2015 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
Shenzhen SEG Co., Ltd.
2015 Semi-Annual Financial Reports
August 2015
1
I. Auditor's Report
Is the semi-annual report audited?
□ Yes √ No
The Semi-Annual Report of the Company has not been audited.
II. Financial Statements
The monetary unit used in the Notes to Financial Statements is RMB Yuan.
1. Consolidated Balance Sheet
Prepared by: Shenzhen SEG Co., Ltd.
June 30, 2015
Unit: Yuan
Item Closing balance Opening balance
Current assets:
Monetary funds 156,272,010.47 383,056,680.70
Deposit reservation for balance 0.00 0.00
Loans to banks and other financial
30,000,000.00 30,000,000.00
institutions
Financial assets measured by fair value
and whose change was counted into
current gains and losses
Derivative financial assets
Notes receivable 170,000.00 84,618.08
Accounts receivable 135,773,418.34 185,866,040.16
Advances 107,855,702.35 94,633,317.07
Premiums receivable
Reinsurance accounts receivable
Reinsurance deposit receivable
Interest receivable
Dividends receivable
Other accounts receivable 44,545,199.45 95,366,156.27
Redemptory monetary capital for
resale
Inventory 413,535,408.37 278,281,586.72
Item Closing balance Opening balance
Held-for-sale assets
Non-current assets due within one year
Other current assets 335,437,135.06 443,543,013.49
Total current assets 1,223,588,874.04 1,510,831,412.49
Non-current assets:
Loans and advances issued 493,775,722.84 452,517,072.06
Financial assets available for sale 34,772,389.13 34,350,035.45
Held-to-maturity investment 0.00 0.00
Long-term receivables 0.00 0.00
Long-term equity investment 179,023,560.26 82,100,197.01
Investment properties 453,192,705.59 462,562,882.78
Fixed assets 38,829,032.18 41,408,298.43
Construction in progress 216,000.00 0.00
Engineering materials
Disposal of fixed assets
Productive biological assets
Oil & gas assets
Intangible assets 1,058,497.63 655,587.54
Development expenses
Goodwill 10,328,927.82 10,328,927.82
Long-term expenses to be amortized 48,942,524.07 49,768,678.00
Deferred income tax assets 12,218,054.88 10,539,563.16
Other non-current assets 0.00 4,655,063.54
Total non-current assets 1,272,357,414.40 1,148,886,305.79
Total assets 2,495,946,288.44 2,659,717,718.28
Current liabilities:
Short-term borrowing 325,000,000.00 189,246,687.38
Loans from central bank
Deposits attracted and placement from
banks and other financial institutions
Loans from banks and other financial
institutions
Financial liabilities measured by fair
value and whose change was counted
into current gains and losses
Item Closing balance Opening balance
Derivative financial liabilities
Notes payable
Accounts payable 95,811,903.31 200,129,651.92
Advances from customers 152,803,919.56 183,059,311.31
Financial assets sold for repurchase
Service charges and commissions
payable
Payroll payable 10,503,337.50 18,858,843.33
Taxes payable 43,588,325.48 39,445,696.47
Interest payable 85,722.22 10,295,250.65
Dividends payable 3,240,318.18 1,717,882.74
Other payables 201,563,958.02 244,804,403.06
Reinsurance accounts payable
Insurance deposit
Customer brokerage deposits
Securities underwriting brokerage
deposits
Held-for-sale liabilities
Non-current liabilities due within one
year
Other current liabilities 250,000,000.00
Total current liabilities 832,597,484.27 1,137,557,726.86
Non-current liabilities:
Long-term borrowing
Bonds payable
Preferred stock
Perpetual capital securities
Long-term payables
Payroll payable
Special payables
Estimated liabilities
Deferred income 9,669,742.89 9,705,371.01
Deferred income tax liabilities 16,764,859.00 17,085,543.80
Other non-current liabilities
Item Closing balance Opening balance
Total non-current liabilities 26,434,601.89 26,790,914.81
Total liabilities 859,032,086.16 1,164,348,641.67
Owners' equity:
Share capital 784,799,010.00 784,799,010.00
Other equity instruments
Preferred stock
Perpetual capital securities
Capital reserve 506,543,476.91 404,727,257.72
Less: Treasury shares 0.00 0.00
Other comprehensive income 442,719.36 231,817.05
Special reserve
Surplus public reserve 102,912,835.67 102,912,835.67
General risk provision
Retained earnings 41,205,933.02 6,299,799.41
Total owners' equity attributable to the
1,435,903,974.96 1,298,970,719.85
parent company
Minority shareholders' equity 201,010,227.32 196,398,356.76
Total owners' equity 1,636,914,202.28 1,495,369,076.61
Total liabilities and owners' equity 2,495,946,288.44 2,659,717,718.28
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
2. Balance sheet of the parent company
June 30, 2015
Unit: Yuan
Item Closing balance Opening balance
Current assets:
Monetary funds 70,585,590.43 204,395,253.65
Financial assets measured by fair
value and whose change was counted
into current gains and losses
Derivative financial assets
Notes receivable
Accounts receivable
Item Closing balance Opening balance
Advances 294,400.00 0.00
Interest receivable 208,333.00 897,225.78
Dividends receivable 1,575,000.00 0.00
Other accounts receivable 527,598,906.07 410,453,048.03
Inventory 820,368.20 786,589.00
Held-for-sale assets
Non-current assets due within one
year
Other current assets 395,500,000.00 463,590,246.68
Total current assets 996,582,597.70 1,080,122,363.14
Non-current assets:
Financial assets available for sale 33,515,392.83 33,515,392.83
Held-to-maturity investment
Long-term receivables
Long-term equity investment 449,007,086.50 382,083,723.25
Investment properties 289,659,415.56 294,918,970.98
Fixed assets 19,101,341.06 19,583,422.45
Construction in progress
Engineering materials
Disposal of fixed assets
Productive biological assets
Oil & gas assets
Intangible assets 720,493.97 271,067.06
Development expenses
Goodwill
Long-term expenses to be
6,480,322.27 4,589,158.00
amortized
Deferred income tax assets 8,254,062.87 8,354,062.87
Other non-current assets 0.00 1,313,063.54
Total non-current assets 806,738,115.06 744,628,860.98
Total assets 1,803,320,712.76 1,824,751,224.12
Current liabilities:
Short-term borrowing 215,000,000.00 100,000,000.00
Financial liabilities measured by
fair value and whose change was
Item Closing balance Opening balance
counted into current gains and losses
Derivative financial liabilities
Notes payable
Accounts payable 7,913.52 1,500.00
Advances from customers 30,750,802.37 65,628,441.87
Payroll payable 5,089,485.62 9,907,467.00
Taxes payable 31,610,080.65 20,697,003.64
Interest payable 85,722.22 10,237,500.66
Dividends payable 119,803.29 119,803.29
Other payables 90,103,394.72 87,202,387.17
Held-for-sale liabilities
Non-current liabilities due within
one year
Other current liabilities 250,000,000.00
Total current liabilities 372,767,202.39 543,794,103.63
Non-current liabilities:
Long-term borrowing
Bonds payable
Preferred stock
Perpetual capital
securities
Long-term payables
Payroll payable
Special payables
Estimated liabilities
Deferred income
Deferred income tax liabilities 9,500,000.00 9,500,000.00
Other non-current liabilities
Total non-current liabilities 9,500,000.00 9,500,000.00
Total liabilities 382,267,202.39 553,294,103.63
Owners' equity:
Share capital 784,799,010.00 784,799,010.00
Other equity instruments
Preferred stock
Item Closing balance Opening balance
Perpetual capital
securities
Capital reserve 507,771,483.63 405,955,264.44
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus public reserve 102,912,835.67 102,912,835.67
Retained earnings 25,570,181.07 -22,209,989.62
Total owners' equity 1,421,053,510.37 1,271,457,120.49
Total liabilities and owners' equity 1,803,320,712.76 1,824,751,224.12
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
3. Consolidated profit statement
June 2015
Unit: Yuan
Amount incurred in the report
Item Amount incurred in the previous period
period
I. Total operating revenue 425,219,054.09 337,216,748.01
Including: Operating revenue 374,555,135.61 316,141,381.01
Interest income 47,553,384.48 21,039,537.00
Earned premiums
Service charges and commissions
3,110,534.00 35,830.00
income
II. Total operating cost 358,714,002.72 279,600,778.34
Including: Operating cost 317,303,931.44 248,349,208.37
Interest expenses 3,159,048.64 1,693,472.23
Commissions
Surrender value
Net compensation pay-outs
Net insurance deposit accrued
Insurance dividends
Reinsurance expenses
Operating tax and surcharges 13,748,030.14 12,817,853.52
Amount incurred in the report
Item Amount incurred in the previous period
period
Sale expenses 941,405.12 1,002,320.62
Management expenses 16,004,563.26 15,637,568.42
Financial cost 843,057.23 388,862.46
Loss from asset impairment 6,713,966.89 -288,507.28
Income from change of sound value (Loss
is marked with "-")
Income from investment (Loss is
5,451,963.64 11,731,540.84
marked with "-")
Including: Income from investment
-4,892,855.94 -1,746,429.31
in joint ventures and associated enterprises
Income from exchange (Loss is
marked with "-")
III. Operating profit (Loss is marked with "-") 71,957,015.01 69,347,510.51
Add: Non-operating revenue 1,045,979.11 1,242,335.04
Including: Gains on disposal of
18,693.10 20,120.00
non-current assets
Less: Non-operating expenses 815,788.94 131,965.13
Including: Loss from disposal of
196,424.21 4,831.25
non-current assets
IV. Total profit (Total loss is marked with "-") 72,187,205.18 70,457,880.42
Less: Income tax 20,121,370.92 18,633,100.05
V. Net profit (Net loss is marked with "-") 52,065,834.26 51,824,780.37
Net profit attributable to shareholders of
34,906,133.61 37,645,842.28
the parent company
Profit and loss of minority shareholders 17,159,700.65 14,178,938.09
VI. Net of tax of other comprehensive incomes 316,765.26 -72,819.60
Total owners' net of tax of other
comprehensive incomes attributable to the 210,902.31 -48,483.29
parent company
1. Other comprehensive incomes that
cannot be reclassified into gains and losses
(1) Changes of net liabilities or net assets
of the re-measured defined benefit plans
(2) Shares of the investee of other
comprehensive incomes that cannot be
reclassified into gains and losses under the
Amount incurred in the report
Item Amount incurred in the previous period
period
equity method
2. Other comprehensive incomes that can
210,902.31 -48,483.29
be categorized as gains and losses
(1) Shares of the investee of other
comprehensive incomes that can be
categorized as gains and losses under the
equity method
(2) Gains and losses from changes of fair
210,902.31 -48,483.29
value of the available-for-sale financial assets
(3) Held-to-maturity investments
categorized as gains and losses from the
available-for-sale financial assets
(4) Effective gains or loss from cash flows
(5) Translation difference of the financial
statements in foreign currency Less:
(6) Others
Net of tax of other comprehensive incomes
105,862.95 -24,336.31
attributable to minority shareholders
VII. Total comprehensive income 52,382,599.52 51,751,960.77
Total comprehensive income attributable
35,117,035.92 37,597,358.99
to shareholders of the parent company
Total comprehensive income attributable
17,265,563.60 14,154,601.78
to minority shareholders
VIII. Earnings per share
1. Basic earnings per share 0.0445 0.0480
2. Diluted earnings per share 0.0445 0.0480
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
4. Profit statement of the parent company
Unit: Yuan
Item Amount incurred in the report period Amount incurred in the previous period
I. Operating revenue 66,577,264.42 67,615,859.10
Less: Operating cost 44,695,244.80 40,521,511.25
Operating tax and 3,724,403.75 3,815,819.15
surcharges
Sale expenses 0.00 0.00
Management expenses 6,176,205.10 5,818,692.93
Financial cost -7,698,774.31 -6,964,476.32
Loss from asset impairment -400,000.00 -11,420.00
Income from change of sound
value (Loss is marked with "-")
Income from investment 37,619,081.12 27,365,616.55
(Loss is marked with "-")
Including: Income from -4,892,855.94 -1,746,429.31
investment in joint ventures and
associated enterprises
II. Operating profit (Loss is marked 57,699,266.20 51,801,348.64
with "-")
Add: Non-operating revenue 214,230.19 7,799.80
Including: Gains on
disposal of non-current assets
Less: Non-operating expenses 21,350.50 31,030.00
Including: Loss from 4,100.50 1,270.00
disposal of non-current assets
III. Total profit (Total loss is marked 57,892,145.89 51,778,118.44
with "-")
Less: Income tax 10,111,975.20 8,907,418.65
V. Net profit (Net loss is marked with 47,780,170.69 42,870,699.79
"-")
V. Net of tax of other comprehensive
incomes
1. Other comprehensive incomes
that cannot be reclassified into gains
and losses
(1) Changes of net
liabilities or net assets of the
re-measured defined benefit plans
(2) Shares of the investee
of other comprehensive incomes that
cannot be reclassified into gains and
losses under the equity method
2. Other comprehensive incomes
that can be categorized as gains and
losses
(1) Shares of the investee
of other comprehensive incomes that
can be categorized as gains and losses
under the equity method
(2) Gains and losses from
changes of fair value of the
available-for-sale financial assets
(3) Held-to-maturity
investments categorized as gains and
losses from the available-for-sale
financial assets
(4) Effective gains or
loss from cash flows
(5) Translation difference
of the financial statements in foreign
currency Less:
(6) Others
VI. Total comprehensive income 47,780,170.69 42,870,699.79
VII. Earnings per share
1. Basic earnings per share
2. Diluted earnings per share
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
5. Consolidated cash flow statement
June 2015
Unit: Yuan
Item Amount incurred in the report period Amount incurred in the previous period
I. Cash flow from operating activities:
Cash received from sales of goods
713,661,591.72 935,596,634.26
and rendering of services
Net increase in customer bank
deposits and placement from banks and
other financial institutions
Net increase in loans from central
bank
Net increase in borrowing from
other financial institutions
Cash received from premiums of
primary insurance contracts
Item Amount incurred in the report period Amount incurred in the previous period
Net cash received from
reinsurance business
Net increase in deposits from
policyholders and investment
Net increase of financial assets
measured by fair value and whose
change was counted into current gains
and losses
Cash received from interest and
48,000,243.60 23,827,215.54
commissions
Net increase of loans from banks
and other financial institutions
Net increase of redemption capital
Tax refunds 88,433,998.57 14,612,922.49
Other cash received relating to 230,075,360.61 207,915,740.34
operating activities
Subtotal of cash inflow from 1,080,171,194.50 1,181,952,512.63
operating activities
Cash paid for goods and service 824,078,559.71 946,283,803.58
Net increase of loans to customers
48,372,311.47 -15,979,866.00
and advances
Net increase in deposits with
central bank and other financial
institutions
Cash paid for compensation
pay-outs of primary insurance
contracts
Cash paid for interest, service
24,453.96 423,331.00
charges, and commissions
Cash paid as insurance dividends
Cash paid to and on behalf of
51,910,984.07 44,575,412.97
employees
Taxes paid 62,553,032.06 98,500,207.88
Other cash paid relating to
191,819,686.85 212,531,819.79
operating activities
Subtotal of cash outflow in operating
1,178,759,028.12 1,286,334,709.22
activities
Net cash flow from operating activities -98,587,833.62 -104,382,196.59
Item Amount incurred in the report period Amount incurred in the previous period
II. Cash flows from investing
activities:
Cash received from withdrawal of
1,318,877,729.90 2,008,400,000.00
investment
Cash received from investment
10,137,874.16 13,477,970.15
income
Net cash received from disposal
of fixed assets, intangible assets and 28,493.50 20,100.00
other long-term assets
Net cash received from disposal
of subsidiaries and other business units
Other cash received relating to
investing activities
Subtotal of cash inflow from investing
1,329,044,097.56 2,021,898,070.15
activities
Cash paid for purchase and
construction of fixed assets, intangible 9,058,685.65 7,506,324.71
assets and other long-term assets
Cash paid for investment 1,243,610,000.00 2,044,679,000.00
Net increase of mortgage loans
Net cash paid for acquisition of
subsidiaries and other business units
Other cash paid relating to
investing activities
Subtotal of cash outflow in investing
1,252,668,685.65 2,052,185,324.71
activities
Net cash flow from investing activities 76,375,411.91 -30,287,254.56
III. Cash flow from financing
activities:
Cash received from attraction of
investment
Including: Cash received by
subsidiaries from investment of
minority shareholders
Borrowings received 295,000,000.00 266,000,000.00
Cash received from bond issue
Other cash received relating to
250,000,000.00
financing activities
Item Amount incurred in the report period Amount incurred in the previous period
Subtotal of cash inflow from financing
295,000,000.00 516,000,000.00
activities
Cash repayments of amounts
409,246,687.38 78,049,280.96
borrowed
Cash paid for dividend and profit
31,895,839.49 9,295,476.51
distribution or interest payment
Including: Dividends and profit
paid by subsidiaries to minority 10,728,693.04 2,280,000.00
shareholders
Other cash paid relating to
58,429,722.92 240,000.00
financing activities
Subtotal of cash outflow in financing
499,572,249.79 87,584,757.47
activities
Net cash flow arising from financing
-204,572,249.79 428,415,242.53
activities
IV. Influence of exchange rate
fluctuation on cash and cash 1.27 7.39
equivalents
V. Net increase in cash and cash
-226,784,670.23 293,745,798.77
equivalents
Add: Opening balance of cash and
382,056,680.70 335,593,493.81
cash equivalents
VI. Ending balance of cash and cash
155,272,010.47 629,339,292.58
equivalents
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
6. Cash flow statement of the parent company
June 2015
Unit: Yuan
Item Amount incurred in the report period Amount incurred in the previous period
I. Cash flow from operating activities:
Cash received from sales of goods
46,077,293.80 56,440,164.28
and rendering of services
Tax refunds
Item Amount incurred in the report period Amount incurred in the previous period
Other cash received relating to
134,093,553.11 380,734,537.10
operating activities
Subtotal of cash inflow from operating
180,170,846.91 437,174,701.38
activities
Cash paid for goods and service 27,279,852.92 13,854,524.96
Cash paid to and on behalf of
18,281,258.17 16,227,816.49
employees
Taxes paid 27,836,566.09 72,620,128.50
Other cash paid relating to
224,334,962.62 424,319,316.44
operating activities
Subtotal of cash outflow in operating
297,732,639.80 527,021,786.39
activities
Net cash flow from operating activities -117,561,792.89 -89,847,085.01
II. Cash flows from investing
activities:
Cash received from withdrawal of
1,258,100,000.00 1,824,000,000.00
investment
Cash received from investment
41,546,585.40 12,123,227.48
income
Net cash received from disposal
of fixed assets, intangible assets and
other long-term assets
Net cash received from disposal
of subsidiaries and other business units
Other cash received relating to
investing activities
Subtotal of cash inflow from investing
1,299,646,585.40 1,836,123,227.48
activities
Cash paid for purchase and
construction of fixed assets, intangible 251,207.00 689,269.32
assets and other long-term assets
Cash paid for investment 1,160,600,000.00 1,864,000,000.00
Net cash paid for acquisition of
subsidiaries and other business units
Other cash paid relating to
investing activities
Subtotal of cash outflow in investing
1,160,851,207.00 1,864,689,269.32
activities
Item Amount incurred in the report period Amount incurred in the previous period
Net cash flow from investing activities 138,795,378.40 -28,566,041.84
III. Cash flow from financing
activities:
Cash received from attraction of
investment
Borrowings received 215,000,000.00 180,000,000.00
Cash received from bond issue
Other cash received relating to
250,000,000.00
financing activities
Subtotal of cash inflow from financing
215,000,000.00 430,000,000.00
activities
Cash repayments of amounts
350,000,000.00 8,000,000.00
borrowed
Cash paid for dividend and profit
20,043,250.00 1,467,733.34
distribution or interest payment
Other cash paid relating to
financing activities
Subtotal of cash outflow in financing
370,043,250.00 9,467,733.34
activities
Net cash flow arising from financing
-155,043,250.00 420,532,266.66
activities
IV. Influence of exchange rate
fluctuation on cash and cash 1.27 7.39
equivalents
V. Net increase in cash and cash
-133,809,663.22 302,119,147.20
equivalents
Add: Opening balance of cash and
204,395,253.65 173,141,378.64
cash equivalents
VI. Ending balance of cash and cash
70,585,590.43 475,260,525.84
equivalents
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
7. Consolidated statement of changes in owners' equity
June 2015
Amount incurred in the report period
Unit: Yuan
Amount incurred in the report period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item
Less: Other General
Special Surplus public Retained shareholders' Total owners' equity
Perpetual
Share capital Preferred Capital reserve Treasury comprehensive risk
reserve reserve earnings equity
capital Others
Shares shares income provision
securities
I. Ending balance
of the previous 784,799,010.00 404,727,257.72 231,817.05 102,912,835.67 6,299,799.41 196,398,356.76 1,495,369,076.61
year
Plus:
Change due to
alteration of
accounting
policies
Correction to
errors of the
previous period
Merger
of the enterprises
under the control
Amount incurred in the report period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item
Less: Other General
Special Surplus public Retained shareholders' Total owners' equity
Perpetual
Share capital Preferred Capital reserve Treasury comprehensive risk
reserve reserve earnings equity
capital Others
Shares shares income provision
securities
of a same entity
Others
II. Beginning
balance of the 784,799,010.00 404,727,257.72 231,817.05 102,912,835.67 6,299,799.41 196,398,356.76 1,495,369,076.61
current year
III. Increase and
decrease of the
current year 101,816,219.19 210,902.31 34,906,133.61 4,611,870.56 141,545,125.67
(Decrease is
marked with "-")
1. Total
comprehensive 210,902.31 34,906,133.61 17,265,563.60 52,382,599.52
income
2. Capital
invested or
decreased by
owners
(1) Ordinary
shares invested
by the
shareholders
Amount incurred in the report period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item
Less: Other General
Special Surplus public Retained shareholders' Total owners' equity
Perpetual
Share capital Preferred Capital reserve Treasury comprehensive risk
reserve reserve earnings equity
capital Others
Shares shares income provision
securities
(2) Capitals
invested by other
equity instrument
holders
(3) Amount of
share-based
payment included
in owners' equity
(4) Others
3. Profit
-12,653,693.04 -12,653,693.04
distribution
(1) Withdrawal of
surplus public
reserve
(2) Withdrawal of
general risk
provision
(3) Amount
distributed to -12,653,693.04 -12,653,693.04
owners (or
Amount incurred in the report period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item
Less: Other General
Special Surplus public Retained shareholders' Total owners' equity
Perpetual
Share capital Preferred Capital reserve Treasury comprehensive risk
reserve reserve earnings equity
capital Others
Shares shares income provision
securities
shareholders)
(4) Others
4. Internal
carrying forward
of owners' equity
(1) Capital
reserve
transferred to
increase capital
(or share capital)
(2) Surplus
public reserve
transferred to
increase capital
(or share capital)
(3) Surplus
public reserve
compensating
losses
(4) Others
Amount incurred in the report period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item
Less: Other General
Special Surplus public Retained shareholders' Total owners' equity
Perpetual
Share capital Preferred Capital reserve Treasury comprehensive risk
reserve reserve earnings equity
capital Others
Shares shares income provision
securities
5. Special reserve
(1) Accrual of the
current year
(2) Amount
utilized in the
current period
6. Others 101,816,219.19 101,816,219.19
IV. Ending
balance of the 784,799,010.00 506,543,476.91 442,719.36 102,912,835.67 41,205,933.02 201,010,227.32 1,636,914,202.28
current period
Amount of the previous year
Unit: Yuan
Amount of the previous period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item Total owners'
Less: Other
Special Surplus public General risk Retained shareholders'
Perpetual equity
Share capital Preferred Capital reserve Treasury comprehensive
reserve reserve provision earnings equity
capital Others
Shares shares income
securities
I. Ending balance of the
784,799,010.00 404,357,267.73 235,756.32 102,912,835.67 -42,080,494.64 185,584,512.58 1,435,808,887.66
previous year
Plus: Change due to
alteration of accounting
policies
Correction to errors
of the previous period
Merger of the
enterprises under the control of
a same entity
Others
II. Beginning balance of the
784,799,010.00 404,357,267.73 235,756.32 102,912,835.67 -42,080,494.64 185,584,512.58 1,435,808,887.66
current year
III. Increase and decrease of
the current year (Decrease is -48,483.29 37,645,842.28 -2,952,891.72 34,644,467.27
marked with "-")
1. Total comprehensive income -48,483.29 37,645,842.28 14,154,601.78 51,751,960.77
Amount of the previous period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item Total owners'
Less: Other
Special Surplus public General risk Retained shareholders'
Perpetual equity
Share capital Preferred Capital reserve Treasury comprehensive
reserve reserve provision earnings equity
capital Others
Shares shares income
securities
2. Capital invested or
decreased by owners
(1) Ordinary shares invested by
the shareholders
(2) Capitals invested by other
equity instrument holders
(3) Amount of share-based
payment included in owners'
equity
(4) Others
3. Profit distribution -17,107,493.50 -17,107,493.50
(1) Withdrawal of surplus
public reserve
(2) Withdrawal of general risk
provision
(3) Amount distributed to
-17,107,493.50 -17,107,493.50
owners (or shareholders)
(4) Others
4. Internal carrying forward of
Amount of the previous period
Owners' equity attributable to the parent company
Other equity instruments Minority
Item Total owners'
Less: Other
Special Surplus public General risk Retained shareholders'
Perpetual equity
Share capital Preferred Capital reserve Treasury comprehensive
reserve reserve provision earnings equity
capital Others
Shares shares income
securities
owners' equity
(1) Capital reserve transferred
to increase capital (or share
capital)
(2) Surplus public reserve
transferred to increase capital
(or share capital)
(3) Surplus public reserve
compensating losses
(4) Others
5. Special reserve
(1) Accrual of the current year
(2) Amount utilized in the
current period
6. Others
IV. Ending balance of the
784,799,010.00 404,357,267.73 187,273.03 102,912,835.67 -4,434,652.36 182,631,620.86 1,470,453,354.93
current period
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
8. Statements of Changes in Owners' Equity of the Parent Company
June 2015
Amount incurred in the current period
Unit: Yuan
Current Period
Other Equity Instruments
Less: Other
Item Capital Public Special Surplus Public Undistributed Total Owners'
Perpetual
Share Capital Preferred Treasury Comprehensive
Capital Others Reserves Reserves Reserves Profits Equity
Shares Shares Incomes
Securities
I. Ending balance of the
784,799,010.00 405,955,264.44 102,912,835.67 -22,209,989.62 1,271,457,120.49
previous year
Add: Changes in
accounting policies
Correction of
prior period errors
Others
II. Beginning balance of
784,799,010.00 405,955,264.44 102,912,835.67 -22,209,989.62 1,271,457,120.49
the current year
III. Increase or decrease
of the current year ("-" 101,816,219.19 47,780,170.69 149,596,389.88
for losses)
(I) Total comprehensive
47,780,170.69 47,780,170.69
incomes
(II) Owners' capital
Current Period
Other Equity Instruments
Less: Other
Item Capital Public Special Surplus Public Undistributed Total Owners'
Perpetual
Share Capital Preferred Treasury Comprehensive
Capital Others Reserves Reserves Reserves Profits Equity
Shares Shares Incomes
Securities
investment or reduction
1. Common shares
invested by shareholders
2. Capital invested by
other equity instrument
holders
3. Amount of share-based
payment recorded in
owners' equity
4. Others
(III) Profit distribution
1. Accrual of surplus
public reserves
2. Profit distribution to
owners (or shareholders)
3. Others
(IV) Internal carryover in
owners' equity
1. Transfer of capital
public reserves into
paid-in capital (or share
Current Period
Other Equity Instruments
Less: Other
Item Capital Public Special Surplus Public Undistributed Total Owners'
Perpetual
Share Capital Preferred Treasury Comprehensive
Capital Others Reserves Reserves Reserves Profits Equity
Shares Shares Incomes
Securities
capital)
2. Transfer of surplus
public reserves into
paid-in capital (or share
capital)
3. Compensation of
losses with surplus public
reserves
4. Others
(V) Special reserves
1. Accrual in the current
period
2. Use in the current
period
(VI) Others 101,816,219.19 101,816,219.19
IV. Ending balance of the
784,799,010.00 507,771,483.63 102,912,835.67 25,570,181.07 1,421,053,510.37
current period
Amount incurred in the previous year
Unit: Yuan
Previous Period
Other Equity Instruments
Less: Other
Item Capital Public Special Surplus Public Undistributed Total Owners'
Perpetual
Share Capital Preferred Treasury Comprehensive
Capital Others Reserves Reserves Reserves Profits Equity
Shares Shares Incomes
Securities
I. Ending balance of the
784,799,010.00 405,652,893.32 102,912,835.67 -55,097,962.63 1,238,266,776.36
previous year
Add: Changes in
accounting policies
Correction of
prior period errors
Others
II. Beginning balance of
784,799,010.00 405,652,893.32 102,912,835.67 -55,097,962.63 1,238,266,776.36
the current year
III. Increase or decrease
of the current year ("-" 42,870,699.79 42,870,699.79
for losses)
(1) Total comprehensive
42,870,699.79 42,870,699.79
incomes
(2) Owners' capital
investment or reduction
1. Common shares
invested by shareholders
Previous Period
Other Equity Instruments
Less: Other
Item Capital Public Special Surplus Public Undistributed Total Owners'
Perpetual
Share Capital Preferred Treasury Comprehensive
Capital Others Reserves Reserves Reserves Profits Equity
Shares Shares Incomes
Securities
2. Capital invested by
other equity instrument
holders
3. Amount of share-based
payment recorded in
owners' equity
4. Others
(III) Profit distribution
1. Accrual of surplus
public reserves
2. Profit distribution to
owners (or shareholders)
3. Others
(IV) Internal carryover in
owners' equity
1. Transfer of capital
public reserves into
paid-in capital (or share
capital)
2. Transfer of surplus
public reserves into
Previous Period
Other Equity Instruments
Less: Other
Item Capital Public Special Surplus Public Undistributed Total Owners'
Perpetual
Share Capital Preferred Treasury Comprehensive
Capital Others Reserves Reserves Reserves Profits Equity
Shares Shares Incomes
Securities
paid-in capital (or share
capital)
3. Compensation of
losses with surplus public
reserves
4. Others
(V) Special reserves
1. Accrual in the current
period
2. Use in the current
period
(VI) Others
IV. Ending balance of the
784,799,010.00 405,652,893.32 102,912,835.67 -12,227,262.84 1,281,137,476.15
current period
Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Person in charge of the accounting institution: Ying Huadong
III. Company Profile
1. Registered Address, Organizational Form, and Headquarters Address of the Company
Shenzhen SEG Co., Ltd. (hereinafter referred to as "Company" or "the Company") was incorporated on July 16th,
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 a Business License for Enterprise Legal
Person numbered SHEN SI ZI N16886, with a registration number of 440301103573251. And 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 in Shenzhen Stock Exchange respectively in July and December, 1996.
