2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. Shenzhen SEG Co., Ltd.
2016 Semi-Annual Financial Reports
August 2016
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. I. Auditor's report
Is the semi-annual report audited?
□ Yes√ No
The Semi-Annual Report of the Company has not been audited.
II. Financial statements
Unit: RMB Yuan.
1. Consolidated Balance Sheet Statement
Prepared by: Shenzhen SEG Co., Ltd.
June 30, 2016
Unit: Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|143,304,754.16|276,863,429.10|
|Deposit reservation for balance|||
|Loans to other banks|40,000,000.00|40,000,000.00|
|Financial assets measured by fair value with|||
|changes included in current gains and losses|||
|Derivative financial assets|||
|Notes receivable|||
|Accounts receivable|79,456,363.98|98,212,422.87|
|Advances|89,712,712.41|129,044,887.26|
|Premiums receivable|||
|Reinsurance accounts receivable|||
|Reinsurance deposit receivable|||
|Interest receivable|||
|Dividends receivable|||
|Other receivables|46,250,769.24|27,352,784.33|
|Redemptory monetary capital for resale|||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Inventory|568,759,249.94|450,809,934.72|
|Held-for-sale assets|||
|Non-current assets due within one year|||
|Other current assets|236,291,113.24|339,430,419.74|
|Total current assets|1,203,774,962.97|1,361,713,878.02|
|Non-current assets:|||
|Loans and advances issued|505,950,062.08|475,520,822.08|
|Financial assets available for sale|34,384,017.93|34,539,973.24|
|Held-to-maturity investment|||
|Long-term receivables|||
|Long-term equity investment|189,295,871.13|185,122,573.88|
|Investment properties|434,510,747.94|443,851,726.40|
|Fixed assets|36,910,218.56|37,524,425.25|
|Construction in progress||140,810.00|
|Engineering materials|||
|Disposal of fixed assets|4,577.55||
|Productive biological assets|||
|Oil & gas assets|||
|Intangible assets|977,176.99|1,143,762.11|
|Development expenses|||
|Goodwill|10,328,927.82|10,328,927.82|
|Long-term expenses to be amortized|52,277,089.32|49,235,999.86|
|Deferred income tax assets|10,433,814.57|10,433,814.57|
|Other non-current assets|848,593.64|5,103,811.14|
|Total non-current assets|1,275,921,097.53|1,252,946,646.35|
|Total assets|2,479,696,060.50|2,614,660,524.37|
|Current liabilities:|||
|Short-term borrowing|311,438,652.00|367,759,630.48|
|Loans from central bank|||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deposits from customers and interbank|||
|Loans from other banks|||
|Financial liabilities measured by fair value with|||
|changes included in current gains and losses|||
|Derivative financial liabilities|||
|Notes payable|||
|Accounts payable|24,526,663.69|89,908,781.98|
|Advances from customers|155,307,062.02|190,430,121.05|
|Financial assets sold for repurchase|||
|Service charges and commissions payable|||
|Payroll payable|7,529,491.72|21,849,134.16|
|Taxes payable|24,265,012.33|34,645,030.07|
|Interest payable|698,717.58|516,758.34|
|Dividends payable|18,966,398.39|2,218,224.58|
|Other payables|227,540,409.09|194,329,885.69|
|Reinsurance accounts payable|||
|Insurance deposit|||
|Customer brokerage deposits|||
|Securities underwriting brokerage deposits|||
|Held-for-sale liabilities|||
|Non-current liabilities due within one year|||
|Other current liabilities|||
|Total current liabilities|770,272,406.82|901,657,566.35|
|Non-current liabilities:|||
|Long-term borrowing|||
|Bonds payable|||
|Preferred stock|||
|Perpetual capital securities|||
|Long-term payables|||
|Payroll payable|||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Special payables|||
|Estimated liabilities|9,700,000.00|7,000,000.00|
|Deferred income|9,598,486.65|9,634,114.77|
|Deferred income tax liabilities|15,430,650.70|16,024,102.35|
|Other non-current liabilities|||
|Total non-current liabilities|34,729,137.35|32,658,217.12|
|Total liabilities|805,001,544.17|934,315,783.47|
|Owners' equity:|||
|Share capital|784,799,010.00|784,799,010.00|
|Other equity instruments|||
|Preferred stock|||
|Perpetual capital securities|||
|Capital reserve|506,553,643.41|506,545,831.11|
|Less: Treasury shares|||
|Other comprehensive income|248,834.30|326,662.48|
|Special reserve|||
|Surplus reserve|109,922,336.87|109,922,336.87|
|General risk provision|||
|Undistributed profits|76,719,244.65|73,532,388.70|
|Total owners' equity attributable to the parent|||
||1,478,243,069.23|1,475,126,229.16|
|company|||
|Minority shareholders' equity|196,451,447.10|205,218,511.74|
|Total owners' equity|1,674,694,516.33|1,680,344,740.90|
|Total liabilities and owners' equity|2,479,696,060.50|2,614,660,524.37|

 Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong 2. Balance Sheet Statement of the Parent Company
Unit: Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current assets:|||
|Monetary funds|59,736,832.79|186,369,470.58|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Financial assets measured by fair value with|||
|changes included in current gains and losses|||
|Derivative financial assets|||
|Notes receivable|||
|Accounts receivable|||
|Advances|101,760.00|418,544.10|
|Interest receivable|||
|Dividends receivable|24,259,680.00||
|Other receivables|652,724,525.27|570,671,617.38|
|Inventory|747,902.23|112,715.50|
|Held-for-sale assets|||
|Non-current assets due within one year|||
|Other current assets|386,000,000.00|393,166,401.54|
|Total current assets|1,123,570,700.29|1,150,738,749.10|
|Non-current assets:|||
|Financial assets available for sale|33,515,392.83|33,515,392.83|
|Held-to-maturity investment|||
|Long-term receivables|||
|Long-term equity investment|469,279,397.37|455,106,100.12|
|Investment properties|279,140,304.72|284,399,860.14|
|Fixed assets|19,358,807.19|19,458,584.25|
|Construction in progress||140,810.00|
|Engineering materials|||
|Disposal of fixed assets|4,577.55||
|Productive biological assets|||
|Oil & gas assets|||
|Intangible assets|523,881.18|622,054.24|
|Development expenses|||
|Goodwill|||
|Long-term expenses to be amortized|7,798,575.53|7,000,181.66|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deferred income tax assets|8,242,045.89|8,242,045.89|
|Other non-current assets|||
|Total non-current assets|817,862,982.26|808,485,029.13|
|Total assets|1,941,433,682.55|1,959,223,778.23|
|Current liabilities:|||
|Short-term borrowing|290,000,000.00|315,000,000.00|
|Financial liabilities measured by fair value with|||
||0.00||
|changes included in current gains and losses|||
|Derivative financial liabilities|0.00||
|Notes payable|0.00|0.00|
|Accounts payable|79,596.00|36,075.52|
|Advances from customers|22,875,183.88|42,704,620.99|
|Payroll payable|2,701,632.12|13,652,201.42|
|Taxes payable|12,214,863.56|10,033,418.41|
|Interest payable|0.00|477,402.78|
|Dividends payable|119,803.29|119,803.29|
|Other payables|98,655,804.06|95,119,560.37|
|Held-for-sale liabilities|0.00||
|Non-current liabilities due within one year|0.00|0.00|
|Other current liabilities|0.00|0.00|
|Total current liabilities|426,646,882.91|477,143,082.78|
|Non-current liabilities:|||
|Long-term borrowing|0.00|0.00|
|Bonds payable|0.00|0.00|
|Preferred stock|0.00|0.00|
|Perpetual capital securities|0.00|0.00|
|Long-term payables|0.00|0.00|
|Payroll payable|0.00|0.00|
|Special payables|0.00|0.00|
|Estimated liabilities|9,700,000.00|7,000,000.00|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deferred income|9,500,000.00|9,500,000.00|
|Deferred income tax liabilities|0.00|0.00|
|Other non-current liabilities|||
|Total non-current liabilities|19,200,000.00|16,500,000.00|
|Total liabilities|445,846,882.91|493,643,082.78|
|Owners' equity:|||
|Share capital|784,799,010.00|784,799,010.00|
|Other equity instruments|0.00|0.00|
|Preferred stock|0.00|0.00|
|Perpetual capital securities|0.00|0.00|
|Capital reserve|507,781,650.13|507,773,837.83|
|Less: Treasury shares|0.00|0.00|
|Other comprehensive income|48.10|0.00|
|Special reserve|0.00|0.00|
|Surplus reserve|109,922,336.87|109,922,336.87|
|Undistributed profits|93,083,754.54|63,085,510.75|
|Total owners' equity|1,495,586,799.64|1,465,580,695.45|
|Total liabilities and owners' equity|1,941,433,682.55|1,959,223,778.23|

 Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong 3. Consolidated Profit Statement
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|I. Total operating revenue|412,250,832.76|425,219,054.09|
|Including: Operating revenue|362,673,236.85|374,555,135.61|
|Interest income|47,373,095.91|47,553,384.48|
|Earned premiums|0.00||
|Service charges and commissions income|2,204,500.00|3,110,534.00|
|II. Total operating cost|344,919,889.29|358,714,002.72|
|Including: Operating cost|320,996,877.99|317,303,931.44|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Interest expenses|465,888.89|3,159,048.64|
|Commissions|0.00||
|Surrender value|0.00||
|Net compensation pay-outs|0.00||
|Net insurance deposit accrued|0.00||
|Insurance dividends|0.00||
|Reinsurance expenses|0.00||
|Operating tax and surcharges|10,129,674.14|13,748,030.14|
|Sale expenses|818,331.16|941,405.12|
|Management expenses|15,716,402.51|16,004,563.26|
|Financial cost|755,340.12|843,057.23|
|Loss from asset impairment|-3,962,625.52|6,713,966.89|
|Income from change of fair value (enter "-" for|||
||0.00||
|loss)|||
|Income from investment (enter "-" for loss)|1,266,453.02|5,451,963.64|
|Including: Income from investment in joint|||
||-4,826,750.85|-4,892,855.94|
|ventures or associates|||
|Income from exchange (enter "-" for loss)|0.00||
|III. Operating profit (enter "-" for loss)|68,597,396.49|71,957,015.01|
|Add: Non-operating revenue|418,388.36|1,045,979.11|
|Including: Gains on disposal of non-current|||
||0.00|18,693.10|
|assets|||
|Less: Non-operating expenses|2,758,885.34|815,788.94|
|Including: Loss from disposal of non-current|||
||9,316.22|196,424.21|
|assets|||
|IV. Total profit (enter "-" for total loss)|66,256,899.51|72,187,205.18|
|Less: Income tax|22,038,716.72|20,121,370.92|
|V. Net profit (enter "-" for net loss)|44,218,182.79|52,065,834.26|
|Net profit attributable to owners of the parent|||
||26,856,270.42|34,906,133.61|
|company|||
|Profit and loss of minority shareholders|17,361,912.37|17,159,700.65|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|VI. Net of tax of other comprehensive incomes|-116,918.38|316,765.26|
|Total owners' net of tax of other comprehensive|||
||-77,828.18|210,902.31|
|income attributable to the parent company|||
|1. Other comprehensive income not to be|||
|reclassified into gains and losses|||
|(1) Changes of net liabilities or net assets of the|||
|re-measured defined benefit plans|||
|(2) Shares of the investee of other|||
|comprehensive income not to be reclassified|||
|into gains and losses under the equity method|||
|2. Other comprehensive income to be|||
||-77,828.18|210,902.31|
|reclassified into gains and losses|||
|(1) Shares of the investee of other|||
||48.10||
|comprehensive income to be reclassified into|||
|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|||
||0.00||
|gains and losses from the available-for-sale|||
|financial assets|||
|(4) Effective gains or loss from cash flows|0.00||
|5. Foreign currency translation differences|0.00||
|(6) Others|0.00||
|Net of tax of other comprehensive income|||
||-39,090.20|105,862.95|
|attributable to minority shareholders|||
|VII. Total comprehensive income|44,101,264.41|52,382,599.52|
|Total comprehensive income attributable to|||
||26,778,442.24|35,117,035.92|
|shareholders of the parent company|||
|Total comprehensive income attributable to|||
||17,322,822.17|17,265,563.60|
|minority shareholders|||
|VIII. Earnings per share|||
|1. Basic earnings per share|0.0342|0.0445|
|2. Diluted earnings per share|0.0342|0.0445|

During the merger of the enterprises under the control of a same entity in the report period, the net profit of the acquired party realized before the
merger was: RMB 0.00 Yuan, and net profit of the purchased party realized before the merger in the previous period was: RMB 0.00 Yuan.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong 4. Profit Statement of the Parent Company
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|I. Operating revenue|51,626,681.87|66,577,264.42|
|Less: Operating cost|36,890,488.44|44,695,244.80|
|Operating tax and surcharges|2,004,366.35|3,724,403.75|
|Sale expenses|||
|Management expenses|6,516,831.79|6,176,205.10|
|Financial cost|-13,065,151.38|-7,698,774.31|
|Loss from asset impairment||-400,000.00|
|Income from change of fair value (enter "-" for|||
|loss)|||
|Income from investment (enter "-" for loss)|45,762,330.76|37,619,081.12|
|Including: Income from investment in joint|||
||-4,826,750.85|-4,892,855.94|
|ventures and associates|||
|II. Operating profit (enter "-" for loss)|65,042,477.43|57,699,266.20|
|Add: Non-operating revenue|7,300.00|214,230.19|
|Including: Gains on disposal of non-current|||
|assets|||
|Less: Non-operating expenses|2,707,915.25|21,350.50|
|Including: Loss from disposal of non-current|||
||7,915.25|4,100.50|
|assets|||
|III. Total profit (enter "-" for total loss)|62,341,862.18|57,892,145.89|
|Less: Income tax|8,674,203.92|10,111,975.20|
|V. Net profit (enter "-" for net loss)|53,667,658.26|47,780,170.69|
|V. Net of tax of other comprehensive incomes|48.10||
|1. Other comprehensive income not to be|||
|reclassified into gains and losses|||
|(1) Changes of net liabilities or net assets of the|||
|re-measured defined benefit plans|||
|(2) Shares of the investee of other|||
|comprehensive income not to be reclassified|||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|into gains and losses under the equity method|||
|2. Other comprehensive income to be|||
||48.10||
|reclassified into gains and losses|||
|(1) Shares of the investee of other|||
||48.10||
|comprehensive income to be reclassified into|||
|gains and losses under the equity method|||
|(2) Gains and losses from changes of fair value|||
|of the available-for-sale financial assets|||
|(3) Held-to-maturity investments categorized as|||
|gains and losses from the available-for-sale|||
|financial assets|||
|(4) Effective gains or loss from cash flows|||
|(5) Foreign currency translation differences|||
|(6) Others|||
|VI. Total comprehensive income|53,667,706.36|47,780,170.69|
|VII. Earnings per share|||
|1. Basic earnings per share|||
|2. Diluted earnings per share|||

Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong 5. Consolidated Cash Flow Statement
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|I. Cash flow from operating activities:|||
|Cash received from sales of goods and|||
||480,116,657.74|713,661,591.72|
|rendering of services|||
|Net increase in deposits from customers and|||
||0.00||
|interbank|||
|Net increase in loans from central bank|0.00||
|Net increase in borrowing from other financial|||
||0.00||
|institutions|||
|Cash received from premiums of primary|||
||0.00||
|insurance contracts|||
|Net cash received from reinsurance business|0.00||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Net increase in deposits from policyholders and|||
||0.00||
|investment|||
|Net increase in financial assets measured by|||
||0.00||
|fair value with changes included in current|||
|gains and losses|||
|Cash received from interest and commissions|49,594,029.07|48,000,243.60|
|Net increase in loans from other banks|0.00||
|Net increase in redemption capital|0.00||
|Tax refunds|76,897,672.19|88,433,998.57|
|Other cash received related to operating|||
||111,085,187.92|230,075,360.61|
|activities|||
|Subtotal of cash inflow from operating|||
||717,693,546.92|1,080,171,194.50|
|activities|||
|Cash paid for goods and service|553,514,232.23|824,078,559.71|
|Net increase in loans to customers and|||
||34,265,000.00|48,372,311.47|
|advances|||
|Net increase in deposits with central bank and|||
||0.00||
|interbank|||
|Cash paid for compensation pay-outs of|||
||0.00||
|primary insurance contracts|||
|Cash paid for interest, service charges, and|||
||24,273.94|24,453.96|
|commissions|||
|Cash paid as insurance dividends|0.00||
|Cash paid to and on behalf of employees|56,950,190.52|51,910,984.07|
|Taxes paid|58,072,566.51|62,553,032.06|
|Other cash paid related to operating activities|114,181,312.12|191,819,686.85|
|Subtotal of cash outflow in operating activities|817,007,575.32|1,178,759,028.12|
|Net cash flow from operating activities|-99,314,028.40|-98,587,833.62|
|II. Cash flows from investment activities:|||
|Cash received from withdrawal of investment|434,200,000.00|1,318,877,729.90|
|Cash received from investment income|6,093,203.87|10,137,874.16|
|Net cash received from disposal of fixed assets,|||
||10,000.00|28,493.50|
|intangible assets and other long-term assets|||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Net cash received from disposal of subsidiaries|||
||0.00||
|and other business units|||
|Other cash received related to investment|||
||0.00||
|activities|||
|Subtotal of cash inflow from investment|||
||440,303,203.87|1,329,044,097.56|
|activities|||
|Cash paid for purchase and construction of|||
||3,992,387.70|9,058,685.65|
|fixed assets, intangible assets and other|||
|long-term assets|||
|Cash paid for investment|371,804,260.00|1,243,610,000.00|
|Net increase in mortgage loans|0.00||
|Net cash paid for acquisition of subsidiaries and|||
||0.00||
|other business units|||
|Other cash paid related to investment activities|0.00||
|Subtotal of cash outflow in investment|||
||375,796,647.70|1,252,668,685.65|
|activities|||
|Net cash flow from investment activities|64,506,556.17|76,375,411.91|
|III. Cash flow from financing activities:|||
|Cash received by absorbing investment|0.00||
|Including: Cash received by subsidiaries from|||
||0.00||
|investment of minority shareholders|||
|Borrowings received|230,220,000.00|295,000,000.00|
|Cash received from bond issue|0.00||
|Other cash received related to financing|||
||7,812.30||
|activities|||
|Subtotal of cash inflow from financing|||
||230,227,812.30|295,000,000.00|
|activities|||
|Cash repayments of amounts borrowed|286,540,978.48|409,246,687.38|
|Cash paid for dividend and profit distribution or|||
||39,573,361.82|31,895,839.49|
|interest payment|||
|Including: Dividends and profit paid by|||
||8,280,567.52|10,728,693.04|
|subsidiaries to minority shareholders|||
|Other cash paid related to financing activities|1,524,692.51|58,429,722.92|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Subtotal of cash outflow in financing activities|327,639,032.81|499,572,249.79|
|Net cash flow arising from financing activities|-97,411,220.51|-204,572,249.79|
|IV. Influence of exchange rate fluctuation on|||
||17.80|1.27|
|cash and cash equivalents|||
|V. Net increase in cash and cash equivalents|-132,218,674.94|-226,784,670.23|
|Add: Opening balance of cash and cash|||
||275,523,429.10|382,056,680.70|
|equivalents|||
|VI. Closing balance of cash and cash|||
||143,304,754.16|155,272,010.47|
|equivalents|||

Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong 6. Cash Flow Statement of the Parent Company
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|I. Cash flow from operating activities:|||
|Cash received from sales of goods and|||
||45,134,847.16|46,077,293.80|
|rendering of services|||
|Tax refunds|||
|Other cash received related to operating|||
||55,639,989.51|134,093,553.11|
|activities|||
|Subtotal of cash inflow from operating|||
||100,774,836.67|180,170,846.91|
|activities|||
|Cash paid for goods and service|32,266,487.97|27,279,852.92|
|Cash paid to and on behalf of employees|23,691,555.31|18,281,258.17|
|Taxes paid|15,076,625.42|27,836,566.09|
|Other cash paid related to operating activities|113,721,306.86|224,334,962.62|
|Subtotal of cash outflow in operating activities|184,755,975.56|297,732,639.80|
|Net cash flow from operating activities|-83,981,138.89|-117,561,792.89|
|II. Cash flows from investment activities:|||
|Cash received from withdrawal of investment|543,000,000.00|1,258,100,000.00|
|Cash received from investment income|26,512,734.94|41,546,585.40|
|Net cash received from disposal of fixed assets,|||
||10,000.00||
|intangible assets and other long-term assets|||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Net cash received from disposal of subsidiaries|||
|and other business units|||
|Other cash received related to investment|||
|activities|||
|Subtotal of cash inflow from investment|||
||569,522,734.94|1,299,646,585.40|
|activities|||
|Cash paid for purchase and construction of|||
|||251,207.00|
|fixed assets, intangible assets and other|||
|long-term assets|||
|Cash paid for investment|555,000,000.00|1,160,600,000.00|
|Net cash paid for acquisition of subsidiaries and|||
|other business units|||
|Other cash paid related to investment activities|||
|Subtotal of cash outflow in investment|||
||555,000,000.00|1,160,851,207.00|
|activities|||
||14,522,734.94||
|Net cash flow from investment activities||138,795,378.40|
|III. Cash flow from financing activities:|||
|Cash received by absorbing investment|||
|Borrowings received|190,000,000.00|215,000,000.00|
|Cash received from bond issue|||
|Other cash received related to financing|||
||7,812.30||
|activities|||
|Subtotal of cash inflow from financing|||
||190,007,812.30|215,000,000.00|
|activities|||
|Cash repayments of amounts borrowed|215,000,000.00|350,000,000.00|
|Cash paid for dividend and profit distribution or|||
||32,182,063.94|20,043,250.00|
|interest payment|||
|Other cash paid related to financing activities|||
|Subtotal of cash outflow in financing activities|247,182,063.94|370,043,250.00|
|Net cash flow arising from financing activities|-57,174,251.64|-155,043,250.00|
|IV. Influence of exchange rate fluctuation on|||
||17.80|1.27|
|cash and cash equivalents|||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|V. Net increase in cash and cash equivalents|-126,632,637.79|-133,809,663.22|
|Add: Opening balance of cash and cashequivalents|||
||186,369,470.58|204,395,253.65|
|VI. Closing balance of cash and cashequivalents|||
||59,736,832.79|70,585,590.43|

