Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Shenzhen SEG Co., Ltd.
2014 Annual Report
March 2015
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Chapter 1 Important Notice, Contents, and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and senior executives guarantee that this annual report is authentic, accurate, and complete and that it has no false records, misleading statements or major omissions and they commit to the individual and joint and several legal liabilities.
All the directors except the one(s) mentioned below have attended the board meeting reviewing the annual report.
|||||
|-|-|-|-|
||Post of director not|||
|Name of director not attending||Cause of not attending||
||||Name of the entrustee|
||attending the meeting|||
|the meeting personally||the meeting personally||
||personally|||
|Li Luoli|Independent director|Travel for business|Zhou Hanjun|

Shenzhen SEG Co., Ltd. plans not to distribute cash dividends and bonus shares or convert reserved funds into share capital.
Chairman of the Board Wang Li, the Person in charge of accounting Liu Zhijun and the responsible person of the accounting institution (Accountant in charge) Ying Huadong hereby declare that the Financial Statements enclosed in this annual report are true, accurate and complete.
The forward-looking statements including future plans, development strategies and so on involved in the annual report do not constitute substantial commitment to investors. So, investors should pay attention to investment risks.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. CONTENTS
2014 Annual Report ................................................................................................................................................. 1 Chapter 1 Important Notice, Contents, and Definitions ...................................................................................... 2 Chapter 2 Company Profile .................................................................................................................................... 6 Chapter 3 Summary of Accounting Data and Financial Indexes ........................................................................ 9 Chapter 4 Report of the Board of Directors ........................................................................................................ 12 Chapter 5 Important Matters ............................................................................................................................... 47 Chapter 6 Changes in Share Capital and Information on Shareholders .......................................................... 57 Chapter 7 Preferred Stock Description ............................................................................................................... 63 Chapter 8 Information on Directors, Supervisors, Senior Executives and Employees ................................... 63 Chapter 9 Corporate Governance ........................................................................................................................ 75 Chapter 10 Internal Control ................................................................................................................................. 89 Chapter 11 Financial Statements ........................................................................................................................ 92 Chapter 12 Documents Available for Reference ............................................................................................... 196
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Definitions
||||
|-|-|-|
|Definition|Refers to|Description|
|This Company, the Company|Refers to|Shenzhen SEG Co., Ltd.|
|Shenzhen SEG Group Co., Ltd.|Refers to|Shenzhen SEG Group Co., Ltd.|
|Huakong SEG|Refers to|Shenzhen Huakong SEG Co., Ltd.|
|SEG Baohua|Refers to|Shenzhen SEG Baohua Enterprise Development Co., Ltd.|
|Xi'an SEG|Refers to|Xi'an SEG Electronics Market Co., Ltd.|
|Suzhou SEG|Refers to|Suzhou SEG Electronics Market Co., Ltd.|
|Xi'an Hairong SEG|Refers to|Xi'an Hairong SEG Electronics Market Co., Ltd.|
|Nanjing SEG|Refers to|Shenzhen SEG Electronics Market Management Co., Ltd.|
|||Shanghai SEG Electronics Market Operation Management Co.,|
|Shanghai SEG|Refers to||
|||Ltd.|
|Nantong SEG|Refers to|Nantong SEG Times Square Management Co., Ltd.|
|Changsha SEG|Refers to|Changsha SEG Development Co., Ltd.|
|||Shenzhen Mellow Orange Business Hotel Management Co.,|
|Mellow Orange Hotel|Refers to||
|||Ltd.|
|Longgang SEG|Refers to|Shenzhen SEG Electronics Market Management Co., Ltd.|
|SEG Industry|Refers to|Shenzhen SEG Industrial Investment Co., Ltd.|
|SEG E-Commerce|Refers to|Shenzhen SEG E-Commerce Co., Ltd.|
|SEG Credit|Refers to|Shenzhen SEG Credit Co., Ltd.|
|SEG Navigations|Refers to|Shenzhen SEG GPS Scientific Navigations Co., Ltd.|
|Wujiang SEG|Refers to|Wujiang SEG Electronics Market Management Co., Ltd.|
|Shunde SEG|Refers to|Fushan Shunde SEG Electronics Market Management Co., Ltd|
|Wuxi SEG|Refers to|Wuxi SEG Electronics Market Co., Ltd|
|Nanning SEG|Refers to|Nanning SEG Digital Plaza Management Co., Ltd.|
|Yantai SEG|Refers to|Yantai SEG Times Square Development Co., Ltd.|
|Suzhou SEG Digital|Refers to|Suzhou SEG Digital Life Plaza Management Co., Ltd.|
|Zhengzhou SEG|Refers to|Zhengzhou SEG Digital Plaza Management Co., Ltd.|
|||Xi'an Fengdong New Town SEG Times Square Properties Co.,|
|Xi'an Fengdong SEG|Refers to||
|||Ltd.|
|Nantong SEG Operation|||
||Refers to|Nantong SEG Commercial Operation Management Co., Ltd.|
|Company|||
|SEG Logistics|Refers to|Shenzhen SEG Logistics Co., Ltd.|
|||An integrated information platform for market management|
|SEG Universal|Refers to||
|||with the functions of access control management,|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|Definition|Refers to|Description|
|||micro-payment, query system and information distribution and|
|||so on.|
|||State-owned Assets Supervision and Administration|
|Shenzhen SASAC|Refers to||
|||Commission of Shenzhen Municipality|
|CSRC|Refers to|China Securities Regulatory Commission|
|Shenzhen Securities Regulatory||Shenzhen Securities Regulatory Bureau of China Securities|
||Refers to||
|Bureau||Regulatory Commission|
|The Articles of Association|Refers to|The Articles of Association of Shenzhen SEG Co., Ltd.|
|Unless otherwise specified, the|||
||Refers to|Amount in RMB|
|amount referred to in the report|||

Prompts for Major Risks
The forward-looking statements including the future plans, development strategies and so on involved in the annual report do not constitute substantial commitment to investors. So, investors should pay attention to investment risks.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Chapter 2 Company Profile
I. Basic Information
||||||
|-|-|-|-|-|
|Stock abbreviation||SHEN SEG, SHEN SEG B|Stock code|000058, 200058|
|Changed stock|||||
|||None|||
|abbreviation (if any)|||||
|Listed on||Shenzhen Stock Exchange|||
|Company name in|深圳赛格股份有限公司||||
|Chinese|||||
|Abbreviated Company|||||
|||深赛格|||
|name in Chinese|||||
|Company name in|||||
|||SHENZHEN SEG CO., LTD.|||
|English (if any)|||||
|Abbreviated Company|||||
|||None|||
|name in English (if any)|||||
|Registered address||31/F, Tower A, Qunxing Plaza, Huaqiang Road (N), Futian District, Shenzhen|||
|Post code||518028|||
|Office address||31/F, Tower A, Qunxing Plaza, Huaqiang Road (N), Futian District, Shenzhen|||
|Post code||518028|||
|Website||http://www.segcl.com.cn|||
|E-mail||segcl@segcl.com.cn|||

II. Contact Information
||||
|-|-|-|
||Secretary of the Board of Directors|Securities affairs representative|
|Name|Zheng Dan|Zhang Xin|
||31/F, Tower A, Qunxing Plaza, Huaqiang|31/F, Tower A, Qunxing Plaza,Huaqiang|
|Contact address|||
||Road (N), Futian District, Shenzhen|Road (N), Futian District, Shenzhen|
|Phone|0755-83747939|0755-83747939|
|Fax|0755-83975237|0755-83975237|
|E-mail|segcl@segcl.com.cn|segcl@segcl.com.cn|

III. Information Disclosure and Filing Site
|||
|-|-|
|Newspaper selected by the Company for|China Securities Journal, Securities Times, Securities Daily and|
|information disclosure|Hong Kong Commercial Daily|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||
|-|-|
|Website selected by CSRC for publishing the||
||http://www.cninfo.com.cn (Cninfo Website)|
|annual report||
|The place where the annual report is prepared|Secretary's Office of Board of Directors, 31/F, Tower A, Qunxing|
|and kept|Plaza, Huaqiang Road (N), Futian District, Shenzhen|

IV. Changes of Registration Information
|||||||
|-|-|-|-|-|-|
||||Registered number|||
||||||Organizing|
||Registration||of the corporation|Tax registration||
|||Registered address|||institution|
||date||legal person's|No.||
||||||code|
||||business license|||
|||16/F, Baohua||||
|||Technology Building,||||
|First||||||
||July 16, 1996|Huaqiang Road (N),|440301103573251|440301279253776|27925377-6|
|registration||||||
|||Futian District,||||
|||Shenzhen||||
|||31/F, Tower A,||||
|Registration||||||
|||Qunxing Plaza,||||
|at the end||||||
||April 1, 2014|Huaqiang Road (N),|440301103573251|440300279253776|27925377-6|
|of reporting||||||
|||Futian District,||||
|period||||||
|||Shenzhen||||
|||Changes to business scope on July 6, 2005: Domestic commerce, goods supply||||
|||and sale (excluding commodities under special operation, control and sale),||||
|Changes of main business||||||
|||industrial investment (licenses for specific projects shall be subject to application||||
|since the Company's listing||||||
|||on a case-by-case basis), economic information consultancy, property lease, real||||
|(if any)||||||
|||estate agency, and operation of SEG special electronics markets (the license for the||||
|||special market shall be specially applied for).||||
|Changes of controlling||||||
|||No change.||||
|shareholders (if any)||||||

V. Other Relevant Information of the Company
The accounting firm employed by the Company:
|||
|-|-|
|Name of the accounting firm|BDO Dahua CPA Co., Ltd. (special general partnership)|
|Address of the accounting||
||Room 1101, 11/F, Tower 7, No. 16 Xisihuan Road (M), Haidian District, Beijing|
|firm||
|Name of the certified public||
||Yang Xi Xin Junliang|
|accountant||

The sponsor firm employed by the Company for fulfilling the duties of continuous supervision in the reporting
period:
□ Applicable√ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. The financial advisor employed by the Company for fulfilling the duties of continuous supervision in the reporting period:
□ Applicable√ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Chapter 3 Summary of Accounting Data and Financial Indexes I. Major Accounting Data and Financial Indexes
Are retrospective adjustments made to previous financial statements due to accounting policy changes or accounting errors?
□ Yes√ No
|||||||
|-|-|-|-|-|-|
||||2013|Year-on-year|2012 (retroactive|
|||2013||||
||2014||After adjustment|increase/decrease|adjustment not|
|||Before adjustment||||
|||||(%)|involved)|
|Operating revenue|681,343,920.99|597,358,257.82||||
||||597,358,257.82|14.06%|463,807,500.77|
|(Yuan)||||||
|Net profit|48,380,294.05|54,338,735.35||||
|attributable to||||||
|shareholders of the|||54,338,735.35|-10.97%|45,587,138.06|
|listed company||||||
|(Yuan)||||||
|Net profit||||||
|attributable to||||||
|shareholders of the||||||
|listed company after|45,920,252.23|48,912,658.58|48,912,658.58|-6.12%|45,369,864.10|
|deduction of||||||
|non-recurring gains||||||
|and losses (Yuan)||||||
|Net cash flow arising|-427,933620.94|-122,530,546.70||||
|from operating|||-122,530,546.70|-249.25%|-45,987,512.97|
|activities (Yuan)||||||
|Basic EPS|0.0616|0.0692||||
||||0.0692|-10.98%|0.0581|
|(Yuan/Share)||||||
|Diluted EPS|0.0616|0.0692||||
||||0.0692|-10.98%|0.0581|
|(Yuan/Share)||||||
||3.80%|||-0.64%||
|Weighted average||||||
|||4.44%|4.44%||3.88%|
|ROE (%)||||||
|||||Year-on-year||
|||2013|2013|||
||End of 2014|||increase/decrease|End of 2012|
|||Before adjustment|After adjustment|||
|||||(%)||
|Total assets (Yuan)|2,659,717,718.28|2,134,940,597.85|2,134,940,597.85|24.58%|1,740,697,285.20|
|Net assets|1,298,970,719.85|1,250,224,375.08||||
|attributable to||||||
|shareholders of the|||1,250,224,375.08|3.90%|1,195,672,946.25|
|listed company||||||
|(Yuan)||||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. II. Differences in Accounting Data under Chinese and Overseas Accounting Standards
1. The differences of net profit and net assets in this financial report disclosed based on international and Chinese accounting standards
Unit: YUAN
||||||
|-|-|-|-|-|
||Net profit attributable to shareholders of the||Net assets attributable to shareholders of||
||listed company||the listed company||
|||||Amount at the|
||Amount in the|Amount in the|Amount at the end||
|||||beginning of the|
||current period|previous period|of the period||
|||||period|
||48,380,294.05|54,338,735.35|1,298,970,719.85|1,250,224,375.08|
|Based on Chinese|||||
|accounting standards|||||
|Adjusted items and amounts based on international accounting standards:|||||
||48,380,294.05|54,338,735.35|1,298,970,719.85|1,250,224,375.08|
|Based on international|||||
|accounting standards|||||

2. The differences of net profit and net assets in this financial report disclosed based on overseas and Chinese accounting standards
Unit: YUAN
||||||
|-|-|-|-|-|
||Net profit attributable to shareholders of the||Net assets attributable to shareholders of||
||listed company||the listed company||
|||||Amount at the|
||Amount in the|Amount in the|Amount at the end||
|||||beginning of the|
||current period|previous period|of the period||
|||||period|
|Based on Chinese|47,403,384.49|54,338,735.35|1,297,993,810.29|1,250,224,375.08|
|accounting standards|||||
|Adjusted items and amounts based on overseas accounting standards:|||||
|Based on overseas|47,403,384.49|54,338,735.35|1,297,993,810.29|1,250,224,375.08|
|accounting standards|||||

III. Items and amount of non-recurring gains and losses:
Unit: YUAN
||||||
|-|-|-|-|-|
||Amount of|Amount of|Amount of||
|Item||||Remarks|
||2014|2013|2012||
|Gains and losses from disposal of|6,475.34|||Gains on disposal of fixedassets|
|non-current assets (including the|||||
|||1,810,628.46|-3,492.79||
|write-off of asset impairment|||||
|reserves)|||||
||1,554,585.78|||Won the special subsidiesissued by Futian DistrictBureau of Science andTechnology Innovation ofShenzhen, and won the specialsubsidies issued by Shenzhen|
|Government subsidies recorded|||||
|into current gains and losses|||||
|(except those closely related with||1,117,834.72|870,280.00||
|corporate business and enjoyed|||||
|according to national unified|||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||
|-|-|-|-|-|
||Amount of|Amount of|Amount of||
|Item||||Remarks|
||2014|2013|2012||
|standard quota or ration)||||Economic, Trade andInformatization Commission.|
|Fund appropriation charges for|700,000.00||||
|non-financial entities recorded||581,000.00|581,000.00||
|into current gains and losses|||||
|Expenditures for corporate|||||
|restructuring, such as expenses|||||
|for relocation of employees and|||||
|for integration|||||
|||||Won the case with GuangzhouECS and recovered thepayment for goods, whichreversed the bad-debt provisionpreviously accrued.|
|Transferred-back impairment|||||
|provision for accounts receivable,|||||
|||3,022,045.29|||
|for which separate impairment|||||
|tests are carried out|||||
|Trustee fee from entrusted|200,000.00||||
|||200,000.00|200,000.00||
|operation|||||
|Other non-operating revenue and|498,440.96|||Liquidated damages fromdefaulting tenants collectedand so on|
|expenses except the||1,212,506.81|-1,392,736.58||
|above-mentioned items|||||
|Less: Amount of affected income|-216,991.94||||
|||-1,617,611.87|-397,102.02||
|tax|||||
|Amount of influence on|-282,468.32||||
|minority shareholders' equity||-900,326.64|359,325.35||
|(after tax)|||||
|Total|2,460,041.82|5,426,076.77|217,273.96|--|

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 for classifying the non-recurring profit and loss listed in this announcement as recurring.
□ Applicable√ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Chapter 4 Report of the Board of Directors
I. Overview
The Company stepped into the fourth year of its "12th Five-Year" Strategic Plan implementation in 2014. Under the pressure of slowing domestic macro economic growth, the Company adhered to the management concept of "securing the foothold, focusing on key points, and shifting the business direction", continued to strengthen its independent innovation, and vigorously expanded its business. With the joint effort of the Company and the invested enterprises, the performance of the Company is growing steadily. Therein, Nantong SEG Times Square Project was officially capped on December 12, 2014; the business of existed electronics markets grew steadily and continued to develop stably; the small loan business entered a stage of benign development; and the e-commerce business started to achieve turning losses into gains.
During the reporting period, the Company achieved a total operating revenue of 752,410,000 Yuan, with a17.48% increase over the previous year, mainly due to: (1) substantial increase in the income of the small loan business; (2) substantial increase in the income of the e-business; and (3) growth in the income of property rental and hotel business.
During the reporting period, the Company achieved a total profit of 111,76 million Yuan, with a6.19% increase over the previous year, mainly due to: (1) increase in the income and profit of the small loan business; (2) growth in the income from financial products investment.
II. Analysis of Main Businesses
1. Overview
Main business of the Company includes development and operation of specialized electronics market and its supporting projects, property lease service, IT product channeling retail terminal service, e-commerce and value-added small loan service.
(1) Operation of the electronics markets
In 2014, the new technical means and new business models centering on the Internet and Mobile Internet are rewriting the traditional business rules of the electronics market industry, which changes consumers' consuming behaviors and the whole traditional retail industry. Facing the intense market competition and the impact from new commercial modal, the Company strategically invested more in the research of a new model for the electronics market business and fully exerted the advantage of resources sharing in the chain markets across the country. At the same time, the Company strived to further strengthen the innovation of electronics market business and explore new business growth models while ensuring stable market operation.
During the reporting period, Wuxi SEG Electronics Market officially opened in March; Suzhou SEG Digital Plaza (Park) also began trial operation in September; Taizhou SEG Electronics Market Project has established initial intention of cooperation; and Zhengzhou SEG Digital Plaza project was approved by the Board of Directors, and began to enter the preparatory stage.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. In 2014, facing a sluggish industry environment and severe channel competitions, the Company's business in the electronics market maintained steady operation. Under a "zero accident" premise, the market operation and innovation capabilities are continuously improved. New business models were developed, such as the SEG Factory Store. A hybrid business model of "e-business+ physical stores+ marketing channel" was built up. The scalable supply and marketing channels that connect downstream buyers and upstream electronics factories were established. Direct trading with consumers was achieved through Tmall Store and physical stores. In this manner, marketing channels were merged.
During the reporting period, the Company's electronics market business achieved the revenue of 312,300,000 Yuan, with a decrease of1.67% from the previous year, mainly due to the decrease of Nanjing SEG's proprietary trading business income. Mainly due to the increase of gains from use of funds, the total profit reached 77.01 million Yuan, with an increase of4.32% over the previous year.
(2) Businesses of property leasing business
The property lease business of the Company headquarters was impeded by decline of the domestic mobile phone business and the road enclosure and traffic control due to construction of Shenzhen Metro Line No.7, and therefore the property occupancy rate and unit rent decreased compared with the same period of last year. In the year of 2014, the property operation of the Company's subsidiary SEG Baohua was steady and rose. Despite of the depressing property lease environment in Huaqiang North district and the rising vacancy rate and dramatic rent drop of the surrounding office buildings, the Company kept the occupancy rate at99% and above, and maintained the highest rent among the office buildings in Huaqiang North district by improving the service quality and taking effective business operation measures.
In the reporting period, the Company's property lease business yielded a total operation income of 66.38 million Yuan, with a year-on-year increase of1.16%, and achieved a total profit of 23.44 million Yuan, with a year-on-year increase of25.21%.
(3) Businesses of the channel retail terminal of IT products
In 2014, the IT product channel retail terminal business of SEG Industrial, a wholly owned subsidiary of the Company, stepped into a virtuous development stage. During the reporting period, the company's channel business obtained an income of 99.06 million Yuan, with a year-on-year increase of186.05%, mainly due to the revenue from the mobile phone distribution business and communications distribution business introduced in the reporting period.
(4)Business of the electronic commerce
In the second half year of 2013, the Company redefined its e-commerce business. In 2014, SEG E-Commerce's main business has shifted to the supply chain and segbuy.com. This platform provides tenants with all-around, one-stop supply chain services by using the resources of physical SEG electronics markets.
In the reporting period, the Company's e-commerce business yielded a total operation income of 46.78 million Yuan, with a year-on-year increase of588.95%, and achieved a total profit of 1.35 million Yuan, turning losses into profits compared with the same period last year. The company's revenue and profits in 2014 were mainly from the supply chain related businesses.
(5) Small loan business
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. In 2014, SEG's small loan business achieved a substantial growth. During the reporting period, the Company achieved the operating revenue of 71.07 million Yuan with the small loan business, with a year-on-year increase of63.87%, and also made a total profit of 39,650,000 Yuan, a year-on-year increase of61.38%.
The Company reviews the implementation progress of previously disclosed development strategies and business plans in the reporting period.
In accordance with the
12th
five-year plan, the Company disclosed its 2014 business plan in the 2013 Annual Report. The project is funded by the capital owned by the Company and by issuing short-term financing bonds. The following table lists the implementation progress of the 2014 business plan disclosed in the 2013 Annual Report.
||||||
|-|-|-|-|-|
|||Investment||Actual|
|||plan||amount|
|No.|Project name|(RMB ten|Progress|(RMB ten|
|||thousand||thousand|
|||Yuan)||Yuan)|
|1|Build newelectronicsmarkets basedon the leasingmodel|2,500|(1) According to the decision made in the 12th specialmeeting of the 6th Board on May 27, 2014, the Companyplanned to invest into the Zhengzhou SEG Digital Plazaproject. Together with Henan Guanlian Engineering Co.,Ltd. and Zhengzhou Coal Research Institute Ltd., theinvestment totals 6 million Yuan as the registration capital.The company planned to invest 3.06million Yuan and hold51% of the shares. Up till the end of the reporting period,this project is still at the stage of preparation, so thisinvestment item has not happened yet.(2) According to the decision made in the 15th specialmeeting of the 6th Board on July 29, 2014, the Companyplanned to invest into the Suzhou SEG Digital Life Plazaproject. The investment totals 8 million Yuan as theregistration capital for the wholly-owned subsidiarySuzhou SEG Digital Life Plaza Management Co., Ltd. Asof the end of the reporting period, the project has beenestablished, and investment fund has occurred.|800|
|2|Openelectronicsmarkets byself-construction|107,622|(1) According to the decision made in the 28th specialmeeting of the 5th Board held on January 8, 2013, theCompany planned to invest to establish Nantong SEGTimes Square Management Co., Ltd. (hereinafter referredto as Nantong SEG) to develop the Nantong SEG TimesSquare project. Nantong SEG was officially founded onFebruary 25, 2013, and the Nantong SEG Times Squareproject was officially laid the foundation stone onNovember 27, 2013; the project marketing center wasofficially opened on June 28, 2014. On December 12,2014, the ceremony for completing the major structurecapping of Nantong SEG Times Square project was held.As of the end of the reporting period, the project is stillunder construction.(2) According to the decision made in the 7th special|25,541|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||
|-|-|-|-|-|
|||Investment||Actual|
|||plan||amount|
|No.|Project name|(RMB ten|Progress|(RMB ten|
|||thousand||thousand|
|||Yuan)||Yuan)|
||||meeting of the 6th Board held on February 14, 2014, thecompany planned to invest 5 million Yuan as the capitalbase for registration to set up Nantong SEG CommercialOperation Management Co., Ltd. with sole proprietorship,which mainly works on commercial operation and propertymanagement of Nantong SEG Times Square. As of the endof the reporting period, Nantong SEG CommercialOperation Management Co., Ltd. has been set up, but the 5million Yuan capital base is not paid. This investmentfunds has temporarily not occurred.(3) According to the decision made in the 10th specialmeeting of the 6th Board held on April 4, 2014 and the 1stshareholder special meeting in 2014 held on April 23,2014, the Company planned to invest into the plotmaturation and project construction of Yantai SEG TimesSquare. On April 28, 2014, the Company participated inpublic auction for the plot maturation investor, but failed toobtain the investor qualification. This competition failuredid not bring significant influence to the Company'sproduction and operation. In the reporting period, thecompany has invested 45 million Yuan as deposit forregistration. However, due to the failure, this investmentitem has been taken back within the reporting period.(4) According to the decision made in the 14th specialmeeting of the 6th Board held on July 3, 2014 and the 2ndspecial shareholders meeting in 2014 held on July 21st2014, the Company planned to invest into the projectconstruction of Xi'an SEG Times Square. On December 31,2014, the Company participated in public auction of theland, but failed to obtain the investor qualification. Thiscompetition failure did not bring significant influence tothe Company's production and operation. In the reportingperiod, the company has invested 30 million Yuan asdeposit for registration. However, due to the failure, thisinvestment item has been taken back in January 2015.||

Reasons for the actual operating performance being more than20% over or below the disclosed annual profit forecast
□ Applicable√ Not applicable
Changes in main business models
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.□ Applicable√ Not applicable
2. Revenue
During the reporting period, the Company completed a total operating revenue of 75.241 million Yuan, with a17.48% increase over the same period of previous year, mainly due to: (1) substantial increase in the income of the small loan business; (2) substantial increase in the e-business income; (3) increase in the income of the property rental and hotel business.
Is the Company's goods sales revenue more than its service revenue?
□ Yes√ No
Information about major orders on hand
□ Applicable√ Not applicable
Information about significant changes or adjustments of any product or service in the reporting period
□ Applicable√ Not applicable
Information about the Company's major customers
|||
|-|-|
|Sales amount of top 5 customers (Yuan)|195,634,939.10|
|Proportion of the total sales amount of top 5||
||28.71%|
|customers in the annual sales (%)||

Information about top 5 customers
√ Applicable□ Not applicable
|||||
|-|-|-|-|
|No.|Client Name|Sales amount (Yuan)|Proportion in the annual sales (%)|
|1|Shenzhen Runneng Digital Co., Ltd.|110,510,446.52|16.22%|
|2|Shenzhen Wodewo Trading Co., Ltd.|39,288,132.58|5.77%|
||Shenzhen Comnet Technology Co.,|||
|3||21,296,350.41|3.13%|
||Ltd.|||
||Shenzhen Nanfang Yunhe Technology|||
|4||17,186,953.52|2.52%|
||Co., Ltd.|||
||Beijing Ruifengli Hongqing Trading|||
|5||7,353,056.07|1.08%|
||Company|||
|Total|--|195,634,939.10|28.71%|

 Other information about major customers
□ Applicable√ Not applicable
3. Cost
Industry classification
Unit: Yuan
|||||||
|-|-|-|-|-|-|
||2014||2013||Year-on-year|
|Industry classification||Proportion in||Proportion inoperating cost|increase/decrease|
||Amount||Amount|||
|||operating cost|||(%)|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
||2014||2013||Year-on-year|
|Industry classification||Proportion inoperating cost||Proportion inoperating cost|increase/decrease|
||Amount||Amount|||
||||||(%)|
|Electronics market||||||
|operation and property|267,082,161.89|47.61%|274,749,822.68|56.49%|-8.88%|
|leasing service||||||
|Trade|228,817,359.36|40.79%|184,085,676.90|37.85%|2.94%|
|Hotel|17,977,382.31|3.20%|14,862,735.64|3.06%|0.14%|
|E-commerce|42,202,184.74|7.52%|8,888,586.33|1.83%|5.69%|
|Finance|4,865,369.48|0.87%|3,824,364.20|0.79%|0.08%|
|Total|560,944,457.78|100.00%|486,411,185.75|100%||

Information about major suppliers
|||
|-|-|
|Total purchase amount of top 5 suppliers (Yuan)|289,896,825.87|
|Proportion of the total purchase amount of top 5||
||59.07%|
|suppliers in the annual purchase (%)||

Information about top 5 suppliers
√ Applicable□ Not applicable
|||||
|-|-|-|-|
||||Proportion in the annual purchase|
|No.|Name of supplier|Purchase amount (Yuan)||
||||(%)|
||Nantong Huatong Construction|||
|1||140,466,000.00|28.62%|
||Group Co., Ltd.|||
|2|Shenzhen Shuojian Industry Co., Ltd|88,650,854.94|18.06%|
||Nanjing Yunde Investment|||
|3||22,313,634.61|4.55%|
||Development Co., Ltd.|||
||Shenzhen Yixinzhongtian|||
|4||20,536,785.90|4.18%|
||Technology Co., Ltd.|||
||Changsha Juzhengxinye Computer|||
|5||17,929,550.43|3.65%|
||Technology Co., Ltd.|||
|Total|--|289,896,825.87|59.07%|

 Other information about major suppliers
□ Applicable√ Not applicable
4. Expense
|||||||
|-|-|-|-|-|-|
||||I2013 (Yuan)|ncrease/Decrease||
|No.|Item|2014 (Yuan)|||Reasons for change|
|||||(%)||
||Sale||||Due to the reduction of sales promotion expenses|
|1||2,149,313.48|3,630,236.75|-40.79%||
||expenses||||incurred during the reporting period|
||||||Due to the increase of bank loans, issuance of|
||Financial|||||
|2||9,168,643.60|-10,488,089.69|--|short-term financing bonds, and increase of interest|
||cost|||||
||||||expenses during the reporting period|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 5. Research and Development(R&D) Expenditure
Proportion ofR&D investment in the operating revenue in the recent three years:
|||||
|-|-|-|-|
||2014|2013|2012|
|R&D investment (Yuan)|1,136,073.70|1,399,040.99|3,596,604.31|
|R&D investment||||
|proportion in the||||
||0.09%|0.11%|0.30%|
|Company's latest audited||||
|net assets (%)||||
|R&D investment||||
|proportion in operating|0.17%|0.23%|0.78%|
|revenue (%)||||

During the reporting period, the company'sR&D expenditure is mainly used for the construction, upgrade, and maintenance of segbuy.com and SEG Universal. The investment will further help to improve the Company's e-business platform to improve the viability and competitiveness of the Company.
6. Cash Flow
Unit: YUAN
|||||
|-|-|-|-|
||||Year-on-year|
|Item|2014|2013||
||||increase/decrease (%)|
|Subtotal of cash inflow|2,439,133,722.87|1,363,728,760.09||
||||78.86%|
|from operating activities||||
|Subtotal of cash outflow for|2,867,067,343.81|1,486,259,306.79||
||||92.90%|
|operating activities||||
|Net cash flow from|-427,933,620.94|-122,530,546.70||
||||-249.25%|
|operating activities||||
|Subtotal of cash inflow|3,997,632,856.03|2,255,590,142.49||
||||77.23%|
|from investing activities||||
|Subtotal of cash outflow for|3,914,849,729.51|2,315,481,470.14||
||||69.07%|
|investing activities||||
|Net cash flow from|82,783,126.52|-59,891,327.65||
||||----|
|investing activities||||
|Subtotal of cash inflow|678,352,371.12|160,000,000.00||
||||323.97%|
|from financing activities||||
|Subtotal of cash outflow for|286,738,699.97|95,116,782.77||
||||201.46%|
|financing activities||||
|Net cash flow arising from|391,613,671.15|64,883,217.23||
||||503.57%|
|financing activities||||
|Net increase in cash and|46,463,186.89|-117,538,973.37||
||||---|
|cash equivalents||||

Unit: YUAN
Reasons for over30% year-on-year increase/decrease of related data
√ Applicable□ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 1. The cash inflow from operating activities has a78.86% year-on-year increase during the reporting period, mainly because:
(1) During the reporting period, the cash inflow from the supply chain services of SEG E-Commerce increases. (2) The size of SEG small loan business is increased and the interest income increases over the previous year. 2. The cash outflow for operating activities has an92.90% year-on-year increase during the reporting period, mainly because:
(1) During the reporting period, the cash outflow of the supply chain services of SEG E-Commerce increases. (2) During the reporting period, the cash outflow of Nantong SEG estate subsidiary increases.
(3) With the development of SEG small loan business, the loan issued increases from the previous year.
3. Net cash flow arising from operating activities decreases by249.25% from the previous year: The net cash flow decreases sharply because the cash outflow for operating activities during the reporting period increases due to the above reasons and is higher than the cash inflow for operating activities in the same period.
4. Cash inflow from investing activities has a year-on-year increase of77.23% during the reporting period due to rapid growth of the bank financial investment in the reporting period.
5. Cash outflow for investing activities has a year-on-year increase of69.07% during the reporting period due to rapid growth of the scale of bank financial investment in the reporting period and the corresponding increase of recovered investment funds.
6. Net cash flow arising from investing activities has a year-on-year increase during the reporting period because the bank financial investment recovered is higher than the external investment size and the income received from bank financial investment increases.
7. Cash inflow from financing activities during the reporting period has a year-on-year increase of323.97%, mainly due to the increase of loans obtained and issuance of short-term financing bonds during the reporting period.
8. Cash outflow for financing activities during the reporting period has a year-on-year increase of201.46%, mainly due to the repayment of loan principal and interest for bank loans by the subsidiary during the reporting period.
9. Net cash flow arising from financing activities has a year-on-year increase of503.57% during the reporting period, mainly due to the increase of financing scale of the Company during the reporting period.
10. Cash and cash equivalents has a year-on-year increase during the reporting period, mainly due to the combined effects of above factors 3, 6, and 9.
Reasons for the significant difference between the cash flow arising from operating activities and the annual net profit in the reporting period
√ Applicable□ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. III. Constitution of Main Business
Unit: YUAN
||||||||
|-|-|-|-|-|-|-|
|||||Year-on-year|Year-on-year|Year-on-year|
||Operating||Gross profit|increase/decrease|increase/decrease|increase/decrease|
|||Operating cost|||||
||revenue||margin|of operating|of operating cost|of gross profit|
|||||revenue (%)|(%)|margin (%)|
|By industry|||||||
|Electronics|||||||
|market|||||||
|operation and|||||||
||378,687,526.55|267,082,161.89|29.47%|-1.18%|-2.79%|1.17%|
|property|||||||
|leasing|||||||
|service|||||||
|Trade|231,763,054.54|228,817,359.36|1.27%|23.11%|24.30%|-0.95%|
|Hotel|24,114,841.00|17,977,382.31|25.45%|14.81%|20.96%|-3.79%|
|E-commerce|46,778,498.90|42,202,184.74|9.78%|858.37%|374.79%|91.88%|
|Finance|71,070,820.07|4,865,369.48|93.15%|64.99%|27.22%|2.03%|
|By product|||||||
|Not|||||||
|applicable|||||||
|By Region|||||||
|Shenzhen|550,831,410.15|384,466,835.22|30.20%|26.88%|24.94%|1.08%|
|Xi'an|54,408,611.06|40,257,634.54|26.01%|8.98%|8.68%|0.21%|
|Su Zhou|56,137,670.38|54,556,314.25|2.82%|11.98%|34.16%|-16.06%|
|Changsha|32,771,338.47|27,658,233.57|15.60%|15.73%|14.87%|0.63%|
|Nanjing|40,176,866.63|36,739,465.36|8.56%|-43.36%|-45.32%|3.29%|
|Foshan|2,331,170.63|2,266,762.37|2.76%|-18.60%|-54.88%|78.20%|
|Nanning|10,572,085.86|9,716,037.59|8.10%|155.30%|115.27%|17.09%|
|Wuxi|5,185,587.88|5,283,174.88|-1.88%||3,007.56%||

If the statistical rule of main business data is adjusted in the reporting period, the Company shall use the main business data collected at the end of the reporting period after adjustment of statistical rule.
□ Applicable√ Not applicable
IV. Analysis of Assets and Liabilities
1. Major Changes in Assets
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||End of 2014||End of 2013||||
|||Proportion||Proportion|Increase/Decrease||
|||||||Major Changes|
||Amount|in total|Amount|in total|(%)||
|||assets (%)||assets (%)|||
|Monetary|383,056,680.70||336,593,493.81||||
|||14.40||15.77|-1.37||
|funds|||||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
||End of 2014||End of 2013||||
|||Proportion||Proportion|Increase/Decrease||
|||||||Major Changes|
||Amount|in total|Amount|in total|(%)||
|||assets (%)||assets (%)|||
|Accounts|185,866,040.16||204,086,309.32||||
|||6.99||9.56|-2.57||
|receivable|||||||
|Inventory|278,281,586.72|10.46|98,000,921.50|4.59|5.87||
|Investment|462,562,882.78||481,517,481.83||||
|||17.39||22.55|-5.16||
|properties|||||||
|Long-term|82,100,197.01||112,102,810.03||||
|equity||3.09||5.25|-2.16||
|investment|||||||
|Fixed assets|41,408,298.43|1.56|41,876,654.83|1.96|-0.40||
|Construction|||||||
|in progress|||||||

2. Major Changes in Liabilities
Unit: Yuan
||||||||
|-|-|-|-|-|-|-|
||2014Proportion in totalAmountassets(%)||2013||||
|||Proportion in totalassets(%)|||Increase||
|||||Proportion|||
||||||/Decreas|Major Changes|
||||Amount|in total|||
||||||e (%)||
|||||assets (%)|||
||189,246,687.38||70,000,000.00|||This is because of the increase ofbank loans obtained by theCompany during the reportingperiod.|
|Short-termborrowing|||||||
|||7.12||3.28|3.84||

3. Assets and Liabilities Measured at Fair Value
□ Applicable√ Not applicable
4. Main Overseas Assets
□ Applicable√ Not applicable
V. Analysis of Core Competence
Main business of the Company includes development and operation of specialized electronics market and supporting projects, property lease service, IT product channel retail terminal service, e-commerce and value-added small loan service.
By December 31, 2014, the Company has set up 25 entity-based SEG electronics markets (SEG Digital Squares) in China, which forms a nationwide specialized electronics market chain covering Pearl River Delta and Yangtze River Delta. Through 26 years of effort, SEG Electronics Market has successfully combined IT complex
self-construction, leasing and trusted management, combined market service and value-added financial service,
and combined professional market, SEG factory store and distribution channels. SEG Electronics Market stand
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. out as the largest specialized electronics markets in China and even in Asia covering electronic components, IT products, and communications products and has great brand influence both at home and abroad.
In the reporting period, Shenzhen SEG Electronics Market is awarded again the title of Top 10 Flagship Market of China's Professional Electronics Market in the 14th Annual Meeting of China's Professional Electronics Market which is hosted by China Electronics Chamber of Commerce. Meanwhile, Liu Zhijun, the general manager of the Company, is awarded the title of "Operation Master of China's Professional Electronics Market in 2013".
VI. Analysis of Investment
1. Foreign equity investment
(1) Forest investment
√ Applicable□ Not applicable
||||
|-|-|-|
|Investment of the Company|||
|Investment in the reporting period|||
||Investment of last year (Yuan)|Increase/Decrease (%)|
|(Yuan)|||
|218,410,000.00|157,316,000.00|38.84%|
|Information about the invested companies|||
|||Equity proportion of listed company|
|Company name|Main business||
|||in invested company (%)|
||Development and operation of real||
|Nantong SEG Times Square|estate, lease and sales of self-owned||
|||100.00%|
|Development Co., Ltd.|house, property management, and||
||sales of electronic products||
|Suzhou SEG Digital Life Plaza|Operation and management of||
|||100.00%|
|Management Co., Ltd.|e-market||
||Development and operation of real||
|Yantai SEG Times Square|estate, lease and sales of self-owned||
|||90.00%|
|Development Co., Ltd.|house, property management, and||
||sales of electronic products||
||Development and operation of real||
|Xi'an Fengdong New Town SEG|estate, lease and sales of self-owned||
|||100.00%|
|Times Square Properties Co., Ltd.|house, property management, and||
||sales of electronic products||
|Zhengzhou SEG Digital Plaza|Operation and management of||
|||51.00%|
|Management Co., Ltd.|e-market||
|Nantong SEG Commercial Operation|||
||Property management|100.00%|
|Management Co., Ltd.|||

(2) Equity of the financing enterprises held by the company
□ Applicable√ Not applicable
The company does not hold stock equities in financial enterprises during the reporting period.
(3) Securities investment
√ Applicable□ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Securities|Initial|Shares held|Initial|Shares held|Share-holding||Gains and losses in||Source|
|Securities|Securities|||||||||Accounting||
|||short i|nvestment cost|at period|shareholding|at period|proportion|Ending book value|the reporting||of|
|type|code|||||||||item||
|||form|(Yuan)|beginning|proportion|end|(%)||period||shares|
|||YouhaoGroup||||||||Financial||
|||||||||||assets|Initial|
|Stock|600778||90,405.00|60,683|0.04%|60,683|0.04%|554,642.62|0.00|||
|||||||||||available|share|
|||||||||||for sale||
|||HuakongSEG||||||||Long-term||
||||||||||||Initial|
|Stock|000068||279,307,046.38|201,345,033|22.45%|201,345,033|22.45%|78,523,408.83|-24,324,899.21|equity||
||||||||||||share|
|||||||||||investment||
||||||||--|79,078,051.45||||
|Total|||279,397,451.38|201,405,716|--|201,405,716|||-24,324,899.21|--|--|