On June 7th, 2006, a resolution on the split share structure reform of the Company was adopted in the general
meeting of shareholders. According to the plan on directional conversion of capital public reserves into share
capital that is adopted in the general meeting of shareholders, the Company distributed such converted share
capital to tradable A share shareholders. Such shareholders obtained 4.6445 converted shares for each 10 shares,
which totaled 40,233,322 converted shares. As a result, non-tradable A shares were also authorized to be listed and
circulated. Among the converted shares obtained by the tradable A share shareholders, 6,997,054 shares that were
received due to the Company's share capital expansion were deducted, and the rest 33,236,268 shares were the
consideration paid to the tradable A share shareholders by non-tradable A share shareholders under fixed
arrangements.
As of December 31, 2014, the total shares of the Company amounted to 784,799,010 shares, including 26,689
shares with trading limited conditions and 784,772,321 shares without trading limited conditions. The registered
capital is 784,799,010 Yuan and the registered address is 31/F, Tower A, Stars Plaza, Huaqiang Road (N), Futian
District, Shenzhen. The parent company is Shenzhen SEG Group Co., Ltd. and the actual controller of the group is
Shenzhen Municipal People's Government State-owned Assets Supervision and Administration Commission.
Business Scope
Scope for general business: domestic commerce, goods supply and sale (excluding commodities under special
operation, control and sale), development of industrial projects (specific projects shall be separately applied for),
economic information consultancy, property lease, estate agency, and operation of SEG special electronics
markets (the license for the special markets shall be separately applied for).
Business Nature and Main Business Activities of the Company
The Company belongs to the business service industry, and is mainly engaged in the operation and management of
professional electronics markets, leasing service, and other services in the tertiary industry.
1. Scope of the Consolidated Financial Statement
There are 20 entities included in the scope of the consolidated financial statement in the current period, and the
entities are listed in the following table.
Shareholding Voting Right
Subsidiary Name Type of Subsidiary Subprime
Proportion (%) Proportion (%)
Shenzhen SEG Baohua Enterprise Development Co., Share-controlled
--- 66.58 66.58
Ltd. subsidiary
Shenzhen Mellow Orange Business Hotel Share-controlled
2 66.58 66.58
Management Co., Ltd. grandchild company
Wholly-owned
Shenzhen SEG Industrial Investment Co., Ltd. --- 100.00 100.00
subsidiary
Share-controlled
Changsha SEG Development Co., Ltd. --- 46.00 51.00
subsidiary
Shenzhen SEG Electronics Market Management Co., Share-controlled
--- 70.00 70.00
Ltd. subsidiary
Share-controlled
Suzhou SEG Electronics Market Co., Ltd. --- 45.00 45.00
subsidiary
Share-controlled
Xi’an SEG Electronics Market Co., Ltd. --- 65.00 65.00
subsidiary
Share-controlled
Shenzhen SEG Credit Co., Ltd. --- 53.02 53.02
subsidiary
Share-controlled
Shenzhen SEG E-Commerce Co., Ltd. --- 51.00 51.00
subsidiary
Shenzhen SEG Electronics Market Management Co., Wholly-owned
--- 100.00 100.00
Ltd. subsidiary
Share-controlled
Xi'an Hairong SEG Electronics Market Co., Ltd. --- 51.00 51.00
subsidiary
Share-controlled
Wujiang SEG Electronics Market Co., Ltd. --- 51.00 51.00
subsidiary
Share-controlled
Wuxi SEG Electronics Market Co., Ltd. --- 51.00 51.00
subsidiary
Shunde SEG Electronics Market Management Co., Wholly-owned
--- 100.00 100.00
Ltd. subsidiary
Nanning SEG Electronics Market Management Co., Wholly-owned
--- 100.00 100.00
Ltd. subsidiary
Wholly-owned
Nantong SEG Times Square Development Co., Ltd. --- 100.00 100.00
subsidiary
Share-controlled
Yantai SEG Times Square Development Co., Ltd. --- 90.00 90.00
subsidiary
Nantong SEG Commercial Operation Management Wholly-owned
--- 100.00 100.00
Co., Ltd. subsidiary
Wholly-owned
Suzhou SEG Digital Plaza Management Co., Ltd. --- 100.00 100.00
subsidiary
Xi'an Fengdong New Town SEG Times Square Wholly-owned
--- 100.00 100.00
Properties Co., Ltd. subsidiary
No changes occur in the entities included in the scope of the consolidated financial statement in the current period,
in comparison with those included in the scope of the consolidated financial statement at the beginning of the
year.
IV. Basis for Preparation of Financial Statements
1. Preparation Basis
The Company conducts recognition and measurement based on the continuous operation principle and the
transactions and events that actually occur and in accordance with the Accounting Standards for Business
Enterprises (ASBE), which comprises a basic standard, the application guide of the ASBE, the interpretation of
the ASBE, and other relevant regulations (hereinafter collectively called "ASBE") promulgated by the Ministry of
Finance of the People's Republic of China. Financial statements are prepared on such a basis and the No. 15
Preparation Conventions of Information Disclosure by Companies Offering Securities to the Public - General
Regulations on Financial Report (amended in 2014) released by China Securities Regulatory Commission.
2. Continuous Operation
No event or situation that raises major problems for the continuous operation capability of the Company occurs
within 12 months since the end of the report period.
V. Important Accounting Policies and Accounting Estimates
1. Statement on ASBE Compliance
Financial statements prepared by the Company comply with the requirements of the ASBE and truthfully and
completely reflect the financial conditions, operating results, and cash flow, and other relevant information of the
Company in the report period.
2. Accounting Period
One fiscal year lasts from January 1st to December 31st of the Gregorian calendar.
3. Operating Cycle
One operating cycle lasts from January 1st to December 31st of the Gregorian calendar.
4. Recording Currency
Renminbi is the recording currency of the financial statements of the Company.
5. Accounting Treatment Methods for Business Combinations under or not under Common Control
If clauses, conditions, and economic impact of each transaction involved in the step-by-step business combination
conform to the following one or multiple cases, multiple transactions are considered as a package deal for
accounting treatment:
(1) These transactions are concluded simultaneously or concluded when the impact on each other is considered.
(2) These transactions reach a complete business result as a whole.
(3) The occurrence of one transaction depends on the occurrence of at least other one transaction.
(4) One transaction alone is deemed uneconomical but deemed economical when it is considered with other
transactions together.
Business combination under common control
① Individual financial statements
If the Company pays cash, transfers non-monetary assets, assumes liabilities, or issues equity securities as the
consideration of a business combination, the shares of the book value of the owners' equity of a combined party in
the consolidated financial statement of the final controlling party on the combination date is used as the initial
investment cost of the long-term equity investment. The capital public reserves are adjusted for the difference
between the initial investment cost of the long-term equity investment and the paid-in combination consideration,
and retained incomes are adjusted if the capital public reserves are insufficient for offsetting. If consideration
exists and estimated liabilities or assets need to be recognized, the capital public reserves (capital premium or
share premium) are adjusted for the difference between the amount of the estimated liabilities or assets and
subsequent contingent consideration settlement amount, and retained incomes are adjusted if the capital public
reserves are insufficient for offsetting.
For a business combination achieved through multiple transactions, if these transactions belong to a package deal,
each transaction is considered as a transaction with control rights for accounting treatment; if these transactions do
not belong to a package deal, the capital public reserves are adjusted for the difference, on the date that the control
rights are obtained, between the initial investment cost of the long-term equity investment and the sum of the book
value of the long-term equity investment before a combination is reached and the book value of new consideration
paid for obtained shares on the combination date, and the retained incomes are adjusted if the capital public
reserves are insufficient for offsetting. For the equity investment held prior to the combination date, accounting
treatment is not conducted on other comprehensive incomes accounted using the equity method or recognized by
using by financial instruments and accounted and recognized according to measurement criteria, till the same
basis for directly disposing of relevant assets or liabilities by an invested organization is adopted for accounting
treatment when this investment is disposed of; accounting treatment is not conducted on changes in owners' equity
in the invested organization' net assets accounted and recognized using the equity method, except net profits and
losses, other comprehensive incomes, and profit distribution, till they are transferred into the profits and losses in
the current period when such an investment is disposed of.
Direct relevant fees arising from a combination, including audit fees, evaluation fees, legal service fees paid for
the combination are recorded, at the occurrence time, in the profits and losses in the current period. For
transaction fees that are directly relevant to the issuance of equity instruments used as the combination
consideration, the capital pubic reserves are used for offsetting. If the capital public reserves are insufficient for
offsetting, the surplus public reserves and undistributed profits are used for offsetting in sequence. Transaction
fees that are directly relevant to the issuance of liability instruments used as the combination considerations, are
recorded into liability instruments as the initial recognition amount.
If a combined party has consolidated financial statements, the initial investment cost of the long-term equity
investment is determined based on the owners' equity attributable to the parent company in the consolidated
financial statements of the combined party on the combination date.
② Consolidated financial statements
Assets and liabilities obtained by the combing party through a business combination are measured at the book
value of owners' equity of the combined party in the consolidated financial statement of the final controlling party
on the combination date.
For a business combination achieved through multiple transactions, if these transactions belong to a package deal,
each transaction is considered as a transaction with control rights for accounting treatment; if these transactions do
not belong to a package deal, the long-term equity investment held by the combining party prior to the
combination, and recognized profits and losses, other comprehensive incomes, and changes in other owners'
equity between the acquisition date and the date on which the controlling party and controlled party are under the
final control of the same party, whichever is later, and the combination date, are used to offset the retained
incomes at the period beginning or the profits or losses in the current period in the comparison statement period.
When the accounting policies of each combined party are inconsistent with those of the Company, the Company
makes adjustments on the combination date in accordance with its own accounting policies and then on this basis,
conducts recognition in accordance with the ASBE.
Business combination not under common control
The cost for a business combination not under common control is the fair value of the assets paid, liabilities
incurred or assumed, and equity instruments or liability instruments issued for the Company to acquire the control
over the acquiree on the acquisition date. If future items that are likely to influence the combination cost, for
which a relevant agreement has been reached in the combination contract, on the acquisition date, are estimated
very possible to occur and the amount of their influence on the combination cost can be measured reliably, these
future items are also recorded in the combination cost.
The audit, legal service, evaluation and consulting, and other management fees paid by the Company for a
business combination are recorded in the profits and losses in the current period at the time of occurrence. The
transaction expenses of equity instruments and liability instruments issued by the Company as the combination
consideration are recorded in the initial recognition amount of equity instruments or liability instruments.
If the combination cost is larger than the shares of the fair value of the acquiree's identifiable net assets obtained
from the combination, the Company recognizes their difference as goodwill. If the combination cost is smaller
than the shares of the fair value of the acquiree's identifiable net assets obtained from the combination and the
result is the same after re-check, the Company records their difference in the profits and losses in the current
period.
For a business combination not under common control achieved in steps through multiple exchange transactions,
if these transactions belong to a package deal, each transaction is considered as a transaction with control rights
for accounting treatment; if these transactions do not belong to a package deal, individual financial statements and
consolidated financial statements are differentiated for accounting treatment:
A. In individual financial statements, for the equity investment held prior to the combination date and accounted
using the equity method, the sum of the book value of the acquiree's equity investment held prior to the
acquisition date and new investment cost obtained on the acquisition date is used as the initial investment cost of
such an investment; for other comprehensive incomes accounted and recognized using the equity method in the
equity investment held prior to the acquisition date, the same basis for directly disposing of relevant assets or
liabilities by invested organizations is adopted for accounting treatment when this investment is disposed of.
When the equity investment held prior to the combination date is recognized using financial instruments and is
accounted according to measurement criteria, the sum of the fair value of the equity investment on the
combination date and the new investment cost is used as the initial investment cost of the combination date. The
difference between the fair value and the book value of the originally held equity and changes in the accumulative
fair value that is originally recorded in other comprehensive incomes is transferred into investment incomes in the
current period, to which the combination date belongs.
B. In consolidated financial statements, the acquiree's equity held prior to the acquisition date is re-measured at
the equity's fair value on the acquisition date, and the difference between the fair value and the book value of the
equity is recorded in investment incomes in the current period. If the acquiree's equity held prior to the acquisition
date involves other comprehensive incomes accounted using the equity method, the involved other comprehensive
incomes are transferred into investment incomes in the current period, to which the acquisition date belongs.
6. Preparation Method for Consolidated Financial Statements
The scope of the consolidated financial statements of the Company is determined on the basis of control, and all
subsidiaries (including individual entities controlled by the parent company) are included in the scope.
The accounting policies and accounting period adopted by all the subsidiaries included in the scope of the
consolidated financial statements shall be consistent with those of the Company. If inconsistency exists, the
Company makes necessary adjustments according to its own accounting policies and accounting period when
preparing the consolidated financial statements.
Consolidated financial statements are prepared by the Company based on the financial statements of the Company
and subsidiaries and other relevant documents.
During the preparation of consolidated financial statements, the influence of internal transactions between the
Company and its subsidiaries and among the subsidiaries on the consolidated balance sheet, consolidated profit
statement, consolidated cash flow statement, and consolidated statement of changes in equity is offset.
When the current losses undertaken by the minority shareholders of a subsidiary are more than the shares enjoyed
by the minority shareholders in the owners' equity of the subsidiary at the period beginning, the difference shall
still be used to offset the equity of the minority shareholders.
If subsidiaries and business increase because of a business combination under common control in the report period,
the period-beginning amount of the consolidated balance sheet is adjusted; the incomes, expenses, and profits of
the subsidiaries and business from the beginning of the current period of the business combination to the end of
the report period are included in the consolidated profit statement; the cash flow of the subsidiaries and business
from the beginning of the current period of the business combination to the end of the report period is included in
the consolidated cash flow statement.
If subsidiaries and business increase because of a business combination not under common control in the report
period, the period-beginning amount of the consolidated balance sheet is not adjusted; the incomes, expenses, and
profits of the subsidiaries and business from the acquisition date to the end of the report period are included in the
consolidated profit statement; the cash flow of the subsidiaries and business from the acquisition date to the end of
the report period is included in the consolidated cash flow statement.
If the Company disposes of a subsidiary and business in the report period, the incomes, expenses, and profits of
the subsidiary and business from the beginning of the current period to the disposal date are included in the
consolidated profit statement, and the cash flow of the subsidiary and business from the beginning of the current
period to the disposal date is included in the consolidated cash flow statement.
If the Company losses control over a subsidiary due to the disposal of a part of an equity investment or other
reasons, the remaining equity, in the consolidated financial statements, shall be re-measured at its fair value on the
date that the Company losses control over the subsidiary. (Consideration received from the equity disposal + Fair
value of the remaining equity – Shares of the subsidiary's net assets enjoyed by the Company that are calculated
based on the original shareholding proportion since the acquisition date) shall be recorded in the investment
incomes in the current period that the Company losses control over the subsidiary. Other comprehensive incomes
in connection with the subsidiary's equity investment shall be transferred into the investment incomes in the
current period when the Company losses control over the subsidiary.
7. Classification of Joint Arrangements and Accounting Treatment Method for Associates
(1) Classification of joint arrangements
The Company classifies joint arrangements into associates and joint ventures according to the structure, legal form,
agreed clauses, other relevant facts and conditions of joint arrangements.
Joint arrangements reached not through independent entities are classified as associates, and joint arrangements
reached through independent entities are classified as joint ventures. If definite evidence shows that a joint
arrangement meets any of the following conditions and complies with relevant laws and regulations, the joint
arrangement is classified as an associate:
① The legal form of the joint arrangement shows that the joint venture party owns rights to assets and undertakes
obligations to liabilities in the arrangement.
② Clauses in the contract of the joint arrangement stipulate that the joint venture party owns rights to assets and
undertakes obligations to liabilities in the arrangement.
③ Other relevant facts and conditions show that the joint venture party owns rights to assets and undertakes
obligations to liabilities in the arrangement (for example, the joint venture party owns almost all outputs relevant
to the joint arrangement), and the liquidation of liabilities involved in the joint arrangement continuously depends
on the support of the joint venture party.
(2) Accounting treatment method for associates
The Company recognizes the following items relevant to the Company in the benefit shares of associates and
conducts accounting treatment according to the ASBE:
① Assets held separately and assets that are jointly held by share
② Liabilities undertaken separately and liabilities that are jointly undertaken by share
③ Revenues arising from the sale of due shares of associate outputs that are held by the Company
④ Revenues arising from the sale of associate outputs that are enjoyed by the Company by share
⑤ Expenses incurred separately and expenses incurred on associates by share
If the Company invests or sells assets (except the assets that are a part of a business) to an associate, before the
assets are sold by the associate to a third party, the Company recognizes only the part of the profits and losses
arising from the transaction that are attributable to other participants of the associate. If the invested or sold assets
encounter the asset impairment losses that conform to the Accounting Standards for Business Enterprises No.8 –
Impairment of Assets, the Company recognizes the losses in full amount.