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|||||||||||||
|||Other equity instruments||||||||||Minority|Total|
|Item||||||||||||||
|||||||Less:|Other|||General||||
||Share||||Capital|||Special|Surplus||Undistributed|shareholders'|owners'|
||||Perpetual|||||||||||
|||Preferred||||Treasury|comprehensive|||risk||||
|||||||||||||equity|equity|
||capital|||Others|reserve|||reserve|reserve||profits|||
||||capital|||||||||||
|||||||shares|income|||provision||||
|||Shares||||||||||||
||||securities|||||||||||
|I. Closing||||||||||||||
||784,799,||||506,545,||||109,922,|||205,218,511.7|1,680,344,|
||||||||326,662.48||||73,532,388.70|||
|balance of the||||||||||||||
||010.00||||831.11||||336.87|||4|740.90|
|previous year||||||||||||||
|Plus: Change of||||||||||||||
|accounting||||||||||||||
|policies||||||||||||||
|Correction to||||||||||||||
|errors of the||||||||||||||
|previous period||||||||||||||
|Merger of||||||||||||||
|enterprises||||||||||||||
|under common||||||||||||||
|control||||||||||||||
|Others||||||||||||||
|II. Opening||||||||||||||
||784,799,||||506,545,||||109,922,|||205,218,511.7|1,680,344,|
||||||||326,662.48||||73,532,388.70|||
|balance of the||||||||||||||
||010.00||||831.11||||336.87|||4|740.90|
|current year||||||||||||||
|III. Increase and||||||||||||||
||||||||||||||-5,650,224|
|decrease of the|||||7,812.30||-77,828.18||||3,186,855.95|-8,767,064.64||
|current year|||||||||||||.57|
|(enter "-" for||||||||||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||||
||Owners' equity attributable to the parent company|||||||||||||
|||Other equity instruments||||||||||Minority|Total|
|Item||||||||||||||
|||||||Less:|Other|||General||||
||Share||||Capital|||Special|Surplus||Undistributed|shareholders'|owners'|
||||Perpetual|||||||||||
|||Preferred||||Treasury|comprehensive|||risk||||
|||||||||||||equity|equity|
||capital|||Others|reserve|||reserve|reserve||profits|||
||||capital|||||||||||
|||||||shares|income|||provision||||
|||Shares||||||||||||
||||securities|||||||||||
|decrease)||||||||||||||
|1. Total||||||||||||||
|||||||||||||17,322,822.1|44,101,26|
||||||||-77,828.18||||26,856,270.42|||
|comprehensive||||||||||||||
|||||||||||||7|4.41|
|income||||||||||||||
|2. Capital||||||||||||||
|invested or||||||||||||||
|decreased by||||||||||||||
|owners||||||||||||||
|(1) Ordinary||||||||||||||
|shares invested||||||||||||||
|by the||||||||||||||
|shareholders||||||||||||||
|(2) Capitals||||||||||||||
|invested by||||||||||||||
|other equity||||||||||||||
|instrument||||||||||||||
|holders||||||||||||||
|(3) Amount of||||||||||||||
|share-based||||||||||||||
|payment||||||||||||||
|included in||||||||||||||
|owners' equity||||||||||||||
|(4) Others||||||||||||||
|3. Profit||||||||||||-26,089,886.8|-49,759,30|
||||||||||||-23,669,414.47|||
|distribution||||||||||||1|1.28|
|(1) Accrual of||||||||||||||
|surplus public||||||||||||||
|reserve||||||||||||||
|(2) Accrual of||||||||||||||
|general risk||||||||||||||
|provision||||||||||||||
|(3) Amount||||||||||||-26,089,886.8|-49,759,30|
||||||||||||-23,669,414.47|||
|distributed to||||||||||||1|1.28|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||||
||Owners' equity attributable to the parent company|||||||||||||
|||Other equity instruments||||||||||Minority|Total|
|Item||||||||||||||
|||||||Less:|Other|||General||||
||Share||||Capital|||Special|Surplus||Undistributed|shareholders'|owners'|
||||Perpetual|||||||||||
|||Preferred||||Treasury|comprehensive|||risk||||
|||||||||||||equity|equity|
||capital|||Others|reserve|||reserve|reserve||profits|||
||||capital|||||||||||
|||||||shares|income|||provision||||
|||Shares||||||||||||
||||securities|||||||||||
|owners (or||||||||||||||
|shareholders)||||||||||||||
|(4) Others||||||||||||||
|4. Internal||||||||||||||
|carrying||||||||||||||
|forward of||||||||||||||
|owners' equity||||||||||||||
|(1) Capital||||||||||||||
|reserve||||||||||||||
|transferred to||||||||||||||
|increase capital||||||||||||||
|(or share||||||||||||||
|capital)||||||||||||||
|(2) Surplus||||||||||||||
|public reserve||||||||||||||
|transferred to||||||||||||||
|increase capital||||||||||||||
|(or share||||||||||||||
|capital)||||||||||||||
|(3) Surplus||||||||||||||
|public reserve||||||||||||||
|compensating||||||||||||||
|losses||||||||||||||
|(4) Others||||||||||||||
|5. Special||||||||||||||
|reserve||||||||||||||
|(1) Accrual of||||||||||||||
|the current year||||||||||||||
|(2) Amount||||||||||||||
|utilized in the||||||||||||||
|current period||||||||||||||
|6. Others|||||7,812.30||||||||7,812.30|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||||
||Owners' equity attributable to the parent company|||||||||||||
|||Other equity instruments||||||||||Minority|Total|
|Item||||||||||||||
|||||||Less:|Other|||General||||
||Share||||Capital|||Special|Surplus||Undistributed|shareholders'|owners'|
||||Perpetual|||||||||||
|||Preferred||||Treasury|comprehensive|||risk||||
|||||||||||||equity|equity|
||capital|||Others|reserve|||reserve|reserve||profits|||
||||capital|||||||||||
|||||||shares|income|||provision||||
|||Shares||||||||||||
||||securities|||||||||||
|IV. Closing|||||||||||||1,674,694,516.33|
||784,799,||||506,553,||||109,922,|||196,451,447.||
||||||||248,834.30||||76,719,244.65|||
|balance of the||||||||||||||
||010.00||||643.41||||336.87|||10||
|current period||||||||||||||

Amount of the previous year
Unit: Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Previous period|||||||||||||
||Owners' equity attributable to the parent company|||||||||||||
|||Other equity instruments||||||||||Minority|Total|
|Item||||||||||||||
|||||||Less:|Other|||General||||
||Share||||Capital|||Special|Surplus||Undistributed|shareholders'|owners'|
||||Perpetual|||||||||||
|||Preferred||||Treasury|comprehensive|||risk||||
|||||||||||||equity|equity|
||capital|||Others|reserve|||reserve|reserve||profits|||
||||capital|||||||||||
|||||||shares|income|||provision||||
|||Shares||||||||||||
||||securities|||||||||||
|I. Closing||||||||||||||
||784,799,||||404,727,||||102,912,|||196,398,356.7|1,495,369,|
||||||||231,817.05||||6,299,799.41|||
|balance of the||||||||||||||
||010.00||||257.72||||835.67|||6|076.61|
|previous year||||||||||||||
|Plus: Change of||||||||||||||
|accounting||||||||||||||
|policies||||||||||||||
|Correction to||||||||||||||
|errors of the||||||||||||||
|previous period||||||||||||||
|Merger of||||||||||||||
|enterprises||||||||||||||
|under common||||||||||||||
|control||||||||||||||
|Others||||||||||||||
|II. Opening||||||||||||||
||784,799,||||404,727,||||102,912,|||196,398,356.7|1,495,369,|
||||||||231,817.05||||6,299,799.41|||
|balance of the||||||||||||||
||010.00||||257.72||||835.67|||6|076.61|
|current year||||||||||||||
|III. Increase and||||||||||||||
||||||101,816,||||||||141,545,1|
|decrease of the|||||||210,902.31||||34,906,133.61|4,611,870.56||
|current year|||||219.19||||||||25.67|
|(enter "-" for||||||||||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Previous period|||||||||||||
||Owners' equity attributable to the parent company|||||||||||||
|||Other equity instruments||||||||||Minority|Total|
|Item||||||||||||||
|||||||Less:|Other|||General||||
||Share||||Capital|||Special|Surplus||Undistributed|shareholders'|owners'|
||||Perpetual|||||||||||
|||Preferred||||Treasury|comprehensive|||risk||||
|||||||||||||equity|equity|
||capital|||Others|reserve|||reserve|reserve||profits|||
||||capital|||||||||||
|||||||shares|income|||provision||||
|||Shares||||||||||||
||||securities|||||||||||
|decrease)||||||||||||||
|1. Total||||||||||||||
||||||||||||||52,382,59|
||||||||210,902.31||||34,906,133.61|17,265,563.60||
|comprehensive||||||||||||||
||||||||||||||9.52|
|income||||||||||||||
|2. Capital||||||||||||||
|invested or||||||||||||||
|decreased by||||||||||||||
|owners||||||||||||||
|(1) Ordinary||||||||||||||
|shares invested||||||||||||||
|by the||||||||||||||
|shareholders||||||||||||||
|(2) Capitals||||||||||||||
|invested by||||||||||||||
|other equity||||||||||||||
|instrument||||||||||||||
|holders||||||||||||||
|(3) Amount of||||||||||||||
|share-based||||||||||||||
|payment||||||||||||||
|included in||||||||||||||
|owners' equity||||||||||||||
|(4) Others||||||||||||||
|3. Profit||||||||||||-12,653,693.0|-12,653,69|
|distribution||||||||||||4|3.04|
|(1) Accrual of||||||||||||||
|surplus public||||||||||||||
|reserve||||||||||||||
|(2) Accrual of||||||||||||||
|general risk||||||||||||||
|provision||||||||||||||
|(3) Amount||||||||||||-12,653,693.0|-12,653,69|
|distributed to||||||||||||4|3.04|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Previous period|||||||||||||
||Owners' equity attributable to the parent company|||||||||||||
|||Other equity instruments||||||||||Minority|Total|
|Item||||||||||||||
|||||||Less:|Other|||General||||
||Share||||Capital|||Special|Surplus||Undistributed|shareholders'|owners'|
||||Perpetual|||||||||||
|||Preferred||||Treasury|comprehensive|||risk||||
|||||||||||||equity|equity|
||capital|||Others|reserve|||reserve|reserve||profits|||
||||capital|||||||||||
|||||||shares|income|||provision||||
|||Shares||||||||||||
||||securities|||||||||||
|owners (or||||||||||||||
|shareholders)||||||||||||||
|(4) Others||||||||||||||
|4. Internal||||||||||||||
|carrying||||||||||||||
|forward of||||||||||||||
|owners' equity||||||||||||||
|(1) Capital||||||||||||||
|reserve||||||||||||||
|transferred to||||||||||||||
|increase capital||||||||||||||
|(or share||||||||||||||
|capital)||||||||||||||
|(2) Surplus||||||||||||||
|public reserve||||||||||||||
|transferred to||||||||||||||
|increase capital||||||||||||||
|(or share||||||||||||||
|capital)||||||||||||||
|(3) Surplus||||||||||||||
|public reserve||||||||||||||
|compensating||||||||||||||
|losses||||||||||||||
|(4) Others||||||||||||||
|5. Special||||||||||||||
|reserve||||||||||||||
|(1) Accrual of||||||||||||||
|the current year||||||||||||||
|(2) Amount||||||||||||||
|utilized in the||||||||||||||
|current period||||||||||||||
||||||101,816,||||||||101,816,2|
|6. Others||||||||||||||
||||||219.19||||||||19.19|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Previous period|||||||||||||
||Owners' equity attributable to the parent company|||||||||||||
|||Other equity instruments||||||||||Minority|Total|
|Item||||||||||||||
|||||||Less:|Other|||General||||
||Share||||Capital|||Special|Surplus||Undistributed|shareholders'|owners'|
||||Perpetual|Others||||||||||
|||Preferred||||Treasury|comprehensive|||risk||||
|||||||||||||equity|equity|
||capital||||reserve|||reserve|reserve||profits|||
||||capital|||||||||||
|||||||shares|income|||provision||||
|||Shares||||||||||||
||||securities|||||||||||
|IV. Closing||||||||||||||
||784,799,||||506,543,||||102,912,|||201,010,227.3|1,636,914,|
||||||||442,719.36||||41,205,933.02|||
|balance of the||||||||||||||
||010.00||||476.91||||835.67|||2|202.28|
|current period||||||||||||||

Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong 8. Statement on Changes of Owners' Equity of the Parent Company
Amount incurred in the current period
Unit: Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||
|||Other equity instruments||||||||||
|||||||Less:|Other|||||
|Item||||||||||||
|||||||||Special||Undistributed|Total owners'|
||||Perpetual|||||||||
||Share capital||||Capital reserve||||Surplus reserve|||
|||Preferred||||Treasury|comprehensive|||||
|||||Others||||reserve||profits|equity|
||||capital|||||||||
|||||||shares|income|||||
|||Shares||||||||||
||||securities|||||||||
|I. Closing balance of||||||||||||
||784,799,010.00||||507,773,837.83||||109,922,336.87|63,085,510.75|1,465,580,695.45|
|the previous year||||||||||||
|Plus: Change of||||||||||||
|accounting policies||||||||||||
|Correction to errors of||||||||||||
|the previous period||||||||||||
|Others||||||||||||
|II. Opening balance of||||||||||||
||784,799,010.00||||507,773,837.83||||109,922,336.87|63,085,510.75|1,465,580,695.45|
|the current year||||||||||||
|III. Increase and||||||||||||
|decrease of the||||||||||||
||||||7,812.30||48.10|||29,998,243.79|30,006,104.19|
|current year (enter "-"||||||||||||
|for decrease)||||||||||||
|1. Total||||||||||||
||||||||48.10|||53,667,658.26|53,667,706.36|
|comprehensive||||||||||||
|income||||||||||||
|2. Capital invested or||||||||||||
|decreased by owners||||||||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||
|||Other equity instruments||||||||||
|||||||Less:|Other|||||
|Item||||||||||||
|||||||||Special||Undistributed|Total owners'|
||||Perpetual|||||||||
||Share capital||||Capital reserve||||Surplus reserve|||
|||Preferred||||Treasury|comprehensive|||||
|||||Others||||reserve||profits|equity|
||||capital|||||||||
|||||||shares|income|||||
|||Shares||||||||||
||||securities|||||||||
|(1) Ordinary shares||||||||||||
|invested by the||||||||||||
|shareholders||||||||||||
|(2) Capitals invested||||||||||||
|by other equity||||||||||||
|instrument holders||||||||||||
|(3) Amount of||||||||||||
|share-based payment||||||||||||
|included in owners'||||||||||||
|equity||||||||||||
|(4) Others||||||||||||
|3. Profit distribution||||||||||-23,669,414.47|-23,669,414.47|
|(1) Accrual of surplus||||||||||||
|public reserve||||||||||||
|(2) Amount||||||||||||
|||||||||||-23,669,414.47|-23,669,414.47|
|distributed to owners||||||||||||
|(or shareholders)||||||||||||
|(3) Others||||||||||||
|4. Internal carrying||||||||||||
|forward of owners'||||||||||||
|equity||||||||||||
|(1) Capital reserve||||||||||||
|transferred to increase||||||||||||
|capital (or share||||||||||||
|capital)||||||||||||
|(2) Surplus public||||||||||||
|reserve transferred to||||||||||||
|increase capital (or||||||||||||
|share capital)||||||||||||
|(3) Surplus public||||||||||||
|reserve compensating||||||||||||
|losses||||||||||||
|(4) Others||||||||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Current period|||||||||||
|||Other equity instruments||||||||||
|||||||Less:|Other|||||
|Item||||||||||||
|||||||||Special||Undistributed|Total owners'|
||||Perpetual|||||||||
||Share capital||||Capital reserve||||Surplus reserve|||
|||Preferred||||Treasury|comprehensive|||||
|||||Others||||reserve||profits|equity|
||||capital|||||||||
|||||||shares|income|||||
|||Shares||||||||||
||||securities|||||||||
|5. Special reserve||||||||||||
|(1) Accrual of the||||||||||||
|current year||||||||||||
|(2) Amount utilized in||||||||||||
|the current period||||||||||||
|6. Others|||||7,812.30||||||7,812.30|
|IV. Closing balance of|||||||||||1,495,586,799.64|
||784,799,010.00||||507,781,650.13||48.10||109,922,336.87|93,083,754.54||
|the current period||||||||||||

Amount of the previous year
Unit: Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Previous period|||||||||||
|||Other equity instruments||||||||||
|||||||Less:|Other|||||
|Item||||||||||||
|||||||||Specialreserve||Undistributed|Total owners'|
||||Perpetual|||||||||
||Share capital||||Capital reserve||||Surplus reserve|||
|||Preferred||||Treasury|comprehensive|||||
|||||Others||||||profits|equity|
||||capital|||||||||
|||||||shares|income|||||
|||Shares||||||||||
||||securities|||||||||
|I. Closing balance of||||||||||||
||784,799,010.00||||405,955,264.44||||102,912,835.67|-22,209,989.62|1,271,457,120.49|
|the previous year||||||||||||
|Plus: Change of||||||||||||
|accounting policies||||||||||||
|Correction to errors||||||||||||
|of the previous period||||||||||||
|Others||||||||||||
|II. Opening balance||||||||||||
||784,799,010.00||||405,955,264.44||||102,912,835.67|-22,209,989.62|1,271,457,120.49|
|of the current year||||||||||||
|III. Increase and||||||||||||
|decrease of the||||||||||||
||||||101,816,219.19|||||47,780,170.69|149,596,389.88|
|current year (enter "-"||||||||||||
|for decrease)||||||||||||
|1. Total||||||||||||
|||||||||||47,780,170.69|47,780,170.69|
|comprehensive||||||||||||
|income||||||||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Previous period|||||||||||
|||Other equity instruments||||||||||
|||||||Less:|Other|||||
|Item||||||||||||
|||||||||Special||Undistributed|Total owners'|
||||Perpetual|||||||||
||Share capital||||Capital reserve||||Surplus reserve|||
|||Preferred||||Treasury|comprehensive|||||
|||||Others||||reserve||profits|equity|
||||capital|||||||||
|||||||shares|income|||||
|||Shares||||||||||
||||securities|||||||||
|2. Capital invested or||||||||||||
|decreased by owners||||||||||||
|(1) Ordinary shares||||||||||||
|invested by the||||||||||||
|shareholders||||||||||||
|(2) Capitals invested||||||||||||
|by other equity||||||||||||
|instrument holders||||||||||||
|(3) Amount of||||||||||||
|share-based payment||||||||||||
|included in owners'||||||||||||
|equity||||||||||||
|(4) Others||||||||||||
|3. Profit distribution||||||||||||
|(1) Accrual of surplus||||||||||||
|public reserve||||||||||||
|(2) Amount||||||||||||
|distributed to owners||||||||||||
|(or shareholders)||||||||||||
|(3) Others||||||||||||
|4. Internal carrying||||||||||||
|forward of owners'||||||||||||
|equity||||||||||||
|(1) Capital reserve||||||||||||
|transferred to||||||||||||
|increase capital (or||||||||||||
|share capital)||||||||||||
|(2) Surplus public||||||||||||
|reserve transferred to||||||||||||
|increase capital (or||||||||||||
|share capital)||||||||||||
|(3) Surplus public||||||||||||
|reserve compensating||||||||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Previous period|||||||||||
|||Other equity instruments||||||||||
|||||||Less:|Other|||||
|Item||||||||||||
|||||||||Special||Undistributed|Total owners'|
||||Perpetual|||||||||
||Share capital||||Capital reserve||||Surplus reserve|||
|||Preferred||||Treasury|comprehensive|||||
|||||Others||||reserve||profits|equity|
||||capital|||||||||
|||||||shares|income|||||
|||Shares||||||||||
||||securities|||||||||
|losses||||||||||||
|(4) Others||||||||||||
|5. Special reserve||||||||||||
|(1) Accrual of the||||||||||||
|current year||||||||||||
|(2) Amount utilized||||||||||||
|in the current period||||||||||||
|6. Others|||||101,816,219.19||||||101,816,219.19|
|IV. Closing balance||||||||||||
||784,799,010.00||||507,771,483.63||||102,912,835.67|25,570,181.07|1,421,053,510.37|
|of the current period||||||||||||