 (4) Equity of other listed companies held by the Company
□ Applicable√ Not applicable
The company does not hold stock equities of other listed enterprises during the reporting period.
2. Entrusted financing, derivatives investment, and entrusted loan
(1) Entrusted financing
√ Applicable□ Not applicable
Unit: RMB ten thousand Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Principal|||
|||||||||||Actual loss|
|||||||||amount|||
|||Connected||Amount of|||Remuneration|||and gain|
||Associated|||||||returned in|Projected||
|Name of trustee||transaction|Product Type|entrusted|Start Date|End Date|confirmation|||amount in|
||relationship|||||||the|income||
|||or not||financing|||method|||the reporting|
|||||||||reporting|||
|||||||||||period|
|||||||||period|||
||||||August|January 10,|||||
|Bank of China|None|No|AMZYJZT-LP13159|600|||Floating income|600|10.95|10.95|
||||||27, 2013|2014|||||
||None||||November|January 16,|||||
|Bank of China||No|AMZYJF|4,000|||Floating income|4,000|39.45|39.45|
||||||5, 2013|2014|||||
|The Agricultural|None||||December|January 24,|||||
|||No|FP7215663600|800|||Constant return|800|4.21|4.21|
|Bank of China|||||24, 2013|2014|||||
||None||||July 26,|January 27,|Floating income||||
|Bank of China||No|AMZYPW (185 days)|1,300||||1,300|32.95|32.95|
||||||2013|2014|||||
|Industrial and|None||||||Floating income||||
||||||October|January 28,|||||
|Commercial||No|QER13112|300||||300|4.23|4.23|
||||||17, 2013|2014|||||
|Bank of China|||||||||||
||None||||January|January 31,|Floating income||||
|Bank of China||No|Ji Fu Zhuan Xiang|1,500||||1,500|70.5|70.5|
||||||31, 2013|2014|||||
||None||||November|February 7,|Floating income||||
|Bank of China||No|AMZYJZT-LP13229|5,000||||5,000|66.45|66.45|
||||||1, 2013|2014|||||
||None||||November|February 7,|Floating income||||
|Bank of China||No|AMZYJZT-LP13242|7,000||||7,000|82.96|82.96|
||||||15, 2013|2014|||||
|China|None||||December|February|Floating income||||
|||No|51385|100||||100|0.74|0.74|
|Merchants Bank|||||27, 2013|10, 2014|||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Principal|||
|||||||||||Actual loss|
|||||||||amount|||
|||Connected||Amount of|||Remuneration|||and gain|
||Associated|||||||returned in|Projected||
|Name of trustee||transaction|Product Type|entrusted|Start Date|End Date|confirmation|||amount in|
||relationship|||||||the|income||
|||or not||financing|||method|||the reporting|
|||||||||reporting|||
|||||||||||period|
|||||||||period|||
|Industrial and|None||||||Floating income||||
||||||December|February|||||
|Commercial||No|3059BBX|2,000||||2,000|19.4|19.4|
||||||20, 2013|17, 2014|||||
|Bank of China|||||||||||
||None||||October|February|||||
|Bank of China||No|AMZYJZT-LP13224|8,000|||Floating income|8,000|134.1|134.1|
||||||24, 2013|21, 2014|||||
||None||||March 15,|March 14,|||||
|Bank of China||No|AMZYPW|1,500|||Floating income|1,500|65.82|65.82|
||||||2013|2014|||||
||None||||December|March 20,|||||
|Bank of China||No|AMZYJF|1,000|||Floating income|1,000|13.19|13.19|
||||||24, 2013|2014|||||
||None||||November|May 15,|||||
|Bank of China||No|AMZYZH14164|400|||Floating income|400|10.24|10.24|
||||||18, 2013|2014|||||
||None||||October|June 29,|||||
|Bank of China||No|AMZYZH14129|1,000|||Floating income|1,000|36.33|36.33|
||||||17, 2013|2014|||||
||None||||November|July 8,|||||
|Bank of China||No|AMZYJF|1,000|||Floating income|1000|36.92|36.92|
||||||5, 2013|2014|||||
||None||||November|January 15,|||||
|Ping An Bank||No|AGS131754-001|3,000|||Floating income|3,000|17.9|17.9|
||||||15, 2013|2014|||||
|Industrial and|None||||||||||
||||||June 11,|December|||||
|Commercial||No|1001RSYH|30|||Floating income|30|0.28|0.28|
||||||2014|31, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||June 11,|December|||||
|Commercial||No|1001RSYH|30|||Floating income|30|0.38|0.38|
||||||2014|31, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||June 11,|December|||||
|Commercial||No|1001RSYH|30|||Floating income|30|0.38|0.38|
||||||2014|31, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||June 11,|December|||||
|Commercial||No|1001RSYH|30|||Floating income|30|0.52|0.52|
||||||2014|31, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||June 11,|December|||||
|Commercial||No|1001RSYH|30|||Floating income|30|0.52|0.52|
||||||2014|31, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||June 11,|December|||||
|Commercial||No|1001RSYH|30|||Floating income|30|0.52|0.52|
||||||2014|31, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||June 11,|December|||||
|Commercial||No|1001RSYH|30|||Floating income|30|0.52|0.52|
||||||2014|31, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||January 2,|March 24,|||||
|Commercial||No|3059BBX|1,500|||Floating income|1,500|20.21|20.21|
||||||2014|2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||March 5,|May 19,|||||
|Commercial||No|3059BBX|2,000|||Floating income|2,000|23.32|23.32|
||||||2014|2014|||||
|Bank of China|||||||||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Principal|||
|||||||||||Actual loss|
|||||||||amount|||
|||Connected||Amount of|||Remuneration|||and gain|
||Associated|||||||returned in|Projected||
|Name of trustee||transaction|Product Type|entrusted|Start Date|End Date|confirmation|||amount in|
||relationship|||||||the|income||
|||or not||financing|||method|||the reporting|
|||||||||reporting|||
|||||||||||period|
|||||||||period|||
|Industrial and|None||||||||||
||||||May 28,|December|||||
|Commercial||No|3059BBX|3,000|||Floating income|3000|87|87|
||||||2014|10, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||June 11,|December|||||
|Commercial||No|3059BBX|5,000|||Floating income|5,000|140.84|140.84|
||||||2014|22, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||January|April 3,|||||
|Commercial||No|QER14006|800.00|||Floating income|800.00|8.77|8.77|
||||||24, 2014|2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||Ji Fu Zhuan Xiang||January|December|||||
|Commercial||No||1,300|||Floating income|1,300|69.82|69.82|
||||(364 days) 2014041||27, 2014|31, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||January|March 6,|||||
|Commercial||No|QER14009 (36 days)|2,000|||Floating income|2,000|11.24|11.24|
||||||29, 2014|2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||March 12,|September|||||
|Commercial||No|4009ZSTC|2,000|||Floating income|2,000|60.59|60.59|
||||||2014|22, 2014|||||
|Bank of China|||||||||||
||None||||March 20,|March 16,|||||
|Bank of China||No|AMZYPW|1,500|||Floating income||83.08||
||||||2014|2015|||||
|Industrial and|None||||||||||
||||||April 8,|May 27,|||||
|Commercial||No|4003ZSTA|1,200|||Floating income|1,200|8.22|8.22|
||||||2014|2014|||||
|Bank of China|||||||||||
|Industrial and|None||Financial products for||||||||
||||||May 30,|June 12,|||||
|Commercial||No|corporate customers|1,200|||Floating income|1,200|1.52|1.52|
||||||2014|2014|||||
|Bank of China|||(14 days)||||||||
||None||||July 1,|June 29,|||||
|Bank of China||No|AMZYPW|1,100|||Floating income||57.43||
||||||2014|2015|||||
||None||||January|June 30,|||||
|Bank of China||No|AMZYJF|600|||Floating income|600|14.8|14.8|
||||||23, 2014|2014|||||
||None||||May 20,|October 10,|||||
|Bank of China||No|AMZYJZT|400|||Floating income|400|7.52|7.52|
||||||2014|2014|||||
||None||||February|February|||||
|Bank of China||No|YUANAQKF|1,000|||Floating income|1,000|0.91|0.91|
||||||19, 2014|28, 2014|||||
|Industrial and|None||||||||||
||||||June 24,|December|||||
|Commercial||No|ZQL180|78|||Floating income|77.9|2.07|2.07|
||||||2014|24, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||March 17,|April 28,|||||
|Commercial||No|3059BBX|500|||Floating income|500|2.24|2.24|
||||||2014|2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||May 6,|June 16,|||||
|Commercial||No|FP7218438200|500|||Floating income|500|2.07|2.07|
||||||2014|2014|||||
|Bank of China|||||||||||
|Industrial and|None||||June 25,|August 4,|||||
|||No|4024BBXA|500|||Floating income|500|1.97|1.97|
|Commercial|||||2014|2014|||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Principal|||
|||||||||||Actual loss|
|||||||||amount|||
|||Connected||Amount of|||Remuneration|||and gain|
||Associated|||||||returned in|Projected||
|Name of trustee||transaction|Product Type|entrusted|Start Date|End Date|confirmation|||amount in|
||relationship|||||||the|income||
|||or not||financing|||method|||the reporting|
|||||||||reporting|||
|||||||||||period|
|||||||||period|||
|Bank of China|||||||||||
|China|None||||||||||
||||QianYuan financial||May 16,|June 20,|||||
|Construction||No||120|||Floating income|120|0.48|0.48|
||||products||2014|2014|||||
|Bank|||||||||||
|China|None||||January|March 11,|||||
|||No|LJSY54031|590|||Floating income|590|5.14|5.14|
|Merchants Bank|||||10, 2014|2014|||||
|China|None||||February|April 15,|||||
|||No|LJSY51392|100|||Floating income|100|0.82|0.82|
|Merchants Bank|||||14, 2014|2014|||||
||None||||||Guaranteed||||
|China|||||March 13,|June 17,|||||
|||No|52072|80|||minimum|80|1.12|1.12|
|Merchants Bank|||||2014|2014|||||
||||||||income||||
||None||||||Guaranteed||||
|China|||||March 27,|June 23,|||||
|||No|52078|1,000|||minimum|1,000|11.3|11.3|
|Merchants Bank|||||2014|2014|||||
||||||||income||||
||None||||||Guaranteed||||
|China|||||April 17,|July 2,|||||
|||No|52093|350|||minimum|350|3.43|3.43|
|Merchants Bank|||||2014|2014|||||
||||||||income||||
|China|None||||||||||
||||QianYuan financial||March 11,|May 12,|||||
|Construction||No||100|||Floating income|100|0.82|0.82|
||||products||2014|2014|||||
|Bank|||||||||||
||None||||March 7,|May 6,|||||
|Bank of China||No|AMZYPWHQ|500|||Floating income|500|4.23|4.23|
||||||2014|2014|||||
||None||||May 9,|September|||||
|Bank of China||No|AMZYJZT-LPA14126|5 00|||Floating income|500|7.31|7.31|
||||||2014|2, 2014|||||
||None||||June 6,|August 8,|||||
|Bank of China||No|AMZYJZT-LPA14165|1,200|||Floating income|1200|9.94|9.94|
||||||2014|2014|||||
||None||||June 13,|July 15,|||||
|Bank of China||No|AMZYJZT-LPA14173|100|||Floating income|100|0.4|0.4|
||||||2014|2014|||||
||None||||April 11,|July 4,|||||
|Bank of China||No|AMZYPWHQ|500|||Floating income|500|5.75|5.75|
||||||2014|2014|||||
||None||||June 9,|September|||||
|Bank of China||No|AMZYPWHQ|300|||Floating income|300|3.7|3.7|
||||||2014|9, 2014|||||
||None||||June 27,|September|||||
|Bank of China||No|AMZYPWHQ|300|||Floating income|300|3.69|3.69|
||||||2014|23, 2014|||||
||None||||March 11,|April 10,|||||
|Bank of China||No|YUANAQKF|100|||Floating income|100|0.28|0.28|
||||||2014|2014|||||
||None||||January|March 10,|||||
|Bank of China||No|AMZYPWHQ|1,800|||Floating income|1,800|14.64|14.64|
||||||13, 2014|2014|||||
||None||||January|March 20,|||||
|Bank of China||No|AMZYPWHQ|4,000|||Floating income|4,000|34.27|34.27|
||||||20, 2014|2014|||||
||None||||January|March 20,|||||
|Bank of China||No|AMZYPWHQ|2,000|||Floating income|2,000|16.26|16.26|
||||||23, 2014|2014|||||
||None||||January|March 3,|||||
|Bank of China||No|AMZYPWHQ|1,000|||Floating income|1,000|5.03|5.03|
||||||27, 2014|2014|||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Principal|||
|||||||||||Actual loss|
|||||||||amount|||
|||Connected||Amount of|||Remuneration|||and gain|
||Associated|||||||returned in|Projected||
|Name of trustee||transaction|Product Type|entrusted|Start Date|End Date|confirmation|||amount in|
||relationship|||||||the|income||
|||or not||financing|||method|||the reporting|
|||||||||reporting|||
|||||||||||period|
|||||||||period|||
||None||||February|March 24,|||||
|Bank of China||No|AMZYPWHQ|12,000|||Floating income|12,000|57.53|57.53|
||||||17, 2014|2014|||||
||None||||February|April 4,|||||
|Bank of China||No|AMZYPWHQ|8,000|||Floating income|8,000|43.31|43.31|
||||||25, 2014|2014|||||
||None||||March 25,|April 15,|||||
|Bank of China||No|YUANAQKF|12,000|||Floating income|12,000|23.2|23.2|
||||||2014|2014|||||
||None||||April 3,|April 30,|||||
|Bank of China||No|YUANAQKF|6,000|||Floating income|6,000|17.04|17.04|
||||||2014|2014|||||
||None||||April 4,|April 21,|||||
|Bank of China||No|GSRJYL01|4,500|||Floating income|4,500|5.87|5.87|
||||||2014|2014|||||
||None||||April 4,|April 25,|||||
|Bank of China||No|GSRJYL01|1,500|||Floating income|1,500|2.42|2.42|
||||||2014|2014|||||
||None||||April 4,|May 5,|||||
|Bank of China||No|GSRJYL01|8,000|||Floating income|8,000|18.41|18.41|
||||||2014|2014|||||
||None||||April 16,|April 30,|||||
|Bank of China||No|YUANAQKF|12,000|||Floating income|12,000|13.62|13.62|
||||||2014|2014|||||
||None||||April 30,|May 5,|||||
|Bank of China||No|GSRJYL01|13,500|||Floating income|13,500|5.18|5.18|
||||||2014|2014|||||
||None||||May 5,|June 10,|||||
|Bank of China||No|AMZYJZT|21,000|||Floating income|21,000|86.59|86.59|
||||||2014|2014|||||
||None||||May 21,|June 30,|||||
|Bank of China||No|GSRJYL01|16,800|||Floating income|16,800|50.26|50.26|
||||||2014|2014|||||
||None||||May 23,|June 30,|||||
|Bank of China||No|GSRJYL01|2,800|||Floating income|2,800|8.16|8.16|
||||||2014|2014|||||
|Bank of|None||||May 26,|June 9,|||||
|||No|FP7215513700|500|||Floating income|500|0.48|0.48|
|Communications|||||2014|2014|||||
|Bank of|None||||May 26,|November|||||
|||No|FP7215513700|2,000|||Floating income|1622.1|53.72|53.72|
|Communications|||||2014|17, 2014|||||
|Shanghai|None||||||||||
|Pudong||No|14HH111|8,000|June 12,|July 17,|Floating income|8000|42.96|42.96|
|Development|||||2014|2014|||||
|Bank|||||||||||
||None||||June 12,|June 30,|||||
|Bank of China||No|GSRJYL01|6,500|||Floating income|6,500|23.93|23.93|
||||||2014|2014|||||
||None||||June 12,|December|||||
|Bank of Beijing||No|GUB1408003|13,000|||Floating income|13000|338.93|338.93|
||||||2014|12, 2014|||||
|The Agricultural|None||||June 13,|June 30,|||||
|||No|BFDG|5,000|||Floating income|5,000|11.18|11.18|
|Bank of China|||||2014|2014|||||
|The Agricultural|None||||June 18,|June 30,|||||
|||No|BFDG|3,100|||Floating income|3,100|4.89|4.89|
|Bank of China|||||2014|2014|||||
||None||||June 25,|June 30,|||||
|Bank of China||No|GSRJYL01|2,400|||Floating income|2,400|0.92|0.92|
||||||2014|2014|||||
|Bank of China|None|No|AMZYJZT|750|August|November|Floating income|750|8.58|8.58|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Principal|||
|||||||||||Actual loss|
|||||||||amount|||
|||Connected||Amount of|||Remuneration|||and gain|
||Associated|||||||returned in|Projected||
|Name of trustee||transaction|Product Type|entrusted|Start Date|End Date|confirmation|||amount in|
||relationship|||||||the|income||
|||or not||financing|||method|||the reporting|
|||||||||reporting|||
|||||||||||period|
|||||||||period|||
||||||12, 2014|7, 2014|||||
||None||Feifan asset||August|February|||||
|Minsheng Bank||No||300|||Floating income||7.83||
||||management||25, 2014|26, 2015|||||
|Industrial and|None||||||||||
||||||July 17,|December|||||
|Commercial||No|ZXFG|8,000|||Floating income|8,000|178.82|178.82|
||||||2014|10, 2014|||||
|Bank of China|||||||||||
|The Agricultural|None||||July 14,|September|||||
|||No|Beilifeng|850|||Floating income|850|7.09|7.09|
|Bank of China|||||2014|22, 2014|||||
|China|None||||July 11,|September|||||
|||No|52086|500|||Floating income|500|5.24|5.24|
|Merchants Bank|||||2014|29, 2014|||||
|China|None||||||||||
||||||July 23,|August 29,|||||
|Construction||No|ZH0102|80|||Floating income|80|0.33|0.33|
||||||2014|2014|||||
|Bank|||||||||||
|Industrial and|None||||||||||
||||||August|September|||||
|Commercial||No|Li Cai Gong Ying|400|||Floating income|400|1.58|1.58|
||||||20, 2014|28, 2014|||||
|Bank of China|||||||||||
||None||||July 1|July 12,|||||
|Bank of China||No|GSRJYL01|28,500|||Floating income|28,500|24.05|24.05|
||||||2014|2014|||||
|Shanghai|None||||||||||
|Pudong||No|Cai Fu Ban Che|3,000|July 8,|August 7,|Floating income|3,000|13.8|13.8|
|Development|||||2014|2014|||||
|Bank|||||||||||
|Shanghai|None||||||||||
|Pudong||No|Cai Fu Ban Che|18,000|July 9,|August 8,|Floating income|18,000|82.85|82.85|
|Development|||||2014|2014|||||
|Bank|||||||||||
||None||||July 11,|August 12,|||||
|Bank of China||No|AMZYJZT|10,800|||Floating income|10,800|42.61|42.61|
||||||2014|2014|||||
||None||||July 21,|August 6,|||||
|Bank of China||No|GSRJYL01|1,100|||Float ingincome|1,100|1.35|1.35|
||||||2014|2014|||||
|Shanghai|None||||||||||
|Pudong||No|Cai Fu Ban Che|18,000|August|September|Floating income|18,000|82.85|82.85|
|Development|||||14, 2014|13, 2014|||||
|Bank|||||||||||
||None||||August|August 27,|||||
|Bank of China||No|GSRJYL01|9,000|||Floating income|9,000|10.36|10.36|
||||||22, 2014|2014|||||
||None||||August|October 8,|||||
|Industrial Bank||No|Jin Xue Qiu|5,000|||Floating income|5,000|30.89|30.89|
||||||28, 2014|2014|||||
||None||||July 14,|July 13,|||||
|Bank of China||No|AMZYZH|1,000|||Floating income||52.85||
||||||2014|2014|||||
||None||Feifan asset||August 8,|November|||||
|Minsheng Bank||No||700|||Floating income|700|9.19|9.19|
||||management||2014|10, 2014|||||
||None||||July 4,|January 9,|||||
|Bank of China||No|AMZYJZT|600|||Floating income||15.53||
||||||2014|2015|||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Principal|||
|||||||||||Actual loss|
|||||||||amount|||
|||Connected||Amount of|||Remuneration|||and gain|
||Associated|||||||returned in|Projected||
|Name of trustee||transaction|Product Type|entrusted|Start Date|End Date|confirmation|||amount in|
||relationship|||||||the|income||
|||or not||financing|||method|||the reporting|
|||||||||reporting|||
|||||||||||period|
|||||||||period|||
|Shanghai|None||||||||||
|Pudong||No|Cai Fu Ban Che|13,000|September|October 18,|Floating income|13,000|63.82|63.82|
|Development|||||18, 2014|2014|||||
|Bank|||||||||||
|Shanghai|None||||||||||
|Pudong||No|Li Duo Duo|5,000|September|October 23,|Floating income|5,000|23.01|23.01|
|Development|||||23, 2014|2014|||||
|Bank|||||||||||
|China Citic|None||Xincheng Cash||September|December|||||
|||No||3,000|||Floating income|3,000|36.69|36.69|
|Bank|||Management||26, 2014|9, 2014|||||
||None||||September|November|||||
|Bank of China||No|GSRJYL01|1,000|||Floating income|1,000|3.38|3.38|
||||||30, 2014|13, 2014|||||
|Shanghai|None||||||||||
|Pudong||No|Li Duo Duo|1,000|October|November|Floating income|1,000|4.76|4.76|
|Development|||||17, 2014|16, 2014|||||
|Bank|||||||||||
|Shanghai|None||||||||||
|Pudong||No|Li Duo Duo|13,000|October|November|Floating income|13,000|62.11|62.11|
|Development|||||23, 2014|22, 2014|||||
|Bank|||||||||||
|Shanghai|None||||||||||
|Pudong||No|Li Duo Duo|10,900|November|December|Floating income|10,900|50.45|50.45|
|Development|||||28, 2014|28, 2014|||||
|Bank|||||||||||
||None|||||Rolling|||||
|China Citic|||Xincheng Cash||December|type|||||
|||No||3,000||product, no|Floating income||||
|Bank|||Management||22, 2014||||||
|||||||fixed end|||||
|||||||date|||||
|Shanghai|None||||||||||
|Pudong||No|Li Duo Duo|6,400|December|January 22,|Floating income||29.46||
|Development|||||23, 2014|2015|||||
|Bank|||||||||||
||None||||December|February 5,|||||
|Bank of China||No|AMZYZH|500|||Floating income||2.84||
||||||30, 2014|2015|||||
||None|||||Rolling|||||
|Shanghai||||||type|||||
|Pudong|||||December|product,|||||
|||No|Li Duo Duo|3,000|||Floating income||||
|Development|||||30, 2014|without|||||
|Bank||||||fixed end|||||
|||||||date|||||
|Shanghai|None||||||||||
|Pudong||No|Li Duo Duo|5,800|December|January 29,|Floating income||26.7||
|Development|||||30, 2014|2015|||||
|Bank|||||||||||
|Bank of China|None|No|AMZYZH|2,000|September|September|Floating income||107.59||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Principal|||
|||||||||||Actual loss|
|||||||||amount|||
|||Connected||Amount of|||Remuneration|||and gain|
||Associated|||||||returned in|Projected||
|Name of trustee||transaction|Product Type|entrusted|Start Date|End Date|confirmation|||amount in|
||relationship|||||||the|income||
|||or not||financing|||method|||the reporting|
|||||||||reporting|||
|||||||||||period|
|||||||||period|||
||||||29, 2015|21, 2015|||||
|Industrial and|None||||||||||
||||||December|February|||||
|Commercial||No|ZXFG|500|||Floating income||3.53||
||||||15, 2014|12, 2015|||||
|Bank of China|||||||||||
||None||||October|November|||||
|Bank of China||No|AMZYZH|1,400|||Floating income|1,400|6.04|6.04|
||||||11, 2014|17, 2014|||||
||None||||November|December|||||
|Bank of China||No|AMZYZH|1,400|||Floating income|1,400|5.37|5.37|
||||||20, 2014|25, 2014|||||
|Industrial and|None||||||||||
||||||December|December|||||
|Commercial||No|1001RSYH|30|||Floating income|30|0.05|0.05|
||||||6, 2014|29, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||December|December|||||
|Commercial||No|1001RSYH|30|||Floating income|30|0.05|0.05|
||||||6, 2014|29, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||December|December|||||
|Commercial||No|1001RSYH|30|||Floating income|30|0.05|0.05|
||||||6, 2014|29, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||December|December|||||
|Commercial||No|1001RSYH|30|||Floating income|30|0.05|0.05|
||||||6, 2014|29, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||October|November|||||
|Commercial||No|3059BBX|390|||Floating income|390|1.58|1.58|
||||||15, 2014|24, 2014|||||
|Bank of China|||||||||||
|Industrial and|None||||||||||
||||||December|January 8,|||||
|Commercial||No|ZXFG|240|||Floating income||0.83||
||||||5, 2014|2015|||||
|Bank of China|||||||||||
|The Agricultural|None||||September|November|||||
|||No|Beilifeng|1,000|||Floating income|1,000|4.08|4.08|
|Bank of China|||||29, 2014|30, 2014|||||
|China|None||||October|October 27,|||||
|||No|Periodic financing|485|||Floating income|485|0.47|0.47|
|Merchants Bank|||||20, 2014|2014|||||
|China|None||||October|October 29,|||||
|||No|Periodic financing|15|||Floating income|15|0.02|0.02|
|Merchants Bank|||||20, 2014|2014|||||
||None||||November|December|||||
|Ping An Bank||No|TTL|1,700|||Floating income|1,700|2.68|2.68|
||||||26, 2014|20, 2014|||||
||None|||||Rolling|||||
|||||||type|||||
||||||December|product,|||||
|Ping An Bank||No|TTL|3,300|||Floating income||||
||||||31, 2014|without|||||
|||||||fixed end|||||
|||||||date|||||
||None||||November|February|||||
|Bank of China||No|AMZYJZT|500|||Floating income||6.31||
||||||11, 2014|17, 2015|||||
||None||||December|March 24,|||||
|Bank of China||No|AMZYJZT|300|||Floating income||3.81||
||||||23, 2014|2015|||||
|Minsheng Bank|None|No|Feifan asset|300|August|February|Floating income||7.83||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Principal|||
|||||||||||Actual lossand gainamount inthe reportingperiod|
|||||||||amount|||
|||Connectedtransactionor not||Amount of|||Remuneration||||
||Associated|||||||returned in|Projected||
|Name of trustee|||Product Type|entrusted|Start Date|End Date|confirmation||||
||relationship|||||||the|income||
|||||financing|||method||||
|||||||||reporting|||
|||||||||period|||
||||management||25, 2014|26, 2015|||||
|The Agricultural|None||||October|December|||||
|||No|Beilifeng|900|||Floating income|900|6.04|6.04|
|Bank of China|||||14, 2014|10, 2014|||||
|China|None||||October|January 19,|||||
|||No|52086|500|||Floating income||6.29||
|Merchants Bank|||||16, 2014|2015|||||
|Industrial and|None||||||||||
||||||December|February 2,|||||
|Commercial||No|Structured Deposit|650|||Floating income||2.11||
||||||31, 2014|2015|||||
|Bank of China|||||||||||
||None||||October|April 13,|||||
|Bank of China||No|Zhi Hui|400|||Floating income||10||
||||||16, 2014|2015|||||
|Total||||426,407.90|--|--|--|394,140.00|3,244.09|2820.07|

 (2) Investment of derivatives
□ Applicable√ Not applicable
Derivatives investment does not exist during the reporting period.
(3) Entrusted loaning
□ Applicable√ Not applicable
Entrusted loaning does not exist during the reporting period.
3. Use of the raised capital
□ Applicable√ Not applicable
4. Analysis of the main subsidiaries and shareholding companies
√ Applicable□ Not applicable
List of major subsidiaries and shareholding companies
Unit: YUAN
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Company|Ownershiptype||Major products|Registered|Total assets||Operating|Operatingprofit||
|||Industry||||Net assets|||Net profit|
|name|||or services|capital|||revenue|||
||||Operation and|||||||
||||management of|||||||
|||Electronics||||||||
|Wujiang SEG|Subsidiary||professional|3,000,000.00|21,056,573.04|4,012,953.08|14,370,125.01|1,602,009.97|906,209.09|
|||market||||||||
||||electronics|||||||
||||market|||||||
||||Operation and|||||||
||||management of|||||||
|||Electronics||||||||
|Wuxi SEG|Subsidiary||professional|3,000,000.00|15,435,488.57|2,691,012.81|5,185,587.88|-143,338.73|-149,430.59|
|||market||||||||
||||electronics|||||||
||||market|||||||
|Nantong SEG|Subsidiary|Development|Development|30,000,000.00|305,158,345.89|27,389,736.86||-495,673.54|2,855.92|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Company|Ownership||Major products|Registered|||Operating|Operating||
|||Industry|||Total assets|Net assets|||Net profit|
|name|type||or services|capital|||revenue|profit||
|||and operation|and operation of|||||||
|||of real estate|real estate|||||||
|||Development|Development|||||||
|Yantai SEG|Subsidiary|and operation|and operation of|45,000,000.00|432.18|432.18||432.18|432.18|
|||of real estate|real estate|||||||
||||Operation and|||||||
||||management of|||||||
|||Electronics||||||||
|Nanning SEG|Subsidiary||professional|8,000,000.00|13,192,637.98|7,786,154.93|10,572,085.86|698,050.19|769,306.36|
|||market||||||||
||||electronics|||||||
||||market|||||||
||||Operation and|||||||
||||management of|||||||
|||Electronics||||||||
|Shunde SEG|Subsidiary||professional|6,000,000.00|5,920,582.08|3,115,306.41|2,331,170.63|-46,860.95|68,400.49|
|||market||||||||
||||electronics|||||||
||||market|||||||
|SEG||||||||||
||Subsidiary|E-commerce|E-commerce|48,000,000.00|401,004,927.54|7,863,098.04|49,887,932.86|978,998.25|1,542,584.03|
|E-Commerce||||||||||
|SEG Credit|Subsidiary|Finance|Micro-credit|150,000,000.00|495,626,540.05|181,744,351.97|62,998,793.90|39,654,505.94|29,712,107.16|
||||Property|||||||
|||Property|operation and|||||||
|SEG Baohua|Subsidiary|||30,808,800.00|141,198,909.33|96,342,425.66|81,708,199.76|33,081,617.13|24,911,642.59|
|||management|management and|||||||
||||hotel business|||||||
||||Channel retail|||||||
||||terminal of|||||||
|||Electronic||||||||
||||electronic|||||||
|||product||||||||
|SEG Industry|Subsidiary||products and|25,500,000.00|84,386,518.70|31,748,178.04|232,728,130.64|3,351,934.24|3,285,760.88|
|||channel||||||||
||||property|||||||
|||business||||||||
||||operation and|||||||
||||management|||||||
||||Operation and|||||||
||||management of|||||||
|||Electronics||||||||
|Xi'an SEG|Subsidiary||professional|3,000,000.00|46,151,216.96|15,834,397.85|36,921,012.56|10,860,224.21|10,352,288.78|
|||market||||||||
||||electronics|||||||
||||market|||||||
||||Operation and|||||||
||||management of|||||||
|Longgang||Electronics||||||||
||Subsidiary||professional|3,000,000.00|20,914,312.50|7,614,283.11|10,834,930.38|2,679,272.00|2,016,637.36|
|SEG||market||||||||
||||electronics|||||||
||||market|||||||
||||Operation and|||||||
||||management of|||||||
|||Electronics||||||||
|Suzhou SEG|Subsidiary||professional|3,000,000.00|39,411,552.58|8,170,852.49|40,775,694.55|5,420,471.59|3,225,653.77|
|||market||||||||
||||electronics|||||||
||||market|||||||
||||Operation and|||||||
||||management of|||||||
|Changsha||Electronics||||||||
||Subsidiary||professional|35,000,000.00|75,884,353.79|58,407,317.29|21,651,924.25|5,233,242.10|3,807,186.43|
|SEG||market||||||||
||||electronics|||||||
||||market|||||||
|Xi'an||Electronics|Operation and|||||||
||Subsidiary|||3,000,000.00|25,207,092.62|3,670,424.17|17,487,598.50|1,655,987.42|1,634,038.45|
|Hairong SEG||market|management of|||||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Company|Ownership||Major products|Registered|||Operating|Operating||
|||Industry|||Total assets|Net assets|||Net profit|
|name|type||or services|capital|||revenue|profit||
||||professional|||||||
||||electronics|||||||
||||market|||||||
||||Operation and|||||||
||||management of|||||||
|||Electronics||||||||
|Nanjing SEG|Subsidiary||professional|20,000,000.00|28,183,951.14|11,858,971.83|40,176,866.63|1,498,117.13|2,022,297.60|
|||market||||||||
||||electronics|||||||
||||market|||||||
||||Operation and|||||||
||||management of|||||||
|Suzhou SEG||Electronics||||||||
||Subsidiary||professional|8,000,000.00|17,013,807.05|1,453,289.57|991,850.82|-6,546,710.43|-6,546,710.43|
|Digital||market||||||||
||||electronics|||||||
||||market|||||||
|Xi'an||Development|Development|||||||
|Fengdong|Subsidiary|and operation|and operation of|30,000,000.00|60,000,040.00|30,000,000.00|0.00|0.00|0.00|
|SEG||of real estate|real estate|||||||
|Nantong SEG||||||||||
|||Property|Property|||||||
|Business|Subsidiary|||5,000,000.00|18,327.38|-66.84|0.00|-66.84|-66.84|
|||management|management|||||||
|Operation||||||||||
||||Manufacturing|||||||
||||and operation of|||||||
|||Manufacturing||||||||
|Huakong|Shareholding||color picture|||||||
|||of electronic||896,671,464.00|420,734,829.16|116,437,355.90|67,194,613.97|- 106,180,314.39|- 105,387,168.32|
|SEG|company||tube (CPT), CPT|||||||
|||components||||||||
||||materials, and|||||||
||||glass apparatus|||||||
||||Operation and|||||||
||||management of|||||||
|Shanghai|Shareholding|Electronics||||||||
||||professional|5,000,000.00|30,688,607.79|10,293,666.63|21,463,752.09|791,610.45|898,454.72|
|SEG|company|market||||||||
||||electronics|||||||
||||market|||||||
||||Production and|||||||
|SEG|Shareholding|Information|operation|||||||
|||||60,000,000.00|380,296,943.71|179,182,784.99|250,490,854.20|-2,094,956.06|8,090,215.49|
|Navigations|company|industry|network service|||||||
||||of China GPS|||||||

Operation and achievement of major subsidiaries and shareholding companies
1. During the reporting period, the operating revenue of Nanjing SEG decreased by43.36% from the previous year, mainly because centralized cashier and unified billing were canceled in the phase-4 market since January 16, 2014, hence the decrease of sales income of 5.5 months compared with the same period of the last year. From June 27, 2014, the cooperation model of the phase-4 market was changed again. Nanjing SEG and China Telecom Nanjing branch canceled their agreement and completed the transfer formalities on October 30, 2014. Nanjing SEG is no longer responsible for the operation of the Tianyi Square.
2. During the reporting period, compared with last year, the operating revenue of Nanning SEG had a155.30% increase, mainly because 12 months were counted in 2014 while only three months were counted in 2013 since Nanning SEG Market opened in September 2013.
3. During the reporting period, the total profit of Suzhou SEG fell by39.64%, mainly due to the early termination
of Suzhou Metro Boutique Museum and the loss caused by Zhangjiagang Digital Boutique Museum.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 4. During the reporting period, the total profit of Xi'an Hairong SEG had a101.13% increase, compared with the last year, mainly because the market gradually becomes mature, the rent of some commercial spaces increased, and the income from financial product investment also increased. Therefore, the total profit of Xi'an Hairong SEG had a significant increase compared with the last year.
5. During the reporting period, compared with last year, the income of Wujiang SEG had a35.90% increase and the total profit had a96.35% increase, mainly because 4 quarters were counted in 2014 while only three quarters were counted in 2013 since Wujiang SEG opened in March 2013. The increases of operating revenue and income from financial products investment also made the total profit significantly increase compared with the last year. 6. During the reporting period, the operating revenue of SEG e-business also had a634.85% increase over the previous year, mainly because the new supply chain business entered a stage of stable development and achieved some success, thereby making the year 2014 achieve profitability with a net profit of 1,543,600 Yuan.
7. During the reporting period, the total profit of SEG Baohua had a33.47% increase over the previous year, mainly because the Company cut costs amid the overall poor performance in the Huaqiang North property rental market in an effort to keep the property occupancy rate and rent level at a high level and meanwhile, the Orange Hotel achieved growth in business performance.
8. During the reporting period, the operating revenue and total profit of SEG Credit had a45.25% increase and a63.95% increase respectively over the last year. This is mainly because, during the reporting period, in addition to full investment of capital funds, SEG Credit increased loans through bank financing and issuance of short-term financial instruments, which increased the business scale and significantly improved income and profits.
Information about the acquisition and disposal of subsidiaries in the reporting period
√ Applicable□ Not applicable
|||||
|-|-|-|-|
||Purpose of acquisition and|Ways of acquisition and|Impact on the overall|
|Company name|disposal of subsidiaries in|disposal of subsidiaries in|production and|
||the reporting period|the reporting period|performance|
||Focus on major business||Increased the net profit by|
|Yantai SEG Times Square||Invested and||
||according to strategies of||RMB 400 Yuan during the|
|Development Co., Ltd.||newly-deployed||
||the Company||reporting period.|
|Nantong SEG Commercial|Focus on major business||Reduced the net profit by|
|||Invested and||
|Operation Management|according to strategies of||RMB 70 Yuan in the|
|||newly-deployed||
|Co., Ltd.|the Company||reporting period.|
||Focus on major business||Reduced the net profit by|
|Suzhou SEG Digital Plaza||Invested and||
||according to strategies of||RMB 6,546,700 Yuan in the|
|Management Co., Ltd.||newly-deployed||
||the Company||reporting period.|
|Xi'an Fengdong New Town|Focus on major business|||
|||Invested and|No impact on the net profit|
|SEG Times Square|according to strategies of|||
|||newly-deployed|during the reporting period.|
|Properties Co., Ltd.|the Company|||

5. Major projects invested not by raised capital
√ Applicable□ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Unit: RMB ten thousand Yuan
|||||||
|-|-|-|-|-|-|
||||Actual|||
||Planned|Amount invested|accumulated|||
|Project name|investment|during the current|amount invested|Progress|Profit|
||amount|reporting period|till the end of the|||
||||reporting period|||
||||||Net profit|
||||||increased by|
|Nantong SEG||||Under||
||62,500|18,041|28,579||RMB 2900 Yuan|
|Times Square||||construction||
||||||during the|
||||||reporting period.|
|||||Investment funds|Net profit|
|||||have been|increased by|
|Yantai SEG Times||||||
||80,100|4,500|0|recovered during|RMB 400 Yuan|
|Square||||||
|||||the reporting|during the|
|||||period|reporting period.|
|||||Investment funds||
|Xi'an Fengdong||||||
|||||have been||
|New Town SEG|60,000|3,000|3,000||No net profit|
|||||recovered in||
|Time Square||||||
|||||January 2015||
|Total|202,600|25,541|31,579|--|--|

 VII. Estimation of the Business Performance from January to March in 2015
Warning of and reasons for forecasts on loss or sharp year-on-year change in the accumulated net profit from the year beginning to the end of next period
□ Applicable√ Not applicable
VIII. Entities for Special Purpose Controlled by the Company
□ Applicable√ Not applicable
IX. Outlook for future development of the Company
1. Competition situation and development trend
(1) External macro environment
In future, China's macro economy will enter the new normal. Essentially, the economic development will evolve from the traditional extensive and high-speed growth phase to a high-efficiency, low-cost, medium to high-speed and sustainable growth phase.
In another aspect, with the booming economic development of Internet, China's total online retail trade accounted for7.8% of the total retail sales of social consumer goods in 2013, up from1.2% in 2008. In the first half in 2014, online retail market transactions reached about 1.1 trillion Yuan, accounting for8.4% of the total retail sales of
social consumer goods, with an increase of33.4% over the same period of last year. China has become the world's
largest online retail market.
(2) Industry situation
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. New technologies bring new consumption habits, new business models and new services business. The entity electronic market based on the traditional business model and service model is in recession in this round of technological change.
With the development of the Internet in recent years, the rapid development and popularization of mobile Internet and terminal services have had a profound impact on people's way of thinking, behavior, shopping, consumption habits, and brought even subversive challenges in certain fields. Meanwhile, with the rapid development of Internet finance, the acquisition and application of big data, Internet of Things, cloud computing, the oligopoly of e-business platforms, as well as vertical market segments, have brought various new business models, which change the consumption habits. Traditional stall-based business model cannot meet the requirements for business models and channel types of the modern service industry, and falls behind the growing consumption demand. The entity electronic market based on the traditional business model and service model is in recession in this round of technological change. The entity electronic markets in tier-1 and tier-2 cities of China have shown a trend of contraction and recession.
Flourish development of e-business and mobile Internet cause huge impacts on the channels and customer resources of the entity electronic market, particularly in the following aspects: 1) with the changes in the consumption habits of consumers, the entity electronic market suffers a serious loss of consumers; 2) with the change of product channels in the Internet economy, the support of electronic products manufacturers to the entity electronic market has a large decline.
(3) Analysis of internal business environment
1) Facing enormous challenges in the main business, the Company urgently needs to implement transformation and upgrading and to seek new strategic business and profit growth opportunities; at the same time, the Company continues innovation and development, and actively explores new electronic market business models. Seizing the opportunity of the "SEG Factory Store", the Company actively explores the O2O entry points for electronic market business and e-business under the Internet business model. From the aspects of e-business platform construction, wholesale channel expansion, and entity store sales, the Company carries out a cross-border hybrid business model integrating entity, e-business and channel. The Company also adjusts the market layout. By introducing a composite business format, the Company improves the market occupancy rates, improves the risk tolerance capabilities of stores, and ensures market operating revenue.
2) The Company has rich commercial tenant resources and mature market operation management experience. At present, the Company has formed a professional electronic market chain system nationwide, covering the Pearl River Delta and Yangtze River Delta areas. After years of efforts, SEG Electronics Market has rich customer resources and market operation management experience, and enjoys high brand awareness both at home and abroad.
3) The Company has a reasonable asset structure and strong financing capacity.
2. Future development strategies of the Company
In future, the Company will actively make innovation and progress while maintaining stability, deeply develop customer value based on in-depth analysis of customer demands, establish a multi-channel profit model, and become an integrated platform operator and service provider.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 3. Operation plan in 2015
In this year, the Company's operating guideline is "transformation, innovation and development". Under the premise of maintaining steady development of the existing business, the Company will actively explore new business, and create the multi-channel profit model driven by the capital and resources; meanwhile, the Company will properly prepare for sales and operations of the Nantong SEG Project.
4. Investment plan in 2015
The annual investment plan for 2015 focuses on the Company's main business, including the investments on the continued construction and land reserves of the entity electronic stores and Nantong SEG Times Square project, with a total expected investment of 594.01 million Yuan.
|||||
|-|-|-|-|
|||Investment plan||
|No.|Project name|(RMB ten thousand|Remarks|
|||Yuan)||
|1|Build new electronicsmarkets|2,000|U sed for rental|
|2|Nantong SEG TimesSquare|27,401|In 2015, according to the plan, the mainstructure capping of Nantong SEG TimesSquare project and decorative works willbe basically completed, and externalproperty sales targets will be achieved.The expected investment is 349.3 millionYuan, which will be loaned by NantongSEG from the joint-stock company.|
|4|Land reserve forcommercial real estateprojects|30,000|Used for reserve lands for commercialreal estate projects|
||Total|59,401||

5. Possible risks confronting the Company and countermeasures
(1) Main risks faced by the Company
1) The competitive pressure in traditional industry continues to increase. Meanwhile, the e-business platform further changes the consumption habits. The support from manufacturers suffers a larger decline, which increases the market operating risks.
2) According to the macro environment of the real estate industry, there is a certain risk in sales and operation of the Nantong SEG Project.
3) Restricted by the funding constraints and declining interest rate in the market, the development of small loan business is slow. Meanwhile, affected by the slowdown in the real economy, the small loan business faces issues such as weak growth and falling yield.
4) Resources in the Company's talent pool are insufficient.
(2) Main countermeasures:
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 1) Accelerate the Company's strategic business transformation and upgrading. Through the transformation and upgrading, the Company will seek new strategic business and profit growth opportunities, to constantly improve the company's risk tolerance.
2) With respect to the Nantong SEG Project, the Company will exploit the strengths and selling points, strengthen the promotion, expand the market space, and continuously adjust and improve the business planning and positioning for attracting differentiated investments.
3) The Company will fully use all kinds of resources, to achieve effective integration and sharing of resources, obtain an amplified effect of integration, and ensure the achievement of strategic business objectives.
4) The Company will fully employ the HR management capability, deeply study the incentive mechanism and personnel training programs, introduce practical talents and prospective talents; meanwhile, work out scientific and practical talent training programs for talent reservation.
5) The Company will ceaselessly improve HRM level, and formulate the motivation mechanism and medium and long term training plan, and actively introduce inward actual combat-type talents and prospective research talents. X. Explanations of the Board of Directors and Board of Supervisors to the Non-standard Audit Report made by the accounting firm in the reporting period
□ Applicable√ Not applicable
XI. Information on changes in accounting policies, accounting estimates and accounting methods compared with the financial reports of 2013
√ Applicable□ Not applicable
1. Changes of main accounting policies and accounting estimates
(1) Changes of accounting policies
Explanation of changes of accounting policies
In 2014, the Ministry of Finance has promulgated or revised a series of corporate accounting policies. The Company has implemented new corporate accounting policies from July 1, 2014 and has adjusted the comparative financial statements in accordance with the provisions of the new guidelines. The impacts on the comparative financial statements caused by the new corporate accounting policies are as follows:
1) Long-term equity investment
1) According to the revised Long-Term Equity Investment Policies, the accounting of the long-term equity investment that does not involve the control, joint control, or significant influence on the invested organizations are incorporated in the available-for-sale financial assets. For the equity investment that does not have price quotations in the active market, whose fair value cannot be reliably measured, subsequent measurement is implemented according to the costs; for other equity investments, subsequent measurement is implemented according to the fair value. The above changes in accounting policies retrospectively affect the following items:
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. January 31, 2013
Share-h
olding
Invested organization Financial assets Shareholders' equity proporti Long-term equity
available for sale attributable to the parent on investment(+/-)
(+/-) company(+/-) Nanjing Shangsha Co.,
0.68 -280,000.00 280,000.00 --- Ltd
Anshan Yibai Co., Ltd --- --- --- --- Shenzhen SEG GPS
Scientific Navigations 12.50 -13,515,392.83 13,515,392.83 --- Co., Ltd.
Total --- -13,795,392.83 13,795,392.83 --- December 31, 2013
Share-h
olding
Invested organization Shareholders' equity proporti Long-term equity Financial assets
attributable to the parent on(%) investment(+/-) available for sale(+/-)
company(+/-) Nanjing Shangsha Co.,
0.68 -280,000.00 280,000.00 --- Ltd
Anshan Yibai Co., Ltd --- --- --- --- Shenzhen SEG GPS
Scientific Navigations 12.50 -13,515,392.83 13,515,392.83 --- Co., Ltd.
Kasggar Shenzhen City
3.03 -20,000,000.00 20,000,000.00 --- Co., Ltd.
合计 --- -33,795,392.83 33,795,392.83 --- 2) Impacts on the Consolidated Financial Statements:
a) According to the revised Accounting Standard for Business Enterprise No. 30 - Presentation of Financial Statements, the Company has adjusted the part of the original capital reserve attributable to other comprehensive income to be presented as other comprehensive income items, and adjusted the presentation of the opening
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. amount of the year by using the retroactive adjustment method. The impacts of retroactive adjustment are as follows:
January 1, 2013 December 31, 2013
Item
Before adjustment After adjustment Before adjustment After adjustment Capital reserve 404,380,330.57 322,015,117.44 404,593,024.05 322,272,354.94 Other comprehensive income 82,365,213.13 82,320,669.11 Total 404,380,330.57 404,380,330.57 404,593,024.05 404,593,024.05 b) According to the revised Accounting Standard for Business Enterprises No. 30 - Presentation of Financial Statements, the Company has separately presented the deferred income and adjusted the presentation of the opening amount of the year by using the retroactive adjustment method. The impacts of retroactive adjustment are as follows:
January 1, 2013 December 31, 2013
Item
Before adjustment After adjustment Before adjustment After adjustment Deferred income 320,080.91 762,246.19 Other non-current liabilities 320,080.91 762,246.19
Total 320,080.91 320,080.91 762,246.19 762,246.19 (2) Changes of accounting estimates
No change was made to the main accounting estimates in the reporting period.
XII. Information on retroactive restatements in corrections of major accounting errors in the reporting period
□ Applicable√ Not applicable
There is not retrospective restatement due to corrections on significant accounting errors in the reporting period. XIII. Information on changes in the scope of consolidation compared with the financial report of 2013
√ Applicable□ Not applicable
(1) Subsidiaries, special-purpose entities and operating entities whose controlling right is formed through trustee operation or lessee, which are included in the consolidation scope for the first time in this period.
|||||
|-|-|-|-|
|||Year-end net assets|Net profits of the|
|Name|Reasons for change|(in 10 thousand|current period (in 10|
|||Yuan)|thousand Yuan)|
|Yantai SEG Times Square DevelopmentCo., Ltd.|New controlledsubsidiary|0.04|0.04|
|Nantong SEG Commercial OperationManagement Co., Ltd.|New controlledsubsidiary|-6.68|0.007|
|Suzhou SEG Digital Plaza ManagementCo., Ltd.|New controlledsubsidiary|145.33|-654.67|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||
|-|-|-|-|
|||Year-end net assets|Net profits of the|
|Name|Reasons for change|(in 10 thousand|current period (in 10|
|||Yuan)|thousand Yuan)|
|Xi'an Fengdong New Town SEG TimeSquare Properties Co., Ltd.|New controlledsubsidiary|3000.00|-|

(2) Subsidiaries, special-purpose entities and operating entities whose controlling right is formed through trusted operation or lease taking, which are excluded from the consolidation scope in the current year
XIV. Information about the profit and dividend distribution of the Company
The formulation, implementation, and adjustments of profit distribution policies during reporting period
√ Applicable□ Not applicable
1. The formulation, implementation, and adjustments of profit distribution policies during reporting period 1) In 2012, to improve and improve the Company's dividend distribution and monitoring mechanisms, further improve the transparency of profit distribution policies and effectively protect the legitimate rights and interests of all shareholders, in accordance with the relevant regulations and requirements, the Company established the Shareholder Return Plan for the Upcoming Three Years (2012 to 2014), and amended pertinent profit distribution clauses in the Articles of Association. The preceding agenda has been reviewed and approved in the first Extraordinary General Meeting of Shareholders held in 2012.
In 2014, according to the Company Law implemented since March 1, 2014 and the Listed Company Supervision Guidelines No. 3 - Cash Dividends of Listed Companies issued by China Securities Regulatory Commission, combined with the actual situation of the Company, the Company revised the terms of profit distribution in the Articles of Association. The revised terms clearly define the principles of profit distribution, profit distribution forms, cash dividend proportion and conditions, and decision-making procedures for profit distribution. This agenda has been approved in the third Extraordinary General Meeting of Shareholders held in 2014.
2) During the reporting period, the profit distribution proposal and the proposal for transfer of capital reserve into share capital of 2013 complied with related regulations in the Articles of Association and Return Plan, and the deliberation procedure accorded with related regulations. There were no circumstances that could damage the interests of the Company and shareholders. The independent directors expressed the independent opinion.
|||
|-|-|
|Cash Dividend Policies||
|Whether comply with the provisions of the Articles of||
||Yes|
|Association or the resolutions of shareholders' meeting||
|Whether the dividends standards and proportions are||
||Yes|
|clear and explicit||
|Whether the decision-making procedures and||
||Yes|
|mechanisms are complete||
|Whether independent directors perform their duties||
||Yes|
|responsibly and play their roles||
|Whether minority shareholders have sufficient||
|opportunities to express their views and aspirations,||
||Yes|
|whether their legitimate rights and interests have been||
|fully protected||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||
|-|-|
|Whether the conditions and procedures for cashdividend policy adjustments or changes are compliantwith regulations and are transparent||
||Yes|

2. Information about the profit distribution proposal and the proposal for transfer of capital reserve into share capital in the years of 2012, 2013 and 2014 (the reporting period):
Pursuant to Accounting Standard for Business Enterprise 2014, the investment in subsidiaries by the Company was calculated on the basis of cost method, and there is a large difference between the profit of parent company and the consolidated profit. According to relevant provisions of the Company Law, profits shall be distributed by the parent company. Therefore, the profit distribution of the Company in 2014, 2013, and 2012 was implemented depending on the distributable profit of the parent company.
1) Profit distribution proposal and the proposal for transfer of capital reserve into share capital in 2014: The auditing by Da Hua Certified Public Accountants Co., Ltd. found that the net profit attributable to the listed company realized by the parent company in 2014 amounted to RMB 32,887,973.01Yuan; the profit distributable to shareholders this time, which was calculated by adding the undistributed profit at the beginning of the year, RMB -55,097,962.63 Yuan to the former, was RMB-22,209,989.62 Yuan. No profit distribution would be made for the current year. The Company decided not to transfer capital reserve into share capital.
2) Profit distribution proposal and the proposal for transfer of capital reserve into share capital in 2013: The auditing by Da Hua Certified Public Accountants Co., Ltd. found that the net profit attributable to the listed company realized by the parent company in 2013 amounted to RMB 51,015,079.16 Yuan; the profit distributable to shareholders this time, which was calculated by adding the undistributed profit at the beginning of the year, RMB -106,113,041.79 Yuan to the former, was RMB -55,097,962.63 Yuan. No profit distribution would be made for the current year. The Company decided not to transfer capital reserve into share capital.
3) Profit distribution proposal and the proposal for transfer of capital reserve into share capital in 2012: The auditing by Da Hua Certified Public Accountants Co., Ltd. found that the net profit attributable to the listed company realized by the parent company in 2012 amounted to RMB 39,043,691.65 Yuan; the profit distributable to shareholders this time, which was calculated by adding the undistributed profit at the beginning of the year, RMB -145,156,733.44 Yuan to the former, was RMB -106,113,041.79 Yuan. No profit distribution would be made for the current year. The Company decided not to transfer capital reserve into share capital.
Table of distribution of cash dividends by the Company in the last three years
Unit: YUAN
|||||||
|-|-|-|-|-|-|
|||Net profit|Proportion of net|||
|||||Amount of share|Proportion of|
|||attributable to|profit attributable|||
||Amount of cash|||funds repurchased|share funds|
|Year for dividends||shareholders of|to shareholders of|||
||dividends (incl.|||in cash|repurchased in|
|distribution||listed company in|listed company in|||
||tax)|||incorporated in|cash incorporated|
|||consolidated|consolidated|||
|||||cash dividends|in cash dividends|
|||statement|statement (%)|||
|2014|0.00|48,380,294.05|0.00%|0.00|0.00%|
|2013|0.00|54,338,735.35|0.00%|0.00|0.00%|
|2012|0.00|45,587,138.06|0.00%|0.00|0.00%|

The net profit of the Company was positive and the undistributed profit of the parent company was also positive,
but the proposal for distribution of cash dividends was not put forward.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.□ Applicable√ Not applicable
XV. Plan of profit distribution and transferring the capital reserve to shares in the reporting period
□ Applicable√ Not applicable
In this year, the Company plans not to distribute cash dividend or shares, nor transfer the capital reserve to shares. XVI. Social responsibilities
□ Applicable√ Not applicable
XVII. Registration form for investigations, communication and interviews in the reporting period
√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||||Main content of discussion and|
|Time|Place|Means|Type|Object||
||||||the materials provided|
||||||Inquired profit situation of the|
||||||Company in 2013. Inquired loss|
||||||or gain of the Company in 2013|
||At the||||and why the share price did not|
|January 10, 2014||Phone call|Individual|Investor||
||Company||||rise. The company provided no|
||||||documents. The investors can read|
||||||the annual report 2013 disclosed|
||||||on March 20, 2014.|
||||||Inquired situation of China GPS|
||||||whose 12.5% shares are held by|
||||||the Company and what are the|
||At the|||||
|January 14, 2014||Phone call|Individual|Investor|main businesses of the Company.|
||Company|||||
||||||The company provided basic|
||||||documents of China GPS and the|
||||||Company.|
||||||Inquired profit situation of the|
||||||Company in 2013. The company|
|February 10,|At the||||provided no documents. The|
|||Phone call|Individual|Investor||
|2014|Company||||investors can read the annual|
||||||report 2013 disclosed on March|
||||||20, 2014.|
||||||Inquired why the share of the|
||||||Company is not appreciated. The|
|February 11,|At the|||||
|||Phone call|Individual|Investor|Company provided the basic|
|2014|Company|||||
||||||information and regularly|
||||||disclosed reports of the Company.|
||||||Inquired what are the main|
||||||businesses of the Company The|
|February 17,|At the|||||
|||Phone call|Individual|Investor|Company provided the basic|
|2014|Company|||||
||||||information and regularly|
||||||disclosed reports of the Company.|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||||Main content of discussion and|
|Time|Place|Means|Type|Object||
||||||the materials provided|
||||||Inquired whether the Company|
||||||is operated normally. The|
|February 20,|At the|||||
|||Phone call|Individual|Investor|company provided the basic|
|2014|Company|||||
||||||introduction to the Company and|
||||||the latest regular report.|
||||||Inquired the time for disclosing|
|February 21,|At the||||the annual report. The Company|
|||Phone call|Individual|Investor||
|2014|Company||||informed that the annual report is|
||||||disclosed on March 30, 2014.|
||||||Inquired the reason for temporary|
||At the||||suspension. The company|
|March 10, 2014||Phone call|Individual|Investor||
||Company||||informed the resumption on the|
||||||day.|
||||||Inquired why the Company gave|
||At the||||up the control over Huakong|
|March 10, 2014||Phone call|Individual|Investor||
||Company||||SEG. The company replied based|
||||||on the notice contents.|
||||||Inquired why the Company gave|
||||||up the control power over|
||At the|||||
|March 11, 2014||Phone call|Individual|Investor|Huakong SEG. The company|
||Company|||||
||||||replied based on the notice|
||||||contents.|
||||||Inquired why the Company gave|
||At the||||up the control over Huakong|
|March 12, 2014||Phone call|Individual|Investor||
||Company||||SEG. The company replied based|
||||||on the notice contents.|
||||||Inquired the detailed operation|
||||||situation of the Company in the|
||At the||||first quarter. The company|
|March 19, 2014||Phone call|Individual|Investor||
||Company||||informed that the report for the|
||||||first quarter in 2014 will be|
||||||disclosed soon.|
||||||Inquired the investment on Yantai|
||At the||||project. The Company informed|
|April 21, 2014||Phone call|Individual|Investor||
||Company||||the related disclosed|
||||||announcement.|
||||||Inquired the specific company|
||At the||||address to attend the shareholders'|
|April 22, 2014||Phone call|Individual|Investor||
||Company||||meetings. The Company informed|
||||||the specific address.|
||||||Inquired the detailed operation|
||||||situation of the Company in the|
||At the||||second quarter. The company|
|June 27, 2014||Phone call|Individual|Investor||
||Company||||informed that the semi-annual|
||||||report of 2014 will be disclosed|
||||||soon.|
||||||The company introduced the|
||At the|Spot||Guotai Junan|company service model and basic|
|July 11, 2014|||Institution|||
||Company|investigation||Securities|operation conditions, property|
||||||assets, and entity stores.|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||||Main content of discussion and|
|Time|Place|Means|Type|Object||
||||||the materials provided|
||||||Inquired the future development|
||||||direction and the current market|
||At the|||||
|July 12, 2014||Phone call|Individual|Investor|situation, provided suggestions to|
||Company|||||
||||||the Company's management and|
||||||development.|
||||||Inquired the time for disclosing|
||||||the semi-annual report of 2014.|
||At the|||||
|July 14, 2014||Phone call|Individual|Investor|The company informed that the|
||Company|||||
||||||semi-annual report of 2014 is|
||||||disclosed on August 29, 2014.|
||||||Inquired the specific operation|
||||||situation of the first half year in|
||At the|||||
|August 25, 2014||Phone call|Individual|Investor|2014. The company informed that|
||Company|||||
||||||the semi-annual report of 2014|
||||||will be disclosed soon.|
||||||Inquired the suspension cause and|
||At the|||Investors (11||
|August 28, 2014||Phone call|Individual||resumption time. The Company|
||Company|||persons)||
||||||replied accordingly.|
||||||Inquired the suspension cause and|
|September 1,|At the|||Investors (10||
|||Phone call|Individual||resumption time. The Company|
|2014|Company|||persons)||
||||||replied accordingly.|
||||||Inquired the suspension cause and|
|September 2,|At the|||Investors (8||
|||Phone call|Individual||resumption time. The Company|
|2014|Company|||persons)||
||||||replied accordingly.|
||||||Inquired the suspension cause and|
|September 3,|At the|||Investors (5||
|||Phone call|Individual||resumption time. The Company|
|2014|Company|||persons)||
||||||replied accordingly.|
||||||Inquired the suspension cause and|
|September 4,|At the|||Investors (4||
|||Phone call|Individual||resumption time. The Company|
|2014|Company|||persons)||
||||||replied accordingly.|
||||||Inquired the accounting methods|
|September 5,|At the|||Investors (4||
|||Phone call|Individual||of Huakong SEG's stock equity.|
|2014|Company|||persons)||
||||||The Company replied accordingly.|
||||||Inquired the accounting methods|
|September 9,|At the|||||
|||Phone call|Individual|Investor|of Huakong SEG's stock equity.|
|2014|Company|||||
||||||The Company replied accordingly.|
||||||Inquired the time for disclosing|
||||||the third quarterly report in 2014.|
|September 15,|At the|||||
|||Phone call|Individual|Investor|The Company informed that the|
|2014|Company|||||
||||||report is disclosed on October 31,|
||||||2014.|
||||||Inquired the time for disclosing|
||||||the third quarterly report in 2014.|
|September 22,|At the|||||
|||Phone call|Individual|Investor|The Company informed that the|
|2014|Company|||||
||||||report is disclosed on October 31,|
||||||2014.|
||||||Inquired the future development|
|September 23,|At the||||direction and the current market|
|||Phone call|Individual|Investor||
|2014|Company||||situation, provided suggestions to|
||||||the Company's management and|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||||Main content of discussion and|
|Time|Place|Means|Type|Object||
||||||the materials provided|
||||||development.|
||||||Inquired the detailed operation|
||||||situation of the Company in the|
|September 24,|At the||||third quarter. The Company|
|||Phone call|Individual|Investor||
|2014|Company||||informed that the report for the|
||||||third quarter in 2014 will be|
||||||disclosed soon.|
||||||Inquired the detailed operation|
||||||situation of the Company in the|
||At the||||third quarter. The Company|
|October 9, 2014||Phone call|Individual|Investor||
||Company||||informed that the report for the|
||||||third quarter in 2014 will be|
||||||disclosed soon.|
||||||Inquired the detailed operation|
||||||situation of the Company in the|
||At the||||third quarter. The company|
|October 13, 2014||Phone call|Individual|Investor||
||Company||||informed that the report for the|
||||||third quarter in 2014 will be|
||||||disclosed soon.|
||||||Inquired the detailed operation|
||||||situation of the Company in the|
|||||Shanghai||
||At the|Spot|||third quarter. The company|
|October 20, 2014|||Institution|Dintian||
||Company|investigation|||informed that the report for the|
|||||Investment||
||||||third quarter in 2014 will be|
||||||disclosed soon.|
||||||Asked whether the company has a|
||||||plan for an owned enterprise|
||||||reform program. The Company|
|November 24,|At the|||||
|||Phone call|Individual|Investor|replied that currently the|
|2014|Company|||||
||||||Company has not yet received|
||||||formal written notice from the|
||||||parent unit.|
||||||Asked whether the Company has|
||||||a plan for an owned enterprise|
||||||reform program. The Company|
|November 25,|At the|||||
|||Phone call|Individual|Investor|replied that currently the|
|2014|Company|||||
||||||Company has not yet received|
||||||formal written notice from the|
||||||parent unit.|
||||||Asked whether the Company has|
||||||a plan for an owned enterprise|
||||||reform program. The Company|
|December 1,|At the|||||
|||Phone call|Individual|Investor|replied that currently the|
|2014|Company|||||
||||||Company has not yet received|
||||||formal written notice from the|
||||||parent unit.|
||||||Inquired the detailed operation|
||||||situation of the Company in 2014.|
|December 16,|At the|||||
|||Phone call|Individual|Investor|The Company informed that the|
|2014|Company|||||
||||||annual report of 2014 will be|
||||||disclosed soon.|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Chapter 5 Important Matters
I. Major lawsuits and arbitration
□ Applicable√ Not applicable
No major lawsuits and arbitration occurred during the reporting period
II. Matters questioned by media
□ Applicable√ Not applicable
The Company did not have any matter commonly questioned by media in the reporting period.
III. Non-operating capital of the listed company occupied by controlling shareholders and related parties
□ Applicable√ Not applicable
The non-operating capital of the listed company occupied by controlling shareholders and related parties was not involved during the reporting period.
IV. Bankruptcy and reorganization matters
□ Applicable√ Not applicable
No bankruptcy and reorganization matters were involved during the reporting period.
V. Transaction in assets
1. Information on asset acquisition
□ Applicable√ Not applicable
No asset acquisition was involved during the reporting period.
2. Asset sales
□ Applicable√ Not applicable
No asset sales matter was involved during the reporting period.
3. Business merger
□ Applicable√ Not applicable
No business merger matter was involved during the reporting period.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. VI. Implementation and impact of stock ownership incentive
□ Applicable√ Not applicable
No stock incentive plan and implementation were involved during the reporting period.
VII. Major relevant transactions
1. Associated transactions concerning routine operation
√ Applicable□ Not applicable
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||||Amount||||
||||||Transaction|||||
|||||||proportion in||||
||||||amount||Transaction|||
|Associated|Associated|Transaction|Associated|Pricing||the||Disclosure|Disclosure|
||||||(RMB ten||settlement|||
|party|relationship|type|transaction|principle||transactions of||date|index|
||||||thousand||form|||
|||||||the same kind||||
||||||Yuan)|||||
|||||||(%)||||
||||The company|||||||
|Shenzhen|||leases the SEG|||||||
|||||Determine|||||http://www|
|SEG|Controlling|Property|Plaza property||||Based on the|March 20,||
|||||d by the|108.91|0.19%|||.cninfo.co|
|Group Co.,|shareholder|lease|owned by the||||agreement|2014||
|||||market|||||m.cn|
|Ltd.|||controlling|||||||
||||shareholders|||||||
||||The controlling|||||||
||||shareholder|||||||
||||commissions|||||||
|Shenzhen||||||||||
|||Entrusted|the Company|Determine|||||http://www|
|SEG|Controlling||||||Based on the|March 20,||
|||with the|to operate and|d by the|20|0.04%|||.cninfo.co|
|Group Co.,|shareholder||||||agreement|2014||
|||operation|manage the|market|||||m.cn|
|Ltd.||||||||||
||||invested SEG|||||||
||||communicatio|||||||
||||ns market|||||||
|Total||||--|128.91|--|--|--|--|

