Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Stock code: 000058, 200058 Stock abbreviation: SHEN SEG、SHEN SEG B Notice No.: 2016-074
Shenzhen SEG Co., Ltd.
2016 Semi-annual Report
August 2016
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Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Chapter 1 Important Notice, Contents, and Definitions
The Board of Directors, the Board of Supervisors, the directors, the supervisors, and the
senior executives guarantee that the semi-annual report is authentic, accurate, and
complete and that it has no false records, misleading statements or major omissions, and
they undertake joint and several legal liabilities.
All of the directors have attended this board meeting reviewing the semi-annual report.
Shenzhen SEG Co., Ltd. does not plan to distribute any cash dividends and bonus shares
or to convert accumulated funds into share capital.
Chairman of the Board Wang Li, the Person in charge of accounting Liu Zhijun and the
Responsible person of the accounting institution (accountant in charge) Ying Huadong
hereby declare that the Financial Statements enclosed in this semi-annual report are true,
accurate and complete.
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Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
CONTENTS
Chapter 1 Important Notice, Contents, and Definitions ..........................................................................2
Chapter 2 Company Profile ........................................................................................................................6
Chapter 3 Summary of Accounting Data and Financial Indexes ............................................................7
Chapter 4 Report of the Board of Directors ..............................................................................................9
Chapter 5 Important Matters ...................................................................................................................35
Chapter 6 Changes in Share Capital and Information on Shareholders .............................................90
Chapter 7 Preferred Shares ......................................................................................................................94
Chapter 8 Information on Directors, Supervisors, Senior Executives ..................................................95
Chapter 9 Financial Report ......................................................................................................................96
Chapter 10 Documents Available for Reference ...................................................................................191
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Definitions
Definition refers to Description
This Company, the Company refers to Shenzhen SEG Co., Ltd.
Shenzhen SEG Group Co., Ltd. refers to Shenzhen SEG Group Co., Ltd.
Huakong SEG refers to Shenzhen Huakong SEG Co., Ltd.
SEG Baohua refers to Shenzhen SEG Baohua Enterprise Development Co., Ltd.
Xi'an SEG refers to Xi'an SEG Electronics Market Co., Ltd.
Suzhou SEG refers to Suzhou SEG Electronics Market Co., Ltd.
Xi'an Hairong SEG refers to Xi'an Hairong SEG Electronics Market Co., Ltd.
Nanjing SEG refers to Shenzhen SEG Nanjing Electronics Market Management Co., Ltd.
Shanghai SEG refers to Shanghai SEG Electronics Market Management Co., Ltd.
Nantong SEG refers to Nantong SEG Times Square Management Co., Ltd.
Changsha SEG refers to Changsha SEG Development Co., Ltd.
Mellow Orange Hotel refers to Shenzhen Mellow Orange Business Hotel Management Co., Ltd
Longgang SEG refers to Shenzhen SEG Electronics Market Management Co., Ltd.
SEG Industry refers to Shenzhen SEG Industrial Investment Co., Ltd.
SEG E-Commerce refers to Shenzhen SEG E-Commerce Co., Ltd.
SEG Credit refers to Shenzhen SEG Credit Co., Ltd.
SEG Navigations refers to Shenzhen SEG GPS Scientific Navigations Co., Ltd.
Shunde SEG refers to Foshan Shunde SEG Electronics Market Management Co., Ltd.
Wuxi SEG refers to Wuxi SEG Electronics Market Co., Ltd
Nanning SEG refers to Nanning SEG Digital Plaza Management Co., Ltd.
Yantai SEG refers to Yantai SEG Times Square Development Co., Ltd.
Suzhou SEG Digital refers to Suzhou SEG Digital Plaza Management Co., Ltd.
Xi'an Fengdong SEG refers to Xi'an Fengdong New Town SEG Times Square Properties Co., Ltd.
Nantong SEG Operation Company refers to Nantong SEG Commercial Operation Management Co., Ltd.
SEG Intelligent refers to Suzhou SEG Intelligent Technology Co., Ltd.
SEG Investment refers to Shenzhen SEG Investment Management Co., Ltd.
SEG CPARK refers to SEG International Maker Product Exhibition and Promotion Center
Shenzhen SEG Longyan New Energy Application and Development Co.,
SEG Longyan refers to
Ltd.
Exchange Center refers to China International Consumer Electronics Exhibition/Exchange Center
Wangyu Technology refers to Shanghai Wangyu Information Technology Co., Ltd.
SEG Maker refers to Shenzhen SEG Maker Co., Ltd. is a wholly-owned subsidiary of SEG
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Definition refers to Description
Group.
Tencent refers to Shenzhen Tencent Computer System Co., Ltd.
Fujian Babycat Animation Company refers to Fujian Babycat Animation Technology Co., ltd.
Tmall Company refers to Zhejiang Tmall Technology Co., Ltd.
Futian Investment refers to Shenzhen Futian Investment Co., Ltd.
Shum Yip refers to Shum Yip Land Company Limited
An integrated information service platform for electronics market
SEG Universal refers to management with the functions of access control management,
micro-payment, query system and information distribution
State-owned Assets Supervision and Administration Commission of the
Shenzhen SASAC refers to
People's Government of Shenzhen Municipality
CSRC refers to China Securities Regulatory Commission
Shenzhen Securities Regulatory Bureau of China Securities Regulatory
Shenzhen Securities Regulatory Bureau refers to
Commission
Articles of Association refer to The Articles of Association of Shenzhen SEG Co., Ltd.
Unless otherwise specified, the amount referred
refers to Amount in CNY
to in the report
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Chapter 2 Company Profile
I. Company profile
Stock abbreviation SHEN SEG, SHEN SEG B Stock code 000058, 200058
Changed stock abbreviation (if any) None
Listed on Shenzhen Stock Exchange
Company name in Chinese 深圳赛格股份有限公司
Company name in Chinese (if any) 深赛格
Company name in English (if any) SHENZHEN SEG CO., LTD.
Company name abbreviations in
None
English (if any)
Legal representative Wang Li
II. Contact information
Secretary of the Board of Directors Securities affairs representative
Name Zheng Dan Zhang Xin
31/F, Tower A, the Stars Plaza, Huaqiang Road 31/F, Tower A, the Stars Plaza, Huaqiang Road
Contact address
(N), Futian District, Shenzhen (N), Futian District, Shenzhen
Phone 0755-83747939 0755-83747939
Fax 0755-83975237 0755-83975237
E-mail segcl@segcl.com.cn segcl@segcl.com.cn
III. Other information
1. Contact information of the Company
Whether the registered address, office address, zip code, website, and e-mail address of the Company are changed in the report period
□ Applicable √ Not applicable
No changes of the registered address, office address, zip code, website and e-mail address of the Company in the report period, please refer
to the 2015 Annual Report for details.
2. The place where the information is disclosed and filed
Whether the information disclosure and filing site are changed in the report period
□ Applicable √ Not applicable
The newspaper specified by the Company to disclose information, the website specified by CSRC to publish the semi-annual report and the
site for filing the semi-annual report are not changed in the report period. Please refer to 2015 Annual Report for details.
3. Change of the registration information
Whether the registration information is changed in the report period
□ Applicable √ Not applicable
The registration date and locale, license registration number of enterprise legal person, tax registration number and organization code are not
changed in the report period. Please refer to 2015 Annual Report for details.
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Chapter 3 Summary of Accounting Data and Financial Indexes
I. Major accounting data and financial indexes
Are retrospective adjustments made to previous financial statements due to accounting policy changes or accounting errors?
□ Yes √ No
Amount of the same period of Year-on-year
Amount of the report period
the previous year increase/decrease
Operating revenue (Yuan) 362,673,236.85 374,555,135.61 -3.17%
Net profit attributable to shareholders of the
26,856,270.42 34,906,133.61 -23.06%
listed company (Yuan)
Net profit attributable to shareholders of the
listed company after deduction of 28,696,459.47 34,698,254.31 -17.30%
non-recurring gains and losses (Yuan)
Net cash flow arising from operating activities
-99,314,028.40 -98,587,833.62 -1.08%
(Yuan)
Basic EPS (Yuan/Share) 0.0342 0.0445 -23.15%
Diluted EPS (Yuan/Share) 0.0342 0.0445 -23.15%
Weighted average ROE 1.82% 2.55% -0.73%
Amount at end of the report Amount at end of the previous Year-on-year
period year increase/decrease
Total assets (Yuan) 2,479,696,060.50 2,614,660,524.37 -5.16%
Net assets attributable to shareholders of the
1,478,243,069.23 1,475,126,229.16 0.21%
listed company (Yuan)
II. Differences of accounting data under Chinese and overseas accounting standards
1. Differences in net profits and net assets reported in the financial statements disclosed under
international accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
In the report period, the Company's net profits and net assets have no differences in the financial report disclosed based on both the
international and the Chinese accounting standards.
2. Differences in net profits and net assets reported in the financial statements disclosed under
overseas accounting standards and Chinese accounting standards
□ Applicable √ Not applicable
In the report period, the Company's net profits and net assets have no differences in the financial report disclosed based on both the
international and the Chinese accounting standards.
III. Items and amount of non-recurring gains and losses:
√ Applicable □ Not applicable
Unit: Yuan
Item Amount Remarks
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Item Amount Remarks
Gains and losses on disposal of non-current assets (including the
-9,316.22 Disposal loss of fixed assets
write-off of assets depreciation reserves)
The main purpose is to obtain the special
awards for service industry development
Government subsidies included in current gains and losses (except from Wujiang Finance Bureau in Suzhou
those closely related with corporate business and enjoyed according to 101,608.00 city, and the support fund for SEG
national standards or certain quota) e-Commerce trading platform of Shenzhen
Economy and Trade Information
Committee.
Among which payment for compensation of
Nanning SEG lawsuit of 2.7 million Yuan
Other non-operating income and expenses except the above-mentioned
-2,432,788.76 was drawn complementarily. Others are
items
payments for liquidated damages of
merchants.
Less: Amount of affected income tax -629,774.56
Amount of influence of minority shareholders' equity (after tax) 129,466.63
Total 184,810.94 --
An explanation shall be made with regard to the Company's considerations for defining non-recurring profit and loss according to the
Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profit
and Loss and the reason of classifying the non-recurring profit and loss listed in this announcement as recurring.
□ Applicable √ Not applicable
In the report period, it does not happen that the Company defines the non-recurring profit and loss items defined or listed by Interpretive
Bulletin No. 1 on Information Disclosure by Companies Publicly Issuing Securities - Non-recurring Gains and Losses as recurring profit and
loss items.
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Chapter 4 Report of the Board of Directors
I. Overview
In the first half of 2016, under the pressure of slowdown of domestic macro-economic development and intensified
market competition, the Company actively expanded various businesses via inner innovation, external expansion and
alliance with other giants. During the report period, the Company carries out various businesses following the policy of
"transformation, innovation and development". In the report period, the total operating income of the Company
amounted to RMB 412,250,000, decreased by 3.05% over the same period of last year. The total profit of the Company
amounted to RMB 66,260,000, decreased by 8.22% over the same period of last year. Main reasons for decrease of gross
revenue and total profit from corresponding period of last year: (1) Substantial decrease of operating revenue from
business of SEG industrial trade. (2) Decrease of operating revenue from Shenzhen SEG, Nanjing SEG and Longgang
SEG Electronics Markets due to a drop in both of occupancy rate and rental price. (3) Revenue decrease due to business
shrinkage of SEG E-commerce which is about to be restructured. (4) The transformation & upgrade business in
electronics market is in incubation period and has not generated any income.
II. Analysis of main business
The main business of the Company includes the development and operation of the specialized electronics market and the
supporting projects, property lease service, trade and channel service, e-commerce, and value-added microcredit service,
and hotel service and so on.
(1) Operation of the electronics market (including other relevant business such as the marker platform and
Internet+ service and so on)
With the rapid development of the internet and mobile internet, the growing popularity of the terminal service, the
formation of oligopoly in the e-commerce platform, and the vertical segments of the e-commerce market, the physical
electronics market industry is impacted.
Facing fierce market competition and the impact of new business models, the Company is dedicated to user value,
integrates resources, further expands the industrial chain, enriches the industry, builds a multi-channel profit model,
promotes transformation and upgrading of the existing services, explores new business development models, and
continuously improves the operating capacity and creativity of the electronics market.
In the report period, the Company has established strategic cooperation with Taobao and Tmall to build online and
offline service platforms. The Company has also established strategic cooperation with Wangyu Technology and Fujian
Babycat, aiming to break through simple commercial platform operation, gets involved in content production and
operation, and build an integrated platform service operator.
During the report period, the Company signed strategic cooperation agreement with Tencent whereby both parties will
utilize their respective platform and resources advantages for strategic cooperation with an aim to jointly build
comprehensive entrepreneur service platform, hardware exhibition & sales platform of key area of cooperation and
hardware laboratory platform of practical innovation services, setting up entrepreneur incubation service benchmark in
China integrating both of hardware and software. The Company has signed strategic cooperation agreement with Tmall
Company whereby both parties will carry out strategic cooperation on product, activities, marketing, media promotion,
and resources complementation. SEG Maker Product Collection Company has attracted multiple international and
domestic famous brands, makers, and innovative products to settle, aggregated over 500 brands, held over 30 road shows,
academic exchanges, and product releases, and served government leaders, industrial and enterprise representatives for
over 50 times, gaining high recognition and creating widespread influences and good social demonstration effects.
In the report period, the total operating income from the electronics market amounted to RMB 148,030,000, decreased
by 6.60% over the same period of last year. The total profit from the electronics market amounted to RMB 40,860,000,
decreased by 8.77% over the same period of last year. Main reason for decrease: under the effect of continuous
deterioration of external economic environment and intensified industry competition, the electronics market places in
certain regions experienced decrease in operating revenue and total profit due to rent decrease and vacancy rate increase.
(2) Property lease
The property leasing service of the headquarters and the subsidiary SEG Baohua (holding 66.58% of shares) continues to
increase steadily.
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The Company managed to maintain the leasing rate above 98% through effective management measures including
improving property management and service quality, controlling costs and expenses, and adjusting investment-attraction
strategy.
In the report period, the total operating income from the property leasing service amounted to RMB 36,400,000,
decreased by 2.62% over the same period of last year. The profit from the property leasing service amounted to RMB
8,640,000, decreased by 1.37% over the same period of last year.
(3) IT product channel retail terminal business
In the report period, the overall operating result of Shenzhen SEG Industrial Investment Co., Ltd. witnesses obvious
decline. Domestic IT retail market remained sluggish. Under the influence of the Chinese New Year holidays in Q1, the
upstream and downstream partners encountered business stagnation. As a result, SEG partners lagged capital returns, and
cash flow was slow, which directly influenced the operating income of the Company. In the report period, the Company
invested in and founded SEG Intelligent Technology Co., Ltd., mainly developing and expanding intelligent and
engineering projects and acting as an agent for communication retail brands.
In the report period, the total operating income from the channel business amounted to RMB 161,700,000, increased by
7.88% over the same period of last year, mainly due to the newly-added channel business of SEG Intelligent Technology
Co., Ltd.
(4) Microcredit business
SEG Credit, a subsidiary of the Company (holding 53.02% of shares) ran well in the report period, its economic
indicators rose sharply on the year-on-year basis. The Company has achieved success in the warehouse receipt collateral
loan. Adapted to market changes and customer demands, the Company continuously explored new credit models, and
tried the goods collateral loan model on the basis of risk control.
In the report period, the total operating income from the microcredit business amounted to RMB 49,580,000, increased
by 3.16% over the same period of last year. The total profit from the microcredit business amounted to RMB 20,250,000,
increased by 23.6% over the same period of last year. The main cause for increase is that new loans increased on a
year-on-year basis.
(5) E-Commerce business
On July 21, 2015, the 24th interim meeting of the 6th Board of Directors approved the Proposal on Transfer of 51% of
Equities of Shenzhen SEG E-Commerce Co., Ltd. The audit and assessment reference date for equity transfer was March
31, 2015. Due to outstanding debts between SEG E-Commerce and the Company, the equity transfer was not
implemented as scheduled. Now that SEG E-Commerce paid off the loan of RMB 60 million and fund possession cost to
the Company in April 2016, and State-owned Assets Supervision and Administration Commission of Shenzhen
Municipality approved the equity transfer, the 1st interim meeting of the 7th Board of Directors approved that the audit
and assessment reference data for transfer of 51% of equities of Shenzhen SEG E-Commerce Co., Ltd. held by the
Company was changed to April 30, 2016. The Company will continue to push forward the equity transfer. Audit and
assessment work is in progress, and the Company will perform the information disclosure obligation based on progress.
Year-on-year changes of the main financial data
Unit: Yuan
The same period of the Year-on-year
The report period Reason for change
previous year increase/decrease (%)
Operating income 362,673,236.85 374,555,135.61 -3.17%
Operating cost 320,996,877.99 317,303,931.44 1.16%
Sale expenses 818,331.16 941,405.12 -13.07%
Management expenses 15,716,402.51 16,004,563.26 -1.80%
Financial cost 755,340.12 843,057.23 -10.40%
Income tax 22,038,716.72 20,121,370.92 9.53%
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The same period of the Year-on-year
The report period Reason for change
previous year increase/decrease (%)
Increase in development
expenses of new energies etc.
R&D investment 127,447.60 20,000.00 537.24%
projects during the report
period
Net cash flow from
-99,314,028.40 -98,587,833.62 1.08%
operating activities
Net cash flow from investing
64,506,556.17 76,375,411.91 -15.54%
activities
1. Loans of the Company's
decreased compared to the
corresponding period of last
year during the report period.
Decrease in cash received
from financing activities. 2.
The Company repaid 250
Net cash flow arising from
-97,411,220.51 -204,572,249.79 -52.38% million Yuan of bonds during
financing activities
the corresponding period of
last year, and there is no
record of this cash outflow
during this period. Cash paid
for financing activities
decreased significantly
compared to the last year.
Net increase in cash and Cash flow from financing
-132,218,674.94 -226,784,670.23 -41.55%
cash equivalents activities:
Major changes occur in the profit structure or the profit sources of the Company in the report period.
□ Applicable √ Not applicable
No major changes occur in the profit structure or the profit sources of the Company in the report period.
The prospectus, fund-raising notes, and asset restructuring reports of the Company disclose the future development and plans proceeding in
the report period.
√ Applicable □ Not applicable
The Company launched a major assets restructuring program in November 2015. The Company's stocks (SHEN SEG
000058, SHEN SEG B 200058) were suspended from the early trading on November 04, 2015. During the stock
suspension, the Company and related parties actively pushed forward major assets restructuring, and regularly disclosed
progress notices. As of the date of the report, the Company has disclosed the major assets restructuring plan. See Plan of
Shenzhen SEG Co., Ltd. on Issue of Shares, Cash Purchase of Assets, and Supporting Fund Raising & Related
Transaction (Revised Draft) released on the Cninfo Website on February 25, 2016. The Company's stocks resumed from
the early trading on February 25, 2016. After trading resumption, the Company and related parties actively pushed
forward the relevant works of this major assets restructuring.
According to the major assets restructuring plan, based on integration of the existing resource platform, the Company
will promote mutual development with commercial real estate and maker platform, improve property value, establish an
O2O e-commerce platform, create a diversified SEG industry ecosystem, and build an industry-leading new SEG with
clearly-defined strategic positioning.
After restructuring, the Company intends to expand the maker ecology, cultural education, intelligent technology, sports
& entertainment, virtual experience, gaming, and financial services. Based on advantages in the specialized electronics
market and commercial real estate business and Huaqiangbei industrial cluster, the Company will give full play to the
resource allocation function. The Company will build the SEG maker center, SEG international maker product display
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and promotion center, SEG maker apartment, and maker funds, get deeply involved in the maker ecology industrial chain,
facilitating the maker group in basic hardware technologies, R&D and production support, and funding. The Company
will also interact with upstream and downstream manufacturers, promote capitalization and industrialization of
innovations, and marketization of new technologies and products, and invigorate innovative vitality of the market to
support and build a new maker business ecology integrating "experimental development + incubator + marketing +
supporting services", and promote business development. In addition, the Company will vitalize the existing specialized
electronics market, combine service advantages of the specialized electronics market and customer resources, make more
efforts to expand the electronic financial services, Internet e-commerce, supply chain financial service, intelligent
hardware, virtual interactive experience industries, optimize and integrate the business chain system, take consumer
experience as the carrier, utilize online and offline channels and resources, and carry out industrial upgrading.
The Company reviews and summarizes how the previously disclosed operation plan is progressed in the report
period.
In the first half of 2015, according to the Company's "transformation, innovation, and development" guideline for
management, the Company actively develops new business while maintaining the steady development of the existing
business. Driven by the capital and resources, the Company creates a multi-channel profit model and mainly implements
the following work in the report period:
(1) Accelerate transformation & upgrading, and construct an operation platform with SEG’s core competitiveness
Under the current situation of industry development, the physical electronics market has developed from the single type
of business to the direction of commercial complex integrating multiple businesses including electronics, science &
technology, culture, catering, entertainment etc., the experiential, interactive, social-type, and scene-type commercial
operation mode has become the industrial development mainstream of physical market. For this reason, the Company
will aggregate the above businesses and resources to expand to the mainstream type of business relating to electronics
industry and products, get involved in operation of certain contents from the single commercial platform, thus to build
multiple types of businesses including CARPARK exhibition, intelligence technology, electronic sports games, children
experience, culture education, forming the business pattern of modularization.
1. In the report period, the Company has established strategic cooperation with Wangyu Technology and Fujian Babycat,
aiming to break through simple commercial platform operation, get involved in content production and operation, and
build an integrated platform service operator. During the report period, the Company signed Contract for Regional
Agency for Wangyu Internet Bar with Wangyu Technology, the two parties will carry out strategic cooperation utilizing
their own platforms and resources advantages and open physical "Electronic Sports" (refer to e-sport events reaching the
level of "sports") stores in properties of the Company in order to develop Electronic Sports business. Based on above
strategic cooperation, currently the electronic sports store "SEG Internet Bar" opened by the Company is Nantong SEG
marketplace is in preparation and is expected to be opened up at the beginning of October 2016. The Company has set up
an Electronic Sports Business Department in August, 2016 to be responsible for the development, expansion and
operation of electronic sports business.
2. During the report period, the Company signed Strategic Cooperation Agreement with Fujian Babycat Animation
Company. The Company and Fujian Babycat Animation Company carry out cooperation utilizing their respective
resources advantages, and combine children experience business type with intellectual property on animation to build
SEG Small Babycat Children Paradise (name for temporary use) characterized with science, education, culture and
experience, meeting the needs of transformation and upgrading of the Company's SEG electronics market while realizing
their respective development strategy of national arrangement. The Company has set up a Children Industry Business
Department in August 2016 to be responsible for the development, expansion and operation of SEG children theme
experience store.
3. During the report period, according to the Framework Agreement On Cooperation In Establishing China International
Consumer Electronics Exhibition/Exchange Center in Shenzhen signed by the Ministry of Industry and Information and
Shenzhen Municipal Government on April 08, 2016 in order to accelerate the transformation & upgrading of the
Company's physical electronics markets and construct a new electronics market operation platform with core SEG
comparativeness, the Company invested RMB 9 million to establish Shenzhen International Consumer Electronics
Exhibition/Exchange Center Co., Ltd. together with Shenzhen Futian Investment Development Co., Ltd. (hereinafter
referred to as "Futian Investment") and Shenzhen SHUM YIP LAND Company Limited (hereinafter referred to as
"SHUM YIP LAND"), the parties will, based on their respective industrial bases and integrating with the development
advantage of electronic industry in Shenzhen, and taking Shenzhen International Consumer Electronics
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Exhibition/Exchange Center Co., Ltd. as the operation platform, jointly building China International Consumer
Electronics Exhibition/Exchange Center that based in Shenzhen, oriented toward the global and high-end-targeted
(hereinafter referred to as "trading center"), the Exhibition/Exchange Center will take Upperhills LOFT that located in
central Shenzhen as the core, rely on the Pearl River Delta area, and link Huaqiangbei business circle, aimed to build a
high-end international consumer electronics exhibition exchange complex.
This investment, taking Upperhills LOFT as the core, Huaqiangbei business circle as the support, is to build a world
class consumer electronics Exhibition/Exchange center integrating new high-end consumer electronics product launch,
exhibition, user experience, investment discussion, cooperation and transaction, create a 365-day exhibition/exchange
platform, deeply dig new technologies, new products and new achievements in consumer electronics field in Shenzhen,
China and even the world, and gather and exhibit high-end products and technologies in the whole chain of global
electronics, especially consumer electronic industry, building the world's first rate high-end consumer electronics
experience center and consumption center. Through this platform we can promote the upgrading of Huaqiangbei
industries and the transformation & upgrading of the Company's physical electronics markets, endlessly extend and
enrich business value chain, thus to strengthen the Company's core competitiveness and resources consolidation capacity.
(2) The Company, through establishing strategic cooperation relationships with renowned network platforms including
Taobao, is dedicated to building operation platform combining with online and offline SEG electronics markets.
During the report period, the Company signed Taobao "Enterprises Purchasing" Strategic Cooperation Agreement with
Taobao (China) Software Co., Ltd. (hereinafter referred to as "Taobao Company"), combining the physical tenants
resources advantage of SEG electronics market with Taobao online resources, to provide SEG unique online and offline
mixed service mode, lead the merchants of production materials including components and parts into the e-commerce
field, assist merchants in market to cope with impact efficiently, thus to improve actual sales volume and acquire market
share. The markets participating in these cooperation including: Shenzhen SEG market, Longgang SEG market, Suzhou
SEG market, Wujiang SEG market, Wuxi SEG market, Shanghai SEG Market, Dongguan SEG Market, Bao'an SEG
market, Kunshan SEG market and Xiamen SEG market. For this purpose, the Company specially sets up e-commerce
business department to be especially responsible for execution and implementation of above mentioned strategic
cooperation projects, assume other e-business related functions and explore new profit-making mode.
(3) Continue to build "SEG Maker" industrial ecological system
1. In order to implement the Company's development strategy, comprehensively promote "entrepreneurship and
innovation", optimize the innovation and entrepreneurship environment and establish complete "SEG Maker" industrial
ecological system, the Company signed Trilateral Cooperation Agreement with SEG Maker and Shenzhen Tencent on
April 05, 2016, the three parties will utilize their respective platforms and resources advantages for strategic cooperation,
jointly build comprehensive entrepreneurship service platform combining incubation with investment, hardware
exhibition and sales platform where cooperation focuses on as well as the hardware laboratory platform providing actual
innovation services, thus setting entrepreneurship incubation service benchmark in China combining hardware with
software.
2. Circulating on establishing the business strategy of "SEG Maker Ecologic Circle", the Company signed Strategic
Cooperation Framework Agreement with Zhejiang Tmall Technology Co., Ltd. (hereinafter referred to as "Tmall
Company") on April 08, 2016. Both parties carry out strategic cooperation on directional recommendation of the Maker
products and mature products, activities, marketing, media promotion, and resources complementation.
Based on the above strategic cooperation framework, in April 2016 the Company organized "Juchuang Quanqiu" series
activities together with Alibaba, through giving play the resources advantages of both Alibaba and SEG, creating channel
incubator for innovative businesses and building intelligent internet acceleration channel for the products of Maker and
innovation businesses to flow to the market. Realize the attempt in value realization of product from "1" to "N". The aim
is to form a normalization mechanism, give play the respective resources advantages of Alibaba and SEG, create channel
incubator for Maker and innovative businesses, and build the intelligent internet acceleration channel for the products of
Maker and innovation businesses to flow to the market.
(4) Nantong commercial real estate projects
During the report period, the various works of Nantong SEG Times Square project were fully advanced taking
commercial investment, engineering reform, project application & acceptance inspection, and pre-opening as the four
points of work. Main body construction and decoration for common area of the project have been basically completed;
the commercial investment rate of project reaches 89.8%. Pre-opening of the project is underway in order. The Nantong
animation industrial base built by Nantong SEG has been opened formally on June 18, 2016. It has signed contracts with
15 animation enterprises.
13
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
(5) For strategic upgrading, the Company achieves substantial progress in exploration of new industries.
During the report period, the Company, together with Advanced Solar Power (Hangzhou) Co., Ltd., Shenzhen Raytai
Technology Photovoltaic Engineering Co., Ltd. and Shenzhen Energy Nanjing Holding Co., Ltd., jointly invested 5
million Yuan (of which the Company invested 2.5 million Yuan with a shareholding ratio of 50%) to form Shenzhen SEG
Longyan New Energy Application and Development Co., Ltd. The Company will be engaged in promotion of integrated
distributed CdTe thin PC power plant and construction PC (BIPV), contracting of integrated engineering and distribution
of CdTe thin solar cell module. The Business License for Shenzhen SEG Longyan New Energy Application and
Development Co., Ltd. has been obtained from Shenzhen Market Supervisory Authority on May 30, 2016.
(6) Major assets restructuring
3. The Company launched a major assets restructuring program in November 2015. The Company's stocks (SHEN SEG
000058, SHEN SEG B 200058) were suspended from the early trading on November 04, 2015. During the stock
suspension, the Company and related parties actively pushed forward major assets restructuring, and regularly disclosed
progress notices. As of the date of the report, the Company has disclosed the major assets restructuring plan. See Plan of
Shenzhen SEG Co., Ltd. on Issue of Shares, Cash Purchase of Assets, and Supporting Fund Raising & Related
Transaction (Revised Draft) released on the Cninfo Website on February 25, 2016. The Company's stocks resumed from
the early trading on February 25, 2016. After trading resumption, the Company and related parties actively pushed
forward major assets restructuring. Upon deliberated and passed on the third provisional meeting of the 7th session of
board of directors, the Company disclosed Restructuring Report on Issuance of Shares, Payment of Cash for Asset
Acquisition and Raising of Supporting Funds & Connected Transactions on August 04, 2016. The Company will go
through the relevant examination & approval procedure according to the requirements of laws and regulations.
According to the disclosed major assets restructuring report, the Company plans to, through issuance of shares and
payment of cash, purchase 100% stock right of SEG Maker, 55% stock right of Shenzhen SEG Kangle Enterprise
Development Co., Ltd., 100% stock right of Shenzhen SEG Properties Development Co., Ltd. and 79.02% of Shenzhen
SEG Real Estate Investment Co., Ltd. held by SEG Group; and issue shares to no more than 10 specific investors via
private placement to raise the supporting funds.
III. Constitutes of main business
Unit: Yuan
Year-on-year Year-on-year Year-on-year
Gross Profit
Operating income Operating cost increase/decrease of increase/decrease increase/decrease
Rate
operating income of operating cost of gross profit rate
Classified by industry
Electronics market
operation and 176,252,448.85 124,730,640.84 29.23% -10.02% -13.23% 2.62%
property leasing
Trade 161,703,245.00 160,014,455.91 1.04% 5.31% 6.18% -0.81%
Finance 49,577,595.91 13,458,039.39 72.85% 3.15% 307.79% -20.28%
Hotel 12,497,491.00 11,107,375.70 11.12% -3.15% 12.11% -12.10%
E-commerce 12,220,052.00 11,686,366.15 4.37% -17.58% 21.07% -30.53%
Classified by product
Not applicable
Region
Shenzhen 238,194,005.01 163,802,003.66 31.23% -25.91% -26.62% 0.66%
Xi'an 31,026,368.81 21,342,099.26 31.21% 5.38% 3.04% 1.56%
14
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Year-on-year Year-on-year Year-on-year
Gross Profit
Operating income Operating cost increase/decrease of increase/decrease increase/decrease
Rate
operating income of operating cost of gross profit rate
Suzhou 106,169,705.58 102,693,473.56 3.27% 211.46% 217.35% -1.80%
Changsha 19,618,369.04 13,798,280.63 29.67% 9.35% -10.26% 15.37%
Nanjing 12,390,327.70 15,798,368.65 -27.51% -23.06% -4.33% -24.96%
Shunde 1,479,755.28 1,371,032.37 7.35% 31.35% 36.16% -3.28%
Wuxi 3,372,301.34 2,032,510.86 39.73% 131.38% -61.08% 298.08%
IV. Analysis of the core competitiveness
Main business of the Company includes development and operation of the specialized electronics market and supporting
projects, property lease service, trade and channel service, e-commerce, and value-added microcredit service, and hotel
service.
The Company directly operates Shenzhen SEG Electronics Market, which has a leading position in the industry and is
the founder of the professional electronics market operation model in China. The Company has won various honorary
titles such as "China Five-star Electronics Market", "Most Influential Professional Market in Shenzhen in 30 years",
"2014-2015 National Integrity Model Market" (awarded by the State Administration for Industry and Commerce) and
"Top 10 Brands of Professional Markets Influencing China in Shenzhen".
The Company has operated nearly 30 professional electronics markets in China in direct operation, joint operation, and
entrusted operation modes. The electronics market covers the Pearl River Delta and Yangtze River Delta, with a radiation
to the entire China. Through twenty-eight years of hard work in electronics market industry, the Company has rich
market merchant resources and mature market operation management experience. SEG Electronics Market has
successfully combined IT complex self-construction, leasing and trusted management, combined market service and
value-added financial service, and combined professional market, SEG factory store and distribution channels. SEG
Electronics Market stood out as the largest specialized electronics markets in China and even in Asia covering electronic
components, IT products, and communications products and has great brand influence both at home and abroad.
Faced with the increasingly severe market competition environment and the impact of new business models represented
by internet, the Company uses electronics market business and "O2O" of e-commerce as entry point, through
cooperation with renowned internet enterprises, to create "internet+" compound business model of "entity + e-business +
channel" from the three aspects of e-commerce platform construction, expansion of wholesale channels and sales via
physical stores; meanwhile, the Company, based on SEG MIS system, SEG Online Hall, other backstage big data
management system as well as "PC + mobile terminal", builds the resources-sharing platform integrating market
merchants, suppliers, purchasers and consumers, realizes "O2O" interaction and the resources linkage across the national
market.
Under the historical background of "popular entrepreneurship and innovation", the Company fully utilizes geographic
advantage of Shenzhen SEG Electronics Market of being located at Shenzhen Huaqiangbei, relies on the industrial
advantage of collecting and distributing center of electronic products including electronic components and parts, gives
play the advantage of rich merchants resources, operation experience and industrial position that SEG Electronics
Market has accumulated for the past twenty-eight years, and realize through SEG Maker platform the hierarchical
progression from product end and market end to resources end, and link the information at resources end with the
entrepreneurship end, forming SEG's new platform value while providing SEG Maker ecological circle with
comprehensive one-stop solutions and supporting services including project stationing, experiment development, project
incubation, project demonstration, channel incubation, market promotion, listing coaching. The Company will utilize its
unique advantages in geographic location, market, brand, resources and channels, deeply dig and fully cater to Makers'
needs, promote the capitalization and industrialization of Maker products results, stimulate the innovation vigor of
electronics market, endlessly extend and enrich business value chain, finally promote the transformation, upgrading and
healthy development of the Company's businesses.
15
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V. Analysis of the investment situation
1. Foreign equity investment
(1) Forest investment
√ Applicable □ Not applicable
Investment of the Company
Investment over the same period of last year
Investment in the report period (RMB Yuan) Increase/decrease (%)
(RMB Yuan)
135,463,224.43 126,000,000.00 7.51%
Information about the invested companies
Equity ratio of listed company in invested
Company name Main business
company
Integrators of relevant intelligent household
Suzhou SEG Intelligent Technology Co.,
products, carry out relevant household 100.00%
Ltd.
businesses.
Be engaged in promotion of integrated
distributed CdTe thin PC power plant and
Shenzhen SEG Longyan New Energy
construction PC (BIPV), contracting of 50.00%
Application and Development Co., Ltd.
integrated engineering and distribution of CdTe
thin solar cell module.
Build high-end consumer electronics
exhibition/exchange center, including but not
limited to high-end consumer electronics brand
flagship store, high-end innovation products
exhibition area, launch of new consumer
Shenzhen International Consumer electronic product, enterprise brands exhibition,
Electronics Exhibition/Exchange Center Co., Maker club, advertisement creativity exhibition 30.00%
Ltd. service, information and data services,
supporting government services, financial
investment service, enterprise management &
consulting, business brand management,
technical services, technology consulting, results
transferring and education training.
Development and operation of real estate, lease
Nantong SEG Times Square Development
and sales of self-owned house, property 100.00%
Co., Ltd.
management, and sales of electronic products
(2) Equity of the financing enterprises held by the Company
□ Applicable √ Not applicable
The Company does not hold the equity of the financing enterprises within the report period.
(3) Security investment
√ Applicable □ Not applicable
16
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Share-holding
Short form Initial Shares held Initial Shares held Gains and
proportion at Ending book Accounting Source of
Stock type Stock code of the investment cost at period shareholding at period losses in the
period end value item shares
security (Yuan) beginning percentage end report period
(%)
Financial
Youhao assets
Share 600778 90,405.00 60,683 0.04% 60,683 0.04% 588,625.10 Initial share
Group available
for sale
Long-term
Huakong
Share 000068 279,307,046.38 201,345,033 20.00% 201,345,033 20.00% 177,028,066.40 -4,715,142.77 equity Initial share
SEG
investment
Financial
SEG assets
Share 832770 8,275,321.43 7,500,000 11.38% 7,500,000 11.38% 13,515,392.83 Initial share
Navigations available
for sale
Total 287,672,772.81 208,905,716 -- 208,905,716 -- 191,132,084.33 -4,715,142.77 -- --
Disclosure date of the public notice of
the Board of Directors on entrusted
finance approval (if any)
Disclosure date of the public notice of
the meeting of shareholders on
entrusted finance approval (if any)
(4) Equity of other listed companies held by the Company
□ Applicable √ Not applicable
The Company does not hold the equity of other listed companies within the report period.
2. Entrusted financing, investment of derived products, and entrusted loaning
(1) Entrusted financing
√ Applicable □ Not applicable
Unit: RMB 10,000 Yuan
Principal Actual loss
Connected Amount of Remuneration amount Impairment and gain
Name of Associated Projected
Transaction Product Type entrusted Start Date End Date confirmation returned in provision amount in
trustee Relationship income
or Not financing method the report (if any) the report
period period
Industrial and ICBC Gong Ying Sui Guaranteed
SEG Co., December March 30,
Commercial No Xin Tian Li 2,000 minimum 2,000 23.44 23.44
Ltd. 28, 2015 2016
Bank of China SZWL1560 (93 days) income
Industrial and ICBC GongYing Sui
SEG Co., April 07, July 09,
Commercial No Xin Tian Li 3,800 Float income 44.54
Ltd. 2016 2016
Bank of China SZWL1560 (93 days)
SEG Co., China Citic CITIC-CP cash June 04, May 13,
No 6,000 Float income 6,000 194.94 194.94
Ltd. Bank management No.3 2015 2016
SEG Co., The Agricultural An Xin Ling Dong December January 15,
No 3,000 Float income 3,000 11.55 11.55
Ltd. Bank of China 20 days 02, 2015 2016
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Principal Actual loss
Connected Amount of Remuneration amount Impairment and gain
Name of Associated Projected
Transaction Product Type entrusted Start Date End Date confirmation returned in provision amount in
trustee Relationship income
or Not financing method the report (if any) the report
period period
Shanghai
SEG Co., Pudong Liduoduo January 11, February
No 3,500 Float income 3,500 14.71 14.71
Ltd. Development 2301137335 2016 14, 2016
Bank
Shanghai
SEG Co., Pudong Liduoduo April 13, May 16,
No 6,500 Float income 6,500 23.36 23.36
Ltd. Development 2301137335 2016 2016
Bank
China Merchants
Bank Dianjin
China Company Li Cai January 20, May 25,
Xi'an SEG No 700 Float income 700 9.67 9.67
Merchants Bank Zheng Li series No. 2016 2016
61 Wealth
Management Plan
March 01, September
Xi'an SEG Bank of China No AMZYZH14129 500 Float income 0 11.26
2016 20, 2016
March 04, July 04,
Xi'an SEG Bank of China No AMZYZH14129 500 Float income 0 6.35
2016 2016
Bank of China Ji Fu
April 15, August 09,
Xi'an SEG Bank of China No Li (fixed term at head 500 Float income 0 5.72
2016 2016
office) C
Bank of China Ji Fu
April 29, August 19,
Xi'an SEG Bank of China No Li (fixed term at head 400 Float income 0 4.3
2016 2016
office) C
May 09, May 31,
Xi'an SEG Bank of China No Ri Ji Yue Lei 300 Float income 300 0.44 0.44
2016 2016
China Bu Bu Sheng Jin May 10, June 23,
Xi'an SEG No 100 Float income 100 0.24 0.24
Merchants Bank 8688 2016 2016
China Bu Bu Sheng Jin May 10, June 23,
Xi'an SEG No 100 Float income 100 0.42 0.42
Merchants Bank 8699 2016 2016
May 25, May 31,
Xi'an SEG Bank of China No Ri Ji Yue Lei 100 Float income 100 0.04 0.04
2016 2016
China Bu Bu Sheng Jin May 27, June 23,
Xi'an SEG No 700 Float income 700 1.69 1.69
Merchants Bank 8699 2016 2016
June 01, June 06,
Xi'an SEG Bank of China No Ri Ji Yue Lei 100 Float income 100 0.03 0.03
2016 2016
June 01, June 22,
Xi'an SEG Bank of China No Ri Ji Yue Lei 300 Float income 300 0.42 0.28
2016 2016
18
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Principal Actual loss
Connected Amount of Remuneration amount Impairment and gain
Name of Associated Projected
Transaction Product Type entrusted Start Date End Date confirmation returned in provision amount in
trustee Relationship income
or Not financing method the report (if any) the report
period period
Bank of China Guaranteed
AMZYJZT (364 January 05, January 04,
SEG Baohua Shenzhen SEG No 1,300 minimum 1,300 68.71 68.71
days) 2015 2016
Plaza Branch income
Bank of China Guaranteed
AMZYJZT (364 March 19, March 17,
SEG Baohua Shenzhen SEG No 1,500 minimum 1,500 78.53 78.53
days) 2015 2016
Plaza Branch income
China Citic
Bank CITIC-CP
CITIC-CP cash July 17, May 12,
SEG Baohua Asset No 1,000 Float income 1,000 39.45 39.46
management No.3 2015 2016
Management
Co., Ltd.