Legal representative: Wang Li, Person in charge of accounting: Liu Zhijun, Responsible person of the accounting institution: Ying Huadong III. Company Profile
Shenzhen SEG Co., Ltd. (hereinafter referred to as "the Company") was incorporated on July 16, 1996 through public offering with Shenzhen SEG Group Co., Ltd. as the sole initiator upon the approval of relevant departments of Shenzhen and the state in accordance with the Company Law of the People's Republic of China. With approval of the securities administration departments of Shenzhen and the state, the Company's B shares and A shares were listed and traded on Shenzhen Stock Exchange respectively in July 1996 and December 1996.
On June 7, 2006, the Company passed a resolution at the general meeting of shareholders concerning the equity division reform. According to the transfer plan of capital reserve into common shares, the Company distributed 4.6445 shares to tradable A share shareholders for each 10 shares, which totaled 40,233,322 transferred shares. As a result, its non-tradable A shares were qualified for listing and circulating. Among the converted and increased capital share obtained by the tradable A-share shareholders, 6,997,054 shares were received due to the Company's share capital expansion and the rest of 33,236,268 shares were the consideration paid to the tradable A-share shareholders by non-tradable A-share holders under fixed arrangements.
As of June 30, 2016, the total capital share of the Company amounts to 784,799,010 shares, including 26,689 restricted shares and 784,772,321 unrestricted shares. The registered capital is 784,799,010 Yuan. The registered address is 31F, Tower A, Stars Plaza, Huaqiang Road (N), Futian District, Shenzhen.
1. Business Scope
General items: Domestic commerce, goods supply and sales (excluding commodities under special operation, control and
sales), business development (specific projects shall be further declared), economic information consulting, property lease,
real estate agency, and operation of SEG special the electronics markets (the license for the special market shall be further
applied for).
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. The Company engages in business service industry, involving products and service mainly in operation and management of special the electronics markets, lease business and other tertiary industries. 22 entities are included in the current consolidated financial statements, namely:
|||||
|-|-|-|-|
|Subsidiary name|Type of subsidiary|Level|Proportion ofshareholding (%)|
|Shenzhen SEG Baohua Enterprise Development Co., Ltd.|Holding subsidiary|I|66.58|
|Shenzhen Mellow Orange Business Hotel ManagementCo., Ltd|Holding grandson company|Ⅱ|66.58|
|Shenzhen SEG Industrial Investment Co., Ltd.|Wholly-owned subsidiary|I|100.00|
|Changsha SEG Development Co., Ltd.|Holding subsidiary|I|46.00|
|Shenzhen SEG Electronics Market Management Co., Ltd.|Holding subsidiary|I|70.00|
|Suzhou SEG Electronics Market Management Co., Ltd.|Holding subsidiary|I|45.00|
|Xi'an SEG Electronics Market Co., Ltd.|Holding subsidiary|I|65.00|
|Shenzhen SEG Credit Co., Ltd.|Holding subsidiary|I|53.02|
|Shenzhen SEG E-Commerce Co., Ltd.|Holding subsidiary|I|51.00|
|Shenzhen SEG Electronics Market Management Co., Ltd.|Wholly-owned subsidiary|I|100.00|
|Xi'an Hairong SEG Electronics Market Co., Ltd.|Holding subsidiary|I|51.00|
|Wujiang SEG Electronics Market Co., Ltd.|Holding subsidiary|I|51.00|
|Wuxi SEG Electronics Market Co., Ltd|Holding subsidiary|I|51.00|
|Foshan Shunde SEG Electronics Market Management Co.,Ltd.|Wholly-owned subsidiary|I|100.00|
|Nanning SEG Electronics Market Management Co., Ltd.|Wholly-owned subsidiary|I|100.00|
|Nantong SEG Times Square Development Co., Ltd.|Wholly-owned subsidiary|I|100.00|
|Yantai SEG Times Square Development Co., Ltd.|Holding subsidiary|I|90.00|
|Nantong SEG Commercial Operation Management Co.,Ltd.|Wholly-owned subsidiary|I|100.00|
|Suzhou SEG Digital Plaza Management Co., Ltd.|Wholly-owned subsidiary|I|100.00|
|Xi'an Fengdong New Town SEG Times Square PropertiesCo., Ltd.|Wholly-owned subsidiary|I|100.00|
|Suzhou SEG Intelligent Technology Co., Ltd.|Wholly-owned subsidiary|I|100.00|
|Shenzhen SEG Longyan New Energy Application andDevelopment Co., Ltd.|Holding subsidiary|I|50.00|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. For the cause for difference between the proportion of shareholding and the proportion of voting rights and the basis for control of the invested entity even with half of voting rights or less, see "Note 8: Equities in other entities– (1) Equities in subsidiaries".
Compared with the previous period, two subsidiaries are added to entities included in the consolidated financial statements of the current period. IV. Basis of preparation of the financial statements
1. Basis of preparation
The Company has conducted confirmation and measurement based on the transactions and events that have been actually incurred and in accordance with the Accounting Standards for Business Enterprises (ASBE) and specific standards, the application guide of ASBE, the interpretation of ASBE and other relevant regulations (hereinafter collectively referred to as "the ASBE"). According to Listed Company Information Disclosure Preparation Rules No. 15 - General Regulations on Financial Report (amended in 2014) released by CSRC, the Company prepared the financial statements.
2. Sustainable operation ability
There is no concern on sustainable operation ability of the Company within 12 months since the end of the report period. V. Important accounting policies and accounting estimates
1. Statement on compliance with ASBE
The financial statements prepared by the Company comply with the requirements of the Accounting Standard for Business Enterprises and truthfully and completely reflect relevant information on the financial position, operating results, and cash flows of the Company.
2. Accounting period
A fiscal year lasts from January
1st
to December
31st
of the Gregorian calendar.
3. Recording currency
Renminbi is the recording currency of the financial statements of the Company.
4. Accounting treatment method for the merger of the enterprises under the control of a same entity and those not under the control of a same entity
i. If the terms and conditions or economic influences of deals involved in business merger by steps are consistent with the following case(s), several deals will be processed as a package deal for accounting treatment.
(1) Those deals are made at the same time or in consideration of mutual influences;
(2) A complete business result can be achieved only with the deals as integrity;
(3) The occurrence of one transaction depends on the occurrence of at least one transaction.
(4) A single deal is uneconomical but the integration with other deals is economical.
ii. Business merger under common control
Assets and liabilities acquired by the Company in the merger are calculated based on the book value of the merged party's assets and liabilities (including goodwill resulting from the acquisition of the merged party) in the consolidated financial
statements of the ultimate controlling party on the date of merger. The capital stock premium of capital reserve is adjusted
based on the difference between the book value of net assets acquired in the merger and that of the consideration of the
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. merger (or the total book value of issued shares). The retained earnings are adjusted if the capital stock premium is not sufficient for writing off.
If contingent consideration exists and the estimated liabilities and assets have to be recognized, the capital reserve (capital surplus or capital stock premium) is adjusted based on the difference between the estimated liabilities and assets and the subsequent contingent consideration. The retained earnings are adjusted if the capital reserve is not sufficient for writing off. For business merger through several deals, deals in a package will be treated as one deal with control right acquired for accounting treatment; for deals not in a package, the capital reserve is adjusted based on the difference between the initial cost of long-term equity investment and the sum of book value of long-term equity investment before merger and book value of consideration payment for new shares. The retained earnings are adjusted if the capital reserve is not sufficient for writing off. For equity investment held before merger, other comprehensive income recognized by the equity method, financial instruments or calculation standards will not be subject to accounting treatment, and until the disposal of such investment such accounting treatment is carried out on the same basis as the direct disposal of related assets and liabilities by the invested party; other changes in owners' equity excluding net profit and loss, other comprehensive income and profit distribution in the net assets of the invested party recognized by the equity accounting method will not be subject to accounting treatment and is transferred to current profit and loss after the disposal of such investment.
iii. Business merger not under common control
The assets paid and the liabilities incurred or undertaken by the Company as the consideration on the date of merger are calculated based on fair value. The difference between fair value and book value will be included in current profit and loss. If the merger cost is higher than the fair value of the net identifiable assets of the acquired party acquired by merger, the difference is recognized as goodwill. If the merger cost is lower than the fair value of the net identifiable assets of the acquired party acquired by merger, the difference is included in current profit and loss.
For business merger through several deals, deals in a package will be treated as one deal with control right acquired for accounting treatment; for deals not in a package, the sum of book value of long-term equity investment before merger and new investment cost is treated as the initial cost of long-term equity investment on the date of merger. For equity investment held before merger, other comprehensive income recognized with the equity accounting method, accounting treatment of such investment is carried out on the same basis as the direct disposal of related assets and liabilities by the invested party. If the equity investment held before merger is subject to recognition by financial instruments and accounting by measure standards, the sum of book value of long-term equity investment on the date of merger and new investment cost is treated as the initial cost of long-term equity investment on the date of merger. The difference between the fair value and book value of the equity previously held and accumulative changes in fair value originally included in other comprehensive income are transferred to the investment income of the period of the date of merger.
iv. Expenses incurred due to merger
The auditing, legal, appraisal and consulting, and other relevant direct fees incurred for business merger are included in current profit and loss at occurrence. The transaction expenses of equity securities issued for business merger which are directly attributable to equity transaction are deducted from the equity.
5. Preparation method of the consolidated financial statements
i. Consolidation scope
The scope of the consolidated financial statements of the Company is determined based on share-holding status, and all subsidiaries (including single entities controlled by the Company) are included in the scope.
ii. Consolidation procedure
The Company prepares the consolidated financial statements based on the financial statements of its own and its
subsidiaries and other related materials. In the preparation of consolidated financial statements, the whole group is deemed
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. as an accounting entity. According to the recognition, calculation and presentation requirements of related accounting standards and consistent accounting policies, the overall financial condition, operation results and cash flow are reflected. The accounting policies and accounting period adopted by all subsidiaries included in the consolidation scope are consistent with those of the Company. Otherwise, the Company shall make necessary adjustments according to its own accounting policies and accounting period when preparing the consolidated financial statements.
During the consolidation, the influences of internal transactions between the Company and its subsidiaries and among the subsidiaries on the consolidated balance sheet statement, the consolidated profit statement, the consolidated cash flow statement and the consolidated statement on changes of owner's equity will be counteracted. If judgment on the same transaction differs from the group perspective and with the Company or a subsidiary as the accounting entity, the transaction shall be adjusted from the group perspective.
The owner's equity of subsidiaries, current net profit and loss and minority shares in current comprehensive income are separately listed in the owner's equity of the consolidated balance sheet statement, net profit and total comprehensive income of the consolidated profit statement respectively. If the current losses undertaken by minority shareholders of a subsidiary exceed the owners' equity shared by minority shareholders of a subsidiary, the balance will be used to offset the minority shareholders' equity.
For a subsidiary acquired by merger of enterprises under common control, its financial statements are adjusted based on the book value of its assets and liabilities (including goodwill resulting from acquisition of this subsidiary) in the financial statements of the ultimate controlling party.
For a subsidiary acquired by merger of enterprises not under common control, its financial statements are adjusted based on the fair value of net identifiable assets on the date of acquisition.
(1) Expansion of subsidiaries or business
In case of expansion of subsidiaries or business due to merger of enterprises under common control, the opening amount of the consolidated balance sheet is adjusted in the report period. The income, expenses and profits of the subsidiaries and business from the beginning of merger to the end of the report period are included in the consolidated profit statement. The cash flow of the subsidiaries from the beginning of merger to the end of the report period is included in the consolidated cash flow statement and related items of comparative statements are also adjusted. The reporting entity after merger is deemed to exist since the ultimate controlling party starts control.
If the Company exerts control on an invested party under common control due to additional investment, it is deemed that all parties involved in merger make adjustments in the present condition since the ultimate controlling party starts control. For the equity investment held before acquisition of control right of the acquiree, relevant income and loss, other comprehensive income and other changes in net asset are recognized from the later one between the date of acquisition of the original equity and the date of the acquirer and the acquiree under common control to the date of merger, which are used to offset the opening retained earnings or current profit and loss respectively.
In the report period, in case of expansion of subsidiaries or business due to merger of enterprises not under common control, the opening amount of the consolidated balance sheet is not adjusted. The income, expenses and profits of such subsidiaries and business from the date of acquisition to the end of the report period are included in the consolidated profit statement. The cash flow of such subsidiaries from the date of acquisition to the end of the report period is included in the consolidated cash flow statement
If the Company exerts control on an invested party not under common control due to additional investment, the equity of the acquiree held before the date of acquisition shall be re-measured based on its fair value on the date of acquisition, and the difference between the fair value and book value of the equity shall be included in current investment income. If the equity of the acquiree held before the date of acquisition is involved in other comprehensive income and other changes in
owner's equity except net profit and loss, other comprehensive income and profit distribution with the equity method, the
relevant other comprehensive income and other changes in owner's equity are included in current investment income,
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. excluding other comprehensive income due to re-measurement of changes in net liabilities and net assets in defined benefit plans.
(2) Disposal of subsidiaries or business
1) General disposal method
If the Company disposes of a subsidiary in the report period, the income, expenses and profits of the subsidiary from the beginning period to the disposal date are included in the consolidated profit statement and the cash flow of the subsidiary in the same period is included in the consolidated cash flow statement.
If the Company loses control of its subsidiary due to disposal of part of equity investment or other reasons, the remaining equity shall be re-measured at fair value on the day when the Company losses control of the subsidiary. The difference between the sum of consideration acquired due to equity disposal& fair value of the remaining equity and the sum of net assets to be enjoyed based on the original shareholding proportion since the date of acquisition or merger& goodwill is included in the investment income in the period of loss of control. Other comprehensive income and other changes in owner's equity except net profit and loss, other comprehensive income and profit distribution relevant to the equity investment in any previous subsidiary are transferred to current investment income at the time of loss of control, excluding other comprehensive income due to re-measurement of changes in net liabilities and net assets in defined benefit plans. 2) Disposal of subsidiaries by steps
If the Company disposes of equity investment in a subsidiary in several deals by steps until its loss of control and the terms and conditions or economic influences of deals are consistent with the following case(s), several deals will be treated as a package deal for accounting treatment.
A. Those deals are made at the same time or in consideration of mutual influences;
B. A complete business result can be achieved only with the deals as integrity;
C. The occurrence of one deal depends on the occurrence of at least one deal.
D. A single deal is uneconomical but the integration with other deals is economical.
If deals incurred for disposal of equity investment in a subsidiary until the loss of control belong to a package deal, the Company treats all deals as one for accounting treatment. However, the difference between the consideration acquired from every disposal and the net asset to be enjoyed the said subsidiary based on such equity investment before loss of control is recognized as other comprehensive income of the consolidated financial statements and transferred to the current profit and loss at the time of loss of control.
For deals not in a package, before loss of control, the accounting treatment is based on policies about disposal of part of equity investment in a subsidiary in case of no loss of control while at the time of losing control, the accounting treatment is based on general methods for disposing of such subsidiary.
(3) Acquisition of minority shares of subsidiary
Based on the difference between long-term equity investment acquired due to acquisition of minority shares and net assets to be enjoyed from such subsidiary since the date of acquisition (or merger), the capital stock premium of the consolidated balance sheet statement is adjusted. The retained earnings are adjusted if the capital stock premium is not sufficient for writing off.
(4) Disposal of part of equity investment in a subsidiary in case of no loss of control
The difference between the consideration acquired due to disposal of party of long-term equity investment in a subsidiary and net assets to be enjoyed from such subsidiary since the date of acquisition (or merger), the capital stock premium of the consolidated balance sheet statement is adjusted. The retained earnings are adjusted if the capital stock premium is not sufficient for writing off.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. 6. Classification of joint arrangement and accounting treatment method of joint operation
i. Classification of joint arrangement
Based on the structure and legal form of joint arrangement, terms agreed in joint arrangement and other facts and condition, the Company classifies joint arrangement into joint operation and joint venture.
Joint arrangement agreed not by individual entities is defined as joint operation. Joint arrangement agreed by individual entities is generally defined as joint venture. If any joint arrangement satisfies any of the following conditions and conforms to relevant laws and regulations with conclusive evidence, such joint arrangement is defined as joint operation: (1) The legal form of joint arrangement shows that joint ventures share rights and obligations for assets and liabilities in such arrangement.
(2) It is agreed in the terms of joint arrangement that joint ventures share rights and obligations for assets and liabilities in such arrangement.
(3) Other facts and condition show that joint ventures share rights and obligations for assets and liabilities in such arrangement. For example, joint ventures enjoy nearly all output relevant to such arrangement and settlement of liabilities in such arrangement constantly depends on the support of joint ventures.
ii. Accounting treatment method of joint operation
The Company recognizes the following items in interest shares during joint operation, and carries out accounting treatment in accordance with Accounting Standards for Business Enterprises:
(1) Recognizing assets held separately and assets shared based on shares;
(2) Recognizing liabilities undertaken separately and liabilities shared based on shares;
(3) Recognizing the income from sales of the share in joint operation output;
(4) Recognizing the income from sales of joint operation output based on shares;
(5) Recognizing the expenses individually incurred and expenses incurred by joint operation based on shares.
If the Company invests or sells assets (excluding assets that constitute business) to the joint operation, before such assets are sold by the joint operation to the third party, only the part of profit and loss attributed to other parties in the joint operation incurred by such transaction is recognized. If any impairment losses occur to the assets invested or sold in accordance with Accounting Standards for Business Enterprises No. 8 - Asset Impairment, the Company recognizes the losses in full. If the Company purchases assets from the joint operation, before such assets are sold to the third party, only the part of profit and loss attributed to other parties in the joint operation incurred by such transaction is recognized. If any impairment losses occur to the assets purchased in accordance with Accounting Standards for Business Enterprises No. 8 - Asset Impairment, the Company recognizes the losses based on shares.
The Company enjoys no common control of the joint operation. If the Company enjoys assets in the joint operation and undertakes liabilities in the joint operation, the Company shall still carry out accounting treatment based on the foregoing principles. Otherwise, the Company shall carry out accounting treatment in accordance with Accounting Standards for Business Enterprises.
7. Standards for determination of cash and cash equivalents
In the preparation of the cash flow statement, the cash on hand and the bank deposits available for payment at any time of the Company are recognized as cash. The investments that meet four conditions at the same time, i.e. short term (due within 3 months since the date of purchase), strong liquidity, easiness in being converted into known cash, fairly small risk of value fluctuation are recognized as cash equivalents.
8. Foreign currency businesses and translation of the financial statements in foreign currency
Foreign currency business
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. In the initial recognition, a foreign currency business transaction is converted to RMB for bookkeeping based on the spot exchange rate at the date of transaction.
At the balance sheet date, monetary items in foreign currency are converted based on the spot exchange rate at the balance sheet date. The exchange difference thus incurred is included in current profit and loss while the exchange difference incurred by special foreign currency borrowings for acquisition and construction of assets eligible for capitalization is treated with the principle of capitalization of borrowing costs. The non-monetary items in foreign currency measured by the historical cost method are converted based on the spot exchange rate at the date of transaction, and the amount in the recording currency is not changed.
Non-monetary items in foreign currency measured by fair value are converted based on the spot exchange rate at the date of recognition of the fair value while the translation difference thus incurred is included in current profit and loss as profit and loss from changes in fair value. For non-monetary items in foreign currency available for sales, the translation difference is included in other comprehensive income.
Translation of foreign currency financial statements
In the balance sheet statement, assets and liabilities are converted based on the spot exchange rate at the date of balance sheet statement, and items other than "undistributed profits" in the owner's equity are converted based on the spot exchange rate. The income and expense in the profit statement are converted based on the spot exchange rate at the date of transaction. The translation difference of foreign currency financial statements with the foregoing method is included in other comprehensive income.
At the disposal of overseas business, the translation difference of foreign currency financial statements that is listed in other comprehensive income of the balance sheet statement and relevant to such overseas business is transferred from other comprehensive income to current profit and loss in the period of disposal. The equity proportion in overseas business is reduced due to disposal of part of equity investment or other reasons but the control right on the overseas business remains, the translation difference of foreign currency financial statements relevant to such overseas business is not transferred to current profit and loss. At the disposal of part of equity investment in overseas business in the form of a joint venture or associate, the translation difference of foreign currency financial statements relevant to such overseas business is transferred to current profit and loss in the period of disposal based on the proportion of disposal.
9. Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
i. Classification of financial instruments
According to the contract terms and economic nature of financial instruments rather than in the legal form only, in combination of the purposes of acquisition and holding of financial assets and undertaking of financial debts, the management classifies financial assets and liabilities as follows: financial assets (or liabilities) measured based on fair value with changes included in current profit and loss, held-to-maturity securities, accounts receivable, financial assets available for sales, and other financial liabilities.
ii. Confirmation basis for and measurement method of financial instruments
(1) Financial assets (liabilities) measured by fair value and with changes included in the current gains and losses Financial assets or liabilities measured by fair value with changes included in current profit and loss include transactional financial assets or liabilities and financial assets or liabilities to be measured by fair value with changes included in the current profit and loss by direct specification.
Transactional financial assets or liabilities refer to financial assets or liabilities that satisfy any of the following conditions:
1) Such financial assets or liabilities are acquired for the purpose of sales, repurchase or redemption in a short term;
2) Such financial assets or liabilities are part of identifiable financial instruments portfolio available for central management,
and objective evidence shows that the Company has recently managed the portfolio for short-term gains;
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. 3) Such financial assets or liabilities belong to derivative financial instruments, excluding the designated derivative instruments which are effective hedging instruments, derivative instruments for financial guarantee contracts, and derivative instruments that are connected with equity instrument investments for which there is no quoted price in the active market, whose fair value cannot be reliably measured, and which shall be settled by delivering the said equity instruments. Financial assets or liabilities can be measured by fair value with changes included in the current profit and loss through designation only when one of the following conditions is met.
1) Through such designation, inconsistency in recognition or measurement of profit and loss resulting from different measurement basis of financial assets or liabilities can be eliminated or obviously reduced;
2) It has been set forth in formal written documents about risk management or investment strategy that such financial asset portfolio, financial liability portfolio, or the portfolio of such financial assets or liabilities shall be managed, evaluated and reported to key management based on fair value;
3) A mixed instrument with one and several embedded derivative instrument (s), unless the embedded derivative instruments cause no major changes to the cash flow of such mixed instrument or shall not be separated from the derivative instrument (s) obviously;
4) A mixed instrument with embedded derivative instrument (s) that needs to be separated but cannot be separately measured at the time of acquisition or the subsequent balance sheet date.
The Company treats the fair value of financial assets or liabilities measured by fair value with changes included in the current profit and loss at the time of acquisition as the initial recognized amount, including relevant transaction expenses in the current profit and loss. The interests and cash dividends acquired during the period of holding are recognized as investment income. At the time of disposal, the difference between the fair value and the initial amount entered in the account is recognized as investment income and the profit and loss from changes in fair value are adjusted at the same time. (2) Accounts receivable
For credit receivable due to the commodities sold or labor services provided by the Company and credit of other enterprises held by the Company other than the credit of debt tools with quotes in an active market, including accounts receivable and other receivables, the amount receivable in contracts or agreements from the purchaser is treated as the initial recognition amount. For those of a financing nature, the current value is treated as the initial recognition amount.
At the time of collection or disposal, the difference between the amount acquired and the book value of such accounts receivable are included in the current profit and loss.
(3) Held-to-maturity investment
Held-to-maturity investment refers to non-derivative financial assets with fixed maturity date and fixed or definite collection amount which the Company may hold to maturity with clear intention and ability.
For held-to-maturity investment, the Company treats the sum of fair value at the time of acquisition (deducting bond interests matured but not collected) and relevant transaction expenses as the initial recognition amount. During the period of share-holding, the interest income is calculated and confirmed in accordance with the amortized and the actual interest rate, which is recorded into the investment income. The actual interest rate is determined at the time of acquisition and remains unchanged within the anticipated existence period or a shorter period applicable. At the time of disposal, the difference between the price of acquisition and the book value of such investment is included in investment income.
If the amount of the held-to-maturity investment disposed of or re-classified as other financial assets is larger than the total amount of all held-to-maturity investment before sale or reclassification, the remaining held-to-maturity investment shall be re-classified as available-for-sale financial assets immediately after disposal or reclassification. On the reclassification date, the difference between the book value and fair value of such investment is included in other comprehensive income, which
is transferred out at depreciation or recognition end of such available-for-sale financial assets and included in the current
profit and loss. The following cases can be excluded:
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. 1) The sale or reclassification date is close to the expiry or redemption date of such investment (for example within three months before the expiry date), and changes in interest rate have no significant impacts on the fair value of such investment. 2) The enterprise has recovered nearly all original principal with the repayment method specified in the contract. 3) Sale or reclassification arises from independent events that are beyond the control of the enterprise, expected not to recur, and hard to be predicated.
(4) Available-for -sale financial assets
Available-for -sale financial assets refer to non-derivative financial assets designated at initial recognition and financial assets other than other financial assets category.
For financial assets available for sale, the Company treats the sum of fair value at the time of acquisition (deducting bond interests matured but not collected) and relevant transaction expenses as the initial recognition amount. The interests or cash dividends obtained during the time of holding are recognized as investment income. Profit or loss from change in the fair value of financial assets available for sale but excluding impairment loss and exchange difference of monetary financial assets in foreign currency are directly included in other comprehensive incomes. At the time of disposal, the difference between the price of acquisition and the book value of such financial assets is included in investment profit and loss. At the same time, the amount of assets disposed originally included in the accumulative amount of changes in the fair value of other comprehensive income is transferred to investment profit and loss.
Equity instruments with no quotes in the active market and with fair value not reliably measured and derivative instruments that are connected with the said equity instruments and settled by delivery of the said equity instruments are measured by cost.
(5) Other financial liabilities
The sum of the fair value of such assets and relevant transaction expenses is taken as the initial recognition amount. The amortized cost is adopted in the subsequent measurement.
iii. Recognition basis and measurement method of financial assets transfer
In case of financial assets transfer of the Company, if almost all risks and returns in the ownership rights of financial assets are transferred to the assignee, the recognition of such financial assets is terminated, and if almost all risks and returns in the ownership rights of such financial assets are retained, the recognition of such financial assets is not terminated. In the judgment whether a financial asset transfer meets the foregoing conditions for termination of its recognition, the principle of more focus on substance than form is adopted. The Company divides financial assets transfer into the complete and the partial transfer. Where the complete transfer of financial assets meets the conditions for termination of recognition, the difference between the following two amounts is included in the current profit and loss.
(1) Book value of the transferred financial assets;
(1) The sum of consideration acquired due to transfer and the accumulative amount of changes in fair value originally included in owners' equity (involving the case where the transferred financial assets are the financial assets available for sale).
If the partial transfer of financial assets meet conditions for termination of recognition, the part with its recognition terminated and that with its recognition not terminated, among the book value of all the transferred financial assets, are apportioned separately based on their relevant fair value while the difference between the following two amounts is included in the current profit and loss.
(1) Book value of the part with its recognition terminated;
(2) The sum of consideration of the part with its recognition terminated and the amount of the part with its recognition terminated originally included in the accumulative amount of changes in the fair value of owners' equity (involving the case
where the transferred financial assets are the financial assets available for sale).
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. In case that financial assets transfer does not meet the conditions for termination of recognition, the recognition of such financial assets is continued. The consideration acquired is recognized as a financial liability.
iv. Conditions for termination of recognition of financial liabilities
If current obligations for a financial liability are discharged wholly or partially, the recognition of the financial liability is terminated wholly or partially. If the Company signs an agreement with the creditor to substitute an existing financial liability with a new financial liability and the contract terms about the new liability and the existing liability are inconsistent, the recognition of the existing financial liability is terminated and the new financial liability is recognized at the same time. If material alterations have been made to contract terms of the existing financial liability wholly or partially, the recognition of the existing liability is wholly or partially terminated and, in the meantime, the liability after alterations is recognized as a new financial liability.
If the confirmation of all or a part of a financial liability is terminated, the difference between the book value of the liability with its confirmation terminated and the consideration (including non-cash assets transferred or the new liability assumed) is included in current gains and losses.
If the Company repurchases part of a financial liability, the total book value of such liability is allocated on the date of purchase based on the relative fair value of the part with its recognition continued and that with its recognition terminated. The difference between the book value allocated to the part with its recognition terminated and the consideration (including non-cash assets or the new liability) is included in the current profit and loss.
v. Methods for the determination of the fair value of financial assets and liabilities
For financial assets and liabilities that exist in an active market, the Company determines their fair value based on the quotation in the active market. For financial assets initially acquired or derivative financial assets or liabilities undertaken, the Company determines their fair value based on the market price. For financial assets and liabilities that do not exist in an active market, their fair values are determined with appraisal techniques. In appraisal, the Company adopts applicable appraisal techniques in the current case with sufficient data and other information support, chooses the input values that are consistent with features of assets or liabilities taken into consideration by market participants in relevant transactions, and makes priority use of relevant observable input values. In case that relevant observable input values cannot be obtained or it is unpractical to obtain them, unobservable input values will be used.
vi. Accrual of impairment provision for financial assets (excluding accounts receivable)
The Company shall verify the book value of financial assets measured by fair value with changes included in the current profit and loss at the balance sheet date. If any objective evidence shows impairment of such financial assets, an impairment provision shall be made.
Objective evidence for impairment of such financial assets includes but is not limited to:
(1) A serious financial difficulty occurs to the issuer or debtor;
(2) The debtor breaches any contract terms, for example, fails to pay or delays the payment of interests or the principal; (3) The creditor makes any concession to the debtor which is in financial difficulties due to economic or legal factors; (4) The debtor will probably become bankrupt or carry out other financial reorganizations;
(5) The financial asset can no longer continue to be traded in the active market due to serious financial difficulties of the issuer;
(6) It is impossible to identify whether the cash flow of a certain asset within a certain combination of financial assets has decreased or not. But after an overall appraisal according to the public data available, it is found that the predicted future cash flow of the said combination of financial assets has indeed decreased since it was initially recognized and such decrease can be measured, for example, the ability of the debtor of the said combination of financial assets worsens
gradually, the unemployment rate of the country or region where the debtor is situated increases, the prices of the region
where the guaranty is situated are obviously dropping, or the industrial sector concerned is in slump;
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. (7) Any seriously disadvantageous change has occurred to technical, market, economic or legal environment wherein the issuer operates its business, which makes the investor of an equity instrument unable to withdraw its investment cost; (8) Where the fair value of the equity instrument investment drops significantly or not temporarily;
Specific impairment methods of financial assets are as follows:
(1) Impairment provision for financial assets available for sale
The Company shall appraise the impairment loss of each financial asset with the specific identification method at the balance sheet date. Where the fair value of the equity instrument investment drops significantly or not temporarily, it is an objective evidence for impairment of equity instruments available for sale. In terms of the specific quantitative criterion, if the fair value of such equity instrument investment is lower than over50% (including50%) of its cost or is lower than its cost for over 12 months (including 2 months) consecutively, it indicates that such asset is impaired.
When a financial asset available for sale is impaired, even if the recognition of the financial asset has not been terminated, the accumulative losses arising from decrease in the fair value of the owner's equity which was directly included in other comprehensive income shall be transferred out and included in the current profit and loss. The accumulative losses that are transferred out shall be the balance between the initial costs of the financial asset available for sale and the principals as taken back, the current fair value and the impairment-related losses as was included in the current profit and loss. As for the debt instruments available for sale whose impairment losses have been recognized, if, within the accounting period thereafter, the fair value has risen and such instruments are objectively related to the subsequent events that occur after the original impairment losses were recognized, the originally recognized impairment losses shall be reversed and included in the current profit and loss. The impairment loss of equity instruments available for sale shall be reversed when the value of such equity instruments rebound. However, for equity instruments investment with no quotes in the active market and with fair value not reliably measured and derivative instruments that are connected with the said equity instruments and settled by delivery of the said equity instruments, the impairment loss shall not be reversed.
(2) Impairment provision for held-to-maturity investments
If any objective evidence shows impairment of held-to-maturity investments, the impairment loss shall be calculated based on the difference between the book value of those investments and the current value of the expected future cash flow. If any evidence indicates that the investment value has recovered after provision, the originally recognized impairment loss can be reversed and included in the current profit and loss. However, the reversed book value shall not exceed the amortized cost of such financial assets at the date of reversal in case that the impairment provision has not been made.
vii. Counteraction of financial assets and liabilities
Financial assets and liabilities are separately listed in the balance sheet statement and not counteracted. However, if the following conditions are satisfied at the same time, the balance after counteraction may be listed in the balance sheet statement.
(1) The Company has the legal right to counteract the recognized amount which is currently enforceable.
(2) The Company plans to settle in net amount or realize such financial assets and liquidate such financial liabilities at the same time.
10. Accounts receivable
(1) Accounts receivable with significant single amount and single provision for bad debts
|||
|-|-|
|Criterion or amount limit for determining a significant single amount|Top five accounts receivable|
||Carry out independent impairment testing. If the current value of the|
|Accounts receivable with significant single amount and single provision||
||expected future cash flow is less than its book value, a provision shall|
|for bad liabilities|be made for the bad liabilities which will be included in the current|
||profit and loss. Accounts receivable with no impairment by test shall be|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||
|-|
|included in the bad debt provision for a certain combination.|

 (2) Other receivables with bad debt provision accrued based on credit risk feature combinations
|||
|-|-|
|Name of combination|Accrual method for making bad debts provision|
|Combination of aging analysis method|Aging analysis method|
|Combination of specific object|Other method|