 2. Associated transactions related to asset acquisition and sales
□ Applicable√ Not applicable
3. Associated transactions due to joint external investment
□ Applicable√ Not applicable
4. Creditor's rights and liabilities with related parties
□ Applicable√ Not applicable
5. 5. Other associated transactions
□ Applicable√ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. VIII. Important contracts and their fulfillment
1. Trusteeship, contracting and leasing
(1) Trusteeship issues
√ Applicable□ Not applicable
Explanations of trusteeship
The controlling shareholders of Shenzhen SEG Group Co., Ltd. entrusted the management of SEG communications market to the Company, and the Company received the trusteeship revenue of 200,000 Yuan according to the trusteeship agreement during the reporting period.
Projects which bring losses or gains that take up10% of the profit amount of the Company in the reporting period.□ Applicable√ Not applicable
In the reporting period, the Company had no entrusted projects which bring losses or gains that take up10% of the profit amount of the Company in the reporting period.
(2) Contracting issues
□ Applicable√ Not applicable
Projects which bring losses or gains that take up10% of the profit amount of the Company in the reporting period.□ Applicable√ Not applicable
In the reporting period, the Company had no contracting projects which bring losses or gains that take up10% of the profit amount of the Company in the reporting period.
(3) Leasing issues
√ Applicable□ Not applicable
Leasing issues:
For details, see the section Associated transactions concerning routine operation.
Projects which bring losses or gains that take up10% of the profit amount of the Company in the reporting period.□ Applicable√ Not applicable
In the reporting period, the Company had no leasing projects which bring losses or gains that take up10% of the profit amount of the Company in the reporting period.
2. Guarantee issues
√ Applicable□ Not applicable
Unit: RMB ten thousand Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Guarantees for holding subsidiaries|||||||||
||Announcement||Date of||||Whether the|Whether|
|||||Actual|||||
|Name of the|and disclosure|Guaranteed|occurrence||Type of|Term of|performance|guarantee|
|||||amount|||||
|guaranteed|date of the|amount|(agreement||guarantee|guarantee|is|for|
|||||guaranteed|||||
||guarantee||signing||||completed|related|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
||||date)|||||party|
||October 11,|7500|October 25,||Joint||||
|SEG Credit||||5000||1 year|No|No|
||2014||2014||liability||||
|||||Total amount of the|||||
|Total guarantee amount for|||||||||
|||||actual guarantee to the|||||
|subsidiaries approved in the||7500||||5000|||
|||||subsidiaries in the|||||
|reporting period (B1)|||||||||
|||||reporting period (B2)|||||
|||||Total amount of the|||||
|Total guarantee amount for||||guarantee balance to|||||
|subsidiaries approved by the||7500||the subsidiaries by the||5000|||
|end of the reporting period (B3)||||end of the reporting|||||
|||||period (B4)|||||
|Total guarantee amount (the sum of the two major items above)|||||||||
|Total guarantee amount||||Total amount of actual|||||
|approved in the reporting period||7500||guarantees in the||5000|||
|(A1+B1)||||reporting period|||||
|||||Total balance of|||||
|Total guarantee amount|||||||||
|||||actual guarantees by|||||
|approved by the end of the||7500||||5000|||
|||||the end of the|||||
|reporting period (A3+B3)|||||||||
|||||reporting period (A)|||||
|Proportion of total guarantees (A4+B4) in net assets||||3.85%|||||

 3. Other important contracts
√ Applicable□ Not applicable
||||||||
|-|-|-|-|-|-|-|
||||Transactionprice (Unit:RMB tenthousandYuan)||||
|||||Associated|||
|||Pricing|||Associated|Execution by the end of the reporting|
|Lender|Borrower|||transaction|||
|||principle|||relationship|period|
|||||or not|||
|||||||On October 14, 2013, the 3rd special|
|||||||meeting of the 6th Board of Directors|
|||||||discussed and approved the Proposal about|
|||||||Offering Shenzhen SEG E-Commerce Co.,|
|||||||Ltd. with Financial Assistance. The|
|||||||company offers the 51% holding SEG|
|||||||E-Commerce with the financial assistance|
|||||||of 60 million Yuan for one year (from|
|||||||September 15, 2013 to September 14,|
|||||||2014) and pays based on the requirements|
||Shenzhen||||||
|Shenzhen||||||of the e-commerce businesses. SEG|
||SEG|Fair|||Not||
|SEG Co.,|||6,000|No||E-Commerce pays expenses for using the|
||E-Commerce|price|||applicable||
|Ltd.||||||funds to the Company based on its actual|
||Co., Ltd.||||||
|||||||loan amount and period. The expenses for|
|||||||using the funds is charged based on the|
|||||||benchmarking interest rate of the one-year|
|||||||bank loan in the same period and should be|
|||||||paid on the due date.|
|||||||On December 5, 2014, the 5th special|
|||||||meeting of the 6th Board of Directors|
|||||||discussed and approved the Proposal about|
|||||||Offering Shenzhen SEG E-Commerce Co.,|
|||||||Ltd. with 60 million Yuan Financial|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
||||Transaction||||
||||price (Unit:|Associated|||
|||Pricing|||Associated|Execution by the end of the reporting|
|Lender|Borrower||RMB ten|transaction|||
|||principle|||relationship|period|
||||thousand|or not|||
||||Yuan)||||
|||||||Assistance. This is a renewal loan, with the|
|||||||term being one year. SEG E-Commerce|
|||||||pays expenses for using the funds to the|
|||||||shareholders based on its actual loan|
|||||||amount and period. The funds occupancy|
|||||||rate is 6.5%.|
|||||||On July 29, 2014, the 15th special meeting|
|||||||of the 6th Board of Directors discussed and|
|||||||approved the Proposal about Offering|
||Shenzhen|||||Shenzhen SEG Industrial Investment Co.,|
|Shenzhen|SEG|||||Ltd. with 10 million, Yuan Liquidity|
|||No|||Not||
|SEG Co.,|Industrial||4,200|No||Assistance. The Company offers 10 million|
|||interest|||applicable||
|Ltd.|Investment|||||Yuan liquidity to the Shenzhen SEG|
||Co., Ltd.|||||Industrial Investment, which is 100% held|
|||||||by the Company. So far SEG Industrial|
|||||||Investment has borrowed 42 million Yuan|
|||||||in total from the Company with no interest.|
|||||||The 6th interim meeting of the 6th Board of|
|||||||Directors held on October 25, 2013|
|||||||reviewed and approved the Proposal on A|
|||||||Renewal Loan of RMB 7 million Yuan to|
|||||||Changsha SEG Development Co., Ltd. The|
|||||||Board of Directors of the Company agreed|
|||||||to offer a renewal loan of RMB 7 million|
||Changsha|||||Yuan to Changsha SEG (46% held by the|
|Shenzhen|||||||
||SEG|Fair|||Not|Company), the term being a year (from|
|SEG Co.,|||700|No|||
||Development|price|||applicable|September 25, 2013 to September 24,|
|Ltd.|||||||
||Co., Ltd.|||||2014) and the interest rate being 6.00%|
|||||||(bank loan interest rate over the same|
|||||||period), for which Changsha Xinxing|
|||||||Grand Hotel owned by Changsha SEG was|
|||||||again used as collateral to the Company. By|
|||||||the end of the reporting period, Changsha|
|||||||SEG had repaid all principal and interest on|
|||||||these borrowings.|

4. Other important transactions
□ Applicable√ Not applicable
IX. Fulfillment of commitments
1. Commitments made by the Company or the shareholders holding more than5% shares, which were made in or lasted into the reporting period
√ Applicable□ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||Commitment|Commitment||
|Commitments|Promisor|Content|||Fulfillment|
||||date|term||
|Commitment for share|Not|||||
|reform|applicable|||||
|Commitments in the||||||
|Acquisition Report or|Not|||||
|the Equity Change|applicable|||||
|Report||||||
|Commitments made at||||||
||Not|||||
|the time of asset||||||
||applicable|||||
|restructuring||||||
|||In accordance with Article 5 of||||
|||Equity Transfer Agreement signed||||
|||between the Company and SEG||||
|||Group, SEG Group agrees: the||||
|||Company and its affiliates and joint||||
|||ventures can use the eight||||
||||||Commitments|
||Shenzhen|trademarks of SEG Group||||
|Commitment made at|||||were fulfilled|
||SEG|registered in China Trademark||||
|the time of initial public|||July 1, 1996|Long-term|in the|
||Group|Office; the Company can use the||||
|offerings or refinancing|||||reporting|
||Co., Ltd.|above-mentioned trademarks and||||
||||||period.|
|||similar marks as the Company's||||
|||marks and can use them in||||
|||operating activities; the Company||||
|||does not need to pay SEG Group||||
|||for use of the above-mentioned||||
|||trademarks or marks.||||
|||To address the issue that there is||||
|||competition in the same trade||||
|||between the Company and SEG||||
|||Group indicated in spot inspection||||
|||by Shenzhen Securities||||
|||Supervisory Bureau, the Company||||
|||received a written Commitment||||
|||Letter from SEG Group on||||
||||||Commitments|
|||September 14, 2007 and the content||||
||||||were fulfilled|
|||was as follows: our Group has|September|||
|||||Long-term|in the|
|||similar business in Shenzhen|14, 2007|||
||||||reporting|
|||electronic market with Shenzhen||||
||||||period.|
||Shenzhen|SEG Co., Ltd. (Shenzhen SEG),||||
|Other commitments||||||
||SEG|and the business was resulted by||||
|(including additional||||||
||Group|history and has objective market||||
|commitments)||||||
||Co., Ltd.|development background. Our||||
|||Group hereby promises that we will||||
|||not independently operate a market||||
|||in the same city whose business is||||
|||similar with that of Shenzhen SEG.||||
|||In order to solve the issue of||||
|||horizontal competition between the||February 1,|Commitments|
|||Company and its controlling||||
|||||2011 to|were fulfilled|
|||shareholder, SEG Group, the 6th|January 26,|||
|||||January 31,|in the|
|||special meeting of the 6th Board of|2011|||
|||||2015, totally|reporting|
|||Directors held on January 26, 2011||||
|||||5 years|period.|
|||reviewed and approved the||||
|||Proposal for Solving the Horizontal||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||Commitment|Commitment||
|Commitments|Promisor|Content|||Fulfillment|
||||date|term||
|||Competition between the Company||||
|||and Its Controlling Shareholder.||||
|||After friendly consultation, SEG||||
|||Group agreed to entrust the||||
|||Company to operate and manage||||
|||with full authority SEG||||
|||Communications Market under||||
|||direct management of SEG Group.||||
|||Therefore, the two parties have||||
|||signed the entrustment operation||||
|||and management contract. The||||
|||SEG Group pays 200,000 Yuan||||
|||annually as entrusted management||||
|||fees to the Company.||||
|Other commitments||||||
|made to the small and|Not|||||
|medium shareholders of|applicable|||||
|the Company||||||
|Whether commitments||||||
||Yes|||||
|were fulfilled on time||||||
|Reason for not fulfilling||||||
|the commitments and|N/A|||||
|future plan (if any)||||||

2. Attainment of profit forecasts for the assets or projects of the Company within the reporting period and the description of the reasons
□ Applicable√ Not applicable
X. Engagement and dismissal of the accounting firm
Engaged accounting firm
|||
|-|-|
|Name of accounting firm engaged from China|BDO Dahua CPA Co., Ltd. (special general partnership)|
|Remuneration for the accounting firm engaged from||
||45|
|China (RMB ten thousand Yuan)||
|Continuous years of service from the accounting firm||
||12 years|
|engaged from China||
|Name of certified public accountants from the||
||To be confirmed|
|accounting firm engaged from China||

Whether to engage another accounting firm in current period
□ Yes√ No
Engagement of internal control audit accounting firm, financial adviser or sponsor
□ Applicable√ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. XI. Explanations of the Supervisory Board and independent directors (if applicable) on the Non-standard Audit Report made by the accounting firm in the reporting period
□ Applicable√ Not applicable
XII. Penalties and corrections
□ Applicable√ Not applicable
No penalties and corrections were involved during the reporting period.
XIII. Listing suspension or termination after the annual report is disclosed
□ Applicable√ Not applicable
XIV. Notes on other important matters
√ Applicable□ Not applicable
||||
|-|-|-|
|||Inquiry index for the websites|
|Overview of important events|Disclosure date||
|||disclosing the temporary reports|
|1. Temporary stock suspensionBecause the Company has not disclosed relatedinformation that may affect the Company's stock price,in order to prevent the company's stock transaction andprotect the interests of investors, the Company appliesfor temporary suspension from the market opening onMarch 10, 2014, according to the relevant provisions ofthe Shenzhen Stock Exchange.|||
|||The company disclosed the|
||March 10, 2014|Temporary Suspension Notice at|
|||http://www.cninfo.com.cn.|
|2. Stock resumptionThe 9th special meeting of the 6th Board of Directors ofthe Company was held in way of communication votingon March 10, 2014. The meeting examined and adoptedthe Motion for Signing the Agreement for ControllingRights Arrangement of Shenzhen Huakong SEG Co., Ltd.Upon application, the company's stock trading isresumed on March 12, 2014 from the market opening.||The company disclosed the|
|||Resumption Notice, Resolution|
|||Notice of the 9th Special Meeting of|
|||the 6th Board of Directors of the|
||March 12, 2014||
|||Company, and Notice for Relinquish|
|||in Control of Shenzhen Huakong|
|||SEG Co., Ltd. at|
|||http://www.cninfo.com.cn.|
|3. Progress of the issuance of short-term bondsDuring the reporting period, the Company has receivedthe [2013] No. CP499 Notice for RegistrationAcceptance issued by the Dealers Association.On May 14, 2014, the Company successfully issued thefirst tranche of 2014 short-term bonds.||The company disclosed the Notice|
|||for Registration Acceptance of the|
||January 3, 2014||
|||Issuance of Short-term Bonds at|
|||http://www.cninfo.com.cn.|
|||The company disclosed the Notice|
|||for the Issuance of First Tranche of|
|||2014 Short-term Bonds at|
||May 16, 2014|http://www.cninfo.com.cn.|
|||For details about the notices, access|
|||the websites of China Money and|
|||Shanghai Clearing House.|
|4. Short-term financing vouchers for a maximumamount of 0.3 billion Yuan issued by the SEG Credit in||The company disclosed the Notice of|
||June 11, 2014||
|||the 13th Special Meeting of the 6th|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|||Inquiry index for the websites|
|Overview of important events|Disclosure date||
|||disclosing the temporary reports|
|Qianhai Equity Trading Center or Shenzhen StockExchange, and the Company's intention of fullsubscription.||Board of Directors of the Company,|
|||Notice for Holding Subsidiary|
|||Issuing Short-term Financing|
|||Vouchers, and Notice for|
|||Subscribing the Short-term|
|||Financing Vouchers Issued by|
|||Holding Subsidiary at|
|||http://www.cninfo.com.cn.|
|5. Use of idle funds to purchase financial productsTo improve the efficiency in the fund use of theCompany and the holding subsidiaries, without affectingthe normal operation, the Company rationally uses theidle funds for investment and financing, to increase thecapital income and seek a better return for the Companyand shareholders. The Company and the subsidiariesplan to use no more than 1 billion Yuan of the idle fundsfor financing investment. The funds can be usedrepeatedly within the above limit.||The company disclosed the Notice|
|||for Resolution of the 14th Special|
|||Meeting of the 6th Board of Directors|
|||of Shenzhen SEG Co., Ltd. and|
||July 5, 2014||
|||Notice for the Use of Idle Funds to|
|||Purchase Financial Products of|
|||Shenzhen SEG Co., Ltd at|
|||http://www.cninfo.com.cn.|
|||The company disclosed the Notice|
|||for Resolution of the 2nd|
|||extraordinary general meeting of|
||July 22, 2014||
|||shareholders in 2014 of Shenzhen|
|||SEG Co., Ltd at|
|||http://www.cninfo.com.cn.|
|7. Temporary stock suspensionBecause the matters under discussion may affect theCompany's stock price, in order to prevent thecompany's stock transaction and protect the interests ofinvestors, the Company applies for temporarysuspension from the market opening on August 28,2014, according to the relevant provisions of theShenzhen Stock Exchange. (Securities short name: ShenSaige, Shensaige B, security code: 000058 and 200058)||The company disclosed the|
|||Temporary Suspension Notice of|
||August 28, 2014||
|||Shenzhen SEG Co., Ltd. at|
|||http://www.cninfo.com.cn.|
|||The company disclosed the|
|||Temporary Suspension Progress|
||September 4, 2014||
|||Notice of Shenzhen SEG Co., Ltd. at|
|||http://www.cninfo.com.cn.|
|8. Stock resumptionOn September 4, 2014, the 18th special meeting of the6th Board of Directors of the Company was held in wayof communication voting. The meeting approved theDetermination of the Equity Accounting Methods ofShenzhen SEG Co., Ltd. The Company has finallydetermined the equity accounting methods used for theholding Shenzhen Huakong SEG Co., Ltd. Uponapplication, the company's stock trading is resumed onSeptember 5, 2014 from the market opening.|||
|||The company disclosed the Notice|
|||for the 18th Special Meeting of the 6th|
|||Board of Directors, Notice for Stock|
|||Resumption of Shenzhen SEG Co.,|
||September 5, 2014||
|||Ltd, Notice for Determining the|
|||equity accounting methods used for|
|||the holding Shenzhen Huakong SEG|
|||Co., Ltd at http://www.cninfo.com.cn.|

XV. Important matters of subsidiaries
√ Applicable□ Not applicable
||||
|-|-|-|
|||Inquiry index for the websites|
|Overview of important events|Disclosure date||
|||disclosing the temporary reports|
|1. Completion of main structure of the Nantong SEGTimes Square projectThe holding Nantong SEG Times Square project||The company disclosed the Notice|
||December 17, 2014|for Completion of Main Structure of|
|||the Nantong SEG Times Square|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|officially laid the foundation stone on November 27,2013, and the marketing center of this project wasofficially opened on June 28, 2014.On December 12, 2014, the ceremony for completingthe major structure capping of Nantong SEG TimesSquare project was held.||Project of Shenzhen SEG Co., Ltd at|
|||http://www.cninfo.com.cn.|
|2. The subsidiary has acquired operating assets ofChangsha Jubilee Hotel and started Changsha OrangeHotel Xingsha branch.Shenzhen SEG Baohua Enterprise (66.58% held by theCompany) has acquired the operating assets ofChangsha Jubilee Hotel in Changsha TechnologicalDevelopment Zone, with a price of 7 million Yuan andopened the Changsha Orange Hotel Xingsha branch.||The company disclosed the Notice|
|||for the 14th Special Meeting of the 6th|
|||Board of Directors of Shenzhen SEG|
|||Co., Ltd, Notice for the Acquisition|
||July 5, 2014|of the Operating Assets of Changsha|
|||Jubilee Hotel by a Subsidiary and|
|||Opening of Changsha Orange Hotel|
|||Xingsha Branch at|
|||http://www.cninfo.com.cn.|

XVI. Issuance of corporate bonds
□ Applicable√ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Chapter 6 CHANGES IN SHARE CAPITAL AND INFORMATION ON SHAREHOLDERS
I. Information on changes in share capital
1. Information on changes in share capital
Unit: Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase/Decrease (+)|||||After the change||
||||New||Capitalization|||||
|||||Bonus||||||
||Quantity|Proportion|share||of public|Others|Subtotal|Quantity|Proportion|
|||||share||||||
||||offering||reserve|||||
|I. Restricted||||||||||
||35,464|0.00%|0|0|0|-8,775|-8,775|26,689|0.00%|
|shares||||||||||
|1. State-owned||||||||||
||0|0.00%|0|0|0|0|0|0|0.00%|
|shares||||||||||
|2. State-owned||||||||||
|legal person's|0|0.00%|0|0|0|0|0|0|0.00%|
|shares||||||||||
|3. Other domestic||||||||||
||35,464|0.00%|0|0|0|-8,775|-8,775|26,689|0.00%|
|shares||||||||||
|Including: Shares||||||||||
|held by domestic|0|0.00%|0|0|0|0|0|0|0.00%|
|legal persons||||||||||
|Shares held by||||||||||
|domestic natural|35,464|0.00%|0|0|0|-8,775|-8,775|26,689|0.00%|
|persons||||||||||
|4. Foreign shares|0|0.00%|0|0|0|0|0|0|0.00%|
|Including: Shares||||||||||
|held by overseas|0|0.00%|0|0|0|0|0|0|0.00%|
|legal persons||||||||||
|Shares held by||||||||||
|foreign natural|0|0.00%|0|0|0|0|0|0|0.00%|
|persons||||||||||
|II. Unrestricted||||||||||
||784,763,546|100.00%|0|0|0|8,775|8,775|784,772,321|100.00%|
|shares||||||||||
|1. RMB ordinary||||||||||
||538,302,228|68.59%|0|0|0|8,775|8,775|538,311,003|68.59%|
|shares||||||||||
|2. Domestically||||||||||
|listed foreign|246,461,318|31.40%|0|0|0|0|0|246,461,318|31.40%|
|shares||||||||||
|3. Overseas listed||||||||||
||0|0.00%|0|0|0|0|0|0|0.00%|
|foreign shares||||||||||
|4. Others|0|0.00%|0|0|0|0|0|0|0.00%|
|III. Total shares|784,799,010|100.00%|0|0|0|0|0|784,799,010|100.00%|

Reasons for change
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.□ Applicable√ Not applicable
Approval of changes in share capital
□ Applicable√ Not applicable
Share transfer
□ Applicable√ Not applicable
Impact of changes in share capital on such financial indicators as basic EPS, diluted EPS, and net asset per share attributable to common shareholders of the Company in the last year and previous reporting period
□ Applicable√ Not applicable
Other contents as deemed necessary by the Company or required by the securities regulatory authority to be disclosed
□ Applicable√ Not applicable
2. Information on changes in restricted shares
√ Applicable□ Not applicable
Unit: Share
|||||||
|-|-|-|-|-|-|
||Restricted shares|Restricted shares|Restricted shares|Restricted shares||
|Name of|||||Reason for|
||at the beginning|released in this|increased in this|at the end of the||
|shareholder|||||restricted trade|
||of the period|period|period|period||
||||||Shares held by|
|Zheng Dan|35,464|8,775|0|25,586||
||||||Senior Executives|
|Total|35,464|8,775|0|25,586|--|

 II. Issuance and listing of shares
1. Previous issuance of shares in the last three years of the reporting period
□ Applicable√ Not applicable
2. Explanations on changes in total shares and the shareholder structure as well as the changes in the assets and liabilities structure of the company
□ Applicable√ Not applicable
3. Information of existing staff shares
□ Applicable√ Not applicable
III. Information on Shareholders and Actual Controllers
1. Information on the number of shareholders and their shareholding status
Unit: Share
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Total number of||||
|||||||||||preferred||||
|Total number of||||Total number of ordinary||||||||||
|||||||||||shareholders with||||
|ordinary||||shareholders on the fifth||||||||||
|||||||||||voting rights||||
|shareholders at||55,987||trading day before the|||51,394|||||none||
|||||||||||restored by the end||||
|the end of the||||disclosure of the reporting||||||||||
|||||||||||of the reporting||||
|reporting period||||period||||||||||
|||||||||||period (if any) (see||||
|||||||||||Note 8)||||
|Shareholders holding over 5% shares or top 10 shareholders||||||||||||||
|||||||||Quantity|||Information on pledged or|||
||||||Shares held|Share||||||||
|||||||||of|Quantity of||frozen shares|||
|Name of|Type of||Shareholding||by the end|increase/decrease||||||||
|||||||||restricted|unrestricted|||||
|shareholder|shareholder||proportion||of reporting|in the reporting||||||||
|||||||||shares|shares held||Share status||Quantity|
||||||period|period||||||||
|||||||||held||||||
|Shenzhen SEGGroup Co., Ltd.|State-ownedlegal person||30.24%||237,359,666|0||0|237,359,666|||||
||||||||||||Frozen||83,679,833|
|Zeng Ying|Domesticnatural person||1.02%||8,040,826|1,850,139||0|8,040,826|||||
||||||||||||0||0|
|PhillipSecurities(Hong Kong)Group|Overseas legalperson||0.86%||6,716,223|6,716,223||0|6,716,223|||||
||||||||||||0||0|
|Liu Guocheng|Domesticnatural person||0.70%||5,495,595|2,998,135||0|5,495,595|||||
||||||||||||0||0|
|Gong Qianhua|Overseasnatural person||0.68%||5,311,520|0||0|5,311,520|||||
||||||||||||0||0|
|Wang Jian|Domesticnatural person||0.38%||3,000,000|3,000,000||0|3,000,000|||||
||||||||||||0||0|
|Liu Guohong|Domesticnatural person||0.31%||2,454,941|2,454,941||0|2,454,941|||||
||||||||||||0||0|
|YunnanInternationalTrust Co. Ltd.–Ruihui 2Capital TrustPlan|Others||0.31%||2,437,347|2,437,347||0|2,437,347|||||
||||||||||||0||0|
|UBS AGLONDONBRANCH|Overseas legalperson||0.30%||2,339,805|2,339,805||0|2,339,805|||||
||||||||||||0||0|
|LI LEONZHAN WEI|Overseasnatural person||0.30%||2,334,900|2,334,900||0|2,334,900|||||
||||||||||||0||0|
|Strategic investors or general||||||||||||||
|legal entities who became one||||||||||||||
|of the top ten shareholders by|||N/A|||||||||||
|participating in rights issue (if||||||||||||||
|any) (See Note 3)||||||||||||||
|Explanations on the association|||Shenzhen SEG Group Co., Ltd has no associated relationship with other shareholders, nor it is a|||||||||||
|relationship or concerted action|||concerted action unit as described by the Management Methods for Disclosure of Information on|||||||||||
|among the above-mentioned|||Changes of Shareholding Status of Shareholders of Listed Companies It is unknown whether other|||||||||||
|shareholders|||shareholders have an associated relationship or are concerted action units or not.|||||||||||
|Information on top ten shareholders of unrestricted shares||||||||||||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||
|-|-|-|-|
|||Type of shares||
|Name of shareholder|Unrestricted shares held at the period end|||
|||Type of shares|Quantity|
|Shenzhen SEG Group Co., Ltd.|237,359,666|RMB ordinary shares|237,359,666|
|Zeng Ying|8,040,826|Domestically listed||
||||8,040,826|
|||foreign shares||
|Phillip Securities (Hong Kong)Group|6,716,223|Domestically listed||
||||6,716,223|
|||foreign shares||
|Liu Guocheng|5,495,595|Domestically listed||
||||5,495,595|
|||foreign shares||
|Gong Qianhua|5,311,520|Domestically listed||
||||5,311,520|
|||foreign shares||
|Wang Jian|3,000,000|RMB ordinary shares|3,000,000|
|Liu Guohong|2,454,941|Domestically listed||
||||2,454,941|
|||foreign shares||
|Yunnan International Trust Co.Ltd.– Ruihui 2 Capital TrustPlan|2,437,347|||
|||RMB ordinary shares|2,437,347|
|UBS AG LONDON BRANCH|2,339,805|Domestically listed||
||||2,339,805|
|||foreign shares||
|LI LEON ZHAN WEI|2,334,900|Domestically listed||
||||2,334,900|
|||foreign shares||
|Explanations on the association||||
|relationship or concerted action||||
||Shenzhen SEG Group Co., Ltd has no associated relationship with other shareholders, nor it is a|||
|among the top ten shareholders||||
||concerted action unit as described by the Management Methods for Disclosure of Information on|||
|of unrestricted shares, and||||
||Changes of Shareholding Status of Shareholders of Listed Companies It is unknown whether other|||
|between the top ten shareholders||||
||shareholders have an associated relationship or are concerted action units or not.|||
|of unrestricted shares and the||||
|top ten shareholders||||
|Top ten common shareholders||||
|involved in securities financing|None|||
|(if any)||||

Whether top ten common shareholders and top ten shareholders of unrestricted shares have agreed repurchase trading within the reporting period
□ Yes√ No
The top ten common shareholders and top ten shareholders of unrestricted shares do not have any agreed repurchase trading within the reporting period
2. Information about controlling shareholders of the Company
Legal representative
|||||||
|-|-|-|-|-|-|
||Legal|||||
|Name of||||||
||representative/|Date of|Organization|Registered||
|controlling|||||Main business|
||Person in|incorporation|code|Capital||
|shareholder||||||
||charge|||||
||||||Business scope: Production and|
|Shenzhen SEG||||||
||Sun|August 23,|||research of electronic products,|
|Group Co.,|||19218093-0|1,355,420,000||
||Shengdian|1984|||household appliances, toys,|
|Ltd.||||||
||||||electronic and telecom equipment,|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||
|-|-|-|
|||instruments and meters, motor|
|||equipment, computers and|
|||accessories, OA equipment and|
|||articles and electronic chemical|
|||projects (the license of the|
|||production site should be specially|
|||applied for); acceptance of various|
|||electronic system projects; operation|
|||of specialized electronic and|
|||communications markets; talent|
|||training; real estate development (it|
|||is made on the land plots for which|
|||the land use right has been legally|
|||obtained); real estate agency;|
|||shipping agency; logistics &|
|||warehousing; high-rise sightseeing|
|||at SEG Plaza and supporting|
|||catering, shopping and exhibition|
|||services; technical development and|
|||maintenance of network and|
|||information projects; import and|
|||export.|
||Development strategy of SEG Group: Uphold the development strategy that focuses on two core||
|Future|businesses, that is, energy-saving semiconductor manufacturing and professional electronics||
|development|markets, explore the realms of high and new technologies and new products, and promote both||
|strategy|physical electronics markets that focus primarily on self-owned property and e-commerce (that is,||
||Shenzhen SEG Co., Ltd.) to build comprehensive and competitive strengths of SEG Group.||
||The consolidated operating revenue (not audited) of SEG Group in 2014 was 2,646.91 million||
|Operating|||
||Yuan, the total profit was 510 million Yuan, and the net profit was 405.31 million Yuan; the total||
|results,|||
||assets of SEG Group was 8,338.01 million Yuan, the owner's equity was 3,475.14 million Yuan,||
|financial|||
||the asset/liability ratio was 58.72%, and the return on equity was 15.87%; net cash flow from||
|condition, and|||
||operating activities was -720.84 million Yuan, net cash flow from investment activities was||
|cash flow|||
||-609.81 million Yuan, and net cash flow from financing activities was 1,370.67 million Yuan.||

 Equity of other overseas listed companies in which the controlling shareholders have a controlling share and hold shares
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||||||Shareholding|
||||||Abbreviations of held stock||Number of shares|||
||No.||Company name||||||proportion|
||||||and securities code||held (Share)|||
||||||||||(%)|
|1||Shenzhen SEG GroupCo., Ltd.||Huakong SEG 000068||68,392,697||7.63||
|2||SEG (HONGKONG)Company Limited||Shen Huafa B200020||16,569,560||5.85||
|3||GOOD HOPECORNERINVESTMENTS LTD||Shen Huafa 200020||13,900,000||4.91||
|4||SEG (HONGKONG)Company Limited||NewOcean Energy 0342||100,000||0.01||

Changes of the controlling shareholders in the reporting period
□ Applicable√ Not applicable
In the reporting period, the controlling shareholders of the Company were not changed.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 3. Actual controller of the Company
Legal representative
|||||||
|-|-|-|-|-|-|
||Legal|||||
|Name of actual||Date of|Organization|Registered||
||representative/Person||||Main business|
|controller||incorporation|code|Capital||
||in charge|||||
|Shenzhen||||||
|State-owned Assets||||||
||||Not|||
|Supervision and|Zhang Xiaoli|||Not applicable|Not applicable|
||||applicable|||
|Administration||||||
|Commission||||||
|Future development||||||
||Not applicable|||||
|strategy||||||
|Operating results,||||||
|financial condition,|Not applicable|||||
|and cash flow||||||

Changes of the actual controllers in the reporting period
□ Applicable√ Not applicable
In the reporting period, the actual controllers of the Company are not changed.
Block diagram of the property rights and controlling relationship between the Company and its actual controller Administration China Huarong China Orient China Great Wall
Commission of Asset Asset Asset
Shenzhen Municipal Management Co., Management Management
People's Government Ltd. Corporation Corporation
Shenzhen SEG Group Co.,
Ltd.
Shenzhen SEG Co., Ltd.
China Huarong Asset Management Co., Ltd. publicly listed the29.51% equities of SEG Group in Shenzhen Qianhai Stock Exchange on December 30, 2014 to transfer the equities at the listing price of 1.79 billion Yuan. Within the valid listing period, only SZ CAPITAL CO., LTD (hereinafter referred to as SZ CAPITAL) is a qualified transferee with intention. According to the related provisions in the Asset Disposal Management Approach for Financial Asset Management Company and Transfer of State-Owned Financial Assets Management Approach issued by the Ministry of Finance, after the listing period of SEG Group's equities expires, the transfer will be carried out based on an agreement if only one qualified transferee with intention is available. Therefore, the listed29.51% of the SEG Group equities will be transferred to SZ CAPITAL based on an agreement.
SZ CAPITAL was incorporated in June 2007 by SASAC. As the wholly-owned subsidiary of SASAC, it is the
professional platform company operated by SASAC as well as its person acting in concert. After the completion
of this equity transfer, SASAC will directly and indirectly hold76.03% of the stocks of SEG, and become the first
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. major shareholder and actual controller of SEG. TheCompany‘s controlling shareholder and actual controller have no change. The matter will not result in important influence to theCompany‘s operation.
By the disclosure day of this report, Huarong Asset and SZ CAPITAL have signed an Equity Transfer contract, and Huarong Asset has transferred the29.51% equities of the SEG Group to SZ CAPITAL. Currently, the equity transfer matters have done.
The actual controllers control the Company by trust or other asset management methods.
□ Applicable√ Not applicable
4. Other legal-person shareholders who hold more than10% shares
□ Applicable√ Not applicable
IV. Share purchase plans proposed or implemented by shareholders and persons acting in concert during the reporting period
□ Applicable√ Not applicable
As known by the Company, no shareholders or persons acting in concert proposed share purchase plans during the reporting period.
Chapter 7 Preferred Stock Description
□ Applicable√ Not applicable
No preferred stock is involved during the reporting period.
Chapter 8 Information on Directors, Supervisors, Senior Executives and Employees
I. Changes in shares held by directors, supervisors and senior executives
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Increase|Decrease||
||||||||Shares|of shares|of shares|Shares|
||||||Beginning||||||
|||Employment||||Ending date|held at|held in|held in|held at|
|Name|Title||Gender|Age|date of office||||||
|||status||||of office term|period|the|the|period|
||||||term||||||
||||||||beginning|reporting|reporting|end|
|||||||||period|period||
|Wang Li|Chairman|Incumbent|Male|53|June 17, 2013|June 16, 2016|0|0|0|0|
|Zhang|||||||||||
||Director|Incumbent|Male|52|June 17, 2013|June 16, 2016|0|0|0|0|
|Guangliu|||||||||||
|Ye Jun|Director|Incumbent|Male|53|June 17, 2013|June 16, 2016|0|0|0|0|
|Liu|Director/ General||||||||||
|||Incumbent|Male|46|June 17, 2013|June 16, 2016|0|0|0|0|
|Zhijun|Manager||||||||||
|Zheng|Director/Vice|Incumbent|Female|49|June 17, 2013|June 16, 2016|35,586|0|0|35,586|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Increase|Decrease||
||||||||Shares|of shares|of shares|Shares|
||||||Beginning||||||
|||Employment||||Ending date|held at|held in|held in|held at|
|Name|Title||Gender|Age|date of office||||||
|||status||||of office term|period|the|the|period|
||||||term||||||
||||||||beginning|reporting|reporting|end|
|||||||||period|period||
|Dan|General||||||||||
||Manager/Secretary||||||||||
||of the Board of||||||||||
||Directors||||||||||
|Zhu|Director/ Vice||||||||||
|||Incumbent|Male|53|June 17, 2013|June 16, 2016|0|0|0|0|
|Longqing|General Manager||||||||||
|Song|Independent||||||||||
|||Incumbent|Female|47|June 17, 2013|June 16, 2016|0|0|0|0|
|Pingping|Director||||||||||
||Independent||||||||||
|Li Luoli||Incumbent|Male|67|June 17, 2013|June 16, 2016|0|0|0|0|
||Director||||||||||
|Zhou|Independent||||||||||
|||Incumbent|Male|45|June 17, 2013|June 16, 2016|0|0|0|0|
|Hanjun|Director||||||||||
|Zhao|||||||||||
||Supervisor|Left the post|Male|60|June 17, 2013|June 16, 2016|0|0|0|0|
|Xingxue|||||||||||
|Xu Ning|Supervisor|Incumbent|Male|50|June 17, 2013|June 16, 2016|0|0|0|0|
|Tang|||||||||||
||Supervisor|Incumbent|Male|54|June 17, 2013|June 16, 2016|0|0|0|0|
|Chongyin|||||||||||
|Peng|||||||||||
||Supervisor|Incumbent|Male|41|June 17, 2013|June 16, 2016|0|0|0|0|
|Aiyun|||||||||||
|Tian|||||||||||
||Supervisor|Incumbent|Male|48|June 17, 2013|June 16, 2016|0|0|0|0|
|Jiliang|||||||||||
|Ying|||||||||||
||Supervisor|Incumbent|Male|45|June 17, 2013|June 16, 2016|0|0|0|0|
|Huadong|||||||||||
|Bo|Vice General||||||||||
|||Incumbent|Male|57|July 24, 2013|June 16, 2016|0|0|0|0|
|Hongxi|Manager||||||||||
|Jiang|Independent||||||||||
|||Left the post|Male|55|May 21, 2010|June 17, 2013|11,700|0|11,700|0|
|Yigang|Director||||||||||
|Total|--|--|--|--|--|--|47,286|0|11,700|35,586|

 II. Information on Directors, Supervisors and Senior Executives Serving in Shareholders' Units or Other Units
Work experience of incumbent directors, supervisors, and senior executives in the last five years
1. Members of the Board of Directors
1) Wang Li, male and born in 1961, holds a master's degree. He now serves as the Director of Company, General Manager of SEG Group, Vice Secretary of Party Committee, Director of SEG Credit, and Director of Shenzhen STS Microelectronics. He served as the Vice President of SEG Group, Deputy General Manager (in charge),
President of Shenzhen SEG Hi-tech Investment Co., Ltd, and Director of Shenzhen SEG Property Development
Company Limited.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 2) Zhang Guangliu, male and born in 1962, holds a master's degree. He now serves as the Company director, Deputy General Manager of SEG Group, Director of Shenzhen Kangle Enterprise Development Co., Ltd, and Chairman of the Supervisory Board of Shenzhen SI Semiconductors Co., Ltd. He served as the Chairman of the Supervisory Board of Huakong SEG and SEG (Hongkong) Limited.
3) Liu Zhijun, male and born in 1968, holds a Master of Engineering degree. He now serves as Director and General Manager of the Company and Secretary of the Party Committee, He also serves as the Chairman of Nantong SEG, Chairman of Longgang SEG, Chairman of Xi'an SEG, Chairman of Xi'an Hairong SEG, Chairman of SEG E-Commerce, Chairman of SEG Credit, and Supervisor of Kashgar Shenzhen City Limited. He served as the Vice Secretary of Party Committee, Chairman of SEG E-Commerce, Chairman of Shanghai SEG, and Manager of the Operating Department of SEG Group.
4) Zheng Dan, female and born in 1965, is a senior economist and holds a Master of Science degree. She now serves as the Director of the Company, Vice Secretary of Party Committee, Discipline Inspection Commission Secretary, Vice-general Manager, Secretary of the Board, and she also serves as the Chairman of Suzhou SEG, Chairman of Wujiang SEG, Chairman of SEG Baohua, Director of SEG Credit, Director of Nantong SEG, Chairman of the Supervisory Board of Changsha SEG, Chairman of the Supervisory Board of SEG E-Commerce, and Chairman of the Supervisory Board of Huakong SEG. She served as the Director of SEG E-Commerce, Director of Huakong SEG, Chairman of the Supervisory Board of SEG Baohua, Chairman of the Supervisory Board of SEG Logistics, and Supervisor of SEG GPS.
5) Zhu Longqing, male and born in 1961, holds an MBA degree. He now serves as Director and Vice General Manager of the Company. He concurrently serves as the Chairman of SEG Industry, Chairman of Changsha SEG, Chairman of Nanjing SEG, Chairman of Wuxi SEG, Chairman of Nanning SEG, Chairman of Shanghai SEG, Chairman of Nantong SEG, Chairman of SEG E-Commerce, Chairman of SEG GPS, and Chairman of the Supervisory Board of SEG Baohua. He served as the Chairman of SEG Logistics, Chairman of the Supervisory Board, Director of SEG Baohua, Director and General Manager of SEG Industry.
6) Ye Jun, male and born in 1960, holds a bachelor's degree and is a senior accountant. He now serves as the Director of the Company, Director and President of SEG Credit, and Director of Shenzhen SEG Square Investment& Development Co., Ltd. He served as the Finance Minister of SEG Group, Chairman of Shenzhen SEG Property Investment, Director of Huakong SEG, Director of Shenzhen SI Semiconductors Co., Ltd, and Director of Shijiazhuang SEG Plaza Investment.
7) Zhou Hanjun, male and born in 1969, is a CPA and a CTA. He now serves as an Independent Director of the Company, partner of Shenzhen Asia-Pacific (Group) Certified Public Accountants Co., Ltd., and Independent Director of Shenzhen Success Electronics Co., Ltd.
8) Liu Zhijun, male and born in 1947, holds a master's degree in economics. Currently, he is a professor and doctoral supervisor of Nankai University. He now serves as the Vice President of Development Institute (Shenzhen, China), Vice President of China Society of Economic Reform, and Director of Shenzhen Mahon Economic Research Development Foundation and so on. He served as Deputy Director of Nankai Institute of
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Economics, Deputy Director of State Administration of Prices Institute, Deputy Director of the Shenzhen Municipal People's Government Office, Director of Shenzhen Information Center, Deputy Secretary of Shenzhen Municipal Committee of CPC and Director of Front Office, Deputy Director of Shenzhen Development Institute and Secretary General, and Chief of China Opening Herald.
9) Song Pingping, female, was born in March 1967 and holds a Master of Laws degree. She now serves as the partner of Shenzhen Oriental Fortune Capital Management Limited, Secretary General of Risk Control Committee of Shenzhen SZ CAPITAL Fuhai Investment Management Limited, Arbitrator of South China International Economic and Trade Arbitration Commission, and Independent Director of Shenzhen Yantian Port Limited. She served as the partner of Beijing King& Wood Law Firm and so on.
2. Members of the Board of Supervisors
1) Xu Ning, male and born in 1965, holds a bachelor's degree. He now serves as the Chairman of the Board of Supervisors, Vice Secretary of Party Committee of SEG Group, Secretary of the Discipline Inspection Commission, Chairman of the labor union and Director of SEG Talent Training Center. He served as the Safeguard Stability Commissioner (at department level) of State-owned Assets Supervision and Administration Commission of Shenzhen Municipal People's Government, and Safeguard Stability Commissioner (at department level) of Shenzhen State-owned Assets Supervision and Administration.
2) Tang Chongyin, male and born in 1960, holds a PhD degree. He now serves as the supervisor of the Company, Minister Assets Department of SEG Group, Chairman of Shenzhen Dynamic Electronics Limited, Chairman of Shenzhen SEG Hi-tech Investment Co., Ltd, Chairman of Shenzhen SI Semiconductors Co., Ltd, Chairman of Tianjin SEG Haijing Co., Ltd, and Chairman of the Supervisory Board of SEG Credit. He served as the Director of SEG E-Commerce and Vice Chairman of Shenzhen Zhongheng Huafa Co., Ltd.
3) Peng Aiyun, male and born in 1973, holds a bachelor's degree. He now serves as the supervisor of the Company, and concurrently serves as the Vice Minister of Business Development of SEG Group, Director of Shenzhen SEG Real Estate Investment Co., Ltd, and supervisor of the Shijiazhuang SEG Square Investment Limited. He served as the Vice Manager of Electronic Market and Property Operation Department of SEG Group. 4) Tian Jiliang, male and born in 1966, holds a bachelor's degree. He now serves as the Supervisor of the Board of Supervisors and Minister of Human Resources and concurrently serves as the Director of SEG Baohua, Director of Shunde SEG, Chairman of the Supervisory Board of Xi'an SEG, Chairman of the Supervisory Board of Longgang SEG, and Supervisor of Xi'an Hairong SEG. He served as the Director of Suzhou SEG and the Supervisor of Wuxi SEG.
5) Ying Huadong, male and born in 1969, holds a bachelor's degree and is a senior accountant. He now serves as Supervisor (Supervisor from staff) of the Company and Manager of the Financial Department and concurrently as Director of Changsha SEG, Supervisor of Nanjing SEG, and Supervisor of Nantong SEG. He served as the Supervisor of Changsha SEG.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 6) Zhao Xingxue, male and born in 1954, graduated from college and has retired in August 2014. He served as the Chairman of the Board of Supervisors of the Company, Chairman of SEG Group Labor Union, Director of SEG Talent Training Center, Deputy Secretary of Party Committee& Secretary of Discipline Committee of SEG Group, and Chairman of the Board of Supervisors of Huakong SEG.
3. Senior executives
1) Liu Zhijun is the General Manager and the relevant information is available in the above introduction to directors.
2) Zheng Dan is the Deputy General Manager and the relevant information is available in the above introduction to directors.
3) Zhong Longqing is Vice General Manager and the relevant information is available in the above introduction to directors.
4) Bo Hongxi, male, born in 1958, undergraduate, senior accountant, serves as the Deputy General Manager of the Company, Director and General Manager of SEG Baohua.
Information about directors, supervisors and senior executives serving in shareholders' units
√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||||Receiving|
||||||remuneration|
||Name of|Position in|Beginning date of|Ending date of||
|Name|||||from|
||shareholders' units|shareholders' units|office term|office term||
||||||shareholders'|
||||||units or not|
||Shenzhen SEG|||||
|||Vice General Manager|December 1, 2006|January 18, 2010||
||Group Co., Ltd.|||||
||Shenzhen SEG|Deputy General||||
||||January 19, 2010|January 3, 2011||
|Wang Li|Group Co., Ltd.|Manager (in charge)|||Yes|
|||General Manager,||||
||Shenzhen SEG|||||
|||Deputy Party|January 4, 2011|October 30, 2015||
||Group Co., Ltd.|||||
|||Secretary||||
|Zhang|Shenzhen SEG|||||
|||Vice General Manager|March 10, 2003|October 30, 2015|Yes|
|Guangliu|Group Co., Ltd.|||||
|||Manager of the||||
||Shenzhen SEG|Operation and||||
|Liu Zhijun|||July 1, 2008|May 1, 2010|No|
||Group Co., Ltd.|Management||||
|||Department||||
||Shenzhen SEG|||||
|Zheng Dan||None|||No|
||Group Co., Ltd.|||||
|Zhu|Shenzhen SEG|||||
|||None|||No|
|Longqing|Group Co., Ltd.|||||
||Shenzhen SEG|Minister of Finance||||
|Ye Jun|||April 1, 2003|May 1, 2013|No|
||Group Co., Ltd.|Department||||
|||Deputy Secretary of||||
||Shenzhen SEG|||||
|Xu Ning||Party Committee,|October 1, 2012|October 30, 2015|Yes|
||Group Co., Ltd.|||||
|||Secretary of||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||||Receiving|
||||||remuneration|
||Name of|Position in|Beginning date of|Ending date of||
|Name|||||from|
||shareholders' units|shareholders' units|office term|office term||
||||||shareholders'|
||||||units or not|
|||Discipline Committee,||||
|||and Labor Union||||
|||President||||
|Tang|Shenzhen SEG|Minister of Assets|April 17, 2003|||
|||||October 30, 2015|Yes|
|Chongyin|Group Co., Ltd.|Department||||
|||Vice Manager of||||
|||Electronic Market and||||
||Shenzhen SEG|||||
|||Property Operation|July 2, 2008|August 28, 2011||
||Group Co., Ltd.|||||
|Peng||Department of SEG||||
||||||Yes|
|Aiyun||Group||||
|||Vice Minister of||||
||Shenzhen SEG|||||
|||Business|August 29, 2011|October 30, 2015||
||Group Co., Ltd.|||||
|||Development||||
|Tian|Shenzhen SEG|||||
|||None|||No|
|Jiliang|Group Co., Ltd.|||||
|Ying|Shenzhen SEG|||||
|||None|||No|
|Huadong|Group Co., Ltd.|||||
||Shenzhen SEG|||||
|Bo Hongxi||None|||No|
||Group Co., Ltd.|||||

