- 1 -
深 圳 赛 格 股 份 有 限 公 司
SSHEENNZZHEENN SSEEG CCO.. ,, LLTTDD..
二○ 一○ 年半年度报告
SSEEMII --AANNNNUUAALL RREEPPORRTT 22001100
IMPORTANT NOTICE
The Board of Directors and Supervisory Committee of Shenzhen SEG Co., Ltd.
(hereinafter referred to as the Company) and its directors, supervisors and senior
executives hereby confirm that there are not any fictitious statements, misleading
statements, or important omissions carried in this report, and shall take all
responsibilities, individual and/or joint, for the reality, accuracy and completeness of
the whole contents.
No director, supervisor or senior executive is unable to guarantee or holds objection to
the truth, accuracy, and completeness of the Semi-annual Financial Report.
Chairman of the Company Mr. Wang Chu, Deputy General Manager and Person in
Charge of Financial Affairs Mr. Li Lifu and Director of Financial Department Mr.
Ying Huadong hereby confirm that the financial report enclosed in this semi-annual
report is true and complete.
The semi-annual financial report of the Company has not been audited by the CPAs.
This report was prepared in both Chinese and English languages. Should there be any
difference in interpretation between the two versions, the Chinese version shall
prevail.
Information Disclosure Date: August 27, 2010- 2 -
CONTENTS
PARAPHRASE------------------------------------------------------------------------------------------------
I. COMPANY PROFILE------------------------------------------------------------------------------------
II. CHANGES IN SHARE CAPITAL AND PARTICULARS ABOUT SHARES HELD BY
MAIN SHAREHOLDERS-----------------------------------------------------------------------------------
III. PARTICULARS ABOUT DIRECTORS, SUPERVISORS, SENIOR EXECUTIVES----
IV. REPORT OF THE BOARD OF DIRECTORS ----------------------------------------------------
V. SIGNIFICANT EVENTS-------------------------------------------------------------------------------
VI. FINANCIAL REPORT (UN-AUDITED) ----------------------------------------------------------
VII. DOCUMENTS FOR REFERENCE----------------------------------------------------------------- 3 -
PARAPHRASE
Unless specified otherwise in the report, the following abbreviations possess the
meanings as follows:
Glass shell: glass bulb of vacuum display devices.
CRT: monitor of cathode ray tube
STN-ITO: conductive coated glass, which is the product of transparent electrode
matrix for driving liquid crystal (LCD)
The Company, Company: Shenzhen SEG Co., Ltd.
SEG Group: Shenzhen SEG Group Co., LTD.
ST SAMSUNG: Shenzhen SEG SAMSUNG Co., Ltd.
SEG Storage and Transportation: Shenzhen SEG Storage and Transportation Co., Ltd.
SEG GPS: Shenzhen SEG GPS Scientific Navigations Co., Ltd.
SEG Baohua: Shenzhen SEG Baohua Enterprise Development Co., Ltd.
SEG Communication: Shenzhen SEG Communication Co., Ltd.
Xi’an SEG: Xi’an SEG Electronics Market Co., Ltd.
Chongqing SEG: Chongqing SEG Electronics Market Co., Ltd.
Suzhou SEG: Suzhou SEG Electronics Market Management Co., Ltd.
ST Zero-Seven: Shenzhen Zero-Seven Co., Ltd. the former Shenzhen SEG Dasheng
Co., Ltd.
SEG High-technology: Shenzhen SEG High-technology Investment Co., Ltd.
SEG Industry: Shenzhen SEG Industry Investment Co., Ltd.
SEG Project: Shenzhen SEG Project Industry Co., Ltd.
Longgang SEG: Shenzhen Electronics Market Management Co., Ltd.
Changsha SEG: the former Changsha Xinxing Development Co., Ltd. renamed as
“Changsha SEG Development Co., Ltd.”
Changsha Mellow Orange Hotel: Shenzhen Mellow Orange Business Hotel Co., Ltd.
Changsha Branch
Friendship Group: Xinjiang Friendship Group Co., Ltd.
Shenzhen SASAB: State-owned Assets Supervision and Admission Bureau of
Shenzhen People’s Government
CSRC: China Securities Regulatory Commission
Shenzhen Bureau of CSSC: Shenzhen Bureau of the CSRC: China Securities
Regulatory Commission
The Articles of Association: The Articles of Association of Shenzhen SEG Co., Ltd.
Except for the specific explanations, the monetary amount quoted in the report is in
RMB.- 4 -
CHAPTER I. COMPANY PROFILE
I. Legal name of the Company
In Chinese: 深圳赛格股份有限公司
In English: SHENZHEN SEG CO., LTD.
II. Legal Representative: Wang Chu
III. Secretary of the Board of Directors: Zheng Dan
Representative of Securities Affairs: Fan Chonglan
Contact Address: 31/F, Tower A, Qunxing Plaza, Huaqiang Road (N), Futian
District, Shenzhen
Tel: (86) 755-8374 7939
Fax: (86) 755-8397 5237
E-mail: segcl1@segcl.com.cn
IV. Registered Office Address: 31/F, Tower A, Qunxing Plaza, Huaqiang Road (N),
Futian District, Shenzhen
Office Address of the Company: 31/F, Tower A, Qunxing Plaza, Huaqiang Road
(N), Futian District, Shenzhen
Post Code: 518028
The Company’s Internet Website: http://www.segcl.com.cn
E-mail: seggf@segcl.com.cn
V. Newspapers Chosen for Disclosing Information of the Company:
China Securities Journal, Securities Times and Hong Kong Commercial Daily;
Securities Times is the domestic information disclosure paper approved to be
increased by the Company’s 1 temporary meeting of 5th Session of the Board of
Directors on May 28, 2010.
Internet Website Designated by CSRC for Publishing the Semi-annual Report:
http://www.cninfo.com.cn (the website of Juchao Zixun)
The Company’s Internet Website: http://www.segcl.com.cn
The Place Where the Semi-annual Report is Prepared and Placed:
Secretariat of Board of Directors, 31/F, Tower A, Qunxing Plaza, Huaqiang Road
(N), Futian District, Shenzhen
VI. Stock Exchange Listed with: Shenzhen Stock Exchange
Short Form of the Stock: A-share SHEN SEG 000058
B-share SHEN SEG-B 200058
VII. Other Relevant Information:
(I)Initial registration date: July 16, 1996
Initial registration place: 16/F, Baohua Tech. Bldg., Huaqiang Road (N), Futian
District, Shenzhen- 5 -
(II)The date of the registration change: June 9, 2003
The registered address is changed to: 31/F, Tower A, Qunxing Plaza, Huaqiang
Road (N), Futian District, Shenzhen
(III)The date of registration change: July 6, 2005
The business scope is changed to: domestic commerce, material supply and sales
(excluding specially operated, specially controlled and specially sold goods),
establishment of industries (specific projects to be declared additionally), economic
information consultation, property rental, property brokerage, setup of the specific
SEG electronics market (specific market license to be applied for additionally)
(IV)The registered date of the change: September 27, 2006
Changed registered capital: RMB 784,799,010
Changed paid-up capital: RMB 784,799,010
(V)Date of change in registered business license number of corporate legal person:
August 28, 2008
Registration code of enterprise legal person’s business license: 440301103573251
(VI)Registration code of taxation: 440301279253776 (National Tax)
440304279253776 (Local Tax)
VIII. Major financial data and indexes
Unit: RMB
At the end of this
report period
At this period-end
of last year
Increase/decrease at the end of
this report period compared
with that of last year (%)
Total assets 1,393,700,513.68 1,359,490,387.43 2.52%
Owners’ equity attributable to
shareholders of the listed
company
1,053,275,088.10 1,015,659,488.47 3.70%
Share capital 784,799,010.00 784,799,010.00 0.00%
Net assets attributable to
shareholders of the listed
company（RMB/Share）
1.3421 1.2942 3.70%
This report period
(Jan. to Jun.)
The same period
of last year
Increase/decrease in this report
period year-on-year (%)
Total operation income 178,297,428.20 137,882,485.07 29.31%
Operation profit 39,086,023.77 -140,670,155.49 -
Total of profit 39,206,273.43 -138,740,902.33 -
Net profit attributable to
shareholders of the listed
company
26,896,844.71 -146,083,519.02 -
Net profit attributable to 24,568,074.69 -197,745,812.20 -- 6 -
shareholders of the listed
company after deduction of
non-recurring loss/gain
Basic earnings per share
(RMB/share)
0.0343 -0.1861 -
Diluted earnings per share
(RMB/share)
0.0343 -0.1861 -
Return ratio of net assets (%) 2.60% -12.00% 14.60%
Net cash flow from operation
activities
28,248,913.00 22,313,372.91 26.60%
Net cash flow per share from
operation activities (RMB/share)
0.0360 0.0284 26.76%
Items of non-recurring gains and losses deducted and amounts:
√Applicable □Inapplicable
Unit: RMB
Items of non-recurring gains and losses Amount
Gains and losses from the disposal of non-current asset,
including the write-off of asset impairment already drawn
169,769.72
Sound value change gain/loss from holding tradable financial
assets and financial liabilities and investment return from
disposal of tradable financial assets, liabilities, and financial
assets available for sale (valid hedging business related to the
Company’s normal operation business excluded)
2,947,815.81
Other non-operating income and expense excluding the
aforementioned business
-49,520.06
Influences on minority shareholders’ gains/losses -63,195.71
Impact on income tax -676,099.74
Total 2,328,770.02
Item of measurement on sound value
√Applicable □Inapplicable
Unit: RMB
Item
Amount at
period-beginn
ing
Amount at
period-end
Changes in
current period
Influences on
gains and
losses of
current period
Influences
on equity of
current
period
Financial
asset
available for
sales
3,843,571.87 623,821.24 -3,219,750.63 2,299,296.33 425,279.51- 7 -
Supplementary statement to profit statement
Return rate on equity Earnings per share
Profit in the report period Fully diluted
Weighted
average
Basic earnings
per share
Diluted
earnings per
share
Net profit attributable to common
shareholders of the Company 2.55% 2.60% 0.0343 0.0343
Net profit attributable to common
shareholders of the Company after
deducting the non-recurring gains and
losses 2.33% 2.37% 0.0313 0.0313
IX. The explanation on the difference as calculated based on CAS and IAS
CAS IAS
Net profit 26,896,844.71 26,896,844.71
Net assets 1,053,275,088.10 1,053,275,088.10
Explanation on differences Nil
CHAPTER II. CHANGES IN SHARE CAPITAL AND
PARTICULARS ABOUT SHARES HELD BY MAIN
SHAREHOLDERS
(I) Particulars about changes in share capital
1. Changes of share structure in the report period are as the followings:
Statement of Change in Shares
Before the change Increase/decrease of the change(+, -) After the change
Amount Proportion
Issuanc
e of
new
shares
Bonus
share
Convers
ion of
capital
public
reserve
Other Subtotal Amount Proportion
I. Restricted shares 47,286 0.006% 0 0 0 -11,822 -11,822 35,464 0.0045%
1. State-owned
shares
0 0.00% 0 0 0 0 0 0 0.00%
2. State-owned
legal person’s
shares
0 0.00% 0 0 0 0 0 0 0.00%- 8 -
3. Other domestic
shares
0 0.00% 0 0 0 0 0 0 0.00%
Thereinto:
Domestic
non-state-owned
legal person’s
shares
0 0.00% 0 0 0 0 0 0 0.00%
Domestic natural
person’s shares
0 0.00% 0 0 0 0 0 0 0.00%
4. Foreign shares 0 0.00% 0 0 0 0 0 0.00%
Thereinto: Foreign
legal person’s
shares
0 0.00% 0 0 0 0 0 0 0.00%
Foreign natural
person’s shares
0 0.00% 0 0 0 0 0 0 0.00%
5. Senior
executives’ shares
47,286 0.006% 0 0 0 -11,822 -11,822 35,464 0.0045%
II. Unrestricted
shares
784,751,724 99.9940% 0 0 0 11,822 11,822 784,763,546 99.995%
1. RMB ordinary
shares
538,290,406 68.5896% 0 0 0 11,822 11,822 538,302,228 68.5911%
2.Domestically
listed foreign
shares
246,461,318 31.4044% 0 0 0 0 0 246,461,318 31.4044%
3. Overseas listed
foreign shares
0 0.00% 0 0 0 0 0 0 0.00%
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total shares 784,799,010 100.00% 0 0 0 0 0 784,799,010 100.00%
Note:
1. Except for 35,464 restricted senior management shares, all the Company’s stock
has been traded since June 25, 2009.
2. According to the regulations in Rules on the Management of Shares Held by the
Directors, Supervisors and Senior Management Officers of Listed Companies and the
Changes Thereof promulgated by CSRC, the shares of the Company held by directors,
supervisors and senior executives were released from restricted sales in the proportion
of 25% each year. The released shares this time amounted to 11,822 shares.
(II) Total shareholders at the end of the report period
Based on shareholder’s beadroll of the Company provided by China Securities
Depository and Clearing Co., Ltd. Shenzhen Branch, ended June 30, 2010, the
Company has 58,312 shareholders in total, including 41,276 shareholders of A-share
and 17,036 shareholders of B-share.
(III) Particulars on shares held by top ten shareholders- 9 -
(Based on the data supplied by China Securities Depository and Clearing Co., Ltd.
Shenzhen Branch as at June 30, 2010)
Total shareholders 58312
Particulars about shares held by the top ten shareholders
Names of shareholders
Nature of
shareholder
Proportion of
share-holding
Amount of
share held
Amount of restricted
shares held
Shares pledged or
frozen
SHENZHEN SEG
GROUP CO., LTD.
State-owned
legal person
30.24% 237,359,666 83,679,833
GUANGZHOU FODAK
ENTERPRISE GROUP
CO., LTD.
Domestic
non-state-own
ed legal
person
2.41% 18,880,334
Yang Zhihui Domestic
natural person 1.59% 12,477,600
Taifook Securities
Company
Limited-Account Client
Foreign legal
person 1.58% 12,409,410
China Merchants
Securities (Hong Kong)
Co., Ltd.
State-owned
legal person
0.91% 7,115,156
Gong Qianhua Foreign
natural person 0.64% 5,050,000
Shanghai Hong Kong
Wanguo Securities
Foreign legal
person
0.62% 4,835,828
Zhu Wei
Domestic
natural person
0.52% 4,066,739
Tang Lizhu Domestic
natural person 0.48% 3,796,200
Zuo Benjun Domestic
natural person 0.47% 3,658,301
Particulars about the shares held by the top ten unrestricted shareholders
Full Name of shareholder Amount of unrestricted shares held Type of shares
SHENZHEN SEG GROUP CO., LTD. 237,359,666 RMB common share
GUANGZHOU FODAK ENTERPRISE
GROUP CO., LTD.
18,880,334 RMB common share
Yang Zhihui 12,477,600 RMB common share
Taifook Securities Company
Limited-Account Client
12,409,410 Domestically listed foreign share
China Merchants Securities (Hong
Kong) Co., Ltd.
7,115,156 Domestically listed foreign share- 10 -
Gong Qianhua 5,050,000 Domestically listed foreign share
Shanghai Hong Kong Wanguo Securities 4,835,828 Domestically listed foreign share
Zhu Wei 4,066,739 RMB common share
Tang Lizhu 3,796,200 RMB common share
Zuo Benjun 3,658,301 RMB common share
Explanation on affiliated relation and
consistent action of the aforementioned
shareholders
Among the top ten shareholders as listed above, there existed no
associated relationship between Shenzhen SEG Group Co., Ltd.
(hereinafter referred to as SEG Group) and other shareholders, and they
were not consistent actionists according to Management Regulation of
Information Disclosure on Change of Shareholding for Listed
Companies. It was unclear whether there was affiliated relation among
the other top ten shareholders of unrestricted shares or they were
consistent actionists.
(IV) In the report period, the first largest shareholder of the Company remained
unchanged, is still SEG Group.
CHAPTER III PARTICULARS ABOUT DIRECTORS,
SUPERVISORS AND SENIOR EXECUTIVES
(I) Changes in shareholding in the Company by directors, supervisors and
senior management in report period
Ended the report period, except that Ms. Zheng Dan, deputy general manager and
concurrently secretary of the Board and Mr. Jiang Yigang, independent director
of the Company held the A-shares of the Company; other directors, supervisors
and senior executives did not hold the shares of the Company.
Name Office title
Shares held at
this
period-beginning
Amount
of change
Shares held at
this
period-end
Reason of
change
Zheng Dan
Deputy General Manager,
Secretary of the Board
35,586 0 35,586 Inapplicable
Jiang
Yigang
Independent Director 11,700 0 11,700 Inapplicable
(II) Changes in the Company’s directors, supervisors and senior executives
1. The 4th session Supervisor Mr. Zhu Longqing resigned because of work change
from Supervisors of the Company on April 16, 2010. Details are referred to the
Announcement on Resignation of Supervisor Mr. Zhu Longqing published in
Securities Times, China Securities Journal, Hong Kong Commercial Daily and
Juchao Website on April 20, 2010.- 11 -
2. In this period, the Boards of Directors and Supervisory Committee are elected in
rotation and new senior executives are appointed.
(1) The 3rd Staff Representative Assembly held on May 7, 2010, elected Mr. Tian
Jiliang and Mr. Ying Donghua as as the member of the Company’s 5th Session
Supervisory Committee. Details are referred to Announcement on Re-election
for 5th Session of Supervisory Committee in Securities Times, China Securities
Journal, Hong Kong Commercial Daily and Juchao Website on May 22, 2010.
(2) The Company’s 15th (2009) Shareholders’ General Meeting held on May 21,
2010, elected on the basis of accumulative voting mode the followings as 5th
Session Directors, i.e. Mr.Wang Chu, Mr. Zhang Guangliu, Mr. Ye Jun, Mr.
Liu Zhijun, Ms. Zheng Dan, Mr. Zhu Longqing, Mr.Jiang Yigang (independent
director), Mr Yang Ru (independent director), Mr. Zhou Hanjun (independent
director) and as 5th Session Supervisors, i.e. Mr. Zhao Xingjun, Mr. Tang
Chongyin, and Mr. Xu Haisong. Details are referred to the Announcement on
Resolutions of the 15th Shareholders’ General Meeting (2009) of Shenzhen SEG
Co., Ltd. in Securities Times, China Securities Journal, Hong Kong
Commercial Daily and Juchao Website on May 22, 2010. The Directors of the
4th Session of Board of Directors, i.e. Mr. Zhang Weimin, Mr. Guo Hanbiao,
Ms Li Caimou anf Mr. Jia Heting, left their posts because of office term expiry.
(3) The 1st Meeting of 5th Session of Board of Directors held on May 21, 2010,
unanimously elected Mr. Wang Chu as Chairman of 5th of Board of Directors
with a 3-year term, and hired Mr.Liu Zhijun as General Manager with a 3-year
term, Ms. Zheng Dan as Secretary of the Board of Directors with a 3-year term,
and Ms. Zheng Dan, Mr. Zhu Longing, Mr. Li Lifu as Deputy General
Managers. Details are referred to the Announcement on Resolutions of the 1st of
5th Session of Board of Directors’ Meeting of Shenzhen SEG Co., Ltd. in
Securities Times, China Securities Journal, Hong Kong Commercial Daily and
Juchao Website on May 22, 2010.
(4) The 1st Meeting of 5th Session of Supervisory Committee held on May 21, 2010,
unanimously elected Mr. Zhao Xingxue as Chairman of 5th Session of
Supervisory Committee with a 3-year term. Details are referred to the
Announcement on Resolutions of the 1st Meeting of 5th Session of Supervisory
Committee of Shenzhen SEG Co., Ltd. in Securities Times, China Securities
Journal, Hong Kong Commercial Daily and Juchao Website on May 22, 2010.
(5) The 1st Temporary Meeting of 5th Session of Supervisory Committee held on
May 28, 2010, approved to appoint Mr. Li Lif as Deputy General Manager as
Principal of Accounting with a 3-year term. Details are referred to the
Announcement on Resolutions of the 1st Temporary Meeting of 5th Session of
Board of Directors’ of Shenzhen SEG Co., Ltd. in Securities Times, China
Securities Journal, Hong Kong Commercial Daily and Juchao Website on May
29, 2010.- 12 -
CHAPTER IV. REPORT OF THE BOARD OF DIRECTORS
I. Analysis of financial status and operation achievement of the report period
In the report period, with the Company’s thorough enforcement of reformation and
forceful propel of innovation in operation and management stereotype in electronics
market, operation and management business in electronics market as the main
business enjoyed a steady development and general sound operation. In the report
period, the Company obtained the following special honors as Ten Biggest Brands in
China Electronics Market (namely “well-known brands”), 2009 Operation Innovation
Rewards in China Electronics Market certified by Electronics Market Expertise
Commission of China Electronic Chamber of Commerce, and Ten Shenzhen Perfect
Accomplished Enterprises in 30-year Commercial Achievement selected commonly
by Shenzhen Commercial League, Shenzhen Media Group, Shenzhen Commercial
Newspaper and China UnionPay Shenzhen Branch.
In the report period, the Company realized operation income of RMB 178.2974
million, a year-on-year increase of 29.31%; and realized total profit and net profit of
RMB39.2063 million and RMB 29.2913 million respectively, making up the deficits
and getting surplus compared with the same period of last year. Increase in operation
income year-on-year in this period is mainly due to: 1.operation income increase with
starting business in Changsha SEG and Changsha Mellow Orange Hotel; 2.
year-on-year operation income increase in the Company’s self-support business
(“Buy-it” shops).
Main reason for making up the deficits and getting surplus: because ST
SAMSUNG stopped its main business last year, the sufficient accrual of asset
impairment and then the great decrease of loss in this period, and the great decrease of
investment loss born by the Company compared with that of the same period of last
year. .
(I) Main structure change of the Company’s assets and liability and main reasons
analysis
Unite: RMB
Item Jun. 30, 2010 Dec. 31, 2009
Change
Percentage
Total assets 1,393,700,513.68 1,359,490,387.43 2.52%
Inventory 3,319,264.37 5,886,392.39 -43.61%
Financial assets available for sale 623,821.24 3,843,571.87 -83.77%
Project under construction 3,850,549.95 26,192,075.55 -85.30%
Lon-term unamortized expense 16,498,737.19 13,041,779.82 26.51%
Account payable 14,881,485.86 8,225,509.02 80.92%
Employees’ remuneration payable 1,404,104.26 4,261,476.99 -67.05%
Tax and fee payable 6,238,344.56 24,421,758.66 -74.46%
Dividend payable 1,716,515.57 921,420.73 86.29%
Total owner’s equity attributable to
parent company
1,053,275,088.10 1,015,659,488.47 3.70%
Main reasons for change:
Decrease of Inventory: decrease derived from business transfer of “Buy-it” Shops- 13 -
from self-support business to affiliation model.
Decrease of assets available for sale: RMB 3.3041 million decrease derived from
sales of 0.47 million ST 07 shares in this period. .
Decrease of projects under construction: decrease derived from completion of
decoration project of Changsha SEG—the controlled subsidiary, and transferring its
costs into capital assets and long-term unamortized expense, so as to eliminate this
project.
Increase of long-term unamortized expense: increase derived from completion of
decoration project of Changsha SEG Electronics Market and transferring its costs into
this item from project under construction.
Increase of account payable: increase derived from the unpaid account payables
after the completion of decoration project of Changsha SEG Electronics Market—the
controlled subsidiary of the Company.
Decrease of employees’ remuneration payable: increase derived from payment for
2009 year-end wages and awards.
Decrease of tax and fee payable: decrease derived from clearing of RMB 25.87
million of accrued 2009 corporate income tax and its payment to taxation department.
Increase of dividend payable: increase derived from declaration for dividend
distribution increasing unpaid dividend.
Increase of owner’s equity attributable to parent company: increase derived from
increase in undistributed profit RMB 26.8968 million from the Company’s profit; in
addition, the financial support received by ST SAMSUNG, in which the Company
owns 22.45% of its total capital stock, was booked into capital public reserve, so as to
increase the same of the Company by RMB12.572 million.
(II)Change in operation achievement
Unit: RMB
Item Jan. to June, 2010 Jan. to Jun., 2009
Change
proportion
Reason for change
Operation income 178,297,428.20 137,882,485.07 29.31%
①Increase in operation income
from business starting of
Changsha SEG and Changsha
Mellow Orange Hotel in this
period;
②Year-on-year increase in
operation income from
self-support business of
(“Buy-it” )Hotels and affiliated
business
Operation cost 115,533,447.61 78,631,266.50 46.93%
①Increase in operation income
leads to the same of operation
cost;
②Lower gross profit and bigger
increase in operation cost than
that in operation income within
the starting phase of new business
of the Company.- 14 -
Operation expense 2,515,389.39 1,353,048.92 85.91%
Increase in operation income leads
to the same of sales expense
Accounting Expense -2,504,676.18 -6,226,108.02 59.77%
Part of the Company’s funds was
deposited in bank on fixed-term
basis, the expiry date of most of
the deposits is in this period
between October and December.
So their interest has not been
recognized yet this time.