Bad debt provision made using the aging analysis method
√ Applicable□ Not applicable
||||
|-|-|-|
||Provision proportion of accounts receivable|Provision proportion of other accounts|
|Aging|||
||(%)|receivable (%)|
|1-2 years|5.00%|5.00%|
|2-3 years|10.00%|10.00%|
|Over 3 years|20.00%|20.00%|

 Accounts receivable in the portfolio, for which the bad debt provision was accrued by the Percentage of Total Accounts Receivable Outstanding method.
□ Applicable√ Not applicable
Accounts receivable in the portfolio, for which the bad debt provision was accrued by other methods.
□ Applicable√ Not applicable
(3) Other receivables with an insignificant amount individually, for which bad debt provision is separately accrued
|||
|-|-|
||The reason for single provision for bad debts is that any objective|
|Reason of making bad debts provision for a single amount||
||evidence indicates that the Company is unable to recover the accounts|
||receivable according to the original terms.|
||Accrual method for bad debt provision: The difference between the|
|Accrual method for making bad debts provision||
||expected future cash flow and its book value is accrued for bad debt|
||provision.|

11. Inventory
i. Classification of inventory
Inventory refers to finished products or commodities held for sale by the Company in daily activities, products in process, and materials consumed in the production or labor service process. It mainly includes raw materials, circulating materials, commissioned processing materials, products in process, semi-finished goods, finished products (stock goods), delivered goods, development costs, product development, etc.
Development costs refer to properties not completed for sale purposes. Lands to be developed refer to the land which is purchased and planned for developed products after its completion. Developed products refer to properties which have been
completed and are to be sold. In the overall development of a project, lands to be developed are transferred to development
costs. In the development by phases, the land developed in phases is transferred to development costs while the land not
developed remains in the land to be developed.
ii. Pricing method of inventory
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. Initial measurement will be carried out at the time of acquisition of the inventory based on its costs, including procurement cost, processing cost and other costs. The pricing of the inventory is based on the weighted-average method at the time of delivery.
iii. Determination basis for net realizable value of inventory and accrual method for inventory depreciation provision After a complete check on the inventory at the end of the period, the inventory depreciation provision is accrued or adjusted based on the lower one between the inventory cost and the net realizable value. The net realizable value of commodity inventory directly for sale including finished products, stock goods and materials for sale is determined by the estimated selling price of such inventory minus estimated selling expenses and relevant taxes during production and operation. The net realizable value of material inventory to be processed is determined by the estimated selling price of the finished product minus estimated cost to be incurred until completion, estimated selling expenses and relevant taxes during production and operation. The net realizable value of inventory held for fulfilling sales contract or labor service contract is calculated based on the contract price. If quantity of inventories held is more than the ordered quantity in the sales contract, the net realizable value of the inventory for the excess part is calculated based on general selling price.
At the end of the period, the inventory depreciation provision is accrued based on separate items. However, for inventories in large quantity at low unit price, the depreciation provision is accrued based on types of inventories. For inventories that are related to product series produced and sold in the same area for same or similar final use or purpose and difficult to be measured separately from other items, inventory depreciation provision is consolidated for accrual.
Where factors that caused decrease in value of inventory disappear, the amount written down shall be recovered and written back from the accrued inventory depreciation provision. The amount written back shall be included in the current profit and loss.
iv. Inventory system
The perpetual inventory system is adopted.
v. Amortization method of low-value consumables and packages
(1) For low value consumables, the one-off amortization method is adopted.
(2) For packaging materials, the one-off amortization method is adopted
vi. Accounting method of land for development
The expenses incurred by pure land development project shall constitute the land development cost alone.
For projects with overall development of property, the expenses with definite payers are generally amortized to the cost of a commodity house based on the actual area.
vii. Accounting method of public facility expenses
For public facilities that cannot be transferred with compensation, the allocation standard is determined based on the benefit ratio and the facilities are included in the cost of the commodity house.
For public facilities that can be transferred with compensation, the supporting facilities are cost accounting objects and included in the cost incurred.
viii. Accounting method of the maintenance fund
According to local provisions of the development project, the maintenance fund is collected from the house purchaser when the developed product is sold (or pre-sold) or included in the development cost, and submitted to the maintenance fund management department.
ix. Accounting method of the warranty deposit
According to provisions in the construction contract, the warranty deposit is retained from the project fund of the
construction organization. Maintenance expenses incurred in the warranty period of a developed product can be used to
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. offset the warranty deposit. When the warranty period expires, the balance shall be returned to the construction organization.
12. Held-for-sale assets
i. Recognition standard for held-for-sale assets
The corporate integral part (or non-current asset) that satisfies the following conditions is recognized as an integral part of held-for-sale assets.
(1) The integral part must be available for sale under its current status only according to conventional terms on sale of such integral part.
(2) The enterprise has made resolutions concerning disposal of such integral part. For those requiring approval of shareholders, approval of the general meeting of shareholders or other power organs has been gained.
(3) The enterprise and the transferee have entered into an irrevocable transfer agreement.
(4) Such transfer will be completed within one year.
ii. Accounting method of held-for-sale assets
For a fixed asset held for sale, the Company adjusts the estimated net residual value of such fixed asset which reflects the balance between the fair value and disposal expense. If a fixed asset does not satisfy held-for-sale conditions, the balance between the original book value of such fixed asset and the estimated net residual value after adjustment shall be treated as asset depreciation and included in the current profit and loss. The fixed asset held for sale is not subject to accrual of depreciation or amortization, and is measured by the lower one between the book value and the result after the disposal expense is deducted from the fair value.
The foregoing method also applies to equity investment, intangible assets, and other non-current assets that satisfy held-for-sale conditions. However, deferred tax assets, financial assets regulated in the Enterprise Accounting Standard No. 22 - Financial Instrument Recognition and Measurement, investment properties and biological assets measured by the fair value, and contract rights conferred by the insurance contract are excluded.
13. Long-term equity investment
i. Determination of the investment cost
(1) For the specific accounting policy for long-term equity investment arising from business merger, see Note 4 (4) accounting method for business merger under or not under common control.
Long-term equity investment obtained in other ways
(2) The actual payment is taken as the initial investment cost of the long-term equity investment obtained by cash. The initial investment cost includes expenses, taxes, and other necessary expenditure directly related to long-term equity investment.
The fair value of the issued equity securities is taken as the initial investment cost of the long-term equity investment obtained by issue of equity securities. For issue or acquisition of the enterprise's own equity instruments that are directly attributable to equity transaction, transaction expenses are deducted from the equity.
Under the premises that the non-monetary assets exchange is of commercial nature and that the fair value of the assets received and given out in the exchange can be measured reliably, the initial investment cost of the long-term equity investment received in non-monetary assets exchange is determined on the basis of the fair value of the assets given out, unless there are definite evidences that the fair value of the received assets is more reliable. For the non-monetary assets exchange that do not meet the above premises, the book value of the received assets and relevant taxes payable is taken as
the cost of the long-term equity investment.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. The initial investment cost of the long-term equity investment obtained through debt restructuring is determined according to its fair value.
ii. Measurement after recognition and profit and loss recognition
(1) Cost method
The Company conducts accounting with the cost method for long-term equity investment controlled by the investee, enter the initial investment cost to the account book, and add or recover investment to adjust the cost of long-term equity investment.
Under equity method, the Company recognizes investment income according to the cash dividends or profits enjoyed by the Company, for which the investee declares to distribute, except the actual amount paid when investment is acquired and cash dividends and profits included in the consideration and declared but yet to be distributed.
(2) Equity method
The Company conducts accounting with the equity method for long-term equity investment of joint ventures or associates. The equity investment part of associated enterprises held indirectly via the venture capital organization, mutual fund, trust company, or similar entities including the unit-linked insurance foundation is measured by fair value and its changes are included in the profit and loss.
If the initial cost of long-term equity investment is larger than the fair value of identifiable net assets of the investee to be enjoyed by the Company at investment, the initial investment cost of the long-term equity investment is not adjusted. If the former is smaller than the latter, the difference is included in the current profit and loss.
After the Company obtains long-term equity investment, the investment income and other comprehensive income are recognized respectively based on the net profit and loss and other comprehensive income of the investee to be enjoyed by the Company, and the book value of long-term equity investment is adjusted. The part to be enjoyed by the Company is calculated based on the profit or cash dividend declared by the investee, and the book value of long-term equity investment is reduced accordingly. For other changes in owner's equity excluding net profit and loss, other comprehensive income, and profit distribution related to equity investment, the book value of long-term equity investment adjusted and included in owner's equity.
When recognizing the net profit and loss of the investee to be enjoyed, the Company shall adjust the net profit of the investee before recognition based on the fair value of identifiable net assets of the investee at investment. The unrealized profit or loss of internal transactions between the Company and the joint venture or associate is calculated based on the ratio to be enjoyed, and the part attributable to the Company is offset. The profit or loss from investment is recognized on this basis.
Where the Company recognizes the due share of the losses incurred by the investee under the equity method, the following sequence is adopted: First, the book value of the long-term equity investment is offset. Second, if the book value of the long-term equity investment is not sufficient for the offsetting, the investment loss should continue to be recognized within the limit of the book value of other long-term equity that practically constitutes net investments in the investee and the book values of long-term accounts receivable and others are offset. Finally, if the enterprise still bears additional obligations as agreed in the investment contract or agreement after the above processing, liabilities are recognized according to the anticipated obligations to be borne and included in current investment loss.
Where the investee realizes profits in the later periods, the Company should make accounting treatment in the reversed sequence against the above after deducting the shared loss not yet recognized, reduce the book balance of the recognized anticipated liabilities, restore other long-term equity that practically constitutes net investments in the investee and the book value of the long-term equity investment, and recognize investment income at the same time.
iii. Conversion of accounting methods of long-term equity investment
(1) Conversion from fair value method to equity method
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. The equity investment originally held by the Company that involves no control, common control, or significant influence over the investee is recognized based on the financial instrument and subject to accounting treatment according to accounting standards. If due to additional investment, the equity investment involves significant influence or common control rather than control over the investee, the sum of the fair value of the original equity investment calculated according to the Enterprise Accounting Standard No. 22 - Financial Instrument Recognition and Measurement and the new investment cost is treated as the original investment cost subject to accounting with the equity method.
The difference between the fair value and book value of the original equity investment (classified as the available-for-sale asset) and accumulative changes in fair value originally included in other comprehensive income are transferred to the current profit and loss subject to accounting with the equity method.
The original investment cost is less than the fair value of the identifiable net asset of the investee to be enjoyed by the Company calculated based on the new shareholding ratio after additional investment. The book value of long-term equity investment is adjusted based on the difference, and included in the current non-operating income.
(2) Conversion from fair value method or equity method to cost method
The equity investment originally held by the Company that involves no control, common control, or significant influence over the investee or long-term equity investment in joint ventures or associates is recognized based on the financial instrument and subject to accounting treatment according to accounting standards. If due to additional investment, the equity investment involves significant control over the investee not under common control, the sum of the fair value of the original equity investment calculated and the new investment cost is treated as the original investment cost subject to accounting with the cost method when the Company prepares some financial statements.
If other comprehensive income of the equity investment held before the purchase date is subject to accounting with the equity method, such investment is subject to accounting treatment on the same basis where the investee directly disposes of related assets or liabilities.
If the equity investment held before the purchase date is subject to accounting treatment according to the Enterprise Accounting Standard No. 22 - Financial Instrument Recognition and Measurement, accumulative changes in fair value originally included in other comprehensive income are transferred to the current profit and loss subject to accounting with the cost method.
(3) Conversion from equity method to fair value method
If the Company loses common control or significant influence over the investee due to disposal of partial equity investment, the residual equity after disposal is subject to accounting according to the Enterprise Accounting Standard No. 22 - Financial Instrument Recognition and Measurement. The difference between the fair value and book value on the date of loss of common control or significant influence is included in the current profit and loss.
If other comprehensive income of the original equity investment is subject to accounting with the equity method, when the equity method is abandoned, such investment is subject to accounting treatment on the same basis where the investee directly disposes of related assets or liabilities.
(4) Conversion from cost method to equity method
If the Company loses control of the investee due to disposal of partial equity investment, the residual equity after disposal with common control or significant influence over the investee is subject to accounting with the equity method, and such residual equity is deemed to have adjusted subject to the equity method upon acquisition.
(5) Conversion from cost method to fair value method
If the Company loses control on the investee due to disposal of partial equity investment, the residual equity after disposal is subject to accounting according to the Enterprise Accounting Standard No. 22 - Financial Instrument Recognition and
Measurement. The difference between the fair value and book value on the date of loss of control is included in the current
profit and loss when the Company prepares some financial statements.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. iv. Disposal of long-term equity investment
The difference between the book value and actual price of long-term equity investment is included in the current profit and loss. If long-term equity investment is subject to accounting with the equity method, the part originally included in other comprehensive income is subject to accounting treatment pro rata on the same basis where the investee directly disposes of related assets or liabilities.
If the terms and conditions or economic influences of deals involved in disposal of the equity investment in a subsidiary are consistent with the following case(s), several deals will be processed as a package deal for accounting treatment. (1) Those deals are made at the same time or in consideration of mutual influences;
(2) A complete business result can be achieved only with the deals as integrity;
(3) The occurrence of one transaction depends on the occurrence of at least one transaction.
(4) A single deal is uneconomical but the integration with other deals is economical.
If the Company loses control of a subsidiary due to disposal of partial equity investment or other reasons which does not belong to a package deal, accounting treatment of the individual financial statement and consolidated financial statement is handled through differentiation.
(1) In the individual financial statement, the difference between the book value and actual price of the equity investment disposed of is included in the current profit and loss. The residual equity after disposal with common control or significant influence over the investee is subject to accounting with the equity method, and such residual equity is deemed to have adjusted subject to the equity method upon acquisition. The residual equity after disposal without common control or significant influence over the investee is subject to accounting treatment according to the Enterprise Accounting Standard No. 22 - Financial Instrument Recognition and Measurement. The difference between the fair value and book value on the date of loss of control is included in the current profit and loss.
(2) In the consolidated financial statement, for deals before the Company loses control of a subsidiary, based on the difference between the consideration acquired due to disposal of party of long-term equity investment in a subsidiary and net assets to be enjoyed from such subsidiary since the date of acquisition or merger, the capital reserve (share premium) is adjusted. The retained earnings are adjusted if the capital reserve is not sufficient for writing off. The residual equity is re-measured based on the fair value on the date of loss of control. (Consideration received in connection with equity disposal+ Fair value of remaining equity– Net assets that are calculated based on the original shareholding proportion since the day of acquisition) shall be included in the investment income in the period when the Company loses control of the subsidiary. Other comprehensive income in connection with the subsidiary's equity investment shall be transferred the current investment income when the Company loses control of the subsidiary.
If deals incurred for disposal of equity investment in a subsidiary until the loss of control belong to a package deal, the Company treats all deals as one deal for accounting treatment. Accounting treatment of the individual financial statement and consolidated financial statement is handled through differentiation.
(1) In the individual financial statement, the difference between the consideration acquired from each disposal and the book value of long-term equity investment before loss of control is recognized as other comprehensive income and transferred to the current profit and loss at the time of loss of control.
(2) In the consolidated financial statement, the difference between the consideration acquired from each disposal and the net asset of the subsidiary to be enjoyed by the Company before loss of control is recognized as other comprehensive income and transferred to the current profit and loss at the time of loss of control.
Criteria for common control and significant influence
If the Company and the other participants jointly control an arrangement and decision-making with significant influences
over the returns of such arrangement as agreed, joint control exists only with unanimous consent from participants sharing
control. The Company and other participants shares control of the arrangement, and such arrangement is joint arrangement.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. If a joint arrangement is achieved through a single entity. If the Company has rights to the net asset of the single entity according to related agreement, the single entity is a joint venture and the equity method applies. If the Company has no rights to the net asset of the single entity according to related agreement, the single entity belongs to joint operation. The Company confirms items related to the share of interests in the joint operation and conduct accounting treatment according to provisions of the Enterprise Accounting Standard.
Significant influence refers to the case where the investor has the power to participate in financial and operating policy decisions of an investee but cannot control or jointly control of those polices). The existence of significant influence by the Company is evidenced in one or more of the following ways based on all facts and circumstances: (1) representation on the board of directors or equivalent governing body of the investee; (2) participation in the financial and operating policy-making process; (3) material transactions between the Company and the investee; (4) interchange of managerial personnel; (5) provision of essential technical information.
14. Investment properties
Measurement mode of investment properties
Measurement of cost method
Depreciation and amortization
Investment property refers to the property held for earning rental or increasing the value of capital, including the right to use of the rented land, the right to use of the land held for transfer after the value increases, and the rented building. The Company uses the cost of investment properties as entry value. The cost of purchased investment properties includes the purchase price, relevant taxes, and other expenses directly relegated to the asset. The cost of a self-built investment real estate consists of the necessary expenses for building the asset to the expected condition for use.
The Company conducts measurement after recognition to the investment properties using the cost pattern, and makes accrual depreciation or amortization for buildings and land use rights based on their expected service life and salvage value. The following table lists the expected service life, net salvage value, and annual depreciation (amortization) rate of investment properties:
||||
|-|-|-|
|Class|Expected service life|Expected salvage value|
|Houses and buildings|20-40|5%|

 When the purpose of investment properties changes to self-use, the Company shall convert the investment properties to fixed or intangible assets since the day of change. When the real estate with the right to self-use is changed for generating rents or capital appreciation, the Company shall convert fixed or intangible assets to investment properties since the day of change. The book value of the real estate prior to the conversion shall be entry value after conversion.
If investment properties are disposed of, or if they withdraw permanently from use and if no economic benefit will be obtained from the disposal, the recognition of them as investment properties shall be terminated. When an enterprise sells or transfers or discards any investment properties, or when any investment properties of an enterprise is damaged or destroyed, the enterprise shall deduct the book value of the investment properties as well as the relevant taxes from the disposal income, and include the amount in the current profit and loss.
15. Fixed assets
(1) Identification conditions
Fixed assets refer to the tangible assets held for the purpose of the manufacture of commodities, provision of labor services,
lease or operation and management with a term of use exceeding one year. Fixed assets can be identified when meeting the
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. following conditions: A. Economic interest relevant to the fixed assets is likely to flow into the enterprise; B. The cost of the fixed assets can be reliably measured.
(2) Depreciation method
||||||
|-|-|-|-|-|
|Class|Depreciation method|Depreciation life|Residual value rate|Annual depreciation rate|
|Houses and buildings|Straight-line method|20-40|5|4.75-2.38|
|Machinery equipment|Straight-line method|5-10|5|19.00-9.50|
|Electronic equipment|Straight-line method|5-10|5|19.00-9.50|
|Transportation equipment|Straight-line method|5-10|5|19.00-9.50|
|Other equipment|Straight-line method|5-10|5|19.00-9.50|

(3) Recognition basis and pricing method of the fixed assets acquired under finance leases
The Fixed assets rented by the Company can be identified as the fixed assets under financing lease when meeting one or several criteria as follows: A. When the lease term is due the proprietary of the leased property is transferred to the Company. B. The Company has the option to buy the leased asset at a price which is expected to be far lower than the fair value of the leased asset at the date when the option becomes exercisable. Thus, on the lease beginning date, it can be reasonably determined that the option will be exercised. C. Even if the ownership of the asset is not transferred, the lease term covers the major part of the useful life of the leased asset. D. The current value of the minimum lease payment that is paid by the Company on the lease beginning date amounts to substantially all of the fair value of the leased asset on the lease beginning date. E. The leased assets are of a special nature that only the Company can use them without making major modifications. The lessee shall record the smaller one of the fair value of the leased asset and the current value of the minimum lease payments on the lease beginning date as the entry value in an account, recognize the amount of the minimum lease payments as the entry in an account of long-term account payable, and treat the balance between the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges. The initial direct costs such as commissions, attorney's fees, traveling expenses and stamp duties directly attributable to the leased item incurred during the process of lease negotiating and lease contract signing shall be included in the asset value of the current period. The unrecognized financing charge shall be amortized to each period during the lease term. In calculating the depreciation of a leased asset, the Company adopts a depreciation policy for leased assets consistent with that for depreciable assets which are owned by the lessee. If it is reasonably certain that the leasee will obtain the ownership of the leased asset when the lease expires, the leased asset shall be fully depreciated over its service life. If it is not reasonably certain that the lessee will obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated over the shorter one of the lease term or its service life.
16. Construction in progress
i. Type of construction in progress
The construction in progress carried out by the Company shall be valued according to its actual cost which is composed of all necessary expenses incurred for bringing the asset to the expected conditions for use, including material costs, labor costs, relevant taxes, borrowing costs eligible for capitalization, and indirect expenses eligible for amortization. Cost accounting for the construction in progress of the Company shall be performed based on projects.
ii. Standards and time points for the construction in progress being carried forward to fixed assets
For a construction in progress, all expenses during the construction till the desired usable status of the asset is reached are
taken as the recorded value of the fixed asset. If a construction in progress has reached the desired usable status but has not
conducted final accounting, it is transferred into fixed assets when it reaches the desired usable status, according to the
estimated value based on project budget, construction cost or actual cost; in the meantime, depreciation is accrued according
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. to the Company's depreciation policies for fixed assets; when the final accounting is conducted the temporarily estimated value is adjusted according to the actual cost while the accrued depreciation amount is not adjusted.
17. Borrowing costs
i. Recognition principle of borrowing costs capitalization
Where the borrowing costs incurred by the Company can be directly attributable to the purchase, building or production of the assets that meet the conditions of capitalization, such assets are capitalized and included in relevant assets cost. Other borrowing costs are recognized as expenses according to the incurred amount at the time of occurrence and included in current profit and loss.
The assets that meet the conditions of capitalization refer to the assets such as fixed assets, investment property and inventory that can reach the anticipated usable or salable status only after a considerable time of purchase, building or production activities.
The borrowing costs may be capitalized when all of the following conditions are met:
(1) The assets expenditure has already incurred, including that incurred in the form of cash payment, non-monetary assets transfer or bearing of debts with interests for the purchase, building or production of the assets that meet the conditions of capitalization.
(2) The borrowing costs have already been incurred.
(3) The construction or production activities necessary for putting the assets into a usable or salable status have already started.
ii. Capitalization term of borrowing costs
The capitalization term refers to the period between the start time point and the end time port of the capitalization of the borrowing costs, excluding the period in which the capitalization is suspended.
Where the purchase, building or production of the assets that meet the conditions of capitalization has put such assets into the anticipated usable or salable status, the capitalization of the borrowing costs is stopped.
Where part of the projects in the purchase, building or production of the assets that meet the conditions of capitalization have been completed and reached the anticipated usable or salable status, the capitalization of the borrowing costs of such part of the assets is stopped.
Where different parts of the assets purchased, built or produced have been completed but cannot be used or sold till the whole assets have been completed, the capitalization of the borrowing costs is stopped when the whole assets are completed.
iii. Suspension period of capitalization
Where abnormal discontinuation has occurred in the purchase, building or production of the assets that meet the conditions of capitalization and the time of discontinuation exceeds three months consecutively, the capitalization of the borrowing costs is suspended. If the discontinuation is a necessary procedure in the process during which the assets purchased or produced, which meet the conditions of capitalization, reach the usable or salable status, the capitalization of the borrowing costs is continued. The borrowing costs occurring in the suspension period are recognized as current profit and loss and the capitalization is continued until the purchasing and production activities of the assets are restarted.
iv. Calculation method of the amount of borrowing costs capitalization
The interest expenses of special loans (with the interest income of the unused borrowed funds deposited in the bank or the investment income obtained from temporary investment deducted) and relevant auxiliary expenses are capitalized before the assets that meet the conditions of capitalization, purchased, built or produced with such loans, reach the anticipated usable
or salable status.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. The amount of the interests of common loans that are capitalized is calculated and determined by the weighted average of the accumulative parts of the assets expenditure exceeding special loans multiplied by the capitalization rate of common loans. The capitalization rate is determined according to the weighted average interest rate of common loans.
Where the loans involve discount or premium, the amount of discount or premium to be amortized in each accounting period is determined in accordance with the actual interest rate method and the amount of interests of each period should also be adjusted.
18. Intangible assets
(1) Method of costing, service life and devaluation test
An intangible asset refers to an identifiable non-monetary asset without physical substance which is possessed or controlled by the Company, including purchased software and land use rights.
i. Initial measurement of intangible assets
The cost of the intangible assets purchased from outside includes purchase price money, relevant taxes and other expenses incurred due to putting such assets to the anticipated use that can be directly attributed to such assets. Where the price money of the purchased intangible assets is paid on a deferred basis within a term exceeding regular credit conditions and actually of a financing nature, the cost of the intangible assets is determined on the basis of the current value of the price money in purchase.
The entry value in the account of the fixed assets obtained from debtors for the repayment of liabilities in debt restructuring is determined on the basis of the fair value of the fixed assets. The difference between the book value of debt restructuring and the fair value of the fixed assets used for the repayment of liabilities is included in the current profit and loss. Under the premises that the non-monetary assets exchange is of commercial nature and that the fair value of the assets received and given out in the exchange can be measured reliably, the initial investment cost of the long-term equity investment received in non-monetary assets exchange is determined on the basis of the fair value of the assets given out, unless there are definite evidences that the fair value of the received assets is more reliable. For the non-monetary assets exchange that do not meet the above premises, the book value of the received assets and relevant taxes payable is taken as the cost of the long-term equity investment.
The recorded value in the account of the intangible assets obtained by the merger of the enterprises under the control of a same entity is determined according to the book value of the merged party. The recorded value in the account of the intangible assets obtained by the merger of the enterprises under the control of different entities is determined according to the fair value.
The cost of the intangible assets formed through internalR&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:
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|Item|Estimated service life|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
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|Outsourced software|5|
|Land use right|50|

