19
Other note
The particulars of restricted monetary capital are as follows:
Item Blance at end of period Balance at beginning of period
Performance bond 3,600,000.00 3,600,000.00
Total 3,600,000.00 3,600,000.00
2. Financial assets measured by the fair value with changes included in current profit or loss
□ Applicable √ Not applicable
Other note
3. Derivative financial assets
□ Applicable √ Not applicable
126
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
4. Notes receivable
(1) Types of notes receivable
Unit: yuan
Item Closing balance Opening balance
Bank's acceptance bill 100,792.00
Total 100,792.00
(2) Pledged notes receivable at the end of the period
□ Applicable √ Not applicable
(3) Notes receivable endorsed or discounted but not due on the balance sheet date at the end of the period
□ Applicable √ Not applicable
(4) Notes transferred to accounts receivable due to default by the biller at the end of the period
□ Applicable √ Not applicable
Other note
5. 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
an significant amount
individually, for which 253,357.82 0.36% 253,357.82 100.00%
bad debt provision is
separately accrued
Accounts receivable with
bad debt provision
80,539,122.99 87.26% 345,529.17 0.43% 80,193,593.82 59,273,515.18 83.43% 324,125.30 0.55% 58,949,389.88
accrued based on credit
risk feature combinations
Accounts receivable with
an insignificant amount
individually, for which 11,759,475.70 12.74% 11,759,475.70 100% 11,519,077.88 16.21% 11,519,077.88 100.00%
bad debt provision is
separately accrued
Total 92,298,598.69 100.00% 12,105,004.87 13.12% 80,193,593.82 71,045,950.88 100.00% 12,096,561.00 17.03% 58,949,389.88
Accounts receivable with single significant amount individually, for which bad debt provision is separately accrued at
the end of period:
□ Applicable √ Not applicable
127
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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
Within one year 76,162,496.52
Subtotal of accounts aged
76,162,496.52
under 1 year
1-2 years 3,173,009.47 158,650.47 5.00%
2-3 years 538,447.00 53,844.70 10.00%
Over 3 years 665,170.00 133,034.00 20.00%
Total 80,539,122.99 345,529.17 0.43%
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:
1. Receivables, the bad-debt provision of which has been withdrawn seperately though their single amount at period end
is insignificant
Name of unit Closing balance
Receivables Bad-debt Proportion of Reason for withdrawal
provision withdrawal (%)
Jiangsu Unicom Company 3,092,011.09 3,092,011.09 100.00 Aging at over 5 years,
impossible to take back
Shenzhen Shuangxionghui 2,160,725.63 2,160,725.63 100.00 Aging at over 5 years,
Industrial Co., Ltd. impossible to take back
Shenzhen Liyuanshun Industrial 1,906,865.35 1,906,865.35 100.00 Aging at over 5 years,
Company impossible to take back
Shanghai Tianci Industrial 899,000.00 899,000.00 100.00 Aging at over 5 years,
Company impossible to take back
Other 75 units 3,700,873.63 3,700,873.63 100.00 Aging at over 5 years,
impossible to take back
Total 11,759,475.70 11,759,475.70 100.00 ---
(2) Accrual, recovery, or reversal of bad debt provisions in the current period
The amount of the current accrued bad debt provision is RMB 8,443.87 yuan.
Significant recovered or reversed amount of bad debt provisions in the current period:
(3) Write-off of accounts receivable in the current period
□ Applicable √ Not applicable
(4) Accounts receivable with top 5 closing balance collected based on debtors
128
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Percentage in the total amount Accrued bad debt
Company name Closing balance
of accounts receivable provision
Shenzhen Runneng Digital Co., Ltd. 15,251,125.38 16.52 ---
Xinjiang Zhongdi Communications 12,941,726.56 14.02 ---
Equipment Co., Ltd.
Shenzhen Wonder Industry Co., Ltd. 7,785,736.82 8.44 ---
Living quarter of Shenzhen Public Security 5,177,296.68 5.61 ---
Bureau Traffic Police Station (property
management expense)
Shenzhen Comnet Technology Co., Ltd. 5,144,254.61 5.57 ---
Total 46,300,140.05 50.16 ---
(5) No accounts receivable with its recognition terminated due to transfer of financial assets in the current period
(6) No assets and liabilities due to transfer or increase of accounts receivable in the current period
6. Advances
(1) Advances listed according to different durations
Unit: yuan
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 42,404,577.17 96.26% 55,452,730.86 98.77%
1-2 years 1,352,704.28 3.07% 586,224.90 1.04%
2-3 years 190,320.60 0.43%
Over 3 years 104,005.05 0.24% 104,005.05 0.19%
Total 44,051,607.10 -- 56,142,960.81 --
(2) Advances with top 5 closing balance collected based on prepayment payers
Percentage in the
total amount of Reason for
Company name Closing amount Prepayment date
accounts receivable non-settlement
(%)
Xi'an Gaoke (Group) New West China 20,000,000.00 45.40 Advance rental
Within 1 year
Industrial Development Co., Ltd payment for year 2017
7,018,666.00 15.93 Advance rental
Shenzhen Zhaocheng Group Within 1 year
payment
Suzhou Shuntong Network Technology 3,026,640.00 6.87
Within 1 year Prepayment for trade
Co., Ltd.
Suzhou Yuanshun SEG Digital Plaza 2,276,427.85 5.17 Advance rental
Within 1 year
Management Co., Ltd. payment
500,000.00 1.14 Within 1 year Prepayment for goods
Suzhou Xinchao Stainless Steel
129
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Decoration Co., Ltd.
Total 32,821,733.85 74.51 - -
Other note:
7. Interests receivable
(1) Types of interests receivable
□ Applicable √ Not applicable
(2) Significant overdue interest
□ Applicable √ Not applicable
Other note:
8. Dividends receivable
□ Applicable √ Not applicable
9. 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
8,530,276.35 5.03% 8,530,276.35 100.00% 20,131,835.38 12.38% 20,131,835.38 100.00%
amount and single bad
debt provision
Other receivables with
bad debt provision
accrued based on credit 127,493,506.22 75.24% 3,236,704.82 2.54% 124,256,801.40 120,667,690.94 74.20% 3,631,613.92 3.01% 117,036,077.02
risk feature
combinations
Other receivables with
an insignificant amount
individually, for which 33,428,840.56 19.73% 33,428,840.56 100.00% 21,832,287.03 13.42% 21,832,287.03 100.00%
bad debt provision is
separately accrued
Total 169,452,623.13 100.00% 45,195,821.73 26.67% 124,256,801.40 162,631,813.35 100.00% 45,595,736.33 28.04% 117,036,077.02
Other receivables with single significant amount individually, for which bad debt provision is separately accrued
√ Applicable □ Not applicable
Unit: yuan
130
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Other receivables (by Closing balance
company) Other receivables Bad debt provision Percentage Reason for provision
Unable to be recovered
Yangjiang Yuntong
8,530,276.35 8,530,276.35 100.00% for aging of over 5
Grease Co., Ltd.
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
Closing balance
Aging
Other receivables Bad debt provision Percentage
Sub-item within one year
Within 1 year 42,798,006.76
Subtotal of accounts aged
42,798,006.76
under 1 year
1-2 years 3,899,208.95 194,960.45 5.00%
2-3 years 534,607.70 53,460.77 10.00%
Over 3 years 14,941,417.98 2,988,283.60 20.00%
Total 62,173,241.39 3,236,704.82 5.21%
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 1. Other receivables, the bad-debt provision of which has been withdrawn seperately
though their single amount at period end is insignificant
Name of unit Closing balance
Other receivables Bad-debt Proportio Reason for withdrawal
provision n of
withdrawa
l (%)
Creidtor’s rights transferred 5,904,271.52 5,904,271.52 100.00 Aging at over 5 years,
from SEG Communication impossible to take back
Company
Shenzhen Lianjing Industry 5,697,287.51 5,697,287.51 100.00 Aging at over 5 years,
Trade Company impossible to take back
Shenzhen TOP Industrail 3,281,387.96 3,281,387.96 100.00 Aging at over 5 years,
Company impossible to take back
Losses from lawsuit with 2,604,575.00 2,604,575.00 100.00 Aging at over 5 years,
Zhejiang Securities impossible to take back
Other 118 units 15,941,318.57 15,941,318.57 100.00 Aging at over 5 years,
impossible to take back
131
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Total 33,428,840.56 33,428,840.56 100.00 ---
(2) Current accrued, recovered or reversed bad debt provision
The amount of the current accrued bad debt provision is RMB 399,914.60 yuan.
(3) Accounts receivable written off in the current period
□ Applicable √ Not applicable
(4) Classification of other receivables by nature
Unit: yuan
Nature of receivables Closing book balance Opening book balance
Creditor's right transfer cost 32,165,804.91 32,165,804.91
Imprest 4,072,738.13 2,000,225.81
Deposit and security deposit 70,454,568.16 63,614,630.08
Transfer-in of prepaid rental from
17,500,000.00
Zongheng International
Incomings and outgoings 62,759,511.93 47,351,152.55
Total 169,452,623.13 162,631,813.35
(5) Other receivables with top 5 closing balance collected based on debtors
Unit: yuan
Percentage in the
Nature of total amount of Closing balance of
Company name Closing balance Aging
receivables closing balance of bad debt provision
other receivables
Deposit for
Shenzhen
entrusted 21,056,000.00 1-2 years 12.43%
Zhaocheng Group
management
Zongheng
International Deposit and
Electronic Expo incomings and 14,000,000.00 Within 1 year 8.26%
City (Suzhou) Co., outgoings
Ltd.
Yangjiang Yuntong Debt restructuring
8,530,276.35 Over 5 years 5.03% 8,530,276.35
Grease Co., Ltd. of SEG Orient
Huizhou SEG
Incomings and 1-3 years and over
Property Service 8,444,755.99 4.98% 1,336,592.51
outgoings 3 years
Co., Ltd.
Nantong
Construction Salary deposit for
6,200,000.00 2-3 years 3.66% 1,240,000.00
Engineering peasant workers
Administration
132
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Total - 58,231,032.34 - 34.36% 11,106,868.86
(6) Accounts receivable involving government subsidies in the current period
□ Applicable √ Not applicable
(7) Account receivable with its recognition terminated due to transfer of financial assets in the current period
□ Applicable √ Not applicable
(8) Assets and liabilities due to transfer or increase of account receivable in the current period
□ Applicable √ Not applicable
10. Inventory
Should the Company abide by the disclosure requirements of the real estate industry?
No.
(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 5,372.34 5,372.34 17,523.81 17,523.81
Commodity stocks 4,995,794.96 4,995,794.96 4,599,633.46 4,599,633.46
Low-cost
223,434.68 223,434.68 216,734.06 216,734.06
consumables
Development cost 2,192,934,538.75 2,192,934,538.75 2,053,914,397.64 2,053,914,397.64
Development
1,475,741,959.11 1,475,741,959.11 1,319,784,778.98 1,319,784,778.98
products
Total 3,673,901,099.84 3,673,901,099.84 3,378,533,067.95 3,378,533,067.95
Should the Company abide by the disclosure requirements of the Guidelines of Shenzhen Stock Exchange on Industry Information Disclosure
No. 4 - Companies Engaging in Livestock and Poultry and Agriculture Business?
No.
(2) Inventory depreciation provision
□ Applicable √ Not applicable
(3) Note to capitalization amount of borrowing costs included in closing balance of inventory
Decrease in the current period Capitalization rate of
capitalization
Increase in the
Inventory item name Opening balance Closing balance amount recognized
current period Decrease in Decrease in
in the current period
sales others
(%)
Nantong SEG Times 22,656,572.48 --- --- --- 22,656,572.48 ---
Plaza
133
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
SEG ECO Phase II 216,675,971.77 33,081,058.16 --- --- 249,757,029.93 6.33%
Huizhou SEG 6,280,042.52 --- 127,627.14 --- 6,152,415.38 ---
Holiday Plaza
Xi'an SEG Holiday 66,746,979.25 16,397,931.90 --- --- 83,144,911.15 ---
Plaza
Total 312,359,566.02 49,478,990.06 127,627.14 --- 361,710,928.94 ---
(4) Completed but unsettled assets in construction contracts at the end of the period
□ Applicable √ Not applicable
11. Held-for-sale assets
□ Applicable √ Not applicable
12. Non-current assets due within one year
□ Applicable √ Not applicable
13. Other current assets
Unit: yuan
Item Closing balance Opening balance
Bank financial products 472,180,000.00 434,000,000.00
Tax to be deducted and withheld 3,384,316.30 2,114,704.16
Prepaid tax 43,536,507.34 23,856,598.74
Others 1,120,503.16 258,544.69
Total 520,221,326.80 460,229,847.59
Other note:
14. 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
34,279,472.42 15,000.00 34,264,472.42 34,493,683.41 15,000.00 34,478,683.41
instruments
Measured by fair value 469,079.59 469,079.59 683,290.58 683,290.58
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 34,279,472.42 15,000.00 34,264,472.42 34,493,683.41 15,000.00 34,478,683.41
134
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
(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
instruments/amortized cost 90,405.00 90,405.00
of debt instruments
Fair value 469,079.59 469,079.59
Accumulative changes in
fair value included in other 378,674.59 378,674.59
comprehensive income
(3) Available-for-sale financial assets measured by cost at the end of the period
Unit: yuan
Book balance Impairment provision Cash
Decrease Decrease dividends
Increase in Increase in Shareholding
Investee Period in the Period in the of the
the current Period end the current Period end proportion current
beginning current beginning current
period period period
period period
Kashgar
Shenzhen
20,000,000.00 20,000,000.00 3.03%
City Co.,
Ltd.
Shenzhen
SEG GPS
Scientific 13,515,392.83 13,515,392.83 11.38%
Navigations
Co., Ltd.
Nanjing
Shangsha 280,000.00 280,000.00 0.68%
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 reporting period
Unit: yuan
Financial assets available Available-for-sale equity Available-for-sale debt
Others 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
135
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
(5) Note to the available-for-sale equity instrument with the fair value at the end of period dropping significantly
or not contemporarily but with the impairment provision not accrued
□ Applicable √ Not applicable
15. Held-to-maturity investments
□ Applicable √ Not applicable
16. Long-term accounts receivable
□ Applicable √ Not applicable
17. Long-term equity investment
Unit: yuan
Increase/Decrease of the year
Investment Closing
Opening profit or loss Adjustment of Issued Closing balance of
Investee Other Accrued
balance Additional Negative confirmed other cash balance impairment
equity impairment Others
investment investment under the comprehensive dividends provision
changes provision
equity income or profits
method
1. Cooperative enterprise
2. Associate
Shanghai SEG
Electronics Market 2,551,558.06 -193,453.73 2,358,104.33
Co., Ltd.
Shenzhen Huakong
174,552,073.99 -3,033,891.98 -62.16 171,518,119.85
SEG Co., Ltd.
Shenzhen
International
Consumer
6,545,412.62 -2,195,664.66 4,349,747.96
Electronics
Exchange/Exhibition
Center Co., Ltd.
Huizhou SEG
Economic
7,200,000.00 7,200,000.00 7,200,000.00
Development Co.,
Ltd. *Note 2
Shenzhen SEG Plaza
Investment &
1,000,000.00 1,000,000.00 1,000,000.00
Development Co.,
Ltd. *Note 2
Shenzhen Hai Lian
Industrial Co., Ltd. 767,049.27 767,049.27 767,049.27
*Note 2
136
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Dongguan SEG Real
Estate Development
Co., Ltd. *Note 2
Huizhou Huiyang
District Stars
Industrial Co., Ltd.