Loss from asset
impairment
- -3,954,300.00 100.00%
No loss from asset impairment in
this period and recovery of
account receivable of bad debts
loss of RMB 3 million accrued in
last same period
Investment return -2,864,222.75 -186,150,878.70 98.46%
Large decrease in loss of ST
SAMSUNG in this period
compared with the same period of
last year, with 22.45 % joint
shareholding by the Company.
Operation profit 39,086,023.77 -140,670,155.49 -
Large decrease in loss of ST
SAMSUNG, with 22.45 % joint
shareholding by the Company in
the period was the main reason of
transfer from loss to gain of
operation profit.
Non-operation income 592,004.10 2,039,063.07 -70.97%
Transfer-back of accounts
unnecessary for payment in the
same period of last year, but such
transfer-back did not exist in this
period.
Non-operation
expenditure
471,754.44 109,809.91 329.61%
Donation of 0.3 million to
Zhanjiang Ecological Feeding
Projects for Poverty Alleviation as
approved by the Company’s
Board of Directors
Total profit 39,206,273.43 -138,740,902.33 -
Large decrease in loss of ST
SAMSUNG, with 22.45 % joint
shareholding by the Company in
this period was the main reason of
transfer from loss to gain of total
profit.
Income tax expense 9,914,971.86 4,385,985.58 126.06%
Increase in profit taxable and in
income tax rate in Shenzhen this
year
Net profit 29,291,301.57 -143,126,887.91 -
Large decrease in loss of ST
SAMSUNG, with 22.45 % joint
shareholding by the Company in
this period was the main reason of
transfer from loss to gain of net
profit.
Net profit attributable
to owners of parent
company
26,896,844.71 -146,083,519.02 -
Large decrease in loss of ST
SAMSUNG, with 22.45 % joint
shareholding by the Company in
this period was the main reason of
transfer from loss to gain of net
profit attributable to owners of
parent company.- 15 -
II. Operation in the report period
(I) The business scope of the Company included: domestic commerce, supply & sales
of (excluding specially operated, specially controlled and specially sold goods);
establishment of industries (specific projects declared additionally), consultation for
economic information. Property lease: real estate agency; establish SEG special
electronics market (license for special market reported additionally).
In main business:
1. Operation and management of electronics market
In the report period, the macro-economy presented characteristic fragility and
instability in the economy recovery period after the financial crisis. The Company,
through enforcement of management, and operation and service innovation, kept a
steady development of the mainly operated chain operation business in electronics
market. All operated electronics markets are profitable, with the average shop lease
rate above 90% in all electronics markets. In the period, operation income in the
businesses is RMB 87.07 million, mainly because Changsha SEG Electronics Market
started operation, the income of electronics market operation and management
increased by 16.67% compared with the same period of last year; total net profit was
RMB31.04 million with a year-on-year decrease of 3.99%. The main reason for the
decline was the temporary loss in Changsha SEG in its fostering phase and the rental
cost rise in Longang SEG.
Moreover, the projects of Xiamen SEG Electronics Market and Jiaxing Electronics
Market in consigned management manner were formally signed respectively on April
16, 2010 and May 23, 2010.
2. Bonded storage and overseas transportation
In the report period, along with the international economy recovery, increase in
transportation in Shenzhen ports was propelled. SEG Storage Transportation, 95% of
which stock is held by the Company of 95%, adjusted the structure of domestic
transportation, with the transfer of priority from quay-to-quay short transportation to
domestic line-haul, which facilitated the remarkable year-on-year increase in domestic
transportation. Operation income achieved in storage and transportation was RMB
35.57 million with a year-on-year increase of 9.45% and total profit RMB3.34 million
with a year-on-year decrease of 37.57%. The main reason for the latter decrease was
there was the investment return of RMB1.41million from sales of ST SAMSUNG
shares held by SEG Storage in the same period of last year, but there was not such
income in this period.
3. Property operation and management
The Company’s property business operation remained stable with operation income
RMB 29.2085 million, and total profit RMB 12.07 million achieved in the period, and
leveled off compared with the same period of last year.
(1) During the report period, SEG Baohua (66.58 % equities were held by the
Company) which was engaged in property operation and management operated stably.- 16 -
It always kept a comparatively high lease rate for its properties. In this period, the
operation income achieved RMB 25.37 million, a year-on-year decrease of 24.42%,
and total net profit RMB 7.85 million, a year-on-year decrease of 5.65%
In the report period, main reasons for year-on-year increase of total operation income
and profit were: rental rise for renters of contract due, Changsha Mellow Orange
Hotel as starting business on January 1, 2010 entered into the stable income period,
(the achieved operation income in this period was RMB 4.33 million, total profit
RMB 0.72 million).
(2) In this period, operation income of property lease business operated directly by the
Company’s headquarter reached at RMB 5.92 million, up 5.71% compared with the
same period of last year, realizing total net profit of RMB 4.13 million, up 5.90%
compared with the same period of last year.
4. Self-support and affiliated business
In this period, due to the business staring of “Buy-it” Shops invested and established
by SEG Industry Investment—the controlled subsidiary of the Company, and its main
business as self-support and affiliated sales of electronic products. The operation
income was RMB 22.1174 million, and total profit RMB -0.275 million (temporary
loss in the fostering period).
(II)Main business classified according to industries or products
Unit: RMB’0000
Main business classified according to industries or products
Classified according to
industries or products
Operation
revenue
Operation
cost
Gross
profit
ratio (%)
Year-on-year
increase/decre
ase in
operation
income (%)
Year-on-year
increase/decre
ase in
operation cost
(%)
Year-on-year
Increase/decre
ase in gross
profit ratio
(%)
Operation business of
electronics market, and
property lease
11,627.85 6,344.42 45.44% 10.78% 19.20% -3.86%
Bonded storage and
overseas transportation 3,557.59 2,865.47 19.45% 9.47% 12.96% -2.48%
Sales of self-support or
joint venture electronic
products
2,211.74 2,036.78 7.91%
Main business classified according to areas
Unit: RMB’0000
Area Operation income
Increase/decrease in operation
income compared with last year
(%)
Shenzhen 12,485.60 25.90%
Xi’an 1,233.16 3.18%
Suzhou 1,450.05 53.72%
Changsha 1,101.49
Overseas 1,559.45 1.71%
(III)Explanation on material changes in main business or its structure, profitability- 17 -
and profit constitution in this period
1. Upon the completion of the transfer of stock in SEG Communication in May 2009,
the Company quitted the network communication business, and therefore the business
in communication products manufacturing and network decreased year-on-year.
Due to the transfer of stock in Chongqing SEG in May 2009, the operation income in
Chongqing area decreased year-on-year.
Due to the business starting in Changsha SEG Electronics Market and Changsha Juice
Hotel in January 2010, the operation income in Changsha increased in this period.
Income in the Company’s self-support business of (“Buy-it”) Shops and affiliated
business increased year-on-year.
2. In this period, there was no material change in the main business profitability
compared with the same period of last year.
Due to the business starting of Changsha SEG and Changsha Mellow Orange Hotel in
January 2010, and the year-on-year increase in operation income of “Buy-it” Shops,
the Company’s operation income increased. In this period, due to the Company’s new
business was still in fostering and starting phase, and the gross profit was rather low,
the Company’s gross profit ratio of general business decreased year-on-year.
3. Analysis of reasons for material changes in profit constitution year-on-year
Jan.—June, 2010 Jan.—June, 2009
Item
Amount
Proportion
accounting
for total
profit (%)
Amount
Proportion
accounting
for total
profit (%)
Change
proportion
(%)
Operation income 178,297,428.20 454.77% 137,882,485.07 -99.38% 29.31%
Operation cost 115,533,447.61 294.68% 78,631,266.50 -56.67% 46.93%
Sales expense 2,515,389.39 6.42% 1,353,048.92 -0.98% 85.91%
Administration expense 13,537,218.21 34.53% 16,241,868.85 -11.71% -16.65%
Financial expense -2,504,676.18 -6.39% -6,226,108.02 4.49% 59.77%
Investment return -2,864,222.75 -7.31% -186,150,878.70 134.17% 98.46%
Operation profit 39,086,023.77 99.69% -140,670,155.49 101.39%
Total profit 39,206,273.43 100.00% -138,740,902.33 100.00%
Less: income tax expense 9,914,971.86 25.29% 4,385,985.58 -3.16% 126.06%
Net profit 29,291,301.57 74.71% -143,126,887.91 103.16%
Net profit attributable to
owners of parent company
26,896,844.71 68.60% -146,083,519.02 105.29%
Compared with the same period of last year, reasons for the material changes in the
Company’s profit constitution are as follows:
Loss of RMB 32.0333 million in this period SEG SAMSUNG with the Company’s
22.45% stock in it, compared with RMB 969.7126 million of the same period of last
year, made the Company’s investment loss decrease largely and large increase in the
Company’s operation profit and total profit.
(IV) In this period, other operation activities impacting greatly on the Company’s
profit- 18 -
On April 12, 2010, the Company sold 0.47 million ST07 shares at an average price of
RMB 8.08 per share via the call auction system of Shenzhen Stock Exchange and
obtained net profit 2.94 million after deduction of relevant expenses and cost.
(V) Particulars of joint companies whose investment return account for above 10%
net profit
SEG SAMSUNG, with 22.45% of its stock held by the Company, 896.6671464
million registered capitals, and RMB 662.23 million total assets at this period-end, is
mainly engaged in production and sales of CPT Glass shell and STN-ITO coated glass.
In this period, the Company produced 1.439363 million pieces of STN-ITO coated
glass and sold 1,509,365 pieces, with the achievement of sales income RMB 53.07
million and total profit RMB -32.03 million.
(VI) Problems and difficulties in operation
1. Due to the direct impact of Changsha metro construction, expectedly the difficulty
in fostering Changsha SEG Electronics Market will increase.
2. As for the bonded storage and overseas transportation, due to the influence of
multiple factors as domestic economy environment, state policies and currency
exchange rate, they will face up to risks as increase in cost, narrowing down of margin,
and decrease in income.
III. Business prospect and operation plan for the second half of the year
In the next half, the Company will continually make efforts to accomplish all the tasks
disclosed in the annual operation plan in 2010 Annual Report.
(I) Business exploration plan for the next half:
1. The Company will continually explore the chain business of the electronics market
to increase the chain market number, propel the strategic aggression in the electronics
market and make efforts to foster the new profit growth points.
2. Continually quicken the campaign of business innovation and value-added services,
and the operation and promotion of “one-center, four-platform” (namely, calling
center, logistics information platform, uniform after-sales service platform, quality
certification platform, information release platform) so as to further improve the core
competence of SEG Electronics Markets .
3. Strengthen the exploration in new projects (electronic commerce, and self-support
and affiliated business), extend business scope and improve profitability.
4. Do well the relevant pro-phase work of projects of Xiamen SEG Electronics
Market and Jiaxing SEG Electronics Market, the contracts of which were already
signed on the basis of consigned management pattern.
5. Quicken the propel of the projects construction of SEG electronic commerce, make
use of the advantages of the entity market of SEG Electronics Market, and integrate
the existing commercial customers and off-line business with electronic commerce
together the soonest possible.
(II) Risk factors:
1. ST SAMSUNG—the Company’s joint enterprise of 22.45% equity, due to the
uncertainty of the future operation direction, will make uncertain influences to the- 19 -
Company’s long-term investment.
2. Due to the increasingly fierce competition in traditional market industry, as
increasingly fierce competition in intra-markets and the occupied market share of
channels as the 3G store, electronic commerce in the traditional IT sales market,
together with many factors as the disorderly expansion of electronics markets, the
intra-industry competition intensified and the risk of a new round of reformulation is
latent.
(III) Counter-measures:
1. Work out the “Twelfth Five-year Plan” development strategic program and the
detailed implementation scheme from the year of 2011 to 2015, make tangible the
Company’s strategic goals, positioning, and each safeguard measures, and promote
development in each business with full efforts.
2. Continually enforce operation and management, promote strenuously the
management of cost, full budget and risk, increase cost and reduce expenditure.
3. Further enforce the expertise talent cultivation, introduction, and post professional
training, to cultivate expertise talents and management team that satisfy the
Company’s strategic development.
4. With the measures as partial industry condition adjustment, enforcement of
advertising and promotion and the commercial client’s confidence uplift, Changsha
SEG will to the uttermost reduce the market operation risk brought forth by the metro
construction to shorten the market fostering period.
5. Enforce the business exploration in transportation, optimize the business structure,
and control the risk effectively.
6. Give full play to the capital advantage, industry status and channel advantages,
SEG Electronics Market will integrate advantages, to realize the optimal allocation of
the Company’s whole resources and to improve further the assets quality and
profitability.
IV. Investment
(I) In this period, there was no fund raising or previous appropriation of raised funds
continuing into this period.
.
V. Estimation on accumulative net profit from the beginning of the year to the end of next
report period to be loss probably or the warning of its material change compared with the
corresponding period of the last year and explanation on reason
Forecast of performances Make up the deficits
Year-beginning to the
end of next report period
Same period of last
period
Change of increase/decrease (%)
Estimated amount of
accumulative net profit
(RMB’0000)
3,200.00 -- 3,600.00 -17,936.76 Increase --
Basic earnings per share
(RMB/Share) 0.0408 -- 0.0459 -0.2286 Increase --- 20 -
Explanations on forecast
of performances
(1)Shenzhen SEG SAMSUNG as the Company’s joint company is expected of the accumulative loss
of RMB 43 million to RMB 48 million from the Year-beginning to next report period-ends.
(2)The performance prediction has not been audited by the CPAs.
Notes: Detailed financial dada will be disclosed in the Company’s third quarterly
report.
VI．Explanation of adopting Sound value Model Measurement
According to Corporate Accounting Principle No.22–Recognition and Measurement
of Financial Instruments, shares held by the Company in ST 07and Xinjiang
Friendship Group Co., Ltd. are listed as “financial assets available for sale”, based on
the closing price of the shares in securities market on balance sheet day and audited in
the sound value measurement model. Details are referred to in relevant contents in
Section V. Significant Events.
CHAPTER V. SIGNIFICANT EVENTS
I. Corporation governance
In the report period, according to the requirements of laws and regulations of
Company Law, Securities Law, and Code of Corporate Governance for Listed
Companies, the Articles of Association and other requirements of laws and regulations
of governance of the listed companies, the Company consistently perfected its
governance structure and standardized the operation. But there are still some
proceedings in the Company as follows:
(I) Controlling shareholders manage the Company according to the Property Right
Representatives System. As to the controlling shareholder SEG Group Co. Ltd. is the
state-controlled enterprises in Shenzhen, and Shenzhen State-owned Assets
Supervision and Administration Commission is the controlling shareholder of SEG
Group Co. Ltd. the controlling shareholder of the Company, the Property Right
Representatives System of state-owned assets management should be implemented
according to Shenzhen state-owned assets management methods.
(II) In the aspect of personnel assessment, the controlling shareholder of the Company
– SEG Group made annual performance appraisal of senior executives according to
the completion of annual operation target and other targets.
(III) Existence of offering undisclosed information to large shareholders and actual
controllers
The Company report undisclosed information to large shareholders and actual
controllers according to the Property Right Representatives System and the
requirements of state statistic department. According to the requirements of
state-owned assets supervision department, the situation of reporting monthly
financial reports to controlling shareholders and actual controllers and reporting
important issues to controlling shareholders and actual controllers before public
disclosure exists at present. The Company put in Report of Listed Company Offering- 21 -
Unopened Information to Large Shareholders and Actual Controllers and
Commitment Letter on October 18, 2007 to Shenzhen Securities Regulatory Bureau;
SEG Group Co. Ltd. certificated enhancing the Management of Undisclosed
Information Commitment Letter to Shenzhen Securities Regulatory Bureau. At the
same time, the Company has established and implemented Insiders of Inside
Information Record System of Shenzhen SEG Co. Ltd. and Insiders of Inside
Information Secret System of Shenzhen SEG Co. Ltd., and will regularly record the
report information of undisclosed information to Shenzhen Security Regulatory Office
each month. On July 15, 2009, the management group and all employees of head
office signed Confidentiality Agreement with the Company one by one, specifying
their confidential responsibility for the Company’s business secretary and undisclosed
information. The specific undisclosed information that the Company offers to large
shareholders and actual controllers was as follows:
No.
Parties of
delivering
information
The
relationship
between
the parties
of
delivering
information
and listed
company
Information sort Delivery procedure
Delivery
date or
period
Proof of delivering
information
Approval
procedure
SHENZHEN
SEG GROUP
CO., LTD.
Controlling
shareholder
(30.24%)
1
State-Owned
Assets
Supervision
And
Administration
Commission
Of Shenzhen
Municipal
Government
Actual
controller
Express on Main
Financial Index of
Shenzhen City-owned
Enterprises
Compiled by financial
personnel of the
investment enterprise
and head office of the
Company, made
statement and
consolidated, delivered
through information
system of state-owned
asset administration
after the examination of
leader of financial
department
Each
month
State Council GZW
Document(GZTPJ
[2003] No.23)
Notice on Relevant
Matters on Monthly
Enterprise
Financial Report
Compiled and
Reported by GZW
Supervision And
Administration
Enterprise
Agreed by the
Board of
Directors
SHENZHEN
SEG GROUP
CO., LTD.
Controlling
shareholder
(30.24%)
2
State-Owned
Assets
Supervision
And
Administration
Commission
Of Shenzhen
Municipal
Government
Actual
controller
Consolidated
statement of budget
implementation of
monthly expenses
Compiled by financial
personnel of the
investment enterprise
and head office of the
Company, made
statement and
consolidated, delivered
through information
system of state-owned
asset administration
after the examination of
leader of financial
department
Each
month
State Council GZW
Document(GZTPJ
[2003] No.23)
Notice on Relevant
Matters on Monthly
Enterprise
Financial Report
Compiled and
Reported by GZW
Supervision And
Administration
Enterprise
Agreed by the
Board of
Directors
SHENZHEN
SEG GROUP
CO., LTD.
Controlling
shareholder
(30.24%)
3
State-Owned
Assets
Supervision
And
Administration
Commission
Of Shenzhen
Municipal
Government
Actual
controller
Consolidated
statement of monthly
cash flow
Compiled by financial
personnel of the
investment enterprise
and head office of the
Company, made
statement and
consolidated, delivered
through information
system of state-owned
asset administration
Each
month
State Council GZW
Document(GZTPJ
[2003] No.23)
Notice on Relevant
Matters on Monthly
Enterprise
Financial Report
Compiled and
Reported by GZW
Supervision And
Administration
Enterprise
Agreed by the
Board of
Directors
SHENZHEN
SEG GROUP
CO., LTD.
Controlling
shareholder
(30.24%)
4
State-Owned
Assets
Supervision
And
Administration
Commission
Of Shenzhen
Municipal
Government
Actual
controller
Deposit and loan of
the Company’s
headquarter
Compiled by financial
personnel of the
Company, and delivered
through information
system of state-owned
asset administration
Each
month
State Council GZW
Document(GZTPJ
[2003] No.23)
Notice on Relevant
Matters on Monthly
Enterprise
Financial Report
Compiled and
Reported by GZW
Supervision And
Administration
Enterprise
Agreed by the
Board of
Directors- 22 -
SHENZHEN
SEG GROUP
CO., LTD.
Controlling
shareholder
(30.24%)
5
State-Owned
Assets
Supervision
And
Administration
Commission
Of Shenzhen
Municipal
Government
Actual
controller
Quarterly Statement
of Non-operation
Profit and Loss of
Shenzhen City-owned
Enterprises
Compiled by financial
personnel of the
Company and delivered
through information
system of state-owned
asset administration
Each
month
State Council GZW
Document(GZTPJ
[2003] No.23)
Notice on Relevant
Matters on Monthly
Enterprise
Financial Report
Compiled and
Reported by GZW
Supervision And
Administration
Enterprise
Agreed by the
Board of
Directors
SHENZHEN
SEG GROUP
CO., LTD.
Controlling
shareholder
(30.24%)
6
State-Owned
Assets
Supervision
And
Administration
Commission
Of Shenzhen
Municipal
Government
Actual
controller
Consolidated
Statement of Details
of Investment
Property of Shenzhen
City-owned
Enterprises in the
Second Quarter
Starting delivery since
June of 2009. Compiled
by financial personnel
of the investment
enterprise and head
office of the Company,
made statement and
consolidated, delivered
through information
system of state-owned
asset administration
Each
quarter
State Council GZW
Document(GZTPJ
[2003] No.23)
Notice on Relevant
Matters on Monthly
Enterprise
Financial Report
Compiled and
Reported by GZW
Supervision And
Administration
Enterprise
Agreed by the
Board of
Directors
SHENZHEN
SEG GROUP
CO., LTD.
Controlling
shareholder
(30.24%)
7
State-Owned
Assets
Supervision
And
Administration
Commission
Of Shenzhen
Municipal
Government
Actual
controller
Statement of Statistics
of State-owned Assets
in 2009
Compiled by 2009
statement managing
software and delivered
by e-mail after
examination of relevant
leaders of the Company.
April 2010 YGZTP[2008]
No.185
Agreed by the
Board of
Directors
SHENZHEN
SEG GROUP
CO., LTD.
Controlling
shareholder
(30.24%)
8
State-Owned
Assets
Supervision
And
Administration
Commission
Of Shenzhen
Municipal
Government
Actual
controller
Monthly consolidated
statement(including
balance statement,
profit statement, cash
flow statement, notes
to statement
compilation and
report on financial
analysis)
Monthly print, signature
and seals, then
delivered; in addition,
delivered quarterly
through the information
system of state-owned
asset management, and
started to deliver by
internet since July 2008.
Each
month
Notice on
Delivering monthly
Report of Shenzhen
SEG Group Co.,
Ltd.
Agreed by the
board of directors
SHENZHEN
SEG GROUP
CO., LTD.
Controlling
shareholder
(30.24%)
9
State-Owned
Assets
Supervision
And
Administration
Commission
Of Shenzhen
Municipal
Government
Actual
controller
Statistics
report/monthly report
and annual report of
electron information
industry
Sealed by the Company
Each
month and
each year
The Statistics Law
of the People's
Republic of China,
Article 3: State
organs, public
organizations,
enterprises,
institutions, and
self-employed
industrialists and
businessmen that
are under statistical
investigation shall,
in accordance with
the provisions of
this Law and State
regulations, provide
truthful statistical
data. They may not
make false entries or
conceal statistical
data, and they may
not refuse to submit
statistical reports or
report statistical
data belatedly.
Falsification of or
tampering with
statistical data shall
be prohibited.
Autonomous mass
organizations at the
grass-roots level and
citizens shall have
the duty to provide
Agreed by the
board of directors- 23 -
truthful information
needed for State
statistical
investigations.
II. Implementation of profit distribution during this period
(I) There was no implementation of profit distribution in the Company in this period.
(II) There was no incidence as profit distribution or transfer from capital public
reserve to shares in the interim of 2010.
III. Significant lawsuits and arbitrations in this period
There were no significant lawsuits or arbitrations in this period.
IV. Substantive asset purchase, sale and re-combination and the progress
The Company sold 0.47 million ST Zero-Seven shares in this period. Details are
referred to II (IV) Other operation activities impacting greatly on the Company’s
profit in Chapter IV. Report of the Board of Directors.
V. Significant related transactions
(I) In this period, there was no related transaction as substantive goods purchase/sales,
or labor supply.
(II) In the report period, the Company signed Property Leasing Contract with
Shenzhen SEG Group Co., Ltd. with the approval of Board of Directors of the
Company. The Company rented partial property of the 8th floor of SEG Square from
SEG Group as warehouse for the traders of the electronics market, and paid rent fee
RMB 240,000 as the Contract.
Unit: RMB
Name of related party Jan.-Jun. 2010
Shenzhen SEG Group Co., Ltd. 240,000
(III) In the report period, there were no related transactions as asset acquisition or
sales.
(IV)Credit, liabilities or guarantees between the Company and related parties
1. Credit and liability dealings with related parties
Semi-annual 2010
Statement on Capital Dealing with Contolling Shareholders and
Other Related Parties of the Company
Unit: RMB
Name of
related
parties
Relations
between
related
parties
and listed
company
Items of
accounting
statement
Balance at
Period-beg
inning
Actual
amount of
debit
Actual
amount of
credit
Balance at
period-end
Accrued
provision
for bad
debts
Appropr
iation
way and
reason
Rep
aym
ent
way
Illegal
fund
approp
riation
forbid
den by
No.56
docum
Approp
riation
nature- 24 -
ent or
not
A B C D E F G H I J K L
Shenzhen
SEG
Property
Manageme
nt Co., Ltd.
Subsidiary
of
sharehold
ers
Other
account
receivable
2,000.00 2,000.00 Deposit ---- No
Operati
on
occupat
ion
Shenzhen
SEG
Orient
Industrial
Developme
nt Co., Ltd.
Affiliated
company
Other
account
receivable
443,910.00 443,910.00 443,910.00
Current
account
---- No
Operati
on
occupat
ion
Shenzhen
SEG
Group Co.,
Ltd.