If the Company purchases assets (except the assets that are a part of business) from an associate, before the assets
are sold to a third party, the Company recognizes only the part of the profits and losses arising from the
transaction that are attributable to other participants of the associate. If the purchased assets encounter the asset
impairment losses that conform to the Accounting Standards for Business Enterprises No.8 – Impairment of Assets,
the Company recognizes the losses according to the shares undertaken by the Company.
The Company does not have joint control over an associate. If the Company owns rights to assets relevant to an
associate and undertakes liabilities of the associate, the Company conducts accounting treatment according to the
preceding principles. Otherwise, the Company shall conduct accounting treatment according to the ASBE.
8. Standard of Determination for Cash and Cash Equivalents
In the preparation of cash flow statements, the cash on hand and the bank deposits available for payment at any
time, owned by the Company, are recognized as cash. The investments that meet the four conditions of shorter
term (to be mature within 3 months from the acquisition date), strong liquidity, easiness in being converted into
known amounts of cash, very low risk of value fluctuation are recognized as cash equivalents.
9. Foreign Currency Business and Translation of the Financial Statements in Foreign Currency
(1) Foreign currency business
At the initial recognition, foreign currency business is recorded into accounts after relevant amounts are translated
into RMB at the spot exchange rate on the transaction date as the exchange rate for translation.
The amount of monetary items in foreign currency is translated at the spot exchange rate on the balance sheet date,
and the translation differences caused are all recorded in the profits and losses in the current period, except the
differences arising from the special foreign currency loans relevant to the assets whose purchase and construction
meet the conditions for capitalization, which are handled according to the principles for capitalization of
borrowing costs. The non-monetary items in foreign currency measured using the historical cost method is
translated at the spot exchange rate on the transaction date and the amount in the recording currency is not
changed.
The non-monetary items in foreign currency measured at fair value are translated at the spot exchange rate on the
confirmation date of the fair value while the translation difference incurred is recorded in the profits and losses in
the current period as the profits and losses arising from changes in the fair value. For available-for-sale
non-monetary items in foreign currency, the translation difference incurred is recorded in other comprehensive
incomes.
(2) Translation of the financial statements in foreign currency
The asset and liability items in the balance sheet are translated at the spot exchange rate on the balance sheet date.
The owners' equity items except the "undistributed profit" item are translated at the spot exchange rate at the
occurrence time. The revenue and expense items in the profit statement are translated at the spot exchange rate on
the transaction date. Translation difference of financial statements in foreign currency that is incurred according to
the preceding translation is recorded in other comprehensive incomes.
When an overseas operation is disposed of, the translation difference in the financial statements in foreign
currency related to the overseas operation, which is listed under other comprehensive income items in the balance
sheet, is transferred from the other comprehensive income items into the profits and losses in the current period in
which the disposal is carried out. When an overseas operation is partially disposed of, the translation difference in
the financial statements in foreign currency of the disposed part is calculated at the proportion of the disposal, and
is transferred into the profits and losses in the current period in which the disposal is carried out.
10. Financial Instruments
Financial instruments include financial assets, financial liabilities, and equity instruments.
(1) Classification of financial instruments
The management, according to contract clauses of issued financial instruments and economic substances reflected
by the financial instruments, rather than only in legal form, in combination with the purpose of acquiring to hold
financial assets and undertake financial liabilities, classifies financial assets and liabilities into the following types:
financial assets or liabilities measured at the fair rate and with changes recorded in the profits and losses in the
current period, held-to-maturity investment, accounts receivable, available-for-sale financial assets, and other
financial liabilities.
(2) Recognition basis and measurement method for financial instruments
① Financial assets (liabilities) measured at the fair value and with changes recorded in the profits and losses in
the current period
Financial assets or liabilities measured at the fair value and with changes recorded in the profits and losses in the
current period include transaction financial assets or liabilities, and financial assets or liabilities that are directly
specified to be measured at the fair value and with changes recorded in the profits and losses in the current period.
Transaction financial assets or liabilities refer to financial assets or liabilities that meet any of the following
conditions:
A. The purpose of acquiring the financial assets or liabilities is for sale, re-purchase, or redemption.
B. Financial assets or liabilities are a part of the identifiable financial instrument portfolio under centralized
management, and objective evidence shows that the Company recently manages the portfolio by using the
short-term profit method.
C. Derivative financial instruments except those designated as financial instruments of effective hedging
instruments, derivative instruments of financial guarantee contracts, and derivative instruments linked with the
equity instrument investment that is not quoted in an active market and whose fair value cannot be reliably
measured, and for which the equity instrument settlement needs to be delivered.
Financial assets or liabilities can be, during initial recognition, specified as the financial assets or liabilities
measured at fair value and with changes recorded in the profits and only when they meet any of the following
conditions:
A. Financial assets or liabilities specified can eliminate or obviously reduce inconsistency in the recognition or
measurement of relevant benefits or losses caused by different measurement basis for financial assets or liabilities.
B. Formal written files of risk management or investment policies record that the financial asset portfolio,
financial liability portfolio, or financial asset and liability portfolio is managed and evaluated at the fair value and
is reported to key managerial personnel.
C. Mixed instrument that contains one or more embedded derivative instruments, except that the embedded
derivative instruments do not greatly change the cash flow of the mixed instrument, or the embedded derivative
instruments shall not be split from relevant mixed instruments.
D. Mixed instrument of embedded derivative instruments that need to be split but cannot be separately measured
at the acquisition time or on the subsequent balance sheet date.
For financial assets or liabilities measured at the fair value and with changes recorded in the profits and losses in
the current period, the Company considers the fair value (with deduction of cash dividends declared but not
distributed or bond interest unpaid with the term of interest payment expired) as the initial recognition amount at
the time of acquisition, and records relevant transaction fees in the profits and losses in the current period. The
interests and cash dividends obtained during the time of holding are recognized as investment incomes, and
changes in the fair value are recorded in the profits and losses in the current period at the end of the period. At the
time of disposal, the difference between the fair value and the initial recording amount in the account is
recognized as investment incomes and the profits and losses arising from changes in the fair value are adjusted at
the same time.
② Accounts receivable
For the credit receivable arising from the commodities sold or labor services provided by the Company and other
enterprises' credit held by the Company other than the credit of priced debt instruments in an active market,
including accounts receivable and other receivables, the Company uses the price money in contracts or
agreements of the purchaser as the initial recognition amount. For financing-oriented credit receivable, the current
value is used as the initial recognition amount.
At the time of collection or disposal, the difference between the price of acquisition and the book value of the
accounts receivable is recorded in the profits and losses in the current period.
③ Held-to-maturity investment
Held-to-maturity investment refers to non-derivative financial assets whose maturity date is fixed, recovery
amount is fixed or can be determined, and for which, the Company has clear intention and ability to hold to
maturity.
For held-to-maturity investment, the Company considers the sum of the fair value (with the deduction of unpaid
with the term of interest payment expired) and relevant transaction expenses as the initial recognition amount at
the time of acquisition. During the period of holding, the interest revenue is calculated and recognized according
to the amortized cost and the actual interest rate, and is recorded in the investment incomes. 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 the investment is recorded in investment incomes.
If the amount of the disposed held-to-maturity investment or financial assets that are reclassified as other financial
assets is large relative to the amount of all held-to-maturity investments of the Company prior to sale or
reclassification, the remaining held-to-maturity investment shall be immediately reclassified as available-for-sale
financial assets after disposal or reclassification. The difference between the book value and the fair value of the
investment on the reclassification date is recorded in other comprehensive incomes, and is transferred out when
the available-for-sale financial assets encounter impairment or recognition termination, and is recorded in the
profits and losses in the current period. Nevertheless, the following cases are excluded:
A. The sale date or reclassification date is close to the expiration date or redemption date of the investment (for
example, within three months prior to expiration), and the market interest rate changes have no obvious influence
on the fair value of the investment.
B. Enterprises have retrieved almost all initial principal according to the agreed payment mode in contracts.
C. The sale or reclassification is caused by independent events that are out of control of enterprises, are
anticipated not to happen repeatedly, and are hard to estimate reasonably.
④ Available-for-sale financial assets
Available-for-sale financial assets refer to available-for-sale non-derivative financial assets specified at the initial
recognition and financial assets other than other types of financial assets.
For the available-for-sale financial assets, the Company uses the sum of the fair value (with the deduction of cash
dividends declared but not distributed or the bond interest unpaid with the interest payment period expired) and
relevant transaction expenses as the initial recognition amount at the time of acquisition. The interest or cash
dividends obtained during the time of holding are recognized as investment incomes. The benefits or losses arising
from changes in the fair value of available-for-sale financial assets, except the impairment losses and translation
difference incurred by monetary financial assets in foreign currency, are directly recorded in other comprehensive
incomes. At the disposal time of available-for-sale financial assets, the difference between the price of acquisition
and the book value of the financial assets is recorded in the investment profits and losses. At the same time, the
amount of the disposed part corresponding to the accumulative amount of changes in the fair value that are
originally recorded in other comprehensive incomes is transferred out and recorded in investment profits and
losses.
For an equity instrument investment that is not quoted in an active market and whose fair value cannot be reliably
measured, and derivative financial assets linked with the equity instrument and for which the equity instrument
settlement needs to be delivered, the Company conducts cost-based measurement.
⑤ Other financial liabilities
The sum of the fair value of such financial liabilities and relevant transaction expenses is used as the initial
recognition amount. The amortized cost is adopted in the subsequent measurement.
(3) Recognition basis and measurement method for financial asset transfer
In the case of the transfer of the financial assets of the Company, if almost all the risks and remuneration in the
ownership of the financial assets are transferred to the assignee, the recognition of such financial assets is
terminated, and if almost all the risks and remuneration in the ownership of the financial assets are retained, the
recognition of such financial assets is not terminated.
In the judgment of whether a financial asset transfer meets the above recognition termination conditions, the
principle of attaching more importance to substance than form is adopted. The Company classifies financial asset
transfer into complete transfer and partial transfer. Where the complete transfer of financial assets meets the
recognition termination conditions, the difference between the following two amounts is recorded in the profits
and losses in the current period:
① Book value of the transferred financial assets;
② Sum of the consideration received due to the transfer and the accumulative amount of changes in the fair value
that are originally recorded in the owners' equity (involving the situation in which the transferred financial assets
are available-for-sale financial assets).
If the partial transfer of financial assets meets the recognition termination conditions, the book value of all the
transferred financial assets between the part with its recognition terminated and the part with its recognition not
terminated, are apportioned separately at their relative fair values while the difference between the following two
amounts is recorded in the profits and losses in the current period:
① Book value of the part with its recognition terminated;
② Sum of the consideration of the part with its recognition terminated and the amount of the part with its
recognition terminated in the accumulative amount of changes in the fair value that are originally recorded in
owners' equity (involving the situation in which the transferred financial assets are the available-for-sale financial
assets).
Where the financial assets transfer does not meet the recognition termination conditions, the recognition of such
financial assets is continued. The received consideration is recognized as a financial liability.
(4) Conditions for recognizing the termination of financial liabilities
If all or a part of current obligations of a financial liability are discharged, the recognition of the financial liability
or a 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 of the new financial liability and the existing
one are different, the recognition of the existing financial liability is terminated and the new financial liability is
recognized in the meantime.
If material alteration has been made to all or a part of contract terms of the existing financial liability, the
recognition of the existing liability or a part of it is terminated and, in the meantime, the financial liability after the
clause alteration is made is recognized as a new financial liability.
If the recognition of all or a part of a financial liability is terminated, the difference between the book value of the
liability with its recognition terminated and the paid consideration (including non-cash assets transferred out or
the new liability assumed) is recorded in the profits and losses in the current period.
If the Company repurchases a part of a financial liability, the total book value of the liability is allocated on the
repurchase date according to the relative fair value of the part with its recognition continued and that with its
recognition terminated. The difference between the book value allocated to the part with its recognition terminated
and the paid consideration (including non-cash assets transferred out or the new liability assumed) is recorded in
the profits and losses in the current period.
(5) Methods for determining the fair value of financial assets and liabilities
For the financial assets and financial liabilities that are measured at the fair value and exist in an active market, the
Company determines their fair values based on the quotations in the active market. For those that do not exist in
an active market, the Company estimates their fair values by using valuation techniques (including referring to the
prices applied in recent transactions conducted by well-informed and willing parties or the current fair value of
other financial instruments of the same nature, or adopting the discounted cash flow technique and the option
pricing model). For those initially acquired or derivative financial assets or assumed financial liabilities, the
Company determines their fair values based on the market transaction prices.
(6) Accrual of impairment provision for financial assets (excluding accounts receivable and loans)
The Company shall check, on the balance sheet date, the book value of the financial assets except those measured
at the fair value and with changes recorded in the profits and losses in the current period. If there is any objective
evidence indicating that impairment has occurred on these financial assets, impairment provision shall be made.
Objective evidence indicating the impairment of financial assets includes but is not limited to the following:
① The issuer or debtor experiences serious financial difficulties;
② The debtor violates contract clauses, for example, fails to pay or delays in paying the due interest or principal;
③ The creditor makes a concession for the debtor who experiences financial difficulties in consideration of
economic or legal factors;
④ The debtor may go bankrupt or carry out other financial restructuring;
⑤ The transaction of the financial assets cannot be continued in the active market because the issuer encounters
major financial difficulties;
⑥ Whether the cash flow reduction occurs on an asset in a group of financial assets cannot be identified, but
when an overall evaluation is conducted on the asset based on public data, the evaluation result shows that the
estimated future cash flow of the group of the financial assets is reduced and can be measured since initial
recognition, for example, the debtor of the group of the financial assets has been gradually weakened in the
payment ability, the unemployment rate in the country or region where the debtor resides is raised, the price of the
collateral in the region where the debtor resides is reduced greatly, or the industry to which the debtor belongs is
in recession;
⑦ The technology, market, economic or legal environment in which the equity instrument issuer is in experiences
major adverse changes and as a result, the equity instrument investors cannot recover investment costs; and
⑧ The fair value of the equity instrument investment experiences severe or non-temporary decline.
The specific impairment methods of financial assets are as follows:
① Impairment provision for available-for-sale financial assets
The Company, on the balance sheet date, evaluates impairment losses for available-for-sale financial assets by
using the specific identification method. The objective evidence indicating that available-for-sale equity
instrument investments are impaired includes that the fair value of the equity instrument investments experiences
severe or non-temporary decline. The specific standard is as follows: If the fair value of an equity instrument
investment is 50% lower than its costs (including 50%) on the balance sheet date or is lower than its cost for more
than 12 months (including 12 months), impairment occurs on the equity instrument investment.
When an available-for-sale financial asset is impaired, even if the recognition of the asset is not terminated, the
Company transfers the accumulative losses arising from reduction of the fair value and originally recorded in
other comprehensive incomes out of the other comprehensive incomes and records in the profits and losses in the
current period. The transferred accumulative losses equal the initial acquisition cost of the available-for-sale
financial asset with the deduction of the recovered principal and amortized cost, current fair value, and
impairment losses originally recorded in the profits and incomes.
For available-for-sale liability instruments with impairment losses recognized, if the fair value increases in the
subsequent accounting period and the instruments are objectively related to events occurred after the original
impairment losses are recognized, the impairment losses originally recognized can be transferred back and
recorded in the profits and losses in the current period. Impairment losses occurring in available-for-sale equity
instrument investments are transferred back through equity when the value of the equity instrument rebounds. For
the impairment losses occurring on an equity instrument investment that is not quoted in an active market and
whose fair value cannot be reliably measured, and on the derivative financial assets linked with the equity
instrument investment and for which the equity instrument settlement needs to be delivered, such impairment
losses cannot be transferred back.
② Impairment provision for held-to-maturity investments
If there is any objective evidence indicating that impairment has occurred on a held-to-maturity investment, the
Company calculates and recognizes the impairment losses based on the difference between the book value of the
investment and the current value of the estimated future cash flow. If there is any evidence indicating that the
investment value has recovered after provision, the impairment losses originally recognized can be transferred
back and recorded in the profits and losses in the current period. However, the book value transferred back shall
not exceed the amortized cost of the financial assets at the date of transfer-back if impairment provision is not
made.
(7) Offset of financial assets and liabilities
Financial assets and liabilities are listed separately in the balance sheet and they are not offset. Nevertheless, the
net amount after mutual offset is listed in the balance sheet after both the following conditions are met:
① The Company has the legal rights of offsetting recognized amounts and the legal rights are enforceable
currently.
② The Company plans to make a settlement at the net amount, or realizes the financial assets and liquidates the
financial liabilities at the same time.
11. Accounts Receivable
(1) Accounts Receivable with a Significant Single Amount, for Which Bad Debt Provision Is Separately
Made
Criterion or Amount Limit for Determining a Significant Single
Top five accounts receivable
Amount
Carry out independent impairment testing. A provision is made
for the bad debts according to the difference that the current
value of the estimated future cash flow is lower than its book
Accrual Method for Accounts Receivable with Significant
value, and is recorded in the profits and losses in the current
Single Amount and Single Provision for Bad Debts
period. The accounts receivable which has no value impairment
according to the independent test shall be recorded in the bad
debt provision made for the corresponding portfolio.
(2) Accounts Receivable for Which Bad Debt Provision Is Made According to Portfolios of Credit Risk
Characteristics
Portfolio Name Accrual Method for Making Bad Debt Provision
Portfolio 1 Aging analysis method
Portfolio 2 Other methods
Bad debt provision made using the aging analysis method for accounts receivable in a portfolio
√ Applicable □ Not applicable
Provision Proportion of Accounts Provision Proportion of Other Accounts
Aging
Receivable (%) Receivable
1-2 years 5.00% 5.00%
2-3 years 10.00% 10.00%
Over 3 years 20.00% 20.00%
Bad debt provision made using the balance percentage method for accounts receivable in a portfolio
□ Applicable √ Not applicable
Bad debt provision made using other methods for accounts receivable in a portfolio
√ Applicable □ Not applicable
Provision Proportion of Accounts Provision Proportion of Other Accounts
Portfolio Name
Receivable Receivable
Portfolio 2
(3) Accounts Receivable with an Insignificant Single Amount, for Which Bad Debt Provision Is Separately
Made
Objective evidence shows that the Company cannot recover
Reason of Making Bad Debt Provision for a Single Amount
accounts according to original clauses of accounts receivable.
A bad debt provision is made according to the difference that the
Method for Making Bad Debt provision current value of the estimated future cash flow of accounts
receivable is lower than its book value.
12. Inventory
(1) Classification of inventory
Inventory refers to finished products or commercial products held by the Company in daily activities for sale,
products in process, and materials and supplies consumed in manufacturing or service delivery process. Inventory
includes raw materials, circulating materials, materials of consigned processing, goods in process, self-made
semi-finished products, finished products (in-stock goods), development costs, and developed products.
Development costs refer to properties that have not been completed and are used for sale. To-be-developed land
refers to purchased land that is determined to be developed to finished development products. Development
products refer to properties that are completed and are to be sold. In the case of overall development of a project,
to-be-developed land is transferred into development costs; in the case of phased development of a project, the
land for phased development is transferred into development costs, and undeveloped land is reserved as the
to-be-developed land.
(2) Pricing method for inventory
Inventory is initially measured at the time of acquisition according to costs, including the purchase cost,
processing cost, and other costs. The pricing of the inventory is made according to the weighted average method
at the end of month at the time of delivery.
(3) Basis for determination of the net realizable value of inventory and accrual method of inventory depreciation
provision
After complete counting and examination is conducted on the inventory at the end of the period, inventory
depreciation provision is made or adjusted according to the inventory cost or net realizable value, whichever is
lower. The net realizable value of the goods inventory directly for sale such as finished products, in-stock 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 the estimated sale expenses and relevant taxes. The net realizable value 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 the incurred costs prior to completion, estimated sale expenses,
and relevant taxes. The net realizable value of the inventory held for the performance of a sale or service contract
is calculated on the basis of the contract price. Where the quantity of the inventory is more than the quantity
ordered in a sale contract, the net realizable value of the excess of such inventory is calculated on the basis of the
general sale price.
At the end of the period, the inventory depreciation provision is made according to individual inventory items.
However, for the inventory of a large quantity and a low unit price, the inventory depreciation provision is made
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, the inventory depreciation provision is made in a combined manner.
Where the factors previously causing the recording of the reduction of the inventory value stop to exist, the
reduced amount is restored and transferred back from the originally accrued amount of inventory depreciation
provision. The transferred amount is recorded in the profits and losses in the current period.
(4) Inventory taking system
The perpetual inventory taking method is adopted.
(5) Amortization method for low value consumables and packaging materials
① For low value consumables, the one-off writing-off method is adopted.
② For packaging materials, the one-off writing-off method is adopted
(6) Accounting method for land used for development
The expenditure of pure land development projects constitutes the land development costs.
For overall development projects that cover real estates, if the objects for bearing expenses can be distinguished,
the expenses are apportioned and recorded in the commodity house costs by actual area.
(7) Accounting method for fees of public supporting facilities
For public supporting facilities that cannot be transferred with compensation, the standard distribution of fees is
determined according to the benefit proportion and the fees are recorded in the commodity house costs.
For public supporting facilities that can be transferred with compensation, incurred costs are grouped with each
supporting facility project as the cost accounting object.
(8) Accounting method for maintenance funds
According to relevant regulations in the region where a development project is located, maintenance funds are
collected from house buyers during sale (presale) of development products or are accrued and recorded by the
Company in the development costs of development products, and then handed in to the maintenance fund
administration.
(9) Accounting method for the quality bond
The quality bond is reserved from the project payment of construction units according to construction contracts.
The maintenance fees incurred in the warranty period of development products are used to offset the quality bond.
After the agreed warranty period of development products expires, the balance of the quality bond is returned to
construction units.
13. Long-term Equity Investment
(1) Determination of investment costs
① For long-term equity investment arising from a business combination, refer to 5. "Accounting Treatment
Methods for Business Combinations Under Common Control and Not Under Common Control" for specific
accounting policies.
② Long-term equity investment obtained in other ways
The purchase price money actually paid is used as the initial investment cost of the long-term equity investment
obtained by cash. The initial investment cost includes fees, taxes, and other necessary expenditure that are directly
relevant to the acquisition of the long-term equity investment.
The fair value of issued equity securities is used as the initial investment cost of the long-term equity investment
obtained by issuing equity securities. Transaction fees arising from the issuance or acquisition of the equity
instruments can be deducted from the equity if they are directly attributable to an equity transaction.
Under the premises that the non-monetary asset exchange is of commercial nature and that the fair value of the
assets received and surrendered in the exchange can be measured reliably, the initial investment cost of the
long-term equity investment received from the exchange of non-monetary assets is determined on the basis of the
fair value of the assets surrendered, unless there is definite evidence indicating that the fair value of the received
assets is more reliable. For the non-monetary asset exchange that do not meet the above premises, the book value
of the surrendered assets and relevant taxes payable are used as the initial investment cost of the long-term equity
investment.
The initial investment cost of the long-term equity investment obtained through debt restructuring is determined
on the basis of its fair value.
(2) Subsequent measurement and profit and loss recognition
① Cost method
For the long-term equity investment of invested organizations over which the Company has control, the cost
method is used for accounting, the pricing is performed according to the initial investment cost, and the cost of the
long-term equity investment is adjusted based on the added or recovered investment.
The Company recognizes cash dividends or profits enjoyed by the Company, for which the invested organizations
declare to distribute, as the investment incomes in the current period, except the amount actually paid at the
acquisition time of investment or cash dividends and profits declared but not distributed in the consideration.
② Equity method
The Company conducts accounting using the equity method for long-term equity investments of associates and
joint ventures. For equity investments of associated that are indirectly held by means of risk investment
institutions, mutual funds, trust companies, or similar entities that cover the investment linked insurance funds, the
measurement is conducted at the fair value and the changes are recorded in the profits and losses.