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 internalR&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 insideR&D projects in the research phase are included in current profit and loss when the expenses occur. i. Standards for meeting the conditions of capitalization by research phase
The expenditure in the development phase of the research and development project can be recognized as intangible assets only when all the following conditions are met:
(1) The completion of such intangible assets makes it usable or its sale technically feasible.
(2) There is an intention to complete such intangible assets and use or sell it.
(3) The way that the intangible assets generate economic interests can prove that the product using such intangible assets or the intangible assets itself have market. If the intangible assets are to be used internally, its usefulness is proved. (4) The Company has sufficient technical and financial resources and other resources to support the completion of the development of such intangible assets and the capacities to use or sell such intangible assets.
(5) The expenditure attributed to the development stage of such intangible assets can be reliably measured.
The expenditure in the development phase not meeting the preceding conditions is included in the current profit and loss when it is incurred. The development expenditure that is included in profit and loss in the previous year will not be identified as assets again in later years. The capitalized expenditure in the development phase is listed as development expenditure in the balance sheet and is converted into intangible assets from the date when it meets the expected purpose. 19. Long-term impairment of assets
The Company determines whether any sign of possible impairment exists for long-term assets on the balance sheet date. If the sign of impairment exists for long-term assets, the recoverable amount of each asset is estimated. If the recoverable amount of each assets cannot be estimated, the recoverable amount of the asset group where the asset belong is determined based on the asset group.
The recoverable amount may be determined according to the higher one of the net value of the fair value of the assets minus the disposal expenses and the current value of the anticipated future cash flow of the assets.
If the measurement result of recoverable amount indicates that the recoverable amount of a long-term asset is lower than its
book value, the book value of the long-term asset is written down to the recoverable amount. The write-down amount is
identified as asset impairment loss and is included in the current profit and loss and provision for asset impairment
provision is made. Once the impairment loss of assets is confirmed, the loss will not be reversed in later accounting periods.
At the same time, the corresponding assets impairment provision is accrued. After the recognition of assets impairment loss,
corresponding adjustments are made in the future periods on the depreciation or amortized expenses of the impaired assets
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. so that the adjusted book value of such assets (with the anticipated expected salvage value deducted) can be amortized systematically within the remaining service life.
The goodwill and intangible assets with uncertain service life, which are formed due to enterprise merger, are tested every year on whether the sign of impairment exists.
During impairment testing, the book value of goodwill can be amortized to the asset group or combination of asset groups that acquire synergistic benefit from business combination based on the proportion of benefits. When impairment test is performed for relevant asset groups or asset group combinations that include goodwill, for example, if the sign of impairment exists for asset groups or asset group combinations relevant to goodwill, the impairment test is first performed for the asset groups or asset group combinations that do not include goodwill and the recoverable amount is calculated and is compared with the relevant book value to confirm the corresponding impairment loss. Then the impairment test is first performed for the asset groups or asset group combinations that include goodwill and the book value (including the book value of amortized goodwill) of the relevant asset groups or asset group combinations is compared with the recoverable amount. If the recoverable amount of relevant asset groups or asset group combinations is lower than the book value, the impairment loss of goodwill is confirmed.
20. Long-term expenses to be apportioned
i. Method of amortization
Long-term unamortized expenses refer to the expenses that have incurred at the Company but should be born in the current period and later periods, where the amortization period is above one year. Long-term unamortized expenses shall be amortized with the straight-line method.
21. Payroll
(1) Accounting treatment method of payroll
Short-term remuneration refers to the payroll that needs to be paid completely within 12 months in the annual the report period when employees provide relevant services, excluding welfare after leave and dismissal welfare. In the accounting period when employees provide services, the Company identities short-term remuneration as liabilities and includes it in relevant asset costs and fees according to the benefit objects of services provided by employees.
(2) Accounting treatment method of welfare after leave
The welfare after leave refers to the remuneration and welfare provided by the Company for obtaining services provided by employees or for terminating the employment relationship after employees have retired, excluding short-term remuneration and dismissal welfare. The welfare plan after dismissal is classified into the defined contribution plan and the defined benefit plan.
The welfare defined contribution plan aims to join the social basic endowment insurance and unemployment insurance organized and implemented by labor and social security agencies in various regions. In addition to social basic endowment insurance and unemployment insurance, employees can join the pension plan set by the Company at their own discretion. In the accounting period when employees provide the Company with services, the amount that shall be paid and deposited shall be identified as liabilities according to the defined contribution plan and is included in the current profit and loss or relevant asset costs.
After making the preceding payment according to the national standard and pension plan, the Company shall no longer have any other payment obligation.
(3) Accounting treatment method of dismissal welfare
Dismissal welfare refers to the compensation for employees to terminate the labor relationship with employees before the
labor contracts expire or encourage employees to accept downsizing. On the earlier one between the time when the
Company cannot unilaterally withdraw the labor relationship termination plan and the time when restructuring costs and
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. expenses related to payment of dismissal welfare, the liabilities incurred due to compensation for termination of the labor relationship is recognized and included in the current profit and loss.
The Company offers early retirement welfare to employees who accept the early retirement arrangement. Early retirement welfare refers to salaries and social insurances expenses paid for employees that have not reached the statutory retirement age and are willing to retire with approval of the management of the Company. The Company offers early retirement welfare from the date of the early retirement arrangement to the date when an employee reaches the statutory retirement age. The Company shall conduct accounting treatment for early retirement welfare by referring to dismissal welfare. When recognition conditions for dismissal welfare are satisfied, salaries and social insurance premiums to be paid for employees from the date when employees retire to the statutory retirement date are recognized as liabilities and included in the current profit and loss. The difference arising from changes in actuarial assumptions of early retirement welfare and welfare standards is included in the current profit and loss at occurrence.
(4) Accounting treatment methods of other long-term employees' welfare
Other long-term employees' welfare refers to all other employees' welfare except short-term remuneration, welfare after leave and dismissal welfare.
For other long-term employees' welfare that meets conditions of the defined contribution plan, the amount that shall be paid and deposited shall be identified as liabilities in the accounting period and is included in the current profit and loss or relevant asset costs; except other long-term employees' welfare in the preceding circumstance, an independent actuary sets the welfare generated by the defined benefit plan to the period in which employees provide services by using the method of expected accumulative welfare unit and includes it in the current profit and loss or relevant asset costs.
22. Estimated liabilities
i. Recognition standards for estimated liabilities
The obligations related to contingencies, which meet all the following conditions, are recognized by the Company as estimated liabilities.
The obligation is a current obligation undertaken by the Company;
The fulfillment of the obligation is very likely to cause an outflow of economic interests from the Company;
The amount of the obligation can be measured reliably.
ii. Measurement method of estimated liabilities
Initial measurement is carried out to estimated liabilities of the Company according to the optimum estimation amount of the required expense when relevant obligations are fulfilled.
When determining the optimum estimation amount, the Company considers in a comprehensive way the factors related to contingencies like risks, uncertainties and time value of currency. Where there are great influences of time value of currency, the optimum estimation amount is determined after discounting relevant future cash flows.
The optimum estimation amount is determined according to different situations as follows:
Where there is a continuous range (or interval) of the required expense and different results in the range have same possibility to occur, the optimum estimation amount is determined according to the intermediate value of the range, i.e. the average of the maximal and the minimum amounts.
Where there is no continuous range (or interval) or there is a continuous range but different results have different possibilities to occur, if contingencies involve individual proceedings, the optimum estimation amount is the amount most likely to occur, and if contingencies involve several proceedings, the optimum estimation amount is determined according to various possible results and the calculation of relevant probabilities.
If all expenses or part of them, which are used by the Company for paying off estimated liabilities, are anticipated to be
compensated by a third party and compensation amount is basically sure to be received, the compensation amount is
recognized separately as an asset, which should not exceed the book value of the estimated liabilities.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. 23. Share-based payment
i. Types of share-based payment
The Company provides equity-settled and cash-settled share-based payment.
ii. Recognition of the fair value of equity instruments
For equity instruments such as the granted option, which exist in the active market, the fair value is recognized according to their prices in the active market. For those not existing in the active market, their fair value is recognized by using the option pricing model, which should be selected in consideration of the following factors: a. option exercise price; b. option period; c. the current price of the underlying shares; d. the predicted fluctuation rate of the share price, e. the estimated dividend of the share; f. risk free rate in the option period; g. payment of shares of installment options
When determining the grant-date fair value of equity instruments, the Company shall take into account the influence of market conditions in vesting conditions and non-vesting conditions stipulated in the share-based payment agreement. Where a share-based payment has a non-vesting condition, the Company shall recognize receipt of the corresponding service cost if employees or other parties satisfy all the non-market conditions (for example, service duration) in vesting conditions. iii. Basis of recognition of the best estimate of the number of vested equity instruments
On each balance sheet date in the vesting period, the Company shall make the best available estimate of the number of equity instruments expected to vest, and shall revise that estimate if subsequent information indicates that the number of equity instruments expected to vest differs from previous estimates. On vesting date, the Company shall revise the estimate to equal the number of equity instruments that ultimately vested.
iv. Accounting for implementation, modification and termination of share-based payment plans
The Company shall measure the equity-settled share-based payment at the fair value of the granted employee equity instruments. If the equity instruments granted vest immediately, the Company shall include the grant-date fair value of equity instruments into related cost or expense, with a corresponding increase in capital reserve. If the equity instruments granted do not vest until the counterparty completes a specified period of service or achieves a performance condition in the vesting period, the Company shall include the service obtained in the current period into related cost or expense and capital reserved by reference to the grant-date fair value of equity instruments based on the best estimate of the number of vested equity instruments on each balance sheet date during the vesting period. The Company shall not adjust the recognized cost or expense and total equity amount after the vesting date.
The case-settled share-based payment shall be measured by reference to the fair value of the Company's eligible liabilities which is calculated based on shares or other equity instruments. If the equity instruments granted vest immediately, the Company shall include the fair value of eligible liabilities in related cost or expense on the vesting date, with a corresponding increase in liabilities. For the cash-settled share-based payment where the granted options are not exercised until the counterparty completes a specified period of service or achieves a performance condition in the vesting period, the Company shall include the service obtained in the current period into related cost or expense and liabilities by reference to the grant-date fair value of liabilities, based on the best estimate of the number of vested equity instruments on each balance sheet date during the vesting period. The Company shall re-measure the fair value of its liabilities on each balance sheet date and settlement date before settlement of related liabilities, and include liability changes in the current profit and loss. v. Modifications to the terms and conditions on which equity instruments were granted
If a grant of an equity instrument is canceled during the vesting period, the Company shall account for the cancellation as an acceleration of vesting, and shall therefore include immediately the amount that would otherwise have been recognized for services received over the remainder of the vesting period in the current profit and loss, and recognize capital reserve. If employees or other parties can but fail to satisfy non-vesting conditions in the vesting period, the Company shall account for
the failure as a cancellation of the grant of the equity instrument.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. 24. Other financial instruments such as preferred stock and sustainable debt
Based on the rules of financial instruments, the Company classifies financial instruments or their components into financial liabilities or equity instruments during initial recognition according to the contact terms of financial instruments such as preferred stock and sustainable debt and economic essence they reflect rather than legal form, in combination with definitions of financial liabilities and equity instruments.
i. When one of the following conditions is met, the issued financial instrument is classified into financial liabilities: (1) Contractual obligation to deliver cash or other financial assets to other parties;
(2) Contractual obligation to exchange financial assets or financial liabilities under potential adverse conditions; (3) Non-derivative instrument contract that must or may use equity instruments of an enterprise for settlement in the future (the enterprise delivers a variable number of equity instruments according to the contract);
(4) Derivative instrument contract that must or may use equity instruments of an enterprise for settlement in the future (except derivative instrument contracts that use a fixed number of equity instruments to exchange a fixed amount of cash or other financial assets).
ii. When the following conditions are met at the same time, the issued financial instruments are classified into equity instruments:
(1) The financial instruments do not include the contractual obligation to deliver cash or other financial assets to other parties or exchange financial assets or financial liabilities under potential adverse conditions;
(2) For the financial instruments that must or may use equity instruments of an enterprise for settlement in the future, if the financial instruments are non-derivative instruments, the contractual obligation to deliver a variable number of equity instruments for settlement is not included; if the financial instruments are derivative instruments, the enterprise can only settle the financial instruments by exchanging a fixed number of equity instruments with the fixed amount of cash or other financial assets.
iii. Accounting treatment method
For financial instruments that belong to equity instruments, the interest expenditure or dividend distribution shall be used as profits of the enterprise for distribution, the buy-back and write-off are treated as changes of equity, and transaction expenses such as handling charge and commission shall be deducted from the equity.
For financial instruments that belong to financial liabilities, the interest expenditure or dividend distribution shall be treated as borrowing costs in principle, the gain or loss generated due to buy-back or redemption are included in the current profit and loss, and transaction expenses such as handling charge and commission are included in the initial amount of measurement of the issues instruments.
25. Income
i. Standards for recognition time of sales income
The realization of the income from the sale of commodities is recognized when the Company has already transferred the main risks and consideration in the ownership right of the commodities to the purchaser, the Company has not retained any further management right connected to the ownership right nor implement effective control over the sold commodities, the amount of the revenue can be reliably measured, relevant economic interests are likely to flow into the enterprise, and relevant costs incurred or to be incurred can be measured reliably.
The Company mainly runs the leasing business in the electronics market. It identifies received rental as rental income in the term of lease by using the method of line and the income of other business is identified when the risk premium is transferred according to contract provisions.
The price of a contract or agreement is collected through deferral. In the case of actual financial nature, the amount of
income from sales commodities shall be determined according to the fair value of the price of the contract or agreement.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. ii. Basis for recognition of income from transfer of asset use right
When economic interests relevant to transaction probably flow into the enterprise and the amount of income can be reliably measured, the amount of income from transfer of asset use right is determined in the following circumstances:
(1) The amount of interest income is determined according to the time and actual interest rate of other people using the monetary fund of the enterprise.
(2) The amount of the income from use fee is determined in accordance with the time and method of charges as agreed in relevant contract or agreement.
iii. Basis and method for confirmation of income from rendering of services
Where the results of the labor services provided on the balance sheet date can be estimated reliably, the income from the provision of labor services is recognized with the percentage of completion method. The completion progress of a labor service transaction is determined by surveying the work completed.
When the following conditions are met at the same time, the result of rendering of services can be reliably estimated: (1) The amount of income can be measured reliably.
(2) Relevant economic interests probably flow into the enterprise.
(3) The completion progress of transactions can be reliably determined.
(4) The costs that have been incurred or will be incurred in transactions can be reliably measured.
The total amount of the income from the provision of labor services is determined according to the price money received or receivable of a relevant contract or agreement, unless the price money received or receivable of a relevant contract or agreement is unfair. The labor services income of the current period is recognized on the balance sheet date according to the resulted amount of the total amount of income from provision of labor services times the completion percentage and deducted by the accumulative amount of the recognized income from provision of labor services in previous accounting periods. At the same time, the labor cost of the current period is carried forward according to the estimated total cost of the provision of labor services times the completion percentage and deducted by the accumulative amount of the recognized labor cost in previous accounting periods.
Where the results of the provision of labor services on the balance sheet date cannot be estimated reliably, such results are processed respectively according to the following conditions:
(1) Where it is estimated that the labor services cost incurred can be compensated, the income from provision of labor services is recognized according to the amount of the labor services cost incurred and the same amount is transferred into the labor cost.
(2) Where it is estimated that the labor services cost incurred cannot be compensated, the labor services cost incurred is included in current profit and loss and no income is recognized.
When the contracts or agreements signed between the Company and other companies include commodity sales and labor service and these two parts can be differentiated from each other and can be separately measured, commodity sales and labor service are handled separately. If they cannot be differentiated from each other or they can be differentiated from each other but cannot be separately measured, both parts will be handled as commodity sales.
iv. Basis and method for confirmation of income from construction contracts
(1) When the results of construction contracts can be reliably estimated, relevant income from contracts and costs of contracts are confirmed based on the method of completion percentage. The method of completion percentage refers to the method for confirming income from contracts and costs of contracts according to the completion progress of contracts. The completion progress of a contract is determined according to the ratio of actual accumulated cost of the contract to
estimated total costs of the contract.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. When the following conditions are met at the same time, the result of a fixed construction contract can be reliably estimated:
1) The total income from the contract can be reliably measured;
2) Economic interests relevant to the contract probably flow into the enterprise.
3) The actual costs of the contract can be clearly distinguished and reliably measured.
4) The completion progress of the contract and the costs needed for completing the contract can be reliably determined. When the following conditions are met at the same time, the result of a cost-plus contract can be reliably estimated: 1) Economic interests relevant to the contract probably flow into the enterprise.
2) The actual costs of the contract can be clearly distinguished and reliably measured.
On the balance sheet date, the amount of total contractual income multiplied by the completion progress, deducting the accumulated confirmed income in the previous accounting period, is identified as the current contractual income; the amount of estimated total contract cost multiplied by the completion progress, deducting the accumulated confirmed cost in the previous accounting period, is identified as the current costs of contract. The change of contract engineering, claim and bonus is included in the total income of contract based on the amount that may be brought and can be reliably calculated. (2) If the result of a construction contract cannot be reliably estimated, the contract is processed as follows:
1) If the contract cost can be recovered, the income from the contract is identified according to the actual recovered contract cost and the contract cost is identified as the current costs of contract.
2) If the contract cost cannot be recovered, the cost is immediately identified as the costs of contract in the current period when the cost is incurred and the income from the contract is not identified.
(3) If the total cost of contract probably exceeds the total income from the contract, the expected loss is immediately identified as costs.
v. Transfer of the assets with repurchase conditions
If the Company signs a repurchase agreement when selling products or transferring other assets, whether the products sold meet the conditions for income recognition is judged according to the articles of the agreement. If the repurchase is a financing transaction, the Company does not recognize sales income when delivering products or assets. If the repurchase price is higher than the selling price, interests are accrued for the difference during repurchase period and included in financial expenses.
26. Government subsidies
(1) Basis for determining government subsidies relevant to assets and accounting treatment methods
The government subsidies relevant to assets are identified as deferred income and are included in non-operating income according to the service life of the built or purchased assets.
(2) Basis for determining government subsidies relevant to income and accounting treatment methods
The government subsidies that are related to income and are used to compensate for relevant expenses or losses in later periods are identified as deferred income when they are obtained; the subsidies used to compensate for relevant expenses or losses that have been incurred are identified as the current non-operating income when they are obtained.
When identified government subsidies need to be returned and the balance of relevant deferred income exists, the book balance of relevant deferred income is offset and the excess part is included in the current profit and loss; when relevant deferred income does not exist, the government subsidies are directly included in the current profit and loss.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. 27. Deferred income tax assets and liabilities
Deferred income tax assets and liabilities are calculated and identified according to the difference (temporary difference) between the taxable basis of the assets and liabilities and their book value. On the balance sheet date, deferred income tax assets and liabilities are measured based on the tax rate applicable to the period when the assets are expected to be recovered or the liabilities are expected to be paid off.
i. Basis for the recognition of deferred incomes tax assets
The Company confirms the deferred income tax assets generated due to deductible temporary difference based on the amount of taxable income that is probably obtained to deduct deductible temporary difference and can carry over deductible loss and tax deduction. However, the deferred income tax assets generated due to initial confirmation of assets or liabilities in a transaction that has the following features at the same time: (1) the transaction is not business merger; (2) the transaction does not affect the accounting profit, taxable income or deductible loss.
For the deductible temporary difference relevant to investment in associates, when the following conditions are met at the same time, corresponding deferred income tax assets are confirmed; the temporary difference is probably reversed in the foreseeable future and taxable income used to deduct the deductible temporary difference will probably be obtained in the future.
ii. Basis for recognition of deferred income tax liabilities
The temporary difference between the tax payable not paid in the current period and that in the previous period is recognized by the Company as deferred income tax liabilities, excluding:
(1) Temporary difference formed due to initial confirmation of goodwill;
(2) Transaction or matter formed due to factors rather than business merger (the transaction or matter does not affect the accounting profit or the temporary difference formed due to taxable income or deductible loss);
(3) For the taxable temporary difference relevant to investment of subsidiaries and associates, the reversal time of the temporary difference can be controlled and may not be reversed in the foreseeable future.
iii. An entity shall offset deferred tax assets and deferred tax liabilities if, and only if:
(1) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
(2) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
28. Lease
(1) Accounting treatment method of operating lease
A. The fee paid by the Company for rented assets is apportioned by the straight-line method in the whole lease term without deduction of the rent-free period and included in current expenses. The initial direct expenses related to lease transactions, paid by the Company, are included in current expenses.
In case that the leasing party undertakes the lease-related expenses that should be undertaken by the Company, the Company deducts the expenses from the total lease fee and the lease fee after deduction is apportioned in the lease term and included in current expenses.
B. The lease fee received by the Company from leasing of assets is apportioned by the straight-line method in the whole lease term without deduction of the rent-free period and included in the lease income. The initial direct expenses related to lease transactions, paid by the Company, are included in current expenses. Those with significant amounts are capitalized
and recorded by periods into current profits in the whole lease term according to the same basis for recognition of the lease
income.
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. In case that the Company undertakes the lease-related expenses which should be undertaken by the lessee, the Company deducts the expenses from the total lease income and the lease expenses after deduction are allocated in the lease term. (2) Accounting treatment method of financing lease
A. Assets acquired under financing lease: Between the fair value of rented assets and the minimum lease payment, the Company adopts the lower one as the recording value of the rented assets, the minimum lease payment as the recording value of long-term accounts payable, and the difference between the two as financing expenses yet to be recognized. The financing expenses yet to be recognized are apportioned by the Company by the actual interest rate method in the lease term of the assets and included in accounting expenses. Assets given out under financing lease:
B. The difference between the total residual value, without guarantee, of the financing lease payment receivable and the current value is recognized by the Company on the lease-beginning date as financing profits yet to be realized, and as the lease income in future lease periods. The initial direct expenses related to lease transactions are included in the initial calculation of financing lease payment receivable and the amount of profits recognized in the lease term is reduced. 29. Changes of important accounting policies and accounting estimates
(1) Changes of important accounting policies
□ Applicable√ Not applicable
(2) Changes of important accounting estimates
□ Applicable√ Not applicable
VI. Taxes
1. Main tax categories and tax rates
||||
|-|-|-|
|Tax Category|Taxation Basis|Tax Rate|
|Value-added tax|Taxable income|5, 6, 17|
|Business tax|Revenue from rental and interest on loans|5|
|Urban maintenance and construction tax|Turnover tax payable|7|
|Corporate income tax|Taxable income|25, 15|
|Education surtax|Turnover tax payable|3|
|Education surtax|Turnover tax payable|2|

 Tax payers when different enterprise income tax rates exist
|||
|-|-|
|Name of tax payer|Income tax rate|
|Xi'an SEG Electronics Market Co., Ltd.|15|
|Xi'an Hairong SEG Electronics Market Co., Ltd.|15|

2. Tax preference
According to the Letter of Confirmation Doc.No.[2014] 134 issued by Shaanxi Development and Reform Commission,
Xi'an SEG Electronics Market Co., Ltd., a subsidiary of the Company, is engaged in projects encouraged by the nation and
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. complies with the corporate income tax preference policy for development of the west regions. Therefore, the corporate income tax shall be paid at the rate of15%.
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 of15%.
Except for the foregoing two subsidiaries, the enterprise income tax rate of all other subsidiaries is25%.
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|
|Performance bond||
|Cash deposit for credit card repayment||
|Total||

 2. Accounts receivable
(1) Accounts receivable disclosed by type
Unit: Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
|Class|Book balance||Bad debt provision|||Book balance||Bad debt provision|||
||||||Book value|||||Book value|
||Amount|Percentage|Amount|Percentage||Amount|Percentage|Amount|Percentage||
|Accounts receivable with|||||||||||
|bad debt provision accrued|||||||||||
||79,482,537.58|87.81%|26,173.60|0.24%|79,456,363.98|98,238,596.47|89.91%|26,173.60|0.03%|98,212,422.87|
|based on credit risk feature|||||||||||
|combinations|||||||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Accounts receivable with|||||||||||
|an insignificant amount|||||||||||
||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%||
|individually, for which 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
□ 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
|||||
|-|-|-|-|
|Name of company||||
||Accounts receivable|Bad debt provision|Proportion ofprovision (%)|
|Jiangsu Unicom|3,092,011.09|3,092,011.09|100.00|
|Shenzhen Shuangxionghui Industrial Co.,Ltd|2,160,725.63|2,160,725.63|100.00|
|Shenzhen Liyuanshun Industrial Co., Ltd.|1,906,865.35|1,906,865.35|100.00|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||
|-|-|-|-|
|Zhejiang Financial Information Co., Ltd|786,000.00|786,000.00|100.00|
|Shanghai Tianci Industrial Co., Ltd.|899,000.00|899,000.00|100.00|
|Other companies|2,185,306.44|2,185,306.44|100.00|
|Total|11,029,908.51|11,029,908.51|100.00|