Controllin
g
sharehold
er
Other
account
receivable
80,000.00 80,000.00 Deposit ---- No
Operati
on
occupat
ion
Total 525,910.00 545,510.00 443,910.00
2. In this period, there was no guarantee between the Company and the related parties.
VI. Significant contracts and implementation
(I) In this period, there was had no significant custody, contract or lease on other
company’s assets in the Company and vice versa.
(II) In this period, there was no entrusted financing in the Company.
(III) Significant guarantee contracts
In this period, there was no related guarantee in the Company. As ending this
period-end, balance of the Company’s external guarantee (guarantee for controlled
subsidiaries included) was zero.
External guarantees of the Company ( guarantees for controlled subsidiaries excluded)
Name of
the
Company
guaranteed
Actual date of
happening
(Agreement Date)
Amount of
guarantee
Guarantee
type
Guarantee
period
Fulfillment or
not
Guarantee for
related party (Yes
or not)
Naught
Total amount of guarantees in the report
period 0.00
Total balance of guarantees at report
period-end（A） 0.00
Guarantees for controlled subsidiaries
Total amount of guarantees for controlled
subsidiaries in the report period 0
Total balance of guarantees for controlled
subsidiaries at report period-end（B） 0
Total amount of guarantees of the Company (guarantees for controlled subsidiaries included)
Total amount of guarantees（A+B） 0
Proportion of total guarantees to net assets 0%
Including:
Amount for shareholders, actual controller
and other related parties（C） 0- 25 -
Liability guarantee direct or indirect for
guarantees which assets liability rate
exceeding 70%（D）
0
Amount of total guarantee exceeding 50% of
net assets（E） 0
Total of the aforementioned three items*
（C+D+E） 0
VII. Fulfillment of commitments made by shareholders of above 5%
shareholding in the Company in this period
(I) Article 5 of the Equity Transfer Agreement which the Company had signed with
SEG Group at the time of the Company’s listing stipulated: SEG Group permits the
Company, as well as subsidiaries of the Company and affiliated companies to use the
8 registered trademarks that SEG Group has presently registered at the State
Trademark Office; it also permits the Company to take the aforesaid trademarks and
symbols that are similar to these marks as the symbol of the Company, as well as to
use the aforesaid symbols or symbols that are similar to these symbols during the
operation process; the Company doesn’t have to pay SEG Group any fee for the use of
the aforesaid trademarks or symbols. In the report period, this commitment was still
executed according to the commitment.
(II) According to the problem of “Your company’s existing same industry competition
in the electronics market business with SEG Group” appointed by Shenzhen
Securities Regulatory Bureau in 2007 at the spot investigation of the Company, the
Company received SEG Group’s Consent Letter on Sep.14, 2007, with the content as
follows: Our company’s familiar business in electronics market of Shenzhen with
Shenzhen SEG Group Co. Ltd. occurred on the basis of historical reasons and had
objective market developing background. Our Group promised that we will not have
business single in the same city with Shenzhen SEG. The matter has been disclosed on
China Securities, Securities Times, Hong Kong Wen Wei Po and
http://www.cninfo.com.cn dated September 18, 2007. In the report period, SEG
Group implemented the above commitment.
(III) On October 18, 2007, SEG Group, the first largest shareholder of the Company,
issued Commitment Letter on Strengthening Management over Non-public
Information to the Company and Shenzhen Securities Regulatory Bureau, in which it
was promised that our company would establish and perfect the internal control
management over the acquired non-public information of listed companies; supervise
the relevant information insider in our company and the actual controllers of the
company not to buy the securities of your company taking advantage of the
non-public information of your company; not suggest others to trade the securities of
your company; not to leak the non-public information of your company and offer the
list of insider in our company and actual controllers of our company knowing the
non-public information of your company and your company could hand this name list
to Shenzhen Securities Regulatory Bureau and Shenzhen Stock Exchange for records.
During the report period, SEG Group implements its commitments.
VIII. Specific explanation and independent opinion of independent directors on- 26 -
capital appropriation by and external guarantee for related parties in the
Company
Pursuant to the spirit of CSRC’s announcements as Notice of Regularizing Capital
Dealings between Listed Company and Related Parties, and External Guarantees of
Listed Company (ZHENG JIAN FA [2003] No.56) and Notice of Regularizing
External Guarantees of Listed Company (ZHENG JIAN FA [2005] No.120), and with
the attitude of seeking truth from the fact, we, as independent directors of the
Company, made inspection on capital appropriation and external guarantees between
the Company and related parties, and announced specific explanations and
independent opinions as follows:
In the report period, there was no occasion of non-operation appropriation of capital
in the Company by the controlling shareholders or other related parties; there was no
finding of guarantees by the Company for controlled shareholders, other related
parties, unregistered corporations or individuals of below 50% shareholding. There
was no illegal incidence.
There was no external guarantee by the Company in this period, and the balance of
external guarantee was zero.
Independent Directors: Jiang Yigang, Yang Rusheng, Zhou Hanjun
IX. Net profit of SEG Samsung with the Company’s 22.45% stock in it,
attributable to the parent company was up to RMB -32.0333 million and the
Company’s net profit influenced by SEG Samsung in the first half was RMB
-7.1930 million.
X. There was no occasion as additional commitment for restricted shares of the
shareholders of above 5% sock in the Company.
XI. Statement for investigation & study, communication, interview
Reception date Reception place Reception way Object received
Discussion issue and offered
information
January 6,
2010
Office of the
Company
Communication on
phone
Investor Basic information of the Company
February 12,
2010
Office of the
Company
Communication on
phone
B Shareholder Basic information of the Company
March 26,
2010
Office of the
Company
Communication on
phone
B Shareholder Basic information of the Company
April 7, 2010
Office of the
Company
Written interval
Journalist in
Securities Times
Relevant information of the
Company disclosed
April 16, 2010
Office of the
Company
Communication on
phone
B Shareholder
Basic information of the Company
and the disclosure date of the
annual report
May 20, 2010
Office of the
Company
Communication on
phone
B Shareholder
Relevant proposals for the annual
shareholders’ general meeting
June 24, 2010
Office of the
Company
Communication on
phone
Investor
Relevant information of the
Company disclosed
XII. In this period, the Company, did not receive any inspection, administrative
punishment or criticism by circulating a public notice from CSRC, and public- 27 -
condemn from Stock Exchange, so did its Board, directors, supervisors, and
senior executives.
XIII. Other significant events
(I) the Company’s stock in other listed companies
√Applicable □Inapplicable
Unit: RMB
Stock code Short form of
the stock
Initial investment
amount
Proportion
in equity
of the
Company
Book value at
period-end
Gains and
losses in report
period
Changes on owners’
equity in the report
period
600778 Friendship
Group
90,405.00 0.04% 623,821.24 --- 65,792.51
000007 ST
Zero-Seven
2,299,296.33 359,487.00
000068 SEG Samsung 279,307,046.38 22.45% 103,852,676.89 (7,192,975.88) 5,379,024.12
Total 279,397,451.38 104,476,498.13- (4,893,679.55) 5,804,303.63
Note: the first releasing time for the restricted tradable shares of SEG Samsung held
by the Company is March 4th of 2009. The Company handled the second releasing on
March 23, 2010, with 44.8336 million shares newly increased. In the report period,
there were no sales of SEG Samsung shares but sales of 0.47million STZ Zero-Seven
shares.
(II) Securities investment of the Company
□Applicable √Inapplicable
(III) Content Index for the Information of the Company Disclosed in 2010
Disclosure date Content of disclosure
Press and internet website
for publication
January 16, 2010 Rectification Announcement for 2009 Performance Fore-notice
Securities Times, China
Securities Journal, Hong
Kong Wen Wei Po and
Juchao Web
http://www.cninfo.com.cn
March 6, 2010 Suggestive notice Ditto
March 9, 2010 Express of 2009 Annual Performance Ditto
April 20, 2010 Announcement on Resignation of Supervisor—Zhu Longqing Ditto
April 22, 2010 Announcement on Resolutions of 8th of 4th Session of Board of Directors’ Meeting Ditto
April 22, 2010 Announcement on Resolutions of 8th of 4th Session of Board of Supervisors’ Temporary Meeting Ditto
April 22, 2010 Summary of Annual Report 2009 Ditto
April 22, 2010 Full Text of Annual Report 2009
Juchao Web
http://www.cninfo.com.cn
April 22, 2010 Announcement on 2010 Daily Operational Related Transactions
Securities Times, China
Securities Journal, Hong
Kong Wen Wei Po and
Juchao Web
http://www.cninfo.com.cn
April 22, 2010 Announcement of Notice on Holding 15th (2009) Shareholders’ General Meeting of Shenzhen SEG Co., Ltd. Ditto
April 23, 2010 Rectification Announcement Ditto
April 29, 2010 Announcement on Resolutions of 33rd Temporary Board of Directors’ Meeting Ditto- 28 -
April 29, 2010 Announcement on 8th of 4th Session of Board of Supervisors’ Meeting Ditto
April 29, 2010 First Quarterly Report 2010 Ditto
April 29, 2010 Full Text of First Quarterly Report 2010 Ditto
May 6, 2010 Announcement of Supplementary Notice on Adding Temporary Proposals of 15th Shareholders’ Meeting Ditto
May 11, 2010 Announcement on Election for 5th Session Supervisors of Staff and Workers’ Representative Assembly Ditto
May 11, 2010 Rectification Announcement
Juchao Web
http://www.cninfo.com.cn
May 22, 2010 Announcement on Resolutions of 15th (2009)Shareholders’ General Meeting
Securities Times, China
Securities Journal, Hong
Kong Wen Wei Po and
Juchao Web
http://www.cninfo.com.cn
May 22, 2010 Announcement on Resolutions of 1st of 5th Session of Board of Directors’ Meeting Ditto
May 22, 2010 Announcement on Resolutions of 1st of 5th Session of Board of Supervisors’ Meeting Ditto
May 29, 2010 Announcement on Resolutions of 1st of 5th Session of Board of Supervisors’ Temporary Meeting
Juchao Web
http://www.cninfo.com.cn
May 29, 2010 Announcement on Resolutions of 1st of 5th Session of Board of Supervisors’ Meeting Ditto
June 5, 2010 Announcement on Resolutions of 1st of 5th Session of Board of Directors’ Temporary Meeting Ditto- 29 -
CHAPTER VI. FINANCIAL REPORT (UN-AUDITED)
Shenzhen SEG Co., Ltd.
Financial Statements for the First Half of the Year 2010
Balance Sheet
Prepared by: Shenzhen SEG Co., Ltd June 30, 2010 Unit: (RMB) Yuan
Period-end balance Year-beginning balance
Item
Consolidation Parent Company Consolidation Parent Company
Current assets:
Monetary capital 506,807,397.50 399,739,271.43 485,135,270.94 375,350,393.53
Transaction financial assets
Vouchers receivable
Accounts receivable 22,190,524.97 400,000.00 18,130,631.40 1,134,357.47
Advances 23,834,855.75 650,074.96 18,404,268.08 8,035,295.00
Interest receivable 2,460,821.92 2,460,821.92
Dividends receivable
Other receivables 13,883,170.20 45,366,886.08 11,971,998.74 45,306,466.00
Redemptory financial assets for
sale
Inventory 3,319,264.37 5,886,392.39
Non-current assets due within one
year
Other current assets
Total current assets 570,035,212.79 446,156,232.47 541,989,383.47 432,287,333.92
Non-current assets:
Financial assets available for sale 623,821.24 3,843,571.87 3,304,100.00
Held-to-maturity investment
Long-term accounts receivable
Long-term equity investment 126,492,061.30 307,589,560.34 119,732,099.86 300,829,598.90
Investment property 434,987,010.74 342,498,907.17 442,502,999.44 347,797,315.91
Fixed assets: 218,699,199.21 22,787,702.12 189,516,718.30 23,314,450.93
Engineering under construction 3,850,549.95 26,192,075.55
Engineering materials
Disposal of fixed assets
Intangible assets 4,598,594.45 569,297.40 4,756,432.31 651,865.38
Development expenses
Goodwill 10,328,927.82 10,328,927.82
Long-term expenses to be
apportioned
16,498,737.19 1,548,673.73 13,041,779.82 1,165,451.06
Deferred income tax assets 7,586,398.99 5,994,015.93 7,586,398.99 5,994,015.93- 30 -
Period-end balance Year-beginning balance
Item
Consolidation Parent Company Consolidation Parent Company
Other non-current assets
Total non-current assets 823,665,300.89 680,988,156.69 817,501,003.96 683,056,798.11
Total assets
1,393,700,513.6
8
1,127,144,389.16 1,359,490,387.43 1,115,344,132.03
Responsible person of the
Company: Wang Kou
Responsible financial officer: Li Lifu
Responsible person of the accounting
institution: Ying Huadong
Balance Sheet (Continued)
Prepared by: Shenzhen SEG Co., Ltd June 30, 2010 Unit: (RMB)
Yuan
Period-end balance Year-beginning balance
Item
Consolidation Parent Company Consolidation Parent Company
Current liabilities:
Short-term loans
Transaction financial liabilities
Vouchers payable
Accounts payable 14,881,485.86 2,217,085.12 8,225,509.02 2,178,169.12
Advances from customers 111,403,728.75 59,909,745.03 105,563,890.39 65,801,272.52
Commissions payable
Wages payable 1,404,104.26 63,774.06 4,261,476.99 2,065,724.98
Taxes payable 6,238,344.56 8,222,931.26 24,421,758.66 24,773,634.49
Interest payable
Dividends payable 1,716,515.57 153,403.29 921,420.73 153,403.29
Other payables 94,185,967.86 39,489,099.59 86,454,289.91 41,932,495.62
Non-current liabilities due
within one year
Other current liabilities
Total current liabilities 229,830,146.86 110,056,038.35 229,848,345.70 136,904,700.02
Non-current liabilities:
Long-term loans
Bonds payable
Long-term accounts payable
Special payables
Anticipated liabilities
Deferred income tax liabilities 22,077,002.50 23,160,034.29 547,125.71
Other non-current liabilities
Total non-current liabilities 22,077,002.50 0.00 23,160,034.29 547,125.71
Total liabilities 251,907,149.36 110,056,038.35 253,008,379.99 137,451,825.73
Owners' equity (shareholders'
equity)
Paid-up capital (or share 784,799,010.00 784,799,010.00 784,799,010.00 784,799,010.00- 31 -
Period-end balance Year-beginning balance
Item
Consolidation Parent Company Consolidation Parent Company
capital)
Capital public reserve 407,598,478.27 404,980,399.08 396,922,482.95 394,348,208.41
Less: Treasury shares
vi. Special reserve
Surplus public reserve 102,912,835.67 102,912,835.67 102,912,835.67 102,912,835.67
General risk provision
Retained profits -241,535,078.81 -275,603,893.94 -268,431,923.52 -304,167,747.78
Translation difference of the
financial statements in foreign
currency
-500,157.03 -542,916.63
Total owners' equity attributable
to the parent company
1,053,275,088.10 1,017,088,350.81 1,015,659,488.47 977,892,306.30
Minority shareholders' equity 88,518,276.22 90,822,518.97
Total owners' equity 1,141,793,364.32 1,017,088,350.81 1,106,482,007.44 977,892,306.30
Total liabilities and owner's
equity
1,393,700,513.68 1,127,144,389.16 1,359,490,387.43 1,115,344,132.03
Responsible person of the
Company: Wang Kou
Responsible financial officer: Li Lifu
Responsible person of the accounting
institution: Ying Huadong
Profit Statement
Prepared by: Shenzhen SEG Co., Ltd January - June 2010 Unit: (RMB) Yuan
Amount of the current period Amount of the previous period
Item
Consolidation Parent Company Consolidation Parent Company
I. Total operating income 178,297,428.20 56,215,822.38 137,882,485.07 54,278,634.05
Thereinto: Operating revenue 178,297,428.20 56,215,822.38 137,882,485.07 54,278,634.05
Interest income
Earned premiums
Commissions charge and
commission income
II. Total operating cost 136,347,181.68 26,934,447.67 92,401,761.86 22,786,140.09
Thereinto: Operating cost 115,533,447.61 19,408,492.15 78,631,266.50 20,303,203.74
Interest expenses
Commission charge and
commission payouts
Surrender value
Net compensation payouts
Net insurance deposit accrued
Insurance dividends payouts
Reinsurance expenses
Business taxes and surcharges 7,265,802.65 3,091,611.88 6,355,985.61 3,111,659.92
Sale expenses 2,515,389.39 1,353,048.92
Management expenses 13,537,218.21 7,434,954.20 16,241,868.85 8,804,377.41- 32 -
Amount of the current period Amount of the previous period
Item
Consolidation Parent Company Consolidation Parent Company
Financial expenses -2,504,676.18 -3,000,610.56 -6,226,108.02 -5,533,100.98
Loss from asset impairment -3,954,300.00 -3,900,000.00
Plus: Income from change of sound
value (Loss is marked with "-")
Income from investment (Loss is
marked with "-")
-2,864,222.75 6,518,419.69 -186,150,878.70 -182,437,588.32
Thereinto: Income from
investment in joint ventures and
associated enterprises
-214,081,672.20 -214,081,672.20
Income from exchange (Loss is
marked with "-")
III. Operating profit (Loss is marked
with "-")
39,086,023.77 35,799,794.40 -140,670,155.49 -150,945,094.36
Plus: Non-operating income 592,004.10 182,798.62 2,039,063.07 1,636,036.40
Less: Non-operating expenses 471,754.44 328,294.09 109,809.91 612,000.00
Thereinto: Loss from disposal of
non-current assets
IV. Total profit (Total loss is marked
with "-")
39,206,273.43 35,654,298.93 -138,740,902.33 -149,921,057.96
Less: Income tax expenses 9,914,971.86 7,090,445.09 4,385,985.58
V. Net profit (Net loss is marked with
"-")
29,291,301.57 28,563,853.84 -143,126,887.91 -149,921,057.96
Net profit attributable to
shareholders of the parent company
26,896,844.71 28,563,853.84 -146,083,519.02 -149,921,057.96
Minority shareholders' gains and
losses
2,394,456.86 2,956,631.11
VI. Earnings per share
i. Basic earnings per share 0.0343 0.0364 -0.1861 -0.1910
ii. Diluted earnings per share 0.0343 0.0364 -0.1861 -0.1910
VII. Other comprehensive income 10,740,742.78 10,632,190.67 606,049.10 536,128.61
VIII. Total comprehensive income 40,032,044.35 39,196,044.51 -142,520,838.81 -149,384,929.35
Total comprehensive income
attributable to shareholders of the parent
company
37,615,599.63 39,196,044.51 -145,545,205.98 -149,384,929.35
Total comprehensive income
attributable to minority shareholders
2,416,444.72 3,024,367.17
Responsible person of the Company:
Wang Kou
Responsible financial officer: Li Lifu
Responsible person of the accounting
institution: Ying Huadong- 33 -
Cash Flow Statement
Prepared by: Shenzhen SEG Co., Ltd January - June 2010 Unit: (RMB) Yuan
Amount of the current period Amount of the previous period
Item
Consolidation Parent Company Consolidation Parent Company
I. Cash flow from operating activities
Cash received from sales and
service
175,732,532.01 51,629,618.39 148,836,562.69 40,672,087.76
Tax and fee refunds
Other cash received relating to
operating activities
147,664,961.63 76,127,934.08 84,028,548.49 58,845,676.61
Subtotal of cash inflow from
operating activities
323,397,493.64 127,757,552.47 232,865,111.18 99,517,764.37
Cash paid for goods and service 72,688,153.10 10,604,204.24 69,625,154.99 3,868,260.60
Cash paid to and on behalf of
employees
22,357,018.62 10,180,306.48 21,383,962.20 11,975,128.65
Taxes paid 71,085,749.55 59,254,011.26 47,206,886.40 32,107,827.45
Other cash paid relating to
operating activities
129,017,659.37 36,677,487.72 72,335,734.68 37,078,268.86
Subtotal of cash outflow for
operating activities
295,148,580.64 116,716,009.70 210,551,738.27 85,029,485.56
Net cash flow from operating
activities
28,248,913.00 11,041,542.77 22,313,372.91 14,488,278.81
II. Cash flow from operating activities
Cash received from withdrawal of
investment
38,645,705.01 38,075,705.01
Cash received from investment
income
9,382,537.10 5,606,656.24 16,657,645.49
Net cash received from disposal of
fixed assets, intangible assets and other
long-term assets
4,362,974.77 4,215,980.77 209,500.00
Net cash received from disposal of
subsidiaries and other business units
24,511,448.87 38,280,000.00
Other cash received relating to
investment activities
Subtotal of cash inflow from
investment activities
4,362,974.77 13,598,517.87 68,973,310.12 93,013,350.50
Cash paid for purchase and
construction of fixed assets, intangible
assets and other long-term assets
7,475,604.60 191,784.25 1,746,785.46 439,410.00
Cash paid for investment 69,000,000.00
Net cash paid for acquisition of
subsidiaries and other business units
67,801,287.47
Other cash paid relating to
operating activities
2,228,261.00
Subtotal of cash outflow for 7,475,604.60 191,784.25 71,776,333.93 69,439,410.00- 34 -
Amount of the current period Amount of the previous period
Item
Consolidation Parent Company Consolidation Parent Company
investment activities
Net cash flow from
investment activities
-3,112,629.83 13,406,733.62 -2,803,023.81 23,573,940.50
III. Cash flow from financing
activities:
Cash received from attraction of
investment
Cash received from obtainment of
loans
Cash received from issuance of
bonds
Other cash received relating to
financing activities
Subtotal of cash inflow from
financing activities
Cash paid for repayment of debts 60,293.72
Cash paid for distribution of
dividends and profit or repayment of
interest
3,406,502.37 18,487,494.04 15,242,627.67
Other cash paid relating to
financing activities
Subtotal of cash outflow for
financing activities
3,406,502.37 18,547,787.76 15,242,627.67
Net cash flow from financing
activities
-3,406,502.37 -18,547,787.76 -15,242,627.67
IV. Influence of exchange rate
fluctuation on cash and cash equivalents
-57,654.24 -59,398.49 1,305.92
V. Net Increase of cash and cash
equivalents
21,672,126.56 24,388,877.90 963,867.26 22,819,591.64
Plus: Period-beginning balance of
cash and cash equivalents
485,135,270.94 375,350,393.53 400,172,059.09 298,174,735.64
VI. Year-end balance of cash and cash
equivalents
506,807,397.50 399,739,271.43 401,135,926.35 320,994,327.28
Responsible person of the Company:
Wang Kou
Responsible financial officer: Li Lifu
Responsible person of the accounting
institution: Ying Huadong- 35 -
Consolidated Statement on Changes of Owners' Equity
Prepared by: Shenzhen SEG Co., Ltd First half of the year 2010 Unit: (RMB) Yuan
Amount of the current period Amount of the same period of the previous year
Owners' equity attributable to the parent company Owners' equity attributable to the parent company
Item Paid-up capital
(or share
capital)
Capital
public reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits Others
Minority
shareholders'
equity
Total owners'
equity
Paid-up capital
(or share
capital)
Capital
public reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits Others
Minority
shareholders'
equity
Total owners'
equity
I. Ending
balance of the
previous year
784,799,010.00 396,922,482.95 102,912,835.67 -268,431,923.52 -542,916.63 90,822,518.97 1,106,482,007.44 784,799,010.00 351,257,039.42 102,912,835.67 59,356,134.45 -552,897.69 29,033,408.85 1,326,805,530.70
Plus: Change
due to alteration
of accounting
policies
Correction to
errors of the
previous period
Others
II. Beginning
balance of the
current year
784,799,010.00 396,922,482.95 102,912,835.67 -268,431,923.52 -542,916.63 90,822,518.97 1,106,482,007.44 784,799,010.00 351,257,039.42 102,912,835.67 59,356,134.45 -552,897.69 29,033,408.85 1,326,805,530.70
III. Increase and
decrease of the
current year
(Decrease is
marked with "-")
0.00 10,675,995.32 0.00 0.00 0.00 0.00 26,896,844.71 42,759.60 -2,304,242.75 35,311,356.88 536,128.61 -161,779,499.22 2,184.43 68,194,137.12 -93,047,049.06
i. Net profit 26,896,844.71 2,394,456.86 29,291,301.57 -146,083,519.02 2,956,631.11 -143,126,887.91
ii. Other
comprehensive
income
10,675,995.32 42,759.60 21,987.86 10,740,742.78 -291,723.79 2,184.43 67,736.06 -221,803.30
Subtotal of the 10,675,995.32 26,896,844.71 42,759.60 2,416,444.72 40,032,044.35 -291,723.79 -146,083,519.02 2,184.43 3,024,367.17 -143,348,691.21- 36 -
Amount of the current period Amount of the same period of the previous year
Owners' equity attributable to the parent company Owners' equity attributable to the parent company
Item Paid-up capital
(or share
capital)
Capital
public reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits Others
Minority
shareholders'
equity
Total owners'
equity
Paid-up capital
(or share
capital)
Capital
public reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits Others
Minority
shareholders'
equity
Total owners'
equity
above-mentioned
amounts in items
i and ii
iii. Capital
invested or
decreased by
owners
827,852.40 69,276,545.23 70,104,397.63
11. Capital
invested by
owners
69,276,545.23 69,276,545.23
22. Amount of
share-based
payment
recorded into
owners' equity
3. Others 827,852.40 827,852.40
iv. Profit
distribution
-4,720,687.47 -4,720,687.47 -15,695,980.20 -4,106,775.28 -19,802,755.48
1. Accrual of
surplus public
reserve
2. Accrual of
general risk
provision
3. Amount
distributed to
-4,720,687.47 -4,720,687.47 -15,695,980.20 -4,106,775.28 -19,802,755.48- 37 -
Amount of the current period Amount of the same period of the previous year
Owners' equity attributable to the parent company Owners' equity attributable to the parent company
Item Paid-up capital
(or share
capital)
Capital
public reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits Others
Minority
shareholders'
equity
Total owners'
equity
Paid-up capital
(or share
capital)
Capital
public reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits Others
Minority
shareholders'
equity
Total owners'
equity
owners (or
shareholders)
4. Others
v. Internal
carrying forward
of owners' equity
1. Capital public
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
vi. Special
reserve
1. Accrual of the
current period
2. Amount- 38 -
Amount of the current period Amount of the same period of the previous year
Owners' equity attributable to the parent company Owners' equity attributable to the parent company
Item Paid-up capital
(or share
capital)
Capital
public reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits Others
Minority
shareholders'
equity
Total owners'
equity
Paid-up capital
(or share
capital)
Capital
public reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits Others
Minority
shareholders'
equity
Total owners'
equity
utilized in the
current period
IV. Ending
balance of the
current period
784,799,010.00 407,598,478.27 102,912,835.67 -241,535,078.81 -500,157.03 88,518,276.22 1,141,793,364.32 784,799,010.00 351,793,168.03 102,912,835.67 -102,423,364.77 -550,713.26 97,227,545.97 1,233,758,481.64
Responsible person of the Company: Wang Kou Responsible financial officer: Li Lifu Responsible person of the accounting institution: Ying Huadong
Consolidated Statement on Changes of Owners' Equity of the Parent Company
Prepared by: Shenzhen SEG Co., Ltd First half of the year 2010 Unit: (RMB) Yuan
Amount of the current period Amount of the same period of the previous year
Item
Paid-up capital
(or share
capital)
Capital public
reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits
Total owners’
equity
Capital (Share
capital) actually
received
Capital public
reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits
Total owners’
equity
I. Ending balance
of the previous
year
784,799,010.00 394,348,208.41 102,912,835.67 -304,167,747.78 977,892,306.30 784,799,010.00 347,597,818.69 102,912,835.67 53,622,664.91 1,288,932,329.27
Plus: Change
due to alteration of
accounting policies
0.00
Correction to
errors of the
previous period
0.00
Others 0.00
II. Beginning
balance of the
784,799,010.00 394,348,208.41 102,912,835.67 -304,167,747.78 977,892,306.30 784,799,010.00 347,597,818.69 0.00 102,912,835.67 0.00 53,622,664.91 1,288,932,329.27- 39 -
Amount of the current period Amount of the same period of the previous year
Item
Paid-up capital
(or share
capital)
Capital public
reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits
Total owners’
equity
Capital (Share
capital) actually
received
Capital public
reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits
Total owners’
equity
current year
III. Increase and
decrease of the
current year
(Decrease is
marked with “-“)
10,632,190.67 28,563,877.02 39,196,067.69 401,183.46 -165,617,038.16 -165,215,854.70
i. Net Profit 28,563,877.02 28,563,877.02 0.00 -149,921,057.96 -149,921,057.96
ii. Other
comprehensive
income
10,632,190.67 10,632,190.67 -426,668.94 -426,668.94
Subtotal of the
above-mentioned
amounts in items I
and ii
10,632,190.67 28,563,877.02 39,196,067.69 -426,668.94 -149,921,057.96 -150,347,726.90
iii. Capital
invested or
decreased by
owners
827,852.40 0.00 0.00 0.00 0.00 827,852.40
1. Capital
invested by owners
0.00
2. Amount of
share-based
payment recorded
into owners’ equity
0.00
3. Others 827,852.40 827,852.40
iv. Profit
distribution
0.00 0.00 0.00 0.00 -15,695,980.20 -15,695,980.20- 40 -
Amount of the current period Amount of the same period of the previous year
Item
Paid-up capital
(or share
capital)
Capital public
reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits
Total owners’
equity
Capital (Share
capital) actually
received
Capital public
reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits
Total owners’
equity
1. Accrual of
surplus public
reserve
0.00
2. Accrual of
general risk
provision
0.00
3. Amount
distributed to
owners (or
shareholders)
-15,695,980.20 -15,695,980.20
4. Others 0.00
v. Internal
carrying forward of
owners’ equity
0.00 0.00
1. Capital
public reserve
transferred to
increase capital (or
share capital)
0.00
2. Surplus
public reserve
transferred to
increase capital (or
share capital)
0.00
3. Surplus
public reserve
compensating
0.00 0.00 0.00 0.00 0.00 0.00- 41 -
Amount of the current period Amount of the same period of the previous year
Item
Paid-up capital
(or share
capital)
Capital public
reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits
Total owners’
equity
Capital (Share
capital) actually
received
Capital public
reserve
Less:
Treasury
shares
vi.