If the initial investment cost of a long-term equity investment is larger than the investment, the Company should
be entitled to the difference in the due shares of the fair value of the identifiable 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 be entitled to the difference in the due
shares of the fair value of the identifiable net assets of the invested organizations and such difference is recorded
in the profits and losses in the current period.
After obtaining a long-term equity investment, the Company recognizes investment incomes and other
comprehensive incomes according to the due net profits and losses of invested organizations and due shares of
other comprehensive incomes respectively, and adjusts the book value of the long-term equity investment. The
Company also reduces the book value of the long-term equity investment according to the due profits or cash
dividends calculated on the basis of the profits or cash dividends declared but not distributed by invested
organizations. For changes in the owners' equity of invested organizations except in net profits and losses, other
comprehensive incomes, and profit distribution, the book value of the long-term equity investment is adjusted and
such changes are recorded in the owners' equity.
When recognizing the due shares of net profits and incomes of invested organizations, the Company adjusts net
profits of the invested organizations for recognition on the basis of the fair value of identifiable assets of the
invested organizations at the acquisition time of the investment. For unrealized internal transaction profits and
losses among the Company, associates, and joint ventures, the part attributable to the Company is calculated at the
due proportion and is offset, and the investment profits and losses are recognized on such a basis.
Where the Company recognizes the due shares of the losses occurring on the invested organizations, the following
sequence is adopted: Firstly, the book value of the long-term equity investment is offset. Secondly, if the book
value of the long-term equity investment is not sufficient for the offsetting, the investment losses should continue
to be recognized within the limit of the book value of other long-term equity that practically constitutes net
investments on the invested organizations, and the book values of long-term accounts receivable and others are
offset. Finally, if an enterprise still bears additional obligations as agreed in the investment contract or agreement
after the above processing, estimated liabilities are recognized according to the estimated obligations to be borne
and are recorded in investment losses in the current period.
Where the invested organizations realize profits in the later periods, the Company conducts accounting treatment
in the reversed sequence against the above after deducting the shared losses not recognized, reduces the book
balance of the recognized estimated liabilities, restores the book value of other long-term equity that practically
constitutes net investments on the invested organizations and the book value of the long-term equity investment,
and then recognizes investment incomes.
(3) Conversion of the accounting method for long-term equity investments
① Conversion from measurement at fair value into accounting using the equity method
For equity investments of invested organizations held by the Company and that the Company has no control over,
common control over, or significant influence on, and on which accounting treatment is conducted according to
financial instrument recognition and measurement criteria, if the Company can apply significant influence on or
conduct joint control over but does not constitute control over the invested organizations because of added
investment or other reasons, the sum of the fair value of originally held equity investments that are recognized
according to the Accounting Standards for Enterprises No.22 – Recognition and Measurement of Financial
Instruments, and the added investment cost is used as the initial investment cost after the accounting is conducted
using the equity method.
For originally held equity investments that are classified as available-for-sale financial assets, the difference
between the fair value and the book value of equity investments, and accumulative changes in the fair value that
are originally recorded in other comprehensive incomes are transferred into the profits and losses in the current
period after the accounting is conducted using the equity method.
If the initial investment cost accounted using the equity method is smaller than the due shares of the fair value of
identifiable net assets of invested organizations on the date of added investment, that are calculated and
determined based on the new shareholding proportion after added investment, the difference between the two is
used for adjusting the book value of the long-term equity investment and is recorded in the non-operating revenue
in the current period.
② Conversion from measurement at fair value or accounting using the equity method into accounting using the
cost method
For equity investments of invested organizations held by the Company and that the Company has no control over,
common control over, or significant influence on, and on which accounting treatment is conducted according to
financial instrument recognition and measurement criteria, or the long-term equity investments of associates and
joint ventures originally held by the Company, for which the Company has control over invested organizations not
under common control because of added investment or other reasons, the sum of the book value of originally held
equity investments and cost of the added investments is used as the initial investment cost after the accounting is
conducted using the cost method during the preparation of individual financial statements.
For other comprehensive incomes recognized because of accounting using the equity method in an equity
investment held prior to the purchase date, the same basis for directly disposing of relevant assets or liabilities by
invested organizations is adopted for accounting treatment when the investment is disposed of.
For an equity investment held prior to the purchase date, and on which accounting treatment is conducted
according to the Accounting Standards for Enterprises No.22 – Recognition and Measurement of Financial
Instruments, accumulative changes in the fair value that are originally recorded in other comprehensive incomes
are transferred into the profits and losses in the current period after the accounting is conducted using the cost
method.
③Conversion from accounting using the equity method into measurement at fair value
If the Company loses common control over or significant influence on invested organizations due to the disposal
of a part of an equity investment or other reasons, the remaining equity after disposal is accounted according to
the Accounting Standards for Enterprises No.22 – Recognition and Measurement of Financial Instruments, and
the difference between the fair value and the book value of the remaining equity on the date that common control
or significant influence is lost, is recorded in the profits and incomes in the current period.
For other comprehensive incomes recognized because of accounting using the equity method in an original equity
investment, the same basis for directly disposing of relevant assets or liabilities by invested organizations is
adopted for accounting treatment when the accounting using the equity method is terminated.
④ Conversion from the cost method into the equity method
When the Company loses control over invested organizations due to the disposal of a part of an equity investment
or other reasons, if the remaining equity after disposal can implement common control over or impose a
significant influence on the invested organizations, the equity method is used for accounting during the
preparation of individual financial statements, and the remaining equity is adjusted as if it is accounted using the
equity method since the date of acquisition.
⑤ Conversion from the cost method into measurement at fair value
When the Company loses control over invested organizations due to the disposal of a part of an equity investment
or other reasons, if the remaining equity after disposal cannot implement common control over or impose a
significant influence on the invested organizations, accounting treatment is conducted according to the Accounting
Standards for Enterprises No.22 – Recognition and Measurement of Financial Instruments during the preparation
of individual financial statements, and the difference between the fair value and the book value of the remaining
equity on the date that control is lost, is recorded in the profits and losses in the current period.
(4) Disposal of long-term equity investments
In the disposal of a long-term equity investment, the difference between its book value and the value at which they
are actually acquired should be recorded in the profits and losses in the current period. For a long-term equity
investment accounted using the equity method, in the disposal of the investment, accounting treatment is
conducted on the part that is originally recorded in other comprehensive incomes at a corresponding proportion on
the same basis for disposing of relevant assets or liabilities by invested organizations.
If clauses, conditions, and economic impact of each transaction for disposal of an equity investment on a
subsidiary conform to the following one or multiple cases, multiple transactions are considered as a package deal
for accounting treatment:
① These transactions are concluded simultaneously or concluded when the impact on each other is considered.
② These transactions reach a complete business result as a whole.
③ The occurrence of one transaction depends on the occurrence of at least other one transaction.
④ One transaction alone is deemed uneconomical but deemed economical when it is considered with other
transactions together.
If the Company loses control over a subsidiary due to disposal of a part of an equity investment or other reasons,
and the transactions are not considered as a package deal, individual financial statements and consolidated
financial statements are differentiated for accounting treatment:
① In individual financial statements, the difference between the book value of the disposed equity and the price
for acquiring the equity is recorded in the profits and losses in the current period. If the remaining equity after
disposal can implement common control over or impose a significant influence on an invested organization, the
equity method is adopted for accounting, and the remaining equity is adjusted as if it is accounted using the equity
method since the time of acquisition. If the remaining equity after disposal cannot implement common control
over or impose a significant influence on an invested organization, accounting treatment is conducted according to
the Accounting Standards for Enterprises No.22 – Recognition and Measurement of Financial Instruments, and
the difference between the fair value and the book value of the remaining equity on the date that the control is lost
is recorded in the profits and losses in the current period.
② In consolidated financial statements, for transactions prior to the time that the control over a subsidiary is lost,
the difference between the price of disposal and the shares of the subsidiary's net assets calculated since the
acquisition date or combination date in the disposal of the long-term equity investments is used for adjusting the
capital public reserves (capital premium). If the capital public reserves are insufficient for offsetting, the retained
incomes are adjusted. When the control over a subsidiary is lost, the remaining equity is re-measured at the fair
value on the date that the control is lost. (Consideration received from the equity disposal + Fair value of the
remaining equity – Shares of the subsidiary's net assets enjoyed by the Company that are calculated based on the
original shareholding proportion since the acquisition date) shall be recorded in the investment incomes in the
period that the Company loses control over the subsidiary, and is used for offsetting goodwill. Other
comprehensive incomes in connection with the subsidiary's equity investment shall be transferred into the current
investment incomes when the Company loses control over the subsidiary.
If transactions from the equity investment on a subsidiary to the time that the Company loses over the subsidiary
belong to a package deal, each transaction is considered as a transaction for disposing equity investment of the
subsidiary and with the control lost for accounting treatment, and individual financial statements and consolidated
financial statements are differentiated for accounting treatment:
① In individual financial statements, the difference between each disposal price before the control is lost and the
book value of the long-term equity investment corresponding to the disposed equity is recognized as other
comprehensive incomes, and, at the time that the control is lost, is transferred into the profits and losses in the
period that the control is lost.
② In consolidated financial statements, the difference between each disposal price before the control is lost and
the shares of the subsidiary's net assets enjoyed by the Company corresponding to the investment disposal is
recognized as other comprehensive incomes, and, at the time that the control is lost, is transferred into the profits
and losses in the period that the control is lost.
(5) Judgment criteria for common control and significant influence
If the Company, controls an arrangement collectively with other participants as agreed, and an activity decision
that has a significant influence on the return of the arrangement can take effect only after being unanimously
agreed by the participants sharing the control power, it is deemed that the Company and other participants jointly
control the arrangement, and the arrangement is a joint arrangement.
When a joint arrangement is reached by an independent entity, if it is judged that the Company is entitled to net
assets of the independent entity according to relevant agreements, the independent entity is considered as a joint
venture and the equity method is used for accounting. If it is judged that the Company is not entitled to net assets
of the independent entity according to relevant agreements, the independent entity is considered as an associate,
and the Company recognizes items relevant to shares of benefits of the associate and conducts accounting
treatment according to the ASBE.
A significant influence refers that an investing party is entitled to participate in decision-making of finance and
operation policies of invested organizations, but cannot control the formulation of these policies independently or
jointly with other parties. The Company has a significant influence on an invested organization after one or more
of the following cases occurs and all facts and situations are comprehensively considered: ① Dispatch delegates
to the board of directors or similar organs of power in the invested organization; ② participate in the formulation
of finance and operation policies of the invested organization; ③ make important transactions with the invested
organization; ④ dispatch managerial personnel to the invested organization; and ⑤ provide key technical
documents to the invested organization.
14. Investment properties
Measurement mode of investment properties
Measurement of cost method
Depreciation and amortization
Investment property refers to the property held for earning rental or increasing the value of capital, including the
right to use of the rented land, the right to use of the land held for transfer after the value increases, and the rented
building.
The Company uses the cost of investment properties as entry value. The cost of purchased investment properties
includes the purchase price, relevant taxes, and other expenses directly relegated to the asset. The cost of a self-built
investment properties consist of the necessary expenses for building the asset to the expected condition for use.
The Company conducts measurement after recognition to the investment properties using the cost pattern, and
makes accrual depreciation or amortization for buildings and land use rights based on their expected service life and
salvage value rate. The following table lists the expected service life, net salvage value, and annual depreciation
(amortization) rate of investment properties:
Annual depreciation
Category Expected service life Expected salvage value
(amortization) rate
Houses and buildings 20-40 5% 4.75%-2.38%
When the purpose of investment properties changes to self-use, the Company shall convert the investment
properties to fixed or intangible assets since the day of change. When the real estate with the right to self-use is
changed for generating rents or capital appreciation, the Company shall convert fixed or intangible assets to
investment properties since the day of change. The book value of the real estate prior to the conversion shall be
entry value after conversion.
If investment properties are disposed of, or if they withdraw permanently from use and if no economic benefit will
be obtained from the disposal, the recognition of them as investment properties shall be terminated. When an
enterprise sells or transfers or discards any investment properties, or when any investment properties of an
enterprise is damaged or destroyed, the enterprise shall deduct the book value of the investment properties as well
as the relevant taxes from the disposal income, and include the amount in the current profit and loss.
15. Fixed assets
(1) Identification conditions
① Fixed assets refer to the tangible assets held for the purpose of manufacture of commodities, provision of labor
services, lease or operation and management with a term of use exceeding one fiscal year. Fixed assets can be
identified when meeting the following conditions at the same time: A. Economic interest relevant to the fixed
assets is likely to flow into the enterprise; B. The cost of the fixed assets can be reliably measured. ② Initial
measurement of fixed assets: Fixed assets of the Company are initially measured by cost. The costs of purchased
fixed assets include purchasing prices, taxes such as import tariff and other expenses that are generated to make
the fixed assets reach expected usable state and can be directly attributed to the fixed assets. The costs of building
fixed assets consist of necessary expenses that are generated to make the fixed asset reach the expected usable
state. For fixed assets invested by an investor, the value of the investment contract or agreement is used as the
entry value of the fixed assets. If the value of the contract or agreement is not fair, the fixed assets are recorded by
fair value. 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 difference between the price
actually paid and the current value of the purchasing price shall be capitalized and shall be included in current
profits and losses in the credit period. ③ Subsequent measurement and disposal of fixed assets: Depreciation of
fixed assets: Depreciation of fixed assets is accrued in the service life by the entry value minus expected salvage
value. For the fixed assets where provision for diminution in value is accrued, the amount of depreciation is
determined in the future period according to the book value after deduction of provision for diminution in value
and remaining service life. The Company determines the service life and expected salvage value of fixed assets
based on the nature and use of the fixed assets. The Company rechecks the service life, expected salvage value,
and depreciation method of fixed assets at the end of every year. In case of any discrepancy between the recheck
result and estimated result, the Company makes an adjustment correspondingly.
(2) Depreciation method
Category Depreciation method Depreciation life Residual value rate Annual depreciation rate
Houses and buildings Straight-line method 20-40 5 4.75-2.38
Machinery equipment Straight-line method 5-10 5 19.00-9.50
Electronic equipment Straight-line method 5-10 5 19.00-9.50
Transportation
Straight-line method 5-10 5 19.00-9.50
equipment
Other equipment Straight-line method 10 5 9.50
①Subsequent expenditure of fixed assets
Subsequent expenditure relevant to fixed assets is included in the costs of fixed assets if the expenditure meets
fixed asset identification conditions and is included in the current profits and losses if it does not meet fixed asset
identification conditions.
②Fixed asset disposal
When fixed assets are disposed or are expected unable to generate economic benefits through use or disposal, the
fixed assets shall not be identified. When an enterprise sells or transfers or discards any investment properties, or
when any investment properties of an enterprise is damaged or destroyed, the enterprise shall deduct the book
value of the investment properties as well as the relevant taxes from the disposal income, and include the amount
in the current profit and loss.
(3) Recognition basis and pricing method of the fixed assets acquired under finance leases
The fixed assets rented by the Company can be identified as the fixed assets under financing lease when meeting
one or several criteria: (1) When the lease term is due, the proprietary of the leased property is transferred to the
Company. (2) The Company has the option to buy the leased asset at a price which is expected to be far lower
than the fair value of the leased asset at the date when the option becomes exercisable. Thus, on the lease
beginning date, it can be reasonably determined that the option will be exercised. (3) Even if the ownership of the
asset is not transferred, the lease term covers the major part of the service life of the leased asset. (4) The current
value of the minimum lease payment that is paid by the Company on the lease beginning date amounts to
substantially all of the fair value of the leased asset on the lease beginning date. (5) The leased assets are of a
special nature that only the Company can use them without making major modifications. The leasee shall record
the smaller one of the fair value of the leased asset and the current value of the minimum lease payments on the
lease beginning date as the entry value in an account, recognize the amount of the minimum lease payments as the
entry in an account of long-term account payable, and treat the balance between the recorded amount of the leased
asset and the long-term account payable as unrecognized financing charges. The initial direct costs such as
commissions, attorney's fees, traveling expenses and stamp duties directly attributable to the leased item incurred
during the process of lease negotiating and lease contract signing shall be included in the asset value of the current
period. The unrecognized financing charge shall be amortized to each period during the lease term. In calculating
the depreciation of a leased asset, the Company adopts a depreciation policy for leased assets consistent with that
for depreciable assets which are owned by the lessee. If it is reasonably certain that the leasee will obtain the
ownership of the leased asset when the lease expires, the leased asset shall be fully depreciated over its service life.
If it is not reasonably certain that the lessee will obtain the ownership of the leased asset at the expiry of the lease
term, the leased asset shall be fully depreciated over the shorter one of the lease term or its service life.
16. Construction in progress
(1) Type of construction in progress
The construction in progress carried out by the Company shall be valued according to its actual cost which is
composed of all necessary expenses incurred for bringing the asset to the expected conditions for use, including
material costs, labor costs, relevant taxes, borrowing costs eligible for capitalization, and indirect expenses
eligible for amortization. Cost accounting for the construction in progress of the Company shall be performed
based on projects.
(2) Standards and time points for the construction in progress being carried forward to fixed assets
For a construction in progress, all expenses during the construction till the desired usable status of the asset is
reached are taken as the recorded value of the fixed asset. If a construction in progress has reached the desired
usable status but has not conducted final accounting, it is transferred into fixed assets when it reaches the desired
usable status, according to the estimated value based on project budget, construction cost or actual cost; in the
meantime, depreciation is accrued according to the Company’s depreciation policies for fixed assets; when the
final accounting is conducted the temporarily estimated value is adjusted according to the actual cost while the
accrued depreciation amount is not adjusted.
17. Borrowing costs
(1) Confirmation principle of borrowing costs capitalization
Where the borrowing costs incurred by the Company can be directly attributable to the purchase, building or
production of the assets that meet the conditions of capitalization, such assets are capitalized and recorded into
relevant assets cost. Other borrowing costs are recognized as expenses according to the incurred amount at the
time of incurrence and recorded into current profit and loss.
The assets that meet the conditions of capitalization refer to the assets such as fixed assets, investment property
and inventory that can reach the anticipated usable or salable status only after a considerable time of purchase,
building or production activities.
The borrowing costs may be capitalized when all of the following conditions are met:
①The 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.
②The borrowing costs have already been incurred.
③The 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 cannot be used or sold
till the whole assets have been completed, the capitalization of the borrowing costs is stopped when the whole
assets are completed.
(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
recognized as current profit and loss and the capitalization is continued until the purchasing and production
activities of the assets are restarted.
(4) Calculation method of the amount of borrowing costs capitalization
The interest expenses of special loans (with the interest income of the unused borrowed funds deposited in the
bank or the investment income obtained from temporary investment deducted) and relevant auxiliary expenses are
capitalized before the assets that meet the conditions of capitalization, purchased, built or produced with such
loans, reach the anticipated usable or salable status.
The amount of the interests of common loans that are capitalized is calculated and determined by the weighted
average of the accumulative parts of the assets expenditure exceeding special loans multiplied by the
capitalization rate of common loans. The capitalization rate is determined according to the weighted average
interest rate of common loans.
Where the loans involve discount or premium, the amount of discount or premium to be amortized in each
accounting period is determined in accordance with the actual interest rate method and the amount of interests of
each period should also be adjusted.
18. Intangible assets
(1) Method of costing, service life and devaluation test
An intangible asset refers to an identifiable non-monetary asset without physical substance which is possessed or
controlled by the Company, including purchased software and land use rights.
① Initial measurement of intangible assets
The cost of the intangible assets purchased from outside includes purchase price money, relevant taxes and other
expenses incurred due to putting such assets to the anticipated use that can be directly attributed to such assets.
Where the price money of the purchased intangible assets is paid on a deferred basis within a term exceeding
regular credit conditions and actually of a financing nature, the cost of the intangible assets is determined on the
basis of the current value of the price money in purchase.
The entry value in the account of the fixed assets obtained from debtors for the repayment of liabilities in debt
restructuring is determined on the basis of the fair value of the fixed assets. The difference between the book value
of debt restructuring and the fair value of the fixed assets used for the repayment of liabilities is included in
current profit and loss.
Under the premises that the non-monetary assets exchange is of commercial nature and that the fair value of the
assets received and given out in the exchange can be measured reliably, the initial investment cost of the
long-term equity investment received in non-monetary assets exchange is determined on the basis of the fair value
of the assets given out, unless there are definite evidences that the fair value of the received assets is more reliable.
For the non-monetary assets exchange that do not meet the above premises, the book value of the received assets
and relevant taxes payable is taken as the cost of the long-term equity investment.
The recorded value in the account of the intangible assets obtained by the merger of the enterprises under the
control of a same entity is determined according to the book value of the merged party. The recorded value in the
account of the intangible assets obtained by the merger of the enterprises under the control of different entities is
determined according to the fair value.
The cost of the intangible assets formed through internal R&D activities includes: the cost of materials and labor
consumed in the development of such intangible assets, registration fee, the amortization of other patent rights and
franchises used in the development process and the interests expenses that meet the conditions of capitalization,
and other direct expenses incurred due to putting such intangible assets into the anticipated use.
② Subsequent measurement of intangible assets
When the Company acquires intangible assets, the Company analyzes and determines the service life and
classifies intangible assets into intangible assets with limited service life and intangible assets with uncertain
service life.
③ Intangible assets with limited service life
The intangible assets with limited service life are amortized based on straight-line method in the period when the
assets bring economic benefits to the enterprise. The estimated service life and basis of intangible assets with
limited service life are as follows:
Item Estimated service life Basis
Outsourced software 5 Benefit period
Land use right 50 Benefit period
At the end of each year, the service life and amortization method of intangible assets with limited service life are
rechecked and an adjustment is made if the service life differs from the original estimated service life.
At the end of the current period, the service life and amortization method of the intangible assets are the same as the
last year.
(2) Accounting policy for internal R&D expenditure
① Classification standards for research and development phases of R&D projects inside the Company
Research phase: a phase in which creative and planned investigation and research activities are carried out for the
purpose of obtaining and understanding new scientific or technological knowledge.
Development phase: a phase in which research results or other knowledge, before being produced or used for
commercial purposes, are applied in a certain plan or design for the purpose of producing materials, equipment and
products that are new or feature substantial improvement.
The expenses for inside R&D projects in the research phase are recorded into current profit and loss when the
expenses occur.
②Standards for meeting the conditions of capitalization in development phase
The expenditure in the development phase of the research and development project can be recognized as intangible
assets only when all the following conditions are met:
A. The technical feasibility of completing the intangible asset so that it will be available for use or sale.
B. There is an intention to complete such intangible assets and use or sell it.
C. 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.
D. The availability of adequate technical, financial and other resources to complete the development and to use or
sell the intangible asset.
E. The expenditure attributed to the development stage of such intangible assets can be reliably measured.
The expenditure in the development phase not meeting the preceding conditions is included in the current profits
and losses when it is incurred. The development expenditure that is included in profits and losses in the previous
year will not be identified as assets again in later years. The capitalized expenditure in the development phase is
listed as development expenditure in the balance sheet and is converted into intangible assets from the date when
it meets the expected purpose.
19. Long-term impairment of assets
The Company determines whether any sign of possible impairment exists for long-term assets on the balance
sheet date. If the sign of impairment exists for long-term assets, the recoverable amount of each asset is estimated.
If the recoverable amount of each assets cannot be estimated, the recoverable amount of the asset group where the
asset belong is determined based on the asset group.
The recoverable amount may be determined according to the higher one of the net value of the fair value of the
assets minus the disposal expenses and the current value of the anticipated future cash flow of the assets.
If the measurement result of recoverable amount indicates that the recoverable amount of a long-term asset is
lower than its book value, the book value of the long-term asset is written down to the recoverable amount. The
write-down amount is identified as asset impairment loss and is included in the current profits and losses and
provision for asset impairment provision is made. Once the impairment loss of assets is confirmed, the loss will
not be reversed in later accounting periods.
At the same time, the corresponding assets impairment provision is accrued. After the recognition of assets
impairment loss, corresponding adjustments are made in the future periods on the depreciation or amortized
expenses of the impaired assets so that the adjusted book value of such assets (with the anticipated expected salvage
value deducted) can be amortized systematically within the remaining service life.