Information about directors, supervisors and senior executives serving in other units
√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||||Receiving|
|||Position in|Beginning date of|Ending date of|remuneration|
|Name|Name of other units|||||
|||other units|office term|office term|from other units|
||||||or not|
||SEG Credit|Chairman|November 1, 2011|November 1, 2017||
||Shenzhen STS|||||
|||Director|September 1, 2003|December 1, 2016||
||Microelectronics|||||
||Shenzhen Huaqiang|||||
||North Electronic|||||
|||Director|December 1, 2007|December 1, 2016||
|Wang Li|||||No|
||Market Price Index|||||
||Ltd.|||||
||Shenzhen SEG|||||
||Property|||||
|||Chairman|July 1, 2008|May 1, 2011||
||Development Co.,|||||
||Ltd.|||||
||Shenzhen Kangle|||||
||Enterprise|||||
|||Chairman|August 1, 2011|July 1, 2015||
||Development Co.,|||||
|Zhang|Ltd.|||||
||||||No|
|Guangliu|Shenzhen SI|Chairman of||||
||Semiconductors Co.,|Board of|July 1, 2010|December 1, 2016||
||Ltd.|Supervisors||||
||Huakong SEG|Chairman of|February 1, 2013|February 1, 2014||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||||Receiving|
|||Position in|Beginning date of|Ending date of|remuneration|
|Name|Name of other units|||||
|||other units|office term|office term|from other units|
||||||or not|
|||Board of||||
|||Supervisors||||
||SEG (HONGKONG)|||||
|||Chairman|August 1, 2007|August 1, 2012||
||Company Limited|||||
||Longgang SEG|Chairman|June 1, 2010|Till now||
||SEG E-Commerce|Chairman|January 1, 2011|January 1, 2014||
||Shanghai SEG|Chairman|May 1, 2011|June 1, 2014||
||SEG Credit|Director|September 1, 2011|Till now||
||Kashgar Shenzhen|||||
|Liu Zhijun||Supervisor|October 1, 2012|Till now|No|
||City Co., Ltd.|||||
||Nantong SEG|Chairman|January 1, 2013|Till now||
||Xi'an SEG|Chairman|May 1, 2013|Till now||
||Xi'an Hairong SEG|Chairman|May 1, 2013|Till now||
||SEG E-Commerce|Director|January 1, 2014|Till now||
|||Chairman of||||
||Changsha SEG|Board of|March 1, 2009|Till now||
|||Supervisors||||
|||Chairman of||||
||SEG Baohua|Board of|March 1, 2009|April 1, 2013||
|||Supervisors||||
|||Chairman of||||
||SEG Logistics|Board of|June 1, 2010|December 1, 2011||
|||Supervisors||||
||SEG E-Commerce|Director|January 1, 2011|May 1, 2013||
||SEG Credit|Director|September 1, 2011|Till now||
|Zheng Dan|||||No|
||Suzhou SEG|Chairman|September 1, 2011|Till now||
||Wujiang SEG|Chairman|June 1, 2012|Till now||
||Nantong SEG|Director|January 1, 2013|Till now||
||Huakong SEG|Director|March 1, 2013|March 1, 2014||
||SEG Baohua|Chairman|April 1, 2013|Till now||
|||Chairman of||||
||SEG E-Commerce|Board of|May 1, 2013|Till now||
|||Supervisors||||
|||Chairman of||||
||Huakong SEG|Board of|March 1, 2014|Till now||
|||Supervisors||||
||SEG Industry|Director|March 1, 2009|May 1, 2013||
|||General||||
||SEG Industry||March 1, 2009|January 1, 2010||
|||Manager||||
|Zhu||||||
||SEG Baohua|Director|January 1, 2010|April 1, 2013|No|
|Longqing||||||
|||Chairman of||||
||SEG Logistics|Board of|January 1, 2002|June 1, 2010||
|||Supervisors||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||||Receiving|
|||Position in|Beginning date of|Ending date of|remuneration|
|Name|Name of other units|||||
|||other units|office term|office term|from other units|
||||||or not|
||SEG Logistics|Chairman|June 1, 2010|December 1, 2011||
||Changsha SEG|Chairman|June 1, 2010|Till now||
||SEG E-Commerce|Director|January 1, 2011|Till now||
||Nanjing SEG|Chairman|April 1, 2011|Till now||
||SEG Navigations|Director|February 1, 2012|Till now||
||Wuxi SEG|Chairman|August 1, 2012|Till now||
||Nantong SEG|Director|January 1, 2013|Till now||
|||Chairman of||||
||SEG Baohua|Board of|April 1, 2013|Till now||
|||Supervisors||||
||Nanning SEG|Chairman|April 1, 2013|Till now||
||SEG Industry|Chairman|May 1, 2013|Till now||
||Shanghai SEG|Chairman|June 1, 2014|Till now||
||Huakong SEG|Director|September 1, 2010|March 1, 2013||
||Shenzhen SI|||||
||Semiconductors Co.,|Director|July 1, 2010|December 1, 2013||
||Ltd.|||||
||Shenzhen SEG Real|||||
||Estate Investment|Chairman|March 1, 2012|May 1, 2013||
||Co., Ltd.||||No|
||Shenzhen SEG|||||
|Ye Jun||||||
||Square Investment &|||||
|||Director|August 1, 2011|June 1, 2016||
||Development Co.,|||||
||Ltd.|||||
||Shijiazhuang SEG|||||
||Square Investment|Director|August 1, 2011|December 1, 2013||
||Co., Ltd.|||||
||SEG Credit|Director|June 1, 2013|Till now||
||||||Yes|
||SEG Credit|President|June 1, 2013|Till now||
||SEG Talent Training|||||
|Xu Ning||Director|July 1, 2014|July 1, 2017|No|
||Center|||||
||Shenzhen SEG|||||
||Hi-tech Industrial|Director|July 1, 2006|January 1, 2017||
||Co., Ltd.|||||
||Shenzhen SI|||||
||Semiconductors Co.,|Director|December 1, 2010|December 1, 2016||
||Ltd.|||||
|Tang||||||
||Tianjin SEG Haijing||||No|
|Chongyin||Director|December 1, 2006|January 1, 2016||
||Co., Ltd.|||||
||Shenzhen Dynamic|||||
|||Chairman|July 1, 2006|December 1, 2016||
||Electronics Co., Ltd.|||||
|||Chairman of||||
||SEG Credit|Board of|May 1, 2014|November 1, 2017||
|||Supervisors||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||||Receiving|
|||Position in|Beginning date of|Ending date of|remuneration|
|Name|Name of other units|||||
|||other units|office term|office term|from other units|
||||||or not|
||SEG E-Commerce|Director|January 1, 2011|May 1, 2013||
||Shenzhen Zhongheng|||||
|||Vice Chairman|July 1, 2006|July 1, 2013||
||Huafa Co., Ltd.|||||
||Shenzhen SEG Real|||||
||Estate Investment|Director|May 1, 2013|January 1, 2017||
||Co., Ltd.|||||
|Peng Aiyun|||||No|
||Shijiazhuang SEG|||||
||Square Investment|Supervisor|August 1, 2011|November 1, 2017||
||Co., Ltd.|||||
||Suzhou SEG|Director|February 1, 2009|September 1, 2011||
||SEG Baohua|Director|March 1, 2009|Till now||
|||Chairman of||||
||Xi'an SEG|Board of|November 1, 2008|Till now||
|||Supervisors||||
|||Chairman of||||
|Tian Jiliang|||||No|
||Longgang SEG|Board of|May 1, 2011|Till now||
|||Supervisors||||
|||Board of||||
||Xi'an Hairong SEG||July 1, 2011|Till now||
|||Supervisors||||
||Wuxi SEG|Supervisor|August 1, 2012|May 1, 2014||
||Shunde SEG|Director|November 1, 2012|Till now||
||Changsha SEG|Supervisor|January 1, 2010|June 1, 2010||
|Ying|Changsha SEG|Director|June 1, 2010|Till now||
||||||No|
|Huadong|Nanjing SEG|Supervisor|April 1, 2011|Till now||
||Nantong SEG|Supervisor|January 1, 2013|Till now||
|||General||||
||SEG Baohua||March 2005|Till now||
|Bo Hongxi||Manager|||Yes|
||SEG Baohua|Director|March 1999|Till now||

III. Information about Remuneration of Directors, Supervisors and Senior Executives
Decision-making procedure and establishment criteria for the remuneration to the directors, supervisors and senior executives, and actual payment
The Company implements the position-based wage system. The annual remuneration of senior executives comprises three parts, namely, the wage (the position-based wage and allowance), year-end bonus, and legal welfare. The wage is decided and monthly paid by the Board of Directors in accordance with the functions of a position and the position-based wage system of the Company; the year-end bonus is decided based on the completing of annual operation targets and work tasks approved by the General Meeting of Shareholders, and is implemented after being approved by the Board of Directors.
According to The Articles of Association, the remuneration of directors and supervisors is determined by the
General Meeting of Shareholders, but, at present, the Company has not implemented the remuneration system for
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. non-independent directors and supervisors except for independent directors. The directors and supervisors of the Company only receive the wages corresponding to their administrative positions. Eight directors (including independent directors) and supervisors of the Company received a total remuneration of RMB 3,702,000 Yuan (pre-tax) in the reporting period. According to the resolution at the
17th
General Meeting of Shareholders (2011) on April 20, 2012, independent directors of the Company will receive monthly allowances for independent directors totaling RMB 100,000 Yuan each year (pre-tax). The travel and accommodation expenses of independent directors due to attendance of the meetings of the Board and the General Meeting of Shareholders as well as the expenses incurred by Independent Directors due to exercising of their powers are reimbursed by the Company according to the actual expenses.
Remuneration for directors, supervisors and senior executives in the reporting period
Unit: RMB ten thousand Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||||||||Actual|
|||||||Total||
||||||Total||remuneration|
|||||||remuneration||
|||||Employment|remuneration||obtained at|
|Name|Title|Gender|Age|||from the||
|||||status|from the||the end of|
|||||||shareholder's||
||||||Company||reporting|
|||||||company||
||||||||period|
|Wang Li|Chairman|Male|53|Incumbent||90.2|90.2|
|Zhang||||||||
||Director|Male|52|Incumbent||74.82|74.82|
|Guangliu||||||||
||Director/ General|||||||
|Liu Zhijun||Male|46|Incumbent|87.99||87.99|
||Manager|||||||
||Director/Vice|||||||
||General|||||||
|Zheng Dan|Manager/Secretary|Female|49|Incumbent|75.48||75.48|
||of the Board of|||||||
||Directors|||||||
|Zhu|Director/ General|||||||
|||Male|53|Incumbent|73.02||73.02|
|Longqing|Manager|||||||
|Ye Jun|Director|Male|54|Incumbent||||
|Zhou|Independent|||||||
|||Male|45|Incumbent|10||10|
|Hanjun|Director|||||||
||Independent|||||||
|Li Luoli||Male|67|Incumbent|10||10|
||Director|||||||
|Song|Independent|||||||
|||Female|47|Incumbent|10||10|
|Pingping|Director|||||||
||Chairman of|||||||
|Xu Ning||Male|49|Incumbent||74.82|74.82|
||Supervisory Board|||||||
|Tang||||||||
||Supervisor|Male|54|Incumbent||57.99|57.99|
|Chongyin||||||||
|Peng Aiyun|Supervisor|Male|41|Incumbent||37.93|37.93|
|Tian Jiliang|Supervisor|Male|48|Incumbent|53.68||53.68|
|Ying||||||||
||Supervisor|Male|45|Incumbent|50.03||50.03|
|Huadong||||||||
|Zhao|Chairman of|||||||
|||Male|60|Left the post||49.88|49.88|
|Xingxue|Supervisory Board|||||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
||||||||Actual|
|||||||Total||
||||||Total||remuneration|
|||||||remuneration||
|||||Employment|remuneration||obtained at|
|Name|Title|Gender|Age|||from the||
|||||status|from the||the end of|
|||||||shareholder's||
||||||Company||reporting|
|||||||company||
||||||||period|
||Vice General|||||||
|Bo Hongxi||Male|56|Incumbent||||
||Manager|||||||
|Total|--|--|--|--|370.2|385.64|755.84|

 Information on equity incentives bestowed to directors, supervisors and senior executives during the reporting period
□ Applicable√ Not applicable
IV. Staff Changes of Directors, Supervisors and Senior Executives
||||||
|-|-|-|-|-|
|Name|Post|Type|Date|Cause|
||Chairman of||||
|Xu Ning|Supervisory|elected|August 27, 2014|Appointment and dismissal|
||Board||||
||Chairman ofSupervisoryBoard||||
|||Left the|||
|Zhao Xingxue|||August 27, 2014|Retired|
|||post|||

V. Changes of core technical team or key technical personnel (non-directors, supervisors and senior managers) during the reporting period
None
VI. Information about employees of the company
At the end of the reporting period, the Company had 407 on-the-job employees and 71 retirees. The pension and medical insurance of the retirees are social pooling as a whole.
(1) The profession composition and education background of on-the-job employees:
(Unit: Person)
|||||||
|-|-|-|-|-|-|
|Profession|Administrative|Financial staff|Technical staff|Sales staff|Production staff|
|composition|staff|||||
|Number|110|31|12|63|191|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Administrative staff
Financial staff
Technical staff
Sales staff
Production staff
|||||||
|-|-|-|-|-|-|
|||||Secondary|High school|
|Education||||||
||Master|Bachelor|College student|(technical school)|(vocational) and|
|background||||||
|||||student|below|
|Number|26|122|137|29|93|

 Master
Bachelor
College student
Secondary (technical
school) student
High school (vocational)
(2) Remuneration principles
Priority to benefits: The remuneration structure and levels are associated with the operating performance, reflecting the priority of benefit. According to the position values, combined with the individual performance and service capabilities, the system sets reasonable salary gaps. It gives proper preferential treatment to core positions and employees who have taken more responsibilities and made great contributions, and therefore reflecting the incentive salary system.
Reward based on achievements: According to the employee performance and service capabilities, combined with the organizational performance, the system adjusts the remuneration, and associates the remuneration level with the organizational performance, employee performance, and employee capabilities, and therefore reflecting the organizational and personal values.
Remuneration changes with positions: The remuneration system supports the development of employees' career.
The remuneration must strictly comply with the positions. Therefore, the remuneration varies with the positions.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Dynamic adjustment: According to the development strategies of the Company and the operating strategies of each investment and holding enterprise, combined with dynamic development trends of the industry, the organization and position responsibilities are changed when the business model and organization structure are significantly changed. The remuneration structure and salary level must be adjusted dynamically to meet the service development requirements.
Chapter 9 Corporate Governance
I. Basic information on corporate governance
1. Basic information on corporate governance
During the reporting period, the Company continuously improved the governance structure and promotes the internal management and control system in accordance with the Company Law, the Securities Law, the Code of Corporate Governance for Listed Companies in China, Shenzhen Stock Exchange Listing Rules, and laws and regulations on corporate governance of listed companies. In the meantime, the Company implements special activities for perfecting the corporate governance structure and standardization of internal control system. The company continuously strengthens information disclosure and actively improves investor relations management. By the end of the reporting period, the actual governance status of the Company is basically in line with the corporate governance requirements for listed enterprises issued by China Securities Regulatory Commission. The corporate governance status is as follows:
1) The Company and controlling shareholders:
The Company strictly regulates behaviors of shareholders according to the Code of Corporate Governance for Listed Companies in China, Shenzhen Stock Exchange Listing Rules, and Articles of Association. The shareholders exercise the shareholder rights through general meeting of stockholders. Interventions on the Company's operating and decision-making beyond the general meeting of stockholders and the Board of Directors did not occur. The Company has independent business and operating autonomy. The Company is independent from the controlling shareholders, Board of Directors, Board of Supervisors and internal organizations in terms of business, assets, personnel, organization, and finance.
2) Shareholders and general meeting of stockholders
The Company convenes and holds general meeting of stockholders in strict accordance with the Articles of Association and Rules of Procedure of Shareholders' Meeting. Within the reporting period, the situation in which shareholders individually or jointly hold more than10% of the Company's voting shares request for an extraordinary general meeting did not occur, and no general meeting of stockholders proposed by the Board of Supervisors was held. During the reporting period, the Company's decisions are reviewed and decided by the general meeting of stockholders in accordance with the provisions of Company Law and Articles of Association. The situation in which decisions are made without the general meeting of stockholders involved or decisions are implemented before being reviewed did not occur.
3) Directors and Board of Directors
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. The Company elects directors in strict accordance with the provisions of Articles of Association. The Board of Directors includes nine directors and three independent directors. The number of directors and the composition of the Board of Directors comply with the laws and regulations. The Board of Directors consists of three specialized committees. The Board of Directors implement works in strict accordance with the relevant provisions of the Articles of Association, Working System of Independent Directors, and Rules of Procedure of Board of Directors. All the directors of the Company attend the Board meeting and general meeting of stockholders seriously and actively participate the related training to learn relevant laws and regulations. The independent directors independently perform their duties, maintain the overall interests of the Company, prefect legitimate interests of minority shareholders from being damaged, and give independent opinions on major issues.
4) Supervisors and the Board of Supervisors
The Company elects supervisors in strict accordance with the Company Law and Articles of Association. The number of supervisors and the composition of the Board of Supervisors comply with the laws and regulations. The Company has developed the Rules of Procedure of the Board of Supervisors. The qualification, appointment and dismissal of the supervisors meet the related requirements. The supervisors attend the Board of Supervisors meeting seriously. The supervisors review periodic reports drafted by the Board of Directors and provide written examination opinions by means of attending the general meeting of stockholders, attending the Board of Directors meeting, and holding Board of Supervisors meeting. The supervisors effectively supervise the major issues, related party transactions, financial situation, as well as the job validity and compliance of the company directors and senior management personnel.
5) Information disclosure and transparency
In strict accordance with the Information Disclosure Management Methods and Investor Relations Management System, the Company has designated the Office of the Secretary of the Board of Directors to perform information disclosure and handle the visits and consultation of shareholders. The Company has also nominated "China Securities News", "Securities Times", "Securities Daily",―Hong Kong CommercialDaily‖ newspapers and CNINFO as the media for the company information disclosure. The information disclosed is truthful, accurate, timely and complete, thereby ensuring that all investors can equitable access to the company information. The Company will further strengthen ties and communication with supervision departments, and report company matters in a timely and proactive manner. The Company will continue to understand the information disclosure requirements in an accurate way.
Is there any discrepancy between corporate governance practices and related regulations as set in the Company Law and as required by China Securities Regulatory Commission?
√ Yes□ No
2. Non-normative governance
During the reporting period, the Company improved the governance structure and promoted the internal management and control system in accordance with the Company Law, the Securities Law, and the Code of Corporate Governance for Listed Companies in China and other laws and regulations on corporate governance of listed companies. However, the Company still encounters the following issues:
1) The controlling shareholders manage the Company through the Property Right Representative Report System. The Company's controlling shareholder SEG Group is a state-controlled corporation in Shenzhen and Shenzhen
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. State-owned Assets Supervision and Administration Bureau is the controlling shareholder of SEG Group. It must implement the Property Right Representatives Report System for state-owned assets management according to the management methods of Shenzhen for state-owned assets.
2) In respect of assessment on human resources, the Company's controlling shareholder SEG Group implements the annual performance assessment on Senior Executives according to the completing of annual operation indicators and other indicators stipulated by SEG Group.
The company reports the non-public information to the major shareholders and the actual controllers.
The company reports the non-public information to the major shareholders and the actual controls based on the property right representative reporting system and requirements of the national statistical departments. In accordance with the requirements of state-owned assets supervision department, the Company has been submitting monthly flash reports to the majority shareholder and the actual controller and reporting important issues to the majority shareholder and the actual controller before they are disclosed. The Company submitted the Undisclosed Information Provided by Listed Companies for the Majority Shareholder or Actual Controller and Letter of Commitment to Shenzhen Securities Regulatory Bureau on October 18, 2007. SEG Group offered the Letter of Commitment on Strengthening Management of Undisclosed Information to Shenzhen Securities Regulatory Bureau. Meanwhile, the Company has established and implemented the Non-public Information Insider Reporting System and the Confidentiality System of Shenzhen SEG Co., Ltd for Insiders of Non-public Information and has monthly reported to Shenzhen Securities Regulatory Bureau about its reports of unpublicized information. Senior executives and all employees at the headquarters signed a Confidentiality Agreement with the Company on July 15, 2009. The Confidentiality Agreement clearly stipulates that all employees are obligated to hold confidential the business secrets and undisclosed information of the Company.
The nonpublic information the Company offered to the Company's majority shareholder and actual controller in the reporting period is as follows:
|||||||||
|-|-|-|-|-|-|-|-|
|||Relationship||||||
||Organization|||||||
|||between the|||Time or||Procedure|
||to which||Type of|||||
|No.||organization||Procedure of report|period|Basis for report|of|
||information||information|||||
|||and the|||of report||approval|
||is reported|||||||
|||Company||||||
|1|ShenzhenSEG GroupCo., Ltd.|Controllingshareholder(30.24%)|The flashreport of mainfinancialindicators ofthe Companyregistered inShenzhen|The investedcorporation of theCompany and thefinancial staff at theHeadquartersprepare the reportand consolidate thestatements, whichare reviewed by theleadership of theFinancialDepartment andreported through theState-owned AssetManagementInformation System.|Monthly|The documentNotice aboutFormulation of theMonthly FlashReport ofEnterprisesSupervised byStated-owned AssetsSupervision andAdministrationCommission of theState Council(SASAC [2003]23)|The BoardofDirectorsagrees toreport|
|2|Shenzhen|Controlling|Summary sheet|The invested|Monthly|The document|The Board|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|||Relationship||||||
||Organization|||||||
|||between the|||Time or||Procedure|
||to which||Type of|||||
|No.||organization||Procedure of report|period|Basis for report|of|
||information||information|||||
|||and the|||of report||approval|
||is reported|||||||
|||Company||||||
||SEG GroupCo., Ltd.|shareholder(30.24%)|ofimplementationof monthlyexpense budget|corporation of theCompany and thefinancial staff at theHeadquartersprepare the sheet andconsolidate thestatements, whichare reported throughthe State-ownedAsset ManagementInformation System.||Notice aboutFormulation of theMonthly FlashReport ofEnterprisesSupervised byStated-owned AssetsSupervision andAdministrationCommission of theState Council(SASAC [2003]23)|ofDirectorsagrees toreport|
|3|ShenzhenSEG GroupCo., Ltd.|Controllingshareholder(30.24%)|Summary sheetof monthlycash flow|The investedcorporation of theCompany and thefinancial staff at theHeadquartersprepare the sheet andconsolidate thestatements, whichare reported throughthe State-ownedAsset ManagementInformation System.|Monthly|The documentNotice aboutFormulation of theMonthly FlashReport ofEnterprisesSupervised byStated-owned AssetsSupervision andAdministrationCommission of theState Council(SASAC [2003]23)|The BoardofDirectorsagrees toreport|
|4|ShenzhenSEG GroupCo., Ltd.|Controllingshareholder(30.24%)|Summary sheetof deposits,financing, andloans of theHeadquarters|The financialpersonnel at theHeadquartersprepare the sheet thatis reported throughthe State-ownedAsset ManagementInformation System.|Quarterly|The documentNotice aboutFormulation of theMonthly FlashReport ofEnterprisesSupervised byStated-owned AssetsSupervision andAdministrationCommission of theState Council(SASAC [2003]23)|The BoardofDirectorsagrees toreport|
|5|ShenzhenSEG GroupCo., Ltd.|Controllingshareholder(30.24%)|Summary sheetof quarterlynon-operatinggains andlosses of theCompanyregistered inShenzhen|The investedcorporation of theCompany and thefinancial staff at theHeadquartersprepare the sheet andconsolidate thestatements, whichare reported throughthe State-ownedAsset ManagementInformation System.|Quarterly|The documentNotice aboutFormulation of theMonthly FlashReport ofEnterprisesSupervised byStated-owned AssetsSupervision andAdministrationCommission of theState Council|The BoardofDirectorsagrees toreport|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|||Relationship||||||
||Organization|||||||
|||between the|||Time or||Procedure|
||to which||Type of|||||
|No.||organization||Procedure of report|period|Basis for report|of|
||information||information|||||
|||and the|||of report||approval|
||is reported|||||||
|||Company||||||
|||||||(SASAC [2003]23)||
|6|ShenzhenSEG GroupCo., Ltd.|Controllingshareholder(30.24%)|Summary sheetof quarterlyinformation oninvestmentproperties ofthe Companyregistered inShenzhen|It began to bereported since June2009.The investedcorporation of theCompany and thefinancial staff at theHeadquartersprepare the sheet andconsolidate thestatements, whichare reported throughthe State-ownedAsset ManagementInformation System.|Quarterly|The documentNotice aboutFormulation of theMonthly FlashReport ofEnterprisesSupervised byStated-owned AssetsSupervision andAdministrationCommission of theState Council(SASAC [2003]23)|The BoardofDirectorsagrees toreport|
|7|ShenzhenSEG GroupCo., Ltd.|Controllingshareholder(30.24%)|Monthlyconsolidatedstatements(including theBalance Sheet,the ProfitStatement, theCash FlowStatement, theNotes toPreparation ofthe Statementsand theFinancialStatements)|They should bereported everymonth after beingprinted, signed andsealed and reportedevery quarterthrough theState-owned AssetManagementInformation System.They began to bereported on line fromJuly 2008.|Monthly|The Notice ofShenzhen SEGGroup Co., Ltd onSubmitting ofMonthly Statements|The BoardofDirectorsagrees toreport|
|8|ShenzhenSEG GroupCo., Ltd.|Controllingshareholder(30.24%)|Statisticalsurvey on thestatements ormonthly andannual reportsof theproduction ofelectronicsinformationindustry|Sealed by theCompany|Monthlyandannually|It was provided byArticle Three of theStatistics Law of thePeople's Republic ofChina that stateorgans, socialorganizations,corporations, publicinstitutions andprivately orindividually ownedbusinesses, onwhich statisticalsurvey isimplemented, mustcomply with theStatistics Law andthe regulations ofthe state and provide|The BoardofDirectorsagrees toreport|
||ShenzhenStatisticsBureau|Governmentbranch||||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|||Relationship||||||
||Organization|||||||
|||between the|||Time or||Procedure|
||to which||Type of|||||
|No.||organization||Procedure of report|period|Basis for report|of|
||information||information|||||
|||and the|||of report||approval|
||is reported|||||||
|||Company||||||
|||||||statistical datafaithfully but notmake a false report,conceal data, refuseto report, delay thereport, or fabricateor falsify data.Self-governing massorganizations at thegrass roots level andcitizens have theobligation to providetruthfully theinformation requiredby the statisticalsurvey of the state.||
|9|ShenzhenSEG GroupCo., Ltd.|Controllingshareholder(30.24%)|Summary sheetof quarterlyfinancial assets|Sealed by theCompany|Quarterly|The documentNotice aboutFormulation of theMonthly FlashReport ofEnterprisesSupervised byStated-owned AssetsSupervision andAdministrationCommission of theState Council(SASAC [2003]23)|The BoardofDirectorsagrees toreport|
|10|ShenzhenSASAC|Actualcontroller|List of top 100shareholders ofA-shares andB-shares ineach quarter of2014|The hard copy of theofficial website ofShenzhen Branch ofChina SecuritiesDepository andClearing CorporationLimited|Quarterly|The requirementsfrom 2014 Shenzhenstate-ownedenterprise capitaloperationconference|The BoardofDirectorsagrees toreport|

3. Implementation of the corporate governance activities and the establishment and implementation of insider information and insider registration management system
(1) Implementation of corporate governance activities
To implement the Basic Standard for Enterprise Internal Control and related guidelines, according to the requirements of China Securities Regulatory Commission and Shenzhen Securities Regulatory Bureau, the Company has officially launched the basic norms of internal control compliance program (hereinafter referred to as the "Internal Control Project "). During the reporting period, the Company has hired Grant Thornton Public
Accountants Co., Ltd (special general partner) to independently audit the company's internal controls. During the
reporting period, the Company has established internal control for the business and issues that are incorporated
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. into the evaluation scope. The internal control has been implemented effectively to achieve the objectives. There are no major defects. Since the base date for the internal control evaluation report till the publishing of the internal control evaluation report, no major changes of the internal control that significantly affects the evaluation conclusions occurred.
During the reporting period, the Company has organized the directors, supervisors, and senior management personnel to attend the "Shenzhen Second Insider Trading Alerts Education Fair" organized by Shenzhen Securities Regulatory Bureau on November 7, 2014. The staffs learned the laws and regulations against the insider trading and the related cases, and clarified specific requirements for preventing insider trading. Based on the Internal Check Reference Manual for Listed Company released on August 22, 2014 by Shenzhen Securities Regulatory Bureau, the Company positively perfected the internal control check system and reviewed and organized the internal control system. The Company fully promoted and fulfilled special works under the spirit of Shenzhen Securities Regulatory Bureau, to effectively protect the legitimate rights and interests of investors. By means of the above works, the Company has improved the normative consciousness.
(2) Implementation of the insider information and insider management system
According to the requirements of China Securities Regulatory Commission and Shenzhen Securities Regulatory Bureau, the seventh meeting of the Fifth Board of Directors, held on October 28, 2009, approved the Insider Information and Insider Management System of Shenzhen SEG Co., Ltd. For details, refer to the notice released on http://www.cninfo.com.cn on October 30, 2009. During the reporting period, the Company controls the scope of insiders in strict accordance with the Insider Information and Insider Management System, and registers the insiders and their personal information in a timely manner. In this year, issues in which insiders use internal information to trade the company's shares before the Company releases major sensitive information that affects the stock price did not occur, or the issues in which improper implementation of the insider registration regulations or suspicious insider information trading were punished by the supervisory department with supervision measures occurred.
During the reporting period, the directors, supervisors and senior management personnel did not illegally trade theCompany‘s stock.
II. Annual meeting of shareholders and interim meeting of shareholders held in the reporting period
1. Annual meeting of shareholders in the reporting period
|||||||
|-|-|-|-|-|-|
||||Resolution|Disclosure||
|Meeting No.|Date|Resolution name|||Disclosure index|
||||status|date||
|||11. 2013 Work Report of the Board||||
|||of Directors; 2. 2013 Work Report||||
|||of the Board of Supervisors; 3. Final||||
|The 19th||Account Report 2013 of the|All|||
|||Company; 4. Annual Budget Report||||
|Meeting of|||resolutions|April 12,|http://www.cninf|
||April 11, 2014|2014 of the Company; 5. Plan on||||
|Shareholders|||were|2014|o.com.cn|
|||Profit Distribution and Transfer of||||
|(2013)|||approved.|||
|||Capital reserve into Share Capital in||||
|||2013; 6. 2013 Annual Report and||||
|||Report Summary of the Company;||||
|||7. Proposal on Auditor Engagement||||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
||
|-|
|for the 2014 Annual Report and|
|Payment of Audit Fee 2014; 8.|
|Proposal on Engagement of Internal|
|Control Auditor for the 2014 Annual|
|Report and Payment of Internal|
|Control Audit Fee; 9. The|
|Resolution on Requesting the|
|General Meeting of Shareholders to|
|Amend the Proposal on|
|Procurement of Investment Products|
|with Self-owned Idle Funds of the|
|Company approved in the Second|
|Extraordinary General Meeting in|
|2013; 10. The Proposal on Applying|
|for General Credit Limit of RMB 1.3|
|Billion Yuan From Agricultural|
|Bank of China.|

2. Interim meeting of shareholders held in the reporting period
|||||||
|-|-|-|-|-|-|
||||Resolution|Disclosure|Disclosure|
|Meeting No.|Date|Resolution name||||
||||status|date|index|
|First Interim||||||
|||Proposal for plot maturation||||
|Meeting of|||All resolutions|April 24,|http://www.cn|
||April 23, 2014|and project construction of||||
|Shareholders in|||were approved.|2014|info.com.cn|
|||Yantai SEG Times Square||||
|2014||||||
|||1. Proposal for investing into||||
|||the public land auction and||||
|||project construction of Xi'an||||
|||SEG Times Square; 2. Proposal||||
|Second Interim||||||
|||for revising the Articles of||||
|Meeting of|||All resolutions||http://www.cn|
||July 21, 2014|Association; 3. Proposal for||July 22, 2014||
|Shareholders in|||were approved.||info.com.cn|
|||revising the Rules of Procedure||||
|2014||||||
|||of Shareholders' Meeting; 4.||||
|||Proposal for Procurement of||||
|||Investment Products with||||
|||Self-owned Idle Funds||||
|||1. Proposal for electing||||
|||company supervisors; 2.||||
|Third Interim||Proposal for revising the||||
|Meeting of||Articles of Association; 3.|All resolutions|August 28,|http://www.cn|
||August 27, 2014|||||
|Shareholders in||Proposal for revising the Rules|were approved.|2014|info.com.cn|
|2014||of Procedure of the Board of||||
|||Supervisors of Shenzhen SEG||||
|||Co., Ltd.||||
|Fourth Interim||Proposal about Offering||||
|Meeting of|December 23,|Shenzhen SEG E-Commerce|All resolutions|December 24,|http://www.cn|
|Shareholders in|2014|Co., Ltd. with 60 Million Yuan|were approved.|2014|info.com.cn|
|2014||Financial Assistance||||

3. Preferred shareholders with voting rights restored requesting for holding Interim Meeting of
Shareholders
□ Applicable√ Not applicable
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. III. Performance of independent directors in the reporting period
1. Attendance of independent directors in meetings of the Board of Directors and the general meeting of shareholders
||||||||
|-|-|-|-|-|-|-|
|Attendance of independent directors in meetings of the Board of Directors of the Company|||||||
|||||||Failure to|
||Number of||||||
|||||||attend the|
|Name of|meetings to be|Times of|Attendances|Times of|||
||||||Times of|meeting in|
|independent|attended in the|personal|through|entrusted|||
||||||absence|person in two|
|director|reporting|presence|communication|presence|||
|||||||consecutive|
||period||||||
|||||||times|
|Zhou Hanjun|17|4|13|0|0|No|
|Li Luoli|17|3|13|1|0|No|
|Song Pingping|17|4|13|0|0|No|
|Times for independent directors to|||||||
|attend the general meeting of||5|||||
|shareholders|||||||

Reasons for failure to attend the meeting in person in two consecutive times
2. Objections raised by independent directors against relevant matters of the Company
Whether independent directors raised objections against relevant matters of the Company
□ Yes√ No
The independent directors did not raise any objection against relevant matters of the Company in the reporting period.
3. Other descriptions about the performance of independent directors
Whether the independent directors accepted proposals of the Company
√ Yes□ No
Description about independent directors accepting or rejecting proposals of the Company
During the reporting period, independent directors fully exercise the powers conferred by the Articles of Association. With their professional expertise, they work with a reasonable caution and diligence attitude to promote scientific decision-making and related procedures and to protect overall interests of the Company, especially legitimate rights and interests of minority shareholders.
1) The independent directors participate in board meetings in a timely manner and actively fulfill duties of independent directors. The independent directors have carried out in-depth understanding and careful study on various proposals made by the Board of Directors. The independent directors actively participate in the discussions and put forward reasonable proposals. Besides general duties of directors, the independent directors at the same time always concern about the significant events occurring, independently perform duties beyond the
influence from the Company's controlling shareholder, actual controller or units or personals having stake in the
Company's decision-making. The independent directors review the related transactions, external guarantees,
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. internal control self-assessment and other important matters in an objective and careful manner. They issue separate opinions and fulfill the supervision duties.
2) The independent directors actively participate in the work of the Professional Committee of the Board of Directors. The independent directors also have positions in the Strategic Development Committee, the Audit Committee, and Remuneration Committee of the Board of Directors. The independent directors are actively involved in the daily work of the professional committee to provide professional advice and suggestions in terms of the Company's development plans, feasibility of major projects, and issuance of short-term financing bonds, in accordance with the Working Rules of the professional committee. The independent directors support the Board of Directors to make scientific and prudent decisions.
3) The independent directors focus on the Company's internal control system construction. The independent directors communicate with the management and personnel in related departments regarding to the construction and evaluation of the internal control system for multiple times, and provide professional suggestions based on their experience. They play a supervisory role of independent directors to oversee and promote the company continue to improve corporate governance structure, establish a sound internal control system, continue to carry out activities to improve the company's standardized operation.
4) The independent directors in-depth understand the Company's situation. In 2014, the independent directors have paid on-site visits to the Company and the investment companies, to understand the Company's daily operations and project construction in a deeply manner. Meanwhile, the independent directors are in close contact with other directors, senior management personnel, and other related staff by phone calls and emails, so as to learn the impacts caused by external environment and market changes on the Company and the progress of the Company's major issues in a timely manner. In addition, the independent directors continue to focus on information disclosure, and effectively monitor and verify information disclosure. In this manner, the independent directors ensure that a timely and fair disclosure of corporate information, so that the public shareholders can keep abreast of the latest development of the company.
Proposals raised by independent directors and the adoption of proposals
|||||
|-|-|-|-|
||||Adoption|
|Proposal raised by|Proposal content|Form||
||||status|
|Zhou Hanjun, Song Pingping, LiLuoli|Proposal for developing the electronics market usingthe Company's self-built property|Oral|Adopted|
|Zhou Hanjun, Song Pingping, LiLuoli|Proposal for business transformation and upgrading|Oral|Adopted|
|Zhou Hanjun, Song Pingping, LiLuoli|Proposal for improving the company internal controlsystem and working out a comprehensive riskmanagement program|Oral|Adopted|
|Song Pingping, Zhou Hanjun|Proposal for available capital worksProposal for increased focus on new investmentpatterns and the development of emerging industries|Oral|Adopted|
|Zhou Hanjun, Li Luoli|Proposal for the company organizational restructuringand establishment of department assessment indicators|Oral|Adopted|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.
|||||
|-|-|-|-|
|Li Luoli, Song Pingping|Proposal for strengthening the building of enterpriseculture and improving staff cohesion|Oral|Adopted|

IV. Performance of duties by special committees of the Board of Directors
During the reporting period, the Audit Committee, Remuneration Committee, and Strategic Development Committee under the Board of Directors fully play their duties in a serious way according to the powers and duties conferred by the Code of Corporate Governance for Listed Companies in China, Articles of Association, and Rules of Procedure of the Board of Directors.
1. Performance of duties by the Audit Committee of the Board of Directors
In accordance with the requirements of the Working Rules of the Audit Committee of Shenzhen SEG Co., Ltd and the Working Procedures of the Audit Committee of Shenzhen SEG Co., Ltd for the Annual Report, the Audit Committee, in the reporting period, performed its duty in a serious way, implemented supervision and inspection on the establishment and improvement of the internal control system of the Company and a comprehensive inspection on the annual financial auditing.
1) The review opinion of the Audit Committee on the 2014 Financial Statements of the Company.
In the reporting period, the Audit Committee reviewed the annual financial statements and issued opinions for twice in accordance with relevant provisions of CSRC.
(1) Before the entrance of the certified public accountant for annual auditing, the Audit Committee reviewed the financial statements to be audited and issued the first opinion in writing. The Audit Committee believed that the Company formulated reasonable accounting policies and appropriate accounting estimates in accordance with relevant requirements of the new accounting standard and based on the actual conditions of the Company; the financial statements prepared by the Company truthfully reflected the financial status of the Company as of December, 2014 and the operating results and cash flow of the Company in 2013. The Committee approved the use of these financial statements as the basis for implementation of the audit work for 2013.
(2) After the completing of the first draft by the CPA, the Audit Committee read the draft in time and communicated with the CPA. There was no dispute on the important issues mentioned by the 2014 Financial Statements between the Committee and the CPA. The financial statements comply with the provisions of the Accounting Standard for Business Enterprises and relevant laws and regulations. The Audit Committee approved the use of these financial statements as the basis for the preparation of the 2014 Annual Report and Report Summary.
2) Supervision on and impelling over the audit work of the accounting firm
After consultation with Beijing Da Hua Certified Public Accountants Co., Ltd, the auditing institution of 2014, the arrangement for the 2014 auditing was decided by the Company in December 2014, which was reported to the Audit Committee in time. After communication with the auditing institution, the Audit Committee believed that the Company had made preparations in advance based on the actual situation and its time arrangement for the annual auditing was appropriate. The Audit Committee approved the annual audit plan formulated by the auditing
institution. After the entrance of the auditing institution, the Audit Committee communicated with the relevant
personnel including the main responsible person of the project, the CPA whose signature was provided, got
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. known about the progress of the audit and the issues concerned about by the CPA, and reported the progress and the issues to relevant department of the Company in time.
3) The work summary of the Audit Committee for the 2014 auditing conducted by Beijing Da Hua Certified Public Accountants Co., Ltd.
In order to implement a timely, accurate, true and complete auditing on the annual financial status of the Company, the accounting institution had implemented initial investigations and arranged the pre-audit in December 2014, and made technical preparations for adjustments to various accounting items in advance in accordance with requirements of the Accounting Standard.
During the annual audit, the Audit Committee communicated with the CPA and reviewed the first draft of the annual report. The Audit Committee believed that the CPA could perform his duty in strict accordance with auditing laws, regulations and principles, focused on understanding the Company and its operating environment, understood the establishment, improvement and implementation of the internal control system of the Company, had a strong awareness of risks, and could finish the audit work in time in accordance with the arranged schedule. The Audit Committee believed that the CPA was independent and discreet, well finished the auditing on the Financial Statements of the Company for the Year 2014, and issued a true, objective and fair audit report.
4) The Audit Committee implemented supervision and inspection on the establishment and improvement of the internal control system and the defect rectification status, and listened to the report about the establishment of the internal control standardization system.
5) Three meetings were held in the reporting period by the Audit Committee of the Board of Directors and the details were as follows:
(1) The Audit Committee of the Company held the first meeting of 2014 on March 9, 2014 in way of communication. The meeting reviewed and approved the Opinions on the Company's 2013 Annual Financial Report of the Audit Committee, the work summary the 2013 annual auditing conducted by Beijing Da Hua Certified Public Accountants Co., Ltd, Proposal on Auditor Engagement for the 2014 Annual Report and Payment of Audit Fee, and Proposal on Engagement of Internal Control Auditor for the 2014 Internal Control and Payment of Internal Control Audit Fee.
(2) The Audit Committee of the Company held the second meeting of 2014 on July 21, 2014 in way of communication. The meeting reviewed and approved the Comprehensive Risk Management Approach and Internal Control Deficiencies Identification Criteria.
(3) The Audit Committee of the Company held the third meeting of 2014 on December 23, 2014 in the conference room of the Company. The meeting reviewed and approved the Shenzhen SEG Communication Co., Ltd. 2014 Annual Audit Work Plan and Communication Report of the Audit Committee.
2. Performance of duties by the Wage and Assessment Committee of the Board of Directors
The opinion of the Remuneration Committee on the disclosed remuneration of the Directors, Supervisors and Senior Executives of the Company: Managing Director and Chief Financial Officer Liu Zhijun, Director and Vice General Manager and Secretary of the Board Zheng Dan, Director and Vice General Manager Zhu Longqing, Supervisor Tian Jiliang and Supervisor Ying Huadong only received the wages corresponding to their respective administrative posts; Independent Directors Zhou Hanjun, Li Luoli, and Song Pingping received allowances for
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. independent directors; other directors and supervisors did not receive wages from the Company. The Company had not implemented the non-independent director and supervisor remuneration system yet.
Two meetings were held in the reporting period by the Remuneration Committee of the Board of Directors and the details were as follows:
1) The Remuneration Committee of the Company held the first meeting of 2014 on February 25, 2014 in way of communication. The meeting reviewed and approved the Shenzhen SEG Co., Ltd. Proposal for the Company's Organization Restructuring.
2) The Remuneration Committee of the Company held the second meeting of 2014 on December 23, 2014 in the conference room of the Company. The meeting reviewed and approved the Shenzhen SEG Co., Ltd. Report on the Development of Innovative Employees.
3. Performance of duties by the Development Strategy Committee of the Board of Directors
Two meetings were held in the reporting period by the Development Strategy Committee of the Board of Directors and the details were as follows:
1) The Development Strategy Committee of the Company held the first meeting of 2014 on December 23, 2014 in the conference room of the Company. The meeting reviewed and approved the Shenzhen SEG Co., Ltd. Evaluation Report on the
12th
Five-Year Strategic Plan in the Electronics Market.
2) The Development Strategy Committee of the Company held the second meeting of 2014 on December 31, 2014 in way of communication. The meeting reviewed and approved the Company Annual Rolling Business Plan 2015-2017.
V. Performance of the Board of Supervisors
Whether the Board of Supervisors found any risk in the Company during supervision in the reporting period□ Yes√ No
The Board of Supervisors raised no objections against the supervised matters in the reporting period.
VI. Description about the Company's independence from controlling shareholders in terms of business, personnel, asset, organization and finance
1. In the aspect of business, Shenzhen Securities Regulatory Bureau pointed out that "There is an issue of horizontal competition in the business of electronics markets between the Company and SEG Group" during the spot inspection in 2007; the Company received the Letter of Commitment in writing from SEG Group on September14, 2007, which said that "SEG Group and Shenzhen SEG Co., Ltd. have similar business in electronics markets in Shenzhen (Shenzhen SEG) due to historic reasons and the objective background of market development; our Group hereby promises that we will not individually operate a market in a same city whose business is similar with that of Shenzhen SEG. The aforesaid matter was disclosed on the Securities Times, the China Securities Journal and the Hong Kong Wen Wei Po and the Cninfo Website on September 18, 2007. In order to solve the issue of horizontal competition between the Company and its controlling shareholder, SEG
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Group, due to historical reasons, the
6th
temporary meeting of the
5th
Board of Directors held on January 26, 2011 reviewed and approved the Proposal of Solving the Horizontal Competition between the Company and Its Controlling Shareholder. After friendly consultation, SEG Group agreed to entrust the Company to operate and manage with full authority SEG Communications Market under direct management of SEG Group. Therefore, the two parties have signed the entrustment operation and management contract:
1) SEG Group has the ownership and the right to gains of SEG Communication Market and assumes all creditor's rights and liabilities occurring during the operation of SEG Communications Market. (2) The management representative from the Company shall operate and management SEG Communications Market during the period of entrustment operation and management, who has a sufficient authority in operation and management of SEG Communications Market. (3) In accordance with the provisions of the Company on entrustment management of the electronics market and with full consideration to the maturity of the entrusted market and whether the market is located in a primary business area, the Company shall collect from SEG Group the management fee and profit fee as follows based on the market sound value: the total income of SEG Communications Market in 2010, RMB 20 million Yuan, shall be regarded as the base number; the Company shall collect a management fee of RMB 200,000 Yuan should the total income of the market in the current year is equal to or less than RMB 20 million Yuan; the Company shall take20% from the part beyond the base number apart from the management fee that is RMB 200,000 Yuan should the total income in the current year exceeds RMB 20 million Yuan. The detailed information about the above-mentioned matter may be referred to in the Public Notice on Shenzhen SEG Co., Ltd on the Related Transaction for the Purpose of Solving the Issue of Horizontal Competition between the Company and the Controlling Shareholder that was disclosed on the China Securities Journal, the Securities Times, the Hong Kong Commercial Daily and the Cninfo Website on January 28, 2011. Till the date of disclosure of this report, the Company had received the timely payment of the management fee of 2011 to 2014, RMB 200,000 Yuan, from SEG Group. Therefore, there is no longer the issue of horizontal competition between the Company and SEG Group.
2. In respect of personnel, the Company's Senior Executives including General Manager, Vice General Manager and Secretary of the Board of Directors take full-time posts; they receive wages from the Company and do not take concurrent posts in the Company's first majority shareholder enterprise; the Company has a complete management system for labor, human resources and wages, which can keep the independence of the personnel. 3. In respect of assets, at the beginning of the Company's establishment, the equity of the eight enterprises separated from SEG Group to the Company was already audited and evaluated by domestic and overseas accounting firms, which was acknowledged by the state-owned assets management departments of the state and Shenzhen Municipality. The controlling shareholder of the eight enterprises was changed from SEG Group to the Company, which was registered at the Industrial and Commercial Administration. The Company independently makes registration, establishes accounts, and implements accounting and management so as to maintain the completeness and independence of the assets. According to the Article Five of the Equity Transfer Agreement signed by the Company with SEG Group when the Company was listed, SEG Group agreed that the Company and its subsidiaries and associated companies to use the eight trademarks registered by SEG Group at the National Trademark Bureau; SEG Group agreed that the Company used the aforesaid trademarks or similar signs as the Company's logo and used the trademarks and signs during its operation; the Company needn't pay any fee to SEG Group for using the aforesaid trademarks or signs.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 4. In respect of organization, the Company can set up organizations and arrange corresponding personnel fully in accordance with its own demand of operation and management; its production and administrative departments are totally independent from the majority shareholder.
5. In respect of finance, as a legal entity that implements independent operation and accounting and assumes sole responsibility for its profits and losses, the Company has set up an independent financial and auditing department, an independent accounting system and an financial management system, has its independent bank account, pays taxes independently according to law, and keeps absolute independence in its financial work.
VII. Horizontal competition
□ Applicable√ Not applicable
VIII. Assessment and incentive system for senior executives
Performance management principles for senior management personnel
1) Target management principles: In accordance with the annual business objectives and business management requirements, the performance of senior management personnel is managed based on the objectives.
2) Classified assessment principles: Based on the industry characteristics of the industry, the performance is assessed based on classification.
3) Incentive and restraint combined principles: Based on the completion of annual objectives, incentives or punishment on the senior management personnel are implemented in a combination way.
Chapter 10 Internal Control
I. Establishment of the Internal Control System
In 2014, on the basis of the internal control system built up in the previous year, the Company closely associates the risk management and the internal control system. By re-evaluating the changes of major operating risks, the Company further improves the internal control system, and focuses on the assessment of comprehensive risk management and internal control system. The internal risk control and evaluation team has completed a self-evaluation of the organization and its affiliated investment enterprises in 2014. The team members are required to avoid the evaluation for the respective departments, to ensure the independence of the internal control evaluation. The Company has established the internal risk control team and completed the risk evaluation. The Company plans to carry out risk identification and evaluation again in 2015, establish a risk event library, stipulate risk monitoring and early-warning indicators, work out coping plans, and improve the internal control system.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 1. The present architecture of internal risk control system of the Company
Comprehensive risk control
management and internal
control team
Internal risk control evaluation Internal risk control team
team
Internal risk Internal risk Internal risk
control team of control team of control team of
……
subsidiary or subsidiary or subsidiary or
branch A branch B branch N
Person in charge Person in charge Person in charge Person in charge
of risk control of of risk control of of risk control of of risk control of
the department the department the department
…… the department
(Person in charge (Person in charge (Person in charge (Person in charge
of the department) of the department) of the department) of the department)
Risk control Risk control Risk control Risk control
commissioner commissioner commissioner commissioner
……
(Department (Department (Department (Department
backbone) backbone) backbone) backbone)
2. Internal Control Promotion Progress in the Reporting Period
In 2014, the Company has established the internal control systems for the last three units in the fourth batch according to the annual internal control work plan, namely, Shunde SEG, Wuxi SEG, and Nanning SEG. The process organizing, testing, and internal control defect rectification are completed. In addition, the Company has inspected the internal control works of 10 holding subsidiaries in the on-site inspection manner. The inspection focused on Nantong SEG, Wujiang SEG, Shunde SEG, Wuxi SEG, and Nanning SEG. The internal risk control team has completed the self-evaluation of the internal control system for the Company and the investment enterprise, including the organization of enterprise system process, quantitative sampling tests on certain units, and rectification of existed internal control defects.
3. External auditors hired for internal control in 2014
The Company has hired Beijing Da Hua Certified Public Accountants Co., Ltd (special general partner) to audit the company's internal controls. No major internal control defects are found during the auditing. For several general defects, the Company has required the internal risk control team to complete the rectification.
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. II. Statement of the Board of Directors on Internal Control Responsibilities
The Board of Directors and all shareholders of the Company hereby guarantee that no false or misleading statement or major omission was made to the materials in this report and that they will assume all the responsibilities, individually and jointly, for the authenticity, accuracy and completeness of the report. Establishing a sound internal control system and implementing effective internal control are the responsibilities of the Board of Directors. The Board of Supervisors shall supervise internal control implementation of the Board of Directors. The management shall organize and lead internal control in daily work.
The internal control objectives of the Company are: to guarantee business compliance with laws and regulations, protect assets safety, ensure the authenticity and integrity of financial statements and relevant information, improve operation efficiency and effect, and promote implementation of development strategies. Due to its inherent limits, internal control can provide proper guarantee only for the objectives above.
III. Basis for Establishing an Internal Control System for Financial Statements
On the basis of daily and special supervision of internal control, the Company aims to assess the effectiveness of design and operation of the internal control system by the end of 31.12.14, in accordance with The Basic Standard for Enterprise Internal Control and The Guidelines for Enterprise Internal Control Assessment formulated by the Ministry of Finance together with relevant government authorities, and Internal Control Application Manual for Internal Control System Building of Shenzhen SEG Co., Ltd. and Internal Control Assessment Manual for Internal Control System Building of Shenzhen SEG Co., Ltd.
IV. Internal Control Assessment Report
|||
|-|-|
|Information about the major defects discovered in the reporting period in the internal control assessment report||
|No major defect in internal control was discovered in the reporting period.||
|Disclosure date of the internal||
||March 28, 2015|
|control evaluation report||
|Index of the internal control||
||http://www.cninfo.com.cn|
|evaluation report||