Special
reserve
Surplus public
reserve
General
risk
provision
Retained profits
Total owners’
equity
losses
4. Others 0.00
vi. Special
reserve
0.00
1. Accrual of
the current period
0.00
2. Amount
utilized in the
current period
0.00
IV. Ending balance
of the current
period
784,799,010.00 404,980,399.08 102,912,835.67 -275,603,870.76
1,017,088,373.9
9
784,799,010.00 347,999,002.15 102,912,835.67 -111,994,373.25 1,123,716,474.57
Responsible person of the Company: Wang Kou Responsible financial officer: Li Lifu Responsible person of the accounting institution: Ying Huadong- 42 -
Shenzhen SEG Co., Ltd
Notes to the Financial Statements for the First Half of the
Year 2010
2． Company Profile
Shenzhen SEG Co., Ltd. (hereinafter referred to as the “Company” or “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 authorities of Shenzhen Municipality and the State in
accordance with relevant provisions in the Company Law of the People’s Republic of China. The
Company received the Business License for Enterprise Legal Person Shen Si Zi Code: N16886,
with the registration number of 4403011014290. Upon the approval of the securities
administration departments of Shenzhen Municipality and the State, the Company’s B-shares and
A-shares started to be listed and traded on Shenzhen Stock Exchange respectively in July and
December 1996. The Company deals with the leasing industry and the business service industry.
On June 7, 2006, a resolution was adopted at the general meeting of shareholders on the share
merger reform of the Company. According to the plan on the fixed conversion of capital public
reserve into increase of capital share, the Company distributed such converted and increased
capital share to the tradable A-share shareholders. Such shareholders obtained 4.6445 shares of
converted and increased capital share for each 10 shares, which totaled 40,233,322 shares of
converted and increased capital share. As a result, relevant non-tradable A-shares were also
authorized to be listed and circulated. 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 shareholders under fixed arrangements.
Up to June 30th, 2010, the total capital share of the company had amounted to 784,799,010 shares,
including 35,464 restricted shares and 784,763,546 unrestricted shares.
Business Scope: Domestic commerce, material supply and sales (excluding specially
operated, specially controlled and specially sold goods), establishment of industries
(specific projects to be declared additionally), economic information consultation,
property rental, property brokerage, setup of the specific SEG electronics market
(specific market license to be applied for additionally). Location of Registration: 31/F,
Tower A, Qunxing Plaza, Huaqiang Road (N), Futian District, Shenzhen
The basic organizational structure of the Company:
General meeting of shareholders
Board of directors
Supervisory Committee
Board Secretary The Company’s management Special committee
Office
Financial Department
Auditing Department
Planning Department
Human Resource Department
Property Operation Department
Marketing Operation Department- 43 -
2．Main Accounting Policies, Accounting Estimates and Errors of the Previous Period
2.1Basis of preparation of the financial statements
The Company conducts confirmation and measurement on the basis of the going-concern principle,
according to the transactions and matters that have actually occurred and in accordance with the
Accounting Standard for Business Enterprises - Basic Standard and other provisions in the
Accounting Standard for Business Enterprises and prepares the financial statements on such basis.
2.2Statement on compliance to ASBE
The financial statements prepared by the Company comply with the requirements of the
Accounting Standard for Business Enterprises (ASBE) and truthfully and completely reflect
relevant information of the financial position, operating results, and cash flows of the Company.
2.3Accounting period
A fiscal year lasts from January 1st to December 31st of the Gregorian calendar.
2.4Recording currency
Renminbi (RMB) is the recording currency of the financial statements of the Company.
The currency of the main economic environment where an overseas subsidiary operates is the
recording currency of the subsidiary, which is translated into RMB when the financial statements
are prepared.
2.5Accounting 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
1. Merger of the enterprises under the control of a same entity
The assets and liabilities acquired by the Company in the merger are measured according to
the book value of the merged party on the merger date. The capital public reserve is adjusted
according to the difference between the book value of the 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 public reserve is not sufficient for offsetting.
All direct relevant expenses paid by the Company during the merger, including the auditing
fee, evaluation fee, and legal fee for the merger, are recorded into current gains and losses at the
time when the fees occur.
The service fee and commission fee relating to the issuance of equity securities during the
merger are offset against the premium income of equity securities. The retained earnings are offset
if the premium income is not sufficient for offsetting.
If the accounting policies of the merged party are not same with those of the Company, the- 44 -
Company makes adjustments in accordance with its own accounting policies on the merger date
and then makes confirmations in accordance with the Accounting Standard for Business
Enterprises.
2. Merger of the enterprises not under the control of a same entity
The assets paid and the liabilities occurring or being assumed by the Company as the
consideration on the merger date are measured according to their sound value. The difference
between the sound value and the book value is recorded into current gains and losses.
The Company makes distributions on the consolidated cost on the purchasing date.
When the merger cost is more than the sound value of the recognizable net assets of the
purchased party, the difference is confirmed by the Company as goodwill. Otherwise, the
difference is recorded into current gains and losses.
For other assets of the purchased party (not limited to the already confirmed assets of the
purchased party) acquired in the merger, except intangible assets, if economic interests generated
from the assets are likely to flow into the Company and the sound value of the interests can be
measured reliably, the interests are separately confirmed and measured according to their sound
value. The intangible assets whose sound value can be measured reliably are separately confirmed
as intangible assets and measured according to their sound value. For other liabilities of the
purchased party acquired in the merger, except contingent liabilities, if economic interests are
likely to flow out of the Company because of relevant obligations conducted and the sound value
of the interests can be measured reliably, the interests are separately confirmed and measured
according to the sound value. The contingent liabilities of the purchased party acquired in the
merger, whose sound value can be measured reliably, are confirmed as liabilities and measured
according to their sound value.
2.6Preparation method for the consolidated financial statements
The scope of the consolidated financial statements of the Company is determined based on the
share-controlling relationship, and all subsidiaries are included in the scope.
The accounting policies and accounting period adopted by all the subsidiaries included in the
consolidation scope should be the same with those of the Company. Otherwise, the Company
makes necessary adjustments according to its own accounting policies and accounting period
when preparing the consolidated financial statements.
The consolidated financial statements are prepared by the Company based on individual financial
statements of the Company and subsidiaries as well as other relevant materials after the long-term
equity investment in subsidiaries has been adjusted by the equity method.
During consolidation, the influence on the consolidated balance sheet, the consolidated profit
statement, the consolidated cash flow statement and the consolidated statement on changes of
owner’s equity, by internal transactions between the Company and subsidiaries and among the
subsidiaries, is offset.
When the current losses undertaken by minority shareholders of a subsidiary surpass the shares
owned by the minority shareholders in the period-beginning owner’s equity of the subsidiary, the
difference is offset against the owner’s equity of the Company if the Articles of Association or
relevant agreements do not provide that minority shareholders have an obligation to undertake
them; the difference is offset against the owner’s equity of minority shareholders if the Articles of- 45 -
Association or relevant agreements provide that minority shareholders should undertake them.
The period-beginning amount of the consolidated balance sheet is adjusted if a subsidiary is
increased in the report period through the merger of the enterprises under the control of a same
entity. The income, expenses and profits of the subsidiary from the beginning of the period when it
was merged to the end of the report period are included in the consolidated profit statement. The
cash flow of the subsidiary from the beginning of the period when it was merged to the end of the
report period is included in the consolidated cash flow statement.
The period-beginning amount of the consolidated balance sheet is not adjusted if a subsidiary is
increased in the report period through the merger of the enterprises not under the control of a same
entity. The income, expenses and profits of the subsidiary from the purchasing date to the end of
the report period are included in the consolidated profit statement. The cash flow of the subsidiary
from the purchasing date to the end of the report period is included in the consolidated cash flow
statement.
If the Company disposes a subsidiary in the report period, the income, expenses and profits of the
subsidiary from the beginning of the 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.
2.7Standards for determination of cash and cash equivalents
In the preparation of the cash flow statement, the cash on hand and the bank deposits available for
payment at any time, owned by the Company, are confirmed as cash. The investments that meet
the four conditions of shorter term (to be mature within 3 months from the purchasing date),
strong liquidity, easiness in being converted into known cash, very small risk of value fluctuation
are confirmed as cash equivalents.
2.8Foreign currency businesses and translation of the financial statements in
foreign currency
1. Foreign currency businesses
Foreign currency businesses are recorded into accounts after relevant amounts are translated
into RMB according to the sight exchange rate on the transaction date as the exchange rate for
translation.
The balance of the monetary items in foreign currency is translated according to the sight
exchange rate on the balance sheet date while the translation difference caused is all recorded into
current gains and losses, except the difference from the special foreign currency loans related to
the assets whose purchase and construction meet the conditions for capitalization, which are dealt
with according to the principles for capitalization of loan expenses. The non-monetary items in
foreign currency measured by the historical cost method are translated according to the sight
exchange rate on the transaction date and the amount in the recording currency is not changed.
The non-monetary items in foreign currency measured by sound value are translated according to
the sight exchange rate on the confirmation date of the sound value while the translation difference
caused is recorded into current gains and losses or into capital public reserve.
2. Translation of the financial statements in foreign currency- 46 -
The assets and liabilities items in the balance sheet are translated according to the sight
exchange rate on the balance sheet date. The owners’ equity items other than "retained profits" are
translated according to the sight exchange rate at the time of incurrence. The income and expense
items in the profit statement are translated according to the sight exchange rate on the transaction
date. The translation difference in the financial statements in foreign currency caused by the
above-mentioned methods is listed separately under the owner’s equity items in the balance sheet.
When an overseas operation is disposed, the translation difference in the financial statements
in foreign currency related to the overseas operation, which is listed under the owner’s equity
items in the balance sheet, is transferred from the owner’s equity items to current gains and losses
of the period when the disposal is carried out. When an overseas operation is partly disposed, the
translation difference is calculated according to the proportion of the disposal, which is transferred
to current gains and losses of the period when the disposal is carried out.
2.9Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
1. Classification of financial instruments
According to the purposes of the acquisition and holding of financial assets and the
assumption of financial debts, the management classifies them as follows: financial assets and
liabilities measured according to the sound value whose changes are recorded into current gains
and losses, including transaction monetary assets or liabilities and the financial assets or liabilities
(and those that can be directly assigned as financial assets or liabilities measured according to
sound value and whose changes are recorded into current gains and losses), held-to-maturity
securities, loans and accounts receivable, financial assets available for sale, and other financial
liabilities.
2. Confirmation basis and measurement method for financial instruments
(1) Financial assets (liabilities) measured by sound value and with changes included in the
current gains and losses
The sound value (with the cash dividends declared but not yet distributed or the
bond dividends not yet received with the interest payment period expired deducted) is
taken as the initial confirmed amount at the time of acquisition. Relevant transaction
expenses are recorded into current gains and losses.
The interests and cash dividends obtained during the time of holding are confirmed
as investment income. The changes of sound value are recorded into current gains and
losses at the end of the period.
At the time of disposal, the difference between the sound value and the initial
recorded amount in the account is confirmed as investment income and the gains and
losses from changes of sound value are adjusted at the same time.
(2) Held-to-maturity investment
At the time of acquisition the sum of the sound value (with the bond interests
deducted, which are not yet received with the term of interest payment expired) and
relevant transaction expenses are taken as the initial confirmed amount.- 47 -
During the time of holding, the interest income is calculated and confirmed in
accordance with the amortized cost and the actual interest rates (the denomination
interest rate is adopted if the actual interest rates only have slight differences with the
denomination interest rate) and recorded into 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 recorded into investment income.
(3) Accounts receivable
For the accounts receivable formed from the commodities sold or labor services
provided by the Company and those of other enterprises held by the Company other
than the priced debt tools in the active market, including accounts receivable, notes
receivable, advances, other accounts receivable, long-term accounts receivable, the price
money in contracts or agreements of the purchaser is taken as the initial confirmed
amount. For those of a financing nature, the current value is taken as the initial
confirmed amount.
At the time of collection or disposal, the difference between the price of acquisition
and the book value of such accounts receivable are recorded into current gains and
losses.
(4) Financial assets available for sale
The sum of the sound value (with the cash dividends declared but not yet
distributed or the bond dividends not yet received with the interest payment period
expired deducted) and relevant transaction expenses are taken as the initial confirmed
amount at the time of obtainment.
The interests or cash dividends obtained during the time of holding are confirmed
as investment income. Such assets are measured according to the sound value at the end
of the period and the changes of sound value are recorded into capital public reserve
(other capital public reserve).
At the time of disposal, the difference between the price of acquisition and the
book value of such financial assets is recorded into investment gains and losses. At the
same time, the amount of the disposed part of the assets originally recorded in the
accumulative amount of the changes in the sound value of owners’ equity is transferred
and recorded into investment gains and losses.
(5) Other financial liabilities
The sum of the sound value of such assets and relevant transaction expenses is
taken as the initial confirmed amount. The amortized cost is adopted in the subsequent
measurement.
3. Confirmation basis and measurement method for financial assets transfer
In the case of the transfer of the financial assets of the Company, if almost all the risks and
returns in the ownership rights of the financial assets are transferred to the assignee, the
confirmation of such financial assets is terminated, and if almost all the risks and returns in the
ownership rights of such financial assets are retained, the confirmation of such financial assets is
not terminated.- 48 -
In the judgment whether a financial asset transfer meets the above conditions for termination
of its confirmation, the principle of attaching more importance to 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 confirmation, the
difference of the following two amounts is recorded into current gains and losses.
(1) The book value of the transferred financial assets;
(2) The sum of the consideration received due to the transfer and the accumulated amount
of the changes in sound value originally recorded in owners’ equity (involving the
situation when the transferred financial assets are the financial assets available for sale).
If the partial transfer of financial assets meets the conditions for termination of confirmation,
the part with its confirmation terminated and that with its confirmation not terminated, among the
book value of all the transferred financial assets, are apportioned separately according to their
relevant sound value while the difference between the following two amounts is recorded into
current gains and losses.
(1) The book value of the part with its confirmation terminated;
(2) The sum of the consideration of the part with its confirmation terminated and the part of
the accumulated amount of the changes in sound value originally recorded in owners’
equity corresponding to the part with its confirmation terminated (involving the situation
when the transferred financial assets are the financial assets available for sale).
Where the financial assets transfer does not meet the conditions for termination of
confirmation, the confirmation of such financial assets is continued. The received consideration is
confirmed as a financial liability.
4. Conditions for termination of confirmation of financial liabilities
If all or a part of current obligations of a financial liability are discharged, the confirmation of
the financial liability or part of it is terminated. If the Company signs an agreement with the
creditor to substitute an existing financial liability by assuming a new financial liability and the
contract terms for the new liability and the existing one are not consistent, the confirmation of the
existing financial liability is terminated and the new financial liability is confirmed in the
meantime.
If material alteration has been made to all or a part of contract terms of the existing financial
liability, the confirmation of the existing liability or part of it is terminated and, in the meantime,
the liability after the alteration is confirmed 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 recorded into current gains and losses.
If the Company repurchases a part of a financial liability, the total book value of the liability
is allocated on the purchasing date according to the respective relative sound value of the part with
its confirmation continued and that with its confirmation terminated. The difference between the
book value allocated to the part with its confirmation terminated and the consideration (including
non-cash assets or the new liability assumed) is recorded into current gains and losses.- 49 -
5. Methods for determination of the sound value of financial assets and liabilities
The prices in the active market are referred to with respect to both the financial assets and
liabilities of the Company, which are measured by sound value.
6. Accrual of impairment provision for financial assets (excluding accounts receivable)
(1) Impairment provision for financial assets available for sale:
If the sound value of the financial assets available for sale sees a large decrease at
the end of the period or it is anticipated that such decrease tendency is not provisional
upon the comprehensive analysis of various relevant factors, then it can be determined
that impairment occurred to such assets. All the accumulative losses formed from the
decrease of the sound value originally and directly recorded into owners’ equity are
transferred out and relevant impairment loss is confirmed.
(2) Impairment provision for held-to-maturity investments
The measurement of the impairment loss of held-to-maturity investments is carried
out with reference to the method for the measurement of the impairment loss of
accounts receivable.
2.10Accounts receivable
1. Confirmation and accrual method for the bad debt provision for accounts receivable
with significant amount individually.
Criteria for being a significant individual amount:
Top five accounts receivable
At the end of the period, impairment tests should be conducted separately on accounts
receivable of large amount. If there are objective evidences proving that such accounts receivable
suffer impairment, impairment losses should be confirmed and bad debt provision accrued,
according to the difference of the current value of their future cash flow lower than their book
value. For the accounts receivable and other receivables for which impairment tests show no
indications of impairment, the bad debt provision is accrued by the aging analysis method taking
the duration as the feature of credit risks.
2. Determination basis and accrual method for accounts receivable with an insignificant
amount individually but featuring great risk as a combination based on credit risk
characteristics:
For the accounts whose recovery faces a great risk, the bad debt provision is accrued by the
specific identification method for those whose bad debt rate exceeds 40%. The difference between
the current value of the estimated future cash flow and its book value, if the former is less than the
latter, is accrued as the bad debt provision and recorded into current gains and losses.
3. For other accounts receivable with an insignificant amount individually, the bad debt
provision is accrued according to the proportion determined by the account duration
analysis method.- 50 -
Basis for the determination of the combination based on credit risk characteristics: According
to the duration of accounts
Accrual method determined according to the combination based on credit risk characteristics:
Duration of the accounts
Accrual proportion of accounts
receivable (%)
Accrual proportion of other
accounts receivable (%)
Within one year (including one
year)
0 0
1-2 years 5 5
2-3 years 10 10
Over 3 years 20 20
2.11Inventory
1. Classification of inventory
Inventory is classified as follows: goods on route, raw materials, circulating materials,
in-stock goods, goods in process, delivered goods, consigned processing materials and
consumable biological assets.
2. Pricing method for delivered inventory
The pricing of the inventory is made according to the weighted average method at the time of
delivery.
3. Determination basis for the net realizable value of inventory and accrual method for
inventory decline provision
After a complete counting and examination of the inventory at the end of the period, the
inventory decline provision is accrued or adjusted according to the lower between the inventory
cost and the net realizable value.
The net realizable value of the goods inventory directly for sale such as finished products,
goods and materials for sale is determined in regular production and operation according to the
amount of the estimated sale price of such inventory minus estimated sale expenses and relevant
taxes. That of the material inventory to be processed is determined in regular production and
operation according to the estimated sale price of the finished products produced minus estimated
sale expenses and relevant taxes. That of the inventory held for the performance of sale or service
contracts is calculated on the basis of the contract price. Where the quantity of the inventory is
more than the quantity ordered in the sale contract, the net realizable value of the surplus of such
inventory is calculated on the basis of the general sale price.
At the end of the period, the inventory decline provision is accrued according to individual
inventory items. However, the decline provision for the inventory of a large quantity and a low
unit price is accrued according to the type of the inventory. For the inventory involving the
product series produced and sold in the same region, having identical or similar final use or
purpose, and being difficult to be separated from other items for measurement, relevant inventory
decline provision is accrued in a combined manner.
Where the factors previously causing the record of the reduction of inventory value stop to
exist, the reduced amount is restored and transferred back from the amount of the originally- 51 -
accrued inventory decline provision. The transferred amount is recorded into current gains and
losses.
4. Inventory taking system
The perpetual inventory method is adopted in the stock inventory.
5. Amortization method for low value consumables and packaging materials
For low value consumables, the one-off amortization method is adopted.
For packaging materials, the one-off amortization method is adopted
2.12Long-term equity investment
1. Determination of the initial investment cost
(1) Long-term equity investment formed from enterprise merger
In the merger of the enterprises under the control of a same entity, if the Company
pays cash, transfers non-monetary assets or bears debts, and issues equity securities as
the consideration of the merger, the book value of the shares of the owners’ equity
obtained from the merged party on the merger date is taken as the initial investment cost
of the long-term equity investment. The capital public reserve is adjusted for the
difference between the initial investment cost of the long-term equity investment and the
consideration and retained profits are adjusted if the capital public reserve is not
sufficient for off-setting. All direct relevant expenses during the merger, including the
auditing fee, evaluation fee and legal fee for the merger, are recorded into current gains
and losses at the time when the fees occur.