Bank of China Guaranteed
July 31, July 22,
SEG Baohua Shenzhen SEG No AMZYJF 1,000 minimum 44.01
2015 2016
Plaza Branch income
CITIC-CP Asset
CITIC-CP cash August 04, May 12,
SEG Baohua Management No 1,000 Float income 1,000 37.37 37.37
management No.3 2015 2016
Co., Ltd.
Bank of China Guaranteed
September September
SEG Baohua Shenzhen SEG No AMZYPW 2,100 minimum 95.53
24, 2015 27, 2016
Plaza Branch income
Industrial and
Guaranteed
Commercial ICBC Li Cai Gong November February
SEG Baohua No 100 minimum 100 1.2 1.2
Bank of China Ying Sui Xin Tian Li 26, 2015 26, 2016
income
Baohua Branch
Bank of China Guaranteed
January 08, January 06,
SEG Baohua Shenzhen SEG No AMZYZH14129 1,300 minimum 53.8
2016 2017
Plaza Branch income
Bank of China Guaranteed
March 22, March 24,
SEG Baohua Shenzhen SEG No AMZYZH14129 1,600 minimum 64.35
2016 2017
Plaza Branch income
Industrial and
Guaranteed
Commercial ICBC Li Cai Gong April 20, July 21,
SEG Baohua No 1,000 minimum 11.72
Bank of China Ying Sui Xin Tian Li 2016 2016
income
Baohua Branch
Industrial and
Guaranteed
Commercial Li Cai Gong Ying May 23, August 23,
SEG Baohua No 1,000 minimum 11.21
Bank of China 2012 2016 2016
income
Baohua Branch
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Principal Actual loss
Connected Amount of Remuneration amount Impairment and gain
Name of Associated Projected
Transaction Product Type entrusted Start Date End Date confirmation returned in provision amount in
trustee Relationship income
or Not financing method the report (if any) the report
period period
Nantong
SEG Times Bank of China Guaranteed
December January 27,
Square Nantong No GSRJYL01 900 minimum 900 1.74 1.74
14, 2015 2016
Development Gangzha Branch income
Co., Ltd.
Nantong
SEG Times Bank of China Guaranteed
January 12, January 27,
Square Nantong No GSRJYL01 2,000 minimum 2,000 2.3 2.3
2016 2016
Development Gangzha Branch income
Co., Ltd.
Nantong
SEG Times Bank of China Guaranteed
January 28, February
Square Nantong No GSRJYL01 500 minimum 500 0.15 0.15
2016 01, 2016
Development Gangzha Branch income
Co., Ltd.
Nantong
SEG Times Bank of China Guaranteed
May 06, December
Square Nantong No GSRJYL01 1,000 minimum 900
2016 31, 2016
Development Gangzha Branch income
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial January 08, February
No WL35BBX 30 Float income 30 0.09 0.09
Market Bank of China 2016 16, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial January 08, February
No WL35BBX 30 Float income 30 0.09 0.09
Market Bank of China 2016 16, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial January 08, February
No WL35BBX 30 Float income 30 0.09 0.09
Market Bank of China 2016 16, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial January 08, February
No WL35BBX 30 Float income 30 0.09 0.09
Market Bank of China 2016 16, 2016
Management Sipailou Branch
Co., Ltd.
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Principal Actual loss
Connected Amount of Remuneration amount Impairment and gain
Name of Associated Projected
Transaction Product Type entrusted Start Date End Date confirmation returned in provision amount in
trustee Relationship income
or Not financing method the report (if any) the report
period period
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial January 08, February
No WL35BBX 30 Float income 30 0.09 0.09
Market Bank of China 2016 16, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG
Industrial and
Electronics
Commercial January 08, February
Nanjing No WL35BBX 30 Float income 30 0.09 0.09
Bank of China 2016 16, 2016
Market
Sipailou Branch
Management
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial January 08, February
No WL35BBX 20 Float income 20 0.06 0.06
Market Bank of China 2016 16, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial March 25, June 02,
No WL35BBX 30 Float income 30 0.16 0.16
Market Bank of China 2016 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial March 25, June 02,
No WL35BBX 30 Float income 30 0.16 0.16
Market Bank of China 2016 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial March 25, June 02,
No WL35BBX 30 Float income 30 0.16 0.16
Market Bank of China 2016 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial March 25, June 02,
No WL35BBX 30 Float income 30 0.16 0.16
Market Bank of China 2016 2016
Management Sipailou Branch
Co., Ltd.
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Principal Actual loss
Connected Amount of Remuneration amount Impairment and gain
Name of Associated Projected
Transaction Product Type entrusted Start Date End Date confirmation returned in provision amount in
trustee Relationship income
or Not financing method the report (if any) the report
period period
Shenzhen
SEG Nanjing Industrial and
"Ri Sheng Yue
Electronics Commercial January 13, December
No Heng"± incremental 30 Float income 30 0.32 0.32
Market Bank of China 2016 31, 2016
gains
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
"Ri Sheng Yue
Electronics Commercial January 13, December
No Heng"± incremental 30 Float income 30 0.32 0.32
Market Bank of China 2016 31, 2016
gains
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
"Ri Sheng Yue
Electronics Commercial January 15, December
No Heng"± incremental 30 Float income 30 0.32 0.32
Market Bank of China 2016 31, 2016
gains
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
"Ri Sheng Yue
Electronics Commercial January 15, December
No Heng"± incremental 30 Float income 30 0.32 0.32
Market Bank of China 2016 31, 2016
gains
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial "Ri Sheng Yue Heng" February December
No 30 Float income
Market Bank of China ±incremental gains 26, 2016 31, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial "Ri Sheng Yue Heng" February December
No 30 Float income
Market Bank of China ±incremental gains 26, 2016 31, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial "Ri Sheng Yue Heng" February December
No 30 Float income
Market Bank of China ±incremental gains 26, 2016 31, 2016
Management Sipailou Branch
Co., Ltd.
22
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Principal Actual loss
Connected Amount of Remuneration amount Impairment and gain
Name of Associated Projected
Transaction Product Type entrusted Start Date End Date confirmation returned in provision amount in
trustee Relationship income
or Not financing method the report (if any) the report
period period
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial "Ri Sheng Yue Heng" February December
No 30 Float income
Market Bank of China ±incremental gains 26, 2016 31, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial "Ri Sheng Yue Heng" February December
No 20 Float income
Market Bank of China ±incremental gains 26, 2016 31, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial "Ri Sheng Yue Heng" March 22, December
No 30 Float income
Market Bank of China ±incremental gains 2016 31, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial "Ri Sheng Yue Heng" March 31, December
No 30 Float income
Market Bank of China ±incremental gains 2016 31, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial "Ri Sheng Yue Heng" March 31, December
No 30 Float income
Market Bank of China ±incremental gains 2016 31, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial "Ri Sheng Yue Heng" March 31, December
No 30 Float income
Market Bank of China ±incremental gains 2016 31, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial "Ri Sheng Yue Heng" April 01, December
No 30 Float income
Market Bank of China ±incremental gains 2016 31, 2016
Management Sipailou Branch
Co., Ltd.
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Principal Actual loss
Connected Amount of Remuneration amount Impairment and gain
Name of Associated Projected
Transaction Product Type entrusted Start Date End Date confirmation returned in provision amount in
trustee Relationship income
or Not financing method the report (if any) the report
period period
Shenzhen
SEG Nanjing Industrial and
Electronics Commercial "Ri Sheng Yue Heng" April 01, December
No 30 Float income
Market Bank of China ±incremental gains 2016 31, 2016
Management Sipailou Branch
Co., Ltd.
Shenzhen
Guaranteed
SEG Nanjing December January 21,
Ping An Bank No AGT100002 1,200 minimum 1,200 1.75 1.75
E-Commerce 12, 2015 2016
income
Co., Ltd.
Shenzhen
Guaranteed
SEG December January 21,
Ping An Bank No AGT100002 2,100 minimum 2,100 3.05 3.05
E-Commerce 29, 2015 2016
income
Co., Ltd.
Shenzhen
Guaranteed
SEG December February
Ping An Bank No AGT100002 1,000 minimum 1,000 1.45 1.45
E-Commerce 31, 2015 01, 2016
income
Co., Ltd.
Xi'an Guaranteed
August 20, February
Hairong Bank of China No AMZYPWHQ-15190 800 minimum 800 17.15 17.15
2015 18, 2016
SEG income
Xi'an Guaranteed
September March 04,
Hairong Bank of China No AMZYJZT-A15267 700 minimum 700 13.37 13.37
22, 2015 2016
SEG income
Xi'an Guaranteed
November January 26,
Hairong Bank of China No AMZYJZT-A15267 500 minimum 500 3.25 3.25
27, 2015 2016
SEG income
Xi'an Guaranteed
January 18, May 09,
Hairong Bank of China No AMZYPWHQ-15190 300 minimum 300 3.68 3.68
2016 2016
SEG income
Xi'an Guaranteed
February March 10,
Hairong Bank of China No AMZYPWHQ-15190 600 minimum 600 2.34 2.34
01, 2016 2016
SEG income
Xi'an Guaranteed
February April 07,
Hairong Bank of China No AMZYPWHQ-15190 750 minimum 750 3.42 3.42
22, 2016 2016
SEG income
Xi'an Guaranteed
March 07, June 02,
Hairong Bank of China No AMZYPWHQ-15190 700 minimum 700 6.34 6.34
2016 2016
SEG income
Xi'an Guaranteed
March 14, June 27,
Hairong Bank of China No AMZYZH14129 650 minimum 650 7.11 7.11
2016 2016
SEG income
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Principal Actual loss
Connected Amount of Remuneration amount Impairment and gain
Name of Associated Projected
Transaction Product Type entrusted Start Date End Date confirmation returned in provision amount in
trustee Relationship income
or Not financing method the report (if any) the report
period period
Xi'an Thursday, Guaranteed
Hairong Bank of China No AMZYPWHQ-15190 450 April 14, 2016.10.20 minimum 8.62
SEG 2016 income
Xi'an Guaranteed
May 17, August 23,
Hairong Bank of China No AMZYJF 200 minimum 1.88
2016 2016
SEG income
Xi'an Guaranteed
June 06, November
Hairong Bank of China No AMZYPWHQ-15190 700 minimum 11.91
2016 28, 2016
SEG income
Xi'an Guaranteed
June 30, September
Hairong Bank of China No AMZYZH14129 300 minimum 1.81
2016 01, 2016
SEG income
Xi'an Guaranteed
June 30, June 22,
Hairong Bank of China No AMZYPWHQ-15190 400 minimum 14.87
2016 2017
SEG income
Wujiang October January 21,
Bank of China No AMZYPWHQ-15190 400 Float income 400 4.19 4.19
SEG 22, 2015 2016
Shanghai
Wujiang Pudong October January 25,
No 2301137338 400 Float income 400 4.54 4.54
SEG Development 28, 2015 2016
Bank
Shanghai
Wujiang Pudong May 23,
No 2301137338 400 November Float income 400 8.78 8.78
SEG Development 2016
21, 2015
Bank
Shanghai
Wujiang Pudong December January 15,
No 2301137338 400 Float income 400 1.46 1.46
SEG Development 16, 2015 2016
Bank
Shanghai
Wujiang Pudong January 19, July 16,
No 2301137338 400 Float income 8.88
SEG Development 2016 2016
Bank
Wujiang January 25, July 21,
Bank of China No AMZYPWHQ-15190 300 Float income 6
SEG 2016 2016
Shanghai
Wujiang Pudong February July 30,
No 2301137338 400 Float income 7.23
SEG Development 02, 2016 2016
Bank
25
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Principal Actual loss
Connected Amount of Remuneration amount Impairment and gain
Name of Associated Projected
Transaction Product Type entrusted Start Date End Date confirmation returned in provision amount in
trustee Relationship income
or Not financing method the report (if any) the report
period period
Changsha
Guaranteed
SEG Bank of January 11, April 11,
No YTCF-RZL 100 minimum 100 0.93 0.93
Development Communications 2016 2016
income
Co., Ltd.
Changsha
Guaranteed
SEG Bank of February May 03,
No YTCF-RZL 100 minimum 100 0.92 0.92
Development Communications 01, 2016 2016
income
Co., Ltd.
Changsha
Guaranteed
SEG Bank of March 07, June 07,
No YTCF-RZL 100 minimum 100 0.86 0.86
Development Communications 2016 2016
income
Co., Ltd.
Changsha
Guaranteed
SEG Bank of April 18, October
No YTCF-RZL 200 minimum 3.39
Development Communications 2016 17, 2016
income
Co., Ltd.
Changsha
Guaranteed
SEG Bank of May 16, August 16,
No YTCF-RZL 200 minimum 1.71
Development Communications 2016 2016
income
Co., Ltd.
Changsha
SEG China June 21, August 16, Capital
No 51422 150 0.75
Development Merchants Bank 2016 2016 preservation
Co., Ltd.
Industrial and
January 24, January 16, Constant
SEG Credit Commercial No ZQL180ZQX 31.13 31.13 2.29 1.31
2015 2016 return
Bank of China
Industrial and Thursday, Saturday,
Constant
SEG Credit Commercial No SZWL1560 72 October January 16, 72 0.89 0.89
return
Bank of China 15, 2015 2016
Industrial and Guaranteed
October January 01,
Wuxi SEG Commercial No WL63BBX 200 minimum 200 1.23 1.23
30, 2015 2016
Bank of China income
Industrial and Guaranteed
November January 26,
Wuxi SEG Commercial No WL63BBX 200 minimum 200 1.09 1.09
24, 2015 2016
Bank of China income
Industrial and Guaranteed
November January 28,
Wuxi SEG Commercial No WL63BBX 230 minimum 230 1.83 1.83
26, 2015 2016
Bank of China income
Guaranteed
The Agricultural November February
Wuxi SEG No Ben Li Feng 90 days 550 minimum 550 4.41 4.41
Bank of China 27, 2015 25, 2016
income
26
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Principal Actual loss
Connected Amount of Remuneration amount Impairment and gain
Name of Associated Projected
Transaction Product Type entrusted Start Date End Date confirmation returned in provision amount in
trustee Relationship income
or Not financing method the report (if any) the report
period period
Guaranteed
The Agricultural February March 14,
Wuxi SEG No 995101010010200 550 minimum 550 0.49 0.49
Bank of China 29, 2016 2016
income
Guaranteed
The Agricultural 995101010010200 March 14, March 29,
Wuxi SEG No 550 minimum 550 0.65 0.66
Bank of China phase 3 2016 2016
income
Industrial and Guaranteed
0701CDOB Wealth March 09, December
Wuxi SEG Commercial No 220 minimum
Management 2016 31, 2016
Bank of China income
Guaranteed
The Agricultural 995101010010200 April 06, December
Wuxi SEG No 400 minimum
Bank of China phase 3 2016 31, 2016
income
Industrial and Guaranteed
0701CDOB Wealth May 10, December
Wuxi SEG Commercial No 200 minimum
Management 2016 31, 2016
Bank of China income
Industrial and Guaranteed
701CDOB Wealth June 12, December
Wuxi SEG Commercial No 100 minimum
Management 2016 31, 2016
Bank of China income
Total 65,363.13 -- -- -- 46,623.13 0 1,030.23 609.29
Source of entrusted financial funding Self-owned capital
Cumulative amount of capital and profit unclaimed within the due 0
Lawsuit involvement (if applicable) N/A
Disclosure date of the public notice of the Board of Directors on
entrusted finance approval (if any)
Disclosure date of the public notice of the meeting of shareholders
on entrusted finance approval (if any)
(2) Investment of derived products
□ Applicable √ Not applicable
No investment in derivatives is involved within the report period.
(3) Entrusted loaning
□ Applicable √ Not applicable
No entrusted loaning is involved within the report period.
3. Use of the collected capital
□ Applicable √ Not applicable
In the report period, there was no usage of raised capital.
4. Analysis of the main subsidiaries and joint stock companies
√ Applicable □ Not applicable
27
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
List of major subsidiaries and shareholding companies
Unit: Yuan
Major
Company Registered Operating Operating
Entity Type Industry Products or Total Assets Net Assets Net profit
name Capital income Profit
Services
Operation and
management
Electronics
Wujiang SEG Subsidiary of professional 3,000,000.00 15,360,982.39 4,244,891.27 7,490,153.44 1,028,620.35 937,626.91
market
electronics
market
Operation and
management
Electronics
Wuxi SEG Subsidiary of professional 3,000,000.00 14,653,775.03 5,151,393.38 3,372,301.34 1,250,975.83 1,206,082.70
market
electronics
market
Development
real estate
Nantong SEG Subsidiary and operation 30,000,000.00 633,713,741.36 23,875,393.99 44,673.74 63,673.11
development
of real estate
Development
real estate
Yantai SEG Subsidiary and operation 45,000,000.00
development
of real estate
Operation and
management
Electronics
Nanning SEG Subsidiary of professional 8,000,000.00 1,759,691.34 -881,062.28
market
electronics
market
Operation and
management
Electronics
Shunde SEG Subsidiary of professional 6,000,000.00 4,828,206.55 3,210,310.98 1,479,755.28 44,640.43 51,088.43
market
electronics
market
SEG
Subsidiary E-commerce E-commerce 30,000,000.00 96,706,009.81 4,665,937.83 12,220,052.31 -3,391,465.86 -3,295,037.74
E-Commerce
SEG Credit Subsidiary Finance Micro-credit 150,000,000.00 566,348,502.92 172,606,740.92 49,577,595.91 20,248,933.14 14,098,803.25
Property Property
operation and operation and
SEG Baohua Subsidiary management management 30,808,800.00 158,772,239.06 100,389,210.74 41,085,826.65 19,367,559.77 14,696,275.26
and hotel and hotel
business business
Channel retail
terminal of
electronic
SEG Industry Subsidiary Property lease products and 25,500,000.00 86,972,566.27 39,444,963.54 97,530,940.11 783,045.33 783,045.33
property
operation and
management
Xi'an SEG Subsidiary Electronics Operation and 3,000,000.00 45,023,362.78 13,610,054.28 19,958,356.63 7,062,497.62 6,062,000.88
28
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Major
Company Registered Operating Operating
Entity Type Industry Products or Total Assets Net Assets Net profit
name Capital income Profit
Services
market management
of professional
electronics
market
Operation and
management
Electronics
Longgang SEG Subsidiary of professional 3,000,000.00 25,118,282.61 6,488,993.99 4,578,790.18 1,165,934.08 890,007.06
market
electronics
market
Operation and
management
Electronics
Suzhou SEG Subsidiary of professional 3,000,000.00 42,108,142.18 10,622,821.25 23,521,587.85 4,391,705.29 3,182,080.71
market
electronics
market
Operation and
management
Electronics
Changsha SEG Subsidiary of professional 35,000,000.00 86,146,274.12 67,073,394.65 11,509,734.96 4,425,768.42 3,314,259.58
market
electronics
market
Operation and
management
Xi'an Hairong Electronics
Subsidiary of professional 3,000,000.00 25,665,031.73 4,711,851.60 11,068,012.18 1,663,759.20 1,428,526.32
SEG market
electronics
market
Operation and
management
Electronics
Nanjing SEG Subsidiary of professional 20,000,000.00 29,192,873.98 5,280,662.35 12,390,327.70 -3,724,010.89 -3,708,884.10
market
electronics
market
Operation and
management
Suzhou SEG Electronics
Subsidiary of professional 8,000,000.00 26,059,011.78 -2,425,796.99 19,074,390.98 117,059.97 117,394.97
Digital market
electronics
market
Development Development
Xi'an
Subsidiary and operation and operation 30,000,000.00
Fengdong SEG
of real estate of real estate
Nantong SEG Operation of Property
Subsidiary 5,000,000.00 3,066,815.16 -171,164.78 -170,691.17 -170,691.81
Operation real estate Operation
Intelligent
Intelligent
Subsidiary Trading household, 10,000,000.00 7,651,869.14 7,273,178.56 56,083,573.31 -2,732,821.75 -2,726,821.44
Technology
trading
New energy
SEG Longyan Subsidiary Energy 5,000,000.00
development
29
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Major
Company Registered Operating Operating
Entity Type Industry Products or Total Assets Net Assets Net profit
name Capital income Profit
Services
Asset
management
under
Computer,
entrustment,
communication
investment
and other
Shareholding consulting,
Huakong SEG electronic 1,006,671,464.00 735,724,883.66 667,240,325.25 42,719,787.19 -27,971,553.53 -26,861,012.87
company enterprise
equipment
management
manufacturing
consulting, and
industries
economic
information
consulting
Operation and
management
Shareholding Electronics
Shanghai SEG of professional 5,000,000.00 22,330,879.13 10,020,932.12 3,084,877.60 -396,801.14 -318,880.23
company market
electronics
market
Electronics
Exhibition and exhibition and
Shareholding
Trade Center electronics new product 30,000,000.00 30,000,000.00 30,000,000.00
company
market launch
platform
5. Major projects that are not invested by the collected capital
□ Applicable √ Not applicable
No major projects that are not invested by the collected capital are involved in the report period.
VI. Forecasts of operation performance from January to September, 2016
Warning and reasons for forecasts on loss of the accumulated net profit from the year beginning to the end of next period or sharp
year-on-year changes in net profit
□ Applicable √ Not applicable
VII. Explanations of the Board of Directors and the Board of Supervisors to the
"Non-standard Audit Report" made by the accounting firm in the report period
□ Applicable √ Not applicable
VIII. Explanations of the Board of Directors to the relative information of the
"Non-standard Audit Report" of the previous year
□ Applicable √ Not applicable
IX. Distribution of profit in the reporting period
Implementation or adjustment of the profit distribution scheme, especially the cash dividend scheme and the scheme of transferring the
capital reserve to shares in the report period
√ Applicable □ Not applicable
30
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
1. The Company's profit distribution scheme for 2015: statuary surplus accumulation fund amounting to 7,009,501.20
Yuan is accrued at 10% of profits attributable to shareholders; cash bonus to whole shareholders is made at 0.30 Yuan/10
shares (tax included) based on the Company's share capital 784,799,010 Yuan as at December 31, 2015. The Company
made a total profit distribution of 23,543,970.30 Yuan, among which cash bonus accounts for 100% of this profit
distribution. The Company decided not to transfer capital reserve into share capital.
2. The Company's profit distribution scheme for 2015 was deliberated and passed on the Company's 21th (2015)
stockholders' meeting.
3. The implementation of the Company's profit distribution scheme for 2015 was completed on June 30, 2016.
Special statement on cash bonus policy
Whether consistent with provisions of Articles of Association or
Yes
requirements of the resolutions of shareholders' meeting.
Whether bonus sharing standard and proportion are clear and definite: Yes
Whether the relevant decision-making procedure and mechanism are
Yes
complete:
Whether independent directors have performed their duties and
Yes
played their due functions:
Whether minority shareholders have been give the opportunity to
express their opinions and claims, and whether their legitimate rights Yes
and interests are fully protected:
Where the cash bonus policy is adjusted or changed, whether the
conditions and procedure are compliant with laws and regulations and Not applicable
transparent:
X. Plan of profit distribution and transferring the capital reserve to shares in the
report period
□ Applicable √ Not applicable
In the first half year, the Company plans not to distribute cash dividend or shares, or transfer the capital reserve to shares.
XI. Registration form for investigations, communication and interviews in the report
period
√ Applicable □ Not applicable
Main Content of Discussion and
Time Place Means Type Object
the Materials Provided
Inquire about the progress status
of major assets restructuring. The
January 04, 2016 The Company Phone call Individual Individual Company has given reply
according to the actual progress
status that has been disclosed.
Inquire about the progress status
of major assets restructuring. The
January 07, 2016 The Company Phone call Individual Individual Company has given reply
according to the actual progress
status that has been disclosed.
31
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Main Content of Discussion and
Time Place Means Type Object
the Materials Provided
Inquire about the progress status
of major assets restructuring. The
January 08, 2016 The Company Phone call Individual Individual Company has given reply
according to the actual progress
status that has been disclosed.
Inquire about the progress status
of major assets restructuring. The
February 01, 2016 The Company Phone call Individual Individual Company has given reply
according to the actual progress
status that has been disclosed.
Inquire about the progress status
of major assets restructuring. The
February 02, 2016 The Company Phone call Individual Individual Company has given reply
according to the actual progress
status that has been disclosed.
Inquire about the Company's
reply to the Inquiry Letter on
Restructuring of Shenzhen SEG
Co., Ltd. issued by Shenzhen
Stock Exchange. The Company
has expressed in reply that it has
February 19, 2016 The Company Phone call Individual Individual
organized intermediary organs to
carry out careful study, fulfill and
reply the relevant problems one
by one, and bring the investors'
attention to the announcement to
be issued.
Inquire about the Company's
reply to the Inquiry Letter on
Restructuring of Shenzhen SEG
Co., Ltd. issued by Shenzhen
Stock Exchange. The Company
has expressed in reply that it has
February 20, 2016 The Company Phone call Individual Individual
organized intermediary organs to
carry out careful study, fulfill and
reply the relevant problems one
by one, and bring the investors'
attention to the announcement to
be issued.
Inquire about the time for
Company's stocks to resume
trading. The Company has given
February 22, 2016 The Company Phone call Individual Individual
reply according to the actual
progress status that has been
disclosed.
32
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Main Content of Discussion and
Time Place Means Type Object
the Materials Provided
Inquire about the time for
Company's stocks to resume
trading. The Company has given
February 23, 2016 The Company Phone call Individual Individual
reply according to the actual
progress status that has been
disclosed.
Inquire about the assets injection
related information in this major
assets restructuring. The
February 25, 2016 The Company Phone call Individual Individual Company has given reply
according to the major assets
restructuring plan that has been
disclosed.
Inquired whether the Company
will disclose important public
February 26, 2016 The Company Phone call Individual Individual notice. The Company replied no
information that needs to be
disclosed is undisclosed.
Inquired whether the Company
will disclose important public
February 27, 2016 The Company Phone call Individual Individual notice. The Company replied no
information that needs to be
disclosed is undisclosed.
Inquired the number of
shareholders till February 29. The
Company provided the
March 01, 2016 The Company Phone call Individual Individual
information released by the
Securities Depository and
Clearing Corporation.
Inquired the number of
shareholders till March 15. The
Tuesday, March 15, Company provided the
The Company Phone call Individual Individual
2016 information released by the
Securities Depository and
Clearing Corporation.
Inquired the time for disclosing
the annual report. The Company
March 22, 2016 The Company Phone call Individual Individual answered that the annual report
was to be disclosed on
Wednesday, March 30, 2016.
Inquired the Company's financial
data for 1st quarter. The
March 31, 2016 The Company Phone call Individual Individual Company suggested the investor
to focus on the 2016 Q1 Report to
be disclosed soon.
33
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Main Content of Discussion and
Time Place Means Type Object
the Materials Provided
Inquire about the assets injection
related information in this major
assets restructuring. The
April 20, 2016 The Company Phone call Individual Individual Company has given reply
according to the major assets
restructuring plan that has been
disclosed.
Inquired the number of
shareholders till May 29. The
Company provided the
April 30, 2016 The Company Phone call Individual Individual
information released by the
Securities Depository and
Clearing Corporation.
Inquire about the progress status
of major assets restructuring. The
May 19, 2016 The Company Phone call Individual Individual Company has given reply
according to the actual progress
status that has been disclosed.
Inquired the number of
shareholders till May 15. The
Company provided the
June 15, 2016 The Company Phone call Individual Individual
information released by the
Securities Depository and
Clearing Corporation.
Inquired the specific operating
conditions in Q2. The Company
June 30, 2016 The Company Phone call Individual Individual suggested the investor to focus on
the 2016 Semi-annual Report to
be disclosed soon.
34
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Chapter 5 Important Matters
I. Governance of the Company
In the report period, the Company has constantly improved the governance structure and internal control structure and
standardize the governance level in strict accordance with the Company Law of the People's Republic of China, the
Securities Law of the People's Republic of China, the Code of Corporate Governance for Listed Companies in China,
and other laws and regulations stipulated by China Securities Regulatory Commission. However, there were still
problems as follows:
1. The controlling shareholder exercised the Property Right Representative Report System for management of the
Company. The Company's controlling shareholder SEG Group is a state-controlled corporation in Shenzhen and
Shenzhen State-owned Assets Supervision and Administration Bureau is the controlling shareholder of SEG Group. It
must implement the Property Right Representatives Report System for state-owned assets management according to the
management methods of Shenzhen for state-owned assets.
2. In respect of assessment on human resources, the Company's controlling shareholder SEG Group implemented the
annual performance assessment on Senior Executives according to the completing of annual operation indicators and
other indicators stipulated by SEG Group.
3. The Company reported undisclosed information to the major shareholders and the actual controller.
The Company reports the non-public information to the major shareholders and the actual controller based on the
property right representative reporting system and requirements of the national statistical departments. In accordance
with the requirements of state-owned assets supervision department, the Company has been submitting monthly financial
reports to the major shareholders and the actual controller and reporting important issues to the major shareholders and
the actual controller before these issues are disclosed. The Company submitted the Undisclosed Information Provided by
Listed Companies for Major Shareholders or Actual Controller and Letter of Commitment to Shenzhen Securities
Regulatory Bureau on October 18, 2007. SEG Group offered the Letter of Commitment on Strengthening Management of
Undisclosed Information to Shenzhen Securities Regulatory Bureau. Meanwhile, the Company has established and
implemented the Non-public Information Insider Reporting System and the Confidentiality System of Shenzhen SEG Co.,
Ltd for Insiders of Non-public Information and has monthly reported to Shenzhen Securities Regulatory Bureau about its
reports of unpublicized information. Senior executives and all employees at the headquarters signed a Confidentiality
Agreement with the Company on July 15, 2009. The Confidentiality Agreement clearly stipulates that all employees are
obligated to hold confidential the business secrets and undisclosed information of the Company.
The unpublicized information the Company offered to the Company's major shareholders and actual controller in the
report period is as follows:
Relationship
Organization
between the Time or
Serial to which Type of Procedure
organization Procedure of report period of Basis for report
No. information information of approval
and the report
is reported
Company
The invested corporation of the
Company and the financial staff The document Notice about
The flash report Approved
at the Headquarters prepare the Formulation of the Monthly by the
of main
report and consolidate the Flash Report of Enterprises
Controlling financial Board of
SEG statements, which are reviewed Supervised by Stated-owned
1 shareholder indicators of Monthly Directors
Group by the leadership of the Assets Supervision and
(30.24%) the Company Agree to
Financial Department and Administration Commission
registered in the
reported through the of the State Council (SASAC
Shenzhen submission.
State-owned Asset Management [2003]23)
Information System.
35
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Relationship
Organization
between the Time or
Serial to which Type of Procedure
organization Procedure of report period of Basis for report
No. information information of approval
and the report
is reported
Company
The invested corporation of the The document Notice about Approved
Company and the financial staff Formulation of the Monthly
Summary sheet by the
at the Headquarters prepare the Flash Report of Enterprises Board of
Controlling of
SEG Group sheet and consolidate the Supervised by Stated-owned
2 shareholder implementation Monthly Directors
statements, which are reported Assets Supervision and
(30.24%) of monthly Agree to
through the State-owned Asset Administration Commission
expense budget the
Management Information of the State Council (SASAC
System. [2003]23) submission.
The invested corporation of the The document Notice about Approved
Company and the financial staff Formulation of the Monthly
by the
at the Headquarters prepare the Flash Report of Enterprises Board of
Controlling Summary sheet
sheet and consolidate the Supervised by Stated-owned
3 SEG Group shareholder of monthly cash Monthly Directors
statements, which are reported Assets Supervision and
(30.24%) flow Agree to
through the State-owned Asset Administration Commission
Management Information of the State Council (SASAC the
System. [2003]23) submission.
The document Notice about Approved
Formulation of the Monthly
Summary sheet The financial personnel at the by the
Flash Report of Enterprises Board of
Controlling of deposits, Headquarters prepare the sheet
Supervised by Stated-owned Directors
4 SEG Group shareholder financing, and that is reported through the Quarterly
Assets Supervision and
(30.24%) loans of the State-owned Asset Management Agree to
Administration Commission
Headquarters Information System. the
of the State Council (SASAC
[2003]23) submission.
The invested corporation of the The document Notice about Approved
Summary sheet
Company and the financial staff Formulation of the Monthly
of quarterly by the
at the Headquarters prepare the Flash Report of Enterprises Board of
Controlling non-operating
SEG Group sheet and consolidate the Supervised by Stated-owned
5 shareholder gains and losses Quarterly Directors
statements, which are reported Assets Supervision and
(30.24%) of the Company Agree to
through the State-owned Asset Administration Commission
registered in the
Management Information of the State Council (SASAC
Shenzhen submission.
System. [2003]23)
It has been reported since June
Summary sheet 2009. The document Notice about
Approved
of quarterly The invested corporation of the Formulation of the Monthly
by the
information on Company and the financial staff Flash Report of Enterprises
Controlling Board of
SEG investment at the Headquarters prepare the Supervised by Stated-owned
6 shareholder Quarterly Directors
Group properties of sheet and consolidate the Assets Supervision and
(30.24%) Agree to
the Company statements, which are reported Administration Commission
the
registered in through the State-owned Asset of the State Council (SASAC
Shenzhen [2003]23) submission.
Management Information
System.
36
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Relationship
Organization
between the Time or
Serial to which Type of Procedure
organization Procedure of report period of Basis for report
No. information information of approval
and the report
is reported
Company
Monthly
consolidated
statements
(including the
They should be reported every Approved
Balance Sheet,
month after being printed, by the
the Profit
signed and sealed and reported
Controlling Statement, the The Notice of Shenzhen SEG Board of
every quarter through the
7 SEG Group shareholder Cash Flow Monthly Co., Ltd on Submitting of Directors
State-owned Asset Management
(30.24%) Statement, the Monthly Statements Agree to
Information System. They have
Notes to the
been reported on line from July
Preparation of submission.
2008.
the Statements
and the
Financial
Statements)
Controlling It was provided by Article
SEG Group shareholder Three of the Statistics Law of
(30.24%) the People's Republic of
China that state organs,
social organizations,
corporations, public
institutions and privately or
individually owned
Statistical
businesses, on which
survey on the Approved
statistical survey is
statements or by the
implemented, must comply
monthly and Board of
Monthly with the Statistics Law and
annual reports
8 Sealed by the Company and the regulations of the state Directors
of the
Shenzhen annually and provide statistical data Agree to
Government production of
Statistics faithfully but not make a the
branch electronics
Bureau false report, conceal data, submission.
information
refuse to report, delay the
industry
report, or fabricate or falsify
data. Self-governing mass
organizations at the grass
roots level and citizens have
the obligation to provide
truthfully the information
required by the statistical
survey of the state.
37
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Relationship
Organization
between the Time or
Serial to which Type of Procedure
organization Procedure of report period of Basis for report
No. information information of approval
and the report
is reported
Company
The document Notice about Approved
Formulation of the Monthly
by the
Flash Report of Enterprises Board of
Controlling Summary sheet
Supervised by Stated-owned
9 SEG Group shareholder of quarterly Sealed by the Company Quarterly Directors
Assets Supervision and
(30.24%) financial assets Agree to
Administration Commission
of the State Council (SASAC the
[2003]23) submission.
The list of the top 100
Analysis of
shareholders and the trading The requirements from 2013 The Board
investor
Shenzhen Actual information of each quarter Shenzhen state-owned of Directors
10 relations in Quarterly
SASAC controller should be provided by the enterprise capital operation agrees to
2016 Q1 and
Securities Depository and conference report.
Q2
Clearing Corporation.
II. Litigation issues
Major Lawsuits and Arbitrations
√ Applicable □ Not applicable
Amount Whether
Basic Information About (RMB: ten Estimated Judgment Result and Judgment Disclosure Disclosure
Progress
Lawsuits and Arbitrations thousand Liabilities Impact Execution Date Index
Yuan) Occurred
(1) In March 2013, Xingning District People's
Nanning SEG leased the Court has refused
house located on 1F and 2F The case was Nanning SEG's claim via
of podium building of called in (2015) Xingmin Yi Chu
Nanning Zhidi Square at court on Zi Di Civil Judgment No.
158 East Renmin Road, 1590, the (2015) Xingmin
September
Xingning District, Nanning 28, 2015, Yi Chu Zi Di Civil
as the electronics market. and the court Judgment No. 1393
The agreed term of tenancy involves in approximately
given
is from March 18, 2013 to first-instance 12 million Yuan, the
March 17, 2025. Due to a judgment on Company has decided not
large area of water seepage to lodge any appeal. In Being
1,200 Yes June 28,
and leaking existing with 2016. The addition, considering the implemented...
the house leased, Nanning Company Company has accrued in
SEG lodged a lawsuit at 2015 estimated liabilities
has decided
Xingning District People's not to lodge of 7 million Yuan for the
Court after negotiation with an appeal as issue, Nanning SEG has
Haiqi Company for several estimated a due rent of
at the
times with no solution disclosure 2.3 million Yuan, the
achieved. As Nanning SEG date of this remaining amount of
failed to pay the rental and compensation has minor
report.
breached the contract, effect on net profit of the
Nanning SEG was also Company for 2016 and
accused by Haiqi Company does not exceed 1% of
38
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
Amount Whether
Basic Information About (RMB: ten Estimated Judgment Result and Judgment Disclosure Disclosure
Progress
Lawsuits and Arbitrations thousand Liabilities Impact Execution Date Index
Yuan) Occurred
at the same court. The court unaudited net assets of the
tried these two cases Company at the end of
combination. last year, therefore the
issue will not generate
great effect on the
Company's production
and operation.
(2) On February 4, 2013,
Suzhou SEG signed
Commercial Lease
Contract for Underground
Space under Guangji South
Road on Suzhou Rail
Transit Line No.1 with
Suzhou Rail Transit Group
Co., Ltd. (hereinafter
referred to as "Rail Transit The trial of
Group" whereby Suzhou second
SEG leases the instance
underground space under court in the
Guangji South Road on case was
Suzhou Rail Transit Line completed
No.1 for a term of on February
ninety-six months. After 07, 2016.
signing of contract, due to The
Ruling Suzhou SEG to
difficulty in project judgment of
pay the other party the Has been
operation caused by market 284.19 Yes second
amount of compensation fulfilled.
change, both parties held instance
prior to April 05, 2016.
repeated negotiations on dismissed
change of cooperation the appeal of
conditions with no Suzhou SEG
agreement reached on new and upheld
conditions of cooperation, the
the project finally enters first-instance
the liquidation stage. On judgment on
January 26, 2015 Suzhou March 21,
Rail Transit Group 2016.
submitted a case to the
court requesting to rule
Suzhou SEG to assume the
liquidated damages 2.1
million Yuan, rent during
decoration period 800,000
Yuan, and water &
electricity fee 364,200
Yuan.
Other lawsuits and arbitrations
□ Applicable √ Not applicable
39
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
III. Matters questioned by media
□ Applicable √ Not applicable
The Company did not have any matters commonly questioned by media in the report period.
IV. Bankruptcy and reorganization
□ Applicable √ Not applicable
No bankruptcy and reorganization matter is involved in the report period.
V. Transaction in assets
1. Information on Asset Acquisition
□ Applicable √ Not applicable
No asset acquisition is involved in the report period.
2. Asset sales
□ Applicable √ Not applicable
No asset sales are involved in the report period.
3. Business combination
□ Applicable √ Not applicable
No business combination is involved in the report period.
VI. Implementation and impact of the stock incentive plan
□ Applicable √ Not applicable
No stock incentive plan and implementation is involved in the report period.
40
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
VII. Major relevant transactions
1. Transactions concerning routine operation
√ Applicable □ Not applicable
Transaction Amount Transaction Whether
Pricing
Amount Proportion limit Exceeding Transaction Available
Related Party Associated Transaction Associated Principles of Transaction Disclosure Disclosure
(RMB ten Occupied in the approved the Clearing similar market
Transaction Relationship Type Transactions Associated price Date Index
thousand Transactions of (10,000 Approved Form price
Transactions
Yuan) the Same Kind Yuan) Quota
The warehouse
with its area of 65.77 According to 60-125
Shenzhen SEG Controlling Property Determined March 28, (Cninfo
809.26 square (Yuan/square 32.81 0.09% 100 No the (Yuan/square
Group Co., Ltd. shareholder lease by the market 2015 Website)
meters on the 8th meters/month) agreement meters/month)
floor of SEG Plaza
Controlling
shareholder entrusts
its invested
According to
Shenzhen SEG Controlling Trusteeship enterprises SEG Determined RMB (Cninfo
0.00% 20 No the --
Group Co., Ltd. shareholder management Communications by the market 200,000.00 Website)
agreement
Market to the
Company for
management.