The goodwill and intangible assets with uncertain service life, which are formed due to enterprise merger, are
tested every year on whether the sign of impairment exists.
Impairment test is performed for goodwill and its relevant asset groups or asset group combinations. When
impairment test is performed for relevant asset groups or asset group combinations that include goodwill, for
example, if the sign of impairment exists for asset groups or asset group combinations relevant to goodwill, the
impairment test is first performed for the asset groups or asset group combinations that do not include goodwill
and the recoverable amount is calculated and is compared with the relevant book value to confirm the
corresponding impairment loss. Then the impairment test is first performed for the asset groups or asset group
combinations that include goodwill and the book value (including the book value of amortized goodwill) of the
relevant asset groups or asset group combinations is compared with the recoverable amount. If the recoverable
amount of relevant asset groups or asset group combinations is lower than the book value, the impairment loss of
goodwill is confirmed.
20. Long-term unamortized expenses
Method of amortization
Long-term unamortized expenses refer to the expenses that have incurred at the Company but should be born in
current period and later periods, where the amortization period is above one year. Long-term unamortized
expenses shall be amortized based on direct method in the period of benefit.
21. Payroll
(1) Accounting treatment method of payroll
Payroll refers to various remunerations and compensations provided by the Company for obtaining services
provided by employees or for terminating the employment relationship. Payroll includes short-term remuneration,
welfare after leave, dismissal welfare and other long-term employee’s welfare.
Short-term remuneration refers to the payroll that needs to be paid completely within 12 months in the annual
report period when employees provide relevant services, excluding welfare after leave and dismissal welfare. In
the accounting period when employees provide services, the Company identities short-term remuneration as
liabilities and includes it in relevant asset costs and fees according to the benefit objects of services provided by
employees.
(2) Accounting treatment method of welfare after leave
The welfare after leave refers to the remuneration and welfare provided by the Company for obtaining services
provided by employees or for terminating the employment relationship after employees have retired, excluding
short-term remuneration and dismissal welfare. The welfare plan after dismissal is classified into the defined
contribution plan and the defined benefit plan.
The welfare defined contribution plan aims to join the social basic endowment insurance and unemployment
insurance organized and implemented by labor and social security agencies in various regions. In addition to
social basic endowment insurance and unemployment insurance, employees can join the pension plan set by the
Company at their own discretion. In the accounting period when employees provide the Company with services,
the amount that shall be paid and deposited shall be identified as liabilities according to the defined contribution
plan and is included in the current profits and losses or relevant asset costs.
After making the preceding payment according to the national standard and pension plan, the Company shall no
longer have any other payment obligation.
(3) Accounting treatment method of dismissal welfare
Dismissal welfare refers to the compensation that is given to employees for terminating the employment
relationship with employees before the employment contracts expire or for encouraging employees to accept
downsizing and is included in the current profits and losses when the compensation is incurred.
(4) Accounting treatment methods of other long-term employees’ welfare
Other long-term employees’ welfare refers to all other employees’ welfare except short-term remuneration,
welfare after leave and dismissal welfare.
For other long-term employees’ welfare that meets conditions of the defined contribution plan, the amount that
shall be paid and deposited shall be identified as liabilities in the accounting period and is included in the current
profits and losses or relevant asset costs; except other long-term employees’ welfare in the preceding
circumstance, an independent actuary sets the welfare generated by the defined benefit plan to the period in which
employees provide services by using the method of expected accumulated welfare unit and includes it in the
current profits and losses or relevant asset costs.
22. Estimated liabilities
(1) Confirmation standards for estimated liabilities
The obligations related to contingencies, which meet all the following conditions, are recognized by the Company
as estimated liabilities.
①The obligation is a current obligation undertaken by the Company;
②The fulfillment of the obligation is very likely to cause an outflow of economic interests from the Company;
③The amount of the obligation can be measured reliably.
(2) Measurement method of estimated liabilities
Initial measurement is carried out to estimated liabilities of the Company according to the optimum estimation
amount of the required expense when relevant obligations are fulfilled.
When determining the optimum estimation amount, the Company considers in a comprehensive way the factors
related to contingencies like risks, uncertainties and time value of currency. Where there are great influences of
time value of currency, the optimum estimation amount is determined after discounting relevant future cash flows.
The optimum estimation amount is determined according to different situations as follows:
Where there is a continuous range (or interval) of the required expense and different results in the range have
same possibility to occur, the optimum estimation amount is determined according to the intermediate value of the
range, i.e. the average of the maximal and the minimum amounts.
Where there is no continuous range (or interval) or there is a continuous range but different results have different
possibilities to occur, if contingencies involve individual proceedings, the optimum estimation amount is the
amount most likely to occur, and if contingencies involve several proceedings, the optimum estimation amount is
determined according to various possible results and the calculation of relevant probabilities.
If all expenses or part of them, which are used by the Company for paying off estimated liabilities, are anticipated
to be compensated by a third party and compensation amount is basically sure to be received, the compensation
amount is recognized separately as an asset, which should not exceed the book value of the estimated liabilities.
23. Share-based payment
(1) Types of share-based payment
The Company provides equity-settled and cash-settled share-based payment.
(2) Recognition of the fair value of equity instruments
For equity instruments such as the granted option, which exist in the active market, the fair value is recognized
according to their prices in the active market. For those not existing in the active market, their fair value is
recognized by using the option pricing model, which should be selected in consideration of the following factors:
① option exercise price; ② option period; ③ the current price of the underlying shares; ④ the predicted
fluctuation rate of the share price, ⑤ the estimated dividend of the share; ⑥ risk free rate in the option period.
When determining the grant-date fair value of equity instruments, the Company shall take into account the
influence from market conditions in vesting conditions and non-vesting conditions stipulated in the share-based
payment agreement. Where a share-based payment has a non-vesting condition, the Company shall recognize
receipt of the corresponding service cost if employees or other parties satisfy all the non-market conditions (for
example, service duration) in vesting conditions.
(3) Basis for the determination of the best estimation of the exercisable equity instruments
On each balance sheet date in the vesting period, the Company shall make the best available estimate of the
number of equity instruments expected to vest, and shall revise that estimate if subsequent information indicates
that the number of equity instruments expected to vest differs from previous estimates. On vesting date, the
Company shall revise the estimate to equal the number of equity instruments that ultimately vested.
(4) Accounting for implementation, modification and termination of share-based payment plans
The Company shall measure the equity-settled share-based payment at the fair value of the granted employee
equity instruments. If the equity instruments granted vest immediately, the Company shall include the grant-date
fair value of equity instruments into related cost or expense, with a corresponding increase in capital reserve. If
the equity instruments granted do not vest until the counterparty completes a specified period of service or
achieves a performance condition in the vesting period, the Company shall include the service obtained in the
current period into related cost or expense and capital reserved by reference to the grant-date fair value of equity
instruments based on the best estimate of the number of vested equity instruments on each balance sheet date
during the vesting period. The Company shall not adjust the recognized cost or expense and total equity amount
after the vesting date.
The case-settled share-based payment shall be measured by reference to the fair value of the Company's eligible
liabilities which is calculated based on shares or other equity instruments. If the equity instruments granted vest
immediately, the Company shall include the fair value of eligible liabilities in related cost or expense on the
vesting date, with a corresponding increase in liabilities. For the cash-settled share-based payment where the
granted options are not exercised until the counterparty completes a specified period of service or achieves a
performance condition in the vesting period, the Company shall include the service obtained in the current period
into related cost or expense and liabilities by reference to the grant-date fair value of liabilities, based on the best
estimate of the number of vested equity instruments on each balance sheet date during the vesting period. The
Company shall re-measure the fair value of its liabilities on each balance sheet date and settlement date before
settlement of related liabilities, and include liability changes in current profit and loss.
(5) Modifications to the terms and conditions on which equity instruments were granted
If a grant of an equity instrument is canceled during the vesting period, the Company shall account for the
cancellation as an acceleration of vesting, and shall therefore include immediately the amount that would
otherwise have been recognized for services received over the remainder of the vesting period in the current profit
and loss, and recognize capital reserve. If employees or other parties can but fail to satisfy non-vesting conditions
in the vesting period, the Company shall account for the failure as a cancellation of the grant of the equity
instrument.
24. Other financial instruments such as preferred stock and sustainable debt
Based on the rules of financial instruments, the Company classifies financial instruments or their components into
financial liabilities or equity instruments during initial recognition according to the contact terms of financial
instruments such as preferred stock and sustainable debt and economic essence they reflect rather than legal form,
in combination with definitions of financial liabilities and equity instruments.
When one of the following conditions is met, the issued financial instrument is classified into financial liabilities:
(1) Contractual obligation to deliver cash or other financial assets to other parties;
(2) Contractual obligation to exchange financial assets or financial liabilities under potential adverse conditions;
(3) Non-derivative instrument contract that must or may use equity instruments of an enterprise for settlement in
the future (the enterprise delivers a variable number of equity instruments according to the contract);
(4) Derivative instrument contract that must or may use equity instruments of an enterprise for settlement in the
future (except derivative instrument contracts that use a fixed number of equity instruments to exchange a fixed
amount of cash or other financial assets).
When the following conditions are met at the same time, the issued financial instruments are classified into equity
instruments:
(1) The financial instruments do not include the contractual obligation to deliver cash or other financial assets to
other parties or exchange financial assets or financial liabilities under potential adverse conditions;
(2) For the financial instruments that must or may use equity instruments of an enterprise for settlement in the
future, if the financial instruments are non-derivative instruments, the contractual obligation to deliver a variable
number of equity instruments for settlement is not included; if the financial instruments are derivative instruments,
the enterprise can only settle the financial instruments by exchanging a fixed number of equity instruments with
the fixed amount of cash or other financial assets.
Accounting treatment method
For financial instruments that belong to equity instruments, the interest expenditure or dividend distribution shall
be used as profits of the enterprise for distribution, the buy-back and write-off are treated as changes of equity,
and transaction expenses such as handling charge and commission shall be deducted from the equity.
For financial instruments that belong to financial liabilities, the interest expenditure or dividend distribution shall
be treated as borrowing costs in principle, the gain or loss generated due to buy-back or redemption are included
in the current profits and losses, and transaction expenses such as handling charge and commission are included in
the initial amount of measurement of the issues instruments.
25. Revenue
(1) Standards for confirmation time of sales income
The realization of the income from the sale of commodities is recognized when the Company has already
transferred the main risks and consideration in the ownership right of the commodities to the purchaser, the
Company has not retained any further management right connected to the ownership right nor implement effective
control over the sold commodities, the amount of the revenue can be reliably measured, relevant economic
interests are likely to flow into the enterprise, and relevant costs incurred or to be incurred can be measured
reliably.
The Company mainly runs the leasing business in the electronics market. It identifies received rental as rental
income in the term of lease by using the method of line and the income of other business is identified when the
risk premium is transferred according to contract provisions.
The price of a contract or agreement is collected through deferral. In the case of actual financial nature, the
amount of income from sales commodities shall be determined according to the fair value of the price of the
contract or agreement.
(2) Basis for confirmation of income from transfer of asset use right
When economic interests relevant to transaction probably flow into the enterprise and the amount of income can
be reliably measured, the amount of income from transfer of asset use right is determined in the following
circumstances:
①The amount of interest income is determined according to the time and actual interest rate of other people using
the monetary fund of the enterprise.
②The amount of the income from use fee is determined in accordance with the time and method of charges as
agreed in relevant contract or agreement.
(3) Basis and method for confirmation of income from rendering of services
Where the results of the labor services provided on the balance sheet date can be estimated reliably, the income
from the provision of labor services is recognized with the percentage of completion method. The completion
progress of a labor service transaction is determined by surveying the work completed.
When the following conditions are met at the same time, the result of rendering of services can be reliably
estimated:
① The amount of income can be measured reliably.
② Relevant economic interests probably flow into the enterprise.
③ The completion progress of transactions can be reliably determined.
④ The costs that have been incurred or will be incurred in transactions can be reliably measured.
The total amount of the income from the provision of labor services is determined according to the price money
received or receivable of a relevant contract or agreement, unless the price money received or receivable of a
relevant contract or agreement is unfair. The labor services income of the current period is recognized on the
balance sheet date according to the resulted amount of the total amount of income from provision of labor services
times the completion percentage and deducted by the accumulative amount of the recognized income from
provision of labor services in previous accounting periods. At the same time, the labor cost of the current period is
carried forward according to the estimated total cost of the provision of labor services times the completion
percentage and deducted by the accumulative amount of the recognized labor cost in previous accounting periods.
Where the results of the provision of labor services on the balance sheet date cannot be estimated reliably, such
results are processed respectively according to the following conditions:
① Where it is estimated that the labor services cost incurred can be compensated, the income from provision of
labor services is 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.
When the contracts or agreements signed between the Company and other companies include commodity sales
and labor service and these two parts can be differentiated from each other and can be separately measured,
commodity sales and labor service are handled separately. If they cannot be differentiated from each other or they
can be differentiated from each other but cannot be separately measured, both parts will be handled as commodity
sales.
(4) Basis and method for confirmation of income from construction contracts
① When the results of construction contracts can be reliably estimated, relevant income from contracts and costs
of contracts are confirmed based on the method of completion percentage. The method of completion percentage
refers to the method for confirming income from contracts and costs of contracts according to the completion
progress of contracts. The completion progress of a contract is determined according to the ratio of actual
accumulated cost of the contract to estimated total costs of the contract.
When the following conditions are met at the same time, the result of a fixed construction contract can be reliably
estimated:
A. The total income from the contract can be reliably measured;
B. Economic interests relevant to the contract probably flow into the enterprise.
C. The actual costs of the contract can be clearly distinguished and reliably measured;
D. The completion progress of the contract and the costs needed for completing the contract can be reliably
determined.
When the following conditions are met at the same time, the result of a cost-plus contract can be reliably
estimated:
A. Economic interests relevant to the contract probably flow into the enterprise.
B. The actual costs of the contract can be clearly distinguished and reliably measured.
On the balance sheet date, the amount of total contractual income multiplied by the completion progress,
deducting the accumulated confirmed income in the previous accounting period, is identified as the current
contractual income; the amount of estimated total contract cost multiplied by the completion progress, deducting
the accumulated confirmed cost in the previous accounting period, is identified as the current costs of contract.
The change of contract engineering, claim and bonus is included in the total income of contract based on the
amount that may be brought and can be reliably calculated.
② If the result of a construction contract cannot be reliably estimated, the contract is processed as follows:
A. If the contract cost can be recovered, the income from the contract is identified according to the actual
recovered contract cost and the contract cost is identified as the current costs of contract.
B. If the contract cost cannot be recovered, the cost is immediately identified as the costs of contract in the current
period when the cost is incurred and the income from the contract is not identified.
③ If the total cost of contract probably exceeds the total income from the contract, the expected loss is
immediately identified as costs.
(5) Transfer of the assets with repurchase conditions
If the Company signs a repurchase agreement when selling products or transferring other assets, whether the
products sold meet the conditions for income recognition is judged according to the articles of the agreement. If
the repurchase is a financing transaction, the Company does not recognize sales income when delivering products
or assets. If the repurchase price is higher than the selling price, interests are accrued for the difference during
repurchase period and recorded into financial expenses.
26. Government subsidies
(1) Basis for determining government subsidies relevant to assets and accounting treatment methods
The government subsidies relevant to assets are identified as deferred income and are included in non-operating
income according to the service life of the built or purchased assets;
(2) Basis for determining government subsidies relevant to income and accounting treatment methods
The government subsidies that are related to income and are used to compensate for relevant expenses or losses in
later periods are identified as deferred income when they are obtained; the subsidies used to compensate for
relevant expenses or losses that have been incurred are identified as the current non-operating income when they
are obtained.
When identified government subsidies need to be returned and the balance of relevant deferred income exists, the
book balance of relevant deferred income is offset and the excess part is included in the current profits and losses;
when relevant deferred income does not exist, the government subsidies are directly included in the current profits
and losses.
27. Deferred income tax assets and liabilities
Deferred income tax assets and liabilities are calculated and identified according to the difference (temporary
difference) between the taxable basis of the assets and liabilities and their book value. On the balance sheet date,
deferred income tax assets and liabilities are measured based on the tax rate applicable to the period when the
assets are expected to be recovered or the liabilities are expected to be paid off.
(1) Basis for the confirmation of deferred incomes tax assets
The Company confirms the deferred income tax assets generated due to deductible temporary difference based on
the amount of taxable income that is probably obtained to deduct deductible temporary difference and can carry
over deductible loss and tax deduction. However, the deferred income tax assets generated due to initial
confirmation of assets or liabilities in a transaction that has the following features at the same time: (1) the
transaction is not business merger; (2) the transaction does not affect the accounting profit, taxable income or
deductible loss.
For the deductible temporary difference relevant to investment of joint ventures, when the following conditions
are met at the same time, corresponding deferred income tax assets are confirmed; the temporary difference is
probably reversed in the foreseeable future and taxable income used to deduct the deductible temporary difference
will probably be obtained in the future.
(2) Basis for confirmation of deferred incomes tax liabilities
The temporary difference between the tax payable not paid in the current period and that in previous periods is
recognized by the Company as deferred income tax liabilities, excluding:
① Temporary difference formed due to initial confirmation of goodwill;
② Transaction or matter formed due to factors rather than business merger (the transaction or matter does not
affect the accounting profit or the temporary difference formed due to taxable income or deductible loss);
③ For the taxable temporary difference relevant to investment of subsidiaries and joint ventures, the reversal
time of the temporary difference can be controlled and may not be reversed in the foreseeable future.
An entity shall offset deferred tax assets and deferred tax liabilities if, and only if:
① The entity has a legally enforceable right to settle current tax assets against current tax liabilities;
② The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend either to settle current tax
liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
28. Lease
(1) Accounting treatment method of operating lease
① The fee paid by the Company for rented assets is apportioned based on the straight-line method in the whole
lease term without deduction of the rent-free period and is 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.
② The lease fee received by the Company from leasing of assets is apportioned by the straight-line method in the
whole lease term without deduction of the rent-free period and is identified as 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 recognition of the lease income.
In case that the Company undertakes the lease-related expenses which should be undertaken by the lessee, the
Company deducts the expenses from the total lease income and the lease expenses after deduction are allocated in
the lease term.
(2) Accounting treatment method of financing lease
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 recognized are apportioned by the Company by the actual interest rate method in
the lease term of the assets and recorded into accounting expenses. Assets given out under financing lease:
② The difference between the total residual value, without guarantee, of the financing lease payment receivable
and the current value is recognized by the Company on the lease-beginning date as financing profits yet to be
realized, and as the lease income in future lease periods. The initial direct expenses related to lease transactions
are recorded into the initial calculation of financing lease payment receivable and the amount of profits recognized
in the lease term is reduced.
29. Other important accounting policies and accounting estimates
(1) Changes of accounting policies
No change was made to the main accounting estimates in the current period.
(2) Changes of accounting estimates
No change was made to the main accounting estimates in the report period.
30. Changes of important accounting policies and accounting estimates
(1) Changes of important accounting policies
□ Applicable √ Not applicable
(2) Changes of important accounting estimates
□ Applicable √ Not applicable
VI. Taxes
1. Main tax categories and tax rates
Tax Category Basis Tax Rate
Value-added tax Sales of goods 17
Business tax Revenue from rental and interest on loans 5
Urban maintenance and construction tax Turnover tax payable 7
Enterprise income tax Taxable income 25, 15
Tax payers when different enterprise income tax rates exist
Name of tax payer Income tax rate
Xi’an SEG Electronics Market Co., Ltd. 15
Xi’an Hairong SEG Electronics Market Co., Ltd. 15
2. Tax preference
According to the Letter of Confirmation Doc. No.[2014] 134 issued by Shaanxi Development and Reform
Commission, Xi’an SEG Electronics Market Co., Ltd., a subsidiary of the Company, is engaged in projects
encouraged by the nation and complies with the corporate income tax preference policy for development of the
west regions. Therefore, the corporate income tax shall be paid at the rate of 15%.
According to the Letter of Confirmation Doc. No.[2014] 060 issued by Shaanxi Development and Reform
Commission, Xi’an Hairong SEG Electronics Market Co., Ltd., a subsidiary of the Company, is engaged in
projects encouraged by the nation and complies with the corporate income tax preference policy for development
of the west regions. Therefore, the corporate income tax shall be paid at the rate of 15%.
VII. Notes on Items of Consolidated Financial Statements
1. Monetary capital
Unit: Yuan
Item Closing balance Opening balance
Cash on hand 639,646.86 602,592.57
Bank deposit 155,582,887.30 381,404,611.82
Other monetary capital 49,476.31 1,049,476.31
Total 156,272,010.47 383,056,680.70
Other Descriptions
An amount of RMB 1 million in other monetary capital is the deposit paid for subsidiaries on credit cards.
2. Notes receivable
(1) Types of notes receivable
Unit: Yuan
Item Closing balance Opening balance
Bank's acceptance bill 170,000.00 84,618.08
Total 170,000.00 84,618.08
3. Accounts receivable
(1) Accounts receivable disclosed by type
Unit: Yuan
Closing balance Opening balance
Category Book balance Bad debt provision Book Book balance Bad debt provision Book
Amount Percentage Amount Percentage value Amount Percentage Amount Percentage value
Accounts
receivable where
bad debt
provision is 135,773, 135,773, 185,866, 185,866,
92.07% 94.08%
accrued according 418.34 418.34 040.16 040.16
to credit risk
feature
combination
Accounts
receivable with an
insignificant
amount 11,699,1 11,699,1 11,699,1 11,699,1
7.93% 100.00% 5.92% 100.00%
individually, for 38.18 38.18 38.18 38.18
which bad debt
provision is
separately accrued
147,472, 11,699,1 135,773, 197,565, 11,699,1 185,866,
Total 100.00% 7.93% 100.00% 5.92%
556.52 38.18 418.34 178.34 38.18 040.16
Accounts receivable with a significant amount individually, for which bad debt provision is separately accrued at the end of period:
□ Applicable √ Not applicable
Accounts receivable in the combination, for which bad debt provision was accrued by the aging analysis method:
√ Applicable □ Not applicable
Unit: Yuan
Closing balance
Aging
Accounts receivable Bad debt provision Percentage
Sub-item within one year
Less than one year 135,773,418.34
Subtotal of the accounts with 135,773,418.34
a duration of less than one
year
Total 135,773,418.34
Description of basis for confirming the combination:
Accounts receivable in a combination, for which bad debt provisions are made using the Percentage of Total Accounts Receivable
Outstanding method
□ Applicable √ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
1. Accounts receivable with an insignificant amount individually, for which bad debt provision is separately
accrued
Closing balance
Name of debtor Bad debt Percentage of
Accounts receivable Reason for provision
provision provision
The accounts receivable are
uncollectible because they have
Jiangsu Unicom 3,092,011.09 3,092,011.09 100.00
been outstanding for more than
five years.
The accounts receivable are
Shenzhen Shuangxionghui uncollectible because they have
2,160,725.63 2,160,725.63 100.00
Industrial Co., Ltd. been outstanding for more than
five years.
The accounts receivable are
Shenzhen LiuYuanshun Industrial uncollectible because they have
1,906,865.35 1,906,865.35 100.00
Co., Ltd. been outstanding for more than
five years.
The accounts receivable are
Zhejiang Financial Information Co., uncollectible because they have
786,000.00 786,000.00 100.00
Ltd. been outstanding for more than
five years.
Shanghai Tianci Industrial Co., Ltd. 899,000.00 899,000.00 100.00 The accounts receivable are
Closing balance
Name of debtor Bad debt Percentage of
Accounts receivable Reason for provision
provision provision
uncollectible because they have
been outstanding for more than
five years.
The accounts receivable are
Other units 2,854,536.11 2,854,536.11 100.00 uncollectible because they have
been outstanding too long.