In the merger of the enterprises not under the control of a same entity: the cost for
the merger is the sound value of the assets paid, the liabilities incurred or assumed, and
the equity securities issued by the purchasing party for the acquisition of the control of
the purchased party as well as all direct relevant expenses for the merger on the
purchasing date. In the merger of enterprises realized through several exchange
transactions, the cost for the merger is the total amount of cost for different single
transactions. If future items likely to influence the merger cost, for which a relevant
agreement has been reached, are estimated very possible to occur on the purchasing date
and the amount of their influence on the merger cost can be measured reliably, these
future items are also recorded into the cost for the merger.
(2) Long-term equity investment obtained in other ways
The purchase price money actually paid is taken as the initial investment cost of the
long-term equity investment obtained by cash.
The sound value of the issued equity securities is taken as the initial investment
cost of the long-term equity investment obtained from the issuance of equity securities.
The value agreed in investment contracts or agreements (with the cash dividends
declared but not yet distributed or profits deducted) of the long-term equity investment
given by the investors is taken as the initial investment cost, unless the value agreed in
investment contracts or agreements is not the sound value.- 52 -
Under the premises that the non-monetary assets exchange is of commercial nature
and that the sound 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 sound value
of the assets given out, unless there are definite evidences that the sound 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 sound value.
2. Subsequent measurement and income confirmation
(1) Subsequent measurement
The accounting of the long-term equity investment of the Company into the
subsidiaries is done according to the cost method. Such investment is adjusted according
to the equity method in the preparation of the consolidated financial statements.
The accounting of the long-term equity investment that does not involve the joint
control over or significant influence on the invested organizations, that does not have
quoted prices in the active market, and whose sound value cannot be reliably measured
is done according to the cost method.
The accounting of the long-term equity investment that involves the joint control
over or significant influence on the invested organizations is done according to the
equity method. When the Company can exercise significant influence on or joint control
over the invested organizations, if the initial investment cost is larger than the
investment, the Company should enjoy the difference with the due share of the sound
value of the discernible net assets of the invested organizations and the initial
investment cost of the long-term equity investment should not be adjusted, if the initial
investment cost is smaller than the investment, the Company should enjoy the difference
with the due share of the sound value of the discernible net assets of the invested
organizations and such difference is recorded into current gains and losses
In the accounting treatment of the changes in owners' equity other than net gains
and losses of the invested organizations, the book value of the long-term equity
investment is adjusted and the capital public reserve (other capital public reserve) added
or decreased with respect to the part of the changes in owners’ equity other than net
gains and losses of the invested organizations that the Company should enjoy or bear
according to the proportion of shareholding under the circumstance that the proportions
of shareholding remain unchanged.
(2) Confirmation of gains and losses
Under cost method, the Company confirms investment income according to the
cash dividends or profits enjoyed by the Company, for which the invested organization
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.- 53 -
Under the equity method, when the Company confirms the due share of the losses
incurred by the invested organizations 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 confirmed within the limit of the book value of other long-term
equity that practically constitutes net investments into the invested organization 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 confirmed according to the
anticipated obligations to be borne and recorded into current investment loss.
When the invested organizations realize 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 confirmed, reduce the book balance of the confirmed
anticipated liabilities, restore other long-term equity that practically constitutes net
investments into the invested organizations and the book value of the long-term equity
investment, and confirm investment income at the same time.
3. Basis that the invested organizations are under common control or significant influence
If the common control over a certain economic activity as agreed in a contract exists only
with the unanimous agreement of the investors who need to share the controlling powers in the
important financial and operation decisions related to such economic activity, such investors are
deemed as exercising joint control with other parities over the invested organization. If an investor
has the power to participate in the decision-making of the financial and operation matters of an
enterprise but cannot control or jointly control with other parties the formation of such policies,
then such investor is deemed as being able to exercise significant influence over the invested
organizations.
4. Impairment test method and accrual method for impairment provision
For the long-term equity investment that does not have price quotations in the active market,
whose sound value cannot be reliably measured, and the accounting of which is conducted with
cost method, its impairment loss is determined by the difference between its book value and the
current value determined through discounting the future cash flow according to the current market
return rate of similar financial assets
For other long-term equity investments facing impairment except the goodwill formed due to
enterprise mergers, if measurement results of recoverable amount of a long-term equity investment
indicate that such recoverable amount is lower than the book value of the investment, the
difference between the two is confirmed as impairment loss.
An impairment test is carried out to the goodwill formed due to enterprise mergers whether
the goodwill faces impairment or not.
Once the impairment loss of long term equity investment is confirmed, such loss will not be
transferred back.- 54 -
2.13Investment property
Investment property refers to the property held for earning rental or increasing the value of capital,
including the right to use of the rented land, the right to use of the land held for transfer after the
value increases, and the rented building.
The investment property presently held by the Company is measured in a cost mode. For
investment properties, the depreciation policy for buildings for rent measured according to the cost
mode is the same as that for the fixed assets of the Company and the amortization policy for the
use right of land for rent is the same as that for intangible assets.
For investment properties facing impairment, the Company evaluates their recoverable amount
and confirms relevant impairment loss if the recoverable amount is less than the book value.
Once the impairment loss of long term equity investment is confirmed, such loss will not be
transferred back.
2.14Fixed assets:
1. Conditions for confirmation of fixed assets
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. The confirmation of fixed assets can be made only when all the following
conditions are satisfied:
(1) Where the economic interests related to such fixed assets are likely to flow into the
company;
(2) Where the cost of such fixed assets can be measured reliably.
2. Depreciation method for various fixed assets
The fixed assets depreciation is accrued according to the straight line method and the
depreciation rate is determined according to the type of fixed assets, anticipated service life and
anticipated net residual value rate.
For the fixed assets leased by financing lease, if it can be reasonably determined that the
ownership right of the leased assets will be obtained upon the expiration of the lease term,
depreciation is accrued within the remaining service life of the leased assets; and if it cannot be
reasonably so determined, depreciation is accrued during the shorter one of the lease term and the
remaining service life of the leased assets.
Depreciation period and annual depreciation rate of various fixed assets:
Category
Depreciation period
(year)
Residual value rate (%)
Annual depreciation
rate
Houses and buildings 20-40 years 5 4.75-2.375
Machinery equipment 5-10 years 5 19.00-9.50
Electronic equipment 5-10 years 5 19.00-9.50
Fixed assets acquired by
financing lease
5-10 years 5 19.00-9.50
Transportation 5-10 years 5 19.00-9.50- 55 -
equipment
Other equipment 10 years 5 9.50
3. Impairment test method for fixed assets and accrual method for impairment provision
The Company estimates at the end of every period whether there are indications of
impairment on its fixed assets.
Where there are indications of impairment on some assets, the recoverable amount of such
assets is estimated. The recoverable amount may be determined according to the higher one of the
net value of the sound value of the assets minus the disposal expenses and the current value of the
anticipated future cash flow of the assets.
Where the recoverable amount of the assets is lower than its book value, the book value of
such assets may be reduced and recorded into the recoverable amount. The reduced amount is
confirmed as assets impairment loss and recorded into current gains and losses. At the same time,
the corresponding assets impairment provision is accrued.
After the confirmation 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 net residual value deducted) can be amortized
systematically within the remaining service life.
Once the impairment loss of fixed assets is confirmed, the loss will not be transferred back in
later accounting periods.
Where there are indications of impairment on a certain fixed asset, the enterprise estimates
the recoverable amount of the asset based on the individual asset. If it is hard for the enterprise to
estimate the recoverable amount of the asset, the enterprise makes estimation based on the asset
group to which the asset belongs.
4. Confirmation basis and pricing method for fixed assets obtained by financing lease
An asset is confirmed as a fixed asset obtained by financing lease if the lease agreement
between the Company and the leasing party provides one of the following conditions:
(1) The ownership of the leased asset belongs to the Company when the lease period
expires;
(2) The Company has an option to purchase the asset and the purchasing price is far lower
than the sound value of the asset when the option right is used;
(3) The lease period takes most of the service life of the asset;
(4) The current value of the minimum payment on leasing date does not differ greatly with
the sound value of the asset;
Between the sound value and the current value of the minimum payment of the leased asset,
the lower is taken by the Company on leasing date as the recorded value in account and the
difference as financing fee not confirmed.- 56 -
2.15Engineering under construction
1. Type of engineering under construction
The accounting of engineering under construction is made according to the classification of
the projects determined in project establishment.
2. Standards and time points for the engineering under construction being carried
forward to fixed assets
For an engineering under construction, 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 an
engineering under construction 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.
3. Impairment test method for engineering under construction and accrual method for
impairment provision
The Company estimates at the end of every period whether there are indications of
impairment on engineering under construction.
Where there are indications of impairment on some assets, the recoverable amount of such
assets is estimated. The recoverable amount may be determined according to the higher one of the
net value of the sound value of the assets minus the disposal expenses and the current value of the
anticipated future cash flow of the assets.
Where the recoverable amount of the assets is lower than its book value, the book value of
such assets may be reduced and recorded into the recoverable amount. The reduced amount is
confirmed as assets impairment loss and recorded into current gains and losses. At the same time,
the corresponding assets impairment provision is accrued.
Once the impairment loss of engineering under construction is confirmed, it will not be
transferred back in later accounting periods.
Where there are indications of impairment on engineering under construction, the enterprise
estimates the recoverable amount based on the individual construction. If it is hard for the
enterprise to estimate the recoverable amount of the individual construction, the enterprise makes
estimation based on the asset group to which the construction belongs.
2.16Borrowing costs
1. Confirmation principle for borrowing costs capitalization
Where the borrowing costs incurred by the Company can be directly attributable to the
purchase, construction or production of the assets that meet the conditions of capitalization, such
assets are capitalized and recorded into relevant assets cost. Other borrowing costs are confirmed
as expenses according to the incurred amount at the time of incurrence and recorded into current
gains and losses.- 57 -
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.
2. Capitalization term of borrowing costs
The capitalization term refers to the period between the start time point and the end time port
of the capitalization of the borrowing costs, excluding the period in which the capitalization is
suspended.
Where the purchase, building or production of the assets that meet the conditions of
capitalization has put such assets into the anticipated usable or salable status, the capitalization of
the borrowing costs is stopped.
Where part of the projects in the purchase, building or production of the assets that meet the
conditions of capitalization have been completed and reached the anticipated usable or salable
status, the capitalization of the borrowing costs of such part of the assets is stopped.
Where different parts of the assets purchased, built or produced have been completed but can
not 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.
3. 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 confirmed as current gains and losses and the capitalization is continued
until the purchasing and production activities of the assets are restarted.
4. Calculation method for 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 relative 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.- 58 -
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.
2.17Intangible assets
1. Pricing method for intangible assets
(1) The Company carries out initial measurement by cost method when acquiring 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 recorded value in the account of the fixed assets obtained from debtors for the
repayment of debts in debt restructuring is determined on the basis of the sound value of
the fixed assets. The difference between the book value of debt restructuring and the
sound value of the fixed assets used for the repayment of debts is recorded into current
gains and losses.
Under the premises that the non-monetary assets exchange is of commercial nature
and that the sound 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 sound value
of the assets given out, unless there are definite evidences that the sound value of the
received assets is more reliable. For the non-monetary assets exchange that do not meet
the above premises, the book value of the received assets and relevant taxes payable is
taken as the cost of the long-term equity investment.
The recorded value in the account of the intangible assets obtained by the merger of
the enterprises under the control of a same entity is determined according to the book
value of the merged party. The recorded value in the account of the intangible assets
obtained by the merger of the enterprises under the control of different entities is
determined according to the sound 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- 59 -
into the anticipated use.
(2) Subsequent measurement
The Company estimates the service life when acquiring intangible assets.
The intangible assets with limited service life are amortized according to the
straight line method within the period that such assets bring economic benefits to the
enterprise. Where the period cannot be anticipated in which such intangible assets bring
economic interests to the enterprise, such intangible assets are deemed as having
indeterminate service life and no amortization will be made.
2. The conditions for the estimation of the service life of the intangible assets with limited
service life:
Item Estimated service life Basis
UFIDA software 5 Benefit period
KOA software 5 Benefit period
Office informatization system (Phase
II)
5 Benefit period
Land use right 50 Benefit period
At the end of each period, the service life and amortization method for the intangible assets
with limited service life are reviewed.
Upon review, the service life and amortization method for the intangible assets at the end of
this period are consistent with the previous estimation.
3. Accrual of impairment provision for intangible assets
Where there are obvious indications of impairment on the intangible assets whose service life
is fixed, an impairment test is carried out at the end of the period.
For the intangible assets whose service life is not fixed, an impairment test is carried out at
the end of each period.
An impairment test is carried out to intangible assets and the recoverable amount of the assets
is estimated. The recoverable amount may be determined according to the higher one of the net
value of the sound value of the assets minus the disposal expenses and the current value of the
anticipated future cash flow of the assets.
Where the recoverable amount of the assets is lower than its book value, the book value of
such assets may be reduced and recorded into the recoverable amount. The reduced amount is
confirmed as assets impairment loss and recorded into current gains and losses. At the same time,
the corresponding assets impairment provision is accrued.
After the confirmation 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 net residual value deducted) can be amortized
systematically within the remaining service life.
Once the impairment loss of an intangible asset is confirmed, it is not transferred back in later
accounting periods.
Where there are indications of impairment on an intangible asset, the Company estimates the
recoverable amount based on the individual intangible asset. If it is hard for the Company to- 60 -
estimate the recoverable amount of the individual asset, the Company makes estimation based on
the asset group to which the asset belongs.
4. Specific 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, equipments and products that are new or feature substantial improvement.
The expenses for inside R&D projects during the research phase are recorded into current
gains and losses when the expenses occur.
5. Standards for meeting the conditions of capitalization by research phase
The expenditure in the development stage of the research and development project can be
confirmed 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.
2.18Long-term expenses to be apportioned
The long-term expenses to be apportioned are averaged and amortized in the benefit period.
Among these:
1. The prepaid rent charge of the fixed assets acquired by operating lease is averaged and
amortized according to the term provided in the rent contract or other reasonable
method.
2. The expenditure on the improvement of operating leased fixed assets should be
averaged and amortized according to the shorter one of the remaining part of the lease
term and the remaining service life.- 61 -
2.19Transfer 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 confirmation is judged according to the
articles of the agreement. If the repurchase is a financing transaction, the Company does not
confirm 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 recorded into
financial expenses.
2.20Anticipated liabilities
In the case that the Company is involved in proceedings like lawsuits, debt guarantee, loss
contracts, restructuring and so on, the proceedings are confirmed as anticipated liabilities if they
very possibly need delivery of assets or provision of labor service and their amount can be
measured reliably.
1. Confirmation standards for anticipated liabilities
The obligations related to contingencies, which meet all the following conditions, are
confirmed by the Company as anticipated 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.
2. Measurement method for anticipated liabilities
Initial measurement is carried out to anticipated liabilities of the Company according to the
optimum estimation amount of the required expense when relevant obligations are fulfilled.
When determining the optimum estimation amount, the Company considers in a
comprehensive way the factors related to contingencies like risks, uncertainties and time value of
currency. Where there are great influences of time value of currency, the optimum estimation
amount is determined after discounting relevant future cash flows.
The optimum estimation amount is determined according to different situations as follows:
Where there is a continuous range (or interval) of the required expense and different results in
the range have same possibility to occur, the optimum estimation amount is determined according
to the intermediate value of the range, i.e. the average of the maximal and the minimum amounts.
Where there is no continuous range (or interval) or there is a continuous range but different
results have different possibilities to occur, if contingencies involve individual proceedings, the
optimum estimation amount is the amount most likely to occur, and if contingencies involve
several proceedings, the optimum estimation amount is determined according to various possible
results and the calculation of relevant probabilities.
If all expenses or part of them, which are used by the Company for paying off anticipated
liabilities, are anticipated to be compensated by a third party and compensation amount is
basically sure to be received, the compensation amount is confirmed separately as an asset, which
should not exceed the book value of the anticipated liabilities.- 62 -
2.21Share payment and equity instruments
1. Types of share payment
The payment of employees’ shares settled with equity is recorded into costs and expenses and
capital public reserve (other capital public reserves) according to the sound value of the equity
instruments on the grant date (the method for the determination of the grant date is specifically set)
and the subsequent changes of the sound value will not be confirmed. No adjustments will be
made to the confirmed costs and expenses and total owners' equity after the option becomes
exercisable. The share capital and share capital premium are confirmed according to the conditions
of the exercise of the options and the capital public reserve confirmed during the vesting period
(other capital public reserve) is carried forward. Among these: For the share payment in exchange
for the employees' services, relevant assets costs and the current expenses are recorded on each
balance sheet date within the vesting period, on the basis of the best estimation of the number of
exercisable equity instruments and according to the sound value of the equity instruments on the
grant date and as capital public reserve (other capital public reserve). The share payment in
exchange for the service of other parties is measured according to the sound value of the service
exchanged from other parties. If such sound value cannot be measured reliably but the sound value
of the equity instruments can be measured reliably, then the above share payment is measured
according to the sound value of the equity instruments on the date of service obtainment and
recorded into relevant assets cost or expense and as other capital public reserve in the capital
public reserve.
For the share payment involving employees settled in cash, measurement is made once again
on the sound value of the equity instruments on each balance sheet date to determine costs and
expenses and wage payable. On each balance sheet date within the vesting period, measurement is
made according to the sound value of the liabilities borne as calculated and determined on the
basis of the share or other equity instruments and on the basis of the best estimation of the number
of exercisable equity instruments. The results are recorded into relevant assets costs or expenses
and as wage payable. No cost expenses will be confirmed after the option becomes exercisable.
The sound value of the wage payable is re-measured and the changes of such sound value are
recorded into gains and losses from changes of sound value.
2. Determination method for sound value
For equity instruments such as the granted option, which exist in the active market, the sound
value is determined according to their prices in the active market. For those not existing in the
active market, the sound value is determined by adopting the option pricing model, which should
be selected in consideration of the following factors: a. option exercise price; b. option period; c.
the current price of the underlying shares; d. the predicted fluctuation rate of the share price, e. the
estimated dividend of the share; f. risk free rate in the option period; g. payment of shares of
installment options
Basis for determination of the best estimation of the exercisable equity instruments
On each balance sheet date in the vesting period, the Company should make the best
estimation on the basis of the latest subsequent information on the changes of the number of the
employees with exercisable option and adjust the number of the exercisable equity instruments.
On the vesting date, the ultimate number of the anticipated exercisable equity instruments should
be consistent with the actual quantity of the exercisable options.- 63 -
The accumulative amount of the cost expenses to be confirmed in the current period is
calculated on the basis of the sound value of the above equity instruments and the anticipated
exercisable equity instruments. Such amount deducted by the accumulative confirmed amount in
the last period is taken as the amount of cost expenses to be confirmed in the current period.
2.22Income
1. Standards for confirmation time of commodity sales income
The realization of the income from the sale of commodities is confirmed 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.
2. Basis for confirmation of income from transfer of asset use right
For economic interests related to transactions, which are very likely to flow into the
Company and whose amount can be reliably measured, the amount of the income from transfer of
asset use right is determined according to the conditions as follows:
(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 for charges as agreed in relevant contract or agreement.
3. Basis and method for determining contract completion progress when confirming
income from labor service and construction contracts by percentage-of-completion
method
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 confirmed with the
percentage-of-completion method. The completion progress of a labor service transaction is
determined by surveying the work completed.
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 confirmed 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 confirmed 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 confirmed labor
cost in previous accounting periods.
Where the results of the provision of labor services on the balance sheet date cannot be- 64 -
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 confirmed 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 recorded into current gains and losses and no income is
confirmed.
2.23Government subsidies
1. Type
Government subsidies refer to the monetary assets and non-monetary assets obtained by the
Company from the government free of charge. The subsidies are divided into those related to
assets and those related to profits.
2. Accounting treatment method
The government subsidies related to the purchase and construction of long-term assets like
fixed and intangible assets are confirmed as deferred profits and recorded by phases into the
non-operating incomes according to the service life of the assets purchased and constructed.
The government subsidies related to profits, used to compensate relevant expenses or losses
in later periods, are confirmed as deferred profits when they are obtained; the subsidies, used to
compensate relevant expenses or losses having occurred, are confirmed as the current
non-operating income when they are obtained.
2.24Deferred income tax assets and liabilities
1. Basis for the confirmation of deferred incomes tax assets
The Company confirms the deferred incomes tax assets generated from the deductible
temporary difference.
2. Basis for confirmation of deferred income tax liabilities
The temporary difference between the taxes payable not paid of the current period and those
of previous periods is confirmed by the Company as deferred income tax liabilities. The temporary
difference generated from goodwill transactions or transactions not of enterprise mergers, which,
at the transaction time, do not influence accounting profits or the amount of the tax payable, is not
included.
2.25Operating lease and financing lease
1. Accounting treatment of operating lease- 65 -
(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 recorded
into current expenses. The initial direct expenses related to lease transactions, paid by
the Company, are recorded into 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 recorded into
current expenses.
(3) 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
recorded into the lease income. The initial direct expenses related to lease transactions,
paid by the Company, are recorded into 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 confirmation 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 of financing lease
(1) Assets acquired under financing lease: Between the sound 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
confirmed.
The financing expenses yet to be confirmed are apportioned by the Company by
the actual interest rate method in the lease term of the assets and recorded into
accounting expenses.
(2) Assets given out under financing lease: The difference between the total residual value,
without guarantee, of the financing lease payment receivable and the current value is
confirmed by the Company on the lease-beginning date as financing profits yet to be
realized and as the lease income in future lease periods. The initial direct expenses
related to lease transactions are recorded into the initial calculation of financing lease
payment receivable and the amount of profits confirmed in the lease term is reduced.
3.Taxes
Main tax types and tax rates imposed on the Company
Tax category Tax rate note
Value-added tax 17- 66 -
Operating tax 3, 5
Enterprise income tax 22, 16.5, 25
Urban maintenance and
construction tax
1, 7
Education surtax 3
The enterprise income tax rate for Xi’an SEG Electronics Market Co., Ltd, Suzhou SEG
Electronics Market Management Co., Ltd and Changsha SEG Development Co., Ltd, subsidiaries
of the Company, was 25%.
The enterprise income tax rate of SEG (Hong Kong) Storage and Transportation Co., Ltd., a
subsidiary indirectly controlled by the Company, was 16.5%.
The enterprise income tax rate of other companies except the above-mentioned ones was 22%.- 67 -
4.Enterprise Merger and the Consolidated Financial Statements
Unless specifically noted, the unit for amounts in the formulas of this section is RMB ten thousand Yuan.
4.1 Information on subsidiaries
1. The subsidiaries acquired through establishment or investment
Full name of
subsidiary
Type of subsidiary
Place of
registratio
n
Nature
of
business
Registered
capital
Business scope
Actual
investment
at the end
of the
period
Balance of
the net actual
investment
in
subsidiaries
Share-holding
proportion
(%)
Voting
right
proportion
(%)
Financial
statements
consolidated
or not
Minority
sharehol
ders'
equity
The amount
of minority
shareholders’
equity
offsetting
minority
shareholders’
gains and
losses
The balance after the
difference between the losses
of the current period allocated
to minority shareholders and
the shares of the
period-beginning owners’
equity of the subsidiary
enjoyed by minority
shareholders, in case the
former is more than the latter,
is offset against the owners’
equity of the parent company
Xi’an SEG
Electronics Market
Co., Ltd
Share-controlled
subsidiary
Xi’an
Service
industry
300
Domestic trade;
material supply
and marketing
195.00 65.00 65.00 Yes 176.99
Shenzhen SEG
Electronics Market
Management Co.,
Ltd
Share-controlled
subsidiary
Shenzhen
Service
industry
300
Domestic trade;
material supply
and marketing
210.00 70.00 70.00 Yes 81.30
Suzhou SEG
Electronics Market
Co., Ltd
Share-controlled
subsidiary
Su Zhou
Service
industry
300
Domestic trade;
material supply
and marketing
135.00 45.00 45.00 Yes 338.54- 68 -
Full name of
subsidiary
Type of subsidiary
Place of
registratio
n
Nature
of
business
Registered
capital
Business scope
Actual
investment
at the end
of the
period
Balance of
the net actual
investment
in
subsidiaries
Share-holding
proportion
(%)
Voting
right
proportion
(%)
Financial
statements
consolidated
or not
Minority
sharehol
ders'
equity
The amount
of minority
shareholders’
equity
offsetting
minority
shareholders’
gains and
losses
The balance after the
difference between the losses
of the current period allocated
to minority shareholders and
the shares of the
period-beginning owners’
equity of the subsidiary
enjoyed by minority
shareholders, in case the
former is more than the latter,
is offset against the owners’
equity of the parent company
Shenzhen Mellow
Orange Business
Hotel Management
Co., Ltd
Share-controlled
subsidiary
Shenzhen
Service
industry
1,000
Hotel
management,
information
consulting and
property service
1,000 66.58 66.58 Yes
2. Subsidiaries acquired through the merger of enterprises under the control of a same entity
Full name of
subsidiary
Type of
subsidiary
Place of
registration
Nature
of
business
Registered
capital
Business scope
Actual
investment
at the end
of the
period
Balance of
the net actual
investment in
subsidiaries
Share-holding
proportion
(%)
Voting right
proportion
(%)
Financial
statements
consolidated
or not
Minority
sharehol
ders'
equity
The amount
of minority
shareholders’
equity
offsetting
minority
shareholders’
gains and
losses
The balance of minority
shareholders’ equity of the
parent company offsetting the
difference between the losses
of the period allocated to
minority shareholders and the
shares of the period-beginning
owners’ equity of the
subsidiary enjoyed by minority
shareholders- 69 -
Full name of
subsidiary
Type of
subsidiary
Place of
registration
Nature
of
business
Registered
capital
Business scope
Actual
investment
at the end
of the
period
Balance of
the net actual
investment in
subsidiaries
Share-holding
proportion
(%)
Voting right
proportion
(%)
Financial
statements
consolidated
or not
Minority
sharehol
ders'
equity
The amount
of minority
shareholders’
equity
offsetting
minority
shareholders’
gains and
losses
The balance of minority
shareholders’ equity of the
parent company offsetting the
difference between the losses
of the period allocated to
minority shareholders and the
shares of the period-beginning
owners’ equity of the
subsidiary enjoyed by minority
shareholders
Shenzhen SEG
Baohua
Enterprise
Development
Co., Ltd
Share-controlled
subsidiary
Shenzhen
Service
industry
3,080.88
Property lease
and
management
2,051.25 66.58 66.58 Yes 1,940.43
Shenzhen SEG
Storage and
Transportation
Co., Ltd.