Shenzhen SEG
F4 West Building 76.58 According to
Real Estate Subsidiary of Property Determined (Cninfo
No.4 of SEG (Yuan/square 41.14 0.12% 140 No the
Investment Co., shareholders lease by the market Website)
Technology Park meters/month) agreement
Ltd.
Total -- -- 73.95 -- 260 -- -- -- -- --
Detailed information about wholesale return inward Not applicable
The actual implementation of transactions concerning routine
operation in the report period (if any), whose aggregate amounts Not applicable
were forecast per category.
Reasons for the disparity between the transaction price and market Not applicable
41
Full-text of 2016 Semi-annual Report of Shenzhen SEG Co., Ltd.
price (if applicable)
42
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
2. Relevant transactions due to asset sales and acquisition
□ Applicable √ Not applicable
No relevant transaction due to asset sales and acquisition is involved in the report period.
3. Relevant transactions due to joint external investment
□ Applicable √ Not applicable
No relevant transaction due to joint external investment is involved in the report period.
4. Creditor's rights and liabilities of related parties
□ Applicable √ Not applicable
No creditor's rights and liabilities of related parties are involved in the report period.
5. Other related transactions
□ Applicable √ Not applicable
No other major related transactions are involved in the report period.
VIII. Non-operating capital occupation on the listed company by the controlling
shareholders and related parties
□ Applicable √ Not applicable
No non-operating capital occupation on the listed company by the controlling shareholders and related parties is involved in the report
period.
IX. Important contracts and implementation
1. Trusteeship, contracting, and leasing issues
(1) Trusteeship issues
√ Applicable □ Not applicable
Explanations to trusteeship
The controlling shareholder SEG Group entrusts the Company to manage the controlled SEG Communications Market.
Projects which bring the losses and gains that take up 10% of the profit amount of the Company in the report period.
□ Applicable √ Not applicable
In the report period, the Company has no entrusted projects which bring the losses and gains that take up 10% of the profit amount of the
Company in the report period.
(2) Contracting issues
□ Applicable √ Not applicable
No contracting issue is involved within the report period.
(3) Leasing issues
□ Applicable √ Not applicable
No leasing issue is involved within the report period.
2. Guarantee issues
□ Applicable √ Not applicable
No leasing issue is involved within the report period.
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Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
3. Other important contracts
√ Applicable □ Not applicable
Book Appraisal
value of value of
Contract contract contract Name of Base date Transaction
Connected Execution by the
Contract signing involved involved appraisal of assets Pricing price Associated
Lender Borrower transaction end of the report
object date/Contract assets assets agency (if evaluation principle (10,000 relationship
or not period
Period (10,000 (10,000 any) (if any) Yuan)
Yuan) (if Yuan) (if
any) any)
On October 14,
2013, the 3rd
special meeting
of the 6th Board
of Directors
discussed and
approved the
Proposal about
Offering
Shenzhen SEG
E-Commerce
Co., Ltd. with
Financial
Assistance. The
Company offers
the 51% share
controlled SEG
E-commerce
with the financial
assistance of
Shenzhen 60,000,000 Yuan
Shenzhen
SEG financial October 11, Not for one year
SEG Co., N/A Fair value 6,000 No
E-Commerce assistance 2013 applicable (from September
Ltd.
Co., Ltd. 15, 2013 to
September 14,
2014) and pays
based on the
requirements of
the e-commerce
business. SEG
E-Commerce
pays expenses
for using the
funds to the
Company based
on its actual loan
amount and
period. The
expenses for
using the funds is
charged with the
benchmarking
interest rate of
the one-year
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Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Book Appraisal
value of value of
Contract contract contract Name of Base date Transaction
Connected Execution by the
Contract signing involved involved appraisal of assets Pricing price Associated
Lender Borrower transaction end of the report
object date/Contract assets assets agency (if evaluation principle (10,000 relationship
or not period
Period (10,000 (10,000 any) (if any) Yuan)
Yuan) (if Yuan) (if
any) any)
bank loan in the
same period and
should be paid on
due date. As of
the end of the
report period,
SEG e-commerce
business has paid
off the above
amounts and the
corresponding
accrued expenses
for using funds.
The 15th special
meeting of the
6th Board of
Directors held on
July 29, 2014
reviewed and
approved the
Proposal on the
Current Fund
Loan of RMB
10,000,000 Yuan
by Shenzhen SEG
Industry
Investment Co.,
Shenzhen Ltd from
Shenzhen SEG Interest Shenzhen SEG
Financial August 07, Not
SEG Co., Industrial N/A not 4,200 No Co., Ltd. The
assistance 2014 applicable
Ltd. Investment accrued Company
Co., Ltd. provides RMB
10,000,000 Yuan
as cash flow for
the
wholly-owned
subsidiary SEG
Industry. Till
now, the
Company has
loaned a total of
RMB 42,000,000
Yuan for SEG
Industry. No
interest is
accrued for the
45
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Book Appraisal
value of value of
Contract contract contract Name of Base date Transaction
Connected Execution by the
Contract signing involved involved appraisal of assets Pricing price Associated
Lender Borrower transaction end of the report
object date/Contract assets assets agency (if evaluation principle (10,000 relationship
or not period
Period (10,000 (10,000 any) (if any) Yuan)
Yuan) (if Yuan) (if
any) any)
above funds.
The 23rd special
meeting of the
6th Board of
Directors held on
May 27, 2015
reviewed and
approved the
Proposal on the
Financial Aid of
RMB 10,000,000
Yuan for Suzhou
SEG Digital
Square
Management
Co., Ltd. The
Suzhou SEG Company
Shenzhen
Digital Plaza Financial Not provides RMB
SEG Co., June 08, 2015 N/A Fair value 1,000 No
Management assistance applicable 10,000,000 Yuan
Ltd.
Co., Ltd. for the
wholly-owned
subsidiary
Suzhou SEG
Digital for
helping the
business
development of
Suzhou SEG
Digital. No
interest is
accrued for the
above funds. The
loan term is from
June 8, 2015 to
June 07, 2017.
The
Company
plans to,
through
Being
Shenzhen Shenzhen issuance of
February 03, Controlling implemented
SEG Co., SEG Group shares and N/A Fair value 450,417.46 Yes
2016 shareholder according to the
Ltd. Co., Ltd. payment of
agreement
cash,
purchase
100% stock
right of SEG
46
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Book Appraisal
value of value of
Contract contract contract Name of Base date Transaction
Connected Execution by the
Contract signing involved involved appraisal of assets Pricing price Associated
Lender Borrower transaction end of the report
object date/Contract assets assets agency (if evaluation principle (10,000 relationship
or not period
Period (10,000 (10,000 any) (if any) Yuan)
Yuan) (if Yuan) (if
any) any)
Maker, 55%
stock right of
Shenzhen
SEG Kangle
Enterprise
Development
Co., Ltd.,
100% stock
right of
Shenzhen
SEG
Properties
Development
Co., Ltd. and
79.2% of
Shenzhen
SEG Real
Estate
Investment
Co., Ltd.
held by SEG
Group; and
issue shares
to no more
than 10
specific
investors via
private
placement to
raise the
supporting
funds.
4) Other important transactions
□ Applicable √ Not applicable
No important transaction is involved in the report period.
X. Commitments made by the Company or the shareholders holding more than 5%
shares, which were made in or lasted into the report period
√ Applicable □ Not applicable
Commitment Commitment
Commitments Promiser Content Performance
date term
Commitment for share reform Not applicable
47
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
Commitments in the Acquisition Report and
Not applicable
the Report of Changes on Equity
1. The Company is a
limited liability
company established
according to law and
existing validly, there
exists no bankruptcy,
dissolution, liquidation
and other situations
requiring termination
according to current
laws, regulations,
normative documents
and its articles of
association. The
Company has issued
shares and been listed
publicly according to
law, as a listed
company, it has the
subject qualification of
issuer to purchase assets
via private placement
and payment of cash
and asset purchaser as Commitments
Before
Commitments made at the time of Shenzhen SEG specified by Chinese February 03, were fulfilled in
completion of
restructuring of major assets Co., Ltd. laws, regulations and 2016 the report
restructuring
normative documents. period.
2. The Company has in
recent three years
complied with the
relevant industrial and
commercial
administration laws and
regulations, running
enterprises abiding by
the law, and has no
record of receiving
administrative
punishments with
serious cases due to
breach of industrial and
commercial
administration laws and
regulations; the
Company does not exist
any situations requiring
termination according to
relevant laws,
regulations, normative
documents and articles
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Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
of association. The
Company does not have
any legal impediments
in going-concern.
3. The Company's
holding of general
meeting, board of
directors meeting, board
of supervisors meeting,
contents of resolutions
and their signing in
recent three years are
legal, effective and
consistent with the
provisions of relevant
laws, regulations,
normative documents
and articles of
association; the
Company's
stockholders' meeting's
authorization to board
of directors in recent
three years are legal,
effective and consistent
with the provisions of
relevant laws,
regulations, normative
documents and articles
of association; the
Company's major
decisions since being
listed are legal,
compliant with
regulations, true and
effective. 4. The
Company does not exist
any situations of
receiving administrative
penalty or criminal
punishment from China
Securities Regulatory
Commission due to
breach of securities
laws, administrative
laws & regulations or
rules, or any situations
of receiving
administrative penalty
or criminal punishment
with serious cases due
to breach of industrial
and commercial, tax,
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Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
land, environmental
protection, customs
laws, administrative
laws or regulations. 5.
Not any pending or
foreseeable significant
lawsuit, arbitration or
administrative penalty
cases exists in the
Company. The
Company's directors,
supervisors and senior
executives do not have
any pending or
foreseeable significant
lawsuit, arbitration or
administrative penalty
cases. 6. There does
not exist any situation of
the Company's interests
being serious damaged
by controlling
shareholder or actual
controller which has not
been eliminated. 7.
Not any situation of
illegal external
guarantee exists in the
Company and its
affiliated companies,
which has not been
eliminated yet. 8.
The Company's current
directors, senior
executives do not have
any situation of
receiving administrative
penalty from CSRC in
recent thirty-six months,
or receiving public
censure from stock
exchange during recent
twelve months.
9. The Company and its
current directors and
senior executives do not
have any situations of
being investigated by
judicial authorities due
to alleged crimes or
being investigated by
CSRC due to alleged
irregularities. 10.
50
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
Before this
restructuring, the
connected transactions
carried out by the
Company fulfilled fair
policy-making
procedure as necessary
and are legal and
effective. 11.
Not any situation of
seriously damaging
investor's legitimate
rights and interests and
public interests exists in
the Company. 12.
The Company's
implementation of this
major assets
restructuring complies
with the substantial
conditions for listed
companies restructuring
as required by the
relevant laws,
regulations and
normative documents,
including but not
limited to: (1)
Being consistent with
national industrial
policy and
environmental
protection, land
administration,
anti-monopoly and other
laws and administrative
regulations; (2) Will not
cause the Company not
to meet the stock listing
conditions; (3) The
assets involved with
major assets
restructuring are fairly
priced and do not exist
any situations of
damaging the legitimate
rights and interests of
the Company and
shareholders; (4) Being
conducive to the
Company's
strengthening of its
going-concern
51
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
capability, and there
exists no situations
which will lead to the
result that the
Company's main assets
after restructuring are
cash or there are no
specific business
running; (5) Being
conducive to the
Company's keeping
independence with
actual controller and its
connected persons in
business, assets,
finance, personnel,
institution and other
aspects, complying with
the relevant CSRC
regulations concerning
independence of listed
companies; (6) Being
conducive to the
Company's maintenance
of sound and effective
legal governance
structure; (7) This
restructuring follows the
principle of being
conducing to improving
the Company's asset
quality, improving
financial situation and
enhancing sustained
profitability; (8) This
restructuring follows the
principle of being
conducive to reducing
connected transactions
and avoiding horizontal
competition. 13.
After completion of this
restructuring, the
Company is committed
to continue to maintain
independence with
controlling shareholders
and the connected
parties under their
control in business,
asset, finance,
personnel, institution
and other aspects, so as
52
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
to comply with relevant
CSRC regulations
concerning
independence of listed
companies. 14. This
restructuring will not
cause significant
adjustment to the
structure of board of
directors, board of
supervisors, senior
executives of the
Company, and also will
not involve any
adjustment in major
business
decision-making rule &
procedure, information
disclosure mechanism.
After completion of this
restructuring, the
Company will strictly
run and continuously
improve legal person
governance structure
according to the
requirements of
Company Law,
Securities Law, and
Corporate Governance
Standards for Listed
Companies and other
laws, regulations and
articles of association.
15. The Framework
Agreement for Issuance
of Shares and Payment
of Cash for Assets
Acquisition (attached
with entry-into-force
conditions) and its
relevant formal
transaction agreement
signed by the Company
with Shenzhen SEG
Co,, Ltd. as regarding
this restructuring are
reached by different
parties to this
transaction of
restructuring on a
equally basis following
fair and reasonable
53
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
principle; these
agreements are attached
with precedent
conditions and are
binding on above parties
only after these
precedent conditions are
fully satisfied; the
agreement is legal and
effective and does not
contain any contents
inconsistent with the
relevant laws,
regulations and
normative documents.
16. The Company
undertakes and
guarantees that the
calling and convening
procedure and voting
procedure of the board
of directors meeting and
shareholders' meeting
are consistent with the
regulations of the
relevant laws,
regulations, normative
documents and articles
of association, and the
contents of resolutions
are legal and effective.
17. The final price of
this restructuring will be
determined through
consultations based on
pricing principle
commonly determined
by all parties in
accordance with the
appraisal result issued
by appraisal agency
with qualification of
carrying out securities
business, which is the
expression of true
meaning of various
parties. 18. The
information disclosure
made by the Company
for this restructuring
complies with the
regulations of relevant
laws, regulations, rules
54
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
and normative
documents, and there
exists no contract,
agreement or
arrangement which shall
be disclosed but not
disclosed. 19. The
Company's current
directors, supervisors,
senior executives and
shareholders with more
than 5% shareholding
and other insiders
carried out
self-inspection on the
sales and purchases of
Shenzhen SEG stocks
within six months (from
May 04, 2015 to
November 04, 2015)
prior to the date of
trading suspension of
this restructuring and
issued self-inspection
report, except Liu
Zhijun, Zheng Dan, Zhu
Longqing, Tian Jilliang,
Ying Huadong and
Xuning as disclosed in
self-inspection reports
who have purchased and
sold the Company's
stocks, no other
directors, supervisors,
senior executives and
shareholders have
purchased or sold any
stocks of Shenzhen
SEG, and there exists no
situation that the
relevant personnel
making use of inside
information of this
restructuring in
purchasing and selling
stocks of the Company
during self-inspection
period. 20. After
completion of this
restructuring, the
Company will continue
to perform necessary
connected transaction
55
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
deliberation procedure
according to law,
regulations, normative
documents and articles
of association, the
legitimate rights and
interests of Shenzhen
SEG and the whole
shareholders. 21. After
completion of this
restructuring, the
Company's controlling
shareholder is still
Shenzhen SEG Co.,
Ltd., and the actual
controller is still the
State-owned Assets
Supervision and
Administration
Commission of the
People's Government of
Shenzhen Municipality.
This restructuring will
not lead to change of
controlling shareholder
and actual controller of
the Company.
1. The subject company
is a limited liability
company or
stock-limited company
established and validly
existing according to
law with legitimate
business qualification;
the subject company has
obtained all approvals,
permission, Commitments
SEG Group: authorization and Before
February 03, were fulfilled in
Shenzhen SEG permits required for its completion of
2016 the report
Group Co., LTD setting up and operation restructuring
period.
of business, all such
approvals, permission,
authorization and
permits are valid and
there exists no reasons
or situations which may
cause the above
approvals, permission,
authorization and
permits invalid.
2. The subject company
56
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
does not experience any
major lawbreaking or
irregularity behaviors in
production operation,
nor any situations where
termination is required
according to the
requirements of relevant
laws, regulations,
normative documents
and the Articles of
Association. As of the
date of issuance of this
commitment letter, the
subject company has no
pending or predictable
significant lawsuit,
arbitration or
administrative penalty
with amount of subject
of more than one
million or which will
generate adverse impact
on its operation.
3. The subject company
will independently and
fully fulfill the labor
contracts it signed with
employees. 4. If the
subject company is
subject to any recovery
of fees or penalty from
the relevant competent
organization in
industrial and
commerce, tax,
employee salaries,
social insurance,
housing fund, business
qualification or
competent authorities
due to any facts existing
before this restructuring,
the Company will fully
indemnify the subject
company for all fees
owned by subject
company and assume all
losses occurred by
subject company and
Shenzhen SEG as a
result of this. 5.
The subject company
57
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
legally possesses the
ownership and/or right
of usage of office space,
office equipment,
trademark and other
assets as necessary to
guarantee normal
production operation,
has independent and
complete assets and
business structure, has
legal ownership to its
main assets with
independent, complete
and clear indication of
ownership. 6. The
subject company does
not have lawsuit,
arbitration, judicial
mandatory enforcement
and other situations
which interferes with
the transfer of company
ownership, and has not
incurred any external
guarantee that is against
laws and articles of
association of the
Company. After
completion of this
restructuring, if any loss
is caused to Shenzhen
SEG and the subject
company due to the
Company's breach of
the above commitment,
the Company agrees to
assume the
abovementioned
liability of
indemnity/compensation
to Shenzhen
SEG/subject company.
1. Guarantee the
independence of
personnel of Shenzhen Commitments
Shenzhen SEG SEG and subject February 03, were fulfilled in
Long-term
Group Co., Ltd. company (1) guarantee 2016 the report
that after completion of period.
this restructuring the
labor, personnel and
compensation
58
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Commitment Commitment
Commitments Promiser Content Performance
date term
management of
Shenzhen SEG are
independent from the
Company and other
companies, enterprises
or other economic
organizations and other
connected parties under
control of the Company.
(2) Guarantee that after
completion of this
restructuring, the senior
executives of Shenzhen
SEG and the subject
company hold full-time
position at Shenzhen
SEG and the subject
company and receive
compensation, and will
not assume any duties
other than director and
supervisor in the
Company and other
companies, enterprises
or other economic
organizations and other
connected parties under
control of the Company.
(3) Guarantee not to
interfere with the
shareholders' meeting
and board of directors
meeting's exercise of
power in
appointment/dismissal
of personnel after
completion of this
restructuring.
2. Guarantee the
independence of
institutions of Shenzhen
SEG and subject
company (1) guarantee
that after completion of
this restructuring
Shenzhen SEG and
subject company will
have sound corporate
governance structure
and independent,
complete organization.
(2) Guarantee that after
completion of this
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restructuring the
shareholders' meeting,
board of directors
meeting and board of
supervisors meeting of
Shenzhen SEG and
subject company will
exercise duties and
powers according to
laws, regulations and
articles of association of
Shenzhen SEG and
subject company. 3.
Guarantee the assets of
Shenzhen SEG and
subject company are
independent and
complete (1) guarantee
that after completion of
this restructuring
Shenzhen SEG and
subject company has
independent and
complete assets relating
to production and
operation. (2)
Guarantee that after
completion of this
restructuring the site for
business operation of
Shenzhen SEG and
subject company are
independent of the
Company and other
companies, enterprises
or other economic
organizations and other
connected parties under
control of the Company.
(3) Except normal
operational intercourse,
guarantee that after
completion of this
restructuring Shenzhen
SEG and subject
company do not have
any situation that funds
or assets are possessed
by the Company and
other companies,
enterprises or other
economic organizations
and other connected
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parties under control of
the Company. 4.
Guarantee the
businesses of Shenzhen
SEG and subject
company are
independent (1)
guarantee that after
completion of this
restructuring Shenzhen
SEG and subject
company have relevant
qualification for
independently carrying
out operational
activities, and possess
independent, sustainable
market-oriented
operational capability.
(2) Except the assets
owned and business
operated before validity
date of commitment,
during the period as
controlling shareholder
of Shenzhen SEG, in
order to guarantee
sustainable development
of Shenzhen SEG, the
Company will exercise
supervisory and
restriction on operating
activities of its own and
the affiliated enterprises
under its control, and
will not establish new or
acquire any assets or
businesses same or
similar with its main
businesses within the
operation area of
Shenzhen SEG, and will
also not be engaged in
any activities which
may damage the
interests of Shenzhen
SEG and other
companies, enterprises
or other economic
organizations under
control of Shenzhen
SEG; if in future there
exists any business
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opportunity same or
similar with other main
businesses within
Shenzhen SEG
operation area, such
opportunity will
preferentially
recommended to
Shenzhen SEG and
other companies,
enterprises or other
economic organizations
under control of
Shenzhen SEG.
However, those meeting
one of the following
conditions are excluded:
(1) Due to national
laws, regulations and
policies and other
reasons, any
commercial properties
and real estate
development projects
administratively
appropriated or
allocated through
oriented protocols by
government to SEG
Group and any
enterprises invested by
it; or (2) when the
general conditions of
tender, transfer or
assignment of specific
commercial properties
and real estate
development projects
have specific
requirements on bidder
or assignee, Shenzhen
SEG does not possess
but SEG Group
possesses such
conditions. For any
commercial properties
and real estate
development projects
obtained due to meeting
the above exclusion
conditions which are
same with or have
horizontal competition
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relationship with
Shenzhen SEG's main
businesses, beforehand
investment and
construction may be
carried out by SEG
Group, if in the opinion
of Shenzhen SEG that
these projects have
possessed the conditions
for injection into
Shenzhen SEG, SEG
Group will, after receipt
of the written notice of
acquisition from
Shenzhen SEG,
immediately negotiate
with Shenzhen SEG on
the matter of acquisition
so as to transfer such
projects to Shenzhen
SEG. (3) Guarantee that
after completion of this
restructuring, the
Company and other
companies, enterprises,
other economic
organizations or other
connected parties under
control of the Company
will reduce connected
transactions with
Shenzhen SEG and
subject company and
other companies,
enterprises, other
economic organizations
or other connected
parties under their
control; for any
connected transactions
which are indeed
necessary and
unavoidable, guarantee
to carry out fair
operation following
market principle at fair
price and fulfill relevant
approval procedure and
information disclosure
obligations according to
the provisions of
relevant laws,
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Commitments Promiser Content Performance
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regulations and
normative documents.
5. Guarantee the
financial independence
of Shenzhen SEG and
subject company (1)
Shenzhen SEG and the
subject company will
after completion of this
restructuring establish
independent financial
department and
independent and
standardized financial
accounting system. (2)
Guarantee Shenzhen
SEG and the subject
company will after
completion of the
restructuring
independently open
bank accounts, and will
not share bank accounts
with the Company and
other companies,
enterprises, other
economic organizations
or other connected
parties under control of
the Company. (3)
Guarantee that after
completion of this
restructuring the
accountants of
Shenzhen SEG and the
subject company will
not assume part-time
jobs in the Company
and other companies,
enterprises, other
economic organizations
or other connected
parties under control of
the Company. (4)
Guarantee that after
completion of this
restructuring the
accountants of
Shenzhen SEG and
subject company will be
able to independently
make financial
decisions, and the
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Commitments Promiser Content Performance
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Company will not
interfere with the use of
funds of Shenzhen SEG
and subject company.
(5) Guarantee that after
completion of this
restructuring Shenzhen
SEG and the subject
company will pay tax
independently according
to law. If the Company
is in breach of any of
above commitments, the
Company will assume
all losses caused to
Shenzhen SEG and
subject company as a
result thereof.
1. The Company does
not exist any of the
following situations as
specified in Clause 6,
Administrative
Measures On
Acquisition Of Listed
Companies: (1) Damage
legitimate rights and
interests of the
Company acquired and
its shareholders utilizing
acquisition of listed
company; (2) With large
amount of outstanding
debts and this in-debt Commitments
Before
Shenzhen SEG status has lasted for a February 03, were fulfilled in
completion of
Group Co., Ltd. certain period of time; 2016 the report
restructuring
(3) Has actual or alleged period.
serious illegal activities
in recent three years; (4)
Has serious behaviors of
breaching promises in
securities market in
recent three years; (5)
Other situations in
which no acquisition of
listed companies are
allowed according to
laws and administrative
regulations and in the
opinions of CSRC. 2.
The Company and main
executives of the
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Commitments Promiser Content Performance
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Company have not
received any
administrative penalties
(those obviously
unrelated with securities
market excluded),
criminal punishment or
be involved with any
serious civil lawsuit or
arbitration related with
economic disputes in
recent five years. If the
Company is in breach of
any of above
commitments, the
Company will assume
all losses caused to
Shenzhen SEG and
subject company as a
result thereof.
1. The Company is
registered in the
People's Republic of
China with full capacity
for civil conduct, and
possesses legal subject
qualification to
participate in this
restructuring, sign
agreement with
Shenzhen SEG, and
perform rights and
obligations under the
agreement. 2. The
Company has performed Commitments
Shenzhen SEG the obligation of capital February 03, were fulfilled in
Long-term
Group Co., Ltd. contribution to subject 2016 the report
company according to period.
law, and has no
behaviors of feigned
capital contribution,
deferred capital
contribution, withdrawal
of capital and other
behaviors in breach of
the obligations and
responsibilities it shall
assume as a shareholder,
and there are no
situations which may
affect the legal
existence of subject
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company. 3.
There exist no actual or
potential dispute over
ownership of
shareholding of the
subject company, and
there exists no situations
which may affect the
legal existence of
subject company.
4. The shareholding
held by the Company in
subject company is
actually legally owned,
and there exists no
actual or potential
dispute over ownership
of shareholding, no
trust, shareholding on
entrustment or similar
arrangement, no
commitment or
arrangement of
forbidden transfer or
limited transfer, no
pledge, freezing, seals
up, property
preservation or other
limitation of rights, and
also no lawsuit,
arbitration or other
forms of dispute which
would affect this
restructuring.
Meanwhile, the
Company guarantees
that the shareholding it
held in subject company
will maintain the status
until it is registered
through change of
registration under
Shenzhen SEG. 5.
The shareholding held
by the Company in
subject company are
assets with clear
ownership, the
Company guarantees
that there exists no legal
obstacles to stock
transfer after the
restructuring of
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Commitments Promiser Content Performance
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Shenzhen SEG is
approved by CSRC, and
there exist no credit and
debt disputes, and
promises to complete
formalities for
ownership transfer of
these shareholding
within the agreed
period. 6. Before
modified registration for
the shareholding held by
the Company in subject
company under
Shenzhen SEG, the
Company will guarantee
to maintain the subject
company in normal,
order and lawful
operation status, and
guarantee the subject
company will not carry
out assets disposal,
external guarantee or
addition of major debts
which are unrelated
with normal production
operation, or any
behaviors of illegal
transfer, assets and
business hiding. If it is
indeed necessary to
carry out any behaviors
related the
abovementioned
matters, it shall be
implemented only after
written permission from
Shenzhen SEG is
obtained under the
precondition of not in
breach of national laws,
regulations and
normative documents. 7.
The Company
guarantees that there
exist no ongoing or
potential lawsuit,
arbitration or dispute
which will affect the
Company's transfer of
the shareholding held by
it in subject company,
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and guarantee that there
are no restrictive
provisions in
agreements or contracts
signed by the Company
which may hinder the
Company's transfer of
shareholding it holds in
subject company. The
articles of association,
documents of internal
management rules of
subject company and
the contract or
agreement signed by it
do not have any
restrictive provision
which may hinder the
Company's transfer of
shareholding it holds in
subject company.
In case of violation of
its commitments, the
Company will assume
all losses caused to
Shenzhen SEG thereof.
1. In this restructuring,
the relevant assets
including part of
commercial electronics
markets under SEG
Group which constitute
horizontal competition
have not been injected
in the listed company,
and SEG Group will,
after completion of this
major assets Commitments
Shenzhen SEG restructuring, entrust February 19, were fulfilled in
Long-term
Group Co., Ltd. these assets to Shenzhen 2016 the report
SEG or any subsidiary period.
of Shenzhen SEG. 2.
Within five years after
completion of this
restructuring, SEG
Group will adopt all
necessary measures to
resolve the defects
existing with these
house properties, and
according to the
business needs of
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Commitments Promiser Content Performance
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Shenzhen SEG and the
completion status of
ownership of these
assets, integrate the
relevant assets including
the abovementioned
professional electronics
markets which
constitute horizontal
competition owned by
SEG Group into
Shenzhen SEG or
transfer them to a third
party via sales, transfer
and other feasible ways.
If SEG Group fails to
complete the above
matters on time, before
the injection of relevant
assets by SEG Group
into Shenzhen SEG,
SEG Group will handle
via the way of lease the
relevant assets to
Shenzhen SEG for
direct external
operation, and is entitled
to the corresponding
income from this part of
properties. The annual
rent for lease of this part
of properties by
Shenzhen SEG from
SEG Group is the
corresponding
depreciation of this part
of property assets. The
relevant profit and loss
from leasing
management of this part
of property assets will
be assumed and enjoyed
by Shenzhen SEG, by
which time both parties
will separately sign
relevant leasing
agreement. 2.
Except the assets owned
and business operated
before validity date of
the commitments,
during the period acting
as the controlling
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Commitments Promiser Content Performance
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shareholder/actual
controller of Shenzhen
SEG, in order to
guarantee continuous
development of
Shenzhen SEG, the
Company will exercise
supervisory and
restriction on operating
activities of its own and
the affiliated enterprises
under its control, and
will not establish new or
acquire any assets or
businesses same or
similar with its main
businesses within the
operation area of
Shenzhen SEG, and will
also not be engaged in
any activities which
may damage the
interests of Shenzhen
SEG and other
companies, enterprises
or other economic
organizations under
control of Shenzhen
SEG; if in future there
exists any business
opportunity same as or
similar to other main
businesses within
Shenzhen SEG
operation area, such
opportunity will
preferentially
recommended to
Shenzhen SEG and
other companies,
enterprises or other
economic organizations
under control of
Shenzhen SEG.
However, those meeting
one of the following
conditions are excluded:
(1) Due to national
laws, regulations and
policies and other
reasons, any
commercial properties
and real estate
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Commitments Promiser Content Performance
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development projects
administratively
appropriated or
allocated through
oriented protocols by
government to SEG
Group and any
enterprises invested by
it; or (2) when the
general conditions of
tender, transfer or
assignment of specific
commercial properties
and real estate
development projects
have specific
requirements on bidder
or assignee, Shenzhen
SEG does not possess
but SEG Group possess
such conditions. For any
commercial properties
and real estate
development projects
obtained due to meeting
the above exclusion
conditions which are
same with or have
horizontal competition
relationship with
Shenzhen SEG's main
businesses, beforehand
investment and
construction may be
carried out by SEG
Group, if in the opinion
of Shenzhen SEG that
these projects have
possessed the conditions
for injection into
Shenzhen SEG, SEG
Group will, after receipt
of the written notice of
acquisition from
Shenzhen SEG,
immediately negotiate
with Shenzhen SEG on
the matter of acquisition
so as to transfer such
projects to Shenzhen
SEG. In case of
violation of its
commitments, the
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Commitment Commitment
Commitments Promiser Content Performance
date term
Company will assume
all losses caused to
Shenzhen SEG and the
subject company and
other companies,
enterprises or other
economic organizations
under their control.
1. During the period that
the Company acts as
controlling shareholder
of Shenzhen SEG, the
Company and other
companies, enterprises,
other economic
organizations or other
connected parties under
control of the Company
will reduce as far as
possible connected
transactions with
Shenzhen SEG and
subject company and
other companies,
enterprises, other
economic organizations
or other connected
parties under their
control. 2. After Commitments
Shenzhen SEG completion of this February 03, were fulfilled in
Long-term
Group Co., Ltd. restructuring, for any 2016 the report
connected transactions period.
with Shenzhen SEG or
subject company which
are indeed necessary
and unavoidable, the
Company and other
companies, enterprises,
other economic
organizations or other
connected parties under
control of the Company
will carry out these
transactions following
market principle at fair
price and fulfill relevant
approval procedure,
perform information
disclosure obligations
and handle relevant
application and approval
procedure according to
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the provisions of
relevant laws,
regulations and
normative documents,
and will not damage the
legitimate rights and
interests of Shenzhen
SEG and other
shareholders utilizing
the dominant position of
controlling shareholder.
3. The Company and
other companies,
enterprises, other
economic organizations
or other connected
parties under control of
the Company will not
utilize their owned
rights as shareholder of
listed company or actual
control capacity to
manipulate and instigate
any director, supervisor
and senior executive of
listed company to
provide or accept funds,
commodities, service or
other assets based on
unfair conditions, or
carry out any actions
damaging the interest of
listed company. In
case of violation of its
commitments, the
Company will assume
all losses caused to
Shenzhen SEG and
subject company and
other companies,
enterprises or other
economic organizations
under their control.
Not any situation of
leaking inside
information relating to Commitments
Before
Shenzhen SEG this restructuring and February 03, were fulfilled in
completion of
Group Co., Ltd. utilize such side 2016 the report
information in inside restructuring
period.
trading exists in the
Company. In case
of violation of its
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Commitments Promiser Content Performance
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commitments, the
Company will assume
all losses caused to
Shenzhen SEG thereof.
1. The Shenzhen SEG
shares subscribed by the
Company through this
restructuring has a
lockup period of
thirty-six months
starting from the date of
listing of the shares
subscribed; the
Shenzhen SEG shares
obtained due to this
restructuring shall not
be listed for
transactions, or
transferred to external,
or be entrusted to others
for management &
operation, or
repurchased by
Shenzhen SEG
(compensation in shares
for the necessary of
performance Commitments
Shenzhen SEG compensation excluded) February 03, were fulfilled in
Long-term
Group Co., Ltd. within a period of 2016 the report
thirty-six months since period.
the date of completion
of issuance of Shenzhen
SEG shares. After
completion of this
restructuring, the
Company's shares
increased due to bonus
shares distribution,
share capital increase by
the Company and other
reasons shall also abide
by the above provisions.
Upon expiration of
above lockup period, the
transfer and transaction
of corresponding shares
shall carried out
according to the current
effective laws,
regulations as well as
the regulations, rules
and requirements of
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Commitments Promiser Content Performance
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CSRC and Shenzhen
Stock Exchange.
2. Within six months
after completion of this
restructuring, if the
closing price of
Shenzhen SEG stocks is
lower than issuing price
for a continuous period
of twenty trading days,
or if the closing price is
lower than the issuing
price at the end of the
six months period after
completion of this
restructuring, the
Shenzhen SEG stocks
obtained by the
Company through this
restructuring will
automatically have its
lockup period extend by
six months. 3. If
this restructuring is
investigated after case
filling by judiciary
authorities or CSRC due
to alleged provision or
disclosure of false
recording, misleading
statement or major
emissions, before the
conclusion of
investigation is given,
the transfer of the shares
having rights and
interests in Shenzhen
SEG will be suspended.
4. Before this
restructuring, all
Shenzhen SEG stocks
held by the Company
shall not be transferred
within twelve months
after completion of this
restructuring. 5.
Where the relevant
laws, regulations and
normative documents
have special
requirements on lockup
period of shares, these
relevant laws,
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Commitments Promiser Content Performance
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regulations and
normative documents
will prevail. 6. If
the above lockup period
is inconsistent with the
latest supervision
requirements of security
supervision agencies,
the Company agrees to
make corresponding
adjustment according to
the latest supervisory
opinions of security
supervision agencies,
upon expiration of
lockup period it shall be
implemented according
to CSRC and Shenzhen
Stock Exchange.
1. SEG group legally
possesses the ownership
of land, house properties
and stock rights
allocated to SEG Maker
free of charge before
this restructuring, there
exists no dispute or
controversy over
ownership of allocated
assets, except part of
house properties the
establishment of pledge
on which shall obtain
the permission from Commitments
Before
Shenzhen SEG pledgee, there exists no February 03, were fulfilled in
completion of
Group Co., Ltd. legal obstacles to the 2016 the report
modified registration of restructuring
period.
ownership of allocated
assets. 2. The
Company commits to
complete the ownership
modification
registration formalities
for modified registration
of allocated assets under
SEG Maker before the
listed company holds
board of directors
meeting to review the
draft of this
restructuring. If SEG
Maker is investigated
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and affixed the
responsibility for,
receives penalty or
suffer any other losses
due to violation of
above commitments or
any defect existing with
allocation of assets, the
Company will assume
full compensation
responsibility for SEG
Maker.
1. As of the date of
issuance of this
commitment letter, SEG
Kongle has nine house
properties with a total
building area of
12,941.28 square
meters. The actual
obligee of house
property of 902 square
meters on ground floor,
Building no.1 in Kongle
Industrial Building is
SEG Group, due to the
regulations restricting
whole transfer of
industrial building in
Shenzhen, the division
and transfer registration Commitments
Shenzhen SEG formalities failed to be February 03, were fulfilled in
Long-term
Group Co., Ltd. went through all the 2016 the report
way. The actual obligee period.
of house property
no.508 in Building
No.04 in SEG
residential building is
SEG Kongle, and the
house property is
registered under the
name of SEG Group and
no transfer formalities
has been handled. The
Company commits that
the parties has no
dispute or controversy
over the ownership of
the house property the
obligee of which in
abovementioned
registration is SEG
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Kongle but the actual
obligee is SEG Kongle
as well as the house
property the actual
obligee of which is SEG
Kongle and is registered
under the name of SEG
Group, SEG Group will
fully assist SEG Kongle
in completing division
& transfer registration
formality of
abovementioned
properties. After this
restructuring, if any loss
is caused to Shenzhen
SEG due to the
ownership of such
house properties, SEG
Group will make full
compensation to
Shenzhen SEG. 2.
The assembly workshop
factory building under
construction which was
used by SEG Group as
capital contribution to
SEG real estate is
located on F4 Building
No.2, SEG Industrial
Building (property
ownership certificate
no.: Shen Fang Di Zi Di
No. 3000759297) with a
total building area of
1,936.71 square meters,
which was delivered to
SEG real estate for use
since the time of capital
contribution, however,
as no certificate is
applied and approved at
the time of capital
contribution, the
transfer formality
cannot be went through;
thereafter due to the
negligence of working
personnel, the house
property, together with
other SEG Industrial
Building properties, was
registered under the
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name of SEG Group,
thereafter due to the
restriction of whole
transfer of industrial
building, the transfer
registration formality
has not been handled all
the way. The house
property has always
been occupied and used
and the operating
revenue of which is
obtained by SEG real
estate since the time of
capital contribution till
now. After this
restructuring, if any loss
is caused to Shenzhen
SEG due to the
ownership of such
house properties, SEG
Group will make full
compensation to
Shenzhen SEG.
3. The Company will
fully assist, promote and
urge subject company
and its subsidiaries to
complete property
ownership registration
in land, real estate and
other assets, and
standardize usage of
land. 4. If the
subject company and its
subsidiaries have the
following situations due
to the land usage right
and house property
assets existing before
completion of this
restructuring: (1) the
land usage right and
house property of which
the ownership
certificates are being
processed failed to be
processed in time (those
caused by force majeure
events, law, policy,
government
administration action,
change of planned land
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usage and other reasons
other than that of
subject company and its
subsidiaries excluded);
or (2) the relevant land
usage right and house
property ownership
certificate cannot be
handled (those caused
by force majeure events,
law policy, government
administration action,
change of planned land
usage and other reasons
other than that of
subject company and its
subsidiaries excluded)
and be subject to actual
losses including but not
limited to
compensation, penalty,
expenses, damage of
interests, the Company
will make timely and
full compensation to
subject company and its
subsidiaries.
SEG Group will, before
Shenzhen SEG's
issuance of restructuring
report, complete the
formality of transfer
registration to SEG real
estate of the property
located at F/4 Building
No.2 SEG Industrial
Building, if it is
completed on time, SEG Commitments
Before
Shenzhen SEG Group agrees to February 19, were fulfilled in
completion of
Group Co., Ltd. immediately 2016 the report
complement in currency restructuring
period.
in the amount of capital
contribution of 1.5
million at that time, and
agrees to provide free of
charge the house
property to SEG real
estate for use till the
house property is
transferred to SEG real
estate; in case of any
operating loss or other
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Commitment Commitment
Commitments Promiser Content Performance
date term
economic loss caused to
SEG real estate due to
failure in completing
transfer formality on
time, SEG Group agrees
to make full
compensation to SEG
real estate.
1. The Company
commits that as of
October 31, 2015, the
funds of Shenzhen SEG
or subject company
occupied by controlling
shareholder and other
connected persons of
Shenzhen SEG for
non-operational matters
will be paid off before
the holding of Shenzhen
SEG shareholders'
meeting reviewing the
restructuring plan; 2.
After this restructuring,
maintain financial
independence of listed
company and ensure
there is no behavior of
illegal occupation of Commitments
Shenzhen SEG funds of listed February 03, were fulfilled in
Long-term
Group Co., Ltd. company; 3. Abide by 2016 the report
and urge the listed period.
company to abide by
Corporate Governance
Standards for Listed
Companies, Notice
Concerning Some Issues
on Regulating the Funds
between Listed
Companies and
Associated Parties and
Listed Companies'
Provision of Guaranty
to Other Parties, Listing
Rules of the Shenzhen
Stock Exchange and
other laws,
administrative laws &
regulations,
departmental rules,
normative documents
and business rules at
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Commitment Commitment
Commitments Promiser Content Performance
date term
Shenzhen Stock
Exchange, and improve
the consciousness of
law and regulation
compliance; 4. Exercise
rights of shareholders
according to law, and do
not abuse shareholder's
rights to damage the
interests of listed
company and other
shareholders; 5.
Optimize governance
structure of listed
company, complete
internal control system,
standardize the
operation of three
meetings, give full play
of the functions and
supervisory roles of the
independent directors
and the board of
supervisors, and restrict
the decision-making and
operational behaviors of
controlling shareholder
and actual controller; 6.