*Note 2
Haikou Yida Real
Estate Development
Co., Ltd. *Note 2
Shenzhen SEG
Hainan
Communications
Engineering Co.,
Ltd.*Note 2
SEG Wisdom Sports
and Culture
20,008,278.04 -1,562,917.38 18,445,360.66
Development Co.,
Ltd.
Shenzhen SEG
Debao Investment 1.00 1.00
Co., Ltd.
Wuhan Qingshan
100,000.00 100,000.00 100,000.00
Department Store
Wuchang
180,000.00 180,000.00 180,000.00
Department Store
Wuhan Liuduqiao
Department Store 880,000.00 880,000.00 880,000.00
Group
Shenyang Mulan
50,100.00 50,100.00 50,100.00
Group
Sichuan Polyester
50,000.00 50,000.00 50,000.00
Co., Ltd.
Shen Guoyuan Asset
Management
60,000.00 60,000.00 60,000.00
Consultants Co.,
Ltd.
Shenzhen Kangyuan
Industrial
500,000.00 500,000.00 500,000.00
Development Co.,
Ltd.
Shenzhen Shouhang
Industrial Tourism 300,000.00 300,000.00 300,000.00
Services Co., Ltd.
Subtotal 214,744,471.98 1.00 -6,985,927.75 -62.16 207,758,483.07 11,087,149.27
137
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Total 214,744,471.98 1.00 -6,985,927.75 -62.16 207,758,483.07 11,087,149.27
Other note: Note 2: Seven associated enterprises, including Huizhou SEG Economic Development Co., Ltd. and so on, cannot provide
financial statemnents because their business licenses have been cancelled, so it is unable to conduct business accounting according to equity
method. However, the provision of diminution in the value of the whole investment has been withdrawn.
18. 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 1,443,667,334.56 5,237,512.49 1,448,904,847.05
2. Amount of increase in the
10,058,280.84 10,058,280.84
current period
(1) Outsourcing
(2) Transfer-in of inventory/fixed
10,058,280.84 10,058,280.84
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 1,453,725,615.40 5,237,512.49 1,458,963,127.89
II. Accumulated depreciation or
accumulated amortization
1. Opening balance 738,340,949.99 2,093,426.25 740,434,376.24
2. Amount of increase in the
22,899,252.29 45,220.68 22,944,472.97
current period
(1) Provision or amortization 22,899,252.29 45,220.68 22,944,472.97
3. Amount of decrease in the
current period
(1) Disposal
(2) Other transfer-out
138
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Houses and buildings Land use right Construction in progress Total
4. Closing balance 761,240,202.28 2,138,646.93 763,378,849.21
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
(2) Other transfer-out
4. Closing balance
IV. Book value
1. Closing book value 692,485,413.12 3,098,865.56 695,584,278.68
2. Opening book value 705,326,384.57 3,144,086.24 708,470,470.81
(2) Investment properties using fair value measurement model
□ Applicable √ Not applicable
（3）Real estate for investment whose ownership certificate has not been received yet
□ Applicable √ Not applicable
19. 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
45,356,666.93 45,457,734.88 15,683,266.47 19,731,692.39 17,107,590.83 143,336,951.50
balance
2. Amount of
increase in the 276,043.52 204,634.52 1,814,999.28 1,674,477.63 3,970,154.95
current period
(1) Purchase 276,043.52 204,634.52 1,814,999.28 1,674,477.63 3,970,154.95
(2) Transfer-in of
construction in
139
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
progress
(3) Business
merger increase
3. Amount of
decrease in the 233,609.21 395,927.28 629,536.49
current period
(1) Disposal or
233,609.21 395,927.28 629,536.49
scrap
4. Closing
45,356,666.93 45,733,778.40 15,887,900.99 21,313,082.46 18,386,141.18 146,677,569.96
balance
II. Accumulated
depreciation
1. Opening
20,563,837.97 37,583,212.14 11,688,984.64 10,848,727.78 10,622,267.87 91,262,554.62
balance
2. Amount of
increase in the 714,083.12 783,695.66 485,421.07 1,193,596.17 867,278.72 4,088,550.52
current period
(1) Provision 714,083.12 783,695.66 485,421.07 1,193,596.17 867,278.72 4,088,550.52
3. Amount of
decrease in the 220,220.35 260,711.38 480,931.73
current period
(1) Disposal or
220,220.35 260,711.38 480,931.73
scrap
4. Closing
21,277,921.09 38,366,907.80 12,174,405.71 11,822,103.60 11,228,835.21 94,870,173.41
balance
III. Impairment
provision
1. Opening
balance
2. Amount of
increase in the
current period
(1) Provision
3. Amount of
decrease in the
current period
140
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
(1) Disposal or
scrap
4. Closing
balance
IV. Book value
1. Closing book
24,078,745.84 7,366,870.60 3,713,495.28 9,490,978.86 7,157,305.97 51,807,396.55
value
2. Opening book
24,792,828.96 7,874,522.74 3,994,281.83 8,882,964.61 6,485,322.96 52,029,921.10
value
(2) Fixed assets that are temporarily idle
□ Applicable √ Not applicable
(3) Fixed assets acquired through financing lease
□ Applicable √ Not applicable
(4) Fixed assets acquired through financing lease out
□ Applicable √ Not applicable
(5) Fixed assets not obtaining a property right certificate
Unit: yuan
Reason for not obtaining the property right
Item Book value
certificate
Shop front in SEG Estate 1,161,742.84 Qualification procedures not complete
The property owner set forth in the certificate
Some floors of Tower 2 and Tower 3 of SEG
3,737,169.32 is SEG Group. Transfer of the property to
Industrial Building
SegMaker is under way.
The property owner set forth in the certificate
3F, Tower 205, Pengji industrial plant in
158,554.70 is SEG Group. Transfer of the property to
Shangbu
SegMaker is under way.
The property owner set forth in the certificate
11F, Tower 4, SEG Technology Park 591,578.04 is SEG Group. Transfer of the property to
SegMaker is under way.
The property owner set forth in the certificate
4F, Tower 2, SEG Industrial Building 173,324.78 is SEG Group. Transfer of the property to
SEG Real Estate is under way.
20. Construction in progress
(1) Construction in progress
Unit: yuan
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
141
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Shenzhen-Shantou CdTe
3,598,830.37 3,598,830.37
Film Industrial Park
Renovation of SEG
Technology Park and the 34,835,180.22 34,835,180.22 24,574,266.14 24,574,266.14
other two buildings
Decoration and
renovation of 13F of 1,373,773.84 1,373,773.84 972,214.54 972,214.54
SEG Plaza
Renovation of Tower 1
2,280,980.73 2,280,980.73 8,217,673.52 8,217,673.52
of SEG Estate
Decoration and
renovation of 4F of 1,003,328.00 1,003,328.00
World Trade Plaza
Property management
2,075,826.71 2,075,826.71 2,176,137.31 2,176,137.31
software
Other odd projects 733,819.28 733,819.28 148,608.00 148,608.00
Total 44,898,411.15 44,898,411.15 34,314,472.15 34,314,472.15
142
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
(2) Changes in significant construction in progress in the current period
Unit: yuan
Including:
Amount of Percentage of
Other Accumulated amount of Interest
Increase in fixed asset accumulated
Opening decrease in Closing amount of interest capitalization Source of
Project name Budget the current transfer-in in project Schedule
balance the current balance interest capitalization rate in the capital
period the current investment in
period capitalization in the current current period
period the budget
period
Shenzhen-Shantou
CdTe Film 652,089,600.00 3,598,830.37 3,598,830.37 Others
Industrial Park
Renovation of
SEG Technology
70,044,100.00 24,574,266.14 10,260,914.08 34,835,180.22 49.73% 49.73% Others
Park and the other
two buildings
Total 722,133,700.00 24,574,266.14 13,859,744.45 38,434,010.59 -- -- --
143
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
(3) Accrual of provisions for impairment of construction in progress in the current period
□ Applicable √ Not applicable
21. Engineering material
□ Applicable √ Not applicable
22. Disposal of fixed assets
□ Applicable √ Not applicable
23. Productive biological assets
(1) Productive biological assets using cost measurement model
□ Applicable √ Not applicable
(2) Productive biological assets using fair value measurement model
□ Applicable √ Not applicable
24. Oil & gas assets
□ Applicable √ Not applicable
25. 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 1,790,601.27 3,505,784.62 5,296,385.89
2. Amount of increase in the
28,850,300.00 90,318.87 28,940,618.87
current period
(1) Purchase 28,850,300.00 90,318.87 28,940,618.87
(2) Internal R&D
(3) Business merger increase
3. Amount of decrease in the
current period
(1) Disposal
4. Closing balance 30,640,901.27 3,596,103.49 34,237,004.76
II. Accumulated
144
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Non-patented
Item Land use right Patent right Outsourced software Total
technology
amortization
1. Opening balance 284,515.11 2,330,343.38 2,614,858.49
2. Amount of increase in the
138,318.62 256,851.84 395,170.46
current period
(1) Provision 138,318.62 256,851.84 395,170.46
3. Amount of decrease in the
current period
(1) Disposal
4. Closing balance 422,833.73 2,587,195.22 3,010,028.95
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 30,218,067.54 1,008,908.27 31,226,975.81
2. Opening book value 1,506,086.16 1,175,441.24 2,681,527.40
(2) Failing to obtain the property right certificate
□ Applicable √ Not applicable
Other note:
26. Development expense
□ Applicable √ Not applicable
Other note:
27. Goodwill
(1) Original book value of goodwill
Unit: yuan
145
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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
10,328,927.82 10,328,927.82
Development Co., Ltd.
Total 10,328,927.82 10,328,927.82
(2) Goodwill impairment provision
□ Applicable √ Not applicable
28. 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 104,008,448.77 10,902,942.78 12,661,557.80 102,249,833.75
Firefighting renovation 3,699,004.36 216,071.36 435,346.72 3,479,729.00
Market supporting fee of Tower B 650,020.35 20,856.30 629,164.05
Others 652,210.68 338,927.93 130,172.00 860,966.61
Total 109,009,684.16 11,457,942.07 13,247,932.82 107,219,693.41
29. Deferred income tax assets and liabilities
(1) Deferred income tax assets not offset
Unit: yuan
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Asset impairment provision 78,396,804.76 19,599,201.19 79,419,498.72 19,854,874.68
Deductible losses 23,445,860.52 5,861,465.13 23,441,306.92 5,860,326.73
Government subsidies included
10,233,333.32 2,558,333.33 11,183,333.32 2,795,833.33
in deferred income
Total 112,075,998.60 28,018,999.65 114,044,138.96 28,511,034.74
(2) Deferred income tax liabilities not offset
Unit: yuan
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Asset evaluation increment for
merger of enterprises not under 372,729,843.59 93,182,460.87 374,947,695.24 93,736,923.81
common control
146
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Changes in fair value of the
378,674.60 94,668.65 592,885.60 148,221.40
available-for-sale financial assets
Total 373,108,518.19 93,277,129.52 375,540,580.84 93,885,145.21
(3) Net amount of deferred income tax asset or liability after offset
Unit: yuan
Offsetting amount at the Offsetting amount at the b Opening balance after
Item Closing balance after offset
end of the period of the period offset
Deferred income tax assets 28,018,999.65 28,511,034.74
Deferred income tax
93,277,129.52 93,885,145.21
liabilities
(4) Details of unconfirmed deferred income tax assets
Unit: yuan
Item Closing balance Opening balance
Deductible losses 71,093,587.29 37,349,450.30
Asset impairment provision 12,357,049.63 10,465,726.40
Estimated liabilities 232,500.00 232,500.00
Total 83,683,136.92 48,047,676.70
(5) The deductible loss of deferred income tax assets not recognized yet will mature in the following years:
Unit: yuan
Year Closing amount Opening amount Remarks
2017 3,626,036.94 3,626,036.94
2018 2,610,263.14 2,610,263.14
2019 5,961,706.24 5,961,706.24
2020 10,444,329.02 10,444,329.02
2021 14,707,114.96 14,707,114.96
2022 33,744,136.99
Total 71,093,587.29 37,349,450.30 -
30. Other non-current assets
Unit: yuan
Item Closing balance Opening balance
Initial expense for the new hotel 7,459,000.09
Prepayment for engineering in the electronics market 987,300.00 6,345,660.37
Prepayment for equipment 88,000,000.00
Total 88,987,300.00 13,804,660.46
147
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
31. Short-term loans
(1) Classification of short-term loans
Unit: yuan
Item Closing balance Opening balance
Pledge loans 345,000,000.00 255,000,000.00
Borrowing on credit 200,000,000.00 100,000,000.00
Total 545,000,000.00 355,000,000.00
(2) Overdue outstanding short-term loans
There are no overdue outstanding short-term loans at the end of the period. The following is significant due and unpaid
short-term borrowing:
Unit: yuan
Borrower Closing balance Lending rate Overdue period Overdue rate
Other note:
32. Financial liabilities measured by fair value with changes included in current profit and loss
□ Applicable √ Not applicable
33. Derivative financial liabilities
□ Applicable √ Not applicable
34. Notes payable
□ Applicable √ Not applicable
35. Accounts payable
(1) List of accounts payable
Unit: yuan
Item Closing balance Opening balance
Payment for goods 640,006.82 524,596.07
Payment for engineering 102,886,172.21 23,179,045.22
Others 15,276,466.98 7,307,311.91
Total 118,802,646.01 31,010,953.20
(2) Significant accounts payable aged over one year
□ Applicable √ Not applicable
36. Advance receipts
(1) List of advance receipts
Unit: yuan
148
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Advance brand royalty 8,968,491.33 8,612,776.97
Advance rental payment 96,294,314.10 139,884,880.07
Advance payment for goods 10,367,776.54 14,193,465.32
Advance advertising payment 4,262,278.12 6,325,655.29
Advance house payment 1,130,341,486.05 750,552,974.20
Others 17,481,830.07 4,395,416.20
Total 1,267,716,176.21 923,965,168.05
(2) Significant advance receipts aged over one year
□ Applicable √ Not applicable
(3) Settled but uncompleted projects in construction contracts at the end of the period
□ Applicable √ Not applicable
37. Wages payable
(1) List of payroll payable
Unit: yuan
Item Opening balance Increase in the current period Decrease in the current period Closing balance
1. Short-term Including: Medical
35,226,843.77 111,492,075.72 72,526.40
payroll insurance
2. Welfare after
leave - defined 237,486.09 8,390,790.71
contribution plan
3. Dismissal
2,007,131.62 2,007,131.62
welfare
4. Other welfare
due within one 0.00
year
Total 35,464,329.86 121,889,998.05 139,891,568.41 17,462,759.50
(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,
30,315,697.41 97,510,655.30 115,410,798.02 12,415,554.69
allowances and subsidies
2. Employee welfare 5,840.08 3,481,474.68 3,409,483.27 77,831.49
3. Social insurance
75,070.59 3,547,557.20 3,599,856.78 22,771.01
premiums
3,068,801.83 3,121,234.43 20,093.80
149
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Supplementary medical
1,366.00 42,192.52 42,171.52 1,387.00
insurance
Work injury
533.73 163,776.06 163,732.06 577.73
insurance
Maternity
644.46 272,786.79 272,718.77 712.48
insurance
4. Housing fund 1,300,390.68 5,249,610.18 5,391,470.11 1,158,530.75
5. Labor union
expenditure and 3,529,845.01 1,699,974.84 1,536,132.34 3,693,687.51
employee education fund
6. Short-term paid
absence
7. Short-term
profit-sharing scheme
Other short-term
2,803.52 2,803.52 0.00
remuneration
Total 35,226,843.77 111,492,075.72 129,350,544.04 17,368,375.45
(3) Defined contribution plan
Unit: yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Basic pension insurance 85,769.64 7,071,773.46 7,070,477.07 87,066.03
2. Unemployment
1,716.45 289,675.58 289,776.01 1,616.02
insurance premium
3. Enterprise annuity 150,000.00 1,029,341.67 1,173,639.67 5,702.00
Total 237,486.09 8,390,790.71 8,533,892.75 94,384.05
Other note:
38. Taxes payable
Unit: yuan
Item Closing balance Opening balance
Value-added tax 19,586,640.03 39,447,820.87
Corporate income tax 91,322,630.63 144,349,073.48
Individual income tax 4,137,039.06 1,244,189.51
Urban maintenance and construction tax 394,948.57 2,300,140.46
Education surtax 555,845.58 1,432,983.81
Housing property tax 5,641,500.96 4,411,928.87
150
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Closing balance Opening balance
Land value-added tax 36,431,423.35 60,645,031.72
Stamp tax and water fund 59,146.91 196,966.22
Others 422,073.49 687,409.44
Total 158,551,248.58 254,715,544.38
39. Interest payable
Unit: yuan
Item Closing balance Opening balance
Interest payable on short-term loans 2,595,650.28 3,357,745.13
Total 2,595,650.28 3,357,745.13
40. Dividends payable
Unit: yuan
Item Closing balance Opening balance
Common stock dividends 6,592,710.58 15,132,970.78
Total 6,592,710.58 17,652,970.78
41. Other payables
(1) Other payables listed based on nature
Unit: yuan
Item Closing balance Opening balance
Deposit and security deposit 207,802,518.68 198,187,056.13
Central air conditioner maintenance cost and
14,459,862.08 12,882,368.93
special maintenance fund
Receipts under custody 17,032,365.53 14,507,917.60
Funds from related parties 822,543,509.67 282,829,598.18
Water and electricity charges, rental, and
268,335,366.99 292,339,943.09
others payable of the electronics market
Total 1,330,173,622.95 800,746,883.93
(2) Significant other payables aged over one year
□ Applicable √ Not applicable
151
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
42. Held-for-sale liabilities
□ Applicable √ Not applicable
Other note:
43. Non-current liabilities due within one year
Unit: yuan
Item Closing balance Opening balance
Long-term borrowings due within one year 715,000,000.00 488,000,000.00
Long-term accounts payable due within one
3,561,661.33 3,561,661.33
year
Total 718,561,661.33 491,561,661.33
44. Other current liabilities
Unit: yuan
Item Closing balance Opening balance
Output tax to be carried forward 733,019.98
Total 733,019.98
45. Long-term borrowings
(1) Types of long-term borrowings
Unit: yuan
Item Closing balance Opening balance
Pledge loan 200,000,000.00
Mortgage loan 772,250,000.00 830,000,000.00
Total 772,250,000.00 1,030,000,000.00
Note to long-term loan classification:
The Company entered into a loan contract with the Bank of Beijing on April 30, 2013, for which the Bank of Beijing
issued loans of RMB 120,000,000.00 in total to the Company. According to the Mortgage Contract signed by the
Company and Bank of Beijing, the collateral is A3301-A3326, A3601-A3626, A3701-A3726 and some properties of Yidi
Integrated Market, SEG Science Park and SEG Industrial Park.