Share-controlled
subsidiary
Shenzhen
Service
industry
6,600
Overseas
transportation
and bonded
storage
6,572.91 99.59 99.59 Yes 39.17
Shenzhen Fubao
SEG Enterprise
Co., Ltd.
Share-controlled
subsidiary
Shenzhen Storage
HK$
16,600,000
Storage and
relevant
transportation
service,
production and
operation of
electronic,
mechanical and
electrical
products
HK$
16,600,000
99.59 99.59 Yes- 70 -
Full name of
subsidiary
Type of
subsidiary
Place of
registration
Nature
of
business
Registered
capital
Business scope
Actual
investment
at the end
of the
period
Balance of
the net actual
investment in
subsidiaries
Share-holding
proportion
(%)
Voting right
proportion
(%)
Financial
statements
consolidated
or not
Minority
sharehol
ders'
equity
The amount
of minority
shareholders’
equity
offsetting
minority
shareholders’
gains and
losses
The balance of minority
shareholders’ equity of the
parent company offsetting the
difference between the losses
of the period allocated to
minority shareholders and the
shares of the period-beginning
owners’ equity of the
subsidiary enjoyed by minority
shareholders
SEG Storage and
Transportation
(HONG KONG)
Company Ltd.
Share-controlled
subsidiary
Hong Kong
Transpor
tation
HK$
500,000
Transportation
HK$
500,000
99.59 99.59 Yes
Shenzhen SEG
Industrial
Investment Co.,
Ltd
Share-controlled
subsidiary
Shenzhen
Investm
ent
2,550
Investment in
industrial and
commercial
businesses,
2,378.00 91.79 91.79 Yes 172.14
3. Subsidiaries acquired through the merger of enterprises not under the control of a same entity
Full name of
subsidiary
Type of
subsidiary
Place of
registration
Nature
of
business
Registered
capital
Business scope
Actual
investment
at the end
of the
period
Balance of
the net actual
investment
in
subsidiaries
Share-holding
proportion
(%)
Voting right
proportion
(%)
Financial
statements
consolidated
or not
Minority
sharehol
ders'
equity
The amount
of minority
shareholders’
equity
offsetting
minority
shareholders’
gains and
losses
The balance after the
difference between the losses
of the period allocated to
minority shareholders and the
period-beginning shares
enjoyed by minority
shareholders, in case the
former is more than the latter,
is offset against the owners’
equity of the parent company
Changsha SEG
Development Co.,
Ltd
Share-controlled
subsidiary
Changsha
Service
industry
3,500 Property lease 6,900 46 51 Yes 6137.14- 71 -
4.2Special purpose entities and operating entities whose share-controlling right is
formed through trusted operation or lease taking
None
4.3No alteration occurs to the consolidation scope in the current period.
4.4No merger of the enterprises under the control of a same entity takes place in
the current period
4.5There are no subsidiaries decreased in the current period because the shares
are sold, upon which the controlling right is lost.
4.6No counter-purchase takes place in the current period.
4.7No consolidation by merger takes place in the current period.
4.8Translation exchange rate for main items of the financial statements of
overseas operating entities
It is provided by Article 12 of the Accounting Standard for Business Enterprises No.
19-Translation of Foreign Currency that:
When making translation on the financial statements for overseas operation, the enterprises should
abide by the regulations as follows:
1. The assets and liabilities items in the balance sheet are translated according to the sight
exchange rate on the balance sheet date. The owners’ equity items except “retained profits” are
translated according to the sight exchange rate at the time of occurrence.
2. The items of income and expenses in the Profit Statement are translated according to the sight
exchange rate on the transaction date. They may also be translated according to the exchange rate
determined by a systematic and reasonable method, which is close to the sight exchange rate on
the transaction date.
The translation difference in the financial statements in foreign currency caused by the
above-mentioned methods 1 and 2 is listed separately under the owner’s equity items in the
balance sheet.
The translation difference of relevant financial statements in foreign currency by overseas- 72 -
operating entities, which are included in the Consolidated Financial Statements of the Company in
the report period, is as follows:
Overseas operating
entity
Recordin
g
currency
Main items of
financial
statements
Exchange rate for
translation of the
financial
statements
The translation difference of
the financial statements in
foreign currency, which is
listed by the Financial
Statements as of June 30, 2010
(‘0000 Yuan)
SEG Storage and
Transportation
(Hong Kong) Co.,
Ltd
HK$
Assets and
liabilities
0.8724 -50.02
5.Notes on Main Items of the Consolidated Financial Statements
Unless specifically noted, the unit for the following amounts is RMB Yuan.
5.1Monetary capital
Year-end balance Period-beginning balance
Item
Amount in
foreign
currency
Discount
rate
Amount in
RMB
Amount in
foreign
currency
Discount
rate
Amount in
RMB
Cash
RMB 579,114.22 527,885.40
US$ 3,078.82 6.7909 20,907.95 3,062.00 6.83 20,907.95
HK$ 109,993.58 0.8724 95,957.30 63,809.40 0.88 56,184.18
JPY 205.90 0.0767 15.79 211.00 0.09 18.10
Total 695,995.26 604,995.63
Bank deposit
RMB
503,497,139.5
5
480,163,339.11
US$ 6,559.40 6.7909 43,697.02 49,642.50 6.83 338,968.92
HK$ 2,649,561.63 0.8724 2,570,565.67 4,509,977.80 0.88 3,971,029.45
Total
506,111,402.2
4
484,473,337.48
Other
monetary
capital
RMB 56,937.83
US$
Total 56,937.83
Total 506,807,397.5 485,135,270.94- 73 -
Year-end balance Period-beginning balance
Item
Amount in
foreign
currency
Discount
rate
Amount in
RMB
Amount in
foreign
currency
Discount
rate
Amount in
RMB
0
Including: US$ 9,638.22 6.79 64,604.97 52,704.50 6.83 359,876.87
JPY 205.90 0.08 15.79 211.00 0.09 18.10
HK$ 2,759,555.21 0.87 2,666,522.97 4,573,787.20 0.88 4,027,213.63
Among which, no restricted monetary capital exists.
5.2Accounts receivable
1. Accounts receivable disclosed according to different types
Period-end balance Period-beginning balance
Type Book
balance
Percentag
e in the
total
amount
Bad debt
provision
Proportio
n of bad
debt
provision
Book
balance
Percentag
e in the
total
amount
Bad debt
provision
Proportio
n of bad
debt
provision
2. Accounts
receivable
with a
significant
amount
individually
12,214,214.2
4
50.16
2,160,725.6
3
17.69
12,214,214.
24
60.19
2,160,725.6
3
17.69
Accounts
receivable
with an
insignificant
amount
individually
and accrued as
separate bad
debt provision
Other
insignificant
accounts
receivable
12,138,068.0
1
49.84 1,031.65 0.01
8,078,174.4
4
39.81 1,031.65 0.01
Total
24,352,282.2
5
100.00
2,161,757.2
8
20,292,388.
68
100.00
2,161,757.2
8
2. Accounts receivable disclosed according to the duration- 74 -
Period-end amount Period-beginning amount
Duration of
the
accounts
Book
balance
Percentage
in the total
amount (%)
Bad debt
provision
Proportion
of bad
debt
provision
(%)
Book
balance
Percentag
e in the
total
amount
(%)
Bad debt
provision
Proportio
n of bad
debt
provision
(%)
Within 1
year
(including
1 year)
21,752,683.6
6
89.33% 0.00
18,092,790.0
9
89.16 0.00
1 to 2 years
(including
2 years)
400,000.00 1.64 0.00 38,872.96 0.19 1,031.65 2.65
2 to 3 years
(including
3 years)
38,872.96 0.16 1,031.65 2.65
Over 3
years
2,160,725.63 8.87
2,160,725.6
3
100.00 2,160,725.63 10.65
2,160,725.6
3
100.00
Total
24,352,282.2
5
100.00
2,161,757.2
8
20,292,388.6
8
100.00
2,161,757.2
8
3. Bad debt provision accrued at the end of the period for the accounts receivable with a
significant amount individually, for which impairment tests are separately carried out:
Name of
company
Book balance
Amount of
bad debt
provision
Percentage
of provision
Reason
Shuangxionghui
Fabric Co., Ltd
2,160,725.63 2,160,725.63 100
Proceedings have been taken and
the recovery possibility is very
scarce
Total 2,160,725.63 2,160,725.63
4. There are no such accounts receivable, i.e. the total amount or a large proportion of
which have been accrued as bad debt provision before the report period but were
recovered or transferred back with the total amount or a large proportion in the
current period.
5. There are no accounts receivable recovered in the current period by other methods like
restructuring.
6. There are no receivable accounts written off in the current period.
7. Among the period-end accounts receivable, no accounts are receivable from corporate
shareholders that hold over 5% (including 5%) voting shares of the Company.
8. Top five period-end accounts receivable- 75 -
Name of company
Relationship
with the
Company
Amount Duration
Percentage in the
total amount of
accounts receivable
Shenzhen Branch of DB Schenker
China Ltd
Customer
2,231,847.4
4
Less than one
year
9.16
Shenzhen Shuangxionghui Industrial
Co., Ltd
Business
related
organization
2,160,725.6
3
Over 5 years 8.87
NIPPON EXPRESS (H.K) CO., LTD
Customer
1,741,568.6
3
Less than one
year
7.15
HONHAI PRECISION IND CO.,
LTD
Customer
1,641,281.3
7
Less than one
year
6.74
RICOH INTERNATIONAL
LOGISTICS (H.K) CO., LTD
Customer
1,378,596.5
6
Less than one
year
5.66
9. For details on accounts receivable from related parties, please refer to Section VI (IV) in
the Notes
10. There are no accounts receivable for which confirmation is terminated.
11. There are no accounts receivable, which are taken as objects for securitization.
5.3Advances
1. Advances listed according to account duration
Period-end balance Period-beginning balance
Duration of the accounts
Amount Proportion (%) Amount Proportion (%)
Within 1 year (including 1
year)
23,834,855.75 100.00 4,158,773.39 22.60
1 to 2 years (including 2 years) 10,000,000.00 54.33
2 to 3 years (including 3 years) 4,245,494.69 23.07
Over 3 years
Total 23,834,855.75 100.00 18,404,268.08 100.00
2. Organizations whose advances feature significant period-end amount
Name of company
Relationshi
p with the
Company
Amount
Time of
occurrence
Reason for not being
settled
Tonmac International
Electronics (Suzhou) Co., Ltd
Supplier
10,000,000.0
0
June, 2010 Prepaid rent charge
Xi'an Gaoke (Group) New
West China Industrial
Development Co., Ltd
Supplier
10,000,000.0
0
March, 2010
Deposit for the renewal
contract undertaking a
project
Synnex Technology
International Corporation
Supplier 564,080.00 May, 2010
The agreed accounting
period is not due- 76 -
Guangzhou Jiajie Technology
Co., Ltd
Supplier 486,720.00 May, 2010
The agreed accounting
period is not due
Zhanyi Decoration Co., Ltd Supplier 264,940.78 June, 2010
The project is not
completed
3. Among the period-end advances, no advances are receivable from corporate
shareholders that hold over 5% (including 5%) of the voting shares of the Company.
5.4Interest receivable
Item
Period-begin
ning balance
Increase
during the
period
Decrease
during the
period
Period-end
balance
1. Interests receivable whose duration is
less than 1 year
2,460,821.92 2,460,821.92
Including: (1) Interests from guaranty
deposits
2. Interests receivable whose duration is
over 1 year
Total 2,460,821.92 2,460,821.92
5.5Other receivables
1. Other accounts receivable disclosed according to type
Period-end balance Period-beginning balance
Type
Book balance
Percentag
e in the
total
amount
Bad debt
provision
Proportion
of bad debt
provision
(%)
Book
balance
Percentag
e in the
total
amount
Bad debt
provision
Proportio
n of bad
debt
provision
(%)
2. Other accounts
receivable with a
significant amount
individually
20,788,479.60 46.34
20,788,479.6
0
100.00
20,788,479.6
0
48.40
20,788,479.6
0
100.00
Accounts receivable
with an insignificant
amount individually
but featuring great risk
as a combination based
on credit risk
characteristics
10,052,005.59 22.41
10,052,005.5
9
100.00
10,052,005.5
9
23.40
10,052,005.5
9
100.00
Other insignificant
accounts receivable
14,024,053.81 31.26 140,883.61 1.00
12,112,882.3
5
28.20 140,883.61 1.16- 77 -
Total 44,864,539.00 100.00
30,981,368.8
0
69.06
42,953,367.5
4
100.00
30,981,368.8
0
72.13
2. Other accounts receivable disclosed according to duration
Period-end amount Period-beginning amount
Duration
of the
accounts
Book balance
Percentag
e in the
total
amount
Bad debt
provision
Proportio
n of bad
debt
provision
(%)
Book
balance
Percentag
e in the
total
amount
Bad debt
provision
Proportio
n of bad
debt
provision
(%)
Within 1
year
(including
1 year)
6,883,697.03 15.34 - 5,293,870.71 12.32 0.00
1 to 2
years
(including
2 years)
321,345.14 0.72 16,067.26 5.00 217,967.93 0.51 9,353.40 4.29
2 to 3
years
(including
3 years)
217,967.93 0.49 21,796.79 10.00 3,514,038.53 8.18 28,510.65 0.81
Over 3
years
37,441,528.9
0
83.45
30,943,504.7
5
82.64
33,927,490.3
7
78.99
30,943,504.
75
91.20
Total
44,864,539.0
0
100.00
30,981,368.8
0
69.06
42,953,367.5
4
100.00
30,981,368.
80
72.13
3. Bad debt provision accrued at the end of the period for the accounts receivable with a
significant amount individually, for which impairment tests are separately carried out:
Name of company Book balance
Amount of bad
debt provision
Percentage of
provision
Reason
No.1: Yangjiang Yuntong
Grease Co., Ltd
8,530,276.35 8,530,276.35 100.00
The duration is over 5
years
Shenzhen Lianjing Trade
Co., Ltd.
5,697,287.51 5,697,287.51 100.00
The duration is over 5
years
Shenzhen Top Industry Co.,
Ltd.
3,281,387.96 3,281,387.96 100.00
The duration is over 5
years
Yunsen Trading Company 1,668,343.74 1,668,343.74 100.00
The duration is over 5
years
Shenzhen Shoujia
Industrial Company
1,611,184.04 1,611,184.04 100.00
The duration is over 5
years
Total 20,788,479.60 20,788,479.60
Other accounts receivable with an insignificant amount individually but featuring great risk
as a combination based on credit risk characteristics:
Duration of Period-end balance Period-beginning balance- 78 -
Book balance Book balance
Amount
Proportion
(%)
Bad debt
provision Amount
Proportion
(%)
Bad debt
provision
Less than 1
year
1-2 years
2-3 years
Over 3 years 10,052,005.59 100.00 10,052,005.59 10,052,005.59 100.00 10,052,005.59
Total 10,052,005.59 100.00 10,052,005.59 10,052,005.59 100.00 10,052,005.59
4. No other receivables are written off in the current period.
5. Other period-end receivables from corporate shareholders that hold over 5% (including
5%) voting shares of the Company.
Period-end balance Period-beginning balance
Name of company Nature
Book balance
Bad debt
provision
accrued
Book
balance
Bad debt
provision accrued
Shenzhen SEG Group Deposit 80,000.00 80,000.00
Total 80,000.00 80,000.00
6. Top five of other accounts receivable
Name of company
Relationship
with the
Company
Amount Duration
Percentage in
the total
amount of
other accounts
receivable
Nature or Content
No.1: Yangjiang
Yuntong Grease Co.,
Ltd
Business
related
organization
8,530,276.35
Over 3
years
19.01 Debt restructuring
Shenzhen Lianjing
Trade Co., Ltd.
Business
related
organization
5,697,287.51
Over 3
years
12.70 Debt restructuring
Shenzhen Top Industry
Co., Ltd.
Business
related
organization
3,281,387.96
Over 3
years
7.31 Debt restructuring
Tonmac International
Electronics (Suzhou)
Co., Ltd
Supplier 3,000,000.00
Over 3
years
6.69 Deposit
Futian Residence
Bureau
2,072,781.00
Over 3
years
4.62
Maintenance fund for
the main body of the
building
7. For details on accounts receivable from related parties, please refer to Section VI (IV) in
the Notes
8. There are no accounts receivable for which confirmation is terminated.
9. There are no accounts receivable which are taken as objects for securitization.- 79 -
5.6Inventory
1. Classification of inventory
Period-end balance Period-beginning balance
Item Book
balance
Provision
for
inventory
price drop
Net book
value
Book
balance
Provision
for
inventory
price drop
Net book
value
Raw materials 697,437.40 697,437.40
Low-cost
consumables
241,990.87 - 241,990.87 160,226.69 160,226.69
Goods in
production
- - -
Finished products
(Inventories)
3,077,273.5
0
-
3,077,273.5
0
5,028,728.3
0
5,028,728.30
Others
Total
3,319,264.3
7
3,319,264.3
7
5,886,392.3
9
5,886,392.39
Among which, there is no inventory as guaranty in the period-end balance. There is no inventory
whose ownership is restricted in the period-end balance
5.7Financial assets available for sale
Item
Period-end sound
value
Period-beginning sound value
(1) Bonds available for sale
(2) Equity instruments available for sale 623,821.24 3,843,571.87
Including: Restricted shares available for sale
Non-restricted shares available for sale 623,821.24 3,843,571.87
(3) Others
Total 623,821.24 3,843,571.87- 80 -
5.8Long-term equity investment
1. Details on long-term equity investments
Invested organization
Accounting
method
Initial investment
cost
Period-beginning
balance
Increase or
decrease
Period-end
balance
Share-holding
proportion in
the invested
organization
(%)
Voting ratio in
the invested
company
Impairment
provision
Impairment
provision
accrued in the
current period
Cash
dividends of
the current
period
Nanjing Shangsha Co., Ltd
the cost
method
280,000.00 280,000.00 - 280,000.00 0.68 0.68
Shenzhen Tianji Optoelectronic
Technology Industrial Co., Ltd
the cost
method
105,000.00 105,000.00 - 105,000.00 105,000.00
Anshan Yibai Co., Ltd
the cost
method
15,000.00 15,000.00 - 15,000.00
Shenzhen SEG GPS Scientific
Navigations Co., Ltd
the cost
method
8,275,321.43 13,515,392.83 - 13,515,392.83 12.5 12.5
Shenzhen SEG Telecom Equipment
Co., Ltd
the equity
method
3,679,217.22 3,679,217.22 - 3,679,217.22 99.17 99.17 3,679,217.22
Shanghai SEG Electronics Market
Management Co., Ltd
the equity
method
1,750,000.00 7,448,054.26 1,380,937.32 8,828,991.58 35 35
Shenzhen SEG Samsung Co., Ltd.
the equity
method
279,307,046.38 98,473,652.77 5,379,024.12 103,852,676.89 22.45 22.45
Shenzhen SEG Orient Industrial
Development Co., Ltd.
the equity
method
400,000.00 - 0.00 20 20
Total 295,711,585.03 123,516,317.08 6,759,961.44 130,276,278.52 3,784,217.22- 81 -
2. Investment on joint ventures and associated enterprises
Name of the invested company
Type of
enterprise
Place of
registration
Nature of
business
Registered
capital
(Ten
thousand
Yuan)
Shareholding
radio
Voting
ratio in the
invested
company
Total period-end
assets (Ten
thousand Yuan)
Total period-end
liabilities (Ten
thousand Yuan)
Total period-end
net assets (Ten
thousand Yuan)
Total
operating
income of the
current period
Net profit of
the current
period
I.
Shenzhen SEG Samsung Co., Ltd.
Company
limited by
shares
Shenzhen Manufacturing 89,667.15 22.45 22.45 66,152.85 46,124.25 20,028.61 3,429.22 -3,203.33
Shenzhen SEG Orient Industrial
Development Co., Ltd.
Limited
liability
company
Shenzhen
Service
industry
200.00 20.00 20.00 80.10 100.10 -20.00 13.49 -8.43
Shanghai SEG Electronics Market
Management Co., Ltd
Limited
liability
company
Shanghai
Service
industry
500.00 35.00 35.00 4,455.72 1,933.04 2,522.67 1,750.10 394.55
3. There are no occasions where the ability to transfer capital to invested enterprises is restricted at the end of the period.
4. The value of the shares of Shenzhen SEG Samsung Co., Ltd, held by the Company, is 1,073,169,025.89 Yuan, which is calculated according to the market price at the
end of the period.- 82 -
5.9Investment property
Increase during the period Decrease of the period
Item
Period-beginni
ng balance
Purchas
e
Private
real estate
or
inventory
transfer
Depreciation
or
amortization
of the current
period
Disposa
l
Transferre
d to real
estate for
own use
Period-end
balance
I. Total of the original
price
590,026,358.4
9
590,026,358.4
9
Houses and buildings
574,814,257.6
5
574,814,257.6
5
(2) Land use right 15,212,100.84 15,212,100.84
II Accumulated
depreciation or
accumulated
amortization in total
144,405,725.9
3
7,515,988.70
151,921,714.6
3
Houses and buildings
141,101,809.7
3
7,390,409.36
148,492,219.0
9
(2) Land use right 3,303,916.20 125,579.34 3,429,495.54
III. Total accumulated
impairment provision for
investment properties
3,117,633.12 0.00 3,117,633.12
Houses and buildings -
(2) Land use right 3,117,633.12 - 3,117,633.12
IV. Total book value of
investment properties
442,502,999.4
4
-7,515,988.70
434,987,010.7
4
Houses and buildings
433,712,447.9
2
-7,390,409.36
426,322,038.5
6
(2) Land use right 8,790,551.52 -125,579.34 8,664,972.18
5.10Original price and accumulated depreciation of fixed assets
1. Information on fixed assets
Item
Period-end book
balance
Increase
during the
period
Decrease
during the
period
Period-end book
balance
I. Total original book value 312,922,383.33 36,928,745.61 4,698,271.79 345,152,857.15
Thereinto: Houses and buildings 213,669,786.05 21,615,444.75 235,285,230.80
Machinery equipment 36,696,169.20 11,549,413.50 48,245,582.70
Electronic equipment 16,497,416.82 1,128,610.36 988,529.57 16,637,497.61
Transportation equipment 43,371,664.43 1,723,976.00 3,102,418.44 41,993,221.99- 83 -
Item
Period-end book
balance
Increase
during the
period
Decrease
during the
period
Period-end book
balance
Other equipment 2,687,346.83 911,301.00 607,323.78 2,991,324.05
II. Total accumulated
depreciation:
122,821,046.29 7,234,562.15 4,186,569.24 125,869,039.20
Thereinto: Houses and buildings 47,895,655.46 3,519,335.28 51,414,990.74
Machinery equipment 30,356,098.23 1,080,530.95 31,436,629.18
Electronic equipment 15,094,927.31 785,625.28 942,504.26 14,938,048.33
Transportation equipment 29,106,468.70 1,749,972.61 2,946,778.72 27,909,662.59
Other equipment 367,896.59 99,098.03 297,286.26 169,708.36
III. Total net book value of fixed
assets
190,101,337.04 29,694,183.46 511,702.55 219,283,817.95
Thereinto: Houses and buildings 165,774,130.59 18,096,109.47 183,870,240.06
Machinery equipment 6,340,070.97 10,468,882.55 16,808,953.52
Electronic equipment 1,402,489.51 342,985.08 46,025.31 1,699,449.28
Transportation equipment 14,265,195.73 -25,996.61 155,639.72 14,083,559.40
Other equipment 2,319,450.24 812,202.97 310,037.52 2,821,615.69
IV. Total impairment provision 584,618.74 584,618.74
Thereinto: Houses and buildings 584,618.74 584,618.74
Machinery equipment 0.00
Electronic equipment 0.00
Transportation equipment 0.00
Other equipment 0.00
V. Total book value of fixed
assets
189,516,718.30 29,694,183.46 511,702.55 218,699,199.21
Thereinto: Houses and buildings 165,189,511.85 18,096,109.47 183,285,621.32
Machinery equipment 6,340,070.97 10,468,882.55 16,808,953.52
Electronic equipment 1,402,489.51 342,985.08 46,025.31 1,699,449.28
Transportation equipment 14,265,195.73 -25,996.61 155,639.72 14,083,559.40
Other equipment 2,319,450.24 812,202.97 310,037.52 2,821,615.69
2. There are no fixed assets that are temporarily idle at the end of the period.
3. There are no fixed assets acquired by financing lease
4. The original value of the fixed assets given out by operating lease is 2,170,745.30 Yuan
with the accumulated depreciation as 660,258.15 Yuan.