Total 11,699,138.18 11,699,138.18 100.00 ---
(2) Accounts receivable with top 5 closing balance collected based on arrears party
Percentage in the total amount of Accrued bad debt
Name of debtor Closing balance
accounts receivable provision
TOP STAR COMMUNICATION 45,082,280.95 30.57 ---
BORICLE INTL 18,751,525.67 12.72 ---
Shenzhen Runneng Digital Technology
16,059,060.34 10.89 ---
Co., Ltd.
Dalian Dier Computer Co., Ltd. 15,887,560.50 10.77 ---
ELECSHACK INC 6,485,001.01 4.40 ---
Total 102,265,428.47 69.35 ---
4. Advances
(1) Advances listed according to duration
Unit: Yuan
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Less than one year 107,855,702.35 100.00% 94,633,317.07 100.00%
Total 107,855,702.35 -- 94,633,317.07 --
The reason why the advances of a significant amount aged for more than 1 year are not settled must be provided.
(2) Advances with top 5 closing balance collected based on advance object
Percentage in the total
Advance
Company name Period-end amount amount of accounts Reason for non-settlement
payment date
receivable
Xi'an Gaoke (Group) New West
Less than one
China Industrial Development Co., 20,000,000.00 18.54 Advance rental payment
year
Ltd.
Tonmac International Electronics Less than one
19,922,132.67 18.47 Advance rental payment
(Suzhou) Co., Ltd. year
Suzhou Yuanshun SEG Digital Plaza Less than one
9,570,927.85 8.87 Advance rental payment
Management Co., Ltd. year
Less than one Advance payment for
Henan Dixintong Trading Co., Ltd. 7,847,837.40 7.28
year goods
Less than one Advance payment for
Kepu Trade (Shenzhen) Co., Ltd. 6,840,949.04 6.34
year goods
Total 64,181,846.96 59.51 --- ---
5. Other receivables
(1) Other receivables disclosed by type
Unit: Yuan
Closing balance Opening balance
Category Book balance Bad debt provision Book Book balance Bad debt provision Book
Amount Percentage Amount Percentage value Amount Percentage Amount Percentage value
Other receivables
with a significant
amount
individually, for 14,434,5 14,434,5 14,434, 14,434,5
18.80% 100.00% 11.31% 100.00%
which bad debt 47.87 47.87 547.87 47.87
provision is
separately
accrued
Other receivables
where bad debt
provision is 44,551,3 44,545, 95,371, 95,366,1
16.59% 6,122.91 0.05% 74.74% 5,816.71 0.01%
accrued 22.36 199.45 972.98 56.27
according to
credit risk
Closing balance Opening balance
Category Book balance Bad debt provision Book Book balance Bad debt provision Book
Amount Percentage Amount Percentage value Amount Percentage Amount Percentage value
feature
combination
12,736,9 12,730, 4,516,3 4,510,58
Portfolio 1 16.59% 6,122.91 0.05% 3.54% 5,816.71 0.13%
18.34 795.43 98.14 1.43
31,814,4 31,814, 90,855, 90,855,5
Portfolio 2 41.43% --- --- 71.20% --- ---
04.02 404.02 574.84 74.84
Other receivables
with an
insignificant
amount
17,800,0 17,800,0 17,800, 17,800,0
individually, for 23.18% 100.00% 13.95% 100.00%
02.44 02.44 002.44 02.44
which bad debt
provision is
separately
accrued
76,785,8 32,240,6 44,545, 127,606 32,240,3 95,366,1
Total 100.00% 41.99% 100.00% 25.27%
72.67 73.22 199.45 ,523.29 67.02 56.27
Other receivables with a significant amount individually, for which bad debt provision is separately accrued:
√ Applicable □ Not applicable
Unit: Yuan
Other receivables (by Closing balance
company) Other receivables Bad debt provision Percentage Reason for provision
The accounts receivable
are uncollectible because
Yangjiang Yuntong
8,530,276.35 8,530,276.35 100.00% they have been
Grease Co., Ltd.
outstanding for more
than five years.
The accounts receivable
Creditor’s right are uncollectible because
transferred in by SEG 5,904,271.52 5,904,271.52 100.00% they have been
Communications outstanding for more
than five years.
Total 14,434,547.87 14,434,547.87 -- --
Among the combinations, other receivables for which bad debt provision is computed by aging method:
√ Applicable □ Not applicable
Unit: Yuan
Closing balance
Aging
Other accounts receivable Bad debt provision Percentage
Sub-item within one year
Less than one year 12,685,444.65
1-2 years 9,593.17 479.64 5.00%
2-3 years 27,337.83 2,734.73 10.00%
Over 3 years 14,542.69 2,908.54 20.00%
Total 12,736,918.34 6,122.91 0.05%
Description of basis for confirming the combination:
Other receivables in a combination, for which bad debt provisions are made using the Percentage of Total Receivables Outstanding
method:
□ Applicable √ Not applicable
Among the combination, other receivables for which bad debt provision is computed by adopting other methods:
□ Applicable √ Not applicable
(2) Current accrued, recovered or reversed bad debt provision
The amount of the current accrued bad debt provision is RMB 306.20 Yuan and the amount of the current
recovered or reversed bad debt provision is RMB 400,000.00 Yuan.
(3) Classification of other receivables by nature
Unit: Yuan
Nature of receivables Period-end book balance Period-end book balance
Creditor’s right transfer cost 28,568,316.79 28,568,316.79
Imprest 2,780,527.21 1,733,960.46
Deposit and security deposit 31,814,404.02 90,906,485.24
Others 13,622,624.65 6,397,760.80
Total 76,785,872.67 127,606,523.29
(4) Other receivables with top 5 closing balance collected based on arrears party
Unit: Yuan
Percentage in the
Nature of total amount of Closing balance of
Company name Closing balance Aging
receivables closing balance of bad debt provision
other receivables
Shenzhen San Miki Business security
10,000,000.00 Less than one year 13.02%
Electronics Limited deposit
Yangjiang Yuntong Debt restructuring
8,530,276.35 Over 5 years 11.11% 8,530,276.35
Grease Co., Ltd. of SEG Orient
Nantong
Construction Salary deposit for
6,200,000.00 Less than one year 8.07%
Engineering peasant workers
Administration
Creditor’s right
Debt restructuring
transferred in by
of SEG 5,904,271.52 Over 5 years 7.69% 5,904,271.52
SEG
Communications
Communications
Shenzhen Lianjing Debt restructuring
5,697,287.51 Over 5 years 7.42% 5,697,287.51
Trade Co., Ltd. of SEG Orient
Total -- 36,331,835.38 -- 47.32% 20,131,835.38
6. Inventory
(1) Classification of inventory
Unit: Yuan
Closing balance Opening balance
Provision for loss Provision for loss
Item for decline in for decline in
Book balance Book value Book balance Book value
value of value of
inventories inventories
Raw materials 80,293.26 80,293.26
Commodity
4,908,514.56 4,908,514.56 1,039,703.99 1,039,703.99
stocks
Low-cost
208,638.28 208,638.28 202,195.78 202,195.78
consumables
Development
408,418,255.53 408,418,255.53 276,959,393.69 276,959,393.69
cost
Closing balance Opening balance
Provision for loss Provision for loss
Item for decline in for decline in
Book balance Book value Book balance Book value
value of value of
inventories inventories
Total 413,535,408.37 413,535,408.37 278,281,586.72 278,281,586.72
(2) Description of capitalization amount of borrowing costs included in closing balance of inventory
Current period decrease Capitalization rate of
Inventory item Opening Current period Closing capitalization amount
Decrease of
name balance increase Others balance confirmed in current
sales
period (%)
Nantong SEG
2,885,600.89 6,429,624.66 --- --- 9,315,225.55 6.30
Times Square
Total 2,885,600.89 6,429,624.66 --- --- 9,315,225.55 ---
(3) Completed but unsettled assets in construction contracts at the end of the period
Other description: development cost
Unit: Yuan
Expected
Commencement Expected
Project name investment Closing balance Opening balance
time completion date
amount
Nantong SEG Times
2013.5 2015.12 600,000,000.00 408,418,255.53 276,959,393.69
Square
Total --- --- --- 408,418,255.53 276,959,393.69
7. Other current assets
Unit: Yuan
Item Closing balance Opening balance
Bank financial products 247,411,270.00 322,679,000.00
Tax to be deducted and withheld 87,652,365.45 120,700,762.42
Others 373,499.61 163,251.07
Total 335,437,135.06 443,543,013.49
Other description:
8. Financial assets available for sale
(1) Financial assets available for sale
Unit: Yuan
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Available-for-sale equity
34,787,389.13 15,000.00 34,772,389.13 34,365,035.45 15,000.00 34,350,035.45
instruments
Measured by fair
976,996.30 976,996.30 554,642.62 554,642.62
value
Measured by cost 33,810,392.83 15,000.00 33,795,392.83 33,810,392.83 15,000.00 33,795,392.83
Total 34,787,389.13 15,000.00 34,772,389.13 34,365,035.45 15,000.00 34,350,035.45
(2) Available-for-sale financial assets measured by fair value at the end of the period
Unit: Yuan
Available-for-sale equity Available-for-sale debt
Financial assets available for sale Total
instruments instruments
Cost of equity instruments/amortized cost of
90,405.00 90,405.00
debt instruments
Fair value 976,996.30 976,996.30
(3) Available-for-sale financial assets measured by cost at the end of the period
Unit: Yuan
Book balance Impairment provision Cash
dividends
Invested Current Current Current Current Shareholding
Period Period Period Period of the
organization period period period period proportion
beginning end beginning end current
increase decrease increase decrease
period
Kashgar
20,000,00 20,000,
Shenzhen
0.00 000.00
City Co., Ltd.
Shenzhen
SEG GPS
13,515,39 13,515,
Scientific
2.83 392.83
Navigations
Co., Ltd.
Book balance Impairment provision Cash
dividends
Invested Current Current Current Current Shareholding
Period Period Period Period of the
organization period period period period proportion
beginning end beginning end current
increase decrease increase decrease
period
Nanjing
280,000.0 280,000
Shangsha
0 .00
Co., Ltd.
Anshan Yibai 15,000. 15,000.
15,000.00 15,000.00
Co., Ltd. 00 00
33,810,39 33,810, 15,000.
Total 15,000.00 --
2.83 392.83 00
9. Long-term equity investment
Unit: Yuan
Current period increase/decrease
Investment
gains and Closing
Adjustment of Issued
Invested Opening losses Other Accrued Closing balance of
Additional Negative other cash
organization balance confirmed equity impairment Others balance impairment
investment investment comprehensive dividends
under the changes provision provision
income or profits
equity
method
1. Cooperative enterprise
2. Joint venture
Shanghai SEG
Electronics 3,576,788 -549,912.3 3,026,875
Market Co., .18 1 .87
Ltd.
Shenzhen
78,523,40 -4,342,943 175,996,6
Huakong SEG 101,816,219.19
8.83 .63 84.39
Co., Ltd.
82,100,19 -4,892,855 179,023,5
Subtotal 101,816,219.19
7.01 .94 60.26
82,100,19 -4,892,855 179,023,5
Total 101,816,219.19
7.01 .94 60.26
Other descriptions
10. Investment properties
(1) Investment properties using cost measurement model
√ Applicable □ Not applicable
Unit: Yuan
Item Houses and buildings Land use right Construction in progress Total
I. Original book value
1. Opening balance 705,673,301.76 5,237,512.49 710,910,814.25
2. Current period
12,608,327.29 12,608,327.29
increase
(1) Outsourcing
(2) Transfer-in of
inventory/fixed
12,608,327.29 12,608,327.29
assets/construction in
progress
(3) Business
merger increase
3. Amount of
current period decrease
(1) Disposal
(2) Other
transfer-out
4. Closing balance 718,281,629.05 5,237,512.49 723,519,141.54
II. Accumulated
depreciation or
accumulated
amortization
1. Opening balance 246,495,704.92 1,852,226.55 248,347,931.47
2. Amount of
21,978,504.48
current period increase
(1) Provision or
9,324,956.51 45,220.68 9,370,177.19
amortization
Other transfer-in 12,608,327.29 12,608,327.29
3. Amount of
current period decrease
(1) Disposal
(2) Other
transfer-out
4. Closing balance 268,428,988.72 1,897,447.23 270,326,435.95
III. Impairment
provision
1. Opening balance
2. Amount of
current period increase
(1) Provision
3. Amount of
current period decrease
(1) Disposal
(2) Other
transfer-out
4. Closing balance
IV. Book value
1. Ending book
449,852,640.33 3,340,065.26 453,192,705.59
value
2. Opening book
459,177,596.84 3,385,285.94 462,562,882.78
value
(2) Investment properties using fair value measurement model
□ Applicable √ Not applicable
(3) Investment properties for which a property right certificate has not been obtained
□ Applicable √ Not applicable
Other descriptions
List of investment properties:
Unit: Yuan
Owner of investment property Investment property project Net value of investment property
Owner of investment property Investment property project Net value of investment property
Shenzhen SEG Co., Ltd. F2, F4 and F5 of SEG Plaza 235,309,434.93
Shenzhen SEG Co., Ltd. Some floors of Contemporary Window 52,467,564.61
Shenzhen SEG Co., Ltd. Other houses 1,882,416.02
Shenzhen SEG Baohua Enterprise
Blocks A and B of Baohua Building 34,330,984.75
Development Co., Ltd.
Shenzhen SEG Industrial Investment Co., Ltd. Some floors of Contemporary Window 2,744,384.26
Changsha SEG Development Co., Ltd. Changsha SEG 126,457,921.02
Total 453,192,705.59
11. Fixed assets
(1) Information about fixed assets
Unit: Yuan
Houses and Machinery Transportation Electronic
Item Other equipment Total
buildings equipment vehicles equipment
I. Original book
value
1. Opening
48,303,175.02 30,320,272.81 5,951,816.82 32,154,377.47 3,598,264.71 120,327,906.83
balance
2. Amount of
current period 27,240.00 262,078.00 12,818.00 302,136.00
increase
(1) Purchase 27,240.00 262,078.00 12,818.00 302,136.00
(2)
Transfer-in of
construction in
progress
(3) Business
merger increase
3. Amount of
current period 12,608,327.29 335,126.32 214,247.38 199,214.94 6,735.12 13,363,651.05
decrease
(1) Disposal
335,126.32 214,247.38 199,214.94 6,735.12 755,323.76
or scrap
Other 12,608,327.29 12,608,327.29
Houses and Machinery Transportation Electronic
Item Other equipment Total
buildings equipment vehicles equipment
transfer-out
4. Closing
35,694,847.73 30,012,386.49 5,737,569.44 32,217,240.53 3,604,347.59 107,266,391.78
balance
II. Accumulated
depreciation
1. Opening
26,571,597.38 28,179,465.09 3,253,103.09 18,892,024.93 2,023,417.91 78,919,608.40
balance
2. Amount of
current period 435,261.97 915,963.96 307,157.25 701,788.37 251,931.88 2,612,103.43
increase
(1)
435,261.97 915,963.96 307,157.25 701,788.37 251,931.88 2,612,103.43
Provision
3. Amount of
current period 12,608,327.29 172,199.72 180,500.00 131,736.82 1,588.40 13,094,352.23
decrease
(1) Disposal
172,199.72 180,500.00 131,736.82 1,588.40 486,024.94
or scrap
Other
12,608,327.29 12,608,327.29
transfer-out
4. Closing
14,398,532.06 28,923,229.33 3,379,760.34 19,462,076.48 2,273,761.39 68,437,359.60
balance
III. Impairment
provision
1. Opening
balance
2. Amount of
current period
increase
(1)
Provision
3. Amount of
current period
decrease
(1) Disposal
or scrap
4. Closing
balance
IV. Book value
Houses and Machinery Transportation Electronic
Item Other equipment Total
buildings equipment vehicles equipment
1. Ending
21,296,315.67 1,089,157.16 2,357,809.10 12,755,164.05 1,330,586.20 38,829,032.18
book value
2. Opening
21,731,577.64 2,140,807.72 2,698,713.73 13,262,352.54 1,574,846.80 41,408,298.43
book value
(2) Fixed assets not obtaining a property right certificate
Unit: Yuan
Reason for not obtaining the property right
Item Book value
certificate
Houses and buildings 1,214,612.99 Qualification procedures not complete
Other descriptions
12. Intangible assets
(1) Information about intangible assets
Unit: Yuan
Non-patented
Item Land use right Patent right Outsourced software Total
technology
I. Original book value
1. Opening balance 159,759.24 2,269,353.00 2,429,112.24
2. Amount of
545,400.00 545,400.00
current period increase
(1) Purchase 545,400.00 545,400.00
(2) Internal
R&D
(3) Business
merger increase
3. Amount of current
period decrease
(1) Disposal
4. Closing balance 159,759.24 2,814,753.00 2,974,512.24
II. Accumulated
amortization
1. Opening balance 54,754.79 1,718,769.91 1,773,524.70
2. Amount of
1,372.88 141,117.03 142,489.91
current period increase
(1) Provision 1,372.88 141,117.03 142,489.91
3. Amount of
current period decrease
(1) Disposal
4. Closing balance 56,127.67 1,859,886.94 1,916,014.61
III. Impairment
provision
1. Opening balance
2. Amount of
current period increase
(1) Provision
3. Amount of
current period decrease
(1) Disposal
4. Closing balance
IV. Book value
1. Ending book
103,631.57 954,866.06 1,058,497.63
value
2. Opening book
105,004.45 550,583.09 655,587.54
value
Proportion of intangible assets formed not through internal R&D of the company to the balance of intangible assets
13. Goodwill
(1) Original book value of goodwill
Unit: Yuan
Name of the invested
organization or the
Opening balance Current period increase Current period decrease Closing balance
item contributing to a
goodwill
Changsha SEG
Development Co., 10,328,927.82 10,328,927.82
Ltd.
Total 10,328,927.82 10,328,927.82
14. Long-term unamortized expenses
Unit: Yuan
Current period Amount of current Amount of other
Item Opening balance Closing balance
increase period amortization decrease
Decoration charges 48,923,477.62 5,421,057.13 6,349,333.11 47,995,201.64
Firefighting
111,754.83 327,283.00 204,304.65 234,733.18
renovation
Market supporting
733,445.55 20,856.30 712,589.25
fee of block B
Total 49,768,678.00 5,748,340.13 6,574,494.06 48,942,524.07
Other descriptions
15. Deferred income tax assets and liabilities
(1) Deferred income tax assets not offset
Unit: Yuan
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Asset impairment
39,372,219.55 9,843,054.88 32,658,252.58 8,164,563.16
provision
Government subsidies
included in deferred 9,500,000.00 2,375,000.00 9,500,000.00 2,375,000.00
income
Total 48,872,219.55 12,218,054.88 42,158,252.58 10,539,563.16
(2) Deferred income tax liabilities not offset
Unit: Yuan
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Asset evaluation
increment for merger of
66,082,439.68 16,520,609.92 67,877,937.66 16,969,484.39
not the same controlling
enterprise
(2) Gains and losses 976,996.30 244,249.08 464,237.62 116,059.41
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
from changes of fair
value of the
available-for-sale
financial assets
Total 67,059,435.98 16,764,859.00 68,342,175.28 17,085,543.80
(3) Deferred income tax assets or liabilities listed in the form of net amount after offset
Unit: Yuan
Year-end mutual offset Year-end balance of Beginning mutual offset Beginning balance of
amount of deferred deferred income tax amount of deferred deferred income tax
Item
income tax assets and assets and liabilities income tax assets and assets and liabilities
liabilities after offset liabilities after offset
Deferred income tax
12,218,054.88 10,539,563.16
assets
Deferred income tax
16,764,859.00 17,085,543.80
liabilities
(4) Details of unconfirmed deferred income tax assets
Unit: Yuan
Item Closing balance Opening balance
Deductible losses 39,063,382.24 39,063,382.24
Asset impairment provision 11,296,252.62 11,296,252.62
Total 50,359,634.86 50,359,634.86
(5) The deductible loss of deferred income tax assets that have not been confirmed will come to maturity in
the following years:
Unit: Yuan
Year Period-end amount Period-beginning amount Remarks
Year 2015
Year 2016 13,071,134.55 16,667,858.70
Year 2017 7,431,196.64 7,431,196.64
Year 2018 11,864,843.19 12,705,405.96
Year Period-end amount Period-beginning amount Remarks
Year 2019 6,696,207.86
Total 39,063,382.24 36,804,461.30 --
Other description:
16. Other non-current assets
Unit: Yuan
Item Closing balance Opening balance
Prepayment for software 520,000.00
Prepayment for engineering in electronics
4,135,063.54
market
Total 0.00 4,655,063.54
17. Short-term loans
(1) Classification of short-term loans
Unit: Yuan
Item Closing balance Opening balance
Pledge loans 60,000,000.00 59,246,687.38
Mortgage loans 215,000,000.00 100,000,000.00
Guaranteed loans 50,000,000.00 30,000,000.00
Total 325,000,000.00 189,246,687.38
Notes on the classification of short-term loans:
1. There are no overdue outstanding short-term loans in this period.
2. The collateral of the pledge loan is the export tax rebate of Shenzhen SEG E-Commerce Co., Ltd., a
subsidiary of the Company.