The Company entered into loan contracts with Shenzhen Branch of Ping An Bank Co., Ltd. (hereinafter referred to as
"Ping An Bank") respectively on March 29, 2016 and September 19, 2016, for which Ping An Bank issued loans of RMB
620,000,000.00 in total to the Company; according to the Maximum Mortgage Guarantee Contract signed with Ping An
Bank, the collateral is the properties of No. 101-107, 201-209, 307-310, 401-406 and 501 of Podium Buildings of Stars
Plaza.
The Company entered into a fixed asset loan contract with Shenzhen Futian Sub-branch of Bank of Communications Co.,
Ltd. (hereinafter referred to as "Bank of Communications") on June 28, 2016, for which the Bank of Communications
issued loans of RMB 200,000,000.00 in total to the Company; according to the Mortgage Contract signed with the Bank
of Communications, the collateral is some properties of SEG Court, Stars Plaza, Building 103-106 of SEG Industrial
152
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Zone, No. 101-427 of Building 2 of Single Dormitory of Xinge Residential Block, 1615 of Building 8 of Xinge Building,
A1 of 1F of Building 4 of SEG Science Park 4 etc.
The Company’s subsidiary Huizhou Stars Real Estate Development Co., Ltd. (hereinafter referred to as "Huizhou Stars")
entered into fixed assets loan contracts with Huizhou Branch of China Construction Bank Co., Ltd. (hereinafter referred
to as "China Construction Bank") respectively on April 16, 2014, August 22, 2014, September 28, 2014, February 10,
2015, April 7, 2015, April 11, 2015, May 5, 2015, and May 29, 2015, for which China Construction Bank issued loans of
RMB 185,000,000.00 in total to Huizhou Stars; according to the Maximum Mortgage Guarantee Contract signed by
Huizhou Stars and China Construction Bank, the collateral is part of the construction in progress of SEG Holiday Plaza.
46. Bonds payable
□ Applicable √ Not applicable
47. Long-term payables
□ Applicable √ Not applicable
48. Long-term payroll payable
(1) List of long-term payroll payable
□ Applicable √ Not applicable
49. Special payables
□ Applicable √ Not applicable
50. Estimated liabilities
Unit: yuan
Item Closing balance Opening balance Cause
Others 232,500.00 232,500.00 Breach of the lease contract
Total 232,500.00 232,500.00 -
51. Deferred income
Unit: yuan
Increase in the current Decrease in the
Item Opening balance Closing balance Cause
period current period
Government subsidies 11,183,333.34 949,999.98 10,233,333.36
Unrealized profit on
3,484,109.50 1,780,830.67 1,703,278.83
house sales
Total 14,667,442.84 2,730,830.65 11,936,612.19 -
153
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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
Support project for
construction of
9,183,333.34 949,999.98 8,233,333.36 Relevant to assets
Nantong SEG
Electronics Market
CPARK Show
1,000,000.00 1,000,000.00 Relevant to income
Promotion Center
CPARK Show
1,000,000.00 1,000,000.00 Relevant to assets
Promotion Center
Total 11,183,333.34 949,999.98 10,233,333.36 -
52. Other non-current liabilities
□ Applicable √ Not applicable
53. 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 784,799,010.00 450,857,239.00 450,857,239.00 1,235,656,249.00
54. Other equity instruments
□ Applicable √ Not applicable
55. Capital reserves
Unit: yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Capital premium (Capital
1,119,284,592.76 7,198,890.58 1,126,483,483.34
stock premium)
Other capital reserves 175,086,543.13 175,086,543.13
Total 1,293,931,135.89 175,086,543.13
154
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Other note, increase or decrease in the current period and reason for change:
(1) Increase of capital reserves: In this period, the minoprity shareholders of Suzhou SEG Electronics Market
Management Co., Ltd., the holding subsidiary of the Company, gave up dividends, thus 360,000.00 yuan that belongs to
the Company after calculating according to share-dolding proportion is booked into capital reserves; because Shenzhen
SEG Property Management Co., Ltd., the holding sub-subsidiary of the company， introduces new shareholders inward
leading to the change of share-holding proportion, thus 6,838,890.58 yuan that belongs to the Company after calculating
according to share-dolding proportion is booked into capital reserves
(2) Decrease of capital reserves: In this period, the consolidation of enterprises under the same control happens in the
Company, the capital reserve, which increased the opening balance of capital reserve because of restoring the retained
income of invested unit, is written down, in addition, the book value of considerations for aquicition exceeds the book
value of net assets acquired from consolidation, thus the balance write down capital reserve resulting in the decrease of
the latter.
56. Treasury share
□ Applicable √ Not applicable
57. Other comprehensive income
Unit: yuan
Amount incurred in the reporting period
Less: profit or
Pre-tax Amount Amount
Opening loss transferred Closing
Item amount after tax after tax
balance in from other Less: balance
obtained in attributable attributable
comprehensive Income tax
the current to parent to minority
income in the
period company shareholders
current period
II. Other comprehensive income that can
296,235.62 -214,273.15 -53,552.75 -107,028.42 -53,691.98 189,207.20
be categorized as profit or loss
Including: Shares of the investee of
other comprehensive income to be
178.21 -62.16 -62.16 116.05
reclassified into profit or loss under the
equity method
Profit or loss from changes in fair value
296,057.41 -214,210.99 -53,552.75 -106,966.26 -53,691.98 189,091.15
of the available-for-sale financial assets
Total of other comprehensive income 296,235.62 -214,273.15 -53,552.75 -107,028.42 -53,691.98 189,207.20
Other note: adjustment of the initial recognition amount of hedged items transferred from effective hedging profit or loss
of cash flow
58. Special reserve
□ Applicable √ Not applicable
59. Surplus reserve
Unit: yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
155
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Statutory surplus reserves 121,803,040.24 121,803,040.24
Total 121,803,040.24 121,803,040.24
60. Undistributed profits
Unit: yuan
Item Current period Previous period
Before adjustment undistributed profits at the end of
211,031,648.29
the previous period
After adjustment undistributed profit at the beginning
211,031,648.29
of period
Add: Net profits attributable to the parent company
50,008,785.42
owner in the current period
Undistributed profits at the end of period 261,404,433.71
61. 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 592,346,626.22 426,661,521.04 724,213,525.00 527,378,769.17
Total 592,346,626.22 426,661,521.04 724,213,525.00 527,378,769.17
62. Business taxes and surcharges
Unit: yuan
Item Amount incurred in the current period Amount incurred in the previous period
Urban maintenance and construction tax 1,750,303.90 2,038,255.57
Education surtax 1,313,636.22 1,392,125.81
Housing property tax 4,617,030.33
Land use tax 539,407.41
Vehicle and vessel use tax 6,360.00
Stamp tax 693,526.59
Business tax 650,661.40 21,066,541.31
Land value-added tax 883,164.93 15,187,084.75
Others 125,131.67 166,658.42
Total 10,579,222.45 39,850,665.86
156
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
63. Sales expense
Unit: yuan
Item Amount incurred in the current period Amount incurred in the previous period
Total 18,930,296.04 15,452,527.47
64. Management cost
Unit: yuan
Item Amount incurred in the current period Amount incurred in the previous period
Total 62,603,332.15 48,360,132.61
Other note:
65. Financing expenses
Unit: yuan
Item Amount incurred in the current period Amount incurred in the previous period
Interest expenses 13,114,305.66 7,977,608.20
Less: Interest income 3,738,102.74 3,220,740.59
Loss on exchange -775.34 -301,807.07
Others 622,455.85 629,184.18
Total 9,997,883.43 5,084,244.72
Other note:
66. Asset impairment loss
Unit: yuan
Item Amount incurred in the current period Amount incurred in the previous period
I. Bad debt loss -391,470.73 -3,854,024.82
XIV. Others -150,573.06
Total -542,043.79 -3,854,024.82
Other note:
67. Profit from fair value changes
□ Applicable √ Not applicable
68. Investment income
Unit: yuan
Item Amount incurred in the current period Amount incurred in the previous period
157
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Long-term equity investment income by the
-6,985,927.76 -4,895,623.11
equity method
Others (financial products) 7,394,856.25 9,073,281.04
Total 408,928.49 4,177,657.94
Other note:
69. Other profit
□ Applicable √ Not applicable
70. Non-operating income
Unit: yuan
Amount incurred in the current Amount incurred in the previous Amount included in current
Item
period period non-recurring profit or loss
Profit from disposal of
1,902.73 60,590,211.12 1,902.73
non-current assets
Including: Profit on disposal of
1,902.73 40.50 1,902.73
fixed assets
Government subsidies 3,716,243.11 101,608.00 3,716,243.11
Liquidated damages 2,298,041.40 145,672.11 2,298,041.40
Others 1,210,771.09 894,974.31 1,210,771.09
Total 7,226,958.33 61,732,465.54 7,226,958.33
Unit: yuan
Influence on Amount
Amount Relevant to
Property and the profit and Special incurred in the
Subsidy item Fund source Purpose incurred in the assets/relevant
type loss of the subsidy previous
current period to income
current year period
Subsidies for
Relevant to
online SEG 35,628.12
assets
projects
Gangzha
District
service Relevant to
200,000.00
industry income
incentive
funds
Support funds
for opening
and Relevant to
investment 2,000,000.00
income
promotion of
Nantong
Times Square
158
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
animation
industry base
Gangzha
District
Relevant to
incentives for 100,000.00
income
investment
promotion
Special funds
for green
Relevant to
applications 420,000.00
income
(energy saving
of the plaza)
Incentives for
excellent
qualified party
organizations
in Taihu New Relevant to
10,000.00
Town 2016 income
"Four Haves
and Six
Goods"
Program
Support
project for
Relevant to
Nantong SEG 949,999.98
assets
electronics
market
Guiding funds
for
Relevant to
development 50,000.00
income
of service
industry
Post
Relevant to
stabilization 35,643.13 15,979.88
income
subsidy
Relevant to
Others 600.00
income
Total -- -- -- -- -- 3,716,243.11 101,608.00 --
71. Non-operating expenses
Unit: yuan
Amount incurred in the current Amount incurred in the previous Amount included in current
Item
period period non-recurring profit or loss
Loss from disposal of non-current
113,395.56 97,511.68 113,395.56
assets
Including: loss from disposal of 113,395.56 97,511.68 113,395.56
159
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
fixed assets
Donations 106,708.00 97,950.00 106,708.00
Compensation for loss 2,710,190.00
Others 329,794.14 302,714.92 329,794.14
Total 549,897.70 3,208,366.60 549,897.70
72. 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 38,844,842.36 60,839,068.51
Deferred income tax expense -62,415.36 -2,665,027.84
Total 38,782,427.00 58,174,040.67
(2) Adjustment process of accounting profit and income tax
Unit: yuan
Item Amount incurred in the current period
Total profit 103,484,130.04
Income tax calculated according to statutory or applicable tax rate 25,871,032.44
Impact of different tax rates applicable to subsidiaries -704,129.44
Impact of adjustment of income previous income tax 3,117,593.42
Impact of non-taxable income 1,746,481.94
Impact of non-deductible costs, expenses and losses 89,341.20
Impact of deferred income tax assets unrecognized in the previous
316.63
period on deductible losses
Impact of deferred income tax assets unrecognized in current period
8,661,790.81
on deductible temporary difference or deductible losses
Income tax expense 38,782,427.00
73. Other comprehensive income
□ Applicable √ Not applicable
74. 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
160
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
Incomings and outgoings 56,939,433.82 50,938,607.24
Goods payment collected from tenants 122,049,724.03 151,899,127.10
Interest income 3,738,102.74 3,220,740.59
Non-operating income 6,276,958.35 1,142,294.92
Total 189,004,218.94 207,200,769.85
(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 50,110,009.45 56,220,563.28
Goods payment paid for tenants 151,196,744.40 113,704,875.57
Cash expenses 58,433,667.87 56,532,009.43
Non-operating expenses 436,502.14 3,110,854.92
Total 260,176,926.86 229,568,303.20
(3) Other cash received related to investment activities
Unit: yuan
Item Amount incurred in the current period Amount incurred in the previous period
Total 49,130,164.38
(4) Other cash paid related to investment activities
Unit: yuan
Item Amount incurred in the current period Amount incurred in the previous period
Total 49,000,000.00
(5) 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 interests of fractional
7,812.30
shares
Cash deposit received
Total 7,812.30
(6) Other cash paid related to financing activities
Unit: yuan
Item Amount incurred in the current period Amount incurred in the previous period
161
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Interbank financing of related parties 100,000,000.00 131,000,000.00
Payment for cash deposit
Payment for loan interest of related parties 310,202.16 1,108,333.34
Payment for issuance of short-term financing
1,524,692.51
bonds
Total 100,310,202.16 133,633,025.85
75. 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 64,701,703.04 145,580,633.22
Add: Asset impairment provision -391,470.73 -3,854,024.82
Depreciation of fixed assets, oil & gas assets and
26,988,547.70 29,302,137.95
consumable biological assets
Amortization of intangible assets 395,170.46 1,685,796.97
Amortization of long-term expenses to be apportioned 13,247,932.82 6,495,757.24
Loss on disposal of fixed assets, intangible assets, and
-111,492.83 -60,492,699.44
other long-term assets (Profit will be marked with "-")
Loss on disposal of fixed assets (Profit will be marked
with “-)
Loss on change of fair value (Profit will be marked
with “-“)
Financial expenses (enter "-" for income) 12,137,773.33 7,977,608.20
Loss from investment (enter "-" for profit) -408,928.49 -4,177,657.94
Decrease in deferred tax assets (enter "-" for increase) 492,035.09 1,034,392.83
Decrease in deferred tax assets (enter "-" for increase)
-608,015.69 -593,451.65
Decrease in deferred tax assets (enter "-" for increase)
Inventory decrease (enter "-" for increase) -295,368,031.89 -263,543,005.62
Decrease in accounts receivable related to operating
-15,982,103.88 -35,368,648.56
activities (enter "-" for increase)
Increase in accounts payable related to operating
288,032,159.81 246,339,420.41
activities (enter "-" for decrease)
Others
Net cash flow from operating activities 93,125,278.74 70,386,258.79
162
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
2. Major investing and financing activities that
-- --
involve no cash payments and receipts:
Conversion of debt into capital
Transferable corporate bonds due within one year
Fixed assets leased from financing
3. Change in cash and cash equivalents: -- --
Closing balance of cash 1,219,390,879.83 968,019,910.31
Less: Opening balance of cash 1,127,923,641.19 631,463,030.13
Plus: Closing balance of cash equivalent
Less: Opening balance of cash equivalent
Net increase in cash and cash equivalents 91,467,238.64 336,556,880.18
(2) Net cash received from obtaining subsidiaries
□ Applicable √ Not applicable
(3) Net cash received from disposal of subsidiaries
□ Applicable √ Not applicable
(4) Composition of cash and cash equivalents:
Unit: yuan
Item Closing balance Opening balance
I. Cash 1,219,390,879.83 1,127,923,641.19
Including: Cash on hand 935,508.63 712,997.23
Bank deposits available for payment at any
1,218,397,546.60 1,116,832,758.78
time
Other monetary funds available for payment
57,824.60 10,377,885.18
at any time
III. Closing balance of cash and cash
1,219,390,879.83 1,127,923,641.19
equivalents
76. Notes to main items in the owners' equity changes
□ Applicable √ Not applicable
77. Assets where ownership or the right to use is restricted
Unit: yuan
Item Closing book value Reason for restriction
Monetary funds 3,600,000.00 Deposit and performance bond
163
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Fixed assets 15,698,424.79 Collaterals for bank loans
Development products 119,691,853.07 Collaterals for bank loans
Investment properties 123,049,705.61 Collaterals for bank loans
Total 262,039,983.47 -
78. Foreign currency monetary projects
(1) Foreign currency monetary projects
Unit: yuan
Closing balance of foreign Closing balance of converted
Item Discount exchange rate
currency RMB
HK$ 10,813.43 0.86792 9,385.19
(2) Note to the overseas operational entity, including disclosure of its main overseas place of business, recording
currency, and basis of selection and disclosure of the reason for changes in the recording currency (if any).