V. Internal Control Audit Report
|||
|-|-|
|Opinion paragraph in the internal control audit report||
|The Beijing Da Hua Certified Public Accountants Co., Ltd considers that: On December 31, 2014, Shenzhen SEG||
|Co., Ltd has implemented effective internal control for the financial reports in all major aspects according to the||
|Basic Standard for Enterprise Internal Control and relevant provisions.||
|Disclosure date of the internal||
||March 28, 2015|
|control audit report||
|Disclosure index of the internal||
||http://www.cninfo.com.cn|
|control audit report||

Note: The disclosure index can include the number and name of the disclosed announcement and the website on
which the announcement has been disclosed.
Does the accounting firm provide the internal control audit report with a modified opinion?
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd.□ Yes√ No
Is the internal control audit report issued by the accounting firm consistent with the self-assessment report provided by the Board of Directors?
√ Yes□ No
VI. Establishment and Execution of the Accountability System for Major Errors in Annual Report Information Disclosure
According to the requirements of China Securities Regulatory Commission, Shenzhen Stock Exchange and other regulatory authorities, the Company has stipulated the Shenzhen SEG Co., Ltd. Accountability System for Major Errors in Disclosed Annual Report Information, which was approved by the
15th
meeting of the
4th
Board of Directors on April 20, 2010, and implements the accountability system for major errors in the disclosed periodic report information.
During the reporting period, the Company did not encounter the issues such as correction of major accounting errors, supplement of serious information omissions, and correction of performance forecast. No major errors related to the disclosure of periodic reports occurred.
Chapter 11 Financial Report
I. Audit report
|||
|-|-|
|Audit opinion type|Standard unqualified audit opinion|
|Signing date of audit report|March 26. 2015|
|Name of auditing institution|Da Hua CPA Co., Ltd. (special general partnership)|
|Name of the certified public accountant|Yang Xi and Xin Junliang|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Shenzhen SEG Co., Ltd.
Audit Report and Financial Statements
(From January 1, 2014to December 31, 2014)
CONTENTS
Ⅰ Audit Report
Ⅱ Audited Financial Statements
Consolidated Balance Sheet
Consolidated Profit Statement
Consolidated Cash Flow Statement
Consolidated Statement on Changes of Owner's Equity
Balance Sheet of the Parent Company
Profit Statement of the Parent Company
Cash Flow Statement of the Parent Company
Statement on Changes of Owners' Equity of the Parent
Company
Notes to the Financial Statements
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. I Auditor's Report
DA HUA SHEN ZI[2015] No. 3793 To: All shareholders of Shenzhen SEG Co., Ltd.,
We have audited the accompanying financial statements of Shenzhen SEG Co., Ltd. (hereinafter referred to as "SEG Company"), which comprise the Consolidated Balance Sheet and the Balance Sheet of the Parent Company as on December 31, 2014, and the Consolidated Income Statement, the Income Statement of the Parent Company, the Consolidated Statement of Cash Flows, the Statement of Cash Flows of the Parent Company, the Consolidated Statement of Changes in Owners' Equity, the Statement of Changes in Owners' Equity of the Parent Company for the year then ended, and the Notes to Financial Statements.
1. Responsibilities of the management for financial statements
The Management of SEG Company is responsible for the preparation and fair presentation of these financial statements. This responsibility includes: (1) preparing the financial statements in accordance with the provisions of Accounting Standards for Business Enterprises to achieve a fair presentation; (2) designing, implementing and maintaining internal control that is necessary to ensure that the financial statements are free from material misstatements, whether due to fraud or error.. 2. Auditor's responsibility
Our responsibility is to express an opinion on these financial statements based on out audit. We conducted our audit in accordance with Auditing Standards for Certified Public Accountants in China. Those standards require that we comply with professional and ethical requirements of Chinese certified public accountants, and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The selection of the auditing procedure depends on the judgment of the CPA, including the estimation of the risks on material misstatements in the financial statements resulted from fraud and malpractice or mistakes and errors. We took into account the internal control related to the
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. preparation and fair presentation of the financial statements so as to design an appropriate auditing procedure. The audit also comprises assessing the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.
We believe that we have obtained sufficient and appropriate auditing evidences to provide a reasonable basis for the issuance of auditing opinions.
3. Auditor's opinion
We believe that the Financial Statements of SEG Company have been prepared in accordance with the provisions of the Accounting Standard for Business Enterprises in all major aspects, which fairly reflect the consolidated and the parent company's financial position as on December 31, 2014, and the consolidated and the parent company's operating results and cash flows for the year then ended.
Da Hua CPA Co., Ltd. (special general
Chinese Certified Public Accountant partnership)
Beijing, China Chinese Certified Public Accountant March 26, 2015
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. II. Financial Statements
1. Consolidated balance sheet Dec. 31, 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
|||||
|-|-|-|-|
|Assets|See Note 6|Closing Balance|Opening Balance|
|Current assets:||||
|Monetary capital|Note 1|383,056,680.70|3 36,593,493.81|
|Financial assets measured at fair value and with changes included intocurrent profit and loss||||
|Derivative financial assets||||
|Loans to banks and other financial institutions|Note 2|3 0,000,000.00||
|Notes receivable|Note 3|8 4,618.08||
|Account receivable|Note 4|185,866,040.16|2 04,086,309.32|
|Advance payment|Note 5|9 4,633,317.07|74,002,910.35|
|Interest receivable||-||
|Dividends receivable||||
|Other receivables|Note 6|9 5,366,156.27|25,033,354.72|
|Stock|Note 7|278,281,586.72|98,000,921.50|
|Assets on hand for sale||||
|Non-current assets maturing within a year||||
|Other current assets|Note 8|443,543,013.49|4 19,925,176.02|
|Subtotal of current assets||1,510,831,412.49|1,157,642,165.72|
|Non-current assets:||||
|Loan and cash advance|Note 9|452,517,072.06|2 43,871,438.72|
|Financial assets available for sale|Note 10|3 4,350,035.45|34,357,924.24|
|Held-to-maturity investments||||
|Long-term receivables||||
|Long-term equity investment|Note 11|8 2,100,197.01|1 12,102,810.03|
|Investment property|Note 12|462,562,882.78|4 81,517,481.83|
|Fixed assets|Note 13|4 1,408,298.43|41,876,654.83|
|Projects under construction||||
|Project material||||
|Disposal of fixed assets||||
|Productive biological assets||||
|Oil and gas assets||||
|Intangible assets|Note 14|655,587.54|8 86,901.46|
|Development expenses||||
|Goodwill|Note 15|1 0,328,927.82|10,328,927.82|
|Long-term unamortized expenses|Note 16|4 9,768,678.00|44,178,804.04|
|Deferred income tax assets|Note 17|1 0,539,563.16|8,177,489.16|
|Other non-current assets|Note 18|4,655,063.54||
|Subtotal of non-current assets||1,148,886,305.79|9 77,298,432.13|
|Total assets||2,659,717,718.28|2,134,940,597.85|
|||person of the accounting instit||

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Consolidated balancesheet（continued）Dec. 31, 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
|||||
|-|-|-|-|
|Liabilities and shareholders' equity|See Note 6|Closing Balance|Opening Balance|
|Current liabilities||||
|Short-term loans|Note 19|189,246,687.38|70,000,000.00|
|Financial liabilities measured at fair value and with changes includedinto current profit and loss||||
|Derivative financial liabilities||||
|Notes payable||||
|Account payable|Note 20|200,129,651.92|1 81,751,142.48|
|Account collected in advance|Note 21|183,059,311.31|2 08,684,489.90|
|Employee compensation payable|Note 22|1 8,858,843.33|17,065,382.28|
|Taxes and levies payable|Note 23|39,445,696.47|37,164,892.21|
|Interests payable|Note 24|1 0,295,250.65||
|Dividends payable|Note 25|1,717,882.74|1,317,296.42|
|Other payables|Note 26|244,804,403.06|1 64,189,818.81|
|Liabilities on hand for sale||||
|Non-current liabilities maturing within a year||||
|Other current liabilities|Note 27|250,000,000.00||
|Subtotal of current liabilities||1,137,557,726.86|6 80,173,022.10|
|Non-current liabilities||||
|Long-term loans||||
|Bonds payable||||
|Including: preferred stock||||
|Perpetual capital securities||||
|Long-term payables||||
|Long-term employee compensations payable||||
|Special accounts payable||||
|Anticipated liabilities||||
|Deferred income|Note 28|9,705,371.01|7 62,246.19|
|Deferred income tax liabilities|Note 17|1 7,085,543.80|18,196,441.90|
|Other non-current liabilities||||
|Subtotal of non-current liabilities||2 6,790,914.81|18,958,688.09|
|Total liabilities||1,164,348,641.67|6 99,131,710.19|
|Shareholders' equity||||
|Equity capital|Note 29|784,799,010.00|7 84,799,010.00|
|Other equity instruments||||
|Including: preferred stocks||||
|Perpetual capital securities||||
|Capital reserve|Note 30|404,727,257.72|404,357,267.73|
|Minus: treasury stock||||
|Other comprehensive income|Note 31|231,817.05|235,756.32|
|Special reserves||||
|Surplus reserves|Note 32|102,912,835.67|1 02,912,835.67|
|Undistributed profits|Note 33|6,299,799.41|-42,080,494.64|
|Subtotal of shareholders' equity attributable to shareholders of theparent company||1,298,970,719.85|1,250,224,375.08|
|Minority shareholders' equity||196,398,356.76|1 85,584,512.58|
|Subtotal of shareholders' equity||1,495,369,076.61|1,435,808,887.66|
|Total of liabilities and shareholders' equity||2,659,717,718.28|2,134,940,597.85|

Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 2. Consolidated profit statement The Year 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|See Note 6|Current period|Previous period|
|I. Total operation income||752,414,741.06|640,435,067.17|
|Including: operation income|Note 34|681,343,920.99|597,358,257.82|
|Interest income||6 1,496,910.07|40,429,967.84|
|Fee and commission income||9,573,910.00|2 ,646,841.51|
|II. Total operation costs||649,917,541.74|550,540,401.81|
|Including: operation cost|Note 34|560,944,457.78|486,411,185.75|
|Interest cost||3,344,972.23|1 ,714,995.54|
|Business tax and surcharges|Note 35|2 6,612,635.13|23,667,538.69|
|Sales expense||2,149,313.48|3 ,630,236.75|
|Management expense||4 5,406,128.22|46,740,709.39|
|Financial expense|Note 36|9,168,643.60|- 10,488,089.69|
|Assets impairment loss|Note 37|2,291,391.30|-1,136,174.62|
|Plus: revenue change measured at fair value||||
|Returns on investments|Note 38|7,204,943.01|13,077,808.59|
|Including: returns from investments in associated and jointventures||-24,010,440.06|-3,857,446.81|
|III. Operation profits||109,702,142.33|102,972,473.95|
|Plus: non-operating income|Note 39|3,135,256.00|2 ,526,306.70|
|Including: gains from non-current assets disposal||2 1,274.83|44,307.25|
|Minus: non-operating expenses|Note 40|1,075,753.92|246,074.21|
|Including: losses from non-current assets disposal||1 4,799.49|94,416.29|
|IV. Total profits||111,761,644.41|105,252,706.44|
|Minus: income tax expense|Note 41|3 3,087,414.03|32,453,760.89|
|V. Net profits||7 8,674,230.38|72,798,945.55|
|Net profit attributable to owners of the parent company||4 8,380,294.05|54,338,735.35|
|Minority interest income||3 0,293,936.33|18,460,210.20|
|VI. Post-tax net value of other comprehensive income||-5,916.59|- 66,903.01|
|Post-tax net value of other comprehensive income attributable toowners of the parent company||-3,939.27|- 44,544.02|
|(I) Other comprehensive income that can't be reclassified intoprofit and loss||-|-|
|1. Change of net liabilities or net assets after recalculatingdefined benefit plan.||||
|2. Shares of other comprehensive incomes that cannot bereclassified into profit and loss and are attributable to theinvestment enterprise according to equity method.||||
|(II) Other comprehensive income that can be reclassified intoprofit and loss||-3,939.27|- 44,544.02|
|1. Shares of other comprehensive income that will be reclassifiedinto profit and loss and are attributable to the investmententerprise according to equity method||||
|2. Change of financial assets available for sale measured at fairvalue||-3,939.27|- 44,544.02|
|3. Held-to-maturity investment reclassified as available for salefinancial assets||||
|4. Valid part of cash flow hedging gains and losses||||
|5. Foreign currency conversion difference in financial statement||||
|6. Investment returns from package disposal of subsidiary's equityinvestment before losing control right||||
|Post-tax net value of other comprehensive income attributable tominority shareholders||-1,977.32|- 22,358.99|
|VII. Total comprehensive income||7 8,668,313.79|72,732,042.54|
|Total comprehensive income attributable to owners of the parentcompany||4 8,376,354.78|54,551,428.83|
|Total comprehensive income attributable to minority shareholders||3 0,291,959.01|18,180,613.71|
|VIII. Earnings per share||||
|(I) Basic earning per share||0.06|0 .07|
|(II) Diluted earning per share||0.06|0 .07|

Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 3. Consolidated cash flow statement The Year 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|See Note 6|Current period|Previous period|
|I. Cash flow generated by operation activities||||
|Cash generated by goods sales and service delivery||1,939,331,584.78|935,318,635.23|
|Cash in the forms of interest, fee and commission||72,018,080.07|41,726,001.54|
|Refunds of taxes and levies||89,775,871.83||
|Other cash related to operation activities|Note 42|3 38,008,186.19|386,684,123.32|
|Subtotal of cash inflow from operation activities||2 ,439,133,722.87|1 ,363,728,760.09|
|Cash paid for goods and service delivered||1 ,992,374,811.35|790,633,172.09|
|Net decrease by lending to other financial institutions||30,000,000.00||
|Net increase of clients' loans and advance payments||2 10,971,045.00|109,688,255.66|
|Cash paid for interests, fees and commissions||3,287,222.24|1 ,714,995.54|
|Cash paid to and for the employees||95,611,490.67|79,999,122.52|
|Various taxes and levies paid||1 41,705,938.09|122,678,895.52|
|Other cash paid for operation activities|Note 42|3 93,116,836.46|381,544,865.46|
|Subtotal of cash outflow from operation activities||2,867,067,343.81|1 ,486,259,306.79|
|Net cash flow generated by operation activities||-427,933,620.94|-122,530,546.70|
|II. Cash flow generated by investment activities||||
|Cash received by recouping the capital outlay||3,950,900,000.00|2 ,236,986,402.78|
|Cash received from returns on investments||37,207,556.03|18,559,032.46|
|Net cash received from the disposal of fixed assets, intangibleassets and other long term assets;||25,300.00|44,707.25|
|Net cash received from the disposal of subsidiaries and other||-|-|
|Other cash received relating to investment activities|Note 42|9,500,000.00|-|
|Cash inflow from investment activities||3,932,632,856.03|2 ,255,590,142.49|
|Cash paid for the purchase and construction of fixed assets,intangible assets and other long term assets||26,270,729.51|17,651,151.32|
|Cash payment for investments||3,888,579,000.00|2 ,295,786,000.00|
|Net cash paid for the acquisition of subsidiaries and other||||
|Other cash payments relating to investment activities.|||2 ,044,318.82|
|Cash outflow for investment activities||3,849,849,729.51|2 ,315,481,470.14|
|Net cash flow generated by investment activities||82,783,126.52|- 59,891,327.65|
|III. Cash flow from financing activities||||
|Cash received by attracting investments||-|-|
|Including: cash received by affiliated companies from absorbingminority shareholders' investments||-|-|
|Cash received by obtaining loan||3 55,400,000.00|135,000,000.00|
|Cash received by issuing bonds||2 50,000,000.00||
|Cash received relating to other financing activities.|Note 42|72,952,371.12|25,000,000.00|
|Subtotal of cash inflow from financing activities||6 78,352,371.12|160,000,000.00|
|Cash paid for repayment of debts||2 36,153,312.62|65,000,000.00|
|Cash paid for distribution of dividends or profits, or cash||29,547,818.85|9 ,026,919.76|
|Including: dividends and profits paid by the affiliated companiesto minority shareholders||19,156,907.18|9 ,026,919.76|
|Cash payments relating to other financing activities|Note 42|21,037,568.50|21,089,863.01|
|Subtotal of cash outflow for financing activities||2 86,738,699.97|95,116,782.77|
|Net cash flow generated by financing activities||3 91,613,671.15|64,883,217.23|
|IV. Influence of exchange rate change on cash and cash||10.16|-316.25|
|equivalentsV. Net increase of cash and cash equivalents||46,463,186.89|-117,538,973.37|
|Plus: year beginning balance of cash and cash equivalents||3 35,593,493.81|453,132,467.18|
|VI. Closing balance of cash and cash equivalents||3 82,056,680.70|335,593,493.81|

Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 4. Consolidated statement of changes in owners' equity The Year 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Item|SeeNote 6|Amount of current period||||||||||
|||Shareholders' equity attributable to shareholders of the parent company||||||||||
|||Capital stock|Other equityinstruments|Capital reserve|Minus: treasurystock|Other comprehensiveincome|Specialreserves|Surplus reserve|Undistributed profits|Minorityshareholders' equity|Total shareholders'equity|
|I. Closing balance of previous year||784,799,010.00||404,357,267.73||235,756.32||102,912,835.67|-42,080,494.64|185,584,512.58|1,435,808,887.66|
|Plus: changes in accounting policies||||||||||||
|Preliminary errors correction||||||||||||
|Enterprise merger under same parent company||||||||||||
|Other||||||||||||
|II. Current year opening value||784,799,010.00||404,357,267.73||235,756.32||102,912,835.67|-42,080,494.64|185,584,512.58|1,435,808,887.66|
|III. Current year increase/decrease change||||369,989.99||-3,939.27|||48,380,294.05|10,813,844.18|59,560,188.95|
|(I) Total comprehensive income||||||-3,939.27|||48,380,294.05|30,291,959.01|78,668,313.79|
|(II) Shareholders' investments and capital reduction||||67,618.87||||||79,378.67|146,997.54|
|1. Common stocks of shareholders||||||||||||
|2. Capital investments of other equity instrument holders||||||||||||
|3. Amount of stock payment included into shareholderequity||||||||||||
|4. Other||||67,618.87||||||79,378.67|146,997.54|
|(III) Profit distribution||||||||||-19,557,493.50|-19,557,493.50|
|1. Withdrawal of surplus reserve||||||||||||
|2. Distribution for the shareholders||||||||||-19,557,493.50|-19,557,493.50|
|3. Other||||||||||||
|(IV) Shareholder equity internal carrying forward||||||||||||
|1. Capital reserve converted into stock capital increase||||||||||||
|2. Surplus reserve converted into stock capital increase||||||||||||
|3. Surplus reserve to offset losses||||||||||||
|4.Change of carrying forward and re-calculating netliabilities or net assets in defined benefit plan||||||||||||
|5. Other||||||||||||
|(V) Special reserves||||||||||||
|1. Withdrawal in current period||||||||||||
|2. Use in current period||||||||||||
|(VI) Others||||302,371.12|||||||302,371.12|
|IV. Closing balance of current year||784,799,010.00||404,727,257.72||231,817.05||102,912,835.67|6,299,799.41|196,398,356.76|1,495,369,076.61|

 Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Consolidated statement of changes in owners' equity (continued) The Year 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Item|Amount of previous period||||||||||
||Shareholders' equity attributable to the parent company||||||||||
||Capital stock|Other equityinstruments|Capital reserve|Minus:treasury stock|Other comprehensiveincome|Specialreserves|Surplus reserve|Undistributedprofits|Minorityshareholders' equity|Total shareholders'equity|
|I. Closing balance of previous year|784,799,010.00||404,100,030.23||280,300.34||102,912,835.67|-96,419,229.99|176,705,783.81|1,372,378,730.06|
|Plus: changes in accounting policies|||||||||||
|Preliminary errors correction|||||||||||
|Enterprise merger under same parent company|||||||||||
|Other|||||||||||
|II. Current year opening value|784,799,010.00||404,100,030.23||280,300.34||102,912,835.67|-96,419,229.99|176,705,783.81|1,372,378,730.06|
|III. Current year increase/decrease change|||257,237.50||-44,544.02|||54,338,735.35|8,878,728.77|63,430,157.60|
|(I) Total comprehensive income|||||-44,544.02|||54,338,735.35|18,437,851.21|72,732,042.54|
|(II) Shareholders' investments and capital reduction|||257,237.50||||||-489,722.44|-232,484.94|
|1. Common stocks of shareholders|||||||||||
|2. Capital investments of other equity instrument|||||||||||
|3. Amount of stock payment included intoshareholder equity|||||||||||
|4. Other|||257,237.50||||||-489,722.44|-232,484.94|
|(III) Profit distribution|||||||||-9,069,400.00|-9,069,400.00|
|1. Withdrawal of surplus reserve|||||||||||
|2. Distribution for the shareholders|||||||||-9,069,400.00|-9,069,400.00|
|3. Other|||||||||||
|(IV) Shareholder equity internal carrying forward|||||||||||
|1. Capital reserve converted into stock capital|||||||||||
|2. Surplus reserve converted into stock capital|||||||||||
|3. Surplus reserve to offset losses|||||||||||
|4.Change of carrying forward and re-calculating netliabilities or net assets in defined benefit plan|||||||||||
|5. Other|||||||||||
|(V) Special reserves|||||||||||
|1. Withdrawal in current period|||||||||||
|2. Use in current period|||||||||||
|(VI) Others|||||||||||
|IV. Closing balance of current year|784,799,010.00||404,357,267.73||235,756.32||102,912,835.67|-42,080,494.64|185,584,512.58|1,435,808,887.66|

 Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 5. Balance Sheet of the Parent Company Dec. 31, 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
|||||
|-|-|-|-|
|Assets|See Note 14|Closing Balance|Opening Balance|
|Current assets:||||
|Monetary capital||204,395,253.65|173,141,378.64|
|Financial assets measured at fair value and withchanges included into current profit and loss||||
|Derivative financial assets||||
|Notes receivable||||
|Account receivable|Note 1|||
|Advance payment||-|142,310.00|
|Interest receivable||897,225.78||
|Dividends receivable||||
|Other receivables|Note 2|410,453,048.03|200,493,973.07|
|Stock||786,589.00||
|Assets on hand for sale||||
|Non-current assets maturing within a year||||
|Other current assets||463,590,246.68|301,248,167.86|
|Subtotal of current assets||1 ,080,122,363.14|675,025,829.57|
|Non-current assets:||||
|Financial assets available for sale||33,515,392.83|3 3,515,392.83|
|Held-to-maturity investments||||
|Long-term receivables||||
|Long-term equity investment|Note 3|382,083,723.25|374,086,336.27|
|Investment property||294,918,970.98|305,731,220.77|
|Fixed assets||19,583,422.45|1 9,959,818.75|
|Projects under construction||||
|Project material||||
|Disposal of fixed assets||||
|Productive biological assets||||
|Oil and gas assets||||
|Intangible assets||271,067.06|401,813.18|
|Development expenses||||
|Goodwill||||
|Long-term unamortized expenses||4 ,589,158.00|4,025,337.44|
|Deferred income tax assets||8 ,354,062.87|5,992,016.37|
|Other non-current assets||1 ,313,063.54||
|Subtotal of non-current assets||744,628,860.98|743,711,935.61|
|Total assets||1 ,824,751,224.12|1,418,737,765.18|

Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Balance Sheet of the Parent Company(continued) Dec. 31, 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
|||||
|-|-|-|-|
|Liabilities and shareholders' equity|See Note 14|Closing Balance|Opening Balance|
|Current liabilities||||
|Short-term loans||100,000,000.00||
|Financial liabilities measured at fair value and withchanges included into current profit and loss||||
|Derivative financial liabilities||||
|Notes payable||||
|Account payable||1 ,500.00|375,000.00|
|Account collected in advance||65,628,441.87|7 6,806,434.67|
|Employee compensation payable||9 ,907,467.00|7,727,646.55|
|Taxes and levies payable||20,697,003.64|24,258,147.48|
|Interests payable||10,237,500.66||
|Dividends payable||119,803.29|119,803.29|
|Other payables||87,202,387.17|7 1,183,956.83|
|Liabilities on hand for sale||||
|Non-current liabilities maturing within a year||||
|Other current liabilities||250,000,000.00||
|Subtotal of current liabilities||543,794,103.63|180,470,988.82|
|Non-current liabilities||||
|Long-term loans||||
|Bonds payable||||
|Including: preferred stock||||
|Perpetual capital securities||||
|Long-term payables||||
|Long-term employee compensations payable||||
|Special accounts payable||||
|Anticipated liabilities||||
|Deferred income||9 ,500,000.00||
|Deferred income tax liabilities||||
|Other non-current liabilities||||
|Subtotal of non-current liabilities||9 ,500,000.00|-|
|Total liabilities||553,294,103.63|180,470,988.82|
|Shareholders' equity||||
|Equity capital||784,799,010.00|784,799,010.00|
|Other equity instruments||||
|Including: preferred stocks||||
|Perpetual capital securities||||
|Capital reserve||405,955,264.44|405,652,893.32|
|Minus: treasury stock||||
|Other comprehensive income||82,084,912.79|8 2,084,912.79|
|Special reserves||||
|Surplus reserves||102,912,835.67|102,912,835.67|
|Undistributed profits||- 22,209,989.62|-55,097,962.63|
|Subtotal of shareholders' equity||1 ,271,457,120.49|1,238,266,776.36|
|Total of liabilities and shareholders' equity||1 ,824,751,224.12|1,418,737,765.18|

Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 6. Profit Statement of the Parent Company The Year 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|See Note 14|Current period|Previous Period|
|I. Total operation income|Note 4|125,724,062.61|125,223,812.70|
|Minus: operation cost|Note 4|76,758,875.18|75,283,936.52|
|Business tax and surcharges||7 ,389,606.24|6,996,763.83|
|Sales expense||||
|Management expense||22,468,321.28|19,946,625.28|
|Financial expense||7 ,413,635.27|-16,856,983.54|
|Assets impairment loss||-51,814.00|297,476.00|
|Plus: revenue change measured at fair value||||
|Returns on investments|Note 5|31,358,353.59|25,580,047.21|
|Including: returns from investments in associated and jointventures||- 24,010,440.06|- 3,857,446.81|
|II. Operation profits||43,103,792.23|65,136,041.82|
|Plus: non-operating income||721,464.41|275,392.00|
|Including: gains from non-current assets disposal||1 ,975.00||
|Minus: non-operating expenses||132,950.00|32,822.95|
|Including: loss from disposal of non-current assets||1 ,270.00|12,822.95|
|III. Total profits||43,692,306.64|65,378,610.87|
|Minus: income tax expense||10,804,333.63|14,363,531.71|
|IV. Net profit||32,887,973.01|51,015,079.16|
|V. Post-tax net value of other comprehensive income||-|-|
|(I) Other comprehensive income that can't be reclassifiedinto profit and loss||-|-|
|1. Change of net liabilities or net assets after recalculatingdefined benefit plan.||||
|2. Shares of other comprehensive incomes that cannot bereclassified into profit and loss and are attributable to theinvestment enterprise according to equity method.||||
|……||||
|(II) Other comprehensive income that can be reclassifiedinto profit and loss||-|-|
|1. Shares of other comprehensive income that will bereclassified into profit and loss and are attributable to theinvestment enterprise according to equity method||||
|2. Change of financial assets available for sale measuredat fair value||||
|3. Held-to-maturity investment reclassified as availablefor sale financial assets||||
|4. Valid part of cash flow hedging gains and losses||||
|5. Foreign currency conversion difference in financialstatement||||
|6. Investment returns from package disposal ofsubsidiary's equity investment before losing control right||||
|……||||
|VI. Total comprehensive income||32,887,973.01|51,015,079.16|
|VII. Earnings per share||||
|(I) Basic earning per share||||
|(II) Diluted earning per share||||

Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 7. Cash Flow Statement of the Parent Company The Year 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|See Note 14|Current period|Previous period|
|I. Cash flow generated by operation activities||||
|Cash generated by goods sales and service delivery||114,802,727.21|123,434,262.28|
|Refunds of taxes and levies||||
|Other cash related to operation activities||395,074,870.68|277,120,095.33|
|Subtotal of cash inflow from operation activities||509,877,597.89|400,554,357.61|
|Cash paid for goods and service delivered||34,329,122.58|34,813,265.05|
|Cash paid to and for the employees||37,875,519.23|32,813,599.53|
|Various taxes and levies paid||98,652,745.40|86,501,019.37|
|Other cash paid for operation activities||515,490,539.56|336,845,568.35|
|Subtotal of cash outflow from operation activities||686,347,926.77|490,973,452.30|
|Net cash flow generated by operation activities||-176,470,328.88|-90,419,094.69|
|II. Cash flow generated by investment activities||||
|Cash received by recouping the capital outlay||3 ,581,000,000.00|1,760,166,000.00|
|Cash received from returns on investments||60,463,740.83|30,237,260.02|
|Net cash received from the disposal of fixed assets, intangibleassets and other long term assets;||5 ,420.00|400.00|
|Net cash received from the disposal of subsidiaries and otherbusiness entities||||
|Other cash received relating to investment activities||9 ,500,000.00||
|Cash inflow from investment activities||3 ,650,969,160.83|1,790,403,660.02|
|Cash paid for the purchase and construction of fixed assets,intangible assets and other long term assets||3 ,672,148.03|2,648,110.10|
|Cash payment for investments||3 ,782,000,000.00|1,820,686,000.00|
|Net cash paid for the acquisition of subsidiaries and otherbusiness entities||||
|Other cash payments relating to investment activities.||||
|Cash outflow for investment activities||3 ,785,672,148.03|1,823,334,110.10|
|Net cash flow generated by investment activities||-134,702,987.20|-32,930,450.08|
|III. Cash flow from financing activities||||
|Cash received by attracting investments||-|-|
|Cash received by obtaining loan||180,000,000.00||
|Cash received by issuing bonds||250,000,000.00||
|Cash received relating to other financing activities.||302,371.12||
|Subtotal of cash inflow from financing activities||430,302,371.12|-|
|Cash paid for repayment of debts||80,000,000.00||
|Cash paid for distribution of dividends or profits, or cashpayments for interests||7 ,132,693.34||
|Cash payments relating to other financing activities||742,500.00||
|Subtotal of cash outflow for financing activities||87,875,193.34|-|
|Net cash flow generated by financing activities||342,427,177.78||
|IV. Influence of exchange rate change on cash and cashequivalents||13.31|-318.01|
|V. Net increase of cash and cash equivalents||31,253,875.01|-123,349,862.78|
|Plus: year beginning balance of cash and cash equivalents||173,141,378.64|296,491,241.42|
|VI. Closing balance of cash and cash equivalents||204,395,253.65|173,141,378.64|

 Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. 8.Statement on Changes of Owners' Equity of the Parent Company The Year 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Item|See Note14|Amount of current period|||||||||
|||Capital stock|Other equityinstruments|Capital reserve|Minus: treasurystock|Other comprehensiveincome|Specialreserves|Surplus reserve|Undistributed profits|Minority shareholders'equity|
|I. Closing balance of previous year||784,799,010.00||405,652,893.32||||102,912,835.67|-55,097,962.63|1,238,266,776.36|
|Plus: changes in accounting policies|||||||||||
|Preliminary errors correction|||||||||||
|Other|||||||||||
|II. Current year opening value||784,799,010.00||405,652,893.32||||102,912,835.67|-55,097,962.63|1,238,266,776.36|
|III. Current year increase/decrease change||||302,371.12|||||32,887,973.01|33,190,344.13|
|(I) Total comprehensive income|||||||||32,887,973.01|32,887,973.01|
|(II) Shareholders' investments and capitalreduction|||||||||||
|1. Common stocks of shareholders|||||||||||
|2. Capital investments of other equity instrumentholders|||||||||||
|3. Amount of stock payment included intoshareholder equity|||||||||||
|Other|||||||||||
|(III) Profit distribution|||||||||||
|1. Withdrawal of surplus reserve|||||||||||
|2. Distribution for the shareholders|||||||||||
|3. Other|||||||||||
|(IV) Shareholder equity internal carrying forward|||||||||||
|1. Capital reserve converted into stock capitalincrease|||||||||||
|2. Surplus reserve converted into stock capitalincrease|||||||||||
|3. Surplus reserve to offset losses|||||||||||
|4.Change of carrying forward and re-calculatingnet liabilities or net assets in defined benefit plan|||||||||||
|5. Other|||||||||||
|(V) Special reserves|||||||||||
|1. Withdrawal in current period|||||||||||
|2. Use in current period|||||||||||
|(VI) Others||||302,371.12||||||302,371.12|
|IV. Closing balance of current year||784,799,010.00||405,955,264.44||||102,912,835.67|-22,209,989.62|1,271,457,120.49|

 Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
Full text of 2014 Annual Report of Shenzhen SEG Co., Ltd. Statement on Changes of Owners' Equity of the Parent Company(continued) The Year 2014 Prepared by: Shenzhen SEG Co., Ltd. Unit: RMB Yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Item|Amount of previous period|||||||||
||Capital stock|Other equityinstruments|Capital reserve|Minus: treasurystock|Other comprehensiveincome|Special reserves|Surplus reserve|Undistributed profits|Total shareholders'equity|
|I. Closing balance of previous year|784,799,010.00||405,652,893.32||||102,912,835.67|-106,113,041.79|1,187,251,697.20|
|Plus: changes in accounting policies||||||||||
|Preliminary errors correction||||||||||
|Other||||||||||
|II. Current year opening value|784,799,010.00||405,652,893.32||||102,912,835.67|-106,113,041.79|1,187,251,697.20|
|III. Current year increase/decrease change||||||||51,015,079.16|51,015,079.16|
|(I) Total comprehensive income||||||||51,015,079.16|51,015,079.16|
|(II) Shareholders' investments and capitalreduction||||||||||
|1. Common stocks of shareholders||||||||||
|2. Capital investments of other equity instrumentholders||||||||||
|3. Amount of stock payment included intoshareholder equity||||||||||
|Other||||||||||
|(III) Profit distribution||||||||||
|1. Withdrawal of surplus reserve||||||||||
|2. Distribution for the shareholders||||||||||
|3. Other||||||||||
|(IV) Shareholder equity internal carrying forward||||||||||
|1. Capital reserve converted into stock capitalincrease||||||||||
|2. Surplus reserve converted into stock capitalincrease||||||||||
|3. Surplus reserve to offset losses||||||||||
|4.Change of carrying forward and re-calculatingnet liabilities or net assets in defined benefit plan||||||||||
|5. Other||||||||||
|(V) Special reserves||||||||||
|1. Withdrawal in current period||||||||||
|2. Use in current period||||||||||
|(VI) Others||||||||||
|IV. Closing balance of current year|784,799,010.00||405,652,893.32||||102,912,835.67|-55,097,962.63|1,238,266,776.36|