(2) Accounts receivable with top 5 closing balance collected based on arrears party
||||
|-|-|-|
|Name of company|Closing balance|Percentage in the totalamount of accountsreceivable|
|Shenzhen Runneng Digital Co., Ltd.|20,165,776.97|22.28|
|Xinjiang Zhongdi Communications Equipment Co., Ltd.|13,241,726.56|14.63|
|Shenzhen Wonder Industry Co., Ltd.|7,955,493.47|8.79|
|Shenzhen Comnet Technology Co., Ltd.|5,216,504.81|5.76|
|Shenzhen Nanfang Yunhe Technology Co., Ltd.|3,941,752.87|4.35|
|Total|50,521,254.68|55.82|

3. Advances
(1) Advances listed according to different durations
Unit: Yuan
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Aging|||||
||Amount|Percentage|Amount|Percentage|
|Within 1 year|89,712,712.41|100.00%|129,044,887.26|100.00%|
|Total|89,712,712.41|-|129,044,887.26|-|

 (2) Advances with top 5 closing balance collected based on advance object
|||||
|-|-|-|-|
|Name of company|Period-end amount|Percentage in the totalamount of accountsreceivable (%)|Prepayment date|
|Xi'an Gaoke (Group) New West China Industrial|20,000,000.00|22.29|Within 1 year|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||
|-|-|-|-|
|Development Co., Ltd||||
|Shenzhen Must Energy Technology Co., Ltd.|17,823,353.29|19.87|Within 1 year P|
|Tonmac International Electronics (Suzhou) Co.,Ltd|17,500,000.00|19.51|Within 1 year|
|Shenzhen Must Power Co., Ltd.|9,337,733.44|10.41|Within 1 year P|
|Suzhou SEG Digital Plaza Management Co., Ltd.|5,696,597.95|6.35|Within 1 year|
|Total|70,357,684.68|78.43|- -|

4. Other receivables
(1) Other receivables disclosed by type
Unit: Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
|Class|Book balance||Bad debt provision|||Book balance||Bad debt provision|||
||||||Book value|||||Book value|
||Amount|Percentage|Amount|Percentage||Amount|Percentage|Amount|Percentage||
|Other receivables with|||||||||||
|single significant amount|||||||||||
||14,434,547.87|15.95%|14,434,547.87|100.00%||14,434,547.87|24.12%|14,434,547.87|100.00%||
|and single bad debt|||||||||||
|provision|||||||||||
|Other receivables with bad|||||||||||
|debt provision accrued|||||||||||
||46,573,648.87|51.46%|322,879.63|0.69%|46,250,769.24|27,674,049.48|46.25%|321,265.15|1.16%|27,352,784.33|
|based on credit risk feature|||||||||||
|combinations|||||||||||
|Other receivables with an|||||||||||
|insignificant amount|||||||||||
||17,731,257.04|19.59%|17,731,257.04|100.00%||17,731,257.04|29.63%|17,731,257.04|100.00%||
|individually, for which 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
Unit: Yuan
||||||
|-|-|-|-|-|
||Closing balance||||
|Other receivables (by|||||
|company)|Other receivables|Bad debt provision|Percentage|Reason for provision|
|Yangjiang Yuntong Grease||||Unable to be recovered for|
||8,530,276.35|8,530,276.35|100.00%||
|Co., Ltd.||||aging of over 5 years|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||
|-|-|-|-|-|
|Creditor's right transferred||||Unable to be recovered for|
||5,904,271.52|5,904,271.52|100.00%||
|in by SEG Communications||||aging of over 5 years|
|Total|14,434,547.87|14,434,547.87|-|-|

 Among the combinations, accounts receivable for which bad debt provision is computed by aging method:
√ Applicable□ Not applicable
Unit: Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other receivables|Bad debt provision|Percentage|
|Sub-item within one year||||
|Within 1 year|40,180,552.52|0.00|0.00%|
|Subtotal of accounts aged under 1||||
||40,180,552.52|0.00|0.00%|
|year||||
|1-2 years|6,355,437.60|317,771.88|5.00%|
|2-3 years|24,240.00|2,424.00|10.00%|
|Over 3 years|13,418.75|2,683.75|20.00%|
|Total|46,572,034.39|321,265.15|0.69%|

 Note to basis for confirming the combination:
Other receivables in a combination, for which bad debt provisions are made using the Percentage of Total Receivables Outstanding method□ Applicable√ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
□ Applicable√ Not applicable
(2) Current accrued, recovered or reversed bad debt provision
The amount of the current accrued bad debt provision is RMB 1,614.48 Yuan and the amount of the current recovered or reversed bad debt provision is RMB 0.00 Yuan.
(3) Classification of other receivables by nature
Unit: Yuan
||||
|-|-|-|
|Nature of receivables|Period-end book balance|Period-end book balance|
|Creditor's right transfer cost|32,165,804.91|32,165,804.91|
|Imprest|1,636,672.31|831,185.54|
|Deposit and security deposit|23,173,739.64|23,342,863.94|
|Others|21,763,236.92|3,500,000.00|
|Total|78,739,453.78|59,839,854.39|

(4) Other receivables with top 5 closing balance collected based on arrears party
Unit: Yuan
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
|||||Percentage in the total||
||||||Closing balance of bad|
|||||amount of closing||
|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|||||
|||6,200,000.00|1-2 years|7.87%|310,000.00|
|Engineering||||||
||peasant workers|||||
|Administration||||||
|Creditor's right||||||
||Debt restructuring of|||||
|||5,904,271.52|Over 5 years|7.50%|5,904,271.52|
|transferred in by SEG||||||
||SEG Communications|||||
|Communications||||||
|Shenzhen Lianjing|Creditor's incomings|||||
|||5,697,287.51|Over 5 years|7.24%|5,697,287.51|
|Trade Co., Ltd.|and outgoings|||||
|Shenzhen Top Industry|Creditor's incomings|||||
|||3,281,387.96|Over 5 years|4.17%|3,281,387.96|
|Co., Ltd.|and outgoings|||||
|Total|-|29,613,223.34|-|37.61%|23,723,223.34|

 5. Inventory
(1) Classification of inventory
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|||Provision for loss|||Provision for loss||
|Item|||||||
||Book balance||Book value|Book balance||Book value|
|||for decline in value|||for decline in 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
|||||||
|-|-|-|-|-|-|
|Inventory item name|Opening balance|Increase in thecurrent period|Decrease in the current period||Closing balance|
||||Decrease insales|Others||
|Nantong SEG Times|13,915,097.17|6,576,579.00|||20,491,676.17|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||
|-|-|-|-|
|Square||||
|Total|13,915,097.17|6,576,579.00|20,491,676.17|

 (3) Development cost
||||||
|-|-|-|-|-|
|Project name|Commencementtime|Expectedcompletion date|Expectedinvestmentamount|Closing balance|
|Nantong SEG TimesSquare|2013.5|2015.12|600,000,000.00|565,321,975.34|
|Total|-|-|-|565,321,975.34|

 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 debtinstruments||
||||Total|
|for sale|instruments|||
|Cost of equityinstruments/amortized cost||||
||90,405.00||90,405.00|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|of debt instruments|||
|Fair value|588,625.10|588,625.10|
|Accumulative changes in|||
||498,220.10|498,220.10|
|fair value included in other|||
|comprehensive income|||

(3) Available-for-sale financial assets measured by cost at the end of the period
Unit: Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Impairment provision|||||Cash|
|||||||||||dividends|
||||||||||Shareholding||
|||Increase in|Decrease in|||Increase in|Decrease in||||
|Investee|||||||||||
||Periodbeginning||||Period|||||of the|
|||||Period end||||Period end|proportion||
|||the current|the current|||the current|the current||||
|||||||||||current|
||||||beginning||||||
|||period|period|||period|period||||
|||||||||||period|
|Kashgar|||||||||||
|Shenzhen|||||||||||
||20,000,000.00|||20,000,000.00|||||||
|City Co.,|||||||||||
|Ltd.|||||||||||
|Shenzhen|||||||||||
|SEG GPS|||||||||||
||13,515,392.83|||13,515,392.83|||||||
|Scientific|||||||||||
|Navigations|||||||||||
|Co., Ltd.|||||||||||
|Nanjing|||||||||||
||280,000.00|||280,000.00|||||||
|Shangsha|||||||||||
|Co., Ltd|||||||||||
|Anshan|||||||||||
||15,000.00|||15,000.00|15,000.00|||15,000.00|||
|Yibai Co.,|||||||||||
|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||||
||15,000.00||15,000.00|
|balance at the beginning of||||
|period||||
|Accrued impairment||||
||15,000.00||15,000.00|
|balance at the end of period||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. 8. Long-term equity investment
Unit: Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/Decrease of the year||||||||||
|||||Investment||||||||
||||||||||||Closing|
|||||gains and||||||||
||||||Adjustment of|||||||
||Opening|||||||||Closing||
|||||||Other|Issued cash|Accrued|||balance of|
|Investee||||losses||||||||
|||Additional|Negative|||||||||
||||||other|||||||
||balance||||||||Others|balance|impairment|
|||||confirmed||equity|dividends|impairment||||
|||investment|investment||comprehensive|||||||
||||||||||||provision|
|||||under the||changes|or profits|provision||||
||||||income|||||||
|||||equity||||||||
|||||method||||||||
|1. Cooperative enterprise||||||||||||
|2. Associate||||||||||||
|Shanghai SEG||||||||||||
||3,379,412.81|||-111,608.08||||||3,267,804.73||
|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|||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||
|-|-|-|-|-|
|Item|Houses and buildings|Land use right|Construction in progress|Total|
|assets/construction in progress|||||
|(3) Business merger increase|||||
|3. Amount of decrease in the|||||
|current period|||||
|(1) Disposal|||||
|(2) Other transfer-out|||||
|4. Closing balance|718,281,629.05|5,237,512.49||723,519,141.54|
|II. Accumulated depreciation or|||||
|accumulated amortization|||||
|1. Opening balance|277,694,588.74|1,972,826.40||279,667,415.14|
|2. Amount of increase in the|||||
||9,295,757.78|45,220.68|0.00|9,340,978.46|
|current period|||||
|(1) Provision or amortization|9,295,757.78|45,220.68||9,340,978.46|
|3. Amount of decrease in the|||||
|current period|||||
|(1) Disposal|||||
|(2) Other transfer-out|||||
|4. Closing balance|286,990,346.52|2,018,047.08|0.00|289,008,393.60|
|III. Impairment provision|||||
|1. Opening balance|||||
|2. Amount of increase in the|||||
|current period|||||
|(1) Provision|||||
|3. Amount of decrease in the|||||
|current period|||||
|(1) Disposal|||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||
|-|-|-|-|-|
|Item|Houses and buildings|Land use right|Construction in progress|Total|
|(2) Other transfer-out|||||
|4. Closing balance|||||
|IV. Book value|||||
|1. Closing book value|431,291,282.53|3,219,465.41|0.00|434,510,747.94|
|2. Opening book value|440,587,040.31|3,264,686.09|0.00|443,851,726.40|

 10. Fixed assets
(1) Information on fixed assets
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Houses and|Machinery|Transportation|Electronic|||
|Item|||||Other equipment|Total|
||buildings|equipment|vehicles|equipment|||
|I. Original book value|||||||
|1. Opening balance|35,694,847.73|30,744,844.49|5,470,881.82|32,437,022.84|3,717,659.88|108,065,256.76|
|2. Amount of increase in|||||||
||0.00|3,000.00|0.00|1,122,111.47|778,244.00|1,903,355.47|
|the current period|||||||
|(1) Purchase||3,000.00||1,117,611.47|778,244.00|1,898,855.47|
|(2) Transfer-in of|||||||
|construction in progress|||||||
|(3) Business merger|||||||
|increase|||||||
|Other transfer-in||||4,500.00||4,500.00|
|3. Amount of decrease in|||||||
||0.00|0.00|291,551.00|186,324.31|0.00|477,875.31|
|the current period|||||||
|(1) Disposal or scrap|||291,551.00|186,324.31||477,875.31|
|4. Closing balance|35,694,847.73|30,747,844.49|5,179,330.82|33,372,810.00|4,495,903.88|109,490,736.92|
|II. Accumulated|||||||
|depreciation|||||||
|1. Opening balance|14,788,585.07|29,586,623.96|3,630,627.47|20,012,581.46|2,522,413.55|70,540,831.51|
|2. Amount of increase in|||||||
||436,930.80|826,192.94|252,348.96|687,629.82|290,565.87|2,493,668.39|
|the current period|||||||
|(1) Provision|436,930.80|826,192.94|252,348.96|687,629.82|290,565.87|2,493,668.39|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
||Houses and|Machinery|Transportation|Electronic|||
|Item|||||Other equipment|Total|
||buildings|equipment|vehicles|equipment|||
|3. Amount of decrease in|||||||
||0.00|0.00|276,973.45|177,008.09|0.00|453,981.54|
|the current period|||||||
|(1) Disposal or scrap|||276,973.45|177,008.09||453,981.54|
|4. Closing balance|15,225,515.87|30,412,816.90|3,606,002.98|20,523,203.19|2,812,979.42|72,580,518.36|
|III. Impairment provision|||||||
|1. Opening balance|||||||
|2. Amount of increase in|||||||
|the current period|||||||
|(1) Provision|||||||
|3. Amount of decrease in|||||||
|the current period|||||||
|(1) Disposal or scrap|||||||
|4. Closing balance|||||||
|IV. Book value|||||||
|1. Closing book value|20,469,331.86|335,027.59|1,573,327.84|12,849,606.81|1,682,924.46|36,910,218.56|
|2. Opening book value|20,906,262.66|1,158,220.53|1,840,254.35|12,424,441.38|1,195,246.33|37,524,425.25|

 (2) Fixed assets not obtaining a property right certificate
Unit: Yuan
||||
|-|-|-|
|||Reason for not obtaining the property right|
|Item|Book value||
|||certificate|
|Houses and buildings|1,260,353.07|Qualification procedures not complete|

 11. Construction in progress
(1) Construction in progress
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item|||||||
||Book balance|Impairment|Book value|Book balance|Impairment|Book value|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||
|-|-|-|-|-|
||provision||provision||
|LCD in the lobby of SEG|||||
|||140,810.00||140,810.00|
|Plaza|||||
|Total||140,810.00||140,810.00|

 12. Intangible assets
(1) Intangible assets
Unit: Yuan
|||||||
|-|-|-|-|-|-|
||||Non-patented|||
|Item|Land use right|Patent right||Outsourced software|Total|
||||technology|||
|I. Original book value||||||
|1. Opening balance|159,759.24|||3,042,853.00|3,202,612.24|
|2. Amount of increase in the||||||
|current period||||||
|(1) Purchase||||||
|(2) Internal R&D||||||
|(3) Business merger increase||||||
|3. Amount of decrease in the||||||
|current period||||||
|(1) Disposal||||||
|4. Closing balance|159,759.24|||3,042,853.00|3,202,612.24|
|II. Accumulated amortization||||||
|1. Opening balance|57,514.55|||2,001,335.58|2,058,850.13|
|2. Amount of increase in the||||||
||1,379.88|||165,205.24|166,585.12|
|current period||||||
|(1) Provision|1,379.88|||165,205.24|166,585.12|
|3. Amount of decrease in the||||||
|current period||||||
|(1) Disposal||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||Non-patented|||
|Item|Land use right|Patent right||Outsourced software|Total|
||||technology|||
|4. Closing balance|58,894.43|||2,166,540.82|2,225,435.25|
|III. Impairment provision||||||
|1. Opening balance||||||
|2. Amount of increase in the||||||
|current period||||||
|(1) Provision||||||
|3. Amount of decrease in the||||||
|current period||||||
|(1) Disposal||||||
|4. Closing balance||||||
|IV. Book value||||||
|1. Closing book value|100,864.81|||876,312.18|977,176.99|
|2. Opening book value|102,244.69|||1,041,517.42|1,143,762.11|

 Proportion of intangible assets formed not through internalR&D of the Company to the balance of intangible assets
13. Goodwill
(1) Original book value of goodwill
Unit: Yuan
||||||
|-|-|-|-|-|
|Name of the investee or theitem contributing to agoodwill|||||
||Opening balance|Increase in the current period|Decrease in the current period|Closing balance|
|Changsha SEG DevelopmentCo., Ltd.|||||
||10,328,927.82|||10,328,927.82|
|Total|10,328,927.82|||10,328,927.82|

 (2) Goodwill impairment provision
Unit: Yuan
||||||
|-|-|-|-|-|
|Name of the investee or the|||||
||Opening balance|Increase in the current period|Decrease in the current period|Closing balance|
|item contributing to a|||||
|goodwill|||||

Goodwill impairment testing process, parameters, and recognition method for goodwill impairment provision
Other note
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. Goodwill is measured as the difference on the acquisition date between the cost of the enterprises merger not under common control over the acquirer's interest in the fair value of the identifiable net assets.
The goodwill calculation process is as follows:
||
|-|
|Item|
|Investment cost|
|Book value of the net assets of the investee|
|Estimated increment of net assets|
|Deferred income tax liabilities incurred by the estimated increment of net assets|
|Fair value of the net assets of the investee|
|Shareholding proportion in the investee|
|The difference caused when the investment cost is more than the recognizable net assetsof the investee, which should be enjoyed at the time of acquisition|

The Company purchased46% of the equity of Changsha SEG Development Co., Ltd with the price of 69,000,000 Yuan in March 2009. The net assets in book value of Changsha SEG Development Co., Ltd were 57,508,384.14 Yuan in the current month while the net assets in fair value of Changsha SEG Development Co., Ltd after the evaluation for the added value was carried out. Thus, a goodwill amounting to 10,328,927.82 was formed.
The goodwill impairment testing was conducted at the end of the period and there was no sign of impairment, so no provision was accrued for impairment.
14. Long-term expenses to be apportioned
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||Increase in the|Amount of current|Amount of other||
|Item|Opening balance||||Closing balance|
|||current period|period amortization|decrease||
|Decoration expenses|44,225,335.11|9,536,846.70|5,634,707.68||48,127,474.13|
|Firefighting renovation|4,318,931.80||404,738.70||3,914,193.10|
|Market supporting fee of Tower B|691,732.95||456,310.86||235,422.09|
|Total|49,235,999.86|9,536,846.70|6,495,757.24||52,277,089.32|

 15. Deferred income tax assets and liabilities
(1) Deferred income tax assets not offset
Unit: Yuan
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|||||
||Deductible temporary||Deductible temporary||
|||Deferred income tax assets||Deferred income tax assets|
||difference||difference||
|Asset impairment provision|32,235,258.25|8,058,814.57|32,235,258.25|8,058,814.57|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||
|-|-|-|-|-|
|Government subsidies included|||||
||9,500,000.00|2,375,000.00|9,500,000.00|2,375,000.00|
|in deferred income|||||
|Total|41,735,258.25|10,433,814.57|41,735,258.25|10,433,814.57|

 (2) Deferred income tax liabilities not offset
Unit: Yuan
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|||||
|||Deferred income tax|Taxable temporary|Deferred income tax|
||Taxable temporary difference||||
|||liabilities|difference|liabilities|
|Asset evaluation increment for|||||
||61,146,303.68|15,286,575.92|63,442,234.08|15,860,558.49|
|merger of not the same controlling|||||
|enterprise|||||
|Gains and losses from changes of|||||
||576,299.13|144,074.78|654,175.41|163,543.86|
|fair value of the available-for-sale|||||
|financial assets|||||
|Total|61,722,602.81|15,430,650.70|64,096,409.49|16,024,102.35|

 (3) Details of unconfirmed deferred income tax assets
Unit: Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deductible losses|56,411,415.84|46,691,048.83|
|Asset impairment provision|11,322,893.92|11,322,893.92|
|Total|67,734,309.76|58,013,942.75|

 (4) The deductible loss of deferred income tax assets that have not been confirmed will come to maturity in the following years:
Unit: Yuan
|||||
|-|-|-|-|
|Year|Period-end amount|Period-beginning amount|Remarks|
|2016|12,973,257.02|12,973,257.02||
|2017|7,431,196.64|7,431,196.64||
|2018|9,231,815.77|9,295,488.88||
|2019|6,429,382.30|6,546,777.27||
|2020|10,444,329.02|10,444,329.02||
|2021|9,901,435.09|||
|Total|56,411,415.84|46,691,048.83|-|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. 16. Other non-current assets
Unit: Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Prepayment for software|||
|Prepayment for engineering in the electronics market|848,593.64|5,103,811.14|
|Total|848,593.64|5,103,811.14|

 17. Short-term loans
(1) Classification of short-term loans
Unit: Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Pledge loans|21,438,652.00|42,759,630.48|
|Mortgage loans|290,000,000.00|315,000,000.00|
|Borrowing on credit||10,000,000.00|
|Total|311,438,652.00|367,759,630.48|

 Notes on the classification of short-term loans:
i. The collateral of the pledge loan is the export tax rebate of Shenzhen SEG E-Commerce Co., Ltd., a subsidiary of the Company. 18. Accounts payable
(1) List of accounts payable
Unit: Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Payment for goods|23,663,551.07|84,158,671.54|
|Others|863,112.62|5,750,110.44|
|Total|24,526,663.69|89,908,781.98|

 19. Advance receipts
(1) List of advance receipts
Unit: Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Advance brand royalty|8,906,055.45|11,452,476.85|
|Advance rental payment|87,715,324.08|111,836,641.23|
|Advance payment for goods|48,518,993.35|53,693,141.53|
|Advance advertising payment|5,287,090.98|8,013,712.80|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Others|4,879,598.16|5,434,148.64|
|Total|155,307,062.02|190,430,121.05|

 20. Wages payable
(1) List of payroll payable
Unit: Yuan
||||||
|-|-|-|-|-|
|||Increase in the current|Decrease in the current||
|Item|Opening balance|||Closing balance|
|||period|period||
|1. Short-term payroll|21,780,103.03|29,772,242.45|44,092,156.09|7,460,189.39|
|2. Welfare after leave -|||||
||69,031.13|1,390,690.75|1,390,419.55|69,302.33|
|defined contribution plan|||||
|3. Dismissal welfare||24,503.00|24,503.00|0.00|
|Other welfare due within|||||
|||0.00|0.00|0.00|
|one year|||||
|Total|21,849,134.16|31,187,436.20|45,507,078.64|7,529,491.72|

 (2) List of short-term payroll
Unit: Yuan
||||||
|-|-|-|-|-|
|||Increase in the current|Decrease in the current||
|Item|Opening balance|||Closing balance|
|||period|period||
|1. Wages, bonuses,|||||
||19,480,254.22|26,026,240.24|39,872,167.53|5,634,326.93|
|allowances and subsidies|||||
|2. Employee welfare||401,274.44|401,274.44|0.00|
|3. Social insurance|||||
||89,152.51|1,283,936.64|1,363,936.64|9,152.51|
|premiums|||||
|Work injury insurance||27,123.44|27,123.44|0.00|
|Maternity insurance||49,903.10|49,903.10|0.00|
|Basic medical insurance|88,756.51|803,191.60|880,191.60|11,756.51|
|Supplementary medical|||||
||396.00|5,720.00|5,720.00|396.00|
|insurance|||||
|4. Housing fund|1,265,986.46|1,466,082.22|1,569,641.43|1,162,427.25|
|5. Labor union expenditure|||||
||944,709.84|399,481.91|716,337.55|627,854.20|
|and employee education|||||
|fund|||||
|Other short-term payroll||195,227.00|168,798.50|26,428.50|
|Total|21,780,103.03|29,772,242.45|44,092,156.09|7,460,189.39|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. (3) Defined contribution plan
Unit: Yuan
||||||
|-|-|-|-|-|
|||Increase in the current|Decrease in the current||
|Item|Opening balance|||Closing balance|
|||period|period||
|1. Pension insurance|68,043.51|799,048.10|798,776.90|68,314.71|
|Unemployment insurance|||||
||987.62|591,642.65|591,642.65|987.62|
|premium|||||
|3. Supplementary pension|||||
|||||0.00|
|payment|||||
|Total|69,031.13|1,390,690.75|1,390,419.55|69,302.33|

 21. Taxes payable
Unit: Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Value-added tax|1,486,940.24|169,594.16|
|Business tax|-3,095,394.16|1,424,420.92|
|Corporate income tax|21,351,544.22|28,476,563.20|
|Individual income tax|1,439,614.04|805,153.42|
|Urban maintenance and construction tax|-9,965.70|178,371.98|
|Education surtax|-58,358.39|102,484.34|
|Housing property tax|2,158,907.17|2,939,568.67|
|Stamp tax and water fund|38,840.51|532,994.96|
|Others|952,884.40|15,878.42|
|Total|24,265,012.33|34,645,030.07|

 22. Interest payable
Unit: Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Interest payable on short-term loans|698,717.58|516,758.34|
|Total|698,717.58|516,758.34|

23. Dividends payable
Unit: Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Common stock dividends|18,966,398.39|2,218,224.58|
|Total|18,966,398.39|2,218,224.58|

 24. Other payables
(1) Other payables listed based on nature
Unit: Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deposit and security deposit|129,468,386.91|117,687,835.08|
|Central air conditioner maintenance cost and|||
||13,288,284.61|12,975,174.61|
|special maintenance fund|||
|Receipts under custody|10,788,431.53|16,469,845.49|
|Funds from related parties|2,110,695.41|2,753,679.48|
|Water and electricity charges, rental, and others|||
||71,884,610.63|44,443,351.03|
|payable of the electronics market|||
|Total|227,540,409.09|194,329,885.69|