18. Accounts payable
(1) List of accounts payable
Unit: Yuan
Item Closing balance Opening balance
Payment for goods 95,196,251.32 195,385,013.38
Others 615,651.99 4,744,638.54
Total 95,811,903.31 200,129,651.92
19. Advance receipts
(1) List of advance receipts
Unit: Yuan
Item Closing balance Opening balance
Advance brand royalty 9,726,231.22 9,390,743.64
Advance rental payment 113,845,673.24 136,482,047.49
Advance payment for goods 14,152,253.56 27,013,851.48
Advance advertising payment 9,163,330.86 6,353,263.26
Others 5,916,430.68 3,819,405.44
Total 152,803,919.56 183,059,311.31
(2) Settled but unfinished projects in construction contracts at the end of the period
Not applicable
20. Payroll payable
(1) List of payroll payable
Unit: Yuan
Item Opening balance Current period increase Current period decrease Closing balance
1. Short-term payroll 18,719,733.31 37,600,386.26 45,990,147.38 10,329,972.19
2. Welfare after leave –
defined contribution 139,110.02 1,725,046.69 1,690,791.40 173,365.31
plan
Total 18,858,843.33 39,325,432.95 47,680,938.78 10,503,337.50
(2) List of short-term payroll
Unit: Yuan
Item Opening balance Current period increase Current period decrease Closing balance
1. Wages, bonuses, 16,654,352.38 34,482,389.15 42,382,376.16 8,754,365.37
allowances and subsidies
2. Employee welfare 596,821.66 401,593.38 195,228.28
3. Social insurance premiums 16,498.16 927,853.27 804,225.19 140,126.24
Including: Medical
10,294.54 846,788.68 723,338.06 133,745.16
insurance premiums:
Work injury
265.38 25,250.15 25,263.53 252.00
insurance
Maternity
298.54 51,149.36 51,284.90 163.00
insurance
Supplementary
5,639.70 4,665.08 4,338.70 5,966.08
medical insurance
4. Housing fund 1,159,284.62 1,148,447.53 1,781,788.26 525,943.89
5. Labor union expenditure
and employee education 617,715.42 440,635.60 403,395.01 654,956.01
fund
8. Other short-term payroll 271,882.73 4,239.05 216,769.38 59,352.40
Total 18,719,733.31 37,600,386.26 45,990,147.38 10,329,972.19
(3) Defined contribution plan
Unit: Yuan
Item Opening balance Current period increase Current period decrease Closing balance
1. Pension insurance 9,288.08 1,074,177.65 1,010,100.42 73,365.31
Unemployment insurance
663.43 39,425.55 40,088.98 0.00
premium
3. Supplementary pension
129,158.51 611,443.49 640,602.00 100,000.00
payment
Total 139,110.02 1,725,046.69 1,690,791.40 173,365.31
21. Taxes payable
Unit: Yuan
Item Closing balance Opening balance
Value-added tax 14,283,567.89 1,659,452.21
Business tax 23,928.55 1,028,150.77
Enterprise income tax 21,569,497.53 32,336,241.19
Individual income tax 598,499.91 1,098,931.96
Urban maintenance and construction tax 55,304.97 720,549.53
Education surtax 13,111.29 461,020.60
Housing property tax 2,307,603.72 1,721,703.23
Stamp tax and water fund 177,558.46 254,539.95
Others 4,559,253.16 165,107.03
Total 43,588,325.48 39,445,696.47
22. Interest payable
Unit: Yuan
Item Closing balance Opening balance
Interest payable on short-term loans 85,722.22 232,749.99
Interest payable of short-term financing
10,062,500.66
bonds
Total 85,722.22 10,295,250.65
Important overdue outstanding interest: not applicable
23. Dividends payable
Unit: Yuan
Item Closing balance Opening balance
Common stock dividends 3,240,318.18 1,717,882.74
Total 3,240,318.18 1,717,882.74
24. Other payables
(1) Other payables listed based on nature
Unit: Yuan
Item Closing balance Opening balance
Deposit and security deposit 115,820,479.60 119,826,258.74
Central air conditioner maintenance cost
13,177,749.69 11,754,618.52
and special maintenance fund
Receipts under custody 9,273,754.75 13,624,148.51
Funds of related parties 57,653,186.81
Electronics market water and electricity 19,209,967.16 19,858,574.55
charges and rental payable
Others 44,082,006.82 22,087,615.93
Total 201,563,958.02 244,804,403.06
25. Other current liabilities
Unit: Yuan
Item Closing balance Opening balance
Short-term bonds payable 250,000,000.00
Total 250,000,000.00
26. Bonds payable
(1) Increase and decrease changes of bonds payable (excluding other financial instruments such as
preferred stocks and sustainable debts that belong to financial liabilities)
Unit: Yuan
Period-beg Provision for Premium and
Issuing Issue Issue in Current Period-end
Bond name Book value Bond term inning interest at discount
date amount this period repayment amount
amount par amortization
Short-term May 15, 250,000,00 250,000,00 250,000,0
100.00 365 days 5,687,499.34
financing bonds 2014 0.00 0.00 00.00
250,000,00 250,000,00 250,000,0
Total -- -- -- 5,687,499.34
0.00 0.00 00.00
27. Deferred income
Unit: Yuan
Current period Current period
Item Opening balance Closing balance Cause
increase decrease
Government
9,705,371.01 35,628.12 9,669,742.89
subsidies
Total 9,705,371.01 35,628.12 9,669,742.89 --
Items involving government subsidies:
Unit: Yuan
Beginning Amount of new Amount of Relevant to
Liability item Other changes Closing balance
balance subsidies in this non-operating assets/relevant to
period income in this income
period
Subsidies for
Relevant to
online SEG 93,659.89 35,628.12 58,031.77
assets
projects
Subsidies for Relevant to
111,711.12 111,711.12
project funds income
Support project
for construction
Relevant to
of Nantong SEG 9,500,000.00 9,500,000.00
assets
Electronics
Market
Total 9,705,371.01 35,628.12 9,669,742.89 --
28. Share capital
Unit: Yuan
Increase or decrease this time (+)
Opening Capitalization Closing
New share
balance Bonus share of public Others Subtotal balance
offering
reserve
784,799,010.0 784,799,010.0
Sum of shares
0 0
29. Capital reserve
Unit: Yuan
Item Opening balance Current period increase Current period decrease Closing balance
Capital premium (capital
322,339,973.81 322,339,973.81
share premium)
Other capital reserves 82,387,283.91 101,816,219.19 184,203,503.10
Total 404,727,257.72 101,816,219.19 506,543,476.91
Other description: including increase and decrease changes this time and reasons for changes:
The current increase of other capital reserves is caused by non-directive issuance of shares at premium by
Shenzhen Huakong SEG Co., Ltd. in the report period. In the consolidated statements of the Company, capital
reserve is added according to the equity method.
30. Other comprehensive income
Unit: Yuan
Amount incurred in the current period
Less: gains and
losses
Pretax Belong to Belong to
Opening transferred in Closing
Item amount Less: parent a few
balance from other balance
obtained in Income tax company shareholde
comprehensive
this period after tax rs after tax
income in the
current period
II. Other comprehensive income
442,719.
that can be categorized as gains and 231,817.05 422,353.68 105,588.42 210,902.31 105,862.95
36
losses
Gains and losses from
442,719.
changes of fair value of the 231,817.05 422,353.68 105,588.42 210,902.31 105,862.95
36
available-for-sale financial assets
Total of other comprehensive 442,719.
231,817.05 422,353.68 105,588.42 210,902.31 105,862.95
income 36
31. Surplus reserve
Unit: Yuan
Item Opening balance Current period increase Current period decrease Closing balance
Statutory surplus reserve 102,912,835.67 102,912,835.67
Total 102,912,835.67 102,912,835.67
32. Undistributed profits
Unit: Yuan
Item Amount incurred in the current period Amount of the previous period
Before adjustment undistributed profits of the end
6,299,799.41
of the previous period
After adjustment period-beginning undistributed
6,299,799.41
profit
Add: Net profits attributable to the parent
34,906,133.61
company owner in the current period
Year-end undistributed profits 41,205,933.02
33. Operating income and operating cost
Unit: Yuan
Amount incurred in the current period Amount incurred in the previous period
Item
Income Cost Income Cost
Main business 425,219,054.09 317,303,931.44 337,216,748.01 248,349,208.37
Total 425,219,054.09 317,303,931.44 337,216,748.01 248,349,208.37
34. Business taxes and surcharges
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Business tax 12,116,694.54 11,276,141.66
Urban maintenance and construction tax 926,364.05 852,218.58
Education surtax 617,537.62 542,120.27
Others 87,433.93 147,373.01
Total 13,748,030.14 12,817,853.52
35. Financial expenses
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Interest expenses 10,723,583.83 7,784,610.29
Less: Interest income 9,503,644.66 6,615,020.39
Loss on exchange -671,695.25 -957,622.03
Commission 294,813.31 176,894.59
Total 843,057.23 388,862.46
36. Assets impairment losses
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
1. Loss on bad debt -399,693.80 -14,558.99
14. Others 7,113,660.69 -273,948.29
Total 6,713,966.89 -288,507.28
37. Investment income
Unit: Yuan
Amount incurred in the previous
Item Amount incurred in the current period
period
Long-term equity investment income by the
-4,892,855.94 -1,746,429.31
equity method
Investment income during the possession of
750,000.00
available-for-sale financial assets
Others (financial products) 9,594,819.58 13,477,970.15
Total 5,451,963.64 11,731,540.84
38. Non-operating income
Unit: Yuan
Amount incurred in the current Amount incurred in the Amount recorded into current
Item
period previous period non-recurring gains and losses
Total gains on disposal of
18,693.00 0.00 18,693.10
non-current assets
Gain on disposal of fixed assets 18,693.10 20,120.00 18,693.10
Government subsidies 223,828.12 693,467.78 223,828.12
Liquidated damages 301,209.17 221,182.08 301,209.17
Others 502,248.72 307,565.63 502,248.72
Total 1,045,979.11 1,242,335.04 1,045,979.11
Government subsidies included in current gains and losses:
Unit: Yuan
Amount incurred in the current Amount incurred in the Relevant to assets/relevant to
Subsidy item
period previous period income
Subsidies for online SEG
35,628.12 Relevant to assets
projects
Loan with discounted interest 188,200.00 Relevant to income
Total 223,828.12 --
39. Non-operating expenses
Unit: Yuan
Amount incurred in the current Amount incurred in the Amount recorded into current
Item
period previous period non-recurring gains and losses
Total loss from disposal of
196,424.21 4,831.25 196,424.21
non-current assets
Including: loss from disposal of 196,424.21 4,831.25 196,424.21
fixed assets
Abnormal loss 32,400.00
Compensation for loss 605,580.63 605,580.63
Others 13,784.10 94,733.88 13,784.10
Total 815,788.94 131,965.13 815,788.94
40. Income tax expenses
(1) Income tax
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Income tax of the current period 20,575,833.86 19,139,709.37
Deferred income tax -454,462.94 -506,609.32
Total 20,121,370.92 18,633,100.05
(2) Adjustment process of accounting profit and income tax
Unit: Yuan
Item Amount incurred in the current period
Total profit 72,187,205.18
Income tax calculated according to statutory or applicable tax
18,046,801.30
rate
Impact of different tax rates applicable to subsidiaries -782,151.96
Impact of income tax before adjustment 913.35
Impact of non-taxable income 187,500.00
Impact of non-deductible costs, expenses and losses 351,745.54
Impact of deductible temporary difference of deferred income
2,316,562.70
tax assets not confirmed in this period or deductible losses
Income tax 20,121,370.92
Other descriptions
41. Items in the cash flow statement
(1) Other cash received concerning operating activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Incomings and outgoings 35,059,959.29 78,123,582.27
Receipt from security deposit for land 60,000,000.00
auction
Goods payment collected from tenants 130,068,994.68 122,433,972.66
Interest income 4,764,834.98 6,615,020.39
Non-operating income 181,571.66 743,165.02
Total 230,075,360.61 207,915,740.34
(2) Other paid cash concerning operating activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Incomings and outgoings 43,627,781.29 55,893,256.02
Goods payment paid for tenants 125,990,506.28 122,556,255.62
Cash expenses 21,024,437.31 33,987,297.20
Non-operating expenses 1,176,961.97 95,010.95
Total 191,819,686.85 212,531,819.79
(3) Other cash received concerning financing activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Issuance of the Company's short-term
250,000,000.00
financing bonds
Total 250,000,000.00
(4) Other paid cash concerning financing activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Interbank financing of related parties 57,650,000.00
Payment for cash deposit
Payment for loan interest of related parties 110,222.92
Payment for issuance of short-term
669,500.00 240,000.00
financing bonds
Total 58,429,722.92 240,000.00
42. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
Unit: Yuan
Supplementary data Amount incurred in the current period Amount incurred in the previous period
Reconciliation of net Profit to cash flows of
-- --
operating activities
Net profit 52,065,834.26 51,824,780.37
Plus: Asset impairment provision 6,713,966.89 -288,507.28
Depreciation of fixed assets, oil & gas assets
11,982,280.62 11,729,374.25
and consumable biological assets
Amortization of intangible assets 142,489.91 124,473.92
Amortization of long-term expenses to be
6,574,494.06 6,782,332.63
apportioned
Loss on disposal of fixed assets, intangible
assets, and other long-term assets (Profit will -177,731.11
be marked with "-")
Loss on discard of fixed asset ("-" for profit) -15,288.75
Financial expenses (“–” for income) 843,057.23 7,784,610.29
Income from investment ("-" for loss) -5,451,963.64 -11,731,540.84
Decrease in deferred tax assets (“–” for
-1,678,491.72 2,855.00
increase)
Increase in deferred tax liabilities (“–” for
-320,684.81 -578,736.10
decrease)
Inventory decrease (“–” for increase) -135,253,821.65 -76,235,859.67
Decrease in accounts receivable relating to
158,080,537.33 -12,125,065.56
operating activities (–” for increase)
Increase in accounts payable relating to
-192,107,800.99 -81,655,624.85
operating activities (“–” for decrease)
Others
Net cash flow from operating activities -98,587,833.62 -104,382,196.59
Investment and financing activities not
--
Involving cash receipts and payments
3. Net change in cash and cash equivalents -- --
Closing balance 155,272,010.47 629,339,292.58
Less: Opening balance of cash 382,056,680.70 335,593,493.81
Net increase in cash and cash equivalents -226,784,670.23 293,745,798.77
(2) Composition of cash and cash equivalents
Unit: Yuan
Item Closing balance Opening balance
1. Cash 155,272,010.47 382,056,680.70
3. Period-end balance of cash and cash
155,272,010.47 382,056,680.70
equivalents
43. Assets where ownership or the right to use is restricted
Unit: Yuan
Item Ending book value Reason for restriction
Monetary funds 1,000,000.00 Cash deposit for credit card repayment
Investment properties 47,919,235.49 Collaterals for bank loans
Total 48,919,235.49 --
44. Foreign currency monetary projects
(1) Foreign currency monetary projects
Unit: Yuan
Converted RMB balance at the
Item End foreign currency balance Discount exchange rate
end of the period
USD 188,960.00 6.1136 1,155,225.86
HK$ 239.17 0.7886 188.61
USD 13,677,771.01 6.1136 83,620,420.85
(2) Description of foreign operational entities: including main places of business, recording currency and
selection basis for important foreign operational entities (if the recording currency is changed, the reason
shall be disclosed)
□ Applicable √ Not applicable
VIII. Equity in other Subjects
1. Equity in subsidiaries
(1) Composition of enterprise group
Main place of Place of Nature of Shareholding percentage Way of
Company name
business registration business Direct Indirect acquisition
Xi’an SEG Electronics
Investment and
Electronics Xi’an Xi’an market lease 65.00%
establishment
Market Co., Ltd. management
Shenzhen SEG
Electronics Electronics
Investment and
Market Shenzhen Shenzhen market lease 70.00%
establishment
Management management
Co., Ltd.
Suzhou SEG Electronics
Investment and
Electronics Su Zhou Su Zhou market lease 45.00%
establishment
Market Co., Ltd. management
Shenzhen Hotel
Mellow Orange management,
Investment and
Business Hotel Shenzhen Shenzhen consultancy and 66.58%
establishment
Management property
Co., Ltd. management
Petty loan
business
(pooling public
deposits is
Shenzhen SEG Investment and
Shenzhen Shenzhen prohibited) 36.00% 17.02%
Credit Co., Ltd. establishment
within the
administrative
region of
Shenzhen.
Shenzhen SEG
Investment and
E-Commerce Shenzhen Shenzhen E-commerce 51.00%
establishment
Co., Ltd.
Market facilities
Shenzhen SEG
leasing, property
Electronics
management, Investment and
Market Nanjing Nanjing 100.00%
sales of establishment
Management
electronic
Co., Ltd.
products and
Main place of Place of Nature of Shareholding percentage Way of
Company name
business registration business Direct Indirect acquisition
advertisement
Property leasing,
Xi’an Hairong sales of
Investment and
SEG Electronics Xi’an Xi’an electronic 51.00%
establishment
Market Co., Ltd. products and
advertisement
Wujiang SEG Electronics
Investment and
Electronics Wujiang Wujiang market lease 51.00%
establishment
Market Co., Ltd. management
Wuxi SEG Electronics
Investment and
Electronics Wuxi Wuxi market lease 51.00%
establishment
Market Co., Ltd. management
Shunde SEG
Electronics Electronics
Investment and
Market Foshan Foshan market lease 100.00%
establishment
Management management
Co., Ltd.
Nanning SEG
Electronics Electronics
Investment and
Market Nanning Nanning market lease 100.00%
establishment
Management management
Co., Ltd.
Nantong SEG
Times Square Real estate Investment and
Nantong Nantong 100.00%
Development development establishment
Co., Ltd.
Shenzhen SEG
Merger of the
Baohua
Property lease enterprises under
Enterprise Shenzhen Shenzhen 66.58%
and management the control of a
Development
same entity
Co., Ltd.
Shenzhen SEG Investment in Merger of the
Industrial industrial and enterprises under
Shenzhen Shenzhen 100.00%
Investment Co., commercial the control of a
Ltd. business same entity
Merger of the
Changsha SEG
enterprises under
Development Changsha Changsha Property lease 46.00%
the control of a
Co., Ltd.
same entity
Yantai SEG Yantai Yantai Real estate 90.00% Investment and
Main place of Place of Nature of Shareholding percentage Way of
Company name
business registration business Direct Indirect acquisition
Times Square development establishment
Development
Co., Ltd.
Nantong SEG
Commercial
Investment and
Operation Nantong Nantong --- 100.00%
establishment
Management
Co., Ltd.
Suzhou SEG
Digital Plaza Investment and
Su Zhou Su Zhou --- 100.00%
Management establishment
Co., Ltd.
Xi'an Fengdong
New Town SEG
real estate Investment and
Times Square Xi’an Xi’an 100.00%
development establishment
Properties Co.,
Ltd.
Explanation for the reason why shareholding ratio is different from the ratio of voting power:
For Changsha SEG Development Co., Ltd. (originally named Changha Emerging Development Co., Ltd.), the
current capital stock structure is as follows: The company holds 46% of shares and is the largest shareholder. In
addition, according to the Memorandum of Cooperation Concerning the Stock Equity Project of Joint Investment
and Acquisition of Changsha Emerging Development Co., Ltd. signed by and between the Company and Hong
Kong Jinhong Group on October 8th, 2008, Hong Kong Jinhong Group agreed to give up the 5% of voting power,
which would be exercised by the Company, and the voting power ratio of the company becomes 51%. Half of the
directors, the Chairman of the Board, the General Manager, the Chief Financial Officer and the management team
of Changsha SEG Development Co., Ltd are all dispatched by the Company. Therefore, the Company has
obtained the control of Changsha SEG Development Co., Ltd.
Basis where a company holds half or less than half of voting power but still controls the invested company and a
company holds more than half of voting power but does not control the invested company:
Half of the directors, the Chairman of the Board, the General Manager, the Chief Financial Officer and the
management team of Suzhou SEG Electronics Market Management Co., Ltd are all dispatched by the Company that
actually controls the operation of Suzhou SEG, so Suzhou SEG was included into the consolidation scope.
(2) Important non-wholly-owned subsidiaries
Unit: Yuan
Current dividends Minority shareholders'
Equity proportion of Current gains of losses
Company name distributed to minority equity balance at the end
minority shareholders of minority shareholders
shareholders of the period
Shenzhen SEG Credit
46.98% 5,837,773.70 89,751,270.26
Co., Ltd.
Changsha SEG
54.00% 710,622.95 59,741,139.05
Development Co., Ltd.
Shenzhen SEG Baohua
Enterprise Development 33.42% 4,543,458.93 6,177,600.00 30,563,497.59
Co., Ltd.
(3) Main financial information of important non-wholly-owned subsidiaries
Unit: Yuan
Closing balance Opening balance
Company
Current Non-current Total Current Non-current Total Current Non-curre Total Current Non-current Total
name
assets: assets assets liabilities liabilities liabilities assets: nt assets assets liabilities liabilities liabilities
Shenzhen
SEG 40,446,6 494,287,044 534,733 340,563,2 340,563, 42,768,1 452,858,3 495,626, 313,882, 313,882,1
Credit 73.24 .21 ,717.45 82.67 282.67 50.12 89.93 540.05 188.08 88.08
Co., Ltd.
Changsha
SEG
10,711,6 135,108,204 145,819 18,773,11 16,415,021.5 35,188,1 4,480,35 139,281,9 143,762, 17,477,0 16,969,484. 34,446,52
Develop
76.27 .31 ,880.58 9.88 1 41.39 9.54 31.91 291.45 36.50 39 0.89
ment Co.,
Ltd.
Shenzhen
SEG
Baohua
81,853,6 53,789,731. 135,643 44,075,15 44,191,2 84,928,2 56,270,65 141,198, 44,740,4 44,856,48
Enterprise 116,059.41 116,059.41
56.14 32 ,387.46 2.68 12.09 55.69 3.64 909.33 24.26 3.67
Develop
ment Co.,
Ltd.
Unit: Yuan
Amount incurred in the current period Amount incurred in the previous period
Total Cash flow of Total Cash flow of
Company name Operating Operating
Net profit comprehensive operating Net profit comprehensive operating
income income
income activities income activities
Shenzhen SEG
48,064,462.25 12,426,082.81 12,426,082.81 -33,638,954.38 21,129,338.87 9,420,497.68 9,420,497.68 24,671,946.86
Credit Co., Ltd.
Changsha SEG
Development 11,490,331.21 1,315,968.42 1,315,968.42 6,346,992.49 10,653,751.12 306,987.31 306,987.31 5,255,193.02
Co., Ltd.
Shenzhen SEG
Baohua
Enterprise 42,445,648.66 13,595,029.71 13,911,794.97 9,334,694.27 37,623,155.78 12,988,755.20 12,915,935.60 14,977,776.96
Development
Co., Ltd.
2. Equity in cooperative arrangements or joint ventures
(1) Important cooperative enterprises or joint ventures
Shareholding percentage Accounting
treatment
Name of
method for
cooperative Main place of Place of Nature of
investment at
enterprise or business registration business Direct Indirect
cooperative
joint venture
enterprise or
joint venture
Shenzhen
Huakong SEG Shenzhen Shenzhen Manufacturing 20.00% Equity method
Co., Ltd.
Shanghai SEG
Electronics Shanghai Shanghai Service industry 35.00% Equity method
Market Co., Ltd.
(2) Main financial information of important cooperative enterprises
Unit: Yuan
Closing balance/current amount Opening balance/previous amount
Shanghai SEG Shanghai SEG
Shenzhen Huakong SEG Shenzhen Huakong SEG
Electronics Market Co., Electronics Market Co.,
Co., Ltd. Co., Ltd.
Ltd. Ltd.
Current assets: 337,843,098.02 27,447,238.89 158,732,194.56 30,650,791.15
Non-current assets 299,233,325.90 160,921.39 262,002,634.60 37,816.64
Total assets 637,076,423.92 27,608,160.28 420,734,829.16 30,688,607.79
Current liabilities 26,509,946.68 18,540,148.04 303,841,418.53 20,289,991.11
Non-current liabilities 593,568.91 240,573.59 456,054.73
Total liabilities 27,103,515.59 18,780,721.63 304,297,473.26 20,289,991.11
Minority shareholders'
24,439,321.38 28,983,272.09
equity
Shareholders' equity
attributable to the parent 585,533,586.95 8,827,438.65 87,454,083.81 10,293,666.63
company
Net asset shares
calculated based on 117,106,717.39 3,089,603.53 19,633,441.82 3,602,783.32
shareholding ratio
- Others 58,889,967.00 -62,727.66 58,889,967.01 -25,995.14
Book value for equity
investment in 175,996,684.39 3,026,875.87 78,523,408.83 3,576,788.18
cooperative enterprises
Fair value of equity
investment in
2,031,571,382.97 1,759,755,588.42
cooperative enterprises
with public offer
Operating income 16,994,189.98 1,282,610.27 24,122,428.29 17,207,347.90
Net profit -28,588,277.77 -1,571,178.03 -29,196,676.72 177,979.17
Total comprehensive
-28,588,277.77 -1,571,178.03 -29,196,676.72 177,979.17
income
Other descriptions
IX. Disclosure of Fair Value
1. Period-end fair value of assets and liabilities measured based on fair value
Unit: Yuan
Period-end fair value
Item Level-1 fair value Level-2 fair value Level-3 fair value
Total
measurement measurement measurement
(I) Persistent fair value
-- -- -- --
measurement
(II) Available-for-sale
976,996.30 976,996.30
financial assets
(2) Equity instrument
976,996.30 976,996.30
investment
II. Non-persistent fair
-- -- -- --
value measurement
X. Related Parties and Related Party Transactions
1. Information about parent company of the enterprise
Percentage of the Percentage of the
Name of parent Company's shares Company's voting
Place of registration Nature of business Registered Capital
company held by the parent shares held by the
company parent company
Shenzhen SEG Comprehensive
Shenzhen 135,542.00 30.24% 30.24%
Group Co., Ltd. business
The final controlling party of the enterprise is Shenzhen State-owned Assets Supervision and Administration
Commission.
2. Information about subsidiaries of the Company
For information about subsidiaries of the Company, see Note 8 (1).
3. Information about the Company’s joint ventures and associates
For details about important cooperative enterprises or joint ventures of the enterprise, see Note 8 (2).