 Legal representative: Wang Li Person in charge of accounting: Liu Zhijun Responsible person of the accounting institution: Ying Huadong
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
III
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Notes to the Financial Statements 2014
I. Company profile
(1) Registered domicile, organization structure and headquarters address of the Company
Shenzhen SEG Co., Ltd. (hereinafter referred to as "Company" or "the Company") was incorporated on July 16, 1996 through public offering with Shenzhen SEG Group Co., Ltd. as the sole initiator upon the approval of relevant authorities of Shenzhen Municipality and the State in accordance with relevant provisions of the Company Law of the People's Republic of China. The Company received a Business License for Enterprise Legal Person (SHEN SI ZI No. N16886) with a registration number (440301103573251). Upon the approval of the securities administration departments of Shenzhen Municipality and the State, the Company's B shares and A shares started to be listed and traded on Shenzhen Stock Exchange respectively in July and December, 1996. On June 7, 2006, a resolution was adopted at the general meeting of shareholders on the share structure reform of the Company. According to the plan on the conversion of capital reserve into capital shares, the Company distributed such converted and increased capital shares to the tradable A share shareholders. Such shareholders obtained 4.6445 shares of converted and increased capital shares for each 10 shares, which totaled 40,233,322 shares of converted and increased capital shares. As a result, relevant non-tradable A shares were authorized to be listed and circulated. Among the converted and increased capital shares obtained by the tradable A share shareholders, 6,997,054 shares were received due to the company's share capital expansion and the rest of 33,236,268 shares were the consideration paid to the tradable A share shareholders by non-tradable A share shareholders under fixed arrangements.
Up to December 31, 2014, the total capital shares of the company amounted to 784,799,010 shares, including 26,689 restricted shares and 784,772,321 unrestricted shares. The registered capital of the Company is RMB 784,799,010, and its registered domicile is 31/F, Tower A, Qunxing Plaza, North Huaqiang Road, Futian District, Shenzhen. The parent company of the Company is Shenzhen SEG Group Co., Ltd. and the final controller of the group is Shenzhen Municipal People's Government State-owned Assets Supervision and Administration Commission.
(2) Business scope
Business Scope: Domestic commerce, goods supply and sale (excluding commodities under special operation, control and sale), engaging in other industries as may be applied for with specific projects, economic information consultancy, property lease, real estate agency, and operation of SEG special electronics markets (the license for the special markets shall be specially applied for).
(3) Company business type and main operation activities
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
The company belongs to the commercial service industry. It major products or services include the operation and management of the special electronics markets, lease business and other services in the tertiary industry.
(4) Approval and disclosure of the financial statements
The Financial Statements were approved for disclosure by all directors of the Company on March 26, 2015. II. Scope of the consolidated financial statements
There are 20 entities covered in the scope of the consolidated financial statements, including:
Type of Shareholding Voting right Subsidiary name Level
subsidiary proportion(%) proportion(%) Shenzhen SEG Baohua Enterprise Development Co., Share-controlled
Ⅰ 66.58 66.58 Ltd. subsidiary
Shenzhen Mellow Orange Business Hotel Share-controlled
Ⅱ -- 66.58 Management Co., Ltd. subsidiary
Wholly-owned
Shenzhen SEG Industrial Investment Co., Ltd. Ⅰ 100.00 100.00 subsidiary
Shareholding
Changsha SEG Development Co., Ltd. Ⅰ 46.00 51.00 company
Shenzhen SEG Electronics Market Management Co., Share-controlled
Ⅰ 70.00 70.00 Ltd. subsidiary
Suzhou SEG Electronics Market Management Co., Share-controlled
Ⅰ 45.00 45.00 Ltd. subsidiary
Share-controlled
Xi'an SEG Electronics Market Co., Ltd. Ⅰ 65.00 65.00 subsidiary
Share-controlled
Shenzhen SEG Credit Co., Ltd. Ⅰ 53.02 53.02 subsidiary
Share-controlled
Shenzhen SEG E-Commerce Co., Ltd. Ⅰ 51.00 51.00 subsidiary
Shenzhen SEG Nanjing Electronics Market Wholly-owned
Ⅰ 100.00 100.00 Management Co., Ltd. subsidiary
Share-controlled
Xi'an Hairong SEG Electronics Market Co., Ltd. Ⅰ 51.00 51.00 subsidiary
Wujiang SEG Electronics Market Management Co., Share-controlled
Ⅰ 51.00 51.00 Ltd. subsidiary
Share-controlled
Wuxi SEG Electronics Market Co., Ltd Ⅰ 51.00 51.00 subsidiary
Shunde SEG Electronics Market Management Co., Wholly-owned
Ⅰ 100.00 100.00 Ltd subsidiary
Nanning SEG Electronics Market Management Co., Wholly-owned
Ⅰ 100.00 100.00 Ltd. subsidiary
Wholly-owned
Nantong SEG Times Square Development Co., Ltd. Ⅰ 100.00 100.00 subsidiary
Share-controlled
Yantai SEG Times Square Development Co., Ltd. Ⅰ 90.00 90.00 subsidiary
Nantong SEG Commercial Operation Management Wholly-owned
Ⅰ 100.00 100.00 Co., Ltd. subsidiary
Wholly-owned
Suzhou SEG Digital Plaza Management Co., Ltd. Ⅰ 100.00 100.00
subsidiary
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Type of Shareholding Voting right Subsidiary name Level
subsidiary proportion(%) proportion(%) Xi'an Fengdong New Town SEG Times Square Wholly-owned
Ⅰ 100.00 100.00 Properties Co., Ltd. subsidiary
For some subsidiaries, the reason for the differences between shareholding proportion and voting right proportion and the basis for the Company to control the subsidiary when its voting right proportion is below50% are described in Notes to the Financial Statement– Section 8 Rights and Benefits in Other Entities– (1) Rights and Benefits in Subsidiaries.
Compared with the entities covered in the scope of the Consolidated Financial Statements in the last period, there are four newly added entities as follows:
1. Subsidiaries, special-purpose entities and operating entities whose share-controlling right is formed through trustee operation or lessee, which are included in the consolidation scope in the current period
Name Reason for change
Yantai SEG Times Square Development Co., Ltd. Newly invested and created
Nantong SEG Commercial Operation Management
Newly invested and created
Co., Ltd.
Suzhou SEG Digital Plaza Management Co., Ltd. Newly invested and created
Xi'an Fengdong New Town SEG Times Square
Newly invested and created
Properties Co., Ltd.
2. Subsidiaries, special-purpose entities and operating entities whose share-controlling right is lost through trusted operation or lease taking, which are excluded from the consolidation scope in the current period
There are no subsidiaries, special-purpose entities and operating entities whose share-controlling right is lost through trusted operation or lease taking, which are excluded from the consolidation scope in the current period. III. Basis of preparation of the financial statements
(1) Basis of preparation of the financial statements
The Company has conducted confirmation and measurement based on the continuous operation principle and the transactions and events that have actually occurred and in accordance with the Accounting Standards for Business Enterprises (ASBE) which comprises a basic standard and specific standards, the application guide of ASBE, the interpretation of ASBE, and other relevant regulations (hereinafter collectively called "the ASBE"), the No. 15 Preparation Conventions of Information Disclosure by Companies Offering Securities to the Public - General Regulations on Financial Report (amended in 2014) released by the China Securities Regulatory Commission (CSRC), and then prepared the financial statements on this basis.
(2) Continuous operation
Within 12 months after the end of the reporting period, the Company has no events or conditions that may generate major doubts about the continuous operation ability of the Company.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
IV. Important accounting policies and accounting estimates
(3) 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.
(4) Accounting period
A fiscal year lasts from January 1 to December 31 of the Gregorian calendar.
(5) Recording currency
Renminbi is the recording currency of the financial statements of the Company.
(6) Accounting methods for the enterprises merger under or not under common control
1. Gradual realization of the terms, conditions and economic influences for each transaction during the enterprises merger process is compliant with one or more of the following circumstances, and the multiple transaction events are treated in accounting as a basket of transactions:
1) These transactions are executed when or after their mutual influences are considered;
2) These transactions can only achieve a complete commercial outcome after they are integrated;
3) The occurrence of a transaction depends on the occurrence of at least one other transaction;
4) Although one transaction is independently uneconomical, it is economical when it is being considered with other transactions.
2. Enterprises merger under common control
5) Individual financial statement
If the Company pays cash, transfers non-monetary assets or bears debts, or issues equity securities as the consideration of the merger, the book value of the shares of the owners' equity obtained from the merged party on the merger date is taken as the initial investment cost of the long-term equity investment. The capital reserve is adjusted for the difference between the initial investment cost of the long-term equity investment and the merger consideration, and the retained profits are adjusted if the capital reserve is not sufficient for off-setting. If there is any contingent consideration and the estimated liabilities or assets need to be recognized, the capital reserve (capital premium or share premium) is adjusted for the difference between the amount of the estimated liabilities or assets and the amount of the contingent consideration, and the retained profits are adjusted if the capital reserve is not sufficient.
For the enterprises merger that is finally realized through multiple transactions, if such transactions belong to a basket of transactions, each transaction is treated in accounting as if the transaction is a transaction that obtains the controlling right. If such transactions do not belong to a basket of transactions, on the date of obtaining the controlled right, the capital reserve is adjusted for the difference between the initial investment cost of the long-term equity investment and the book value of the long-term equity investment before the merger plus the book value of the newly obtained share consideration on the date of the merger, and the retained profits are adjusted if the capital reserve is not sufficient for off-setting. For the equity investment held before the date of
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
merger, the accounting treatment is temporarily not conducted for other comprehensive incomes recognized through the calculation in the equity method or through the calculation in the recognition and measurement principles for financial instruments, until when disposing of the item of investment, the accounting treatment is performed on the same basis as that for the invested entity to directly dispose of the related assets or liabilities. The accounting treatment is temporarily not conducted for the other changes in the owner's equity except the net profits/losses, other comprehensive incomes and profits distribution in the net assets of the invested entity recognized through the calculation in the equity method, until they are included into the profits and losses of the current period upon disposal of this item of investment.
All the direct and related expenses incurred by the merger, including the audit fees, evaluation expenses, legal service fees, are included into the profits and losses of the current period upon their incurrence. The capital public reserve is offset for the trading expenses directly relating to the merger consideration that is represented by the issued equity instruments. If the capital reserve is not sufficient for offsetting, offset the surplus reserve and undistributed profits in sequence. The trading expenses directly related to the merger consideration represented by the issued debt instruments are included as the initial recognition amount of such debt instruments.
If the merged party has consolidated financial statements, the initial investment cost of long-term equity investment shall be determined based on the owners' equity attributable to the parent company in the consolidated financial statements on the date of merger.
6) Consolidated financial statement
The assets and liabilities obtained by the merging party in the enterprises merger are measured by the book value of the owners' equity of the merged party in the consolidated financial statements of the final controller on the date of merger.
For the enterprises merger that is finally realized through multiple transactions, if such transactions belong to a basket of transactions, each transaction is treated in accounting as if the transaction is a transaction that obtains the controlling right. If such transactions do not belong to a basket of transactions, for the long-term equity investment held by the merging party before the merger, the changes in the related profits/losses, other comprehensive incomes and other owners' equity that are recognized between the date of obtainment or the date on which both the merging party and merged party are under the final control of the same party (whichever is later) and the date of merger shall be respectively offset by the opening retained incomes of the period or the profits and losses of the current period.
When the accounting policies of the merged parties are not consistent with those of the Company, the Company makes adjustments in accordance with its own accounting policies on the date of merger and then confirms in accordance with the Accounting Standard for Business Enterprises.
3. Enterprises merger not under common control
The cost for the enterprises merger not under common control is the fair value of the assets paid, the liabilities incurred or assumed, and the equity instruments or debt instruments issued by the Company for acquiring the control right of the merged party on the date of acquisition. If future items likely to influence the merger cost, for which a relevant agreement has been reached, are estimated very possible to occur on the date of acquisition and the amount of their influence on the merger cost can be measured reliably, these future items are also recorded into the cost for the merger.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
The auditing, legal, appraisal and consulting, and other management fees paid by the Company during the enterprises merger shall be included in profits and losses of the current period in which they are incurred. The transaction expenses paid by the Company for the equity instruments or debt instruments issued as the merger consideration shall be included in the initial recognition amount of equity instruments or debt instruments. If the Company's cost for the enterprises merger is more than the Company's interest in the fair value of the identifiable net assets of the purchased party, the difference is recognized as goodwill. If the Company's cost on enterprises merger is less than the Company's interest in the fair value of the identifiable net assets of the purchased party, and after confirmation such condition still exists, the difference between the aforesaid two amounts is included in the profits and losses of the current period.
For the enterprises merger not under common control that is gradually realized through multiple exchange transactions, if such transactions belong to a basket of transactions, each transaction is treated in accounting as if the transaction is a transaction that obtains the controlling right. If such transactions do not belong to a basket of transactions, the relevant accounting treatment is performed for individual financial statements and consolidated financial statements respectively.
7) In the individual financial statements, if the equity investment held before the date of merger is calculated in the equity method, the initial investment cost of this item of investment is the sum of the book value of the equity investment of the purchased party held before the date of acquisition and the cost of the newly added investment on the date of acquisition. For the other comprehensive incomes of the equity investment held before the date of acquisition recognized based on the calculation in the equity method, the accounting treatment shall be performed on the same basis as that for the invested entity to directly dispose of the relevant assets or liabilities.
If the equity investment held before the date of merger is calculated in accordance with the financial instruments recognition and calculation rules, the initial investment cost is the sum of the fair value of the equity investment on the date of merger and the cost of the newly added investment. The difference between the fair value and the book value of the originally held equity as well as the accumulated fair value changes that are originally included into other comprehensive incomes shall all be transferred into the investment incomes of the period in which the merger occurs.
8) In consolidated financial statements, the equity of the merged party held before the date of acquisition shall be re-measured at the equity's fair value at the date of acquisition, and the difference between the fair value and the book value of the equity shall be included into current investment income. If the equity of the merged party held before the date of acquisition involves other comprehensive income, the involved income shall be included in the investment income of the period when the acquisition occurs.
(7) Preparation method of the consolidated financial statements
The scope of the consolidated financial statements of the Company is determined based on controlling status, and all subsidiaries (including the independent entities controlled by the parent company) are included in the scope. The accounting policies and accounting period adopted by all the subsidiaries included in the consolidation scope should be consistent with those of the Company. Otherwise, the Company makes necessary adjustments according to its own accounting policies and accounting period when preparing the consolidated financial statements. The Consolidated Financial Statements are prepared by the Company based on the financial statements of the Company and its subsidiaries and other relevant information.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
During the consolidation, the influence on the consolidated balance sheet, the consolidated income statement, the consolidated statement of cash flows and the consolidated statement of changes in owner's equity by internal transactions between the Company and its subsidiaries and among the subsidiaries, is offset.
When the current losses undertaken by the minority shareholders of a subsidiary are more than the proportion occupied by the minority shareholders in the owners' equity of the subsidiary at the period beginning, the difference should still be offset against the equity of the minority shareholders.
The opening amount of the consolidated balance sheet is adjusted if a subsidiary and its business are increased in the report period through the merger of enterprises under the control of a same entity. The income, expenses and profits of the subsidiary and its business during the period when it was merged are included in the Consolidated Income Statement. The cash flow of the subsidiary and its business during the period when it was merged is included in the Consolidated Statement of Cash Flows.
The opening amount of the consolidated balance sheet is not adjusted if a subsidiary and its business are increased in the report period through the merger of enterprises not under the control of a same entity. The income, expenses and profits of the subsidiary and its business from the date of acquisition to the end of the report period are included in the Consolidated Income Statement. The cash flow of the subsidiary and its business from the date of acquisition to the end of the report period is included in the Consolidated Statement of Cash Flows.
If the Company disposes of a subsidiary and its business in the report period, the income, expenses and profits of the subsidiary and its business from the period beginning to the disposal date are included in the Consolidated Income Statement and the cash flow of the subsidiary and its business in the same period is included in the Consolidated Statement of Cash Flows.
If the Company loses control of its subsidiary due to disposal of part of equity investment or other reasons, the remaining equity in the Consolidated Financial Statements shall be re-measured at fair value on the day when the Company loses control of the subsidiary. (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 into the current investment income when the Company loses control of the subsidiary.
(8) Joint venture arrangements classification and joint operation accounting treatment
1. Joint venture arrangements classification
The Company divides joint venture arrangements into joint operation and joint ventures in accordance with the structure, legal form, and agreed terms of joint venture arrangements, as well as other relevant facts and situations. Joint venture arrangements reached not through independent entities are classified as joint operation; joint venture arrangements reached through independent entities are usually classified as joint ventures; however, if there is concrete evidence indicating that the joint venture arrangements meet any one of following conditions and comply with relevant laws and regulations, the joint venture arrangements are classified as joint operation:
1) The legal form of joint venture arrangements indicates that parties in joint ventures enjoy rights and assume obligation separately for relevant assets and liabilities in said arrangements.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
2) Contract terms of joint venture arrangements prescribe that the parties in joint ventures enjoy rights and assume obligations separately for relevant assets and liabilities in said arrangements.
3) Other relevant facts and situations indicate that the parties enjoy rights and assume obligations separately for relevant assets and liabilities in said arrangements; for example, parties enjoy almost all output relating to joint venture arrangements, and the settlement of liabilities in said arrangements continuously depends on the support from parties in joint ventures.
2. Accounting treatment method for joint operation
Among following items, the Company recognizes those relating to the Company's interests in joint operation, and those items are treated in accounting according to stipulations of accounting standards for business enterprises: 4) Assets held independently are recognized, and assets held jointly are recognized based on the proportion of Company's interest;
5) Liabilities assumed independently are recognized, and liabilities assumed jointly are recognized based on the proportion of Company's interest;
6) Revenue from selling joint operation output enjoyed by the Company is recognized;
7) Revenue from selling joint operation output is recognized based on the proportion of Company's interest; 8) Expenses incurred independently are recognized, and expenses from joint operation are recognized based on the proportion of Company's interest.
If the Company invests in or sells assets of joint operation (other than assets that constitute business), before the assets are sold to a third party by the joint operation, only the part of profits and losses from the transaction attributable to other parties in joint operation is recognized. For assets impairment losses incurred according to stipulations of Accounting Standards for Busines Enterprises No. 8 - Impairment of Assets in the assets invested or sold, the Company recognizes the losses in full amount.
If the Company acquires assets from joint operation (other than assets that constitute business), before the assets are sold to a third party, only the part of profits and losses attributable to other parties in joint operation is recognized. For assets impairment losses incurred according to stipulations of Accounting Standards Business Enterprises No. 8 - Impairment of Assets in acquired assets, the Company recognizes the part of losses in accordance with the proportion assumed by it.
The Company does not enjoy joint control for joint operation, and if the Company enjoys relevant assets and assumes relevant liabilities of the joint operation, accounting treatment is performed according to said principles; otherwise accounting treatment shall be performed according to relevant ASBE stipulations.
(9) 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, owned by the Company, are recognized as cash. The investments that meet the four conditions of shorter term (to be mature within 3 months from the date of acquisition), strong liquidity, easiness in being converted into known amount of cash, very small risk of value fluctuation are recognized as cash equivalents.
(10) Foreign currency business and translation of the financial statements in foreign currency
1. Foreign currency businesses
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
In the initial recognition, foreign currency transactions are recorded into accounts after relevant amounts are translated into RMB according to the spot exchange rate on the transaction date.
On the balance sheet date, the balance of the monetary items in foreign currency is translated according to the spot exchange rate on the balance sheet date while the translation difference caused is all recorded into current gains and losses, except the difference from the special foreign currency loans related to the assets whose purchase and construction meet the conditions for capitalization, which are dealt with according to the principles for capitalization of loan expenses. The non-monetary items in foreign currency measured by the historical cost method are translated according to the spot exchange rate on the transaction date and the amount in the recording currency is not changed.
The non-monetary items in foreign currency measured by fair value are translated according to the spot exchange rate on the determination date of the fair value while the translation difference caused is recorded into current gains and losses as the gains or losses caused by the fair value changes. For the non-monetary items in foreign currency available for sale, the translation difference is recorded into other comprehensive incomes.
2. Translation of the financial statements in foreign currency
The assets and liabilities items in the balance sheet are translated according to the spot exchange rate on the balance sheet date. The owners' equity items (excluding undistributed profits) are translated according to the spot exchange rate on the occurrence of the items. The income and expense items in the Income Statement are translated according to the spot exchange rate on the occurrence date of the transactions. The translation difference in the financial statements in foreign currency caused by the aforesaid translation is recorded into other comprehensive incomes.
When an overseas operation is disposed, the translation difference in the financial statements in foreign currency related to the overseas operation, which is listed under other comprehensive incomes in the balance sheet, is transferred from other comprehensive incomes to current gains and losses of the period when the disposal is carried out. When an overseas operation is partly disposed, the translation difference is calculated according to the proportion of the disposal, which is transferred to current gains and losses of the period when the disposal is carried out.
(11) Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
1. Classification of financial instruments
Based on the economic nature (not merely the legal forms) and contractual clauses of the financial instruments issued by the management of the Company, as well as the targets for obtaining and holding financial assets and bearing financial liabilities, the financial assets and financial liabilities are classified into the following categories: the financial assets (or liabilities) measured at fair value through profit and loss, held-to-mature investments, accounts receivable, financial assets available for sale, and other financial liabilities.
2. Recognition basis and measurement method of financial instruments
1) Financial assets (liabilities) measured at fair value through profit and loss
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Financial assets or financial liabilities measured at fair value through profit and loss include the financial assets or financial liabilities held for trading, and the financial assets or financial liabilities that are directly designated as the financial assets or financial liabilities at fair value through profit and loss.
Financial assets or financial liabilities held for trading refer to the financial assets or financial liabilities that meet one of the following conditions:
a) The purpose of acquiring the said financial assets or undertaking the financial liabilities is mainly for selling or repurchasing or redeeming them in the near future;
b) Forming a part of the identifiable portfolio of financial instruments which are managed in a centralized way and for which there are objective evidences proving that the Company may manage the portfolio by way of short-term profit making in the near future;
c) Being derivative financial instruments, excluding the designated derivative instruments which are effective hedging instruments, or derivative instruments belonging to financial guarantee contracts, and the derivative instruments which are connected with the 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.
Only the financial assets or financial liabilities meeting any of the following requirements can be designated, when they are initially measured, as financial assets or financial liabilities as measured at its fair value and of which the variation is included in the profits and losses:
a) The designation is able to eliminate or obviously reduce the discrepancies in the recognition or measurement of relevant profits or losses arising from the different basis of measurement of the financial assets or financial liabilities;
b) The official written documents on risk management or investment strategies have recorded that the portfolio of said financial assets, the portfolio of said financial liabilities, or the portfolio of said financial assets and financial liabilities are managed and evaluated on the basis of their fair values and are reported to key management personnel.
c) Mixed instruments including one or more embedded derivative instruments, unless embedded derivative instruments do not significantly change the cash flow of mixed instruments, or the embedded derivative instruments shall not be separated from relevant mixed instruments;
d) Mixed instruments including embedded derivatives which are needed to be separated but cannot be measured independently at the time of acquiring or the following balance sheet date.
For financial assets or financial liabilities measured at fair value through current profits and losses, the fair value (deducting declared but not issued cash dividends or bond interests which have met the date of interest payment but have not been paid) is deemed as initial recognition amount, and relevant transaction expenses are included in current profits and losses. The interests and cash dividends obtained during the time of holding are recognized as investment income. At the period-end, the fair value changes are recorded into current gains and losses. At the time of disposal, the difference between the fair value and the initial recorded amount in the account is recognized as investment income and the gains and losses from changes of fair value are adjusted at the same time.
2) Accounts receivable
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
For the accounts receivable formed from the commodities sold or labor services provided by the Company and those of other enterprises held by the Company other than the priced debt tools in the active market, including accounts receivable and other accounts receivable, the price money in contracts or agreements of the purchaser is taken as the initial recognized amount. For those of a financing nature, the current value is taken as the initial recognized amount.
At the time of collection or disposal, the difference between the price of acquisition and the book value of such accounts receivable are recorded into current gains and losses.
3) Held-to-maturity investments
Held-to-maturity investments refer to the non-derivative financial assets with fixed recoverable or determinable amounts, which have fixed maturity dates and for which the Company has clear intent and ability to hold them to maturity.
For the held-to-maturity investments of the Company, at the time of acquisition, the sum of the fair value (deducting bond interests which have met the date of interest payment but have not been paid) and relevant transaction expenses are taken as the initial recognized amount. During the period of holding, the interest income is calculated and recognized in accordance with the remaining amortized costs 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 holding period or a shorter period applicable. At the time of disposal, the difference between the price of acquisition and the book value of such investment is recorded into investment income.
If the amount of any held-to-maturity investment disposed of or reclassified as other categories of financial assets is relatively large compared with all held-to-maturity investments of the Company before such selling or reclassification, the remaining held-to-maturity investments shall be reclassified as the financial assets available for sale immediately after the aforesaid disposal or reclassification. On the date of reclassification, the difference between the book value of the investment and its fair value is included into other comprehensive income, and shall be transferred to the current gains and losses when the financial assets available for sale have depreciated or are terminated for recognition, except in the following circumstances:
a) The date of selling or reclassification is close to the date of maturity or redemption of the investment (for example, within three months before the date of maturity), and the market interest rate has no obvious influence on the fair value of the investment.
b) The enterprise has recovered nearly all the initial principal of the investment according to the repayment method as specified in the contract.
c) The selling or reclassification is caused by independent events that are uncontrollable for the enterprise, unrepeatable according to estimation, and difficult to forecast reasonably.
4) Financial assets available for sale
Financial assets available for sale refer to the non-derivative financial assets that are determined as available to sale at the initial recognition, and the financial assets except other financial assets.
For the financial assets available for sale of the Company, the sum of the fair value (with the cash dividends declared but not yet distributed or the bond dividends not yet received with the interest payment period expired deducted) and relevant transaction expenses are taken as the initial recognized amount at the time of obtainment.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
The interests or cash dividends obtained during the time of holding are recognized as investment income. The gains or losses caused by the fair value changes of the financial assets available for sale, except the depreciation losses and the exchange difference caused by foreign currency financial assets, are all included into other comprehensive incomes. At the time of disposal of financial assets available for sale, the difference between the price of acquisition and the book value of such financial assets is recorded into investment gains and losses. At the same time, the amount of the disposed part of the assets originally recorded in the accumulative amount of the changes in the fair value of other comprehensive incomes is transferred and recorded into investment gains and losses.
For the equity instrument investments that have no quotation in active markets and of which the fair value cannot be reliably measured, as well as the derivative financial assets that are correlated to the equity instrument and can only be settled through the delivery of the equity instrument, they are measured based on their costs by the Company.
5) Other financial liabilities
The sum of the fair value of such assets and relevant transaction expenses is taken as the initial recognized amount. The amortized cost is adopted in the subsequent measurement.
3. Recognition basis and measurement method for financial assets transfer
In the case of the transfer of the financial assets of the Company, if almost all the risks and returns in the ownership rights of the financial assets are transferred to the assignee, the recognition of such financial assets is terminated, and if almost all the risks and returns in the ownership rights of such financial assets are retained, the recognition of such financial assets is not terminated.
In the judgment whether a financial asset transfer meets the above conditions for termination of its recognition, the principle of attaching more importance to substance than form is adopted. The Company divides financial assets transfer into the complete and the partial transfer. Where the complete transfer of financial assets meets the conditions for termination of recognition, the difference of the following two amounts is recorded into current gains and losses.
6) The book value of the transferred financial assets;
7) The sum of the consideration received due to transfer and the accumulated amount of the changes in fair value originally recorded in owners' equity (involving the situation when the transferred financial assets are the financial assets available for sale).
If the partial transfer of financial assets meets 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 according to their relevant fair value while the difference between the following two amounts is recorded into current gains and losses.
The book value of the part with its recognition terminated;
The sum of the consideration of the part with its recognition terminated and the part of the accumulated amount of the changes in fair value originally recorded in owners' equity corresponding to the part with its recognition terminated (involving the situation when the transferred financial assets are the financial assets available for sale). Where the financial assets transfer does not meet the conditions for termination of recognition, the recognition of such financial assets is continued. The received consideration is recognized as a financial liability.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
4. Conditions for the termination of the recognition of financial liabilities
If all or part of current obligations of a financial liability is discharged, the recognition of the financial liability or part of it is terminated. If the Company signs an agreement with the creditor to substitute an existing financial liability by assuming a new financial liability and the contract terms for the new liability and the existing one are not consistent, the recognition of the existing financial liability is terminated and the new financial liability is recognized in the meantime.
If material alteration has been made to all or a part of contract terms of the existing financial liability, the recognition of the existing liability or part of it is terminated and, in the meantime, the liability after the alteration is made is recognized as a new financial liability.
If the recognition of all or a part of a financial liability is terminated, the difference between the book value of the liability with its recognition terminated and the consideration (including non-cash assets transferred or the new liability assumed) is recorded into current gains and losses.
If the Company repurchases a part of a financial liability, the total book value of the liability is allocated on the repurchasing date according to the respective 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 assumed) is recorded into current gains and losses.
5. Methods for the determination of the fair value of financial assets and liabilities
For the financial assets and financial liabilities that exist in an active market, the Company determines their fair value based on the quotation in the active market. For those that do not exist in an active market, the Company estimates their fair value using valuation techniques, such as referring to the prices applied in recent transactions which are conducted by well-informed and willing parties or the current fair value of other financial instruments of the same nature, or adopting the discounted cash flow (DCF) technique and the option pricing model. For those initially acquired or raw financial assets and financial liabilities, the Company determines their fair value based on the market price.
6. Accrual of impairment provision for financial assets (excluding accounts receivable and loans)
The Company shall check on the balance sheet date the book value of the financial assets except those measured at fair value and with changes included in current profit and loss. If there is any objective evidence indicating that a loss has occurred in these financial assets, impairment provision shall be made.
The objective evidences of impairment in financial assets include but are not limited to:
8) The issuer or the debtor encounters serious financial difficulties;
9) The debtor violates contract terms, such as breach or late payment of interests or principal;
10) The creditor makes a concession for the debtor who encounters financial difficulties for economic or legal considerations;
11) The debtor is likely to go bankrupt or conduct other financial restructuring;
12) The financial assets cannot continue to be traded in the active market as the issuer encounters serious financial difficulties;
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Notes to the Financial Statements 2014
13) 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 making an overall appraisal on the public data, 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 paying ability of the debtor of the said combination of financial assets worsens gradually, or the unemployment rate of the country or region where the debtor is situated increases, or the prices of the region where the guaranty is situated are obviously dropping, or the industrial sector concerned is in slump, etc.;
14) Any seriously adverse change has occurred in technical, market, economic or legal environment, etc. wherein the debtor operates its business, which makes the investor of an equity instrument unable to take back its cost of investment;
15) The fair value of the equity instrument investment decreases significantly or non-transiently;
Specific impairment methods for financial assets are as follows:
16) Impairment provision for financial assets available for sale:
The Company assesses impairment losses on various available-for-sale financial assets by individual affirmation on the balance sheet date, wherein the objective evidences of impairment in available-for-sale equity instruments investment include that the fair value of equity instrument decreases significantly or non-transiently, and the specific quantitative criterion is that if the decrement of the fair value of the equity instrument is50% or more than the cost on the balance sheet date, or the time of duration when it is lower than its cost exceeds 12 months (including), it indicates impairment.
When impairment occurs in available-for-sale financial assets, even though the recognition of the financial assets has not be terminated, the Company transfers out accumulated losses arising from the depreciation of fair values, which was included in other comprehensive income originally, from other comprehensive income, and includes it into current profits and losses. The transferred accumulated losses equal to the balance that initial acquisition costs of available-for-sale financial assets deduct recovered principal and amortized amount, current fair values and the impairment losses originally included in profits and losses.
For available-for-sale debt instruments with recognized impairment losses, if fair values have increased and the increase objectively relate to events occurring after original impairment losses are recognized, original recognized impairment losses are reversely included in current losses and profits; for impairment losses in available-for-sale equity instruments, those are reversed through equity when the value of equity instruments increases; however, equity instruments investments which have no quoted price in the active market and whose fair values cannot be reliably measured, or impairment losses in derivative financial assets which are connected with the equity instrument investments, and which shall be settled by delivering the said equity instruments, cannot be reversed. 17) Impairment provision for held-to-maturity investments
If there is any objective evidence indicating that a loss has occurred in the held-to-maturity investments, calculate and recognize the impairment loss based on the difference between the book value of these investments and the current value of the expected future cash flow. If there is any evidence indicating 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 should not exceed the amortized cost of the financial assets at the date of provision reversal if impairment provision has not been made.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
7. Offset between financial assets and financial liabilities
Financial assets and financial liabilities are separately listed in the balance sheet, and they are not offset. When the following conditions are met simultaneously, however, the net amount after the offset of financial assets and financial liabilities is listed in the balance sheet:
18) The Company has the legal right to offset the recognized amounts, and such legal right is enforceable at present.
19) The Company intends to make the settlement through the net amount, or liquidates the financial assets and repays the financial liabilities simultaneously.
(12) Accounts receivable
1. Accounts receivable with significant single amount and single bad debt provision
Recognition criteria for the accounts receivable with significant single amount and single bad debt provision: Top five accounts receivable
The method for the bad debt provision of the accounts receivable with significant single amount: perform the impairment test separately, make bad debt provision for the difference between the net present value of expected future cash flow and its book value, and record it into the current profits and losses. The accounts receivable which has no impairment shall be included in the bad debt provision made for the corresponding portfolio. 2. Accounts receivable for which bad debt provisions are made based on different portfolios:
1) Determination basis for combinations of credit risk characteristics
As for accounts receivable with insignificant single amount and those with significant single amount but without impairment after separate test, they shall be divided into several portfolios according to the credit risk features. The bad debt provision to be accrued shall be determined based on the actual loss rate of accounts receivable portfolio with similar credit risk features in the previous year combining with the present situations.
Basis for portfolio determination
Perform best estimation on the provision proportion of the accounts receivable based on the Portfolio 1. Aging analysis method previous experience of the company. As for the classification of credit risk portfolio, please refer to the aging of account receivable.
According to the fund nature, no bad-debt provision shall be accrued, including premium for Portfolio 2
lease and related party transactions.
2) Accrual method determined according to the portfolio of credit risk characteristics:
 Bad debt provision accrued using the aging analysis method
Provision proportion of accounts Provision proportion of other accounts Aging
receivable(%) receivable(%)
Within one year (including one year) --- --- 1-2 years 5.00 5.00 2-3 years 10.00 10.00 Over 3 years 20.00 20.00 Bad-debt provision accrued using other methods
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Provision proportion of accounts Provision proportion of other accounts Portfolio name
receivable(%) receivable(%)
Portfolio 2 --- --- 3. Accounts receivable with insignificant single amount for which bad debt provision is separately accrued Reason for bad-debt provision accrued separately: there are objective evidences showing that the funds cannot be recovered by the company according to original articles of the accounts receivable.
Accrual method for bad-debt provision: it shall be accrued according to the difference between the estimated present value of future cash flow and its book value concerning the amounts receivable.
(13) Inventory
1. Classification of inventory
Inventory refers to the finished products or commercial products held by the Company in daily activities for sale, and the products in process, and the materials and supplies consumed in manufacturing or service delivery process. It mainly includes the raw material, revolving material, outside processing materials, unfinished products, self-made semi-manufactured products, finished products (commodity stocks), development cost, and development products.
The development cost refers to the properties having not constructed and with a view to selling it; the lands to be developed refer to lands that have been purchased and to be developed into lands with finished development products; the development products refer to the properties having been constructed and for sale. In case of overall development of the project, the lands to be developed are all transferred into development cost; in case of phased development of the project, parts of the lands for phased development will be transferred into development cost, and the undeveloped lands remain on the lands to be developed.
2. Pricing method of inventory
Inventory measurement shall be performed initially based on the cost upon acquisition, including the purchasing cost, processing cost and other costs. The pricing of the inventory is made according to the weighted-average System at the time of delivery.
3. Determination basis for the net realizable value of inventory and the provision method of provision for obsolete stocks
After a complete counting and examination of the inventory at the end of the period, the provision for obsolete stocks is accrued or adjusted according to the lower of the inventory cost and the net realizable value. The net realizable value of the goods inventory directly for sale such as finished products, commodity stocks and materials for sale is determined in regular production and operation according to the amount of the estimated sale price of such inventory minus the estimated sale expenses and relevant taxes. That of the material inventory to be processed is determined in regular production and operation according to the estimated sale price of the finished products produced minus the estimated sale expenses and relevant taxes. That of the inventory held for the performance of sale or service contracts is calculated on the basis of the contract price. Where the quantity of the inventory is more than the quantity ordered in the sale contract, the net realizable value of the surplus of such inventory is calculated on the basis of the general sale price.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
At the end of the period, the provision for obsolete stocks is accrued according to individual inventory items. However, the provision for obsolete stocks for the inventory of a large quantity and a low unit price is accrued according to the type of the inventory. For the inventory involving the product series produced and sold in the same region, having identical or similar final use or purpose, and being difficult to be separated from other items for measurement, relevant provision for obsolete stocks is accrued in a combined manner.
Where the factors previously causing the recording of the reduction of inventory value stop to exist, the reduced amount is restored and transferred back from the originally accrued amount of provision for obsolete stocks. The transferred amount is recorded into current profit and loss.
4. Inventory system
The perpetual inventory method is adopted.
5. Amortization method of low value consumables and packaging materials
1) For low value consumables, the one-off writing-off method is adopted.
2) For packaging materials, the one-off writing-off method is adopted
6. Accounting methods of the development land
For pure land development project, the costs thereof shall individually constitute the development cost of the land; For projects that are developed along with the housing property, the expenses shall generally be apportioned and recorded into the commercial housing cost according to the actual area if the expenses can be properly assigned. 7. Accounting method for cost of the public supporting facilities
Public supporting facilities that cannot be transferred with compensation: it shall be apportioned and recorded into the commercial housing cost according to the determination criteria of benefit ratio;
Public supporting facilities that can be transferred with compensation: taking each supporting facility project as the cost accounting objective, collect all the incurred cost,
8. Accounting method of maintenance funds
According to related provisions of the place where the development project locates, the maintenance cost refers to the development cost that is charged to the house buyer or accrued and recorded into the development cost of related development products by the company during selling (advance selling) of the development products, which shall be handed over to the management department of the maintenance funds.
9. Accounting methods of quality security deposit
The quality security deposit shall be reserved from the project funds of the construction unit according to the construction contract. The maintenance cost generated during the warranty period of the development products can offset the quality security deposit; at the expiration of the agreed warranty period, the quality security deposit shall be returned back to the construction unit.
(14) Loans and advances issued
1. Loan
A loan is a sum of loan in the unit of RMB Yuan granted to a small or medium-sized enterprise, individual business and individual person according to the market rate of interest. The principal amount of the loan is taken
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
as the originally recognized amount. The interest income recognized during loan holding period shall be calculated based on the actual interest rate. The actual interest rate is determined at the time of acquisition and remains unchanged within the anticipated existence period or a shorter period applicable.
2. Loan loss provision
At the end of each quarter, the Company classifies each single loan into five categories based on the quality of credit assets: normal, concerned, subprime, suspicious, and loss, and include it in daily credit management for classified supervision.
The Company shall properly estimate the possible loss incurred on loans and make a timely provision for loan loss in accordance with the prudent accounting principle. Loan loss provisions include general provision and special provision. General provision is made in proportion of the balance of all loans for recovering the unrecognized possible loss. Special provision is made for recovering the special loss based on the extent of each loan loss after loan classification in accordance with Guidelines for Risk-based Loan Classification.
The scope of loan loss provision includes risk-bearing and loss-bearing assets, such as various petty loans (including mortgage, pledge, guarantee, and credit) and bill discount.
The Company shall make provision by quarter. The year-end balance of general provision shall not be less than1% of the year-end loan balance.
The Company has made quarterly special provisions based on the following proportions:
(1) Concerned loan:1%
(2) Concerned loan:2%
(3) Subprime loan:25%
(4) Suspicious loan:50%
(5) Loss loan:100%
(15) Long-term equity investment
1. Determination of investment cost
(1) The long-term equity investment formed through business merger. Please refer to the Annotation IV/ (IV) Accountant Arrangement Methods for Business Merger under the Same and Different Control for details.
(2) Long-term equity investment obtained in other ways
The purchase price money actually paid is taken as the initial investment cost of the long-term equity investment obtained by cash.
The initial investment cost includes the fees, taxes and other necessary expenses that have direct connections with the long-term equity investment.
As for the long-term equity investment that is gained by issuing the equity securities, the fair value of equity securities issuing shall be taken as the initial investment cost; as for the transaction cost that is generated when issuing or obtaining their own equity instruments, it can be deducted from the equity concerning those that can be directly attributable to the equity transactions.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Under the premises that the non-monetary assets exchange is of commercial nature and that the fair value of the assets received and given out in the exchange can be measured reliably, the initial investment cost of the long-term equity investment received in non-monetary assets exchange is determined on the basis of the fair value of the assets given out, unless there are definite evidences that the fair value of the received assets is more reliable. For the non-monetary assets exchange that do not meet the above premises, the book value of the received assets and relevant taxes payable is taken as the cost of the long-term equity investment.
The initial investment cost of the long-term equity investment obtained through debt restructuring is determined according to its fair value.
2. Measurement after recognition and profit and loss recognition
(1) Cost method
The cost method can be adopted by the company for accounting the long-term equity investment that controlled by the invested organizations, and then such long-term equity investment can be priced according to the initial investment cost, and meanwhile, the cost for adjusting the long-term equity investment can be supplemented or recovered.
Under equity method, the Company recognizes investment income according to the cash dividends or profits enjoyed by the Company, for which the invested organization declares to distribute, except the actual amount paid when investment is acquired and cash dividends and profits included in the consideration and declared but yet to be distributed.
(2) Equity method
Equity method is adopted by the company for accounting the long-term equity investment of the joint venture as well as the cooperative enterprise; as for the equity investment of associated enterprise indirectly held through venture investment organization, mutual fund and trust company as well as the similar subjects including unit-linked Insurance fund, the fair value measurement shall be adopted and the fluctuation thereof shall be recorded into the profit or loss.
If the initial cost of the long-term equity investment is larger than the balance of the net identifiable assets fair value share of the invested organizations, the initial cost thereof shall not be adjusted; if the initial cost of the long-term equity investment is less than the above mentioned balance, it shall be recorded into the current profit and loss.
After gaining the long-term equity investment, the company shall respectively recognize the investment income and other comprehensive income according to the Company's proportion in the net profit and loss as well as other comprehensive income realized by the invested organizations, and meanwhile, the book value of the long-term equity investment shall be adjusted; the due parts that shall be enjoyed shall be calculated according to the declared profit or cash dividends that are announced of distribution by the invested organizations, and then the book value of the long-term equity investment shall be decreased correspondingly; as for other fluctuations besides profit and loss, other comprehensive income and profit allocation of the invested organizations, the book value of the long-term equity investment shall be adjusted and then be recorded into the owner's equity.
The company shall recognize its proportion in the net profit or loss of the invested organization based on fair value of each identifiable asset of the invested organization when the investment is acquired. As for the unrealized profit and loss from any internal transaction between the company and the joint venture as well as among the
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
cooperative enterprise, it can be offset by the due part of the company, which shall be calculated according to the rate it shall enjoy, and the profit and loss on investments can be recognized on this basis.
Where the Company recognizes the due share of the losses incurred by the invested organizations 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 into the invested organization and the book values of long-term accounts receivable and others are offset. Finally, if the enterprise still bears additional obligations as agreed in the investment contract or agreement after the above processing, liabilities are recognized according to the anticipated obligations to be borne and recorded into current investment loss.
Where the invested organizations realize profits in the later periods, the Company should make accounting treatment in the reversed sequence against the above after deducting the shared loss not yet recognized, reduce the book balance of the recognized anticipated liabilities, restore other long-term equity that practically constitutes net investments into the invested organizations and the book value of the long-term equity investment, and recognize investment income at the same time.
3. Accounting method change for long-term equity investment
(1) From fair value measurement to equity method
For equity investments that were held originally by the Company and are treated in accounting based on the recognition and measurement standards for financial instruments, which have no control, joint control or significant influence on the investee, if significant influence or joint control is constituted but control is not constituted because of additional investments, the sum of the fair value of original held equity investment and the additional investment cost recognized based on ASBE No. 22- Financial Instruments Recognition and Measurement is recognized as the initial investment cost for switching to the equity method.
For originally held equity investments which are classified as available-for-sale financial assets, the balance between fair values and book values, and accumulative fair value variations of originally included other comprehensive income are transferred into current losses and profits through accounting with equity method. Initial investments costs accounting with equity method being lower than new shareholding ratio calculation recognition after additional investments shall enjoy the balance between fair value shares of identifiable net assets on additional investment date of investee, and book values of long-term equity investments are adjusted and are included in current non-business income.
(2) From fair values measurement or equity method to the cost method
Equity investments were held originally by the Company and are performed accounting treatment upon financial instruments recognition and measurement standards, which have no control, joint control or significant influence on the investee, or long-term equity investments of associated enterprises or joint ventures originally held by the Company, and if those can be controlled by the investee which is not under the same control due to additional investments, when individual financial statement is prepared, initial investment costs of transferring cost method accounting are the sum of the book value of originally holding equity investments plus newly increased investments costs.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Other comprehensive income recognized in equity method accounting upon equity investments held before the acquisition date, when it is disposed, is performed with accounting treatment with the same basis that the investee directly disposes relevant assets or liabilities.
Equity investments held before the acquisition date is disposed subject to relevant stipulations of ASBE No.22- Financial Instruments Recognition and Measurement and accumulative fair values variations of originally included other comprehensive income are transferred into current losses and profits at the time of transferring to cost method accounting.
(3) From the equity method to fair value measurement
For the Company losing joint control or significant influence on the investee due to disposal of some equity investments, rest equity after disposal is performed with accounting under ASBE No.22- Financial Instruments Recognition and Measurement, and the balance of fair values and book values on the date when joint control or significant influence is lost is included in current losses and profits.
For other comprehensive income recognized based on the equity method upon original equity investment, accounting treatment is performed on the same basis that the investee directly disposes relevant assets or liabilities when accounting with the equity method is terminated.
(4) From the cost method to the equity method
For the Company losing the control of the investee due to disposal of some equity investments, when individual financial statement is prepared, and the rest equity after disposal being able to cause joint control or significant influence on the investee, accounting is transferred to be performed with the equity method, and the adjustment is conducted that the rest equity is deemed as accounting with the equity method since acquisition.
(5) From the cost method to fair value measurement
During formulation of certain financial statements, if the company loses control upon an invested unit because of disposing part of its equity investment and the remaining equity after disposal cannot impose joint control or significant effect on the invested unit shall be treated in accounting according to related provisions of Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments. The balance between fair value and book value on the day of losing control shall be recorded into current profit and loss. 4. The Disposal of Long-Term Equity Investment
When disposing long-term equity investment, the balance between book value and actual price shall be recorded into current benefit and loss. Long-term equity investment adopting cost method, when disposing the investment, shall conduct accounting treatment on the part of being included into other comprehensive income proportionately on the same basis as that of depositing related asset or debt by invested unit.
When all trading provisions, conditions and economic effects that are disposed to equity investment of subsidy shall satisfy one or more following conditions, multiple transactions items shall be made accounting treatment as package deal.
(1) Those transactions are conducted at the same time or at the moment of considering mutual effects.
(2) Only the whole transactions can make up of business results.
(3) One transaction depends on another transaction at least.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
(4) It's uneconomical to consider a transaction individually. However,it‗s economical to consider one transaction with others at same time.
Under the circumstance that transactions, because of part of equity investment or some other reasons, lose control power of original subsidy so as not be included to package deal, related accounting treatment shall be conducted by differentiating individual financial statements and combined financial statement.
(1) With regard with the disposal equity in some financial statements, the balance between book value and actual price shall be recorded into current benefit and loss. If the remaining equity after disposal imposes joint control or significant effects on the invested unit, the remaining equity shall be calculated by the equity method and adjusted as being calculated by the equity method since acquisition. If remaining equity after disposal cannot impose joint control or significant effects on the invested unit, the remaining equity shall be treated in accounting in accordance with Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments. The balance between fair value and book value on the day of losing control shall be recorded into current profit and loss.
(2) Cost and long-term equity investment enjoys accordingly the balance between net asset shares calculated as of purchase date or merge date on all transactions before losing the company control power in joint financial statement. Adjust capital reserve (capital stock premium). Retained income shall be adjusted, if capital reserve is insufficient. The remaining equity after losing control power shall be recalculated in accordance with the fair value on the day of losing control power. (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.
All transactions that dispose equity investment of subsidy until to lose control power shall be included to package deals. All transaction, as disposal of company equity investment, shall conduct accounting treatment on transactions losing control power; differentiate individual financial statement and joint financial statement to conduct related accounting treatment:
(1) In individual financial statement, before losing control power, the balance between book values of long-term equity investment corresponding to disposal cost and disposal equity shall be affirmed as other comprehensive income and be moved to current benefit and loss when control power is lost.
(2) In joint financial statement, before losing control power, the balance between net asset of subsidy corresponding to disposal cost and disposal investment shall be affirmed as other comprehensive income and be moved to current benefit and loss when control power is lost.
5. The Identification Standard of Joint Control and Significant Influence
If company controls collectively certain arrangement in accordance with related provisions and other participants, or gives important activity decision on arrangement that only exists when participants all agree by sharing control power, it's seen that company and other participants collectively control certain arrangement. And the arrangement refers to joint venture arrangement.
Joint venture arrangement is reached through individual subject. When company is identified to enjoy net asset of individual subject in accordance with related provisions, individual subject is regarded as joint venture and calculated by equity method. When company is identified not to enjoy net asset of individual subject in
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
accordance with related provisions, individual subject is regarded as mutual operation. The Company will recognize items related with its interest in the income from joint operation and perform accounting treatment based relevant accounting standards.
If the investor has significant influence in the invested organization, it means that investor is entitled to take part in the decision making of financial and operational policies in the invested organization but has no power to control the policy making independently or jointly with other parties. The company will identify if it has significant influence after analyzing one or more circumstances and considering all facts and conditions. (1) assign representatives in the board of directors in the invested unit or similar authority; (2) participate in formulating financial and operational policy of invested unit. (3) make important transitions between invested units. (4) assign managers to invested unit; (5) provide invested unit with key technical materials.
(16) Investment properties
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 real estate as entry value. The cost of purchased investment real estate 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 real estate using the cost pattern, and makes accrual depreciation or amortization for buildings and land use rights based on their expected useful life and residual value. The following table lists the expected useful life, residual value, and annual depreciation (amortization) rate of investment real estate:
Annual depreciation Category Expected useful life Residual value
(amortization) rate Houses and buildings 20-40 5% 4.75%-2.38% When the purpose of an investment real estate changes to self-use, the Company shall convert the investment real estate 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 asset to investment real estate since the day of change. The book value of the real estate prior to the conversion shall be entry value after conversion.
If an investment real estate is disposed of, or if it withdraws permanently from use and if no economic benefit will be obtained from the disposal, the recognition of it as an investment real estate shall be terminated. When an enterprise sells or transfers or discards any investment real estate, or when any investment real estate of an enterprise is damaged or destroyed, the enterprise shall deduct the book value of the investment real estate as well as the relevant taxes from the disposal income, and include the amount in the current profit and loss.
(17) Fixed assets
1. Conditions on recognition of fixed assets
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Fixed assets refer to the tangible assets held for the purpose of the manufacture of commodities, provision of labor services, lease or operation and management with a term of use exceeding one year. The recognition of fixed assets can be made only when all the following conditions are satisfied:
(1) Where the economic interests related to such fixed assets are likely to flow into the company;
(2) Where the cost of such fixed assets can be measured reliably.
2. Initial measurement of the fixed assets
Fixed assets of the company shall be measured initially according to the cost, of which, the cost of the outsourcing fixed assets shall include purchasing price, import tariff and other related taxes as well as other expenses generated before bringing the fixed asset to reach the usable conditions and can be directly attributable to the asset. The cost of a self-constructed fixed asset shall be formed by the necessary expenses incurred for bringing the asset to the expected conditions for use. The fixed asset input by investors can serve as the entry value according to the value stipulated by the investment contract or agreement, and for those unfair values as stipulated thereof, they shall be recorded at their fair values. 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. Balance of the actual paid cost and the present value of the acquisition price shall be included in the current profit and loss during the credit period, excluding those that shall be capitalized.
3. The subsequent measurement and disposal of fixed assets.
(1) Depreciation of fixed assets
Depreciation of fixed assets shall be accrued by subtracting the estimated net residual value from the booking value. For fixed assets with impairment provision already accrued, the depreciation amount shall be determined in the future based on the book value after deducting the impairment provision and the remaining useful life. The Company determines the useful life and residual value of fixed assets based on the nature and use of the fixed assets. The Company rechecks the useful life, residual value, and depreciation method of fixed assets at the end of every year. In case of any discrepancy between the recheck result and estimated result, the Company makes an adjustment correspondingly.
Depreciation method, depreciation year and annual depreciation rate of various fixed assets are as follows: Depreciation period Residual value rate Annual depreciation Category Depreciation method
(year) (%) rate Houses and buildings Straight-line depreciation 20-40 5 4.75-2.38 Machinery equipment Straight-line depreciation 5-10 5 19.00-9.50 Electronic equipment Straight-line depreciation 5-10 5 19.00-9.50 Transportation equipment Straight-line depreciation 5-10 5 19.00-9.50 Other equipment Straight-line depreciation 10 5 9.50 (3) Subsequent expense of the fixed asset
As for subsequent expense related to the fixed asset satisfying the conditions for recognition of fixed assets, they shall be recorded into cost of the fixed asset; and as for those not satisfying the conditions for recognition of fixed
assets; they shall be recorded into the current profit and loss during its occurrence.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
(4) Disposal of fixed assets.
When any fixed asset is deposed, or expected to be unable to generate economic interest through using or disposal, the recognition thereof shall be terminated. When an enterprise sells, transfers or discards any investment real estate, or when any investment real estate of an enterprise is damaged or destroyed, the enterprise shall deduct the book value of the investment real estate as well as the relevant taxes from the disposal income, and include the amount in the current profit and loss.
4. Recognition basis and pricing method of the fixed assets acquired under finance leases
The fixed assets leased by the Company shall be recognized as the fixed assets acquired under finance leases when one or more of the following conditions are met:
(1) The ownership of the leased asset belongs to the Company when the lease expires;
(2) The Company has the option to buy the leased asset at a price which is expected to be far lower than the fair value of the leased asset at the date when the option becomes exercisable. Thus, on the lease beginning date, it can be reasonably determined that the option will be exercised.
(3) Even if the ownership of the asset is not transferred, the lease term covers the major part of the useful life of the leased asset.
(4) The current value of the minimum lease payment that is paid by the Company on the lease beginning date amounts to substantially all of the fair value of the leased asset on the lease beginning date.
(5) The leased assets are of a special nature that only the Company can use them without making major modifications.
The leasee shall record the lower 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, 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 useful 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 useful life.
(18) Construction in progress
1. Type of construction in progress
The construction in progress built 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
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
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 made based on projects. 2. Standards and time points for the construction in progress being carried forward to fixed assets
For a construction in progress, all expenses during the construction till the desired usable status of the asset is reached are taken as the recorded value of the fixed asset. If a construction in progress has reached the desired usable status but has not conducted final accounting, it is transferred into fixed assets when it reaches the desired usable status, according to the estimated value based on project budget, construction cost or actual cost; in the meantime, depreciation is accrued according to the Company's depreciation policies for fixed assets; when the final accounting is conducted the temporarily estimated value is adjusted according to the actual cost while the accrued depreciation amount is not adjusted.
(19) Borrowing costs
1. 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 recorded into relevant assets cost. Other borrowing costs are recognized as expenses according to the incurred amount at the time of incurrence and recorded into current profit and loss.
The assets that meet the conditions of capitalization refer to the assets such as fixed assets, investment property and inventory that can reach the anticipated usable or salable status only after a considerable time of purchase, building or production activities.
The borrowing costs may be capitalized when all of the following conditions are met:
1) The assets expenditure has already incurred, including that incurred in the form of cash payment, non-monetary assets transfer or bearing of debts with interests for the purchase, building or production of the assets that meet the conditions of capitalization.
2) The borrowing costs have already been incurred.
3) The construction or production activities necessary for putting the assets into a usable or salable status have already started.
2. Capitalization term of borrowing costs
The capitalization term refers to the period between the start time point and the end time port of the capitalization of the borrowing costs, excluding the period in which the capitalization is suspended.
Where the purchase, building or production of the assets that meet the conditions of capitalization has put such assets into the anticipated usable or salable status, the capitalization of the borrowing costs is stopped.
Where part of the projects in the purchase, building or production of the assets that meet the conditions of capitalization have been completed and reached the anticipated usable or salable status, the capitalization of the borrowing costs of such part of the assets is stopped.
Where different parts of the assets purchased, built or produced have been completed but 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.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
3. Suspension period of capitalization
Where abnormal discontinuation has occurred in the purchase, building or production of the assets that meet the conditions of capitalization and the time of discontinuation exceeds three months consecutively, the capitalization of the borrowing costs is suspended. If the discontinuation is a necessary procedure in the process during which the assets purchased or produced, which meet the conditions of capitalization, reach the usable or salable status, the capitalization of the borrowing costs is continued. The borrowing costs occurring in the suspension period are recognized as current profit and loss and the capitalization is continued until the purchasing and production activities of the assets are restarted.
4. Calculation method of the amount of borrowing costs capitalization
The interest expenses of special loans (with the interest income of the unused borrowed funds deposited in the bank or the investment income obtained from temporary investment deducted) and relevant auxiliary expenses are capitalized before the assets that meet the conditions of capitalization, purchased, built or produced with such loans, reach the anticipated usable or salable status.
The amount of the interests of common loans that are capitalized is calculated and determined by the weighted average of the accumulative parts of the assets expenditure exceeding special loans multiplied by the capitalization rate of common loans. The capitalization rate is determined according to the weighted average interest rate of common loans.
Where the loans involve discount or premium, the amount of discount or premium to be amortized in each accounting period is determined in accordance with the actual interest rate method and the amount of interests of each period should also be adjusted.
(20) Intangible assets and development expenses
An intangible asset refers to identifiable non-monetary assets without physical substance which is possessed or controlled by the Company, including purchased software and land use rights.
1. Initial Measurement of Intangible Assets
The cost of the intangible assets purchased from outside includes purchase price money, relevant taxes and other expenses incurred due to putting such assets to the anticipated use that can be directly attributed to such assets. Where the price money of the purchased intangible assets is paid on a deferred basis within a term exceeding regular credit conditions and actually of a financing nature, the cost of the intangible assets is determined on the basis of the current value of the price money in purchase.
The entry value in the account of the fixed assets obtained from debtors for the repayment of liabilities in debt restructuring is determined on the basis of the fair value of the fixed assets. The difference between the book value of debt restructuring and the fair value of the fixed assets used for the repayment of liabilities is included in current profit and loss.
Under the premises that the non-monetary assets exchange is of commercial nature and that the fair value of the assets received and given out in the exchange can be measured reliably, the initial investment cost of the long-term equity investment received in non-monetary assets exchange is determined on the basis of the fair value of the assets given out, unless there are definite evidences that the fair value of the received assets is more reliable. For the non-monetary assets exchange that do not meet the above premises, the book value of the received assets and relevant taxes payable is taken as the cost of the long-term equity investment.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
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. Follow-up Measurement of Intangible Assets
When obtaining any intangible asset, the company analyzes and estimates their service life and classifies them as intangible asset with finite or infinite service life.
1) Intangible assets with finite service life
For intangible assets with finite service life, they should be amortized using straight line method within the period during which they bring economic benefits to the company. The estimated service life and basis of intangible assets with finite service life are as follows:
Item Estimated service life Basis
Outsourced software 5 Benefit period
Land use right 50 Benefit period
At the end of each period, the service life and amortization method of the intangible assets with finite service life shall be reviewed. If there's any difference with original estimation, adjustment shall be made accordingly. At the end of this year, the useful life and amortization method of the intangible assets with finite useful lives are the same as the last year.
3. Classification standards for research and development phases ofR&D projects inside the Company
Research phase: a phase in which creative and planned investigation and research activities are carried out for the purpose of obtaining and understanding new scientific or technological knowledge.
Development phase: a phase in which research results or other knowledge, before being produced or used for commercial purposes, are applied in a certain plan or design for the purpose of producing materials, equipment and products that are new or feature substantial improvement.
The expenses for insideR&D projects during the research phase are recorded into current profit and loss when the expenses occur.
4. Standards for meeting the conditions of capitalization by research phase
The expenditure in the development stage of the research and development project can be recognized as intangible assets only when all the following conditions are met:
2) The completion of such intangible assets makes it usable or its sale technically feasible.
3) There is an intention to complete such intangible assets and use or sell it.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
4) 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.
5) 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.
6) The expenditure attributed to the development stage of such intangible assets can be reliably measured. The expenditure at the development stage that cannot meet the above conditions shall be recorded in the current profit and loss. The development expenditure that was recorded in profits and losses during previous period cannot be recognized as assets in future. The capitalized expenditure at the development stage shall be listed as development expenditure on the balance sheet, and will be converted to intangible assets from the date when the project attains its expected purpose.
(21) Long-term Asset Impairment
On the balance sheet date, the company shall judge if long-term asset has any sign of impairment loss. If it has, we shall estimate recoverable amount based on single asset; if the recoverable amount is difficult to be estimated, we shall determine the recoverable amount based on assets unit which the asset belong to.
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.
Measurement result of recoverable amount shows: if recoverable amount of long-term asset less than its book value, its book value should be impaired to recoverable amount, and the impairment value should be included into asset impairment loss and recorded into current profit and loss. At the same time, we should make allowance for assets depreciation reserves. Once the assets impairment losses have been accrued, it cannot be turn back during the subsequent accounting periods.
At the same time, the corresponding assets impairment provision is accrued. After the recognition of assets impairment loss, corresponding adjustments are made in the future periods on the depreciation or amortized expenses of the impaired assets so that the adjusted book value of such assets (with the anticipated net residual value deducted) can be amortized systematically within the remaining service life.
For intangible assets with uncertain goodwill and service life formed through enterprise merger, impairment test shall be conducted each year no matter whether there is any sign of impairment.
The impairment test shall be conducted on goodwill in combination with related asset groups or asset group portfolios. When conducting impairment test upon related asset groups or asset group portfolios including goodwill, if there is any sign of impairment, the impairment test shall be conducted first on the asset groups or asset group portfolios excluding goodwill to calculate recoverable amount, compare with related book value, and recognize the corresponding impairment loss. Then the test should be conducted on the asset groups or asset group portfolios including goodwill to compare the book value (including the book value part of the apportioned goodwill) of the asset groups or asset group portfolios with their recoverable amount. If the recoverable amount of the asset groups or asset group portfolios containing is lower than the book value, the impairment loss of goodwill shall be recognized.
(22) Long-term unamortized expense
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
1. Amortization Method
Long-Term Unamortized Expenses refer to all expenses that company costs but bears in current account period and following account period with more than 1 year of allocation period. Long-Term Unamortized Expenses amortized by stages based on direct method during benefit period.
(23) Employee Compensation
Employee compensation refers to all forms of rewards and compensation that company provides for employee's service or dissolution of labor relation. Employee compensation includes short-term payment, welfare after dismissal; dismiss welfare and other long-term employee welfare.
1. Short-Term Payment
Short-term payment refers to the whole payment that should be paid within 12 months after employee provides annual report of related service, excluding welfare after dismissal and dismisses welfare. The company shall confirm short-term payment as liability during the accounting period of the employee provides service and, in accordance with benefit object with which employee provides service, calculate related asset cost and fees. 2. Welfare after Dismissal
Welfare after dismissal refers to all forms of rewards and welfare, after employee's retirement or dissolution with enterprise, provides by company to obtain employee's service after dismissal, except short-term payment and dismiss welfare. The welfare after dismissal is classified into defined contribution plan and defined benefit plan. Welfare defined contribution plans after dismissal is mainly for basic life insurance and unemployment insurance implemented by Labor and Social Insurance Institute of various regions. Except for basic life insurance and unemployment insurance, employees retired after retirement can voluntarily take part in the pension plan established by its company. During the accounting period of worker providing services to the company, the payable deposit amount calculated on the basis of defined contribution plans should be recognized as the liability, and should be credited in current profit and loss or the relevant asset costs.
Company no longer has other payment obligation after paying money regularly in accordance with provisions and pension plans stipulated by state.
3. Dismissal welfare
Dismissal welfare refers to discharging labor relationship with staffs before the expiration of labor contract or giving compensation to encourage staffs to accept redundancy voluntarily. It shall be added to current benefit and loss as incurred.
4. Other Long-Term Employee's Welfare
Other long-term employee's welfare refers to all else long-term employees' welfare except short-term payment, welfare after dismissal and dismissal welfare.
For other long-term employee's welfare in accordance with defined contribution plans, during the accounting period of employees providing services for the company, payable and deposit amount are recognized as liabilities, and are included in current losses and profits or relevant assets costs; Other long-term employee's welfare, on the balance sheet date, independent actuary make an actuary by using expected accumulative welfare unit method,
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
attribute the welfare obligations produced in defined benefit plans into the period when employee provides service and add into current benefit and loss or related asset cost.
(24) Estimated liabilities
1. Recognition standards for estimated liabilities
The obligations related to contingencies, which meet all the following conditions, are recognized by the Company as anticipation liabilities.
The obligation is a current obligation undertaken by the Company;
The fulfillment of the obligation is very likely to cause an outflow of economic interests from the Company; The amount of the obligation can be measured reliably.
2. Measurement method of estimated liabilities
Initial measurement is carried out to anticipation 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 anticipation 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 anticipation liabilities.
(25) Share-based Payment
1. Types of share-based payment
The Company provides equity-settled and cash-settled share-based payment.
2. Recognition of the fair value of equity instruments
For equity instruments such as the granted option, which exist in the active market, the fair value is recognized according to their prices in the active market. For those not existing in the active market, their fair value is recognized by using the option pricing model, which should be selected in consideration of the following factors: a. option exercise price; b. option period; c. the current price of the underlying shares; d. the predicted fluctuation
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
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.
3. 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.
4. Accounting for implementation, modification and termination of share-based payment plans
The Company shall measure the equity-settled share-based payment at the fair value of the granted employee equity instruments. If the equity instruments granted vest immediately, the Company shall include the grant-date fair value of equity instruments into related cost or expense, with a corresponding increase in capital reserve. If the equity instruments granted do not vest until the counterparty completes a specified period of service or achieves a performance condition in the vesting period, the Company shall include the service obtained in the current period into related cost or expense and capital reserved by reference to the grant-date fair value of equity instruments based on the best estimate of the number of vested equity instruments on each balance sheet date during the vesting period. The Company shall not adjust the recognized cost or expense and total equity amount after the vesting date.
The case-settled share-based payment shall be measured by reference to the fair value of the Company's eligible liabilities which is calculated based on shares or other equity instruments. If the equity instruments granted vest immediately, the Company shall include the fair value of eligible liabilities in related cost or expense on the vesting date, with a corresponding increase in liabilities. For the cash-settled share-based payment where the granted options are not exercised until the counterparty completes a specified period of service or achieves a performance condition in the vesting period, the Company shall include the service obtained in the current period into related cost or expense and liabilities by reference to the grant-date fair value of liabilities, based on the best estimate of the number of vested equity instruments on each balance sheet date during the vesting period. The Company shall re-measure the fair value of its liabilities on each balance sheet date and settlement date before settlement of related liabilities, and include liability changes in current profit and loss.
5. Modifications to the terms and conditions on which equity instruments were granted
If a grant of an equity instrument is cancelled 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.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
(26) Other Financial Instruments including Preferred Stock, Perpetual Capital Securities and so on The company, in accordance with the provisions of financial instruments, based on contrast terms and economic essence rather only legal forms of issued preferred stock, perpetual capital securities and other financial instruments, combining with the definitions of financial liability and equity instruments, classified the financial instruments or its components into financial liability or equity instruments during original confirmation:
1. Classify issued financial instruments into financial liability when one of following conditions is satisfied: 1) The contrast obligations of offering cash to other party or other financial asset;
2) The contrast obligations of exchanging financial asset with other party or other financial liability under the adverse conditions;
3) Non-derivative instruments contrast that can be calculated by using enterprise's own equity instruments to calculate; Enterprise's own equity instruments based on variable amount that contrast will offer;
4) Derivative instruments contrast that be calculated by using enterprise's own equity instruments to calculate; enterprise's own equity instruments based on variable amount that contrast will offer; Apart from the cash of fixed amount exchanged with fixed amount of enterprise's own equity instruments;
2. When following conditions are met at the same time, the financial instruments are classified into rights and benefits instruments:
5) The financial instruments don't include paying cash or other financial assets to other parties or contrast obligations of exchanging financial assets or financial debts with other party under the adverse conditions. 6) For financial instruments that are classified into equity instruments, its interest expense or dividend distribution shall be regarded as profit distribution of issuing enterprises. So the such movements of buy-back and writing off as rights and interests and the such as transaction fees as handling charges and commissions shall be deducted from rights and interests.
3. Accounting treatment methods
The interest expense or dividend distribution for financial instruments classified as equity instruments, should be taken as profit distribution of the issuing enterprises, and its repurchase, and cancellation, etc should be taken as equity changes processing, then the handling charge and commission and other transaction fees should be deducted from equity;
The interest expense or dividend distribution for financial instruments classified as financial liabilities, should be in accordance with the principle of borrowing costs for processing, and its profit or loss, etc occurred in repurchase or redemption should be credited in current profit and loss, then the handling charge and commission and other transaction fees should be credited in amount of initial measurement of the issuing instruments.
(27) Income
1. 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
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
interests are likely to flow into the enterprise, and relevant costs incurred or to be incurred can be measured reliably.
The company is specialized in electronic market leasing business, and adopts the straight-line method to recognize the rent received during leasing period as rental income; the income from other business should be recognized as revenue when risk premium is transferred according to the contract.
The deferred method is used for the collection of contract or agreement amounts. If financing is involved, the fair value of contract or agreement amounts receivable shall be recognized at as the revenue from goods sales. 2. Basis for recognition of income from transfer of asset use right
When the economic interests relating to transaction may flow into enterprise and the amount of income can be measured reliably, the amount of income from transfer of asset use should be confirmed according to the following conditions:（原来漏译）
(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.
3. Provide the basis and method to recognize labor service income
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.
Service transaction result can be reliably estimated, it means the following conditions can be met simultaneously: 1) Income amount can be measured reliably;
2) Relevant economic benefits are likely to flow into the company;
3) Transaction completion schedule can be confirmed reliably;
4) The transaction costs incurred and to be incurred can be measured in a reliable way.
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:
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
5) 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.
6) Where it is estimated that the labor services cost incurred cannot be compensated, the labor services cost incurred is recorded into 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.
4. Basis and method to confirm construction contract revenue
(1) When the result of construction contract can be estimated reliably, the relevant contract revenue and costs should be recognized with the percentage of completion method on balance sheet date. Percentage of completion method refers to the method to recognize contract revenue and costs based on contract completion schedule. Contract completion schedule should be confirmed according to the proportion of accumulative total contract cost incurred in total estimated cost of contract.
The result of fixed price contract can be reliably estimated, it means the following conditions are met simultaneously:
7) Total contract revenue can be measured reliably;
8) Relevant economic benefits are likely to flow into the company;
9) The contract costs incurred can be distinguished and measured in a reliable way;
10) Contract completion schedule and the cost to be incurred for the contract completion can be confirmed in a reliable way.
The result of cost plus contract can be reliably estimated, it means the following conditions can be met simultaneously:
11) Relevant economic benefits are likely to flow into the company;
12) The contract costs actually incurred can be distinguished and measured in a reliable way
On balance sheet date, the contract revenue in current period is recognized at the total contract revenue multiplied by the completion schedule and then deducted by accumulative recognized income during the previous accounting periods; Meanwhile, the contract cost in current period is recognized at the total estimated cost of contract multiplied by the completion schedule and then deducted by the accumulative recognized cost during the previous accounting periods. The change, claim for compensation and bonus of contract project shall be recorded into total contract revenue subject to the amount that is likely to bring about income and can be calculated in a reliable way. (2) The construction contract result cannot be estimated reliably, shall be treated as the following situation; 13) If the contract cost can be recovered, the contract revenue shall be recognized according to actual recoverable contract cost, while the contract cost shall be recognized as cost in the current period.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
14) If the contract cost cannot be recovered, it is recognized upon incurrence while no contract revenue is recognized.
(3) If the contract cost exceeds the total contract income, the expected loss shall be recognized as the cost immediately.
5. Transfer of the assets with repurchase conditions
If the Company signs a repurchase agreement when selling products or transferring other assets, whether the products sold meet the conditions for income recognition is judged according to the articles of the agreement. If the repurchase is a financing transaction, the Company does not recognize sales income when delivering products or assets. If the repurchase price is higher than the selling price, interests are accrued for the difference during repurchase period and recorded into financial expenses.
(2) Government subsidies
1. Type
A government subsidy means the monetary or non-monetary assets obtained free by an enterprise from the government, but excluding the capital invested by the government as the owner of the enterprise.
According to the subsidy object specified in the relevant government documents, the government subsidy is classified as asset-related government subsidies and income-related government subsidies.
The asset-related government subsidy refers to the government subsidy acquired by the Company or long-term assets in other forms. The income-related government subsidy refers to the government subsidy that is exclusive of asset-related government subsidy.
2. Recognition of the government subsidy
For relevant conditions that can prove the Company can meet the regulations of financial support policies and expected to be able to receive financial support fund at the end of term, confirm the government subsidies based on the receivable amount. In addition, the government subsidies are confirmed when actually received.
When the government subsidy is the monetary assets, calculate the amount based on the received or receivable assets. For the government subsidy is the non-monetary assets; calculate the amount based on the fair value, the fair value cannot be reliably obtained, measured at its nominal amount (1 Yuan). The government subsidy is calculated by the nominal amount should be directly included in the current profit and loss.
3. Accounting treatment method
The government subsidies related to assets, confirmed as deferred income, are recognized as the current non-operating income based on the asset utilization term of the formation or procurement by stages.
The government subsidies related to profits, used to compensate relevant expenses or losses in later periods, are recognized as deferred profits when they are obtained; the subsidies, used to compensate relevant expenses or losses having occurred, are recognized as the current non-operating income when they are obtained.
When the recognized government subsidy needs to be returned, there is the deferred income balance shall be offset against the carrying amount of deferred income balance, the excess part shall be recognized as the current profit and loss; if there is no related deferred income, recognized directly as the current profit and loss.
(27) Deferred income tax assets and liabilities
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
The deferred tax assets and deferred tax liabilities are calculated and confirmed based on the difference of tax basis and the book value between assets and liabilities (temporary differences). At the balance sheet date, calculate the deferred tax assets and deferred tax liabilities at the applicable tax rate during the period for the expected recovery of assets or settlement of liabilities.
1. Basis for the recognition of deferred incomes tax assets
The company is likely to use for deducting the deductible temporary differences, limited by taxable income can transfer the deductible losses and tax reduction, confirm the deferred tax assets generated by the deductible temporary difference. However, the deferred tax assets generated by initial recognition of assets or liabilities with the following characteristics shall not be recognized: (1) the transaction is not the business combination; (2) the transaction does not affect the accounting profit, also does not affect the taxable income or deductible loss. 2. Basis for recognition of deferred income tax liabilities
The temporary difference between the tax payable not paid in the current period and that in previous periods is recognized by the Company as deferred income tax liabilities, but excluding:
1) The temporary differences formed by initial recognition of goodwill;
2) Transactions or events formed by non-business combination, and temporary differences formed that the transactions or events occur do not affect the accounting profit, and also do not affect the taxable profit (or deductible loss);
3) For taxable temporary differences associated with the subsidiaries, associates investment, the transfer time of temporary differences can be controlled and the temporary differences in the foreseeable future is unlikely to be transferred.
3. An entity shall offset deferred tax assets and deferred tax liabilities if, and only if:
4) the entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
5) 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
If the lease terms substantially transfer all the risks and rewards of ownership of the leased assets to the lessee, the lease is the finance lease, and other leases are the operating lease.
1. Accounting treatment of operating lease
The fee paid by the Company for rented assets is apportioned by the straight-line method in the whole lease term without deduction of the rent-free period and recorded into current expenses. The initial direct expenses related to lease transactions, paid by the Company, are recorded into current expenses.
In case that the leasing party undertakes the lease-related expenses that should be undertaken by the Company, the Company deducts the expenses from the total lease fee and the lease fee after deduction is apportioned in the lease term and recorded into current expenses.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
The lease fee received by the Company from leasing of assets is apportioned by the straight-line method in the whole lease term without deduction of the rent-free period and recorded into the lease income. The initial direct expenses related to lease transactions, paid by the Company, are recorded into current expenses. Those with significant amounts are capitalized and recorded by periods into current profits in the whole lease term according to the same basis for recognition of the lease income.
In case that the Company undertakes the lease-related expenses which should be undertaken by the lessee, the Company deducts the expenses from the total lease income and the lease expenses after deduction are allocated in the lease term.
2. Accounting treatment of financing lease
(1) 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 recorded into accounting expenses. Assets given out under financing lease: (2) Assets leased out under financing lease: The difference between the total residual value, without guarantee, of the financing lease payment receivable and the current value is recognized by the Company on the lease-beginning date as financing profits yet to be realized and as the lease income in future lease periods. The initial direct expenses related to lease transactions are recorded into the initial calculation of financing lease payment receivable and the amount of profits recognized in the lease term is reduced.
(29) Changes of main accounting policies and accounting estimates
1. Changes of accounting policies
Contents and reasons for changes of accounting policies Procedure of approval Remarks Make the retrospective adjustment according to the new
The 6th meeting of the 6th Board of
accounting standards for long-term equity investments, capital
Directors of the Company
reserves and deferred income, etc.
Descriptions of the changes in accounting policies:
The Ministry of Finance promulgated or revised series of enterprise accounting standards in 2014, the Company has implemented the new enterprise accounting standard as required in July 1, 2014, adjust the comparative financial statements in accordance with the provisions of the new convergence guidelines. Impacts on the implementation of the new standards on the comparative financial statements are described below:
(1) Long-term equity investment
1) The Company pursuant to the newly revised Long-term Equity Investment Criteria, incorporate the equity investments which do not have control, joint control or significant influence on the invested entity into the accounting available for sale financial assets based on the original cost method, in which: without the quoted price, fair value, the equity instruments cannot be reliably measured in the active the market are calculated subsequently based on the cost price, other equity instruments are subsequently measured at fair value. The retrospective impacts on above changes in accounting policy are as follows:
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
January 1, 2013
Share-hol
ding
Invested organization Financial assets
proportio Long-term equity Shareholders' equity attributable available for sale
n investment(+/-) to the parent company(+/-)(+/-)
Nanjing Shangsha Co., Ltd 0.68 -280,000.00 280,000.00 --- Anshan Yibai Co., Ltd --- --- --- --- Shenzhen SEG GPS Scientific
12.50 -13,515,392.83 13,515,392.83 --- Navigations Co., Ltd.
Total --- -13,795,392.83 13,795,392.83 --- December 31, 2013
Share-hol
ding
Invested organization Shareholders' equity proportio Long-term equity Financial assets available
attributable to the parent n(%) investment(+/-) for sale(+/-)
company(+/-) Nanjing Shangsha Co., Ltd 0.68 -280,000.00 280,000.00 --- Anshan Yibai Co., Ltd --- --- --- --- Shenzhen SEG GPS Scientific
12.50 -13,515,392.83 13,515,392.83 --- Navigations Co., Ltd.
Kasggar Shenzhen City Co.,
3.03 -20,000,000.00 20,000,000.00 --- Ltd.
合计 --- -33,795,392.83 33,795,392.83 --- (2) Impact on the changes in the financial statement report for the consolidated financial statements
1) The Company pursuant to the revised Accounting Standards for Enterprises No. 30 - Presentation of Financial Statements, adjust the part attributable to other comprehensive income in the original capital reserves, as other comprehensive income items in accordance with the presentation requirements, adjust the presentation by the retrospective adjustment method at the beginning of year, the retroactive adjustment impacts are as the following: 01.01.13 31.12.13
Item
Before adjustment After adjustment Before adjustment After adjustment Capital reserve 404,380,330.57 404,100,030.23 404,593,024.05 404,357,267.73 Other comprehensive income 280,300.34 235,756.32 Total 404,380,330.57 404,380,330.57 404,593,024.05 404,593,024.05 2) Pursuant to the revised Accounting Standards for Enterprises No. 30 - Presentation of Financial Statements, the Company shall list the deferred income separately according to the presentation requirements, and adjust the presentation by the retrospective adjustment method at the beginning of year, the retroactive adjustment impacts are as the following:
01.01.13 31.12.13
Item
Before adjustment After adjustment Before adjustment After adjustment
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
01.01.13 31.12.13
Item
Before adjustment After adjustment Before adjustment After adjustment Deferred income 320,080.91 762,246.19 Other non-current liabilities 320,080.91 762,246.19
Total 320,080.91 320,080.91 762,246.19 762,246.19 2. Changes of accounting estimates
No change was made to the main accounting estimates in the current period.
V. Taxes
(3) Main tax types and tax rates imposed on the Company
Tax Category Basis Tax rate Value-added tax Sales of goods 17 Business tax Revenue from rental and interest on loans 5 Urban maintenance and construction tax Turnover tax payable 7 Enterprise income tax Taxable income 25, 15 Income tax rate descriptions of different tax payer:
Except for the income tax rate of Xi'an SEG Electronics Market Co., Ltd. and Xi'an Hairong SEG Electronics Market Co., Ltd. is15%, the income tax rate of the Company and other subsidiaries is25%.
(4) Preferential tax policies and basis
According to the acknowledgment letter[2014] No. 134 of Shaanxi Provincial Development and Reform Commission, the Company's subsidiary Xi'an Hairong SEG Electronics Market Co., Ltd. engaged in the project encouraged by the state, which complies with the preferential policies for western development enterprise income tax, pay the enterprise income tax at15% this year.
According to the acknowledgment letter[2014] No. 060 of Shaanxi Provincial Development and Reform Commission, the Company's subsidiary Xi'an SEG Electronics Market Co., Ltd. engaged in the project encouraged by the state, which complies with the preferential policies for western development enterprise income tax, pay the enterprise income tax at15%this year.
VI. Notes on the Main Items of the Consolidated Financial Statements
Unless specifically noted, the unit for the following amounts is RMB Yuan.
Note 1 Monetary funds
Item Closing balance Opening balance
Cash on hand 602,592.57 496,319.50 Bank deposit 381,404,611.82 335,064,832.27 Other monetary capital 1,049,476.31 1,032,342.04 Total 383,056,680.70 336,593,493.81
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
An amount of RMB 1 million in other monetary capital is the deposit paid for subsidiaries on credit cards. Note 2 Loans to banks and other financial institutions
Item Closing balance Opening balance
Loans to the enterprises of the same industry 30,000,000.00
Less: impairment provision
Total 30,000,000.00
Note 3 Notes receivable
1. Types of notes receivable
Item Closing balance Opening balance
Bank's acceptance bill 84,618.08
Total 84,618.08
2. There is no pledged notes receivable by the end of this period
3. There are no notes receivable endorsed and discounted but still not expired at the end of this period
4. There are no notes converted to receivables due to nonperformance of the drawer at the end of the period. Note 4 Accounts receivable
1. Disclosure of accounts receivable by type
|||||||
|-|-|-|-|-|-|
||Closing balance|||||
||Book balance||Bad debt provision|||
|Type||||||
|||||Percentage||
|||Proportion|||Book value|
||Amount||Amount|of||
|||(%)||||
|||||provision||
|Accounts receivable with a significant||||||
|amount individually, for which bad debt||||||
|provision is separately accrued||||||
|Accounts receivable for which bad debt||||||
|provision is accrued according to||||||
||185,866,040.16|94.08|||185,866,040.16|
|combinations of credit risk||||||
|characteristics||||||
|Accounts receivable with an||||||
|insignificant amount individually, for||||||
||11,699,138.18|5.92|11,699,138.18|100.00|-|
|which bad debt provision is separately||||||
|accrued||||||
|Total|197,565,178.34|100.00|11,699,138.18|5.92|185,866,040.16|