 25. Estimated liabilities
Unit: Yuan
|||||
|-|-|-|-|
|Item|Closing balance|Opening balance|Cause|
|Pending litigation|9,700,000.00|7,000,000.00||
|Total|9,700,000.00|7,000,000.00|-|

Note to important assumption and estimation related to important estimated liabilities
In March 2013, Nanning SEG leased the house located on 1F and 2F of podium building of Nanning Zhidi Square at 158 East Renmin Road, Xingning District, Nanning as the electronics market. The agreed term of tenancy is from March 18, 2013 to March 17, 2025. Due to a large area of water seepage and leaking existing with the house leased, Nanning SEG lodged a lawsuit at Xingning District People's Court after negotiation with Haiqi Company for several times with no solution achieved. As Nanning SEG failed to pay the rental and breached the contract, Nanning SEG was also accused by Haiqi Company at the same court.
On June 28, 2016, the lawsuit was dismissed by Nanning Xingning District People's Court in the (2015) X. M. Y. C. Zi. Civil Judgment No. 1590. In the (2015) X. M. Y. C. Zi. Civil Judgment No. 1393, RMB 12,000,000 was involved in the case, and the Company decided not to file an appeal. The Company accrued the estimated liabilities RMB 7,000,000 for the case in 2015. Nanning SEG has estimated the rental payable RMB 2,300,000. According to the judgment, the Company additionally accrued the compensation RMB 2,700,000.
26. Deferred income
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||Increase in the current|Decrease in the current|||
|Item|Opening balance|||Closing balance|Cause|
|||period|period|||
|Government subsidies|9,634,114.77||35,628.12|9,598,486.65||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||
|-|-|-|-|-|
|Total|9,634,114.77|35,628.12|9,598,486.65|-|

 Items involving government subsidies:
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||||Amount of||||
|||Amount of new||||Relevant to|
||||non-operating||||
|Liability item|Opening balance|||Other changes|Closing balance||
|||subsidies in the||||assets/relevant to|
||||income in the||||
|||current period||||income|
||||current period||||
|Subsidies for online|||||||
||88,110.37||35,628.12||52,482.25|Relevant to assets|
|SEG projects|||||||
|Subsidies for|||||||
||46,004.40||||46,004.40|Relevant to income|
|project funds|||||||
|Support project for|||||||
|construction of|||||||
||9,500,000.00||||9,500,000.00|Relevant to assets|
|Nantong SEG|||||||
|Electronics Market|||||||
|Total|9,634,114.77||35,628.12||9,598,486.65|-|

27. Share capital
Unit: Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/decrease of the change (+)||||||
||Opening balance||||||Closing balance|
|||Issue of new||Capitalization of||||
||||Bonus share||Others|Subtotal||
|||shares||public reserve||||
|Sum of shares|784,799,010.00||||||784,799,010.00|

 28. Capital reserves
Unit: Yuan
||||||
|-|-|-|-|-|
|||Increase in the current|Decrease in the current||
|Item|Opening balance|||Closing balance|
|||period|period||
|Capital premium (capital|||||
||322,339,973.81|||322,339,973.81|
|share premium)|||||
|Other capital reserves|184,205,857.30|7,812.30||184,213,669.60|
|Total|506,545,831.11|7,812.30||506,553,643.41|

29. Other comprehensive income
Unit: Yuan
|||||
|-|-|-|-|
|Item|Opening|Amount incurred in the report period|Closing|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||balance||Less: gains and||||balance|
|||Pre-taxamountobtained inthe currentperiod|||Amount after|Amount after||
||||losses|||||
||||transferred in||tax|tax||
|||||Less: Income||||
||||from other||attributable|attributable||
|||||tax||||
||||comprehensive||to parent|to minority||
||||income in the||company|shareholders||
||||current period|||||
|II. Other comprehensive income that can|||||-77,828.18|||
||326,662.48|-155,907.21||-38,988.83||-39,090.20|248,834.30|
|be categorized as gains and losses||||||||
|Including: Shares of the investee of other|||||48.10|||
|comprehensive income to be reclassified||||||||
|||48.10|||||48.10|
|into gains and losses under the equity||||||||
|method||||||||
|Gains and losses from changes of fair|||||-77,876.28|||
||326,662.48|-155,955.31||-38,988.83||-39,090.20|248,786.20|
|value of the available-for-sale financial||||||||
|assets||||||||
|Held-to-maturity investments classified|||||0.00|||
|as gains and losses from the||||||||
|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 theprevious period|||
||73,532,388.70||
|After adjustment undistributed profit at the beginning|73,532,388.70||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||
|-|-|
|of period||
|Add: Net profits attributable to the parent companyowner in the current period||
||26,856,270.42|
|Other distributions to shareholders|23,669,414.47|
|Undistributed profits at the end of period|76,719,244.65|

32. Operating income and operating cost
Unit: Yuan
||||||
|-|-|-|-|-|
||Amount incurred in the current period||Amount incurred in the previous period||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|412,250,832.76|320,996,877.99|425,219,054.09|317,303,931.44|
|Total|412,250,832.76|320,996,877.99|425,219,054.09|317,303,931.44|

 33. Business taxes and surcharges
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Business tax|8,574,445.98|12,116,694.54|
|Urban maintenance and construction tax|880,743.75|926,364.05|
|Education surtax|566,286.99|617,537.62|
|Others|108,197.42|87,433.93|
|Total|10,129,674.14|13,748,030.14|

 34. Financing expenses
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Interest expenses|2,866,946.54|10,723,583.83|
|Less: Interest income|2,161,658.98|9,503,644.66|
|Loss on exchange|-301,807.07|-671,695.25|
|Others|351,859.63|294,813.31|
|Total|755,340.12|843,057.23|

35. Investment income
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Long-term equity investment income by the equity|||
||-4,826,750.85|-4,892,855.94|
|method|||
|Investment income during the possession of|||
|||750,000.00|
|available-for-sale financial assets|||
|Others (financial products)|6,093,203.87|9,594,819.58|
|Total|1,266,453.02|5,451,963.64|

 36. Non-operating income
Unit: Yuan
|||||
|-|-|-|-|
||Amount incurred in the current|Amount incurred in the previous|Amount included in current|
|Item||||
||period|period|non-recurring gains and losses|
|Total gains on disposal of|0.00|18,693.10||
|non-current assets||||
|Including: Gain on disposal of||||
|||18,693.10||
|fixed assets||||
|Government subsidies|101,608.00|223,828.12|101,608.00|
|Liquidated damages|61,872.11|301,209.17|61,872.11|
|Others|254,908.25|502,248.72|254,908.25|
|Total|418,388.36|1,045,979.11|418,388.36|

 Government subsidies included in current gains and losses:
Unit: Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Influence on|||Amount||
|||||||Amount||Relevant to|
||||||Special||||
|||||the profit and|||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|
|||Allowance||Yes|No|35,628.12|35,628.12||
|online SEG|Industry,||and supported by the||||||
|||||||||assets|
|projects|Trade, and||state (legally gained||||||
||Information||according to national||||||
||Commission||policies)||||||
||Shenzhen||Subsidy gained from||||||
||Futian||engagement in special||||||
|Subsidies for||||||||Relevant to|
||District|Allowance|industries encouraged|No|No||188,200.00||
|project funds|Economic||and supported by the|||||income|
||Promotion||state (legally gained||||||
||Council||according to national||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Influence on|||Amount||
|||||||Amount||Relevant to|
||||||Special||||
|||||the profit and|||incurred in the||
|Subsidy item|Fund source|Purpose|Property and type||||||
|||||||incurred in the||assets/relevant|
|||||loss of the|subsidy||previous||
|||||||current period||to income|
|||||current year|||period||
||||policies)||||||
||||Subsidy gained from||||||
|Guiding funds|||||||||
||||engagement in special||||||
||Suzhou||||||||
|for|||industries encouraged||||||
|||||||||Relevant to|
||Wujiang||||||||
|||Reward||Yes|No|50,000.00|||
|development|||and supported by the||||||
||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|
|||Allowance||Yes|No|15,979.88|||
|stabilization|Security||and supported by the||||||
|||||||||income|
|subsidy|Management||state (legally gained||||||
||Center||according to national||||||
||||policies)||||||
|Total|-|-|-|-|-|101,608.00|223,828.12|-|

 Other note:
37. Non-operating expenses
Unit: Yuan
|||||
|-|-|-|-|
||Amount incurred in the current|Amount incurred in the previous|Amount included in current|
|Item||||
||period|period|non-recurring gains and losses|
|Total loss from disposal of|9,316.22|196,424.21||
||||9,316.22|
|non-current assets||||
|Including: loss from disposal of||||
||9,316.22|196,424.21|9,316.22|
|fixed assets||||
|Compensation for loss|2,710,190.00|605,580.63|2,710,190.00|
|Others|39,379.12|13,784.10|39,379.12|
|Total|2,758,885.34|815,788.94|2,758,885.34|

 38. Income tax expenses
(1) Income tax
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Income tax of the current period|22,632,168.37|20,575,833.86|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Deferred income tax|-593,451.65|-454,462.94|
|Total|22,038,716.72|20,121,370.92|

 (2) Adjustment process of accounting profit and income tax
Unit: Yuan
|||
|-|-|
|Item|Amount incurred in the current period|
|Total profit|66,256,899.51|
|Income tax calculated according to statutory or applicable tax rate|16,564,224.88|
|Impact of different tax rates applicable to subsidiaries|-893,339.17|
|Impact of non-taxable income|1,206,687.71|
|Impact of non-deductible costs, expenses and losses|424,082.57|
|Impact of deferred income tax assets unrecognized in the previous||
||45,267.00|
|period on deductible losses||
|Impact of deferred income tax assets unrecognized in current period on||
||4,691,793.73|
|deductible temporary difference or deductible losses||
|Income tax|22,038,716.72|

 39. Items in the cash flow statement
(1) Other cash received from operating activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Acquisition of security deposit for land||60,000,000.00|
|Current account|15,833,361.21|35,059,959.29|
|Goods payment collected from tenants|92,828,409.85|130,068,994.68|
|Interest income|2,161,658.98|4,764,834.98|
|Non-operating income|261,757.88|181,571.66|
|Total|111,085,187.92|230,075,360.61|

 (2) Other cash paid related to operating activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Incomings and outgoings|21,991,291.71|43,627,781.29|
|Goods payment paid for tenants|67,321,062.09|125,990,506.28|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Cash expenses|24,818,276.07|21,024,437.31|
|Non-operating expenses|50,682.25|1,176,961.97|
|Total|114,181,312.12|191,819,686.85|

 Note to other cash paid related to operating activities:
(3) Other cash received related to financing activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Cash received from disposal of fractional|||
||7,812.30||
|shares|||
|Total|7,812.30||

(4) Other paid cash related to financing activities
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Interbank financing of related parties||57,650,000.00|
|Payment for cash deposit|||
|Payment for loan interest of related parties||110,222.92|
|Payment for issuance of short-term financing|||
||1,524,692.51|669,500.00|
|bonds|||
|Total|1,524,692.51|58,429,722.92|

 40. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
Unit: Yuan
||||
|-|-|-|
|Supplementary data|Amount incurred in the current period|Amount of the previous period|
|1. Reconciliation of net income to cash flow from|||
||-|-|
|operating activities|||
|Net profit|44,218,182.79|52,065,834.26|
|Plus: Asset impairment provision|-3,962,625.52|6,713,966.89|
|Depreciation of fixed assets, oil & gas assets and|||
||11,834,646.85|11,982,280.62|
|consumable biological assets|||
|Amortization of intangible assets|166,585.12|142,489.91|
|Amortization of long-term expenses to be|||
||6,495,757.24|6,574,494.06|
|apportioned|||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Supplementary data|Amount incurred in the current period|Amount of the previous period|
|Loss on disposal of fixed assets, intangible assets,|||
||9,316.22|-177,731.11|
|and other long-term assets (Profit will be 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|
|Including: Cash on hand|532,393.65|526,467.72|
|II. Bank deposits available for payment at any|||
||142,717,238.17|274,816,839.04|
|time|||
|III. Closing balance of cash and cash equivalents|143,304,754.16|275,523,429.10|

41. Assets of which the ownership or the right to use is restricted
Unit: Yuan
||||
|-|-|-|
|Item|Closing book value|Reason for restriction|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|||Deposit and performance bond for credit card|
|Monetary funds|||
|||repayment|
|Fixed assets|11,384,175.51|Collaterals for bank loans|
|Investment properties|99,465,255.47|Collaterals for bank loans|
|Total|110,849,430.98|-|

42. Foreign currency monetary projects
(1) Foreign currency monetary projects
Unit: Yuan
|||||
|-|-|-|-|
||Closing balance of foreign|||
|Item||Discount exchange rate|Closing balance of converted RMB|
||currency|||
|USD|100.00|6.6447|664.47|
|HK$|239.17|0.8564|204.83|
|USD|8,822,851.05|6.6447|58,625,198.38|

 VIII. Change in consolidation scope
1. Others
Twenty-two entities are included in the current consolidated financial statements, namely:
|||||
|-|-|-|-|
|Subsidiary name|Type of subsidiary|Level|Proportion ofshareholding (%)|
|Shenzhen SEG Baohua Enterprise DevelopmentCo., Ltd.|Holding subsidiary|I|66.58|
|Shenzhen Mellow Orange Business HotelManagement Co., Ltd|Holding grandsoncompany|II|66.58|
|Shenzhen SEG Industrial Investment Co., Ltd.|Wholly-owned subsidiary|I|100.00|
|Changsha SEG Development Co., Ltd.|Holding subsidiary|I|46.00|
|Shenzhen SEG Electronics Market ManagementCo., Ltd.|Holding subsidiary|I|70.00|
|Suzhou SEG Electronics Market Co., Ltd.|Holding subsidiary|I|45.00|
|Xi'an SEG Electronics Market Co., Ltd.|Holding subsidiary|I|65.00|
|Shenzhen SEG Credit Co., Ltd.|Holding subsidiary|I|53.02|
|Shenzhen SEG E-Commerce Co., Ltd.|Holding subsidiary|I|51.00|
|Shenzhen SEG Electronics Market Management|Wholly-owned subsidiary|I|100.00|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||
|-|-|-|-|
|Subsidiary name|Type of subsidiary|Level|Proportion ofshareholding (%)|
|Co., Ltd.||||
|Xi'an Hairong SEG Electronics Market Co.,Ltd.|Holding subsidiary|I|51.00|
|Wujiang SEG Electronics Market Co., Ltd.|Holding subsidiary|I|51.00|
|Wuxi SEG Electronics Market Co., Ltd|Holding subsidiary|I|51.00|
|Shunde SEG Electronics Market ManagementCo., Ltd.|Wholly-owned subsidiary|I|100.00|
|Nanning SEG Electronics Market ManagementCo., Ltd.|Wholly-owned subsidiary|I|100.00|
|Nantong SEG Times Square Development Co.,Ltd.|Wholly-owned subsidiary|I|100.00|
|Yantai SEG Times Square Development Co.,Ltd.|Holding subsidiary|I|90.00|
|Nantong SEG Commercial OperationManagement Co., Ltd.|Wholly-owned subsidiary|I|100.00|
|Suzhou SEG Digital Plaza Management Co.,Ltd.|Wholly-owned subsidiary|I|100.00|
|Xi'an Fengdong New Town SEG Times SquareProperties Co., Ltd.|Wholly-owned subsidiary|I|100.00|
|Suzhou SEG Intelligent Technology Co., Ltd.|Wholly-owned subsidiary|I|100.00|
|Shenzhen SEG Longyan New EnergyApplication and Development Co., Ltd.|Holding subsidiary|I|50.00|

For the cause for difference between the proportion of shareholding and the proportion of voting rights and the basis for control of the invested entity even with half of voting rights or less, see "Attachment 8: Equities in other entities– (1) Equities in subsidiaries".
Compared with the previous period, two subsidiaries are added to entities included in the consolidated financial statements of the current period.
IX. Equity in other entities
1. Equity in subsidiaries
(1) Composition of enterprise group
|||||||
|-|-|-|-|-|-|
|Subsidiary name|Main place of|Place of|Nature of business|Shareholding ratio|Method of|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
||business|registration||Direct|Indirect|acquisition|
|Xi'an SEG Electronics|||Electronics market lease|||Investment and|
||Xi'an|Xi'an||65.00%|||
|Market Co., Ltd.|||management|||establishment|
|Shenzhen SEG|||||||
||||Electronics market lease|||Investment and|
||Shenzhen|Shenzhen||70.00%|||
|Electronics Market|||||||
||||management|||establishment|
|Management Co., Ltd.|||||||
|Suzhou SEG|||||||
||||Electronics market lease|||Investment and|
||Su Zhou|Su Zhou||45.00%|||
|Electronics Market|||||||
||||management|||establishment|
|Co., Ltd.|||||||
|Shenzhen Mellow|||Hotel management,||||
|||||||Investment and|
||Shenzhen|Shenzhen|||66.58%||
|Orange Business Hotel|||consultancy and property||||
|||||||establishment|
|Management Co., Ltd|||management||||
||||Petty loan business (pooling||||
||||public deposits is||||
|Shenzhen SEG Credit||||||Investment and|
||Shenzhen|Shenzhen||36.00%|17.02%||
||||prohibited) within the||||
|Co., Ltd.||||||establishment|
||||administrative region of||||
||||Shenzhen.||||
|Shenzhen SEG||||||Investment and|
||Shenzhen|Shenzhen|E-commerce|51.00%|||
|E-Commerce Co., Ltd.||||||establishment|
||||Market facilities leasing,||||
|Shenzhen SEG|||||||
|||||||Investment and|
||||property management, sales||||
||Nanjing|Nanjing||100.00%|||
|Electronics Market|||||||
||||of electronic products and|||establishment|
|Management Co., Ltd.|||||||
||||advertisement||||
|Xi'an Hairong SEG|||Property leasing, sales of||||
|||||||Investment and|
||Xi'an|Xi'an||51.00%|||
|Electronics Market|||electronic products and||||
|||||||establishment|
|Co., Ltd.|||advertisement||||
|Wujiang SEG|||||||
||||Electronics market lease|||Investment and|
||Wujiang|Wujiang||51.00%|||
|Electronics Market|||||||
||||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|
||Foshan|Foshan||100.00%|||
|Electronics Market|||||||
||||management|||establishment|
|Management Co., Ltd.|||||||
|Nanning SEG|||||||
||||Electronics market lease|||Investment and|
||Nanning|Nanning||100.00%|||
|Electronics Market|||||||
||||management|||establishment|
|Management Co., Ltd.|||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|||||Shareholding ratio|||
||Main place of|Place of||||Method of|
|Subsidiary name|||Nature of business||||
||business|registration||Direct|Indirect|acquisition|
|Nantong SEG Times|||||||
|||||||Investment and|
||Nantong|Nantong|real estate development|100.00%|||
|Square Development|||||||
|||||||establishment|
|Co., Ltd.|||||||
|Shenzhen SEG Baohua||||||Merger of|
||||Property lease and||||
||Shenzhen|Shenzhen||66.58%|||
|Enterprise||||||enterprises under|
||||management||||
|Development Co., Ltd.||||||common control|
|Shenzhen SEG||||||Merger of|
||||Investment in industrial and||||
||Shenzhen|Shenzhen||100.00%|||
|Industrial Investment||||||enterprises under|
||||commercial business||||
|Co., Ltd.||||||common control|
|||||||Merger of the|
|Changsha SEG|||||||
|||||||enterprises under|
||Changsha|Changsha|Property lease|46.00%|||
|Development Co., Ltd.||||||the control of a|
|||||||same entity|
|Yantai SEG Times|||||||
|||||||Investment and|
||Yantai|Yantai|real estate development|90.00%|||
|Square Development|||||||
|||||||establishment|
|Co., Ltd.|||||||
|Nantong SEG|||||||
|||||||Investment and|
||Nantong|Nantong|-|100.00%|||
|Commercial Operation|||||||
|||||||establishment|
|Management Co., Ltd.|||||||
|Suzhou SEG Digital|||||||
|||||||Investment and|
||Su Zhou|Su Zhou|-|100.00%|||
|Plaza Management|||||||
|||||||establishment|
|Co., Ltd.|||||||
|Xi'an Fengdong New|||||||
|||||||Investment and|
|Town SEG Times|||||||
||Xi'an|Xi'an|real estate development|100.00%|||
|Square Properties Co.,||||||establishment|
|Ltd.|||||||
|Suzhou SEG|||||||
|||||||Investment and|
||Su Zhou|Su Zhou|Trading|100.00%|||
|Intelligent Technology|||||||
|||||||establishment|
|Co., Ltd.|||||||
|Shenzhen SEG|||||||
|||||||Investment and|
|Longyan New Energy|||||||
||Shenzhen|Shenzhen|New energy development|50.00%|||
|Application and||||||establishment|
|Development Co., Ltd.|||||||

Difference between the shareholding ratio and the ratio of voting power
For Changsha SEG Development Co., Ltd. (originally named Changsha Emerging Development Co., Ltd.), the current
capital stock structure is as follows: The Company holds46% of shares and is the largest shareholder. In addition, according
to the Memorandum of Cooperation Concerning the Stock Equity Project of Joint Investment and Acquisition of Changsha
Emerging Development Co., Ltd. signed by and between the Company and Hong Kong Jinhong Group on October 8 2008,
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. Hong Kong Jinhong Group agreed to give up the5% of voting power, which would be exercised by the Company, and the voting power ratio of the Company is51%. Half of the directors, the Chairman of the Board, the General Manager, the Chief Financial Officer and the management team of Changsha SEG Development Co., Ltd are all dispatched by the Company. Therefore, the Company has obtained the control of Changsha SEG Development Co., Ltd.
Basis for half of or less voting power with control of the investee and more than half of voting power with control of the investee
Half of the directors, the Chairman of the Board, the General Manager, the Chief Financial Officer and the management team of Suzhou SEG The electronics market Management Co., Ltd are all dispatched by the Company so that the Company actually controls the operation of Suzhou SEG.
(2) Important non-wholly-owned subsidiaries
Unit: Yuan
||||||
|-|-|-|-|-|
||||Current dividendsdistributed to minorityshareholders|Minority shareholders'|
||Equity proportion ofminority shareholders|Current gains of losses of|||
|Subsidiary name|||||
|||||equity balance at the end|
|||minority shareholders|||
|||||of the period|
|Shenzhen SEG Credit Co., Ltd.|46.98%|6,623,617.77|14,490,000.00|81,090,646.88|
|Changsha SEG Development Co.,|||||
||54.00%|1,790,571.99||36,219,633.11|
|Ltd.|||||
|Shenzhen SEG Baohua|||||
||33.42%|4,911,495.19|6,177,600.00|33,510,984.03|
|Enterprise Development Co., Ltd.|||||

Difference between the shareholding ratio and the ratio of voting power of minority shareholders:
Changsha SEG Development Co., Ltd. (originally named Changsha Emerging Development Co., Ltd.), the current capital stock structure is as follows: The Company holds46% 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 up5% of the voting power, which would be exercised by the Company. As a result, Hong Kong Jinhong Group holds40% of shares and35% of the voting power.
(3) Main financial information of important non-wholly-owned subsidiaries
Unit: Yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance||||||Opening balance||||||
|Subsidiary|||||||||||||
||||||Non-curre||||||Non-curre||
||Current|Non-currentassets:||Current||Total|Current|Non-current||Current||Total|
|name|||Total assets||||||Total assets||||
||||||nt||||||nt||
||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|||||||||||||
||19,815,16|66,331,113.4|86,146,274.1|19,072,879.4||19,072,879.4|15,438,729.|68,199,562.6|83,638,292.1|19,880,771.5||19,880,771.|
|SEG|||||||||||||
|Development|0.65|7|2|7||7|45|7|2|3||53|
|Co., Ltd.|||||||||||||
|Shenzhen|106,070,7|52,545,493.0|158,616,283.|58,219,484.4|124,555.0|58,344,039.4|97,334,289.|52,503,037.0|149,837,326.|45,495,566.8|163,543.8|45,659,110.7|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|SEG Baohua|90.71|4|75|6|3|9|19|2|21|7|6|3|
|Enterprise|||||||||||||
|Development|||||||||||||
|Co., Ltd.|||||||||||||

Unit: Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount incurred in the report period||||Amount incurred in the previous period||||
||||Total|Cash flow of|||Total|Cash flow of|
|Subsidiary name|||||||||
||Operating income|Net profit|||Operating income|Net profit|||
||||comprehensive|operating|||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|||||||||
||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|
|Development Co.,|||||||||
|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
||||||||
|-|-|-|-|-|-|-|
|||Place ofregistration||Shareholding ratio||Accounting|
|||||||treatment method|
|Name of joint venture|Main place of||||||
||||Nature of business||||
|||||||for investment in|
|or associate|business|||Direct|Indirect||
|||||||joint venture or|
|||||||associate|
|Shenzhen Huakong|||||||
||Shenzhen|Shenzhen|Manufacturing|20.00%||Equity method|
|SEG Co., Ltd.|||||||
|Shanghai SEG|||||||
||Shanghai|Shanghai|Service industry|35.00%||Equity method|
|Electronics Market|||||||
|Management Co., Ltd.|||||||
|Shenzhen International|||||||
|Consumer Electronics|||||||
||Shenzhen|Shenzhen|Exhibition|30.00%||Equity method|
|Exhibition/Exchange|||||||
|Center Co., Ltd.|||||||