Perform information
disclosure obligation in
strict accordance with
the relevant regulations,
actively cooperate with
the listed companies in
information disclosure
work, and timely inform
the occurred and
potential big events, and
ensure the information
disclosure to be true,
accurate, complete, in
time and fair. In case of
violation of its
commitments, the
Company will assume
all losses caused to
Shenzhen SEG and
subject company and
other companies,
enterprises or other
economic organizations
under their control.
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Commitment Commitment
Commitments Promiser Content Performance
date term
The Company will spare
no efforts in assisting,
urging and advance
enterprises affiliated to
subject company
conducting improper
operation due to
problems left over by
history and other
reasons (including but
not limited to
enterprises whose
business license have
been revoked, having
stopped operation) to
handle corresponding Commitments
Shenzhen SEG cancellation procedures. February 03, were fulfilled in
Long-term
Group Co., Ltd. After completion of this 2016 the report
restructuring, if subject period.
company is investigated
and affixed the
responsibility for,
receives penalty or
suffer any other losses
due to abnormal
operation, not handling
cancellation procedure
on time and other
reasons, SEG Group
will assume full legal
and compensation
responsibilities for listed
company and subject
company.
According to the Article
Five of the Equity
Transfer Agreement
signed by the Company
with SEG Group when
the Company was listed,
SEG Group agreed that
the Company and its Commitments
Commitment made at the time of initial Shenzhen SEG subsidiaries and were fulfilled in
July 01, 1996 Long-term
public offerings or refinancing Group Co., Ltd. associated companies to the report
use the eight trademarks period.
registered by SEG
Group at the National
Trademark Bureau;
SEG Group agreed that
the Company used the
aforesaid trademarks or
similar signs as the
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Commitment Commitment
Commitments Promiser Content Performance
date term
Company's logo and
used the trademarks and
signs during its
operation; the Company
needn't pay any fee to
SEG Group for using
the aforesaid trademarks
or signs.
For the problem that
there remained
competition in the same
trade between the
Company and SEG
Group indicated in spot
inspection by Shenzhen
Securities Supervisory
Bureau, the Company
received written
Commitment Letter
from SEG Group on
September 14, 2007 and
the content was as
Commitments
follows: our Group has
Shenzhen SEG September 14, were fulfilled in
similar business in Long-term
Group Co., Ltd. 2007 the report
Shenzhen electronics
period.
market with Shenzhen
SEG Co., Ltd.
(Shenzhen SEG), and
the business was
resulted by history and
it has objective market
development
background. Our Group
hereby promises that we
will not individually
operate a market in a
same city whose
business is similar with
that of Shenzhen SEG.
The 6th interim meeting From February
of the 5th Board of 1, 2011 to
Directors held on January 31,
January 26, 2011 2016, totally
reviewed and approved five years, and Commitments
the Proposal of Solving the contract was
Shenzhen SEG January 26, were fulfilled in
Group Co., Ltd. the Horizontal 2011 expired within the report
Competition between this the report
period.
the Company and Its period. As of the
Controlling end of report
Shareholder. After period, renewal
friendly consultation, of above
SEG Group agreed to contracts has
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Commitment Commitment
Commitments Promiser Content Performance
date term
entrust the Company to been completed
operate and manage with term of
with full authority SEG validity from
Communications February 01,
Market under direct 2016 to January
management of SEG 31, 2017.
Group. Therefore, the
two parties have signed
the entrustment
operation and
management contract,
and SEG Group will pay
the Company RMB
200,000 as the expenses
for entrustment
management.
Based on the full
confidence in prospect
of Chinese economic
development and the
Company's future
development, in order to
jointly safeguard the
stability of capital
market and promote the Commitments
Shenzhen SEG sustainable, steady and were fulfilled in
July 09, 2015 Twelve months
Group Co., Ltd. healthy development, the report
the Company's period.
controlling shareholder
Shenzhen SEG Co., Ltd
commits not to reduce
the Company's stocks it
hold within twelve
Other commitments made to the medium and months since the date of
small shareholders of the Company announcement issuance,
namely July 09.
Based on the confidence
on future development
prospect of the
Company and the
reasonable judgment on
Board of value of the Company's
Directors, Board stocks, in order to
of Supervisors, promote the Company's
July 09, 2015 Six months Fulfilled
and Senior sustainable, steady and
Executives of healthy development
the Company and safeguard the
medium and small
investors' interests, the
Company's directors,
supervisors and senior
executives commit to
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Commitment Commitment
Commitments Promiser Content Performance
date term
purchase or increase the
Company's stocks with
its own funds from
secondary market within
six months after the
resumption of trading of
the stocks on July 14,
and not reduce its
holding of the
Company's shares
within the stipulated
term, commit not to
carry out inside trading,
or purchase/sell the
Company's shares or
carry out short-swing
trading during the
sensitive period.
Whether commitments were fulfilled on time Yes
Reason for not fulfilling the commitments
N/A
and future plan (if applicable)
XI. Engagement and dismissal of the accounting firm
Whether the semi-annual financial report is audited?
□ Yes √ No
The Semi-annual Report of the Company has not been audited.
XII. Punishment and rectification issues
□ Applicable √ Not applicable
No punishment and rectification is involved in the report period.
XIII. Disclosure of illegal issues and delisting risks
□ Applicable √ Not applicable
No illegal issue and delisting risk is involved in the report period.
XIV. Notes on other important matters
√ Applicable □ Not applicable
Inquiry Index for the Websites Disclosing the Temporary
Overview of Important Events Disclosure Date
Reports
1. Establishment of Suzhou SEG Intelligent Technology Announcement of Establishment of Suzhou SEG Intelligent
January 13, 2016
Co., Ltd. Technology Co., Ltd. disclosed on www.cninfo.com.cn
Announcement of Strategic Cooperation Agreement with
2. Strategic cooperation agreement with Taobao (China)
January 28, 2016 Taobao (China) Software Co., Ltd. disclosed on
Software Co., Ltd.
www.cninfo.com.cn
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Inquiry Index for the Websites Disclosing the Temporary
Overview of Important Events Disclosure Date
Reports
Announcement of the Resolution at the 8th Meeting of the
February 4, 2016
6th Board of Directors disclosed on www.cninfo.com.cn
Reminder Announcement of No Resumption of Trading
February 4, 2016
disclosed on www.cninfo.com.cn
3. Major asset restructuring plan
General Risk Warning Announcement of Major Asset
February 4, 2016
Restructuring disclosed on www.cninfo.com.cn
Announcement of Non-Diluted EPS in Issue of Shares, Asset
February 4, 2016 Purchase in Cash, and Supporting Fund Raising & Related
Transaction disclosed on www.cninfo.com.cn
Announcement of Strategic Cooperation Agreement with
4. Strategic cooperation agreement with Shanghai
March 15, 2016 Shanghai Wangyu Information Technology Co., Ltd.
Wangyu Information Technology Co., Ltd.
disclosed on www.cninfo.com.cn
Announcement of strategic cooperation agreement with
5. Strategic cooperation agreement with Fujian Babycat
March 24, 2016 Fujian Babycat Animation Technology Co., Ltd. disclosed
Animation Technology Co., Ltd.
on www.cninfo.com.cn
Announcement of strategic cooperation agreement with
6. Strategic cooperation agreement with Related Parties
April 6, 2016 Related Parties and Tencent Computer System Co., Ltd.
and Tencent Computer System Co., Ltd.
disclosed on www.cninfo.com.cn
Announcement of strategic Cooperation Agreement with
7. Strategic cooperation agreement with Zhejiang Tmall
April 9, 2016 Zhejiang Tmall Technology Co., Ltd. disclosed on
Technology Co., Ltd.
www.cninfo.com.cn
8. Establishment of the investment management Announcement of Establishment of the Investment
company and Shenzhen Hongtu SEG intelligent industry Management Company and Shenzhen Hongtu SEG
investment foundation (limited partnership) by a SEG Intelligent Industry Investment Foundation (Limited
April 19, 2016
subsidiary and Shenzhen Venture Capital Management Partnership) by a SEG subsidiary and Shenzhen Venture
Counseling Co., Ltd. (subsidiary of Shenzhen Capital Capital Management Counseling Co., Ltd. (subsidiary of
Group) Shenzhen Capital Group) disclosed on www.cninfo.com.cn
Announcement of the Resolution at the 34th Interim
9. Application for RMB loan credit line April 26, 2016 Meeting of the 6th Board of Directors disclosed on
www.cninfo.com.cn
Announcement of the Investment and Establishment of
May 10, 2016 Shenzhen SEG Longyan New Energy Application and
10. Investment and establishment of Shenzhen SEG Development Co., Ltd. disclosed on www.cninfo.com.cn
Longyan New Energy Application and Development
Co., Ltd. Announcement of Acquisition of Business License of
June 1, 2016 Shenzhen SEG Longyan New Energy Application and
Development Co., Ltd. disclosed on www.cninfo.com.cn
11. Equity investment and establishment of Shenzhen Announcement of Equity Investment and Establishment of
International Consumer Electronics Exhibition and May 12, 2016 Shenzhen International Consumer Electronics Exhibition
Trade Center and Trade Center disclosed on www.cninfo.com.cn
Announcement of the Resolution at the 37th Interim
12. Alteration of the registered capital of Shenzhen
June 25, 2016 Meeting of the 6th Board of Directors disclosed on
Hongtu SEG Investment Management Co., Ltd.
www.cninfo.com.cn
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XV. Issue of corporate bond
Does the Company have corporate bonds that are issued and listed on the stock exchange, and not due on the approved release date of the
semi-annual report, or due but not cashed in full?
No
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Chapter 6 Changes in Share Capital and Information on Shareholders
I. Information on changes in share capital
Unit: Share
Before the change Increase/decrease by (+) After the change
Issue of Capitalization
Bonus
Quantity Percentage new of public Others Subtotal Quantity Percentage
share
shares reserve
I. Restricted shares 71,689 0.01% 0 0 0 0 0 71,689 0.01%
1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00%
2. Shares held by state-owned
0 0.00% 0 0 0 0 0 0 0.00%
legal persons
3. Other domestic shares 71,689 0.00% 0 0 0 0 0 71,689 0.00%
Including: Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
domestic legal persons
Shares held by domestic natural
71,689 0.00% 0 0 0 0 0 71,689 0.00%
persons
4. Shares held by foreign units 0 0.00% 0 0 0 0 0 0 0.00%
Including: Shares held by foreign
0 0.00% 0 0 0 0 0 0 0.00%
legal persons
Shares held by foreign natural
0 0.00% 0 0 0 0 0 0 0.00%
persons
II. Unrestricted shares 784,727,321 99.99% 0 0 0 0 0 784,727,321 99.99%
1. RMB common shares 538,266,003 68.59% 0 0 0 0 0 538,266,003 68.59%
2. Domestically listed foreign
246,461,318 31.40% 0 0 0 0 0 246,461,318 31.40%
shares
3. Overseas listed foreign shares 0 0.00% 0 0 0 0 0 0 0.00%
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total shares 784,799,010 100.00% 0 0 0 0 0 784,799,010 100.00%
Reasons for change
□ Applicable √ Not applicable
Approval of changes in share capital
□ Applicable √ Not applicable
Share transfer
□ Applicable √ Not applicable
Impact of changes in share capital on such financial indicators as basic EPS, diluted EPS, and net asset per share attributable to common
shareholders of the Company in the last year and previous report period
□ Applicable √ Not applicable
Other contents as deemed necessary by the Company or required by the securities regulatory authority to be disclosed
□ Applicable √ Not applicable
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Explanations to changes of the sum of shares and the shareholder structure as well as the changes of the asset and debt structure of the
Company.
□ Applicable √ Not applicable
II. Information on the number of shareholders and their shareholding status
Unit: Share
Total number of ordinary Total number of preferred
shareholders at the end of the 81,615 shareholders restored with the voting 0
report period rights (if any) (see Note 8)
Information on the shareholders holding more than 5% shares or top 10 ordinary shareholders
Number of Information on pledged or
ordinary Share Quantity of Quantity of frozen shares
Name of Nature of Shareholding shares held increase/decrease restricted unrestricted
shareholder shareholder ratio at the end of in the report ordinary ordinary
the report period shares held shares held Share status Quantity
period
Shenzhen SEG State-owned legal
30.24% Unchanged 0 237,359,666
Group Co., Ltd. person
Domestic natural
Liu Guocheng 0.85% 6,739,002 +47,700 0 6,739,002
person
Domestic natural
Liu Guohong 0.42% 3,326,858 -27,700 0 3,326,858
person
Overseas natural
Gong Qianhua 0.37% 2,940,000 Unchanged 0 2,940,000
person
Domestic natural
Zeng Ying 0.35% 2,800,000 -500,000 0 2,800,000
person
Domestic natural
Tan Shujian 0.31% 2,419,073 +2,419,073 0 2,419,073
person
China Securities
Domestic
Finance
non-state-owned 0.29% 2,271,900 Unchanged 0 2,271,900
Corporation
legal person
Limited
NORGES Foreign legal
0.24% 1,890,226 Unchanged 0 1,890,226
BANK person
Domestic natural
Hu Chunwan 0.18% 1,385,200 -41,800 0 1,385,200
person
China Merchants
State-owned legal
Securities (Hong 0.17% 1,324,469 -115,200 0 1,324,469
person
Kong) Co., Ltd.
Strategic investors or general legal
entities who became one of the top
ten ordinary shareholders by N/A
participating in rights issue (if any)
(see Note 3)
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Explanations on the association Shenzhen SEG Group Co., Ltd has no associated relationship with other shareholders, nor is a
relationship or concerted action concerted action unit as specified in the Management Methods for Disclosure of Information on
among the above-mentioned Changes of Shareholding Status of Shareholders of Listed Companies. It is unknown whether other
shareholders shareholders have an associated relationship or are concerted action units or not.
Information on top ten ordinary shareholders of non-restricted shares
Type of share
Name of shareholder Ordinary shares held at the period end
Type of share Quantity
Shenzhen SEG Group Co., Ltd. 237,359,666 RMB ordinary shares 237,359,666
Liu Guocheng 6,739,002 Domestically listed foreign shares 6,739,002
Liu Guohong 3,326,858 Domestically listed foreign shares 3,326,858
Gong Qianhua 2,940,000 Domestically listed foreign shares 2,940,000
Zeng Ying 2,800,000 Domestically listed foreign shares 2,800,000
Tan Shujian 2,419,073 RMB ordinary shares 2,419,073
China Securities Finance Corporation
2,271,900 RMB ordinary shares 2,271,900
Limited
NORGES BANK 1,890,226 Domestically listed foreign shares 1,890,226
Hu Chunwan 1,385,200 Domestically listed foreign shares 1,385,200
China Merchants Securities (Hong
1,324,469 Domestically listed foreign shares 1,324,469
Kong) Co., Ltd.
Explanations on the association
relationship or concerted action
Shenzhen SEG Group Co., Ltd has no associated relationship with other shareholders, nor is a
among the top ten shareholders of
concerted action unit as specified in the Management Methods for Disclosure of Information on
unrestricted ordinary shares, and
Changes of Shareholding Status of Shareholders of Listed Companies. It is unknown whether other
between the top ten shareholders of
shareholders have an associated relationship or are concerted action units or not.
unrestricted ordinary shares and the
top ten ordinary shareholders
Information of top ten ordinary
shareholders participating in
N/A
financing business (if any) (see Note
4)
Whether the top ten ordinary shareholders of the Company or top ten ordinary shareholders of non-restricted shares conducted agreed
repurchase transactions in the report period
□ Yes √ No
The top ten ordinary shareholders of the Company or top ten ordinary shareholders of non-restricted shares did not conduct agreed
repurchase transactions in the report period.
III. Information on changes in controlling shareholders and actual controllers
Changes of the controlling shareholders in the report period
□ Applicable √ Not applicable
In the report period, the controlling shareholders of the Company are not changed.
Changes of the actual controllers in the report period
□ Applicable √ Not applicable
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In the report period, the actual controllers of the Company are not changed.
IV. Share-holding overweighting plan proposed or implemented by the Company
shareholders and persons acting in concert in the reporting period
□ Applicable √ Not applicable
No share-holding overweighting plan proposed or implemented by the Company shareholders and persons acting in concert in the report
period is involved in the report period according to the learned information.
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Chapter 7 Preferred Shares
□ Applicable √ Not applicable
No preferred share is involved in the report period.
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Chapter 8 Information on Directors, Supervisors, and Senior Executives
I. Changes in shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
No changes of shares held by directors, supervisors, and senior executives are involved in the report period. For details, refer to 2015 Annual
Report.
II. Changes of directors, supervisors, and senior executives
□ Applicable √ Not applicable
No changes of directors, supervisors, and senior executives are involved in the report period. For details, refer to 2015 Annual Report.
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Chapter 9 Financial Report
I. Auditor's report
Is the semi-annual report audited?
□ Yes √ No
The Semi-Annual Report of the Company has not been audited.
II. Financial statements
Unit: RMB Yuan.
1. Consolidated Balance Sheet Statement
Prepared by: Shenzhen SEG Co., Ltd.
June 30, 2016
Unit: Yuan
Item Closing balance Opening balance
Current assets:
Monetary funds 143,304,754.16 276,863,429.10
Deposit reservation for balance
Loans to other banks 40,000,000.00 40,000,000.00
Financial assets measured by fair value with
changes included in current gains and losses
Derivative financial assets
Notes receivable
Accounts receivable 79,456,363.98 98,212,422.87
Advances 89,712,712.41 129,044,887.26
Premiums receivable
Reinsurance accounts receivable
Reinsurance deposit receivable
Interest receivable
Dividends receivable
Other receivables 46,250,769.24 27,352,784.33
Redemptory monetary capital for resale
Inventory 568,759,249.94 450,809,934.72
Held-for-sale assets
Non-current assets due within one year
Other current assets 236,291,113.24 339,430,419.74
Total current assets 1,203,774,962.97 1,361,713,878.02
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Item Closing balance Opening balance
Non-current assets:
Loans and advances issued 505,950,062.08 475,520,822.08
Financial assets available for sale 34,384,017.93 34,539,973.24
Held-to-maturity investment
Long-term receivables
Long-term equity investment 189,295,871.13 185,122,573.88
Investment properties 434,510,747.94 443,851,726.40
Fixed assets 36,910,218.56 37,524,425.25
Construction in progress 140,810.00
Engineering materials
Disposal of fixed assets 4,577.55
Productive biological assets
Oil & gas assets
Intangible assets 977,176.99 1,143,762.11
Development expenses
Goodwill 10,328,927.82 10,328,927.82
Long-term expenses to be amortized 52,277,089.32 49,235,999.86
Deferred income tax assets 10,433,814.57 10,433,814.57
Other non-current assets 848,593.64 5,103,811.14
Total non-current assets 1,275,921,097.53 1,252,946,646.35
Total assets 2,479,696,060.50 2,614,660,524.37
Current liabilities:
Short-term borrowing 311,438,652.00 367,759,630.48
Loans from central bank
Deposits from customers and interbank
Loans from other banks
Financial liabilities measured by fair value with
changes included in current gains and losses
Derivative financial liabilities
Notes payable
Accounts payable 24,526,663.69 89,908,781.98
Advances from customers 155,307,062.02 190,430,121.05
Financial assets sold for repurchase
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Item Closing balance Opening balance
Service charges and commissions payable
Payroll payable 7,529,491.72 21,849,134.16
Taxes payable 24,265,012.33 34,645,030.07
Interest payable 698,717.58 516,758.34
Dividends payable 18,966,398.39 2,218,224.58
Other payables 227,540,409.09 194,329,885.69
Reinsurance accounts payable
Insurance deposit
Customer brokerage deposits
Securities underwriting brokerage deposits
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 770,272,406.82 901,657,566.35
Non-current liabilities:
Long-term borrowing
Bonds payable
Preferred stock
Perpetual capital securities
Long-term payables
Payroll payable
Special payables
Estimated liabilities 9,700,000.00 7,000,000.00
Deferred income 9,598,486.65 9,634,114.77
Deferred income tax liabilities 15,430,650.70 16,024,102.35
Other non-current liabilities
Total non-current liabilities 34,729,137.35 32,658,217.12
Total liabilities 805,001,544.17 934,315,783.47
Owners' equity:
Share capital 784,799,010.00 784,799,010.00
Other equity instruments
Preferred stock
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Item Closing balance Opening balance
Perpetual capital securities
Capital reserve 506,553,643.41 506,545,831.11
Less: Treasury shares
Other comprehensive income 248,834.30 326,662.48
Special reserve
Surplus reserve 109,922,336.87 109,922,336.87
General risk provision
Undistributed profits 76,719,244.65 73,532,388.70
Total owners' equity attributable to the parent
1,478,243,069.23 1,475,126,229.16
company
Minority shareholders' equity 196,451,447.10 205,218,511.74
Total owners' equity 1,674,694,516.33 1,680,344,740.90
Total liabilities and owners' equity 2,479,696,060.50 2,614,660,524.37
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
2. Balance Sheet Statement of the Parent Company
Unit: Yuan
Item Closing balance Opening balance
Current assets:
Monetary funds 59,736,832.79 186,369,470.58
Financial assets measured by fair value with
changes included in current gains and losses
Derivative financial assets
Notes receivable
Accounts receivable
Advances 101,760.00 418,544.10
Interest receivable
Dividends receivable 24,259,680.00
Other receivables 652,724,525.27 570,671,617.38
Inventory 747,902.23 112,715.50
Held-for-sale assets
Non-current assets due within one year
Other current assets 386,000,000.00 393,166,401.54
Total current assets 1,123,570,700.29 1,150,738,749.10
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Item Closing balance Opening balance
Non-current assets:
Financial assets available for sale 33,515,392.83 33,515,392.83
Held-to-maturity investment
Long-term receivables
Long-term equity investment 469,279,397.37 455,106,100.12
Investment properties 279,140,304.72 284,399,860.14
Fixed assets 19,358,807.19 19,458,584.25
Construction in progress 140,810.00
Engineering materials
Disposal of fixed assets 4,577.55
Productive biological assets
Oil & gas assets
Intangible assets 523,881.18 622,054.24
Development expenses
Goodwill
Long-term expenses to be amortized 7,798,575.53 7,000,181.66
Deferred income tax assets 8,242,045.89 8,242,045.89
Other non-current assets
Total non-current assets 817,862,982.26 808,485,029.13
Total assets 1,941,433,682.55 1,959,223,778.23
Current liabilities:
Short-term borrowing 290,000,000.00 315,000,000.00
Financial liabilities measured by fair value with
0.00
changes included in current gains and losses
Derivative financial liabilities 0.00
Notes payable 0.00 0.00
Accounts payable 79,596.00 36,075.52
Advances from customers 22,875,183.88 42,704,620.99
Payroll payable 2,701,632.12 13,652,201.42
Taxes payable 12,214,863.56 10,033,418.41
Interest payable 0.00 477,402.78
Dividends payable 119,803.29 119,803.29
Other payables 98,655,804.06 95,119,560.37
100
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Item Closing balance Opening balance
Held-for-sale liabilities 0.00
Non-current liabilities due within one year 0.00 0.00
Other current liabilities 0.00 0.00
Total current liabilities 426,646,882.91 477,143,082.78
Non-current liabilities:
Long-term borrowing 0.00 0.00
Bonds payable 0.00 0.00
Preferred stock 0.00 0.00
Perpetual capital securities 0.00 0.00
Long-term payables 0.00 0.00
Payroll payable 0.00 0.00
Special payables 0.00 0.00
Estimated liabilities 9,700,000.00 7,000,000.00
Deferred income 9,500,000.00 9,500,000.00
Deferred income tax liabilities 0.00 0.00
Other non-current liabilities
Total non-current liabilities 19,200,000.00 16,500,000.00
Total liabilities 445,846,882.91 493,643,082.78
Owners' equity:
Share capital 784,799,010.00 784,799,010.00
Other equity instruments 0.00 0.00
Preferred stock 0.00 0.00
Perpetual capital securities 0.00 0.00
Capital reserve 507,781,650.13 507,773,837.83
Less: Treasury shares 0.00 0.00
Other comprehensive income 48.10 0.00
Special reserve 0.00 0.00
Surplus reserve 109,922,336.87 109,922,336.87
Undistributed profits 93,083,754.54 63,085,510.75
Total owners' equity 1,495,586,799.64 1,465,580,695.45
Total liabilities and owners' equity 1,941,433,682.55 1,959,223,778.23
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
101
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3. Consolidated Profit Statement
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
I. Total operating revenue 412,250,832.76 425,219,054.09
Including: Operating revenue 362,673,236.85 374,555,135.61
Interest income 47,373,095.91 47,553,384.48
Earned premiums 0.00
Service charges and commissions income 2,204,500.00 3,110,534.00
II. Total operating cost 344,919,889.29 358,714,002.72
Including: Operating cost 320,996,877.99 317,303,931.44
Interest expenses 465,888.89 3,159,048.64
Commissions 0.00
Surrender value 0.00
Net compensation pay-outs 0.00
Net insurance deposit accrued 0.00
Insurance dividends 0.00
Reinsurance expenses 0.00
Operating tax and surcharges 10,129,674.14 13,748,030.14
Sale expenses 818,331.16 941,405.12
Management expenses 15,716,402.51 16,004,563.26
Financial cost 755,340.12 843,057.23
Loss from asset impairment -3,962,625.52 6,713,966.89
Income from change of fair value (enter "-" for
0.00
loss)
Income from investment (enter "-" for loss) 1,266,453.02 5,451,963.64
Including: Income from investment in joint
-4,826,750.85 -4,892,855.94
ventures or associates
Income from exchange (enter "-" for loss) 0.00
III. Operating profit (enter "-" for loss) 68,597,396.49 71,957,015.01
Add: Non-operating revenue 418,388.36 1,045,979.11
Including: Gains on disposal of non-current
0.00 18,693.10
assets
Less: Non-operating expenses 2,758,885.34 815,788.94
Including: Loss from disposal of non-current
9,316.22 196,424.21
assets
102
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Item Amount incurred in the current period Amount incurred in the previous period
IV. Total profit (enter "-" for total loss) 66,256,899.51 72,187,205.18
Less: Income tax 22,038,716.72 20,121,370.92
V. Net profit (enter "-" for net loss) 44,218,182.79 52,065,834.26
Net profit attributable to owners of the parent
26,856,270.42 34,906,133.61
company
Profit and loss of minority shareholders 17,361,912.37 17,159,700.65
VI. Net of tax of other comprehensive incomes -116,918.38 316,765.26
Total owners' net of tax of other comprehensive
-77,828.18 210,902.31
income attributable to the parent company
1. Other comprehensive income not to be
reclassified into gains and losses
(1) Changes of net liabilities or net assets of the
re-measured defined benefit plans
(2) Shares of the investee of other
comprehensive income not to be reclassified
into gains and losses under the equity method
2. Other comprehensive income to be
-77,828.18 210,902.31
reclassified into gains and losses
(1) Shares of the investee of other
comprehensive income to be reclassified into 48.10
gains and losses under the equity method
(2) Gains and losses from changes of fair value
-77,876.28 210,902.31
of the available-for-sale financial assets
(3) Held-to-maturity investments categorized as
gains and losses from the available-for-sale 0.00
financial assets
(4) Effective gains or loss from cash flows 0.00
5. Foreign currency translation differences 0.00
(6) Others 0.00
Net of tax of other comprehensive income
-39,090.20 105,862.95
attributable to minority shareholders
VII. Total comprehensive income 44,101,264.41 52,382,599.52
Total comprehensive income attributable to
26,778,442.24 35,117,035.92
shareholders of the parent company
Total comprehensive income attributable to
17,322,822.17 17,265,563.60
minority shareholders
VIII. Earnings per share
1. Basic earnings per share 0.0342 0.0445
103
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Item Amount incurred in the current period Amount incurred in the previous period
2. Diluted earnings per share 0.0342 0.0445
During the merger of the enterprises under the control of a same entity in the report period, the net profit of the acquired party realized before
the merger was: RMB 0.00 Yuan, and net profit of the purchased party realized before the merger in the previous period was: RMB 0.00
Yuan.
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
4. Profit Statement of the Parent Company
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
I. Operating revenue 51,626,681.87 66,577,264.42
Less: Operating cost 36,890,488.44 44,695,244.80
Operating tax and surcharges 2,004,366.35 3,724,403.75
Sale expenses
Management expenses 6,516,831.79 6,176,205.10
Financial cost -13,065,151.38 -7,698,774.31
Loss from asset impairment -400,000.00
Income from change of fair value (enter "-" for
loss)
Income from investment (enter "-" for loss) 45,762,330.76 37,619,081.12
Including: Income from investment in joint
-4,826,750.85 -4,892,855.94
ventures and associates
II. Operating profit (enter "-" for loss) 65,042,477.43 57,699,266.20
Add: Non-operating revenue 7,300.00 214,230.19
Including: Gains on disposal of non-current
assets
Less: Non-operating expenses 2,707,915.25 21,350.50
Including: Loss from disposal of non-current
7,915.25 4,100.50
assets
III. Total profit (enter "-" for total loss) 62,341,862.18 57,892,145.89
Less: Income tax 8,674,203.92 10,111,975.20
V. Net profit (enter "-" for net loss) 53,667,658.26 47,780,170.69
V. Net of tax of other comprehensive incomes 48.10
1. Other comprehensive income not to be
reclassified into gains and losses
(1) Changes of net liabilities or net assets of the
re-measured defined benefit plans
(2) Shares of the investee of other
104
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Item Amount incurred in the current period Amount incurred in the previous period
comprehensive income not to be reclassified
into gains and losses under the equity method
2. Other comprehensive income to be
48.10
reclassified into gains and losses
(1) Shares of the investee of other
comprehensive income to be reclassified into 48.10
gains and losses under the equity method
(2) Gains and losses from changes of fair value
of the available-for-sale financial assets
(3) Held-to-maturity investments categorized as
gains and losses from the available-for-sale
financial assets
(4) Effective gains or loss from cash flows
(5) Foreign currency translation differences
(6) Others
VI. Total comprehensive income 53,667,706.36 47,780,170.69
VII. Earnings per share
1. Basic earnings per share
2. Diluted earnings per share
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
5. Consolidated Cash Flow Statement
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
I. Cash flow from operating activities:
Cash received from sales of goods and
480,116,657.74 713,661,591.72
rendering of services
Net increase in deposits from customers and
0.00
interbank
Net increase in loans from central bank 0.00
Net increase in borrowing from other financial
0.00
institutions
Cash received from premiums of primary
0.00
insurance contracts
Net cash received from reinsurance business 0.00
Net increase in deposits from policyholders and
0.00
investment
Net increase in financial assets measured by
0.00
fair value with changes included in current
105
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Item Amount incurred in the current period Amount incurred in the previous period
gains and losses
Cash received from interest and commissions 49,594,029.07 48,000,243.60
Net increase in loans from other banks 0.00
Net increase in redemption capital 0.00
Tax refunds 76,897,672.19 88,433,998.57
Other cash received related to operating
111,085,187.92 230,075,360.61
activities
Subtotal of cash inflow from operating
717,693,546.92 1,080,171,194.50
activities
Cash paid for goods and service 553,514,232.23 824,078,559.71
Net increase in loans to customers and
34,265,000.00 48,372,311.47
advances
Net increase in deposits with central bank and
0.00
interbank
Cash paid for compensation pay-outs of
0.00
primary insurance contracts
Cash paid for interest, service charges, and
24,273.94 24,453.96
commissions
Cash paid as insurance dividends 0.00
Cash paid to and on behalf of employees 56,950,190.52 51,910,984.07
Taxes paid 58,072,566.51 62,553,032.06
Other cash paid related to operating activities 114,181,312.12 191,819,686.85
Subtotal of cash outflow in operating activities 817,007,575.32 1,178,759,028.12
Net cash flow from operating activities -99,314,028.40 -98,587,833.62
II. Cash flows from investment activities:
Cash received from withdrawal of investment 434,200,000.00 1,318,877,729.90
Cash received from investment income 6,093,203.87 10,137,874.16
Net cash received from disposal of fixed assets,
10,000.00 28,493.50
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries
0.00
and other business units
Other cash received related to investment
0.00
activities
Subtotal of cash inflow from investment
440,303,203.87 1,329,044,097.56
activities
Cash paid for purchase and construction of
3,992,387.70 9,058,685.65
fixed assets, intangible assets and other
106
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Item Amount incurred in the current period Amount incurred in the previous period
long-term assets
Cash paid for investment 371,804,260.00 1,243,610,000.00
Net increase in mortgage loans 0.00
Net cash paid for acquisition of subsidiaries and
0.00
other business units
Other cash paid related to investment activities 0.00
Subtotal of cash outflow in investment
375,796,647.70 1,252,668,685.65
activities
Net cash flow from investment activities 64,506,556.17 76,375,411.91
III. Cash flow from financing activities:
Cash received by absorbing investment 0.00
Including: Cash received by subsidiaries from
0.00
investment of minority shareholders
Borrowings received 230,220,000.00 295,000,000.00
Cash received from bond issue 0.00
Other cash received related to financing
7,812.30
activities
Subtotal of cash inflow from financing
230,227,812.30 295,000,000.00
activities
Cash repayments of amounts borrowed 286,540,978.48 409,246,687.38
Cash paid for dividend and profit distribution or
39,573,361.82 31,895,839.49
interest payment
Including: Dividends and profit paid by
8,280,567.52 10,728,693.04
subsidiaries to minority shareholders
Other cash paid related to financing activities 1,524,692.51 58,429,722.92
Subtotal of cash outflow in financing activities 327,639,032.81 499,572,249.79
Net cash flow arising from financing activities -97,411,220.51 -204,572,249.79
IV. Influence of exchange rate fluctuation on
17.80 1.27
cash and cash equivalents
V. Net increase in cash and cash equivalents -132,218,674.94 -226,784,670.23
Add: Opening balance of cash and cash
275,523,429.10 382,056,680.70
equivalents
VI. Closing balance of cash and cash
143,304,754.16 155,272,010.47
equivalents
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
107
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6. Cash Flow Statement of the Parent Company
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
I. Cash flow from operating activities:
Cash received from sales of goods and
45,134,847.16 46,077,293.80
rendering of services
Tax refunds
Other cash received related to operating
55,639,989.51 134,093,553.11
activities
Subtotal of cash inflow from operating
100,774,836.67 180,170,846.91
activities
Cash paid for goods and service 32,266,487.97 27,279,852.92
Cash paid to and on behalf of employees 23,691,555.31 18,281,258.17
Taxes paid 15,076,625.42 27,836,566.09
Other cash paid related to operating activities 113,721,306.86 224,334,962.62
Subtotal of cash outflow in operating activities 184,755,975.56 297,732,639.80
Net cash flow from operating activities -83,981,138.89 -117,561,792.89
II. Cash flows from investment activities:
Cash received from withdrawal of investment 543,000,000.00 1,258,100,000.00
Cash received from investment income 26,512,734.94 41,546,585.40
Net cash received from disposal of fixed assets,
10,000.00
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries
and other business units
Other cash received related to investment
activities
Subtotal of cash inflow from investment
569,522,734.94 1,299,646,585.40
activities
Cash paid for purchase and construction of
fixed assets, intangible assets and other 251,207.00
long-term assets
Cash paid for investment 555,000,000.00 1,160,600,000.00
Net cash paid for acquisition of subsidiaries and
other business units
Other cash paid related to investment activities
Subtotal of cash outflow in investment
555,000,000.00 1,160,851,207.00
activities
Net cash flow from investment activities 14,522,734.94 138,795,378.40
108
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Item Amount incurred in the current period Amount incurred in the previous period
III. Cash flow from financing activities:
Cash received by absorbing investment
Borrowings received 190,000,000.00 215,000,000.00
Cash received from bond issue
Other cash received related to financing
7,812.30
activities
Subtotal of cash inflow from financing
190,007,812.30 215,000,000.00
activities
Cash repayments of amounts borrowed 215,000,000.00 350,000,000.00
Cash paid for dividend and profit distribution or
32,182,063.94 20,043,250.00
interest payment
Other cash paid related to financing activities
Subtotal of cash outflow in financing activities 247,182,063.94 370,043,250.00
Net cash flow arising from financing activities -57,174,251.64 -155,043,250.00
IV. Influence of exchange rate fluctuation on
17.80 1.27
cash and cash equivalents
V. Net increase in cash and cash equivalents -126,632,637.79 -133,809,663.22
Add: Opening balance of cash and cash
186,369,470.58 204,395,253.65
equivalents
VI. Closing balance of cash and cash
59,736,832.79 70,585,590.43
equivalents
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
7. Consolidated Statement of Changes in Owners' equity
Amount incurred in the current period
Unit: Yuan
Current period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
I. Closing
784,799, 506,545, 109,922, 205,218,511. 1,680,344,
balance of the 326,662.48 73,532,388.70
010.00 831.11 336.87 74 740.90
previous year
Plus: Change of
accounting
109
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Current period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
policies
Correction to
errors of the
previous period
Merger of
enterprises
under common
control
Others
II. Opening
784,799, 506,545, 109,922, 205,218,511. 1,680,344,
balance of the 326,662.48 73,532,388.70
010.00 831.11 336.87 74 740.90
current year
III. Increase
and decrease of
-5,650,22
the current year 7,812.30 -77,828.18 3,186,855.95 -8,767,064.64
4.57
(enter "-" for
decrease)
1. Total
17,322,822.1 44,101,26
comprehensive -77,828.18 26,856,270.42
7 4.41
income
2. Capital
invested or
decreased by
owners
(1) Ordinary
shares invested
by the
shareholders
(2) Capitals
invested by
other equity
instrument
holders
(3) Amount of
share-based
payment
included in
owners' equity
(4) Others
110
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Current period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
3. Profit -23,669,414.4 -26,089,886.8 -49,759,3
distribution 7 1 01.28
(1) Accrual of
surplus public
reserve
(2) Accrual of
general risk
provision
(3) Amount
distributed to -23,669,414.4 -26,089,886.8 -49,759,3
owners (or 7 1 01.28
shareholders)
(4) Others
4. Internal
carrying
forward of
owners' equity
(1) Capital
reserve
transferred to
increase capital
(or share
capital)
(2) Surplus
public reserve
transferred to
increase capital
(or share
capital)
(3) Surplus
public reserve
compensating
losses
(4) Others
5. Special
reserve
(1) Accrual of
the current year
111
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Current period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
(2) Amount
utilized in the
current period
6. Others 7,812.30 7,812.30
IV. Closing
784,799, 506,553, 109,922, 196,451,447. 1,674,694,
balance of the 248,834.30 76,719,244.65
010.00 643.41 336.87 10 516.33
current period
Amount of the previous year
Unit: Yuan
Previous period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
I. Closing
784,799, 404,727, 102,912, 196,398,356. 1,495,369,
balance of the 231,817.05 6,299,799.41
010.00 257.72 835.67 76 076.61
previous year
Plus: Change of
accounting
policies
Correction to
errors of the
previous period
Merger of
enterprises
under common
control
Others
II. Opening
784,799, 404,727, 102,912, 196,398,356. 1,495,369,
balance of the 231,817.05 6,299,799.41
010.00 257.72 835.67 76 076.61
current year
III. Increase
and decrease of
101,816, 141,545,1
the current year 210,902.31 34,906,133.61 4,611,870.56
219.19 25.67
(enter "-" for
decrease)
112
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Previous period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
1. Total
17,265,563.6 52,382,59
comprehensive 210,902.31 34,906,133.61
0 9.52
income
2. Capital
invested or
decreased by
owners
(1) Ordinary
shares invested
by the
shareholders
(2) Capitals
invested by
other equity
instrument
holders
(3) Amount of
share-based
payment
included in
owners' equity
(4) Others
3. Profit -12,653,693.0 -12,653,6
distribution 4 93.04
(1) Accrual of
surplus public
reserve
(2) Accrual of
general risk
provision
(3) Amount
distributed to -12,653,693.0 -12,653,6
owners (or 4 93.04
shareholders)
(4) Others
4. Internal
carrying
forward of
owners' equity
113
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Previous period
Owners' equity attributable to the parent company
Item Other equity instruments Minority Total
Less: Other General shareholders' owners'
Share Capital Special Surplus Undistributed
Perpetual Treasury comprehensive risk
Preferred equity equity
capital reserve reserve reserve profits
capital Others shares income provision
Shares
securities
(1) Capital
reserve
transferred to
increase capital
(or share
capital)
(2) Surplus
public reserve
transferred to
increase capital
(or share
capital)
(3) Surplus
public reserve
compensating
losses
(4) Others
5. Special
reserve
(1) Accrual of
the current year
(2) Amount
utilized in the
current period
101,816, 101,816,2
6. Others
219.19 19.19
IV. Closing
784,799, 506,543, 102,912, 201,010,227. 1,636,914,
balance of the 442,719.36 41,205,933.02
010.00 476.91 835.67 32 202.28
current period
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
8. Statement on Changes of Owners' Equity of the Parent Company
Amount incurred in the current period
Unit: Yuan
Current period
Item
Share capital Other equity instruments Capital reserve Less: Other Special Surplus reserve Undistributed Total owners'
114
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Treasury comprehensive reserve profits equity
Perpetual
Preferred shares income
capital Others
Shares
securities
I. Closing balance of
784,799,010.00 507,773,837.83 109,922,336.87 63,085,510.75 1,465,580,695.45
the previous year
Plus: Change of
accounting policies
Correction to errors
of the previous
period
Others
II. Opening balance
784,799,010.00 507,773,837.83 109,922,336.87 63,085,510.75 1,465,580,695.45
of the current year
III. Increase and
decrease of the
7,812.30 48.10 29,998,243.79 30,006,104.19
current year (enter
"-" for decrease)
1. Total
comprehensive 48.10 53,667,658.26 53,667,706.36
income
2. Capital invested or
decreased by owners
(1) Ordinary shares
invested by the
shareholders
(2) Capitals invested
by other equity
instrument holders
(3) Amount of
share-based payment
included in owners'
equity
(4) Others
3. Profit distribution -23,669,414.47 -23,669,414.47
(1) Accrual of
surplus public
reserve
(2) Amount
distributed to owners -23,669,414.47 -23,669,414.47
(or shareholders)
(3) Others
4. Internal carrying
forward of owners'
equity
115
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Current period
Other equity instruments
Item Less: Other
Special Undistributed Total owners'
Share capital Perpetual Capital reserve Treasury comprehensive Surplus reserve
Preferred reserve profits equity
capital Others shares income
Shares
securities
(1) Capital reserve
transferred to
increase capital (or
share capital)
(2) Surplus public
reserve transferred to
increase capital (or
share capital)
(3) Surplus public
reserve
compensating losses
(4) Others
5. Special reserve
(1) Accrual of the
current year
(2) Amount utilized
in the current period
6. Others 7,812.30 7,812.30
IV. Closing balance
784,799,010.00 507,781,650.13 48.10 109,922,336.87 93,083,754.54 1,495,586,799.64
of the current period
Amount of the previous year
Unit: Yuan
Previous period
Other equity instruments
Item Less: Other
Special Undistributed Total owners'
Share capital Perpetual Capital reserve Treasury comprehensive Surplus reserve
Preferred reserve profits equity
capital Others shares income
Shares
securities
I. Closing balance of
784,799,010.00 405,955,264.44 102,912,835.67 -22,209,989.62 1,271,457,120.49
the previous year
Plus: Change of
accounting policies
Correction to errors
of the previous
period
Others
II. Opening balance 784,799,010.00 405,955,264.44 102,912,835.67 -22,209,989.62 1,271,457,120.49
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Previous period
Other equity instruments
Item Less: Other
Special Undistributed Total owners'
Share capital Perpetual Capital reserve Treasury comprehensive Surplus reserve
Preferred reserve profits equity
capital Others shares income
Shares
securities
of the current year
III. Increase and
decrease of the
101,816,219.19 47,780,170.69 149,596,389.88
current year (enter
"-" for decrease)
1. Total
comprehensive 47,780,170.69 47,780,170.69
income
2. Capital invested or
decreased by owners
(1) Ordinary shares
invested by the
shareholders
(2) Capitals invested
by other equity
instrument holders
(3) Amount of
share-based payment
included in owners'
equity
(4) Others
3. Profit distribution
(1) Accrual of
surplus public
reserve
(2) Amount
distributed to owners
(or shareholders)
(3) Others
4. Internal carrying
forward of owners'
equity
(1) Capital reserve
transferred to
increase capital (or
share capital)
(2) Surplus public
reserve transferred to
increase capital (or
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Previous period
Other equity instruments
Item Less: Other
Special Undistributed Total owners'
Share capital Perpetual Capital reserve Treasury comprehensive Surplus reserve
Preferred reserve profits equity
capital Others shares income
Shares
securities
share capital)
(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 101,816,219.19 101,816,219.19
IV. Closing balance
784,799,010.00 507,771,483.63 102,912,835.67 25,570,181.07 1,421,053,510.37
of the current period
Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong
III. Company Profile
Shenzhen SEG Co., Ltd. (hereinafter referred to as "the Company") was incorporated on July 16, 1996 through public
offering with Shenzhen SEG Group Co., Ltd. as the sole initiator upon the approval of relevant departments of Shenzhen
and the state in accordance with the Company Law of the People's Republic of China. With approval of the securities
administration departments of Shenzhen and the state, the Company's B shares and A shares were listed and traded on
Shenzhen Stock Exchange respectively in July 1996 and December 1996.