 Continued from above:
|||||||
|-|-|-|-|-|-|
||Opening balance|||||
||Book balance||Bad debt provision|||
|Type||||||
|||||Percentage||
|||Proportion|||Book value|
||Amount||Amount|of||
|||(%)||||
|||||provision||
|Accounts receivable with a significant||||||

Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
|||||||
|-|-|-|-|-|-|
||Opening balance|||||
||Book balance||Bad debt provision|||
|Type||||||
|||||Percentage||
|||Proportion|||Book value|
||Amount||Amount|of||
|||(%)||||
|||||provision||
|amount individually, for which bad debt||||||
|provision is separately accrued||||||
|Accounts receivable for which bad debt||||||
|provision is accrued according to||||||
||204,090,450.12|94.58|4,140.80|0.00|204,086,309.32|
|combinations of credit risk||||||
|characteristics||||||
|Accounts receivable with an||||||
|insignificant amount individually, for||||||
||11,699,138.18|5.42|11,699,138.18|100.00|-|
|which bad debt provision is separately||||||
|accrued||||||
|Total|215,789,588.30|100.00|11,703,278.98|5.42|204,086,309.32|

 Notes on types of accounts receivable:
(1) Accounts receivable with an insignificant amount individually, for which bad debt provision is separately accrued
Closing balance
Percentage
Name of debtor
Accounts receivable Bad debt provision of Reason for provision provision
The accounts receivable are uncollectible because they Jiangsu Unicom 3,092,011.09 3,092,011.09 100.00
have been outstanding for more than five years. The accounts receivable are Shenzhen Shuangxionghui Industrial uncollectible because they 2,160,725.63 2,160,725.63 100.00
Co., Ltd have been outstanding for more than five years. The accounts receivable are Shenzhen LiYuanshun Industrial Co., uncollectible because they 1,906,865.35 1,906,865.35 100.00
Ltd. have been outstanding for more than five years. The accounts receivable are Zhejiang Financial Information Co., uncollectible because they 786,000.00 786,000.00 100.00
Ltd have been outstanding for more than five years. The accounts receivable are uncollectible because they Shanghai Tianci Industrial Co., Ltd. 899,000.00 899,000.00 100.00
have been outstanding for more than five years. The accounts receivable are uncollectible because they Other units 2,854,536.11 2,854,536.11 100.00
have been outstanding too
long.
Total 11,699,138.18 11,699,138.18 100.00
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
(2) Among the combination, accounts receivable for which bad debt provision is accrued by the aging method:
|||||
|-|-|-|-|
||Closing balance|||
|Account receivable aging||||
||Accounts receivable|Bad debt provision|Percentage of provision|
|Less than one year|185,866,040.16|||
|1-2 years||||
|2-3 years||||
|Over 3 years||||
|Total|185,866,040.16|||

2. Bad-debt provision accrued, collected or reversed in the current period
An amount of 4,140.80 Yuan of bad-debt provision is collected during this year.
3. No other accounts receivable are written off in the current period.
4. Top five accounts receivable collected according to the debtor
Percentage in the total
amount of accounts Provision for bad debts Name of debtor Closing balance
receivable at the end of accrued
this period
TOP STAR COMMUNICATION LIMITED 45,082,280.95 22.82
NORIAN DIGTAL TECHNOLOGY (HK)LIMITED 22,715,010.36 11.50
Dalian Dier Computer Co., Ltd. 15,887,560.50 8.04
BORICLE INTL 12,110,255.15 6.13
Shenzhen Runneng Digital Co., Ltd. 7,003,792.89 3.55
Total 102,798,899.85 52.04
5. There are no accounts receivable whose recognition is terminated due to financial assets transfer in the current period.
6. There are no assets and liabilities formed due to transfer of and further involvement in accounts receivable. Note 5 Advances
1. Advances listed by aging
Closing balance Opening balance
Account receivable aging
Proportion Proportion Amount Amount
(%) (%) Less than one year 94,633,317.07 100.00 74,002,910.35 100.00 1-2 years - - --- --- 2-3 years - - --- --- Over 3 years - - --- --- Total 94,633,317.07 100.00 74,002,910.35 100.00 2. Top five advances collected by the debtor
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Percentage in the
total amount of Time of advance
Name of debtor Period-end amount Reason for non-settlement accounts payment
receivable
Tonmac International Electronics Prepaid park rent charge for 19,922,132.67 21.05 Less than one year
(Suzhou) Co., Ltd 2015 Shenzhen Must Power Limited 17,596,316.63 18.59 Less than one year Advance payment for goods Xi'an Gaoke (Group) New West
Prepaid park rent charge for China Industrial Development Co., 10,000,000.00 10.57 Less than one year
2015 Ltd
||
|-|
|China Mobile Communication|
|Group Terminal Limited Company|
|Sinkiang Branch|

Shenzhen Shuojian Industry Co., Ltd 7,505,951.97 7.93 Less than one year Advance payment for goods Total 63,050,548.27 66.62
Note 6 Other accounts receivable
1. Disclosure of other accounts receivable by type
|||||||
|-|-|-|-|-|-|
||Closing balance|||||
||Book balance||Bad debt provision|||
|Type||||||
|||||Percentage||
|||Proportion|||Book value|
||Amount||Amount|of||
|||(%)||||
|||||provision||
|Other accounts receivable with asignificant amount individually, forwhich bad debt provision isseparately accrued||||||
||20,131,835.38|15.78|20,131,835.38|100.00||
|Other receivables for which baddebt provision is accrued accordingto combinations of credit riskcharacteristics||||||
||95,371,972.98|74.74|5,816.71|0.01|95,366,156.27|
|Combination 1|4,516,398.14|3.54|5,816.71|0.13|4,510,581.43|
|Combination 2|90,855,574.84|71.20||-|90,855,574.84|
|Other accounts receivable with aninsignificant amount individually,for which bad debt provision isseparately accrued||||||
||12,102,714.93|9.48|12,102,714.93|100.00||
|Total|127,606,523.29|100.00|32,240,367.02|25.27|95,366,156.27|

 Continued from above:
|||||||
|-|-|-|-|-|-|
||Opening balance|||||
||Book balance||Bad debt provision|||
|Type||||||
|||||Percentage||
|||Proportion|||Book value|
||Amount||Amount|of||
|||(%)||||
|||||provision||
|Other accounts receivable with asignificant amount individually, forwhich bad debt provision is||||||
||20,131,835.38|35.13|20,131,835.38|100.00||

Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
|||||||
|-|-|-|-|-|-|
||Opening balance|||||
||Book balance||Bad debt provision|||
|Type||||||
|||||Percentage||
|||Proportion|||Book value|
||Amount||Amount|of||
|||(%)||||
|||||provision||
|separately accrued||||||
|Other receivables for which bad||||||
|debt provision is accrued according||||||
||25,037,340.99|43.69|3,986.27|0.02|25,033,354.72|
|to combinations of credit risk||||||
|characteristics||||||
|Combination 1|13,439,818.01|23.45|3,986.27|0.03|13,435,831.74|
|Combination 2|11,597,522.98|20.24|-|-|11,597,522.98|
|Other accounts receivable with an||||||
|insignificant amount individually,||||||
||12,134,424.93|21.18|12,134,424.93|100.00|-|
|for which bad debt provision is||||||
|separately accrued||||||
|Total|57,303,601.30|100.00|32,270,246.58|56.31|25,033,354.72|

 Notes on types of other accounts receivable:
(1) Other accounts receivable with a significant amount individually, for which bad debt provision is separately accrued
Closing balance
Percentage
Name of debtor
Other accounts
Bad debt provision of Reason for provision receivable
provision
The accounts receivable are No.1: Yangjiang Yuntong Grease Co., uncollectible because they 8,530,276.35 8,530,276.35 100.00
Ltd have been outstanding for more than five years. The accounts receivable are Creditor's right transferred in by SEG uncollectible because they 5,904,271.52 5,904,271.52 100.00
Communications have been outstanding for more than five years. The accounts receivable are uncollectible because they Shenzhen Lianjing Trade Co., Ltd. 5,697,287.51 5,697,287.51 100.00
have been outstanding for more than five years. Total 20,131,835.38 20,131,835.38 100.00
(2) Among the combinations, accounts receivable for which bad debt provision is computed by aging method:
|||||
|-|-|-|-|
||Closing balance|||
|Account receivable aging||||
||Other accounts receivable|Bad debt provision|Percentage of provision|
|Less than one year|4,471,048.45|-|-|
|1-2 years|3,469.17|173.44|5.00|
|2-3 years|27,337.83|2,734.73|10.00|
|Over 3 years|14,542.69|2,908.54|20.00|
|Total|4,516,398.14|5,816.71|0.13|

Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
(3) Other accounts receivable in Combination 2 include premium for lease and due from related parties.
2. Bad-debt provision accrued, collected or reversed in the current period
Bad debt provision of 21,934.44 Yuan is accrued for the current period; and 51,814.00 Yuan of bad-debt provision is reversed for the current period.
3. No other accounts receivable are written off in the current period.
4. Types of other accounts receivable categorized by nature
Item Closing balance Opening balance
Amount for assignment of creditor's right 28,568,316.79 28,568,316.79 Revolving fund 1,733,960.46 1,991,201.91 Deposit and earnest money 90,906,485.24 14,063,040.84 Others 6,397,760.80 12,681,041.76 Total 127,606,523.29 57,303,601.30 5. Top five other accounts receivable collected by the debtor
Percentage
in the total
Account
amount of Bad debt provision Name of debtor Nature of receivables Closing balance receivable
other Closing balance aging
accounts
receivable
Xi'an Land Reserve Trading Less than
Deposit 60,000,000.00 47.02
Center one year
Shenzhen San Miki Electronics Less than
Deposit 10,000,000.00 7.84
Limited one year
No.1: Yangjiang Yuntong Debt restructuring of
8,530,276.35 Over 5 years 6.68 8,530,276.35 Grease Co., Ltd SEG Orient
Nantong Construction Peasant workers' wage Less than
6,200,000.00 4.86
Engineering Administration margin one year
Creditor's right transferred in Debt restructuring of
5,904,271.52 Over 5 years 4.63 5,904,271.52 by SEG Communications SEG Communications
Total 90,634,547.87 71.03 14,434,547.87 6. There are no accounts receivable involving government subsidies in the current period.
7. There are no other accounts receivable whose recognition is terminated due to financial assets transfer in the current period.
8. There are no assets and liabilities formed due to transfer of and further involvement in other accounts receivable.
Note 7 Inventory
1. Category of inventory
Item Closing balance Opening balance
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Provision for loss Provision for loss
for decline in for decline in
Book balance Book value Book balance Book value value of value of
inventories inventories
Raw materials 80,293.26 80,293.26 90,392.46 --- 90,392.46 Low value
202,195.78 202,195.78 178,788.28 --- 178,788.28 consumables
Commodity
1,039,703.99 1,039,703.99 1,188,478.68 --- 1,188,478.68 stocks
Development
276,959,393.69 276,959,393.69 96,543,262.08 --- 96,543,262.08 cost
Total 278,281,586.72 278,281,586.72 98,000,921.50 --- 98,000,921.50 2. Description on closing inventory balance containing amount of borrowing costs capitalized
Current period decrease Capitalization rate of capitalized Name of inventory Opening Current period Closing
amount items balance increase
Fall in sales Others
balance
recognized in current period Nantong SEG Times
2,885,600.89 2,885,600.89 6.30 Square
Total 2,885,600.89 2,885,600.89
3. Development cost
Expected
Commencement Expected
Project name investment Closing balance Opening balance time completion time
amount
Nantong SEG Times
2013.5 2015.12 600,000,000.00 274,073,792.80 96,543,262.08 Square
Total 274,073,792.80 96,543,262.08 Note 8 Other current assets
Item Closing balance Opening balance
Financial products 322,679,000.00 385,000,000.00 Tax to be deducted and withheld 120,700,762.42 34,925,176.02 Others 163,251.07
Total 443,543,013.49 419,925,176.02 Note 9 Loans and advances issued
1. Loan and advances issued
Item Closing balance Opening balance
Loan principal 458,229,526.30 247,258,481.30 Advance --- --- Less: Impairment provision for loans and
5,712,454.24 3,387,042.58 advances
Total 452,517,072.06 243,871,438.72
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Note 10 Financial assets available for sale
1. Financial assets available for sale
Closing balance Opening balance
Item
Impairment Impairment
Book balance Book value Book balance Book value provision provision
Available-for-sale debt
instruments
Available-for-sale
equity instruments
Measured at fair value 554,642.62 554,642.62 562,531.41 562,531.41 Measured at cost 33,810,392.83 15,000.00 33,795,392.83 33,810,392.83 15,000.00 33,795,392.83 Others
Total 34,365,035.45 15,000.00 34,350,035.45 34,372,924.24 15,000.00 34,357,924.24 2. Available-for-sale financial assets measured at fair value at the end of period
Available-for-sale Available-for-sale debt
Category Others Total equity instruments instruments
Cost of equity
instruments/amortized cost of 90,405.00 90,405.00 debt instruments
Amount changes in fair value
multiple-recorded into other 464,237.62 464,237.62 comprehensive income
Less: accrued amount of
impairment
Fair value 554,642.62 554,642.62 3. Equity instruments measured at cost at the end of period
Share-holding Book balance
proportion in
Invested organization
Current period Current period
the invested
Opening balance Closing balance increase decrease
company(%)
Kashgar Shenzhen City Co., Ltd. 3.03 20,000,000.00 20,000,000.00 Shenzhen SEG GPS Scientific
12.50 13,515,392.83 13,515,392.83 Navigations Co., Ltd.
Nanjing Shangsha Co., Ltd 0.68 280,000.00 280,000.00 Anshan Yibai Co., Ltd. — 15,000.00 15,000.00 Total 33,810,392.83 - - 33,810,392.83 Continued from above:
Impairment provision
Cash dividends Invested organization
Current period Current period
of the current Opening balance Closing balance
increase decrease
period Kashgar Shenzhen City Co., Ltd.
Shenzhen SEG GPS Scientific
Navigations Co., Ltd.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Invested organization Impairment provision Cash dividends of the current Nanjing Shangsha Co., Ltd
period Anshan Yibai Co., Ltd 15,000.00 15,000.00
Total 15,000.00 15,000.00
Note 11 Long-term equity investment
Increases and decreases in the current period
Investment Adjustments in Invested organization Opening balance
Additional Negative profits or losses other investment investment recognized by comprehensive equity method income I. Associates
Shanghai SEG Electronic Market
9,254,501.99 314,459.15
Co., Ltd.
Shenzhen Huakong SEG Co., Ltd. 102,848,308.04 -25,301,808.77
Total 112,102,810.03 -24,987,349.62
Continued from above:
Increases and decreases in the current period
Closing Cash dividends
balance of Accrued
Invested organization
Changes in or profits
Closing balance provision provision for Others
other equity announced for
for impairment
distribution
impairment I. Associates
Shanghai SEG Electronic Market
5,992,172.96 3,576,788.18
Co., Ltd.
Shenzhen Huakong SEG Co., Ltd. 77,546,499.27
Total 5,992,172.96 - - 81,123,287.45
Note12 Investment properties
1. Investment properties
Houses and Construction in
Item Land use right Total buildings progress
I. Original book value
1. Opening balance 705,673,301.76 5,237,512.49 710,910,814.25 2. Current period increase
Outsourcing
Inventories/fixed assets/transfer-in of
construction in progress
Enterprise merger increase
Investment by shareholder
Other transfer-in
3. Amount decrease in current period
Disposal
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Houses and Construction in
Item Land use right Total buildings progress
Other transfer-out
4. Closing balance 705,673,301.76 5,237,512.49 710,910,814.25 II. Accumulated depreciation
(amortization)
1. Opening balance 227,661,739.56 1,731,592.86 229,393,332.42 2. Current period increase 18,833,965.36 120,633.69 18,954,599.05 Provision or amortization 18,833,965.36 120,633.69 18,954,599.05 Enterprise merger increase
Other transfer-in
3. Amount decreased in current period
Disposal
Other transfer-out
4. Closing balance 246,495,704.92 1,852,226.55 248,347,931.47 III. Impairment provision
1. Opening balance
2. Current period increase
Provision
Enterprise merger increase
Other transfer-in
3. Amount decreased in current period
Disposal
Other transfer-out
4. Closing balance
IV. Book value
1. Ending book value 459,177,596.84 3,385,285.94 462,562,882.78 2. Opening book value 478,011,562.20 3,505,919.63 - 481,517,481.83 2. Details of investment properties
Net value of investment Organizations holding investment properties Projects of investment properties
properties
The second, fourth and fifth floors of SEG
Shenzhen SEG Co., Ltd. 239,632,855.59 Plaza
Shenzhen SEG Co., Ltd. Part of floors of Modern Window building 53,355,917.11 Shenzhen SEG Co., Ltd. Other houses 1,930,198.28 Shenzhen SEG Baohua Enterprise Development
Tower A, B of Baohua Building 35,081,842.59 Co., Ltd.
Shenzhen SEG Industrial Investment Co., Ltd. Part of floors of Modern Window building 2,789,780.80 Changsha SEG Development Co., Ltd. Changsha SEG 129,772,288.41 Total 462,562,882.78
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Note 13 Original price and accumulated depreciation of fixed assets
1. Fixed assets
Transportation
Item Houses and buildings Machinery equipment Electronic equipment Other equipment Total vehicles
I. Total original book value
1. Opening balance 48,303,175.02 29,758,716.85 5,706,211.24 30,747,005.64 2,238,477.16 116,753,585.91 2. Current period increase 1,105,783.10 257,405.58 1,913,496.66 1,370,757.46 4,647,442.80 Acquisition 1,105,783.10 257,405.58 1,913,496.66 1,370,757.46 4,647,442.80 Transfer-in of construction in progress
Enterprise merger increase
Investment by shareholder
Financial lease
Other transfer-in - - 3. Amount decrease in current period 544,227.14 11,800.00 506,124.83 10,969.91 1,073,121.88 Disposal or scrapping 544,227.14 11,800.00 506,124.83 10,969.91 1,073,121.88 Financial lease
Other transfer-out
4. Closing balance 48,303,175.02 30,320,272.81 5,951,816.82 32,154,377.47 3,598,264.71 120,327,906.83 II. Accumulated depreciation
1. Opening balance 25,771,055.49 26,884,848.57 2,564,323.82 18,174,975.70 1,481,727.50 74,876,931.08 2. Current period increase 800,541.89 1,838,360.66 699,989.27 1,206,421.68 550,111.04 5,095,424.54 Provision 800,541.89 1,838,360.66 699,989.27 1,206,421.68 550,111.04 5,095,424.54 Enterprise merger increase
Other transfer-in
3. Amount decrease in current period 0 543,744.14 11,210.00 489,372.45 8,420.63 1,052,747.22 Disposal or scrapping 543,744.14 11,210.00 489,372.45 8,420.63 1,052,747.22 Financial lease
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Transportation
Item Houses and buildings Machinery equipment Electronic equipment Other equipment Total vehicles
Other transfer-out
4. Closing balance 26,571,597.38 28,179,465.09 3,253,103.09 18,892,024.93 2,023,417.91 78,919,608.40 III. Impairment provision
1. Opening balance
2. Current period increase
Provision
Enterprise merger increase
Other transfer-in
3. Amount decrease in current period
Disposal or scrapping
Financial lease
Other transfer-out
4. Closing balance
IV. Aggregate book value
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
2. There are no fixed assets that are temporarily idle at the end of the period.
3. There are no fixed assets rented by financial lease at the end of the period
4. There are no fixed assets obtained through operating lease at the year-end.
5. Period-end fixed assets not gaining the property right certificate
Item Book value Reason for not gaining the property right certificate
Houses and buildings 1,359,123.04 Qualification procedures not complete Total 1,359,123.04
Note 14 Intangible assets
1. Intangible assets
Item Land use right Outsourced software Total
I. Total original book value
1. Opening balance 159,759.24 2,264,853.00 2,424,612.24 2. Current period increase 4,500.00 4,500.00 Acquisition 4,500.00 4,500.00 InternalR&D
Enterprise merger increase
Investment by shareholders
Other transfer-in
3. Amount decrease in current period
Disposal
Other transfer-out
4. Closing balance 159,759.24 2,269,353.00 2,429,112.24 II. Accumulated amortization
1. Opening balance 51,995.03 1,485,715.75 1,537,710.78 2. Current period increase 2,759.76 233,054.16 235,813.92 Provision 2,759.76 233,054.16 235,813.92 Enterprise merger increase
Other transfer-in
3. Amount decrease in current period
Disposal
Other transfer-out
4. Closing balance 54,754.79 1,718,769.91 1,773,524.70 III. Impairment provision
1. Opening balance
2. Current period increase
Provision
Enterprise merger increase
Other transfer-in
3. Amount decrease in current period
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Item Land use right Outsourced software Total
Disposal
Other transfer-out
4. Closing balance
IV. Aggregate book value
1. Ending book value 105,004.45 550,583.09 655,587.54 2. Opening book value 107,764.21 779,137.25 886,901.46 Note 15 Goodwill
1. Original book value of goodwill
Current period increase Current period decrease
Name of the invested
Formed by
organization or the item Opening balance Closing balance enterprise …… Disposal ……
contributing to a goodwill
merger
Changsha SEG
10,328,927.82 10,328,927.82 Development Co., Ltd.
Total 10,328,927.82 10,328,927.82 (I) Goodwill is measured as the difference on the acquisition date between the costs of the enterprises merger not under common control over the acquirer's interest in the fair value of the identifiable net assets.
2. The goodwill calculation process is as follows:
Item Amount
Investment cost 69,000,000.00 Book value of the net assets of the invested organization 57,508,384.14 Estimated increment of net assets 93,383,233.24 Deferred income tax liabilities incurred by the estimated increment of net assets 23,345,808.30 Fair value of the net assets of the invested organization 127,545,809.08 Shareholding proportion in the invested organization 46.00% The difference caused when the investment cost is more than the recognizable net assets of
10,328,927.82 the invested organization, 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.
Note 16 Long-term expenses to be amortized
Current period
Current period
Item Opening balance amortization Other decrease Closing balance increase
amount
Decoration charges 43,122,826.78 20,602,625.22 14,801,974.38 48,923,477.62 Firefighting renovation 280,819.11 0.00 169,064.28 111,754.83
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Current period
Current period
Item Opening balance amortization Other decrease Closing balance increase
amount
Land price of Tower B and
775,158.15 0.00 41,712.60 733,445.55 supporting facilities fee
Total 44,178,804.04 20,602,625.22 15,012,751.26 49,768,678.00 Note 17 Deferred income tax assets and liabilities
1. Deferred income tax assets not offset
Closing balance Opening balance
Item
Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference assets difference assets Asset impairment provision 32,658,252.58 8,164,563.16 32,709,956.58 8,177,489.16 Profit unrealized by internal
transaction
Deductible losses
Payroll payable
Technological development expense
Accrued expenses
Estimated liabilities
Government subsidies recorded into
9,500,000.00 2,375,000.00
deferred income
Total 42,158,252.58 10,539,563.16 32,709,956.58 8,177,489.16 2. Deferred income tax liabilities not offset
Closing balance Opening balance
Item
Taxable temporary Deferred income tax Taxable temporary Deferred income tax differences liabilities differences liabilities Assets assessment appreciation for
enterprise merger not under common 67,877,937.66 16,969,484.39 72,313,641.24 18,078,410.29 control
Changes in fair value of
464,237.62 116,059.41 472,126.44 118,031.61 available-for-sale financial assets
Changes in the fair value of
held-for-trading financial assets
Changes in fair value of financial
assets designated as the financial
assets at fair value through profit and
loss
Changes in fair value of investment
properties
Changes in fair value of productive
biological asset
Total 68,342,175.28 17,085,543.80 72,785,767.68 18,196,441.90 3. Deductible temporary differences of unrecognized deferred income tax assets
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Item Closing balance Opening balance Asset impairment provision 11,296,252.62 11,278,568.98 Estimated liabilities
Deductible losses 39,063,382.24 43,425,688.98 Total 50,359,634.86 54,704,257.96 Note: State that the deductible temporary differences and deductible losses are not recognized because it is uncertain to make sufficient taxable income in the future.
4. The deductible losses of deferred income tax assets that are not recognized will come due in the following years:
Item Closing balance Opening balance Remarks
Year 2014 - 6,621,227.68
Year 2015 - ---
Year 2016 13,071,134.55 16,667,858.70
Year 2017 7,431,196.64 7,431,196.64
Year 2018 11,864,843.19 12,705,405.96
Year 2019 6,696,207.86
Total 39,063,382.24 43,425,688.98
Note 18 Other non-current assets
Type& Content Closing balance Opening balance
Advance for purchasing software 520,000.00
Advance for e-market project funds 4,135,063.54
Total 4,655,063.54
Note 19 Short-term borrowing
1. Classification of short-term borrowings
Item Closing balance Opening balance
Pledge loans 59,246,687.38
Mortgage loans 100,000,000.00
Guaranteed loans 30,000,000.00 70,000,000.00 Total 189,246,687.38 70,000,000.00 2. There are no short-term borrowings overdue and outstanding in the current period
3. Hostage for pledge loans is the export rebates of the Company's wholly-owned subsidiary Shenzhen SEG E-Commerce Co., Ltd.
Note 20 Accounts payable
Item Closing balance Opening balance
Trade accounts payable 195,385,013.38 178,892,539.27 Others 4,744,638.54 2,858,603.21 Total 200,129,651.92 181,751,142.48
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Note 21 Advances from customers
1. Advances
Item Closing balance Opening balance
Brand royalty advances 9,390,743.64 8,161,586.03 Rent advances 136,482,047.49 170,489,645.95 Advances on sales 27,013,851.48 22,804,276.44 Advertisement fee advances 6,353,263.26 5,708,981.48 Others 3,819,405.44 1,520,000.00 Total 183,059,311.31 208,684,489.90 Note 22 Payroll payable
1. Payroll payables
Current period Current period
Item Opening balance Closing balance increase decrease
Short-term remuneration 16,651,068.19 92,673,539.12 90,604,874.00 18,719,733.31 Post-employment benefits- defined
414,314.09 4,731,412.60 5,006,616.67 139,110.02 contribution plans
Total 17,065,382.28 97,404,951.72 95,611,490.67 18,858,843.33 2. Short-term remuneration
Current period Current period
Item Opening balance Closing balance increase decrease
Wages, bonuses, allowances and
14,095,932.51 84,748,706.16 82,190,286.29 16,654,352.38 subsidies
Welfare expense of employee 2,029,590.59 2,029,590.59 - Social insurance premiums 48,560.48 1,719,349.22 1,751,411.54 16,498.16 Including: medical insurance
45,701.76 1,518,363.58 1,553,770.80 10,294.54 premium
Including: 12,299.70 6,660.00 5,639.70 Work injury insurance 1,030.54 77,693.55 78,458.71 265.38 Maternity insurance 1,828.18 110,992.39 112,522.03 298.54 Housing fund 1,266,226.48 2,235,213.87 2,342,155.73 1,159,284.62 Labor union expenditures 695,916.72 1,400,456.84 1,478,658.14 617,715.42 Short-term accumulated
- compensated absences
Short-term profit (bonus) -sharing
- plan
Other short-term remunerations 544,432.00 540,222.44 812,771.71 271,882.73 Total 16,651,068.19 92,673,539.12 90,604,874.00 18,719,733.31 3. Defined contribution plans
Current period Current period
Item Opening balance Closing balance increase decrease
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Current period Current period
Item Opening balance Closing balance increase decrease
Pension insurance 51,020.63 3,415,486.65 3,457,219.20 9,288.08 Unemployment insurance premium 3,293.46 177,443.49 180,073.52 663.43 Corporate annuity payment 360,000.00 1,138,482.46 1,369,323.95 129,158.51 Total 414,314.09 4,731,412.60 5,006,616.67 139,110.02 Note 23 Taxes payable
Taxes and fees Closing balance Opening balance
Value-added tax 1,659,452.21 1,888,195.42 Business tax 1,028,150.77 1,531,012.70 Enterprise income tax 32,336,241.19 28,888,087.03 Individual income tax 1,098,931.96 1,039,647.28 Urban maintenance and construction tax 720,549.53 1,142,327.32 Education surtax 461,020.60 783,608.53 Housing property tax 1,721,703.23 1,597,968.75 Stamp tax and water fund 254,539.95 211,126.00 Others 165,107.03 82,919.18 Total 39,445,696.47 37,164,892.21 Note 24 Interest payable
Item Closing balance Opening balance Interest payable on short-term loans 232,749.99
Short-term financing bond accrued interest payable 10,062,500.66
Total 10,295,250.65
Note 25 Dividends payable
Reason for not making Item Closing balance Opening balance
payment for over one year Ordinary stock dividends 1,717,882.74 1,317,296.42
Total 1,717,882.74 1,317,296.42
Note 26 Other payables
1. Other payables listed by nature of payables
Nature of payables Closing balance Opening balance Deposit and earnest money 119,826,258.74 105,890,078.80 Maintenance cost of central air-conditioning and special
11,754,618.52 10,405,170.82 maintenance fund
Receipts under custody 13,624,148.51 12,032,973.77 Financing of related parties 57,653,186.81 5,200,000.00 Electronics market utilities and rentals payable 19,858,574.55 11,470,630.10
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Nature of payables Closing balance Opening balance Others 22,087,615.93 19,190,965.32 Total 244,804,403.06 164,189,818.81 Note 27 Other current liabilities
Item Closing balance Opening balance
Short-term financing bond payable 250,000,000.00
Total 250,000,000.00
1. Increase and decrease of short-term financing bond payable
Bond name Book value Issuing date Bond term Issue amount Opening balance Short-term financing
100.00 15.05.14 365 days 250,000,000.00
bond
Total 250,000,000.00
Continued from above:
Amortization of
Issuance in the Interests accrued at Repayment in the
Bond name premiums and Closing balance current period book value current period
discounts
Short-term financing
250,000,000.00 10,062,500.66 250,000,000.00 bond
Total 10,062,500.66 250,000,000.00 Note 28 Deferred income
Current period Current period
Item Opening balance Closing balance Cause increase decrease
Asset-related government
151,494.61 9,500,000.00 57,834.72 9,593,659.89
subsidy
Income-related
610,751.58 499,040.46 111,711.12
government subsidy
Total 762,246.19 9,500,000.00 556,875.18 9,705,371.01
1. Deferred income related to government subsidies
Amount
Amount of recorded in Related to Opening
Liability items subsidies added in outside-operation Other Changes Closing balance assets/ Related balance
the current period income in the to income current period
Oneline SEG project Related to 151,494.61 57,834.72 93,659.89
subsidy assets Related to Project budget subsidies 610,751.58 499,040.46 111,711.12
income Subsidy for the
Related to construction of Nantong 9,500,000.00 9,500,000.00
assets SEG Electronics Market
Total 762,246.19 9,500,000.00 556,875.18 0 9,705,371.01
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Note 29 Share capital
Increase/Decrease of the year
Capitalization
Item Opening balance
New share
Closing balance Bonus share of public Others Subtotal
offering
reserve
Sum of shares 784,799,010.00 784,799,010.00 Note 30 Capital reserve
Current period Current period
Item Opening balance Closing balance increase decrease
Capital stock premium 322,272,354.94 67,618.87 322,339,973.81 Other capital reserves 302,371.12 --- 82,387,283.91 82,084,912.79
Total 404,357,267.73 369,989.99 --- 404,727,257.72 Capital premium increase in this year refers to the capital stock premium of 67,618.87 Yuan recognized in the Company's consolidated statements at the shareholding ratio of46% after the subsidiary Changsha SEG Development Co., Ltd records the compensation payment to shareholders of 146,997.54 Yuan into capital reserve prior to receipt of the stock equities purchased by the Company. Increase in other capital reserves refers to the proceeds of 302,371.12 Yuan from sales of fractional shares received from China Securities Depository and Clearing Company Limited.
Note 31 Other comprehensive income
Amount incurred in the report period
Less: amount
recorded in
Amount other
incurred comprehensive Attributable
Attributable
Opening
before income in Less: to the
Closing Item
to minority
balance
income previous Income parent
balance shareholders
tax in the period and tax company
after tax
current transferred in after tax
period profit and loss
in current
period
1.Other comprehensive income
cannot reclassified into profit
and loss in future
1) Changes generated by
re-measuring and redefining net
liabilities or net assets in benefit
plan
2) Proportion calculated by the
equity method in other
comprehensive income not to be
reclassified into profit and loss
in subsequent accounting
periods of invested company
2. Other comprehensive income
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Amount incurred in the report period
Less: amount
recorded in
Amount other
incurred comprehensive Attributable
Attributable
Opening
before income in Less: to the
Closing Item
to minority
balance
income previous Income parent
balance shareholders
tax in the period and tax company
after tax
current transferred in after tax
period profit and loss
in current
period
to be reclassified in profit and
loss in future
Proportion calculated by the
equity method in other
comprehensive income to be
reclassified into profit and loss
upon satisfaction of specified
conditions in subsequent
accounting periods of invested
company
2. (2) Profit or loss from change
of the fair value of financial 235,756.32 -7,888.79 -1,972.20 -3,939.27 -1,977.32 231,817.05 assets available for sale
Total of other comprehensive
235,756.32 -7,888.79 -1,972.20 -3,939.27 -1,977.32 231,817.05 income
Note 32 Surplus public reserve
Current period Current period
Item Opening balance Closing balance increase decrease
Statutory surplus reserve 102,912,835.67 102,912,835.67 Total 102,912,835.67 102,912,835.67 Note 33 Retained earnings
Item Amount Accrual/Distribution Rate Before adjustment undistributed profits of the end of the
-42,080,494.64 —
previous period
After adjustment total period-beginning undistributed profits
—
(+ for increase, - for decrease)
After adjustment period-beginning undistributed profit -42,080,494.64 —
Plus: Plus: Net profit attributable to owners of the parent
47,403,384.49 —
company
Less: Accrual of statutory surplus reserve
Accrual of free surplus reserve
Accrual of reserve fund
Accrual of enterprise development fund
Accrual of bonus and welfare fund
Ordinary share dividends payable
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Item Amount Accrual/Distribution Rate Ordinary share dividends converted to share capital
Preferred stock dividend
Other distributions to shareholders
Capital redemption
Distribution of other profits
Plus: Surplus public reserve compensating losses
Changes generated by carrying over the re-measured and
redefined net liabilities or net assets in the benefit plan
Other interior carry-over of owner's equity
Year-end undistributed profits 5,322,889.85
Note 34 Operating revenue and operating cost
1. Operating revenue and operating cost
Amount incurred in the report period Amount incurred in the previous period Item
Income Cost Income Cost Main businesses 662,288,806.93 555,763,805.28 578,404,784.64 480,454,501.23 Other businesses 19,055,114.06 5,180,652.50 18,953,473.18 5,956,684.52 2. Main operating businesses (by industry)
Amount incurred in the report period Amount incurred in the previous period Name of company
Operating income Operating cost Operating income Operating cost (1) Industry --- --- (2) Trade 280,659,908.96 273,086,775.55 221,129,162.14 217,236,010.56 (3) Real estate --- --- (4) Leasing and others 381,628,897.97 282,677,029.73 357,275,622.50 263,218,490.67 Total 662,288,806.93 555,763,805.28 578,404,784.64 480,454,501.23 3. Operating income of top five customers of the Company
Proportion in the total operating income of Client Name Total operating income
the Company(%)
Shenzhen Runneng Digital Co., Ltd. 110,510,446.52 16.22 Shenzhen Wodewo Trading Co., Ltd. 39,288,132.58 5.77 Shenzhen Comnet Technology Co., Ltd. 21,296,350.41 3.13 Shenzhen Nanfang Yunhe Technology Co., Ltd. 17,186,953.52 2.52 Beijing Rephen Lihongqing Trading Co., Ltd 7,353,056.07 1.08 195,634,939.10 28.72 Note 35 Operating tax and surcharges
Item Amount incurred in the report period Amount incurred in the previous period Business tax 23,430,459.38 20,891,719.44 Urban maintenance and construction tax 1,700,075.86 1,543,932.03
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Item Amount incurred in the report period Amount incurred in the previous period Education surtax 1,265,708.52 1,092,357.09 Others 216,391.37 139,530.13 Total 26,612,635.13 23,667,538.69 Note 36 Financing cost
Amount incurred in the report Amount incurred in the previous Category
period period
Interest expenses 17,742,811.44 89,863.01 Less: Interest income 6,804,715.70 11,256,266.41 Loss on exchange -2,273,683.31 -153,347.82 Commission 504,231.17 831,661.53 Total 9,168,643.60 -10,488,089.69 Note 37 Loss from asset impairment
Item Amount incurred in the report period Amount incurred in the previous period Loss from bad debt -34,020.36 -2,503,617.76 Impairment losses on loans and advances 2,325,411.66 1,367,443.14 Total 2,291,391.30 -1,136,174.62 Note 38 Investment income
1. Details on investment income
Amount incurred in the report Amount incurred in the Item
period previous period Long-term equity investment income by the cost method 0.00 --- Long-term equity investment income by the equity method -24,987,349.62 -3,857,446.81 Income from disposal of long-term equity investments 0.00 1,860,737.50 Income during the possession of held-for-trading financial assets 0.00 --- Income from held-to-maturity investments 0.00 --- Income during the possession of available-for-sale financial assets 16,991.24 20,025.39 Income from disposal of held-for-trading financial assets 0.00 --- Income from held-to-maturity investments 0.00 --- Income from available-for-sale financial assets 0.00 --- Others (Financial products) 31,198,391.83 15,054,492.51 Total 6,228,033.45 13,077,808.59 Note 39 Non-operating income
Amount recorded into current Amount incurred in the report Amount incurred in the
Item non-recurring gains and period previous period
losses
Total gains on disposal of non-current
21,274.83 44,307.25 21,274.83 assets
Including: Profit from disposal of
21,274.83 44,307.25 21,274.83 fixed assets
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Profit from disposal of intangible
0 --- 0 assets
Government subsidies 1,554,585.78 1,117,834.72 1,554,585.78 Liquidated damages 1,152,807.95 479,280.43 1,152,807.95 Others 406,587.44 884,884.30 406,587.44 Total 3,135,256.00 2,526,306.70 3,135,256.00 1. Government subsidies recorded into current gains and losses
Amount incurred in the elated to assets
Subsidy projects
report period Related to income
Special industrial development fund 491,000.00 Related to income
Subsidies for online SEG projects 57,834.72 Related to assets
Project budget subsidies 499,040.46 Related to income
Funds for guiding the development of service industry 500,000.00 Related to income
Others 6,710.60 Related to income
Total 1,554,585.78
Note 40 Non-operating expenses
Amount recorded into Amount incurred in the Amount incurred in the
Item current non-recurring gains report period previous period
and losses Total loss from disposal of non-current
14,799.49 94,416.29 14,799.49 assets
Including: Loss from disposal of fixed assets 14,799.49 92,848.19 14,799.49 Loss from disposal of intangible assets 0.00 1,568.10 0.00 Donation expenses 83,000.00 120,000.00 83,000.00 Abnormal loss 0 --- 0 Compensation for loss 49,382.00 --- 49,382.00 Others 928,572.43 31,657.92 928,572.43 Total 1,075,753.92 246,074.21 1,075,753.92 Note 41 Income tax
1. Income tax
Item Amount incurred in the report period Amount incurred in the previous period Income tax of the current period 36,558,413.93 31,961,753.92 Deferred income tax -3,470,999.90 492,006.97 Total 33,087,414.03 32,453,760.89 2. Accounting profit and adjustment process of income tax expense
Item Amount incurred in the report period Total profit 110,784,734.85 Income tax expense calculated at statutory/applicable tax rate 27,696,183.71 Impact of different tax rates adopted by subsidiaries -1,097,225.63
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Item Amount incurred in the report period Impact of adjustment of income tax rates in previous period -661,917.10 Impact of nontaxable income 6,316,544.85 Impact of nondeductible cost, expenses and loss 1,628,825.02 Impact of deductible loss adopting deferred income tax assets not recognized in
-1,373,048.89 previous period
Impact of deductible temporary difference or deductible loss of deferred income tax
1,674,051.97 assets not recognized in current period
Government subsidies received (not listed in non-operating income) 2,375,000.00 Deferred income tax -3,470,999.90 Income tax 33,087,414.03 Note 42 Notes on the cash flow statement
1. Other cash received concerning operating activities
Amount incurred in the previous Item Amount incurred in the report period
period
Incomings and outgoings 49,899,809.43 49,459,110.05 Goods payment collected from tenants 278,226,239.78 323,601,666.90 Interest income 6,804,715.70 11,256,266.41 Non-operating income 3,077,421.28 2,367,079.96 Total 338,008,186.19 386,684,123.32 2. Other cash paid concerning operating activities
Amount incurred in the previous Item Amount incurred in the report period
period
Payment of bidding deposit of land 60,000,000.00
Incomings and outgoings 36,450,341.99 32,810,317.53 Goods payment paid for tenants 274,400,400.19 325,941,879.50 Cash expenses 21,205,139.85 22,648,592.92 Non-operating expenses 1,060,954.43 144,075.51 Total 393,116,836.46 381,544,865.46 3. Other cash received concerning investing activities
Amount incurred in the previous Item Amount incurred in the report period
period
Asset-related government subsidy 9,500,000.00
Total 9,500,000.00
4. Other cash paid concerning investing activities
Amount incurred in the previous Item Amount incurred in the report period
period
Net cash received from disposal of subsidiaries 2,044,318.82 Total 2,044,318.82
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
5. Other cash received concerning financing activities
Amount incurred in the previous Item Amount incurred in the report period
period
Cash received from disposal of fractional shares 302,371.12
(5) Interbank financing of related parties 72,650,000.00 25,000,000.00 Total 72,952,371.12 25,000,000.00 6. Other cash paid concerning financing activities
Amount incurred in the previous Item Amount incurred in the report period
period
(5) Interbank financing of related parties 20,000,000.00 20,000,000.00 Payment of cash deposit 1,000,000.00 Loan interests paid to related party 295,068.50 89,863.01 Payment for issuance of short-term financing bonds 742,500.00
Total 21,037,568.50 21,089,863.01 Note 43 Supplementary information to the cash flow statement
1. Supplementary information to the cash flow statement
Amount incurred in the report Amount incurred in the Item
period previous period 1. Reconciliation of net profit to cash flows of operating activities
Net profit 77,697,320.82 72,798,945.55 Plus: Asset impairment provision 2,291,391.30 -1,136,174.62 Depreciation of fixed assets, oil& gas assets and consumable
24,050,023.59 23,567,728.20 biological assets
Amortization of intangible assets 235,813.92 281,738.76 Amortization of long-term expenses to be apportioned 15,012,751.26 12,456,564.91 Loss on disposal of fixed assets, intangible assets, and other
-6,475.34 50,109.04 long-term assets ("-" for profit)
Loss on discard of fixed asset ("-" for profit) --- Loss on change of fair value ("-" for profit) --- Financial expenses("–" for income) 17,742,811.44 89,863.01 Income from investment ("-" for loss) -6,228,033.45 -13,077,808.59 Decrease in deferred tax assets("–" for increase) -2,362,074.00 1,600,932.87 Increase in deferred tax liabilities("–" for decrease) -1,108,925.90 -1,108,925.90 Inventory decrease("–" for increase) -180,280,665.22 -95,285,797.96 Decrease in accounts receivable relating to operating activities("–"
-77,682,986.62 -161,173,280.12 for increase)
Increase in accounts payable relating to operating activities("–" for
-297,294,572.74 38,405,558.15 decrease)
Others --- Net cash flow from operating activities -427,933,620.94 -122,530,546.70 Investment and financing activities not Involving cash receipts and ---
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Amount incurred in the report Amount incurred in the Item
period previous period payments
Conversion of debt into capital --- Convertible bonds due within one year --- Fixed assets acquired by financing lease --- Net change in cash and cash equivalents --- Closing balance 382,056,680.70 335,593,493.81 Less: Opening balance of cash 335,593,493.81 453,132,467.18 Plus: Period-end cash equivalents --- Less: Opening balance of cash equivalents --- Net increase in cash and cash equivalents 46,463,186.89 -117,538,973.37 2. Combination of cash and cash equivalents:
Item Closing balance Opening balance 1. Cash 382,056,680.70 335,593,493.81 Including: Cash on hand 602,592.57 496,319.50 Bank deposits available for payment at any time 381,404,611.82 335,064,832.27 Other monetary capital available for payment at any time 49,476.31 32,342.04 Accounts in the central bank available for payment --- Accounts deposited in the enterprises of the same industry --- Accounts borrowed from the enterprises of the same industry --- 2. Cash equivalents --- Including: Bond investments due within 3 months --- 3. Period-end balance of cash and cash equivalents 382,056,680.70 335,593,493.81 Including: Cash and cash equivalents for which there are restrictions on
the use by the parent company and subsidiaries
Note 44 Assets of which the ownership or right to use is restricted
Item Balance Reason for restriction
Monetary funds 1,000,000.00 Security deposit for credit card payment
Investment properties 56,841,540.45 Pledge for bank loans
Fixed assets 16,450,892.58 Pledge for bank loans
Total 74,292,433.03
Note 45 Foreign currency monetary items
1. Foreign currency monetary items
Ending balance of foreign Ending balance after Item Rate of exchange
currency conversion into RMB Monetary funds
Including: USD 662,762.77 6.1190 4,055,453.39HK$ 240.00 0.78887 191.14 Accounts receivable
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Ending balance of foreign Ending balance after Item Rate of exchange
currency conversion into RMB Including : USD 23,688,505.70 6.1190 144,949,966.38 VII. Change of consolidation scope
(1) Merger of the enterprises under the control of a same entity
1. Enterprises merger not under common control in the current period.
(2) Merger of the enterprises under the control of a same entity
1. No enterprises merger not under common control occurred in the current period
(5) Counter purchases in the current year
1. Counter purchase not occurred in the current period
(6) Disposal of subsidiaries
1. No disposal of subsidiaries occurred in the current period
VIII. Equity in other entities
(1) Equity in subsidiaries
1. Composition of enterprise group
Principal place Place of Nature of Share-holding proportion(%) Way of Company name
of business registration business Directly Indirectly acquisition Electronics Established Xi'an SEG Electronic
Xi'an Xi'an market lease 65.00 through Market Co., Ltd.
management investment Shenzhen SEG Electronics Electronics Established Market Management Co., Shenzhen Shenzhen market lease 70.00 through Ltd. management investment Electronics Established Suzhou SEG Electronic
Su Zhou Su Zhou market lease 45.00 through Market Co., Ltd.
management investment Hotel
Shenzhen Mellow Orange management, Established Business Hotel Shenzhen Shenzhen consultancy and --- 66.58 through Management Co., Ltd property investment management
Petty loan
business (pooling
public deposits is
Established Shenzhen SEG Credit Co., prohibited)
Shenzhen Shenzhen 36.00 17.02 through Ltd. within the
investment administrative
region of
Shenzhen.
Shenzhen SEG Shenzhen Shenzhen E-commerce 51.00 Established
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Company name Principal place Place of Nature of Share-holding proportion(%) Way of E-Commerce Co., Ltd. of business registration business actqhuroisuigtiho n investment Market facilities
leasing, property
Shenzhen SEG Electronics management, Established Market Management Co., Nanjing Nanjing sales of 100.00 through Ltd. electronic investment products and
advertisement
Property leasing,
sales of Established Xi'an Hairong SEG
Xi'an Xi'an electronic 51.00 through Electronic Market Co., Ltd.
products and investment advertisement
Electronics Established Wujiang SEG Electronics
Wujiang Wujiang market lease 51.00 through Market Co., Ltd.
management investment Electronics Established Wuxi SEG Electronics
Wuxi Wuxi market lease 51.00 through Market Co., Ltd
management investment Shunde SEG Electronics Electronics Established Market Management Co., Foshan Foshan market lease 100.00 through Ltd management investment Nanning SEG Electronics Electronics Established Market Management Co., Nanning Nanning market lease 100.00 through Ltd. management investment Established Nantong SEG Times Square real estate
Nantong Nantong 100.00 through Development Co., Ltd. development
investment Merger of the Shenzhen SEG Baohua
Property lease enterprises under Enterprise Development Shenzhen Shenzhen 66.58
and management the control of a Co., Ltd.
same entity Investment in Merger of the Shenzhen SEG Industrial industrial and enterprises under Shenzhen Shenzhen 100.00
Investment Co., Ltd. commercial the control of a businesses same entity Merger of the Changsha SEG enterprises under Changsha Changsha Property lease 46.00
Development Co., Ltd. the control of a same entity Established Yantai SEG Times Square real estate
Yantai Yantai 90.00 through Development Co., Ltd. development
investment Nantong SEG Commercial Established Operation Management Co., Nantong Nantong 100.00 through Ltd. investment Established Zhengzhou SEG Digital
Su Zhou Su Zhou 100.00 through Plaza Management Co., Ltd.
investment Xi'an Fengdong New Town real estate Established Xi'an Xi'an 100.00
SEG Times Square development through
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Company name Principal place Place of Nature of Share-holding proportion(%) Way of Properties Co., Ltd. of business registration business aincvqeusitsmitieonnt (1) Reason for difference of shareholding ratio of subsidiaries and proportion of voting rights
The capital structure of Changsha SEG Development Co., Ltd at present is that the Company is the first majority shareholder holding46% shares of Changsha SEG, Jinhong Group Co., Ltd holds40% shares and Huaya Management Co., Ltd holds14% shares, among which, Jinhong Group Co., Ltd and Huaya Management Co., Ltd have no associated relationship with each other. 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.
(2) Basis for controlling the operation of invested company with50% or below voting rights
Half of the directors, the Chairman of the Board, the General Manager, the Chief Financial Officer and the management team of Suzhou SEG Electronics Market Management Co., Ltd are all dispatched by the Company that actually controls the operation of Suzhou SEG, so Suzhou SEG was included into the consolidation scope. 2. Major non-wholly owned subsidiaries
Profit and loss
Equity Dividends paid to Minority
attributable to
proportion of minority shareholders' equity
Company name minority Remarks minority shareholders in the at the end of the
shareholders in the
shareholders current period period
current period
Shenzhen SEG Credit Co., Ltd. 46.98 13,958,747.95 8,592,737.49 83,913,496.56
Changsha SEG Development Co.,
54.00 259,420.73 59,030,516.10
Ltd.
Shenzhen SEG Baohua Enterprise
33.42 8,325,200.09 5,148,000.00 32,197,638.66
Development Co., Ltd.
Total 22,543,368.77 13,740,737.49 175,141,651.32
3. Main financial information of major non-wholly owned subsidiaries
Unit: RMB ten thousand Yuan Closing balance
Company
Non-current Total assets in Non-current
name
Current assets: Current liabilities Total liabilities assets total liabilities
Shenzhen SEG
Credit Co., 42,768,150.12 452,858,389.93 495,626,540.05 313,882,188.08 - 313,882,188.08 Ltd.
Changsha
SEG
4,480,359.54 139,281,931.91 143,762,291.45 17,477,036.50 16,969,484.39 34,446,520.89 Development
Co., Ltd.
Shenzhen SEG
Baohua
Enterprise 84,928,255.69 56,270,653.64 141,198,909.33 44,740,424.26 116,059.41 44,856,483.67 Development
Co., Ltd.
Total 132,176,765.35 648,410,975.48 780,587,740.83 376,099,648.84 17,085,543.80 393,185,192.64
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Continued from above:
Opening balance
Company
Non-current Total assets in Non-current
name
Current assets: Current liabilities Total liabilities assets total liabilities
Shenzhen SEG
Credit Co., 7,086,988.02 244,197,122.79 251,284,110.81 80,961,662.74 80,961,662.74 Ltd.
Changsha SEG
Development 5,605,061.09 148,109,656.20 153,714,717.29 26,947,942.73 18,078,410.29 45,026,353.02 Co., Ltd.
Shenzhen SEG
Baohua
Enterprise 76,087,881.69 53,798,420.09 129,886,301.78 42,927,170.51 118,031.61 43,045,202.12 Development
Co., Ltd.
Total 88,779,930.80 446,105,199.08 534,885,129.88 150,836,775.98 18,196,441.90 169,033,217.88 Continued from above:
Amount incurred in the report period Amount incurred in the previous period Company name
Operating income Net profit Operating income Net profit Shenzhen SEG Credit Co., Ltd. 62,998,793.90 29,712,107.16 43,369,903.00 18,111,251.96 Changsha SEG Development
21,651,924.25 480,408.75 20,130,070.13 207,424.49 Co., Ltd.
Shenzhen SEG Baohua
Enterprise Development Co., 81,708,199.76 24,911,642.59 75,092,904.18 18,649,187.93 Ltd.
Total 166,358,917.91 55,104,158.50 138,592,877.31 36,967,864.38 (2) Equity in joint venture arrangements or associated enterprise
1. Important joint ventures or associated enterprises
Share-holding proportion
Name of joint venture or Place of Place of Nature of Accounting(%)
associated enterprise operation registration business treatment method Directly Indirectly
Shenzhen Huakong SEG Co., Ltd. Shenzhen Shenzhen Manufacturing 22.45 Equity method Shanghai SEG Electronic Market Service
Shanghai Shanghai 35.00 Equity method Co., Ltd. industry
2. Main financial information of important joint ventures
Ending balance/amount incurred in current period
Item
Shanghai SEG Electronic Market Co., Shenzhen Huakong SEG Co., Ltd.
Ltd.
Current assets: 162,798,951.60 30,650,791.15 Non-current assets 258,382,060.97 37,816.64 Assets in total 421,181,012.57 30,688,607.79 Current liabilities 306,029,489.78 20,289,991.11 Non-current liabilities 2,281,336.73
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Ending balance/amount incurred in current period
Item
Shanghai SEG Electronic Market Co., Shenzhen Huakong SEG Co., Ltd.
Ltd.
Total liabilities 308,310,826.51 20,289,991.11 Minority shareholders' equity 29,767,592.47
Shareholders' equity attributable to the parent
83,102,593.59 10,293,666.63 company
Proportion of net assets calculated according to
18,656,532.26 3,602,783.32 shareholding ratio
Adjusting events
Goodwill
Unrealized profit in internal transaction
Others
Book value of equity investment in associated
77,546,499.27 3,576,788.18 enterprise
Fair value in equity investment of public offering 1,759,755,588.42
Operating income 65,682,231.97 21,463,752.09 Net profit -113,131,477.46 898,454.72 Net profit from terminating operation
Other comprehensive income
Total comprehensive income -113,131,477.46 898,454.72 Dividends received by the company from
5,992,172.96 associated enterprise in current period
Continued from above:
Opening balance/Amount incurred in previous period
Item
Shanghai SEG Electronic Market Co., Shenzhen Huakong SEG Co., Ltd.
Ltd.
Current assets: 337,305,515.02 16,121,983.76 Non-current assets 254,292,914.86 35,607,483.87 Total assets in total 591,598,429.88 51,729,467.63 Current liabilities 395,336,847.19 25,286,973.74 Non-current liabilities 456,054.73 - Total liabilities 395,792,901.92 25,286,973.74 Minority shareholders' equity -
Shareholders' equity attributable to the parent
195,805,527.96 26,442,493.89 company
Proportion of net assets calculated according to
43,958,341.03 9,254,872.86 shareholding ratio
Adjusting events
Goodwill
Unrealized profit in internal transaction
Others
Book value of equity investment in associated 102,848,308.04 9,254,501.99
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Opening balance/Amount incurred in previous period
Item
Shanghai SEG Electronic Market Co., Shenzhen Huakong SEG Co., Ltd.
Ltd.
enterprise
Fair value in equity investment of public offering 1,109,411,131.83
Operating income 721,757,334.54 40,771,354.98 Net profit -37,201,394.29 12,840,760.59 Net profit from terminating operation
Other comprehensive income -
Total comprehensive income -37,201,394.29 12,840,760.59 Dividends received by the company from
3,349,766.00 associated enterprise in current period
IX. Fair value
(1) Financial instruments measured at fair value
The Company lists the book values at the three fair value levels as at December 31, 2014 of the financial asset instruments measured at fair value. When the fair value is generally cataloged as three levels, it is based on the lowest level of the three levels to which the important input values belong at the measurement of fair value. Such three levels are defined as follows:
Level 1: the unadjusted price of the same assets or liabilities quoted in the active market at the date of measurement;
Level 2: the input value directly or indirectly observable of the related asset or liability other than the input value at Level 1
Input values at Level 2 including: 1) price of similar asset or liability quoted at the active market; 2) price of the same or similar asset or liability quoted at inactive market; 3) Other observable input values other than the quoted price, including the observable interest rate and yield curve, implied volatility and credit spread etc.; 4) Input value verified at the market etc..
Level 3: non-observable input value of related asset or liability.
(2) Measurement of fair value at end of the period
1. Continuous measurement of fair value
Period-end fair value
Item
Level 1 Level 2 Level 3 Total Financial assets available for
554,642.62 554,642.62 sale
Investment of debt
instruments
Investment of equity
554,642.62 554,642.62 instruments
Other investments
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
X. Related parties and associated transactions
(1) Information on subsidiaries of the Company:
Share-holding
Registered Voting right proportion
Place of Capital proportion Name of parent company Nature of business over the
registration (RMB ten over the Company
thousand Yuan) Company(%)(%)
Comprehensive
Shenzhen SEG Group Co., Ltd. Shenzhen 135,542.00 30.24 30.24 business
1. Shenzhen Municipal People's Government State-owned Assets Supervision and Administration Commission is the final controller of the Company.
(2) For information of the Company's subsidiary, please see (1) Equity in subsidiaries in Note 7 for details (3) Information on the joint ventures and associated enterprises of the Company
For information of important joint venture or associated enterprise of the Company, please see (2) Equity in joint venture arrangement or associated enterprise in Note 8
(4) Information of other related parties
Name of other related parties Relationship between other related parties and the Company Shenzhen SEG Property Development Co., Ltd. Subsidiary of shareholders
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 (7) Related party transaction
1. The transactions among the subsidiaries that have controlling relationship with the Company and have been included in the consolidation scope as well as the transactions between the subsidiaries and the parent company have been offset.
2. Information on associate entrust
1) Entrusted management of the Company
Commencement Termination Pricing basis of Income from entrust Type of
Name of trustor Name of trustee date of date of income from recognized in the entrusted asset
trusteeship trusteeship entrust current period SEG
||
|-|
|Trusteeship|
|Agreement|