(2) Main financial information about important joint ventures
Unit: Yuan
|||
|-|-|
|Closing balance/amount incurred in the current period|Opening balance/amount incurred in the previous period|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
||||Shenzhen|||Shenzhen|
|||Shanghai SEG|||Shanghai SEG||
||||International|||International|
||Shenzhen Huakong|||Shenzhen Huakong|||
|||Electronics Market|Consumer||Electronics Market|Consumer|
||SEG Co., Ltd.|Management Co.,|Electronics|SEG Co., Ltd.|Management Co.,|Electronics|
|||Ltd.|Exhibition/Exchange||Ltd.|Exhibition/Exchange|
||||Center Co., Ltd.|||Center Co., Ltd.|
|Current assets:|373,956,916.16|22,154,876.66|30,000,000.00|395,623,546.83|20,901,493.33||
|Including: Cash|||||||
||178,367,249.86|6,720,794.24|30,000,000.00|214,877,742.71|1,518,901.94||
|and cash|||||||
|equivalent|||||||
|Non-current assets|361,767,967.50|176,002.47||362,254,332.48|210,798.06||
|Total assets|735,724,883.66|22,330,879.13|30,000,000.00|757,877,879.31|21,112,291.39||
|Current liabilities|66,603,007.25|12,309,947.01||94,113,723.78|10,747,847.59||
|Non-current|||||||
||1,881,551.16|||1,369,185.93|||
|liabilities|||||||
|Total liabilities|68,484,558.41|12,309,947.01||95,482,909.71|10,747,847.59||
|Minority|||||||
||76,561,972.97|||48,141,144.00|||
|shareholders'|||||||
|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|||||||
||118,135,670.46|3,507,326.24|9,000,000.00|122,857,318.61|3,627,555.33||
|calculated based 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|||||||
||177,028,066.40|3,267,804.73|9,000,000.00|185,122,573.88|3,379,412.81||
|equity investment|||||||
|in joint ventures|||||||
|Fair value of equity|||||||
|investment in joint|||||||
||1,949,019,919.44|||2,551,041,568.11|||
|ventures with|||||||
|public offer|||||||
|Operating income|42,719,787.19|3,084,877.60||16,994,189.98|1,282,610.27||
|Financial cost|-1,923,861.70|-272.15||-382,325.95|-431.99||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
||Closing balance/amount incurred in the current period|||Opening balance/amount incurred in the previous period|||
||||Shenzhen|||Shenzhen|
|||Shanghai SEG|||Shanghai SEG||
||||International|||International|
||Shenzhen Huakong|||Shenzhen Huakong|||
|||Electronics Market|Consumer||Electronics Market|Consumer|
||SEG Co., Ltd.|Management Co.,|Electronics|SEG Co., Ltd.|Management Co.,|Electronics|
|||Ltd.|Exhibition/Exchange||Ltd.|Exhibition/Exchange|
||||Center Co., Ltd.|||Center Co., Ltd.|
|Income tax|||||||
||-367,558.89||||||
|payment|||||||
|Net profit|-26,861,012.87|-318,880.23||-28,588,277.77|-1,571,178.03||
|Other|||||||
||240.52||||||
|comprehensive|||||||
|income|||||||
|Total|||||||
||-26,860,772.35|-318,880.23||-28,588,277.77|-1,571,178.03||
|comprehensive|||||||
|income|||||||
|Dividends received|||||||
||||||500,000.00||
|from 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|-|-|-|-|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. XI. Related parties and related party transactions
1. Information on the parent company of the Company
|||||||
|-|-|-|-|-|-|
|||||Percentage of the|Percentage of the|
|||||Company's shares|Company's voting|
|Name of parent company|Place of registration|Nature of business|Registered Capital|||
|||||held by the parent|shares held by the|
|||||company|parent company|
|Shenzhen SEG Group Co.,||Comprehensive||||
||Shenzhen||135,542.00|30.24%|30.24%|
|Ltd.||business||||

Information on subsidiaries of the Company:
The final controlling party of the enterprise is Shenzhen State-owned Assets Supervision and Administration Commission.
2. Information on subsidiaries of the Company
For information on subsidiaries of the Company, see the note.
3. Information on the Company's joint ventures and associates
For details about important joint ventures or associates of the enterprises, see the note.
Information on other joint ventures or associates involved in related party transaction with the Company in the current period or the previous period:
|||
|-|-|
|Name of joint venture or associate|Relation with the Company|

4. Information on other related parties
|||
|-|-|
|Name of other related parties|Relation with the Company|
|Shenzhen SEG Property Development Co., Ltd.|Subsidiary of shareholders|
|Shenzhen SEG Group Service Co., Ltd|Subsidiary of shareholders|
|Shenzhen SEG Computers Co., Ltd|Subsidiary of shareholders|
|Shenzhen SEG Hi-tech Industrial Co., Ltd.|Subsidiary of shareholders|
|Shenzhen SEG Real Estate Investment Co., Ltd.|Subsidiary of shareholders|
|Shenzhen SEG Business Operation Co., Ltd.|Subsidiary of the controlling shareholder|

5. Information on related transactions
(1) Related trusted management, contracting and mandatory administration and initial contracting
Trusted management/contracting of the Company:
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
|Name of||Type of|||Pricing basis for incomefrom entrusted|Confirmed trust|
||Name of entrusted||||||
||||Starting date|Ending date|||
|entrusting/contract||entrusted/contracted||||profit/contracting|
||party/contractor||||||
|issuing party||assets|||management/contracting|profit in the report|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|||||||period|
|||SEG|||||
|Shenzhen SEG|Shenzhen SEG||Sunday, February|Sunday, January|||
||||||Trusteeship Agreement||
|||Communications|||||
|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.||328,074.00|310,587.00|
||809.26 square meters on the 8th|||
||floor of SEG Plaza|||

Subsidiaries of the Company act as the lessee:
|||||
|-|-|-|-|
|||Rental recognized in the current|Rental recognized in the previous|
|Name of lessee|Type of leased assets|||
|||period|period|
|Shenzhen SEG Business Operation|15F, SEG Plaza covering 687.01||253,960.20|
|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|

 (3) Remuneration of key managers
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Remuneration of key managers|124.51|132.46|

 6. Accounts receivable from and payable to related parties
(1) Receivables
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||Closing balance||Opening balance||
|Project name|Related party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|
||Shenzhen SEG Property|||||
|Other receivables||||10,325.00||
||Development Co., Ltd.|||||
||Shenzhen SEG Group|||||
|||||227,149.60||
||Co., Ltd.|||||
||Shenzhen SEG Property|20,100.00||20,100.00||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Management Co., Ltd.|||
|Shenzhen SEG Rea|l, 139,342.00||
|||139,342.00|
|Estate Investment Co.|||
|Ltd.|||

(2) Payables
Unit: Yuan
|||||
|-|-|-|-|
|Project name|Related party|Period-end book balance|Period-end book balance|
|Dividends payable|Shenzhen SEG Computers Co., Ltd|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
|||||||
|-|-|-|-|-|-|
|Remaining lease term|Xi'an SEGElectronicsMarket Co., Ltd.|Suzhou SEGElectronics MarketManagement Co.,Ltd.|Shenzhen SEGElectronics MarketManagement Co., Ltd.|Xi'an HairongSEG ElectronicsMarket Co., Ltd.|Shenzhen SEGElectronicsMarketManagement Co.,Ltd.|
|Within one year (includingone year)|13,125,000.00|16,024,907.88|5,060,198.20|-|-|
|Above one year but withintwo years (including twoyears)|13,375,000.00|16,234,383.80|5,212,004.15|-|-|
|Above two years but withinthree years (including threeyears)|13,375,000.00|16,234,383.80|5,212,004.15|-|-|
|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|

(Continued)
|||||
|-|-|-|-|
|Remaining lease term|Nanning SEG ElectronicsMarket Management Co.,|Shunde SEGElectronics Market|Wuxi SEG ElectronicsMarket Co., Ltd|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||
|-|-|-|-|
||Ltd.|Management Co., Ltd.||
|Within one year (including oneyear)||4,800,000.00|-|
|Above one year but within twoyears (including two years)||5,040,000.00|-|
|Above two years but within threeyears (including three years)||5,040,000.00|-|
|Over 3 years||38,047,508.73|-|
|Total||52,927,508.73|Note *4|

 Note*1: Under the cooperation agreement signed by and between both parties, Xi'an Hairong SEG Electronics Market Co., Ltd. pays the rental according to70% 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 to70% 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 to70% 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|
|Shenzhen SEG Co., Ltd.|4F, SEG Plaza|46,120,804.67|
|Shenzhen SEG Co., Ltd.|Some floors of ContemporaryWindow|53,344,450.80|
|Shenzhen SEG Co., Ltd.|31F, Stars Plaza|9,480,414.61|
|Shenzhen SEG Co., Ltd.|Other houses|1,903,760.90|
|Total|110,849,430.98||

2. Contingencies
(1) Contingencies on the balance sheet date
Contingencies arising from pending litigation or arbitration and financial impacts
In March 2013, Nanning SEG leased the house located on 1F and 2F of podium building of Nanning Zhidi Square at 158
East Renmin Road, Xingning District, Nanning as the electronics market. The agreed term of tenancy is from March 18,
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. 2013 to March 17, 2025. Due to a large area of water seepage and leaking existing with the house leased, Nanning SEG lodged a lawsuit at Xingning District People's Court after negotiation with Haiqi Company for several times with no solution achieved. As Nanning SEG failed to pay the rental and breached the contract, Nanning SEG was also accused by Haiqi Company at the same court.
On June 28, 2016, the lawsuit was dismissed by Nanning Xingning District People's Court in the (2015) X. M. Y. C. Zi. Civil Judgment No. 1590. In the (2015) X. M. Y. C. Zi. Civil Judgment No. 1393, RMB 12,000,000 was involved in the case, and the Company decided not to file an appeal. The Company accrued the estimated liabilities RMB 7,000,000 for the case in 2015. Nanning SEG has estimated the rental payable RMB 2,300,000. According to the judgment, the Company additionally accrued the compensation RMB 2,700,000 based on the possible payable. As of the end of the report, the Company has recognized the accumulative estimated liabilities RMB 9,700,000.
(2) If the Company has no significant matters or contingencies to disclose, the Company shall also indicate it.
The Company has no significant matters or contingencies to disclose.
XIII. Other significant matters
1. Others
(I) Purchase of financial products with idle funds
On the second shareholders meeting held on July 21, 2014, the Proposal on Purchase of Financial Products Using Idle Funds of the Company was passed, which allows the Company and its subsidiaries to invest and manage wealth by using idle funds of no more than RMB 1,000,000,000. The general meeting of the Company approves that the general manager of the Company to can make decisions on special projects and the management of the Company executes such decisions. The investment period is from the date of resolution to June 30, 2016 (calculated since the time when the financial product is purchased).
As of June 30, 2016, the amount of financial products purchased by the Company and its subsidiaries is as follows: Unit: ten thousand Yuan
||||||
|-|-|-|-|-|
|Company name|Shenzhen SEG Co.,Ltd.|Wujiang SEGElectronics MarketManagement Co., Ltd.|Shenzhen SEG BaohuaEnterpriseDevelopment Co., Ltd.|Wuxi SEG ElectronicsMarket Co., Ltd|
|Amount|3,800.00|1,100.00|8,000.00|920.00|

 Continued:
Unit: ten thousand Yuan
||||||
|-|-|-|-|-|
|Company name|Changsha SEGDevelopment Co., Ltd.|Shenzhen SEG NanjingElectronics MarketManagement Co., Ltd.|Xi'an ElectronicsMarket Co., Ltd.|Nantong SEG TimesPlaza Management Co.,Ltd.|
|Amount|550.00|320.00|1,900.00|100.00|

XIV. Notes to the parent company financial statements
1. Accounts receivable
(1) Accounts receivable disclosed by type
Unit: Yuan
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
|Class|Book balance||Bad debt provision|||Book balance||Bad debt provision|||
||||||Book|||||Book|
||Amount|Percentage|Amount|Percentage|value|Amount|Percentage|Amount|Percentage|value|
|Accounts receivable|||||||||||
|with an insignificant|||||||||||
|amount individually,|||||||||||
||8,869,182.88|100.00%|8,869,182.88|100.00%||8,869,182.88|100.00%|8,869,182.88|100.00%||
|for which bad debt|||||||||||
|provision is|||||||||||
|separately accrued|||||||||||
|Total|8,869,182.88|100.00%|8,869,182.88|100.00%||8,869,182.88|100.00%|8,869,182.88|100.00%||

 Accounts receivable with a significant amount individually, for which bad debt provision is separately accrued at the end of period:□ Applicable√ Not applicable
Accounts receivable in the combination, for which bad debt provision was accrued by the aging analysis method:
□ Applicable√ Not applicable
Accounts receivable in a combination, for which bad debt provisions are made using the Percentage of Total Accounts Receivable Outstanding method
□ Applicable√ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
(2) Current accrued, recovered or reversed bad debt provision
The amount of the current accrued bad debt provision is RMB 0.00 Yuan and the amount of the current recovered or reversed bad debt provision is RMB 0.00 Yuan.
(3) Accounts receivable with top 5 closing balance collected based on arrears party
||||
|-|-|-|
|Name of company|Closing balance|Percentage in the total amountof accounts receivable|
|Jiangsu Unicom|3,092,011.09|34.86|
|Shenzhen Liyuanshun Industrial Co., Ltd.|1,906,865.35|21.50|
|Shanghai Tianci Industrial Co., Ltd.|899,000.00|10.14|
|Zhejiang Financial Information Co., Ltd|786,000.00|8.86|
|Sichuan Huiyuan Electronics Co., Ltd.|480,000.00|5.41|
|Total|7,163,876.44|80.77|

 2. Other receivables
(1) Other receivables disclosed by type
Unit: Yuan
||||
|-|-|-|
|Class|Closing balance|Opening balance|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
||||||Book value|||||Book value|
||Amount|Percentage|Amount|Percentage||Amount|Percentage|Amount|Percentage||
|Other|||||||||||
|receivables|||||||||||
|with single|||||||||||
||8,530,276.||8,530,276.3|||||8,530,276.|||
|||1.26%||33.32%|0.00|8,530,276.35|1.43%||100.00%||
|significant|||||||||||
||35||5|||||35|||
|amount and|||||||||||
|single bad debt|||||||||||
|provision|||||||||||
|Other|||||||||||
|receivables|||||||||||
|with bad debt|||||||||||
||652,725,6||||652,724,52|570,672,790.8||||570,671,61|
|provision|||||||||||
|||96.23%|1,173.47||||95.71%|1,173.47|0.00%||
|accrued based|98.74||||5.27|5||||7.38|
|on credit risk|||||||||||
|feature|||||||||||
|combinations|||||||||||
|Other|||||||||||
|receivables|||||||||||
|with an|||||||||||
|insignificant|||||||||||
||17,070,35||17,070,353.|||||17,070,353|||
|amount|||||||||||
|||2.52%||66.68%|0.00|17,070,353.09|2.86%||100.00%||
|individually,|3.09||09|||||.09|||
|for which bad|||||||||||
|debt provision|||||||||||
|is separately|||||||||||
|accrued|||||||||||
||678,326,3||25,601,802.||652,724,525.27|596,273,420.2||25,601,802||570,671,617.38|
|Total||100.00%||100.00%|||100.00%||4.29%||
||28.18||91|||9||.91|||

 Other receivables with a significant amount individually, for which bad debt provision is separately accrued
√ Applicable□ Not applicable
Unit: Yuan
||||||
|-|-|-|-|-|
||Closing balance||||
|Other receivables (by|||||
|company)|Other receivables|Bad debt provision|Percentage|Reason for provision|
|Yangjiang Yuntong Grease||||Unable to be recovered for|
||8,530,276.35|8,530,276.35|100.00%||
|Co., Ltd.||||aging of over 5 years|
|Total|8,530,276.35|8,530,276.35|-|-|

Among the combinations, accounts receivable for which bad debt provision is computed by aging method:
√ Applicable□ Not applicable
Unit: Yuan
2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other receivables|Bad debt provision|Percentage|
|Sub-item within 1 year||||
|Within 1 year|3,256,969.01|||
|Subtotal of accounts aged under 1||||
||3,256,969.01|||
|year||||
|1-2 years|23,469.34|1,173.47|5.00%|
|Total|3,280,438.35|1,173.47|0.04%|

 Note to basis for confirming the combination:
Other receivables in a combination, for which bad debt provisions are made using the Percentage of Total Receivables Outstanding method□ Applicable√ Not applicable
Among the combination, accounts receivable for which bad debt provision is computed by adopting other methods:
□ Applicable√ Not applicable
(2) Accrued, recovered or reversed bad debt provision in the current period
The amount of the current accrued bad debt provision is RMB 0.00 Yuan and the amount of the current recovered or reversed bad debt provision is RMB 0.00 Yuan.
(3) Classification of other receivables by nature
Unit: Yuan
||||
|-|-|-|
|Nature of receivables|Period-end book balance|Period-end book balance|
|Receivables of related parties|649,445,260.39|568,166,228.80|
|Creditor's right transfer cost|23,583,862.58|23,583,862.58|
|Imprest|498,989.14|579,868.64|
|Deposit and security deposit|1,726,559.79|1,446,667.78|
|Others|3,071,656.28|2,496,792.49|
|Total|678,326,328.18|596,273,420.29|

 (4) Other receivables with top 5 closing balance collected based on arrears party
Unit: Yuan
|||||||
|-|-|-|-|-|-|
|||||Percentage in the total||
||||||Closing balance of bad|
|Name of company|Nature of payables|Closing balance|Aging|||
|||||amount of closing balance||
||||||debt provision|
|||||of other receivables||
|Nantong SEG Times||||||
||Loans and interests|587,120,832.26|Within 3 year|86.55%||
|Square Development||||||
|Co., Ltd.||||||
|Shenzhen SEG||||||
||Loans and interests|47,088,490.03|Within 5 year|6.94%||
|Industrial Investment||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
|Co., Ltd.||||||
|Suzhou SEG Digital||||||
||Current account|10,000,000.00|Within 1 year|1.47%||
|Plaza Management Co.,||||||
|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||Book balance|Impairmentprovision||
||Book balance||Book value|||Book value|
|||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
||||||||
|-|-|-|-|-|-|-|
||||||Accruedimpairmentprovision|Closing balance of|
|||Increase in the|Decrease in the||||
|Investee|Opening balance|||Closing balance|||
|||||||impairment|
|||current period|current period||||
|||||||provision|
|Shenzhen SEG Baohua|||||||
||20,512,499.04|||20,512,499.04|||
|Enterprise Development|||||||
|Co., Ltd.|||||||
|Shenzhen SEG Industrial|||||||
||29,181,027.20|||29,181,027.20|||
|Investment Co., Ltd.|||||||
|Changsha SEG|||||||
||69,000,000.00|||69,000,000.00|||
|Development Co., Ltd.|||||||
|Shenzhen SEG Electronics|||||||
||2,100,000.00|||2,100,000.00|||
|Market Management Co.,|||||||
|Ltd.|||||||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
||||||Accrued|Closing balance of|
|||Increase in the|Decrease in the||||
|Investee|Opening balance|||Closing balance|||
||||||impairment|impairment|
|||current period|current period||||
||||||provision|provision|
|Suzhou SEG Electronics|||||||
||1,350,000.00|||1,350,000.00|||
|Market Management Co.,|||||||
|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|||||||
||20,000,000.00|||20,000,000.00|||
|Electronics Market|||||||
|Management Co., Ltd.|||||||
|Xi'an Hairong SEG|||||||
||1,530,000.00|||1,530,000.00|||
|Electronics Market Co.,|||||||
|Ltd.|||||||
|Wujiang SEG Electronics|||||||
||1,530,000.00|||1,530,000.00|||
|Market Management Co.,|||||||
|Ltd.|||||||
|Wuxi SEG Electronics|||||||
||1,530,000.00|||1,530,000.00|||
|Market Co., Ltd|||||||
|Foshan Shunde SEG|||||||
||6,000,000.00|||6,000,000.00|||
|Electronics Market|||||||
|Management Co., Ltd.|||||||
|Nanning SEG Electronics|||||||
||8,000,000.00|||8,000,000.00|||
|Market Management Co.,|||||||
|Ltd.|||||||
|Nantong SEG Times|||||||
||30,000,000.00|||30,000,000.00|||
|Square Development Co.,|||||||
|Ltd.|||||||
|Suzhou SEG Digital Plaza|||||||
||8,000,000.00|||8,000,000.00|||
|Management Co., Ltd.|||||||
|Suzhou SEG Intelligent|||||||
|||10,000,000.00||10,000,000.00|||
|Technology Co., Ltd.|||||||
|Total|269,983,526.24|10,000,000.00||279,983,526.24|||

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd. (2) Investment in cooperative enterprises and joint ventures
Unit: Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/Decrease of the year||||||||||
|||||Investment||||||||
||||||||||||Closing|
|||||gains and||||||||
||||||Adjustment of|||||||
||Opening|||||||||Closing||
|||||||Other|Issued cash|Accrued|||balance of|
|Investee||||losses||||||||
|||Additional|Negative|||||||||
||||||other|||||||
||balance||||||||Others|balance|impairment|
|||||confirmed||equity|dividends|impairment||||
|||investment|investment||comprehensive|||||||
||||||||||||provision|
|||||under the||changes|or profits|provision||||
||||||income|||||||
|||||equity||||||||
|||||method||||||||
|1. Cooperative enterprise||||||||||||
|2. Associate||||||||||||
|Shanghai SEG||||||||||||
|Electronics Market||||||||||||
||3,379,412.81|||-111,608.08||||||3,267,804.73||
|Management Co.,||||||||||||
|Ltd.||||||||||||
|Shenzhen Huakong||||||||||||
||181,743,161.07|||-4,715,142.77|48.10|||||177,028,066.40||
|SEG Co., Ltd.||||||||||||
|Shenzhen||||||||||||
|International||||||||||||
|Consumer||||||||||||
|||9,000,000.00||||||||9,000,000.00||
|Electronics||||||||||||
|Exhibition/Exchange||||||||||||
|Center Co., Ltd.||||||||||||
|Subtotal|185,122,573.88|9,000,000.00|0.00|-4,826,750.85|48.10|||||189,295,871.13||
|Total|185,122,573.88|9,000,000.00|0.00|-4,826,750.85|48.10|||||189,295,871.13||

 4. Operating income and operating cost
Unit: Yuan
||||||
|-|-|-|-|-|
||Amount incurred in the current period||Amount incurred in the previous period||
|Item|||||
||Income|Cost|Income|Cost|
|Main business|51,626,681.87|36,890,488.44|66,577,264.42|44,695,244.80|
|Total|51,626,681.87|36,890,488.44|66,577,264.42|44,695,244.80|

5. Investment income
Unit: Yuan
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Item|Amount incurred in the current period|Amount incurred in the previous period|
|Long-term equity investment income by the cost|||
||-4,826,750.85|-4,892,855.94|
|method|||
|Long-term equity investment income by the|||
||32,747,355.51|22,060,280.00|
|equity method|||
|Income from disposal of held-to-maturity|||
|||750,000.00|
|investments|||
|Others|17,841,726.10|19,701,657.06|
|Total|45,762,330.76|37,619,081.12|

 XV. Supplemental information
1. Details on non-recurring gains and losses
√ Applicable□ Not applicable
Unit: Yuan
||||
|-|-|-|
|Item|Amount|Remarks|
|Gains and losses from disposal of non-current assets|-9,316.22|Disposal loss of fixed assets|
|||The main purpose is to obtain the special reward for|
|Government subsidies included in current gains and|||
|||the service industry from Suzhou Wujiang Finance|
|losses (except those closely related with corporate|||
||101,608.00||
|||Bureau and SEG e-commerce platform support fund|
|business and enjoyed according to national standards|||
|||from Shenzhen Economy, Trade, and Information|
|or certain quota)|||
|||Commission|
|||Including: Additional accrual of the litigation|
|Other non-operating income and expenses except the|||
||-2,432,788.76||
|||compensation expenditure RMB 2,700,000 and|
|above-mentioned items|||
|||income from merchant compensation|
|Less: Amount of affected income tax|-629,774.56||
|Influenced amount of minority shareholders' equity|129,466.63||
|Total|-1,840,189.05|-|

An explanation shall be made with regard to the Company's considerations for defining non-recurring profit and loss according to the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public - Non-recurring Profit and Loss and the reason of classifying the non-recurring profit and loss listed in this announcement as recurring.
□ Applicable√ Not applicable
2. Return on equity and earnings per share
|||||
|-|-|-|-|
|||Earnings per share||
|Profit in the report period|Weighted average ROE|||
|||Basic EPS (Yuan/Share)|Diluted EPS (Yuan/Share)|

2016 Semi-Annual Financial Report of Shenzhen SEG Co., Ltd.
|||||
|-|-|-|-|
|Net profit attributable to common shareholders of the||0.0342|0.0342|
||1.82|||
|Company||||
|Net profit attributable to common shareholders of the||||
||1.94|0.0366||
|Company after deduction of -recurring losses and||||
||||0.0366|
|gains||||

3. Differences in accounting data under Chinese and overseas accounting standards
(1) Differences of net profit and net assets in this financial report calculated based on international and Chinese accounting standards
□ Applicable√ Not applicable
(2) Differences of net profit and net assets in this financial report calculated based on overseas and Chinese accounting standards
□ Applicable√ Not applicable
(3) Explanation for differences shall be given. If the Company modifies the data audited by a foreign auditing institution, the name of the foreign institution shall be indicated.