□ Applicable √ Not applicable
79. Hedging
□ Applicable √ Not applicable
80. Others
□ Applicable √ Not applicable
VIII. Change in consolidation scope
1. Merger of enterprises not under common control
□ Applicable √ Not applicable
2. Merger of enterprises under common control
(1) Merger of enterprises under common control incurred in the current period
Unit: yuan
Net profit of
Basis for Income of the
Proportion the merged
merger of Determination merged from
of equity from the Income of the Net profit of the
Name of the enterprises Date of basis for the the beginning
acquired in beginning of merged during merged during
merged under merger date of of the period to
enterprise the period to comparison comparison
common merger the date of
merger the date of
control merger
merger
Prier to
Shenzhen
January 19,
SegMaker Co., 100.00% consolidation, Jan. 1, 2017 11,285,307.42 4,837,778.32 6,501,367.82 4,419,576.23
controlled by 2017
Ltd.
the same
164
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
parent
company
SEG Group
Prier to January 19,
consolidation, 2017
SEG Kangle
controlled by
Enterprise
55.00% the same Jan. 1, 2017 4,240,969.11 2,352,279.66 26,731,741.98 13,716,475.95
Development
parent
Co., Ltd.
company
SEG Group
Prier to January 19,
consolidation, 2017
SEG Property controlled by
Development 100.00% the same Jan. 1, 2017 4,771,400.40 775,882.70 28,562,159.09 6,363,991.53
Co., Ltd. parent
company
SEG Group
Prier to January 19,
consolidation, 2017
Shenzhen SEG
controlled by
Real Estate
79.02% the same Jan. 1, 2017 37,274,858.23 2,667,030.04 299,745,019.26 80,932,649.90
Investment
parent
Co., Ltd.
company
SEG Group
Other note:
Note*: The income and net profit of Shenzhen SEG Real Estate Investment Co., Ltd. are the consolidated data of
Shenzhen SEG Real Estate Investment Co., Ltd. and its subsidiaries.
(2) Consolidated cost
Unit: yuan
Shenzhen SEG Real
Shenzhen SegMaker SEG Kangle Enterprise SEG Property
Consolidated cost Estate Investment Co.,
Co., Ltd. Development Co., Ltd. Development Co., Ltd.
Ltd.
Cash 34,031.65 4,064.45 1,771.69 27,694.83
Face value of issued
22,709.92 2,712.28 1,182.28 18,481.25
equity securities
Note to the contingent consideration and the reason for change:
Other note:
(3) Book value of the assets and liabilities of the acquiree at the date of merger
Unit: yuan
SEG Kangle Enterprise SEG Property Development Shenzhen SEG Real Estate
Shenzhen SegMaker Co., Ltd.
Development Co., Ltd. Co., Ltd. Investment Co., Ltd.
Closing Closing Closing
Closing balance
Consolidated balance of the Consolidated Consolidated balance of the Consolidated balance of the
of the previous
date previous date date previous date previous
period
period period period
Net asset 238,750,258.57 233,912,480.2 61,864,319.0 59,512,039.38 61,749,318.18 60,973,435.48 778,492,271.93 775,825,241.8
165
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
5 4 9
Less:
27,838,943.5 236,510,029.0
Minority 26,780,417.72 235,938,594.23
7 0
equity
Acquired
233,912,480.2 34,025,375.4 539,315,212.8
net 238,750,258.57 32,731,621.66 61,749,318.18 60,973,435.48 542,553,677.70
5 7 9
assets
Contingent liabilities of the merged assumed in enterprise merger:
Other note:
3. Counter purchase
□ Applicable √ Not applicable
4. Disposal of subsidiaries
Has single disposal of investment in subsidiaries caused loss of control?
□ Yes √ No
Is investment in subsidiaries disposed of through several transactions by steps with loss of control in the current period?
□ Yes √ No
5. Other reasons for change in the consolidation scope
Note to change in the consolidation scope caused by other reasons (such as establishment or liquidation of subsidiaries):
1. Newly-established companies in the reporting period
Company Registered capital Paid-in capital (ten Percentage of shares
(ten thousand thousand yuan) (%)
yuan)
SEG Longyan Energy Technology Co., Ltd. 16,500.00 10,800.00 100.00
SEG Lianzhong Internet Technology Co., Ltd. 2,480.00 1,500.00 55.00
Shenzhen SEG Zhongtong Technology Co., Ltd. 2,000.00 200.00 49.00
IX. Equity in other entities
1. Equity in subsidiaries
(1) Composition of enterprise group
Main place of Place of Shareholding ratio Method of
Subsidiary name Nature of business
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.
166
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Main place of Place of Shareholding ratio Method of
Subsidiary name Nature of business
business registration Direct Indirect acquisition
Shenzhen Mellow
Hotel management,
Orange Business Investment and
Shenzhen Shenzhen consultancy and property 66.58%
Hotel Management establishment
management
Co., Ltd
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.
Market facilities leasing,
Shenzhen SEG
property management, Investment and
Electronics Market Nanjing Nanjing 100.00%
sales of electronic products establishment
Management Co., Ltd.
and 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 market lease Investment and
Electronics Market Wuxi Wuxi 51.00%
management establishment
Co., Ltd
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.
Nantong SEG Times
Investment and
Plaza Development Nantong Nantong Real estate development 100.00%
establishment
Co., Ltd.
Shenzhen SEG
Merger of
Baohua Enterprise Property lease and
Shenzhen Shenzhen 66.58% enterprises under
Development Co., management
common control
Ltd.
Shenzhen SEG Merger of
Investment in industrial
Industrial Investment Shenzhen Shenzhen 100.00% enterprises under
and commercial business
Co., Ltd. common control
Merger of
Changsha SEG
enterprises not
Development Co., Changsha Changsha Property lease 46.00%
under common
Ltd.
control
167
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Main place of Place of Shareholding ratio Method of
Subsidiary name Nature of business
business registration Direct Indirect acquisition
Yantai SEG Times
Investment and
Plaza Development Yantai Yantai real estate development 90.00%
establishment
Co., Ltd.
Nantong SEG
Commercial Investment and
Nantong Nantong - 100.00%
Operation 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%
Plaza 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
Application and Shenzhen Shenzhen New energy development 50.00%
establishment
Development Co.,
Ltd.
Shenzhen SEG Investment management;
Investment and
Investment Shenzhen Shenzhen Industries; Fund 100.00%
establishment
Management Co., Ltd. management
Technology development
Shenzhen SEG of new energy; R&D and
Investment and
Longyan Energy Shenzhen Shenzhen manufacturing of CdTe 50.00%
establishment
Technology Co., Ltd. solar cell modules; PV
project
Shenzhen-Shantou
R&D and manufacturing of
Cooperation Zone Shenzhen-Shantou Shenzhen-Shantou Investment and
CdTe solar cell modules; 100.00%
SEG Longyan Energy Cooperation Zone Cooperation Zone establishment
PV project
Technology Co., Ltd.
SEG Lianzhong
Investment and
Internet Technology Shenzhen Shenzhen Internet services 55.00%
establishment
Co., Ltd.
Shenzhen SEG
Software and information Investment and
Zhongtong Shenzhen Shenzhen 49.00%
technology services establishment
Technology Co., Ltd.
Electronics markets leasing Merger of
Shenzhen SegMaker
Shenzhen Shenzhen services; Property leasing; 100.00% enterprises under
Co., Ltd.
Hotel management common control
168
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Main place of Place of Shareholding ratio Method of
Subsidiary name Nature of business
business registration Direct Indirect acquisition
SEG Kangle
Merger of
Enterprise Electronics markets leasing
Shenzhen Shenzhen 55.00% enterprises under
Development Co., services; Property leasing
common control
Ltd.
SEG Property Merger of
Development Co., Shenzhen Shenzhen Property management 100.00% enterprises under
Ltd. common control
Shenzhen SEG Real Property leasing; Property Merger of
Estate Investment Shenzhen Shenzhen management; Real estate 79.02% enterprises under
Co., Ltd. development common control
Huizhou Stars Real Merger of
Real estate development;
Estate Development Huizhou Huizhou 88.00% enterprises under
Leasing
Co., Ltd. common control
Merger of
SEG Property
Shenzhen Shenzhen Property management 45.00% enterprises under
Management Co., Ltd.
common control
Shenzhen SEG New
Merger of
Urban Construction
Shenzhen Shenzhen Real estate development 72.05% enterprises under
Development Co.,
common control
Ltd.
Shenzhen SEG New
Business operation Merger of
Urban Construction
Shenzhen Shenzhen management; Property 100.00% enterprises under
Development Co.,
management common control
Ltd.
Beijing SEG Property Merger of
Development Co., Beijing Beijing Real estate development 50.00% enterprises under
Ltd. common control
Merger of
Xi'an Konghong
Xi'an Xi'an Real estate development 55.00% enterprises under
Property Co., Ltd.
common control
Shenzhen Hongge Merger of
Culture Development Shenzhen Shenzhen Activity design 100.00% enterprises under
Co., Ltd. common control
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, 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
169
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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 that actually
controls the operation of Suzhou SEG.
Half of the directors of the board, the chairman of the board, the general manager, and the operation team of Shenzhen
SEG Longyan New Energy Application and Development Co., Ltd. are appointed by the Company. The Company
actually administers the operation and management of Shenzhen SEG Longyan New Energy Application and
Development Co., Ltd., that is, the Company controls Shenzhen SEG Longyan New Energy Application and
Development Co., Ltd.
Half of the directors of the board, the chairman of the board, the general manager, and the operation team of Shenzhen
SEG Longyan Energy Technology Co., Ltd. are appointed by the Company. The Company actually administers the
operation and management of Shenzhen SEG Longyan Energy Technology Co., Ltd., that is, the Company controls
Shenzhen SEG Longyan Energy Technology Co., Ltd.
Half of the directors of the board, the chairman of the board, the general manager, and the operation team of Shenzhen
SEG Zhongtong Technology Co., Ltd. are appointed by the Company. The Company actually administers the operation
and management of Shenzhen SEG Zhongtong Technology Co., Ltd., that is, the Company controls Shenzhen SEG
Zhongtong Technology Co., Ltd.
Half of the directors of the board, the chairman of the board, the general manager, the finance manager, and the operation
team of Beijing SEG Property Development Co., Ltd. are appointed by the Company. The Company actually administers
the operation and management of Beijing SEG Property Development Co., Ltd., that is, the Company controls Beijing
SEG Property Development Co., Ltd.
The shareholder of Shenzhen SEG Property Management Co., Ltd. (SEG Property Management Co., Ltd.) is Shenzhen
Huguang Investment Co., Ltd. (Huguang Investment, holding a 15% stock), and it is an employee stock ownership
platform of SEG Property Management Co., Ltd. The corporate charter of SEG Property Management Co., Ltd. agrees
on that when the shareholder committee and the board need to make decisions on the corporate operations and
development in accordance with the relevant laws, regulations, and corporate charter, Shenzhen SEG Real Estate
Investment Co., Ltd. (SEG Real Estate) and Huguang Investment are persons acting in concert, and shall take consistent
actions. Consistent actions mean that under the premise of not damaging the corporate interests or the shareholders'
benefits, the shareholder committee and the board shall agree with each other when exercising their rights to propose and
vote on major corporate operation and development issues. The voting rights proportion of SEG Real Estate and its
person acting in concert, Huguang Investment, reaches 60%. The board of SEG Property Management Co., Ltd. includes
five members, among whom two directors are appointed by SEG Real Estate and one by Huguang Investment. The
chairman of the board is appointed by SEG Real Estate. In all, the Company controls SEG Property Management Co.,
Ltd.