Total 200,000.00
3. Information on leases between the Company and related parties
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
2) The Company as the leasee
Rental fee recognized in Rental fee recognized in Name of lessor Type of leased assets
current period previous period The warehouse with its
area of 809.26 square
Shenzhen SEG Group Co., Ltd. 586,200.00 519,800.00 meters on the 8th floor of
SEG Plaza
Total 586,200.00 519,800.00 2) TheCompany’s subsidiary as the leasee
Rental fee recognized in Rental fee recognized in Name of lessor Type of leased assets
current period previous period The 15th floor of SEG
Shenzhen SEG Business Operation Co.,
Plaza, with an area of 502,891.20
Ltd.
687.01 square meters
Total 502,891.20
4. Information on associated guarantee
3) The Company as the guarantor
Has the guarantee Warrantee Amount of guarantee Starting date Ending date
been fulfilled? Two years from the date on which the
Shenzhen SEG Credit Co., Ltd. 50,000,000.00 No principal creditor's right expires
Total 50,000,000.00
5. Interbank financing of related parties
4) Loans to related parties
Related party Amount of loans Starting date Repayment Date Remarks Interests to be calculated Shenzhen SEG Property Development
5,000,000.00 01.01.14 31.03.14 according to days actuallu Co., Ltd.
occupied
Shenzhen SEG Property Development
5,000,000.00 20.01.14 19.04.14 Ditto
Co., Ltd.
Shenzhen SEG Property Development
5,000,000.00 01.04.14 11.06.14 Ditto
Co., Ltd.
Shenzhen SEG Property Development
5,000,000.00 20.04.14 11.06.14 Ditto
Co., Ltd.
Shenzhen SEG Group Co., Ltd. 40,000,000.00 31.12.14 06.01.15 Ditto
Shenzhen SEG Hi-tech Industrial Co.,
17,650,000.00 30.12.14 20.01.15 Ditto
Ltd.
Total 77,650,000.00
Statements on funds borrowed to related parties
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
As of December 31, 2014, interests at an amount of 295,068.50 Yuan was paid to Shenzhen SEG Property Development Co., Ltd; and provision for interests at an amount of 3,186.81 Yuan payable to Shenzhen SEG Hi-tech Industrial Co., Ltd was made.
6. Remuneration for key management（原翻译稿―6‖漏译）
Accrual of this period (Ten thousand Accrual of last period (Ten thousand Item
Yuan) Yuan)
Remuneration of key management 340.20 310.92 7. Accounts receivable from and payable to related parties
(1) Accounts receivable from related parties
Closing balance Opening balance
Project name Related party
Bad debt Bad debt Book balance Book balance
provision provision Other accounts
receivable
Shenzhen SEG Property
12,325.00 --- 52,000.00 --- Development Co., Ltd.
Shenzhen SEG Group Co., Ltd. 214,491.60 --- 214,491.60 --- (2) Accounts payable to related parties
Project name Related party Closing balance Opening balance Dividends
payable
Shenzhen SEG Computers Co., Ltd 543,510.00 444,510.00 Other payables
Shenzhen SEG Group Co., Ltd. 40,000,000.00 200,000.00 Shenzhen SEG Property Development Co.,
5,000,000.00 Ltd.
Shenzhen SEG Hi-tech Industrial Co., Ltd. 17,653,186.81
8. Other related transactions
In 2014, the subsidiaries, i.e. Shenzhen SEG E-commerce Co., Ltd. and Shenzhen SEG High-technology Investment Co., Ltd., carried out the cooperation in financing, and the financing income was 1,035,569.84 Yuan this year.
XI Commitments and contingencies
(1) Major commitments
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
1. Signed or performing or to be performed lease contract and the minimum lease payment to be paid in subsequent years
Xi'an
Shenzhen SEG Shenzhen SEG
Hairong
Xi'an SEG Suzhou SEG Electronics Electronics Wujiang SEG Remaining lease SEG
Electronic Market Electronic Market Market Market Electronics term Electronic
Co., Ltd. Co., Ltd. Management Management Co., Market Co., Ltd. Market Co.,
Co., Ltd. Ltd.
Ltd.
Within one year
(including one 12,875,000.00 16,024,907.88 4,912,813.79 --- --- --- year)
Above one year
but within two
13,125,000.00 16,024,907.88 5,060,198.20 --- --- --- years (including
two years)
Above two years
but within three
13,375,000.00 16,234,383.80 5,212,004.15 --- --- --- years (including
three years)
Over 3 years 48,750,000.00 157,211,677.96 15,137,455.15 --- --- --- Total 88,125,000.00 205,495,877.52 30,322,471.29 Note*1 Note*2 Note*3 (Continued from above)
Nanning SEG Shunde SEG
Remaining lease Wuxi SEG Electronics Zhengzhou SEG Digital Plaza Electronics Market Electronics Market
term Market Co., Ltd Management Co., Ltd. Management Co., Ltd. Management Co., Ltd
Within one year
6,500,000.00 4,320,000.00 --- 13,145,482.73 (including one year)
Above one year but
within two years
8,000,000.00 4,800,000.00 --- 13,054,290.12 (including two
years)
Above two years but
within three years
8,000,000.00 5,040,000.00 --- 13,403,893.21 (including three
years)
Over 3 years 64,000,000.00 43,087,508.73 --- 82,632,739.96 Total 86,500,000.00 57,247,508.73 Note*4 122,236,406.02 Notes:
*1: According to the cooperation agreement between both parties, the annual rent is to be paid by Xi'an Hairong SEG Electronic Market Co., Ltd in an amount equal to70% of its profits from electronic market. Therefore, the amount of future lease payment is uncertain.
*2: Due to adjustment of rent according to CPI, therefore, the amount of future lease payment to be paid by Shenzhen SEG Electronics Market Management Co., Ltd is uncertain.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
*3: According to the cooperation agreement between both parties, the annual housing rental fee is to be paid by Wujiang SEG Electronics Market Co., Ltd in an amount equal to70% of its profit before tax from electronic market. Therefore, the amount of future lease payment is uncertain.
*4: Wuxi SEG Electronics Market Co., Ltd enjoys a rent-free period of 3 years prior to its formal opening, and will pay the housing rental fee (rent) at70% of its profit before tax from electronic market at the fourth year. Therefore, the amount of future lease payment is uncertain.
Except the above commitment issues, as of December 31, 2014, the Company has no other significant undisclosed commitment.
(2) Contingencies existing on balance sheet date
1. Contingencies formed due to providing debt guarantee to outside parties and the financial impact thereof For debt guarantee provided to related parties, see "5) Related-Party Transaction" in Note 10 for details
XII. Events after the balance sheet date
(1) Distribution of profits
It is decided through the meeting of Board of Directors that because the profit attributable to shareholders by the parent company, in 2014 the Company plans not to distribute to the whole shareholders, nor transfer the capital reserve to shares.
The above plan needs to be reviewed at a meeting of shareholders.
(2) Other events after the balance sheet date:
Except the above events after the balance sheet date, as of the date of financial report, the Company has no other significant undisclosed issues outstanding.
XIII. Notes on other important matters
(1) Purchase of financial products with idle funds
Proposal on the Company's Purchase of Financial Products With Idle Funds was deliberated and passed on the second extraordinary general meeting of the Company on July 21, 2014, which provides that the idle funds used by the Company for purchase of financial products cannot exceed 1 billion Yuan.
As of 31.12.14, the amount of financial products purchased by the Company and its subsidiaries is as follows: Unit: RMB ten thousand Yuan Wujiang SEG Shenzhen SEG Baohua Wuxi SEG Xi'an Hairong SEG Shenzhen SEG
Company name Electronics Market Enterprise Development Co., Electronics Market Electronic Market Co., Ltd.
Co., Ltd. Ltd. Co., Ltd Co., Ltd. Amount 19,300.00 1,000.00 6,100.00 1,150.00 1,100.00 Continued from above:
Company name Shenzhen SEG Shenzhen SEG Credit Nanning SEG Electronics Total
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
E-Commerce Co., Co., Ltd. Market Management Co., Ltd.
Ltd.
Amount 3,300.00 77.90 240.00 32,267.90 XIV. Notes on main items in the financial statements of the parent company
Note 1 Accounts receivable
1. Disclosure of accounts receivable by type
|||||||
|-|-|-|-|-|-|
||Closing balance|||||
||Book balance||Bad debt provision|||
|Type||||||
|||||Percentage||
|||Proportion|||Book value|
||Amount||Amount|of||
|||(%)||||
|||||provision||
|Accounts receivable with a||||||
|significant amount individually,||||||
||7,163,876.44|77.29|7,163,876.44|100.00||
|for which bad debt provision is||||||
|separately accrued||||||
|Receivables for which bad debt||||||
|provision is accrued according to||||||
|combinations of credit risk||||||
|characteristics||||||
|Accounts receivable with an||||||
|insignificant amount individually,||||||
||2,105,306.44|22.71|2,105,306.44|100.00||
|for which bad debt provision is||||||
|separately accrued||||||
|Total|9,269,182.88|100.00|9,269,182.88|100.00||

Continued from above:
|||||||
|-|-|-|-|-|-|
||Opening balance|||||
||Book balance||Bad debt provision|||
|Type||||||
|||||Percentage||
|||Proportion|||Book value|
||Amount||Amount|of||
|||(%)||||
|||||provision||
|Accounts receivable with a||||||
|significant amount individually,||||||
||7,163,876.44|77.29|7,163,876.44|100.00||
|for which bad debt provision is||||||
|separately accrued||||||
|Receivables for which bad debt||||||
|provision is accrued according to||||||
|combinations of credit risk||||||
|characteristics||||||
|Accounts receivable with an||||||
|insignificant amount individually,||||||
||2,105,306.44|22.71|2,105,306.44|100.00||
|for which bad debt provision is||||||
|separately accrued||||||
|Total|9,269,182.88|100.00|9,269,182.88|100.00||

Notes on types of accounts receivable:
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
1) Accounts receivable with a significant amount individually, for which bad debt provision is separately accrued at the end of period:
Closing balance
Percentage
Name of debtor
Accounts receivable Bad debt provision of Reason for provision provision
The accounts receivable are uncollectible because they have Jiangsu Unicom 3,092,011.09 3,092,011.09 100.00
been outstanding for more than five years.
The accounts receivable are Shenzhen LiYuanshun Industrial uncollectible because they have 1,906,865.35 1,906,865.35 100.00
Co., Ltd. been outstanding for more than five years.
The accounts receivable are uncollectible because they have Shanghai Tianci Industrial Co., Ltd. 899,000.00 899,000.00 100.00
been outstanding for more than five years.
The accounts receivable are Zhejiang Finance Information uncollectible because they have 786,000.00 786,000.00 100.00
Paging Center been outstanding for more than five years.
The accounts receivable are Sichuan HuiYuan Electronics Co., uncollectible because they have 480,000.00 480,000.00 100.00
Ltd. been outstanding for more than five years.
Total 7,163,876.44 7,163,876.44 100.00
2. Bad-debt provision accrued, collected or reversed in the current period
No bad-debt provision is accrued, collected or reversed in the current period.
3. No receivables are written off in the current period.
4. Top five receivables collected according to the debtor
Percentage in the total
Name of debtor Closing balance amount of accounts Bad-debt provision accrued receivable
Jiangsu Unicom 3,092,011.09 33.36 3,092,011.09 Shenzhen LiYuanshun Industrial Co., Ltd. 1,906,865.35 20.57 1,906,865.35 Shanghai Tianci Industrial Co., Ltd. 899,000.00 9.70 899,000.00 Zhejiang Finance Information Paging Center 786,000.00 8.48 786,000.00 Sichuan HuiYuan Electronics Co., Ltd. 480,000.00 5.18 480,000.00 Total 7,163,876.44 77.29 7,163,876.44 5. There is no accounts receivable whose recognition is terminated due to financial assets transfer in the current period.
6. There are no assets and liabilities formed due to transfer of and further involvement in accounts receivable.
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Note 2 Other accounts receivable
1. Disclosure of other accounts receivable by type
|||||||
|-|-|-|-|-|-|
||Closing balance|||||
||Book balance||Bad debt provision|||
|Type||||||
|||||Percentage||
|||Proportion|||Book value|
||Amount||Amount|of||
|||(%)||||
|||||provision||
|Other accounts receivable with asignificant amount individually, forwhich bad debt provision isseparately accrued||||||
||8,530,276.35|1.96|8,530,276.35|100.00|-|
|Other accounts receivable forwhich bad debt provision isaccrued according to combinationsof credit risk characteristics||||||
||410,454,248.03|94.12|1,200.00|0|410,453,048.03|
|Including: Combination 1|1,168,219.48|0.27|1,200.00|0.10|1,167,019.48|
|Combination 2|409,286,028.55|93.85||-|409,286,028.55|
|Other accounts receivable with aninsignificant amount individually,for which bad debt provision isseparately accrued||||||
||17,118,394.49|3.92|17,118,394.49|100.00|-|
|Total|436,102,918.87|100.00|25,649,870.84|5.88|410,453,048.03|

 Continued from above:
|||||||
|-|-|-|-|-|-|
||Opening balance|||||
||Book balance||Bad debt provision|||
|Type||||||
|||||Percentageofprovision|Book value|
|||Proportion(%)||||
||Amount||Amount|||
|Other accounts receivable with a||||||
|significant amount individually,|8,530,276.35|3.77|8,530,276.35|100.00|0.00|
|for which bad debt provision is||||||
|separately accrued||||||
|Other accounts receivable for||||||
|which bad debt provision is||||||
||200,494,573.07|88.64|600.00||200,493,973.07|
|accrued according to||||||
|combinations of credit risk||||||
|characteristics||||||
|Including: Combination 1|1,011,510.14|0.45|600.00|0.06|1,010,910.14|

Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
||||||||
|-|-|-|-|-|-|-|
||Opening balance||||||
||Book balance|||Bad debt provision|||
|Type|||||||
||||||Percentage|Book value|
|||Proportio|n||||
||Amount|||Amount|||
||||||of||
|||(%)|||||
||||||provision||
|Combination 2|199,483,062.93|88.1|9|---|---|199,483,062.93|
|Other accounts receivable with an|||||||
|insignificant amount individually,|17,170,808.49|7.5|9|17,170,808.49|100.00|0.00|
|for which bad debt provision is|||||||
|separately accrued|||||||
|Total|226,195,657.91|100.0|0|25,701,684.84|11.36|200,493,973.07|

 Notes on types of other accounts receivable:
5) Other accounts receivable with a significant amount individually, for which bad debt provision is separately accrued
Closing balance
Percentage
Name of debtor
Other accounts
Bad debt provision of Reason for provision receivable
provision
The accounts receivable are No.1: Yangjiang Yuntong Grease uncollectible because they 8,530,276.35 8,530,276.35 100.00
Co., Ltd have been outstanding for more than five years. Total 8,530,276.35 8,530,276.35 100.00
6) Other accounts receivable in Combination 1, for which bad debt provision is accrued by the aging analysis method:
|||||
|-|-|-|-|
||Closing balance|||
|Account receivable aging||||
||Other accounts receivable|Bad debt provision|Percentage of provision|
|Less than one year|1,162,219.48|||
|1-2 years||||
|2-3 years||||
|Over 3 years|6,000.00|1,200.00|20.00|
|Total|1,168,219.48|1,200.00|0.10|

 7) Other accounts receivable in Combination 2 include premium for lease, deposit and due from related parties. 2. Bad-debt provision accrued, collected or reversed in the current period
An amount of 51,814.00 Yuan of bad-debt provision is collected for the current period
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
3. No other accounts receivable are written off in the current period.
4. Category of other accounts receivable by nature
Item Closing balance Opening balance
Accounts receivable from related parties 408,087,205.17 198,258,035.55 Amount for assignment of creditor's right 22,664,045.27 22,664,045.27 Spare cash 790,404.70 65,560.70 Deposit and earnest money 1,247,233.78 1,290,784.78 Others 3,314,029.95 3,917,231.61 Total 436,102,918.87 226,195,657.91 5. Top five other accounts receivable collected according to the debtor
Percentage in the Bad debt Account
Nature of total amount of provision Name of debtor Closing balance receivable
payables other accounts Closing aging
receivable balance Nantong SEG Times Square Borrowing and Less than
273,454,674.05 62.70
Development Co., Ltd. interest one year
Borrowing and Less than
Shenzhen SEG E-Commerce Co., Ltd. 60,093,698.62 13.78
interest one year
Shenzhen SEG Industrial Investment Borrowing and Less than
44,088,490.03 10.11
Co., Ltd. interest one year
Xi'an Fengdong New Town SEG Incomings and Less than
30,000,000.00 6.88
Times Square Properties Co., Ltd. outgoings one year
No.1: Yangjiang Yuntong Grease Co., Debt restructuring
8,530,276.35 Over 5 years 1.96 8,530,276.35 Ltd of SEG Orient
Total 416,167,139.05 95.43 8,530,276.35 6. There are no receivable accounts involving government subsidies in the current period.
7. There are no other receivable accounts whose recognition is terminated due to financial assets transfer in the current period.
8. There are no assets and liabilities formed due to transfer of and further involvement in other accounts receivable.
Note 3 Long-term equity investment
Closing balance Opening balance
Nature of payables
Bad debt Bad debt
Book balance Book value Book balance Book value provision provision
Investment to
299,983,526.24 299,983,526.24 261,983,526.24 261,983,526.24 subsidiaries
Investment in
associated
81,123,287.45 81,123,287.45 112,102,810.03 112,102,810.03 enterprise and joint
venture
Total 381,106,813.69 - 381,106,813.69 374,086,336.27 - 374,086,336.27
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
1. Investment to subsidiaries
Provision for
Closing Current impairment
Invested Initial Opening Current period balance of period Closing balance of the
organization investment cost balance increase provision for decrease current
impairment period
Shenzhen SEG
Baohua
Enterprise 18,742,808.93 20,512,499.04 20,512,499.04
Development
Co., Ltd.
Shenzhen SEG
Industrial
23,780,000.00 29,181,027.20 29,181,027.20
Investment Co.,
Ltd.
Changsha SEG
Development 69,000,000.00 69,000,000.00 69,000,000.00
Co., Ltd.
Shenzhen SEG
Electronics
Market 2,100,000.00 2,100,000.00 2,100,000.00
Management
Co., Ltd.
Suzhou SEG
Electronic 1,350,000.00 1,350,000.00 1,350,000.00
Market Co., Ltd.
Xi'an SEG
Electronic 1,950,000.00 1,950,000.00 1,950,000.00
Market Co., Ltd.
Shenzhen SEG
54,000,000.00 54,000,000.00 54,000,000.00
Credit Co., Ltd.
Shenzhen SEG
E-Commerce 15,300,000.00 15,300,000.00 15,300,000.00
Co., Ltd.
Shenzhen SEG
Electronics
Market 20,000,000.00 20,000,000.00 20,000,000.00
Management
Co., Ltd.
Xi'an Hairong
SEG Electronic 1,530,000.00 1,530,000.00 1,530,000.00
Market Co., Ltd.
Wujiang SEG
Electronics 1,530,000.00 1,530,000.00 1,530,000.00
Market Co., Ltd.
Wuxi SEG
Electronics 1,530,000.00 1,530,000.00 1,530,000.00
Market Co., Ltd
Shunde SEG
Electronics
6,000,000.00 6,000,000.00 6,000,000.00
Market
Management
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Provision for
Closing Current impairment
Invested Initial Opening Current period balance of period Closing balance of the
organization investment cost balance increase provision for decrease current
impairment period
Co., Ltd
Nanning SEG
Electronics
Market 8,000,000.00 8,000,000.00 8,000,000.00
Management
Co., Ltd.
Nantong SEG
Times Square
30,000,000.00 30,000,000.00 30,000,000.00
Development
Co., Ltd.
Zhengzhou SEG
Digital Plaza
8,000,000.00 8,000,000.00 8,000,000.00
Management
Co., Ltd.
Xi'an Fengdong
New Town SEG
Times Square 30,000,000.00 30,000,000.00 30,000,000.00
Properties Co.,
Ltd.
Total 292,812,808.93 261,983,526.24 38,000,000.00 0.00 299,983,526.24
2. Investment in associated enterprise and joint venture
Increases and decreases in the current period
investment Adjustments in Invested organization Opening balance
Additional Decrease in profits or losses other investment investment recognized by comprehensive equity method income I.
Shanghai SEG Electronic Market
9,254,501.99 314,459.15
Co., Ltd.
Shenzhen Huakong SEG Co., Ltd. 102,848,308.04 -25,301,808.77
Total 112,102,810.03 -24,987,349.62
Continued from above:
Increases and decreases in the current period
Closing Cash dividends
balance of Accrued
Invested organization
Changes in or profits
Closing balance provision provision for Others
other equity announced for
for impairment
distribution
impairment I.
Shanghai SEG Electronic Market
5,992,172.96 3,576,788.18
Co., Ltd.
Shenzhen Huakong SEG Co., Ltd. 77,546,499.27
Total 5,992,172.96 81,123,287.45
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Note 4 Operating revenue and operating cost
1. Operating revenue and operating cost
Amount incurred in the report period Amount incurred in the previous period Item
Income Cost Income Cost Main businesses 125,263,172.20 76,758,875.18 124,843,963.38 75,283,936.52 Other businesses 460,890.41 379,849.32 --- 2. Main operating businesses (by industry)
Amount of the current year Amount of the previous year
Item
Operating income Operating cost Operating income Operating cost (1) Industry --- --- --- --- (2) Trade --- --- --- --- (3) Real estate --- --- --- --- (4) Leasing and others 125,263,172.20 76,758,875.18 124,843,963.38 75,283,936.52 Total 125,263,172.20 76,758,875.18 124,843,963.38 75,283,936.52 Note 5 Investment income
Amount incurred in the Amount incurred in the Item
report period previous period Long-term equity investment income by the cost method 25,244,873.17 15,214,120.00 Long-term equity investment income by the equity method -24,987,349.62 -3,857,446.81 Income from disposal of long-term equity investments 2,684,748.56 Investment income of financial assets measured at fair value of which
the changes are recorded into current profit and loss during the holding
period
Investment income obtained from disposal of financial assets measured
at fair value of which the changes are recorded into current profit and
loss
Investment income of held-to-maturity investment during the holding
period
Investment income of available-for-sale financial assets during the
holding period
Income from held-to-maturity investments
Income from disposal of financial assets available for sale
Gains generated from residual equity remeasured at fair value after loss
of share-controlling right
Others 30,123,920.48 11,538,625.46 Total 30,381,444.03 25,580,047.21
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
XV. Supplementary Materials
(1) Details on non-recurring gains and losses
Item Amount Remarks Gains and losses from disposal of non-current assets 6,475.34
Tax refund, reduction or exemption upon approval exceeding authorized limits or
without formal documents
Government subsidies recorded into current gains and losses (except those closely
related with corporate business and enjoyed according to national standards or certain 1,554,585.78
quota)
Fund appropriation charges for non-financial entities recorded into current gains and
700,000.00
losses
Gains from the margin between the investment cost of the Company for acquisition of
subsidiaries, joint ventures and joint operation enterprises and the recognizable fair
value of net assets of invested units at the time of acquisition
Loss from transfer of non-monetary assets
Gains and losses from entrusting investment or managing assets
Provision for assets impairment withheld for Force Majeure
Gains and losses from debt restructurings
Expenditures for corporate restructuring, such as expenses for relocation of
employees and for integration
Gains and losses from unfairly priced transactions in which the transaction value
exceeds the fair value
Net current gains and losses of a subsidiary from the period Opening to the date of
merger due to the merger of enterprises under the control of a same entity
Gains and losses from contingency items irrelevant with regular operation of the
Company
Gains and losses from fair value changes by holding of transaction financial assets
and liabilities, except effective hedging business related to regular operation of the
Company, and investment income from disposal of transaction financial assets and
liabilities as well as financial assets available for sale
Transferred-back impairment provision for accounts receivable, for which separate
-
impairment tests are carried out
Gains and losses for external entrusted loans
Gains and losses from fair value changes of investment properties, whose subsequent
measurement is carried out based on the fair value mode
Influence on current gains and losses by one-off adjustment according to tax and
accounting laws and regulations
Trustee fee from entrusted operation 200,000.00
Other non-operating income and expenses except the above-mentioned items 498,440.96
Other gains and losses fitting the definition of non-recurring gains and losses
Influenced amount of income tax -216,991.94
Amount of influence of minority shareholders' equity (after tax) -282,468.32
Total 2,460,041.82
(2) ROE and EPS
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Weighted average Earnings per share
Profit in report period
Return on equity (ROE)(%) Basic EPS Diluted EPS Net profit attributable to common shareholders
3.80 0.0616 0.0616 of the Company
Net profit attributable to common shareholders
of the Company after deduction of -recurring 3.60 0.0585 0.0585 losses and gains
(3) Abnormalities on main items of the financial statements of the Company and notes on reasons
Percentage
Important subjects Closing balance Opening balance Reason for change
change(%)
Loans to banks and other Increase in loans to the enterprises of the 30,000,000.00 -
financial institutions same industry in current period Increase in rents cleared by bills in Notes receivable 84,618.08 -
current period
Increase in security deposit paid in Other accounts receivable 95,366,156.27 25,033,354.72 280.96
current period
Increase in development cost of Nantong Inventory 278,281,586.72 98,000,921.50 183.96
SEG in current period
Loans and advances Increase in scale of loan of subsidiaries 452,517,072.06 243,871,438.72 85.56
issued in current period
Reclassification of prepayments to Other non-current assets 4,655,063.54 electronic market decoration project in current period
Short-term borrowing 189,246,687.38 70,000,000.00 170.35 Increase in bank loans during the year Non-payment of dividends distributed Dividends payable 1,717,882.74 1,317,296.42 30.41
by subsidiaries in current period Increase in rental deposit from newly opened electronic market and the Other payables 244,804,403.06 164,189,818.81 49.10
increase in receivables from related parties
Short-term financing bond issued in Other current liabilities 250,000,000.00 -
current period
Increase in government subsidies Deferred income 9,705,371.01 762,246.19 11.73
received in current period
Increase in interest income due to Interest income 61,496,910.07 40,429,967.84 52.11 increase in the size of the loan in current period
Increase in handling charge and Commissions income 9,573,910.00 2,646,841.51 261.71 commission received in the current period
Increase in borrowings in the current Interest expenses 3,344,972.23 1,714,995.54 95.04
period
Decrease in sales promotion expenses Sale expenses 2,149,313.48 3,630,236.75 -40.79
paid in the current period
Increase in bank loan and issuance of Financing cost 9,168,643.60 -10,488,089.69 -187.42 short-term financing bond in the current period
Loss from asset 2,291,391.30 -1,136,174.62 -301.68 Increase in loan loss accrued in the
Shenzhen SEG Co., Ltd.
Notes to the Financial Statements 2014
Percentage
Important subjects Closing balance Opening balance Reason for change
change(%)
impairment current period and the single provision for accounts receivable in the previous period
Decrease in investment income Investment income 6,228,033.45 13,077,808.59 -52.38 recognized by equity method in the current period
Increase in expenditure of liquidated Non-operating expenses 1,075,753.92 246,074.21 337.17
damages in the current period
Shenzhen SEG Co., Ltd. (Official seal) March 26, 2015 Chapter 12 Documents Available for Reference
1. Financial Statements sealed and signed by the Legal Representative, Person in charge of accounting and the responsible person of the accounting institution (Accountant in charge);
2. The original copy sealed by the accounting firm, and signed and sealed by the certified public accountant; and 3. The original copies of all theCompany‘s documents ever disclosed in the newspaper assigned by CSRC and the manuscripts of announcements.