On June 7, 2006, the Company passed a resolution at the general meeting of shareholders concerning the equity division
reform. According to the transfer plan of capital reserve into common shares, the Company distributed 4.6445 shares to
tradable A share shareholders for each 10 shares, which totaled 40,233,322 transferred shares. As a result, its
non-tradable A shares were qualified for listing and circulating. Among the converted and increased capital share
obtained by the tradable A-share shareholders, 6,997,054 shares were received due to the Company's share capital
expansion and the rest of 33,236,268 shares were the consideration paid to the tradable A-share shareholders by
non-tradable A-share holders under fixed arrangements.
As of June 30, 2016, the total capital share of the Company amounts to 784,799,010 shares, including 26,689 restricted
shares and 784,772,321 unrestricted shares. The registered capital is 784,799,010 Yuan. The registered address is 31F,
Tower A, Stars Plaza, Huaqiang Road (N), Futian District, Shenzhen.
1. Business Scope
General items: Domestic commerce, goods supply and sales (excluding commodities under special operation, control
and sales), business development (specific projects shall be further declared), economic information consulting, property
lease, real estate agency, and operation of SEG special the electronics markets (the license for the special market shall be
further applied for).
2. Business Property and Business Operations
The Company engages in business service industry, involving products and service mainly in operation and management
of special the electronics markets, lease business and other tertiary industries. 22 entities are included in the current
consolidated financial statements, namely:
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Proportion of Proportion of voting
Subsidiary name Type of subsidiary Level
shareholding (%) right (%)
Shenzhen SEG Baohua Enterprise Development Co.,
Holding subsidiary I 66.58 66.58
Ltd.
Shenzhen Mellow Orange Business Hotel Management
Holding grandson company Ⅱ 66.58 66.58
Co., Ltd
Shenzhen SEG Industrial Investment Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Changsha SEG Development Co., Ltd. Holding subsidiary I 46.00 51.00
Shenzhen SEG Electronics Market Management Co.,
Holding subsidiary I 70.00 70.00
Ltd.
Suzhou SEG Electronics Market Management Co., Ltd. Holding subsidiary I 45.00 45.00
Xi'an SEG Electronics Market Co., Ltd. Holding subsidiary I 65.00 65.00
Shenzhen SEG Credit Co., Ltd. Holding subsidiary I 53.02 53.02
Shenzhen SEG E-Commerce Co., Ltd. Holding subsidiary I 51.00 51.00
Shenzhen SEG Electronics Market Management Co.,
Wholly-owned subsidiary I 100.00 100.00
Ltd.
Xi'an Hairong SEG Electronics Market Co., Ltd. Holding subsidiary I 51.00 51.00
Wujiang SEG Electronics Market Co., Ltd. Holding subsidiary I 51.00 51.00
Wuxi SEG Electronics Market Co., Ltd Holding subsidiary I 51.00 51.00
Foshan Shunde SEG Electronics Market Management
Wholly-owned subsidiary I 100.00 100.00
Co., Ltd.
Nanning SEG Electronics Market Management Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Nantong SEG Times Square Development Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Yantai SEG Times Square Development Co., Ltd. Holding subsidiary I 90.00 90.00
Nantong SEG Commercial Operation Management Co.,
Wholly-owned subsidiary I 100.00 100.00
Ltd.
Suzhou SEG Digital Plaza Management Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Xi'an Fengdong New Town SEG Times Square
Wholly-owned subsidiary I 100.00 100.00
Properties Co., Ltd.
Suzhou SEG Intelligent Technology Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Shenzhen SEG Longyan New Energy Application and
Holding subsidiary I 50.00 50.00
Development Co., Ltd.
For the cause for difference between the proportion of shareholding and the proportion of voting rights and the basis for control of the
invested entity even with half of voting rights or less, see "Note 8: Equities in other entities – (1) Equities in subsidiaries".
Compared with the previous period, two subsidiaries are added to entities included in the consolidated financial statements of the current
period.
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IV. Basis of preparation of the financial statements
1. Basis of preparation
The Company has conducted confirmation and measurement based on the transactions and events that have been actually
incurred and in accordance with the Accounting Standards for Business Enterprises (ASBE) and specific standards, the
application guide of ASBE, the interpretation of ASBE and other relevant regulations (hereinafter collectively referred to
as "the ASBE"). According to Listed Company Information Disclosure Preparation Rules No. 15 - General Regulations
on Financial Report (amended in 2014) released by CSRC, the Company prepared the financial statements.
2. Sustainable operation ability
There is no concern on sustainable operation ability of the Company within 12 months since the end of the report period.
V. Important accounting policies and accounting estimates
1. Statement on compliance with ASBE
The financial statements prepared by the Company comply with the requirements of the Accounting Standard for
Business Enterprises and truthfully and completely reflect relevant information on the financial position, operating
results, and cash flows of the Company.
2. Accounting period
A fiscal year lasts from January 1st to December 31st of the Gregorian calendar.
3. Recording currency
Renminbi is the recording currency of the financial statements of the Company.
4. Accounting treatment method for the merger of the enterprises under the control of a same entity
and those not under the control of a same entity
i. If the terms and conditions or economic influences of deals involved in business merger by steps are consistent with
the following case(s), several deals will be processed as a package deal for accounting treatment.
(1) Those deals are made at the same time or in consideration of mutual influences;
(2) A complete business result can be achieved only with the deals as integrity;
(3) The occurrence of one transaction depends on the occurrence of at least one transaction.
(4) A single deal is uneconomical but the integration with other deals is economical.
ii. Business merger under common control
Assets and liabilities acquired by the Company in the merger are calculated based on the book value of the merged
party's assets and liabilities (including goodwill resulting from the acquisition of the merged party) in the consolidated
financial statements of the ultimate controlling party on the date of merger. The capital stock premium of capital reserve
is adjusted based on the difference between the book value of net assets acquired in the merger and that of the
consideration of the merger (or the total book value of issued shares). The retained earnings are adjusted if the capital
stock premium is not sufficient for writing off.
If contingent consideration exists and the estimated liabilities and assets have to be recognized, the capital reserve
(capital surplus or capital stock premium) is adjusted based on the difference between the estimated liabilities and assets
and the subsequent contingent consideration. The retained earnings are adjusted if the capital reserve is not sufficient for
writing off.
For business merger through several deals, deals in a package will be treated as one deal with control right acquired for
accounting treatment; for deals not in a package, the capital reserve is adjusted based on the difference between the
initial cost of long-term equity investment and the sum of book value of long-term equity investment before merger and
book value of consideration payment for new shares. The retained earnings are adjusted if the capital reserve is not
sufficient for writing off. For equity investment held before merger, other comprehensive income recognized by the
equity method, financial instruments or calculation standards will not be subject to accounting treatment, and until the
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disposal of such investment such accounting treatment is carried out on the same basis as the direct disposal of related
assets and liabilities by the invested party; other changes in owners' equity excluding net profit and loss, other
comprehensive income and profit distribution in the net assets of the invested party recognized by the equity accounting
method will not be subject to accounting treatment and is transferred to current profit and loss after the disposal of such
investment.
iii. Business merger not under common control
The assets paid and the liabilities incurred or undertaken by the Company as the consideration on the date of merger are
calculated based on fair value. The difference between fair value and book value will be included in current profit and
loss.
If the merger cost is higher than the fair value of the net identifiable assets of the acquired party acquired by merger, the
difference is recognized as goodwill. If the merger cost is lower than the fair value of the net identifiable assets of the
acquired party acquired by merger, the difference is included in current profit and loss.
For business merger through several deals, deals in a package will be treated as one deal with control right acquired for
accounting treatment; for deals not in a package, the sum of book value of long-term equity investment before merger
and new investment cost is treated as the initial cost of long-term equity investment on the date of merger. For equity
investment held before merger, other comprehensive income recognized with the equity accounting method, accounting
treatment of such investment is carried out on the same basis as the direct disposal of related assets and liabilities by the
invested party. If the equity investment held before merger is subject to recognition by financial instruments and
accounting by measure standards, the sum of book value of long-term equity investment on the date of merger and new
investment cost is treated as the initial cost of long-term equity investment on the date of merger. The difference between
the fair value and book value of the equity previously held and accumulative changes in fair value originally included in
other comprehensive income are transferred to the investment income of the period of the date of merger.
iv. Expenses incurred due to merger
The auditing, legal, appraisal and consulting, and other relevant direct fees incurred for business merger are included in
current profit and loss at occurrence. The transaction expenses of equity securities issued for business merger which are
directly attributable to equity transaction are deducted from the equity.
5. Preparation method of the consolidated financial statements
i. Consolidation scope
The scope of the consolidated financial statements of the Company is determined based on share-holding status, and all
subsidiaries (including single entities controlled by the Company) are included in the scope.
ii. Consolidation procedure
The Company prepares the consolidated financial statements based on the financial statements of its own and its
subsidiaries and other related materials. In the preparation of consolidated financial statements, the whole group is
deemed as an accounting entity. According to the recognition, calculation and presentation requirements of related
accounting standards and consistent accounting policies, the overall financial condition, operation results and cash flow
are reflected.
The accounting policies and accounting period adopted by all subsidiaries included in the consolidation scope are
consistent with those of the Company. Otherwise, the Company shall make necessary adjustments according to its own
accounting policies and accounting period when preparing the consolidated financial statements.
During the consolidation, the influences of internal transactions between the Company and its subsidiaries and among
the subsidiaries on the consolidated balance sheet statement, the consolidated profit statement, the consolidated cash
flow statement and the consolidated statement on changes of owner's equity will be counteracted. If judgment on the
same transaction differs from the group perspective and with the Company or a subsidiary as the accounting entity, the
transaction shall be adjusted from the group perspective.
The owner's equity of subsidiaries, current net profit and loss and minority shares in current comprehensive income are
separately listed in the owner's equity of the consolidated balance sheet statement, net profit and total comprehensive
income of the consolidated profit statement respectively. If the current losses undertaken by minority shareholders of a
subsidiary exceed the owners' equity shared by minority shareholders of a subsidiary, the balance will be used to offset
the minority shareholders' equity.
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For a subsidiary acquired by merger of enterprises under common control, its financial statements are adjusted based on
the book value of its assets and liabilities (including goodwill resulting from acquisition of this subsidiary) in the
financial statements of the ultimate controlling party.
For a subsidiary acquired by merger of enterprises not under common control, its financial statements are adjusted based
on the fair value of net identifiable assets on the date of acquisition.
(1) Expansion of subsidiaries or business
In case of expansion of subsidiaries or business due to merger of enterprises under common control, the opening amount
of the consolidated balance sheet is adjusted in the report period. The income, expenses and profits of the subsidiaries
and business from the beginning of merger to the end of the report period are included in the consolidated profit
statement. The cash flow of the subsidiaries from the beginning of merger to the end of the report period is included in
the consolidated cash flow statement and related items of comparative statements are also adjusted. The reporting entity
after merger is deemed to exist since the ultimate controlling party starts control.
If the Company exerts control on an invested party under common control due to additional investment, it is deemed that
all parties involved in merger make adjustments in the present condition since the ultimate controlling party starts control.
For the equity investment held before acquisition of control right of the acquiree, relevant income and loss, other
comprehensive income and other changes in net asset are recognized from the later one between the date of acquisition
of the original equity and the date of the acquirer and the acquiree under common control to the date of merger, which
are used to offset the opening retained earnings or current profit and loss respectively.
In the report period, in case of expansion of subsidiaries or business due to merger of enterprises not under common
control, the opening amount of the consolidated balance sheet is not adjusted. The income, expenses and profits of such
subsidiaries and business from the date of acquisition to the end of the report period are included in the consolidated
profit statement. The cash flow of such subsidiaries from the date of acquisition to the end of the report period is
included in the consolidated cash flow statement
If the Company exerts control on an invested party not under common control due to additional investment, the equity of
the acquiree held before the date of acquisition shall be re-measured based on its fair value on the date of acquisition,
and the difference between the fair value and book value of the equity shall be included in current investment income. If
the equity of the acquiree held before the date of acquisition is involved in other comprehensive income and other
changes in owner's equity except net profit and loss, other comprehensive income and profit distribution with the equity
method, the relevant other comprehensive income and other changes in owner's equity are included in current investment
income, excluding other comprehensive income due to re-measurement of changes in net liabilities and net assets in
defined benefit plans.
(2) Disposal of subsidiaries or business
1) General disposal method
If the Company disposes of a subsidiary in the report period, the income, expenses and profits of the subsidiary from the
beginning period to the disposal date are included in the consolidated profit statement and the cash flow of the subsidiary
in the same period is included in the consolidated cash flow statement.
If the Company loses control of its subsidiary due to disposal of part of equity investment or other reasons, the remaining
equity shall be re-measured at fair value on the day when the Company losses control of the subsidiary. The difference
between the sum of consideration acquired due to equity disposal & fair value of the remaining equity and the sum of net
assets to be enjoyed based on the original shareholding proportion since the date of acquisition or merger & goodwill is
included in the investment income in the period of loss of control. Other comprehensive income and other changes in
owner's equity except net profit and loss, other comprehensive income and profit distribution relevant to the equity
investment in any previous subsidiary are transferred to current investment income at the time of loss of control,
excluding other comprehensive income due to re-measurement of changes in net liabilities and net assets in defined
benefit plans.
2) Disposal of subsidiaries by steps
If the Company disposes of equity investment in a subsidiary in several deals by steps until its loss of control and the
terms and conditions or economic influences of deals are consistent with the following case(s), several deals will be
treated as a package deal for accounting treatment.
A. Those deals are made at the same time or in consideration of mutual influences;
B. A complete business result can be achieved only with the deals as integrity;
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C. The occurrence of one deal depends on the occurrence of at least one deal.
D. A single deal is uneconomical but the integration with other deals is economical.
If deals incurred for disposal of equity investment in a subsidiary until the loss of control belong to a package deal, the
Company treats all deals as one for accounting treatment. However, the difference between the consideration acquired
from every disposal and the net asset to be enjoyed the said subsidiary based on such equity investment before loss of
control is recognized as other comprehensive income of the consolidated financial statements and transferred to the
current profit and loss at the time of loss of control.
For deals not in a package, before loss of control, the accounting treatment is based on policies about disposal of part of
equity investment in a subsidiary in case of no loss of control while at the time of losing control, the accounting
treatment is based on general methods for disposing of such subsidiary.
(3) Acquisition of minority shares of subsidiary
Based on the difference between long-term equity investment acquired due to acquisition of minority shares and net
assets to be enjoyed from such subsidiary since the date of acquisition (or merger), the capital stock premium of the
consolidated balance sheet statement is adjusted. The retained earnings are adjusted if the capital stock premium is not
sufficient for writing off.
(4) Disposal of part of equity investment in a subsidiary in case of no loss of control
The difference between the consideration acquired due to disposal of party of long-term equity investment in a
subsidiary and net assets to be enjoyed from such subsidiary since the date of acquisition (or merger), the capital stock
premium of the consolidated balance sheet statement is adjusted. The retained earnings are adjusted if the capital stock
premium is not sufficient for writing off.
6. Classification of joint arrangement and accounting treatment method of joint operation
i. Classification of joint arrangement
Based on the structure and legal form of joint arrangement, terms agreed in joint arrangement and other facts and
condition, the Company classifies joint arrangement into joint operation and joint venture.
Joint arrangement agreed not by individual entities is defined as joint operation. Joint arrangement agreed by individual
entities is generally defined as joint venture. If any joint arrangement satisfies any of the following conditions and
conforms to relevant laws and regulations with conclusive evidence, such joint arrangement is defined as joint operation:
(1) The legal form of joint arrangement shows that joint ventures share rights and obligations for assets and liabilities in
such arrangement.
(2) It is agreed in the terms of joint arrangement that joint ventures share rights and obligations for assets and liabilities
in such arrangement.
(3) Other facts and condition show that joint ventures share rights and obligations for assets and liabilities in such
arrangement. For example, joint ventures enjoy nearly all output relevant to such arrangement and settlement of
liabilities in such arrangement constantly depends on the support of joint ventures.
ii. Accounting treatment method of joint operation
The Company recognizes the following items in interest shares during joint operation, and carries out accounting
treatment in accordance with Accounting Standards for Business Enterprises:
(1) Recognizing assets held separately and assets shared based on shares;
(2) Recognizing liabilities undertaken separately and liabilities shared based on shares;
(3) Recognizing the income from sales of the share in joint operation output;
(4) Recognizing the income from sales of joint operation output based on shares;
(5) Recognizing the expenses individually incurred and expenses incurred by joint operation based on shares.
If the Company invests or sells assets (excluding assets that constitute business) to the joint operation, before such assets
are sold by the joint operation to the third party, only the part of profit and loss attributed to other parties in the joint
operation incurred by such transaction is recognized. If any impairment losses occur to the assets invested or sold in
accordance with Accounting Standards for Business Enterprises No. 8 - Asset Impairment, the Company recognizes the
losses in full.
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If the Company purchases assets from the joint operation, before such assets are sold to the third party, only the part of
profit and loss attributed to other parties in the joint operation incurred by such transaction is recognized. If any
impairment losses occur to the assets purchased in accordance with Accounting Standards for Business Enterprises No. 8
- Asset Impairment, the Company recognizes the losses based on shares.
The Company enjoys no common control of the joint operation. If the Company enjoys assets in the joint operation and
undertakes liabilities in the joint operation, the Company shall still carry out accounting treatment based on the foregoing
principles. Otherwise, the Company shall carry out accounting treatment in accordance with Accounting Standards for
Business Enterprises.
7. Standards for determination of cash and cash equivalents
In the preparation of the cash flow statement, the cash on hand and the bank deposits available for payment at any time
of the Company are recognized as cash. The investments that meet four conditions at the same time, i.e. short term (due
within 3 months since the date of purchase), strong liquidity, easiness in being converted into known cash, fairly small
risk of value fluctuation are recognized as cash equivalents.
8. Foreign currency businesses and translation of the financial statements in foreign currency
Foreign currency business
In the initial recognition, a foreign currency business transaction is converted to RMB for bookkeeping based on the spot
exchange rate at the date of transaction.
At the balance sheet date, monetary items in foreign currency are converted based on the spot exchange rate at the
balance sheet date. The exchange difference thus incurred is included in current profit and loss while the exchange
difference incurred by special foreign currency borrowings for acquisition and construction of assets eligible for
capitalization is treated with the principle of capitalization of borrowing costs. The non-monetary items in foreign
currency measured by the historical cost method are converted based on the spot exchange rate at the date of transaction,
and the amount in the recording currency is not changed.
Non-monetary items in foreign currency measured by fair value are converted based on the spot exchange rate at the date
of recognition of the fair value while the translation difference thus incurred is included in current profit and loss as
profit and loss from changes in fair value. For non-monetary items in foreign currency available for sales, the translation
difference is included in other comprehensive income.
Translation of foreign currency financial statements
In the balance sheet statement, assets and liabilities are converted based on the spot exchange rate at the date of balance
sheet statement, and items other than "undistributed profits" in the owner's equity are converted based on the spot
exchange rate. The income and expense in the profit statement are converted based on the spot exchange rate at the date
of transaction. The translation difference of foreign currency financial statements with the foregoing method is included
in other comprehensive income.
At the disposal of overseas business, the translation difference of foreign currency financial statements that is listed in
other comprehensive income of the balance sheet statement and relevant to such overseas business is transferred from
other comprehensive income to current profit and loss in the period of disposal. The equity proportion in overseas
business is reduced due to disposal of part of equity investment or other reasons but the control right on the overseas
business remains, the translation difference of foreign currency financial statements relevant to such overseas business is
not transferred to current profit and loss. At the disposal of part of equity investment in overseas business in the form of a
joint venture or associate, the translation difference of foreign currency financial statements relevant to such overseas
business is transferred to current profit and loss in the period of disposal based on the proportion of disposal.
9. Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
i. Classification of financial instruments
According to the contract terms and economic nature of financial instruments rather than in the legal form only, in
combination of the purposes of acquisition and holding of financial assets and undertaking of financial debts, the
management classifies financial assets and liabilities as follows: financial assets (or liabilities) measured based on fair
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value with changes included in current profit and loss, held-to-maturity securities, accounts receivable, financial assets
available for sales, and other financial liabilities.
ii. Confirmation basis for and measurement method of financial instruments
(1) Financial assets (liabilities) measured by fair value and with changes included in the current gains and losses
Financial assets or liabilities measured by fair value with changes included in current profit and loss include transactional
financial assets or liabilities and financial assets or liabilities to be measured by fair value with changes included in the
current profit and loss by direct specification.
Transactional financial assets or liabilities refer to financial assets or liabilities that satisfy any of the following
conditions:
1) Such financial assets or liabilities are acquired for the purpose of sales, repurchase or redemption in a short term;
2) Such financial assets or liabilities are part of identifiable financial instruments portfolio available for central
management, and objective evidence shows that the Company has recently managed the portfolio for short-term gains;
3) Such financial assets or liabilities belong to derivative financial instruments, excluding the designated derivative
instruments which are effective hedging instruments, derivative instruments for financial guarantee contracts, and
derivative instruments that are connected with equity instrument investments for which there is no quoted price in the
active market, whose fair value cannot be reliably measured, and which shall be settled by delivering the said equity
instruments.
Financial assets or liabilities can be measured by fair value with changes included in the current profit and loss through
designation only when one of the following conditions is met.
1) Through such designation, inconsistency in recognition or measurement of profit and loss resulting from different
measurement basis of financial assets or liabilities can be eliminated or obviously reduced;
2) It has been set forth in formal written documents about risk management or investment strategy that such financial
asset portfolio, financial liability portfolio, or the portfolio of such financial assets or liabilities shall be managed,
evaluated and reported to key management based on fair value;
3) A mixed instrument with one and several embedded derivative instrument (s), unless the embedded derivative
instruments cause no major changes to the cash flow of such mixed instrument or shall not be separated from the
derivative instrument (s) obviously;
4) A mixed instrument with embedded derivative instrument (s) that needs to be separated but cannot be separately
measured at the time of acquisition or the subsequent balance sheet date.
The Company treats the fair value of financial assets or liabilities measured by fair value with changes included in the
current profit and loss at the time of acquisition as the initial recognized amount, including relevant transaction expenses
in the current profit and loss. The interests and cash dividends acquired during the period of holding are recognized as
investment income. At the time of disposal, the difference between the fair value and the initial amount entered in the
account is recognized as investment income and the profit and loss from changes in fair value are adjusted at the same
time.
(2) Accounts receivable
For credit receivable due to the commodities sold or labor services provided by the Company and credit of other
enterprises held by the Company other than the credit of debt tools with quotes in an active market, including accounts
receivable and other receivables, the amount receivable in contracts or agreements from the purchaser is treated as the
initial recognition amount. For those of a financing nature, the current value is treated as the initial recognition amount.
At the time of collection or disposal, the difference between the amount acquired and the book value of such accounts
receivable are included in the current profit and loss.
(3) Held-to-maturity investment
Held-to-maturity investment refers to non-derivative financial assets with fixed maturity date and fixed or definite
collection amount which the Company may hold to maturity with clear intention and ability.
For held-to-maturity investment, the Company treats the sum of fair value at the time of acquisition (deducting bond
interests matured but not collected) and relevant transaction expenses as the initial recognition amount. During the period
of share-holding, the interest income is calculated and confirmed in accordance with the amortized and the actual interest
rate, which is recorded into the investment income. The actual interest rate is determined at the time of acquisition and
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remains unchanged within the anticipated existence period or a shorter period applicable. At the time of disposal, the
difference between the price of acquisition and the book value of such investment is included in investment income.
If the amount of the held-to-maturity investment disposed of or re-classified as other financial assets is larger than the
total amount of all held-to-maturity investment before sale or reclassification, the remaining held-to-maturity investment
shall be re-classified as available-for-sale financial assets immediately after disposal or reclassification. On the
reclassification date, the difference between the book value and fair value of such investment is included in other
comprehensive income, which is transferred out at depreciation or recognition end of such available-for-sale financial
assets and included in the current profit and loss. The following cases can be excluded:
1) The sale or reclassification date is close to the expiry or redemption date of such investment (for example within three
months before the expiry date), and changes in interest rate have no significant impacts on the fair value of such
investment.
2) The enterprise has recovered nearly all original principal with the repayment method specified in the contract.
3) Sale or reclassification arises from independent events that are beyond the control of the enterprise, expected not to
recur, and hard to be predicated.
(4) Available-for -sale financial assets
Available-for -sale financial assets refer to non-derivative financial assets designated at initial recognition and financial
assets other than other financial assets category.
For financial assets available for sale, the Company treats the sum of fair value at the time of acquisition (deducting bond
interests matured but not collected) and relevant transaction expenses as the initial recognition amount. The interests or
cash dividends obtained during the time of holding are recognized as investment income. Profit or loss from change in
the fair value of financial assets available for sale but excluding impairment loss and exchange difference of monetary
financial assets in foreign currency are directly included in other comprehensive incomes. At the time of disposal, the
difference between the price of acquisition and the book value of such financial assets is included in investment profit
and loss. At the same time, the amount of assets disposed originally included in the accumulative amount of changes in
the fair value of other comprehensive income is transferred to investment profit and loss.
Equity instruments with no quotes in the active market and with fair value not reliably measured and derivative
instruments that are connected with the said equity instruments and settled by delivery of the said equity instruments are
measured by cost.
(5) Other financial liabilities
The sum of the fair value of such assets and relevant transaction expenses is taken as the initial recognition amount. The
amortized cost is adopted in the subsequent measurement.
iii. Recognition basis and measurement method of financial assets transfer
In case of financial assets transfer of the Company, if almost all risks and returns in the ownership rights of financial
assets are transferred to the assignee, the recognition of such financial assets is terminated, and if almost all risks and
returns in the ownership rights of such financial assets are retained, the recognition of such financial assets is not
terminated.
In the judgment whether a financial asset transfer meets the foregoing conditions for termination of its recognition, the
principle of more focus on substance than form is adopted. The Company divides financial assets transfer into the
complete and the partial transfer. Where the complete transfer of financial assets meets the conditions for termination of
recognition, the difference between the following two amounts is included in the current profit and loss.
(1) Book value of the transferred financial assets;
(1) The sum of consideration acquired due to transfer and the accumulative amount of changes in fair value originally
included in owners' equity (involving the case where the transferred financial assets are the financial assets available for
sale).
If the partial transfer of financial assets meet conditions for termination of recognition, the part with its recognition
terminated and that with its recognition not terminated, among the book value of all the transferred financial assets, are
apportioned separately based on their relevant fair value while the difference between the following two amounts is
included in the current profit and loss.
(1) Book value of the part with its recognition terminated;
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(2) The sum of consideration of the part with its recognition terminated and the amount of the part with its recognition
terminated originally included in the accumulative amount of changes in the fair value of owners' equity (involving the
case where the transferred financial assets are the financial assets available for sale).
In case that financial assets transfer does not meet the conditions for termination of recognition, the recognition of such
financial assets is continued. The consideration acquired is recognized as a financial liability.
iv. Conditions for termination of recognition of financial liabilities
If current obligations for a financial liability are discharged wholly or partially, the recognition of the financial liability is
terminated wholly or partially. If the Company signs an agreement with the creditor to substitute an existing financial
liability with a new financial liability and the contract terms about the new liability and the existing liability are
inconsistent, the recognition of the existing financial liability is terminated and the new financial liability is recognized at
the same time.
If material alterations have been made to contract terms of the existing financial liability wholly or partially, the
recognition of the existing liability is wholly or partially terminated and, in the meantime, the liability after alterations is
recognized as a new financial liability.
If the confirmation of all or a part of a financial liability is terminated, the difference between the book value of the
liability with its confirmation terminated and the consideration (including non-cash assets transferred or the new liability
assumed) is included in current gains and losses.
If the Company repurchases part of a financial liability, the total book value of such liability is allocated on the date of
purchase based on the relative fair value of the part with its recognition continued and that with its recognition
terminated. The difference between the book value allocated to the part with its recognition terminated and the
consideration (including non-cash assets or the new liability) is included in the current profit and loss.
v. Methods for the determination of the fair value of financial assets and liabilities
For financial assets and liabilities that exist in an active market, the Company determines their fair value based on the
quotation in the active market. For financial assets initially acquired or derivative financial assets or liabilities
undertaken, the Company determines their fair value based on the market price. For financial assets and liabilities that do
not exist in an active market, their fair values are determined with appraisal techniques. In appraisal, the Company
adopts applicable appraisal techniques in the current case with sufficient data and other information support, chooses the
input values that are consistent with features of assets or liabilities taken into consideration by market participants in
relevant transactions, and makes priority use of relevant observable input values. In case that relevant observable input
values cannot be obtained or it is unpractical to obtain them, unobservable input values will be used.
vi. Accrual of impairment provision for financial assets (excluding accounts receivable)
The Company shall verify the book value of financial assets measured by fair value with changes included in the current
profit and loss at the balance sheet date. If any objective evidence shows impairment of such financial assets, an
impairment provision shall be made.
Objective evidence for impairment of such financial assets includes but is not limited to:
(1) A serious financial difficulty occurs to the issuer or debtor;
(2) The debtor breaches any contract terms, for example, fails to pay or delays the payment of interests or the principal;
(3) The creditor makes any concession to the debtor which is in financial difficulties due to economic or legal factors;
(4) The debtor will probably become bankrupt or carry out other financial reorganizations;
(5) The financial asset can no longer continue to be traded in the active market due to serious financial difficulties of the
issuer;
(6) It is impossible to identify whether the cash flow of a certain asset within a certain combination of financial assets
has decreased or not. But after an overall appraisal according to the public data available, it is found that the predicted
future cash flow of the said combination of financial assets has indeed decreased since it was initially recognized and
such decrease can be measured, for example, the ability of the debtor of the said combination of financial assets worsens
gradually, the unemployment rate of the country or region where the debtor is situated increases, the prices of the region
where the guaranty is situated are obviously dropping, or the industrial sector concerned is in slump;
(7) Any seriously disadvantageous change has occurred to technical, market, economic or legal environment wherein the
issuer operates its business, which makes the investor of an equity instrument unable to withdraw its investment cost;
(8) Where the fair value of the equity instrument investment drops significantly or not temporarily;
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Specific impairment methods of financial assets are as follows:
(1) Impairment provision for financial assets available for sale
The Company shall appraise the impairment loss of each financial asset with the specific identification method at the
balance sheet date. Where the fair value of the equity instrument investment drops significantly or not temporarily, it is
an objective evidence for impairment of equity instruments available for sale. In terms of the specific quantitative
criterion, if the fair value of such equity instrument investment is lower than over 50% (including 50%) of its cost or is
lower than its cost for over 12 months (including 2 months) consecutively, it indicates that such asset is impaired.
When a financial asset available for sale is impaired, even if the recognition of the financial asset has not been
terminated, the accumulative losses arising from decrease in the fair value of the owner's equity which was directly
included in other comprehensive income shall be transferred out and included in the current profit and loss. The
accumulative losses that are transferred out shall be the balance between the initial costs of the financial asset available
for sale and the principals as taken back, the current fair value and the impairment-related losses as was included in the
current profit and loss.
As for the debt instruments available for sale whose impairment losses have been recognized, if, within the accounting
period thereafter, the fair value has risen and such instruments are objectively related to the subsequent events that occur
after the original impairment losses were recognized, the originally recognized impairment losses shall be reversed and
included in the current profit and loss. The impairment loss of equity instruments available for sale shall be reversed
when the value of such equity instruments rebound. However, for equity instruments investment with no quotes in the
active market and with fair value not reliably measured and derivative instruments that are connected with the said
equity instruments and settled by delivery of the said equity instruments, the impairment loss shall not be reversed.
(2) Impairment provision for held-to-maturity investments
If any objective evidence shows impairment of held-to-maturity investments, the impairment loss shall be calculated
based on the difference between the book value of those investments and the current value of the expected future cash
flow. If any evidence indicates that the investment value has recovered after provision, the originally recognized
impairment loss can be reversed and included in the current profit and loss. However, the reversed book value shall not
exceed the amortized cost of such financial assets at the date of reversal in case that the impairment provision has not
been made.
vii. Counteraction of financial assets and liabilities
Financial assets and liabilities are separately listed in the balance sheet statement and not counteracted. However, if the
following conditions are satisfied at the same time, the balance after counteraction may be listed in the balance sheet
statement.
(1) The Company has the legal right to counteract the recognized amount which is currently enforceable.
(2) The Company plans to settle in net amount or realize such financial assets and liquidate such financial liabilities at
the same time.
10. Accounts receivable
(1) Accounts receivable with significant single amount and single provision for bad debts
Criterion or amount limit for determining a significant single amount Top five accounts receivable
Carry out independent impairment testing. If the current value of the
expected future cash flow is less than its book value, a provision shall
Accounts receivable with significant single amount and single
be made for the bad liabilities which will be included in the current
provision for bad liabilities
profit and loss. Accounts receivable with no impairment by test shall
be included in the bad debt provision for a certain combination.
(2) Other receivables with bad debt provision accrued based on credit risk feature combinations
Name of combination Accrual method for making bad debts provision
Combination of aging analysis method Aging analysis method
Combination of specific object Other method
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Bad debt provision made using the aging analysis method
√ Applicable □ Not applicable
Provision proportion of accounts receivable Provision proportion of other accounts
Aging
(%) receivable (%)
1-2 years 5.00% 5.00%
2-3 years 10.00% 10.00%
Over 3 years 20.00% 20.00%
Accounts receivable in the portfolio, for which the bad debt provision was accrued by the Percentage of Total Accounts Receivable
Outstanding method.
□ Applicable √ Not applicable
Accounts receivable in the portfolio, for which the bad debt provision was accrued by other methods.
□ Applicable √ Not applicable
(3) Other receivables with an insignificant amount individually, for which bad debt provision is separately
accrued
The reason for single provision for bad debts is that any objective
Reason of making bad debts provision for a single amount evidence indicates that the Company is unable to recover the accounts
receivable according to the original terms.
Accrual method for bad debt provision: The difference between the
Accrual method for making bad debts provision expected future cash flow and its book value is accrued for bad debt
provision.
11. Inventory
i. Classification of inventory
Inventory refers to finished products or commodities held for sale by the Company in daily activities, products in process,
and materials consumed in the production or labor service process. It mainly includes raw materials, circulating materials,
commissioned processing materials, products in process, semi-finished goods, finished products (stock goods), delivered
goods, development costs, product development, etc.
Development costs refer to properties not completed for sale purposes. Lands to be developed refer to the land which is
purchased and planned for developed products after its completion. Developed products refer to properties which have
been completed and are to be sold. In the overall development of a project, lands to be developed are transferred to
development costs. In the development by phases, the land developed in phases is transferred to development costs while
the land not developed remains in the land to be developed.
ii. Pricing method of inventory
Initial measurement will be carried out at the time of acquisition of the inventory based on its costs, including
procurement cost, processing cost and other costs. The pricing of the inventory is based on the weighted-average method
at the time of delivery.
iii. Determination basis for net realizable value of inventory and accrual method for inventory depreciation provision
After a complete check on the inventory at the end of the period, the inventory depreciation provision is accrued or
adjusted based on the lower one between the inventory cost and the net realizable value. The net realizable value of
commodity inventory directly for sale including finished products, stock goods and materials for sale is determined by
the estimated selling price of such inventory minus estimated selling expenses and relevant taxes during production and
operation. The net realizable value of material inventory to be processed is determined by the estimated selling price of
the finished product minus estimated cost to be incurred until completion, estimated selling expenses and relevant taxes
during production and operation. The net realizable value of inventory held for fulfilling sales contract or labor service
contract is calculated based on the contract price. If quantity of inventories held is more than the ordered quantity in the
sales contract, the net realizable value of the inventory for the excess part is calculated based on general selling price.
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At the end of the period, the inventory depreciation provision is accrued based on separate items. However, for
inventories in large quantity at low unit price, the depreciation provision is accrued based on types of inventories. For
inventories that are related to product series produced and sold in the same area for same or similar final use or purpose
and difficult to be measured separately from other items, inventory depreciation provision is consolidated for accrual.
Where factors that caused decrease in value of inventory disappear, the amount written down shall be recovered and
written back from the accrued inventory depreciation provision. The amount written back shall be included in the current
profit and loss.
iv. Inventory system
The perpetual inventory system is adopted.
v. Amortization method of low-value consumables and packages
(1) For low value consumables, the one-off amortization method is adopted.
(2) For packaging materials, the one-off amortization method is adopted
vi. Accounting method of land for development
The expenses incurred by pure land development project shall constitute the land development cost alone.
For projects with overall development of property, the expenses with definite payers are generally amortized to the cost
of a commodity house based on the actual area.
vii. Accounting method of public facility expenses
For public facilities that cannot be transferred with compensation, the allocation standard is determined based on the
benefit ratio and the facilities are included in the cost of the commodity house.
For public facilities that can be transferred with compensation, the supporting facilities are cost accounting objects and
included in the cost incurred.
viii. Accounting method of the maintenance fund
According to local provisions of the development project, the maintenance fund is collected from the house purchaser
when the developed product is sold (or pre-sold) or included in the development cost, and submitted to the maintenance
fund management department.
ix. Accounting method of the warranty deposit
According to provisions in the construction contract, the warranty deposit is retained from the project fund of the
construction organization. Maintenance expenses incurred in the warranty period of a developed product can be used to
offset the warranty deposit. When the warranty period expires, the balance shall be returned to the construction
organization.
12. Held-for-sale assets
i. Recognition standard for held-for-sale assets
The corporate integral part (or non-current asset) that satisfies the following conditions is recognized as an integral part
of held-for-sale assets.
(1) The integral part must be available for sale under its current status only according to conventional terms on sale of
such integral part.