(2) Important non-wholly-owned subsidiaries
Unit: yuan
Current dividends Minority shareholders'
Equity proportion of Current profit or loss of
Subsidiary name distributed to minority equity balance at the end
minority shareholders minority shareholders
shareholders of the period
Shenzhen SEG Credit
46.00% 4,235,705.36 91,735,804.77
Co., Ltd.
Changsha SEG
54.00% 1,658,237.10 39,329,950.48
Development Co., ltd.
Shenzhen SEG Baohua
Enterprise Development 33.42% 5,036,930.46 33,838,259.67
Co., Ltd.
Shenzhen SEG Kangle
Enerprise Development 45.00% 5,626,232.59 12,600,000.00 19,806,650.31
Co., Ltd.
170
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
SEG Real Estate
20.98% -7,296,347.57 305,732,789.34
Investment Co., Ltd.
Total 9,260,757.94 12,600,000.00 490,443,454.57
(3) Main financial information of important non-wholly-owned subsidiaries
Unit: yuan
Closing balance Opening balance
Subsidiary
Non-curr Non-curr
name Current Non-current Current Total Current Non-current Current Total
Total assets ent Total assets ent
assets: assets: liabilities: liabilities assets: assets: liabilities: liabilities
liabilities: liabilities:
Shenzhen
4,213,033 468,978,300 473,191,333 273,765,671 273,765,671 46,318,409 480,810,002 527,128,411 336,910,803 336,910,803
SEG Credit
.39 .53 .92 .37 .37 .29 .12 .41 .99 .99
Co., Ltd.
Changsha
SEG 30,965,94 63,163,838. 94,129,784. 21,296,542. 21,296,542. 25,093,857 65,239,972. 90,333,829. 20,571,397. 20,571,397.
Development 5.38 98 36 73 73 .23 01 24 06 06
Co., Ltd.
Shenzhen
SEG Baohua
113,687,0 54,472,180. 168,159,234 66,813,040. 66,907,709. 101,240,83 59,162,353. 160,403,186 47,726,906. 148,221.4 47,875,127.
Enterprise 94,668.65
54.04 01 .05 35 00 2.43 63 .06 59 0 99
Development
Co., Ltd.
SEG Kangle
Enterprise 43,650,13 22,759,038. 66,409,171. 22,394,392. 22,394,392. 84,090,064 18,564,209. 102,654,273 43,142,234. 43,142,234.
0.00
Development 2.39 68 07 61 61 .54 15 .69 31 31
Co., Ltd.
Shenzhen
SEG Real
3,930,520 146,401,440 4,076,922,0 2,360,678,9 853,171,0 3,213,850,0 3,708,887, 150,796,100 3,859,683,7 1,971,156,6 1,112,701 3,083,858,5
Estate
,623.96 .37 64.33 41.16 70.05 11.21 665.73 .38 66.11 23.50 ,900.72 24.22
Investment
Co., Ltd.
Unit: yuan
Amount incurred in the reporting 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
32,739,226.02 9,208,055.13 9,208,055.13 33,405,095.11 49,577,595.91 14,098,803.25 14,098,803.25 -27,673,263.51
Credit Co., Ltd.
Changsha SEG
Development Co., 11,863,928.52 3,070,809.45 3,070,809.45 15,969,637.61 11,509,734.96 3,315,874.06 3,315,874.06 4,093,245.31
Ltd.
Shenzhen SEG
Baohua Enterprise 45,122,397.06 15,071,605.22 14,964,576.80 9,763,277.51 41,085,826.65 14,696,275.26 14,609,914.40 3,096,434.93
Development Co.,
171
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Ltd.
SEG Kangle
Enterprise
26,265,254.11 12,502,739.08 12,502,739.08 -7,575,853.63 26,731,741.98 13,716,475.95 13,716,475.95 -12,882,948.32
Development Co.,
Ltd.
Shenzhen SEG
Real Estate
188,373,969.48 3,888,812.73 3,888,812.73 142,109,994.68 299,745,019.26 80,932,649.90 80,932,649.90 172,683,799.34
Investment Co.,
Ltd.
Other note:
2. Transaction causing changes in the proportion of the owners' equity in subsidiaries with control of subsidiaries
□ Applicable √ Not applicable
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 19.00% Equity method
SEG Co., Ltd.
Shanghai SEG
Electronics Market Shanghai Shanghai Service industry 35.00% Equity method
Co., Ltd.
Shenzhen International
Consumer Electronics
Shenzhen Shenzhen Whole sale 30.00% Equity method
Exchange/Exhibition
Center Co., Ltd.
Note to the difference between the proportion of shareholding and the proportion of voting powers in associates or joint
ventures:
Basis for less than 20% of voting powers with significant impacts or 20% or more of voting powers without significant
impacts:
(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
Shenzhen Shenzhen
International International
Shenzhen Shanghai SEG Shenzhen Shanghai SEG
Consumer Consumer
Huakong SEG Electronics Huakong SEG Electronics
Electronics Electronics
Co., Ltd. Market Co., Ltd. Co., Ltd. Market Co., Ltd.
Exchange/Exhibition Exchange/Exhibition
Center Co., Ltd. Center Co., Ltd.
172
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Closing balance/amount incurred in the current period Opening balance/amount incurred in the previous period
Shenzhen Shenzhen
International International
Shenzhen Shanghai SEG Shenzhen Shanghai SEG
Consumer Consumer
Huakong SEG Electronics Huakong SEG Electronics
Electronics Electronics
Co., Ltd. Market Co., Ltd. Co., Ltd. Market Co., Ltd.
Exchange/Exhibition Exchange/Exhibition
Center Co., Ltd. Center Co., Ltd.
Current assets: 1,102,324,513.76 18,467,222.14 16,346,111.81 766,903,441.43 17,721,103.96 22,840,830.74
Non-current assets 712,652,391.15 151,151.21 169,644.87 546,820,625.68 182,099.19 166,109.34
Total assets 1,814,976,904.91 18,618,373.35 16,515,756.68 1,313,724,067.11 17,903,203.15 23,006,940.08
Current liabilities 765,770,367.89 9,378,227.97 2,016,596.82 509,176,585.61 8,075,870.33 1,188,898.02
Non-current
6,716,471.99 9,378,227.97 2,016,596.82 3,640,118.77
liabilities
Total liabilities 772,486,839.88 9,378,227.97 2,016,596.82 512,816,704.38 8,075,870.33 1,188,898.02
Minority
shareholders' 434,227,465.45 9,240,145.38 14,499,159.86 176,677,423.85
equity
Shareholders'
equity attributable
608,262,599.58 9,240,145.38 14,499,159.86 624,229,938.88 9,827,332.82 21,818,042.06
to the parent
company
Net asset shares
calculated based
115,575,976.55 3,234,050.88 4,349,747.96 118,609,930.69 3,439,566.49 6,545,412.62
on shareholding
ratio
Adjustment 55,942,143.30 -875,946.55 55,942,143.30 -888,008.43
- Others 55,942,143.30 -875,946.55 55,942,143.30 -888,008.43
Book value of
equity investment 171,518,119.85 2,358,104.33 4,349,747.96 174,552,073.99 2,551,558.06 6,545,412.62
in joint ventures
Fair value of
equity investment
1,342,773,988.92 1,591,435,838.72
in joint ventures
with public offer
Operating income 92,777,210.59 2,663,245.69 42,719,787.19 3,084,877.60
Net profit -17,471,098.54 -552,724.94 -7,318,882.20 -26,861,012.87 318,880.23
Other
comprehensive -327.16 240.52
income
Total
comprehensive -17,471,425.70 -552,724.94 -7,318,882.20 -26,860,772.35 318,880.23
income
173
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
(3) Main financial information about important associates
□ Applicable √ Not applicable
(4) Main financial information about unimportant joint ventures and associates
□ Applicable √ Not applicable
(5) Note to major restrictions for capital transfer from joint ventures and associates to the Company
□ Applicable √ Not applicable
(6) Excess deficits incurred by joint ventures and associates
□ Applicable √ Not applicable
(7) Unrecognized commitment related to investment in joint ventures and associates
□ Applicable √ Not applicable
(8) Contingent liabilities related to investment in joint ventures and associates
□ Applicable √ Not applicable
4. Major joint operations
□ Applicable √ Not applicable
5. Equity in the structured entities not incorporated into consolidated statements
□ Applicable √ Not applicable
6. Others
X. Risk disclosure related to financial instruments
The operating activities of the Company may be exposed to a variety of financial risks: credit risks, liquidity risks, and
market risks (mainly currency risks and interest rate risks). The overall risk management plan of the Company is
designed to reduce the potential adverse impact of the unpredictability of the financial market on the financial
performance of the Company.
(I) Credit risk
Credit risks of the Company mainly arise from monetary funds, notes receivable, accounts receivable, and other
receivables. The management has formulated appropriate credit policies and continuously monitored credit risk
exposure.
Monetary funds held by the Company are mainly deposited in state-owned banks and other large and medium-sized
commercial banks, as the management believes that these financial institutions with higher reputation and better
financial standing are at lower credit risks.
For notes receivable, accounts receivable, and other receivables, the Company has formulated relevant policies to control
credit risk exposure. The Company evaluates the credit qualification of customers and sets the corresponding credit
period based on the financial standing of customers, possibility of guarantee from the third party, credit record, and other
174
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
factors such as the present market condition. The Company will regularly monitor customers' credit records. For
customers with bad credit records, the Company will send a payment reminder, shorten the credit period, or cancel the
credit period to ensure that the overall credit risk of the Company is controllable.
As of June 30, 2017, the accounts receivable of the top five customers of the Company account for 50.16% of the total
accounts receivable of the Company.
(II) Liquidity risk
Liquidity risk is the risk that the Company is unable to obtain sufficient funds in a timely manner to meet the need of
business development or to pay due debts and other payment obligations.
The Company has continuously monitored its short-term and long-term capital needs to maintain sufficient cash reserves.
The Company has also continuously monitored compliance with the terms of the Loan Agreement, and obtained
commitments on provision of sufficient reserve funds from major financial institutions to meet short-term and long-term
capital needs.
As of June 30, 2017, the undiscounted cash flows of financial liabilities based on the due date are shown in the following
table:
Item Closing balance
Net book value Original book value Within 1 year 1-2 years 2-5 years Over 5 years
Short-term 545,000,000.00 545,000,000.00 545,000,000.00 --- --- ---
borrowings
Accounts payable 118,802,646.01 118,802,646.01 118,802,646.01 --- --- ---
Advance receipts 1,267,716,176.21 1,267,716,176.21 1,267,716,176.21 --- --- ---
Other payables 1,330,173,622.95 1,330,173,622.95 1,330,173,622.95 --- --- ---
Long-term 1,487,250,000.00 1,487,250,000.00 715,000,000.00 772,250,000.00
borrowings
Subtotal of financial 4,748,942,445.17 4,748,942,445.17 3,976,692,445.17 772,250,000.00 --- ---
liabilities
Continued:
Item Opening balance
Net book value Original book value Within 1 year 1-2 years 2-5 years Over 5 years
Short-term 355,000,000.00 355,000,000.00 355,000,000.00 --- --- ---
borrowings
Accounts payable 31,010,953.20 31,010,953.20 31,010,953.20 --- --- ---
Advance receipts 923,965,168.05 923,965,168.05 923,965,168.05 --- --- ---
Other payables 800,746,883.93 800,746,883.93 800,746,883.93 --- --- ---
Long-term 1,518,000,000.00 1,518,000,000.00 488,000,000.00 1,030,000,000.00
borrowings
Subtotal of financial 3,628,723,005.18 3,628,723,005.18 2,598,723,005.18 1,030,000,000.00 --- ---
liabilities
(III) Market risk
175
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
1. Exchange rate risk
Main operation of the Company takes place in China and its main businesses are settled in RMB. As of June 30, 2017,
the Company held foreign currency 10,813.43 HKD (equivalent to RMB 9,385.19) only and no foreign currency
financial liabilities. Therefore, the overall currency risk is controllable.
2. Interest rate risk
The interest rate risk of the Company mainly arises from bank borrowings. Financial liabilities at a floating rate may
expose the Company to the cash flow interest rate risk while financial liabilities at a fixed rate may expose the Company
to the fair value interest rate risk. The Company determines the relative proportion of fixed rate contracts to floating rate
contracts based on the prevailing market environment.
The financial department of the Company has continuously monitored the interest rate of the Company. The increase in
the interest rate will result in increase in the cost of new interest-bearing debts and interest expenses on interest-bearing
debts not yet paid by the Company at a floating rate and have a material adverse impact on the Company's financial
performance. The management will make adjustments in a timely manner based on the latest market condition, which
can be interest rate swap arrangements to reduce interest rate risks.
XI. 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 469,079.59 469,079.59
(2) Equity instrument investment 469,079.59 469,079.59
II. Non-persistent fair value
- - - -
measurement
176
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
2. Basis for determination of market pricings of sustainable and non-sustainable Level 1 fair value measurements
3. Qualitative and quantitative information on valuation technique and important parameters used for
sustainable and non-sustainable Level 2 fair value measurements
4. Qualitative and quantitative information on valuation technique and important parameters used for
sustainable and non-sustainable Level 3 fair value measurements
5. Information on regulation of opening and closing book values and unobservable parameter sensitivity analysis
during sustainable Level 3 fair value measurement
6. Causes of inter-level conversion within the current period and policy of conversion time point determination
during sustainable fair value measurements
7. Valuation technique changes within the current period and causes thereof
8. Fair values of financial assets and liabilities not measured by fair values
9. Others
The above-mentioed Items 2 to 9 are not applicable.
XII. 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 138,112.16 55.70% 55.70%
Ltd. business
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
□ Applicable √ Not applicable
4. Information on other related parties
Name of other related parties Relation with the Company
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
177
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Shenzhen Si Semiconductors Co., Ltd. Subsidiary of shareholders
Shenzhen SEG Plaza Investment & Development Co., Ltd. Subsidiary of shareholders
Shenzhen talent Training Center Division of the subsidiary of the controlling shareholder
Holding company of the management of the subsidiary of the
Huizhou SEG Property Service Co., Ltd.
controlling shareholder
Guangdong Kaiying Enterprise Management Co., Ltd. Shareholder of the sub-subsidiary of the controlling subsidiary
Original shareholder of the sub-subsidiary of the controlling
Minghao Group
subsidiary
Wang Li Chairman
Zhang Guangliu Director
Cao Xiang Director
Yu Qian Director
Liu Zhijun Director, General Manager, finance chief
Zheng Dan Director, Vice General Manager, Secretary of the Board of Directors
Li Luoli Independent Director
Song Pingping Independent Director
Fan Zhiqing Independent Director
Xu Ning Chairman of the Board of Supervisors
Tang Chongyin Supervisor
Liu Fusong Supervisor
Ru Guiqin Supervisor
5. Information on related transactions
(1) Connected transaction for the purchase and sales of goods and the provision and acceptance of labor services
List of goods/labor services
Unit: yuan
Content of
Amount incurred in Approved transaction Exceeding the Amount incurred in the
Related party connected
the current period quota transaction quota or not previous period
transaction
Shenzhen SEG Group
Purchase of houses 1,948,700.00
Co., Ltd.