5. There are no fixed assets that are held for sale at the end of the period.
6. Period-end fixed assets not gaining the property right certificate
Item Net book value
Reason for not gaining the
property right certificate
Anticipated time to gain the
property right certificate- 84 -
Houses and
buildings
3,264,370.59
They are built with funds
collected by buyers, for which not
all proceedings are dealt with
Machinery
equipment
Transportation
equipment
Electronic
equipment
Total 3,264,370.59
5.11Engineering under construction
Period-end balance Period-beginning balance
Item Book
balance
Impairme
nt
provision
Net book
value
Book
balance
Impairmen
t provision
Net book value
Decoration
project of
Changsha
SEG
3,050,549.95 3,050,549.95
24,710,542.4
1
24,710,542.41
Elevator
refitting
681,533.14 681,533.14
Renovation of
Huaqiang
Section
800,000.00 800,000.00 800,000.00 800,000.00
Total 3,850,549.95 3,850,549.95
26,192,075.5
5
26,192,075.55
Changes on projects of major engineering under construction
Decrease during the period
Project
name
Period-begin
ning balance
Increase
during the
period
Changed to
fixed assets
Others
Period-end
balance
Progr
ess
Source of
capital
Decoratio
n project
of
Changsha
SEG
24,710,542.4
1
6,964,810.47
25,772,609.6
1
2,852,193.3
2
3,050,549.9
5
96
Selfprepared
5.12Intangible assets
Item
Period-beginnin
g balance
Increase during
the period
Decrease
during the
period
Period-end
balance
1. Total original book value 6,147,534.91 6,147,534.91- 85 -
Item
Period-beginnin
g balance
Increase during
the period
Decrease
during the
period
Period-end
balance
(1) UFIDA Software 406,484.00 406,484.00
(2) KOA Software 773,300.00 773,300.00
(3) Office Informatization System
(Phase II)
507,200.00 507,200.00
(4)Others 159,600.00 159,600.00
(5) Land use right 4,300,950.91 4,300,950.91
2. Total accumulated amortization 1,391,102.60 157,837.86 1,548,940.46
(1) UFIDA Software 375,547.03 6,698.68 382,245.71
(2) KOA Software 549,678.33 3,349.34 553,027.67
(3) Office Informatization System
(Phase II)
109,893.29 72,519.96 182,413.25
(4)Others 102,986.84 14,701.98 117,688.82
(5) Land use right 252,997.11 60,567.90 313,565.01
3.Book value of intangible assets 4,756,432.31 -157,837.86 4,598,594.45
(1) UFIDA Software 30,936.97 -6,698.68 24,238.29
(2) KOA Software 223,621.67 -3,349.34 220,272.33
(3) Office Informatization System
(Phase II)
397,306.71 -72,519.96 324,786.75
(4)Others 56,613.16 -14,701.98 41,911.18
(5) Land use right 4,047,953.80 -60,567.90 3,987,385.90
4. Total impairment provision
(1) UFIDA Software
(2) KOA Software
(3) Office Informatization System
(Phase II)
(4)Others
(5) Land use right
5.Total book value of intangible assets 4,756,432.31 -157,837.86 4,598,594.45
(1) UFIDA Software 30,936.97 -6,698.68 24,238.29
(2) KOA Software 223,621.67 -3,349.34 220,272.33
(3) Office Informatization System
(Phase II)
397,306.71 -72,519.96 324,786.75
(4)Others 56,613.16 -14,701.98 41,911.18
(5) Land use right 4,047,953.80 -60,567.90 3,987,385.90
No intangible assets are used as mortgage or loan security at the end of the period.- 86 -
5.13Goodwill
Name of the invested unit
Period-beginn
ing balance
Increase
during the
period
Decrease
during the
period
Period-end
balance
Period-en
d
impairmen
t provision
Changsha SEG Development Co.,
Ltd
10,328,927.82 10,328,927.82
Total 10,328,927.82 10,328,927.82
Item Amount
Investment cost 69,000,000.00
Book value of the net assets of the invested organization 57,508,384.14
Estimated increment of net assets 93,383,233.24
Deferred income tax liabilities incurred by the estimated increment of net assets -23,345,808.30
Sound value of the net assets of the invested organization 127,545,809.08
Share-holding proportion in the invested organization 46.00
The difference caused when the investment cost is more than the recognizable
net assets of the invested organization, which should be enjoyed at the time of
acquisition
10,328,927.82
The Company purchased 46% of the equity of Changsha SEG Development Co., Ltd with the
price of 69,000,000 Yuan in March 2009. The net assets in book value of Changsha SEG
Development Co., Ltd was 57,508,384.14 Yuan in the current month while the net assets in sound
value of Changsha SEG Development Co., Ltd after the evaluation for the added value was carried
out. Thus, a goodwill amounting to 10,328,927.82 Yuan was formed.
5.14Long-term expenses to be apportioned
Item
Period-begin
ning balance
Increase
during the
period
Amortization
of the period
Period-end
balance
Expense on equipment improvement 5,592,832.01 3,468,454.32 2,175,221.72 6,886,064.61
Firefighting renovation of the market 259,706.32 1,911,707.53 495,162.66 1,676,251.19
Land price for Baohua Building Block B
and market supporting fee
1,578,351.53 168,000.00 129,869.84 1,616,481.69
Other long-term expenses to be
apportioned
5,610,889.96 1,093,091.48 384,041.74 6,319,939.70
Total
13,041,779.8
2
6,641,253.33 3,184,295.96 16,498,737.19
5.15Deferred income tax assets and liabilities
1. Deferred income tax assets and liabilities that have been confirmed- 87 -
Item
Period-ending
amount
Period-beginning amount
Deferred income tax assets
From bad debt 6,617,903.58 5,962,475.79
From inventory price drop
From impairment of long-term equity investments 154,000.00 809,427.79
From impairment of fixed assets 128,616.12 128,616.12
From impairment of investment properties 685,879.29 685,879.29
From intangible assets
Total 7,586,398.99 7,586,398.99
Deferred income tax liabilities
From bad debt
Changes on the sound value of financial assets available
for sale, which is accrued as capital public reserve
117,351.56 645,920.41
Changes on the sound value of houses and buildings 21,959,650.94 22,514,113.88
Total 22,077,002.50 23,160,034.29
2. Amount of temporary difference caused by assets or liabilities incurring the difference
Item Amount of temporary difference
(1) Bad debt provision for accounts receivable 27,102,110.86
(2) Provision for inventory price drop
(3) Depreciation provision for long-term equity
investments
3,679,217.22
(4) Impairment provision for fixed assets 584,618.74
(5) Financial assets available for sale 533,416.18
(6) Changes on the sound value of houses and buildings 87,838,603.76
(7) Impairment provision for investment properties 3,117,633.12
Total 122,855,599.88
3. The deferred income tax assets not confirmed
Item Balance
(1) Bad debt provision for accounts receivable 6,041,015.22
(2) Depreciation provision for long-term equity investments 105,000.00
Total 6,146,015.22
5.16Asset impairment provision
Decrease during the period
Item
Period-beginn
ing balance
Increase
during the
period
Write
back
Write off Others
Period-end
balance
Bad debt provision 33,143,126.08 33,143,126.08
Provision for inventory
price drop- 88 -
Impairment provision for
long-term equity
investment
3,784,217.22 3,784,217.22
Impairment provision for
investment properties
3,117,633.12 3,117,633.12
Impairment provision for
fixed assets
584,618.74 584,618.74
Total 40,629,595.16 40,629,595.16
5.17Accounts payable
Item Period-end balance Period-beginning balance
Less than 1 year 12,578,125.74 6,711,641.10
1-2 years 2,178,169.12 1,002,326.82
2-3 years 8,991.00 511,541.10
Over 3 years 116,200.00
Total 14,881,485.86 8,225,509.02
1. Among the period-end balance, no accounts are payable to the shareholders that hold
over 5% (including 5%) voting shares of the Company.
2. Among the period-end balance, no accounts are payable to related parties.
5.18Advances
Item Period-end balance Period-beginning balance
Less than 1 year 105,971,002.03 102,009,092.45
1-2 years 2,139,817.98
2-3 years 5,432,726.72 1,414,979.96
Total 111,403,728.75 105,563,890.39
1. Among the period-end balance, no advances are receivable from corporate shareholders
that hold over 5% (including 5%) voting shares of the Company.
2. Among the period-end balance, no advances are receivable from related parties.
5.19Wages payable
Item
Period-beginnin
g balance
Increase during
the period
Decrease during
the period
Period-end
balance
(1) Wages, bonuses, allowances
and subsidies
3,272,846.67 8,408,000.25 10,711,481.92 969,365.00
(2) Benefits of employees 477,360.39 477,360.39- 89 -
(3) Social insurance premiums 150,767.28 787,865.72 787,030.28 151,602.72
(4) Housing fund 216,037.76 160,469.00 55,568.76
(5) Labor union expenditures 157,820.47 228,403.17 838,698.43 -452,474.79
(6) Compensation due to
termination of labor contracts
16,000.00 16,000.00
(7) Others 680,042.57 680,042.57
Total 4,261,476.99 10,133,667.29 12,991,040.02 1,404,104.26
5.20Taxes and fees payable
Taxes and fees Period-end balance Period-beginning balance
Operating tax -1,742,508.78 -2,149,305.44
Value-added tax -2,389,708.52 -132,766.64
Enterprise income tax 7,713,607.56 25,870,381.70
Housing property tax 812,370.60 303,379.55
Urban maintenance and construction tax -80,708.33 -59,177.51
Education surtax -15,540.65 14,539.73
Withholding and paying of individual income tax 234,107.59 480,641.55
Stamp tax and water conservancy fund 7,966.53 2,863.35
Others 1,698,758.56 91202.37
Total 6,238,344.56 24,421,758.66
5.21Dividends payable
Name of company Period-end balance
Period-beginning
balance
Reason for not making
payment for over one
year
Shenzhen SEG Computers Co.,
Ltd
258,390.00 189,090.00
Nanjing Shangsha Co., Ltd 237,600.00 168,300.00
Individual shares 519,623.27 143,327.44
A-shares 3,881.48 3,881.48
B-shares 45,698.54 45,698.54
Others 176,122.28 103,823.27
Shenzhen SEG Group Service Co.,
Ltd
178,200.00 108,900.00
China Electronic Appliance
(Shenzhen) Co., Ltd
297,000.00 158,400.00
Total 1,716,515.57 921,420.73
5.22Other payables
Item Period-end balance Period-beginning balance- 90 -
Less than 1 year 17,172,720.47 38,107,034.64
1-2 years 23,884,764.15 18,106,456.25
2-3 years 32,326,969.16 29,269,179.98
Over 3 years 20,801,514.08 971,619.04
Total 94,185,967.86 86,454,289.91
1. Among the period-end balance, no accounts are payable to the shareholders that hold
over 5% (including 5%) voting shares of the Company.
2. Among the period-end balance, no accounts are payable to related parties.
5.23Share capital
Increase/Decrease of the period
Item
Period-begi
nning
balance
New
share
offering
Bonus
share
Capitali
zation
of
public
reserve
Others Total
Period-end
balance
1. Restricted shares
(1)State-held shares
(2) Shares held by
state-owned legal
persons
(3) Other shares held
by domestic capital
Including:
Shares held by
foreign legal persons
Shares held by
domestic natural
persons
(4)Shares held by
foreign capital
(5) Shares held by
the senior
management
47,286 -11,822 -11,822 35,464
Including:
Shares held by
foreign legal persons
Shares held by
foreign natural
persons
Total of restricted
shares
47,286 -11,822 -11,822 35,464- 91 -
Increase/Decrease of the period
Item
Period-begi
nning
balance
New
share
offering
Bonus
share
Capitali
zation
of
public
reserve
Others Total
Period-end
balance
2.Non-restricted
shares
(1)RMB common
shares (A-share)
538,290,40
6
11,822 11,822
538,302,22
8
(2) Domestically
listed foreign shares
(B-share)
246,461,31
8
246,461,31
8
(3) Overseas listed
foreign shares (H
Share)
(4)Others
Total of
non-restricted shares
784,751,72
4
11,822 11,822
784,763,54
6
Total
784,799,01
0
784,799,01
0
The aforementioned capital has been audited in Xinde Audit Report [XIN DE YAN ZI BAO ZI No.
018 (2006)] by Shenzhen Tianjian Xinde Certified Public Accountants.
5.24Capital public reserve
Item
Period-beginnin
g balance
Increase during
the period
Decrease during
the period
Period-end
balance
1. Capital premium (share
premium)
(1) Capital by investors 325,329,854.26 325,329,854.26
(2) Influence of the merger of the
enterprises under the control of a
same entity
-
Total 325,329,854.26 - - 325,329,854.26
Other capital public reserve
(1) Other changes on owners’
equity of the invested organization
except net gains and losses
68,824,966.96 12,615,804.65 81,440,771.61
(2) Profit or loss from change of
the sound value of financial assets
available for sale
1,939,809.33 1,939,809.33 -
3 Others 827,852.40 827,852.40
Total 71,592,628.69 12,615,804.65 1,939,809.33 82,268,624.01- 92 -
Item
Period-beginnin
g balance
Increase during
the period
Decrease during
the period
Period-end
balance
Total 396,922,482.95 12,615,804.65 1,939,809.33 407,598,478.27
Other changes on owners’ equity of the invested institutions, except net gains and losses, are as
follows: the main cause for the increase of the period is that (1) The change on the capital public
reserve of Shenzhen SEG Samsung Co., Ltd, an invested company, in the current period was
56,000,000 Yuan and the Company confirmed 12,572,000 Yuan as capital public reserve according
to the Company’s share-holding proportion that is 22.45%. (2) The change on the capital public
reserve of Shenzhen SEG Baohua Enterprise Development Co., Ltd in the consolidation scope was
65,792.51 Yuan and the Company confirmed 43,804.65 Yuan as capital public reserve according to
the Company’s holding proportion that is 66.58%.
The income or loss from the change on the sound value of the financial assets available for sale:
the main cause for the decrease of the current period is that (1) the capital public reserve recorded
previously due to sale of ST07 shares was transferred out, which totaled 1,939,809.33 Yuan.
5.25Surplus public reserve
Item
Period-beginning
balance
Increase during
the period
Decrease during
the period
Period-end balance
Statutory surplus
reserve
102,912,835.67 102,912,835.67
Free surplus reserve
Reserve fund
Enterprise development
fund
Others
Total 102,912,835.67 102,912,835.67
5.26Retained profits
Item Amount Accrual/Distribution Rate
Before adjustment Retained profits of the end of the
previous period
-268,431,923.52
After adjustment Total period-beginning retained
profits (+ for increase, - for decrease)
After adjustment Period-beginning retained Profit -268,431,923.52
Plus: Net profits attributable to owners of the parent
company
26,896,844.71
Less: Accrual of statutory surplus reserve
Accrual of free surplus reserve
Accrual of reserve fund -
Accrual of enterprise development fund -
Accrual of bonus and welfare fund -- 93 -
Item Amount Accrual/Distribution Rate
Accrual of general risk provision -
Ordinary share dividends payable -
Ordinary share dividends converted to share
capital
-
Retained Profit at the end of the period -241,535,078.81
5.27Operating revenue and operating cost
1. Operating revenue and operating cost
Item
Amount incurred in the current
period
Amount incurred in the previous
year
Main operating income 178,297,428.20 137,882,485.07
Other business income
Operating cost 115,533,447.61 78,631,266.50
2. Main businesses (classified according to industries)
Amount incurred in the current
period
Amount incurred in the same period of the
previous year
Name of company
Operating
revenue
Operating cost
Operating
revenue
Operating cost
(1) Industry
(2) Commerce
(3) Real estate
(4)Lease and the
commercial service
178,297,428.20 115,533,447.61 137,882,485.07 78,631,266.50
Total 178,297,428.20 115,533,447.61 137,882,485.07 78,631,266.50
3. Main operating businesses (classified according to districts)
Amount incurred in the current
period
Amount incurred in the same period of the
previous year
Name of district
Operating
revenue
Operating cost
Operating
revenue
Operating cost
Domestic 162,702,968.19 100,445,536.90 122,550,146.40 63,710,906.94
Overseas 15,594,460.01 15,087,910.71 15,332,338.67 14,920,359.56
Total 178,297,428.20 115,533,447.61 137,882,485.07 78,631,266.50
4. Operating income of top five customers of the Company
Name of customer
Total operating
income
Proportion in the total operating income
of the Company (%)
HON HAI PRECISION INDUSTRY CO.,LTD 4,619,955.26 2.59
Nippon Express (HK) Co., Ltd. 4,553,558.05 2.55
Ricoh Express (Shenzhen) Warehouse Ltd 4,451,235.77 2.50- 94 -
Name of customer
Total operating
income
Proportion in the total operating income
of the Company (%)
Shenzhen Branch of DB Schenker China Ltd 3,682,367.38 2.07
PHILIPS ELECTRONICS HONG LTD 1,788,651.98 1.00
5.28Business taxes and surcharges
Item
Amount incurred in the
current period
Amount incurred in the same
period of the previous year
Taxation standards
Operating tax 6,909,259.43 6,017,264.69 5
Urban construction tax 157,038.33 142,553.15 1, 7
Education surtax 189,478.75 195,804.02 3
Others 10,026.14 363.75
Total 7,265,802.65 6,355,985.61
5.29Financial expenses
Category
Amount incurred in the
current period
Amount incurred in
the same period of the
previous year
Interest expenses
Less: Interest income 2,804,525.63 6,288,341.04
Loss on exchange 228,416.59 24,177.64
Bank commission fee 71,432.86 38,055.38
Others
Total -2,504,676.18 -6,226,108.02
5.30Loss from asset impairment
Item
Amount incurred in the
current period
Amount incurred in
the same period of the
previous year
Loss from bad debt -3,954,300.00
Loss from inventory price drop
Loss from impairment of financial assets available for
sale
Loss from impairment of held-to-maturity investments
Loss from impairment of long-term equity investment
Loss from impairment of investment properties
Loss from impairment of fixed assets
Loss from impairment of engineering materials
Loss from impairment of projects in construction
Loss from impairment of consumable biological assets- 95 -
Item
Amount incurred in the
current period
Amount incurred in
the same period of the
previous year
Loss from impairment of oil and gas assets
Loss from impairment of intangible assets
Loss from goodwill impairment
Others
Total -3,954,300.00
5.31Investment Income
Item
Amount incurred in the
current period
Amount incurred in
the same period of the
previous year
Long-term equity investment income by the cost
method
Long-term equity investment income by the equity
method
-5,812,038.56
-214,081,672.20
Income from disposal of long-term equity investments 26,093,189.37
Income during the time of holding transaction
financial assets
Income from held-to-maturity investments
Income during the time of holding financial assets
available for sale
Income from disposal of transaction financial assets
Income from held-to-maturity investments
Income from financial assets available for sale 2,947,815.81 1,837,604.13
Others
Total -2,864,222.75 -186,150,878.70
5.32Non-operating income
Item
Amount incurred in the
current period
Amount incurred in
the same period of the
previous year
Total profit from disposal of non-current assets 252,264.72 83,409.60
Including: Profit from disposal of fixed assets 252,264.72 83,409.60
Profit from disposal of intangible assets
Reward for having no work injuries in the year
Income from donations
Government subsidies
Accounts not required to be paid 163,531.41 1,952,257.31
Income from lawsuits
Others 176,207.97 3,396.16- 96 -
Item
Amount incurred in the
current period
Amount incurred in
the same period of the
previous year
Total 592,004.10 2,039,063.07
5.33Non-operating expenses
Item
Amount incurred in the
current period
Amount incurred in
the same period of the
previous year
Total disposal loss of non-current assets 98,576.31 93,650.40
Including: Disposal loss of fixed assets 98,576.31 93,650.40
Disposal loss of intangible assets
Loss from debt restructuring
Loss from transfer of non-monetary assets
Donation expenses 320,000.00 -
Charitable donation expenses
Abnormal loss
Others 53,178.13 16,159.51
Total 471,754.44 109,809.91
5.34Income tax
Item
Amount incurred in the
current period
Amount incurred in
the same period of the
previous year
Income tax of the current period calculated according to
tax laws and relevant regulations
10,469,434.80 3,678,108.04
Deferred income tax -554,462.94 707,877.54
Total 9,914,971.86 4,385,985.58
5.35Calculation process for basic EPS and diluted EPS
Item
Amount
incurred in the
current period
Amount incurred
in the same
period of the
previous year
Net profit attributable to common shareholders of the Company (P1) 26,896,844.71 -146,083,519.02
Non-recurring gains and losses 2,328,770.02 51,662,293.18
Net profit attributable to common shareholders of the Company after
deduction of the non-recurring losses and gains(P2=P1- Non-recurring
gains and losses)
24,568,074.69 -197,745,812.20
Period-beginning shares in total (S0) 784,799,010.00 784,799,010.00- 97 -
Item
Amount
incurred in the
current period
Amount incurred
in the same
period of the
previous year
Shares increased because the capital public reserve is transferred as
share capital or share dividends are distributed (S)
Shares increased because new shares are issued or liabilities are
transferred as shares (Si)
Shares decreased due to repurchases (Sj)
Shares merged (Sk)
Month No. of the report period (M0)
Month No. from the next month after shares are increased to the end of
the report period (Mi)
Month No. from the next month after shares are decreased to the end of
the report period (Mj)
Weighted average of common shares
(S=S0+S1+Si×Mi÷M0-Sj×Mj÷M0-Sk)
784,799,010.00 784,799,010.00
Net profit attributable to common shareholders
of the Company(=P1÷S)
0.0343 -0.1861
Basic earnings per
share
Net profit attributable to common shareholders
of the Company after deduction of the
non-recurring losses and gains(=P2÷S)
0.0313 -0.2520
Net profit attributable to common shareholders
of the Company (=[P1+( Interests of the
diluted latent common shares confirmed as
expenses – Conversion expenses)×(1—Income
tax rate)]/(S0+S1+Si×Mi÷M0—Sk+ Weighted
average of increased common shares attributed
to share warrants, share options and
convertible bonds))
0.0343 -0.1861
Diluted earnings per
share
Net profit attributable to common shareholders
of the Company after deduction of
non-recurring gains and
losses(=[P2+( Interests of the diluted latent
common shares confirmed as
expenses—Conversion expenses)×(1—income
tax rate )]/(S0+S1+Si×Mi÷M0—Sk+ Weighted
average of increased common shares attributed
to share warrants, share options and
convertible bonds))
0.0313 -0.2520- 98 -
5.36Other consolidated income
Item
Amount
incurred in the
current period
Amount incurred in
the same period of
the previous year
1. Gains (losses) from financial assets available for sale 84,349.37 1,264,881.22
Less: Influence of income tax incurred from financial assets available
for sale
18,556.86 252,976.24
Net gains and losses recorded into other consolidated income in the
previous period and transferred back in the current period
1,939,809.3300 795,716.11
Total -1,874,016.82 216,188.87
2. Enjoyed shares of other consolidated income of invested
organizations by the equity method
Less: Influence on income tax by enjoyed shares of other
consolidated income of invested organizations by the equity method
Net gains and losses recorded into other consolidated income in the
previous period and transferred back in the current period
Total 0.00 0.00
3. Profit (or loss) from arbitrage tools of cash flows
Less: Influence on income tax by arbitrage tools of cash flows
Net gains and losses recorded into other consolidated income in the
previous period and transferred back in the current period
Adjustment of the initial confirmed amount transferred as arbitraged
items
Total 0.00 0.00
4. Translation difference of the financial statements in foreign
currency
42,759.60 2,184.43
Less: Net gains and losses transferred in from disposal of overseas
assets in the current period
Total 42,759.60 2,184.43
5 Others 12,572,000.00 387,675.80
Less: Influence on income tax by others recorded into other
consolidated income
Net amount of others recorded into other consolidated income in the
previous period and transferred back in the current period
Sub-total 12,572,000.00 387,675.80
Total 10,740,742.78 606,049.10
5.37Notes on the cash flow statement
1. Other cash received concerning operating activities
Item Amount of the current period
Incomings and outgoings 144,268,431.90
Less: Interest income 2,804,525.63
Non-operating income 592,004.10- 99 -
Item Amount of the current period
Total 147,664,961.63
2. Other cash paid concerning operating activities
Item Amount of the current period
Incomings and outgoings 102,061,544.15
Cash expenses 8,267,712.23
Non-operating expenses 120,224.13
Others 18,568,178.86
Total 129,017,659.37
5.38Supplementary information on the cash flow statement
1. Supplementary information on the cash flow statement
Item
Amount of the
current period
Amount of the same
period of the previous
year
1. Reconciliation of net profit to cash flows of operating
activities
Net profit 29,291,301.57 -143,126,887.91
Plus: Asset impairment provision -3,954,300.00
Depreciation of fixed assets, oil & gas assets and consumable
biological assets
14,750,550.85 12,463,043.77
Amortization of intangible assets 154,488.52 512,585.09
Amortization of long-term expenses to be apportioned 3,184,295.96 2,149,463.95
Loss on disposal of fixed assets, intangible assets, and other
long-term assets (Profit will be marked with "-")
-153,688.41 169,830.14
Loss on discard of fixed asset (Profit will be marked with "-") - 10,240.80
Loss on change of sound value (Profit will be marked with
"-")
-
Financial expenses (Profit will be marked with "-")
Loss on investment (Profit will be marked with "-") 2,864,222.75 140,670,155.48
Decrease of deferred income tax assets (Profit will be marked
with "-")
1,792,679.60
Increase of deferred income tax liabilities (Decrease will be
marked with "-")
-1,083,031.79 -150,634.88
Decrease of inventories (Increase will be marked with "-") 2,567,128.02 -1,159,096.37
Decrease of operating accounts receivable (Increase will be
marked with "-")
-8,759,981.86 36,395,829.55
Increase of operating accounts payable (Decrease will be
marked with "-")
-15,200,948.47 -26,090,815.56
Others 634,575.86 2,631,279.25
Net cash flow from operating activities 28,248,913.00 22,313,372.91- 100 -
Item
Amount of the
current period
Amount of the same
period of the previous
year
2. Investment and financing activities not Involving cash
receipts and payments
Conversion of debt into capital
Convertible bonds due within one year
Fixed assets acquired by financing lease
3. Net increase in cash and cash equivalents
Cash at the end of the period 506,807,397.50 401,135,926.35
Less: cash at the beginning of the period 485,135,270.94 400,172,059.09
Plus: cash equivalents at the end of the period
Less: Cash equivalents at beginning of the period
Net increase in cash and cash equivalents 21,672,126.56 963,867.26
2. Composition of cash and cash equivalents:
Item Period-end balance
Period-beginning
balance
I. Cash 506,807,397.50 485,135,270.94
Including: Cash on hand 695,995.26 604,995.63
Bank deposits available for payment at any time 506,111,402.24 484,530,275.31
Other monetary capital available for payment at any
time
Accounts in the central bank available for payment
Accounts deposited in the enterprises of the same
industry
Accounts borrowed from the enterprises of the same
industry
II. Cash equivalents
Including: Bond investments due within 3 months
III. Period-end balance of cash and cash equivalents 506,807,397.50 485,135,270.94
6.Related parties and relevant transactions
6.1Information on shareholders of the Company Unit: Ten thousand RMB Yuan
Name of
the parent
company
Relationship
Type of
enterpris
e
Place of
registratio
n
Legal
representative
Nature of
business
Registered
capital
Share-holding
proportion
over the
Company (%)
Voting right
proportion
over the
Company
(%)
Organizatio
n code
Shenzhen
SEG
Group
The first
largest
shareholder
Shenzhen
Sun
Shengdiian
State-ow
ned
135,542.0
0
30.24 30.24 19218093-0- 101 -
6.2Information on subsidiaries of the Company: Unit: Ten thousand RMB Yuan
Full name of
subsidiary
Type of
subsidiary
Type of
enterprise
Place of
registratio
n
Legal
representativ
e
Nature of
business
Registered
capital
Share-ho
lding
proportio
n (%)
Voting
right
proportio
n (%)
Organizatio
n code
Xi’an SEG
Electronics market
Co., Ltd
Share-cont
rolled
subsidiary
Limited
liability
company
Xi’an Li Zhenhua
Service
industry
300 65.00 65.00 742830724
Shenzhen SEG
Electronics Market
Management Co.,
Ltd
Share-cont
rolled
subsidiary
Limited
liability
company
Shenzhen Wang Kou
Service
industry
300 70.00 70.00 774131178
Suzhou SEG
Electronics Market
Management Co.,
Ltd
Share-cont
rolled
subsidiary
Limited
liability
company
Su Zhou Zheng Dan
Service
industry
300 45.00 45.00 78205845X
Shenzhen SEG
Baohua Enterprise
Development Co.,
Ltd
Share-cont
rolled
subsidiary
Company
limited
by shares
Shenzhen
Zhang
Weimin
Service
industry
3,080.88 66.58 66.58 19219334-4
Shenzhen SEG
Storage and
Transportation Co.,
Ltd.