(2) The enterprise has made resolutions concerning disposal of such integral part. For those requiring approval of
shareholders, approval of the general meeting of shareholders or other power organs has been gained.
(3) The enterprise and the transferee have entered into an irrevocable transfer agreement.
(4) Such transfer will be completed within one year.
ii. Accounting method of held-for-sale assets
For a fixed asset held for sale, the Company adjusts the estimated net residual value of such fixed asset which reflects the
balance between the fair value and disposal expense. If a fixed asset does not satisfy held-for-sale conditions, the balance
between the original book value of such fixed asset and the estimated net residual value after adjustment shall be treated
as asset depreciation and included in the current profit and loss. The fixed asset held for sale is not subject to accrual of
depreciation or amortization, and is measured by the lower one between the book value and the result after the disposal
expense is deducted from the fair value.
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The foregoing method also applies to equity investment, intangible assets, and other non-current assets that satisfy
held-for-sale conditions. However, deferred tax assets, financial assets regulated in the Enterprise Accounting Standard
No. 22 - Financial Instrument Recognition and Measurement, investment properties and biological assets measured by
the fair value, and contract rights conferred by the insurance contract are excluded.
13. Long-term equity investment
i. Determination of the investment cost
(1) For the specific accounting policy for long-term equity investment arising from business merger, see Note 4 (4)
accounting method for business merger under or not under common control.
Long-term equity investment obtained in other ways
(2) The actual payment is taken as the initial investment cost of the long-term equity investment obtained by cash. The
initial investment cost includes expenses, taxes, and other necessary expenditure directly related to long-term equity
investment.
The fair value of the issued equity securities is taken as the initial investment cost of the long-term equity investment
obtained by issue of equity securities. For issue or acquisition of the enterprise's own equity instruments that are directly
attributable to equity transaction, transaction expenses are deducted from the equity.
Under the premises that the non-monetary assets exchange is of commercial nature and that the fair value of the assets
received and given out in the exchange can be measured reliably, the initial investment cost of the long-term equity
investment received in non-monetary assets exchange is determined on the basis of the fair value of the assets given out,
unless there are definite evidences that the fair value of the received assets is more reliable. For the non-monetary assets
exchange that do not meet the above premises, the book value of the received assets and relevant taxes payable is taken
as the cost of the long-term equity investment.
The initial investment cost of the long-term equity investment obtained through debt restructuring is determined
according to its fair value.
ii. Measurement after recognition and profit and loss recognition
(1) Cost method
The Company conducts accounting with the cost method for long-term equity investment controlled by the investee,
enter the initial investment cost to the account book, and add or recover investment to adjust the cost of long-term equity
investment.
Under equity method, the Company recognizes investment income according to the cash dividends or profits enjoyed by
the Company, for which the investee declares to distribute, except the actual amount paid when investment is acquired
and cash dividends and profits included in the consideration and declared but yet to be distributed.
(2) Equity method
The Company conducts accounting with the equity method for long-term equity investment of joint ventures or
associates. The equity investment part of associated enterprises held indirectly via the venture capital organization,
mutual fund, trust company, or similar entities including the unit-linked insurance foundation is measured by fair value
and its changes are included in the profit and loss.
If the initial cost of long-term equity investment is larger than the fair value of identifiable net assets of the investee to be
enjoyed by the Company at investment, the initial investment cost of the long-term equity investment is not adjusted. If
the former is smaller than the latter, the difference is included in the current profit and loss.
After the Company obtains long-term equity investment, the investment income and other comprehensive income are
recognized respectively based on the net profit and loss and other comprehensive income of the investee to be enjoyed
by the Company, and the book value of long-term equity investment is adjusted. The part to be enjoyed by the Company
is calculated based on the profit or cash dividend declared by the investee, and the book value of long-term equity
investment is reduced accordingly. For other changes in owner's equity excluding net profit and loss, other
comprehensive income, and profit distribution related to equity investment, the book value of long-term equity
investment adjusted and included in owner's equity.
When recognizing the net profit and loss of the investee to be enjoyed, the Company shall adjust the net profit of the
investee before recognition based on the fair value of identifiable net assets of the investee at investment. The unrealized
profit or loss of internal transactions between the Company and the joint venture or associate is calculated based on the
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ratio to be enjoyed, and the part attributable to the Company is offset. The profit or loss from investment is recognized on
this basis.
Where the Company recognizes the due share of the losses incurred by the investee under the equity method, the
following sequence is adopted: First, the book value of the long-term equity investment is offset. Second, if the book
value of the long-term equity investment is not sufficient for the offsetting, the investment loss should continue to be
recognized within the limit of the book value of other long-term equity that practically constitutes net investments in the
investee and the book values of long-term accounts receivable and others are offset. Finally, if the enterprise still bears
additional obligations as agreed in the investment contract or agreement after the above processing, liabilities are
recognized according to the anticipated obligations to be borne and included in current investment loss.
Where the investee realizes profits in the later periods, the Company should make accounting treatment in the reversed
sequence against the above after deducting the shared loss not yet recognized, reduce the book balance of the recognized
anticipated liabilities, restore other long-term equity that practically constitutes net investments in the investee and the
book value of the long-term equity investment, and recognize investment income at the same time.
iii. Conversion of accounting methods of long-term equity investment
(1) Conversion from fair value method to equity method
The equity investment originally held by the Company that involves no control, common control, or significant influence
over the investee is recognized based on the financial instrument and subject to accounting treatment according to
accounting standards. If due to additional investment, the equity investment involves significant influence or common
control rather than control over the investee, the sum of the fair value of the original equity investment calculated
according to the Enterprise Accounting Standard No. 22 - Financial Instrument Recognition and Measurement and the
new investment cost is treated as the original investment cost subject to accounting with the equity method.
The difference between the fair value and book value of the original equity investment (classified as the
available-for-sale asset) and accumulative changes in fair value originally included in other comprehensive income are
transferred to the current profit and loss subject to accounting with the equity method.
The original investment cost is less than the fair value of the identifiable net asset of the investee to be enjoyed by the
Company calculated based on the new shareholding ratio after additional investment. The book value of long-term equity
investment is adjusted based on the difference, and included in the current non-operating income.
(2) Conversion from fair value method or equity method to cost method
The equity investment originally held by the Company that involves no control, common control, or significant influence
over the investee or long-term equity investment in joint ventures or associates is recognized based on the financial
instrument and subject to accounting treatment according to accounting standards. If due to additional investment, the
equity investment involves significant control over the investee not under common control, the sum of the fair value of
the original equity investment calculated and the new investment cost is treated as the original investment cost subject to
accounting with the cost method when the Company prepares some financial statements.
If other comprehensive income of the equity investment held before the purchase date is subject to accounting with the
equity method, such investment is subject to accounting treatment on the same basis where the investee directly disposes
of related assets or liabilities.
If the equity investment held before the purchase date is subject to accounting treatment according to the Enterprise
Accounting Standard No. 22 - Financial Instrument Recognition and Measurement, accumulative changes in fair value
originally included in other comprehensive income are transferred to the current profit and loss subject to accounting
with the cost method.
(3) Conversion from equity method to fair value method
If the Company loses common control or significant influence over the investee due to disposal of partial equity
investment, the residual equity after disposal is subject to accounting according to the Enterprise Accounting Standard
No. 22 - Financial Instrument Recognition and Measurement. The difference between the fair value and book value on
the date of loss of common control or significant influence is included in the current profit and loss.
If other comprehensive income of the original equity investment is subject to accounting with the equity method, when
the equity method is abandoned, such investment is subject to accounting treatment on the same basis where the investee
directly disposes of related assets or liabilities.
(4) Conversion from cost method to equity method
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If the Company loses control of the investee due to disposal of partial equity investment, the residual equity after
disposal with common control or significant influence over the investee is subject to accounting with the equity method,
and such residual equity is deemed to have adjusted subject to the equity method upon acquisition.
(5) Conversion from cost method to fair value method
If the Company loses control on the investee due to disposal of partial equity investment, the residual equity after
disposal is subject to accounting according to the Enterprise Accounting Standard No. 22 - Financial Instrument
Recognition and Measurement. The difference between the fair value and book value on the date of loss of control is
included in the current profit and loss when the Company prepares some financial statements.
iv. Disposal of long-term equity investment
The difference between the book value and actual price of long-term equity investment is included in the current profit
and loss. If long-term equity investment is subject to accounting with the equity method, the part originally included in
other comprehensive income is subject to accounting treatment pro rata on the same basis where the investee directly
disposes of related assets or liabilities.
If the terms and conditions or economic influences of deals involved in disposal of the equity investment in a subsidiary
are consistent with the following case(s), several deals will be processed as a package deal for accounting treatment.
(1) Those deals are made at the same time or in consideration of mutual influences;
(2) A complete business result can be achieved only with the deals as integrity;
(3) The occurrence of one transaction depends on the occurrence of at least one transaction.
(4) A single deal is uneconomical but the integration with other deals is economical.
If the Company loses control of a subsidiary due to disposal of partial equity investment or other reasons which does not
belong to a package deal, accounting treatment of the individual financial statement and consolidated financial statement
is handled through differentiation.
(1) In the individual financial statement, the difference between the book value and actual price of the equity investment
disposed of is included in the current profit and loss. The residual equity after disposal with common control or
significant influence over the investee is subject to accounting with the equity method, and such residual equity is
deemed to have adjusted subject to the equity method upon acquisition. The residual equity after disposal without
common control or significant influence over the investee is subject to accounting treatment according to the Enterprise
Accounting Standard No. 22 - Financial Instrument Recognition and Measurement. The difference between the fair value
and book value on the date of loss of control is included in the current profit and loss.
(2) In the consolidated financial statement, for deals before the Company loses control of a subsidiary, based on the
difference between the consideration acquired due to disposal of party of long-term equity investment in a subsidiary and
net assets to be enjoyed from such subsidiary since the date of acquisition or merger, the capital reserve (share premium)
is adjusted. The retained earnings are adjusted if the capital reserve is not sufficient for writing off. The residual equity is
re-measured based on the fair value on the date of loss of control. (Consideration received in connection with equity
disposal + Fair value of remaining equity – Net assets that are calculated based on the original shareholding proportion
since the day of acquisition) shall be included in the investment income in the period when the Company loses control of
the subsidiary. Other comprehensive income in connection with the subsidiary's equity investment shall be transferred
the current investment income when the Company loses control of the subsidiary.
If deals incurred for disposal of equity investment in a subsidiary until the loss of control belong to a package deal, the
Company treats all deals as one deal for accounting treatment. Accounting treatment of the individual financial statement
and consolidated financial statement is handled through differentiation.
(1) In the individual financial statement, the difference between the consideration acquired from each disposal and the
book value of long-term equity investment before loss of control is recognized as other comprehensive income and
transferred to the current profit and loss at the time of loss of control.
(2) In the consolidated financial statement, the difference between the consideration acquired from each disposal and the
net asset of the subsidiary to be enjoyed by the Company before loss of control is recognized as other comprehensive
income and transferred to the current profit and loss at the time of loss of control.
Criteria for common control and significant influence
If the Company and the other participants jointly control an arrangement and decision-making with significant influences
over the returns of such arrangement as agreed, joint control exists only with unanimous consent from participants
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sharing control. The Company and other participants shares control of the arrangement, and such arrangement is joint
arrangement.
If a joint arrangement is achieved through a single entity. If the Company has rights to the net asset of the single entity
according to related agreement, the single entity is a joint venture and the equity method applies. If the Company has no
rights to the net asset of the single entity according to related agreement, the single entity belongs to joint operation. The
Company confirms items related to the share of interests in the joint operation and conduct accounting treatment
according to provisions of the Enterprise Accounting Standard.
Significant influence refers to the case where the investor has the power to participate in financial and operating policy
decisions of an investee but cannot control or jointly control of those polices). The existence of significant influence by
the Company is evidenced in one or more of the following ways based on all facts and circumstances: (1) representation
on the board of directors or equivalent governing body of the investee; (2) participation in the financial and operating
policy-making process; (3) material transactions between the Company and the investee; (4) interchange of managerial
personnel; (5) provision of essential technical information.
14. Investment properties
Measurement mode of investment properties
Measurement of cost method
Depreciation and amortization
Investment property refers to the property held for earning rental or increasing the value of capital, including the right to
use of the rented land, the right to use of the land held for transfer after the value increases, and the rented building.
The Company uses the cost of investment properties as entry value. The cost of purchased investment properties includes
the purchase price, relevant taxes, and other expenses directly relegated to the asset. The cost of a self-built investment
real estate consists of the necessary expenses for building the asset to the expected condition for use.
The Company conducts measurement after recognition to the investment properties using the cost pattern, and makes
accrual depreciation or amortization for buildings and land use rights based on their expected service life and salvage
value. The following table lists the expected service life, net salvage value, and annual depreciation (amortization) rate of
investment properties:
Class Expected service life Expected salvage value Annual depreciation
(amortization) rate
Houses and buildings 20-40 5% 4.75%-2.38%
When the purpose of investment properties changes to self-use, the Company shall convert the investment properties to
fixed or intangible assets since the day of change. When the real estate with the right to self-use is changed for
generating rents or capital appreciation, the Company shall convert fixed or intangible assets to investment properties
since the day of change. The book value of the real estate prior to the conversion shall be entry value after conversion.
If investment properties are disposed of, or if they withdraw permanently from use and if no economic benefit will be
obtained from the disposal, the recognition of them as investment properties shall be terminated. When an enterprise
sells or transfers or discards any investment properties, or when any investment properties of an enterprise is damaged or
destroyed, the enterprise shall deduct the book value of the investment properties as well as the relevant taxes from the
disposal income, and include the amount in the current profit and loss.
15. Fixed assets
(1) Identification conditions
Fixed assets refer to the tangible assets held for the purpose of the manufacture of commodities, provision of labor
services, lease or operation and management with a term of use exceeding one year. Fixed assets can be identified when
meeting the following conditions: A. Economic interest relevant to the fixed assets is likely to flow into the enterprise; B.
The cost of the fixed assets can be reliably measured.
(2) Depreciation method
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Class Depreciation method Depreciation life Residual value rate Annual depreciation rate
Houses and buildings Straight-line method 20-40 5 4.75-2.38
Machinery equipment Straight-line method 5-10 5 19.00-9.50
Electronic equipment Straight-line method 5-10 5 19.00-9.50
Transportation equipment Straight-line method 5-10 5 19.00-9.50
Other equipment Straight-line method 5-10 5 19.00-9.50
(3) Recognition basis and pricing method of the fixed assets acquired under finance leases
The Fixed assets rented by the Company can be identified as the fixed assets under financing lease when meeting one or
several criteria as follows: A. When the lease term is due the proprietary of the leased property is transferred to the
Company. B. The Company has the option to buy the leased asset at a price which is expected to be far lower than the
fair value of the leased asset at the date when the option becomes exercisable. Thus, on the lease beginning date, it can
be reasonably determined that the option will be exercised. C. Even if the ownership of the asset is not transferred, the
lease term covers the major part of the useful life of the leased asset. D. The current value of the minimum lease payment
that is paid by the Company on the lease beginning date amounts to substantially all of the fair value of the leased asset
on the lease beginning date. E. The leased assets are of a special nature that only the Company can use them without
making major modifications. The lessee shall record the smaller one of the fair value of the leased asset and the current
value of the minimum lease payments on the lease beginning date as the entry value in an account, recognize the amount
of the minimum lease payments as the entry in an account of long-term account payable, and treat the balance between
the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges. The initial
direct costs such as commissions, attorney's fees, traveling expenses and stamp duties directly attributable to the leased
item incurred during the process of lease negotiating and lease contract signing shall be included in the asset value of the
current period. The unrecognized financing charge shall be amortized to each period during the lease term. In calculating
the depreciation of a leased asset, the Company adopts a depreciation policy for leased assets consistent with that for
depreciable assets which are owned by the lessee. If it is reasonably certain that the leasee will obtain the ownership of
the leased asset when the lease expires, the leased asset shall be fully depreciated over its service life. If it is not
reasonably certain that the lessee will obtain the ownership of the leased asset at the expiry of the lease term, the leased
asset shall be fully depreciated over the shorter one of the lease term or its service life.
16. Construction in progress
i. Type of construction in progress
The construction in progress carried out by the Company shall be valued according to its actual cost which is composed
of all necessary expenses incurred for bringing the asset to the expected conditions for use, including material costs,
labor costs, relevant taxes, borrowing costs eligible for capitalization, and indirect expenses eligible for amortization.
Cost accounting for the construction in progress of the Company shall be performed based on projects.
ii. Standards and time points for the construction in progress being carried forward to fixed assets
For a construction in progress, all expenses during the construction till the desired usable status of the asset is reached
are taken as the recorded value of the fixed asset. If a construction in progress has reached the desired usable status but
has not conducted final accounting, it is transferred into fixed assets when it reaches the desired usable status, according
to the estimated value based on project budget, construction cost or actual cost; in the meantime, depreciation is accrued
according to the Company's depreciation policies for fixed assets; when the final accounting is conducted the temporarily
estimated value is adjusted according to the actual cost while the accrued depreciation amount is not adjusted.
17. Borrowing costs
i. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred by the Company can be directly attributable to the purchase, building or production
of the assets that meet the conditions of capitalization, such assets are capitalized and included in relevant assets cost.
Other borrowing costs are recognized as expenses according to the incurred amount at the time of occurrence and
included in current profit and loss.
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The assets that meet the conditions of capitalization refer to the assets such as fixed assets, investment property and
inventory that can reach the anticipated usable or salable status only after a considerable time of purchase, building or
production activities.
The borrowing costs may be capitalized when all of the following conditions are met:
(1) The assets expenditure has already incurred, including that incurred in the form of cash payment, non-monetary
assets transfer or bearing of debts with interests for the purchase, building or production of the assets that meet the
conditions of capitalization.
(2) The borrowing costs have already been incurred.
(3) The construction or production activities necessary for putting the assets into a usable or salable status have already
started.
ii. Capitalization term of borrowing costs
The capitalization term refers to the period between the start time point and the end time port of the capitalization of the
borrowing costs, excluding the period in which the capitalization is suspended.
Where the purchase, building or production of the assets that meet the conditions of capitalization has put such assets
into the anticipated usable or salable status, the capitalization of the borrowing costs is stopped.
Where part of the projects in the purchase, building or production of the assets that meet the conditions of capitalization
have been completed and reached the anticipated usable or salable status, the capitalization of the borrowing costs of
such part of the assets is stopped.
Where different parts of the assets purchased, built or produced have been completed but cannot be used or sold till the
whole assets have been completed, the capitalization of the borrowing costs is stopped when the whole assets are
completed.
iii. Suspension period of capitalization
Where abnormal discontinuation has occurred in the purchase, building or production of the assets that meet the
conditions of capitalization and the time of discontinuation exceeds three months consecutively, the capitalization of the
borrowing costs is suspended. If the discontinuation is a necessary procedure in the process during which the assets
purchased or produced, which meet the conditions of capitalization, reach the usable or salable status, the capitalization
of the borrowing costs is continued. The borrowing costs occurring in the suspension period are recognized as current
profit and loss and the capitalization is continued until the purchasing and production activities of the assets are restarted.
iv. Calculation method of the amount of borrowing costs capitalization
The interest expenses of special loans (with the interest income of the unused borrowed funds deposited in the bank or
the investment income obtained from temporary investment deducted) and relevant auxiliary expenses are capitalized
before the assets that meet the conditions of capitalization, purchased, built or produced with such loans, reach the
anticipated usable or salable status.
The amount of the interests of common loans that are capitalized is calculated and determined by the weighted average
of the accumulative parts of the assets expenditure exceeding special loans multiplied by the capitalization rate of
common loans. The capitalization rate is determined according to the weighted average interest rate of common loans.
Where the loans involve discount or premium, the amount of discount or premium to be amortized in each accounting
period is determined in accordance with the actual interest rate method and the amount of interests of each period should
also be adjusted.
18. Intangible assets
(1) Method of costing, service life and devaluation test
An intangible asset refers to an identifiable non-monetary asset without physical substance which is possessed or
controlled by the Company, including purchased software and land use rights.
i. Initial measurement of intangible assets
The cost of the intangible assets purchased from outside includes purchase price money, relevant taxes and other
expenses incurred due to putting such assets to the anticipated use that can be directly attributed to such assets. Where
the price money of the purchased intangible assets is paid on a deferred basis within a term exceeding regular credit
conditions and actually of a financing nature, the cost of the intangible assets is determined on the basis of the current
value of the price money in purchase.
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The entry value in the account of the fixed assets obtained from debtors for the repayment of liabilities in debt
restructuring is determined on the basis of the fair value of the fixed assets. The difference between the book value of
debt restructuring and the fair value of the fixed assets used for the repayment of liabilities is included in the current
profit and loss.
Under the premises that the non-monetary assets exchange is of commercial nature and that the fair value of the assets
received and given out in the exchange can be measured reliably, the initial investment cost of the long-term equity
investment received in non-monetary assets exchange is determined on the basis of the fair value of the assets given out,
unless there are definite evidences that the fair value of the received assets is more reliable. For the non-monetary assets
exchange that do not meet the above premises, the book value of the received assets and relevant taxes payable is taken
as the cost of the long-term equity investment.
The recorded value in the account of the intangible assets obtained by the merger of the enterprises under the control of a
same entity is determined according to the book value of the merged party. The recorded value in the account of the
intangible assets obtained by the merger of the enterprises under the control of different entities is determined according
to the fair value.
The cost of the intangible assets formed through internal R&D activities includes: the cost of materials and labor
consumed in the development of such intangible assets, registration fee, the amortization of other patent rights and
franchises used in the development process and the interests expenses that meet the conditions of capitalization, and
other direct expenses incurred due to putting such intangible assets into the anticipated use.
2. Subsequent measurement of intangible assets
When the Company acquires intangible assets, the Company analyzes and determines the service life and classifies
intangible assets into intangible assets with limited service life and intangible assets with uncertain service life.
1) Intangible assets with limited service life
The intangible assets with limited service life are amortized based on straight-line method in the period when the assets
bring economic benefits to the enterprise. The estimated service life and basis of intangible assets with limited service
life are as follows:
Item Estimated service life Basis
Outsourced software 5 Benefit period
Land use right 50 Benefit period
At the end of each year, the service life and amortization method of intangible assets with limited service life are
rechecked and an adjustment is made if the service life differs from the original estimated service life.
At the end of the current period, the service life and amortization method of the intangible assets are the same as the last
year.
(2) Accounting policy for internal R&D expenditure
Research phase: a phase in which creative and planned investigation and research activities are carried out for the
purpose of obtaining and understanding new scientific or technological knowledge.
Development phase: a phase in which research results or other knowledge, before being produced or used for
commercial purposes, are applied in a certain plan or design for the purpose of producing materials, equipment and
products that are new or feature substantial improvement.
The expenses for inside R&D projects in the research phase are included in current profit and loss when the expenses
occur.
i. Standards for meeting the conditions of capitalization by research phase
The expenditure in the development phase of the research and development project can be recognized as intangible
assets only when all the following conditions are met:
(1) The completion of such intangible assets makes it usable or its sale technically feasible.
(2) There is an intention to complete such intangible assets and use or sell it.
(3) The way that the intangible assets generate economic interests can prove that the product using such intangible assets
or the intangible assets itself have market. If the intangible assets are to be used internally, its usefulness is proved.
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(4) The Company has sufficient technical and financial resources and other resources to support the completion of the
development of such intangible assets and the capacities to use or sell such intangible assets.
(5) The expenditure attributed to the development stage of such intangible assets can be reliably measured.
The expenditure in the development phase not meeting the preceding conditions is included in the current profit and loss
when it is incurred. The development expenditure that is included in profit and loss in the previous year will not be
identified as assets again in later years. The capitalized expenditure in the development phase is listed as development
expenditure in the balance sheet and is converted into intangible assets from the date when it meets the expected
purpose.
19. Long-term impairment of assets
The Company determines whether any sign of possible impairment exists for long-term assets on the balance sheet date.
If the sign of impairment exists for long-term assets, the recoverable amount of each asset is estimated. If the recoverable
amount of each assets cannot be estimated, the recoverable amount of the asset group where the asset belong is
determined based on the asset group.
The recoverable amount may be determined according to the higher one of the net value of the fair value of the assets
minus the disposal expenses and the current value of the anticipated future cash flow of the assets.
If the measurement result of recoverable amount indicates that the recoverable amount of a long-term asset is lower than
its book value, the book value of the long-term asset is written down to the recoverable amount. The write-down amount
is identified as asset impairment loss and is included in the current profit and loss and provision for asset impairment
provision is made. Once the impairment loss of assets is confirmed, the loss will not be reversed in later accounting
periods.
At the same time, the corresponding assets impairment provision is accrued. After the recognition of assets impairment
loss, corresponding adjustments are made in the future periods on the depreciation or amortized expenses of the impaired
assets so that the adjusted book value of such assets (with the anticipated expected salvage value deducted) can be
amortized systematically within the remaining service life.
The goodwill and intangible assets with uncertain service life, which are formed due to enterprise merger, are tested
every year on whether the sign of impairment exists.
During impairment testing, the book value of goodwill can be amortized to the asset group or combination of asset
groups that acquire synergistic benefit from business combination based on the proportion of benefits. When impairment
test is performed for relevant asset groups or asset group combinations that include goodwill, for example, if the sign of
impairment exists for asset groups or asset group combinations relevant to goodwill, the impairment test is first
performed for the asset groups or asset group combinations that do not include goodwill and the recoverable amount is
calculated and is compared with the relevant book value to confirm the corresponding impairment loss. Then the
impairment test is first performed for the asset groups or asset group combinations that include goodwill and the book
value (including the book value of amortized goodwill) of the relevant asset groups or asset group combinations is
compared with the recoverable amount. If the recoverable amount of relevant asset groups or asset group combinations is
lower than the book value, the impairment loss of goodwill is confirmed.
20. Long-term expenses to be apportioned
i. Method of amortization
Long-term unamortized expenses refer to the expenses that have incurred at the Company but should be born in the
current period and later periods, where the amortization period is above one year. Long-term unamortized expenses shall
be amortized with the straight-line method.
21. Payroll
(1) Accounting treatment method of payroll
Short-term remuneration refers to the payroll that needs to be paid completely within 12 months in the annual the report
period when employees provide relevant services, excluding welfare after leave and dismissal welfare. In the accounting
period when employees provide services, the Company identities short-term remuneration as liabilities and includes it in
relevant asset costs and fees according to the benefit objects of services provided by employees.
(2) Accounting treatment method of welfare after leave
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The welfare after leave refers to the remuneration and welfare provided by the Company for obtaining services provided
by employees or for terminating the employment relationship after employees have retired, excluding short-term
remuneration and dismissal welfare. The welfare plan after dismissal is classified into the defined contribution plan and
the defined benefit plan.
The welfare defined contribution plan aims to join the social basic endowment insurance and unemployment insurance
organized and implemented by labor and social security agencies in various regions. In addition to social basic
endowment insurance and unemployment insurance, employees can join the pension plan set by the Company at their
own discretion. In the accounting period when employees provide the Company with services, the amount that shall be
paid and deposited shall be identified as liabilities according to the defined contribution plan and is included in the
current profit and loss or relevant asset costs.
After making the preceding payment according to the national standard and pension plan, the Company shall no longer
have any other payment obligation.
(3) Accounting treatment method of dismissal welfare
Dismissal welfare refers to the compensation for employees to terminate the labor relationship with employees before
the labor contracts expire or encourage employees to accept downsizing. On the earlier one between the time when the
Company cannot unilaterally withdraw the labor relationship termination plan and the time when restructuring costs and
expenses related to payment of dismissal welfare, the liabilities incurred due to compensation for termination of the labor
relationship is recognized and included in the current profit and loss.
The Company offers early retirement welfare to employees who accept the early retirement arrangement. Early
retirement welfare refers to salaries and social insurances expenses paid for employees that have not reached the
statutory retirement age and are willing to retire with approval of the management of the Company. The Company offers
early retirement welfare from the date of the early retirement arrangement to the date when an employee reaches the
statutory retirement age. The Company shall conduct accounting treatment for early retirement welfare by referring to
dismissal welfare. When recognition conditions for dismissal welfare are satisfied, salaries and social insurance
premiums to be paid for employees from the date when employees retire to the statutory retirement date are recognized
as liabilities and included in the current profit and loss. The difference arising from changes in actuarial assumptions of
early retirement welfare and welfare standards is included in the current profit and loss at occurrence.
(4) Accounting treatment methods of other long-term employees' welfare
Other long-term employees' welfare refers to all other employees' welfare except short-term remuneration, welfare after
leave and dismissal welfare.
For other long-term employees' welfare that meets conditions of the defined contribution plan, the amount that shall be
paid and deposited shall be identified as liabilities in the accounting period and is included in the current profit and loss
or relevant asset costs; except other long-term employees' welfare in the preceding circumstance, an independent actuary
sets the welfare generated by the defined benefit plan to the period in which employees provide services by using the
method of expected accumulative welfare unit and includes it in the current profit and loss or relevant asset costs.
22. Estimated liabilities
i. Recognition standards for estimated liabilities
The obligations related to contingencies, which meet all the following conditions, are recognized by the Company as
estimated liabilities.
The obligation is a current obligation undertaken by the Company;
The fulfillment of the obligation is very likely to cause an outflow of economic interests from the Company;
The amount of the obligation can be measured reliably.
ii. Measurement method of estimated liabilities
Initial measurement is carried out to estimated liabilities of the Company according to the optimum estimation amount of
the required expense when relevant obligations are fulfilled.
When determining the optimum estimation amount, the Company considers in a comprehensive way the factors related
to contingencies like risks, uncertainties and time value of currency. Where there are great influences of time value of
currency, the optimum estimation amount is determined after discounting relevant future cash flows.
The optimum estimation amount is determined according to different situations as follows:
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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
i. Types of share-based payment
The Company provides equity-settled and cash-settled share-based payment.
ii. Recognition of the fair value of equity instruments
For equity instruments such as the granted option, which exist in the active market, the fair value is recognized according
to their prices in the active market. For those not existing in the active market, their fair value is recognized by using the
option pricing model, which should be selected in consideration of the following factors: a. option exercise price; b.
option period; c. the current price of the underlying shares; d. the predicted fluctuation rate of the share price, e. the
estimated dividend of the share; f. risk free rate in the option period; g. payment of shares of installment options
When determining the grant-date fair value of equity instruments, the Company shall take into account the influence of
market conditions in vesting conditions and non-vesting conditions stipulated in the share-based payment agreement.
Where a share-based payment has a non-vesting condition, the Company shall recognize receipt of the corresponding
service cost if employees or other parties satisfy all the non-market conditions (for example, service duration) in vesting
conditions.
iii. Basis of recognition of the best estimate of the number of vested equity instruments
On each balance sheet date in the vesting period, the Company shall make the best available estimate of the number of
equity instruments expected to vest, and shall revise that estimate if subsequent information indicates that the number of
equity instruments expected to vest differs from previous estimates. On vesting date, the Company shall revise the
estimate to equal the number of equity instruments that ultimately vested.
iv. Accounting for implementation, modification and termination of share-based payment plans
The Company shall measure the equity-settled share-based payment at the fair value of the granted employee equity
instruments. If the equity instruments granted vest immediately, the Company shall include the grant-date fair value of
equity instruments into related cost or expense, with a corresponding increase in capital reserve. If the equity instruments
granted do not vest until the counterparty completes a specified period of service or achieves a performance condition in
the vesting period, the Company shall include the service obtained in the current period into related cost or expense and
capital reserved by reference to the grant-date fair value of equity instruments based on the best estimate of the number
of vested equity instruments on each balance sheet date during the vesting period. The Company shall not adjust the
recognized cost or expense and total equity amount after the vesting date.
The case-settled share-based payment shall be measured by reference to the fair value of the Company's eligible
liabilities which is calculated based on shares or other equity instruments. If the equity instruments granted vest
immediately, the Company shall include the fair value of eligible liabilities in related cost or expense on the vesting date,
with a corresponding increase in liabilities. For the cash-settled share-based payment where the granted options are not
exercised until the counterparty completes a specified period of service or achieves a performance condition in the
vesting period, the Company shall include the service obtained in the current period into related cost or expense and
liabilities by reference to the grant-date fair value of liabilities, based on the best estimate of the number of vested equity
instruments on each balance sheet date during the vesting period. The Company shall re-measure the fair value of its
liabilities on each balance sheet date and settlement date before settlement of related liabilities, and include liability
changes in the current profit and loss.
v. Modifications to the terms and conditions on which equity instruments were granted
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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.
i. When one of the following conditions is met, the issued financial instrument is classified into financial liabilities:
(1) Contractual obligation to deliver cash or other financial assets to other parties;
(2) Contractual obligation to exchange financial assets or financial liabilities under potential adverse conditions;
(3) Non-derivative instrument contract that must or may use equity instruments of an enterprise for settlement in the
future (the enterprise delivers a variable number of equity instruments according to the contract);
(4) Derivative instrument contract that must or may use equity instruments of an enterprise for settlement in the future
(except derivative instrument contracts that use a fixed number of equity instruments to exchange a fixed amount of cash
or other financial assets).
ii. When the following conditions are met at the same time, the issued financial instruments are classified into equity
instruments:
(1) The financial instruments do not include the contractual obligation to deliver cash or other financial assets to other
parties or exchange financial assets or financial liabilities under potential adverse conditions;
(2) For the financial instruments that must or may use equity instruments of an enterprise for settlement in the future, if
the financial instruments are non-derivative instruments, the contractual obligation to deliver a variable number of equity
instruments for settlement is not included; if the financial instruments are derivative instruments, the enterprise can only
settle the financial instruments by exchanging a fixed number of equity instruments with the fixed amount of cash or
other financial assets.
iii. Accounting treatment method
For financial instruments that belong to equity instruments, the interest expenditure or dividend distribution shall be used
as profits of the enterprise for distribution, the buy-back and write-off are treated as changes of equity, and transaction
expenses such as handling charge and commission shall be deducted from the equity.
For financial instruments that belong to financial liabilities, the interest expenditure or dividend distribution shall be
treated as borrowing costs in principle, the gain or loss generated due to buy-back or redemption are included in the
current profit and loss, and transaction expenses such as handling charge and commission are included in the initial
amount of measurement of the issues instruments.
25. Income
i. Standards for recognition time of sales income
The realization of the income from the sale of commodities is recognized when the Company has already transferred the
main risks and consideration in the ownership right of the commodities to the purchaser, the Company has not retained
any further management right connected to the ownership right nor implement effective control over the sold
commodities, the amount of the revenue can be reliably measured, relevant economic interests are likely to flow into the
enterprise, and relevant costs incurred or to be incurred can be measured reliably.
The Company mainly runs the leasing business in the electronics market. It identifies received rental as rental income in
the term of lease by using the method of line and the income of other business is identified when the risk premium is
transferred according to contract provisions.
The price of a contract or agreement is collected through deferral. In the case of actual financial nature, the amount of
income from sales commodities shall be determined according to the fair value of the price of the contract or agreement.
ii. Basis for recognition of income from transfer of asset use right
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When economic interests relevant to transaction probably flow into the enterprise and the amount of income can be
reliably measured, the amount of income from transfer of asset use right is determined in the following circumstances:
(1) The amount of interest income is determined according to the time and actual interest rate of other people using the
monetary fund of the enterprise.
(2) The amount of the income from use fee is determined in accordance with the time and method of charges as agreed in
relevant contract or agreement.
iii. Basis and method for confirmation of income from rendering of services
Where the results of the labor services provided on the balance sheet date can be estimated reliably, the income from the
provision of labor services is recognized with the percentage of completion method. The completion progress of a labor
service transaction is determined by surveying the work completed.
When the following conditions are met at the same time, the result of rendering of services can be reliably estimated:
(1) The amount of income can be measured reliably.
(2) Relevant economic interests probably flow into the enterprise.
(3) The completion progress of transactions can be reliably determined.
(4) The costs that have been incurred or will be incurred in transactions can be reliably measured.
The total amount of the income from the provision of labor services is determined according to the price money received
or receivable of a relevant contract or agreement, unless the price money received or receivable of a relevant contract or
agreement is unfair. The labor services income of the current period is recognized on the balance sheet date according to
the resulted amount of the total amount of income from provision of labor services times the completion percentage and
deducted by the accumulative amount of the recognized income from provision of labor services in previous accounting
periods. At the same time, the labor cost of the current period is carried forward according to the estimated total cost of
the provision of labor services times the completion percentage and deducted by the accumulative amount of the
recognized labor cost in previous accounting periods.
Where the results of the provision of labor services on the balance sheet date cannot be estimated reliably, such results
are processed respectively according to the following conditions:
(1) Where it is estimated that the labor services cost incurred can be compensated, the income from provision of labor
services is recognized according to the amount of the labor services cost incurred and the same amount is transferred into
the labor cost.
(2) Where it is estimated that the labor services cost incurred cannot be compensated, the labor services cost incurred is
included in current profit and loss and no income is recognized.
When the contracts or agreements signed between the Company and other companies include commodity sales and labor
service and these two parts can be differentiated from each other and can be separately measured, commodity sales and
labor service are handled separately. If they cannot be differentiated from each other or they can be differentiated from
each other but cannot be separately measured, both parts will be handled as commodity sales.
iv. Basis and method for confirmation of income from construction contracts
(1) When the results of construction contracts can be reliably estimated, relevant income from contracts and costs of
contracts are confirmed based on the method of completion percentage. The method of completion percentage refers to
the method for confirming income from contracts and costs of contracts according to the completion progress of
contracts. The completion progress of a contract is determined according to the ratio of actual accumulated cost of the
contract to estimated total costs of the contract.
When the following conditions are met at the same time, the result of a fixed construction contract can be reliably
estimated:
1) The total income from the contract can be reliably measured;
2) Economic interests relevant to the contract probably flow into the enterprise.
3) The actual costs of the contract can be clearly distinguished and reliably measured.
4) The completion progress of the contract and the costs needed for completing the contract can be reliably determined.
When the following conditions are met at the same time, the result of a cost-plus contract can be reliably estimated:
1) Economic interests relevant to the contract probably flow into the enterprise.
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2) The actual costs of the contract can be clearly distinguished and reliably measured.
On the balance sheet date, the amount of total contractual income multiplied by the completion progress, deducting the
accumulated confirmed income in the previous accounting period, is identified as the current contractual income; the
amount of estimated total contract cost multiplied by the completion progress, deducting the accumulated confirmed cost
in the previous accounting period, is identified as the current costs of contract. The change of contract engineering, claim
and bonus is included in the total income of contract based on the amount that may be brought and can be reliably
calculated.
(2) If the result of a construction contract cannot be reliably estimated, the contract is processed as follows:
1) If the contract cost can be recovered, the income from the contract is identified according to the actual recovered
contract cost and the contract cost is identified as the current costs of contract.
2) If the contract cost cannot be recovered, the cost is immediately identified as the costs of contract in the current period
when the cost is incurred and the income from the contract is not identified.
(3) If the total cost of contract probably exceeds the total income from the contract, the expected loss is immediately
identified as costs.
v. Transfer of the assets with repurchase conditions
If the Company signs a repurchase agreement when selling products or transferring other assets, whether the products
sold meet the conditions for income recognition is judged according to the articles of the agreement. If the repurchase is
a financing transaction, the Company does not recognize sales income when delivering products or assets. If the
repurchase price is higher than the selling price, interests are accrued for the difference during repurchase period and
included in financial expenses.
26. Government subsidies
(1) Basis for determining government subsidies relevant to assets and accounting treatment methods
The government subsidies relevant to assets are identified as deferred income and are included in non-operating income
according to the service life of the built or purchased assets.
(2) Basis for determining government subsidies relevant to income and accounting treatment methods
The government subsidies that are related to income and are used to compensate for relevant expenses or losses in later
periods are identified as deferred income when they are obtained; the subsidies used to compensate for relevant expenses
or losses that have been incurred are identified as the current non-operating income when they are obtained.
When identified government subsidies need to be returned and the balance of relevant deferred income exists, the book
balance of relevant deferred income is offset and the excess part is included in the current profit and loss; when relevant
deferred income does not exist, the government subsidies are directly included in the current profit and loss.
27. Deferred income tax assets and liabilities
Deferred income tax assets and liabilities are calculated and identified according to the difference (temporary difference)
between the taxable basis of the assets and liabilities and their book value. On the balance sheet date, deferred income
tax assets and liabilities are measured based on the tax rate applicable to the period when the assets are expected to be
recovered or the liabilities are expected to be paid off.
i. Basis for the recognition of deferred incomes tax assets
The Company confirms the deferred income tax assets generated due to deductible temporary difference based on the
amount of taxable income that is probably obtained to deduct deductible temporary difference and can carry over
deductible loss and tax deduction. However, the deferred income tax assets generated due to initial confirmation of assets
or liabilities in a transaction that has the following features at the same time: (1) the transaction is not business merger;
(2) the transaction does not affect the accounting profit, taxable income or deductible loss.
For the deductible temporary difference relevant to investment in associates, when the following conditions are met at
the same time, corresponding deferred income tax assets are confirmed; the temporary difference is probably reversed in
the foreseeable future and taxable income used to deduct the deductible temporary difference will probably be obtained
in the future.
ii. Basis for recognition of deferred income tax liabilities
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The temporary difference between the tax payable not paid in the current period and that in the previous period is
recognized by the Company as deferred income tax liabilities, excluding:
(1) Temporary difference formed due to initial confirmation of goodwill;
(2) Transaction or matter formed due to factors rather than business merger (the transaction or matter does not affect the
accounting profit or the temporary difference formed due to taxable income or deductible loss);
(3) For the taxable temporary difference relevant to investment of subsidiaries and associates, the reversal time of the
temporary difference can be controlled and may not be reversed in the foreseeable future.
iii. An entity shall offset deferred tax assets and deferred tax liabilities if, and only if:
(1) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
(2) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on
either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on
a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant
amounts of deferred tax liabilities or assets are expected to be settled or recovered.