Huizhou SEG Property
Property Service Co., management 52,929.00 52,929.00
Ltd. expense
Guangdong Kaiying Project demolition
Enterprise 3,000,000.00
expense
Management Co.,
178
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Ltd.
List of goods/labor services
Unit: yuan
Content of connected Amount incurred in the current Amount incurred in the previous
Related party
transaction period period
Providing property management
Shenzhen SEG Group Co., Ltd. 114,470.94 179,017.80
service
Shenzhen SEG Group Co., Ltd. Selling houses 127,515,337.24
Shenzhen SEG Business Providing property management
410,541.45
Operation Co., Ltd. service
Providing property management
SEG Talent Training Center 102,398.55
service
Shen SEG Hi-tech Industrial Co., Providing property management
91,573.58
Ltd. service
(2) Related trusted management, contracting and mandatory administration and initial contracting
Trusted management/contracting of the Company:
Unit: yuan
Confirmed trust
Name of Name of Type of Pricing basis for income
profit/contracting
entrusting/contract entrusted entrusted/contracted Starting date Ending date from entrusted
profit in the
issuing party party/contractor assets management/contracting
reporting period
SEG Property Underground
Shenzhen SEG December 31,
Development parking plot of SEG May 31, 2000 Trusteeship Agreement 68,759.04
Group Co., Ltd. 2020
Co., Ltd. Plaza
List of entrusted management/contracting:
Unit: yuan
Confirmed
Pricing basis for
Name of Name of Type of entrusting
entrusted
entrusting/contract entrusted entrusted/contracted Start date End date /contracting
management/contracting
issuing party party/contractor assets expenses in the
expenses
reporting period
(3) Leases between the Company and related parties
The Company acts as the lessor:
□ Applicable √ Not applicable
The Company acts as the lessee:
Rental recognized in the current Rental recognized in the
Name of lessee Type of leased assets
period previous period
Shenzhen SEG Group Co., Warehouse with an area of ... 328,074.00
179
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Ltd. 809.26Mon 8F, SEG Plaza
Total ... 328,074.00
(4) Related guarantee
□ Applicable √ Not applicable
(5) Borrowing and lending of related party
Unit: yuan
Related party Amount of borrowing Start date End date Note
Borrowing
As of June 30, 2017, the
balance of borrowing fund
is RMB 32,484,663.00, the
Shenzhen SEG Group Co.,
80,000,000.00 April 18, 2016 April 17, 2018 annual interest rate is
Ltd.
8.00%, and the accrued
interest is RMB
2,754,175.58.
As of June 30, 2017, the
borrowing fund has been
Shenzhen SEG Group Co.,
100,000,000.00 June 17, 2016 June 16, 2018 paid off, and the accrued
Ltd.
interest is RMB
5,739,768.74.
Lending
(6) Asset transfer and debt restructuring of related party
Unit: yuan
Amount incurred in the Amount incurred in the
Related party Content of connected transaction
current period previous period
Shenzhen SEG Group Co., Ltd. transferred to the
Company 55% of the equity of SEG Kangle, 100% of the
equity of SEG Property Development, 100% of the equity
Shenzhen SEG Group
of SegMaker, and 79.02% of the equity of SEG Real
Co., Ltd.
Estate. The underlying assets estimated at RMB
5,157,147,200.00 on the base date of appraisal (March 31,
2016).
(7) Remuneration of key managers
Unit: yuan
Item Amount incurred in the current period Amount incurred in the previous period
Remuneration of key managers 156.35 124.51
180
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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
Huizhou SEG Property
Other receivables 8,444,755.99 9,512,439.19
Service Co., Ltd.
Shenzhen SEG
Other receivables 9,950.00 9,950.00
Computers Co., Ltd.
Shenzhen SEG Group
Other receivables 870,591.63 17,552.93
Co., Ltd.
Shenzhen SEG Business
Other receivables 52,040.36
Operation Co., Ltd.
(2) Payables
Unit: yuan
Project name Related party Period-end book balance Period-end book balance
Dividends payable Shenzhen SEG Group Co., Ltd. 287,100.00 12,088,800.00
Dividends payable Shenzhen SEG Computers Co., Ltd. 662,310.00 662,310.00
Shenzhen SEG Plaza Investment &
Dividends payable 93,080.59 93,080.59
Development Co., Ltd.
Guangdong Kaiying Enterprise
Other payable 3,219,050.00 3,219,050.00
Management Co., Ltd.
Other payable Shenzhen SEG Group Co., Ltd. 749,856,053.54 171,810,341.05
Other payable Shen SEG Hi-tech Industrial Co., Ltd. 250,001.05 203,438.70
Other payable Shen SI Semiconductors Co., Ltd. 30,993.00 30,993.00
Shenzhen SEG Plaza Investment &
Other payable 921,957.48 921,957.48
Development Co., Ltd.
Other payable Minghao Group 68,265,454.60 93,265,454.60
7. Commitment of related parties
8. Others
(1) The Company as the leasee
Names of lessor Type of leased property Rental expense recognized Rental expense recognized
in the current period in the previous period
Shenzhen SEG Commerial 8F, Kangle Building --- 223,448.07
Operation Branch
Shenzhen SEG Group Co., No. 2 Warehouse (66.7 --- 72,036.00
Ltd. M), B1/F, SEG Plaza
Shenzhen SEG Group Co., 48 sets of property with 951,000.00 475,500.00
Ltd. total area of 3,907.13 M
181
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
including Rooms 1-416,
Building 101, SEG
Industrial Zone; 1F, Fibre
Complex Building; 6F,
Nio. 2 workshop; Room
403, Qingyi Complex
Building, Nanyuan Rioad;
and Room 1705, Qingan
Building and so on ,
Shenzhen SEG Group Co., 61 items of property with 3,918,666.00
Ltd. total construction area of
9,672.12 Mincluding 1F,
SEG Kangle Building; 8F,
Kangle Industrial Building,
west area of 8F of No.2
SEG Industrial Building
and etc.; 3F, Building 101,
Shangbu Industrial Zone;
Rooms 506 and etc. of
Building 303, Pengji
Shangbu apartment for the
single; andcorridor on 4F
between Buildings A and
B, No. 101, Zhenxing Road
and so on
Total 4,869,666.00 770,984.07
(2) Subsidiaries of the Company as the lessor:
Name of lessee Type of leased property Rental expense recognized in the Rental expense recognized in the
current period previous period
Shenzhen SEG Talent Training 11F & 4F, Technology Park --- 852,083.55
Center
Shenzhen SEG Group Co., Ltd. 61F & 62F, SEG Plaza 786,891.43 -
Total 786,891.43 852,083.55
XIII. Share-based payment
□ Applicable √ Not applicable
XIV. 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
Shenzhen SEG
Xi'an SEG Xi'an Hairong SEG Nanjing Electronics Wujiang SEG
Electronics Market
Remaining lease term Electronics Market Electronics Market Co., Market Electronics Market
Management Co.,
Co., Ltd. Ltd. Management Co., Co., Ltd.
Ltd.
Ltd.
182
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Shenzhen SEG
Shenzhen SEG
Xi'an SEG Xi'an Hairong SEG Nanjing Electronics Wujiang SEG
Electronics Market
Remaining lease term Electronics Market Electronics Market Co., Market Electronics Market
Management Co.,
Co., Ltd. Ltd. Management Co., Co., Ltd.
Ltd.
Ltd.
Within one year (including one
13,500,000.00 5,289,602.28 --- --- ---
year)
Above one year but within two
13,750,000.00 5,448,290.31 --- --- ---
years (including two years)
Above two years but within
three years (including three 14,000,000.00 5,611,738.98 --- --- ---
years)
Over 3 years 14,187,500.00 1,413,225.21 --- --- ---
Total 55,437,500.00 17,762,856.77 Note *1 Note *2 Note *3
(Continued)
Shunde SEG Suzhou SEG Digital Plaza
Suzhou SEG
Electronics Wuxi SEG Management Co., Ltd.
Intelligent Huizhou Stars Real Estate
Remaining lease term Market Electronics Market
Technology Co., Development Co., Ltd.
Management Co., Co., Ltd
Ltd.
Ltd.
Within one year (including
2,000,000.00 --- --- 12,585,711.40 4,739,170.62
one year)
Above one year but within
two years (including two --- --- --- 12,793,808.48 2,264,638.95
years)
Above two years but within
three years (including three --- --- --- 13,293,241.47
years)
Over 3 years --- --- --- 45,548,288.87
Total 2000,000.00 Note *4 Note *5 84,221,050.22 7,003,809.57
(Continued)
Remaining lease term Suzhou SEG Digital uizhou Qunxing Beijing SEG Property
Plaza Management Real Estate Development Co., Ltd.
Co., Ltd. Development Co.,
Ltd.
Within one year (including one year) 12,585,711.40 4,739,170.62 3,914,826.30
Above one year but within two years 12,793,808.48 2,264,638.95
3,963,126.11
(including two years)
Above two years but within three 13,293,241.47
4,269,024.87
years (including three years)
Over 3 years 45,548,288.87 13,415,991.15
Total 84,221,050.22 7,003,809.57 25,562,968.42
183
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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: According to the cooperation agreement of the parties, Shunde SEG Electronics Market Management Co., Ltd.
agrees that the rents shall be negotiated once a year subject to the supplementary agreement concluded before.
Note *5: 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.
2. Significant acquisitions or restructuring plan
On February 3, 2016, Shenzhen SEG Co., Ltd. and Shenzhen SEG Group Co., Ltd. entered into the Framework
Agreement on Share Issuance and Cash Payment to Acquire Assets. The Company intended to purchase the equity of
target companies held by SEG Group (including 55% of equity of SEG Kangle, 100% of equity of SEG Property, 100%
of equity of SEG SegMaker, and 79.02% of equity of SEG Real Estate) by non-public offering of shares and in cash, and
issue private placement to no more than 10 specific investors to raise supporting funds of no more than RMB 2 billion.
The supporting funds are used to pay the cash considerations of such transaction, the subsequent investment to the
construction project of Xi'an SEG Plaza, and the subsequent investment to the construction project of Shenzhen SEG
International Electronics Industry Center by Shenzhen SEG New Urban Construction Development Co., Ltd.
On January 17, 2017, the Company received the Approval on Shenzhen SEG Co., Ltd.'s Issuing Shares to Shenzhen SEG
Group Co., Ltd. to Acquire Assets and Raise Supporting Funds (Z. J. X. K. [2017] No. 21) issued by the CSRC. On
January 19, 2017, the Company completed the business registration formalities for equity changes in SegMaker, SEG
Kangle, SEG Property Development, and SEG Real Estate Investment. On January 21, 2017, the newly-added share
capital RMB 450,857,239.00 for asset purchase was verified. On February 15, 2017, the Company received the
Acceptance Confirmation of the Application for Share Registration issued by Shenzhen Branch of China Securities
Depository and Clearing Company Limited. As confirmed, 450,857,239 A shares are issued for non-public offering, and
the new shares are restricted outstanding shares listed on March 6, 2017.
As of the reporting date, the Company's non-public offering of shares to no more than 10 specific investors is under way.
3. Other important financial commitments
(1) Information on mortgaged assets
As of the end of the reporting 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 43,315,741.25 Mortgaged to loan from the bank
Shenzhen SEG Co., Ltd. Some floors of Contemporary 51,476,952.71 Mortgaged to loan from the bank
Window
Shenzhen SEG Co., Ltd. 31F, Stars Plaza 9,150,016.33 Mortgaged to loan from the bank
Shenzhen SEG Co., Ltd. Other houses 6,572,813.17 Mortgaged to loan from the bank
Shenzhen SEG Real Estate See houses listed in Note VI (30) 28,232,606.94
Investment Co., Ltd.
184
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Owner of property Name of property Closing net value Remarks
Huizhou Stars Real Estate Some houses of SEG Holiday 119,691,853.07
Development Co., Ltd. Plaza
Total 258,439,983.47
(2) Asset pledge
According to the trust loan contract made by and between our sub-subsidiary Shenzhen SEG New Urban Construction
Development Co., Ltd. (hereinafter referred to as "SEG New Urban") and Bohai International Trust Co., Ltd. (hereinafter
referred to as "Bohai International Trust"), Bohai International Trust shall grant a loan of RMB 500,000,000.00 to SEG
New Urban. According to the Right Pledge Contract made by and between our subsidiary, Shenzhen SEG Real Estate
Investment Co., Ltd. (hereinafter referred to as "SEG Real Estate") and Bohai International Trust, the pledged right is the
52.0461% equity of SEG New Urban held by SEG Real Estate.
(3) Investment
On November 25, 2015, SEG Real Estate, Beijing Zhonghe Agricultural Investment Fund Management Co., Ltd., and
Beijing Smart Agricultural Valley Investment Co., Ltd. concluded an agreement on increasing capital for Shenzhen SEG
Real Estate Investment & Development Co., Ltd. (hereinafter referred to as "SEG Development") and developing the
Pingshan Tiantou Community renovation project. According to the agreement, SEG Real Estate shall contribute RMB
66,670,000.00 cash to SEG Development and hold 40% equity of SEG Development after the contribution. Within 13
months after the agreement takes effect, SEG Real Estate has the right to decide whether to make an actual contribution
to SEG Development. If SEG Real Estate fails to make an actual contribution, SEG Real Estate shall be deemed to waive
its rights as a shareholder rather than breach the agreement. As of June 30, 2017, the Pingshan Tiantou Community
renovation project has not been approved and SEG Real Estate has not contributed to SEG Development.
(4) External guarantee
1) On May 5, 2015, the subsidiary of SEG Real Estate, Huizhou Stars Real Estate Development Co., Ltd. (hereinafter
referred to as "Huizhou Stars") and Huizhou Branch of China Construction Bank (hereinafter referred to as
"Construction Bank") concluded the Maximum Residential Housing (Commercial Housing) Loan Guarantee Contract.
According to the contract, Huizhou Stars shall offer phased joint liability guarantees to all debtors establishing a
mortgage debtor-creditor relationship with Construction Bank by purchasing commercial houses of the "SEG Holiday
Plaza" project at No. 20, Huizhou Avenue between January 23, 2015 and January 23, 2018 until the real estate
proprietorship certificates and encumbrance mortgage registration certificates are handled and submitted to Construction
Bank. Huizhou Stars shall retain 5% deposits, no more than RMB 3,000,000.
2) On May 6, 2016, the subsidiary of SEG Real Estate, SEG New Urban and Futian Sub-branch of Shenzhen Branch of
Bank of Communications (hereinafter referred to as "Bank of Communications") concluded the Agreement on
Residential Housing Mortgage Loan Cooperation. According to the Agreement, SEG New Urban shall offer joint
liability guarantees to all debtors establishing a mortgage debtor-creditor relationship with Bank of Communications by
purchasing residential houses of the "SEG New Urban Plaza" project of SEG New Urban at Sanlian Community, Buji
Street, Longgang District, Shenzhen until the real estate proprietorship certificates and encumbrance mortgage
registration certificates are handled and submitted to Bank of Communications. SEG New Urban does not need to save
deposits in Bank of Communications. The term of cooperation is ten years.
3) On May 6, 2016, the subsidiary of SEG Real Estate, SEG New Urban and Shenzhen Diwang Sub-branch of
Agricultural Bank of China (hereinafter referred to as "Agricultural Bank of China") concluded the Agreement on New
House Mortgage Loan Bank-Enterprise Cooperation. According to the Agreement, SEG New Urban shall offer joint
liability guarantees to all debtors establishing a residential housing debtor-creditor relationship with Agricultural Bank of
China by purchasing commercial houses of the "SEG New Urban Plaza" project of SEG New Urban at Sanlian
Community, Buji Street, Longgang District, Shenzhen until the mortgage registration are handled for the purchased
houses and right certificates are submitted to Agricultural Bank of China. The term of cooperation is one years. When
the term expires, this Agreement can remain in force if both parties agree.