4. Information about other related parties
Name of other related parties Relationship between other related parties and the Company
Shenzhen SEG Property Development Co., Ltd. Subsidiary of shareholders
Name of other related parties Relationship between other related parties and the Company
Shenzhen SEG Group Service Co., Ltd Subsidiary of shareholders
Shenzhen SEG Computers Co., Ltd Subsidiary of shareholders
Shenzhen SEG Hi-tech Industrial Co., Ltd. Subsidiary of shareholders
Shenzhen SEG Real Estate Investment Co., Ltd. Subsidiary of shareholders
Shenzhen SEG Business Operation Co., Ltd. Subsidiary of the controlling shareholder
5. Information about related transactions
(1) Related trusted management, contracting and mandatory administration and initial contracting
Trusted management/contracting of the Company:
Unit: Yuan
Confirmed trust
Beginning date of Ending date of Pricing basis for profit/
Trustor/ Trustee/ Type of trusted/
the trust/ the trust/ trust profit/ contracting profit
Contractee Contractor contracted assets
contracting contracting contract profit in the report
period
SEG
Shenzhen SEG Shenzhen SEG Trusteeship
Communications Feb 1, 2015 Jan 31, 2016 0.00
Group Co., Ltd. Co., Ltd. Agreement
Market
(2) Information about leases between the Company and related parties
The Company serves as the leasee:
Unit: Yuan
Rental recognized in previous
Name of lessor Type of leased assets Rental recognized in this period
period
The warehouse with its area of
Shenzhen SEG Group Co., Ltd. 809.26 square meters on the 8th 310,587.00 293,100.00
floor of SEG Plaza
Information about associated lease
1. A subsidiary of the Company serves as the leasee:
Rental recognized in this Rental recognized in
Name of lessor Type of leased assets
period previous period
The 15th floor of SEG
Shenzhen SEG Business Operation Co.,
Plaza, with an area of 253,960.20 ---
Ltd.
687.01 square meters
Rental recognized in this Rental recognized in
Name of lessor Type of leased assets
period previous period
Total --- 253,960.20 ---
(3) Guarantee of related parties
The Company serves as the guarantor:
Unit: Yuan
Has the guarantee been
Warrantee Amount of guarantee Starting date Ending date
fulfilled?
Shenzhen SEG Credit
50,000,000.00 Oct. 27, 2014 Oct. 26, 2015 No
Co., Ltd.
(4) Lending/Borrowing of related parties
Unit: Yuan
Lending/Borrowing
Related party Starting date Due Date Remarks
amount
Borrowing
Shenzhen SEG Group Co.,
40,000,000.00 Dec 31, 2014 Jan 6, 2015
Ltd.
Shenzhen SEG Hi-tech
17,650,000.00 Dec 30, 2014 Jan 20, 2015
Industrial Co., Ltd.
Lending
(5) Remuneration of key managers
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Remuneration of key managers 132.46 150.36
6. Receivables and payables of related parties
(1) Receivables
Unit: Yuan
Closing balance Opening balance
Project name Related party
Book balance Bad debt provision Book balance Bad debt provision
Shenzhen SEG
Other accounts Property
12,325.00 12,325.00
receivable Development Co.,
Ltd.
Other accounts Shenzhen SEG
109,358.00 214,491.60
receivable Group Co., Ltd.
(2) Payables
Unit: Yuan
Project name Related party Period-end book balance Period-end book balance
Dividends payable Shenzhen SEG Computers Co., Ltd 662,310.00 543,510.00
Other payables Shenzhen SEG Group Co., Ltd. 40,000,000.00
Shenzhen SEG Property Development
Other payables
Co., Ltd.
Shenzhen SEG Hi-tech Industrial Co.,
Other payables 17,653,186.81
Ltd.
XI. Commitments and/or Matters
1. Important commitments
Important commitment on the balance sheet date
(1) Signed lease contract that is being performed or will be performed and minimum rental to be paid in the next
year
Shenzhen SEG Xi’an Shenzhen SEG
Xi’an SEG Suzhou SEG Electronics Hairong SEG Electronics Wujiang SEG
Remaining lease
Electronics Electronics Market Market Electronics Market Electronics
term
Market Co., Ltd. Co., Ltd. Management Market Co., Management Co., Market Co., Ltd.
Co., Ltd. Ltd. Ltd.
Within one year
(including one 12,875,000.00 16,024,907.88 4,912,813.79 --- --- ---
year)
Shenzhen SEG Xi’an Shenzhen SEG
Xi’an SEG Suzhou SEG Electronics Hairong SEG Electronics Wujiang SEG
Remaining lease
Electronics Electronics Market Market Electronics Market Electronics
term
Market Co., Ltd. Co., Ltd. Management Market Co., Management Co., Market Co., Ltd.
Co., Ltd. Ltd. Ltd.
Above one year but
within two years
13,125,000.00 16,024,907.88 5,060,198.20 --- --- ---
(including two
years)
Above two years
but within three
13,375,000.00 16,234,383.80 5,212,004.15 --- --- ---
years (including
three years)
Over 3 years 48,750,000.00 157,211,677.96 15,137,455.15 --- --- ---
Total 88,125,000.00 205,495,877.52 30,322,471.29 Note *1 Note *2 Note *3
(Continued)
Nanning SEG Shunde SEG
Remaining lease Wuxi SEG Electronics Suzhou SEG Digital Plaza
Electronics Market Electronics Market
term Market Co., Ltd. Management Co., Ltd.
Management Co., Ltd. Management Co., Ltd.
Within one year
6,500,000.00 4,320,000.00 --- 13,145,482.73
(including one year)
Above one year but
within two years 8,000,000.00 4,800,000.00 --- 13,054,290.12
(including two years)
Above two years but
within three years
8,000,000.00 5,040,000.00 --- 13,403,893.21
(including three
years)
Over 3 years 64,000,000.00 43,087,508.73 --- 82,632,739.96
Total 86,500,000.00 57,247,508.73 Note *4 122,236,406.02
Note *1: Under the cooperation agreement signed by and between both parties, Xi’an Hairong SEG Electronics
Market Co., Ltd. pays the rental according to 70% of profits of the electronics market. Therefore, the amount of
rental in the future is uncertain.
Note *2: The rental of Shenzhen SEG Electronics Market Management Co., Ltd. is adjusted according to the CPI.
Therefore, the amount of rental in the future is uncertain.
Note *3: Under the cooperation agreement signed by and between both parties, Wujiang SEG Electronics Market
Co., Ltd. pays the rental according to 70% of pretax profits of the electronics market. Therefore, the amount of
rental in the future is uncertain.
Note *4: Wuxi SEG Electronics Market Co., Ltd. is exempted from the rental within the three years before
opening of the company and pays the rental in the fourth year according to 70% of the pre-tax profits of the
electronics market. Therefore, the amount of rental in the future is uncertain.
Except the preceding commitments, the Company has not significant commitments that shall be disclosed or have
not been disclosed by June 30, 2015.
XII. Other significant matters
1. Others
(1) Purchase of financial products with idle funds
On the second shareholders meeting held on July 21, 2014, the Proposal on Purchase of Financial Products Using
Idle Funds of the Company was passed, which allows the company and its subsidiaries to invest and manage
wealth by using idle funds of not more than RMB 1 billion Yuan.
As of June 30, 2015, the amount of financial products purchased by the Company and its subsidiaries is as
follows:
Unit: RMB 10,000 Yuan
Shenzhen SEG Nantong SEG
Wujiang SEG Wuxi SEG Xi’an Hairong SEG
Shenzhen Baohua Enterprise Times Square
Company name Electronics Electronics Electronics Market
SEG Co., Ltd. Development Co., Development
Market Co., Ltd. Market Co., Ltd. Co., Ltd.
Ltd. Co., Ltd.
Amount 11,050.00 1,800.00 5,800.00 600.00 1,130.00 1,700.00
Continued:
Shenzhen SEG Xi’an SEG Changsha SEG
Company Shenzhen SEG Credit
Electronics Market Electronics Market Development Total
name Co., Ltd.
Management Co., Ltd. Co., Ltd. Co., Ltd.
Amount 31.13 280.00 1,700.00 650.00 24,741.13
XIII. Notes on Main Items in Financial Statements of the Parent Company
1. Accounts receivable
(1) Accounts receivable disclosed by type
Unit: Yuan
Closing balance Opening balance
Category Book balance Bad debt provision Book Book balance Bad debt provision Book
Amount Percentage Amount Percentage value Amount Percentage Amount Percentage value
Accounts
receivable with a
significant amount
7,163,87 7,163,87 7,163,87 7,163,87
individually, for 77.29% 100.00% 77.29% 100.00%
6.44 6.44 6.44 6.44
which bad debt
provision is
separately accrued
Accounts
receivable with an
insignificant
amount 2,105,30 2,105,30 2,105,30 2,105,30
22.71% 100.00% 22.71% 100.00%
individually, for 6.44 6.44 6.44 6.44
which bad debt
provision is
separately accrued
9,269,18 9,269,18 9,269,18 9,269,18
Total 100.00% 100.00% 100.00% 100.00%
2.88 2.88 2.88 2.88
Accounts receivable with a significant amount individually, for which bad debt provision is separately accrued at the end of period:
√ Applicable □ Not applicable
Unit: Yuan
Closing balance
Accounts receivable (by
Accounts
organization) Bad debt provision Percentage Reason for provision
receivable
The accounts receivable are
uncollectible because they have
Jiangsu Unicom 3,092,011.09 3,092,011.09 100.00%
been outstanding for more than
five years.
The accounts receivable are
Shenzhen Liyuanshun uncollectible because they have
1,906,865.35 1,906,865.35 100.00%
Industrial Co., Ltd. been outstanding for more than
five years.
The accounts receivable are
Shanghai Tianci Industrial uncollectible because they have
899,000.00 899,000.00 100.00%
Co., Ltd. been outstanding for more than
five years.
Zhejiang Finance Information The accounts receivable are
786,000.00 786,000.00 100.00%
Paging Center uncollectible because they have
Closing balance
Accounts receivable (by
Accounts
organization) Bad debt provision Percentage Reason for provision
receivable
been outstanding for more than
five years.
The accounts receivable are
Sichuan Huiyuan Electronics uncollectible because they have
480,000.00 480,000.00 100.00%
Co., Ltd. been outstanding for more than
five years.
Total 7,163,876.44 7,163,876.44 -- --
Accounts receivable in the combination, for which bad debt provision was accrued by the aging analysis method：
□ Applicable √ Not applicable
Accounts receivable in a combination, for which bad debt provisions are made using the Percentage of Total Accounts Receivable
Outstanding method
□ Applicable √ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
(2) Accounts receivable with top 5 closing balance collected based on arrears party
Percentage in the total amount of Accrued bad debt
Name of debtor Closing balance
accounts receivable provision
Jiangsu Unicom 3,092,011.09 33.36 3,092,011.09
Shenzhen Liyuanshun Industrial
1,906,865.35 20.57 1,906,865.35
Co., Ltd.
Shanghai Tianci Industrial Co., Ltd. 899,000.00 9.70 899,000.00
Zhejiang Finance Information
786,000.00 8.48 786,000.00
Paging Center
Sichuan Huiyuan Electronics Co.,
480,000.00 5.18 480,000.00
Ltd.
Total 7,163,876.44 77.29 7,163,876.44
2. Other receivables
(1) Other receivables disclosed by type
Unit: Yuan
Closing balance Opening balance
Category Book balance Bad debt provision Book Book balance Bad debt provision Book
Amount Percentage Amount Percentage value Amount Percentage Amount Percentage value
Other receivables
with a significant
amount
8,530,27 8,530,27 8,530,27 8,530,27
individually, for 1.54% 100.00% 1.96% 100.00%
6.35 6.35 6.35 6.35
which bad debt
provision is
separately accrued
Other receivables
where bad debt
provision is 410,45
527,600, 527,598 410,454,
accrued according 95.36% 1,200.00 0.00% 94.12% 1,200.00 0.00% 3,048.0
106.07 ,906.07 248.03
to credit risk 3
feature
combination
1,269,83 1,268,6 1,168,21 1,167,0
Portfolio 1 0.23% 1,200.00 0.09% 0.27% 1,200.00 0.1%
1.71 31.71 9.48 19.48
409,28
526,330, 526,330 409,286,
Portfolio 2 95.13% --- --- 93.85% --- --- 6,028.5
274.36 ,274.36 028.55
5
Other receivables
with an
insignificant
amount 17,118,3 17,118,3 17,118,3 17,118,3
3.09% 100.00% 3.92% 100.00%
individually, for 94.49 94.49 94.49 94.49
which bad debt
provision is
separately accrued
410,45
553,248, 25,649,8 527,598 436,102, 25,649,8
Total 100.00% 4.64% 100.00% 5.88% 3,048.0
776.91 70.84 ,906.07 918.87 70.84
3
Other receivables with a significant amount individually, for which bad debt provision is separately accrued
√ Applicable □ Not applicable
Unit: Yuan
Closing balance
Other receivables (by
Other accounts
company) Bad debt provision Percentage Reason for provision
receivable
The accounts receivable
are uncollectible because
Yangjiang Yuntong
8,530,276.35 8,530,276.35 100.00% they have been
Grease Co., Ltd.
outstanding for more
than five years.
Total 8,530,276.35 8,530,276.35 -- --
Among the combinations, accounts receivable for which bad debt provision is computed by aging method:
√ Applicable □ Not applicable
Unit: Yuan
Closing balance
Aging
Other accounts receivable Bad debt provision Percentage
Sub-item within one year
1,263,831.71
Subtotal of the accounts with a
1,263,831.71
duration of less than 1 year
Over 3 years 6,000.00 1,200.00 20.00%
Total 1,269,831.71 1,200.00 0.09%
Description of basis for confirming the combination:
Other receivables in a combination, for which bad debt provisions are made using the Percentage of Total Receivables Outstanding
method
□ Applicable √ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
□ Applicable √ Not applicable
(2) Classification of other receivables by nature
Unit: Yuan
Nature of receivables Period-end book balance Period-end book balance
Receivables of related parties 524,888,899.98 408,087,205.17
Creditor’s right transfer cost 22,664,045.27 22,664,045.27
Revolving fund 754,397.50 790,404.70
Deposit and security deposit 1,496,544.42 1,247,233.78
Nature of receivables Period-end book balance Period-end book balance
Others 3,444,889.74 3,314,029.95
Total 553,248,776.91 436,102,918.87
(3) Other receivables with top 5 closing balance collected based on arrears party
Unit: Yuan
Percentage in the
total amount of Closing balance of
Name of debtor Nature of payables Closing balance Aging
closing balance of bad debt provision
other receivables
Nantong SEG Times
Square Development Loans and interests 413,166,505.83 Within 3 years 74.68%
Co., Ltd.
Shenzhen SEG
E-Commerce Co., Loans and interests 60,106,849.32 Less than one year 10.86%
Ltd.
Shenzhen SEG
Industrial Investment Loans and interests 47,088,490.03 Within four years 8.51%
Co., Ltd.
Yangjiang Yuntong Debt restructuring
8,530,276.35 Over 5 years 1.54% 8,530,276.35
Grease Co., Ltd. of SEG Orient
Shenzhen Lianjing Debt restructuring
5,697,287.51 Over 5 years 1.03% 5,697,287.51
Trade Co., Ltd. of SEG Orient
Total -- 534,589,409.04 -- 96.63% 14,227,563.86
3. Long-term equity investment
Unit: Yuan
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment in
269,983,526.24 269,983,526.24 299,983,526.24 299,983,526.24
subsidiaries
Investment in
cooperative
179,023,560.26 179,023,560.26 82,100,197.01 82,100,197.01
enterprises and
joint ventures
Total 449,007,086.50 449,007,086.50 382,083,723.25 382,083,723.25
(1) Investment in subsidiaries
Unit: Yuan
Current Current Accrued Closing balance
Invested organization Opening balance period period Closing balance impairment of impairment
increase decrease provision provision
Shenzhen SEG Baohua
Enterprise Development 20,512,499.04 20,512,499.04
Co., Ltd.
Shenzhen SEG Industrial
29,181,027.20 29,181,027.20
Investment Co., Ltd.
Changsha SEG
69,000,000.00 69,000,000.00
Development Co., Ltd.
Shenzhen SEG
Electronics Market 2,100,000.00 2,100,000.00
Management Co., Ltd.
Suzhou SEG Electronics
1,350,000.00 1,350,000.00
Market Co., Ltd.
Xi’an SEG Electronics
1,950,000.00 1,950,000.00
Market Co., Ltd.
Shenzhen SEG Credit
54,000,000.00 54,000,000.00
Co., Ltd.
Shenzhen SEG
15,300,000.00 15,300,000.00
E-Commerce Co., Ltd.
Shenzhen SEG
Electronics Market 20,000,000.00 20,000,000.00
Management Co., Ltd.
Xi’an Hairong SEG
Electronics Market Co., 1,530,000.00 1,530,000.00
Ltd.
Wujiang SEG Electronics
1,530,000.00 1,530,000.00
Market Co., Ltd.
Wuxi SEG Electronics
1,530,000.00 1,530,000.00
Market Co., Ltd.
Shunde SEG Electronics
Market Management Co., 6,000,000.00 6,000,000.00
Ltd.
Nanning SEG Electronics
Market Management Co., 8,000,000.00 8,000,000.00
Ltd.
Current Current Accrued Closing balance
Invested organization Opening balance period period Closing balance impairment of impairment
increase decrease provision provision
Nantong SEG Times
Square Development Co., 30,000,000.00 30,000,000.00
Ltd.
Suzhou SEG Digital
Plaza Management Co., 8,000,000.00 8,000,000.00
Ltd.
Xi'an Fengdong New
30,000,000.
Town SEG Times Square 30,000,000.00
00
Properties Co., Ltd.
30,000,000.
Total 299,983,526.24 269,983,526.24
00
(2) Investment in cooperative enterprises and joint ventures
Unit: Yuan
Increase/Decrease of the year
Investment
gains and Closing
Adjustment Issued
Invested Opening losses Other Accrued Closing balance of
Additional Negative of other cash
organization balance confirmed equity impairment Others balance impairment
investment investment comprehens dividends
under the changes provision provision
ive income or profits
equity
method
1. Cooperative enterprise
2. Joint venture
Shanghai
SEG
3,576,788. -549,912.3 3,026,875.
Electronics
18 1 87
Market Co.,
Ltd.
Shenzhen
Huakong 78,523,408 -4,342,943 101,816,21 175,996,68
SEG Co., .83 .63 9.19 4.39
Ltd.
82,100,197 -4,892,855 101,816,21 179,023,56
Subtotal
.01 .94 9.19 0.26
82,100,197 -4,892,855 101,816,21 179,023,56
Total
.01 .94 9.19 0.26
(3) Other descriptions
4. Operating revenue and operating cost
Unit: Yuan
Amount incurred in the current period Amount incurred in the previous period
Item
Income Cost Income Cost
Main business 66,577,264.42 44,695,244.80 67,615,859.10 40,521,511.25
Total 66,577,264.42 44,695,244.80 67,615,859.10 40,521,511.25
Other description:
5. Investment Income
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Long-term equity investment income by the
22,060,280.00 20,694,873.17
cost method
Long-term equity investment income by the
-4,892,855.94 -1,746,429.31
equity method
Investment income during the possession of
750,000.00
available-for-sale financial assets
Others 19,701,657.06 8,417,172.69
Total 37,619,081.12 27,365,616.55
XIV. Supplemental Information
1. Details on non-recurring gains and losses
√ Applicable □ Not applicable
Unit: Yuan
Item Amount Remarks
Gains and losses from disposal of
-177,731.11 Disposal loss of fixed assets
non-current assets
The main purpose is to obtain the loans
Government subsidies recorded into current with discounted interest from the
gains and losses (except those closely related Economic Promotion Bureau of Futian
with corporate business and enjoyed 223,828.12 District, Shenzhen, and the support fund
according to national standards or certain for SEG e-Commerce trading platform of
quota) Shenzhen Economy and Trade
Information Committee.
Item Amount Remarks
Transferred-back impairment provision for
accounts receivable, for which separate 400,000.00
impairment tests are carried out
Other non-operating income and expenses Payment for liquidated damages of
-215,906.84
except the above-mentioned items merchants
Less: Amount of affected income tax 35,945.98
Influenced amount of minority
-13,635.11
shareholders' equity
Total 207,879.30 --
An explanation shall be made with regard to the Company's considerations for defining non-recurring profit and loss according to the
Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring
Profit and Loss and the reason of classifying the non-recurring profit and loss listed in this announcement as recurring.
□ Applicable √ Not applicable
2. Return on equity and earnings per share
Earnings per share
Profit in report period Weighted average ROE Diluted EPS
Basic EPS (Yuan/Share)
(Yuan/Share)
Net profit attributable to common
2.55% 0.0445 0.0445
shareholders of the Company
Net profit attributable to common
shareholders of the Company after
2.55% 0.0442 0.0442
deduction of -recurring losses and
gains
3. Differences in accounting data under Chinese and overseas accounting standards
(1) The differences of net profit and net assets in this financial report calculated based on international and
Chinese accounting standards
□ Applicable √ Not applicable
(2) The differences of net profit and net assets in this financial report calculated based on overseas and
Chinese accounting standards
□ Applicable √ Not applicable
4. Others
Abnormalities on main items of the financial statements of the Company and notes on reasons
Percentage
Important item Closing balance Opening balance Reason for change
change (%)
Caused by repayment for matured debts
Monetary funds 156,272,010.47 383,056,680.70 -59.20 and increase of input for operating
business in the current period.
Caused by increase of rental of note
Notes receivable 170,000.00 84,618.08 100.90
settlement in the current period.
Caused by recovery of the land bidding
Other accounts receivable 44,545,199.45 95,366,156.27 -53.29
deposit in this period.
Caused by increase of development cost
Inventory 413,535,408.37 278,281,586.72 48.60
of SEG Nantong in this period.
Shenzhen Huakong SEG Co., Ltd.
issues stocks in a nondirective manner
Long-term equity at premium in this period and the
179,023,560.26 82,100,197.01 118.05
investment Company adds this item
correspondingly according to the equity
method.
Caused by construction of information
Construction in progress 216,000.00 --- ---
system not completed in this period
Caused by increase of expenditure in
Intangible assets 1,058,497.63 655,587.54 61.46
software purchase in this period.
Caused by carry-over of the electronics
market decoration engineering costs
Other non-current assets --- 4,655,063.54 -100.00
prepaid in the previous year and
completed in this period.
Caused by increase of bank loans in the
Short-term borrowing 325,000,000.00 189,246,687.38 71.73
previous year.
Decrease is caused due to goods
Accounts payable 95,811,903.31 200,129,651.92 -52.13 payment of SEG e-Commerce supply
chain business settlement in this period.
Some accrued payroll and bonus were
Payroll payable 10,503,337.50 18,858,843.33 -44.31
paid in this period.
Decrease is caused due to maturity of
short-term financing bonds issued by
Interest payable 85,722.22 10,295,250.65 -99.17
the headquarters and bank loans and
payment for loan interests withheld in
Percentage
Important item Closing balance Opening balance Reason for change
change (%)
the previous year.
Caused by non-payment of dividends
Dividends payable 3,240,318.18 1,717,882.74 88.62 distributed by subsidiaries in this
period.
Caused by payment of the parent
Other current liabilities 250,000,000.00 -100.00 company for the short-term financing
principal.
Caused by increase of market value of
Other comprehensive
442,719.36 231,817.05 90.98 Youhao Group’s stocks held in this
income
period.
Caused by acquisition of net profits that
Undistributed profits 41,205,933.02 6,299,799.41 554.08 belong to the parent company in this
period.
Caused by increase of expenditure in
Interest expenses 3,159,048.64 1,693,472.23 86.54
interests due to increase of loans.
Caused by increase of bank loans and
Financial cost 843,057.23 388,862.46 116.80 issuance of short-term financing bonds
in this period.
Caused by increase of the loan scale and
Loss from asset
6,713,966.89 -288,507.28 loan impairment provision in this
impairment
period.
Caused by decrease of income from
Investment income 5,451,963.64 11,731,540.84 -53.53 investment recognized according to the
equity method in this period.
Caused by liquidated damaged paid by
Nanning SEG Electronics Market
Non-operating expenses 815,788.94 131,965.13 518.19
Management Co., Ltd. to merchants in
this period.