28. Lease
(1) Accounting treatment method of operating lease
A. The fee paid by the Company for rented assets is apportioned by the straight-line method in the whole lease term
without deduction of the rent-free period and included in current expenses. The initial direct expenses related to lease
transactions, paid by the Company, are included in current expenses.
In case that the leasing party undertakes the lease-related expenses that should be undertaken by the Company, the
Company deducts the expenses from the total lease fee and the lease fee after deduction is apportioned in the lease term
and included in current expenses.
B. The lease fee received by the Company from leasing of assets is apportioned by the straight-line method in the whole
lease term without deduction of the rent-free period and included in the lease income. The initial direct expenses related
to lease transactions, paid by the Company, are included in current expenses. Those with significant amounts are
capitalized and recorded by periods into current profits in the whole lease term according to the same basis for
recognition of the lease income.
In case that the Company undertakes the lease-related expenses which should be undertaken by the lessee, the Company
deducts the expenses from the total lease income and the lease expenses after deduction are allocated in the lease term.
(2) Accounting treatment method of financing lease
A. Assets acquired under financing lease: Between the fair value of rented assets and the minimum lease payment, the
Company adopts the lower one as the recording value of the rented assets, the minimum lease payment as the recording
value of long-term accounts payable, and the difference between the two as financing expenses yet to be recognized.
The financing expenses yet to be recognized are apportioned by the Company by the actual interest rate method in the
lease term of the assets and included in accounting expenses. Assets given out under financing lease:
B. The difference between the total residual value, without guarantee, of the financing lease payment receivable and the
current value is recognized by the Company on the lease-beginning date as financing profits yet to be realized, and as the
lease income in future lease periods. The initial direct expenses related to lease transactions are included in the initial
calculation of financing lease payment receivable and the amount of profits recognized in the lease term is reduced.
29. Changes of important accounting policies and accounting estimates
(1) Changes of important accounting policies
□ Applicable √ Not applicable
(2) Changes of important accounting estimates
□ Applicable √ Not applicable
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VI. Taxes
1. Main tax categories and tax rates
Tax Category Taxation Basis Tax Rate
Value-added tax Taxable income 5, 6, 17
Business tax Revenue from rental and interest on loans 5
Urban maintenance and construction tax Turnover tax payable 7
Corporate income tax Taxable income 25, 15
Education surtax Turnover tax payable 3
Education surtax Turnover tax payable 2
Tax payers when different enterprise income tax rates exist
Name of tax payer Income tax rate
Xi'an SEG Electronics Market Co., Ltd. 15
Xi'an Hairong SEG Electronics Market Co., Ltd. 15
2. Tax preference
According to the Letter of Confirmation Doc. No.[2014] 134 issued by Shaanxi Development and Reform Commission,
Xi'an SEG Electronics Market Co., Ltd., a subsidiary of the Company, is engaged in projects encouraged by the nation
and complies with the corporate income tax preference policy for development of the west regions. Therefore, the
corporate income tax shall be paid at the rate of 15%.
According to the Letter of Confirmation Doc. No.[2014] 060 issued by Shaanxi Development and Reform Commission,
Xi'an Hairong SEG Electronics Market Co., Ltd., a subsidiary of the Company, is engaged in projects encouraged by the
nation and complies with the corporate income tax preference policy for development of the west regions. Therefore, the
corporate income tax shall be paid at the rate of 15%.
Except for the foregoing two subsidiaries, the enterprise income tax rate of all other subsidiaries is 25%.
VII. Notes on items of consolidated financial statements
1. Monetary capital
Unit: Yuan
Item Closing balance Opening balance
Cash on hand 532,393.65 526,467.72
Bank deposit 142,717,238.17 274,816,839.04
Other monetary capital 55,122.34 1,520,122.34
Total 143,304,754.16 276,863,429.10
Other note
Details of other restricted monetary fund:
Item Closing balance Opening balance
Performance bond 340,000.00
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Item Closing balance Opening balance
Cash deposit for credit card repayment 1,000,000.00
Total 1,340,000.00
2. Accounts receivable
(1) Accounts receivable disclosed by type
Unit: Yuan
Closing balance Opening balance
Class Book balance Bad debt provision Book balance Bad debt provision
Book value Book value
Amount Percentage Amount Percentage Amount Percentage Amount Percentage
Accounts receivable with
bad debt provision
79,482,537.58 87.81% 26,173.60 0.24% 79,456,363.98 98,238,596.47 89.91% 26,173.60 0.03% 98,212,422.87
accrued based on credit
risk feature combinations
Accounts receivable with
an insignificant amount
individually, for which 11,029,908.51 12.19% 11,029,908.51 99.76% 0.00 11,029,908.51 10.09% 11,029,908.51 100.00%
bad debt provision is
separately accrued
Total 90,512,446.09 100.00% 11,056,082.11 100.00% 79,456,363.98 109,268,504.98 100.00% 11,056,082.11 10.12% 98,212,422.87
Accounts receivable with a significant amount individually, for which bad debt provision is separately accrued at the end of period:
□ Applicable √ Not applicable
Accounts receivable in the combination, for which bad debt provision was accrued by the aging analysis method:
√ Applicable □ Not applicable
Unit: Yuan
Closing balance
Aging
Accounts receivable Bad debt provision Percentage
Sub-item within one year
Subtotal of accounts aged under 1
78,959,065.58 0.00 0.00%
year
1-2 years 523,472.00 26,173.60 5.00%
2-3 years 0.00 0.00
Over 3 years 0.00 0.00
3-4 years 0.00 0.00
Total 79,482,537.58 26,173.60 0.03%
Note to basis for confirming the combination:
Accounts receivable in a combination, for which bad debt provisions are made using the Percentage of Total Accounts Receivable
Outstanding method
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□ Applicable √ Not applicable
i. Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
Accounts receivable with no significant single amount but with single provision for bad debts at the end of period
Closing balance
Name of company
Accounts Proportion of
Bad debt provision Reason for provision
receivable provision (%)
Unable to be recovered for aging of
Jiangsu Unicom 3,092,011.09 3,092,011.09 100.00
over 5 years
Shenzhen Shuangxionghui Industrial Co., Unable to be recovered for aging of
2,160,725.63 2,160,725.63 100.00
Ltd over 5 years
Unable to be recovered for aging of
Shenzhen Liyuanshun Industrial Co., Ltd. 1,906,865.35 1,906,865.35 100.00
over 5 years
Unable to be recovered for aging of
Zhejiang Financial Information Co., Ltd 786,000.00 786,000.00 100.00
over 5 years
Unable to be recovered for aging of
Shanghai Tianci Industrial Co., Ltd. 899,000.00 899,000.00 100.00
over 5 years
Other companies 2,185,306.44 2,185,306.44 100.00 Unable to be recovered for long aging
Total 11,029,908.51 11,029,908.51 100.00 -
(2) Accounts receivable with top 5 closing balance collected based on arrears party
Percentage in the total
Name of company Closing balance amount of accounts Accrued bad debt provision
receivable
Shenzhen Runneng Digital Co., Ltd. 20,165,776.97 22.28 -
Xinjiang Zhongdi Communications Equipment Co.,
13,241,726.56 14.63 -
Ltd.
Shenzhen Wonder Industry Co., Ltd. 7,955,493.47 8.79 -
Shenzhen Comnet Technology Co., Ltd. 5,216,504.81 5.76 -
Shenzhen Nanfang Yunhe Technology Co., Ltd. 3,941,752.87 4.35
Total 50,521,254.68 55.82 -
3. Advances
(1) Advances listed according to different durations
Unit: Yuan
Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Within 1 year 89,712,712.41 100.00% 129,044,887.26 100.00%
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Closing balance Opening balance
Aging
Amount Percentage Amount Percentage
Total 89,712,712.41 - 129,044,887.26 -
(2) Advances with top 5 closing balance collected based on advance object
Percentage in the total
Name of company Period-end amount amount of accounts Prepayment date Reason for non-settlement
receivable (%)
Xi'an Gaoke (Group) New West China
20,000,000.00 22.29 Within 1 year Advance rental payment
Industrial Development Co., Ltd
Shenzhen Must Energy Technology Co., Ltd. 17,823,353.29 19.87 Within 1 year Prepayment for goods
Tonmac International Electronics (Suzhou) Co.,
17,500,000.00 19.51 Within 1 year Advance rental payment
Ltd
Shenzhen Must Power Co., Ltd. 9,337,733.44 10.41 Within 1 year Prepayment for goods
Suzhou SEG Digital Plaza Management Co.,
5,696,597.95 6.35 Within 1 year Advance rental payment
Ltd.
Total 70,357,684.68 78.43 - -
4. Other receivables
(1) Other receivables disclosed by type
Unit: Yuan
Closing balance Opening balance
Class Book balance Bad debt provision Book balance Bad debt provision
Book value Book value
Amount Percentage Amount Percentage Amount Percentage Amount Percentage
Other receivables with
single significant amount
14,434,547.87 15.95% 14,434,547.87 100.00% 14,434,547.87 24.12% 14,434,547.87 100.00%
and single bad debt
provision
Other receivables with
bad debt provision
46,573,648.87 51.46% 322,879.63 0.69% 46,250,769.24 27,674,049.48 46.25% 321,265.15 1.16% 27,352,784.33
accrued based on credit
risk feature combinations
Other receivables with an
insignificant amount
individually, for which 17,731,257.04 19.59% 17,731,257.04 100.00% 17,731,257.04 29.63% 17,731,257.04 100.00%
bad debt provision is
separately accrued
Total 78,739,453.78 87.00% 32,488,684.54 41.26% 46,250,769.24 59,839,854.39 100.00% 32,487,070.06 54.29% 27,352,784.33
Other receivables with a significant amount individually, for which bad debt provision is separately accrued
√ Applicable □ Not applicable
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Unit: Yuan
Other receivables (by Closing balance
company) Other receivables Bad debt provision Percentage Reason for provision
Yangjiang Yuntong Grease Unable to be recovered for
8,530,276.35 8,530,276.35 100.00%
Co., Ltd. aging of over 5 years
Creditor's right transferred
Unable to be recovered for
in by SEG 5,904,271.52 5,904,271.52 100.00%
aging of over 5 years
Communications
Total 14,434,547.87 14,434,547.87 - -
Among the combinations, accounts receivable for which bad debt provision is computed by aging method:
√ Applicable □ Not applicable
Unit: Yuan
Closing balance
Aging
Other receivables Bad debt provision Percentage
Sub-item within one year
Within 1 year 40,180,552.52 0.00 0.00%
Subtotal of accounts aged under 1
40,180,552.52 0.00 0.00%
year
1-2 years 6,355,437.60 317,771.88 5.00%
2-3 years 24,240.00 2,424.00 10.00%
Over 3 years 13,418.75 2,683.75 20.00%
Total 46,572,034.39 321,265.15 0.69%
Note to basis for confirming the combination:
Other receivables in a combination, for which bad debt provisions are made using the Percentage of Total Receivables Outstanding method
□ Applicable √ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
□ Applicable √ Not applicable
(2) Current accrued, recovered or reversed bad debt provision
The amount of the current accrued bad debt provision is RMB 1,614.48 Yuan and the amount of the current recovered or reversed bad debt
provision is RMB 0.00 Yuan.
(3) Classification of other receivables by nature
Unit: Yuan
Nature of receivables Period-end book balance Period-end book balance
Creditor's right transfer cost 32,165,804.91 32,165,804.91
Imprest 1,636,672.31 831,185.54
Deposit and security deposit 23,173,739.64 23,342,863.94
Others 21,763,236.92 3,500,000.00
Total 78,739,453.78 59,839,854.39
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(4) Other receivables with top 5 closing balance collected based on arrears party
Unit: Yuan
Percentage in the total
amount of closing Closing balance of bad
Name of company Nature of payables Closing balance Aging
balance of other debt provision
receivables
Yangjiang Yuntong Debt restructuring of
8,530,276.35 Over 5 years 10.83% 8,530,276.35
Grease Co., Ltd. SEG Orient
Nantong Construction
Salary deposit for
Engineering 6,200,000.00 1-2 years 7.87% 310,000.00
peasant workers
Administration
Creditor's right
Debt restructuring of
transferred in by SEG 5,904,271.52 Over 5 years 7.50% 5,904,271.52
SEG Communications
Communications
Shenzhen Lianjing Creditor's incomings
5,697,287.51 Over 5 years 7.24% 5,697,287.51
Trade Co., Ltd. and outgoings
Shenzhen Top Creditor's incomings
3,281,387.96 Over 5 years 4.17% 3,281,387.96
Industry Co., Ltd. and outgoings
Total - 29,613,223.34 - 37.61% 23,723,223.34
5. Inventory
(1) Classification of inventory
Unit: Yuan
Closing balance Opening balance
Item Provision for loss Provision for loss
Book balance for decline in value Book value Book balance for decline in value Book value
of inventories of inventories
Raw materials 0.00 149,186.66 149,186.66
Commodity stocks 3,209,971.90 3,209,971.90 1,579,916.40 1,579,916.40
Low-cost
227,302.70 227,302.70 222,080.75 222,080.75
consumables
Development cost 565,321,975.34 565,321,975.34 448,858,750.91 448,858,750.91
Total 568,759,249.94 568,759,249.94 450,809,934.72 450,809,934.72
(2) Note to capitalization amount of borrowing costs included in closing balance of inventory
Decrease in the current period Capitalization rate of
capitalization
Increase in the
Inventory item name Opening balance Closing balance amount recognized
current period Decrease in
Others in the current period
sales
(%)
Nantong SEG Times
13,915,097.17 6,576,579.00 20,491,676.17 5.30
Square
Total 13,915,097.17 6,576,579.00 20,491,676.17 -
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(3) Development cost
Expected
Commencement Expected
Project name investment Closing balance Opening balance
time completion date
amount
Nantong SEG Times
2013.5 2015.12 600,000,000.00 565,321,975.34 448,858,750.91
Square
Total - - - 565,321,975.34 448,858,750.91
6. Other current assets
Unit: Yuan
Item Closing balance Opening balance
Bank financial products 187,400,000.00 259,831,270.00
Tax to be deducted and withheld 41,330,588.65 79,402,305.52
Others 7,560,524.59 196,844.22
Total 236,291,113.24 339,430,419.74
7. Available-for-sale financial assets
(1) Financial assets available for sale
Unit: Yuan
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Available-for-sale equity
34,399,017.93 15,000.00 34,384,017.93 34,554,973.24 15,000.00 34,539,973.24
instruments
Measured by fair value 588,625.10 588,625.10 744,580.41 744,580.41
Measured by cost 33,810,392.83 15,000.00 33,795,392.83 33,810,392.83 15,000.00 33,795,392.83
Total 34,399,017.93 15,000.00 34,384,017.93 34,554,973.24 15,000.00 34,539,973.24
(2) Available-for-sale financial assets measured by fair value at the end of the period
Unit: Yuan
Financial assets available Available-for-sale equity Available-for-sale debt
Total
for sale instruments instruments
Cost of equity
instruments/amortized cost 90,405.00 90,405.00
of debt instruments
Fair value 588,625.10 588,625.10
Accumulative changes in
fair value included in other 498,220.10 498,220.10
comprehensive income
(3) Available-for-sale financial assets measured by cost at the end of the period
Unit: Yuan
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Book balance Impairment provision Cash
Decrease Decrease dividends
Increase in Increase in Shareholding
Investee Period in the Period in the of the
the current Period end the current Period end proportion current
beginning current beginning current
period period period
period period
Kashgar
Shenzhen
20,000,000.00 20,000,000.00
City Co.,
Ltd.
Shenzhen
SEG GPS
Scientific 13,515,392.83 13,515,392.83
Navigations
Co., Ltd.
Nanjing
Shangsha 280,000.00 280,000.00
Co., Ltd
Anshan
Yibai Co., 15,000.00 15,000.00 15,000.00 15,000.00
Ltd
Total 33,810,392.83 33,810,392.83 15,000.00 15,000.00 -
(4) Changes in impairment of available-for-sale financial assets in the report period
Unit: Yuan
Financial assets available Available-for-sale equity Available-for-sale debt
Total
for sale instruments instruments
Accrued impairment
balance at the beginning of 15,000.00 15,000.00
period
Accrued impairment
15,000.00 15,000.00
balance at the end of period
8. Long-term equity investment
Unit: Yuan
Increase/Decrease of the year
Investment
Closing
gains and
Opening Adjustment of Issued Closing balance of
Investee losses Other Accrued
balance Additional Negative other cash balance impairment
confirmed equity impairment Others
investment investment comprehensive dividends provision
under the changes provision
income or profits
equity
method
1. Cooperative enterprise
2. Associate
Shanghai SEG 3,379,412.81 -111,608.08 3,267,804.73
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Increase/Decrease of the year
Investment
Closing
gains and
Opening Adjustment of Issued Closing balance of
Investee losses Other Accrued
balance Additional Negative other cash balance impairment
confirmed equity impairment Others
investment investment comprehensive dividends provision
under the changes provision
income or profits
equity
method
Electronics Market
Co., Ltd.
Shenzhen Huakong
181,743,161.07 -4,715,142.77 48.10 177,028,066.40
SEG Co., Ltd.
Shenzhen
International
Consumer
9,000,000.00 9,000,000.00
Electronics
Exhibition/Exchange
Center Co., Ltd.
Subtotal 185,122,573.88 9,000,000.00 0.00 -4,826,750.85 48.10 189,295,871.13
Total 185,122,573.88 9,000,000.00 0.00 -4,826,750.85 48.10 189,295,871.13
9. Investment real estate
(1) Investment properties using cost measurement model
√ Applicable □ Not applicable
Unit: Yuan
Item Houses and buildings Land use right Construction in progress Total
I. Original book value
1. Opening balance 718,281,629.05 5,237,512.49 723,519,141.54
2. Amount of increase in the
current period
(1) Outsourcing
(2) Transfer-in of inventory/fixed
assets/construction in progress
(3) Business merger increase
3. Amount of decrease in the
current period
(1) Disposal
(2) Other transfer-out
4. Closing balance 718,281,629.05 5,237,512.49 723,519,141.54
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Item Houses and buildings Land use right Construction in progress Total
II. Accumulated depreciation or
accumulated amortization
1. Opening balance 277,694,588.74 1,972,826.40 279,667,415.14
2. Amount of increase in the
9,295,757.78 45,220.68 0.00 9,340,978.46
current period
(1) Provision or amortization 9,295,757.78 45,220.68 9,340,978.46
3. Amount of decrease in the
current period
(1) Disposal
(2) Other transfer-out
4. Closing balance 286,990,346.52 2,018,047.08 0.00 289,008,393.60
III. Impairment provision
1. Opening balance
2. Amount of increase in the
current period
(1) Provision
3. Amount of decrease in the
current period
(1) Disposal
(2) Other transfer-out
4. Closing balance
IV. Book value
1. Closing book value 431,291,282.53 3,219,465.41 0.00 434,510,747.94
2. Opening book value 440,587,040.31 3,264,686.09 0.00 443,851,726.40
10. Fixed assets
(1) Information on fixed assets
Unit: Yuan
Houses and Machinery Transportation Electronic
Item Other equipment Total
buildings equipment vehicles equipment
I. Original book value
1. Opening balance 35,694,847.73 30,744,844.49 5,470,881.82 32,437,022.84 3,717,659.88 108,065,256.76
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Houses and Machinery Transportation Electronic
Item Other equipment Total
buildings equipment vehicles equipment
2. Amount of increase in
0.00 3,000.00 0.00 1,122,111.47 778,244.00 1,903,355.47
the current period
(1) Purchase 3,000.00 1,117,611.47 778,244.00 1,898,855.47
(2) Transfer-in of
construction in progress
(3) Business merger
increase
Other transfer-in 4,500.00 4,500.00
3. Amount of decrease in
0.00 0.00 291,551.00 186,324.31 0.00 477,875.31
the current period
(1) Disposal or scrap 291,551.00 186,324.31 477,875.31
4. Closing balance 35,694,847.73 30,747,844.49 5,179,330.82 33,372,810.00 4,495,903.88 109,490,736.92
II. Accumulated
depreciation
1. Opening balance 14,788,585.07 29,586,623.96 3,630,627.47 20,012,581.46 2,522,413.55 70,540,831.51
2. Amount of increase in
436,930.80 826,192.94 252,348.96 687,629.82 290,565.87 2,493,668.39
the current period
(1) Provision 436,930.80 826,192.94 252,348.96 687,629.82 290,565.87 2,493,668.39
3. Amount of decrease in
0.00 0.00 276,973.45 177,008.09 0.00 453,981.54
the current period
(1) Disposal or scrap 276,973.45 177,008.09 453,981.54
4. Closing balance 15,225,515.87 30,412,816.90 3,606,002.98 20,523,203.19 2,812,979.42 72,580,518.36
III. Impairment
provision
1. Opening balance
2. Amount of increase in
the current period
(1) Provision
3. Amount of decrease in
the current period
(1) Disposal or scrap
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Houses and Machinery Transportation Electronic
Item Other equipment Total
buildings equipment vehicles equipment
4. Closing balance
IV. Book value
1. Closing book value 20,469,331.86 335,027.59 1,573,327.84 12,849,606.81 1,682,924.46 36,910,218.56
2. Opening book value 20,906,262.66 1,158,220.53 1,840,254.35 12,424,441.38 1,195,246.33 37,524,425.25
(2) Fixed assets not obtaining a property right certificate
Unit: Yuan
Reason for not obtaining the property right
Item Book value
certificate
Houses and buildings 1,260,353.07 Qualification procedures not complete
11. Construction in progress
(1) Construction in progress
Unit: Yuan
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
LCD in the lobby of
140,810.00 140,810.00
SEG Plaza
Total 140,810.00 140,810.00
12. Intangible assets
(1) Intangible assets
Unit: Yuan
Non-patented
Item Land use right Patent right Outsourced software Total
technology
I. Original book value
1. Opening balance 159,759.24 3,042,853.00 3,202,612.24
2. Amount of increase in the
current period
(1) Purchase
(2) Internal R&D
(3) Business merger increase
3. Amount of decrease in the
current period
(1) Disposal
156
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Non-patented
Item Land use right Patent right Outsourced software Total
technology
4. Closing balance 159,759.24 3,042,853.00 3,202,612.24
II. Accumulated
amortization
1. Opening balance 57,514.55 2,001,335.58 2,058,850.13
2. Amount of increase in the
1,379.88 165,205.24 166,585.12
current period
(1) Provision 1,379.88 165,205.24 166,585.12
3. Amount of decrease in the
current period
(1) Disposal
4. Closing balance 58,894.43 2,166,540.82 2,225,435.25
III. Impairment provision
1. Opening balance
2. Amount of increase in the
current period
(1) Provision
3. Amount of decrease in the
current period
(1) Disposal
4. Closing balance
IV. Book value
1. Closing book value 100,864.81 876,312.18 977,176.99
2. Opening book value 102,244.69 1,041,517.42 1,143,762.11
Proportion of intangible assets formed not through internal R&D of the Company to the balance of intangible assets
13. Goodwill
(1) Original book value of goodwill
Unit: Yuan
157
Full text of Semi-Annual Report 2016 of Shenzhen SEG Co., Ltd.
Name of the investee or the
item contributing to a Opening balance Increase in the current period Decrease in the current period Closing balance
goodwill
Changsha SEG
10,328,927.82 10,328,927.82
Development Co., Ltd.
Total 10,328,927.82 10,328,927.82
(2) Goodwill impairment provision
Unit: Yuan
Name of the investee or
the item contributing to a Opening balance Increase in the current period Decrease in the current period Closing balance
goodwill
Goodwill impairment testing process, parameters, and recognition method for goodwill impairment provision
Other note
Goodwill is measured as the difference on the acquisition date between the cost of the enterprises merger not under
common control over the acquirer's interest in the fair value of the identifiable net assets.
The goodwill calculation process is as follows:
Item Amount
Investment cost 69,000,000.00
Book value of the net assets of the investee 57,508,384.14
Estimated increment of net assets 93,383,233.24
Deferred income tax liabilities incurred by the estimated increment of net assets 23,345,808.30
Fair value of the net assets of the investee 127,545,809.08
Shareholding proportion in the investee 46.00%
The difference caused when the investment cost is more than the recognizable net assets 10,328,927.82
of the investee, which should be enjoyed at the time of acquisition
The Company purchased 46% of the equity of Changsha SEG Development Co., Ltd with the price of 69,000,000 Yuan
in March 2009. The net assets in book value of Changsha SEG Development Co., Ltd were 57,508,384.14 Yuan in the
current month while the net assets in fair value of Changsha SEG Development Co., Ltd after the evaluation for the
added value was carried out. Thus, a goodwill amounting to 10,328,927.82 was formed.
The goodwill impairment testing was conducted at the end of the period and there was no sign of impairment, so no
provision was accrued for impairment.
14. Long-term expenses to be apportioned
Unit: Yuan
Increase in the Amount of current Amount of other
Item Opening balance Closing balance
current period period amortization decrease
Decoration expenses 44,225,335.11 9,536,846.70 5,634,707.68 48,127,474.13
Firefighting renovation 4,318,931.80 404,738.70 3,914,193.10
Market supporting fee of Tower B 691,732.95 456,310.86 235,422.09
158
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Increase in the Amount of current Amount of other
Item Opening balance Closing balance
current period period amortization decrease
Total 49,235,999.86 9,536,846.70 6,495,757.24 52,277,089.32
15. Deferred income tax assets and liabilities
(1) Deferred income tax assets not offset
Unit: Yuan
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Asset impairment provision 32,235,258.25 8,058,814.57 32,235,258.25 8,058,814.57
Government subsidies included
9,500,000.00 2,375,000.00 9,500,000.00 2,375,000.00
in deferred income
Total 41,735,258.25 10,433,814.57 41,735,258.25 10,433,814.57
(2) Deferred income tax liabilities not offset
Unit: Yuan
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Asset evaluation increment for
merger of not the same controlling 61,146,303.68 15,286,575.92 63,442,234.08 15,860,558.49
enterprise
Gains and losses from changes of
fair value of the available-for-sale 576,299.13 144,074.78 654,175.41 163,543.86
financial assets
Total 61,722,602.81 15,430,650.70 64,096,409.49 16,024,102.35
(3) Details of unconfirmed deferred income tax assets
Unit: Yuan
Item Closing balance Opening balance
Deductible losses 56,411,415.84 46,691,048.83
Asset impairment provision 11,322,893.92 11,322,893.92
Total 67,734,309.76 58,013,942.75
(4) The deductible loss of deferred income tax assets that have not been confirmed will come to maturity in the
following years:
Unit: Yuan
Year Period-end amount Period-beginning amount Remarks
2016 12,973,257.02 12,973,257.02
2017 7,431,196.64 7,431,196.64
159
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Year Period-end amount Period-beginning amount Remarks
2018 9,231,815.77 9,295,488.88
2019 6,429,382.30 6,546,777.27
2020 10,444,329.02 10,444,329.02
2021 9,901,435.09
Total 56,411,415.84 46,691,048.83 -
16. Other non-current assets
Unit: Yuan
Item Closing balance Opening balance
Prepayment for software
Prepayment for engineering in the electronics market 848,593.64 5,103,811.14
Total 848,593.64 5,103,811.14
17. Short-term loans
(1) Classification of short-term loans
Unit: Yuan
Item Closing balance Opening balance
Pledge loans 21,438,652.00 42,759,630.48
Mortgage loans 290,000,000.00 315,000,000.00
Borrowing on credit 10,000,000.00
Total 311,438,652.00 367,759,630.48
Notes on the classification of short-term loans:
i. The collateral of the pledge loan is the export tax rebate of Shenzhen SEG E-Commerce Co., Ltd., a subsidiary of the Company.
18. Accounts payable
(1) List of accounts payable
Unit: Yuan
Item Closing balance Opening balance
Payment for goods 23,663,551.07 84,158,671.54
Others 863,112.62 5,750,110.44
Total 24,526,663.69 89,908,781.98
19. Advance receipts
(1) List of advance receipts
Unit: Yuan
160
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Item Closing balance Opening balance
Advance brand royalty 8,906,055.45 11,452,476.85
Advance rental payment 87,715,324.08 111,836,641.23
Advance payment for goods 48,518,993.35 53,693,141.53
Advance advertising payment 5,287,090.98 8,013,712.80
Others 4,879,598.16 5,434,148.64
Total 155,307,062.02 190,430,121.05
20. Wages payable
(1) List of payroll payable
Unit: Yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Short-term payroll 21,780,103.03 29,772,242.45 44,092,156.09 7,460,189.39
2. Welfare after leave -
69,031.13 1,390,690.75 1,390,419.55 69,302.33
defined contribution plan
3. Dismissal welfare 24,503.00 24,503.00 0.00
Other welfare due within
0.00 0.00 0.00
one year
Total 21,849,134.16 31,187,436.20 45,507,078.64 7,529,491.72
(2) List of short-term payroll
Unit: Yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Wages, bonuses,
19,480,254.22 26,026,240.24 39,872,167.53 5,634,326.93
allowances and subsidies
2. Employee welfare 401,274.44 401,274.44 0.00
3. Social insurance
89,152.51 1,283,936.64 1,363,936.64 9,152.51
premiums
Work injury insurance 27,123.44 27,123.44 0.00
Maternity insurance 49,903.10 49,903.10 0.00
Basic medical insurance 88,756.51 803,191.60 880,191.60 11,756.51
Supplementary medical
396.00 5,720.00 5,720.00 396.00
insurance
4. Housing fund 1,265,986.46 1,466,082.22 1,569,641.43 1,162,427.25
5. Labor union expenditure
and employee education 944,709.84 399,481.91 716,337.55 627,854.20
fund
Other short-term payroll 195,227.00 168,798.50 26,428.50
161
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Total 21,780,103.03 29,772,242.45 44,092,156.09 7,460,189.39
(3) Defined contribution plan
Unit: Yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
1. Pension insurance 68,043.51 799,048.10 798,776.90 68,314.71
Unemployment insurance
987.62 591,642.65 591,642.65 987.62
premium
3. Supplementary pension
0.00
payment
Total 69,031.13 1,390,690.75 1,390,419.55 69,302.33
21. Taxes payable
Unit: Yuan
Item Closing balance Opening balance
Value-added tax 1,486,940.24 169,594.16
Business tax -3,095,394.16 1,424,420.92
Corporate income tax 21,351,544.22 28,476,563.20
Individual income tax 1,439,614.04 805,153.42
Urban maintenance and construction tax -9,965.70 178,371.98
Education surtax -58,358.39 102,484.34
Housing property tax 2,158,907.17 2,939,568.67
Stamp tax and water fund 38,840.51 532,994.96
Others 952,884.40 15,878.42
Total 24,265,012.33 34,645,030.07
22. Interest payable
Unit: Yuan
Item Closing balance Opening balance
Interest payable on short-term loans 698,717.58 516,758.34
Total 698,717.58 516,758.34
23. Dividends payable
Unit: Yuan
Item Closing balance Opening balance
Common stock dividends 18,966,398.39 2,218,224.58
Total 18,966,398.39 2,218,224.58
162
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24. Other payables
(1) Other payables listed based on nature
Unit: Yuan
Item Closing balance Opening balance
Deposit and security deposit 129,468,386.91 117,687,835.08
Central air conditioner maintenance cost and
13,288,284.61 12,975,174.61
special maintenance fund
Receipts under custody 10,788,431.53 16,469,845.49
Funds from related parties 2,110,695.41 2,753,679.48
Water and electricity charges, rental, and
71,884,610.63 44,443,351.03
others payable of the electronics market
Total 227,540,409.09 194,329,885.69
25. Estimated liabilities
Unit: Yuan
Item Closing balance Opening balance Cause
Pending litigation 9,700,000.00 7,000,000.00
Total 9,700,000.00 7,000,000.00 -
Note to important assumption and estimation related to important estimated liabilities
In March 2013, Nanning SEG leased the house located on 1F and 2F of podium building of Nanning Zhidi Square at 158 East Renmin Road,
Xingning District, Nanning as the electronics market. The agreed term of tenancy is from March 18, 2013 to March 17, 2025. Due to a large
area of water seepage and leaking existing with the house leased, Nanning SEG lodged a lawsuit at Xingning District People's Court after
negotiation with Haiqi Company for several times with no solution achieved. As Nanning SEG failed to pay the rental and breached the
contract, Nanning SEG was also accused by Haiqi Company at the same court.
On June 28, 2016, the lawsuit was dismissed by Nanning Xingning District People's Court in the (2015) X. M. Y. C. Zi. Civil Judgment No.
1590. In the (2015) X. M. Y. C. Zi. Civil Judgment No. 1393, RMB 12,000,000 was involved in the case, and the Company decided not to
file an appeal. The Company accrued the estimated liabilities RMB 7,000,000 for the case in 2015. Nanning SEG has estimated the rental
payable RMB 2,300,000. According to the judgment, the Company additionally accrued the compensation RMB 2,700,000.
26. Deferred income
Unit: Yuan
Increase in the current Decrease in the
Item Opening balance Closing balance Cause
period current period
Government subsidies 9,634,114.77 35,628.12 9,598,486.65
Total 9,634,114.77 35,628.12 9,598,486.65 -
Items involving government subsidies:
Unit: Yuan
Amount of
Amount of new Relevant to
non-operating
Liability item Opening balance subsidies in the Other changes Closing balance assets/relevant to
income in the
current period income
current period
163
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Amount of
Amount of new Relevant to
non-operating
Liability item Opening balance subsidies in the Other changes Closing balance assets/relevant to
income in the
current period income
current period
Subsidies for
online SEG 88,110.37 35,628.12 52,482.25 Relevant to assets
projects
Subsidies for
46,004.40 46,004.40 Relevant to income
project funds
Support project for
construction of
9,500,000.00 9,500,000.00 Relevant to assets
Nantong SEG
Electronics Market
Total 9,634,114.77 35,628.12 9,598,486.65 -
27. Share capital
Unit: Yuan
Increase/decrease of the change (+)
Opening balance Issue of new Capitalization of Closing balance
Bonus share Others Subtotal
shares public reserve
Sum of shares 784,799,010.00 784,799,010.00
28. Capital reserves
Unit: Yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Capital premium (capital
322,339,973.81 322,339,973.81
share premium)
Other capital reserves 184,205,857.30 7,812.30 184,213,669.60
Total 506,545,831.11 7,812.30 506,553,643.41
29. Other comprehensive income
Unit: Yuan
Amount incurred in the report period
Less: gains and
Pre-tax losses Amount Amount
Opening amount transferred in after tax after tax Closing
Item Less:
balance obtained in from other attributable attributable balance
Income tax
the current comprehensive to parent to minority
period income in the company shareholders
current period
II. Other comprehensive income that can
326,662.48 -155,907.21 -38,988.83 -77,828.18 -39,090.20 248,834.30
be categorized as gains and losses
164
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Amount incurred in the report period
Less: gains and
Pre-tax losses Amount Amount
Opening amount transferred in after tax after tax Closing
Item Less:
balance obtained in from other attributable attributable balance
Income tax
the current comprehensive to parent to minority
period income in the company shareholders
current period
Including: Shares of the investee of
other comprehensive income to be
48.10 48.10 48.10
reclassified into gains and losses under
the equity method
Gains and losses from changes of fair
value of the available-for-sale financial 326,662.48 -155,955.31 -38,988.83 -77,876.28 -39,090.20 248,786.20
assets
Held-to-maturity investments classified
as gains and losses from the 0.00
available-for-sale financial assets
(4) Effective gains or loss from cash
0.00
flows
(5) Foreign currency translation
0.00
differences
Total of other comprehensive income 326,662.48 -155,907.21 -38,988.83 -77,828.18 -39,090.20 248,834.30
30. Surplus reserve
Unit: Yuan
Increase in the current Decrease in the current
Item Opening balance Closing balance
period period
Statutory surplus reserve 109,922,336.87 109,922,336.87
Total 109,922,336.87 109,922,336.87
31. Undistributed profits
Unit: Yuan
Item Current period Previous period
Before adjustment undistributed profits at the end of
73,532,388.70
the previous period
After adjustment undistributed profit at the beginning
73,532,388.70
of period
Add: Net profits attributable to the parent company
26,856,270.42
owner in the current period
Other distributions to shareholders 23,669,414.47
Undistributed profits at the end of period 76,719,244.65
165
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32. Operating income and operating cost
Unit: Yuan
Amount incurred in the current period Amount incurred in the previous period
Item
Income Cost Income Cost
Main business 412,250,832.76 320,996,877.99 425,219,054.09 317,303,931.44
Total 412,250,832.76 320,996,877.99 425,219,054.09 317,303,931.44
33. Business taxes and surcharges
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Business tax 8,574,445.98 12,116,694.54
Urban maintenance and construction tax 880,743.75 926,364.05
Education surtax 566,286.99 617,537.62
Others 108,197.42 87,433.93
Total 10,129,674.14 13,748,030.14
34. Financing expenses
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Interest expenses 2,866,946.54 10,723,583.83
Less: Interest income 2,161,658.98 9,503,644.66
Loss on exchange -301,807.07 -671,695.25
Others 351,859.63 294,813.31
Total 755,340.12 843,057.23
35. Investment income
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Long-term equity investment income by the
-4,826,750.85 -4,892,855.94
equity method
Investment income during the possession of
750,000.00
available-for-sale financial assets
Others (financial products) 6,093,203.87 9,594,819.58
Total 1,266,453.02 5,451,963.64
36. Non-operating income
Unit: Yuan
166
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Amount incurred in the current Amount incurred in the previous Amount included in current
Item
period period non-recurring gains and losses
Total gains on disposal of
0.00 18,693.10
non-current assets
Including: Gain on disposal of
18,693.10
fixed assets
Government subsidies 101,608.00 223,828.12 101,608.00
Liquidated damages 61,872.11 301,209.17 61,872.11
Others 254,908.25 502,248.72 254,908.25
Total 418,388.36 1,045,979.11 418,388.36
Government subsidies included in current gains and losses:
Unit: Yuan
Influence on Amount
Amount Relevant to
the profit and Special incurred in the
Subsidy item Fund source Purpose Property and type incurred in the assets/relevant
loss of the subsidy previous
current period to income
current year period
Shenzhen Subsidy gained from
Science and engagement in special
Subsidies for Technology, industries encouraged
Relevant to
online SEG Industry, Allowance and supported by the Yes No 35,628.12 35,628.12
assets
projects Trade, and state (legally gained
Information according to national
Commission policies)
Subsidy gained from
Shenzhen
engagement in special
Futian
industries encouraged
Subsidies for District Relevant to
Allowance and supported by the No No 188,200.00
project funds Economic income
state (legally gained
Promotion
according to national
Council
policies)
Subsidy gained from
Guiding funds engagement in special
Suzhou
for industries encouraged
Wujiang Relevant to
development Reward and supported by the Yes No 50,000.00
Finance income
of service state (legally gained
Bureau
industry according to national
policies)
Subsidy gained from
Nanjing engagement in special
Post Social industries encouraged
Relevant to
stabilization Security Allowance and supported by the Yes No 15,979.88
income
subsidy Management state (legally gained
Center according to national
policies)
Total - - - - - 101,608.00 223,828.12 -
Other note:
167
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37. Non-operating expenses
Unit: Yuan
Amount incurred in the current Amount incurred in the previous Amount included in current
Item
period period non-recurring gains and losses
Total loss from disposal of
9,316.22 196,424.21 9,316.22
non-current assets
Including: loss from disposal of
9,316.22 196,424.21 9,316.22
fixed assets
Compensation for loss 2,710,190.00 605,580.63 2,710,190.00
Others 39,379.12 13,784.10 39,379.12
Total 2,758,885.34 815,788.94 2,758,885.34
38. Income tax expenses
(1) Income tax
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Income tax of the current period 22,632,168.37 20,575,833.86
Deferred income tax -593,451.65 -454,462.94
Total 22,038,716.72 20,121,370.92
(2) Adjustment process of accounting profit and income tax
Unit: Yuan
Item Amount incurred in the current period
Total profit 66,256,899.51
Income tax calculated according to statutory or applicable tax rate 16,564,224.88
Impact of different tax rates applicable to subsidiaries -893,339.17
Impact of non-taxable income 1,206,687.71
Impact of non-deductible costs, expenses and losses 424,082.57
Impact of deferred income tax assets unrecognized in the previous
45,267.00
period on deductible losses
Impact of deferred income tax assets unrecognized in current period
4,691,793.73
on deductible temporary difference or deductible losses
Income tax 22,038,716.72
39. Items in the cash flow statement
(1) Other cash received from operating activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Acquisition of security deposit for land 60,000,000.00
168
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Item Amount incurred in the current period Amount incurred in the previous period
Current account 15,833,361.21 35,059,959.29
Goods payment collected from tenants 92,828,409.85 130,068,994.68
Interest income 2,161,658.98 4,764,834.98
Non-operating income 261,757.88 181,571.66
Total 111,085,187.92 230,075,360.61
(2) Other cash paid related to operating activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Incomings and outgoings 21,991,291.71 43,627,781.29
Goods payment paid for tenants 67,321,062.09 125,990,506.28
Cash expenses 24,818,276.07 21,024,437.31
Non-operating expenses 50,682.25 1,176,961.97
Total 114,181,312.12 191,819,686.85
Note to other cash paid related to operating activities:
(3) Other cash received related to financing activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Cash received from disposal of fractional
7,812.30
shares
Total 7,812.30
(4) Other paid cash related to financing activities
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Interbank financing of related parties 57,650,000.00
Payment for cash deposit
Payment for loan interest of related parties 110,222.92
Payment for issuance of short-term financing
1,524,692.51 669,500.00
bonds
Total 1,524,692.51 58,429,722.92
169
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40. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
Unit: Yuan
Supplementary data Amount incurred in the current period Amount of the previous period
1. Reconciliation of net income to cash flow
- -
from operating activities
Net profit 44,218,182.79 52,065,834.26
Plus: Asset impairment provision -3,962,625.52 6,713,966.89
Depreciation of fixed assets, oil & gas assets
11,834,646.85 11,982,280.62
and consumable biological assets
Amortization of intangible assets 166,585.12 142,489.91
Amortization of long-term expenses to be
6,495,757.24 6,574,494.06
apportioned
Loss on disposal of fixed assets, intangible
assets, and other long-term assets (Profit will be 9,316.22 -177,731.11
marked with "-")
Financial expenses (enter "-" for income) 2,866,946.54 843,057.23
Income from investment (enter "-" for profit) -1,266,453.02 -5,451,963.64
Decrease in deferred tax assets (enter "-" for
-1,678,491.72
increase)
Increase in deferred tax liabilities (enter "–" for
-593,451.65 -320,684.81
decrease)
Inventory decrease (enter "-" for increase) -126,395,646.47 -135,253,821.65
Decrease in accounts receivable related to
-70,788,237.75 158,080,537.33
operating activities (enter "-" for increase)
Increase in accounts payable related to operating
38,100,951.25 -192,107,800.99
activities (enter "-" for decrease)
Net cash flow from operating activities -99,314,028.40 -98,587,833.62
2. 2. Major investing and financing activities
- -
that involve no cash payments and receipts:
3. Change in cash and cash equivalents: - -
Closing balance of cash 143,304,754.16 155,272,010.47
Less: Opening balance of cash 275,523,429.10 382,056,680.70
Net increase in cash and cash equivalents -132,218,674.94 -226,784,670.23
(2) Composition of cash and cash equivalents:
Unit: Yuan
Item Closing balance Opening balance
I. Cash 143,304,754.16 275,523,429.10
170
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Item Closing balance Opening balance
Including: Cash on hand 532,393.65 526,467.72
II. Bank deposits available for payment at any
142,717,238.17 274,816,839.04
time
III. Closing balance of cash and cash
143,304,754.16 275,523,429.10
equivalents
41. Assets of which the ownership or the right to use is restricted
Unit: Yuan
Item Closing book value Reason for restriction
Deposit and performance bond for credit card
Monetary funds
repayment
Fixed assets 11,384,175.51 Collaterals for bank loans
Investment properties 99,465,255.47 Collaterals for bank loans
Total 110,849,430.98 -
42. Foreign currency monetary projects
(1) Foreign currency monetary projects
Unit: Yuan
Closing balance of foreign Closing balance of converted
Item Discount exchange rate
currency RMB
USD 100.00 6.6447 664.47
HK$ 239.17 0.8564 204.83
USD 8,822,851.05 6.6447 58,625,198.38
VIII. Change in consolidation scope
1. Others
Twenty-two entities are included in the current consolidated financial statements, namely:
Proportion of Proportion of voting
Subsidiary name Type of subsidiary Level
shareholding (%) right(%)
Shenzhen SEG Baohua Enterprise Development
Holding subsidiary I 66.58 66.58
Co., Ltd.