4) On July 4, 2014, the subsidiary of SEG Real Estate, SEG New Urban and Buji Sub-branch of Shenzhen Rural
Commercial Bank (hereinafter referred to as "Rural Commercial Bank") concluded the Agreement on Building Mortgage
Credit Granting. According the Agreement, Rural Commercial Bank shall grant office building and apartment mortgage
credits of no more than RMB 200 million without mortgage deposits to the "SEG New Urban Plaza Phase II" project (to
be checked against the permit for presale) at Sanlian Community, Buji Street, Longgang District, Shenzhen from July 7,
185
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
2016 to July 7, 2019. SEG New Urban shall offer joint liability guarantees until the mortgage registration are handled for
the purchased houses and real estate proprietorship certificates are submitted to Rural Commercial Bank.
5) On May 6, 2016, the subsidiary of SEG Real Estate, SEG New Urban and Shenzhen Futian Sub-branch of Shenzhen
Branch of China Merchants Bank (hereinafter referred to as "China Merchants Bank") concluded the Agreement on
Building Mortgage Loan Cooperation. According to the Agreement, SEG New Urban may advise purchasers to apply
for loans to China Merchants Bank to purchase houses of the "SEG New Urban Plaza Phase II" project at No. 18, Bulong
Road, Buji Sub-district, Longgang District, Shenzhen. The maximum loan amount is 55% of the house price. The loan
term shall be no more than ten years. The interest rate shall be subject to the rules of the People's Bank of China. SEG
New Urban shall offer unconditional and irrevocable joint liability guarantees for the loans granted by China Merchants
Bank to purchasers from the day China Merchants Bank and purchasers conclude loan contracts until the mortgage
registration are handled for the purchased houses and real estate proprietorship certificates or real estate encumbrance
certificates are submitted to China Merchants Bank.
6) On May 6, 2016, the subsidiary of SEG Real Estate, SEG New Urban and Shenzhen Shangbu Sub-branch of Bank of
China (hereinafter referred to as "Bank of China") concluded the Agreement on Building Mortgage Loan Cooperation.
According to the Agreement, Bank of China shall grant mortgage credits of no more than RMB 300 million to the "SEG
New Urban Plaza" project, and the amount of each mortgage loan granted to purchasers shall not exceed 55% of the
house price. The loan term shall be no more than ten years. SEG New Unban shall issue a Guarantee Contract to Bank
of China for each loan applicant. The guarantee period shall last from the day the Contract takes effect until the mortgage
registration are handled for the purchased houses and real estate proprietorship certificates or real estate encumbrance
certificates are submitted to Bank of China. The Contract shall be valid for three years.
7) On Febryary 7, 2017, SEG New Urban, the subsidiary of SEG Real Estate, signed with China Construction Bank Co.,
Ltd. Shenzhen Branch (hereinafter referred to as “Construction Bank Shenzhen Branch) the Contract of Guaranty of
Maximum Amount of Borrowing for Individual Housing (Commercial Buildings), which stipulates therein that no
maximum limit will be fixed in guaranty, which is provided by SEG New Urban from December 31, 2016 to December
31, 2021 in the mode of joint liability based on stages for all the debtors who purchase the individual housing
(commercial buildings) locating at “SEG New Urban Plaza” in Sanlian Community, Buji Sub-distric, Longgang District,
Shenzhen and enter into the relation of mortagage loan with Constructuion Bank Shenzhen Branch, and that the period of
guaranty will commence from the date when Construction Bank Shenzhen Branch signs with the debtor the single
borrowing contract and end on the date when the pledge of the property (pre-sale) enters into force and the relevant
certification documents are checked and accepted after the borrower submits them to Construction Bank Shenzhen
Branch. SEG New Urban Construction Company does not need to deposit any guarantee fund into Construction Bank
Shenzhen Branch, and that the term of multual cooperation is five years.
8) On June 30, 2017, SEG New Urban, the subsidiary of SEG Real Estate, signed with China Citic Bank Co., Ltd.
Shenzhen Branch the Contract of Guaranty of Maximum Amount, which stipulates therein that SEG New Urban provides
the guaranty of maximum amount to the contracts, which form the relationship of debtor-creditor relationship and are
signed between Chian Citic Bank Shenzhen Branch and Shenzhen Zhaocheng Investment Group Co., Ltd. during the
priod from June 30, 2017 to June 13, 2018, and that the maximum amount for guaranteed creditor’s rights is the principal
of 210 million yuan together with its interests and default interests and so on. The term of guaranty is two years
commencing from the date when the performance of liabilities of the main contract expires or the guaranty will be
cancelled on the date when SEG New Urban transfer the ownership of the property purchased by the client to the
purchaser.
9) On July 6, 2017, SEG New Urban, the subsidiary of SEG Real Estate, signed with China Citic Bank Co., Ltd.
Shenzhen Branch (hereinafter referred to as Citic Bank Shenzhen Branch) the Contract of Pledge of Maximum Amount,
which stipulates that SEG New Urban provides the security guarantees of maximum amount to the contracts, which form
the relationship of debtor-creditor relationship and are signed between Chian Citic Bank Shenzhen Branch and Shenzhen
Zhaocheng Investment Group Co., Ltd. during the priod from June 30, 2017 to June 13, 2018, and that the maximum
amount for guaranteed creditor’s rights is the principal of 260 million yuan together with its interests and default
interests and so on. The pawn for the security grarantees is the property of 2F to 5F of Tower 1, SEG New Urban Plaza.
4. Contingencies
(1) Contingencies on the balance sheet date
1) Contingencies arising from pending litigation or arbitration and financial impacts
186
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Amount of
subject Progress of the
Plaintiff Defendant Case Basic information about the case
(RMB case
10,000)
Nanning Haiqi Nanning SEG Dispute over 11.70 Case number: 2016 G. 0102 M. C. No. 4611 The first
Real Estate Electronics Market the lease instance has
Nanning Haiqi alleged that Nanning SEG occupied its
Development Co., Ltd. contract been decided.
shop front located at No. 6, A Zone, 1F, Property
Co., Ltd. ("Nanning SEG"), The plaintiff
Development Plaza, 158 East Renmin Road, Nanning and
("Nanning Shenzhen SEG has appealed.
petitioned the court to order Nanning SEG to pay the
Haiqi") Co., Ltd.
occupancy expense of RMB 37,800, liquidated damages
of RMB 71,300, and attorney fee of RMB 8,000, and that
the Company should bear the joint liability.
Nanning Haiqi Nanning SEG Dispute over 104.19 Case number: 2016 G. 0102 M. C. No. 4612 The first
Real Estate Electronics Market the lease instance has
Nanning Haiqi alleged that Nanning SEG failed to return
Development Co., Ltd., contract been decided.
the house in accordance with the Civil Judgment (2015) X.
Co., Ltd. Shenzhen SEG The plaintiff
M. Y. C. Zi. No. 1393 made by the People's Court of
Co., Ltd. has appealed.
Xingning District, Nanning and the Lease Contract for
Nanning SEG Electronics Market and petitioned the court
to order Nanning SEG to pay for rental and decoration
losses of RMB 996,900 and the attorney fee of RMB
45,000, and that the Company should bear the joint
liability.
Nanning Haiqi Nanning SEG Dispute over 1,026.30 Case number: 2016 G. 0102 M. C. No. 3653 The first
Real Estate Electronics Market the lease Nanning Haiqi signed the Lease Contract for Nanning instance has
Development Co., Ltd., contract SEG Electronics Market with Nanning SEG and the been decided.
Co., Ltd. Shenzhen SEG Company and paid RMB 2,000,000 to Nanning Haiqi for Both the
Co., Ltd. house lease and decoration as specified by the Contract. plaintiff and
As the Contract was dissolved by the Civil Judgment defendant have
(2015) X. M. Y. C. Zi. No. 1393 made by the People's appealed.
Court of Xingning District, Nanning, Nanning Haiqi
requested the Court to order that Nanning SEG should pay
Nanning Haiqi RMB 2,000,000 for decoration losses,
RMB 8,000,000 as liquidated damages, and RMB 263,000
as the attorney fee, and that the Company should bear the
joint liability.
Nanning Nanning SEG Dispute over 246.98 Case number: 2016 G. 0102 M. C. No. 3654 Nanning SEG
Yuanpeng Electronics Market the property is the
Nanning Yuanpeng, Nanning SEG, and the Company
Property Service Co., Ltd., service prevailing
signed the Property Management Contract. As Nanning
Co., Ltd. Shenzhen SEG contract party. The
SEG failed to pay the property management fee in due
("Nanning Co., Ltd. plaintiff has
time, Nanning Yuanpeng requested the Court to order that
Yuanpeng") appealed.
Nanning SEG should pay Nanning Yuanpeng RMB
1,316,200 as the property management fee, RMB
1,070,100 as liquidated damages for delay, and RMB
83,500 as the attorney fee.
Nanning SEG China Dispute over 88.64 Case number: 2016 G. 0102 M. C. No. 672 The case has
Electronics Construction Bank the lease been registered
As CCB Taoyuan Sub-branch breached the Lease
Market Co., Ltd. Nanning Taoyuan contract but not heard.
Contract for Nanning SEG Electronics Market, refused to
Sub-branch ("CCB
pay the rent, and unreasonably occupied the shop front,
Taoyuan
Nanning SEG petitioned the court to order CCB Taoyuan
Sub-branch")
Sub-branch to vacate and return the shop front and pay the
rent and property management fee in arrears and
187
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
liquidated damages of RMB 886,400.
839.41 Case number: (2017) Y. 0304 M. C. No. 5092 The first
instance has
Shenzhen SEG As Shenzhen Wonder Industry Co., Ltd. delayed the
Dispute over been held and
Industrial Shenzhen Wonder payment for goods, SEG Industrial petitioned the court to
the purchase pending.
Investment Co., Industry Co., Ltd., order the former to make payment for goods of RMB
and sales
Ltd. ("SEG Liu Guiyun, Liu Yu 7,899,800 as of January 2017 and overdue fine of RMB
contract
Industrial") 514,300, and that Liu Guiyun and Liu Yu should bear the
joint liability.
Shenzhen Yixin The first
Zhongtian instance has
Technology Co., been held and
Ltd., Zhe Shaojun, pending.
Case number: (2017) Y. 0304 M. C. No. 5088
Zhao Xiaoyan,
Shenzhen SEG Dispute over As Shenzhen Yixin Zhongtian Technology Co., Ltd.
Xinjiang Jiazhao
Industrial the purchase delayed the payment for goods, SEG Industrial petitioned
Hengye Electronic 1,480.57
Investment Co., and sales the court to order the former to make payment for goods of
Technology Co.,
Ltd. contract RMB 13,241,700 as of January 2017 and overdue fine of
Ltd., Xinjiang
RMB 1,564,000.
Zhongdi
Communication
Equipment Co.,
Ltd.
Shenzhen Comnet The case has
Technology Co., been registered
Ltd., Xiao Case number: (2017) Y. 0304 M. C. No. 7976 but not heard.
Shenzhen SEG Qingshan, Zhou Dispute over As Shenzhen Comnet Technology Co., Ltd. delayed the
Industrial Ronghua, Anhua the purchase
515.54 payment for goods, SEG Industrial petitioned the court to
Investment Co., Meishan Small and sales order the former to make payment for goods of RMB
Ltd. Loan Co., Ltd., contract 5,144,200 as of the end of February 2017 and overdue fine
Shenzhen Baiyide of RMB 11,200.
Technology Co.,
Ltd.
Shenzhen Runneng
Digital Technology
Co., Ltd., Xiao Case number: (2017) Y. 0304 M. C. No. 7977
Shenzhen SEG Qingshan, Zhou Dispute over As Shenzhen Runneng Digital Technology Co., Ltd.
The case has
Industrial Ronghua, Anhua the purchase
1,534.50 delayed the payment for goods, SEG Industrial petitioned been registered
Investment Co., Meishan Small and sales the court to order the former to make payment for goods of but not heard.
Ltd. Loan Co., Ltd., contract RMB 15,251,100 as of the end of February 2017 and
Shenzhen Baiyide overdue fine of RMB 93,900.
Technology Co.,
Ltd.
Beijing SEG Beijing Furao Real Dispute over 2004.74 Case number: (2016) J. 0102. M. C. No. 21435 The case has
Property Estate the lease Beijing SEG Property and Beijing Furao entered into the been registered
Development Development Co., contract Beijing House Lease Contract on May 29, 2015. Beijing but not heard.
Co., Ltd. Ltd. SEG Property has fulfilled obligations hereunder, but
("Beijing SEG Beijing Furao still fails to deliver houses at the south
Property") section to Beijing SEG Property, which constituted a
fundamental breach of contract. Beijing SEG Property
requested the court to confirm that the Beijing House
Lease Contract and the Supplementary Agreement had
been rescinded on July 14, 2016 and to order Beijing
Furao to pay the liquidated damages of RMB 8,047,400
188
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
and return double the deposit of RMB 12,000,000.
1. Issued letter of guarantee (L/G) and letter of credit (L/C)
L/G No. Beneficiary Bank L/G amount Unused amount Due date
GC1783916000848 Shenzhen Tongchan Group Bank of 3,510,192.00 3,510,192.00 2018.4.22
Co., Ltd. China,
Shenzhen
branch
Except the above matters, as of June 30, 2017, the Company has no significant matters or contingencies to disclose.
(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.
XV. Events after the balance sheet date
1. Major non-adjustment items
Unit: yuan
Impacted amount of the Reason for failure to
Item Content financial condition and estimate the impacted
operating result amount
At the 23rd (Extraordinary) Session of the 7th Board of Directors
held on August 9, 2017, the Resolution on Investing in Shenzhen
SEG Yicheng Science and Technology Co., Ltd. and Running SEG
Maker Education Technology Experience Museum was
deliberated on and passed. The Company intends to contribute
with Shenzhen Yingmengxin Science and Technology Co., Ltd.
Significant
(hereinafter referred to as "Yingmengxin") RMB 10,000,000 to
investment
Shenzhen SEG Yicheng Science and Technology Co., Ltd.
(hereinafter referred to as "SEG Yicheng", to be registered with
the Administration for Industry & Commerce) and SEG Maker
Education Technology Experience Museum. The Company will
subscribe RMB 5,100,000 (51% share), and Yingmengxin will
subscribe RMB 4,900,000 (49% share).
2. Profit distribution
□ Applicable √ Not applicable
189
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
3. Sales return
□ Applicable √ Not applicable
4. Note to other matters after the balance sheet date
□ Applicable √ Not applicable
XVI. Other important matters
1. Accounting error correction in the previous period
2. Debt restructuring
3. Assets exchange
4. Pension plan
5. Termination of business
6. Information on branches
7. Major transactions and matters influencing decision-making of investors
The above-memntioned Items 1 to 7 are not applicable.
8. 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). At the 2nd extraordinary general meeting (2016) on September 3, 2016, the Company approved
the Proposal on Purchase of Financial Products Using Idle Funds of the Company, and extended the investment term to
June 30, 2019 (calculated from the time when financial products are purchased).
As of June 30, 2017, 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
Ltd. Market Co., Ltd
Co., Ltd. Development Co., Ltd. Co., Ltd.