Share-cont
rolled
subsidiary
Limited
liability
company
Shenzhen Wang Kou
Service
industry
6,600 99.59 99.59 192177694
Shenzhen SEG
Industrial
Investment Co.,
Ltd
Share-cont
rolled
subsidiary
Limited
liability
company
Shenzhen Li Lifu
Service
industry
2,550 91.79 91.79 19219150-9
Changsha SEG
Development
Share-cont
rolled
subsidiary
Limited
liability
company
Changsha Wang Kou
Service
industry
3500 46 46 616600581
Shenzhen Mellow
Orange Business
Hotel Management
Co., Ltd
Share-cont
rolled
subsidiary
Limited
liability
company
Shenzhen Bo Hongxi
Service
industry
1000 66.58 66.58 69556368-5
Shenzhen SEG
Orient Industrial
Development Co.,
Ltd.
Share-cont
rolled
subsidiary
Foreign
investme
nt
enterprise
Shenzhen Kang Le Storage
HK$
16,600,00
0
99.59 99.59 618820094
SEG (HONG
KONG) Co. Ltd.
Share-cont
rolled
subsidiary
Overseas
subsidiar
y
Hong
Kong
Kang Le
Transpor
tation
HK$
500,000
99.59 99.59
1901347200
004087- 102 -
6.3Information on other related parties
Name of the related party
Relationship between other related
parties and the Company
Organization code
Guangzhou Fodak Group Co., Ltd. The second largest shareholder
Shenzhen SEG Samsung Co., Ltd. Joint company
Shenzhen SEG Orient Industrial
Development Co., Ltd.
Joint company
Shenzhen SEG Square Investment &
Development Co., Ltd.
Subsidiary of the first majority
shareholder
Shenzhen SEG Property Development
Co., Ltd.
Subsidiary of the first majority
shareholder
Shenzhen SEG Group Service Co., Ltd
Subsidiary of the first majority
shareholder
Shenzhen SEG Computers Co., Ltd
Subsidiary of the first majority
shareholder
6.4Transactions with related parties
1. The transactions among the subsidiaries that have controlling relationship with the
Company and have been included in the consolidation scope as well as the transactions
between the subsidiaries and the parent company have been offset.
2. Information on leases between the Company and related parties
Name of
lessor
Name of
lessee
Information on
leased assets
Lease
beginning
date
Lease
ending
date
Lease
income
Basis for
confirmation of
lease income
Shenzhen
SEG
Group
Shenzhen
SEG Co.,
Ltd
The warehouse with
its area of 809.26
square meters on the
8th floor of SEG
Plaza
2009.4.1 2011.3.31
240,000.0
0
The lease contract
3. Accounts receivable from and payable to related parties
Item Related party: Period-end balance
Period-beginning
balance
Accounts
receivable
Shenzhen SEG Hi-tech Industrial Co., Ltd 14,374.97
Other
receivables
Shenzhen SEG Property Development Co.,
Ltd.
2,000.00 2,000.00
Shenzhen SEG Orient Industrial
Development Co., Ltd.
443,910.00 443,910.00- 103 -
Item Related party: Period-end balance
Period-beginning
balance
Shenzhen SEG Group Co., Ltd. 80,000.00 80,000.00
Dividends
payable
Shenzhen SEG Group Service Co., Ltd 178,200.00 108,900.00
Shenzhen SEG Computers Co., Ltd 258,390.00 189,090.00
7.Contingency Items
The Company has no contingency items that need to be disclosed.
8.Matters Occurring after the Issuance of the Balance Sheet
There are no events after the balance sheet date.
9.Notes on other important matters
Long-term equity investment
Up to June 30, 2010, the Company had held 201,345,033 shares of Shenzhen SEG Samsung Co.,
Ltd (hereinafter referred to as SEG Samsung), a subsidiary of the Company, and the shares are
about 22.45% of the total share capital of SEG Samsung. The value of the shares of SEG Samsung
which are held by the Company is 1,073,169,025.89 Yuan and this is much more than the book
value of the long-term equity investment which is 103,852,676.89 Yuan. Therefore, impairment
provision is not accrued for the equity of SEG Samsung which is held by the Company.
10.Commitments
There are no newly increased commitments in the current period
11.Notes on main items in the financial statements of the parent company
11.1Accounts receivable
1. Accounts receivable disclosed according to different types
Period-end balance Period-beginning balance
Type Book
amount
Percentag
e in the
total
amount
Bad debt
provisio
n
Proportion
of bad debt
provision
(%)
Book
balance
Percentage
in the total
amount
Bad debt
provision
Proportion
of bad debt
provision
(%)
2. Accounts receivable with
a significant amount
individually
1,066,989.78 94.06- 104 -
Period-end balance Period-beginning balance
Type Book
amount
Percentag
e in the
total
amount
Bad debt
provisio
n
Proportion
of bad debt
provision
(%)
Book
balance
Percentage
in the total
amount
Bad debt
provision
Proportion
of bad debt
provision
(%)
Accounts receivable with
an insignificant individually
amount and accrued as
separate bad debt provision
Other insignificant accounts
receivable
400,000.00 100.00 67,367.69 5.94
Total 400,000.00 100.00 1,134,357.47 100.00
2. Accounts receivable disclosed according to account duration
Period-end amount Period-beginning amount
Duration of
the accounts Book balance
Percentage
in the total
amount
Bad debt
provision
Proportion of
bad debt
provision
(%)
Book
balance
Percentage
in the total
amount
Bad debt
provision
Proportion
of bad
debt
provision
(%)
Within 1 year
(including 1
year)
1,134,357.47 100.00
1 to 2 years
(including 2
years)
400,000.00 100.00
2 to 3 years
(including 3
years)
Over 3 years
Total 400,000.00 100.00 1,134,357.47 100.00
3. No accounts receivable are written off in the current period.
4. Among the period-end accounts receivable, no accounts are receivable from corporate
shareholders that hold over 5% (including 5%) voting shares of the Company.
5. Organizations of top five accounts receivable
Name of company
Relationship with the
Company
Amount Duration
Percentage in the total amount
of accounts receivable
Zhang Xiuying
The person purchases
real estate in Jianshang
Village
400,000.00 1-2 years 4.32
6. There are no accounts receivable which are taken as objects for securitization.- 105 -
11.2Other receivables
1. Other accounts receivable disclosed according to different types
Period-end balance Period-beginning balance
Type Book
balance
Percentage
in the total
amount
Bad debt
provision
Proportion
of bad debt
provision
(%)
Book balance
Percentage
in the total
amount
Bad debt
provision
Proportion
of bad debt
provision
(%)
Other accounts
receivable with
a significant
amount
individually
20,788,479.6
0
29.85 20,788,479.60 100.00 20,788,479.60 29.88 20,788,479.60 100.00
Accounts
receivable with
an insignificant
amount
individually
but featuring
great risk as a
combination
based on credit
risk
characteristics
3,476,830.12 4.99 3,476,830.12 100.00 3,476,830.12 5.00 3,476,830.12 100.00
Other
insignificant
accounts
receivable
45,367,886.0
8
65.15 1,000.00 0.00 45,307,466.00 65.12 1,000.00 0.00
Total
69,633,195.8
0
100.00 24,266,309.72 69,572,775.72 100.00 24,266,309.72
2. Other receivables disclosed according to duration
Period-end amount Period-beginning amount
Duration of
the
accounts
Book
balance
Percenta
ge in the
total
amount
Bad debt
provision
Proportion
of bad debt
provision
(%)
Book
balance
Percentag
e in the
total
amount
Bad debt
provision
Proportio
n of bad
debt
provision
(%)
Within 1
year
(including
1 year)
42,826,445.
67
61.50
42,766,025.5
9
61.47
2 to 2 years
(including
2 years)- 106 -
Period-end amount Period-beginning amount
Duration of
the
accounts
Book
balance
Percenta
ge in the
total
amount
Bad debt
provision
Proportion
of bad debt
provision
(%)
Book
balance
Percentag
e in the
total
amount
Bad debt
provision
Proportio
n of bad
debt
provision
(%)
2 to 3 years
(including
3 years)
10,000.00 0.01 1,000.00 10.00 10,000.00 0.01 1,000.00 10.00
Over 3
years
26,796,750.
13
38.48
24,265,309.7
2
90.55
26,796,750.1
3
38.52
24,265,309.7
2
90.55
Total
69,633,195.
80
100.00
24,266,309.7
2
69,572,775.7
2
100.00
24,266,309.7
2
3. Bad debt provision accrued at the end of the period for the accounts receivable with a
significant amount individually, for which impairment tests are separately carried out.
Name of company Book balance
Amount of bad
debt provision
Percentage of
provision
Reason
No.1: Yangjiang Yuntong
Grease Co., Ltd
8,530,276.35 8,530,276.35 100.00
The duration is over 5
years
Shenzhen Lianjing Trade
Co., Ltd.
5,697,287.51 5,697,287.51 100.00
The duration is over 5
years
Shenzhen Top Industry
Co., Ltd.
3,281,387.96 3,281,387.96 100.00
The duration is over 5
years
Yunsen Trading Company 1,668,343.74 1,668,343.74 100.00
The duration is over 5
years
Shenzhen Shoujia
Industrial Company
1,611,184.04 1,611,184.04 100.00
The duration is over 5
years
Total 20,788,479.60 20,788,479.60
Other accounts receivable with an insignificant amount individually but featuring great risk
as a combination based on credit risk characteristics:
Period-end balance Period-beginning balance
Duration of Book balance Book balance
the accounts
Amount
Proportion
(%)
Bad debt
provision Amount
Proportion
(%)
Bad debt
provision
Less than 1
year
1-2 years
2-3 years
Over 3 years 3,476,830.12 100.00 3,476,830.12
3,476,830.1
2
100.00
3,476,830.1
2
Total 3,476,830.12 100.00 3,476,830.12
3,476,830.1
2
100.00
3,476,830.1
2
4. No other receivables are written off in the current period.- 107 -
5. Other accounts receivable from corporate shareholders holding more than 5%
(included) of the voting shares of the Company
Period-end balance Period-beginning balance
Name of company
Book balance
Bad debt
provision accrued
Book balance
Bad debt
provision accrued
Shenzhen SEG Group 80,000.00 80,000.00
Total 80,000.00 80,000.00
6. Organizations of top five of other receivables
Name of company
Relationship
with the
Company
Amount Duration
Percentage in the total
amount of other accounts
receivable
Changsha SEG
Development Co., Ltd
Subsidiary
40,662,126.0
2
Less than one
year
58.39
No.1: Yangjiang
Yuntong Grease Co.,
Ltd
Business related
organization
8,530,276.35 Over 3 years 12.25
Shenzhen Lianjing
Trade Co., Ltd.
Business related
organization
5,697,287.51 Over 3 years 8.18
Shenzhen Top Industry
Co., Ltd.
Business related
organization
3,281,387.96 Over 3 years 4.71
Yunsen Trading
Company
Business related
organization
1,668,343.74 Over 3 years 2.40
7. Other accounts receivable from related parties
Name of company
Relationship with the
Company
Amount
Percentage in the total amount
of accounts receivable
Shenzhen SEG Property
Development Co., Ltd.
Subsidiary of
shareholders
2,000.00 0.00
Shenzhen SEG Orient Industrial
Development Co., Ltd.
Subsidiary of
shareholders
443,910.0
0
0.64
Total
445,910.0
0
0.64
8. There are no other receivables not meeting the conditions for termination of
confirmation.
9. There are no other receivables taken as objects for securitization.- 108 -
11.3Long-term equity investment Unit: RMB Yuan
Invested organization
Accounting
method
Initial
investment cost
Period-beginning
balance
Increase or
decrease
Period-end
balance
Share-holding
proportion in
the invested
organization
(%)
Voting
ratio in the
invested
company
Impairment
provision
Impairment
provision accrued
in the current year
Cash dividends of
the current period
Shenzhen SEG Baohua Enterprise
Development Co., Ltd
the cost method 18,742,808.93 20,512,499.04 20,512,499.04 66.58 66.58 7,179,480.00
Shenzhen SEG Storage and
Transportation Co., Ltd.
the cost method 62,700,000.00 62,700,000.00 62,700,000.00 95.00 95.00
Shenzhen SEG Industrial Investment
Co., Ltd
the cost method 23,780,000.00 23,780,000.00 23,780,000.00 91.79 91.79
Shenzhen SEG Telecom Equipment
Co., Ltd
the cost method 6,942,530.00 2,979,217.22 2,979,217.22 90.00 90.00 2,979,217.22
Shenzhen SEG GPS Scientific
Navigations Co., Ltd
the cost method 23,170,900.00 13,515,392.83 13,515,392.83 12.50 12.50
Changsha SEG Development Co.,
Ltd
the cost method 69,000,000.00 69,000,000.00 69,000,000.00 46.00 46.00
Shenzhen SEG Electronics Market
Management Co., Ltd
the cost method 2,100,000.00 2,100,000.00 2,100,000.00 70.00 70.00 630,000.00
Suzhou SEG Electronics Market
Management Co., Ltd
the cost method 1,350,000.00 1,350,000.00 1,350,000.00 45.00 45.00
Xi’an SEG Electronics Market Co.,
Ltd
the cost method 1,950,000.00 1,950,000.00 1,950,000.00 65.00 65.00 1,573,162.44
Shenzhen SEG Orient Industrial Co.,
Ltd
the equity
method
400,000.00 0.00 0.00 20.00 20.00
Shenzhen SEG Samsung Co., Ltd.
the equity
method
224,709,600.15 98,473,652.77 5,379,024.12 103,852,676.89 22.45 22.45
Shanghai SEG Electronics Market
Management Co., Ltd
the equity
method
1,750,000.00 7,448,054.26 1,380,937.32 8,828,991.58 35.00 35.00
Total 436,595,839.08 303,808,816.12 6,759,961.44 310,568,777.56 2,979,217.22 9,382,642.44- 109 -
11.4Operating revenue and operating cost
1. Operating revenue and operating cost
Item Amount incurred in the period Amount incurred in previous year
Main businesses 56,215,822.38 54,278,634.05
Other businesses
Operating cost 19,408,492.15 20,303,203.74
2. Main businesses (classified according to industries)
Amount incurred in the period Amount incurred in previous year
Item
Operating revenue Operating cost Operating revenue Operating cost
(1) Industry
(2) Commerce
(3) Real estate
(4)Lease and the
commercial service
56,215,822.38 19,408,492.15 54,278,634.05 20,303,203.74
Total 56,215,822.38 19,408,492.15 54,278,634.05 20,303,203.74
11.5Investment Income
Details on investment income
Item
Amount incurred
in the period
Amount incurred in
previous year
Long-term equity investment income by the cost method 9,382,642.44 7,186,964.70
Long-term equity investment income by the equity method -5,812,038.56 -214,081,672.20
Income from disposal of long-term equity investments 22,619,515.05
Income during the time of holding transaction financial assets
Income from held-to-maturity investments
Income during the time of holding financial assets available for
sale
Income from disposal of transaction financial assets
Income from held-to-maturity investments
Income from financial assets available for sale 2,947,815.81 1,837,604.13
Others
Total 6,518,419.69 -182,437,588.32
11.6Supplementary information on the cash flow statement
Item
Amount of the
current year
Amount of the same
period of the previous
year
1. Reconciliation of net Profit to cash flows of operating
activities- 110 -
Item
Amount of the
current year
Amount of the same
period of the previous
year
Net profit 28,563,853.84 -149,921,057.96
Plus: Asset impairment provision -3,900,000.00
Depreciation of fixed assets, oil & gas assets and consumable
biological assets
8,153,815.59 6,095,009.66
Amortization of intangible assets 79,218.64 52,582.50
Amortization of long-term expenses to be apportioned 292,968.73 159,263.55
Loss on disposal of fixed assets, intangible assets, and other
long-term assets (Profit will be marked with “-“)
-178,098.62 -
Loss on discard of fixed asset (Profit will be marked with “-“) - -
Loss on change of sound value (Profit will be marked with “-“) - -
Financial expenses (Profit will be marked with “-“) -
Loss on investment (Profit will be marked with “-“) -6,518,419.69 182,437,588.32
Decrease of deferred income tax assets (Profit will be marked
with “-“)
-
Increase of deferred income tax liabilities (Decrease will be
marked with “-“)
-547,125.71 -
Decrease of inventories (Increase will be marked with “-“) -
Decrease of operating accounts receivable (Increase will be
marked with “-“)
10,519,979.35 2,566,707.9
Increase of operating accounts payable (Decrease will be
marked with “-“)
-26,848,661.67 -24,970,870.68
Others -2,475,987.69 1,969,055.52
Net cash flow from operating activities 11,041,542.77 14,488,278.81
2. Investment and financing activities not Involving cash
receipts and payments
Conversion of debt into capital
Convertible bonds due within one year
Fixed assets acquired by financing lease
3. Net change in cash and cash equivalents
Cash at the end of the period 399,739,271.43 320,994,327.28
Less: cash at the beginning of the period 375,350,393.53 298,174,735.64
Plus: cash equivalents at the end of the period
Less: Cash equivalents at beginning of the period
Net increase in cash and cash equivalents 24,388,877.90 22,819,591.64
12.Supplementary materials
12.1Details on non-recurring gains and losses
Item Amount Note:
(I) Gains and losses from disposal of non-current assets 169,769.72- 111 -
Item Amount Note:
(II) Tax refund, reduction or exemption upon approval exceeding authorized
limits or without formal documents
Government subsidiaries recorded into current gains and losses (except those
closely related with the Company, which are enjoyed by quotas according to
uniform standards of the State)
(IV) Fund appropriation charges for non-financial entities recorded into
current gains and losses
Profit from the difference caused by the case that the investment cost of the
Company for acquiring subsidiaries, joint ventures and associated enterprises
is less than the recognizable sound value of net assets of invested
organizations, which are enjoyed at the time of acquisition
(VI) Gains and losses from exchange of non-monetary assets
Gains and losses from entrustment of others to make investments or manage
assets
(VIII) Provision for assets impairment withheld for Force Majeure
(IX) Gains and losses from debt restructurings
(X) Expenditures for corporate restructuring, such as expenses for relocation
of employees and for integration
(XI) Gains and losses from unfairly priced transactions in which the
transaction value exceeds the sound value
Net current gains and losses of the subsidiaries due to the merger of the
enterprises under the control of a same entity in the period from the period
beginning to the merger date
Gains and losses from contingency items irrelevant with normal operating
businesses of the Company
Gains and losses from sound value changes by holding of transaction financial
assets and liabilities, except effective hedging business related to normal
businesses of the Company, and investment income from disposal of
transaction financial assets and liabilities as well as financial assets available
for sale
2,947,815.81
Transferred-back impairment provision for accounts receivable, for which
separate impairment tests are carried out
Gains and losses for external entrusted loans
Gains and losses from sound value changes of investment properties, whose
subsequent measurement is carried out by the sound value mode
Influence on current gains and losses by one-off adjustment according to tax
and accounting laws and regulations
Trustee fee from entrusted operation
Other non-operating income and expenses except the above-mentioned items -49,520.06
Other gains and losses fitting the definition of non-recurring gains and losses -
Amount of influence of income tax -676,099.74
Amount of influence of minority shareholders’ equity (after tax) -63,195.71
Total 2,328,770.02- 112 -
12.2ROE and EPS
Earnings per share (Yuan)
Profit in report period
Weighted average
ROE
Basic earnings per
share
Diluted earnings per
share
Net profit attributable to common
shareholders of the Company
2.60% 0.0343 0.0343
Net profit attributable to common
shareholders of the Company after
deduction of -recurring losses and
gains
2.37% 0.0313 0.0313
Approval disclosure on Financial Report
The financial statements were approved to be presented by all directors of the Company on
August 25, 2010.
CHAPTER VII. DOCUMENTS FOR REFERENCE
(I) Text of the Semi-annual Report enclosed with the autograph of the Company’s Chairman of
Board of Directors;
(II) Accounting statements enclosed with seals and autographs of the Company’s legal
representative, Principal of the Accounting and Executive of Accounting;
(III) All announcements disclosed in the newspapers designated by the CSSAC, and the originals
or copies.
Chairman (signature): Wang Chu
Board of Directors of Shenzhen SEG Co., Ltd.
August 27, 2010