Shenzhen Mellow Orange Business Hotel Holding grandson
II 66.58 66.58
Management Co., Ltd company
Shenzhen SEG Industrial Investment Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Changsha SEG Development Co., Ltd. Holding subsidiary I 46.00 51.00
Shenzhen SEG Electronics Market Management
Holding subsidiary I 70.00 70.00
Co., Ltd.
171
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Proportion of Proportion of voting
Subsidiary name Type of subsidiary Level
shareholding (%) right(%)
Suzhou SEG Electronics Market Co., Ltd. Holding subsidiary I 45.00 45.00
Xi'an SEG Electronics Market Co., Ltd. Holding subsidiary I 65.00 65.00
Shenzhen SEG Credit Co., Ltd. Holding subsidiary I 53.02 53.02
Shenzhen SEG E-Commerce Co., Ltd. Holding subsidiary I 51.00 51.00
Shenzhen SEG Electronics Market Management
Wholly-owned subsidiary I 100.00 100.00
Co., Ltd.
Xi'an Hairong SEG Electronics Market Co.,
Holding subsidiary I 51.00 51.00
Ltd.
Wujiang SEG Electronics Market Co., Ltd. Holding subsidiary I 51.00 51.00
Wuxi SEG Electronics Market Co., Ltd Holding subsidiary I 51.00 51.00
Shunde SEG Electronics Market Management
Wholly-owned subsidiary I 100.00 100.00
Co., Ltd.
Nanning SEG Electronics Market Management
Wholly-owned subsidiary I 100.00 100.00
Co., Ltd.
Nantong SEG Times Square Development Co.,
Wholly-owned subsidiary I 100.00 100.00
Ltd.
Yantai SEG Times Square Development Co.,
Holding subsidiary I 90.00 90.00
Ltd.
Nantong SEG Commercial Operation
Wholly-owned subsidiary I 100.00 100.00
Management Co., Ltd.
Suzhou SEG Digital Plaza Management Co.,
Wholly-owned subsidiary I 100.00 100.00
Ltd.
Xi'an Fengdong New Town SEG Times Square
Wholly-owned subsidiary I 100.00 100.00
Properties Co., Ltd.
Suzhou SEG Intelligent Technology Co., Ltd. Wholly-owned subsidiary I 100.00 100.00
Shenzhen SEG Longyan New Energy
Holding subsidiary I 50.00 50.00
Application and Development Co., Ltd.
For the cause for difference between the proportion of shareholding and the proportion of voting rights and the basis for
control of the invested entity even with half of voting rights or less, see "Attachment 8: Equities in other entities – (1)
Equities in subsidiaries".
Compared with the previous period, two subsidiaries are added to entities included in the consolidated financial
statements of the current period.
IX. Equity in other entities
1. Equity in subsidiaries
(1) Composition of enterprise group
172
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Main place of Place of Shareholding ratio Method of
Subsidiary name Nature of business
business registration Direct Indirect acquisition
Xi'an SEG Electronics Electronics market lease Investment and
Xi'an Xi'an 65.00%
Market Co., Ltd. management establishment
Shenzhen SEG
Electronics market lease Investment and
Electronics Market Shenzhen Shenzhen 70.00%
management establishment
Management Co., Ltd.
Suzhou SEG
Electronics market lease Investment and
Electronics Market Su Zhou Su Zhou 45.00%
management establishment
Co., Ltd.
Shenzhen Mellow
Hotel management,
Orange Business Investment and
Shenzhen Shenzhen consultancy and property 66.58%
Hotel Management establishment
management
Co., Ltd
Petty loan business
(pooling public deposits is
Shenzhen SEG Credit Investment and
Shenzhen Shenzhen prohibited) within the 36.00% 17.02%
Co., Ltd. establishment
administrative region of
Shenzhen.
Shenzhen SEG
Investment and
E-Commerce Co., Shenzhen Shenzhen E-commerce 51.00%
establishment
Ltd.
Market facilities leasing,
Shenzhen SEG
property management, Investment and
Electronics Market Nanjing Nanjing 100.00%
sales of electronic products establishment
Management Co., Ltd.
and advertisement
Xi'an Hairong SEG Property leasing, sales of
Investment and
Electronics Market Xi'an Xi'an electronic products and 51.00%
establishment
Co., Ltd. advertisement
Wujiang SEG
Electronics market lease Investment and
Electronics Market Wujiang Wujiang 51.00%
management establishment
Co., Ltd.
Wuxi SEG Electronics Electronics market lease Investment and
Wuxi Wuxi 51.00%
Market Co., Ltd management establishment
Shunde SEG
Electronics market lease Investment and
Electronics Market Foshan Foshan 100.00%
management establishment
Management Co., Ltd.
Nanning SEG
Electronics market lease Investment and
Electronics Market Nanning Nanning 100.00%
management establishment
Management Co., Ltd.
Nantong SEG Times
Investment and
Square Development Nantong Nantong real estate development 100.00%
establishment
Co., Ltd.
173
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Main place of Place of Shareholding ratio Method of
Subsidiary name Nature of business
business registration Direct Indirect acquisition
Shenzhen SEG
Merger of
Baohua Enterprise Property lease and
Shenzhen Shenzhen 66.58% enterprises under
Development Co., management
common control
Ltd.
Shenzhen SEG Merger of
Investment in industrial
Industrial Investment Shenzhen Shenzhen 100.00% enterprises under
and commercial business
Co., Ltd. common control
Merger of the
Changsha SEG
enterprises under
Development Co., Changsha Changsha Property lease 46.00%
the control of a
Ltd.
same entity
Yantai SEG Times
Investment and
Square Development Yantai Yantai real estate development 90.00%
establishment
Co., Ltd.
Nantong SEG
Commercial Investment and
Nantong Nantong - 100.00%
Operation establishment
Management Co., Ltd.
Suzhou SEG Digital
Investment and
Plaza Management Su Zhou Su Zhou - 100.00%
establishment
Co., Ltd.
Xi'an Fengdong New
Town SEG Times Investment and
Xi'an Xi'an real estate development 100.00%
Square Properties Co., establishment
Ltd.
Suzhou SEG
Investment and
Intelligent Technology Su Zhou Su Zhou Trading 100.00%
establishment
Co., Ltd.
Shenzhen SEG
Longyan New Energy
Investment and
Application and Shenzhen Shenzhen New energy development 50.00%
establishment
Development Co.,
Ltd.
Difference between the shareholding ratio and the ratio of voting power
For Changsha SEG Development Co., Ltd. (originally named Changsha Emerging Development Co., Ltd.), the current
capital stock structure is as follows: The Company holds 46% of shares and is the largest shareholder. In addition,
according to the Memorandum of Cooperation Concerning the Stock Equity Project of Joint Investment and Acquisition
of Changsha Emerging Development Co., Ltd. signed by and between the Company and Hong Kong Jinhong Group on
October 8 2008, Hong Kong Jinhong Group agreed to give up the 5% of voting power, which would be exercised by the
Company, and the voting power ratio of the Company is 51%. Half of the directors, the Chairman of the Board, the
General Manager, the Chief Financial Officer and the management team of Changsha SEG Development Co., Ltd are all
dispatched by the Company. Therefore, the Company has obtained the control of Changsha SEG Development Co., Ltd.
Basis for half of or less voting power with control of the investee and more than half of voting power with control
of the investee
174
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Half of the directors, the Chairman of the Board, the General Manager, the Chief Financial Officer and the management
team of Suzhou SEG The electronics market Management Co., Ltd are all dispatched by the Company so that the
Company actually controls the operation of Suzhou SEG.
(2) Important non-wholly-owned subsidiaries
Unit: Yuan
Current dividends Minority shareholders'
Equity proportion of Current gains of losses of
Subsidiary name distributed to minority equity balance at the end
minority shareholders minority shareholders
shareholders of the period
Shenzhen SEG Credit Co., Ltd. 46.98% 6,623,617.77 14,490,000.00 81,090,646.88
Changsha SEG Development
54.00% 1,790,571.99 36,219,633.11
Co., Ltd.
Shenzhen SEG Baohua
Enterprise Development Co., 33.42% 4,911,495.19 6,177,600.00 33,510,984.03
Ltd.
Difference between the shareholding ratio and the ratio of voting power of minority shareholders:
Changsha SEG Development Co., Ltd. (originally named Changsha Emerging Development Co., Ltd.), the current
capital stock structure is as follows: The Company holds 46% of shares and is the largest shareholder. In addition,
according to the Memorandum of Cooperation Concerning the Stock Equity Project of Joint Investment and Acquisition
of Changsha Emerging Development Co., Ltd. signed by and between the Company and Hong Kong Jinhong Group on
October 8 2008, Hong Kong Jinhong Group agreed to give up 5% of the voting power, which would be exercised by the
Company. As a result, Hong Kong Jinhong Group holds 40% of shares and 35% of the voting power.
(3) Main financial information of important non-wholly-owned subsidiaries
Unit: Yuan
Closing balance Opening balance
Subsidiary
Non-curr Non-curr
name Current Non-current Current Total Current Non-current Current Total
Total assets ent Total assets ent
assets: assets: liabilities: liabilities assets: assets: liabilities: liabilities
liabilities: liabilities:
Shenzhen
59,974,18 506,374,314 566,348,502 393,741,762 393,741,762 43,081,968 476,007,451 519,089,420 329,081,482 329,081,482
SEG Credit
8.78 .14 .92 .00 .00 .84 .60 .44 .77 .77
Co., Ltd.
Changsha
SEG 19,815,16 66,331,113. 86,146,274. 19,072,879. 19,072,879. 15,438,729 68,199,562. 83,638,292. 19,880,771. 19,880,771.
Development 0.65 47 12 47 47 .45 67 12 53 53
Co., Ltd.
Shenzhen
SEG Baohua
106,070,7 52,545,493. 158,616,283 58,219,484. 124,555.0 58,344,039. 97,334,289 52,503,037. 149,837,326 45,495,566. 163,543.8 45,659,110.
Enterprise
90.71 04 .75 46 3 49 .19 02 .21 87 6 73
Development
Co., Ltd.
175
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Unit: Yuan
Amount incurred in the report period Amount incurred in the previous period
Subsidiary name Total Cash flow of Total Cash flow of
Operating income Net profit comprehensive operating Operating income Net profit comprehensive operating
income activities income activities
Shenzhen SEG
49,577,595.91 14,098,803.25 14,098,803.25 -27,673,263.51 48,064,462.25 12,426,082.81 12,426,082.81 -33,638,954.38
Credit Co., Ltd.
Changsha SEG
Development Co., 11,509,734.96 3,315,874.06 3,315,874.06 4,093,245.31 11,490,331.21 1,315,968.42 1,315,968.42 6,346,992.49
Ltd.
Shenzhen SEG
Baohua Enterprise
41,085,826.65 14,696,275.26 14,579,308.78 3,096,434.93 42,445,648.66 13,595,029.71 13,911,794.97 9,349,544.27
Development Co.,
Ltd.
2. Equity in joint arrangements or associates
(1) Important joint ventures or associates
Shareholding ratio Accounting
treatment method
Name of joint venture Main place of Place of
Nature of business for investment in
or associate business registration Direct Indirect joint venture or
associate
Shenzhen Huakong
Shenzhen Shenzhen Manufacturing 20.00% Equity method
SEG Co., Ltd.
Shanghai SEG
Electronics Market Shanghai Shanghai Service industry 35.00% Equity method
Management Co., Ltd.
Shenzhen International
Consumer Electronics
Shenzhen Shenzhen Exhibition 30.00% Equity method
Exhibition/Exchange
Center Co., Ltd.
(2) Main financial information about important joint ventures
Unit: Yuan
Closing balance/amount incurred in the current period Opening balance/amount incurred in the previous period
Shenzhen Shenzhen
Shanghai SEG Shanghai SEG
International International
Shenzhen Electronics Shenzhen Electronics
Consumer Consumer
Huakong SEG Market Huakong SEG Market
Electronics Electronics
Co., Ltd. Management Co., Co., Ltd. Management Co.,
Exhibition/Exchange Exhibition/Exchange
Ltd. Ltd.
Center Co., Ltd. Center Co., Ltd.
Current assets: 373,956,916.16 22,154,876.66 30,000,000.00 395,623,546.83 20,901,493.33
Including: Cash
and cash 178,367,249.86 6,720,794.24 30,000,000.00 214,877,742.71 1,518,901.94
equivalent
176
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Closing balance/amount incurred in the current period Opening balance/amount incurred in the previous period
Shenzhen Shenzhen
Shanghai SEG Shanghai SEG
International International
Shenzhen Electronics Shenzhen Electronics
Consumer Consumer
Huakong SEG Market Huakong SEG Market
Electronics Electronics
Co., Ltd. Management Co., Co., Ltd. Management Co.,
Exhibition/Exchange Exhibition/Exchange
Ltd. Ltd.
Center Co., Ltd. Center Co., Ltd.
Non-current assets 361,767,967.50 176,002.47 362,254,332.48 210,798.06
Total assets 735,724,883.66 22,330,879.13 30,000,000.00 757,877,879.31 21,112,291.39
Current liabilities 66,603,007.25 12,309,947.01 94,113,723.78 10,747,847.59
Non-current
1,881,551.16 1,369,185.93
liabilities
Total liabilities 68,484,558.41 12,309,947.01 95,482,909.71 10,747,847.59
Minority
shareholders' 76,561,972.97 48,141,144.00
equity
Shareholders'
equity attributable
590,678,352.28 10,020,932.12 30,000,000.00 614,253,825.60 10,364,443.80
to the parent
company
Net asset shares
calculated based
118,135,670.46 3,507,326.24 9,000,000.00 122,857,318.61 3,627,555.33
on shareholding
ratio
Adjustment 58,892,395.94 -239,521.51 58,885,842.46 -248,142.52
- Others 58,892,395.94 -239,521.51 58,885,842.46 -248,142.52
Book value of
equity investment 177,028,066.40 3,267,804.73 9,000,000.00 185,122,573.88 3,379,412.81
in joint ventures
Fair value of
equity investment
1,949,019,919.44 2,551,041,568.11
in joint ventures
with public offer
Operating income 42,719,787.19 3,084,877.60 16,994,189.98 1,282,610.27
Financial cost -1,923,861.70 -272.15 -382,325.95 -431.99
Income tax
-367,558.89
payment
Net profit -26,861,012.87 -318,880.23 -28,588,277.77 -1,571,178.03
Other
comprehensive 240.52
income
Total
-26,860,772.35 -318,880.23 -28,588,277.77 -1,571,178.03
comprehensive
177
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Closing balance/amount incurred in the current period Opening balance/amount incurred in the previous period
Shenzhen Shenzhen
Shanghai SEG Shanghai SEG
International International
Shenzhen Electronics Shenzhen Electronics
Consumer Consumer
Huakong SEG Market Huakong SEG Market
Electronics Electronics
Co., Ltd. Management Co., Co., Ltd. Management Co.,
Exhibition/Exchange Exhibition/Exchange
Ltd. Ltd.
Center Co., Ltd. Center Co., Ltd.
income
Dividends
received from
500,000.00
joint ventures in
the current year
X. Disclosure of fair value
1. Period-end fair value of assets and liabilities measured based on fair value
Unit: Yuan
Period-end fair value
Item Level-1 fair value Level-2 fair value Level-3 fair value
Total
measurement measurement measurement
(I) Persistent fair value measurement - - - -
(II) Available-for-sale financial assets 588,625.10 588,625.10
(2) Equity instrument investment 588,625.10 588,625.10
II. Non-persistent fair value
- - - -
measurement
XI. Related parties and related party transactions
1. Information on the parent company of the Company
Percentage of the Percentage of the
Company's shares Company's voting
Name of parent company Place of registration Nature of business Registered Capital
held by the parent shares held by the
company parent company
Shenzhen SEG Group Co., Comprehensive
Shenzhen 135,542.00 30.24% 30.24%
Ltd. business
Information on subsidiaries of the Company:
The final controlling party of the enterprise is Shenzhen State-owned Assets Supervision and Administration Commission.
2. Information on subsidiaries of the Company
For information on subsidiaries of the Company, see the note.
3. Information on the Company's joint ventures and associates
For details about important joint ventures or associates of the enterprises, see the note.
178
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Information on other joint ventures or associates involved in related party transaction with the Company in the current period or the previous
period:
Name of joint venture or associate Relation with the Company
4. Information on other related parties
Name of other related parties Relation with the Company
Shenzhen SEG Property Development Co., Ltd. Subsidiary of shareholders
Shenzhen SEG Group Service Co., Ltd Subsidiary of shareholders
Shenzhen SEG Computers Co., Ltd Subsidiary of shareholders
Shenzhen SEG Hi-tech Industrial Co., Ltd. Subsidiary of shareholders
Shenzhen SEG Real Estate Investment Co., Ltd. Subsidiary of shareholders
Shenzhen SEG Business Operation Co., Ltd. Subsidiary of the controlling shareholder
5. Information on related transactions
(1) Related trusted management, contracting and mandatory administration and initial contracting
Trusted management/contracting of the Company:
Unit: Yuan
Confirmed trust
Name of Name of Type of Pricing basis for income
profit/contracting
entrusting/contract entrusted entrusted/contracted Starting date Ending date from entrusted
profit in the report
issuing party party/contractor assets management/contracting
period
SEG
Shenzhen SEG Shenzhen SEG Sunday, February Sunday, January
Communications Trusteeship Agreement
Group Co., Ltd. Co., Ltd. 01, 2015 31, 2016
Market
(2) Leases between the Company and related parties
The Company acts as the lessee:
Unit: Yuan
Rental recognized in the current Rental recognized in the previous
Name of lessor Type of leased assets
period period
The warehouse with its area of
Shenzhen SEG Group Co., Ltd. 809.26 square meters on the 8th 328,074.00 310,587.00
floor of SEG Plaza
Subsidiaries of the Company act as the lessee:
Rental recognized in the current Rental recognized in the previous
Name of lessee Type of leased assets
period period
Shenzhen SEG Business 15F, SEG Plaza covering 687.01 253,960.20
Operation Co., Ltd. m2
Shenzhen SEG Properties 12F, West of SEG Science and 411,390.66
Development Co., Ltd. Technology Park covering 909.79
m2
Total 411,390.66 253,960.20
179
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(3) Remuneration of key managers
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Remuneration of key managers 124.51 132.46
6. Accounts receivable from and payable to related parties
(1) Receivables
Unit: Yuan
Closing balance Opening balance
Project name Related party
Book balance Bad debt provision Book balance Bad debt provision
Shenzhen SEG Property
Other receivables 10,325.00
Development Co., Ltd.
Shenzhen SEG Group
227,149.60
Co., Ltd.
Shenzhen SEG Property
20,100.00 20,100.00
Management Co., Ltd.
Shenzhen SEG Real
Estate Investment Co., 139,342.00 139,342.00
Ltd.
(2) Payables
Unit: Yuan
Project name Related party Period-end book balance Period-end book balance
Dividends payable Shenzhen SEG Computers Co., Ltd 781,110.00 662,310.00
Shenzhen SEG Group Co., Ltd. 11,970,000.00
Shenzhen SEG Property Development Co.,
2,520,000.00
Ltd.
XII. Commitments and contingencies
1. Important commitments
Important commitment on the balance sheet date
(1) Signed lease contract that is being performed or will be performed and minimum rental to be paid in the next year
Suzhou SEG Shenzhen SEG
Xi'an SEG Electronics Shenzhen SEG Xi'an Hairong Electronics Wujiang SEG
Remaining lease term Electronics Market Electronics Market SEG Electronics Market Electronics
Market Co., Ltd. Management Co., Management Co., Ltd. Market Co., Ltd. Management Market Co., Ltd.
Ltd. Co., Ltd.
Within one year (including
13,125,000.00 16,024,907.88 5,060,198.20 - - -
one year)
Above one year but within 13,375,000.00 16,234,383.80 5,212,004.15 - - -
180
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Suzhou SEG Shenzhen SEG
Xi'an SEG Electronics Shenzhen SEG Xi'an Hairong Electronics Wujiang SEG
Remaining lease term Electronics Market Electronics Market SEG Electronics Market Electronics
Market Co., Ltd. Management Co., Management Co., Ltd. Market Co., Ltd. Management Market Co., Ltd.
Ltd. Co., Ltd.
two years (including two
years)
Above two years but
within three years 13,375,000.00 16,234,383.80 5,212,004.15 - - -
(including three years)
Over 3 years 35,375,000.00 140,977,294.16 9,925,451.00 - - -
Total 75,250,000.00 189,470,969.64 25,409,657.50 Note *1 Note *2 Note *3
(Continued)
Nanning SEG Shunde SEG
Wuxi SEG Electronics Suzhou SEG Digital Plaza
Remaining lease term Electronics Market Electronics Market
Market Co., Ltd Management Co., Ltd.
Management Co., Ltd. Management Co., Ltd.
Within one year (including one
4,800,000.00 - 13,054,290.12
year)
Above one year but within two
5,040,000.00 - 13,403,893.21
years (including two years)
Above two years but within three
5,040,000.00 - 13,403,893.21
years (including three years)
Over 3 years 38,047,508.73 - 69,228,846.75
Total 52,927,508.73 Note *4 109,090,923.29
Note *1: Under the cooperation agreement signed by and between both parties, Xi'an Hairong SEG Electronics Market Co., Ltd. pays the
rental according to 70% of profits of the electronics market. Therefore, the amount of rental in the future is uncertain.
Note *2: The rental of Shenzhen SEG Electronics Market Management Co., Ltd. is adjusted according to the CPI. Therefore, the amount of
rental in the future is uncertain.
Note *3: Under the cooperation agreement signed by and between both parties, Wujiang SEG Electronics Market Co., Ltd. pays the rental
according to 70% of pre-tax profits of the electronics market. Therefore, the amount of rental in the future is uncertain.
Note *4: Wuxi SEG Electronics Market Co., Ltd. is exempted from the rental within the three years before opening of the Company and pays
the rental in the fourth year according to 70% of the pre-tax profits of the electronics market. Therefore, the amount of rental in the future is
uncertain.
Except the preceding commitments, the Company has not significant commitments that shall be disclosed or have not been disclosed as of
June 30, 2016.
(2) Information on mortgaged assets
As of the end of the report period, details of properties mortgaged by the Company to loan from the bank and closing net value of those
properties are shown below:
Owner of property Name of property Closing net value Remarks
Shenzhen SEG Co., Ltd. 4F, SEG Plaza 46,120,804.67 Mortgaged to loan from the bank
Shenzhen SEG Co., Ltd. Some floors of Contemporary 53,344,450.80 Mortgaged to loan from the bank
Window
181
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Owner of property Name of property Closing net value Remarks
Shenzhen SEG Co., Ltd. 31F, Stars Plaza 9,480,414.61 Mortgaged to loan from the bank
Shenzhen SEG Co., Ltd. Other houses 1,903,760.90 Mortgaged to loan from the bank
Total 110,849,430.98
2. Contingencies
(1) Contingencies on the balance sheet date
Contingencies arising from pending litigation or arbitration and financial impacts
In March 2013, Nanning SEG leased the house located on 1F and 2F of podium building of Nanning Zhidi Square at 158
East Renmin Road, Xingning District, Nanning as the electronics market. The agreed term of tenancy is from March 18,
2013 to March 17, 2025. Due to a large area of water seepage and leaking existing with the house leased, Nanning SEG
lodged a lawsuit at Xingning District People's Court after negotiation with Haiqi Company for several times with no
solution achieved. As Nanning SEG failed to pay the rental and breached the contract, Nanning SEG was also accused by
Haiqi Company at the same court.
On June 28, 2016, the lawsuit was dismissed by Nanning Xingning District People's Court in the (2015) X. M. Y. C. Zi.
Civil Judgment No. 1590. In the (2015) X. M. Y. C. Zi. Civil Judgment No. 1393, RMB 12,000,000 was involved in the
case, and the Company decided not to file an appeal. The Company accrued the estimated liabilities RMB 7,000,000 for
the case in 2015. Nanning SEG has estimated the rental payable RMB 2,300,000. According to the judgment, the
Company additionally accrued the compensation RMB 2,700,000 based on the possible payable. As of the end of the
report, the Company has recognized the accumulative estimated liabilities RMB 9,700,000.
(2) If the Company has no significant matters or contingencies to disclose, the Company shall also indicate it.
The Company has no significant matters or contingencies to disclose.
XIII. Other significant matters
1. Others
(I) Purchase of financial products with idle funds
On the second shareholders meeting held on July 21, 2014, the Proposal on Purchase of Financial Products Using Idle
Funds of the Company was passed, which allows the Company and its subsidiaries to invest and manage wealth by using
idle funds of no more than RMB 1,000,000,000. The general meeting of the Company approves that the general manager
of the Company to can make decisions on special projects and the management of the Company executes such decisions.
The investment period is from the date of resolution to June 30, 2016 (calculated since the time when the financial
product is purchased).
As of June 30, 2016, the amount of financial products purchased by the Company and its subsidiaries is as follows:
Unit: ten thousand Yuan
Wujiang SEG Shenzhen SEG Baohua Xi'an Hairong SEG
Shenzhen SEG Co., Wuxi SEG Electronics
Company name Electronics Market Enterprise Electronics Market
Ltd. Market Co., Ltd
Management Co., Ltd. Development Co., Ltd. Co., Ltd.
Amount 3,800.00 1,100.00 8,000.00 920.00 2,050.00
Continued:
182
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Unit: ten thousand Yuan
Shenzhen SEG
Nantong SEG Times
Changsha SEG Nanjing Electronics Xi'an Electronics
Company name Plaza Management Total
Development Co., Ltd. Market Management Market Co., Ltd.
Co., Ltd.
Co., Ltd.
Amount 550.00 320.00 1,900.00 100.00 18,740.00
XIV. Notes to the parent company financial statements
1. Accounts receivable
(1) Accounts receivable disclosed by type
Unit: Yuan
Closing balance Opening balance
Class Book balance Bad debt provision Book Book balance Bad debt provision Book
Amount Percentage Amount Percentage value Amount Percentage Amount Percentage value
Accounts receivable
with an
insignificant
amount
8,869,182.88 100.00% 8,869,182.88 100.00% 8,869,182.88 100.00% 8,869,182.88 100.00%
individually, for
which bad debt
provision is
separately accrued
Total 8,869,182.88 100.00% 8,869,182.88 100.00% 8,869,182.88 100.00% 8,869,182.88 100.00%
Accounts receivable with a significant amount individually, for which bad debt provision is separately accrued at the end of period:
□ Applicable √ Not applicable
Accounts receivable in the combination, for which bad debt provision was accrued by the aging analysis method:
□ Applicable √ Not applicable
Accounts receivable in a combination, for which bad debt provisions are made using the Percentage of Total Accounts Receivable
Outstanding method
□ Applicable √ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
(2) Current accrued, recovered or reversed bad debt provision
The amount of the current accrued bad debt provision is RMB 0.00 Yuan and the amount of the current recovered or reversed bad debt
provision is RMB 0.00 Yuan.
(3) Accounts receivable with top 5 closing balance collected based on arrears party
Percentage in the total amount
Name of company Closing balance Accrued bad debt provision
of accounts receivable
Jiangsu Unicom 3,092,011.09 34.86 3,092,011.09
Shenzhen Liyuanshun Industrial Co., Ltd. 1,906,865.35 21.50 1,906,865.35
Shanghai Tianci Industrial Co., Ltd. 899,000.00 10.14 899,000.00
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Percentage in the total amount
Name of company Closing balance Accrued bad debt provision
of accounts receivable
Zhejiang Financial Information Co., Ltd 786,000.00 8.86 786,000.00
Sichuan Huiyuan Electronics Co., Ltd. 480,000.00 5.41 480,000.00
Total 7,163,876.44 80.77 7,163,876.44
2. Other receivables
(1) Other receivables disclosed by type
Unit: Yuan
Closing balance Opening balance
Class Book balance Bad debt provision Book balance Bad debt provision Book
Book value
Amount Percentage Amount Percentage Amount Percentage Amount Percentage value
Other
receivables
with single
8,530,276. 8,530,276. 8,530,276.
significant 1.26% 33.32% 0.00 8,530,276.35 1.43% 100.00%
35 35 35
amount and
single bad debt
provision
Other
receivables
with bad debt
provision 652,725,6 652,724,52 570,672,790. 570,671,61
96.23% 1,173.47 95.71% 1,173.47 0.00%
accrued based 98.74 5.27 85 7.38
on credit risk
feature
combinations
Other
receivables
with an
insignificant
amount 17,070,35 17,070,353 17,070,353.0 17,070,353
2.52% 66.68% 0.00 2.86% 100.00%
individually, 3.09 .09 9 .09
for which bad
debt provision
is separately
accrued
678,326,3 25,601,802 652,724,52 596,273,420. 25,601,802 570,671,61
Total 100.00% 100.00% 100.00% 4.29%
28.18 .91 5.27 29 .91 7.38
Other receivables with a significant amount individually, for which bad debt provision is separately accrued
√ Applicable □ Not applicable
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Unit: Yuan
Other receivables (by Closing balance
company) Other receivables Bad debt provision Percentage Reason for provision
Yangjiang Yuntong Grease Unable to be recovered for
8,530,276.35 8,530,276.35 100.00%
Co., Ltd. aging of over 5 years
Total 8,530,276.35 8,530,276.35 - -
Among the combinations, accounts receivable for which bad debt provision is computed by aging method:
√ Applicable □ Not applicable
Unit: Yuan
Closing balance
Aging
Other receivables Bad debt provision Percentage
Sub-item within 1 year
Within 1 year 3,256,969.01
Subtotal of accounts aged under 1
3,256,969.01
year
1-2 years 23,469.34 1,173.47 5.00%
Total 3,280,438.35 1,173.47 0.04%
Note to basis for confirming the combination:
Other receivables in a combination, for which bad debt provisions are made using the Percentage of Total Receivables Outstanding method
□ Applicable √ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
□ Applicable √ Not applicable
(2) Accrued, recovered or reversed bad debt provision in the current period
The amount of the current accrued bad debt provision is RMB 0.00 Yuan and the amount of the current recovered or reversed bad debt
provision is RMB 0.00 Yuan.
(3) Classification of other receivables by nature
Unit: Yuan
Nature of receivables Period-end book balance Period-end book balance
Receivables of related parties 649,445,260.39 568,166,228.80
Creditor's right transfer cost 23,583,862.58 23,583,862.58
Imprest 498,989.14 579,868.64
Deposit and security deposit 1,726,559.79 1,446,667.78
Others 3,071,656.28 2,496,792.49
Total 678,326,328.18 596,273,420.29
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(4) Other receivables with top 5 closing balance collected based on arrears party
Unit: Yuan
Percentage in the total
Closing balance of bad
Name of company Nature of payables Closing balance Aging amount of closing balance
debt provision
of other receivables
Nantong SEG Times
Square Development Loans and interests 587,120,832.26 Within 3 year 86.55%
Co., Ltd.
Shenzhen SEG
Industrial Investment Loans and interests 47,088,490.03 Within 5 year 6.94%
Co., Ltd.
Suzhou SEG Digital
Plaza Management Co., Current account 10,000,000.00 Within 1 year 1.47%
Ltd.
Yangjiang Yuntong Debt restructuring of
8,530,276.35 Over 5 years 1.26% 8,530,276.35
Grease Co., Ltd. SEG Orient
Shenzhen Lianjing Creditor's incomings
1,668,343.74 Over 5 years 0.25%
Trade Co., Ltd. and outgoings
Total - 654,407,942.38 - 96.47% 8,530,276.35
3. Long-term equity investment
Unit: Yuan
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment in
279,983,526.24 279,983,526.24 269,983,526.24 269,983,526.24
subsidiaries
Investment in
cooperative
189,295,871.13 189,295,871.13 185,122,573.88 185,122,573.88
enterprises and
joint ventures
Total 469,279,397.37 0.00 469,279,397.37 455,106,100.12 455,106,100.12
(1) Investment in subsidiaries
Unit: Yuan
Accrued Closing balance of
Increase in the Decrease in the
Investee Opening balance Closing balance impairment impairment
current period current period
provision provision
Shenzhen SEG Baohua
Enterprise Development 20,512,499.04 20,512,499.04
Co., Ltd.
Shenzhen SEG Industrial
29,181,027.20 29,181,027.20
Investment Co., Ltd.
Changsha SEG 69,000,000.00 69,000,000.00
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Accrued Closing balance of
Increase in the Decrease in the
Investee Opening balance Closing balance impairment impairment
current period current period
provision provision
Development Co., Ltd.
Shenzhen SEG Electronics
Market Management Co., 2,100,000.00 2,100,000.00
Ltd.
Suzhou SEG Electronics
Market Management Co., 1,350,000.00 1,350,000.00
Ltd.
Xi'an SEG Electronics
1,950,000.00 1,950,000.00
Market Co., Ltd.
Shenzhen SEG Credit Co.,
54,000,000.00 54,000,000.00
Ltd.
Shenzhen SEG
15,300,000.00 15,300,000.00
E-Commerce Co., Ltd.
Shenzhen SEG Nanjing
Electronics Market 20,000,000.00 20,000,000.00
Management Co., Ltd.
Xi'an Hairong SEG
Electronics Market Co., 1,530,000.00 1,530,000.00
Ltd.
Wujiang SEG Electronics
Market Management Co., 1,530,000.00 1,530,000.00
Ltd.
Wuxi SEG Electronics
1,530,000.00 1,530,000.00
Market Co., Ltd
Foshan Shunde SEG
Electronics Market 6,000,000.00 6,000,000.00
Management Co., Ltd.
Nanning SEG Electronics
Market Management Co., 8,000,000.00 8,000,000.00
Ltd.
Nantong SEG Times
Square Development Co., 30,000,000.00 30,000,000.00
Ltd.
Suzhou SEG Digital Plaza
8,000,000.00 8,000,000.00
Management Co., Ltd.
Suzhou SEG Intelligent
10,000,000.00 10,000,000.00
Technology Co., Ltd.
Total 269,983,526.24 10,000,000.00 279,983,526.24
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(2) Investment in cooperative enterprises and joint ventures
Unit: Yuan
Increase/Decrease of the year
Investment
Closing
gains and
Opening Adjustment of Issued Closing balance of
Investee losses Other Accrued
balance Additional Negative other cash balance impairment
confirmed equity impairment Others
investment investment comprehensive dividends provision
under the changes provision
income or profits
equity
method
1. Cooperative enterprise
2. Associate
Shanghai SEG
Electronics Market
3,379,412.81 -111,608.08 3,267,804.73
Management Co.,
Ltd.
Shenzhen Huakong
181,743,161.07 -4,715,142.77 48.10 177,028,066.40
SEG Co., Ltd.
Shenzhen
International
Consumer
9,000,000.00 9,000,000.00
Electronics
Exhibition/Exchange
Center Co., Ltd.
Subtotal 185,122,573.88 9,000,000.00 0.00 -4,826,750.85 48.10 189,295,871.13
Total 185,122,573.88 9,000,000.00 0.00 -4,826,750.85 48.10 189,295,871.13
4. Operating income and operating cost
Unit: Yuan
Amount incurred in the current period Amount incurred in the previous period
Item
Income Cost Income Cost
Main business 51,626,681.87 36,890,488.44 66,577,264.42 44,695,244.80
Total 51,626,681.87 36,890,488.44 66,577,264.42 44,695,244.80
5. Investment income
Unit: Yuan
Item Amount incurred in the current period Amount incurred in the previous period
Long-term equity investment income by the cost
-4,826,750.85 -4,892,855.94
method
Long-term equity investment income by the
32,747,355.51 22,060,280.00
equity method
Income from disposal of held-to-maturity 750,000.00
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Item Amount incurred in the current period Amount incurred in the previous period
investments
Others 17,841,726.10 19,701,657.06
Total 45,762,330.76 37,619,081.12
XV. Supplemental information
1. Details on non-recurring gains and losses
√ Applicable □ Not applicable
Unit: Yuan
Item Amount Remarks
Gains and losses from disposal of non-current assets -9,316.22 Disposal loss of fixed assets
The main purpose is to obtain the special reward
Government subsidies included in current gains and
for the service industry from Suzhou Wujiang
losses (except those closely related with corporate
101,608.00 Finance Bureau and SEG e-commerce platform
business and enjoyed according to national standards
support fund from Shenzhen Economy, Trade, and
or certain quota)
Information Commission
Including: Additional accrual of the litigation
Other non-operating income and expenses except the
-2,432,788.76 compensation expenditure RMB 2,700,000 and
above-mentioned items
income from merchant compensation
Less: Amount of affected income tax -629,774.56
Influenced amount of minority shareholders' equity 129,466.63
Total -1,840,189.05 -
An explanation shall be made with regard to the Company's considerations for defining non-recurring profit and loss according to the
Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profit
and Loss and the reason of classifying the non-recurring profit and loss listed in this announcement as recurring.
□ Applicable √ Not applicable
2. Return on equity and earnings per share
Earnings per share
Profit in the report period Weighted average ROE
Basic EPS (Yuan/Share) Diluted EPS (Yuan/Share)
Net profit attributable to common shareholders of the
0.0342
Company 1.82 0.0342
Net profit attributable to common shareholders of the
Company after deduction of -recurring losses and 0.0366
1.94 0.0366
gains
3. Differences in accounting data under Chinese and overseas accounting standards
(1) Differences of net profit and net assets in this financial report calculated based on international and Chinese
accounting standards
□ Applicable √ Not applicable
(2) Differences of net profit and net assets in this financial report calculated based on overseas and Chinese
accounting standards
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□ Applicable √ Not applicable
(3) Explanation for differences shall be given. If the Company modifies the data audited by a foreign auditing
institution, the name of the foreign institution shall be indicated.
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Chapter 10 Documents Available for Reference
(1) The Financial Statements with signatures and seals of the legal person, the responsible person of accounting work and the responsible
person of the accounting institution; and
(2) The original copies of all the files and the manuscripts of public notices of the Company which were disclosed on the newspapers
specified by CSRC in the report period.
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