Amount 10,800.00 1,000.00 8,000.00 800.00 1,940.00
Continued:
Shenzhen SEG
SEG Kangle
Xi'an Electronics Shenzhen SEG Credit Changsha SEG Nanjing Electronics
Company name Enterprise
Market Co., Ltd. Co., Ltd. Development Co., Ltd. Market Management
Development Co., Ltd.
Co., Ltd.
Amount 1,100.00 100.00 2,700.00 360.00 4,200.00
190
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Continued:
SEG Property Development Co., Shenzhen SegMaker Co., Shenzhen SEG Real Estate
Company name Total
Ltd. Ltd. Investment Co., Ltd.
Amount 8,000.00 8,048.00 170.00 47,218.00
XVII. Notes to the parent company financial statements
1. 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
an significant amount
individually, for which bad 7,163,876.44 71.97% 7,163,876.44 100.00% 7,163,876.44 77.07% 7,163,876.44 100.00%
debt provision is separately
accrued
Accounts receivable with
bad debt provision accrued
1,084,566.74 10.90% 1,084,566.74 426,069.15 4.58% 426,069.15
based on credit risk feature
combinations
Accounts receivable with
an insignificant amount
individually, for which bad 1,705,306.44 17.13% 1,705,306.44 100.00% 1,705,306.44 18.35% 1,705,306.44 100.00%
debt provision is separately
accrued
Total 9,953,749.62 100.00% 8,869,182.88 89.10% 1,084,566.74 9,295,252.03 100.00% 8,869,182.88 95.42% 426,069.15
Accounts receivable with single significant amount individually, for which bad debt provision is separately accrued at the end of period:
√ Applicable □ Not applicable
Accounts receivables (by Closing balance
company) Accounts receivables Bad debt provision Percentage Reason for provision
Unable to be recovered for
Jiangsu Unicom 3,092,011.09 3,092,011.09 100.00%
aging of over 5 years
Shenzhen Liyuanshun Unable to be recovered for
1,906,865.35 1,906,865.35 100.00%
Industrial Co., Ltd. aging of over 5 years
Shanghai Tianci Industrial Unable to be recovered for
899,000.00 899,000.00 100.00%
Co., Ltd. aging of over 5 years
Zhejiang Financial Unable to be recovered for
786,000.00 786,000.00 100.00%
Information Co., Ltd aging of over 5 years
Sichuan Huiyuan Unable to be recovered for
480,000.00 480,000.00 100.00%
Electronics Co., Ltd. aging of over 5 years
191
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Total 7,163,876.44 7,163,876.44 -- --
Among the combinations, accounts receivable for which bad debt provision is computed by aging method:
√ Applicable □ Not applicable
Unit: yuan
Closing balance
Aging
Accounts receivables Bad debt provision Percentage
Sub-item within 1 year
Within 1 year 1,084,566.74
Subtotal of accounts aged under 1
1,084,566.74
year
Total 1,084,566.74
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:
Accounts receivable with an insignificant amount individually, for which bad debt provision is separately accrued at the
end of period:
Closing balance
Company name
Accounts receivables Bad debt provision Percentage (%) Reason for provision
Shenzhen Walmart 198,348.57 198,348.57 100.00 Unable to be recovered for
Zhujiang Department Store aging of over 5 years
Shenzhen Shenfang 162,985.00 162,985.00 100.00 Unable to be recovered for
Department Store aging of over 5 years
Jiang Weibin 126,925.35 126,925.35 100.00 Unable to be recovered for
aging of over 5 years
Shenzhen Jinhuasheng 85,000.00 85,000.00 100.00 Unable to be recovered for
Electronics Company aging of over 5 years
Other 43 units 1,132,047.52 1,132,047.52 100.00 Unable to be recovered for
aging of over 5 years
Total 1,705,306.44 1,705,306.44 100.00 -
(2) Accrued, recovered or reversed bad debt provision in the current period
□ Applicable √ Not applicable
(3) Accounts receivable written off in the current period
□ Applicable √ Not applicable
(4) Accounts receivable with top 5 closing balance collected based on debtors
192
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Percentage in the total amount
Company name Closing balance Accrued bad debt provision
of accounts receivable
Jiangsu Unicom 3,092,011.09 31.06 3,092,011.09
Shenzhen Liyuanshun Industrial Co., Ltd. 1,906,865.35 19.16 1,906,865.35
Shanghai Tianci Industrial Co., Ltd. 899,000.00 9.03 899,000.00
Zhejiang Financial Information Co., Ltd 786,000.00 7.90 786,000.00
Sichuan Huiyuan Electronics Co., Ltd. 480,000.00 4.82 480,000.00
Total 7,163,876.44 71.97 7,163,876.44
(5) Account receivable with its recognition terminated due to transfer of financial assets
□ Applicable √ Not applicable
(6) Assets and liabilities due to transfer of account receivable
□ Applicable √ Not applicable
2. 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
Accounts
receivables with
single significant 14,227,563. 14,227,563.8 14,227,563.8
1.70% 100.00% 14,227,563.86 1.90% 100.00%
amount and single 86 6 6
bad debt
provision
Accounts
receivables with
bad debt
812,775,385 812,767,906. 724,658,970.
provision accrued 96.94% 7,478.53 724,666,448.71 96.58% 7,478.53
.30 77 18
based on credit
risk feature
combinations
Accounts
receivables with
an insignificant
amount
11,373,065.5 11,373,065.5 11,373,065.5
individually, for 1.36% 100.00% 11,373,065.58 1.52% 100.00%
8 8 8
which bad debt
provision is
separately
accrued
838,376,014 25,608,107.9 812,767,906. 25,608,107.9 724,658,970.
Total 100.00% 3.05% 750,267,078.15 100.00% 3.41%
.74 7 77 7 18
193
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Other receivables with single 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
Shenzhen Lianjing Trade Unable to be recovered for
5,697,287.51 5,697,287.51 100.00%
Co., Ltd. aging of over 5 years
Total 14,227,563.86 14,227,563.86 -- -
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 1 year
Within 1 year 7,513,706.16
Subtotal of accounts aged under 1
7,513,706.16
year
1-2 years 131,806.58 6,590.33 5.00%
2-3 years 8,882.00 888.20 10.00%
Total 7,654,394.74 7,478.53 0.10%
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
Accounts receivable with an insignificant amount individually, for which bad debt provision is separately accrued at the
end of period:
Closing balance
Company name
Accounts receivables Bad debt provision Percentage (%) Reason for provision
Shenzhen Tuopu Industrial Unable to be recovered for
3,281,387.96 3,281,387.96 100.00
Co., Ltd. aging of over 5 years
Unable to be recovered for
Yunsen Trade Co., Ltd. 1,668,343.74 1,668,343.74 100.00
aging of over 5 years
Shenzhen Shoujia Industrial Unable to be recovered for
1,611,184.04 1,611,184.04 100.00
Development Co., Ltd. aging of over 5 years
Shenzhen Jimeng Industrial 1,358,912.37 1,358,912.37 100.00 Unable to be recovered for
194
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Development Co., Ltd. aging of over 5 years
Unable to be recovered for
Other 18 units 3,453,237.47 3,453,237.47 100.00
aging of over 5 years
Total 11,373,065.58 11,373,065.58 100.00 -
(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.
(3) Other receivable written off in the current period
□ Applicable √ Not applicable
(4) Classification of other receivables by nature
Unit: yuan
Nature of receivables Period-end book balance Period-end book balance
Receivables of related parties 803,781,680.78 720,586,858.45
Creditor's right transfer cost 23,457,016.62 25,600,629.44
Imprest 231,993.20 929,258.20
Deposit and security deposit 1,339,309.78 1,338,309.78
Others 9,566,014.36 1,812,022.28
Total 838,376,014.74 750,267,078.15
(5) Other receivables with top 5 closing balance collected based on debtors
Unit: yuan
Percentage in the total
Closing balance of bad
Company name Nature of payables Closing balance Aging amount of closing balance
debt provision
of other receivables
Nantong SEG Times
Plaza Development Co., Loans and interests 750,463,182.67 Within 4 years 89.51%
Ltd.
Shenzhen SEG
Industrial Investment Loans and interests 42,048,490.03 Over 5 years 5.02%
Co., Ltd.
Suzhou SEG Digital
Incomings and
Plaza Management Co., 10,000,000.00 1-2 years 1.19%
outgoings
Ltd.
Yangjiang Yuntong Debt restructuring of
8,530,276.35 Over 5 years 1.02% 8,530,276.35
Grease Co., Ltd. SEG Orient
Shenzhen Lianjing Creditor's incomings
5,697,287.51 Over 5 years 0.68% 5,697,287.51
Trade Co., Ltd. and outgoings
Total - 816,739,236.56 - 97.42% 14,227,563.86
(6) Accounts receivable involving government subsidies
□ Applicable √ Not applicable
(7) Other receivable with its recognition terminated due to transfer of financial assets
195
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
□ Applicable √ Not applicable
(8) Assets and liabilities due to transfer or increase of other receivable
□ Applicable √ Not applicable
Other note:
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
1,238,744,056.16 1,238,744,056.16 269,935,426.24 269,935,426.24
subsidiaries
Investment in
cooperative
178,225,972.14 178,225,972.14 183,649,044.67 183,649,044.67
enterprises and
joint ventures
Total 1,416,970,028.30 1,416,970,028.30 453,584,470.91 453,584,470.91
(1) Investment in subsidiaries
Unit: yuan
Closing
Accrued
Increase in the Decrease in the balance of
Investee Opening balance Closing balance impairment
current period current period impairment
provision
provision
Shenzhen SEG
Baohua
Enterprise 20,512,499.04 20,512,499.04
Development
Co., Ltd.
Shenzhen SEG
Industrial
29,181,027.20 29,181,027.20
Investment
Co., Ltd.
Changsha SEG
Development 69,000,000.00 69,000,000.00
Co., Ltd.
Shenzhen SEG
Electronics
Market 2,100,000.00 2,100,000.00
Management
Co., Ltd.
Suzhou SEG
Electronics
1,350,000.00 1,350,000.00
Market Co.,
Ltd.
Xi'an SEG 1,950,000.00 1,950,000.00
196
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Closing
Accrued
Increase in the Decrease in the balance of
Investee Opening balance Closing balance impairment
current period current period impairment
provision
provision
Electronics
Market Co.,
Ltd.
Shenzhen SEG
Credit Co., 59,251,900.00 59,251,900.00
Ltd.
Shenzhen SEG
Nanjing
Electronics
20,000,000.00 20,000,000.00
Market
Management
Co., Ltd.
Xi'an Hairong
SEG
Electronics 1,530,000.00 1,530,000.00
Market Co.,
Ltd.
Wujiang SEG
Electronics
1,530,000.00 1,530,000.00
Market Co.,
Ltd.
Wuxi SEG
Electronics
1,530,000.00 1,530,000.00
Market Co.,
Ltd
Shunde SEG
Electronics
Market 6,000,000.00 6,000,000.00
Management
Co., Ltd.
Nanning SEG
Electronics
Market 8,000,000.00 8,000,000.00
Management
Co., Ltd.
Nantong SEG
Times Plaza
30,000,000.00 30,000,000.00
Development
Co., Ltd.
Suzhou SEG
Digital Plaza
8,000,000.00 8,000,000.00
Management
Co., Ltd.
Xi'an
197
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Closing
Accrued
Increase in the Decrease in the balance of
Investee Opening balance Closing balance impairment
current period current period impairment
provision
provision
Fengdong New
Town SEG
Times Plaza
Real Estate
Co., Ltd.
Suzhou SEG
Intelligent
10,000,000.00 10,000,000.00
Technology
Co., Ltd.
Shenzhen SEG
Longyan
Energy 82,500,000.00 82,500,000.00
Technology
Co., Ltd.
SEG
Lianzhong
Internet 8,250,000.00 8,250,000.00
Technology
Co., Ltd.
Shenzhen SEG
Zhongtong
980,000.00 980,000.00
Technology
Co., Ltd.
Shenzhen
SegMaker Co., 238,750,258.57 238,750,258.57
Ltd.
SEG Kangle
Enterprise
34,025,375.47 34,025,375.47
Development
Co., Ltd.
SEG Property
Development 61,749,318.18 61,749,318.18
Co., Ltd.
Shenzhen SEG
Real Estate
542,553,677.70 542,553,677.70
Investment
Co., Ltd.
Total 269,935,426.24 877,078,629.92 - 1,238,744,056.16
198
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
(2) Investment in cooperative enterprises and joint ventures
Unit: yuan
Increase/Decrease of the year
Investment Closing
Opening profit or loss Adjustment of Issued Closing balance of
Investee Other Accrued
balance Additional Negative confirmed other cash balance impairment
equity impairment Others
investment investment under the comprehensive dividends provision
changes provision
equity income or profits
method
1. Cooperative enterprise
2. Associate
Shanghai SEG
Electronics Market 2,551,558.06 -193,453.73 2,358,104.33
Co., Ltd.
Shenzhen Huakong
174,552,073.99 -3,033,891.98 -62.16 171,518,119.85
SEG Co., Ltd.
Shenzhen
International
Consumer
6,545,412.62 -2,195,664.66 4,349,747.96
Electronics
Exchange/Exhibition
Center Co., Ltd.
Subtotal 183,649,044.67 -5,423,010.37 -62.16 178,225,972.14
Total 183,649,044.67 -5,423,010.37 -62.16 178,225,972.14
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 48,543,360.95 35,675,486.34 51,626,681.87 36,890,488.44
Total 48,543,360.95 35,675,486.34 51,626,681.87 36,890,488.44
5. Investment income
Unit: yuan
Item Amount incurred in the current period Amount incurred in the previous period
Long-term equity investment income by the cost
45,941,526.55 -4,826,750.85
method
Long-term equity investment income by the
-5,423,010.37 32,747,355.51
equity method
Others 14,401,051.12 17,841,726.10
199
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Item Amount incurred in the current period Amount incurred in the previous period
Total 54,919,567.30 45,762,330.76
XV. Supplemental information
1. Details on non-recurring profit or loss
√ Applicable □ Not applicable
Unit: yuan
Item Amount Remarks
Profit or loss from disposal of non-current assets -111,492.83
Government subsidies included in current profit or loss (except
those closely related with corporate business and enjoyed 3,716,243.11
according to national standards or certain quota)
Fund appropriation charges for non-financial entities recognized
1,676,532.33
in current profit or loss
Current net profit or loss of subsidiaries arising from merger of
enterprises under common control from the beginning of the 10,632,970.72
period to the date of merger
Trustee fee from entrusted operation 68,759.04
Other non-operating income and expenses except the
10,467,166.60
above-mentioned items
Less: Amount of affected income tax 3,242,832.45
Influenced amount of minority shareholders' equity 3,977,444.37
Total 19,229,902.15 --
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 report period Weighted average ROE
Basic EPS (Yuan/Share) Diluted EPS (Yuan/Share)
Net profit attributable to common shareholders of the
2.67 0.0405 0.0405
Company
Net profit attributable to common shareholders of the
1.77 0.0265 0.0265
Company after deduction of recurring profit or loss
200
Fulltext of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
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.
201
Full text of Semi-Annual Report 2017 of Shenzhen SEG Co., Ltd.
Chapter 11 Documents Available for Reference
(1) The Financial Statements with signatures and seals of the legal person, the responsible person of accounting work and
the responsible person of the accounting institution;
(2) The original copies of all the files and the manuscripts of public notices of the Company which were disclosed on the
newspapers specified by CSRC in the reporting period.
202
